PRELIMINARY PROXY
LORD ABBETT SECURITIES TRUST
A Lord Abbett Managed Investment Company
The GM Building 767 Fifth Avenue New York, NY 10153-0203 (212) 848-1800
Dear Shareholder:
You are cordially invited to attend the Special Meeting of
Shareholders of the International Series of Lord Abbett Securities Trust
scheduled to be held on September 15, 1998, at 11:00 a.m., at 875 Third Ave.,
New York, New York. Your Board of Trustees looks
forward to greeting those shareholders who are able to attend.
At the meeting, the shareholders of the International Series will be asked
to vote on a proposed Sub-Investment Management Agreem ent between Lord, Abbett
& Co. and Fuji Investment Management Co. (Europe) Ltd., in anticipation of Lord,
Abbett & Co.'s acquisition of a 25% or greater ownership interest in Fuji
Investment Management Co. (Europe) Ltd.
The proposal is described fully in the enclosed proxy
statement. I encourage you to review the proxy statement for all the details
regarding the meeting agenda.
Your Board of Trustees believes this proposal is in the best
interest of the Series' shareholders and unanimously recommends a vote "for" the
proposal. No matter how many shares you own, it is important that they be
represented and voted. Accordingly, please sign, date and mail the enclosed
proxy card in the postage paid return envelope.
Your prompt response will help save the Series the expense of
additional solicitation.
Sincerely,
Robert S. Dow
Chairman of the Board
July 7, 1998
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LORD ABBETT SECURITIES TRUST
767 Fifth Avenue
New York, New York 10153
NOTICE OF SPECIAL MEETING OF INTERNATIONAL SERIES' SHAREHOLDERS
TO BE HELD
September 15, 1998
PROXY STATEMENT
PLEASE SIGN AND MAIL THE PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE, EVEN
IF YOU OWN ONLY A FEW SHARES. YOUR PROMPT RETURN OF THE PROXY MAY SAVE THE
INTERNATIONAL SERIES THE EXPENSE OF FURTHER SOLICITATIONS TO ENSURE A QUORUM
AT THIS MEETING.
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LORD ABBETT SECURITIES TRUST
INTERNATIONAL SERIES
767 Fifth Avenue
New York, New York 10153
Notice of Special Meeting of International Series' Shareholders
To Be Held September 15, 1998 July 7, 1998
Notice is given hereby of a special meeting of the shareholders of the
International Series (the "Series") of Lord Abbett Securities Trust (the
"Fund"). The meeting will be held at the offices of Lord, Abbett & Co. ("Lord
Abbett"), on the 23rd floor, 875 Third Avenue,
New York, New York, on Tuesday, September 15, 1998, at 11:00 a.m., for the
following purpose and to transact such other business as may properly come
before the meeting and any adjournments thereof.
ITEM 1. To approve or disapprove a new Sub-Investment Management Agreement
with Fuji Investment Management Co. (Europe) Ltd. (the "Sub-Adviser"), in
anticipation of Lord, Abbett & Co. acquisition of a 25% or greater ownership
interest in the Sub-Adviser, as described in the proxy statement.
By order of the Board of Trustees
Paul A. Hilstad
Vice President and Secretary
The Board of Trustees has fixed the close of business on June 24, 1998 as the
record date for determination of shareholders of the International Series
entitled to notice of and to vote at the meeting. Shareholders are entitled to
one vote for each share held. As of June 24, 1998, there were _______ shares of
the International Series issued and outstanding.
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD.
SIGN, DATE AND RETURN IT IN THE ENVELOPE PROVIDED.
TO SAVE THE COST OF ADDITIONAL SOLICITATIONS, PLEASE MAIL YOUR PROXY PROMPTLY.
<PAGE>
LORD ABBETT SECURITIES TRUST
767 Fifth Avenue
New York, New York 10153
July 7, 1998
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Trustees of Lord Abbett Securities
Trust, a diversified, open-end management investment company organized as a
Delaware business trust (the "Fund"), for use at a special meeting of
shareholders of the International Series (the "Series") of the Fund to be held
at 11:00 a.m. on Tuesday, September 15, 1998, on the 23rd floor, 875 Third
Avenue, New York, New York, and at any adjournments thereof. This proxy
statement and the enclosed proxy card are first being mailed to shareholders on
or about July 7, 1998.
At the close of business on June 24, 1998 (the "Record Date"),
there were issued and outstanding ________ shares of the Series. Only
shareholders of record at the close of business on the Record Date are entitled
to notice of, and to vote at, the special meeting or any adjournment thereof.
Proxies will be solicited by mail. Additional solicitations may be made by
telephone, facsimile or personal contact by officers or employees of Lord Abbett
and its affiliates. The Fund also may request brokerage houses, custodians,
nominees, and fiduciaries who are shareholders of record to forward proxy
materials to beneficial owners. The cost of the solicitation initially will be
borne by Lord, Abbett & Co., the Investment Manager of the Fund ("Lord Abbett").
Shareholders are entitled to one vote for each full share, and
a proportionate vote for each fractional share, of the Series held as of the
Record Date. Under Delaware law, shares owned by two or more persons (whether as
joint tenants, co-fiduciaries or otherwise) will be voted as follows, unless a
written instrument or court order providing to the contrary has been filed with
the Secretary of the Fund: (1) if only one votes, that vote binds all; (2) if
more than one votes, the vote of the majority binds all; and (3) if more than
one votes and the vote is evenly divided, the vote will be cast proportionately.
If the enclosed form of proxy is properly executed and returned in time to be
voted at the meeting, the proxies named therein will vote the shares represented
by the proxy in accordance with the instructions marked thereon. Unmarked
proxies will be voted FOR the item described in this Proxy Statement and any
other matters as deemed appropriate. A proxy may be revoked by the signer at any
time at or before the meeting by written notice to the Fund, by execution of a
later-dated proxy or by voting in person at the meeting.
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1. PROPOSAL TO APPROVE A NEW SUB-INVESTMENT MANAGEMENT AGREEMENT IN
ANTICIPATION OF LORD ABBETT'S ACQUISITION OF A 25% OR GREATER STAKE IN THE
SUB-ADVISER
Lord Abbett serves as the Fund's investment manager and is
responsible for providing the Fund with a continuous investment program pursuant
to an Investment Management Contract dated May 19, 1993 (the "Management
Contract") and an addendum thereto relating to the Series dated ___, 1996. The
Management Contract was most recently approved by the shareholders of the Fund
at an annual meeting held on _____, 19__; the addendum was approved by the
initial shareholder of the Series on _____, 1996.
Fuji Investment Management Co. (Europe) Ltd. ("the Sub-Adviser") serves as
the Fund's sub-investment manager pursuant to a Sub-Investment Management
Agreement and between Lord Abbett and the Sub-Adviser dated ____, 1996 (the
"Current Sub-Investment Management Agreement").
The Sub-Adviser is an affiliate of Fuji Bank Limited of Tokyo, Japan ("Fuji
Bank"). Fuji Bank owns 40% of the outstanding voting stock of the Sub-Adviser,
and an affiliate of Fuji Bank, Fuji Investment Management Co. (Tokyo)("FIMCO
Tokyo"), owns approximately 51% of the outstanding voting stock. Lord Abbett
indirectly owns a minor percentage of the outstanding voting stock, through Fuji
Bank, but is negotiating with Fuji Bank to increase its ownership interest in
the Sub-Adviser. Lord Abbett anticipates increasing its ownership interest in
the Sub-Adviser by purchasing from the Sub-Adviser shares of its voting common
stock. Although the terms of the transaction have not been definitively
resolved, Lord Abbett expects to own at least 25% of the Sub-Adviser's
outstanding voting stock as a result of the transaction, which it now
anticipates will take place in several stages. Under the 1940 Act, this
transaction may result in an assignment of the Current Sub-Investment Management
Agreement, resulting in its termination.
At a meeting of the Trustees held on June 17, 1998, the Trustees, including all
of the Independent Trustees, unanimously approved a new Sub-Investment
Management Agreement (the "New Sub-Investment Management Agreement") by and
between Lord Abbett and the Sub-Adviser, effective upon the termination of the
Current Sub-Investment Management Agreement.
Christopher Taylor, Deputy Managing Director of the Sub-Adviser, serves as
portfolio manager for the Series. He has been with the Sub-Adviser and its
predecessor since 1987 and has 15 years of investment experience. The names and
addresses of all of the officers and directors of the Sub-Adviser are set forth
below.
Kunitake Nomura Chairman and Director
President, FIMCO Tokyo
Tokyo, Japan
Hiroaki Kobayashi Managing Director*
London, UK
Chris Taylor Deputy Managing Director*
Head of Equity Fund Management and
Research
London, UK
Terunobu Toriumi Director
_______, FIMCO Tokyo
Tokyo, Japan
Osamu Kita Director
_______, FIMCO Tokyo
London, UK
Magane Ide Director
________, FIMCO Tokyo
Tokyo, Japan
Hideshi Iwai Director
________, Fuji Bank
Tokyo, Japan
Junji Miyamoto Director
________, Fuji International
London, UK
Alan Howell Associate Director, Compliance Officer*
Fuji International
London, UK
Stuart Wigfall Associate Director, Head of Bonds and Treasury*
Fuji International
London, UK
Yoshitaka Yoshino Senior Manager, Fund Manager*
Fuji International
London, UK
Atul Sangani Manager, Company Accounting, Fund Accounting*
Fuji International
London, UK
Janice Laugharne Manager, Settlement*
Fuji International
London, UK
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Warren Goillau Manager, Fund Manager*
Fuji International
London, UK
* Principal Occupation
Under the New Sub-Investment Management Agreement, the Sub-Adviser provides the
Fund with advice and recommendations regarding the Fund's investments. The
Sub-Adviser also provides the Fund on a continuous basis with economic and
financial information, as well as other research and assistance.
A form of the New Sub-Investment Management Agreement is attached to this Proxy
Statement as Exhibit A. The material terms of the New Sub-Investment Management
Agreement are described below, although the description below is qualified by
reference to Exhibit A.
MATERIAL PROVISIONS OF THE SUB-INVESTMENT MANAGEMENT AGREEMENT
The New Sub-Investment Management Agreement is substantially identical to the
Current Sub-Investment Management Agreement.
A. Compensation
The New Sub-Investment Management Agreement will continue to provide that the
Sub-Adviser is required to pay all expenses that it incurs in connection with
the performance of its duties under the Agreement. The Sub-Investment Management
Agreement also will continue to provide that Lord Abbett, not the Fund, shall
pay the sub-advisory fees.
Pursuant to the New Sub-Investment Management Agreement, Lord Abbett will
continue to pay the Sub-Adviser a fee at the annual rate of 0.375% of the
average daily net assets of the Fund. Lord Abbett will pay this fee to the
Sub-Adviser within ten business days of receipt by Lord Abbett of the advisory
fee payable to it by the Series under its Management Contract.
The Sub-Adviser also serves as sub-adviser to the Equity Series of the Lord
Abbett Global Fund ("Equity Series"), at the same fee rate as in the New
Sub-Investment Management Agreement. The following table compares the
sub-advisory fees and sizes of the International Series and the Equity Series.
- ---------------------------------- -------------------------------
Fund Sub-Advisory Fee Rate Total Assets as of May 31, 1998
- ---- --------------------- --------------------------------
International .375 of 1% of average daily $114,425,180
Series net assets
Equity Series .375 of 1% of average daily $84,196,747
net assets
- ---------------------------------- -------------------------------
<PAGE>
B. Term
The New Sub-Investment Management Agreement will take when and if approved by
shareholders of the Series and will remain in effect until September 15, 2000.
Thereafter, the New Sub-Investment Management Agreement will continue in effect
from year to year subject to the annual approval of its continuance as described
below under "Termination, Continuance and Amendment."
C. Termination, Continuance and Amendment
Except as described above, the New Sub-Investment Management Agreement will
continue from year to year subject to annual approval of its continuance by a
majority of the Independent Trustees, cast in person at a meeting called for the
purpose of voting on such approval, and annual approval by either (a) the
Trustees of the Fund, or (b) a majority of the Fund's outstanding voting
securities, as defined in the 1940 Act. The New Sub-Investment Management
Agreement will be terminable at any time without penalty on 60 days' written
notice by the Trustees, by a vote of a majority of the Fund's outstanding voting
securities, or by Lord Abbett or the Sub-Adviser, as the case may be. The New
Sub-Investment Management Agreement will terminate automatically in the event of
its assignment or in the event that Lord Abbett ceases to act as the Fund's
investment adviser.
D. Limitation of Liability
The New Sub-Investment Management Agreement will continue to provide that the
Sub-Adviser will not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund or Lord Abbett in connection with the matters
to which the Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Sub-Adviser in the
performance of its duties or from reckless disregard by the Sub-Adviser of its
obligations and duties under the Agreement.
For the fiscal year ended October 31, 1997, the Series paid fees of $127,715
to Lord Abbett for its investment management services and fees of $54,071
to Lord Abbett Distributor LLC, a subsidiary of Lord Abbett, for its services
under the Series' plan of distribution.
<PAGE>
E. Analysis of Proposal and Review of Trustees
The Trustees have determined that the terms of the New Sub-Investment Management
Agreement are fair and reasonable. In approving the New Sub-Investment
Management Agreement and recommending its approval by the shareholders of the
Series, the Trustees, including the Independent Trustees, considering the best
interest of the shareholders of the Fund and the Series, took into account all
factors they deemed relevant. These factors and the Trustees' related analysis
are described below.
Throughout the review process, the Independent Trustees were advised by counsel
to the Fund, who was not counsel to Lord Abbett or the Sub-Adviser.
F. Trustees' Evaluation and Recommendation
The Trustees, including all of the Independent Trustees, by a vote cast at a
meeting held on June 17, 1998, unanimously voted to approve, and to recommend to
the shareholders of the Series that they vote to approve, the New Sub-Investment
Management Agreement. If the New Sub-Investment Management Agreement is not
approved by the shareholders of the Series, the Trustees would consider what
additional action, if any, is appropriate.
The Trustees, in considering whether to approve and recommend to shareholders
that they vote to approve the New Sub-Investment Management Agreement,
considered the terms of the New Sub-Investment Management Agreement, the quality
and experience of the Sub-Adviser's management, and the investment performance
of the accounts managed by the Sub-Adviser. Although the Trustees considered all
of these factors, they noted in particular the experience of Mr. Taylor, the
historical performance of the International Series, which the Sub-Adviser has
advised since 1996, and the fact that the terms of the New Sub-Investment
Management Agreement are substantially identical to those of the Current
Sub-Investment Management Agreement.
The Board of Trustees recommends that shareholders vote in favor of the proposed
sub-advisory agreement.
G. Required Vote
Approval of this proposal requires the affirmative vote of a "majority" of the
Series' outstanding voting securities. A majority means the lesser of (i) 67% or
more of the Series' shares present at the Meeting if the holders of more than
50% of the Series' outstanding shares are present or represented by proxy at the
Meeting or (ii) more than 50% of the Series' outstanding shares (a "1940 Act
Majority Shareholder Vote").
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2. OTHER INFORMATION
Management is not aware of any matters to come before the
meeting other than those set forth in the notice. If any such other matters do
come before the meeting, the individuals named as proxies will vote, act, and
consent with respect thereto in accordance with their best judgment.
a. TIMELINESS OF SHAREHOLDER PROPOSALS.
Any shareholder proposals to be presented for action at the
Fund's next shareholder meeting pursuant to the provisions of Rule 14a-8 under
the Securities Exchange Act of 1934, as amended, must be received at the Fund's
principal executive offices within a reasonable time in advance of the date
solicitation is made for such meeting. The Fund does not intend to hold another
annual or special meeting of shareholders unless required to do so by the Act.
b. INVESTMENT ADVISER AND UNDERWRITER.
Lord, Abbett & Co., 767 Fifth Avenue, New York, New York,
10153, ("Lord Abbett") acts as investment adviser and Lord Abbett Distributor
LLC, a subsidiary of Lord Abbett located at the same address, acts as principal
underwriter with respect to the Fund.
c. ANNUAL REPORT AVAILABLE UPON REQUEST.
The Fund will furnish, without charge, a copy of the Fund's
most recent annual report and the most recent semi-annual report succeeding the
annual report, if any, to a shareholder upon request. A shareholder may obtain
such report(s) by writing to the Fund or by calling 800-874-3733.
LORD ABBETT SECURITIES TRUST
Paul A. Hilstad
Vice President and Secretary
<PAGE>
LORD ABBETT SECURITIES TRUST
LORD ABBETT INTERNATIONAL SERIES
SPECIAL MEETING OF SHAREHOLDERS
September 15, 1998
875 Third Avenue
New York, New York
The undersigned hereby appoints ROBERT S. DOW and PAUL A. HILSTAD and
each of them proxies, with full power of substitution, to vote (according to the
number of votes which the undersigned would be entitled to cast if then
personally present) at the special meeting of shareholders of the International
Series (the "Series") of LORD ABBETT SECURITIES TRUST on September 15, 1998
including all adjournments, as specified below, and in their discretion upon
such other business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSAL 1.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
WILL BE CAST FOR THE PROPOSAL LISTED BELOW.
1. For |_| Against |_| Abstain |_| To approve or
disapprove a new sub-advisory agreement with Fuji
Investment Management Co. (Europe), Ltd. in
anticipation of Lord, Abbett & Co.'s acquisition of
a 25% or greater ownership interest
in the Sub-Adviser, as described in the proxy
statement.
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT SECURITIES TRUST
INTERNATIONAL SERIES
PLEASE SIGN, DATE AND MAIL THIS
PROXY IN THE POSTAGE PAID RETURN
ENVELOPE PROVIDED.
<PAGE>
For information as to the voting of stock
registered in more than one name, see page 1
of the proxy statement. When signing the
proxy as attorney, executor, administrator,
Trustee or guardian, please indicate the
capacity in which you are acting. Only
authorized officers should sign for
corporations.
Date:....................................
Signature(s) of Shareholder(s) as shown at left
..........................................
..........................................
(Please read other side)
<PAGE>
EXHIBIT A
Fuji Investment Management Co. (Europe) Ltd. December __, 1996
River Plate House
7-11 Finsbury Circus
London EC2M 7HJ
Sub-Investment Management Agreement
Dear Sirs:
Lord Abbett Securities Trust (the "Fund") has been organized
as a business Trust under the laws of the State of Delaware to engage in the
business of an investment company. Its Trustees have selected Lord Abbett & Co.
(the "Adviser") to provide overall investment advice and management for the
Fund, and to provide certain other services, under the terms and conditions
provided in the Management Agreement and Addemdum thereto, dated November 1,
1996, between the Fund and the Adviser (the "Management Agreement"). The Adviser
and the Trustees of the Fund have selected Fuji Investment Management Co.
(Europe) Ltd. (the "Sub-Adviser") to provide the Adviser and the International
Series of the Fund (the "Series") with the advice and services set forth below
with respect to such portion of the Fund's assets as the Adviser, in
consultation with the Sub-Adviser, shall allocate, pursuant to Section 3 of this
Agreement, to investments in countries other than the United States (the
"Foreign Assets") and the Sub-Adviser is willing to provide such advice and
services, subject to the review of the Trustees and overall supervision of the
Adviser, under the terms and conditions hereinafter set forth. The Sub-Adviser
hereby represents and warrants that it is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended. Accordingly, the Adviser
agrees with the Sub-Adviser as follows:
1. Delivery of Documents. The Fund has furnished the Sub-Adviser with
copies, properly certified or otherwise authenticated, of each of the following:
(a) Declaration and Agreement of the Fund, dated
February 26, 1993 (the "Articles");
(b) By-Laws of the Fund as in effect hereof;
(c) resolutions of the Trustees of the Fund selecting the
Sub-Adviser as sub-adviser to the Adviser and
approving the form of this Agreement;
(d) resolutions of the Trustees of the Fund selecting the
Adviser as investment adviser to the Fund and
approving the form of the Adviser's Management
Agreement with the Fund;
(e) the Adviser's Management Agreement with the Fund;
2
<PAGE>
(f) commitments, limitations and undertakings made by the
Series to state "blue sky" authorities for the
purpose of qualifying shares of the Series for sale
in such states;
(g) the Adviser's Code of Ethics as currently in effect.
The Fund will furnish the Sub-Adviser from time to time with copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.
2. Investment Services. The Sub-Adviser will use its best efforts to
provide to the Adviser for the Series a continuing and suitable investment
program with respect to investments in Foreign Assets, consistent with the
investment policies, objectives and restrictions of the Series. In the
performance of the Sub-Adviser's duties hereunder, subject always (i) to the
provisions contained in the documents delivered to the Sub-Adviser pursuant to
Section 1, as each of the same may from time to time be amended or supplemented,
and (ii) to the limitations set forth in the registration statement of the Fund
as in effect from time to time under the Securities Act of 1933, as amended, the
Sub-Adviser will, at its own expense with respect to the Foreign Assets:
(a) furnish the Adviser with advice and recommendations with
respect to the Foreign Assets, consistent with the investment
policies, objectives and restrictions of the Series, including
advice on the selection and allocation of investments among
foreign securities markets and among foreign equity and debt
securities;
(b) subject to prior consultation with the Adviser, except as such
consultation shall be waived or limited by the Adviser,
determine which portfolio securities of the Series consisting
of Foreign Assets should be purchased, held or disposed of and
what portion of such assets, if any, should be held in cash or
equivalents denominated in United States dollars or foreign
currencies;
(c) subject to prior consultation with the Adviser, except as such
consultation shall be waived or limited by the Adviser, make
decisions for the Series respecting foreign currency matters
having regard to foreign exchange controls, if any, including
determinations with respect to entering into forward foreign
exchange contracts;
(d) subject to prior consultation with the Adviser, except as such
consultation shall be waived or limited by the Adviser, make
determinations as to the manner in which voting rights,
subscription rights, rights to consent to corporate action and
any other rights pertaining to the Series' Foreign Assets
shall be exercised;
(e) furnish the Adviser with research, economic and statistical
data in connection with the Series' investments and investment
policies respecting Foreign Assets;
<PAGE>
(f) submit such reports relating to the valuation of the Series'
securities consisting of Foreign Assets, including forward
foreign exchange contracts relating to such Foreign Assets, as
the Adviser may reasonably request;
(g) engage in negotiations relating to the Series' investments in
Foreign Assets with issuers, investment banking firms,
securities brokers or dealers and other institutions or
investors;
(h) consistent with the provisions of Section 8 of this Agreement,
place all orders for the purchase, sale or exchange of
portfolio securities consisting of Foreign Assets for the
Series' account with brokers or dealers selected by the
Sub-Adviser, provided that in connection with the placing of
such orders and the selection of such brokers or dealers the
Sub-Adviser shall seek to obtain execution and pricing within
the policy guidelines determined by the Trustees and set forth
in the Prospectus and Statement of Additional Information of
the Fund;
(i) from time to time or at any time requested by the Adviser or
the Fund's Trustees, make reports to the Adviser or the Fund,
as requested, of the Sub-Adviser's performance of the
foregoing services;
(j) subject to the supervision of the Adviser, maintain and
preserve the records required by the Investment Company Act of
1940 to be maintained by the Sub-Adviser (the Sub-Adviser
agrees that such records are the property of the Fund and will
be surrendered to the Fund promptly upon request therefor);
(k) obtain and evaluate such information relating to economies,
industries, businesses and securities markets, as well as
portfolio securities of the Series, as the Sub-Adviser may
deem necessary or useful in the discharge of its duties
hereunder;
(l) give instructions to the custodian and any sub-custodian of
the Series as to deliveries of securities to and from such
custodian or sub-custodian, transfer of currencies and
payments of cash for the account of the Series, and advise the
Adviser on the same day such instructions are given; and
(m) cooperate generally with the Series and the Adviser to provide
information necessary for the preparation of registration
statements and periodic reports to be filed with the
Securities and Exchange Commission, including Forms N-1A and
N-SAR, periodic statements, shareholder communications and
proxy materials furnished to holders of shares of the Series,
filings with state "blue sky" authorities and with United
States and foreign agencies responsible for tax matters, and
other reports and filings of like nature.
<PAGE>
3. Allocation of Assets. Subject to the review of the Trustees, the
Adviser, in consultation with the Sub-Adviser, shall determine at least
quarterly the percentage of the Series' assets that shall be allocated to the
Adviser or the Sub-Adviser for investment management (the "Asset Allocation")
and the manner in which such Asset Allocation in general is to be achieved by
adjustments to the Series' existing portfolio of securities. The Asset
Allocation will specify the percentage of assets of the Series allocated to the
Adviser or the Sub-Adviser for management on the effective date of such
determination and will apply to cash inflow and outflow thereafter until the
Asset Allocation is next redetermined. If the Adviser and the Sub-Adviser cannot
agree on an Asset Allocation, the Adviser has the right to make the final
determination, subject to review by the Trustees.
4. Expenses Paid by the Sub-Adviser. The Sub-Adviser will pay the cost
of maintaining the staff and personnel necessary for it to perform its
obligations under this Agreement, the expenses of office rent, telephone and
other facilities it is obligated to provide in order to perform the services
specified in Section 2, and any other expenses incurred by it in connection with
the performance of its duties hereunder.
5. Expenses of the Series Not Paid by the Sub-Adviser. The Sub-Adviser
will not be required to pay any expenses which this Agreement does not expressly
state shall be payable by it. In particular, and without limiting the generality
of the foregoing but subject to the provisions of Section 4, the Sub-Adviser
will not be required to pay:
(a) the compensation and expenses of Trustees of the Fund, and of
independent advisers, independent contractors, consultants,
managers and other agents employed by the Fund other than
through the Sub-Adviser;
(b) legal, accounting and auditing fees and expenses of the Fund;
(c) the fees or disbursements of custodians, sub-custodians and
depositories of the Series' assets, transfer agents,
disbursing agents, plan agents and registrars;
(d) taxes and governmental fees assessed against the Series' assets and
payable by the Series;
(e) the cost of preparing and mailing dividends, distributions,
reports, notices and proxy materials to shareholders, except
that the Sub-Adviser shall bear the costs of providing the
information referred to in Section 2(m);
(f) brokers' commissions and underwriting fees;
(g) fees and other expenses related to foreign currency
transactions, including entering into forward foreign exchange
contracts; and
(h) the expense of periodic calculations of the net asset value of the
Series' shares.
<PAGE>
6. Compensation of the Sub-Adviser. For all services to be rendered,
facilities furnished and expenses paid or assumed by the Sub-Adviser as herein
provided, the Adviser will pay the Sub-Adviser monthly, based on the average
daily net asset value of the Series for the preceding month, a fee at the annual
rate of one-half of the Adviser's fee from the Series pursuant to the Management
Agreement during such month, computed and paid in United States dollars. The
Series shall not be liable to the Sub-Adviser for the Sub-Adviser's compensation
hereunder.
If in any fiscal year of the Series the Adviser is required, or deems
it appropriate, to reduce its fee or to reimburse expenses of the Series
pursuant to the terms of its Management Agreement with the Series, the
Sub-Adviser will likewise reduce its fee or reimburse the Adviser, within 30
days after the Adviser has notified the Sub-Adviser that the Adviser has so
reduced its fee or reimbursed the Series, in an amount equal to one half of such
reduction or reimbursement, if the Advisor, in its sole discretion, requests
such a fee reduction or such an expense reimbursement from the Sub-Adviser. The
net asset value of the Series shall be determined pursuant to the provisions of
the Series' Prospectus and Statement of Additional Information.
7. Other Activities of the Sub-Adviser and Its Affiliates. Nothing
herein contained shall prevent the Sub-Adviser or any of its affiliates or
associates from engaging in any other business or from acting as investment
adviser or investment manager for any other person or entity, whether or not
having investment policies or portfolios similar to the Series' except that,
without the written consent of the Adviser which consent shall not be
unreasonably withheld, the Sub-Adviser shall not act as investment manager for
or provide investment advice to any other investment company registered under
the Investment Company Act of 1940, as amended with investment objectives and
policies similar to the Fund's. It is specifically understood that officers,
trustees and employees of the Sub-Adviser and those of its affiliates may
continue to engage in providing portfolio management services and advice to
other investment advisory clients of the Sub-Adviser or its affiliates.
8. Avoidance of Inconsistent Position, etc. In connection with
purchases or sales of portfolio securities for the account of the Series,
neither the Sub-Adviser nor any of its directors, officers or employees will act
as principal or agent or receive any commission. The Sub-Adviser shall adopt and
implement policies and procedures substantially similar to those contained in
the Adviser's Code of Ethics (a copy of which has been furnished to the
Sub-Adviser by the Adviser), which shall apply to the Sub-Adviser, its officers,
directors and employees. The Sub-Adviser shall not knowingly recommend that the
Series purchase, sell or retain securities of any issuer in which the
Sub-Adviser or any of its affiliates has a financial interest without obtaining
prior approval of the Adviser prior to the execution of any such transaction.
For purposes of the foregoing sentence, the term "affiliate" shall have the same
meaning as under the Investment Company Act of 1940. If any occasion should
arise in which the Sub-Adviser advises persons concerning the shares of the
Series, the Sub-Adviser will act solely on its own behalf and not in any way on
behalf of the Series.
9. No Partnership or Joint Venture. The Series, the Adviser and the
Sub-Adviser are not partners of or joint venturers with each other and nothing
herein shall be construed so as to make them such partners or joint venturers or
impose any liability as such on any of them.
<PAGE>
10. Limitation of Liability of the Sub-Adviser. The Sub-Adviser shall
not be liable for any error of judgment or mistake of law or for any loss
suffered by the Series or the Adviser in connection with the matters to which
this Agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the Sub-Adviser's part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
11. Duration and Termination of this Contract. This Agreement shall
remain in force two years from the date of its execution and thereafter from
year to year, but only so long as such continuance is specifically approved, in
the case of the first such approval, prior to its second anniversary and
thereafter at least annually by (a) a majority of the Trustees of the Fund who
are not interested persons of the Adviser, of the Sub-Adviser or (other than as
Trustees) of the Fund, cast in person at a meeting called for the purpose of
voting on such approval, and (b) either (i) the Trustees of the Fund, or (ii) a
majority of the outstanding voting securities of the Series. This Agreement may,
on 60 days' written notice, be terminated at any time without the payment of any
penalty by the Trustees of the Fund, by vote of a majority of the outstanding
voting securities of the Series, by the Adviser or by the Sub-Adviser. This
Agreement shall automatically terminate in the event of its assignment or upon
the termination of the Adviser's Investment Management Contract with the Series.
In interpreting the provisions of this Section 11, the definitions contained in
Section 2(a) of the Investment Company Act of 1940, as amended (particularly the
definitions of "assignment," "interested person" or "voting security"), shall be
applied.
12. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment, transfer, assignment,
sale, hypothecation or pledge of this Agreement shall be effective until
approved by (a) the Trustees of the Fund, including a majority of the Trustees
who are not interested persons of the Adviser, of the Sub-Adviser or (other than
as Trustees) of the Fund, cast in person at a meeting called for the purpose of
voting on such approval, and (b) a majority of the outstanding voting securities
of the Series, as defined in the Investment Company Act of 1940, as amended.
<PAGE>
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The Series and the Adviser may use the name "Fuji
Investment Management Co. (Europe) Ltd." or any name derived from or similar to
that name in reports, filings, shareholder communications, registration
statements, advertising materials and materials of like nature, subject always
to the right of the Sub-Adviser to review any such materials prior to their use,
only for so long as this Agreement or any extension, renewal or amendment hereof
remains in effect. At such time as such an agreement shall no longer be in
effect, the Series and the Adviser will (to the extent they lawfully can) cease
to use the name "Fuji Investment Management Co. (Europe) Ltd." or any other name
indicating that the Series or the Adviser is advised by or otherwise connected
with the Sub-Adviser. The obligations of the Series are not personally binding
upon, nor shall resort be had to the private property of, any of the Trustees,
shareholders, officers, employees or agents of the Series, but only the Series'
property shall be bound.
14. Governing Law. This Agreement shall be construed in accordance with
the laws of New York and the applicable provisions of the Investment Company Act
of 1940, as amended.
Yours very truly,
LORD, ABBETT & CO.
By____________________________
Managing Partner
The foregoing contract
is hereby agreed to as of
the date hereof.
FUJI INVESTMENT MANAGEMENT CO. (EUROPE) LTD.
By __________________________
