1933 Act File No. 33-20309
1940 Act File No. 811-5476
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 7 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]
OF 1940
Post-Effective Amendment No. 7 [X]
LORD ABBETT GLOBAL FUND, INC.
Exact Name of Registrant as Specified in Charter
767 FIFTH AVENUE, NEW YORK, N. Y. 10153-0203
Address of Principal Executive Office
REGISTRANT'S TELEPHONE NUMBER (212) 848-1800
Kenneth B. Cutler, Vice President & Secretary
767 FIFTH AVENUE, NEW YORK, N. Y. 10153
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
______ immediately on filing pursuant to paragraph (b) of Rule 485
__X___ on May 1, 1995 pursuant to paragraph (b) of Rule 485
______ 60 days after filing pursuant to paragraph (a) (1) of Rule 485
______ on (date) pursuant to paragraph (a) (1) of Rule 485
______ 75 days after filing pursuant to paragraph (a) (2) of Rule 485
______ on (date) pursuant to paragraph (a) (2) of Rule 485
If appropriate, check the following box: this post-effective amendment
designates a new effective date for a previously filed post-effective amendment
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a) (1) and a Rule 24f-2 Notice for
Registrant's most recent fiscal year was filed with the Commission on or about
February 27, 1995.
<PAGE>
LORD ABBETT GLOBAL FUND, INC.
FORM N-1A
Cross Reference Sheet
to Rule 481 (a)
Post-Effective Amendment No. 7
FORM N-1A LOCATION IN PROSPECTUS OR
ITEM NO. STATEMENT OF ADDITIONAL INFORMATION
1 Cover Page
2 Fee Table
3 (a) Financial Highlights; Performance
3 (b) N/A
3 (c) Performance
3 (d) N/A
4 (a) (i) Cover Page
4 (a) (ii) Investment Objectives and Policies
4 (b) Investment Objectives and Policies
4 (c) Risk Factors
5 (a) Our Management
5 (b) (c) Our Management; Back Cover Page
5 (d) N/A
5 (e) Back Cover Page
5 (f) Our Management
5 (g) N/A
5 A Performance
6 (a) Cover Page
6 (b) (c) (d) N/A
6 (e) Cover Page
6 (f) (g) Dividends, Capital Gains
Distributions and Taxes
6 (h) Cover Page
7 (a) Back Cover Page
7 (b) (c) (d)
(e) (f) Purchases
8 Redemptions
9 N/A
10 Cover Page
11 Cover Page - Table of Contents
12 N/A
13 Investment Objectives and Policies
14 Directors and Officers
15 (a) (b) N/A
15 (c) Directors and Officers
16 (a) (i) Investment Advisory and Other Services
16 (a) (ii) Directors and Officers
16 (a) (iii) Investment Advisory and Other Services
16 (b) Investment Advisory and Other Services
16 (c)(d)(e)(g) N/A
16 (f) Purchases, Redemptions
and Shareholder Services; Directors and
Officers
16 (h) Investment Advisory and Other Services
16 (i) N/A
<PAGE>
Form N-1A Location In Prospectus or
ITEM NO. STATEMENT OF ADDITIONAL INFORMATION
17 (a) Portfolio Transactions
17 (b) N/A
17 (c) (d) Portfolio Transactions
17 (e) N/A
18 (a) Cover Page
18 (b) N/A
19 (a) (b) Purchases, Redemptions
and Shareholder Services
19 (c) N/A
20 Taxes
21 (a) Purchases, Redemptions
and Shareholder Services
21 (b) (c) N/A
22 (a) N/A
22 (b) Past Performance
23 Financial Statements
<PAGE>
LORD ABBETT GLOBAL FUND, INC.
THE GENERAL MOTORS BUILDING
767 FIFTH AVENUE
NEW YORK, NY 10153-0203
800-426-1130
LORD ABBETT GLOBAL FUND, INC. (WE OR THE FUND) IS A DIVERSIFIED, OPEN-END
MANAGEMENT INVESTMENT COMPANY INCORPORATED UNDER MARYLAND LAW ON FEBRUARY 23,
1988. THE FUND COMPRISES TWO DISTINCT INVESTMENT PORTFOLIOS, THE EQUITY SERIES
AND THE INCOME SERIES. SHARES OF EACH SERIES HAVE EQUAL RIGHTS AS TO VOTING,
DIVIDENDS, ASSETS AND LIQUIDATION WITH RESPECT TO OTHER SHARES OF THAT SERIES.
THE EQUITY SERIES SEEKS LONG-TERM GROWTH OF CAPITAL AND INCOME CONSISTENT
WITH REASONABLE RISK. THE PRODUCTION OF CURRENT INCOME IS A SECONDARY
CONSIDERATION FOR THE EQUITY SERIES. THE INCOME SERIES SEEKS HIGH CURRENT INCOME
CONSISTENT WITH REASONABLE RISK. CAPITAL APPRECIATION IS A SECONDARY
CONSIDERATION FOR THE INCOME SERIES. THERE CAN BE NO ASSURANCE THAT EACH SERIES
WILL ACHIEVE ITS OBJECTIVE.
BY INVESTING IN GLOBALLY-DIVERSIFIED SECURITIES, THE FUND OFFERS THE
OPPORTUNITY FOR INVESTORS TO TAKE ADVANTAGE OF CAPITAL AND INCOME GROWTH (IN THE
CASE OF THE EQUITY SERIES) AND HIGH CURRENT INCOME WITH CAPITAL APPRECIATION (IN
THE CASE OF THE INCOME SERIES) THAT MAY BE PREVALENT, FROM TIME TO TIME, IN
PARTICULAR COUNTRIES THROUGHOUT THE WORLD.
THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION ABOUT THE FUND THAT A
PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING. ADDITIONAL INFORMATION ABOUT
THE FUND HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE
STATEMENT OF ADDITIONAL INFORMATION IS INCORPORATED BY REFERENCE INTO THIS
PROSPECTUS AND MAY BE OBTAINED, WITHOUT CHARGE, BY WRITING TO THE FUND OR BY
CALLING 800-874-3733. ASK FOR PART B OF THE PROSPECTUS THE STATEMENT OF
ADDITIONAL INFORMATION.
THE DATE OF THIS PROSPECTUS AND THE DATE OF THE STATEMENT OF ADDITIONAL
INFORMATION IS MAY 1, 1995. UNLESS OTHERWISE STATED, USE OF THE WORD FUND IN
THIS PROSPECTUS WILL MEAN BOTH SERIES.
PROSPECTUS
INVESTORS SHOULD READ AND RETAIN THIS PROSPECTUS. SHAREHOLDER INQUIRIES SHOULD
BE MADE IN WRITING TO THE FUND OR BY CALLING 800-821-5129. YOU CAN ALSO MAKE
INQUIRIES THROUGH YOUR BROKER-DEALER.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
AN INVESTMENT IN THE FUND INVOLVES RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
CONTENTS PAGE
1 Fee Table 2
2 Financial Highlights 2
3 Investment
Objectives and Policies 3
4 Risk Factors 7
5 Purchases 7
6 Shareholder Services 10
7 Our Management 10
8 Dividends, Capital Gains
Distributions and Taxes 11
9 Redemptions 12
10 Performance 13
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
1 FEE TABLE
A summary of each Series expenses is set forth in the table below. The example
is not a representation of past or future expenses. Actual expenses may be
greater or less than those shown.
SHAREHOLDER TRANSACTION EXPENSES EQUITY INCOME
(AS A PERCENTAGE OF OFFERING PRICE) SERIES SERIES
------ ------
Maximum Sales Load(1) on Purchases
(See Purchases) 5.75% 4.75%
Deferred Sales Load(1)(See Purchases) None(2) None(2)
- ------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (See Our Management) .75% .50%
12b-1 Fees (See Purchases) .23% .26%
Other Expenses (See Our Management) .58% .26%
- ------------------------------------------------------------------
Total Operating Expenses 1.56% 1.02%
==================================================================
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.
1 year(3) 3 years(3) 5 years(3) 10 years(3)
-------- --------- --------- ----------
Equity Series $72 $104 $138 $232
Income Series $57 $78 $101 $166
(1)Sales load is referred to as sales charge and deferred sales load is referred
to as contingent deferred reimbursement charge throughout this Prospectus.
(2)Redemptions of shares on which the Funds 1% Rule 12b-1 sales distribution fee
for purchases of $1 million or more has been paid are subject to a 1%
contingent deferred reimbursement charge, if the redemption occurs within
24 months after the month of purchase, subject to certain exceptions
described herein.
(3)Based on total operating expenses shown in the table above.
The foregoing is provided to give investors a better understanding of the
expenses that are incurred by an investment in the Fund.
2 FINANCIAL HIGHLIGHTS
The following table has been audited by Deloitte & Touche LLP, independent
accountants, in connection with their annual audit of the Funds Financial
Statements, whose report thereon is incorporated by reference in the Statement
of Additional Information and may be obtained on request, and has been included
herein in reliance upon their authority as experts in accounting and auditing.
<TABLE>
<CAPTION>
EQUITY SERIES FOR THE PERIOD
SEPTEMBER 30, 1988
(COMMENCEMENT
OF OPERATIONS) TO
PER SHARE OPERATING YEAR ENDED DECEMBER 31, DECEMBER 31,
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE: 1994 1993 1992 1991 1990 1989 1988
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $12.44 $10.48 $10.79 $9.57 $11.09 $9.62 $9.28
INCOME FROM INVESTMENT OPERATIONS
Net investment income .10 .04 .078 .134 .211 .170 .073
Net realized and unrealized
gain (loss) on securities (.1125) 2.635 (.268) 1.276 (1.551) 1.53 .327
TOTAL FROM INVESTMENT OPERATIONS (.0125) 2.675 (.190) 1.410 (1.340) 1.70 .400
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from net investment income (.10) (.10) (.12) (.12) (.18) (.12) (.06)
Distributions from net realized gain (.7775) (.615) - (.07) - (.11) -
NET ASSET VALUE, END OF PERIOD $11.55 $12.44 $10.48 $10.79 $9.57 $11.09 $9.62
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN* (0.09)% 26.05% (1.73)% 14.76% (12.13)% 17.73% 4.37%**
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $83,739 $71,632 $34,332 $36,654 $32,986 $27,692 $7,623
RATIOS TO AVERAGE NET ASSETS:
Expenses, including waiver 1.56% 1.68% 1.84% 1.61% 1.45% 1.26% .24%**
Expenses, excluding waiver 1.56% 1.68% 1.84% 1.61% 1.72% 2.16% 1.06%**
Net investment income .79% .70% .76% 1.30% 2.03% 1.52% .93%**
PORTFOLIO TURNOVER RATE 75.39% 197.59% 136.75% 74.83% 76.24% 50.12% 3.86%
<FN>
* Total return does not consider the effects of sales loads.
** Not annualized.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INCOME SERIES FOR THE PERIOD
SEPTEMBER 30, 1988
(COMMENCEMENT
OF OPERATIONS) TO
PER SHARE OPERATING YEAR ENDED DECEMBER 31, DECEMBER 31,
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE: 1994 1993 1992 1991 1990 1989 1988
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $9.02 $8.87 $9.40 $9.13 $9.28 $9.37 $9.53
INCOME FROM INVESTMENT OPERATIONS
Net investment income .65 .76 .808 .877 .940 .998 .233
Net realized and unrealized
gain (loss) on securities (.9603) .174 (.288) .316 .059 (.07) (.1028)
TOTAL FROM INVESTMENT OPERATIONS (.3103) .934 .520 1.193 .999 .928 .1302
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from net investment income (.6035) (.784) (.840) (.873) (.959) (.998) (.2402)
Distributions from net realized gain - - - (.05) - (.02) -
Distribution to shareholders in
excess of net investment income (.1262) - - - - - -
Special distributions from foreign
currency transactions - (.21) - (.19) - - (.05)
NET ASSET VALUE, END OF PERIOD $7.98 $9.02 $8.87 $9.40 $9.13 $9.28 $9.37
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN* (3.40)% 10.78% 5.76% 14.33% 11.88% 10.58% 1.41%**
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $249,490 $277,495 $148,137 $101,023 68,587 $37,470 $8,048
RATIOS TO AVERAGE NET ASSETS:
Expenses, including waiver 1.02% 1.04% 1.22% 1.30% 1.16% .90% .24%**
Expenses, excluding waiver 1.02% 1.04% 1.22% 1.30% 1.33% 1.64% .74%**
Net investment income 7.72% 7.81% 8.50% 9.96% 10.13% 10.41% 2.41%**
PORTFOLIO TURNOVER RATE 1,230.20% 1,559.43% 812.01% 543.90% 613.01% 757.32% 22.62%
<FN>
* Total return does not consider the effects of sales loads.
** Not annualized.
</FN>
</TABLE>
3 INVESTMENT OBJECTIVES AND POLICIES
THE EQUITY SERIES. The investment objective of the Equity Series is long-term
growth of capital and income consistent with reasonable risk. The production of
current income is a secondary consideration for the Equity Series.
The Equity Series believes that the needs of most long-term investors are
best served by capital growth without excessive fluctuations in market value.
Fund management (hereinafter meaning the officers of the Fund on a day-to-day
basis subject to the overall direction of the Funds Board of Directors with the
advice of Lord Abbett) will try to anticipate major changes in the world economy
and select for the Equity Series domestic and foreign securities which Fund
management believes will benefit most from these changes. The Equity Series
normally invests primarily in common stocks (including securities convertible
into common stocks) of domestic and foreign companies in sound financial
condition, which common stocks are expected to show above-average price
appreciation. Although the prices of common stocks fluctuate and their dividends
vary, historically, common stocks have appreciated in value and their dividends
have increased when the companies they represent have prospered and grown.
Success in achieving the investment objective of the Equity Series is dependent
upon Fund managements ability to anticipate market changes, as well as its
ability to value properly particular companies. Thus, there is no assurance that
the portfolio investments made by Fund management on behalf of the Equity Series
will attain the results sought.
The Equity Series constantly balances the opportunity for profit against
the risk of loss. In the past, very few industries or economies have
continuously provided the best investment opportunities. The Equity Series
policy is to take a flexible approach and to adjust the portfolio to reflect
changes in the opportunity for sound investments relative to the risk assumed.
Therefore, domestic and foreign securities judged to be overvalued will be sold
and the proceeds will be reinvested in other securities believed to offer better
values.
The Equity Series, while having no specific rating requirements with
respect to the debt securities in which
<PAGE>
it invests, will occasionally be guided by the prospect of a more attractive
risk-adjusted total return from an issuers debt securities versus its equity
securities. As of the Equity Series fiscal year ended December 31, 1994, 9.7% of
its assets were invested in debt securities.
Under normal circumstances, the Equity Series will invest its total assets
in domestic and foreign securities with at least 65% of such assets invested in
equity securities primarily traded in at least three countries, including the
United States. However, this guideline may not be followed for temporary
defensive periods when Fund management believes that it should invest entirely
in domestic securities or in securities primarily traded in one or more foreign
countries or in debt securities to a greater extent than 35% of the total assets
of the Equity Series.
THE INCOME SERIES. The investment objective of the Income Series is high current
income consistent with reasonable risk. Capital appreciation is a secondary
consideration for the Income Series.
Under normal market conditions, the Income Series will be invested
primarily in a portfolio of (i) high-quality debt securities issued or
guaranteed by U.S. and foreign governments or their agencies, instrumentalities
or political subdivisions; (ii) high-quality debt securities issued or
guaranteed by supranational organizations, such as the World Bank; (iii)
high-quality U.S. and foreign corporate debt securities including commercial
paper; and (iv) debt obligations of banks and bank holding companies. The
high-quality debt securities described above will consist of those rated at the
time of purchase within one of the two highest grades assigned by Standard &
Poor's Corporation (S&P) or Moody's Investors Service, Inc. (Moody's) or, if
unrated, judged by Fund management to be of comparable quality. Up to 35% of the
Income Series total assets may be invested in equity securities and in debt
securities rated below S&Ps and Moody's two highest grades but rated at the time
of purchase BBB or better by S&P or Baa or better by Moody's or, if unrated,
judged by Fund management to be of comparable quality. Bonds rated Baa by
Moody's or BBB by S&P are considered medium-grade and have speculative
characteristics and are more sensitive to economic change than higher rated
bonds. A description of S&Ps and Moody's ratings is included in the Appendix to
the Statement of Additional Information. Fundamental economic strength, credit
quality, currency exchange and interest-rate trends will be the principal
determinants of the various country, geographic and industry sector weightings
within the Income Series portfolio. The Income Series will invest in countries
and in currency denominations where the combination of fixed-income market
returns, price appreciation of fixed-income obligations, equity securities and
currency exchange rate movements appear to present opportunities for an
attractive total return consistent with the Income Series investment objective.
The U.S. Government securities in which the Income Series may invest
include direct obligations of the United States Treasury (such as Treasury
bills, notes and bonds) and obligations issued by United States Government
agencies and instrumentalities, including securities that are supported by the
full faith and credit of the United States (such as Government National Mortgage
Association certificates), securities that are supported by the right of the
issuer to borrow from the United States Treasury (such as securities of the
Federal Home Loan Banks) and securities supported solely by the creditworthiness
of the issuer (such as Federal National Mortgage Association and Federal Home
Loan Mortgage Corporation securities).
The Income Series may purchase U.S. Government securities on a when-issued
basis and, while awaiting delivery and before paying for them (settlement),
normally may invest in short-term U.S. Government securities. The Income Series
does not start earning interest on these when-issued securities until settlement
and often they are sold prior to settlement. While this investment strategy may
contribute significantly to a portfolio turnover rate in excess of 100%, it has
little or no transaction costs or adverse tax consequences for the Income
Series. Transaction costs normally do not include brokerage because the Income
Series fixed-income portfolio transactions usually are on a principal basis and
at the time of purchase the Series normally anticipates that any markups charged
will be more than offset by the anticipated economic benefits of the
transaction. During the period between purchase and settlement, the value of the
securities will fluctuate and assets consisting of cash and/or marketable
securities marked to market daily in an amount sufficient to make payment at
settlement will be segregated at our custodian in order to pay for the
commitment. There is a risk that market yields available at settlement may be
higher than yields obtained on the purchase date, which could result in
depreciation of value.
The other debt securities in which the Income Series may invest include,
but
<PAGE>
are not limited to, domestic and foreign, fixed- and floating-rate notes, bonds,
debentures, convertibles, certificates, warrants, commercial paper, and
principal and interest pass-throughs issued by governments, authorities,
partnerships, corporations, trust companies, banks and bank holding companies,
and bankers acceptances, certificates of deposit, time deposits and deposit
notes issued by domestic and foreign banks.
Under normal circumstances, the Income Series will invest its total assets
in domestic and foreign securities with at least 65% of such assets invested in
long-term debt securities primarily traded in at least three countries,
including the United States. However, this guideline may not be followed for
temporary defensive periods when Fund management believes that it should invest
entirely in domestic securities or in securities primarily traded in one or more
foreign countries or in equity or short-term debt securities to a greater extent
than 35% of the total assets of the Income Series. The market prices of
long-term debt securities tend to be more volatile than those of short-term debt
securities when interest rates change.
INVESTMENT POLICIES AND TECHNIQUES
COMMON TO BOTH SERIES
The Fund will not be required to sell debt securities which become unrated or
are downgraded after purchase.
COUNTRY DIVERSIFICATION AND DEFENSIVE POSITION. It is the present intention
of each Series to invest its assets in securities which are primarily traded in
the United Kingdom, Western Europe (Austria, Germany, the Netherlands, France,
Switzerland, Italy, Belgium, Norway, Sweden, Denmark and Spain), Australia,
Canada, the Far East (Japan, Hong Kong, Korea, Singapore, Taiwan and Thailand),
Latin America (Argentina, Brazil, Mexico and Venezuela) and the United States.
However, investments may be made from time to time in securities which are
primarily traded in other developed countries. Except for the guidelines
described above with respect to investing in at least three countries, including
the United States, there are no limitations on how much of each Series assets
can be invested in securities primarily traded in any one country.
When Fund management believes that one or both Series should assume a
temporary defensive position because of unfavorable investment conditions, the
affected Series may temporarily hold its assets in cash and short-term money
market instruments.
Foreign Currency Hedging Techniques. Each Series may utilize various
foreign currency hedging techniques described below.
A forward foreign currency contract involves an obligation to purchase or
sell a specific amount of a currency at a set price on a future date. Each
Series may enter into forward foreign currency contracts (but not in excess of
the amount a Series has invested in non-U.S. dollar-denominated securities at
the time any such contract is entered into) in primarily two circumstances.
First, when a Series enters into a contract for the purchase or sale of a
security denominated in a foreign currency, the Series may desire to lock in the
U.S. dollar price of the security. By entering into a forward contract for the
purchase or sale of the amount of foreign currency involved in the underlying
security transaction, the Series will be able to protect against a possible loss
resulting from an adverse change in the relationship between the U.S. dollar and
the subject foreign currency during the period between the date of purchase or
sale and the date of settlement.
Second, when Fund management believes that the currency of a particular
foreign country may suffer a decline against the U.S. dollar, a Series may enter
into a forward contract to sell the amount of foreign currency approximating the
value of some or all of a Series portfolio securities denominated in such
foreign currency or, in the alternative, a Series may use a
cross-currency-hedging technique whereby it enters into such a forward contract
to sell another currency (obtained in exchange for the currency which the
portfolio securities are denominated in if such securities are sold) which it
expects to decline in a similar manner but which has a lower transaction cost.
Precise matching of the forward contract and the value of the securities
involved will generally not be possible since the future value of such
securities denominated in foreign currencies will change as a consequence of
market movements in the value of those securities between the date the forward
contract is entered into and the date the contract matures. The Series intend to
enter into such forward contracts under this second circumstance periodically.
Each Series also may purchase foreign currency put options and write
foreign currency call options on U.S. exchanges or U.S. over-the-counter
markets. A put option gives a Series, upon payment of a premium, the right to
sell a currency at the exercise price until the expiration of the option and
serves to insure against adverse currency price movements in the underlying
<PAGE>
portfolio assets denominated in that currency. The premiums paid for such
foreign currency put options will not exceed 5% of the net assets of a Series.
Exchange-listed options markets in the United States include several major
currencies, and trading may be thin and illiquid. A number of major investment
firms trade unlisted options which are more flexible than exchange-listed
options with respect to strike price and maturity date. These unlisted options
generally are available on a wider range of currencies, including those of most
of the developed countries mentioned above. Unlisted foreign-currency options
generally are less liquid than listed options and involve the credit risk
associated with the individual issuer. Unlisted options together with other
illiquid securities may comprise no more than 5% of each Series net assets.
A foreign currency call option written by a Series gives the purchaser,
upon payment of a premium, the right to purchase from a Series a currency at the
exercise price until the expiration of the option. A Series may write a call
option on a foreign currency only in conjunction with a purchase of a put option
on that currency. Such a strategy is designed to reduce the cost of downside
currency protection by limiting currency appreciation potential. The face value
of such writing or cross-hedging (described above) may not exceed 90% of the
value of the securities denominated in such currency (a) invested in by a Series
to cover such call writing or (b) to be crossed.
Limitations imposed by the Internal Revenue Code on regulated investment
companies may restrict each Series ability to engage in transactions in options,
forward contracts and cross hedges.
The Fund's custodian will segregate cash or liquid high-grade debt
securities belonging to a Series in an amount not less than that required by SEC
Release 10666 with respect to a Series assets committed to (a) writing options,
(b) forward foreign currency contracts and (c) cross hedges entered into by a
Series. If the value of the securities segregated declines, additional cash or
debt securities will be added on a daily basis (i.e., marked to market), so that
the segregated amount will not be less than the amount of a Series commitments
with respect to such written options, forward foreign currency contracts and
cross hedges.
OTHER INVESTMENT TECHNIQUES COMMON TO BOTH SERIES
Each Series intends to utilize from time to time one or more of the investment
techniques identified below. It is currently intended that no more than 5% of
each Series net assets will be at risk in the use of any one of such investment
techniques. While some of these techniques involve risk when utilized
independently, Fund management intends to use them to reduce risk and volatility
in the portfolios, although this result cannot be assured.
COVERED CALL OPTIONS. Each Series may write call options on securities it
owns, provided that the securities we hold to cover such options do not
represent more than 5% of a Series net assets. A call option on stock gives the
purchaser of the option, upon payment of a premium to the writer of the option,
the right to call upon the writer to deliver a specified number of shares of a
stock on or before a fixed date at a predetermined price.
RIGHTS AND WARRANTS. Each Series may invest in rights and warrants to
purchase securities. Included within these purchases, but not exceeding 2% of
the value of each Series net assets, may be warrants which are not listed on the
New York Stock Exchange or American Stock Exchange.
REPURCHASE AGREEMENTS. Each Series may enter into repurchase agreements
with respect to a security. A repurchase agreement is a transaction by which a
Series acquires a security and simultaneously commits to resell that security to
the seller (a bank or securities dealer) at an agreed-upon price on an
agreed-upon date. Such repurchase agreement must, at all times, be
collateralized by cash or U.S. Government securities having a value equal to, or
in excess of, the value of the repurchase agreement.
OTHER POLICIES COMMON TO BOTH SERIES
It is currently intended that no more than 5% of each Series net assets will be
at risk in the use of any one of the policies identified below.
CLOSED-END INVESTMENT COMPANIES. Each Series may invest in shares of
closed-end investment companies if bought in the primary or secondary market
with a fee or commission no greater than the customary brokers commission.
Shares of such investment companies sometimes trade at a discount or premium in
relation to their net asset value and there may be duplication of fees, for
example, to the extent that a Series and the closed-end investment company both
charge a management fee.
LENDING OF PORTFOLIO SECURITIES. Each Series may seek to earn income by
lending its portfolio securities if the loan is collateralized and its terms are
in accordance with regulatory requirements.
<PAGE>
EMERGENCY BORROWING. As a temporary measure for extraordinary or emergency
purposes, each Series may borrow money from banks on an unsecured basis.
Each Series investment objective may not be changed without the shareholder
approval of that Series.
FUTURE CONVERSION. In the future, upon shareholder approval, the Fund may seek
to achieve its investment objective by investing all of its assets in another
investment company (or series or class thereof) having the same investment
objective. Shareholders will be notified thirty days in advance of such
conversion. Shareholders of the Fund will be able to exchange shares for shares
of the other funds, series or classes in the Lord Abbett family having an
exchange privilege with the Fund.
PORTFOLIO TURNOVER. The portfolio turnover rate for the fiscal year ended
December 31, 1994 was 75.39% versus 197.59% for the prior year for the Equity
Series and 1,230.20%, versus 1,599.43% for the prior year for the Income Series.
The high portfolio turnover rate for the Income Series relates to substantial
trading of U.S. and U.S. agency mortgage-backed securities to take advantage of
value changes among different agencies, coupons and maturities. Also, there was
significant movement of investments from country to country to take advantage of
return differentials.
4 RISK FACTORS
Investment in the Fund requires consideration of certain factors that are not
normally involved in investments in U.S. securities. Generally, most of the
assets of each Series will be denominated or traded in foreign currencies.
Accordingly, a change in the value of any foreign currency relative to the U.S.
dollar will result in a corresponding change in the U.S. dollar value of a
Series assets denominated or traded in that currency. The performance of each
Series will be measured in U.S. dollars, the base currency of the Series.
Securities markets of foreign countries in which a Series may invest generally
are not subject to the same degree of regulation as the U.S. markets and may be
more volatile and less liquid than the major U.S. markets. Lack of liquidity may
affect a Series ability to purchase or sell large blocks of securities and thus
obtain the best price. There may be less publicly-available information on
publicly-traded companies, banks and governments in foreign countries than is
generally the case for such entities in the United States. The lack of uniform
accounting standards and practices among countries impairs the validity of
direct comparisons of valuation measures (such as price/earnings ratios) for
securities in different countries. In addition, a Series may incur costs
associated with currency hedging and the conversion of foreign currency into
U.S. dollars and may be adversely affected by restrictions on the conversion or
transfer of foreign currency. Other considerations include political and social
instability, expropriation, higher transaction costs and different securities
settlement practices. Settlement periods for foreign securities, which are
sometimes longer than those for securities of U.S. issuers, may affect portfolio
liquidity. These different settlement practices may cause missed purchasing
opportunities and/or the loss of interest on money market and debt investments
pending further equity or long-term debt investments. In addition, foreign
securities held by a Series may be traded on days that the Series do not value
their portfolio securities, such as Saturdays and customary business holidays,
and, accordingly, a Series net asset value may be significantly affected on days
when shareholders do not have access to the Series.
5 PURCHASES
You may buy our shares through any independent securities dealer having a sales
agreement with Lord Abbett, our exclusive selling agent. Place your order with
your investment dealer or send it to Lord Abbett Global Fund, Inc. (P.O. Box
419100, Kansas City, Missouri 64141). The minimum initial investment is $1,000,
except for Invest-A-Matic and Div-Move ($250 initial and $50 subsequent minimum)
and Retirement Plans ($250 minimum). Subsequent investments may be made in any
amount. See Shareholder Services.
The net asset value of our shares is calculated every business day as of
the close of the New York Stock Exchange (NYSE) by dividing net assets by the
number of shares outstanding. Securities are valued at their market value as
more fully described in the Statement of Additional Information.
Orders for shares received by the Fund prior to the close of the NYSE, or
received by dealers prior to such close and received
<PAGE>
by Lord Abbett prior to the close of its business day, will be confirmed at the
applicable public offering price effective at such NYSE close. Orders received
by dealers after the NYSE closes and received by Lord Abbett in proper form
prior to the close of its next business day will be executed at the applicable
public offering price effective as of the close of the NYSE on that next
business day. The dealer is responsible for the timely transmission of orders to
Lord Abbett. A business day is a day on which the NYSE is open for trading.
For information regarding the proper form of a purchase or redemption
order, call the Fund at 800-821-5129. This offering may be suspended, changed or
withdrawn. Lord Abbett reserves the right to reject any order.
The offering price is based on the per-share net asset value next computed
after your order is accepted plus a sales charge as follows:
<TABLE>
<CAPTION>
EQUITY SERIES SALES CHARGE AS A DEALERS
PERCENTAGE OF: CONCESSION
------------------ AS A TO COMPUTE
NET PERCENTAGE OFFERING
OFFERING AMOUNT OF OFFERING PRICE, DIVIDE
SIZE OF INVESTMENT PRICE INVESTED PRICE* NAV BY
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Less than $50,000 5.75% 6.10% 5.00% .9425
$50,000 to $99,999 4.75% 4.99% 4.00% .9525
$100,000 to $249,999 3.75% 3.90% 3.25% .9625
$250,000 to $499,999 2.75% 2.83% 2.25% .9725
$500,000 to $999,999 2.00% 2.04% 1.75% .9800
$1,000,000 or more No Sales Charge 1.00% 1.0000
</TABLE>
<TABLE>
<CAPTION>
INCOME SERIES SALES CHARGE AS A DEALERS
PERCENTAGE OF: CONCESSION
------------------ AS A TO COMPUTE
NET PERCENTAGE OFFERING
OFFERING AMOUNT OF OFFERING PRICE, DIVIDE
SIZE OF INVESTMENT PRICE INVESTED PRICE* NAV BY
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.00% .9525
$50,000 to $99,999 4.75% 4.99% 4.25% .9525
$100,000 to $249,999 3.75% 3.90% 3.25% .9625
$250,000 to $499,999 2.75% 2.83% 2.50% .9725
$500,000 to $999,999 2.00% 2.04% 1.75% .9800
$1,000,000 or more No Sales Charge 1.00% 1.0000
<FN>
*Lord Abbett may, for specified periods, allow dealers to retain the full sales
charge for sales of shares during such periods, or pay an additional concession
to a dealer who, during a specified period, 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. Lord Abbett may, from time to time,
implement promotions under which Lord Abbett will pay a fee to dealers with
respect to certain purchases not involving the imposition of a sales charge.
Additional payments may be paid from Lord Abbett's own resources and will be
made in the form of cash or, if permitted, non-cash payments. The non-cash
payments will include business seminars at resorts or other locations, including
meals and entertainment, or the receipt of merchandise. The cash payments will
include payment of various business expenses of the dealer.
</FN>
</TABLE>
In selecting dealers to execute portfolio transactions for the Funds
portfolios, 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.
VOLUME DISCOUNTS. This section describes several ways to qualify for a lower
sales charge if you inform Lord Abbett or the Fund that you are eligible at the
time of purchase.
(1) Any purchaser (as described below) may aggregate a purchase in the Fund
with purchases of any other eligible Lord Abbett-sponsored fund, together with
the current value at maximum offering price of any shares in the Fund and in any
eligible Lord Abbett-sponsored funds held by the purchaser. (Holdings in the
following funds are not eligible for the above rights of accumulation: Lord
Abbett Equity Fund (LAEF), Lord Abbett Series Fund (LASF), Lord Abbett Research
Fund if not offered to the general public (LARF) and Lord Abbett U.S. Government
Securities Money Market Fund (GSMMF), except for existing holdings in GSMMF
which are attributable to shares exchanged from a Lord Abbett-sponsored fund
offered with a front-end sales charge or from a fund in the Lord Abbett Counsel
Group.) (2) A purchaser may sign a non-binding 13-month statement of intention
to invest $50,000 (Equity Series), or $100,000 (Income Series), or in any of the
above eligible funds. If the intended purchases are completed during the period,
each purchase will be at the sales charge, if any, applicable to the aggregate
of such purchasers intended purchases. If not completed, each purchase will be
at the sales charge for the aggregate of the actual purchases. Shares issued
upon reinvestment of dividends or distributions are not included in the
statement of intention. 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
<PAGE>
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.
Our shares may be purchased at net asset value by our directors, employees
of Lord Abbett, employees of our shareholder servicing agent and employees of
any securities dealer having a sales agreement with Lord Abbett who consents to
such purchases or by the trustee or custodian under any pension or
profit-sharing plan or Payroll Deduction IRA established for the benefit of such
persons or for the benefit of any national securities trade organization to
which Lord Abbett belongs or any company with an account(s) in excess of $10
million managed by Lord Abbett on a private-advisory-account basis. For purposes
of this paragraph, the terms directors and employees include a directors or
employees spouse (including the surviving spouse of a deceased director or
employee). The terms directors and employees of Lord Abbett also include other
family members and retired directors and employees. Our shares also may be
purchased at net asset value (a) at $1 million or more, (b) with dividends and
distributions from other Lord Abbett-sponsored funds, except for dividends and
distributions on shares of LARF, LAEF, LASF and Lord Abbett Counsel Group, (c)
under the loan feature of the Lord Abbett-sponsored prototype 403(b) plan for
share purchases representing the repayment of principal and interest, (d) by
certain authorized brokers, dealers, registered investment advisers or other
financial institutions who have entered into an agreement with Lord Abbett in
accordance with certain standards approved by Lord Abbett, providing
specifically for the use of our shares in particular investment products made
available for a fee to clients of such brokers, dealers, registered investment
advisers and other financial institutions, (e) by employees, partners and owners
of unaffiliated consultants and advisers to Lord Abbett or Lord Abbett-sponsored
funds who consent to such purchase if such persons provide services to Lord
Abbett or such funds on a continuing basis and are familiar with such funds and
(f) subject to appropriate documentation, through a securities dealer where the
amount invested represents redemption proceeds from shares (Redeemed Shares) of
a registered open-end management investment company not distributed or managed
by Lord Abbett (other than a money market fund), if such redemptions have
occurred no more than 60 days prior to the purchase of our shares, the Redeemed
Shares were held for at least six months prior to redemption and the proceeds of
redemption were maintained in cash or a money market fund prior to purchase.
Purchasers should consider the impact, if any, of contingent deferred sales
charges in determining whether to redeem shares for subsequent investment in our
shares. Lord Abbett may suspend or terminate the purchase option referred to in
(f) above at any time.
Our assets may be issued at net asset value in exchange for the assets,
subject to possible tax adjustment, of a personal holding company or an
investment company.
RULE 12B-1 PLAN. The Fund has adopted a Rule 12b-1 Plan (the Plan) which
authorizes the payment of distribution fees to dealers (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 shareholder accounts and otherwise to encourage
their accounts to remain invested in the Fund and (b) to sell shares of the
Fund. Under the Plan the Fund pays to Lord Abbett, who passes on to dealers, (1)
an annual service fee (payable quarterly) of .25% of the average daily net asset
value of the Funds shares sold by dealers and (2) a one-time 1% sales
distribution fee, at the time of sale, on all shares at the $1 million level
sold by dealers on or after June 1, 1990. The shareholder privileges of rights
of accumulation and 13-month statements of intention may be used in calculating
such sales eligible for the 1% sales distribution fee. Lord Abbett is required
to pay the full amount of the sales distribution fees to dealers as compensation
for selling our shares.
Holders of shares on which the 1% sales distribution fee has been paid will
be required to pay to the Fund a contingent deferred reimbursement charge 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. (An exception is made for redemptions 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
<PAGE>
to plan participants.) If the shares have been exchanged into another Lord
Abbett-sponsored fund and are thereafter redeemed out of the family on or before
the end of such twenty-fourth month, the charge will be collected for the Fund
by the other fund. The Fund will collect such a charge for other Lord
Abbett-sponsored funds in a similar situation. Shares of a fund or series on
which the 1% sales distribution fee has been paid may not be exchanged into a
fund or series with a Rule 12b-1 Plan for which the payment provisions have not
been in effect for at least one year.
6 SHAREHOLDER SERVICES
We offer the following shareholder services:
TELEPHONE EXCHANGE PRIVILEGE: Shares may be exchanged, without a service
charge, for those of any other Lord Abbett-sponsored fund except for (i) LAEF,
LARF, LASF and Lord Abbett Counsel Group and (ii) certain tax-free single-state
series where the exchanging shareholder is a resident of a state in which such
series is not offered for sale (together, Eligible Funds).
You or YOUR REPRESENTATIVE WITH PROPER IDENTIFICATION can instruct the Fund
to exchange uncertificated shares (held by the transfer agent) by telephone.
Shareholders have this privilege unless they refuse it in writing. The Fund will
not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine and will employ reasonable procedures to
confirm that instructions received are genuine, including requesting proper
identification and recording all telephone exchanges. Instructions must be
received by the Fund in Kansas City (800-521-5315) prior to the close of the
NYSE to obtain each funds net asset value per share on that day. Expedited
exchanges by telephone may be difficult to implement in times of drastic
economic or market change. The exchange privilege should not be used to take
advantage of short-term swings in the market. The Fund reserves the right to
terminate or limit the privilege of any shareholder who makes frequent
exchanges. The Fund can revoke the privilege for all shareholders upon 60 days
prior written notice. A prospectus for the other Lord Abbett-sponsored fund
selected by you should be obtained and read before an exchange. Exercise of the
Exchange Privilege will be treated as a sale for federal income tax purposes
and, depending on the circumstances, a capital gain or loss may be recognized.
SYSTEMATIC WITHDRAWAL PLAN: Except for retirement plans for which there is
no such minimum, if the maximum offering price value of your uncertificated
shares is at least $10,000, you may have periodic cash withdrawals automatically
paid to you in either fixed or variable amounts.
DIV-MOVE: You can invest the dividends paid on your account ($50 minimum
investment) into an existing account in any other Eligible Fund. The account
must be either your account, a joint account for you and your spouse, a single
account for your spouse, or a custodial account for your minor child under the
age of 21. You should read the prospectus of the other fund before investing.
INVEST-A-MATIC: You can make fixed, periodic investments ($50 minimum
investment) into the Fund and/or any Eligible Fund by means of automatic money
transfers from your bank checking account. You should read the prospectus of the
other fund before investing.
RETIREMENT PLANS: Lord Abbett makes available the retirement plan forms and
custodial agreements for IRAs (Individual Retirement Accounts including
Simplified Employee Pensions), 403(b) plans and pension and profit-sharing
plans, including 401(k) plans.
All correspondence should be directed to Lord Abbett Global Fund, Inc.
(P.O. Box 419100, Kansas City, Missouri 64141; 800-821-5129).
7 OUR MANAGEMENT
Our business is managed by our officers on a day-to-day basis under the overall
direction of our Board of Directors. We employ Lord Abbett as investment manager
pursuant to a Management Agreement. Lord Abbett is solely responsible for
advising each Series of the Fund with respect to portfolio investments. Lord
Abbett has been an investment manager for over 60 years and currently manages
approximately $16 billion in a family of mutual funds and other advisory
accounts. Lord Abbett provides us with investment management services and
executive and other personnel, pays the remuneration of our officers and our
directors affiliated with Lord Abbett, provides us with office space and pays
for ordinary and necessary office and clerical expenses relating to research,
statistical work and supervision of our portfolios and certain other costs. Lord
Abbett provides similar services to fifteen other Lord Abbett-sponsored funds
having various
<PAGE>
investment objectives and also advises other investment clients. E. Wayne
Nordberg serves as portfolio manager of the Equity Series. Mr. Nordberg is Lord
Abbett's partner in charge of research and a member of the Executive Office of
Investments. Mr. Nordberg has 35 years of investment experience and joined Lord
Abbett in 1988. Zane E. Brown serves as portfolio manager of the Income Series.
Mr. Brown is director of Lord Abbett's fixed-income area. Prior to joining Lord
Abbett in 1992, Mr. Brown was Executive Vice President of Equitable Capital
Management Corporation. He has over 18 years of investment experience.
Lord Abbett has entered into an agreement with Dunedin Fund Managers
Limited (the Sub-Adviser), under which the Sub-Adviser provides Lord Abbett with
advice with respect to that portion of the Funds assets invested in countries
other than the United States (the foreign assets). The Sub-Adviser is controlled
by the Bank of Scotland which indirectly owns 50.5% of the outstanding voting
stock of the Sub-Adviser. The Sub-Adviser and its predecessors date back 122
years to 1873 and it manages about $8 billion which is invested globally. The
Sub-Adviser furnishes Lord Abbett with advice and recommendations with respect
to the foreign assets, including advice on the allocation of investments among
foreign securities markets and foreign equity and debt securities and, subject
to consultation with Lord Abbett, advice as to cash holdings and what securities
in the portfolios of foreign assets should be purchased, held or disposed of.
The Sub-Adviser also gives advice with respect to foreign currency matters.
Subject to the direction of the Board of Directors, Lord Abbett, in
consultation with the Sub-Adviser, will determine at least quarterly, and more
frequently as Lord Abbett determines, the percentage of the assets of each
Series that shall be allocated (the Asset Allocation) for investment in the
United States and in foreign markets, respectively.
Under the Management Agreement, the Fund is obligated to pay Lord Abbett a
monthly fee based on average daily net assets for each month at annual rates of
.75 of 1% for the Equity Series and .50 of 1% for the Income Series. For the
fiscal year ended December 31, 1994, Lord Abbett paid the Sub-Adviser a monthly
fee equal to one-half of Lord Abbett's fee as described above. For the fiscal
year ended December 31, 1994, the fees paid to Lord Abbett as a percentage of
average daily net assets for the Equity and Income Series were at the annual
rate of .75 of 1% and .50 of 1%, respectively. In addition, the Fund pays all
expenses not expressly assumed by Lord Abbett. The ratios of expenses, including
management fee expenses, to average net assets for the year ended December 31,
1994 were 1.56% and 1.02%, respectively, for the Equity and Income Series.
Each Series is contingently obligated to repay Lord Abbett for any fees and
expenses assumed by Lord Abbett to the extent that such repayments would not in
any year, when added to expenses actually incurred in that year, increase the
expense ratio above 1.5%, in the case of the Equity Series, or 1.3%, in the case
of the Income Series. While the Income Series has repaid its contingent
obligation to Lord Abbett, the entire amount of the contingent repayment
obligation remains outstanding for the Equity Series ($283,550 as of December
31, 1994). See the Statement of Additional Information.
8 DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
Net investment income is paid to Equity and Income Series shareholders
semi-annually and monthly, respectively, as a dividend. Dividends may be taken
in cash or reinvested in additional shares at net asset value without a sales
charge.
A long-term capital gains distribution is made by a Series when it has net
profits during the year from sales of securities which a Series has held more
than one year. If a Series realizes net short-term capital gains, they also will
be distributed. Any capital gains distribution will be paid in December. You may
take the distribution in cash or reinvest it in additional shares at net asset
value without a sales charge.
Distributions (taxed as ordinary income) from gains attributable to changes
in exchange rates of foreign currencies will automatically be reinvested in
additional Series shares at net asset value unless a shareholder elects to take
capital gains distributions in cash.
Supplemental dividends and distributions also may be paid in December or
January. Dividends and distributions declared in October, November or December
of any year to shareholders of record as of a date in such a month will be
treated for federal income tax purposes as having been received by shareholders
in that year if they are paid before February 1 of the following year.
We intend to continue to meet the requirements of Subchapter M of the
Internal Revenue Code with respect to each Series. We will try to distribute to
shareholders all our net investment income and net realized capital gains so as
<PAGE>
to avoid the necessity of the Fund paying federal income tax. Shareholders,
however, must report dividends and capital gains distributions as taxable
income. Distributions derived from net long-term capital gains which are
designated by a Series as capital gains dividends will be taxable to
shareholders as long-term capital gains, whether received in cash or shares,
regardless of how long a taxpayer held the shares. Under current law, net
long-term capital gains are taxed at the rates applicable to ordinary income,
except that the maximum rate for long-term capital gains for individuals is 28%.
Provisions of the Contract with America Tax Relief Act of 1995, that were
pending in Congress as of the date of this Prospectus, would have the effect of
reducing the federal income tax rate on capital gains. See Performance for a
discussion of the Income Series purchase of high-coupon securities at a premium
and the distributions to shareholders as ordinary income of all interest income
on those securities. This practice increases current income of the Income
Series, but may result in higher taxable income to the Income Series
shareholders than other portfolio management practices.
A Series may be subject to foreign withholding taxes which would reduce the
yield on its investments. Tax treaties between certain countries and the United
States may reduce or eliminate such taxes. Shareholders who are subject to
United States federal income tax may be entitled, subject to certain rules and
limitations, to claim a federal income tax credit or deduction for foreign
income taxes paid by a Series. See the Statement of Additional Information for
additional details.
Shareholders may be subject to a $50 penalty under the Internal Revenue
Code and we may be required to withhold and remit to the U.S. Treasury a portion
(31%) of any redemption or repurchase proceeds (including the value of shares
exchanged to another Lord Abbett-sponsored fund) and of any dividend or
distribution on any account where the payee (shareholder) failed to provide a
correct taxpayer identification number or to make certain required
certifications.
The Fund will inform shareholders of the federal tax status of each
dividend and distribution shortly after the end of each calendar year.
Shareholders should consult their tax advisers concerning applicable state and
local taxes as well as on the tax consequences of gains or losses from the
redemption or exchange of our shares.
9 REDEMPTIONS
To obtain the proceeds of an expedited redemption of $50,000 or less, you or
your representative with proper identification can telephone the Fund. The Fund
will not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine and will employ reasonable procedures to
confirm that instructions received are genuine, including requesting proper
identification, recording all telephone redemptions and mailing the proceeds
only to the named shareholder at the address appearing on the account
registration.
If you do not qualify for the procedures described above, to redeem shares
directly, send your request to Lord Abbett Global Fund, Inc. (P.O. Box 419100,
Kansas City, Missouri 64141) with signature(s) and any legal capacity of the
signer(s) guaranteed by an eligible guarantor, accompanied by any certificates
for shares to be redeemed and other required documentation. We will make payment
of the net asset value of the shares on the date the redemption order was
received in proper form. Payment will be made within seven days (such period to
be reduced to three business days on and after June 7, 1995). The Fund may
suspend the right to redeem shares for not more than seven days (or longer under
unusual circumstances as permitted by federal law). If you have purchased Fund
shares by check and subsequently submit a redemption request, redemption
proceeds will be paid upon clearance of your purchase check, which may take up
to 15 days. To avoid delays you may arrange for the bank upon which a check was
drawn to communicate to the Fund that the check has cleared. Shares also may be
redeemed by the Fund at net asset value through your securities dealer who, as
an unaffiliated dealer, may charge you a fee. If your dealer receives your order
prior to the close of the NYSE and communicates it to Lord Abbett, as our agent,
prior to the close of Lord Abbett's business day, you will receive the net asset
value of the shares being redeemed as of the close of the NYSE on that day. If
the dealer does not communicate such an order to Lord Abbett until the next
business day, you will receive the net asset value as of the close of the NYSE
on that next business day.
Shareholders who have redeemed their shares have a one-time right to
reinvest into another account having the identical registration, in any of the
Eligible Funds, at
<PAGE>
the then applicable net asset value of the shares being purchased without the
payment of a sales charge. Such reinvestment must be made within 60 days of the
redemption and is limited to no more than the dollar amount of the redemption
proceeds. nder certain circumstances and subject to prior written notice, the
Funds Board of Directors may authorize redemption of all of the shares in any
account in which there are fewer than 25 shares.
TAX-QUALIFIED PLANS: For redemptions of $50,000 or less follow normal
redemption procedures. Redemptions over $50,000 must be in writing from the
employer, broker or plan administrator stating the reason for the redemption.
The reason for the redemption must be received by the Fund prior to, or
concurrent with, the redemption request.
10 PERFORMANCE
The Equity Series closed fiscal 1994 on December 31 with a per-share net asset
value of $11.55. The Series declared dividends totaling $.10 per share for the
year and a capital gains distribution of $.7775. The Series posted a total
return of -0.1% for the year.
1994 was a turbulent year for global equity and fixed-income markets.
Against a background of rapidly rising global interest rates, growing political
uncertainty in China, Russia and Mexico, and rapid currency devaluations in
certain emerging markets in the second half of the year, the Equity Series
concentrated on the more mature markets in the U.S., Japan and Europe in an
effort to minimize portfolio volatility.
While bond markets have stabilized and rallied in the first quarter of
1995, foreign equity markets have become more volatile in the face of a
significant drop in the dollar. In response to these developments, the Equity
Series has reduced its holdings in Japan and Germany and increased its
commitment in the U.S. Our focus in the U.S. is on large multinational companies
that were low-cost producers even before the latest decline in the U.S. dollar.
The Income Series ended fiscal 1994 on December 31 with a per-share net
asset value of $7.98. Based on this net asset value and the monthly dividend of
$.055 per share annualized, the Series distribution rate was 8.27%; based on the
December 31 maximum offering price of $8.38, this rate was 7.88%. The Series
total return was -3.4% for the fiscal year.
Despite rising global interest rates, the Income Series was able to produce
a positive return for the last six months of the fiscal year. Currency gains and
high-coupon income helped offset weak prices. Focus on the historically more
stable industrialized nations also allowed us to avoid the debacle of currency
devaluation that hit some emerging markets at year end.
We expect a more favorable interest rate environment in 1995 in the U.S.
and in other industrialized countries as a result of slowing U.S. economic
growth and low inflation. Industrialized countries may also benefit from a shift
of capital flows from emerging countries as investors reassess the risks
exemplified by the currency devaluation in Mexico.
Investor concerns about country deficits and political changes will
continue to be reflected in currency volatility. The Income Series continues its
investment in high-grade bonds seeking value in interest rates in industrialized
countries and expects to hedge currency exposure at appropriate opportunities.
YIELD AND TOTAL RETURN. Yield and total return data may, from time to time, be
included in advertisements about the Fund. Yield is calculated by dividing a
Series annualized net investment income per share during a recent 30-day period
by the maximum public offering price per share on the last day of that period.
The Funds yield reflects the deduction of the maximum initial sales charge and
reinvestment of all income dividends and capital gains distributions. Total
return for the one-, five- and life-of-fund periods represents the average
annual compounded rate of return on an investment of $1,000 in a Series at the
maximum public offering price. Total return also may be presented for other
periods or based on investment at reduced sales charge levels or net asset
value. Any quotation of total return not reflecting the maximum initial sales
charge would be reduced if such sales charge were used. Quotations of yield or
total return for any period when an expense limitation is in effect will be
Greater than if the limitation had not been in effect.
The Income Series dividend distribution rate differs from its SEC yield
primarily because the Income Series may purchase short- and intermediate-term
high-coupon securities at a premium and, consistent with applicable tax
regulations, distribute to shareholders all of the interest income on these
securities without amortizing the premiums. This practice also is used by the
Income Series for financial statement purposes and is in accordance with
generally accepted accounting principles. In other words, the Income Series may
pay more than face value for a security that pays a greater-than-market rate of
interest and then distribute all such interest as dividends. The principal
payable on the security at maturity will equal the security's face
<PAGE>
value, and so the market value of the security will gradually decrease to face
value, assuming no changes in the market rate of interest or in the credit
quality of the issuer. Shareholders of the Income Series should recognize that
such dividends will therefore tend to decrease the net asset value per share.
Dividends paid from this interest income are taxable to shareholders of the
Income Series at ordinary income tax rates.
The Income Series may make distributions in excess of net investment income
from time to time to provide more stable dividends. Such distributions could
cause slight decreases in net asset values over time, but historically have not
resulted in a return of capital for tax purposes.
See Past Performance in the Statement of Additional Information for a more
detailed discussion concerning the computation of each Series total return and
yield.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN
WHICH SUCH OFFER IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER IS
NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN SUPPLEMENTAL SALES
MATERIAL AUTHORIZED BY THE FUND AND NO PERSON IS ENTITLED TO RELY UPON ANY
INFORMATION OR REPRESENTATION NOT CONTAINED HEREIN OR THEREIN.
<PAGE>
Comparison of change in value of a $10,000 investment in Lord Abbett Global Fund
Equity Series, assuming reinvestment of all dividends and distributions, and the
Morgan Stanley World Index.
<TABLE>
<CAPTION>
FUND FUND
AT AT MORGAN
NET MAXIMUM STANLEY
ASSET OFFERING WORLD
DATE VALUE PRICE INDEX
---- ------ -------- ----------
<S> <C> <C> <C>
09-30-88 $10,000 $10,000
12-31-88 10,437 $ 9,837 11,143
12-31-89 12,288 11,582 13,059
12-31-90 10,798 10,178 10,901
12-31-91 12,392 11,681 12,969
12-31-92 12,178 11,478 12,365
12-31-93 15,351 14,469 15,225
12-31-94 15,337 14,456 16,075
<FN>
(1)Data reflects the deduction of the maximum sales charge of 5.75%.
(2)Performance numbers for the unmanaged Morgan Stanley World Index do not
reflect transaction costs or management fees. An investor cannot invest
directly in the Index.
(3)Total return is the percent change in value, after deduction of the maximum
sales charge of 5.75%, with all dividends and distributions reinvested for
the periods shown ending December 31, 1994 using the SEC-required uniform
method to compute such return.
</FN>
</TABLE>
Comparison of change in value of a $10,000 investment in Lord Abbett Global Fund
Income Series, assuming reinvestment of all dividends and distributions, and the
J.P. Morgan Global Government Bond Index.
<TABLE>
<CAPTION>
FUND FUND J.P.
AT AT MORGAN
NET MAXIMUM GLOBAL
ASSET OFFERING GOV'T BOND
DATE VALUE PRICE INDEX
---- ------ -------- ----------
<S> <C> <C> <C>
09-30-88 $10,000 $10,000
12-31-88 10,141 $ 9,659 10,422
12-31-89 11,214 10,682 11,132
12-31-90 12,546 11,950 12,442
12-31-91 14,344 13,662 14,363
12-31-92 15,169 14,449 15,016
12-31-93 16,806 16,007 16,075
12-31-94 16,235 15,463 17,074
<FN>
(1)Data reflects the deduction of the maximum sales charge of 4.75%.
(2)Performance numbers for the unmanaged J.P. Morgan Global Government Bond
Index do not reflect transaction costs or management fees. An investor cannot
invest directly in the Index.
(3)Total return is the percent change in value, after deduction of the maximum
sales charge of 4.75%, with all dividends and distributions reinvested for
the periods shown ending December 31, 1994 using the SEC-required uniform
method to compute such return.
</FN>
</TABLE>
<PAGE>
UNDERWRITER AND INVESTMENT MANAGER
Lord, Abbett & Co.
The General Motors Building
767 Fifth Avenue
New York, New York 10153-0203
212-848-1800
CUSTODIAN
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10005
TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT
United Missouri Bank of Kansas City, N.A.
Tenth and Grand
Kansas City, Missouri 64141
SHAREHOLDER SERVICING AGENT
DST Systems, Inc.
P.O. Box 419100
Kansas City, Missouri 64141
800-821-5129
AUDITORS
Deloitte & Touche LLP
COUNSEL
Debevoise & Plimpton
Printed in the U.S.A.
LAG-1-595
<PAGE>
LORD ABBETT
GLOBAL FUND, INC.
THE GENERAL MOTORS BUILDING
767 FIFTH AVENUE
NEW YORK, NY 10153-0203
LORD
ABBETT
MAY 1 95
- ---------
APPLICATION
INSIDE
LORD
ABBETT
GLOBAL
FUND
A GLOBALLY DIVERSIFIED MUTUAL FUND WITH TWO DISTINCT PORTFOLIOS, EACH SEEDING
ITS OBJECTIVE CONSISTENT WITH REASONABLE RISK.
EQUITY SERIES-
LONG-TERM GROWTH OF CAPITAL AND, SECONDARILY, INCOME
INCOME SERIES-
HIGH CURRENT INCOME AND, SECONDARILY, CAPITAL APPRECIATION.
<PAGE>
LORD ABBETT
STATEMENT OF ADDITIONAL INFORMATION MAY 1, 1995
LORD ABBETT
GLOBAL FUND, INC.
- ------------------------------------------------------------------------------
This Statement of Additional Information is not a Prospectus. A Prospectus may
be obtained from your securities dealer or from Lord, Abbett & Co. at The
General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203. This
Statement relates to, and should be read in conjunction with, the Prospectus
dated May 1, 1995.
The Fund was incorporated under Maryland law on February 23, 1988. The Fund's
Board of Directors has authority to classify its shares of common stock into
separate Series without further action by shareholders. To date, 100,000,000
shares of the Equity Series and 100,000,000 shares of the Income Series have
been designated by the Board of Directors. Although no present plans exist,
further series may be added in the future. The Investment Company Act of 1940
(the "Act") requires that where more than one series exists, each series must be
preferred over all other series with respect to assets specifically allocated to
such series. Unless otherwise stated, use of the word Fund in this Statement of
Additional Information will mean both Series.
Rule 18f-2 under the Act provides that any matter required to be submitted by
the provisions of the Act or applicable state law, or otherwise, to the holders
of the outstanding voting securities of an investment company, such as the Fund,
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each Series affected by such
matter. Rule 18f-2 further provides that a Series shall be deemed to be affected
by a matter unless the interests of each Series in the matter are identical or
the matter does not affect any interest of such Series. However, the Rule
exempts from these separate voting requirements the selection of independent
public accountants, the approval of principal distributing contracts and the
election of directors.
Shareholder inquiries should be made by writing directly to the Fund or by
calling 800-821-5129. In addition, you can make inquiries through your dealer.
TABLE OF CONTENTS
1. Investment Objectives and Policies 2
2. Directors and Officers 6
3. Investment Advisory and Other Services 8
4. Portfolio Transactions 10
5. Purchases, Redemptions
and Shareholder Services 11
6. Past Performance 16
7. Taxes 17
8. Information About the Fund 18
9. Financial Statements 18
10. Appendix 18
<PAGE>
1.
Investment Objectives and Policies
The Fund's investment objectives and policies are described in the Prospectus
under "Investment Objectives and Policies." In addition to those investment
objectives, each Series is subject to the following investment restrictions
which cannot be changed without approval of a majority of the outstanding shares
of such Series. Neither Series may: (1) sell short securities or buy securities
or evidences of interests therein on margin, although it may obtain short-term
credit necessary for the clearance of purchases of securities; (2) buy or sell
put or call options, although it may buy, hold or sell rights or warrants,
utilize various foreign currency hedging techniques, and it may write covered
call options and enter into closing purchase transactions as discussed below;
(3) borrow money except as a temporary measure for extraordinary or emergency
purposes, and then not in excess of 5% of its net assets at the time of
borrowing; (4) invest knowingly in securities or other assets not readily
marketable at the time of purchase or subject to legal or contractual
restrictions on resale except as described under "Restricted or Not Readily
Marketable Securities" below; (5) act as underwriter of securities issued by
others, unless it is deemed to be one in selling a portfolio security requiring
registration under the Securities Act of 1933, such as those described under
"Restricted or Not Readily Marketable Securities" below; (6) lend money or
securities to any person except that it may enter into short-term repurchase
agreements with sellers of securities it has purchased, and it may lend its
portfolio securities to registered broker-dealers where the loan is 100% secured
by cash or its equivalent as long as it complies with regulatory requirements
and the Fund deems such loans not to expose the Series to significant risk
(investment in repurchase agreements exceeding 7 days and in other illiquid
investments is limited to a maximum of 5% of a Series' assets); (7) pledge,
mortgage or hypothecate its assets; however, this provision does not apply to
permitted borrowing mentioned above or to the grant of escrow receipts or the
entry into other similar escrow arrangements arising out of the writing of
covered call options; (8) buy or sell real estate including limited partnership
interests therein (except securities of companies, such as real estate
investment trusts, that deal in real estate or interests therein), or oil, gas
or other mineral leases, commodities or commodity contracts in the ordinary
course of its business, except such interests and other property acquired as a
result of owning other securities, though securities will not be purchased in
order to acquire any of these interests; (9) invest more than 5% of its gross
assets, taken at market value at the time of investment, in companies (including
their predecessors) with less than three years' continuous operation; (10) buy
securities if the purchase would then cause a Series to have more than 5% of its
gross assets at market value at the time of purchase, invested in securities of
any one issuer, except (i) securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities which may be purchased in any
amounts and (ii) securities issued or guaranteed by foreign governments, their
agencies or instrumentalities which securities (apart from those of any issuer
totalling 5% or less of the Series' gross assets at market value at the time of
purchase) cannot aggregate more than 25% of the Series' gross assets at market
value at the time of purchase; (11) buy voting securities if the purchase would
then cause a Series to own more than 10% of the outstanding voting stock of any
one issuer; (12) own securities in a company when any of its officers, directors
or security holders is an officer or director of the Fund or an officer,
director or partner of our investment manager or Sub-Adviser, if after the
purchase any of such persons owns beneficially more than 1/2 of 1% of such
securities and such persons together own more than 5% of such securities; (13)
concentrate its investments in any particular industry, but if deemed
appropriate for attainment of its investment objective, up to 25% of its gross
assets (at market value at the time of investment) may be invested in any one
industry classification we use for investment purposes; or (14) buy securities
from or sell them to our officers, directors, or employees, or to our investment
adviser or Sub-Adviser or to their partners, directors and employees, other than
capital stock of the Fund.
OTHER INVESTMENTS. Except for the Fund's investment objectives as described in
the Prospectus and the Fund's investment restrictions described above in this
Statement of Additional Information, both under the same heading "Investment
Objectives and Policies," all of the Fund's investment policies and
restrictions, including those described below under this heading applicable to
each Series, can be changed without the approval of a majority of the
outstanding shares of the affected Series.
2
<PAGE>
PORTFOLIO TURNOVER RATE
For the years ended December 31, 1994 and 1993 our portfolio turnover rates were
75.39% and 197.59%, respectively, for the Equity Series and 1,230.20% and
1,599.43%, respectively, for the Income Series.
FOREIGN CURRENCY HEDGING TECHNIQUES
The Fund may utilize various foreign currency hedging techniques described
below, including forward foreign currency contracts and foreign currency put and
call options.
FORWARD FOREIGN CURRENCY CONTRACTS. A forward foreign currency contract involves
an obligation to purchase or sell a specific amount of a specific currency at a
set price at a future date. The Fund expects to enter into forward foreign
currency contracts in primarily two circumstances. First, when the Fund enters
into a contract for the purchase or sale of a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security. By
entering into a forward contract for the purchase or sale of the amount of
foreign currency involved in the underlying security transaction, the Fund will
be able to protect against a possible loss resulting from an adverse change in
the relationship between the U.S. dollar and the subject foreign currency during
the period between the date the security is purchased or sold and the date on
which payment is made or received.
Second, when management believes that the currency of a particular foreign
country may suffer a decline against the U.S. dollar, the Fund may enter into a
forward contract to sell the amount of foreign currency approximating the value
of some or all of the Fund's portfolio securities denominated in such foreign
currency or, in the alternative, the Fund may use a cross-hedging technique
whereby it sells another currency which the Fund expects to decline in a similar
way but which has a lower transaction cost. Precise matching of the forward
contract amount and the value of the securities involved will not generally be
possible since the future value of such securities denominated in foreign
currencies will change as a consequence of market movements in the value of
those securities between the date the forward contract is entered into and the
date it matures. The Fund does not intend to enter into such forward contracts
under this second circumstance on a continuous basis.
FOREIGN CURRENCY PUT AND CALL OPTIONS. The Fund may also purchase foreign
currency put options and write foreign currency call options on U.S. exchanges
or U.S. over-the-counter markets. A put option gives the Fund, upon payment of a
premium, the right to sell a currency at the exercise price until the expiration
of the option and serves to insure against adverse currency price movements in
the underlying portfolio assets denominated in that currency.
Exchange-listed options markets in the United States include several major
currencies, and trading may be thin and illiquid. A number of major investment
firms trade unlisted options which are more flexible than exchange-listed
options with respect to strike price and maturity date. Unlisted options
generally are available in a wider range of currencies, including those of most
of the developed countries mentioned under "Investment Objectives and Policies"
in the Prospectus. Unlisted foreign currency options are generally less liquid
than listed options and involve the credit risk associated with the individual
issuer. Unlisted options are subject to a limit of 5% of each Series' net assets
illiquid securities.
A call option written by the Fund gives the purchaser, upon payment of a
premium, the right to purchase from the Fund a currency at the exercise price
until the expiration of the option. The Fund may write a call option on a
foreign currency only in conjunction with a purchase of a put option on that
currency. Such a strategy is designed to reduce the cost of downside currency
protection by limiting currency appreciation potential. The face value of such
writing may not exceed 90% of the value of the securities denominated in such
currency invested in by the Fund or in such cross currency (referred to above)
to cover such call writing.
3
<PAGE>
INVESTMENT TECHNIQUES
The Fund intends to utilize, from time to time, one or more of the investment
techniques described below, including covered call options, rights and warrants
and repurchase agreements. It is the Fund's current intention that no more than
5% of each Series' net assets will be at risk in the use of any one of such
investment techniques. While some of these techniques involve risk when utilized
independently, the Fund intends to use them to reduce risk and volatility in its
portfolios.
COVERED CALL OPTIONS. Each Series may write call options on securities it owns
(covered "call options"), provided that the securities held to cover such call
options do not represent more than 5% of a Series' net assets. A call option on
stock gives the purchaser of the option, upon payment of a premium to the writer
of the option, the right to call upon the writer to deliver a specified number
of shares of a stock on or before a fixed date at a predetermined price.
The writing of call options will, therefore, involve a potential loss of
opportunity to sell securities at higher prices. In exchange for the premium
received. The writer of a fully collateralized call option gives up the gain
possibility of the underlying stock beyond the call price and continues to have
the downside risk of such securities. In addition, in exchange for the premium
received, the writer of the call gives up the gain possibility of the stock
appreciating above the call price. While an option that has been written is in
force, the maximum profit that may be derived from the optioned stock is the sum
of the premium less brokerage commissions and fees plus the difference between
the strike price of the call and the market price of the underlying security.
Each Series will not use call options on individual equity securities traded on
foreign securities markets.
The Fund's custodian will segregate cash or liquid high-grade debt securities in
an amount not less than that required by SEC Release 10666 with respect to each
Series' assets committed to (a) forward foreign currency contracts and (b) cross
hedges. If the value of the segregated securities declines, additional cash or
debt securities will be added on a daily basis (i.e., marked to market) so that
the segregated amount will not be less than the amount of each Series'
commitments with respect to such forward contracts and cross hedges.
RIGHTS AND WARRANTS. Each Series may invest in rights and warrants to purchase
securities. Included within that amount, but not to exceed 2% of the value of
the Series' net assets, may be warrants which are not listed on the New York
Stock Exchange ("NYSE") or American Stock Exchange.
Rights represent a privilege offered to holders of record of issued securities
to subscribe (usually on a pro-rata basis) for additional securities of the same
class, of a different class, or of a different issuer, as the case may be.
Warrants represent the privilege to purchase securities at a stipulated price
and are usually valid for several years. Rights and warrants generally do not
entitle a holder to dividends or voting rights with respect to the underlying
securities, nor do they represent any rights in the assets of the issuing
company.
Also, the value of a right or warrant may not necessarily change with the value
of the underlying securities and rights and warrants cease to have value if they
are not exercised prior to their expiration date.
REPURCHASE AGREEMENTS. Each Series may enter into repurchase agreements with
respect to a security. A repurchase agreement is a transaction by which the
Series acquires a security and simultaneously commits to resell that security to
the seller (a bank or securities dealer) at an agreed-upon price on an
agreed-upon date. The resale price reflects the purchase price plus an
agreed-upon market rate of interest which is unrelated to the coupon rate or
date of maturity of the purchased security. In this type of transaction, the
securities purchased by the Fund have a total value in excess of the value of
the repurchase agreement. Each Series requires at all times that the repurchase
agreement be collateralized by cash or U.S. Government securities having a value
equal to, or in excess of, the value of the repurchase agreement. Such
agreements permit the Series to keep all of its assets at work while retaining
flexibility in pursuit of investments of a longer-term nature.
4
<PAGE>
The use of repurchase agreements involves certain risks. For example, if the
seller of the agreement defaults on its obligation to repurchase the underlying
securities at a time when the value of these securities has declined, a Series
may incur a loss upon their disposition. If the seller of the agreement becomes
insolvent and subject to liquidation or reorganization under the Bankruptcy Code
or other laws, a bankruptcy court may determine that the underlying securities
are collateral not within the control of the Series and are therefore subject to
sale by the trustee in bankruptcy. Even though the repurchase agreements may
have maturities of seven days or less, they may lack liquidity, especially if
the issuer encounters financial difficulties. While the Series acknowledges
these risks, it is expected that they can be controlled through stringent
selection criteria and careful monitoring procedures. Each Series intends to
limit repurchase agreements to transactions with dealers and financial
institutions believed by the Series to present minimal credit risks. Each Series
will monitor creditworthiness of the repurchase agreement sellers on an ongoing
basis.
RESTRICTED OR NOT READILY MARKETABLE SECURITIES
No more than 5% of the value of each Series may be invested in securities with
legal or contractual restrictions on resale (restricted securities), other than
repurchase agreements, and in securities which are not readily marketable
(including restricted securities, repurchase agreements with maturities of more
than seven days and over-the-counter options).
LENDING PORTFOLIO SECURITIES
Each Series may lend its portfolio securities to registered broker-dealers.
These loans, if and when made, may not exceed 15% of each Series' total assets.
Each Series' lending of securities will be collateralized by cash or marketable
securities issued or guaranteed by the U.S. Government or its agencies ("U.S.
Government securities") or other permissible means. The cash or instruments
collateralizing each Series' lending of securities will be maintained at all
times in an amount at least equal to the current market value of the loaned
securities. From time to time, a Series may allow a part of the interest
received with respect to the investment of collateral to be paid to the borrower
and/or a third party that is not affiliated with the Series and is acting as a
"placing broker." No fee will be paid to affiliated persons of a Series.
By lending portfolio securities, a Series can increase its income by continuing
to receive interest on the loaned securities as well as by either investing the
cash collateral in permissible investments, such as U.S. Government securities,
or obtaining yield in the form of interest paid by a borrower when such U.S.
Government securities are used as collateral. Each Series will comply with the
following conditions whenever it lends securities: (i) the Series must receive
at least 100% collateral from the borrower; (ii) the borrower must increase the
collateral whenever the market value of the securities loaned rises above the
level of the collateral; (iii) the Series must be able to terminate the loan at
any time; (iv) the Series must receive reasonable compensation with respect to
the loan, as well as any dividends, interest or other distributions on the
loaned securities; (v) the Series may pay only reasonable fees in connection
with the loan; and (vi) voting rights on the loaned securities may pass to the
borrower, except that if a material event adversely affecting the investment in
the loaned securities occurs, the Fund's Board of Directors must terminate the
loan and regain the right to vote the securities.
INCOME SERIES ONLY
WHEN-ISSUED TRANSACTIONS
As stated in the Prospectus, the Income Series may purchase portfolio securities
on a when-issued basis. When-issued transactions involve a commitment by the
Income Series to purchase securities, with payment and delivery ("settlement")
to take place in the future, in order to secure what is considered to be an
advantageous price or yield at the time of entering into the transaction. When
the Income Series enters into a when-issued purchase, it becomes obligated to
purchase securities and it assumes all the rights and risks attendant to
ownership of a security, although settlement occurs at a later date. The value
of fixed-income securities to be delivered in the future will fluctuate as
interest rates vary. At the time the Income Series makes the commitment to
purchase a security on a when-issued basis, it will record the transaction and
reflect the liability for the purchase and the value of the security in
determining its net asset value. The Income Series generally has the ability to
close out a purchase obligation on or before the settlement date, rather than
take delivery of the security. Under no circumstances will settlement for such
securities take place more than 120 days after the purchase date.
5
<PAGE>
2.
Directors and Officers
The following directors are partners of Lord, Abbett & Co., The General Motors
Building, 767 Fifth Avenue, New York, New York 10153-0203. They have been
associated with Lord Abbett for over five years and are also officers and/or
directors or trustees of the fifteen other Lord Abbett-sponsored funds. They are
"interested persons" as defined in the Act, and as such, may be considered to
have an indirect financial interest in the Rule 12b-1 Plan described in the
Prospectus.
Ronald P. Lynch, age 59, President and Chairman
Thomas S. Henderson, age 63, Vice President
The following outside directors are also directors or trustees of the fifteen
other Lord Abbett-sponsored funds referred to above except for Lord Abbett
Research Fund, Inc., of which only Messrs. Millican and Neff are directors.
E. Thayer Bigelow
Time Warner Cable
300 First Stamford Place
Stamford, Connecticut
President and Chief Executive Officer of Time Warner Cable Programming, Inc.
Formerly President and Chief Operating Officer of Home Box Office, Inc. Age 53.
Stewart S. Dixon
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois
Partner in the law firm of Wildman, Harrold, Allen & Dixon. Age 64.
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 69.
C. Alan MacDonald
The Marketing Partnership, Inc.
27 Signal Road
Stamford, Connecticut
General Partner, The Marketing Partnership, Inc., a full service marketing
consulting firm that specializes in strategic planning and customer specific
marketing. Formerly Acquisition Consultant, The Noel Group, a private consulting
firm (1994). Formerly Chairman and Chief Executive Officer of Lincoln Foods,
Inc., manufacturer of branded snack foods (1992- 1994). Formerly President and
Chief Executive Officer of Nestle Foods Corporation, a subsidiary of Nestle S.A.
(Switzerland). Age 61.
6
<PAGE>
Hansel B. Millican, Jr.
Rochester Button Company
1100 Noblin Avenue
South Boston, Virginia
President and Chief Executive Officer of Rochester Button Company. Age 65.
Thomas J. Neff
Spencer Stuart & Associates
277 Park Avenue
New York, New York
President of Spencer Stuart & Associates, an executive search consulting firm.
Age 57.
The second column of the following table sets forth the compensation accrued for
the Fund's outside directors. The third and fourth columns set forth information
with respect to the retirement plans for outside directors maintained by the
Lord Abbett-sponsored funds. The fifth column sets forth the total compensation
payable by such funds to the outside directors. The information provided is for
the fiscal year ended December 31, 1994. 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 THE FISCAL YEAR ENDED DECEMBER 31, 1994
(1) (2) (3) (4) (5)
Pension or Estimated Annual
Retirement Benefits Benefits Upon
Accrued as Expenses Retirement Proposed Total Compensation
by the Fund to be Paid by the Fund Accrued by the Fund and
Aggregate and Fifteen Other and Fifteen Other Fifteen Other Lord
Compensation Lord Abbett-sponsored Lord Abbett-sponsored Abbett-sponsored
Name of Director from the Fund (1) Funds (2) Funds(2) Funds (3)
---------------- ----------------- --------------------- ---------------------- ------------------------
<S> <C> <C> <C> <C>
E. Thayer Bigelow 4 $243 None $33,600 $8,400
Thomas F. Creamer 5 $907 $27,578 $33,600 $29,650
Stewart S. Dixon $1,209 $22,595 $33,600 $43,600
John C. Jansing $1,178 $28,636 $33,600 $42,500
C. Alan MacDonald $1,151 $27,508 $33,600 $41,500
Hansel B. Millican, Jr. $1,158 $24,842 $33,600 $41,750
Thomas J. Neff $1,142 $16,214 $33,600 $41,200
<FN>
1. Outside directors' fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored funds based on net
assets of each fund. Fees payable by the Fund to its outside 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 amounts
accrued by the Fund for the year ended December 31, 1994, are as set forth
after each outside Director's name above. The total amount accrued for each
outside Director since the beginning of his tenure with the Fund, together
with dividends reinvested and changes in net asset value applicable to such
deemed investments, were as follows as of December 31, 1994: Mr. Bigelow,
$243; Mr. Creamer, $4,606; Mr. Dixon, $5,021; Mr. Jansing, $4,976; Mr.
MacDonald, $4,990; Mr. Millican, $5,022; and Mr. Neff, $4,992.
2. Each Lord Abbett-sponsored fund has a retirement plan providing that
outside 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, except in the case of Mr. Creamer, would be payable
annually under such retirement 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 accrued in column 3 were accrued by the Lord
Abbett-sponsored funds during the fiscal year ended December 31, 1994 with
respect to the retirement benefits in column 4.
7
<PAGE>
3. This column shows aggregate compensation, including director's fees and
attendance fees for board and committee meetings, of a nature referred to
in footnote one, accrued by the Lord Abbett-sponsored funds during the year
ended December 31, 1994.
4. Mr. Bigelow was elected a director of the Fund on October 19, 1994.
5. Mr. Creamer retired as a director of the Fund effective September 21, 1994.
The stated amount of his retirement income (column 4) is the annual amount
payable to him by the Lord Abbett-sponsored funds before reduction for a
joint-and-survivor spousal benefit.
</FN>
</TABLE>
Except where indicated, the following executive officers of the Fund have been
associated with Lord Abbett for over five years. Of the following, Messrs.
Allen, Carper, Cutler, Dow, Henderson, Nordberg and Walsh are partners of Lord
Abbett; the others are employees: Kenneth B. Cutler, age 62, Vice President and
Secretary; E. Wayne Nordberg, age 57, Executive Vice President; Zane E. Brown,
age 44, Executive Vice President; Stephen I. Allen, age 41, Daniel E. Carper
age, 43, Robert S. Dow, age 50, Thomas S. Henderson, age 63, John J. Walsh, age
58, Jeffery H. Boyd, age 38 (with Lord Abbett since 1994 - formerly partner in
the law firm of Robinson & Cole), John J. Gargana, Jr., age 63, Thomas F. Konop,
age 53, Victor W. Pizzolato, age 62, Vice Presidents; and Keith F. O'Connor, age
39, Treasurer.
The Fund's By-Laws provide that the Fund shall not hold an annual meeting of its
stockholders in any year unless one or more matters are required to be acted on
by stockholders under the Investment Company Act of 1940, as amended (the
"Act"), or unless called by a majority of the Board of Directors or by
stockholders holding at least one quarter of the stock of the Fund outstanding
and entitled to vote at the meeting. When any such annual meeting is held, the
stockholders will elect directors and vote on the approval of the independent
auditors of the Fund.
As of April 1, 1995, our officers and directors, as a group, owned less than 1%
of our outstanding shares.
3.
Investment Advisory and Other Services
As described under "Our Management" in the Prospectus, Lord Abbett is the Fund's
investment manager. The eight general partners of Lord Abbett, all of whom are
officers and/or directors of the Fund, are: Stephen I. Allen, Daniel E. Carper,
Kenneth B. Cutler, Robert S. Dow, Thomas S. Henderson, Ronald P. Lynch, E. Wayne
Nordberg and John J. Walsh. The address of each partner is The General Motors
Building, 767 Fifth Avenue, New York, New York 10153- 0203.
The services performed by Lord Abbett are described in the prospectus under "Our
Management" in the Prospectus. Under the Management Agreement, we pay Lord
Abbett a monthly fee, based on average daily net assets for each month, at the
annual rate of .75 of 1% for the Equity Series and .50 of 1% for the Income
Series. Notwithstanding the above, Lord Abbett may, but is not required to,
waive its fee or directly pay all or any portion of the expenses of either
Series not expressly assumed by Lord Abbett under the Management Agreement. Each
Series is contingently obligated through October 31, 1998 (or the earlier
termination of the Management Agreement) to repay its respective fees and
expenses voluntarily waived or paid by Lord Abbett to the extent such repayments
would not in any year, when added to expenses actually incurred in that year,
increase the expense ratio above 1.5%, in the case of the Equity Series, or
1.3%, in the case of the Income Series. The expense ratios for the Income Series
for fiscal 1993 and 1994 were 1.04% and 1.02%, respectively. All contingent
obligations have been repaid to Lord Abbett by the Income Series. The expense
ratios for the Equity Series were 1.68% and 1.56% during fiscal 1993 and 1994,
respectively. Accordingly, that Series did not have to make any repayment to
Lord Abbett and the entire amount of its contingent obligation, $283,550,
remains outstanding.
We pay all expenses not expressly assumed by Lord Abbett, including without
limitation 12b-1 expenses, outside directors' fees and expenses, association
membership dues, legal and auditing fees, taxes, transfer and dividend
disbursing agent fees, shareholder servicing costs, expenses relating to
shareholder meetings, expenses of preparing, printing and mailing stock
8
<PAGE>
<PAGE>
certificates and shareholder reports, expenses of registering our shares under
federal and state securities laws, expenses of preparing, printing and mailing
prospectuses to existing shareholders, insurance premiums, brokerage and other
expenses connected with executing portfolio transactions.
The State of California limits operating expenses (including management fees but
excluding taxes, interest, extraordinary expenses and brokerage commissions) to
2 1/2% of average annual net assets up to $30,000,000, 2% of the next
$70,000,000 of such assets and 1 1/2% of such assets in excess of $100,000,000.
This expense limitation is a condition of registration of investment company
shares in that state and has been modified pursuant to an order of the State
Securities Commissioner in its application to the Fund. The expense limitation
as modified applies so long as our shares are registered for sale in that state.
Lord Abbett has entered into an agreement with Dunedin Fund Managers Limited
(the "Sub-Adviser"), under which the Sub- Adviser provides Lord Abbett with
advice with respect to that portion of the Fund's assets invested in countries
other than the United States, as more particularly described in the Prospectus.
The Sub-Adviser, with offices located at Dunedin House, 25 Ravelston Terrace,
Edinburgh EH4 3EX Scotland, and its predecessors date back 122 years to 1873.
The Sub-Adviser is controlled by the Bank of Scotland, which indirectly owns a
majority of the Sub-Adviser's outstanding voting stock. The Sub-Adviser provides
international investment research and advisory services to private and
institutional clients, investment trusts, pension clients and unit trusts both
in the United Kingdom and overseas. The Sub-Adviser currently manages about $8
billion, and its investment and administrative staffs have substantial global
investment management experience.
Securities held by either Series of the Fund may also be held by other funds or
investment advisory clients for which Lord Abbett or the Sub-Adviser or their
affiliates provide investment advice. Because of different investment objectives
or other factors, a particular security may be bought for one or more funds or
clients when one or more other funds or clients are selling the same security.
If opportunities for purchase or sale of securities by Lord Abbett or the
Sub-Adviser for the Fund or for other funds or clients for which they render
investment advice arise for consideration at or about the same time,
transactions in such securities will be made insofar as feasible for the
respective funds or clients in a manner deemed equitable to all of them. To the
extent that transactions on behalf of more than one client of Lord Abbett, the
Sub-Adviser or their affiliates may increase the demand for securities being
purchased or the supply of securities being sold, there may be an adverse effect
on price.
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281 are
the independent auditors of the Fund and must be approved at least annually by
our Board of Directors to continue in such capacity. They perform audit services
for the Fund including the examination of financial statements included in our
annual report to shareholders.
Morgan Guaranty Trust Company of New York ("Morgan"), 60 Wall Street, New York,
New York 10005, is the Fund's custodian. Rules adopted by the Securities and
Exchange Commission under the Act permit the Fund to maintain its foreign assets
in the custody of certain eligible foreign banks and securities depositories.
The Fund's portfolio securities and cash, when invested in foreign securities
and not held by Morgan or its foreign branches, are held by sub-custodians of
Morgan approved by the Board of Directors of the Fund in accordance with such
rules.
The Sub-Custodians of Morgan are:
Euro-Clear (a transnational securities depository); Australia: ANZ Banking
Group; Austria: Creditanstalt-Bankverein; Canada: Canadian Imperial Bank of
Commerce; Chile: Citibank, N.A.; Czech Republic: Ceskoslovenska Obchodni Banka;
Denmark: Den Danske Bank; Finland: Union Bank of Finland; Germany: J.P. Morgan
GmbH; Greece: National Bank of Greece S.A.; Hong Kong, Indonesia, Philippines,
Taiwan and Thailand: Hong Kong & Shanghai Banking Corp.; Hungary: Citibank
Budapest Rt; India: Hong Kong and Shanghai Banking Corporation; Ireland: Allied
Irish Banks, PLC; Israel: Bank Leumi LE-Israel B.M.; Japan: The Fuji Bank, Ltd.;
Jordan: Citibank, N.A.; Korea: Bank of Seoul; Luxembourg: Banque Internationale
A Luxembourg, S.A.; Mexico: Citibank, N.A.; Morocco: Banque Commerciale du
9
<PAGE>
Maroc; Netherlands: Bank van Haften Labouchere; New Zealand: Anz Banking Group
Ltd.; Norway: Den Norske Bank; Pakistan: Citibank, N.A.; Peru: Citibank, N.A.;
Poland: Bank Handlowy w Warszawie S.A.; Portugal: Banco Espirito Santo E
Comercial de Lisboa; Malaysia, Singapore: Development Bank of Singapore; South
Africa: The First National Bank of Southern Africa; Sri Lanka: Hongkong and
Shanghai Banking Corporation; Sweden: Skandinaviska Enskilda Banken;
Switzerland: Bank Leu; Turkey: Citibank, N.A.; Venezuela: Citibank, N.A.
4.
Portfolio Transactions
With respect to the Income Series, purchases and sales of portfolio securities
usually will be principal transactions and normally such securities will be
purchased directly from the issuer or from an underwriter or market maker for
the securities. Therefore, the Income Series usually will pay no brokerage
commissions for such purchases. Purchases from underwriters of portfolio
securities will include a commission or concession paid by the issuer to the
underwriter and purchases from dealers serving as market makers will include a
dealer's markup. Principal transactions, including riskless principal
transactions, are not afforded the protection of the safe harbor in Section 28
(e) of the Securities Exchange Act of 1934.
The Fund's policy is to have purchases and sales of portfolio securities
executed at the most favorable prices, considering all costs of the transaction
including brokerage commissions and dealer markups and markdowns, consistent
with obtaining the best execution, except to the extent that we may pay a higher
commission as described below. This policy 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.
The Fund selects broker-dealers on the basis of their professional capability
and the value and quality of their brokerage and research services. Normally,
for domestic assets, the selection is made by the Fund's traders who are
officers of the Fund and also are employees of Lord Abbett. For foreign assets,
the selection is made by the Sub-Adviser. The Fund's 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 the negotiation of prices and commissions.
In transactions on stock exchanges in the United States, commissions are
negotiated, whereas on many foreign stock exchanges commissions are fixed. In
the case of securities traded in the foreign and domestic over-the-counter
markets, there is generally no stated commission, but the price usually includes
an undisclosed commission or markup. Purchases from underwriters of newly-issued
securities for inclusion in the Fund's portfolios usually will include a
concession paid to the underwriter by the issuer and purchases from dealers
serving as market makers will include the spread between the bid and asked
prices. The Fund may select a broker-dealer who may receive a commission for
portfolio transactions exceeding the amount another broker would have charged
for the same transaction if the Fund's traders determine that such amount is
reasonable in relation to the value of the brokerage and research services
performed by the executing broker viewed in terms of either the particular
transaction or the broker's overall responsibilities with respect to the Fund
and other accounts managed by Lord Abbett. Brokerage services may include such
factors as showing the Fund trading opportunities including blocks, 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, reliability and quotation and pricing services. Research
may include the furnishing of analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy and the
performance of accounts. Such research may be used by Lord Abbett in servicing
all their accounts, and not all of such research will necessarily be used by
Lord Abbett in connection with their services to the Fund; conversely, research
furnished in connection with brokerage of other accounts managed by Lord Abbett
may be used in connection with their services to the Fund, and not all of such
research will necessarily be used by Lord Abbett in connection with their
services to such other accounts. The Fund has been advised by Lord Abbett that,
although such research is often useful, no dollar value can be ascribed to it
nor can it be accurately ascribed or allocated to any account and it is not a
substitute for services provided by them to us; nor does it materially reduce or
10
<PAGE>
otherwise affect the expenses incurred by Lord Abbett in the performance of such
services. The Fund makes no commitments regarding the allocation of brokerage
business to or among dealers.
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 does, transactions will, to the extent practicable, be allocated
among all participating accounts in proportion to the amount of each order and
will be executed daily until filled so that each account shares the average
price and commission cost of each day.
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.
During the fiscal years ended December 31, 1992, 1993 and 1994, the Fund paid
total commissions to independent dealers of $304,255, $414,077 and $392,126
respectively.
5.
Purchases, Redemptions
and Shareholder Services
The Fund values its portfolio securities at their market values as of the close
of the NYSE. Market value will be determined as follows: securities listed or
admitted to trading privileges on any national or foreign securities exchange
are valued at the last sales price on the principal securities exchange on which
such securities are traded, or, if there is no sale on that day, at the mean
between the last bid and asked prices, or, in the case of bonds, in the
over-the-counter market if, in the judgment of the Fund's officers, that market
more accurately reflects the market value of the bonds. Over-the-counter
securities that are not traded on the NASDAQ National Market System are valued
at the mean between the last bid and asked price. Securities for which market
quotations are not available are valued at fair market value under procedures
approved by the Board of Directors.
Information concerning how each Series values its shares for the purchase and
redemption or repurchase of its shares is briefly described in the Prospectus
under "Purchases" and "Redemptions", respectively.
As disclosed in the Prospectus, each Series calculates its net asset value and
is otherwise open for business on each day that the NYSE is open for trading.
The NYSE is closed on Saturdays and Sundays and the following holidays: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
All assets and liabilities expressed in foreign currencies will be converted
into United States dollars at the mean between the buying and selling rates of
such currencies against United States dollars last quoted by any major bank. If
such quotations are not available, the rate of exchange will be determined in
accordance with policies established by the Board of Directors of the Fund. The
Board of Directors will monitor, on an ongoing basis, the Fund's method of
valuation.
Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed well before the close of business
on each business day in New York. In addition, European or Far Eastern
securities trading generally or in a particular country or countries may not
take place on all business days in New York. Furthermore, trading takes place in
various foreign markets on days which are not business days in New York and on
which the Series' net asset values are not calculated. Such calculation does not
take place contemporaneously with the determination of the prices of the
majority of the portfolio securities used in such calculation. Events affecting
the values of portfolio securities that occur between the time their prices are
determined and the close of the NYSE will not be reflected in the Series'
calculation of net asset values unless the Fund's Directors determine that the
particular event would materially affect net asset value, in which case an
adjustment will be made.
11
<PAGE>
The maximum offering prices of each Series' shares on December 31, 1994 were
computed as follows:
EQUITY INCOME
SERIES SERIES
------ ------
Net asset value per share (net assets
divided by shares outstanding) $11.55 $7.98
Maximum offering price per
share (net asset value divided by
.9425 and .9525, respectively)............ $12.25 $8.38
The Fund has entered into a distribution agreement with Lord Abbett under which
Lord Abbett is obligated to use its best efforts to find purchasers for the
shares of the Fund and to make reasonable efforts to sell Fund shares, so long
as, in Lord Abbett's judgment, a substantial distribution can be obtained by
reasonable efforts.
For the last three fiscal years Lord Abbett, as the Fund's principal
underwriter, received net commissions after allowance of a portion of the sales
charge to independent dealers as follows:
Equity Series
YEAR ENDED DECEMBER 31,
-----------------------
1994 1993 1992
---- ---- ----
Gross sales charge $540,318 $847,572 $227,453
Amount allowed
to dealers $465,423 $731,682 $197,112
-------- -------- --------
Net commissions
received by
Lord Abbett $ 74,895 $115,890 $30,341
======== ======== =======
Income Series
YEAR ENDED DECEMBER 31,
-----------------------
1994 1993 1992
---- ---- ----
Gross sales charge $1,577,68 $5,648,094 $2,546,984
Amount allowed
to dealers $1,357,207 $4,826,957 $2,182,169
---------- ---------- ----------
Net commissions
received by
Lord Abbett $ 220,479 $ 821,137 $ 364,815
========== ========== ==========
12
<PAGE>
As described in the Prospectus, the Fund has adopted a Distribution Plan and
Agreement (the "Plan") pursuant to Rule 12b-1 of the Act. In adopting the Plan
and in approving its continuance, the Board of Directors has concluded that
there is a reasonable likelihood that the Plan will benefit the Fund and its
shareholders. The expected benefits include greater sales and lower redemptions
of Fund shares, which should allow the Fund to maintain a consistent cash flow,
and a higher quality of service to shareholders by dealers than would otherwise
be the case. During the last fiscal year, the Fund accrued or paid through Lord
Abbett to dealers $187,306 for the Equity Series and $694,074 for the Income
Series under the Plan. Lord Abbett uses all amounts received under the Plan for
payments to dealers for (i) providing continuous services to the Fund's
shareholders, such as answering shareholder inquiries, maintaining records and
assisting shareholders in making redemptions, transfers, additional purchases
and exchanges and (ii) their assistance in distributing shares of the Fund.
The Plan requires the Board of Directors to review, on a quarterly basis,
written reports of all amounts expended pursuant to the Plan and the purpose for
which such expenditures were made. The Plan shall continue in effect only if its
continuance is specifically approved at least annually by vote of the Fund's
Board of Directors and of the Fund's directors who are not interested persons of
the Fund and who have no direct or indirect financial interest in the operation
of the Plan or in any agreements related to the Plan ("outside directors"), cast
in person at a meeting called for the purpose of voting on such Plan and
agreements. The Plan may not be amended to increase materially the amount spent
for distribution expenses without approval by a majority of the Fund's
outstanding voting securities and the approval of a majority of the directors,
including a majority of the Fund's outside directors. The Plan may be terminated
at any time by vote of a majority of the Fund's outside directors or by vote of
a majority of the Fund's outstanding voting securities.
As stated in the Prospectus, a 1% contingent deferred reimbursement charge
("CDRC") is imposed with respect to those Fund shares (or shares of another Lord
Abbett-sponsored fund or series acquired through exchange of such shares) on
which the Fund has paid the one-time 1% 12b-1 sales distribution fee if such
shares are redeemed out of the Lord Abbett-sponsored family of funds within 24
months from the end of the month in which the original sale occurred.
No CDRC is payable on redemptions by tax-qualified plans under section 401 of
the Internal Revenue Code for benefit payments due to plan loans, hardship
withdrawals, death, retirement or separation from service with respect to plan
participants. The CDRC is received by the Fund and is intended to reimburse all
or a portion of the amount paid by the Fund if the shares are redeemed before
the Fund has had an opportunity to realize the anticipated benefits of having a
large, long-term shareholder account in the Fund. Shares of a fund or series on
which such 1% sales distribution fee has been paid may not be exchanged into a
fund or series with a Rule 12b-1 plan for which the payment provisions have not
been in effect for at least one year.
The other Lord Abbett-sponsored funds and series which participate in the
Telephone Exchange Privilege (except Lord Abbett U.S. Government Securities
Money Market Fund, Inc. ("GSMMF") and certain series of Lord Abbett Tax-Free
Income Fund, Inc. and Lord Abbett Tax-Free Income Trust for which a Rule 12b-1
Plan is not yet in effect (collectively, the "Series")) have instituted a CDRC
on the same terms and conditions. No CDRC will be charged on an exchange of
shares between Lord Abbett funds. Upon redemption out of the Lord Abbett family
of funds the CDRC will be charged on behalf of and paid to the fund in which the
original purchase (subject to a CDRC) occurred. Thus, if shares of a Lord Abbett
fund are exchanged for shares of another such fund and the shares tendered
("Exchanged Shares") are subject to a CDRC, the CDRC will carry over to the
shares being acquired, including GSMMF ("Acquired Shares"). Any CDRC that is
carried over to Acquired Shares is calculated as if the holder of the Acquired
Shares had held those shares from the date on which he or she became the holder
of the Exchanged Shares. Although GSMMF and the Series will not pay a 1% sales
distribution fee on $1 million purchases of their own shares, and will therefore
not impose their own CDRC, GSMMF will collect the CDRC on behalf of other Lord
Abbett funds. Acquired shares held in GSMMF which are subject to a CDRC will be
credited with the time such shares are held in that fund.
In no event will the amount of the CDRC exceed 1% of the lesser of (i) the net
asset value of the shares redeemed or (ii) the original cost of such shares (or
of the Exchanged Shares for which such shares were acquired). No CDRC will be
imposed when the investor redeems (i) amounts derived from increases in the
value of the account above the total cost of shares being redeemed due to
increases in net asset value, (ii) shares with respect to which no Lord Abbett
fund paid a 1% sales distribution fee on issuance (including shares acquired
through reinvestment of dividend income and capital gains distributions) or
(iii) shares which, together with Exchanged Shares, have been held continuously
for 24 months from the end of the month in which the original sale occurred. In
determining whether a CDRC is payable,
13
<PAGE>
(a) shares not subject to the CDRC will be redeemed before shares subject to the
CDRC and (b) of shares subject to a CDRC, those held the longest will be the
first to be redeemed.
Under the terms of the Statement of Intention to invest $50,000 ($100,000 in the
case of the Income Series) or more over a 13-month period as described in the
Prospectus, shares of Lord Abbett-sponsored funds (other than shares of Lord
Abbett Equity Fund ("LAEF"), Lord Abbett Series Fund ("LASF"), Lord Abbett
Research Fund if not offered to the general public ("LARF"), and GSMMF, unless
holdings in GSMMF are attributable to shares exchanged from a Lord
Abbett-sponsored fund offered with a sales charge or from a fund in the Lord
Abbett Counsel Group) currently owned by you are credited as purchases (at their
current offering prices on the date the Statement is signed) toward achieving
the stated investment. Shares valued at 5% of the amount of intended purchases
are escrowed and may be redeemed to cover the additional sales charge payable if
the Statement is not completed. The Statement of Intention is neither a binding
obligation on you to buy, nor on the Fund to sell, the full amount indicated.
As stated in the Prospectus, purchasers (as defined in the Prospectus) may
accumulate their investment in Lord Abbett- sponsored funds (other than LAEF,
LARF, LASF, and GSMMF, unless holdings in GSMMF are attributable to shares
exchanged from a Lord Abbett-sponsored fund offered with a front-end sales
charge or from Lord Abbett Counsel Group) so that a current investment, plus the
purchaser's holdings valued at the current maximum offering price, reach a level
eligible for a discounted sales charge.
As stated in the Prospectus, the Series' shares may be purchased at net asset
value by our directors, employees of Lord Abbett or the Sub-Adviser, employees
of our shareholder servicing agent and employees of any securities dealer having
a sales agreement with Lord Abbett who consents to such purchases or by the
trustee or custodian under any pension or profit-sharing plan or Payroll
Deduction IRA established for the benefit of such persons or for the benefit of
employees of any national securities trade organization to which Lord Abbett
belongs or any company with an account(s) in excess of $10 million managed by
Lord Abbett on a private-advisory-account basis. For purposes of this paragraph,
the terms "directors" and "employees" include a director's or employee's spouse
(including the surviving spouse of a deceased director or employee). The terms
"our directors" and "employees of Lord Abbett or the Sub-Adviser" also include
other family members and retired directors and employees.
Our shares also may be purchased at net asset value (a) at $1 million or more,
(b) with dividends and distributions from other Lord Abbett-sponsored funds,
except for LARF, LAEF, LASF and Lord Abbett Counsel Group, (c) under the loan
feature of the Lord Abbett-sponsored prototype 403(b) plan for share purchases
representing the repayment of principal and interest, (d) by certain authorized
brokers, dealers, registered investment advisers or other financial institutions
who have entered into an agreement with Lord Abbett in accordance with certain
standards approved by Lord Abbett, providing specifically for the use of our
shares in particular investment products made available for a fee to clients of
such brokers, dealers, registered investment advisers and other financial
institutions, and (e) by employees, partners and owners of unaffiliated
consultants and advisors to Lord Abbett or Lord Abbett-sponsored funds who
consent to such purchase if such persons provide service to Lord Abbett or such
funds on a continuing basis and are familiar with such funds. Shares are offered
at net asset value to these investors for the purpose of promoting goodwill with
employees and others with whom Lord Abbett and/or the Fund have business
relationships.
Our shares also may be purchased at net asset value, subject to appropriate
documentation, through a securities dealer where the amount invested represents
redemption proceeds from shares ("Redeemed Shares") of a registered open-end
management investment company not distributed or managed by Lord Abbett (other
than a money market fund), if such redemption has occurred no more than 60 days
prior to the purchase of our shares, the Redeemed Shares were held for at least
six months prior to redemption and the proceeds of redemption were maintained in
cash or a money market fund prior to purchase. Purchasers should consider the
impact, if any, of contingent deferred sales charges in determining whether to
redeem shares for subsequent investment in our shares. Lord Abbett may suspend,
change or terminate this purchase option at any time.
14
<PAGE>
Our shares may be issued at net asset value in exchange for the assets, subject
to possible tax adjustment, of a personal holding company or an investment
company. There are economies of selling efforts and sales-related expenses with
respect to offers to these investors and those referred to above.
The Prospectus briefly describes the Telephone Exchange Privilege. You may
exchange some or all of your shares for those of Lord Abbett-sponsored funds
currently offered to the public with a sales charge and GSMMF, to the extent
offers and sales may be made in your state. You should read the prospectus of
the other fund before exchanging. In establishing a new account by exchange,
shares of the Fund being exchanged must have a value equal to at least the
minimum initial investment required for the fund into which the exchange is
made.
Shareholders in such other funds have the same right to exchange their shares
for the Fund's shares. Exchanges are based on relative net asset values on the
day instructions are received by the Fund in Kansas City if the instructions are
received prior to the close of the NYSE in proper form. No sales charges are
imposed except in the case of exchanges out of GSMMF (unless a sales charge was
paid on the initial investment). Exercise of the exchange privilege will be
treated as a sale for federal income tax purposes, and, depending on the
circumstances, a gain or loss may be recognized. In the case of an exchange of
shares that have been held for 90 days or less where no sales charge is payable
on the exchange, the original sales charge incurred with respect to the
exchanged shares will be taken into account in determining gain or loss on the
exchange only to the extent such charge exceeds the sales charge that would have
been payable on the acquired shares had they been acquired for cash rather than
by exchange. The portion of the original sales charge not so taken into account
will increase the basis of the acquired shares.
Shareholders have the exchange privilege unless they refuse it in writing. You
should not view the exchange privilege as a means for taking advantage of
short-term swings in the market, and we reserve the right to terminate or limit
the privilege of any shareholder who makes frequent exchanges. We can revoke or
modify the privilege for all shareholders upon 60 days' prior notice. "Eligible
Funds" are other Lord Abbett-sponsored funds which are eligible for the exchange
privilege, except LASF which offers its shares only in connection with certain
variable annuity contracts, LAEF which is not issuing shares, LARF if not
offered to the general public and Lord Abbett Counsel Group.
A redemption order is in proper form when it contains all of the information and
documentation required by the order form or supplementally by Lord Abbett or the
Fund to carry out the order. The signature(s) and any legal capacity of the
signer(s) must be guaranteed by an eligible guarantor. See the Prospectus for
expedited redemption procedures.
The right to redeem and receive payment, as described in the Prospectus, may be
suspended if the NYSE is closed (except for weekends or customary holidays),
trading on the NYSE is restricted or the Securities and Exchange Commission
deems an emergency to exist.
Our Board of Directors may authorize redemption of all of the shares in any
account in which there are fewer than 25 shares. Before authorizing such
redemption, the Board must determine that it is in our economic best interest or
necessary to reduce disproportionately burdensome expenses in servicing
shareholder accounts. At least six months prior written notice will be given
before any such redemption, during which time shareholders may avoid redemption
by bringing their accounts up to the minimum set by the Board.
Under the Div-Move service described in the Prospectus, you can invest the
dividends paid on your account into an existing account in any other Eligible
Fund. The account must be either your account, a joint account for you and your
spouse, a single account for your spouse, or a custodial account for your minor
child under the age of 21. You should read the prospectus of the other fund
before investing.
The Invest-A-Matic method of investing in the Fund and/or any other Eligible
Fund is described in the Prospectus. To avail yourself of this method you must
complete the application form, selecting the time and amount of your bank
checking account withdrawals and the funds for investment, include a voided,
unsigned check and complete the bank authorization.
15
<PAGE>
The Systematic Withdrawal Plan (the "SWP") also is described in the Prospectus.
You may establish a SWP if you own or purchase uncertificated shares having a
current offering price value of at least $10,000. Lord Abbett prototype
retirement plans have no such minimum. The SWP involves the planned redemption
of shares on a periodic basis by receiving either fixed or variable amounts at
periodic intervals. Since the value of shares redeemed may be more or less than
their cost, gain or loss may be recognized for income tax purposes on each
periodic payment. Normally, you may not make regular investments at the same
time you are receiving systematic withdrawal payments because it is not in your
interest to pay a sales charge on new investments when in effect a portion of
that new investment is soon withdrawn. The minimum investment accepted while a
withdrawal plan is in effect is $1,000. The SWP may be terminated by you or by
us at any time by written notice.
The Prospectus indicates the types of retirement plans for which Lord Abbett
provides forms and explanations. Lord Abbett makes available the retirement plan
forms and custodial agreements for IRAs (Individual Retirement Accounts
including Simplified Employee Pensions), 403(b) plans and qualified pension and
profit-sharing plans, including 401(k) plans. The forms name Investors Fiduciary
Trust Company as custodian and contain specific information about the plans.
Explanations of the eligibility requirements, annual custodial fees and
allowable tax advantages and penalties are set forth in the relevant plan
documents. Adoption of any of these plans should be on the advice of your legal
counsel or qualified tax adviser.
6.
Past Performance
Each Series computes the average annual compounded rate of total return during
specified periods that would equate the initial amount invested to the ending
redeemable value of such investment by adding one to the computed average annual
total return, raising the sum to a power equal to the number of years covered by
the computation and multiplying the result by one thousand dollars, which
represents a hypothetical initial investment. The calculation assumes deduction
of the maximum sales charge from the initial amount invested and reinvestment of
all income dividends and capital gains distributions on the reinvestment dates
at prices calculated as stated in the Prospectus. The ending redeemable value is
determined by assuming a complete redemption at the end of the period(s) covered
by the average annual total return computation.
Using the method to compute average annual compounded total return described
below, the one-year, five-year and life-of- Series total annual returns for
these periods ended December 31, 1994 for the Equity Series amounted to -5.90%,
3.30% and 6.08% respectively, and for the Income Series -8.00%, 6.64% and 7.22%,
respectively. The redeemable values were $941, $1,176 and $1,446, respectively,
for the Equity Series and $920, $1,379 and $1,546, respectively, for the Income
Series.
The Income Series' yield quotation is based on a 30-day period ended on a
specific date, computed by dividing the Series' net investment income per share
earned during the period by the Series' maximum offering price per share on the
last day of the period. This is determined by finding the following quotient:
take the Series' dividends and interest earned during the period minus its
expenses accrued for the period and divide by the product of (i) the average
daily number of Fund shares outstanding during the period that were entitled to
receive dividends and (ii) the Series' maximum offering price per share on the
last day of the period. To this quotient add one. This sum is multiplied by
itself five times. Then one is subtracted from the product of this
multiplication and the remainder is multiplied by two. For the 30-day period
ended December 31, 1994, the Income Series yield was 6.53%.
These figures represent past performance, and an investor should be aware that
the investment return and principal value of a Series investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. Therefore, there is no assurance that this performance will
be repeated in the future.
16
<PAGE>
7.
Taxes
The value of any shares redeemed by a Series or repurchased or otherwise sold
may be more or less than a shareholder's tax basis in the shares at the time the
redemption, repurchase or sale is made. Any gain or loss will generally be
taxable for federal income tax purposes. Any loss realized on the sale,
redemption or repurchase of Series shares which a shareholder has held for six
months or less will be treated for tax purposes as a long-term capital loss to
the extent of any capital gains distributions which were received with respect
to such shares. Losses on the sale of stock or securities are not deductible if,
within a period beginning 30 days before the date of the sale and ending 30 days
after the date of the sale, the taxpayer acquires stock or securities that are
substantially identical.
Each Series of the Fund will be subject to a 4% non-deductible excise tax on
certain amounts not distributed (and not treated as having been distributed) on
a timely basis in accordance with a calendar year distribution requirement. Each
Series intends to distribute to shareholders each year an amount adequate to
avoid the imposition of such excise tax.
Dividends paid by the Series will qualify for the dividends-received deduction
for corporations to the extent that they are derived from dividends paid by
domestic corporations.
As described in the Prospectus, the Series may be subject to withholding taxes
and other taxes imposed by foreign countries. If, at the close of any fiscal
year, more than 50% of the assets of either Series of the Fund consist of stock
or securities of foreign corporations, such Series may elect to treat foreign
income taxes paid by the Series as having been paid directly by its
shareholders. If a Series qualifies for and makes such an election, the
shareholders of such Series will be required to (i) include in ordinary gross
income (in addition to taxable dividends actually received) their pro rata share
of foreign income taxes paid by such Series and (ii) treat such pro rata share
as foreign income taxes paid by them. Such shareholders may then use such pro
rata portion of foreign income taxes as foreign tax credits, subject to
applicable limitations, or, alternatively, deduct them in computing their
taxable income. Shareholders who do not itemize deductions for federal income
tax purposes will not be entitled to deduct their pro rata portion of foreign
taxes paid by a Series, although such shareholders will be required to include
their share of such taxes in gross income. Shareholders who claim a foreign tax
credit for foreign taxes paid by a Series may be required to treat a portion of
dividends received from such Series as separate category income for purposes of
computing the limitations on the foreign tax credit. Tax-exempt shareholders
will ordinarily not benefit from this election. Each year that a Series
qualifies for and makes the election described above, its shareholders will be
notified of the amount of (i) each shareholder's pro rata share of foreign
income taxes paid by such Series and (ii) the portion of dividends which
represents income from each foreign country.
Forward foreign currency contracts, foreign currency put and call options and
other investment techniques and practices which the Series may utilize, as
described above under "Investment Objectives and Policies," may create
"straddles" for United States federal income tax purposes and may affect the
character and timing of the recognition of gains and losses by a Series. Such
hedging transactions may increase the amount of short-term capital gain realized
by such Series, which is taxed as ordinary income when distributed to
shareholders. Limitations imposed by the Internal Revenue Code on regulated
investment companies may restrict each Series' ability to engage in transactions
in options and forward contracts.
Gains and losses realized by a Series on certain transactions, including sales
of foreign debt securities and certain transactions involving foreign currency,
will be treated as ordinary income or loss for federal income tax purposes to
the extent, if any, that such gains or losses are attributable to changes in
exchange rates for foreign currencies. Accordingly, distributions taxable as
ordinary income will include the net amount, if any, of such foreign exchange
gains and will be reduced by the net amount, if any, of such foreign exchange
losses.
If a Series purchases shares in certain foreign investment entities, called
"passive foreign investment companies," that Series may be subject to United
States federal income tax on a portion of any "excess distribution" or gain from
the disposition of
17
<PAGE>
such shares, even if such income is distributed as a taxable dividend by the
Series to its shareholders. Additional charges in the nature of interest may be
imposed on either the Series or its shareholders with respect to deferred taxes
arising from such distributions or gains. If the Series were to invest in a
passive foreign investment company with respect to which the Series elected to
make a "qualified electing fund" election, in lieu of the foregoing
requirements, the Series might be required to include in income each year a
portion of the ordinary earnings and net capital gains of the qualified electing
fund, even if such amount were not distributed to the Series.
The foregoing discussion relates solely to U.S. federal income tax law as
applicable to United States persons (United States citizens or residents and
United States domestic corporations, partnerships, trusts and estates). Each
shareholder who is not a United States person should consult his tax adviser
regarding the U.S. and foreign tax consequences of the ownership of shares of a
Series, including a 30% (or lower treaty rate) United States withholding tax on
dividends representing ordinary income and net short-term capital gains, and the
applicability of United States gift and estate taxes to non-United States
persons who own Series shares.
8.
Information About the Fund
The directors, trustees and officers of Lord Abbett-sponsored mutual funds,
together with the partners and employees of Lord Abbett, are permitted to
purchase and sell securities for their personal investment accounts. In engaging
in personal securities transactions, however, such persons are subject to
requirements and restrictions contained in the Fund's Code of Ethics which
complies, in substance, with each of the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing. Among other things,
the Code requires that Lord Abbett partners and employees obtain advance
approval before buying or selling securities, submit confirmations and quarterly
transaction reports, and obtain approval before becoming a director of any
company; and it prohibits such persons from investing in a security 7 days
before or after any Lord Abbett-sponsored fund or Lord Abbett-managed account
considers a trade or trades in such security, from profiting on trades of the
same security within 60 days and from trading on material and non-public
information. The Code imposes certain similar requirements and restrictions on
the independent directors and trustees of each Lord Abbett- sponsored mutual
fund to the extent contemplated by the recommendations of the Advisory Group. 9.
Financial Statements
The financial statements for the fiscal year ended December 31, 1994 and the
report of Deloitte & Touche LLP, independent auditors, on such financial
statements contained in the 1994 Annual Report to Shareholders of Lord Abbett
Global Fund, Inc. are incorporated herein by reference to such financial
statements and report in reliance upon the authority of Deloitte & Touche LLP as
experts in auditing and accounting.
Appendix
Moody's Investors Service, Inc.'s Corporate Bond Ratings
Aaa - Bonds which are rated Aaa are judged to be of the best quality and carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin, and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are unlikely to impair the fundamentally strong position of such
issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
18
<PAGE>
protection may not be as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa - Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.
Ba - Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance and
other terms of the contract over any long period of time may be small.
Caa - Bonds that are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca - Bonds that are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C - Bonds that are rated C are the lowest-rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Standard & Poor's Corporation's Corporate Bond Ratings
AAA - This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA - Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong and in the majority of instances they
differ from AAA issues only in small degree.
A - Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
BB-B-CCC-CC-C - Debt rated BB, B, CCC, CC and C is regarded as having
predominately speculative characteristics with respect to capacity to pay
interest and repay principal. BB indicates the least degree of speculation and
CCC the highest. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes such payments will
be made during such grace period. The D rating also will be used upon the filing
of a bankruptcy petition if debt service payments are jeopardized.
19
<PAGE>
GLOBAL FUND
EQUITY SERIES
GLOBAL INVESTING ISN'T AS
FOREIGN AS YOU MAY THINK.
Spring 1994
[P1 - Picture of woman in super market
checking label of product]
<PAGE>
THERE ARE MANY GLOBAL COMPANIES THAT ARE NOT WELL KNOWN TO
AMERICAN CONSUMERS, BUT WE CAN THINK OF SOME WHOSE
PRODUCTS ARE SURPRISINGLY FAMILIAR.
- --------------------------------------------------------------------------------
WHAT DO ALL OF THESE BRAND NAMES HAVE IN COMMON?
Alpo(R) Green Giant(R) Magnavox(R) Geritol(R)
Pillsbury Allerest(R) Doan's(R) Maalox(R)
Burger King(R) Norelco(R) Aquafresh(R) Nintendo(R)
. They are quality brand names popular with American
consumers;
. They are all produced or owned by companies
headquartered in foreign countries; and,
. The companies that manufacture them are overlooked by
many American investors.
----------------------------------------------------------
All brand names listed are produced or owned by companies
that are held in Lord Abbett Global Fund - Equity Series
as of 12/31/93 (the Fund's fiscal year-end). The companies
that produce/own these brand names and their percentage in
the Fund's portfolio as of 12/31/93 follow: Grand
Metropolitan (Alpo(R), Burger King(R), Pillsbury, Green
Giant(R)), .88%; SmithKline Beecham (Aquafresh(R),
Geritol(R)), .38%; Ciba Geigy (Allerest(R), Doan's(R)),
.76%; Philips Electronics (Magnavox(R), Norelco(R)), .68%;
Rhone Poulenc (Maalox(R)), .63%; and Nintendo Co. Ltd.
(Nintendo(R)), .45%. The Fund is a managed portfolio and
holdings are subject to change. As of 12/31/93, the Fund
was diversified in 139 securities.
- --------------------------------------------------------------------------------
YOU SPEND GLOBALLY, DO YOU INVEST GLOBALLY?
If you're like many Americans, much of what you consume is
produced by foreign-owned companies. This isn't too
surprising, because:
. 60% of all publicly-traded companies in the world have
headquarters outside the U.S.
- --------------------------------------------------------------------------------
WHY DO PEOPLE INVEST ONLY IN AMERICA?
Despite their behavior as consumers, many American
investors ignore the global markets, even though:
. Foreign stocks have outperformed American stocks over
the past 10 1/2 years.
ARE YOU LIMITING YOUR INVESTMENT POTENTIAL? YOU MAY BE, IF
YOU INVEST ONLY IN THE U.S.
[Line Graph appears depicting the information provided below]
Morgan Stanley
World Index S&P 500
-------------- --------
6/83 $100,000 $100,000
12/83 103,893 100,267
12/84 109,892 106,558
12/85 155,793 140,396
12/86 222,471 166,601
12/87 259,764 175,347
12/88 321,977 204,368
12/89 377,340 269,021
12/90 314,998 260,696
12/91 374,761 339,971
12/92 357,298 365,838
12/93 439,937 402,638
- --Morgan Stanley
World Index Morgan Stanley World Index and the S&P 500 are unmanaged
(in U.S. Dollars) indices, and their performance is not indicative of the
==S&P 500 Fund's performance. An investor cannot invest directly in
an index. There is no assurance that foreign stocks will
outperform U.S. stocks in the future. For performance
information on the Fund, call Lord, Abbett & Co. at
800-426-1130.
<PAGE>
- --------------------------------------------------------------------------------
PARTICIPATE IN POTENTIAL GROWTH AROUND THE WORLD WITH LORD ABBETT
GLOBAL FUND - EQUITY SERIES AND BENEFIT FROM:
POTENTIALLY HIGHER RETURNS THROUGH DIVERSIFICATION.
Lord Abbett Global Fund -- Equity Series invests in the
three major economic centers of the world: the Americas,
Europe and Asia. Global diversification gives the Fund the
potential to benefit from favorable economic trends and
undervalued securities throughout the world. Fund
management believes that opportunities exist in:
1. THE AMERICAS
. In the U.S., the impetus to economic growth has
shifted from consumption to capital spending and
exports.
. Ten years of corporate restructuring, downsizing
and production automation has transformed the U.S.
into the low cost manufacturing base among its
major competitors (Europe and Japan).
. The emerging markets of Mexico, Chile and
Argentina offer growth potential due, in part, to
economic reforms and stringent fiscal policies.
2. EUROPE
. Continental Europe's industrial integration and
restructuring offer investors unique profit
opportunities.
. The interest-rate sensitive sector, in particular,
may benefit from declining interest rates as
Europe struggles to escape recession.
3. ASIA
. These economies feature high savings rates,
rapidly growing consumer incomes, strong family
and educational-system structures and low social
welfare costs.
. A rapidly growing standard of living, low capital
costs, low inflation and favorable tax structures
should encourage a high rate of industrial
development.
Common stocks will fluctuate in value. Global investing
considerations include the risk of: currency fluctuations;
political and social instability; in some areas, the risk
of expropriation; higher transaction costs and different
securities settlement practices. See the Fund's prospectus
for a more detailed discussion of risk factors.
THE LORD ABBETT - DUNEDIN CONNECTION.
EXPERIENCED GLOBAL Lord, Abbett & Co. has been managing investment portfolios
MANAGEMENT since 1929. Value investing -- the strategy of investing
in securities which are believed to be undervalued
relative to their assets, cash flow or earnings -- has
guided Lord, Abbett & Co.'s investment decisions for
decades.
Sub-adviser, Dunedin Fund Managers, works with Lord Abbett
to find value and opportunity around the world. Dunedin
maintains offices in Japan, Scotland and Chicago and,
together with its predecessors, has been managing global
investments since 1873.
- --------------------------------------------------------------------------------
GLOBAL INVESTING NOW...FOR THE FUTURE
Why invest globally? Given that over 70% of global output
of goods and services occurs outside the U.S., maybe it
makes sense to include some foreign companies in your
investment portfolio.
<PAGE>
- --------------------------------------------------------------------------------
You Work Hard. Your Portfolio Should Work Harder.
WITH GLOBAL Before the New York Stock Exchange (NYSE) opens in the
DIVERSIFICATION, U.S., the London markets have been at work for six hours.
YOU CAN TAKE When the NYSE closes, it's 10 a.m. in Tokyo. A global
ADVANTAGE OF portfolio can participate in investment opportunities 24
INVESTMENT hours a day.
OPPORTUNITIES 24
HOURS A DAY Invest in Lord Abbett Global Fund -- Equity Series and
benefit from the ownership of some world-class companies.
For more information about Lord Abbett Global Fund --
Equity Series, including charges and expenses, please call
your financial adviser or Lord, Abbett & Co. at 800-874-
3733 for a prospectus. Please read the prospectus
carefully before investing.
Information about the Fund, including price, dividend and
performance history can be obtained by calling
800-426-1130.
Lord, Abbett & Co. Investment Managers and Underwriters
767 Fifth Avenue, New York, NY 10153-0203
LAG-6E-1294
<PAGE>
GLOBAL FUND
INCOME SERIES
"BY INVESTING IN LORD ABBETT GLOBAL FUND'S INCOME
SERIES, I HOPE TO BENEFIT FROM THE MANY GLOBAL
INVESTMENT OPPORTUNITIES AVAILABLE."
Spring 1994
[P1 - Picture of a globe piggy bank with child inserting a quarter]
<PAGE>
- --------------------------------------------------------------------------------
INVESTOR CONCERN: SHORT-TERM U.S. INTEREST RATES REMAIN NEAR 30-YEAR LOWS
3 REASONS WHY 1. Low U.S. interest rates.
THE ENVIRONMENT
IS RIGHT FOR 2. Higher foreign rates on quality issues.
GLOBAL INVESTING
3. Lord Abbett Global Fund -- Income Series' investors
may be in a good position to realize capital
appreciation from a drop in intermediate and long bond
rates overseas.
- --------------------------------------------------------------------------------
GLOBAL DIVERSIFICATION PROVIDED HIGHER INCOME
As shown below, a portfolio which included high-quality
foreign bonds produced more income than a portfolio of
U.S. bonds. The real rate of return on U.S. bonds (yield
minus domestic inflation) was among the lowest of the
world's major bond markets.
<TABLE>
<CAPTION>
UNITED
U.S.A. KINGDOM CANADA ITALY DENMARK FRANCE SPAIN JAPAN
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Yield/(1)/ 5.79% 6.23% 6.64% 8.66% 6.13% 5.64% 8.10% 3.03%
- - Domestic Inflation 2.70% 1.40% 1.90% 4.00% 1.50% 2.20% 4.70% 0.90%
- ----------------------------------------------------------------------------------------------------------------------
= REAL RETURN 3.09% 4.83% 4.74% 4.66% 4.63% 3.44% 3.40% 2.13%
</TABLE>
/(1)/ Yields to maturity on recently-offered ten-year
government bonds. Data as of 12/31/93.
Sources: J.P. Morgan Securities and Goldman Sachs
International, Limited.
Data on this page does not represent Income Series
performance. There is no guarantee that performance
depicted herein will be repeated in the future, or that
the Income Series' portfolio will include all of the
countries shown. See opposite page for Fund performance.
- --------------------------------------------------------------------------------
GOING GLOBAL PROVIDED BETTER TOTAL RETURNS
Only once in the last ten years have U.S. bonds been the
strongest performers.
A COMPARISON OF 10-YEAR GOVERNMENT BONDS, AFTER CURRENCY
TRANSLATIONS INTO U.S. DOLLARS
<TABLE>
<CAPTION>
10 Years
Ended
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 12/31/93
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CANADA 8.9 15.8 16.1 8.0 19.0 16.1 5.6 24.1 (0.5) 13.2 222.5
- --------------------------------------------------------------------------------------------------------------------------
FRANCE 11.9 43.8 47.4 20.6 7.3 8.9 19.8 16.4 4.6 17.0 470.4
- --------------------------------------------------------------------------------------------------------------------------
GERMANY 2.5 38.0 37.6 27.1 (3.0) 5.6 10.5 10.8 6.2 10.6 264.4
- --------------------------------------------------------------------------------------------------------------------------
JAPAN 6.8 37.5 36.1 40.4 2.7 (14.4) 3.0 24.2 11.3 30.8 359.4
- --------------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM (12.7) 43.4 14.4 46.4 2.3 (3.5) 34.2 14.7 (3.9) 21.4 271.7
- --------------------------------------------------------------------------------------------------------------------------
U.S.A. 14.5 26.6 24.1 (4.6) 8.8 14.0 6.7 17.0 7.3 12.1 219.6
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
In 1987 the total return on U.S. bonds was -4.6%; the
average return for the six countries listed above was
+23.0%.
All figures indicate percentage total returns in U.S.
dollars; ( ) signify negative return.
Sources: J.P. Morgan Securities and Goldman Sachs
International, Limited.
<PAGE>
- --------------------------------------------------------------------------------
INVESTOR SOLUTION: GO GLOBAL!
3 REASONS TO GO 1. QUALITY
GLOBAL WITH LORD
ABBETT GLOBAL The Income Series invests only in quality bonds, while it
FUND -- INCOME seeks to capture high returns around the world.
SERIES
HIGH QUALITY OF LONG-TERM PORTFOLIO HOLDINGS
------------------------------------------
73.3% AAA
-----------
[G1- Pie chart depicting information at left] 23.8% AA
-----------
2.9% A
Portfolio quality as of 12/31/93
2. DIVERSIFICATION
The Income Series at year-end had holdings in 13
countries.
INVESTMENTS BY COUNTRY AS OF 12/31/93
----------------------------------
47.2% EUROPE
-----------------
27.3% U.S.A.
--------------
9.2% UNITED KINGDOM
[G1- Pie chart depicting information at left] ------------
5.8% CANADA
-----------
2.9% JAPAN
-----------
2.4% AUSTRALIA
-----------
5.2% CASH AND
EQUIVALENTS
3. PERFORMANCE
The Income Series produced positive total returns/(2)/
every calendar year since its inception in 1988. These
figures represent past performance which is no indication
of future results. The investment return and principal
value of a Fund investment will fluctuate so that shares,
on any given day or when redeemed, may be worth more or
less than their original cost.
<TABLE>
<CAPTION>
SEC-REQUIRED
AVERAGE ANNUAL RATES
OF TOTAL RETURN
YEARLY RATES (AT MAXIMUM SALES
OF TOTAL RETURN/(2)/ CHARGE OF 4.75%)
(AT NET ASSET VALUE) AS OF 3/31/94
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1989 +10.6% Life of Fund
1990 +11.9% (inception: 9/30/88) +8.10%
1991 +14.3% 5 Years +8.93%
1992 + 5.8% 1 Year -4.10%
1993 +10.8%
Average Annual Total Return
(from inception (9/30/88)
through 12/31/93) +10.4%
</TABLE>
/(2)/ Total return reflects the percent change in net
asset value assuming the reinvestment of all
distributions. If the sales charge was reflected,
the performance quoted would be reduced.
<PAGE>
Assets: $277.5 million
Established: 1988
Dividends: Declared daily; paid monthly
Capital Gains: Once a year, if any
Average Portfolio Maturity: 8.6 years
Minimum Initial Investment: $1,000; $250 for IRAs
----------------------------------------------------------
Established in 1929, Lord, Abbett & Co. has over 60 years
of investment experience and manages over $16 billion in a
family of mutual funds and private advisory accounts. In
analyzing the global markets, the Firm works together with
sub-adviser Dunedin Fund Managers Limited of Scotland to
manage the Income Series. Dunedin's investment philosophy
complements Lord Abbett's: Dunedin attempts to invest in
securities whose values are not fully recognized by
others. Dunedin and its predecessors have been managing
global investments since 1873.
PORTFOLIO MANAGERS:
. Zane E. Brown is director of Lord, Abbett & Co.'s fixed-
income area and serves as portfolio manager for the
Global Fund's Income Series. Mr. Brown earned his MBA in
investment management from Colorado State University. He
has over 17 years of investment experience.
. Mark Wauton heads the fixed-income desk for Dunedin Fund
Managers Limited of Scotland. In addition to portfolio
management of the Income Series, Mr. Wauton manages
corporate and pension fund assets in the international
bond and currency markets. He studied estate management
at Reading University and subsequently graduated from
The Royal Military Academy Sandhurst. Mr. Wauton has
over 7 years of industry experience and is a member of
Dunedin's investment policy group.
----------------------------------------------------------
Performance reflects appropriate Rule 12b-1 Plan expenses
from commencement of the Plan. Tax consequences are not
reflected. Futures and options have not been used. A
current prospectus which contains more complete
information about the Fund, including charges, expenses
and foreign risk factors, can be obtained by calling your
financial adviser or Lord, Abbett & Co. at 800-874-3733.
An investor should read the prospectus carefully before
investing. Such foreign risk factors include the potential
for less regulation and liquidity and more volatility than
U.S. markets; potentially less publicly-available
information about companies, banks and governments than
for U.S. counterparts; lack of uniform accounting
standards among countries, impairing comparisons;
potentially higher transaction costs and different
securities settlement and trading practices.
If used after 6/30/94, this piece must be accompanied by
Lord Abbett's Performance Quarterly for the most recently
completed calendar quarter.
Lord, Abbett & Co. Investment Managers and Underwriters
The General Motors Building . 767 Fifth Avenue . New York,
NY 10153-0203
LAG-6I-1293
<PAGE>
PART C OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
Part B - Statement of Net Assets at December 31, 1994. Statement
of Operations for the year ended December 31, 1994. Statements of
Changes in Net Assets for the year ended December 31, 1993 and
1994. Financial Highlights for the Period September 30, 1988
(commencement of operations) - December 31, 1988 and each of six
separate fiscal years ended December 31, 1994.
(b) Exhibits -
99B.1 Articles of Incorporation*
99B.2 By-Laws*
99B.6 Distribution Agreement*
99B.7a Retirement Plan for Non-interested Person Directors and
Trustees of Lord Abbett Funds.***
99.B.7b Lord Abbett Prototype Retirements Plans****
(1) 401(k)
(2) IRA
(3) 403(b)
(4) Profit-Sharing, and
(5) Money Purchases
99.B11 Consent of Deloitte & Touche*
99.B16 Total Return and Yield Computations*
* Filed herewith.
** Previously filed.
*** Incorporated by reference to Post-Effective Amendment No. 7 to the
Registration Statement (on Form N1-A) of Lord Abbett Equity Fund (File No.
811-6033).
**** Incorporated by reference to Post-Effective Amendment No. 6 to the
Registration Statement (on Form N-1A) of Lord Abbett Securities Trust (File
No. 811-7538).
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
Item 26. NUMBER OF RECORD HOLDERS OF SECURITIES At APRIL 7, 1995
Equity Series 9,073 and Income Series 14,806
Item 27. INDEMNIFICATION
Registrant is incorporated under the laws of the State of Maryland and is
subject to Section 2-418 of the Corporations and Associations Article of the
Annotated Code of the State of Maryland controlling the indemnification of
directors and officers. Since Registrant has its executive offices in the State
of New York, and is qualified as a foreign corporation doing business in such
State, the persons covered by the foregoing statute may also be entitled to and
subject to the limitations of the indemnification provisions of Section 721-726
of the New York Business Corporation Law.
The general effect of these statutes is to protect officers, directors and
employees of Registrant against legal liability and expenses incurred by reason
of their positions with the Registrant. The
<PAGE>
statutes provide for indemnification for liability for proceedings not brought
on behalf of the corporation and for those brought on behalf of the corporation,
and in each case place conditions under which indemnification will be permitted,
including requirements that the officer, director or employee acted in good
faith. Under certain conditions, payment of expenses in advance of final
disposition may be permitted. The By-Laws of Registrant, without limiting the
authority of Registrant to indemnify any of its officers, employees or agents to
the extent consistent with applicable law, makes the indemnification of its
directors mandatory subject only to the conditions and limitations imposed by
the above-mentioned Section 2-418 of Maryland Law and by the provisions of
Section 17(h) of the Investment Company Act of 1940 as interpreted and required
to be implemented by SEC Release No. IC-11330 of September 4, 1980.
In referring in its By-Laws to, and making indemnification of directors subject
to the conditions and limitations of, both Section 2-418 of the Maryland Law and
Section 17(h) of the Investment Company Act of 1940, Registrant intends that
conditions and limitations on the extent of the indemnification of directors
imposed by the provisions of either Section 2-418 or Section 17(h) shall apply
and that any inconsistency between the two will be resolved by applying the
provisions of said Section 17(h) if the condition or limitation imposed by
Section 17(h) is the more stringent. In referring in its By-Laws to SEC Release
No. IC-11330 as the source for interpretation and implementation of said Section
17(h), Registrant understands that it would be required under its By- Laws to
use reasonable and fair means in determining whether indemnification of a
director should be made and undertakes to use either (1) a final decision on the
merits by a court or other body before whom the proceeding was brought that the
person to be indemnified ("indemnitee") was not liable to Registrant or to its
security holders by reason of willful malfeasance, bad faith, gross negligence,
or reckless disregard of the duties involved in the conduct of his office
("disabling conduct") or (2) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of such disabling conduct, by (a) the vote of a majority of a
quorum of directors who are neither "interested persons" (as defined in the 1940
Act) of Registrant nor parties to the proceeding, or (b) an independent legal
counsel in a written opinion. Also, Registrant will make advances of attorneys'
fees or other expenses incurred by a director in his defense only if (in
addition to his undertaking to repay the advance if he is not ultimately
entitled to indemnification) (1) the indemnitee provides a security for his
undertaking, (2) Registrant shall be insured against losses arising by reason of
any lawful advances, or (3) a majority of a quorum of the non- interested,
non-party directors of Registrant, or an independent legal counsel in a written
opinion, shall determine, based on a review of readily available facts, that
there is reason to believe that the indemnitee ultimately will be found entitled
to indemnification.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expense incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
In addition, Registrant maintains a directors' and officers' errors and
omissions liability insurance policy protecting directors and officers against
liability for breach of duty, negligent act, error or omission committed in
their capacity as directors or officers. The policy contains certain exclusions,
among which is exclusion from coverage for active or deliberate dishonest or
fraudulent acts and exclusion for fines or penalties imposed by law or other
matters deemed uninsurable.
<PAGE>
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Lord, Abbett & Co. acts as investment advisor for seventeen, other
open-end investment companies (of which it is principal underwriter
for fourteen), and as investment adviser to approximately 5,100
private accounts. Other than acting as directors and/or officers of
open-end investment companies managed by Lord, Abbett & Co., none of
Lord, Abbett & Co.'s partners has, in the past two fiscal years,
engaged in any other business, profession, vocation or employment of a
substantial nature for his officer, employee, partner or trustee of
any entity except as follows:
John J. Walsh
Trustee
The Brooklyn Hospital Center
100 Parkside Avenue
Brooklyn, N.Y.
Item 29. PRINCIPAL UNDERWRITER
(a)
Affiliated Fund, Inc.
Lord Abbett U. S. Government Securities Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Value Appreciation Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett California Tax-Free Income Fund, Inc.
Lord Abbett Fundamental Value Fund, Inc.
Lord Abbett U.S. Government Securities Money Market Fund, Inc.
Lord Abbett Series Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Tax-Free Income Trust
Lord Abbett Securities Trust
Lord Abbett Investment Trust
INVESTMENT ADVISER
American Skandia Trust (Lord Abbett Growth and Income Portfolio)
America's Utility Fund
Lord Abbett Research Fund, Inc.
(b) The partners of Lord, Abbett & Co. are:
Name and Principal Positions and Offices
Business Address(1) with Registrant
Ronald P. Lynch President, Chairman
E. Wayne Nordberg Executive Vice President
Kenneth B. Cutler Vice President & Secretary
Stephen I Allen Vice President
Daniel E. Carper Vice President
Robert S. Dow Vice President
Thomas S. Henderson Vice President
John J. Walsh Vice President
(1) Each of the above has a principal business address
767 Fifth Avenue, New York, NY 10153
<PAGE>
(c) Not applicable
Item 30. LOCATION OF ACCOUNTS AND RECORDS
Registrant maintains the records required by Rules 31a - 1(a) and (b) and
31a - 2(a) at its main office.
Lord, Abbett & Co. maintains the records required by Rules 31a - 1(f) and
31a - 2(e) at its main office.
Certain records such as canceled stock certificates and correspondence may
be physically maintained at the main office of the Registrant's Transfer
Agent, Custodian, or Shareholder Servicing Agent within the requirements of
Rule 31a-3.
Item 31. MANAGEMENT SERVICES
None
Item 32. UNDERTAKINGS
The Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant certifies that it meets all the requirements
for effectiveness of this Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Registration Statement
and/or any amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on the
27th day of April 1995.
LORD ABBETT GLOBAL FUND, INC.
By /S/ RONALD P. LYNCH
Ronald P. Lynch, Chairman
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
NAME TITLE DATE
- ----- ----- ----
Chairman,
/s/ Ronald P. Lynch President & Director April 27, 1995
/s/ John J. Gargana, Jr. Vice President & April 27, 1995
Chief Financial Officer
/s/ E. Thayer Bigelow Director April 27, 1995
/s/ Stewart S. Dixon Director April 27, 1995
/s/ John C. Jansing Director April 27, 1995
Thomas S. Henderson Director
/s/ C. Alan MacDonald Director April 27, 1995
/s/ Hansel B. Millican, Jr. Director April 27, 1995
/s/ Thomas J. Neff Director April 27, 1995
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- ------ -----------
99B.1 Articles of Incorporation
99B.2 By-Laws
99B.6 Distribution Agreement
99.B11 Consent of Deloitte & Touche
99.B16 Total Return and Yield Computations
27 Financial Data Schedule
EXHIBIT 99.B1
ARTICLES OF INCORPORATION
OF
LORD ABBETT GLOBAL FUND, INC.
This is to certify:
Article I
I, the subscriber, Kenneth B. Cutler, whose post office address is 767
Fifth Avenue, New York, New York 10153, being over eighteen years of age,
am acting as incorporator with the intention of forming a corporation under
and by virtue of the general laws of the state of Maryland authorizing the
formation of corporations.
Article II
The name of the corporation (hereinafter called the "Corporation") is
Lord Abbett Global Fund, Inc.
Article III
The post office address of the place at which the principal office of
the corporation in the state of Maryland will be located is c/o the
Prentice-Hall Corporation System, Maryland, 929 North Howard Street,
Baltimore, Maryland 21201.
The Corporation's resident agent is The Prentice-Hall Corporation
System, Maryland, 929 North Howard Street, Baltimore, Maryland 21201. Said
resident agent is a corporation of the State of Maryland.
Article IV
The purpose or purposes for which the Corporation is formed and the
business or objects to be transacted, carried on and promoted by it, are as
follows:
A. To conduct, operate and carry on the business of an investment
company, and to exercise all the powers necessary or appropriate to conduct
such business.
<PAGE>
B. To purchase, subscribe for, invest in or otherwise acquire, and to
own, hold, sell, possess, transfer or otherwise dispose of, or turn to
account or realize upon, and generally deal in, all forms of securities of
every nature, kind, character, type and form, including but not limited to,
shares, stocks, bonds, debentures, notes, scrip, participation
certificates, rights to subscribe, warrants, options, certificates of
deposit, choices in action, evidences of indebtedness, certificates of
indebtedness and certificates of interest of any and every kind and nature
whatsoever, secured and unsecured, issued or to be issued, by any
corporation, partnership, association, trust entity or person, public or
private, whether organized under the laws of the United States of America
or any foreign country or any state, commonwealth, territory or possession
of any thereof.
C. To issue, sell, repurchase, redeem, retire, cancel, acquire,
resell, transfer, and otherwise deal in shares of the capital stock of the
Corporation, and to apply to any such repurchase, redemption, retirement,
cancellation or acquisition of shares of capital stock of the Corporation,
any funds of the Corporation, whether capital, surplus or otherwise to the
full extent permitted by the laws of the State of Maryland, all without the
vote or consent of the stockholders of the Corporation.
D. To deposit any of its assets in any bank, trust company or other
depository, domestic or foreign, and to retain any of its assets in the
United States or foreign currencies.
E. To conduct its business in the State of Maryland, all other states
and elsewhere in any part of the world, and to have one or more offices
outside the State of Maryland.
F. To do any and all things herein set forth, and in addition such
other acts and things as are necessary or convenient to the attainment of
the purposes of this Corporation, or any of them, to the same extent as
natural persons lawfully might or could do in any part of the world, and to
engage in any lawful act or activity for which corporations may be
organized under the laws of the State of Maryland.
<PAGE>
The foregoing objects and purposes shall, except as otherwise
expressly provided, be in no way limited or restricted by reference to or
inference from the terms of any other clause of this or any other Article
of these Articles of Incorporation, and shall each be regarded as
independent, and construed as powers as well as objects and purposes, and
the enumeration of specific purposes, objects and powers shall not be
construed to limit or restrict in any manner the meaning of general terms
or the general powers of the Corporation now or hereafter conferred by the
laws of the State of Maryland, nor shall the expression of one thing be
deemed to exclude another, though it be of like nature, not expressed;
provided, however, that the Corporation shall not have power to carry on
within the State of Maryland any business whatsoever the carrying on of
which would preclude it from being classified as an ordinary business
corporation under the laws of said State; nor shall any of the foregoing
statements of its objects, purposes and powers be deemed to permit the
Corporation to carry on any business, or exercise any powers, in any state,
territory, district or country except to the extent that the same may
lawfully be carried on or exercised under the laws thereof.
Article V
SECTION 1. The total number of shares which the Corporation has
authority to issue is 1,000,000,000 shares of capital stock of the par
value of $.001 each (the "Shares"), having an aggregate par value of
$1,000,000. The Shares shall initially constitute two classes designated as
the "Equity Series", consisting of 100,000,000 Shares, and the "Income
Series", consisting of 100,000,000 Shares (such two classes, together with
any further class or classes of Shares from time to time created by the
Board of Directors, being herein referred to individually as a "Class" and
collectively as "Classes"). The Board of Directors shall have the power and
authority to further classify or reclassify any unissued Shares from time
to time by setting or changing the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications,
or terms or conditions or redemption of such unissued Shares.
SECTION 2. 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 Classes of
Shares is as follows,
<PAGE>
unless otherwise set forth in Articles Supplementary filed with the
Maryland State Department of Assessments and Taxation describing any
further Class or Classes from time to time created by the Board of
Directors:
(a) Assets Belonging to Class. All consideration received
-------------------------
by the Corporation for the issuance or sale of Shares
of a particular Class, 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 Class 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)
allocated to that Class as provided in the following
sentence, are herein referred to as "assets belonging
to" that Class. In the event that there are any
assets, income, earnings, profits, proceeds, funds or
payments which are not readily identifiable as
belonging to any particular Class (collectively
together with unallocated items referred to in
subsection (b) of this Section 2, "Unallocated Items"),
the Board of Directors shall allocate such Unallocated
Items to and among any one or more of the Classes
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 Class shall belong to that Class. Each such
allocation by the Board of Directors shall be
conclusive and binding upon the stockholders of all
Classes for all purposes.
(b) Liabilities Belonging to Class. The assets belonging
to each particular Class shall be charged with the
liabilities of the Corporation in respect of that Class
and with all expenses, costs, charges and reserves
<PAGE>
attributable to that Class, and shall be so recorded upon the
books of account of the Corporation. Such liabilities,
expenses, costs, charges and reserves so charged to that
Class, together with any unallocated items (as hereinafter
defined) allocated and charged to that Class as provided in
the following sentence, are herein referred to as "liabilities
belonging to" that Class. 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 Class (collectively, together with
any unallocated items referred to in subsection (a) of this
Section 2, "Unallocated Items"), the Board of Directors shall
allocate and charge such Unallocated Items to and among any
one or more of the Classes 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 Class shall belong to
that Class. Each such allocation by the Board of Directors
shall be conclusive and binding upon the stockholders of all
Classes for all purposes.
(c) Dividends. Dividends and distributions on Shares of a
---------
particular Class may be paid to the holders of Shares
of that Class at such times, in such manner and from
such of the income and capital gains, accrued or
realized, from the assets belonging to that Class,
after providing for actual and accrued liabilities
belonging to that Class, as the Board of Directors may
determine.
(d) Liquidation. In the event of the liquidation or
-----------
dissolution of the Corporation the stockholders of each
Class that has been created shall be entitled to
receive, as a Class, when and as declared by the Board
of Directors, the excess of the assets belonging to
that Class over the liabilities belonging to that
Class. The assets so distributable to the stockholders
of any particular Class shall be distributed among such
stockholders in proportion to the number of Shares of
the Class held by them and recorded on the books of the
Corporation.
<PAGE>
(e) 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 Class
thereof and all Shares of all 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 Class is required by the
Investment Company Act of 1940 or would be required
under the Maryland General Corporation Law, such
requirements as to a separate vote by that 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 Classes, then, subject to (iii)
below, the Shares of all other Classes shall vote as a
single class; and (iii) as to any matter which does not
affect the interest of a particular Class, only the
holders of Shares of the one or more affected Classes
shall be entitled to vote.
(f) Equality. All Shares of each particular Class shall
--------
represent an equal proportionate interest in the assets
belonging to that Class (subject to the liabilities
belonging to that Class), and each Share of any
particular Class shall be equal to each other Share of
that Class, but the provisions of this sentence shall
not restrict any distinctions permissible pursuant to
subsection (c) of this Section 2 or otherwise under
these Articles of Incorporation with respect to
stockholder elections to receive dividends or
distributions in cash or Shares of the same Class or
that may otherwise exist with respect to dividends and
distributions on Shares of the same Class.
SECTION 3. The Shares of the Corporation, of any Class, shall
be subject to the following provisions:
(a) All Shares now or thereafter authorized, and of any Class,
shall be subject to redemption and redeemable at the option of
the stockholder, in the sense used in the General Laws of the
State of Maryland authorizing the formation of corporations.
Each holder of the Shares, upon request to the Corporation
accompanied by surrender (to the Corporation, or an agent
designated
<PAGE>
by it) of the appropriate stock certificate or certificates,
if any, in proper form for transfer, and such other
instruments as the Board of Directors may require, shall be
entitled to require the Corporation to redeem all or any part
of the Shares outstanding in the name of such holder on the
books of the Corporation, at a redemption price for Shares of
that Class equal to the net asset value of such Shares of that
Class determined as hereinafter set forth, less a charge, not
to exceed one percent (1%) of such net asset value, if and as
fixed by resolution of the Board of Directors of the
Corporation from time to time.
(b) Notwithstanding the foregoing, the Board of Directors of the
Corporation may suspend the right of the holders of the Shares
of any Class to require the Corporation to redeem Shares or
may suspend any voluntary purchase of such Shares:
(i) for any period (A) during which the New York
Stock Exchange is closed other than the customary weekend and
holiday closing, or (B) during which trading on the New York
Stock Exchange is restricted;
(ii) for any period during which an emergency, as
defined by the rules of the Securities and Exchange Commission
or any successor thereto, exists as a result of which (A)
disposal by the Corporation of securities owned by it is not
reasonably practicable, or (B) it is not reasonably
practicable for the Corporation fairly to determine the value
of its net assets; or
(iii) for such other periods as the Securities and
Exchange Commission or any successor thereto may by order
permit for the protection of security holders of the
Corporation.
(c) The Corporation, pursuant to a resolution of the Board of
Directors and without the vote or consent of stockholders of
the Corporation, shall have the right to redeem at net asset
value all Shares, of any Class in any stockholder account in
which there are less than 25 Shares or such lesser number of
Shares as shall be specified in such resolution. Such
resolution shall
<PAGE>
set forth that redemption of Shares in such accounts has been
determined to be necessary to reduce disproportionately
burdensome expenses in servicing stockholder accounts, or to
be otherwise in the economic best interest of the Corporation.
Such resolution shall provide that prior notice of at least 30
days (or such longer period as is specified in the resolution)
from the date of the notice to avoid such redemption by
increasing his account to at least 25 Shares, or such lesser
number of Shares as is specified in the resolution.
SECTION 4. Notwithstanding any provision of Maryland law
requiring any action to be taken or authorized by the affirmative
vote of the holders of a designated proportion greater than a
majority of the Shares outstanding or of the 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 pursuant to the provisions of these Articles of
Incorporation.
SECTION 5. No holder of stock of the Corporation shall, as
such holder, have any right to purchase or subscribe for any
Shares which the Corporation 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 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.
Article VI
The initial number of directors of the Corporation shall be
two, and the names of those who shall act as such until the first
meeting of stock holders or until their successors are duly
elected and qualify are as follows:
Ronald P. Lynch
John M. McCarthy
However, the By-Laws of the Corporation may fix the number of directors at a
number other than two and may authorize the Board of Directors, by the vote of a
majority of the entire Board of Directors, to divide the Board into classes, to
increase or
<PAGE>
decrease the number of directors within a limit specified in the By-Laws,
provided that in no case shall the number of directors be less than three, if
the Corporation has three or more stockholders, and to fill the vacancies
created by any such increase in the number of directors. Unless otherwise
provided by the By-Laws of the Corporation, the directors of the Corporation
need not be stockholders.
Article VII
The following provisions are inserted for the management of
the Business and conduct of the affairs of the Corporation, and
to create, define, limit and regulate the powers of the
Corporation, the directors and the stockholders:
SECTION 1. In furtherance and not in limitation of the
powers conferred by the statute and pursuant to these Articles of
Incorporation, the Board of Directors is expressly authorized to
do the following:
(a) To make, adopt, alter, amend and repeal By-Laws of the
Corporation.
(b) To declare (from interest, dividends or other income
received or accrued, from accruals of original issue or
other discounts on obligations held, from capital or
other profits on portfolio assets whether realized or
unrealized, from surplus whether earned, capital or
paid in or from any other lawful sources with respect
to a particular Class) dividends and distributions on
the Corporation's Shares, with respect to such Class,
for payment in cash, property or the Corporation's own
stock to stockholders of record on such dates (which
may be as frequently as every day) and payable at such
intervals as the Board of Directors shall determine at
any time in advance of such payment, whether or not the
amount of such payment can at that time be determined
or must be calculated subsequent to declaration and
prior to payment by reference to amounts or other or
other factors not yet determined at the time of
declaration (including but not limited to the amount of
a dividend or distribution to be determined only by
reference to what is sufficient to enable the
Corporation to qualify as a regulated investment
company under the United States Internal Revenue Code
<PAGE>
as in effect at such time or to avoid liability for Federal
income tax); (the authority granted by this subsection (b) to
permit, without limitation, and if otherwise lawful: declaring
dividends or distributions by means of a formula or other
similar method of determination; establishing record or
payment dates for dividends or distributions on any basis,
including establishing a number of record or payment dates
subsequent to the declaration at any dividend or distribution;
establishing the same payment date for any number of dividends
or distributions declared prior to such date; providing for
the payment of dividends or distributions declared and as yet
unpaid to stockholders of the Corporation redeeming shares
prior to the payment date otherwise applicable, and providing
in advance for the conditions under which any dividend or
distribution may be payable in the Corporation's own shares to
all or less than all of the Corporation's stockholders with
respect to a particular Class, whether such dividend or
distribution is in authorized but unissued or in treasury
shares of the Corporation).
(c) To issue and sell or to cause the issuance and sale of Shares,
of any Class, in such amounts and on such terms and
conditions, for such purpose and for such amount or kind of
consideration as is now or hereafter permitted by the laws of
the State of Maryland and in accordance with the Investment
Company Act of 1940.
(d) To purchase and to cause to be purchased Shares, of any
Class, pursuant to these Articles of Incorporation,
upon tender thereof by the holder or holders thereof or
otherwise, provided that the Corporation has assets
belonging to that Class legally available for such
purpose whether arising out of paid-in surplus, other
surplus, net profits or otherwise, to such extent and
in such manner and upon such terms as the Board of
Directors shall deem expedient, and to pay for such
Shares in cash belonging to that Class then held or
owned by the Corporation.
(e) To authorize, subject to such vote, consent, or approval of
stockholders and other conditions, if any, as may be required
by any applicable statute, rule or regulation, the execution
and performance by the
<PAGE>
Corporation of an agreement or agreements with any person,
corporation, association, partnership or other organization
whereby, subject to the direction and control of the Board of
Directors, any such other person, corporation, association,
partnership, or other organization shall render managerial,
investment advisory and related services to the Corporation
(including, if deemed advisable, the management or supervision
of the investment portfolios of the Corporation) upon such
terms and conditions as may be provided in such agreement or
agreements.
(f) To authorize, subject to such vote, consent or approval
of stockholders and other conditions, if any, as may be
required by any applicable statute, rule or regulation,
the execution and performance by the Corporation of an
agreement or agreements, which may be exclusive, with
any person, corporation, association, partnership or
other organization, as distributor, providing for the
sale and distribution of the Shares. Such agreement or
agreements may provide for the charge by the
Corporation of a premium over the net assets valued
(determined as hereinafter provided) of such Shares and
allowance of a discount by the Corporation to such
distributor, and may further provide for the
reallowance by such distributor of concessions or
commissions from but not exceeding such discount;
provided, however, that such discount shall not exceed
the amount of the premium.
(g) To authorize any agreement of the character described
in subsections (e) or (f) of this Section 1 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,
with like force and effect as if he were not such
<PAGE>
director or officer of such other corporation or not so
interested. Any agreement entered into pursuant to said
subsection (e) or (f) shall be consistent with and subject to
the requirements of the Investment Company Act of 1940
(including any amendment thereof or other applicable Act of
Congress hereafter enacted).
SECTION 2. The Board of Directors may authorize the purchase
by the Corporation, either directly or through any agent, of the
Shares, of any Class, in the open market or otherwise, at prices
not in excess of the net asset value of such Shares (determined
as hereinafter provided) as of a time determined by the Board of
Directors reasonably proximate as the time of purchase by the
Corporation or any such agent.
SECTION 3. For the purposes referred to in these Articles of
Incorporation, the net asset value of the Shares of a particular
Class as of any particular time shall be determined by or
pursuant to the direction of the Board of Directors as follows:
(a) The net asset value of each Share, of any Class, at any
particular time, shall be the quotient, carried out to not less
than the second decimal place, obtained by dividing the net value
of the assets of the Corporation belonging to that Class
(determined as hereinafter proved) as of such determination time
by the total number of Shares of that Class then outstanding,
including all Shares of that Class then outstanding, including
all Share of that Class which the Corporation has agreed to sell
for which the price has been determined at or prior to such
determination time and excluding Shares of that Class which the
Corporation has agreed to purchase for which the price has been
determined at or prior to such determination time.
The net value of the assets of the Corporation of a Class as of
any such 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 Class
(determined as hereinafter provided) at such time, the amount of
all liabilities belonging to that Class, including accrued
expenses, such reserves as may be set up to cover taxes and any
other liabilities, and such other deductions belonging to such
Class as in the opinion of the Board of Directors of the
Corporation are in accordance with sound accounting practice.
<PAGE>
The gross value of the assets of the Corporation of a Class at
any 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 Class at such
determination time, all determined in accordance with sound
accounting practice and giving effect to the following:
(1) the market value as of any such determination time of any
security owned by the Corporation which is traded in the NASDAQ
National Market System or is listed or admitted to trading
privileges on the New York Stock Exchange or the American Stock
Exchange shall be the last sale price or (in the case of a
security in which there has been no previously reported sale
transaction since the last determination time) the mean between
the last bid price and the last asked price, for such security on
such exchange or in such market system. In case securities being
valued are listed or admitted to trading privileges on any
securities exchange other than the New York Stock Exchange, the
American Stock Exchange or the NASDAQ National Market System, the
securities exchange, sale transactions or bid or asked prices,
which are to be used as aforesaid shall be selected by the Board
of Directors or by any officer or other person designated by the
Board of Directors for the purpose.
(2) The market value of securities traded in an
over-the-counter market and not traded in the NASDAQ National
Market System, shall be the mean between the last bid and asked
price in such market prior to such determination time.
(3) The market value of other property, including any
securities which are neither listed nor admitted to trading
privileges on any exchange or traded in an over-the-counter
market, shall be determined in good faith in such manner as
the Board of Directors shall prescribe from time to time.
(4) The determination of the market value of securities
hereunder may be made in reliance on any recognized source
of quotations or basis for ascertaining quotations.
(5) If a security is traded in more than one market, a
determination may be made as to which market most accurately
reflects the value of such security.
(b) The Board of Directors is empowered, in its discretion,
<PAGE>
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 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.
SECTION 4. The presence in person or by proxy of the holders
of a majority of the Shares of all Classes issued and outstanding
and entitled to vote thereat shall constitute a quorum for the
transaction of any business at all meetings of the shareholders,
except as otherwise provided by law or in these Ar-
Articles of Incorporation and except that where the holders of
Shares of any Class are entitled to a separate vote as a Class (a
"Separate Class") or where the holders of Shares of two or more
(but not all ) Classes are required to vote as a single class (a
"Combined Class"), the presence in person or by proxy of the
holders of a majority of the Shares 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 Classes, 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 all Classes, 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 Classes, 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 entitled to vote at such meeting shall
be present. At such adjourned meeting at which the requisite
number of Shares 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 in excess of a
majority of the Shares of all Classes or of the affected Class 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 of 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 required for action
in respect of such other matter or matters.
<PAGE>
SECTION 5. 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 the
Shares of any Class, namely, the amount of the assets,
obligations, liabilities and expenses of the Corporation
belonging 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 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 any
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 any
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 with respect to any Class; the fair value
of any asset owned by the Corporation; the number of Shares of
the Corporation of any Class issued or outstanding; the existence
of conditions permitting the postponement or payment of the
repurchase price of Shares of any 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 belonging to any Class; any question as
to whether any transaction constitutes a purchase of securities
on margin, a short sale of securities, or an 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
any Class.
SECTION 6. The Corporation is adopting its corporate title
through permission of the firm of Lord, Abbett & Co., which is
entering into a management or advisory contract with the
Corporation. Such contract shall make appropriate provisions that
upon the termination of such contract for any cause, of if such
firm or any successor deems it advisable to withdraw the right to
the use of its name, the Corporation will, at the request of such
firm or successor deems it advisable to withdraw
<PAGE>
the right to the use of its name, the Corporation will, at the
request of such firm or successor, 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 not use the
registered service mark of Lord, Abbett & Co., without the
written consent of such firm or successor. The Corporation shall
also agree in such contract that such firm or successor shall
reserve the right to grant the use of the name "Lord Abbett" or
"Lord, Abbett & Co.", or and derivative thereof, to any other
investment company or business enterprise. 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.
Article VIII
From time to time any of the provisions of these Articles of
Incorporation may be amended, altered or repealed (including any
amendment that changes the terms of any of the outstanding Shares
by classification, reclassification or otherwise), and other
provisions that might, under the statutes of the State of
Maryland at the time in force, be lawfully contained in Articles
of Incorporation may be added or inserted, upon the vote of the
holders of a majority of the Shares of all Classes or of the
affected Classes, as the case may be, at the time outstanding and
entitled to vote, and all rights at any time conferred upon the
stockholders of the Corporation by these Articles of
Incorporation are subject to the provisions of this Article VIII.
The provisions of this Article VIII shall not affect the power
and authority of the Board of Directors to further classify or
reclassify any unissued Shares from time to time pursuant to
Section 1 of Article V and these Articles of Incorporation.
IN WITNESS WHEREOF, I have signed these ARTICLES OF
INCORPORATION on this 19th day of February, 1988 and acknowledge
the same to be my act.
/S/ KENNETH B. CUTLER
Kenneth B. Cutler
EXHIBIT 99.B2
BY-LAWS
-------
of
---
LORD ABBETT GLOBAL FUND, INC.
----------------------------
ARTICLE I
---------
OFFICES
-------
SECTION 1. Principal office - The principal office of the Corporation in
-----------------
Maryland shall be in the City of Baltimore, and the name of the resident agent
in charge thereof is The Prentice- Hall Corporation Systems, Maryland.
SECTION 2. Other offices - The Corporation may also have an office in the
-------------
City and State of New York and offices at such other places as the Board of
Directors may from time to time determine.
ARTICLE II
SECTION 1. Annual Meetings - The Corporation shall not hold an annual
----------------
meeting of its stockholders in any fiscal year of the Corporation unless
required in accordance with the following sentence. The Chairman of the Board or
the President shall call an annual meeting of the stockholders when one or more
matters are required to be acted on by stockholders under the Investment Company
Act of 1940, as amended, and the Chairman of the Board, the President, a Vice
President, the Secretary or any director shall call an annual meeting of
stockholders at the request in writing of a majority of the Board of Directors
or of stockholders holding at least one quarter of the stock of the Corporation
outstanding and entitled to vote at the meeting. Any annual meeting of the
stockholders held pursuant to the foregoing sentence shall be held at such time
and at such place, within the City of New York or elsewhere, as may be fixed by
the Chairman of the Board or the President or the Board of Directors or by the
stockholders holding at least one-quarter of the stock of the Corporation
outstanding and entitled to vote, as the case may be, and as may be stated in
the notice setting forth such call, provided that any stockholders requesting
such meeting shall have paid to the Corporation the reasonably estimated cost of
preparing and mailing the notice thereof, which the Secretary shall determine
and specify to the stockholders. Any meeting of stockholders held in accordance
with this Section 1 shall for all purposes constitute the annual meeting of
stockholders for the fiscal year of the Corporation in which the meeting is held
and, without limiting the generality of the foregoing, shall be held for the
purposes of (a) acting on any such matter of matters so required to be acted on
by stockholders under the Investment Company Act of 1940, as amended, and (b)
electing directors to hold the offices of any directors who have held office for
more than one year or who have been elected by the Board of Directors to fill
vacancies which result from any cause, and for transacting such other business
as may properly be brought before the meeting. Only such business, in addition
to that prescribed by law, by the Articles of Incorporation and by these
By-laws, may be brought before such meeting as may be specified by resolution of
the Board of Directors or by writing filed with the Secretary of the Corporation
and signed by the Chairman of the Board or by the President or by a majority of
the directors or by stockholders holding at least one-quarter of the stock of
the Corporation outstanding and entitled to vote at the meeting.
SECTION 2. Special meetings - Special meetings of the stockholders for any
-----------------
purpose or purposes may be held upon call by the Chairman of the Board or by a
majority of the Board of Directors, and shall be called by the Chairman of the
Board, the President, a Vice President, the Secretary or any director at the
request in writing of a majority of the Board of Directors or of stockholders
holding at least one-quarter of the stock of the Corporation outstanding and
entitled to vote at the meeting, at such time and at such place where an annual
meeting of stockholders could be held, as may be fixed by the Chairman of the
Board, the President or the Board of Directors or by the stockholders holding at
least one-quarter of the stock of the Corporation outstanding and so entitled to
vote, as the case may be, and as may be stated in the notice setting forth such
call. Such request shall state the purpose or purposes of the proposed meeting,
and only such purpose or purposes so specified may properly be brought before
such meeting.
RESOLVED, that a paragraph be added to Section 2 of Article II of the
By-Laws of the Corporation, to read as follows:
"The Board of Directors shall promptly call a special meeting of the
stockholders of the Corporation for the purpose of voting upon the question of
removal of any director when requested in writing to do so by the record holders
of not loss than lot of the stock of the Corporation outstanding and entitled to
vote. Whenever ten or more stockholders of the Corporation, who have been
stockholders for at least six months and hold shares having a net asset value of
at least $25,000 or representing at least 1% of the outstanding stock of the
Corporation, shall state in writing their desire to communicate with other
stockholders with a view to obtaining signatures to request a meeting of
stockholders, accompanied by a form of the proposed communication, the Board of
Directors shall, within five business days, either (i) give applicants access to
a list of the names and addresses of all stockholders of record or (ii) inform
then of the approximate number of stockholders of record and the approximate
cost of sailing such communication to such stockholders. If the Board of
Directors elects to follow the course specified in the foregoing clause (ii),
the board, upon the written request of such applicants, accompanied by a tender
of the material to be mailed and of the reasonable expenses of mailing, shall,
with reasonable promptness, mail such material to all stockholders of record at
their addresses as recorded on the books of the Corporation, unless within five
business days after such tender the Board of Directors shall mail to such ten or
more stockholders and file with the Securities and Exchange Commission, together
with a copy of the material to be mailed, a written statement signed by at least
a majority of the directors to the effect that in their opinion either such
material contains untrue statements of fact or omits to state facts necessary to
make the statements contained therein not misleading, or would be in violation
of applicable law, and specifying the basis of such opinion. If the Securities
and Exchange Commission enters an order refusing to sustain any such objections
or stating that all objections sustained have been met, the Board of Directors
shall mail copies of such materials to all stockholders of record with
reasonable promptness."
SECTION 3. Notice of Meetings - Written or printed notice of every annual
------------------
or special meeting of stockholders, stating the time and place thereof and the
general nature of the business proposed to be transacted at any such meeting,
shall be delivered personally or mailed not less than 10 nor more than 90 days
previous thereto to each stockholder of record entitled to vote at the meeting
at his address as the same appears on the books of the Corporation. Meetings may
be held without notice if all of the stockholders entitled to vote are present
or represented at the meeting, or if notice is waived in writing, either before
or after the meeting, by those not present or represented at the meeting. No
notice of an adjourned meeting of the stockholders other than an announcement of
the time and place thereof at the preceding meeting shall be required.
SECTION 4. Quorum - The presence in person or by proxy of the holders
------
of a majority of the Shares of all Classes issued and outstanding and
entitled to vote thereat shall constitute a quorum for the transaction of
any business at all meetings of the shareholders except as otherwise
provided by law or in the Articles of Incorporation and except that where
the holders of Shares of any Class are entitled to a separate vote as a
Class (a "Separate Class") or where the holders of Shares of two or more
(but not all) Classes are required to vote as a single Class (a "Combined
Class"), the presence in person or by proxy of the holders of a majority of
the Shares 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 Classes, a
Separate Class or a 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 Classes, 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 holder of a majority of
the Shares of all Classes, such Separate Class of 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 Classes, 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 entitled to vote at such meeting shall be present. At such adjourned
meeting at which the requisite number of Shares entitled to vote thereat
shall be represented any business may be transacted at the meeting as
originally notified. The absence from any meeting of stockholders of the
number of Shares in excess of a majority of the Shares of all Classes or of
the affected Class 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 the Articles of Incorporation, for action upon
any given matter shall not prevent action of 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 required for action in respect of such matter or matters.
SECTION 5. Voting - All elections shall be had and all questions
------
decided by a majority of the votes cast, without regard to Class, at a duly
constituted meeting, except as otherwise provided by law or by the Articles
of Incorporation or by these By-laws and except that with respect to a
question as to which the holders of Shares of any Class or Classes are
entitled or required to vote as a Separate Class or a Combined Class, as
the case may be, such question shall be decided as to such Separate Class
or such Combined Class, as the case may be, by a majority of the votes cast
by Shares of such Separate Class or such Combined Class, as the case may
be.
With respect to all Shares having voting rights (a) a
<PAGE>
shareholder may vote the Shares owned of record by him either in person or
by proxy executed in writing by the shareholder or by his duly authorized
attorney-in-fact, provided that no proxy shall be valid after eleven months
from its date unless otherwise provided in the proxy and (b) in all
elections for directors every shareholder shall have the right to vote, in
person or by proxy, the Shares owned of record by him, for as many persons
as there are directors to be elected and for whose election he has a right
to vote.
ARTICLE III
-----------
BOARD of DIRECTORS
------------------
SECTION 1. General Powers - The property, affairs and business of the
---------------
Corporation shall be managed by the Board of Directors, provided, however, that
the Board of Directors may authorize the Corporation to enter into an agreement
or agreements with any person, corporation, association, partnership or other
organization, subject to the Board's supervision and control, for the purpose of
providing managerial, investment advisory and related services to the
Corporation which may include management or supervision of the investment
portfolio of the Corporation.
SECTION 2. Number, Class Quorum, Election, Term of office
----------------------------------------------
<PAGE>
and Qualifications - The Board of Directors of the Corporation shall
-------------------
consist of not less than three or more than fifteen persons, none of whom
need be stockholders of the Corporation. The number of directors (within
the above limits) shall be determined by the Board of Directors from time
to time, as it sees fit, by vote of a majority of the whole Board.
Directors elected shall consist of one class only. The directors shall be
elected at each annual meeting of stockholders and, whether or not elected
for a specific term, shall hold office, unless sooner removed, until their
respective successors are elected and qualify. One-third of the whole
Board, but in no event less than two, shall constitute a quorum for the
transaction of business, but if at any meeting of the Board there shall be
less than a quorum present, a majority of the directors present may adjourn
the meeting from time to time until a quorum shall have been obtained, when
any business may be transacted which might have been transacted at the
meeting as originally convened. No notice of an adjourned meeting of the
directors other than an announcement of the time and place thereof at the
preceding meeting shall be required. The acts of the majority of the
directors present at any meeting at which there is a quorum shall be the
acts of the Board, except as otherwise provided by law, by the Articles of
Incorporation or by these By laws.
<PAGE>
SECTION 3. Vacancies - The Board of Directors, by vote of a majority of the
---------
whole Board, may elect directors to fill vacancies in the Board resulting from
an increase in the number of directors or from any other cause. Directors so
chosen shall hold office until their respective successors are elected and
qualify, unless sooner displaced pursuant to law or these By- laws. The
stockholders, at any meeting called for the purpose, may, with or without cause,
remove any director by the affirmative vote of the holders of a majority of the
votes entitled to be cast, and at any meeting called for the purpose may fill
the vacancy in the Board thus caused.
SECTION 4. Regular Meetings - Regular meetings of the Board of Directors
-----------------
shall be held at such time and place, within or without the State of Maryland,
as may from time to time be fixed by Resolution of the Board or as may be
specified in the notice of any meeting. No notice of regular meetings of the
Board shall be required except as required by the Investment Company Act of
1940, as amended.
SECTION 5. Special Meetings - Special meetings of the Board of Directors
-----------------
may be called from time to time by the Chairman of the Board, the President, any
Vice President or any two directors. Each special meeting of the Board shall be
held at such place, either within or outside of the State of Maryland, as
<PAGE>
shall be designated in the notice of such meeting. Notice of each such
meeting shall be mailed to each director, at his residence or usual place
of business, at least two days before the day of the meeting, or shall be
directed to him at such place by telegraph or cable, or be delivered to him
personally not later than the day before the day of the meeting. Every such
notice shall state the time and place of the meeting but need not state the
purposes thereof, except as otherwise expressly provided in these By-Laws
or by statute.
SECTION 6. Telephonic Conference Meetings - Any meeting of the Board or any
------------------------------
committee thereof may be held by conference telephone, regardless where each
director may be located at the time, by means of which all persons participating
in the meeting can hear each other, and participation in such meeting in such
manner shall constitute presence in person at such meeting, except where the
Investment Company Act of 1940, as amended, specifically requires that the vote
of such director be cast in person.
SECTION 7. Fees and Expenses - The directors shall receive such fees and
-----------------
expenses for services to the Corporation as may be fixed by the Board of
Directors, subject however, to such limitations as may be provided in the
Articles of Incorporation. Nothing herein contained shall be construed to
preclude any
<PAGE>
director from serving the Corporation in any other capacity as an officer,
agent or otherwise and receiving compensation therefor.
SECTION 8. Transactions with Directors - Except as otherwise provided by
----------------------------
law or in the Articles of Incorporation, a director of the Corporation shall not
in the absence of fraud be disqualified from office by dealing or contracting
with the Corporation either as a vendor, purchaser or otherwise, nor in the
absence of fraud shall any transaction or contract of the Corporation be void or
voidable or affected by reason of the fact than any director, or any firm of
which any director is a member, or any corporation of which any director is an
officer, director or stockholder, is in any way interested in such transaction
or contract; provided that at the meeting of the Board of Directors, at which
said contract or transaction is authorized or confirmed, the existence of an
interest of such director, firm or corporation is disclosed or made known and
there shall be present a quorum of the Board of Directors a majority of which,
consisting of directors not so interested, shall approve such contract or
transaction. Nor shall any director be liable to account to the Corporation for
any profit realized by him from or through any such transaction or contract of
the Corporation ratified or approved as aforesaid, by reason of the fact that he
or any firm of which he is a member, or any corporation of which
<PAGE>
he is an officer, director, or stockholder was interested in such
transaction or contract. Directors so interested may be counted when
present at meetings of the Board of Directors for the purpose of
determining the existence of a quorum. Any contract, transaction or act of
the Corporation or of the Board of Directors (whether or not approved or
ratified as hereinabove provided) which shall be ratified by a majority of
the votes cast at any annual or special meeting at which a quorum is
present called for such purpose, or approved in writing by a majority in
interest of the stockholders having voting power without a meeting, shall,
except as otherwise provided by law, be valid and as binding as though
ratified by every stockholder of the Corporation.
SECTION 9. Committees - The Board of Directors may, by resolution adopted
----------
by a majority of the whole Board, designate one or more committees each such
committee to consist of two or more directors of the Corporation, which, to the
extent permitted by law and provided in said resolution, shall have and may
exercise the powers of the Board over the business and affairs of the
Corporation, and may have power to authorize the seal of the Corporation to be
affixed to all papers which may require it. Such committee or committees shall
have such name or names as may be determined from time to time by resolution
adopted by the
<PAGE>
Board of Directors. A majority of the members of any such committee may
determine its action and fix the time and place of its meetings, unless the
Board of Directors, shall otherwise provide. The Board of Directors shall
have power at any time to change the membership of, to fill vacancies in,
or to dissolve any such committee.
SECTION 10. Written Consents - Any action required or permitted to be taken
----------------
at any meeting of the Board of Directors or by any committee thereof may be
taken without a meeting, if a written consent thereto is signed by all members
of the Board or of such committee, as the case may be, and such written consent
is filed with the minutes or proceedings of the Board or committee.
SECTION 11. Waiver of Notice - Whenever under the provisions of these
----------------
By-Laws, or of the Articles of Incorporation, or of any of the laws of the State
of Maryland, or other applicable statute, the Board of Directors is authorized
to hold any meeting or take any action after notice or after the lapse of any
prescribed period of time, a waiver thereof, in writing, signed by the person or
persons entitled to such notice or lapse of time, whether signed before or after
the time of meeting or action stated herein, shall be deemed equivalent thereto.
The presence at any meeting of a person or persons entitled to notice
<PAGE>
thereof shall be deemed a waiver of such notice as to such person or
persons.
ARTICLE IV
----------
OFFICERS
--------
SECTION 1. Number and Designation - The Board of Directors shall each year
-----------------------
appoint from among their members a Chairman and a President of the Corporation,
and shall appoint one or more Vice Presidents, a Secretary and a Treasurer and,
from time to time, any other officers and agents as it may deem proper. Any two
of the above-mentioned offices, except those of the President and a Vice
President, may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument in more than one capacity if such
instrument be required by law or by these By-laws to be executed, acknowledged
or verified by any two or more officers.
SECTION 2. Term of office - The term of office of all officers shall be one
--------------
year or until their respective successors are chosen; but any officer or agent
chosen or appointed by the Board of Directors may be removed, with or without
cause, at any time, by the affirmative vote of a majority of the members of the
Board then in office.
SECTION 3. Duties - Subject to such limitations as the Board
------
<PAGE>
of Directors may from time to time prescribe, the officers of the
Corporation shall each have such powers and duties as generally appertain
to their respective offices, as well as such powers and duties as from time
to time may be conferred by the Board of Directors.
ARTICLE V
---------
CERTIFICATE OF STOCK
--------------------
SECTION 1. Form and Issuance - Each stockholder of the Corporation, of a
-----------------
particular Class, shall be entitled upon request, to a certificate or
certificates, in such form as the Board of Directors may from time to time
prescribe, which shall represent and certify the number of shares of stock of
the Corporation of that Class of stock owned by such stockholder. The
certificates for shares of stock of the Corporation shall bear the signature,
either manual or facsimile, of the Chairman of the Board, the President or a
Vice President and the Treasurer or an Assistant Treasurer or the Secretary or
an Assistant Secretary, and shall be sealed with the seal of the Corporation or
bear a facsimile of such seal. The validity of any stock certificate shall not
be affected if any officer whose signature appears thereon ceases to be an
officer of the Corporation before
<PAGE>
such certificate Is issued.
SECTION 2. Transfer of Stock - The shares of stock of the Corporation of
-----------------
any Class shall be transferable on the books of the Corporation by the holder
thereof in person or by a duly authorized attorney, upon surrender for
cancellation of a certificate or certificates for a like number of shares, with
a duly executed assignment and power of transfer endorsed thereon or attached
thereto, or, if no certificate has been issued to the holder in respect of
shares of stock of the Corporation, upon receipt of written instructions, signed
by such holder, to transfer such shares from the account maintained in the name
of such holder by the Corporation or its agent. Such proof of the authenticity
of the signatures as the Corporation or its agent may reasonably require shall
be provided.
SECTION 3. Lost, Stolen, Destroyed and Mutilated Certificates - The holder
---------------------------------------------------
of any stock of the Corporation of any Class shall immediately notify the
Corporation of any loss, theft, destruction or mutilation of any certificate
therefore, and the Board of Directors may, in its discretion, cause to be issued
to him a new certificate or certificates of stock of the same Class, upon the
surrender of the mutilated certificate or in case of loss, theft or destruction
of the certificate upon satisfactory proof of such loss, theft, or destruction;
and the
<PAGE>
Board of Directors may, in its discretion, require the owner of the lost,
stolen or destroyed certificate, or his legal representatives, to give to
the Corporation and to such registrar or transfer agent as may be
authorized or required to countersign such new certificate or certificates
a bond, in such sum as they may direct, as indemnity against any claim that
may be made against them or any or them on account of or in connection with
the alleged loss, theft, or destruction of any such certificates.
SECTION 4. Record Date - The Board of Directors may fix, in advance, a date
-----------
as the record date for the purpose of determining stockholders, of any Class,
entitled to notice of, or to vote at, any meeting of stockholders of any Class,
or stockholders of any Class for any other proper purpose. Such date, if any
case, shall be not more than 90 days, and in case of a meeting of stockholders,
not less than 10 days, prior to the date on which the particular action
requiring such determination of stockholders is to be taken. In lieu of fixing a
record date, the Board of Directors may provide that the stock transfer books
shall be closed for a stated period but not to exceed, in any case, 20 days
prior to the date of any meeting of stockholders or the date for payment of any
divided or the allotment of rights. If the stock transfer books are closed for
the purpose of
<PAGE>
determining stockholders entitled to notice of or to vote at a meeting of
stockholders or the date for payment of any dividend or the allotment of
rights. If the stock transfer books are closed for the purpose of
determining stockholders entitled to notice of or to vote at a meeting of
stockholders, such books shall be closed for at least 10 days immediately
preceding such meeting. If no record date for the determination of
stockholders entitled to notice of, or to vote at, a meeting of
stockholders shall be at the close of business on the day on which notice
of and with such surety or sureties, as the meeting is mailed or the day 30
days before the meetings whichever is the closer date to the meeting, and
the record date for the determination of stockholders entitled to receive
payment of a dividend or an allotment of any rights shall be at the close
of business on the day on which the resolution of the Board of Directors
declaring the dividend or allotment of rights is adopted, provided that the
payment or allotment date shall not be more than 90 days after the date of
the adoption of such resolution.
ARTICLE VI
----------
CORPORATE BOOKS
---------------
The books of the Corporation, except the original or a duplicate stock
ledger, may be kept outside the State of Maryland
<PAGE>
at such place or places as the Board of Directors may from time to time
determine. The original or duplicate stock ledger, may be kept outside the State
of Maryland at such place or places as the Board of Directors may from time to
time determine. The original or duplicate stock ledger shall be maintained at
the office of the Corporation's transfer agent.
ARTICLE VII
-----------
SIGNATURES
----------
Except as otherwise provided in these By-Laws or as the Board of Directors
may generally or in particular cases authorize the execution thereof, in some
other manner, all deeds, leases, transfers, contracts, bonds, notes, checks,
drafts and other obligations made, accepted or endorsed by the Corporation and
all endorsements, assignments, transfers, stock powers or other instruments of
transfer of securities owned by or standing in the name of the Corporation shall
be signed or executed by two officers of the Corporation, who shall be the
Chairman, the President or a Vice President and a Vice President, the Secretary
or the Treasurer.
ARTICLE VIII ------------ FISCAL YEAR ----------- The fiscal year of the
Corporation shall be established by resolution of the Board of Directors of the
Corporation.
<PAGE>
ARTICLE IX
----------
CORPORATE SEAL
--------------
The corporate seal of the Corporation shall consist of a flat faced
circular die with the word "Maryland" together with the name of the Corporation,
the year of its organization, and such other appropriate legend as the Board of
Directors may from time to time determine, cut or engraved thereon. In lieu of
the corporate seal, when so authorized by the Board of Directors or a duly
empower red committee thereof, a facsimile thereof may be impressed or affixed
or reproduced.
ARTICLE X
---------
INDEMNIFICATION
---------------
As part of the consideration for agreeing to serve and serving as a
director of the Corporation, each director of the Corporation shall be
indemnified by the Corporation against every judgment, penalty, fine settlement,
and reasonable expense (including attorneys' fees) actually incurred by the
director in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, in which
the director was, is, or is threatened to be made a named defendant or
respondent (or otherwise becomes a party) by reason of such director's service
in that capacity or
<PAGE>
status as such, and the amount of every such judgment, penalty, fine, settlement
and reasonable expense so incurred by the director shall be paid by the
Corporation or, if paid by the director, reimbursed to the director by the
Corporation, subject only to the conditions and limitations imposed by the
applicable provisions of Section 2-418 of the Corporations and Associations
Article of the Annotated Code of the State of Maryland and by the provisions of
Section 17 (h) of the United States Investment Company Act of 1940 as
interpreted and as required to be implemented by Securities and Exchange
Commission Release No. IC-1330 of September 4, 1980. The foregoing shall not
limit the authority of the Corporation to indemnify any of its officers,
employees, or agents to the extent consistent with applicable law.
ARTICLE XI
----------
AMENDMENT
---------
All By-Laws of the Corporation shall be subject to alteration, amendment,
or repeal, and new By-Laws not inconsistent with any provision of the Articles
of Incorporation of the Corporation may be made, either by the affirmative vote
of the holders of record of a majority of the outstanding stock of the
Corporation entitled to vote in respect thereof, given at an annual meeting or
at any special meeting, provided notice of the
<PAGE>
proposed alteration, amendment or repeal of the proposed By-Laws is included in
or accompanies the notice of such meeting, or by the affirmative vote of a
majority of the whole Board of Directors given at a regular or special meeting
of the Board of Directors, provided that the notice of any such special meeting
indicates that the By-Laws are to be altered, amended, repealed, or that new
By-Laws are to be adopted.
<PAGE>
ARTICLE XII
-----------
COMPLIANCE WITH INVESTMENT COMPANY ACT OF 1940
----------------------------------------------
Investment Company Act of 1940 - No provision of the By-Laws of the
Corporation shall be given effect to the extent inconsistent with the
requirements of the Investment Company Act of 1940, as amended.
EXHIBIT 99.B6
DISTRIBUTION AGREEMENT
AGREEMENT made this 9th day of September, 1988 by and between LORD
ABBETT GLOBAL FUND, INC. a Maryland corporation (hereinafter called the
"Corporation"), and LORD, ABBETT & CO, a New York partnership (hereinafter
called the "Distributor").
WHEREAS, the Corporation desires to enter into an agreement with the
Distributor for the purpose of finding purchasers for its securities which
are issued in various Series, and the Distributor is desirous of
undertaking to perform these services upon the terms and conditions
hereinafter provided.
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 Corporation hereby appoints the Distributor its exclusive
selling agent for the sale of its shares of capital stock, of all classes,
and all other securities now or hereafter created or issued by the
Corporation (except notes and other evidences of indebtedness issued for
borrowed money), pursuant to paragraph 2 of this Agreement, and the
Corporation agrees to issue (and upon request of its shareholders make
delivery of certificates for) its shares of stock or other securities,
subject to the provisions of its Articles of Incorporation, to purchasers
thereof and against payment of the consideration to be received by the
Corporation therefor. The Distributor may appoint one or more independent
broker-dealers and the Distributor or any such broker-dealer may transmit
orders to the Corporation for acceptance at its office in New York. Such
shares of stock shall be registered in such name or names and amounts as
the Distributor or any such broker-dealer may request from time to time,
and all shares of stock when so paid for and issued shall be fully paid and
non-assessable.
2. The Distributor will act as exclusive selling agent for the
Corporation in selling shares of its stock.
The Distributor agrees to sell exclusively through independent
broker-dealers and not through agents of the Distributor or the
Corporation during the initial offering described in the Corporation's
first prospectus, and agrees to use its best efforts to find
purchasers for shares of stock of the Corporation to be offered;
provided however, that the services of the Distributor under this
Agreement are not deemed to be exclusive, and nothing in this
Agreement shall prevent Distributor, or any officer, director, partner
or employee thereof, from providing similar services to other
investment companies and other clients or to engage in other
activities.
The sales charge or premium relating to each class of shares of
capital stock of the Corporation shall be determined by the Board of
Directors of the Corporation, but in no event shall the sales charge
or premium exceed the maximum rate permitted under Federal
regulations, and the amount to be retained by the Corporation on any
sale of its shares of capital stock shall in each case be the net
asset value thereof (determined as provided in the Articles of
Incorporation of the Corporation). From the premium the Corporation
agrees to pay the Distributor a sales commission. The Distributor may
allow concessions from such sales commissions. In such event the
amount of the payment hereunder by the Corporation to the Distributor
shall be the difference between the sales commission and any
concessions which have been allowed in accordance herewith. The sales
commission payable to the Distributor shall not exceed the premium.
Recognizing the need for providing an incentive to sell and
providing necessary and continuing informational and investment
services to stockholders of the Corporation, the Corporation or the
Distributor (by agreement) may pay independent broker dealers a
periodic servicing fee based on the net asset value of all shareholder
accounts of such broker-dealers.
3. Notwithstanding anything herein to the contrary, sales and
distributions of the Corporation's capital stock may be made upon the
following special terms:
<PAGE>
(a) Capital gains distributions and income dividends on shares
of the Corporation's stock may be reinvested by shareholders
at net asset value without any sales commission.
(b) Shares of stock may be issued by the Corporation at net
asset value without any sales commission in connection with
offers of exchange between investment companies having the
same Distributor.
(c) Shares of stock may be issued by the Corporation at net
asset value without a sales commission or at a reduced sales
commission as may from time to time be permitted by rules of
the Securities and Exchange Commission under the Investment
Company Act of 1940.
4. The independent broker-dealers who sell the Corporation's shares
may also render other services to the Corporation, such as executing
purchases and sales of portfolio securities, providing statistical
information, and similar services. The receipt of compensation for such
other services shall in no way reduce the amount of the sales commissions
payable hereunder by the Corporation to the Distributor or the amount of
the commissions, concessions or fees allowed.
5. The Distributor agrees to act as agent of the Corporation in
connection with the repurchase of shares of capital stock of the
Corporation, or in connection with exchanges of shares between investment
companies having the same Distributor, and the Corporation agrees to advise
the Distributor of the net asset value of its shares of stock as frequently
as may be mutually agreed, and to accept shares duly tendered to the
Distributor. The net asset value shall be determined as provided in the
Articles of Incorporation of the Corporation.
6. The Corporation will pay all fees, costs, expenses and charges in
connection with the issuance, federal registration, transfer, redemption
and repurchase of its shares of capital stock, including without
limitation, all fees, costs, expenses and charges of transfer agents and
registrars, all taxes and other Governmental charges, the costs of
qualifying or continuing the qualifications of the Corporation as
broker-dealer, if required, and of registering the shares of the
Corporation's capital stock under the state blue sky laws, or similar laws
of any jurisdiction (domestic or foreign), costs of preparation and mailing
prospectuses to its shareholders, and any other cost, expense or charge not
expressly assumed by the Distributor hereunder. The Corporation will also
furnish to the Distributor daily such information as may reasonably be
requested by the Distributor in order that it may know all of the facts
necessary to sell shares of the Corporation's stock.
7. The Distributor agrees to pay the cost of all sales literature and
other material which it may require or think desirable to use in connection
with sale of such shares, including the cost of reproducing the offering
prospectus furnished to it by the Corporation. The Corporation agrees to
use its best efforts to qualify its shares of stock for sale under the laws
of such states of the United States and such other jurisdictions (domestic
or foreign) as the Distributor may reasonably request.
If the Distributor pays for other expenses of the Corporation or
furnishes the Corporation with services, the cost of which is to be
borne by the Corporation under this Agreement, the Distributor shall
not be deemed to have waived its rights under this Agreement to have
the Corporation pay for such expenses or provide such services in the
future.
8. The Distributor agrees to use its best efforts to find purchasers
for shares of stock of the Corporation and to make reasonable efforts to
sell the same so long as in the judgment of the Distributor a substantial
distribution can be obtained by reasonable efforts. The Distributor is not
authorized to act otherwise than in accordance with applicable laws.
<PAGE>
9. Neither this Agreement nor any other transaction between the
parties hereto pursuant to this Agreement shall be invalidated or in any
way affected by the fact that any or all of the directors, officers,
stockholders, or other representatives of the Corporation are or may be
interested in the Distributor, or any successor or assignee thereof, or
that any or all of the directors, officers, partners, or other
representatives of the Distributor are or may be interested in the
Corporation, except as otherwise may be provided in the Investment Company
Act of 1940.
10. The Distributor agrees that it will not sell for its own account
to the Corporation any stocks, bonds or other securities of any kind or
character, except that if it shall own any of the Corporation's shares of
stock or other securities, it may sell them to the Corporation on the same
terms as any other holder might do.
11. Other than to abide by the provisions hereof and render the
services called for hereunder in good faith, the Distributor assumes no
responsibility under this Agreement 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 Corporation or any of the stockholders, creditors, directors, or
officers of the Corporation; provided, however, that nothing herein shall
be deemed to protect the Distributor against any liability to the
Corporation 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.
12. The Distributor agrees that it shall observe and be bound by all
of the terms of the Articles of Incorporation, including any amendments
thereto, of the Corporation which shall in any way limit or restrict or
prohibit or otherwise regulate any action of the Distributor.
13. This Agreement shall continue in force for two years from the date
hereof, and it is renewable annually thereafter by specific approval of the
Board of Directors of the Corporation or by vote of a majority of the
outstanding voting securities of the Corporation; any such renewal shall be
approved by the vote of a majority of the directors who are not parties to
this Agreement or interested persons of the Distributor or of the
Corporation, cast in person at a meeting called for the purpose of voting
on such renewal.
This Agreement may be terminated without penalty at any time by
the Board of Directors of the Corporation or by vote of a majority of
the outstanding voting securities of the Corporation on 60 days'
written notice. This Agreement shall automatically terminate in the
event of its assignment. The terms "interested persons", "assignment"
and "vote of a majority of the outstanding voting securities" shall
have the same meaning as those terms are defined in the Investment
Company Act of 1940.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to
be executed by its duly authorized officers and its corporate seal to
be affixed thereto, and the Distributor has caused this Agreement to
be executed by one of its partners all on the day and year first above
written.
LORD ABBETT GLOBAL FUND, INC.
By:/S/ RONALD P. LYNCH
Chairman of the Board
Attest:
/S/ THOMAS F. KONOP
Assistant Secretary
LORD, ABBETT & CO.
By: /S/ KENNETH B. CUTLER
A Partner
EXHIBIT 99.B11
CONSENT OF INDEPENDENT AUDITORS
Lord Abbett Global Fund, Inc.:
We consent to the use in Post-Effective Amendment No. 7 to Registration
Statement No. 33-20309 of our report dated February 10, 1995 appearing in the
annual report to shareholders and to the reference to us under the captions
"Financial Highlights" in the Prospectus and "Investment Advisory and Other
Services" and "Financial Statements" in the Statement of Additional Information,
both of which are part of such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
New York, New York
April 24, 1995
EXHIBIT 99.B16
Lord Abbett Global Fund, Inc.
(Equity Series)
Post Effective Amendment No. 7 on Form N-1A
Results of a $1,000 investment reflecting the maximum sales charge (5.75) and
the reinvestment of all distributions:
Period Ending December 31, 1994
1 Year 5 Years
------ -------
$1,189 $1,385
P = 1,000 P = 1,000
N = 1 N = 5
ERV = 1,189 ERV = 1,385
T = Average annual total return
P(1+T)N = ERV
1,000 (1+T)1 = 1,189 1,000 (1+T)5 = 1,385
(1+T) = 1,189 (1+T)5 = 1,385
----- -----
1,000 1,000
1+T = 1,189 1+T = [1,385].20
----- -------
1,000 [1,000]
T = [1,189] - 1 T = [1,385].20 -1
------- -------
[1,000] [1,000]
T = 18.90% T = 6.73%
*The Fund's Equity Series commenced operations on 9/30/88
<PAGE>
Lord Abbett Global Fund, Inc.
(Income Series)
Post Effective Amendment No. 7 on Form N-1A
Results of a $1,000 investment reflecting the maximum sales charge (4.75) and
the reinvestment of all distributions:
Period Ending December 31, 1994
1 Year 5 Years
------ -------
$1,056 $1,579
P = 1,000 P = 1,000
N = 1 N = 5
ERV = 1,056 ERV = 1,579
T = Average annual total return
P(1+T)N = ERV
1,000 (1+T)1 = 1,056 1,000 (1+T)5 = 1,579
(1+T) = 1,056 (1+T)5 = 1,579
----- -----
1,000 1,000
1+T = 1,056 1+T = [1,579].20
----- -------
1,000 [1,000]
T = [1,056] - 1 T = [1,579].20 - 1
------- -------
[1,000] [1,000]
T = 5.60% T = 9.57%
*The Fund's Income Series commenced operations on 9/30/88
<PAGE>
Calculation of yield appearing in the Statement of Additional Information for
Lord Abbett Global Fund - Income Series Post- Effective Amendment No. 7 on Form
N-1A
YIELD FORMULA
For the 30 Days
Ended December 30, 1994
YIELD = 2[(a-b +1)6-1] = 6.53%
cd
Where: a = Fund dividends and interest earned during the period in the
amount of $1,650,059
b = Fund expenses accrued for the period (net of reimbursements)
in the amount of $226,364
c = The average daily number of Series shares outstanding during
the period that were entitled to receive dividends were
31,638,129
d = The maximum offering price per Series share on the last day of
the period was $ 8.38
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
ANNUAL REPORT.
</LEGEND>
<CIK> 0000829901
<NAME> LORD ABBETT GLOBAL FUND, INC.
<SERIES>
<NUMBER> 03
<NAME> EQUITY SERIES
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 74260688
<INVESTMENTS-AT-VALUE> 75581174
<RECEIVABLES> 12301181
<ASSETS-OTHER> 8991837
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 96874192
<PAYABLE-FOR-SECURITIES> 12257180
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 877870
<TOTAL-LIABILITIES> 13135050
<SENIOR-EQUITY> 7247971
<PAID-IN-CAPITAL-COMMON> 81531453
<SHARES-COMMON-STOCK> 7247971
<SHARES-COMMON-PRIOR> 5759777
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 115073
<ACCUMULATED-NET-GAINS> 1061256
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1320486
<NET-ASSETS> 83739142
<DIVIDEND-INCOME> 1511556
<INTEREST-INCOME> 435310
<OTHER-INCOME> 0
<EXPENSES-NET> 1294021
<NET-INVESTMENT-INCOME> 652845
<REALIZED-GAINS-CURRENT> 5923523
<APPREC-INCREASE-CURRENT> (5986872)
<NET-CHANGE-FROM-OPS> (388770)
<EQUALIZATION> 26752
<DISTRIBUTIONS-OF-INCOME> 668159
<DISTRIBUTIONS-OF-GAINS> 5254330
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2246737
<NUMBER-OF-SHARES-REDEEMED> 1234221
<SHARES-REINVESTED> 475678
<NET-CHANGE-IN-ASSETS> 12106658
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 767304
<OVERDISTRIB-NII-PRIOR> 1234887
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 621448
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1294021
<AVERAGE-NET-ASSETS> 82766775
<PER-SHARE-NAV-BEGIN> 12.44
<PER-SHARE-NII> .10
<PER-SHARE-GAIN-APPREC> (.112)
<PER-SHARE-DIVIDEND> .10
<PER-SHARE-DISTRIBUTIONS> .777
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.55
<EXPENSE-RATIO> 1.56
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACED FROM THE ANNUAL
REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
ANNUAL REPORT.
</LEGEND>
<CIK> 0000829901
<NAME> LORD ABBETT GLOBAL FUND, INC.
<SERIES>
<NUMBER> 04
<NAME> INCOME SERIES
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 279649870
<INVESTMENTS-AT-VALUE> 268179687
<RECEIVABLES> 113070349
<ASSETS-OTHER> 9613264
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 390863300
<PAYABLE-FOR-SECURITIES> 139421013
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1952442
<TOTAL-LIABILITIES> 141373455
<SENIOR-EQUITY> 31266
<PAID-IN-CAPITAL-COMMON> 283211092
<SHARES-COMMON-STOCK> 31266119
<SHARES-COMMON-PRIOR> 30755488
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 1273879
<ACCUMULATED-NET-GAINS> (21016177)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (11470183)
<NET-ASSETS> 249489845
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 23698030
<OTHER-INCOME> 0
<EXPENSES-NET> 2778056
<NET-INVESTMENT-INCOME> 20919974
<REALIZED-GAINS-CURRENT> (20393865)
<APPREC-INCREASE-CURRENT> (7611208)
<NET-CHANGE-FROM-OPS> (10179696)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 18359997
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 5415502
<NUMBER-OF-SHARES-SOLD> 5647641
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