1933 Act File No. 33-58846
1940 Act File No. 811-7538
SECURITIES & EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
POST-EFFECTIVE AMENDMENT NO. 19 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]
OF 1940
AMENDMENT NO. 19 [X]
LORD ABBETT SECURITIES TRUST
Exact Name of Registrant as Specified in Charter
767 FIFTH AVENUE, NEW YORK, N.Y. 10153
Address of Principal Executive Office
REGISTRANT'S TELEPHONE NUMBER (212) 848-1800
Thomas F. Konop, Vice President & Assistant Secretary
767 FIFTH AVENUE, NEW YORK, N.Y. 10153
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately on filing pursuant to paragraph (b) of Rule 485
X on March 1, 1998 pursuant to paragraph (b) of Rule 485
- ----
60 days after filing pursuant to paragraph (a) of Rule 485
on (date) pursuant to paragraph (a) (i) of Rule 485
75 days after filing pursuant to paragraph (a) (ii) of Rule 485
on (date) pursuant to paragraph (a) (ii) of Rule 485
If appropriate, check the following box:
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
<PAGE>
LORD ABBETT SECURITIES TRUST
N-1A
Cross Reference Sheet
Post-Effective Amendment No.19
Form N-1A Location In Prospectus or
ITEM NO. STATEMENT OF ADDITIONAL INFORMATION
1 Cover Page
2 Fee Table
3 Financial Highlights
4 (a) (i) Cover Page
4 (a) (ii)I Investment Objectives
4 (b) (c) How We Invest
5 (a) (b) (c) Our Management; Last Page
5 (d) N/A
5 (e) Our Management
5 (f) Our Management
5 (g) Purchases
6 (a) Cover Page
6 (b) (c) (d) N/A
6 (e) Cover Page; Purchases
6 (f) (g) Dividends, Capital Gains
Distributions and Taxes
6 (h) Purchases
7 (a) Back Cover Page
7 (b) (c) (d) Purchases
8 (a) (b) (c) (d) Redemptions
Purchases, Redemptions and Shareholder Services
9 N/A
10 Cover Page
11 Cover Page -- Table of Contents
12 N/A
13 (a) (b) (c) (d) Investment Objectives and Policies
14 Trustees and Officers
15 (a) (b) (c) Trustees and Officers
16 (a) (i) Investment Advisory and Other
Services
16 (a) (ii) Trustees and Officers
16 (a) (iii) Investment Advisory and Other
Services
16 (b) Investment Advisory and Other Services
16 (c) (d) (e) (g) N/A
16 (f) Purchases, Redemptions and Shareholder Services
16 (h) Investment Advisory and Other Services
16 (i) N/A
17 (a) Portfolio Transactions
17 (b) N/A
17 (c) Portfolio Transactions
17 (d) (e) N/A
18 (a) Cover Page
18 (b) N/A
19 (a) (b) Purchases; Redemptions and Shareholder
Services; Notes to Financial Statements
<PAGE>
Form N-1A Location in Prospectus or
ITEM NO. STATEMENT OF ADDITIONAL INFORMATION
19 (c) N/A
20 Taxes
21 (a) Purchases, Redemptions and Shareholder Services
21 (b) (c) N/A
22 N/A
22 (b) Past Performance
23 Financial Statements; Supplementary
<PAGE>
LORD ABBETT SECURITIES TRUST
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
800-426-1130
Lord Abbett Securities Trust ("we" or the "Fund") is a mutual fund currently
consisting of four series. Only shares of the Growth & Income Series and the
International Series are being offered by this Prospectus. Both Series offer
three classes of shares: Class A, Class B and Class C. These classes provide
investors different investment options in purchasing shares of the Fund. See
"Purchases" for a description of these choices.
The Growth & Income Series seeks long-term growth of capital and income without
excessive fluctuations in market value. The International Series seeks long-term
capital appreciation. There can be no assurance that each Series will achieve
its objective. Within each Series, the freely transferable shares will have
equal rights with respect to dividends, assets, liquidation and voting.
This Prospectus sets forth concisely the information about the Fund and each
Series that a prospective investor should know before investing. Additional
information about the Fund and each Series has been filed with the Securities
and Exchange Commission. The Statement of Additional Information is incorporated
by reference into this Prospectus and may be obtained, without charge, by
writing to the Fund or by calling the Fund at 800-874-3733. Ask for "Part B of
the Prospectus -- the Statement of Additional Information."
The date of this Prospectus, and the date of the Statement of Additional
Information, is March 1, 1998.
PROSPECTUS
Investors should read and retain this Prospectus. Shareholder inquiries should
be made in writing to the Fund or by calling 800-821-5129. You can also make
inquiries through your broker-dealer.
Shares of the Series are not deposits or obligations of, or guaranteed or
endorsed by, any bank, and shares are not federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other agency.
An investment in the Series involves risks, including the possible loss of
principal.
CONTENTS PAGE
1 Investment Objectives 2
2 Fee Table 2
3 Financial Highlights 3
4 How We Invest 5
5 Purchases 9
6 Shareholder Services 16
7 Our Management 17
8 Dividends, Capital Gains
Distributions and Taxes 18
9 Redemptions 19
10 Performance 19
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>
1 INVESTMENT OBJECTIVES
The investment objective of the Growth & Income Series is long-term growth of
capital and income without excessive fluctuations in market value. The Growth &
Income Series normally invests in common stocks of large, seasoned companies in
sound financial condition which are expected to show above-average price
appreciation. The investment objective of the International Series is long-term
capital appreciation. The production of any current income is incidental to this
objective and the International Series also may invest in securities which do
not produce any income. The International Series normally invests primarily in
equity securities of non-U.S. issuers.
2 FEE TABLE
A summary of the expenses of each Series is set forth in the table below. The
example is not a representation of past or future expenses. Actual expenses may
be more or less than those shown.
<TABLE>
<CAPTION>
GROWTH & INCOME SERIES CLASS A CLASS B CLASS C
SHARES SHARES SHARES
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
(AS A PERCENTAGE OF OFFERING PRICE)
Maximum Sales Load(2) on Purchases
(See "Purchases") 5.75% None None
Deferred Sales Load(2)(See "Purchases") None 5% if shares are redeemed 1% if shares
before 1st anniversary are redeemed
of purchase, declining before 1st anniversary
to 1% before 6th of purchase
anniversary and
eliminated on and
after 6th anniversary(3)
ANNUAL FUND OPERATING EXPENSES(4)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (See "Our Management") 0.75% 0.75% 0.75%
12b-1 Fees (See "Purchases")(1)(2) 0.24% 1.00% 1.00%
Other Expenses (See "Our Management") 0.30% 0.30% 0.30%
Total Operating Expenses 1.29% 2.05% 2.05%
INTERNATIONAL SERIES CLASS A CLASS B CLASS C
SHARES SHARES SHARES
SHAREHOLDER TRANSACTION EXPENSES(1)
(AS A PERCENTAGE OF OFFERING PRICE) MAXIMUM
Sales Load(2) on Purchases
(See "Purchases") 5.75% None None
Deferred Sales Load(2)(See "Purchases") None 5% if shares are redeemed 1% if shares
before 1st anniversary are redeemed
of purchase, declining before 1st anniversary
to 1% before 6th of purchase
anniversary and
eliminated on and
after 6th anniversary(3)
ANNUAL FUND OPERATING EXPENSES(4)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (See "Our Management") 0.75% 0.75% 0.75%
12b-1 Fees (See "Purchases")(1)(2) 0.25% 1.00% 1.00%
Other Expenses (See "Our Management") 0.37% 0.37% 0.37%
Total Operating Expenses 1.37% 2.12% 2.12%
</TABLE>
<PAGE>
Example:Assume each Series' annual return is 5% and there is no change in the
level of expenses described above. For a $1,000 investment in each
Series, with reinvestment of all distributions, you would pay the
following total expenses assuming redemption on the last day of each
time period indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Growth & Income Series
Class A shares $70 $96 $124 $204
Class B shares $71 $94 $130 $219
Class C shares $31 $64 $110 $238
International Series
Class A shares $71 $98 $128 $213
Class B shares $71 $96 $134 $226
Class C shares $32 $66 $114 $245
You would pay the following expenses on the same investment, assuming no
redemption.
Example:
Growth & Income Series
Class A shares $70 $96 $124 $204
Class B shares $21 $64 $110 $219
Class C shares $21 $64 $110 $238
International Series
Class A shares $71 $98 $128 $213
Class B shares $21 $66 $114 $226
Class C shares $21 $66 $114 $245
<FN>
(1)Although the Series' does not, with respect to Class B and 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 applicable to Class B and Class
C shares, 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. Likewise, with respect to Class A shares, investors should be
aware that, over the long term, such maximum may be exceeded due to the Rule
12b-1 Plan applicable to Class A shares which permits each Series to pay up to
0.50% in total annual fees, half for service and the other half for
distribution.
(2)Sales "load" is referred to as sales "charge" and "deferred sales load" is
referred to as "contingent deferred sales charge" (or "CDSC") and "12b-1 fees"
which consist of a "service fee" and a "distribution fee" are referred to by
either or both of these terms where appropriate throughout this Prospectus.
(3)Class B shares will automatically convert to Class A shares on the eighth
anniversary of the purchase of Class B shares.
(4)The annual operating expenses for each of the Series are based on estimated
expenses for the current fiscal year.
The foregoing is provided to give investors a better understanding of the
expenses that are incurred by an investment in each Series.
</FN>
</TABLE>
3 FINANCIAL HIGHLIGHTS
The following financial highlights have been audited by Deloitte & Touche llp,
independent auditors, whose report thereon is incorporated by reference into the
Statement of Additional Information and may be obtained on request.
<TABLE>
<CAPTION>
GROWTH & INCOME SERIES CLASS A SHARES CLASS B SHARES
FOR THE PERIOD FOR THE PERIOD
YEAR ENDED JULY 15, 1996** JUNE 5, 1997**
PER SHARE+ OPERATING OCTOBER 31, TO TO
PERFORMANCE: 1997 OCTOBER 31, 1996 OCTOBER 31, 1997
<S> <C> <C> <C>
Net asset value, beginning of period $7.09 $6.50 $8.20
Income from investment operations
Net investment income .093 .028 --
Net realized and unrealized
gain on securities 1.781 .589 .60
Total from investment operations 1.874 .617 .60
DISTRIBUTIONS
Dividends from net investment income (.099) (.027) --
Distributions from net realized gain (.075) -- --
NET ASSET VALUE, END OF PERIOD $8.79 $7.09 $8.80
TOTAL RETURN* 26.78% 12.10%++ 7.19%++
RATIOS/SUPPLEMENTAL DATA:
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.29% .39%++ .86%++
Net investment income 1.15% .40%++ .01%++
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH & INCOME SERIES CLASS C SHARES
For the Period
Year Ended October 31, January 3, 1994**
Per Share+ Operating to
Performance: 1997 1996 1995 October 31, 1994
<S> <C> <C> <C> <C>
Net asset value, beginning of period $7.09 $6.04 $5.07 $5.00
Income from investment operations
Net investment income .032 .0949 .12 .089
Net realized and unrealized
gain on securities 1.790 1.0986 .97 .041
Total from investment operations 1.822 1.1935 1.09 .13
Distributions
Dividends from net investment income (.037) (.1035) (.12) (.06)
Distributions from net realized gain (.075) (.04) -- --
Net asset value, end of period $8.80 $7.09 $6.04 $5.07
Total Return* 26.24% 20.02% 21.83% 2.62%++
Ratios/Supplemental Data:
Ratios to Average Net Assets:
Expenses, including waiver 2.05% 1.55% 1.16% 0.61%++
Expenses, excluding waiver 2.05% 2.01% 1.91% 1.94%++
Net investment income 0.39% 1.36% 2.06% 2.03%++
GROWTH & INCOME SERIES FOR THE PERIOD
YEAR ENDED OCTOBER 31, JANUARY 3, 1994**
TO
SUPPLEMENTAL DATA FOR ALL CLASSES: 1997 1996 1995 October 31, 1994
Net assets, end of period (000) $142,992 $113,962 $32,770 $9,160
Portfolio turnover rate 36.37% 23.84% 23.17% 31.95%
Average Commissions per share
paid on equity transactions $.065 $.064 $.059 --
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL SERIES
CLASS A SHARES CLASS B SHARES CLASS C SHARES
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
DECEMBER 13, 1996** JUNE 2, 1997** JUNE 2, 1997**
PER SHARE+ OPERATING TO TO TO
PERFORMANCE: OCTOBER 31, 1997 OCTOBER 31, 1997 OCTOBER 31, 1997
<S> <C> <C> <C>
Net asset value, beginning of period $9.42 $10.26 $10.26
Income (loss) from investment operations
Net investment income (loss) .07 (.03) (.03)
Net realized and unrealized
gain on securities 1.37 .60 .60
Total from investment operations 1.44 .57 .57
Net asset value, end of period $10.86 $10.83 $10.83
Total Return* 15.21%++ 5.56%++ 5.56%++
Ratios/Supplemental Data:
Ratios to Average Net Assets:
Expenses 1.23%++ .87%++ .87%++
Net investment income (loss) 0.41%++ (0.46)%++ (0.46)%++
</TABLE>
INTERNATIONAL SERIES For the Period
December 13, 1996**
to
SUPPLEMENTAL DATA FOR ALL CLASSES: October 31, 1997
Net assets, end of period (000) $37,334
Portfolio turnover rate 29.72%
Average commission rate per share
paid on equity transactions $ .024
*Total return does not consider the effects of front-end sales or contingent
deferred sales charges.
**Commencement of operations.
+Prior to July 12, 1996 and June 2, 1997, each of the Growth & Income Series and
the International Series, respectively, had only one class of shares. That class
is now designated "Class A shares."
++Not annualized.
See Notes to Financial Statements.
<PAGE>
4 HOW WE INVEST
THE GROWTH & INCOME SERIES. The Series is intended for long-term investors who
purchase and redeem shares to meet their own financial requirements rather than
to take advantage of price fluctuations. The needs of such investors will be
best served by an investment whose growth is characterized by low fluctuations
in market value. For this reason, the Series tries to keep its assets invested
in securities which are selling at reasonable prices in relation to value and,
thus, is willing to forgo some opportunities for gains when, in the judgment of
Fund management, they carry excessive risk. Fund management tries to anticipate
major changes in the economy and select stocks which it believes will benefit
most from these changes.
The Growth & Income Series normally invests in common stocks (including
securities convertible into common stocks) of large, seasoned companies which
are expected to show above-average growth in value and which are in sound
financial condition. Although the prices of common stocks fluctuate and their
dividends vary, historically, common stocks have appreciated in value and their
dividends have increased when the companies they represent have prospered and
grown.
The Growth & Income Series is constantly balancing the opportunity for profit
against the risk of loss. In the past, very few industries have continuously
provided the best investment opportunities. Fund management believes it is
important to take a flexible approach and adjust the portfolio to reflect
changes in the opportunities for sound investments relative to the risks
assumed; therefore, it sells securities that it judges to be overpriced and
reinvests the proceeds in other securities which it believes offer better
values.
The Series may invest up to 10% of its net assets (at the time of investment) in
foreign securities. These foreign securities will be the kind described in this
Prospectus for the Series' domestic investment. It is the present intention of
Fund management that these securities be primarily traded in the United Kingdom,
Western Europe, Australia, Canada, the Far East, Latin America, and other
developed countries as may be determined from time to time. The Series also may
invest in straight bonds and other debt securities, including lower rated,
high-yield bonds, sometimes referred to as "junk bonds" with a limit of 5% of
its net assets (at the time of investment) in such lower rated (BB/Ba or lower),
high-yield bonds.
The Series does not purchase securities for trading purposes. To create reserve
purchasing power and also for temporary defensive purposes, it may invest in
short-term debt and other high-quality, fixed-income securities.
RISK FACTORS -- GROWTH & INCOME SERIES
HIGH-YIELD BONDS. The Series may invest up to 5% of its net assets (at the time
of investment), in lower rated bonds for their higher yields. In general, the
market for lower rated bonds is more limited than that for higher rated bonds
and, therefore, may be less liquid. The market prices of such lower rated bonds
may fluctuate more than those of higher rated bonds, particularly in times of
economic change and stress. In addition, because the market for lower rated
corporate debt securities has experienced wide fluctuations in the values of
certain of these securities, past experience may not provide an accurate
indication of the future performance of that market or of the frequency of
default, especially during periods of recession. Objective pricing data for
lower rated bonds may be more limited and valuation of such securities may be
more difficult and require greater reliance upon judgment when compared to
higher rated bonds.
While the market for lower rated bonds may be less sensitive to interest-rate
changes than that for higher rated bonds, the market prices of these lower rated
bonds structured as zero coupon or pay-in-kind securities may be affected to a
greater extent by such interest-rate changes and thus may be more volatile than
prices of lower rated securities periodically paying interest in cash. When
compared to higher rated bonds, lower rated bonds that include redemption prior
to maturity or call provisions may be more susceptible to refunding during
periods of falling interest rates, requiring replacement by lower yielding
securities.
Since the risk of default generally is higher among lower rated bonds, the
research and analysis of Lord Abbett are especially important in the selection
of such bonds which, if rated BB/Ba or lower, are often described as "high-yield
bonds" because of their generally higher yields and referred to as "junk bonds"
because of their greater risks. In selecting lower rated bonds for our
investment, Lord Abbett does not rely upon ratings which, in any event, evaluate
only the safety of principal and interest, not market value risk and which,
furthermore, may not accurately reflect an issuer's current financial condition.
There are no minimum rating criteria for investments in these bonds and some may
default as to principal and/or interest payments subsequent to their purchase.
Through portfolio diversification, credit analysis and attention to current
developments and trends in interest rates and economic conditions, investment
risk can be reduced, although there is no assurance that losses will not occur.
<PAGE>
THE INTERNATIONAL SERIES. Portfolio investments for the International Series
will be made in equity securities of companies domiciled in developed countries,
but investments also may be made in the securities of companies domiciled in
developing countries. Equity securities include common and preferred stocks,
convertible securities, and rights and warrants to purchase common stocks. Under
normal circumstances, at least 80% of the total assets of the Series will be
invested in such equity securities of companies which are domiciled in at least
three different countries outside the United States. The Series currently
intends to diversify investments among countries to reduce currency risk.
Although the Series will typically hold a number of diversified securities, it
does entail above-average investment risk in comparison to the U.S. stock
market.
Although the International Series intends to invest primarily in equity
securities of companies with market capitalization of less than $1 billion
listed on stock exchanges, it may also invest in equity securities of such
companies traded in over-the-counter markets, as well as large and middle
capitalization securities. Small capitalization securities involve greater risk
and the markets for such securities may be more volatile and less liquid than
those of larger securities. Securities of companies in developing countries may
pose liquidity risks. For a description of special considerations and certain
risks associated with investments in foreign issuers, see "Risk Factors -- Both
Series" below. The Series may temporarily reduce its equity holdings for
defensive purposes in response to adverse market conditions and invest in
domestic, Eurodollar and foreign short-term money market instruments. See
"Investment Objectives and Policies" in the Statement of Additional Information.
Although the International Series will not invest for short-term trading
purposes, investment securities may be sold from time to time without regard to
the length of time they have been held.
Any remaining assets of the Series not invested as described above may be
invested in certain securities or obligations as set forth in "Other Policies
Common to Both Series" below.
FOREIGN CURRENCY HEDGING TECHNIQUES. The International Series may utilize
various foreign currency hedging techniques described below.
A forward foreign currency contract involves an obligation to purchase or sell a
specific amount of a currency at a set price on a future date. The Series may
enter into forward foreign currency contracts (but not in excess of the amount
the Series has invested in non-U.S. dollar-denominated securities at the time
any such contract is entered into) in primarily two circumstances. First, when
the Series enters into a contract for the purchase or sale of a security
denominated in a foreign currency, the Series may desire to "lock in" the U.S.
dollar price of the security. By entering into a forward contract for the
purchase or sale of the amount of foreign currency involved in the underlying
security transaction, the Series will be able to protect against a possible loss
resulting from an adverse change in the relationship between the U.S. dollar and
the subject foreign currency during the period between the date of purchase or
sale and the date of settlement.
Second, when Fund management believes that the currency of a particular foreign
country may suffer a decline against the U.S. dollar, the International Series
may enter into a forward contract to sell the amount of foreign currency
approximating the value of some or all of the Series' portfolio securities
denominated in such foreign currency or, in the alternative, the Series may use
a cross-currency-hedging technique whereby it enters into such a forward
contract to sell another currency (obtained in exchange for the currency in
which the portfolio securities are denominated if such securities are sold)
which it expects to decline in a similar manner but which has a lower
transaction cost. Precise matching of the forward contract and the value of the
securities involved will generally not be possible since the future value of
such securities denominated in foreign currencies will change as a consequence
of market movements in the value of those securities between the date the
forward contract is entered into and the date the contract matures. The Series
intends to enter into such forward contracts under this second circumstance
periodically.
The Series also may purchase foreign currency put options and write foreign
currency call options on U.S. exchanges or U.S. over-the-counter markets. A put
option gives the Series, upon payment of a premium, the right to sell a currency
at the exercise price until the expiration of the option and serves to insure
against adverse currency price movements in the underlying portfolio assets
denominated in that currency. The premiums paid for such foreign currency put
options will not exceed 5% of the net assets of the Series.
<PAGE>
Exchange-listed options markets in the United States include several major
currencies, and trading may be thin and illiquid. A number of major investment
firms trade unlisted options which are more flexible than exchange-listed
options with respect to strike price and maturity date. These unlisted options
generally are available on a wider range of currencies, including those of most
of the developed countries mentioned above. Unlisted foreign-currency options
generally are less liquid than listed options and involve the credit risk
associated with the individual issuer. Unlisted options together with other
illiquid securities may comprise no more than 15% of the Series' net assets.
A foreign currency call option written by the Series gives the purchaser, upon
payment of a premium, the right to purchase from the Series a currency at the
exercise price until the expiration of the option. The Series may write a call
option on a foreign currency only in conjunction with a purchase of a put option
on that currency. Such a strategy is designed to reduce the cost of downside
currency protection by limiting currency appreciation potential. The face value
of such writing or cross-hedging (described above) may not exceed 90% of the
value of the securities denominated in such currency (a) invested in by the
Series to cover such call writing or (b) to be crossed.
Limitations imposed by the Internal Revenue Code on regulated investment
companies may restrict the Series' ability to engage in transactions in options,
forward contracts and cross hedges.
The Series' custodian will segregate cash or permitted securities belonging to
the Series with respect to its assets committed to (a) writing options, (b)
forward foreign currency contracts and (c) cross hedges entered into by the
Series. If the value of the securities segregated declines, additional cash or
permitted securities will be added on a daily basis (i.e., marked to market), so
that the segregated amount will not be less than the amount of the Series'
commitments with respect to such written options, forward foreign currency
contracts and cross hedges.
FINANCIAL FUTURES AND OPTIONS THEREON. The International Series may deal in
financial futures transactions with respect to the type of securities described
in this Prospectus, including indices of such securities and options on such
financial futures and indices. The Series will not enter into any futures
contracts, or options thereon, if the aggregate market value of the securities
covered by futures contracts plus options on such financial futures exceeds 50%
of the Series' total assets.
INVESTMENT FUNDS. Some emerging countries have laws and regulations that
currently preclude direct foreign investment in the securities of their
companies. However, indirect foreign investment in the securities of such
countries is permitted through investment funds which have been specifically
authorized. The International Series may invest (normally not more than 5% of
the Series' total assets) in these investment funds subject to the provisions of
the Investment Company Act of 1940, as amended, and other applicable
restrictions as discussed herein or in the Statement of Additional Information.
If the Series invests in such investment funds, the Series' shareholders will
bear not only their proportionate share of the expenses of the Series (including
operating expenses and the fees of Lord Abbett), but also will indirectly bear
similar expenses of the underlying investment funds.
DEPOSITORY RECEIPTS. The International Series may invest in American Depository
Receipts ("ADRs"), Global Depository Receipts ("GDRs"), European Depository
Receipts ("EDRs") and other Depository Receipts (which, together with ADRs, GDRs
and EDRs, are hereinafter collectively referred to as "Depository Receipts"), to
the extent that such Depository Receipts become available. ADRs are securities,
typically issued by a U.S. financial institution (a "depository"), that evidence
ownership interests in a security or a pool of securities issued by a foreign
issuer (the "underlying issuer") and deposited with the depository. ADRs may be
established by a depository without participation by the underlying issuer.
GDRs, EDRs and other types of Depository Receipts are typically issued by
foreign depositories, although they also may be issued by U.S. depositories, and
evidence ownership interests in a security or pool of securities issued by
either a foreign or a U.S. corporation. Generally, Depository Receipts in
registered form are designed for use in the U.S. securities market and
Depository Receipts in bearer form are designed for use in securities markets
outside the United States. The Series may invest in sponsored and unsponsored
Depository Receipts. For purposes of the International Series' investment
policies, the Series' investments in Depository Receipts will be deemed to be
investments in the underlying securities.
<PAGE>
RISK FACTORS -- BOTH SERIES
SIZE. If either Series remains small, there is risk that redemptions of
a Series' shares may (a) cause portfolio securities of that Series to be sold
prematurely (at a loss or gain, depending upon the circumstances) or (b) hamper
or prevent a contemplated portfolio security purchase by that Series.
FOREIGN INVESTMENTS. Investment in either Series requires consideration of
certain factors that are not normally involved in investments in U.S.
securities. Generally, at least 80% of the assets of the International Series
and up to 10% of the net assets of the Growth & Income Series will be
denominated or traded in foreign currencies. Accordingly, a change in the value
of any foreign currency relative to the U.S. dollar will result in a
corresponding change in the U.S. dollar value of a Series' assets denominated or
traded in that currency. The performance of each Series will be measured in U.S.
dollars, the base currency of each Series. Securities markets of foreign
countries in which a Series may invest generally are not subject to the same
degree of regulation as the U.S. markets and may be more volatile and less
liquid than the major U.S. markets. Lack of liquidity may affect a Series'
ability to purchase or sell large blocks of securities and thus obtain the best
price. There may be less publicly-available information on publicly-traded
companies, banks and governments in foreign countries than is generally the case
for such entities in the United States. The lack of uniform accounting standards
and practices among countries impairs the validity of direct comparisons of
valuation measures (such as price/earnings ratios) for securities in different
countries. In addition, a Series may incur costs associated with currency
hedging and the conversion of foreign currency into U.S. dollars and may be
adversely affected by restrictions on the conversion or transfer of foreign
currency. Other considerations include political and social instability,
expropriation, higher transaction costs and different securities settlement
practices. Settlement periods for foreign securities, which are sometimes longer
than those for securities of U.S. issuers, may affect portfolio liquidity. These
different settlement practices may cause missed purchasing opportunities and/or
the loss of interest on money market and debt investments pending further equity
or long-term debt investments. In addition, foreign securities held by a Series
may be traded on days that the Series do not value their portfolio securities,
such as Saturdays and customary U.S. business holidays, and, accordingly, a
Series' net asset value may be significantly affected on days when shareholders
do not have access to the Series. Many of the emerging or developing countries
may have higher and more rapidly fluctuating inflation rates, a higher demand
for capital investment, a higher dependence on export markets for their major
industries, and a greater need to develop basic economic infrastructures than
more developed countries. Also, it may be more difficult to obtain a judgment in
a court outside the United States.
OTHER POLICIES COMMON TO BOTH SERIES
ILLIQUID SECURITIES. Each Series may invest up to 15% of its net assets in
illiquid securities.
BORROWING. Each Series may borrow from banks (as defined in the Investment
Company Act of 1940, as amended (the "Act")) in amounts up to 33 1/3% of its
total assets (including the amount borrowed). Each Series may borrow up to an
additional 5% of its total assets for temporary purposes. Each Series may obtain
such short-term credit as may be necessary for the clearance of purchases and
sales of portfolio securities.
DIVERSIFICATION. Each Series intends to meet the diversification rules under
Subchapter M of the Internal Revenue Code. The Growth & Income and the
International Series met the diversification rules under Subchapter M for the
fiscal year ended October 31, 1997 and the period December 13, 1996 through
October 31, 1997, respectively. Generally, this requires, at the end of each
quarter of the taxable year, that (a) not more than 25% of each Series' total
assets be invested in any one issuer and (b) with respect to 50% of each Series'
total assets, no more than 5% of such Series' total assets be invested in any
one issuer except U.S. Government securities.
Each Series, as a "diversified" investment company, is prohibited, with respect
to 75% of the value of its total assets, from investing more than 5% of its
total assets in securities of any one issuer other than U.S. Government
securities. For diversification purposes, the identification of an "issuer" for
the fixed-income portion of a Series' assets will be determined on the basis of
the source of assets and revenues committed to meeting interest and principal
payments of the securities. When the assets and revenues of a sovereign state's
political subdivision are separate from those of the sovereign state government
creating the subdivision, and the security is backed only by the assets and
revenues of the subdivision, then the subdivision would be considered the sole
issuer. Similarly, if a revenue bond is backed only by the assets and revenues
of a nongovernmental user, then such user would be considered the sole issuer.
<PAGE>
WHEN-ISSUED OR DELAYED DELIVERY SECURITIES. Either Series may purchase
securities on a when-issued basis and, while awaiting delivery and before paying
for them ("settlement"), normally may invest in short-term securities. Each
Series does not start earning interest on these when-issued securities until
settlement and often they are sold prior to settlement. During the period
between purchase and settlement, the value of the securities will fluctuate and
assets consisting of cash and/or marketable securities marked to market daily in
an amount sufficient to make payment at settlement will be segregated at our
custodian in order to pay for the commitment. There is a risk that market yields
available at settlement may be higher than yields obtained on the purchase date,
which could result in depreciation of value.
The other debt securities in which each Series may invest include, but are not
limited to, domestic and foreign fixed- and floating-rate notes, bonds,
debentures, convertibles, certificates, warrants, commercial paper and principal
and interest pass-through instruments issued by governments, authorities,
partnerships, corporations, trust companies, banks and bank holding companies,
and banker's acceptances, certificates of deposit, time deposits and deposit
notes issued by domestic and foreign banks.
COVERED CALL OPTIONS. Each Series may write call options on securities it owns,
provided that the securities we hold to cover such options do not represent more
than 10% of net assets (in the case of the Growth & Income Series) and 5% of net
assets (in the case of the International Series). A call option on stock gives
the purchaser of the option, upon payment of a premium to the writer of the
option, the right to call upon the writer to deliver a specified number of
shares of a stock on or before a fixed date at a predetermined price.
It is currently intended that no more than 5% of each Series' net assets will be
at risk in the use of any one of the policies identified below.
RIGHTS AND WARRANTS. Each Series may invest in rights and warrants to purchase
securities provided that, at the time of the acquisition, its investment in
warrants, valued at the lower of cost or market, would not exceed 5% of the
Series' total assets. Warrants which are not listed on the New York or American
Stock Exchange or a major foreign exchange may not exceed 2% of a Series' total
assets.
REPURCHASE AGREEMENTS. Each Series may enter into repurchase agreements with
respect to a security. A repurchase agreement is a transaction by which a Series
acquires a security and simultaneously commits to resell that security to the
seller (a bank or securities dealer) at an agreed-upon price on an agreed-upon
date. Such repurchase agreement must, at all times, be collateralized by cash or
U.S. Government securities having a value equal to, or in excess of, the value
of the repurchase agreement.
CLOSED-END INVESTMENT COMPANIES. Each Series may invest in shares of closed-end
investment companies if bought in the primary or secondary market with a fee or
commission no greater than the customary broker's commission. Shares of such
investment companies sometimes trade at a discount or premium in relation to
their net asset value and there may be duplication of fees, for example, to the
extent that a Series and the closed-end investment company both charge a
management fee.
LENDING OF PORTFOLIO SECURITIES. Each Series may seek to earn income by lending
its portfolio securities if the loan is collateralized and its terms are in
accordance with regulatory requirements.
PORTFOLIO TURNOVER. The portfolio turnover rate for the Growth & Income Series
for the fiscal year ended October 31, 1997 was 36.37%. The portfolio turnover
rate for the International Series for the fiscal period December 13, 1996
through ended October 31, 1997 was 29.72%.
CHANGE OF INVESTMENT OBJECTIVES AND POLICIES. Neither Series will change its
investment objective without shareholder approval. If a Series determines that
its objective can best be achieved by a change in investment policy or strategy,
it may make such change without shareholder approval by disclosing it in its
prospectus.
<PAGE>
5 PURCHASES
ALTERNATIVE SALES ARRANGEMENTS
CLASSES OF SHARES. Each Series offers investors three different classes of
shares. The different classes of shares represent investments in the same
portfolio of securities but are subject to different expenses and are likely to
have different share prices. Investors should read this section carefully to
determine which class represents the best investment option for their particular
situation.
CLASS A SHARES. If you buy Class A shares, you pay an initial sales charge on
investments of less than $1 million (or on investments for employer-sponsored
retirement plans under the Internal Revenue Code (hereinafter referred to as
"Retirement Plans") with less than 100 eligible employees). If you purchase
Class A shares as part of an investment of at least $1 million (or for
Retirement Plans with at least 100 eligible employees) in shares of one or more
Lord Abbett-sponsored funds, you will not pay an initial sales charge, but if
you redeem any of those shares within 24 months after the month in which you buy
them, you may pay to the Fund a contingent deferred sales charge ("CDSC") of 1%.
Class A shares are subject to service and distribution fees that are currently
estimated to total approximately .24 of 1% annually for the Growth & Income
Series and .25 of 1% for the International Series of the annual net asset value
of the Class A shares. The initial sales charge rates, the CDSC and the Rule
12b-1 Plan applicable to the Class A shares are described under "General" below.
CLASS B SHARES. If you buy Class B shares, you pay no sales charge at the time
of purchase, but if you redeem your shares before the sixth anniversary of
buying them, you will normally pay a CDSC to Lord Abbett Distributor llc ("Lord
Abbett Distributor"). That CDSC varies depending on how long you own shares.
Class B shares are subject to service and distribution fees at an annual rate of
1% of the annual net asset value of the Class B shares. The CDSC and the Rule
12b-1 Plan applicable to the Class B shares are described under "General" below.
CLASS C SHARES. If you buy Class C shares, you pay no sales charge at the time
of purchase, but if you redeem your shares before the first anniversary of
buying them, you will normally pay the Fund a CDSC of 1%. Class C shares are
subject to service and distribution fees at an annual rate of 1% of the annual
net asset value of the Class C shares. The CDSC and the Rule 12b-1 Plan
applicable to the C shares are described under "General" below.
WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that a Series is an
appropriate investment for you, the decision as to which class of shares is
better suited to your needs depends on a number of factors which you should
discuss with your investment professional. Class-specific expenses and the
effect of the different types of sales charges on your investment will affect
your investment results over time. The most important factors are how much you
plan to invest and how long you plan to hold your investment. If your goals and
objectives change over time and you plan to purchase additional shares, you
should re-evaluate those factors to see if you should consider another class of
shares.
In the following discussion, to help provide you and your investment
professional with a framework in which to choose a class, we have made some
assumptions using a hypothetical investment in a Series.
We used the sales charge rates that apply to Class A, Class B and Class C, and
considered the effect of the higher distribution fees on Class B and Class C
expenses (which will affect your investment return). Of course, the actual
performance of your investment cannot be predicted and will vary, based on a
Series' actual investment returns, the operating expenses borne by each class of
shares, and the class of shares you purchase. The factors briefly discussed
below are not intended to be investment advice, guidelines or recommendations,
because each investor's financial considerations are different. The discussion
below of the factors to consider in purchasing a particular class of shares
assumes that you will purchase only one class of shares and not a combination of
shares of different classes.
HOW LONG DO YOU EXPECT TO HOLD YOUR INVESTMENT? While future financial needs
cannot be predicted with certainty, knowing how long you expect to hold your
investment will assist you in selecting the appropriate class of shares. For
example, over time, the reduced sales charges available for larger purchases of
Class A shares may offset the effect of paying an initial sales charge on your
investment, compared to the effect over time of higher class-specific expenses
on Class B or Class C shares for which no initial sales charge is paid. Because
of the effect of class-based expenses, your choice should also depend on how
much you plan to invest.
INVESTING FOR THE SHORT TERM. If you have a short-term investment horizon (that
is, you plan to hold your shares for not more than six years), you should
probably consider purchasing Class A or Class C shares rather than Class B
shares. This is because of the effect of the Class B CDSC if you redeem before
the sixth anniversary of your purchase, as well as the effect of the Class B
distribution fee on the investment return for that class in the short term.
Class C shares might be the appropriate choice (especially for investments of
less than $100,000), because there is no initial sales charge on Class C shares,
and the CDSC does not apply to amounts you redeem after holding them one year.
<PAGE>
However, if you plan to invest more than $100,000 for the short term, then the
more you invest and the more your investment horizon increases toward six years,
the more attractive the Class A share option may become. This is because the
annual distribution fee on Class C shares will have a greater impact on your
account over the longer term than the reduced front-end sales charge available
for larger purchases of Class A shares. For example, Class A might be more
appropriate than Class C for investments of more than $100,000 expected to be
held for 5 or 6 years (or more). For investments over $250,000 expected to be
held 4 to 6 years (or more), Class A shares may become more appropriate than
Class C. If you are investing $500,000 or more, Class A may become more
desirable as your investment horizon approaches 3 years or more.
For most investors who invest $1 million or more or for Retirement Plans with at
least 100 eligible employees, in most cases Class A shares will be the most
advantageous choice, no matter how long you intend to hold your shares.
INVESTING FOR THE LONGER TERM. If you are investing for the longer term (for
example, to provide for future college expenses for your child) and do not
expect to need access to your money for seven years or more, Class B shares may
be an appropriate investment option, if you plan to invest less than $100,000.
If you plan to invest more than $100,000 over the long term, Class A shares will
likely be more advantageous than Class B shares or Class C shares, as discussed
above, because of the effect of the expected lower expenses for Class A shares
and the reduced initial sales charges available for larger investments in Class
A shares under the Fund's Rights of Accumulation.
Of course, these examples are based on approximations of the effect of current
sales charges and expenses on a hypothetical investment over time, and should
not be relied on as rigid guidelines.
You should discuss your purchase order for a specific class of shares with your
investment professional.
ARE THERE DIFFERENCES IN ACCOUNT FEATURES THAT MATTER TO YOU? Some account
features are available in whole or in part to Class A, Class B and Class C
shareholders. Other features (such as Systematic Withdrawal Plans) might not be
advisable in non-Retirement Plan accounts for Class B shareholders (because of
the effect of the CDSC on the entire amount of a withdrawal if it exceeds 12%
annually) and in any account for Class C shareholders during the first year of
share ownership (due to the CDSC on withdrawals during that year). See
"Systematic Withdrawal Plan" under "Shareholder Services" for more information
about the 12% annual waiver of the CDSC. You should carefully review how you
plan to use your investment account before deciding which class of shares you
buy. For example, the dividends payable to Class B and Class C shareholders will
be reduced by the expenses borne solely by each of these classes, such as the
higher distribution fee to which Class B and Class C shares are subject, as
described below.
HOW DOES IT AFFECT PAYMENTS TO MY BROKER? A salesperson, such as a broker, or
any other person who is entitled to receive compensation for selling Fund shares
may receive different compensation for selling one class than for selling
another class. As discussed in more detail below, such compensation is primarily
paid at the time of sale in the case of Class A and B shares and is paid over
time, so long as shares remain outstanding, in the case of Class C shares. It is
important that investors understand that the primary purpose of the CDSC for the
Class B shares and the distribution fee for Class B and Class C shares is the
same as the purpose of the front-end sales charge on sales of Class A shares: to
compensate brokers and other persons selling such shares. The CDSC, if payable,
supplements the Class B distribution fee and reduces the Class C distribution
fee expenses for each Series and Class C shareholders.
GENERAL
HOW MUCH MUST YOU INVEST? You may buy our shares through any independent
securities dealer having a sales agreement with Lord Abbett Distributor llc
("Lord Abbett Distributor"), our exclusive selling agent. Place your order with
your investment dealer or send it to Lord Abbett Securities Trust (P.O. Box
419100, Kansas City, Missouri 64141). The minimum initial investment for each
Series is $1,000, except for Invest-A-Matic ($250 initial and $50 subsequent
minimum), Div-Move ($50 minimum) and Individual Retirement Accounts ($250
minimum).
<PAGE>
For Retirement Plans there is no minimum initial investment required. See
"Shareholder Services." For information regarding the proper form of a purchase
or redemption order, call the Fund at 800-821-5129. This offering may be
suspended, changed or withdrawn. Lord Abbett Distributor reserves the right to
reject any order.
The net asset value of our shares is calculated every business day as of the
close of the New York Stock Exchange ("NYSE") by dividing net assets by the
number of shares outstanding. Securities are valued at their market value as
more fully described in the Statement of Additional Information.
BUYING SHARES THROUGH YOUR DEALER. Orders for shares received by the Fund prior
to the close of the NYSE, or received by dealers prior to such close and
received by Lord Abbett Distributor prior to the close of its business day, will
be confirmed at the applicable public offering price effective at such NYSE
close. Orders received by dealers after the NYSE closes and received by Lord
Abbett Distributor in proper form prior to the close of its next business day
are executed at the applicable public offering price effective as of the close
of the NYSE on that next business day. The dealer is responsible for the timely
transmission of orders to Lord Abbett Distributor. A business day is a day on
which the NYSE is open for trading.
Lord Abbett Distributor may, for specified periods, allow dealers to retain the
full sales charge for sales of shares during such periods, or pay an additional
concession to a dealer who, during a specified period, sells a minimum dollar
amount of our shares and/or shares of other Lord Abbett-sponsored funds. In some
instances, such additional concessions will be offered only to certain dealers
expected to sell significant amounts of shares. Lord Abbett Distributor may,
from time to time, implement promotions under which Lord Abbett Distributor will
pay a fee to dealers with respect to certain purchases not involving imposition
of a sales charge. Additional payments may be paid from Lord Abbett
Distributor's own resources and will be made in the form of cash or, if
permitted, non-cash payments. The non-cash payments will include business
seminars at resorts or other locations, including meals and entertainment, or
the receipt of merchandise. The cash payments will include payment of various
business expenses of the dealer. In selecting dealers to execute portfolio
transactions for the Fund's portfolio, if two or more dealers are considered
capable of obtaining best execution, we may prefer the dealer who has sold our
shares and/or shares of other Lord Abbett-sponsored funds.
BUYING CLASS A SHARES. The offering price of Class A shares is based on the
per-share net asset value next computed after your order is accepted plus a
sales charge as follows.
Sales Charge as a Dealer's
Percentage of: Concession
as a To Compute
Net Percentage Offering
Offering Amount of Offering Price, Divide
Size of Investment Price Invested Price NAV by
Less than $50,000 5.75% 6.10% 5.00% .9425
$50,000 to $99,999 4.75% 4.99% 4.00% .9525
$100,000 to $249,999 3.75% 3.90% 3.25% .9625
$250,000 to $499,999 2.75% 2.83% 2.25% .9725
$500,000 to $999,999 2.00% 2.04% 1.75% .9800
$1,000,000 or more No Sales Charge 1.00%+ 1.0000
+Authorized institutions receive concessions on purchases made by a retirement
plan, or other qualified purchaser within a 12-month period (beginning with the
first net asset value purchase) as follows: 1.00% on purchases of $5 million,
0.55% of the next $5 million, 0.50% of the next $40 million and 0.25% on
purchases over $50 million. See "Class A Rule 12b-1 Plan" below.
CLASS A SHARE VOLUME DISCOUNTS. This section describes several ways to qualify
for a lower sales charge when purchasing Class A shares if you inform Lord
Abbett Distributor or the Fund that you are eligible at the time of purchase.
(1) Any purchaser (as described below) may aggregate a Class A share purchase in
the Fund with any share purchases of any other eligible Lord Abbett-sponsored
fund, together with the current value at maximum offering price of any shares in
the Fund and in any eligible Lord Abbett-sponsored funds held by the purchaser.
(Holdings in the following funds are not eligible for the above rights of
accumulation: Lord Abbett Equity Fund ("LAEF"), Lord Abbett Series Fund
("LASF"), any series of Lord Abbett Research Fund not offered to the general
public ("LARF") and Lord Abbett U.S. Government Securities Money Market Fund
("GSMMF"), except for holdings in GSMMF which are attributable to any shares
exchanged from a Lord Abbett-sponsored fund.) (2) A purchaser may sign a
<PAGE>
non-binding 13-month statement of intention to invest $50,000 or more in any
shares of the Fund or in any of the above eligible funds. If the intended
purchases are completed during the period, the total amount of your intended
purchases of any shares will determine the reduced sales charge rate for the
Class A shares purchased during the period. If not completed, each Class A share
purchase will be at the sales charge for the aggregate of the actual share
purchases. Shares issued upon reinvestment of dividends or distributions are not
included in the statement of intention. The term "purchaser" includes (i) an
individual, (ii) an individual and his or her spouse and children under the age
of 21 and (iii) a trustee or other fiduciary purchasing shares for a single
trust estate or single fiduciary account (including a pension, profit-sharing,
or other employee benefit trust qualified under Section 401 of the Internal
Revenue Code -- more than one qualified employee benefit trust of a single
employer, including its consolidated subsidiaries, may be considered a single
trust, as may qualified plans of multiple employers registered in the name of a
single bank trustee as one account), although more than one beneficiary is
involved.
CLASS A SHARE NET ASSET VALUE PURCHASES. Our Class A shares may be purchased at
net asset value by our directors, employees of Lord Abbett, employees of our
shareholder servicing agent and employees of any securities dealer having a
sales agreement with Lord Abbett Distributor who consents to such purchases or
by the trustee or custodian under any pension or profit-sharing plan or Payroll
Deduction IRA established for the benefit of such persons or for the benefit of
any national securities trade organization to which Lord Abbett or Lord Abbett
Distributor belongs or any company with an account(s) in excess of $10 million
managed by Lord Abbett on a private-advisory-account basis. For purposes of this
paragraph, the terms "trustees" and "employees" include a trustee's or
employee's spouse (including the surviving spouse of a deceased trustee or
employee). The terms "trustees" and "employees of Lord Abbett" also include
other family members and retired trustees and employees. Our Class A shares also
may be purchased at net asset value (a) at $1 million or more, (b) with
dividends and distributions on Class A shares of other Lord Abbett-sponsored
funds, except for dividends and distributions on shares of LARF, LAEF and LASF,
(c) under the loan feature of the Lord Abbett-sponsored prototype 403(b) plan
for Class A share purchases representing the repayment of principal and
interest, (d) by certain unaffiliated authorized brokers, dealers, registered
investment advisers or other financial institutions who have entered into an
agreement with Lord Abbett Distributor in accordance with certain standards
approved by Lord Abbett Distributor, providing specifically for the use of our
Class A shares in particular investment products made available for a fee to
clients of such brokers, dealers, registered investment advisers and other
financial institutions ("mutual fund wrap fee programs"), (e) by employees,
partners and owners of unaffiliated consultants and advisers to Lord Abbett,
Lord Abbett Distributor or Lord Abbett-sponsored funds who consent to such
purchase if such persons provide services to Lord Abbett, Lord Abbett
Distributor or such funds on a continuing basis and are familiar with such fund
and (f) through Retirement Plans with at least 100 eligible employees.
There are no minimum initial or subsequent investment requirements for the
above-mentioned mutual fund wrap-fee programs.
CLASS A RULE 12B-1 PLAN. The Fund has adopted a Class A share Rule 12b-1 Plan on
behalf of each Series (the "A Plans," each, an "A Plan") which authorizes the
payment of fees to authorized institutions (except as to certain accounts for
which tracking data is not available) in order to provide additional incentives
for them (a) to provide continuing information and investment services to their
Class A shareholder accounts and otherwise to encourage those accounts to remain
invested in the Series and (b) to sell Class A shares of the Series. Under each
A Plan, in order to save on the expense of shareholders' meetings and to provide
flexibility to the Board of Trustees, the Board, including a majority of the
outside trustees who are not "interested persons" of each Series as defined in
the Act, is authorized to approve annual fee payments from a Series' Class A
assets of up to 0.50 of 1% of the average net of such assets consisting of
distribution and service fees, each at a maximum annual rate not exceeding 0.25
of 1% (the "Fee Ceiling"). Institutions and persons permitted by law to receive
such fees are "authorized institutions."
In addition, the Board has approved for those authorized institutions which
qualify, a supplemental annual distribution fee equal to 0.10% of the average
daily net asset value of the Class A shares serviced by authorized institutions
which have a satisfactory program for the promotion and retention of such shares
satisfying Lord Abbett Distributor. Class A shares held pursuant to a
satisfactory program would, for example, (i) constitute a significant percentage
of the Fund's net assets, (ii) be held for a substantial length of time and/or
(iii) have a lower than average redemption rate.
Under the A Plans, the Board has approved payments by the Series to Lord Abbett
Distributor which uses or passes on to authorized institutions (1) an annual
service fee (payable quarterly) of .25% of the average daily net asset value of
the Class A shares serviced by authorized institutions and (2) a one-time
distribution fee of up to 1% (reduced according to the following schedule: 1% of
the first $5 million, .55% of the next $5 million, .50% of the next $40 million
and .25% over $50 million),
<PAGE>
payable at the time of sale on all Class A shares sold during any 12-month
period starting from the day of the first net asset value sale (i) at the $1
million level by authorized institutions, including sales qualifying at such
level under the rights of accumulation and statement of intention privileges or
(ii) through Retirement Plans with at least 100 eligible employees.
Under the A Plans, Lord Abbett Distributor is permitted to use payments received
to provide continuing services to Class A shareholder accounts not serviced by
authorized institutions and, with Board approval, to finance any activity which
is primarily intended to result in the sale of Class A shares. Any such payments
are subject to the Fee Ceiling. Any payments under the Plans not used by Lord
Abbett Distributor in this manner are passed on to authorized institutions.
Holders of Class A shares on which the 1% sales distribution fee has been paid
may be required to pay to the Series on behalf of its Class A shares a CDSC of
1% of the original cost or the then net asset value, whichever is less, of all
Class A shares so purchased which are redeemed out of the Lord Abbett-sponsored
family of funds on or before the end of the twenty-fourth month after the month
in which the purchase occurred. (Exceptions are made for redemptions by
Retirement Plans due to any benefit payment such as plan loans, hardship
withdrawals, death, retirement or separation from service with respect to plan
participants or the distribution of any excess contributions. If the Class A
shares have been exchanged into another Lord Abbett-sponsored fund and are
thereafter redeemed out of the Lord Abbett family of funds on or before the end
of such twenty-fourth month, the charge will be collected for the Series' Class
A shares by the other fund. The Series will collect such a charge for other Lord
Abbett-sponsored funds in a similar situation.)
BUYING CLASS B SHARES. Class B shares are sold at net asset value per share
without an initial sales charge. However, if Class B shares are redeemed for
cash before the sixth anniversary of their purchase, a CDSC may be deducted from
the redemption proceeds. That sales charge will not apply to shares purchased by
the reinvestment of dividends or capital gains distributions. The charge will be
assessed on the lesser of the net asset value of the shares at the time of
redemption or the original purchase price. The Class B CDSC is paid to Lord
Abbett Distributor to compensate it for its services rendered in connection with
the distribution of Class B shares, including the payment and financing of sales
commissions. See "Class B Rule 12b-1 Plan" below.
To determine whether the CDSC applies to a redemption, the Fund redeems shares
in the following order: (1) shares acquired by reinvestment of dividends and
capital gains distributions, (2) shares held until the sixth anniversary of
their purchase or later, and (3) shares held the longest before the sixth
anniversary of their purchase.
The amount of the CDSC will depend on the number of years since you invested and
the dollar amount being redeemed, according to the following schedule.
Anniversary
of the Day on Contingent Deferred
Which the Purchase Sales Charge on
Order Was Accepted Redemptions
(As % of Amount
On Before Subject to Charge)
1st 5.0%
1st 2nd 4.0%
2nd 3rd 3.0%
3rd 4th 3.0%
4th 5th 2.0%
5th 6th 1.0%
on or after the None
6th anniversary
In the table, an "anniversary" is the 365th day subsequent to a purchase or a
prior anniversary. All purchases are considered to have been made on the
business day the purchase was made. See "Buying Shares Through Your Dealer"
above.
If Class B shares are exchanged into the same class of another Lord
Abbett-sponsored fund and the new shares are subsequently redeemed for cash
before the sixth anniversary of the original purchase, the CDSC will be payable
on the new shares on the basis of the time elapsed from the original purchase.
The Series will collect such a charge for other Lord Abbett-sponsored funds in a
similar situation.
WAIVER OF CLASS B SALES CHARGES. The Class B CDSC will not be applied to shares
purchased in certain types of transactions nor will it apply to shares redeemed
in certain circumstances as described below.
<PAGE>
The Class B CDSC will be waived for redemptions of shares (i) in connection with
the Systematic Withdrawal Plan and Div-Move services, as described in more
detail under "Shareholder Services" below; (ii) by Retirement Plans due to any
benefit payment such as plan loans, hardship withdrawals, death, retirement or
separation from service with respect to plan participants or the distribution of
any excess contributions, (iii) in connection with the death of an individual
shareholder (a natural person), and (iv) in connection with mandatory
distributions under 403(b) plans and individual retirement accounts. If Class B
shares represent a part of an individual's total IRA or 403(b) investment, the
CDSC waiver is available only for that portion of a mandatory distribution which
bears the same relation to the entire mandatory distribution as the B share
investment bears to the total investment.
CLASS B RULE 12B-1 PLAN. The Fund has adopted a Class B share Rule 12b-1 Plan on
behalf of each Series (the "B Plans," each a "B Plan") under which the Series
periodically pays (except as to certain accounts for which tracking data is not
available) Lord Abbett Distributor (i) an annual service fee of 0.25 of 1% of
the average daily net asset value of the Class B shares and (ii) an annual
distribution fee of 0.75 of 1% of the average daily net asset value of the Class
B shares that are outstanding for less than 8 years.
Lord Abbett Distributor uses the service fee to compensate authorized
institutions for providing personal services for accounts that hold Class B
shares. Those services are primarily similar to those provided under the A Plan,
described above.
Lord Abbett Distributor pays an up-front payment to authorized institutions
totaling 4%, consisting of 0.25% for service and 3.75% for a sales commission as
described below.
Lord Abbett Distributor pays the 0.25% service fee to authorized institutions in
advance for the first year after Class B shares have been sold by the authorized
institutions. After the shares have been held for a year, Lord Abbett
Distributor pays the service fee on a quarterly basis. Lord Abbett Distributor
is entitled to retain such service fee payable under the B Plan with respect to
accounts for which there is no authorized institution of record or for which
such authorized institution did not qualify. Although not obligated to do so,
Lord Abbett Distributor may waive receipt from the Series of part or all of the
service fee payments.
The 0.75% annual distribution fee is paid to Lord Abbett Distributor to
compensate it for its services rendered in connection with the distribution of
Class B shares, including the payment and financing of sales commissions.
Although Class B shares are sold without a front-end sales charge, Lord Abbett
Distributor pays authorized institutions responsible for sales of Class B shares
a sales commission of 3.75% of the purchase price. This payment is made at the
time of sale from Lord Abbett Distributor's own resources. Lord Abbett has made
arrangements to finance these commission payments, which arrangements include
non-recourse assignments by Lord Abbett Distributor to the financing party of
such distribution and CDSC payments which are made to Lord Abbett Distributor by
shareholders who redeem their Class B shares within six years of their purchase.
The distribution fee and CDSC payments described above allow investors to buy
Class B shares without a front-end sales charge while allowing Lord Abbett
Distributor to compensate authorized institutions that sell Class B shares. The
CDSC is intended to supplement Lord Abbett Distributor's reimbursement for the
commission payments it has made with respect to Class B shares and its related
distribution and financing costs. The distribution fee payments are at a fixed
rate and the CDSC payments are of a nature that, during any year, both forms of
payment may not be sufficient to reimburse Lord Abbett Distributor for its
actual expenses. The Series is not liable for any expenses incurred by Lord
Abbett Distributor in excess of (i) the amount of such distribution fee payments
to be received by Lord Abbett Distributor and (ii) unreimbursed distribution
expenses of Lord Abbett Distributor incurred in a prior plan year, subject to
the right of the Board of Trustees or shareholders to terminate the B Plan. Over
the long term, the expenses incurred by Lord Abbett Distributor are likely to be
greater than such distribution fee and CDSC payments. Nevertheless, there exists
a possibility that for a short-term period Lord Abbett Distributor may not have
sufficient expenses to warrant reimbursement by receipt of such distribution fee
payments. Although Lord Abbett Distributor undertakes not to make a profit under
the B Plan, the B Plan is considered a compensation plan (i.e., distribution
fees are paid regardless of expenses incurred) in order to avoid the possibility
of Lord Abbett Distributor not being able to receive distribution fees because
of a temporary timing difference between its incurring expenses and receipt of
such distribution fees.
<PAGE>
AUTOMATIC CONVERSION OF CLASS B SHARES. On the eighth anniversary of your
purchase of Class B shares, those shares will automatically convert to Class A
shares. This conversion relieves Class B shareholders of the higher annual
distribution fee that applies to Class B shares under the Class B Rule 12b-1
Plan. The conversion is based on the relative net asset values of the two
classes, and no sales charge or other charge is imposed. When Class B shares
convert, any other Class B shares that were acquired by the reinvestment of
dividends and distributions will also convert to Class A shares on a pro rata
basis. The conversion feature is subject to the continued availability of an
opinion of counsel or of a tax ruling described in "Purchases, Redemptions and
Shareholder Services" in the Statement of Additional Information.
BUYING CLASS C SHARES. Class C shares are sold at net asset value per share
without an initial sales charge. However, if Class C shares are redeemed for
cash before the first anniversary of their purchase, a CDSC of 1% will be
deducted from the redemption proceeds. That reimbursement charge will not apply
to shares purchased by the reinvestment of dividends or capital gains
distributions. The charge will be assessed on the lesser of the net asset value
of the shares at the time of redemption or the original purchase price. The
Class C CDSC is paid to the Series to reimburse it, in whole or in part, for the
service and distribution fee payments made by the Series at the time such shares
were sold, as described below.
To determine whether the CDSC applies to a redemption, the Series redeems shares
in the following order: (1) shares acquired by reinvestment of dividends and
capital gains distributions, (2) shares held for one year or more and (3) shares
held the longest before the first anniversary of their purchase. If Class C
shares are exchanged into the same class of another Lord Abbett-sponsored fund
and subsequently redeemed before the first anniversary of their original
purchase, the charge will be collected by the other fund on behalf of the
Series' Class C shares. The Series will collect such a charge for other Lord
Abbett-sponsored funds in a similar situation.
CLASS C RULE 12B-1 PLAN. The Fund has adopted a Class C share Rule 12b-1 Plan on
behalf of each Series (the "C Plans", each a "C Plan") under which (except as to
certain accounts for which tracking data is not available) the Series pays
authorized institutions through Lord Abbett Distributor (1) a service fee and a
distribution fee, at the time shares are sold, not to exceed 0.25 and 0.75 of
1%, respectively, of the net asset value of such shares and (2) at each
quarter-end after the first anniversary of the sale of shares, fees for services
and distribution at annual rates not to exceed 0.25 and 0.75 of 1%,
respectively, of the average annual net asset value of such shares outstanding
(payments with respect to shares not outstanding during the full quarter to be
prorated). These service and distribution fees are for purposes similar to those
mentioned above with respect to the A Plan. Sales in clause (1) exclude shares
issued for reinvested dividends and distributions and shares outstanding in
clause (2) include shares issued for reinvested dividends and distributions
after the first anniversary of their issuance.
6 SHAREHOLDER SERVICES
We offer the following shareholder services:
TELEPHONE EXCHANGE PRIVILEGE: Shares of any Series may be exchanged, without a
service charge: (a) for those of the same class of any other Series or any other
Lord Abbett-sponsored fund except for (i) LAEF, LASF and LARF and (ii) certain
tax-free, single-state series where the exchanging shareholder is a resident of
a state in which such series is not offered for sale and (b) for shares of any
authorized institution's affiliated money market fund satisfying Lord Abbett
Distributor as to certain omnibus account and other criteria (together,
"Eligible Funds").
You or YOUR REPRESENTATIVE WITH PROPER IDENTIFICATION can instruct the Fund to
exchange uncertificated shares of a class (held by the transfer agent) by
telephone. Shareholders have this privilege unless they refuse it in writing.
The Fund will not be liable for following instructions communicated by telephone
that it reasonably believes to be genuine and will employ reasonable procedures
to confirm that instructions received are genuine, including requesting proper
identification and recording all telephone exchanges. Instructions must be
received by the Fund in Kansas City (800-821-5129) prior to the close of the
NYSE to obtain each fund's net asset value per class share on that day.
Expedited exchanges by telephone may be difficult to implement in times of
drastic economic or market change. The exchange privilege should not be used to
take advantage of short-term swings in the market. The Fund reserves the right
to terminate or limit the privilege of any shareholder who makes frequent
<PAGE>
exchanges. The Fund can revoke the privilege for all shareholders upon 60 days'
prior written notice. A prospectus for the other Lord Abbett-sponsored fund
selected by you should be obtained and read before an exchange. Exercise of the
Exchange Privilege will be treated as a sale for federal income tax purposes
and, depending on the circumstances, a capital gain or loss may be recognized.
SYSTEMATIC WITHDRAWAL PLAN ("SWP"): Except for Retirement Plans for which there
is no such minimum, if the maximum offering price value of your uncertificated
shares is at least $10,000, you may have periodic cash withdrawals automatically
paid to you in either fixed or variable amounts. With respect to Class B shares,
the CDSC will be waived on redemptions of up to 12% per year of the current net
asset value of your account at the time your SWP is established. For Class B
shares (over 12% per year) and C shares, redemption proceeds due to a SWP will
be derived from the following sources in the order listed: (1) shares acquired
by reinvestment of dividends and capital gains, (2) shares held for six years or
more (Class B) or one year or more (Class C); and (3) shares held the longest
before the sixth anniversary of their purchase (Class B) or before the first
anniversary of their purchase (Class C). For Class B share redemptions over 12%
per year, the CDSC will apply to the entire redemption.
Therefore, please contact the Fund for assistance in minimizing the CDSC in this
situation. Shareholders should be careful in establishing a SWP, especially to
the extent that such a withdrawal exceeds the annual total return for a class,
in which case, the shareholder's original principal will be invaded and, over
time, may be depleted.
DIV-MOVE: You can invest the dividends paid on your account ($50 minimum) into
another account within the same class in any Eligible Fund. The account must be
either your account, a joint account for you and your spouse, a single account
for your spouse or a custodial account for your minor child under the age of 21.
Such dividends will not be subject to a CDSC. You should read the prospectus of
the other fund before investing. Invest-A-Matic: You can make fixed, periodic
investments ($250 minimum initial and $50 subsequent minimum investment) into
the Series and/or any Eligible Fund by means of automatic money transfers from
your bank checking account. You should read the prospectus of the other fund
before investing.
RETIREMENT PLANS: Lord Abbett makes available the retirement plan forms and
custodial agreements for IRAs (Individual Retirement Accounts including Simple
IRAs, Simplified Employee Pensions), 403(b) plans and pension and profit-sharing
plans, including 401(k) plans.
HOUSEHOLDING: A single copy of an annual or semi-annual report will be sent to
an address to which more than one registered shareholder of the Fund with the
same last name has indicated mail is to be delivered, unless additional reports
are specifically requested in writing or by telephone.
All correspondence should be directed to Lord Abbett Securities Trust (P.O. Box
419100, Kansas City, Missouri 64141; 800-821-5129).
7 OUR MANAGEMENT
Our business is managed by our officers on a day-to-day basis under the overall
direction of our Board of Trustees with the advice of Lord Abbett ("Fund
Management"). We employ Lord Abbett as investment manager pursuant to a
Management Agreement. Lord Abbett has been an investment manager for over 67
years and currently manages approximately $25 billion in a family of mutual
funds and other advisory accounts. Under the Management Agreement, Lord Abbett
provides us with investment management services and personnel, pays the
remuneration of our officers and of our Trustees affiliated with Lord Abbett,
provides us with office space and pays for ordinary and necessary office and
clerical expenses relating to research, statistical work and supervision of our
portfolios and certain other costs. Lord Abbett provides similar services to
twelve other Lord Abbett-sponsored funds having various investment objectives
and also advises other investment clients. Lord Abbett Partner Robert G. Morris
serves as Executive Vice President and portfolio manager for the Growth & Income
Series. Mr. Morris has been with Lord Abbett for over five years and has over
twenty-five years of investment experience. Christopher Taylor serves as
portfolio manager of the International Series. Mr. Taylor is Deputy Managing
Director of Fuji Investment Management Co. (Europe), Ltd. (the "Sub-Adviser").
He has been with the Sub-Adviser and its predecessor since 1987 and has fifteen
years of investment experience.
Lord Abbett has entered into an agreement with the Sub-Adviser, under which the
Sub-Adviser provides Lord Abbett with advice with respect to the International
Series' assets. The Sub-Adviser is controlled by Fuji Investment Management Co.
(Tokyo). Fuji Bank Limited of Tokyo, Japan ("Fuji Bank") directly owns 40% of
the outstanding voting stock of the Sub-Adviser. Fuji Investment Management Co.
(Tokyo) is an affiliate of Fuji Bank. Lord Abbett indirectly owns a minor
percentage of such outstanding voting stock. As of December 31, 1997, the
Sub-Adviser manages approximately $656 million, which is invested globally. The
Sub-Adviser furnishes Lord Abbett with advice and recommendations with respect
to the International Series' assets, including advice about the allocation of
investments among foreign securities markets and foreign equity and debt
securities markets and foreign equity and debt securities and, subject to
consultation with Lord Abbett, advice as to cash holdings and what securities in
the portfolio should be purchased, held or disposed of. The Sub-Adviser also
gives advice with respect to foreign currency matters.
Although, under normal circumstances, the International Series will be invested
at least 80% in equity securities of non-U.S. issuers, subject to the direction
of the Board of Trustees, Lord Abbett, in consultation with the Sub-Adviser,
will determine at least quarterly, and more frequently as Lord Abbett
determines, the percentage of assets of the International Series that shall be
allocated (the "Asset Allocation") for investment in the United States and in
foreign markets, respectively.
Under the Management Agreement, the compensation paid to Lord Abbett was at the
annual rate of 0.75 of 1% of the average net assets for each Series. With
respect to the International Series, Lord Abbett, when not waiving its
management fee, is obligated to pay the Sub-Adviser a monthly fee equal to
one-half of Lord Abbett's fee as described above. Regardless of such waiver,
Lord Abbett is free to pay the Sub-Adviser.We will not hold annual meetings and
expect to hold meetings of shareholders only when necessary under applicable law
or the terms of the Fund's Declaration of Trust. Under the Declaration of Trust,
a shareholders' meeting may be called at the request of the holders of
one-quarter of the outstanding shares entitled to vote. See the Statement of
Additional Information for more details.
THE FUND. The Fund was organized as a Delaware business trust on February 26,
1993. Its Class A, B and C shares have equal rights as to voting, dividends and
distributions except for differences resulting from certain class-specific
expenses.
8 DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
Dividends from net investment income are expected to be paid to shareholders
semi-annually for the Growth & Income Series and annually for the International
Series. Supplemental dividends may be paid by each Series in December or
January. Dividends from net investment income may be taken in cash or reinvested
in additional shares at net asset value without a sales charge. If you elect a
cash payment (i) a check will be mailed to you as soon as possible after the
monthly reinvestment date or (ii) if you arrange for direct deposit, your
payment will be wired directly to your bank account within one day after the
date on which the dividend is paid.
A long-term capital gains distribution is made by a Series when it has net
profits during the year from sales of securities which it has held more than one
year. If a Series realizes net short-term capital gains, they also will be
distributed. It is anticipated that capital gains will be distributed in
November. You may take them in cash or additional shares without a sales charge.
Dividends declared in October, November or December of any year to shareholders
of record as of a date in such a month will be treated for federal income tax
purposes as having been received by shareholders in that year if they are paid
before February 1 of the following year.
We intend to continue to meet the requirements of Subchapter M of the Internal
Revenue Code. We will try to distribute to shareholders all our net investment
income and net realized capital gains, so as to avoid the necessity of the Fund
paying federal income tax. Distributions by the Fund of any net long-term
capital gains will be taxable to a shareholder as long-term capital gains
regardless of how long the shareholder has held the shares. Under recently
enacted legislation, the maximum tax rate for a U.S. individual, estate or trust
is reduced to 20% for distributions derived from the sale of assets held by the
Fund for more than 18 months. (If the taxpayer is in the 15% tax bracket, the
rate is 10%.) For distributions derived from the sale of assets held by the Fund
for between 12 and 18 months, the tax rate remains at 28% (15% if the taxpayer
is in the 15% tax bracket).
Each Series may be subject to foreign withholding taxes which would reduce the
yield on their investments. Tax treaties between certain countries and the
United States may reduce or eliminate such taxes. See the Statement of
Additional Information for additional details.
<PAGE>
Shareholders may be subject to a $50 penalty under the Internal Revenue Code and
we may be required to withhold and remit to the U.S. Treasury a portion (31%) of
any redemption or repurchase proceeds (including the value of shares exchanged
into another Lord Abbett-sponsored fund) and of any taxable dividend or
distribution on any account where the payee failed to provide a correct taxpayer
identification number or to make certain required certifications.
We will inform shareholders of the federal tax status of each dividend and
distribution after the end of each calendar year. Shareholders should consult
their tax advisers concerning applicable state and local taxes as well as the
tax consequences of gains or losses from the redemption or exchange of our
shares.
9 REDEMPTIONS
To obtain the proceeds of an expedited redemption of $50,000 or less, YOU OR
YOUR REPRESENTATIVE WITH PROPER IDENTIFICATION can telephone the Fund. The Fund
will not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine and will employ reasonable procedures to
confirm that instructions received are genuine, including requesting proper
identification, recording all telephone redemptions and mailing the proceeds
only to the named shareholder at the address appearing on the account
registration.
If you do not qualify for the procedure above, send your written redemption
request to Lord Abbett Securities Trust (P.O. Box 419100, Kansas City, Missouri
64141) with signature(s) and any legal capacity of the signer(s) guaranteed by
an eligible guarantor accompanied by any certificates for shares to be redeemed
and other required documentation. Payment will be made within three business
days. The Fund may suspend the right to redeem shares for not more than three
days (or longer under unusual circumstances as permitted by Federal law). If you
have purchased Series' shares by check and subsequently submit a redemption
request, redemption proceeds will be paid upon clearance of your purchase check,
which may take up to 15 days. To avoid delays you may arrange for the bank upon
which a check was drawn to communicate to the Fund that the check has cleared.
Shares also may be redeemed by the Fund at net asset value through your
securities dealer who, as an unaffiliated dealer, may charge you a fee. If your
dealer receives your order prior to the close of the NYSE and communicates it to
Lord Abbett, as our agent, prior to the close of Lord Abbett's business day, you
will receive the net asset value of the shares being redeemed as of the close of
the NYSE on that day. If the dealer does not communicate such an order to Lord
Abbett until the next business day, you will receive the net asset value as of
the close of the NYSE on that next business day. Shareholders who have redeemed
their shares have a one-time right to reinvest into another account having the
identical registration in any of the Eligible Funds, at the then applicable net
asset value (i) of the shares being purchased, without the payment of a
front-end sales charge or (ii) with reimbursement for the payment of any CDSC.
Such reinvestment must be made within 60 days of the redemption and is limited
to no more than the amount of the redemption proceeds.
Under certain circumstances and subject to prior written notice, our Board of
Trustees may authorize redemption of all of the shares in any account in which
there are fewer than 50 shares.
TAX-QUALIFIED PLANS: For redemptions of $50,000 or less, follow normal
redemption procedures. Redemptions over $50,000 must be in writing from the
employer, broker or plan administrator stating the reason for the redemption.
The reason for the redemption must be received by the Fund prior to, or
concurrent with, the redemption request.
10 PERFORMANCE
Lord Abbett Securities Trust - Growth & Income Series and International Series
each completed its fiscal years on October 31, 1997 with net assets of
$142,991,675 and $37,334,499, respectively.
Over the past fiscal year, the U.S. stock market continued to turn in good
performance. This advance was fueled by a surprising combination of strong
economic growth and declining inflation. Subdued inflation allowed interest
rates to decline further and stock prices to rise.
The financial services sector (primarily bank holdings) provided the greatest
amount of portfolio return, closely followed by consumer noncyclical companies
(which are companies whose performance is not tied to economic conditions, such
as drug and healthcare products, gas and electric companies), where several
pharmaceutical companies were stellar performers. Looking ahead, healthcare and
packaged foods continue to look attractive to us. <PAGE>
The International Series enjoyed strong performance over the past fiscal year
due in large part to gains made by industrial companies which are domiciled in
Germany and Canada. One company that helped portfolio performance during the
year manufactures "zero emission" hydrogen powered fuel cells that produce water
and oxygen as waste materials. Another is the world's largest supplier of
database software tools used for information integration. These are some
examples of what we believe are industry leaders. In addition, due to our
selective investment process, we had minimal exposure to companies located in
the emerging and Far Eastern markets that fell sharply during the period.
YIELD AND TOTAL RETURN. Yield and total return data may, from time to time, be
included in advertisements about each Series. Each class of shares calculates
its "yield" by dividing the annualized net investment income per share on the
portfolio during a 30-day period by the maximum offering price on the last day
of the period. The yield of each class will differ because of the different
expenses (including actual 12b-1 fees) of each class of shares. The yield data
represents a hypothetical investment return on the portfolio, and does not
measure an investment return based on dividends actually paid to shareholders.
To show that return, a dividend distribution rate may be calculated. The
dividend distribution rate is calculated by dividing the dividends of a class
derived from net investment income during a stated period by the maximum
offering price on the last day of the period. Yields and dividend distribution
rates for Class A shares reflect the deduction of the maximum initial sales
charge, but may also be shown based on a Series' net asset value per share.
Yields for Class C shares do not reflect the deduction of the CDSC.
"Total return" for the one-, five- and ten-year periods represents the average
annual compounded rate of return on an investment of $1,000 in each Series at
the maximum public offering price. When total return is quoted for Class A
shares, it includes the payment of the maximum initial sales charge. When total
return is shown for Class C shares, it reflects the effect of the applicable
CDSC. Total return also may be presented for other periods or based on
investments at reduced sales charge levels or net asset value. Any quotation of
total return not reflecting the maximum sales charge (front-end, level, or
back-end) would be reduced if such sales charge were used. Quotations of yield
or total return for any period when an expense limitation is in effect will be
greater than if the limitation had not been in effect. See "Past Performance" in
the Statement of Additional Information for a more detailed description.
See "Performance" in the Statement of Additional Information for a more detailed
discussion concerning the computation of each Series' total return and yield.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFER IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER.
NO PERSON IS AUTHORIZED TO GIVE INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT
CONTAINED IN THIS PROSPECTUS OR IN SUPPLEMENTAL LITERATURE AUTHORIZED BY THE
FUND, AND NO PERSON IS ENTITLED TO RELY UPON ANY INFORMATION OR REPRESENTATION
NOT CONTAINED HEREIN OR THEREIN. <PAGE>
Each Series' performance shown in the comparison below will be greater than or
less than the lines for Class A and B shares, in the case of the Growth & Income
Series, and Class B and C shares, in the case of the International Series, based
on the differences in sales charges and fees paid by shareholders investing in
the different classes.
Comparison of changes in value of a $10,000 investment in Class C shares of Lord
Abbett Securities Trust -- GROWTH & INCOME SERIES, assuming reinvestment of all
dividends and distributions, to such an investment in the unmanaged Standard &
Poor's 500
The following was represented by a line graph.
Date Class C Share Standard & Poor's
at net asset value 500 Index (1)
01/03/94 10,000 10,000
12/31/94 10,142 10,153
12/31/95 13,418 13,963
12/31/96 15,868 17,157
10/31/97 18,943 21,499
Average Annual Total Return
for Class A Shares(2)
Life of Class
1 Year 7/15/96-10/31/97
19.53% 25.28%
Average Annual Total Return
for Class B Shares(4)(5)
Life of Class
6/2/97-10/31/97
1.84%
Average Annual Total Return
for Class C Shares(2)
Life of Class
1 Year 3 Years 1/3/94-10/31/97
26.20% 22.69% 18.16%
Comparison of changes in value of a $10,000 investment in Class A shares of Lord
Abbett Securities Trust -- INTERNATIONAL SERIES, assuming reinvestment of all
dividends and distributions, to such an investment in the unmanaged Morgan
Stanley European, Asia and Far East Index
Date Class A Share Class A Share at Morgan Stanely European,
at NAV maximum offering price Asia and Far East
Index (3)
12/13/96 10,000 9,426 10,000
12/31/96 10,047 9,470 9,874
1/31/97 10,174 9,590 9,530
2/28/97 10,609 10,000 9,689
3/31/97 10,673 10,060 9,726
4/30/97 10,662 10,050 9,780
5/31/97 10,938 10,310 10,418
6/30/97 11,224 10,580 10,996
7/31/97 11,245 10,600 11,176
8/31/97 10,874 10,250 10,343
9/30/97 11,553 10,890 10,925
10/31/97 11,521 10,860 10,088
Average Annual Total Return
for Class A Shares(4)
Life of Class
(12/13/96-10/31/97)
8.60%
Average Annual Total Return
for Class B Shares(4)(5)
Life of Class
(6/3/97-10/31/97)
0.32%
Average Annual Total Return
for Class C Shares(4)(5)
Life of Class
(6/2/97-10/31/97)
4.54%
(1)Performance numbers for the Standard & Poor's 500, which is unmanaged, do not
reflect transaction costs or management fees. An investor cannot invest directly
in this index.
(2)Total return is the percent change in value with all dividends and
distributions reinvested for the periods shown using the SEC-required uniform
method to compute such return.
(3)Performance numbers for Morgan Stanley European, Asia and Far East Index
("EAFE"), which is unmanaged, do not reflect transaction costs or management
fees. An investor cannot invest directly in this index. Since EAFE only starts
on the first day of the month, in the case of the EAFE comparison to the
International Series, which commenced operations on 12/13/96, EAFE starts on
11/30/96.
(4)Total return is the percent change in value with all dividends and
distributions reinvested for the periods shown using the SEC-required uniform
method to compute such return.
(5)Not Annualized.
<PAGE>
INVESTMENT MANAGER AND UNDERWRITER
Lord, Abbett & Co. and Lord Abbett Distributor LLC
The General Motors Building
767 Fifth Avenue
New York, New York 10153-0203
212-848-1800
CUSTODIAN
The Bank of New York
48 Wall Street
New York, New York 10286
TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT
United Missouri Bank of Kansas City, N.A.
Tenth and Grand
Kansas City, Missouri 64141
SHAREHOLDER SERVICING AGENT
DST Systems, Inc.
P.O. Box 419100
Kansas City, Missouri 64141
800-821-5129
AUDITORS
Deloitte & Touche LLP
COUNSEL
Debevoise & Plimpton
Printed in the U.S.A.
LST-1-398
(3/98)
<PAGE>
LORD ABBETT
STATEMENT OF ADDITIONAL INFORMATION MARCH 1, 1998
LORD ABBETT SECURITIES TRUST
This Statement of Additional Information is not a Prospectus. A Prospectus may
be obtained from your securities dealer or from Lord Abbett Distributor LLC
("Lord Abbett Distributor") at The General Motors Building, 767 Fifth Avenue,
New York, New York 10153-0203. This Statement relates to, and should be read in
conjunction with, the Prospectus dated March 1, 1998.
Lord Abbett Securities Trust (referred to as "we" or the "Fund") was organized
as a Delaware business trust on February 26, 1993. The Fund has four series, but
only Growth & Income Series and the International Series (the "Series") is
described in this Statement of Additional Information. Each of the Series has
three classes of shares (A, B and C). All shares have equal noncumulative voting
rights and equal rights with respect to dividends, assets and liquidation,
except for certain class-specific expenses. They are fully paid and
nonassessable when issued and have no preemptive or conversion rights.
Rule 18f-2 under the Investment Company Act of 1940, as amended (the "Act")
provides that any matter required to be submitted, by the provisions of the Act
or applicable state law or otherwise, to the holders of the outstanding voting
securities of an investment company such as the Fund shall not be deemed to have
been effectively acted upon unless approved by the holders of a majority of the
outstanding shares of each class or series affected by such matter. Rule 18f-2
further provides that a class or series shall be deemed to be affected by a
matter unless the interests of each class or series in the matter are
substantially identical or the matter does not affect any interest of such class
or series. However, the Rule exempts the selection of independent public
accountants, the approval of principal distributing contracts and the election
of trustees from its separate voting requirements.
Shareholder inquiries should be made by writing directly to the Fund or by
calling 800-821-5129. In addition, you can make inquiries through your dealer.
TABLE OF CONTENTS Page
1. Investment Objective and Policies 2
2. Trustees and Officers 5
3. Investment Advisory and Other Services 8
4. Portfolio Transactions 9
5. Purchases, Redemptions and Shareholder Services 11
6. Past Performance 16
7. Taxes 17
8. Information About the Fund 18
9. Financial Statements 19
<PAGE>
1.
INVESTMENT OBJECTIVE AND POLICIES
FUNDAMENTAL INVESTMENT RESTRICTIONS
Both Series are subject to the following investment restrictions which cannot be
changed without approval of a majority of each Series' outstanding shares. Each
Series may not: (1) borrow money, except that (i) each Series may borrow from
banks (as defined in the Act ) in amounts up to 33 1/3% of its total assets
(including the amount borrowed), (ii) each Series may borrow up to an additional
5% of its total assets for temporary purposes, (iii) each Series may obtain such
short-term credit as may be necessary for the clearance of purchases and sales
of portfolio securities and (iv) each Series may purchase securities on margin
to the extent permitted by applicable law; (2) pledge its assets (other than to
secure borrowings, or to the extent permitted by each Series' investment
policies as permitted by applicable law); (3) engage in the underwriting of
securities, except pursuant to a merger or acquisition or to the extent that, in
connection with the disposition of its portfolio securities, it may be deemed to
be an underwriter under federal securities laws; (4) make loans to other
persons, except that the acquisition of bonds, debentures or other corporate
debt securities and investment in government obligations, commercial paper,
pass-through instruments, certificates of deposit, bankers acceptances,
repurchase agreements or any similar instruments shall not be subject to this
limitation, and except further that each Series may lend its portfolio
securities, provided that the lending of portfolio securities may be made only
in accordance with applicable law; (5) buy or sell real estate (except that each
Series may invest in securities directly or indirectly secured by real estate or
interests therein or issued by companies which invest in real estate or
interests therein), or commodities or commodity contracts (except to the extent
each Series 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); (6) with respect to 75% of its gross assets, buy
securities of one issuer representing more than (i) 5% of its gross assets,
except securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities or (ii) 10% of the voting securities of such issuer; (7)
invest more than 25% of its assets, taken at market value, in the securities of
issuers in any particular industry (excluding securities of the U.S. Government,
its agencies and instrumentalities); or (8) issue senior securities to the
extent such issuance would violate applicable law.
With respect to the restrictions mentioned herein, compliance therewith will not
be affected by changes in the market value of portfolio securities but will be
determined at the time of purchase or sale of such securities.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. In addition to the investment
restrictions above which cannot be changed without shareholder approval, each
Series also is subject to the following non-fundamental investment policies
which may be changed by the Board of Trustees without shareholder approval. Each
Series may not: (1) borrow in excess of 33 1/3% of its total assets (including
the amount borrowed), and then only as a temporary measure for extraordinary or
emergency purposes; (2) make short sales of securities or maintain a short
position except to the extent permitted by applicable law; (3) invest knowingly
more than 15% of its net assets (at the time of investment) in illiquid
securities, except for securities qualifying for resale under Rule 144A of the
Securities Act of 1933, deemed to be liquid by the Board of Trustees; (4) invest
in the securities of other investment companies (in the case of the
International Series, as long as the Series is an underlying fund in a
fund-of-funds structure) (in the case of the Growth & Income Series, except as
permitted by applicable law); (5) invest in securities of issuers which, with
their predecessors, have a record of less than three years' continuous
operations, if more than 5% of a Series' total assets would be invested in such
securities (this restriction shall not apply to mortgaged-backed securities,
asset-backed securities or obligations issued or guaranteed by the U. S.
government, its agencies or instrumentalities); (6) hold securities of any
issuer if more than 1/2 of 1% of the securities of such issuer are owned
beneficially by one or more officers or trustees of the Fund or by one or more
partners or members of the Fund's underwriter or investment adviser if these
owners in the aggregate own beneficially more than 5% of the securities of such
issuer; (7) invest in warrants if, at the time of the acquisition, its
investment in warrants, valued at the lower of cost or market, would exceed 5%
of a Series' total assets (included within such limitation, but not to exceed 2%
of a Series' total assets, are warrants which are not listed on the New York or
American Stock Exchange or a major foreign exchange); (8) invest in real estate
limited partnership interests or interests in oil, gas or other mineral leases,
or exploration or other development programs, except that each Series may invest
in securities issued by companies that engage in oil, gas or other mineral
exploration or other development activities; (9) write, purchase or sell puts,
calls, straddles, spreads or combinations thereof, except to the extent
permitted in each Series' prospectus and statement of additional information, as
they may be amended from time to time; or (10) buy from or sell to any of its
officers, trustees, employees, or its investment adviser or any of its officers,
trustees, partners or employees, any securities other than shares of beneficial
interest in each Series.
<PAGE>
LENDING PORTFOLIO SECURITIES
Each Series may lend portfolio securities to registered broker-dealers. These
loans, if and when made, may not exceed 30% of each Series' total assets. Each
Series loan of securities will be collateralized by cash or marketable
securities issued or guaranteed by the U.S. Government or its agencies ("U.S.
Government securities") or other permissible means at least equal to the market
value of the loaned securities. From time to time, each Series may pay a part of
the interest received with respect to the investment of collateral to a borrower
and/or a third party that is not affiliated with the Fund and is acting as a
"placing broker". No fee will be paid to affiliated persons of the Fund.
By lending portfolio securities, each Series can increase its income by
continuing to receive interest on the loaned securities as well as by either
investing the cash collateral in permissible investments, such as U.S.
Government securities or obtaining yield in the form of interest paid by the
borrower when U.S. Government securities or other forms of non-cash collateral
are received. Each Series will comply with the following conditions whenever it
loans securities: (i) each Series must receive at least 100% collateral from the
borrower; (ii) the borrower must increase the collateral whenever the market
value of the securities loaned rises above the level of the collateral; (iii)
each Series must be able to terminate the loan at any time; (iv) each Series
must receive reasonable compensation for the loan, as well as any dividends,
interest or other distributions on the loaned securities; (v) each Series may
pay only reasonable fees in connection with the loan and (vi) voting rights on
the loaned securities may pass to the borrower except that, if a material event
adversely affecting the investment in the loaned securities occurs, the Trustees
must terminate the loan and regain the right to vote the securities.
REPURCHASE AGREEMENTS
Each Series may enter into repurchase agreements with respect to a security. A
repurchase agreement is a transaction by which each Series acquires a security
and simultaneously commits to resell that security to the seller (a bank or
securities dealer) at an agreed upon price on an agreed upon date. The resale
price reflects the purchase price plus an agreed upon market rate of interest
which is unrelated to the coupon rate or date of maturity of the purchased
security. In this type of transaction, the securities purchased by each Series
have a total value in excess of the value of the repurchase agreement. Each
Series requires at all times that the repurchase agreement be collateralized by
cash or U.S. Government securities having a value equal to, or in excess of, the
value of the repurchase agreement. Such agreements permit each Series to keep
all of its assets at work while retaining flexibility in pursuit of investments
of a longer term nature.
The use of repurchase agreements involves certain risks. For example, if the
seller of the agreement defaults on its obligation to repurchase the underlying
securities at a time when the value of these securities has declined, each
Series may incur a loss upon disposition of them. If the seller of the agreement
becomes insolvent and subject to liquidation or reorganization under the
Bankruptcy Code or other laws, a bankruptcy court may determine that the
underlying securities are collateral not within the control of each Series and
are therefore subject to sale by the trustee in bankruptcy. Even though the
repurchase agreements may have maturities of seven days or less, they may lack
liquidity, especially if the issuer encounters financial difficulties. While
Fund management acknowledges these risks, it is expected that they can be
controlled through stringent selection criteria and careful monitoring
procedures. Fund management intends to limit repurchase agreements to
transactions with dealers and financial institutions believed by Fund management
to present minimal credit risks. Fund management will monitor creditworthiness
of the repurchase agreement sellers on an ongoing basis.
The Series will enter into repurchase agreements only with those primary
reporting dealers that report to the Federal Reserve Bank of New York and with
the 100 largest United States commercial banks and the underlying securities
purchased under the agreements will consist only of those securities in which
the Series otherwise may invest.
<PAGE>
WARRANTS
Pursuant to Texas regulations, each Series will not invest more than 5% of its
assets in warrants and not more than 2% of such value in warrants not listed on
the New York or American Stock Exchanges, except when they form a unit with
other securities. As a matter of operating policy, we will not invest more than
5% of our net assets in rights.
COVERED CALL OPTIONS
As stated in the Prospectus, each Series may write covered call options which
are traded on a national securities exchange with respect to securities in its
portfolio in an attempt to increase its income and to provide greater
flexibility in the disposition of its portfolio securities. A "call option" is a
contract sold for a price (the "premium") giving its holder the right to buy a
specific number of shares of stock at a specific price prior to a specified
date. A "covered call option" is a call option issued on securities already
owned by the writer of the call option for delivery to the holder upon the
exercise of the option. During the period of the option, each Series forgoes the
opportunity to profit from any increase in the market price of the underlying
security above the exercise price of the option (to the extent that the increase
exceeds its net premium). Each Series may enter into "closing purchase
transactions" in order to terminate its obligation to deliver the underlying
security (this may result in a short-term gain or loss). A closing purchase
transaction is the purchase of a call option (at a cost which may be more or
less than the premium received for writing the original call option) on the same
security, with the same exercise price and call period as the option previously
written. If a Series is unable to enter into a closing purchase transaction, it
may be required to hold a security that it might otherwise have sold to protect
against depreciation. Neither Series intends to write covered call options with
respect to securities with an aggregate market value of more than 5% of its
gross assets at the time an option is written. This percentage limitation will
not be increased without prior disclosure in the current Prospectus.
The Fund's custodian will segregate cash or liquid high-grade debt securities in
an amount not less than that required by Securities Exchange Commission ("SEC")
Release 10666 with respect to Series assets committed to written covered call
options. If the value of the segregated securities declines, additional cash or
debt securities will be added on a daily basis (i.e., marked-to-market) so that
the segregated amount will not be less than the amount of each Series'
commitments with respect to such written options.
OTHER INTERNATIONAL SERIES INVESTMENT POLICIES (WHICH CAN BE CHANGED WITHOUT
SHAREHOLDER APPROVAL)
FINANCIAL FUTURES CONTRACTS. The International Series may enter into contracts
for the future delivery of a financial instrument, such as a security or the
cash value of a securities index. This investment technique is designed
primarily to hedge (i.e., protect) against anticipated future changes in
interest rates or market conditions which otherwise might adversely affect the
value of securities which we hold or intend to purchase. A "sale" of a futures
contract means the undertaking of a contractual obligation to deliver the
securities or the cash value of an index called for by the contract at a
specified price during a specified delivery period. A "purchase" of a futures
contract means the undertaking of a contractual obligation to acquire the
securities or cash value of an index at a specified price during a specified
delivery period. At the time of delivery pursuant to the contract, adjustments
are made to recognize differences in value arising from the delivery of
securities which differ from those specified in the contract. In some cases,
securities called for by a futures contract may not have been issued at the time
the contract was written. The International Series will not enter into any
futures contracts or options on futures contracts if the aggregate of the market
value of the securities covered by its outstanding futures contracts and
securities covered by futures contracts subject to the outstanding options
written by it would exceed 50% of its total assets.
Although some financial futures contracts by their terms call for the actual
delivery or acquisition of securities, in most cases, a party will close out the
contractual commitment before delivery without having to make or take delivery
of the security by purchasing (or selling, as the case may be) on a commodities
exchange an identical futures contract calling for delivery in the same month.
Such a transaction, if effected through a member of an exchange, cancels the
obligation to make or take delivery of the securities. All transactions in the
futures market are made, offset or fulfilled through a clearing house associated
with the exchange on which the contracts are traded. The International Series
will incur brokerage fees when it purchases or sells contracts and will be
<PAGE>
required to maintain margin deposits. At the time it enters into a futures
contract, it is required to deposit with its custodian, on behalf of the broker,
a specified amount of cash or eligible securities called "initial margin." The
initial margin required for a futures contract is set by the exchange on which
the contract is traded. Subsequent payments, called "variation margin," to and
from the broker are made on a daily basis as the market price of the futures
contract fluctuates. The costs incurred in connection with futures transactions
could reduce the Series' return. Futures contracts entail risks. If the
investment adviser's judgment about the general direction of interest rates or
markets is wrong, the overall performance may be poorer than if no such
contracts had been entered into.
There may be an imperfect correlation between movements in prices of futures
contracts and portfolio securities being hedged. The degree of difference in
price movements between futures contracts and the securities (or securities
indices) being hedged depends upon such things as variations in demand for
futures contracts and securities underlying the contracts and differences
between the liquidity of the markets for such contracts and the securities
underlying them. In addition, the market prices of futures contracts may be
affected by certain factors not directly related to the underlying securities.
At any given time, the availability of futures contracts, and hence their
prices, are influenced by credit conditions and margin requirements. Due to the
possibility of price distortions in the futures market and because of the
imperfect correlation between movements in the prices of securities and
movements in the prices of futures contracts, a correct forecast of market
trends by the investment adviser may not result in a successful hedging
transaction.
OPTIONS ON FINANCIAL FUTURES CONTRACTS. The International Series may purchase
and write call and put options on financial futures contracts. An option on a
futures contract gives the purchaser the right, in return for the premium paid,
to assume a position in a futures contract at a specified exercise price at any
time during the period of the option. Upon exercise, the writer of the option
delivers the futures contract to the holder at the exercise price. The
International Series would be required to deposit with our custodian initial
margin and maintenance margin with respect to put and call options on futures
contracts written by us. Options on futures contracts involve risks similar to
the risks relating to transactions in financial futures contracts described
above. Generally speaking, a given dollar amount used to purchase an option on a
financial futures contract can hedge a much greater value of underlying
securities than if that amount were used to directly purchase the same financial
futures. Should the event that the International Series intends to hedge (or
protect) against not materialize, however, the option may expire worthless, in
which case we would lose the premium paid therefor.
SEGREGATED ACCOUNTS. To the extent required to comply with Securities and
Exchange Commission Release 10666 and any related SEC policies, when purchasing
a futures contract, or writing a put option, the International Series will
maintain in a segregated account at its custodian bank cash, U.S. Government and
other permitted securities to cover its position.
PORTFOLIO TURNOVER
For the fiscal year ended October 31, 1997 the portfolio turnover rate was
36.37% for the Growth & Income Series. For the period December 13, 1996 to
October 31, 1997 the portfolio turnover rate was 29.72% for the International
Series.
2.
TRUSTEES AND OFFICERS
The following trustees are partners of Lord, Abbett & Co. ("Lord Abbett"), The
General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203. They
have been associated with Lord Abbett for over five years and are also officers
and/or directors or trustees of the twelve other Lord Abbett-sponsored funds.
They are "interested persons" as defined in the Act, and as such, may be
considered to have an indirect financial interest in the Rule 12b-1 Plan
described in the Prospectus.
Robert S. Dow, age 52, Chairman and President
E. Wayne Nordberg, age 59, Vice President
<PAGE>
The following outside trustees are also directors or trustees of the twelve
other Lord Abbett-sponsored funds referred to above.
E. Thayer Bigelow
Courtroom Television Network
600 Third Avenue
New York, New York
Chief Executive Officer of Courtroom Television. Formerly President and Chief
Executive Officer of Time Warner Cable Programming, Inc. Prior to that, formerly
President and Chief Operating Officer of Home Box Office, Inc. Age 56.
Stewart S. Dixon
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois
Partner in the law firm of Wildman, Harrold, Allen & Dixon. Age 67.
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 72.
C. Alan MacDonald
Directorship Inc.
8 Sound Shore Drive
Greenwich, Connecticut
Managing Director of Directorship Inc., a consultancy in board management and
corporate governance. Formerly General Partner of The Marketing Partnership,
Inc., a full service marketing consulting firm (1994-1997). Prior to that, he
was Chairman and Chief Executive Officer of Lincoln Snacks, Inc., manufacturer
of branded snack foods (1992-1994). His career spans 36 years at Stouffers and
Nestle with 18 of the years as Chief Executive Officer. Currently serves as
Director of DenAmerica Corp., J. B. Williams Company, Inc., Fountainhead Water
Company and Exigent Diagnostics. Age 64.
Hansel B. Millican, Jr.
Rochester Button Company
1100 Noblin Avenue
South Boston, Virginia
President and Chief Executive Officer of Rochester Button Company. Age 69.
Thomas J. Neff
Spencer Stuart U.S.
277 Park Avenue
New York, New York
Chairman of Spencer Stuart U.S., an executive search consulting firm. Age 60.
<PAGE>
The second column of the following table sets forth the compensation accrued for
the Fund's outside trustees. The third and fourth columns set forth information
with respect to the equity-based benefits accrued for outside directors/trustees
maintained by the Lord Abbett-sponsored funds. The fourth column sets forth the
total compensation payable by such funds to the outside directors/trustees. No
trustee of the Fund associated with Lord Abbett and no officer of the Fund
received any compensation from the Fund for acting as a trustee or officer.
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(1) (2) (3) (4)
Pension or For Year Ended
Retirement Benefits December 31, 1997
Accrued by the Total Compensation
Aggregate Fund and Accrued by the Fund and
Compensation Twelve Other Lord Twelve Other Lord
Accrued by Abbett-sponsored Abbett-sponsored
NAME OF DIRECTOR THE FUND1 FUNDS2 FUNDS3
E. Thayer Bigelow $450 $17,068 $ 56,000
Stewart S. Dixon $442 $32,190 $ 55,000
John C. Jansing $442 $45,0854 $ 55,000
C. Alan MacDonald $460 $30,703 $ 57,400
Hansel B. Millican, Jr. $446 $37,747 $ 55,000
Thomas J. Neff $449 $19,853 $ 56,000
<FN>
1. Outside trustees' fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored funds based on the
net assets of each fund. A portion of the fees payable by the Fund to its
outside directors/trustees is being deferred under a plan that deems the
deferred amounts to be invested in shares of the Fund for later distribution
to the directors/trustees.
2. The amounts in Column 3 were accrued by the Lord Abbett-Sponsored Funds for
the 12 months ended October 31, 1997 with respect to the equity based plans
established for independent directors in 1996. This plan supercedes a
previously approved retirement plan for all future directors. Current
directors had the option to convert their accrued benefits under the
retirement plan. All of the outside directors except one made such an
election.
3. This column shows aggregate compensation, including directors fees and
attendance fees for board and committee meetings, of a nature referred to in
footnote one, accrued by the Lord Abbett-sponsored funds during the year
ended December 31, 1997. The amounts of the aggregate compensation payable by
the Fund as of October 31, 1997 deemed invested in Fund shares, including
dividends reinvested and changes in net asset value applicable to such deemed
investments, were: Mr. Bigelow, $939; Mr. Dixon, $21,556; Mr. Jansing,
$22,346; Mr. MacDonald, $9,515; Mr. Millican, $21,626; and Mr. Neff, $22,587.
If the amounts deemed invested in Fund shares were added to each director's
actual holdings of Fund shares as of October 31, 1997, each would own, the
following: Mr. Bigelow, 107 shares; Mr. Dixon, 2,890 shares; Mr. Jansing,
6,920 shares; Mr. MacDonald, 1,083 shares; Mr.
Millican, 2,460 shares; and Mr. Neff, 2,996 shares.
4. Mr. Jansing chose to continue to receive benefits under the retirement plan
which provides that outside directors (Trustees) may receive annual
retirement benefits for life equal to their final annual retainer following
retirement at or after age 72 with at least ten years of service. Thus, if
Mr. Jansing were to retire and the annual retainer payable by the funds were
the same as it is today, he would receive annual retirement benefits of
$50,000.
</FN>
</TABLE>
Except where indicated, the following executive officers of the Fund have been
associated with Lord Abbett for over five years. Of the following, Messrs.
Allen, Brown, Carper, Ms. Foster, Messrs. Hilstad, Morris, Noelke and Walsh are
<PAGE>
partners of Lord Abbett; the others are employees: Zane Brown, age 46, Executive
Vice President; Paul A. Hilstad, age 55, Vice President and Secretary (with Lord
Abbett since 1995; formerly Senior Vice President and General Counsel of
American Capital Management & Research, Inc.); Stephen I. Allen, age 44; Daniel
E. Carper, age 46; Daria L. Foster, age 43; Lawrence H. Kaplan, age 41 (with
Lord Abbett since 1997 - formerly Vice President and Chief Counsel of Salomon
Brothers Asset Management Inc from 1995 to 1997, prior thereto Senior Vice
President, Director and General Counsel of Kidder Peabody Asset Management,
Inc.); Thomas F. Konop, age 55; Robert G. Morris, age 53; Robert J. Noelke, age
41; A. Edward Oberhaus, age 38; Keith F. O'Connor, age 42; John J. Walsh, age
61, Vice Presidents; and Donna M. McManus, age 37, Treasurer (with Lord Abbett
since 1996, formerly a Senior Manager at Deloitte & Touche LLP).
The Fund does not hold annual meetings of shareholders unless one or more
matters are required to be acted on by shareholders under the Act. Under the
Fund's Declaration of Trust, shareholder meetings may be called at any time by
certain officers of the Fund or by a majority of the trustees (i) for the
purpose of taking action upon any matter requiring the vote or authority of the
Fund's shareholders or upon other matters deemed to be necessary or desirable or
(ii) upon the written request of the holders of at least one-quarter of the
shares of the Fund outstanding and entitled to vote at the meeting.
As of October 31, 1997, our trustees and officers, as a group, owned less than
1% of our outstanding shares.
3.
INVESTMENT ADVISORY AND OTHER SERVICES
As described under "Our Management" in the Prospectus, Lord Abbett is the
investment manager for the Series. The ten general partners of Lord Abbett, all
of whom are officers and/or trustees of the Fund, are: Stephen I. Allen, Zane E.
Brown, Daniel E. Carper, Robert S. Dow, Daria L. Foster, Paul A. Hilstad, Robert
G. Morris, Robert J. Noelke, E. Wayne Nordberg and John J. Walsh. The address of
each partner is The General Motors Building, 767 Fifth Avenue, New York, New
York 10153-0203. The other general partners of Lord Abbett who are neither
officers nor trustees of the Fund are W. Thomas Hudson and Michael McLaughlin.
The services performed by Lord Abbett are described under "Our Management" in
the Prospectus. Under the Management Agreement, each Series is obligated to pay
Lord Abbett a monthly fee, based on average daily net assets for each month, at
the annual rate of .75 of 1%. For the year ended October 31, 1997 such fees
amounted to $999,092 of the Growth & Income Series and $127,715 of the
International Series.
Although not obligated to do so, Lord Abbett has waived or may waive all or part
of its management fees and has assumed or may assume other expenses of each
Series. For the fiscal year ended October 31, 1997 Lord Abbett did not waive
management fees.
As discussed in the Prospectus under "Our Management," each Series is
contingently obligated to repay to Lord Abbett the amounts of such assumed other
expenses.
Each Series pays all expenses not expressly assumed by Lord Abbett, including,
without limitation, 12b-1 expenses, outside trustees' fees and expenses,
association membership dues, legal and auditing fees, taxes, transfer and
dividend disbursing agent fees, shareholder servicing costs, expenses relating
to shareholder meetings, expenses of preparing, printing and mailing stock
certificates and shareholder reports, expenses of registering our shares under
federal and state securities laws, expenses of preparing, printing and mailing
prospectuses to existing shareholders, insurance premiums, brokerage and other
expenses connected with executing portfolio transactions.
The Fund has agreed with the State of California to limit operating expenses
(including management fees but excluding taxes, interest, extraordinary expenses
and brokerage commissions) to 2 1/2% of average annual net assets up to
$30,000,000, 2% of the next $70,000,000 of such assets and 1 1/2% of such assets
in excess of $100,000,000. However, as described in the Prospectuses, the Fund
has adopted a Plan pursuant to Rule 12b-1 of the Act for each class of shares of
the Series. Annual Plan distribution expenses up to 1% of the Series' average
net assets during its fiscal year may be excluded from this expense limitation.
The expense limitation is a condition the registration of investment company
shares for sale in the State and applies so long as our shares are registered
for sale in that State.
<PAGE>
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10128, are
the independent auditors of the Fund and must be approved at least annually by
our trustees to continue in such capacity. Deloitte & Touche LLP perform audit
services for the Fund including the examination of financial statements included
in our annual report to shareholders.
The Bank of New York ("BNY"), 48 Wall Street, New York, New York 10286, is the
Fund's custodian. Rules adopted by the Securities & Exchange Commission under
the Act permit the International Series to maintain its foreign assets in the
custody of certain eligible foreign banks and securities depositories. The
International Series? portfolio securities and cash, when invested in foreign
securities and not held by BNY or its foreign branches, are held by
sub-custodians of BNY approved by the Board of Trustees of the Fund in
accordance with such rules.
The Sub-Custodians of BNY are:
Euro-Clear (a transnational securities depository); Australia: ANZ Banking
Group; Austria: Creditanstalt-Bankverein; Canada: Canadian Imperial Bank of
Commerce; Chile: Citibank, N.A.; Czech Republic: Ceskoslovenska Obchodni Banka;
Denmark: Den Danske Bank; Finland: Union Bank of Finland; Germany: J.P. Morgan
GmbH; Greece: National Bank of Greece S.A.; Hong Kong, Indonesia, Philippines,
Taiwan and Thailand: Hong Kong & Shanghai Banking Corp.; Hungary: Citibank
Budapest Rt; India: Hong Kong and Shanghai Banking Corporation; Ireland: Allied
Irish Banks, PLC; Israel: Bank Leumi LE-Israel B.M.; Japan: The Fuji Bank, Ltd.;
Jordan: Citibank, N.A.; Korea: Bank of Seoul; Luxembourg: Banque Internationale
A Luxembourg, S.A.; Mexico: Citibank, N.A.; Morocco: Banque Commerciale du
Maroc; Netherlands: Bank van Haften Labouchere; New Zealand: Anz Banking Group
Ltd.; Norway: Den Norske Bank; Pakistan: Citibank, N.A.; Peru: Citibank, N.A.;
Poland: Bank Handlowy w Warszawie S.A.; Portugal: Banco Espirito Santo E
Comercial de Lisboa; Malaysia, Singapore: Development Bank of Singapore; South
Africa: The First National Bank of Southern Africa; Sri Lanka: Hong Kong and
Shanghai Banking Corporation; Sweden: Skandinaviska Enskilda Banken;
Switzerland: Bank Leu; Turkey: Citibank, N.A.; Venezuela: Citibank, N.A.
4.
PORTFOLIO TRANSACTIONS
Our policy is to obtain best execution on all our portfolio transactions, which
means that we seek to have purchases and sales of portfolio securities executed
at the most favorable prices, considering all costs of the transaction including
brokerage commissions and dealer markups and markdowns and taking into account
the full range and quality of the brokers' services. Consistent with obtaining
best execution, the Fund may pay, as described below, a higher commission than
some brokers might charge on the same transaction. This policy governs the
selection of brokers or dealers and the market in which the transaction is
executed. To the extent permitted by law, we may, if considered advantageous,
make a purchase from or sale to another Lord Abbett-sponsored fund without the
intervention of any broker-dealer.
Broker-dealers are selected on the basis of their professional capability and
the value and quality of their brokerage and research services. Normally, the
selection is made by traders who are officers of the Fund and also are employees
of Lord Abbett. These traders do the trading as well for other accounts --
investment companies (of which they are also officers) and other investment
clients -- managed by Lord Abbett. For foreign securities purchased or sold by
the International Series, the selection is made by the Sub-Adviser. The
Sub-Advisor are responsible for obtaining best execution.
In transactions on stock exchanges in the United States, commissions are
negotiated, whereas on many foreign stock exchanges commissions are fixed. In
the case of securities traded in the foreign and domestic over-the-counter
markets, there is generally no stated commission, but the price usually includes
an undisclosed commission or markup. Purchases from underwriters of newly-issued
securities for inclusion in the Fund's portfolios usually will include a
concession paid to the underwriter by the issuer and purchases from dealers
serving as market makers will include the spread between the bid and asked
prices. When commissions are negotiated, we pay a commission rate that we
believe is appropriate to give maximum assurance that our brokers will provide
us, on a continuing basis, the highest level of brokerage services available.
While we do not always seek the lowest possible commission on particular trades,
we pay a commission rate that we believe is appropriate to give maximum
<PAGE>
assurance that our brokers will provide us, on a continuing basis, the highest
level of brokerage services available. While we do not always seek the lowest
possible commissions on particular trades, we believe that our commission rates
are in line with the rates that many other institutions pay. Our traders are
authorized to pay brokerage commissions in excess of those that other brokers
might accept on the same transactions in recognition of the value of the
services performed by the executing brokers, viewed in terms of either the
particular transaction or the overall responsibilities of Lord Abbett with
respect to us and the other accounts they manage. Such services include showing
us trading opportunities including blocks, a willingness and ability to take
positions in securities, knowledge of a particular security or market, proven
ability to handle a particular type of trade, confidential treatment, promptness
and reliability.
Some of our brokers also provide research services at least some of which are
useful to Lord Abbett in their overall responsibilities with respect to us and
the other accounts they manage. Research includes the furnishing of analyses and
reports concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts and trading equipment and
computer software packages, acquired from third-party suppliers, that enable
Lord Abbett to access various information bases. Such services may be used by
Lord Abbett in servicing all their accounts, and not all of such services will
necessarily be used by Lord Abbett in connection with their management of the
Fund; conversely, such services furnished in connection with brokerage on other
accounts managed by Lord Abbett may be used in connection with their management
of the Fund; and not all of such services will necessarily be used by Lord
Abbett in connection with their advisory services to such other accounts. We
have been advised by Lord Abbett that research services received from brokers
cannot be allocated to any particular account, are not a substitute for Lord
Abbett's services but are supplemental to their own research effort and, when
utilized, are subject to internal analysis before being incorporated by Lord
Abbett into their investment process. As a practical matter, it would not be
possible for Lord Abbett to generate all of the information presently provided
by brokers. While receipt of research services from brokerage firms has not
reduced Lord Abbett's normal research activities, the expenses of Lord Abbett
could be materially increased if it attempted to generate such additional
information through its own staff and purchased such equipment and software
packages directly from the suppliers.
No commitments are made regarding the allocation of brokerage business to or
among brokers, and trades are executed only when they are dictated by investment
decisions of the Fund to purchase or sell portfolio securities.
If two or more broker-dealers are considered capable of offering the equivalent
likelihood of best execution, the broker-dealer who has sold our shares and/or
shares of other Lord Abbett-sponsored funds may be preferred.
If other clients of Lord Abbett buy or sell the same security at the same time
as we do, transactions will, to the extent practicable, be allocated among all
participating accounts in proportion to the amount of each order and will be
executed daily until filled so that each account shares the average price and
commission cost of each day. Other clients who direct that their brokerage
business be placed with specific brokers or who invest through wrap accounts
introduced to Lord Abbett by certain brokers may not participate with us in the
buying and selling of the same securities as described above. If these clients
wish to buy or sell the same security as we do, they may have their transactions
executed at times different from our transactions and thus may not receive the
same price or incur the same commission cost as we do.
We will not seek "reciprocal" dealer business (for the purpose of applying
commissions in whole or in part for our benefit or otherwise) from dealers as
consideration for the direction to them of portfolio business.
For the period January 3, 1994 to October 31, 1994 and for the fiscal years
ended October 31, 1995, 1996 and 1997 we paid total commissions to independent
broker-dealers of $15,489, $58,435, $85,334 and $273,174.
<PAGE>
5.
PURCHASES, REDEMPTIONS
AND SHAREHOLDER SERVICES
Securities in the Fund's portfolios are valued at their market values as of the
close of the NYSE. Market value will be determined as follows: securities listed
or admitted to trading privileges on any national or foreign securities exchange
are valued at the last sales price on the principal securities exchange on which
such securities are traded, or, if there is no sale, at the mean between the
last bid and asked prices on such exchange, or, in the case of bonds, in the
over-the-counter market if, in the judgment of the Fund's officers, that market
more accurately reflects the market value of the bonds. Securities traded only
in the over-the-counter market are valued at the mean between the bid and asked
prices, except that securities admitted to trading on the NASDAQ National Market
System are valued at the last sales price. Securities for which market
quotations are not available are valued at fair value under procedures approved
by the Board of Trustees.
All assets and liabilities expressed in foreign currencies will be converted
into United States dollars at the mean between the buying and selling rates of
such currencies against United States dollars last quoted by any major bank. If
such quotations are not available, the rate of exchange will be determined in
accordance with policies established by the Fund's Board of Trustees. The Board
of Trustees will monitor, on an ongoing basis, the Fund's method of valuation.
Information concerning how we value our Shares for the purchase and redemption
of our Shares is described in the Prospectus under "Purchases" and
"Redemptions", respectively.
As disclosed in the Prospectus, we calculate our net asset values and are
otherwise open for business on each day that the NYSE is open for trading. The
NYSE is closed on Saturdays and Sundays and the following holidays -- New Year's
Day, Martin Luther King, Jr., Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
The net asset value per share for the Class A shares will be determined in the
same manner as for the Class B and C shares (net assets divided by shares
outstanding). Our Class A shares will be sold with a front-end sales charge of
5.75%.
The maximum offering prices of each Series' Class A shares on October 31, 1997
were computed as follows:
Growth & Income International
SERIES SERIES
Net asset value per share (net assets
divided by shares outstanding $8.79 $10.86
Maximum offering price per
share (net asset value divided
by .9425 in both cases) $9.33 $11.52
The maximum offering prices of each Series' Class B shares on October 31, 1997
were computed as follows:
Net asset value per share (net assets
divided by shares outstanding $8.80 $10.83
The maximum offering prices of each Series' Class C shares on October 31, 1997
were computed as follows:
Net asset value per share (net assets
divided by shares outstanding $8.80 $10.83
<PAGE>
The Fund has entered into a distribution agreement with Lord Abbett Distributor
LLC, a New York limited liability company ("Lord Abbett Distributor"), under
which Lord Abbett Distributor is obligated to use its best efforts to find
purchasers for the shares of the Fund, and to make reasonable efforts to sell
Fund shares so long as, in Lord Abbett Distributor's judgment, a substantial
distribution can be obtained by reasonable efforts.
Conversion of Class B Shares. The conversion of Class B shares on the eighth
anniversary of their purchase is subject to the continuing availability of a
private letter ruling from the Internal Revenue Service, or an opinion of
counsel or tax adviser, to the effect that the conversion of Class B shares does
not constitute a taxable event for the holder under Federal income tax law. If
such a revenue ruling or opinion is no longer available, the automatic
conversion feature may be suspended, in which event no further conversions of
Class B shares would occur while such suspension remained in effect. Although
Class B shares could then be exchanged for Class A shares on the basis of
relative net asset value of the two classes, without the imposition of a sales
charge or fee, such exchange could constitute a taxable event for the holder.
CLASS A, B AND C RULE 12B-1 PLANS. As described in the Prospectus, the Fund has
adopted a Distribution Plan and Agreement on behalf of each Series pursuant to
Rule 12b-1 of the Act for each class of shares available in the applicable
series: the "A Plan", the "B Plan" and the "C Plan", respectively. In adopting
each Plan and in approving its continuance, the Board of Trustees has concluded
that there is a reasonable likelihood that each Plan will benefit its respective
Class and such Class' shareholders. The expected benefits include greater sales
and lower redemptions of Class shares, which should allow each Class to maintain
a consistent cash flow, and a higher quality of service to shareholders by
authorized institutions than would otherwise be the case. During the last fiscal
year, the Growth & Income Series accrued or paid through Lord Abbett to
authorized institutions $135,432 under the A Plan, $602 under the B Plan and
$785,927 under the C Plan. For the period December 13, 1996 (Commencement of
Operations) to October 31, 1997 the International Series accrued or paid through
Lord Abbett to authorized institutions $41,058 under the A Plan, $3,180 under
the B Plan and $6,653 under the C Plan . Lord Abbett used all amounts received
under the A, B and C Plans for the Growth & Income Series for payments to
dealers for (i) providing continuous services to the Class A shareholders, such
as answering shareholder inquiries, maintaining records, and assisting
shareholders in making redemptions, transfers, additional purchases and
exchanges and (ii) their assistance in distributing Class A shares of the Fund.
Each Plan requires the trustees to review, on a quarterly basis, written reports
of all amounts expended pursuant to the Plan and the purposes for which such
expenditures were made. Each Plan shall continue in effect only if its
continuance is specifically approved at least annually by vote of the trustees,
including a majority of the trustees who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related to the Plan ("outside trustees"), cast in
person at a meeting called for the purpose of voting on the Plan. No Plan may be
amended to increase materially above the limits set forth therein the amount
spent for distribution expenses thereunder without approval by a majority of the
outstanding voting securities of the applicable class and the approval of a
majority of the trustees, including a majority of the outside trustees. Each
Plan may be terminated at any time by vote of a majority of the outside trustees
or by vote of a majority of its Class's outstanding voting securities.
CONTINGENT DEFERRED SALES CHARGES. A Contingent Deferred Sales Charge ("CDSC"),
applies upon early redemption of shares regardless of class, and (i) will be
assessed on the lesser of the net asset value of the shares at the time of
redemption or the original purchase price and (ii) will not be imposed on (a)
the aggregate dollar amount of your account, in the case of Class A shares, and
(b) the percentage of each share redeemed, in the case of class B and C shares,
representing an increase in net asset value over the initial purchase price
(including increases due to the reinvestment of dividends and capital gains
distributions).
CLASS A SHARES. As stated in the Prospectus, a CDSC of 1% is imposed with
respect to those Class A shares (or Class A shares of another Lord
Abbett-sponsored fund or series acquired through exchange of such shares) on
which a Series has paid the one-time distribution fee of 1% if such shares are
redeemed out of the Lord Abbett-sponsored family of funds within a period of 24
months from the end of the month in which the original sale occurred.
CLASS B SHARES. As stated in the Prospectus, if Class B shares (or Class B
shares of another Lord Abbett-sponsored fund or series acquired through exchange
<PAGE>
of such shares) are redeemed out of the Lord Abbett-sponsored family of funds
for cash before the sixth anniversary of their purchase, a CDSC will be deducted
from the redemption proceeds. The Class B CDSC is paid to Lord Abbett
Distributor to reimburse its expenses, in whole or in part, for providing
distribution-related service in connection with the sale of Class B shares.
To determine whether the CDSC applies to a redemption, the Series redeems shares
in the following order: (1) shares acquired by reinvestment of dividends and
capital gains distributions, (2) shares held on or after the sixth anniversary
of their purchase, and (3) shares held the longest before such sixth
anniversary.
The amount of the contingent deferred sales charge will depend on the number of
years since you invested and the dollar amount being redeemed, according to the
following schedule:
Anniversary of the Day on Contingent Deferred Sales Charge
Which the Purchase Order Was Accepted on Redemptions (As % of Amount
Subject to Charge)
Before the 1st........................................................5.0%
On the 1st, before the 2nd............................................4.0%
On the 2nd, before the 3rd............................................3.0%
On the 3rd, before the 4th............................................3.0%
On the 4th, before the 5th............................................2.0%
On the 5th, before the 6th ...........................................1.0%
On or after the 6th anniversary.......................................None
In the table, an "anniversary" is the 365th day subsequent to the acceptance of
a purchase order or a prior anniversary. All purchases are considered to have
been made on the business day on which the purchase order was accepted.
CLASS C SHARES. As stated in the Prospectus, if Class C shares are redeemed for
cash before the first anniversary of their purchase, the redeeming shareholder
will be required to pay to the Series on behalf of Class C shares a CDSC of 1%
of the lower of cost or the then net asset value of Class C shares redeemed. If
such shares are exchanged into the same class of another Lord Abbett-sponsored
fund and subsequently redeemed before the first anniversary of their original
purchase, the charge will be collected by the other fund on behalf of this
Series' Class C shares.
GENERAL. Each percentage (1% in the case of Class A and C shares and 5% through
1% in the case of Class B shares) used to calculate CDSCs described above for
the Class A, Class B and Class C shares is sometimes hereinafter referred to as
the "Applicable Percentage".
With respect to Class A and Class B shares, no CDSC is payable on redemptions by
participants or beneficiaries from employer-sponsored retirement plans under the
Internal Revenue Code for benefit payments due to plan loans, hardship
withdrawals, death, retirement or separation from service and for returns of
excess contributions to retirement plan sponsors. In the case of Class A and
Class C shares, the CDSC is received by the applicable Series and is intended to
reimburse all or a portion of the amount paid by the Series if the shares are
redeemed before the Series has had an opportunity to realize the anticipated
benefits of having a long-term shareholder account in the Series. In the case of
Class B shares, the CDSC is received by Lord Abbett Distributor and is intended
to reimburse its expenses of providing distribution-related service to the
applicable Series (including recoupment of the commission payments made) in
connection with the sale of Class B shares before Lord Abbett Distributor has
had an opportunity to realize its anticipated reimbursement by having such a
long-term shareholder account subject to the B Plan distribution fee.
The other funds and series which participate in the Telephone Exchange Privilege
(except (a) Lord Abbett U.S. Government Securities Money Market Fund, Inc.
("GSMMF"), (b) certain series of Lord Abbett Tax-Free Income Fund and Lord
Abbett Tax-Free Income Trust for which a Rule 12b-1 Plan is not yet in effect,
and (c) any authorized institution's affiliated money market fund satisfying
Lord Abbett Distributor as to certain omnibus account and other criteria,
hereinafter referred to as an "authorized money market fund" or "AMMF"
(collectively, the "Non-12b-1 Funds")) have instituted a CDSC for each class on
the same terms and conditions. No CDSC will be charged on an exchange of shares
of the same class between Lord Abbett funds or between such funds and AMMF. Upon
redemption of shares out of the Lord Abbett family of funds or out of AMMF, the
CDSC will be charged on behalf of and paid: (i) to the fund in which the
original purchase (subject to a CDSC) occurred, in the case of the Class A and
<PAGE>
Class C shares and (ii) to Lord Abbett Distributor if the original purchase was
subject to a CDSC, in the case of the Class B shares. Thus, if shares of a Lord
Abbett fund are exchanged for shares of the same class of another such fund and
the shares of the same class tendered ("Exchanged Shares") are subject to a
CDSC, the CDSC will carry over to the shares of the same class being acquired,
including GSMMF and AMMF ("Acquired Shares"). Any CDSC that is carried over to
Acquired Shares is calculated as if the holder of the Acquired Shares had held
those shares from the date on which he or she became the holder of the Exchanged
Shares. Although the Non-12b-1 Funds will not pay a distribution fee on their
own shares, and will, therefore, not impose their own CDSC, the Non-12b-1 Funds
will collect the CDSC (a) on behalf of other Lord Abbett funds, in the case of
the Class A and Class C shares and (b) on behalf of Lord Abbett Distributor, in
the case of the Class B shares. Acquired Shares held in GSMMF and AMMF which are
subject to a CDSC will be credited with the time such shares are held in GSMMF
but will not be credited with the time such shares are held in AMMF. Therefore,
if your Acquired Shares held in AMMF qualified for no CDSC or a lower Applicable
Percentage at the time of exchange into AMMF, that Applicable Percentage will
apply to redemptions for cash from AMMF, regardless of the time you have held
Acquired Shares in AMMF.
In no event will the amount of the CDSC exceed the Applicable Percentage of the
lesser of (i) the net asset value of the shares redeemed or (ii) the original
cost of such shares (or of the Exchanged Shares for which such shares were
acquired). No CDSC will be imposed when the investor redeems (i) shares
representing an aggregate dollar amount of your account, in the case of Class A
shares, (ii) that percentage of each share redeemed, in the case of Class B and
C shares, derived from increases in the value of the shares above the total cost
of shares being redeemed due to increases in net asset value, (ii) shares with
respect to which no Lord Abbett fund paid a 12b-1 fee and, in the case of Class
B shares, Lord Abbett Distributor paid no sales charge or service fee (including
shares acquired through reinvestment of dividend income and capital gains
distributions) or (iii) shares which, together with Exchanged Shares, have been
held continuously for 24 months from the end of the month in which the original
sale occurred (in the case of Class A shares); for six years or more (in the
case of Class B shares) and for one year or more (in the case of Class C
shares). In determining whether a CDSC is payable, (a) shares not subject to the
CDSC will be redeemed before shares subject to the CDSC and (b) of the shares
subject to a CDSC, those held the longest will be the first to be redeemed.
EXCHANGES. The Prospectus briefly describes the Telephone Exchange Privilege.
You may exchange some or all of your shares of any class for those in the same
class of: (i) Lord Abbett-sponsored funds currently offered to the public with a
sales charge (front-end, back-end or level ), (ii) GSMMF or (iii) AMMF, to the
extent offers and sales may be made in your state. You should read the
prospectus of the other fund before exchanging. In establishing a new account by
exchange, shares of the Fund being exchanged must have a value equal to at least
the minimum initial investment required for the other fund into which the
exchange is made.
Shareholders in other Lord Abbett-sponsored funds and AMMF have the same right
to exchange their shares for the corresponding class of the Fund's shares.
Exchanges are based on relative net asset values on the day instructions are
received by the Fund in Kansas City if the instructions are received prior to
the close of the NYSE in proper form. No sales charges are imposed except in the
case of exchanges out of GSMMF or AMMF (unless a sales charge (front-end,
back-end or level) was paid on the initial investment in a Lord Abbett-sponsored
fund). Exercise of the exchange privilege will be treated as a sale for federal
income tax purposes, and, depending on the circumstances, a gain or loss may be
recognized. In the case of an exchange of shares that have been held for 90 days
or less where no sales charge is payable on the exchange, the original sales
charge incurred with respect to the exchanged shares will be taken into account
in determining gain or loss on the exchange only to the extent such charge
exceeds the sales charge that would have been payable on the acquired shares had
they been acquired for cash rather than by exchange. The portion of the original
sales charge not so taken into account will increase the basis of the acquired
shares.
Shareholders have the exchange privilege unless they refuse it in writing. You
should not view the exchange privilege as a means for taking advantage of
short-term swings in the market, and we reserve the right to terminate or limit
the privilege of any shareholder who makes frequent exchanges. We can revoke or
modify the privilege for all shareholders upon 60 days' prior notice. "Eligible
Funds" are AMMF and other Lord Abbett-sponsored funds which are eligible for the
exchange privilege, except Lord Abbett Series Fund ("LASF") which offers its
shares only in connection with certain variable annuity contracts, Lord Abbett
Equity Fund ("LAEF") which is not issuing shares, and series of Lord Abbett
Research Fund not offered to the general public ("LARF").
<PAGE>
STATEMENT OF INTENTION. Under the terms of the Statement of Intention to invest
$50,000 or more over a 13-month period as described in the Prospectus, shares of
a Lord Abbett-sponsored fund (other than shares of LAEF, LASF, LARF, GSMMF and
AMMF, unless holdings in GSMMF and AMMF are attributable to shares exchanged
from a Lord Abbett-sponsored fund offered with a front-end, back-end or level
sales charge) currently owned by you are credited as purchases (at their current
offering prices on the date the Statement is signed) toward achieving the stated
investment and reduced initial sales charge for Class A shares. Class A shares
valued at 5% of the amount of intended purchases are escrowed and may be
redeemed to cover the additional sales charge payable if the Statement is not
completed. The Statement of Intention is neither a binding obligation on you to
buy, nor on the Fund to sell, the full amount indicated.
RIGHTS OF ACCUMULATION. As stated in the Prospectus, purchasers (as defined in
the Prospectus) may accumulate their investment in Lord Abbett-sponsored funds
(other than LAEF, LARF, LASF, GSMMF, and AMMF unless holdings in GSMMF or AMMF
are attributable to shares exchanged from a Lord Abbett-sponsored fund offered
with a front-end, back-end or level sales charge) so that a current investment,
plus the purchaser's holdings valued at the current maximum offering price,
reach a level eligible for a discounted sales charge for Class A shares.
NET ASSET VALUE PURCHASES OF CLASS A SHARES. As stated in the Prospectus, our
Class A shares may be purchased at net asset value by our directors, employees
of Lord Abbett, employees of our shareholder servicing agent and employees of
any securities dealer having a sales agreement with Lord Abbett who consents to
such purchases or by the director or custodian under any pension or
profit-sharing plan or Payroll Deduction IRA established for the benefit of such
persons or for the benefit of employees of any national securities trade
organization to which Lord Abbett belongs or any company with an account(s) in
excess of $10 million managed by Lord Abbett on a private-advisory-account
basis. For purposes of this paragraph, the terms "directors" and "employees"
include a director's or employee's spouse (including the surviving spouse of a
deceased director or employee). The terms "our directors" and "employees of Lord
Abbett" also include retired directors and employees and other family members
thereof.
Our Class A shares also may be purchased at net asset value (a) at $1 million or
more, (b) with dividends and distributions from Class A shares of other Lord
Abbett-sponsored funds, except for LARF, LAEF and LASF, (c) under the loan
feature of the Lord Abbett-sponsored prototype 403(b) plan for share purchases
representing the repayment of principal and interest, (d) by certain authorized
brokers, dealers, registered investment advisers or other financial institutions
who have entered into an agreement with Lord Abbett Distributor in accordance
with certain standards approved by Lord Abbett Distributor, providing
specifically for the use of our shares in particular investment products made
available for a fee to clients of such brokers, dealers, registered investment
advisers and other financial institutions, ("mutual fund wrap fee program"), (e)
by employees, partners and owners of unaffiliated consultants and advisors to
Lord Abbett, Lord Abbett Distributor or Lord Abbett-sponsored funds who consent
to such purchase if such persons provide service to Lord Abbett, Lord Abbett
Distributor or such funds on a continuing basis and are familiar with such funds
and (f) through Retirement Plans with at least 100 eligible employees.
REDEMPTIONS. A redemption order is in proper form when it contains all of the
information and documentation required by the order form or supplementally by
Lord Abbett Distributor or the Fund to carry out the order. The signature(s) and
any legal capacity of the signer(s) must be guaranteed by an eligible guarantor.
See the Prospectus for expedited redemption procedures.
The right to redeem and receive payment, as described in the Prospectus, may be
suspended if the NYSE is closed (except for weekends or customary holidays),
trading on the NYSE is restricted or the Securities and Exchange Commission
deems an emergency to exist.
Our Board of Trustees may authorize redemption of all of the shares in any
account in which there are fewer than 60 shares. Before authorizing such
redemption, the Board must determine that it is in our economic best interest or
necessary to reduce disproportionately burdensome expenses in servicing
shareholder accounts. At least 6 months prior written notice will be given
before any such redemption, during which time shareholders may avoid redemption
by bringing their accounts up to the minimum set by the Board.
DIV-MOVE. Under the Div-Move service described in the Prospectus, you can invest
the dividends paid on your account of any class into an existing account of the
<PAGE>
same class in any other Eligible Fund. The account must be either your account,
a joint account for you and your spouse, a single account for your spouse, or a
custodial account for your minor child under the age of 21. You should read the
prospectus of the other fund before investing.
INVEST-A-MATIC. The Invest-A-Matic method of investing in the Fund and/or any
other Eligible Fund is described in the Prospectus. To avail yourself of this
method you must complete the application form, selecting the time and amount of
your bank checking account withdrawals and the funds for investment, include a
voided, unsigned check and complete the bank authorization.
SYSTEMATIC WITHDRAWAL PLANS. The Systematic Withdrawal Plan ("SWP") also is
described in the Prospectus. You may establish a SWP if you own or purchase
uncertificated shares having a current offering price value of at least $10,000.
Lord Abbett prototype retirement plans have no such minimum. With respect to a
SWP for Class B shares, on redemptions over 12% per year, the CDSC will apply to
the entire redemption. Therefore, please contact the Fund for assistance in
minimizing the CDSC in this situation. With respect to Class C shares, the CDSC
will be waived on and after the first anniversary of their purchase. The SWP
involves the planned redemption of shares on a periodic basis by receiving
either fixed or variable amounts at periodic intervals. Since the value of
shares redeemed may be more or less than their cost, gain or loss may be
recognized for income tax purposes on each periodic payment. Normally, you may
not make regular investments at the same time you are receiving systematic
withdrawal payments because it is not in your interest to pay a sales charge on
new investments when in effect a portion of that new investment is soon
withdrawn. The minimum investment accepted while a withdrawal plan is in effect
is $1,000. The SWP may be terminated by you or by us at any time by written
notice.
RETIREMENT PLANS. The Prospectus indicates the types of retirement plans for
which Lord Abbett provides forms and explanations. Lord Abbett makes available
the retirement plan forms and custodial agreements for IRAs (Individual
Retirement Accounts, including Simple IRAs and Simplified Employee Pensions),
403(b) plans and qualified pension and profit-sharing plans, including 401(k)
plans. The forms name Investors Fiduciary Trust Company as custodian and contain
specific information about the plans. Explanations of the eligibility
requirements, annual custodial fees and allowable tax advantages and penalties
are set forth in the relevant plan documents. Adoption of any of these plans
should be on the advice of your legal counsel or qualified tax adviser.
6.
PAST PERFORMANCE
Each Series computes the average annual compounded rate of total return for each
Class during specified periods that would equate the initial amount invested to
the ending redeemable value of such investment by adding one to the computed
average annual total return, raising the sum to a power equal to the number of
years covered by the computation and multiplying the result by $1,000, which
represents a hypothetical initial investment. The calculation assumes deduction
of the maximum sales charge (as described in the next paragraph) from the amount
invested and reinvestment of all income dividends and capital gains
distributions on the reinvestment dates at net asset value. The ending
redeemable value is determined by assuming a complete redemption at the end of
the period(s) covered by the average annual total return computation.
In calculating total returns for Class A shares, the current maximum sales
charge of 5.75% (as a percentage of the offering price) is deducted from the
initial investment (unless the return is shown at net asset value). For Class B
shares, the payment of the applicable CDSC (5.0% prior to the first anniversary
of purchase, 4.0% prior to the second anniversary of purchase, 3.0% prior to the
third and fourth anniversaries of purchase, 2.0% prior to the fifth anniversary
of purchase, 1.0% prior to the sixth anniversary of purchase and no CDSC on and
after the sixth anniversary of purchase) is applied to the Series' investment
result for that class for the time period shown (unless the total return is
shown at net asset value). For Class C shares, the 1.0% CDSC is applied to the
applicable Series' investment result for that class for the time period shown
prior to the first anniversary of purchase (unless the total return is shown at
net asset value). Total returns also assume that all dividends and capital gains
distributions during the period are reinvested at net asset value per share, and
that the investment is redeemed at the end of the period.
Using the computation method described above, the Growth & Income Series'
average annual compounded rates of total return for the fiscal year ending on
<PAGE>
October 31, 1997 were 19.60% and 26.20% for the Series' Class A and C shares,
respectively. The total return for Class B shares for the period June 5, 1997
through October 31, 1997 was 1.84% (not annualized).
The total return for the International Series for the period December 13, 1996
to October 31, 1997 was 8.60% (not annualized). The total return for the Class B
and Class C shares for the period June 5, 1997 through October 31, 1997 was
0.32% (not annualized) and 4.54% (not annualized), respectively..
Each Series' yield quotation for each class is based on a 30-day period ended on
a specified date, computed by dividing such Series' net investment income per
share earned during the period by such Series' maximum offering price per share
on the last day of the period. This is determined by finding the following
quotient: take the Class' dividends and interest earned during the period minus
its expenses accrued for the period and divide by the product of (i) the average
daily number of Class shares outstanding during the period that were entitled to
receive dividends and (ii) the Series' maximum offering price per share on the
last day of the period. To this quotient add one. This sum is multiplied by
itself five times. Then one is subtracted from the product of this
multiplication and the remainder is multiplied by two. Yield for the Class A
shares reflects the deduction of the maximum initial sales charge, but may also
be shown based on the Series' net asset value per share. Yields for Class B and
Class C shares do not reflect the deduction of the CDSC.
These figures represent past performance, and an investor should be aware that
the investment return and principal value of a Fund investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. Therefore, there is no assurance that this performance will be
repeated in the future.
7.
TAXES
The value of any shares redeemed by the Fund or repurchased or otherwise sold
may be more or less than your tax basis in the shares at the time the
redemption, repurchase or sale is made. Any gain or loss will generally be
taxable for federal income tax purposes. Any loss realized on the sale,
redemption or repurchase of Fund shares which you have held for six months or
less will be treated for tax purposes as a long-term capital loss to the extent
of any distribution designated by the Fund as a "capital gains distribution"
which you received with respect to such shares. Losses on the sale of stock or
securities are not deductible if, within a period beginning 30 days before the
date of the sale and ending 30 days after the date of the sale, the taxpayer
acquires stock or securities that are substantially identical.
The writing of call options and other investment techniques and practices which
the Fund may utilize, as described above under "Investment Objectives and
Policies," may create "straddles" for United States federal income tax purposes
and may affect the character and timing of the recognition of gains and losses
by the Fund. Such transactions may increase the amount of short-term capital
gain realized by the Fund, which is taxed as ordinary income when distributed to
shareholders. Limitations imposed by the Internal Revenue Code on regulated
investment companies may restrict the Fund's ability to engage in transactions
in options.
The Fund will be subject to a 4% non-deductible excise tax on certain amounts
not distributed (and not treated as having been distributed) on a timely basis
in accordance with a calendar-year distribution requirement. The Fund intends to
distribute to shareholders each year an amount adequate to avoid the imposition
of such excise tax. Dividends paid by the Fund will qualify for the
dividends-received deduction for corporations to the extent they are derived
from dividends paid by domestic corporations.
As described in the Prospectus under "Risk Factors," the International Series
may be subject to foreign withholding taxes which would reduce the yield on its
investments. Tax treaties between certain countries and the United States may
reduce or eliminate such taxes. It is expected that Series shareholders who are
subject to United States federal income tax will be entitled to claim a federal
income tax credit or deduction for foreign income taxes paid by the Series.
Gains and losses realized by the International Series on certain transactions,
including sales of foreign debt securities and certain transactions involving
foreign currency, will be treated as ordinary income or loss for federal income
<PAGE>
tax purposes to the extent, if any, that such gains or losses are attributable
to changes in exchange rates for foreign currencies. Accordingly, distributions
taxable as ordinary income will include the net amount, if any, of such foreign
exchange gains and will be reduced by the net amount, if any, of such foreign
exchange losses.
The foregoing discussion relates solely to U.S. federal income tax law as
applicable to United States persons (United States citizens or residents and
United States domestic corporations, partnerships, trusts and estates.) Each
shareholder who is not a United States person should consult his tax adviser
regarding the U.S. and foreign tax consequences of the ownership of shares of
the Fund, including a 30% (or lower treaty rate) United States withholding tax
on dividends representing ordinary income and net short-term capital gains, and
the applicability of United States gift and estate taxes to non-United States
persons who own Fund shares.
8.
INFORMATION ABOUT THE FUND
Shareholder Liability. Delaware law provides that Fund shareholders shall be
entitled to the same limitations of personal liability extended to stockholders
of private corporations for profit. The courts of some states, however, may
decline to apply Delaware law on this point. The Fund's Declaration of Trust
contains an express disclaimer of shareholder liability for the acts,
obligations, or affairs of the Fund and requires that a disclaimer be given in
each contract entered into or executed by the Fund. The Declaration provides for
indemnification out of the Fund's property of any shareholder or former
shareholder held personally liable for the obligations of the Fund. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which Delaware law does not apply, no
contractual limitation of liability was in effect and the portfolio is unable to
meet its obligations. Lord Abbett believes that, in view of the above, the risk
of personal liability to shareholders is extremely remote.
Under The Fund's Declaration of Trust, the trustees may, without shareholder
vote, cause the Fund to merge or consolidate into, or sell and convey all or
substantially all of, the assets of the Fund to one or more trusts, partnerships
or corporations, so long as the surviving entity is an open-end management
investment company that will succeed to or assume the Fund's registration
statement. In addition, the trustees may, without shareholder vote, cause the
Fund to be incorporated under Delaware law.
Derivative actions on behalf of the Fund may be brought only by shareholders
owning not less than 50% of the then outstanding shares of the Fund.
The directors, trustees and officers of Lord Abbett-sponsored mutual funds,
together with the partners and employees of Lord Abbett, are permitted to
purchase and sell securities for their personal investment account. In engaging
in personal securities transactions, however, such persons are subject to
requirements and restrictions contained in the Trust's Code of Ethics which
complies, in substance, with each of the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing. Among other things,
the Code requires that Lord Abbett partners and employees obtain advance
approval before buying or selling securities, submit confirmations and quarterly
transaction reports, and obtain approval before becoming a director of any
company; and it prohibits such persons from investing in a security seven days
before or after any Lord Abbett-sponsored fund trades in such security,
profiting from trades of the same security within 60 days and trading on
material non-public information. The Code imposes similar requirements and
restrictions on the independent trustees of the Trust to the extent contemplated
by the recommendations of such Advisory Group.
9.
FINANCIAL STATEMENTS
The financial statements for the period from December 13, 1996 to October 31,
1997 with respect to the International Series and the fiscal year ended October
31, 1997 with respect to the Growth & Income Series and the report of Deloitte &
Touche LLP, independent auditors, on such financial statements contained in the
1997 Annual Report to Shareholders of Lord Abbett Securities Trust are
incorporated herein by reference to such financial statements and report in
reliance upon the authority of Deloitte & Touche LLP as experts in auditing and
accounting.
<PAGE>
PART C OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
Part A - Financial Highlights for the period December
31, 1994 (commencement of operations Growth & Income
Series) to October 31, 1995; fiscal years ended October
31, 1996 and 1997.
Part B - Statement of Net Assets (Growth & Income
Series) at October 31, 1996. Statement of Operations
(Growth & Income Series) for the fiscal year ended
October 31, 1996 and 1997.
(b) Exhibits -
99.B1 Amendment to Declaration & Agreement of Trust
establishing International Series*
99.B2 By-laws*
99.B6 Distribution Agreement**
99.B7 Profit Sharing or Similar Arrangement
for Directors*
99.B11 Consent of Deloitte & Touche*
99.B15 12b-1 Plans***
99.B16 Computation of Performance & Yield*
99.B18 Amended and Restated Plan entered into by
Registrant pursuant to Rule 18f-3****
* Filed herwith.
** Incorporated by reference to Post-Effective
Amendment No. 10 to the Registration Statement
on Form N-1A of Lord Abbett Series Fund, Inc.
(File No. 811-5876).
*** Incorporated by reference to Post-Effective
Amendment No. 12 to the Registration Statement
on Form N-1A of Lord Abbett Research Fund, Inc.
(File No. 811-6650).
**** Incorporated by reference to Post-Effective
Amendment No. 12 to the Registration Statement
on Form N-1A of Lord Abbett Investment Trust
(File No. 811-7988).
Exhibit items not listed above have either already been filed
or are not applicable.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
Item 26. NUMBER OF RECORD HOLDERS OF SECURITIES
(as of February 20, 1998)
Growth & Income Series
Class A - 3,482
Class B - 207
Class C - 4,468
International Series
Class A - 4,240
Class B - 918
Class C - 953
Item 27. INDEMNIFICATION
The Registrant is a Delaware Business Trust established under
Chapter 38 of Title 12 of the Delaware Code. The Registrant's
Declaration and Instrument of Trust at Section 4.3 relating to
indemnification of Trustees, officers, etc. states the
following.
The Trust shall indemnify each of its Trustees, officers,
employees and agents (including any individual who serves at
its request as director, officer, partner, trustee or the like
of another organization in which it has any interest as a
shareholder, creditor or otherwise) against all liabilities
and expenses, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by him or her
in connection with the defense or disposition of any action,
suit or other proceeding, whether civil or criminal, before
any court or administrative or legislative body in which he or
she may be or may have been involved as a party or otherwise
or with which he or she may be or may have been threatened,
while acting as Trustee or as an officer, employee or agent of
the Trust or the Trustees, as the case may be, or thereafter,
by reason of his or her being or having been such a Trustee,
officer, employee or agent, EXCEPT with respect to any matter
as to which he or she shall have been adjudicated not to have
acted in good faith in the reasonable belief that his or her
action was in the best interests of the Trust or any Series
thereof. Notwithstanding anything herein to the contrary, if
any matter which is the subject of indemnification hereunder
relates only to one Series (or to more than one but not all of
the Series of the Trust), then the indemnity shall be paid
only out of the assets of the affected Series. No individual
shall be indemnified hereunder against any liability to the
Trust or any Series thereof or the Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her
office. In addition, no such indemnity shall be provided with
respect to any matter disposed of by settlement or a
compromise payment by such Trustee, officer, employee or
agent, pursuant to a consent decree or otherwise, either for
said payment or for any other expenses unless there has been a
determination that such compromise is in the best interests of
the Trust or, if appropriate, of any affected Series thereof
and that such Person appears to have acted in good faith in
the reasonable belief that his or her action was in the best
interests of the Trust or, if appropriate, of any affected
Series thereof, and did not engage in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office. All
determinations that the applicable standards of conduct have
been met for indemnification hereunder shall be made by (A) a
majority vote of a quorum consisting of disinterested Trustees
who are not parties to the proceeding relating to
indemnification, or (b) if such a quorum is not obtainable or,
even if obtainable, if a majority vote of such quorum so
directs, by independent legal counsel in a written opinion, or
(C) a vote of Shareholders (excluding Shares owned of record
or beneficially by such individual). In addition, unless a
matter is disposed of with a court determination (I) on the
merits that such Trustee, officer, employee or agent was not
liable or (II) that such Person was not guilty of willful
misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office, no
indemnification shall be provided hereunder unless there has
been a determination by independent legal counsel in a written
opinion that such Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office.
The Trustees may make advance payments out of the assets of
the Trust or, if appropriate, of the affected Series in
connection with the expense of defending any action with
respect to which indemnification might be sought under this
Section 4.3. The indemnified Trustee, officer, employee or
agent shall give a written undertaking to reimburse the Trust
or the Series in the event it is subsequently determined that
he or she is not entitled to such indemnification and (A) the
indemnified Trustee, officer, employee or agent shall provide
security for his or her undertaking, (B) the Trust shall be
insured against losses arising by reason of lawful advances,
or (C) a majority of a quorum of disinterested Trustees or an
independent legal counsel in a written opinion shall
determine, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to
believe that the indemnitee ultimately will be found entitled
to indemnification. The rights accruing to any Trustee,
officer, employee or agent under these provisions shall not
exclude any other right to which he or she may be lawfully
entitled and shall inure to the benefit of his or her heirs,
executors, administrators or other legal representatives.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to Trustees, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of
expense incurred or paid by a Trustee, officer or controlling
person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such Trustee,
officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Lord, Abbett & Co. acts as investment manager and/or principal
underwriter for twelve other Lord Abbett open-end investment
companies (of which it is principal underwriter for thirteen),
and as investment adviser to approximately 6,220 private
accounts as of December 31, 1997. Other than acting as
Trustees (directors) and/or officers of open-end investment
companies managed by Lord, Abbett & Co., none of Lord, Abbett
& Co.'s partners has, in the past two fiscal years, engaged in
any other business, profession, vocation or employment of a
substantial nature for his own account or in the capacity of
director, officer, employee, partner or trustee of any entity
except as follows:
John J. Walsh
Trustee
Brooklyn Hospital
Parkside Avenue
Brooklyn, N.Y.
Item 29. PRINCIPAL UNDERWRITER
(a) Lord Abbett Affiliated Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Mid-Cap Value Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett Government Securities Money Market Fund, Inc.
Lord Abbett Tax-Free Income Trust
Lord Abbett Global Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Series Fund, Inc.
Lord Abbett Research Fund, Inc.
Lord Abbett Investment Trust
INVESTMENT ADVISER
American Skandia Trust (Lord Abbett Growth and Income Portfolio)
(b) The partners of Lord, Abbett & Co. are:
Name and Principal Positions and Offices
BUSINESS ADDRESS (1) WITH REGISTRANT
Robert S. Dow Chairman and President
Paul A. Hilstad Vice President & Secretary
Stephen I. Allen Vice President
Zane E. Brown Vice President
Daniel E. Carper Vice President
Daria L. Foster Vice President
Robert G. Morris Vice President
Robert J. Noelke Vice President
E. Wayne Nordberg Vice President
John J. Walsh Vice President
The other general partners of Lord, Abbett & Co. who are neither
officers nor directors of the Registrant are W. Thomas Hudson and
Michael McLaughlin.
(1) Each of the above has a principal business address at
767 Fifth Avenue, New York, NY 10153
(c) Not applicable
Item 30. LOCATION OF ACCOUNTS AND RECORDS
Registrant maintains the records, required by Rules 31a - 1(a)
and (b), and 31a - 2(a) at its main office.
Lord Abbett & Co. maintains the records required by Rules 31a -
1(f) and 31a - 2(e) at its main office.
Certain records such as correspondence may be physically
maintained at the main office of the Registrant's Transfer Agent,
Custodian, or Shareholder Servicing Agent within the requirements
of Rule 31a-3.
Item 31. MANAGEMENT SERVICES
None.
Item 32. UNDERTAKINGS
The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without
charge.
The Registrant undertakes, if requested to do so by the
holders of at least 10% of the Registrant's outstanding
shares, to call a meeting of shareholders for the purpose of
voting upon the question of removal of a director or directors
and to assist in communications with other shareholders as
required by Section 16(c).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant has duly caused this Registration Statement
and/or any amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on the
31st day of December 1997.
LORD ABBETT SECURITIES TRUST
BY s/Robert S. Dow
---------------------------
Robert S. Dow
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Chairman, President
s/Robert S. Dow and Trustee February 27, 1998
- --------------------------- -------------------------- --------------------
Robert S. Dow (Title) (Date)
Vice President and
s/Keith F. O'Connor Chief Financial Officer February 27, 1998
- --------------------------- -------------------------- --------------------
Keith F. O'Connor (Title) (Date)
s/E. Wayne Nordberg Trustee February 27, 1998
- --------------------------- -------------------------- --------------------
E. Wayne Nordberg (Title) (Date)
s/Stewart S. Dixon Trustee February 27, 1998
- --------------------------- -------------------------- --------------------
Stewart S. Dixon (Title) (Date)
s/John C. Jansing Trustee February 27, 1998
- --------------------------- -------------------------- --------------------
John C. Jansing (Title) (Date)
s/C. Alan MacDonald Trustee February 27, 1998
- --------------------------- -------------------------- --------------------
C. Alan MacDonald (Title) (Date)
s/Hansel B. Millican Trustee February 27, 1998
- --------------------------- -------------------------- --------------------
Hansel B. Millican, Jr. (Title) (Date)
s/Thomas J. Neff Trustee February 27, 1998
- --------------------------- -------------------------- --------------------
Thomas J. Neff (Title) (Date)
s/Thayer Bigelow Trustee February 27, 1998
- --------------------------- -------------------------- --------------------
E. Thayer Bigelow (Title) (Date)
CERTIFICATE OF TRUST
OF
LORD ABBETT SECURITIES TRUST
THIS Certificate of Trust of Lord Abbett Securities Trust (the
"Trust"), dated February 26, 1993, is being duly executed and filed by all of
the trustees of the Trust, to form a business trust under the Delaware Business
Trust Act (12 Del. Code ss. 3801, et seg.).
1. NAME. The name of the business trust formed hereby is Lord
Abbett Securities Trust.
2. REGISTERED AGENT. The Trust will be a registered investment
company under the Investment Company Act of 1940, as amended. Accordingly, the
business address of the registered office of the Trust in the State of Delaware
is 32 Loockerman Square, Suite L-100, Dover, Delaware, County of Kent, 19901.
The name of the Trust's registered agent at such address is Prentice-Hall
Corporation System, Inc.
3. EFFECTIVE DATE. This Certificate of Trust shall be
effective upon the date and time of filing.
4. SERIES TRUST. Notice is hereby given that pursuant to
Section 3804 of the Delaware Business Trust Act, the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to a particular series of the Trust shall be enforceable against the
assets of such series only and not against the assets of the Trust generally.
IN WITNESS WHEREOF, the undersigned, being all of the trustees
of the Trust, have executed this Certificate of Trust as of the date first
above-written.
/s/ Ronald P. Lynch
Ronald P. Lynch
/s/ Robert S. Dow
Robert S. Dow
<PAGE>
LORD ABBETT SECURITIES TRUST
---------------------------
DECLARATION AND AGREEMENT OF TRUST
February 26, 1993
---------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I
NAME AND DEFINITIONS..........................................2
Section 1.1. Name.......................................................2
Section 1.2. Definitions............................... ................2
Section 1.3. Purposes...................................................4
ARTICLE II
TRUSTEES...................7
Section 2.1. Powers.....................................................7
Section 2.2. Legal Title...............................................13
Section 2.3. Number of Trustees; Term of Office.................... ...13
Section 2.4. Election of Trustees......................................14
Section 2.5. Resignation and Removal................................ ..14
Section 2.6. Vacancies.................................................14
Section 2.7. Committees; Delegation....................................15
Section 2.8. Quorum; Voting............................................16
Section 2.9. Action Without a Meeting; Participation by
Conference Telephone......................................16
Section 2.10. By-Laws...................................................17
Section 2.11. No Bond Required..........................................17
Section 2.12. Reliance on Experts, Etc..................................17
Section 2.13. Standard of Care of Trustees..............................18
ARTICLE III
CONTRACTS..................18
Section 3.1. Distribution Contract................................18
Section 3.2. Advisory or Management Contracts..........................19
Section 3.3. Affiliations of Trustees or Officers, Etc.................19
<PAGE>
ARTICLE IV
LIMITATION OF LIABILITY; INDEMNIFICATION.........20
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc......20
Section 4.2. Execution of Documents; Notice; Apparent Authority........21
Section 4.3. Indemnification of Trustees, Officers, Etc................22
Section 4.4. Indemnification of Shareholders...........................25
ARTICLE V
SHARES OF BENEFICIAL INTEREST........25
Section 5.1. Beneficial Interest.......................................25
Section 5.2. Series Designation........................................26
Section 5.3. Additional Series; Classes................................26
Section 5.4. Series Assets, Liabilities and Expenses...................27
Section 5.4.1. Series Assets...........................27
Section 5.4.2. Series Liabilities and Expenses...... ..28
Section 5.4.3. Termination of a Series.................29
Section 5.5. Rights of Shareholders....................................30
Section 5.6. Trust Only................................................30
Section 5.7. Issuance of Shares........................................31
Section 5.7.1. General.................................31
Section 5.7.2. Price...................................31
Section 5.7.3. On Merger or Consolidation..............31
Section 5.7.4. Fractional Shares...................... 32
Section 5.8. Register of Shares........................................32
Section 5.9. Share Certificates........................................32
Section 5.10. Transfer of Shares........................................33
Section 5.11. Voting Powers.............................................33
Section 5.12. Meetings of Shareholders..................................35
Section 5.13. Action Without a Meeting..................................35
Section 5.14. Quorum and Required Vote..................................35
Section 5.15. Additional Provisions.....................................36
Section 5.16. Removal of Trustees by Shareholders.......................36
Section 5.17. Derivative Suits..........................................37
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES..
Section 6.1. Redemption of Shares......................................37
Section 6.2. Price............................................... .....37
<PAGE>
Section 6.3. Payment.................................................37
Section 6.4. Effect of Suspension of Right of Redemption......... ...38
Section 6.5. Repurchase by Agreement.................................38
Section 6.6. Suspension of Right of Redemption.......................39
Section 6.7. Involuntary Redemption of Shares; Disclosure of Holding.39
ARTICLE VII
DERMINATION OF NET ASSET VALUE; DISTRIBUTIONS........41
Section 7.1. By Whom Determined......................................41
Section 7.2. When Determined.........................................41
Section 7.3. Computation of Per Share Net Asset Value................41
Section 7.3.1. Net Asset Value Per Share.............41
Section 7.3.2. Value of the Net Assets of a Series...42
Section 7.4. Interim Determinations..................................43
Section 7.5. Outstanding Shares......................................44
Section 7.6. Distributions to Shareholders........................ ..44
ARTICLE VIII
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC...........45
Section 8.1. Duration and Termination.................................45
Section 8.2. Amendment Procedure.................................. ...48
Section 8.4. Incorporation............................................48
ARTICLE IX
MISCELLANEOUS...............49
Section 9.1. Registered Agent; Registered Office......................49
Section 9.2. Governing Law............................................49
Section 9.3. Counterparts.............................................51
Section 9.4. Reliance by Third Parties................................51
Section 9.5. Provisions in Conflict with Law or Regulations........ ..51
Section 9.6. Use of Name..............................................52
Section 9.7. Section Headings; Interpretation..................... ...53
<PAGE>
DECLARATION AND AGREEMENT OF TRUST
OF
LORD ABBETT SECURITIES TRUST
DECLARATION AND AGREEMENT OF TRUST made on February 26, 1993
by and among the individuals executing this Declaration and Agreement of Trust
as Trustees and the holders from time to time of the shares of beneficial
interest issued hereunder.
WHEREAS, the Trustees desire to establish a business trust for
the investment and reinvestment of funds contributed thereto and the carrying on
of business and dividing the gains therefrom; and
WHEREAS, the Trustees desire that the beneficial interest in
the trust assets be divided into transferable shares of beneficial interest, as
hereinafter provided;
NOW THEREFORE, the Trustees hereby declare that all money and
property contributed to the trust established hereunder and all proceeds thereof
shall be held and managed in trust for the pro rata benefit of the holders, from
time to time, of the shares of beneficial interest issued hereunder and subject
to the provisions hereof.
<PAGE>
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. NAME. The name of the trust created hereby is
"Lord Abbett Securities Trust", in which name the Trustees shall conduct the
business and activities of the Trust and execute all documents and take all
actions authorized herein.
Section 1.2. DEFINITIONS. Wherever they are used herein, the following
terms have the following meanings:
"Affiliated Person" shall have the meaning set forth in
Section 2(a)(3) of the 1940 Act.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the Securities and Exchange Commission.
"Declaration" shall mean this Declaration and Agreement of Trust as amended from
time to time. This Declaration and any By-laws of the Trust shall constitute the
governing instrument of the Trust.
"Delaware Act" shall mean Chapter 38 of Title 12 of the
Delaware Code entitled "Treatment of Delaware Business Trusts", as it may be
amended from time to time.
"Interested Person" shall have the meaning set forth in
Section 2(a)(19) of the 1940 Act.
"Majority Shareholder Vote" or "Series Majority Shareholder's
Vote" shall mean the vote of a majority of the outstanding voting securities, as
defined in Section
<PAGE>
2(a)(42) of the 1940 Act, of the Trust, provided that if there are two or more
Series of Shares outstanding, then "Series Majority Shareholder Vote" shall
have, when used with respect to any matter required to be submitted to the
holders of the outstanding Shares of any Series pursuant to this Declaration or
the 1940 Act, the meaning set forth in Rule 18f-2 under the 1940 Act.
"1940 Act" shall mean the Investment Company Act of 1940, as
amended from time to time.
"Person" shall mean an individual, a company, a corporation,
partnership, trust, or association, a joint venture, an organization, a
business, a firm or other entity, whether or not a legal entity, or a country, a
state, municipality or other political subdivision or any governmental agency or
instrumentality.
"Principal Underwriter" shall have the meaning set forth in
Section 2(a)(29) of the 1940 Act.
"Series" shall mean the one or more separate series of Shares
authorized by Section 5.3 of this Declaration.
"Shareholder" shall mean a record owner of Shares.
"Shares" shall mean the units of interest into which the
beneficial interest in the Trust (or, if more than one Series or more than one
class of Series is authorized, in each Series and class thereof) shall be
divided from time to time and includes fractions of Shares as well as whole
Shares. All references to Shares shall be deemed to refer to Shares of any or
all Series, or classes thereof, as the context may require.
<PAGE>
"Trust" shall mean the Delaware business trust established
under the Delaware Act by this Declaration, as from time to time amended. All
provisions herein relating to the Trust shall apply equally to each Series of
the Trust, and each class thereof, except as the context otherwise requires.
"Trustees" shall mean the individuals who have signed this
Declaration, so long as they shall continue in office in accordance with the
terms hereof, and all other individuals who may from time to time be duly
elected or appointed, qualified and serving as Trustees in accordance with the
provisions of Article II hereof, and reference herein to a Trustee or the
Trustees shall refer to such person or persons in his or her capacity or their
capacities as trustees hereunder.
"Trust Property" shall mean any and all property, real or
personal, tangible or intangible, which is owned or held by or for the account
of the Trust or the Trustees, including any and all assets of or allocated to
any Series, as the context may require.
Section 1.3. PURPOSES. This Trust is formed for the following purpose or
purposes:
(a) to conduct, operate and carry on the business of an investment
company;
(b) to subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, lend, write options on,
exchange, distribute or otherwise dispose of and deal in and with securities of
every nature, kind, character, type and form, including, without limitation of
the generality of the foregoing, all types
<PAGE>
of stocks, shares, futures contracts, bonds, debentures, notes, bills and other
negotiable or non-negotiable instruments, obligations, evidences of interest,
certificates of interest, certificates of participation, certificates,
interests, evidences of ownership, guarantees, warrants, options or evidences of
indebtedness issued or created by or guaranteed as to principal and interest by
any state or local government or any agency or instrumentality thereof, by the
United States Government or any agency, instrumentality, territory, district or
possession thereof, by any foreign government or any agency, instrumentality,
territory, district or possession thereof, by any foreign government or any
agency, instrumentality, territory, district or possession thereof, by any
corporation organized under the laws of any state, the United States or any
territory or possession thereof or under the laws of any foreign country, bank
certificates of deposit, bank time deposits, bankers' acceptances and commercial
paper; to pay for the same in cash or by the issue of stock, including treasury
stock, bonds or notes of the Trust or otherwise; and to exercise any and all
rights, powers and privileges of ownership or interest in respect of any and all
such investments of every kind and description, including, without limitation,
the right to consent and otherwise act with respect thereto, with power to
designate one or more persons, firms, associations or corporations to exercise
any said rights, powers, and privileges in respect to any said instruments;
(c) to borrow money or otherwise obtain credit and to secure
the same by mortgaging, pledging or otherwise subjecting as security the assets
of the Trust;
<PAGE>
(d) to issue, sell, repurchase, redeem, retire, cancel,
acquire, hold, resell, reissue, dispose of, and otherwise deal in, Shares
including Shares in fractional denominations, and to apply to any such
repurchase, redemption, retirement, cancellation or acquisition of Shares any
funds or other assets of the appropriate Series or class of Shares, whether
capital or surplus or otherwise, to the full extent now or hereafter permitted
by the laws of the State of Delaware;
(e) to conduct its business, promote its purposes, and carry
on its operations in any and all of its branches and maintain offices both
within and without the State of Delaware, in any and all States of the United
States of America, in the District of Columbia, and in any other parts of the
world; and
(f) to do all and everything necessary, suitable, convenient,
or proper for the conduct, promotion, and attainment of any of the businesses
and purposes herein specified or which at any time may be incidental thereto or
may appear conducive to or expedient for the accomplishment of any such
businesses and purposes and which might be engaged in or carried on by a Trust
organized under the Delaware Act, and to have and exercise all of the powers
conferred by the laws of the State of Delaware upon a Delaware business trust.
The foregoing provisions of this Section 1.3 shall be
construed both as purposes and powers and each as an independent purpose and
power.
<PAGE>
ARTICLE II
TRUSTEES
Section 2.1. POWERS. The Trustees, subject only to the
specific limitations contained in this Declaration, shall have exclusive and
absolute power, control and authority over the Trust Property and over the
conduct of the affairs of the Trust set forth in Section 1.3 hereof, including
such power, control and authority to do all such acts and things as in their
sole judgment and discretion are necessary, incidental, convenient or desirable
for the carrying out of or conducting of the business of the Trust or in order
to promote the interests of the Trust, but with such powers of delegation as may
be permitted by this Declaration. The enumeration of any specific power, control
or authority herein shall not be construed as limiting the aforesaid power,
control and authority or any other specific power, control or authority. The
Trustees shall have power to conduct and carry on the business of the Trust, or
any part thereof, to have one or more offices and to exercise any or all of its
trust powers and rights, in the State of Delaware, in any other states,
territories, districts, colonies and dependencies of the United States and in
any foreign countries. In construing the provisions of this Declaration, the
presumption shall be in favor of a grant of power to the Trustees. Such powers
of the Trustees may be exercised without order of or resort to any court.
Without limiting the foregoing, the Trustees shall have the power:
a. To enter into contracts of any nature related to the business of the
Trust.
<PAGE>
b. To appoint agents and employees of the Trust, which agents
and employees may be designated as officers of the Trust with
corresponding titles as the Trustees may determine in their discretion.
c. To exercise all rights, powers and privileges of ownership
or interest in all securities included in the Trust Property, including
the right to vote, give assent, execute and deliver proxies or powers
of attorney to such person or persons as the Trustees shall deem proper
and otherwise act with respect thereto and to do all acts for the
preservation, protection, improvement and enhancement in value of all
such securities and to delegate, assign, waive or otherwise dispose of
any of such rights, powers or privileges.
d. To exercise powers and rights of subscription or otherwise
which in any manner arise out of the Trust's ownership of securities.
e. To declare (from interest, dividends or other income
received or accrued, from accruals of original issue or other discounts
on obligations held, from capital or other profits whether realized or
unrealized and from any other lawful sources) dividends and
distributions on the Shares and to credit the same to the account of
Shareholders, or at the election of the Trustees to accrue income to
the account of Shareholders, on such dates (which may be as frequently
as every day) as the Trustees may determine. Such dividends,
distributions or accruals shall be payable in cash, property or Shares
as the Trustees may determine and at such intervals as the Trustees may
determine at any time in advance of such payment or
<PAGE>
accrual, whether or not the amount of such dividend, distribution or
accrual can at the time of declaration be determined or must be
calculated subsequent to declaration and prior to payment or accrual by
reference to amounts or other factors not yet determined at the time of
declaration (including but not limited to the amount of a dividend or
distribution to be determined by reference to what is sufficient to
enable the Trust to qualify as a regulated investment company under the
Code or to avoid liability for Federal income or excise taxes).
The power granted by this Subsection (e) shall
include, without limitation, and if otherwise lawful, the power (A) to
declare dividends or distributions or to accrue income to the account
of Shareholders by means of a formula or other similar method of
determination whether or not the amount of such dividend or
distribution can be calculated at the time of such declaration; (B) to
establish record or payment dates for, dividends or distributions on
any basis, including the power to establish a number of record or
payment dates subsequent to the declaration of any dividend or
distribution; (C) to establish the same payment date for any number of
dividends or distributions declared prior to such date; (D) to provide
for payment of dividends or distributions declared and as yet unpaid,
or unpaid accrued income, to shareholders redeeming Shares prior to the
payment date otherwise applicable; and (E) to provide in advance for
conditions under which any dividend or distribution may be payable in
Shares to all or less than all of the Shareholders.
<PAGE>
f. To acquire (by purchase, lease or otherwise) and to hold,
use, maintain, develop and dispose of (by sale, lease or otherwise) any
property, real or personal, and any interest therein.
g. To borrow money, and in this connection to issue notes or
other evidences of indebtedness; to secure borrowings by mortgaging,
pledging or otherwise subjecting to security interests the Trust
Property; and to lend Trust Property.
h. To aid by further investment any Person, if any obligation
of or interest in such Person is included in the Trust Property or if
the Trustees have any direct or indirect interest in the affairs of
such Person; to do anything designed to preserve, protect, improve or
enhance the value of such obligation or interest; and to endorse or
guarantee or become surety on any or all of the contracts, stocks,
bonds, notes, debentures and other obligations of any such Person; and
to mortgage the Trust Property or any part thereof to secure any of or
all such obligations.
i. To enter into joint ventures, general or limited
partnerships and any other combinations or associations.
j. To purchase and pay for entirely out of Trust Property
liability, casualty, property and other insurance, including, without
limitation, insurance policies insuring the Shareholders, Trustees,
officers, employees and agents of the Trust, the Investment Adviser,
the Distributor and dealers or independent contractors of the Trust
against all claims and liabilities of every nature arising by
<PAGE>
reason of holding or having held any such position or by reason of any
action taken or omitted by any such Person in such capacity, whether or
not constituting negligence, to the extent the Trust would have the
power, under provisions of applicable law, to indemnify such Person
against such liability; provided, however that such policy or policies
shall be purchased solely at the cost of the Series to which it or they
pertain.
k. To establish and carry out pension, profit-sharing, share
purchase, share bonus, savings, thrift and other retirement, incentive
and benefit plans for any Trustees, officers, employees or agents of
the Trust.
l. To the extent permitted by law and determined by the
Trustees, to indemnify any Person with whom the Trust has dealings,
including, without limitation, the Shareholders, the Trustees, the
officers, employees and agents of the Trust, the Investment Adviser,
the Distributor, the transfer agent, the custodian and dealers.
m. To incur and pay any charges, taxes and expenses which in
the opinion of the Trustees are necessary or incidental to or proper
for carrying out any of the purposes of this Trust, and to pay from the
funds of the Trust Property to themselves as Trustees reasonable
compensation and reimbursement for expenses.
n. To prosecute or abandon and to compromise, arbitrate or
otherwise adjust claims in favor of or against the Trust or any matter
in controversy, including but not limited to claims for taxes.
<PAGE>
o. To exercise the right to consent, and to enter into
releases, agreements and other instruments, including, but not limited
to, the right to consent or participate in any plan for the
reorganization, consolidation or merger of any corporation or issuer
any security of which is or was held by the Trust; to consent to any
contract, lease, mortgage, purchase or sale of such property by said
corporation or issuer, and to pay calls or subscriptions with respect
to securities held by the Trust.
p. To employ or contract with such Persons as the Trustees may
deem desirable for the transaction of the business of the Trust.
q. To adopt a seal for the Trust, but the absence of such seal
shall not impair the validity of any instrument executed on behalf of
the Trust.
r. To employ one or more custodians of the assets of the Trust
and authorize such custodians to employ subcustodians and to deposit
all or any part of such assets in a system or systems for the central
handling of securities.
s. To take such actions as are authorized, incidental or
required to be taken by the Trustees pursuant to other provisions of
this Declaration.
The foregoing enumeration of specific powers shall not be held
to limit or restrict in any manner the general powers of the Trustees.
The Trustees shall not be limited by any law now or hereafter
in effect limiting the investments which may be made or retained by fiduciaries,
but they shall have full power and authority to make any and all investments
within the limitation of this
<PAGE>
Declaration that they, in their sole and absolute discretion, shall determine,
and without liability for loss even though such investments do not or may not
produce income or are of a character or in an amount not considered proper for
the investment of trust funds.
Section 2.2. LEGAL TITLE. Legal title to all the Trust
Property shall be vested in the Trust as a separate legal entity under the
Delaware Act, provided that the Trustees shall have power to cause legal title
to any Trust Property to be held by or in the name of one or more of the
Trustees with suitable reference to their trustee status, or in the name of any
Series of the Trust, or in a form not indicating any trust, whether in bearer,
unregistered or other negotiable form, or in the name of a custodian or
subcustodian or a nominee or nominees or otherwise.
Section 2.3. NUMBER OF TRUSTEES; TERM OF OFFICE. The number of
Trustees shall be two, which number may be increased or decreased from time to
time by written instrument signed by a majority of the Trustees, provided that
the number of Trustees shall not be fewer than two nor more than 15. Each of the
two Trustees executing this Declaration of Trust and each Trustee thereafter
appointed or elected (whenever such election occurs) shall hold office until his
successor is elected and qualified or until the earlier occurrence of any of the
events specified in the first sentence of Section 2.6 hereof.
Section 2.4. ELECTION OF TRUSTEES. Trustees may succeed themselves in office.
Trustees may be elected at a Shareholders' meeting. At such a Shareholders'
meeting, Trustees shall be elected by a plurality of the votes validly cast. The
election of
<PAGE>
any Trustee (other than an individual who was serving as a Trustee immediately
prior thereto) shall not become effective, however, until the individual named
shall have accepted in writing such election and agreed in writing to be bound
by the terms of this Declaration. Trustees need not own Shares.
Section 2.5. RESIGNATION AND REMOVAL. Any Trustee may resign
his trust (without need for prior or subsequent accounting) by an instrument in
writing signed by him and delivered to the Chairman of the Board, or the
Secretary or any Assistant Secretary, and such resignation shall be effective
upon such delivery, or at any later date specified in the instrument. Any of the
Trustees may be removed (i) with cause by the affirmative vote of two-thirds of
the remaining Trustees (provided that the aggregate number of Trustees after
such removal shall not be less than two) or (ii) by the Shareholders pursuant to
Section 5.16 hereof.
Section 2.6. VACANCIES. The term of office of a Trustee shall
terminate and a vacancy shall occur in the event of the death, retirement,
resignation or removal (whether pursuant to Section 2.5 hereof or otherwise),
bankruptcy, adjudication of incompetence or other incapacity to perform the
duties of the office of a Trustee. A vacancy shall also occur upon an increase
in the number of Trustees in accordance with Section 2.3 hereof. No vacancy
shall operate to annul this Declaration or to revoke any existing agency created
pursuant to the terms of the Declaration. In the case of an existing vacancy,
including a vacancy existing by reason of an increase in the authorized number
of Trustees, the remaining Trustees shall fill such vacancy by the appointment
of such
<PAGE>
individual as they in their sole and absolute discretion shall see fit, made by
a written instrument signed by a majority of the Trustees then in office,
provided that such power of appointment shall be subject to and limited by all
applicable provisions of the 1940 Act and no such appointment shall become
effective until the person named shall have accepted in writing such appointment
and agreed in writing to be bound by the terms of this Declaration. Whenever a
vacancy in the number of Trustees shall occur, until such vacancy is filled as
provided in Section 2.4 or this Section 2.6, the Trustees in office, regardless
of their number, shall have all the powers granted to the Trustees and shall
discharge all the duties imposed upon the Trustees by the Declaration.
Section 2.7. COMMITTEES; DELEGATION. The Trustees shall have
the power to appoint from their own number, and terminate, any one or more
committees consisting of two or more Trustees, including an executive committee
which may exercise some or all of the power and authority of the Trustees as the
Trustees may determine (including but not limited to the power to determine net
asset value and net income), subject to any limitations contained in the
By-Laws, and in general to delegate from time to time to one or more of their
number or to officers, employees or agents of the Trust such power and authority
and the doing of such things and the execution of such instruments, either in
the name of the Trust or the names of the Trustees or otherwise, as the Trustees
may deem expedient, provided that no committee shall have the power
(a) to change the principal office of the Trust;
(b) to amend the By-Laws;
<PAGE>
(c) to issue Shares of any Series;
(d) to elect or remove from office any Trustee or the Chairman
of the Board, the President, the Chief Financial Officer, the Treasurer or the
Secretary of the Trust;
(e) to increase or decrease the number of Trustees;
(f) to declare afdividend or other distribution on the Shares of any Series;
(g) to authorize the repurchase of Shares of any Series
or
(h) to authorize any merger, consolidation or sale, lease or exchange of all or
substantially all of the Trust Property.
Section 2.8. QUORUM; Voting. At all meetings of the Trustees,
the presence of one-third of the total number of Trustees authorized, but not
less than two, shall constitute a quorum for the transaction of business. When a
quorum is present at any meeting, a majority of Trustees present may take any
action, except when a larger vote is required by this Declaration, the By-laws
or the 1940 Act.
Section 2.9. ACTION WITHOUT A MEETING; PARTICIPATION BY
CONFERENCE TELEPHONE. Unless the 1940 Act requires that a particular action must
be taken only at a meeting of Trustees, any action required or permitted to be
taken at any meeting of the Trustees (or of any committee of the Trustees) may
be taken without a meeting if written consents thereto are signed by a majority
of the Trustees then in office (or by a majority of the members of such
committee) and such written consents are filed with the records
<PAGE>
of the meetings. Unless the 1940 Act requires that Trustees must be present in
person at a meeting of Trustees, Trustees may participate in a meeting of the
Trustees (or of any committee of the Trustees) by means of a conference
telephone or similar communications equipment if all individuals participating
can hear each other at the same time. Participation in a meeting by these means
shall constitute presence at the meeting.
Section 2.10. BY-LAWS. The Trustees may adopt By-Laws not inconsistent with this
Declaration or law to provide for the conduct of the business of the Trust, and
may amend or repeal such By-Laws.
Section 2.11. NO BOND REQUIRED. No Trustee shall be obliged to give any bond or
other security for the performance of any of his duties hereunder.
Section 2.12. RELIANCE ON EXPERTS, ETC. Each Trustee, officer,
agent and employee of the Trust or any Series thereof shall, in the performance
of his duties, be fully and completely justified and protected by relying in
good faith upon the books of account or other records of the Trust, or upon
reports made to the Trustees (a) by any of the officers or employees of the
Trust or any Series thereof, (b) by the Investment Adviser, the Distributor, the
custodian or the transfer agent, or (c) by any accountants, selected dealers or
appraisers or other agents, experts or consultants selected with reasonable care
by the Trustees, regardless of whether such agent, expert or consultant may also
be a Trustee. The Trustees, officers, agents and employees of the Trust or any
Series thereof may take advice of counsel with respect to the meaning and
operation of this Declaration
<PAGE>
and with respect to other legal matters or questions, and shall be under no
liability for any act or omission in accordance with such advice or for failing
to follow such advice.
Section 2.13. STANDARD OF CARE OF TRUSTEES. The exercise by
the Trustees of their powers and discretion hereunder and the construction in
good faith by the Trustees of the meaning or effect of any provision of this
Declaration shall be binding upon everyone interested. A Trustee, officer, agent
or employee shall be liable to the Trust or the Shareholders for his own willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office, and for nothing else, and shall not be
liable for errors of judgment or mistakes of fact or law.
ARTICLE III
CONTRACTS
Section 3.1. DISTRIBUTION CONTRACT. The Trust may from time to
time enter into a distribution contract with another Person (the "Distributor")
providing for the sale of Shares, pursuant to which the Trust may agree to sell
Shares of one or more Series or classes of Series to the Distributor or appoint
the Distributor its sales agent for the Shares. Such contract may provide that
the Distributor may enter into contracts with other persons to sell the Shares
on behalf of the Distributor and the Trust. Such contract may also provide for
the repurchase of Shares by the Distributor as agent of the Trust and shall
contain such terms and conditions, if any, as may be prescribed in the By-Laws
and such further terms and conditions not inconsistent with the provisions of
this Article III or of the By-Laws as the Trustees may in their discretion
determine.
<PAGE>
Section 3.2. ADVISORY OR MANAGEMENT CONTRACTS. Subject to
approval by a Majority Shareholder Vote or, where appropriate pursuant to
Section 5.11 hereof, a Series Majority Shareholder Vote, the Trust may from time
to time enter into investment advisory or management contracts with one or more
other Persons (the "Investment Advisers") pursuant to which the Investment
Adviser or Advisers shall agree to furnish to the Trust management, investment
advisory, statistical and research facilities or other services with respect to
one or more Series of the Trust. Such contract shall contain such other terms
and conditions, if any, as may be prescribed in the By-Laws and such further
terms and conditions not inconsistent with the provisions of this Article III,
the By-Laws or applicable law as the Trustees may in their discretion determine,
including the grant of authority to the Investment Adviser to determine what
securities shall be purchased or sold by each such Series and what portion of
its assets shall be uninvested and to implement such determinations by making
changes in the Series' investments.
Section 3.3. AFFILIATIONS OF TRUSTEES OR OFFICERS, ETC. The
fact that any Shareholder, Trustee, officer, agent or employee of the Trust or
any Series thereof is a shareholder, member, director, officer, partner,
trustee, employee, manager, adviser or distributor of or for any Person or of or
for any parent or affiliate of any Person with which an investment advisory or
management contract, principal underwriter or distributor contract or custodian,
transfer agent, disbursing agent or similar agency contract may have been or may
hereafter be made, or that any such Person, or any parent or affiliate thereof,
is a Shareholder of or has any other interest in the Trust or any Series
thereof, or that any
<PAGE>
such Person also has any one or more similar contracts with one or more other
such Persons, or has other businesses or interests, shall not affect the
validity of any such contract made or that may hereafter be made with the Trust
or disqualify any Shareholder, Trustee, officer, agent or employee of the Trust
or any Series thereof from voting upon or executing the same or create any
liability or accountability to the Trustees, the Trust, any Series thereof or
the Shareholders.
ARTICLE IV
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 4.1. NO PERSONAL LIABILITY OF SHAREHOLDERS, TRUSTEES, ETC. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust or any Series thereof. No Trustee shall have any power to bind personally
any Shareholder or to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at any
time personally agree to pay by way of subscription for any Shares or otherwise.
All Persons extending credit to, contracting with or having any claim against
the Trust or any Series thereof shall look only to the assets of the Trust or of
any affected Series for payment under such credit, contract or claim, and
neither the Shareholders nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally liable
therefor. No Trustee shall be subject to any personal liability whatsoever to
any person other than the Trust or the Shareholders in connection with the Trust
Property or the acts, obligations or affairs
<PAGE>
of the Trust or any Series thereof. The Trustees shall not be responsible or
liable to the Trust or the Shareholders for any neglect or wrongdoing of any
officer, employee or agent (including, without limitation, the Investment
Advisers, the Distributor, the custodian and the transfer agent) of the Trust or
any Series thereof, nor shall any Trustee be responsible or liable for the act
or omission of any other Trustee.
Section 4.2. EXECUTION OF DOCUMENTS; NOTICE; APPARENT
AUTHORITY. Every note, bond, contract, instrument, certificate or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or any Series thereof or the Trustees or any of them in connection with
the Trust or any Series thereof shall be conclusively deemed to have been
executed or done only in or with respect to their or his or her capacity as
Trustees or Trustee, and such Trustees or Trustee shall not be personally liable
thereon. Every note, bond, contract, instrument, certificate or undertaking made
or issued by the Trustees or by any officers or officer shall recite that the
obligations of such instruments are not binding upon any of the Trustees,
Shareholders, officers, employees or agents of the Trust individually but are
binding only upon the assets and property of the Trust or of one or more Series,
but the omission thereof shall not operate to bind any Trustees, Shareholders or
officers, employees and agents of the Trust individually. No purchaser, lender,
transfer agent or other Person dealing with the Trustees or any officer,
employee or agent of the Trust shall be bound to make any inquiry concerning the
validity of any transaction purporting to be made by the Trustees or by such
officer, employee or agent or make inquiry concerning or be liable for the
application of
<PAGE>
money or property paid, loaned or delivered to or on the order of the Trustees
or of such officer, employee or agent.
Section 4.3. INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. The
Trust shall indemnify each of its Trustees, officers, employees and agents
(including any individual who serves at its request as director, officer,
partner, trustee or the like of another organization in which it has any
interest as a shareholder, creditor or otherwise) against all liabilities and
expenses, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and counsel fees reasonably
incurred by him or her in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal, before any court or
administrative or legislative body in which he or she may be or may have been
involved as a party or otherwise or with which he or she may be or may have been
threatened, while acting as Trustee or as an officer, employee or agent of the
Trust or the Trustees, as the case may be, or thereafter, by reason of his or
her being or having been such a Trustee, officer, employee or agent, except with
respect to any matter as to which he or she shall have been adjudicated not to
have acted in good faith in the reasonable belief that his or her action was in
the best interests of the Trust or any Series thereof. Notwithstanding anything
herein to the contrary, if any matter which is the subject of indemnification
hereunder relates only to one Series (or to more than one but not all of the
Series of the Trust), then the indemnity shall be paid only out of the assets of
the affected Series. No individual shall be indemnified hereunder against any
liability to the Trust or any Series thereof or the
<PAGE>
Shareholders by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office.
In addition, no such indemnity shall be provided with respect to any matter
disposed of by settlement or a compromise payment by such Trustee, officer,
employee or agent, pursuant to a consent decree or otherwise, either for said
payment or for any other expenses unless there has been a determination that
such compromise is in the best interests of the Trust or, if appropriate, of any
affected Series thereof and that such Person appears to have acted in good faith
in the reasonable belief that his or her action was in the best interests of the
Trust or, if appropriate, of any affected Series thereof, and did not engage in
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her office. All determinations that the
applicable standards of conduct have been met for indemnification hereunder
shall be made by (a) a majority vote of a quorum consisting of disinterested
Trustees who are not parties to the proceeding relating to indemnification, or
(b) if such a quorum is not obtainable or, even if obtainable, if a majority
vote of such quorum so directs, by independent legal counsel in a written
opinion, or (c) a vote of Shareholders (excluding Shares owned of record or
beneficially by such individual) . In addition, unless a matter is disposed of
with a court determination (i) on the merits that such Trustee, officer,
employee or agent was not liable or (ii) that such Person was not guilty of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her office, no indemnification shall be
provided hereunder unless there has been a determination by independent legal
<PAGE>
counsel in a written opinion that such Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.
The Trustees may make advance payments out of the assets of
the Trust or, if appropriate, of the affected Series in connection with the
expense of defending any action with respect to which indemnification might be
sought under this Section 4.3. The indemnified Trustee, officer, employee or
agent shall give a written undertaking to reimburse the Trust or the Series in
the event it is subsequently determined that he or she is not entitled to such
indemnification and (a) the indemnified Trustee, officer, employee or agent
shall provide security for his or her undertaking, (b) the Trust shall be
insured against losses arising by reason of lawful advances, or (c) a majority
of a quorum of disinterested Trustees or an independent legal counsel in a
written opinion shall determine, based on a review of readily available facts
(as opposed to a full trial-type inquiry), that there is reason to believe that
the indemnitee ultimately will be found entitled to indemnification. The rights
accruing to any Trustee, officer, employee or agent under these provisions shall
not exclude any other right to which he or she may be lawfully entitled and
shall inure to the benefit of his or her heirs, executors, administrators or
other legal representatives.
Section 4.4. INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or former
Shareholder shall be held to be personally liable solely by reason of his or her
being or having been a Shareholder and not because of acts or omissions or for
some other
<PAGE>
reason, the Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled out of
the assets of the Trust or, if there are two or more Series of the Trust, the
assets of the affected Series of which such Shareholder held Shares, to be held
harmless from and indemnified against all loss and expense, including legal
expenses reasonably incurred, arising from such liability. The rights accruing
to a Shareholder under this Section 4.4 shall not exclude any other right to
which such Shareholder may be lawfully entitled, nor shall anything contained
herein restrict the right of the Trust or any Series thereof to indemnify or
reimburse a Shareholder in any appropriate situation even though not
specifically provided herein.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
Section 5.1. BENEFICIAL INTEREST. The interest of the
beneficiaries hereunder shall be divided into transferable shares of beneficial
interest ("Shares") , without par value. The Trustees may from time to time
divide or combine the Shares into a greater or lesser number without thereby
changing the proportionate beneficial interests in the Trust. The number of
Shares authorized hereunder is unlimited. All Shares issued hereunder, including
without limitation Shares issued in connection with a dividend in Shares or a
split in Shares, shall be fully paid and nonassessable. No Shares shall have any
approval, conversion or preemptive rights. The Trustees shall have full power
and authority, without Shareholder approval, to establish or change from time to
time the par
<PAGE>
value of Shares as the Trustees shall determine, provided the rights of
outstanding Shares shall not thereby be impaired in any material way. The
Trustees may hold as treasury Shares (of the same or some other Series), reissue
for such consideration and on such terms as they may determine, or cancel any
Shares of any series repurchased or redeemed by the Trust at their discretion
from time to time.
Section 5.2. SERIES DESIGNATION. Subject to the designation of additional Series
pursuant to Section 5.3, the Shares shall constitute one Series, the Lord Abbett
U. S. Government Securities Trust.
Section 5.3. ADDITIONAL SERIES; CLASSES. The Trustees may,
without Shareholder approval, from time to time authorize additional Series with
separate investment objectives and policies and distinct investment purposes and
one or more separate classes of any Series. The Trustees shall have full power
and authority, in their sole discretion, and without obtaining any prior
authorization or vote of the Shareholders of any Series of the Trust, to
establish and designate and to change in any manner any such Series, or any
classes thereof, to fix such preferences, voting powers, rights and privileges
of such Series, or classes thereof, as the Trustees may from time to time
determine, to classify or reclassify any issued Shares of any Series, or classes
thereof, into one or more Series or classes, and to take such other action with
respect to the Shares as the Trustees may deem desirable. The establishment and
designation of any Series additional to the initial Series of Shares or the
establishment and designation of any class of a Series additional to the initial
class shall be effective upon the execution by a majority of the
<PAGE>
Trustees of an instrument setting forth the establishment and designation of
such Series or classes thereof (which instrument shall have the status of an
amendment to this Declaration). All Shares of any Series or any classes thereof
shall have equal voting, distribution, redemption, liquidation and other rights
and shall be entitled to a preference over Shares of other Series or any classes
thereof with respect to the assets of or allocated (pursuant to subsection
5.4.1) to such Series or any classes thereof. Notwithstanding the foregoing, the
Trustees may establish variations between different Series, and classes of any
Series, as to purchase price, determination of net asset value, the price, terms
and manner of redemption and special and relative rights as to dividends on
liquidation, conditions under which the several Series (and classes of any
Series) shall have separate voting rights and such other matters as the Trustees
may determine. The number of Shares of each Series and each class that may be
issued shall be unlimited.
Section 5.4. SERIES ASSETS, LIABILITIES AND EXPENSES.
Section 5.4.1. SERIES ASSETS. All consideration received by the Trust for the
issue or sale of Shares of a particular Series, together with all assets in
which such consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof, including any proceeds derived from the sale,
loan, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors, and shall be so recorded upon the books of account of the Trust.
In the event that there are any assets, income, earnings, profits, and proceeds
thereof,
<PAGE>
funds, or payments which are not readily identifiable as belonging to any
particular Series, the Trustees shall allocate them among any one or more of the
Series established and designated from time to time in such manner and on such
basis as they, in their sole discretion, deem fair and equitable. Each such
allocation by the Trustees shall be conclusive and binding upon the Shareholders
of all Series for all purposes.
Section 5.4.2. SERIES LIABILITIES AND EXPENSES. The assets
belonging to each particular Series shall be charged with the liabilities of the
Trust in respect of that Series and all expenses, costs, charges and reserves
attributable to that Series, and any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily identifiable as belonging
to any particular Series shall be allocated and charged by the Trustees to and
among any one or more of the Series in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. Each such allocation
by the Trustees shall be conclusive and binding upon the Shareholders of all
Series for all purposes. Without limitation of the foregoing, the liabilities
existing with respect to a particular Series shall be enforceable against the
assets of such Series only and not against the assets of the Trust generally.
Any person extending credit to, contracting with or otherwise having any claim
against any Series may look only to the assets of that Series to satisfy any
such obligation or claim. No Shareholder or former Shareholder of any Series
shall have any claim on or any right to any assets allocated to or belonging to
any other Series. Notice of this limitation on Series liabilities may, in the
Trustees' sole discretion, be set forth in the certificate of trust of the Trust
(whether originally or by
<PAGE>
amendment) as filed or to be filed in the Office of the Secretary of State of
the State of Delaware pursuant to the Delaware Act, and upon the giving of such
notice in the certificate of trust, the statutory provisions of Section 3804 of
the Delaware Act relating to limitations on Series liabilities (and the
statutory effect under Section 3804 of setting forth such notice in the
certificate of trust) shall become applicable to the Trust and each Series.
Section 5.4.3. TERMINATION OF A SERIES. Any Series may be
terminated by the affirmative vote of at least two-thirds of the Shares of such
Series outstanding or, when authorized by a Series Majority Shareholder Vote, by
an instrument in writing signed by a majority of the Trustees. Upon the
termination of a Series, the Series shall carry on no business except for the
purpose of winding up its affairs, and the Trustees shall proceed to wind up the
affairs of the Series, having with respect to such Series all powers
contemplated by Section 8.1 of this Declaration in the event of the termination
of the Trust.
At any time that there are no Shares outstanding of any
particular Series previously established, the Trustees may, by an instrument
executed by a majority of their number, abolish the Series.
Section 5.5. RIGHTS OF SHAREHOLDERS. Shares shall be deemed to be personal
property giving only the rights provided in this Declaration. Every Shareholder
by virtue of having become a Shareholder shall be held to have expressly
assented and agreed to the terms hereof and to have become a party hereto. The
right to conduct any
<PAGE>
business hereinbefore described are vested exclusively in the Trustees, and the
Shareholders shall have no interest therein other than the beneficial interest
conferred by their Shares, and they shall have no right to call for any
partition or division of any property, profits, rights or interests of the Trust
or any Series thereof nor can they be called upon to share or assume any losses
of the Trust or any Series thereof or suffer an assessment of any kind by virtue
of their ownership of Shares. The death of a Shareholder during the continuance
of the Trust shall not operate to terminate the Trust or any Series thereof nor
to entitle the legal representative of such shareholder to an accounting or to
take any action in any court or otherwise against other Shareholders or the
Trustees or the Trust Property, but only to the rights of such Shareholder
hereunder. The Shares shall not entitle the holder to preference, preemptive,
appraisal, conversion or exchange rights.
Section 5.6. TRUST ONLY. The Trust shall be a Delaware
business trust organized under the Delaware Act. It is the intention of the
Trustees to create only the relationship of Trustee and beneficiary between the
Trustees and each Shareholder from time to time. It is not the intention of the
Trustees to create a general partnership, limited partnership, joint stock
association, corporation, bailment or any form of legal relationship other than
a trust. Nothing in this Declaration shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or members of
a joint stock association.
<PAGE>
Section 5.7. ISSUANCE OF SHARES.
Section 5.7.1. GENERAL. The Trustees may from time to time
without vote of the Shareholders issue and sell or cause to be issued and sold
Shares of any Series, except that only Shares previously contracted to be sold
may be issued during any period when the right of redemption is suspended
pursuant to the provisions of Section 6.6 hereof. All such Shares, when issued
in accordance with the terms of this Section 5.7, shall be fully paid and
nonassessable.
Section 5.7.2. PRICE. No Shares of any Series shall be issued
or sold by the Trustees for less than an amount which would result in proceeds
to the Trust, before taxes and other expenses payable by the Trust in connection
with such transaction, of at least the net asset value per share of Shares of
such Series determined as set forth in Article VII hereof as of the time
specified in the prospectus of the Trust at the time in effect.
Section 5.7.3. ON MERGER OR CONSOLIDATION. In connection with
the acquisition of assets (including the acquisition of assets subject to, and
in connection with the assumption of, liabilities), businesses or stock of
another Person, the Trustees may issue or cause to be issued Shares of any
Series and accept in payment therefor, in lieu of cash, such assets or
businesses at their market value (as determined by the Trustees) or such stock
at the market value (as determined by the Trustees) of the assets held by such
other Person, either with or without adjustment for contingent costs or
liabilities, provided
<PAGE>
that the funds of the Trust are permitted by law to be invested in such assets,
businesses or stock.
Section 5.7.4. FRACTIONAL SHARES. The Trustees may issue and
sell fractions of Shares of any Series, to three decimal places, having pro rata
all the rights of full Shares of such Series, including, without limitation, the
right to vote and to receive dividends and distributions.
Section 5.8. REGISTER OF SHARES. A register shall be kept at
the principal office of the Trust or an office of the transfer agent of the
Trust which shall contain the names and addresses of the Shareholders of each
Series, the number of Shares of each such Series held by them respectively, a
record of all transfers thereof and any other information required by the Code,
United States Treasury Regulations or any other taxing authority with respect to
regulated investment companies. Such register shall be conclusive as to who are
the holders of the Shares and who shall be entitled to receive dividends or
distributions or otherwise to exercise or enjoy the rights of Shareholders of
each Series. No Shareholder shall be entitled to receive payment of any dividend
or distribution, nor to have notice given to him as herein or in the By-Laws
provided, until he has given his address to the transfer agent or such other
officer or agent of the Trust as shall keep the said register for entry thereon.
Section 5.9. SHARE CERTIFICATES. No certificates certifying ownership of Shares
shall be issued except as the Trustees may otherwise determine from time to
time.
<PAGE>
Section 5.10. TRANSFER OF SHARES. Shares of any Series shall
be transferable on the records of the Trust upon delivery to the Trust or its
transfer agent or agents of appropriate evidence of assignment, transfer,
succession or authority to transfer accompanied by any certificate or
certificates representing such Shares previously issued to the transferor. Upon
such delivery the transfer shall be recorded on the register of the appropriate
Series. Until such record is made, the Trustees, the transfer agent, and the
officers, employees and agents of the Trust or any Series shall not be entitled
or required to treat the assignee or transferee of any Share as the absolute
owner thereof for any purpose, and accordingly shall not be bound to recognize
any legal, equitable or other claim or interest in such Share on the part of any
Person, other than the holder of record, whether or not any of them shall have
express or other notice of such claim or interest.
Section 5.11. VOTING POWERS. The Shareholders shall have power
to vote only: (a) for the election of Trustees as provided in Section 2.4
hereof; (b) with respect to any investment advisory or management contract
entered into pursuant to Section 3.2 hereof; (c) with respect to the removal of
Trustees pursuant to Section 5.14 hereof; (d) with respect to any termination of
the Trust, as provided in Section 8.1 hereof; (e) with respect to any amendment
of this Declaration to the extent and as provided in Section 8.2 hereof; and (f)
with respect to such additional matters relating to the Trust as may be required
by this Declaration or the By-Laws or by reason of the registration of the Trust
or the Shares with the Commission or any State or by any applicable law or any
regulation or order of the Commission or any State or as the Trustees may
consider necessary or
<PAGE>
desirable. On any matter submitted to a vote of Shareholders, all Shares issued
and outstanding shall, subject to applicable law, be voted as a single class in
the aggregate and not by Series, except with respect to: (i) any matter
determined by the Trustees to affect the Shareholders of any particular Series
in a material respect different from the Shareholders of other Series; and (ii)
such matters as may be otherwise required by this Declaration or by the By-Laws
or by reason of the registration of the Trust or the Shares of such Series with
the Commission or any State or by any applicable law (including the 1940 Act) or
any regulation or order of the Commission or any State or as the Trustees may
consider necessary or desirable. With respect to such matters, the Shareholders
of each affected Series shall have the power to vote as a separate Series or as
a class of separate Series, as determined by the Trustees, and, if so determined
by the Trustees, the other shareholders shall not be entitled to vote. Each
whole Share shall be entitled to one vote as to any matter on which Shareholders
are entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy. Until Shares
are issued, the Trustees may exercise all rights of Shareholders (including,
without limitation, the right to amend this Declaration) and may take any action
required by law, the By-Laws or this Declaration to be taken by Shareholders.
The By-Laws may include further provisions for Shareholders' votes and related
matters.
<PAGE>
Section 5.12. MEETINGS OF SHAREHOLDERS. Meetings of the
Shareholders may be called at any time by the Chairman of the Board, the
President or any Vice President of the Trust, or by a majority of the Trustees
for the purpose of taking action upon any matter requiring the vote or authority
of the Shareholders as herein provided or upon any other matters deemed to be
necessary or desirable. Without limiting the provisions of Section 5.14 hereof,
a special meeting of Shareholders may also be called at any time upon the
written request of a holder or the holders of not less than 25% of all of the
Shares entitled to be voted at such meeting, provided that the Shareholder or
Shareholders requesting such meeting shall have paid to the Trust the reasonably
estimated cost of preparing and mailing the notice thereof, which the Secretary
shall determine and specify to such Shareholder or Shareholders.
Section 5.13. ACTION WITHOUT A MEETING. Any action which may
be taken by Shareholders may be taken without a meeting if such proportion of
Shareholders as is required to vote for approval of the matter by law, this
Declaration or the By-Laws consents to the action in writing and the written
consents are filed with the records of Shareholders' meetings. Such consents
shall be treated for all purposes as a vote taken at a Shareholders' meeting.
Section 5.14. QUORUM AND REQUIRED VOTE. One-third (33 1/3%) of
the outstanding Shares shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or this
Declaration permits or requires that holders of any series or class shall vote
as a series or class, then one-third percent (33
<PAGE>
1/3%) of the aggregate number of Shares of that series or class entitled to vote
shall be necessary to constitute a quorum for the transaction of business by
that series or class. Any lesser number, however, shall be sufficient for
adjournment and any adjourned session or sessions may be held within 90 days
after the date set for the original meeting without the necessity of further
notice. Except when a larger vote is required by any provision of this
Declaration of Trust or the By-Laws of the Trust and subject to any applicable
requirements of law, a majority of the Shares voted shall decide any question,
provided that where any provision of law or of this Declaration of Trust permits
or requires that the holders of any series or class shall vote as a series or
class, then a majority of the Shares of that series or class voted on the matter
shall decide that matter insofar as that series or class is concerned.
Section 5.15. ADDITIONAL PROVISIONS. The By-Laws may include further provisions
for Shareholders I votes and meetings and related matters.
Section 5.16. REMOVAL OF TRUSTEES BY SHAREHOLDERS. No Trustee
shall serve as trustee of the Trust after the holders of record of not less than
two-thirds of the outstanding Shares of the Trust have declared that such
Trustee be removed from office either by a declaration in writing filed with the
Secretary of the Trust or by votes cast in person or by proxy at a meeting
called for such purpose. Notwithstanding the provisions of Section 5.12 hereof,
the Trustees shall comply at all times with the provisions of the 1940 Act,
including without limitation Section 16(c) thereof or any successor section,
pertaining to the removal of Trustees by Shareholders.
<PAGE>
Section 5.17. Derivative Suits. No action may be brought by a
Shareholder on behalf of the Trust or a Series unless Shareholders owning not
less than fifty percent (50%) of the then outstanding Shares of the Trust or
such Series join in the bringing of such action.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. REDEMPTION OF SHARES. The Trustees shall redeem
Shares of any Series, subject to the conditions and at the price determined in
accordance with this Declaration, upon proper application of the record holder
thereof at such office or agency as may be designated from time to time for that
purpose by the Trustees. The Trustees shall have power to determine from time to
time the form and the other accompanying documents which shall be necessary to
constitute a proper application for redemption.
Section 6.2. PRICE. Shares shall be redeemed for an amount
equal to the net asset value of such Shares next determined pursuant to Article
VII hereof after receipt of a proper application for redemption, less a charge,
if and as fixed by resolution of the Board of Trustees from time to time.
Section 6.3. PAYMENT. Payment for such Shares redeemed shall
be made to the Shareholder of record within 7 days after the date upon which
proper application is received, subject to the Trustees or their designated
agent being satisfied that the purchase price of such Shares has been collected
and to the provisions of Section 6.4 hereof. Such payment shall be made in cash
or other assets of the Trust or both, as the Trustees shall
<PAGE>
prescribe. For the purposes of such payment for Shares redeemed, the value of
assets delivered shall be determined as set forth in Article VII hereof as of
the same time as of which the per share net asset value of such Shares is
determined.
Section 6.4. EFFECT OF SUSPENSION OF RIGHT OF REDEMPTION. If,
pursuant to Section 6.6 hereof, the Trustees shall declare a suspension of the
right of redemption, the rights of Shareholders (including those who shall have
applied for redemption pursuant to Section 6.1 hereof but who shall not yet have
received payment) to have Shares redeemed and paid for by the Trust shall be
suspended until the time specified in Section 6.6. Any record holder who shall
have his redemption right so suspended may, during the period of such
suspension, by appropriate written notice of revocation at the office or agency
where application was made, revoke any application for redemption not honored.
The redemption price of Shares for which redemption applications have not been
revoked shall not exceed the net asset value of such Shares next determined as
set forth in Article VII hereof after the termination of such suspension, and
payment shall be made within 7 days after the date upon which the application
was made plus the period after such application during which the determination
of net asset value was suspended.
Section 6.5. REPURCHASE BY AGREEMENT. The Trust may repurchase
Shares directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof, or an agent designated by such
owner, at a price not exceeding the net asset value per share determined as set
forth in Article VII hereof as of the time specified in the prospectus of the
Trust at the time in effect.
<PAGE>
Section 6.6. SUSPENSION OF RIGHT OF REDEMPTION. The Trustees
may declare a suspension of the right of redemption or postpone the date of
payment or redemption as permitted by the 1940 Act and regulations and orders
from time to time in effect thereunder. Such suspension shall take effect at
such time as the Trustees shall specify, which shall not be later than the close
of business on the business day next following the declaration, and thereafter
there shall be no determination of net asset value until the Trustees shall
declare the suspension at an end, except that the suspension shall terminate in
any event on the first day on which (i) the condition giving rise to the
suspension shall have ceased to exist and (ii) no other condition exists under
which suspension is authorized under this Section 6.6. Each declaration by the
Trustees pursuant to this shall be consistent with such applicable rules and
regulations, if any, relating to the subject matter thereof as shall have been
promulgated by the Commission or any other governmental body having jurisdiction
over the Trust and as shall be in effect at the time. To the extent not
inconsistent with such rules and regulations, the determination of the Trustees
shall be conclusive.
Section 6.7. INVOLUNTARY REDEMPTION OF SHARES; DISCLOSURE OF
HOLDING. (a) If the Trustees shall, at any time and in good faith, be of the
opinion that direct or indirect ownership of Shares or other securities of the
Trust or any Series thereof has or may become concentrated in any Person to an
extent which would disqualify the Trust or any Series thereof as a regulated
investment company under the Code or would cause the
<PAGE>
Trust or any Series thereof to be treated as a personal holding company under
the Code, then the Trustees shall have the power by lot or other means deemed
equitable by them
(i) to call for redemption a number, or principal amount, of
Shares sufficient in the opinion of the Trustees to (A) maintain or
bring the direct or indirect ownership of Shares into conformity with
the requirements for such qualification or (B) avoid or to continue to
avoid the treatment of the Trust or any Series thereof as a personal
holding company under the Code, and
(ii) to refuse to transfer or issue Shares to any Person whose
acquisition of the Shares in question would in the opinion of the
Trustees result in such disqualification or treatment.
Any redemption pursuant to this Section 6.7(a) shall be
effected at a redemption price determined in accordance with Section 6.2 hereof.
(b) The holders of Shares of the Trust or any Series thereof
shall, upon request, disclose to the Trustees in writing such information with
respect to direct and indirect ownership of Shares of the Trust or any Series
thereof as the Trustees deem necessary to comply with the provisions of the
Code, United States Treasury Regulations, or with the requirements of any other
taxing authority.
(c) The Trustees shall have the power to redeem Shares of any
series in any Shareholder's account at a redemption price determined in
accordance with Section 6.2 hereof if at any time the total number of Shares of
such Series held in such account is fewer than an established minimum selected
by the Trustees, in which event the
<PAGE>
Shareholder shall be notified that the number of Shares in the account is fewer
than the minimum and shall be allowed a period, fixed by the Trustees, in which
to avoid such redemption by increasing the account to at least the established
minimum.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE; DISTRIBUTIONS
Section 7.1. BY WHOM DETERMINED. The Trustees shall have the power and
duty to determine from time to time the net asset value per share of the Shares
of each Series. They may appoint one or more Persons to assist them in the
determination of the value of securities in the portfolio of each Series and to
make the actual calculations pursuant to their directions. Any determination
made pursuant to this Article VII shall be binding on all parties concerned.
Section 7.2. WHEN DETERMINED. The net asset value shall be
determined at such times as the Trustees shall prescribe in accordance with the
applicable provisions of the 1940 Act and regulations and orders from time to
time in effect thereunder. The Trustees may suspend the daily determination of
net asset value to the extent permitted by the 1940 Act or the regulations and
orders from time to time in effect thereunder.
Section 7.3. COMPUTATION OF PER SHARE NET ASSET VALUE.
Section 7.3.1. NET ASSET VALUE PER SHARE. The net asset value of each
Share of each Series as of any particular time shall be the quotient obtained by
dividing the value of the net assets of such Series (determined in accordance
with Section 7.3.2.)
by the total number of outstanding Shares of that Series.
<PAGE>
If any Series is divided into classes, the net asset value of
Shares of each class of such Series may be otherwise determined in any manner,
to the extent permitted by applicable law, determined by the Trustees and
disclosed in a prospectus relating to such class.
Section 7.3.2. VALUE OF THE NET ASSETS OF A SERIES. The value
of the net assets of any Series as of any particular time shall be the value of
that Series' assets less its liabilities, determined and computed as follows:
(1) Assets. The assets of any Series shall be deemed to
include the following assets relating to that Series: (A) all cash on
hand or on deposit, including any interest accrued thereon, (B) all
bills and demand notes and accounts receivable, (C) all securities
owned or contracted for by the Trustees, (D) all stock and cash
dividends and cash distributions payable to but not yet received by the
Trustees (when the valuation of the underlying security is being
determined ex-dividend), (E) all interest accrued on any
interest-bearing securities owned by the Trustees (except accrued
interest included in the valuation of the underlying security) and (F)
all other property of every kind and nature, including prepaid
expenses, but not any insurance policy of the kind referred to in
Section 2.1 (1) (ii) until such time as any amount payable thereunder
becomes due and payable to the Trust.
(2) Valuation of Assets. Determination of the value of such
assets shall be made, with respect to securities for which market
quotations are readily
<PAGE>
available, at the market value of such securities; and with respect to
other securities and assets, at the fair value as determined in good
faith by the Trustees.
(3) LIABILITIES. The liabilities of any Series shall not be
deemed to include any Shares of that Series and surplus, but they shall
be deemed to include the following liabilities relating to that Series:
(A) all bills and accounts payable, (B) all administrative expenses
accrued and unpaid, (C) all contractual obligations for the payment of
money or property, including the amount of any declared but unpaid
dividends upon Shares of that Series and the amount of all income
accrued to the account of but not paid to Shareholders of that Series,
(D) all reserves established in accordance with generally accepted
accounting principles, for taxes or contingencies and (E) all other
liabilities of whatsoever kind and nature except any liabilities
represented by Shares of that Series and surplus.
The Board of Trustees is empowered, in its discretion, to establish other
methods for determining net asset value whenever such other methods are deemed
by it to be necessary or desirable, including, but without limiting the
generality of the foregoing, any method deemed necessary or desirable in order
to enable the Trust to comply with any provision of the Investment Company Act
of 1940 or any rule or regulation thereunder.
Section 7.4. INTERIM DETERMINATIONS. Any determination of net asset value other
than as of the close of trading on the New York Stock Exchange may be made
either by appraisal or by calculation or estimate. Any such calculation or
estimate shall be based on changes in the market value of representative or
selected securities or on changes in
<PAGE>
recognized market averages since the last closing appraisal and made in a manner
which in the opinion of the Trustees will fairly reflect the changes in the net
asset value.
Section 7.5. OUTSTANDING SHARES. For the purposes of this
Article VII, outstanding Shares of any Series shall mean those Shares shown from
time to time on the books of such Series or the transfer agent of the Trust as
then issued and outstanding, adjusted as follows:
(a) Shares sold shall be deemed to be outstanding Shares from
the time as of which the Trust has agreed to such sale and the sale
price in currency has been determined.
(b) Shares distributed pursuant to Section 7.6 shall be deemed
to be outstanding as of the time that Shareholders who shall receive
the distribution are determined.
(c) Shares for which a proper application for redemption has
been made or which are subject to repurchase by the Trustees shall be
deemed to be outstanding Shares up to and including the time as of
which the redemption or repurchase price is determined. After such
time, they shall be deemed to be no longer outstanding Shares and the
redemption or repurchase price until paid shall be deemed to be a
liability of the Trust.
Section 7.6. DISTRIBUTIONS TO SHAREHOLDERS. Without limiting the powers of the
Trustees under Subsection (f) of Section 2.1 of Article II hereof, the Trustees
may at any time and from time to time, as they may determine, allocate or
distribute to
<PAGE>
Shareholders of a Series such income and capital gains of the Series, accrued or
realized, as the Trustees may determine, after providing for actual, accrued or
estimated expenses and liabilities (including reserves) determined in accordance
with generally accepted accounting practices. The Trustees shall have full
discretion to determine which items shall be treated as income and which items
as capital and their determination shall be binding upon the Shareholders. Such
distributions shall be made in cash, property or Shares of the appropriate
Series or any combination thereof as determined by the Trustees. Any such
distribution paid in Shares shall be paid at the net asset value thereof as
determined pursuant to this Article VII. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash dividend payout plans or
related plans as the Trustees shall deem appropriate. Inasmuch as the
computation of net income and gains for Federal income and excise tax purposes
may vary from the computation thereof on the books of the Trust, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to allocate or distribute for any fiscal year as ordinary dividends
and as capital gains distributions, respectively, additional amounts sufficient
to enable the Trust to avoid or reduce liability for taxes after amended or
modified.
ARTICLE VIII
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
Section 8.1. DURATION AND TERMINATION. (a) Unless terminated as provided herein,
the Trust shall continue without limitation of time. The Trust may be
<PAGE>
terminated by the affirmative vote of at least 66 2/3% of the Shares outstanding
or by the Trustees. Upon the termination of the Trust,
(i) The Trust shall carry on no business except for the
purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the
Trust and all of the powers of the Trustees under this Declaration
shall continue until the affairs of the Trust shall have been wound up,
including the power to fulfill or discharge the contracts of the Trust,
collect its assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining Trust Property to
one or more persons at public or private sale for consideration which
may consist in whole or in part of cash, securities or other property
of any kind, discharge or pay its liabilities, and do all other acts
appropriate to liquidate its business, provided that any sale,
conveyance, assignment, exchange, transfer or other disposition of all
or substantially all the Trust Property that requires Shareholder
approval under Section 8.3 hereof shall receive the approval so
required.
(iii) After paying or adequately providing for the payment of
all liabilities, and upon receipt of such releases, indemnities and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust Property, in cash or in
kind or partly each, among the Shareholders according to their
respective rights.
<PAGE>
(b) After termination of the Trust and distribution to the
Shareholders as herein provided, the Trustees shall provide for the making of
all filings and applications required by law, and shall execute and lodge among
the records of the Trust an instrument in writing setting forth the fact of such
termination. Thereupon, the Trustees shall be discharged from all further
liabilities and duties hereunder, and the rights and interests of all
Shareholders shall thereupon cease.
Section 8.2. AMENDMENT PROCEDURE. (a) Except as specifically
provided herein, the Trustees may, without Shareholder vote, amend this
Declaration by an instrument in writing or an amended and restated Declaration
signed by a majority of the Trustees. Such an amendment shall be authorized by a
Majority Shareholder Vote, or subject to the provisions of Section 5.11, a
Series Majority Shareholder Vote, if it would limit the right of Shareholders to
vote under Section 5.11 or amend this Section 8.2 or if Shareholder
authorization is required by the 1940 Act. Notwithstanding anything else herein,
no amendment to this Declaration shall (i) limit the rights of indemnification
provided in Article IV hereof with respect to actions or omissions of Persons
covered thereby prior to such amendment, (ii) impair the exemption from personal
liability of the Shareholders, Trustees, officers, employees and agents of the
Trust or any Series thereof or (ii) permit assessments upon Shareholders.
(b) An instrument in writing setting forth the amendment or an
amended and restated Declaration, executed by a majority of the Trustees, shall
be conclusive evidence of such amendment when lodged among the records of the
Trust. Subject to the
<PAGE>
foregoing, any such amendment shall be effective as provided in the instrument
containing the terms of such amendment or, if there is no provision therein with
respect to effectiveness, upon the execution of such instrument by a majority of
the Trustees (or by an officer of the Trust pursuant to a vote of a majority of
the Trustees).
Section 8.3. MERGER, CONSOLIDATION AND SALE OF ASSETS.
Notwithstanding anything else contained herein, the Trustees may, without prior
Shareholder approval, cause the Trust or any successor thereto to merge or
consolidate with or into, or sell and convey all or substantially all of the
assets of the Trust or any Series to one or more trusts, partnerships,
associations or corporations so long as the surviving or resulting or transferee
entity is an open-end management investment company under the 1940 Act, or is a
series thereof, that will succeed to or assume that Trust's registration under
the Act and which is formed, organized or existing under the laws of a state,
commonwealth possession or colony of the United States. Any agreement of merger
or consolidation or certificate of merger may be signed by a majority of
Trustees. Pursuant to and in accordance with the provisions of Section 3815 (f)
of the Delaware Act, and notwithstanding anything to the contrary contained in
this Declaration, an agreement of merger or consolidation approved by the
Trustees in accordance with this Section 8.3 may effect any amendment to the
Declaration or effect the adoption of a new trust instrument of the Trust if it
is the surviving or resulting trust in the merger or consolidation.
Section 8.4. INCORPORATION. Notwithstanding anything else contained herein, the
Trustees may, without prior Shareholder approval, (i) cause to be organized
<PAGE>
or assist in organizing under the laws of any jurisdiction a corporation or
corporations or any other trust, partnership, association or other organization
to take over all or less than all of the Trust Property or to carry on any
business in which the Trust shall directly or indirectly have any interest, and
may sell, convey and transfer Trust Property to any such corporation, trust,
partnership, association or other organization in exchange for the shares or
securities thereof or otherwise, and may lend money to, subscribe for the shares
or securities of, and enter into any contracts with any such corporation, trust,
partnership, association or other organization, or any corporation, partnership,
trust, association or other organization in which the Trust holds or is about to
acquire shares or any other interest or (ii) cause the Trust to incorporate
under the laws of Delaware.
ARTICLE IX
MISCELLANEOUS
Section 9.1. REGISTERED AGENT; REGISTERED OFFICE. The
Registered Agent of the Trust within the State of Delaware for service of
process, and the Registered Office of the Trust within the State of Delaware,
shall be The Prentice-Hall Corporation System, Inc., 32 Loockerman Square, Suite
L-1000, Dover, Delaware 19901, or such other agent or place, respectively, as
the Trustees may designate from time to time by any supplement to this
Declaration of Trust.
Section 9.2. GOVERNING LAW. The Trust and this Declaration, and the rights and
obligations of the Trustees and Shareholders hereunder, are to be governed by
and construed and administered according to the Delaware Act and the laws of the
State
<PAGE>
of Delaware; provided, however, that there shall not be applicable to the Trust,
the Trustees or this Declaration (a) the provisions of Section 3540 of Title 12
of the Delaware Code or (b) any provisions of the laws (statutory or common) of
the State of Delaware (other than the Delaware Act) pertaining to trusts which
relate to or regulate (i) the filing with any court or governmental body or
agency of trustee accounts or schedules of trustee fees and charges, (ii)
affirmative requirements to post bonds for trustees, officers, agents, or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards or responsibilities or limitations
on the acts or powers of trustees, which are inconsistent with the limitations
or liabilities or authorities and powers of the Trustees set forth or referenced
in this Declaration. The Trust shall be of the type commonly called a "business
trust", and without limiting the provisions hereof, the Trust may exercise all
powers which are ordinarily exercised by such a trust under Delaware law. The
Trust specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by trusts under
the Delaware Act, and the absence of a specific reference herein to any such
power,
<PAGE>
privilege or action shall not imply that the Trust may not exercise such power
or privilege or take such actions.
Section 9.3. COUNTERPARTS. This Declaration may be
simultaneously executed in several counterparts, each of which shall be deemed
to be an original, and such counterparts, together, shall constitute one and the
same instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 9.4. RELIANCE BY THIRD PARTIES. Any certificate
executed by an officer of the Trust or a Trustee certifying to: (a) the number
or identity of Trustees or Shareholders, (b) the due authorization of the
execution of any instrument or writing, (c) the form of any vote passed at a
meeting of Trustees or Shareholders, (d) the fact that the number of Trustees or
Shareholders present at any meeting or executing any written instrument
satisfies the requirements of this Declaration, (e) the form of any By-Laws
adopted by or the identity of any officers elected by the Trustees or (f) the
existence of any fact or facts which in any manner relate to the affairs of the
Trust or any Series thereof, shall be conclusive evidence as to the matters so
certified in favor of any Person dealing with the Trustees and their successors.
Section 9.5. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
(a) The provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with requirements of the 1940 Act, would be inconsistent with any of
the conditions necessary for qualification of the Trust as a regulated
investment company under the Code or is inconsistent with other
<PAGE>
applicable laws and regulations, such provision shall be deemed never to have
constituted a part of this Declaration, provided that such determination shall
not affect any of the remaining provisions of this Declaration or render invalid
or improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
Section 9.6. USE OF NAME. The Trust is adopting its name
through permission of the firm of Lord, Abbett & Co., which is entering into a
management or advisory contract with the Trust. Such contract shall make
appropriate provisions that upon the termination of such contract for any cause,
or if such firm, or a subsidiary, affiliate or successor thereof, deems it
advisable to withdraw the right to the use of its name, the Trust will, at the
request of such firm, or of a subsidiary, affiliate or successor thereof
lawfully using the name, take such action as may be necessary to change its name
to eliminate all use of or reference to the words "Lord Abbett" in any form and
will not use the registered service mark of Lord, Abbett & Co. without the
written consent of such firm, subsidiary, affiliate or successor. The Trust
shall also agree in such contract that investment companies other than the Trust
for which such firm or a subsidiary or successor thereof may act as investment
adviser, and other companies affiliated with Lord, Abbett & Co., may be formed
with the words "Lord Abbett" in their corporate titles. Such
<PAGE>
agreements on the part of the Trust are hereby made binding upon it, its
Trustees, officers, shareholders, creditors and all other persons claiming under
or through it.
Section 9.7. SECTION HEADINGS; INTERPRETATION. Section
headings in this Declaration are for convenience of reference only, and shall
not limit or otherwise affect the meaning hereof. References in this Declaration
to "this Declaration" shall be deemed to refer to this Declaration as from time
to time amended, and all expressions such as "hereof", "herein" and "hereunder"
shall be deemed to refer to this Declaration as from time to time amended and
not exclusively to the article or section in which such words appear.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
instrument this 26th day of February, 1993.
/s/ Ronald P. Lynch
----------------------
Ronald P. Lynch
/s/ Robert S. Dow
--------------------------
Robert S. Dow
<PAGE>
STATEMENT OF NEW YORK )
)
COUNTY OF NEW YORK ) NEW YORK, NEW YORK
On February , 1993 there personally appeared before me the
above-named Ronald P. Lynch and Robert S. Dow who severally acknowledged the
foregoing instrument to be their free act and deed.
Before me
/s/ Lydia Guzman
-----------------------
Notary Public
<PAGE>
LORD ABBETT SECURITIES TRUST
Amendment to Declaration
and Agreement of Trust
dated February 26, 1993
The undersigned Board of Trustees of Lord Abbett Securities
Trust (the "Trust") do hereby establish seven new series of the Trust to be
designated the Lord Abbett Growth & Income Trust, Lord Abbett Bond-Debenture
Trust, Lord Abbett Global Income Trust, Lord Abbett National Tax-Free Income
Trust, Lord Abbett New York Tax- Free Income Trust, Lord Abbett California
Tax-Free Income Trust, and Lord Abbett Florida Tax-Free Income Trust.
/s/ Ronald P. Lynch /s/ John C. Jansing
- --------------------------------------------------------------------------
Ronald P. Lynch John C. Jansing
/s/ Robert S. Dow /s/ C. Alan MacDonald
- ---------------------------------------------------------------------------
Robert S. Dow C. Alan MacDonald
/s/ Thomas F. Creamer /s/Hansel B. Millican, Jr.
- ---------------------------------------------------------------------------
Thomas F. Creamer Hansel B. Millican, Jr.
/s/ Stewart S. Dixon /s/ Thomas J. Neff
- --------------------------------------------------------------------------
Stewart S. Dixon Thomas J. Neff
Dated: June 16, 1993
<PAGE>
LORD ABBETT SECURITIES TRUST
Amendment to Declaration
and Agreement of Trust
dated February 26, 1993
The undersigned Board of Trustees of Lord Abbett Securities
Trust (the Trust) do hereby establish a new series of the Trust to be designated
the Lord Abbett Limited Duration Government Trust.
/s/ Ronald P. Lynch /s/ John C. Jansing
- -------------------------------------------------------------------------
Ronald P. Lynch John C. Jansing
/s/ Robert S. Dow /s/ C. Alan MacDonald
- ------------------------------------------------- -------------------
Robert S. Dow C. Alan MacDonald
/s/ Thomas F. Creamer /s/ Hansel B. Millican, Jr.
- ------------------------------------------------- ------------------------
Thomas F. Creamer Hansel B. Millican, Jr
/s/ Stewart S. Dixon /s/ Thomas J. Neff
- ------------------------------------------------------------------------
Stewart S. Dixon Thomas J. Neff
Dated: August 19, 1993
<PAGE>
LORD ABBETT SECURITIES TRUST
Amendment to Declaration
and Agreement of Trust
dated February 26, 1993
The undersigned Board of Trustees of Lord Abbett Securities
Trust (the "Trust") do hereby establish a new series of the Trust to be
designated the Lord Abbett Balanced Trust.
/s/ Ronald P. Lynch /s/ John C. Jansing
--------------------------------------- ---------------------------------
Ronald P. Lynch John C. Jansing
/s/ Robert S. Dow /s/ C. Alan MacDonald
--------------------------------------- ---------------------------------
Robert S. Dow C. Alan MacDonald
/s/ E. Thayer Bigelow /s/ Hansel B. Millican, Jr.
--------------------------------------- ----------------------------------
E. Thayer Bigelow Hansel B. Millican, Jr
/s/ Stewart S. Dixon /s/ Thomas J. Neff
--------------------------------------------------------------------------
Stewart S. Dixon Thomas J. Neff
Dated: November 16, 1994
<PAGE>
LORD ABBETT SECURITIES TRUST
Amendment to Declaration of Trust
The undersigned, being at least a majority of the Trustees of
Lord Abbett Securities Trust, a Delaware business trust (the "Trust"), organized
pursuant to a Declaration of Trust dated February 26, 1993 (the "Declaration"),
do hereby establish, pursuant to Section 5.3 of the Declaration, a new class of
shares for the Series of the Trust previously designated the Lord Abbett Growth
& Income Trust, to be designated the Class A shares of such Series. The initial
class of shares of such Series shall be designated the Class C shares of such
Series. Any variations between such classes as to purchase price, determination
of net asset value, the price, terms and manner of redemption, special and
relative rights as to dividends and on liquidation, and conditions under which
such classes shall have separate voting rights, shall be as set forth in the
Declaration or as elsewhere determined by the Board of Trustees of the Trust.
This instrument shall constitute an amendment to the
Declaration.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
instrument this 19th day of June, 1996.
/s/Ronald P. Lynch
- Ronald P. Lynch
/s/ Robert S. Dow
--------------------------------------------------------------------------
- Robert S. Dow
/s/ E. Thayer Bigelow
--------------------------------------------------------------------------
- E. Thayer Bigelow
/s/ Stewart S. Dixon
-------------------------------------------------------------------------
- Stewart S. Dixon
/s/ John C. Jansing
--------------------------------------------------------------------------
- John C. Jansing
/s/ C. Alan MacDonald
---------------------------------------------------------------------------
- C. Alan MacDonald
/s/ Hansel B. Millican, Jr.
-------------------------------------------------------------------------
- Hansel B. Millican, Jr.
/s/ Thomas J. Neff
--------------------------------------------------------------------------
Thomas J. Neff
<PAGE>
State of New York )
) ss.
County of New York )
On June 19, 1996, there personally appeared before me the
above-named individuals who severally acknowledged the foregoing instrument to
be their free act and deed.
Before me
/s/ Lydia Guzman
--------------------------------------------------------
- Notary Public
- --------------------------------------------------------
<PAGE>
LORD ABBETT SECURITIES TRUST
Amendment to Declaration
and Agreement of Trust
dated February 26, 1993
The undersigned Board of Trustees of Lord Abbett Securities
Trust (the "Trust") do hereby establish a new series of the Trust to be
designated the International Series.
/s/ Robert S. Dow /s/ John C. Jansing
--------------------------------------- ------------------------------------
- Robert S. Dow John C. Jansing
--------------------------------------- -----------------------------------
/s/ E. Thayer Bigelow /s/ C. Alan MacDonald
- E. Thayer Bigelow C. Alan MacDonald
/s/ Stewart S. Dixon /s/ Hansel B. Millican, Jr.
--------------------------------------- ------------------------------------
- Stewart S. Dixon Hansel B. Millican, Jr.
/s/ Thomas J. Neff
----------------------------------------------------------------------------
Thomas J. Neff
Dated: September 12, 1996
<PAGE>
LORD ABBETT SECURITIES TRUST
Amendment to Declaration
The undersigned, being at least a majority of the Trustees of
Lord Abbett Securities Trust, a Delaware business trust (the "Trust"), organized
pursuant to a Declaration of Trust dated February 26, 1993 (the "Declaration"),
do hereby establish, pursuant to Section 5.3 of the Declaration, a new class of
shares for the Growth & Income Series, to be designated the Class B shares of
such Series and two new classes of shares for the International Series, to be
designated the Class B and Class C shares of such Series. Any variations as to
purchase price, determination of net asset value, the price, terms and manner of
redemption, special and relative rights as to dividends and on liquidation, and
conditions under which such classes shall have separate voting rights, shall be
as set forth in the Declaration or as elsewhere determined by the Board of
Trustees of the Trust.
This instrument shall constitute an amendment to the
Declaration.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
instrument this 17th day of April, 1997.
/s/ Robert S. Dow /s/ John C. Jansing
--------------------------------------- ----------------------------------
- Robert S. Dow John C. Jansing
/s/ C. Alan MacDonald /s/ Hansel B. Millican, Jr.
--------------------------------------- ----------------------------
- C. Alan MacDonald Hansel B. Millican, Jr.
/s/ E. Thayer Bigelow /s/ Thomas J. Neff
----------------------------------------------------------------------------
- E. Thayer Bigelow Thomas J. Neff
/s/ Stewart S. Dixon
- ----------------------------------------------------------------------------
Stewart S. Dixon
Dated: April 17, 1997
<PAGE>
LORD ABBETT SECURITIES TRUST
Amendment to Declaration of Trust
The undersigned, being at least a majority of the Trustees of
Lord Abbett Securities Trust, a Delaware business trust (the "Trust"), organized
pursuant to a Decla ration of Trust dated February 26, 1993 (the "Declaration"),
do hereby establish, pursuant to Section 5.3 of the Declaration, a new class of
shares for the Series of the Trust previously designated the International
Series, to be designated the Class Y shares of such Series. Any variations
between the classes of the International Series as to purchase price,
determination of net asset value, the price, terms and manner of redemption,
special and relative rights as to dividends and on liquidation, and conditions
under which such classes shall have separate voting rights, shall be as set
forth in the Declaration or as elsewhere determined by the Board of Trustees of
the Trust.
This instrument shall constitute an amendment to the
Declaration.
IN WITNESS WHEREOF, the undersigned have executed this
instrument this 15th day of October, 1997.
/s/ Robert S. Dow /s/ John C. Jansing
---------------------------------------------------------------------
Robert S. Dow --------- John C. Jansing
/s/ C. Alan MacDonald /s/ Hansel B. Millican, Jr.
----------------------------------------------------------------------
C. Alan MacDonald --------- Hansel B. Millican, Jr.
/s/ E. Thayer Bigelow /s/ Thomas J. Neff
-------------------------------------------------------------------
E. Thayer Bigelow --------- Thomas J. Neff
/s/ Stewart S. Dixon /s/ E. Wayne Nordberg
-------------------------------------------------------------------------
Stewart S. Dixon E. Wayne Nordberg
<PAGE>
LORD ABBETT SECURITIES TRUST
Amendment to Declaration of Trust
The undersigned, being at least a majority of the Trustees of
Lord Abbett Securities Trust, a Delaware business trust (the "Trust"), organized
pursuant to a Declaration of Trust dated February 26, 1993 (the "Declaration"),
do hereby establish, pursuant to Section 5.3 of the Declaration, two new series
of the Trust to be designated as (i) World Bond Debenture Series; and (ii) Alpha
Series. The initial classes of shares for the World Bond Debenture Series shall
be designated the Class A, Class B, Class C and Class Y shares. The initial
classes of shares for the Alpha Series shall be designated the Class A, Class B
and Class C shares. Any variations between such classes as to purchase price,
determination of net asset value, the price, terms and manner of redemption,
special and relative rights as to dividends and on liquidation, and conditions
under which such classes shall have separate voting rights, shall be as set
forth in the Declaration or as elsewhere determined by the Board of Trustees of
the Trust.
This instrument shall constitute an amendment to the
Declaration.
IN WITNESS WHEREOF, the undersigned have executed this
instrument this 12th day of November, 1997.
/s/ Robert S. Dow /s/ John C. Jansing
--------------------------------------------------------------------
Robert S. Dow --------- John C. Jansing
/s/ C. Alan MacDonald /s/ Hansel B. Millican, Jr.
------------------------------------------------------------------------
C. Alan MacDonald --------- Hansel B. Millican, Jr.
/s/ E. Thayer Bigelow /s/ Thomas J. Neff
-----------------------------------------------------------------------
E. Thayer Bigelow --------- Thomas J. Neff
/s/ Stewart S. Dixon /s/ E. Wayne Nordberg
- -----------------------------------------------------------------------
Stewart S. Dixon E. Wayne Nordberg
BY-LAWS
OF
LORD ABBETT SECURITIES TRUST
As adopted on March 17, 1993
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I Definitions 1
ARTICLE II Offices and Seal 1
Section 2.1. Principal Office 1
Section 2.2. Other Offices 1
Section 2.3. Seal 1
ARTICLE III Shareholders 2
Section 3.1. Meetings 2
Section 3.2. Place of Meeting 2
Section 3.3. Notice of Meetings 2
Section 3.4. Shareholders Entitled to Vote 3
Section 3.5. Quorum 3
Section 3.6. Adjournment 3
Section 3.7. Proxies 4
Section 3.8. Inspection of Records 4
Section 3.9. Record Dates 4
ARTICLE IV Meetings of Trustees 5
Section 4.1. Regular Meetings 5
Section 4.2. Special Meetings 5
Section 4.3. Notice 5
Section 4.4. Waiver of Notice 5
Section 4.5. Adjournment and Voting 6
Section 4.6. Compensation 6
Section 4.7. Quorum 6
ARTICLE V Executive Committee and Other Committees 6
Section 5.1. How Constituted 6
Section 5.2. Powers of the Executive Committee 6
Section 5.3. Other Committees of Trustees 7
Section 5.4. Proceedings, Quorum and Manner of Acting 7
Section 5.5. Other Committees 7
ARTICLE VI Officers 7
Section 6.1. General 7
<PAGE>
PAGE
Section 6.2. Election, Term of Office and Qualifications 8
Section 6.3. Resignations and Removals 8
Section 6.4. Vacancies and Newly Created Offices 8
Section 6.5. Chairman of the Board 9
Section 6.6. President 9
Section 6.7. Vice President 9
Section 6.8. Chief Financial Officer, Treasurer and
Assistant Treasurers 10
Section 6.9. Secretary and Assistant Secretaries 10
Section 6.10. Subordinate Officers 11
Section 6.11. Surety Bonds 11
ARTICLE VII Execution of Instruments; Voting of Securities 12
Section 7.1. Execution of Instruments 12
Section 7.2. Voting of Securities 12
ARTICLE VIII Fiscal Year; Accountants 13
Section 8.1. Fiscal Year 13
Section 8.2. Accountants 13
ARTICLE IX Amendments; Compliance with Investment Company Act 13
Section 9.1. Amendments 13
Section 9.2. Compliance with Investment Company Act 14
<PAGE>
BY-LAWS
OF
LORD ABBETT SECURITIES TRUST
ARTICLE 1.
DEFINITIONS
The terms "Affiliated Person", "Commission", "Interested
Person", "Investment Adviser", "Majority Shareholder Vote", "1940 Act",
"Principal Underwriter", "Series", "Series Majority Shareholder Vote",
"Shareholder", "Shares", "Trust", "Trust Property", and "Trustees" have the
meanings given them in the Declaration and Agreement of Trust (the
"Declaration") of Lord Abbett Securities Trust dated February 26, 1993, as
amended from time to time.
ARTICLE 2.
OFFICES AND SEAL
Section 2.1. PRINCIPAL OFFICE - The principal office of the Trust shall be
located in the ---------------- City of New York, the State of New York.
Section 2.2. OTHER OFFICES - The Trust may establish and
maintain such other offices and places of business within or without the State
of New York as the Trustees may from time to time determine.
Section 2.3. SEAL - The seal of the Trust shall be circular in
form and shall bear the name of the Trust, the year of its organization, and the
words "Common Seal" and "A Delaware Business Trust". The form of the seal shall
be subject to alteration by the Trustees and the seal may be used by causing it
or a facsimile to be impressed or affixed or printed or otherwise reproduced.
Any officer or Trustee of the Trust shall have authority to affix the seal of
the Trust to any document requiring the same but, unless otherwise required by
the Trustees, the seal shall not be necessary to be placed on, and its absence
shall not impair the validity of, any document, instrument or other paper
executed and delivered by or on behalf of the Trust.
<PAGE>
ARTICLE 3.
SHAREHOLDERS
Section 3.1. MEETINGS - A Shareholders' meeting for the
election of Trustees and the transaction of other proper business shall be held
when authorized or required by the Declaration.
Section 3.2. PLACE OF MEETING - All Shareholders' meetings
shall be held at such place within or without the State of New York as the
Trustees shall designate.
Section 3.3. NOTICE OF MEETINGS - Notice of all Shareholders'
meetings, stating the time, place and purpose of the meeting, shall be given by
the Secretary or an Assistant Secretary of the Trust by mail to each Shareholder
entitled to notice of and to vote at such meeting at his address of record on
the register of the Trust. Such notice shall be mailed at least 10 days and not
more than 90 days before the meeting. Such notice shall be deemed to be given
when deposited in the United States mail, with postage thereon prepaid. Any
adjourned meeting may be held as adjourned without further notice. No notice
need be given (A) to any shareholder if a written waiver of notice, executed
before or after the meeting by such Shareholder or his attorney thereunto duly
authorized, is filed with the records of the meeting, or (B) to any Shareholder
who attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him. A waiver of notice need not specify the purposes of
the meeting.
Section 3.4. SHAREHOLDERS ENTITLED TO VOTE - If, pursuant to
Section 3.9 hereof, a record date has been fixed for the determination of
Shareholders entitled to notice of and to vote at any Shareholders' meeting,
each Shareholder of the Trust entitled to vote in accordance with the applicable
<PAGE>
provisions of the Declaration, shall be entitled to vote, in person or by proxy,
each Share or fraction thereof standing in his name on the register of the Trust
at the time of determining net asset value on such record date. If the
Declaration or the 1940 Act requires that Shares be voted by Series, each
Shareholder shall only be entitled to vote, in person or by proxy, each Share or
fraction thereof of such Series standing in his name on the register of the
Trust at the time of determining net asset value on such record date. If no
record date has been fixed for the determination of Shareholders entitled to
notice of and to vote at a Shareholders' meeting, such record date shall be at
the close of business on the day on which notice of the meeting is mailed or, if
notice is waived by all Shareholders, at the close of business on the tenth day
next preceding the day on which the meeting is held.
Section 3.5. QUORUM - The presence at any Shareholders'
meeting, in person or by proxy, of Shareholders entitled to cast a third of the
votes thereat shall be a quorum for the transaction of business, unless
applicable law requires a larger number.
Section 3.6. ADJOURNMENT - The holders of a majority of the
Shares entitled to vote at the meeting and present thereat, in person or by
proxy, whether or not constituting a quorum, or, if no Shareholder entitled to
vote is present thereat in person or by proxy, any Trustee or officer present
thereat entitled to preside or act as Secretary of such meeting may adjourn the
meeting SINE DIE or from time to time. Any business that might have been
transacted at the meeting originally called may be transacted at any such
adjourned meeting at which a quorum is present.
Section 3.7. PROXIES - Shares may be voted in person or by
proxy. When any Share is held jointly by several persons, any one of them may
vote at any meeting, in person or by proxy, in respect of such Share unless at
or prior to exercise of the vote the Trustees receive a specific written notice
to the contrary from any one of them. If more than one such joint owner shall be
present at such meeting, in person or by proxy, and such joint owners or their
<PAGE>
proxies so present disagree as to any vote cast, such vote shall not be received
in respect of such Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise
and the burden of proving invalidity shall rest on the challenger.
Section 3.8. INSPECTION OF RECORDS - The records of the Trust
shall be open to inspection by Shareholders as is permitted shareholders of a
Delaware business trust.
Section 3.9. RECORD DATES - The Trustees may fix in advance a
date as a record date for the purpose of determining the Shareholders who are
entitled to notice of and to vote at any meeting or any adjournment thereof, or
to express consent in writing without a meeting to any action of the Trustees,
or who shall receive payment of any dividend or of any other distribution, or
for the purpose of any other lawful action, PROVIDED that such record date shall
be not more than 90 days before the date on which the particular action
requiring such determination of Shareholders is to be taken. In such case,
subject to the provisions of Section 3.4, each eligible Shareholder of record on
such record date shall be entitled to notice of, and to vote at, such meeting or
adjournment, or to express such consent, or to receive payment of such dividend
or distribution or to take such other action, as the case may be,
notwithstanding any transfer of Shares on the register of the Trust after the
record date.
ARTICLE 4.
MEETINGS OF TRUSTEES
Section 4.1. REGULAR MEETINGS - The Trustees from time to time
shall provide by resolution for the holding of regular meetings for the election
of officers and the transaction of other proper business and shall fix the place
and time for such meetings to be held within or without the State of New York.
<PAGE>
Section 4.2. SPECIAL MEETINGS - Special meetings of the
Trustees shall be held whenever called by the Chairman of the Board, the
President (or, in the absence or disability of the President, by any Vice
President), the Chief Financial Officer, the Secretary or two or more Trustees,
at the time and place within or without the State of New York specified in the
respective notices or waivers of notice of such meetings.
Section 4.3. NOTICE - No notice of regular meetings of the
Trustees shall be required except as required by the Investment Company Act of
1940, as amended. Notice of each special meeting shall be mailed to each
Trustee, at his residence or usual place of business, at least two days before
the day of the meeting, or shall be directed to him at such place by telegraph,
telecopy or cable, or be delivered to him personally not later than the day
before the day of the meeting. Every such notice shall state the time and place
of the meeting but need not state the purposes thereof, except as otherwise
expressly provided by these By-Laws or by statute. No notice of adjournment of a
meeting of the Trustees to another time or place need be given if such time and
place are announced at such meeting.
Section 4.4. WAIVER OF NOTICE - Notice of a meeting need not
be given to any Trustee if a written waiver of notice, executed by him before or
after the meeting, is filed with the records of the meeting, or to any Trustee
who attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him. A waiver of notice need not specify the purposes of
the meeting.
Section 4.5. ADJOURNMENT AND VOTING - At all meetings of the
Trustees, a majority of the Trustees present, whether or not constituting a
quorum, may adjourn the meeting, from time to time. The action of a majority of
the Trustees present at a meeting at which a quorum is present shall be the
action of the Trustees unless the concurrence of a greater proportion is
required for such action by law, by the Declaration or by these By-Laws.
<PAGE>
Section 4.6. COMPENSATION - Each Trustee may receive such
remuneration for his services as such as shall be fixed from time to time by
resolution of the Trustees.
Section 4.7. QUORUM - One-third of the Trustees present at a
meeting shall constitute a quorum for the transaction of business, but in no
case shall a quorum be less than two Trustees.
ARTICLE 5.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 5.1. HOW CONSTITUTED - The Trustees may, by
resolution, designate one or more committees, including an Executive Committee,
an Audit Committee and a Committee on Administration, each consisting of at
least two Trustees. The Trustees may, by resolution, designate one or more
alternate members of any committee to serve in the absence of any member or
other alternate member of such committee. Each member and alternate member of a
committee shall be a Trustee and shall hold office at the pleasure of the
Trustees. The Chairman of the Board and the President shall be members of the
Executive Committee.
Section 5.2. POWERS OF THE EXECUTIVE COMMITTEE - Unless
otherwise provided by resolution of the Trustees, the Executive Committee shall
have and may exercise all of the power and authority of the Trustees, PROVIDED
that the power and authority of the Executive Committee shall be subject to the
limitations contained in the Declaration.
Section 5.3. OTHER COMMITTEES OF TRUSTEES - To the extent
provided by resolution of the Trustees, other committees shall have and may
exercise any of the power and authority that may lawfully be granted to the
Executive Committee.
Section 5.4. PROCEEDINGS, QUORUM AND MANNER OF ACTING - In the
absence of appropriate resolution of the Trustees, each committee may adopt such
rules and regulations governing its proceedings, quorum and manner of acting as
it shall deem proper and desirable, PROVIDED that the quorum shall not be less
<PAGE>
than two Trustees. In the absence of any member or alternate member of any such
committee, the members thereof present at any meeting, whether or not they
constitute a quorum, may appoint a Trustee to act in the place of such absent
member or alternate member.
Section 5.5. OTHER COMMITTEES - The Trustees may appoint other
committees, each consisting of one or more persons who need not be Trustees.
Each such committee shall have such powers and perform such duties as may be
assigned to it from time to time by the Trustees, but shall not exercise any
power which may lawfully be exercised only by the Trustees or a committee
thereof.
ARTICLE 6.
OFFICERS
Section 6.1. GENERAL - The designated officers of the Trust
shall be a Chairman of the Board, a President, a Secretary, a Chief Financial
Officer, a Treasurer and may include one or more Vice Presidents (one or more of
whom may be Executive Vice Presidents), one or more Assistant Secretaries, one
or more Assistant Treasurers, and such other officers as may be appointed in
accordance with the provisions of Section 6.10 of this Article VI.
Section 6.2. ELECTION, TERM OF OFFICE AND QUALIFICATIONS - The
designated officers of the Trust and any Series thereof (except those appointed
pursuant to Section 6.10) shall be elected by the Trustees at any regular or
special meeting of the Trustees. Except as provided in Sections 6.3 and 6.4 of
this Article VI, each officer elected by the Trustees shall hold office until
his successor shall have been chosen and qualified. Any two offices, except
those of the President and a Vice President, may be held by the same person, but
no officer shall execute, acknowledge or verify any instrument in more than one
capacity if such instrument be required by law, the Declaration or these By-Laws
<PAGE>
to be executed, acknowledged or verified by any two or more officers. The
Chairman of the Board and the President shall be selected from among the
Trustees and may hold such offices only so long as they continue to be Trustees.
Any Trustee or officer may be but need not be a Shareholder of the Trust.
Section 6.3. RESIGNATIONS AND REMOVALS - Any officer may
resign his office at any time by delivering a written resignation to the
Trustees, the President, the Secretary or any Assistant Secretary. Unless
otherwise specified therein, such resignation shall take effect upon delivery.
Any officer may be removed from office with or without cause by the vote of a
majority of the Trustees at any regular meeting or any special meeting. Except
to the extent expressly provided in a written agreement with the Trust, no
officer resigning and no officer removed shall have any right to any
compensation for any period following his resignation or removal or any right to
damages on account of such removal.
Section 6.4. VACANCIES AND NEWLY CREATED OFFICES - If any
vacancy shall occur in any office by reason of death, resignation, removal,
disqualification or other cause, or if any new office shall be created, such
vacancies or newly created offices may be filled by the Trustees at any regular
or special meeting or, in the case of any office created pursuant to Section
6.10 of this Article VI, by any officer upon whom such power shall have been
conferred by the Trustees.
Section 6.5. CHAIRMAN OF THE BOARD - The Chairman of the Board
shall be the chief executive officer of the Trust and each Series thereof, shall
preside at all Shareholders' meetings and at all meetings of the Trustees and
shall be EX OFFICIO a member of all committees of the Trustees and each Series
thereof, except the Audit Committee. Subject to the supervision of the Trustees,
he shall have general charge of the business of the Trust and each Series
thereof, the Trust Property and the officers, employees and agents of the Trust
and each Series thereof. He shall have such other powers and perform such other
duties as may be assigned to him from time to time by the Trustees.
<PAGE>
Section 6.6. PRESIDENT - The President shall be the chief
operating officer of the Trust and each Series thereof and, at the request of or
in the absence or disability of the Chairman of the Board, he shall preside at
all Shareholders' meetings and at all meetings of the Trustees and shall in
general exercise the powers and perform the duties of the Chairman of the Board.
Subject to the supervision of the Trustees and such direction and control as the
Chairman of the Board may exercise, he shall have general charge of the
operations of the Trust and each Series thereof and its officers, employees and
agents. He shall exercise such other powers and perform such other duties as
from time to time may be assigned to him by the Trustees.
Section 6.7. VICE PRESIDENT - The Trustees may, from time to
time, designate and elect one or more Vice Presidents who shall have such powers
and perform such duties as from time to time may be assigned to them by the
Trustees or the President. At the request or in the absence or disability of the
President, the Executive Vice President (or, if there are two or more Executive
Vice Presidents, the senior in length of time in office or if there is no
Executive Vice President in the absence of both the President and any Executive
Vice President, the Vice President who is senior in length of time in office of
the Vice Presidents present and able to act) may perform all the duties of the
President.
Section 6.8. CHIEF FINANCIAL OFFICER, TREASURER AND ASSISTANT
TREASURERS - The Chief Financial Officer shall be the principal financial and
accounting officer of the Trust and each Series thereof and shall have general
charge of the finances and books of account of the Trust and each Series
thereof. Except as otherwise provided by the Trustees, he shall have general
supervision of the funds and property of the Trust and each Series thereof and
of the performance by the custodian appointed pursuant to Section 2.1 (paragraph
r) of the Declaration of its duties with respect thereto. The Chief Financial
Officer shall render a statement of condition of the finances of the Trust and
each Series thereof to the Trustees as often as they shall require the same and
he shall in general perform all the duties incident to the office of the Chief
<PAGE>
Financial Officer and such other duties as from time to time may be assigned to
him by the Trustees.
The Treasurer or any Assistant Treasurer may perform such
duties of the Chief Financial Officer as the Chief Financial Officer or the
Trustees may assign. In the absence of the Chief Financial Officer, the
Treasurer may perform all duties of the Chief Financial Officer. In the absence
of the Chief Financial Officer and the Treasurer, any Assistant Treasurer may
perform all duties of the Chief Financial Officer.
Section 6.9. SECRETARY AND ASSISTANT SECRETARIES - The
Secretary shall attend to the giving and serving of all notices of the Trust and
each Series thereof and shall record all proceedings of the meetings of the
Shareholders and Trustees in one or more books to be kept for that purpose. He
shall keep in safe custody the seal of the Trust, and shall have charge of the
records of the Trust and each Series thereof, including the register of shares
and such other books and papers as the Trustees may direct and such books,
reports, certificates and other documents required by law to be kept, all of
which shall at all reasonable times be open to inspection by any Trustee. He
shall perform such other duties as appertain to his office or as may be required
by the Trustees.
Any Assistant Secretary may perform such duties of the
Secretary as the Secretary or the Trustees may assign, and, in the absence of
the Secretary, he may perform all the duties of the Secretary.
Section 6.10. SUBORDINATE OFFICERS - The Trustees from time to
time may appoint such other subordinate officers or agents as they may deem
advisable, each of whom shall have such title, hold office for such period, have
such authority and perform such duties as the Trustees may determine. The
Trustees from time to time may delegate to one or more officers or agents the
power to appoint any such subordinate officers or agents and the prescribe their
respective rights, terms of office, authorities and duties.
<PAGE>
Section 6.11. SURETY BONDS - The Trustees may require any
officer or agent of the Trust and any Series thereof to execute a bond
(including, without limitation, any bond required by the 1940 Act and the rules
and regulations of the Commission) to the Trustees in such sum and with such
surety or sureties as the Trustees may determine, conditioned upon the faithful
performance of his duties to the Trust, including responsibility for negligence
and for the accounting of any of the Trust Property that may come into his
hands. In any such case, a new bond of like character shall be given at least
every six years, so that the date of the new bond shall not be more than six
years subsequent to the date of the bond immediately preceding.
ARTICLE 7.
EXECUTION OF INSTRUMENTS; VOTING OF SECURITIES
Section 7.1. EXECUTION OF INSTRUMENTS - All deeds, documents,
transfers, contracts, agreements, requisitions, orders, promissory notes,
assignments, endorsements, checks and drafts for the payment of money by the
Trust or any Series thereof, and any other instruments requiring execution
either in the name of the Trust or the names of the Trustees or otherwise may be
signed by the Chairman, the President, a Vice President or the Secretary and by
the Chief Financial Officer, Treasurer or an Assistant Treasurer, or as the
Trustees may otherwise, from time to time, authorize, PROVIDED that instructions
in connection with the execution of portfolio securities transactions may be
signed by one such officer. Any such authorization may be general or confined to
specific instances.
Section 7.2. VOTING OF SECURITIES - Unless otherwise ordered
by the Trustees, the Chairman, the President or any Vice President shall have
full power and authority on behalf of the Trustees to attend and to act and to
vote, or in the name of the Trustees to execute proxies to vote, at any meeting
of stockholders of any company in which the Trust may hold stock. At any such
meeting such officer shall possess and may exercise (in person or by proxy) any
<PAGE>
and all rights, powers and privileges incident to the ownership of such stock.
The Trustees may by resolution from time to time confer like powers upon any
other person or persons.
ARTICLE 8.
FISCAL YEAR; ACCOUNTANTS
Section 8.1. FISCAL YEAR - The fiscal year of the Trust and
any Series thereof shall be established by resolution of the Trustees.
Section 8.2. ACCOUNTANTS - 8.3. The Trustees shall employ a
public accountant or a firm of independent public accountants as their
accountant to examine the accounts of the Trust and each Series thereof and to
sign and certify at least annually financial statements filed by the Trust. The
accountant's certificates and reports shall be addressed both to the Trustees
and to the Shareholders.
8.3.1. A majority of the Trustees who are not Interested
Persons of the Trust shall select the accountant at any meeting held before the
initial registration statement of the Trust becomes effective, and thereafter
shall select the accountant annually by votes, cast in person, at a meeting held
within 90 days before or after the beginning of the fiscal year of the Trust.
8.3.2. Any vacancy occurring due to the death or resignation
of the accountant may be filled at a meeting called for the purpose by the vote,
cast in person, of a majority of those Trustees who are not Interested Persons
of the Trust.
ARTICLE 9.
AMENDMENTS; COMPLIANCE WITH INVESTMENT COMPANY ACT
Section 9.1. AMENDMENTS - These By-Laws may be amended or
repealed, in whole or in part, by a majority of the Trustees then in office at
any meeting of the Trustees, or by one or more writings signed by such a
<PAGE>
majority.
Section 9.2. COMPLIANCE WITH INVESTMENT COMPANY ACT - No
provision of these By-Laws shall be given effect to the extent inconsistent with
the requirements of the Investment Company Act of 1940, as amended.
[Adopted at April 17, 1997
meetings of the Boards]
RETIREMENT PLAN FOR
NON-INTERESTED PERSON DIRECTORS
AND TRUSTEES OF LORD ABBETT FUNDS
(As Amended and Restated as of April 17, 1997)
ARTICLE I.
PURPOSE OF THE PLAN
Section 1.1 The Retirement Plan for Non-Inter ested Person
Directors and Trustees of Lord Abbett Funds (the "Plan") is established by the
Adopting Funds to attract and retain Independent Board Members by providing such
members with retirement income upon the terms and conditions
set forth in the Plan.
ARTICLE II.
DEFINITIONS
SECTION 2.1 Whenever used herein, unless the context indicates
otherwise, the following terms shall have the respective meanings set forth
below:
ACTUARIAL EQUIVALENT: A benefit having the actuarial
equivalent value to the benefit from which it is derived using the actuarial
assumptions set forth on Schedule A.
ADOPTING FUND: Each investment company referred to on Schedule
B that has adopted the Plan for its Inde pendent Board Members and any
investment company sponsored and managed by Lord Abbett that adopts the Plan
after the Effective Date as provided in Article VII of the Plan.
ANNUAL RETAINER FEE: The annual fee payable to an
Independent Board Member by an Adopting Fund for serving as
an Independent Board Member, excluding any fees relating to
<PAGE>
attending meetings or chairing committees.
DISABILITY: Permanent and total disability as
defined in Section 22(e)(3) of the Internal Revenue Code of
1986, as amended.
EARLY RETIREMENT BENEFIT: The benefit calculated
under Section 4.2 of the Plan.
<PAGE>
EFFECTIVE DATE: August 13, 1992.
Eligible Board Member: An Independent Board
Member who satisfies the eligibility requirements set forth
in Article III of the Plan.
INDEPENDENT BOARD MEMBER: Any director (if the Adopting Fund
is a corporation) or any trustee (if the Adopting Fund is a trust) of an
Adopting Fund who is not an interested person (as such term is defined in the
Investment Company Act of 1940, as amended) of the Adopting Fund.
LORD ABBETT: Lord, Abbett & Co., the investment
adviser to each Adopting Fund.
NORMAL RETIREMENT BENEFIT: The benefit calculated
under Section 4.1 of the Plan.
NORMAL RETIREMENT DATE: The last day of the calendar month in
which an Eligible Board Member attains age 72, provided that the Normal
Retirement Date for an Eligible Board Member who has attained age 72 prior to
the Effective Date shall be the first anniversary of the Effective Date or such
earlier date as shall be determined by the other Independent Board Members.
RETIREMENT: Any termination of service of an Eligible Board
Member of an Adopting Fund other than by reason of death (i) after attaining his
Normal Retirement Date or (ii) which is approved by the Board of Directors or
Trustees of such Adopting Fund pursuant to Section 4.2.
YEAR OF SERVICe: Each twelve months of service as an
Independent Board Member of any Adopting Fund, commencing on the date the
Independent Board Member is elected as a director or trustee of such Adopting
Fund, regardless of whether such service is performed prior to the Effective
Date or prior to the time the Adopting Fund becomes an Adopting Fund hereunder.
Nothing in the preceding sentence shall be construed to provide any Independent
Board Member with credit for more than one Year of Service for any twelve month
period during which such Independent Board Member serves on the Boards of more
than one Adopting Fund.
<PAGE>
ARTICLE III.
ELIGIBILITY
Each Independent Board Member who was serving as such on
September 1, 1996, who does not make an election by the close of business on
November 29, 1996 to receive benefits under the Deferred Compensation Plans of
the Funds in lieu of retirement benefits under the Plan and who has completed at
least ten Years of Service as an Independent Board Member will be eligible to
receive retirement benefits under the Plan as provided in Article IV.
ARTICLE IV.
RETIREMENT BENEFIT
Section 4.1 NORMAL RETIREMENT BENEFIT. An Eligible Board
Member whose Retirement occurs on or after his Normal Retirement Date will
receive from each Adopting Fund which he served as an Independent Board Member
at the time of such Retirement an annual benefit payable for the remainder of
his life in an amount equal to 100% of the Annual Retainer Fee in effect on the
date of the Eligible Board Member's Retirement.
Section 4.2 EARLY RETIREMENT BENEFIT. If, in its sole
discretion, the Board of Directors or Trustees of an Adopting Fund on which an
Eligible Board Member serves determines that an Eligible Board Member has "good
cause" to retire prior to his Normal Retirement Date, the Eligible Board
Member's termination of service shall be treated as a Retirement and he shall
receive an Early Retirement Benefit calculated as provided in this Section 4.2.
The Early Retirement Benefit shall be an annual benefit payable for the
remainder of the Eligible Board Member's life which is the Actuarial Equivalent
of the Eligible Board Member's Normal Retirement Benefit. Good cause may include
(but is not limited to) the Disability of the Eligible Board Member or personal
circumstances making it impractical for the Eligible Board Member to continue as
an Independent Board Member.
Section 4.3 SPOUSAL BENEFIT. An Eligible Board Member may
elect prior to his Retirement to receive a reduced Normal Retirement Benefit or
Early Retirement Benefit, as the case may be, for his life and to provide a
survivor benefit to his surviving spouse, if any, for her life equal to the
percentage (not greater than 100%) of his reduced annual benefit specified in
his election. If an
<PAGE>
Eligible Board Member elects a survivor benefit, but does not specify the
percentage of his reduced benefit to be payable to his spouse, such spousal
benefit shall be 50% of his reduced annual benefit. In the event that an
Eligible Board Member elects a survivor benefit, the annual benefits payable in
respect of the Eligible Board Member and his spouse shall be equal to the
Actuarial Equivalent of the annual benefit which would have been payable to such
Member on a straight life basis.
Section 4.4 PRE-RETIREMENT DEATH BENEFIT. In the
----------- ----------------------------
event an Eligible Board Member dies prior to Retirement,
such Member's surviving spouse, if any, shall receive a
spousal death benefit for the spouse's life calculated and
payable as provided in this Section 4.4. The benefit
payable to a surviving spouse hereunder shall be calculated
and payable at the same time and in the same manner as a
survivor benefit under Section 4.3 assuming that the
Eligible Board Member survived until his Normal Retirement
Date, elected a survivor benefit under Section 4.3 equal to
50% of his reduced annual benefit and commenced receipt of
his reduced benefit prior to his death; provided, however,
that the surviving spouse may elect, within 90 days of the
date of the Eligible Board Member's death, that the spousal
benefit be paid as though the Independent Board Member had
retired pursuant to Section 4.2 (with a reduced benefit)
immediately prior to his death.
ARTICLE V.
TIME OF PAYMENT
Any benefit payable under Article IV shall be payable
quarterly.
ARTICLE VI.
PAYMENT OF BENEFIT; ALLOCATION OF COSTS
Each Adopting Fund is responsible for the payment of the
benefits payable by it and the Adopting Funds are responsible for the payment of
all expenses of administration of the Plan, including without limitation all
accounting, legal fees and other Plan expenses. The Adopting Funds shall from
time to time agree as to the manner in which the expenses of the Plan shall be
allocated among the respective Adopting Funds. The obligations of each Adopting
Fund to pay benefits and such expenses will not be secured or funded in any
manner, and such obligations
<PAGE>
will not have any preference over the lawful claims of each Adopting Fund's
creditors or shareholders, as the case may be.
ARTICLE VII.
ADMINISTRATION
Any question involving entitlement to payments under, or the
administration of, the Plan will be referred to the Board of Directors or the
Board of Trustees of the Adopting Fund or Funds that are affected. Except as
otherwise provided herein, the Board of Directors or Board of Trustees of each
Adopting Fund will make all interpreta tions and determinations necessary or
desirable for the Plan's administration with respect to such Adopting Fund, and
such interpretations and determinations will be final and conclusive.
ARTICLE VIII.
MISCELLANEOUS AND TRANSITION PROVISIONS
8.1 RIGHTS NOT ASSIGNABLE. The right to receive any payment
under the Plan is not transferable or assignable. Except as provided in Sections
4.3 and 4.4, nothing in the Plan shall create any benefit, cause of action,
right of sale, transfer, assignment, pledge, encumbrance, or other such right in
any spouse or heirs or the estate of any Independent Board Member or former
Independent Board Member.
8.2 AMENDMENT, ETC. The Board of Directors or Board of
Trustees of an Adopting Fund may amend or terminate the Plan at any time with
respect to such Adopting Fund, provided that no amendment or termination will
impair the rights of an Eligible Board Member to receive upon Retirement the
payments which would have been made to such Board Member had there been no such
amendment or termination (based upon such Board Member's Years of Service to,
and the Annual Retainer Fee payable at, the date of such amendment or
termination) or the rights of an Eligible Board Member to receive any benefits
due under the Plan, without the consent of such Eligible Board Member. Any
investment company sponsored and managed by Lord Abbett may become an Adopting
Fund by adopting the Plan after the Effective Date.
<PAGE>
8.3 NO RIGHT TO REELECTION. Nothing in the Plan will create
any obligation on the part of any Adopting Fund to nominate any Independent
Board Member for reelection.
8.4 CONSULTING. After Retirement, each Eligible Board Member
may render such services for any Adopting Fund for such compensation as may be
agreed upon from time to time by such Eligible Board Member and such Adopting
Fund.
8.5 RETIREMENT POLICY. It shall be the policy of each Adopting
Fund that each Independent Board Member shall retire on his Normal Retirement
Date, provided, however, that the Board of Trustees of an Adopting Fund may, by
resolution, permit an Independent Board Member (or a class of such Independent
Board Members) to continue to serve beyond such Normal Retirement Date for such
period or periods as the Board of Trustees shall determine from time to time.
<PAGE>
Schedule A
ACTUARIAL ASSUMPTIONS TO
DETERMINE ACTUARIAL EQUIVALENT
Discount Rate: The interest rate in effect on January
1 of the then current year for use by
the Pension Benefit Guaranty
Corporation ("PBGC") to determine the
present value of lump sum
distributions on plan terminations
Mortality Rates: PBGC mortality tables then in effect
Other Factors: As determined by the actuary
calculating the amount of such benefit
using reasonable methods consistent
with customary actuarial practices
<PAGE>
Schedule B
FUNDS ADOPTING THE RETIREMENT PLAN
FOR NON-INTERESTED PERSON DIRECTORS
AND TRUSTEES OF LORD ABBETT FUNDS
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Mid-Cap Value Fund, Inc.
Lord Abbett Affiliated Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Series Fund, Inc.
Lord Abbett Global Fund, Inc.
Lord Abbett Securities Trust
Lord Abbett Investment Trust
Lord Abbett Research Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett Tax-Free Income Trust
Lord Abbett U.S. Government Securities Money
Market Fund, Inc.
<PAGE>
<PAGE>
DRAFT--July 25, 1997
EQUITY-BASED PLANS FOR NON-INTERESTED
PERSON DIRECTORS AND TRUSTEES OF LORD ABBETT FUNDS
(As Amended and Restated as of August __, 1997)
1. PURPOSE.
The purpose of these Equity-Based Plans for Non- Interested
Person Directors and Trustees (collectively, the "Equity-Based Plans" and
separately, an "Equity-Based Plan"), which were initially called the Deferred
Compensation Plan for Non-Interested Person Directors and Trustees of Lord
Abbett Funds, is to provide eligible directors and trustees of each investment
company referred to on Schedule I that has adopted an Equity-Based Plan and any
other investment company sponsored and managed by Lord, Abbett & Co. that adopts
an Equity-Based Plan (collectively, the "Companies" and separately, a "Company")
with the opportunity to defer the receipt of compensation earned by them as
directors and trustees in lieu of receiving payment of such compensation
currently and to give them to the extent of such deferred compensation and other
compensation a pecuniary interest in the investment performance of the
Companies. The Equity-Based Plans constitute a separate
<PAGE>
Equity-Based Plan of each Company.
2. ELIGIBILITY.
Any member of the Board of Trustees (if a Company is a trust)
and any member of the Board of Directors (if a Company is a corporation) of a
Company (the "Board") who is not an "interested person" of such Company as such
term is defined in the Investment Company Act of 1940 (an "Independent Board
Member") shall be eligible to participate in the Equity-Based Plan of such
Company, if he or she so elects (a "Participant"). 3. Amounts of Deferrals.
(a) ACCRUED PENSION PLAN DEFERRALS. The "Retirement Plan for
Non-Interested Person Directors and Trustees of Lord Abbett Funds" (the "Pension
Plan") has been amended, effective October 16, 1996, to provide that Independent
Board Members may elect to receive equity-based benefits under the Equity-Based
Plans in lieu of retirement benefits under the Pension Plan. Any Independent
Board Member who makes such an election by the close of business
<PAGE>
on November 29, 1996 shall not be entitled to retirement benefits under the
Pension Plan, but shall have his Account (as defined in section 4) for each
Company increased, as of November 29, 1996, through credit of an amount equal to
the value of such Independent Board Member's retirement benefits under such
Company's Pension Plan (prior to giving effect to such amendment) as accrued to
such date to reflect the terms of the Pension Plan.
(b) MANDATORY DEFERRALS. Each Independent Board Member who
makes the election referred to in the foregoing section 3(a) by the close of
business on November 29, 1996, and each Independent Board Member who becomes an
Independent Board Member after such date, shall defer receipt of such amount, if
any, of the compensation earned by such Independent Board Member for serving as
a member of the Board or as a member of any committee (or subcommittee of such
committee) of the Board of which such Independent Board Member from time to time
may be a member as may be specified with respect to such Independent Board
Member from time to time by resolution of the Independent Board Members.
<PAGE>
(c) OPTIONAL DEFERRALS. In addition to the above deferrals an
Independent Board Member may elect to defer receipt of all or a specified
portion of any other compensation (including fees for attending meetings) earned
by such Independent Board Member by notice to the Companies. Expenses of
attending meetings of the Board, committees of the Board or subcommittees of
such committees may not be deferred. 4. Equity-Based Accounts.
A deferred compensation equity-based account (the "Account")
shall be established by each Company in the name of each Participant. Any
amounts credited to an Account pursuant to section 3(a) will be credited as of
the close of business on November 29, 1996. Any compensation earned by a
Participant during any year and deferred pursuant to section 3(b) will be
credited to such Participant's Account on a quarterly basis on the last days of
March, June, September and December of such year. Any compensation deferred by a
Participant pursuant to section 3(c) will be credited to
<PAGE>
such Participant's Account on the date such compensation otherwise would have
been payable to such Participant.
5. ACCOUNT INVESTMENT.
(a) TREATMENT OF CREDIT AMOUNTS. Any amounts credited at any
time to a Participant's Account established by a Company shall be deemed
invested in a number of shares, which shall be class A shares if such Company
has multiple classes of shares, of such Company's Common Stock equal to the
quotient of (i) the amount credited to the Participant's Account divided by (ii)
the Net Asset Value per share as of the date such amount is so credited. The Net
Asset Value per share shall be determined as set forth in the Company's Articles
of Incorporation. If such Company has more than one series, the amount credited
to the Participant's Account shall be allocated between or among the series on
the same basis as the compensation being deferred is charged to the series (or,
in the case of an amount credited pursuant to section 3(a), on the same basis as
the amount thereof was charged to the series).
<PAGE>
(b) MERGERS, ETC. In the event that the Company shall pay a
stock dividend on, or split up, combine, reclassify or substitute other
securities by merger, consolidation or otherwise for its outstanding shares, the
number of shares credited to the Participant's Account shall be adjusted to
preserve rights substantially proportionate to the rights held immediately prior
to such event.
(c) DISTRIBUTIONS. On each payable date of a dividend or
capital gains distribution declared by the Board of a Company, the Account will
be credited with the number of full and fractional shares of the Company or
series that the shares of such Company or series deemed to be held in the
Account would have purchased if such dividend or distribution had been
reinvested at the Net Asset Value on the investment date established by the
Board with respect to such dividend or distribution.
(d) Notwithstanding the foregoing, to the extent that a
Participant continues to have an Account after having terminated service as an
Independent Board Member, such Participant may elect, from time to time, but no
more
<PAGE>
frequently than once in any calendar [quarter] [month], to have his Account
treated as though invested in the shares of up to five (or such greater or
lesser number as the administration appointed pursuant to Section 11 hereof
shall be determined) companies [as to which such Participant served as an
Independent Board Member]. Any such election shall be made in writing and
delivered to the Company, and shall take effect at the end of the [third]
business day following receipt thereof by the Company. Any change in the manner
in which a Participant's Account is deemed invested will not affect the period
over which such Account is payable or the time at which or the formula pursuant
to which any Installments due will be payable.
6. MANNER OF ELECTING OPTIONAL DEFERRALS; PAYMENT
ELECTIONS.
(a) NOTICE. Each Participant shall complete, sign and file
with the Companies for which he is an Independent Board Member a Notice of
Election (the "Notice") in one or more of the forms attached hereto as Exhibits
A, B and C. The Notice shall include, as appropriate:
<PAGE>
(i) the amount, if any, of compensation to be deferred
under section 3(c);
(ii) the time or times of payment of any amounts credited and deferred under
sections 3(a) and (b) and of any amounts deferred under section 3(c);
(iii) the manner of payment of any amounts credited and deferred under
sections 3(a) and (b) and of any amounts deferred under section 3(c)
(i.e., in a lump sum or in a number of annual installments); and
(iv) any beneficiary designated pursuant to section 9(b) and the manner of
payment to such designated beneficiary.
(b) DATE OF FIRST PAYOUT OF OPTIONAL DEFERRALS UNDER SECTION
3(C). With respect to amounts deferred pursuant to section 3(c), each
Participant shall have the right in the Notice to elect to defer the receipt of
such deferred compensation until any one of the following events, which such
Participant shall specify in the Notice:
<PAGE>
(i) the first business day of January following the year in which
such Participant ceases to be an Independent Board Member of
the Companies;
(ii) the date such Participant specifically chooses (but not earlier than
the January 1 of the second calendar year following the calendar year
in which such election is made); or
(iii) the date on which some specific future event occurs which is not within
the Participant's con trol.
(c) DATE OF FIRST PAYOUT OF AMOUNTS CREDITED AND DEFERRED
UNDER SECTION 3(A) AND (B). With respect to amounts credited to an Account and
deferred under sec tions 3(a) and (b), each Participant shall defer the receipt
of such amounts until any one of the following dates or events, which such
Participant shall specify in the Notice:
(i) the first business day of January following the year in which such
Participant ceases to be an Independent Board Member of the Companies;
<PAGE>
(iii)the later of the first business day of January following the
year in which such Participant turns 65 and January 1 of the
second calendar year following the calendar year in which such
election is made;
(iii)the later of the first business day of January following the year in
which such Participant retires from his or her principal occupation and
January 1 of the second calendar year following the calendar year in
which such election is made; and
(iv) the first business day of a month not earlier than
the earliest of the dates referred to in (i), (ii)
and (iii) above.
(d) FAILURE TO DESIGNATE. If a Participant fails
to designate in his Notice a time or date as of which payment of his Account (or
any part of his Account) shall commence, payment of such amount shall commence
as of the date set forth in (b)(i) above (unless the Participant files an
amended Notice in compliance with section 8(b) selecting
<PAGE>
a different distribution date). If a Participant fails to designate in his
Notice the manner of distribution to apply to his Account (or any part of his
Account), such Account shall be distributed in a lump sum (unless the
Participant files an amended Notice in compliance with section 8(b) selecting a
different method of distribution).
(e) DISSOLUTION, ETC. Deferrals under this Equity-Based Plan
which are deemed invested in shares of a Company (or series of a Company) shall
be distributed upon the dissolution, liquidation or winding up of the Company
(or other termination of the series), whether voluntary or involuntary; or the
voluntary sale, conveyance or transfer of all or substantially all of a
Company's (or a series') assets (unless the obligations of the Company or the
series shall have been assumed by another investment company or another series
of an investment company); or the merger of a Company into another trust or
corporation or its consolidation with one or more other trusts or corporations
(unless the obligations of the Company are assumed by such
<PAGE>
surviving entity and such surviving entity is another
investment company).
(f) HARDSHIP. Upon application by a Participant and a
determination by the Compensation and Nominating Committees of the Boards that
the Participant has suffered a severe and unanticipated financial hardship, the
Administrator shall distribute to the Participant, in a single lump sum, an
amount equal to the lesser of the amount needed by the Participant to meet the
hardship (pro-rata among the Accounts), or the balance of the Participant's
Accounts.
7. EFFECTIVE DATE AND DURATION OF DEFERRAL ELECTIONS.
(a) ELECTION IRREVOCABLE. Except as provided in sections 7(b)
and 8(a), any election by a Participant to defer compensation pursuant to
section 3(c) shall be irrevocable from and after the date on which such person's
Notice is filed with the Companies. Elections to defer compensation pursuant to
section 3(c) shall be effective to defer a Participant's compensation as
follows:
<PAGE>
(i) As to any Independent Board Member in office on
the effective date of the Equity-Based Plans who
files a Notice no later than 60 days after such
effective date, the Notice shall be effective to
defer any compensation which may be deferred
pursuant to section 3(c) and is earned by such
Independent Board Member after the date of the
filing of the Notice;
(ii) As to any nominee for the office of trustee or director who has not
previously served as an Independent Board Member and who files a Notice
prior to his election as an Independent Board Member, such election to
defer compensation pursuant to section 3(c) shall be effective to defer
any compensation which may be deferred pursuant to section 3(c) and is
earned by such nominee after his election as an Independent Board
Member; and
(iii) As to any other Independent Board Member, the election to defer
compensation pursuant to sec tion 3(c) shall be effective to defer any
compensation which may be deferred pursuant to section 3(c) and is
earned from and after January 1 of the calendar year next succeeding
the year in which the Notice is filed.
(b) CONTINUANCE OF NOTICES. Any election to defer compensation
pursuant to section 3(c) made by an Independent Board Member shall continue in
effect unless and until the Company is notified in writing by such Independent
Board Member prior to the end of any calendar year that he wishes to terminate
such election or modify the amount of compensation deferred pursuant to such
election. Any such revocation or modification shall be effective only with re
spect to compensation earned after the calendar year in which such amended
Notice is filed with the Company. Upon receipt by the Company from an
Independent Board Member of such an amended Notice, the applicable portion of
compensation earned by such Independent Board Member from and after January 1 of
the calendar year succeeding the day on which such Notice was received shall be
paid currently
<PAGE>
and no longer deferred as provided in the Equity-Based Plan. However, any
amounts in such Independent Board Member's Account on such January 1 and any
amount which the Independent Board Member thereafter defers shall continue to be
payable in accordance with the Notice (or Notices) pursuant to which it was
deferred except as provided in section 8(a).
(c) SUBSEQUENT NOTICE. An Independent Board
Member who has filed a Notice to terminate deferment of
compensation may thereafter again file a Notice to
participate pursuant to section 6 hereof effective for the
calendar year subsequent to the calendar year in which he
files the new Notice.
8. CHANGES IN FORM AND TIMING OF PAYMENT OF DEFERRED
AMOUNTS.
A Participant may elect to change the timing and manner of any
distribution election with respect to any or all amounts deferred and credited
with respect to the Participant under the Equity-Based Plans by filing an
amended Notice with the Companies
<PAGE>
(a) prior to the calendar year in which the Participant ceases
to be an Independent Board Member of the Companies, and
(b) by a date such that at least one full calendar year
elapses between
(i) the date as of which such amended Notice is
filed and
(ii) each of
(A) the date as of which a distribution
would otherwise have commenced and
(B) the date as of which such distribution will
commence under such amended Notice.
No such amended Notice shall, however, provide for payment of an amount credited
under section 3(a) or 3(b) earlier than permitted in accordance with section
6(c), except as provided in section 9(b).
9. PAYMENT OF AMOUNTS CREDITED TO
ACCOUNTS.
(a) MANNER OF PAYMENT. An Account established by a Company for
a Participant will be paid in a lump sum or in installments, or both, as
specified in his Notice or amended
<PAGE>
Notice, and at the time or times specified in the Notice or amended Notice. If
installments are elected by a Participant, such installments shall be paid in
cash and the amount of the first cash payment shall be a fraction of the then
value of the portion of such Account to be paid in installments, the numerator
of which is one, and the denominator of which is the total number of
installments. The amount of each subsequent cash payment shall be a fraction of
the then value of such portion of such Account remaining after the prior
payment, the numerator of which is one and the denominator of which is the total
number of installments elected minus the number of installments previously paid.
If a lump sum is elected, payment shall be made in the full and fractional
shares of the Company (and of any series of such Company) in which the portion
of such Participant's Account to be paid in a lump sum is deemed invested.
(b) PAYMENT TO BENEFICIARY. In the event of a Participant's
death before he has received payment of all amounts in an Account established by
a Company for such
<PAGE>
Participant, the value of such Account shall be paid to the beneficiary
designated in such Participant's Notice or, if no such beneficiary is
designated, to such Participant's estate, in accordance with the provisions of
the Equity- Based Plans. Any beneficiary so designated by a Participant may be
changed at any time by notice in writing from such Participant to the Companies.
Payments to a beneficiary shall be made in a lump sum or in installments, or
both, as specified in the Participant's Notice or amended Notice. If a lump sum
is elected, payment shall be made as soon as reasonably possible in the full and
fractional shares of the Company (and of any series of such Company) in which
such Account is deemed invested. If installments are elected, such installments
shall be paid in cash in amounts determined as provided in section 9(a). If a
Participant fails to designate in a Notice or amended Notice on file with the
Companies at the time of his death the manner of distribution to his designated
beneficiary, any distribution to such beneficiary (or if no such beneficiary is
designated, to his estate) shall be made in a lump sum.
<PAGE>
10. PRIOR DEFERRALS.
Notwithstanding anything else contained herein to the
contrary, if an Independent Board Member who is eligible to participate in a
Equity-Based Plan under section 2 hereof has deferred any compensation under any
arrangement in effect prior to the establishment of such Equity-Based Plan (i)
such Independent Board Member shall be deemed to be a participant in such
Equity-Based Plan, (ii) the amount cred ited for the benefit of such Independent
Board Member under such arrangement as of December 31, 1992 shall be credited to
such Independent Board Member's Account under such Equity-Based Plan as of
January 1, 1993 and (iii) the provisions of such Equity-Based Plan shall apply
to such Independent Board Member and to the amount described in subclause (ii)
above as though such amount had been deferred under the terms of such
Equity-Based Plan. Elections under sections 6 or 8 by an Independent Board
Member subject to the provisions of this section 10 shall govern any amounts
described in this section.
<PAGE>
11. STATEMENTS OF ACCOUNT.
Each Company will furnish each Participant with a statement
setting forth the value of such Participant's Account under that Company's
Equity-Based Plan and the value of each portion of the Account that relates to
amounts deferred under each subsection of section 3 as of the end of each
calendar year and all credits to and payments from such Account during such
year. Such statements will be furnished no later than 60 days after the end of
each calendar year.
12. RIGHTS IN ACCOUNTS.
Credits to Accounts and any shares purchased by the Companies
to help satisfy the contractual obligations with respect to such Accounts shall
remain part of the general assets of the Companies, shall at all times be the
sole and absolute property of the Companies and shall in no event be deemed to
constitute a fund, trust or collateral security for the payment of the deferred
compensation to which Participants are entitled from such Accounts. The right of
any Participant or his designated beneficiary or estate to receive future
payment of deferred compensation
<PAGE>
under the provisions of the Equity-Based Plans shall be an
unsecured claim against general assets of the Companies, if
any, available at the time of payment
13. NON-ASSIGNABILITY.
Neither any Participant, his designated beneficiary nor his
estate, nor any other person shall have the right to encumber, pledge, sell,
assign or transfer the right to receive payments under the Equity-Based Plans,
except by will or by the laws of descent and distribution. All such payments and
the right thereto are expressly declared to be non-assignable.
14. ADMINISTRATION.
The Equity-Based Plans shall be administered by one or more
officers of the Companies appointed by the Compensation and Nominating
Committees of the Boards (the "Administrator"). All Notices and amendments shall
be filed with the Administrator and the Administrator shall be responsible for
maintaining records of all Accounts and for furnishing the annual statements of
account provided for in section 11. The Administrator shall also have the
general
<PAGE>
authority to interpret, construe and implement provisions of
the Equity-Based Plans. Any determination by such
officer(s) shall be binding on the Participant and shall be
final and conclusive.
15. AMENDMENT OR TERMINATION.
The Equity-Based Plans may at any time be amended,
modified or terminated by the Board. However, no amendment,
modification or termination shall adversely affect any
Participant's rights in respect of amounts theretofore
credited to his Accounts.
16. EFFECTIVE DATE.
The Equity-Based Plans shall be effective as of January 1,
1993, and any amendments hereto shall be effective on the date of adoption
thereof by the Boards or as otherwise provided in such amendments. The Deferred
Compensation Plans in the form previously adopted by the Companies or the
arrangements of the Companies for deferred compensation in effect prior to the
establishment of the Equity-Based Plans, as the case may be, shall remain in
effect until January 1, 1993.
<PAGE>
Schedule I
FUNDS ADOPTING THE EQUITY-BASED PLANS
FOR NON-INTERESTED PERSON DIRECTORS
AND TRUSTEES OF LORD ABBETT FUNDS
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Mid-Cap Value Fund, Inc.
Lord Abbett Affiliated Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Series Fund, Inc.
Lord Abbett Global Fund, Inc.
Lord Abbett Securities Trust
Lord Abbett Investment Trust
Lord Abbett Research Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett Tax-Free Income Trust
Lord Abbett U.S. Government Securities Money
Market Fund, Inc.
<PAGE>
[For use by new Board members or Exhibit A
by Board members who are not
currently deferring compensation]
INDEPENDENT BOARD MEMBERS OF
LORD, ABBETT & CO.-SPONSORED FUNDS
NOTICE OF ELECTION
UNDER THE EQUITY-BASED PLANS
Effective for compensation that I earn as an Independent Board Member
of each Lord Abbett-sponsored Fund in the future after I become an Independent
Board Member or after the calendar year in which this Notice of Election is
filed with the Companies if I am already an Independent Board Member, I hereby
elect under section 6(a) and, if I am not already an Independent Board Member,
section 6(c) of the Equity-Based Plans, as follows:
A. OPTIONAL DEFERRALS PURSUANT TO SECTION
3(C) OF THE EQUITY-BASED PLANS.
1. AMOUNT DEFERRED:
(a) All compensation that I may defer
pursuant to section 3(c) of the Equity-
Based Plans
(b) $ per month (pro rated
among all Funds and series on the basis
of such compensation)
(c) Other:
2. PERIOD OF ELECTION:
<PAGE>
Subject to my further election to change or terminate this
election, my deferred election under item 1 shall continue:
(a) Until I cease to be an Independent Board
Member
(b) Until
[specify date or event]
3. TIME OF PAYMENT:
(a) The first business day of January
following the year in which I cease to
be an Independent Board Member
(b) The first business day of (not earlier than
January 1 of the second calendar year
following the calendar year in which this
Notice of Election is filed with the
Companies):
[specify month/year]
(c) The date of the following specific event
which is not within my control:
4. NUMBER OF PAYMENTS:
(a) Entire amount in a lump sum
(b) In annual installments
calculated as provided in section 9(a)
of the Equity-Based Plans
(c) With the consent of the Companies, as
follows:
B. MANDATORY DEFERRALS PURSUANT TO SECTION 3(B) OF THE EQUITY-BASED PLANS
(NEW INDEPENDENT BOARD MEMBERS ONLY).
<PAGE>
1. TIME OF PAYMENT:
(a) The first business day of January
following the year in which I cease
to be an Independent Board Member
(b) The later of the first business day of
January following the year in which I turn
65 and January of the second calendar year
following the calendar year in which this
Notice of Election is filed with the
Companies
(c) The later of the first business day of
January following the year in which I retire
from my principal occupation and January of
the second calendar year following the
calendar year in which this Notice of
Election is filed with the Companies
(d) The first business day of (which day cannot
be earlier than the earliest of (a), (b) and
(c) above):
[specify month/year]
2. NUMBER OF PAYMENTS:
(a) Entire amount in a lump sum
(b) In annual installments
calculated as provided in section 9(a)
of the Equity-Based Plans
(c) With the consent of the Companies, as
follows:
C. DESIGNATION OF BENEFICIARY:
<PAGE>
I hereby designate * as my beneficiary to receive all payments in the
event of my death before payments in full hereunder have been made. In
the event that the said beneficiary predeceases me, I hereby designate
* as beneficiary instead.
Benefits payable to my designated beneficiary shall be paid in
accordance with section 9(b) of the Equity- Based Plans, as follows:
(a) Entire amount in a lump sum
(b) In annual installments
calculated as provided in section 9(a) of the
Equity-Based Plans
(c) In the event I have elected pursuant to A4(b) or
B2(b) above to receive annual installments but such
installments have not been paid in full, such
installments shall be continued and paid to my
designated beneficiary
<PAGE>
(d) With the consent of the Companies, as
follows:
Name:
Date:
* If more than one beneficiary is to be designated, add a page listing the
beneficiaries and specify the percentage of each payment to be received by each
beneficiary.
<PAGE>
[For use on or prior to Exhibit B
November 29, 1996 by Board
members who wish to convert
their retirement benefit
to an equity-based benefit]
INDEPENDENT BOARD MEMBERS OF
LORD, ABBETT & CO.-SPONSORED FUNDS
NOTICE OF ELECTION TO RECEIVE BENEFITS
UNDER THE EQUITY-BASED PLANS IN
LIEU OF BENEFITS UNDER THE RETIREMENT PLAN
1. ELECTION TO RECEIVE BENEFITS
UNDER THE EQUITY-BASED PLANS:
____ I hereby elect (a) pursuant to section 3(a) of the
-
Equity-Based Plans and Article III of the
Retirement Plan to receive benefits under sections
3(a) and 3(b) of the Equity-Based Plans in lieu of
retirement benefits under the Retirement Plan and
(b) pursuant to sections 6(a) and 6(c) of the
-
Equity-Based Plans as follows with respect to such
benefits:
2. TIME OF PAYMENT:
(a) The first business day of January
following the year in which I cease to
be an Independent Board Member
(b) The later of the first business day of January
following the year in which I turn 65 and January 1,
1998
(c) The later of the first business day of January
following the year in which I retire from my
principal occupation and January 1, 1998
<PAGE>
____ (d) The first business day of (which day cannot
be earlier than the earliest of (a), (b) and
(c) above):
[specify month/year]
3. NUMBER OF PAYMENTS:
(a) Entire amount in a lump sum
(b) In annual installments
calculated as provided in section 9(a) of the
Equity-Based Plans
(c) With the consent of the Companies, as
follows:
4. DESIGNATION OF AND PAYMENTS TO BENEFICIARY:
I hereby designate * as my beneficiary to receive payments of the
benefits under Sections 3(a) and 3(b) of the Equity-Based Plans in the
event of my death before payments of such benefits have been made in
full. In the event that the said beneficiary predeceases me, I hereby
designate ___________________* as beneficiary instead.
Benefits payable to my designated beneficiary shall be paid in
accordance with section 9(b) of the Equity- Based Plans, as follows:
(a) Entire amount in a lump sum
(b) In annual installments
calculated as provided in section 9(a) of the
Equity-Based Plans
(c) In the event I have elected pursuant to 3(b) above to
receive annual installments but such installments
have not been paid in full, such
<PAGE>
installments shall be continued and paid to
my designated beneficiary
(d) With the consent of the Companies, as
follows:
Name:
Date: November , 1996
* If more than one beneficiary is to be designated, add a page listing the
beneficiaries and specify the percentage of each payment to be received by each
beneficiary.
<PAGE>
[For use by Board members Exhibit C
who wish to change a
prior election]
INDEPENDENT BOARD MEMBERS OF
LORD ABBETT & CO.-SPONSORED FUNDS
AMENDED NOTICE OF ELECTION
UNDER THE EQUITY-BASED PLANS
I hereby elect pursuant to section 7(b) or 7(c) and section 8 of the
Equity-Based Plans to change all prior Notices of Election I have filed with the
Companies as follows:
A. OPTIONAL DEFERRALS PURSUANT TO SECTION
3(C) OF THE EQUITY-BASED PLANS.
1. AMOUNT DEFERRED:
Effective for compensation earned as an Independent Board
Member of each Lord Abbett- sponsored Fund after the calendar
year in which this Amended Notice of Election is filed with
the Companies, I hereby elect to defer under section 3(c) of
the Equity-Based Plans:
___ (a) All compensation that I may defer
pursuant to section 3(c) of the Equity-
Based Plans
___ (b) $_____________ per month (pro rated
among all Funds and series on the basis
of such compensation)
___ (c) Other: ____________________________
___ (d) None
<PAGE>
2. PERIOD OF ELECTION:
Subject to my further election to change or terminate this
election, my deferred election under item 1 shall continue:
___ (a) Until I cease to be an Independent
Board Member
___ (b) Until _____________________________
[specify date or event]
Effective for all amounts deferred under section 3(c) of the
Equity-Based Plans, including any amounts previously deferred,
I hereby elect as follows:
3. TIME OF PAYMENT:
___ (a) The first business day of January
following the year in which I cease
to be an Independent Board Member
___ (b) The first business day of (which
day cannot be earlier than the
January 1 of the second calendar
year following the calendar year in
which this Amended Notice of
Election is filed with the
Companies):________________________
[specify month/year]
___ (c) The date of the following specific event
which is not within my control:
4. NUMBER OF PAYMENTS:
___ (a) Entire amount in a lump sum
<PAGE>
___ (b) In _____ annual installments calculated
as provided in section 9(a) of the
Equity-Based Plans
___ (c) With the consent of the Companies,
as follows:_______________________
---------------
B. MANDATORY DEFERRALS PURSUANT TO SECTION 3(B) OF THE EQUITY-BASED PLANS.
1. TIME OF PAYMENT:
(a) The first business day of January
following the year in which I cease to
be an Independent Board Member
(b) The later of the first business day of
January following the year in which I turn
65 and January of the second calendar year
following the calendar year in which this
Amended Notice of Election is filed with the
Companies
(c) The later of the first business day of
January following the year in which I retire
from my principal occupation and January of
the second calendar year following the
calendar year in which this Amended Notice
of Election is filed with the Companies
(d) The first business day of (which day cannot
be earlier than the earliest of (a), (b) and
(c) above):
[specify month/year]
2. NUMBER OF PAYMENTs:
(a) Entire amount in a lump sum
<PAGE>
(b) In annual installments
calculated as provided in section 9(a)
of the Equity-Based Plans
(c) With the consent of the Companies, as
follows:
C. DESIGNATION OF BENEFICIARY:
I hereby revoke any prior beneficiary designation I may have made under
the Equity-Based Plans, and I hereby designate ___________________* as
my beneficiary to receive payments in the event of my death before
payments in full hereunder have been made. In the event that the said
beneficiary predeceases me, I hereby designate ____________________* as
beneficiary instead.
Benefits payable to my designated beneficiary shall be paid in
accordance with section 9(b) of the Equity- Based Plans, as follows:
(a) Entire amount in a lump sum
(b) In annual installments
calculated as provided in section 9(a) of the
Equity-Based Plans
(c) In the event I have elected pursuant to A4(b) or
B2(b) above to receive annual installments but such
installments have not been paid in full, such
installments shall be continued and paid to my
designated beneficiary
(d) With the consent of the Companies, as
follows:
I understand that this Amended Notice of Election shall be valid with
respect to changes in the timing or number of payments only if it is filed with
the Company (i) prior to
<PAGE>
the calendar year in which I cease to be an Independent Board Member, (ii) by a
date such that one full calendar year elapses between the filing of this Amended
Notice with the Companies and the date my distribution would otherwise have
commenced under my prior Notice of Election and (iii) by a date such that one
full calendar year elapses between the filing of this Amended Notice with the
Companies and the date my distribution will commence under this Amended Notice
of Election. My prior Notice of Election shall be effective to the extent this
Amended Notice of Election is invalid and to the extent no entry is made under
any of the above items.
--------------------------
Name:
Date: _____________________
* If more than one beneficiary is to be designated, add a page listing the
beneficiaries and specify the percentage of each payment to be received by each
beneficiary.
CONSENT OF INDEPENDENT AUDITORS
Lord Abbett Securities Trust:
We consent to the incorporation by reference in Post-Effective Amendment No. 19
to Registration Statement No. 33-58846 our report dated December 2, 1997
appearing in the annual report to shareholders and to the reference to us under
the caption "Financial Highlights" in the Prospectus and to the references to us
under the captions "Investment Advisory and Other Services" and "Financial
Statements" in the Statement of Additional Information, both of which are part
of such Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
New York, New York
February 25, 1998
Lord Abbett Securities Trust Growth & Income Series
Post Effective Amendment No. 19 on form N-1A
Results of a $1,000 investment reflecting the maximum sales charge and the
reinvestment of all distributions.
PERIOD ENDING OCTOBER 31, 1997
P * (1 + T)N = ERV
LIFE OF FUND* ONE YEAR
P = 1,000 P = 1,000
N = 3.8274 N = 1
ERV = 1,894 ERV = 1,262
T = Average annual total return
1,000 * (1 + T)3.8274 = 1,894 1,000 * (1 + T)1 = 1,262
(1 + T)3.8274 = 1,894 (1 + T)1 = 1,262
----- -----
1,000 1,000
T = (1,894)0.2613 T = 1,262
------- - 1 ----- - 1
(1,000) 1,000
T = 18.16% T = 26.20%
* The Trust's Growth & Income Series(Class C share)commenced operations on
1/3/94.
<PAGE>
Lord Abbett Securities Trust Growth & Income Series
Post Effective Amendment No. 19 on form N-1A
Results of a $1,000 investment reflecting the maximum sales charge and the
reinvestment of all distributions.
PERIOD ENDING OCTOBER 31, 1997
P * (1 + T) = ERV
LIFE OF FUND* ONE YEAR
P = 1,000 P = 1,000
ERV = 1,339 ERV = 1,196
T = average annual total return T = total return
N = 1.296 N = 1
1,000 * (1 + T)1.296 = 1,339 1,000 * (1 + T)1 = 1,196
(1 + T).7717 = 1,339 (1 + T)1 = 1,196
----- -----
1,000 1,000
T = (1,339).7717 T = 1,196
------- - 1 ----- - 1
(1,000) 1,000
T = 25.27% T = 19.60%
* The Trust's Growth & Income Series(Class A share)commenced operations on
7/15/96.
<PAGE>
Lord Abbett Securities Trust International Series
Post Effective Amendment No. 19 on form N-1A
Results of a $1,000 investment reflecting the maximum sales charge and the
reinvestment of all distributions.
PERIOD ENDING OCTOBER 31, 1997
P * (1 + T) = ERV
LIFE OF FUND*
P = 1,000
ERV = 1,086
T = total return
1,000 * (1 + T) = 1,086
(1 + T) = 1,086
1,000
T = (1,086)
--------- - 1
(1,000)
T = 8.60%
* The Trust's International Series (Class A share)commenced operations on
12/13/96.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000898031
<NAME> LORD ABBETT SECURITIES TRUST
<SERIES>
<NUMBER> 011
<NAME> GROWTH & INCOME SERIES - CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 99138168
<INVESTMENTS-AT-VALUE> 139289726
<RECEIVABLES> 2421872
<ASSETS-OTHER> 4501586
<OTHER-ITEMS-ASSETS> 373
<TOTAL-ASSETS> 146213557
<PAYABLE-FOR-SECURITIES> 932540
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2289342
<TOTAL-LIABILITIES> 3221882
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 93129578
<SHARES-COMMON-STOCK> 6698803
<SHARES-COMMON-PRIOR> 6669952
<ACCUMULATED-NII-CURRENT> 887952
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9550322
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 40151558
<NET-ASSETS> 142991675
<DIVIDEND-INCOME> 1256518
<INTEREST-INCOME> 80810
<OTHER-INCOME> 0
<EXPENSES-NET> 705969
<NET-INVESTMENT-INCOME> 631359
<REALIZED-GAINS-CURRENT> 9523336
<APPREC-INCREASE-CURRENT> 19515134
<NET-CHANGE-FROM-OPS> 29977987
<EQUALIZATION> (7673)
<DISTRIBUTIONS-OF-INCOME> 660996
<DISTRIBUTIONS-OF-GAINS> 501039
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 962023
<NUMBER-OF-SHARES-REDEEMED> 1067517
<SHARES-REINVESTED> 134345
<NET-CHANGE-IN-ASSETS> 29029928
<ACCUMULATED-NII-PRIOR> 925646
<ACCUMULATED-GAINS-PRIOR> 1229734
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 410245
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 705969
<AVERAGE-NET-ASSETS> 54723349
<PER-SHARE-NAV-BEGIN> 7.09
<PER-SHARE-NII> .093
<PER-SHARE-GAIN-APPREC> 1.781
<PER-SHARE-DIVIDEND> .099
<PER-SHARE-DISTRIBUTIONS> .075
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.79
<EXPENSE-RATIO> 1.29
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000898031
<NAME> LORD ABBETT SECURITIES TRUST
<SERIES>
<NUMBER> 012
<NAME> GROWTH & INCOME SERIES - CLASS B
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> JUN-05-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 99138168
<INVESTMENTS-AT-VALUE> 139289726
<RECEIVABLES> 2421872
<ASSETS-OTHER> 4501586
<OTHER-ITEMS-ASSETS> 373
<TOTAL-ASSETS> 146213557
<PAYABLE-FOR-SECURITIES> 932540
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2289342
<TOTAL-LIABILITIES> 3221882
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 93129578
<SHARES-COMMON-STOCK> 37720
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 22
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9550322
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 40151558
<NET-ASSETS> 142991675
<DIVIDEND-INCOME> 928
<INTEREST-INCOME> 374
<OTHER-INCOME> 0
<EXPENSES-NET> 1280
<NET-INVESTMENT-INCOME> 22
<REALIZED-GAINS-CURRENT> 9523336
<APPREC-INCREASE-CURRENT> 19515134
<NET-CHANGE-FROM-OPS> 29977987
<EQUALIZATION> (7673)
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 38206
<NUMBER-OF-SHARES-REDEEMED> 486
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 29029928
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 465
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1280
<AVERAGE-NET-ASSETS> 149044
<PER-SHARE-NAV-BEGIN> 8.20
<PER-SHARE-NII> .001
<PER-SHARE-GAIN-APPREC> .599
<PER-SHARE-DIVIDEND> .000
<PER-SHARE-DISTRIBUTIONS> .000
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.80
<EXPENSE-RATIO> .86
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000898031
<NAME> LORD ABBETT SECURITIES TRUST
<SERIES>
<NUMBER> 013
<NAME> GROWTH & INCOME SERIES - CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 99138168
<INVESTMENTS-AT-VALUE> 139289726
<RECEIVABLES> 2421872
<ASSETS-OTHER> 4501586
<OTHER-ITEMS-ASSETS> 373
<TOTAL-ASSETS> 146213557
<PAYABLE-FOR-SECURITIES> 932540
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2289342
<TOTAL-LIABILITIES> 3221882
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 93129578
<SHARES-COMMON-STOCK> 9521881
<SHARES-COMMON-PRIOR> 9408606
<ACCUMULATED-NII-CURRENT> 187999
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9550322
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 40151558
<NET-ASSETS> 142991675
<DIVIDEND-INCOME> 1809784
<INTEREST-INCOME> 106561
<OTHER-INCOME> 0
<EXPENSES-NET> 1608209
<NET-INVESTMENT-INCOME> 308136
<REALIZED-GAINS-CURRENT> 9523336
<APPREC-INCREASE-CURRENT> 19515134
<NET-CHANGE-FROM-OPS> 29977987
<EQUALIZATION> (7673)
<DISTRIBUTIONS-OF-INCOME> 351430
<DISTRIBUTIONS-OF-GAINS> 701709
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1695886
<NUMBER-OF-SHARES-REDEEMED> 1713554
<SHARES-REINVESTED> 130943
<NET-CHANGE-IN-ASSETS> 29029928
<ACCUMULATED-NII-PRIOR> 230908
<ACCUMULATED-GAINS-PRIOR> 1229734
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 588778
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1608209
<AVERAGE-NET-ASSETS> 78503767
<PER-SHARE-NAV-BEGIN> 7.09
<PER-SHARE-NII> .032
<PER-SHARE-GAIN-APPREC> 1.790
<PER-SHARE-DIVIDEND> .037
<PER-SHARE-DISTRIBUTIONS> .075
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.80
<EXPENSE-RATIO> 2.05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000898031
<NAME> LORD ABBETT SECURITIES TRUST
<SERIES>
<NUMBER> 021
<NAME> INTERNATIONAL SERIES - CLASS A
<S> <C>
<PERIOD-TYPE> 11-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> DEC-13-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 32055557
<INVESTMENTS-AT-VALUE> 34740834
<RECEIVABLES> 286175
<ASSETS-OTHER> 2549782
<OTHER-ITEMS-ASSETS> 379
<TOTAL-ASSETS> 37577170
<PAYABLE-FOR-SECURITIES> 104161
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 138510
<TOTAL-LIABILITIES> 242671
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 34942005
<SHARES-COMMON-STOCK> 3015007
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 216089
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (498854)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2685277
<NET-ASSETS> 37334499
<DIVIDEND-INCOME> 190812
<INTEREST-INCOME> 103245
<OTHER-INCOME> 0
<EXPENSES-NET> 220918
<NET-INVESTMENT-INCOME> 73139
<REALIZED-GAINS-CURRENT> (498854)
<APPREC-INCREASE-CURRENT> 2685278
<NET-CHANGE-FROM-OPS> 2248760
<EQUALIZATION> 143734
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3287160
<NUMBER-OF-SHARES-REDEEMED> 272153
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 37334499
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 123231
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 220918
<AVERAGE-NET-ASSETS> 17924524
<PER-SHARE-NAV-BEGIN> 9.42
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> 1.37
<PER-SHARE-DIVIDEND> .00
<PER-SHARE-DISTRIBUTIONS> .00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.86
<EXPENSE-RATIO> 1.23
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000898031
<NAME> LORD ABBETT SECURITIES TRUST
<SERIES>
<NUMBER> 022
<NAME> INTERNATIONAL SERIES - CLASS B
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> JUN-02-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 32055557
<INVESTMENTS-AT-VALUE> 34740834
<RECEIVABLES> 286175
<ASSETS-OTHER> 2549782
<OTHER-ITEMS-ASSETS> 379
<TOTAL-ASSETS> 37577170
<PAYABLE-FOR-SECURITIES> 104161
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 138510
<TOTAL-LIABILITIES> 242671
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 34942005
<SHARES-COMMON-STOCK> 152446
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (3507)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (498854)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2685277
<NET-ASSETS> 37334499
<DIVIDEND-INCOME> 2180
<INTEREST-INCOME> 1189
<OTHER-INCOME> 0
<EXPENSES-NET> 6873
<NET-INVESTMENT-INCOME> (3504)
<REALIZED-GAINS-CURRENT> (498854)
<APPREC-INCREASE-CURRENT> 2685278
<NET-CHANGE-FROM-OPS> 2248760
<EQUALIZATION> 143734
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 159588
<NUMBER-OF-SHARES-REDEEMED> 7142
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 37334499
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2474
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6873
<AVERAGE-NET-ASSETS> 791685
<PER-SHARE-NAV-BEGIN> 10.26
<PER-SHARE-NII> (03)
<PER-SHARE-GAIN-APPREC> .60
<PER-SHARE-DIVIDEND> .00
<PER-SHARE-DISTRIBUTIONS> .00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.83
<EXPENSE-RATIO> .87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000898031
<NAME> LORD ABBETT SECURITIES TRUST
<SERIES>
<NUMBER> 023
<NAME> INTERNATIONAL SERIES - CLASS C
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> JUN-02-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 32055557
<INVESTMENTS-AT-VALUE> 34740834
<RECEIVABLES> 286175
<ASSETS-OTHER> 2549782
<OTHER-ITEMS-ASSETS> 379
<TOTAL-ASSETS> 37577170
<PAYABLE-FOR-SECURITIES> 104161
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 138510
<TOTAL-LIABILITIES> 242671
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 34942005
<SHARES-COMMON-STOCK> 270455
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 37434
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (498854)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2685277
<NET-ASSETS> 37334499
<DIVIDEND-INCOME> 4120
<INTEREST-INCOME> 2513
<OTHER-INCOME> 0
<EXPENSES-NET> 13933
<NET-INVESTMENT-INCOME> (7300)
<REALIZED-GAINS-CURRENT> (498854)
<APPREC-INCREASE-CURRENT> 2685278
<NET-CHANGE-FROM-OPS> 2248760
<EQUALIZATION> 143734
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 295740
<NUMBER-OF-SHARES-REDEEMED> 25285
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 37334499
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5000
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13933
<AVERAGE-NET-ASSETS> 1600135
<PER-SHARE-NAV-BEGIN> 10.26
<PER-SHARE-NII> (.03)
<PER-SHARE-GAIN-APPREC> .60
<PER-SHARE-DIVIDEND> .00
<PER-SHARE-DISTRIBUTIONS> .00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.83
<EXPENSE-RATIO> .87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
