1940 Act File No. 811-7988
1933 Act File No. 333-01399
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No. __
[x] Post-Effective Amendment No. 1
Lord Abbett Investment Trust
(Exact Name of Registrant as Specified in Charter)
The General Motors Building, 767 Fifth Avenue
New York, New York 10153
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: 800-426-1130
Kenneth B. Cutler
Vice President and Secretary
Lord Abbett Investment Trust
The General Motors Building
767 Fifth Avenue
New York, New York 10153
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of the registration statement.
No filing fee is required because an indefinite number of shares are being
registered pursuant to Rule 24f-2 under the Investment Company Act of 1940.
It is proposed that this filing will become effective on
the date of filing pursuant to paragraph (b) of Rule 485.
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<PAGE>
Lord Abbett Investment Trust
CROSS-REFERENCE SHEET
ITEMS REQUIRED BY FORM N-14
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Part A
Item No. Item Caption Prospectus Caption
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<S> <C> <C>
1. Beginning of Registration Statement and Outside Cover Page of Registration Statement;
Front Cover Page of Prospectus Cover Page of Proxy Statement and
Prospectus
2. Beginning and Outside Back Cover Page of Table of Contents
Prospectus
3. Fee Table, Synopsis and Risk Factors Fee Table; Summary of Proposal
4. Information about the Transaction Summary of Proposal; Information
About the Reorganization
5. Information about the Registrant Summary of Proposal; Comparative
Information about the Acquiring Fund
and the Acquired Fund; Additional
Information; Prospectus of Lord
Abbett Investment Trust dated
March 1, 1996
6. Information about the Company Being Acquired Summary of Proposal; Comparative
Information about the Acquiring Fund
and the Acquired Fund
7. Voting Information Special Meeting of Shareholders of
the Securities Trust; Notice of
Special Meeting of Shareholders;
Summary of Proposal
8. Interest of Certain Persons and Experts Additional Information
9. Additional Information Required for Reoffering Not Applicable
by Persons Deemed to be Underwriters
</TABLE>
<PAGE>
<TABLE>
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Part B Statement of Additional
Item No. Item Caption Information Caption
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10. Cover Page Cover Page
11. Table of Contents Not Applicable
12. Additional Information about the Registrant Cover Page of Proxy Statement and
Prospectus; Acquiring Fund
Statement of
Additional Information incorporate
by reference.
13. Additional Information about the Company Being Cover Page of Proxy Statement and
Acquired Prospectus; Acquired Fund Statement
of Additional Information incorporated
by reference.
14. Financial Statements Pro-forma Financial Statements
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Part C
Item No. Part C Caption
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<S> <C> <C>
15. Indemnification Indemnification
16. Exhibits Exhibits
17. Undertakings Undertakings
Signatures
</TABLE>
<PAGE>
[Letterhead of Lord Abbett Securities Trust -
Lord Abbett Balanced Trust]
Dear Shareholder:
You are cordially invited to attend the Special Meeting of Shareholders of
Lord Abbett Securities Trust scheduled to be held on June 19, 1996, at 11:00
a.m., at the General Motors Building, 767 Fifth Avenue, New York, New York. Your
Board of Trustees looks forward to greeting those shareholders who are able to
attend.
At the meeting, in addition to the appointment of auditors, you will be
asked to approve or disapprove a proposal to combine your Fund with another Lord
Abbett fund which has an investment objective and policies substantially similar
to those of your Fund. The investment policies of the other fund are proposed to
be changed from those of your Fund to provide greater uniformity among the Lord
Abbett-sponsored funds and greater flexibility in the management of your Fund's
portfolio.
Such proposal, if approved, will eliminate the offering of substantially
identical funds, as well as take advantage of potential economies of scale. In
addition, the proposed combination will be a tax-free reorganization for federal
income tax purposes. Such proposal is fully described in the enclosed proxy
statement and prospectus. I encourage you to review the proxy statement and
prospectus for all the details regarding the meeting agenda.
Your Board of Trustees believes the matters proposed in the agenda are in
the best interests of the Fund and its shareholders and unanimously recommends a
vote "for" each proposal. Regardless of the number of shares you own, it is
important that they be represented and voted. Accordingly, please sign, date and
mail the enclosed proxy card in the postage paid return envelope. If you have
any questions regarding the meeting agenda or need assistance in voting, please
contact our proxy solicitor, D.F. King & Co., Inc., at 1-800-207-3156.
Your prompt response will help save the Fund the expense of additional
solicitation.
Sincerely,
/S/ RONALD P. LYNCH
Ronald P. Lynch
Chairman of the Board
April 24, 1996
<PAGE>
LORD ABBETT SECURITIES TRUST -
LORD ABBETT BALANCED TRUST
767 Fifth Avenue
New York, New York 10153
Notice to shareholders of Lord Abbett Balanced Trust April 24, 1996
(the "Acquired Fund") of a Special Meeting of shareholders
of Lord Abbett Securities Trust to be held on June 19, 1996
Notice is given hereby to shareholders of the Acquired Fund of a special meeting
of the shareholders of Lord Abbett Securities Trust. The meeting will be held in
the offices of Lord, Abbett & Co., on the 11th floor of The General Motors
Building, 767 Fifth Avenue, New York, New York on June 19, 1996, at 11:00 a.m.
for the following purposes and to transact such other business as may properly
come before the meeting and any adjournments thereof.
ITEM 1. To consider and act upon an Agreement and Plan of Reorganization between
the Acquired Fund, a series of Lord Abbett Securities Trust, and the
Balanced Series, a series of Lord Abbett Investment Trust (the
"Acquiring Fund"), providing for (a) the transfer of all of the assets
of the Acquired Fund to the Acquiring Fund in exchange for shares of a
new class of the Acquiring Fund (to be designated "Class C Shares") and
the assumption by the Acquiring Fund of all of the liabilities of the
Acquired Fund, (b) the distribution of such Class C Shares to the
shareholders of the Acquired Fund and (c) the subsequent termination of
the Acquired Fund. (The investment policies and restrictions of the
Acquiring Fund are expected to differ from those of the Acquired Fund
in ways that are intended to provide greater flexibility in the
management of the portfolio of the Acquiring Fund and to provide
greater uniformity in the investment policies and restrictions among
the various Lord Abbett-sponsored funds.) A vote in favor of this Item
1 will be deemed to be a vote to authorize the Acquired Fund, as the
sole shareholder of Class C Shares prior to this reorganization, to
approve a proposed distribution plan pursuant to Section 12 of the
Investment Company Act of 1940, as amended, and Rule 12b-1 thereunder
applicable to that class.
ITEM 2. To ratify the selection of Deloitte & Touche LLP as the independent
public accountants of the Lord Abbett Securities Trust for the current
fiscal year.
By order of the Board of Trustees
Kenneth B. Cutler
Vice President and Secretary
<PAGE>
The Board of Trustees has fixed the close of business on March 22, 1996 as the
record date for determination of shareholders of the Acquired Fund entitled to
notice of and to vote at the meeting. Shareholders are entitled to one vote for
each share held. As of March 22, there were 250,698 shares of the Acquired Fund
and 138,028,692 shares of Lord Abbett Securities Trust issued and outstanding.
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PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD.
SIGN, DATE AND RETURN IT IN THE ENVELOPE PROVIDED.
TO SAVE THE COST OF ADDITIONAL SOLICITATIONS, PLEASE MAIL YOUR PROXY
PROMPTLY.
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<PAGE>
Proxy Statement and Prospectus Dated April 24, 1996
Acquisition of the Assets of
Lord Abbett Balanced Trust, a series of
Lord Abbett Securities Trust
The General Motors Building, 767 Fifth Avenue
New York, NY 10153
by and in exchange for Class C Shares of
Balanced Series, a series of
Lord Abbett Investment Trust
The General Motors Building, 767 Fifth Avenue
New York, NY 10153
This Proxy Statement and Prospectus relates to Class C shares (the "Class C
shares") of the Balanced Series (the "Acquiring Fund"), a series of Lord Abbett
Investment Trust (the "Investment Trust"), to be issued to, and in exchange for
all the assets of, Lord Abbett Balanced Trust (the "Acquired Fund" and, together
with the Acquiring Fund, the "Funds"), a series of Lord Abbett Securities Trust
(the "Securities Trust"). The telephone number of the principal executive office
of each of the Funds is 1- 800-426-1130. In exchange for such assets, the
Acquiring Fund will also assume all of the liabilities of the Acquired Fund.
Following receipt of the Acquiring Fund Class C shares, the Acquired Fund will
be terminated and the Class C shares will be distributed to the shareholders of
the Acquired Fund. The shareholders of the Acquired Fund are being asked to vote
to approve or disapprove these proposed transactions (the "Reorganization"),
which are more fully described in this Proxy Statement and Prospectus.
The Investment Trust and the Securities Trust are open-end diversified
investment management companies that seek current income and capital growth.
Lord, Abbett & Co. ("Lord Abbett") serves as investment manager to both Funds.
The Class C shares of the Acquiring Fund will be a newly-created class of
shares that will share pro-rata with the existing class of Acquiring Fund shares
(the "Class A shares") in the portfolio, income and expenses of the Acquiring
Fund, except that each class will bear the expense of its own distribution and
shareholder servicing arrangements and certain other expenses. See "Information
About the Reorganization -- Shares of the Acquiring Fund." The distribution and
shareholder servicing arrangements for the Class C shares will be substantially
the same as the arrangements currently applicable to the Acquired Fund shares.
The trustees of the Securities Trust believe that the proposed transaction will
enable the shareholders of the Acquired Fund to benefit from economies of scale
while continuing to invest in a portfolio of securities managed by Lord Abbett
under an investment objective
Any shareholder having a question regarding the meeting agenda or needing
assistance in voting, should contact the Acquired Fund's proxy solicitor, D.F.
King & Co., Inc., at 1-800-207-3156.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<PAGE>
substantially similar to that of the Acquired Fund. See "Information About the
Reorganization -- Reasons for the Reorganization."
This Proxy Statement and Prospectus sets forth concisely the information
about the Acquiring Fund that a shareholder of the Acquired Fund should know
before voting on the Reorganization. It should be read and retained for future
reference. Attached as Exhibit A to this Proxy Statement and Prospectus is a
copy of the Agreement and Plan of Reorganization (the "Plan") for the
Reorganization. This Proxy Statement and Prospectus is accompanied by the
Prospectus of the Acquiring Fund dated March 1, 1996 (the "Acquiring Fund
Prospectus"), which Prospectus is incorporated by reference herein. Also
incorporated herein by reference are (a) the Statement of Additional Information
dated the date hereof relating to this Proxy Statement and Prospectus, including
the Statement of Additional Information of the Securities Trust dated March 1,
1996 and the Statement of Additional Information of the Acquiring Fund dated
March 1, 1996, and (b) the Prospectus of the Securities Trust dated March 1,
1996 (the "Acquired Fund Prospectus"). Such Statements of Additional Information
and the Acquired Fund Prospectus are available, upon oral or written request,
and at no charge, from the Acquiring Fund, at its above-noted address or by
calling 1-800-874-3733.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SPECIAL MEETING OF SHAREHOLDERS OF THE SECURITIES TRUST..................... 2
FEE TABLE................................................................... 3
ITEM 1. - APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION.............. 4
SUMMARY OF PROPOSAL................................................... 4
INFORMATION ABOUT THE REORGANIZATION.................................. 6
COMPARATIVE INFORMATION ABOUT THE
ACQUIRING FUND AND THE ACQUIRED FUND............................ 9
REQUIRED VOTE......................................................... 12
ITEM 2. - RATIFICATION OR REJECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS........................................ 12
ADDITIONAL INFORMATION...................................................... 13
Exhibit A - Agreement and Plan of Reorganization
Exhibit B - Comparison of Certain Investment Policies and Restrictions
</TABLE>
<PAGE>
SPECIAL MEETING OF SHAREHOLDERS OF THE SECURITIES TRUST
This Prospectus and Proxy Statement is furnished in connection with the
solicitation of proxies by and on behalf of the Board of Trustees of the
Securities Trust to be used at a Special Meeting of Shareholders of the
Securities Trust to be held at 11:00 a.m. on June 19, 1996, at the offices of
Lord Abbett on the 11th floor of the General Motors Building, 767 Fifth Avenue,
New York, New York 10153, and at any adjournments thereof. This Prospectus and
Proxy Statement and the enclosed proxy card are first being mailed to
shareholders of the Acquired Fund on or about April 24, 1996.
At the close of business on March 22, 1996 (the "Record Date"), there were
issued and outstanding 250,698 shares of the Acquired Fund and 138,028,692
shares of the Securities Trust. Only shareholders of record as of the close of
business on the Record Date will be entitled to notice of, and to vote at, the
meeting or any adjournment thereof. Shareholders of the Securities Trust are
entitled to one vote for each share. Under Delaware law, shares owned by two or
more persons (whether as joint tenants, co-fiduciaries or otherwise) will be
voted as follows, unless a written instrument or court order providing to the
contrary has been filed with the Secretary of the Securities Trust: (1) if only
one votes, that vote binds all; (2) if more than one votes, the vote of the
majority binds all; and (3) if more than one votes and the vote is evenly
divided, the vote will be cast proportionately.
If the enclosed form of proxy is properly executed and returned in time to
be voted at the meeting, the proxies named therein will vote the shares
represented by the proxy in accordance with the instructions marked thereon. A
proxy may be revoked by the signer at any time at or before the meeting by
written notice to the Securities Trust, by execution of a later-dated proxy or
by voting in person at the meeting. Unless revoked, all valid proxies will be
voted in accordance with the specifications thereon or, in the absence of such
specifications, FOR approval of the Plan and the Reorganization, FOR
ratification of the selection of Deloitte & Touche as the Securities Trust's
independent public accountants and on any other matters as deemed appropriate.
Proxies will be solicited by mail. Additional solicitations may be made by
telephone, facsimile or personal contact by officers or employees of Lord Abbett
and its affiliates. The Securities Trust may also request brokerage houses,
custodians, nominees, and fiduciaries who are shareholders of record to forward
proxy material to the beneficial owners. D.F. King & Co. has been retained to
assist in the solicitation of proxies at an estimated cost of $400. The cost of
the solicitation will be borne by the Acquired Fund.
In the event that sufficient votes to approve the Plan are not received by
the meeting date, the persons named as proxies may propose one or more
adjournments of the meeting to permit further solicitation of proxies. In
determining whether to adjourn the meeting, the following factors may be
considered: the percentage of votes actually cast, the percentage of negative
votes actually cast and the nature of any further solicitation and any
information to be provided to shareholders with respect to such a solicitation.
Any such adjournment will require an affirmative vote of a majority of the
shares present in person or by proxy and entitled to vote at the meeting. The
persons named as proxies will vote upon such adjournment after consideration of
the best interests of all shareholders.
2
<PAGE>
FEE TABLE
Set forth below is a summary of the expenses of the shares of the Acquiring
Fund (currently, the only class of Acquiring Fund shares, to be designated
"Class A"). Also set forth below is a summary comparison of the expenses of (a)
the shares of the Acquired Fund and (b) on a pro-forma basis after giving effect
to the Reorganization, the Class C shares of the Acquiring Fund (to be issued in
the Reorganization in exchange for the shares of the Acquired Fund). The annual
operating expenses shown in the summary for the Acquiring Fund shares and the
Acquired Fund shares are the actual expenses for the fiscal years ended October
31, 1995, and those shown on a pro-forma basis for the Class C shares of the
Acquiring Fund are the estimated expenses of such shares for such year had the
Reorganization occurred on November 1, 1994. The example set forth below is not
a representation of past or future expenses. Actual expenses may be greater or
less than those shown.
<TABLE>
<CAPTION>
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Acquiring Fund shares Acquiring Fund
Shareholder Transaction Expenses (to be designated Class C shares
(as a percentage of offering price) Class A) Acquired Fund shares (pro-forma)
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Maximum Sales Load on Purchases(1)....... 4.75%(2) None(3) None(3)
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Deferred Sales Load (1).................. None(2) 1.00%(4) 1.00%(4)
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Annual Operating Expenses
(as a percentage of average net assets)
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Management Fee........................ 0.00%(5) 0.00%(5) 0.00%(5)
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Rule 12b-1 Fees....................... 0.00% (2) 0.22%(3)(6) 0.22%(3)(6)
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Other Expenses........................ 0.31%(5)(6) 0.00%(5) 0.37%(6)
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Total Operating Expenses.................... 0.31%(5)(6) 0.22%(5)(6) 0.59%(6)
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</TABLE>
Example: Assume each Fund's annual return is 5% and there is no change in the
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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.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
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Acquiring Fund Class A shares (7) $51 $57 $64 $85
Acquired Fund shares (7) $2 $7 $12 $28
Acquiring Fund Class C shares $6 $19 $33 $74
(pro-forma)(7)
</TABLE>
(1) Sales "load" is referred to as sales "charge" and "deferred sales load" is
referred to as "contingent deferred reimbursement charge" throughout this
Proxy Statement and Prospectus.
(2) See "Purchases" in the Acquiring Fund Prospectus accompanying this Proxy
Statement and Prospectus for descriptions of the front-end sales charges
and the 1% contingent deferred reimbursement charges payable on sales and
certain redemptions of these shares and the Rule 12b-1 plan applicable to
the shares of the Acquiring Fund.
(3) Although the Acquired Fund does not, and the Acquiring Fund will not with
respect to the Class C shares, charge a front-end sales charge, investors
should be aware that long-term shareholders may pay, under the Rule 12b-1
plan of the Acquired Fund and under the Rule 12b-1 plan to be applicable
to the Class C shares of the Acquiring Fund (which pays and will pay
annual 0.25% service and 0.75% distribution fees), more than the economic
equivalent of the maximum front-end sales charge as permitted by certain
rules of the National Association of Securities Dealers, Inc.
(4) Redemptions of the Acquired Fund shares are, and redemptions of the Class
C shares will be, subject to a 1% contingent deferred reimbursement charge
if the redemption occurs before the first anniversary of the share
purchase. Holding periods for shares purchased prior to the Reorganization
will carry over for the purpose of determining the applicability of the
CDRC to Class C shares.
(5) Lord Abbett waived its management fee and subsidized certain expenses with
respect to the Acquiring Fund and the Acquired Fund during the past year
(and continues to do so). Without such waiver and subsidies, the
management fee, other expenses (including Rule 12b-1 Fees) and total
operating expenses would have been 0.63% (not annualized), 0.44% (not
annualized) and 1.07% (not annualized), respectively, for the Acquiring
Fund and 0.63% (not annualized), 1.22% (not annualized) and 1.85% (not
annualized), respectively, for the Acquired Fund. Such waivers and
subsidies could be discontinued at any time.
(6) Not annualized.
(7) Based on total actual operating expenses and pro forma operating expenses
shown in the table above.
The foregoing is provided to assist shareholders of the Acquired Fund in
understanding the various expenses the holders of the shares of the Acquiring
Fund and the holders of shares of the Acquired Fund have incurred and that
holders of the shares of the Acquired Fund might incur as holders of the Class C
shares following the Reorganization.
3
<PAGE>
ITEM 1. - APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION
SUMMARY OF PROPOSAL
The following is a summary of certain information contained elsewhere or
incorporated by reference in this Proxy Statement and Prospectus and is
qualified in its entirety by reference to such information.
Overview of Proposed Reorganization. The Plan provides for the transfer to
the Acquiring Fund of all of the assets of the Acquired Fund in exchange for
Class C shares and the assumption by the Acquiring Fund of all of the
liabilities of the Acquired Fund. The Class C shares will then be distributed to
the Acquired Fund shareholders and the Acquired Fund will be terminated. As a
result of the Reorganization, each shareholder of the Acquired Fund will become
the owner of that number of full and fractional Class C shares having an
aggregate net asset value equal to the aggregate net asset value of his or her
shares of the Acquired Fund, as of the close of business on the date the
Acquired Fund assets are transferred to the Acquiring Fund. Consummation of the
Reorganization is subject to the approval of the Acquired Fund's shareholders
and other conditions, including Acquiring Fund shareholder approval of an
amendment to the Investment Trust's Declaration and Agreement of Trust
authorizing the creation of the Class C shares.
To avoid a need to call an Acquiring Fund shareholders' meeting after the
Reorganization, shareholders of the Acquired Fund are being asked to authorize
the Acquired Fund, as the sole Class C shareholder of the Acquiring Fund before
the Reorganization, to approve the proposed distribution plan for the Class C
shares. A vote in favor of the Reorganization will be deemed also to be a vote
to authorize the Acquired Fund to take such action.
The trustees of the Securities Trust believe that the proposed
Reorganization will enable the shareholders of the Acquired Fund to benefit on a
long-term basis from economies of scale while continuing to invest in a
portfolio of securities managed by Lord Abbett under the same investment
objective as that of the Acquired Fund. See "Information About the
Reorganization -- Reasons for Reorganization" for additional information about
the reasons for the Reorganization.
Businesses of the Acquired and Acquiring Funds. The Acquired Fund is a
diversified series of the Securities Trust, an open-end management investment
company organized as a Delaware business trust under an Agreement and
Declaration of Trust dated February 26, 1993. The Securities Trust offers ten
series, one of which is the Acquired Fund, each consisting of one class of
shares. The Acquired Fund commenced investment operations on January 3, 1994. As
of December 31, 1995, the Acquired Fund's net assets were approximately $2
million.
The Acquiring Fund is a diversified series of the Investment Trust, an
open-end management investment company organized under Delaware law on August
16, 1993. To date, the Acquiring Fund offers three series, one of which is the
Acquiring Fund, each consisting of one class of shares. As of December 31, 1995,
the Acquiring Fund's net assets were approximately $6 million.
Investment Objectives and Policies of the Acquired Fund and the Acquiring Fund.
The Acquired Fund and Acquiring Fund have identical investment objectives: to
seek current income and capital growth. The two Funds also have generally
similar investment policies and restrictions. The Acquiring Fund is seeking to
revise and reclassify certain of its investment policies and restrictions in
order to provide greater flexibility in managing the investment portfolio of the
Acquiring Fund and to
4
<PAGE>
provide greater uniformity in the investment policies and restrictions among the
various Lord Abbett-sponsored funds. Most importantly, a number of the
investment policies and restrictions that are classified as fundamental for the
Acquired Fund are to be re-classified as non-fundamental for the Acquiring Fund.
See "Comparative Information About the Acquiring Fund and the Acquired Fund --
Investment Objectives, Policies and Restrictions."
The portfolio of the Acquired Fund is expected to be suitable for the
Acquiring Fund, and so no significant realignment of that portfolio is expected
in connection with the Reorganization.
Purchases and Exchanges. Shares of the Acquired Fund are, and Class C shares
will be, available through certain authorized dealers at the public offering
price, which is the net asset value per share. See "Information About the
Reorganization -- Shares of the Acquiring Fund." Shareholders of the Acquired
Fund may now exchange their shares for shares of the other nine series of the
Securities Trust and for the shares of Lord Abbett U.S. Government Securities
Money Market Fund, Inc. It is expected that holders of Class C shares will be
able to exchange their shares for Class C shares of up to 13 other funds and
series managed by Lord Abbett. Each exchange represents a sale of shares for
which a shareholder may have to recognize a gain or loss under Federal income
tax provisions.
Rule 12b-1 Plan. The Acquired Fund has adopted a plan pursuant to Section 12(b)
of the Investment Company Act of 1940 (the "1940 Act") and Rule 12b-1 thereunder
(a "Rule 12b-1 Plan"), under which it pays service and distribution fees at the
time shares are sold not to exceed 1% of the net asset value of such shares and
at each quarter-end after the first anniversary of the sale of shares at an
annual rate not to exceed 1% of the net asset value of such shares then
outstanding. As part of the Reorganization, the Acquiring Fund will adopt a Rule
12b-1 Plan applicable to the Class C shares that will be substantially the same
as the Acquired Fund's Rule 12b-1 Plan except as noted below under "Information
About the Reorganization -- Rule 12b-1 Plan".
Dividend Policies and Options. The Acquired Fund distributes net investment
income monthly as a dividend. It also may pay supplemental dividends and capital
gains distributions in December or January. The Acquiring Fund has a similar
dividend and distribution policy, except that capital gains may be distributed
in November. The shareholders of each Fund may reinvest such dividends and
distributions in additional shares at net asset value or take such amounts in
cash.
Redemption Procedures. The redemption procedures of the Acquired Fund and the
Acquiring Fund are substantially the same. See the Acquiring Fund Prospectus
under "Redemptions."
Tax Considerations. The consummation of the Reorganization is subject to receipt
of an opinion of counsel, substantially to the effect that, among other things,
the Reorganization will not cause a gain or loss to be recognized by the
Acquired Fund or its shareholders for federal income tax purposes. See
"Information about the Reorganization--Federal Income Tax Considerations."
Risk Factors. Because the investment objectives of the Funds are identical, Lord
Abbett believes that the relative risks involved in investing in the Funds can
be considered similar. However, the investment policies and restrictions of the
Acquiring Fund are proposed to be made less restrictive compared to those of the
Acquired Fund in order to provide greater flexibility in the future management
of the investment portfolio of the Acquiring Fund and to provide greater
uniformity in the investment policies and restrictions among the various Lord
Abbett-sponsored funds. If the Acquiring Fund were to take to
5
<PAGE>
any significant extent the actions permitted by these less restrictive policies
and restrictions, a result not now anticipated, the risks of investing in the
Acquiring Fund could be greater than those involved in investing in the Acquired
Fund. See "Comparative Information About the Acquiring Fund and the Acquired
Fund -- Investment Objectives, Policies and Restrictions".
INFORMATION ABOUT THE REORGANIZATION
The Plan. On July 12, 1996, assuming the conditions referred to below are
satisfied, the Acquired Fund will transfer all its assets to the Acquiring Fund
(the date of such transfer is referred to herein as the "Closing Date") in
exchange for (i) Class C shares of the Acquiring Fund having an aggregate net
asset value equal to the aggregate value of the assets, less liabilities, of the
Acquired Fund and (ii) the assumption by the Acquiring Fund of all the
liabilities of the Acquired Fund. The Acquired Fund will distribute as of the
Closing Date such Class C shares pro-rata to its shareholders of record,
determined as of the close of business on the Closing Date, in redemption and
cancellation of their shares of the Acquired Fund. The net asset value of Class
C shares and the value of the Acquired Fund's assets and the amount of its
liabilities will be determined as of the Closing Date in accordance with the
valuation procedures set forth in the Investment Trust's Declaration and
Agreement of Trust (see "Purchases" in the Acquiring Fund Prospectus). The
valuation procedures used by the Acquiring Fund are the same as those used by
the Acquired Fund.
The obligations of the Acquiring Fund and the Acquired Fund to consummate
the Reorganization are subject to the satisfaction of certain conditions
precedent, including (a) approval and authorization of the Reorganization by the
vote of a majority of the shares of the Acquired Fund voted on the matter if a
quorum is present, (b) receipt of a favorable ruling from the Internal Revenue
Service to the effect that the issuance of various classes of shares by the
Acquiring Fund will not result in dividends or distributions of the Acquiring
Fund constituting "preferential dividends" under the Internal Revenue Code of
1986, as amended (the "Code") and (c) receipt of a favorable opinion of legal
counsel as to the federal income tax consequences of the proposed transaction as
described below under "Federal Income Tax Considerations".
The foregoing summary of the Plan does not purport to be complete, and is
subject in all respects to the provisions of, and is qualified in its entirety
by reference to, the Plan, a copy of which is attached as Exhibit A.
Reasons for the Reorganization. The Board of Trustees of the Securities Trust
and the Board of Trustees of the Investment Trust, including in each case a
majority who are not "interested persons" (as defined in the 1940 Act) of either
Fund or of Lord Abbett, approved the Plan and the Reorganization on March 14,
1996, and in this connection determined that participation in the proposed
Reorganization is in the best interests of the shareholders of each of the Funds
and that the interests of existing shareholders of the Funds will not be diluted
as a result of the Reorganization. In doing so, the boards of the two Funds
considered the estimated expenses to be incurred by the funds in connection with
the Reorganization and several other factors, including (a) that the
shareholders of the Acquired Fund are expected to benefit from economies of
scale as shareholders of the larger Acquiring Fund, while continuing to invest
in a portfolio of securities managed by Lord Abbett under a substantially
similar investment objective, and (b) that the implementation of a multi-class
fund structure for the Acquiring Fund is expected to (i) enable investors in the
Acquiring Fund to choose the distribution option that best
6
<PAGE>
suits their individual situations, (ii) facilitate distribution of the Acquiring
Fund's shares, and (iii) maintain the competitive position of the Acquiring Fund
in relation to other funds that have imple mented or are seeking to implement
similar distribution arrangements.
The trustees of the Securities Trust and the trustees of the Investment
Trust are the same individuals.
Shares of the Acquiring Fund. On or before the Closing Date, the Acquiring Fund
will have two classes of shares, Class A shares (the existing class of the
Acquiring Fund) and Class C shares (to be received by the shareholders of the
Acquired Fund in the Reorganization). Each share of the Acquiring Fund,
regardless of class, will share pro-rata (based on net asset value) in the
portfolio and income of the Acquiring Fund and in the Acquiring Fund's expenses,
except for differences in expenses resulting from different Rule 12b-1 Plans for
the classes and certain other class specific expenses. See "Rule 12b-1 Plans"
below. After the Reorganization, Class C shares will be offered at net asset
value without an initial sales charge but if redeemed for cash before the first
anniversary of purchase, will be subject to a contingent deferred reimbursement
charge (a "CDRC") equal to 1% of the lower of their cost or then net asset
value. Holding periods for shares purchased prior to the Reorganization will
carry over for the purpose of determining the applicability of the CDRC.
After the Closing Date, the Acquiring Fund may create and issue one or more
classes of shares in addition to the Class A and C shares.
Shares of all classes of the Acquiring Fund will vote together on all
matters affecting the Acquiring Fund, except for matters, such as approval of a
Rule 12b-1 Plan, affecting only a particular class or classes. All shares voting
on a matter will have identical voting rights. All issued shares of the
Acquiring Fund are fully paid and non-assessable, and shareholders have no
preemptive or other right to subscribe to any additional shares. All shares
within a series will have the same rights and be subject to the same limitations
with respect to dividends, redemptions and liquidation except for differences
resulting from class-specific Rule 12b-1 plans and related service plans and
certain other class-specific expenses.
Rule 12b-1 Plans. The Acquiring Fund is adopting a Rule 12b-1 Plan for the Class
C shares (the "Class C 12b-1 Plan") substantially the same as the plan currently
in effect for the Acquired Fund, except for the changes noted below. The
Acquired Fund's plan provides for payments to dealers through Lord Abbett of
distribution and service fees (a) at the time shares are sold, not to exceed
0.75% and 0.25%, respectively, of the net asset value of the shares sold and (b)
at the end of the quarter following the first anniversary of the sale of shares,
and quarterly thereafter, at an annual rate not to exceed 0.75% and 0.25%,
respectively, of the net asset value of such shares, including any shares issued
for reinvested dividends and distributions after such first anniversary, so long
as such shares remain outstanding. Lord Abbett may retain from the quarterly
distribution fee, for the payment of distribution expenses incurred directly by
it, an amount not to exceed 0.10% of the average annual net asset value of such
shares outstanding. See the Acquired Fund Prospectus under "Purchases" for
additional information concerning the Rule 12b-1 Plan of the Acquired Fund.
There are two substantive changes in the Class C 12b-1 Plan: First,
payments under the plan may be made to all institutions and persons permitted by
applicable law and/or rules to receive such payments ("Authorized
Institutions"), rather than just to dealers, as is the case under the Acquired
Fund's plan; and Second, the other party to the Class C 12b-1 Plan is to be Lord
Abbett Distributor, LLC, a New York limited liability company, to be formed as a
subsidiary of Lord Abbett ("Lord Abbett
7
<PAGE>
Distributor"), rather than Lord Abbett itself. Lord Abbett Distributor will take
on all the underwriting functions currently performed directly by Lord Abbett.
The Acquiring Fund will pay smaller Rule 12b-1 distribution and service
fees in connection with the Class A shares. However, the Acquiring Fund will
sell those shares subject to an initial sales charge (see the Acquiring Fund
Prospectus under "Purchases"). The Acquired Fund does not impose, and the
Acquiring Fund will not impose with respect to the Class C shares, an initial
sales charge.
The Class C 12b-1 Plan was approved on March 14, 1996, by the trustees of
the Investment Trust, including a majority of the trustees who are not
"interested persons" of the Investment Trust or the Acquiring Fund within the
meaning of the 1940 Act and who will have no direct or indirect financial
interest in the operations of such plan or in any agreements related thereto.
Prior to the Reorganization, the Acquired Fund will purchase one Class C share,
and as sole shareholder, will approve the Class C 12b-1 Plan prior to that class
being issued to the Acquired Fund in the Reorganization. A vote in favor of the
Reorganization will be deemed also to be a vote to authorize the Acquired Fund
to take such action.
Federal Income Tax Considerations. The consummation of the Reorganization is
conditioned upon the receipt of an opinion of Debevoise & Plimpton, legal
counsel to the Acquiring Fund and the Acquired Fund, substantially to the effect
that, for Federal income tax purposes:
(a) no gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund's assets to the Acquiring Fund in exchange
for Class C shares and the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund or upon the distribution of the Class C
shares to the Acquired Fund's shareholders;
(b) no gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund in exchange for Class C shares
and the assumption by the Acquiring Fund of the liabilities of the Acquired
Fund;
(c) no gain or loss will be recognized by shareholders of the Acquired
Fund upon the exchange of their Acquired Fund shares for Class C shares;
(d) the aggregate tax basis of the Class C shares received by any
Acquired Fund shareholder pursuant to the Reorganization will be the same
as the aggregate tax basis of the Acquired Fund shares held by such
shareholder immediately prior to the Reorganization, and the holding period
for the Class C shares to be received by any Acquired Fund shareholder will
include the period during which the Acquired Fund shares exchanged therefor
were held by such shareholder (provided that the Acquired Fund shares were
held as capital assets on the date of the Reorganization); and
(e) the tax basis of the Acquired Fund's assets acquired by the
Acquiring Fund will be the same as the tax basis of such assets to the
Acquired Fund immediately prior to the Reorganization, and the holding
period of the assets of the Acquired Fund in the hands of the Acquiring
Fund will include the period during which those assets were held by the
Acquired Fund.
The Funds have not sought a tax ruling from the Internal Revenue Service
with respect to the tax consequences of the Reorganization, but will act in
reliance upon the opinion of counsel. Such opinion is not binding on the
Internal Revenue Service. Since the foregoing discussion relates only to the
general Federal income tax consequences of the Reorganization, shareholders
should also consult their
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<PAGE>
tax advisors as to any state or local tax consequences of the Reorganization to
them and any special circumstances that may apply in their individual
circumstances.
Expenses of the Reorganization. Expenses of the Reorganization, including legal
and accounting expense, the costs of proxy solicitation and the preparation of
this Prospectus and Proxy Statement, will be borne in part by the Acquiring Fund
and in part by the Acquired Fund. If the Reorganization is consummated, the
expenses of the Acquired Fund, to the extent not paid prior to the Closing Date,
will be assumed by the Acquiring Fund and taken into account in determining the
net assets of the Acquired Fund for the purpose of calculating the number of
Class C shares to be issued to the Acquired Fund.
Capitalization. The following table sets forth the capitalization of the
Acquiring Fund and the Acquired Fund as of December 31, 1995, and the pro-forma
capitalization of the Acquiring Fund as if the Reorganization had occurred on
that date:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Class A Class C
Acquiring Acquiring
Fund Fund
Acquiring Fund Acquired Fund (pro-forma - (pro-forma -
(unaudited) (unaudited) unaudited) unaudited)
- -----------------------------------------------------------------------------------------------------
(In thousands, except per share values)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets................ $6,406 $2,142 $6,406 $2,142
- -----------------------------------------------------------------------------------------------------
Net Asset Value per Share. $11.09 $11.71 $11.09 $11.09
- -----------------------------------------------------------------------------------------------------
Shares Outstanding: 577 183 577 193
- -----------------------------------------------------------------------------------------------------
</TABLE>
The foregoing table reflects a pro-forma exchange ratio of approximately
1.1 Class C shares for each Acquired Fund share. If the Reorganization is
consummated, the actual exchange ratio may vary from this ratio due to changes
in the market value of the portfolio securities of both the Acquiring Fund and
the Acquired Fund between December 31, 1995 and the Closing Date, and changes in
the amounts of undistributed net investment income and accrued liabilities of
the Acquiring Fund and the Acquired Fund during that period.
COMPARATIVE INFORMATION ABOUT THE
ACQUIRING FUND AND THE ACQUIRED FUND
Fees and Expenses. Both the Acquiring Fund and the Acquired Fund employ Lord
Abbett as their investment manager. Under the management agreement between the
Investment Trust and Lord Abbett, the Investment Trust, on behalf of the
Acquiring Fund, is obligated to pay a monthly fee, based on average daily net
assets for each month, at the annual rate of 0.75 of 1%. For the fiscal year
ended October 31, 1995, Lord Abbett waived all of the management fee payable by
the Acquiring Fund. Absent such waiver, which could be discontinued at any time,
the management fee would have been at a rate (not annualized) of 0.63 of 1% of
average daily net assets, and the total operating expense ratio for such year
(not annualized) would have been 1.07%. This management agreement will continue
in effect following the Reorganization.
Under the management agreement between the Securities Trust and Lord
Abbett, the Securities Trust, on behalf of the Acquired Fund, is obligated to
pay a monthly fee at the annual rate of 0.75
9
<PAGE>
of 1% of average daily net assets. For the fiscal year ended October 31, 1995,
Lord Abbett waived all of the management fee and subsidized expenses payable by
the Acquired Fund. Absent such waiver and subsidies, which could be discontinued
at any time, the management fee (not annualized) would have been 0.63 of 1% of
average daily net assets, the other expenses and the total operating expense
ratio for such year (not annualized) would have been 1.85%.
The management agreement between the Investment Trust and Lord Abbett
provides for the Investment Trust on behalf of the Acquiring Fund to repay Lord
Abbett without interest for any expenses assumed by Lord Abbett on or after the
calendar quarter after the net assets of the Acquiring Fund first reach $50
million (the "Acquiring Fund commencement date"), to the extent that the expense
ratio of the Acquiring Fund is less than 1.15% The Acquiring Fund shall not be
obligated to repay any such expenses after the earlier of the termination of its
management agreement or the end of five full fiscal years after the Acquiring
Fund commencement date. This provision will continue in effect following the
Reorganization. At February 29, 1996, the amount of this contingent obligation
was approximately $4,500.
Under the management agreement between the Securities Trust and Lord
Abbett, the Securities Trust, on behalf of the Acquired Trust, is obligated to
repay Lord Abbett without interest for any expenses of the Acquired Fund paid or
reimbursed by Lord Abbett, as follows: if the Acquired Fund's annual expense
ratio (determined before taking into account any fee waiver or expense payment
or reimbursement by Lord Abbett) is less than 1.95% after the first day of the
calendar quarter after the net assets of the Acquired Fund first reach $50
million (the "Acquired Fund commencement date"), the Acquired Fund will repay
Lord Abbett an amount sufficient to increase the expense ratio to 1.95%. The
Acquired Fund is not obligated to repay any such expenses after the earlier of
the termination of its management agreement or the end of five full fiscal years
after the Acquired Fund commencement date. The contingent obligation to repay
such expenses, which totaled approximately $25,500 at February 29, 1996, will be
extinguished upon the consummation of the Reorganization.
Investment Objectives, Policies and Restrictions. The Acquired Fund and
Acquiring Fund have identical investment objectives: to seek current income and
capital growth.
The Acquired Fund and the Acquiring Fund have substantially the same
investment policies and restrictions. However, the Acquiring Fund is seeking
approval of its shareholders to simplify and make less restrictive its
investment policies and restrictions in order to provide greater flexibility in
managing its investment portfolio and to provide greater uniformity in the
investment policies and restrictions among the various Lord Abbett-sponsored
funds. A number of the investment policies and restrictions that are classified
as fundamental for the Acquired Fund are to be re-classified as non-fundamental
for the Acquiring Fund. In other instances, certain fundamental restrictions of
the Acquired Fund are to be modified or eliminated in the case of the Acquiring
Fund. Fundamental investment restrictions may not be changed without approval of
the shareholders of a fund and the costs of shareholder meetings for these
purposes generally are borne by the fund and its shareholders. The board may
amend a non-fundamental restriction as it deems appropriate and in the best
interest of the fund and its shareholders, without incurring the costs of
seeking a shareholder vote.
The principal effect for the shareholders of the Acquired Fund of the
proposed changes in the fundamental policies of the Acquiring Fund will be to
permit the Acquiring Fund to take certain actions not now permitted to the
Acquired Fund without obtaining approval of the shareholders. The Acquiring
10
<PAGE>
Fund either will not be permitted to, or does not intend to, take any such
action unless such action is approved by its Board of Trustees. The board does
not now intend to approve any such action or to do so in the future unless it
deems such action to be an appropriate means of seeking the Acquiring Fund's
investment objective in the best interests of the Acquiring Fund and its
shareholders, in which case disclosure of the change would be made in the
Investment Trust's then current prospectus or statement of additional
information or both. Such actions, none of which the board has a present
intention of approving, involve the following matters, among others: (i)
borrowings from banks in amounts up to one-third of total assets (and up to an
additional 5% of total assets for temporary purposes) and such short-term
credits as may be necessary for the clearance of purchases and sales of
portfolio securities; (ii) loans of portfolio securities to the extent permitted
by law; (iii) purchases and sales of securities directly or indirectly secured
by real estate or interests therein and of commodities and commodity contracts
in accordance with applicable law so long as registration would not be required
as a commodity pool operator under the Commodity Exchange Act; (iv) pledges to
secure borrowings or in connection with the Acquiring Fund's investment policies
and as permitted by applicable law; and (v) investments in the securities of
other investment companies to the extent permitted by applicable law.
A summary comparison of the fundamental and certain non-fundamental
investment policies and restrictions of the Acquired Fund and of the Acquiring
Fund as currently in effect and as proposed to be amended is set forth in
Exhibit B to this Proxy Statement and Prospectus.
For a full discussion and statement of the Acquiring Fund's investment
objectives, policies and restrictions, see "Investment Objective" and "How We
Invest" in the Acquiring Fund Prospectus and "Investment Objective and Policies"
in the Acquiring Fund Statement of Additional Information. For a full discussion
and statement of the Acquired Fund investment objectives, policies and
restrictions, see "Investment Objective" and "How We Invest" in the Acquired
Fund Prospectus and "Investment Objective and Policies" in the Acquired Fund
Statement of Additional Information. The summary comparison set forth in Exhibit
B does not purport to be complete, and is subject in all respects to, and is
qualified in its entirety by reference to, such statements of such policies and
restrictions.
Shareholders' Rights. The Acquiring Fund believes that the rights of the
Acquired Fund shareholders will not change in an adverse way as a result of the
Reorganization. After the Reorganization, the rights of the former shareholders
of the Acquired Fund (Class C shareholders of the Acquiring Fund) will be
governed by the Investment Trust's Declaration and Agreement of Trust and
By-Laws rather than by the Securities Trust's Declaration and Agreement of Trust
and By-Laws. In either case, Delaware law will apply. The operations of the
Acquiring Fund will continue to be subject to the provisions of the 1940 Act and
the rules and regulations of the Commission thereunder.
The current Board of Trustees of the Investment Trust comprises the same
individuals as the current Board of Trustees of the Securities Trust. The
responsibilities, powers and fiduciary duties of the trustees of the Investment
Trust are substantially the same as those of the trustees of the Securities
Trust. The Trusts' Declarations and Agreements of Trust provide for
indemnification of the trustees against certain liabilities and expenses, except
with respect to (i) any matter as to which any trustee has been adjudicated to
have not acted in good faith in the reasonable belief that his or her action was
in the best interest of the Acquired Fund, or (ii) any liability by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of
duties. Trust shareholders may remove a trustee by a vote of two thirds of the
eligible shares. Income Trust shareholders may remove a director by the vote of
a majority of eligible shares.
11
<PAGE>
Neither the Investment Trust nor the Securities Trust regularly holds
shareholder meetings. The By-laws of both Trusts provide that a meeting of
shareholders will be held upon the written request of holders of at least 25% of
votes entitled to be cast.
The foregoing is only a summary of certain rights of the shareholders of
the Acquired Fund and of the rights these shareholders will have following the
Reorganization as holders of Class C shares of the Acquiring Fund. It is not a
complete description of the Declaration and Agreement of Trust of the Securities
Trust, the Declaration and Agreement of Trust of the Investment Trust, the
By-Laws of either Trust or the applicable Delaware law. Shareholders desiring
additional information about those documents and provisions of law should refer
to such Declarations and Agreements of Trust, By-Laws and provisions.
REQUIRED VOTE
Approval of the Plan and the Reorganization will require the affirmative
vote of a majority of the shares of the Acquired Fund voted on the matter.
If an Acquired Fund shareholder abstains from voting on this matter, then
the shares held by such shareholder shall be deemed present at the meeting for
purposes of determining a quorum, but shall not be deemed to have been voted on
this matter. If a broker returns a "non-vote" proxy, indicating a lack of
authority to vote on this matter, then the shares covered by such non-vote shall
be deemed present at the meeting for purposes of determining a quorum, but shall
not be deemed to have been voted on this matter.
If the Plan is not approved by the shareholders of the Acquired Fund, or if
the Reorganization is not consummated for any other reason, the Acquired Fund
will continue to engage in business as Lord Abbett Balanced Trust, a series of
Lord Abbett Securities Trust.
The Board of Trustees of the Securities Trust recommends that shareholders
vote FOR the approval of the proposed Agreement and Plan of Reorganization and
the Reorganization.
ITEM 2. - RATIFICATION OR REJECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Trustees of the Securities Trust has selected Deloitte &
Touche LLP as the independent public accountants for the Securities Trust for
the fiscal year ending October 31, 1996. The Act requires that such selection be
submitted for ratification or rejection at the next annual meeting of
shareholders if such meeting be held. Deloitte & Touche LLP (or a predecessor
firm) acted as the Securities Trust's independent public accountants for the
year ended October 31, 1995, and for a number of years prior thereto. Based on
information in the possession of the Securities Trust, and information furnished
by Deloitte & Touche LLP, the firm has no direct financial interest and no
material indirect financial interest in the Securities Trust. A representative
of Deloitte & Touche LLP is expected to attend the annual meeting and will be
provided with an opportunity to make a statement and answer appropriate
questions.
12
<PAGE>
Ratification of the selection of Deloitte & Touche LLP by the shareholders
of the Securities Trust requires the affirmative vote of a majority of the
shares of the Securities Trust voted on this matter. If a shareholder abstains
from voting on this matter, then the shares held by such shareholder shall be
deemed present at the meeting for purposes of determining a quorum, but shall
not be deemed to have been voted on this matter. If a broker returns a
"non-vote" proxy, indicating a lack of authority to vote on this matter, then
the shares covered by such non-vote shall be deemed present at the meeting for
purposes of determining a quorum, but shall not be deemed to have been voted on
this matter.
The Board of Trustees of the Securities Trust recommends that shareholders
vote to ratify the selection of Deloitte & Touche LLP as the Securities Trust's
independent public accountants for the fiscal year ending October 31, 1996.
ADDITIONAL INFORMATION
To the knowledge of the Investment Trust and the Securities Trust, as of
March 22, 1996, no person owned of record or beneficially 5% or more of the
outstanding shares of the Investment Trust, the Acquiring Fund, the Acquired
Fund or the Securities Trust. As of March 22, 1996, the trustees and officers of
the Investment Trust, as a group, owned 2.4% of the outstanding shares of the
Investment Trust.
The Investment Trust (of which the Acquiring Fund is a series) and the
Securities Trust (of which the Acquired Fund is a series) are subject to the
informational requirements of the Securities Exchange Act of 1934 and in
accordance therewith file reports, proxy statements and other information with
the Securities and Exchange Commission. Such reports, proxy statements and other
information filed by such entities can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C., and at the Northeast Regional Office in New York, 7 World
Trade Center, 13th Floor, New York, New York. Copies of such material can also
be obtained by mail from the Public Reference Branch, Office of Consumer Affairs
and Information Services, Securities and Exchange Commission, Washington, D.C.
20549 at prescribed rates.
13
<PAGE>
EXHIBIT A
---------
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this day of , 1996, by and between Lord Abbett Investment Trust (the "Investment
Trust"), a Delaware business trust, on behalf of its series the Balanced Series
(the "Acquiring Fund") and Lord Abbett Securities Trust (the "Securities
Trust"), a Delaware business trust, on behalf of its series Lord Abbett Balanced
Trust (the "Acquired Fund").
WHEREAS, this Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1)(C) of the
United States Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, the reorganization (the "Reorganization") will consist of the
transfer of all of the assets of the Acquired Fund in exchange for Class C
shares of capital stock of the Acquiring Fund (the "Acquiring Fund Class C
Shares" and each an "Acquiring Fund Class C Share") and the assumption by the
Acquiring Fund of all of the liabilities of the Acquired Fund and the
distribution, after the Closing Date herein referred to, of Acquiring Fund Class
C Shares to the shareholders of the Acquired Fund in termination of the Acquired
Fund, all upon the terms and conditions hereinafter set forth in this Agreement;
WHEREAS, the Securities Trust and the Investment Trust are open-end,
registered investment companies of the management type;
WHEREAS, the Acquiring Fund is a series of the Investment Trust;
WHEREAS, the Acquired Fund is a series of the Securities Trust and the
Acquired Fund owns securities that generally are of the character in which the
Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund is authorized to issue and currently has
outstanding a single class of shares (the "Acquiring Fund Class A Shares"), and
prior to the consummation of the Reorganization, will seek to amend its
Declaration and Agreement of Trust to provide for the authorization and issuance
of shares of additional classes of shares, including Acquiring Fund Class C
Shares, which will share pro rata with each other class in the portfolio, income
and expenses of the Acquiring Fund, except that each class will bear the expense
of its own distribution and shareholder servicing arrangements and certain other
expenses;
<PAGE>
WHEREAS, after the multiple class share structure is authorized by the
Acquiring Fund but before the Acquiring Fund Class C Shares are issued to the
Acquired Fund pursuant to the Reorganization, the Acquired Fund is to purchase
one Acquiring Fund Class C share and as sole shareholder approve a plan pursuant
to Section 12(b) of the Investment Company Act of 1940 (the "1940 Act") and Rule
12b-1 thereunder (a "Rule 12b-1 Plan") applicable to the Acquiring Fund Class C
Shares;
WHEREAS, the Board of Trustees, including a majority of the trustees who
are not "interested persons" (as defined under the 1940 Act ), of the Securities
Trust has determined that the Reorganization is in the best interests of the
Acquired Fund's shareholders and that the interests of the existing shareholders
of the Acquired Fund will not be diluted as a result of this transaction; and
WHEREAS, the Board of Trustees, including a majority of the trustees who
are not "interested persons" (as defined under the 1940 Act) of the Investment
Trust, has determined that the Reorganization is in the best interests of the
Acquiring Fund's shareholders and that the interests of the existing
shareholders of the Acquiring Fund will not be diluted as a result of this
transaction;
NOW THEREFORE, in consideration of the premises and of the agreements
hereinafter set forth, the parties hereto agree as follows:
1. REORGANIZATION.
1.1. Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Securities Trust
will transfer assets of the Acquired Fund as set forth in paragraph 1.2 to the
Acquiring Fund, and the Acquiring Fund will in exchange therefor, (i) deliver to
the Acquired Fund the number of Acquiring Fund Class C Shares, including
fractional Acquiring Fund Class C Shares, determined by dividing the net value
of the Acquired Fund's assets so transferred computed in the manner and as of
the time and date set forth in paragraph 2.1, by the net asset value of one
Acquiring Fund Class A Share, computed in the manner and as of the time and date
set forth in paragraph 2.2; and (ii) assume all of the liabilities of the
Acquired Fund. Such transactions shall take place at the closing provided for in
paragraph 3.1 (the "Closing").
1.2. (a) The assets of the Acquired Fund to be acquired by the Acquiring
Fund shall consist of all of its property, including, without limitation, all
cash, securities and dividends or interest receivables and any deferred or
prepaid expenses shown as an asset on the books of the Acquired Fund on the
closing date provided in paragraph 3.1 (the "Closing Date").
2
<PAGE>
(b) The Acquiring Fund has a list of all of the Acquired Fund's assets as
of the date of execution of this Agreement. The Acquired Fund has a statement of
the Acquiring Fund's investment objectives, policies and restrictions. The
Acquired Fund reserves the right to sell any of its securities but will not,
without the prior approval of the Acquiring Fund, acquire any additional
securities other than securities of the type in which the Acquiring Fund is
permitted to invest. The Acquiring Fund will, within a reasonable time prior to
the Closing Date, furnish the Acquired Fund with a list of the securities, if
any, on the Acquired Fund's list referred to in the first sentence of this
paragraph which do not conform to the Acquiring Fund's investment objectives,
policies and restrictions. In the event that the Acquired Fund holds any
investments which the Acquiring Fund may not hold, the Acquired Fund will
dispose of such securities prior to the Closing Date. In addition, if it is
determined that the portfolios of the Acquired Fund and the Acquiring Fund, when
aggregated, would contain investments exceeding certain percentage limitations
imposed upon the Acquiring Fund with respect to such investments, the Acquired
Fund, if requested by the Acquiring Fund, will dispose of and/or reinvest a
sufficient amount of such investments as may be necessary to avoid violating
such limitations as of the Closing Date.
1.3. As provided in paragraph 3.4, as soon after the Closing Date as is
conveniently practicable, the Acquired Fund will distribute pro rata to the
Acquired Fund's shareholders of record determined as of the close of business on
the Closing Date, the Acquiring Fund Class C Shares it receives pursuant to
paragraph 1.1. Such distribution will be accomplished by establishing Acquiring
Fund shareholder accounts in the names of each Acquired Fund shareholder,
representing the respective pro rata number of full and fractional Acquiring
Fund Class C Shares due each shareholder. All issued and outstanding shares of
the Acquired Fund will simultaneously be canceled on the books of the Acquired
Fund. The Acquiring Fund shall not issue certificates representing the Acquiring
Fund Shares in connection with such exchange.
1.4. Any transfer taxes payable upon issuance of Acquiring Fund Class C
Shares in a name other than the registered holder of the shares of the Acquired
Fund on the books of the Acquired Fund as of that time shall, as a condition of
such issuance and transfer, be paid by the person to whom such Acquiring Fund
Class C Shares are to be issued and transferred.
1.5. The Acquired Fund shall, following the Closing Date and the making of
all distributions pursuant to paragraph 1.3, be terminated by a majority of the
Securities Trust's Trustees' executing an instrument pursuant to Section 5.4 of
the Declaration and Agreement of Trust of the Securities Trust abolishing the
Acquired Fund. Any reporting responsibility of the Securities Trust with respect
to the
3
<PAGE>
Acquired Fund is and shall remain the responsibility of the Securities Trust up
to and including the Closing Date and following the termination of the Acquired
Fund.
2. VALUATION
2.1. The net value of the Acquired Fund's assets to be acquired by the
Acquiring Fund hereunder shall be the value of such assets, less the Acquired
Fund's liabilities assumed by the Acquiring Fund, computed as of the close of
regular trading on New York Stock Exchange, Inc. (the "NYSE") on the Closing
Date (such time and date being hereinafter called the "Valuation Date"), using
the valuation procedures set forth in the Investment Trust's Declaration and
Agreement of Trust.
2.2. The net asset value of one Acquiring Fund Class A Share shall be the
net asset value per share computed as of the close of regular trading on the
NYSE on the Valuation Date, using the valuation procedures set forth in the
Investment Trust's Declaration and Agreement of Trust.
2.3. All computations of value shall be made by the Acquiring Fund and the
Acquired Fund in accordance with the regular practice of the Acquiring Fund.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be July 12, 1996, or such other date as the
parties may agree to in writing. All acts taking place at the Closing shall be
deemed to take place simultaneously as of the close of business on the Closing
Date unless otherwise provided. The Closing shall be held as of 5:00 p.m. at the
offices of [specify location in New Jersey], or at such other time and/or place
as the parties may agree.
3.2. In the event that on the Valuation Date (a) the NYSE or another
primary trading market for portfolio securities of the Acquiring Fund or the
Acquired Fund shall be closed to trading or trading thereon shall be restricted
or (b) trading or the reporting of trading on the NYSE or elsewhere shall be
disrupted so that accurate appraisal of the value of the net assets of the
Acquiring Fund or the Acquired Fund is impracticable, the Closing Date shall be
postponed until the first business day after the day when trading shall have
been fully resumed and reporting shall have been restored.
3.3. At the Closing, the Acquired Fund shall direct its custodian to
deliver to the custodian of the Acquiring Fund, for the Acquiring Fund's
account, all of its portfolio securities and other assets held by such custodian
for the Acquired
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Fund's account, duly endorsed in proper form for transfer as appropriate, in
such condition as to constitute good delivery thereof in accordance with the
custom of the Acquiring Fund's custodian, and shall be accompanied by all
necessary federal and state stock transfer stamps or a check for the appropriate
purchase price thereof.
3.4. The Acquired Fund shall direct its transfer agent to deliver to the
transfer agent of the Acquiring Fund on the Closing Date a list of the names and
addresses of the Acquired Fund's shareholders and the number of outstanding
shares owned by each such shareholder immediately prior to the Closing. The
Acquiring Fund shall direct its transfer agent to issue and deliver a
confirmation evidencing the Acquiring Fund Class C Shares to be credited to the
Acquired Fund's account on the Closing Date to the transfer agent of the
Acquired Fund, or provide evidence satisfactory to the Acquired Fund that such
Acquiring Fund Class C Shares have been credited to the Acquired Fund's account
on the books of the Acquiring Fund. At the Closing, each party shall deliver to
the other such bills of sale, checks, assignments, share certificates, if any,
receipts, assumption agreements or other documents as such other party or its
counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1. With respect to the Acquired Fund, the Securities Trust represents and
warrants to the Acquiring Fund as follows:
(a) The Securities Trust is a registered investment company classified
as a management company of the open-end type, and its registration with the
Securities and Exchange Commission (the "Commission") as an investment
company under the 1940 Act is in full force and effect.
(b) The Acquired Fund is a series of the Securities Trust. The
Securities Trust is duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the power to own all of its
properties and assets and to carry out this Agreement.
(c) The current prospectus and statement of additional information of
the Securities Trust conform (and any prospectus or statement of additional
information of the Securities Trust issued prior to the Closing Date will
conform) in all material respects to the applicable requirements of the
Securities Act of 1933 Act, as amended (the "1933 Act"), and the 1940 Act
and the rules and regulations of the Commission thereunder and do not (and
will not) include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements
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therein, in light of the circumstances under which they were (and will be)
made, not materially misleading.
(d) The Securities Trust is not, and the execution, delivery and
performance of this Agreement will not result in, a material violation of
its Declaration and Agreement of Trust or By-laws or of any agreement,
instrument, contract or other undertaking to which the Securities Trust is
a party or by which it is bound.
(e) The Securities Trust has no material contracts or other
commitments which will be terminated with liability to the Securities Trust
on, prior to or after the Closing Date.
(f) Except as otherwise disclosed in writing to and accepted by the
Acquiring Fund, no litigation or administrative proceeding or investigation
before any court or governmental body is presently pending or to its
knowledge threatened against the Securities Trust or any of the Acquired
Fund's properties or assets, which if adversely determined would materially
and adversely affect the financial condition of the Acquired Fund or the
conduct of the Acquired Fund's business. The Securities Trust knows of no
facts which might form the basis of the institution of such a proceeding
and is not party to or subject to the provisions of any order, decree or
judgment of any court or governmental body which materially and adversely
affects the business of the Acquired Fund or the ability of the Securities
Trust to consummate the transactions contemplated herein.
(g) True and correct copies of the Acquired Fund's (i) Statement of
Net Assets as at October 31, 1995 and (ii) Statements of Operations and
Changes in Net Assets for the 12-month period then ended, including the
accompanying notes, have been furnished to the Acquiring Fund. Such
Statement of Net Assets and such Statements of Operations and Changes in
Net Assets (and the accompanying notes) have been audited by Deloitte &
Touche LLP, independent certified public accountants. Such statements have
been prepared in accordance with generally accepted accounting principles
consistently applied, and such statements fairly reflect the financial
condition and the operations and changes in net assets of the Acquired Fund
as of such date and for such period, respectively. There are no known
contingent liabilities of the Acquired Fund as of such date required to be
reflected or disclosed in such Statement of Net Assets or notes in
accordance with generally accepted accounting principles that are not so
reflected or disclosed.
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(h) Since October 31, 1995, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business,
or any incurrence by the Acquired Fund of indebtedness maturing more than
one year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquiring Fund.
(i) The Securities Trust will file the final federal and other tax
returns of the Acquired Fund for the period ending on the Closing Date in
accordance with the Code. At the Closing Date, all federal and other tax
returns and reports of the Acquired Fund required by law to have been filed
prior to the Closing Date shall have been filed, and all federal and other
taxes shown as due on such returns shall have been paid, or provision shall
have been made for the payment thereof, and to the best of the Securities
Trust's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to such returns.
(j) For the most recent fiscal year of its operation, the Acquired
Fund has met the requirements of Subchapter M of the Code for qualification
and treatment as a regulated investment company.
(k) All issued and outstanding shares of the Acquired Fund are, and at
the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable. All of the issued and outstanding shares of the
Acquired Fund will, at the time of Closing, be held of record by the
persons and in the amounts set forth in the records of the transfer agent
as provided in paragraph 3.4. The Acquired Fund does not have outstanding
any options, warrants or other rights to subscribe for or purchase any
shares of the Acquired Fund, nor is there outstanding any security
convertible into any shares of the Acquired Fund.
(l) At the Closing Date, the Acquired Fund will have good and
marketable title to its assets to be transferred to the Acquiring Fund
pursuant to paragraph 1.1 and full right, power and authority to sell,
assign, transfer and deliver such assets hereunder and, upon delivery and
payment for such assets, the Acquiring Fund will acquire good and
marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the 1933 Act,
other than as disclosed to the Acquiring Fund prior to the date hereof.
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(m) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action on the part of Securities Trust's
Trustees, and subject to the due approval of the Acquired Fund's
shareholders, this Agreement, assuming due authorization, execution and
delivery by the Acquiring Fund, constitutes a valid and binding obligation
of the Securities Trust on behalf of the Acquired Fund, enforceable in
accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles. The
Securities Trust's Board of Trustees has called a meeting of the Securities
Trust's shareholders at which the shareholders of the Acquired Fund are to
consider and act upon this Agreement.
(n) The information furnished and to be furnished by the Securities
Trust on behalf of the Acquired Fund for use in registration statements,
proxy materials and other documents which may be necessary in connection
with the transactions contemplated hereby shall be accurate and complete in
all material respects and shall comply in all material respects with
federal securities and other laws and regulations thereunder applicable
thereto.
(o) The combined prospectus and proxy statement (the "N-14 prospectus
and proxy statement") and the related statement of additional information
included in the Registration Statement on Form N-14 of the Acquiring Fund
(the "N-14 Registration Statement") did not on the effective date of the
N-14 Registration Statement contain any untrue statement of a material fact
relating to the Acquired Fund or the meeting of the Securities Trust
shareholders referred to therein or omit to state a material fact required
to be stated therein or necessary to make the statements therein relating
to the Acquired Fund or such special meeting, in light of the circumstances
under which such statements were made, not materially misleading.
(p) The Acquiring Fund Class C Shares to be issued to the Acquired
Fund hereunder are not being acquired for the purpose of making any
distribution thereof other than in accordance with the terms of this
Agreement.
4.2. With respect to the Acquiring Fund, the Investment Trust represents
and warrants to the Acquired Fund as follows:
(a) The Investment Trust is a registered investment company classified
as a management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect.
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(b) The Acquiring Fund is a series of the Investment Trust. The
Investment Trust is a business trust duly organized, validly existing and
in good standing under the laws of the State of Delaware and has the power
to own all of its properties and assets and to carry out this Agreement.
(c) The current prospectus and statement of additional information of
the Investment Trust conform (and any prospectus or statement of additional
information of the Investment Trust issued prior to the Closing Date will
conform) in all material respects to the applicable requirements of the
1933 Act and the 1940 Act and the rules and regulations of the Commission
thereunder and do not (and will not) include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were (or will be) made, not materially
misleading.
(d) The Investment Trust is not, and the execution, delivery and
performance of this Agreement will not result in, a material violation of
its Declaration and Agreement of Trust or By-laws or of any agreement,
instrument, contract or other undertaking to which the Investment Trust is
a party or by which it is bound.
(e) The Investment Trust has no material contracts or other
commitments which will be terminated with liability to the Investment Trust
on, prior to or after the Closing Date.
(f) Except as otherwise disclosed in writing to and accepted by the
Acquired Fund, no litigation or administrative proceeding or investigation
before any court or governmental body is presently pending or to its
knowledge threatened against the Investment Trust or any of the Acquiring
Fund's properties or assets, which, if adversely determined, would
materially and adversely affect its financial condition or the conduct of
its business. The Investment Trust knows of no facts which might form the
basis of the institution of such a proceeding and is not party to or
subject to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business or
its ability to consummate the transactions contemplated herein.
(g) True and correct copies of the Acquiring Fund's (i) Statement of
Net Assets as at October 31, 1995, and (ii) Statements of Operation and
Changes in Net Assets for the 12-month period then ended, including the
accompanying notes, have been furnished to the Securities Trust. Such
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Statement of Net Assets and such Statements of Operations and Changes in
Net Assets (and the accompanying notes) have been audited by Deloitte &
Touche LLP, independent certified public accountants. Such statements have
been prepared in accordance with generally accepted accounting principles
consistently applied, and such statements fairly reflect the financial
condition and the operations and changes in net assets of the Acquiring
Fund as of such date and for such period, respectively. There are no known
contingent liabilities of the Acquiring Fund as of such date required to be
reflected or disclosed in such Statements of Net Assets or notes in
accordance with generally accepted accounting principles that are not so
reflected or disclosed.
(h) Since October 31, 1995, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business,
or any incurrence by the Acquiring Fund of indebtedness maturing more than
one year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquired Fund.
(i) At the Closing Date, all federal and other tax returns and reports
of the Investment Trust required by law to have been filed prior to the
Closing Date shall have been filed, and all federal and other taxes shown
as due on such returns and reports shall have been paid, or provision shall
have been made for the payment thereof, and to the best of the Acquiring
Fund's knowledge, no such return is currently under audit and no assessment
has been asserted with respect to such returns.
(j) For the most recent fiscal year of its operation, the Acquiring
Fund has met the requirements of Subchapter M of the Code for qualification
and treatment as a regulated investment company and the Acquiring Fund
intends to do so in the future.
(k) All issued and outstanding shares of the Acquiring Fund are, and
at the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable, with no personal liability attaching to the
ownership thereof. The Acquiring Fund does not have outstanding any
options, warrants or other rights to subscribe for or purchase any shares
of the Acquiring Fund, nor is there outstanding any security convertible
into shares of the Acquiring Fund.
(l) At the Closing Date, the Acquiring Fund will have good and
marketable title to the Acquiring Fund's assets.
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(m) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action on the part of the Investment
Trust's Board of Trustees, and assuming due authorization, execution and
delivery by the Acquired Fund, this Agreement constitutes a valid and
binding obligation of the Investment Trust on behalf of the Acquiring Fund,
enforceable in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights and to general equity principles.
(n) The N-14 Registration Statement (except insofar as it relates to
the Acquired Fund or the special meeting of its shareholders referred to
therein) did not on the effective date of the N-14 Registration Statement
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such statements were
made, not materially misleading.
(o) The Acquiring Fund Class C Shares to be issued and delivered to
the Acquired Fund pursuant to the terms of this Agreement have been duly
authorized by the Board of Trustees of the Investment Trust, and, when
issued and delivered at the Closing in accordance with this Agreement, will
be duly and validly issued Acquiring Fund Class C Shares and will be fully
paid and non-assessable with no personal liability attaching to the
ownership thereof.
(p) A majority of the Board of Trustees of the Investment Trust has
duly executed an instrument (a copy of which has been furnished to the
Securities Trust) setting forth the establishment of the Acquiring Fund
Class C Shares in the form of an amendment to the Investment Trust's
Declaration and Agreement of Trust.
5. COVENANTS
5.1. The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the Closing Date. It
is understood that such ordinary course of business will include the declaration
and payment of customary dividends and distributions and any other dividends and
distributions deemed advisable.
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5.2. At or after the Closing, the Securities Trust will deliver or
otherwise make available to the Investment Trust a statement of the Acquired
Fund's assets and liabilities, together with a list of the Acquired Fund's
portfolio securities showing the tax costs of such securities to it and the
holding periods of such securities, as of the Closing Date.
5.3. The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund's shares.
5.4. Subject to the provisions of this Agreement, the Acquired Fund and the
Acquiring Fund each will take, or cause to be taken, all action, and do or cause
to be done all things, reasonably necessary, proper or advisable to consummate
and make effective the transactions contemplated by this Agreement.
5.5. Prior to the Closing Date, the Board of Trustees of the Securities
Trust will declare such dividends and distributions, payable no later than [90]
days after the Closing Date, to shareholders of record of the Acquired Fund as
of the Closing Date, which, together with all such previous dividends and
distributions, shall have the effect of distributing to the shareholders of the
Acquired Fund all of the investment company taxable income and exempt-interest
income of the Acquired Fund for all taxable years ending on or prior to the
Closing Date. The dividends and distributions declared by the Acquired Fund
shall also include all of the Acquired Fund's net capital gain realized in all
taxable years ending on or prior to the Closing Date (after reduction for any
capital loss carry forward). Such dividends and distributions declared prior to
the Closing Date shall be paid by the Acquiring Fund no later than [90] days
after the Closing Date.
5.6. As promptly as practicable, but in any case within sixty days after
the Closing Date, the Acquired Fund shall furnish the Acquiring Fund, in such
form as is reasonably satisfactory to the Acquiring Fund, a statement of the
earnings and profits of the Acquired Fund for federal income tax purposes which
will be carried over to the Acquiring Fund as a result of Section 381 of the
Code.
5.7. The Acquired Fund will provide the Acquiring Fund with any additional
information reasonably necessary for any revision of the N-14 Prospectus and
Proxy Statement referred to in paragraph 4.1(o), all to be included in any
amendment to the N-14 Registration Statement, in compliance with the 1933 Act,
the Securities Exchange Act of 1934 (the "1934 Act") and the 1940 Act in
connection with the meeting of the Acquired Fund's shareholders to consider
approval of this Agreement and the Reorganization.
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6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SECURITIES TRUST
The obligations of the Securities Trust, on behalf of the Acquired Fund, to
consummate the transactions provided for herein shall be subject, at its
election, to the performance by the Investment Trust in all material respects of
all of the obligations to be performed by it hereunder on or before the Closing
Date and, in addition thereto, the following further conditions:
6.1. All representations and warranties of the Investment Trust contained
in this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions contemplated
by this Agreement, as of the Closing Date with the same force and effect as if
made on and as of the Closing Date.
6.2. The Acquiring Fund shall have delivered to the Acquired Fund a
certificate executed in its name by its Chairman, President or a Vice President
and its Treasurer or an Assistant Treasurer, in form reasonably satisfactory to
the Acquired Fund and dated as of the Closing Date, to the effect that the
representations and warranties of the Investment Trust made in this Agreement
are true and correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE INVESTMENT TRUST
The obligations of the Investment Trust, on behalf of the Acquiring Fund,
to consummate the transactions provided for herein shall be subject, at its
election, to the performance by the Securities Trust in all material respects of
all the obligations to be performed by it hereunder on or before the Closing
Date and, in addition thereto, the following further conditions:
7.1. All representations and warranties of the Securities Trust contained
in this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions contemplated
by this Agreement, as of the Closing Date with the same force and effect as if
made on and as of the Closing Date.
7.2. The Securities Trust shall have delivered to the Acquiring Fund on the
Closing Date a certificate executed in its name by its Chairman, President or a
Vice President and its Treasurer or an Assistant Treasurer, in form and
substance
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satisfactory to the Acquiring Fund and dated as of the Closing Date, to the
effect that the representations and warranties of the Securities Trust made in
this Agreement are true and correct at and as of the Closing Date, except as
they may be affected by the transactions contemplated by this Agreement.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SECURITIES TRUST AND THE
INVESTMENT TRUST
If any of the conditions set forth below do not exist on the Closing Date
with respect to the Acquiring Fund or the Acquired Fund, either party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
8.1. This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Acquired Fund in accordance with the provisions of the Securities Trust's
Declaration and Agreement of Trust and By-laws. Notwithstanding anything herein
to the contrary, neither the Acquiring Fund nor the Acquired Fund may waive the
conditions set forth in this paragraph 8.1.
8.2. On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
8.3. All consents of other parties and all other consents, orders, rulings
and permits of federal, state and local regulatory authorities (including those
of the Commission, the Internal Revenue Service and state Blue Sky and
securities authorities) deemed necessary by the Acquiring Fund or the Acquired
Fund to permit consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where failure to obtain any
such consent, order, ruling or permit would not involve a risk of a material
adverse effect on the assets or properties of the Acquiring Fund or the Acquired
Fund.
8.4. The N-14 Registration Statement shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act.
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8.5. The parties shall have received a favorable opinion of Debevoise &
Plimpton, addressed to the Investment Trust and the Securities Trust and
satisfactory to the Secretary of each such party, substantially to the effect
that for federal income tax purposes:
(a) the acquisition by the Acquiring Fund of all of the assets of the
Acquired Fund solely in exchange for the issuance of Acquiring Fund Class C
Shares to the Acquired Fund and the assumption of all of the Acquired Fund
liabilities by the Acquiring Fund, followed by the distribution by the
Acquired Fund, in complete liquidation, of the Acquiring Fund Class C
Shares to the Acquired Fund shareholders in exchange for their Acquired
Fund shares, will be treated as a "reorganization" within the meaning of
Section 368(a) of the Code, and the Acquiring Fund and the Acquired Fund
will each be a "party to a reorganization" within the meaning of Section
368(b) of the Code;
(b) no gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund in exchange for the Acquiring
Fund Shares and the assumption by the Acquiring Fund of liabilities of the
Acquired Fund;
(c) no gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund's assets to the Acquiring Fund in exchange
for the Acquiring Fund Shares and the assumption by the Acquiring Fund of
liabilities of the Acquired Fund or upon the distribution of the Acquiring
Fund Shares to the Acquired Fund's shareholders;
(d) no gain or loss will be recognized by shareholders of the Acquired
Fund upon the exchange of their Acquired Fund shares for the Acquiring Fund
Shares;
(e) the aggregate tax basis for the Acquiring Fund Shares received by
each of the Acquired Fund's shareholders pursuant to the Reorganization
will be the same as the aggregate tax basis of the Acquired Fund shares
held by such shareholder immediately prior to the Reorganization, and the
holding period of the Acquiring Fund Shares to be received by each Acquired
Fund shareholder will include the period during which the Acquired Fund
shares exchanged therefor were held by such shareholder (provided that the
Acquired Fund shares were held as capital assets on the date of the
Reorganization); and
(f) the tax basis of the Acquired Fund's assets acquired by the
Acquiring Fund will be the same as the tax basis of such assets to the
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Acquired Fund immediately prior to the Reorganization, and the holding
period of the assets of the Acquired Fund in the hands of the Acquiring
Fund will include the period during which those assets were held by the
Acquired Fund.
Notwithstanding anything herein to the contrary, neither the Investment
Trust nor the Securities Trust may waive the conditions set forth in this
paragraph 8.5.
8.6. The Acquiring Fund shall have duly adopted a Rule 12b-1 Plan for the
Acquiring Fund Class C Shares acceptable to the Securities Trust.
9. BROKERAGE FEES AND EXPENSES
9.1. The Investment Trust represents and warrants to the Acquired Fund, and
the Securities Trust represents and warrants to the Acquiring Fund, that there
are no brokers or finders entitled to receive any payments in connection with
the transactions provided for herein.
9.2. Except as may be otherwise provided herein, the Acquiring Fund and the
Acquired Fund each shall pay, or provide for the payment of, the expenses
incurred by it in connection with entering into and carrying out the provisions
of this Agreement.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1. The parties hereto agree that no party has made any representation,
warranty or covenant not set forth herein and that this Agreement constitutes
the entire agreement between the parties.
10.2. None of the representations and warranties included or provided for
herein shall survive the consummation of the transactions contemplated hereby.
11. TERMINATION
11.1. This Agreement may be terminated at any time prior to the Closing
Date: (1) by the mutual agreement of the Securities Trust and the Investment
Trust; (2) by the Securities Trust in the event that the Investment Trust shall,
or by the Investment Trust in the event that the Securities Trust shall,
materially breach any representation or warranty contained herein or any
agreement contained herein and to be performed at or prior to the Closing Date;
or (3) by either party if a condition
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herein expressed to be precedent to the obligations of the terminating party has
not been met and it reasonably appears that it will not or cannot be met.
11.2. In the event of any such termination, there shall be no liability for
damages on the part of either the Securities Trust, the Investment Trust, the
Acquired Fund or the Acquiring Fund or their respective trustees or officers to
the other party, but the Acquiring Fund and the Acquired Fund shall each bear,
or provide for the payment of, the expenses incurred by it incidental to the
preparation and carrying out of this Agreement as provided in paragraph 9.2.
12. AMENDMENTS; WAIVERS
12.1. This Agreement may be amended, modified or supplemented in such
manner as may be mutually agreed upon in writing by the authorized officers of
the Securities Trust and the Investment Trust; provided, however, that following
the approval of the Acquired Fund shareholders referred to in paragraph 8.1, no
such amendment may have the effect of changing the provisions for determining
the number of the Acquiring Fund Class C Shares to be issued to the Acquired
Fund's shareholders under this Agreement to the detriment of such shareholders
without their further approval.
12.2. At or at any time prior to the Closing either party hereto may by
written instrument signed by it (i) waive any inaccuracies in the
representations and warranties made to it contained herein and (ii) waive
compliance with any of the covenants or conditions made for its benefit
contained herein.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by personal
delivery addressed to Lord Abbett Securities Trust on behalf of its series Lord
Abbett Balanced Trust, 767 Fifth Avenue, New York, New York, 10153, Attention:
Office of the Secretary; or to Lord Abbett Investment Trust on behalf of its
Balanced Series, 767 Fifth Avenue, New York, New York, 10153, Attention: Office
of the Secretary.
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14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
14.1. The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
14.4. (a) This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm, corporation or other entity, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
18
<PAGE>
(b) The Acquiring Fund is hereby expressly put on notice of the limitation
of liability as set forth in Article IV of the Declaration and Agreement of
Trust of the Securities Trust and agrees that the obligations assumed by the
Securities Trust pursuant to this Agreement shall be limited in any case to the
Acquired Fund and its assets and the Investment Trust shall not seek
satisfaction of any such obligation from the shareholders of the Securities
Trust, the trustees, officers, employees or agents of the Securities Trust or
any of them or from any other assets of the Securities Trust.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its Chairman of the Board, President or Vice President and
attested by its Secretary or Assistant Secretary.
Attest: LORD ABBETT SECURITIES TRUST
on behalf of Lord Abbett Balanced Trust
By: _______________________________
Name: _____________ Name:
Title: Secretary Title:
Attest: LORD ABBETT INVESTMENT TRUST
on behalf of the Balanced Series
By: _______________________________
Name: _____________ Name:
Title: Secretary Title:
19
<PAGE>
EXHIBIT B
---------
Comparison of Certain Investment Policies and Restrictions
Comparison of fundamental and certain non fundamental investment policies
and restrictions of Lord Abbett Balanced Trust (the "Acquired Fund"), a series
of Lord Abbett Securities Trust, and the Balanced Series (the "Acquiring Fund"),
a series of Lord Abbett Investment Trust, and of the Acquiring Fund as proposed
to be revised.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Policy/Restriction of the Policy/Restriction of the Proposed Policy/Restriction of
Acquired Fund Acquiring Fund the Acquiring Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT SALES/MARGIN.
Non-fundamental Non-fundamental Non-fundamental
The Fund may not sell short or buy The Fund may not sell short or buy The Fund may not make short sales of
on margin, although the Fund may on margin, although the Fund may securities or maintain a short position
obtain short-term credit necessary for obtain short-term credit necessary for except to the extent permitted by
the purchase of securities. the purchase of securities. applicable law.
Fundamental
The Fund may purchase securities on
margin to the extent permitted by
applicable law.
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWING.
Fundamental Fundamental Fundamental
Subject to certain exceptions, the Subject to certain exceptions, the The Fund may not borrow money,
Fund may not borrow money. Fund may not borrow money. except that (i) the Fund may borrow
from banks (as defined in the 1940
Act) in amounts up to 33 1/3% of its
total assets (including the amount bor-
rowed), (ii) the Fund may borrow up
to an additional 5% of its total assets
for temporary purposes, and (iii) the
Fund may obtain such short-term
credit as may be necessary for the
clearance of purchases and sales of
portfolio securities.
Non-fundamental
The Fund may not borrow in excess
of 5% of its gross assets taken at cost
or market value, whichever is lower
at the time of borrowing, and then
only as a temporary measure for
extraordinary or emergency purposes.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Policy/Restriction of the Policy/Restriction of the Proposed Policy/Restriction of
Acquired Fund Acquiring Fund the Acquiring Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
UNDERWRITING. Fundamental
Fundamental Fundamental The Fund may not engage in the
The Fund may not engage in the The Fund may not engage in the underwriting of securities, except,
underwriting of securities, except underwriting of securities, except pursuant to a merger or acquisition or
pursuant to a merger or acquisition or pursuant to a merger or acquisition or to the extent that, in connection with
to the extent that, in connection with to the extent that, in connection with the disposition of its portfolio secur-
the disposition of its portfolio securi the disposition of its portfolio securi ities, it may be deemed to be an
ties, it may be deemed to be an ties, it may be deemed to be an underwriter under federal securities
underwriter under federal securities underwriter under federal securities laws.
laws. laws.
- ------------------------------------------------------------------------------------------------------------------------------------
LENDING.
Fundamental Fundamental Fundamental
The Fund may not lend money or The Fund may not lend money or The Fund may not make loans to
securities, except that it may lend securities, except that it may lend other persons, except that the acqui-
portfolio securities not in excess of portfolio securities not in excess of sition of bonds, debentures or other
30% its total assets, subject to certain 30% its total assets, subject to certain corporate debt securities and invest-
limitations. The Acquired Fund also limitations, and except for time or ment in government obligations, com-
may enter into certain repurchase demand deposits with banks and mercial paper, pass-through instru-
agreements. purchases of commercial paper or ments, certificates of deposit, bankers
publicly offered debt securities at acceptances, repurchase agreements
original issue or otherwise. The Fund or any similar instruments shall not be
may also enter into certain repurchase subject to this limitation, and except
agreements. further that the Fund may lend its
portfolio securities, provided that the
lending of portfolio securities may be
made only in accordance with appli-
cable law.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Policy/Restriction of the Policy/Restriction of the Proposed Policy/Restriction of
Acquired Fund Acquiring Fund the Acquiring Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
REAL ESTATE/COMMODITIES.
Fundamental Fundamental Fundamental
The Fund may not deal in real estate, The Fund may not deal in real estate, The Fund may not buy or sell real
oil, gas or other mineral leases, oil, gas or other mineral leases, estate (except that the Fund may in
commodities or commodity contracts, commodities or commodity contracts, vest in securities directly or indirectly
except such interests and other except such interests and other secured by real estate or interests
property acquired as a result of property acquired as a result of therein or issued by companies which
owning other securities, though owning other securities, though invest in real estate or interests
securities will not be purchased in securities will not be purchased in therein) or commodities or commodity
order to acquire any of these order to acquire any of these contracts (except to the extent the
interests. interests. Fund may do so in accordance with
applicable law and without registering
as a commodity pool operator under
the Commodity Exchange Act as, for
example, with futures contracts).
Non-fundamental
The Fund may not invest in real
estate limited partnership interests or
interests in oil, gas or other mineral
leases, or exploration or other
development programs, except that
the Fund may invest in securities
issued by companies that engage in
oil, gas or other mineral exploration
or development activities.
- ------------------------------------------------------------------------------------------------------------------------------------
DIVERSIFICATION.
Fundamental Fundamental Fundamental
With respect to 75% of its gross With respect to 75% of its total With respect to 75% of its gross
assets, the Fund may not buy assets, the Fund may not buy assets, the Fund may not buy
securities of one issuer representing securities of one issuer representing securities of one issuer representing
more than (i) 5% of the Fund's gross more than (i) 5% of its gross assets, more than (i) 5% of the Fund's gross
assets, except for U.S. Government except for U.S. Government assets, except securities issued or
securities, or (ii) 10% of the voting Securities, or (ii) 10% of the voting guaranteed by the U.S. Government,
securities of such issuer. securities of such issuer. its agencies or instrumentalities, or
(ii) 10% of the voting securities of
such issuer.
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT IN A SINGLE
INDUSTRY.
Fundamental Fundamental Fundamental
The Fund may not concentrate its The Fund may not concentrate its The Fund may not invest more than
investments in any single industry, investments in any single industry, 25% of its assets, taken at market
excluding U.S. Government excluding U.S. Government value, in the securities of issuers in
Securities. Securities. any particular industry (excluding
securities of the U.S. Government, its
agencies and instrumentalities).
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Policy/Restriction of the Policy/Restriction of the Proposed Policy/Restriction of
Acquired Fund Acquiring Fund the Acquiring Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RESTRICTED/ILLIQUID
SECURITIES.
Non-fundamental Non-fundamental Non-fundamental
The Fund may not invest knowingly The Fund may not invest knowingly The Fund may not invest, knowingly,
more than 15% of its net assets in more than 15% of its net assets in more than 15% of its net assets (at
illiquid securities, except, subject to illiquid securities, except, subject to the time of investment) in illiquid
applicable state law, securities applicable state law, securities securities, except for securities
qualifying for resale under Rule 144A qualifying for resale under Rule 144A qualifying for resale under Rule 144A
of the Securities Act of 1933, deemed of the Securities Act of 1933, deemed of the Securities Act of 1933, deemed
to be liquid by the Board of Trustees. to be liquid by the Board of Trustees. to be liquid by the Board of Trustees.
- ------------------------------------------------------------------------------------------------------------------------------------
MORTGAGING AND PLEDGING
OF ASSETS.
Non-fundamental Non-fundamental Fundamental
The Fund may not, with certain The Fund may not, with certain The Fund may not pledge its assets
exceptions, pledge, mortgage or exceptions, pledge, mortgage or (other than to secure borrowings, or
hypothecate its assets. hypothecate its assets. to the extent permitted by the Fund's
investment policies, as permitted by
applicable law).
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
OF OTHER INVESTMENT
COMPANIES.
Non-fundamental Non-fundamental Non-fundamental
The Fund may not invest, with certain The Fund may not invest, with certain The Fund may not invest in the
exceptions, in the securities of other exceptions, in the securities of other securities of other investment
investment companies. investment companies. companies, except as permitted by
applicable law.
Fundamental
The Fund may, in the future and upon
shareholder approval, seek to achieve
its investment objective by investing
all of its assets in another investment
company (or series or class thereof)
having the same investment objective.
Shareholders will be notified thirty
days in advance of such conversion.
- ------------------------------------------------------------------------------------------------------------------------------------
OPTIONS.
Non-fundamental
None stated. None stated. The Fund may not write, purchase or
sell puts, calls, straddles, spreads or
combinations thereof, except to the
extent permitted in the Fund's
prospectus and statement of additional
information, as they may be amended
from time to time.
Although it has no current intention to
do so, the Fund may invest in
financial futures and options on
financial futures.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Policy/Restriction of the Policy/Restriction of the Proposed Policy/Restriction of
Acquired Fund Acquiring Fund the Acquiring Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS IN SECURITIES
OF ISSUERS IN OPERATION
FOR LESS THAN THREE YEARS.
Non-fundamental Non-fundamental Non-fundamental
The Fund may not invest in securities The Fund may not invest in securities The Fund may not invest in securities
of issuers which, with their of issuers which, with their of issuers which, with their
predecessors, have a record of less predecessors, have a record of less predecessors, have a record of less
than three years continuous than three years continuous than three years continuous
operations, except through operations, except through operations, except if more than 5% of
subscription or other rights limited to subscription or other rights limited to the Fund's total assets would be
5% of net assets. 5% of net assets. invested in such securities (this
restriction shall not apply to
mortgage-backed securities, asset-
backed securities or obligations issued
or guaranteed by the U.S.
Government, its agencies or
instrumentalities).
- ------------------------------------------------------------------------------------------------------------------------------------
OWNERSHIP OF PORTFOLIO
SECURITIES BY OFFICERS AND
TRUSTEES
Non-fundamental Non-fundamental Non-fundamental
The Fund may not hold securities of The Fund may not hold securities of The Fund may not hold securities of
any issuer if more than1/2of 1% of any issuer if more than1/2of 1% of any issuer if more than1/2 of 1% of
the securities of such issuer are the securities of such issuer are the securities of such issuer are
owned beneficially by one or more owned beneficially by one or more owned beneficially by one or more
officer or Trustee or by one or more officer or Trustee or by one or more officers or Trustees or by one or
partners of the underwriter or partners of the underwriter or more members or partners of the
investment adviser if together they investment adviser if together they underwriter or investment advisor if
own more than 5% of the securities of own more than 5% of the securities of together they own more than 5% of
such issuer. such issuer. the securities of such issuer.
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS WITH
CERTAIN PERSONS.
Non-fundamental
None stated (but certain restrictions None stated (but certain restrictions The Fund may not buy from or sell to
may exist under applicable law). may exist under applicable law). any of its officers, directors,
employees, or its investment adviser
or any or its officers, directors,
partners or employees, any securities
other than shares of the Fund's
common stock.
- ------------------------------------------------------------------------------------------------------------------------------------
SENIOR SECURITIES
Fundamental. Fundamental. Fundamental
The Fund may not issue senior The Fund may not issue senior The Fund may not issue senior
securities. securities, except to the extent securities to the extent such issuance
permitted by the 1940 Act. would violate applicable law.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Policy/Restriction of the Policy/Restriction of the Proposed Policy/Restriction of
Acquired Fund Acquiring Fund the Acquiring Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PURCHASE OF WARRANTS
Non-fundamental. Non-fundamental. Non-fundamental
The Fund may not invest in warrants, The Fund may not invest in warrants The Fund may not invest in warrants
valued at the lower of cost or market, valued at the lower of cost or market, if, at the time of the acquisition, its
that exceed 5% of the Fund's total that exceed 5% of the Fund's total investment in warrants, valued at the
assets (included within such assets (included within such lower of cost or market, would
limitation, but not to exceed 2% of limitation, but not to exceed 2% of exceed 5% of the Fund's total assets
the Fund's total assets, are warrants the Fund's total assets, are warrants (included within such limitation, but
which are not listed on the New York which are not listed on the New York not to exceed 2% of the Fund's total
or American Stock Exchange or a or American Stock Exchange or a assets, are warrants which are not
major foreign exchange). major foreign exchange). listed on the New York or American
Stock Exchange or a major foreign
exchange).
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM TRADING
Non-fundamental. Non-fundamental. Non-fundamental.
The Fund may not engage in short- The Fund may not engage in short- The Fund may not engage in short-
term trading under normal term trading under normal term trading under normal
circumstances. circumstances. circumstances.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION DATED APRIL 24, 1996
Acquisition of the Assets of
Lord Abbett Balanced Trust, a series of
Lord Abbett Securities Trust
The General Motors Building, 767 Fifth Avenue
New York, NY 10153
by and in exchange for Class C Shares of
Balanced Series, a series of
Lord Abbett Investment Trust
The General Motors Building, 767 Fifth Avenue
New York, NY 10153
This Statement of Additional Information, relating specifically to the
proposed transfer of the assets of Lord Abbett Balanced Trust (the "Acquired
Fund"), a series of Lord Abbett Securities Trust (the "Trust"), to the Balanced
Series (the "Acquiring Fund"), a series of Lord Abbett Investment Trust (the
"Income Trust") in exchange for Class C shares of the Acquiring Fund and the
assumption by the Acquiring Fund of the liabilities of the Acquired Fund,
consists of this and the following page, and the following described documents,
each of which accompanies this Statement of Additional Information and is
incorporated herein by reference:
1. Statement of Additional Information of the Investment Trust dated March
1, 1996.
2. Statement of Additional Information of the Securities Trust dated March
1, 1996, insofar as it relates to the Acquired Fund.
3. The financial statements of the Acquiring Fund for the fiscal year ended
October 31, 1995, and the report thereon of Deloitte & Touche LLP, independent
public accountants, contained in the 1995 Annual Report of the Acquiring Fund.
4. The financial statements of the Acquired Fund for the fiscal year ended
October 31, 1995, and the report thereon of Deloitte & Touche LLP, independent
public accountants, contained in the 1995 Annual Report of the Acquired Fund.
The financial statements referred to above are incorporated herein in
reliance upon the authority of Deloitte & Touche LLP as experts in auditing and
accounting. This Statement of Additional Information is not a prospectus. A
Proxy Statement and Prospectus dated the date hereof relating to the
above-referenced matter may be obtained without charge by writing the Acquiring
Fund at the address set forth above or by calling 1-800-874-3733. This Statement
of Additional Information should be read in conjunction with such Proxy
Statement and Prospectus.
B-1
<PAGE>
PART C
<TABLE>
<CAPTION>
Item 16. Exhibits
<S> <C>
11. Opinion of Debevoise & Plimpton as to the legality of securities being issued and
Consent; filed herewith.
17 (a) Prospectus and Statement of Additional Information of Lord Abbett Securities Trust,
dated March 1, 1996, incorporated herein by reference to Post Effective Amendment No.
10 to Registration Statement on Form N-1A of Lord Abbett Securities Trust (File Nos.
33-58846 and 811-7538) filed on or about February 29, 1996.
17 (b) Prospectus and Statement of Additional Information of Lord Abbett Investment Trust,
dated March 1, 1996, incorporated herein by reference to Post Effective Amendment No.
8 to Registration Statement on Form N-1A of Lord Abbett Investment Trust (File Nos.
33-68090 and 811-7988) filed on or about February 29, 1996.
</TABLE>
C-1
<PAGE>
SIGNATURES
*Post-effective amendment No. 1 to this Registration Statement has been
signed on behalf of the Registrant in the City of New York and State of New York
on the 24 day of April 1996, who certifies that this Post-Effective Amendment
No. 1 meets all the requirements for effectiveness under paragraph (b) of Rule
485 under the Securities Act of 1933, as amended.
LORD ABBETT INVESTMENT TRUST
By: /s/ Ronald P. Lynch
--------------------------------------
Ronald P. Lynch, Chairman of the Board
*Post-Effective Amendment No. 1 to this Registration Statement has
been signed by the following persons in the capacities indicated and on the
dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Ronald P. Lynch Chairman of the Board 4/24/96
- ------------------------- and Trustee
Ronald P. Lynch
/s/ Robert S. Dow President and Trustee 4/24/96
- -------------------------
Robert S. Dow
/s/ John J. Gargana, Jr. Vice President and 4/24/96
- ------------------------- Chief Financial Officer
John J. Gargana, Jr.
/s/ E. Thayer Bigelow Trustee 4/24/96
- -------------------------
E. Thayer Bigelow
/s/ Trustee
- -------------------------
Stewart S. Dixon
/s/ Trustee
- -------------------------
John C. Jansing
/s/ C. Alan MacDonald Trustee 4/24/96
- -------------------------
C. Alan MacDonald
/s/ Trustee
- -------------------------
Hansel B. Millican, Jr.
/s/ Thomas J. Neff Trustee 4/24/96
- -------------------------
Thomas J. Neff
C-2
<PAGE>
EXHIBIT INDEX
The following exhibits are filed as a part of this Registration Statement
pursuant to General Instruction G of Form N-14.
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------ ----------- ------
<S> <C>
(11) Opinion of Debevoise & Plimpton as to legality of securities being issued
and Consent
</TABLE>
C-3
Exhibit 11
[Letterhead of Debevoise & Plimpton]
April 24, 1996
Lord Abbett Investment Trust
The General Motors Building
767 Fifth Avenue
New York, New York 10153
Lord Abbett Investment Trust
Registration Statement on Form N-14
Ladies and Gentlemen:
We have acted as counsel to Lord Abbett Investment Trust (the
"Registrant"), a Delaware business trust, in connection with the preparation and
filing with the Securities and Exchange Commission under the Securities Act of
1933, as amended, of a Registration Statement on Form N-14 (File No. 811-7988)
and Post-Effective Amendment No. 1 thereto (as so amended, the "Registration
Statement"), relating to the issuance of shares of beneficial interest of the
Lord Abbett Balanced Series (the "Acquiring Fund"), a series of the Registrant.
Such shares have been established and designated as the Class
C shares (the "Class C shares"). The Class C shares are to be issued to Lord
Abbett Balanced Trust (the "Acquired Trust"), a series of Lord Abbett Securities
Trust
<PAGE>
Lord Abbett Investment Trust
Page 2
(the "Securities Trust"), a Delaware business trust, pursuant to an Agreement
and Plan of Reorganization (the "Acquired Trust Plan") between the Registrant,
on behalf of the Acquiring Fund, and the Securities Trust, on behalf of the
Acquired Trust, substantially in the form of Exhibit A included in Part A of the
Registration Statement. Such issuance of the Class C shares is to be made in
connection with the acquisition by the Acquiring Fund of the assets of, and the
assumption by the Acquiring Fund of the liabilities of, the Acquired Trust.
In so acting, we have examined and relied upon the originals,
or copies certified or otherwise identified to our satisfaction, of such
documents, records, certificates and other instruments and have made such other
investigations as in our judgment are necessary or appropriate to enable us to
render the opinion expressed below. We have not, however, undertaken any
independent investigation of any factual matter set forth in any of the
foregoing.
Based on the foregoing, we are of the following opinion:
Assuming that the Acquired Trust and the Acquiring Fund duly
execute and deliver the Acquired Trust Plan, that the Acquired Trust
Plan and the reorganization provided for thereby are duly approved by
the shareholders of the Acquired Trust, that the transactions
contemplated by the Acquired Trust Plan are duly consummated and that
the amendment to the Declaration of Trust of the Registrant
substantially in the form of Exhibit 1(b) to the Registration Statement
is duly approved and executed, the Class C shares issued pursuant to
the Acquired Trust Plan will be legally issued, fully paid and
non-assessable.
This opinion is limited solely to the federal law of the
United States and the Delaware Business Trust Act as in effect on the date
hereof and the relevant facts that exist as of the date hereof. Without limiting
the generality of the foregoing, we express no opinion concerning other laws of
the State of Delaware, including the securities laws of such state, or the laws
of any other jurisdiction other than the United States. No assurance can be
given that the law or facts will not change, and we have not undertaken to
advise you or any other person with respect to any event subsequent to the date
hereof.
<PAGE>
Lord Abbett Investment Trust
Page 3
We are delivering this opinion to you and, without our prior
written consent, no other persons are entitled to rely on this opinion. We
consent to the filing of this opinion as an Exhibit to the Registration
Statement. In giving such consent, we do not thereby concede that we are within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the Rules and Regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
/s/ Debevoise & Plimpton
