================================================================================
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
b(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
LORD ABBETT 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):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
================================================================================
<PAGE>
[Letterhead of Lord Abbett Global Fund, Inc.]
FROM THE CHAIRMAN OF THE BOARD
- ------------------------------
Dear Shareholder,
The Board of Directors of Lord Abbett Global Fund, Inc. (the "Fund") has
called an Annual Meeting of Shareholders of the Fund to consider the matters
described below. The board recommends that you vote in favor of each proposal.
First, the board recommends that you vote to reelect the current
directors of the Fund and to ratify the selection of Deloitte & Touche LLP as
the Fund's independent public accountants.
Second, the board recommends that you vote in favor of a proposed
revision of the fundamental investment policies and restrictions of your Series
which is intended to provide for greater flexibility in managing the Series'
portfolio and to permit the board to change applicable policies in the future
without incurring the expense of shareholder meetings.
Third, the directors propose that your Series enter into a new 12b-1 Plan
and Dis tribution Agreement for your class of shares. This new 12b-1 Plan has
several changes which are designed primarily to maintain the competitive
position of the Fund and to encourage sales of the shares of each Series. These
changes, and the estimated effect of these changes on your Series' expenses, are
described in detail in the proxy statement.
Fourth, the directors propose that the Fund's Articles of Incorporation
be amended (i) to authorize the creation of new classes of each Series and (ii)
- --
to confirm that the Fund may impose contingent deferred sales charges in
connection with new classes of shares to be created (this change will have no
effect on your shares).
Fifth, the board recommends that shareholders of the Equity Series vote in
favor of a new Sub-Investment Management Agreement 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 in the prior Sub- Investment
Management Agreement between Lord Abbett and Dunedin.
These various matters are to be voted upon at a meeting of the
shareholders of the Fund to be held in New York on Wednesday, June 19, 1996 at
11:00 a.m.
YOUR VOTE ON THESE ISSUES IS CRITICAL. TO ENSURE THAT YOUR VOTE IS
COUNTED, IT IS IMPORTANT THAT YOU:
1. REVIEW THE ENCLOSED PROXY STATEMENT;
2. COMPLETE AND SIGN THE ENCLOSED PROXY CARD; AND
3. RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE AS SOON AS POSSIBLE.
Your prompt response will help save the Fund the expense of additional
solicitations.
We encourage you to review the enclosed materials. Because we believe
these proposals are in the best interests of shareholders, we encourage you to
vote in favor of the proposals.
Sincerely,
Ronald P. Lynch
Chairman of the Board
April 17, 1996
<PAGE>
PRELIMINARY COPY
LORD ABBETT GLOBAL FUND, INC.
767 Fifth Avenue
New York, New York 10153
Tel. No. (212) 848-1800
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
JUNE 19, 1996
PROXY STATEMENT
You are urged to sign and mail the proxy card in the enclosed postage-paid
envelope whether you own a few or many shares. Your prompt return of
the proxy may save the Fund the necessity and expense of further
solicitations to insure a quorum at this meeting.
<PAGE>
LORD ABBETT GLOBAL FUND, INC.
767 Fifth Avenue
New York, New York 10153
Telephone No. (212) 848-1800
Notice of Annual Meeting of Shareholders
To Be Held June 19, 1996 April 17, 1996
Notice is given hereby of an annual meeting of the shareholders of Lord Abbett
Global Fund, Inc. (the "Fund"). The meeting will be held at the offices of Lord,
Abbett & Co., on the 11th floor of The General Motors Building, 767 Fifth
Avenue, New York, New York, on Wednesday, June 19, 1996, at 11:00 a.m., for the
following purposes and to transact such other business as may properly come
before the meeting and any adjournments thereof.
ITEM 1. To elect directors;
ITEM 2. To ratify or reject the selection of Deloitte & Touche LLP as
independent public accountants of the Fund for the current fiscal
year;
ITEM 3. To approve or disapprove certain changes fundamental investment
policies and restrictions of each of the Equity Series and the Income
Seriesof the Fund (each, a "Series", and collectively the "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 Investment Company Act of 1940;
ITEM 5. To approve or disapprove an amendment to the Fund's Articles of
Incorporation (i) authorizing the Board of Directors to create 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); and
ITEM 6. To approve or disapprove 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 in the current Sub
-Investment Management Agreement between Lord Abbett and Dunedin.
By order of the Board of Directors
Kenneth B. Cutler
Vice President and Secretary
<PAGE>
Not all of the foregoing items require a shareholder vote for both Series. A
vote of the shareholders of your Series is required with respect to each of the
foregoing items only if such item is marked with an "X" for your Series in the
following table:
ITEM 1 ITEM 2 ITEM 3 ITEM 4 ITEM 5 ITEM 6
- ---------------------------------------------------------
Equity X X X X X X
Series
- ---------------------------------------------------------
Income X X X X X
Series
- ---------------------------------------------------------
The Board of Directors has fixed the close of business on March 22, 1996 as the
record date for determination of shareholders of the Fund entitled to notice of
and to vote at the meeting. Shareholders are entitled to one vote for each share
held. As of March 22, 1996, there were ____ shares of the Equity Series, ____
shares of the Income Series and ______ shares of the Fundissued 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 10:00 a.m. on Wednesday, June 19, 1996 at the offices
of Lord, Abbett & Co., the investment manager and principal underwriter of the
Fund ("Lord Abbett"), on the 11th floor of the General Motors Building, 767
Fifth Avenue, New York, New York 10153, and at any adjournments thereof. This
proxy statement and the enclosed proxy card are first being mailed to
shareholders on or about April 17,1996.
At the close of business on March 22, 1996 (the "Record Date"), there were
issued and outstanding ___________ shares of the Equity Series and _______
shares of the Income Series (each such Series, a "Series", and collectively the
"Series") of the Fund, and _____ shares of the Fund. Only shareholders of record
at the close of business on the Record Date are entitled to notice of, and to
vote at, the annual meeting or any adjournment thereof. Proxies will be
solicited by mail. Additional solicitations may be made by telephone, facsimile
or personal contact by officers or employees of Lord Abbett and its affiliates.
The Fund may also request brokerage houses, custodians, nominees, and
fiduciaries who are shareholders of record to forward proxy materials to
beneficial owners. D.F. King & Co. has been retained to assist in the
solicitation of proxies at an estimated cost of $_______. The cost of the
solicitation will be borne by _____________.
Shareholders are entitled to one vote for each full share, and a pro
portionate vote for each fractional share, of the Fund held as of the Record
Date. Under Maryland law, shares owned by two or more persons (whether as joint
tenants, co-fiduciaries or otherwise) will be voted as follows, unless a written
instrument or court order providing to the contrary has been filed with the
Secretary of the Fund: (1) if only one votes, that vote binds all; (2) if more
- -
than one votes, the vote of the majority binds all; and (3) if more than one
-
votes and the vote is evenly divided, the vote will be cast proportionately. If
the enclosed form of proxy is properly executed and returned in time to be voted
at the meeting, the proxies named therein will vote the shares represented by
the proxy in accordance with the instructions marked thereon. Unmarked proxies
will be voted FOR each of the items described in this Proxy Statement and any
other matters as deemed appropriate. A proxy may be revoked by the signer at
any time at or before the meeting by written notice to the Fund, by execution of
a later-dated proxy or by voting in person at the meeting.
Rule 18f-2 under the Act provides that any matter required to be
submitted, by the provisions of the Investment Company Act of 1940, as amended
(the "Act") or applicable state law, or otherwise, to the holders of the
outstanding voting securities of an investment company such as the Fund shall
not be deemed to have been effectively acted upon unless approved by the holders
of a majority of the outstanding shares of each series affected by such matter.
Rule 18f-2 further provides
<PAGE>
that a series shall be deemed to be affected by a matter unless the interests of
each series in the matter are substantially identical or the matter does not
affect any interest of such series. However, the Rule exempts the selection of
independent public accountants and the election of directors from the separate
voting requirements of the Rule.
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>
Director of
Names and Ages of Principal Occupation and Director- the Fund
Directors of the Fund ships Since
- -----------------------------------------------------------------------------------
<C> <S> <C>
Ronald P. Lynch (1)(2) Chairman of the Board of the Fund. 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.
E. Thayer Bigelow(2) President and Chief Executive of 1994
54 Time Warner Cable Programming,
Inc. Formerly President and Chief
Operating Officer of Home Box
Office, Inc.
Stewart S. Dixon (2) Partner in the law firm of Wildman, 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.
</TABLE>
2
<PAGE>
<TABLE>
Director of
Names and Ages of Principal Occupation and Director- the Fund
Directors of the Fund ships Since
- -----------------------------------------------------------------------------------
<C> <S> <C>
C. Alan MacDonald (2) General Partner, The Marketing 1988
62 Partnership, Inc., a full service
marketing consulting firm. Formerly
Chairman and Chief Executive Officer
of Lincoln Snacks, Inc., manufacturer
of branded snack foods (1992-1994).
Formerly President and Chief
Executive Officer of Nestle Foods
Corp., and prior to that, President
and Chief Executive Officer of
Stouffer Foods Corp., both
subsidiaries of Nestle SA,
Switzerland. Currently serves as
Director of Den West Restaurant Co.,
J. B. Williams, and Fountainhead
Water Company.
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
Act, 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 independent directors to defer their directors' fees and to have the
deferred amounts deemed invested in shares of the Fund for later payment. Also
shown is the number of shares owned beneficially by the directors and officers
as a group, together with such "phantom" shares credited to the accounts of
directors and officers as a group. In each case, the amounts shown are less than
1% of the Fund's outstanding capital stock.
Number of Shares Beneficially
Owned
Name and Phantom Shares/(1)/
- ---------------------------- ---------------------------------
Ronald P. Lynch 43,707
Robert S. Dow 19,892
Thomas S. Henderson 22,170
E. Thayer Bigelow 165
Stewart S. Dixon 761
3
<PAGE>
Number of Shares Beneficially
Owned
Name and Phantom Shares/(1)/
- ---------------------------- ---------------------------------
John C. Jansing 2,056
C. Alan MacDonald 620
Hansel B. Millican, Jr. 4,416
Thomas J. Neff 1,018
Directors and Officers as a 264,979
group
___________________
(1) Of the shares listed in the foregoing table, the following constitute
"phantom" shares credited to directors under the Deferred Plan: Mr.
Bigelow, 165 shares; Mr. Dixon, 624 shares; Mr. Jansing, 758 shares; Mr.
MacDonald, 620 shares; Mr. Millican, 763 shares; Mr. Neff, 756 shares; and
directors and officers as a group: 3,686 shares.
The Board of Directors has only one standing committee, an Audit Committee,
consisting of Messrs. Bigelow, MacDonald and Millican. The functions performed
by the Audit Committee include recommendation of the selection of independent
public accountants for the Fund to the Board of Directors for approval, review
of the scope and results of audit and non-audit services, the adequacy of
internal controls and material changes in accounting principles and practices
and other matters when requested from time to time by the directors (the
"Independent Directors") who are not "interested persons" of the Fund within the
meaning of the Act. The Audit Committee held four meetings during the fiscal
year ended December 31, 1995.
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.
4
<PAGE>
<TABLE>
<CAPTION>
For the Fiscal Year Ended December 31, 1995 For Year Ended
De-
cember 31, 1995
- ---------------------------------------------------------------------------------------------------------
(I) (II) (III) (IV) (V)
- ---------------------------------------------------------------------------------------------------------
Estimated Annual
Pension or Retire- Benefits Upon Re-
ment Benefits tirement Proposed
Aggregate Accrued by the to be Paid by the Total Compensation
Com- Fund and Fund and Fifteen Accrued by the Fund
pensation Ac- Fifteen Other Other Lord and Fifteen Other
crued by the Lord Abbett- Abbett-sponsored Lord Abbett-spon-
Name of Director Fund/1/ sponsored Funds/2/ 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, $5,796; 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 re tirement plans if the director were to retire at age 72 and the
annual retainers payable by such funds were the same as they are today.
The amounts set forth in column (III) were accrued by the Lord Abbett-
sponsored funds during the fiscal year ended December 31, 1995 with respect
to the retirement benefits set forth in column (IV).
(3) This column shows aggregate Independent Director's fees, including
attendance fees for board and committee meetings, of a nature referred to
in the first sentence of footnote (1), accrued by the Lord Abbett-sponsored
funds during the year ended December 31, 1995.
5
<PAGE>
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 43, Vice President since 1986.
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 Manage
ment & 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.
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 shares of the Fund voted at
the meeting. If a shareholder abstains from voting on this matter, then the
shares held by such shareholder shall be deemed present at the meeting for
purposes of determining a quorum and for purposes of calculating the vote with
respect to this matter, but shall not be deemed to have been voted in favor of
this matter. If a broker returns a "non-vote" proxy, indicating a lack of
authority to vote on this matter, then the shares covered by such non-vote shall
be deemed present at the meeting for purposes of determining a quorum but shall
not be deemed to be represented at the meeting for purposes of calculating the
vote with respect to this matter.
The Board of Directors recommends that the shareholders vote FOR the
election of each of the nominees as a director of the Fund.
6
<PAGE>
2. RATIFICATION OR REJECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche LLP as the in
dependent public accountants of the Fund for the fiscal year ending December 31,
1996. The Act requires that such selection be submitted for ratification or
rejection at the next annual meeting of shareholders if such meeting be held.
Deloitte & Touche LLP (or a predecessor firm) acted as the Fund's independent
public accountants for the year ended December 31, 1995, and for a number of
years prior thereto. Based on information in the possession of the Fund, and
information furnished by Deloitte & Touche LLP, the firm has no direct financial
interest and no material indirect financial interest in the Fund. A
representative of Deloitte & Touche LLP is expected to attend the meeting and
will be provided with an opportunity to make a statement and answer appropriate
questions.
Ratification of the selection of Deloitte & Touche LLP requires the
affirmative vote of a majority of the shares of the Fund voted at the meeting.
If a shareholder abstains from voting on this matter, then the shares held by
such shareholder shall be deemed present at the meeting for purposes of
determining a quorum and for purposes of calculating the vote with respect to
this matter, but shall not be deemed to have been voted in favor of this matter.
If a broker returns a "non-vote" proxy, indicating a lack of authority to vote
on this matter, then the shares covered by such non-vote shall be deemed present
at the meeting for purposes of determining a quorum but shall not be deemed to
be represented at the meeting for purposes of calculating the vote with respect
to this matter.
The Board of Directors recommends that shareholders vote to ratify the
selection of Deloitte & Touche LLP as the Fund's independent public accountants
for the fiscal year ending December 31, 1996.
3. PROPOSAL TO AMEND THE FUNDAMENTAL INVESTMENT RESTRICTIONS AND POLICIES OF
EACH SERIES OF THE FUND
The Board of Directors has approved various amendments to the investment
policies and restrictions of each Series in order to provide increased
flexibility in managing such Series' investment portfolio. Those investment
policies and restrictions of a Series that are designated "fundamental" may only
be changed by the vote of a "majority" (as defined in the Act) of the voting
securities of such Series. Those investment policies and restrictions designated
"non-fundamental" may be changed by the vote of the Board of Directors alone.
Therefore, the proposed amendments to the fundamental policies and restrictions
described below require shareholder approval. The current and proposed
investment policies and restrictions for each Series (both fundamental and non-
fundamental) with respect to various investment techniques and securities are
set forth in Exhibit A attached hereto.
Investment policies and restrictions govern generally the investment
activities of each 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.
Although the proposed fundamental investment policies and restrictions are less
restrictive than the current fundamental investment policies and restrictions of
each Series, non-fundamental restrictions have been adopted, to become effective
with the proposed amendments to
7
<PAGE>
the fundamental policies and restrictions, which will limit the effect of such
changes on the operations of the Series. The proposed fundamental policies and
restrictions are intended principally to provide greater flexibility in the
future management of the Series' investment portfolios. The Board of Directors
has no present intention of approving actions permitted by these less
restrictive fundamental policies. If it were to do so, the risks of investing
in such Series could be increased. No change is proposed with respect to the
investment objective of either Series.
The proposed policies and restrictions restate many of the policies and
restrictions currently in effect for each 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 the Series. In other instances, as
illustrated in Exhibit A, certain policies and restrictions previously deemed
fundamental have been redesignated non-fundamental. By making certain policies
and restrictions non-fundamental, the Board may amend a policy or restriction as
it deems appropriate and in the best interest of the Series and its
shareholders, without incurring the costs (normally borne by the 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 the
Fund to seek a shareholder vote to amend the policy or restriction to conform to
applicable law, as revised.
Approval of the proposed amendments to any Series' fundamental investment
restrictions and policies 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. If a shareholder abstains from voting on this matter, then the shares
held by such shareholder shall be deemed present at the meeting for purposes of
determining a quorum and for purposes of calculating the vote with respect to
this matter, but shall not be deemed to have been voted in favor of this matter.
If a broker returns a "non-vote" proxy, indicating a lack of authority to vote
on this matter, then the shares covered by such non-vote shall be deemed present
at the meeting for purposes of determining a quorum but shall not be deemed to
be represented at the meeting for purposes of calculating the vote with respect
to this matter.
If the proposed amendments are not approved by the shareholders of a
Series, the current fundamental policies and restrictions will continue in
effect for such Series.
The Board of Directors recommends that shareholders of each Series vote in
favor of the proposed amendments to the fundamental investment restrictions and
policies of such Series.
8
<PAGE>
4. NEW DISTRIBUTION PLAN AND AGREEMENT FOR THE
CLASS A SHARES
At a meeting of the Board of Directors of the Fund held on March 14, 1996,
the directors of the Fund unanimously approved, subject to shareholder approval,
and determined to submit to the shareholders 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 for each Series. The text of the Proposed Plan for each 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 will have 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 ____________ and became effective September 9, 1988.
The Current Plan was last amended by action of the Board of Directors on June
12, 1991.
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% dis tribution fee
has been paid are required to pay to the Fund a contingent deferred
reimbursement charge ("CDRC") of 1% of the original cost or the then net asset
value, whichever is less, of such shares if they are redeemed out of the Lord
Abbett-sponsored family of funds on or before the end of the twenty-fourth month
after the month in which the purchase occurred. (An exception is made for
certain re demptions by tax-qualified plans under Section 401 of the Internal
Revenue Code due to plan loans, hardship withdrawals, death, retirement or
separation from service with respect to plan participants.) If the shares are
exchanged into another Lord Abbett fund and are thereafter redeemed out of the
Lord Abbett family on or before the end of such twenty-fourth month, the charge
is collected for the Fund by the other fund. The Fund collects such a charge for
other Lord Abbett-sponsored funds in a similar situation.
Set forth below is a description of the principal changes to be effected
under the Proposed Plans:
9
<PAGE>
(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 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"). 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 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. 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 sale of Class A Shares would be subject to the
Distribution Fee Ceiling.
10
<PAGE>
(d) CDRC. The CDRC applicable to the Class A Shares would be substantially
----
similar to that payable under the Current Plan, except that no CDRC would be
payable in connection with redemptions by retirement plans (not just those
qualified under Section 401 of the Internal Revenue Code) attributable to any
benefit payment or distribution of any excess contribution thereunder (not just
those described above in connection with such exception under the Current Plan).
Because CDRC payments will be made directly to the 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 dis tribution
fee and the other changes described above had been in effect for the Fund's last
fiscal year, it is estimated that in the aggregate they would have increased the
ratio of expenses to average net assets of 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
competition and pricing experimentation in the mutual fund industry. As the
pace of change increases, the Board of Directors believes it will be useful to
be able to respond more quickly to marketplace pressures, and change in
appropriate cases the amount of the Class A 12b-1 distribution fees to be paid,
without unnecessarily burdening the shareholders with the costs of additional
proxy solicitations. The directors believe that the increased distribution
fees described above are good examples of the desirability of this flexibility.
Based on advice received from Lord Abbett, the decision by the Board to approve
the payment of distribution fees in connection with sales to retirement plans
with 100 or more eligible employees will enable the Class A Shares to compete
more effectively in this growing and important market. The 0.10% per annum
supplemental payments to dealers who meet certain criteria will permit the Fund
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.
11
<PAGE>
(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 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.
<TABLE>
<CAPTION>
Pro Forma
Pro-Forma (reflecting
Year ended (reflecting estimated amounts
December 31, maximum amounts that would have
1995 (reflecting payable under the been paid under
EQUITY SERIES the Current Plan) Proposed Plan) the Proposed 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>
12
<PAGE>
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>
- -----------------------------------------------------------------------------------------------------------------------------
1 year 3 years 5 years 10 years
- -----------------------------------------------------------------------------------------------------------------------------
Pro Pro Pro Pro Pro Pro
Forma Forma Forma Forma Forma Pro Forma Forma Pro Forma
Current (max.) (est.) Current (max.) (est.) Current (max.) (est.) Current (max.) (est.)
- ------- ----- ----- ------- ------ ----- ------- ------ ---------- ------- ----- ---------
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$73/5/ $75/3,5/ $74/4,5/ $106/5/ $113/3,5/ $107/4,5/ $141/5/ $153/3,5/ $143/4,5/ $240/5/ $264/3,5/ $244/4,5/
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
INCOME SERIES
Pro Forma
Pro-Forma (reflecting
Year ended (reflecting maximum estimated amounts
December 31, 1995 amounts payable that would have
(reflecting the under the Proposed been paid under
Current Plan) Plan) the Proposed Plan)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum Sales Load/1/ on Purchases 4.75% 4.75% 4.75%
Deferred Sales Load /1 / None/2/ None/2/ None/2/
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ------------------------------------------------------------------------------------------------------------------------------------
Management Fee 0.50% 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> <C> <C> <C> <C> <C> <C> <C>
Pro Pro Pro Pro Pro Pro Pro Pro
Forma Forma Forma Forma Forma Forma Forma Forma
Current (max.) (est.) Current (max.) (est.) Current (max.) (est.) Current (max.) (est.)
- --------- ------ ------ ------- ------ ------ ------- ------ ----- ------- ------ ------
- -------------------------------------------------------------------------------------------------------------------------------
$58/5/ $60/3,5/ $58/4,5/ $79/5/ $86/3,5/ $80/4,5/ $102/5/ $115/3,5/ $104/4,5/ $169/5/ $196/3,5/ $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.
13
<PAGE>
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.
3. Reflects the maximum annual 12b-1 fees 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. If a shareholder abstains from voting on this matter, then the shares
held by such shareholder shall be deemed present at the meeting for purposes of
determining a quorum and for purposes of calculating the vote with respect to
this matter, but shall not be deemed to have been voted in favor of this matter.
If a broker returns a "non-vote" proxy, indicating a lack of authority to vote
on this matter, then the shares covered by such non-vote shall be deemed present
at the meeting for purposes of determining a quorum but shall not be deemed to
be
14
<PAGE>
represented at the meeting for purposes of calculating the vote with respect to
this matter.
If the Proposed Plan is not approved for one or more 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.
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 for each Series. 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.
15
<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 December
31, 1995, the net assets of the Acquired Series were approximately $7,867,414,
and the net assets of the Income Series were approximately $238,290,596.
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 the Fund,
except for matters, such as approval of a Rule 12b-1 plan or a related service
plan, affecting only a particular class or classes. All shares voting on a
matter will have identical voting rights. All issued shares will be fully paid
and non-assessable, and shareholders will have no pre-emptive or other right to
subscribe to any additional shares. All shares within a series will have the
same rights and be subject to the same limitations set forth in the Articles of
Incorporation with respect to dividends, redemptions and liquidation except for
differences resulting from class-specific Rule 12b-1 plans and related service
plans and certain other class-specific expenses.
The proposed amendment to the Fund's Articles of Incorporation will also
make clear that the Fund may impose a CDSC and other charges (which charges may
vary within and among the classes) payable upon redemption as may be estab
lished from time to time by the Board of Directors of the Fund. The Fund's
Articles of Incorporation currently provide that the Fund may deduct a
redemption charge not exceeding 1% of the net asset value of the shares being
redeemed. The proposed amendment is deemed advisable in order to avoid any
question as to whether the proposed B Share CDSC referred to above, which in
some instances may exceed 1%, may be imposed in connection with the proposed
issuance of the Class B Shares. The Board of Directors has no intention of
increasing the CDRC currently payable or proposed to be payable on certain early
redemptions of your Fund shares. See Item 4 above.
Approval of the proposed amendment to the Articles of Incorporation
requires an affirmative vote of more than 50% of the outstanding shares of the
Fund.
16
<PAGE>
For this purpose, abstentions and broker non-votes, although counted for
purposes of attaining a quorum, will not be counted as voted in favor of 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
On March 19, 1996, Dunedin Fund Managers Group plc ("Dunedin") 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 (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, 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
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
17
<PAGE>
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 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.
Because the acquisition of DFM Holdings by Dunedin was consummated prior to
this shareholder meeting, and the Previous Agreement terminated as of the date
of the consummation of the transaction, Dunedin has continued to act as
Sub-Adviser to Lord Abbett with respect to the Equity Series as though the
Previous Agreement remained in effect until the shareholders of that Series
could meet to approve the New Agreement. The Fund has been advised by Dunedin
that the monthly fee paid by Lord Abbett to Dunedin with respect to the Equity
Series since March 19, 1995 has not exceeded the actual cost incurred by Dunedin
incurred in furnishing its sub- advisory service and that, prior to the approval
of the New Agreement by the shareholders of the Equity Series, it will not
charge for such service more than such actual cost. 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, and so Lord Abbett has continued to obtain such services
with respect to such Series and to pay for them as provided above.
The acquisition of DFM Holdings by Dunedin created a major fund management
group based in Scotland, with assets under management valued at over 8.2 billion
(pounds), or $ billion. Dunedin manages several unit trusts and investment
trusts which are not comparable to U.S. regulated investment companies. Prior to
the change of control of Dunedin, Dunedin acted as Investment Adviser to the
Equity and Income Series of the Fund as well as to the Global Equity Series of
the Lord Abbett Series Fund, Inc. and the Global Income Trust of Lord Abbett
Securities Trust. After the transaction, Dunedin will continue as Investment
Adviser with respect to the Equity Series of the Fund and the Global Equity
Series of Lord Abbett Series Fund, Inc., receiving one-half of the management
fee payable by each of those Funds, currently 0.75% respectively.
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:
<TABLE>
<CAPTION>
- ---------------------------------------------------------- ----------------------- -----------------------
Before the After the
Proposed Proposed
Transaction Transaction
- ---------------------------------------------------------- ----------------------- -----------------------
<S> <C> <C>
Edinburgh Fund Managers Group plc -- 100%
- ---------------------------------------------------------- ----------------------- -----------------------
The British Linen Bank Limited 50.5% --
- ---------------------------------------------------------- ----------------------- -----------------------
The Edinburgh Investment Trust plc 28.9% --
- ---------------------------------------------------------- ----------------------- -----------------------
The Northern American Trust plc 9.9% --
- ---------------------------------------------------------- ----------------------- -----------------------
The First Scottish American Trust plc 8.5% --
- ---------------------------------------------------------- ----------------------- -----------------------
Dundee and London Investment Trust plc 2.2% --
- ---------------------------------------------------------- ----------------------- -----------------------
100.0% 100.0%
- ---------------------------------------------------------- ----------------------- -----------------------
</TABLE>
British Investment Trust plc, [address], owns 37.2% of Dunedin's
outstanding shares; the balance of Dunedin'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 resourced of the Edinburgh Group, which will have
some 50 investment professionals, representing enlarged fund management
capability. Edinburgh has also advised Lord Abbett and the Fund that it
anticipates that the acquisition of DFM Holdings will neither affect the
operating procedures formerly 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
<PAGE>
shareholders of the Fund on May 10, 1989. The Management Agreement is renewable
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 $_____ 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 $________ with respect
to the Equity Series and $________ with respect to the Income Series as
principal underwriter on sales of shares of the Fund, in accordance with the
terms of the Distribution Agreement, after payment of $________ for the Equity
Series and $________ 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,
19
<PAGE>
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, Dunedin EH4 3EX
Scotland. Dunedin's Board of Directors consists of _________, all of whom are
located at Dunedin. _______ is the Chief Executive Officer and of Dunedin.
Approval of the New Agreement by the Equity 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. If a shareholder abstains from
voting on this matter, then the shares held by such shareholder shall be deemed
present at the meeting for purposes of determining a quorum and for purposes of
calculating the vote with respect to this matter, but shall not be deemed to
have been voted in favor of this matter. If a broker returns a "non-vote"
proxy, indicating a lack of authority to vote on this matter, then the shares
covered by such non-vote shall be deemed present at the meeting for purposes of
determining a quorum but shall not be deemed to be represented at the meeting
for purposes of calculating the vote with respect to this matter.
If the New Agreement is not approved by 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.
7. OTHER INFORMATION
Management is not aware of any matters to come before the meeting other
than those set forth in the notice. If any such other matters do come before
the meeting, the individuals named as proxies will vote, act, and consent with
respect thereto in accordance with their best judgment.
a. Timeliness of Shareholder Proposals.
-----------------------------------
Any shareholder proposals to be presented for action at the Fund's next
shareholder meeting pursuant to the provisions of Rule 14a-8 under the
Securities Exchange Act of 1934, as amended, must be received at the Fund's
principal execu tive offices within a reasonable time in advance of the date
solicitation is made for such meeting. The Fund does not intend to hold another
annual or special meeting of shareholders unless required to do so by the Act.
20
<PAGE>
b. Investment Adviser and Underwriter.
----------------------------------
Lord, Abbett & Co., 767 Fifth Avenue, New York, New York, 10153, acts as
investment adviser and principal underwriter with respect to the Fund.
c. Annual Report Available Upon Request.
------------------------------------
The Fund will furnish, without charge, a copy of the Fund's most recent
annual report and the most recent semi-annual report succeeding the annual
report, if any, to a shareholder upon request. A shareholder may obtain such
reports(s) by writing to the Fund or by calling 800-___-____.
d. Portfolio Transactions.
----------------------
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 trans action 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 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 responsible 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
21
<PAGE>
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 responsi bilities 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 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.
22
<PAGE>
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.
By:________________________________
Kenneth B. Cutler
Vice President and Secretary
23
<PAGE>
Draft--February 26, 1996
EXHIBIT A
COMPARISON OF CURRENT AND PROPOSED
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 Each Series may purchase securities
buy securities or evidences of interests on margin to the extent permitted by
therein on margin, although it may obtain applicable law.
short-term 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 Neither Series may borrow money,
as a temporary measure for extraordinary except that (i) it may borrow from
or emergency purposes, and then not in banks (as defined in the Act) in
excess of 5% of its net assets at the time amounts up to 33 1/3% of its total
of borrowing. 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>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
- ------------------------------------------------- -------------------------------------------
- ----------------------------------------------------------------------------------------------
<S> <C>
UNDERWRITING.
FUNDAMENTAL FUNDAMENTAL
Neither Series may act as underwriter of Neither Series may engage in the
securities issued by others, unless it is underwriting of securities, except
deemed to be one in selling a portfolio pursuant to a merger or acquisition or
security requiring registration under the to the extent that, in connection with
Securities Act of 1933, such as those the disposition of its portfolio
described under "Restricted/Illiquid securities, it may be deemed to be an
Securities" below. underwriter under federal securities
laws.
- ----------------------------------------------------------------------------------------------
LENDING.
FUNDAMENTAL FUNDAMENTAL
Neither Series may lend money or Neither Series may make loans to
securities to any person except that it may other persons, except that the
enter into short-term repurchase acquisition of bonds, debentures or
agreements with sellers of securities it has other corporate debt securities and
purchased, and it may lend its portfolio investment in government obligations,
securities to registered broker-dealers commercial paper, pass-through
where the loan is 100% secured by cash or instruments, certificates of deposit,
its equivalent as long as it complies with bankers acceptances, repurchase
regulatory requirements and the Fund agreements or any similar instruments
deems such loans not to expose the Series shall not be subject to this limitation,
to significant risk (investment in and except further that each Series
repurchase agreements exceeding 7 days may lend its portfolio securities,
and in other illiquid investments is limited provided that the lending of portfolio
to a maximum of 5% of a Series' assets). securities may be made only in
accordance with applicable law.
- ----------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
- ------------------------------------------------- -------------------------------------------
- ----------------------------------------------------------------------------------------------
<S> <C>
REAL ESTATE/COMMODITIES.
FUNDAMENTAL FUNDAMENTAL
Neither Series may buy or sell real estate Neither Series may buy or sell real
including limited partnership interests estate (except that it may invest in
therein (except securities of companies, securities directly or indirectly
such as real estate investment trusts, that secured by real estate or interests
deal in real estate or interests therein), or therein or issued by companies which
oil, gas or other mineral leases, invest in real estate or interests
commodities or commodity contracts in the therein), commodity or commodity
ordinary course of its business, except contracts (except to the extent a Series
such interests and other property acquired may do so in accordance with appli-
as a result of owning other securities, cable law and without registering as a
though securities will not be purchased in commodity pool operator under the
order to acquire any of these interests. Commodity 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>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
- ------------------------------------------------- -------------------------------------------
- ----------------------------------------------------------------------------------------------
<S> <C>
DIVERSIFICATION.
FUNDAMENTAL FUNDAMENTAL
Neither Series may buy securities if the With respect to 75% of its gross
purchase would then cause a Series to have assets, the Equity Series may not buy
more than 5% of its gross assets at market securities of one issuer
value at the time of purchase, invested in representing more than (i) 5% of its
securities of any one issuer, except (i) gross assets, except securities issued
securities issued or guaranteed by the U.S. or guaranteed by the U.S. Govern-
Government, its agencies or ment, its agencies or
instrumentalities which may be purchased instrumentalities, or (ii) 10% of the
in any amounts and (ii) securities issued or voting securities of such issuer.
guaranteed by foreign governments, their
agencies or instrumentalities which secu- With respect to the Income Series,
rities (apart from those of any issuer there is no fundamental policy or
totaling 5% or less of the Series' gross restriction (but the Series will be
assets at market value at the time of required to meet the diversification
purchase) cannot aggregate more than 25% rules under Subchapter M of the
of the Series' gross assets at market value Internal Revenue Code).
at the time of purchase. Neither 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 Neither Series may invest more than
investments in any particular industry, but 25% of its assets, taken at market
if deemed appropriate for attainment of its value, in the securities of issuers in
investment objective, up to 25% of its any particular industry (excluding
gross assets (at market value at the time of securities of the U.S. Government, its
investment) may be invested in any one agencies and instrumentalities).
industry classification the Fund uses for
investment purposes.
- ----------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
- ------------------------------------------------- -------------------------------------------
- ----------------------------------------------------------------------------------------------
<S> <C>
RESTRICTED/ILLIQUID
SECURITIES.
FUNDAMENTAL
Neither Series may invest knowingly in NON-FUNDAMENTAL
securities or other assets not readily Neither Series may invest, knowingly,
marketable at the time of purchase or more than 15% of its net assets (at
subject to legal or contractual restrictions the time of investment) in illiquid
on resale except as follows: no more than securities, except for securities
5% of the value of each Series may be qualifying for resale under Rule 144A
invested in securities with legal or of the Securities Act of 1933, deemed
contractual restrictions on resale (restricted to be liquid by the Board of
securities), other than repurchase Directors.
agreements, and in securities which are not
readily marketable (including restricted
securities, repurchase agreements with
maturities of more than seven days and
over-the-counter options).
- ----------------------------------------------------------------------------------------------
MORTGAGING AND PLEDGING OF
ASSETS.
FUNDAMENTAL FUNDAMENTAL
Neither Series may pledge, mortgage or Neither Series may pledge its assets
hypothecate its assets; however, this (other than to secure borrowings, or
provision does not apply to permitted to the extent permitted by the Series'
borrowing mentioned above or to the grant investment policies, in connection
of escrow receipts or the entry into other with hedging transactions, short sales,
similar escrow arrangements arising out of when-issued and forward commitment
the writing of covered call options. transactions and similar investment
strategies).
- ----------------------------------------------------------------------------------------------
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>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
- ------------------------------------------------- -------------------------------------------
- ----------------------------------------------------------------------------------------------
<S> <C>
OPTIONS.
FUNDAMENTAL NON-FUNDAMENTAL
Neither Series may buy or sell put or call Neither Series may write, purchase or
options, although it may buy, hold or sell sell puts, calls, straddles, spreads or
rights or warrants, utilize various foreign combinations thereof, except to the
currency hedging techniques, and it may extent permitted in the Fund's
write covered call options and enter into prospectus and statement of additional
closing purchase transactions. information, as 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% Neither Series may invest in securities
of its gross assets, taken at market value at of issuers which, with their
the time of investment, in companies predecessors, have a record of less
(including their predecessors) with less than three years continuous
than three years' continuous operation. operations, if more than 5% of 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. Government, its agencies or
instrumentalities).
- ----------------------------------------------------------------------------------------------
OWNERSHIP OF PORTFOLIO SECU-
RITIES BY OFFICERS AND
DIRECTORS.
FUNDAMENTAL NON-FUNDAMENTAL
Neither Series may own securities in a Neither Series may hold securities of
company when any of its officers, any issuer if more than 1/2 of 1% of
directors or security holders is an officer the securities of such issuer are
or director of the Fund or an officer, owned beneficially by one or more
director or partner of the Fund's officers or directors of the Fund or by
investment manager or sub-adviser, if after one or more partners or members of
the purchase any of such persons owns the underwriter or investment advisor
beneficially more than 1/2 of 1% of such if these owners in the aggregate own
securities and such persons together own beneficially more than 5% of the
more than 5% of such securities. securities of such issuer.
- ----------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
- ------------------------------------------------- -------------------------------------------
- ----------------------------------------------------------------------------------------------
<S> <C>
TRANSACTIONS WITH CERTAIN
PERSONS.
FUNDAMENTAL
Neither Series may buy securities from or NON-FUNDAMENTAL
sell them to the Fund's officers, directors, Neither Series may buy from or sell
or employees, or to the Fund's investment to any of its officers, directors,
adviser or sub-adviser or to their partners, employees, or its investment adviser
directors and employees, other than capital or any of its officers, directors,
stock of the Fund. partners or employees, any securities
other than shares of the Fund's
common stock.
- ----------------------------------------------------------------------------------------------
SENIOR SECURITIES.
FUNDAMENTAL
No Policy/Restriction stated. Neither Series may issue senior se-
curities to the extent such issuance
would violate applicable law.
- ----------------------------------------------------------------------------------------------
PURCHASE OF WARRANTS.
NON-FUNDAMENTAL NON-FUNDAMENTAL
Neither Series may purchase warrants in Neither Series may invest in warrants
excess of 2% of net assets which are not if, at the time of the acquisition, its
listed on the New York or American Stock investment in warrants, valued at the
Exchange. 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 forgoing paragraph 9 may be adopted by a vote of the Board of
Directors of the Fund, including the vote of a majority of the directors who are
not
3
<PAGE>
"interested persons" of the Fund and who have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to this Plan.
The Board of Directors of the Fund may, by such a vote, interpret this Plan and
make all determinations necessary or advisable for its administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the directors of the Fund who are not
-
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
-
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such disinterested directors. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meanings as those terms are
defined in the Act.
IN WITNESS WHEREOF, each of the parties has caused this in strument to be
executed in its name and on its behalf by its duly authorized repre sentative as
of the date first above written.
LORD ABBETT GLOBAL FUND, INC.
By:________________________________
President
ATTEST:
_____________________
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By:_____________________________
4
<PAGE>
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Global Fund, Inc. -- Equity 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 EQUITY 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 in
-
5
<PAGE>
formation and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the Shares;
provided that (i) any payments referred to in the foregoing clause (a) shall not
- -------- -
exceed the distribution fee permitted to be paid at the time under paragraph 3
of this Plan and shall be authorized by the Board of Directors of the Fund by a
vote of the kind referred to in paragraph 10 of this Plan and (ii) any payments
--
referred to in clause (b) shall not exceed the service fee permitted to be paid
at the time under paragraph 3 of this Plan.
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.
6
<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, 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 forgoing paragraph 9 may be adopted by a vote of the Board of
Directors of the Fund, including the vote of a majority of the directors who are
not
7
<PAGE>
"interested persons" of the Fund and who have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to this Plan.
The Board of Directors of the Fund may, by such a vote, interpret this Plan and
make all determinations necessary or advisable for its administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the directors of the Fund who are not
-
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
-
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such disinterested directors. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meanings as those terms are
defined in the Act.
IN WITNESS WHEREOF, each of the parties has caused this in strument to be
executed in its name and on its behalf by its duly authorized repre sentative as
of the date first above written.
LORD ABBETT GLOBAL FUND, INC.
By:________________________________
President
ATTEST:
_____________________
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By:_____________________________
8
<PAGE>
EXHIBIT C
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION OF THE FUND AUTHORIZING
THE BOARD OF DIRECTORS TO CREATE NEW CLASSES AND SERIES OF SHARES OF THE
CAPITAL STOCK OF THE FUND 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 unissued Shares into additional
series, the Board of Directors shall specify a legal
<PAGE>
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 Items to and
among any one or
2
<PAGE>
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 belong ing to
any particular series (collectively, "Unallocated Items"), the Board of
Directors shall allocate and charge such Unallocated Items to and among any one
or more of the series created from time to time in such manner and on such basis
as the Board of Directors in its sole discretion deems fair and equitable; and
any Unallocated Items so allocated and charged to a particular series shall
belong to that series. Each such allocation by the Board of Directors shall be
conclusive and binding upon the stockholders of all series for all purposes. To
the extent determined by the Board of Directors, liabilities and expenses
relating solely to a particular class (including, without limitation,
distribution expenses under a Rule 12b-1 plan and administrative expenses under
an administration or service agreement, plan or other arrangement, however
designated, which may be adopted for such class) shall be allocated to and borne
by such class and shall be appropriately reflected (in the
3
<PAGE>
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 to time, applicable rules and regulations thereunder, or
4
<PAGE>
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
General Laws of the State of Maryland authorizing the
5
<PAGE>
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 disproportionately burdensome expenses in servicing
stockholder accounts, or to be otherwise in the economic best interest of
the Corporation. Such resolution shall provide that prior notice of at
least 30 days (or such longer period as is specified in the resolution)
from the date of the notice to avoid such redemption by increasing his
account to at
6
<PAGE>
least 25 Shares, or such lesser number of Shares as is specified in the
resolution.
ARTICLE VII
SECTION 1.
(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 dividends
or distributions on any basis, including establishing a number of record or
payment dates subsequent to the declaration at any dividend or
distribution; establishing the same payment date for any number of
dividends or distributions declared prior to such date; providing for the
payment of dividends or distributions declared and as yet unpaid to
stockholders of the Corporation redeeming shares prior to the payment date
otherwise applicable, and providing in advance for
7
<PAGE>
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 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
8
<PAGE>
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
Incorporation, 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 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
9
<PAGE>
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 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
10
<PAGE>
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 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
11
<PAGE>
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 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.
12
<PAGE>
EXHIBIT D
Dunedin Fund Managers Limited
Dunedin House
25 Ravelston Terrace
Dunedin EH4 3EX, Scotland
Sub-Investment Management Agreement
Dear Sirs:
Lord Abbett Global Fund (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, Dunedin 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 that (i) 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 copies,
properly certified or otherwise authenticated, of each of the following:
(a) Declaration and Agreement of Fund of the Fund, dated
February 23, 1988 (the "Articles").
(b) By-Laws of the Fund as in effect hereof.
(c) Resolutions of the Directors of the Fund selecting the
Sub-Adviser as sub-adviser to the Adviser with respect to the Equity 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 Code of Ethics as currently in effect.
<PAGE>
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
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;
(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 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
<PAGE>
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 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 Series 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 Series, 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 Series 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;
(b) legal, accounting and auditing fees and expenses of the Fund;
<PAGE>
(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 monthly, based on the average
daily net asset value of the Series for the preceding month, a fee at the annual
rate of one-half of the Adviser's fee from the Fund pursuant to the Management
Agreement during such month, computed and paid in United States dollars. 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. The net asset value of the Fund shall be determined pursuant to
the provisions of the Series' Prospectus and Statement of Additional
Information.
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
<PAGE>
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 Series, 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 Series 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 being
submitted today 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 time of such approval
as described in the proxy statement for such meeting and thereafter from year 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 Series.
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 Series, 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 Series 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,
<PAGE>
the Series 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
Series or the Adviser is advised by or otherwise connected with the Sub-Adviser.
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 __________________________
The foregoing contract
is hereby agreed to as of
the date hereof.
LORD ABBETT GLOBAL FUND, INC.
By __________________________
Vice President
<PAGE>
LORD ABBETT GLOBAL FUND, INC.
EQUITY SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
Tel. No. (212) 848-1800
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and
RONALD P. LYNCH and each of them proxies, with full power of substitution, to
vote (according to the number of votes which the undersigned would be entitled
to cast if then personally present) at the annual meeting of shareholders of
LORD ABBETT 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
<PAGE>
Investment Company Act of 1940, as described in the proxy statement.
5. For [ ] Against [ ] Abstain [ ] To approve or disapprove an amendment to
the Fund's Articles of Incorporation (i) authorizing the Board of
-
Directors to create new classes and series of shares of capital stock;
and (ii) confirming that the board may impose contingent deferred sales
--
charges in connection with new classes of shares to be created, as
described in the proxy statement.
6. For [ ] Against [ ] Abstain [ ] To approve or disapprove a new Sub-
Investment Management Agreement between Lord, Abbett & Co. ("Lord
Abbett") and Dunedin Fund Managers Group plc, as successor to 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 in the current Sub-Investment
Management Agreement between Lord Abbett and Dunedin.
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 autho rized officers should sign for corporations.
Date:......................................................
Signature(s) of Shareholder(s) as shown at left
.............................................................
.............................................................
(Please read other side)
3
