Draft--March 11, 1996
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
b(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
LORD ABBETT BOND-DEBENTURE FUND, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
[Letterhead of Lord Abbett Bond-Debenture Fund, Inc.]
FROM THE CHAIRMAN OF THE BOARD
- ------------------------------
Dear Shareholder,
The Board of Directors of Lord Abbett Bond-Debenture Fund, Inc. (the
"Fund") has called an Annual Meeting of Shareholders of the Fund to consider the
matters described below. The board recommends that you vote in favor of each
proposal.
First, the board recommends that you vote to reelect the current
directors of the Fund and to ratify the selection of Deloitte & Touche LLP as
the Fund's independent public accountants.
Second, the board recommends that you vote in favor of a proposed
revision of the fundamental investment policies and restrictions of the Fund
which are intended to provide for greater flexibility in managing the Fund's
portfolio and to permit the board to change applicable policies in the future
without incurring the expense of shareholder meetings.
Third, the directors propose that the Fund enter into a new 12b-1 Plan
and Dis tribution Agreement for your class of shares. This new 12b-1 Plan has
several changes which are designed primarily to maintain the competitive
position of the Fund and to encourage sales of Fund shares. These changes, and
the estimated effect of these changes on the Fund's expenses, are described in
detail in the proxy statement.
Fourth, the directors propose that the Fund's Articles of Incorporation
be amended (i) to authorize the creation of new classes and series of shares of
-
the capital stock of the Fund which is intended to encourage sales of Fund
shares, (ii) to confirm that the Fund may impose contingent deferred sales
--
charges in connection with new classes of shares to be created (this change will
have no effect on your shares) and (iii) to reduce the par value of shares of
---
capital stock of the Fund from $1.00 to $.001 per share in order to reduce costs
when authorizing new shares (this change will have no effect on the value of
your shares).
These various matters are to be voted upon at a meeting of the
shareholders of the Fund to be held in New York on Wednesday, June 19, 1996 at
11:00 a.m.
YOUR VOTE ON THESE ISSUES IS CRITICAL. TO ENSURE THAT YOUR VOTE IS
COUNTED, IT IS IMPORTANT THAT YOU:
1. REVIEW THE ENCLOSED PROXY STATEMENT;
2. COMPLETE AND SIGN THE ENCLOSED PROXY CARD; AND
3. RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE AS SOON AS POSSIBLE.
Your prompt response will help save the Fund the expense of additional
solicitations.
We encourage you to review the enclosed materials. Because we believe
these proposals are in the best interests of shareholders, we encourage you to
vote in favor of the proposals.
Sincerely,
Ronald P. Lynch
Chairman of the Board
April 17, 1996
<PAGE>
PRELIMINARY COPY
LORD ABBETT BOND-DEBENTURE FUND, INC.
767 Fifth Avenue
New York, New York 10153
Tel. No. (212) 848-1800
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
JUNE 19, 1996
PROXY STATEMENT
You are urged to sign and mail the proxy card in the enclosed postage-paid
envelope whether you own a few or many shares. Your prompt return of
the proxy may save the Fund the necessity and expense of further
solicitations to insure a quorum at this meeting.
<PAGE>
LORD ABBETT BOND-DEBENTURE FUND, INC.
767 Fifth Avenue
New York, New York 10153
Telephone No. (212) 848-1800
Notice of Annual Meeting of Shareholders
To Be Held June 19, 1996 April 17, 1996
Notice is given hereby of an annual meeting of the shareholders of Lord Abbett
Bond-Debenture Fund, Inc. (the "Fund"). The meeting will be held at the offices
of Lord, Abbett & Co., on the 11th floor of The General Motors Building, 767
Fifth Avenue, New York, New York, on Wednesday, June 19, 1996, at 11:00 a.m.,
for the following purposes and to transact such other business as may properly
come before the meeting and any adjournments thereof.
ITEM 1. To elect directors;
ITEM 2. To ratify or reject the selection of Deloitte & Touche LLP as
independent public accountants of the Fund for the current fiscal
year;
ITEM 3. To approve or disapprove certain changes in the Fund's fundamental
investment policies and restrictions;
ITEM 4. To approve or disapprove a new Distribution Plan and Agreement for the
Fund's existing class of shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940;
ITEM 5. To approve or disapprove an amendment to the Fund's Articles of
Incorporation (i) authorizing the Board of Directors to create new
-
classes and series of shares of capital stock; and (ii) confirming
--
that the board may impose contingent deferred sales charges in
connection with new classes of shares to be created (this change will
have no effect on your shares); and
ITEM 6. To approve or disapprove an amendment to the Fund's Articles of
Incorporation reducing the par value per share from $1.00 to $0.001 in
order to reduce costs when authorizing new shares (this change will
have no effect on the value of your shares).
By order of the Board of Directors
Kenneth B. Cutler
Vice President and Secretary
The Board of Directors has fixed the close of business on March 22, 1996 as the
record date for determination of shareholders of the Fund entitled to notice of
and to vote at the meeting. Shareholders are entitled to one vote for each share
held. As of March 22, 1996, there were ____ shares of the Fund issued and
outstanding.
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD.
SIGN, DATE AND RETURN IT IN THE ENVELOPE PROVIDED.
TO SAVE THE COST OF ADDITIONAL SOLICITATIONS, PLEASE MAIL YOUR PROXY PROMPTLY.
2
<PAGE>
LORD ABBETT BOND-DEBENTURE FUND, INC.
767 Fifth Avenue
New York, New York 10153
April 17, 1996
PROXY STATEMENT
---------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors of Lord Abbett Bond-Debenture
Fund, Inc., a diversified open-end management investment company incorporated
under the laws of Maryland (the "Fund"), for use at an annual meeting of share
holders of the Fund to be held at 11:00 a.m. on Wednesday, June 19, 1996 at the
offices of Lord, Abbett & Co., the investment manager and principal underwriter
of the Fund ("Lord Abbett"), on the 11th floor of the General Motors Building,
767 Fifth Avenue, New York, New York 10153, and at any adjournments thereof.
This proxy statement and the enclosed proxy card are first being mailed to
shareholders on or about April 17,1996.
At the close of business on March 22, 1996 (the "Record Date"), there
were issued and outstanding ___________ shares of the Fund. Only shareholders
of record at the close of business on the Record Date are entitled to notice of,
and to vote at, the annual meeting or any adjournment thereof. Proxies will be
solicited by mail. Additional solicitations may be made by telephone, facsimile
or personal contact by officers or employees of Lord Abbett and its affiliates.
The Fund may also request brokerage houses, custodians, nominees, and
fiduciaries who are shareholders of record to forward proxy materials to
beneficial owners. D.F. King & Co. has been retained to assist in the
solicitation of proxies at an estimated cost of $_______. The cost of the
solicitation will be borne by _____________.
Shareholders are entitled to one vote for each full share, and a pro
portionate vote for each fractional share, of the Fund held as of the Record
Date. Under Maryland law, shares owned by two or more persons (whether as joint
tenants, co-fiduciaries or otherwise) will be voted as follows, unless a written
instrument or court order providing to the contrary has been filed with the
Secretary of the Fund: (1) if only one votes, that vote binds all; (2) if more
- -
than one votes, the vote of the majority binds all; and (3) if more than one
-
votes and the vote is evenly divided, the vote will be cast proportionately. If
the enclosed form of proxy is properly executed and returned in time to be voted
at the meeting, the proxies named therein will vote the shares represented by
the proxy in accordance with the instructions marked thereon. Unmarked proxies
will be voted FOR each of the items described in this Proxy Statement and any
other matters as deemed appropriate. A proxy may be revoked by the signer at
any time at or before the meeting by written notice to the Fund, by execution of
a later-dated proxy or by voting in person at the meeting.
1. ELECTION OF DIRECTORS
The nominees for election as directors are Ronald P. Lynch, Robert S.
Dow, E. Thayer Bigelow, Stewart S. Dixon, John C. Jansing, C. Alan MacDonald,
<PAGE>
Hansel B. Millican, Jr. and Thomas J. Neff, who have been nominated by the
Board of Directors to succeed themselves. The individuals named as proxies
intend to vote the proxies, unless otherwise directed, in favor of the election
of such nominees, each of whom has agreed to continue to serve as a director of
the Fund. Management of the Fund has no reason to believe that any nominee will
be unable to serve as a director. If any nominee should be unable to serve as a
director, it is the intention of the individuals named as proxies to vote for
the election of such person or persons as the Board of Directors may, in its
discretion, recommend.
Information about each person nominated for election as a director is set
forth in the following table. Except where indicated, each of the persons
listed in the table has held the principal occupation listed opposite his name
for the past five years.
<TABLE>
<CAPTION>
Director of
Names and Ages of Principal Occupation and Director- the Fund
Directors of the Fund ships Since
- -----------------------------------------------------------------------------------
<C> <S> <C>
Ronald P. Lynch (1)(2) Chairman of the Board of the Fund. 1983
60 Partner of Lord Abbett.
Robert S. Dow (1)(2) President of the Fund. 1989
51 Partner of Lord Abbett.
E. Thayer Bigelow President and Chief Executive of 1994
(2) 54 Time Warner Cable Programming,
Inc. Formerly President and Chief
Operating Officer of Home Box
Office, Inc.
Stewart S. Dixon (2) Partner in the law firm of Wildman, 1976
65 Harrold, Allen & Dixon.
John C. Jansing (2) Retired. Former Chairman of Inde- 1979
70 pendent Election Corporation of
America, a proxy tabulating firm.
C. Alan MacDonald (2) General Partner, The Marketing 1988
62 Partnership, Inc., a full service
marketing consulting firm. Formerly
Chairman and Chief Executive Officer
of Lincoln Snacks, Inc., manufacturer
of branded snack foods (1992-1994).
Formerly President and Chief
Executive Officer of Nestle Foods
Corp., and prior to that, President
and Chief Executive Officer of
Stouffer Foods Corp., both
subsidiaries of Nestle SA,
Switzerland. Currently serves as
Director of Den West Restaurant Co.,
J. B. Williams, and Fountainhead
Water Company.
</TABLE>
2
<PAGE>
<TABLE>
Director of
Names and Ages of Principal Occupation and Director- the Fund
Directors of the Fund ships Since
- -----------------------------------------------------------------------------------
<C> <S> <C>
Hansel B. Millican, Jr. (2) President and Chief Executive Officer 1983
67 of Rochester Button Company.
Thomas J. Neff (2) President, Spencer Stuart & Asso- 1983
58 ciates, an executive search consulting
firm.
</TABLE>
___________________
(1) "Interested person" of the Fund and Lord Abbett, within the meaning of the
Investment Company Act of 1940, as amended, because of his association with
Lord Abbett.
(2) Also a director or trustee of the other Lord Abbett-sponsored funds except
for Lord Abbett Research Fund, Inc., of which only Messrs. Lynch, Dow,
Millican and Neff are directors.
Listed below is the number of shares of the Fund owned beneficially by
each director as of March 22, 1996, together with the number of "phantom" shares
credited to the account of each director under a plan (the "Deferred Plan")
permitting independent directors to defer their directors' fees and to have the
deferred amounts deemed invested in shares of the Fund for later payment. Also
shown is the number of shares owned beneficially by the directors and officers
as a group, together with such "phantom" shares credited to the accounts of
directors and officers as a group. In each case, the amounts shown are less than
1% of the Fund's outstanding capital stock.
Number of Shares Beneficially
Name Owned
and Phantom Shares/(1)/
- ------------------------------------------------------------------
Ronald P. Lynch 1,214
Robert S. Dow 1,402
E. Thayer Bigelow 494
Stewart S. Dixon 6,168
John C. Jansing 6,743
C. Alan MacDonald 67,461
Hansel B. Millican, Jr. 83,087
Thomas J. Neff 6,613
Directors and Officers as a 206,178
group
___________________
(1) Of the shares listed in the foregoing table, the following constitute
"phantom" shares credited to directors under the Deferred Plan:
3
<PAGE>
Mr. Bigelow, 494 shares; Mr. Dixon, 5,763 shares; Mr. Jansing, 6,157 shares; Mr.
MacDonald, 3,392 shares; Mr. Millican, 6,195 shares; Mr. Neff, 6,211 shares; and
directors and officers as a group: 28,212 shares.
The Board of Directors has only one standing committee, an Audit Committee,
consisting of Messrs. Bigelow, MacDonald and Millican. The functions performed
by the Audit Committee include recommendation of the selection of independent
public accountants for the Fund to the Board of Directors for approval, review
of the scope and results of audit and non-audit services, the adequacy of
internal controls and material changes in accounting principles and practices
and other matters when requested from time to time by the directors (the
"Independent Directors") who are not "interested persons" of the Fund within the
meaning of the Investment Company Act of 1940, as amended (the "Act"). The
Audit Committee held four meetings during the fiscal year ended December 31,
1995.
The Board of Directors of the Fund met eleven times during the fiscal year
ended December 31, 1995, and each director attended at least 75% of the total
number of meetings of the Board and, if he was a member of the Audit Committee,
of such committee.
The second column of the following table sets forth the compensation accrued
by the Fund for the Independent Directors. The third and fourth columns set
forth information with respect to the retirement plan for Independent Directors
maintained by the Fund and the other Lord Abbett-sponsored funds. The fifth
column sets forth the total compensation accrued by the Fund and such other
funds for the Independent Directors. The second, third and fourth columns give
information for the Fund's most recent fiscal year; the fifth column gives
information for the calendar year ended December 31, 1995. No director of the
Fund associated with Lord Abbett and no officer of the Fund received any
compensation from the Fund for acting as a director or officer.
<TABLE>
<CAPTION>
For Year Ended De-
For the Fiscal Year Ended December 31, 1995 cember 31, 1995
---------------------------------------------------- ---------------------
(I) (II) (III) (IV) (V)
- -------------------- ------------ ------------------ ----------------- ----------------------
Name of Director Aggregate Pension or Retire- Estimated Annual Total Compensation
Com- ment Benefits Benefits Upon Re- Accrued by the Fund
pensation Ac- Accrued by the tirement Proposed and Fifteen Other
crued by the Fund and to be Paid by the Lord Abbett-spon-
Fund/1/ Fifteen Other Fund and Fifteen sored Funds/3/
Lord Abbett- Other Lord
sponsored Funds/2/ Abbett-sponsored
Funds/2/
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
E. Thayer Bigelow $3,534 $ 9,772 $33,600 $41,700
Stewart S. Dixon $3,517 $22,472 $33,600 $42,000
John C. Jansing $3,642 $28,480 $33,600 $42,960
C. Alan MacDonald $3,589 $27,435 $33,600 $42,750
Hansel B. Millican, Jr. $3,646 $24,707 $33,600 $43,000
Thomas J. Neff $3,559 $16,126 $33,600 $42,000
</TABLE>
4
<PAGE>
(1) Independent Directors' fees, including attendance fees for board and
committee meetings, are generally allocated among all Lord Abbett-sponsored
funds based on net assets of each fund. A portion of the fees payable by
the Fund to its Independent Directors are being deferred under a plan that
deems the deferred amounts to be invested in shares of the Fund for later
distribution to the directors. The total amount accrued under the plan for
each Independent Director since the beginning of his tenure with the Fund,
including dividends reinvested and changes in net asset value applicable to
such deemed investments, as of December 31, 1995, were as follows: Mr.
Bigelow, $4,593; Mr. Dixon, $53,543; Mr. Jansing, $57,202; Mr. MacDonald,
$31,512; Mr. Millican, $57,554; and Mr. Neff, $57,706.
(2) Each Lord Abbett-sponsored fund has a retirement plan providing that
Independent Directors will receive annual retirement benefits for life
equal to 80% of their final annual retainers following retirement at or
after age 72 with at least 10 years of service. Each plan also provides for
a reduced benefit upon early retirement under certain circumstances, a pre-
retirement death benefit and actuarially reduced joint-and-survivor spousal
benefits. The amounts stated in column (IV) would be payable annually under
such re tirement plans if the director were to retire at age 72 and the
annual retainers payable by such funds were the same as they are today.
The amounts set forth in column (III) were accrued by the Lord Abbett-
sponsored funds during the fiscal year ended December 31, 1995 with respect
to the retirement benefits set forth in column (IV).
(3) This column shows aggregate Independent Director's fees, including
attendance fees for board and committee meetings, of a nature referred to
in the first sentence of footnote (1), accrued by the Lord Abbett-sponsored
funds during the year ended December 31, 1995.
Listed below are the executive officers of the Fund, other than Messrs.
Lynch and Dow who are listed above in the table of nominees. Each executive
officer has been associated with Lord Abbett for over five years, except as
indicated. Messrs. Allen, Carper, Cutler, Henderson, Morris, Nordberg and Walsh
are partners of Lord Abbett; the others listed below are employees.
Stephen I. Allen, age 42, Vice President since 1994.
Daniel E. Carper, age 43, Vice President since 1986.
Kenneth B. Cutler, age 63, Vice President and Secretary since 1976.
John J. Gargana, Jr., age 64, Vice President since 1976.
Thomas S. Henderson, age 64, Vice President since 1979.
Paul A. Hilstad, age 53, Vice President since 1995 (with Lord Abbett since 1995
- -formerly Senior Vice President and General Counsel of American Capital Manage
ment & Research, Inc.).
Thomas F. Konop, age 54, Vice President since 1987.
Robert G. Morris, age 51, Vice President since 1995.
5
<PAGE>
E. Wayne Nordberg, age 59, Vice President since 1988.
Keith F. O'Connor, age 40, Treasurer since 1987.
Victor W. Pizzolato, age 63, Vice President since 1976.
Christopher J. Towle, age 38, Executive Vice President since 1995.
John J. Walsh, age 60, Vice President since 1976.
Pursuant to the Fund's By-Laws, the election of each director of the Fund
requires the affirmative vote of a majority of the shares of the Fund voted at
the meeting. If a shareholder abstains from voting on this matter, then the
shares held by such shareholder shall be deemed present at the meeting for
purposes of determining a quorum and for purposes of calculating the vote with
respect to this matter, but shall not be deemed to have been voted in favor of
this matter. If a broker returns a "non-vote" proxy, indicating a lack of
authority to vote on this matter, then the shares covered by such non-vote shall
be deemed present at the meeting for purposes of determining a quorum but shall
not be deemed to be represented at the meeting for purposes of calculating the
vote with respect to this matter.
The Board of Directors recommends that the shareholders vote FOR the
election of each of the nominees as a director of the Fund.
2. RATIFICATION OR REJECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche LLP as the in
dependent public accountants of the Fund for the fiscal year ending December 31,
1996. The Act requires that such selection be submitted for ratification or
rejection at the next annual meeting of shareholders if such meeting be held.
Deloitte & Touche LLP (or a predecessor firm) acted as the Fund's independent
public accountants for the year ended December 31, 1995, and for a number of
years prior thereto. Based on information in the possession of the Fund, and
information furnished by Deloitte & Touche LLP, the firm has no direct financial
interest and no material indirect financial interest in the Fund. A
representative of Deloitte & Touche LLP is expected to attend the meeting and
will be provided with an opportunity to make a statement and answer appropriate
questions.
Ratification of the selection of Deloitte & Touche LLP requires the
affirmative vote of a majority of the shares of the Fund voted at the meeting.
If a shareholder abstains from voting on this matter, then the shares held by
such shareholder shall be deemed present at the meeting for purposes of
determining a quorum and for purposes of calculating the vote with respect to
this matter, but shall not be deemed to have been voted in favor of this matter.
If a broker returns a "non-vote" proxy, indicating a lack of authority to vote
on this matter, then the shares covered by such non-vote shall be deemed present
at the meeting for purposes of determining a quorum but shall not be deemed to
be represented at the meeting for purposes of calculating the vote with respect
to this matter.
6
<PAGE>
The Board of Directors recommends that shareholders vote to ratify the
selection of Deloitte & Touche LLP as the Fund's independent public accountants
for the fiscal year ending December 31, 1996.
3. PROPOSAL TO AMEND THE FUNDAMENTAL INVESTMENT RESTRICTIONS AND POLICIES OF
THE FUND
The Board of Directors has approved various amendments to the Fund's
investment policies and restrictions in order to provide increased flexibility
in managing the Fund's investment portfolio. Those investment policies and
restrictions designated "fundamental" may only be changed by the vote of a
"majority" (as defined in the Act) of the Fund's voting securities. Those
investment policies and restrictions designated "non-fundamental" may be changed
by the vote of the Board of Directors alone. Therefore, the proposed amendments
to the fundamental policies and restrictions described below require shareholder
approval. The Fund's current and proposed investment policies and restrictions
(both fundamental and non-fundamental) with respect to various investment
techniques and securities are set forth in Exhibit A attached hereto.
Investment policies and restrictions govern generally the investment
activities of the Fund and limit its ability to invest in certain types of
securities or engage in certain types of transactions. The proposed changes are
not expected to affect materially the current operations of the Fund. Although
the proposed fundamental investment policies and restrictions are less
restrictive than the current fundamental investment policies and restrictions of
the Fund, non-fundamental restrictions have been adopted, to become effective
with the proposed amendments to the fundamental policies and restrictions, which
will limit the effect of such changes on the operations of the Fund. The
proposed fundamental policies and restrictions are intended principally to
provide greater flexibility in the future management of the Fund's investment
portfolio. The Board of Directors has no present intention of approving actions
permitted by these less restrictive fundamental policies. If it were to do so,
the risks of investing in the Fund could be increased. No change is proposed
with respect to the Fund's investment objective, which is high current income
and the opportunity for capital appreciation to produce a high total return
through a professionally-managed portfolio consisting primarily of convertible
and discount debt securities, many of which are lower-rated.
The proposed policies and restrictions restate many of the policies and
restrictions currently in effect for the Fund. In some instances, certain
fundamental policies and restrictions have been modified or eliminated in
accordance with developments in Federal or state blue sky regulations or in the
securities markets since the inception of the Fund. In other instances, as
illustrated in Exhibit A, certain policies and restrictions previously deemed
fundamental have been redesignated non-fundamental. By making certain policies
and restrictions non-fundamental, the Board may amend a policy or restriction as
it deems appropriate and in the best interest of the Fund and its shareholders,
without incurring the costs (normally borne by the Fund and its shareholders) of
seeking a shareholder vote. Also, certain of the proposed fundamental
investment policies and restrictions are stated in terms of "to the extent
permitted by applicable law". Applicable law can change over time and may
become more or less restrictive as a result. The policies and restrictions have
been drafted in this manner so that a change in law would not require the Fund
to
7
<PAGE>
seek a shareholder vote to amend the policy or restriction to conform to
applicable law, as revised.
Approval of the proposed amendments to the Fund's fundamental investment
restrictions and policies requires the affirmative vote of a "majority" (as
defined in the Act) of the Fund's voting securities. A "majority" vote is
defined in the Act as the vote of the holders of the lesser of: (i) 67% or more
-
of the voting securities present or represented by proxy at the shareholders
meeting, if the holders of more than 50% of the outstanding voting securities
are present or represented by proxy, or (ii) more than 50% of the outstanding
--
voting securities. If a shareholder abstains from voting on this matter, then
the shares held by such shareholder shall be deemed present at the meeting for
purposes of determining a quorum and for purposes of calculating the vote with
respect to this matter, but shall not be deemed to have been voted in favor of
this matter. If a broker returns a "non-vote" proxy, indicating a lack of
authority to vote on this matter, then the shares covered by such non-vote shall
be deemed present at the meeting for purposes of determining a quorum but shall
not be deemed to be represented at the meeting for purposes of calculating the
vote with respect to this matter.
If the proposed amendments are not approved by the shareholders of the
Fund, the current fundamental policies and restrictions will continue in effect.
The Board of Directors recommends that shareholders vote in favor of the
proposed amendments to the Fund's fundamental investment restrictions and
policies.
4. NEW DISTRIBUTION PLAN AND AGREEMENT FOR THE
CLASS A SHARES
At a meeting of the Board of Directors of the Fund held on March 14, 1996,
the directors of the Fund unanimously approved, subject to shareholder approval,
and determined to submit to the shareholders for approval, a new Distribution
Plan and Agreement pursuant to Rule 12b-1 under the Act (the "Proposed Plan")
for the existing class of Fund shares. This class of shares is to be designated
the Class A Shares -- see Item 5 below. The text of the Proposed Plan is
attached hereto as Exhibit B. The directors who approved the Proposed Plan
include all of the Independent Directors, none of whom is an "interested person"
of the Fund within the meaning of the Act or has a direct or indirect financial
interest in the operations of the Proposed Plan or in any agreements related
thereto.
If approved by shareholders, the Proposed Plan will replace a dis tribution
plan and agreement (the "Current Plan") that was approved by shareholders on
March 14, 1990 and became effective June 1, 1990. The Current Plan was last
amended by action of the Board of Directors on June 12, 1991. The changes
included in the Proposed Plan, which are described below, are designed primarily
to maintain the competitive position of the Class A Shares of the Fund.
Under the Current Plan (except as to certain accounts for which tracking
data is not available), the Fund pays dealers through Lord Abbett (1) an annual
-
service fee (payable quarterly) of 0.25% of the average daily net asset value of
shares sold by dealers on or after June 1, 1990 (0.15% of the average daily net
asset value of shares sold, or attributable to shares sold, by dealers prior to
that date) and
8
<PAGE>
(2) a one-time 1% distribution fee, at the time of sale, on all shares sold at
-
the $1 million level by dealers, including sales qualifying at such level under
the rights of accumulation and statement of intention privileges described in
the Fund's prospectus in effect at such time. These service and distribution
fees provide additional incentives for dealers (a) to provide continuing
-
information and investment services to their shareholder accounts and otherwise
to encourage their accounts to remain invested in the Fund and (b) to sell
-
shares of the Fund.
Under the Current Plan, holders of shares on which the 1% dis tribution fee
has been paid are required to pay to the Fund a contingent deferred
reimbursement charge ("CDRC") of 1% of the original cost or the then net asset
value, whichever is less, of such shares if they are redeemed out of the Lord
Abbett-sponsored family of funds on or before the end of the twenty-fourth month
after the month in which the purchase occurred. (An exception is made for
certain re demptions by tax-qualified plans under Section 401 of the Internal
Revenue Code due to plan loans, hardship withdrawals, death, retirement or
separation from service with respect to plan participants.) If the shares are
exchanged into another Lord Abbett fund and are thereafter redeemed out of the
Lord Abbett family on or before the end of such twenty-fourth month, the charge
is collected for the Fund by the other fund. The Fund collects such a charge for
other Lord Abbett-sponsored funds in a similar situation.
Set forth below is a description of the principal changes to be effected
under the Proposed Plan:
(a) Distribution Fees. The Fund's Board of Directors will be authorized
-----------------
under the Proposed Plan, without further shareholder vote, to increase the
amount of distribution fees up to 0.25% of the average annual net assets
attributable to the Class A Shares (the "Distribution Fee Ceiling"). This
increased spending limit is intended primarily to permit the directors to
increase the amount to be spent for distribution to meet changing sales
competition. The directors believe it is desirable to be able to make these
changes without further shareholder approval because additional shareholder
meetings would be time-consuming and costly to the Fund and its shareholders.
The Board of Directors will approve additional charges under this increased
authority only if a majority of the Independent Directors conclude in their
business judgment that there is a reasonable likelihood that the increase will
benefit the Fund and its shareholders.
The one-time 1% distribution fee, payable at the time of certain sales as
described above, is to be charged against the Distribution Fee Ceiling. During
the Fund's last fiscal year, payments of the one-time 1% distribution fee under
the Current Plan totaled 0.01% of the Fund's average net assets. Subject to
shareholder approval of the Proposed Plan, the Board of Directors has authorized
the Fund to continue paying this one-time distribution fee with respect to sales
of Class A Shares, subject to three changes: First, the payments will be made
-----
in connection with sales to retirement plans with 100 or more eligible
employees, in addition to sales at the $1 million level as under the Current
Plan; Second, the payments will be scaled down at certain breakpoints, as
------
follows: 1% of the first $5 million, 0.55% of the next $5 million, 0.50% of the
next $40 million and 0.25% over $50 million of shares sold to a retirement plan
or other qualifying purchaser within a 12-month period (beginning when the first
purchase is made at net asset value); and Third, the payments will be made to
-----
institutions and persons permitted by applicable law and/or rules to receive
9
<PAGE>
such payments ("Authorized Institutions"), rather than just to dealers as is the
case under the Current Plan.
If shareholders approve the Proposed Plan, the Board of Directors has
authorized the Fund to pay, as an additional distribution fee, a supplemental
payment to dealers who have accounts comprising a significant percentage of the
Fund's Class A Share assets and having a lower than average redemption rate and
who have a satisfactory program for the promotion of Class A Shares. Any such
payments will be 0.10% per annum of the average assets of the Fund represented
by the Class A Share accounts of qualifying dealers. This supplemental payment
is intended by the Board of Directors to enhance the Fund's relationships with
those dealers most likely to have a significant impact on the growth of the
Class A Shares.
(b) Service Fees. Service fee payments, which are to be continued under
------------
the Proposed Plan at an annual rate of 0.25% of the average daily net asset
value of shares sold on or after June 1, 1990 (0.15% of the average daily net
asset value of shares sold, or attributable to shares sold, prior to such date),
could be made to all Authorized Institutions (institutions and persons permitted
by applicable law and/or rules to receive such payments), rather than just to
dealers as is the case under the Current Plan.
(c) Use of Payments by Lord Abbett. Lord Abbett would be permitted to use
------------------------------
payments received under the Proposed Plan to provide continuing services to
shareholder accounts not serviced by Authorized Institutions and, with Board
approval, to finance any activity which is primarily intended to result in the
sale of Class A Shares. Any such payments to finance activities primarily
intended to result in the sale of Class A Shares would be subject to the
Distribution Fee Ceiling.
(d) CDRC. The CDRC applicable to the Class A Shares would be substantially
----
similar to that payable under the Current Plan, except that no CDRC would be
payable in connection with redemptions by retirement plans (not just those
qualified under Section 401 of the Internal Revenue Code) attributable to any
benefit payment or distribution of any excess contribution thereunder (not just
those described above in connection with such exception under the Current Plan).
Because CDRC payments will be made directly to the Fund, they will have the
effect of reducing the amount of the distribution fees paid by the Fund for the
purpose of complying with the Distribution Fee Ceiling. As in the case of the
specific distribution fees authorized by the Board of Directors of the Fund, the
CDRC authorized from time to time by the board for the Class A Shares will be
described in the then current prospectus of the Fund.
If the supplemental payment to dealers, the revised one-time dis tribution
fee and the other changes described above had been in effect for the Fund's last
fiscal year, it is estimated that, in the aggregate, they would have increased
the ratio of expenses to average net assets of the Fund from 0.82% to
approximately 0.86%, representing a difference of 0.04%.
(e) Lord Abbett Distributor. The other party to the Proposed Plan is to be
-----------------------
Lord Abbett Distributor LLC, a New York limited liability company, to be formed
as a subsidiary of Lord Abbett ("Lord Abbett Distributor"), rather than Lord
Abbett. Lord Abbett Distributor is to take on all the underwriting functions
currently performed directly by Lord Abbett.
10
<PAGE>
In considering whether to recommend the Proposed Plan for approval, the
Board considered, among other things, the factors set forth below:
(i) Flexibility in Adapting Distribution Fees to Meet Industry-Wide
---------------------------------------------------------------
Changes. During the last several years, there has been significantly increased
competition and pricing experimentation in the mutual fund industry. As the
pace of change increases, the Board of Directors believes it will be useful to
be able to respond more quickly to marketplace pressures, and change in
appropriate cases the amount of the Class A 12b-1 distribution fees to be paid,
without unnecessarily burdening the shareholders with the costs of additional
proxy solicitations. The directors believe that the increased distribution
fees described above are good examples of the desirability of this flexibility.
Based on advice received from Lord Abbett, the decision by the Board to approve
the payment of distribution fees in connection with sales to retirement plans
with 100 or more eligible employees will enable the Class A Shares to compete
more effectively in this growing and important market. The 0.10% per annum
supplemental payments to dealers who meet certain criteria will permit the Fund
to enhance relationships with those dealers most likely to have a significant
impact on the growth of the Class A Shares.
(ii) Expanding Categories of Persons Eligible to Receive Payments. The
------------------------------------------------------------
Current Plan limits payments thereunder to dealers selling Fund shares. Since
the Current Plan was adopted, different methods of distribution, using different
entities, have developed in the industry. The Board of Directors sees no reason
to limit arbitrarily the categories of persons eligible to receive payments
under the Proposed Plan, and believes that the availability of payments under
the plan will induce such other entities to invest in Class A Shares.
(iii) Flexibility in Distributor's Use of Payments. Lord Abbett has
--------------------------------------------
advised the Board of Directors of the Fund that allowing Lord Abbett Distributor
to retain fees received from the Fund to (i) provide continuing information and
in vestment services to shareholder accounts and (ii) finance, with Board
approval, any activity which is primarily intended to result in the sale of
Class A Shares, will provide useful flexibility and will be in line with common
practice in the industry.
In light of the anticipated benefits to the Fund and its shareholders as a
result of adopting the Proposed Plan, and having reviewed a comparison of the
costs to the Fund of the Current Plan and the Proposed Plan, the Directors of
the Fund have concluded, in the exercise of reasonable business judgment and in
light of their fiduciary duties, that there is a reasonable likelihood that the
Proposed Plan will benefit the Fund and its shareholders. There can, however,
be no assurance that the anticipated benefits will be realized.
Payments by the Fund to dealers through Lord Abbett under the Current Plan
for the fiscal year ended December 31, 1995 were $2,130,000 (representing 0.21%
of the Fund's average net assets during that period).
Set forth in the table below is a summary comparison of the Fund's
expenses, on a current and pro-forma basis taking into account the increased
fees that could be paid under the Proposed Plan. The annual operating expenses
shown in the second column are the Fund's actual expenses for the fiscal year
ended December 31, 1995. The expenses shown in the third column represent, on a
pro-forma basis, such actual expenses of the Fund adjusted to show the effect of
the maximum distribution fee the Board would be authorized to approve under the
Proposed Plan. The fourth
11
<PAGE>
column shows such pro-forma annual operating expenses based on the distribution
fee rate the Board has approved subject to approval of the Proposed Plan by
shareholders. The example set forth below is not a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
I II III IV
- --------------------------------------------------------------------------------------------
Pro Forma
Pro Forma (reflecting
(reflecting estimated
maximum amounts that
Year ended amounts would have
December 31, payable under been paid
1995 (reflecting the Proposed under the
the Current Plan) Plan) Proposed Plan)
----------------- ------------- -------------
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
- --------------------------------------------------------------------------------------------
Maximum Sales Load/1/ on Purchases 4.75% 4.75% 4.75%
Deferred Sales Load /1 / None/2/ None/2/ None/2/
- --------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- --------------------------------------------------------------------------------------------
Management Fee 0.47% 0.47% 0.47%
12b-1 Fees 0.21% 0.50%/3/ 0.25%/4/
Other Expenses 0.14% 0.14% 0.14%
- --------------------------------------------------------------------------------------------
Total Operating Expenses 0.82% 1.11% 0.86%
- --------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. For every $1,000 invested, with reinvestment of all
distributions, you would pay the following total expenses if you closed your
account after the number of years indicated.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------------------------------------------------------
Pro Pro Pro Pro Pro Pro Pro Pro
Forma Forma Forma Forma Forma Forma Forma Forma
Current (maximum) (est.) Current (maximum) (est.) Current (maximum) (est.) Current (maximum) (est.)
- --------- ------- ----- ------- --------- --------- ------- ------- --------- ------- ------- ----
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C><C>
$55/5/ $58/3,5/ $56/4,5/ $72/5/ $81/3,5/ $73/4,5/ $91/5/ $105/3,5/ $92/4,5/ $144/5/ $175/3,5/ $ 147/4,5/
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Sales "load" is referred to as sales "charge" and "deferred sales load" is
referred To as "contingent deferred reimbursement charge" or "CDRC"
throughout this Proxy Statement.
2. Under both the Current Plan and the Proposed Plan, redemptions of shares on
which the Fund's Rule 12b-1 sales distribution fee has been paid are
subject to a CDRC of 1% of the original cost or the then net asset value,
whichever is less, of all shares so purchased which are redeemed out of the
Lord Abbett-sponsored family of funds on or before the end of the twenty-
fourth month after the month in which the purchase occurred, subject to
certain exceptions described herein.
12
<PAGE>
3. Reflects the maximum annual 12b-1 fee of 0.50% that could be paid under the
proposed plan in any year, consisting of a distribution fee of 0.25% and
a service fee of 0.25%.
4. Reflects the estimated level of distribution fees that would have been paid
under the Proposed Plan had it been in effect for the Fund's last fiscal
year.
5. Based on total current and pro-forma operating expenses shown in the table
above.
If the shareholders approve the Proposed Plan, the Proposed Plan shall,
unless terminated as described below, become effective July 12, 1996 and
continue in effect until July 12, 1997 and from year to year thereafter only so
long as such continuance is specifically approved, at least annually, by the
Fund's Board of Directors and its Independent Directors by a vote cast in person
at a meeting called for the purpose of voting on such continuance. The Proposed
Plan may be terminated at any time by a vote of a majority of the Independent
Directors or by a shareholder vote in compliance with Rule 12b-1 under the Act.
The Plan may not be amended to increase materially the amount to be spent for
distribution above the maximum amounts set forth in the Proposed Plan without a
shareholder vote in compliance with Rule 12b-1 under the Act. All material
amendments must be approved by a majority of the Independent Directors.
The Proposed Plan provides that while it is in effect, the selection and
nomination of Independent Directors is committed to the discretion of the
Independent Directors then sitting on the Board. This does not prevent the
involvement of others in such selection and nomination if the final decision on
any such selection or nomination is approved by a majority of the Independent
Directors.
Pursuant to Rule 12b-1 under the Act, an affirmative vote of the holders of
a "majority" (as defined in the Act) of the Fund's voting securities is required
for approval of the Proposed Plan. A "majority" vote is defined in the Act as
the vote of the holders of the lesser of: (i) 67% or more of the voting
-
securities present or represented by proxy at the shareholders meeting, if the
holders of more than 50% of the outstanding voting securities are present or
represented by proxy, or (ii) more than 50% of the outstanding voting
--
securities. If a shareholder abstains from voting on this matter, then the
shares held by such shareholder shall be deemed present at the meeting for
purposes of determining a quorum and for purposes of calculating the vote with
respect to this matter, but shall not be deemed to have been voted in favor of
this matter. If a broker returns a "non-vote" proxy, indicating a lack of
authority to vote on this matter, then the shares covered by such non-vote shall
be deemed present at the meeting for purposes of determining a quorum but shall
not be deemed to be represented at the meeting for purposes of calculating the
vote with respect to this matter.
If the Proposed Plan is not approved by the shareholders of the Fund, the
Current Plan will continue in effect according to its terms.
The Board of Directors recommends that shareholders vote in favor of
adoption of the Proposed Plan.
13
<PAGE>
5. AMENDMENT OF THE ARTICLES OF INCORPORATION TO AUTHORIZE CLASSES AND SERIES
OF SHARES AND TO CONFIRM THAT THE FUND MAY IMPOSE CONTINGENT DEFERRED SALES
CHARGES IN CONNECTION WITH REDEMPTIONS
On March 14, 1996, the Fund's Board of Directors unanimously voted to
approve an amendment to the Articles of Incorporation of the Fund to give the
Fund's Board of Directors the power to classify the Fund's shares into classes
and series, and voted to submit such amendment to the Fund's shareholders for
approval. The full text of the amendment is attached hereto as Exhibit C.
The Fund's Articles of Incorporation presently designate one class of
shares of capital stock and do not authorize the Board of Directors to create
additional classes or series. The Board of Directors believes that the Fund's
best interests will be served if the Board of Directors is able to create new
series of shares and classes of shares within a series, with each share of a
series, regardless of class, sharing pro rata (based on net asset value) in the
portfolio and income of the series and in the series' expenses, except for
differences in expenses resulting from different Rule 12b-1 plans for the
various classes and possibly other class-specific expenses. It is expected that
implementation of such a multi-class fund structure will (i) enable investors in
-
the Fund to choose the distribution option that best suits their individual
situations, (ii) facilitate distribution of the Fund's shares, and (iii)
-- ---
maintain the competitive position of the Fund in relation to other funds that
have implemented or are seeking to implement similar distribution arrangements.
The Board of Directors has approved, subject to shareholder approval, two
classes of shares which are to share in the Fund's portfolio but are to have
different distribution arrangements. The existing class of Fund shares, to be
desig nated the "Class A Shares," will continue to be offered as described in
the Fund's current prospectus, except that the Board of Directors is
recommending that share holders approve a new Distribution Plan and Agreement
pursuant to Rule 12b-1 under the Act that, if approved, will be applicable to
the Class A Shares. See Item 4 above.
The second class of shares, to be designated the "Class C Shares," will be
offered at net asset value without an initial sales charge, but if redeemed for
cash before the first anniversary of purchase, will be subject to a CDRC, or
contingent deferred reimbursement charge, equal to 1% of the lower of their cost
or then net asset value. The Class C Shares are to be subject to a Rule 12b-1
plan that involves annual distribution and service fee payments for the account
of such class equal to 1% of the average net asset value of the Class C shares.
None of these charges will be allocated to the Class A Shares.
It is expected that Class C Shares will also be issued to shareholders of
the Bond-Debenture Trust Series (the "Series") of Lord Abbett Securities Trust
(the "Trust") in connection with an acquisition by the Fund of the assets of the
Series. This transaction, which is subject to certain conditions, has been
approved by the Board of Directors of the Fund, including a majority of the
Independent Directors, as in the best interests of the shareholders of the Fund.
Shareholders of the Fund are not required to approve this proposed transaction.
As of December 31, 1995, the Series' net assets were approximately $147,638,020,
and the Fund's net assets were approximately $1,339,508,323.
14
<PAGE>
If the proposed amendment to the Fund's Articles of Incorporation is
approved, the Board of Directors will be authorized to create and issue one or
more additional classes of shares within the existing series and to create
additional series. Lord Abbett has advised the Board of Directors of the Fund
that it intends to propose to the board in the near future that the board
authorize the Fund to issue a third class of shares, to be designated the "Class
B Shares". If authorized, the Class B Shares are expected to be sold without an
initial sales charge and otherwise to be similar to the Class C Shares except
that (i) they will be subject to a contingent deferred sales charge ("CDSC")
-
that is payable to the distributor of such shares, rather than subject to a
contingent deferred reimbursement charge payable to the Fund as is the case with
the Class C Shares, (ii) the B Share CDSC will be substantially larger than the
--
1% CDRC charged on early redemptions of Class C Shares, (iii) the B Share CDSC
---
will apply over a period of time substantially longer than the 12 months
applicable to the C Share CDRC, and will scale down to zero over that longer
period, and (iv) the Class B Shares will convert automatically into Class A
--
Shares at net asset value after a period of time.
Shares of all classes will vote together on all matters affecting the Fund,
except for matters, such as approval of a Rule 12b-1 plan or a related service
plan, affecting only a particular class or classes. All shares voting on a
matter will have identical voting rights. All issued shares will be fully paid
and non-assessable, and shareholders will have no pre-emptive or other right to
subscribe to any additional shares. All shares within a series will have the
same rights and be subject to the same limitations set forth in the Articles of
Incorporation with respect to dividends, redemptions and liquidation except for
differences resulting from class-specific Rule 12b-1 plans and related service
plans and certain other class-specific expenses.
The proposed amendment to the Fund's Articles of Incorporation will also
make clear that the Fund may impose a CDSC and other charges (which charges may
vary within and among the classes) payable upon redemption as may be estab
lished from time to time by the Board of Directors of the Fund. The Fund's
Articles of Incorporation currently provide that the Fund may deduct a
redemption charge not exceeding 1% of the net asset value of the shares being
redeemed. The proposed amendment is deemed advisable in order to avoid any
question as to whether the proposed B Share CDSC referred to above, which in
some instances may exceed 1%, may be imposed in connection with the proposed
issuance of the Class B Shares. The Board of Directors has no intention of
increasing the CDRC currently payable or proposed to be payable on certain early
redemptions of your Fund shares. See Item 4 above.
Approval of the proposed amendment to the Articles of Incorporation
requires an affirmative vote of more than 50% of the outstanding shares of the
Fund. If a shareholder abstains from voting on this matter, then the shares held
by such shareholder shall be deemed present at the meeting for purposes of
determining a quorum and for purposes of calculating the vote with respect to
this matter, but shall not be deemed to have been voted in favor of this matter.
If a broker returns a "non-vote" proxy, indicating a lack of authority to vote
on this matter, then the shares covered by such non-vote shall be deemed present
at the meeting for purposes of determining a quorum but shall not be deemed to
be represented at the meeting for purposes of calculating the vote with respect
to this matter.
The Board of Directors recommends that shareholders vote in favor of this
proposed amendment to the Articles of Incorporation.
15
<PAGE>
6. AMENDMENT OF THE ARTICLES OF INCORPORATION TO REDUCE THE PAR VALUE OF
SHARES (THIS CHANGE WILL HAVE NO EFFECT ON THE VALUE OF YOUR SHARES)
On March 14, 1996, the Fund's Board of Directors unanimously voted to
approve an amendment to the Articles of Incorporation of the Fund to reduce the
par value of shares of capital stock of the Fund from $1.00 to $0.001 per share,
and voted to submit such amendment to the Fund's shareholders for approval.
This proposed amendment is included in the text of the amendment attached as
Exhibit C.
Under Maryland law, the par value of shares determines the amount of a
corporation's stated capital. Stated capital has little meaning in the case of
an investment company like the Fund. However, when the Fund increases its
authorized capital stock, it must pay a fee based on the aggregate par value of
the new shares. This change will have no effect on the value of your shares.
The Board of Directors therefore recommends that the par value of the Fund's
shares be reduced in order to save the Fund some expense when it increases its
authorized capital stock.
Approval of the proposed amendment to the Articles of Incorporation
requires an affirmative vote of a majority of the outstanding shares of the
Fund. If a shareholder abstains from voting on this matter, then the shares
held by such shareholder shall be deemed present at the meeting for purposes of
determining a quorum and for purposes of calculating the vote with respect to
this matter, but shall not be deemed to have been voted in favor of this matter.
If a broker returns a "non-vote" proxy, indicating a lack of authority to vote
on this matter, then the shares covered by such non-vote shall be deemed present
at the meeting for purposes of determining a quorum but shall not be deemed to
be represented at the meeting for purposes of calculating the vote with respect
to this matter.
The Board of Directors recommends that shareholders vote in favor of this
proposed amendment to the Articles of Incorporation.
7. OTHER INFORMATION
Management is not aware of any matters to come before the meeting other
than those set forth in the notice. If any such other matters do come before
the meeting, the individuals named as proxies will vote, act, and consent with
respect thereto in accordance with their best judgment.
a. Timeliness of Shareholder Proposals.
-----------------------------------
Any shareholder proposals to be presented for action at the Fund's next
shareholder meeting pursuant to the provisions of Rule 14a-8 under the
Securities Exchange Act of 1934, as amended, must be received at the Fund's
principal execu tive offices within a reasonable time in advance of the date
solicitation is made for such meeting. The Fund does not intend to hold another
annual or special meeting of shareholders unless required to do so by the Act.
16
<PAGE>
b. Investment Adviser and Underwriter.
----------------------------------
Lord, Abbett & Co., 767 Fifth Avenue, New York, New York, 10153, acts as
investment adviser and principal underwriter with respect to the Fund.
c. Annual Report Available Upon Request.
------------------------------------
The Fund will furnish, without charge, a copy of the Fund's most recent
annual report and the most recent semi-annual report succeeding the annual
report, if any, to a shareholder upon request. A shareholder may obtain such
reports(s) by writing to the Fund or by calling 800-___-____.
d. Portfolio Transactions.
----------------------
The Fund's policy is to obtain best execution on all portfolio trans
actions, which means that the Fund seeks to have purchases and sales of
portfolio securities executed at the most favorable prices, considering all
costs of the trans action 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, the Fund may pay, as
described below, a higher commission than some brokers might charge on the same
transactions. The Fund's 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, the Fund 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 capacity 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.
The Fund pays a commission rate that the Fund believes is appropriate to
give maximum assurance that the Fund's brokers will provide to the Fund, on a
continuing basis, the highest level of brokerage services available. While the
Fund does not always seek the lowest possible commissions on particular trades,
the Fund believes that its commission rates are in line with the rates that many
other institutions pay. The Fund's 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 the Fund and the other
accounts they manage. Such services include showing the Fund 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 the Fund's brokers also provide research services at least some of
which are useful to Lord Abbett in their overall responsibilities with respect
to the Fund 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
17
<PAGE>
Abbett to access various information bases. Such services may be used by Lord
Abbett in servicing all their accounts, and not all of such services will
necessarily be used by Lord Abbett in connection with their management of the
Fund; conversely, such services furnished in connection with brokerage on other
accounts managed by Lord Abbett may be used in connection with their management
of the Fund, and not all of such services will necessarily be used by Lord
Abbett in connection with their advisory services to such other accounts. The
Fund has been advised by Lord Abbett that research services received from
brokers cannot be allocated to any particular account, are not a substitute for
Lord Abbett's services but are supplemental to their own research effort and,
when utilized, are subject to internal analysis before being incorporated by
Lord Abbett into their investment process. As a practical matter, it would not
be possible for Lord Abbett to generate all of the information presently
provided by brokers. While receipt of research services from brokerage firms
has not reduced Lord Abbett's normal research activities, the expenses of Lord
Abbett could be materially increased if it attempted to generate such additional
information through its own staff and purchased such equipment and software
packages directly from the suppliers.
No commitments are made regarding the allocation of brokerage business to
or among brokers and trades are executed only when they are dictated by
investment decisions of the Fund to purchase or sell portfolio securities.
If two or more broker-dealers are considered capable of offering the
equivalent likelihood of best execution, the broker-dealer who has sold the
Fund's 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 the Fund, 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 com mission 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
the Fund in the buying and selling of the same securities as described above.
If these clients wish to buy or sell the same security as the Fund does, they
may have their transactions executed at times different from the Fund's
transactions and thus may not receive the same price or incur the same
commission cost as the Fund does.
The Fund will not seek "reciprocal" dealer business (for the purpose of
applying commissions in whole or in part for the Fund's benefit or otherwise)
from broker-dealers as consideration for the direction to them of portfolio
business.
18
<PAGE>
For the fiscal years ended December 31, 1995, 1994 and 1993, the Fund paid
total commissions to independent broker-dealers of $115,804, $85,907 and
$33,683, respectively.
LORD ABBETT BOND-DEBENTURE
FUND, INC.
By:_______________________
Kenneth B. Cutler
Vice President and Secretary
19
<PAGE>
EXHIBIT A
COMPARISON OF CURRENT AND PROPOSED INVESTMENT POLICIES AND RESTRICTIONS
<TABLE>
<CAPTION>
CURRENT POLICIES/RESTRICTIONS PROPOSED POLICIES/RESTRICTIONS
----------------------------- ------------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
SHORT SALES/MARGIN.
FUNDAMENTAL FUNDAMENTAL
The Fund may not sell short or buy on The Fund may purchase securities on
margin, although the Fund may obtain short- margin to the extent permitted by applic-
term credit as needed to clear purchases of able law.
securities.
NON-FUNDAMENTAL
The Fund may not make short sales of
securities or maintain a short position
except to the extent permitted by
applicable law.
- ----------------------------------------------------------------------------------------------------
BORROWING.
FUNDAMENTAL FUNDAMENTAL
The Fund may not borrow in excess of 5% of The Fund may not borrow money, except
its gross assets taken at cost or market value, that (i) the Fund may borrow from banks
whichever is lower at the time of borrowing, (as defined in the Act) in amounts up to
and then only as a temporary measure for 33 1/3% of its total assets (including the
extraordinary or emergency purposes. amount borrowed), (ii) the Fund may
borrow up to an additional 5% of its total
assets for temporary purposes, and (iii)
the Fund may obtain such short-term
credit as may be necessary for the clear-
ance of purchases and sales of portfolio
securities.
NON-FUNDAMENTAL
The Fund may not borrow in excess of
5% of its gross assets taken at cost or
market value, whichever is lower at the
time of borrowing, and then only as a
temporary measure for extraordinary or
emergency purposes.
- ----------------------------------------------------------------------------------------------------
UNDERWRITING.
FUNDAMENTAL FUNDAMENTAL
The Fund may not act as an underwriter of The Fund may not engage in the under-
securities issued by others, except where it writing of securities, except pursuant to a
may be deemed to be an underwriter by selling merger or acquisition or to the extent
a portfolio security requiring registration under that, in connection with the disposition of
the Securities Act of 1933. its portfolio securities, it may be deemed
to be an underwriter under federal
securities laws.
- ----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
CURRENT POLICIES/RESTRICTIONS PROPOSED POLICIES/RESTRICTIONS
----------------------------- ------------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
LENDING.
FUNDAMENTAL FUNDAMENTAL
The Fund may not make loans, except for (a) The Fund may not make loans to other
time or demand deposits with banks, (b) pur- persons, except that the acquisition of
chasing commercial paper or publicly-offered bonds, debentures or other corporate debt
debt securities at original issue or otherwise, securities and investment in government
(c) short-term repurchase agreements with obligations, commercial paper, pass-
sellers of securities the Fund has bought and through instruments, certificates of
(d) loans of the Fund's portfolio securities to deposit, bankers acceptances, repurchase
registered broker-dealers if 100% secured by agreements or any similar instruments
cash or cash equivalents, made in full com- shall not be subject to this limitation, and
pliance with applicable regulations and which, except further that the Fund may lend its
in management's opinion, do not expose the portfolio securities, provided that the
Fund to significant risks or impair the Fund's lending of portfolio securities may be
qualification for pass-through tax treatment made only in accordance with applicable
under the Internal Revenue Code. law.
- ----------------------------------------------------------------------------------------------------
REAL ESTATE/COMMODITIES.
FUNDAMENTAL FUNDAMENTAL
The Fund may not buy or sell real estate (in- The Fund may not buy or sell real estate
cluding limited partnership interests but ex- (except that the Fund may invest in
cluding securities of companies, such as real securities directly or indirectly secured by
estate investment trusts, which deal in real real estate or interests therein or issued
estate or interests therein) or oil, gas or other by companies which invest in real estate
mineral leases, or commodities, or commodity or interests therein), commodity or com-
contracts although the Fund may buy securities modity contracts (except to the extent the
of companies that deal in such interests (how- Fund may do so in accordance with ap-
ever, the Fund may hold and sell any of the plicable law and without registering as a
aforementioned or any other property acquired commodity pool operator under the Com-
through ownership of other securities, although modity Exchange Act as, for example,
the Fund may not purchase securities for the with futures contracts).
purpose of acquiring those interests).
NON-FUNDAMENTAL
The Fund may not invest in real estate
limited partnership interests or interests
in oil, gas or other mineral leases, or
exploration or other development
programs, except that the Fund may
invest in securities issued by companies
that engage in oil, gas or other mineral
exploration or development activities.
- ----------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
CURRENT POLICIES/RESTRICTIONS PROPOSED POLICIES/RESTRICTIONS
----------------------------- ------------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
DIVERSIFICATION.
FUNDAMENTAL FUNDAMENTAL
With respect to 75% of its gross assets, the With respect to 75% of its gross assets,
Fund may not buy the securities of any issuer the Fund may not buy securities of one
if the purchase causes the Fund (a) to have issuer representing more than (i) 5% of
more than 5% of its gross assets invested in the Fund's gross assets, except securities
the securities of such issuer (except obligations issued or guaranteed by the U.S. Govern-
of the United States, its agencies or in- ment, its agencies or instrumentalities, or
strumentalities) or (b) to own more than 10% (ii) 10% of the voting securities of such
of the outstanding voting securities of such issuer.
issuer.
- ----------------------------------------------------------------------------------------------------
INVESTMENT IN A SINGLE INDUSTRY.
FUNDAMENTAL FUNDAMENTAL
The Fund may not concentrate its investments The Fund may not invest more than 25%
in a particular industry, though, if it is deemed of its assets, taken at market value, in the
appropriate to the Fund's investment objective, securities of issuers in any particular in-
up to 25% of the market value of the Fund's dustry (excluding securities of the U.S.
gross assets at the time of investment may be Government, its agencies and in-
invested in any one industry classification the strumentalities).
Fund uses for investment purposes.
- ----------------------------------------------------------------------------------------------------
RESTRICTED/ILLIQUID SECURITIES.
FUNDAMENTAL NON-FUNDAMENTAL
The Fund may not invest knowingly more than The Fund may not invest knowingly more
15% of its gross assets in illiquid securities. 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.
- ----------------------------------------------------------------------------------------------------
MORTGAGING AND PLEDGING OF
ASSETS.
FUNDAMENTAL FUNDAMENTAL
The Fund may not pledge, mortgage or hypo- The Fund may not pledge its assets (other
thecate its assets. than to secure borrowings, or to the ex-
tent permitted by the Fund's investment
policies, in connection with hedging
transactions, short sales, when-issued and
forward commitment transactions and
similar investment strategies).
- ----------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
CURRENT POLICIES/RESTRICTIONS PROPOSED POLICIES/RESTRICTIONS
----------------------------- ------------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENTS IN SECURITIES OF
OTHER INVESTMENT COMPANIES.
FUNDAMENTAL
The Fund may not buy securities issued by any NON-FUNDAMENTAL
other open-end investment company (except The Fund may not invest in the securities
pursuant to a plan of merger, consolidation or of other investment companies, except as
acquisition of assets), although the Fund may permitted by applicable law.
invest up to 5% of its gross assets, taken at
market value at the time of investment, in
closed-end investment companies, provided
such purchase is made in the open market and
does not involve the payment of a fee or com-
mission greater than the customary broker's
commission.
- ----------------------------------------------------------------------------------------------------
OPTIONS.
FUNDAMENTAL NON-FUNDAMENTAL
The Fund may not buy or sell put or call op- The Fund may not write, purchase or sell
tions, although the Fund may buy, hold or sell puts, calls, straddles, spreads or
warrants acquired with debt securities. combinations thereof, except to the extent
permitted in the Fund's prospectus and
statement of additional information, as
they may be amended from time to time.
Although it has no current intention to do
so, the Fund may invest in financial
futures and options on financial futures.
- ----------------------------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES OF
ISSUERS IN OPERATION FOR LESS
THAN THREE YEARS.
FUNDAMENTAL NON-FUNDAMENTAL
The Fund may not invest more than 5% of its The Fund may not invest in securities of
gross assets, taken at market value at the time issuers which, with their predecessors,
of investment, in securities of companies with have a record of less than three years
less than three years' continuous operation, continuous operations, if more than 5%
including predecessor companies. of the Fund's total assets would be
invested in such securities (this restriction
shall not apply to mortgage-backed
securities, asset-backed securities or
obligations issued or guaranteed by the
U.S. Government, its agencies or
instrumentalities).
- ----------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
CURRENT POLICIES/RESTRICTIONS PROPOSED POLICIES/RESTRICTIONS
----------------------------- ------------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
OWNERSHIP OF PORTFOLIO SECURI-
TIES BY OFFICERS AND DIRECTORS.
FUNDAMENTAL
The Fund may not hold securities of any NON-FUNDAMENTAL
issuer, any of whose officers, directors or The Fund may not hold securities of any
security holders is an officer, director or part- issuer if more than 1/2 of 1% of the
ner of the Fund's investment adviser or an securities of such issuer are owned
officer or director of the Fund, if after the beneficially by one or more officers or
purchase of the securities of such issuer by the directors of the Fund or by one or more
Fund, one or more of such persons owns bene- partners or members of the underwriter
ficially more than 1/2 of 1% of the securities or investment advisor if these owners in
of such issuer and such persons together own the aggregate own beneficially more than
beneficially more than 5% of such securities. 5% of the securities of such issuer.
- ----------------------------------------------------------------------------------------------------
TRANSACTIONS WITH CERTAIN
PERSONS.
FUNDAMENTAL NON-FUNDAMENTAL
The Fund may not buy from or sell to any of The Fund may not buy from or sell to
its officers, directors, employees, or its in- any of its officers, directors, employees,
vestment adviser or any of its officers, direc- or its investment adviser or any of its
tors, partners or employees, any securities officers, directors, partners or employees,
other than shares of the Fund's common stock. any securities other than shares of the
Fund's common stock.
- ----------------------------------------------------------------------------------------------------
SENIOR SECURITIES.
FUNDAMENTAL
No Policy/Restriction stated. The Fund may not issue senior securities
to the extent such issuance would violate
applicable law.
- ----------------------------------------------------------------------------------------------------
PURCHASE OF WARRANTS.
NON-FUNDAMENTAL NON-FUNDAMENTAL
Pursuant to state law, the Fund will not invest The Fund may not invest in warrants if,
more than 5% of its assets in warrants and not at the time of the acquisition, its
more than 2% of such value in warrants not investment in warrants, valued at the
listed on the New York or American Stock lower of cost or market, would exceed
Exchanges, except when they form a unit with 5% of the Fund's total assets (included
other securities. As a matter of policy the within such limitation, but not to exceed
Fund will not invest more than 5% of its assets 2% of the Fund's total assets, are
in rights. warrants which are not listed on the New
York or American Stock Exchange or a
major foreign exchange).
- ----------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
CURRENT POLICIES/RESTRICTIONS PROPOSED POLICIES/RESTRICTIONS
----------------------------- ------------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
SECURITIES IN DEFAULT.
FUNDAMENTAL NON-FUNDAMENTAL
The Fund may not invest more than 10% of The Fund may not invest more than 10%
the market value of its gross assets at the time of the market value of its gross assets at
of investment in debt securities which are in the time of investment in debt securities
default as to interest or principal. which are in default as to interest or
principal.
- ----------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
EXHIBIT B
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Bond-Debenture Fund, Inc. -- Class A Shares
-------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 12, 1996 by and
between LORD ABBETT BOND-DEBENTURE FUND, INC., a Maryland corporation (the
"Fund"), and LORD ABBETT DISTRIBUTOR LLC, a New York limited liability company
(the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's Class A shares of
capital stock (the "Shares") pursuant to the Distribution Agreement between the
Fund and the Distributor, dated as of the date hereof (the "Distribution
Agreement").
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") with the Distributor, as permitted by Rule 12b-1 under the Act, pursuant
to which the Fund may make certain payments to the Distributor to be used by the
Distributor or paid to institutions and persons permitted by applicable law
and/or rules to receive such payments ("Authorized Institutions") in connection
with sales of Shares and/or servicing of accounts of shareholders holding
Shares.
WHEREAS, the Plan will succeed a Rule 12b-1 Distribution Plan and Agreement
between the Fund and Lord, Abbett & Co. ("Lord Abbett"), an affiliate of the
Distributor.
WHEREAS, the Fund's Board of Directors has determined that there is a
reasonable likelihood that the Plan will benefit the Fund and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows.
1. The Fund hereby authorizes the Distributor to enter into agree ments
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Fund in order to provide additional incentives
to such Authorized Institutions (i) to sell Shares and (ii) to provide
- --
continuing information and investment services to their accounts holding Shares
and otherwise to encourage their accounts to remain invested in the Shares.
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Fund in order to (a) finance any activity which is
-
primarily intended to result in the sale of Shares and (b) provide continuing
-
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the Shares;
provided that (i) any payments referred to in the foregoing clause (a) shall not
- -------- -
exceed the distribution fee permitted to be paid at the time under paragraph 3
of this Plan and shall be authorized by the Board of Directors of the Fund by a
vote of the kind referred to in paragraph 10 of this Plan and (ii) any payments
--
referred to in clause (b) shall not exceed the service fee permitted to be paid
at the time under paragraph 3 of this Plan.
1
<PAGE>
3. The Fund is authorized to pay the Distributor hereunder for remittance
to Authorized Institutions and/or use by the Distributor pursuant to this Plan
(a) service fees and (b) distribution fees, each at an annual rate not to exceed
- -
.25 of 1% of the average annual net asset value of Shares outstanding, except
that service fees payable with respect to Shares that were initially issued, or
are attributable to shares that were initially issued by the Fund or a
predecessor fund prior to June 1, 1990 shall not exceed .15 of 1% of the average
net asset value of such Shares. The Board of Directors of the Fund shall from
time to time determine the amounts, within the foregoing maximum amounts, that
the Fund may pay the Distributor hereunder. Any such fees (which may be waived
by the Authorized Institutions in whole or in part) may be calculated and paid
quarterly or more frequently if approved by the Board of Directors of the Fund.
Such determinations and approvals by the Board of Directors shall be made and
given by votes of the kind referred to in paragraph 10 of this Plan. Payments
by holders of Shares to the Fund of contingent deferred reim bursement charges
relating to distribution fees paid by the Fund hereunder shall reduce the amount
of distribution fees for purposes of the annual 0.25% distribution fee limit.
The Distributor will monitor the payments hereunder and shall reduce such
payments or take such other steps as may be necessary to assure that (i) the
-
payments pursuant to this Plan shall be consistent with Article III, Section 26,
subparagraphs (d)(2) and (5) of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. with respect to investment companies
with asset-based sales charges and service fees, as the same may be in effect
from time to time and (ii) the Fund shall not pay with respect to any Authorized
--
Institution service fees equal to more than .25 of 1% of the average annual net
asset value of Shares sold by (or attributable to Shares or shares sold by) such
Authorized Institution and held in an account covered by an Agreement.
4. The net asset value of the Shares shall be determined as provided in
the Articles of Incorporation of the Fund. If the Distributor waives all or a
portion of the fees which are to be paid by the Fund hereunder, the Distributor
shall not be deemed to have waived its rights under this Agreement to have the
Fund pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Fund hereunder and shall provide to the Fund's Board of
Directors, and the Directors shall review at least quarterly, a written report
of the amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
6. Neither this Plan nor any other transaction between the parties hereto
pursuant to this Plan shall be invalidated or in any way affected by the fact
that any or all of the directors, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as may
otherwise be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's
best judgment and good faith efforts in rendering services under this Plan.
Other than to abide by the provisions hereof and render the services called for
hereunder in good
2
<PAGE>
faith, the Distributor assumes no responsibility under this Plan and, having so
acted, the Distributor shall not be held liable or held accountable for any
mistake of law or fact, or for any loss or damage arising or resulting therefrom
suffered by the Fund or any of the shareholders, creditors, directors, or
officers of the Fund; provided however, that nothing herein shall be deemed to
protect the Distributor against any liability to the Fund or its shareholders by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties hereunder, or by reason of the reckless disregard of its
obligations and duties hereunder.
8. This Plan shall become effective upon the date hereof, and shall
continue in effect for a period of more than one year from that date only so
long as such continuance is specifically approved at least annually by a vote of
the Board of Directors of the Fund, including the vote of a majority of the
directors who are not "interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to this Plan, cast in person at a meeting called for the purpose of
voting on such renewal.
9. This Plan may not be amended to increase materially the amount to be
spent by the Fund hereunder above the maximum amounts referred to in paragraph 3
of this Plan without a shareholder vote in compliance with Rule 12b-1 and Rule
18f-3 under the Act as in effect at such time, and each material amendment must
be approved by a vote of the Board of Directors of the Fund, including the vote
of a majority of the directors who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of this Plan
or in any agree ment related to this Plan, cast in person at a meeting called
for the purpose of voting on such amendment. Amendments to this Plan which do
not increase materially the amount to be spent by the Fund hereunder above the
maximum amounts referred to in paragraph 3 of this Plan may be made pursuant to
paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the forgoing paragraph 9 may be adopted by a vote of the Board of
Directors of the Fund, including the vote of a majority of the directors who are
not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Directors of the Fund may, by such a vote, interpret
this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the directors of the Fund who are not
-
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
-
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such disinterested directors. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meanings as those terms are
defined in the Act.
3
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this in strument to be
executed in its name and on its behalf by its duly authorized repre sentative as
of the date first above written.
LORD ABBETT BOND-DEBENTURE FUND, INC.
By:_____________________________
President
ATTEST:
___________________
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By:_____________________________
4
<PAGE>
EXHIBIT C
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION OF THE FUND AUTHORIZING THE
BOARD OF DIRECTORS TO CREATE NEW CLASSES AND SERIES OF SHARES OF THE CAPITAL
STOCK OF THE FUND, CONFIRMING THAT THE FUND MAY IMPOSE CONTINGENT DEFERRED
SALES CHARGES IN CONNECTION WITH ITS RULE 12B-1 PLANS AND REDUCING
PAR VALUE
___________________________________________________________________
The following text shows those provisions of the Articles of Incorporation of
the Fund that are to be amended; the text that is lined through shows deletions
and the text that is double underlined indicates additions.
ARTICLE V
A. The total number of shares which the Corporation has authority to issue
is 300,000,000 shares of capital stock of the par value of $.001 each, having an
aggregate par value of $300,000. The amount of authorized stock of the
Corporation may be increased or decreased by the affirmative vote of the holders
of a majority of the stock of the Corporation entitled to vote. The amount of
authorized stock of the Corporation may be increased or decreased by the
affirmative vote of the holders of a majority of the stock of the Corporation
entitled to vote. The Board of Directors of the Corporation shall have full
power and authority, from time to time, to classify or reclassify any unissued
shares of stock of the Corporation, including, without limitation, the power to
classify or reclassify unissued shares into series, and to classify or
reclassify a series into one or more classes of stock that may be invested
together in the common investment portfolio in which the series is invested, by
setting or changing the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption of such shares of stock. All shares of stock of a
series shall represent the same interest in the Corporation and have the same
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption as the other shares of stock of that series, except to the extent
that the Board of Directors provides for differing preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption of shares of stock of
classes of such series as determined pursuant to Articles Supplementary filed
for record with the State Department of Assessments and Taxation of Maryland, as
otherwise determined pursuant to these Articles or by the Board of Directors in
accordance with law. Prior to the first classification of unissued shares of
stock into additional series, all outstanding shares of stock shall be of a
single series, and prior to the first classification of a series into additional
classes, all outstanding shares of stock of such series shall be of a single
class. Notwithstanding any other provision of these Articles, upon the first
classification of unissued shares of stock into additional series, the Board of
Directors shall specify a legal name for the outstanding series, as well as for
the new series, in appropriate charter documents filed for record with the State
Department of Assessments and Taxation of Maryland providing for such name
change and classification, and upon the first classification of a series into
additional classes, the Board of Directors shall specify a legal name for the
outstanding class, as well as for the new class or classes, in appropriate
charter documents filed for record with the State Department of
1
<PAGE>
Assessments and Taxation of Maryland providing for such name change and
classification.
B. A description of the relative preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption of all series and classes of series of shares
is as follows, unless otherwise set forth in Articles Supplementary filed for
record with the State Department of Assessments and Taxation of Maryland or
otherwise determined pursuant to these Articles:
1. Assets Belonging to Series. All consideration received or
receivable by the Corporation for the issue or sale of shares of a particular
series, together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in whatever
form the same may be, shall irrevocably belong to that series for all purposes,
subject only to the rights of creditors, and shall be so recorded upon the books
of account of the Corporation. Such consideration, assets, income, earnings,
profits and proceeds, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, together with
any unallocated items (as hereinafter defined) relating to that series as
provided in the following sen tence, are herein referred to as "assets belonging
to" that series. In the event that there are any assets, income, earnings,
profits or proceeds thereof, funds or payments which are not readily
identifiable as belonging to any particular series (collectively "Unallocated
Items"), the Board of Directors shall allocate such Unallocated Items to and
among any one or more of the series created from time to time in such manner and
on such basis as it, in its sole discretion, deems fair and equitable; and any
Unallocated Items so allocated to a particular series shall belong to that
series. Each such allocation by the Board of Directors shall be conclusive and
binding upon the stockholders of all series for all purposes.
2. Liabilities Belonging to Series. The assets belonging to each
particular series shall be charged with the liabilities of the Corporation in
respect of that series, including any class thereof, and with all expenses,
costs, charges and reserves attributable to that series, including any such
class, and shall be so recorded upon the books of account of the Corporation.
Such liabilities, expenses, costs, charges and reserves, together with any
unallo cated items (as hereinafter defined) relating to that
2
<PAGE>
series, including any class thereof, as provided in the following sentence, so
charged to that series, are herein referred to as "liabilities belonging to"
that series. In the event there are any unallocated liabilities, expenses,
costs, charges or reserves of the Corporation which are not readily identifiable
as belonging to any particular series (collectively "Unallocated Items"), the
Board of Directors shall allocate and charge such Unallocated Items to and among
any one or more of the series created from time to time in such manner and on
such basis as the Board of Directors in its sole discretion deems fair and
equitable; and any Unallocated Items so allocated and charged to a particular
series shall belong to that series. Each such allocation by the Board of
Directors shall be conclusive and binding upon the stockholders of all series
for all purposes. To the extent determined by the Board of Directors,
liabilities and expenses relating solely to a particular class (including,
without limitation, distribution expenses under a Rule 12b-1 plan and
administrative expenses under an administration or service agreement, plan or
other arrangement, however designated, which may be adopted for such class)
shall be allocated to and borne by such class and shall be appropriately
reflected (in the manner determined by the Board of Directors) in the net asset
value, dividends and distributions and liquidation rights of the shares of such
class.
3. Dividends. Dividends and distributions on shares of a particular
series may be paid to the holders of shares of that series at such times, in
such manner and from such of the income and capital gains, accrued or realized,
from the assets belonging to that series, after providing for actual and accrued
liabilities belonging to that series, as the Board of Directors may determine.
Such dividends and distributions may vary between or among classes of a series
to reflect differing allocations of liabilities and expenses of such series
between or among such classes to such extent as may be provided in or determined
pursuant to Articles Supplementary filed for record with the State Department of
Assessments and Taxation of Maryland or as may otherwise be determined by the
Board of Directors.
4. Liquidation. In the event of the liquidation or dissolution of
the Corporation, the stockholders of each series shall be entitled to receive,
as a series, when and as declared by the Board of Directors, the excess of the
assets belonging to that series over the liabilities belonging to that series.
The assets so distributable to the stockholders of one or more classes of a
series shall
3
<PAGE>
be distributed among such stockholders in proportion to the respective aggregate
net asset values of the shares of such series held by them and recorded on the
books of the Corporation.
5. Voting. On each matter submitted to vote of the stockholders,
each holder of a share shall be entitled to one vote for each such share
standing in his name on the books of the Corporation irrespective of the series
or class thereof and all shares of all series and classes shall vote as a single
class ("Single Class Voting"); provided, however, that (i) as to any matter with
respect to which a separate vote of any series or class is required by the
Investment Company Act of 1940, as amended from time to time, applicable rules
and regulations thereunder, or the Maryland General Corporation Law, such
requirement as to a separate vote of that series or class shall apply in lieu of
Single Class Voting as described above; (ii) in the event that the separate vote
requirements referred to in (i) above apply with respect to one or more (but
less than all) series or classes, then, subject to (iii) below, the shares of
all other series and classes shall vote as a single class; and (iii) as to any
matter which does not affect the interest of a particular series or class, only
the holders of shares of the one or more affected series or classes shall be
entitled to vote.
6. Conversion. At such times (which times may vary among shares of
a class) as may be determined by the Board of Directors, shares of a particular
class of a series may be automatically converted into shares of another class of
such series based on the relative net asset values of such classes at the time
of conversion, subject, however, to any conditions of conversion that may be
imposed by the Board of Directors.
C. Notwithstanding any provision of law requiring that any action be
taken or authorized by the affirmative vote of the holders of a designated
proportion greater than a majority of the shares or votes entitled to be cast,
such action shall be effective and valid if taken or authorized by the
affirmative vote of the holders of a majority of the total number of shares
outstanding and entitled to vote thereon.
D. No holder of stock of the Corporation shall, as such holder, have any
right to purchase or subscribe for any shares of the capital stock of the
Corporation which it may issue or sell (whether out of the number of shares now
or hereafter authorized by these Articles of Incorporation, or any amendment
thereof, or out of any shares of the capital stock of the Corporation acquired
by it after the issue thereof, or otherwise) other than such right, if any, as
the Board of Directors, in its discretion, may determine.
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ARTICLE VI
A. In furtherance and not in limitation of the powers conferred by
statute and pursuant to these Articles of Incorporation, the Board of Directors
is expressly authorized to do the following:
2. To distribute, in its discretion, for any fiscal year (in the year or
in the next fiscal year) as ordinary dividends and as capital gains
distributions, respectively, amounts sufficient to enable the Corporation as a
regulated investment company to avoid any liability for Federal income tax in
respect of such year. Any distribution or dividend paid to stockholders from
any capital source shall be accompanied by a written statement showing the
source or sources of such payment.
7. To authorize any agreement of the character described in subparagraph 5
or 6 of this paragraph A or other agreement or transaction with any person,
corporation, association, partnership or other organization, although one or
more of the members of the Board of Directors or officers of the Corporation may
be the other party to any such agreement or an officer, director, shareholder,
or member of such other party, and no such agreement shall be invalidated or
rendered voidable by reason of the existence of any such relationship. Any
director of the Corporation who is also a director or officer of such other
corporation or who is so interested may be counted in determining the existence
of a quorum at any meeting of the Board of Directors which shall authorize any
such agreement, and may vote thereat to authorize any such contract or
transaction, with like force and effect as if he were not such director or
officer of such other corporation or not so interested. Any agreement entered
into pursuant to said subparagraphs 5 or 6 shall be consistent with and subject
to the requirements of the Investment Company Act of 1940, as amended from time
to time, applicable rules and regulations thereunder, or any other applicable
Act of Congress hereafter enacted, and no amendment to any agreement entered
into pursuant to said subparagraph 5
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(other than an amendment reducing the compensation of the other party thereto)
shall be effective unless assented to by the affirmative vote of a majority of
the outstanding voting securities of the Corporation (as such phrase is defined
in the Investment Company Act of 1940, as amended from time to time) entitled to
vote on the matter.
B. Each holder of shares of capital stock shall be entitled at his option,
exercisable as hereinafter provided, to require the Corporation to purchase all
or any part of the shares of its capital stock owned by such holder for an
amount equal to the proportionate interest in the net assets of the Corporation
represented by such shares determined as
hereinafter set forth, subject to and in accordance with the provisions of the
laws of Maryland, such regulations (not inconsistent with these Articles of
Incorporation) as the Board of Directors may adopt and the terms and
conditions set forth below. Notwithstanding the foregoing, the Corporation may
deduct from the proceeds otherwise due to any stockholder requiring the
Corporation to redeem shares a redemption charge not to exceed one percent (1%)
of such proportionate interest in such net assets or a reimbursement charge, a
deferred sales charge or other charge that is integral to the Corporation's
distribution program (which charges may vary within and among series and
classes) as may be established from time to time by the Board of Directors.
E. For the purposes referred to in these Articles of Incorporation, the net
asset value of shares of the capital stock of the Corporation of each series and
class as of any Determination Time shall be determined by or pursuant to the
direction of the Board of Directors as follows:
1. At times when a series is not classified into multiple classes, the net
asset value of each share of stock of a series, at any Determination Time shall
be the quotient, carried out to not less than two decimal points, obtained by
dividing the net value of the assets of the Corporation belonging to that series
(determined as hereinafter provided) as of such Determination Time by the total
number of shares of that series then outstanding, including all shares of that
series which the Corporation has agreed to sell for which the price has been
determined, and excluding shares of that series which the Corporation has agreed
to purchase or which are subject to redemption for which the price has been
determined.
The net value of the assets of the Corporation of a series as of any
Determination Time shall be determined in accordance with sound accounting
practice by deducting from the gross value of the assets of the Corporation
belonging to that series (determined as hereinafter
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<PAGE>
provided) the amount of all liabilities belonging to that series (as such terms
are defined in subparagraph 2 of paragraph B of Article V), in each case as of
such Determination Time.
The gross value of the assets of the Corporation belonging to a series as of
such Determination Time shall be an amount equal to all cash, receivables, the
market value of all securities for which market quotations are readily available
and the fair value of other assets of the Corporation belonging to that series
(as such terms are defined in subparagraph 1 of paragraph B of Article V) at
such Determination Time, all determined in accordance with sound accounting
practice and giving effect to the following:
2. At times when a series is classified into multiple classes, the net asset
value of each share of stock of a class of such series shall be determined in
accordance with subparagraphs 1 and 3 of this paragraph E with appropriate
adjustments to reflect differing allocations of liabilities and expenses of such
series between or among such classes to such extent as may be provided in or
determined pursuant to Articles Supplementary filed for record with the State
Department of Assessments and Taxation of Maryland or as may otherwise be
determined by the Board of Directors.
3 The Board of Directors is empowered, in its discretion, to establish other
methods for determining such net asset value whenever such other methods are
deemed by it to be necessary or desirable, including, but without limiting the
generality of the foregoing, any method based on actual market movements and any
method deemed necessary or desirable in order to enable the Corporation to
comply with any provision of the Investment Company Act of 1940 or any rule or
regulation thereunder.
F. The presence in person or by proxy of the holders of one-third of the
shares of capital stock of the Corporation issued and outstanding and entitled
to vote thereat shall constitute a quorum for the transaction at any business at
all meetings of the shareholders, except as otherwise provided by law or in
these Articles of Incorporation and except that where the holders of shares of
stock of any series or class are entitled to a separate vote as such series or
class (each such series or class, a "Separate Class") or where the holders of
shares of stock of two or more (but not all)
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<PAGE>
series or classes are required to vote as a single series or class (each such
single series or class, a "Combined Class"), the presence in person or by proxy
of the holders of one-third of the shares of stock of that Separate Class or
Combined Class, as the case may be, issued and outstanding and entitled to vote
thereat shall constitute a quorum for such vote. If, however, a quorum with
respect to all series, including all classes thereof, a Separate Class or a
Combined Class, as the case may be, shall not be present or represented at any
meeting of the shareholders, the holders of a majority of the shares of stock of
all series, such Separate Class or such Combined Class, as the case may be,
present in person or by proxy and entitled to vote shall have power to adjourn
the meeting from time to time as to all series, such Separate Class or such
Combined Class, as the case may be, without notice other than announcement at
the meeting, until the requisite number of shares of the capital stock of the
Corporation entitled to vote at such meeting shall be present. At such
adjourned meeting at which the requisite number of shares of the capital stock
of the Corporation entitled to vote thereat shall be represented any business
may be transacted which might have been transacted at the meeting as originally
notified. The absence from any meeting of stockholders of the number of shares
of capital stock of the Corporation in excess of one-third of the shares of
stock of all series or classes, or of the affected series or classes, as the
case may be, which may be required by the laws of the State of Maryland, the
Investment Company Act of 1940 or any other applicable law, or by these Articles
of Incorporation, for action upon any given matter shall not prevent action at
such meeting upon any other matter or matters which may properly come before the
meeting, if there shall be present thereat, in person or by proxy, holders of
the number of shares of stock of the Corporation required for action in respect
of such other matter or matters.
G. Any determination as to any of the following matters made by or pursuant
to the direction of the Board of Directors consistent with these Articles of
Incorporation and in the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of duties, shall be final and conclusive and
shall be binding upon the Corporation and every holder of shares of capital
stock of the Corporation, of any series or class, namely, the amount of the
assets, obligations, liabilities and expenses of the Corporation or belonging to
any series or with respect to any class; the amount of the net income of the
Corporation from dividends and interest for any period and the amount of assets
at any time legally available for the payment of dividends with respect to any
series or class; the amount of paid-in surplus, other surplus, annual or other
net profits, or net assets in excess of capital, undivided profits, or excess of
profits over losses on sales of securities belonging to the Corporation or any
series or class; the amount, purpose, time of creation, increase or decrease,
alteration or cancellation of any reserves or charges and the propriety thereof
(whether or not any obligation or liability for which such reserves or charges
shall have been created shall have been paid or discharged) with respect to the
Corporation or any series or class; the market value, or any sale, bid or asked
price to be applied in determining the market value, of any security owned or
held by the Corporation; the fair value of any other asset owned by the
Corporation; the number of shares of stock of any series or class issued or
issuable; the existence of conditions permitting the postponement of payment of
the repurchase price of shares of stock of any series or class or the
suspension of the right of redemption as provided by law; any matter relating to
the acquisition, holding and disposition of securities and other assets by the
Corporation; any question as to whether any transaction constitutes a purchase
of
8
<PAGE>
securities on margin, a short sale of securities, or an underwriting of the sale
of, or participation in any underwriting or selling group in connection with the
public distribution of, any securities; and any matter relating to the issue,
sale, repurchase and/or other acquisition or disposition of shares of stock of
any series or class.
H. The Corporation is adopting its corporate title through permission of
the firm of Lord, Abbett & Co.; and if it shall enter into a management or
advisory contract with such firm or a subsidiary or affiliate of such firm as
authorized herein, the Corporation shall make appropriate agreements that upon
the termination of such contract for any cause, or if such firm or subsidiary or
affiliate deems it advisable to withdraw the right to the use of its name, the
Corporation will, at the request of such firm or subsidiary or affiliate, take
such action as may be necessary to change its name to eliminate all use of or
reference to the words "Lord Abbett" in any form and will neither use or refer
to such words in any name or in any other manner, nor use the registered service
mark of Lord, Abbett & Co., without the written consent of such firm or
subsidiary or affiliate. The Corporation shall also agree in such contract that
investment companies other than the Corporation for which such firm or a
subsidiary may act as investment adviser, and other companies affiliated with
Lord, Abbett & Co., may be formed with the words "Lord Abbett" in their
corporate titles. Such agreements on the part of the Corporation are hereby
made binding upon it, its directors, officers, stockholders, creditors and all
other persons claiming under or through it.
9
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LORD ABBETT BOND-DEBENTURE FUND, INC.
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
Tel. No. (212) 848-1800
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and RONALD
P. LYNCH and each of them proxies, with full power of substitution, to vote
(according to the number of votes which the undersigned would be entitled to
cast if then personally present) at the annual meeting of shareholders of LORD
ABBETT BOND-DEBENTURE FUND, INC. (the "Fund") on June 19, 1996, including all
adjournments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-6.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1. Election of Directors: For [ ] Without Authority [ ] For All Except [ ]
(NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK THE
"FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME BELOW.)
Ronald P. Lynch, Robert S. Dow, E. Thayer Bigelow, Stewart S. Dixon, John
C. Jansing, C. Alan MacDonald, Hansel B. Millican, Jr. and Thomas J. Neff.
2. For [ ] Against [ ] Abstain [ ] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the fiscal
year ending December 31, 1996.
3. For [ ] Against [ ] Abstain [ ] To approve or disapprove the proposed
changes in the Fund's fundamental investment policies and restrictions, as
described in the proxy statement.
4. For [ ] Against [ ] Abstain [ ] To approve or disapprove the proposed new
Distribution Plan and Agreement for the Fund's existing class of shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
described in the proxy statement.
5. For [ ] Against [ ] Abstain [ ] To approve or disapprove an amendment to
the Fund's Articles of Incorporation (i) authorizing the Board of Directors
-
to create new classes and series of shares of capital stock; and (ii)
--
confirming that the board may impose contingent deferred sales charges in
connection with new classes of shares to be created, as described in the
proxy statement.
6. For [ ] Against [ ] Abstain [ ] To approve or disapprove an amendment
to the Fund's Articles of Incorporation reducing the
par value per share from $1.00 to $0.001 in order to reduce costs when
authorizing new shares (this change will have no effect on the value of your
shares).
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT BOND-DEBENTURE FUND, INC.
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE POSTAGE PAID RETURN ENVELOPE
PROVIDED.
For information as to the voting of stock registered in more than one name, see
page 1 of the proxy statement. When signing the proxy as attorney, executor,
administrator, trustee or guardian, please indicate the capacity in which you
are acting. Only author ized officers should sign for corporations.
Date:......................................................
Signature(s) of Shareholder(s) as shown at left
.............................................................
.............................................................
(Please read other side)
