As filed with the Securities and Exchange Commission on September 30, 1999
Securities Act File No. 33-
Investment Company Act File No. 811-09597
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No.
Post-Effective Amendment No.
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No.
(Check appropriate box or boxes)
LORD ABBETT LARGE-CAP GROWTH FUND
(Exact Name of Registrant as Specified in Charter)
767 Fifth Avenue
New York, NY 10153
(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code: (212) 848 -1800
Lawrence H. Kaplan, Esq.
Vice President and Deputy General Counsel
Lord, Abbett & Co.
767 Fifth Avenue
New York, NY 10153
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement is declared effective.
- --------------------------
Pursuant to Regulation 270.24f-2 under the Investment Comany Act of 1940, the
Registrant hereby elects to register an indefinite number of shares of
beneficial interest.
<PAGE>
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Secton 9(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
LORD
ABBETT
Large-Cap Growth Fund
Prospectus
December , 1999
[LOGO]
As with all mutual funds, the Securities and Exchange Commission does not
guarantee that the information in this prospectus is accurate or complete,
and it has not judged thisfundfor investment merit. It is a criminaloffense
to stateotherwise. Class P shares of the fund are neither offered to the
general public nor available in all states. Please call 800-821-5129 for
further information.
<PAGE>
TABLE OF CONTENTS
The Fund Page
What you should know Goal/Approach 2
about the fund Main Risks 2
Fees and Expenses 3
Your Investment
Information for managing Purchases 4
your fund account Opening Your Account 6
Redemptions 7
Distributions and Taxes 7
Services For Fund Investors 8
Sales Charges and Service Fees 9
Management 10
For More Information Your Investment
How to learn more Other Investment Techniques 11
about the fund Glossary of Shaded Terms 12
Financial Information Your Investment
Compensation For Your Dealer 14
How to learn more about the Back Cover
fund and other Lord Abbett funds
<PAGE>
GOAL /STRATEGY
The investment objective of the fund is long-term growth of capital.
The fund will normally invest at least 65% of its assets in the common
stocks of companies that are organized and have their principal office in
the U. S., and which trade their securities principally in the U. S. These
companies will have a market capitalization of at least one billion dollars
at the time of the fund's investment. The average market capitalization of
the stocks in the fund's portfolio normally will be in the range of the
larger market capitalizations of the companies that make up the S& P 500
Composite Stock Price Index. The average market capitalization of the Index
was $ billion as of the date of this prospectus.
To identify attractive industries and sectors for investment, the fund uses
a so-called "top-down" investment research approach based on economic
analysis. The approach focuses on the following steps:
o We analyze changes in the economy to attempt to determine which
sectors are growing, and which are not growing or are shrinking;
o We analyze the cyclical state of the economy to attempt to determine
where the economy is in the business cycle and how the course of the
cycle may impact stock prices;
o We analyze stock market valuation to attempt to determine profit and
growth prospects in light of current stock prices; and
o We analyze earnings momentum to attempt to determine which sectors,
industries and companies have earnings estimates that are growing or
declining.
This approach enables the fund to identify sectors and industries that we
expect to exhibit superior performance. We then apply so-called
"fundamental analysis," that is careful analysis of the businesses and
financials of individual companies within the sectors and industries, to
help determine which stocks to buy.
The fund may take a temporary defensive position by investing some of its
assets in short-term debt securities. This could reduce the benefit from
any upswing in the market and prevent the fund from achieving its
investment objective.
MAIN RISKS
The value of your investment will fluctuate in response to movements in the
stock market and in the investments in different economic sectors or
industries. In general, it will be subject to the general risks associated
with investments in any of those sectors or industries, including both
regulatory and economic risks.
An investment in the fund is not a bank deposit. It is not FDIC-insured or
government endorsed. It is not a complete investment program. You could
lose money in the fund, but you also have the potential to make money.
We or the fund refers to the Lord Abbett Large-Cap Growth Fund. which operates
under the supervision of it's Board with the advice of Lord, Abbett & Co. ("Lord
Abbett"), its investment manager.
About the fund. The fund is a professionally managed portfolio of securities
purchased with the pooled money of investors. The fund strives to reach its
stated goal, although as with all mutual funds, it cannot guarantee results.
Top-down research approach first looks at general trends in the economy, then at
specific industries, and then at specific companies within each industry to
determine how they will be affected by general trends in the economy.
Large companies are established companies that are considered "known
quantities." Large companies often have the resources to weather economic
shifts, though they can be slower to innovate than small companies.
Growth stocks exhibit faster than average gains in earnings and are expected to
continue profit growth at a high level. They tend to be more volatile than
slower-growing value stocks.
You should read this entire prospectus, including "Other Investment Techniques,"
which concisely describes the other investment strategies, and their risks, used
by the fund.
2 The Funds
<PAGE>
Large-Cap Growth Fund
Symbols: Class A-
Class B-
Class C-
Class P-
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
Fee table
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Class A Class B Class C Class P
<S> <C> <C> <C> <C>
Shareholder Fees (Fees paid directly from your investment)
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Maximum Sales Charge on Purchases
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(as a % of offering price) 5.75% none none none
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Maximum Deferred Sales Charge (See "Purchases") 1.00% 5.00%(1) 1.00% none
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Annual Fund Operating Expenses (Expenses deducted from fund assets)
- ----------------------------------------------------------------------------------------
(as a % of average net assets)(2)
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Management Fees (See "Management") % % % %
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Distribution and Service (12b-1) Fees (3) % % %
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Other Expenses % % % %
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Total Operating Expenses % % % %
- ----------------------------------------------------------------------------------------
</TABLE>
Expense example
This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment at maximum sales charge, if any, 5% total return each year and no
changes in expenses. You pay the following expenses over the course of each
period shown if you sell your shares at the end of the period, although your
actual cost may be higher or lower. The expenses include any applicable
contingent deferred sales charges.
Share class 1 Year 3 Years
Class A shares $ $
- --------------------------------------------------------------------------------
Class B shares $ $
- --------------------------------------------------------------------------------
Class C shares $ $
- --------------------------------------------------------------------------------
Class P shares $ $
- -------------%------------------------------------------------------------------
You would pay the following expenses on the same investment, assuming you kept
your shares.
Class A shares $ $
- --------------------------------------------------------------------------------
Class B shares $ $
- --------------------------------------------------------------------------------
Class C shares $ $
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Class P shares $ $
- --------------------------------------------------------------------------------
This example is for comparison and is not a representation of the fund's actual
expenses or returns, either past or present.
Management fees are payable to Lord Abbett for the fund's investment management.
12b-1 fees refer to fees incurred for activities that are primarily intended to
result in the sale of fund shares and service fees for shareholder account
service and maintenance.
Other expenses include fees paid for miscellaneous items such as shareholder
services and professional fees.
(1) Class B shares will convert to class A shares on the eighth anniversary of
your original purchase of class B shares.
(2) The annual operating expenses are based on estimated expenses for the
current fiscal year.
(3) Because 12b-1 distribution fees are paid out on an ongoing basis, over time
they will increase the cost of your investment and may cost you more than
other types of sales charges.
The Funds 3
<PAGE>
PURCHASES
This prospectus offers four classes of shares for the fund: classes A, B,
C, and P. These different classes of shares represent investments in the
same portfolio of securities but are subject to different expenses. Our
shares are continuously offered. The offering price is based on the Net
Asset Value ("NAV") per share next determined after we receive your
purchase order submitted in proper form. A front-end sales charge is added
to the NAV, in the case of the class A shares. There is no front-end sales
charge, although there is a CDSC in the case of the class B and C shares,
as described below.
You should read this section carefully to determine which class of shares
represents the best investment option for your particular situation. It may
not be suitable for you to place a purchase order for class B shares of
$500,000 or more or a purchase order for class C shares of $1,000,000 or
more. You should discuss pricing options with your investment professional.
For more information, see "Alternative Sales Arrangements" in the Statement
of Additional Information.
We reserve the right to withdraw all or any part of the offering made by
this prospectus or to reject any purchase order. We also reserve the right
to waive or change minimum investment requirements. All purchase orders are
subject to our acceptance and are not binding until confirmed or accepted
in writing.
Front-End Sales Charges - Class A Shares
- --------------------------------------------------------------------------------
To Compute
As a % of As a % of Offering Price
Your Investment Offering Price Your Investment Divide NAV by
- --------------------------------------------------------------------------------
Less than $50,000 5.75% 6.10% .9425
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$50,000 to $99,999 4.75% 4.99% .9525
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$100,000 to $249,999 3.95% 4.11% .9605
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$250,000 to $499,999 2.75% 2.83% .9725
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$500,000 to $999,999 1.95% 1.99% .9805
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$1,000,000 and over No Sales Charge 1.0000
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Reducing Your Class A Front-End Sales Charges. Class A shares may be
purchased at a discount if you qualify under either of the following
conditions:
o Rights of Accumulation -- A Purchaser can apply the value (at public
offering price) of the shares already owned to a new purchase of class
A shares of any Eligible Fund in order to reduce the sales charge.
o Statement of Intention -- A Purchaser of class A shares can purchase
additional shares of any Eligible Fund over a 13-month period and
receive the same sales charge as if all shares were purchased at once.
Shares purchased through reinvestment of dividends or distributions
are not included. A statement of intention can be backdated 90 days.
Current holdings under rights of accumulation can be included in a
statement of intention.
For more information on eligibility for these privileges, read the
applicable sections in the attached application.
NAV per share for each class of fund shares is calculated each business day at
the close of regular trading on the New York Stock Exchange ("NYSE") (normally
4:00 p. m. Eastern time). Each fund is open on those business days when the NYSE
is open. Purchases and redemptions of fund shares are executed at the NAV next
determined after the fund receives your order. In calculating NAV, securities
for which market quotations are available are valued at those quotations.
Securities for which such quotations are not available are valued at fair value
under procedures approved by the Board.
Share classes
Class A
o normally offered with a frontend sales charge
Class B
o no front-end sales charge, however, a contingent deferred sales charge is
applied to shares sold prior to the sixth anniversary of purchase
o higher annual expenses than class A shares
o automatically convert to class A shares after eight years
Class C
o no front-end sales charge
o higher annual expenses than class A shares
o a contingent deferred sales charge is applied to shares sold prior to the
first anniversary of purchase
Class P
o available to certain pension or retirement plans and pursuant to a Mutual
Fund Advisory Program
4 Your Investment
<PAGE>
Class A Share Purchases Without A Front-End Sales Charge. Class A shares
may be purchased without a front-end sales charge under any of the
following conditions:
o purchases of $1 million or more +
o purchases by Retirement Plans with at least 100 eligible employees +
o purchases under a Special Retirement Wrap Program +
o purchases made with dividends and distributions on class A shares of
another Eligible Fund
o purchases representing repayment under the loan feature of the Lord
Abbettsponsored prototype 403(b) Plan for class A shares
o purchases by employees of any consenting securities dealer having a
sales agreement with Lord Abbett Distributor
o purchases under a Mutual Fund Advisory Program
o purchases by trustees or custodians of any pension or profit sharing
plan, or payroll deduction IRA for the employees of any consenting
securities dealer having a sales agreement with Lord Abbett
Distributor.
See the Statement of Additional Information for a listing of other
categories of purchasers who qualify for class A share purchases without a
front-end sales charge.
+ These categories may be subject to a Contingent Deferred Sales Charge
("CDSC").
Class A Share CDSC. If you buy class A shares under one of the starred (+)
categories listed above and you redeem any of them within 24 months after
the month in which you initially purchased them, the fund normally will
collect a CDSC of 1%.
The class A share CDSC generally will be waived for:
o benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
distribution under Retirement Plans (documentation may be required)
o redemptions continuing as investments in another fund participating in
a Special Retirement Wrap Program
Class B Share CDSC. The CDSC for class B shares normally applies if you
redeem your shares before the sixth anniversary of their initial purchase.
The CDSC declines the longer you own your shares, according to the
following schedule:
Contingent Deferred Sales Charges - Class B Shares
- --------------------------------------------------------------------------------
Anniversary (1) of Contingent Deferred Sales Charge
the day on which the on redemption (as % of amount
purchase order was accepted subject to charge)
On Before
- --------------------------------------------------------------------------------
1st 5.0%
- --------------------------------------------------------------------------------
1st 2nd 4.0%
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2nd 3rd 3.0%
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3rd 4th 3.0%
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4th 5th 2.0%
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5th 6th 1.0%
- --------------------------------------------------------------------------------
on or after the 6th (2) None
- --------------------------------------------------------------------------------
(1) The anniversary is the same calendar day in each respective year after the
date of purchase. For example, the anniversaries for shares purchased on
May 1 will be May 1 of each succeeding year.
(2) Class B shares will automatically convert to class A shares on the eighth
anniversary of the purchase of class B shares.
CDSC, regardless of class, is not charged on shares acquired through
reinvestment of dividends or capital gains distributions and is charged on the
original purchase cost or the current market value of the shares at the time
they are being sold, whichever is lower. In addition, repayment of loans under
Retirement Plans and 403(b) Plans will constitute new sales for purposes of
assessing the CDSC.
To minimize the amount of any CDSC, the fund redeems shares in the following
order:
1. shares acquired by reinvestment of dividends and capital gains (always free
of a CDSC)
2.shares held for six years or more (class B) or two years or more after the
month of purchase (class A) or one year or more (class C)
3. shares held the longest before the sixth anniversary of their purchase
(class B) or before the second anniversary after the month of purchase
(class A) or before the first anniversary of their purchase (class C)
Retirement Plans include employersponsored retirement plans under the Internal
Revenue Code, excluding Individual Retirement Accounts.
Lord Abbett Distributor LLC ("Lord Abbett Distributor") acts as agent for the
funds to work with investment professionals that buy and/or sell shares of the
funds on behalf of their clients. Generally, Lord Abbett Distributor does not
sell fund shares directly to investors.
Benefit Payment Documentation.
(class A only)
o under $50,000 -no documentation necessary
o over $50,000 -reason for benefit payment must be received in writing. Use
the address indicated under "Opening Your Account."
Your Investment 5
<PAGE>
The class B share CDSC generally will be waived under any one of the
following conditions:
o benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
contribution or distribution under Retirement Plans
o Eligible Mandatory Distributions under 403(b) Plans and individual
retirement accounts
o death of the shareholder (natural person)
o redemptions of shares in connection with Div-Move and Systematic
Withdrawal Plans (up to 12% per year)
See "Systematic Withdrawal Plan" under "Services For Fund Investors --
Automatic Services" below for more information on CDSCs with respect to
class B shares.
Class C Share CDSC. The 1% CDSC for class C shares normally applies if you
redeem your shares before the anniversary of the purchase of such shares.
Class P Shares. Class P shares have lower annual expenses than class B and
class C shares, no front-end sales charge, and no CDSC. Class P shares are
currently sold and redeemed at NAV (a) pursuant to a Mutual Fund Advisory
Program or (b) to the trustees of, or employer-sponsors with respect to,
pension or retirement plans with at least 100 eligible employees (such as a
plan under Section 401(a), 401(k) or 457(b) of the Internal Revenue Code)
which engage an investment professional providing, or participating in an
agreement to provide, certain recordkeeping, administrative and/or
sub-transfer agency services to the fund on behalf of the class P
shareholders. Call 800-821-5129 to find out if class P shares are available
in your state.
OPENING YOUR ACCOUNT
MINIMUM INITIAL INVESTMENT
o Regular account $1,000
o Individual Retirement Accounts and
403(b) Plans under the Internal Revenue Code $250
o Uniform Gifts to Minors Account $250
For Retirement Plans and Mutual Fund Advisory Programs, no minimum
investment is required, regardless of share class.
You may purchase shares through any independent securities dealer who has a
sales agreement with Lord Abbett Distributor or you can fill out the
attached application and send it to the fund you select at the address
stated below. You should carefully read the paragraph below entitled
"Proper Form" before placing your order to assure your order will be
accepted.
Lord Abbett Large-Cap Growth Fund
P. O. Box 419100
Kansas City, MO 64141
Proper Form. An order submitted directly to the fund must contain: (1) a
completed application, and (2) payment by check. When purchases are made by
check, redemptions will not be allowed until the fund or transfer agent is
advised that the check has cleared, which may take up to 15 calendar days.
For more information regarding proper form of a purchase order, call the
fund at 800-821-5129.
Important Information. You may be subject to a $50 penalty under the Internal
Revenue Code if you do not provide a correct taxpayer identification number
(Social Security Number for individuals) or make certain required
certifications. In addition, we may be required to withhold from your account
and pay to the U. S. Treasury 31% of any redemption proceeds and any dividend or
distribution from your account.
Small Accounts. Our Board may authorize closing any account in which there are
fewer than 25 shares if it is in a fund's best interest to do so.
6 Your Investment
<PAGE>
By Exchange. Telephone the fund at 800-821-5129 to request an exchange from
any eligible Lord Abbett-sponsored fund.
REDEMPTIONS
By Broker. Call your investment professional for directions on how to
redeem your shares.
By Telephone. To obtain the proceeds of a redemption of $50,000 or less
from your account, you or your representative can call the fund at
800-821-5129.
By Mail. Submit a written redemption request indicating the name(s) in
which the account is registered, the fund's name, the class of shares, your
account number, and the dollar value or number of shares you wish to sell.
Include all necessary signatures. If the signer has any Legal Capacity, the
signature and the capacity must be guaranteed by an Eligible Guarantor.
Certain other legal documentation may be required. For more information
regarding proper documentation call 800-821-5129.
Normally a check will be mailed to the name and address in which the
account is registered (or otherwise according to your instruction) within
three business days after receipt of your redemption request. Your account
balance must be sufficient to cover the amount being redeemed or your
redemption order will not be processed. Under unusual circumstances, the
fund may suspend redemptions, or postpone payment for more than seven days,
as permitted by federal securities laws.
To determine if a CDSC applies to a redemption, see "Class A Share CDSC,""
Class B Share CDSC" or "Class C Share CDSC."
DISTRIBUTIONS AND TAXES
The fund pays its shareholders dividends from its net investment income,
and distributes net capital gains that it has realized. Dividends from net
investment income are expected to be paid annually. If a capital gains
distribution is declared, it also is expected to be paid annually. Your
distributions will be reinvested in your fund unless you instruct the fund
to pay them to you in cash. There are no sales charges on reinvestments.
The tax status of any distribution is the same for all shareholders
regardless of how long they have been in the fund or whether distributions
are reinvested or paid in cash. In general, distributions are taxable as
follows:
- --------------------------------------------------------------------------------
Federal Taxability Of Distributions
Type of Tax rate for Tax rate for
distribution 15% bracket 28% bracket and above
- --------------------------------------------------------------------------------
Income Ordinary Income Ordinary Income
dividends Rate Rate
- --------------------------------------------------------------------------------
Short-term Ordinary Income Ordinary Income
capital gains Rate Rate
- --------------------------------------------------------------------------------
Long-term
capital gains 10% 20%
- --------------------------------------------------------------------------------
Except in tax-advantaged accounts, any sale or exchange of fund shares may
be a taxable event.
Annual Information - Information concerning the tax treatment of dividends
and other distributions will be mailed to shareholders each year. The fund
will also provide annually to its shareholders information regarding the
source of dividends and distribu-
Eligible Guarantor is any broker or bank that is a member of the Medallion Stamp
Program. Most major securities firms and banks are members of this program. A
notary public is not an eligible guarantor.
Taxes on Transactions. The chart at left also can provide a "rule of thumb"
guide for your potential U. S. federal income tax liability when selling or
exchanging fund shares. The second row, "Short-term capital gains," applies to
fund shares sold within 12 months of purchase. The third row, "Long-term capital
gains," applies to shares held for more than 12 months.
Starting January 1, 2001, sales of securities held for more than five years will
be taxed at special lower rates.
Your Investment 7
<PAGE>
tions of capital gains by the fund. Because everyone's tax situation is
unique, you should consult your tax adviser regarding the treatment of
those distributions under the federal, state and local tax rules that apply
to you as well as the tax consequences of gains or losses from the
redemption or exchange of your shares.
SERVICES FOR FUND INVESTORS
AUTOMATIC SERVICES
Buying or selling shares automatically is easy with the services described
below. With each service, you select a schedule and amount, subject to
certain restrictions. You can set up most of these services when filling
out your application or by calling 800-821-5129.
<TABLE>
<CAPTION>
<S> <C>
For investing
Invest-A-Matic You can make fixed, periodic investments ($ 50 minimum) into your fund
(Dollar-cost account by means of automatic money transfers from your bank checking
averaging) account. See the attached application for instructions.
Div-Move You can automatically reinvest the dividends and distributions from your
account into another account in any Eligible Fund ($ 50 minimum).
For selling shares
Systematic You can make regular withdrawals from most Lord Abbett funds. Automatic
Withdrawal cash withdrawals can be paid to you from your account in fixed or variable
Plan (" SWP") amounts. To establish a plan, the value of your shares must be at least
$10,000, except for Retirement Plans for which there is no minimum. Your
shares must be in non-certificate form.
Class B shares The CDSC will be waived on redemptions of up to 12% of the current net
asset value of your account at the time of your SWP request. For class B share
redemptions over 12% per year, the CDSC will apply to the entire redemption.
Please contact the fund for assistance in minimizing the CDSC in this situation.
Class B and Redemption proceeds due to a SWP for class B and class C shares will be
C shares redeemed in the order described under "CDSC" under "Purchases."
</TABLE>
OTHER SERVICES
Telephone Investing . After we have received the attached application
(selecting "yes" under Section 7C and completing Section 7), you can
instruct us by phone to have money transferred from your bank account to
purchase shares of the fund for an existing account. The fund will purchase
the requested shares when it receives the money from your bank.
Exchanges. You or your investment professional can instruct your fund to
exchange shares of any class for shares of the same class of any Eligible
Fund. Instruction may be provided in writing or by telephone, with proper
identification, by calling 800-821-5129. The fund must receive instructions
for the exchange before the close of the NYSE on the day of your call. If
you meet this requirement, you will get the NAV per share of the Eligible
Fund determined on that day. Exchanges will be treated as a sale for
federal tax purposes. Be sure to read the current prospectus for any fund
into which you are exchanging.
Reinvestment Privilege. If you sell shares of the fund, you have a one time
right to reinvest some or all of the proceeds in the same class of any
Eligible Fund within 60 days without a sales charge. If you paid a CDSC
when you sold your shares, you will be credited with the amount of the
CDSC. All accounts involved must have the same registration.
Lord Abbett offers a variety of Retirement Plans. Call 800-253-7299 for
information about:
o Traditional, Rollover, Roth and Education IRAs
o Simple IRAs, SEP-IRAs, 401(k) and 403(b) accounts
o Defined Contribution Plans
Telephone Transactions. You have this privilege unless you refuse it in writing.
For your security, telephone transaction requests are recorded. We will take
measures to verify the identity of the caller, such as asking for your name,
account number, social security or taxpayer identification number and other
relevant information. The fund will not be liable for following instructions
communicated by telephone that it reasonably believes to be genuine.
Transactions by telephone may be difficult to implement in times of drastic
economic or market change.
Exchange Limitations. Exchanges should not be used to try to take advantage of
short-term swings in the market. Frequent exchanges create higher expenses for
the fund. Accordingly, the fund reserves the right to limit or terminate this
privilege for any shareholder making frequent exchanges or abusing the
privilege. The fund also may revoke the privilege for all shareholders upon 60
days' written notice.
8 Your Investment
<PAGE>
Account Statements. Every Lord Abbett investor automatically receives
quarterly account statements.
Householding. Shareholders with the same last name and address will receive
a single copy of a prospectus and annual /semi-annual reports, unless
additional copies are specifically requested in writing to the fund.
Account Changes. For any changes you need to make to your account, consult
your investment professional or call the fund at 800-821-5129.
Systematic Exchange. You or your investment professional can establish a
schedule of exchanges between the same classes of any Eligible Fund.
SALES CHARGES AND SERVICE FEES
Sales and Service Compensation. As part of the plan for distributing
shares, the fund and Lord Abbett Distributor pay sales and service
compensation to Authori zed Institutions that sell the fund's shares and
service its shareholder accounts.
Sales compensation originates from two sources: sales charges and 12b-1
distribution fees that are paid out of the fund's assets. Service
compensation originates from 12b-1 service fees. The 12b-1 fee rates vary
by share class, according to the Rule 12b-1 plan adopted by the fund. The
sales charges and 12b-1 fees paid by investors are shown in the
class-by-class information under "Expenses" and "Purchases." The portion of
these expenses that is paid as sales and service compensation to Authorized
Institutions, such as your dealer, is shown in the chart at the end of this
prospectus. The portion of such sales and service compensation paid to Lord
Abbett Distributor is discussed under "Sales Activities" and "Service
Activities." Sometimes we do not pay sales and service compensation where
tracking data is not available for certain accounts or where the Authori
zed Institution waives part of the compensation.
We may pay Additional Concessions to Authorized Institutions from time to
time.
Sales Activities. We may use 12b-1 distribution fees to pay Authorized
Institutions to finance any activity which is primarily intended to result
in the sale of shares. Lord Abbett Distributor uses its portion of the
distribution fees attributable to the fund's class A and class C shares for
activities which are primarily intended to result in the sale of such class
A and class C shares, respectively. These activities include, but are not
limited to, printing of prospectuses and statements of additional
information and reports for those other than existing shareholders,
preparation and distribution of advertising and sales material, expenses of
organizing and conducting sales seminars, Additional Concessions to
Authorized Institutions, the cost necessary to provide distribution-related
services or personnel, travel, office expenses, equipment and other
allocable overhead.
Service Activities. We may pay Rule 12b-1 service fees to Authorized
Institutions for any activity which is primarily intended to result in
personal service and/or the maintenance of shareholder accounts. Any
portion of the service fees paid to Lord Abbett Distributor will be used to
service and maintain shareholder accounts.
12b-1 fees are payable regardless of expenses. The amounts payable by the fund
need not be directly related to expenses. If Lord Abbett Distributor's actual
expenses exceed the fee payable to it, the fund will not have to pay more than
that fee. If Lord Abbett Distributor's expenses are less than the fee it
receives, Lord Abbett Distributor will keep the full amount of the fee.
Your Investment 9
<PAGE>
MANAGEMENT
The fund's investment adviser is Lord, Abbett & Co., 767 Fifth Avenue, New
York, NY 10153-0203. Founded in 1929, Lord Abbett manages one of the
nation's oldest mutual fund complexes, with approximately $32 billion in
more than 40 mutual fund portfolios and other advisory accounts. For more
information about the services Lord Abbett provides to the funds, see the
Statement of Additional Information.
The fund pays Lord Abbett a monthly fee based on average daily net assets
for each month. In addition, the fund pays all expenses not expressly
assumed by Lord Abbett.
Lord Abbett uses a team of portfolio managers and analysts acting together
to manage the fund's investments.
[INFORMATION ON TEAM MEMBERS AND THEIR BACKGROUNDS TO BE SUPPLIED]
10 Your Investment
<PAGE>
OTHER INVESTMENT TECHNIQUES
This section describes some of the investment techniques that might be used
by the fund and their risks.
Adjusting Investment Exposure. The fund may, but is not required to, use
various strategies to change its investment exposure to adjust to changing
security prices, interest rates, currency exchange rates, commodity prices
and other factors. The fund may use these transactions to change the risk
and return characteristics of the fund's portfolio. If we judge market
conditions incorrectly or use a strategy that does not correlate well with
a fund's investments, it could result in a loss, even if we intended to
lessen risk or enhance returns. These transactions may involve a small
investment of cash compared to the magnitude of the risk assumed and could
produce disproportionate gains or losses. Also, these strategies could
result in losses if the cgunterparty to a transaction does not perform as
promised.
Diversification. The fund is a diversified fund, which means that with
respect to 75% of its total assets, it will not purchase a security if, as
a result, more than 5% of the fund's total assets would be invested in
securities of a single issuer or the fund would hold more than 10% of the
outstanding voting securities of the issuer. U. S. government securities
are not subject to these requirements.
Futures Contracts and Options on Futures Contracts. The fund may enter into
financial futures transactions. A financial futures transaction is the
purchase or sale of an exchange-traded contract to buy or sell a standard
quality and quantity of a financial instrument or index at a specific
future date and price. The price behavior of the futures contract may not
correlate with that of the item being hedged. The fund will not enter into
any futures contracts, or options thereon, if the aggregate market value of
the securities covered by futures contracts plus options on such financial
futures exceeds 50% of its total assets.
Options Transactions. The fund may only sell (write) covered call options.
This means that the fund may only sell the call options on securities which
the fund owns. The fund may purchase and write put and call options on
equity securities or stock indices that are traded on national securities
exchanges. A put option on securities gives the buyer, in return for a
premium, the right, for a specified period of time, to sell the securities
subject to the option to the writer (seller) of the put at the specified
exercise price. The writer of the put option, in return for the premium,
has the obligation, upon exercise of the option, to acquire the securities
underlying the option at the exercise price. The writer of a put option
might be obligated to purchase underlying securities for more than their
current market value.
A call option on a security gives the buyer, in return for a premium paid,
the right for a specified period of time to buy the securities subject to
the option at a specified price (the "exercise price" or "strike price").
The writer of a call option, in return for the premium, has the obligation,
upon exercise of the option, to deliver, depending on the terms of the
option contract, the underlying security to the buyer upon receipt of the
exercise price.
When a fund writes a call option, it gives up the potential for gain on the
underlying securities in excess of the exercise price of the option during
the period that the option is open.
Options on stock indices are similar to options on equity securities except
that, rather
For More Information 11
<PAGE>
than the right to take or make delivery of stock at a specified price, an
option on a stock index gives the holder the right, in return for a premium
paid, to receive, upon exercise of the option, an amount of cash if the
closing level of the stock index upon which the option is based is greater
than, in the case of a call, or less than, in the case of a put, the
exercise price of the option. The writer of an index option, in return for
a premium, is obligated to pay the amount of cash due upon exercise of the
option.
The fund may write only covered put options to the extent that cover for
such options does not exceed 15% of the fund's net assets. The fund will
not purchase an option if, as a result of such purchase, more than 10% of
its total assets would be invested in premiums for such options.
Portfolio Securities Lending. The fund may lend securities to
broker-dealers and financial institutions, as a means of earning income.
This practice could result in a loss or delay in recovering the fund's
securities, if the borrower defaults. The fund will limit its securities
loans to 5% of its total assets and all loans will be fully collateralized.
GLOSSARY OF SHADED TERMS
Additional Concessions. Lord Abbett Distributor may, for specified periods,
allow dealers to retain the full sales charge for sales of shares or may
pay an additional concession to a dealer who sells a minimum dollar amount
of our shares and/or shares of other Lord Abbett-sponsored funds. In some
instances, such additional concessions will be offered only to certain
dealers expected to sell significant amounts of shares. Additional payments
may be paid from Lord Abbett Distributor's own resources or from
distribution fees received from a fund and will be made in the form of cash
or, if permitted, non-cash payments. The non-cash payments will include
business seminars at Lord Abbett's headquarters or other locations,
including meals and entertainment, or the receipt of merchandise. The cash
payments may include payment of various business expenses of the dealer.
In selecting dealers to execute portfolio transactions for a fund's
portfolio, if two or more dealers are considered capable of obtaining best
execution, we may prefer the dealer who has sold our shares and/or shares
of other Lord Abbett-sponsored funds.
Authorized Institutions. Institutions and persons permitted by law to
receive service and/or distribution fees under a Rule 12b-1 plan are
"authorized institutions." Lord Abbett Distributor is an Authorized
Institution.
Eligible Fund. An Eligible Fund is any Lord Abbett-sponsored fund except
for: (1) certain tax-free, single-state funds where the exchanging
shareholder is a resident of a state in which such fund is not offered for
sale; (2) Lord Abbett Equity Fund; (3) Lord Abbett Series Fund; and (4)
Lord Abbett U. S. Government Securities Money Market Fund (" GSMMF")
(except for holdings in GSMMF which are attributable to any shares
exchanged from the Lord Abbett family of funds). An Eligible Fund also is
any Authori zed Institution's affiliated money market fund satisfying Lord
Abbett Distributor as to certain omnibus account and other criteria.
Eligible Mandatory Distributions. If class B shares represent a part of an
individual's total IRA or 403(b) investment, the CDSC will be waived only
for that part of a mandatory distribution which bears the same relation to
the entire mandatory distribution as the class B share investment bears to
the total investment.
12 For More Information
<PAGE>
Legal Capacity. This term refers to the authority of an individual to act
on behalf of an entity or other person(s). For example, if a redemption
request were to be made on behalf of the estate of a deceased shareholder,
John W. Doe, by a person (Robert A. Doe) who has the legal capacity to act
for the estate of the deceased shareholder because he is the executor of
the estate, then the request must be executed as follows: Robert A. Doe,
Executor of the Estate of John W. Doe. That signature using that capacity
must be guaranteed by an Eligible Guarantor.
To give another example, if a redemption request were to be made on behalf
of the ABC Corporation by a person (Mary B. Doe) who has the legal capacity
to act on the behalf of the Corporation, because she is the president of
the Corporation, the request must be executed as follows: ABC Corporation
by Mary B. Doe, President. That signature using that capacity must be
guaranteed by an Eligible Guarantor (see example in right column).
Mutual Fund Advisory Program. This includes certain unaffiliated authorized
brokers, dealers, registered investment advisers or other financial
institutions who either (a) have an arrangement with Lord Abbett
Distributor in accordance with certain standards approved by Lord Abbett
Distributor, providing specifically for the use of fund shares (and
sometimes providing for acceptance of orders for such shares on our behalf)
in particular investment products made available for a fee to clients of
such brokers, dealers, registered investment advisers and other financial
institutions, or (b) charge an advisory consulting or other fee for their
services and buy shares for their own accounts or the accounts of their
clients.
Purchaser. The term "purchaser" includes: (i) an individual; (ii) an
individual and his or her spouse and children under the age of 21; and
(iii) a trustee or other fiduciary purchasing shares for a single trust
estate or single fiduciary account (including a pension, profit-sharing, or
other employee benefit trust qualified under Section 401 of the Internal
Revenue Code - more than one qualified employee benefit trust of a single
employer, including its consolidated subsidiaries, may be considered a
single trust, as may qualified plans of multiple employers registered in
the name of a single bank trustee as one account), although more than one
beneficiary is involved.
Special Retirement Wrap Program. This is a program sponsored by an Authori
zed Institution showing one or more characteristics distinguishing it, in
the opinion of Lord Abbett Distributor, from a Mutual Fund Advisory
Program. Such characteristics include, among other things, the fact that an
Authorized Institution does not charge its clients any fee of a consulting
or advisory nature that is economically equivalent to the distribution fee
under the class A 12b-1 Plan and the fact that the program relates to
participantdirected Retirement Plans.
GUARANTEED SIGNATURE. An acceptable form of guarantee would be as follows:
In the case of the estate --
Robert A. Doe
Executor of the Estate of
John W. Doe
[Date]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
[SIGNATURE ILLEGIBLE]
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'sm'
SR
In the case of the corporation --
ABC Corporation
Mary B. Doe
By Mary B. Doe, President
[Date]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
[SIGNATURE ILLEGIBLE]
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'sm'
SR
Year 2000 Issues. The fund could be adversely affected if the computers used by
the fund and its service providers do not properly process and calculate
date-related information from and after January 1, 2000.
Lord Abbett is working to avoid such problems and has received assurances from
the fund's service providers that they are taking similar steps. Of course, the
Year 2000 problem is unprecedented and, therefore, Lord Abbett cannot eliminate
altogether the possibility that it or the fund will be affected.
For More Information 13
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION FOR YOUR DEALER
- ------------------------------------------------------------------------------------------------------------------------------------
FIRST YEAR COMPENSATION
Front-end
sales charge Dealer's
paid by investors concession Service fee (1) Total compensation (2)
Class A investments (% of offering price) (% of offering price) (% of net investment) (% of offering price)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Less than $50,000 5.75% 5.00% 0.25% 5.24%
- ------------------------------------------------------------------------------------------------------------------------------------
$50,000 -$99,999 4.75% 4.00% 0.25% 4.24%
- ------------------------------------------------------------------------------------------------------------------------------------
$100,000 -$249,999 3.95% 3.25% 0.25% 3.49%
- ------------------------------------------------------------------------------------------------------------------------------------
$250,000 -$499,999 2.75% 2.25% 0.25% 2.49%
- ------------------------------------------------------------------------------------------------------------------------------------
$500,000 -$999,999 1.95% 1.75% 0.25% 2.00%
- ------------------------------------------------------------------------------------------------------------------------------------
$1 million or more (3) or Retirement Plan -100 or more eligible employees (3)
or Special Retirement Wrap Program (3)
- ------------------------------------------------------------------------------------------------------------------------------------
First $5 million no front-end sales charge 1.00% 0.25% 1.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Next $5 million above that no front-end sales charge 0.55% 0.25% 0.80%
- ------------------------------------------------------------------------------------------------------------------------------------
Next $40 million above that no front-end sales charge 0.50% 0.25% 0.75%
- ------------------------------------------------------------------------------------------------------------------------------------
Over $50 million no front-end sales charge 0.25% 0.25% 0.50%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B investments Paid at time of sale (% of net asset value)
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 3.75% 0.25% 4.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class C investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.75% 0.25% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class P investments Percentage of average net assets
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION AFTER FIRST YEAR
Class A investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge none 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B investments Percentage of average net assets (4)
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge none 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Class C investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.75% 0.25% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class P investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The service fee for class A and P shares is paid quarterly. The first
year's service fee on class B and C shares is paid at the time of sale.
(2) Reallowance/concession percentages and service fee percentages are
calculated from different amounts, and therefore may not equal total
compensation percentages if combined using simple addition. Additional
Concessions may be paid to Authorized Institutions, such as your dealer,
from time to time.
(3) Concessions are paid at the time of sale on all class A shares sold during
any 12-month period starting from the day of the first net asset value
sale. With respect to (a) class A share purchases at $1 million or more,
sales qualifying at such level under rights of accumulation and statement
of intention privileges are included and (b) for Special Retirement Wrap
Programs, only new sales are eligible and exchanges into the fund are
excluded.
(4) With respect to class B, C and P shares, 0.25%, 1.00% and 0.45%,
respectively, of the average annual net asset value of such shares
outstanding during the quarter (including distribution reinvestment shares
after the first anniversary of their issuance) is paid to Authorized
Institutions, such as your dealer. These fees are paid quarterly in
arrears.
14 Financial Information
<PAGE>
More information on this fund is or will be available free upon request,
including:
ANNUAL/SEMI-ANNUAL REPORT
Describes the fund, lists portfolio holdings and contains a letter from
the fund's manager discussing recent market conditions and the fund's
investment strategies.
STATEMENT OF ADDITIONAL INFORMATION (" SAI")
Provides more details about the fund and its policies. A current SAI is
on file with the Securities and Exchange Commission ("SEC") and is
incorporated by reference (is legally considered part of this prospectus).
To obtain information:
By telephone. Call the fund at:
888-426-1130.
By mail. Write to the fund at:
The Lord Abbett Family of Funds
767 Fifth Avenue
New York, NY 10153-0203
Via the Internet.
Lord, Abbett & Co.
http://www. lordabbett. com
Text only versions of fund documents can be viewed online or downloaded from:
SEC
http://www. sec. gov
You can also obtain copies by
visiting the SEC's Public Reference
Room in Washington, DC (phone
800-SEC-0330) or by sending
your request and a duplicating
fee to the SEC's Public Reference
Section, Washington, DC
20549-6009.
Lord Abbett Large-Cap Growth Fund
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
SEC file number:
LARF--99
(/99)
<PAGE>
LORD ABBETT
STATEMENT OF ADDITIONAL INFORMATION DECEMBER , 1999
LORD ABBETT
LARGE-CAP GROWTH FUND
This Statement of Additional Information is not a Prospectus. A Prospectus may
be obtained from your securities dealer or from Lord Abbett Distributor LLC
("Lord Abbett Distributor") at The General Motors Building, 767 Fifth Avenue,
New York, New York 10153-0203. This Statement of Additional Information relates
to, and should be read in conjunction with, the Prospectus dated December ,
1999.
Lord Abbett Large-Cap Growth Fund (the "Company") was formed as a business trust
under Delaware law on September 29, 1999. The Company offers four classes of
shares: Class A, Class B, Class C and Class P. All shares have equal
noncumulative voting rights and equal rights with respect to dividends, assets
and liquidation, except for certain class-specific expenses. They are fully paid
and nonassessable when issued and have no preemptive or conversion rights.
Further classes or funds may be added in the future. The Investment Company Act
of 1940, as amended (the "Act") requires that where more than one class or fund
exists, each class or fund must be preferred over all other classes or funds in
respect of assets specifically allocated to such class or fund.
Rule 18f-2 under the Act provides that any matter required to be submitted, by
the provisions of the Act or applicable state law, or otherwise, to the holders
of the outstanding voting securities of an investment company such as the
Company shall not be deemed to have been effectively acted upon unless approved
by the holders of a majority of the outstanding shares of each class affected by
such matter. Rule 18f-2 further provides that a class shall be deemed to be
affected by a matter unless the interests of each class or fund in the matter
are substantially identical or the matter does not affect any interest of such
class or fund. However, the Rule exempts the selection of independent public
accountants, the approval of a contract with a principal underwriter and the
election of trustees from the separate voting requirements.
Shareholder inquiries should be made by directly contacting the Funds or by
calling 800-821-5129. In addition, you can make inquiries through your dealer.
TABLE OF CONTENTS PAGE
1. Investment Policies 2
2. Trustees and Officers 5
3. Investment Advisory and Other Services 9
4. Portfolio Transactions 9
5. Purchases, Redemptions
and Shareholder Services 11
6. Performance 18
7. Taxes 19
8. Information About The Company 20
1
<PAGE>
1.
INVESTMENT POLICIES
The Fund is a diversified open-end management investment company registered
under the Act.
Fundamental Investment Restrictions. The Fund is subject to the following
fundamental investment restrictions, which cannot be changed without approval of
a majority of the Fund's outstanding shares.
The Fund may not:
(1) borrow money, issue senior securities or mortgage, pledge or
hypothecate its assets except to the extent permitted under the Act;
(2) engage in the underwriting of securities, except to the extent that,
in connection with the disposition of its portfolio securities or as
otherwise permitted under applicable law, it may be deemed to be an
underwriter under federal securities laws;
(3) invest more than 25% of the value of its total assets in the
securities of issuers in any particular industry (excluding
obligations issued or guaranteed by the U.S. Government, any state,
territory or possession of the United States, the District of Columbia
or any of their authorities, agencies, instrumentalities or political
subdivisions);
(4) buy or sell real estate (except that the Fund may invest in securities
directly or indirectly secured by real estate or interests therein or
issued by companies which invest in real estate or interests therein)
or commodities or commodity contracts (except to the extent 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);
(5) make loans, except that the acquisition of or investment in debt
securities, repurchase agreements or similar instruments shall not be
subject to this restriction, 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 applicable law; and
(6) with respect to 75% of the value of the total assets of the Fund, (i)
buy securities of any one issuer representing more than 5% of the
value of its total assets, except securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities or (ii) own
more than 10% of the voting securities of such issuer.
Compliance with the investment restrictions in this section 1 will be determined
at the time of the purchase or sale of the portfolio investments.
Non-Fundamental Investment Restrictions. In addition to policies in the
Prospectus and the investment restrictions above which cannot be changed without
shareholder approval, the Fund is also subject to the following non-fundamental
investment policies which may be changed by the Board of Trustees without
shareholder approval.
The Fund may not:
(1) make short sales of securities or maintain a short position except to
the extent permitted by applicable law;
(2) invest knowingly more than 15% of its net assets (at the time of
investment) in illiquid securities, except for securities qualifying
for resale under Rule 144A of the Securities Act of 1933 ("Rule 144A")
deemed to be liquid by the Board of Trustees;
2
<PAGE>
(3) invest in the securities of other investment companies as defined in
the Act, except as permitted by applicable law;
(4) write, purchase or sell puts, calls, straddles, spreads or
combinations thereof, except to the extent permitted in the Fund's
Prospectus and statement of additional information, as they may be
amended from time to time; and
(5) buy from or sell to any of the Fund's officers, trustees, employees,
or its investment adviser any securities other than shares of the
Fund.
RIGHTS AND WARRANTS. The Fund may invest in rights and warrants to purchase
securities. Included within that amount, but not to exceed 5% of the value of
the Fund's gross assets, may be warrants which are not listed on the NYSE or
American Stock Exchange.
Rights represent a privilege offered to holders of record of issued securities
to subscribe (usually on a pro rata basis) for additional securities of the same
class, of a different class or of a different issuer, as the case may be.
Warrants represent the privilege to purchase securities at a stipulated price
and are usually valid for several years. Rights and warrants generally do not
entitle a holder to dividends or voting rights with respect to the underlying
securities nor do they represent any rights in the assets of the issuing
company.
Also, the value of a right or warrant may not necessarily change with the value
of the underlying securities and rights and warrants cease to have value if they
are not exercised prior to their expiration date.
OPTIONS AND FINANCIAL FUTURES TRANSACTIONS. The Fund may engage in options and
financial futures transactions in accordance with its investment objective and
policies. Although the Fund is not currently employing such options and
financial futures transactions, it may engage in such transactions in the future
if it appears advantageous to us to do so, in order to cushion the effects of
fluctuating interest rates and adverse market conditions. The use of options and
financial futures, and possible benefits and attendant risks, are discussed
below, along with information concerning certain other investment policies and
techniques.
FINANCIAL FUTURES CONTRACTS. The Fund may enter into contracts for the future
delivery of a financial instrument, such as a security or the cash value of a
securities index. This investment technique is designed primarily to hedge
(i.e., protect) against anticipated future changes in interest rates or market
conditions which otherwise might adversely affect the value of securities which
the Fund holds or intends to purchase. A "sale" of a futures contract means the
undertaking of a contractual obligation to deliver the securities or the cash
value of an index called for by the contract at a specified price during a
specified delivery period. A "purchase" of a futures contract means the
undertaking of a contractual obligation to acquire the securities or cash value
of an index at a specified price during a specified delivery period. At the time
of delivery pursuant to the contract, adjustments are made to recognize
differences in value arising from the delivery of securities which differ from
those specified in the contract. In some cases, securities called for by a
futures contract may not have been issued at the time the contract was written.
The Fund will not enter into any futures contracts or options on futures
contracts if the aggregate of the market value of the securities covered by such
outstanding contracts and options would exceed 50% of its total assets.
Although some financial futures contracts by their terms call for the actual
delivery or acquisition of securities, in most cases, a party will close out the
contractual commitment before delivery without having to make or take delivery
of the security by purchasing (or selling, as the case may be) on a commodities
exchange an identical futures contract calling for delivery in the same month.
Such a transaction, if effected through a member of an exchange, cancels the
obligation to make or take delivery of the securities. All transactions in the
futures market are made, offset or fulfilled through a clearing house associated
with the exchange on which the contracts are traded. The Fund will incur
brokerage fees when it purchases or sells contracts and will be required to
maintain margin deposits. At the time it enters into a futures contract, it is
required to deposit with the custodian, on behalf of the broker, a specified
amount of cash or eligible securities called "initial margin." The initial
margin required for a futures contract is set by the exchange on which the
contract is traded. Subsequent payments, called "variation margin," to and from
the broker are made on a daily basis as the market price of the futures contract
fluctuates. The costs incurred in connection with futures transactions could
3
<PAGE>
reduce our return. Futures contracts entail risks. If the investment adviser's
judgment about the general direction of interest rates or markets is wrong, the
overall performance may be poorer than if no such contracts had been entered
into.
There may be an imperfect correlation between movements in prices of futures
contracts and portfolio securities being hedged. The degree of difference in
price movements between futures contracts and the securities (or securities
indices) being hedged depends upon such things as variations in demand for
futures contracts and securities underlying the contracts and differences
between the liquidity of the markets for such contracts and the securities
underlying them. In addition, the market prices of futures contracts may be
affected by certain factors not directly related to the underlying securities.
At any given time, the availability of futures contracts, and hence their
prices, are influenced by credit conditions and margin requirements. Due to the
possibility of price distortions in the futures market and because of the
imperfect correlation between movements in the prices of securities and
movements in the prices of futures contracts, a correct forecast of market
trends by the investment adviser may not result in a successful hedging
transaction.
CALL OPTIONS ON STOCK. The Fund may, from time to time, write call options on
its portfolio securities. The Fund may write only call options which are
"covered," meaning that the Fund either owns the underlying security or has an
absolute and immediate right to acquire that security, without additional cash
consideration, upon conversion or exchange of other securities currently held in
its portfolio. In addition, the Fund will not permit the call to become
uncovered prior to the expiration of the option or termination through a closing
purchase transaction as described below. If the Fund writes a call option, the
purchaser of the option has the right to buy (and the Fund has the obligation to
sell) the underlying security at the exercise price throughout the term of the
option. The amount paid to the Fund by the purchaser of the option is the
"premium." The Fund's obligation to deliver the underlying security against
payment of the exercise price would terminate either upon expiration of the
option or earlier if the Fund were to effect a "closing purchase transaction"
through the purchase of an equivalent option on an exchange. There can be no
assurance that a closing purchase transaction can be effected. The Fund does not
intend to write covered call options with respect to securities with an
aggregate market value of more than 5% of its gross assets at the time an option
is written.
The Fund will not be able to effect a closing purchase transaction after it
receives notice of exercise. In order to write a call option, the Fund is
required to comply with the rules of The Options Clearing Corporation and the
various exchanges with respect to collateral requirements. The Fund may not
purchase call options except in connection with a closing purchase transaction.
It is possible that the cost of effecting a closing purchase transaction may be
greater than the premium received by the Fund for writing the option.
Generally, the Fund intends to write listed covered call options during periods
when it anticipates declines in the market values of portfolio securities
because the premiums received may offset to some extent the decline in the
Fund's net asset value occasioned by such declines in market value. Except as
part of the "sell discipline" described below, the Fund will generally not write
listed covered call options when it anticipates that the market values of its
portfolio securities will increase.
One reason for the Fund to write call options is as part of a "sell discipline."
If the Fund decides that a portfolio security would be overvalued and should be
sold at a certain price higher than the current price, it could write an option
on the stock at the higher price. Should the stock subsequently reach that price
and the option be exercised, the Fund would, in effect, have increased the
selling price of that stock, which it would have sold at that price in any
event, by the amount of the premium. In the event the market price of the stock
declined and the option were not exercised, the premium would offset all or some
portion of the decline. It is possible that the price of the stock could
increase beyond the exercise price; in that event, the Fund would forego the
opportunity to sell the stock at that higher price.
In addition, call options may be used as part of a different strategy in
connection with sales of portfolio securities. If, in the judgment of the Fund
Management, the market price of a stock is overvalued and it should be sold, the
Fund may elect to write a call option with an exercise price substantially below
the current market price. As long as the value of the underlying security
remains above the exercise price during the term of the option, the option will,
in all probability, be exercised, in which case the Fund will be required to
sell the stock at the exercise price. If the sum of the premium and the exercise
price exceeds the market price of the stock at the time the call option is
written, the Fund would, in
4
<PAGE>
effect, have increased the selling price of the stock. The Fund would not write
a call option in these circumstances if the sum of the premium and the exercise
price were less than the current market price of the stock.
PUT OPTIONS ON STOCK. The Fund may also write listed put options. If the Fund
writes a put option, it is obligated to purchase a given security at a specified
price at any time during the term of the option.
Writing listed put options is a useful portfolio investment strategy when the
Fund has cash or other reserves available for investment as a result of sales of
Fund shares or, more importantly, because Fund Management believes a more
defensive and less fully invested position is desirable in light of market
conditions. If the Fund Management wishes to invest its cash or reserves in a
particular security at a price lower than current market value, it may write a
put option on that security at an exercise price which reflects the lower price
it is willing to pay. The buyer of the put option generally will not exercise
the option unless the market price of the underlying security declines to a
price near or below the exercise price. If the Fund writes a listed put, the
price of the underlying stock declines and the option is exercised, the premium,
net of transaction charges, will reduce the purchase price paid by the Fund for
the stock. The price of the stock may decline by an amount in excess of the
premium, in which event the Fund would have foregone an opportunity to purchase
the stock at a lower price.
If, prior to the exercise of a put option, the Fund determines that it no longer
wishes to invest in the stock on which the put option had been written, the Fund
may be able to effect a closing purchase transaction on an exchange by
purchasing a put option of the same series as the one which it has previously
written. The cost of effecting a closing purchase transaction may be greater
than the premium received on writing the put option and there is no guarantee
that a closing purchase transaction can be effected.
The Fund may only write covered put options to the extent that cover for such
options does not exceed 25% of its net assets. The Fund will not purchase an
option if, as a result of such purchase, more than 20% of its total assets would
be invested in premiums for such options.
Unless the Fund has other liquid assets that are sufficient to satisfy the
exercise of a call, the Fund would be required to liquidate portfolio securities
in order to satisfy the exercise. Because an exercise must be settled within
hours after receiving the notice of exercise, if the Fund fails to anticipate an
exercise, it may have to borrow (in amounts not exceeding 20% of the Fund's
total assets) pending settlement of the sale of securities in its portfolio and
would incur interest charges thereon.
When the Fund has written a call, there is also a risk that the market may
decline between the time the call is written and the time the Fund is able to
sell stocks in its portfolio. As with stock options, the Fund will not learn
that an index option has been exercised until the day following the exercise
date but, unlike a call on stock where the Fund would be able to deliver the
underlying securities in settlement, the Fund may have to sell part of its stock
portfolio in order to make settlement in cash, and the price of such stocks
might decline before they can be sold. This timing risk makes certain strategies
involving more than one option substantially more risky with index options than
with stock options. For example, even if an index call which the Fund has
written is "covered" by an index call held by the Fund with the same strike
price, the Fund will bear the risk that the level of the index may decline
between the close of trading on the date the exercise notice is filed with the
clearing corporation and the close of trading on the date the Fund exercises the
call it holds or the time the Fund sells the call which in either case would
occur no earlier than the day following the day the exercise notice was filed.
2.
TRUSTEES AND OFFICERS
The Board of Trustees of the Fund is responsible for the management of the
business and affairs of the Fund.
The following trustee is a partner of Lord, Abbett & Co. ("Lord Abbett"), The
General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203He. He
has been associated with Lord Abbett for over five years and is also an officer,
director, or trustee of thirteen other Lord Abbett-sponsored funds.
5
<PAGE>
*Robert S. Dow, age 54, Chairman and President
*Mr. Dow is an "interested person" as defined in the Act.
The following outside trustees are also directors or trustees of thirteen other
Lord Abbett-sponsored funds referred to above.
E. Thayer Bigelow
Time Warner Inc.
1271 Avenue of the Americas
New York, New York
Senior Adviser, Time Warner Inc. Formerly, Acting Chief Executive Officer of
Courtroom Television Network (1997 - 1998). Formerly, President and Chief
Executive Officer of Time Warner Cable Programming, Inc. (1991 - 1997). Prior to
that, President and Chief Operating Officer of Home Box Office, Inc. Age 58.
William H.T. Bush
Bush-O'Donnell & Co., Inc.
101 South Hanley Road, Suite 1025
St. Louis, Missouri
Co-founder and Chairman of the Board of financial advisory firm of
Bush-O'Donnell & Company. Age 61.
Robert B. Calhoun, Jr.
Monitor Clipper Partners
650 Madison Avenue, 9th Floor
New York, New York
Managing Director of Monitor Clipper Partners and President of The Clipper Group
L.P., both private equity investment funds. Age 58.
Stewart S. Dixon
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois
Partner in the law firm of Wildman, Harrold, Allen & Dixon. Age 69.
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 74.
C. Alan MacDonald
Directorship Inc.
8 Sound Shore Drive
Greenwich, Connecticut
Currently involved in golf development management on a consultancy basis.
Formerly, Managing Director of The Directorship Inc., a consultancy in board
management and corporate governance (1997-1999). Prior to that, General Partner
of The Marketing Partnership, Inc., a full service marketing consulting firm
(1994-1997). Prior to that, Chairman and Chief Executive Officer of Lincoln
Snacks, Inc., manufacturer of branded snack foods (1992-1994). His career spans
36 years at Stouffers and Nestle with 18 of the years as Chief Executive
Officer. Currently serves as
6
<PAGE>
Director of DenAmerica Corp., J. B. Williams Company, Inc., Fountainhead Water
Company and Exigent Diagnostics. Age 66.
Hansel B. Millican, Jr.
Rochester Button Company
1328 Broadway (Suite 816)
New York, New York
President and Chief Executive Officer of Rochester Button Company. Age 71.
Thomas J. Neff
Spencer Stuart
277 Park Avenue
New York, New York
Chairman of Spencer Stuart, an executive search consulting firm. Currently
serves as a Director of Ace, Ltd. (NYSE). Age 61.
The second column of the following table sets forth the compensation accrued for
outside trustees. The third column sets forth information with respect to the
equity-based benefits accrued for outside directors/trustees maintained by the
Lord Abbett-sponsored funds. The fourth column sets forth information with
respect to the retirement plan for outside directors/trustees maintained by each
of the Lord Abbett-sponsored funds. No director/trustee of the funds associated
with Lord Abbett and no officer of the funds received any compensation from the
funds for acting as a director/trustee or officer.
<TABLE>
<CAPTION>
For the Fiscal Year
-------------------
(1) (2) (3) (4)
Pension or For Year Ended
Retirement Benefits December 31, 1998
Accrued by the Total Compensation
Aggregate Company and Accrued by the Company and
Compensation Thirteen Other Lord Thirteen Other Lord
Accrued by Abbett-sponsored Abbett-sponsored
Name of Trustee the Company /1/ Companies /2/ Companies /3/
- --------------- --------------- ------------------- -----------------------
<S> <C> <C> <C>
E. Thayer Bigelow None $17,068 $56,00057,400
William H.T. Bush* None None $27,500
Rgbert B. Calhoun, Jr.** None None $33,500
Stewart S. Dixon None $32,190 $55,000$56,500
John C. Jansing None $45,085(4) $55,0500
C. Alan MacDonald None $30,703 $57,4005,000
Hansel B. Millican, Jr. None $37,747 $55,500
Thomas J. Neff None $19,853 $56,500
</TABLE>
*Elected as of August 13, 1998
**Elected as of June 17, 1998
1. Outside trustees' fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored companies based on
the net assets of each fund. A portion of the fees payable by the Company
to its outside trustees is being deferred under a plan that deems the
deferred amounts to be invested in shares of
7
<PAGE>
the Company for later distribution to the trustees. Since the Company is
new, no compensation has yet been paid to its trustees.
2. The amounts in Column 3 were accrued by the Lord Abbett-sponsored companies
for the 12 months ended November 30, 1998 with respect to the equity based
plans established for independent directors/trustees in 1996. This plan
supercedes a previously approved retirement plan for all future
directors/trustees. Current directors/trustees had the option to convert
their accrued benefits under the retirement plan. All of the outside
directors/trustees except one made such an election.
3. This column shows aggregate compensation, including directors/trustees'
fees and attendance fees for board and committee meetings, of a nature
referred to in footnote one, accrued by the Lord Abbett-sponsored companies
during the year ended December 31, 1998. The amount of aggregate
compensation payable by the Company as of November 30, 1998 deemed invested
in Company shares, including dividends reinvested and changes in net asset
value applicable to such deemed investments, were:
[TO BE INSERTED]
4. Mr. Jansing chose to continue to receive benefits under the retirement plan
which provides that outside trustees/directors may receive annual
retirement benefits for life equal to their final annual retainer following
retirement at or after age 72 with at least ten years of service. Thus, if
Mr. Jansing were to retire and the annual retainer payable by the funds
were the same as it is today, he would receive annual retirement benefits
of $50,000.
Except where indicated, the following executive officers of the Company have
been associated with Lord Abbett for over five years. Messrs. Brown, Carper,
Fetch, Hilstad, McGruder, Morris, and Walsh are partners of Lord Abbett; the
others are employees. None have received compensation :from the Fund.
EXECUTIVE VICE PRESIDENT:
Robert G. Morris, age 54
VICE PRESIDENT:
Paul A. Hilstad, age 56, Vice President and Secretary (with Lord Abbett since
1995; formerly Senior Vice President and General Counsel of American Capital
Management & Research, Inc.)
Daniel E. Carper, age 47
Lawrence H. Kaplan, age 42 (with Lord Abbett since 1997 - formerly Vice
President and Chief Counsel of Salomon Brothers Asset Management Inc from 1995
to 1997, prior thereto Senior Vice President, Director and General Counsel of
Kidder Peabody Asset Management, Inc.)
A. Edward Oberhaus, age 39
John J. Walsh, age 63
TREASURER:
Donna M. McManus, age 38 (with Lord Abbett since 1996, formerly a Senior Manager
at Deloitte & Touche LLP).
The Company does not hold annual meetings of shareholders unless one or more
matters are required to be acted on by shareholders under the Act. Under the
Company's Declaration of Trust, shareholder meetings may be called at any time
by certain officers of the Company or by a majority of the trustees (i) for the
purpose of taking action upon any matter requiring the vote or authority of the
Company's shareholders or upon other matters deemed to be necessary or desirable
or (ii) upon the written request of the holders of at least one-quarter of the
shares of the Company's outstanding and entitled to vote at the meeting.
8
<PAGE>
As of (DATE), 1999, our officers and trustees, as a group, owned less than 1% of
the Fund's outstanding shares. As of (DATE), 1999, there were no record holders
of 5% or more of the Fund's outstanding shares.
3.
INVESTMENT ADVISORY AND OTHER SERVICES
As described under "Management" in the Prospectus, Lord Abbett is the Fund's
investment manager. Of the general partners of Lord Abbett, the following are
officers and/or directors of the Fund: Daniel E. Carper, Robert S. Dow, Paul A.
Hilstad, Robert G. Morris and John Walsh. The other general partners are:
Stephen I. Allen, Zane E. Brown, John E. Erard, Robert P. Fetch, Daria L.
Foster, Robert I. Gerber, W. Thomas Hudson, Stephen J. McGruder, Michael B.
McLaughlin, Robert J. Noelke, R. Mark Pennington and Christopher J. Towle. The
address of each partner is The General Motors Building, 767 Fifth Avenue, New
York, New York 10153-0203.
The services performed by Lord Abbett are described under "Management" in the
Prospectus. Under the Management Agreement, we are obligated to pay Lord Abbett
a monthly fee, based on average daily net assets for each month at an annual
rate of __ of 1% for the Large-Cap Growth Fund. This fee is allocated among the
classes of the Fund based on the Fund's average daily net assets.
The Fund pays all expenses not expressly assumed by Lord Abbett, including,
without limitation, 12b-1 expenses, outside trustees' fees and expenses,
association membership dues, legal and auditing fees, taxes, transfer and
dividend disbursing agent fees, shareholder servicing costs, expenses relating
to shareholder meetings, expenses of preparing, printing and mailing stock
certificates and shareholder reports, expenses of registering our shares under
federal and state securities laws, expenses of preparing, printing and mailing
prospectuses to existing shareholders, insurance premiums, brokerage and other
expenses connected with executing portfolio transactions.
Although not obligated to do so, Lord Abbett may waive all or a part of its
management fees and or may assume other expenses of the Fund.
Lord Abbett Distributor LLC, General Motors Building, 767 Fifth Avenue, The
General Motors Building , New York, New York 10153-0203, serves as the principal
underwriter for the Fund.
The Bank of New York ("BNY"), 48 Wall Street, New York, New York, is the
Company's custodian. In accordance with the requirements of Rule 17f-5, the
Company's Board of Trustees have approved arrangements permitting the Fund's
foreign assets not held by BNY or its foreign branches to be held by certain
qualified foreign banks and depositories.
Deloitte & Touche LLP, Two World Financial Center, New York, New York, are the
independent auditors of the Company and must be approved at least annually by
our Board of Trustees to continue in such capacity. Deloitte & Touche LLP
perform audit services for the Fund, including the examination of financial
statements included in the Fund's Annual Report to Shareholders.
United Missouri Bank of Kansas City, N.A., Tenth and Grand, Kansas City,
Missouri, acts as the transfer agent and dividend disbursing agent for the Fund.
4.
PORTFOLIO TRANSACTIONS
The Company's policy is to obtain best execution on all our portfolio
transactions, which means that it seeks to have purchases and sales of portfolio
securities executed at the most favorable prices, considering all costs of the
transaction including brokerage commissions and dealer markups and markdowns and
taking into account the full range and quality of the brokers' services.
Consistent with obtaining best execution, we generally pay, as described below,
a higher commission than some brokers might charge on the same transaction. Our
policy with respect to best execution governs the selection of brokers or
dealers and the market in which the transaction is executed. To the extent
permitted by law,
9
<PAGE>
we may, if considered advantageous, make a purchase from or sale to another Lord
Abbett-sponsored fund without the intervention of any broker-dealer.
Broker-dealers are selected on the basis of their professional capability and
the value and quality of their brokerage and research services. Normally, the
selection is made by traders who are officers of each Lord Abbett-sponsored fund
and also are employees of Lord Abbett. These traders do the trading as well for
other accounts -- investment companies (of which they are also officers) and
other investment clients -- managed by Lord Abbett. They are responsible for
obtaining best execution. We pay a commission rate that we believe is
appropriate to give maximum assurance that our brokers will provide us, on a
continuing basis, the highest level of brokerage services available. While we do
not always seek the lowest possible commissions on particular trades, we believe
that our commission rates are in line with the rates that many other
institutions pay. Our traders are authorized to pay brokerage commissions in
excess of those that other brokers might accept on the same transactions in
recognition of the value of the services performed by the executing brokers,
viewed in terms of either the particular transaction or the overall
responsibilities of Lord Abbett with respect to us and the other accounts they
manage. Such services include showing us trading opportunities including blocks,
a willingness and ability to take positions in securities, knowledge of a
particular security or market proven ability to handle a particular type of
trade, confidential treatment, promptness and reliability.
Some of these brokers also provide research services at least some of which are
useful to Lord Abbett in their overall responsibilities with respect to us and
the other accounts they manage. Research includes the furnishing of analyses and
reports concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts and trading equipment and
computer software packages, acquired from third-party suppliers, that enable
Lord Abbett to access various information bases. Such services may be used by
Lord Abbett in servicing all their accounts, and not all of such services will
necessarily be used by Lord Abbett in connection with their management of the
Fund; conversely, such services furnished in connection with brokerage on other
accounts managed by Lord Abbett may be used in connection with their management
of the Fund, and not all of such services will necessarily be used by Lord
Abbett in connection with their advisory services to such other accounts. We
have been advised by Lord Abbett that research services received from brokers
cannot be allocated to any particular account, are not a substitute for Lord
Abbett's services but are supplemental to their own research effort and, when
utilized, are subject to internal analysis before being incorporated by Lord
Abbett into their investment process. As a practical matter, it would not be
possible for Lord Abbett to generate all of the information presently provided
by brokers. While receipt of research services from brokerage firms has not
reduced Lord Abbett's normal research activities, the expenses of Lord Abbett
could be materially increased if it attempted to generate such additional
information through its own staff and purchased such equipment and software
packages directly from the suppliers.
No commitments are made regarding the allocation of brokerage business to or
among brokers, and trades are executed only when they are dictated by investment
decisions of the Lord Abbett-sponsored funds to purchase or sell portfolio
securities.
If two or more broker-dealers are considered capable of offering the equivalent
likelihood of best execution, the broker-dealer who has sold the Lord
Abbett-sponsored funds' shares and/or shares of other Lord Abbett-sponsored
funds may be preferred.
If other clients of Lord Abbett buy or sell the same security at the same time
as a Lord Abbett-sponsored fund does, transactions will, to the extent
practicable, be allocated among all participating accounts in proportion to the
amount of each order and will be executed daily until filled so that each
account shares the average price and commission cost of each day. Other clients
who direct that their brokerage business be placed with specific brokers or who
invest through wrap accounts introduced to Lord Abbett by certain brokers may
not participate with a Lord Abbett-sponsored fund in the buying and selling of
the same securities as described above. If these clients wish to buy or sell the
same security as a Lord Abbett-sponsored fund does, they may have their
transactions executed at times different from our transactions and thus may not
receive the same price or incur the same commission cost as a Lord
Abbett-sponsored fund does.
10
<PAGE>
The Lord Abbett-sponsored funds will not seek "reciprocal" dealer business (for
the purpose of applying commissions in whole or in part for their benefit or
otherwise) from dealers as consideration for the direction to them of portfolio
business.
5.
PURCHASES, REDEMPTIONS
AND SHAREHOLDER SERVICES
Information concerning how we value our shares for the purchase and redemption
of our shares is contained in the Prospectus under "Purchases" and
"Redemptions," respectively.
As disclosed in the Prospectus, we calculate our net asset value as of the close
of the New York Stock Exchange ("NYSE") on each day that the NYSE is open for
trading by dividing our total net assets by the number of shares outstanding at
the time of calculation. The NYSE is closed on Saturdays and Sundays and the
following holidays -- New Year's Day, Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.
The Fund values its portfolio securities at market value as of the close of the
NYSE. Market value will be determined as follows: securities listed or admitted
to trading privileges on the NYSE or American Stock Exchange or on the NASDAQ
National Market System are valued at the last sales price, or, if there is no
sale on that day, at the mean between the last bid and asked prices, or, in the
case of bonds, in the over-the-counter market if, in the judgment of the Fund's
officers, that market more accurately reflects the market value of the bonds.
Over-the-counter securities not traded on the NASDAQ National Market System are
valued at the mean between the last bid and asked prices. Securities for which
market quotations are not available are valued at fair market value under
procedures approved by the Board of Trustees.
The net asset value per share for each class of shares will be determined by
dividing the net assets attributable to that class by shares outstanding of that
class.
The Fund has entered into a distribution agreement with Lord Abbett Distributor
LLC, a New York limited liability cgmpany ("Lord Abbett Distributor") and
subsidiary of Lord Abbett under which Lord Abbett Distributor is obligated to
use its best efforts to find purchasers for the shares of the Fund, and to make
reasonable efforts to sell Fund shares so long as, in Lord Abbett Distributor's
judgment, a substantial distribution can be obtained by reasonable efforts. the
CONVERSION OF CLASS B SHARES. The conversion of Class B shares on the eighth
anniversary of their purchase is subject to the continuing availability of a
private letter ruling from the Internal Revenue Service, or an opinion of
counsel or tax adviser, to the effect that the conversion of Class B shares does
not constitute a taxable event for the holder under Federal income tax law. If
such a revenue ruling or opinion is no longer available, the automatic
conversion feature may be suspended, in which event no further conversions of
Class B shares would occur while such suspension remained in effect. Although
Class B shares could then be exchanged for Class A shares on the basis of
relative net asset value of the two classes, without the imposition of a sales
charge or fee, such exchange could constitute a taxable event for the holder.
ALTERNATIVE SALES ARRANGEMENTS
CLASSES OF SHARES. The Fund offers investors four different classes of shares.
The different classes of shares represent investments in the same portfolio of
securities but are subject to different expenses and will likely have different
share prices. Investors should read this section carefully to determine which
class represents the best investment option for their particular situation.
CLASS A SHARES. If you buy Class A shares, you pay an initial sales charge on
investments of less than $1 million (or on investments for employer-sponsored
retirement plans under the Internal Revenue Code (hereinafter referred to as
"Retirement Plans") with less than 100 eligible employees or on investments that
do not qualify to be under a "special
11
<PAGE>
retirement wrap program" as a program sponsored by an authorized institution
showing one or more characteristics distinguishing it, in the opinion of Lord
Abbett Distributor from a mutual fund wrap fee program). If you purchase Class A
shares as part of an investment of at least $1 million (or for Retirement Plans
with at least 100 eligible employees or under a special retirement wrap program)
in shares of one or more Lord Abbett-sponsored funds, you will not pay an
initial sales charge, but if you redeem any of those shares within 24 months
after the month in which you buy them, you may pay to the Fund a contingent
deferred sales charge ("CDSC") of 1% except for redemptions under a special
retirement wrap program. Class A shares are subject to service and distribution
fees that are currently estimated to total annually approximately of 1% of the
annual net asset value of the Class A shares. The initial sales charge rates,
the CDSC and the Rule 12b-1 plan applicable to the Class A shares are described
in "Buying Class A Shares" below.
CLASS B SHARES. If you buy Class B shares, you pay no sales charge at the time
of purchase, but if you redeem your shares before the sixth anniversary of
buying them, you will normally pay a CDSC to Lord Abbett Distributor LLC ("Lord
Abbett Distributor"). That CDSC varies depending on how long you own shares.
Class B shares are subject to service and distribution fees at an annual rate of
1% of the annual net asset value of the Class B shares. The CDSC and the Rule
12b-1 plan applicable to the Class B shares are described in "Buying Class B
Shares" below.
CLASS C SHARES. If you buy Class C shares, you pay no sales charge at the time
of purchase, but if you redeem your shares before the first anniversary of
buying them, you will normally pay the Fund a CDSC of 1%. Class C shares are
subject to service and distribution fees at an annual rate of 1% of the annual
net asset value of the Class C shares. The CDSC and the Rule 12b-1 plan
applicable to the C shares are described in "Buying Class C Shares" below.
CLASS P SHARES. If you buy Class P shares, you pay no sales charge at the time
of purchase, and if you redeem your shares you pay no CDSC. Class P shares are
subject to service and distribution fees at an annual rate of .45 of 1% of the
average daily net asset value of the Class P shares. The Rule 12b-1 plan
applicable to the Class P shares is described in the "Class P Rule 12b-1 Plan."
Class P shares are available to a limited number of investors.
WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is
better suited to your needs depends on a number of factors which you should
discuss with your financial adviser. The Fund's class-specific expenses and the
effect of the different types of sales charges on your investment will affect
your investment results over time. The most important factors are how much you
plan to invest and how long you plan to hold your investment. If your goals and
objectives change over time and you plan to purchase additional shares, you
should re-evaluate those factors to see if you should consider another class of
shares.
In the following discussion, to help provide you and your financial adviser with
a framework in which to choose a class, we have made some assumptions using a
hypothetical investment in the Fund. We used the sales charge rates that apply
to Class A, Class B, and Class C, and considered the effect of the higher
distribution fees on Class B and Class C expenses (which will affect your
investment return). Of course, the actual performance of your investment cannot
be predicted and will vary, based on the Fund's actual investment returns, the
operating expenses borne by each class of shares, and the class of shares you
purchase. The factors briefly discussed below are not intended to be investment
advice, guidelines or recommendations, because each investor's financial
considerations are different. The discussion below of the factors to consider in
purchasing a particular class of shares assumes that you will purchase only one
class of shares and not a combination of shares of different classes.
HOW LONG DO YOU EXPECT TO HOLD YOUR INVESTMENT? While future financial needs
cannot be predicted with certainty, knowing how long you expect to hold your
investment will assist you in selecting the appropriate class of shares. For
example, over time, the reduced sales charges available for larger purchases of
Class A shares may offset the effect of paying an initial sales charge on your
investment, compared to the effect over time of higher class-specific expenses
on Class B or Class C shares for which no initial sales charge is paid. Because
of the effect of class-based expenses, your choice should also depend on how
much you plan to invest.
Investing for the Short Term. If you have a short-term investment horizon (that
is, you plan to hold your shares for not more than six years), you should
probably consider purchasing Class A or Class C shares rather than Class B
shares. This is because of the effect of the Class B CDSC if you redeem before
the sixth anniversary of your purchase, as well
12
<PAGE>
as the effect of the Class B distribution fee on the investment return for that
class in the short term. Class C shares might be the appropriate choice
(especially for investments of less than $100,000), because there is no initial
sales charge on Class C shares, and the CDSC does not apply to amounts you
redeem after holding them one year.
However, if you plan to invest more than $100,000 for the short term, then the
more you invest and the more your investment horizon increases toward six years,
the more attractive the Class A share option may become. This is because the
annual distribution fee on Class C shares will have a greater impact on your
account over the longer term than the reduced front-end sales charge available
for larger purchases of Class A shares. For example, Class A might be more
appropriate than Class C for investments of more than $100,000 expected to be
held for 5 or 6 years (or more). For investments over $250,000 expected to be
held 4 to 6 years (or more), Class A shares may become more appropriate than
Class C. If you are investing $500,000 or more, Class A may become more
desirable as your investment horizon approaches 3 years or more.
For most investors who invest $1 million or more or for Retirement Plans with at
least 100 eligible employees or for investments pursuant to a special retirement
wrap program, in most cases Class A shares will be the most advantageous choice,
no matter how long you intend to hold your shares. For that reason, it may not
be suitable for you to place a purchase order for Class B shares of $500,000 or
more or a purchase order for Class C shares of $1,000,000 or more. In addition,
it may not be suitable for you to place an order for Class B or C shares for a
Retirement Plan with at least 100 eligible employees or for a special retirement
wrap program. You should discuss this with your financial advisor.
Investing for the Longer Term. If you are investing for the longer term (for
example, to provide for future college expenses for your child) and do not
expect to need access to your money for seven years or more, Class B shares may
be an appropriate investment option, if you plan to invest less than $100,000.
If you plan to invest more than $100,000 over the long term, Class A shares will
likely be more advantageous than Class B shares or Class C shares, as discussed
above, because of the effect of the expected lower expenses for Class A shares
and the reduced initial sales charges available for larger investments in Class
A shares under the Fund's Rights of Accumulation.
Of course, these examples are based on approximations of the effect of current
sales charges and expenses on a hypothetical investment over time, and should
not be relied on as rigid guidelines.
ARE THERE DIFFERENCES IN ACCOUNT FEATURES THAT MATTER TO YOU? Some account
features are available in whole or in part to Class A, Class B and Class C
shareholders. Other features (such as Systematic Withdrawal Plans) might not be
advisable in non-Retirement Plan accounts for Class B shareholders (because of
the effect of the CDSC on the entire amount of a withdrawal if it exceeds 12%
annually) and in any account for Class C shareholders during the first year of
share ownership (due to the CDSC on withdrawals during that year). See
"Systematic Withdrawal Plan" under "Shareholder Services" in the Prospectus for
more information about the 12% annual waiver of the CDSC. You should carefully
review how you plan to use your investment account before deciding which class
of shares you buy. For example, the dividends payable to Class B and Class C
shareholders will be reduced by the expenses borne solely by each of these
classes, such as the higher distribution fee to which Class B and Class C shares
are subject, as described below.
HOW DOES IT AFFECT PAYMENTS TO MY BROKER? A salesperson, such as a broker, or
any other person who is entitled to receive compensation for selling Fund shares
may receive different compensation for selling one class than for selling
another class. As discussed in more detail below, such compensation is primarily
paid at the time of sale in the case of Class A and B shares and is paid over
time, so long as shares remain outstanding, in the case of Class C shares. It is
important that investors understand that the primary purpose of the CDSC for the
Class B shares and the distribution fee for Class B and Class C shares is the
same as the purpose of the front-end sales charge on sales of Class A shares: to
compensate brokers and other persons selling such shares. The CDSC, if payable,
supplements the Class B distribution fee and reduces the Class C distribution
fee expenses for the Fund and Class C shareholders.
CLASS A, B, C AND P RULE 12B-1 PLANS. As described in the Prospectus, the Fund
has adopted a Distribution Plan and Agreement pursuant to Rule 12b-1 of the Act
for each of the four Fund Classes: the "A Plan," the "B Plan," the "C Plan," and
the "P Plan," respectively. In adopting each Plan and in approving its
continuance, the Board of Trustees has concluded that there is a reasonable
likelihood that each Plan will benefit its respective Class and such Class'
13
<PAGE>
shareholders. The expected benefits include greater sales and lower redemptions
of Class shares, which should allow each Class to maintain a consistent cash
flow, and a higher quality of service to shareholders by authorized institutions
than would otherwise be the case. Lord Abbett uses amounts received under each
Plan as described in the Prospectus and for payments to dealers for (i)
providing continuous services to shareholders, such as answering shareholder
inquiries, maintaining records, and assisting shareholders in making
redemptions, transfers, additional purchases and exchanges and (ii) their
assistance in distributing shares of the Fund.
Each Plan requires the trustees to review, on a quarterly basis, written reports
of all amounts expended pursuant to the Plan and the purposes for which such
expenditures were made. Each Plan shall continue in effect only if its
continuance is specifically approved at least annually by vote of the trustees,
including a majority of the trustees who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related to the Plan ("outside trustees"), cast in
person at a meeting called for the purpose of voting on the Plan. No Plan may be
amended to increase materially above the limits set forth therein the amount
spent for distribution expenses thereunder without approval by a majority of the
outstanding voting securities of the applicable class and the approval of a
majority of the trustees, including a majority of the outside trustees. Each
Plan may be terminated at any time by vote of a majority of the outside trustees
or by vote of a majority of its Class's outstanding voting securities.
CONTINGENT DEFERRED SALES CHARGES. A Contingent Deferred Sales Charge ("CDSC")
(i) applies regardless of class, (ii) will not apply to shares purchased by the
reinvestment of dividends or capital gains distributions; (iii) will be assessed
on the lesser of the net asset value of the shares at the time of redemption or
the original purchase price and (iv) will not be imposed on the amount of your
account value represented by the increase in net asset value over the initial
purchase price (including increases due to the reinvestment of dividends and
capital gains distributions) and upon early redemption of shares. In the case of
Class A shares, this increase is represented by shares having an aggregate
dollar value in your account. In the case of Class B and C shares, this increase
is represented by that percentage of each share redeemed where the net asset
value exceeded the initial purchase price.
CLASS A SHARES. As stated in the Prospectus, subject to certain exceptions, a
CDSC of 1% is imposed with respect to those Class A shares (or Class A shares of
another Lord Abbett-sponsored fund or series acquired through exchange of such
shares) on which the Fund has paid the one-time distribution fee of 1% if such
shares are redeemed out of the Lord Abbett-sponsored family of funds within a
period of 24 months from the end of the month in which the original sale
occurred.
CLASS B SHARES. As stated in the Prospectus, subject to certain exceptions, if
Class B shares (or Class B shares of another Lord Abbett-sponsored fund or
series acquired through exchange of such shares) are redeemed out of the Lord
Abbett-sponsored family of funds for cash before the sixth anniversary of their
purchase, a CDSC will be deducted from the redemption proceeds. The Class B CDSC
is paid to Lord Abbett Distributor to reimburse its expenses, in whole or in
part, for providing distribution-related service to the Fund in connection with
the sale of Class B shares.
To determine whether the CDSC applies to a redemption, the Fund redeems shares
in the following order: (1) shares acquired by reinvestment of dividends and
capital gains distributions, (2) shares held on or after the sixth anniversary
of their purchase, and (3) shares held the longest before such sixth
anniversary. The amount of the contingent deferred sales charge will depend on
the number of years since you invested and the dollar amount being redeemed,
according to the following schedule:
<TABLE>
<CAPTION>
Anniversary of the Day on Contingent Deferred Sales Charge
Which the Purchase Order Was Accepted on Redemptions (As % of Amount Subject to Charge)
<S> <C>
Before the 1st 5.0%
On the 1st, before the 2nd 4.0%
On the 2nd, before the 3rd 3.0%
On the 3rd, before the 4th 3.0%
On the 4th, before the 5th 2.0%
On the 5th, before the 6th 1.0%
On or after the 6th anniversary None
</TABLE>
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<PAGE>
In the table, an "anniversary" is the 365th day subsequent to the acceptance of
a purchase order or a prior anniversary. All purchases are considered to have
been made on the business day on which the purchase order was accepted.
CLASS C SHARES. As stated in the Prospectus, subject to certain exceptions if
Class C shares are redeemed for cash before the first anniversary of their
purchase, the redeeming shareholder will be required to pay to the Fund on
behalf of Class C shares a CDSC of 1% of the lower of cost or the then net asset
value of Class C shares redeemed. If such shares are exchanged into the same
class of another Lord Abbett-sponsored fund and subsequently redeemed before the
first anniversary of their original purchase, the charge will be collected by
the other fund on behalf of this Fund's Class C shares.
GENERAL. The percentage (1% in the case of Class A and C shares and 5% through
1% in the case of Class B shares) used to calculate CDSCs described above for
the Class A, Class B and Class C shares is sometimes hereinafter referred to as
the "Applicable Percentage."
With respect to Class A and Class B shares, no CDSC is payable on redemptions by
participants or beneficiaries from employer-sponsored retirement plans under the
Internal Revenue Code for benefit payments due to plan loans, hardship
withdrawals, death, retirement or separation from service and for returns of
excess contributions to retirement plan sponsors. With respect to Class A shares
purchased pursuant to a special retirement wrap program, no CDSC is payable on
redemptions which continue as investments in another fund participating in the
program. With respect to Class B shares, no CDSC is payable for redemptions (i)
in connection with Systematic Withdrawal Plan and Div-Move services as described
below under those headings, (ii) in connection with mandatory distribution under
403(b) plans and IRAs and (iii) in connection with death of the shareholder. In
the case of Class A and Class C shares, the CDSC is received by the Fund and is
intended to reimburse all or a portion of the amount paid by the Fund if the
shares are redeemed before the Fund has had an opportunity to realize the
anticipated benefits of having a long-term shareholder account in the Fund. In
the case of Class B shares, the CDSC is received by Lord Abbett Distributor and
is intended to reimburse its expenses of providing distribution-related service
to the Fund (including recoupment of the commission payments made) in connection
with the sale of Class B shares before Lord Abbett Distributor has had an
opportunity to realize its anticipated reimbursement by having such a long-term
shareholder account subject to the B Plan distribution fee.
The other funds and series which participate in the Telephone Exchange Privilege
(except (a) Lord Abbett U.S. Government Securities Money Market Fund, Inc.
("GSMMF"), (b) certain series of Lord Abbett Tax-Free Income Fund and Lord
Abbett Tax-Free Income Trust for which a Rule 12b-1 Plan is not yet in effect,
and (c) any authorized institution's affiliated money market fund satisfying
Lord Abbett Distributor as to certain omnibus account and other criteria,
hereinafter referred to as an "authorized money market fund" or "AMMF"
(collectively, the "Non-12b-1 Funds")) have instituted a CDSC for each class on
the same terms and conditions. No CDSC will be charged on an exchange of shares
of the same class between Lord Abbett funds or between such funds and AMMF. Upon
redemption of shares out of the Lord Abbett family of funds or out of AMMF, the
CDSC will be charged on behalf of and paid: (i) to the fund in which the
original purchase (subject to a CDSC) occurred, in the case of the Class A and
Class C shares and (ii) to Lord Abbett Distributor if the original purchase was
subject to a CDSC, in the case of the Class B shares. Thus, if shares of a Lord
Abbett fund are exchanged for shares of the same class of another such fund and
the shares of the same class tendered ("Exchanged Shares") are subject to a
CDSC, the CDSC will carry over to the shares of the same class being acquired,
including GSMMF and AMMF ("Acquired Shares"). Any CDSC that is carried over to
Acquired Shares is calculated as if the holder of the Acquired Shares had held
those shares from the date on which he or she became the holder of the Exchanged
Shares. Although the Non-12b-1 Funds will not pay a distribution fee on their
own shares, and will, therefore, not impose their own CDSC, the Non-12b-1 Funds
will collect the CDSC (a) on behalf of other Lord Abbett funds, in the case of
the Class A and Class C shares and (b) on behalf of Lord Abbett Distributor, in
the case of the Class B shares. Acquired Shares held in GSMMF and AMMF which are
subject to a CDSC will be credited with the time such shares are held in GSMMF
but will not be credited with the time such shares are held in AMMF. Therefore,
if your Acquired Shares held in AMMF qualified for no CDSC or a lower Applicable
Percentage at the time of exchange into AMMF, that Applicable Percentage will
apply to redemptions for cash from AMMF, regardless of the time you have held
Acquired Shares in AMMF.
In no event will the amount of the CDSC exceed the Applicable Percentage of the
lesser of (i) the net asset value of the shares redeemed or (ii) the original
cost of such shares (or of the Exchanged Shares for which such shares were
15
<PAGE>
acquired). No CDSC will be imposed when the investor redeems (i) shares
representing an aggregate dollar amount of your account, in the case of Class A
shares, (ii) that percentage of each share redeemed, in the case of Class B and
C shares, derived from increases in the value of the shares above the total cost
of shares being redeemed due to increases in net asset value, (iii) shares with
respect to which no Lord Abbett fund paid a 12b-1 fee and, in the case of Class
B shares, Lord Abbett Distributor paid no sales charge or service fee (including
shares acquired through reinvestment of dividend income and capital gains
distributions) or (iv) shares which, together with Exchanged Shares, have been
held continuously for 24 months from the end of the month in which the original
sale occurred (in the case of Class A shares); for six years or more (in the
case of Class B shares) and for one year or more (in the case of Class C
shares). In determining whether a CDSC is payable, (a) shares not subject to the
CDSC will be redeemed before shares subject to the CDSC and (b) of the shares
subject to a CDSC, those held the longest will be the first to be redeemed.
EXCHANGES. The Prospectus briefly describes the Telephone Exchange Privilege.
You may exchange some or all of your shares of any class for those in the same
class of: (i) Lord Abbett-sponsored funds currently offered to the public with a
sales charge (front-end, back-end or level ), (ii) GSMMF or (iii) AMMF, to the
extent offers and sales may be made in your state. You should read the
prospectus of the other fund before exchanging. In establishing a new account by
exchange, shares of the Fund being exchanged must have a value equal to at least
the minimum initial investment required for the other fund into which the
exchange is made.
Shareholders in other Lord Abbett-sponsored funds and AMMF have the same right
to exchange their shares for the corresponding class of the Fund's shares.
Exchanges are based on relative net asset values on the day instructions are
received by the Fund in Kansas City if the instructions are received prior to
the close of the NYSE in proper form. No sales charges are imposed except in the
case of exchanges out of GSMMF or AMMF (unless a sales charge (front-end,
back-end or level) was paid on the initial investment in a Lord Abbett-sponsored
fund). Exercise of the exchange privilege will be treated as a sale for federal
income tax purposes, and, depending on the circumstances, a gain or loss may be
recognized. In the case of an exchange of shares that have been held for 90 days
or less where no sales charge is payable on the exchange, the original sales
charge incurred with respect to the exchanged shares will be taken into account
in determining gain or loss on the exchange only to the extent such charge
exceeds the sales charge that would have been payable on the acquired shares had
they been acquired for cash rather than by exchange. The portion of the original
sales charge not so taken into account will increase the basis of the acquired
shares.
Shareholders have the exchange privilege unless they refuse it in writing. You
should not view the exchange privilege as a means for taking advantage of
short-term swings in the market, and we reserve the right to terminate or limit
the privilege of any shareholder who makes frequent exchanges. We can revoke or
modify the privilege for all shareholders upon 60 days' prior notice. "Eligible
Funds" are AMMF and other Lord Abbett-sponsored funds which are eligible for the
exchange privilege, except Lord Abbett Series Fund ("LASF") which offers its
shares only in connection with certain variable annuity contracts and Lord
Abbett Equity Fund ("LAEF") which is not issuing shares.
STATEMENT OF INTENTION. Under the terms of the Statement of Intention as
described in the Prospectus you may invest $100,000 or more over a 13-month
period in shares of a Lord Abbett-sponsored fund (other than shares of LAEF,
LASF, LARF, GSMMF and AMMF, unless holdings in GSMMF and AMMF are attributable
to shares exchanged from a Lord Abbett-sponsored fund offered with a front-end,
back-end or level sales charge). Shares currently owned by you are credited as
purchases (at their current offering prices on the date the Statement is signed)
toward achieving the stated investment and reduced initial sales charge for
Class A shares. Class A shares valued at 5% of the amount of intended purchases
are escrowed and may be redeemed to cover the additional sales charge payable if
the Statement of Intention is not completed. The Statement of Intention is
neither a binding obligation on you to buy, nor on the Fund to sell, the full
amount indicated.
RIGHTS OF ACCUMULATION. As stated in the Prospectus, purchasers (as defined in
the Prospectus) may accumulate their investment in Lord Abbett-sponsored funds
(other than LAEF, LARF, LASF, GSMMF, and AMMF unless holdings in GSMMF or AMMF
are attributable to shares exchanged from a Lord Abbett-sponsored fund offered
with a front-end, back-end or level sales charge) so that a current investment,
plus the purchaser's holdings valued at the current maximum offering price,
reach a level eligible for a discounted sales charge for Class A shares.
NET ASSET VALUE PURCHASES OF CLASS A SHARES. As stated in the Prospectus, our
Class A shares may be purchased at net asset value by our trustees, employees of
Lord Abbett, employees of our shareholder servicing agent and employees
16
<PAGE>
of any securities dealer having a sales agreement with Lord Abbett who consents
to such purchases or by the director or custodian under any pension or
profit-sharing plan or Payroll Deduction IRA established for the benefit of such
persons or for the benefit of employees of any national securities trade
organization to which Lord Abbett belongs or any company with an account(s) in
excess of $10 million managed by Lord Abbett on a private-advisory-account
basis. For purposes of this paragraph, the terms "directors" and "employees"
include a director's or employee's spouse (including the surviving spouse of a
deceased director or employee). The terms "our directors" and "employees of Lord
Abbett" also include retired directors and employees and other family members
thereof.
Our Class A shares also may be purchased at net asset value (a) at $1 million or
more, (b) with dividends and distributions from Class A shares of other Lord
Abbett-sponsored funds, except for LARF, LAEF and LASF, (c) under the loan
feature of the Lord Abbett-sponsored prototype 403(b) plan for share purchases
representing the repayment of principal and interest, (d) by certain authorized
brokers, dealers, registered investment advisers or other financial institutions
who have entered into an agreement with Lord Abbett Distributor in accordance
with certain standards approved by Lord Abbett Distributor, providing
specifically for the use of our shares in particular investment products made
available for a fee to clients of such brokers, dealers, registered investment
advisers and other financial institutions, ("mutual fund wrap fee program"), (e)
by employees, partners and owners of unaffiliated consultants and advisors to
Lord Abbett, Lord Abbett Distributor or Lord Abbett-sponsored funds who consent
to such purchase if such persons provide service to Lord Abbett, Lord Abbett
Distributor or such funds on a continuing basis and are familiar with such
funds, (f) through Retirement Plans with at least 100 eligible employees, (g) in
connection with a merger, acquisition or other reorganization (h) through a
"special retirement wrap program" sponsored by an authorized institution having
one or more characteristics distinguishing it, in the opinion of Lord Abbett
Distributor, from a mutual fund wrap program. Such characteristics include,
among other things, the fact that an authorized institution does not charge its
clients any fee of a consulting or advisory nature that is economically
equivalent to the distribution fee under Class A 12b-1 Plan and the fact that
the program relates to participant-directed Retirement Plan. Shares are offered
at net asset value to these investors for the purpose of promoting goodwill with
employees and others with whom Lord Abbett Distributor and/or the Fund has
business relationships.
REDEMPTIONS. A redemption order is in proper form when it contains all of the
information and documentation required by the order form or supplementally by
Lord Abbett Distributor or the Fund to carry out the order. The signature(s) and
any legal capacity of the signer(s) must be guaranteed by an eligible guarantor.
See the Prospectus for expedited redemption procedures.
The right to redeem and receive payment, as described in the Prospectus, may be
suspended if the NYSE is closed (except for weekends or customary holidays),
trading on the NYSE is restricted or the Securities and Exchange Commission
deems an emergency to exist.
Our Board of Trustees may authorize redemption of all of the shares in any
account in which there are fewer than 25 shares. Before authorizing such
redemption, the Board must determine that it is in our economic best interest or
necessary to reduce disproportionately burdensome expenses in servicing
shareholder accounts. At least 6 months' prior written notice will be given
before any such redemption, during which time shareholders may avoid redemption
by bringing their accounts up to the minimum set by the Board.
DIV-MOVE. Under the Div-Move service described in the Prospectus, you can invest
the dividends paid on your account of any class into an existing account of the
same class in any other Eligible Fund. The account must be either your account,
a joint account for you and your spouse, a single account for your spouse, or a
custodial account for your minor child under the age of 21. You should read the
prospectus of the other fund before investing.
INVEST-A-MATIC. The Invest-A-Matic method of investing in the Fund and/or any
other Eligible Fund is described in the Prospectus. To avail yourself of this
method you must complete the application form, selecting the time and amount of
your bank checking account withdrawals and the funds for investment, include a
voided, unsigned check and complete the bank authorization.
SYSTEMATIC WITHDRAWAL PLANS. The Systematic Withdrawal Plan ("SWP") also is
described in the Prospectus. You may establish a SWP if you own or purchase
uncertificated shares having a current offering price value of at least
17
<PAGE>
$10,000. Lord Abbett prototype retirement plans have no such minimum. With
respect to Class B shares the CDSC will be waived on redemptions of up to 12%
per year of the current net asset value of your account at the time the SWP is
established. For Class B share redemptions over 12% per year, the CDSC will
apply to the entire redemption. Therefore, please contact the Fund for
assistance in minimizing the CDSC in this situation. With respect to Class C
shares, the CDSC will be waived on and after the first anniversary of their
purchase. The SWP involves the planned redemption of shares on a periodic basis
by receiving either fixed or variable amounts at periodic intervals. Since the
value of shares redeemed may be more or less than their cost, gain or loss may
be recognized for income tax purposes on each periodic payment. Normally, you
may not make regular investments at the same time you are receiving systematic
withdrawal payments because it is not in your interest to pay a sales charge on
new investments when in effect a portion of that new investment is soon
withdrawn. The minimum investment accepted while a withdrawal plan is in effect
is $1,000. The SWP may be terminated by you or by us at any time by written
notice.
RETIREMENT PLANS. The Prospectus indicates the types of retirement plans for
which Lord Abbett provides forms and explanations. Lord Abbett makes available
the retirement plan forms including 401(k) plans and custodial agreements for
IRAs (Individual Retirement Accounts, including Traditional, Education, Roth and
SIMPLE IRAs and Simplified Employee Pensions), 403(b) plans and qualified
pension and profit-sharing plans. The forms name Investors Fiduciary Trust
Company as custodian and contain specific information about the plans excluding
401(k) plans. Explanations of the eligibility requirements, annual custodial
fees and allowable tax advantages and penalties are set forth in the relevant
plan documents. Adoption of any of these plans should be on the advice of your
legal counsel or qualified tax adviser.
6.
PAST PERFORMANCE
The Fund computes the average annual compounded rate of total return for each
class during specified periods that would equate the initial amount invested to
the ending redeemable value of such investment by adding one to the computed
average annual total return, raising the sum to a power equal to the number of
years covered by the computation and multiplying the result by one thousand
dollars which represents a hypothetical initial investment. The calculation
assumes deduction of the maximum sales charge (as described in the next
paragraph) from the amount invested and reinvestment of all income dividends and
capital gains distributions on the reinvestment dates at prices calculated as
stated in the Prospectus. The ending redeemable value is determined by assuming
a complete redemption at the end of the period covered by the average annual
total return computation.
In calculating total returns for Class A shares, the current maximum sales
charge of 5.75% (as a percentage of the offering price) is deducted from the
initial investment (unless the return is shown at net asset value). For Class B
shares, the payment of the applicable CDSC (5.0% prior to the first anniversary
of purchase, 4.0% prior to the second anniversary of purchase, 3.0% prior to the
third and fourth anniversaries of purchase, 2.0% prior to the fifth anniversary
of purchase, 1.0% prior to the sixth anniversary of purchase and no CDSC on and
after the sixth anniversary of purchase) is applied to the Fund's investment
result for that class for the time period shown (unless the total return is
shown at net asset value). For Class C shares, the 1.0% CDSC is applied to the
Fund's investment result for that class for the time period shown prior to the
first anniversary of purchase (unless the total return is shown at net asset
value). Total returns also assume that all dividends and capital gains
distributions during the period are reinvested at net asset value per share, and
that the investment is redeemed at the end of the period.
Yield quotation for each Class is based on a 30-day period ended on a specified
date, computed by dividing our net investment income per share earned during the
period by the maximum offering price per share of such Class on the last day of
the period. This is determined by finding the following quotient: take the
Class' dividends and interest earned during the period minus its expenses
accrued for the period and divide by the product of (i) the average daily number
of shares of such Class outstanding during the period that were entitled to
receive dividends and (ii) the maximum offering price per share of such Class on
the last day of the period. To this quotient add one. This sum is multiplied by
itself five times. Then one is subtracted from the product of this
multiplication and the remainder is multiplied by two. Yield for the Class A
shares reflects the deduction of the maximum initial sales charge, but may also
be shown based on the Fund's net asset value per share. Yields for Class B and C
shares do not reflect the deduction of the CDSC.
18
<PAGE>
7.
TAXES
The value of any shares redeemed by the Fund or repurchased or otherwise sold
may be more or less than your tax basis in the shares at the time of
disposition. Any gain will generally be taxable for United States federal income
tax purposes. Any loss realized on the disposition of Fund shares which you have
held for six months or less will be treated for tax purposes as a long-term
capital loss to the extent of any "capital gains distributions" which you
received with respect to such shares. Losses on the sale of shares are not
deductible if, within a period beginning 30 days before the date of the sale and
ending 30 days after the date of the sale, the taxpayer acquires shares that are
substantially identical.
The writing of call options and other investment techniques and practices which
the Fund may utilize may affect the character and timing of the recognition of
gains and losses. Such transactions may increase the amount of short-term
capital gain realized by the Fund, which is taxed as ordinary income when
distributed to shareholders. Limitations imposed by the Internal Revenue Code on
regulated investment companies may restrict the Fund's ability to engage in
transactions in options.
The Fund may be subject to foreign withholding taxes, which would reduce the
yield on its investments. It is generally expected that Fund shareholders who
are subject to United States federal income tax will not be entitled to claim a
federal income tax credit or deduction for foreign income taxes paid by the
Fund.
The Fund will be subject to a 4% non-deductible excise tax on certain amounts
not distributed or treated as having been distributed on a timely basis each
calendar year. The Fund intends to distribute to shareholders each year an
amount adequate to avoid the imposition of such excise tax.
Dividends paid by the Fund will qualify for the dividends-received deduction for
corporations to the extent they are derived from dividends paid by domestic
corporations.
Gain and loss realized by the Fund on certain transactions, including sales of
foreign debt securities and certain transactions involving foreign currency,
will be treated as ordinary income or loss for federal income tax purposes to
the extent, if any, that such gain or loss is attributable to changes in
exchange rates for foreign currencies. Accordingly, distributions taxable as
ordinary income will include the net amount, if any, of such foreign exchange
gain and will be reduced by the net amount, if any, of such foreign exchange
loss.
If the Fund purchases shares in certain foreign investment entities called
"passive foreign investment companies," they may be subject to United States
federal income tax on a portion of any "excess distribution" or gain from the
disposition of such shares, even if such income is distributed as a taxable
dividend by the Fund to its shareholders. Additional charges in the nature of
interest may be imposed on either the Fund or its shareholders in respect of
deferred taxes arising from such distributions or gains. If the Fund were to
make a "qualified electing fund" election with respect to its investment in a
passive foreign investment company, in lieu of the foregoing requirements, the
Fund might be required to include in income each year a portion of the ordinary
earnings and net capital gains of the qualified electing fund, even if such
amount were not distributed to the Fund.
The foregoing discussion relates solely to U.S. federal income tax law as
applicable to United States persons (United States citizens or residents and
United States domestic corporations, partnerships, trusts and estates.) Each
shareholder who is not a United States person should consult his tax adviser
regarding the U.S. and foreign tax consequences of the ownership of shares of a
Fund, including a 30% (or lower treaty rate) United States withholding tax on
dividends representing ordinary income and net short-term capital gains, and the
applicability of United States gift and estate taxes.
19
<PAGE>
8.
INFORMATION ABOUT THE COMPANY
The directors, trustees and officers of Lord Abbett-sponsored mutual funds,
together with the partners and employees of Lord Abbett, are permitted to
purchase and sell securities for their personal investment accounts. In engaging
in personal securities transactions, however, such persons are subject to
requirements and restrictions contained in the Fund's Code of Ethics which
complies, in substance, with each of the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing. Among other things,
the Code requires that Lord Abbett partners and employees obtain advance
approval before buying or selling securities, submit confirmations and quarterly
transaction reports, and obtain approval before becoming a director of any
company; and it prohibits such persons from investing in a security 7 days
before or after any Lord Abbett-sponsored fund or Lord Abbett-managed account
considers a trade or trades in such security, prohibiting profiting on trades of
the same security within 60 days and trading on material and non-public
information. The Code imposes certain similar requirements and restrictions on
the independent directors and trustees of each Lord Abbett-sponsored mutual fund
to the extent contemplated by the recommendations of such Advisory Group.
20
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PART C OTHER INFORMATION
Item 23 Exhibits
(a) Declaration of Trust filed herewith.
(b) By-Laws filed herewith.
(c) Instruments Defining Rights of Security Holders not
applicable.
(d) Management Agreement filed herewith.
(e) Distribution Agreement filed herewith.
(f) Bonus or Profit Sharing Contracts is incorporated by
reference to Post Effective Amendment No. 6 to the
Registration Statement on Form N-1A filed on October 7,
1994. (g) Custodian Agreements to be filed.
(h) Other Material Contracts to be filed.
(i) Legal Opinion to be filed.
(j) Other Opinon to be filed.
(k) Omitted Financial Statements not applicable.
(l) Initial Capital Agreements to be filed.
(m) Rule 12b-1 Plans filed herewith.
(n) Financial Data Schedule not applicable.
(o) Rule 18f-3 Plan filed herewith.
Item 24 Persons Controlled by or Under Common Control with the Fund
-----------------------------------------------------------
None.
Item 25 Indemnification
The Registrant is a Delaware Business Trust established under
Chapter 38 of Title 12 of the Delaware Code. The Registrant's
Declaration and Instrument of Trust at Section 4.3 relating to
indemnification of Trustees, officers, etc. states the following. The
Trust shall indemnify each of its Trustees, officers, employees and
agents (including any individual who serves at its request as
director, officer, partner, trustee or the like of another
organization in which it has any interest as a shareholder, creditor
or otherwise) against all liabilities and expenses, including but not
limited to amounts paid in satisfaction of judgments, in compromise or
as fines and penalties, and counsel fees reasonably incurred by him or
her in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body in which he or she may be or may
have been involved as a party or otherwise or with which he or she may
be or may have been threatened, while acting as Trustee or as an
officer, employee or agent of the Trust or the Trustees, as the case
may be, or thereafter, by reason of his or her being or having been
such a Trustee, officer, employee or agent, except with respect to any
matter as to which he or she shall have been adjudicated not to have
acted in good faith in the reasonable belief that his or her action
was in the best interests of the Trust or any Series thereof.
Notwithstanding anything herein to the contrary, if any matter which
is the subject of indemnification hereunder relates only to one Series
(or to more than one but not all of the Series of the Trust), then the
indemnity shall be paid only out of the assets of the affected Series.
No individual shall be indemnified hereunder against any liability to
the Trust or any Series thereof or the Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office. In
addition, no such indemnity shall be provided with respect to any
matter disposed of by settlement or a compromise payment by such
Trustee, officer, employee or agent, pursuant to a consent decree or
otherwise, either for said payment or for any other expenses unless
there has been a determination that such compromise is in the best
interests of the Trust or, if appropriate, of any affected Series
thereof and that such Person appears to have acted in good faith in
the reasonable belief that his or her action was in the best interests
of the Trust or, if appropriate, of any affected Series thereof, and
did not engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her
office. All determinations that the applicable standards of conduct
have been met for indemnification hereunder shall be made by (a) a
majority vote of a quorum consisting of disinterested Trustees who are
not parties to the proceeding relating to indemnification, or (b) if
such a quorum is not obtainable or, even if obtainable, if a majority
vote of such quorum so directs, by independent legal counsel in a
written opinion, or (c) a vote of
<PAGE>
Shareholders (excluding Shares owned of record or beneficially by such
individual). In addition, unless a matter is disposed of with a court
determination (i) on the merits that such Trustee, officer, employee
or agent was not liable or (ii) that such Person was not guilty of
willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office, no
indemnification shall be provided hereunder unless there has been a
determination by independent legal counsel in a written opinion that
such Person did not engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his or her office.
The Trustees may make advance payments out of the assets of the Trust
or, if appropriate, of the affected Series in connection with the
expense of defending any action with respect to which indemnification
might be sought under this Section 4.3. The indemnified Trustee,
officer, employee or agent shall give a written undertaking to
reimburse the Trust or the Series in the event it is subsequently
determined that he or she is not entitled to such indemnification and
(a) the indemnified Trustee, officer, employee or agent shall provide
security for his or her undertaking, (b) the Trust shall be insured
against losses arising by reason of lawful advances, or (c) a majority
of a quorum of disinterested Trustees or an independent legal counsel
in a written opinion shall determine, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there
is reason to believe that the indemnitee ultimately will be found
entitled to indemnification. The rights accruing to any Trustee,
officer, employee or agent under these provisions shall not exclude
any other right to which he or she may be lawfully entitled and shall
inure to the benefit of his or her heirs, executors, administrators or
other legal representatives.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to Trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expense
incurred or paid by a Trustee, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Trustee, officer or controlling person
in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
<PAGE>
Item 26 Business and Other Connections of Investment Adviser
----------------------------------------------------
Lord, Abbett & Co. acts as investment adviser for the Lord
Abbett registered investment companies and provides investment
management services to various pension plans, institutions and
individuals. Lord Abbett Distributor, a limited liability
corporation, serves as their distributor and principal
underwriter. Other than acting as trustees, directors and/or
officers of open-end investment companies managed by Lord,
Abbett & Co., none of Lord, Abbett & Co.'s partners has, in
the past two fiscal years, engaged in any other business,
profession, vocation or employment of a substantial nature for
his or her own account or in the capacity of director,
officer, employee, partner or Trustee of any entity.
Investment Sub - Advisor
American Skandia Trust (Lord Abbett Growth & Income Portfolio)
Item 27 Principal Underwriters
(a) Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Mid-Cap Value Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett Global Fund, Inc.
Lord Abbett Series Fund, Inc.
Lord Abbett U.S. Government Money Market Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Tax-Free Income Trust
Lord Abbett Affiliated Fund, Inc.
Lord Abbett Investment Trust
Lord Abbett Research Fund, Inc.
Lord Abbett Securities Trust
Lord Abbett Developing Growth Fund, Inc.
(b) The partners of Lord, Abbett & Co. are:
Name and Principal Positions and Offices
Business Address (1) with Registrant
-------------------- ---------------
Robert S. Dow Chairman and President
Paul A. Hilstad Vice President & Secretary
Stephen J. McGruder Executive Vice President
Daniel E. Carper Vice President
Robert G. Morris Vice President
John J. Walsh Vice President
The other general partners of Lord Abbett & Co. who are
neither officers nor directors of the Registrant are Stephen
I. Allen, Zane E. Brown, John E. Erard, Robert P. Fetch, Daria
L. Foster, Robert I. Gerber, W. Thomas Hudson, Jr., Stephen I.
McGruder, Michael B. McLaughlin, Robert J. Noelke, R. Mark
Pennington, and Christopher J. Towle.
Each of the above has a principal business address:
767 Fifth Avenue, New York, NY 10153
(c) Not applicable
<PAGE>
Item 28 Location of Accounts and Records
--------------------------------
Registrant maintains the records, required by Rules 31a - 1(a)
and (b), and 31a - 2(a) at its main office.
Lord, Abbett & Co. maintains the records required by Rules 31a
- - 1(f) and 31a - 2(e) at its main office.
Certain records such as cancelled stock certificates and
correspondence may be physically maintained at the main office
of the Registrant's Transfer Agent, Custodian, or Shareholder
Servicing Agent within the requirements of Rule 31a-3.
Item 29 Management Services
None
Item 30 Undertakings
The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without
charge.
The Registrant undertakes, if requested to do so by the
holders of at least 10% of the Registrant's outstanding
shares, to call a meeting of shareholders for the purpose of
voting upon the question of removal of a director or directors
and to assist in communications with other shareholders as
required by Section 16(c) of the Investment Company Act of
1940, as amended.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the InvestmentCompany Act of 1940, as amended, Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State
of New York, on the 30th day of September, 1999.
LORD ABBETT LARGE-CAP GROWTH FUND
By: /s/ Paul A. Hilstad
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Paul A. Hilstad President and September 30, 1999
Trustee
(Chief Executive
Officer)
/s/ Lawrence H. Kaplan Secretary, September 30, 1999
Treasurer and Trustee
(Chief Financial and
Accounting Officer)
<PAGE>
LORD ABBETT LARGE-CAP GROWTH FUND
-------------------------
DECLARATION AND AGREEMENT OF TRUST
September 29, 1999
-------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I NAME AND DEFINITIONS................................................2
Section 1.1. Name 2
Section 1.2. Definitions...............................................2
Section 1.3. Purposes..................................................4
ARTICLE II TRUSTEES...........................................................7
Section 2.1. Powers....................................................7
Section 2.2. Legal Title..............................................13
Section 2.3. Number of Trustees; Term of Office.......................13
Section 2.4. Election of Trustees.....................................13
Section 2.5. Resignation and Removal..................................14
Section 2.6. Vacancies................................................14
Section 2.7. Committees; Delegation...................................15
Section 2.8. Quorum; Voting...........................................16
Section 2.9. Action Without a Meeting; Participation by Conference
Telephone......................................16
Section 2.10. By-Laws..................................................17
Section 2.11. No Bond Required.........................................17
Section 2.12. Reliance on Experts, Etc.................................17
Section 2.13. Standard of Care of Trustees.............................17
ARTICLE III CONTRACTS........................................................18
Section 3.1. Distribution Contract....................................18
Section 3.2. Advisory or Management Contracts.........................18
Section 3.3. Affiliations of Trustees or Officers, Etc................19
ARTICLE IV LIMITATION OF LIABILITY; INDEMNIFICATION..........................20
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc.....20
Section 4.2. Execution of Documents; Notice; Apparent Authority.......20
Section 4.3. Indemnification of Trustees, Officers, Etc...............21
Section 4.4. Indemnification of Shareholders..........................24
ARTICLE V SHARES OF BENEFICIAL INTEREST......................................25
Section 5.1. Beneficial Interest......................................25
Section 5.2. Additional Series; Classes...............................25
Section 5.3. Series Assets, Liabilities and Expenses..................27
Section 5.3.1. Series Assets......................................27
Section 5.3.2. Series Liabilities and Expenses....................28
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Section 5.3.3. Termination of a Series............................29
Section 5.4. Rights of Shareholders...................................30
Section 5.5. Trust Only...............................................30
Section 5.6. Issuance of Shares.......................................31
Section 5.6.1. General............................................31
Section 5.6.2. Price..............................................31
Section 5.6.3. On Merger or Consolidation.........................31
Section 5.6.4. Fractional Shares..................................32
Section 5.7. Register of Shares.......................................32
Section 5.8. Share Certificates.......................................32
Section 5.9. Transfer of Shares.......................................32
Section 5.10. Voting Powers............................................33
Section 5.11. Meetings of Shareholders.................................34
Section 5.12. Action Without a Meeting.................................35
Section 5.13. Quorum and Required Vote.................................35
Section 5.14. Additional Provisions....................................36
Section 5.15. Removal of Trustees by Shareholders......................36
Section 5.16. Derivative Suits.........................................36
ARTICLE VI REDEMPTION AND REPURCHASE OF SHARES...............................37
Section 6.1. Redemption of Shares.....................................37
Section 6.2. Price 37
Section 6.3. Payment..................................................37
Section 6.4. Effect of Suspension of Right of Redemption..............38
Section 6.5. Repurchase by Agreement..................................38
Section 6.6. Suspension of Right of Redemption........................38
Section 6.7. Involuntary Redemption of Shares; Disclosure of Holding..39
ARTICLE VII DETERMINATION OF NET ASSET VALUE; DISTRIBUTIONS..................41
Section 7.1. By Whom Determined.......................................41
Section 7.2. When Determined..........................................41
Section 7.3. Computation of Per Share Net Asset Value.................41
Section 7.3.1. Net Asset Value Per Share..........................41
Section 7.3.2. Value of the Net Assets of a Series................42
Section 7.4. Interim Determinations...................................43
Section 7.5. Outstanding Shares.......................................43
Section 7.6. Distributions to Shareholders............................44
ARTICLE VIII DURATION; DISSOLUTION AND TERMINATION
OF TRUST; AMENDMENT; MERGERS, ETC...............................45
Section 8.1. Duration and Termination.................................45
Section 8.2. Amendment Procedure......................................47
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Section 8.3. Merger, Consolidation and Sale of Assets.................48
Section 8.4. Incorporation............................................48
ARTICLE IX MISCELLANEOUS.....................................................49
Section 9.1. Registered Agent; Registered Office......................49
Section 9.2. Governing Law............................................49
Section 9.3. Counterparts.............................................50
Section 9.4. Reliance by Third Parties................................51
Section 9.5. Provisions in Conflict with Law or Regulations...........51
Section 9.6. Use of Name..............................................52
Section 9.7. Section Headings; Interpretation.........................52
iii
<PAGE>
DECLARATION AND AGREEMENT OF TRUST
OF
LORD ABBETT LARGE-CAP GROWTH FUND
DECLARATION AND AGREEMENT OF TRUST made on September 29th, 1999 by and among
the individuals executing this Declaration and Agreement of Trust as Trustees
and the holders from time to time of the shares of beneficial interest issued
hereunder.
WHEREAS, the Trustees desire to establish a business trust for the
investment and reinvestment of funds contributed thereto and the carrying on of
business and dividing the gains therefrom; and
WHEREAS, the Trustees desire that the beneficial interest in the trust
assets be divided into transferable shares of beneficial interest, as
hereinafter provided;
NOW THEREFORE, the Trustees hereby declare that all money and property
contributed to the trust established hereunder and all proceeds thereof shall be
held and managed in trust for the pro rata benefit of the holders, from time to
time, of the shares of beneficial interest issued hereunder and subject to the
provisions hereof.
<PAGE>
ARTICLE I
NAME AND DEFINITIONS
SECTION 1.1. NAME. The name of the trust created hereby is "Lord Abbett
Large-Cap Growth Fund," in which name the Trustees shall conduct the business
and activities of the Trust and execute all documents and take all actions
authorized herein.
SECTION 1.2. DEFINITIONS. Wherever they are used herein, the following
terms have the following meanings:
"Affiliated Person" shall have the meaning set forth in Section
2(a)(3) of the 1940 Act.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the Securities and Exchange Commission.
"Declaration" shall mean this Declaration and Agreement of Trust as
amended from time to time. This Declaration and any By-laws of the Trust
shall constitute the governing instrument of the Trust.
"Delaware Act" shall mean Chapter 38 of Title 12 of the Delaware Code
entitled "Treatment of Delaware Business Trusts", as it may be amended from
time to time.
"Distributor" shall have the meaning set forth in Section 3.1.
"Interested Person" shall have the meaning set forth in Section
2(a)(19) of the 1940 Act. "Investment Adviser" shall have the meaning set
forth in Section 3.2.
2
<PAGE>
"Majority Shareholder Vote" or "Series Majority Shareholder's Vote"
shall mean the vote of a majority of the OUTSTANDING VOTING SECURITIES, AS
DEFINED IN SECTION 2(A)(42) OF THE 1940 ACT, OF THE TRUST, PROVIDED that if
there are two or more Series of Shares outstanding, then "Series Majority
Shareholder Vote" shall have, when used with respect to any matter required
to be submitted to the holders of the outstanding Shares of any Series
pursuant to this Declaration or the 1940 Act, the meaning set forth in Rule
18f-2 under the 1940 Act.
"1940 Act" shall mean the Investment Company Act of 1940, as amended
from time to time.
"Person" shall mean an individual, a company, a corporation,
partnership, trust, or association, a joint venture, an organization, a
business, a firm or other entity, whether or not a legal entity, or a
country, a state, municipality or other political subdivision or any
governmental agency or instrumentality.
"Principal Underwriter" shall have the meaning set forth in Section
2(a)(29) of the 1940 Act. "Series" shall mean the one or more separate
series of Shares authorized by Section 5.2 of this Declaration.
"Shareholder" shall mean a record owner of Shares.
"Shares" shall mean the units of interest into which the beneficial
interest in the Trust (or, if more than one Series or more than one class
of Series is authorized, in each Series and class thereof) shall be divided
from time to time and includes fract-
3
<PAGE>
ions of Shares as well as whole Shares. All references to Shares shall be
deemed to refer to Shares of any or all Series, or classes thereof, as the
context may require.
"Trust" shall mean the Delaware business trust established under the
Delaware Act by this Declaration, as from time to time amended. All
provisions herein relating to the Trust shall apply equally to each Series
of the Trust, and each class thereof, except as the context otherwise
requires.
"Trustees" shall mean the individuals who have signed this
Declaration, so long as they shall continue in office in accordance with
the terms hereof, and all other individuals who may from time to time be
duly elected or appointed, qualified and serving as Trustees in accordance
with the provisions of Article II hereof, and reference herein to a Trustee
or the Trustees shall refer to such person or persons in his or her
capacity or their capacities as trustees hereunder.
"Trust Property" shall mean any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees, including any and all assets of or allocated to any
Series, as the context may require.
SECTION 1.3. PURPOSES. This Trust is formed for the following purpose or
purposes:
(a) to conduct, operate and carry on the business of an investment
company;
(b) to subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, lend, write options on,
exchange, distribute or
4
<PAGE>
otherwise dispose of and deal in and with securities of every nature, kind,
character, type and form, including, without limitation of the generality
of the foregoing, all types of stocks, shares, futures contracts, bonds,
debentures, notes, bills and other negotiable or non-negotiable
instruments, obligations, evidences of interest, certificates of interest,
certificates of participation, certificates, interests, evidences of
ownership, guarantees, warrants, options or evidences of indebtedness
issued or created by or guaranteed as to principal and interest by any
state or local government or any agency or instrumentality thereof, by the
United States Government or any agency, instrumentality, territory,
district or possession thereof, by any foreign government or any agency,
instrumentality, territory, district or possession thereof, by any foreign
government or any agency, instrumentality, territory, district or
possession thereof, by any corporation organized under the laws of any
state, the United States or any territory or possession thereof or under
the laws of any foreign country, bank certificates of deposit, bank time
deposits, bankers' acceptances and commercial paper; to pay for the same in
cash or by the issue of stock, including treasury stock, bonds or notes of
the Trust or otherwise; and to exercise any and all rights, powers and
privileges of ownership or interest in respect of any and all such
investments of every kind and description, including, without limitation,
the right to consent and otherwise act wath respect thereto, with power to
designate one or more persons, firms, associations or corporations to
exercise any said rights, powers, and privileges in respect to any said
instruments;
5
<PAGE>
(c) to borrow money or otherwise obtain credit and to secure the same
by mortgaging, pledging or otherwise subjecting as security the assets of
the Trust;
(d) to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, and otherwise deal in, Shares including Shares
in fractional denominations, and to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares any funds or
other assets of the appropriate Series or class of Shares, whether capital
or surplus or otherwise, to the full extent now or hereafter permitted by
the laws of the State of Delaware;
(e) to conduct its business, promote its purposes, and carry on its
operations in any and all of its branches and maintain offices both within
and without the State of Delaware, in any and all States of the United
States of America, in the District of Columbia, and in any other parts of
the world; and
(f) to do all and everything necessary, suitable, convenient, or
proper for the conduct, promotion, and attainment of any of the businesses
and purposes herein specified or which at any time may be incidental
thereto or may appear conducive to or expedient for the accomplishment of
any such businesses and purposes and which might be engaged in or carried
on by a Trust organized under the Delaware Act, and to have and exercise
all of the powers conferred by the laws of the State of Delaware upon a
Delaware business trust.
The foregoing provisions of this Section 1.3 shall be construed both
as purposes and powers and each as an independent purpose and power.
6
<PAGE>
ARTICLE II
TRUSTEES
SECTION 2.1. POWERS. The Trustees, subject only to the specific
limitations contained in this Declaration, shall have exclusive and absolute
power, control and authority over the Trust Property and over the conduct of the
affairs of the Trust set forth in Section 1.3 hereof, including such power,
control and authority to do all such acts and things as in their sole judgment
and discretion are necessary, incidental, convenient or desirable for the
carrying out of or conducting of the business of the Trust or in order to
promote the interests of the Trust, but with such powers of delegation as may be
permitted by this Declaration. The enumeration of any specific power, control or
authority herein shall not be construed as limiting the aforesaid power, control
and authority or any other specific power, control or authority. The Trustees
shall have power to conduct and carry on the business of the Trust, or any part
thereof, to have one or more offices and to exercise any or all of its trust
powers and rights, in the State of Delaware, in any other states, territories,
districts, colonies and dependencies of the United States and in any foreign
countries. In construing the provisions of this Declaration, the presumption
shall be in favor of a grant of power to the Trustees. Such powers of the
Trustees may be exercised without order of or resort to any court.
Without limiting the foregoing, the Trustees shall have the power:
(a) To enter into contracts of any nature related to the business of
the Trust.
7
<PAGE>
(b) To appoint agents and employees of the Trust, which agents and
employees may be designated as officers of the Trust with corresponding
titles as the Trustees may determine in their discretion.
(c) To exercise all rights, powers and privileges of ownership or
interest in all securities included in the Trust Property, including the
right to vote, give assent, execute and deliver proxies or powers of
attorney to such person or persons as the Trustees shall deem proper and
otherwise act with respect thereto and to do all acts for the preservation,
protection, improvement and enhancement in value of all such securities and
to delegate, assign, waive or otherwise dispose of any of such rights,
powers or privileges.
(d) To exercise powers and rights of subscription or otherwise which
in any manner arise out of the Trust's ownership of securities.
(e) To declare (from interest, dividends or other income received or
accrued, from accruals of original issue or other discounts on obligations
held, from capital or other profits whether realized or unrealized and from
any other lawful sources) dividends and distributions on the Shares and to
credit the same to the account of Shareholders, or at the election of the
Trustees to accrue income to the account of Shareholders, on such dates
(which may be as frequently as every day) as the Trustees may determine.
Such dividends, distributions or accruals shall be payable in cash,
property or Shares as the Trustees may determine and at such intervals as
the Trustees may determine at any time in advance of such payment or
accrual, whether
8
<PAGE>
or not the amount of such dividend, distribution or accrual can at the time
of declaration be determined or must be calculated subsequent to
declaration and prior to payment or accrual by reference to amounts or
other factors not yet determined at the time of declaration (including but
not limited to the amount of a dividend or distribution to be determined by
reference to what is sufficient to enable the Trust to qualify as a
regulated investment company under the Code or to avoid liability for
Federal income or excise taxes).
The power granted by this Subsection (e) shall include, without
limitation, and if otherwise lawful, the power (A) to declare dividends or
distributions or to accrue income to the account of Shareholders by means
of a formula or other similar method of determination whether or not the
amount of such dividend or distribution can be calculated at the time of
such declaration; (B) to establish record or payment dates for, dividends
or distributions on any basis, including the power to establish a number of
record or payment dates subsequent to the declaration of any dividend or
distribution; (C) to establish the same payment date for any number of
dividends or distributions declared prior to such date; (D) to provide for
payment of dividends or distributions declared and as yet unpaid, or unpaid
accrued income, to shareholders redeeming Shares prior to the payment date
otherwise applicable; and (E) to provide in advance for conditions under
which any dividend or distribution may be payable in Shares to all or less
than all of the Shareholders.
9
<PAGE>
(f) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale, lease or otherwise) any
property, real or personal, and any interest therein.
(g) To borrow money, and in this connection to issue notes or other
evidences of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting to security interests the Trust Property; and to lend
Trust Property.
(h) To aid by further investment any Person, if any obligation of or
interest in such Person is included in the Trust Property or if the
Trustees have any direct or indirect interest in the affairs of such
Person; to do anything designed to preserve, protect, improve or enhance
the value of such obligation or interest; and to endorse or guarantee or
become surety on any or all of the contracts, stocks, bonds, notes,
debentures and other obligations of any such Person; and to mortgage the
Trust Property or any part thereof to secure any of or all such
obligations.
(i) To enter into joint ventures, general or limited partnerships and
any other combinations or associations.
(j) To purchase and pay for entirely out of Trust Property liability,
casualty, property and other insurance, including, without limitation,
insurance policies insuring the Shareholders, Trustees, officers, employees
and agents of the Trust, the Investment Adviser, the Distributor and
dealers or independent contractors of the Trust against all claims and
liabilities of every nature arising by reason of holding or having held any
such position or by reason of any action taken or omitted by any such
Person
10
<PAGE>
in such capacity, whether or not constituting negligence, to the extent the
Trust would have the power, under provisions of applicable law, to
indemnify such Person against such liability; provided, however that such
policy or policies shall be purchased solely at the cost of the Series to
which it or they pertain.
(k) To establish and carry out pension, profit-sharing, share
purchase, share bonus, savings, thrift and other retirement, incentive and
benefit plans for any Trustees, officers, employees or agents of the Trust.
(l) To the extent permitted by law and determined by the Trustees, to
indemnify any Person with whom the Trust has dealings, including, without
limitation, the Shareholders, the Trustees, the officers, employees and
agents of the Trust, the Investment Adviser, the Distributor, the transfer
agent, the custodian and dealers.
(m) To incur and pay any charges, taxes and expenses which in the
opinion of the Trustees are necessary or incidental to or proper for
carrying out any of the purposes of this Trust, and to pay from the funds
of the Trust Property to themselves as Trustees reasonable compensation and
reimbursement for expenses.
(n) To prosecute or abandon and to compromise, arbitrate or otherwise
adjust claims in favor of or against the Trust gr any matter in
controversy, including but not limited to claims for taxes.
(o) To exercise the right to consent, and to enter into releases,
agreements and other instruments, including, but not limited to, the right
to consent or participate in any plan for the reorganization, consolidation
or merger of any corporation or
11
<PAGE>
issuer any security of which is or was held by the Trust; to consent to any
contract, lease, mortgage, purchase or sale of such property by said
corporation or issuer, and to pay calls or subscriptions with respect to
securities held by the Trust.
(p) To employ or contract with such Persons as the Trustees may deem
desirable for the transaction of the business of the Trust.
(q) To adopt a seal for the Trust, but the absence of such seal shall
not impair the validity of any instrument executed on behalf of the Trust.
(r) To employ one or more custodians of the assets of the Trust and
authorize such custodians to employ subcustodians and to deposit all or any
part of such assets in a system or systems for the central handling of
securities.
(s) To take such actions as are authorized, incidental or required to
be taken by the Trustees pursuant to other provisions of this Declaration.
The foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees.
The Trustees shall not be limited by any law now or hereafter in effect
limiting the investments which may be made or retained by fiduciaries, but they
shall have full power and authority to make any and all investments within the
limitation of this Declaration that they, in their sole and absolute discretion,
shall determine, and without liability for loss even though such investments do
not or may not produce income or are of a character or in an amount not
considered proper for the investment of trust funds.
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SECTION 2.2. LEGAL TITLE. Legal title to all the Trust Property shall be
vested in the Trust as a separate legal entity under the Delaware Act, provided
that the Trustees shall have power to cause legal title to any Trust Property to
be held by or in the name of one or more of the Trustees with suitable reference
to their trustee status, or in the name of any Series of the Trust, or in a form
not indicating any trust, whether in bearer, unregistered or other negotiable
form, or in the name of a custodian or subcustodian or a nominee or nominees or
otherwise.
SECTION 2.3. NUMBER OF TRUSTEES; TERM OF OFFICE. The number of Trustees
shall be two, which number may be increased or decreased from time to time by
written instrument signed by a majority of the Trustees, PROVIDED that the
number of Trustees shall not be fewer than two nor more than 15. Each of the two
Trustees executing this Declaration of Trust and each Trustee thereafter
appointed or elected (whenever such election occurs) shall hold office until his
successor is elected and qualified or until the earlier occurrence of any of the
events specified in the first sentence of Section 2.6 hereof.
SECTION 2.4. ELECTION OF TRUSTEES. Trustees may succeed themselves in
office. Trustees may be elected at a Shareholders' meeting. At such a
Shareholders' meeting, Trustees shall be elected by a plurality of the votes
validly cast. The election of any Trustee (other than an individual who was
serving as a Trustee immediately prior thereto) shall not become effective,
however, until the individual named shall have accepted in writing such election
and agreed in writing to be bound by the terms of this Declaration. Trustees
need not own Shares.
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SECTION 2.5. RESIGNATION AND REMOVAL. Any Trustee may resign his trust
(without need for prior or subsequent accounting) by an instrument in writing
signed by him and delivered to the Chairman of the Board, or the Secretary or
any Assistant Secretary, and such resignation shall be effective upon such
delivery, or at any later date specified in the instrument. Any of the Trustees
may be removed (I) with cause by the affirmative vote of two-thirds of the
remaining Trustees (provided that the aggregate Number of Trustees after such
removal shall not be less than two) or (II) by the Shareholders pursuant to
Section 5.16 hereof.
SECTION 2.6. VACANCIES. The term of office of a Trustee shall terminate and
a vacancy shall occur in the event of the death, retirement, resignation or
removal (whether pursuant to Section 2.5 hereof or otherwise), bankruptcy,
adjudication of incompetence or other incapacity to perform the duties of the
office of a Trustee. A vacancy shall also occur upon an increase in the number
of Trustees in accordance with Section 2.3 hereof. No vacancy shall operate to
annul this Declaration or to revoke any existing agency created pursuant to the
terms of the Declaration. In the case of an existing vacancy$ including a
vacancy existing by reason of an increase in the authorized number of Trustees,
the remaining Trustees shall fill such vacancy by the appointment of such
individual as they in their sole and absolute discretion shall see fit, made by
a written instrument signed by a majority of the Trustees then in office,
provided that such power of appointment shall be subject to and limited by all
applicable provisions of the 1940 Act and no such appointment shall become
effective until the person named shall have accepted in writing such appointment
and agreed in writing to be
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bound by the terms of this Declaration. Whenever a vacancy in the number of
Trustees shall occur, until such vacancy is filled as provided in Section 2.4 or
this Section 2.6, the Trustees in office, regardless of their number, shall have
all the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by the Declaration.
SECTION 2.7. COMMITTEES; DELEGATION. The Trustees shall have the power to
appoint from their own number, and terminate, any one or more committees
consisting of two or more Trustees, including an executive committee which may
exercise some or all of the power and authority of the Trustees as the Trustees
may determine (including but not limited to the power to determine net asset
value and net income), subject to any limitations contained in the By-Laws, and
in general to delegate from time to time to one or more of their number or to
officers, employees or agents of the Trust such power and authority and the
doing of such things and the execution of such instruments, either in the name
of the Trust or the names of the Trustees or otherwise, as the Trustees may deem
expedient, provided that no committee shall have the power
(a) to change the principal office of the Trust;
(b) to amend the By-Laws;
(c) to issue Shares of any Series;
(d) to elect or remove from office any Trustee or the Chairman of the
Board, the President, the Chief Financial Officer, the Treasurer or the
Secretary of the Trust;
(e) to increase or decrease the number of Trustees;
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(f) to declare a dividend or other distribution on the Shares of any
Series;
(g) to authorize the repurchase of Shares of any Series; or
(h) to authorize any merger, consolidation or sale, lease or exchange
of all or substantially all of the Trust Property.
SECTION 2.8. QUORUM; VOTING. At all meetings of the Trustees, the presence
of one-third of the total number of Trustees authorized, but not less than two,
shall constitute a quorum for the transaction of business. When a quorum is
present at any meeting, a majority of Trustees present may take any action,
except when a larger vote is required by this Declaration, the By-laws or the
1940 Act.
SECTION 2.9. ACTION WITHOUT A MEETING; PARTICIPATION BY CONFERENCE
TELEPHONE. Unless the 1940 Act requires that a particular action must be taken
only at a meeting of Trustees, any action required or permitted to be taken at
any meeting of the Trustees (or of any committee of the Trustees) may be taken
without a meeting if written consents thereto are signed by a majority of the
Trustees then in office (or by a majority of the members of such committee) and
such written consents are filed with the records of the meetings. Unless the
1940 Act requires that Trustees must be present in person at a meeting of
Trustees, Trustees may participate in a meeting of the Trustees (or of any
committee of the Trustees) by means of a conference telephone or similar
communications equipment if all individuals participating can hear each other at
the same time. Participation in a meeting by these means shall constitute
presence at the meeting.
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SECTION 2.10. BY-LAWS. The Trustees may adopt By-Laws not inconsistent with
this Declaration or law to provide for the conduct of the business of the Trust,
and may amend or repeal such By-Laws.
SECTION 2.11. NO BOND REQUIRED. No Trustee shall be obliged to give any
bond or other security for the performance of any of his duties hereunder.
SECTION 2.12. RELIANCE ON EXPERTS, ETC. Each Trustee, officer, agent and
employee of the Trust or any Series thereof shall, in the performance of his
duties, be fully and completely justified and protected by relying in good faith
upon the books of account or other records of the trust, or upon reports made to
the Trustees (a) by any of the officers or employees of the Trust or any Series
thereof, (b) by the Investment Adviser, the Distributor, the custodian or the
transfer agent, OR (C) by any accountants, selected dealers or appraisers or
other agents, experts or consultants selected with reasonable care by the
Trustees, regardless of whether such agent, expert or consultant may also be a
Trustee. The Trustees, officers, agents and employees of the Trust or any Series
thereof may take advice of counsel with respect to the meaning and operation of
this Declaration and with respect to other legal matters or questions, and shall
be under no liability for any act or omission in accordance with such advice or
for failing to follow such advice.
SECTION 2.13. STANDARD OF CARE OF TRUSTEES. The exercise by the Trustees of
their powers and discretion hereunder and the construction in good faith by the
Trustees of the meaning or effect of any provision of this Declaration shall be
binding upon everyone interested. A Trustee, officer, agent or employee shall be
liable to the Trust or the Shareholders
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for his own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office, and for nothing
else, and shall not be liable for errors of judgment or mistakes of fact or law.
ARTICLE III
CONTRACTS
SECTION 3.1. DISTRIBUTION CONTRACT. The Trust may from time to time enter
into a distribution contract with another Person (the "Distributor") providing
for the sale of Shares, pursuant to which the Trust may agree to sell Shares of
one or more Series or classes of Series to the Distributor or appoint the
Distributor its sales agent for the Shares. Such contract may provide that the
Distributor may enter into contracts with other persons to sell the Shares on
behalf of the Distributor and the Trust. Such contract may also provide for the
repurchase of Shares by the Distributor as agent of the Trust and shall contain
such terms and conditions, if any, as may be prescribed in the By-Laws and such
further terms and conditions not inconsistent with the provisions of this
Article III or of the By-Laws as the Trustees may in their discretion determine.
SECTION 3.2. ADVISORY OR MANAGEMENT CONTRACTS. Subject to approval by a
Majority Shareholder Vote or, where appropriate pursuant to Section 5.11 hereof,
a Series Majority Shareholder Vote, the Trust may from time to time enter into
investment advisory or management contracts with one or more other Persons (the
"Investment Advisers") pursuant to which the Investment Adviser or Advisers
shall agree to furnish to the Trust management, investment advisory, statistical
and research facilities or other services with respect to
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one or more Series of the Trust. Such contract shall contain such other terms
and conditions, if any, as may be prescribed in the By-Laws and such further
terms and conditions not inconsistent with the provisions of this Article III,
the By-Laws or applicable law as the Trustees may in their discretion determine,
including the grant of authority to the Investment Adviser to determine what
securities shall be purchased or sold by each such Series and what portion of
its assets shall be uninvested and to implement such determinations by making
changes in the Series' investments.
SECTION 3.3. AFFILIATIONS OF TRUSTEES OR OFFICERS, ETC. The fact that any
Shareholder, Trustee, officer, agent or employee of the Trust or any Series
thereof is a shareholder, member, director, officer, partner, trustee, employee,
manager, adviser or distributor of or for any Person or of or for any parent or
affiliate of any Person with which an investment advisory or management
contract, principal underwriter or distributor contract or custodian, transfer
agent, disbursing agent or similar agency contract may have been or may
hereafter be made, or that any such Person, or any parent or affiliate thereof,
is a Shareholder of or has any other interest in the Trust or any Series
thereof, or that any such Person also has any one or more similar contracts with
one or more other such Persons, or has other businesses or interests, shall not
affect the validity of any such contract made or that may hereafter be made with
the Trust or disqualify any Shareholder, Trustee, officer, agent or employee of
the Trust or any Series thereof from voting upon or executing the same or create
any liability or accountability to the Trustees, the Trust, any Series thereof
or the Shareholders.
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ARTICLE IV
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 4.1. NO PERSONAL LIABILITY OF SHAREHOLDERS, TRUSTEES, ETC. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust or any Series thereof. No Trustee shall have any power to bind personally
any Shareholder or to call upon any Sharehglder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at any
time personally agree to pay by way of subscription for any Shares or otherwise.
All Persons extending credit to, contracting with or having any claim against
the Trust or any Series thereof shall look only to the assets of the Trust or of
any affected Series for payment under such credit, contract or claim, and
neither the Shareholders nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally liable
therefor. No Trustee shall be subject to any personal liability whatsoever to
any person other than the Trust or the Shareholders in connection with the Trust
Property or the acts, obligations or affairs of the Trust or any Series thereof.
The Trustees shall not be responsible or liable to the Trust or the Shareholders
for any neglect or wrongdoing of any officer, employee or agent (including,
without limitation, the Investment Advisers, the Distributor, the custodian and
the transfer agent) of the Trust or any Series thereof, nor shall any Trustee be
responsible or liable for the act or omission of any other Trustee.
SECTION 4.2. EXECUTION OF DOCUMENTS; NOTICE; APPARENT AUTHORITY. Every
note, bond, contract, instrument, certificate or undertaking and every other act
or thing what-
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soever executed or done by or on behalf of the Trust or any Series thereof or
the Trustees or any of them in connection with the Trust or any Series thereof
shall be conclusively deemed to have been executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon. Every note, bond,
contract, instrument, certificate or undertaking made or issued by the Trustees
or by any officers or officer shall recite that the obligations of such
instruments are not binding upon any of the Trustees, Shareholders, officers,
employees or agents of the Trust individually but are binding only upon the
assets and property of the Trust or of one or more Series, but the omission
thereof shall not operate to bind any Trustees, Shareholders or officers,
employees and agents of the Trust individually. No purchaser, lender, transfer
agent or other Person dealing with the Trustees or any officer, employee or
agent of the Trust shall be bound to make any inquiry concerning the validity of
any transaction purporting to be made by the Trustees or by such officer,
employee or agent or make inquiry concerning or be liable for the application of
money or property paid, loaned or delivered to or on the order of the Trustees
or of such officer, employee or agent.
SECTION 4.3. INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. The Trust shall
indemnify each of its Trustees, officers, employees and agents (including any
individual who serves at its request as director, officer, partner, trustee or
the like of another organization in which it has any interest as a shareholder,
creditor or otherwise) against all liabilities and expenses, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and counsel fees reasonably incurred by him or her in connec-
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tion with the defense or disposition of any action, suit or other proceeding,
whether civil or criminal, before any court or administrative or legislative
body in which he or she may be or may have been involved as a party or otherwise
or with which he or she may be or may have been threatened, while acting as
Trustee or as an officer, employee or agent of the Trust or the Trustees, as the
case may be, or thereafter, by reason of his or her being or having been such a
Trustee, officer, employee or agent, except with respect to any matter as to
which he or she shall have been adjudicated not to have acted in good faith in
the reasonable belief that his or her action was in the best interests of the
Trust or any Series thereof. Notwithstanding anything herein to the contrary, if
any matter which is the subject of indemnification hereunder relates only to one
Series (or to more than one but not all of the Series of the Trust), then the
indemnity shall be paid only out of the assets of the affected Series. No
individual shall be indemnified hereunder against any liability to the Trust or
any Series thereof or the Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office. In addition, no such indemnity shall be provided
with respect to any matter disposed of by settlement or a compromise payment by
such Trustee, officer, employee or agent, pursuant to a consent decree or
otherwise, either for said payment or for any other expenses unless there has
been a determination that such compromise is in the best interests of the Trust
or, if appropriate, of any affected Series thereof and that such Person appears
to have acted in good faith in the reasonable belief that his or her action was
in the best interests of the Trust or, if appropriate, of any affected Series
thereof, and did not engage in willful misfeasance, bad faith, gross negligence
or reckless dis-
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regard of the duties involved in the conduct of his or her office. All
determinations that the applicable standards of conduct have been met for
indemnification hereunder shall be made by (a) a majority vote of a quorum
consisting of disinterested Trustees who are not parties to the proceeding
relating to indemnification, or (b) if such a quorum is not obtainable or, even
if obtainable, if a majority vote of such quorum so directs, by independent
legal counsel in a written opinion, or (c) a vote of Shareholders (excluding
Shares owned of record or beneficially by such individual). In addition, unless
a matter is disposed of with a court determination (i) on the merits that such
Trustee, officer, employee or agent was not liable or (ii) that such Person was
not guilty of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office, no
indemnification shall be provided hereunder unless there has been a
determination by independent legal counsel in a written opinion that such Person
did not engage in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office.
The Trustees may make advance payments out of the assets of the Trust or,
if appropriate, of the affected Series in connection with the expense of
defending any action with respect to which indemnification might be sought under
this Section 4.3. The indemnified Trustee, officer, employee or agent shall give
a written undertaking to reimburse the Trust or the Series in the event it is
subsequently determined that he or she is not entitled to such indemnification
and (a) the indemnified Trustee, officer, employee or agent shall provide
security for his or her undertaking, (b) the Trust shall be insured against
losses arising by reason of lawful advances, or (c) a majority of a quorum of
disinterested Trustees or an inde-
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pendent legal counsel in a written opinion shall determine, based on a review of
readily available facts (as opposed to a full trial-type inquiry), that there is
reason to believe that the indemnitee ultimately will be found entitled to
indemnification. The rights accruing to any Trustee, officer, employee or agent
under these provisions shall not exclude any other right to which he or she may
be lawfully entitled and shall inure to the benefit of his or her heirs,
executors, administrators or other legal representatives.
SECTION 4.4. INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or
former Shareholder shall be held to be personally liable solely by reason of his
or her being or having been a Shareholder and not because of acts or omissions
or for some other reason, the Shareholder or former Shareholder (or his or her
heirs, executors, administrators or other legal representatives or in the case
of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets of the Trust or, if there are two or more
Series of the Trust, the assets of the affected Series of which such Shareholder
held Shares, to be held harmless from and indemnified against all loss and
expense, including legal expenses reasonably incurred, arising from such
liability. The rights accruing to a Shareholder under this Section 4.4 shall not
exclude any other right to which such Shareholder may be lawfully entitled, nor
shall anything contained herein restrict the right of the Trust or any Series
thereof to indemnify or reimburse a Shareholder in any appropriate situation
even though not specifically provided herein.
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ARTICLE V
SHARES OF BENEFICIAL INTEREST
SECTION 5.1. BENEFICIAL INTEREST. The interest of the beneficiaries
hereunder shall be divided into transferable shares of beneficial interest
("Shares"), without par value. The Trustees may from time to time divide or
combine the Shares into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust. The number of Shares authorized
hereunder is unlimited. All Shares issued hereunder, including without
limitation Shares issued in connection with a dividend in Shares or a split in
Shares, shall be fully paid and nonassessable. No Shares shall have any
approval, conversion or preemptive rights. The Trustees shall have full power
and authority, without Shareholder approval, to establish or change from time to
time the par value of Shares as the Trustees shall determine, provided the
rights of outstanding Shares shall not thereby be impaired in any material way.
The Trustees may hold as treasury Shares (of the same or some other Series),
reissue for such consideration and on such terms as they may determine, or
cancel any Shares of any series repurchased or redeemed by the Trust at their
discretion from time to time.
SECTION 5.2. ADDITIONAL SERIES; CLASSES. The Trustees may,
without Shareholder approval, from time to time authorize multiple Series with
separate investment objectives and policies and distinct investment purposes and
one or more separate classes of any Series. The Trustees shall have full power
and authority, in their sole discretion, and without obtaining any prior
authorization or vote of the Shareholders of any Series of the Trust, to
establish and designate and to change in any manner any such Series, or any
classes thereof,
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to fix such preferences, voting powers, rights and privileges of such Series, or
classes thereof, as the Trustees may from time to time determine, to classify or
reclassify any issued Shares of any Series, or classes thereof, into one or more
Series or classes, and to take such other action with respect to the Shares as
the Trustees may deem desirable. Prior to the first classification of unissued
Shares into additional Series, all outstanding Shares shall be of a single
Series, and prior to the first classification of a Series into additional
classes, all outstanding Shares of such Series shall be of a single class.
Notwithstanding any other provision of this Declaration of Trust, upon the first
classification of unissued Shares into additional Series, the Trustees shall
specify a legal name for the outstanding Series, as well as for the new Series,
and upon the first classification of a Series into additional classes, the
Trustees shall specify a legal name for the outstanding class, as well as for
the new class or classes. The establishment and designation of any Series
additional to the initial Series of Shares or the establishment and designation
of any class of a Series additional to the initial class shall be effective upon
the execution by a majority of the Trustees of an instrument setting forth the
establishment and designation of such Series or classes thereof (which
instrument shall have the status of an amendment to this Declaration). All
Shares of any Series or any classes thereof shall have equal voting,
distribution, redemption, liquidation and other rights and shall be entitled to
a preference over Shares of other Series or any classes thereof with respect to
the assets of or allocated (pursuant to subsection 5.4.1) to such Series or any
classes thereof. Notwithstanding the foregoing, the Trustees may establish
variations between different Series, and classes of any Series, as to purchase
price, determination of net asset value, the price, terms
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and manner of redemption and special and relative rights as to dividends on
liquidation, conditions under which the several Series (and classes of any
Series) shall have separate voting rights and such other matters as the Trustees
may determine. The number of Shares of each Series and each class that may be
issued shall be unlimited.
SECTION 5.3. INITIAL DESIGNATION OF CLASSES. Subject to the designation of
additional classes pursuant to Section 5.2, the Shares of the initial Series
shall constitute four classes, hereby designated as Class A Shares, Class B
Shares, Class C Shares, and Class P Shares of the initial Series of the Trust.
SECTION 5.4. SERIES ASSETS, LIABILITIES AND EXPENSES.
SECTION 5.4.1. SERIES ASSETS. All consideration received by the Trust for
the issue or sale of Shares of a particular Series, together with all assets in
which such consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof, including any proceeds derived from the sale,
loan, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors, and shall be so recorded upon the books of account of the Trust.
In the event that there are any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as belonging to
any particular Series, the Trustees shall allocate them among any one or more of
the Series established and designated from time to time in such manner and on
such basis as they, in their sole discretion, deem fair and equitable. Each such
allocation by the Trustees shall be conclusive and binding upon the Shareholders
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of all Series for all purposes. Separate and distinct records shall be
maintained by the Trustees for each such series and the assets associated with
any such series shall be held and accounted for separately from the other assets
of the Trust, or any other series thereof.
SECTION 5.4.2. SERIES LIABILITIES AND EXPENSES. The assets belonging to
each particular Series shall be charged with the liabilities of the Trust in
respect of that Series and all expenses, costs, charges and reserves
attributable to that Series, and any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily identifiable as belonging
to any particular Series shall be allocated and charged by the Trustees to and
among any one or more of the Series in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. Each such allocation
by the Trustees shall be conclusive and binding upon the Shareholders of all
Series for all purposes. Without limitation of the foregoing, the liabilities
existing with respect to a particular Series shall be enforceable against the
assets of such Series only and not against the assets of the Trust generally.
Any person extending credit to, contracting with or otherwise having any claim
against any Series may look only to the assets of that Series to satisfy any
such obligation or claim. No Shareholder or former Shareholder of any Series
shall have any claim on or any right to any assets allocated to or belonging to
any other Series. Notice of this limitation on Series liabilities may, in the
Trustees' sole discretion, be set forth in the certificate of trust of the Trust
(whether originally or by amendment) as filed or to be filed in the Office of
the Secretary of State of the State of Delaware pursuant to the Delaware Act,
and upon the giving of such notice in the certificate of trust, the statutory
provisions of Section 3804 of the Delaware Act relating to limitations
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on Series liabilities (and the statutory effect under Section 3804 of setting
forth such notice in the certificate of trust) shall become applicable to the
Trust and each Series.
SECTION 5.4.3. TERMINATION OF A SERIES. Any Series may be terminated by the
affirmative vote of at least a majority of the Shares of such Series outstanding
or, when authorized by a Series Majority Shareholder Vote, by an instrument in
writing signed by a majority of the Trustees. Upon the termination of a Series,
the Series shall carry on no business except for the purpose of winding up its
affairs, and the Trustees shall proceed to wind up the affairs of the Series,
having with respect to such Series all powers contemplated by Section 8.1 of
this Declaration in the event of the termination of the Trust.
At any time that there are no Shares outstanding of any particular Series
previously established, the Trustees may, by an instrument executed by a
majority of their number, abolish the Series.
SECTION 5.5. RIGHTS OF SHAREHOLDERS. Shares shall be deemed to be personal
property giving only the rights provided in this Declaration. Every Shareholder
by virtue of having become a Shareholder shall be held to have expressly
assented and agreed to the terms hereof and to have become a party hereto. The
right to conduct any business hereinbefore described are vested exclusively in
the Trustees, and the Shareholders shall have no interest therein other than the
beneficial interest conferred by their Shares, and they shall have no right to
call for any partition or division of any property, profits, rights or interests
of the Trust or any Series thereof nor can they be called upon to share or
assume any losses of the Trust or any Series thereof or suffer an assessment of
any kind by virtue of their ownership of Shares.
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The death of a Shareholder during the continuance of the Trust shall not operate
to terminate the Trust or any Series thereof nor to entitle the legal
representative of such shareholder to an accounting or to take any action in any
court or otherwise against other Shareholders or the Trustees or the Trust
Property, but only to the rights of such Shareholder hereunder. The Shares shall
not entitle the holder to preference, preemptive, appraisal, conversion or
exchange rights.
SECTION 5.6. TRUST ONLY. The Trust shall be a Delaware business trust
organized under the Delaware Act. It is the intention of the Trustees to create
only the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
SECTION 5.7. ISSUANCE OF SHARES.
SECTION 5.7.1. GENERAL. The Trustees may from time to time without vote of
the Shareholders issue and sell or cause to be issued and sold Shares of any
Series, except that only Shares previously contracted to be sold may be issued
during any period when the right of redemption is suspended pursuant to the
provisions of Section 6.6 hereof. All such Shares, when issued in accordance
with the terms of this Section 5.7, shall be fully paid and nonassessable.
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SECTION 5.7.2. PRICE. No Shares of any Series shall be issued or sold by
the Trustees for less than an amount which would result in proceeds to the
Trust, before taxes and other expenses payable by the Trust in connection with
such transaction, of at least the net asset value per share of Shares of such
Series determined as set forth in Article VII hereof as of the time specified in
the prospectus of the Trust at the time in effect.
SECTION 5.7.3. ON MERGER OR CONSOLIDATION. In connection with the
acquisition of assets (including the acquisition of assets subject to, and in
connection with the assumption of, liabilities), businesses or stock of another
Person, the Trustees may issue or cause to be issued Shares of any Series and
accept in payment therefor, in lieu of cash, such assets or businesses at their
market value (as determined by the Trustees) or such stock at the market value
(as determined by the Trustees) of the assets held by such other Person, either
with or without adjustment for contingent costs or liabilities, provided that
the funds of the Trust are permitted by law to be invested in such assets,
businesses or stock.
SECTION 5.7.4. FRACTIONAL SHARES. The Trustees may issue and sell fractions
of Shares of any Series, to three decimal places, having pro rata all the rights
of full Shares of such Series, including, without limitation, the right to vote
and to receive dividends and distributions.
SECTION 5.8. REGISTER OF SHARES. A register shall be kept at the principal
office of the Trust or an office of the transfer agent of the Trust which shall
contain the names and addresses of the Shareholders of each Series, the number
of Shares of each such Series held by them respectively, a record of all
transfers thereof and any other information required
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by the Code, United States Treasury Regulations or any other taxing authority
with respect to regulated investment companies. Such register shall be
conclusive as to who are the holders of the Shares and who shall be entitled to
receive dividends or distributions or otherwise to exercise or enjoy the rights
of Shareholders of each Series. No Shareholder shall be entitled to receive
payment of any dividend or distribution, nor to have notice given to him as
herein or in the By-Laws provided, until he has given his address to the
transfer agent or such other officer or agent of the Trust as shall keep the
said register for entry thereon.
SECTION 5.9. SHARE CERTIFICATES. No certificates certifying ownership of
Shares shall be issued except as the Trustees may otherwise determine from time
to time.
SECTION 5.10. TRANSFER OF SHARES. Shares of any Series shall be
transferable on the records of the Trust upon delivery to the Trust or its
transfer agent or agents of appropriate evidence of assignment, transfer,
succession or authority to transfer accompanied by any certificate or
certificates representing such Shares previously issued to the transferor. Upon
such delivery the transfer shall be recorded on the register of the appropriate
Series. Until such record is made, the Trustees, the transfer agent, and the
officers, employees and agents of the Trust or any Series shall not be entitled
or required to treat the assignee or transferee of any Share as the absolute
owner thereof for any purpose, and accordingly shall not be bound to recognize
any legal, equitable or other claim or interest in such Share on the part of any
Person, other than the holder of record, whether or not any of them shall have
express or other notice of such claim or interest.
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SECTION 5.11. VOTING POWERS. The Shareholders shall have power to vote
only: (a) for the election of Trustees as provided in Section 2.4 hereof; (b)
with respect to any investment advisory or management contract entered into
pursuant to Section 3.2 hereof; (c) with respect to the removal of Trustees
pursuant to Section 5.16 hereof; (d) with respect to any termination OF the
Trust, as provided in Section 8.1 hereof; (e) with respect to any amendment of
this Declaration to the extent and as provided in Section 8.2 hereof; and (f)
with respect to such additional matters relating to the Trust as may be required
by this Declaration or the By-Laws or by reason of the registration of the Trust
or the Shares with the Commission or any State or by any applicable law or any
regulation or order of the Commission or any State or as the Trustees may
consider necessary or desirable. On any matter submitted to a vote of
Shareholders, all Shares issued and outstanding shall, subject to applicable
law, be voted as a single class in the aggregate and not by Series, except with
respect to: (i) any matter determined by the Trustees to affect the Shareholders
of any particular Series in a material respect different from the Shareholders
of other Series; and (ii) such matters as may be otherwise required by this
Declaration or by the By-Laws or by reason of the registration of the Trust or
the Shares of such Series with the Commission or any State or by any applicable
law (including the 1940 Act) or any regulation or order of the Commission or any
State or as the Trustees may consider necessary or desirable. With respect to
such matters, the Shareholders of each affected Series shall have the power to
vote as a separate Series or as a class of separate Series, as determined by the
Trustees, and, if so determined by the Trustees, the other shareholders shall
not be entitled to vote. Each whole Share shall be en-
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titled to one vote as to any matter on which Shareholders are entitled to vote
and each fractional Share shall be entitled to a proportionate fractional vote.
There shall be no cumulative voting in the election of Trustees. Shares may be
voted in person or by proxy. Until Shares are issued, the Trustees may exercise
all rights of Shareholders (including, without limitation, the right to amend
this Declaration) and may take any action required by law, the By-Laws or this
Declaration to be taken by Shareholders. The By-Laws may include further
provisions for Shareholders' votes and related matters.
SECTION 5.12. MEETINGS OF SHAREHOLDERS. Meetings of the Shareholders may be
called at any time by the Chairman of the Board, the President or any Vice
President of the Trust, or by a majority of the Trustees for the purpose of
taking action upon any matter requiring the vote or authority of the
Shareholders as herein provided or upon any other matters deemed to be necessary
or desirable. Without limiting the provisions of Section 5.14 hereof, a special
meeting of Shareholders may also be called at any time upon the written request
of a holder or the holders of not less than 25% of all of the Shares entitled to
be voted at such meeting, provided that the Shareholder or Shareholders
requesting such meeting shall have paid to the Trust the reasonably estimated
cost of preparing and mailing the notice thereof, which the Secretary shall
determine and specify to such Shareholder or Shareholders.
SECTION 5.13. ACTION WITHOUT A MEETING. Any action which may be taken by
Shareholders may be taken without a meeting if such proportion of Shareholders
as is required to vote for approval of the matter by law, this Declaration or
the By-Laws consents to the action in writing and the written consents are filed
with the records of Shareholders'
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meetings. Such consents shall be treated for all purposes as a vote taken at a
Shareholders' meeting.
SECTION 5.14. QUORUM AND REQUIRED VOTE. One-third (33 1/3%) of the
outstanding Shares shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or this
Declaration permits or requires that holders of any series or class shall vote
as a series or class, then one-third percent (33 1/3%) of the aggregate number
of Shares of that series or class entitled to vote shall be necessary to
constitute a quorum for the transaction of business by that series or class. Any
lesser number, however, shall be sufficient for adjournment and any adjourned
session or sessions may be held within 90 days after the date set for the
original meeting without the necessity of further notice. Except when a larger
vote is required by any provision of this Declaration of Trust or the By-Laws of
the Trust and subject to any applicable requirements of law, a majority of the
Shares voted shall decide any question, provided that where any provision of law
or of this Declaration of Trust permits or requires that the holders of any
series or class shall vote as a series or class, then a majority of the Shares
of that series or class voted on the matter shall decide that matter insofar as
that series or class is concerned.
SECTION 5.15. ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
SECTION 5.16. REMOVAL OF TRUSTEES BY SHAREHOLDERS. No Trustee shall serve
as trustee of the Trust after the holders of record of not less than two-thirds
of the outstanding Shares of the Trust have declared that such Trustee be
removed from office either by a
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declaration in writing filed with the Secretary of the Trust or by votes cast in
person or by proxy at a meeting called for such purpose. Notwithstanding the
provisions of Section 5.12 hereof, the Trustees shall comply at all times with
the provisions of the 1940 Act, including without limitation Section 16(c)
thereof or any successor section, pertaining to the removal of Trustees by
Shareholders.
SECTION 5.17. DERIVATIVE SUITS. No action may be brought by a Shareholder
on behalf of the Trust or a Series unless (i) the Shareholders have requested
the Trustees to take such action and the Trustees have failed or refused to do
so for a period of 60 days and (ii) Shareholders owning not less than fifty
percent (50%) of the then outstanding Shares of the Trust or such Series join in
the bringing of such action.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
SECTION 6.1. REDEMPTION OF SHARES. The Trustees shall redeem Shares of any
Series, subject to the conditions and at the price determined in accordance with
this Declaration, upon proper application of the record holder thereof at such
office or agency as may be designated from time to time for that purpose by the
Trustees. The Trustees shall have power to determine from time to time the form
and the other accompanying documents which shall be necessary to constitute a
proper application for redemption.
SECTION 6.2. PRICE. Shares shall be redeemed for an amount equal to the net
asset value of such Shares next determined pursuant to Article VII hereof after
receipt of a
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proper application for redemption, less a charge, if and as fixed by resolution
of the Board of Trustees from time to time.
SECTION 6.3. PAYMENT. Payment for such Shares redeemed shall be made to the
Shareholder of record within 7 days after the date upon which proper application
is received, subject to the Trustees or their designated agent being satisfied
that the purchase price of such Shares has been collected and to the provisions
of Section 6.4 hereof. Such payment shall be made in cash or other assets of the
Trust or both, as the Trustees shall prescribe. For the purposes of such payment
for Shares redeemed, the value of assets delivered shall be determined as set
forth in Article VII hereof as of the same time as of which the per share net
asset value of such Shares is determined.
SECTION 6.4. EFFECT OF SUSPENSION OF RIGHT OF REDEMPTION. If, pursuant to
Section 6.6 hereof, the Trustees shall declare a suspension of the right of
redemption, the rights of Shareholders (including those who shall have applied
for redemption pursuant to Section 6.1 hereof but who shall not yet have
received payment) to have Shares redeemed and paid for by the Trust shall be
suspended until the time specified in Section 6.6. Any record holder who shall
have his redemption right so suspended may, during the period of such
suspension, by appropriate written notice of revocation at the office or agency
where application was made, revoke any application for redemption not honored.
The redemption price of Shares for which redemption applications have not been
revoked shall not exceed the net asset value of such Shares next determined as
set forth in Article VII hereof after the termination of such suspension, and
payment shall be made within 7 days after the date upon which
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the application was made plus the period after such application during which the
determination of net asset value was suspended.
SECTION 6.5. REPURCHASE BY AGREEMENT. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof, or an agent designated by such
owner, at a price not exceeding the net asset value per share determined as set
forth in Article VII hereof as of the time specified in the prospectus of the
Trust at the time in effect.
SECTION 6.6. SUSPENSION OF RIGHT OF REDEMPTION. The Trustees may declare a
suspension of the right of redemption or postpone the date of payment or
redemption as permitted by the 1940 Act and regulations and orders from time to
time in effect thereunder. Such suspension shall take effect at such time as the
Trustees shall specify, which shall not be later than the close of business on
the business day next following the declaration, and thereafter there shall be
no determination of net asset value until the Trustees shall declare the
suspension at an end, except that the suspension shall terminate in any event on
the first day on which (i) the condition giving rise to the suspension shall
have ceased to exist and (ii) no other condition exists under which suspension
is authorized under this Section 6.6. Each declaration by the Trustees pursuant
to this shall be consistent with such applicable rules and regulations, if any,
relating to the subject matter thereof as shall have been promulgated by the
Commission or any other governmental body having jurisdiction over the Trust and
as shall be in effect at the time. To the extent not inconsistent with such
rules and regulations, the determination of the Trustees shall be conclusive.
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SECTION 6.7. INVOLUNTARY REDEMPTION OF SHARES; DISCLOSURE OF HOLDING. (a)
If the Trustees shall, at any time and in good faith, be of the opinion that
direct or indirect ownership of Shares or other securities of the Trust or any
Series thereof has or may become concentrated in any Person to an extent which
would disqualify the Trust or any Series thereof as a regulated investment
company under the Code or would cause the Trust or any Series thereof to be
treated as a personal holding company under the Code, then the Trustees shall
have the power by lot or other means deemed equitable by them
(i) to call for redemption a number, or principal amount, of Shares
sufficient in the opinion of the Trustees TO (A) maintain or bring the
direct or indirect ownership of Shares into conformity with the
requirements for such qualification or (B) avoid or to continue to avoid
the treatment of the Trust or any Series thereof as a personal holding
company under the Code, and
(ii) to refuse to transfer or issue Shares to any Person whose
acquisition of the Shares in question would in the opinion of the Trustees
result in such disqualification or treatment.
Any redemption pursuant to this Section 6.7(a) shall be effected at a
redemption price determined in accordance with Section 6.2 hereof.
(b) The holders of Shares of the Trust or any Series thereof shall, upon
request, disclose to the Trustees in writing such information with respect to
direct and indirect ownership of Shares of the Trust or any Series thereof as
the Trustees deem necessary to
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comply with the provisions of the Code, United States Treasury Regulations, or
with the requirements of any other taxing authority.
(c) The Trustees shall have the power to redeem Shares of any series in any
Shareholder's account at a redemption price determined in accordance with
Section 6.2 hereof if at any time the total number of Shares of such Series held
in such account is fewer than an established minimum selected by the Trustees,
in which event the Shareholder shall be notified that the number of Shares in
the account is fewer than the minimum and shall be allowed a period, fixed by
the Trustees, in which to avoid such redemption by increasing the account to at
least the established minimum.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE; DISTRIBUTIONS
SECTION 7.1. BY WHOM DETERMINED. The Trustees shall have the power and duty
to determine from time to time the net asset value per share of the Shares of
each Series. They may appoint one or more Persons to assist them in the
determination of the value of securities in the portfolio of each Series and to
make the actual calculations pursuant to their directions. Any determination
made pursuant to this Article VII shall be binding on all parties concerned.
SECTION 7.2. WHEN DETERMINED. The net asset value shall be determined at
such times as the Trustees shall prescribe in accordance with the applicable
provisions of the 1940 Act and regulations and orders from time to time in
effect thereunder. The Trustees
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may suspend the daily determination of net asset value to the extent permitted
by the 1940 Act or the regulations and orders from time to time in effect
thereunder.
SECTION 7.3. COMPUTATION OF PER SHARE NET ASSET VALUE.
SECTION 7.3.1. NET ASSET VALUE PER SHARE. The net asset value of each Share
of each Series as of any particular time shall be the quotient obtained by
dividing the value of the net assets of such Series (determined in accordance
with Section 7.3.2.) by the total number of outstanding Shares of that Series.
If any Series is divided into classes, the net asset value of Shares of
each class of such Series may be otherwise determined in any manner, to the
extent permitted by applicable law, determined by the Trustees and disclosed in
a prospectus relating to such class.
SECTION 7.3.2. VALUE OF THE NET ASSETS OF A SERIES. The value of the net
assets of any Series as of any particular time shall be the value of that
Series' assets less its liabilities, determined and computed as follows:
(1) ASSETS. The assets of any Series shall be deemed to include the
following assets relating to that Series: (A) all cash on hand or on
deposit, including any interest accrued thereon, (B) all bills and demand
notes and accounts receivable, (C) all securities owned or contracted for
by the Trustees, (D) all stock and cash dividends and cash distributions
payable to but not yet received by the Trustees (when the valuation of the
underlying security is being determined ex-dividend), (E) all interest
accrued on any interest-bearing securities owned by the Trustees (except
accrued interest included in the valuation of the underlying security) and
(F) all other property
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of every kind and nature, including prepaid expenses, but not any insurance
policy of the kind referred to in Section 2.1 (1) (ii) until such time as
any amount payable thereunder becomes due and payable to the Trust.
(2) VALUATION OF ASSETS. Determination of the value of such assets
shall be made, with respect to securities for which market quotations are
readily available, at the market value of such securities; and with respect
to other securities and assets, at the fair value as determined in good
faith by the Trustees.
(3) LIABILITIES. The liabilities of any Series shall not be deemed to
include any Shares of that Series and surplus, but they shall be deemed to
include the following liabilities relating to that Series: (A) all bills
and accounts payable, (B) all administrative expenses accrued and unpaid,
(C) all contractual obligations for the payment of money or property,
including the amount of any declared but unpaid dividends upon Shares of
that Series and the amount of all income accrued to the account of but not
paid to Shareholders of that Series, (D) all reserves established in
accordance with generally accepted accounting principles, for taxes or
contingencies and (E) all other liabilities of whatsoever kind and nature
except any liabilities represented by Shares of that Series and surplus.
The Board of Trustees is empowered, in its discretion, to establish other
methods for determining net asset value whenever such other methods are deemed
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by it to be necessary or desirable, including, but without limiting the
generality of the foregoing, any method deemed necessary or desirable in order
to enable the Trust to comply with any provision of the Investment Company Act
of 1940 or any rule or regulation thereunder.
SECTION 7.4. INTERIM DETERMINATIONS. Any determination of net asset value
other than as of the close of trading on the New York Stock Exchange may be made
either by appraisal or by calculation or estimate. Any such calculation or
estimate shall be based on changes in the market value of representative or
selected securities or on changes in recognized market averages since the last
closing appraisal and made in a manner which in the opinion of the Trustees will
fairly reflect the changes in the net asset value.
SECTION 7.5. OUTSTANDING SHARES. For the purposes of this Article VII,
outstanding Shares of any Series shall mean those Shares shown from time to time
on the books of such Series or the transfer agent of the Trust as then issued
and outstanding, adjusted as follows:
(a) Shares sold shall be deemed to be outstanding Shares from the time
as of which the Trust has agreed to such sale and the sale price in
currency has been determined.
(b) Shares distributed pursuant to Section 7.6 shall be deemed to be
outstanding as of the time that Shareholders who shall receive the
distribution are determined.
(c) Shares for which a proper application for redemption has been made
or which are subject to repurchase by the Trustees shall be deemed to be
outstanding Shares up to and including the time as of which the redemption
or repurchase price
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is determined. After such time, they shall be deemed to be no longer
outstanding Shares and the redemption or repurchase price until paid shall
be deemed to be a liability of the Trust.
SECTION 7.6. DISTRIBUTIONS TO SHAREHOLDERS. Without limiting the powers of
the Trustees under Subsection (f) of Section 2.1 of Article II hereof, the
Trustees may at any time and from time to time, as they may determine, allocate
or distribute to Shareholders of a Series such income and capital gains of the
Series, accrued or realized, as the Trustees may determine, after providing for
actual, accrued or estimated expenses and liabilities (including reserves)
determined in accordance with generally accepted accounting practices. The
Trustees shall have full discretion to determine which items shall be treated as
income and which items as capital and their determination shall be binding upon
the Shareholders. Such distributions shall be made in cash, property or Shares
of the appropriate Series or any combination thereof as determined by the
Trustees. Any such distribution paid in Shares shall be paid at the net asset
value thereof as determined pursuant to this Article VII. The Trustees may adopt
and offer to Shareholders such dividend reinvestment plans, cash dividend payout
plans or related plans as the Trustees shall deem appropriate. Inasmuch as the
computation of net income and gains for Federal income and excise tax purposes
may vary from the computation thereof on the books of the Trust, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to allocate or distribute for any fiscal year as ordinary dividends
and as capital gains distributions, respectively, additional amounts sufficient
to enable the Trust to avoid or reduce liability for taxes after amended or
modified.
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ARTICLE VIII
DURATION; DISSOLUTION AND TERMINATION
OF TRUST; AMENDMENT; MERGERS, ETC.
SECTION 8.1. DURATION AND TERMINATION. (a) Unless dissolved and terminated
as provided herein, the Trust shall continue without limitation of time. The
Trust may be dissolved and terminated by the affirmative vote of at least a
majority of the Shares outstanding or by the Trustees. Upon the termination of
the Trust,
(i) The Trust shall carry on no business except for the purpose of
winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust
and all of the powers of the Trustees under this Declaration shall continue
until the affairs of the Trust shall have been wound up, including the
power to fulfill or discharge the contracts of the Trust, collect its
assets, sell, convey, assign, exchange, transfer or otherwise dispose of
all or any part of the remaining Trust Property to one or more persons at
public or private sale for consideration which may consist in whole or in
part of cash, securities or other property of any kind, discharge or pay
its liabilities, and do all other acts appropriate to liquidate its
business, provided that any sale, conveyance, assignment, exchange,
transfer or other disposition of all or substantially all the Trust
Property that requires Shareholder approval under Section 8.3 hereof shall
receive the approval so required.
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(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property, in cash or in kind or partly each,
among the Shareholders according to their respective rights.
(b) After termination of the Trust and distribution to the Shareholders as
herein provided, the Trustees shall provide for the making of all filings and
applications required by law, and shall execute and lodge among the records of
the Trust an instrument in writing setting forth the fact of such termination.
Thereupon, the Trustees shall be discharged from all further liabilities and
duties hereunder, and the rights and interests of all Shareholders shall
thereupon cease.
SECTION 8.2. AMENDMENT PROCEDURE. (a) Except as specifically provided
herein, the Trustees may, without Shareholder vote, amend this Declaration by an
instrument in writing or an amended and restated Declaration signed by a
majority of the Trustees. Such an amendment shall be authorized by a Majority
Shareholder Vote, or subject to the provisions of Section 5.11, a Series
Majority Shareholder Vote, if it would limit the right of Shareholders to vote
under Section 5.11 or amend this Section 8.2 or if Shareholder authorization is
required by the 1940 Act. Notwithstanding anything else herein, no amendment to
this Declaration shall (i) limit the rights of indemnification provided in
Article IV hereof with respect to actions or omissions of Persons covered
thereby prior to such amendment, (ii) impair the
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exemption from personal liability of the Shareholders, Trustees, officers,
employees and agents of the Trust or any Series thereof or (ii) permit
assessments upon Shareholders.
(b) An instrument in writing setting forth the amendment or an amended and
restated Declaration, executed by a majority of the Trustees, shall be
conclusive evidence of such amendment when lodged among the records of the
Trust. Subject to the foregoing, any such amendment shall be effective as
provided in the instrument containing the terms of such amendment or, if there
is no provision therein with respect to effectiveness, upon the execution of
such instrument by a majority of the Trustees (or by an officer of the Trust
pursuant to a vote of a majority of the Trustees).
SECTION 8.3. MERGER, CONSOLIDATION AND SALE OF ASSETS.
Notwithstanding anything else contained herein, the Trustees may, without prior
Shareholder approval, cause the Trust or any successor thereto to merge or
consolidate with or into, or sell and convey all or substantially all of the
assets of the Trust or any Series to one or more trusts, partnerships,
associations or corporations so long as the surviving or resulting or transferee
entity is an open-end management investment company under the 1940 Act, or is a
series thereof, that will succeed to or assume that Trust's registration under
the Act and which is formed, organized or existing under the laws of a state,
commonwealth possession or colony of the United States. Any agreement of merger
or consolidation or certificate of merger may be signed by a majority of
Trustees. Pursuant to and in accordance with the provisions of Section 3815 (f)
of the Delaware Act, and notwithstanding anything to the contrary contained in
this Declaration, an agreement of merger or consolidation approved by the
Trustees in ac-
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cordance with this Section 8.3 may effect any amendment to the Declaration or
effect the adoption of a new trust instrument of the Trust if it is the
surviving or resulting trust in the merger or consolidation.
SECTION 8.4. INCORPORATION. Notwithstanding anything else contained herein,
the Trustees may, without prior Shareholder approval, (i) cause to be organized
or assist in organizing under the laws of any jurisdiction a corporation or
corporations or any other trust, partnership, association or other organization
to take over all or less than all of the Trust Property or to carry on any
business in which the Trust shall directly or indirectly have any interest, and
may sell, convey and transfer Trust Property to any such corporation, trust,
partnership, association or other organization in exchange for the shares or
securities thereof or otherwise, and may lend money to, subscribe for the shares
or securities of, and enter into any contracts with any such corporation, trust,
partnership, association or other organization, or any corporation, partnership,
trust, association or other organization in which the Trust holds or is about to
acquire shares or any other interest or (ii) cause the Trust to incorporate
under the laws of Delaware.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. REGISTERED AGENT; REGISTERED OFFICE. The
Registered Agent of the Trust within the State of Delaware for service of
process, and the Registered Office of the Trust within the State of Delaware,
shall be RL&F Service Corp., One Rodney Square, 10TH Floor, Tenth and King
Streets, Wilmington, New Castle County, Delaware 19801,
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or such other agent or place, respectively, as the Trustees may designate from
time to time by any supplement to this Declaration of Trust.
SECTION 9.2. GOVERNING LAW. The Trust and this Declaration, and the rights
and obligations of the Trustees and Shareholders hereunder, are to be governed
by and construed and administered according to the Delaware Act and the laws of
the State of Delaware; provided, however, that there shall not be applicable to
the Trust, the Trustees or this Declaration (a) the provisions of Section 3540
of Title 12 of the Delaware Code or (b) any provisions of the laws (statutory or
common) of the State of Delaware (other than the Delaware Act) Pertaining to
trusts which relate to or regulate (i) the filing with any court or governmental
body or agency of trustee accounts or schedules of trustee fees and charges,
(ii) affirmative requirements to post bonds for trustees, officers, agents, or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards or responsibilities or limitations
on the acts or powers of trustees, which are inconsistent with the limitations
or liabilities or authorities and powers of the Trustees set forth or referenced
in this Declaration. The Trust shall be of the type commonly called a "business
trust", and without limiting the provisions hereof, the Trust may exercise all
powers which are ordinarily
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exercised by such a trust under Delaware law. The Trust specifically reserves
the right to exercise any of the powers or privileges afforded to trusts or
actions that may be engaged in by trusts under the Delaware Act, and the absence
of a specific reference herein to any such power, privilege or action shall not
imply that the Trust may not exercise such power or privilege or take such
actions.
SECTION 9.3. COUNTERPARTS. This Declaration may be simultaneously executed
in several counterparts, each of which shall be deemed to be an original, and
such counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
SECTION 9.4. RELIANCE BY THIRD PARTIES. Any certificate executed by an
officer of the Trust or a Trustee certifying to: (a) the number or identity of
Trustees or Shareholders, (b) the due authorization of the execution of any
instrument or writing, (c) the form of any vote passed at a meeting of Trustees
or Shareholders, (d) the fact that the number of Trustees or Shareholders
present at any meeting or executing any written instrument satisfies the
requirements of this Declaration, (e) the form of any By-Laws adopted by or the
identity of any officers elected by the trustees or (f) the existence of any
fact or facts which in any manner relate to the affairs of the Trust or any
Series thereof, shall be conclusive evidence as to the matters so certified in
favor of any Person dealing with the Trustees and their successors.
SECTION 9.5. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of
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counsel, that any of such provisions is in conflict with requirements of the
1940 Act, would be inconsistent with any of the conditions necessary for
qualification of the Trust as a regulated investment company under the Code or
is inconsistent with other applicable laws and regulations, such provision shall
be deemed never to have constituted a part of this Declaration, provided that
such determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
SECTION 9.6. USE OF NAME. The Trust is adopting its name through permission
of the firm of Lord, Abbett & Co., which is entering into a management or
advisory contract with the Trust. Such contract shall make appropriate
provisions that upon the termination of such contract for any cause, or if such
firm, or a subsidiary, affiliate or successor thereof, deems it advisable to
withdraw the right to the use of its name, the Trust will, at the request of
such firm, or of a subsidiary, affiliate or successor thereof lawfully using the
name, take such action as may be necessary to change its name to eliminate all
use of or reference to the words "Lord Abbett" in any form and will not use the
registered service mark of Lord, Abbett & Co. without the written consent of
such firm, subsidiary, affiliate or successor. The Trust shall also agree in
such contract that investment companies other than the Trust for
51
<PAGE>
which such firm or a subsidiary or successor thereof may act as investment
adviser, and other companies affiliated with Lord, Abbett & Co., may be formed
with the words "Lord Abbett" in their corporate titles. Such agreements on the
part of the Trust are hereby made binding upon it, its Trustees, officers,
shareholders, creditors and all other persons claiming under or through it.
SECTION 9.7. SECTION HEADINGS; INTERPRETATION. Section headings in this
Declaration are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof. References in this Declaration to "this
Declaration" shall be deemed to refer to this Declaration as from time to time
amended, and all expressions such as "hereof", "herein" and "hereunder" shall be
deemed to refer to this Declaration as from time to time amended and not
exclusively to the article or section in which such words appear.
52
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
instrument this 29th day of September, 1999.
/a/ Paul A. Hilstad
/s/ Lawrence H. Kaplan
53
<PAGE>
STATE OF NEW YORK )
)
COUNTY OF NEW YORK) NEW YORK, NEW YORK
On September 29, 1999 there personally appeared before me the above-named
Lawrence H. Kaplan and Paul A. Hilstad who severally acknowledged the foregoing
instrument to be their free act and deed.
Before me
/s/ Lydia Guzman
-----------------------
Notary Public
54
<PAGE>
BY-LAWS
OF
LORD ABBETT LARGE-CAP GROWTH FUND
As adopted on September __, 1999
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
Page
<S> <C>
ARTICLE I Definitions...................................................................................1
ARTICLE II Offices and Seal.............................................................................1
Section 2.1. Principal Office..............................................................1
Section 2.2. Other Offices.................................................................1
Section 2.3. Seal..........................................................................1
ARTICLE III Shareholders................................................................................2
Section 3.1. Meetings......................................................................2
Section 3.2. Place of Meeting..............................................................2
Section 3.3. Notice of Meetings............................................................2
Section 3.4. Shareholders Entitled to Vote.................................................2
Section 3.5. Quorum........................................................................3
Section 3.6. Adjournment...................................................................3
Section 3.7. Proxies.......................................................................3
Section 3.8. Inspection of Records.........................................................3
Section 3.9. Record Dates..................................................................3
ARTICLE IV Meetings of Trustees.........................................................................4
Section 4.1. Regular Meetings..............................................................4
Section 4.2. Special Meetings..............................................................4
Section 4.3. Notice........................................................................4
Section 4.4. Waiver of Notice..............................................................4
Section 4.5. Adjournment and Voting........................................................4
Section 4.6. Compensation..................................................................4
Section 4.7. Quorum........................................................................5
ARTICLE V Executive Committee and Other Committees......................................................5
Section 5.1. How Constituted...............................................................5
Section 5.2. Powers of the Executive Committee.............................................5
Section 5.3. Other Committees of Trustees..................................................5
Section 5.4. Proceedings, Quorum and Manner of Acting......................................5
Section 5.5. Other Committees..............................................................5
ARTICLE VI Officers.....................................................................................6
Section 6.1. General.......................................................................6
<PAGE>
Section 6.2. Election, Term of Office and Qualifications...................................6
Section 6.3. Resignations and Removals.....................................................6
Section 6.4. Vacancies and Newly Created Offices...........................................6
Section 6.5. Chairman of the Board.........................................................7
Section 6.6. President.....................................................................7
Section 6.7. Vice President................................................................7
Section 6.8. Chief Financial Officer, Treasurer and Assistant Treasurers...................7
Section 6.9. Secretary and Assistant Secretaries...........................................8
Section 6.10. Subordinate Officers..........................................................8
Section 6.11. Surety Bonds..................................................................8
ARTICLE VII Execution of Instruments; Voting of Securities..............................................9
Section 7.1. Execution of Instruments......................................................9
Section 7.2. Voting of Securities..........................................................9
ARTICLE VIII Fiscal Year; Accountants...................................................................9
Section 8.1. Fiscal Year...................................................................9
Section 8.2. Accountants...................................................................9
ARTICLE IX Amendments; Compliance with Investment Company Act..........................................10
Section 9.1. Amendments...................................................................10
Section 9.2. Compliance with Investment Company Act.......................................10
</TABLE>
2
<PAGE>
BY-LAWS
OF
LORD ABBETT LARGE-CAP GROWTH FUND
ARTICLE I
Definitions
The terms "Affiliated Person", "Commission", "Interested Person",
"Investment Adviser", "Majority Shareholder Vote", "1940 Act", "Principal
Underwriter", "Series", "Series Majority Shareholder Vote", "Shareholder",
"Shares", "Trust", "Trust Property", and "Trustees" have the meanings given them
in the Declaration and Agreement of Trust (the "Declaration") of Lord Abbett
Large-Cap Growth Fund dated September __, 1999, as amended from time to time.
ARTICLE II
Offices and Seal
Section 2.1. Principal Office - The principal office of the Trust, starting
on or about January 17, 2000, shall be located in Jersey City, New Jersey.
Section 2.2. Other Offices - The Trust may establish and maintain such
other offices and places of business within or without the State of New Jersey
as the Trustees may from time to time determine.
Section 2.3. Seal - The seal of the Trust shall be circular in form and
shall bear the name of the Trust, the year of its organization, and the words
"Common Seal" and "A Delaware Business Trust". The form of the seal shall be
subject to alteration by the Trustees and the seal may be used by causing it or
a facsimile to be impressed or affixed or printed or otherwise reproduced. Any
officer or Trustee of the Trust shall have authority to affix the seal of the
Trust to any document requiring the same but, unless otherwise required by the
Trustees, the seal shall not be necessary to be placed on, and its absence shall
not impair the validity of, any document, instrument or other paper executed and
delivered by or on behalf of the Trust.
<PAGE>
ARTICLE III
Shareholders
Section 3.1. Meetings - A Shareholders' meeting for the election of
Trustees and the transaction of other proper business shall be held when
authorized or required by the Declaration.
Section 3.2. Place of Meeting - All Shareholders' meetings shall be held at
such place within or without the State of New Jersey as the Trustees shall
designate.
Section 3.3. Notice of Meetings - Notice of all Shareholders' meetings,
stating the time, place and purpose of the meeting, shall be given by the
Secretary or an Assistant Secretary of the Trust by mail to each Shareholder
entitled to notice of and to vote at such meeting at his address of record on
the register of the Trust. Such notice shall be mailed at least 10 days and not
more than 90 days before the meeting. Such notice shall be deemed to be given
when deposited in the United States mail, with postage thereon prepaid. Any
adjourned meeting may be held as adjourned without further notice. No notice
need be given (a) to any shareholder if a written waiver of notice, executed
before or after the meeting by such Shareholder or his attorney thereunto duly
authorized, is filed with the records of the meeting, or (b) to any Shareholder
who attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him. A waiver of notice need not specify the purposes of
the meeting.
Section 3.4. Shareholders Entitled to Vote - If, pursuant to Section 3.9
hereof, a record date has been fixed for the determination of Shareholders
entitled to notice of and to vote at any Shareholders' meeting, each Shareholder
of the Trust entitled to vote in accordance with the applicable provisions of
the Declaration, shall be entitled to vote, in person or by proxy, each Share or
fraction thereof standing in his name on the register of the Trust at the time
of determining net asset value on such record date. If the Declaration or the
1940 Act requires that Shares be voted by Series, each Shareholder shall only be
entitled to vote, in person or by proxy, each Share or fraction thereof of such
Series standing in his name on the register of the Trust at the time of
determining net asset value on such record date. If no record date has been
fixed for the determination of Shareholders entitled to notice of and to vote at
a Shareholders' meeting, such record date shall be at the close of business on
the day on which notice of the meeting is mailed or, if notice is waived by all
Shareholders, at the close of business on the tenth day next preceding the day
on which the meeting is held.
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<PAGE>
Section 3.5. Quorum - The presence at any Shareholders' meeting, in person
or by proxy, of Shareholders entitled to cast a third of the votes thereat shall
be a quorum for the transaction of business, unless applicable law requires a
larger number.
Section 3.6. Adjournment - The holders of a majority of the Shares entitled
to vote at the meeting and present thereat, in person or by proxy, whether or
not constituting a quorum, or, if no Shareholder entitled to vote is present
thereat in person or by proxy, any Trustee or officer present thereat entitled
to preside or act as Secretary of such meeting may adjourn the meeting sine die
or from time to time. Any business that might have been transacted at the
meeting originally called may be transacted at any such adjourned meeting at
which a quorum is present.
Section 3.7. Proxies - Shares may be voted in person or by proxy. When any
Share is held jointly by several persons, any one of them may vote at any
meeting, in person or by proxy, in respect of such Share unless at or prior to
exercise of the vote the Trustees receive a specific written notice to the
contrary from any one of them. If more than one such joint owner shall be
present at such meeting, in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote cast, such vote shall not be received
in respect of such Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise
and the burden of proving invalidity shall rest on the challenger.
Section 3.8. Inspection of Records - The records of the Trust shall be open
to inspection by Shareholders as is permitted shareholders of a Delaware
business trust.
Section 3.9. Record Dates - The Trustees may fix in advance a date as a
record date for the purpose of determining the Shareholders who are entitled to
notice of and to vote at any meeting or any adjournment thereof, or to express
consent in writing without a meeting to any action of the Trustees, or who shall
receive payment of any dividend or of any other distribution, or for the purpose
of any other lawful action, provided that such record date shall be not more
than 90 days before the date on which the particular action requiring such
determination of Shareholders is to be taken. In such case, subject to the
provisions of Section 3.4, each eligible Shareholder of record on such record
date shall be entitled to notice of, and to vote at, such meeting or
adjournment, or to express such consent, or to receive payment of such dividend
or distribution or to take such other action, as the case may be,
notwithstanding any transfer of Shares on the register of the Trust after the
record date.
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ARTICLE IV
Meetings of Trustees
Section 4.1. Regular Meetings - The Trustees from time to time shall
provide by resolution for the holding of regular meetings for the election of
officers and the transaction of other proper business and shall fix the place
and time for such meetings to be held within or without the State of New Jersey.
Section 4.2. Special Meetings - Special meetings of the Trustees shall be
held whenever called by the Chairman of the Board, the President (or, in the
absence or disability of the President, by any Vice President), the Chief
Financial Officer, the Secretary or two or more Trustees, at the time and place
within or without the State of New Jersey specified in the respective notices or
waivers of notice of such meetings.
Section 4.3. Notice - No notice of regular meetings of the Trustees shall
be required except as required by the Investment Company Act of 1940, as
amended. Notice of each special meeting shall be mailed to each Trustee, at his
residence or usual place of business, at least two days before the day of the
meeting, or shall be directed to him at such place by telegraph, telecopy or
cable, or be delivered to him personally not later than the day before the day
of the meeting. Every such notice shall state the time and place of the meeting
but need not state the purposes thereof, except as otherwise expressly provided
by these By-Laws or by statute. No notice of adjournment of a meeting of the
Trustees to another time or place need be given if such time and place are
announced at such meeting.
Section 4.4. Waiver of Notice - Notice of a meeting need not be given to
any Trustee if a written waiver of notice, executed by him before or after the
meeting, is filed with the records of the meeting, or to any Trustee who attends
the meeting without protesting prior thereto or at its commencement the lack of
notice to him. A waiver of notice need not specify the purposes of the meeting.
Section 4.5. Adjournment and Voting - At all meetings of the Trustees, a
majority of the Trustees present, whether or not constituting a quorum, may
adjourn the meeting, from time to time. The action of a majority of the Trustees
present at a meeting at which a quorum is present shall be the action of the
Trustees unless the concurrence of a greater proportion is required for such
action by law, by the Declaration or by these By-Laws.
Section 4.6. Compensation - Each Trustee may receive such remuneration for
his services as such as shall be fixed from time to time by resolution of the
Trustees.
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Section 4.7. Quorum - One-third of the Trustees present at a meeting shall
constitute a quorum for the transaction of business, but in no case shall a
quorum be less than two Trustees.
ARTICLE V
Executive Committee and Other Committees
Section 5.1. How Constituted - The Trustees may, by resolution, designate
one or more committees, including an Executive Committee, an Audit Committee and
a Committee on Administration, each consisting of at least two Trustees. The
Trustees may, by resolution, designate one or more alternate members of any
committee to serve in the absence of any member or other alternate member of
such committee. Each member and alternate member of a committee shall be a
Trustee and shall hold office at the pleasure of the Trustees. The Chairman of
the Board and the President shall be members of the Executive Committee.
Section 5.2. Powers of the Executive Committee - Unless otherwise provided
by resolution of the Trustees, the Executive Committee shall have and may
exercise all of the power and authority of the Trustees, provided that the power
and authority of the Executive Committee shall be subject to the limitations
contained in the Declaration.
Section 5.3. Other Committees of Trustees - To the extent provided by
resolution of the Trustees, other committees shall have and may exercise any of
the power and authority that may lawfully be granted to the Executive Committee.
Section 5.4. Proceedings, Quorum and Manner of Acting - In the absence of
appropriate resolution of the Trustees, each committee may adopt such rules and
regulations governing its proceedings, quorum and manner of acting as it shall
deem proper and desirable, provided that the quorum shall not be less than two
Trustees. In the absence of any member or alternate member of any such
committee, the members thereof present at any meeting, whether or not they
constitute a quorum, may appoint a Trustee to act in the place of such absent
member or alternate member.
Section 5.5. Other Committees - The Trustees may appoint other committees,
each consisting of one or more persons who need not be Trustees. Each such
committee shall have such powers and perform such duties as may be assigned to
it from time to time by the Trustees, but shall not exercise any power which may
lawfully be exercised only by the Trustees or a committee thereof.
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ARTICLE VI
Officers
Section 6.1. General - The designated officers of the Trust shall be a
Chairman of the Board, a President, a Secretary, a Chief Financial Officer, a
Treasurer and may include one or more Vice Presidents (one or more of whom may
be Executive Vice Presidents), one or more Assistant Secretaries, one or more
Assistant Treasurers, and such other officers as may be appointed in accordance
with the provisions of Section 6.10 of this Article VI.
Section 6.2. Election, Term of Office and Qualifications - The designated
officers of the Trust and any Series thereof (except those appointed pursuant to
Section 6.10) shall be elected by the Trustees at any regular or special meeting
of the Trustees. Except as provided in Sections 6.3 and 6.4 of this Article VI,
each officer elected by the Trustees shall hold office until his successor shall
have been chosen and qualified. Any two offices, except those of the President
and a Vice President, may be held by the same person, but no officer shall
execute, acknowledge or verify any instrument in more than one capacity if such
instrument be required by law, the Declaration or these By-Laws to be executed,
acknowledged or verified by any two or more officers. The Chairman of the Board
and the President shall be selected from among the Trustees and may hold such
offices only so long as they continue to be Trustees. Any Trustee or officer may
be but need not be a Shareholder of the Trust.
Section 6.3. Resignations and Removals - Any officer may resign his office
at any time by delivering a written resignation to the Trustees, the President,
the Secretary or any Assistant Secretary. Unless otherwise specified therein,
such resignation shall take effect upon delivery. Any officer may be removed
from office with or without cause by the vote of a majority of the Trustees at
any regular meeting or any special meeting. Except to the extent expressly
provided in a written agreement with the Trust, no officer resigning and no
officer removed shall have any right to any compensation for any period
following his resignation or removal or any right to damages on account of such
removal.
Section 6.4. Vacancies and Newly Created Offices - If any vacancy shall
occur in any office by reason of death, resignation, removal, disqualification
or other cause, or if any new office shall be created, such vacancies or newly
created offices may be filled by the Trustees at any regular or special meeting
or, in the case of any office created pursuant to Section 6.10 of this Article
VI, by any officer upon whom such power shall have been conferred by the
Trustees.
6
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Section 6.5. Chairman of the Board - The Chairman of the Board shall be the
chief executive officer of the Trust and each Series thereof, shall preside at
all Shareholders' meetings and at all meetings of the Trustees and shall be ex
officio a member of all committees of the Trustees and each Series thereof,
except the Audit Committee. Subject to the supervision of the Trustees, he shall
have general charge of the business of the Trust and each Series thereof, the
Trust Property and the officers, employees and agents of the Trust and each
Series thereof. He shall have such other powers and perform such other duties as
may be assigned to him from time to time by the Trustees.
Section 6.6. President - The President shall be the chief operating officer
of the Trust and each Series thereof and, at the request of or in the absence or
disability of the Chairman of the Board, he shall preside at all Shareholders'
meetings and at all meetings of the Trustees and shall in general exercise the
powers and perform the duties of the Chairman of the Board. Subject to the
supervision of the Trustees and such direction and control as the Chairman of
the Board may exercise, he shall have general charge of the operations of the
Trust and each Series thereof and its officers, employees and agents. He shall
exercise such other powers and perform such other duties as from time to time
may be assigned to him by the Trustees.
Section 6.7. Vice President - The Trustees may, from time to time,
designate and elect one or more Vice Presidents who shall have such powers and
perform such duties as from time to time may be assigned to them by the Trustees
or the President. At the request or in the absence or disability of the
President, the Executive Vice President (or, if there are two or more Executive
Vice Presidents, the senior in length of time in office or if there is no
Executive Vice President in the absence of both the President and any Executive
Vice President, the Vice President who is senior in length of time in office of
the Vice Presidents present and able to act) may perform all the duties of the
President.
Section 6.8. Chief Financial Officer, Treasurer and Assistant Treasurers -
The Chief Financial Officer shall be the principal financial and accounting
officer of the Trust and each Series thereof and shall have general charge of
the finances and books of account of the Trust and each Series thereof. Except
as otherwise provided by the Trustees, he shall have general supervision of the
funds and property of the Trust and each Series thereof and of the performance
by the custodian appointed pursuant to Section 2.1 (paragraph r) of the
Declaration of its duties with respect thereto. The Chief Financial Officer
shall render a statement of condition of the finances of the Trust and each
Series thereof to the Trustees as often as they shall require the same and he
shall in general perform all the duties incident to the office of the Chief
Financial Officer and such other duties as from time to time may be assigned to
him by the Trustees.
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The Treasurer or any Assistant Treasurer may perform such duties of the
Chief Financial Officer as the Chief Financial Officer or the Trustees may
assign. In the absence of the Chief Financial Officer, the Treasurer may perform
all duties of the Chief Financial Officer. In the absence of the Chief Financial
Officer and the Treasurer, any Assistant Treasurer may perform all duties of the
Chief Financial Officer.
Section 6.9. Secretary and Assistant Secretaries - The Secretary shall
attend to the giving and serving of all notices of the Trust and each Series
thereof and shall record all proceedings of the meetings of the Shareholders and
Trustees in one or more books to be kept for that purpose. He shall keep in safe
custody the seal of the Trust, and shall have charge of the records of the Trust
and each Series thereof, including the register of shares and such other books
and papers as the Trustees may direct and such books, reports, certificates and
other documents required by law to be kept, all of which shall at all reasonable
times be open to inspection by any Trustee. He shall perform such other duties
as appertain to his office or as may be required by the Trustees.
Any Assistant Secretary may perform such duties of the Secretary as the
Secretary or the Trustees may assign, and, in the absence of the Secretary, he
may perform all the duties of the Secretary.
Section 6.10. Subordinate Officers - The Trustees from time to time may
appoint such other subordinate officers or agents as they may deem advisable,
each of whom shall have such title, hold office for such period, have such
authority and perform such duties as the Trustees may determine. The Trustees
from time to time may delegate to one or more officers or agents the power to
appoint any such subordinate officers or agents and the prescribe their
respective rights, terms of office, authorities and duties.
Section 6.11. Surety Bonds - The Trustees may require any officer or agent
of the Trust and any Series thereof to execute a bond (including, without
limitation, any bond required by the 1940 Act and the rules and regulations of
the Commission) to the Trustees in such sum and with such surety or sureties as
the Trustees may determine, conditioned upon the faithful performance of his
duties to the Trust, including responsibility for negligence and for the
accounting of any of the Trust Property that may come into his hands. In any
such case, a new bond of like character shall be given at least every six years,
so that the date of the new bond shall not be more than six years subsequent to
the date of the bond immediately preceding.
8
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ARTICLE VII
Execution of Instruments; Voting of Securities
Section 7.1. Execution of Instruments - All deeds, documents, transfers,
contracts, agreements, requisitions, orders, promissory notes, assignments,
endorsements, checks and drafts for the payment of money by the Trust or any
Series thereof, and any other instruments requiring execution either in the name
of the Trust or the names of the Trustees or otherwise may be signed by the
Chairman, the President, a Vice President or the Secretary and by the Chief
Financial Officer, Treasurer or an Assistant Treasurer, or as the Trustees may
otherwise, from time to time, authorize, provided that instructions in
connection with the execution of portfolio securities transactions may be signed
by one such officer. Any such authorization may be general or confined to
specific instances.
Section 7.2. Voting of Securities - Unless otherwise ordered by the
Trustees, the Chairman, the President or any Vice President shall have full
power and authority on behalf of the Trustees to attend and to act and to vote,
or in the name of the Trustees to execute proxies to vote, at any meeting of
stockholders of any company in which the Trust may hold stock. At any such
meeting such officer shall possess and may exercise (in person or by proxy) any
and all rights, powers and privileges incident to the ownership of such stock.
The Trustees may by resolution from time to time confer like powers upon any
other person or persons.
ARTICLE VIII
Fiscal Year; Accountants
Section 8.1. Fiscal Year - The fiscal year of the Trust and any Series
thereof shall be established by resolution of the Trustees.
Section 8.2. Accountants - (a) The Trustees shall employ a public
accountant or a firm of independent public accountants as their accountant to
examine the accounts of the Trust and each Series thereof and to sign and
certify at least annually financial statements filed by the Trust. The
accountant's certificates and reports shall be addressed both to the Trustees
and to the Shareholders.
(b) A majority of the Trustees who are not Interested Persons of the Trust
shall select the accountant at any meeting held before the initial registration
statement of the Trust becomes effective, and thereafter shall select the
accountant
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annually by votes, cast in person, at a meeting held within 90 days before or
after the beginning of the fiscal year of the Trust.
(c) Any vacancy occurring due to the death or resignation of the accountant
may be filled at a meeting called for the purpose by the vote, cast in person,
of a majority of those Trustees who are not Interested Persons of the Trust.
ARTICLE IX
Amendments; Compliance with Investment Company Act
Section 9.1. Amendments - These By-Laws may be amended or repealed, in
whole or in part, by a majority of the Trustees then in office at any meeting of
the Trustees, or by one or more writings signed by such a majority.
Section 9.2. Compliance with Investment Company Act - No provision of these
By-Laws shall be given effect to the extent inconsistent with the requirements
of the Investment Company Act of 1940, as amended.
10
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MANAGEMENT AGREEMENT
--------------------
AGREEMENT made as of this day of by and between LORD ABBETT LARGE-CAP
GROWTH FUND, a Delaware business trust (hereinafter called the "Trust"), and
LORD, ABBETT & CO., a New York partnership (hereinafter called the "Investment
Manger").
WHEREAS, the Trust, desires to obtain the investment management services of
the Investment Manager and the Investment Manager is willing to provide services
of the nature desired upon the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Trust hereby employs the Investment Manager under the terms and
conditions of this Agreement, and the Investment Manager hereby accepts such
employment and agrees to perform supervisory functions of the Trust with respect
to the investment and reinvestment of its property and assets (whether or not
held in trust or in the custody of a bank or trust company subject to the
Trust's direction or control) including, without limitation, the supervision of
its investment portfolios and the recommendation of investment policies and
procedures within the limitations set forth in the Trust's Registration
Statement on file with the Securities and Exchange Commission under the
Securities Act of 1933 and the Investment Company Act of 1940, as amended (the
"Act").
The Investment Manager agrees to maintain an adequate organization of
competent persons to perform the supervisory functions mentioned herein.
All recommendations with respect to the investment portfolios will be made
to the Trust's trading department which, with the approval of authorized
officers of the Trust, will execute all trades in accordance with the Trust's
investment procedures.
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The Investment Manager reserves the right, in its discretion, to purchase
or otherwise obtain statistical information and services from other sources,
including affiliated persons of the Investment Manager.
Notwithstanding the provisions of this paragraph 1, the investment policies
and procedures and all other actions of the Trust are, and shall at all times
be, subject to the control and direction of its trustees.
2. The Trust will pay the Investment Manager for its services under this
Agreement and for the expenses assumed an annual management fee computed and
payable monthly, at a percentage of the average daily net assets. The value of
the net assets shall include all assets held in trust or in custody of any bank,
savings bank or trust company for the Trust, subject to its control or
direction, and shall be determined as provided in the Declaration and Agreement
of Trust of the Trust. The fee shall be paid on the first day of each month for
the preceding month.
While recognizing that principal transactions, including riskless
principal transactions, are not afforded the protection of the safe harbor in
Section 28 (e) of the Securities Exchange Act of 1934, the Investment Manager
may receive research and other statistical information from broker-dealers and
from other sources and, in accordance with said Section 28(e), a broker-dealer
may be paid a commission for a transaction involving portfolio securities of the
Trust exceeding the amount another broker-dealer would have charged for the same
transaction if it is determined by the Investment Manger in good faith that such
amount of commission is reasonable in relation to the value of the research
services provided by the executing broker-dealer, viewed in terms of either the
particular transaction or the overall responsibilities of the Investment Manager
with respect to the Trust and other accounts (investment companies and other
investment clients) with respect to which it exercises investment discretion.
Such research services may be used by the Investment Manager in serving all its
accounts, and not all of such research services need necessarily be used by the
Investment Manager in connection with its services to the Trust.
It is understood that any supplemental advisory or statistical services
which may be provided to the Trust or to the Investment Manager from time to
time by independent broker-dealers or persons other than the Investment Manager,
for whatever reason, shall
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not reduce the amount of the fees payable to the Investment Manager hereunder.
It is recognized that such supplementary advisory or statistical services be
useful to the Investment Manager and the Trust, but their value is
indeterminable and is not to be considered a substitute for the services
provided by the Investment Manager hereunder.
3. It is understood that the services of the Investment Manager are not
deemed to be exclusive, and nothing in this Agreement shall prevent the
Investment Manger, or any officer, director, partner or employee thereof, from
providing similar services to other investment companies and other clients
(whether or not their investment objectives and policies are similar to those of
the Trust) or to engage in other activities. When other clients of the
Investment Manager desire to purchase or sell the same portfolio security at the
same time as the Trust, it is understood that such purchases and sales will be
made as nearly as practicable on a pro rata basis in proportion to the amounts
desired to be purchased or sold by each client.
4. The Trust will, at its own expense, furnish to the Investment Manager
periodic (but not less than semi-annually) statements of its books of account,
including balance sheets and earnings statement, and all other information which
may reasonably be required, form time to time, by the Investment Manager, and
will, at its own expense, at all times keep the Investment Manager fully advised
as to the cash, securities and other property then comprising its assets, and
furnish daily detailed price makeup sheets with respect to its investment
portfolio and its shares of beneficial interest outstanding.
5. The Investment Manager shall be under no obligation to pay any fees,
costs, expenses or other charges of the Trust, except for the compensation of
its officers, the compensation, if any, of its trustees who are affiliated with
the Investment Manager, the rental for its office space, and the ordinary and
necessary office and clerical expenses relating to research, statistical work
and supervision of the Trust's investment portfolio, to be performed by the
Investment Manager under paragraph 1 of this Agreement. The Trust will pay its
own fees, costs, expenses or charges relating to its assets and operations,
including without limitation: office and clerical expenses not relating to
research, statistical work and supervision of its investment portfolio; fees and
expenses of trustees not affiliated with the Investment Manager; governmental
fees; interest charges; taxes; association membership dues; fees and charges for
legal and auditing
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<PAGE>
services; fees and expenses of any custodians or trustees with respect to
custody of its assets; fees, charges and expenses of dividend disbursing agents,
registrars and transfer agents (including the cost of keeping all necessary
shareholder records and accounts, and of handling any problems relating thereto
and the expense of furnishing to all shareholders statements of their accounts
after every transaction including the expense of mailing); costs and expenses of
repurchase and redemption of its shares; costs and expenses of preparing,
printing and mailing to shareholders ownership certificates, proxy statements
and materials, prospectuses, reports and notices; costs of preparing reports to
governmental agencies; brokerage fees and commissions of every kind and expenses
in connection with the execution of portfolio security transactions (including
the cost of any service or agency designed to facilitate the purchase and sale
of portfolio securities); and all postage, insurance premiums, and any other
fee, cost, expense or charge of any kind incurred by and on behalf of the Trust
and not expressly assumed by the Investment Manager under this Agreement.
Notwithstanding the above, to encourage sales of shares of beneficial
interest in the Trust, the Investment Manager may, but is not required to, waive
its fee hereunder attributable to the Trust and directly pay or reimburse the
Trust for any portion of the operating expenses of such Trust not expressly
assumed by the Investment Manager under this Agreement. The amount of any such
expenses so voluntarily paid or reimbursed by the Investment Manager shall be
paid back to the Investment Manager by the Trust without interest to the extent
provided as follows. No such pay-back will be made prior to the first day of the
calendar quarter after the net assets first reach $50 million (the "commencement
date"). Thereafter, until the first day of the calendar quarter after the net
assets first reach $100 million (the "recalculation date"), if the ratio of
operating expenses (determined before taking into account any fee waiver or
payment or reimbursement of expenses by the Investment Manager) to average net
assets ("expense ratio") is less than the percentage set forth in an Addendum to
this Agreement between the Investment Manager and the Trust, such Trust shall
repay the Investment Manager an amount equal in dollars to the difference
between the expenses included in the determination of such expense ratio and the
expenses required to achieve such percentage set forth in the addendum to this
Agreement. The expense ratios will be determined on a
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<PAGE>
full fiscal year basis and, if the commencement date does not begin at the start
of a fiscal year, the determination will be based on the remaining portion of
the fiscal year annualized. Beginning with the recalculation date, the
reimbursement of expenses shall be measured by the difference between the
expenses included in the determination of such expense ratio and those at the
expense ratio set forth in an Addendum to this Agreement between the Investment
Manager and the Trust. Any such repayments shall be made promptly (but in any
event within 60 days) after the end of the fiscal years of the Trust with
respect to which they are payable, and no such repayment shall exceed the amount
of the expenses paid or reimbursed by the Investment Manager and not previously
paid back. The amount of any expenses paid or reimbursed that is subject to the
repayment provisions of this paragraph and not repaid as provide above prior to
termination of this Agreement, or by the end of the fifth full fiscal year after
the commencement date that shares of the Trust are first publicly sold,
whichever first occurs, shall not be repaid to the Investment Manager.
Notwithstanding any other provision of this Agreement, if expenses
(including management fees hereunder but excluding interest, taxes, brokerage
fees, and where permitted, extraordinary expenses) borne by the Trust in any
fiscal year exceed expense limitations applicable to the Trust imposed by state
securities administrators, as such limitations may be lowered or raised from
time to time, the Investment Manager will reimburse the Trust for any such
excess. If the Investment Management pays for other expenses of the Trust or
furnishes without charge to the Trust services the cost of which is to be borne
by the Trust under this Agreement, the Investment Manger shall not be deemed to
have waived its rights under this Agreement to have the Trust pay for such
expenses or provide or pay for such services in the future. The Investment
manager may also advance the payment of expenses, subject to reimbursement by
the Trust in the ordinary course of business.
6. The Investment Manager agrees that it shall observe and be bound by all
of the provisions of the Declaration and Agreement of Trust (including any
amendments thereto) of the Trust which in any way limit or restrict or prohibit
or otherwise regulate any action by the Investment Manager.
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<PAGE>
7. Other than to abide by the provisions hereof and render the services
called for hereunder in good faith, the Investment Manager assumes no
responsibility under this Agreement and, having so acted, the Investment Manager
shall not be held liable or accountable for any mistakes of law or fact, or for
any error or omission of its officers, directors, partners or employees, or for
any loss or damage arising or resulting therefrom suffered by the Trust or any
of its shareholders, creditors, trustees or officers; provided however, that
nothing herein shall be deemed to protect the Investment Manager against any
liability to the Trust or its shareholders by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties hereunder, or by
reason of the reckless disregard of its obligations and duties hereunder. The
Investment Manager shall not be reasonable for any action of the Trustees of the
Trust in following or declining to follow any advice or recommendation of the
Investment Manager.
8. Neither this Agreement nor any other transaction between the parties
hereto pursuant to this Agreement shall be invalidated or in any way affected by
the fact that any or all of the trustees, officers, shareholders, or other
representatives of the Trust are or may be interested in the Investment Manager,
or any successor or assignee thereof, or that any or all of the officers,
partners, or other representatives of the Investment Manager are or may be
interested in the Trust, except as otherwise may be provided in the Act. The
Investment in acting hereunder shall be an independent contractor and not any
agent of the Trust.
9. This Agreement shall become effective upon the date hereof and shall
continue in force until , and is renewable annually thereafter by specific
approval of the trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Trust; any such renewal shall be approved
by the vote of a majority of the trustees who are not parties to this Agreement
or interested persons of the Investment Manager or of the Trust, cast in person
at a meeting called for this purpose of voting on such renewal.
This Agreement may be terminated without penalty at any time by the
trustees of the Trust on 60 days' written notice. This Agreement shall
automatically terminate in the event of its assignment. The terms "interested
persons," "assignment" and "vote of a majority of the outstanding voting
securities" shall have the same meaning as those terms are defined in the Act.
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<PAGE>
10. The Investment Manager reserves the right to grant the use of the name
"LORD ABBETT" or "LORD, ABBETT & CO.," or any derivative thereof, or any other
part of the name of the Trust to any other investment company, any series of an
investment company or any business enterprise. The Investment Manager reserves
the right to withdraw from the Trust the use of the name "LORD ABBETT" and the
use of its registered service mark; at such time of withdrawal of the right to
use the name "LORD ABBETT," the Investment Manager agrees that the question of
continuing this Agreement may be submitted to a vote of the Trust's
shareholders. In the event of such withdrawal or the termination of this
Agreement, for any reason, the Trust will, on the written request of the
Investment Manager, take such action as my be necessary to change its name and
eliminate all reference to the words "LORD ABBETT" in any form, and will no
longer use such registered service mark.
11. The obligations of the Trust, including those imposed hereby, are not
personally binding upon, nor shall resort be had to the private property of, any
of the trustees, shareholders, officers, employees or agents of the Trust
individually, but are binding only upon the assets and property of the Trust.
Any and all personal liability, either at common law or in equity, or by statute
or constitution, of every such trustee, shareholder, officer, employee or agent
for any breach by the Trust of any agreement, representation or warranty
hereunder is hereby expressly waived as a condition of and in consideration for
the execution of this Agreement by the Trust.
IN WITNESS WHEREOF, the Trust has caused this Agreement to be executed by
its duly authorized officers and its seal to be affixed hereto, and the
Investment Manger has caused this Agreement to be executed by one of its
partners all on the day and the year first above written.
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<PAGE>
LORD ABBETT LARGE-CAP GROWTH FUND
By:
------------------------
Chairman of the Board
------------------------
Assistant Secretary
LORD, ABBETT & CO.
By:
------------------------
A Partner
<PAGE>
DISTRIBUTION AGREEMENT
----------------------
AGREEMENT made this day of by and between LORD ABBETT LARGE-CAP GROWTH
FUND, a Delaware business trust (hereinafter called the "Trust"), and LORD
ABBETT DISTRIBUTOR LLC, a New York limited liability company (hereinafter called
the "Distributor").
WHEREAS, the Trust desires to enter into an agreement with the Distributor
for the purpose of finding purchasers for its securities which are issued in
various Series, and the Distributor is desirous of undertaking to perform these
services upon the terms and conditions hereinafter provided.
NOW, THEREFORE in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which acknowledged, it is agreed as
follows: 1. The Trust hereby appoints the Distributor its exclusive selling
agent for the sale of its shares of beneficial interest, of all classes, and all
other securities now or hereafter created or issued by the Trust (except notes
and other evidences of indebtedness issued for borrowed money), pursuant to
paragraph 2 of this Agreement, and the Trust agrees to issue (and upon request
of its shareholders make delivery of certificates for) its shares of beneficial
interest or other securities, subject to the provisions of its Declaration and
Agreement of Trust, to purchasers thereof and against payment of the
consideration to be received by the Trust therefor. The Distribution may appoint
one or more independent broker-dealers and the Distributor or any such
broker-dealer may transmit orders to the Trust at the office of the Trust's
Transfer Agent in Kansas City, Missouri, for acceptance at its office in New
York. Such shares of beneficial interest shall be registered in such name or
names and amounts as the Distributor or any such broker-dealer may request from
time to time, and all shares when so paid for and issued shall be fully paid and
non-assessable.
2. The Distributor will act as exclusive selling agent for the Trust in
selling shares of its stock.
The Distributor agrees to sell exclusively through independent
broker-dealers, or financial institutions exempt from registration as a
broker-dealer, and agrees to use its best efforts to find purchasers for shares
of stock of the Trust to be offered; provided
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<PAGE>
however, that the services of the Distributor under this Agreement are not
deemed to be exclusive, and nothing in this Agreement shall prevent Distributor,
or any officer, trustee, partner, member or employee thereof, from providing
similar services to other investment companies and other clients or to engage in
other activities.
The sales charge or premium relating to each class of shares of capital
stock of the Trust shall be determined by the Board of Trustees, but in no event
shall the sales charge or premium exceed the maximum rate permitted under
Federal regulations, and the amount to be retained by the Trust on any sale of
its shares of capital stock shall in each case be the net asset value thereof
(determined as provided in the Declaration and Agreement of Trust). From the
premium the Trust agrees to pay the Distributor a sales commission. The
Distributor may allow concessions from such sales commissions. In such event the
amount of the payment hereunder by the Trust to the Distributor shall be the
difference between the sales commission and any concessions which have been
allowed in accordance herewith. The sales commission payable to the Distributor
shall not exceed the premium.
Recognizing the need for providing an incentive to sell and providing
necessary and continuing informational and investment services to stockholders
of the Trust, the Trust or the Distributor (by agreement) may pay independent
broker-dealers periodic servicing and distribution fees based on percentages of
average annual net asset value of shareholder accounts of such broker-dealers.
The parties hereto incorporate by reference and agree to the terms and
provisions of the 12b-1 Plans of each class of shares of beneficial interest of
the Trust.
3. Notwithstanding anything herein to the contrary, sales and distributions
of the Trust's shares of beneficial interest may be upon any special terms as
approved by the Trust's Board of Trustees and discussed in the Trust's current
prospectus.
4. The independent broker-dealers who sell the Trust's shares may also
render other services to the Trust, such as executing purchases and sales of
portfolio securities, providing statistical information, and similar services.
The receipt of compensation for such other services shall in no way reduce the
amount of the sales commissions payable hereunder by the Trust to the
Distributor or the amount of the commissions, concessions or fees allowed.
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<PAGE>
5. The Distributor agrees to act as agent of the Trust in connection with
the repurchase of shares of beneficial interest of the Trust, or in connection
with exchanges of shares between investment companies having the same
Distributor, and the Trust agrees to advise the Distributor of the net asset
value of its shares of beneficial interest as frequently as may be mutually
agreed, and to accept shares duly tendered to the Distributor. The net asset
value shall be determined as provided in the Declaration and Agreement of Trust.
6. The Trust will pay all fees, costs, expenses and charges in connection
with the issuance, federal registration, transfer, redemption and repurchase of
its shares of beneficial interest, including without limitation, all fees,
costs, expenses and charges of transfer agents and registrars, all taxes and
other Governmental charges, the costs of qualifying or continuing the
qualifications of the Trust as broker-dealer, if required, and of registering
the shares of the Trust's shares of beneficial interest under the state blue sky
laws, or similar laws of any jurisdiction (domestic or foreign), costs of
preparation and mailing prospectuses to its shareholders, and any other cost,
expense or charge not expressly assumed by the Distributor hereunder. The Trust
will also furnish to the Distributor daily such information as may reasonably be
requested by the Distributor in order that it may know all of the facts
necessary to sell shares of the Trust.
7. The Distributor agrees to pay the cost of all sales literature and other
material which it may require or think desirable to use in connection with sale
of such shares, including the cost of reproducing the offering prospectus
furnished to it by the Trust, although the Distributor may obtain reimbursement
for such expenses through a 12b-1 Plan with respect to each class of shares of
beneficial interest of the Trust. The Trust agrees to use its best efforts to
qualify its shares for sale under the laws of such states of the United States
and such other jurisdictions (domestic or foreign) as the Distributor may
reasonably request.
If the Distributor pays for other expenses of the Trust or furnishes the
Trust with services, the cost of which is to be borne by the Trust under this
Agreement, the Distributor shall not be deemed to have waived its rights under
this Agreement to have the Trust pay for such expenses or provide such services
in the future.
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<PAGE>
8. The Distributor agrees to use its best efforts to find purchasers for
shares of beneficial interest of the Trust and to make reasonable efforts to
sell the same so long as in the judgement of the Distributor and a substantial
distribution can be obtained by reasonable efforts. The Distributor is not
authorized to act otherwise than in accordance with applicable laws.
9. Neither this Agreement nor any other transaction between the parties
hereto pursuant to this Agreement shall be invalidated or in any way affected by
the fact that any or all of the trustees, officers, stockholders, or other
representatives of the Trust are or may be interested in the Distributor, or any
successor or assignee thereof, or that any or all of the trustees, officers,
partners or other representatives of the Distributor are or may be interested in
the Trust, except as otherwise may be provided in the Investment Company Act of
1940.
10. The Distributor agrees that it will not sell for its own account to the
Trust any shares of beneficial interest, bonds or other securities of any kind
of character, except that if it shall own any of the Trust's shares of
beneficial interest or other securities, it may sell them to the Trust on the
same terms as any other holder might do.
11. Other than to abide by the provisions hereof and render the services
called for hereunder in good faith, the Distributor assumes no responsibility
under this Agreement and, having so acted, the Distributor shall not be held
liable or held accountable for any mistake of law or fact, or for any loss or
damage arising or resulting therefrom suffered by the Trust or any of the
stockholders, creditors, trustees, or officers of the Trust; provided, however,
that nothing herein shall be deemed to protect the Distributor against any
liability to the Trust or its shareholders by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties hereunder, or by
reason of the reckless disregard of its obligations and duties hereunder.
12. The Distributor agrees that it shall observe and be bound by all the
terms of the Declaration and Agreement of Trust, including any amendments
thereto, of the Trust which shall in any way limit or restrict or prohibit or
otherwise regulate any action of the Distributor.
13. This Agreement shall continue in force for two years from the date
hereof, and its renewable annually thereafter by specific approval of the Board
of Trustees or by
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<PAGE>
vote of a majority of the outstanding voting securities of the Trust; any such
renewal shall be approved by the vote of a majority of the trustees who are not
parties to this Agreement or interested persons of the Distributor or of the
Trust, cast in person at a meeting called for the purpose of voting on such
renewal.
This Agreement may be terminated without penalty at any time by the Board
of Trustees or by vote of a majority of the outstanding voting securities of the
Trust on 60 days' written. This Agreement shall automatically terminate in the
event of its assignment. The terms "interested persons," "assignment" and "vote
of a majority of the outstanding voting securities" shall have the same meaning
as those terms are defined in the Investment Company Act of 1940.
IN WITNESS WHEREOF, the Trust has caused this Agreement to be executed by
its duly authorized officers and its corporate seal to be affixed thereto, and
the Distributor has caused this Agreement to be executed by one of its partners
all on the day and year first above written.
LORD ABBETT LARGE-CAP GROWTH FUND
BY: ____________________________
Vice President
Attest:
------------------------
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By LORD, ABBETT & CO.
By: ______________________
A Partner
Managing Member
5
<PAGE>
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Large-Cap Growth Fund Plan
Class A Shares
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of , 1999 by and
between LORD ABBETT LARGE-CAP GROWTH FUND, a Delaware business trust (the
"Fund"), and LORD ABBETT DISTRIBUTOR LLC, a New York limited liability company
(the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's shares of beneficial
interest, including the Series' Class A shares (the "Shares") pursuant to the
Distribution Agreement between the Fund and the Distributor, dated as of , 1999
(the "Distribution Agreement").
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") with the Distributor, as permitted by Rule 12b-1 under the Act, pursuant
to which the Fund may make certain payments to the Distributor to be used by the
Distributor or paid to institutions and persons permitted by applicable law
and/or rules to receive such payments ("Authorized Institutions") in connection
with sales of Shares and/or servicing of accounts of shareholders holding
Shares.
WHEREAS, the Fund's Board of Trustees has determined that there is a
reasonable likelihood that the Plan will benefit the Fund and the holders of the
Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agreements with
Authorized Institutions (the "Agreements") which may provide for the payment to
such Authorized Institutions of distribution and service fees which the
Distributor receives from the Fund in order to provide additional incentives to
such Authorized Institutions (i) to sell Shares and (ii) to provide continuing
information and investment services to their accounts holding Shares and
otherwise to encourage their accounts to remain invested in the Shares.
2. The Fund also hereby authorizes the Distributor to use payments received
hereunder from the Fund in order to (a) finance any activity which is primarily
intended to result in the sale of Shares and (b) provide continuing information
and investment services to shareholder accounts not serviced by Authorized
Institutions receiving a service fee from the Distributor hereunder and
otherwise to encourage such accounts to remain invested in the Shares; provided
that (i) any payments referred to in the foregoing clause (a) shall not exceed
the distribution fee permitted to be paid at the time under paragraph 3 of this
Plan and shall be authorized by the Board of Trustees of the Fund by a vote of
the kind referred to in paragraph 10 of this Plan and (ii) any payments referred
to in clause (b) shall not exceed the service fee permitted to be paid at the
time under paragraph 3 of this Plan.
1
<PAGE>
3. The Fund is authorized to pay the Distributor hereunder for remittance
to Authorized Institutions and/or use by the Distributor pursuant to this Plan
(a) service fees and (b) distribution fees, each at an annual rate not to exceed
.25 of 1% of the average annual net asset value of Shares outstanding. The Board
of Trustees of the Fund shall from time to time determine the amounts, within
the foregoing maximum amounts, that the Series may pay the Distributor
hereunder. Any such fees (which may be waived by the Authorized Institutions in
whole or in part) may be calculated and paid quarterly or more frequently if
approved by the Board of Trustees of the Fund. Such determinations and approvals
by the Board of Trustees shall be made and given by votes of the kind referred
to in paragraph 10 of this Plan. Payments by holders of Shares to the Fund of
contingent deferred reimbursement charges relating to distribution fees paid by
the Series hereunder shall reduce the amount of distribution fees for purposes
of the annual 0.25% distribution fee limit. The Distributor will monitor the
payments hereunder and shall reduce such payments or take such other steps as
may be necessary to assure that (i) the payments pursuant to this Plan shall be
consistent with Rule 2830, subparagraphs (d)(2) and (5) of the Conduct Rules of
the National Association of Securities Dealers, Inc. with respect to investment
companies with asset-based sales charges and service fees, as the same may be in
effect from time to time and (ii) the Fund shall not pay with respect to any
Authorized Institution service fees equal to more than .25 of 1% of the average
annual net asset value of Shares sold by (or attributable to Shares or shares
sold by) such Authorized Institution and held in an account covered by an
Agreement.
4. The net asset value of the Shares shall be determined as provided in the
Declaration and Agreement of Trust of the Fund. If the Distributor waives all or
a portion of the fees which are to be paid by the Fund hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Fund pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Fund hereunder and shall provide to the Fund's Board of Trustees,
and the trustees shall review at least quarterly, a written report of the
amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
6. Neither this Plan nor any other transaction between the parties hereto
pursuant to this Plan shall be invalidated or in any way affected by the fact
that any or all of the trustees, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
trustees, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as may
otherwise be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's
best judgment and good faith efforts in rendering services under this Plan.
Other than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund, or any of the shareholders, creditors,
trustees, or officers of the Fund; provided
2
<PAGE>
however, that nothing herein shall be deemed to protect the Distributor against
any liability to the Fund or the shareholders by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties hereunder, or by
reason of the reckless disregard of its obligations and duties hereunder.
8. This Plan shall become effective upon the date hereof, and shall
continue in effect for a period of more than one year from that date only so
long as such continuance is specifically approved at least annually by a vote of
the Board of Trustees of the Fund, including the vote of a majority of the
trustees who are not "interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to this Plan, cast in person at a meeting called for the purpose of
voting on such renewal.
9. This Plan may not be amended to increase materially the amount to be
spent by the Fund hereunder above the maximum amounts referred to in paragraph 3
of this Plan without a shareholder vote in compliance with Rule 12b-1 and Rule
18f-3 under the Act as in effect at such time, and each material amendment must
be approved by a vote of the Board of Trustees of the Fund, including the vote
of a majority of the trustees who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreement related to this Plan, cast in person at a meeting called for
the purpose of voting on such amendment. Amendments to this Plan which do not
increase materially the amount to be spent by the Fund hereunder above the
maximum amounts referred to in paragraph 3 of this Plan may be made pursuant to
paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Trustees of the Fund, including the vote of a majority of the trustees who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Trustees of the Fund may, by such a vote, interpret this
Plan and make all determinations necessary or advisable for its administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the trustees of the Fund who are not
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
the Act as in effect at such time.
12. So long as this Plan shall remain in effect, the selection and
nomination of those trustees of the Fund who are not "interested persons" of the
Fund are committed to the discretion of such disinterested trustees. The terms
"interested persons," "assignment" and "vote of a majority of the outstanding
voting securities" shall have the same meanings as those terms are defined in
the Act.
13. The obligations of the Fund, including those imposed hereby, are not
personally binding upon, nor shall resort be had to the private property of, any
of the trustees, shareholders, officers, employees or agents of the Fund
individually, but are binding only upon the assets and
3
<PAGE>
property of the Fund. Any and all personal liability, either at common law or in
equity, or by statute or constitution, of every such trustee, shareholder,
officer, employee or agent for any breach of the Fund of any agreement,
representation or warranty hereunder is hereby expressly waived as a condition
of and in consideration for the execution of this Agreement by the Fund.
IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and on its behalf by its duly authorized
representative as of the date first above written.
LORD ABBETT LARGE-CAP GROWTH FUND
By:
-----------------------------
Vice President
ATTEST:
- ---------------------------
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By: LORD, ABBETT & CO.
-------------------------------
Managing Member
By:
-------------------------------
A Partner
<PAGE>
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Large-Cap Growth Fund Plan
Class B Shares
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of 1999, by and between
LORD ABBETT LARGE-CAP GROWTH FUND, a Delaware buisness trust (the "Fund"), and
LORD ABBETT DISTRIBUTOR LLC, a New York limited liability company (the
"Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's shares of capital stock
including the Fund's Class B shares (the "Shares") pursuant to the Distribution
Agreement between the Fund and the Distributor, dated as of the date hereof, and
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") with the Distributor, as permitted by Rule 12b-1 under the Act, pursuant
to which the Fund may make certain payments to the Distributor (a) to help
reimburse the Distributor for the payment of sales commissions to institutions
and persons permitted by applicable law and/or rules to receive such payments
("Authorized Institutions") in connection with sales of Shares and (b) for use
by the Distributor in rendering service to the Fund, including paying and
financing the payment of sales commissions, service fees, and other costs of
distributing and selling Shares as provided in paragraph 3 of this Plan, and
WHEREAS, the Fund's Board of Trustees has determined that there is a
reasonable likelihood that the Plan will benefit the Fund and the holders of the
Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agreements with
Authorized Institutions (the "Agreements") which may provide for the payment to
such Authorized Institutions of (a) sales commissions (particularly those paid
or financed with payments received hereunder) and (b) service fees received
hereunder in order to provide incentives to such Authorized Institutions (i) to
sell Shares and (ii) to provide continuing information and investment services
to their accounts holding Shares and otherwise to encourage their accounts to
remain invested in the Shares, respectively. The Distributor may, from time to
time, waive or defer payment of some fees payable at the time of the sale of
Shares provided for under paragraph 2 hereof.
2. Subject to possible reductions as provided below in this paragraph 2,
the Fund periodically, as determined by the Fund's Board of Trustees (in the
manner contemplated in paragraph 11), shall pay to the Distributor fees (a) for
services, at an annual rate not to exceed .25 of 1% of the average annual net
asset value of Shares outstanding and (b) for distribution, at an annual rate
not to exceed .75 of 1% of the average annual net asset value of Shares
outstanding. Payments will be based on Shares outstanding during any such
period. Shares outstanding include
<PAGE>
Shares issued for reinvested dividends and distributions. The Board of Trustees
of the Fund shall from time to time determine the amounts, within the foregoing
maximum amounts, that the Fund may pay the Distributor hereunder. Such
determinations by the Board of Trustees shall be made by votes of the kind
referred to in paragraph 11 of this Plan. The service fees mentioned in this
paragraph are for the purposes mentioned in clause (b) (ii) of paragraph 1 of
this Plan and the distribution fees mentioned in this paragraph are for the
purposes mentioned in clause (b) (i) of paragraph 1 of this Plan. The
Distributor will monitor the payments hereunder and shall reduce such payments
or take such other steps as may be necessary to assure that (x) the payments
pursuant to this Plan shall be consistent with Article III, Section 26,
subparagraphs (d)(2) and (5) of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. with respect to investment companies
with asset-based sales charges and service fees as the same may be in effect
from time to time and (y) the Fund shall not pay with respect to any Authorized
Institution service fees equal to more than .25 of 1% of the average annual net
asset value of Shares sold by (or attributable to shares sold by) such
Authorized Institution and held in an account covered by an Agreement.
3. The Distributor may use amounts received as distribution fees hereunder
from the Fund to engage directly or indirectly in financing any activity which
is primarily intended to result in the sale of Shares including, but not limited
to: (a) paying and financing the payment of commissions or other payments
relating to selling or servicing efforts and (b) paying interest, carrying, or
any other financing charges on any unreimbursed distribution or other expense
incurred in a prior fiscal year of the Fund whether or not such charges and
unreimbursed distribution or other expense are determined to be a legal
obligation of the Fund, in whole or in part, by the Fund's Board of Trustees.
The Fund's Board of Trustees (in the manner contemplated in paragraph 11 of this
Plan) shall approve the timing, categories and calculation of any payments under
this paragraph 3.
4.1. The Fund will pay each person which has acted as Distributor of Shares
its Allocable Portion (as such term is defined in paragraphs 13.1 through 13.3)
of the distribution fees with respect to Shares of the Fund in consideration of
its services as principal underwriter for the Shares of the Fund. The
distribution agreement pursuant to which a person acts or acted as principal
underwriter of the Shares is referred to as the "Applicable Distribution
Agreement." Such person shall be paid its Allocable Portion of such distribution
fees notwithstanding such person's termination as Distributor of the Shares,
such payments to be changed or terminated only (i) as required by a change in
applicable law or a change in accounting policy adopted by the Investment
Companies Committee of the AICPA and approved by FASB that results in a
determination by the Fund's independent accountants that any sales charges in
respect of such Fund, which are not contingent deferred sales charges and which
are not yet due and payable, must be accounted for by such Fund as a liability
in accordance with GAAP, each after the effective date of this Plan and
restatement; (ii) if in the sole discretion of the Board of Trustees, after due
consideration of such factors as they considered relevant, including the
transactions contemplated in any purchase and sale agreement entered into
between the Fund's Distributor and any commission financing entity, the Board of
Trustees determines (in the manner contemplated in paragraph 12), in the
exercise of its fiduciary duty, that this Plan and the payments thereunder must
be changed or terminated, notwithstanding the effect this action might have on
the Fund's ability to offer and sell Shares; or (iii) in connection with a
Complete Termination of this Plan, it being understood that for this purpose a
Complete Termination of this Plan occurs only if this Plan is terminated and the
Fund has discontinued the
2
<PAGE>
distribution of Shares or other back-end load or substantially similar classes
of shares; it being understood that such does not include Class C shares, i.e.,
those sold with a level load. The services rendered by a Distributor for which
that Distributor is entitled to receive its Allocable Portion of the
distribution fee shall be deemed to have been completed at the time of the
initial purchase of the Shares (as defined in the Applicable Distribution
Agreement) (whether of that Fund or another fund) taken into account in
computing that Distributor's Allocable Portion of the distribution fee.
4.2. The obligation of the Fund to pay the distribution fee shall terminate
upon the termination of this Plan in accordance with the terms hereof.
4.3. The right of a Distributor to receive payments hereunder may be
transferred by that Distributor (but not the distribution agreement itself or
that Distributor's obligations thereunder) in order to raise funds which may be
useful or necessary to perform its duties as principal underwriter, and any such
transfer shall be effective upon written notice from that Distributor to the
Fund. In connection with the foregoing, the Fund is authorized to pay all or
part of the distribution fee and/or contingent deferred sales charges with
respect to Shares (upon the terms and conditions set forth in the then current
Fund prospectus) directly to such transferee as directed by that Distributor.
4.4. As long as this Plan is in effect, the Fund shall not change the
manner in which the distribution fee is computed (except as may be required by a
change in applicable law or a change in accounting policy adopted by the
Investment Companies Committee of the AICPA and approved by FASB that results in
a determination by the Fund's independent accountants that any distribution fees
which are not yet due and payable, must be accounted for by such Fund as a
liability in accordance with GAAP).
5. The net asset value of the Shares shall be determined as provided in the
Declaration and Agreement of Trust of the Fund. If the Distributor waives all or
a portion of fees which are to be paid by the Fund hereunder, the Distributor
shall not be deemed to have waived its rights under this Agreement to have the
Fund pay such fees in the future.
6. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Fund hereunder and shall provide to the Fund's Board of Trustees,
and the Board of Trustees shall review, at least quarterly, a written report of
the amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made. Over the long-term the expenses incurred by the
Distributor for engaging directly or indirectly in financing any activity which
is primarily intended to result in the sale of Shares are likely to be greater
then the distribution fees receivable by the Distributor hereunder.
Nevertheless, there exists the possibility that for a short-term period the
Distributor may not have a sufficient amount of such expenses to warrant
reimbursement by receipt of such distribution fees. Although the Distributor
undertakes not to make a profit under this Plan, the Plan will be considered a
compensation plan (i.e. distribution fees will be paid regardless of expenses
incurred) in order to avoid the possibility of the Distributor not being able to
receive such distribution fees because of a temporary timing difference between
its incurring such expenses and the receipt of such distribution fees.
3
<PAGE>
7. Neither this Plan nor any other transaction between the Fund and the
Distributor, or any successor or assignee thereof, pursuant to this Plan shall
be invalidated or in any way affected by the fact that any or all of the
trustees, officers, shareholders, or other representatives of the Fund are or
may be "interested persons" of the Distributor, or any successor or assignee
thereof, or that any or all of the trustees, officers, partners, members or
other representatives of the Distributor are or may be "interested persons" of
the Fund, except as otherwise may be provided in the Act.
8. The Distributor shall give the Fund the benefit of the Distributor's
best judgment and good faith efforts in rendering services under this Plan.
Other than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund or any of its shareholders, creditors,
trustees or officers; provided however, that nothing herein shall be deemed to
protect the Distributor against any liability to the Fund or the Fund's
shareholders by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties hereunder, or by reason of the reckless disregard
of its obligations and duties hereunder.
9. This Plan shall become effective on the date hereof, and shall continue
in effect for a period of more than one year from such date only so long as such
continuance is specifically approved at least annually by a vote of the Board of
Trustees of the Fund, including the vote of a majority of the trustees who are
not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
renewal.
10. This Plan may not be amended to increase materially the amount to be
spent by the Fund hereunder without the vote of a majority of its outstanding
voting securities and each material amendment must be approved by a vote of the
Board of Trustees of the Fund, including the vote of a majority of the trustees
who are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
amendment.
11. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 10 of this Plan may be adopted by a vote
of the Board of Trustees of the Fund, including the vote of a majority of the
trustees who are not "interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to this Plan. The Board of Trustees of the Fund may, by such a vote,
interpret this Plan and make all determinations necessary or advisable for its
administration.
12. This Plan may be terminated at any time without the payment of any
penalty by (a) the vote of a majority of the trustees of the Fund who are not
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to this Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
13.1. For purposes of this Plan, the Distributor's "Allocable Portion" of
the distribution fee
4
<PAGE>
shall be 100% of such distribution fees unless or until the Fund uses a
principal underwriter other than the Distributor. Thereafter the Allocable
Portion shall be the portion of the distribution fee attributable to (i) Shares
of the Fund sold by the Distributor before there is a new principal underwriter,
plus (ii) Shares of the Fund issued in connection with the exchange of Shares of
another Fund in the Lord, Abbett Family of Funds, plus (iii) Shares of the Fund
issued in connection with the reinvestment of dividends and capital gains.
13.2. The Distributor's Allocable Portion of the distribution fees and the
contingent deferred sales charges arising with respect to Shares taken into
account in computing the Distributor's Allocable Portion shall be limited under
Article III, Sections 26(b) and (d) or other applicable regulations of the NASD
as if the Shares taken into account in computing the Distributor's Allocable
Portion themselves constituted a separate class of shares of the Fund.
13.3. The services rendered by the Distributor for which the Distributor is
entitled to receive the Distributor's Allocable Portion of the distribution fees
shall be deemed to have been completed at the time of the initial purchase of
the Shares (or shares of another Fund in the Lord Abbett Family of Funds) taken
into account in computing the Distributor's Allocable Portion. In addition, the
Fund will pay to the Distributor any contingent deferred sales charges imposed
on redemption of Shares (upon the terms and conditions set forth in the then
current Fund prospectus) taken into account in computing the Distributor's
Allocable Portion of the distribution fees. Notwithstanding anything to the
contrary in this Plan, the Distributor shall be paid its Allocable Portion of
the distribution fees regardless of the Distributor's termination as principal
underwriter of the Shares of the Fund, or any termination of this Agreement
other than in connection with a Complete Termination (as defined in paragraph
4.1) of the Plan as in effect on the date of execution of Distribution Agreement
with the new Distributor. Except as provided in paragraph 4.1 and in the
preceding sentence, the Fund's obligation to pay the distribution fees to the
Distributor shall be absolute and unconditional and shall not be subject to any
dispute, offset, counterclaim or defense whatsoever (it being understood that
nothing in this sentence shall be deemed a waiver by the Fund of its right
separately to pursue any claims it may have against the Distributor and to
enforce such claims against any assets of the Distributor (other than the assets
represented by the Distributor's rights to be paid its Allocable Portion of the
distribution fees and to be paid the contingent deferred sales charges).
14. So long as this Plan shall remain in effect, the selection and
nomination of those trustees of the Fund who are not "interested persons" of the
Fund are committed to the discretion of such disinterested trustees. The terms
"interested persons," "assignment" and "vote of a majority of the outstanding
voting securities" shall have the same meaning as those terms are defined in the
Act.
5
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and on its behalf by its duly authorized representative
as of the date first above written.
LORD ABBETT LARGE-CAP GROWTH FUND
By:
-----------------------------
Vice President
ATTEST:
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By: LORD, ABBETT & CO.
---------------------------
Managing Member
By:
---------------------------
A Partner
<PAGE>
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Large-Cap Growth Fund Plan
Class C Shares - Type II
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of , 1999 by and
between LORD ABBETT LARGE-CAP GROWTH FUND, a Delaware business trust (the
"Fund"), and LORD ABBETT DISTRIBUTOR LLC, a New York limited liability company
(the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's Class C shares of
capital stock (the "Shares") pursuant to the Distribution Agreement between the
Fund and the Distributor, dated as of the date hereof, and
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") for with the Distributor, as permitted by Rule 12b-1 under the Act,
pursuant to which the Fund may make certain payments to the Distributor for
payment to institutions and persons permitted by applicable law and/or rules to
receive such payments ("Authorized Institutions") in connection with sales of
Shares and for use by the Distributor as provided in paragraph 3 of this Plan,
and
WHEREAS, the Fund's Board of Trustees has determined that there is a
reasonable likelihood that the Plan will benefit the Fund and the holders of the
Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agreements with
Authorized Institutions (the "Agreements") which may provide for the payment to
such Authorized Institutions of distribution and service fees which the
Distributor receives from (or is reimbursed for by) the Fund in order to provide
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares. The Distributor may, from time to time, waive or defer payment of some
fees payable at the time of the sale of Shares provided for under paragraph 2
hereof.
2. Subject to possible reduction as provided below in this paragraph 2, the
Fund shall pay to the Distributor fees at each quarter-end after the sale of
Shares (a) for services, at an annual rate not to exceed .25 of 1% of the
average annual net asset value of Shares outstanding and (b) for distribution,
at an annual rate not to exceed .75 of 1% of the average annual net asset value
of Shares outstanding. For purposes of the payment of the fees above, (A) Shares
issued pursuant to an exchange for Class C shares of another series of the Fund
or another Lord Abbett-sponsored fund (or for shares of a fund acquired by the
Fund) will be credited with the time held from the initial purchase of such
other shares when determining how long Shares mentioned above have been
outstanding and (B) payments will be based on Shares outstanding during any such
quarter. Shares outstanding above include Shares issued for reinvested dividends
and distributions. The Board of Trustees of the Fund shall from time to time
determine the amounts, within the foregoing maximum amounts, that the Fund may
pay the Distributor hereunder. Such determinations by the Board of Trustees
shall be made by votes of the kind referred to in paragraph 10 of this Plan. The
service fees mentioned in this paragraph are for the purposes mentioned in
clause (ii) of paragraph 1 of this Plan and the distribution fees mentioned in
this paragraph are for the purposes mentioned
<PAGE>
in clause (i) of paragraph 1 and the second sentence of paragraph 3 of this
Plan. The Distributor will monitor the payments hereunder and shall reduce such
payments or take such other steps as may be necessary to assure that (x) the
payments pursuant to this Plan shall be consistent with Rule 2830, subparagraphs
(d)(2) and (5) of the Conduct Rules of the National Association of Securities
Dealers, Inc. with respect to investment companies with asset-based sales
charges and service fees as the same may be in effect from time to time and (y)
the Fund shall not pay with respect to any Authorized Institution service fees
equal to more than .25 of 1% of the average annual net asset value of Shares
sold by (or attributable to shares sold by) such Authorized Institution and held
in an account covered by an Agreement.
3. The Distributor may use amounts received as distribution fees hereunder
from the Fund to finance any activity which is primarily intended to result in
the sale of Shares including, but not limited to, commissions or other payments
relating to selling or servicing efforts. The Fund's Board of Trustees (in the
manner contemplated in paragraph 10 of this Plan) shall approve the timing,
categories and calculation of any payments under this paragraph 3 other than
those referred to in the foregoing sentence.
4. The net asset value of the Shares shall be determined as provided in the
Declaration and Agreement of Trust of the Fund. If the Distributor waives all or
a portion of fees which are to be paid by the Fund hereunder, the Distributor
shall not be deemed to have waived its rights under this Agreement to have the
Fund pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Fund hereunder and shall provide to the Fund's Board of Trustees,
and the Board of Trustees shall review, at least quarterly, a written report of
the amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
6. Neither this Plan nor any other transaction between the parties hereto
pursuant to this Plan shall be invalidated or in any way affected by the fact
that any or all of the trustees, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
trustees, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as otherwise
may be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's
best judgment and good faith efforts in rendering services under this Plan.
Other than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund or any of its shareholders, creditors,
trustees or officers of the Fund; provided however, that nothing herein shall be
deemed to protect the Distributor against any liability to the Fund or the
Fund's shareholders by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or by reason of the
reckless disregard of its obligations and duties hereunder.
<PAGE>
8. This Plan shall become effective on the date hereof, and shall continue
in effect for a period of more than one year from such date only so long as such
continuance is specifically approved at least annually by a vote of the Board of
Trustees of the Fund, including the vote of a majority of the trustees who are
not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
renewal.
9. This Plan may not be amended to increase materially the amount to be
spent by the Fund hereunder without the vote of a majority of its outstanding
voting securities and each material amendment must be approved by a vote of the
Board of Trustees of the Fund, including the vote of a majority of the trustees
who are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
amendment.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 of this Plan may be adopted by a vote
of the Board of Trustees of the Fund, including the vote of a majority of the
trustees who are not "interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to this Plan. The Board of Trustees of the Fund may, by such a vote,
interpret this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of any
penalty by (a) the vote of a majority of the trustees of the Fund who are not
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to this Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those trustees of the Fund who are not "interested persons" of the
Corporation are committed to the discretion of such disinterested trustees. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meaning as those terms are
defined in the Act.
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on its behalf by its duly authorized representative as
of the date first above written.
LORD ABBETT LARGE-CAP GROWTH FUND
By:
-------------------------------
Vice President
ATTEST:
- ---------------------------
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By: LORD, ABBETT & CO.
-------------------------------
Managing Member
By:
-------------------------------
A Partner
<PAGE>
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Large-Cap Growth Fund Plan
Pension Class
-------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of 1999, by and between
LORD ABBETT LARGE-CAP GROWTH FUND, a Delaware business trust (the "Fund"), on
behalf of its Pension Class (the "Class"), and LORD ABBETT DISTRIBUTOR LLC, a
New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's shares of beneficial
interest, including the Class pursuant to the Distribution Agreement between the
Fund and the Distributor, dated as of the date hereof, and
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") for the Class with the Distributor, as permitted by Rule 12b-1 under the
Act, pursuant to which the Class may make certain payments to the Distributor
for payment to institutions and persons permitted by applicable law and/or rules
to receive such payments ("Authorized Institutions") in connection with sales of
Shares and for use by the Distributor as provided in paragraph 3 of this Plan,
and
WHEREAS, the Fund's Board of Trustees has determined that there is a
reasonable likelihood that the Plan will benefit the Class and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agreements with
Authorized Institutions (the "Agreements") which may provide for the payment to
such Authorized Institutions of distribution and service fees which the
Distributor receives from the Class in order to provide incentives to such
Authorized Institutions (i) to sell Shares and (ii) to provide continuing
information and investment services to their accounts holding Shares and
otherwise to encourage their accounts to remain invested in the Shares. The
Distributor may, from time to time, waive or defer payment of some fees payable
at the time of the sale of Shares provided for under paragraph 2 hereof.
2. Subject to possible reduction as provided below in this paragraph 2, the
Class shall pay to the Distributor fees at each quarter-end (a) for services, at
an annual rate not to exceed .20% of 1% of the average annual net asset value of
Shares outstanding for the quarter or more and (b) for distribution, at an
annual rate not to exceed .25 of 1% of the average annual net asset value of
Shares outstanding for the quarter or more. For purposes of the quarter-end fee
payments above (A) Shares issued pursuant to an exchange for shares of another
series of the Fund or another Lord Abbett-sponsored fund (or for shares of a
fund acquired by the Fund) will be credited with the time held from the initial
purchase of such other shares when determining how long Shares mentioned in
clauses (a) and (b) have been outstanding and (B) payments will be based on
Shares outstanding during any such quarter. Shares outstanding in clauses (a)
and (b) above include Shares issued for reinvested dividends and distributions
that have been outstanding for the quarter or more.
The Board of Trustees of the Fund shall from time to time determine the
amounts and the time of payments (such as, at the time of sale, quarterly or
otherwise), within the foregoing maximum amounts, that the Class may pay the
Distributor hereunder. Such determinations by the Board of Trustees shall be
made by votes of the kind referred to in paragraph 10 of this Plan. The service
fees mentioned in
<PAGE>
this paragraph are for the purposes mentioned in clause (ii) of paragraph 1 of
this Plan and the distribution fees mentioned in this paragraph are for the
purposes mentioned in clause (i) of paragraph 1 and the second sentence of
paragraph 3 of this Plan. The Distributor will monitor the payments hereunder
and shall reduce such payments or take such other steps as may be necessary to
assure that (x) the payments pursuant to this Plan shall be consistent with Rule
2830, subparagraphs (d)(2) and (5) of the Conduct Rules of the NASD Regulation,
Inc. with respect to investment companies with asset-based sales charges and
service fees as the same may be in effect from time to time and (y) the Class
shall not pay with respect to any Authorized Institution service fees equal to
more than .20% of 1% of the average annual net asset value of Shares sold by (or
attributable to shares sold by) such Authorized Institution and held in an
account covered by an Agreement.
3. Within the foregoing maximum amounts, the Distributor may use amounts
received as distribution fees hereunder from the Class to finance any activity
that is primarily intended to result in the sale of Shares including, but not
limited to, commissions or other payments relating to selling or servicing
efforts. Without limiting the generality of the foregoing, the Distributor may
apply amounts authorized by the Fund's Board of Trustees designated as the
distribution fee referred to in clause (b) of paragraph 2 to expenses incurred
by the Distributor if such expenses are primarily intended to result in the sale
of Shares. The Fund's Board of Trustees (in the manner contemplated in paragraph
10 of this Plan) shall approve the timing, categories and calculation of any
payments under this paragraph 3 other than those referred to in the foregoing
sentence.
4. The net asset value of the Shares shall be determined as provided in the
Declaration and Agreement of Trust of the Fund. If the Distributor waives all or
a portion of fees which are to be paid by the Class hereunder, the Distributor
shall not be deemed to have waived its rights under this Agreement to have the
Fund pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Class hereunder and shall provide to the Fund's Board of
Trustees, and the Board of Trsutees shall review, at least quarterly, a written
report of the amounts so expended pursuant to this Plan and the purposes for
which such expenditures were made.
6. Neither this Plan nor any other transaction between the parties hereto
pursuant to this Plan shall be invalidated or in any way affected by the fact
that any or all of the trsutees, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
trustees, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as otherwise
may be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's
best judgment and good faith efforts in rendering services under this Plan.
Other than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund, the Class or any of the shareholders,
creditors, trustees or officers of the Fund; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Fund or the Class' shareholders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or by reason of the
reckless disregard of its obligations and duties hereunder.
8. This Plan shall become effective on the date hereof, and shall continue
in effect for a period of more than one year from such date only so long as such
continuance is specifically approved at least annually by a vote of the Board of
Trustees of the Fund, including the vote of a majority of the trustees
<PAGE>
who are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
renewal.
9. This Plan may not be amended to increase materially the amount to be
spent by the Class hereunder without the vote of a majority of its outstanding
voting securities and each material amendment must be approved by a vote of the
Board of Trsutees of the Fund, including the vote of a majority of the trustees
who are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
amendment.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 of this Plan may be adopted by a vote
of the Board of Trustees of the Fund, including the vote of a majority of the
trustees who are not "interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to this Plan. The Board of Trustees of the Fund may, by such a vote,
interpret this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of any
penalty by (a) the vote of a majority of the trustees of the Fund who are not
"interested persons" of the Fund and have no trustees or indirect financial
interest in the operation of this Plan or in any agreement related to this Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
the Act as in effect at such time. 12. So long as this Plan shall remain in
effect, the selection and nomination of those trustees of the Fund who are not
"interested persons" of the Fund are committed to the discretion of such
disinterested trustees. The terms "interested persons," "assignment" and "vote
of a majority of the outstanding voting securities" shall have the same meaning
as those terms are defined in the Act.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and on its behalf by its duly authorized representative
as of the date first above written.
LORD ABBETT LARGE-CAP GROWTH FUND
By:
------------------------------
Vice President
ATTEST:
- -------------------
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By: LORD, ABBETT & CO.
--------------------------------
Managing Member
By:
--------------------------------
A Partner
<PAGE>
Amended and Restated Plans as of September 30, 1999
Pursuant to Rule 18f-3(d)
under the Investment Company Act of 1940
(As adopted August 15, 1996)
Rule 18f-3 (the "Rule") under the Investment Company Act of 1940, as
amended (the "1940 Act"), requires that the Board of Directors or Trustees of an
investment company desiring to offer multiple classes pursuant to the Rule adopt
a plan setting forth the separate arrangement and expense allocation of each
class, and any related conversion features or exchange privileges. This document
constitutes an amended and restated plan (individually, a "Plan" and
collectively, the "Plans") of each of the investment companies, or series
thereof, listed on Schedule A attached hereto (each, a "Fund"). The Plan of any
Fund is subject to amendment by action of the Board of Directors or Trustees
(the "Board") of such Fund and without the approval of shareholders of any
class, to the extent permitted by law and by the governing documents of such
Fund.
The Board, including a majority of the non-interested Board members, has
determined that the following separate arrangement and expense allocation, and
the related conversion features, if any, and exchange privileges, of each class
of each Fund are in the best interest of each class of each Fund individually
and each Fund as a whole.
1. CLASS DESIGNATION. Shares of all Funds except Lord Abbett Series Fund, Inc.
shall be divided into Class A, Class B, Class C, Class Y and Class P (Pension
Class) shares as indicated for each Fund on Schedule A attached hereto. In the
case of the Lord Abbett Series Fund - Growth & Income Portfolio, shares shall be
divided into Variable Contract Class shares and P Class shares as indicated on
Schedule A.
2. SALES CHARGES AND DISTRIBUTION AND SERVICE FEES.
(a) Initial Sales Charge. Class A shares will be traditional front-end
sales charge shares, offered at their net asset value ("NAV") plus a sales
charge in the case of each Fund as described in such Fund's prospectus as from
time to time in effect.
Class B shares, Class C shares, Class Y shares, Variable Contract Class
shares and P Class shares will be offered at their NAV without an initial sales
charge.
(b) Service and Distribution Fees. In respect of the Class A shares, Class
B shares, Class C shares, Variable Contract Class shares and P Class shares,
each Fund will pay service and/or distribution fees under plans from time to
time in effect adopted for such classes pursuant to Rule 12b-1 under the 1940
Act (each, a "12b-1 Plan").
Pursuant to a 12b-1 Plan with respect to the Class A shares, if
effective, each Fund will generally pay (i) at the time such shares are sold, a
one-time distribution fee of up to 1% of the NAV of the shares sold in the
amount of $1 million or more, including sales qualifying at such level under
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<PAGE>
the rights of accumulation and statement of intention privileges, or to
retirement plans with 100 or more eligible employees, as described in the Fund's
prospectus as from time to time in effect, (ii) a continuing distribution fee at
an annual rate of 0.10% of the average daily NAV of the Class A share accounts
of dealers who meet certain sales and redemption criteria, and (iii) a
continuing service fee at an annual rate not to exceed 0.25% of the average
daily NAV of the Class A shares. The Board will have the authority to increase
the distribution fees payable under such 12b-1 Plan by a vote of the Board,
including a majority of the independent directors thereof, up to an annual rate
of 0.25% of the average daily NAV of the Class A shares. The effective dates of
various of the 12b-1 Plans for the Class A shares are based on achievement by
the Funds of specified total net assets for the Class A shares of such Funds.
Pursuant to a 12b-1 Plan with respect to the Class B shares, if effective,
each Fund will generally pay a continuing annual fee of up to 1% of the average
annual NAV of such shares then outstanding (each fee comprising .25% in service
fee and .75% in distribution fee).
Pursuant to a 12b-1 Plan with respect to the Class C shares, if effective,
each Fund will generally pay a one-time service and distribution fee at the time
such shares are sold of up to 1% of their NAV and a continuing annual fee,
commencing 12 months after the first anniversary of such sale, of up to 1% of
the average annual NAV of such shares then outstanding (each fee comprising .25%
in service fees and .75% in distribution fees).
Pursuant to a Type II 12b-1 Plan with respect to the Class C shares, if
effective, each Fund will generally pay a continuing annual fee, commencing
after the sale of shares, of up to 1% of the average annual NAV of such shares
then outstanding (each fee comprising .25% in service fees and .75% in
distribution fees).
Pursuant to a 12b-1 Plan with respect to the Variable Contract Class, if
operational, the Growth & Income Portfolio will generally pay a continuing
annual fee of up to .15% of the average annual NAV of such shares then
outstanding to reimburse an insurance company for its expenditure related to the
distribution of such shares which expenditures are not also reimbursable
pursuant to fees paid under the variable contract issued by such insurance
company.
Pursuant to a 12b-1 Plan with respect to the P Class shares, if
operational, the Growth & Income Portfolio will generally pay a continuing
annual fee of .45% of the average annual NAV of such shares then outstanding.
The Board will have the authority to increase the distribution fees payable
under such 12b-1 Plan by a vote of the Board, including a majority of the
independent directors thereof, up to an annual rate of 0.75% of the average
daily NAV of such shares (consisting of distribution and service fees, at
maximum annual rates not exceeding 0.50 and 0.25 of 1%, respectively).
The Class Y shares do not have a Rule 12b-1 Plan.
(c) Contingent Deferred Sales Charges ("CDSC"). Subject to some exceptions,
Class A shares subject to the one-time sales distribution fee of up to 1% under
the Rule 12b-1 Plan for the
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<PAGE>
Class A shares will be subject to a CDSC equal to 1% of the lower of the cost or
the NAV of such shares if the shares are redeemed for cash on or before the end
of the twenty-fourth month after the month in which the shares were purchased.
Class B shares will be subject to a CDSC ranging from 5% to 1% of the lower
of the cost or the NAV of the shares, if the shares are redeemed for cash before
the sixth anniversary of their purchase. The CDSC for the Class B shares may be
waived for certain transactions. Class C shares will be subject to a CDSC equal
to 1% of the lower of the cost or the NAV of the shares if the shares are
redeemed for cash before the first anniversary of their purchase.
Neither the Class Y, Variable Contract Class nor the Class P shares will be
subject to a CDSC.
3. Class-Specific Expenses. The following expenses shall be allocated, to the
extent such expenses can reasonably be identified as relating to a particular
class and consistent with Revenue Procedure 96-47, on a class-specific basis:
(a) fees under a 12b-1 Plan applicable to a specific class (net of any CDSC paid
with respect to shares of such class and retained by the Fund) and any other
costs relating to implementing or amending such Plan, including obtaining
shareholder approval of such Plan or any amendment thereto; (b) transfer and
shareholder servicing agent fees and shareholder servicing costs identifiable as
being attributable to the particular provisions of a specific class; (c)
stationery, printing, postage and delivery expenses related to preparing and
distributing materials such as shareholder reports, prospectuses and proxy
statements to current share holders of a specific class; (d) Securities and
Exchange Commission registration fees incurred by a specific class; (e) Board
fees or expenses identifiable as being attributable to a specific class; (f)
fees for outside accountants and related expenses relating solely to a specific
class; (g) litigation expenses and legal fees and expense relating solely to a
specific class; (h) expenses incurred in connection with shareholders meetings
as a result of issues relating solely to a specific class and (i) other expenses
relating solely to a specific class, provided, that advisory fees and other
expenses related to the management of a Fund's assets (including custodial fees
and tax-return preparation fees) shall be allocated to all shares of such Fund
on the basis of NAV, regardless of whether they can be specifically attributed
to a particular class. All common expenses shall be allocated to shares of each
class at the same time they are allocated to the shares of all other classes.
All such expenses incurred by a class of shares will be charged directly to the
net assets of the particular class and thus will be borne on a pro rata basis by
the outstanding shares of such class. For all Funds, with the exception of
Series Fund - Growth & Income Portfolio, Blue Sky expenses will be treated as
common expenses. In the case of Series Fund - Growth & Income Portfolio, Blue
Sky expenses will be allocated entirely to the P Class, as the Variable Contract
Class of Series Fund Growth & Income Portfolio has no Blue Sky expenses.
4. Income and Expense Allocations. Income, realized and unrealized capital
gains and losses and expenses not allocated to a class as provided above shall
be allocated to each class on the basis of the net assets of that class in
relation to the net assets of the Fund, except that, in the case of each daily
dividend Fund, income and expenses shall be allocated on the basis of relative
net assets (settled shares).
3
<PAGE>
5. Dividends and Distributions. Dividends and Distributions paid by a Fund on
each class of its shares, to the extent paid, will be calculated in the same
manner, will be paid at the same time, and will be in the same amount, except
that the amount of the dividends declared and paid by a particular class may be
different from that paid by another class because of expenses borne exclusively
by that class.
6. Net Asset Values. The NAV of each share of a class of a Fund shall be
determined in accordance with the Articles of Incorporation or Declaration of
Trust of such Fund with appropriate adjustments to reflect the allocations of
expenses, income and realized and unrealized capital gains and losses of such
Fund between or among its classes as provided above.
7. Conversion Features. The Class B shares will automatically convert to Class
A shares 8 years after the date of purchase. Such conversion will occur at the
relative NAV per share of each Class without the imposition of any sales charge,
fee or other charge. When Class B shares convert, any other Class B shares that
were acquired by the shareholder by the reinvestment of dividends and
distributions will also convert to Class A shares on a pro rata basis. The
conversion of Class B shares to Class A shares after 8 years is subject to the
continuing availability of a private letter ruling from the Internal Revenue
Service or an opinion of counsel to the effect that the conversion does not
constitute a taxable event for the Class B shareholder under Federal income tax
law. If such a revenue ruling or opinion is no longer available, the automatic
conversion feature may be suspended, in which event no further conversions of
Class B shares would occur while such suspension remained in effect.
Subject to amendment by the Board, Class A shares and Class C shares shall
not be subject to any automatic conversion feature.
8. Exchange Privileges. Except as set forth in a Fund's prospectus as from
time to time in effect, shares of any class of such Fund may be exchanged, at
the holder's option, for shares of the same class of another Fund, or other Lord
Abbett-sponsored fund or series thereof, without the imposition of any sales
charge, fee or other charge.
Each Plan is qualified by and subject to the terms of the then current
prospectus for the applicable Fund; provided, however, that none of the terms
set forth in any such prospectus shall be inconsistent with the terms contained
herein. The prospectus for each Fund contains additional information about that
Fund's classes and its multiple-class structure.
Each Plan is being adopted for a Fund with the approval of, and all
material amendments thereto must be approved by, a majority of the Board of such
Fund, including a majority of the Board who are not interested persons of the
Fund.
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<PAGE>
As of September 30, 1999
The Lord Abbett - Sponsored Funds
ESTABLISHING MULTI-CLASS STRUCTURES
CLASSES
-------
Lord Abbett Affiliated Fund, Inc. A, B, C, P, Y
Lord Abbett Bond-Debenture Fund, Inc. A, B, C, P, Y
Lord Abbett Developing Growth Fund, Inc. A, B, C, P, Y
Lord Abbett Mid-Cap Value Fund, Inc. A, B, C, P, Y
Lord Abbett Global Fund, Inc.
Equity Series A, B, C, P
Income Series A, B, C, P
Lord Abbett Investment Trust
Balanced Series A, B, C, P
High Yield Fund A, B, C, P, Y
Limited Duration U.S. Government
Securities Series A, C, P
U.S. Government Securities Series A, B, C, P
Core Series Y
Strategic Core Fund Y
Lord Abbett Large-Cap Growth Fund A, B, C, P
Lord Abbett Securities Trust
Growth & Income Trust A, B, C, P
International Series A, B, C, P, Y
World Bond-Debenture Series A, B, C, P
Alpha Series A, B, C, P
Lord Abbett Large-Cap International Fund A, B, C
Lord Abbett Micro-Cap Growth Fund Y
Lord Abbett Micro-Cap Value Fund Y
Lord Abbett Tax-Free Income Fund, Inc.
California Series A, C, P
National Series A, B, C, P
New York Series A, C, P
Texas Series A, P
New Jersey Series A, P
Connecticut Series A, P
Missouri Series A, P
5
<PAGE>
Hawaii Series A, P
Washington Series A, P
Minnesota Series A, P
Lord Abbett Tax-Free Income Trust
Florida Series A, C, P
Pennsylvania Series A, P
Michigan Series A, P
Georgia Series A, P
Lord Abbett U.S. Government Securities
Money Market Fund, Inc. A, B, C
Lord Abbett Research Fund, Inc.
Large-Cap Series A, B, C, P, Y
Growth Opportunities Fund A, B, C, P, Y
Small-Cap Series A, B, C, P, Y
Lord Abbett Series Fund
Growth & Income Portfolio VC, P
Lord Abbett Equity Fund
1990 Series
Lord, Abbett & Co.
----------------
Paul A. Hilstad
Partner
LORD ABBETT LARGE-CAP GROWTH FUND
By: _________________
Lawrence H. Kaplan
6
<PAGE>
Vice President
DATED:
7
