SUPPLEMENT TO THE PROSPECTUS DATED MAY 1, 1997 OF THE LORD ABBETT BOND-DEBENTURE
FUND, INC.
Lord Abbett Bond-Debenture Fund, Inc. (the "Fund") currently consists of three
classes of shares which are designated Class A, B and C shares. The Fund's
prospectus contains disclosure with respect to these classes. A new class of
shares, the Pension Class ("Class P"), is offered by this supplement. Class P
shares are offered exclusively to certain pension or retirement plans discussed
below under "Purchases." This supplement should be read in conjunction with the
Fund's prospectus dated May 1, 1997.
FEE TABLE
A summary of the expenses of each Class is set forth in the table below. This
example should not be considered a representation of past or future expenses.
Actual expenses may be greater or less than those shown.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS P
SHARES SHARES SHARES SHARES
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
(AS A PERCENTAGE OF OFFERING PRICE)
Maximum Sales Load(2) on Purchases
(See "Purchases") 4.75% None None None
Deferred Sales Load(2) (See "Purchases")None 5% if shares are redeemed 1% if shares None
before 1st anniversary are redeemed
of purchase, declining before 1st anniversary
to 1% before 6th of purchase
anniversary and
eliminated on and
after 6th anniversary(3)
ANNUAL FUND OPERATING EXPENSES(4)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (See "Our Management") 0.46% 0.46% 0.46% 0.46%
12b-1 Fees (See "Purchases")(1)(2) 0.26% 1.00% 1.00% 0.45%
Other Expenses (See "Our Management") 0.18% 0.18% 0.18% 0.18%
Total Operating Expenses 0.90% 1.64% 1.64% 1.09%
EXAMPLE:Assume an annual return of 5% and there is no change in the level of
expenses described above. For a $1,000 investment, with reinvestment of
all distributions, you would have paid the following total expenses,
assuming redemption on the last day of each time period indicated:
1 year 3 years 5 years 10 years
Class A shares $56 $75 $95 $153
Class B shares(3) $66 $82 $109 $174
Class C shares $27 $52 $89 $194
Class P shares $11 $35 $60 $133
You would pay the following expenses on the same investment, assuming no
redemption:
Class A shares $56 $75 $95 $153
Class B shares(3) $17 $52 $89 $174
Class C shares $17 $52 $89 $194
Class P shares $11 $35 $60 $133
<FN>
(1)Although the Fund does not, with respect to the Class B, C and P shares,
charge a front-end sales charge, investors should be aware that long-term
shareholders may pay, under the Rule 12b-1 plans applicable to Class B, C and P
shares of the Fund (which pays annually 0.20%, for service, in the case of Class
P, and 0.25% for service, in the case of Class B and C and 0.25%, for
distribution, in the case of Class P, and 0.75% for distribution, in the case of
Class B and C), more than the economic equivalent of the maximum front-end sales
charge as permitted by certain rules of the National Association of Securities
Dealers, Inc.
(2)Sales "load" is referred to as sales "charge," "deferred sales load" is
referred to as "contingent deferred sales charge" ("CDSC") and "12b-1 fees"
which consist of a "service fee" and a "distribution fee," are referred to by
either or both of these terms where appropriate with respect to each Class of
shares throughout the Prospectus.
(3)Class B shares will automatically convert to Class A shares on the eighth
anniversary of their purchase.
(4)The annual operating expenses for Class A, B and C have been restated from
December 31, 1996 fiscal year amounts to reflect current fees. For Class P
shares, the annual operating expenses have been estimated bases on expenses
incurred by Class A, B and C shares because Class P shares were not available
for purchase prior to the Fund's current fiscal year.
The foregoing is provided to give investors a better understanding of the
expenses that are incurred by an investment in a Class of the Fund.
</FN>
</TABLE>
PURCHASES
CLASSES OF SHARES. The four different classes of shares offered in the Fund's
prospectus and supplement represent investments in the same portfolio of
securities but are subject to different expenses and will likely have different
share prices. Investors should carefully read this supplement, together with the
"Purchases" section of the current prospectus, to determine which class
represents the best investment option for their particular situation.
<PAGE>
BUYING CLASS P SHARES. Class P shares are currently sold at net asset value to
the trustees of, or employer-sponsors with respect to, pension or retirement
plans with at least 100 eligible employees (such as a plan under Section 401(a),
401(k) or 457(b) of the Internal Revenue Code) that engage an investment
professional providing, or participating in an agreement to provide, certain
recordkeeping, administrative and/or sub-transfer agency services to the Fund on
behalf of the Class P shareholders.
Purchases and redemption of Class P shares will be effected at net asset value
by trustees, custodians or employers on behalf of plan participants who will not
deal directly with the Fund.
CLASS P RULE 12B-1 PLAN. The Fund has adopted a Class P share Rule 12b-1 Plan
(the "P Plan") which authorizes the payment of fees to authorized institutions
(except as to certain accounts for which tracking data is not available) in
order to provide additional incentives for them (a) to provide continuing
information and investment services to their Class P shareholder accounts and
otherwise to encourage those accounts to remain invested in the Fund and (b) to
sell Class P shares of the Fund. Under the P Plan, in order to save on the
expense of shareholders' meetings and to provide flexibility to the Board of
Directors, the Board, including a majority of the outside directors who are not
"interested persons" of the Fund as defined in the Act, is authorized to approve
annual fee payments from Class P assets of up to 0.75 of 1% of the average net
asset value of such assets consisting of distribution and service fees, at
maximum annual rates not exceeding 0.50 and 0.25 of 1%, respectively (the "Fee
Ceiling").
The Board of Directors has approved payments from Class P assets to Lord Abbett
Distributor LLC ("Lord Abbett Distributor") which uses or passes on to
authorized institutions (1) an annual service fee (payable quarterly) of 0.20 of
1% of the average daily net asset value of Class P shares serviced by authorized
institutions and (2) a distribution fee of up to 0.25 of 1% of the average daily
net asset value of Class P shares sold by authorized institutions that have a
satisfactory program for the promotion of such shares. Institutions and persons
permitted by law to receive such fees are "authorized institutions."
Under the P Plan, Lord Abbett Distributor is permitted to use payments received
to provide continuing services to Class P 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 P shares. Any such payments
are subject to the Fee Ceiling. Any payments under the P Plan not used by Lord
Abbett Distributor in this manner are passed on to authorized institutions.
Authorized institutions may receive different compensation with respect to one
class of Fund shares over the other.
CLASS P EXPENSES
The Class P shareholders will bear the cost of the P Plan and share other
expenses and fees attributable and allocated to all classes of shares. These
shared expenses could include (a) management fees, (b) directors' fees, (c)
transfer and shareholder servicing agent fees and shareholder servicing costs,
(d) stationery, printing, postage and delivery expenses related to preparing and
distributing materials such as shareholder reports, prospectuses and proxy
statements to shareholders, (e) registration fees, (f) auditors' fees,
litigation expenses and legal fees and expenses, (g) expenses incurred in
connection with shareholders' meetings and (h) other expenses related to all
classes.
DISTRIBUTION OF CLASS P SHARES. Pursuant to a Distribution Agreement between
Lord Abbett Distributor and the Fund, Lord Abbett Distributor is the distributor
of Class P shares. Class P shares are purchased and redeemed at net asset value.
Lord Abbett Distributor reserves the right to suspend, change or withdraw the
offering of Class P shares or any of the terms of such offering.
SUPPLEMENT EFFECTIVE DATE: JANUARY 2, 1998
<PAGE>
SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION OF LORD ABBETT
BOND-DEBENTURE FUND, INC. DATED MAY 1, 1997.
PENSION CLASS RULE 12B-1 PLAN. As described in the Prospectus, the Fund has
adopted a Distribution Plan and Agreement pursuant to Rule 12b-1 of the Act for
the Pension Class (the "Pension Plan"). In adopting the Pension Plan and in
approving its continuance, the Board of Directors has concluded that there is a
reasonable likelihood that the Pension Plan will benefit the Class and its
shareholders. The expected benefits include greater sales and lower redemptions
of Class shares, which should allow the Class to maintain a consistent cash
flow, and a higher quality of service to shareholders by authorized institutions
than would otherwise be the case. The Pension Plan requires the directors to
review, on a quarterly basis, written reports of all amounts expended pursuant
to the Pension Plan and the purposes for which such expenditures were made. The
Pension Plan shall continue in effect only if its continuance is specifically
approved at least annually by vote of the directors, including 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 the Pension Plan or in any
agreements related to the Pension Plan ("outside directors"), cast in person at
a meeting called for the purpose of voting on the Plan. The Plan may not be
amended to increase materially above the limits set forth therein the amount
spent for distribution expenses thereunder without approval by a majority of the
outstanding voting securities of the applicable class and the approval of a
majority of the directors, including a majority of the outside directors. The
Pension Plan may be terminated at any time by vote of a majority of the outside
directors or by vote of a majority of its Class's outstanding voting securities.
SUPPLEMENT EFFECTIVE DATE: JANUARY 2, 1998
