<PAGE>
1940 Act File No. 811-7988
1933 Act File No. 333-01401
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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
<TABLE>
<CAPTION>
PART A
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
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<S> <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>
<CAPTION>
PART B STATEMENT OF ADDITIONAL
ITEM NO. ITEM CAPTION INFORMATION CAPTION
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<S> <C>
10. Cover Page Cover Page
11. Table of Contents Not Applicable
12. Additional Information about the Registrant Cover Page of Proxy Statement and
Prospectus; Acquiring Fund State-
ment of Additional Information incor-
porated by reference.
13. Additional Information about the Company Being Cover Page of Proxy Statement and
Acquired Prospectus; Acquired Fund Statement
of Additional Information incor-
porated by reference.
14. Financial Statements Pro-forma Financial Statements
<CAPTION>
PART C
ITEM NO. PART C CAPTION
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<S> <C>
15. Indemnification Indemnification
16. Exhibits Exhibits
17. Undertakings Undertakings
Signatures
</TABLE>
<PAGE>
Lord Abbett Securities Trust -
Lord Abbett Limited Duration U.S. Government
Securities 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 to provide greater uniformity among Lord Abbett-sponsored funds
and greater flexibility in the management of your Fund's portfolio.
Such proposal, if approved, will eliminate the offering of substantially
identical funds, as well as take advantage of potential economies of scale. In
addition, the proposed combination will be a tax-free reorganization for federal
income tax purposes. Such proposal is fully described in the enclosed proxy
statement and prospectus. I encourage you to review the proxy statement and
prospectus for all the details regarding the meeting agenda.
Your Board of Trustees believes the matters proposed in the agenda are in
the best interests of the Fund and its shareholders and unanimously recommends a
vote "for" each proposal. Regardless of the number of shares you own, it is
important that they be represented and voted. Accordingly, please sign, date
and mail the enclosed proxy card in the postage paid return envelope. If you
have any questions regarding the meeting agenda or need assistance in voting,
please contact our proxy solicitor, D.F. King & Co., Inc., at 1-800-207-3156.
Your prompt response will help save the Fund the expense of additional
solicitation.
Sincerely,
/s/ Ronald P. Lynch
Ronald P. Lynch
Chairman of the Board
April 24, 1996
<PAGE>
LORD ABBETT SECURITIES TRUST -
LORD ABBETT LIMITED DURATION U.S. GOVERNMENT SECURITIES TRUST
767 Fifth Avenue
New York, New York 10153
Notice to the shareholders of Lord Abbett Limited April 24, 1996
Duration U.S. Government Securities Trust (the
"Acquired Fund") of a Special Meeting of
shareholders of Lord Abbett Securities Trust to be
held on June 19, 1996
Notice is given hereby to shareholders of the Acquired Fund of a special meeting
of the shareholders of Lord Abbett Securities Trust. The meeting will be held
in the offices of Lord, Abbett & Co., on the 11th floor of The General Motors
Building, 767 Fifth Avenue, New York, New York on June 19, 1996, at 11:00 a.m.
for the following purposes and to transact such other business as may properly
come before the meeting and any adjournments thereof.
ITEM 1. To consider and act upon an Agreement and Plan of Reorganization
between the Acquired Fund, a series of Lord Abbett Securities Trust, and the
Limited Duration U.S. Government Securities 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 2,198,183 shares of the Acquired
Fund and 138,028,692 shares of the 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 Limited Duration U.S. Government Securities 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
Limited Duration U.S. Government Securities 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 Limited Duration U.S. Government Securities 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
Limited Duration U.S. Government Securities 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 a high level of income from a
portfolio consisting primarily of limited duration U.S. Government securities.
Lord, Abbett & Co. ("Lord Abbett") serves as investment manager to both Funds.
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.
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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>
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 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.
<PAGE>
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TABLE OF CONTENTS
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.................................................... 10
REQUIRED VOTE......................................................... 12
ITEM 2. - RATIFICATION OR REJECTION OF INDEPENDENT PUBLIC ACCOUNTANTS... 13
ADDITIONAL INFORMATION.................................................. 13
Exhibit A - Agreement and Plan of Reorganization
Exhibit B - Comparison of Certain Investment Policies and Restrictions
<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 2,198,183 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 $700.
The cost of the solicitation will be borne by the Acquired Fund.
In the event that sufficient votes to approve the Plan are not received by
the meeting date, the persons named as proxies may propose one or more
adjournments of the meeting to permit further solicitation of proxies. In
determining whether to adjourn the meeting, the following factors may be
considered: the percentage of votes actually cast, the percentage of negative
votes actually cast and the nature of any further solicitation and any
information to be provided to shareholders with respect to such a solicitation.
Any such adjournment will require an affirmative vote of a majority of the
shares present in person or by proxy and entitled to vote at the meeting. The
persons named as proxies will vote upon such adjournment after consideration of
the best interests of all shareholders.
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 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 comparison 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, adjusted for
possible changes in the management fee. 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>
ACQUIRING FUND SHARES ACQUIRING FUND
SHAREHOLDER TRANSACTION EXPENSES (TO BE DESIGNATED CLASS C SHARES
(AS A PERCENTAGE OF OFFERING PRICE) CLASS A) ACQUIRED FUND SHARES (PRO-FORMA)
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<S> <C> <C> <C>
Maximum Sales Load on Purchases/(1)/ 3.00%/(2)/ None/(3)/ None/(3)/
- --------------------------------------------------------------------------------------------------------------
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)
- --------------------------------------------------------------------------------------------------------------
Management Fee 0.18%/(5)/ 0.50% 0.50%/(5)/
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Rule 12b-1 Fees 0.00%/(2)/ 0.85%/(3)/ 0.85%/(3)/
- --------------------------------------------------------------------------------------------------------------
Other Expenses 1.22% 0.47% 0.40%
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TOTAL OPERATING EXPENSES 1.40%/(5)/ 1.82% 1.75%
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</TABLE>
Example: Assume each Fund's annual return is 5% and there is no change in the
- -------
level of expenses described above. For every $1,000 invested, with reinvestment
of all distributions, you would pay the following total expenses if you closed
your account after the number of years indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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<S> <C> <C> <C> <C>
ACQUIRING FUND CLASS A SHARES/(6)/ $44 $73 $104 $193
ACQUIRED FUND SHARES/(6)/ $18 $57 $99 $214
ACQUIRING FUND CLASS C SHARES/(6)/ $18 $55 $95 $206
(PRO-FORMA)
</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 part of its management fee with respect to the
Acquiring Fund during the past year (and continues to do so). The
management fee and total operating expenses for the Acquiring Fund would
have been 0.50% and 1.72%, respectively, absent such waiver, which may be
discontinued at any time.
/(6)/ Based on total actual operating expenses and pro-forma operating expenses
shown in the table above.
The foregoing is provided to assist shareholders of the Acquired Fund in
understanding the various expenses the holders of the shares of the Acquiring
Fund and the holders of shares of the Acquired Fund have incurred and that
holders of the shares of the Acquired Fund might incur as holders of the Class C
shares following the Reorganization.
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 Reor
ganization, each shareholder of the Acquired Fund will become the owner of that
number of full and fractional Class C shares having an aggregate net asset value
equal to the aggregate net asset value of his or her shares of the Acquired
Fund, as of the close of business on the date the Acquired Fund assets are
transferred to the Acquiring Fund. Consummation of the Reorganization is
subject to the approval of the Acquired Fund's shareholders and other
conditions, including Acquiring Fund shareholder approval of an amendment to the
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 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 $12
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.
4
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES OF THE ACQUIRED FUND AND THE ACQUIRING FUND.
The Acquired Fund and Acquiring Fund have identical investment objectives: to
seek a high level of income from a portfolio consisting primarily of limited
duration U.S. Government securities. The two Funds also have generally similar
investment policies and restrictions. The Acquiring Fund is seeking to revise
and reclassify certain of its investment policies and restrictions in order to
provide greater flexibility in managing the investment portfolio of the
Acquiring Fund and to provide greater uniformity in the investment policies and
restrictions among the various Lord Abbett-sponsored funds. Most importantly, a
number of the investment policies and restrictions that are classified as
fundamental for the Acquired Fund are to be 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."
5
<PAGE>
RISK FACTORS. Because the investment objectives of the Funds are identical,
Lord Abbett believes that the relative risks involved in investing in the Funds
can be considered similar. However, the investment policies and restrictions of
the Acquiring Fund are proposed to be made less restrictive compared to those of
the Acquired Fund in order to provide greater flexibility in the future
management of the investment portfolio of the Acquiring Fund and to provide
greater uniformity in the investment policies and restrictions among the various
Lord Abbett-sponsored funds. If the Acquiring Fund were to take to any
significant extent the actions permitted by these less restrictive policies and
restrictions, a result not now anticipated, the risks of investing in the
Acquiring Fund could be greater than those involved in investing in the Acquired
Fund. See "Comparative Information About the Acquiring Fund and the Acquired
Fund -- Investment Objectives, Policies and Restrictions".
INFORMATION ABOUT THE REORGANIZATION
THE PLAN. On July 12, 1996, assuming the conditions referred to below are
satisfied, the Acquired Fund will transfer all its assets to the Acquiring Fund
(the date of such transfer is referred to herein as the "Closing Date") in
exchange for (i) Class C shares of the Acquiring Fund having an aggregate net
asset value equal to the aggregate value of the assets, less liabilities, of the
Acquired Fund and (ii) the assumption by the Acquiring Fund of all the
liabilities of the Acquired Fund. The Acquired Fund will distribute as of the
Closing Date such Class C shares pro-rata to its shareholders of record,
determined as of the close of business on the Closing Date, in redemption and
cancellation of their shares of the Acquired Fund. The net asset value of Class
C shares and the value of the Acquired Fund's assets and the amount of its
liabilities will be determined as of the Closing Date in accordance with the
valuation procedures set forth in the 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 Reor ganization are subject to the satisfaction of certain conditions
precedent, including (a) approval and authorization of the Reorganization by the
vote of a majority of the shares of the Acquired Fund voted on the matter if a
quorum is present, (b) receipt of a favorable ruling from the Internal Revenue
Service to the effect that the issuance of various classes of shares by the
Acquiring Fund will not result in dividends or distributions of the Acquiring
Fund constituting "preferential dividends" under the Internal Revenue Code of
1986, as amended (the "Code"), 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
6
<PAGE>
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 resulting from the combination with the 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
suits their individual situations, (ii) facilitate distribution of the Acquiring
Fund's shares, and (iii) maintain the competitive position of the Acquiring Fund
in relation to other funds that have implemented or are seeking to implement
similar distribution arrangements.
The trustees of the 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
7
<PAGE>
anniversary of the sale of shares, and quarterly thereafter, at an annual rate
not to exceed 0.75% and 0.25%, respectively, of the net asset value of such
shares, including any shares issued for reinvested dividends and distributions
after such first anniversary, so long as such shares remain outstanding. Lord
Abbett may retain from the quarterly distribution fee, for the payment of
distribution expenses incurred directly by it, an amount not to exceed 0.10% of
the average annual net asset value of such shares outstanding. See the Acquired
Fund Prospectus under "Purchases" for additional information concerning the Rule
12b-1 Plan of the Acquired Fund.
There are two substantive changes in the Class C 12b-1 Plan: First,
-----
payments under the plan may be made to all institutions and persons permitted by
applicable law and/or rules to receive such payments ("Authorized
Institutions"), rather than just to dealers, as is the case under the Acquired
Fund's plan; and Second, the other party to the Class C 12b-1 Plan is to be Lord
------
Abbett Distributor, LLC, a New York limited liability company, to be formed as a
subsidiary of Lord Abbett ("Lord Abbett Dis tributor"), rather than Lord Abbett
itself. Lord Abbett Distributor will take on all the underwriting functions
currently performed directly by Lord Abbett.
The Acquiring Fund will pay smaller Rule 12b-1 distribution and service
fees in connection with the Class A shares. However, the Acquiring Fund will
sell those shares subject to an initial sales charge (see the Acquiring Fund
Prospectus under "Purchases"). The Acquired Fund does not impose, and the
Acquiring Fund will not impose with respect to the Class C shares, an initial
sales charge.
The Class C 12b-1 Plan was approved on March 14, 1996, by the 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;
8
<PAGE>
(d) the aggregate tax basis of the Class C shares received by any Acquired
Fund shareholder pursuant to the Reorganization will be the same as the
aggregate tax basis of the Acquired Fund shares held by such shareholder
immediately prior to the Reorganization, and the holding period for the Class C
shares to be received by any Acquired Fund shareholder will include the period
during which the Acquired Fund shares exchanged therefor were held by such
shareholder (provided that the Acquired Fund shares were held as capital assets
on the date of the Reorganization); and
(e) the tax basis of the Acquired Fund's assets acquired by the Acquiring
Fund will be the same as the tax basis of such assets to the Acquired Fund
immediately prior to the Reorganization, and the holding period of the assets of
the Acquired Fund in the hands of the Acquiring Fund will include the period
during which those assets were held by the Acquired Fund.
The Funds have not sought a tax ruling from the Internal Revenue Service
with respect to the tax consequences of the Reorganization, but will act in
reliance upon the opinion of counsel. Such opinion is not binding on the
Internal Revenue Service. Since the foregoing discussion relates only to the
general Federal income tax consequences of the Reorganization, shareholders
should also consult their tax advisors as to any state or local tax consequences
of the Reorganization to them and any special circumstances that may apply in
their individual circumstances.
EXPENSES OF THE REORGANIZATION. Expenses of the Reorganization, including legal
and accounting expense, the costs of proxy solicitation and the preparation of
this Prospectus and Proxy Statement, will be borne in part by the Acquiring Fund
and in part by the Acquired Fund. If the Reorganization is consummated, the
expenses of the Acquired Fund, to the extent not paid prior to the Closing Date,
will be assumed by the Acquiring Fund and taken into account in determining the
net assets of the Acquired Fund for the purpose of calculating the number of
Class C shares to be issued to the Acquired Fund.
CAPITALIZATION. The following table sets forth the capitalization of the
Acquiring Fund and the Acquired Fund as of December 31, 1995, and the pro-forma
capitalization of the Acquiring Fund as if the Reorganization had occurred on
that date:
<TABLE>
<CAPTION>
CLASS A CLASS C
ACQUIRING ACQUIRING
FUND FUND
ACQUIRING FUND ACQUIRED FUND (PRO-FORMA - (PRO-FORMA -
(UNAUDITED) (UNAUDITED) UNAUDITED) UNAUDITED)
--------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
(In thousands, except per share values)
Net Assets $6,126 $11,727 $6,126 $11,727
Net Asset Value per Share $ 4.57 $ 4.78 $ 4.57 $ 4.57
Shares Outstanding: 1,340 2,455 1,340 2,566
</TABLE>
9
<PAGE>
The foregoing table reflects a pro-forma exchange ratio of approximately
1.6 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 0.50 of 1%. For the fiscal year
ended October 31, 1995, the Acquiring Fund paid Lord Abbett an effective
management fee at an annual rate of 0.18 of 1% of average daily net assets.
This fee rate reflects a partial waiver of management fee, which may be
discontinued at any time. If Lord Abbett had not waived a portion of its
management fee for the Acquiring Fund, the Acquiring Fund's expense ratio in
such year would have been 1.72%. 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 0.50 of 1% of average daily net assets.
For the fiscal year ended October 31, 1995, the Acquired Fund paid Lord Abbett a
management fee at an annual rate of 0.50 of 1% of average daily net assets.
As shown above under "Fee Table," the pro-forma expense ratio for the
Class C shares was 1.75%, compared to the actual expense ratio of 1.82% for the
Acquired Fund.
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS. The Acquired Fund and
Acquiring Fund have identical investment objectives: to seek a high level of
income from a portfolio consisting primarily of limited duration U.S. Government
securities.
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
10
<PAGE>
may amend a non-fundamental restriction as it deems appropriate and in the best
interest of the fund and its shareholders, without incurring the costs of
seeking a shareholder vote.
The principal effect for the shareholders of the Acquired Fund of the
proposed changes in the fundamental policies of the Acquiring Fund will be to
permit the Acquiring Fund to take certain actions not now permitted to the
Acquired Fund without obtaining approval of the shareholders. The Acquiring
Fund either will not be permitted to, or does not intend to, take any such
action unless such action is approved by its Board of 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; (v) investments in the securities of other
investment companies to the extent permitted by applicable law; and (vi)
purchases and sales of puts and calls.
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.
11
<PAGE>
EXHIBIT B
---------
COMPARISON OF CERTAIN INVESTMENT POLICIES AND RESTRICTIONS
Comparison of fundamental and certain non-fundamental investment policies
and restrictions of Lord Abbett Limited Duration U.S. Government Securities
Trust (the "Acquired Fund"), a series of Lord Abbett Securities Trust, and Lord
Abbett Investment Trust (the "Acquiring Fund") 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 it may obtain on margin, although it may obtain securities or maintain a short position
short-term credit necessary for the short-term credit necessary for the except to the extent permitted by
clearance of the purchase of clearance of the purchase of applicable law.
securities. securities.
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 the disposition of its portfolio the disposition of its portfolio secur-
securities, it may be deemed to be an securities, it may be deemed to be an ities, 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. The Fund also may enter ment in government obligations, com-
may enter into certain repurchase into certain repurchase agreements. mercial paper, pass-through instru-
agreements. ments, certificates of deposit, bankers
acceptances, repurchase agreements
or any similar instruments shall not be
subject to this limitation, and except
further that the Fund may lend its
portfolio securities, provided that the
lending of portfolio securities may be
made only in accordance with 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
commodities or commodity contracts, commodities or commodity contracts, estate (except that the Fund may in-
oil, gas or other mineral leases, oil, gas or mineral leases, except as a vest in securities directly or indirectly
excluding the securities of companies result of owning other securities. secured by real estate or interests
which deal in or hold real estate or therein or issued by companies which
commodities. invest in real estate or interests
therein) or commodities or commodity
contracts (except to the extent the
Fund may do so in accordance with
applicable law and without registering
as a commodity pool operator under
the Commodity Exchange Act as, for
example, with futures contracts).
NON-FUNDAMENTAL
The Fund may not invest in real
estate limited partnership interests or
interests in oil, gas or other mineral
leases, or exploration or other
development programs, except that
the Fund may invest in securities
issued by companies that engage in
oil, gas or other mineral exploration
or development activities.
- ----------------------------------------------------------------------------------------------------------------------------------
DIVERSIFICATION.
FUNDAMENTAL FUNDAMENTAL FUNDAMENTAL
With respect to 75% of its gross With respect to 75% of its assets, the With respect to 75% of its gross
assets, the Fund may not buy Fund may not buy securities of one assets, the Fund may not buy
securities of one issuer representing issuer representing (i) more than 5% securities of one issuer representing
more than (i) 5% of the Fund's gross of the Fund's gross assets or (ii) more more than (i) 5% of the Fund's gross
assets (except for U.S. Government than 10% of the voting securities of assets, except securities issued or
securities), or (ii) 10% of the voting such issuer. guaranteed by the U.S. Government,
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
except for certain exceptions and except for certain exceptions and value, in the securities of issuers in
excluding U.S. Government excluding U.S. Government any particular industry (excluding
securities. securities. 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
The Fund may not invest more than NON-FUNDAMENTAL NON-FUNDAMENTAL
15% of its total assets in illiquid The Fund may not invest knowingly The Fund may not invest, knowingly,
securities, except, subject to more than 15% of its net assets in more than 15% of its net assets (at
applicable state law, for securities illiquid securities, except, subject to the time of investment) in illiquid
qualifying for resale under Rule 144A state law, for securities qualifying for securities, except for securities
of the Securities Act of 1933, deemed resale under Rule 144A of the qualifying for resale under Rule 144A
to be liquid by the Board of Trustees. Securities Act of 1933, deemed to be of the Securities Act of 1933, deemed
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 FUNDAMENTAL NON-FUNDAMENTAL
Subject to certain exceptions, the In the future, upon shareholder The Fund may not invest in the
Fund may not invest in the securities approval, the Fund may seek to securities of other investment
of other investment companies. achieve its investment objective by companies, except as permitted by
investing all of its assets in another applicable law.
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 NON-FUNDAMENTAL NON-FUNDAMENTAL
The Fund may not buy or sell puts or The Fund may not buy or sell puts or The Fund may not write, purchase or
calls. calls. 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
The Fund may not invest in securities
of issuers which, with their NON-FUNDAMENTAL NON-FUNDAMENTAL
predecessors, have a record of less The Fund may not invest in securities The Fund may not invest in securities
than three years continuous of issuers which, with their of issuers which, with their
operations, except through predecessors, have a record of less predecessors, have a record of less
subscription or other rights limited to than three years continuous than three years continuous
5% of net assets. operations, except through operations, except if more than 5% of
subscription or other rights limited to the Fund's total assets would be
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 than 1/2 of 1% of any issuer if more than 1/2 of 1% of any issuer if more than 1/2 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 of 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.
FUNDAMENTAL 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 of its officers, directors,
partners or employees, any securities
other than shares of the Fund's
common stock.
- ----------------------------------------------------------------------------------------------------------------------------------
SENIOR SECURITIES
FUNDAMENTAL FUNDAMENTAL
The Fund may not issue senior The Fund may not issue senior FUNDAMENTAL
securities. securities, except to the extent The Fund may not issue senior
permitted by the 1940 Act. securities to the extent such issuance
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>
INVESTMENTS NOT
PERMITTED TO A FEDERAL
SAVINGS ASSOCIATION.
None stated. FUNDAMENTAL
The Fund may not make investments None stated.
other than those permitted to a federal
savings association.
- ----------------------------------------------------------------------------------------------------------------------------------
PURCHASE OF WARRANTS.
None stated. None stated. NON-FUNDAMENTAL
The Fund may not invest in warrants
if, at the time of the acquisition, its
investment in warrants, valued at the
lower of cost or market, would
exceed 5% of the Fund's total assets
(included within such limitation, but
not to exceed 2% of the Fund's total
assets, are warrants which are not
listed on the New York or American
Stock Exchange or a major foreign
exchange).
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION DATED APRIL 24, 1996
ACQUISITION OF THE ASSETS OF
Lord Abbett Limited Duration U.S. Government Securities 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
Limited Duration U.S. Government Securities 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 Limited Duration U.S. Government
Securities Trust (the "Acquired Fund"), a series of Lord Abbett Securities
Trust (the "Trust"), to the Limited Duration U.S. Government Securities 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
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 calling or writing the
Acquiring Fund at the address set forth above or by calling 1-800-874-3733.
This Statement of Additional Information should be read in conjunction with such
Proxy Statement and Prospectus.
B-1
<PAGE>
PART C
ITEM 16. EXHIBITS
11. Opinion of Debevoise & Plimpton as to the legality of securities being
issued and Consent; filed herewith
17(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.
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.
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- --------- ----------- ------
(11) Opinion of Debevoise & Plimpton as to legality of
securities being issued and Consent.
C-3
<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
Limited Duration U.S. Government Securities Series (the "Acquiring Fund") and
Lord Abbett Securities Trust (the "Securities Trust"), a Delaware business
trust, on behalf of its series Lord Abbett Limited Duration U.S. Government
Securities 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) to 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").
<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
<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
<PAGE>
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
<PAGE>
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.
<PAGE>
(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.
<PAGE>
(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.
<PAGE>
(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
<PAGE>
Statement of Net Assets and such Statements of Operations and Changes in Net
Assets (and the accompanying notes) have been audited by Deloitte & Touche
LLP, independent certified public accountants. Such statements have been
prepared in accordance with generally accepted accounting principles
consistently applied, and such statements fairly reflect the financial
condition and the operations and changes in net assets of the Acquiring Fund
as of such date and for such period, respectively. There are no known
contingent liabilities of the Acquiring Fund as of such date required to be
reflected or disclosed in such Statements of Net Assets or notes in accordance
with generally accepted accounting principles that are not so reflected or
disclosed.
(h) Since 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.
<PAGE>
(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.
5.2. [This section left intentionally blank.]
<PAGE>
5.3. 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.
5.4. 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.
5.5. 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.
5.6. 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.
5.7. 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.
5.8. 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
<PAGE>
Securities Exchange Act of 1934 (the "1934 Act") and the 1940 Act in connection
with the meeting of the Acquired Fund's shareholders to consider approval of
this Agreement and the Reorganization.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE 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
<PAGE>
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 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
condi tions set forth in this paragraph 8.1.
8.2. On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
8.3. All consents of other parties and all other consents, orders, rulings
and permits of federal, state and local regulatory authorities (including those
of the Commission, the Internal Revenue Service and state Blue Sky and
securities authorities) deemed necessary by the Acquiring Fund or the Acquired
Fund to permit consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where failure to obtain any
such consent, order, ruling or
<PAGE>
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.
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;
<PAGE>
(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 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.
<PAGE>
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 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.
<PAGE>
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 Limited Duration U.S. Government Securities Trust, 767 Fifth Avenue, New
York, New York, 10153, Attention: Office of the Secretary; or to Lord Abbett
Investment Trust on behalf of its Limited Duration U.S. Government Securities
Series, 767 Fifth Avenue, New York, New York, 10153, Attention: Office of the
Secretary.
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.
(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
<PAGE>
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 Limited Duration U.S.
Government Securities Trust
By: _______________________________
Name: _____________ Name:
Title: Secretary Title:
Attest: LORD ABBETT INVESTMENT TRUST
on behalf of the Limited Duration
U.S. Government Securities Series
By: _______________________________
Name: _____________ Name:
Title: Secretary Title:
<PAGE>
<TABLE>
<CAPTION>
CLASS A CLASS C
ACQUIRING ACQUIRING
FUND FUND
ACQUIRING FUND ACQUIRED FUND (PRO-FORMA - (PRO-FORMA -
(UNAUDITED) (UNAUDITED) UNAUDITED) UNAUDITED)
--------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
(In thousands, except per share values)
Net Assets................... $1,339,508 $148,638 $1,339,508 $147,638
Net Asset Value per Share.... $ 9.29 $ 4.82 $ 9.29 $ 9.29
Shares Outstanding:.......... 144,223 30,620 144,223 15,890
</TABLE>
The foregoing table reflects a pro-forma exchange ratio of approximately
0.5 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
Acquiring Fund and Lord Abbett, the Acquiring Fund pays a monthly fee, based on
average daily net assets for each month, at the annual rate of .5 of 1% of the
Fund's first $500 million of average daily net assets and .45 of such assets
over $500 million. For the fiscal year ended December 31, 1995, the Acquiring
Fund paid Lord Abbett a management fee at an annual rate of 0.47 of 1% of
average daily net assets. This management agreement will continue in effect
following the Reorganization.
Under the management agreement between the Trust and Lord Abbett, the
Trust, on behalf of the Acquired Fund, is obligated to pay a monthly fee at the
annual rate of 0.5 of 1% of average daily net assets. For the fiscal year ended
October 31, 1995, the Acquired Fund paid Lord Abbett a management fee at an
annual rate of 0.50 of 1% of average daily net assets.
As shown under "Fee Table" above, the Reorganization is expected to have
a favorable impact on the expense ratio experienced by the shareholders of the
Acquired Fund. As shown above under "Fee Table," the pro-forma expense ratio for
the Class C shares was 1.51%, compared to the actual expense ratio for such year
of 1.67% for the Acquired Fund.
11
<PAGE>
Investment Objectives, Policies and Restrictions. The Acquired Fund and
Acquiring Fund have substantially similar investment objectives. The Acquiring
Fund seeks high current income and the opportunity for capital appreciation to
produce a high total return through a professionally-managed portfolio
consisting primarily of convertible and discount debt securities, many of which
are lower rated. The Acquired Fund seeks to achieve a high total return
(current income and capital appreciation) from an actively-managed, diversified
debt-security portfolio. Under normal circumstances, the Acquired Fund invests
at least 65 % of its total assets in bonds and/or debentures and seeks unusual
values, particularly in lower-rated debt securities, sometimes referred to as
"junk bonds," some of which are convertible into common stocks or have warrants
to purchase common stocks.
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 he reclassified as non-fundamental
for the Acquiring Fund. In other instances, certain fundamental restrictions of
the Acquired Fund are to be modified or eliminated in the case of the Acquiring
Fund. Fundamental investment restrictions may not be changed without approval of
the shareholders of a fund and the costs of shareholder meetings for these
purposes generally are borne by the fund and its shareholders. The board may
amend a non-fundamental restriction as it deems appropriate and in the best
interest of the fund and its shareholders, without incurring the costs of
seeking a shareholder vote.
The principal effect for the shareholders of the Acquired Fund of the
proposed changes in the fundamental policies of the Acquiring Fund will be to
permit the Acquiring Fund to take certain actions not now permitted to the
Acquired Fund without obtaining approval of the shareholders. The Acquiring Fund
either will not be permitted to, or does not intend to, take any such action
unless such action is approved by its Board of Directors. The board does not now
intend to approve any such action or to do so in the future unless it deems such
action to be an appropriate means of seeking the Acquiring Fund's investment
objective in the best interests of the Acquiring Fund and its shareholders, in
which case disclosure of the change would be made in the Acquiring Fund's then
current prospectus or statement of additional information or both. Such actions,
none of which the board has a present intention of approving, involve the
following matters, among others: (i) borrowings from banks in amounts up to one-
third of total assets (and up to an additional 5% of total assets for temporary
purposes) and such short-term credits as may be necessary for the clearance of
purchases and sales of portfolio securities; (ii) loans of portfolio securities
to the extent permitted by law; and (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.
A summary comparison of the fundamental and certain non-fundamental
investment policies and restrictions of the Acquired Fund and the Acquiring
Fund and of the Acquiring Fund as proposed to be amended is set forth in
Exhibit B to this Proxy Statement and Prospectus.
12
<PAGE>
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 Acquiring Fund's Articles of Incorporation, By-Laws and
applicable Maryland law rather than by the Trust's Declaration of Trust and
By-Laws and applicable Delaware law. The operations of the Acquiring Fund will
continue to be subject to the provisions of the 1940 Act and the rules and
regulations of the Commission thereunder.
The responsibilities, powers and fiduciary duties of the directors of
the Acquiring Fund are substantially the same as those of the trustees of the
Acquired Fund. The Acquiring Fund's By-Laws provide for indemnification of the
directors for actual liabilities arising out of the directors' service in their
capacity as directors of the Acquiring Fund, subject only to the conditions and
limitations of applicable law. The Trust's Declaration of Trust provides for
indemnification of the trustees against certain liabilities and expenses, except
with respect to (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. Acquired Fund shareholders may remove a trustee by a vote of two thirds
of the eligible shares. Acquiring Fund shareholders may remove a director by the
vote of a majority of eligible shares.
Neither the Acquired Fund nor the Acquiring Fund regularly holds
shareholder meetings. The By-laws of both Funds provide that a meeting of
shareholders will be held upon the written request of holders of at least 25% of
votes entitled to be cast.
The foregoing is only a summary of certain rights of the shareholders of
the Acquired Fund and of the rights these shareholders will have following the
Reorganization as holders of Class C shares of the Acquiring Fund. It is not a
complete description of the Declaration of Trust of the Trust the Articles of
Incorporation of the Acquiring Fund, the By-Laws of either entity or the
applicable Delaware or Maryland law. Shareholders desiring additional
information about those documents and provisions of law should refer to such
Declaration of Trust, Articles of Incorporation, By-Laws and provisions.
13
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 Limited Duration U.S. Government Securities 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 Limited Duration U.S.
Government Securities Trust (the "Acquired Trust"), a series
20153086.01
<PAGE>
Lord Abbett Investment Trust
Page 2
of Lord Abbett Securities Trust (the "Securities Trust"), a Delaware business
trust, pursuant to an Agreement and Plan of Reorganization (the "Acquired Trust
Plan") between the Registrant, on behalf of the Acquiring Fund, and the
Securities Trust, on behalf of the Acquired Trust, substantially in the form of
Exhibit A included in Part A of the Registration Statement. Such issuance of the
Class C shares is to be made in connection with the acquisition by the Acquiring
Fund of the assets of, and the assumption by the Acquiring Fund of the
liabilities of, the Acquired Trust.
In so acting, we have examined and relied upon the originals,
or copies certified or otherwise identified to our satisfaction, of such
documents, records, certificates and other instruments and have made such other
investigations as in our judgment are necessary or appropriate to enable us to
render the opinion expressed below. We have not, however, undertaken any
independent investigation of any factual matter set forth in any of the
foregoing.
Based on the foregoing, we are of the following opinion:
Assuming that the Acquired Trust and the Acquiring Fund duly
execute and deliver the Acquired Trust Plan, that the Acquired Trust
Plan and the reorganization provided for thereby are duly approved by
the shareholders of the Acquired Trust, that the transactions
contemplated by the Acquired Trust Plan are duly consummated and that
the 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
20153086.01
<PAGE>
Lord Abbett Investment Trust
Page 3
not undertaken to advise you or any other person with respect to any event
subsequent to the date hereof.
We are delivering this opinion to you and, without our prior
written consent, no other persons are entitled to rely on this opinion. We
consent to the filing of this opinion as an Exhibit to the Registration
Statement. In giving such consent, we do not thereby concede that we are within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the Rules and Regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
/s/ Debevoise & Plimpton
