Lord Abbett
Mid-Cap Value Fund
Prospectus
May 1, 1999
(As Revised August 1, 1999)
[LOGO]
As with all mutual funds, the Securities and Exchange Commission does not
guarantee that the information in this prospectus is accurate or complete, and
it has not judged this fund for its investment merit. It is a criminal offense
to state otherwise.
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Table of Contents
The Fund Page
What you should know Goal/Strategy 2
about the fund Main Risks 2
Past Performance 3
Fees and Expenses 4
Your Investment
Information for managing Purchases 5
your fund account Opening Your Account 7
Redemptions 8
Distributions and Taxes 8
Services For Fund Investors 9
Sales Charges and Service Fees 10
Management 10
For More Information
How to learn more Other Investment Techniques 11
about the fund Glossary of Shaded Terms 11
Recent Performance 13
Financial Information
Financial Highlights 14
Compensation For Your Dealer 16
How to learn more about the Back Cover
fund and other Lord Abbett funds
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The Fund
GOAL/STRATEGY
The fund seeks capital appreciation through investments, primarily in
equity securities, which are believed to be undervalued in the marketplace.
Normally, at least 65% of our total assets will consist of investments in
mid-sized companies, with market capitalizations of roughly $500 million to
$5 billion. Generally, the fund, using a value approach, tries to identify
bargain stocks of companies that have the potential for significant market
appreciation, due to growing recognition of improvement in their financial
results, or increasing anticipation of such improvement. In trying to
identify those companies, we look for such factors as:
changes in economic and financial environment
new or improved products or services
new or rapidly expanding markets
changes in management or structure of the company
price increases for the company's products or services
improved efficiencies resulting from new technologies or changes in
distribution
changes in government regulations, political climate or competitive
conditions
While typically fully invested, we may take a temporary defensive position
in cash and short-term debt securities. This could prevent the fund from
realizing its investment objective.
MAIN RISKS
While stocks have historically been a leading choice of long-term
investors, they fluctuate in price. The value of your investment in the
fund will go up and down.
The fund's performance may sometimes be lower or higher than that of other
types of funds (such as those emphasizing small-company stocks or growth
stocks), or other funds of the same type. Different types of stocks tend to
shift in and out of favor depending on market and economic conditions.
There is the risk that an investment may never reach what we think is its
full value, or may go down in value, but our value approach might limit our
downside risk because value stocks in theory are already underpriced.
An investment in the fund is not a bank deposit. It is not FDIC insured or
governmentendorsed. It is not a complete investment program. You could lose
money in this fund.
We or the fund refers to Lord Abbett Mid-Cap Value Fund, Inc. (the "company"),
which operates under the supervision of its Board with the advice of Lord,
Abbett & Co. (" Lord Abbett"), its investment manager.
About the fund. The fund is a professionally managed portfolio primarily holding
securities purchased with the pooled money of investors. It strives to reach its
stated goal, although as with all mutual funds, it cannot guarantee results.
Bargain stocks are stocks of companies that appear under priced according to
certain financial measurements of their intrinsic worth or business prospects.
Growth stocks exhibit faster-thanaverage gains in earnings and are expected to
continue profit growth at a high level, but also tend to be more volatile than
bargain stocks.
You should read this entire prospectus, including "Other Investment Techniques,"
which concisely describes the other investment strategies, and their risks, used
by the fund.
2 The Fund
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Mid-Cap Value Fund Symbols: Class A -LAVLX
Class B -LMCBX
Class C -LMCCX
PAST PERFORMANCE
The information below provides some indication of the risks of investing in
the fund, by showing changes in the fund's class A shares' performance from
calendar year to calendar year and by showing how the fund's average annual
returns compare with those of a broad measure of market performance. Past
performance is not a prediction of future results.
[GRAPHIC OMMITTED]
Best Quarter: 2nd Q '97 13.81%
Worst Quarter: 3rd Q '98 (17.30)%
The table below shows a comparison of the fund's class A, B, C and P average
annual total returns to that of the Russell Mid-Cap Index (" RMC Index"). Fund
returns assume reinvestment of dividends and distributions and payment of the
maximum applicable front-end or deferred sales charges. All periods end on
December 31, 1998.
Class 1 Year 5 Years 10 Years Since Inception (i) RMC Index (ii)
A (6.20)% 12.80% 13.16% 12.32% 14.94% (iii)
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B (1.20)% - - 14.86% 18.07% (iv)
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C (1.28)% - - 14.81% 18.07% (v)
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P (0.97)% - - (1.00)% 12.10% (vi)
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RMC Index (ii) 10.09% 17.35% 16.69% - -
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(i) The date of inception for each class is: A -6/28/83; B and C -5/1/97; and P
-1/1/98.
(ii) Performance for the unmanaged RMC Index does not reflect transaction costs
or management fees.
(iii) This represents total returns for the period 6/30/83 to 12/31/98, to
correspond with class A inception date.
(iv) This represents total returns for the period 5/31/97 to 12/31/98, to
correspond with class B inception date.
(v) This represents total returns for the period 5/31/97 to 12/31/98, to
correspond with class C inception date.
(vi) This represents total returns for the period 11/30/97 to 12/31/98, to
correspond with class P inception date.
The Fund 3
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Mid-Cap Value Fund Symbols: Class A -LAVLX
Class B -LMCBX
Class C -LMCCX
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
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Fee table
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Class A Class B Class C Class P
Shareholder Fees (Fees paid directly from your investment)
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Maximum Sales Charge on Purchases
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(as a % of offering price) 5.75% none none none
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Maximum Deferred Sales Charge
(See "Purchases") none 5.00% (3) 1.00% none
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Annual Fund Operating Expenses (Expenses deducted from fund assets)
(as a % of average net assets) (1)
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Management Fees 0.70% 0.70% 0.70% 0.70%
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Distribution and Service (12b-1) Fees(2) 0.35% 1.00% 1.00% 0.45%
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Other Expenses 0.22% 0.22% 0.22% 0.22%
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Total Operating Expenses 1.27% 1.92% 1.92% 1.37%
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Expense example
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This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment at maximum sales charge, if any, 5% total return each year and no
changes in expenses. You pay the following expenses over the course of each
period shown if you sell your shares at the end of the period, although your
actual cost may be higher or lower. The expenses include any applicable
contingent deferred sales charges.
Share class 1 Year 3 Years 5 Years 10 Years
Class A shares $697 $954 $1,232 $2,023
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Class B shares $695 $903 $1,236 $2,076
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Class C shares $295 $603 $1,036 $2,245
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Class P shares $139 $434 $ 750 $1,649
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You would pay the following expenses on the same investment,
assuming you kept your shares.
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Class A shares $697 $954 $1,232 $2,023
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Class B shares $195 $603 $1,036 $2,076
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Class C shares $195 $603 $1,036 $2,245
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Class P shares $139 $434 $ 750 $1,649
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This example is for comparison and is not a representation of the fund's actual
expenses or returns, either past or present.
Management fees are payable to Lord Abbett for the fund's investment management.
12b-1 fees refer to fees incurred for activities that are primarily intended to
result in the sale of fund shares and service fees for shareholder account
service and maintenance.
Other expenses include fees paid for miscellaneous items such as shareholder
services and professional fees.
(1) The annual operating expenses have been restated from fiscal year amounts
to reflect current fees.
(2) Because 12b-1 distribution fees are paid out on an ongoing basis, over time
they will increase the cost of your investment and may cost you more than
paying other types of sales charges.
(3) Class B shares will convert to class A shares on the eighth anniversary of
your original purchase of class B shares.
4 The Fund
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Your Investment
PURCHASES
This prospectus offers four classes of shares: classes A, B, C and P. These
different classes of shares represent investments in the same portfolio of
securities but are subject to different expenses. Our shares are
continuously offered. The offering price is based on the Net Asset Value
("NAV") per share next determined after we receive your purchase order
submitted in proper form. A front-end sales charge is added to the NAV, in
the case of the class A shares. There is no front-end sales charge,
although there is a CDSC in the case of the class B and C shares, as
described below.
You should read this section carefully to determine which class of shares
represents the best investment option for your particular situation. It may
not be suitable for you to place a purchase order for class B shares of
$500,000 or more, or a purchase order for class C shares of $1,000,000 or
more. You should discuss pricing options with your investment professional.
For more information, see "Alternative Sales Arrangements" in the Statement
of Additional Information.
We reserve the right to withdraw all or any part of the offering made by
this prospectus or to reject any purchase order. We also reserve the right
to waive or change minimum investment requirements. All purchase orders are
subject to our acceptance and are not binding until confirmed or accepted
in writing.
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Front-End Sales Charges -Class A Shares
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To Compute
As a % of As a % of Offering Price
Your Investment Offering Price Your Investment Divide NAV by
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Less than $50,000 5.75% 6.10% .9425
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$50,000 to $99,999 4.75% 4.99% .9525
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$100,000 to $249,999 3.95% 4.11% .9605
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$250,000 to $499,999 2.75% 2.83% .9725
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$500,000 to $999,999 1.95% 1.99% .9805
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$1,000,000 and over No Sales Charge 1.0000
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Reducing Your Class A Front-End Sales Charges. Class A shares may be
purchased at a discount if you qualify under either of the following
conditions:
Rights of Accumulation - A Purchaser can apply the value (at public
offering price) of the shares already owned to a new purchase of class
A shares of any Eligible Fund in order to reduce the sales charge.
Statement of Intention - A Purchaser of class A shares can purchase
additional shares of any Eligible Fund over a 13-month period and
receive the same sales charge as if all shares were purchased at once.
Shares purchased through reinvestment of dividends or distributions
are not included. A statement of intention can be backdated 90 days.
Current holdings under rights of accumulation can be included in a
statement of intention.
For more information on eligibility for these privileges, read the applicable
sections in the attached application.
NAV per share for each class of fund shares is calculated each business day at
the close of regular trading on the New York Stock Exchange (" NYSE"). The fund
is open on those business days when the NYSE is open. Purchases and sales of
fund shares are executed at the NAV next determined after the fund receives your
order. In calculating NAV, securities for which market quotations are available
are valued at those quotations. Securities for which such quotations are not
available are valued at fair value under procedures approved by the Board.
Share classes
Class A
normally offered with a frontend sales charge
Class B
no front-end sales charge, however, a contingent deferred sales charge is
applied to shares sold prior to the sixth anniversary of purchase
higher annual expenses than class A shares
automatically convert to class A shares after eight years
Class C
no front-end sales charge
higher annual expenses than class A shares
a contingent deferred sales charge is applied to shares sold prior to the
first anniversary of purchase
Class P
available to certain pension or retirement plans and pursuant to a Mutual
Fund Advisory Program
Your Investment 5
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Class A Share Purchases Without A Front-End Sales Charge. Class A shares may be
purchased without a front-end sales charge under any of the following
conditions:
purchases of $1 million or more+
purchases by Retirement Plans with at least 100 eligible employees+
purchases under a Special Retirement Wrap Program+
purchases made with dividends and distributions on class A shares of
another Eligible Fund
purchases representing repayment under the loan feature of the Lord
Abbettsponsored prototype 403(b) Plan for class A shares
purchases by employees of any consenting securities dealer having a sales
agreement with Lord Abbett Distributor
purchases under a Mutual Fund Advisory Program
purchases by trustees or custodians of any pension or profit sharing plan,
or payroll deduction IRA for employees of any consenting securities dealer
having a sales agreement with Lord Abbett Distributor
See the Statement of Additional Information for a listing of other categories of
purchasers who qualify for class A share purchases without a front-end sales
charge.
+These categories may be subject to a Contingent Deferred Sales Charge ("CDSC").
Class A Share CDSC. If you buy class A shares under one of the starred (+)
categories listed above and you redeem any of them within 24 months after the
month in which you initially purchased them, the fund normally will collect a
CDSC of 1%.
The class A share CDSC generally will be waived for the following
conditions:
benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
distribution under Retirement Plans (documentation may be required)
redemptions continuing as investments in another fund participating in a
Special Retirement Wrap Program
Class B Share CDSC. The CDSC for class B shares normally applies if you
redeem your shares before the sixth anniversary of their initial purchase.
The CDSC declines the longer you own your shares, according to the
following schedule:
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Contingent Deferred Sales Charges -Class B Shares
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Anniversary (1) of Contingent Deferred Sales Charge
the day on which the on redemption (as % of amount
purchase order was accepted subject to charge)
On Before
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1st 5.0%
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1st 2nd 4.0%
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2nd 3rd 3.0%
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3rd 4th 3.0%
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4th 5th 2.0%
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5th 6th 1.0%
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on or after the 6th (2) None
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(1) The anniversary is the same calendar day in each respective year after the
date of purchase. For example, the anniversaries for shares purchased on
May 1 will be May 1 of each succeeding year.
(2) Class B shares will automatically convert to class A shares on the eighth
anniversary of the purchase of class B shares.
CDSC, regardless of class, is not charged on shares acquired through
reinvestment of dividends or capital gains distributions and is charged on the
original purchase cost or the current market value of the shares at the time
they are being sold, whichever is lower. In addition, repayment of loans under
Retirement Plans and 403(b) Plans will constitute new sales for purposes of
assessing the CDSC.
To minimize the amount of any CDSC, the fund redeems shares in the following
order:
1. shares acquired by reinvestment of dividends and capital gains (always free
of a CDSC)
2. shares held for six years or more (class B) or two years or more after the
month of purchase (class A) or one year or more (class C)
3. shares held the longest before the sixth anniversary of their purchase
(class B) or before the second anniversary after the month of purchase
(class A) or before the first anniversary of their purchase (class C)
Retirement Plans include employersponsored retirement plans under the Internal
Revenue Code, excluding Individual Retirement Accounts.
Lord Abbett Distributor LLC (" Lord Abbett Distributor") acts as agent for the
funds to work with investment professionals that buy and/or sell shares of the
funds on behalf of their clients. Generally, Lord Abbett Distributor does not
sell fund shares directly to investors.
Benefit Payment Documentation (class A only)
under $50,000 -no documentation necessary
over $50,000 -reason for benefit payment must be received in writing. Use
the address indicated under "Opening Your Account."
6 Your Investment
<PAGE>
The class B share CDSC generally will be waived under any one of the following
conditions:
benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
contribution or distribution under Retirement Plans
Eligible Mandatory Distributions under 403(b) Plans and individual
retirement accounts
death of the shareholder (natural person)
redemptions of shares in connection with Div-Move and Systematic Withdrawal
Plans (up to 12% per year)
See "Systematic Withdrawal Plan" under "Services For Fund Investors - Automatic
Services" below for more information on CDSCs with respect to class B shares.
Class C Share CDSC. The 1% CDSC for class C shares normally applies if you
redeem your shares before the anniversary of the purchase of such shares.
Class P Shares. Class P shares have lower annual expenses than class B and class
C shares, no front-end sales charge, and no CDSC. Class P shares are currently
sold and redeemed at NAV (a) pursuant to a Mutual Fund Advisory Program, or (b)
to the trustees of, or employer-sponsors with respect to, pension or retirement
plans with at least 100 eligible employees (such as a plan under Section 401(a),
401(k) or 457(b) of the Internal Revenue Code) which engage an investment
professional providing, or participating in an agreement to provide, certain
recordkeeping, administrative and/or sub-transfer agency services to the fund on
behalf of the class P shareholders.
Important information. You may be subject to a $50 penalty under the Internal
Revenue Code if you do not provide a correct taxpayer identification number
(Social Security Number for individuals) or make certain required
certifications. In addition, we may be required to withhold from your account
and pay to the U. S. Treasury 31% of any redemption proceeds and of any dividend
or distribution from your account.
Small Accounts. Our Board may authorize closing any account in which there are
fewer than 25 shares if it is in a fund's best interest to do so.
OPENING YOUR ACCOUNT
MINIMUM INITIAL INVESTMENT
Regular account $1,000
Individual Retirement Accounts and 403(b) Plans under the Internal
Revenue Code $250
Uniform Gifts to Minors Account $250
For Retirement Plans and Mutual Fund Advisory Programs, no minimum
investment is required, regardless of share class.
You may purchase shares through any independent securities dealer who has a
sales agreement with Lord Abbett Distributor or you can fill out the
attached application and send it to the fund at the address stated below.
You should carefully read the paragraph below entitled "Proper Form" before
placing your order to assure your order will be accepted.
Mid-Cap Value Fund
P. O. Box 419100
Kansas City, MO 64141
Proper Form. An order submitted directly to the fund must contain: (1) a
completed application, and (2) payment by check. When purchases are made by
check, redemptions will not be allowed until the fund or the transfer agent
is advised that the check has cleared, which may take up to 15 calendar
days. For more information regarding proper form of a purchase order, call
the fund at 800-821-5129.
By Exchange. Telephone the fund at 800-821-5129 to request an exchange from
any eligible Lord Abbett-sponsored fund.
Your Investment 7
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REDEMPTIONS
By Broker. Call your investment professional for directions on how to
redeem your shares.
By Telephone. To obtain the proceeds of a redemption of $50,000 or less
from your account, you or your representative can call the fund at
800-821-5129.
By Mail. Submit a written redemption request indicating the name(s) in
which the account is registered, the fund's name, the class of shares, your
account number, and the dollar value or number of shares you wish to sell.
Include all necessary signatures. If the signer has any Legal Capacity, the
signature and the capacity must be guaranteed by an Eligible Guarantor.
Certain other legal documentation may be required. For more information
regarding proper documentation, call 800-821-5129.
Normally, a check will be mailed to the name and address in which the
account is registered (or otherwise, according to your instruction) within
three business days after receipt of your redemption request. Your account
balance must be sufficient to cover the amount being redeemed or your
redemption order will not be processed. Under unusual circumstances, the
fund may suspend redemptions, or postpone payment for more that seven days,
as permitted by federal securities laws. To determine if a CDSC applies to
a redemption, see "Class A share CDSC,"" Class B share CDSC," or "Class C
share CDSC."
Eligible Guarantor is any broker or bank that is a member of the Medallion Stamp
Program. Most major securities firms and banks are members of this program. A
notary public is not an eligible guarantor.
DISTRIBUTIONS AND TAXES
The fund pays its shareholders dividends from its net investment income,
and distributes net capital gains that it has realized. Dividends from net
investment income are expected to be paid to shareholders annually. If a
capital gains distribution is declared, it is expected to be paid annually.
A supplemental distribution may also be paid to comply with the Internal
Revenue Code. Your distributions will be reinvested in the fund unless you
instruct the fund to pay them to you in cash. There are no sales charges on
reinvestments.
The tax status of distributions are the same for all shareholders
regardless of how long they have been in the fund and whether distributions
are reinvested or paid in cash. In general, distributions are taxable as
follows:
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Federal Taxability Of Distributions
Type of Tax rate for Tax rate for 28%
distribution 15% bracket bracket and above
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Income Ordinary Ordinary
dividends Income Rate Income Rate
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Short-term Ordinary Ordinary
capital gains Income Rate Income Rate
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Long-term
capital gains 10% 20%
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Except in tax-advantaged accounts, any sale or exchange of fund shares may
be a taxable event.
Annual Information - Information concerning the tax treatment of dividends
and other distributions will be mailed to shareholders each year. The fund
will also provide annually to its shareholders information regarding the
source of dividends and distributions of capital gains paid by the fund.
Because everyone's tax situation is unique, you should consult your tax
adviser regarding the treatment of those distributions under the federal,
state and local tax rules that apply to you, as well as the tax
consequences of gains or losses from the redemption or exchange of your
shares.
Taxes on Transactions. The chart at left also can provide a "rule of thumb"
guide for your potential U. S. federal income tax liability when selling or
exchanging fund shares. The second row, "Short-term capital gains," applies to
fund shares sold within 12 months of purchase. The third row, "Long-term capital
gains," applies to shares held for more than 12 months.
Starting January 1, 2001, sales of securities held for more than five years will
be taxed at special lower rates.
8 Your Investment
<PAGE>
SERVICES FOR FUND INVESTORS
AUTOMATIC SERVICES
Buying or selling shares automatically is easy with the services described
below. With each service, you select a schedule and amount, subject to
certain restrictions. You can set up most of these services when filling
out your application or by calling 800-821-5129.
<TABLE>
<CAPTION>
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For investing
<S> <C>
Invest-A-Matic You can make fixed, periodic investments ($ 50 minimum) into your fund
(Dollar-cost account by means of automatic money transfers from your bank checking
averaging) account. See the attached application for instructions.
Div-Move You can automatically reinvest the dividends and distributions from your
account into another account in any Eligible Fund ($ 50 minimum).
For selling shares
Systematic You can make regular withdrawals from most Lord Abbett funds. Automatic
Withdrawal cash withdrawals can be paid to you from your account in fixed or variable
Plan (" SWP") amounts. To establish a plan, the value of your shares must be at least
$10,000, except for Retirement Plans for which there is no minimum. Your
shares must be in non-certificate form.
Class B shares The CDSC will be waived on SWP redemptions of up to 12% of the current net
asset value of your account at the time of your SWP request. For class B share
SWP redemptions over 12% per year, the CDSC will apply to the entire redemption.
Please contact the fund for assistance in minimizing the CDSC in this situation.
Class B and Redemption proceeds due to a SWP for class B and class C shares will be
C shares redeemed in the order described under "Purchases."
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</TABLE>
OTHER SERVICES
Telephone Investing . After we have received the attached application
(selecting "yes" under Section 7C and completing Section 7), you can
instruct us by phone to have money transferred from your bank account to
purchase shares of the fund for an existing account. The fund will purchase
the requested shares when it receives the money from your bank.
Exchanges. You or your investment professional can instruct your fund to
exchange shares of any class for shares of the same class of any Eligible
Fund. Instruction may be provided in writing or by telephone, with proper
identification, by calling 800-821-5129. The fund must receive instructions
for the exchange before the close of the NYSE on the day of your call. If
you meet this requirement, you will get the NAV per share of the Eligible
Fund determined on that day. Exchanges will be treated as a sale for
federal tax purposes. Be sure to read the current prospectus for any fund
into which you are exchanging.
Reinvestment Privilege. If you sell shares of the fund, you have a one time
right to reinvest some or all of the proceeds in the same class of any
Eligible Fund within 60 days without a sales charge. If you paid a CDSC
when you sold your shares, you will be credited with the amount of the
CDSC. All accounts involved must have the same registration.
Account Statements. Every Lord Abbett investor automatically receives
quarterly account statements.
Householding. Shareholders with the same last name and address will receive
a single copy of a prospectus and an annual or semi-annual report, unless
additional reports are specifically requested in writing to the fund.
Account Changes. For any changes you need to make to your account, consult
your investment professional or call the fund at 800-821-5129.
Systematic Exchange. You or your investment professional can establish a
schedule of exchanges between the same classes of any Eligible Fund.
Lord Abbett offers a variety
of Retirement Plans.
Call 800-253-7299 for
information about:
Traditional, Rollover, Roth and Education IRAs
Simple IRAs, SEP-IRAs, 401(k) and 403(b) accounts
Defined Contribution Plans
Telephone Transactions. You have this privilege unless you refuse it in writing.
For your security, telephone transaction requests are recorded. We will take
measures to verify the identity of the caller, such as asking for your name,
account number, social security or taxpayer identification number and other
relevant information. The fund will not be liable for following instructions
communicated by telephone that it reasonably believes to be genuine.
Transactions by telephone may be difficult to implement in times of drastic
economic or market change.
Exchange Limitations. Exchanges should not be used to try to take advantage of
short-term swings in the market. Frequent exchanges create higher expenses for
the fund. Accordingly, the fund reserves the right to limit or terminate this
privilege for any shareholder making frequent exchanges or abusing the
privilege. The fund also may revoke the privilege for all shareholders upon 60
days' written notice.
Your Investment 9
<PAGE>
SALES CHARGES AND SERVICE FEES
Sales and Service Compensation. As part of its plan for distributing
shares, each fund and Lord Abbett Distributor pay sales and service
compensation to Authorized Institutions that sell the fund's shares and
service its shareholder accounts.
Sales compensation originates from two sources: sales charges and 12b-1
distribution fees that are paid out of each fund's assets. Service
compensation originates from 12b-1 service fees. The 12b-1 fee rates vary
by share class, according to the Rule 12b-1 plan adopted by each fund. The
sales charges and 12b-1 fees paid by investors are shown in the
class-by-class information under "Expenses" and "Purchases." The portion of
these expenses that is paid as sales and service compensation to Authorized
Institutions, such as your dealer, is shown in the chart at the end of this
prospectus. The portion of such sales and service compensation paid to Lord
Abbett Distributor is discussed under "Sales Activities" and "Service
Activities." Sometimes we do not pay sales and service compensation where
tracking data is not available for certain accounts or where the Authorized
Institution waives part of the compensation.
We may pay Additional Concessions to Authorized Institutions from time
to time.
Sales Activities. We may use 12b-1 distribution fees to pay Authori zed
Inst itut ions to finance any activity which is primarily intended to
result in the sale of shares. Lord Abbett Distributor uses its portion of
the distribution fees attributable to a fund's class A and class C shares
for activities which are primarily intended to result in the sale of such
class A and class C shares, respectively. These activities include, but are
not limited to, printing of prospectuses and statements of additional
information and reports for other than existing shareholders, preparation
and distribution of advertising and sales material, expenses of organizing
and conducting sales seminars, Additional Concessions to Authori zed
Institutions, the cost necessary to provide distribution-related services
or personnel, travel, office expenses, equipment and other allocable
overhead.
Service Activities. We may pay Rule 12b-1 service fees to Authorized
Institutions for any activity which is primarily intended to result in
personal service and/or the maintenance of shareholder accounts. Any
portion of the service fees paid to Lord Abbett Distributor will be used to
service and maintain shareholder accounts.
12b-1 fees are payable regardless of expenses. The amounts payable by a fund
need not be directly related to expenses. If Lord Abbett Distributor's actual
expenses exceed the fee payable to it, a fund will not have to pay more than
that fee. If Lord Abbett Distributor's expenses are less than the fee it
receives, Lord Abbett Distributor will keep the full amount of the fee.
MANAGEMENT
The fund's investment adviser is Lord, Abbett & Co., 767 Fifth Avenue, New
York, NY 10153-0203. Founded in 1929, Lord Abbett manages one of the
nation's oldest mutual fund complexes, with over $30 billion in more than
35 mutual fund portfolios and other advisory accounts. For more information
about the services Lord Abbett provides to the fund, see the Statement of
Additional Information.
The fund pays Lord Abbett a monthly fee based on average daily net assets
for each month. For the fiscal year ended December 31, 1998, the fee paid
to Lord Abbett was at an annual rate of 0.70 of 1%. In addition, the fund
pays all expenses not expressly assumed by Lord Abbett.
Lord Abbett uses a team of portfolio managers and analysts acting together
to manage the fund's investments. Edward K. von der Linde, Portfolio
Manager, heads the team, the other senior members of which are Eileen
Banko, Howard Hansen, and David Builder. Both Mr. von der Linde and Ms.
Banko have been with Lord Abbett for more than five years. Mr. Hansen
joined Lord Abbett in 1995; prior to that he was an analyst at Alfred Berg
Inc. from 1990-1995. Mr. Builder joined Lord Abbett in 1998; prior to that
he was an analyst at Bear Stearns from 1996-1998 and at Weiss Peck & Greer
from 1994-1995.
10 Your Investment
<PAGE>
For More Information
OTHER INVESTMENT TECHNIQUES
Foreign Securities. The fund may invest in foreign securities. These
securities are not subject to the same degree of regulation and may be more
volatile and less liquid than securities traded in major U. S. markets.
Foreign portfolio securities may trade on days when a fund does not value
them. Fund share prices could be affected on days an investor cannot
purchase or sell shares. Other risks include: less information on public
companies, banks, and governments; political and social instability;
expropriations; higher transaction costs; currency fluctuations;
non-deductable withholding taxes and different accounting and settlement
practices. The fund may invest up to 10% of its assets at the time of
investment in foreign securities.
Illiquid Securities. The fund may invest in illiquid securities which are
not traded on the open market. This may included Rule 144A securities.
Certain securities may be difficult or impossible to sell at the time and
price the seller would like. The fund may invest up to 15% of its assets in
illiquid securities. Securities determined by the Board to be liquid are
not subject to this limitation, such as those purchased under Securities
and Exchange Commission Rule 144A.
Portfolio Securities Lending. The fund may lend securities to
broker-dealers and financial institutions, as a means of earning income.
This practice could result in a loss or delay in recovering a fund's
securities, if the borrower defaults. The fund's loans may not exceed 30%
of the fund's total assets.
GLOSSARY OF SHADED TERMS
Additional Concessions. Lord Abbett Distributor may, for specified periods,
allow dealers to retain the full sales charge for sales of shares or may
pay an additional concession to a dealer who sells a minimum dollar amount
of our shares and/or shares of other Lord Abbett-sponsored funds. In some
instances, such additional concessions will be offered only to certain
dealers expected to sell significant amounts of shares. Additional payments
may be paid from Lord Abbett Distributor's own resources or from
distribution fees received from the fund and will be made in the form of
cash or, if permitted, noncash payments. The non-cash payments will include
business seminars at Lord Abbett's headquarters or other locations,
including meals and entertainment, or the receipt of merchandise. The cash
payments may include payment of various business expenses of the dealer.
In selecting dealers to execute portfolio transactions for the fund's
portfolio, if two or more dealers are considered capable of obtaining best
execution, we may prefer the dealer who has sold our shares and/or shares
of other Lord Abbett-sponsored funds.
Authorized Institutions. Institutions and persons permitted by law to
receive service and/or distribution fees under a Rule 12b-1 plan are
"Authorized Institutions." Lord Abbett Distributor is an Authorized
Institution.
Eligible Fund. An Eligible Fund is any Lord Abbett-sponsored fund except
for: (1) certain tax-free, single-state funds where the exchanging
shareholder is a resident of a state in which such series is not offered
for sale; (2) Lord Abbett Equity Fund; (3) Lord
For More Information 11
<PAGE>
Abbett Series Fund; and (4) Lord Abbett U. S. Government Securities Money
Market Fund (" GSMMF") (except for holdings in GSMMF which are attributable
to any shares exchanged from the Lord Abbett family of funds). An Eligible
Fund also is any Authorized Institution's affiliated money market fund
satisfying Lord Abbett Distributor as to certain omnibus accounts and other
criteria.
Eligible Mandatory Distributions. If class B shares represent a part of an
individual's total IRA or 403(b) investment, the CDSC will be waived only
for that part of a mandatory distribution which bears the same relation to
the entire mandatory distribution as the B share investment bears to the
total investment.
Legal Capacity. This term refers to the authority of an individual to act
on behalf of an entity or other person(s). For example, if a redemption
request were to be made on behalf of the estate of a deceased shareholder,
John W. Doe, by a person (Robert A. Doe) who has the legal capacity to act
for the estate of the deceased shareholder because he is the executor of
the estate, then the request must be executed as follows: Robert A. Doe,
Executor of the Estate of John W. Doe. That signature using that capacity
must be guaranteed by an Eligible Guarantor.
To give another example, if a redemption request were to be made on behalf
of the ABC Corporation by a person (Mary B. Doe) who has the legal capacity
to act on the behalf of the Corporation, because she is the president of
the Corporation, the request must be executed as follows: ABC Corporation
by Mary B. Doe, President. That signature using that capacity must be
guaranteed by an Eligible Guarantor (see example in right column).
Mutual Fund Advisory Program. This includes certain unaffiliated authorized
brokers, dealers, registered investment advisers or other financial
institutions who either (a) have an arrangement with Lord Abbett
Distributor in accordance with certain standards approved by Lord Abbett
Distributor, providing specifically for the use of fund shares (and
sometimes providing for acceptance of orders for such shares on our behalf)
in particular investment products made available for a fee to clients of
such brokers, dealers, registered investment advisers and other financial
institutions, or (b) charge an advisory consulting or other fee for their
services and buy shares for their own accounts or the accounts of their
clients.
Purchaser. The term "purchaser" includes: (i) an individual, (ii) an
individual and his or her spouse and children under the age of 21 and (iii)
a trustee or other fiduciary purchasing shares for a single trust estate or
single fiduciary account (including a pension, profit-sharing, or other
employee benefit trust qualified under Section 401 of the Internal Revenue
Code - more than one qualified employee benefit trust of a single employer,
including its consolidated subsidiaries, may be considered a single trust,
as may qualified plans of multiple employers registered in the name of a
single bank trustee as one account), although more than one beneficiary is
involved.
Special Retirement Wrap Program. A program sponsored by an authorized
institution showing one or more characteristics distinguishing it, in the
opinion of Lord Abbett Distributor from a Mutual Fund Advisory Program.
Such characteristics include, among other things, the fact that an
Authorized Institution does not charge its clients any fee of a consulting
or advisory nature that is economically equivalent to the distribution fee
under the class A 12b-1 Plan and the fact that the program relates to
participant-directed Retirement Plans.
GUARANTEED SIGNATURE. An acceptable form of guarantee would be as follows:
In the case of the estate --
Robert A. Doe
Executor of the Estate of
John W. Doe
[Date]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
[SIGNATURE ILLEGIBLE]
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'sm'
SR
In the case of the corporation --
ABC Corporation
Mary B. Doe
By Mary B. Doe, President
[Date]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
[SIGNATURE ILLEGIBLE]
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'sm'
SR
12 For More Information
<PAGE>
RECENT PERFORMANCE
January through December 1998 was as difficult a period as we can remember
for value investing in the mid-cap universe. High volatility and a strong
performance bias toward larger-capitalization and high-expectation growth
stocks characterized the year. While the fund performed well during the
first half, the second half of 1998 was a different story: the financial
panic of the third quarter hit mid-and small-cap value companies harder
than the rest of the market. Investors seeking to raise cash aggressively
sold the shares of mid-sized and smaller companies across all industry
groups regardless of the fundamental outlook.
What was most surprising during 1998 was the speculative frenzy born out of
the panic. Whipsawed investors have raced back into the stocks of companies
perceived to have the highest (if yet distant and vaguely defined) growth
opportunities such as Yahoo, Ebay and other internet stocks. While many of
our portfolio holdings snapped back during the fourth quarter, performance
in the mid-cap segment of the market was heavily concentrated in technology
companies whose valuations and market action we do not find attractive from
a risk/reward standpoint. It is currently a sector where we are not willing
to risk investors' hard-earned capital. While we are disappointed with our
short-term performance, we recognize that the market goes through these
phases and that we are best served by sticking to what we do best. We will
remain focused on finding companies that we believe offer the best mix of
attractive valuation and improving fundamentals in the mid-capitalization
sector.
Year 2000 issues. Each fund could be adversely affected if the computers used by
each fund and their service providers do not properly process and calculate
date-related information from and after January 1, 2000.
Lord Abbett is working to avoid such problems and has received assurances from
each fund's service providers that they are taking similar steps. Of course, the
Year 2000 problem is unprecedented and, therefore, Lord Abbett cannot eliminate
altogether the possibility that it or the fund will be affected.
For More Information 13
<PAGE>
Financial Information
FINANCIAL HIGHLIGHTS
This table describes the fund's performance for the fiscal periods
indicated." Total return" shows how much your investment in the fund would
have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These Financial Highlights have
been audited by Deloitte & Touche LLP, the fund's independent auditors, in
conjunction with their annual audit of the fund's financial statements.
Financial statements for the year ended December 31, 1998 and the
Independent Auditors' Report thereon appear in the Annual Report to
Shareholders for the year ended December 31, 1998 and are incorporated by
reference into the Statement of Additional Information, which is available
upon request. Certain information reflects financial results for a single
fund share.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31,
Per Share Operating Performance: 1998 1997 1996 1995 1994
Net asset value, beginning of year $13.37 $13.29 $12.18 $11.25 $12.65
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Income from investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .05 (e) .08 .13 .162 .18
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
- ------------------------------------------------------------------------------------------------------------------------------------
gain (loss) on investments (.11) 3.61 2.19 2.383 (.545)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (.06) 3.69 2.32 2.545 (.365)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income - (.23) (.16) (.17) (.16)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain - (3.38) (1.05) (1.445) (.875)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $13.31 $13.37 $13.29 $12.18 $11.25
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (a) (0.45)% 31.53% 21.22% 26.09% (3.27)%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses (f) 1.16% 1.25% 1.22% 1.27% 1.12%
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.39% 0.74% 1.12% 1.48% 1.53%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Class B Shares Class C Shares Class P Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, Year Ended December 31, Year Ended December 31,
Per Share Operating Performance: 1998 1997 (b) 1998 1997 (b) 1998 (b)
Net asset value, beginning of period $13.33 $12.14 $13.33 $12.14 $13.38
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (.05) (e) - (c) (.05) (e) - (c) .02 (e)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
- ------------------------------------------------------------------------------------------------------------------------------------
gain (loss) on investments (.11) 3.27 (.12) 3.27 (.15)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (.16) 3.27 (.17) 3.27 (.13)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income - (.05) - (.05) -
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution from net realized gain - (2.03) - (2.03) -
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.17 $13.33 $13.16 $13.33 $13.25
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (a) (1.20)% 27.51% (d) (1.28)% 27.51% (d) (0.97)%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses (f) 1.92% 1.29% (d) 1.92% 1.28% (d) 1.37%
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (.35)% (0.15)% (d) (.35)% (0.13)% (d) 0.20%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31,
- ------------------------------------------------------------------------------------------------------------------------------------
Supplemental Data For All Classes: 1998 1997 1996 1995 1994
Net Assets, end of year (000) $406,906 $343,236 $257,148 $227,149 $190,788
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 46.58% 56.96% 38.88% 41.42% 57.49%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(b) Commencement of operations of respective class shares: May 1, 1997 (class B
and C) January 1, 1998 (class P).
(c) Amounts less than $0.01.
(d) Not annualized.
(e) Calculated using average shares outstanding during the period.
(f) The ratios for 1998 include expenses paid through an expense offset
arrangement.
14 Financial Information
<PAGE>
LINE GRAPH COMPARISON
Immediately below is a comparison of a $10,000 investment in class A shares
to the same investment in the RMC Index, assuming reinvestment of all
dividends and distributions.
[GRAPHIC OMMITTED]
Fiscal Year-end 12/31
(1) This reflects the deduction of the maximum initial sales charge of 5.75%.
(2) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 5.75% applicable to class
A shares, with all dividends and distributions reinvested for the periods
shown ending December 31, 1998, using the SEC-required uniform method to
compute such return.
(3) Performance for the unmanaged RMC Index does not reflect transaction costs,
management fees or sales charges.
(4) The class B shares were first offered on 5/1/97. Performance reflects the
deduction of a CDSC of 5% (for 1 year) and 3% (for life of class).
(5) The class C and P shares were first offered on 5/1/97 and 1/1/98,
respectively. Performance reflects the deduction of a CDSC of 1% (for 1
year) and 0% (for life of class) for class C shares. For P shares,
performance is at net asset value.
- --------------------------------------------------------------------------------
Average Annual Total Return At Maximum Applicable
Sales Charge For The Periods Ending December 31, 1998
1 Year 5 Years 10 Years Life
- --------------------------------------------------------------------------------
Class A (2) (6.20)% 12.80% 13.16% 12.32%
- --------------------------------------------------------------------------------
Class B (4) (1.20)% - - 14.86%
- --------------------------------------------------------------------------------
Class C (5) (1.28)% - - 14.81%
- --------------------------------------------------------------------------------
Class P (5) (0.97)% - - (1.00)%
- --------------------------------------------------------------------------------
Financial Information 15
<PAGE>
COMPENSATION FOR YOUR DEALER
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FIRST YEAR COMPENSATION
Front-end
sales charge Dealer's
paid by investors concession Service fee (1) Total compensation (2)
Class A investments (% of offering price) (% of offering price) (% of net investment) (% of offering price)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Less than $50,000 5.75% 5.00% 0.25% 5.24%
- ------------------------------------------------------------------------------------------------------------------------------------
$50,000 -$99,999 4.75% 4.00% 0.25% 4.24%
- ------------------------------------------------------------------------------------------------------------------------------------
$100,000 -$249,999 3.95% 3.25% 0.25% 3.49%
- ------------------------------------------------------------------------------------------------------------------------------------
$250,000 -$499,999 2.75% 2.25% 0.25% 2.49%
- ------------------------------------------------------------------------------------------------------------------------------------
$500,000 -$999,999 1.95% 1.75% 0.25% 2.00%
- ------------------------------------------------------------------------------------------------------------------------------------
$1 million or more (3) or Retirement Plan -100 or more
eligible employees (3) or Special Retirement Wrap Program (3)
- ------------------------------------------------------------------------------------------------------------------------------------
First $5 million no front-end sales charge 1.00% 0.25% 1.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Next $5 million above that no front-end sales charge 0.55% 0.25% 0.80%
- ------------------------------------------------------------------------------------------------------------------------------------
Next $40 million above that no front-end sales charge 0.50% 0.25% 0.75%
- ------------------------------------------------------------------------------------------------------------------------------------
Over $50 million no front-end sales charge 0.25% 0.25% 0.50%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B investments Paid at time of sale (% of net asset value)
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 3.75% 0.25% 4.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class C investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.75% 0.25% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class P investments Percentage of average net assets
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION AFTER FIRST YEAR
Class A investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge none 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B investments Percentage of average net assets (4)
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge none 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Class C investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.75% 0.25% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class P investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The service fee for class A and P shares is paid quarterly . The first
year's service fee on class B and C shares is paid at the time of sale.
(2) Dealer's concession percentages and service fee percentages are calculated
from different amounts, and therefore may not equal total compensation
percentages if combined using simple addition. Additional Concessions may
be paid to Authorized Institutions, such as your dealer, from time to time.
(3) Concessions are paid at the time of sale on all class A shares sold during
any 12-month period starting from the day of the first net asset value
sale. With respect to (a) class A share purchases at $1 million or more,
sales qualifying at such level under rights of accumulation and statement
of intention privileges are included and (b) for Special Retirement Wrap
Programs, only new sales are eligible and exchanges into the fund are
excluded.
(4) With respect to class B, C and P shares, 0.25%, 1.00% and 0.45%,
respectively, of the average annual net asset value of such shares
outstanding during the quarter (including distribution reinvestment shares
after the first anniversary of their issuance) is paid to Authorized
Institutions, such as your dealer. These fees are paid quarterly in
arrears.
16 Financial Information
<PAGE>
More information on this fund is available free upon request, including
the following:
ANNUAL/SEMI-ANNUAL REPORT
Describes the fund, lists portfolio holdings and contains a letter from
the fund's manager discussing recent market conditions and the funds'
investment strategies.
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
Provides more details about the fund and its policies. A current SAI is
on file with the Securities and Exchange Commission ("SEC") and is
incorporated by reference (is legally considered part of this
prospectus).
To obtain information:
By telephone. Call the fund at:
800-426-1130
By mail. Write to the fund at:
The Lord Abbett Family of Funds
767 Fifth Avenue
New York, NY 10153-0203
Via the Internet
Lord, Abbett & Co.
http://www.lordabbett.com
Text only versions of fund documents can be viewed online or downloaded from:
SEC
http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 800-SEC-0330) or by sending your request and a duplicating
fee to the SEC's Public Reference Section, Washington, DC 20549-6009.
Lord Abbett Mid-Cap Value Fund
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
- -----------------------
SEC file number: 811-3691
LAMCVF-1-599
(5/99)
