As filed with the Securities and Exchange Commission on December 28, 1999
Securities Act File No. 333-88103
Investment Company Act File No. 811-9597
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. 1 [X]
Post-Effective Amendment No.
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 1 [X]
(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 Company Act of 1940, the
Registrant hereby elects to register an indefinite number of shares of
beneficial interest.
<PAGE>
LORD ABBETT
LARGE-CAP GROWTH FUND
PROSPECTUS
December 28, 1999
[LOGO]
LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of
this prospectus. Any representation to the contrary is a criminal offense.
Class P shares of the fund are neither offered to the general public nor
are available in all states. Please call 800-821-5129 for further
information.
<PAGE>
Table of Contents
Page
The Fund
What you should know about the fund
Goal/Principal Strategy 2
Main Risks 2
Performance 3
Fees and Expenses 3
Your Investment
Information for managing your fund account
Purchases 4
Sales Compensation 6
Opening Your Account 7
Redemptions 8
Distributions and Taxes 8
Services For Fund Investors 9
Management 10
For More Information
How to learn more about the fund
Other Investment Techniques 12
Glossary of Shaded Terms 13
Compensation For Your Dealer 15
How to learn more about the fund
and other Lord Abbett funds
Back Cover
<PAGE>
The Fund
Goal / Principal Strategy
The fund's investment objective is long-term capital growth.
Under normal circumstances, the fund will invest at least 65% of its total
assets in equity securities of large, established companies with market
capitalizations of at least $8 billion. To identify attractive companies
for investment, the fund uses a "bottom up" investment research approach
that seeks to identify individual companies with expected earnings growth
potential and consistency that may not be recognized by the market at
large. This approach is based on the following steps:
o We identify large-capitalization companies with at least a 10%
consistent, sustainable growth rate;
o We focus on those companies demonstrating a positive historical
performance as well as favorable earnings prospects for the future;
o We focus on companies also demonstrating successful strategic business
plan selection, strategy and execution, reflecting strong management
leadership; and
o We focus on companies demonstrating leadership positions within their
industries.
The fund maintains a long-term investment approach, generally expecting to
hold stocks for an average of over three years. This strategy supports our
style of reaping the rewards of successful, well-run companies and
investing in seasoned managements for the long term. The fund may take a
temporary defensive position by investing some of its assets, most likely
not more than 30%, 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 fund is subject to the general risks and considerations associated with
equity investing, as well as the particular risks associated with growth
stocks. The value of your investment will fluctuate in response to
movements in the stock market in general and to the changing prospects of
individual companies in which the fund invests. Growth stocks may grow
faster than other stocks and may be more volatile. In addition, if the
fund's assessment of a company's potential for growth is wrong, the price
of the company's stock may decrease below the price at which the fund
purchased the stock. An investment in the fund is not a bank deposit and is
not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency. The fund is not a complete investment program
and may not be appropriate for all investors. You could lose money by
investing in the fund.
We or the fund refers to the Lord Abbett Large-Cap Growth Fund.
About the fund. The fund is a professionally managed portfolio primarily holding
securities purchased with the pooled money of investors. It strives to reach its
stated goal, although as with all mutual funds, it cannot guarantee results.
Large companies are established companies that are considered "known
quantities." Large companies often have the resources to weather economic shifts
although they can be slower to innovate than small companies.
Bottom-up research looks for high-performing stocks of individual companies
before considering the impact of economic trends. Companies might be identified
from investment research analysis or personal knowledge of their products and
services. This approach considers that a company can do well even if it is part
of an industry that, as a whole, is not performing well.
You should read this entire prospectus, including "Other Investment Techniques,"
which concisely describes the other investment strategies used by the fund and
their risks.
2 The Fund
<PAGE>
Large-Cap Growth Fund Symbols: Class A -
Class B -
Class C -
Class P -
Performance
The fund does not show any performance because it has not completed a full
calendar year of operations.
Fees and expenses
This table describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
Fee Table
<TABLE>
<CAPTION>
Class A Class B Class C Class P
<S> <C> <C> <C> <C>
Shareholder Fees (Fees paid directly
from your investment)
- --------------------------------------------------------------------------------
Maximum Sales Charge on Purchases
- --------------------------------------------------------------------------------
(as a % of offering price) 5.75% none none none
- --------------------------------------------------------------------------------
Maximum Deferred Sales Charge 1.00%(1) 5.00%(2) 1.00% none
- --------------------------------------------------------------------------------
Annual Fund Operating Expenses (Expenses
deducted from fund assets) (as a % of average
net assets)(3)
- --------------------------------------------------------------------------------
Management Fees (See "Management")0.75% 0.75% 0.75% 0.75%
Distribution (12b-1) and Service
Fees(4) 0.35% 1.00% 1.00% 0.45%
Other Expenses 0.35% 0.35% 0.35% 0.35%
Total Annual Fund Operating
Expenses 1.45% 2.10% 2.10% 1.55%
(1) A contingent deferred sales charge of 1.00% may be assessed on certain
redemptions of class A shares made within 24 months following any purchases
made without a sales charge.
(2) Class B shares will convert to class A shares on the eighth anniversary of
your original purchase of class B shares.
(3) The annual operating expenses are based on estimated expenses for the
current fiscal year.
(4) Because 12b-1 fees are paid out on an on-going basis, over time they will
increase the cost of your investment and may cost you more than paying
other types of sales charges.
</TABLE>
Example
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. This Example, like that in
other funds' prospectuses, assumes that you invest $10,000 in the fund at
maximum sales charge, if any, for the time periods indicated and then redeem all
of your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs (including any applicable contingent deferred sales
charges) would be:
SHARE CLASS 1 YEAR 3 YEARS
Class A shares $714 $1,007
- --------------------------------------------------------------------------------
Class B shares $713 $ 958
- --------------------------------------------------------------------------------
Class C shares $313 $ 658
Class P shares $158 $ 490
You would pay the following expenses if you
did not redeem your shares:
Class A shares $714 $1,007
- --------------------------------------------------------------------------------
Class B shares $213 $ 658
Class C shares $213 $ 658
- --------------------------------------------------------------------------------
Class P shares $158 $ 490
Management fees are payable to Lord, Abbett & Co. ("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
service fees and professional fees.
The Fund 3
<PAGE>
Purchases
The fund offers in this prospectus four classes of shares: classes A, B ,C,
and P, each with different expenses and dividends. You may purchase shares
at the net asset value ("NAV") per share determined after we receive and
accept 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 in the case of the class B and C shares although
there is a contingent deferred sales charge ("CDSC") 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 purchase 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.
- --------------------------------------------------------------------------------
Share Classes
- --------------------------------------------------------------------------------
Class A o Normally offered with a front-end sales charge
Class B o Normally no front-end sales charge, however, a CDSC 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
o asset-based sales charge of 1.00% - See "Sales Compensation"
Class C o no front-end sales charge o higher annual expenses than class A
shares
o a CDSC is applied to shares sold prior to the first anniversary
of purchase Class P
o available to certain pension or retirement plans pursuant to
Mutual Fund Fee Based Program
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 5.75% 6.10% .9425
- --------------------------------------------------------------------------------
$50,000 to $99,999 4.75% 4.99% .9525
- --------------------------------------------------------------------------------
$100,000 to $249,999 3.95% 4.11% .9605
- --------------------------------------------------------------------------------
$250,000 to $499,999 2.75% 2.83% .9725
- --------------------------------------------------------------------------------
$500,000 to $999,999 1.95% 1.99% .9805
- --------------------------------------------------------------------------------
$1,000,000 and over No Sales Charge 1.0000
- --------------------------------------------------------------------------------
</TABLE>
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. Purchases and sales of fund shares are executed at the
NAV next determined after the fund receives and accepts 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.
4 Your Investment
<PAGE>
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 may apply the value 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 may 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 may be included in a
statement of intention.
For more information on eligibility for these privileges, read the
applicable sections in the attached application.
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
Abbett-sponsored 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 Fee Based Program
o purchases by trustees or custodians of any pension or profit sharing
plan, or payroll deduction IRA for 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 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 the following
conditions:
o benefit payments under Retirement Plans such as 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
Retirement Plans include employer-sponsored retirement plans under the Internal
Revenue Code, excluding Individual Retirement Accounts.
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
Lord Abbett Distributor LLC ("Lord Abbett Distributor") acts as agent for the
fund to work with investment professionals that buy and/or sell shares of the
fund on behalf of their clients. Generally, Lord Abbett Distributor does not
sell fund shares directly to investors.
Benefit Payment Documentation.
(class A CDSC 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>
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 the day on Contingent Deferred Sales Charge
which the purchase order on redemption (as % of amount
was accepted subject to charge)
On Before
- --------------------------------------------------------------------------------
1st 5.0%
1st 2nd 4.0%
2nd 3rd 3.0%
3rd 4th 3.0%
4th 5th 2.0%
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.
The class B share CDSC generally will be waived under the following
conditions:
o benefit payments under Retirement Plans such as 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
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" 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 Fee Based
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.
Sales Compensation
As part of its plan for distributing shares, the fund and Lord Abbett
Distributor pay sales and service compensation to Authorized Institutions
that sell the fund's shares and service its shareholder accounts.
Sales compensation originates from two sources, as shown in the table "Fees
and Expenses": sales charges which are paid directly by shareholders; and
12b-1 distribution and service fees
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, which-ever 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 one year or more (class C)
3. shares held the longest before the sixth anniversary of their purchase
(class B) or before the first anniversary of their purchase (class C)
6 Your Investment
<PAGE>
that are paid out of the fund's assets. Service compensation originates
from 12b-1 service fees. The 12b-1 fees payable with respect to each share
class are .35% of class A shares, 1.00% of class B and C shares, and .45%
of class P shares. The amounts payable as compensation to Authorized
Institutions, such as your dealer, are shown in the chart at the end of
this prospectus. The portion of such compensation paid to Lord Abbett
Distributor is discussed under "Sales Activities" and "Service Activities."
Sometimes we do not pay compensation where tracking data is not available
for certain accounts or where the Authorized Institution waives part of the
compensation. In such cases, we may not require payment of any otherwise
applicable CDSC.
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 a 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 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 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.
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 Gift to Minor Account $250
For Retirement Plans and Mutual Fund Fee Based Programs no minimum
investment is required, regardless of share class.
You may purchase shares through any independent securities dealer that has
a sales agreement with Lord Abbett Distributor or you can fill out the
attached application and send it to the fund at the address stated below.
You should carefully read the paragraph below entitled "Proper Form" before
placing your order to ensure that your order will be accepted.
Lord Abbett Large-Cap Growth Fund
P.O. Box 419100
Kansas City, MO 64141
By Exchange. Telephone the fund at 800-821-5129 to request an exchange from
any eligible Lord Abbett-sponsored fund.
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, redemption proceeds will not be paid until the fund or transfer
agent is advised that the check has cleared, which may take up to 15
calendar days. For more information call the fund at 800-821-5129.
12b-1 fees are payable regardless of expenses. The amounts payable by a fund
need not be directly related to expenses. If Lord Abbett Distributor's actual
expenses exceed the fee payable to it, a 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.
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.
Your Investment 7
<PAGE>
REDEMPTIONS
By Broker. Call your investment professional for instructions 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 should 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 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(s) 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 normally pays its shareholders dividends from its net investment
income and distributes its net capital gains (if any) as "capital gains
distributions" on an annual basis. Your distributions will be reinvested in
the fund unless you instruct the fund to pay them to you in cash. There are
no sales charges on reinvestments. The tax status of distributions is the
same for all shareholders regardless of how long they have owned fund
shares or whether distributions are reinvested or paid in cash.
Except in tax-advantaged accounts, any sale, redemption or exchange of fund
shares may be taxable to the shareholder.
Information on the tax treatment of distributions, including the source of
dividends and distributions of capital gains by the fund, will be mailed to
shareholders each year. Because everyone's tax situation is unique, you
should consult your tax adviser regarding the treatment of distributions
under the federal, state and local tax rules that apply to you.
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.
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.
8 Your Investment
<PAGE>
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 may set up most of these services when filling
out your application or by calling 800-821-5129.
- --------------------------------------------------------------------------------
For investing
Invest-A-Matic You may make fixed, periodic investments ($50 minimum) into
(Dollar-cost your fund account by means of automatic money transfers from
averaging) your bank checking account. See the attached application for
instructions.
Div-Move You may automatically reinvest the dividends and
distributions from your account into another account in any
Eligible Fund ($50 minimum).
For selling shares
Systematic You may make regular withdrawals from most Lord Abbett
Withdrawal funds. Automatic cash withdrawals will be paid to you from
Plan ("SWP") your account in fixed or variable 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.
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
C shares shares will be redeemed in the order described under "CDSC"
under "Purchases."
- --------------------------------------------------------------------------------
OTHER SERVICES
Telephone Investing. After we have received the attached application
(selecting "yes" under Section 8C and completing Section 7), you may
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 may instruct the 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 in
which case 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.
Account Statements. Every Lord Abbett investor automatically receives
quarterly account statements.
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.
Your Investment 9
<PAGE>
Householding. Shareholders with the same last name and address will receive
a single copy of a prospectus and an annual or semi-annual report, unless
additional reports 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.
MANAGEMENT
The fund's investment adviser is Lord, Abbett & Co., located at 767 Fifth
Avenue, New York, NY 10153-0203. On or about January 17, 2000, the new
address will be 90 Hudson St., Jersey City, NJ 07302-3973. Founded in 1929,
Lord Abbett manages one of the nation's oldest mutual fund complexes, with
approximately $33 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 of .75% based on average daily net
assets for each month. In addition, the fund pays all expenses not
expressly assumed by Lord Abbett.
Portfolio Manager. Stephen Humphrey serves as Executive Vice President and
Portfolio Manager of the Lord Abbett Large-Cap Growth Fund and is primarily
responsible for the day-to-day management of the fund. Mr. Humphrey joined
Lord Abbett in 1999; prior to that he was a Vice President and Portfolio
Manager at Chase Manhattan Bank from 1976 - 1999, managing private accounts
from 1981 and pooled investment funds from 1985.
Historical Performance of Portfolio Manager. From March 17, 1997
until August 17, 1999, Mr. Humphrey was primarily responsible for
the day-to-day management of the Chase Vista Select Large Cap Growth Fund,
a registered investment company. As the portfolio manager of this fund, Mr.
Humphrey had full discretionary authority over the selection of investments
for the fund. From the fund's inception on January 1, 1997 until March 17,
1997, a team of investment professionals at Chase Manhattan Bank,
including Mr. Humphrey, was responsible for the management of the fund's
portfolio.
10 Your Investment
<PAGE>
The cumulative total return for the Chase Vista Select Large Cap Growth
Fund from March 17, 1997 through July 31, 1999 was 109.01%. At July 31,
1999, this fund had $825.2 million in net assets. As shown in the table
below, average annual total returns for the one year period ended July 31,
1999 and for the period during which Mr. Humphrey managed that fund,
compared with the performance of the Standard & Poor's 500(R) Composite
Stock Price Index ("S&P 500(R) Index") and the Lipper Large Cap Growth Fund
average, were:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Annual Total Returns
- --------------------------------------------------------------------------------
Chase Vista Select Lipper Large Cap
Large-Cap Growth S&P 500 Growth Fund
Growth Fund(a) Index(b) Average
<S> <C> <C> <C>
One Year Ending July 31, 1999 32.58% 20.20% 24.02%
- --------------------------------------------------------------------------------
March 20, 1997
through July 31, 1999 36.59%(c) 27.05%(d) 29.41%(e)
- --------------------------------------------------------------------------------
(a) Average annual total return reflects changes in share prices and
reinvestment of dividends and distributions and is net of fund expenses.
(b) The S&P 500 Index is an unmanaged index of common stocks that is considered
to be generally representative of the United States stock market. The Index
is adjusted to reflect reinvestment of dividends.
(c) The average annual total return for the period from March 17, 1997
through July 31, 1999 was 35.52%.
(d) This percentage represents the average annual return of the S&P 500(R)
Index during the period from March 20, 1997 through July 31, 1999
that Mr. Humphrey managed the Chase Vista Select Large Cap Growth Fund.
(e) This percentage represents the average annual return of the Lipper Large
Cap Growth Fund average during the period from March 20, 1997 through
July 31, 1999 that Mr. Humphrey managed the
Chase Vista Select Large Cap Growth Fund.
Historical performance is not indicative of future performance. Although
the Lord Abbett Large-Cap Growth Fund and the Chase Vista Select Large Cap
Growth Fund have substantially similar investment objectives, policies and
strategies, the Chase Vista Select Large Cap Growth Fund is a separate fund
and its historical performance is not indicative of the future performance
of the Lord Abbett Large-Cap Growth Fund. For the periods shown above, the
anticipated expenses of the Lord Abbett Large-Cap Growth Fund may have been
higher than the expenses of the Chase Vista Select Large Cap Growth Fund.
Higher expenses, of course, would reduce a fund's performance. The Chase
Vista Select Large Cap Growth Fund was the only investment vehicle that Mr.
Humphrey managed during the period he was employed at Chase Manhattan Bank
that has or had substantially similar investment objectives, policies and
strategies as those of the Lord Abbett Large-Cap Growth Fund. Share prices
and investment returns will fluctuate reflecting market conditions, as well
as changes in company-specific fundamentals of portfolio securities.
</TABLE>
Your Investment 11
FOR MORE INFORMATION
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 counterparty to a transaction does not perform as
promised.
Diversification. The fund is a diversified fund, which generally 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 specified
financial instrument or index at a specific future date and price. 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 purchase and write put and call options
on equity securities or stock indices that are traded on national
securities exchanges.
A put option gives the buyer of the option the right to sell, and the
seller of the option the obligation to buy, the underlying instrument
during the option period. 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.
A call option gives the buyer of the option the right to buy, and the
writer (seller) of the option the obligation to sell, the underlying
instrument. The fund may only sell (write) covered call options. This means
that the fund may only sell call options on securities it owns. When the
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.
Risks of Futures Contracts and Options Transactions. The fund's
transactions, if any, in futures, options on futures and other options
involve additional risk of loss. Loss may result from a lack of correlation
between changes in the value of these derivative instruments and the fund's
assets being hedged, the potential illiquidity of the markets for
derivative instruments, or the risks arising from margin requirements and
related leverage factors associated with such transactions. The use of
these investment techniques
12 For More Information
<PAGE>
also involves the risk of loss if Lord Abbett is incorrect in its
expectation of fluctuations in securities prices. In addition, the loss
that may be incurred by the fund in entering into futures contracts and in
writing call options on futures is potentially unlimited and may exceed the
amount of the premium received.
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 a fund is not offered
for sale; (2) Lord Abbett Equity Fund; (3) Lord Abbett Series Fund; (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 Authorized
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 B share investment bears to the
total investment.
Legal Capacity. With respect to a redemption request, if (for example) the
request is 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.
Similarly, if (for example) the redemption request is on behalf of the ABC
Corporation by a person (Mary B. Doe) that has the legal capacity to act on
behalf of this corporation, because she is the President of the
corporation, then the request must be executed as
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
John Doe
- --------------------------------------------------
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
John Doe
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'sm'
For More Information 13
<PAGE>
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 Fee Based Program. Certain unaffiliated authorized brokers,
dealers, registered investment advisers or other financial institutions
("entities") who either (1) have an arrangement with Lord Abbett
Distributor in accordance with certain standards approved by Lord Abbett
Distributor, providing specifically for the use of our 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 entities, or (2) 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: (1) an individual, (2) an
individual and his or her spouse and children under the age of 21, and (3)
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. 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 Fee Based 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
participant-directed Retirement Plans.
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.
In addition, companies in which the fund invests may experience similar
difficulties. These problems could negatively affect the value of the issuer's
securities, which in turn could impact the fund's performance.
14 For More Information
<PAGE>
COMPENSATION FOR YOUR DEALER
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FIRST YEAR COMPENSATION
Front-end
sales charge Dealer's
paid by investors concession Service fee(1) Total
(% of offering price) (% of offering (% of net Compensation(2)
price) investment) (% of offering
Class A investments 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(4) 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(4)
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(4) Percentage of average net assets(5)
All amounts no front-end
sales charge none 0.25% 0.25%
- --------------------------------------------------------------------------------
Class C investments(4)
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. Certain purchases of class A shares are subject to a CDSC.
(4) Class B and class C shares are subject to CDSCs.
(5) 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.
Financial Information 15
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
More information on the fund is or will be available free upon request,
including the following:
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).
Lord Abbett Large-Cap Growth Fund
767 Fifth Avenue New York, NY 10153-0203
On or about January 17, 2000, the new address will be:
90 Hudson Street Jersey City, NJ 07302-3973
- ------------------------------------------
SEC file number: 811-9597
To obtain information:
By telephone. Call the fund at: 800-426-1130
By mail. Write to the fund at: The Lord Abbett Family of Funds The General
Motors Building 767 Fifth Avenue New York, NY 10153-0203 On or about January 17,
2000, the new address will be: 90 Hudson Street Jersey City, NJ 07302-3973
Via the Internet.
Lord, Abbett & Co.
www.lordabbett.com
Text only versions of fund documents can be
viewed online or downloaded from:
SEC
www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 202-942-8090) or by sending your request and a duplicating
fee to the SEC's Public Reference Section, Washington, DC 20549-6009 or by
sending your request electronically to [email protected].
LALCG-1-1299 (12/99)
<PAGE>
LORD ABBETT
Statement of Additional Information December 28, 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. On or about January 17, 2000, the new address
will be 90 Hudson St., Jersey City, NJ 07302-3973. This Statement of Additional
Information relates to, and should be read in conjunction with, the Prospectus
dated December 28, 1999.
Shareholder inquiries should be made by directly contacting the Fund or by
calling 800-821-5129. In addition, you can make inquiries through your dealer.
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
9. Financial Statements 20
1
<PAGE>
1.
Investment Policies
The Lord Abbett Large-Cap Growth Fund (the "Company" or the "Fund") is a
diversified open-end management investment company registered under the
Investment Company Act of 1940, as amended (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, including warrants which are not listed on the NYSE or American
Stock Exchange in an amount not to exceed 5% of the value of the Fund's gross
assets.
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,
4
<PAGE>
in 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 15% of its 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.
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 10153-0203. 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, Trustee
Time Warner Inc.
1271 Avenue of the Americas
New York, New York
Senior Adviser, Time Warner Inc. (since 1998). 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, Trustee
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 (since 1986). Age 61.
Robert B. Calhoun, Jr., Trustee
Monitor Clipper Partners
650 Madison Avenue, 9th Floor
New York, New York
Managing Director of Monitor Clipper Partners (since 1997) and President of The
Clipper Group L.P., both private equity investment funds (since 1990). Age 57.
Stewart S. Dixon, Trustee
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois
Partner in the law firm of Wildman, Harrold, Allen & Dixon (since 1990). Age 68.
John C. Jansing, Trustee
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 73.
C. Alan MacDonald, Trustee
Directorship Inc.
8 Sound Shore Drive
Greenwich, Connecticut
Currently involved in golf development management on a consultancy basis (since
1999). 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
6
<PAGE>
career spans 36 years at Stouffers and Nestle with 18 of the years as Chief
Executive Officer. Currently serves as Director of DenAmerica Corp., J. B.
Williams Company, Inc., Fountainhead Water Company and Exigent Diagnostics. Age
66.
Hansel B. Millican, Jr., Trustee
Rochester Button Company
1328 Broadway (Suite 816)
New York, New York
President and Chief Executive Officer of Rochester Button Company (since 1991).
Age 71.
Thomas J. Neff, Trustee
Spencer Stuart
277 Park Avenue
New York, New York
Chairman of Spencer Stuart, an executive search consulting firm (since 1976).
Currently serves as a Director of Ace, Ltd. (NYSE). Age 62.
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
pension or retirement benefits accrued for outside directors/trustees maintained
by 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.
For the Fiscal Year July 31, 1998
---------------------------------
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Pension or For Year Ended
Retirement Benefits December 31, 1998
Accrued by the Total Compensation
Aggregate Company and Paid by the Company and
Compensation Thirteen Other Lord Thirteen Other Lord
Accrued by Abbett-sponsored Abbett-sponsored
Name of the Company(1) Companies(2) Companies(3)
Trustee
<S> <C> <C> <C>
E. Thayer Bigelow None $17,622 $57,400
William H.T. Bush* None $15,846 $27,500
Robert B. Calhoun, Jr.** None $12,276 $33,500
Stewart S. Dixon None $32,420 $56,500
John C. Jansing None $41,108(4) $55,500
C. Alan MacDonald None $26,763 $55,000
Hansel B. Millican, Jr. None $37,822 $55,500
Thomas J. Neff None $20,313 $56,500
*Elected as of August 13, 1998
**Elected as of June 17, 1998
</TABLE>
1. Outside directors/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 ("equity
based plan") that deems the deferred amounts to be invested in shares of
the Company for later distribution to the trustees. Since the Lord Abbett
Large-Cap Growth Fund is new, no compensation has yet been paid to its
trustees.
7
<PAGE>
2. The amounts in Column 3 were accrued by the Lord Abbett-sponsored Funds for
the 12 months ended October 31, 1999 with respect to the equity based plan
established for independent directors/trustees in 1996. This plan
supercedes a previously approved retirement plan for all future
directors/trustees. Current directors had the option to convert their
accrued benefits under the retirement plan. All of the outside directors
except one made such an election. Each plan also provides for a
pre-retirement death benefit and actuarially reduced joint-and-survivor
spousal benefits.
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, paid by the Lord Abbett-sponsored funds during
the year ended December 31, 1998 but does not include amounts accrued under
the equity based plan and shown in Column 3.
4. Mr. Jansing chose to continue to receive benefits under the retirement
plan, which provides that outside directors/ trustees 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. Carper, Hilstad,
and Morris are partners of Lord Abbett; the others are employees. None have
received compensation from the Fund.
Executive Vice President:
Stephen Humphrey, age 55 (with Lord Abbett since 1999, formerly Vice President
and Portfolio Manager at Chase Manhattan Bank from 1976 - 1999)
Vice Presidents:
Joan A. Binstock, age 45 (with Lord Abbett since 1999, formerly Chief Operating
Officer of Morgan Grenfell from 1996 to 1999, prior thereto Principal of Ernst &
Young LLP)
Daniel E. Carper, age 47
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.)
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.)
Robert G. Morris, age 54
A. Edward Oberhaus, age 39
Tracie E. Richter, age 31 (with Lord Abbett since 1999, formerly Vice President
- - Head of Fund Administration of Morgan Grenfell from 1998 to 1999, Vice
President of Bankers Trust from 1996 to 1998, prior thereto Tax Associate of
Goldman Sachs).
Treasurer:
Donna M. McManus, age 38 (with Lord Abbett since 1996, formerly a Senior Manager
at Deloitte & Touche LLP).
As of the date hereof, our officers and trustees, as a group, owned less than 1%
of the Fund's outstanding shares and there were no record holders of 5% or more
of the Fund's outstanding shares, other than Lord Abbett Distributor.
8
<PAGE>
3.
Investment Advisory And Other Services
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 .75 of 1% for the Lord Abbett 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 Company.
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
Company.
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, 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.
9
<PAGE>
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.
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.
10
<PAGE>
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 Company 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.
For each class of shares, the net asset value will be determined by taking the
net assets and dividing by the number of shares outstanding.
The Fund has entered into a distribution agreement with Lord Abbett Distributor
LLC, a New York limited liability company ("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 in
this Statement of Additional Information. 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 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
11
<PAGE>
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 .35 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 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.
12
<PAGE>
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 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' 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,
13
<PAGE>
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:
Anniversary of the Day on Contingent Deferred Sales Charge
Which the Purchase Order Was Accepted on Redemptions (As % of Amount
Subject to Charge)
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
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.
14
<PAGE>
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 normally 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
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
15
<PAGE>
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 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
16
<PAGE>
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 $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
17
<PAGE>
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.
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 Fund intends to elect and to qualify for special tax treatment afforded
regulated investment companies under the Internal Revenue Code of 1986 (the
"Code"). If it so qualifies, the Fund (but not its shareholders) will be
relieved of federal income taxes on the amount it distributes to shareholders.
If in any taxable year the Fund does not qualify as a regulated investment
company, all of its taxable income will be taxed to the Fund at regular
corporate rates.
The Fund contemplates declaring as dividends substantially all of its net
investment income. Dividends paid by the Fund from its investment income and
distributions of its net realized short-term capital gains are taxable to
shareholders as ordinary income or capital gain, whether received in cash or
reinvested in additional shares of the Fund. The Fund will send each shareholder
annual information concerning the tax treatment of dividends and other
distributions.
Upon sale, exchange or redemption of shares of the Fund, a shareholder will
recognize short- or long-term capital gain or loss, depending upon the
shareholder's holding period in the Fund's shares. However, if a shareholder's
holding period in his shares is six months or less, any capital loss realized
from a sale or exchange of such shares must be treated as long-term capital loss
to the extent of dividends classified as "capital gains dividends" received with
respect to such shares. The maximum tax rates applicable to net capital gains
recognized by individuals and other non-corporate taxpayers are (i) the same as
ordinary income rates for capital assets held for one year or less and (ii) 20%
for capital assets held for more than one year. Capital gains or losses
recognized by corporate shareholders are subject to tax at the ordinary income
tax rates applicable to corporations.
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.
Some shareholders may be subject to a 31% withholding tax on reportable
dividends, capital gains distributions and redemption payments ("backup
withholding"). Generally, shareholders subject to backup withholding will be
those for whom a certified taxpayer identification number is not on file with
the Fund or who, to the Fund's knowledge, have furnished an incorrect number.
When establishing an account, an investor must certify under penalties of
perjury that such number is correct and that he is not otherwise subject to
backup withholding.
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.
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 U.S. 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 also 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. Corporate shareholders must have held their shares in the Fund for
more than 45 days to qualify for the deduction on dividends paid by the Fund.
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.
19
<PAGE>
If the Fund purchases shares in certain foreign investment entities called
"passive foreign investment companies," the Fund may be subject to U.S. 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 U.S. persons (U.S. citizens or residents and United States
domestic corporations, partnerships, trusts and estates). Each shareholder who
is not a U.S. person should consult his tax adviser regarding the U.S. and
foreign tax consequences of the ownership of shares of a Fund, including the
applicable rate of U.S. withholding tax on dividends representing ordinary
income and net short-term capital gains, and the applicability of U.S. gift and
estate taxes.
20
<PAGE>
8.
Information About the Company
The Company was formed as a business trust under Delaware law on September 29,
1999. The Company offers five classes of shares: Class A, Class B, Class C,
Class P, and Class Y. Only the Fund's Classes A, B, C and P are offered in this
Statement of Additional Information. 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.
Additional classes or funds may be added in the future. 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.
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.
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.
9.
Financial Statements
The Statement of Net Assets at December 14, 1999 and the report of Deloitte &
Touche LLP, independent auditors, on such statements are attached hereto.
21
<PAGE>
LORD ABBETT LARGE-CAP GROWTH FUND
STATEMENT OF NET ASSETS
December 14, 1999
<TABLE>
<CAPTION>
Assets:
<S> <C>
Cash $ 100,000
Prepaid offering costs (3).............................................................. 3,000
-------
Total Assets............................................................................$ 103,000
=======
Liabilities:
Liabilities and accrued expenses 3,000
-------
Net Assets:.............................................................................$ 100,000
Net Assets Consist of:
Class A Shares of beneficial interest, $0.00 par value,
100,000,000 shares authorized........................................................$ 0.00
Class B Shares of beneficial interest, $0.00 par value,
100,000,000 shares authorized........................................................ 0.00
Class C Shares of beneficial interest, $0.00 par value,
100,000,000 shares authorized........................................................ 0.00
Class P Shares of beneficial interest, $0.00 par value,
100,000,000 shares authorized........................................................ 0.00
Class Y Shares of beneficial interest, $0.00 par value,
100,000,000 shares authorized........................................................ 0.00
Paid-in Capital in excess of par........................................................ 100,000
-------
Net Assets:.............................................................................$ 100,000
=======
Net Asset Value:
Class A - Based on net assets of $ 96,000 and 9,600 shares outstanding $ 10.00
=====
Class B - Based on net assets of $ 1,000 and 100 shares outstanding.....................$ 10.00
=====
Class C - Based on net assets of $ 1,000 and 100 shares outstanding.....................$ 10.00
=====
Class P - Based on net assets of $ 1,000 and 100 shares outstanding.....................$ 10.00
=====
Class Y - Based on net assets of $ 1,000 and 100 shares outstanding.....................$ 10.00
=====
</TABLE>
Notes to Financial Statements
(1) Lord Abbett Large-Cap Growth Fund (the "Fund") was organized as a Delaware
business trust on September 29, 1999 and is registered under the Investment
Company Act of 1940. To date, the Fund
22
<PAGE>
has not had any transactions other than those relating to organizational
matters and the sale of Class A, Class B, Class C, Class P and Class Y
shares to Lord, Abbett & Co. ("LA").
(2) The Fund has entered into an investment advisory agreement with LA and a
distribution agreement with Lord, Abbett Distributor, LLC (the
"Distributor"). (See "Management of the Funds - Management and Advisory
Arrangements" in the Statement of Additional Information.)
(3) Prepaid offering cost consist of legal fees related to preparing the
initial registration statement, and will be amortized over a 12 month
period beginning with the commencement of operations of the Fund. The
Investment Adviser has agreed to bear all the costs of organizing the Fund,
estimated to be $13,200.
<PAGE>
LORD ABBETT
LARGE-CAP GROWTH FUND
CLASS Y SHARES
PROSPECTUS
December 28, 1999
[LOGO]
LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of
this prospectus. Any representation to the contrary is a criminal offense.
Class Y shares of the fund are neither offered to the general public nor
are available in all states. Please call 800-821-5129 for further
information.
<PAGE>
TABLE OF CONTENTS
The Funds
What you should know about the fund
Goal/Principal Strategy 2
Main Risks 2
Performance 3
Fees and Expenses
Your Investment
Information for managing your fund account
Purchases 4
Redemptions 5
Distributions and Taxes 5
Services For Fund Investors 6
Management 6
For More Information
How to learn more about the fund
Other Investment Techniques 8
Glossary of Shaded Terms 9
How to learn more about the fund
and other Lord Abbett funds
Back Cover
<PAGE>
The Fund
GOAL/PRINCIPAL STRATEGY
The fund's investment objective is long-term capital growth.
Under normal circumstances, the fund will invest at least 65% of its total
assets in equity securities of large, established companies with market
capitalizations of at least $8 billion. To identify attractive companies
for investment, the fund uses a "bottom up" investment research approach
that seeks to identify individual companies with expected earnings growth
potential and consistency that may not be recognized by the market at
large. This approach is based on the following steps:
o We identify large-capitalization companies with at least a 10%
consistent, sustainable growth rate;
o We focus on those companies demonstrating a positive historical
performance as well as favorable earnings prospects for the future;
o We focus on companies also demonstrating successful strategic business
plan selection, strategy and execution, reflecting strong management
leadership; and
o We focus on companies demonstrating leadership positions within their
industries.
The fund maintains a long-term investment approach, generally expecting to
hold stocks for an average of over three years. This strategy supports our
style of reaping the rewards of successful, well-run companies and
investing in seasoned managements for the long term. The fund may take a
temporary defensive position by investing some of its assets, most likely
not more than 30%, 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 fund is subject to the general risks and considerations associated with
equity investing, as well as the particular risks associated with growth
stocks. The value of your investment will fluctuate in response to
movements in the stock market in general and to the changing prospects of
individual companies in which the fund invests. Growth stocks may grow
faster than other stocks and may be more volatile. In addition, if the
fund's assessment of a company's potential for growth is wrong, the price
of the company's stock may decrease below the price at which the fund
purchased the stock. An investment in the fund is not a bank deposit and is
not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency. The fund is not a complete investment program
and may not be appropriate for all investors. You could lose money by
investing in the fund.
We or the fund refers to the Lord Abbett Large-Cap Growth Fund.
About the fund. The fund is a professionally managed portfolio primarily holding
securities purchased with the pooled money of investors. It strives to reach its
stated goal, although as with all mutual funds, it cannot guarantee results.
Large companies are established companies that are considered "known
quantities." Large companies often have the resources to weather economic shifts
although they can be slower to innovate than small companies. Bottom-up research
looks for high-performing stocks of individual companies before considering the
impact of economic trends. Companies might be identified from investment
research analysis or personal knowledge of their products and services. This
approach considers that a company can do well even if it is part of an industry
that, as a whole, is not performing well.
You should read this entire prospectus, including "Other Investment
Techniques," which concisely describes the other investment strategies used by
the fund and their risks.
2 The Fund
<PAGE>
PERFORMANCE
The fund does not show any performance because it has not completed a full
calendar year of operations.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
- --------------------------------------------------------------------------------
Fee Table
- --------------------------------------------------------------------------------
Class Y
Shareholder Fees (Fees paid directly from your investment)
Maximum Sales Charge on Purchases (as a % of offering price) none
Maximum Deferred Sales Charge none
Annual Fund Operating Expenses (Expenses deducted from fund assets)
(as a % of average net assets)(1)
Management Fees (See "Management") 0.75%
Other Expenses 0.35%
Total Annual Fund Operating Expenses 1.10%
(1) The annual operating expenses are based on estimated expenses for the
current fiscal year.
- --------------------------------------------------------------------------------
Example
- --------------------------------------------------------------------------------
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. This Example, like that in
other funds' prospectuses, assumes that you invest $10,000 in the fund for the
time periods indicated and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
SHARE CLASS 1 YEAR 3 YEARS
Class Y shares $112 $350
- --------------------------------------------------------------------------------
Management fees are payable to Lord, Abbett & Co. ("Lord Abbett") for the fund's
investment management.
Other expenses include fees paid for miscellaneous items such as shareholder
service fees and professional fees.
The Fund 3
<PAGE>
Your Investment
PURCHASES
Class Y shares. You may purchase Class Y shares at the net asset value
("NAV") per share next determined after we receive and accept your purchase
order submitted in proper form. No sales charges apply.
We reserve the right to withdraw all or 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 binding until confirmed or accepted in
writing.
Who May Invest? Eligible purchasers of class Y shares include: (1) certain
authorized brokers, dealers, registered investment advisers or other
financial institutions ("entities") 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 our class Y
shares in particular investment products made available for a fee to
clients of such entities, 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 ("Mutual Fund Fee Based Programs"); (2) the
trustee or custodian under any deferred compensation or pension or
profit-sharing plan or payroll deduction IRA established for the benefit of
the employees of any company with an account(s) in excess of $10 million
managed by Lord Abbett or its sub-advisors on a private-advisory-account
basis; (3) institutional investors, such as retirement plans, companies,
foundations, trusts, endowments and other entities where the total amount
of potential investable assets exceeds $50 million that were not introduced
to Lord Abbett by persons associated with a broker or dealer primarily
involved in the retail security business. Additional payments may be made
by Lord Abbett out of its own resources with respect to certain of these
sales.
How Much Must You Invest? You may buy our shares through any independent
securities dealer having a sales agreement with Lord Abbett Distributor,
our exclusive selling agent. Place your order with your investment dealer
or send the money to the fund (P.O. Box 419100, Kansas City, Missouri
64141). The minimum initial investment is $1 million except for Mutual Fund
Fee Based Programs, which have no minimum. This offering may be suspended,
changed or withdrawn by Lord Abbett Distributor which reserves the right to
reject any order.
Buying Shares Through Your Dealer. Orders for shares received by the fund
prior to the close of the NYSE, or received by dealers prior to such close
and received by Lord Abbett Distributor prior to the close of its business
day, will be confirmed at NAV effective at such NYSE close. Orders received
by dealers after the NYSE closes and received by Lord Abbett Distributor in
proper form prior to the close of its next business day are executed at the
NAV effective as of the close of the NYSE on that next business day. The
dealer is responsible for the timely transmission of orders to Lord Abbett
Distributor. A business day is a day on which the NYSE is open for trading.
Buying Shares By Wire. To open an account, call 800-821-5129 Ext. 34028,
Institutional Trade Dept., to set up your account and to arrange a wire
transaction. Wire to: United Missouri Bank of Kansas City, N.A., Routing
number - 101000695, bank account number: 9878002611, FBO: (account name)
and (your Lord Abbett account number). Specify the complete name of the
fund, note Class Y shares and include your new account number
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. Purchases and sales of fund shares are executed at the
NAV next determined after the fund receives and accepts 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.
Lord Abbett Distributor LLC ("Lord Abbett Distributor") acts as agent for the
fund to work with investment professionals that buy and/or sell shares of the
fund on behalf of their clients. Generally, Lord Abbett Distributor does not
sell fund shares directly to investors.
4 Your Investment
<PAGE>
and your name. To add to an existing account, wire to: United Missouri Bank
of Kansas City, N.A., routing number - 101000695, bank account number:
9878002611, FBO: (account name) and (your Lord Abbett account number).
Specify the complete name of the fund, note Class Y shares and include your
account number and your name.
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 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.
By Wire. In order to receive funds by wire, our servicing agent must have
the wiring instructions on file. To verify that this feature is in place,
call 800-821-5129 Ext. 34028, Institutional Trading Dept. minimum wire:
$1,000. Your wire redemption request must received by the fund before the
close of the NYSE for money to be wired on the next business day.
DISTRIBUTIONS AND TAXES
The fund normally pays its shareholders dividends from its net investment
income and distributes its net capital gains (if any) as "capital gains
distributions" on an annual basis. Your distributions will be reinvested in
the fund unless you instruct the fund to pay them to you in cash. The tax
status of distributions is the same for all shareholders regardless of how
long they have owned fund shares or whether distributions are reinvested or
paid in cash.
Except in tax-advantaged accounts, any sale, redemption or exchange of fund
shares may be taxable to the shareholder.
Information on the tax treatment of distributions, including the source of
dividends and distributions of capital gains by the fund, will be mailed to
shareholders each year. Because everyone's tax situation is unique, you
should consult your tax adviser regarding the treatment of distributions
under the federal, state and local tax rules that apply to you.
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.
Your Investment 5
<PAGE>
SERVICES FOR FUND INVESTORS
AUTOMATIC SERVICES
We offer the following shareholder services:
Telephone Exchange Privilege. Class Y shares may be exchanged without a
service charge for Class Y shares of any Eligible Fund among the Lord
Abbett-sponsored funds.
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 an annual or semi-annual report, unless
additional reports 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.
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.
MANAGEMENT
The fund's investment adviser is Lord, Abbett & Co., located at 767 Fifth
Avenue, New York, NY 10153-0203. On or about January 17, 2000, the new
address will be 90 Hudson St., Jersey City, NJ 07302-3973. Founded in 1929,
Lord Abbett manages one of the nation's oldest mutual fund complexes, with
approximately $33 billion in more than 40 mutual fund portfolios and other
advisory accounts. For more information about the services Lord Abbett
provides to the fund, see the Statement of Additional Information.
The fund pays Lord Abbett a monthly fee of .75% based on average daily net
assets for each month. In addition, the fund pays all expenses not
expressly assumed by Lord Abbett.
Portfolio Manager. Stephen Humphrey serves as Executive Vice President and
Portfolio Manager of the Lord Abbett Large-Cap Growth Fund and is primarily
responsible for the day-to-day management of the fund. Mr. Humphrey joined
Lord Abbett in 1999; prior to that he was a Vice President and Portfolio
Manager at Chase Manhattan Bank from 1976 - 1999, managing private accounts
from 1981 and pooled investment funds from 1985.
Historical Performance of the Portfolio Manager. From March 17, 1997
until August 17, 1999, Mr. Humphrey was primarily
responsible for the day-to-day management of the Chase Vista Select Large
Cap Growth Fund, a registered investment company. As the portfolio manager
of this fund, Mr. Humphrey had full discretionary authority over the
selection of investments for the fund. From the fund's inception on January
1, 1997 until March 17, 1997, a team of investment professionals at Chase
Manhattan Bank, including Mr. Humphrey, was responsible for the
management of the fund's portfolio.
6 Your Investment
<PAGE>
The cumulative total return for the Chase Vista Select Large Cap Growth
Fund from March 17, 1997 through July 31, 1999 was 109.01%. At July 31,
1999, this fund had $825.2 million in net assets. As shown in the table
below, average annual total returns for the one year period ended July 31,
1999 and for the period during which Mr. Humphrey managed that fund,
compared with the performance of the Standard & Poor's 500(R) Composite
Stock Price Index ("S&P 500(R) Index") and the Lipper Large Cap Growth Fund
average, were:
<TABLE>
<CAPTION>
<S>
- ---------------------------------------------------------------------------------------------
Average Annual Total Returns
- ---------------------------------------------------------------------------------------------
Chase Vista Select Lipper Large Cap
Large Cap Growth Fund(a) S&P 500(R) Index(b) Growth Fund Average
<C> <C> <C>
One Year Ending July 31, 1999 32.58% 20.20% 24.02%
March 20, 1997
through July 31, 1999 36.59%(c) 27.05%(d) 29.41%(e)
</TABLE>
(a) Average annual total return reflects changes in share prices and
reinvestment of dividends and distributions and is net of fund expenses.
(b) The S&P 500 Index is an unmanaged index of common stocks that is considered
to be generally representative of the United States stock market. The Index
is adjusted to reflect reinvestment of dividends.
(c) The average annual total return for the period from March 17, 1997
through July 31, 1999 was 35.52%.
(d) This percentage represents the average annual return of the S&P 500(R)
Index during the period from March 20, 1997 through July 31, 1999 that
Mr. Humphrey managed the Chase Vista Select Large Cap Growth Fund.
(e) This percentage represents the average annual return of the Lipper Large
Cap Growth Fund average during the period from March 20, 1997
through July 31, 1999 that Mr. Humphrey managed the Chase Vista Select
Large Cap Growth Fund.
Historical performance is not indicative of future performance. Although
the Lord Abbett Large-Cap Growth Fund and the Chase Vista Select Large Cap
Growth Fund have substantially similar investment objectives, policies and
strategies, the Chase Vista Select Large Cap Growth Fund is a separate fund
and its historical performance is not indicative of the future performance
of the Lord Abbett Large-Cap Growth Fund. For the periods shown above, the
anticipated expenses of the Lord Abbett Large-Cap Growth Fund may have been
higher than the expenses of the Chase Vista Select Large Cap Growth Fund.
Higher expenses, of course, would reduce a fund's performance. The Chase
Vista Select Large Cap Growth Fund was the only investment vehicle that Mr.
Humphrey managed during the period he was employed at Chase Manhattan Bank
that has or had substantially similar investment objectives, policies and
strategies as those of the Lord Abbett Large-Cap Growth Fund. Share prices
and investment returns will fluctuate reflecting market conditions, as well
as changes in company-specific fundamentals of portfolio securities.
Your Investment 7
<PAGE>
For More Information
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 counterparty to a transaction does not perform as
promised.
Diversification. The fund is a diversified fund, which generally 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 specified
financial instrument or index at a specific future date and price. 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 purchase and write put and call options
on equity securities or stock indices that are traded on national
securities exchanges.
A put option gives the buyer of the option the right to sell, and the
seller of the option the obligation to buy, the underlying instrument
during the option period. 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.
A call option gives the buyer of the option the right to buy, and the
writer (seller) of the option the obligation to sell, the underlying
instrument. The fund may only sell (write) covered call options. This means
that the fund may only sell call options on securities it owns. When the
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.
Risks of Futures Contracts and Options Transactions. The fund's
transactions, if any, in futures, options on futures and other options
involve additional risk of loss. Loss may result from a lack of correlation
between changes in the value of these derivative instruments and the fund's
assets being hedged, the potential illiquidity of the markets for
derivative instruments, or the risks arising from margin requirements and
related leverage factors associated with such transactions. The use of
these investment techniques also involves the risk of loss if Lord Abbett
is incorrect in its expectation of fluctuations
8 For More Information
<PAGE>
in securities prices. In addition, the loss that may be incurred by the
fund in entering into futures contracts and in writing call options on
futures is potentially unlimited and may exceed the amount of the premium
received.
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
Eligible Fund. An Eligible Fund is any Lord Abbett-sponsored fund offering
class Y shares.
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 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 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 Fee Based Program. Certain unaffiliated authorized brokers,
dealers, registered investment advisers or other financial institutions
("entities") who either (1) have an arrangement with Lord Abbett
Distributor in accordance with certain standards approved by Lord Abbett
Distributor, providing specifically for the use of our 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 entities, or (2) charge an advisory, consulting or other fee for their
services and buy shares for their own accounts or the accounts of their
clients.
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
John Doe
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM
In the case of the corporation --
ABC Corporation
Mary B. Doe
By Mary B. Doe, President
[Date]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
John Doe
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM
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.
In addition, companies in which the fund invests may experience similar
difficulties. These problems could negatively affect the value of the issuer's
securities, which in turn could impact the fund's performance.
For More Information 9
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
More information on this fund is available free upon request, including the
following:
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).
Lord Abbett Large-Cap Growth Fund
767 Fifth Avenue New York, NY 10153-0203
On or about January 17, 2000, the new address will be:
90 Hudson Street
Jersey City, NJ 07302-3973
- --------------------------
SEC file number: 811-9597
To obtain information:
By telephone. Call the fund at: 800-426-1130
By mail. Write to the fund at:
The Lord Abbett Family of Funds
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
On or about January 17, 2000, the
new address will be:
90 Hudson Street
Jersey City, NJ 07302-3973
Via the Internet.
Lord, Abbett & Co.
www.lordabbett.com
Text only versions of fund documents can be viewed online or downloaded from:
SEC
www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 202-942-8090) or by sending your request and a duplicating
fee to the SEC's Public Reference Section, Washington, DC 20549-6009 or by
sending your request electronically to [email protected].
laLcg-Y-1-1299
(12/99)
<PAGE>
LORD ABBETT
STATEMENT OF ADDITIONAL INFORMATION DECEMBER 28, 1999
LORD ABBETT LARGE-CAP GROWTH FUND
Y SHARES
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. On or about January 17, 2000, the new address
will be 90 Hudson St., Jersey City, NJ 07302-3973. This Statement of Additional
Information relates to, and should be read in conjunction with, the Prospectus
dated December 27, 1999.
Shareholder inquiries should be made by directly contacting the Fund 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 10
6. Performance 12
7. Taxes 12
8. Information About The Company 13
9. Financial Statements 14
1
<PAGE>
1.
INVESTMENT POLICIES
The Lord Abbett Large-Cap Growth Fund (the "Company" or the "Fund") is a
diversified open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "Act").
FUNDAMENTAL INVESTMENT RESTRICTIONS. The Fund is subject to the follo7ing
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
<PAGE>
(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;
(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, including warrants which are not listed on the NYSE or American
Stock Exchange in an amount not to exceed 5% of the value of the Fund's gross
assets.
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
3
<PAGE>
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
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,
4
<PAGE>
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 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 15% of its 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.
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.
5
<PAGE>
The following trustee is a partner of Lord, Abbett & Co. ("Lord Abbett"), The
General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203. 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.
*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, TRUSTEE
Time Warner Inc.
1271 Avenue of the Americas
New York, New York
Senior Adviser, Time Warner Inc. (since 1998). 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, TRUSTEE
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 (since 1986). Age 61.
ROBERT B. CALHOUN, JR., TRUSTEE
Monitor Clipper Partners
650 MADISON AVENUE, 9TH Floor
New York, New York
Managing Director of Monitor Clipper Partners (since 1977) and President of The
Clipper Group L.P., both private equity investment funds (since 1990). Age 57.
STEWART S. DIXON, TRUSTEE
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois
Partner in the law firm of Wildman, Harrold, Allen & Dixon (since 1990). Age 68.
JOHN C. JANSING, TRUSTEE
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 73.
C. ALAN MACDONALD, TRUSTEE
Directorship Inc.
8 Sound Shore Drive
Greenwich, Connecticut
6
<PAGE>
Currently involved in golf development management on a consultancy basis (since
1999). 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 Director of DenAmerica Corp., J. B. Williams
Company, Inc., Fountainhead Water Company and Exigent Diagnostics. Age 66.
HANSEL B. MILLICAN, JR., TRUSTEE
Rochester Button Company
1328 Broadway (Suite 816)
New York, New York
President and Chief Executive Officer of Rochester Button Company (since 1991).
Age 71.
THOMAS J. NEFF, TRUSTEE
Spencer Stuart
277 Park Avenue
New York, New York
Chairman of Spencer Stuart, an executive search consulting firm (since 1976).
Currently serves as a Director of Ace, Ltd. (NYSE). Age 62.
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
pension or retirement benefits accrued for outside directors/trustees maintained
by 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.
FOR THE FISCAL YEAR ENDED JULY 31, 1998
<TABLE>
<CAPTION>
(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
Compensation Twelve Other Lord and Thirteen Other
Accrued by Abbett-sponsored Lord Abbett-sponsored
Name of Director the Company(1) Companies(2) Companies (3)
- ---------------- -------------- ------------ ------------
<S> <C> <C> <C>
E. Thayer Bigelow None $17,622 $ 57,400
William H.T. Bush* None $15,846 $ 27,500
Robert B. Calhoun, Jr.** None $12,276 $ 33,500
Stewart S. Dixon None $32,420 $ 56,500
John C. Jansing None $41,108(4) $ 55,500
C. Alan MacDonald None $26,763 $ 55,000
Hansel B. Millican, Jr. None $37,822 $ 55,500
Thomas J. Neff None $20,313 $ 56,500
</TABLE>
*Elected as of August 13, 1998
**Elected as of June 17, 1998
1. Outside directors/trustees' fees, including attendance fees for board and
committee meetings, are allocated among
7
<PAGE>
all Lord Abbett-sponsored funds based on the net assets of each fund. A
portion of the fees payable by the Fund to its outside trustees is being
deferred under a plan ("equity based plan") that deems the deferred amounts
to be invested in shares of the Fund for later distribution to the
directors/trustees.
2. The amounts in Column 3 were accrued by the Lord Abbett-sponsored Funds for
the 12 months ended October 31, 1999 with respect to the equity based plan
established for independent directors/trustees in 1996. This plan
supercedes a previously approved retirement plan for all future
directors/trustees. Current directors had the option to convert their
accrued benefits under the retirement plan. All of the outside directors
except one made such an election. Each plan also provides for a
pre-retirement death benefit and actuarially reduced joint-and-survivor
spousal benefits.
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, paid by the Lord Abbett-sponsored funds during
the year ended December 31, 1998 but does not include amounts accrued under
the equity based plan and shown in Column 3.
4. Mr. Jansing chose to continue to receive benefits under the retirement
plan, which provides that outside directors/ trustees 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. Of the following, Messrs.
Carper, Hilstad and Morris are partners of Lord Abbett; the others are
employees:
EXECUTIVE VICE PRESIDENT:
Stephen Humphrey, age 55, (with Lord Abbett since 1999, formerly Vice President
& Portfolio Manager at Chase Manhattan Bank from 1976-1999)
VICE PRESIDENTS:
Joan Binstock, age 45, (with Lord Abbett since 1999, formerly Chief Operating
Officer of Morgan Grenfell from 1996 to 1999, prior thereto Principal of Ernst &
Young LLP)
Daniel E. Carper, age 47
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.)
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.)
Robert G. Morris, age 54
A. Edward Oberhaus, III, age 39
Tracie Richter, age 31, (with Lord Abbett since 1999, formerly Vice President -
Head of Fund Administration of Morgan Grenfell from 1998 to 1999, Vice President
of Bankers Trust from 1996 to 1998, prior thereto Tax Associate of Goldman
Sachs).
TREASURER:
Donna M. McManus, age 38 (with Lord Abbett since 1996, formerly a Senior Manager
at Deloitte & Touche LLP).
8
<PAGE>
As of the date hereof, our officers and directors, as a group, owned less than
1% of the Fund's outstanding shares and there were no record holders of 5% or
more of the Fund's outstanding shares, other than Lord Abbett Distributor.
3.
INVESTMENT ADVISORY AND OTHER SERVICES
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 .75 of 1% for Large-Cap Growth Fund. These fees are allocated among the
classes of the fund based on the classes' proportionate share of 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 directors' 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.
Lord Abbett Distributor LLC serves as the principal underwriter for the Company.
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 directors have approved arrangements permitting the Funds' 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 each Fund, including the examination of financial
statements included in our 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
Funds.
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, 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
9
<PAGE>
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.
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".
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 --
10
<PAGE>
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
The Company 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 New York or American Stock Exchange or on
the NASDAQ National Market System are valued at the last sales price, or, if
there is no sale on that day, at the mean between the last bid and asked prices,
or, in the case of bonds, in the over-the-counter market if, in the judgment of
the Funds' 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 Directors.
The net asset value per share for the Class Y shares will be determined by
taking Class Y shares net assets and dividing by shares outstanding. Our Class Y
shares will be offered at net asset value.
The Fund has entered into a distribution agreement with Lord Abbett Distributor
LLC, a New York limited liability company ("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 each 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.
CLASS Y SHARE EXCHANGES. The Prospectus describes the Telephone Exchange
Privilege. You may exchange some or all of your Y shares for Y shares of any
Lord Abbett-sponsored funds currently offering Class Y shares to the public.
Currently those other funds consist of Lord Abbett Affiliated Fund, Lord Abbett
Investment Trust - High Yield Fund, Core Fixed Income Fund, Strategic Core Fixed
Income Fund, Bond-Debenture Fund, Developing Growth Fund, and Mid-Cap Value
Fund, Growth Opportunities Fund, International Fund, Small-Cap Value Fund, Lord
Abbett Securities Trust - Micro-Cap Growth Fund and Micro-Cap Value Fund.
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 each 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.
11
<PAGE>
6.
PERFORMANCE
The Fund computes the average annual compounded rate of total return for Class Y
shares 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 no sales charge from the initial amount invested and
reinvestment of all income dividends and capital gains distributions on the
reinvestment dates at prices calculated as stated in the Prospectus. The ending
redeemable value is determined by assuming a complete redemption at the end of
the period(s) covered by the annual total return computation.
In calculating total returns for Class Y shares no sales charge is deducted from
the initial investment and the 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.
Our yield quotation for Class Y shares is based on a 30-day period ended on a
specified date, computed by dividing the net investment income per share earned
during the period by the net asset value per share of such class on the last day
of the period. This is determined by finding the following quotient: take the
dividends and interest earned during the period for the class minus its expenses
accrued for the period and divide by the product of (i) the average daily number
of Class shares outstanding during the period that were entitled to receive
dividends and (ii) the net asset value 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. Yields for Class Y shares do not reflect the
deduction of any sales charge.
These figures represent past performance, and an investor should be aware that
the investment return and principal value of a Fund's investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost.
Therefore, there is no assurance that this performance will be repeated in the
future.
7.
TAXES
The Fund intends to elect and to qualify for special tax treatment afforded
regulated investment companies under the Internal Revenue Code of 1986 (the
"Code"). If it so qualifies, the Fund (but not its shareholders) will be
relieved of federal income taxes on the amount it distributes to shareholders.
If in any taxable year the Fund does not qualify as a regulated investment
company, all of its taxable income will be taxed to the Fund at regular
corporate rates.
The Fund contemplates declaring as dividends substantially all of its net
investment income. Dividends paid by the Fund from its investment income and
distributions of its net realized short-term capital gains are taxable to
shareholders as ordinary income or capital gain, whether received in cash or
reinvested in additional shares of the Fund. The Fund will send each shareholder
annual information concerning the tax treatment of dividends and other
distributions.
Upon sale, exchange or redemption of shares of the Fund, a shareholder will
recognize short- or long-term capital gain or loss, depending upon the
shareholder's holding period in the Fund's shares. However, if a shareholder's
holding period in his shares is six months or less, any capital loss realized
from a sale or exchange of such shares must be treated as long-term capital loss
to the extent of dividends classified as "capital gains dividends" received with
respect to such shares. The maximum tax rates applicable to net capital gains
recognized by individuals and other non-corporate taxpayers are (i) the same as
ordinary income rates for capital assets held for one year or less and (ii) 20%
for capital assets held for more than one year. Capital gains or losses
recognized by corporate shareholders are subject to tax at the ordinary income
tax rates applicable to corporations.
12
<PAGE>
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.
Some shareholders may be subject to a 31% withholding tax on reportable
dividends, capital gains distributions and redemption payments ("backup
withholding"). Generally, shareholders subject to backup withholding will be
those for whom a certified taxpayer identification number is not on file with
the Fund or who, to the Fund's knowledge, have furnished an incorrect number.
When establishing an account, an investor must certify under penalties of
perjury that such number is correct and that he is not otherwise subject to
backup withholding.
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.
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 U.S. 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 also 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. Corporate shareholders must have held their shares in the Fund for
more than 45 days to qualify for the deduction on dividends paid by the Fund.
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," the Fund may be subject to U.S. 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 U.S. persons (U.S. citizens or residents and United States
domestic corporations, partnerships, trusts and estates). Each shareholder who
is not a U.S. person should consult his tax adviser regarding the U.S. and
foreign tax consequences of the ownership of shares of a Fund, including the
applicable rate of U.S. withholding tax on dividends representing ordinary
income and net short-term capital gains, and the applicability of U.S. gift and
estate taxes.
8.
INFORMATION ABOUT THE COMPANY
The Company was formed as a business trust under Delaware law on September 29,
1999. The Company offers five classes of shares: Class A, Class B, Class C,
Class P, and Class Y. Only the Fund's Class Y shares are offered in this
Statement of Additional Information. 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
13
<PAGE>
when issued and have no preemptive or conversion rights. Additional classes or
funds may be added in the future. 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.
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.
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.
9.
FINANCIAL STATEMENTS
The Statement of Net Assets at December 14, 1999 and the report of Deloitte &
Touche LLP, independent auditors, on such statements are attached hereto.
14
<PAGE>
LORD ABBETT LARGE-CAP GROWTH FUND
STATEMENT OF NET ASSETS
DECEMBER 14, 1999
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Cash $ 100,000
PREPAID OFFERING COSTS (3).............................................................. 3,000
-------
TOTAL ASSETS............................................................................$ 103,000
=======
LIABILITIES:
LIABILITIES AND ACCRUED EXPENSES 3,000
-------
NET ASSETS:.............................................................................$ 100,000
=======
NET ASSETS CONSIST OF:
Class A Shares of beneficial interest, $0.00 par value,
100,000,000 shares authorized........................................................$ 0.00
Class B Shares of beneficial interest, $0.00 par value,
100,000,000 shares authorized........................................................ 0.00
Class C Shares of beneficial interest, $0.00 par value,
100,000,000 shares authorized........................................................ 0.00
Class P Shares of beneficial interest, $0.00 par value,
100,000,000 shares authorized........................................................ 0.00
Class Y Shares of beneficial interest, $0.00 par value,
100,000,000 shares authorized........................................................ 0.00
PAID-IN CAPITAL IN EXCESS OF PAR........................................................ 100,000
-------
NET ASSETS:.............................................................................$ 100,000
=======
NET ASSET VALUE:
CLASS A - BASED ON NET ASSETS OF $ 96,000 AND 9,600 SHARES OUTSTANDING..................$ 10.00
=====
CLASS B - BASED ON NET ASSETS OF $ 1,000 AND 100 SHARES OUTSTANDING.....................$ 10.00
=====
CLASS C - BASED ON NET ASSETS OF $ 1,000 AND 100 SHARES OUTSTANDING.....................$ 10.00
=====
CLASS P - BASED ON NET ASSETS OF $ 1,000 AND 100 SHARES OUTSTANDING.....................$ 10.00
=====
CLASS Y - BASED ON NET ASSETS OF $ 1,000 AND 100 SHARES OUTSTANDING.....................$ 10.00
=====
</TABLE>
15
<PAGE>
Notes to Financial Statements
(1) Abbett Large-Cap Growth Fund (the "Fund") was organized as a Delaware
business trust on September 29, 1999 and is registered under the Investment
Company Act of 1940. To date, the Fund has not had any transactions other
than those relating to organizational matters and the sale of Class A,
Class B, Class C, Class P and Class Y shares to Lord, Abbett & Co. ("LA").
(2) The Fund has entered into an investment advisory agreement with LA and a
distribution agreement with Lord, Abbett Distributor, LLC (the
"Distributor"). (See "Management of the Funds - Management and Advisory
Arrangements" in the Statement of Additional Information.)
(3) Prepaid offering cost consist of legal fees related to preparing the
initial registration statement, and will be amortized over a 12 month
period beginning with the commencement of operations of the Fund. The
Investment Adviser has agreed to bear all the costs of organizing the Fund,
estimated to be $13,200.
<PAGE>
PART C OTHER INFORMATION
Item 23 Exhibits
--------
(a) Declaration of Trust is incorporated by reference to the
Initial Registration Statement on Form N-1A filed on
September 30, 1999.
(b) By-Laws are incorporated by reference to the Initial
Registration Statement on Form N-1A filed on September 30,
1999.
(c) Instruments Defining Rights of Security Holders not
applicable.
(d) Management Agreement is incorporated by reference to the
Initial Registration Statement on Form N-1A filed on
September 30, 1999.
(e) Distribution Agreement is incorporated by reference to the
Initial Registration Statement on Form N-1A filed on
September 30, 1999.
(f) Bonus or Profit Sharing Contract is incorporated by
reference to Post Effective Amendment No. 7 to the
Registration Statement on Form N-1A of Lord Abbett Equity
Fund (File No. 811-6033).
(g) Form of Custodian Agreement filed herewith.
(h) Form of Transfer Agency Agreement filed herewith.
(i) Legal Opinion filed herewith.
(j) Opinion of Deloitte & Touche LLP filed herewith.
Consent of Deloitte & Touche filed herewith
(k) Financial Statements filed herewith.
(l) Initial Capital Agreement filed herewith.
(m) Rule 12b-1 Plans are incorporated by reference to the
Initial Registration Statement on Form N-1A filed on
September 30, 1999.
(n) Financial Data Schedule not applicable.
(o) Rule 18f-3 Plan is incorporated by reference to the Initial
Registration Statement on Form N-1A filed on September 30,
1999.
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
<PAGE>
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 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
Daniel E. Carper Vice President
Robert G. Morris 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, Stephen J. McGruder, 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
and the Investment Company Act, the Fund has duly caused this Registration
Statement to be signed on its behalf by the undersigned, duly authorized,
in the City of New York, and State of New York on December 28, 1999.
Lord Abbett Large-Cap Growth Fund
BY:
/s/ Lawrence H. Kaplan
Lawrence H. Kaplan
Vice President
Pursuant to the requirements of the Securities Act, this registration statement
has been signed below by the following persons in the capacities and on the
date(s) indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
Chairman, President
/s/Robert S. Dow and Director/Trustee 12/28/99
- ------------------------------ -------------------- -------------------
Robert S. Dow
/s/E. Thayer Bigelow Director/Trustee 12/28/99
- ------------------------------ ---------------- --------------------
E. Thayer Bigelow
/s/William H. T. Bush Director/Trustee 12/28/99
- ------------------------------ ---------------- --------------------
William H. T. Bush
/s/Robert B. Calhoun, Jr. Director/Trustee 12/28/99
- ------------------------------ ---------------- -------------------
Robert B. Calhoun, Jr.
/s/Stewart S. Dixon Director/Trustee 12/28/99
- ------------------------------ ---------------- --------------------
Stewart S. Dixon
/s/John C. Jansing Director/Trustee 12/28/99
- ------------------------------ --------------- --------------------
John C. Jansing
/s/ C. Alan MacDonald Director/Trustee 12/28/99
- ------------------------------ ---------------- --------------------
C. Alan MacDonald
/s/Hansel B. Millican, Jr. Director/Trustee 12/28/99
- ------------------------------ ---------------- --------------------
Hansel B. Millican, Jr.
/s/Thomas J. Neff Director/Trustee 12/28/99
- ------------------------------ ---------------- ---------------------
Thomas J. Neff
Chief
/s/Joan A. Binstock Financial Officer 12/28/99
- ------------------------------ ----------------- ---------------------
Joan A. Binstock
</TABLE>
<PAGE>
FORM OF GLOBAL CUSTODY AGREEMENT
THIS AGREEMENT made the 14th day of December, 1999, by and between LORD
ABBETT LARGE-CAP GROWTH FUND, a Delaware business trust (hereinafter called the
"Trust"), and THE BANK OF NEW YORK, a banking corporation organized under the
laws of the State of New York (hereinafter called the "Custodian").
WITNESSETH:
WHEREAS, the Trust desires that all securities and cash, if any, now
held by the Trust, together with all such other securities and cash as may
hereafter be delivered or caused to be delivered by the Trust to the Custodian,
shall be hereafter held and administered by the Custodian pursuant to the terms
of this Agreement; and
WHEREAS, the Trust and the Custodian desire to provide for the
maintenance of foreign securities owned by the Trust, and cash incidental to
transactions in such securities, in the custody of certain foreign banking
institutions and foreign securities depositories acting as sub-custodians in
conformity with the requirements of Rule 17f-5 of the rules and regulations
under the Investment Company Act of 1940, as amended (the "Act");
<PAGE>
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and Custodian agree as follows:
SEC. 1. Definitions.
The words "Authorized Instructions" mean a communication given by an
Authorized Person and received by the Custodian in writing or by telephone,
facsimile transmission, telegram, teletype, cablegram or other teleprocess or
electronic instruction system which the Custodian believes in good faith to be
given by the Trust or which are transmitted with proper testing or
authentication pursuant to terms and conditions specified in writing and
provided to the Trust by the Custodian.
The words "Authorized Persons" mean those officers or agents of the
Trust who have been designated by a certificate of the Trust, a certified copy
of which has been filed with the Custodian, to act on behalf of the Trust in the
performance of any acts that Authorized Persons may do under this Agreement
pursuant to such certificate. Such persons shall continue to be Authorized
Persons until such time as there has been filed with the Custodian a certified
copy of a certificate of the Trust revoking the authority of such persons.
The word "securities" as used herein includes stocks, bonds,
debentures, notes, evidences of indebtedness, evidences of interest, warrants
and other securities, irrespective of their
2
<PAGE>
form, the name by which they may be described, or the character or form of the
entities by which they are issued or created.
The words "Foreign Custodian" shall have the meaning assigned to such
words in Section 14 hereof.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Trust by the Chairman,
President or a Vice President and the Secretary or the Treasurer or an Assistant
Secretary or an Assistant Treasurer.
The word "Depository" as used herein shall mean any "system" or
"person" contemplated by Section 17(f) of the Act in which the Custodian may,
under that Section and any rules, regulations or orders thereunder and under
Section 13 of this Agreement, deposit all or part of the securities of the
Trust.
The word "receipt" whenever used in this Agreement in connection with
receipt of securities shall mean receipt by the Custodian of: (i) securities in
bearer form or in form for transfer satisfactory to the recipient; or (ii)
written or telegraphic advice from a Depository that securities have been
credited to the account of the Custodian or a Foreign Custodian, as the case may
be, at the Depository; or (iii) written or telegraphic advice from any branch of
the Custodian doing business in the United States and/or any foreign country
that such securities in bearer form or in form for transfer have been deposited
with it.
3
<PAGE>
The word "receipt" whenever used in this Agreement in
connection with receipt of payment by the Custodian shall mean receipt by the
Custodian of: (i) cash or check certified or issued by a bank (which term as
used herein shall include a Federal Reserve Bank), trust company, member of a
national securities exchange or a Depository; or (ii) written or telegraphic
advice from a bank, trust company, registered clearing agency or a Depository
that funds have been credited to the account of the Custodian or a Foreign
Custodian, as the case may be, at one or more of the foregoing or such advice
from a registered clearing agency or a Depository that funds will be so credited
to the account of the Custodian or a Foreign Custodian, as the case may be.
The word "Series" shall mean Lord Abbett Large-Cap Growth Fund and any further
Series of the Trust from time to time created by the Board of Trustees.
SEC. 2. Names, Titles and Signatures; Securities Devices. The Trust will furnish
to the Custodian from time to time, whenever any change occurs, an officers'
certificate setting forth the names, titles and signatures of its officers, the
name of the transfer agent of its capital stock, and the names and signatures of
the officers, employees and agents thereof entitled to sign documents hereunder.
The Trust will use its best efforts to safeguard any test keys, identification
codes or other security devices with which the Custodian provides it.
4
<PAGE>
SEC. 3. Receipt, and Disbursement of Money.
A. The Custodian shall open and maintain a separate account or accounts
in the name of the Trust with respect to assets belonging to each Fund and shall
hold in such account or accounts all cash received by it for the account of the
Trust. The Custodian shall make payments of cash to, or for the account of, the
Trust pertaining to a particular Series from such cash accounts only (a) upon
the purchase of securities for the portfolio of such Series against receipt by
it of such securities, (b) for the purchase or redemption of shares of such
Series; (c) for the payment of dividends, taxes, management or supervisory fees,
operating expenses or other liabilities belonging such Series, (d) for payments
in connection with the conversion, exchange or surrender of securities owned by
the Trust and belonging to such Series, (e) for payments in connection with the
return of securities loaned by the Trust and belonging to such Series or the
reduction of cash collateral held by the Custodian with respect to such
securities, (f) for the transfer of funds to a Depository or a Foreign
Custodian, as the case may be, or (g) for other proper corporate purposes
pertaining to such Series. In making any such payment pursuant to clause (a)
above, the Custodian shall first receive Authorized Instructions (which may be
given by an officers' certificate) requesting such a payment. If such Authorized
Instructions pursuant to clause (a) above are not given by an officers'
certificate, then promptly following such
5
<PAGE>
payment, the Trust shall furnish to the Custodian an officers' certificate
confirming the request for such payment. In making any such other payment, the
Custodian shall first receive an officers' certificate requesting such payment
and stating the clause of this subsection A pursuant to which such payment is
permitted, any additional evidence specifically called for in this subsection A,
and for the purposes of clause (g) above, the Custodian shall also receive a
resolution of the Board of Trustees of the Trust signed by an officer of the
Trust and certified by its Secretary or an Assistant Secretary, setting forth
the purposes of such payment, declaring such purposes to be proper trust
purposes pertaining such Series, and naming the person or persons to which such
payment is to be made.
B. The Custodian is hereby authorized to endorse and collect all
checks? drafts or other orders for the payment of money received by the
Custodian for the account of the Trust.
SEC. 4. Receipt of Securities.
The Custodian agrees to hold in the separate account opened and
maintained for the Trust all securities received by the Custodian for the
account of the Trust and belonging to such Series which may now or hereafter be
delivered to it by or for the account of the Trust. All securities of the Trust
in the custody of the Custodian are to be held or disposed of, subject at all
times to the instructions of, the Trust pursuant to the terms of this
Agreement.
6
<PAGE>
SEC. 5. Transfer, Exchange, Delivery, etc., of Securities.
The Custodian shall have sole power to release or deliver any
securities of the Trust held by it pursuant to this Agreement. The Custodian
shall transfer, exchange or deliver securities held by it hereunder belonging to
a particular Series only (a) upon sales of such securities for the account of
the Trust and receipt by Custodian of payment therefor, provided that, in the
case of sales of physical securities within the United States, the Custodian may
transfer or deliver securities physically held by it in accordance with the
customs prevailing in the market for such securities under which such securities
are delivered to a broker (specified by the Trust by Authorized Instructions as
provided below) for examination by such broker against such broker's receipt,
(b) when such securities are called, redeemed or retired or otherwise become
payable, (c) in exchange for or upon conversion into other securities or cash
whether pursuant to any plan of merger, consolidation, reorganization,
recapitalization or readjustment, or otherwise, (d) upon conversion of such
securities pursuant to their terms into other securities, (e) upon exercise of
subscription, purchase or other similar rights represented by such securities,
(f) for the purpose of exchanging interim receipts or temporary securities for
definitive securities, (g) for the purpose of redeeming in kind shares of such
Series, (h) for loans of such securities by the Trust, or for the return of
securities held as collateral in connection with such loans, upon receipt by the
7
<PAGE>
Custodian of security in form of cash or its equivalent equal to 100% of the
fair market value of such securities, (i) upon deposit of such securities owned
by the Trust in a Depository or with a Foreign Custodian, or (j) for other
proper corporate purposes pertaining to such series, but only, for purposes of
this clause (j), upon receipt of a resolution of the Board of Trustees, signed
by an officer of the Trust and certified by its Secretary or Assistant
Secretary, specifying the securities to be delivered, setting forth the purposes
for which such delivery is to be made, declaring such purposes to be proper
trust purposes pertaining to such Series, and naming the person or persons, each
of whom shall be stated in such resolution to be an officer or employee of the
Trust bonded against larceny or embezzlement, to whom delivery of such
securities shall be made. In making any such transfer, exchange or delivery
pursuant to clause (a) above, the Custodian shall first receive Authorized
Instructions (which may be given by an officers' certificate) requesting such
transfer, exchange or delivery. If such Authorized Instructions pursuant to
clause (a) above are not given by an officers' certificate, then promptly
following such transfer, exchange and delivery, the Trust shall furnish to the
Custodian an officers, certificate requesting such transfer, exchange or
delivery. In making any such other transfer, exchange or delivery, the Custodian
shall first receive an officers' certificate requesting such transfer, exchange
or delivery and stating the clause of this Section 5 pursuant to which such
transfer, exchange or
8
<PAGE>
delivery is permitted, and any additional evidence specifically called for in
this Section 5. For the purposes of clause (h) above, the officers' certificate
shall also identify the securities to be delivered and shall state the loan
agreement under which the delivery is to be made, the date of delivery, the name
of the borrower and the amount and description of collateral to be received in
connection therewith.
SEC. 6. Custodian's Acts Without Instructions.
Unless and until the Custodian receives an officers, certificate to
the contrary, the Custodian shall:
(a) Take such steps as may reasonably be necessary to secure or
otherwise prevent the loss of rights relating to any securities held by it for
the account of the Trust and belonging to a particular Series, Provided that the
Custodian's (i) timely monitoring of investment data provided by one or more
recognized international investment data services identified to the Trust and
whose data pertains to each relevant market and (ii) prompt action in respect
thereof will be deemed to fulfill the Custodian's obligations under this
paragraph (a) with respect to corporate actions;
(b) Present for payment all coupons and other income items held by it
for the account of the Trust which call for payment upon presentation, and hold
the cash received by it upon such payment for the account of the Trust, any
advance of the collections of funds or other property paid or distributed with
respect to any securities shall be made subject to final payment.
9
<PAGE>
(c) Collect interest and cash dividends received, and other income of
any kind, with notice to the Trust, for the account of the Trust with respect to
the Series to which they belong;
(d) Hold for the account of the Trust with respect to the Series to
which they belong all stock dividends, rights and similar securities issued with
respect to any securities held by it hereunder; and,
(e) Execute as agent on behalf of the Trust all necessary ownership
certificates required by the Internal Revenue Code or the Income Tax Regulations
of the United States Treasury Department now or hereafter in effect, inserting
the Trust's name on such certificates as the owner of the securities covered
thereby, to the extent it may lawfully do so.
SEC. 7. Registration of Securities.
The Custodian shall register all securities, except such as are in
bearer form or held by a Depository or a Foreign Custodian (except as otherwise
directed by an officers' certificate), in the name of a registered nominee of
Custodian as defined in the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder or in any provision of any subsequent
Federal Tax Law exempting such transaction from liability for stock transfer
taxes and shall execute and deliver all such certificates in connection
therewith as may be required by such laws or Regulations or under the laws of
any State. The Trust will hold any such nominee harmless from any liability as a
holder of record of such securities. The Custodian shall use its
10
<PAGE>
best efforts to the end that the specific securities held by it hereunder shall
be at all times identifiable. The Trust shall from time to time furnish to the
Custodian appropriate instruments to enable the Custodian to hold or deliver in
proper form for transfer, or to register in the name of its registered nominee,
any securities which it may hold for the account of the Trust and which may from
time to time be registered in the name of the Trust.
SEC. 8. Voting and Other Action.
Neither the Custodian nor any nominee of the Custodian shall vote any
of the securities held hereunder by or for the account of the Trust, except in
accordance with the instructions contained in an officers' certificate. The
Custodian shall execute and deliver, or cause to be executed and delivered, to
the Trust all notices, proxies and proxy soliciting materials with relation to
such securities, but without indicating the manner in which such proxies are to
be voted.
SEC. 9. Transfer Taxes and other Disbursements.
The Trust shall pay or reimburse the Custodian from time to time for
any transfer taxes payable upon transfers of securities made hereunder, and for
all other necessary and proper disbursements and expenses made or incurred by
the Custodian in the performance of this Agreement.
The Custodian shall execute and deliver such certificates in connection
with securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal
<PAGE>
Revenue Code and any Regulations of the Treasury Department issued
thereunder, or under the laws of any State, to exempt from taxation any
exemptible transfers and/or deliveries of any such securities.
SEC. 10. Custodian's Liability.
In taking any action called for by this Agreement, the Custodian shall
be entitled in good faith to rely upon the officers' certificate (or, in the
case of Sections 3A. (a) and 5(a), Authorized Instructions) and other evidence
specifically called for by the appropriate section of this Agreement. The Trust,
its successors and assigns shall at all times fully indemnify and save harmless
the Custodian, its successors and assigns, from any and all liability whatsoever
which may arise out of the obligation of the Custodian to perform the things to
be done by it under this Agreement. Nothing herein shall exempt the Custodian
from liability due to its own negligence or willful misconduct or the negligence
or willful misconduct of a Foreign Custodian or DTC. The Custodian is not under
any duty under this Agreement to provide the Trust with investment advice or to
supervise (in an advisory capacity) its investments.
SEC. 11. Reports.
The Custodian shall advise the Trust with respect to transactions for
the account of the Trust and with respect to each Series and shall report as to
the composition of the Trust's assets belonging to each Series at such times as
the Trust shall reasonably request. The books and records of the
12
<PAGE>
Custodian pertaining to its actions under this Agreement shall be open to
inspection and audit at reasonable times by the Trust's officers and auditors.
The Custodian shall also furnish information as reasonably requested by the
Trust in order to enable the Trust to comply with applicable laws and
regulations. Such information shall include, but not be limited to,
identification (quarterly and as such information is received) of all non-United
States entities having actual physical possession of cash and securities of the
Trust.
SEC. 12. Custodian Compensation.
The Custodian shall be paid as compensation for its services pursuant
to this Agreement such compensation as may from time to time be agreed upon
between the two parties.
SEC. 13. Depositories
The parties agree that, as of the date of this Agreement, the
Depositories in which deposits of securities may be made are The Federal
Reserve/Treasury Book Entry System (the "System"), Depository Trust Company
("DTC"), subject to the terms and conditions of this Section 13 and Section 14.
Other Depositories may be used under this Agreement if both parties consent in
writing to the use thereof; any such use shall be subject to the terms and
conditions of this Section 13 applicable to the System, DTC
13
<PAGE>
the extent, if any, to which such terms and conditions are changed in any such
consent or consents.
In using Depositories under this Agreement, the parties will comply
with the terms and conditions of Rule 17f-4 and, Rule 17f-5 under the Act, and
such terms and conditions the parties hereto agree, and such terms and
conditions shall supersede conflicting provisions of this Agreement. Nothing
herein shall be deemed to require that the Custodian ascertain, as a condition
to the use of the System, DTC, that any required action has been taken by the
Board of Trustees of the Trust. Notwithstanding the use of any Depository or
Foreign Custodian hereunder, the securities and the funds of the Trust at all
times will be deemed to be in the custody of, and maintained by, the Custodian,
and the Custodian will indemnify and save harmless the Trust for any losses (i)
caused by the use of a Depository (other than DTC) or (ii) caused by the
negligence or willful misconduct of a Foreign Custodian or DTC.
If and to the extent that a Depository permits the withdrawal of a
security from it in certificate form and the Trust requires a certificate for
making a loan or otherwise, the Custodian shall take all necessary and
appropriate action to obtain such certificate upon receipt of an officers'
certificate requesting the same.
The Trust has agreed to use DTC's Institutional Delivery (ID) system
which will provide it with broker trade
14
<PAGE>
confirmations of certain securities transactions which it has entered into.
After comparing the trade data with each confirmation, the Trust shall affirm to
DTC electronically all trades whose confirmations accurately reflect the trades
which it has entered into, such affirmations constituting its instructions to
deliver or receive portfolio assets of the Trust. Upon receipt of each
affirmation, DTC has been instructed to send appropriate instructions to the
Custodian in the form of an "Eligible Trade Report". In the event a broker's
trade confirmation does not accurately reflect the transaction in question, the
Trust shall not affirm the transaction in question in which event DTC has been
instructed not to send the Custodian instructions with respect to such trade
confirmation.
Accordingly, anything in this agreement to the contrary
notwithstanding, whenever securities transactions of the Trust are to be settled
through the DTC ID system, or through a similar depository system, the Custodian
shall be authorized to act in accordance with, and shall be entitled to rely on,
and be protected in acting on, those instructions received by it on the Eligible
Trade Report through such depository system to the same extent as if the
information contained in such instructions was given in an officers'
certificate, signed by officers of the Trust. In the event that such depository
system for any reason does not furnish the Custodian with an Eligible Trade
Report, the Trust shall provide the Custodian with an officers' certificate
<PAGE>
with the same information such Report otherwise would have contained.
SEC. 14. Employment of Subcustodians; Euro-clear Subcustodians.
(a) The Trust hereby authorizes the Custodian to employ as
subcustodians for securities and other assets owned by the Trust and maintained
outside the United States, the foreign banking institutions which are "eligible
foreign custodians" as such term is defined in paragraph (c)(2) of Rule 17f-5
under the Act and which are listed in Exhibit A attached hereto (when such
entities are employed by the Custodian pursuant to the terms hereof, "Foreign
Custodians"). The Foreign Custodians may hold securities and other assets of the
Trust in the countries set forth opposite their respective names in Exhibit A.
As part of its use of the Euro-clear System, securities and other assets owned
by the Trust may also be held in the countries and by the banks listed on
Exhibit A as Euro-clear Subcustodians (the "Euroclear Subcustodians") which are
"eligible foreign custodians" as so defined or is an overseas branch of a
"qualified U.S. bank" as defined in paragraph (c)(3) of Rule 17f-5 under the
Act.
(b) Exhibit A may be expanded from time to time pursuant to one or
more letter agreements approved by the Trust's Board of Trustees. If the Trust
advises the Custodian that a majority of the Board of Trustees has determined
that (i) a foreign banking institution or the Euro-clear Subcustodian listed on
Exhibit A hereto, as the same may be supplemented as provided above, or the
Euro-clear System, may no longer be considered an "eligible
16
<PAGE>
foreign custodian" under Rule 17f-5 under the Act, (or, in the case of an
overseas branch of a U.S. bank, if such U.S. bank may no longer be considered a
"qualified U.S. bank" under Rule 17f-5 under the Act) and is not the subject of
an exemptive order of the Securities and Exchange Commission under the Act, or
(ii) continuance of the arrangement with any such entity would not otherwise be
consistent with the best interests of the Trust and its shareholders, the
Trust's assets shall be withdrawn from the care of such foreign banking
institution or such Euro-clear Subcustodian or the Euro-clear System (or such
overseas branch of a U.S. bank), as the case may be, as soon as reasonably
practicable, and in any event within 180 days of the date the trustees make such
determination.
(c) Notwithstanding the use hereunder of a Foreign Custodian or a
Depository, the Custodian will at all times maintain a separate account or
accounts in the name of the Trust with respect to assets belonging to each
Series and shall maintain such account or accounts for any and all cash and/or
securities which are from time to time received for the account of the Trust in
respect of such Series and which are held by a Foreign Custodian or a Depository
pursuant to the terms hereof.
(d) The Custodian's employment of any Foreign Custodian under this
Agreement shall be governed by a written agreement substantially in the form
attached hereto as Exhibit B.
(e) The use of the Euro-clear System under this Agreement shall be in
accordance with the Terms and Conditions Governing
17
<PAGE>
the Use of Euro-clear, as supplemented or amended from time to time (the
"Euro-clear Terms"), a current copy of which document is attached hereto as
Exhibit C, and with Rule 17f-5 under the Act.
(f) The Custodian (A) will confirm to the Trust in writing by February
1 in each year that each Foreign Custodian and each Euro-clear Subcustodian
continues to be an "eligible foreign custodian" as defined in Rule 17f-5 under
the Act and that the provisions contained in paragraphs (d) and (e) above are
being complied with and (B) will advise the Trust immediately in writing if any
Foreign Custodian or Euro-clear Subcustodian ceases to be an "eligible foreign
custodian" as so defined (or, in the case of a Euro-clear Subcustodian which is
an overseas branch of a U.S. bank, if such bank ceases to be a "qualified U.S.
bank" as defined in Rule 17f-5 under the Act) or if any such provision is not
being complied with. The Custodian will also advise the Trust promptly of any
significant amendment to any subcustodian agreement with any Foreign Custodian
or the Euroclear Terms, if it learns of any significant change in the insurance
maintained by any Foreign Custodian, the Euro-clear System or any Euro-clear
Subcustodian from the insurance previously described by the Custodian to the
Trust, or if it learns of any significant change in the substance of any of the
opinions of Counsel obtained by the Custodian in connection with its employment
of Foreign Custodians (including, without limitation, changes with respect to
(i) assets of the Trust
18
<PAGE>
being subject to any right, charge, security, interest, lien or claim, or (ii)
beneficial ownership of securities), from the description of such opinions of
Counsel furnished to the Trust. (g) Until the Custodian receives an officers'
certificate to the contrary, the Custodian will instruct each Foreign Custodian
to:
(1) deposit all cash received for the benefit of the Trust in
a deposit account maintained by the Foreign Custodian in the name of
the Custodian and to make payments of such cash only to the extent the
Custodian is authorized to make such payments pursuant to Section 3 of
this Agreement;
(2) transfer, exchange or deliver securities owned by the Trust
only to the extent the Custodian is authorized to make such transfers,
exchanges or deliveries pursuant to Section 5 of this Agreement,
provided that the Foreign Custodian may make delivery of securities
and accept payment therefor in accordance with the customs prevailing
in the particular market or among securities dealers in such market;
Provided further that if such customs include, in the case of delivery
of physical securities, delivery against receipt of payment therefor,
the Custodian will instruct the Foreign Custodian to make delivery in
that manner;
19
<PAGE>
(3) vote securities owned by the Trust only
in accordance with the instructions contained in an
officers, certificate as provided in Section 8 of
this Agreement;
(4) maintain securities owned by the Trust
with the Euro-clear System only in accordance with
the provisions of this Section 14 and maintain
securities owned by the Corporation with no
securities depository or clearing agency other than
the Euro-clear System except to the extent other
Depositories have been consented to pursuant to
Section 13 of this Agreement;
(5) take such steps (to be specified in such
instructions) as may reasonably be necessary to
secure or otherwise prevent the loss of rights
relating to any securities owned by the Trust,
provided that it shall be understood that the
custodian's (i) timely monitoring of investment data
provided by one or more recognized international
investment data services identified to the Trust and
whose data pertains to each relevant market and (ii)
prompt instructions to the appropriate Foreign
Custodian in respect thereof will be deemed to
fulfill the Custodian's obligations under this
paragraph;
(6) promptly notify the Custodian upon
receiving notices or reports of corporate actions
affecting any securities owned by the Trust;
<PAGE>
(7) on a timely basis, present for payment maturing obligations
and those called for redemption to the extent that the Foreign
Custodian receives notice of such opportunities for payment and hold
monies received upon presentation of such maturing obligations for
credit to the account maintained pursuant to paragraph (g)(1) of this
Section 14;
(8) execute in the name of the Custodian such ownership and
other certificates as may be required to obtain payment in respect of
any securities owned by the Trust;
(9) accept, open and act appropriately with respect to all mail
directed to the Trust or the Custodian in care of the Foreign Custodian
relating to any securities or cash belonging to the Trust;
(10) disclose the Trust's name, address and securities position to
the issuers of securities belonging to the Trust when requested to do
so by such issuers; and
(11) deal with fractional interests received by the Foreign Custodian as a
result of stock dividends by buying the additional fractional interest needed to
obtain a full share.
(h) Securities owned by the Trust may be registered in the name of the
Foreign Custodian's nominee to the same extent as set forth in Section 7 hereof.
The Trust will hold any such nominee harmless from any liability as a holder of
record of such securities.
21
<PAGE>
sec. 15. Termination or Assignment of Agreement.
This Agreement may be terminated by the Trust on thirty days' notice or
by the Custodian on sixty days' notice given in writing and sent by registered
mail to the Custodian at 23 Wall Street, New York, N.Y. 10015, or to the Trust,
at 767 Fifth Avenue, New York, N.Y. 10153, as the case may be.
Upon any termination of this Agreement, including any termination
pursuant to Section 16 hereof, the Custodian shall not be required to make any
delivery or payment of cash and securities held by it hereunder until full
payment shall have been made by the Trust of all liabilities constituting a
charge on or against the cash and securities held by the Custodian or on or
against the Custodian, and until full payment shall have been made to the
Custodian of all its fees, compensation, cost and expenses, or until the
Custodian shall have been furnished with security and indemnity satisfactory to
it against any liability, obligation, fees, compensation, cost or expense in
connection with this Agreement or on account of any action taken or omitted by
the Trust or its officers or directors under this Agreement.
This Agreement may not be assigned by the Custodian without the consent
of the Trust, authorized or approved by a resolution of its Board of Trustees.
SEC. 16. Successors.
A. Upon any termination of this Agreement, or in case at any time the
Custodian shall tender its resignation or shall be removed or dissolved, or
otherwise shall become incapable of
22
<PAGE>
acting, or in case control of the Custodian or of its offices shall be taken
over by any public officer or officers, (a) the Trust, by an officers'
certificate furnished to the Custodian, may (i) designate a successor, to whom
the Custodian shall thereupon deliver all cash and securities of the Trust held
by it, or held in its name by a Depository, or held by a Foreign Custodian, or
(ii) specify the names of the persons or entities to whom all cash and
securities of the Trust shall be delivered or paid, or (iii) certify that the
stockholders of the Trust have duly voted that it function without a qualified
bank or trust company to hold its cash and securities and request delivery of
all cash and securities to it, in which case the Custodian shall thereupon
deliver to the Trust all cash and securities held by it or held in its name by a
Depository, or held by a Foreign Custodian, or (b) in the absence of any
officers' certificate pursuant to (i), (ii) or (iii) within a period of 60 days
after such resignation, removal, dissolution, incapacity or taking over, the
Custodian may deliver any cash and securities of the Trust held by it or held in
its name by a Depository or held by a Foreign Custodian to a bank or trust
company in the City of New York, having a capital, surplus and undivided profit
aggregating not less than $5,000,000 selected by it, such cash and securities to
be held subject to the same terms as those set forth in this Agreement. Any
successor appointed by the Trust or selected by the Custodian shall immediately
and without further act be superseded by a successor appointed by the
23
<PAGE>
holders of not less than a majority of the shares of the capital stock of the
Trust at the time outstanding.
B. Any bank or trust company in or into which the Custodian or any
successor hereunder may be merged or converted, or with which it or any such
successor may be consolidated, or any bank or trust company resulting from any
merger, conversion or consolidation to which the Custodian or any such successor
shall be a party, or any bank or trust company succeeding to the business of the
Custodian or any such successor, shall be substituted as successor under this
Agreement and any amendments thereof and all agreements hereunder without the
execution of any instrument or any further act on the part of the Trust or any
such successor, provided such bank or trust company be a national banking
association or trust company or banking corporation organized under the laws of
the United States of any State thereof and have a capital, surplus and undivided
profits aggregating not less than $5,000,000.
C. Any successor resulting from the provisions of subsections A or B
above shall be vested with all the powers, duties and obligations of its
predecessor under this Agreement and any amendments thereof and agreements
hereunder and shall succeed to all the exemptions and privileges of its
predecessor under this Agreement and any amendments thereof and agreements
hereunder.
24
I
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and their respective corporate seals to be affixed hereto as of the
date first above written by their respective officers thereunto duly authorized.
Executed in four counterparts, each of which is an original.
LORD ABBETT LARGE-CAP GROWTH FUND
By
Vice President,
(Seal)
Attest,
Assistant Secretary
The Bank of New York
BY:
Vice President
(Seal)
Attest:
Assistant Secretary
25
<PAGE>
FORM OF TRANSFER AGENCY AGREEMENT
A G R E E M E N T
THIS AGREEMENT, made as of the 14th Day of December 1999
by and between Lord Abbett Large-Cap Growth Fund,a Delaware business trust,
having its principal office and place of business at 767 5th Ave., New York, NY,
and on or about January 17, 2000, 90 Hudson Street, Jersey City, NJ (hereinafter
called the "Trust"), and UNITED MISSOURI BANK OF KANSAS CITY, N. A., a national
banking association, having its principal office and place of business at Kansas
City, Missouri (hereinafter sometimes called the "Bank" or "Transfer Agent"),
WITNESSETH:
WHEREAS, the Trust desires to appoint the Bank as Transfer Agent
and Dividend Disbursing Agent, and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
Section 1. Certain Representations and Warranties of the Bank.
The Bank represents and warrants to the Trust that:
1.01 It is a national banking association duly organized and
existing and in good standing under the laws of the
United States of America.
1.02 It is duly qualified to carry on its business in the State of
Missouri.
1.03 It is empowered under applicable laws and by its charter
and by-laws to enter into and perform the services
contemplated in this Agreement.
1.04 All requisite trust proceedings have been taken to
authorize it to enter into and perform this Agreement.
1.05 It has or has available to it, and will continue to have
available and cause to be maintained, the necessary
facilities, equipment and personnel to perform its duties
and obligations under this Agreement.
Sention 2. Certain Representations and Warranties of the Trust.
The Trust represents and warrants to the Bank that:
2.01 It is a business trust duly organized and existing and in
good standing under the laws of the State of Delaware.
2.02 It is an open-end diversified management investment
company registered under the Investment Company Act of 1940
2.03 A registration statement under the Securities Act of 1933
is currently effective with respect to all shares of
the Trust being offered for sale.
2.04 All requisite steps have been taken to register the Trust's
shares for sale in all states in which the Trust's shares
are now offered for sale through independent dealers, and
the Trust has no notice of any stop order or other
proceeding in any such state affecting such registration or
the sale of the Trust's shares.
2.05 The Trust is empowered under applicable laws and by its
charter and by-laws to enter into and perform this
Agreement; and, when authorized by its Board of Trustees,
all requisite trust proceedings will have been taken to
authorize it to enter into and perform this Agreement.
Section 3. Scope of Appointment.
3.01 Subject to the conditions set forth in this Agreement, the
Trust hereby employs and appoints the Bank as Transfer
Agent and Dividend Disbursing Agent effective December 14,
1999.
3.02 The Bank hereby accepts such employment and appointment
and agrees that on and after December 14, 1999, it will
act as the Trust's Transfer Agent and Dividend Disbursing
Agent. The Bank agrees that it will also act as agent in
connection vith the Trust's Periodic Investment Program
and Periodic Withdrawal Plan accounts and other
accumulation, open-account or similar plans for
shareholders and that it vill provide services as
custodian of Keogh plans and IRA plans for shareholders
of mutual funds managed by Lord, Abbett & Co. vhich are
approved and accepted by the Bank.
3.03 The Bank agrees to provide the necessary facilities, equipment and
personnel to perform its duties and obligations hereunder in accord&nee
vith the best industry practice.
3.04 The Trust states that as of December 14, 1999, all of its
existing shareholder and account records or such thereof as are deemed
necessary for the performance of the duties of the Transfer Agent
hereunder are in the possession of Data-Sys-Tance, Inc., 114 West 11th
Street, Kansas City, Missouri (hereinafter called "DST"), and that the
Transfer Agent is entitled to rely on the correctness and accuracy of
all such records in the performance of its duties as required by this
Agreement.
3.05 The Bank agrees that it vill perform all of the usual and ordinary
services as Transfer Agent and Dividend Disbursing Agent and as agent
for the various shareholder accounts, including, without limitation,
the following: issuing, transferring and cancelling stock
certificates, maintaining all shareholder accounts, preparing
shareholder meeting lists, mailing proxies, receiving and tabulating
proxies, mailing shareholder reports and prospectuses, vithholding
taxes on non-resident alien accounts, preparing and mailing checks for
disbursement of income dividends and capital gains distributions,
preparing and filing U. S.
<PAGE>
Treasury Department Form 1099 for all shareholders,
preparing and mailing confirmation forms to shareholders and
dealers with respect to all purchases and liquidations of
Trust shares and other transactions in shareholder accounts
for which confirmations are required, preparing and mailing
dealer commission statements and dealer commission checks,
recording reinvestment& of dividends and distributions in
Trust shares, recording redemptions of Trust shares and
preparing and sailing checks for payments upon redemption
and for disbursements to withdrawal plan holders. The Bank
has reviewed the requirements of the Trust set forth in
Exhibit A hereto and represents and warrants that it will be
able to, and agrees that it will, fulfill such requirements
as and when requested by the Trust.
Section 4. Fees and Expenses.
4.01 For the services to be rendered by the Bank pursuant to
this Agreement, the Trust agrees to pay to the Bank a
reasonable compensation as agreed upon in writing between
the Trust and the Bank for all services rendered as
Transfer Agent and Dividend Disbursing Agent, taking into
account among other factors the lowest rates which the Bank
and its sub-agent, if any, charge other mutual funds for
similar services and economies resulting from increased
volume of business and from reduced costs to the Bank and
its sub-agent, if any. One-twelfth (1/12th) of the annual
maintenance fee agreed upon per shareholder account shall
be paid on the fifth (5th) day of each month. Each monthly
payment shall be recalculated by multiplying 1/12th oetge
annual maintenance fee times the highest number of open
shareholder accounts existing at any time during the
previous month; provided, however,that any service fees or
charges other than transcript fees paid to the Transfer
Agent or its sub-agent, if any, by the Trust's shareholders
or by dealers shall be applied toward such monthly payments
by the Trust.
4.02 The Trust agrees to promptly reimburse the Bank for all
reasonable out-of-pocket expenses or advances incurred by it
and by its subagent, if any, in connection with the
performance of services under this Agreement, for postage
(and first class mail insurance in connection with mailing
stock certificates), envelopes, check forms, continuous
forms, forms for reports and statements, stationery, and
other similar items, telephone and telegraph charges
incurred in answering inquiries from dealers or shareholders
(unless due to errors of the Bank or its sub-agent, if any),
and microfilm used each year to record the previous year's
transactions in shareholder accounts and computer tapes used
for permanent storage of records.
4.03 The Bank agrees to pay or cause its sub-agent, if any, to
pay the entire cost of providing one telephone circuit for
voice and data transmission between the offices in Kansas
City, Missouri, where the computer equipment on which the
shareholder records are maintained is located, and the
Trust's offices in New York City.
Section 5. Efficient Operation of System.
5.01 In connection with the performance of its services under
this Agreement, the Bank assumes full responsibility for the
accurate and efficient functioning of the system used for
the establishment and maintenance of shareholder records at
all times, including without limitation:
(a) The accuracy of all entries In the Bank's records reflectIng orders and
instructions received from dealers, shareholders, the Trust or its
principal underwriter;
(b) The continuous availability and the accuracy of shareholder lists,
shareholder account verifications, confirmations and other shareholder
account information to be produced from its records or data;
(c) The accurate and timely issuance of dividend and distribution checks
in accordance with instructions received from the Trust;
(d) The accuracy of redemption transactions and payments in accordance with
redemption instructions received from dealers, shareholders or the
Trust;
(e) The deposit daily in the Trust's appropriate special bank account of all
checks and payments received from dealers or shareholders for investment
in shares;
(f) The requiring of proper forms of instructions, signatures and signature
guarantees and any necessary documents supporting the legality of
transfers, redemptions and other shareholder account transactions, all
in conformity with the Transfer Agent's present procedures with such
changes as may be required or approved by the Trust; and
(g) The maintenance of a current duplicate set of the Trust's essential
records at a secure distant location, in form available and usable
forthwith in the event of any breakdown or disaster disrupting its main
operation.
Section 6. Indemnification.
6.01 Except to the exteAt that the Bank or its sub-agent, if
any, is covered by and receives payment from any insurance
required hereunder, the Bank shall not be responsible for,
and the Trust shall hold harmless and indemnify the Bank
from and against any loss or liability to the Trust or
third parties (and expenses including attorney's fees in
connection with any claim or suit asserting any such
liability) arising out of or attributable to actions taken
by the Bank or its sub-agent, if any, pursuant to this
Agreement, provided that the Bank and its sub-agent, if
any, have acted in good faith, with due diligence and
without negligence. The matters covered by this
indemnification include but are not limited to the
following:
(a) Errors or omissions in records and documents received
by DST, the prior Transfer Agent, which, prior to the
appointment of DST, had been prepared and/or maintained by
the Trust, Morgan Guaranty Trust Company of New York or any
other person or firm on behalf of the Trust, and which were
relied on by DST;
(b) Actions under this Agreement in reliance on, or in
the carrying out of, any instructions or requests
of the Trust or its officers (it being agreed that
the Bank or its sub-agent, if any, may apply to
the Trust for instructions whenever it is deemed
advisable);
(c) Actions under this Agreament taken or omitted by
the Bank or its sub-agent, if any, in good faith
in reliance on an opinion of outside legal counsel
for the Bank or for the Trust; and
<PAGE>
(d) Actions of the Bank or its sub-agent, if any, under
this Agreement in reliance upon any certificate or
document rea sonably believed by it to be genuine
and to have been signed by (or bear the proper
facsimile signature of) the proper person or
persons.
The Trust shall be responsible for, and shall have the right
to conduct or control the defense of any litigation
asserting liability against which the Bank or its
sub-agent,if any, is indemnified hereunder.
6.02 The Bank shall hold harmless and indemnify the Trust from
and against any loss or liability arising out of the Bank's
failure to comply with the terms of this Agreement or
arising out of the Bank's negligence or misconduct.
Section 7. Certain Covenants of the Bank and the Trust.
7.01 All requisite steps will be taken by the Trust from time to
time when and as necessary to register the Trust's shares
for sale in all states in which the Trust's shares shall at
any time be offered for sale through independent dealers.
If at any time the Trust shall receive notice of any stop
order or other proceeding in any such state affecting such
registration or the sale of the Trust's shares, or of any
stop order or other proceeding under the Federal securities
laws affecting the sale of the Trust's shares, the Trust
will give prompt notice thereof to the Bank.
7.02 The Bank hereby agrees to establish and maintain or to
cause to be established and maintained facilities and
procedures reasonably acceptable to the Trust for
safekeeping of stock certificates, check forms,and
facsimile signature imprinting devices, if any; and for the
preparation or use, and for keeping account of, such
certificates, form and devices and to cause its sub-agent,
if any, to carry insurance as specified in Exhibit 3 hereto
with insurers acceptable to the Trust which insurance shall
be in the minimum amounts specified in Exhibit 3 and which
shall not be changed without the consent of the Trust,and
will be expended in coverage or increased in amounts from
time to time if and when reasonably requested by the Trust.
7.03 To the extent required by Section 31 of the Investment Company Act of
1940 and Rules thereunder, the Bank agrees that all records
maintained by the Bank or by its sub-agent, if any, relating to the
services to be performed by the Bank under this Agreement are the
property of the Trust and will be preserved and will be surrendered
promptly to the Trust on request.
7.04 The Bank agrees to cause its sub-agent, if any, to give the Trust two
months written notice before commencing work on any now business at
its location in Kansas City, Missouri. Such notice shall state the
name of the company for whom work will be done, the number of its
shareholders and shall explain the manner in which the sub-agent
intends to add the new accounts without affecting the quality of its
services to the Trust on behalf of tne Bank.
7.05 The Bank agrees to furnish and to cause its sub-agent, if any, to
furnish the Trust semi-annual reports of its financial condition,
consisting of a balance sheet, earnings statement and any other
financial information reasonably requested by the Trust. The annual
financial statements of the sub-agent, if any, shall be certified by
the certified public accountants for such sub-agent.
9
<PAGE>
7.06 The Bank will cause its sub-agent, if any, to represent and
agree that it will use its best efforts to keep current on
the trends of the investment company industry relating to
shareholder services and to agree that it will use its best
efforts to continue to modernize and improve its system
without additional costs to the Trust.
7.07 The Trust and its authorized representatives will be
permitted to make periodic inspections of the mutual funds
operations of the Bank and the operations of the Bank's
sub-agent, if any, at reasonable times during business
hours.
Section 8. Termination of Agreement.
8.01 This Agreement may be terminated by either party by one
(1) year's written notice to the other.
8.02 The Trust, in addition to any other rights and remedies,
shall have the right to terminate this Agreement forthwith
upon the occurrence at any time of any of the following
events: (a) Any interruption or cessation of operations by
the Bank or its sub-agent, if any, which materially
interferes with the business operation of the Trust; (b)
Insolvency or bankruptcy of the Bank or the Bank's
sub-agent, if any;
(c) Any merger, consolidation or sale of substantially
all the assets of the Bank or the Bank's sub-agent,
if any;
(d) The acquisition of the Bank's sub-agent, if any, or
a con trolling interest therein by any broker,
dealer, investment adviser or investment company;
or I
(e) Failure by the Bank or its sub-agent, if any, to
perform its duties in accordance with this
Agreement which failure materially adversely
effects the business operations of the Trust and
which failure continues for sixty
(60) days after written notice from the Trust.
8.03 If at any time this Agreement shall be terminated by the Trust pur
suant to clause (a), (b) or (e) of paragraph 8.02, the Trust shall
have and is hereby granted the right, at its option, to use or
cause its agents, employees or independent contractors to use, for
as long as the Trust deems necessary for its own operations, and no
other, and without payment of any cumpensation or reimbursement to
the Bank or its sub-agent, if any, the system then being used to
process and maintain the Trust's shareholder records, including all
of the programs, manuals and other materials and information
necessary to operate the system.
Section 9. Agency Regulations.
9.01 Except as otherwise provided in this Agreement, the
appointment of the Bank as Transfer Agent and Dividend
Disbursing Agent shall require that its sub-agent, if any,
shall be subject to the terms of the Mutual Fund Transfer
Agency Regulations of DST (other than paragraphs 7, 12, 13
and 14), a copy of which is attached hereto as Exhibit C.
With respect to paragraphs 29 and 33 of said Regulations,
it is understood and agreed that funds for the payment of
dividends and distributions may be deposited by the Trust
directly in a bank account in the name of the Trust.
Section 10. Conditions Precedent to the Trust's Obligations.
10.01 Anything herein contained to the contrary notwithstanding,
this Agreement shall not take affect or be binding on the
Trust unless
<PAGE>
and until the following condition shall have been met;
(a) This Agreament shall have been approved by the
Board of Trustees of the Trust.
Section 11. Assigment.
11.01 It is understood that the Trust desires to
continue the utilization of the services,
facilities, system and program; of DST, which has
been serving as Transfer and Dividend Disbursing
Agent for the Fund under an Agreement dated as of
March 30, 1970. To that end, it is understood and
agreed that all or any portion of the services to
be provided by the Bank under this Agreement may
be performed by DST, as the sub-agent of the Bank,
under a sub-contract and that in the event of
performance of any such services which are
subcontracted to DST: (a) DST and the Bank shall
each be entitled to all of the benefits herein
afforded to the Bank, including, but not limited
to the indemnities provided herein.
(b) DST shall, by the terms and, provisions of the
Sub-Contract Agreement between the Bank and DST,
be required to assume the same duties and
responsibilities and provide the same quality of
service, accuracy, efficient functioning of its
system and operations, and keeping of records as
required of the Bank, as Transfer Agent for the
Trust.
(c) The Trust shall deliver to DST and to the Bank
certified copies of any and all resolutions of its
Board of Trustees relating to the duties,
procedures or responsibilities provided for
herein.
12
<PAGE>
(d) The Fund agrees that if It requests DST to perform
any func tions not provided for in this Agreement,
and DST performs such functions, the Bank shall
have no responsibility for, and shall be
Indemnified by the Fund against any loss, liability
or claim resulting therefrom unless the performance
of such function by DST shall have been consented
to or approved by the Bank prior to such
performance.
11.02 With the exception of the sub-contract to DST referred to
above, neither this Agreement nor any rights or
obligations hereunder may be assigned by the Bank without
the written consent of the Fund.
11.03 This Agreement shall inure to the benefit of and be
binding upon the parties and their respective successors
and assigns. If for any reason the Bank terminates its
sub-contract agreement with DST, the Fund shall have the
right to terminate this agreement pursuant to Section 8.02
hereof.
Section 12. Confidentiality.
12.01 The Bank agrees that in the event the Bank enters into a
sub-contract with DST as contemplated by SectioD 11.01
hereof, it will cause DST to agree that, except as
provided in the last sentence of paragraph 25 of Exhibit C
hereto or as otherwise required by law, DST will keep
confidential all records of and information in its
possession relating to the Fund or its shareholders or
shareholder accounts and will not disclose the same to any
person except at the request or with the consent of the
Fund.
12.02 The Fund agrees that, subject to paragraph 8.63 and except
as otherwise required by law, the Fund will, providing the
Bank enters into a sub-contract with DST as contemplated
by Section 11.01 hereof, keep
13
<PAGE>
confidential all financial statements and other financial
records (other than statements and records relating solely
to the Fund's business dealings with the Bank and its
sub-agent, if any) and all manuals, systems and other
technical-information and data not publicly disclosed
relating to DST's operations and programs furnished to it
by DST pursuant to this Agreement and will not disclose
the same to any person except at the request or with the
consent of DST.
Section 13. Survival of Representations and Warranties.
13.01 All representations and warranties by either party herein
contained shall survive the execution and delivery of
this Agreement and its becoming effective under paragraph
10.01.
IN WITNESS WHEREOF, the parties hereto have caused this Agreemint to
be executed in the names and on their behalf under their corporate seals by and
through their duly authorized officers, as of the day and year first
above written.
LORD ABBETT LARGE-CAP GROWTH FUND
By:
President
ATTEST:
Secretary
UNITED MISSOURI BANK OF KANSAS CITY,
NATIONAL ASSOCIATION
By:
Executive Vice President
ATTEST:
Assistant Secretary
<PAGE>
Lord Abbett Large Cap Growth Fund
The GM Building
767 Fifth Avenue
New York, NY 10153-0203
Dear Sirs:
You have requested our opinion in connection with your filing of
Amendment No. 1 to the Registration Statement on Form N-1A (the "Amendment")
under the Investment Company Act of 1940, as amended (the "Act"), of Lord Abbett
Large-Cap Growth Fund, a Delaware business trust (the "Company"), and in
connection therewith your registration of Class A, Class B, Class C, and Class P
shares of beneficial interest, without par value, of the Company (the "Shares").
We have examined and relied upon originals, or copies certified to our
satisfaction, of such company records, documents, certificates and other
instruments as in our judgment are necessary or appropriate to enable us to
render the opinion set forth below.
We are of the opinion that the Shares issued in the continuous offering
have been duly authorized and, assuming the issuance of the Shares for cash at
net asset value and receipt by the Company of the consideration therefore as set
forth in the Amendment, the Shares will be validly issued, fully paid and
nonassessable.
We express no opinion as to matters governed by any laws other than the
Title 12 of the Delaware Code. We consent to the filing of this opinion solely
in connection with the Amendment. In giving such consent, we do not hereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
WILMER, CUTLER & PICKERING
By: /s/Jeremy N. Rubenstein
Jeremy N. Rubenstein, a partner
<PAGE>
The Board of Trustees and Shareholders,
Lord Abbett Large-Cap Growth Fund:
We have audited the accompanying statement of net assets of Lord Abbett
Large-Cap Growth Fund (the Fund) as of December 14, 1999. This financial
statement is the responsibility of the Funds management. Our responsibility is
to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of Lord Abbett Large-Cap Growth
Fund at December 14, 1999 in conformity with generally accepted accounting
principles.
New York, New York
December 23, 1999
<PAGE>
INDEPENDENT AUDITORS' CONSENT
Lord Abbett Large-Cap Growth Fund:
We consent to the use in Pre-Effective Amendment No. 1 to Registration Statement
No. 333-88103 of our report dated December 15, 1999 and to the reference to us
under the caption "Investment Advisory And Other Services" and "Financial
Statements" both of which appear in the Statement of Additional Information,
which is a part of such Registration Statement.
DELOITTE & TOUCHE LLP
New York, NY
December 23, 1999
<PAGE>
PURCHASE AGREEMENT
Lord Abbett Large-Cap Growth Fund, a business trust organized under the
laws of the State of Delaware (the "Trust"), and Lord, Abbett & Co. ("LAC"), a
general partnership organized under the laws of the State of New York, agree as
follows:
1. Offer and Purchase.
The Trust offers LAC and LAC purchases 10,000 shares, no par value per
share (the "Shares"), of the Trust, at a price of $10 per Share. LAC
acknowledges receipt of the Shares and the Trust acknowledges receipt from LAC
of $100,000 in full payment for the Shares.
2. Representation by LAC.
LAC represents and warrants to the Trust that the Shares are being
acquired for investment purposes and not with a view to resale or further
distribution.
3. Filing of Certificate of Trust.
The Trust represents that a copy of its Certificate of Trust dated as
of September 29, 1999, as amended from time to time, is on file with the
Secretary of the State of Delaware.
4. Dates.
The Agreement has been executed by the Trust and LAC as of December 14,
1999 and will become effective as of the date the Trust's Registration Statement
on Form N-1A becomes effective.
LORD ABBETT LARGE-CAP GROWTH FUND
By:/s/Lawrence H. Kaplan
Lawrence H. Kaplan
Deputy General Counsel
LORD, ABBETT & CO.
By: /s/Paul A. Hilstad
Paul A. Hilstad
General Counsel & Partner
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below on this Amendment to
the Registration Statement hereby constitutes and appoints Paul A. Hilstad and
Lawrence H. Kaplan, each of them, with full power to act without the other, his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities (until revoked in writing) to sign any and all amendments to this
Registration Statement of each Fund enumerated on Exhibit A hereto (including
pre-effective amendments, post-effective amendments and amendments thereto), and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
Chairman, President
/s/Robert S. Dow and Director/Trustee 12/28/99
- ------------------------------ -------------------- -------------------
Robert S. Dow
/s/E. Thayer Bigelow Director/Trustee 12/28/99
- ------------------------------ ---------------- --------------------
E. Thayer Bigelow
/s/William H. T. Bush Director/Trustee 12/28/99
- ------------------------------ ---------------- --------------------
William H. T. Bush
/s/Robert B. Calhoun, Jr. Director/Trustee 12/28/99
- ------------------------------ ---------------- --------------------
Robert B. Calhoun, Jr.
/s/Stewart S. Dixon Director/Trustee 12/28/99
- ------------------------------ ---------------- --------------------
Stewart S. Dixon
/s/John C. Jansing Director/Trustee 12/28/99
- ------------------------------ --------------- --------------------
John C. Jansing
/s/ C. Alan MacDonald Director/Trustee 12/28/99
- ------------------------------ ---------------- --------------------
C. Alan MacDonald
/s/Hansel B. Millican, Jr. Director/Trustee 12/28/99
- ------------------------------ ---------------- --------------------
Hansel B. Millican, Jr.
/s/Thomas J. Neff Director/Trustee 12/28/99
- ------------------------------ ---------------- ---------------------
Thomas J. Neff
Chief
/s/Joan A. Binstock Financial Officer 12/28/99
- ------------------------------ ----------------- ---------------------
Joan A. Binstock
EXHIBIT A
Lord Abbett Affiliated Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Mid-Cap Value Fund, Inc.
Lord Abbett Global Fund, Inc.
Lord Abbett Investment Trust
Lord Abbett Securities Trust
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett Tax-Free Income Trust
Lord Abbett U.S. Government Securities Money Market Fund, Inc.
Lord Abbett Research Fund, Inc.
Lord Abbett Series Fund, Inc.
Lord Abbett Equity Fund, Inc.
Lord Abbett Large-Cap Growth Fund
</TABLE>
