<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-b(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
LORD ABBETT GLOBAL FUND, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
--------------------
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[X]Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1)Amount Previously Paid:
2)Form, Schedule or Registration Statement No.:
3)Filing Party:
4)Date Filed:
<PAGE>
LORD ABBETT GLOBAL FUND, INC.
INVESTMENT MANAGEMENT
THE GM BUILDING 767 FIFTH AVENUE NEW YORK NEW YORK 10153
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
the Lord Abbett Global Fund, Inc. scheduled to be held on June 19, 1996, at
11:00 a.m., at the General Motors Building, 767 Fifth Avenue, New York, New
York. Your Board of Directors looks forward to greeting those shareholders who
are able to attend.
At the meeting, in addition to the election of directors and approval of
the appointment of auditors, you will be asked to vote on a proposed revision of
your Series' fundamental investment policies and restrictions, a new 12b-1 Plan
and Distribution Agreement for your Series and an amendment to the Fund's
Articles of Incorporation.
Such proposals, if approved, are intended to provide for greater
flexibility in the future management of the Fund's portfolio, as well as to
maintain the competitive position of the Fund.
In addition, shareholders of the Equity Series will be asked to vote on
a new Sub-Investment Management Agreement and payment of sub-advisory fees
thereunder for the period through shareholder approval of the new agreement.
All proposals are fully described in the enclosed proxy statement. I
encourage you to review the proxy statement for all the details regarding the
meeting agenda.
Your Board of Directors believes these proposals are in the best interest
of the Fund and its shareholders and unanimously recommends a vote "for" all
proposals. Regardless of the number of shares you own, it is important that
they be represented and voted. Accordingly, please sign, date and mail the
enclosed proxy card in the postage paid return envelope.
Your prompt response will help save the Fund the expense of additional
solicitation.
Sincerely,
/s/ Ronald P. Lynch
Ronald P. Lynch
Chairman of the Board
April 17, 1996
<PAGE>
LORD ABBETT GLOBAL FUND, INC.
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
JUNE 19, 1996
PROXY STATEMENT
YOU ARE URGED TO SIGN AND MAIL THE PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE WHETHER YOU OWN A FEW OR MANY SHARES. YOUR PROMPT RETURN OF THE PROXY
MAY SAVE THE FUND THE NECESSITY AND EXPENSE OF FURTHER SOLICITATIONS TO INSURE
A QUORUM AT THIS MEETING.
<PAGE>
LORD ABBETT GLOBAL FUND, INC.
767 Fifth Avenue
New York, New York 10153
Notice of Annual Meeting of Shareholders
To Be Held June 19, 1996 April 17, 1996
Notice is given hereby of an annual meeting of the shareholders of Lord Abbett
Global Fund, Inc. (the "Fund"), comprising the Equity Series and the Income
Series (each, a "Series", and collectively the "Series"). The meeting will be
held at the offices of Lord, Abbett & Co., on the 11th floor of The General
Motors Building, 767 Fifth Avenue, New York, New York, on Wednesday, June 19,
1996, at 11:00 a.m., for the following purposes and to transact such other
business as may properly come before the meeting and any adjournments thereof.
ITEM 1. To elect directors (both Series);
ITEM 2. To ratify or reject the selection of Deloitte & Touche LLP as
independent public accountants of the Fund for the current fiscal year
(both Series);
ITEM 3. To approve or disapprove certain changes in the fundamental investment
policies and restrictions of each Series (both Series);
ITEM 4. To approve or disapprove a new Distribution Plan and Agreement for the
existing class of shares of each Series pursuant to Rule 12b-1 under
the In vestment Company Act of 1940 (both Series);
ITEM 5. To approve or disapprove an amendment to the Fund's Articles of
Incorporation (i) authorizing the Board of Directors to create classes
-
within series of shares of capital stock; and (ii) confirming that the
--
board may impose contingent deferred sales charges in connection with
new classes of shares to be created (this change will have no effect
on your shares) (both Series); and
ITEM 6. To approve or disapprove (i) a new Sub-Investment Management Agreement
-
with respect to the Equity Series between Lord, Abbett & Co. ("Lord
Abbett") and Dunedin Fund Managers Limited ("Dunedin"), containing the
same terms and conditions and providing for payment of a sub-advisory
fee on the same basis as contained and provided for with respect to
the Equity Series in the prior Sub-Investment Management Agreement
between Lord Abbett and Dunedin relating to the Fund, and (ii) payment
--
to Dunedin of sub-advisory fees for the period from March 19, 1996
through the date of shareholder approval of the new Sub-Investment
Management Agreement (Equity Series only).
By order of the Board of Directors
Kenneth B. Cutler
Vice President and Secretary
<PAGE>
SHAREHOLDERS OF BOTH SERIES ARE BEING ASKED TO VOTE WITH RESPECT TO ITEMS 1, 2,
3, 4 AND 5 ABOVE. ONLY SHAREHOLDERS OF THE EQUITY SERIES ARE BEING ASKED TO
VOTE WITH RESPECT TO ITEM 6.
The Board of Directors has fixed the close of business on March 22, 1996 as the
record date for determination of shareholders of the Fund entitled to notice of
and to vote at the meeting. Shareholders are entitled to one vote for each share
held. As of March 22, 1996, there were 7,329,701 shares of the Equity Series,
29,911,491 shares of the Income Series and 34,241,192 shares of the Fund issued
and outstanding.
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD.
SIGN, DATE AND RETURN IT IN THE ENVELOPE PROVIDED.
TO SAVE THE COST OF ADDITIONAL SOLICITATIONS, PLEASE MAIL YOUR PROXY PROMPTLY.
<PAGE>
LORD ABBETT GLOBAL FUND, INC.
767 Fifth Avenue
New York, New York 10153
April 17, 1996
PROXY STATEMENT
---------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors of Lord Abbett Global Fund,
Inc., a diversified open-end management investment company incorporated under
the laws of Maryland (the "Fund"), for use at an annual meeting of shareholders
of the Fund to be held at 11:00 a.m. on Wednesday, June 19, 1996 at the offices
of Lord, Abbett & Co., the investment manager and principal underwriter of the
Fund ("Lord Abbett"), on the 11th floor of the General Motors Building, 767
Fifth Avenue, New York, New York 10153, and at any adjournments thereof. This
proxy statement and the enclosed proxy card are first being mailed to
shareholders on or about April 17, 1996.
At the close of business on March 22, 1996 (the "Record Date"), there
were issued and outstanding 7,329,701 shares of the Equity Series and 26,911,491
shares of the Income Series (each such series a "Series", and collectively the
"Series") of the Fund, and 34,241,192 shares of the Fund. Only shareholders of
record at the close of business on the Record Date are entitled to notice of,
and to vote at, the annual meeting or any adjournment thereof. Proxies will be
solicited by mail. Additional solicitations may be made by telephone, facsimile
or personal contact by officers or employees of Lord Abbett and its affiliates.
The Fund may also request brokerage houses, custodians, nominees, and
fiduciaries who are shareholders of record to forward proxy materials to
beneficial owners. D.F. King & Co. has been retained to assist in the
solicitation of proxies at an estimated cost of $20,000. The cost of the
solicitation will be borne by the Fund, except that Dunedin Fund Managers
Limited ("Dunedin") will bear costs attributable to the adoption of the Sub-
Investment Management Agreement between Lord Abbett and Dunedin.
Shareholders are entitled to one vote for each full share, and a pro-
portionate vote for each fractional share, of the Fund held as of the Record
Date. Under Maryland law, shares owned by two or more persons (whether as joint
tenants, co-fiduciaries or otherwise) will be voted as follows, unless a written
instrument or court order providing to the contrary has been filed with the
Secretary of the Fund: (1) if only one votes, that vote binds all; (2) if more
- -
than one votes, the vote of the majority binds all; and (3) if more than one
-
votes and the vote is evenly divided, the
<PAGE>
vote will be cast proportionately. If the enclosed form of proxy is properly
executed and returned in time to be voted at the meeting, the proxies named
therein will vote the shares represented by the proxy in accordance with the
instructions marked thereon. Unmarked proxies will be voted FOR each of the
items described in this Proxy Statement and any other matters as deemed
appropriate. A proxy may be revoked by the signer at any time at or before the
meeting by written notice to the Fund, by execution of a later-dated proxy or by
voting in person at the meeting.
1. ELECTION OF DIRECTORS
The nominees for election as directors are Ronald P. Lynch, Robert S.
Dow, Thomas S. Henderson, E. Thayer Bigelow, Stewart S. Dixon, John C. Jansing,
C. Alan MacDonald, Hansel B. Millican, Jr. and Thomas J. Neff, who have been
nominated by the Board of Directors to succeed themselves. The individuals
named as proxies intend to vote the proxies, unless otherwise directed, in favor
of the election of such nominees, each of whom has agreed to continue to serve
as a director of the Fund. Management of the Fund has no reason to believe that
any nominee will be unable to serve as a director. If any nominee should be
unable to serve as a director, it is the intention of the individuals named as
proxies to vote for the election of such person or persons as the Board of
Directors may, in its discretion, recommend.
Information about each person nominated for election as a director is set
forth in the following table. Except where indicated, each of the persons
listed in the table has held the principal occupation listed opposite his name
for the past five years.
<TABLE>
<CAPTION>
Names and Ages of Principal Occupation Director of
Directors of the Fund and Directorships the Fund Since
- -------------------------- ---------------------------------- --------------
<C> <S> <C>
Ronald P. Lynch /1,2/ Chairman of the Board of the Fund. 1988
60 Partner of Lord Abbett.
Robert S. Dow /1,2/ President of the Fund. 1995
51 Partner of Lord Abbett.
Thomas S. Henderson/1,2/ Vice President of the Fund. 1988
64 Partner of Lord Abbett.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Names and Ages of Principal Occupation Director of
Directors of the Fund and Directorships the Fund Since
- -------------------------- ---------------------------------- --------------
<C> <S> <C>
E. Thayer Bigelow /2/ President and Chief Executive of Time 1994
54 Warner Cable Programming, Inc.
Formerly President and Chief
Operating Officer of Home Box
Office, Inc.
Stewart S. Dixon /2/ Partner in the law firm of Wildman, 1988
65 Harrold, Allen & Dixon.
John C. Jansing /2/ Retired. Former Chairman of Inde- 1988
70 pendent Election Corporation of
America, a proxy tabulating firm.
C. Alan MacDonald /2/ General Partner, The Marketing Part- 1988
62 nership, Inc., a full service marketing
consulting firm. Formerly Chairman
and Chief Executive Officer of
Lincoln Snacks, Inc., manufacturer of
branded snack foods (1992-1994).
Formerly President and Chief Execu-
tive Officer of Nestle Foods Corp.,
and prior to that, President and Chief
Executive Officer of Stouffer Foods
Corp., both subsidiaries of Nestle SA,
Switzerland. Currently serves as
Director of Den West Restaurant Co.,
J. B. Williams, and Fountainhead
Water Company.
Hansel B. Millican, Jr./2/ President and Chief Executive Officer 1988
67 of Rochester Button Company.
Thomas J. Neff /2/ President, Spencer Stuart & Asso- 1988
58 ciates, an executive search consulting
firm.
</TABLE>
1."Interested person" of the Fund and Lord Abbett, within the meaning of the
Investment Company Act of 1940, as amended, because of his association with Lord
Abbett.
2.Also an officer and/or a director or trustee of other Lord Abbett-sponsored
funds.
Listed below is the number of shares of the Fund owned beneficially by
each director as of March 22, 1996, together with the number of "phantom" shares
credited to the account of each director under a plan (the "Deferred Plan")
permitting
3
<PAGE>
independent directors to defer their directors' fees and to have the deferred
amounts deemed invested in shares of the Fund for later payment. Also shown is
the number of shares owned beneficially by the directors and officers as a
group, together with such "phantom" shares credited to the accounts of directors
as a group. In each case, the amounts shown are less than 1% of the Fund's
outstanding capital stock.
<TABLE>
<CAPTION>
Number of Shares Beneficially
Owned
Name and Phantom Shares/1/
- --------------------------- -----------------------------
<S> <C>
Ronald P. Lynch 43,707
Robert S. Dow 20,023
Thomas S. Henderson 22,341
E. Thayer Bigelow 177
Stewart S. Dixon 137,775
John C. Jansing 2,072
C. Alan MacDonald 624
Hansel B. Millican, Jr. 4,481
Thomas J. Neff 4,963
Directors and Officers as a 370,100
group
</TABLE>
___________________
1.Of the shares listed in the foregoing table, the following constitute
"phantom" shares credited to directors under the Deferred Plan: Mr. Bigelow,
177 shares; Mr. Dixon, 629 shares; Mr. Jansing, 774 shares; Mr. MacDonald, 624
shares; Mr. Millican, 779 shares; Mr. Neff, 772 shares; and directors as a
group: 3,755 shares.
The Board of Directors has only one standing committee, an Audit Com mittee,
consisting of Messrs. Bigelow, MacDonald and Millican. The functions performed
by the Audit Committee include recommendation of the selection of independent
public accountants for the Fund to the Board of Directors for approval, review
of the scope and results of audit and non-audit services, the adequacy of
internal controls and material changes in accounting principles and practices
and other matters when requested from time to time by the directors (the
"Independent Directors") who are not "interested persons" of the Fund within the
meaning of the Investment Company Act of 1940, as amended (the "Act"). The
Audit Committee held four meetings during the fiscal year ended December 31,
1995.
4
<PAGE>
The Board of Directors of the Fund met twelve times during the fiscal year
ended December 31, 1995, and each director attended at least 75% of the total
number of meetings of the board and, if he was a member of the Audit Committee,
of such committee.
The second column of the following table sets forth the compensation
accrued by the Fund for the Independent Directors. The third and fourth columns
set forth information with respect to the retirement plan for Independent
Directors maintained by the Fund and the other Lord Abbett-sponsored funds. The
fifth column sets forth the total compensation accrued by the Fund and such
other funds for the Independent Directors. The second, third and fourth columns
give information for the Fund's most recent fiscal year; the fifth column gives
information for the calendar year ended December 31, 1995. No director of the
Fund associated with Lord Abbett and no officer of the Fund received any
compensation from the Fund for acting as a director or officer.
<TABLE>
<CAPTION>
For Year Ended
For the Fiscal Year Ended December 31, 1995 December 31, 1995
-------------------------------------------------------------- -------------------
(I) (II) (III) (IV) (V)
- --------------------- ------------------- ------------------- --------------------- -------------------
Pension or
Retire- Estimated Annual
ment Benefits Benefits Upon Re-
Accrued by the tirement Proposed Total Compensation
Fund and Fif- to be Paid by the Accrued by the Fund
Aggregate Com- teen Other Lord Fund and Fifteen and Fifteen Other
pensation Accrued Abbett-sponsored Other Lord Abbett- Lord Abbett-spon-
Name of Director by the Fund/1/ Funds/2/ sponsored Funds/2/ sored Funds/3/
- --------------------- ------------------- ------------------- --------------------- -------------------
<S> <C> <C> <C> <C>
E. Thayer Bigelow $1,174 $ 9,772 $33,600 $41,700
Stewart S. Dixon $1,206 $22,472 $33,600 $42,000
John C. Jansing $1,208 $28,480 $33,600 $42,960
C. Alan MacDonald $1,277 $27,435 $33,600 $42,750
Hansel B. Millican, Jr. $1,210 $24,707 $33,600 $43,000
Thomas J. Neff $1,182 $16,126 $33,600 $42,000
- --------------------------------------------------------------------------------------------------------------
</TABLE>
1.Independent Directors' fees, including attendance fees for board and committee
meetings, are generally allocated among all Lord Abbett-sponsored funds based on
net assets of each fund. A portion of the fees payable by the Fund to its
Independent Directors is being deferred under a plan that deems the deferred
amounts to be invested in shares of the Fund for later distribution to the
directors. The total amount accrued under the plan for each Independent
Director since the beginning of his tenure with the Fund, including dividends
reinvested and changes in net asset value applicable to such deemed investments,
as of December 31, 1995, were as follows: Mr. Bigelow, $1,530; Mr. Dixon,
5
<PAGE>
$5,796; Mr. Jansing, $7,030; Mr. MacDonald, $5,760; Mr. Millican, $7,083; and
Mr. Neff, $7,021.
2.Each Lord Abbett-sponsored fund has a retirement plan providing that
Independent Directors will receive annual retirement benefits for life equal to
80% of their final annual retainers following retirement at or after age 72 with
at least 10 years of service. Each plan also provides for a reduced benefit upon
early retirement under certain circumstances, a pre-retirement death benefit and
actuarially reduced joint-and-survivor spousal benefits. The amounts stated in
column (IV) would be payable annually under such 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 set forth in column (III) were
accrued by the Lord Abbett-sponsored funds during the fiscal year ended December
31, 1995 with respect to the retirement benefits set forth in column (IV).
3.This column shows aggregate Independent Directors' fees, including attendance
fees for board and committee meetings, of a nature referred to in the first
sentence of footnote (1), accrued by the Lord Abbett-sponsored funds during the
year ended December 31, 1995.
Listed below are the executive officers of the Fund, other than Messrs.
Lynch, Dow and Henderson who are listed above in the table of nominees. Each
executive officer has been associated with Lord Abbett for over five years,
except as indicated. Messrs. Allen, Carper, Cutler, Morris, Nordberg and Walsh
are partners of Lord Abbett; the others listed below are employees.
Stephen I. Allen, age 42, Vice President since 1994.
Zane E. Brown, age 45, Executive Vice President since 1996.
Daniel E. Carper, age 44, Vice President since 1988.
Kenneth B. Cutler, age 63, Vice President and Secretary since 1988.
John J. Gargana, Jr., age 64, Vice President since 1988.
Paul A. Hilstad, age 53, Vice President since 1995 (with Lord Abbett since 1995;
formerly Senior Vice President and General Counsel of American Capital
Management & Research, Inc.).
Thomas F. Konop, age 54, Vice President since 1988.
Robert G. Morris, age 51, Vice President since 1995.
E. Wayne Nordberg, age 59, Vice President since 1988.
6
<PAGE>
Keith F. O'Connor, age 40, Treasurer since 1988.
Victor W. Pizzolato, age 63, Vice President since 1988.
John J. Walsh, age 60, Vice President since 1988.
Pursuant to the Fund's By-Laws, the election of each director of the Fund
requires the affirmative vote of a majority of the votes cast. If a shareholder
abstains from voting on this matter, then the shares held by such shareholder
shall be deemed present at the meeting for purposes of determining a quorum, but
shall not be deemed to have been voted on this matter. If a broker returns a
"non-vote" proxy, indicating a lack of authority to vote on this matter, then
the shares covered by such non-vote shall be deemed present at the meeting for
purposes of determining a quorum but shall not be deemed to have been voted on
this matter.
The Board of Directors recommends that the shareholders vote FOR the
election of each of the nominees as a director of the Fund.
2.RATIFICATION OR REJECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche LLP as the in
dependent public accountants of the Fund for the fiscal year ending December 31,
1996. The Act requires that such selection be submitted for ratification or
rejection at the next annual meeting of shareholders if such meeting be held.
Deloitte & Touche LLP (or a predecessor firm) acted as the Fund's independent
public accountants for the year ended December 31, 1995, and for a number of
years prior thereto. Based on in formation in the possession of the Fund, and
information furnished by Deloitte & Touche LLP, the firm has no direct financial
interest and no material indirect financial interest in the Fund. A
representative of Deloitte & Touche LLP is expected to attend the meeting and
will be provided with an opportunity to make a statement and answer appropriate
questions.
Ratification of the selection of Deloitte & Touche LLP requires the
affirmative vote of a majority of the votes cast. If a shareholder abstains
from voting on this matter, then the shares held by such shareholder shall be
deemed present at the meeting for purposes of determining a quorum, but shall
not be deemed to have been voted on this matter. If a broker returns a "non-
vote" proxy, indicating a lack of authority to vote on this matter, then the
shares covered by such non-vote shall be deemed present at the meeting for
purposes of determining a quorum but shall not be deemed to have been voted on
this matter.
7
<PAGE>
The Board of Directors recommends that shareholders vote to ratify the
selection of Deloitte & Touche LLP as the Fund's independent public accountants
for the fiscal year ending December 31, 1996.
3.PROPOSAL TO AMEND THE FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
OF EACH SERIES
The Board of Directors has approved various amendments to each Series'
investment policies and restrictions in order to provide greater uniformity
among the Lord Abbett-sponsored funds and greater flexibility in the future
management of the Series' portfolios. A Series' investment policies and
restrictions designated "fundamental" may be changed only by the vote of a
"majority" (as defined in the Act) of such Series' voting securities. Those
investment policies and restrictions designated "non-fundamental" may be changed
by the vote of the Board of Directors alone. Therefore, the proposed amendments
to the fundamental policies and restrictions described below require shareholder
approval. Each Series' current fundamental investment policies and restrictions
and its proposed fundamental and certain non-fundamental investment policies and
restrictions are set forth in Exhibit A attached hereto.
The investment policies and restrictions of a Series govern generally the
investment activities of such Series and limit its ability to invest in certain
types of securities or engage in certain types of transactions. The proposed
changes are not expected to affect materially the current operations of the
Series. The proposed fundamental investment policies and restrictions of each
Series have been made less restrictive in order to provide greater uniformity
among the Lord Abbett-sponsored funds and greater flexibility in the future
management of the Series' portfolios as noted above. The Board of Directors has
no present intention of approving actions permitted by these less restrictive
fundamental policies and restrictions. If it were to do so, the risks of
investing in the Series could be increased. No change is proposed in the
investment objectives of the Series, which are, for the Equity Series, to seek
long-term growth of capital and income consistent with reasonable risk, and for
the Income Series, to seek high current income consistent with reasonable risk.
The proposed policies and restrictions restate many of the policies and
restrictions currently in effect for the Series. In some instances, certain
fundamental policies and restrictions have been modified or eliminated in
accordance with developments in Federal or state blue sky regulations or in the
securities markets since the inception of a Series. In other instances, as
illustrated in Exhibit A, certain policies and restrictions previously deemed
fundamental have been
8
<PAGE>
redesignated non-fundamental. By making certain policies and restrictions non-
fundamental, the Board may amend a policy or restriction as it deems appropriate
and in the best interest of a Series and its shareholders, without incurring the
costs (normally borne by such Series and its shareholders) of seeking a
shareholder vote. Also, certain of the proposed fundamental investment policies
and restrictions are stated in terms of "to the extent permitted by applicable
law". Applicable law can change over time and may become more or less
restrictive as a result. The policies and restrictions have been drafted in this
manner so that a change in law would not require a Series to seek a shareholder
vote to amend the policy or restriction to conform to applicable law, as
revised.
The principal effect of the proposed amendments will be to permit each
Series to take certain actions not now permitted to it without obtaining
additional shareholder approval. Fund management either will not be permitted
to, or does not intend to, take any such action with respect to a Series unless
such action is approved by the Board of Directors. The board does not now
intend to approve any such action or to do so in the future unless it deems such
action to be an appropriate means of seeking a Series' investment objective in
the best interests of such Series and its shareholders, in which case disclosure
of the change would be made in the Fund's then current prospectus or statement
of additional information or both. Such actions, none of which the Board has a
present intention of approving, involve the following matters, among others: (i)
-
short sales of securities and purchases of securities on margin to the extent
permitted by applicable law; (ii) borrowings from banks in amounts up to one-
--
third of total assets (and up to an additional 5% of total assets for temporary
purposes) and such short-term credits as may be necessary for the clearance of
purchases and sales of portfolio securities; (iii) loans of portfolio securities
---
to the extent permitted by law; (iv) purchases and sales of securities directly
--
or indirectly secured by real estate or interests therein, commodities and
commodity contracts in accordance with applicable law so long as registration
would not be required as a commodity pool operator under the Commodity Exchange
Act; (v) with respect to 25% of gross assets of the Equity Series, purchasing
-
securities of one issuer representing more than 5% of the gross assets of the
Series or 10% of the voting securities of such issuer; (vi) with respect to the
--
Income Series, purchasing securities of one issuer to the extent permitted by
Subchapter M of the Internal Revenue Code; (vii) investments of up to 15% of
---
gross assets in illiquid securities; (viii) pledges to secure borrowings or as
----
permitted by other investment policies and applicable law; (ix) investments of
--
over 5% of a Series' total assets in securities of issuers in operation for less
than three years; and (x) purchases and sales of puts and calls. See Exhibit A
-
hereto for a detailed comparison of the current fundamental investment policies
and restrictions and the proposed fundamental and certain non-fundamental
investment policies and restrictions of the Series.
9
<PAGE>
Approval of the proposed amendments to a Series' fundamental investment
policies and restrictions requires the affirmative vote of a "majority" (as
defined in the Act) of the voting securities of such Series. A "majority" vote
of a Series is defined in the Act as the vote of the holders of the lesser of:
(i) 67% or more of the voting securities of such Series present or represented
-
by proxy at the shareholders meeting, if the holders of more than 50% of the
outstanding voting
securities of such Series are present or represented by proxy, or (ii) more than
--
50% of the outstanding voting securities of such Series. The effect of an
abstention or broker non-vote is the same as a vote against this proposal.
If the proposed amendments are not approved by the shareholders of one or
more Series, the current fundamental policies and restrictions for such Series
will continue in effect.
The Board of Directors recommends that shareholders vote in favor of the
proposed amendments to the Series' fundamental investment policies and restric
tions.
4.NEW DISTRIBUTION PLAN AND AGREEMENT FOR THE
CLASS A SHARES OF EACH SERIES
At a meeting of the Board of Directors of the Fund held on March 14, 1996,
the directors of the Fund unanimously approved, subject to shareholder approval,
and determined to submit to the shareholders of each Series for approval, a new
Distribution Plan and Agreement pursuant to Rule 12b-1 under the Act (the
"Proposed Plan") for the existing class of shares of each Series. The existing
class of shares for each Series is to be designated the Class A Shares -- see
Item 5 below. The text of the Proposed Plan for the Income Series, which is
identical to the Proposed Plan for the Equity Series except for the name of the
Series, is attached hereto as Exhibit B. The directors who approved the
Proposed Plans include all of the Independent Directors, none of whom is an
"interested person" of the Fund within the meaning of the Act or has a direct or
indirect financial interest in the operations of the Proposed Plans or in any
agreements related thereto.
If approved by shareholders, the Proposed Plan for each Series will replace
the distribution plan and agreement for the Fund (the "Current Plan") that was
approved by shareholders on April 13, 1988 and became effective September 9,
1988. The Current Plan was last amended by action of the Board of Directors on
June 12, 1991.
10
<PAGE>
The changes included in the Proposed Plans, which are described below, are
designed primarily to maintain the competitive position of the Class A Shares of
each Series.
Under the Current Plan (except as to certain accounts for which tracking
data is not available), the Fund pays dealers through Lord Abbett (1) an annual
-
service fee (payable quarterly) of 0.25% of the average daily net asset value of
shares sold by dealers and (2) a one-time 1% distribution fee, at the time of
-
sale, on all shares sold at the $1 million level by dealers, including sales
qualifying at such level under the rights of accumulation and statement of
intention privileges described in the Fund's prospectus in effect at such time.
These service and distribution fees provide additional incentives for dealers
(a) to provide continuing information and investment services to their
-
shareholder accounts and otherwise to encourage their accounts to remain
invested in the Fund and (b) to sell shares of the Fund.
-
Under the Current Plan, holders of shares on which the 1% distribution fee
has been paid are required to pay to the Fund a contingent deferred
reimbursement charge ("CDRC") of 1% of the original cost or the then net asset
value, whichever is less, of such shares if they are redeemed out of the Lord
Abbett-sponsored family of funds on or before the end of the twenty-fourth month
after the month in which the purchase occurred. (An exception is made for
certain 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 to plan participants.) If the shares are
exchanged into another Lord Abbett fund and are thereafter redeemed out of the
Lord Abbett family on or before the end of such twenty-fourth month, the charge
is collected for the Fund by the other fund. The Fund collects such a charge
for other Lord Abbett-sponsored funds in a similar situation.
Set forth below is a description of the principal changes to be effected
under the Proposed Plans:
(a) Distribution Fees. The Fund's Board of Directors will be authorized
-----------------
under the Proposed Plans, without further shareholder vote, to increase the
amount of annual distribution fees up to 0.25% of the average annual net assets
attributable to the Class A Shares of each Series (the "Distribution Fee
Ceiling") (the annual distribution and service fees could total 0.50% of such
average annual net assets if approved by the board). This increased spending
limit is intended primarily to permit the directors to increase the amount to be
spent for distribution to meet changing sales competition. The directors
believe it is desirable to be able to make these changes without further
shareholder approval because additional shareholder meetings would be time-
consuming and costly to the Series and their shareholders. The Board of
Directors will approve additional charges under this increased authority
11
<PAGE>
only if a majority of the Independent Directors conclude in their business
judgment that there is a reasonable likelihood that the increase will benefit
the affected Series and its shareholders.
The one-time 1% distribution fee, payable at the time of certain sales
as described above, is to be charged against the Distribution Fee Ceiling.
During the Fund's last fiscal year, payments of the one-time 1% distribution fee
under the Current Plan totaled 0.03% of the Equity Series' average net assets.
These payments by the Income Series were less than 0.01% of such Series' net
assets. Subject to shareholder approval of the Proposed Plans, the Board of
Directors has authorized the Series to continue paying this one-time
distribution fee with respect to sales of Class A Shares, subject to three
changes: First, the payments will be made in connection with sales to
-----
retirement plans with 100 or more eligible employees, in addition to sales at
the $1 million level as under the Current Plan; Second, the payments will be
------
scaled down at certain breakpoints, as follows: 1% of the first $5 million,
0.55% of the next $5 million, 0.50% of the next $40 million and 0.25% over $50
million of shares sold to a retirement plan or other qualifying purchaser within
a 12-month period (beginning when the first purchase is made at net asset
value); and Third, the payments will be made to institutions and persons
-----
permitted by applicable law and/or rules to receive such payments ("Authorized
Institutions"), rather than just to dealers as is the case under the Current
Plan.
If shareholders approve the Proposed Plans, the Board of Directors has
authorized each Series to pay, as an additional distribution fee, a supplemental
payment to dealers who have accounts comprising a significant percentage of such
Series' Class A Share assets and having a lower than average redemption rate and
who have a satisfactory program for the promotion of Class A Shares. Any such
payments will be 0.10% per annum of the average assets of the Series represented
by the Class A Share accounts of qualifying dealers, and will be charged against
the Distribution Fee Ceiling. This supplemental payment is intended by the
Board of Directors to enhance the Fund's relationships with those dealers most
likely to have a significant impact on the growth of the Class A Shares.
(b) Service Fees. Service fee payments, which are to be continued under
------------
the Proposed Plan at an annual rate of 0.25% of the average daily net asset
value of shares sold, could be made to all Authorized Institutions (institutions
and persons permitted by applicable law and/or rules to receive such payments),
rather than just to dealers as is the case under the Current Plan.
(c) Use of Payments by Lord Abbett. Lord Abbett would be permitted to use
------------------------------
payments received under the Proposed Plans to provide continuing services to
shareholder accounts not serviced by Authorized Institutions and, with board
approval, to finance any activity which is primarily intended to result in the
sale of Class A Shares. Any such payments to finance activities primarily
intended to result in the
12
<PAGE>
sale of Class A Shares would be subject to the Distribution Fee Ceiling.
(d) CDRC. The CDRC applicable to the Class A Shares would be
----
substantially similar to that payable under the Current Plan, except that no
CDRC would be payable in connection with redemptions by retirement plans (not
just those qualified under Section 401 of the Internal Revenue Code)
attributable to any benefit payment. In addition, no CDRC would apply if the
plan sponsor requested a redemption to correct an excess contribution in order
to comply with applicable IRS rules. Because CDRC payments will be made directly
to the Series, they will have the effect of reducing the amount of the
distribution fees paid by the Series for the purpose of complying with the
Distribution Fee Ceiling. As in the case of the specific distribution fees
authorized by the Board of Directors of the Fund, the CDRC authorized from time
to time by the board for the Class A Shares of each Series will be described in
the then current prospectus of the Fund.
If the supplemental payment to dealers, the revised one-time distribution
fee and the other changes described above had been in effect for the Fund's last
fiscal year, it is estimated that, in the aggregate, they would have increased
the ratio of expenses to average net assets of each Series as follows: for the
Equity Series, from 1.63% to approximately 1.67%, representing a difference of
0.04%; and for the Income Series, from 1.04% to approximately 1.08%,
representing a difference of 0.04%.
(e) Lord Abbett Distributor. The other party to the Proposed Plans is to
-----------------------
be Lord Abbett Distributor LLC, a New York limited liability company, to be
formed as a subsidiary of Lord Abbett ("Lord Abbett Distributor"), rather than
Lord Abbett. Lord Abbett Distributor is to take on all the underwriting
functions currently performed directly by Lord Abbett.
In considering whether to recommend the Proposed Plans for approval, the
board considered, among other things, the factors set forth below:
(i) Flexibility in Adapting Distribution Fees to Meet Industry-Wide
---------------------------------------------------------------
Changes. During the last several years, there has been significantly increased
com petition and pricing experimentation in the mutual fund industry. As the
pace of change increases, the Board of Directors believes it will be useful to
be able to respond more quickly to marketplace pressures, and change in
appropriate cases the amount of the Class A 12b-1 distribution fees to be paid,
without unnecessarily burdening the shareholders with the costs of additional
proxy solicitations. The directors believe that the increased distribution fees
described above are good examples of the desirability of this flexibility.
Based on advice received from Lord Abbett, the decision by the board to approve
the payment of distribution fees in
13
<PAGE>
connection with sales to retirement plans with 100 or more eligible employees
will enable the Class A Shares to compete more effectively in this growing and
important market. The 0.10% per annum supplemental payments to dealers who meet
certain criteria will permit the Fund to enhance relationships with those
dealers most likely to have a significant impact on the growth of the Class A
Shares.
(ii) Expanding Categories of Persons Eligible to Receive Payments. The
------------------------------------------------------------
Current Plan limits payments thereunder to dealers selling Fund shares. Since
the Current Plan was adopted, different methods of distribution, using different
entities, have developed in the industry. The Board of Directors sees no reason
to limit arbitrarily the categories of persons eligible to receive payments
under the Proposed Plans, and believes that the availability of payments under
the plans will induce such other entities to invest in Class A Shares.
(iii) Flexibility in Distributor's Use of Payments. Lord Abbett has
--------------------------------------------
advised the Board of Directors of the Fund that allowing Lord Abbett Distributor
to retain fees received from the Series to (i) provide continuing information
-
and investment services to shareholder accounts and (ii) finance, with board
--
approval, any activity which is primarily intended to result in the sale of
Class A Shares, will provide useful flexibility and will be in line with common
practice in the industry.
In light of the anticipated benefits to each Series and its shareholders as
a result of adopting the Proposed Plans, and having reviewed a comparison of the
costs to each Series of the Current Plan and the Proposed Plans, the directors
of the Fund have concluded, in the exercise of reasonable business judgment and
in light of their fiduciary duties, that there is a reasonable likelihood that
the Proposed Plans will benefit each Series and its shareholders. There can,
however, be no assurance that the anticipated benefits will be realized.
Payments by each Series to dealers through Lord Abbett under the Current
Plan for the fiscal year ended December 31, 1995 were $215,186 for the Equity
and $604,324 for the Income Series. Such payments represented the following
percentages of each Series' average net assets during that period: 0.23% for
the Equity and 0.25% for the Income Series.
Set forth in the tables below is a summary comparison of each Series'
expenses, on a current and pro-forma basis taking into account the increased
fees that could be paid under the Proposed Plans. The annual operating expenses
shown in the second column are each Series' actual expenses for the fiscal year
ended December 31, 1995. The expenses shown in the third column represent, on a
pro-forma basis, such actual expenses adjusted to show the effect of the maximum
distribution fee the board would be authorized to approve under the Proposed
Plans. The fourth column shows such pro-forma annual operating expenses based on
the distribution fee
14
<PAGE>
rate the board has approved subject to approval of the Proposed Plans by
shareholders. The example set forth below is not a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
15
<PAGE>
<TABLE>
<CAPTION>
Pro Forma (reflect-
Pro-Forma ing estimated
Year ended (reflecting max- amounts that would
December 31, imum amounts have been paid
1995 (reflecting payable under the under the Proposed
EQUITY SERIES the Current Plan) Proposed Plan) Plan)
- ---------------------------------- -------------------- ------------------- ---------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
Maximum Sales Load/1/ on Purchases 5.75% 5.75% 5.75%
Deferred Sales Load/1/ None/2/ None/2/ None/2/
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET
ASSETS)
Management Fee 0.75% 0.75% 0.75%
12b-1 Fees 0.26% 0.50%/3/ 0.30%/4/
Other Expenses 0.62% 0.62% 0.62%
Total Operating Expenses 1.63% 1.87% 1.67%
- ----------------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. For every $1,000 invested, with reinvestment of all
distributions, you would pay the following total expenses if you closed your
account after the number of years indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
CURRENT $ 73/5/ $ 106/5/ $ 141/5/ $ 240/5/
PRO-FORMA (MAXIMUM) $75/3,5/ $113/3,5/ $153/3,5/ $264/3,5/
PRO-FORMA (ESTIMATED) $74/4,5/ $107/4,5/ $143/4,5/ $244/4,5/
- ------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Pro-Forma Pro-Forma
(reflecting (reflecting
maximum estimated
Year ended amounts amounts that
December 31, payable would have
1995 under the been paid under
(reflecting the Proposed the Proposed
INCOME SERIES Current Plan) Plan) Plan)
---------------- ------------ ----------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
Maximum Sales Load/1/ on Purchases 4.75% 4.75% 4.75%
Deferred Sales Load/1/ None/2/ None/2/ None/2/
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fee 0.50% 0.50% 0.50%
12b-1 Fees 0.25% 0.50%/3/ 0.29%/4/
Other Expenses 0.29% 0.29% 0.29%
Total Operating Expenses 1.04% 1.29% 1.08%
- ------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. For every $1,000 invested, with reinvestment of all
distributions, you would pay the following total expenses if you closed your
account after the number of years indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
CURRENT $58/5/ $79/5/ $102/5/ $169/5/
PRO-FORMA (MAXIMUM) $60/3,5/ $86/3,5/ $115/3,5/ $196/3,5/
PRO-FORMA (ESTIMATED) $58/4,5/ $80/4,5/ $104/4,5/ $173/4,5/
- -----------------------------------------------------------------
</TABLE>
1. Sales "load" is referred to as sales "charge" and "deferred sales load" is
referred to as "contingent deferred reimbursement charge" or "CDRC" throughout
this Proxy Statement. Investors should be aware that long-term shareholders may
pay, as a front-end sales charge and under both the Current Plan and the
Proposed Plans, more than the economic equivalent of the maximum front-end sales
charge permitted by certain rules of the National Association of Securities
Dealers, Inc.
2. Under both the Current Plan and the Proposed Plans, redemptions of shares on
which a Rule 12b-1 sales distribution fee has been paid are subject to a CDRC of
1% of the original cost or the then net asset value, whichever is less, of all
shares so purchased which are redeemed out of the Lord Abbett-sponsored family
of funds on or before the end of the twenty-fourth month after the month in
which the purchase occurred, subject to certain exceptions described herein.
17
<PAGE>
3. Reflects the maximum annual 12b-1 fees of 0.50% that could be paid under the
Proposed Plans in any year, consisting of a distribution fee of 0.25% and a
service fee of 0.25%.
4. Reflects the estimated level of distribution and service fees that would
have been paid under the Proposed Plan had it been in effect for the Fund's last
fiscal year.
5. Based on total current and pro-forma operating expenses shown in the table
above.
If the shareholders approve the Proposed Plans, the Proposed Plans shall,
unless terminated as described below, become effective July 12, 1996 and
continue in effect until July 12, 1997 and from year to year thereafter only so
long as such continuance is specifically approved, at least annually, by the
Fund's Board of Directors and its Independent Directors by a vote cast in person
at a meeting called for the purpose of voting on such continuance. Each
Proposed Plan may be terminated at any time by a vote of a majority of the
Independent Directors or by a shareholder vote in compliance with Rule 12b-1
under the Act. The Plan may not be amended to increase materially the amount to
be spent for distribution above the maximum amounts set forth in the Proposed
Plans without a shareholder vote in compliance with Rule 12b-1 under the Act.
All material amendments must be approved by a majority of the Independent
Directors.
Each Proposed Plan provides that while it is in effect, the selection and
nomination of Independent Directors is committed to the discretion of the
Independent Directors then sitting on the board. This does not prevent the
involvement of others in such selection and nomination if the final decision on
any such selection or nomination is approved by a majority of the Independent
Directors.
Pursuant to Rule 12b-1 under the Act, approval of the Proposed Plan with
respect to either Series requires the affirmative vote of a "majority" (as
defined in the Act) of the voting securities of such Series. A "majority" vote
for a Series is defined in the Act as the vote of the holders of the lesser of:
(i) 67% or more of the voting securities of such Series present or represented
-
by proxy at the shareholders meeting, if the holders of more than 50% of the
outstanding voting securities of such Series are present or represented by
proxy, or (ii) more than 50% of the outstanding voting securities of such
--
Series. The effect of an abstention or broker non-vote is the same as a vote
against this proposal.
If the Proposed Plan is not approved for one or both Series, the Current
Plan for each such Series will continue in effect according to its terms.
The Board of Directors recommends that shareholders of each Series vote in
favor of adoption of the Proposed Plan for such Series.
18
<PAGE>
5. AMENDMENT OF THE ARTICLES OF INCORPORATION TO AUTHORIZE CLASSES OF EACH
SERIES OF SHARES AND TO CONFIRM THAT THE FUND MAY IMPOSE CONTINGENT DEFERRED
SALES CHARGES IN CONNECTION WITH REDEMPTIONS
On March 14, 1996, the Fund's Board of Directors unanimously voted to
approve an amendment to the Articles of Incorporation of the Fund to give the
Fund's Board of Directors the power to classify the Fund's shares into classes
within series, and voted to submit such amendment to the Fund's shareholders for
approval. The full text of the amendment is attached hereto as Exhibit C.
The Fund's Articles of Incorporation presently designate two classes
(referred to herein as "Series") of shares of capital stock and do not authorize
the Board of Directors to create classes within Series. The Board of Directors
believes that the Fund's best interests will be served if the Board of Directors
is able to create classes of shares within a Series, with each share of a
Series, regardless of class, sharing pro rata (based on net asset value) in the
portfolio and income of the Series and in the Series' expenses, except for
differences in expenses resulting from different Rule 12b-1 plans for the
various classes and possibly other class-specific expenses. It is expected that
implementation of such a multi-class fund structure will (i) enable investors
-
in a Series to choose the distribution option that best suits their individual
situations, (ii) facilitate distribution of the Fund's shares, and (iii)
-- ---
maintain the competitive position of the Fund in relation to other funds that
have implemented or are seeking to implement similar distribution arrangements.
The Board of Directors has approved for each Series, subject to shareholder
approval, two classes of shares which are to share in such Series' portfolio but
are to have different distribution arrangements. For each Series, the existing
class of shares, to be designated the "Class A Shares," will continue to be
offered as described in the Fund's current prospectus, except that the Board of
Directors is recommending that shareholders approve a new Distribution Plan and
Agreement pursuant to Rule 12b-1 under the Act that, if approved, will be
applicable to the Class A Shares. See Item 4 above.
The second class of shares of each Series, to be designated the "Class C
Shares," will be offered at net asset value without an initial sales charge, but
if redeemed for cash before the first anniversary of purchase, will be subject
to a CDRC, or contingent deferred reimbursement charge, equal to 1% of the lower
of their cost or then net asset value. The Class C Shares are to be subject to
a Rule 12b-1 plan that involves annual distribution and service fee payments for
the account of such class equal to 1% of the average net asset value of the
Class C shares. None of these charges will be allocated to the Class A Shares.
19
<PAGE>
It is expected that Class C Shares of the Income Series will also be issued
to shareholders of Lord Abbett Global Income Trust (the "Acquired Series") of
Lord Abbett Securities Trust (the "Trust") in connection with an acquisition by
the Income Series of the assets of the Acquired Series. This transaction, which
is subject to certain conditions, has been approved by the Board of Directors of
the Fund, including a majority of the Independent Directors, as in the best
interests of the shareholders of the Income Series. Shareholders of the Income
Series are not required to approve this proposed transaction. As of March 22,
1996, the net assets of the Acquired Series were approximately $7,517,000, and
the net assets of the Income Series were approximately $220,172,000.
If the proposed amendment to the Fund's Articles of Incorporation is
approved, the Board of Directors will be authorized to create and issue one or
more additional classes of shares within the existing Series and to create
additional series. Lord Abbett has advised the Board of Directors of the Fund
that, with respect to each Series, it intends to propose to the board in the
near future that the board authorize the Fund to issue a third class of shares,
to be designated the "Class B Shares" of such Series. If authorized, the Class
B Shares are expected to be sold without an initial sales charge and otherwise
to be similar to the Class C Shares except that (i) they will be subject to a
-
contingent deferred sales charge ("CDSC") that is payable to the distributor of
such shares, rather than subject to a contingent deferred reimbursement charge
payable to the Fund as is the case with the Class C Shares, (ii) the B Share
--
CDSC will be substantially larger than the 1% CDRC charged on early redemptions
of Class C Shares, (iii) the B Share CDSC will apply over a period of time
---
substantially longer than the 12 months applicable to the C Share CDRC, and will
scale down to zero over that longer period, and (iv) the Class B Shares will
--
convert automatically into Class A Shares at net asset value after a period of
time.
Shares of all classes will vote together on all matters affecting a Series
or the Fund, except for matters, such as approval of a Rule 12b-1 plan or a
related service plan, affecting only a particular class or classes. All shares
voting on a matter will have identical voting rights. All issued shares will be
fully paid and non-assessable, and shareholders will have no pre-emptive or
other right to subscribe to any additional shares. All shares within a series
will have the same rights and be subject to the same limitations set forth in
the Articles of Incorporation with respect to dividends, redemptions and
liquidation except for differences resulting from class-specific Rule 12b-1
plans and related service plans and certain other class-specific expenses.
The proposed amendment to the Fund's Articles of Incorporation will also
make clear that the Fund may impose a CDSC and other charges (which charges may
vary within and among the classes) payable upon redemption as may be estab-
lished from time to time by the Board of Directors of the Fund. The Fund's
Articles
20
<PAGE>
of Incorporation currently provide that the Fund may deduct a redemption charge
not exceeding 1% of the net asset value of the shares being redeemed. The
proposed amendment is deemed advisable in order to avoid any question as to
whether the proposed B Share CDSC referred to above, which in some instances may
exceed 1%, may be imposed in connection with the proposed issuance of the Class
B Shares. The Board of Directors has no intention of increasing the CDRC
currently payable or proposed to be payable on certain early redemptions of your
Fund shares. See Item 4 above.
Approval of the proposed amendment to the Articles of Incorporation
requires an affirmative vote of more than 50% of the outstanding shares of the
Fund. The effect of an abstention or broker non-vote is the same as a vote
against this proposal.
The Board of Directors recommends that shareholders vote in favor of this
proposed amendment to the Articles of Incorporation.
6.NEW SUB-INVESTMENT MANAGEMENT AGREEMENT FOR THE EQUITY SERIES AND PAYMENT OF
SUB-ADVISORY FEES THEREUNDER PENDING APPROVAL OF THE NEW AGREEMENT
On March 19, 1996, Edinburgh Fund Managers Group plc ("Edinburgh") acquired
all of the ordinary share capital of DFM Holdings Limited ("DFM Holdings"),
which holds 100% of the ordinary share capital of Dunedin Fund Managers Limited
("Dunedin"). Prior to such acquisition, Dunedin had served as the Fund's sub-
investment manager under a sub-investment management agreement dated August 29,
1988 (the "Previous Agreement") between Lord Abbett and Dunedin, which was last
approved by shareholders of the Fund on December 13, 1989. As required by the
Act, the Previous Agreement was terminated as a result of the change in control
of Dunedin caused by such acquisition.
At a meeting of the Board of Directors of the Fund held on March 14, 1996,
the directors of the Fund, including a majority who are not interested persons
of Lord Abbett, Edinburgh, Dunedin or the Fund or parties to the Previous
Agreement, unanimously approved, subject to shareholder approval, and determined
to submit to the shareholders of the Equity Series for approval, a new sub-
investment management agreement (the "New Agreement") between Lord Abbett and
Dunedin with respect to the Equity Series. At the same meeting, the board
unanimously determined that, in view of Lord Abbett's anticipated capability
with respect to foreign debt investments, a sub-investment adviser was no longer
desirable with respect to the Income Series, and so Lord Abbett will continue as
the investment manager of the Income Series under the Management Agreement
referred to below
21
<PAGE>
without the assistance of a sub-adviser. The New Agreement contains the same
terms and conditions and provides for payment of a sub-advisory fee on the same
basis with respect to the Equity Series as contained and provided for in the
Previous Agreement. The text of the New Agreement is attached hereto as Exhibit
D. The New Agreement will not become effective unless it is approved by the
shareholders of the Equity Series.
The New Agreement provides that it shall remain in force for two years from
the date of its execution and will be renewable annually thereafter by specific
approval of the Board of Directors of the Fund (including a majority of the
directors who are not interested persons of Lord Abbett, Dunedin or the Fund,
cast in person at a meeting called for the purpose of voting on such renewal) or
by vote of a majority of the outstanding voting securities of the Equity Series.
The New Agreement may be terminated without penalty at any time by the Board of
Directors of the Fund or by vote of a majority of the outstanding voting
securities of the Equity Series, on 60 days' written notice, and automatically
terminates in the event of its assignment.
Under the New Agreement, Dunedin, among other things, (i) will furnish Lord
-
Abbett with advice and recommendations with respect to that portion of the
Equity Series' assets invested in countries other than the United States (the
"Foreign Assets"), including advice on the selection and allocation of
investments among foreign securities markets and foreign equity and debt
securities; (ii) subject to consultation with Lord Abbett, which may be waived,
--
will determine which securities in the portfolio of Foreign Assets should be
purchased, held or disposed of or held in cash; and (iii) will give advice, or
---
may make decisions, with respect to foreign currency matters. Under the New
Agreement, Lord Abbett will be obligated to pay Dunedin a monthly fee equal to
one-half of the management fee paid by the Fund to Lord Abbett with respect to
the Equity Series pursuant to the Management Agreement described below. For the
fiscal year ended December 31, 1995, Lord Abbett paid Dunedin such a fee with
respect to the Equity Series under the Previous Agreement in the amount of
$308,724, and paid a fee on the same basis with respect to the Income Series in
the amount of $616,173.
Lord Abbett and the Board of Directors of the Fund believe that it is in
the interests of the shareholders of the Equity Series to continue to obtain the
services of Dunedin on an uninterrupted basis. Lord Abbett and the Fund,
together with Dunedin, therefore have filed an application with the Securities
and Exchange Commission under Section 6(c) of the Act requesting an exemption
from Section 15(a) of the Act to permit implementation of the New Agreement
pending shareholder approval and to permit Dunedin to receive from Lord Abbett,
upon approval of the shareholders of the Equity Series, any and all fees payable
under the New Agreement from March 19, 1996 through the date of shareholder
approval of the
22
<PAGE>
New Agreement. If the application is granted, Lord Abbett intends to pay into an
escrow account an amount equal to the sub-advisory fee that Dunedin would
receive under the New Agreement. If shareholders then approve the New Agreement
and the payment of such fees thereunder, the escrow agent will release the
amounts held by it to Dunedin.
The acquisition of DFM Holdings by Edinburgh created a major fund
management group based in Scotland, with assets under management valued at over
8.2 billion (British), or approximately $12.6 billion. Dunedin manages several
unit trusts and investment trusts which are not comparable to U.S. regulated
investment companies. Prior to the change in control of Dunedin, Dunedin also
acted as sub-investment adviser to the Global Equity Series of Lord Abbett
Series Fund, Inc. and the Global Income Trust series of Lord Abbett Securities
Trust. After the transaction, Dunedin will continue to act as sub-investment
adviser with respect to the Global Equity Series of Lord Abbett Series Fund,
Inc., receiving as compensation one-half of the management fee paid to Lord
Abbett by such series. Lord Abbett is entitled to receive a fee for managing
such Global Equity Series at an annual rate of 0.75% of average daily net
assets, but Lord Abbett is currently waiving such fee and is making no payments
to Dunedin in connection therewith. At February 29, 1996, the net assets of
such Global Equity Series were approximately $2.7 million.
The Fund has been advised by Edinburgh that the owners of Dunedin and their
percentages of the outstanding shares of Dunedin, both before and after
implementation of the transaction, were and are as follows:
23
<PAGE>
<TABLE>
<CAPTION>
Before the After the
Proposed Proposed
Transaction Transaction
<S> <C> <C>
Edinburgh Fund Managers Group plc -- 100%
The British Linen Bank Group Limited 50.5% --
The Edinburgh Investment Trust plc 28.9% --
Dunedin Worldwide Investment Trust PLC 9.9% --
Dunedin Income Growth Trust PLC 8.5% --
Dunedin Smaller Companies Investment 2.2% --
Trust PLC
100.0% 100.0%
- -------------------------------------------------------------------
</TABLE>
The Fund has been advised further by Edinburgh that British Investment
Trust plc, Donaldson House, 97 Haymarket Terrace, Edinburgh EH12 5HD Scotland,
owns 37.2% of Edinburgh's outstanding shares and that the balance of Edinburgh's
shares are publicly traded, with no single shareholder currently owning over 10%
of the shares.
Edinburgh has advised Lord Abbett and the Fund that it currently
anticipates that all of Dunedin's officers and employees will continue in their
present capacities and will continue to provide sub-investment management
services to Lord Abbett with respect to the Equity Series with no material
changes in operating personnel, except that Dunedin has advised the Fund that it
will now have access to the resources of the Edinburgh group, which will have
some 50 investment professionals, representing an enlarged fund management
capability. Edinburgh has also advised Lord Abbett and the Fund that it
anticipates that the acquisition of DFM Holdings will affect neither the
operating procedures used by Dunedin with respect to Fund assets nor the
financial ability of Dunedin to fulfill its obligations under the New Agreement
and that Dunedin's business will operate, with respect to the assets of the
Equity Series, in a manner consistent with Dunedin's past practices.
The Fund employs Lord Abbett as investment manager under a Management
Agreement dated August 29, 1988. The Management Agreement was approved
unanimously by the Fund's Board of Directors on March 8, 1989 and by the
shareholders of the Fund on May 10, 1989. The Management Agreement is renew-
24
<PAGE>
able annually by specific approval of the Board of Directors of the Fund
(including a majority of the directors who are not interested persons of Lord
Abbett or the Fund or parties to the Management Agreement, cast in person at a
meeting called for the purpose of voting on such renewal) or, with respect to a
Series of the Fund, by vote of a majority of the outstanding voting securities
of such Series.
Under the Management Agreement, Lord Abbett supervises the Fund's
investments, provides it with certain other management services and executive
and other personnel, and pays the remuneration of its officers. Lord Abbett is
obligated to pay for the rental of office space and for ordinary and necessary
office expenses relating to research, statistical work and portfolio supervision
to be performed by Lord Abbett. The Fund is obligated to pay all expenses not
expressly assumed by Lord Abbett, including, without limitation, office and
clerical expenses not related to research, statistical work and portfolio
supervision, governmental fees, interest charges, taxes, Independent Directors'
fees and expenses, custody fees, association membership dues, legal and auditing
fees, transfer agent and shareholder servicing costs, expenses of preparing,
printing and mailing stock certificates, shareholder reports, notices and proxy
statements to governmental agencies, insurance premiums, and brokerage and other
expenses connected with executing portfolio transactions.
Each Series is obligated to pay Lord Abbett a fee payable monthly and
based on average daily net assets for each month. The annual rate of the fee is
equivalent to 0.75 of 1% for the Equity Series and 0.50 of 1% for the Income
Series. To encourage sales of shares of the Fund, Lord Abbett has voluntarily
waived a portion of its management fees and paid other operating expenses of
each Series. These fees and expenses of the Equity Series (not including any
required to be paid by Lord Abbett pursuant to applicable state expense
limitations) are subject to repayment by that Series to the extent the Series'
expense ratio on an annualized basis is less than 1.5%. The Equity Series shall
not be obligated to repay any such expenses not repaid by the earlier of (a)
-
October 1, 1998 or (b) the termination of the Management Agreement. The above-
-
mentioned expense ratio has not been reached, and the Equity Series had a
contingent obligation of $283,550 as of December 31, 1995. The Income Series
had a somewhat similar arrangement under which it has repaid all of its
contingent obligations. Lord Abbett is not currently waiving any portion of its
management fees or subsidizing any other operating expenses of either Series.
Lord Abbett also acts as principal underwriter for the capital stock of
the Fund under the terms of a Distribution Agreement dated September 9, 1988.
The underwriter, as exclusive selling agent, undertakes to find purchasers for
the shares of the Fund but has no commitment to purchase such shares. For the
fiscal year ended December 31, 1995, Lord Abbett received $20,326 with respect
to the Equity Series and $43,332 with respect to the Income Series as principal
underwriter on
25
<PAGE>
sales of shares of the Fund, in accordance with the terms of the Distribution
Agreement, after payment of $245,921 for the Equity Series and $265,179 for the
Income Series allowed to independent dealers as concessions for such sales. Such
amounts represented the sales charges paid by purchasers of the Fund's shares,
the net asset value of such shares being retained by the Fund.
Lord Abbett is a partnership. It has nine general partners, all of whom
are executive officers and/or directors of the Fund: Stephen I. Allen, Daniel
E. Carper, Kenneth B. Cutler, Robert S. Dow, Thomas S. Henderson, Ronald P.
Lynch, Robert G. Morris, E. Wayne Nordberg and John J. Walsh. The address of
each partner is 767 Fifth Avenue, New York, New York 10153-0203. The other
executive officers of the Fund, listed in Item 1 above, are employed by Lord
Abbett which pays their remuneration for services to the Fund.
Dunedin is located at Dunedin House, 25 Ravelston Terrace, Edinburgh EH4
3EX Scotland. Dunedin's Board of Directors consists of Peter A.K. Arthur,
Michael Balfour, David McCraw, Richard D. Muckart, R. Graham McGeorge, Douglas
A. Thomson, Colin F. Peters, John D.B.W. Wood and Ian E. Massie, all of whom are
located at Dunedin. Iain Watt is Chief Executive Officer of Dunedin.
Approval by the Equity Series of the New Agreement and the payment of
sub-advisory fees thereunder from March 19, 1996 through the date of shareholder
approval of the New Agreement requires the affirmative vote of a "majority" (as
defined in the Act) of the voting securities of such Series. A "majority" vote
for a Series is defined in the Act as the vote of the holders of the lesser of:
(i) 67% or more of the voting securities of such Series present or represented
-
by proxy at the shareholders meeting, if the holders of more than 50% of the
outstanding voting securities of such Series are present or represented by
proxy, or (ii) more than 50% of the outstanding voting securities of such
--
Series. The effect of an abstention or broker non-vote is the same as a vote
against this proposal.
If the New Agreement and the payment of fees thereunder is not approved
by the shareholders of the Equity Series, the Board of Directors will meet to
determine the appropriate course of action, which may include a re-solicitation
of shareholders of the Equity Series.
The Board of Directors recommends that shareholders of the Equity Series
vote in favor of adoption of the New Agreement and payment of sub-advisory fees
thereunder from March 19, 1996 through the date of shareholder approval of the
New Agreement.
26
<PAGE>
7. OTHER INFORMATION
Management is not aware of any matters to come before the meeting other
than those set forth in the notice. If any such other matters do come before
the meeting, the individuals named as proxies will vote, act, and consent with
respect thereto in accordance with their best judgment.
a. Timeliness of Shareholder Proposals.
-----------------------------------
Any shareholder proposals to be presented for action at the Fund's next
shareholder meeting pursuant to the provisions of Rule 14a-8 under the
Securities Exchange Act of 1934, as amended, must be received at the Fund's
principal executive offices within a reasonable time in advance of the date
solicitation is made for such meeting. The Fund does not intend to hold another
annual or special meeting of shareholders unless required to do so by the Act.
b. Annual Report Available Upon Request.
------------------------------------
The Fund will furnish, without charge, a copy of the Fund's most recent
annual report and the most recent semi-annual report succeeding the annual
report, if any, to a shareholder upon request. A shareholder may obtain such
report(s) by writing to the Fund or by calling 800-874-3733.
c. 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 purchased
from or sold to a market maker for the securities. Therefore, the Income Series
usually will pay no brokerage commissions on such transactions. Purchases from
underwriters of portfolio securities will include a commission or concession
paid by the issuer to the underwriter and purchases from or sales to dealers
serving as market makers will include a dealer's markup or markdown. 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 obtain best execution on all portfolio trans-
actions, which means that the Fund seeks to have purchases and sales of
portfolio securities executed at the most favorable prices, considering all
costs of the transaction including dealer markups and markdowns and any
brokerage commissions. This policy governs the selection of dealers and brokers
and the market in which the transaction is executed. To the extent permitted by
law, the Fund may, if considered
27
<PAGE>
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 traders who are officers
of the Fund and also are employees of Lord Abbett. For foreign assets, the
selection is made by Dunedin Fund Managers Limited, our 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 respon sible for the negotiation of prices and any
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 pay a brokerage commission on the purchase or sale of a
security that could be purchased from or sold to a market maker if the Fund's
net cost of the purchase or the net proceeds to the Fund of the sale are at
least as favorable as the Fund could obtain on a direct purchase or sale.
Brokers who receive such commissions may also provide research services at least
some of which are useful to Lord Abbett in their overall responsibilities with
respect to the Fund and the other accounts they manage. Research includes
trading equipment and computer software packages, acquired from third-party
suppliers, that enable Lord Abbett to access various information bases and may
include the furnishing of analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and the performance
of accounts. Such services may be used by Lord Abbett in servicing all their
accounts, and not all of such services will necessarily be used by Lord Abbett
in connection with their management of the Fund; conversely, such services
furnished in connection with brokerage on other accounts managed by Lord Abbett
may be used in connection with their management of the Fund, and not all of such
services will necessarily be used by Lord Abbett in connection with their
advisory services to such other accounts. The Fund has been advised by Lord
Abbett that research services received from brokers cannot be allocated to any
particular account, are not a substitute for Lord Abbett's services but are
supplemental to their own research effort and, when utilized, are subject to
internal analysis before being incorporated by Lord Abbett into their investment
process. As a practical matter, it would not be possible for Lord Abbett to
generate all of the information presently provided by brokers. While receipt of
research services from brokerage firms has not reduced Lord Abbett's
28
<PAGE>
normal research activities, the expenses of Lord Abbett could be materially
increased if it purchased such equipment and software packages directly from the
suppliers and attempted to generate such additional information through its own
staff. No commitments are made regarding the allocation of brokerage business to
or among brokers and trades are executed only when they are dictated by
investment decisions of the Fund to purchase or sell portfolio securities.
If two or more broker-dealers are considered capable of offering the
equivalent likelihood of best execution, the broker-dealer who has sold the
Fund's shares and/or shares of other Lord Abbett-sponsored funds may be
preferred.
If other clients of Lord Abbett buy or sell the same security at the same
time as the Fund, transactions will, to the extent practicable, be allocated
among all participating accounts in proportion to the amount of each order and
will be executed daily until filled so that each account shares the average
price and commission cost of each day. Other clients who direct that their
brokerage business be placed with specific brokers or who invest through wrap
accounts introduced to Lord Abbett by certain brokers may not participate with
the Fund in the buying and selling of the same securities as described above.
If these clients wish to buy or sell the same security as the Fund does, they
may have their transactions executed at times different from the Fund's
transactions and thus may not receive the same price or incur the same
commission cost as the Fund does.
The Fund will not seek "reciprocal" dealer business (for the purpose of
applying commissions in whole or in part for the Fund's benefit or otherwise)
from broker-dealers as consideration for the direction to them of portfolio
business.
For the fiscal years ended December 31, 1995, 1994 and 1993, the Equity
Series paid total commissions to independent broker-dealers of $337,401,
$281,959 and $251,909, respectively. The Income Series paid no commissions to
independent broker-dealers during these periods.
LORD ABBETT GLOBAL FUND, INC.
Kenneth B. Cutler
Vice President and Secretary
29
<PAGE>
EXHIBIT A
COMPARISON OF CURRENT FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS AND
PROPOSED FUNDAMENTAL AND CERTAIN NON-FUNDAMENTAL INVESTMENT POLICIES AND
RESTRICTIONS
<TABLE>
<CAPTION>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
- ----------------------------------------------------- ----------------------------------------------
<S> <C>
SHORT SALES/MARGIN.
FUNDAMENTAL FUNDAMENTAL
Neither Series may sell short securities or buy Each Series may purchase securities on
securities or evidences of interests therein on margin to the extent permitted by applica-
margin, although it may obtain short-term ble law.
credit necessary for the clearance of purchases
of securities. NON-FUNDAMENTAL
Neither Series may make short sales of
securities or maintain a short position
except to the extent permitted by
applicable law.
BORROWING.
FUNDAMENTAL FUNDAMENTAL
Neither Series may borrow money except as a Neither Series may borrow money, except
temporary measure for extraordinary or that (i) it may borrow from banks (as
emergency purposes, and then not in excess of defined in the Act) in amounts up to
5% of its net assets at the time of borrowing. 33 1/3% of its total assets (including the
amount borrowed), (ii) it may borrow up
to an additional 5% of its total assets for
temporary purposes, and (iii) it may
obtain such short-term credit as may be
necessary for the clearance of purchases
and sales of portfolio securities.
NON-FUNDAMENTAL
Neither Series may borrow in excess of
5% of its gross assets taken at cost or
market value, whichever is lower at the
time of borrowing, and then only as a
temporary measure for extraordinary or
emergency purposes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
- ----------------------------------------------------- ----------------------------------------------
<S> <C>
UNDERWRITING.
FUNDAMENTAL FUNDAMENTAL
Neither Series may act as underwriter of Neither Series may engage in the under-
securities issued by others, unless it is deemed writing of securities, except pursuant to a
to be one in selling a portfolio security re- merger or acquisition or to the extent that,
quiring registration under the Securities Act of in connection with the disposition of its
1933, such as those described under "Re- portfolio securities, it may be deemed to
stricted/Illiquid Securities" below. be an underwriter under federal securities
laws.
LENDING.
FUNDAMENTAL FUNDAMENTAL
Neither Series may lend money or securities to Neither Series may make loans to other
any person except that it may enter into short- persons, except that the acquisition of
term repurchase agreements with sellers of bonds, debentures or other corporate debt
securities it has purchased, and it may lend its securities and investment in government
portfolio securities to registered broker-dealers obligations, commercial paper, pass-
where the loan is 100% secured by cash or its through instruments, certificates of depos-
equivalent as long as it complies with regula- it, bankers acceptances, repurchase agree-
tory requirements and the Fund deems such ments or any similar instruments shall not
loans not to expose the Series to significant risk be subject to this limitation, and except
(investment in repurchase agreements further that each Series may lend its
exceeding 7 days and in other illiquid invest- portfolio securities, provided that the
ments is limited to a maximum of 5% of a lending of portfolio securities may be
Series' assets). made only in accordance with applicable
law.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
- ----------------------------------------------------- ----------------------------------------------
<S> <C>
REAL ESTATE/COMMODITIES.
FUNDAMENTAL FUNDAMENTAL
Neither Series may buy or sell real estate in- Neither Series may buy or sell real estate
cluding limited partnership interests therein (except that it may invest in securities
(except securities of companies, such as real directly or indirectly secured by real
estate investment trusts, that deal in real estate estate or interests therein or issued by
or interests therein), or oil, gas or other companies which invest in real estate or
mineral leases, commodities or commodity interests therein) or commodities or com-
contracts in the ordinary course of its business, modity contracts (except to the extent a
except such interests and other property ac- Series may do so in accordance with ap-
quired as a result of owning other securities, plicable law and without registering as a
though securities will not be purchased in order commodity pool operator under the Com-
to acquire any of these interests. modity Exchange Act as, for example,
with futures contracts).
NON-FUNDAMENTAL
Neither Series may invest in real estate
limited partnership interests or interests in
oil, gas or other mineral leases, or
exploration or other development
programs, except that the Series may
invest in securities issued by companies
that engage in oil, gas or other mineral
exploration or development activities.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
- ----------------------------------------------------- ----------------------------------------------
<S> <C>
DIVERSIFICATION.
FUNDAMENTAL FUNDAMENTAL
Neither Series may buy securities if the pur- With respect to 75% of its gross assets,
chase would then cause a Series to have more the Equity Series may not buy securities
than 5% of its gross assets at market value at of one issuer representing more than (i)
the time of purchase, invested in securities of 5% of its gross assets, except securities
any one issuer, except (i) securities issued or issued or guaranteed by the U.S. Govern-
guaranteed by the U.S. Government, its ment, its agencies or instrumentalities, or
agencies or instrumentalities which may be (ii) 10% of the voting securities of such
purchased in any amounts and (ii) securities issuer.
issued or guaranteed by foreign governments,
their agencies or instrumentalities which secu- NON-FUNDAMENTAL
rities (apart from those of any issuer totaling With respect to the Income Series, there is
5% or less of the Series' gross assets at market no fundamental policy or restriction (but
value at the time of purchase) cannot aggregate the Series will be required to meet the
more than 25% of the Series' gross assets at diversification rules under Subchapter M
market value at the time of purchase. Neither of the Internal Revenue Code).
Series may 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.
INVESTMENT IN A SINGLE INDUSTRY.
FUNDAMENTAL FUNDAMENTAL
Neither Series may concentrate its investments Neither Series may invest more than 25%
in any particular industry, but if deemed of its assets, taken at market value, in the
appropriate for attainment of its investment securities of issuers in any particular in-
objective, up to 25% of its gross assets (at dustry (excluding securities of the U.S.
market value at the time of investment) may be Government, its agencies and instrumen-
invested in any one industry classification the talities).
Fund uses for investment purposes.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
- ----------------------------------------------------- ----------------------------------------------
<S> <C>
RESTRICTED/ILLIQUID SECURITIES.
FUNDAMENTAL NON-FUNDAMENTAL
Neither Series may invest knowingly in secu- Neither Series may invest knowingly more
rities or other assets not readily marketable at than 15% of its net assets (at the time of
the time of purchase or subject to legal or con- investment) in illiquid securities, except
tractual restrictions on resale except as follows: for securities qualifying for resale under
no more than 5% of the value of each Series Rule 144A of the Securities Act of 1933,
may be invested in securities with legal or con- deemed to be liquid by the Board of
tractual restrictions on resale (restricted Directors.
securities), other than repurchase agreements,
and in securities which are not readily market-
able (including restricted securities, repurchase
agreements with maturities of more than seven
days and over-the-counter options).
MORTGAGING AND PLEDGING OF
ASSETS.
FUNDAMENTAL FUNDAMENTAL
Neither Series may pledge, mortgage or hypo- Neither Series may pledge its assets (other
thecate its assets; however, this provision does than to secure borrowings, or to the extent
not apply to permitted borrowing mentioned permitted by the Series' investment
above or to the grant of escrow receipts or the policies, as permitted by applicable law).
entry into other similar escrow arrangements
arising out of the writing of covered call
options.
INVESTMENTS IN SECURITIES OF
OTHER INVESTMENT COMPANIES.
NON-FUNDAMENTAL
No policy/restriction stated. Neither Series may invest in the securities
of other investment companies, except as
permitted by applicable law.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
- ----------------------------------------------------- ----------------------------------------------
<S> <C>
OPTIONS.
FUNDAMENTAL NON-FUNDAMENTAL
Neither Series may buy or sell put or call op- Neither Series may write, purchase or sell
tions, although it may buy, hold or sell rights puts, calls, straddles, spreads or
or warrants, utilize various foreign currency combinations thereof, except to the extent
hedging techniques, and it may write covered permitted in the Fund's prospectus and
call options and enter into closing purchase statement of additional information, as
transactions. they may be amended from time to time.
INVESTMENTS IN SECURITIES OF
ISSUERS IN OPERATION FOR LESS
THAN THREE YEARS.
FUNDAMENTAL NON-FUNDAMENTAL
Neither Series may invest more than 5% of its Neither Series may invest in securities of
gross assets, taken at market value at the time issuers which, with their predecessors,
of investment, in companies (including their have a record of less than three years
predecessors) with less than three years' con- continuous operations, if more than 5% of
tinuous operation. a Series' total assets would be invested in
such securities (this restriction shall not
apply to mortgage-backed securities,
asset-backed securities or obligations
issued or guaranteed by the U.S. Gov-
ernment, its agencies or instrumentalities).
OWNERSHIP OF PORTFOLIO SECURI-
TIES BY OFFICERS AND DIRECTORS.
FUNDAMENTAL NON-FUNDAMENTAL
Neither Series may own securities in a com- Neither Series may hold securities of any
pany when any of its officers, directors or issuer if more than 1/2 of 1% of the
security holders is an officer or director of the securities of such issuer are owned
Fund or an officer, director or partner of the beneficially by one or more officers or
Fund's investment manager or sub-adviser, if directors of the Fund or by one or more
after the purchase any of such persons owns partners or members of the underwriter or
beneficially more than 1/2 of 1% of such investment advisor if these owners in the
securities and such persons together own more aggregate own beneficially more than 5%
than 5% of such securities. of the securities of such issuer.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
- ----------------------------------------------------- ----------------------------------------------
<S> <C>
TRANSACTIONS WITH CERTAIN
PERSONS.
FUNDAMENTAL NON-FUNDAMENTAL
Neither Series may buy securities from or sell Neither Series may buy from or sell to
them to the Fund's officers, directors, or em- any of its officers, directors, employees,
ployees, or to the Fund's investment adviser or or its investment adviser or any of its
sub-adviser or to their partners, directors and officers, directors, partners or employees,
employees, other than capital stock of the any securities other than shares of the
Fund. Fund's common stock.
SENIOR SECURITIES.
FUNDAMENTAL
No policy/restriction stated. Neither Series may issue senior securities
to the extent such issuance would violate
applicable law.
PURCHASE OF WARRANTS.
NON-FUNDAMENTAL NON-FUNDAMENTAL
Neither Series may purchase warrants in excess Neither Series may invest in warrants if,
of 2% of net assets which are not listed on the at the time of the acquisition, its
New York or American Stock Exchange. investment in warrants, valued at the
lower of cost or market, would exceed
5% of such Series' total assets (included
within such limitation, but not to exceed
2% of such Series' total assets, are
warrants which are not listed on the New
York or American Stock Exchange or a
major foreign exchange).
</TABLE>
7
<PAGE>
EXHIBIT B
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Global Fund, Inc. -- Income Series -- Class A Shares
----------------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 12, 1996 by
and between LORD ABBETT GLOBAL FUND, INC., a Maryland corporation (the "Fund"),
on behalf of its INCOME SERIES (the "Series"), and LORD ABBETT DISTRIBUTOR LLC,
a New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's shares of capital
stock, including the Series' Class A shares (the "Shares") pursuant to the
Distribution Agreement between the Fund and the Distributor, dated as of the
date hereof (the "Distribution Agreement").
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement
(the "Plan") for the Series with the Distributor, as permitted by Rule 12b-1
under the Act, pursuant to which the Series may make certain payments to the
Distributor to be used by the Distributor or paid to institutions and persons
permitted by applicable law and/or rules to receive such payments ("Authorized
Institutions") in connection with sales of Shares and/or servicing of accounts
of shareholders holding Shares.
WHEREAS, the Fund's Board of Directors has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other
good and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agreements
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Series in order to (a) finance any activity which is
-
primarily intended to result in the sale of Shares and (b) provide continuing
-
information and investment services to shareholder accounts not serviced by
Authorized
<PAGE>
Institutions receiving a service fee from the Distributor hereunder and
otherwise to encourage such accounts to remain invested in the Shares; provided
--------
that (i) any payments referred to in the foregoing clause (a) shall not exceed
-
the distribution fee permitted to be paid at the time under paragraph 3 of this
Plan and shall be authorized by the Board of Directors of the Fund by a vote of
the kind referred to in paragraph 10 of this Plan and (ii) any payments referred
--
to in clause (b) shall not exceed the service fee permitted to be paid at the
time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for
remittance to Authorized Institutions and/or use by the Distributor pursuant to
this Plan (a) service fees and (b) distribution fees, each at an annual rate not
- -
to exceed .25 of 1% of the average annual net asset value of Shares outstanding.
The Board of Directors of the Fund shall from time to time determine the
amounts, within the foregoing maximum amounts, that the Series may pay the
Distributor hereunder. Any such fees (which may be waived by the Authorized
Institutions in whole or in part) may be calculated and paid quarterly or more
frequently if approved by the Board of Directors of the Fund. Such
determinations and approvals by the Board of Directors shall be made and given
by votes of the kind referred to in paragraph 10 of this Plan. Payments by
holders of Shares to the Series of contingent deferred reimbursement charges
relating to distribution fees paid by the Series hereunder shall reduce the
amount of distribution fees for purposes of the annual 0.25% distribution fee
limit. The Distributor will monitor the payments hereunder and shall reduce such
payments or take such other steps as may be necessary to assure that (i) the
-
payments pursuant to this Plan shall be consistent with Article III, Section 26,
subparagraphs (d)(2) and (5) of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. with respect to investment companies
with asset-based sales charges and service fees, as the same may be in effect
from time to time and (ii) the Series shall not pay with respect to any
--
Authorized Institution service fees equal to more than .25 of 1% of the average
annual net asset value of Shares sold by (or attributable to Shares or shares
sold by) such Authorized Institution and held in an account covered by an
Agreement.
4. The net asset value of the Shares shall be determined as provided in
the Articles of Incorporation of the Fund. If the Distributor waives all or a
portion of the fees which are to be paid by the Series hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Series pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Series hereunder and shall provide to the Fund's Board of
Directors, and the directors shall review at least quarterly, a written report
of the amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
2
<PAGE>
6. Neither this Plan nor any other transaction between the parties
hereto pursuant to this Plan shall be invalidated or in any way affected by the
fact that any or all of the directors, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as may
otherwise be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's
best judgment and good faith efforts in rendering services under this Plan.
Other than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund, the Series or any of the shareholders,
creditors, directors, or officers of the Fund; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Fund or the Series' shareholders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or by reason of the
reckless disregard of its obligations and duties hereunder.
8. This Plan shall become effective upon the date hereof, and shall
continue in effect for a period of more than one year from that date only so
long as such continuance is specifically approved at least annually by a vote of
the Board of Directors of the Fund, including the vote of a majority of the
directors who are not "interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to this Plan, cast in person at a meeting called for the purpose of
voting on such renewal.
9. This Plan may not be amended to increase materially the amount to be
spent by the Series hereunder above the maximum amounts referred to in paragraph
3 of this Plan without a shareholder vote in compliance with Rule 12b-1 and Rule
18f-3 under the Act as in effect at such time, and each material amendment must
be approved by a vote of the Board of Directors of the Fund, including the vote
of a majority of the directors who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreement related to this Plan, cast in person at a meeting called for
the purpose of voting on such amendment. Amendments to this Plan which do not
increase materially the amount to be spent by the Series hereunder above the
maximum amounts referred to in paragraph 3 of this Plan may be made pursuant to
paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Directors of the Fund, including the vote of a majority of the directors who
are not "interested persons" of the Fund and who have no direct or indirect
financial
3
<PAGE>
interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Directors of the Fund may, by such a vote, interpret
this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the directors of the Fund who are not
-
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
-
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such disinterested directors. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meanings as those terms are
defined in the Act.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on its behalf by its duly authorized representative as
of the date first above written.
LORD ABBETT GLOBAL FUND, INC.
By:________________________________
President
ATTEST:
____________________________
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By:_____________________________
4
<PAGE>
EXHIBIT C
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION OF THE FUND AUTHORIZING
THE BOARD OF DIRECTORS TO CREATE NEW CLASSES OF SHARES OF THE
CAPITAL STOCK OF THE FUND AND CONFIRMING THAT THE FUND MAY IMPOSE CONTINGENT
DEFERRED SALES CHARGES IN CONNECTION WITH ITS RULE 12b-1 PLANS
_____________________________________________________________________
The following text shows those provisions of the Articles of Incorporation of
the Fund that are to be amended; the text that is lined through shows deletions
and the text that is double underlined indicates additions.
ARTICLE V
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 Board of
Directors of the Corporation shall have full power and authority, from time to
time , to classify or reclassify any unissued Shares, including, without
limitation, the power to classify or reclassify unissued shares into series, and
to classify or reclassify a series into one or more classes of stock that may be
invested together in the common investment portfolio in which the series is
invested, by setting or changing the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications, or
terms or conditions of redemption of such shares of stock. All Shares of a
series shall represent the same interest in the Corporation and have the same
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption as the other Shares of that series, except to the extent that the
Board of Directors provides for differing preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption of Shares of classes of
such series as determined pursuant to Articles Supplementary filed for record
with the State Department of Assessments and Taxation of Maryland, or as
otherwise determined pursuant to these Articles or by the Board of Directors in
accordance with law. The Shares shall initially be classified into two series
designated initially as the "Equity Series", consisting of 100,000,000 Shares
and the "Income Series", consisting of 100,000,000 Shares. Prior to the first
classification of a series into additional classes, all outstanding Shares of
such series shall be of a single class. Notwithstanding any other provision of
these Articles, upon the classification of
<PAGE>
unissued Shares into additional series, the Board of Directors shall specify a
legal name for the new series in appropriate charter documents filed for record
with the State Department of Assessments and Taxation of Maryland providing for
such name change and classification, and upon the first classification of a
series into additional classes, the Board of Directors shall specify a legal
name for the outstanding class, as well as for the new class or classes, in
appropriate charter documents filed for record with the State Department of
Assessments and Taxation of Maryland providing for such name change and
classification.
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 series and classes
of series of Shares is as follows, unless otherwise set forth in Articles
Supplementary filed for record with the State Department of Assessments and
Taxation of Maryland or otherwise determined pursuant to these Articles:
(a) Assets Belonging to Series. All consideration received or
--------------------------
receivable by the Corporation for the issuance or sale of Shares of a
particular series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any reinvestment of
such proceeds in whatever form the same may be, shall irrevocably belong to
that series for all purposes, subject only to the rights of creditors, and
shall be so recorded upon the books of account of the Corporation. Such
consideration, assets, income, earnings, profits and proceeds, including
any proceeds derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, together with any unallocated items (as
hereinafter defined) relating to that series as provided in the following
sentence, are herein referred to as "assets belonging to" that series. In
the event that there are any assets, income, earnings, profits or proceeds
thereof, funds or payments which are not readily identifiable as belonging
to any particular series (collectively "Unallocated Items"), the Board of
Directors shall allocate such Unallocated
2
<PAGE>
Items to and among any one or more of the series created from time to time
in such manner and on such basis as it, in its sole discretion, deems fair
and equitable; and any Unallocated Items so allocated to a particular
series shall belong to that series. Each such allocation by the Board of
Directors shall be conclusive and binding upon the stockholders of all
series for all purposes.
(b) Liabilities Belonging to Series. The assets belonging to
-------------------------------
each particular series shall be charged with the liabilities of the
Corporation in respect of that series, including any class thereof, and
with all expenses, costs, charges and reserves attributable to that
series, including any such class, and shall be so recorded upon the books
of account of the Corporation. Such liabilities, expenses, costs, charges
and reserves , together with any unallocated items (as hereinafter defined)
relating to that series, including any class thereof, as provided in the
following sentence, so charged to that series, are herein referred to as
"liabilities belonging to" that series. In the event there are any
unallocated liabilities, expenses, costs, charges or reserves of the
Corporation which are not readily identifiable as belonging to any
particular series (collectively "Unallocated Items"), the Board of
Directors shall allocate and charge such Unallocated Items to and among any
one or more of the series created from time to time in such manner and on
such basis as the Board of Directors in its sole discretion deems fair and
equitable; and any Unallocated Items so allocated and charged to a
particular series shall belong to that series. Each such allocation by
the Board of Directors shall be conclusive and binding upon the
stockholders of all series for all purposes. To the extent determined by
the Board of Directors, liabilities and expenses relating solely to a
particular class (including, without limitation, distribution expenses
under a Rule 12b-1 plan and administrative expenses under an administration
or service agreement, plan or other arrangement, however designated, which
may be adopted for such class) shall be allocated to and borne by
3
<PAGE>
such class and shall be appropriately reflected (in the manner determined
by the Board of Directors) in the net asset value, dividends and
distributions and liquidation rights of the shares of such class.
(c) Dividends. Dividends and distributions on Shares of a
---------
particular series may be paid to the holders of Shares of that series at
such times, in such manner and from such of the income and capital gains,
accrued or realized, from the assets belonging to that series, after
providing for actual and accrued liabilities belonging to that series, as
the Board of Directors may determine. Such dividends and distributions may
vary between or among classes of a series to reflect differing allocations
of liabilities and expenses of such series between or among such classes to
such extent as may be provided in or determined pursuant to Articles
Supplementary filed for record with the State Department of Assessments and
Taxation of Maryland or as may otherwise be determined by the Board of
Directors.
(d) Liquidation. In the event of the liquidation or dissolution
-----------
of the Corporation, the stockholders of each series shall be entitled to
receive, as a series, when and as declared by the Board of Directors, the
excess of the assets belonging to that series over the liabilities
belonging to that series. The assets so distributable to the stockholders
of one or more classes of a series shall be distributed among such
stockholders in proportion to the respective aggregate net asset values of
the shares of such series held by them and recorded on the books of the
Corporation.
(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 series or class thereof and all shares of all series
and classes shall vote as a single class ("Single Class Voting"); provided,
however, that (i) as to any matter with respect to which a separate vote of
-
any series or class is required by the Investment Company Act of 1940 , as
amended from time
4
<PAGE>
to time, applicable rules and regulations thereunder, or the Maryland
General Corporation Law, such requirement as to a separate vote of that
series or class shall apply in lieu of Single Class Voting as described
above; (ii) in the event that the separate vote requirements referred to in
--
(i) above apply with respect to one or more (but less than all) series or
classes, then, subject to (iii) below, the shares of all other series and
classes shall vote as a single class; and (iii) as to any matter which does
---
not affect the interest of a particular series or class, only the holders
of shares of the one or more affected series or classes shall be entitled
to vote.
(f) Conversion. At such times (which times may vary among shares
of a class) as may be determined by the Board of Directors, Shares of a
particular class of a series may be automatically converted into Shares of
another class of such series based on the relative net asset values of such
classes at the time of conversion, subject, however, to any conditions of
conversion that may be imposed by the Board of Directors.
(g) Equality. All Shares of each particular series shall
--------
represent an equal proportionate interest in the assets belonging to that
series (subject to the liabilities belonging to that series), but the
provisions of this sentence or any other provision of these Articles shall
not restrict any distinctions that may exist with respect to stockholder
elections to receive dividends or distributions in cash or Shares or that
may otherwise exist with respect to dividends and distributions on Shares
of the same series.
SECTION 3. The Shares of the Corporation shall be subject to the
following provisions:
(a) All Shares now or thereafter authorized shall be subject to
redemption and be redeemable at the option of the
stockholder, in the sense used in the
5
<PAGE>
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 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 equal to the net asset
value of such Shares determined as hereinafter set forth.
Notwithstanding the foregoing, the Corporation may deduct
from the proceeds otherwise due to any stockholder requiring
the Corporation to redeem Shares a redemption charge not to
exceed one percent (1%) of such net asset value or a
reimbursement charge, a deferred sales charge or other
charge that is integral to the Corporation's distribution
program (which charges may vary within and among series and
classes) as may be established from time to time by the
Board of Directors.
(b) Notwithstanding the foregoing, the Board of Directors of
the Corporation may suspend the right of the holders of the
Shares to require the Corporation to redeem Shares or may
suspend any voluntary purchase of such Shares:
(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 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 set forth that redemption of Shares in such accounts
has been determined to be necessary to reduce dis-
proportionately 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
6
<PAGE>
such redemption by increasing his account to at least 25
Shares, or such lesser number of Shares as is specified in
the resolution.
* * *
ARTICLE VII
* * *
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:
* * *
(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 series)
dividends and distributions on the Corporation's Shares,
with respect to such series, 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
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 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 divi-
7
<PAGE>
dends 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 series, 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, 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
series, 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 series 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 series then held or owned by the Corporation.
* * *
(g) To authorize any agreement of the character described in
subsection (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
8
<PAGE>
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 director or officer of such other
corporation or not so interested. Any agreement entered into
pursuant to said subsections (e) or (f) shall be consistent
with and subject to the requirements of the Investment
Company Act of 1940, as amended from time to time,
applicable rules and regulations thereunder, or any other
applicable Act of Congress hereafter enacted, and no
amendment to any agreement entered into pursuant to said
subsection (e) (other than an amendment reducing the
compensation of the other party thereto) shall be effective
unless assented to by the affirmative vote of a majority of
the outstanding voting securities of the Corporation (as
such phrase is defined in the Investment Company Act of
1940, as amended from time to time) entitled to vote on the
matter.
SECTION 2. The Board of Directors may authorize the purchase by the
Corporation, either directly or through any agent, of the Shares, 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 Incor
poration, the net asset value of shares of the capital stock of the Corporation
of each series and class as of any particular time (a "determination time")
shall be determined by or pursuant to the direction of the Board of Directors as
follows:
(a) At times when a series is not classified into multiple
classes, the net asset value of each share of stock of a series, as
of a determination 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
9
<PAGE>
to that series (determined as hereinafter provided) as of such
determination time by the total number of shares of that series then
outstanding, including all shares of that series which the Corporation
has agreed to sell for which the price has been determined, and
excluding shares of that series which the Corporation has agreed to
purchase or which are subject to redemption for which the price has
been determined.
The net value of the assets of the Corporation of a series as of a
determination time shall be determined in accordance with sound
accounting practice by deducting from the gross value of the assets of
the Corporation belonging to that series (determined as hereinafter
provided), the amount of all liabilities belonging to that series (as
such terms are defined in subsection (b) of Section 2 of Article V),
in each case as of such determination time.
The gross value of the assets of the Corporation belonging to a series
as of such determination time shall be an amount equal to all cash,
receivables, the market value of all securities for which market
quotations are readily available and the fair value of other assets of
the Corporation belonging to that series (as such terms are defined in
subsection (a) of Section 2 of Article V) at such determination time,
all determined in accordance with sound accounting practice and giving
effect to the following:
* * *
(b) At times when a series is classified into multiple classes,
the net asset value of each share of stock of a class of
such series shall be determined in accordance with
subsections (a) and (c) of this Section 3 with appropriate
10
<PAGE>
adjustments to reflect differing allocations of liabilities
and expenses of such series between or among such classes to
such extent as may be provided in or determined pursuant to
Articles Supplementary filed for record with the State
Department of Assessments and Taxation of Maryland or as may
otherwise be determined by the Board of Directors.
(c) The Board of Directors is empowered, in its discretion, to
establish other methods for determining such net asset value
whenever such other methods are deemed by it to be necessary
or desirable, including, but without limiting the generality
of the foregoing, any method 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 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 Articles of
Incorporation and except that where the holders of Shares of any series or
class are entitled to a separate vote as such series or class (each such series
or class, a "Separate Class") or where the holders of Shares of two or more (but
not all) series or classes are required to vote as a single series or class
(each such single series or class, a "Combined Class"), the presence in person
or by proxy of the holders of 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 series, including all classes thereof, a Separate Class or a
Combined Class, as the case may be, shall not be present or represented at any
meeting of the shareholders, the holders of a majority of the Shares of all
series, such Separate Class or such Combined Class, as the case may be, present
in person or by proxy and entitled to vote shall have power to adjourn the
meeting from time to time as to all series, such Separate Class or such
Combined Class, as the case may be, without notice other than announcement at
the meeting, until the requisite number of Shares 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 series or classes, or of the
affected series or classes, as the case may be, which may be required by the
laws of the State of Maryland, the Investment Company Act of 1940 or any other
applicable law, or by these Articles of Incorporation, for action
11
<PAGE>
upon any given matter shall not prevent action at such meeting upon any other
matter or matters which may properly come before the meeting, if there shall be
present thereat, in person or by proxy, holders of the number of Shares required
for action in respect of such other matter or matters.
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
series or class, namely, the amount of the assets, obligations, liabilities and
expenses of the Corporation or belonging to any series or with respect to any
class; the amount of the net income of the Corporation from dividends and
interest for any period and the amount of assets at any time legally available
for the payment of dividends with respect to any series or class; the amount of
paid-in surplus, other surplus, annual or other net profits, or net assets in
excess of capital, undivided profits, or excess of profits over losses on sales
of securities belonging to the Corporation or any series or class; the amount,
purpose, time of creation, increase or decrease, alteration or cancellation of
any reserves or charges and the propriety thereof (whether or not any obligation
or liability for which such reserves or charges shall have been created shall
have been paid or discharged) with respect to the Corporation or any series or
class; the market value, or any sale, bid or asked price to be applied in
determining the market value, of any security owned or held by the Corporation ;
the fair value of any asset owned by the Corporation; the number of Shares of
the Corporation of any series or class issued or issuable; the existence of
conditions permitting the postponement of payment of the repurchase price of
Shares of any series or class or the suspension of the right of redemption as
provided by law; any matter relating to the acquisition, holding and disposition
of securities and other assets by the Corporation ; any question as to whether
any transaction constitutes a purchase of securities on margin, a short sale of
securities, or an underwriting of the sale of, or participation in any
underwriting or selling group in connection with the public distribution of any
securities; and any matter relating to the issue, sale, repurchase and/or other
acquisition or disposition of Shares of any series or class.
* * *
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
12
<PAGE>
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 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.
13
<PAGE>
EXHIBIT D
March 19, 1996
Dunedin Fund Managers Limited
Dunedin House
25 Ravelston Terrace
Edinburgh EH4 3EX
Scotland
Sub-Investment Management Agreement
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Dear Sirs:
Lord Abbett Global Fund, Inc. (the "Fund") has been organized as a
Corporation under the laws of the State of Maryland to engage in the business of
an investment company. This Agreement is made with respect to the Equity Series
of the Fund. The Fund's directors have selected Lord Abbett & Co. (the
"Adviser") to provide overall investment advice and management for the Fund, and
to provide certain other services, under the terms and conditions provided in
the Management Agreement, dated August 29, 1988, between the Fund and the
Adviser (the "Management Agreement"). The Adviser and the directors of the Fund
have selected Dunedin Fund Managers Limited, Dunedin House, 25 Ravelston
Terrace, Edinburgh EH4 3EX Scotland (the "Sub-Adviser") to provide the Adviser
and the Fund with the advice and services set forth below with respect to such
portion of the assets of the Equity Series as the Adviser, in consultation with
the Sub-Adviser, shall allocate pursuant to Section 3 of this Agreement to
investments in countries other than the United States (the "Foreign Assets") and
the Sub-Adviser is willing to provide such advice and services, subject to the
review of the directors and overall supervision of the Adviser, under the terms
and conditions hereinafter set forth. The Sub-Adviser hereby represents and
warrants (i) that it is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended and (ii) it is a member of Investment
Management Regulatory Organization Limited ("IMRO") and is regulated by IMRO in
the conduct of its Investment Business.
The Adviser agrees with the Sub-Adviser as follows:
1. Delivery of Documents. The Fund has furnished the Sub-Adviser with
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copies, properly certified or otherwise authenticated, of each of the following:
(a) Articles of Incorporation of the Fund, filed in Maryland on February
23, 1988 (the "Articles").
(b) By-Laws of the Fund as in effect on the date hereof.
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(c) Resolutions of the directors of the Fund selecting the Sub-Adviser as
sub-adviser to the Adviser with respect to the Equity Series of the Fund (the
"Series") and approving the form of this Agreement.
(d) Resolutions of the directors of the Fund selecting the Adviser as
investment adviser to the Fund and approving the form of the Adviser's
Management Agreement with the Fund.
(e) The Adviser's Management Agreement with the Fund.
(f) Commitments, limitations and undertakings made by the Fund to state
"blue sky" authorities for the purpose of qualifying shares of the Fund for sale
in such states.
(g) The Adviser's and the Fund's Code of Ethics as currently in
effect.
The Fund will furnish the Sub-Adviser from time to time with copies, properly
certified or otherwise authenticated, of all amendments of or supplements to the
foregoing, if any.
2. Investment Services. The Sub-Adviser will use its best efforts to
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provide to the Adviser for the Series a continuing and suitable investment
program with respect to investments in Foreign Assets, consistent with the
investment policies, objectives and restrictions of the Series. In the
performance of the Sub-Adviser's duties hereunder, subject always (i) to the
provisions contained in the documents delivered to the Sub-Adviser pursuant to
Section 1, as each of the same may from time to time be amended or supplemented,
and (ii) to the limitations set forth in the registration statement of the Fund
as in effect from time to time under the Securities Act of 1933, as amended, the
Sub-Adviser will, at its own expense with respect to the Foreign Assets:
(a) furnish the Adviser with advice and recommendations with respect to
the Foreign Assets, consistent with the investment policies, objectives and
restrictions of the Series, including advice on the selection and allocation of
investments among foreign securities markets and among foreign equity and debt
securities;
(b) subject to prior consultation with the Adviser, except as such
consultation shall be waived or limited by the Adviser, determine which
portfolio securities of the Series consisting of Foreign Assets should be
purchased, held or disposed of and what portion of such assets, if any, should
be held in cash or equivalents denominated in United States dollars or foreign
currencies;
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<PAGE>
(c) subject to prior consultation with the Adviser, except as such
consultation shall be waived or limited by the Adviser, make decisions for the
Series respecting foreign currency matters having regard to foreign exchange
controls, if any, including determinations with respect to entering into forward
foreign exchange contracts;
(d) subject to prior consultation with the Adviser, except as such
consultation shall be waived or limited by the Adviser, make determinations as
to the manner in which voting rights, subscription rights, rights to consent to
corporate action and any other rights pertaining to the Series' Foreign Assets
shall be exercised;
(e) furnish the Adviser with research, economic and statistical data in
connection with the Series' investments and investment policies respecting
Foreign Assets;
(f) submit such reports relating to the valuation of the Series' securities
consisting of Foreign Assets, including forward foreign exchange contracts
relating to such Foreign Assets, as the Adviser may reasonably request;
(g) engage in negotiations relating to the Series' investments in Foreign
Assets with issuers, investment banking firms, securities brokers or dealers and
other institutions or investors;
(h) consistent with the provisions of Section 8 of this Agreement, place all
orders for the purchase, sale or exchange of portfolio securities consisting of
Foreign Assets for the Series' account with brokers or dealers selected by the
Sub-Adviser, provided that in connection with the placing of such orders and the
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selection of such brokers or dealers the Sub-Adviser shall seek to obtain
execution and pricing within the policy guidelines determined by the directors
and set forth in the Prospectus and Statement of Additional Information of the
Fund.
(i) from time to time or at any time requested by the Adviser or the Fund's
directors, make reports to the Adviser or the Fund, as requested, of the Sub-
Adviser's performance of the foregoing services;
(j) subject to the supervision of the Adviser, maintain and preserve the
records required by the Investment Company Act of 1940 to be maintained by the
Sub-Adviser (the Sub-Adviser agrees that such records are the property of the
Fund and will be surrendered to the Fund promptly upon request therefor);
(k) obtain and evaluate such information relating to economies, industries,
businesses and securities markets, as well as portfolio securities of the
Series, as
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<PAGE>
the Sub-Adviser may deem necessary or useful in the discharge of its
duties hereunder;
(l) give instructions to the custodian and any sub-custodian of the Series as
to deliveries of securities to and from such custodian or sub-custodian,
transfer of currencies and payments of cash for the account of the Series, and
advise the Adviser on the same day such instructions are given; and
(m) cooperate generally with the Fund and the Adviser to provide information
necessary for the preparation of registration statements and periodic reports to
be filed with the Securities and Exchange Commission, including Forms N-1A and
N-SAR, periodic statements, shareholder communications and proxy materials
furnished to holders of shares of the Fund, filings with state "blue sky"
authorities and with United States and foreign agencies responsible for tax
matters, and other reports and filings of like nature.
3. Allocation of Assets. Subject to the review of the directors, the
--------------------
Adviser, in consultation with the Sub-Adviser, shall determine at least
quarterly the percentage of the assets of the Equity Series of the Fund that
shall be allocated to the Adviser or the Sub-Adviser for investment management
(the "Asset Allocation") and the manner in which such Asset Allocation in
general is to be achieved by adjustments to the Equity Series' existing
portfolio of securities. The Asset Allocation will specify the percentage of
assets of the Equity Series allocated to the Adviser or the Sub-Adviser for
management on the effective date of such determination and will apply to cash
inflow and outflow thereafter until the Asset Allocation is next redetermined.
If the Adviser and the Sub-Adviser cannot agree on an Asset Allocation, the
Adviser has the right to make the final determination, subject to review by the
directors.
4. Expenses Paid by the Sub-Adviser. The Sub-Adviser will pay the cost
--------------------------------
of maintaining the staff and personnel necessary for it to perform its
obligations under this Agreement, the expenses of office rent, telephone and
other facilities it is obligated to provide in order to perform the services
specified in Section 2, and any other expenses incurred by it in connection with
the performance of its duties hereunder.
5. Expenses of the Fund Not Paid by the Sub-Adviser. The Sub-Adviser
------------------------------------------------
will not be required to pay any expenses which this Agreement does not expressly
state shall be payable by it. In particular, and without limiting the
generality of the foregoing but subject to the provisions of Section 4, the Sub-
Adviser will not be required to pay:
(a) the compensation and expenses of directors of the Fund, and of independent
advisers, independent contractors, consultants, managers and other agents
employed by the Fund other than through the Sub-Adviser;
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<PAGE>
(b) legal, accounting and auditing fees and expenses of the Fund;
(c) the fees or disbursements of custodians, sub-custodians and depositories
of the Series' assets, transfer agents, disbursing agents, plan agents and
registrars;
(d) taxes and governmental fees assessed against the Fund's assets and payable
by the Series;
(e) the cost of preparing and mailing dividends, distributions, reports,
notices and proxy materials to shareholders, except that the Sub-Adviser shall
bear the costs of providing the information referred to in Section 2(m);
(f) brokers' commissions and underwriting fees;
(g) fees and other expenses related to foreign currency transactions,
including entering into forward foreign exchange contracts; and
(h) the expense of periodic calculations of the net asset value of the Fund's
shares.
6. Compensation of the Sub-Adviser. For all services to be rendered,
-------------------------------
facilities furnished and expenses paid or assumed by the Sub-Adviser as herein
provided, the Adviser will pay the Sub-Adviser each month a fee equal to one-
half of the Adviser's fee received from the Fund pursuant to the Management
Agreement during such month for services provided on or after the date of this
Agreement, computed and paid in United States dollars. Under the Management
Agreement as in effect on the date hereof, the Sub-Adviser's fee is 0.375% of
the average daily net assets of the Series, subject to waiver or subsidy by the
Adviser of all or a portion of the fees due to it under the Management
Agreement. The Fund shall not be liable to the Sub-Adviser for the Sub-
Adviser's compensation hereunder.
If in any fiscal year of the Fund the Adviser is required, or deems it
appropriate, to reduce its fee or to reimburse expenses of the Fund pursuant to
the terms of its Management Agreement with the Fund, the Sub-Adviser will
likewise reduce its fee or reimburse the Adviser, within 30 days after the
Adviser has notified the Sub-Adviser that the Adviser has so reduced its fee or
reimbursed the Fund, in an amount equal to one half of such reduction or
reimbursement. If any such management fees are later repaid by the Fund, one
half of such repayment will be paid to the Sub-Adviser. The net asset value
of the Fund shall be determined pursuant to the provisions of the Fund's
Prospectus and Statement of Additional Information. The Adviser agrees that no
voluntary reductions in its fee will be made without prior consultation with the
Sub-Adviser.
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<PAGE>
7. Other Activities of the Sub-Adviser and Its Affiliates. Nothing
------------------------------------------------------
herein contained shall prevent the Sub-Adviser or any of its affiliates or
associates from engaging in any other business or from acting as investment
adviser or investment manager for any other person or entity, whether or not
having investment policies or portfolios similar to the Fund's, except that,
without the written consent of the Adviser, which consent shall not be
unreasonably withheld, the Sub-Adviser shall not act as investment manager for
or provide investment advice to any other investment company registered under
the Investment Company Act of 1940 with investment objectives and policies
similar to the Fund's. It is specifically understood that officers, directors
and employees of the Sub-Adviser and those of its affiliates may continue to
engage in providing portfolio management services and advice to other investment
advisory clients of the Sub-Adviser or its affiliates.
8. Avoidance of Inconsistent Position, etc. In connection with
---------------------------------------
purchases or sales of portfolio securities for the account of the Series,
neither the Sub-Adviser nor any of its directors, officers or employees will act
as principal or agent or receive any commission. The Sub-Adviser shall adopt and
implement policies and procedures substantially similar to those contained in
the Adviser's Code of Ethics (a copy of which has been furnished to the Sub-
Adviser by the Adviser), which shall apply to the Sub-Adviser, its officers,
directors and employees. The Sub-Adviser shall not knowingly recommend that the
Series purchase, sell or retain securities of any issuer in which the Sub-
Adviser or any of its affiliates has a financial interest without obtaining
prior approval of the Adviser prior to the execution of any such transaction.
For purposes of the foregoing sentence, the term "affiliate" shall have the same
meaning as under the Investment Company Act of 1940. If any occasion should
arise in which the Sub-Adviser advises persons concerning the shares of the
Series, the Sub-Adviser will act solely on its own behalf and not in any way on
behalf of the Fund.
9. No Partnership or Joint Venture. The Fund, the Adviser and the Sub-
-------------------------------
Adviser are not partners of or joint venturers with each other and nothing
herein shall be construed so as to make them such partners or joint venturers or
impose any liability as such on any of them.
10. Limitation of Liability of the Sub-Adviser. The Sub-Adviser shall
------------------------------------------
not be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund or the Adviser in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on the Sub-Adviser's part in the performance of its duties
or from reckless disregard by it of its obligations and duties under this
Agreement.
11. Duration and Termination of this Contract. This Agreement is to be
-----------------------------------------
submitted to a meeting of shareholders of the Fund called for the purpose of
approving this Agreement by vote of the Equity Series and, if approved at that
meeting, shall become effective for two years from the date hereof and
thereafter from year
6
<PAGE>
to year, but only so long as such continuance is specifically approved, in the
case of the first such approval, prior to its second anniversary and thereafter
at least annually by (a) a majority of the directors of the Fund who are not
-
interested persons of the Adviser, of the Sub-Adviser or (other than as
directors) of the Fund, cast in person at a meeting called for the purpose of
voting on such approval, and (b) either (i) the directors of the Fund, or (ii)
- - --
a majority of the outstanding voting securities of the Series. This Agreement
may, on 60 days' written notice, be terminated at any time without the payment
of any penalty by the directors of the Fund, by vote of a majority of the
outstanding voting securities of the Series, by the Adviser or by the Sub-
Adviser. This Agreement shall automatically terminate in the event of its
assignment or upon the termination of the Adviser's Investment Management
Contract with the Fund. In interpreting the provisions of this Section 11, the
definitions contained in Section 2(a) of the Investment Company Act of 1940, as
amended (particularly the definitions of "assignment," "interested person" or
"voting security"), shall be applied.
12. Amendment of This Agreement. No provision of this Agreement may be
---------------------------
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment, transfer, assignment,
sale, hypothecation or pledge of this Agreement shall be effective until
approved by (a) the directors of the Fund, including a majority of the directors
-
who are not interested persons of the Adviser, of the Sub-Adviser or (other than
as directors) of the Fund, cast in person at a meeting called for the purpose of
voting on such approval, and (b) a majority of the outstanding voting securities
-
of the Fund, as defined in the Investment Company Act of 1940, as amended.
13. Miscellaneous. The captions in this Agreement are included for
-------------
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The Fund and the Adviser may use the name "Dunedin
Fund Managers Limited" or any name derived from or similar to that name in
reports, filings, shareholder communications, registration statements,
advertising materials and materials of like nature, subject always to the right
of the Sub-Adviser to review any such materials prior to their use, only for so
long as this Agreement or any extension, renewal or amendment hereof remains in
effect. At such time as such an agreement shall no longer be in effect, the Fund
and the Adviser will (to the extent they lawfully can) cease to use the name
"Dunedin Fund Managers Limited" or any other name indicating that the Fund or
the Adviser is advised by or otherwise connected with the Sub-Adviser.
7
<PAGE>
14. Governing Law. This Agreement shall be construed in accordance with
-------------
the laws of New York and the applicable provisions of the Investment Company Act
of 1940, as amended.
Yours very truly,
LORD, ABBETT & CO.
By____________________________
Managing Partner
The foregoing contract
is hereby agreed to as of
the date hereof.
DUNEDIN FUND MANAGERS LIMITED
By ______________________________
Chairman and Chief Executive
The foregoing contract
is hereby accepted
as of the date hereof.
LORD ABBETT GLOBAL FUND, INC.
By __________________________
Vice President
8
<PAGE>
LORD ABBETT GLOBAL FUND, INC.
INCOME SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and
RONALD P. LYNCH and each of them proxies, with full power of substi tution, to
vote (according to the number of votes which the undersigned would be entitled
to cast if then personally present) at the annual meeting of shareholders of
LORD ABBETT GLOBAL FUND, INC. (the "Fund") on June 19, 1996, including all
adjourn ments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-5.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1.Election of directors:
For [ ] Without Authority [ ] For All Except [ ]
(NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK THE "FOR
ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME BELOW.)
Ronald P. Lynch, Robert S. Dow, Thomas S. Henderson, E. Thayer Bigelow, Stewart
S. Dixon, John C. Jansing, C. Alan MacDonald, Hansel B. Millican, Jr. and Thomas
J. Neff.
2.For [ ] Against [ ] Abstain [ ] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the fiscal year
ending December 31, 1996.
3.For [ ] Against [ ] Abstain [ ] to approve or disapprove the proposed changes
in the Series' fundamental investment policies and restrictions, as described in
the proxy statement.
4.For [ ] Against [ ] Abstain [ ] to approve or disapprove the proposed new
Distribution Plan and Agreement for the Series'
<PAGE>
existing class of shares pursuant to Rule 12b-1 under the Investment Company Act
of 1940, as described in the proxy statement.
5. For [ ] Against [ ] Abstain [ ] to approve or disapprove an amendment to the
Fund's Articles of Incorporation (i) authorizing the Board of Directors to
-
create new classes of shares of capital stock; and (ii) confirming that the
--
board may impose contingent deferred sales charges in connection with new
classes of shares to be created, as described in the proxy statement.
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT GLOBAL FUND, INC.
INCOME SERIES
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE POSTAGE PAID RETURN ENVELOPE
PROVIDED.
For information as to the voting of stock registered in more than one name, see
page 1 of the proxy statement. When signing the proxy as attorney, executor,
administrator, trustee or guardian, please indicate the capacity in which you
are acting. Only authorized officers should sign for corporations.
Date:......................................................
Signature(s) of Shareholder(s) as shown at left
.............................................................
.............................................................
(Please read other side)
<PAGE>
LORD ABBETT GLOBAL FUND, INC.
EQUITY SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and
RONALD P. LYNCH and each of them proxies, with full power of substitution, to
vote (according to the number of votes which the undersigned would be entitled
to cast if then personally present) at the annual meeting of shareholders of
LORD ABBETT GLOBAL FUND, INC. (the "Fund") on June 19, 1996, including all
adjournments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-6.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1. Election of directors:
For [ ] Without Authority [ ] For All Except [ ]
(NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK THE "FOR
ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME BELOW.)
Ronald P. Lynch, Robert S. Dow, Thomas S. Henderson, E. Thayer Bigelow, Stewart
S. Dixon, John C. Jansing, C. Alan MacDonald, Hansel B. Millican, Jr. and Thomas
J. Neff.
2. For [ ] Against [ ] Abstain [ ] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the fiscal year
ending December 31, 1996.
3. For [ ] Against [ ] Abstain [ ] To approve or disapprove the proposed
changes in the Series' fundamental investment policies and restrictions, as
described in the proxy statement.
4. For [ ] Against [ ] Abstain [ ] To approve or disapprove the proposed new
Distribution Plan and Agreement for the Series' existing class of shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as described in
the proxy statement.
5. For [ ] Against [ ] Abstain [ ] To approve or disapprove an amendment to
the Fund's Articles of Incorporation (i) authorizing the Board of Directors to
-
create new classes of shares of capital stock;
1
<PAGE>
and (ii) confirming that the board may impose contingent deferred sales charges
--
in connection with new classes of shares to be created, as described in the
proxy statement.
6. For [ ] Against [ ] Abstain [ ] To approve or disapprove (i) a new Sub-
-
Investment Management Agreement with respect to the Series between Lord, Abbett
& Co. ("Lord Abbett") and Dunedin Fund Managers Limited ("Dunedin"), containing
the same terms and conditions and providing for payment of a sub-advisory fee
with respect to the Series on the same basis as contained and provided for in
the prior Sub-Investment Management Agreement between Lord Abbett and Dunedin
relating to the Fund, and (ii) payment to Dunedin of sub-advisory fees for the
--
period from March 19, 1996 through the date of shareholder approval of the new
Sub-Investment Management Agreement.
2
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT GLOBAL FUND, INC.
EQUITY SERIES
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE POSTAGE PAID RETURN ENVELOPE
PROVIDED.
For information as to the voting of stock registered in more than one name, see
page 1 of the proxy statement. When signing the proxy as attorney, executor,
administrator, trustee or guardian, please indicate the capacity in which you
are acting. Only authorized officers should sign for corporations.
Date:......................................................
Signature(s) of Shareholder(s) as shown at left
.............................................................
.............................................................
(Please read other side)
3
