1933 Act File No. 33-68090
1940 Act File No. #811-7988
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 6
[X]
And
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
[X]
OF 1940
Amendment No. 6
[X]
LORD ABBETT INVESTMENT TRUST
Exact Name of Registrant as Specified in Charter
767 FIFTH AVENUE, NEW YORK, N. Y. 10153-0203
Address of Principal Executive Office
Registrant's Telephone Number (212) 848-1800
Kenneth B. Cutler, Vice President & 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
on April 1, 1995 pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a) (1) of Rule 485
on (date) pursuant to paragraph (a) (1) of Rule 485
X 75 days after filing pursuant to paragraph (a) (2) of Rule 485
- --
on (date) pursuant to paragraph (a) (2) 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
In accordance with Rule 24f-2 under the Investment Company Act of 1940, an
indefinite amount of Registrant's shares of U.S. Government Securities Series
are being registered by this registration statement under the Securities Act of
1933. Amount of Registration Fee: $500 for Securities Act of 1933 Registration.
Registrant has registered on behalf of its Limited Duration U.S. Government
Securities Series and Balanced Series an indefinite amount of securities under
the Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-2 Notice
for these two series for the most recent fiscal year was filed with the
Commission on or about December 22, 1994.
<PAGE>
EXPLANATORY NOTE
This Post-Effective Amendment No. 6 (the "Amendment") to the Registrant's
Registration Statement relates to the U.S. Government Securities Series of the
Registrant.
The other series of shares of the Registrant are listed below and are
offered by the Prospectus in Part A of the Post-Effective Amendment to the
Registrants' Registration Statement as identified. The following is a separate
series of shares of the Registrant. This Amendment does not relate to, amend or
otherwise affect the Prospectus contained in the prior Post-Effective Amendment,
and pursuant to Rule 485(d) under the Securities Act of 1933, does not affect
the effectiveness of such Post-Effective Amendment.
Limited Duration U.S. Post-Effective
Government Securities Series Amendment No. 5
Balanced Series
LORD ABBETT INVESTMENT TRUST
FORM N-1A
Cross Reference Sheet
Post-Effective Amendment No. 6
Pursuant to Rule 481(a)
Form N-1A Location In Prospectus or
Item No. Statement of Additional Information
1 Cover Page
2 Fee Table
3 N/A
4 (a) (i) Cover Page
4 (a) (ii) Investment Objective; How We Invest
4 (b) (c) How We Invest
5 (a) (b) (c) Our Management; Back Cover Page
5 (d) N/A
5 (e) Back Cover Page
5 (f) Our Management
5 (g) N/A
5 A N/A
6 (a) Cover Page
6 (b) (c) (d) N/A
6 (e) Cover Page
6 (f) (g) Dividends, Capital Gains
Distributions and Taxes
6 (h) N/A
7 (a) Back Cover Page
7 (b) (c) (d)
(f) Purchases
7 (e) N/A
8 Redemptions and Repurchases
9 N/A
10 Cover Page
11 Cover Page - Table of Contents
<PAGE>
Form N-1A Location In Prospectus or
Item No. Statement of Additional Information
- ---------- ------------------------------------
12 N/A
13 (a) (b) (c) Investment Objective and Policies
13 (d) N/A
14 Trustees and Officers
15 (a) (c) N/A
15 (b) 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
19 (c) N/A
20 Taxes
21 (a) Purchases, Redemptions
and Shareholder Services
21 (b) (c) N/A
22 (a) N/A
22 (b) Past Performance
23 Financial Statements
<PAGE>
LORD ABBETT INVESTMENT TRUST
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
800-426-1130
The Lord Abbett U.S. Government Securities Series ("we" or the
"Series") is a separate series of Lord Abbett Investment Trust (the "Fund"), a
diversified, open-end management investment company organized as a Delaware
business trust on August 16, 1993. Currently, the Fund consists of three
separate series -- the Lord Abbett Limited Duration U.S. Government Securities
Series, the Lord Abbett Balanced Series, and the Series, which is effective
immediately. Only shares of the Series are being offered in this prospectus.
The Series' investment objective is high current income with
relatively low risk of price decline. The Series will seek its objective by
investing primarily in intermediate- and long-term U.S. Government securities.
The Series will not change this objective without first obtaining shareholder
approval.
There can be no assurance that the Series will achieve its objective.
This Prospectus sets forth concisely the information about the
Series that a prospective investor should know before investing. Additional
information about the Fund and the Series has been filed with the Securities and
Exchange Commission and is available upon request without charge. 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
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 6, 1996.
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 the 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.
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.
INVESTMENT OBJECTIVE 3
FEE TABLE 4
HOW WE INVEST 5
PURCHASES 8
SHAREHOLDER SERVICES 13
OUR MANAGEMENT 14
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES 16
REDEMPTIONS 17
PERFORMANCE 18
<PAGE>
1 INVESTMENT OBJECTIVE
The investment objective of the Series is high current income
with relatively low risk of price decline. The shares of the Series can
fluctuate in value more than short-duration U.S. Government securities and
consistent with intermediate-duration U.S. Government securities like those we
hold. For example, assuming a portfolio duration of eight years, an increase in
interest rates of 1%, a parallel shift in the yield curve and no change in the
spread relationships among mortgage-related securities, the value of the
portfolio would decline 8%. Using the same assumptions, if interest rates
decrease 1%, the value of the portfolio would increase 8%. This volatility,
while not eliminated, is managed by the investment policy of Lord, Abbett & Co.
("Lord Abbett") to maintain the average duration of securities held by the
Series at between three and eight years. "Duration" is the weighted average time
to receipt of all cash flows due by maturity from an obligation.
<PAGE>
2 FEE TABLE
A summary of the Series' expenses is set forth in the table
below. The example is not a representation of past or future expenses. Actual
expenses may be greater or less than those shown.
<TABLE>
<CAPTION>
<S> <C>
Shareholder Transaction Expenses
(as a percentage of offering price)
Maximum Sales Load(1) on Purchases (See "Purchases") 4.75%
Redemption Fee (See "Purchases") None(2)
Deferred Sales Load(1) None(2)
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fee (See "Our Management") .50%(3)
12b-1 Fees (See "Purchases") .__%(3)
Other Expenses (See "Our Management") .__%(3)
Total Operating Expenses .__%(3)
<FN>
Example: Assume an annual return of 5% and there is no change in the level of
expenses described above. For every $1,000 invested, with reinvestment of all
distributions, you would pay the following total expenses if you closed your
account after the number of years indicated.
1 year 3 years
$56(4) $75(4)
(1) Sales "load" is referred to as sales "charge" and "deferred sales load" is
referred to as "contingent deferred reimbursement charge" throughout this
Prospectus.
(2) Redemptions of shares on which the Series' 1% Rule 12b-1 sales distribution
fee for purchases of $1 million or more has been paid are subject to a 1%
contingent deferred reimbursement charge, if the redemption occurs within 24
months after the month of purchase, subject to certain exceptions described
herein. See "12b-1 Plan" under "Purchases" for a description of the Plan.
(3) The Series expenses are estimated for the fiscal year. Although not
obligated to, Lord Abbett may waive its management fee and subsidize the
operating expenses with respect to the Series.
(4) Based on total estimated operating expenses shown in the table above.
The foregoing is provided to give investors a better understanding of the
expenses that are incurred by an investment In the Series.
</FN>
</TABLE>
<PAGE>
3 HOW WE INVEST
The Series seeks high current income with relatively low risk
of price decline. To achieve this goal, the Series will invest in U.S.
Government securities. U.S. Government securities include: (1) obligations
issued by the U.S. Treasury, differing only in their interest rates, maturities
and time of issuance, and including Treasury bills maturing in one year or less,
Treasury notes maturing in one to ten years and Treasury bonds with maturities
of over ten years and (2) obligations issued or guaranteed by U.S. Government
agencies and instrumentalities which are supported by any of the following: (a)
the full faith and credit of the United States (such as Government National
Mortgage Association ("GNMA") certificates), (b) the right of the issuer to
borrow from the U.S. Treasury or (c) the credit of the instrumentality. Agencies
and instrumentalities include the Federal Home Loan Bank, Federal Home Loan
Mortgage Corporation, Federal National Mortgage Association, Federal Farm Credit
Bank, Student Loan Marketing Association, Tennessee Valley Authority, Financing
Corporation and Resolution Funding Corporation. Obligations issued by the U.S.
Treasury and by U.S. Government agencies and instrumentalities include those so
issued in a form separated into their component parts of principal and coupon
payments, i.e., "component securities." A security backed by the U.S. Treasury
or a U.S. Government agency, although providing substantial protection against
credit risk, is guaranteed only as to the timely payment of interest and
principal when held to maturity. The market prices for such securities are not
guaranteed and will fluctuate and, accordingly, such securities will not protect
investors against price changes due to changing interest rates. Longer maturity
U.S. Government securities may exhibit greater price volatility in response to
changes in interest rates than shorter maturity securities. In addition, certain
U.S. Government securities may show even greater volatility if, for example, the
interest payment component has been removed, as with zero coupon bonds. The
value of shares of the Series will change as the general levels of interest
rates fluctuate. When interest rates decline, share value can be expected to
rise. Conversely, when interest rates rise, share value can be expected to
decline.
Investments in GNMA certificates, which are pools of home
mortgages and other mortgage-backed securities, are subject to prepayment of
principal as mortgages are prepaid. The Series must reinvest these prepayments
at prevailing rates, which may be lower than the yield of the GNMA certificate
or other mortgage-backed securities. These prepayments will result in a further
reduction in principal if the GNMA certificate or other mortgage-backed security
is trading over par. Mortgage prepayments generally increase in a falling
interest rate environment and, accordingly, often result in a reduction of
principal. In a rising interest rate environment, prepayments tend to decline
which increases the duration and volatility of such GNMA certificates.
The Series may invest in liquid interest-only and
principal-only mortgage-backed securities backed by fixed-rate mortgages under
guidelines established by the Board of Trustees of the Fund to assure that they
may be sold promptly in the ordinary course of business at a value reasonably
close to that used in calculating the Series' net asset value per share.
Although the longer maturity U.S. Government securities, zero
coupon bonds, GNMA certificates and other mortgage-backed securities mentioned
above may be volatile, this volatility, while not eliminated, is managed by the
above-mentioned policy of Lord Abbett to maintain the average duration of
securities held by the Series at between three and eight years.
While growth of capital is not an objective of the Series,
capital appreciation may result from efforts to secure high current income.
The Series may purchase U.S. Government securities on a
when-issued basis and, while awaiting delivery and before paying for them
("settlement"), normally may invest in short-term U.S. Government. The Series
does not start earning interest on these when-issued securities until settlement
and often they are sold prior to settlement. While this investment strategy may
contribute significantly to a portfolio turnover rate in excess of 100%, it will
have little or no transaction cost or adverse tax consequences for the Series.
Transaction costs normally do not involve brokerage because the Series'
fixed-income portfolio transactions usually are on a principal basis and at the
time of purchase we normally anticipate that any markups charged will be more
than offset by the anticipated economic benefits of the transaction. 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 the Series' 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 Series may engage in the lending of its portfolio
securities. These loans may not exceed 30% of the value of the Series' total
assets. In such an arrangement the Series lends securities from its portfolio to
registered broker-dealers. Such loans are continuously collateralized by an
amount at least equal to 100% of the market value of the securities loaned. Cash
collateral is invested in obligations issued or guaranteed by the U.S.
Government or its agencies, or repurchase agreements with respect to the
foregoing. As with other extensions of credit, there are risks of delay in
recovery and market loss should the borrowers of the portfolio securities fail
financially.
The Series will not borrow money except as a temporary measure
for extraordinary or emergency purposes and then not in excess of 5% of its
gross assets (at cost or market value, whichever is lower) at the time of
borrowing.
The Series may enter into repurchase agreements with respect
to a security. A repurchase agreement is a transaction by which the 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.
4 PURCHASES
You may buy shares of the Series through any independent
securities dealer having a sales agreement with Lord Abbett, our exclusive
selling agent. Place your order with your investment dealer or send it to Lord
Abbett Investment Trust--U.S. Government Securities Series (P.O. Box 419100,
Kansas City, Missouri 64141). The minimum initial investment is $500 except for
Invest-A-Matic and Div-Move ($250 initial and $50 monthly minimum) and
Retirement Plans ($250 minimum). Subsequent investments may be made in any
amount. See "Shareholder Services".
The net asset value of the Series' 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.
Orders for shares received by the Series prior to the close of
the NYSE or received by dealers prior to such close and received by Lord Abbett
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 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. A
business day is a day on which the NYSE is open for trading.
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 reserves the right to reject any order.
The offering price is based on the per-share net asset value
calculated as of the times described above plus a sales charge as follows:
<TABLE>
<CAPTION>
Sales Charge as a Dealer's To Compute
Percentage of: Concession as a Offering Price,
Percentage of Divide NAV by
Offering Price*
Size of Investment Offering Price Net Amount
Invested
<S> <C> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.00% .9525
$50,000 to $99,999 4.75% 4.99% 4.25% .9525
$100,000 to $249,999 3.75% 3.90% 3.25% .9625
$250,000 to $499,999 2.75% 2.83% 2.50% .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
<FN>
* Lord Abbett 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 may, from time to time, implement promotions under which Lord Abbett
will pay a fee to dealers with respect to certain purchases not involving
the imposition of a sales charge. Additional payments may be paid from Lord
Abbett'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.
</FN>
</TABLE>
In selecting dealers to execute portfolio transactions, if two or more
dealers are considered capable of providing best execution, we may prefer the
dealer who has sold our shares and/or shares of other Lord Abbett-sponsored
funds.
Volume Discounts. This section describes several ways to qualify for a
lower sales charge if you inform Lord Abbett or the Fund that you are eligible
at the time of purchase.
(1) Any purchaser (as described below) may aggregate a purchase in the
Series with 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"), Lord Abbett
Research Fund if not offered to the general public ("LARF") and Lord Abbett U.S.
Government Securities Money Market Fund ("GSMMF"), except for existing holdings
in GSMMF which are attributable to shares exchanged from a Lord Abbett-sponsored
fund offered with a front-end sales charge or from a fund in the Lord Abbett
Counsel Group.) (2) A purchaser may sign a non-binding 13 month statement of
intention to invest $100,000 or more in the Fund or in any of the above eligible
funds. If the intended purchases are completed during the period, each purchase
will be at the sales charge, if any, applicable to the aggregate of such
purchaser's intended purchases. If not completed, each purchase will be at the
sales charge for the aggregate of the actual 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.
Shares of the Series may be purchased at net asset value by trustees of
the Fund, 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 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 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. Shares of the Series
also may be purchased at net asset value (a) at $1 million or more, (b) with
dividends and distributions from other Lord Abbett-sponsored funds, except for
dividends and distributions on shares of LARF, LAEF, LASF and Lord Abbett
Counsel Group, (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 in accordance with certain standards approved by Lord Abbett,
providing specifically for the use of the Series' shares in particular
investment products made available for a fee to clients of such brokers,
dealers, registered investment advisers and other financial institutions, (e) by
employees, partners and owners of unaffiliated consultants and advisers to Lord
Abbett or Lord Abbett-sponsored funds who consent to such purchase if such
persons provide services to Lord Abbett or such funds on a continuing basis and
are familiar with such funds and (f) subject to appropriate documentation,
through a securities dealer where the amount invested represents redemption
proceeds from shares ("Redeemed Shares") of a registered open-end management
investment company not distributed or managed by Lord Abbett (other than a money
market fund), if such redemptions have occurred no more than 60 days prior to
the purchase of the Series' shares, the Redeemed Shares were held for at least
six months prior to redemption and the proceeds of redemption were maintained in
cash or a money market fund prior to purchase. Purchasers should consider the
impact, if any, of contingent deferred sales charges in determining whether to
redeem shares for subsequent investment in our shares. Lord Abbett may suspend
or terminate the purchase option referred to in (f) above at any time.
The Series' assets may be issued at net asset value in exchange for the
assets, subject to possible tax adjustment, of a personal holding company or an
investment company.
Rule 12b-1 Plan. The Fund, on behalf of the Series, has adopted a Rule
12b-1 Plan (the "Plan") which authorizes Lord Abbett to pay distribution fees to
dealers in order to provide additional incentives for them (a) to provide
continuing information and investment services to their shareholder accounts and
otherwise to encourage their accounts to remain invested in the Series and (b)
to sell shares of the Series. Under the Plan (except as to certain accounts,
such as those for which tracking data is not available) the Series pays Lord
Abbett, who passes on to dealers, (1) an annual service fee (payable quarterly)
of .25% of the average daily net asset value of the Series' shares attributable
to sales by dealers on or after September 1, 1985 and .15% of the average daily
net asset value of shares sold by dealers prior to that date and (2) a one-time
1% sales distribution fee, at the time of sale, on all shares at the $1 million
level sold by dealers including sales qualifying at such level under the rights
of accumulation and statement of intention privileges. Lord Abbett is required
to pay the sales distribution fee to dealers as compensation for selling our
shares.
Holders of shares on which the 1% sales distribution fee has been paid
will be required to pay to the Series a contingent deferred reimbursement charge
of 1% of the original cost or the then net asset value, whichever is less, of
all 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. (An exception is made for redemptions by
tax-qualified plans under Section 401 of the Internal Revenue Code for benefit
payments due to plan loans, hardship withdrawals, death, retirement or
separation from service with respect to plan participants.) If the shares have
been exchanged into another Lord Abbett fund and are thereafter redeemed out of
the Lord Abbett family on or before the end of such twenty-fourth month, the
charge will be collected for the Series by the other fund. The Series will
collect such a charge for other Lord Abbett-sponsored funds in a similar
situation. Shares of a fund or series on which the 1% sales distribution fee has
been paid may not be exchanged into a fund or series with a Rule 12b-1 Plan for
which the payment provisions have not been in effect for at least one year.
5 SHAREHOLDER SERVICES
We offer the following shareholder services:
Telephone Exchange Privilege: Shares may be exchanged, without a
service charge, for those of any other Lord Abbett-sponsored fund except for (i)
LAEF, LASF and Lord Abbett Counsel Group 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 (together, "Eligible Funds").
You or your representative with proper identification can instruct the
Fund to exchange uncertificated shares (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 (800-521-5315) prior to the close of the
NYSE to obtain each fund's net asset value per 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
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: 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.
Div-Move: You can invest the dividends paid on your account ($50
minimum monthly investment) into an existing account 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: You can make fixed, periodic investments ($50 minimum
monthly 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
Simplified Employee Pensions), 403(b) plans and pension and profit-sharing
plans.
All correspondence should be directed to Lord Abbett Investment Trust--U.S.
Government Securities Series (P.O. Box 419100, Kansas City, Missouri 64141;
800-821-5129).
6 OUR MANAGEMENT
Our business is managed by our officers on a day-to-day basis under the
overall direction of our Board of Trustees. We employ Lord Abbett as investment
manager pursuant to a Management Agreement. Lord Abbett has been an investment
manager for over 60 years and currently manages approximately $18 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 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 portfolio and certain other costs. Lord Abbett provides
similar services to fifteen other funds having various investment objectives and
also advises other investment clients. Zane E. Brown, Trustee of the
fixed-income group, will serve as portfolio manager of the Series. Mr. Brown has
over 19 years of investment experience and has been with Lord Abbett since 1992.
Mr. Brown is assisted by, and may delegate management duties to, other Lord
Abbett employees who may be Fund officers.
Under the Management Agreement, we are obligated to pay Lord Abbett a
monthly fee based on average daily net assets for each month. In addition, we
pay all expenses not expressly assumed by Lord Abbett.
We will not hold annual meetings of shareholders unless required to by the
Investment Company Act of 1940, the Board of Trustees or the shareholders with
one-quarter of the outstanding stock entitled to vote. See the Statement of
Additional Information for more details.
The Fund was organized as a Delaware business trust on August 16, 1993.
Each outstanding share has one vote and an equal right to dividends and
distributions of its series. All shares have noncumulative voting rights for the
election of Trustees. At _________, 1996, Lord Abbett owned 100% of the Series'
shares.
7 DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
You begin earning dividends on the business day that payment for shares
purchased is received. Dividends from net investment income are declared daily
and paid on the 15th of each month, or if the 15th is not a business day, on the
first business day after the 15th. Dividends may be taken in cash or reinvested
in additional shares at net asset value without a sales charge.
Checks representing dividends paid in cash will be mailed to
shareholders as soon as practicable after the payment date.
A long-term capital gains distribution is made when we have net profits
during the year from sales of securities which we have held more than one year.
If we realize net short-term capital gains, they also will be distributed. Any
capital gains distribution will be made in January. You may take the
distribution in cash or reinvest it in additional shares at net asset value
without a sales charge.
Supplemental dividends and distributions also may be paid in December
or January. Dividends and distributions 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 Series paying federal income tax. Shareholders, however, must report
dividends and capital gains distributions as taxable income. Distributions
derived from net long-term capital gains which are designated by the Fund as
"capital gains dividends" will be taxable to shareholders as long-term capital
gains, whether received in cash or shares, regardless of how long a taxpayer has
held the shares. Under current law, net long-term capital gains are taxed at the
rates applicable to ordinary income, except that the maximum rate for long-term
capital gains for individuals is 28%. See "Performance" for a discussion of the
purchase of high-coupon securities at a premium and the distribution to
shareholders as ordinary income of all interest income on those securities. This
practice increases current income of the Series, but may result in higher
taxable income to Series shareholders than other portfolio management practices.
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 proceeds (including the value of shares exchanged into
another Lord Abbett-sponsored fund), and of any dividend or distribution on any
account, where the payee (shareholder) 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.
8 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 expedited procedures described above, to
redeem shares directly, send your request to Lord Abbett Investment Trust--U.S.
Government Securities Series (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. The Fund will make payment of the net asset value of the
shares on the date the redemption order was received in proper form. Payment
will be made within three business days. The Fund may suspend the right to
redeem shares for not more than seven days or longer under unusual circumstances
as permitted by Federal law. If you have purchased shares of the Series 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 of the shares being
purchased without the payment of a sales charge. Such reinvestment must be made
within 60 days of the redemption and is limited to no more than the dollar
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.
We will calculate our average annual total return for the Series for a
given period by determining an annual compounded rate that would cause the
hypothetical initial investment made on the first day of the period to equal the
ending redeemable value. The calculation assumes for the period a $1,000
hypothetical initial investment in the Series, the reinvestment of all income
and capital gains distributions on the reinvestment dates at the prices
calculated as stated in the Prospectus, and a complete redemption at the end of
the period to determine the ending redeemable value. Further information about
the Series' performance will be in its annual report to shareholders which may
be obtained without charge.
9 PERFORMANCE
Yield and Total Return. Yield and total return data may, from time to
time, be included in advertisements about the Series. "Yield" is calculated by
dividing the Series' annualized net investment income per share during a recent
30-day period by the maximum public offering price per share on the last day of
that period. The Series' yield reflects the deduction of the maximum initial
sales charge and reinvestment of all income dividends and capital gains
distributions. "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 the Series at the maximum public offering price. Total return also may
be presented for other periods or based on investment at reduced sales charge
levels or net asset value. Any quotation of total return not reflecting the
maximum initial sales charge 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.
The Series' dividend distribution rate may differ from its SEC yield
primarily because the Series may purchase short- and intermediate-term
high-coupon securities at a premium and, consistent with applicable tax
regulations, distribute to shareholders all of the interest income on these
securities without amortizing the premiums. This practice also is used by the
Series for financial statement purposes and is in accordance with generally
accepted accounting principles. In other words, the Series may pay more than
face value for a security that pays a greater-than-market rate of interest and
then distribute all such interest as dividends. The principal payable on the
security at maturity will equal the security's face value, and so the market
value of the security will gradually decrease to face value, assuming no changes
in the market rate of interest or in the credit quality of the issuer.
Shareholders should recognize that such dividends will therefore tend to
decrease the net asset value of the Series. Dividends paid from this interest
income are taxable to shareholders at ordinary income tax rates.
The Series may make distributions in excess of net investment income
from time to time to provide more stable dividends. Such distributions could
cause slight decreases in net asset values over time, but historically have not
resulted in a return of capital for tax purposes.
See "Past Performance" in the Statement of Additional Information for a
more detailed discussion concerning the computation of the 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 any information or to make any
representations not contained in this Prospectus, or in supplemental sales
material authorized by the Fund and no person is entitled to rely upon any
information or representation not contained herein or therein.
<PAGE>
LORD ABBETT
Statement of Additional Information March 6, 1996
Lord Abbett
Investment Trust
This Statement of Additional Information is not a Prospectus. A Prospectus may
be obtained from your securities dealer or from Lord, Abbett & Co. 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 6, 1996.
Lord Abbett Investment Trust (referred to as the "Fund") was organized as a
Delaware business trust on August 16, 1993. The Fund's trustees have authority
to create separate classes and series of shares of beneficial interest, without
further action by shareholders. To date, the Fund has three series consisting of
three classes of shares - Lord Abbett Limited Duration U.S. Government
Securities Series, Lord Abbett Balanced Series and Lord Abbett U.S. Government
Securities Series (a new series effective immediately). Further classes or
series may be added in the future. The Investment Company Act of 1940, as
amended (the "Act"), requires that where more than one class or series exists,
each class or series must be preferred over all other classes or series of
assets specifically allocated to such class or series. Only shares of Lord
Abbett U.S. Government Securities Series (sometimes referred to as "we" or the
"Series") are described in this Statement of Additional Information.
Rule 18f-2 under the Act provides that any matter required to be submitted, by
the provisions of the Act or applicable state law or otherwise, to the holders
of the outstanding voting securities of an investment company such as the Fund
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each class 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 3
2. Trustees and Officers 6
3. Investment Advisory and Other Services 9
4. Portfolio Transactions 10
5. Purchases, Redemptions
and Shareholder Services 11
6. Past Performance 16
7. Taxes 16
8. Information About The Fund 16
<PAGE>
1.
Investment Objective and Policies
The Series' investment objective and policies are described in the Prospectus on
the cover page and under "How We Invest". In addition to those policies
described in the Prospectus, the Series is subject to the following fundamental
investment restrictions which cannot be changed without shareholder approval. We
may not: (1) sell short or buy on margin; (2) borrow securities; (3) borrow
money except as a temporary measure for extraordinary or emergency purposes and
then not in excess of 5% of our gross assets (at cost or market value, whichever
is lower) at the time of borrowing; (4) engage in the underwriting of
securities; (5) lend money or securities to any person, except through entering
into short-term repurchase agreements with sellers of securities we have
purchased and by lending our portfolio securities to registered broker-dealers
where the loan is 100% secured by cash or its equivalent as long as we comply
with regulatory requirements and management deems such loans not to expose us to
significant risk or adversely affect our qualification for pass-through tax
treatment under the Internal Revenue Code; (6) pledge, mortgage, or hypothecate
our assets; (7) deal in real estate, commodities, or commodity contracts; (8)
invest in securities issued by other investment companies as defined in the
Investment Company Act of 1940; (9) buy securities of any issuer unless it or
its predecessor has a record of three years' continuous operation, except that
we may buy securities of such issuers through subscription offers or other
rights we receive as a security holder of companies offering such subscriptions
or rights, and such purchases will then be limited in the aggregate to 5% of our
net assets at the time of investment; (10) buy securities if the purchase would
then cause us to have more than 5% of our gross assets, at market value at the
time of investment, invested in the securities of any one issuer, except
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, or to own more than 10% of the voting securities of any
issuer; (11) hold securities of any issuer when more than 1/2 of 1% of its
securities are owned beneficially by one or more of our officers or Trustees or
by one or more partners of our underwriter or investment manager if these owners
in the aggregate own beneficially more than 5% of such securities; (12) engage
in security transactions with our underwriter or investment manager, our
officers or Trustees, or firms (acting as principals) with which any of the
foregoing are associated; however, this provision does not apply to our shares,
or to securities we may become entitled to by reason of our ownership of
securities already held, or to transactions on a securities exchange when only
the regular exchange commissions and charges are imposed (we have not had, nor
do we intend to have, any such transactions on an exchange) or to transactions
in accordance with Investment Company Act of 1940 Rule 17a-7 or (13) concentrate
our investments in any one industry.
Of course, as a matter of fundamental policy, we may not invest in securities
other than U.S. Government securities, even though several of the above
restrictions may imply otherwise.
If we enter into repurchase agreements as provided in clause (5) above, we will
do so 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 repurchase agreements will
consist only of U.S. Government securities in which we may otherwise invest.
As stated in the Prospectus, we may purchase Government securities on a
when-issued basis. Under no circumstance will delivery and payment
("settlement") for such securities take place more than 120 days after the
purchase date.
Lending Portfolio Securities
The Series may lend its portfolio securities to registered broker-dealers. These
loans, if and when made, may not exceed 30% of the Series' total assets. The
Series' loans 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. The cash or instruments
collateralizing the Fund's lending of securities will be maintained at all times
in an amount at least equal to the current market value of the loaned
securities. From time to time, the Series may allow a part of the interest
received with respect to the investment of collateral to be paid to the 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, the 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 a
borrower when such U.S. Government Securities are used as collateral. The Series
will comply with the following conditions whenever it loans securities: (i) the
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) the Series must
be able to terminate the loan at any time; (iv) the Series must receive
reasonable compensation with respect to the loan, as well as any dividends,
interest or other distributions on the loaned securities; (v) the 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 Fund's
Board of Trustees must terminate the loan and regain the right to vote the
securities.
When-Issued Transactions
As stated in the Prospectus, the Series may purchase portfolio securities on a
when-issued basis. When-issued transactions involve a commitment by the Series
to purchase securities, with payment and delivery ("settlement") to take place
in the future, in order to secure what is considered to be an advantageous price
or yield at the time of entering into the transaction. When the Series enters
into a when-issued purchase, it becomes obligated to purchase securities and it
assumes all the rights and risks attendant to ownership of a security, although
settlement occurs at a later date. The value of securities to be delivered in
the future will fluctuate as interest rates vary. At the time the Series makes
the commitment to purchase a security on a when-issued basis, it will record the
transaction and reflect the liability for the purchase and the value of the
security in determining its net asset value. The Series, generally, has the
ability to close out a purchase obligation on or before the settlement date,
rather than take delivery of the security. Under no circumstance will settlement
for such securities take place more than 120 days after the purchase date.
2.
Trustees and Officers
The following trustees of the Fund are partners of Lord, Abbett & Co., 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 Trustees or trustees of the fifteen other Lord Abbett-sponsored funds.
They are "interested persons" as defined in the Investment Company Act of 1940,
as amended, and as such, may be considered to have an indirect financial
interest in the Rule 12b-1 Plan described in the Prospectus.
Ronald P. Lynch, age 59, Chairman
Robert S. Dow, age 50, President
The following outside trustees are also Trustees or trustees of the fifteen
other Lord Abbett-sponsored funds referred to above except for Lord Abbett
Research Fund, Inc., of which only Messrs. Millican and Neff are Trustees.
E. Thayer Bigelow
Time Warner Cable
300 First Stamford Place
Stamford, Connecticut
President and Chief Executive Officer of Time Warner Cable Programming, Inc.
Formerly President and Chief Operating Officer of Home Box Office, Inc. Age 53.
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 64.
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 69.
C. Alan MacDonald
The Marketing Partnership, Inc.
27 Signal Road
Stamford, Connecticut
General Partner, The Marketing Partnership, Inc., a full service marketing
consulting firm that specializes in strategic planning and customer specific
marketing. Formerly Acquisition Consultant, The Noel Group, a private consulting
firm (1994). Formerly Chairman and Chief Executive Officer of Lincoln Snacks,
Inc., manufacturer of branded snack foods (1992-1994). Formerly President and
Chief Executive Officer of Nestle Foods Corporation, a subsidiary of Nestle S.A.
(Switzerland). Age 61.
Hansel B. Millican, Jr.
Rochester Button Company
1100 Noblin Avenue
South Boston, Virginia
President and Chief Executive Officer of Rochester Button Company. Age 65.
Thomas J. Neff
277 Park Avenue
New York, New York
President of Spencer Stuart & Associates, an executive search consulting firm.
Age 57.
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 retirement plan for outside trustees maintained by the Lord
Abbett-sponsored funds. The fifth column sets forth the total compensation
payable by such funds to the outside trustees. The first four columns give
information for the Fund's fiscal year ended October 31, 1995; the fifth column
gives information for the year ended December 31, 1995. 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.
<PAGE>
<TABLE>
<CAPTION>
For the Fiscal Year Ended October 31, 1995
(1) (2) (3) (4) (5)
Pension or Estimated Annual For Year Ended
Retirement Benefits Benefits Upon December 31, 1995
Accrued as Expenses Retirement Proposed Total Compensation
by the Fund and to be Paid by the Accrued by the Fund
Aggregate Fifteen Other Lord Fund and Fifteen and Fifteen Other Lord
Compensation Abbett-sponsored Other Lord Abbett- Abbett-sponsored
Name of Trustee from the Fund1 Funds2 sponsored Funds2 Funds3
- --------------- -------------- ------ ---------------- ------
<S> <C> <C> <C> <C> <C>
E. Thayer Bigelow $ $ $33,600 $______
Stewart S. Dixon $ $ $33,600 $______
John C. Jansing $ $ $33,600 $______
C. Alan MacDonald $ $ $33,600 $______
Hansel B. Millican, Jr. $ $ $33,600 $______
Thomas J. Neff $ $ $33,600 $______
<FN>
1. Outside trustees' fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored funds based on net
assets of each fund. Fees payable by the Fund to its outside trustees are
being deferred under a plan that deems the deferred amounts to be invested
in shares of the Fund for later distribution to the trustees. The amounts
accrued by the Fund for the year ended October 31, 1995, are as set forth
after each outside trustee's name above. The total amount accrued for each
outside trustee since the beginning of his tenure with the Fund, together
with dividends reinvested and changes in net asset value applicable to such
deemed investments, were as follows as of October 31, 1995: Mr. Bigelow;
$_____; Mr. Dixon, $_____; Mr. Jansing, $_____; Mr. MacDonald, $_____; Mr.
Millican, $_____; and Mr. Neff, $_____.
2. Each Lord Abbett-sponsored fund has a retirement plan providing that
outside Trustees and trustees will receive annual retirement benefits for
life equal to 80% of their final annual retainers following retirement at
or after age 72 with at least 10 years of service. Each plan also provides
for a reduced benefit upon early retirement under certain circumstances, a
pre-retirement death benefit and actuarially reduced joint-and-survivor
spousal benefits. The amounts stated would be payable annually under such
retirement plans if the trustee were to retire at age 72 and the annual
retainers payable by such funds were the same as they are today. The
amounts accrued in column 3 were accrued by the Lord Abbett-sponsored funds
during the fiscal year ended October 31, 1995 with respect to the
retirement benefits in column 4.
3. This column shows aggregate compensation, including trustees' fees and
attendance fees for board and committee meetings, of a nature referred to
in footnote one, accrued by the Lord Abbett-sponsored funds during the year
ended December 31, 1995.
</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, Carper, Cutler, Nordberg and Walsh are partners of Lord Abbett; the
others are employees: Kenneth B. Cutler, age 63, Vice President and Secretary;
Stephen I. Allen, age 41, Daniel E. Carper, age 43, E. Wayne Nordberg, age 59,
John J. Walsh, age 58, Paul A. Hilstad, age 53 (with Lord Abbett since 1995 -
formerly Senior Vice President and General Counsel of American Capital
Management & Research, Inc.), John J. Gargana, Jr., age 64, Thomas F. Konop, age
53, Victor W. Pizzolato, age 63, Vice Presidents; and Keith F. O'Connor, age 40,
Treasurer.
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 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 Series outstanding and entitled to vote at the meeting.
As of March 6, 1996, our officers and trustees, 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 nine general partners of Lord Abbett, all
of whom are officers and/or trustees of the Fund, are: Stephen I. Allen, Daniel
E. Carper, Kenneth B. Cutler, Robert S. Dow, Thomas S. Henderson, Ronald P.
Lynch, Robert G. Morris, 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 services performed by Lord Abbett are described in the Prospectus under "Our
Management". Under the Management Agreement, we pay Lord Abbett a monthly fee,
based on average daily net assets for each month, at the annual rate of .50 of
1% of the portion of our net assets not in excess of $3,000,000,000 plus .45% of
1% of such assets over $3,000,000,000.
We pay 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 share
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 and brokerage and
other expenses connected with executing portfolio transactions.
The Series has agreed with the State of California to limit operating expenses
(including management fees but excluding taxes, interest, extraordinary and
brokerage commissions) to 2 1/2% of the Series' 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 Prospectus, the Series
has adopted a Plan pursuant to Rule 12b-1 of the Act. Annual Plan distribution
expenses up to one percent of the Series' average net assets during its fiscal
year may be excluded from this expense limitation. The expense limitation is a
condition on the registration of investment company shares for sale in the State
and applies so long as our shares are registered for sale in the State.
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281 are
the independent auditors of the Fund and must be approved at least annually by
our trustees to continue in such capacity. They 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, is the Fund's
custodian.
4.
Portfolio Transactions
Purchases and sales of portfolio securities usually will be principal
transactions and normally such securities will be purchased directly from the
issuer or from an underwriter or purchased from or sold to a market maker for
the securities. Therefore, the Series usually will pay no brokerage commissions
on such transactions. Purchases from underwriters of portfolio securities will
include a commission or concession paid by the issuer to the underwriter and
purchases from or sales to dealers serving as market makers will include a
dealer's markup or markdown. Principal transactions, including riskless
principal transactions, are not afforded the protection of the safe harbor in
Section 28(e) of the Securities Exchange Act of 1934.
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
dealer markups and markdowns and any brokerage commissions. This policy governs
the selection of dealers and brokers 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.
We select broker-dealers on the basis of their professional capability and the
value and quality of their brokerage and research services. Normally, the
selection is made by our 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. They are responsible for the
negotiation of prices and commissions.
We may pay a brokerage commission on the purchase or sale of a security that
could be purchased from or sold to a market maker if our net cost of the
purchase or the net proceeds to us of the sale are at least as favorable as we
could obtain on a direct purchase or sale. Brokers who receive such commissions
may 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 trading equipment and computer software
packages, acquired from third-party suppliers, that enable Lord Abbett to access
various information bases and may include the furnishing of analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts. 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
Series; 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 Series, 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 purchased such equipment and software
packages directly from the suppliers and attempted to generate such additional
information through its own staff. 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.
We will not seek "reciprocal" dealer business (for the purpose of applying
commissions in whole or in part for our benefit or otherwise) from
broker-dealers as consideration for the direction to them of portfolio business.
5.
Purchases, Redemptions
and Shareholder Services
The Series values its portfolio securities at market value as of the close of
the New York Stock Exchange. Market value will be determined as follows:
securities listed or admitted to trading privileges on the New York or American
Stock Exchange or on the NASDAQ National Market System are valued at the last
sales price, or, if there is no sale on that day, at the mean between the last
bid and asked prices, or, in the case of bonds, in the over-the-counter market
if, in the judgment of the Fund's officers, that market more accurately reflects
the market value of the bonds. Over-the-counter securities not traded on the
NASDAQ National Market System are valued at the mean between the last bid and
asked prices. Securities for which market quotations are not available are
valued at fair market value under procedures approved by the Board of Trustees.
The Series is expected to commence operations on , 1996. Based on estimated net
asset value and maximum offering price per share as of such date, the maximum
offering price of our shares on , 1996 will be computed as follows:
Net asset value per share (net assets divided by
shares outstanding)..........................................$
Maximum offering price per share (net asset value
divided by .9525)................................................$
The Fund has entered into a distribution agreement with Lord Abbett under which
Lord Abbett is obligated to use its best efforts to find purchasers for the
shares of the Series and to make reasonable efforts to sell Series shares, so
long as, in Lord Abbett's judgment, a substantial distribution can be obtained
by reasonable efforts.
As described in the Prospectus, the Series has adopted a Distribution Plan and
Agreement (the "Plan") pursuant to Rule 12b-1 of the Act. In adopting the Plan
and in approving its continuance, the Board of Trustees has concluded that there
is a reasonable likelihood that the Plan will benefit the Series and its
shareholders. The expected benefits include greater sales and lower redemptions
of Series shares, which should allow the Series to maintain a consistent cash
flow, and a higher quality of service to shareholders by dealers than would
otherwise be the case. Lord Abbett will use all amounts received under the Plan
for payments to dealers for (i) providing continuous services to the Series'
shareholders, such as answering shareholder inquiries, maintaining records, and
assisting shareholders in making redemptions, transfers, additional purchases
and exchanges and (ii) their assistance in distributing shares of the Series.
The Plan requires the Board of Trustees to review, on a quarterly basis, written
reports of all amounts expended pursuant to the Plan and the purpose for which
such expenditures were made. The Plan shall continue in effect only if its
continuance is specifically approved at least annually by vote of the Fund's
Board of Trustees and of the Fund's 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 such Plan and
agreements. The Plan may not be amended to increase materially the amount spent
for distribution expenses without approval by a majority of the Series'
outstanding voting securities and the approval of a majority of the trustees,
including a majority of the Series' outside trustees. The Plan may be terminated
at any time by vote of a majority of the Fund's outside trustees or by vote of a
majority of the Series' outstanding voting securities.
As stated in the Prospectus, a 1% contingent deferred reimbursement charge
("CDRC") is imposed with respect to those shares (or shares of another Lord
Abbett-sponsored fund or series acquired through exchange of such shares) on
which the Series has paid the one-time 1% 12b-1 sales distribution fee 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.
No CDRC is payable on redemptions by tax qualified plans under section 401 of
the Internal Revenue Code for benefit payments due to plan loans, hardship
withdrawals, death, retirement or separation from service with respect to plan
participants. The CDRC is received by the 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 large, long-term shareholder account in the Series. Shares of a fund or
series on which such 1% sales distribution fee has been paid may not be
exchanged into a fund or series with a Rule 12b-1 plan for which the payment
provisions have not been in effect for at least one year.
The other Lord Abbett-sponsored funds and series which participate in the
Telephone Exchange Privilege (except Lord Abbett U.S. Government Securities
Money Market Fund, Inc. ("GSMMF") and certain series of Lord Abbett Tax-Free
Income Fund, Inc. and Lord Abbett Tax-Free Income Trust for which a Rule 12b-1
Plan is not yet in effect (collectively, the "Non-Plan Series")) have instituted
a CDRC on the same terms and conditions. No CDRC will be charged on an exchange
of shares between Lord Abbett funds. Upon redemption of shares out of the Lord
Abbett family of funds, the CDRC will be charged on behalf of and paid to the
fund in which the original purchase (subject to a CDRC) occurred. Thus, if
shares of a Lord Abbett fund are exchanged for shares of another such fund and
the shares tendered ("Exchanged Shares") are subject to a CDRC, the CDRC will
carry over to the shares being acquired, including GSMMF ("Acquired Shares").
Any CDRC 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 GSMMF and the Non-Plan
Series will not pay a 1% sales distribution fee on $1 million purchases of their
own shares, and will therefore not impose their own CDRC, GSMMF will collect the
CDRC on behalf of other Lord Abbett funds. Acquired shares held in GSMMF which
are subject to a CDRC will be credited with the time such shares are held in
that fund.
In no event will the amount of the CDRC exceed 1% 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 CDRC will be
imposed when the investor redeems (i) amounts derived from increases in the
value of the account 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 1% sales distribution fee on issuance (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
determining whether a CDRC is payable, (a) shares not subject to the CDRC will
be redeemed before shares subject to the CDRC and (b) of shares subject to a
CDRC, those held the longest will be the first to be redeemed.
Under the terms of the Statement of Intention to invest $100,000 or more over a
13-month period as described in the Prospectus, shares of Lord Abbett-sponsored
funds (other than shares of Lord Abbett Equity Fund ("LAEF"), Lord Abbett Series
Fund ("LASF"), Lord Abbett Research Fund if not offered to the general public
("LARF"), and GSMMF, unless holdings in GSMMF are attributable to shares
exchanged from a Lord Abbett-sponsored fund offered with a 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. 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 Series to sell, the full amount indicated.
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, and GSMMF, unless holdings in GSMMF are attributable to shares
exchanged from a Lord Abbett-sponsored fund offered with a front-end sales
charge or from Lord Abbett Counsel Group) 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.
As stated in the Prospectus, our shares may be purchased at net asset value by
our trustees, employees of Lord Abbett, employees of our shareholder servicing
agent and employees of any securities dealer having a sales agreement with Lord
Abbett who consents to such purchases or by the 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 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
"trustees" and "employees" include a trustee's or employee's spouse (including
the surviving spouse of a deceased trustee or employee). The terms "our
trustees" and "employees of Lord Abbett" also include other family members and
retired trustees and employees.
Our shares also may be purchased at net asset value (a) at $1 million or more,
(b) with dividends and distributions from other Lord Abbett-sponsored funds,
except for LARF, LAEF, LASF and Lord Abbett Counsel Group, (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 in accordance with certain
standards approved by Lord Abbett, 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, and (e) by employees, partners and owners of unaffiliated
consultants and advisors to Lord Abbett or Lord Abbett-sponsored funds who
consent to such purchase if such persons provide service to Lord Abbett or such
funds on a continuing basis and are familiar with such funds. Shares are offered
at net asset value to these investors for the purpose of promoting goodwill with
employees and others with whom Lord Abbett and/or the Fund have business
relationships.
Our shares also may be purchased at net asset value, subject to appropriate
documentation, through a securities dealer where the amount invested represents
redemption proceeds from shares ("Redeemed Shares") of a registered open-end
management investment company not distributed or managed by Lord Abbett (other
than a money market fund), if such redemption has occurred no more than 60 days
prior to the purchase of our shares, the Redeemed Shares were held for at least
six months prior to redemption and the proceeds of redemption were maintained in
cash or a money market fund prior to purchase. Purchasers should consider the
impact, if any, of contingent deferred sales charges in determining whether to
redeem shares for subsequent investment in our shares. Lord Abbett may suspend,
change or terminate this purchase option at any time.
Our shares may be issued at net asset value in exchange for the assets, subject
to possible tax adjustment, of a personal holding company or an investment
company. There are economies of selling efforts and sales-related expenses with
respect to offers to these investors and those referred to above.
The Prospectus briefly describes the Telephone Exchange Privilege. You may
exchange some or all of your shares for those of Lord Abbett-sponsored funds
currently offered to the public with a sales charge and GSMMF, 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 Series being exchanged must have a value equal to at least the
minimum initial investment required for the fund into which the exchange is
made.
Shareholders in such other funds have the same right to exchange their shares
for the Series' 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 (unless a sales charge was
paid on the initial investment). 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 other Lord Abbett-sponsored funds which are eligible for the exchange
privilege, except LASF which offers its shares only in connection with certain
variable annuity contracts, LAEF which is not issuing shares, LARF and Lord
Abbett Counsel Group.
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 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 50 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 60 days' 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.
Under the Div-Move service described in the Prospectus, you can invest the
dividends paid on your account into an existing account 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.
The Invest-A-Matic method of investing in the Series and/or any other Eligible
Fund is described in the Prospectus. To avail yourself of this method you
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.
The Systematic Withdrawal Plan (the "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. 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.
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 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
The Series will compute its average annual compounded rate of total return
during specified periods that would equate the initial amount invested to the
ending redeemable value of such investment by adding one to the computed average
annual total return, raising the sum to a power equal to the number of years
covered by the computation and multiplying the result by one thousand dollars,
which represents a hypothetical initial investment. The calculation assumes
deduction of the maximum sales charge from the initial amount invested and
reinvestment of all income dividends and capital gains distributions on the
reinvestment dates at prices calculated as stated in the Prospectus. The ending
redeemable value is determined by assuming a complete redemption at the end of
the period(s) covered by the average annual total return computation.
Our yield quotation will be based on a 30-day period ended on a specified date,
computed by dividing our net investment income per share earned during the
period by our maximum offering price per share on the last day of the period.
This is determined by finding the following quotient: take the Series' 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 Series 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.
These figures represent past performance, and an investor should be aware that
the investment return and principal value of a Series 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 such performance will
be repeated in the future.
7.
Taxes
The value of any shares redeemed, 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 Series
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 capital gains
distributions 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 Series 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 Series intends
to distribute to shareholders each year an amount adequate to avoid the
imposition of such excise tax. Dividends paid by the Series will qualify for the
dividends-received deduction for corporations to the extent they are derived
from dividends paid by domestic corporations.
8.
Information About the Fund
The Trustees, trustees and officers of Lord Abbett-sponsored mutual funds,
together with the partners and employees of Lord Abbett, are permitted to
purchase and sell securities for their personal investment accounts. In engaging
in personal securities transactions, however, such persons are subject to
requirements and restrictions contained in the Fund's Code of Ethics which
complies, in substance, with each of the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing. Among other things,
the Code requires that Lord Abbett partners and employees obtain advance
approval before buying or selling securities, submit confirmations and quarterly
transaction reports, and obtain approval before becoming a Trustee of any
company; and it prohibits such persons from investing in a security 7 days
before or after any Lord Abbett-sponsored fund or Lord Abbett-managed account
considers a trade or trades in such security, from profiting on trades of the
same security within 60 days and from trading on material and non-public
information. The Code imposes certain similar requirements and restrictions on
the independent Trustees and trustees of each Lord Abbett-sponsored mutual fund
to the extent contemplated by the recommendations of the Advisory Group.
<PAGE>
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
None.
(b) Exhibits -
99.B4 Form of Specimen Certificate*
99.B5 Form of Addendum to Management Agreement*
99.B6 Distribution agreement between Registrant and Lord
Abbett & Co.****
99.B7 Retirement Plan for Non-interested Person Trustees
and Trustees of Lord Abbett Funds.**
Lord Abbett Prototype Retirements Plans***
(1) 401(k)
(2) IRA
(3) 403(b)
(4) Profit-Sharing, and
(5) Money Purchases
99.B15 Form of Rule 12b-1 Distribution Plan and Agreement.*
* Filed herewith.
** Incorporated by reference to Post-Effective Amendment No. 7 to the
Registration Statement (on Form N1-A) of Lord Abbett Equity Fund (File
No. 811-6033).
*** Incorporated by reference to Post-Effective Amendment No. 6 to
the Registration Statement (on Form N1-A) of Lord Abbett Securities
Trust (File No. 811-7538).
**** Previously filed.
Item 25. Persons Controlled by or Under Common Control with Registrant
None.
Item 26. Number of Record Holders of Securities
At __________, 1996 - _______
Item 27. Indemnification
Registrant is incorporated under the laws of the State of Maryland and is
subject to Section 2-418 of the Corporations and Associations Article of
the Annotated Code of the State of Maryland controlling the indemnification
of Trustees and officers. Since Registrant has its executive offices in
the State of New York, and is qualified as a foreign corporation doing
business in such State, the persons covered by the foregoing statute may
also be entitled to and subject to the limitations of the indemnification
provisions of Section 721-726 of the New York Business Corporation Law.
The general effect of these statutes is to protect officers, Trustees and
employees of Registrant against legal liability and expenses incurred by
reason of their positions with the Registrant. The statutes provide for
indemnification for liability for proceedings not brought on behalf of the
corporation and for those brought on behalf of the corporation, and in each
case place conditions under which indemnification will be permitted,
including requirements that the officer, Trustee or employee acted in good
faith. Under certain conditions, payment of expenses in advance of final
disposition may be permitted. The By-Laws of Registrant, without limiting
the authority of Registrant to indemnify any of its officers, employees or
agents to the extent consistent with applicable law, makes the
indemnification of its Trustees mandatory subject only to the conditions
and limitations imposed by the above-mentioned Section 2-418 of Maryland
Law and by the provisions of Section 17(h) of the Investment Company Act of
1940 as interpreted and required to be implemented by SEC Release No.
IC-11330 of September 4, 1980.
In referring in its By-Laws to, and making indemnification of Trustees
subject to the conditions and limitations of, both Section 2-418 of the
Maryland Law and Section 17(h) of the Investment Company Act of 1940,
Registrant intends that conditions and limitations on the extent of the
indemnification of Trustees imposed by the provisions of either Section
2-418 or Section 17(h) shall apply and that any inconsistency between the
two will be resolved by applying the provisions of said Section 17(h) if
the condition or limitation imposed by Section 17(h) is the more stringent.
In referring in its By-Laws to SEC Release No. IC-11330 as the source for
interpretation and implementation of said Section 17(h), Registrant
understands that it would be required under its By-Laws to use reasonable
and fair means in determining whether indemnification of a Trustee should
be made and undertakes to use either (1) a final decision on the merits by
a court or other body before whom the proceeding was brought that the
person to be indemnified ("indemnitee") was not liable to Registrant or to
its security holders by reason of willful malfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of
his office ("disabling conduct") or (2) in the absence of such a decision,
a reasonable determination, based upon a review of the facts, that the
indemnitee was not liable by reason of such disabling conduct, by (a) the
vote of a majority of a quorum of Trustees who are neither "interested
persons" (as defined in the 1940 Act) of Registrant nor parties to the
proceeding, or (b) an independent legal counsel in a written opinion. Also,
Registrant will make advances of attorneys' fees or other expenses incurred
by a Trustee in his defense only if (in addition to his undertaking to
repay the advance if he is not ultimately entitled to indemnification) (1)
the indemnitee provides a security for his undertaking,
<PAGE>
(2) Registrant shall be insured against losses arising by reason of any
lawful advances, or (3) a majority of a quorum of the non-interested,
non-party Trustees of Registrant, or an independent legal counsel in a
written opinion, shall determine, based on a review of readily available
facts, that there is reason to believe that the indemnitee ultimately will
be found entitled to indemnification.
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. In addition, Registrant maintains a Trustees'
and officers' errors and omissions liability insurance policy protecting
Trustees and officers against liability for breach of duty, negligent act,
error or omission committed in their capacity as Trustees or officers. The
policy contains certain exclusions, among which is exclusion from coverage
for active or deliberate dishonest or fraudulent acts and exclusion for
fines or penalties imposed by law or other matters deemed uninsurable.
Item 28. Business and Other Connections of Investment Adviser
Lord, Abbett & Co. acts as investment advisor for seventeen other open-end
investment companies (of which it is principal underwriter for fifteen),
and as investment adviser to approximately 5,100 private accounts. Other
than acting as Trustees 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 Trustee, officer, employee, partner or trustee of any
entity except as follows:
John J. Walsh
Trustee
The Brooklyn Hospital Center
100 Parkside Avenue
Brooklyn, N.Y.
Item 29. Principal Underwriter
(a) Affiliated Fund, Inc.
Lord Abbett U. S. Government Securities Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Value Appreciation Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett California Tax-Free Income Fund, Inc.
Lord Abbett Fundamental Value Fund, Inc.
Lord Abbett Global Fund, Inc.
Lord Abbett U. S. Government Securities Money Market Fund, Inc.
Lord Abbett Series Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Tax-Free Income Trust
Lord Abbett Securities Trust
Lord Abbett Investment Trust
Lord Abbett Research Fund, Inc.
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
-------------------- ---------------
Ronald P. Lynch Chairman
Robert S. Dow President
Kenneth B. Cutler Vice President & Secretary
Stephen I. Allen Vice President
Daniel E. Carper Vice President
Thomas S. Henderson Vice President
Robert G. Morris Vice President
E. Wayne Nordberg Vice President
John J. Walsh Vice President
(1) Each of the above has a principal business address
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 canceled stock certificates and 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.
<PAGE>
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
22th day of December 1995.
LORD ABBETT INVESTMENT TRUST
By /S/ RONALD P. LYNCH
Ronald P. Lynch, Chairman
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.
NAME TITLE DATE
- ----- ----- ----
Chairman,
/s/ Ronald P. Lynch Trustee December 22, 1995
/s/ John J. Gargana, Jr. Vice President & December 22, 1995
Chief Financial Officer
/s/ E. Thayer Bigelow Trustee December 22, 1995
/s/ Stewart S. Dixon Trustee December 22, 1995
/s/ Robert S. Dow Trustee & President December 22, 1995
/s/ John C. Jansing Trustee December 22, 1995
/s/ C. Alan MacDonald Trustee December 22, 1995
/s/ Hansel B. Millican, Jr. Trustee December 22, 1995
/s/ Thomas J. Neff Trustee December 22, 1995
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- ------- -----------
99.B1 Form of Articles Supplementary to Articles of Incorporation
99.B4 Form of Specimen Share Certificate
99.B15 Form of Rule 12b-1 Plan (California Series)
EXHIBIT 99.B4
LORD ABBETT INVESTMENT TRUST
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
U.S. GOVERNMENT SECURITIES SERIES
CERTIFICATE NO. DATE SHARES ACCOUNT NO.
THIS IS TO CERTIFY THAT CUSIP NO.
is the registered holder of fully paid and non-assessable Shares, of
beneficial iterest, of a series, U.S. Government Securities series (herein
called the "Series"), of the LORD ABBETT INVESTMENT TRUST (hereinafter called
the "Trust") transferable on the books of the Trust in person, or by duly
authorized attorney, upon surrender of this Certificate properly endorsed. This
Cerificate is not valid until countersigned by a Transfer Agent and Registrar.
WITNESS the seal of the Trust and the signatures of its duly authorized
officers.
Dated:
/s/ Keith O'Connor Ronald P. Lynch
Treasurer Chairman of the Board
Countersigned:
UNITED MISSOURI BANK OF KANSAS CITY,
National Association Transfer Agent and Registrar
By: DST Systems, Inc. SERVICE AGENT
(Kansas City, Missouri)
AUTHORIZED SIGNATURE
LORD ABBETT INVESTMENT TRUST
CORPORATE SEAL
1993
A DELAWARE BUSINESS TRUST
EXHIBIT 99.B5
Addendum to Management
Agreement between Lord Abbett
Investment Trust and Lord, Abbett & Co.
Dated October 20, 1993 (the "Agreement")
Lord, Abbett & Co. and Lord Abbett Investment Trust (the "Trust") on
behalf of Lord Abbett U.S. Government Series ("Fund Series") do hereby agree
that (a) the annual management fee rate for the Fund Series with respect to
paragraph 2 of the Agreement shall be three-quarters (.50) of one percent (1%)
of the average daily net assets of the Fund Series and (b) the expense ratio for
the determination of the repayment by the Fund Series of expenses voluntarily
paid or reimbursed by the Investment Manager pursuant to paragraph 5 of the
Agreement shall be ___% for the period commencing on the first day of the
calendar quarter after the net assets of the Fund Series first reach $50
million. There shall be no change in such ratio on the recalculation date (as
defined in the Agreement).
For purposes of Section 15 (a) of the Act, this Addendum and the
Agreement shall together constitute the investment advisory contract of the
Series.
LORD, ABBETT & CO.
BY: ________________________
Managing Partner
LORD ABBETT INVESTMENT TRUST
(on behalf of Lord Abbett U.S. Government Series)
BY: _______________________
Vice President
Dated: December , 1995
EXHIBIT 99.B15
Rule 12b-1 Distribution Plan and Agreement
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of the day of
December 1995 by and between LORD ABBETT INVESTMENT TRUST, a Delaware business
trust (the "Company") on behalf of its Lord Abbett U.S. Government Securities
Series (the "Fund Series"), and LORD, ABBETT & CO., a New York partnership (the
"Distributor").
WHEREAS, the Company is an open-end management investment company and
is registered as such under the Investment Company Act of 1940, as amended (the
"Act"); and the Distributor acts as the Company's distributor pursuant to the
Distribution Agreement between the Company and the Distributor, dated the 20th
day of October, 1993.
WHEREAS, the Company desires to adopt a Distribution Plan and Agreement
(the "Plan") for the Fund Series with the Distributor, as permitted by Rule
12b-1 under the Act, pursuant to which the Fund Series may make certain payments
to the Distributor for payment to broker-dealers with respect to the
distribution of shares of the Fund Series.
WHEREAS, the Company's Trustees have determined that there is a
reasonable likelihood that the Plan will benefit the Fund Series and its
shareholders.
NOW, THEREFORE, in consideration of the mutual covenants and of other
good and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Company hereby authorizes the Distributor to enter into
distributor's agreements (the "Distributor's Agreements") with independent
broker-dealers appointed by the Distributor providing for the payment to such
broker-dealers of fees which the Distributor receives from the Fund Series in
order to provide incentives to the broker-dealers (i) to sell shares of the Fund
Series and (ii) to maintain Fund Series shareholder accounts and/or to provide
Fund Series shareholders with service, including shareholder liaison services
such as responding to customer inquires and providing information on their
investments. The Plan goes into effect (the "effective date") on the first day
of the calendar quarter subsequent to the Fund Series' net assets reaching $50
million, with respect to all accounts, including those existing at the time and
covered by Distributor's Agreements, except with respect to certain accounts for
which tracking data is not available. The Distributor may, from time to time,
waive or defer payment of fees payable at the time of sale of shares provided
for under paragraph 2 hereof.
2. The Fund Series shall pay to the Distributor pursuant to this Plan
(i) fees for services at an annual rate not to exceed .25 of 1% of the average
daily net asset value of the shares of the Fund Series, sold from the
commencement of the Fund Series' public offering, and held in each account
covered by the Distributor's Agreement; and (ii) with respect to sales at the
breakpoint of $1 million or more, a one-time distribution fee of 1% of the net
asset value of shares sold on or after the effective date. The fees mentioned in
(i) and (ii) of this paragraph are for the purposes mentioned in (ii) and (i),
<PAGE>
respectively, of paragraph 1 of this Plan. In determining whether a shareholder
has made an investment of the above breakpoint, the investment may be deemed to
include the value of other shares of the Fund Series and the value of the shares
of any other Lord Abbett managed fund or series that has a Rule 12b-1 plan
deemed comparable to this Plan for this purpose by the Trustees of the Company
(a "Lord Abbett Rule 12b-1 Fund") which the shareholder could include within the
right of accumulation or statement of intention privileges described in the
Company's Prospectus as in effect at such time. Such fees shall be calculated
and paid quarterly, subject to change by the Trustees of the Company in the
manner contemplated in paragraph 11 of this Plan.
3. If any shares as to which a distribution fee described in paragraph
2 has been paid are redeemed out of the Lord Abbett family of funds on or before
the end of the twenty-fourth month after the month in which the shares were
purchased (the "twenty-fourth-month end"), the shareholder will be required to
pay the Fund Series involved a contingent deferred reimbursement charge of 1% of
the lesser of the cost or then net asset value of the shares; provided, however,
that such reimbursement charge shall not apply to redemptions by tax qualified
retirement plans under Section 401 of the Internal Revenue Code due to plan
loans, hardship withdrawals, death, retirement or separation from service with
respect to plan participants. If such shares in the Fund Series are exchanged
for shares of another Fund series or of another Lord Abbett Rule 12b-1 Fund and
the shares of the other fund or series are later redeemed out of the family
before the twenty-fourth-month end, the 1% contingent deferred reimbursement
charge will be collected by the other Lord Abbett Rule 12b-1 Fund at the time of
redemption and will be paid to the Fund Series. Effective the date hereof, the
Fund Series also will collect such a charge for another Lord Abbett Rule 12b-1
Fund in a similar situation. Adoption of this provision in similar Plans by the
other Lord Abbett Rule 12b-1 Funds and their shareholders represents the
agreement of such funds to collect such charges from their shareholders. The
timing, categories and calculation of this charge may be changed by the
Company's Trustees in the manner contemplated in paragraph 11 of this Plan.
4. Subject to the limits in paragraph 2, the Distributor may use such
amounts received from the Fund Series to finance any activity which is primarily
intended to result in the sale of shares of the Fund Series including, but not
limited to, commissions or other payments relating to selling or servicing
efforts, provided: (i) that the Company's Trustees (in the manner contemplated
in paragraph 11 of this Plan) shall have approved the timing, categories and
calculation of such payments, and (ii) the Distributor shall neither retain any
portion of such payments, nor use such payments for its obligations under the
above-mentioned Distribution Agreement.
5. The value of the net assets of the Fund Series shall be determined
as provided in the Declaration of Trust of the Company. If the Distributor
waives all or a portion of fees which are to be paid by the Fund Series
hereunder, the Distributor shall not be deemed to have waived its rights under
this Agreement to have the Fund Series pay such fees in the future.
<PAGE>
6. The Secretary of the Trust, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Fund Series hereunder and shall provide to the Company's
Trustees, and the Trustees shall review, at least quarterly, a written report of
the amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
7. Neither this Plan nor any other transaction between the parties
hereto pursuant to this Plan shall be invalidated or in any way affected by the
fact that any or all of the Trustees, officers, shareholders, or other
representatives of the Company are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, trustees, officers, partners, or other representatives of the
Distributor are or may be "interested persons" of the Company, except as
otherwise may be provided in the Act.
8. The Distributor shall give the Company the benefit of the
Distributor's best judgment and good faith efforts in rendering services under
this Plan. Other than to abide by the provisions hereof and render the services
called for hereunder in good faith, the Distributor assumes no responsibility
under this Plan and, having so acted, the Distributor shall not be held liable
or held accountable for any mistake of law or fact, or for any loss or damage
arising or resulting therefrom suffered by the Company, the Fund Series or any
of the shareholders, creditors, Trustees, or officers of the Company; provided
however, that nothing herein shall be deemed to protect the Distributor against
any liability to the Company or the Fund Series' shareholders by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder, or by reason of the reckless disregard of its obligation and
duties hereunder.
9. This Agreement shall be effective on the date hereof, and shall
continue in effect for a period of more than one year from such date only so
long as such continuance is specifically approved at least annually by a vote of
the Trustees of the Company, including the vote of a majority of the Trustees
who are not "interested persons" of the Company and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to the Plan, cast in person at a meeting called for the purpose of
voting on such renewal.
10. This Plan may not be amended to increase materially the amount to
be spent by the Fund Series hereunder without the vote of a majority of its
outstanding voting securities and each material amendment must be approved by a
vote of the Trustees of the Company, including the vote of a majority of the
Trustees who are not "interested persons" of the Company and who have no direct
or indirect financial interest in the operation of this Plan or in any agreement
related to the Plan, cast in person at a meeting called for the purpose of
voting on such amendment.
<PAGE>
11. Amendments to this Plan other than material amendments of the kind
referred to in the forgoing paragraph 10 may be adopted by a vote of the
Trustees of the Company, including the vote of a majority of the Trustees who
are not "interested persons" of the Company and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Trustees of the Company may, by such a vote, interpret this Plan
and make all determinations necessary or advisable for its administration.
12. The Plan may be terminated at any time without the payment of any
penalty by (a) the vote of a majority of the Trustees of the Company who are not
"interested persons" of the Company and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by vote of a majority of the outstanding voting securities of the Series.
This Plan shall automatically terminate in the event of its assignment. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meaning as those terms are
defined in the Act.
13. The obligations of the Company, including those imposed hereby, 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 Company
individually, but are binding only upon the assets and property of the Company.
Any and all personal liability, either at common law or in equity, or by statute
or constitution, of every such Trustee, shareholder, officer, employee or agent
for any breach of the Company of any agreement, representation or warranty
hereunder is hereby expressly waived as a condition of and in consideration for
the execution of this Agreement by the Company.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and on its behalf by its duly authorized representative
as of the date first above written.
LORD ABBETT INVESTMENT TRUST
By:
Chairman
ATTEST:
Assistant Secretary
LORD, ABBETT & CO.
By:
Partner
