LORD ABBETT DEVELOPING GROWTH FUND INC /NEW/, 497, 1998-12-08

LORD ABBETT DEVELOPING GROWTH FUND INC /NEW/
497, 1998-12-08

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November 30, 1998

Class Y Shares PROSPECTUS

Lord Abbett Developing Growth Fund
Lord Abbett Bond-Debenture Fund
Lord Abbett Mid-Cap Value Fund

Lord Abbett Logo

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Investment Manager and Underwriter
Lord, Abbett & Co. and Lord Abbett Distributor LLC
The General Motors Building
767 Fifth Avenue
New York, New York 10153-0203
212-848-1800

Custodian
The Bank of New York
48 Wall Street
New York, New York 10286

Transfer Agent and
Dividend Disbursing Agent
United Missouri Bank of Kansas City, N.A.
Tenth and Grand
Kansas City,
Missouri 64141

Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419100
Kansas City,
Missouri 64141
800-821-5129

Auditors
Deloitte & Touche LLP

Counsel
Debevoise & Plimpton

Printed in the U.S.A.

(11/98)

LORD, ABBETT & Co.
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203

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Lord Abbett Developing Growth Fund ("Developing Growth Fund"), Lord Abbett Lord
Abbett Developing Growth Fund ("Developing Growth Fund"), Lord Abbett
Bond-Debenture Fund ("Bond-Debenture Fund"), and Lord Abbett Mid-Cap Value Fund
("Mid-Cap Value Fund"), individually ("we" or the "Fund"), collectively (the
"Funds"), are mutual funds each offering five classes of shares, with each class
providing investors with different purchasing options. Only Class Y shares of
each Fund are offered by this Prospectus. See "Purchases" for a description of
this Class of shares.
Developing Growth Fund seeks long-term growth of capital through a diversified
and actively managed portfolio consisting of developing growth companies, many
of which are traded over the counter; Bond-Debenture Fund seeks high current
income and the opportunity for capital appreciation to produce a high total
return; and Mid-Cap Value Fund seeks capital appreciation. There can be no
assurance that any Fund will achieve its objective. Volatile price movements can
be expected.
The Statement of Additional Information dated November 30, 1998 has been filed
with the Securities and Exchange Commission and is incorporated by reference
into this Prospectus. You may obtain it, without charge, by writing to the Fund
or by calling 800-874-3733 and asking for "Part B of the Prospectus -- the
Statement of Additional Information." In addition, the Commission maintains a
website (http://www.sec.gov) that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
registrants that file electronically with the Commission.
Mutual Fund shares are not deposits or obligations of, or guaranteed or
endorsed by, any bank. Shares are not insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency. An investment in
the Fund involves risks, including the possible loss of principal.

These securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission nor has the Securities
and Exchange Commission or any state securities commission passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.

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LORD ABBETT DEVELOPING GROWTH FUND
LORD ABBETT BOND-DEBENTURE FUND
LORD ABBETT MID-CAP VALUE FUND

PROSPECTUS - Class Y Shares
November 30, 1998

TABLE OF CONTENTS PAGE Developing Growth Fund, Inc.
How We Invest 2
Risk Factors 2
Portfolio Management 2
Investor Expenses 2
Financial Highlights 3
Bond-Debenture Fund, Inc.
How We Invest 4
Risk Factors 4
Portfolio Management 4
Investor Expenses 4
Financial Highlights 5
Mid-Cap Value Fund, Inc.
How We Invest 6
Risk Factors 6
Portfolio Management 6
Investor Expenses 6
Purchases 7
Shareholder Services 7
Redemptions 8
Dividends and Capital Gains 8
Our Management 9
Fund Performance 10
Investment Policies, Risks and Limits 10

Lord, Abbett & Co.
Investment Management
A Tradition of Performance Through Disciplined Investing

The General Motors Building
767 Fifth Avenue o New York o New York o 10153
Broker-Dealer Division: (800) 426-1130
Financial Advisors Division: (888) 522-2388

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DEVELOPING GROWTH FUND

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HOW WE INVEST
Normally, we invest primarily in the common stocks of companies with long-range
growth potential, particularly smaller companies considered to be in the
developing growth phase. This phase is a period of swift development, when
growth occurs at a rate rarely equaled by established companies in their mature
years. We look for companies in this phase and, under normal circumstances, will
invest at least 65% of our total assets in securities of such companies.
Developing growth companies are almost always small, often young (in relation to
the large companies which make up the Standard & Poor's 500 Stock Index), and
their shares are frequently traded over the counter. Having, in management's
view, passed the pitfalls of the formative years, these companies are now in a
position to grow rapidly in their market. However, the actual growth of a
company cannot be foreseen and it may be difficult to determine in which phase a
company is presently situated. In addition, we may invest in companies which are
in their formative years.

See "Investment Policies, Risks and Limits."

RISK FACTORS

An investment in the Fund is not intended as a complete investment program. The
value of your investment will fluctuate in response to stock market movements.
Moreover, because stocks of developing growth companies entail more risk and
have more volatile prices than those of mature companies, the Fund's net asset
value per share is likely to experience above-average fluctuations. In addition,
the Fund will not provide significant current income. Before you invest, please
read "Investment Policies, Risks and Limits."

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PORTFOLIO MANAGEMENT

Stephen J. McGruder, Partner of Lord, Abbett & Co. ("Lord Abbett"), Executive
Vice President and Senior Portfolio Manager of the Fund, is primarily
responsible for its day-to-day management. He has been Portfolio Manager of the
Fund since joining Lord Abbett in 1995. Prior to joining Lord Abbett, Mr.
McGruder served since October of 1988 as Vice President of Wafra Investment
Advisory Group, a private investment company. Mr. McGruder is assisted by, and
may delegate management duties to, other Lord Abbett employees.

Mr. McGruder has over 29 years of investment experience.

Investor Expenses
The expenses shown below are based on historical expenses adjusted to reflect
current fees. Future expenses may be different than those shown.
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DEVELOPING GROWTH FUND Class Y
Shareholder Transaction Expenses
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Maximum Sales Load on Purchases
(as a % of offering price) None
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Deferred Sales Charge (See "Purchases") None

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Annual Fund Operating Expenses(1) (as a % of average net assets)
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Management Fee (See "Our Management") .56%
12b-1 Fees None
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Other Expenses (See "Our Management") .24%
Total Operating Expenses .80%

Example Assume an average annual return of 5% and no change in the level of
expenses. For a $1,000 investment with all dividends and distributions
reinvested, you would have paid the following total expenses assuming you sold
your shares at the end of each time period indicated.

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Share Class 1 year 3 years 5 years 10 years
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Class Y shares $8 $26 $44 $97

You would pay the same expenses on the same investment, assuming you kept your
shares: This example is for comparison and is not a representation of Developing
Growth Fund's actual expenses and returns, either past or present. (1) For Class
Y shares, the annual operating expenses shown in the summary have been restated
from the Fund's fiscal-year-end amounts to reflect current fees. The foregoing
is provided to give investors a better understanding of the expenses that are
incurred by an investment in each Fund.

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FINANCIAL HIGHLIGHTS The following financial highlights have been audited by
Deloitte & Touche LLP, independent auditors, in connection with their audits of
the Fund's Financial Statements, whose reports may be obtained on request.
Semi-annual financial statements and financial highlights for Developing Growth
Fund have not been audited by Deloitte & Touche LLP. Call 800-821-5129 and ask
for the Fund's 1998 annual or semi-annual report.

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Developing Growth Fund Developing Growth Fund
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Per Class Y Share Operating For the Period February 1, 1998 For the Period December 30, 1997(a)
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Performance: to July 31, 1998 to January 31, 1998
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<S> <C> <C>
Net asset value, beginning of period $14.27 $14.12
Income from investment operations
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Net investment income (loss) 0.01 (c)(d)
Net realized and unrealized
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gain on investments 0.22 0.15
Total from investment operations 0.23 0.15
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Dividends from net investment income -- --
Distribution from net realized gain (0.05) --
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Net asset value, end of period $14.45 $14.27
Total Return(b) 1.58% 1.06%
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Ratios to Average Net Assets(b)
Expenses(b) 0.31% 0.06%
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Net investment income (loss)(b) 0.03% (0.02)%
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Supplemental Data for all classes Developing Growth Fund
Net Assets, end of year (000) $943,773 $533,086
Portfolio turnover rate 14.06% 33.60%

(a) Commencement of Operations.
(b) Not Annualized.
(c) Amount less than 0.01%.
(d) Calculated using average shares outstanding during the period.
See Notes to Financial Statements.
</TABLE>

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B0ND-DEBENTURE FUND

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HOW WE INVEST
Normally, we invest in lower-rated debt securities, which entail greater risks
than investments in higher-rated debt securities. The former are referred to
colloquially as "junk bonds." At least 20% of our assets must be invested in any
combination of investment-grade debt securities, U.S. Government securities and
cash equivalents.

We believe that a high total return (current income and capital appreciation)
may be derived from an actively-managed, diversified security portfolio. Under
normal circumstances, we invest at least 65% of our total assets in bonds and/or
debentures. Such debt securities normally will consist of secured debt
obligations of the issuer (i.e., bonds), general unsecured debt obligations of
the issuer (i.e., debentures) and debt securities which are subordinate in right
of payment to other debt of the issuer.

We seek unusual values, particularly in lower-rated debt securities, some of
which are convertible into common stocks or have warrants to purchase common
stocks. Higher yields on debt securities can occur during periods of inflation
when the demand for borrowed funds is high. Also, buying lower-rated bonds when
the credit risk is above average but, we think, likely to decrease, can generate
higher yields.
See "Investment Policies, Risks and Limits."

RISK FACTORS

The lower-rated bonds in which the Fund invests involve risks that interest and
principal payments may not be made. Some issuers may default as to principal
and/or interest payments subsequent to our purchase of their securities. Through
portfolio diversification, good credit analysis and attention to current
developments and trends in interest rates and economic conditions, investment
risk can be reduced, although there is no assurance that losses will not occur.
In addition, the value of your investment will change as the general levels of
interest rates fluctuate. When interest rates decline, share value may rise.
When interest rates rise, share value may decline. The Fund employs other
investment practices, such as investment in foreign securities, illiquid
securities and other securities, that could adversely affect performance. Before
you invest, please read "Investment Policies, Risks and Limits."

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PORTFOLIO MANAGEMENT

Christopher J. Towle, Partner of Lord Abbett, Executive Vice President and
Portfolio Manager of the Fund, is primarily responsible for the day-to-day
management of the Fund. Mr. Towle has been with Lord Abbett since 1988 and has
over 17 years of investment experience. Mr. Towle is assisted by, and may
delegate management duties to, other Lord Abbett employees.

INVESTOR EXPENSES
The expenses shown below are based on historical expenses adjusted to reflect
current fees. Future expenses may be different than those shown.
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BOND-DEBENTURE FUND Class Y
Shareholder Transaction Expenses
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Maximum Sales Load on Purchases
(as a % of offering price) None
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Deferred Sales Charge (See "Purchases") None

- --------------------------------------------------------------------------------
Annual Fund Operating Expenses(1) (as a % of average net assets)
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Management Fee (See "Our Management") .46%
12b-1 Fees None
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Other Expenses (See "Our Management") .15%
Total Operating Expenses .61%

You would pay the same expenses on the same investment, assuming you kept your
shares:

This example is for comparison and is not a representation of Bond-Debenture
Fund's actual expenses and returns, either past or present.

(1) For Class Y shares, the annual operating expenses shown in the summary have
been restated from the Fund's fiscal-year-end amounts to reflect current fees.
The foregoing is provided to give investors a better understanding of the
expenses that are incurred by an investment in each Fund.

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Bond-Debenture Fund
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Per Class Y Share Operating For the Period March 27, 1998(a)
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Performance: to June 30, 1998
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Net asset value, beginning of period $9.98
Income from investment operations
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Net investment income (loss) 0.21
Net realized and unrealized
- ------------------------------------------------------------------------------
gain (loss) on investments (0.13)
Total from investment operations 0.08
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Dividends from net investment income (0.20)
Distribution from net realized gain --
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Net asset value, end of period $9.86
Total Return(b) 0.76%
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Ratios to Average Net Assets(b)
Expenses(b) 0.15%
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Net investment income(b) 2.02%
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Supplemental Data for all classes: Bond Debenture Fund
Net Assets, end of year (000) $3,321,998
Portfolio turnover rate 53.64%

(a) Commencement of Operations.
(b) Not Annualized.
See Notes to Financial Statements.

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MID-CAP VALUE FUND

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HOW WE INVEST

We primarily invest in common stocks of mid-sized companies while utilizing a
value approach to investing. The Fund generally focuses on companies with market
capitalizations of roughly $500 million to $5 billion, but not less than
approximately $50 million. Selection of stocks is based on appreciation
potential, without regard to current income. Normally, at least 65% of our total
assets will consist of investments in mid-cap companies, determined at the time
of purchase.

Our investment portfolio is diversified among many issues representing various
industries. The holdings in our portfolio typically are selected for their
potential for significant market appreciation from growing recognition of
substantial improvement in the company's financial results or increasing
anticipation of such improvement. This potential may derive from such factors
as: (i) changes in the economic and financial environment, (ii) new or improved
products or services, (iii) new or rapidly expanding markets, (iv) changes in
management or structure of the company, (v) price increases, (vi) improved
efficiencies resulting from new technologies or changes in distribution or (vii)
changes in governmental regulations, political climate or competitive
conditions.

See "Investment Policies, Risks and Limits."

- --------------------------------------------------------------------------------
RISK FACTORS

The value of your investment will fluctuate in response to stock market
movements. The Fund employs other investment practices such as investments in
foreign securities and other securities, that could adversely affect
performance.

Before you invest, please read "Investment Policies, Risks and Limits."

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PORTFOLIO MANAGEMENT

Edward K. von der Linde, Executive Vice President and Portfolio Manager of the
Fund, is primarily responsible for the day-to-day management of the Fund. Mr.
von der Linde has been with Lord Abbett since 1988 and has over 12 years of
investment experience.Mr. von der Linde is assisted byHoward E. Hansen.

INVESTOR EXPENSES
The expenses shown below are based on historical expenses adjusted to reflect
current fees. Future expenses may be different than those shown.
- --------------------------------------------------------------------------------
MID-CAP VALUE FUND Class Y
Shareholder Transaction Expenses
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Maximum Sales Load on Purchases
(as a % of offering price) None
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Deferred Sales Charge (See "Purchases") None

- --------------------------------------------------------------------------------
Annual Fund Operating Expenses(1) (as a % of average net assets)
- --------------------------------------------------------------------------------
Management Fee (See "Our Management") .72%
12b-1 Fees None
- --------------------------------------------------------------------------------
Other Expenses (See "Our Management") .28%
Total Operating Expenses 1.00%

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Share Class 1 year 3 years
- --------------------------------------------------------------------------------
Class Y shares $10 $32

You would pay the same expenses on the same investment, assuming you kept your
shares:

This example is for comparison and is not a representation of Mid-Cap Value
Fund's actual expenses and returns, either past or present.

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PURCHASES
Class Y shares. Class Y shares are purchased at net asset value with no sales
charge of any kind. The net asset value of our shares is calculated every
business day as of the close of the New York Stock Exchange ("NYSE") by dividing
net assets by the number of shares outstanding. Securities are valued at their
market value as more fully described in the Statement of Additional Information.

WHO MAY INVEST? Eligible purchasers of Class Y shares include: (i) 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 Class Y shares in particular investment products
made available for a fee to clients of such brokers, dealers, registered
investment advisers or other financial institutions ("mutual fund wrap-fee
programs"), (ii) 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, and (iii) institutional investors, including retirement plans, companies,
foundations, trusts, endowments and other entities where the total amount of
potential investable assets exceeds $20 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 it
to the Fund you selected (P.O. Box 419100, Kansas City, Missouri 64141). The
minimum initial investment is $1 million except for mutual fund wrap-fee
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 a 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 net asset value 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 net asset
value 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. 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 of your choice, note Class Y shares and
include your new account number 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 of your choice, note
Class Y shares and include your account number and your name.

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SHAREHOLDER 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 Lord Abbett-sponsored fund.

You or your investment professional with proper identification can instruct
your Fund to exchange uncertificated shares of a class (held by the transfer
agent) by telephone. Shareholders have this privilege unless they refuse it in
writing. A Fund will not be liable for following instructions communicated by
telephone that it reasonably believes to be genuine and will employ reasonable
procedures to confirm that instructions received are genuine, including
requesting proper identification and recording all telephone exchanges.
Instructions must be received by a Fund

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in Kansas City (800-821-5129) prior to the close of the NYSE to obtain a Fund's
net asset value per class share on that day. Expedited exchanges by telephone
may be difficult to implement in times of drastic economic or market change. The
exchange privilege should not be used to take advantage of short-term swings in
the market. Each Fund reserves the right to terminate or limit the privilege of
any shareholder who makes frequent exchanges. Each Fund can revoke the privilege
for all shareholders upon 60 days' prior written notice. A prospectus for the
other Lord Abbett-sponsored fund selected by you should be obtained and read
before an exchange. Exercise of the Telephone Exchange Privilege will be treated
as a sale for federal income tax purposes and, depending on the circumstances, a
capital gain or loss may be recognized.

All correspondence should be directed to the Fund you selected (P.O. Box
419100, Kansas City, Missouri 64141; 800-821-5129).

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REDEMPTIONS

To obtain the proceeds of an expedited redemption, you can telephone your Fund.
A Fund will not be liable for following instructions communicated by telephone
that it reasonably believes to be genuine and will employ reasonable procedures
to confirm that instructions received are genuine, including requesting proper
identification, recording all telephone redemptions and mailing the proceeds
only to the named shareholder at the address appearing on the account
registration.

Send your written redemption request to the Fund you selected (P.O. Box
419100, Kansas City, Missouri 64141) with signature(s) and any legal capacity of
the signer(s) guaranteed by an eligible guarantor accompanied by any
certificates for shares to be redeemed and other required documentation. We will
make payment of the net asset value of the shares on the date the redemption
order was received in proper form. Payment will be made within three business
days. Each Fund may suspend the right to redeem shares for not more than three
days (or longer under unusual circumstances as permitted by Federal law). If you
have purchased a Fund's shares by check and subsequently submit a redemption
request, redemption proceeds will be paid upon clearance of your purchase check,
which may take up to 15 days. To avoid delays you may arrange for the bank upon
which a check was drawn to communicate to the Fund that the check has cleared.

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 be received by your Fund before the close of the
NYSE for money to be wired on the next business day.

Tax-qualified Plans: For redemptions of $50,000 or less, follow normal
redemption procedures. Redemptions over $50,000 must be in writing from the
employer, broker or plan administrator stating the reason for the redemption.
The reason for the redemption must be received by the Fund prior to, or
concurrent with, the redemption request.

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DIVIDENDS AND CAPITAL GAINS

DIVIDENDS/CAPITAL GAINS DISTRIBUTIONS. Dividends from net investment income, if
any, are expected to be paid annually for Developing Growth Fund and Mid-Cap
Value Fund shareholders. A second distribution may be made in order to comply
with Federal income tax requirements that a certain percentage of capital gains
be distributed during the year. Bond-Debenture Fund shareholders are expected to
be paid dividends monthly.

CAPITAL GAINS DISTRIBUTIONS. Any capital gains distribution is expected to be
made annually and may be taken in cash or reinvested. Distributions of any net
long-term capital gains will be taxable to a shareholder as long-term capital
gains regardless of how long the shareholder has held the shares. The maximum
tax rate on long-term capital gains for a U.S. individual, estate or trust is
reduced to 20% for distributions derived from the sale of assets held by the
Fund for more than 12 months. (If the taxpayer is in the 15% tax bracket, the
rate is 10%.) Any gains realized on the Fund's transactions in options and
financial futures will be treated as taxable long- or short-term capital gains.

DIVIDENDS/CAPITAL GAINS RECEIPT OR REINVESTMENT. If you elect to receive
dividends or capital gains in cash, a check will be mailed to you as soon as
possible after the reinvestment date. If you arrange for

11
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direct deposit, your payment will be electronically transmitted to your bank
account within one day after the payable date. Most investors reinvest their
dividends and capital gains. If you choose this option, or if you do not
indicate any choice, your dividends and capital gains distributions will be
automatically reinvested in additional shares.

TAXES. The Funds pay no federal income tax on the earnings distributed to
shareholders. Consequently, dividends you receive, whether reinvested or taken
in cash, are generally considered taxable. Dividends declared in December of any
year will be treated for federal income tax purposes as having been received by
shareholders in that year if they are paid before February 1 of the following
year.

Each January, you will be mailed, if applicable, a Form 1099 tax information
statement detailing your dividends and capital gain distributions. You should
consult your tax adviser concerning applicable state and local taxes.

For more information about the tax consequences from dividends and
distributions, see the Statement of Additional Information.

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OUR MANAGEMENT

Our business is managed by our officers on a day-to-day basis under the overall
direction of our Board of Directors/Trustees with the advice of Lord Abbett.
Each Fund employs Lord Abbett as investment manager pursuant to a management
Agreement. Lord Abbett has been an investment manager for over 69 years and
currently manages approximately $28 billion in a family of mutual funds and
other advisory accounts. Under the Management Agreement, Lord Abbett provides us
with investment management services and personnel, pays the remuneration of our
officers and of our Directors/Trustees affiliated withLord Abbett, provides us
with office space and pays for ordinary and necessary office and clerical
expenses relating to research, statistical work and supervision of our
portfolios and certain other costs. Lord Abbett provides similar services to
over thirty-four other mutual fund portfolios having various investment
objectives and also advises other investment clients.

Each Fund pays Lord Abbett a monthly fee based on average daily net assets for
each month. In addition, each Fund pays all expenses not expressly assumed by
Lord Abbett. For the fiscal year ended January 31, 1998, the fee paid by
Developing Growth Fund to Lord Abbett as a percentage of average daily net
assets was at the annual rate of .56 of 1%. For the fiscal year ended December
31, 1997, the fee paid by Bond-Debenture Fund to Lord Abbett as a percentage of
average daily net assets was at the annual rate of .46 of 1%. Mid-Cap Value
Fund, for the fiscal year ended December 31, 1997, paid Lord Abbett as a
percentage of daily net assets at the annual rate of .72 of 1%.

The services provided to the Fund and its shareholders by Lord Abbett, Lord
Abbett Distributor, the Fund's transfer agent and the Fund's custodian depend on
the proper functioning of their computer systems and those of their outside
service providers. Many computer systems, and many imbedded microprocessors now
in use cannot distinguish between the year 2000 and the year 1900, an inability
that could disrupt the services provided to the Fund. Lord Abbett, Lord Abbett
Distributor, the Fund's transfer agent and the Fund's custodian all have advised
the Fund that they have been actively working on changes to their computer
systems to prepare for the year 2000 and expect that their systems, and those of
their outside service providers, will be adapted in time. However, because the
year 2000 problem is unprecedented, there can be no assurance that they will be
successful. Neither can there be any assurance that their services will not be
impaired by interactions with other computer systems that have not been adapted
for the year 2000.

In addition, it is possible that the markets for securities in which the Fund
invests may be detrimentally affected by computer and microprocessor failures
throughout the financial services industry beginning January 1, 2000. Also,
corporate and governmental data processing errors may result in problems for
individual companies and may create overall economic uncertainties. Accordingly,
the Fund's investments may be adversely affected.

The Funds will not hold annual meetings of shareholders unless required to by
the Investment Company Act of 1940, the Board of Directors/Trustees or the
shareholders with one-quarter of the outstanding stock of each Fund entitled to
vote. See the Statement of Additional Information for each Fund for more
details.

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THE FUNDS. Each Fund is a diversified open-end management investment company.
Lord Abbett Developing Growth Fund, Inc. was established in 1978. Its
predecessor corporation was established in 1973. Lord Abbett Bond-Debenture
Fund, Inc. was established in 1976, and Lord Abbett Mid-Cap Value Fund, Inc. was
established in 1983.

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FUND PERFORMANCE

ABOUT DEVELOPING GROWTH FUND. During the past fiscal year, the Fund continued
its strategy of identifying and investing in unique companies that we believe
offer good long-term earnings prospects. Although the sector allocation of the
Fund's portfolio continues to be well-diversified, there was a slight
overweighting in the energy and software sectors, where we found many of our
strongest performers. Our criteria for stock-picking remains focused on
reasonably priced stocks of companies with above-average, long-term potential,
and away from the high-multiple "momentum" stocks.

ABOUT BOND-DEBENTURE FUND. The Fund posted strong performance during the past
fiscal year amid the continuing economic growth, low inflation and favorable
interest-rate environment that characterized the period. Particularly beneficial
to the Fund's performance was the portfolio's concentration in the telephone
communications, media and energy sectors. Basic industry issues also generally
outperformed the bond market. In addition, the robust U.S. economic growth
provided significant increases in corporate profitability, which resulted in
improved credit ratings and strong gains for many of our holdings. We have been
devoting increasing amounts of time and resources to fundamental research, as
financial markets have little tolerance for earnings shortfalls. Our U.S.
Treasury and mortgage-related securities provided total returns in the 9.0% -
9.5% range during the year. However, significantly higher total returns earned
by high-yield and convertible securities throughout the course of 1997 proved
most beneficial to the Fund.

ABOUT MID-CAP VALUE FUND. During the past fiscal year, the Fund performed well.
We attribute these strong returns to our continuing commitment to careful stock
selection. The Fund does not seek to emphasize particular sectors, but, instead,
focuses on investing in those companies we believe offer the best value in the
mid-capitalization sector (companies with market capitalization ranging from
$500 million to $5 billion). At the close of the year, the Fund had strong
exposure to the insurance, specialty chemical and electric power sectors because
we identified a number of companies in those industries offering exceptional
value.

- --------------------------------------------------------------------------------
INVESTMENT POLICIES, RISKS AND LIMITS

The Funds are permitted to utilize, within limits established by the Board of
Directors/Trustees, the following investment policies in an effort to enhance
the performance. These policies have risks associated with them. However, the
Funds follow certain practices that may reduce these risks. To the extent Funds
utilize these policies, overall performance may be positively or negatively
affected.

POLICY COMMON TO ALL FUNDS

BORROWING: Each Fund may not borrow in excess of 33 1/3% of total assets taken
at cost or market value, whichever is lower at the time of borrowing, and then
only as a temporary measure for extraordinary or emergency purposes. Foreign
Securities: Foreign securities are securities primarily traded in countries
outside the United States.

RISK: These securities are not subject to the same degree of regulation and
may be more volatile and less liquid than securities traded in major U.S.
markets. Other considerations include political and social instability,
expropriations, higher transaction costs, currency fluctuations, nondeductible
withholding taxes and different settlement practices.

LIMIT: Developing Growth Fund and Mid-Cap Value Fund may each invest up to
10%, and Bond-Debenture Fund up to 20% of its assets at the time of investment
in foreign securities.

POLICIES COMMON TO BOND-DEBENTURE FUND ONLY

HIGH YIELD DEBT SECURITIES: High yield debt securities or "junk bonds" are rated
BB/Ba or lower and typically pay a higher yield than investment-grade debt
securities.

13
<PAGE>

RISK: The market for lower-rated bonds generally is less liquid than that
for higher-rated bonds. Market prices of lower-rated bonds may fluctuate more
than those of higher-rated bonds, particularly in times of economic change and
stress. In addition, because the market for lower-rated corporate debt
securities has in past years experienced wide fluctuations in the values of
certain of these securities, past experience may not provide an accurate
indication of the future performance of that market or of the frequency of
default, especially during periods of recession. Objective pricing data for
lower-rated bonds may be more limited than for higher-rated bonds and valuation
of such securities may be more difficult and require greater reliance upon
judgment. While the market for lower-rated bonds may be relatively insensitive
to interest rate changes, the market prices of these bonds structured as zero
coupon or pay-in-kind securities may be affected to a greater extent by such
changes and thus may be more volatile than prices of lower-rated securities
paying interest periodically in cash. Lower-rated bonds that are callable prior
to maturity may be more susceptible to refunding during periods of falling
interest rates, requiring replacement with lower-yielding securities.

LIMIT: Bond-Debenture Fund must keep at least 20% of the value of its total
assets in (1) debt securities which, at the time of purchase, are "investment
grade," i.e., rated within one of the four highest grades determined either by
Moody's Investors Service, Inc. or Standard &Poor's Ratings Services, (2) debt
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, or (3) cash or cash equivalents (short-term obligations of
banks, corporations or the U.S. Government).

In no event will we invest more than 10% of our gross assets at the time of
investment in debt securities which are in default as to interest or principal.

SELLING COVERED CALL OPTIONS: A covered call option on stock gives the buyer of
the option, upon payment of a premium to the seller (writer) of the option, the
right to call upon the writer to deliver a specified number of shares of a stock
owned by the writer on or before a fixed date at a predetermined price.

RISK: Although Bond-Debenture Fund receives income based on receipt of the
premium, it gives up participation in the appreciation of the stock above the
predetermined price if it is called away by the buyer.

LIMIT: Bond-Debenture Fund may write covered call options on securities
having an aggregate market value not to exceed 20% of the Fund's gross assets.

OTHER POLICIES: (1) Bond-Debenture Fund may hold or sell any property or
securities which the Fund may obtain through the exercise of conversion rights
or warrants or as a result of any reorganization, recapitalization or
liquidation proceedings for any issuer of securities owned by us. In no event
will we voluntarily purchase any securities other than debt securities, if, at
the time of such purchase or acquisition, the value of the property and
securities, other than debt securities, in our portfolio is greater than 35% of
the value of our gross assets. A purchase or acquisition will not be considered
"voluntary" if made in order to avoid loss in value of a conversion or other
premium.

(2) Subject to the percentage limitations for purchases of other than debt
securities described above, we may purchase common and preferred stocks.

(3) Bond-Debenture Fund may, but have no present intention to, invest in
financial futures and options on financial futures and commit more than 5% of
its gross assets to the lending of its portfolio securities.

ADDITIONAL POLICIES COMMON TO BOND-DEBENTURE FUND AND MID-CAP VALUE FUND
ILLIQUID SECURITIES: These securities are not traded on the open market. May
include illiquid Rule 144A securities.

RISK: Certain securities may be difficult or impossible to sell at the time
and price the seller would like.

LIMIT: Each Fund may invest up to 15% of its assets in illiquid securities.
Securities determined by the Board of Directors to be liquid are not subject to
this limitation.

SECURITIES LENDING: This entails lending of securities to financial institutions
which provide continuous collateral equal to the market value of the securities
loaned.

RISK: Delay in recovery of collateral and loss should the borrower of the
security fail financially.

LIMIT: Loans, in the aggregate, may not exceed 30% of Bond Debenture Fund's
and Mid-Cap Value Fund's total assets.

14
<PAGE>

OBJECTIVE, RESTRICTION AND POLICY CHANGES.
A Fund will not change its investment objective or its fundamental restrictions
without shareholder approval. If a Fund determines that its objective can best
be achieved by a substantive change in investment policy, which may be changed
without shareholder approval, the Fund may make such change by disclosing it in
the prospectus.

For more information about investment policies, restrictions and risk factors,
see the Statement of Additional Information.

- --------------------------------------------------------------------------------
This Prospectus does not constitute an offering in any jurisdiction in which
such offer is not authorized or in which the person making such offer is not
qualified to do so or to anyone to whom it is unlawful to make such offer.
No person is authorized to give any information or to make any representations
not contained in this Prospectus or in supplemental sales material authorized by
the Fund and no person is entitled to rely upon any information or
representation not contained herein or therein.

<PAGE>
LORD, ABBETT & CO.
Statement of Additional Information November 30, 1998

Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Mid-Cap Value Fund, Inc.

- -----------------------------------------------------------------------------
This Statement of Additional Information is not a prospectus. A Prospectus for
the Class Y shares of Lord Abbett Developing Growth Fund, Inc. ("Developing
Growth Fund"), Lord Abbett Bond-Debenture Fund, Inc. ("Bond-Debenture Fund"),
and Lord Abbett Mid-Cap Value Fund ("Mid-Cap Value Fund"), individually ("we" or
the "Fund"), collectively (the "Funds"), may be obtained from your securities
dealer or from Lord Abbett Distributor LLC ("Lord Abbett Distributor") at The
General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203. This
Statement of Additional Information relates to, and should be read in
conjunction with, the Prospectus dated November 30, 1998 (the "Prospectus").

Our Boards of Directors have authority to create and classify shares in separate
series, without further action by shareholders. To date, the Boards of Directors
have authorized five classes of shares for both Developing Growth Fund,
Bond-Debenture Fund, and Mid-Cap Value Fund (Class A, B, C, P and Y). The Board
of a Fund will allocate a Fund's shares among its classes from time to time. All
shares of a Fund 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. Although no present plans exist to do so,
further series may be added to one or more of the Funds in the future. The
Investment Company Act of 1940, as amended (the "Act"), requires that where more
than one series exists for a Fund, each series must be preferred over all other
series in respect of assets specifically allocated to such series.

Rule 18f-2 under the Act provides that any matter required to be submitted, by
the provisions of the Act or applicable state law or otherwise, to the holders
of the outstanding voting securities of an investment company such as the Fund
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each class or series affected
by such matter. Rule 18f-2 further provides that a class or series shall be
deemed to be affected by a matter unless the interests of each class or series
in the matter are substantially identical or the matter does not affect any
interest of such class or series. However, the Rule exempts the selection of
independent public accountants, the approval of a contract with a principal
underwriter and the election of directors from its separate voting requirements.

Shareholder inquiries should be made by writing directly to the Fund or by
calling 800-821-5129. In addition, you can make inquiries through your dealer.

TABLE OF CONTENTS Page
1. Investment Objective and Policies 2
2. Directors and Officers 5
3. Investment Advisory and Other Services 8
4. Portfolio Transactions 9
5. Purchases, Redemptions and Shareholder Services 10
6. Past Performance 11
7. Taxes 12
8. Information About the Funds 13
9. Financial Statements 13

<PAGE>
1.Investment Objective and Policies

FUNDAMENTAL INVESTMENT RESTRICTIONS. Each Fund is subject to the following
investment restrictions which cannot be changed without approval of the holders
of a majority of a Fund's outstanding shares. Each Fund may not: (1) borrow
money, except that (i) each Fund may borrow from banks (as defined in the
Investment Company Act of 1940 ("the Act")) in amounts up to 33 1/3% of its
total assets (including the amount borrowed), (ii) each Fund may borrow up to an
additional 5% of its total assets for temporary purposes, (iii) each Fund may
obtain such short-term credit as may be necessary for the clearance of purchases
and sales of portfolio securities and (iv) each Fund may purchase securities on
margin to the extent permitted by applicable law; (2) pledge its assets (other
than to secure such borrowings, or to the extent permitted by the Fund's
investment policies, as permitted by applicable law; (3) engage in the
underwriting of securities, except pursuant to a merger or acquisition or to the
extent that, in connection with the disposition of its portfolio securities, it
may be deemed to be an underwriter under federal securities laws; (4) make loans
to other persons, except that the acquisition of bonds, debentures or other
corporate debt securities and investment in government obligations, commercial
paper, pass-through instruments, certificates of deposit, bankers acceptances,
repurchase agreements or any similar instruments shall not be subject to this
limitation, and except further that each Fund may lend its portfolio securities,
provided that the lending of portfolio securities may be made only in accordance
with applicable law; (5) buy or sell real estate (except that each 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)
commodities or commodity contracts (except to the extent each 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); (6) with respect to 75% of the gross assets of each Fund, buy
securities of one issuer representing more than (i) 5% of the Fund's gross
assets, except securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities or (ii) 10% of the voting securities of such
issuer; (7) invest more than 25% of its assets, taken at market value, in the
securities of issuers in any particular industry (excluding securities of the
U.S. Government, its agencies and instrumentalities); or (8) issue senior
securities to the extent such issuance would violate applicable law.

With respect to the restrictions mentioned herein, compliance therewith will not
be affected by changes in the market value of portfolio securities but will be
determined at the time of purchase or sale of such securities.

NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. In addition to the investment
restrictions above which cannot be changed without shareholder approval, each
Fund is also subject to the following non-fundamental investment policies which
may be changed by the Board of Directors without shareholder approval. Each Fund
may not: (1) borrow in excess of 33 1/3% of its total assets (including the
amount borrowed), and then only as a temporary measure for extraordinary or
emergency purposes; (2) make short sales of securities or maintain a short
position except to the extent permitted by applicable law; (3) 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, deemed to be liquid by the Board of Directors; (4)
invest in securities of other investment companies as defined in the Act, except
as permitted by applicable law; (5) invest in securities of issuers which, with
their predecessors, have a record of less than three years of continuous
operation, if more than 5% of each Fund's total assets would be invested in such
securities (this restriction shall not apply to mortgaged-backed securities,
asset-backed securities or obligations issued or guaranteed by the U. S.
Government, its agencies or instrumentalities); (6) hold securities of any
issuer when more than 1/2 of 1% of the securities of such issuer are owned
beneficially by one or more of each Fund's officers or directors or by one or
more partners or members of each Fund's underwriter or investment adviser if
these owners in the aggregate own beneficially more than 5% of such securities
of such issuer; (7) invest in warrants if, at the time of acquisition, its
investment in warrants, valued at the lower of cost or market, would exceed 5%
of each Fund's total assets (included within such limitation, but not to exceed
2% of the Funds total assets, are warrants which are not listed on the New York
or American Stock Exchange or a major foreign exchange); (8) invest in real
estate limited partnership interests or interests in oil, gas or other mineral
leases, or exploration or development programs, except that each Fund may invest
in securities issued by companies that engage in oil, gas or other mineral
exploration or development activities; (9) write, purchase or sell puts, calls,
straddles, spreads or combinations thereof, except to the extent permitted in a
Fund's prospectus and statement of additional information, as may be amended
from time to time; or (10) buy from or sell to any of a Fund's officers,
directors, employees, or its investment adviser or any of a Fund's officers,
directors, partners or employees, any securities other than shares of each Fund.

With respect to Developing Growth Fund, it did not invest in repurchase
agreements or lend portfolio securities during the last fiscal year and has no
present intent to do so.

Although they have no current intention to do so, the Funds may invest in
financial futures and options on financial futures.

For the fiscal year ended January 31, 1998, the portfolio turnover rate for
Developing Growth Fund was 33.60%, versus 42.35% for the prior fiscal year, and
14.06% for the semi-annual period ended July 31, 1998; for the fiscal year ended
December 31, 1997, the portfolio turnover rate for Bond-Debenture Fund was
89.14%, versus 106.79% for the prior year, and 53.64% for the semi-annual period
ended June 30, 1998; and for the fiscal year ended December 31, 1997, the
portfolio turnover rate for Mid-Cap Value Fund was 56.96%, versus 38.88% for the
prior year, and 28.48% for the semi-annual period ended June 30, 1998.

INVESTMENT TECHNIQUES

STOCK INDEX FUTURES CONTRACTS (Developing Growth Fund). The Fund believes it can
reduce the volatility inherent in its portfolio through the use of stock index
futures contracts. (A stock index futures contract is an agreement pursuant to
which two parties agree, one to receive and the other to pay, on a specified
date an amount of cash equal to a specified dollar amount -- established by an
exchange or board of trade -- times the difference between the value of the
index at the close of the last trading day of the contract and the price at
which the futures contract is originally written. No consideration is paid or
received at the time the contract is entered into, only the good faith deposit
described herein.) When Lord Abbett, our investment manager, anticipates a
general decline in the sector of the stock market which includes our portfolio
assets, we can reduce risk by hedging the effect of such decline on our ability
to sell assets at best price or otherwise hedge a decision to delay the sale of
portfolio securities. Such hedging would be possible if there were an
established, regularly-quoted stock index for equities of the character in which
we invest and if an active public market were to develop on a stock exchange or
board of trade in futures contracts based on such index.

The market value of a futures contract is based primarily on the value of the
underlying index. Changes in the value of the index will cause roughly
corresponding changes in the market price of the futures contract, except as
otherwise described below. If a stock index is established which is made up of
securities whose market characteristics closely parallel the market
characteristics of the securities in our portfolio, then the market value of a
futures contract on that index should fluctuate in a way closely resembling the
market fluctuation of our portfolio. Thus, if we should sell futures contracts,
a decline in the market value of the portfolio will be offset by an increase in
the value of the short futures position to the extent of the hedge (i.e., the
percentage of the portfolio value represented by the value of the futures
position). Conversely, when we are in a strong cash position (for example,
through substantial sales of our shares) and wish to invest the cash in
anticipation of a rising market, we could rapidly hedge against the expected
market increase by buying futures contracts to offset the cash position and thus
cushion the adverse effect of attempting to buy individual securities in a
rising market.

The public markets for existing stock index futures contracts, such as those
using the Standard & Poor's 100 Index and 500 Index traded on the Chicago
Mercantile Exchange or those using the New York Stock Exchange Composite Index
traded on the New York Stock Exchange ("NYSE"), are active and have developed
substantial liquidity and we expect a similar market to develop for stock index
futures on a representative group of over-the-counter stocks. The existence of
an active market would permit us to close out our position in futures contracts
by purchasing an equal and opposite position in the public market. Under futures
contracts currently in use, the purchaser would be required to segregate in a
separate account, as a good faith deposit, cash or Treasury bills in an amount
set by a board of trade or exchange (currently approximately 5% of the contract
value). Each day during the contract period we would either pay or receive an
amount of cash equal to the daily change in the total value of the contracts.
The amount which we may segregate upon entering into a futures contract may not
exceed, together with the amounts on deposit under all outstanding contracts, 5%
of the value of our total assets, nor may we enter into additional futures
contracts if, as a result, the aggregate amount committed under all our open
futures contracts would exceed more than one-third of the value of such assets.
<PAGE>
There are several risks in connection with the use of futures contracts as a
hedging device. One risk is the imperfect correlation between the composition of
our portfolio securities and the applicable stock index. If the value of the
futures contract moves more than the value of the stock being hedged, we would
experience either a loss or a gain on the futures contract which would not be
completely offset by movements in the value of the securities which are the
subject of the hedge. Another risk is that the value of futures contracts may
not correlate perfectly with movement in the stock index due to certain market
distortions. Although we will enter into futures contracts strictly to hedge our
portfolio or cash positions, other investors use these investment vehicles for
other, sometimes more speculative, purposes. At times, excess speculation in the
futures market can distort the normal market relationship between the price of
the futures contract and the value of the index. If we decide to enter into or
close out our futures position during a period of such excess speculation, the
hedging strategy will be more or less successful, depending on the direction and
amount of this distortion, than otherwise would be the case. Due to the
possibility of price distortion in the futures market and because of the
imperfect correlation between movements in the stock index and movements in the
price of stock index futures contracts, a correct forecast of general market
trends by Lord Abbett may still not result in a successful hedging transaction.

It is possible that, when we sell futures contracts to hedge our portfolio
against a decline in the market, the market, as measured by the stock index, may
advance while the value of securities held in our portfolio may decline. If this
occurs, we will lose money on the futures contracts and also experience a
decline in value in our portfolio securities. However, Lord Abbett believes that
over time the value of a diversified portfolio will tend to move in the same
direction as the market index upon which the futures contracts are based.

Where futures contracts are purchased to hedge against a possible increase in
the price of stock before we are able to invest our cash position in stock in an
orderly fashion, it is possible that the market may decline instead and we would
realize a loss; if we then decide not to invest in stock at that time because of
concern as to possible further market decline or for other reasons, we would
realize a loss on the futures contract that would be offset, to the extent the
cash position had not been invested in stocks being hedged.

Positions in futures contracts may be closed out only on an exchange or board of
trade which provides a market for such contracts. Although we intend to purchase
or sell futures contracts only if an active market has developed and is
continuing, there is no assurance that a liquid market on an exchange or board
of trade will exist for any particular contract or at any particular time. In
such event, it may not be possible to close out a futures position, and in the
event of adverse price movements, we would continue to be required to make daily
cash payments marking our position to market. However, since futures contracts
would have been used to hedge portfolio securities and such securities would not
be sold until the futures contracts had been terminated, an increase in the
price of the securities, if any, may partially or completely offset losses on
the futures contract.

We may incur additional brokerage commissions through entering into futures
contracts, although we also can save on commissions by hedging through such
contracts rather than through buying or selling individual securities in
anticipation of market moves. Successful use by us of futures contracts will
depend upon Lord Abbett's ability to predict movements in the direction of the
over-the-counter market generally, which requires different skills and
techniques than predicting changes in the prices of individual stocks.

SEGREGATED ACCOUNTS (Developing Growth Fund). To the extent required to comply
with Securities and Exchange Commission Release 10666 and any related SEC
policies, when purchasing a futures contract, or writing a put option,
Developing Growth Fund will maintain in a segregated account at it custodian
bank cash, U.S. Government and other permitted securities to cover its position.

2.
Directors and Officers

The following director 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
and/or director of all of the twelve other Lord Abbett-sponsored funds. He is an
"interested person" as defined in the Act, and as such, may be considered to
have an indirect financial interest in the Rule 12b-1 Plan described in the
Prospectus.

Robert S. Dow, age 53, Chairman and President

The following outside directors are also directors or trustees of all or some of
the twelve other Lord Abbett-sponsored funds referred to above.

E. Thayer Bigelow
Time Warner Inc.
1271 Avenue of the Americas
New York, New York

Senior Adviser, Time Warner Inc. Formerly, Acting Chief Executive Officer
of Courtroom Television Network (1997 - 1998). Formerly, President and Chief
Executive Officer of Time Warner Cable Programming, Inc. (1991 - 1997). Prior to
that, President and Chief Operating Officer of Home Box Office, Inc. Age 57.

William H. T. Bush
Bush-O'Donnell & Co., Inc.
101 South Hanley Road, Suite 1025
St. Louis, Missouri

Co-founder and Chairman for the Board of financial advisory firm of
Bush-O'Donnell & Company. Age 60.

Robert B. Calhoun
Monitor Clipper Partners
650 Madison Avenue, 9th Floor
New York, New York

Managing Director of Monitor Clipper Partners and President of The Clipper Group
L.P., both private equity investment funds. Age 56.

Stewart S. Dixon
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois

Partner in the law firm of Wildman, Harrold, Allen & Dixon. Age 68.

John C. Jansing
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
Directorship Inc.
8 Sound Shore Drive
Greenwich, Connecticut
<PAGE>
Managing Director of Directorship Inc., a consultancy in board management and
corporate governance. Formerly 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 65.

Hansel B. Millican, Jr.
Rochester Button Company
1328 Broadway (Suite 816)
New York, New York

President and Chief Executive Officer of Rochester Button Company. Age 70.

Thomas J. Neff
Spencer Stuart
277 Park Avenue
New York, New York

Chairman of Spencer Stuart, an executive search consulting firm. Currently
serves as a Director of Ace, Ltd. (NYSE) Age 61.

For the Fiscal Year Ended January 31, 1998 (Developing
Growth Fund)
For the Fiscal Year Ended December 31, 1998
(Bond-Debenture Fund)
For the Fiscal Year Ended December 31,
1998 (Mid-Cap Value Fund)

The following table sets forth the compensation accrued for each Fund's outside
directors.

Aggregate
Compensation
Accrued by
Name of Director each Fund1

Developing Bond- Mid-Cap
Growth Debenture Value
Fund Fund Fund
E. Thayer Bigelow $1,114 $7,869 $803
William H. T. Bush* $0 $0 $0
Robert B. Calhoun** $0 $0 $0
Stewart S. Dixon $1,092 $7,726 $788
John C. Jansing $1,092 $7,726 $788
C. Alan MacDonald $1,139 $8,064 $822
Hansel B. Millican, Jr. $1,092 $7,726 $788
Thomas J. Neff $1,114 $7,869 $803

*Elected as of August 13, 1998
**Elected as of June 17, 1998

<PAGE>

The following table sets forth information with respect to the equity-based
benefits accrued for outside directors by the Lord Abbett-sponsored funds.

Name of Director Pension or Retirement Benefits
Accrued by each Fund and Twelve
Other Lord Abbett-sponsored
Funds2
E. Thayer Bigelow $17,068
William H. T. Bush* $0
Robert B. Calhoun** $0
Stewart S. Dixon $32,190
John C. Jansing $45,0854
C. Alan MacDonald $30,703
Hansel B. Millican, Jr. $37,747
Thomas J. Neff $19,853

The following table sets forth the total compensation payable by such funds
to the outside directors. No director of the funds associated with Lord
Abbett and no officers of the funds received any compensation from the funds
for acting as a director or officer.

Name of Director
For Year Ended December 31, 1997
Total Compensation Accrued by each Fund
and Twelve Other Lord Abbett-sponsored
Funds3

Developing
Growth
Fund
E. Thayer Bigelow $56,000
William H. T. Bush* $0
Robert B. Calhoun** $0
Stewart S. Dixon $55,000
John C. Jansing $55,000
C. Alan MacDonald $57,400
Hansel B. Millican, Jr. $55,000
Thomas J. Neff $56,000

1.Outside directors' fees, including attendance fees for board and committee
meetings, are allocated among 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 directors/trustees is being deferred under a plan that deems the
deferred amounts to be invested in shares of the Fund for later distribution
to the directors/trustees. The amount of aggregate compensation payable by
each Fund as of its 1997 fiscal year end deemed invested in Fund shares,
including dividends reinvested and changes in net asset value applicable to
such deemed investments, were as follows:

2. The amounts were accrued by the Lord Abbett-sponsored funds for the 12 months
ended December 31, 1997 or November 30, 1997 with respect to the equity based
plans established for independent directors/trustees in 1996. This plan
supercedes a previously approved retirement plan for all future directors.
Directors/trustees participating in the retirement plan had the option to
convert their accrued benefits under the plan. All of the outside
directors/trustees except one made such an election.

3. This column shows aggregate compensation, including directors/trustees fees
and attendance fees for board and committee meetings, of a nature referred to
in footnote one, accrued by the Lord Abbett-sponsored funds during the year
ended December 31, 1997. The amounts of the aggregate compensation payable by
the Developing Growth Fund as of January 31, 1998 deemed invested in Fund
shares, including dividends reinvested and changes in net asset value
applicable to such deemed investments, were: Mr. Bigelow, $3,724; Mr. Dixon,
$29,166; Mr. Jansing, $65,878; Mr. MacDonald, $22,129; Mr. Millican, $ 67,603
and Mr. Neff, $ 68,005. If the amounts deemed invested in Fund shares were
added to each director's actual holdings of Fund shares as of January 31,
1998, each would own, the following: Mr. Bigelow, 260 shares; Mr. Dixon,
3,125 shares; Mr. Jansing, 22,764 shares; Mr. MacDonald, 1,550 shares; Mr.
Millican, 4,737 shares; and Mr. Neff, 8,420 shares.

The amounts of the aggregate compensation payable by the Bond Debenture Fund
as of December 31, 1997 deemed invested in Fund shares, including dividends
reinvested and changes in net asset value applicable to such deemed
investments, were: Mr. Bigelow, $ 21,180; Mr. Dixon, $ 67,108; Mr. Jansing, $
86,838; Mr. MacDonald, $ 39,508; Mr. Millican, $87,581 and Mr. Neff, $
87,615. If the amounts deemed invested in Fund shares were added to each
director's actual holdings of Fund shares as of December 31, 1997, each would
own, the following: Mr. Bigelow, 26,688 shares; Mr. Dixon, 1,284 shares; Mr.
Jansing, 1,503 shares; Mr. MacDonald, 64,893 shares; Mr. Millican, 103,529
shares; and Mr. Neff, 1,295 shares.

The amounts of the aggregate compensation payable by the Mid-Cap value Fund
as of December 31, 1997 deemed invested in Fund shares, including dividends
reinvested and changes in net asset value applicable to such deemed investments,
were: Mr. Bigelow, $ 3,646; Mr. Dixon, $57,494; Mr. Jansing, $60,671; Mr.
MacDonald, $20,575; Mr. Millican, $62,256; and Mr. Neff, $62,566. If the amounts
deemed invested in Fund shares were added to each director's actual holdings of
Fund shares as of December 31, 1997 each would own, the following: Mr. Bigelow,
60 shares; Mr. Dixon, 88 shares; Mr. Jansing, 4,479 shares; Mr. MacDonald, 61.5
shares; Mr. Millican, 59 shares; and Mr. Neff, 933 shares.

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 Fund have
been associated with Lord Abbett for over five years. Of the following,
Messrs. Carper, Hilstad, Morris, and Walsh are partners of Lord Abbett; the
others are employees:

Executive Vice Presidents:
Stephen J. McGruder, age 55 (Developing Growth Fund)
Christopher Towle, age 41 (Bond-Debenture Fund)
Edward K. von der Linde, age 38 (Mid-Cap Value Fund)

Vice Presidents:
Paul A. Hilstad, age 55, Vice President and Secretary (all Funds) (with Lord
Abbett since 1995 - formerly Senior Vice President and General Counsel of
American Capital Management & Research, Inc.)

Thomas J. Baade, age 33 (Bond-Debenture Fund) (with Lord Abbett since 1998
- - formerly Vice President of Smith Barney from 1990 to 1998)

Zane Brown, age 46 (Bond-Debenture Fund)

Daniel E. Carper, age 46 (all Funds)

Michael S. Goldstein, age 29 (Bond-Debenture Fund)

Cinda C. Hughes, age 35 (Developing Growth) (with Lord Abbett since 1998 -
formerly Director, Equity Research of Phoenix Duff & Phelps from 1996 to 1998;
prior thereto Analyst, PaineWebber from 1993 to 1996)

Thomas W. In, age 30 (Developing Growth) (with Lord Abbett since 1997 -
formerly Assistant Vice President of Deutsche Morgan Grenfell from 1994 to 1997)

Lawrence H. Kaplan, age 41 (all Funds) (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.)
<PAGE>
Thomas F. Konop, age 56 (all Funds)

Robert G. Morris, age 54 (Bond-Debenture Fund, Mid-Cap Value Fund)

A. Edward Oberhaus, age 38 (all Funds)

Keith F. O'Connor, age 43 (all Funds)

Richard S. Szaro, age 55 (Bond-Debenture Fund)

John J. Walsh, age 62 (all Funds)

Treasurer:
Donna M. McManus, age 37 (all Funds) Treasurer (with Lord Abbett since 1996,
formerly a Senior Manager at Deloitte & Touche LLP).

The Funds' By-Laws provide that a Fund shall not hold annual meetings of
stockholders in any year unless one or more matters are required to be acted on
by stockholders under the Act, as amended (the "Act"), or unless called by a
majority of a Board of Directors or by stockholders holding at least one quarter
of the stock of a Fund outstanding and entitled to vote at the meeting. When any
such annual meeting is held, the stockholders will elect directors/trustees and
vote on the approval of the independent auditors of a Fund.

3.
Investment Advisory and Other Services

As described under "Our Management" in the Prospectus, Lord Abbett is the
Funds' investment manager. Eight of the general partners of Lord Abbett are
officers and/or directors of the Funds, and are identified as follows: Zane E.
Brown; Daniel E. Carper; Robert S. Dow; Paul A. Hilstad; Stephen J. McGruder;
Robert G. Morris; Christopher J. Towle; and John J. Walsh.

The other general partners who are neither officers nor directors of the
Funds are: Stephen Allen, John E. Erard, Robert P. Fetch, Daria L. Foster,
Robert I. Gerber, W. Thomas Hudson, Michael B. McLaughlin, Robert J. Noelke, and
R. Mark Pennington. The address of each partner is The General Motors Building,
767 Fifth Avenue, New York, New York 10153-0203.

The services performed by Lord Abbett are described under "Our Management" in
the Prospectus.

Under the Management Agreement, Developing Growth Fund is obligated to pay Lord
Abbett a monthly fee, based on average daily net assets for each month, at the
annual rate of .75 of 1% of the portion of our net assets not in excess of
$100,000,000 and .50 of 1% of such assets over $100,000,000. This fee is
allocated among all class shares based on the classes' proportionate shares of
such average daily net assets. For the fiscal years ended January 31, 1998, 1997
and 1996, the management fees paid to Lord Abbett amounted to $2,325,894,
$1,579,214, and $1,098,965, respectively.

Under its Management Agreement, Bond-Debenture Fund is obligated to pay Lord
Abbett a monthly fee, based on average daily net assets for each month, at the
annual rate of .50 of 1% of the Fund's first $500 million of average daily net
assets and .45% of such assets over $500 million. This fee is allocated among
all classes based on each's proportionate shares of such average daily net
assets. For the fiscal years ended December 31, 1997, 1996 and 1995, the
management fees paid to Lord Abbett by Bond-Debenture Fund amounted to
$11,621,344, $7,802,104, and $5,342,563, respectively.

Under its Management Agreement, Mid-Cap Value Fund is obligated to pay Lord
Abbett a monthly fee, based on average daily net assets at the annual rate of
.75 of 1% on the first $200 million; .65 of 1% on the next $300 million; and .50
of 1% on the excess over $500 million. For the fiscal years ended December 31,
1997, 1996 and 1995, the management fees paid to Lord Abbett by Mid-Cap Value
Fund amounted to $2,102,611, $1,733,689 and $1,584,007.
<PAGE>
We pay 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 security transactions.

Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281, are
the independent accountants of the Funds and must be approved at least annually
by the Boards of Directors to continue in such capacity. They perform audit
services for the Fund, including the audits of financial statements included in
our annual report to shareholders.

The Bank of New York ("BNY"), 48 Wall Street, New York, New York 10286, is the
Funds' custodian. In accordance with the requirements of Rule 17f-5 under the
Act, the Funds' 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.

4.
Portfolio Transactions

Our policy is to obtain best execution on all our portfolio transactions, which
means that we seek to have purchases and sales of portfolio securities executed
at the most favorable prices, considering all costs of the transaction,
including 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 transactions. 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 the Fund and also are employees
of Lord Abbett. These traders do the trading as well for other accounts
- --investment companies (of which they are also officers) and other investment
clients -- managed by Lord Abbett. They are responsible for 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, with 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
Funds; 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 Funds, 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, and 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.
<PAGE>
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 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 our shares and/or
shares of other Lord Abbett-sponsored funds may be preferred. If other clients
of Lord Abbett buy or sell the same security at the same time as we do,
transactions will, to the extent practicable, be allocated among all
participating accounts in proportion to the amount of each order and will be
executed daily until filled so that each account shares the average price and
commission cost of each day. 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 us in the
buying and selling of the same securities as described above. If these clients
wish to buy or sell the same security as we do, 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 we do. We will not seek
"reciprocal" dealer business (for the purpose of applying commissions in whole
or in part for our benefit or otherwise) from dealers as consideration for the
direction to them of portfolio business.

During the fiscal years ended January 31, 1998, 1997 and 1996, Developing Growth
Fund paid total commissions to independent dealers of $1,930,696, $1,696,590,
and $ 981,015, respectively.

During the fiscal years ended December 31, 1997, 1996 and 1995, the
Bond-Debenture Fund paid total commissions to independent broker-dealers of
414,773,720, $8,760,174 and $6,717,922, respectively.

During the fiscal years ending December 31, 1997, 1996 and 1995, the Mid-Cap
Value Fund paid total commissions to independent broker-dealers of $992,190,
$554,002, and $586,752, respectively.

5.Purchases, Redemptions and Shareholder Services

The Funds value their 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
a 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 Directors.

Information concerning how we value our shares for the purchase and redemption
of our shares is described in the Prospectus under "Purchases" and
"Redemptions," respectively.

As disclosed in the Prospectus, we calculate our net asset value and are
otherwise open for business on each day that the NYSE is open for trading. 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.
<PAGE>
The net asset value per share for the Class Y shares will be determined by
taking Class Y shares (net assets divided by shares outstanding). Our Class Y
shares will be offered at net asset value.

The Funds have entered into distribution agreements with Lord Abbett
Distributor, a New York limited liability company 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 Funds, 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 Class Y shares for Class Y
shares of any other eligible Lord Abbett-sponsored fund currently offering Class
Y shares to the public. Currently those other funds consist of Lord Abbett
Affiliated Fund, Inc., Lord Abbett Research Fund, Inc. - Small-Cap Fund and
Growth Opportunities Fund, Lord Abbett Securities Trust - International Fund,
and Lord Abbett Investment Trust - High Yield Fund, Core Fund and Strategic Core
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 Funds 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 Boards of Directors for the Funds 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 30 days' prior written notice will be
given before any such redemption, during which time shareholders may avoid
redemption by bringing their accounts up to the minimum set by the Board.

6.
Past 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 applicable sales charge deduction 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 total return computation for the period.

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.

CLASS Y SHARE PERFORMANCE. Using the computation method described above, the
Developing Growth Fund's cumulative total return for the period of inception
(December 30, 1997) to January 31, 1998 was 2.60%, and for Bond-Debenture Fund
the cumulative total return for the period of inception (March 27, 1997) to June
30, 1998 was .80%.

These figures represent past performance, and an investor should be aware that
the investment return and principal value of a Fund investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
<PAGE>
Therefore, there is no assurance that this performance will be repeated in the
future.

7.
Taxes

The value of any shares redeemed by the Funds or otherwise sold may be more or
less than your tax basis in the shares at the time the redemption or sale is
made. Any gain or loss generally will be taxable for federal income tax
purposes. Any loss realized on the sale, or redemption of Fund shares which you
have held for six months or less will be treated for tax purposes as a long-term
capital loss to the extent of any capital gains distributions which you received
with respect to such shares. Losses on the sale of stock or securities are not
deductible if, within a period beginning 30 days before the date of the sale and
ending 30 days after the date of the sale, the taxpayer acquires stock or
securities that are substantially identical.

As described in the Prospectus under "How We Invest - Risk Factors," the Funds
may be subject to foreign withholding taxes which would reduce the yield on its
investments. Tax treaties between certain countries and the United States may
reduce or eliminate such taxes. It is expected that Fund shareholders who are
subject to United States federal income tax will not be entitled to claim a
federal income tax credit or deduction for foreign income taxes paid by the
Funds.

Gains and losses realized by the Funds 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 gains or losses are 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
gains and will be reduced by the net amount, if any, of such foreign exchange
losses.

If the Funds purchase shares in certain foreign investment entities, called
"PFICs" or "passive foreign investment companies," it may be subject to United
States federal income tax on a portion of any "excess distribution" or gain from
the disposition of such shares, even if such income is distributed as a taxable
dividend by the Funds to its shareholders. Additional charges in the nature of
interest may be imposed on either the Funds or their shareholders with respect
to deferred taxes arising from such distributions or gains. If the Funds were to
invest in a passive foreign investment company with respect to which the Funds
elected to make a "qualified electing fund" election, in lieu of the foregoing
requirements, the Funds 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 Funds. Proposed
legislation would revise the passive foreign investment company rules in various
respects; it is unclear whether and in what form such legislation might be
enacted.

The Funds will be subject to a 4% nondeductible excise tax on certain amounts
not distributed (and not treated as having been distributed) on a timely basis
in accordance with a calendar year distribution requirement. The Fund intends to
distribute to shareholders each year an amount adequate to avoid the imposition
of such excise tax.

Dividends paid by the Funds should qualify for the dividends-received deduction
for corporations, to the extent they are derived from dividends paid by domestic
corporations.

The foregoing discussion relates solely to U.S. federal income tax law as
applicable to United States persons (United States citizens or residents and
United States domestic corporations, partnerships, trusts and estates). Each
shareholder who is not a United States person should consult his tax adviser
regarding the U.S. and foreign tax consequences of the ownership of shares of
the Funds, including a 30% (or lower treaty rate) United States withholding tax
on dividends representing ordinary income and net short-term capital gains, and
the applicability of United States gift and estate taxes to non-United States
persons who own Funds' shares.

<PAGE>

8.
Information About the Funds

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 seven days
before or after any Lord Abbett-sponsored fund or Lord Abbett-managed account
considers a trade or trades in such security, from profiting on trades of the
same security within 60 days and from trading on material and non-public
information. The Code imposes certain similar requirements and restrictions on
the independent directors and trustees of each Lord Abbett-sponsored mutual fund
to the extent contemplated by the recommendations of the Advisory Group.

9.
Financial Statements

The financial statements for the fiscal year ended January 31, 1998, the
semi-annual period ended July 31, 1998, and the report of Deloitte & Touche LLP,
independent auditors, on such financial statements contained in the 1998 Annual
Report to Shareholders of Lord Abbett Developing Growth Fund, Inc. are
incorporated herein by reference to such financial statements and report, in
reliance upon the authority of Deloitte & Touche LLP as experts in auditing and
accounting.

The financial statements for the fiscal year ended December 31, 1997, the
semi-annual period ended June 30, 1998, and the reports of Deloitte & Touche
LLP, independent auditors, on such financial statements contained in the 1997
Annual Report to Shareholders and the June 30, 1998 Semi-Annual Report to
Shareholders of Lord Abbett Bond-Debenture Fund, Inc. are incorporated herein by
reference to such financial statements and reports, in reliance upon the
authority of Deloitte & Touche LLP as experts in auditing and accounting.

The financial statements for the fiscal year ended December 31, 1997, the
semi-annual period ended June 30, 1998, and the report of Deloitte & Touche LLP,
independent auditors, on such financial statements contained in the 1997 Annual
Report to Shareholders of Lord Abbett Mid-Cap Value Fund, Inc. are incorporated
herein by reference to such financial statements and report, in reliance upon
the authority of Deloitte & Touche LLP as experts in auditing and accounting.

<PAGE>

CONSENT OF INDEPENDENT AUDITORS

Lord Abbett Developing Growth Fund, Inc.:

We consent to the incorporation by reference in Post-Effective Amendment No. 26
to Registration Statement No. 2-62797 of our report dated February 25, 1998
appearing in the Annual Report to Shareholders for the year ended January 31,
1998, and to the reference to us under the caption "Financial Highlights" in the
Prospectus and to the references to us under the captions "Investment Advisory
and Other Services" and "Financial Statements" in the Statement of Additional
Information, both of which are part of such Registration Statement.

DELOITTE & TOUCHE LLP
New York, New York
December 3, 1998