1940 Act File No. 8115476
1933 Act File No. 3320309
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No.11 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]
OF 1940
Post-Effective Amendment No.10 [X]
LORD ABBETT GLOBAL FUND, INC.
-----------------------------
Exact Name of Registrant as Specified in Charter
767 FIFTH AVENUE, NEW YORK, N. Y. 10153-0203
--------------------------------------------
Address of Principal Executive Office
Registrant's Telephone Number (212) 848-1800
--------------------------------------------
Thomas F. Konop, Vice President
767 FIFTH AVENUE, NEW YORK, N. Y. 10153
---------------------------------------
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box)
immediately on filing pursuant to paragraph (b) of Rule 485
- -----
X on May 1, 1998 pursuant to paragraph (b) of Rule 485
- -----
60 days after filing pursuant to paragraph (a) (1) of Rule 485
- -----
on (date) pursuant to paragraph (a) (1) of Rule 485
- -----
75 days after filing pursuant to paragraph (a) (2) of Rule 485
- -----
on (date) pursuant to paragraph (a) (2) of Rule 485
- -----
If appropriate, check the following box:
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
1
<PAGE>
LORD ABBETT GLOBAL FUND, INC.
FORM N-1A
Cross Reference Sheet
to Rule 481 (a)
Post-Effective Amendment No.11
Form N-1A Location In Prospectus or
Item No. Statement of Additional Information
- -------- -----------------------------------
1 Cover Page
2 Fee Table
3 (a) Financial Highlights; Performance
3 (b) N/A
3 (c) Performance
3 (d) N/A
4 (a) (i) Cover Page
4 (a) (ii) Investment Objectives and Policies
4 (b) Investment Objectives and Policies
4 (c) Risk Factors
5 (a) Our Management
5 (b) (c) Our Management; Back Cover Page
5 (d) N/A
5 (e) Back Cover Page
5 (f) Our Management
5 (g) N/A
5 A Performance
6 (a) Cover Page
6 (b) (c) (d) N/A
6 (e) Cover Page
6 (f) (g) Dividends, Capital Gains
Distributions and Taxes
6 (h) Cover Page
7 (a) Back Cover Page
7 (b) (c) (d)
(e) (f) Purchases
8 Redemptions
9 N/A
10 Cover Page
11 Cover Page - Table of Contents
12 N/A
13 Investment Objectives and Policies
14 Directors and Officers
15 (a) (b) N/A
15 (c) Directors and Officers
16 (a) (i) Investment Advisory and Other Services
16 (a) (ii) Directors and Officers
16 (a) (iii) Investment Advisory and Other Services
2
<PAGE>
16 (b) Investment Advisory and Other Services
16 (c)(d)(e)(g) N/A
16 (f) Purchases, Redemptions
and Shareholder Services; Directors and Officers
16 (h) Investment Advisory and Other Services
16 (i) N/A
Form N-1A Location In Prospectus or
Item No. Statement of Additional Information
- -------- -----------------------------------
17 (a) Portfolio Transactions
17 (b) N/A
17 (c) (d) Portfolio Transactions
17 (e) N/A
18 (a) Cover Page
18 (b) N/A
19 (a) (b) Purchases, Redemptions
and Shareholder Services
19 (c) N/A
20 Taxes
21 (a) Purchases, Redemptions
and Shareholder Services
21 (b) (c) N/A
22 (a) N/A
22 (b) Past Performance
23 Financial Statements
3
<PAGE>
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Part B - Statement of Net Assets at December 31, 1997.
Statement of Operations for the year ended December 31, 1997.
Statements of Changes in Net Assets for the year ended
December 31, 1996 and 1997.
Financial Highlights for the Period September 30, 1988
(commencement of operations) - December 31, 1988 and each of
nine separate fiscal years ended December 31, 1997.
(b) Exhibits -
99.B1
99.B11 Consent of Deloitte & Touche*
99.B18 Form of Plan entered into by Registrant pursuant
to Rule 18f-3**
Ex. 16 Computation of Performance and Yield*
Ex. 27 Financial Data Schedule*
* Filed herewith.
** Incorporated by reference to Post-Effective
Amendment No. 12 to the Registration
Statement on Form N-1A of Lord Abbett Investment
Trust (File No. 811-7988).
Item 25. Persons Controlled by or Under Common Control with Registrant
None.
Item 26. Number of Record Holders of Securities
As of April 17, 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Equity Series - 11,878 (Class A) Income Series - 7,877 (Class A)
985 (Class B) 118 (Class B)
543 (Class C) 254 (Class C)
</TABLE>
Item 27. Indemnification
Registrant is incorporated under the laws of the State of Maryland
and is subject to Section 2-418 of the Corporations and Associations
Article of the Annotated Code of the State of Maryland controlling
the indemnification of directors and officers. Since Registrant has
its executive offices in the State of New York, and is qualified as
a foreign corporation doing business in such State, the persons
covered by the foregoing statute may also be entitled to and subject
to the limitations of the indemnification provisions of Section
721-726 of the New York Business Corporation Law.
The general effect of these statutes is to protect officers,
directors and employees of Registrant against legal liability and
expenses incurred by reason of their positions with the Registrant.
The statutes provide for indemnification for liability for
proceedings not brought on behalf of the corporation and for those
brought on behalf of the corporation, and in each case place
conditions under which indemnification will be permitted, including
requirements that the officer, director or employee acted in good
faith. Under certain conditions, payment of expenses in advance of
final disposition may be permitted. The By-Laws of Registrant,
without limiting the authority of Registrant to indemnify any of its
officers, employees or agents to the extent consistent with
applicable law, makes the indemnification of its directors mandatory
subject only to the conditions and limitations imposed by the
above-mentioned Section 2-418 of Maryland Law and by the provisions
of Section 17(h) of the Investment Company Act of 1940 as
interpreted and required to be implemented by SEC Release
4
<PAGE>
No. IC-11330 of September 4, 1980.
In referring in its By-Laws to, and making indemnification of
directors subject to the conditions and limitations of, both Section
2-418 of the Maryland Law and Section 17(h) of the Investment
Company Act of 1940, Registrant intends that conditions and
limitations on the extent of the indemnification of directors
imposed by the provisions of either Section 2-418 or Section 17(h)
shall apply and that any inconsistency between the two will be
resolved by applying the provisions of said Section 17(h) if the
condition or limitation imposed by Section 17(h) is the more
stringent. In referring in its By-Laws to SEC Release No. IC-11330
as the source for interpretation and implementation of said Section
17(h), Registrant understands that it would be required under its
By-Laws to use reasonable and fair means in determining whether
indemnification of a director should be made and undertakes to use
either (1) a final decision on the merits by a court or other body
before whom the proceeding was brought that the person to be
indemnified ("indemnitee") was not liable to Registrant or to its
security holders by reason of willful malfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the
conduct of his office ("disabling conduct") or (2) in the absence of
such a decision, a reasonable determination, based upon a review of
the facts, that the indemnitee was not liable by reason of such
disabling conduct, by (a) the vote of a majority of a quorum of
directors who are neither "interested persons" (as defined in the
1940 Act) of Registrant nor parties to the proceeding, or (b) an
independent legal counsel in a written opinion. Also, Registrant
will make advances of attorneys' fees or other expenses incurred by
a director in his defense only if (in addition to his undertaking to
repay the advance if he is not ultimately entitled to
indemnification) (1) the indemnitee provides a security for his
undertaking, (2) Registrant shall be insured against losses arising
by reason of any lawful advances, or (3) a majority of a quorum of
the non- interested, non-party directors of Registrant, or an
independent legal counsel in a written opinion, shall determine,
based on a review of readily available facts, that there is reason
to believe that the indemnitee ultimately will be found entitled to
indemnification.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expense incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
In addition, Registrant maintains a directors' and officers' errors
and omissions liability insurance policy protecting directors and
officers against liability for breach of duty, negligent act, error
or omission committed in their capacity as directors or officers.
The policy contains certain exclusions, among which is exclusion
from coverage for active or deliberate dishonest or fraudulent acts
and exclusion for fines or penalties imposed by law or other matters
deemed uninsurable.
Item 28. Business and Other Connections of Investment Adviser
Lord, Abbett & Co. acts as investment advisor for twelve, other
open-end investment companies (of which it is principal underwriter
for thirteen) and as investment adviser to approximately 6,220
private accounts. Other than acting as directors and/or officers of
open-end investment companies managed by Lord, Abbett & Co., none of
Lord, Abbett & Co.'s partners has, in the past two fiscal years,
engaged in any other business, profession, vocation or employment of
a substantial nature for his own account or in the capacity of
director, officer, employee, partner or trustee of any entity except
as follows:
John J. Walsh
5
<PAGE>
Trustee
The Brooklyn Hospital Center
100 Parkside Avenue
Brooklyn, N.Y.
Item 29. Principal Underwriter
(a) Lord Abbett Affiliated Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Mid-Cap Value Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett U.S. Government Securities Money Market Fund, Inc.
Lord Abbett Series Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Tax-Free Income Trust
Lord Abbett Securities Trust
Lord Abbett Investment Trust
Lord Abbett Research Fund, Inc.
Investment Adviser
American Skandia Trust (Lord Abbett Growth and Income
Portfolio)
(b) The partners of Lord, Abbett & Co. are:
Name and Principal Positions and Offices
Business Address(1) with Registrant
------------------- ---------------
Robert S. Dow Chairman and President
Zane E. Brown Executive Vice President
E. Wayne Nordberg Executive Vice President
Paul A. Hilstad Vice President & Secretary
Daniel E. Carper Vice President
Robert G. Morris Vice President
John J. Walsh Vice President
The other partners, as follows, are neither officers nor
directors of the Fund: Stephen I. Allen, Daria L. Foster,
W. Thomas Hudson, Michael B. McLaughlin, and Robert J. Noelke.
(1) Each of the above has a principal business address
767 Fifth Avenue, New York, NY 10153
(c) Not applicable
6
<PAGE>
Item 30. Location of Accounts and Records
Registrant maintains the records required by Rules 31a - 1(a) and
(b) and 31a - 2(a) at its main office.
Lord, Abbett & Co. maintains the records required by Rules 31a -
1(f) and 31a - 2(e) at its main office.
Certain records such as canceled stock certificates and
correspondence may be physically maintained at the main office of
the Registrant's Transfer Agent, Custodian, or Shareholder Servicing
Agent within the requirements of Rule 31a-3.
Item 31. Management Services
None
Item 32. Undertakings
The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
The registrant undertakes, if requested to do so by the holders of
at least 10% of the registrant's outstanding shares, to call a
meeting of shareholders for the purpose of voting upon the question
of removal of a director or directors and to assist in
communications with other shareholders as required by Section 16(c).
7
<PAGE>
This Prospectus sets forth concisely the information about Lord Abbett Global
Fund, Inc. (the "Fund") that you should know before investing. Please read this
Prospectus before investing and retain it for future reference.
The Fund consists of two series, the Equity Series and the Income Series
("we" or the "Series"), each having three classes of shares. Each Series offers
three classes designated Class A, B and C shares which provide investors with
different purchase options. See "Purchases" for a description of these choices.
The Equity Series seeks long-term growth of capital and income consistent
with reasonable risk. The production of current income is a secondary
consideration.
The Income Series seeks high current income consistent with reasonable
risk. Capital appreciation is a secondary consideration. There can be no
assurance that each Series will achieve its objective.
The Statement of Additional Information dated May 1, 1998 has been filed
with the Securities and Exchange Commission and is incorporated by reference
into this Prospectus. You may obtain it, without charge, by writing to the Fund
or by calling 800-874-3733. Ask for "Part B of the Prospectus -- the Statement
of Additional Information."
Shaded terms are defined in the Glossary of Terms.
These securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission nor has the Securities
and Exchange Commission or any state securities commission passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
LORD ABBETT
GLOBAL FUND, INC.
PROSPECTUS
May 1, 1998
Mutual Fund shares are not deposits or obligations of, or guaranteed or
endorsed by, any bank. Shares are not insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency. An investment in
the Fund involves risks, including the possible loss of principal.
TABLE OF CONTENTS PAGE
Equity Series
How We Invest 2
Risk Factors 2
Portfolio Management 2
Investor Expenses 2
Financial Highlights 3
Income Series
How We Invest 4
Risk Factors 4
Portfolio Management 4
Investor Expenses 4
Financial Highlights 5
Purchases 6
Opening Your Account 8
Shareholder Services 8
Redemptions 9
Dividends and Capital Gains 10
Our Management 10
Fund Performance 11
Investment Policies, Risks and Limits 11
Sales Compensation 16
Glossary of Terms 16
LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
The General Motors Building
767 Fifth Avenue * New York * New York * 10153
(800) 426-1130
<PAGE>
EQUITY SERIES
- --------------------------------------------------------------------------------
HOW WE INVEST
Normally, we invest in the common stocks(including securities convertible
into common stocks) of domestic and foreign companies in sound financial
condition that are expected to show above-average price appreciation.
Under normal circumstances, the Equity Series will invest its total assets
in domestic and foreign securities with at least 65% of such assets invested in
equity securities primarily traded in at least three countries, including the
United States. However, this guideline may not be followed for temporary
defensive periods when Fund management believes that it should invest entirely
in domestic securities or in securities primarily traded in fewer than three
foreign countries or in debt securities to a greater extent than 35% of the
total assets of the Equity Series.
See "Investment Policies, Risks and Limits."
- --------------------------------------------------------------------------------
RISK FACTORS
Investment in the Fund requires consideration of certain factors that are not
normally involved in investments in U.S. securities. Generally, most of the
assets of the Series will be denominated or traded in foreign currencies. Before
you invest, please read "Investment Policies, Risks and Limits."
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT
Christopher Taylor, Deputy Managing Director of Fuji Investment Management
Co. (Europe), LTD ("Fuji") serves as portfolio manager of the Equity Series. Mr.
Taylor has been with Fuji and its predecessor since 1987 and has over 15 years
of investment experience.
- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The expenses shown below are based on historical expenses adjusted to reflect
current fees. Future expenses may be different than those shown.
- --------------------------------------------------------------------------------
EQUITY SERIES Class A Class B Class C
- --------------------------------------------------------------------------------
Shareholder Transaction Expenses
- --------------------------------------------------------------------------------
Maximum Sales Charge on Purchases
(as a % of offering price) 5.75% None None
Deferred Sales Charge (See "Purchases") None 5.00% 1.00%
- --------------------------------------------------------------------------------
Annual Fund Operating Expenses (as a % of average net assets)
- --------------------------------------------------------------------------------
Management Fees 0.75% 0.75% 0.75%
(See "Our Management")
12b-1 Fees(1) 0.28% 1.00% 1.00%
Other Expenses 0.48% 0.48% 0.48%
(See "Our Management")
Total Operating Expenses 1.51% 2.23% 2.23%
- --------------------------------------------------------------------------------
Example
Assume an average annual return of 5% and no change in the level of expenses.
For a $1,000 investment with all dividends and distributions reinvested, you
would have paid the following total expenses, assuming you sold your shares at
the end of each time period indicated.
- --------------------------------------------------------------------------------
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
Class A shares $ 72 $102 $135 $227
Class B shares(2) $ 72 $100 $140 $238
Class C shares $ 32 $ 70 $120 $257
You would pay the following expenses on the same investment, assuming you kept
your shares:
Class A shares $ 72 $102 $135 $227
Class B shares(2) $ 22 $ 70 $120 $238
Class C shares $ 22 $ 70 $120 $257
This example is for comparison and is not a representation of the Series' actual
expenses and returns, either past or present.
(1) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
(2) Class B shares will automatically convert to Class A shares on the eighth
anniversary of your original purchase of Class B shares.
2
<PAGE>
FINANCIAL HIGHLIGHTS The following table has been audited by Deloitte & Touche
LLP, independent accountants,in connection with their annual audit of the Equity
Series' Financial Statements, whose report may be obtained on request. Call
800-874-3733 and ask for the Equity Series' 1997 annual report.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
EQUITY SERIES
Per Class A Share+ Operating Year Ended December 31,
Performance: 1997 1996 1995 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.55 $ 11.96 $ 11.55 $ 12.44 $ 10.48 $ 10.79 $ 9.57
Income from investment operations
Net investment income (loss) .07(b) .07 .16 .10 .04 .078 .134
Net realized and unrealized
gain (loss) on investments .90 .93 .90 (.1125) 2.635 (.268) 1.276
Total from investment operations .97 1.00 1.06 (.0125) 2.675 (.190) 1.410
Distributions
Dividends from net investment income (.06) (.07) (.17) (.10) (.10) (.12) (.12)
Distributions from net realized gain (1.11) (.21) (.48) (.7775) (.615) -- (.07)
Distributions from foreign currency
transactions (.27) (.13) -- -- -- -- --
Net asset value, end of period $ 12.08 $ 12.55 $ 11.96 $ 11.55 $ 12.44 $ 10.48 $ 10.79
Total Return(a) 7.99% 8.37% 9.19% (0.09)% 26.05% (1.73)% 14.76%
Ratios to Average Net Assets:
Expenses, including waiver(e) 1.51% 1.52% 1.63% 1.56% 1.68% 1.84% 1.61%
Expenses, excluding waiver 1.51% 1.52% 1.63% 1.56% 1.68% 1.84% 1.61%
Net investments income .57% .54% 1.31% .79% .70% .76% 1.30%
<CAPTION>
- --------------------------------------------------------------------------------
September 30, 1988
(Commencement
Year Ended December 31, of Operations) to
1990 1989 December 31, 1988
- --------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.09 $ 9.62 $ 9.28
Income from investment operations
Net investment income (loss) .211 .170 .073
Net realized and unrealized
gain (loss) on investments (1.551) 1.53 .327
Total from investment operations (1.340) 1.70 .400
Distributions
Dividends from net investment income (.18) (.12) (.06)
Distributions from net realized gain -- (.11) --
Distributions from foreign currency
transactions -- -- --
Net asset value, end of period $ 9.57 $ 11.09 $ 9.62
Total Return(a) (12.13)% 17.73% 4.37%(d)
Ratios to Average Net Assets:
Expenses, including waiver(e) 1.45% 1.26% .24%(d)
Expenses, excluding waiver 1.72% 2.16% 1.06%(d)
Net investments income 2.03% 1.52% .93%(d)
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
EQUITY SERIES Class B Shares Class C Shares
Per Class Share Operating Year Ended August 1, 1996(c) to Year Ended August 1, 1996(c) to
Performance: December 31, 1997 December 31, 1996 December 31, 1997 December 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $12.53 $12.30 $12.54 $12.31
Income from investment operations
Net investment income (loss) (.02)(b) (.01) (.01)(b) .00
Net realized and unrealized
gain (loss) on investments .89 .58 .90 .57
Total from investment operations .87 .57 .89 .57
Distributions
Dividends from net investment income -- -- (.01) --
Dividends from net realized gain (1.11) (.21) (1.11) (.21)
Distributions from foreign currency transactions (.26) (.13) (.26) (.13)
Net asset value, end of period $12.03 $12.53 $12.05 $12.54
Total Return(a) 7.19% 4.56%(d) 7.34% 4.64%(d)
Ratios to Average Net Assets:
Expenses(e) 2.23% .83%(d) 2.14% .83%(d)
Net investment loss (.16)% (.16)%(d) (.06)% (.11)%(d)
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
EQUITY SERIES
Supplemental Data Year Ended December 31,
For All Classes: 1997 1996 1995 1994 1993 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets, end of period (000) $ 80,820 $ 92,164 $ 84,731 $ 83,739 $ 71,632 $ 34,332 $ 36,654 $ 32,986
Portfolio turnover rate 99.05% 81.97% 83.32% 75.39% 197.59% 136.75% 74.83% 76.24%
Average commissions per share
paid on equity transactions $ .028 $ .025 $ .033 n/a n/a n/a n/a n/a
<CAPTION>
- --------------------------------------------------------------------------------
September 30, 1988
(Commencement
of Operations) to
1989 December 31, 1988
- --------------------------------------------------------------------------------
Net assets, end of period (000) $ 27,692 $ 7,623
Portfolio turnover rate 50.12% 3.86%
Average commissions per share
paid on equity transactions n/a n/a
</TABLE>
(a) Total return does not consider the effects of front-end or contingent
deferred sales charge. (b) Calculated using average shares outstanding during
the period. (c) Commencement of operations of Class shares. (d) Not annualized.
(e) The ratios for 1997 include expenses paid through an expense offset
arrangement. (f) The Fund had only one class of shares prior to July 12, 1996.
That class of shares is now designated Class A shares. See Notes to Financial
Statements.
3
<PAGE>
INCOME SERIES
- --------------------------------------------------------------------------------
HOW WE INVEST
Normally, we invest in high-quality debt securities, consisting of those
rated at the time of purchase within one of the two highest grades assigned by
Standard & Poor's Ratings Services or Moody's Investor Services, Inc. Under
normal circumstances, the Income Series will invest its total assets in domestic
and foreign securities with at least 65% of such assets invested in long-term
debt securities primarily traded in at least three countries, including the
United States.
However, this guideline may not be followed for temporary defensive
periods when Fund management believes that it should invest entirely in domestic
securities or in securities primarily traded in fewer than three foreign
countries or in equity or short-term debt securities to a greater extent than
35% of the total assets of the Income Series. The market prices of long-term
debt securities tend to be more volatile than those of short-term debt
securities when interest rates change.
See "Investment Policies, Risks and Limits."
- --------------------------------------------------------------------------------
RISK FACTORS
Investment in the Fund requires consideration of certain factors that are not
normally involved in investments in U.S. securities. Generally, most of the
assets of the Series will be denominated or traded in foreign currencies. Before
you invest, please read "Investment Policies, Risks and Limits."
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT
Zane E. Brown, Executive Vice President of the Fund and Lord Abbett
partner and Director of Fixed Income, serves as portfolio manager of the Income
Series. He is assisted by Timothy W. Horan and Jerald M. Lanzotti. Prior to
joining Lord Abbett in 1992, Mr. Brown was Executive Vice President of Equitable
Capital Management Corporation. He has over 20 years of investment experience.
- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The expenses shown below are based on historical expenses adjusted to
reflect current fees. Future expenses may be different than those shown.
- --------------------------------------------------------------------------------
INCOME SERIES Class A Class B Class C
- --------------------------------------------------------------------------------
Shareholder Transaction Expenses
- --------------------------------------------------------------------------------
Maximum Sales Charge on Purchases
(as a % of offering price) 4.75% None None
Deferred Sales Charge (See "Purchases") None 5.00% 1.00%
- --------------------------------------------------------------------------------
Annual Fund Operating Expenses (as a % of average net assets)
- --------------------------------------------------------------------------------
Management Fees 0.50% 0.50% 0.50%
(See "Our Management")
12b-1 Fees(1) 0.30% 1.00% 1.00%
Other Expenses 0.30% 0.30% 0.30%
(See "Our Management")
Total Operating Expenses 1.10% 1.80% 1.80%
- --------------------------------------------------------------------------------
Example
Assume an average annual return of 5% and no change in the level of expenses.
For a $1,000 investment with all dividends and distributions reinvested, you
would have paid the following total expenses assuming you sold your shares at
the end of each time period indicated.
- --------------------------------------------------------------------------------
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
Class A shares $ 58 $ 81 $105 $175
Class B shares(2) $ 68 $ 87 $118 $193
Class C shares $ 28 $ 57 $ 98 $212
You would pay the following expenses on the same investment, assuming you kept
your shares:
Class A shares $ 58 $ 81 $105 $175
Class B shares(2) $ 18 $ 57 $ 98 $193
Class C shares $ 18 $ 57 $ 98 $212
This example is for comparison and is not a representation of the Series' actual
expenses and returns, either past or present.
(1) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
(2) Class B shares will automatically convert to Class A shares on the eighth
anniversary of your original purchase of Class B shares.
4
<PAGE>
FINANCIAL HIGHLIGHTS The following table has been audited by Deloitte & Touche
LLP, independent accountants,in connection with their annual audit of the Income
Series' Financial Statements, whose report may be obtained on request. Call
800-874-3733 and ask for the Income Series' 1997 annual report.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME SERIES
Per Class A Share+ Operating Year Ended December 31,
Performance: 1997 1996 1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.34 $ 8.58 $ 7.98 $ 9.02 $ 8.87 $ 9.40
Income from investment operations
Net investment income .51(b) .53 .77 .65 .76 .808
Net realized and unrealized
gain (loss) on investments (.18) (.04) .6138 (.9603) .174 (.288)
Total from investment operations .33 .49 1.3838 (.3103) .934 .520
Distributions
Dividends from net investment income (.51) (.61) (.6613) (.6035) (.784) (.840)
Distributions from net realized gain -- -- -- -- -- --
Distributions to shareholders from paid in capital (.07) -- -- (.1262) -- --
Distributions from foreign currency transactions -- (.12) (.1225) -- -- (.21)
Net asset value, end of period $ 8.09 $ 8.34 $ 8.58 $ 7.98 $ 9.02 $ 8.87
Total Return(a) 4.23% 6.12% 17.86% (3.40)% 10.78% 5.76%
Ratios to Average Net Assets:
Expenses, including waiver(e) 1.10% 1.04% 1.04% 1.02% 1.04% 1.22%
Expenses, excluding waiver 1.10% 1.04% 1.04% 1.02% 1.04% 1.22%
Net investment income 6.29% 6.52% 7.60% 7.72% 7.81% 8.50%
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
September 30, 1988
(Commencement
Year Ended December 31, of Operations) to
1991 1990 1989 December 31, 1988
- ------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.13 $ 9.28 $ 9.37 $ 9.53
Income from investment operations
Net investment income .877 .940 .998 .233
Net realized and unrealized
gain (loss) on investments .316 .059 (.07) (.1028)
Total from investment operations 1.193 .999 .928 .1302
Distributions
Dividends from net investment income (.873) (.959) (.998) (.2402)
Distributions from net realized gain (.05) -- (.02) --
Distributions to shareholders from paid in capital -- -- -- --
Distributions from foreign currency transactions -- (.19) -- (.05)
Net asset value, end of period $ 9.40 $ 9.13 $ 9.28 $ 9.37
Total Return(a) 14.33% 11.88% 10.58% 1.41%(d)
Ratios to Average Net Assets:
Expenses, including waiver(e) 1.30% 1.16% .90% .24%(d)
Expenses, excluding waiver 1.30% 1.33% 1.64% .74%(d)
Net investment income 9.96% 10.13% 10.41% 2.41%(d)
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME SERIES Class B Shares Class C Shares
Per Class Share Operating Year Ended August 1, 1996(c) to Year Ended July 15, 1996(c) to
Performance: December 31, 1997 December 31, 1996 December 31, 1997 December 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.34 $ 8.24 $ 8.34 $ 8.14
Income from investment operations
Net investment income .45 (b) .23 .45 (b) .21
Net realized and unrealized
gain (loss) on investments (.18) .22 (.18) .37
Total from investment operations .27 .45 .27 .58
Distributions
Dividends from net investment income (.46) (.23) (.46) (.26)
Distributions to shareholders from paid in capital (.06) -- (.06) --
Distributions from foreign currency transactions -- (.12) -- (.12)
Net asset value, end of period $ 8.09 $ 8.34 $ 8.09 $ 8.34
Total Return (a) 3.49% 5.58%(d) 3.48% 7.43%(d)
Ratios to Average Net Assets:
Expenses (e) 1.78% .73%(d) 1.77% .87%(d)
Net investment income 5.57% 2.11%(d) 5.62% 2.69%(d)
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME SERIES
Supplemental Data Year Ended December 31,
For All Classes: 1997 1996 1995 1994 1993 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets, end of period (000) $148,785 $202,494 $238,291 $249,490 $277,495 $148,137 $101,023 $68,587
Portfolio turnover rate 616.63% 621.79% 1,073.69% 1,230.20% 1,599.43% 812.01% 543.90% 613.01%
<CAPTION>
- --------------------------------------------------------------------------------
September 30, 1988
(Commencement
of Operations) to
1989 December 31, 1988
- --------------------------------------------------------------------------------
Net assets, end of period (000) $37,470 $ 8,048
Portfolio turnover rate 757.32% 22.62%
</TABLE>
(a) Total return does not consider the effects of front- end or contingent
deferred sales charges.
(b) Calculated using average shares outstanding during period.
(c) Commencement of operations of Class shares.
(d) Not annualized.
(e) The ratios for 1997 include expenses paid through an expense offset
arrangement.
(f) The Fund had only one class of shares prior to July 12, 1996. That class
of shares is now designated Class A shares. See Notes to Financial
Statements.
5
<PAGE>
- --------------------------------------------------------------------------------
PURCHASES
This Prospectus offers three classes of shares: Class A, B and C. These classes
of shares represent investments in the same portfolio of securities but are
subject to different expenses. Our shares are continuously offered based on the
per share net asset value ("NAV") next computed after we accept your purchase
order submitted in proper form, plus a front-end sales charge as described
below, in the case of the Class A shares and without a front-end sales charge,
in the case of the Class B and C shares as described below. Investors should
read this section carefully to determine which class of shares represents the
best investment option for their particular situation.
Class A
o Normally offered with a front-end sales charge.
o Lower annual expenses than Class B and Class C shares.
Class B
o No front-end sales charge.
o Higher annual expenses than Class A shares.
o A contingent deferred sales charge is applied to shares sold prior to the
sixth anniversary of purchase.
o Automatically convert to Class A shares after eight years.
Class C
o No front-end sales charge.
o Higher annual expenses than Class A shares.
o A contingent deferred sales charge is applied to shares sold prior to the
first anniversary of purchase.
It may not be suitable for you to place a purchase order for Class B shares of
$500,000 or more or a purchase order for Class C shares of $1,000,000 or more.
You should discuss pricing options with your investment professional.
For more information, see "Alternative Sales Arrangements" in the Statement of
Additional Information.
Class A Shares. Front-end sales charges are as follows:
Equity Series To Compute
As a % of As a % of Offering Price
Offering Your Divide
Your Investment Price Investment NAV by
Less than $50,000 5.75% 6.10% .9425
$50,000 to $99,999 4.75% 4.99% .9525
$100,000 to $249,999 3.75% 3.90% .9625
$250,000 to $499,999 2.75% 2.83% .9725
$500,000 to $999,999 2.00% 2.04% .9800
$1,000,000 over No Sales Charge 1.0000
Income Series To Compute
As a % of As a % of Offering Price
Offering Your Divide
Your Investment Price Investment NAV by
Less than $50,000 4.75% 4.99% .9525
$50,000 to $99,999 4.75% 4.99% .9525
$100,000 to $249,999 3.75% 3.90% .9625
$250,000 to $499,999 2.75% 2.83% .9725
$500,000 to $999,999 2.00% 2.04% .9800
$1,000,000 over No Sales Charge 1.0000
Reducing Your Class A Front-End Sales Charges. There are several ways you can
qualify for a lower sales charge when purchasing Class A shares if you inform
the Fund that you are eligible at the time of purchase.
o Rights of Accumulation -- a Purchaser can add the share value of any
Eligible Fund already owned to the amount of the next purchase of Class A
shares for purposes of calculating the sales charge.
o Statement of Intention -- a Purchaser can purchase Class A shares of any
Eligible Fund over a 13-month period and receive the same sales charge as
if all shares had been purchased at once. Shares purchased through
reinvestment of distributions are not included.
For more information on eligibility for these privileges, read the applicable
sections in the attached application.
6
<PAGE>
Class A Share Purchases Without a Front-End Sales Charge. Class A shares may be
purchased without a front-end sales charge under the following circumstances.
1 Purchases of $1 million or more.P
2 Purchases by Retirement Plans with at least 100 eligible employees.P
3 Purchases under a Special Retirement Wrap Program.P
4 Purchases made with dividends and distributions on Class A shares of
another Eligible Fund.
5 Purchases representing repayment under the loan feature of the Lord
Abbett-sponsored prototype 403(b) plan for Class A shares.
6 Employees of any consenting securities dealer having a sales agreement
with Lord Abbett Distributor.
7 Purchases under a Mutual Fund Wrap-Fee Program.
8 Lord Abbett Consultants/Advisers.
9 Employees of our shareholder servicing agent.
10 Employees of any national securities trade organization to which Lord
Abbett belongs.
11 Employees of Lord Abbett and our Directors/Trustees (active or retired),
their spouses, including surviving spouses, and other family members.
12 Trustees or custodians of any pension or profit sharing plan, or payroll
deduction IRA for the persons mentioned in 6, 9, 10 and 11 above.
P May be subject to a CDSC.
Contingent Deferred Sales Charges ("CDSC"). The CDSC, regardless of class, is
not charged on shares acquired through reinvestment of dividends or capital
gains distributions and is charged on the original purchase cost or the current
market value of the shares being sold, whichever is lower. In addition,
repayment of loans under Retirement Plans and 403(b) plans will constitute new
sales for purposes of assessing the CDSC.
Class A Share CDSC. If you buy Class A shares under one of the starred (P)
categories listed above subject to a dealer's concession of up to 1% and you
redeem any of the Class A shares within 24 months after the month in which you
initially purchased such shares, the Fund normally will collect a CDSC of 1%.
The Class A share CDSC generally will be waived under the following
circumstances.
o Benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
distribution under Retirement Plans (documentation may be required).
Contingent Deferred
Anniversary(1) Sales Charge on
of the Day on Redemptions
Which the Purchase (As % of Amount
Order Was Accepted Subject to Charge)
- --------------------------------------------------------------------------------
On Before
- --------------------------------------------------------------------------------
1st 5.0%
- --------------------------------------------------------------------------------
1st 2nd 4.0%
- --------------------------------------------------------------------------------
2nd 3rd 3.0%
- --------------------------------------------------------------------------------
3rd 4th 3.0%
- --------------------------------------------------------------------------------
4th 5th 2.0%
- --------------------------------------------------------------------------------
5th 6th 1.0%
- --------------------------------------------------------------------------------
on or after the None
6th anniversary(2)
(1) Anniversary is the 365th day subsequent to a purchase or a prior
anniversary.
(2) Class B shares will automatically convert to Class A shares on the eighth
anniversary of the purchase of Class B shares.
o Redemptions continuing as investments in another fund participating in a
Special Retirement Wrap Program.
Class B Share CDSC. The CDSC for Class B shares normally applies if you redeem
your shares before the sixth anniversary of their initial purchase. The CDSC
varies depending on how long you own your shares according to the following
schedule.
The Class B share CDSC generally will be waived under the following
circumstances.
o Benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
distribution under Retirement Plans.
o Eligible Mandatory Distributions under 403(b) plans and individual
retirement accounts.
o Death of the shareholder (natural person).
o On redemptions of shares in connection with Div-Move and Systematic
Withdrawal Plans (up to 12% per year).
See "Systematic Withdrawal Plan" for more information on CDSCs with respect to
Class B shares.
7
<PAGE>
Class C Share CDSC. The 1% CDSC for Class C shares normally applies if you
redeem your shares before the first anniversary of your original purchase.
Application of CDSC to a Redemption. To determine if a CDSC applies to a
redemption, the Fund redeems shares in the following order.
1 Shares acquired by reinvestment of dividends and capital gains.
2 Shares held for six years or more (Class B) or one year or more (Class C).
3 Shares held the longest before the sixth anniversary of their purchase
(Class B) or before the first anniversary of their purchase (Class C).
- --------------------------------------------------------------------------------
OPENING YOUR ACCOUNT
Minimum Initial Investment Per Series
- --------------------------------------------------------------------------------
o Regular account $1,000
- --------------------------------------------------------------------------------
o Individual Retirement Accounts
(Traditional, Education and Roth) and 403(b) $250
- --------------------------------------------------------------------------------
o Invest-A-Matic and Div-Move $250 initial
$50 subsequent minimum
For Retirement Plans and Mutual Fund Wrap Programs, there is no minimum
investment required, regardless of share class.
You may purchase shares through any independent securities dealer who has a
sales agreement with Lord Abbett Distributor or you can fill out the attached
application and send it to the Fund at the address stated below. You should read
this Prospectus carefully before placing your order to assure your order is in
proper form.
Lord Abbett Global Fund, Inc.
P.O. Box 419100
Kansas City, MO 64141
Proper Form. To be in proper form an order submitted directly to the Fund must
contain (1) a completed Application Form or information and documentation
required supplementally by the Fund, and (2) payment by check.
dollars to our custodian bank's account. For more information regarding proper
form of a purchase order, call the Fund at 800-821-5129.
Payment must be credited in U.S.dollars to our custodian bank's account.
IMPORTANT INFORMATION. If you fail to provide a correct taxpayer identification
number or to make certain required certifications, you may be subject to a $50
penalty under the Internal Revenue Code and we may be required to withhold a
portion (31%) of any redemption proceeds and of any dividend or distribution on
your account.
By Exchange. Telephone the Fund at 1-800-821-5129 to request an exchange from
any eligible Lord Abbett-sponsored fund.
We reserve the right to withdraw all or any part of the offering made by
this Prospectus or to reject any purchase order. We also reserve the right to
8
<PAGE>
waive, increase or establish minimum investment requirements. All purchase
orders are subject to our acceptance and are not binding until confirmed or
accepted in writing.
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICES
Telephone Exchanges. You or your investment professional, with proper
identification, can instruct the Fund by telephone to exchange shares of any
class for the same class of any Eligible Fund. Instructions must be received by
the Fund in Kansas City by calling 1-800-821-5129 prior to the close of the New
York Stock Exchange ("NYSE") to obtain an Eligible Fund's NAV per class share on
that day. Exchanges will be treated as a sale for federal tax purposes.
For your protection, telephone requests for exchanges are recorded. We
will take measures to verify the identity of the caller, such as asking for your
name, account number, social security or taxpayer identification number and
other relevant information. The Fund will not be liable for following
instructions communicated by telephone that it reasonably believes to be
genuine.
Expedited exchanges by telephone may be difficult to implement in times of
drastic economic or market change. The exchange privilege should not be used to
take advantage of short-term swings in the market. The Fund reserves the right
to limit or terminate this privilege for any shareholder making frequent
exchanges and may revoke the privilege for all shareholders upon 60 days' prior
written notice. You have this privilege unless you refuse it in writing.
You should read the prospectus of the other Lord Abbett-sponsored fund(s)
selected before making an exchange.
Invest-A-Matic. You can make fixed, periodic investments ($250 initial and $50
subsequent minimum) into the Fund by means of automatic money transfers from
your bank checking account. See the attached Application Form for instructions.
Div-Move. You can invest the dividends paid on your account ($50 minimum) into
another account, within the same class, in any Eligible Fund.
The account must be either your account, a joint spousal account, or a custodial
account for your minor child.
Investing By Phone. Upon completion and receipt of the attached application form
(in particular, section 7), you can instruct the Fund by phone to have money
transferred from your bank account to purchase shares of the Fund for an
existing account. The Fund will purchase the requested shares upon receipt of
the money from your bank.
Systematic Withdrawal Plan ("SWP"). You can make periodic cash withdrawals from
your account which are automatically paid to you in fixed or variable amounts.
To participate, the value of your shares must be at least $10,000, except for
retirement plans for which there is no minimum.
With respect to Class B shares, the CDSC will be waived on redemptions of
up to 12% of the current net asset value of your account at the time of your
SWPrequest. For Class B share redemptions over 12% per year, the CDSC will apply
to the entire redemption. Please contact the Fund for assistance in minimizing
the CDSC in this situation.
Redemption proceeds due to a SWP for Class B (up to 12% per year) and
Class C shares, will be redeemed in the order described under "Redemptions."
Lord Abbett's Retirement Plans. The Lord Abbett Family of Funds offers a range
of qualified retirement plans, including IRAs (Traditional,Education), and Roth)
SIMPLE IRAs, Simplified Employee Pension Plans, 403(b) and pension and
profit-sharing plans, including 401(k) plans. To find out more about these
plans, call the Fund at 1-800-842-0828.
Account Changes. For any changes you need to make to your account, consult your
investment professional or call the Fund at 1-800-821-5129.
Householding. Generally, shareholders with the same last name and address will
receive a single copy of an annual or semi-annual report, unless additional
reports are specifically requested in writing to the Fund.
Reinvestment Privilege. If you sell shares of the Fund, you have the one time
right to reinvest some or all of the proceeds in the same class of any Eligible
Fund within 60 days without a sales charge. If you paid a CDSC when you sold
your shares, you will be credited with the amount of the CDSC. All accounts
involved must have the same registration.
Pricing Shares. The net asset value ("NAV") per share for each class of shares
is calculated each business day at the close of regular trading on the New York
Stock Exchange ("NYSE") by dividing a class's net assets by the number of shares
outstanding. The Fund is open on those business
9
<PAGE>
days when the NYSE is open. Purchases and redemptions are executed at the next
NAV to be calculated after your request is accepted.
- --------------------------------------------------------------------------------
REDEMPTIONS
By Broker. Call your broker or investment professional for directions on how to
redeem your shares.
By Telephone. To obtain the proceeds of an expedited redemption of $50,000 or
less, you or your representative can call the Fund at 1-800-821-5129. The Fund
will employ the procedures described in telephone exchanges to confirm that the
instructions received are genuine.
The Fund will not be liable for following instructions communicated by telephone
that it reasonably believes to be genuine.
By Mail. Submit a written redemption request indicating your Fund's name, your
share class, your account number, the name(s) in which the account is registered
and the dollar value or number of shares you wish to sell.
Include all necessary signatures. If the signer has any Legal Capacity,
the signature and capacity must be guaranteed by an Eligible Guarantor. Certain
other legal documentation may be required. For more information regarding proper
documentation, call 1-800-821-5129.
We will verify that the shares being redeemed were purchased at least 15
days earlier. Your account balance must be sufficient to cover the amount being
redeemed or your redemption order will not be processed.
Normally, a check will be mailed to the name(s) and addresses in which the
account is registered, or otherwise according to your instruction within one
business day after receipt of your redemption request. The Fund reserves the
right to make payment within three business days.
To determine if a CDSC applies to a redemption, see "Contingent Deferred
Sales Charges" above.
- --------------------------------------------------------------------------------
DIVIDENDS AND CAPITAL GAINS
Dividends. The Fund distributes most or all of its net earnings in the form of
dividends which are expected to be paid to shareholders semi-annually for the
Equity Series and monthly for the Income Series.
Capital Gains Distributions. Any capital gains are paid at least annually and
may be taken in cash or reinvested. A second distribution may be made in order
to comply with Federal income tax requirements that a certain percentage of
capital gains be distributed during the year. Distributions by the Fund of any
net long-term capital gains will be taxable to a shareholder as long-term
capital gains regardless of how long the shareholder has held the shares. Under
recently enacted legislation, the maximum tax rate on long-term capital gains
for a U.S. individual, estate or trust is reduced to 20% for distributions
derived from the sale of assets held by the Fund for more than 18 months. (If
the taxpayer is in the 15% tax bracket, the rate is 10%.) For distributions
derived from the sale of assets held by the Fund between 12 and 18 months, the
tax rate remains at 28% (15% if the taxpayer is in the 15% tax bracket).
Dividends/Capital Gains Receipt or Reinvestment. If you elect to receive
dividends or capital gains in cash, a check will be mailed to you as soon as
possible after the reinvestment date. If you arrange for direct deposit, your
payment will be electronically transmitted to your bank account within one day
after the payable date. Most investors reinvest their dividends and capital
gains. If you choose this option, or if you do not indicate any choice, your
dividends and capital gains distributions will be automatically reinvested in
additional shares.
Taxes. The Fund pays no federal income tax on the earnings it distributes to
shareholders. Consequently, dividends you receive from the Fund, whether
reinvested or taken in cash, are generally considered taxable. Dividends
declared in October, November or December of any year will be treated for
federal income tax purposes as having been received by shareholders in that year
if they are paid before February 1 of the following year.
Each January the Fund will mail to you, if applicable, a Form 1099 tax
information statement detailing your dividends and capital gain distributions.
10
<PAGE>
You should consult your tax adviser concerning applicable state and local
taxes.
For more information about the tax consequences from dividends and
distributions, see the Statement of Additional Information.
- --------------------------------------------------------------------------------
OUR MANAGEMENT
The Fund is managed by its officers on a day-to-day basis under the overall
direction of the Board of Directors. The Fund employs Lord, Abbett & Co.,
hereinafter "Lord Abbett," as investment manager pursuant to a Management
Agreement. Lord Abbett has been an investment manager for over 69 years and
currently manages about $27 billion in a family of mutual funds and other
advisory accounts. Lord Abbett provides similar services to twelve other funds
having various investment objectives and also advises other investment clients.
For more information about the services Lord Abbett provides to the Fund, see
the Statement of Additional Information.
Subject to approval by the Equity Series shareholders, the Board of
Directors has approved an agreement (the "New Agreement") with Fuji Investment
Management Co. (Europe), Ltd. (the "Sub-Advisor") under which the Sub-Advisor
will provide Lord Abbett with advice with respect to that portion of the Equity
Series' assets invested in countries other than the United States (the "foreign
assets").The New Agreement contains the same terms and provides for payment from
Lord Abbett's resources of a sub-advisory fee on the same basis (one-half of the
fee paid to Lord Abbett) with respect to the Equity Series as provided for in
the former agreement with Dunedin Fund Managers Limited which has ceased acting
as sub-advisor. Pursuant to the Investment Company Act of 1940
(the 1940 Act) and its rules, the New Agreement is
effective for the 120-day period starting on June 15, 1998 and if approved by
the shareholders of the Equity Series, will become effective for two years from
the date of such approval and thereafter from year to year, so long as continued
according to the 1940 Act.
The Sub-Advisor is controlled by Fuji Investment Management Co. (Tokyo).
Fuji Bank Limited of Tokyo, Japan ("Fuji Bank") directly owns 40% of the
outstanding voting stock of the Sub-Advisor. Fuji Investment Management Co.
(Tokyo) is an affiliate of Fuji Bank. Lord Abbett indirectly owns a minor
percentage of such outstanding stock. As of June 1, 1997, the Sub-Advisor
managed approximately $577 million, which is invested globally. The Sub-Advisor
furnishes Lord Abbett with advice and recommendations with respect to the Equity
Series' assets, including advice about the allocation of investments among
foreign securities markets and foreign equity and debt securities and, subject
to consultation with Lord Abbett, advice as to cash holdings and what securities
in the portfolio should be purchased, held or disposed of. Additionally, the
Sub-Advisor gives advice with respect to foreign currency matters.
The Fund pays Lord Abbett a monthly fee based on average daily net assets
for each month. For the fiscal year ended December 31, 1997, the fee paid to
Lord Abbett was at an annual rate of .75 of 1% for the Equity Series and .50 of
1% for the Income Series and half of Lord Abbett's fee with respect to the
Equity Series was paid to Dunedin. In addition, the Fund pays all expenses not
expressly assumed by Lord Abbett.
The Fund. The Fund is a diversified open-end management investment company
established in 1988. Its Class A, B and C shares have equal rights as to voting,
dividends, assets and liquidation except for differences resulting from certain
class-specific expenses.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
About the Equity Series. U.S. holdings were increased to just under 45% of the
portfolio to take advantage of anticipated strong performance in the U.S.
market. We reduced holdings in the Pacific Rim, cutting exposure to Japan by
half, and, as a result, the portfolio was not greatly affected by the crisis in
the Asian markets. Your Series benefited from a slight overweighting in
Continental European holdings, which performed well as a result of specific
stock selection. A hedge against Japanese currency produced high returns when
the yen weakened against the dollar. Stocks in the financial sector yielded
strong returns, as did consumer noncyclicals (companies whose performance is not
tied to economic growth), and we expect to continue to emphasize these sectors.
About the Income Series. We benefited from exposure to high-quality government
issues, particularly in the U.S., Germany and the United Kingdom. The U.S.
dollar remained a strong reserve of value, particularly against the yen and the
German mark. While your Series held U.S. assets averag-
11
<PAGE>
ing about 45% of the portfolio over the year, exposure to Pacific Rim countries
such as Japan, Australia and New Zealand was reduced or eliminated, reflecting
the immediate impact of the Asian crisis. Core European holdings were increased,
as was exposure to the U.S. market. We anticipate that the U.S. dollar will
remain strong in 1998, and we will maintain a commitment to U.S. and other
high-grade global assets.
See the performance chart on the second to last page of this Prospectus.
- --------------------------------------------------------------------------------
INVESTMENT POLICIES, RISKS AND LIMITS
EQUITY SERIES
The Equity Series will try to anticipate major changes in the world
economy and select domestic and foreign securities which will benefit most from
these changes. The Equity Series normally invests primarily in common stocks
(including securities convertible into common stocks) of domestic and foreign
companies in sound financial condition that are expected to show above-average
price appreciation. Although the prices of common stocks fluctuate and their
dividends vary, historically, common stocks have appreciated in value and their
dividends have increased when the companies they represented have prospered and
grown. Success in achieving the investment objective of the Equity Series is
dependent upon Series management's ability to anticipate market changes, as well
as its ability to properly value particular companies. Thus, there is no
assurance that the portfolio investments made by Series management on behalf of
the Equity Series will attain the results sought.
In selecting securities for investment, the Equity Series constantly
balances the opportunity for profit against the risk of loss. In the past, very
few industries or economies have continuously provided the best investment
opportunities. The Equity Series' policy is to take a flexible approach and to
adjust the portfolio to reflect changes in the opportunity for sound investments
relative to risk assumed. Therefore, domestic and foreign securities judged to
be overvalued will be sold and the proceeds will be reinvested in other
securities believed to be better values.
The Equity Series may also invest in debt securities. While it has no
specific rating requirements with respect to the debt securities in which it
invests, the Equity Series will occasionally be guided by the prospect of a more
attractive risk-adjusted total return from an issuer's debt securities versus
its equity securities.
While under normal circumstances the Equity Series will invest its total
assets in domestic and foreign securities with at least 65% of such assets
invested in equity securities primarily traded in three countries, including the
United States, this may not be followed for temporary defensive periods when
Series management believes it should invest entirely in domestic securities or
in securities primarily traded in fewer than three foreign countries or in debt
securities to a greater extent than 35% of the total assets of the Equity
Series.
INCOME SERIES
The Income Series will invest in countries and in currency denominations
where the combination of fixed-income market returns, price appreciation of
fixed-income obligations, equity securities and currency exchange-rate movements
appear to present opportunities for an attractive total return consistent with
the Income Series' investment objective.
The Income Series will be invested primarily in a portfolio or (i)
high-quality debt securities issued or guaranteed by U.S. and foreign
governments or their agencies, instrumentalities or political subdivisions; (ii)
high-quality debt securities issued or guaranteed by supranatural organizations,
such as the World Bank; (iii) high-quality U.S. and foreign corporate debt
securities including commercial paper; and (iv) debt obligations of banks and
bank holding companies. The high-quality debt securities described above will
consist of those rated at the time of purchase within one of the two highest
grades assigned by Standard & Poor's Ratings Services ("S&P") or Moody's
Investors Service, Inc. ("Moody's") or, if unrated, judged by Fund management to
be of comparable quality. Up to 35% of the Income Series' total assets may be
invested in equity securities and in debt securities rated below S&P's and
Moody's two highest grades but rated at the time of purchase BBB or better by
S&P or Baa or better by Moody's or, if unrated, judged by Fund management to be
of comparable quality. Bonds rated Baa by Moody's or BBB by S&P are considered
medium-grade and have speculative characteristics and are more sensitive to
economic change than higher-rated bonds. A description of
12
<PAGE>
S&P's and Moody's ratings is included in the Appendix to the Statement of
Additional Information. Fundamental economic strength, credit quality, currency
exchange and interest-rate trends will be the principal determinants of the
various country, geographic and industry sector weightings within the Income
Series' portfolio.
The U.S. Government securities in which the Income Series may invest
include direct obligations of the United States Treasury (such as Treasury
bills, notes and bonds) and obligations issued by United States Government
agencies and instrumentalities, including securities that are supported by the
full faith and credit of the United States (such as Government National Mortgage
Association "GNMA" certificates), securities that are supported by the right of
the issuer to borrow from the United States Treasury (such as securities of the
Federal Home Loan Banks) and securities supported solely by the creditworthiness
of the issuer (such as Federal National Mortgage Association "FNMA" and Federal
Home Loan Mortgage Corporation "FHLMC" securities).
The other debt securities in which the Income Series may invest include,
but are not limited to, domestic and foreign, fixed and floating-rate notes,
bonds, debentures, convertible securities, certificates, warrants, commercial
paper, and principal and interest pass-throughs issued by governments,
authorities, partnerships, corporations, trust companies, banks and bank holding
companies, and banker's acceptances, certificates of deposit, time deposits and
deposit notes issued by domestic and foreign banks.
The Equity and Income Series are permitted to utilize, within limits
established by the Board of Directors, investment policies in an effort to
enhance each Series' performance. If no limit is disclosed for a particular
investment policy, this means that the Board of Directors did not establish a
limit for such investment policy. These policies have risks associated with
them. However, each Series follows certain practices that may reduce these
risks. To the extent the each Series utilizes some of these policies, its
overall performance may be positively or negatively affected. See "Policies
Common to Both Series."
When-Issued Or Delayed Delivery Transactions: Such transactions arise when
securities are purchased or sold by the Income Series with payment and delivery
taking place as much as a month or more in the future in order to secure what is
considered to be an advantageous price and yield to the Series at the time of
entering other liquid high-grade debt obligations having a value equal to or
greater than the Series' purchase commitments; the custodian will likewise
segregate securities sold on a delayed delivery basis.
Risk: The securities so purchased are subject to market fluctuation and no
interest accrues to the purchaser during the period between purchase and
settlement. At the time of delivery of the securities the value may be more or
less than the purchase price and an increase in the percentage of the Income
Series' assets committed to the purchase of securities on a when-issued or
delayed delivery basis may increase the volatility of the Series' net asset
value.
- --------------------------------------------------------------------------------
Policies Common To Both Series
Country Diversification and Defensive Position. It is the present intention of
each Series to invest its assets in securities which are primarily traded in the
United Kingdom, Western Europe (Austria, Germany, the Netherlands, France,
Switzerland, Italy, Belgium, Norway, Sweden, Denmark and Spain), Australia,
Canada, the Far East (Japan, HongKong, Korea, Singapore, Taiwan and Thailand),
Latin America (Argentina, Brazil, Mexico, Venezuela) and the United States.
However, investments may be made, from time to time, in securities which are
primarily traded in other developed countries. Except for the guidelines
described above with respect to investing in at least three countries, including
the United States, there are no limitations on how much of each Series' assets
can be invested in securities primarily traded in any one country.
When Fund management believes that one or both Series should assume a temporary
defensive position because of unfavorable investment conditions, the affected
Series may temporarily hold its assets in cash and short-term money market
instruments.
Diversification. Generally, the diversification rules under Subchapter M of the
Internal Revenue Code require that at the end of each quarter of the taxable
year, (a) not more than 25% of each Series' total assets be invested in any one
issuer and (b) with respect to 50% of each Series' total
13
<PAGE>
assets, no more than 5% of each Series' total assets be invested in any one
issuer, except U.S. Government securities. Each Series intends to meet these
rules.
Since under these rules the Income Series, but not the Equity Series, may invest
its assets in the securities of a limited number of issuers, the value of Income
Series' investments may be more affected by any single adverse economic,
political or regulatory occurrence than in the case of a "diversified"
investment company under the investment Company Act of 1940, such as the Equity
Series.
The Equity Series, as a "diversified" investment company, is prohibited, with
respect to 75% of the value of its total assets, from investing more than 5% of
its total assets in securities of any one issuer other than U.S. Government
securities.
With respect to the Income Series, the identification of an "issuer" will be
determined on the basis of the source of assets and revenues committed to
meeting interest and principal payments of the securities. When the assets and
revenues of a sovereign state's political subdivision are separate from those of
the sovereign state government creating the subdivision, and the security is
backed only by the assets and revenues of the subdivision, the subdivision would
be considered the sole issuer. Similarly, if a revenue bond is backed only by
the assets and revenues of a nongovernmental user, then such user would be
considered the sole issuer.
Covered Call Options: A covered call option on stock gives the buyer of the
option, upon payment of a premium to the seller (writer) of the option, the
right to call upon the writer to deliver a specified number of shares of a stock
owned by the writer on or before a fixed date at a predetermined price.
Risk: Although each Series receives income based on receipt of the premium, it
gives up participation in the appreciation of the stock above the predetermined
price if it is called away by the buyer.
Limit: Each Series may write covered call options on securities having an
aggregate market value not to exceed 5% of each Series' gross assets.
Limitations imposed by the Internal Revenue Service on regulated investment
companies may restrict each Series' ability to engage in transactions in
options.
14
<PAGE>
Forward Foreign Currency Contracts: Each Series may enter into forward foreign
currency contracts in primarily two circumstances. First, when it desires to
"lock in" the U.S. dollar price of the security, by entering into a forward
contract for the purchase or sale of the amount of foreign currency involved in
the underlying security transaction, the Series will be able to protect against
a possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the subject foreign currency during the period between the date
of purchase or sale and the date of settlement.
Second, when Fund management believes that the currency of a particular foreign
country may suffer a decline against the U.S. dollar, the Series may enter into
a forward contract to sell the amount of foreign currency approximating the
value of some or all of the portfolio securities denominated in such foreign
currency or, in the alternative, may use a cross-currency-hedging technique
whereby it enters into such a forward contract to sell another currency
(obtained in exchange for the currency in which the portfolio securities are
denominated if such securities are sold) which it expects to decline in a
similar manner but that has a lower transaction cost.
Risk: Precise matching of the forward contract and the value of the securities
involved will generally not be possible.
Limit: Limitations imposed by the Internal Revenue Code on regulated investment
companies may restrict each Series' ability to engage in transactions in forward
contracts.
Foreign Currency Put and Call Options: Each Series may purchase foreign currency
put options and write foreign currency call options on U.S. exchanges or U.S.
over-the-counter markets ("OTC"). A put option gives the Series, upon payment of
a premium, the right to sell a currency at the exercise price until the
expiration of the option and serves to insure against adverse currency price
movements in the underlying portfolio assets denominated in that currency.
A foreign currency call option written by either Series gives the purchaser,
upon payment of a premium, the right to purchase from the Series a currency at
the exercise price until the expiration of the option. The Series may write a
call option on a foreign currency only in conjunction with a purchase of a put
option on that currency ("Cross Hedging"). Such a strategy is designed to reduce
the cost of downside currency protection by limiting currency appreciation
potential.
Risk: OTC options are generally less liquid and involve issuer credit risk. The
staff of the SEC has taken the position that purchased OTC options and the
assets used as "cover" for written OTC options are illiquid securities unless
the Series and the counterparty have provided for the Series, at the Series'
election, to unwind the OTC option. The exercise of such an option ordinarily
would involve the payment by the Series of an amount designed to reflect the
counterparty's economic loss from an early termination, but does allow the
Series to treat the assets used as "cover" as "liquid."
Limit: The premiums paid for such foreign currency put options will not exceed
5% of the net assets of the Series. Unlisted options, together with other
illiquid securities, may comprise no more than 15% of the Series' net assets.
The face value of such currency call option writing or cross-hedging may not
exceed 90% of the value of the securities denominated in such currency (a)
invested in by the Series to cover such call writing or (b) to be crossed.
Limitations imposed by the Internal Revenue Code on regulated investment
companies may restrict each Series' ability to engage in transactions in cross
hedges.
Segregation. The Fund's custodian will segregate cash or liquid high-grade debt
securities or other permitted securities belonging to a Series in an amount not
less than that required by SEC Release 10666 and SEC staff interpretations
thereof with respect to a Series' assets committed to (a) writing options, (b)
forward foreign currency contracts and (c) cross hedges entered into by a
Series. If the value of the securities segregated declines, additional cash or
permitted securities will be added on a daily basis (i.e., marked to market), so
that the segregated amount will not be less than the amount of a Series'
commitments with respect to such written options, forward foreign currency
contracts and cross hedges.
Repurchase Agreements: Each Series may, on occasion, enter into repurchase
agreements whereby the seller of a security agrees to repurchase that security
at a mutually agreed-upon time and price. The period of maturity is usually
quite
15
<PAGE>
short, possibly overnight or a few days, although it may extend over a number of
months. The resale price is in excess of the purchase price, reflecting an
agreed-upon rate of return effective for the period of time the Series' money is
invested in the security. The Series' repurchase agreements will at all times be
fully collateralized in an amount at least equal to the purchase price,
including accrued interest earned on the underlying securities. The instruments
held as collateral are valued daily, and if the value of the instruments
declines, the Series will require additional collateral.
Risk: If the seller defaults and the value of the collateral securing the
repurchase agreement declines, the Series may incur a loss.
Illiquid Securities: Securities not traded on the open market. May include
illiquid Rule 144A securities.
Risk: Certain securities may be difficult or impossible to sell at the time and
price the seller would like.
Limit: Each Series may invest up to 15% of its assets in illiquid securities.
Securities determined by the Board of Directors to be liquid are not subject to
this limitation.
Rule 144A Securities: Securities determined by the Directors to be liquid
pursuant to Securities and Exchange Commission Rule 144A (the "Rule"). Under the
Rule, a qualifying unregistered security may be resold to a qualified
institutional buyer without registration and without regard to whether the
seller originally purchased the security for investment.
Risk: Investments in Rule 144A securities initially determined to be liquid
could have the effect of diminishing the level of a Series' liquidity during
periods of decreased market interest in such securities.
Borrowing: Each Series may borrow money.
Risk: Depending on the circumstances, the interest paid on borrowed money may
reduce a Series' return.
Limit: Not in excess of 33 1/3% of total assets (including the amount borrowed),
and then only as a temporary measure for extraordinary or emergency purposes. Up
to an additional 5% of total assets are available for temporary purposes. Each
Series may obtain such short-term credit as may be necessary for the clearance
of purchases and sales of portfolio securities.
Rights and Warrants: Each Series may hold or sell any property or securities
which it may obtain through the exercise of conversion rights or warrants. The
term "warrants" includes warrants which are not listed on the New York or
American Stock Exchanges.
Limit: Each Series has no present intention to commit more than 5% of its gross
assets to rights and warrants. Warrants which are not listed on the New York or
American Stock Exchange or a major foreign exchange may not exceed 2% of the
Series' total assets.
Closed-End Investment Companies: Each Series may invest in closed-end investment
companies.
Risk: Shares of such investment companies sometimes trade at a discount or
premium in relation to their net asset value and there may be duplication of
fees, for example, to the extent that a Series and the closed-end investment
company both charge a management fee.
Limit: No more than 5% of the gross assets of a Series may be invested in
closed-end investment companies.
Securities Lending: The lending of securities to financial institutions which
provide continuous collateral equal to the market value of the securities
loaned.
Risk: Delay in recovery of collateral and loss should the borrower of the
security fail financially.
Limit: Loans, in the aggregate, may not exceed 5% of the Series' total assets.
Portfolio Turnover. The portfolio turnover rate for the fiscal year ended
December 31, 1997 was 99.05% versus 81.97% for the prior fiscal year for the
Equity Series and 616.63% versus 621.79% for the prior fiscal year for the
Income Series. The high portfolio turnover rate for the Income Series relates to
substantial trading of U.S. and U.S. agency mortgage-backed securities to take
advantage of value changes among different agencies, coupons and maturities.
Also, there was significant movement of investments from country to country to
take advantage of return differentials.
16
<PAGE>
Objective, Restriction and Policy Changes. A Series will not change its
investment objective or its fundamental restrictions without shareholder
approval. If a Series determines that its objective can best be achieved by a
substantive change in investment policy, which may be changed without
shareholder approval, the Series may make such change by disclosing it in the
prospectus.
For more information about investment policies, restrictions and risk factors,
see the Statement of Additional Information.
- --------------------------------------------------------------------------------
SALES COMPENSATION
As part of its plan for distributing shares, the Fund, along with Lord Abbett
Distributor, pays compensation to Authorized Institutions that sell the Fund's
shares. These firms typically pass along a portion of this compensation to your
financial representative.
Compensation payments originate from two sources: sales charges and 12b-1 fees
that are paid out of the Fund's assets ("12b-1" refers to the federal securities
regulation authorizing annual fees of this type). The 12b-1 fee rates vary by
share class, according to the Rule 12b-1 plan adopted by the Fund for each share
class. The sales charges and 12b-1 fees paid by investors are detailed in the
class-by-class information under "Investor Expenses" and "Purchases." The
portion of these expenses that are paid as compensation to Authorized
Institutions, such as your dealer, are shown in the chart on the last page of
this Prospectus. Sometimes compensation is not paid where tracking data is not
available for certain accounts and where the Authorized Institution waives part
of the compensation as with an account under a Mutual Fund Wrap-Fee Program.
Rule 12b-1 distribution fees may be used to pay for sales compensation to
Authorized Institutions, for any activity which is primarily intended to result
in the sale of shares and, for Class B shares, the financing of sales
commissions.
First Year Compensation. Whenever you make an investment in the Fund, the
Authorized Institution receives compensation as described in the chart on the
last page of this Prospectus.
Annual Compensation After First Year. Beginning with the second year after an
investment is made, the Authorized Institution receives annual compensation as
described in the chart on the last page of this Prospectus.
Additional Concessions may be paid to Authorized Institutions from time to time.
- --------------------------------------------------------------------------------
GLOSSARY OF TERMS
Additional Concessions. A supplemental annual distribution fee equal to 0.10% of
the average daily net asset value of the Class A shares is available to
Authorized Institutions which have a program for the promotion and retention of
such shares satisfying Lord Abbett Distributor. Class A shares held pursuant to
a satisfactory program would, for example, (i) constitute a significant
percentage of the Fund's net assets, (ii) be held for a substantial length of
time and/or (iii) have a lower than average redemption rate.
Lord Abbett Distributor may, for specified periods, allow dealers to
retain the full sales charge for sales of shares or may pay an additional
concession to a dealer who sells a minimum dollar amount of our shares and/or
shares of other Lord Abbett-sponsored funds. In some instances, such additional
concessions will be offered only to certain dealers expected to sell significant
amounts of shares. Lord Abbett Distributor may, from time to time, implement
promotions under which Lord Abbett Distributor will pay a fee to dealers with
respect to certain purchases not involving imposition of a sales charge.
Additional payments may be paid from Lord Abbett Distributor's own resources and
will be made in the form of cash or, if permitted, non-cash payments. The
non-cash payments will include business seminars at Lord Abbett's headquarters
or other locations, including meals and entertainment, or the receipt of
merchandise. The cash payments may include payment of various business expenses
of the dealer.
17
<PAGE>
In selecting dealers to execute portfolio transactions for the Fund's
portfolio, if two or more dealers are considered capable of obtaining best
execution, we may prefer the dealer who has sold our shares and/or shares of
other Lord Abbett-sponsored funds.
Authorized Institutions. Institutions and persons permitted by law to receive
service and/or distribution fees under a Rule 12b-1 plan are "authorized
institutions."
Eligible Fund. (a) Any Lord Abbett-sponsored fund except certain tax-free,
single-state series where the exchanging shareholder is a resident of a state in
which such series is not offered for sale; Lord Abbett Equity Fund; Lord Abbett
Series Fund; Lord Abbett Research Fund -- Mid-Cap Series; Lord Abbett U.S.
Government Securities Money Market Fund ("GSMMF") (except for holdings in GSMMF
which are attributable to any shares exchanged from the Lord Abbett Family of
Funds). (b) Any Authorized Institution's affiliated money market fund satisfying
Lord Abbett Distributor as to certain omnibus account and other criteria.
Eligible Guarantor. Any broker or bank that is a member of the medallion stamp
program. Most major securities firms and banks are members of this program. A
notary public is not an eligible guarantor.
Eligible Mandatory Distributions. If Class B shares represent a part of an
individual's total IRA or 403(b) investment, the CDSC waiver is available only
for that portion of a mandatory distribution which bears the same relation to
the entire mandatory distribution as the B share investment bears to the total
investment.
Employees of Lord Abbett/Fund Directors (Trustees). The terms "directors,"
"trustees" (of a Fund) and "employees" (of Lord Abbett) include a director's
(trustee's) or employee's spouse (including the surviving spouse of a deceased
director (trustee) or employee). The terms "directors," "trustees" and
"employees of Lord Abbett" also include other family members and retired
directors (trustees) and employees.
Legal Capacity. With respect to a redemption request, if (for example) the
request is on behalf of the estate of a deceased shareholder, John W. Doe, by a
person (Robert A. Doe) who has the legal capacity to act for the estate of the
deceased shareholder because he is the executor of the estate, then the request
must be executed as follows: Robert A.Doe, Executor of the Estate of John W.
Doe.
Similarly, if (for example) the redemption request is on behalf of the ABC
Corporation by a person (Mary B. Doe) that has the legal capacity to act on
behalf of this corporation, because she is the President of the corporation,
then the request must be executed as follows: ABC Corporation by Mary B.Doe,
President.
An acceptable form of guarantee would be as follows:
o In the case of the estate -
Robert A. Doe, Executor
of the Estate of John W. Doe
[Date] SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
/s/ [ILLEGIBLE]
-----------------------------
AUTHORIZED SIGNATURE
(960) X9803470
SECURITIES TRANSFER AGENTS
MEDALLION PROGRAM(TM) SR
o In the case of the corporation -
ABC Corporation
Mary B. Doe
By Mary B. Doe, President
[Date] SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
/s/ [ILLEGIBLE]
-----------------------------
AUTHORIZED SIGNATURE
(960) X9803470
SECURITIES TRANSFER AGENTS
MEDALLION PROGRAM(TM) SR
Lord Abbett Consultants/Advisers. Consultants and advisers to Lord Abbett, Lord
Abbett Distributor or Lord Abbett-sponsored funds who consent to such purchase
if such persons provide services to Lord Abbett, Lord Abbett Distributor or such
funds on a continuing basis and are familiar with such fund.
Lord Abbett Distributor LLC. Lord Abbett Distributor is the Fund's exclusive
selling agent. Lord Abbett Distributor is obligated to use its best efforts
to find purchasers for the shares of the Fund, and to make reasonable efforts to
sell Fund shares to long as, in Lord Abbett Distributor's judgment, a
substantial distribution can be obtained.
Mutual Fund Wrap-Fee Program. Certain unaffiliated authorized brokers, dealers
registered investment advisers or other financial institutions who have entered
into an agreement with Lord Abbett Distributor in accordance with certain
standards approved by Lord Abbett Distributor, providing specifically for the
use of our shares in particular investment products made available for a fee to
clients of such brokers, dealers, registered investment advisers and other
financial institutions.
Purchaser. The term "purchaser" includes: (i) an individual, (ii) an
individual and his or her spouse and children under the age of 21 and (iii) a
trustee or other fiduciary purchasing shares for a single trust estate or single
fiduciary account (including a pension, profit-sharing, or other employee
benefit trust qualified under Section 401 of the Internal Revenue Code - more
than one qualified employee benefit trust of a single employer, including its
consolidated subsidiaries, may be considered a single trust, as may qualified
plans of multiple employers registered in the name of a single bank trustee as
one account), although more than one beneficiary is involved.
Retirement Plans. Employer-sponsored retirement plans under the Internal
Revenue Code.
Special Retirement Wrap Program. A program sponsored by an authorized
institution showing one or more characteristics distinguishing it, in the
opinion of Lord Abbett Distributor from a mutual fund wrap-fee program. Such
characteristics include, among other things, the fact that an authorized
institution does not charge its clients any fee of a consulting or advisory
nature that is economically equivalent to the distribution fee under Class A
12b-1 Plan and the fact that the program relates to participant-directed
Retirement Plans.
<PAGE>
Total Return. "Total Return" for the one-, five- and ten-year periods
represents the average annual compounded rate of return on an investment of
$1,000 in the Fund at the maximum public offering price. When total return
is quoted for Class A shares, it includes the payment of the maximum initial
sales charge. When total return is shown for Class B and Class C shares, it
reflects the effect of the applicable CDSC. Total return also may be
presented for other periods or based on investments at reduced sales charge
levels or net asset value. Any quotation of total return not reflecting the
maximum sales charge (front-end, level, or back-end) would be reduced if such
charge were used. Quotations of yield or total return for any period when an
expense limitation is in effect will be greater than if the limitation had not
been in effect. See "Past Performance" in the Statement of Additional
Information for a more detailed description.
Yield. Each class of shares calculates its "yield" by dividing the annualized
net investment income per share on the portfolio during a 30-day period by the
maximum offering price on the last day of the period. The yield of each class
will differ because of the different expenses (including actual 12b-1 fees)
of each class of shares. The yield data represents a hypothetical investment
return on the portfolio, and does not measure investment return based on
dividends actually paid to shareholders. To show that return, a dividend
distribution rate may be calculated. Dividend distribution rate is calculated
by dividing the dividends of a class derived from net investment income during a
stated period by the maximum offering price on the last day of the period.
Yields and dividend distribution rates for Class A shares reflect the deduction
of the maximum initial sales chare, but may also be shown based on the Fund's
net asset value per share. Yields for Class B and Class C shares do not
reflect the deduction of the CDSC.
This Prospectus does not constitute an offering in any jurisdiction in
which such offer if not authorized or in which the person making such offer
is not qualified to do so or to anyone to whom it is unlawful to make such
offer.
No person is authorized to give any information or to make any
representations not contained in this Prospectus or in supplemental sales
material authorized by the Fund and no person is entitled to rely upon
any informtion or representation not contained herein or therein.
18
<PAGE>
The performance of the Class A shares of each multi-class Series which is shown
in the comparisons below will be greater than or less than that shown below for
Class B and Class C shares based on the differences in sales charges and fees
paid by shareholders investing in the different classes.
Comparison of change in value of a $10,000 investment in Class A shares in the
Equity Series, assuming reinvestment of all dividends and distributions and the
unmanaged Morgan Stanley World Index.
DATE FUND AT NET FUND AT MAXIMUM INDEX
ASSET VALUE OFFERING PRICE
12/31/88 10,437 9,837 $ 11,142
12/31/89 12,228 11,582 13,057
12/31/90 10,798 10,178 10,900
12/31/91 12,392 11,681 12,968
12/31/92 12,178 11,478 12,364
12/31/93 15,351 14,469 15,223
12/31/94 15,337 14,456 16,073
12/31/95 16,747 15,785 19,500
12/31/96 18,149 17,108 22,230
12/31/97 19,600 18,474 25,837
================================================================================
Average Annual Total Return for Class A Shares(3)
================================================================================
1 Year 5 Years Life of Series (9/30/88-12/31/97)
- --------------------------------------------------------------------------------
1.70% 8.69% 6.86%
- --------------------------------------------------------------------------------
================================================================================
Average Annual Total Return for Class B Shares(4)
================================================================================
1 Year Life of Class (8/1/96-12/31/97)
- --------------------------------------------------------------------------------
2.91% 5.30%
- --------------------------------------------------------------------------------
================================================================================
Average Annual Total Return for Class C Shares(5)
================================================================================
1 Year Life of Class (8/1/96-12/30/97)
- --------------------------------------------------------------------------------
7.35% 8.55%
- --------------------------------------------------------------------------------
Comparison of change in value of a $10,000 investment in Class A shares in the
Income Series, assuming reinvestment of all dividends and distributions and the
unmanaged J.P. Morgan Global Government Bond Index.
DATE FUND AT NET FUND AT MAXIMUM INDEX
ASSET VALUE OFFERING PRICE
12/31/88 10,141 9,659 10,423
12/31/89 11,214 10,682 11,131
12/31/90 12,546 11,950 12,440
12/31/91 14,344 13,662 14,362
12/31/92 15,169 14,449 15,016
12/31/93 16,806 16,007 16,858
12/31/94 16,235 15,463 17,073
12/31/95 19,134 18,224 20,371
12/31/96 20,304 19,339 21,267
12/31/97 21,162 20,158 21,565
================================================================================
Average Annual Total Return for Class A Shares(3)
================================================================================
1 Year 5 Years Life of Series (9/30/88-12/31/97)
- --------------------------------------------------------------------------------
.70% 5.85% 7.87%
- --------------------------------------------------------------------------------
================================================================================
Average Annual Total Return for Class B Shares(4)
================================================================================
1 Year Life of Class (8/1/96-12/31/97)
- --------------------------------------------------------------------------------
.65% 3.44%
- --------------------------------------------------------------------------------
================================================================================
Average Annual Total Return for Class C Shares(5)
================================================================================
1 Year Life of Class (7/15/96-12/31/97)
- --------------------------------------------------------------------------------
3.49% 7.52%
- --------------------------------------------------------------------------------
Abbett Distributor is obligated to use its best efforts to find purchasers for
the shares of the Fund, and to make reasonable efforts to sell Fund shares so
long as, in Lord Abbett Distributor's judgment, a substantial distribution can
be obtained.
(1) Data reflects the deduction of the maximum initial sales charge of 5.75%
for the Equity Series and 4.75% for the Income Series applicable to Class
A shares.
(2) Performance numbers for the unmanaged Morgan Stanley World (Source: Lipper
Analytical Services Inc.) and J.P. Morgan Global Government Bond (Source:
Bloomberg LLP) Indices do not reflect transaction costs or management
fees. An investor cannot invest directly in either Index.
(3) Total return is the percent change in value, after deduction of the
maximum initial sales charge of 5.75% applicable to Class A shares of the
Equity Series and 4.75% applicable to Class A shares of the Income Series,
with all dividends and distributions reinvested for the periods shown
ending December 31, 1997 using the SEC-required uniform method to compute
such return.
(4) Performance
numbers reflect the deduction of the applicable CDSC.
19
<PAGE>
Mutual Fund Wrap-Fee Program. Certain unaffiliated authorized brokers, dealers,
registered investment advisers or other financial institutions who have entered
into an agreement with Lord Abbett Distributor in accordance with certain
standards approved by Lord Abbett Distributor, providing specifically for the
use of our shares in particular investment products made available for a fee to
clients of such brokers, dealers, registered investment advisers and other
financial institutions.
Purchaser. The term "purchaser" includes: (i) an individual, (ii) an individual
and his or her spouse and children under the age of 21 and (iii) a trustee or
other fiduciary purchasing shares for a single trust estate or single fiduciary
account (including a pension, profit-sharing, or other employee benefit trust
qualified under Section 401 of the Internal Revenue Code -- more than one
qualified employee benefit trust of a single employer, including its
consolidated subsidiaries, may be considered a single trust, as may qualified
plans of multiple employers registered in the name of a single bank trustee as
one account), although more than one beneficiary is involved.
Retirement Plans. Employer-sponsored retirement plans under the Internal Revenue
Code.
Special Retirement Wrap Program. A program sponsored by an authorized
institution showing one or more characteristics distinguishing it, in the
opinion of Lord Abbett Distributor from a mutual fund wrap-fee program. Such
characteristics include, among other things, the fact that an authorized
institution does not charge its clients any fee of a consulting or advisory
nature that is economically equivalent to the distribution fee under Class A
12b-1 Plan and the fact that the program relates to participant-directed
Retirement Plans.
Total Return. "Total return" for the one-, five- and ten-year periods represents
the average annual compounded rate of return on an investment of $1,000 in the
Fund at the maximum public offering price. When total return is quoted for Class
A shares, it includes the payment of the maximum initial sales charge. When
total return is shown for Class B and Class C shares, it reflects the effect of
the applicable CDSC. Total return also may be presented for other periods or
based on investments at reduced sales charge levels or net asset value. Any
quotation of total return not reflecting the maximum sales charge (front-end,
level, or back-end) would be reduced if such sales charge were used. Quotations
of yield or total return for any period when an expense limitation is in effect
will be greater than if the limitation had not been in effect. See "Past
Performance" in the Statement of Additional Information for a more detailed
description.
Yield. Each class of shares calculates its "yield" by dividing the annualized
net investment income per share on the portfolio during a 30-day period by the
maximum offering price on the last day of the period. The yield of each class
will differ because of the different expenses (including actual 12b-1 fees) of
each class of shares. The yield data represents a hypothetical investment return
on the portfolio, and does not measure investment return based on dividends
actually paid to shareholders. To show that return, a dividend distribution rate
may be calculated. Dividend distribution rate is calculated by dividing the
dividends of a class derived from net investment income during a stated period
by the maximum offering price on the last day of the period. Yields and dividend
distribution rate for Class A shares reflect the deduction of the maximum
initial sales charge, but may also be shown based on the Fund's net asset value
per share. Yields for Class B and Class C shares do not reflect the deduction of
the CDSC.
This Prospectus does not constitute an offering in any jurisdiction in
which such offer is not authorized or in which the person making such offer is
not qualified to do so or to anyone to whom it is unlawful to make such offer.
No person is authorized to give any information or to make any
representations not contained in this Prospectus or in supplemental sales
material authorized by the Fund and no person is entitled to rely upon any
information or representation not contained herein or therein.
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
EQUITY SERIES FIRST YEAR COMPENSATION
Class A investments
Front-end
sales charge Dealer's
paid by investors concession Service fee(1) Total compensation(2)
(% of offering price) (% of offering price) (% of net investment) (% of offering price)
====================================================================================================================================
<S> <C> <C> <C> <C>
Less than $50,000 5.75% 5.00% 0.25% 5.24%
$50,000 - $99,999 4.75% 4.00% 0.25% 4.24%
$100,000 - $249,999 3.75% 3.25% 0.25% 3.49%
$250,000 - $499,999 2.75% 2.25% 0.25% 2.49%
$500,000 - $999,999 2.00% 1.75% 0.25% 2.00%
- ----------------------------------
$1 million or more(3) or
Retirement Plan - 100 or more
eligible employees(3) or
Special Retirement Wrap Program(3)
- ----------------------------------
First $5 million no front-end sales charge 1.00% 0.25% 1.25%
Next $5 million above that no front-end sales charge 0.55% 0.25% 0.80%
Next $40 million above that no front-end sales charge 0.50% 0.25% 0.75%
Over $50 million no front-end sales charge 0.25% 0.25% 0.50%
Class B investments Paid at time of sale (% of net asset value)
All amounts no front-end sales charge 3.75% 0.25% 4.00%
====================================================================================================================================
Class C investments
====================================================================================================================================
All amounts no front-end sales charge 0.75% 0.25% 1.00%
====================================================================================================================================
EQUITY SERIES ANNUAL COMPENSATION AFTER FIRST YEAR
Class A investments
====================================================================================================================================
All amounts no front-end sales charge none 0.25% 0.25%
====================================================================================================================================
Class B investments Percentage of average net assets (4)
====================================================================================================================================
All amounts no front-end sales charge none 0.25% 0.25%
====================================================================================================================================
Class C investments
====================================================================================================================================
All amounts no front-end sales charge 0.75% 0.25% 1.00%
</TABLE>
(1) The service fee for Class A shares is paid quarterly. The first year's
service fee on Class B and C shares is paid at the time of sale.
(2) Reallowance/concession percentages and service fee percentages are
calculated from different amounts, and therefore may not equal total
compensation percentages if combined using simple addition. Additional
Concessions may be paid to Authorized Institutions from time to time.
(3) Concessions are paid at the time of sale on all Class A shares sold during
any 12-month period starting from the day of the first net asset value
sale. With respect to (a) Class A share purchases at $1 million or more,
sales qualifying at such level under rights of accumulation and statement
of intention privileges are included and(b) for Special Retirement Wrap
Programs, only new sales are eligible and exchanges into the Fund are
excluded.
(4) With respect to Class B and C shares, 0.25% and 1.00%, respectively, of
the average annual net asset value of such shares outstanding during the
quarter (including distribution reinvestment shares after the first
anniversary of their issuance) is paid to Authorized Institutions. These
fees are paid quarterly in arrears. CDSC revenues collected
may be used to fund commission payments when there is no initial
sales charge.
20
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
INCOME SERIES FIRST YEAR COMPENSATION
Class A investments
Front-end
sales charge Dealer's
paid by investors concession Service fee(1) Total compensation(2)
(% of offering price) (% of offering price) (% of net investment) (% of offering price)
====================================================================================================================================
<S> <C> <C> <C> <C>
Less than $50,000 4.75% 4.00% 0.25% 4.24%
$50,000 - $99,999 4.75% 4.25% 0.25% 4.49%
$100,000 - $249,999 3.75% 3.25% 0.25% 3.49%
$250,000 - $499,999 2.75% 2.50% 0.25% 2.74%
$500,000 - $999,999 2.00% 1.75% 0.25% 2.00%
- ----------------------------------
$1 million or more(3) or
Retirement Plan - 100 or more
eligible employees(3) or
Special Retirement Wrap Program(3)
- ----------------------------------
First $5 million no front-end sales charge 1.00% 0.25% 1.25%
Next $5 million above that no front-end sales charge 0.55% 0.25% 0.80%
Next $40 million above that no front-end sales charge 0.50% 0.25% 0.75%
Over $50 million no front-end sales charge 0.25% 0.25% 0.50%
Class B investments Paid at time of sale (% of net asset value)
All amounts no front-end sales charge 3.75% 0.25% 4.00%
====================================================================================================================================
Class C investments
====================================================================================================================================
All amounts no front-end sales charge 0.75% 0.25% 1.00%
====================================================================================================================================
INCOME SERIES ANNUAL COMPENSATION AFTER FIRST YEAR
====================================================================================================================================
Class A investments
====================================================================================================================================
All amounts no front-end sales charge none 0.25% 0.25%
====================================================================================================================================
Class B investments Percentage of average net assets (4)
====================================================================================================================================
All amounts no front-end sales charge none 0.25% 0.25%
====================================================================================================================================
Class C investments
====================================================================================================================================
All amounts no front-end sales charge 0.65% 0.25% 0.90%
</TABLE>
(1) The service fee for Class A shares is paid quarterly. The first year's
service fee on Class B and C shares is paid at the time of sale.
(2) Reallowance/concession percentages and service fee percentages are
calculated from different amounts, and therefore may not equal total
compensation percentages if combined using simple addition. Additional
Concessions may be paid to Authorized Institutions from time to time.
(3) Concessions are paid at the time of sale on all Class A shares sold during
any 12-month period starting from the day of the first net asset value
sale. With respect to(a) Class A share purchases at $1 million or more,
sales qualifying at such level under rights of accumulation and statement
of intention privileges are included and(b) for Special Retirement Wrap
Programs, only new sales are eligible and exchanges into the Fund are
excluded.
(4) With respect to Class B and C shares, 0.25% and 0.90%, respectively, of
the average annual net asset value of such shares outstanding during the
quarter (including distribution reinvestment shares after the first
anniversary of their issuance) is paid to Authorized Institutions. These
fees are paid quarterly in arrears. In the case of Class C shares for
fixed-income series, 0.10% of the average net asset value of such shares
is retained by Lord Abbett Distributor, thus reducing from 0.75% to 0.65%
after the first year. Lord, Abbett & Co. uses 0.10% for expenses primarily
intended to result in the sale of such series' shares. CDSC revenues
collected may be used to fund commission payments
when there is no initial sales charge.
21
<PAGE>
PROSPECTUS
Investment Manager and Underwriter
Lord, Abbett & Co. and Lord Abbett Distributor LLC
The General Motors Building
767 Fifth Avenue
New York, New York 10153-0203
212-848-1800
Custodian
The Bank of New York
48 Wall Street
New York, New York 10286
Transfer Agent and Dividend
Disbursing Agent
United Missouri Bank of Kansas City, N.A.
Tenth and Grand
Kansas City, Missouri 64141
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419100
Kansas City, Missouri 64141
800-821-5129
Auditors
Deloitte & Touche LLP
Counsel
Debevoise & Plimpton
Printed in the U.S.A.
LAGF-1-598
(5/98)
LORD ABBETT
GLOBAL FUND, INC.
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
May 1, 1998
Application Inside
LORD ABBETT
Global Fund, Inc.
- --------------------------------------------------------------------------------
Income Series
Equity Series
[LOGO](R) LORD ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
<PAGE>
LORD ABBETT
Statement of Additional Information May 1, 1998
Global Fund, Inc.
- --------------------------------------------------------------------------------
This Statement of Additional Information is not a Prospectus. A Prospectus for
Lord Abbett Global Fund, Inc. (the "Fund"or "we") may be obtained from your
securities dealer or from Lord Abbett Distributor LLC ("Lord Abbett
Distributor") at The General Motors Building, 767 Fifth Avenue, New York, New
York 10153-0203. This Statement relates to, and should be read in conjunction
with, the Prospectus dated May 1, 1998.
Our Board of Directors has authority to create and classify shares of common
stock in separate series, without further action by shareholders. To date,
100,000,000 shares of the Equity Series and 100,000,000 shares of the Income
Series have been authorized at $0.001 par value. Both Series consist of three
classes (A, B and C). The Board of Directors will allocate these authorized
shares among the classes of each Series from time to time. All shares have equal
noncumulative voting rights and equal rights with respect to dividends, assets
and liquidation, except for certain class-specific expenses. They are fully paid
and nonassessable when issued and have no preemptive or conversion rights.
Although no present plans exist to do so, further series may be added in the
future. The Investment Company Act of 1940, as amended (the "Act"), requires
that where more than one series exists, each series must be preferred over all
other series in respect of assets specifically allocated to such series.
Rule 18f-2 under the Act provides that any matter required to be submitted, by
the provisions of the Act or applicable state law, or otherwise, to the holders
of the outstanding voting securities of an investment company such as the Fund
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each class or series affected
by such matter. Rule 18f-2 further provides that a class or series shall be
deemed to be affected by a matter unless the interests of each class or series
in the matter are substantially identical or the matter does not affect any
interest of such class or series. However, the Rule exempts the selection of
independent public accountants, the approval of a contract with a principal
underwriter and the election of directors from the separate voting requirements
of the Rule.
Shareholder inquiries should be made by writing directly to the Fund or by
calling 800-821-5129. In addition, you can make inquiries through your dealer.
TABLE OF CONTENTS Page
1. Investment Policies 2
2. Directors and Officers 6
3. Investment Advisory and Other Services 8
4. Portfolio Transactions 10
5. Purchases, Redemptions and Shareholder Services 11
6. Past Performance 18
7. Taxes 19
8. Information About the Fund 20
9. Financial Statements 20
10. Appendix 21
1
<PAGE>
1.
Investment Policies
Fundamental Investment Restrictions
We are subject to the following investment restrictions which cannot be changed
without approval of a majority of our outstanding shares. Neither Series may:
(1) borrow money, except that (i) it may borrow from banks (as defined in the
Act) in amounts up to 33 1/3% of its total assets (including the amount
borrowed), (ii) it may borrow up to an additional 5% of its total assets for
temporary purposes, (iii) it may obtain such short-term credit as may be
necessary for the clearance of purchases and sales of portfolio securities and
(iv) it may purchase securities on margin to the extent permitted by applicable
law; (2) pledge its assets (other than to secure borrowings, or to the extent
permitted by the Series' investment policies as permitted by applicable law);
(3) engage in the underwriting of securities, except pursuant to a merger or
acquisition or to the extent that, in connection with the disposition of its
portfolio securities, it may be deemed to be an underwriter under federal
securities laws; (4) make loans to other persons, except that the acquisition of
bonds, debentures or other corporate debt securities and investment in
government obligations, commercial paper, pass-through instruments, certificates
of deposit, bankers acceptances, repurchase agreements or any similar
instruments shall not be subject to this limitation, and except further that
each Series may lend its portfolio securities, provided that the lending of
portfolio securities may be made only in accordance with applicable law; (5) buy
or sell real estate (except that a Series may invest in securities directly or
indirectly secured by real estate or interests therein or issued by companies
which invest in real estate or interests therein) or commodities or commodity
contracts (except to the extent a Series may do so in accordance with applicable
law and without registering as a commodity pool operator under the Commodity
Exchange Act as, for example, with futures contracts); (6) with respect to 75%
of the gross assets of the Equity Series, buy securities of one issuer
representing more than (i) 5% of the Equity Series' gross assets, except
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities or (ii) 10% of the voting securities of such issuer; (7)
invest more than 25% of its assets, taken at market value, in the securities of
issuers in any particular industry (excluding securities of the U.S. Government,
its agencies and instrumentalities); or (8) issue senior securities to the
extent such issuance would violate applicable law.
With respect to the restrictions mentioned herein, compliance therewith will not
be affected by changes in the market value of portfolio securities but will be
determined at the time of purchase or sale of such securities.
Non-Fundamental Investment Restrictions. In addition to the investment
restrictions above which cannot be changed without shareholder approval, each
Series is also subject to the following non-fundamental investment policies
which may be changed by the Board of Directors without shareholder approval.
Neither Series may: (1) borrow in excess of 33 1/3% of its total assets
(including the amount borrowed), and then only as a temporary measure for
extraordinary or emergency purposes; (2) make short sales of securities or
maintain a short position except to the extent permitted by applicable law; (3)
invest knowingly more than 15% of its net assets (at the time of investment) in
illiquid securities, except for securities qualifying for resale under Rule 144A
of the Securities Act of 1933, deemed to be liquid by the Board of Directors;
(4) invest in the securities of other investment companies except as permitted
by applicable law; (5) invest in securities of issuers which, with their
predecessors, have a record of less than three years' continuous 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); (6) hold securities of any issuer if more than
1/2 of 1% of the securities of such issuer are owned beneficially by one or more
officers or directors of the Fund or by one or more partners or members of a
Series' underwriter or investment adviser if these owners in the aggregate own
beneficially more than 5% of the securities of such issuer; (7) invest in
warrants if, at the time of the acquisition, its investment in warrants, valued
at the lower of cost or market, would exceed 5% of such Series' total assets
(included within such limitation, but not to exceed 2% of such Series' total
assets, are warrants which are not listed on the New York or American Stock
Exchange or a major foreign exchange); (8) invest in real estate limited
partnership interests or interests in oil, gas or other mineral leases, or
exploration or other development programs, except that each Series may invest in
securities issued by companies that engage in oil, gas or other mineral
exploration or other development activities; (9) write, purchase or sell puts,
calls, straddles, spreads or combinations thereof, except to the extent
permitted in the Fund's prospectus and statement of additional information, as
they may be amended from time to time; or (10) buy from or sell to
2
<PAGE>
any of its officers, directors, employees, or its investment adviser or any of
its officers, directors, partners or employees, any securities other than shares
of the Fund's common stock.
The Income Series will be required to meet the diversification rules under
Subchapter M of the Internal Revenue Code.
Although it has no current intention to do so, the Fund may invest in financial
futures and options on financial futures.
Portfolio Turnover Rate
For the fiscal years ended December 31, 1997 and 1996 the portfolio turnover
rates were 99.05% and 81.97% for the Equity Series and 616.63% and 621.79% for
the Income Series, respectively.
Foreign Currency Hedging Techniques
The Fund may utilize various foreign currency hedging techniques described
below, including forward foreign currency contracts and foreign currency put and
call options.
Forward Foreign Currency Contracts. A forward foreign currency contract involves
an obligation to purchase or sell a specific amount of a specific currency at a
set price at a future date. The Fund expects to enter into forward foreign
currency contracts in primarily two circumstances. First, when the Fund enters
into a contract for the purchase or sale of a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security. By
entering into a forward contract for the purchase or sale of the amount of
foreign currency involved in the underlying security transaction, the Fund will
be able to protect against a possible loss resulting from an adverse change in
the relationship between the U.S. dollar and the subject foreign currency during
the period between the date the security is purchased or sold and the date on
which payment is made or received.
Second, when management believes that the currency of a particular foreign
country may suffer a decline against the U.S. dollar, the Fund may enter into a
forward contract to sell the amount of foreign currency approximating the value
of some or all of the Fund's portfolio securities denominated in such foreign
currency or, in the alternative, the Fund may use a cross-hedging technique
whereby it sells another currency which the Fund expects to decline in a similar
way but which has a lower transaction cost. Precise matching of the forward
contract amount and the value of the securities involved will not generally be
possible since the future value of such securities denominated in foreign
currencies will change as a consequence of market movements in the value of
those securities between the date the forward contract is entered into and the
date it matures. The Fund does not intend to enter into such forward contracts
under this second circumstance on a continuous basis.
Foreign Currency Put and Call Options. The Fund may also purchase foreign
currency put options and write foreign currency call options on U.S. exchanges
or U.S. over-the-counter markets. A put option gives the Fund, upon payment of a
premium, the right to sell a currency at the exercise price until the expiration
of the option and serves to insure against adverse currency price movements in
the underlying portfolio assets denominated in that currency.
Exchange-listed options markets in the United States include several major
currencies, and trading may be thin and illiquid. A number of major investment
firms trade unlisted options which are more flexible than exchange-listed
options with respect to strike price and maturity date. Unlisted options
generally are available in a wider range of currencies, including those of most
of the developed countries mentioned under "Investment Objectives and Policies"
in the Prospectus. Unlisted foreign currency options are generally less liquid
than listed options and involve the credit risk associated with the individual
issuer. Unlisted options are subject to a limit of 5% of each Series' net assets
illiquid securities.
A call option written by the Fund gives the purchaser, upon payment of a
premium, the right to purchase from the Fund a currency at the exercise price
until the expiration of the option. The Fund may write a call option on a
foreign currency only in conjunction with a purchase of a put option on that
currency. Such a strategy is designed to reduce the cost of downside currency
protection by limiting currency appreciation potential. The face value of such
writing may not exceed 90% of the
3
<PAGE>
value of the securities denominated in such currency invested in by the Fund or
in such cross currency (referred to above) to cover such call writing.
Investment Techniques
The Fund intends to utilize, from time to time, one or more of the investment
techniques described below, including covered call options, rights and warrants
and repurchase agreements. It is the Fund's current intention that no more than
5% of each Series' net assets will be at risk in the use of any one of such
investment techniques. While some of these techniques involve risk when utilized
independently, the Fund intends to use them to reduce risk and volatility in its
portfolios.
Covered Call Options. Each Series may write covered call options on securities
it owns ("call options"), provided that the securities held to cover such call
options do not represent more than 5% of a Series' net assets. A call option on
stock gives the purchaser of the option, upon payment of a premium to the writer
of the option, the right to call upon the writer to deliver a specified number
of shares of a stock on or before a fixed date at a predetermined price.
The writing of call options will, therefore, involve a potential loss of
opportunity to sell securities at higher prices. In exchange for the premium
received. The writer of a fully collateralized call option gives up the gain
possibility of the underlying stock beyond the call price and continues to have
the downside risk of such securities. In addition, in exchange for the premium
received, the writer of the call gives up the gain possibility of the stock
appreciating above the call price. While an option that has been written is in
force, the maximum profit that may be derived from the optioned stock is the sum
of the premium less brokerage commissions and fees plus the difference between
the strike price of the call and the market price of the underlying security.
Each Series will not use call options on individual equity securities traded on
foreign securities markets.
The Fund's custodian will segregate cash or liquid high-grade debt securities in
an amount not less than that required by SEC Release 10666 and any SEC staff
interpretations thereof with respect to each Series' assets committed to (a)
forward foreign currency contracts and (b) cross hedges. If the value of the
segregated securities declines, additional cash, equity and debt securities
consistent with the Fund's policies and such SEC requirements will be added on a
daily basis (i.e., marked to market) so that the segregated amount will not be
less than the amount of the Series' commitments with respect to such forward
contracts and cross hedges.
Rights and Warrants. Each Series may invest in rights and warrants to purchase
securities. Included within that amount, but not to exceed 2% of the value of
the Series' net assets, may be warrants which are not listed on the New York
Stock Exchange ("NYSE") or American Stock Exchange.
Rights represent a privilege offered to holders of record of issued securities
to subscribe (usually on a pro-rata basis) for additional securities of the same
class, of a different class, or of a different issuer, as the case may be.
Warrants represent the privilege to purchase securities at a stipulated price
and are usually valid for several years. Rights and warrants generally do not
entitle a holder to dividends or voting rights with respect to the underlying
securities, nor do they represent any rights in the assets of the issuing
company.
Also, the value of a right or warrant may not necessarily change with the value
of the underlying securities and rights and warrants cease to have value if they
are not exercised prior to their expiration date.
Repurchase Agreements. Each Series may enter into repurchase agreements with
respect to a security. A repurchase agreement is a transaction by which the
Series acquires a security and simultaneously commits to resell that security to
the seller (a bank or securities dealer) at an agreed-upon price on an
agreed-upon date. The resale price reflects the purchase price plus an
agreed-upon market rate of interest which is unrelated to the coupon rate or
date of maturity of the purchased security. In this type of transaction, the
securities purchased by the Series have a total value in excess of the value of
the repurchase agreement. Each Series requires at all times that the repurchase
agreement be collateralized by cash or U.S. Government securities having a value
equal to, or in excess of, the value of the repurchase agreement. Such
agreements
4
<PAGE>
permit the each Series to keep all of its assets at work while retaining
flexibility in pursuit of investments of a longer-term nature.
The use of repurchase agreements involves certain risks. For example, if the
seller of the agreement defaults on its obligation to repurchase the underlying
securities at a time when the value of these securities has declined, a Series
may incur a loss upon their disposition. If the seller of the agreement becomes
insolvent and subject to liquidation or reorganization under the Bankruptcy Code
or other laws, a bankruptcy court may determine that the underlying securities
are collateral not within the control of the Series and are therefore subject to
sale by the trustee in bankruptcy. Even though the repurchase agreements may
have maturities of seven days or less, they may lack liquidity, especially if
the issuer encounters financial difficulties. While the Series acknowledges
these risks, it is expected that they can be controlled through stringent
selection criteria and careful monitoring procedures. Each Series intends to
limit repurchase agreements to transactions with dealers and financial
institutions believed by the Series to present minimal credit risks. Each Series
will monitor creditworthiness of the repurchase agreement sellers on an ongoing
basis.
Lending Portfolio Securities
Each Series may lend its portfolio securities to registered broker-dealers.
These loans, if and when made, may not exceed 15% of each Series' total assets.
Each Series' lending of securities will be collateralized by cash or marketable
securities issued or guaranteed by the U.S. Government or its agencies ("U.S.
Government securities") or other permissible means. The cash or instruments
collateralizing each Series' lending of securities will be maintained at all
times in an amount at least equal to the current market value of the loaned
securities. From time to time, a Series may allow a part of the interest
received with respect to the investment of collateral to be paid to the borrower
and/or a third party that is not affiliated with the Series and is acting as a
"placing broker." No fee will be paid to affiliated persons of a Series.
By lending portfolio securities, a Series can increase its income by continuing
to receive interest on the loaned securities as well as by either investing the
cash collateral in permissible investments, such as U.S. Government securities,
or obtaining yield in the form of interest paid by a borrower when such U.S.
Government securities are used as collateral. Each Series will comply with the
following conditions whenever it lends securities: (i) the Series must receive
at least 100% collateral from the borrower; (ii) the borrower must increase the
collateral whenever the market value of the securities loaned rises above the
level of the collateral; (iii) the Series must be able to terminate the loan at
any time; (iv) the Series must receive reasonable compensation with respect to
the loan, as well as any dividends, interest or other distributions on the
loaned securities; (v) the Series may pay only reasonable fees in connection
with the loan; and (vi) voting rights on the loaned securities may pass to the
borrower, except that if a material event adversely affecting the investment in
the loaned securities occurs, the Fund's Board of Directors must terminate the
loan and regain the right to vote the securities.
INCOME SERIES ONLY
When-Issued Transactions
As stated in the Prospectus, the Income Series may purchase portfolio securities
on a when-issued basis. When-issued transactions involve a commitment by the
Income Series to purchase securities, with payment and delivery ("settlement")
to take place in the future, in order to secure what is considered to be an
advantageous price or yield at the time of entering into the transaction. When
the Income Series enters into a when-issued purchase, it becomes obligated to
purchase securities and it assumes all the rights and risks attendant to
ownership of a security, although settlement occurs at a later date. The value
of fixed-income securities to be delivered in the future will fluctuate as
interest rates vary. At the time the Income Series makes the commitment to
purchase a security on a when-issued basis, it will record the transaction and
reflect the liability for the purchase and the value of the security in
determining its net asset value. The Income Series generally has the ability to
close out a purchase obligation on or before the settlement date, rather than
take delivery of the security. Under no circumstances will settlement for such
securities take place more than 120 days after the purchase date.
5
<PAGE>
2.
Directors and Officers
The following directors and officers are partners of Lord, Abbett & Co. ("Lord
Abbett"), The General Motors Building, 767 Fifth Avenue, New York, New York
10153-0203. They have been associated with Lord Abbett for over five years and
are also officers and/or directors or trustees of the twelve other Lord
Abbett-sponsored funds. They are "interested persons" as defined in the Act, and
as such, may be considered to have an indirect financial interest in the Rule
12b-1 Plan described in the Prospectus.
Robert S. Dow, age 53, Chairman and President
E. Wayne Nordberg, age 59, Vice President
The following outside directors are also directors or trustees of the twelve
other Lord Abbett-sponsored funds referred to above.
E. Thayer Bigelow
Courtroom Television Network
600 Third Avenue
New York, New York
Chief Exective Officer of Courtroom Television Network. Formerly President and
Chief Executive Officer of Time Warner Cable Programming, Inc. Prior to that,
President and Chief Operating Officer of Home Box Office, Inc. Age 56.
Stewart S. Dixon
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois
Partner in the law firm of Wildman, Harrold, Allen & Dixon. Age 67.
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 72.
C. Alan MacDonald
Directorship Inc.
8 Sound Shore Drive
Greenwich, Connecticut
Managing Director of Directorship Inc., a consultancy in board management and
corporate governance. Formerly Gerneral Partner, The Marketing Partnership,
Inc., a full service marketing consulting firm (1994 - 1997). Prior to that,
Chairman and Chief Executive Officer of Lincoln Snacks, Inc., manufacturer of
branded snack foods (1992 - 1994). His career spans 36 years at Stouffers and
Nestle with 18 of the years as Chief Executive Officer. Currently serves as
Director of DenAmerica Corp., J.B. Williams Company, Inc., Fountainhead Water
Company and Exigent Diagnostics. Age 64.
6
<PAGE>
Hansel B. Millican, Jr.
Rochester Button Company
1100 Noblin Avenue
South Boston, Virginia
President and Chief Executive Officer of Rochester Button Company. Age 69.
Thomas J. Neff
Spencer Stuart U.S.
277 Park Avenue
New York, New York
Chairman of Spencer Stuart U.S., an executive search consulting firm. Age 60.
The second column of the following table sets forth the compensation accrued for
the Fund's outside directors. The third column sets forth information with
respect to the equity-based benefits accrued for outside directors by the Lord
Abbett-sponsored funds. The fourth column sets forth the total compensation
payable by such funds to the outside directors. 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.
For the Fiscal Year Ended December 31, 1997
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Pension or For Year Ended
Retirement Benefits December 31, 1997
Accrued by the Total Compensation
Aggregate Fund and Accrued by the Fund and
Compensation Twelve Other Lord Twelve Other Lord
Accrued by Abbett-sponsored Abbett-sponsored
Name of Director the Fund(1) Funds(2) Funds(3)
- ---------------- ----------- -------- --------
<S> <C> <C> <C>
E. Thayer Bigelow $1,029 $17,068 $56,000
Stewart S. Dixon $1,011 $32,190 $55,000
John C. Jansing $1,011 $45,085(4) $55,000
C. Alan MacDonald $1,055 $30,703 $57,400
Hansel B. Millican, Jr. $1,011 $37,747 $55,000
Thomas J. Neff $1,029 $19,853 $56,000
</TABLE>
(1) Outside directors' fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored funds based on the
net assets of each fund. A portion of the fees payable by the Fund to its
outside 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.
(2) The amounts in Column 3 were accrued by the Lord Abbett-Sponsored Funds
for the 12 months ended December 31, 1997 with respect to the equity based
plans established for independent directors in 1996. This plan supercedes
a previously approved retirement plan for all future directors. Current
directors had the option to convert their accrued benefits under the
retirement plan. All of the outside directors except one made such an
election. Each plan also provides for a pre-retirement death benefit and
actuarially reduced joint-and-survivor spousal benefits.
(3) This column shows aggregate compensation, including directors fees and
attendance fees for board and committee meetings, of a nature referred to
in footnote one, accrued by the Lord Abbett-sponsored funds during the
year ended December 31, 1997. The amounts of the aggregate compensation
payable by the Fund as of December 31, 1997 deemed invested in Fund
shares, including dividends reinvested and changes in net asset value
applicable to such deemed
7
<PAGE>
investments, were: Mr. Bigelow, $3,980; Mr. Dixon, $6,489; Mr. Jansing,
$10,132; Mr. MacDonald, $6,449; Mr. Millican, $10,211 and Mr. Neff,
$10,016. If the amounts deemed invested in Fund shares were added to each
director's actual holdings of Fund shares as of December 31, 1997, each
would own, the following: Mr. Bigelow,446 shares; Mr. Dixon, 887 shares;
Mr.Jansing, 2,641 shares; Mr. MacDonald, 723 shares; Mr. Millican, 452
shares; and Mr.Neff, 5,990 shares.
(4) Mr. Jansing chose to continue to receive benefits under the retirement
plan which provides that outside directors (Trustees) may receive annual
retirement benefits for life equal to their final annual retainer
following retirement at or after age 72 with at least ten years of
service. Thus, if Mr. Jansing were to retire and the annual retainer
payable by the funds were the same as it is today, he would receive annual
retirement benefits of $50,000.
Except where indicated, the following executive officers of the Fund have been
associated with Lord Abbett for over five years. Of the following, Messrs.
Brown, Carper, Hilstad, Morris, Nordberg and Walsh are partners of Lord Abbett;
the others
are employees: Zane E. Brown, age 46; Timothy W. Horan, age 43 (with Lord Abbett
since 1996 - formerly Senior Manager of Credit Suisse; prior thereto Vice
President of Aubrey G. Lanston & Co.); E. Wayne Nordberg, age 59, Executive
Vice Presidents; Paul A. Hilstad, age 55, Vice President and Secretary (with
Lord Abbett since 1995 - formerly Senior Vice President and General Counsel of
American Capital Management & Research, Inc.); Daniel E. Carper, age 46;
Lawrence H. Kaplan, age 41 (with Lord Abbett since 1997 - formerly vice
president and Chief Counsel of Salomon Brothers Asset Management Inc from 1995
to 1997, prior thereto Senior Vice President, Director and General Counsel of
Kidder Peabody Asset Management, Inc.); Thomas F. Konop, age 56; Jerald M.
Lanzotti, age 30 (with Lord Abbett since 1996 - formerly an Associate of
Deutsche Morgan Grenfell/C.J. Lawrence Inc.); Robert G. Morris, age 53; A.
Edward Oberhaus, age 38; Keith F. O'Connor, age 42; Fernando Saldanha, age 45
(with Lord Abbett since 1998 - formerly Senior Financial Officer at World Bank
from 1988); John J. Walsh, age 62 - Vice
Presidents; Donna M. McManus, age 37, Treasurer (with Lord Abbett since 1996,
formerly a Senior Manager at Deloitte & Touche LLP).
The Fund's By-Laws provide that the Fund shall not hold an annual meeting of its
stockholders in any year unless one or more matters are required to be acted on
by stockholders under the Investment Company Act of 1940, as amended (the
"Act"), or unless called by a majority of the Board of Directors or by
stockholders holding at least one quarter of the stock of the Fund outstanding
and entitled to vote at the meeting. When any such annual meeting is held, the
stockholders will elect directors and vote on the approval of the independent
auditors of the Fund.
As of April 1, 1997, our officers and directors, as a group, owned less than 1%
of our outstanding shares.
3.
Investment Advisory and Other Services
As described under "Our Management" in the Prospectus, Lord Abbett is the Fund's
investment manager. Seven of the twelve general partners of Lord Abbett are
officers and/or directors of the Fund, as follows: Zane E. Brown, Daniel E.
Carper, Robert S. Dow, Paul A. Hilstad, Robert G. Morris, E. Wayne Nordberg
and John J. Walsh. The address of each partner is The General Motors Building,
767 Fifth Avenue, New York, New York 10153-0203.
The services performed by Lord Abbett are described under "Our Management" in
the Prospectus. Under the Management Agreement, we pay Lord Abbett a monthly
fee, based on average daily net assets for each month, at the annual rate of .75
of 1% for the Equity Series and .50 of 1% for the Income Series. Notwithstanding
the above, Lord Abbett may, but is not required to, waive its fee or directly
pay all or any portion of the expenses of either Series not expressly assumed by
Lord Abbett under the Management Agreement
8
<PAGE>
The expense ratios for 1997 and 1996 were as follows:
1997 1996
---- ----
A B C A B* C*
- - - - -- --
Income 1.10% 1.78% 1.77% 1.04% .73% .87%
Equity 1.51% 2.23% 2.14% 1.52% .83% .83%
* not annualized
We pay all expenses not expressly assumed by Lord Abbett, including without
limitation 12b-1 expenses, outside directors' fees and expenses, association
membership dues, legal and auditing fees, taxes, transfer and dividend
disbursing agent fees, shareholder servicing costs, expenses relating to
shareholder meetings, expenses of preparing, printing and mailing stock
certificates and shareholder reports, expenses of registering our shares under
federal and state securities laws, expenses of preparing, printing and mailing
prospectuses to existing shareholders, insurance premiums, brokerage and other
expenses connected with executing portfolio transactions.
There is a Sub-Investment Management Agreement (the "New Agreement") with
respect to the Equity Series between Lord Abbett and Edinburgh Fund Managers
plc(the "Sub-Adviser"), under which the Sub-Adviser provides Lord Abbett with
advice with respect to that portion of the Equity Series' assets invested in
countries other than the United States, as more particularly described in the
Prospectus.
The Sub-Adviser provides international investment research and advisory services
to private and institutional clients, investment trusts, pension clients and
unit trusts both in the United Kingdom and overseas. The Sub-Adviser currently
manages approximately $10 billion, and its investment and administrative staffs
have substantial global investment management experience.
Securities held by either Series of the Fund may also be held by other funds or
investment advisory clients for which Lord Abbett or the Sub-Adviser (in the
case of the Equity Series) or their affiliates provide investment advice.
Because of different investment objectives or other factors, a particular
security may be bought for one or more funds or clients when one or more other
funds or clients are selling the same security. If opportunities for purchase or
sale of securities by Lord Abbett or the Sub-Adviser (in the case of the Equity
Series) for the Fund or for other funds or clients for which they render
investment advice arise for consideration at or about the same time,
transactions in such securities will be made insofar as feasible for the
respective funds or clients in a manner deemed equitable to all of them. To the
extent that transactions on behalf of more than one client of Lord Abbett, the
Sub-Adviser (in the case of the Equity Series) or their affiliates may increase
the demand for securities being purchased or the supply of securities being
sold, there may be an adverse effect on price.
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281 are
the independent accountants of the Fund and must be approved at least annually
by our Board of Directors to continue in such capacity. They perform audit
services for the Fund including the examination of financial statements included
in our annual report to shareholders.
The Bank of New York ("BNY"), 48 Wall Street, New York, New York 10286, is the
Fund's custodian. Rules adopted by the Securities & Exchange Commission under
the Act permit the Fund to maintain its foreign assets in the custody of certain
eligible foreign banks and securities depositories. The Fund's portfolio
securities and cash, when invested in foreign securities and not held by BNY or
its foreign branches, are held by sub-custodians of BNY approved by the Board of
Directors of the Fund in accordance with such rules.
The Sub-Custodians of BNY are:
Euro-Clear (a transnational securities depository); Australia: ANZ Banking
Group; Austria: Creditanstalt-Bankverein; Canada: Canadian Imperial Bank of
Commerce; Chile: Citibank, N.A.; Czech Republic: Ceskoslovenska Obchodni Banka;
9
<PAGE>
Denmark: Den Danske Bank; Finland: Union Bank of Finland; Germany: J.P. Morgan
GmbH; Greece: National Bank of Greece S.A.; Hong Kong, Indonesia, Philippines,
Taiwan and Thailand: Hong Kong & Shanghai Banking Corp.; Hungary: Citibank
Budapest Rt; India: Hong Kong and Shanghai Banking Corporation; Ireland: Allied
Irish Banks, PLC; Israel: Bank Leumi LE-Israel B.M.; Japan: The Fuji Bank, Ltd.;
Jordan: Citibank, N.A.; Korea: Bank of Seoul; Luxembourg: Banque Internationale
A Luxembourg, S.A.; Mexico: Citibank, N.A.; Morocco: Banque Commerciale du
Maroc; Netherlands: Bank van Haften Labouchere; New Zealand: Anz Banking Group
Ltd.; Norway: Den Norske Bank; Pakistan: Citibank, N.A.; Peru: Citibank, N.A.;
Poland: Bank Handlowy w Warszawie S.A.; Portugal: Banco Espirito Santo E
Comercial de Lisboa; Malaysia, Singapore: Development Bank of Singapore; South
Africa: The First National Bank of Southern Africa; Sri Lanka: Hong Kong and
Shanghai Banking Corporation; Sweden: Skandinaviska Enskilda Banken;
Switzerland: Bank Leu; Turkey: Citibank, N.A.; Venezuela: Citibank, N.A.
4.
Portfolio Transactions
With respect to the Income Series, purchases and sales of portfolio securities
usually will be principal transactions and normally such securities will be
purchased directly from the issuer or from an underwriter or market maker for
the securities. Therefore, the Income Series usually will pay no brokerage
commissions for such purchases. Purchases from underwriters of portfolio
securities will include a commission or concession paid by the issuer to the
underwriter and purchases from dealers serving as market makers will include a
dealer's markup. Principal transactions, including riskless principal
transactions, are not afforded the protection of the safe harbor in Section 28
(e) of the Securities Exchange Act of 1934.
Our policy is to obtain best execution on all our portfolio transactions, which
means that we seek to have purchases and sales of portfolio securities executed
at the most favorable prices, considering all costs of the transaction including
dealer markups and markdowns and any brokerage commissions and taking into
account the full range and quality of the brokers' services. With respect to the
Equity Series, consistent with obtaining best execution, we may pay, as
described below, a higher commission than some brokers might charge on the same
transactions. Our policy with respect to best execution governs the selection of
brokers or dealers and the market in which the transaction is executed. To the
extent permitted by law, we may, if considered advantageous, make a purchase
from or sale to another Lord Abbett-sponsored fund without the intervention of
any broker-dealer.
Broker-dealers are selected on the basis of their professional capability and
the value and quality of their brokerage and research services. Normally, the
selection is made by traders who are officers of the Fund and also are employees
of Lord Abbett. These 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. For foreign securities purchased or sold by
the Equity Series, the selection is made by the Sub-Adviser. They are
responsible for obtaining best execution.
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. When commissions are negotiated, we pay a commission rate that we
believe is appropriate to give maximum assurance that our brokers will provide
us, on a continuing basis, the highest level of brokerage services available.
While we do not always seek the lowest possible commission on particular trades,
we believe that our commission rates are in line with the rates that many other
institutions pay. Our traders are authorized to pay brokerage commissions in
excess of those that other brokers might accept on the same transactions in
recognition of the value of the services performed by the executing brokers,
viewed in terms of either the particular transaction or the overall
responsibilities of Lord Abbett with respect to us and the other accounts they
manage. Such services include such factors as showing the Fund trading
opportunities including blocks, willingness and ability to take positions in
securities, knowledge of a particular security or market, proven ability to
handle a particular type of trade, confidential treatment, promptness and
reliability. Some of our brokers also provide research services at least some of
which are useful to Lord Abbett in their overall responsibilities with respect
to us and the other accounts they manage. Research includes, the furnishing of
analyses and reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts and
trading
10
<PAGE>
equipment and computer software packages, acquired from third-part suppliers,
that enable Lord Abbett to access various information bases. 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 of 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 attempted to
generate such additional information through its own staff and purchased such
equipment and software packages directly from the suppliers.
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 our 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 we do, 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 us in the
buying and selling of the same securities as described above. If these clients
wish to buy or sell the same security as we do, they may have their transactions
executed at times different from our transactions and thus may not receive the
same price or incur the same commission cost as we do.
We will not seek "reciprocal" dealer business (for the purpose of applying
commissions in whole or in part for our benefit or otherwise) from dealers as
consideration for the direction to them of portfolio business.
During the fiscal years ended December 31, 1997, 1996 and 1995, the Fund paid
total commissions to independent broker-dealers of $414,606, $372,219, and
$347,151 respectively.
5.
Purchases, Redemptions
and Shareholder Services
The Fund values its portfolio securities at their market values as of the close
of the NYSE. Market value will be determined as follows: securities listed or
admitted to trading privileges on any national or foreign securities exchange
are valued at the last sales price on the principal securities exchange on which
such securities are traded, or, if there is no sale on that day, at the mean
between the last bid and asked prices, or, in the case of bonds, in the
over-the-counter market if, in the judgment of the Fund's officers, that market
more accurately reflects the market value of the bonds. Over-the-counter
securities that are not traded on the NASDAQ National Market System are valued
at the mean between the last bid and asked price. Securities for which market
quotations are not available are valued at fair market value under procedures
approved by the Board of Directors.
Information concerning how each Series values its shares for the purchase and
redemption or repurchase of its shares is briefly described in the Prospectus
under "Purchases" and "Redemptions," respectively.
As disclosed in the Prospectus, each Series calculates its net asset value and
is otherwise open for business on each day that the NYSE is open for trading.
The NYSE is closed on Saturdays and Sundays and the following holidays: New
Year's Day,
11
<PAGE>
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
All assets and liabilities expressed in foreign currencies will be converted
into United States dollars at the mean between the buying and selling rates of
such currencies against United States dollars last quoted by any major bank. If
such quotations are not available, the rate of exchange will be determined in
accordance with policies established by the Board of Directors of the Fund. The
Board of Directors will monitor, on an ongoing basis, the Fund's method of
valuation.
Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed well before the close of business
on each business day in New York. In addition, European or Far Eastern
securities trading generally or in a particular country or countries may not
take place on all business days in New York. Furthermore, trading takes place in
various foreign markets on days which are not business days in New York and on
which the Series' net asset values are not calculated. Such calculation does not
take place contemporaneously with the determination of the prices of the
majority of the portfolio securities used in such calculation. Events affecting
the values of portfolio securities that occur between the time their prices are
determined and the close of the NYSE will not be reflected in the Series'
calculation of net asset values unless the Fund's Directors determine that the
particular event would materially affect net asset value, in which case an
adjustment will be made.
The net asset value per share for the Class B and Class C shares is determined
in the same manner as for the Class A shares (net assets divided by shares
outstanding). Our Class B and Class C shares are sold at net asset value.
The maximum offering prices of each Series' Class A shares on December 31, 1997
were computed as follows:
Equity Income
Series Series
------ ------
Net asset value per share (net assets
divided by shares outstanding)........................ $12.08 $8.09
Maximum offering price per
share (net asset value divided by .9425 and .9525,
respectively) ................................... 12.82 $8.49
The Fund has entered into a distribution agreement with Lord Abbett Distributor
under which Lord Abbett is obligated to use its best efforts to find purchasers
for the shares of the Fund and to make reasonable efforts to sell Fund shares,
so long as, in Lord Abbett Distributor's judgment, a substantial distribution
can be obtained by reasonable efforts.
For the last three fiscal years Lord Abbett, as the Fund's principal
underwriter, received net commissions after allowance of a portion of the sales
charge to independent dealers with respect to Class A shares as follows:
Equity Series
Year Ended December 31,
1997 1996 1995
---- ---- ----
Gross sales charge $200,054 $310,158 $266,247
Amount allowed
to dealers $170,647 $267,318 $245,921
-------- -------- --------
Net commissions
received by
12
<PAGE>
Lord Abbett $ 29,407 42,840 $ 20,326
======== ======== ========
Income Series
Year Ended December 31,
1997 1996 1995
---- ---- ----
Gross sales charge $ 75,727 $172,464 $308,511
Amount allowed
to dealers $ 65,169 $148,333 $265,179
-------- -------- --------
Net commissions
received by
Lord Abbett $ 10,558 $ 24,131 $ 43,332
======== ======== ========
Conversion of Class B Shares. The conversion of Class B shares on the eighth
anniversary of their purchase is subject to the continuing availability of a
private letter ruling from the Internal Revenue Service, or an opinion of
counsel or tax adviser, to the effect that the conversion of Class B shares does
not constitute a taxable event for the holder under Federal income tax law. If
such a revenue ruling or opinion is no longer available, the automatic
conversion feature may be suspended, in which event no further conversions of
Class B shares would occur while such suspension remained in effect. Although
Class B shares could then be exchanged for Class A shares on the basis of
relative net asset value of the two classes, without the imposition of a sales
charge or fee, such exchange could constitute a taxable event for the holder.
Class A, B and C Rule 12b-1 Plans. As described in the Prospectus, the Fund has
adopted on behalf of each class of each Series, a Distribution Plan and
Agreement pursuant to Rule 12b-1 of the Act: the "A Plans," the "B Plans" and
the "C Plans," respectively. In adopting each Plan and in approving its
continuance, the Board of Directors has concluded that there is a reasonable
likelihood that each Plan will benefit its respective Class and such Class'
shareholders. The expected benefits include greater sales and lower redemptions
of Class shares, which should allow each Class to maintain a consistent cash
flow, and a higher quality of service to shareholders by authorized institutions
than would otherwise be the case. Lord Abbett used all amounts received under
each Plan for payments to dealers for (i) providing continuous services to the
shareholders, such as answering shareholder inquiries, maintaining records, and
assisting shareholders in making redemptions, transfers, additional purchases
and exchanges and (ii) their assistance in distributing shares of each Series.
The fees payable under the A Plan, B Plan and C Plan are described in the
Prospectus. For the fiscal year ended December 31, 1997 fees paid to dealers
under the A Plans for the Equity Series and Income Series were $ 234,057 and
$498,360, respectively.
For the period ending December 31, 1997, fees paid to dealers under the B Plans
for the Equity Series and Income Series were $7,200 and $10,990, respectively.
For the period ending December 31, 1997 for the Equity Series and for the period
ending December 31, 1997 for the Income Series, fees paid to dealers under the C
Plans were $4,525 and $59,500, respectively.
Each Plan requires the directors to review, on a quarterly basis, written
reports of all amounts expended pursuant to the Plan and the purposes for which
such expenditures were made. Each Plan shall continue in effect only if its
continuance is specifically approved at least annually by vote of the directors,
including a majority of the directors who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related to the Plan ("outside directors"), cast in
person at a meeting called for the purpose of voting on the Plan. No Plan may be
amended to increase materially above the limits set forth therein the amount
spent for distribution expenses thereunder without approval by a majority of the
outstanding voting securities of the applicable Class and the approval of
13
<PAGE>
a majority of the directors, including a majority of the outside directors. Each
Plan may be terminated at any time by vote of a majority of the outside
directors or by vote of a majority of its Class's outstanding voting securities.
Contingent Deferred Sales Charges. A Contingent Deferred Sales Charge ("CDSC")
(i) applies regardless of class, (ii) will not apply to shares purchased by the
reinvestment of dividends or capital gains distributions; (iii) will be assessed
on the lesser of the net asset value of the shares at the time of redemption or
the original purchase price and (iv) will not be imposed on the amount of your
account value represented by the increase in net asset value over the initial
purchase price (including increases due to the reinvestment of dividends and
capital gains distributions) and upon early redemption of shares.
Class A Shares. As stated in the Prospectus, subject to certain exceptions, a
CDSC of 1% is imposed with respect to those Class A shares (or Class A shares of
another Lord Abbett-sponsored fund or series acquired through exchange of such
shares) on which the Fund has paid the one-time distribution fee of 1% if such
shares are redeemed out of the Lord Abbett-sponsored family of funds within a
period of 24 months from the end of the month in which the original sale
occurred.
Class B Shares. As stated in the Prospectus, subject to certain exceptions, if
Class B shares (or Class B shares of another Lord Abbett-sponsored fund or
series acquired through exchange of such shares) are redeemed out of the Lord
Abbett-sponsored family of funds for cash before the sixth anniversary of their
purchase, a CDSC will be deducted from the redemption proceeds. The Class B CDSC
is paid to Lord Abbett Distributor to reimburse its expenses, in whole or in
part, for providing distribution-related service to the Fund in connection with
the sale of Class B shares.
To determine whether the CDSC applies to a redemption, the Fund redeems shares
in the following order: (1) shares acquired by reinvestment of dividends and
capital gains distributions, (2) shares held on or after the sixth anniversary
of their purchase, and (3) shares held the longest before such sixth
anniversary.
The amount of the contingent deferred sales charge will depend on the number of
years since you invested and the dollar amount being redeemed, according to the
following schedule:
Anniversary of the Day on Contingent Deferred Sales Charge
Which the Purchase Order Was Accepted on Redemptions (As % of Amount
Subject to Charge)
Before the 1st.............................................5.0%
On the 1st, before the 2nd.................................4.0%
On the 2nd, before the 3rd.................................3.0%
On the 3rd, before the 4th.................................3.0%
On the 4th, before the 5th.................................2.0%
On the 5th, before the 6th ................................1.0%
On or after the 6th anniversary............................None
In the table, an "anniversary" is the 365th day subsequent to the acceptance of
a purchase order or a prior anniversary. All purchases are considered to have
been made on the business day on which the purchase order was accepted.
Class C Shares. As stated in the Prospectus, subject to certain exceptions, if
Class C shares are redeemed for cash before the first anniversary of their
purchase, the redeeming shareholder will be required to pay to the Fund on
behalf of Class C shares a CDSC of 1% of the lower of cost or the then net asset
value of Class C shares redeemed. If such shares are exchanged into the same
class of another Lord Abbett-sponsored fund and subsequently redeemed before the
first anniversary of their original purchase, the charge will be collected by
the other fund on behalf of the Series' Class C shares.
General. The percentage (1% in the case of Class A and C shares and 5% through
1% in the case of Class B shares) used to calculate CDSCs described above for
the Class A, Class B and Class C shares is sometimes hereinafter referred to as
the "Applicable Percentage."
14
<PAGE>
With respect to Class A and Class B shares, no CDSC is payable on redemptions by
participants or beneficiaries from employer-sponsored retirement plans under the
Internal Revenue Code for benefit payments due to plan loans, hardship
withdrawals, death, retirement or separation from service and for returns of
excess contributions to retirement plan sponsors. With respect to Class B
shares, no CDSC is payable for redemptions (i) in connection with Systematic
Withdrawal Plan and Div-Move services as described below under those headings,
(ii) in connection with mandatory distribution under 403(b) plans and IRAs and
(iii) in connection with death of the shareholder. In the case of Class A and
Class C shares, the CDSC is received by the Fund and is intended to reimburse
all or a portion of the amount paid by the Fund if the shares are redeemed
before the Fund has had an opportunity to realize the anticipated benefits of
having a long-term shareholder account in the Fund. In the case of Class B
shares, the CDSC is received by Lord Abbett Distributor and is intended to
reimburse its expenses of providing distribution-related service to the Fund
(including recoupment of the commission payments made) in connection with the
sale of Class B shares before Lord Abbett Distributor has had an opportunity to
realize its anticipated reimbursement by having such a long-term shareholder
account subject to the B Plan distribution fee.
The other funds and series which participate in the Telephone Exchange Privilege
(except (a) Lord Abbett U.S. Government Securities Money Market Fund, Inc.
("GSMMF"), (b) certain series of Lord Abbett Tax-Free Income Fund and Lord
Abbett Tax-Free Income Trust for which a Rule 12b-1 Plan is not yet in effect,
and (c) any authorized institution's affiliated money market fund satisfying
Lord Abbett Distributor as to certain omnibus account and other criteria,
hereinafter referred to as an "authorized money market fund" or "AMMF"
(collectively, the "Non-12b-1 Funds")) have instituted a CDSC for each class on
the same terms and conditions. No CDSC will be charged on an exchange of shares
of the same class between Lord Abbett funds or between such funds and AMMF. Upon
redemption of shares out of the Lord Abbett family of funds or out of AMMF, the
CDSC will be charged on behalf of and paid: (i) to the fund in which the
original purchase (subject to a CDSC) occurred, in the case of the Class A and
Class C shares and (ii) to Lord Abbett Distributor if the original purchase was
subject to a CDSC, in the case of the Class B shares. Thus, if shares of a Lord
Abbett fund are exchanged for shares of the same class of another such fund and
the shares of the same class tendered ("Exchanged Shares") are subject to a
CDSC, the CDSC will carry over to the shares of the same class being acquired,
including GSMMF and AMMF ("Acquired Shares"). Any CDSC that is carried over to
Acquired Shares is calculated as if the holder of the Acquired Shares had held
those shares from the date on which he or she became the holder of the Exchanged
Shares. Although the Non-12b-1 Funds will not pay a distribution fee on their
own shares, and will, therefore, not impose their own CDSC, the Non-12b-1 Funds
will collect the CDSC (a) on behalf of other Lord Abbett funds, in the case of
the Class A and Class C shares and (b) on behalf of Lord Abbett Distributor, in
the case of the Class B shares. Acquired Shares held in GSMMF and AMMF which are
subject to a CDSC will be credited with the time such shares are held in GSMMF
but will not be credited with the time such shares are held in AMMF. Therefore,
if your Acquired Shares held in AMMF qualified for no CDSC or a lower Applicable
Percentage at the time of exchange into AMMF, that Applicable Percentage will
apply to redemptions for cash from AMMF, regardless of the time you have held
Acquired Shares in AMMF.
In no event will the amount of the CDSC exceed the Applicable Percentage of the
lesser of (i) the net asset value of the shares redeemed or (ii) the original
cost of such shares (or of the Exchanged Shares for which such shares were
acquired). No CDSC will be imposed when the investor redeems (i) amounts derived
from increases in the value of the account above the total cost of shares being
redeemed due to increases in net asset value, (ii) shares with respect to which
no Lord Abbett fund paid a 12b-1 fee and, in the case of Class B shares, Lord
Abbett Distributor paid no sales charge or service fee (including shares
acquired through reinvestment of dividend income and capital gains
distributions) or (iii) shares which, together with Exchanged Shares, have been
held continuously for 24 months from the end of the month in which the original
sale occurred (in the case of Class A shares); for six years or more (in the
case of Class B shares) and for one year or more (in the case of Class C
shares). In determining whether a CDSC is payable, (a) shares not subject to the
CDSC will be redeemed before shares subject to the CDSC and (b) of the shares
subject to a CDSC, those held the longest will be the first to be redeemed.
Exchanges. The Prospectus briefly describes the Telephone Exchange Privilege.
You may exchange some or all of your shares of any class for those in the same
class of: (i) Lord Abbett-sponsored funds currently offered to the public with a
sales charge (front-end, back-end or level ), (ii) GSMMF or (iii) AMMF, to the
extent offers and sales may be made in your state. You should read the
prospectus of the other fund before exchanging. In establishing a new account by
exchange,
15
<PAGE>
shares of the Series being exchanged must have a value equal to at least the
minimum initial investment required for the other fund into which the exchange
is made.
Shareholders in other Lord Abbett-sponsored funds and AMMF have the same right
to exchange their shares for the corresponding class of each Series' shares.
Exchanges are based on relative net asset values on the day instructions are
received by the Fund in Kansas City if the instructions are received prior to
the close of the NYSE in proper form. No sales charges are imposed except in the
case of exchanges out of GSMMF or AMMF (unless a sales charge (front-end,
back-end or level) was paid on the initial investment in a Lord Abbett-sponsored
fund). Exercise of the exchange privilege will be treated as a sale for federal
income tax purposes, and, depending on the circumstances, a gain or loss may be
recognized. In the case of an exchange of shares that have been held for 90 days
or less where no sales charge is payable on the exchange, the original sales
charge incurred with respect to the exchanged shares will be taken into account
in determining gain or loss on the exchange only to the extent such charge
exceeds the sales charge that would have been payable on the acquired shares had
they been acquired for cash rather than by exchange. The portion of the original
sales charge not so taken into account will increase the basis of the acquired
shares.
Shareholders have the exchange privilege unless they refuse it in writing. You
should not view the exchange privilege as a means for taking advantage of
short-term swings in the market, and we reserve the right to terminate or limit
the privilege of any shareholder who makes frequent exchanges. We can revoke or
modify the privilege for all shareholders upon 60 days' prior notice. "Eligible
Funds" are AMMF and other Lord Abbett-sponsored funds which are eligible for the
exchange privilege, except Lord Abbett Series Fund ("LASF") which offers its
shares only in connection with certain variable annuity contracts, Lord Abbett
Equity Fund ("LAEF") which is not issuing shares, and series of Lord Abbett
Research Fund not offered to the general public ("LARF").
Statement of Intention. Under the terms of the Statement of Intention to invest
$50,000 or more over a 13-month period as described in the Prospectus, shares of
a Lord Abbett-sponsored fund (other than shares of LAEF, LASF, LARF, GSMMF and
AMMF, unless holdings in GSMMF and AMMF are attributable to shares exchanged
from a Lord Abbett-sponsored fund offered with a front-end, back-end or level
sales charge) currently owned by you are credited as purchases (at their current
offering prices on the date the Statement is signed) toward achieving the stated
investment and reduced initial sales charge for Class A shares. Class A shares
valued at 5% of the amount of intended purchases are escrowed and may be
redeemed to cover the additional sales charge payable if the Statement is not
completed. The Statement of Intention is neither a binding obligation on you to
buy, nor on the Fund to sell, the full amount indicated.
Rights of Accumulation. As stated in the Prospectus, purchasers (as defined in
the Prospectus) may accumulate their investment in Lord Abbett-sponsored funds
(other than LAEF, LARF, LASF, GSMMF, and AMMF unless holdings in GSMMF or AMMF
are attributable to shares exchanged from a Lord Abbett-sponsored fund offered
with a front-end, back-end or level sales charge) so that a current investment,
plus the purchaser's holdings valued at the current maximum offering price,
reach a level eligible for a discounted sales charge for Class A shares.
Net Asset Value Purchases of Class A Shares. As stated in the Prospectus, our
Class A shares may be purchased at net asset value by our directors, employees
of Lord Abbett, employees of our shareholder servicing agent and employees of
any securities dealer having a sales agreement with Lord Abbett who consents to
such purchases or by the director or custodian under any pension or
profit-sharing plan or Payroll Deduction IRA established for the benefit of such
persons or for the benefit of employees of any national securities trade
organization to which Lord Abbett belongs or any company with an account(s) in
excess of $10 million managed by Lord Abbett on a private-advisory-account
basis. For purposes of this paragraph, the terms "directors" and "employees"
include a trustee's or employee's spouse (including the surviving spouse of a
deceased director or employee). The terms "our directors" and "employees of Lord
Abbett" also include other family members and retired directors and employees.
Our Class A shares also may be purchased at net asset value (a) at $1 million or
more, (b) with dividends and distributions from Class A shares of other Lord
Abbett-sponsored funds, except for LARF, LAEF and LASF, (c) under the loan
feature of the Lord Abbett-sponsored prototype 403(b) plan for share purchases
representing the repayment of principal and interest, (d) by certain authorized
brokers, dealers, registered investment advisers or other financial institutions
who have entered
16
<PAGE>
into an agreement with Lord Abbett Distributor in accordance with certain
standards approved by Lord Abbett Distributor, providing specifically for the
use of our shares in particular investment products made available for a fee to
clients of such brokers, dealers, registered investment advisers and other
financial institutions, ("mutual fund wrap fee program"), (e) by employees,
partners and owners of unaffiliated consultants and advisors to Lord Abbett,
Lord Abbett Distributor or Lord Abbett-sponsored funds who consent to such
purchase if such persons provide service to Lord Abbett, Lord Abbett Distributor
or such funds on a continuing basis and are familiar with such funds, (f)
through Retirement Plans with at least 100 eligible employees, (g) our Class A
shares also may be purchased at net asset value, subject to appropriate
documentation, through a securities dealer where the amount invested represents
redemption proceeds from shares ("Redeemed Shares") of a registered open-end
management investment company not distributed or managed by Lord Abbett (other
than a money market fund), if such redemption has occurred no more than 60 days
prior to the purchase of our shares, the Redeemed Shares were held for at least
six months prior to redemption and the proceeds of redemption were maintained in
cash or a money market fund prior to purchase. Purchasers should consider the
impact, if any, of contingent deferred sales charges in determining whether to
redeem shares for subsequent investment in our Class A shares pursuant to the
purchase option in (g) above. Lord Abbett may suspend, change or terminate this
purchase option in (g) above at any time. We plan to terminate this net asset
value transfer privilege in (g) on June 1, 1997. Shares are offered at net asset
value to these investors for the purpose of promoting goodwill with employees
and others with whom Lord Abbett Distributor and/or the Fund has business
relationships.
Redemptions. A redemption order is in proper form when it contains all of the
information and documentation required by the order form or supplementally by
Lord Abbett Distributor or the Fund to carry out the order. The signature(s) and
any legal capacity of the signer(s) must be guaranteed by an eligible guarantor.
See the Prospectus for expedited redemption procedures.
The right to redeem and receive payment, as described in the Prospectus, may be
suspended if the NYSE is closed (except for weekends or customary holidays),
trading on the NYSE is restricted or the Securities and Exchange Commission
deems an emergency to exist.
Our Board of Directors may authorize redemption of all of the shares in any
account in which there are fewer than 25 shares. Before authorizing such
redemption, the Board must determine that it is in our economic best interest or
necessary to reduce disproportionately burdensome expenses in servicing
shareholder accounts. At least 6 month's prior written notice will be given
before any such redemption, during which time shareholders may avoid redemption
by bringing their accounts up to the minimum set by the Board.
Div-Move. Under the Div-Move service described in the Prospectus, you can invest
the dividends paid on your account of any class into an existing account of the
same class in any other Eligible Fund. The account must be either your account,
a joint account for you and your spouse, a single account for your spouse, or a
custodial account for your minor child under the age of 21. You should read the
prospectus of the other fund before investing.
Invest-A-Matic. The Invest-A-Matic method of investing in the Fund and/or any
other Eligible Fund is described in the Prospectus. To avail yourself of this
method you must complete the application form, selecting the time and amount of
your bank checking account withdrawals and the funds for investment, include a
voided, unsigned check and complete the bank authorization.
Systematic Withdrawal Plans. The Systematic Withdrawal Plan ("SWP") also is
described in the Prospectus. You may establish a SWP if you own or purchase
uncertificated shares having a current offering price value of at least $10,000.
Lord Abbett prototype retirement plans have no such minimum. With respect to a
SWP for Class B shares, the CDSC will be waived for redemptions of 12% or less
per year. For redemptions over 12% per year, the CDSC will apply to the entire
redemption. Therefore, please contact the Fund for assistance in minimizing the
CDSC in this situation. With respect to Class C shares, the CDSC will be waived
on and after the first anniversary of their purchase. The SWP involves the
planned redemption of shares on a periodic basis by receiving either fixed or
variable amounts at periodic intervals. Since the value of shares redeemed may
be more or less than their cost, gain or loss may be recognized for income tax
purposes on each
17
<PAGE>
periodic payment. Normally, you may not make regular investments at the same
time you are receiving systematic withdrawal payments because it is not in your
interest to pay a sales charge on new investments when in effect a portion of
that new investment is soon withdrawn. The minimum investment accepted while a
withdrawal plan is in effect is $1,000. The SWP may be terminated by you or by
us at any time by written notice.
Retirement Plans. The Prospectus indicates the types of retirement plans for
which Lord Abbett provides forms and explanations. Lord Abbett makes available
the retirement plan forms, including 401(k) plans and custodial agreements for
IRAs (Individual Retirement Accounts, including SIMPLE IRAs and Simplified
Employee Pensions), 403(b) plans and qualified pension and profit-sharing plans.
The forms name Investors Fiduciary Trust Company as custodian except in the case
of 401 (k) plans and contain specific information about the plans. Explanations
of the eligibility requirements, annual custodial fees and allowable tax
advantages and penalties are set forth in the relevant plan documents. Adoption
of any of these plans should be on the advice of your legal counsel or qualified
tax adviser.
6.
Past Performance
Each Series computes the average annual compounded rate of total return for each
Class of shares during specified periods that would equate the initial amount
invested to the ending redeemable value of such investment by adding one to the
computed average annual total return, raising the sum to a power equal to the
number of years covered by the computation and multiplying the result by one
thousand dollars, which represents a hypothetical initial investment. The
calculation assumes deduction of the maximum sales charge from the amount
invested and reinvestment of all income dividends and capital gains
distributions on the reinvestment dates at prices calculated as stated in the
Prospectus. The ending redeemable value is determined by assuming a complete
redemption at the end of the period(s) covered by the average annual total
return computation.
In calculating total returns for Class A shares, the current maximum sales
charge of 5.75% in the case of the Equity Series and 4.75% in the case of the
Income Series (as a percentage of the offering price) is deducted from the
initial investment (unless the return is shown at net asset value). For Class B
shares of each Series, the payment of the applicable CDSC (5.0% prior to the
first anniversary of purchase, 4.0% prior to the second anniversary of purchase,
3.0% prior to the third and fourth anniversaries of purchase, 2.0% prior to the
fifth anniversary of purchase, 1.0% prior to the sixth anniversary of purchase
and no CDSC on and after the sixth anniversary of purchase) is applied to each
Series' investment result for that class for the time period shown (unless the
total return is shown at net asset value). For Class C shares of each Series,
the 1.0% CDSC is applied to each Series' investment result for that class for
the time period shown prior to the first anniversary of purchase (unless the
total return is shown at net asset value). Total returns also assume that all
dividends and capital gains distributions during the period are reinvested at
net asset value per share, and that the investment is redeemed at the end of the
period.
Using the computation method described above, the Fund's average annual
compounded rates of total return for the last one-, five-year and
life-of-the-Series period ending on December 31, 1997 for the Equity Series were
as follows: 1.70%, 8.69% and 6.86% for the Fund's Class A shares, respectively.
For the Fund's Class B shares, the average annual compounded rates of total
return for the last one-year period and life-of-the-Series period ending on
December 31, 1997 were: 2.91% and 5.30%, respectively. For the Fund's Class C
shares, the average annual compounded rates of total return for the last
one-year period and life-of-the-Series period ending on December 31, 1997 were:
7.35% and 8.55%, respectively.
Using the computation method described above, the Fund's average annual
compounded rates of total return for the last one-, three- and five-year period
and life-of-the-series period ending on December 31, 1997 for the Income Series
were as follows: .70%, 5.85% and 7.87% for the Fund's Class A shares,
respectively. For the Fund's Class B shares, the average annual compounded rates
of total return for the last one-year period and life-of-the-Series period
ending on December 31, 1997 were: .65% and 3.44%, respectively. For the Fund's
Class C shares, the average annual compounded rates of total return for the last
one-year period and life-of-the-Series period ending on December 31, 1997 were:
3.49% and 7.52%, respectively.
18
<PAGE>
Our yield quotation is based on a 30-day period ended on a specified date,
computed by dividing our net investment income per share earned during the
period by our maximum offering price per share on the last day of the period.
This is determined by finding the following quotient: take each Class' dividends
and interest earned during the period minus its expenses accrued for the period
and divide by the product of (i) the average daily number of such Class' shares
outstanding during the period that were entitled to receive dividends and (ii)
such Class' maximum offering price per share on the last day of the period. To
this quotient add one. This sum is multiplied by itself five times. Then one is
subtracted from the product of this multiplication and the remainder is
multiplied by two. Yield for the Class A shares reflects the deduction of the
maximum initial sales charge, but may also be shown based on such Class' net
asset value per share. Yields for Class B and C shares do not reflect the
deduction of the CDSC. For the 30-day period ended December 31, 1997, the yield
for the Class A, B and C shares of the Income Series were 4.13%, 3.62% and
3.62%, respectively.
These figures represent past performance, and an investor should be aware that
the investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost. Therefore, there is no assurance that this performance
will be repeated in the future.
7.
Taxes
The value of any shares redeemed by a Series or repurchased or otherwise sold
may be more or less than a shareholder's tax basis in the shares at the time the
redemption, repurchase or sale is made. Any gain or loss will generally be
taxable for federal income tax purposes. Any loss realized on the sale,
redemption or repurchase of Series shares which a shareholder has held for six
months or less will be treated for tax purposes as a long-term capital loss to
the extent of any capital gains distributions which were received with respect
to such shares. Losses on the sale of stock or securities are not deductible if,
within a period beginning 30 days before the date of the sale and ending 30 days
after the date of the sale, the taxpayer acquires stock or securities that are
substantially identical.
Each Series of the Fund will be subject to a 4% non-deductible excise tax on
certain amounts not distributed (and not treated as having been distributed) on
a timely basis in accordance with a calendar year distribution requirement. Each
Series intends to distribute to shareholders each year an amount adequate to
avoid the imposition of such excise tax.
Dividends paid by the Series will qualify for the dividends-received deduction
for corporations to the extent that they are derived from dividends paid by
domestic corporations.
As described in the Prospectus, the Series may be subject to withholding taxes
and other taxes imposed by foreign countries. If, at the close of any fiscal
year, more than 50% of the assets of either Series of the Fund consist of stock
or securities of foreign corporations, such Series may elect to treat foreign
income taxes paid by the Series as having been paid directly by its
shareholders. If a Series qualifies for and makes such an election, the
shareholders of such Series will be required to (i) include in ordinary gross
income (in addition to taxable dividends actually received) their pro rata share
of foreign income taxes paid by such Series and (ii) treat such pro rata share
as foreign income taxes paid by them. Such shareholders may then use such pro
rata portion of foreign income taxes as foreign tax credits, subject to
applicable limitations, or, alternatively, deduct them in computing their
taxable income. Shareholders who do not itemize deductions for federal income
tax purposes will not be entitled to deduct their pro rata portion of foreign
taxes paid by a Series, although such shareholders will be required to include
their share of such taxes in gross income. Shareholders who claim a foreign tax
credit for foreign taxes paid by a Series may be required to treat a portion of
dividends received from such Series as separate category income for purposes of
computing the limitations on the foreign tax credit. Tax-exempt shareholders
will ordinarily not benefit from this election. Each year that a Series
qualifies for and makes the election described above, its shareholders will be
notified of the amount of (i) each shareholder's pro rata share of foreign
income taxes paid by such Series and (ii) the portion of dividends which
represents income from each foreign country.
Forward foreign currency contracts, foreign currency put and call options and
other investment techniques and practices which the Series may utilize, as
described above under "Investment Objectives and Policies," may create
"straddles" for United States federal income tax purposes and may affect the
character and timing of the recognition of gains and losses by a Series. Such
hedging transactions may increase the amount of short-term capital gain realized
by such Series, which is
19
<PAGE>
taxed as ordinary income when distributed to shareholders. Limitations imposed
by the Internal Revenue Code on regulated investment companies may restrict each
Series' ability to engage in transactions in options and forward contracts.
Gains and losses realized by a Series on certain transactions, including sales
of foreign debt securities and certain transactions involving foreign currency,
will be treated as ordinary income or loss for federal income tax purposes to
the extent, if any, that such gains or losses are attributable to changes in
exchange rates for foreign currencies. Accordingly, distributions taxable as
ordinary income will include the net amount, if any, of such foreign exchange
gains and will be reduced by the net amount, if any, of such foreign exchange
losses.
If a Series purchases shares in certain foreign investment entities, called
"passive foreign investment companies," that Series may be subject to United
States federal income tax on a portion of any "excess distribution" or gain from
the disposition of such shares, even if such income is distributed as a taxable
dividend by the Series to its shareholders. Additional charges in the nature of
interest may be imposed on either the Series or its shareholders with respect to
deferred taxes arising from such distributions or gains. If the Series were to
invest in a passive foreign investment company with respect to which the Series
elected to make a "qualified electing fund" election, in lieu of the foregoing
requirements, the Series might be required to include in income each year a
portion of the ordinary earnings and net capital gains of the qualified electing
fund, even if such amount were not distributed to the Series.
The foregoing discussion relates solely to U.S. federal income tax law as
applicable to United States persons (United States citizens or residents and
United States domestic corporations, partnerships, trusts and estates). Each
shareholder who is not a United States person should consult his tax adviser
regarding the U.S. and foreign tax consequences of the ownership of shares of a
Series, including a 30% (or lower treaty rate) United States withholding tax on
dividends representing ordinary income and net short-term capital gains, and the
applicability of United States gift and estate taxes to non-United States
persons who own Series shares.
8.
Information About the Fund
The directors, trustees and officers of Lord Abbett-sponsored mutual funds,
together with the partners and employees of Lord Abbett, are permitted to
purchase and sell securities for their personal investment accounts. In engaging
in personal securities transactions, however, such persons are subject to
requirements and restrictions contained in the Fund's Code of Ethics which
complies, in substance, with each of the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing. Among other things,
the Code requires that Lord Abbett partners and employees obtain advance
approval before buying or selling securities, submit confirmations and quarterly
transaction reports, and obtain approval before becoming a director of any
company; and it prohibits such persons from investing in a security 7 days
before or after any Lord Abbett-sponsored fund or Lord Abbett-managed account
considers a trade or trades in such security, from profiting on trades of the
same security within 60 days and from trading on material and non-public
information. The Code imposes certain similar requirements and restrictions on
the independent directors and trustees of each Lord Abbett-sponsored mutual fund
to the extent contemplated by the recommendations of the Advisory Group.
9.
Financial Statements
The financial statements for the fiscal year ended December 31, 1997 and the
report of Deloitte & Touche LLP, independent auditors, on such financial
statements contained in the 1997 Annual Report to Shareholders of Lord Abbett
Global Fund, Inc. are incorporated herein by reference to such financial
statements and report in reliance upon the authority of Deloitte & Touche LLP as
experts in auditing and accounting.
20
<PAGE>
Appendix
Moody's Investors Service, Inc.'s Corporate Bond Ratings
Aaa - Bonds which are rated Aaa are judged to be of the best quality and carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin, and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are unlikely to impair the fundamentally strong position of such
issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa - Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.
Ba - Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance and
other terms of the contract over any long period of time may be small.
Caa - Bonds that are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca - Bonds that are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C - Bonds that are rated C are the lowest-rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Standard & Poor's Corporation's Corporate Bond Ratings
AAA - This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA - Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong and in the majority of instances they
differ from AAA issues only in small degree.
A - Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
21
<PAGE>
BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
BB-B-0CCC-CC-C - Debt rated BB, B, CCC, CC and C is regarded as having
predominately speculative characteristics with respect to capacity to pay
interest and repay principal. 'BB' indicates the least degree of speculation and
'CCC' the highest. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
D - Debt rated 'D' is in payment default. The 'D' rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes such payments will
be made during such grace period. The 'D' rating also will be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.
22
<PAGE>
SUPPLEMENT TO THE MAY 1, 1998 PROSPECTUS
OF
LORD ABBETT GLOBAL FUND, INC.
Anything in the Prospectus to the contrary notwithstanding, E. Wayne Nordberg,
Executive Vice President of the Fund and Partner of Lord, Abbett & Co. ("Lord
Abbett"), serves as portfolio manager of the Equity Series. Mr. Nordberg has
over 36 years of investment experience and joined Lord Abbett in 1988.
Subject to approval by the Board of Directors and the Equity Series
shareholders, Lord Abbett plans to enter into an agreement (the "New Agreement")
with Fuji Investment Management Co. (Europe), Ltd. ("FIMCO-Europe") under which
FIMCO-Europe will provide Lord Abbett with advice with respect to that portion
of the Equity Series' assets invested in countries other than the United States
(the "foreign assets"). The Agreement contains the same terms and provides for
payment from Lord Abbett's resources of a sub-advisory fee on the same basis
(one-half of the fee paid to Lord Abbett) with respect to the Equity Series as
provided for in the former agreement with Dunedin Fund Managers Limited which
has ceased acting as sub-advisor. The New Agreement will not become effective
unless it is approved by the Board and the shareholders of the Equity Series.
However, in anticipation of such approval, FIMCO-Europe will be available as a
consultant to Lord Abbett without any compensation.
FIMCO-Europe is controlled by Fuji Investment Management Co. (Tokyo). Fuji
Bank Limited of Tokyo, Japan ("Fuji Bank") directly owns 40% of the outstanding
voting stock of FIMCO-Europe. Fuji Investment Management Co. (Tokyo) is an
affiliate of Fuji Bank. Lord Abbett indirectly owns a minor percentage of such
outstanding stock. As of June 1, 1997, FIMCO-Europe managed approximately $577
million which is invested globally. FIMCO-Europe will furnish Lord Abbett with
advice and recommendations with respect to the Equity Series' assets, including
advice about the allocation of investments among foreign securities markets and
foreign equity and debt securities and, subject to consultation with Lord
Abbett, advice as to cash holdings and what securities in the portfolio should
be purchased, held or disposed of. Additionally, FIMCO-Europe will give advice
with respect to foreign currency matters.
Effective Period: May 1, 1998 through June 14, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant certifies that it meets all the requirements
for effectiveness of this Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Registration Statement
and/or any amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on the
30th day of April, 1998.
LORD ABBETT GLOBAL FUND, INC.
By /s/ Robert S. Dow
Robert S. Dow,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
/s/ Robert S. Dow
Chairman, President
and Director 4/30/98
----------------------- -------
Robert S. Dow (Title) (Date)
/s/ Keith O'Connor
Vice President and
Chief Financial Officer 4/30/98
----------------------- -------
Keith O'Connor (Title) (Date)
/s/ E. Thayer Bigelow
Director 4/30/98
----------------------- -------
E. Thayer Bigelow (Title) (Date)
/s/ Stewart S. Dixon
Director 4/30/98
----------------------- -------
Stewart S. Dixon (Title) (Date)
/s/ E. Wayne Nordberg
Director 4/30/98
----------------------- -------
E. Wayne Nordberg (Title) (Date)
/s/ John C. Jansing
Director 4/30/98
----------------------- -------
John C. Jansing (Title) (Date)
/s/ C. Alan MacDonald
Director 4/30/98
----------------------- -------
C. Alan MacDonald (Title) (Date)
/s/ Hansel B. Millican, Jr.
Director 4/30/98
----------------------- -------
Hansel B. Millican, Jr. (Title) (Date)
/s/ Thomas J. Neff
Director 4/30/98
----------------------- -------
Thomas J. Neff (Title) (Date)
<PAGE>
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
OF
LORD ABBETT BOND-DEBENTURE FUND, INC.
LORD ABBETT BOND-DEBENTURE FUND, INC., a Maryland corporation having its
principal office c/o The Prentice-Hall Corporation System, Maryland, 11 Chase
Street, Baltimore, Maryland 21202 (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland, that:
FIRST: The Corporation presently has authority to issue 1,000,000,000
shares of capital stock, of the par value $.001 each, having an aggregate par
value of $1,000,000. The Board of Directors has previously classified and
designated 460,000,000 authorized shares as Class A shares, 160,000,000
authorized shares as Class B shares, 80,000,000 authorized shares as Class C
shares and 300,000,000 authorized shares as Class Y shares..
SECOND: Pursuant to the authority of the Board of Directors to classify
and reclassify unissued shares of stock of the Corporation and to classify a
series into one or more classes of such series, the Board of Directors hereby
classifies and reclassifies 160,000,000 authorized but unissued Class A shares
as Class P shares, thus leaving 300,000,000 authorized shares as Class A shares.
THIRD: Subject to the power of the Board of Directors to classify and
reclassify unissued shares, all shares of the Corporation's Class P stock shall
be invested in the same investment portfolio of the Corporation as the Class A,
Class B, Class C and Class Y stock and shall have the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption set forth in Article V of
the Articles of Incorporation of the Corporation (hereafter called the
"Articles") and shall be subject to all other provisions of the Articles
relating to stock of the Corporation generally.
FOURTH: The Class P shares aforesaid have been duly classified by the
Board of Directors under the authority contained in the Articles.
<PAGE>
IN WITNESS WHEREOF, Lord Abbett Bond-Debenture Fund, Inc. has caused these
presents to be signed in its name and on its behalf by its Vice President and
witnessed by its Assistant Secretary on April 6, 1998.
LORD ABBETT BOND-DEBENTURE FUND, INC.
By ___/s/ Thomas F. Konop
Thomas F. Konop
Vice President
WITNESS:
/s/ Lawrence H. Kaplan
_______________________________________
Lawrence H. Kaplan
Vice President and Assistant Secretary
2
<PAGE>
THE UNDERSIGNED, Vice President of LORD ABBETT BOND-DEBENTURE FUND, INC.,
who executed on behalf of said Corporation the foregoing Articles Supplementary,
of which this certificate is made a part, hereby acknowledges, in the name and
on behalf of said Corporation, the foregoing Articles Supplementary to be the
corporate act of said Corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the authorization and approval thereof are true in all material
respects under the penalties of perjury.
/s/ Thomas F. Konop
Thomas F. Konop
Vice President
3
Exhibit 16
Lord Abbett Global Fund, Inc.
Post Effective Amendment No.11 on Form N-1A
Income Series -Class A shares
Fiscal Year Ending December 31, 1997
1 Year 5 Year 10 Years
------ ------ --------
Initial Investment $ 1,000 $ 1,000 $ 1,000
Dividend by Initial Offering Price $ 8.76 $ 9.31 $ 10.00
------- ------- -----------
Equals Shares Purchased 114.155 107.411 100.000
Plus Shares Acquired through Dividend
and Capital Gains Reinvestment 7.962 56.162 148.060
------- ------- -----------
Equals Shares held at Ending Peiord Date 122.117 163.573 248.060
Multiplied by Net Asset Value at Ending
Period Date 8.09 8.09 8.09
------- ------- -----------
Equals Ending Value before Deduction of
CDSC at Period End Date $ 993 $ 1,329 $ 2,016
Less Deferred Sales Charge 0 0 0
------- ------- -----------
Equals Ending Redeemable Value(ERV) at
Period End Date $ 993 $ 1,329 $ 2,016
Divide ERV by $1000 $ 0.993 $ 1.329 $ 2.016
------- ------- -----------
Subtract 1 ($0.007) $ 0.329 $ 1.016
------- ------- -----------
Expressed as a Percentage-Equals the Aggregate
Total Return for the Period -0.70% 32.90% 101.60%
Divide ERV by $1000 0.993 1.329 2.016
------- ------- -----------
Raise to the power of 1 0.2 0.107988166
------- ------- -----------
Equals 0.993 1.059 1.079
Subtract 1 (0.007) 0.059 0.079
------- ------- -----------
Expressed as a Percentage-Equals the Average
Annualized Total Return for the Period -0.70% 5.85% 7.87%
<PAGE>
Income Series - Class B shares
Fiscal Year Ending December 31, 1997
1 Year Life of Series
------ --------------
Initial Investment $ 1,000 $ 1,000
Dividend by Initial Offering Price $ 8.34 $ 8.24
------- -----------
Equals Shares Purchased 119.904 121.359
Plus Shares Acquired through Dividend
and Capital Gains Reinvestment 7.506 13.174
------- -----------
Equals Shares held at Ending Peiord Date 127.410 134.533
Multiplied by Net Asset Value at Ending
Period Date 8.09 8.09
------- -----------
Equals Ending Value before Deduction of
CDSC at Period End Date $ 1,035 1,093
Less Deferred Sales Charge 4% 4%
------- -----------
Equals Ending Redeemable Value(ERV)at
Period End Date $993.48 $ 1,049.01
Divide ERV by $1000 $ 0.994 $ 1.049
------- -----------
Subtract 1 ($0.006) $ 0.049
------- -----------
Expressed as a Percentage-Equals the Aggregate
Total Return for the Period -0.65% 4.90%
Divide ERV by $1000 0.994 1.049
------- -----------
Raise to the power of 1 0.704633205
------- -----------
Equals 0.994 1.034
Subtract 1 (0.007) 0.034
------- -----------
Expressed as a Percentage-Equals the Average
Annualized Total Return for the Period -0.65% 3.44%
<PAGE>
Income Series - Class C shares
Fiscal Year Ending December 31, 1997
1 Year Life of Series
------ --------------
Initial Investment $ 1,000 $ 1,000
Dividend by Initial Offering Price $ 8.34 $ 8.12
------- -----------
Equals Shares Purchased 119.904 123.153
Plus Shares Acquired through Dividend
and Capital Gains Reinvestment 7.503 13.727
------- -----------
Equals Shares held at Ending Peiord Date 127.407 136.880
Multiplied by Net Asset Value at Ending
Period Date 8.09 8.09
------- -----------
Equals Ending Value before Deduction of
CDSC at Period End Date $ 1,035 1,112
Less Deferred Sales Charge 0 0
------- -----------
Equals Ending Redeemable Value(ERV)at
Period End Date $ 1,035 $ 1,112
Divide ERV by $1000 $ 1.035 $ 1.112
------- -----------
Subtract 1 $ 0.035 $ 0.112
------- -----------
Expressed as a Percentage-Equals the Aggregate
Total Return for the Period 3.49% 11.17%
Divide ERV by $1000 1.035 1.112
------- -----------
Raise to the power of 1 0.682242991
------- -----------
Equals 1.035 1.075
Subtract 1 0.035 0.075
------- -----------
Expressed as a Percentage-Equals the Average
Annualized Total Return for the Period 3.49% 7.51%
<PAGE>
Lord Abbett Global Fund, Inc.
Post Effective Amendment No. 11 on Form N-1A
Equity Series - Class A shares
Fiscal Year Ending December 31, 1997
1 Year 5 Year 10 Years
------ ------ --------
Initial Investment $ 1,000 $ 1,000 $ 1,000
Dividend by Initial Offering Price $ 13.32 $ 11.12 $ 9.84
------- ------- -----------
Equals Shares Purchased 75.075 89.928 101.626
Plus Shares Acquired through Dividend
and Capital Gains Reinvestment 9.152 35.634 51.312
------- ------- -----------
Equals Shares held at Ending Peiord Date 84.227 125.562 152.938
Multiplied by Net Asset Value at Ending
Period Date 12.08 12.08 12.08
------- ------- -----------
Equals Ending Value before Deduction of
CDSC at Period End Date $ 1,017 $ 1,517 $ 1,847
Less Deferred Sales Charge 0 0 0
------- ------- -----------
Equals Ending Redeemable Value(ERV)at
Period End Date $ 1,017 $ 1,517 $ 1,847
Divide ERV by $1000 $ 1.017 $ 1.517 $ 1.847
------- ------- -----------
Subtract 1 $ 0.017 $ 0.517 $ 0.847
------- ------- -----------
Expressed as a Percentage-Equals the Aggregate
Total Return for the Period 1.70% 51.70% 84.70%
Divide ERV by $1000 1.017 1.517 1.847
-------
Raise to the power of 1 0.2 0.107988166
------- ------- -----------
Equals 1.017 1.087 1.069
Subtract 1 0.017 0.087 0.069
------- ------- -----------
Expressed as a Percentage-Equals the Average
Annualized Total Return for the Period 1.70% 8.69% 6.86%
<PAGE>
Equity Series - Class B shares
Fiscal Year Ending December 31, 1997
1 Year Life of Series
------ --------------
Initial Investment $ 1,000 $ 1,000
Dividend by Initial Offering Price $ 12.53 $ 12.31
------- -----------
Equals Shares Purchased 79.808 81.235
Plus Shares Acquired through Dividend
and Capital Gains Reinvestment 9.297 11.926
------- -----------
Equals Shares held at Ending Peiord Date 89.105 93.161
Multiplied by Net Asset Value at Ending
Period Date 12.03 12.03
------- -----------
Equals Ending Value before Deduction of
CDSC at Period End Date $ 1,072 1,121
Less Deferred Sales Charge 4% 4%
------- -----------
Equals Ending Redeemable Value(ERV)at
Period End Date $1,029.06 $ 1,075.90
Divide ERV by $1000 $ 1.029 $ 1.076
------- -----------
Subtract 1 $ 0.029 $ 0.076
------- -----------
Expressed as a Percentage-Equals the Aggregate
Total Return for the Period 2.91% 7.60%
Divide ERV by $1000 1.029 1.076
------- -----------
Raise to the power of 1 0.704633205
------- -----------
Equals 1.029 1.053
Subtract 1 0.029 0.053
------- -----------
Expressed as a Percentage-Equals the Average
Annualized Total Return for the Period 2.91% 5.30%
<PAGE>
Equity Series - Class C shares
Fiscal Year Ending December 31, 1997
1 Year Life of Series
------ --------------
Initial Investment $ 1,000 $ 1,000
Dividend by Initial Offering Price $ 12.54 $ 12.31
------- -----------
Equals Shares Purchased 79.745 81.235
Plus Shares Acquired through Dividend
and Capital Gains Reinvestment 9.339 11.976
------- -----------
Equals Shares held at Ending Peiord Date 89.084 93.211
Multiplied by Net Asset Value at Ending
Period Date 12.05 12.05
------- -----------
Equals Ending Value before Deduction of
CDSC at Period End Date $ 1,073 1,123
Less Deferred Sales Charge 0 0
------- -----------
Equals Ending Redeemable Value(ERV)at
Period End Date $ 1,073 $ 1,123
Divide ERV by $1000 $ 1.073 $ 1.123
------- -----------
Subtract 1 $ 0.073 $ 0.123
------- -----------
Expressed as a Percentage-Equals the Aggregate
Total Return for the Period 7.35% 12.32%
Divide ERV by $1000 1.073 1.123
------- -----------
Raise to the power of 1 0.704633205
------- -----------
Equals 1.073 1.085
Subtract 1 0.073 0.085
------- -----------
Expressed as a Percentage-Equals the Average
Annualized Total Return for the Period 7.35% 8.55%
<PAGE>
Calculation of yield appearing in the Statement of Additional Information for
the Income Series - Class A shares of Lord Abbett Global Fund, Inc.
Post-Effective amendment No. 11 on Form N-1A.
YIELD FORMULA
For the 30 Days
Ended December 30, 1997
YIELD = 2[(a-b+1))^6-1] = 4.13
cd
Where: a = Series dividends and interest earned during the period in the
amount of $669,652
b = Series expenses accrued for the period (net of reimbursements)
in the amount of $155,363
c = the average daily number of Series shares outstanding during
the period that were entitled to receive dividends were
17,744,923
d = the maximum offering price per Series share on the last day of
the period was $8.49
<PAGE>
Calculation of yield appearing in the Statement of Additional Information for
the Income Series - Class B shares of Lord Abbett Global Fund, Inc.
Post-Effective amendment No.11 on Form N-1A.
YIELD FORMULA
For the 30 Days
Ended December 30, 1997
YIELD = 2[(a-b+1))^6-1] = 3.62
cd
Where: a = Fund dividends and interest earned during the period in the
amount of $6,243
b = Fund expenses accrued for the period (net of reimbursements)
in the amount of $2231
c = the average daily number of Fund shares outstanding during the
period that were entitled to receive dividends were 165,442
d = the maximum offering price per Fund share on the last day of
the period was $8.09
<PAGE>
Calculation of yield appearing in the Statement of Additional Information for
the Income Series - Class C shares of Lord Abbett Global Fund, Inc.
Post-Effective amendment No.11 on Form N-1A.
YIELD FORMULA
For the 30 Days
Ended December 30, 1997
YIELD = 2[(a-b+1))^6-1] = 3.62
cd
Where: a = Fund dividends and interest earned during the period in the
amount of $24,192
b = Fund expenses accrued for the period (net of reimbursements)
in the amount of $8,682
c = the average daily number of Fund shares outstanding during the
period that were entitled to receive dividends were 641,058
d = the maximum offering price per Fund share on the last day of
the period was $8.09
CONSENT OF INDEPENDENT AUDITORS
Lord Abbett Global Fund, Inc.:
We consent to the incorporation by reference in Post-Effective Amendment 11 to
Registration Statement No. 33-20309 of our report dated February 6, 1998
appearing in the annual report to shareholders and to the reference to us under
the caption "Financial Highlights" in the Prospectus and to the references to us
under the captions "Investment Advisory and Other Services" and "Financial
Statements" in the Statement of Additional Information, both of which are part
of such Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 27, 1998
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000829901
<NAME> LORD ABBETT GLOBAL FUND, INC.
<SERIES>
<NUMBER> 011
<NAME> EQUITY SERIES - CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 73547462
<INVESTMENTS-AT-VALUE> 79499253
<RECEIVABLES> 412034
<ASSETS-OTHER> 146978
<OTHER-ITEMS-ASSETS> 1350000
<TOTAL-ASSETS> 81408265
<PAYABLE-FOR-SECURITIES> 293483
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 294455
<TOTAL-LIABILITIES> 587938
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 74814132
<SHARES-COMMON-STOCK> 6512593
<SHARES-COMMON-PRIOR> 7301977
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 1485648
<ACCUMULATED-NET-GAINS> 199335
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5951791
<NET-ASSETS> 80820327
<DIVIDEND-INCOME> 1551067
<INTEREST-INCOME> 193678
<OTHER-INCOME> 0
<EXPENSES-NET> 1267887
<NET-INVESTMENT-INCOME> 476869
<REALIZED-GAINS-CURRENT> 8643260
<APPREC-INCREASE-CURRENT> 2530998
<NET-CHANGE-FROM-OPS> 6587668
<EQUALIZATION> 5192
<DISTRIBUTIONS-OF-INCOME> 364730
<DISTRIBUTIONS-OF-GAINS> 8064753
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1095651
<NUMBER-OF-SHARES-REDEEMED> 2559577
<SHARES-REINVESTED> 674542
<NET-CHANGE-IN-ASSETS> (9289229)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 109428
<OVERDISTRIB-NII-PRIOR> 25167
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 632708
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1267887
<AVERAGE-NET-ASSETS> 84361085
<PER-SHARE-NAV-BEGIN> 12.55
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> .90
<PER-SHARE-DIVIDEND> .33
<PER-SHARE-DISTRIBUTIONS> 1.11
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.08
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000829901
<NAME> LORD ABBETT GLOBAL FUND, INC.
<SERIES>
<NUMBER> 012
<NAME> EQUITY SERIES - CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 73547462
<INVESTMENTS-AT-VALUE> 79499253
<RECEIVABLES> 412034
<ASSETS-OTHER> 146978
<OTHER-ITEMS-ASSETS> 1350000
<TOTAL-ASSETS> 81408265
<PAYABLE-FOR-SECURITIES> 293483
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 294455
<TOTAL-LIABILITIES> 587938
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 74814132
<SHARES-COMMON-STOCK> 111351
<SHARES-COMMON-PRIOR> 19363
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 26945
<ACCUMULATED-NET-GAINS> 199335
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5951791
<NET-ASSETS> 80820327
<DIVIDEND-INCOME> 13608
<INTEREST-INCOME> 1476
<OTHER-INCOME> 0
<EXPENSES-NET> 16230
<NET-INVESTMENT-INCOME> (1147)
<REALIZED-GAINS-CURRENT> 8643260
<APPREC-INCREASE-CURRENT> 2530998
<NET-CHANGE-FROM-OPS> 6587668
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 135059
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 105825
<NUMBER-OF-SHARES-REDEEMED> 25186
<SHARES-REINVESTED> 11349
<NET-CHANGE-IN-ASSETS> (9289229)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 109428
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5477
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 16230
<AVERAGE-NET-ASSETS> 730363
<PER-SHARE-NAV-BEGIN> 12.53
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> .89
<PER-SHARE-DIVIDEND> .26
<PER-SHARE-DISTRIBUTIONS> 1.11
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.03
<EXPENSE-RATIO> 2.22
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000829901
<NAME> LORD ABBETT GLOBAL FUND, INC.
<SERIES>
<NUMBER> 013
<NAME> EQUITY SERIES - CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 73547462
<INVESTMENTS-AT-VALUE> 79499253
<RECEIVABLES> 412034
<ASSETS-OTHER> 146978
<OTHER-ITEMS-ASSETS> 1350000
<TOTAL-ASSETS> 81408265
<PAYABLE-FOR-SECURITIES> 293483
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 294455
<TOTAL-LIABILITIES> 587938
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 74814132
<SHARES-COMMON-STOCK> 68478
<SHARES-COMMON-PRIOR> 21106
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 16437
<ACCUMULATED-NET-GAINS> 199335
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5951791
<NET-ASSETS> 80820327
<DIVIDEND-INCOME> 9390
<INTEREST-INCOME> 1070
<OTHER-INCOME> 0
<EXPENSES-NET> 10777
<NET-INVESTMENT-INCOME> (317)
<REALIZED-GAINS-CURRENT> 8643260
<APPREC-INCREASE-CURRENT> 2530998
<NET-CHANGE-FROM-OPS> 6587668
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 397
<DISTRIBUTIONS-OF-GAINS> 82246
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 54661
<NUMBER-OF-SHARES-REDEEMED> 14168
<SHARES-REINVESTED> 6879
<NET-CHANGE-IN-ASSETS> (9289229)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 109428
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3799
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 10377
<AVERAGE-NET-ASSETS> 506532
<PER-SHARE-NAV-BEGIN> 12.54
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> .90
<PER-SHARE-DIVIDEND> .27
<PER-SHARE-DISTRIBUTIONS> 1.11
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.05
<EXPENSE-RATIO> 2.05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000829901
<NAME> LORD ABBETT GLOBAL FUND, INC.
<SERIES>
<NUMBER> 021
<NAME> INCOME SERIES - CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 158948733
<INVESTMENTS-AT-VALUE> 158538224
<RECEIVABLES> 167192343
<ASSETS-OTHER> 233598
<OTHER-ITEMS-ASSETS> 1299657
<TOTAL-ASSETS> 327263822
<PAYABLE-FOR-SECURITIES> 177355833
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1123062
<TOTAL-LIABILITIES> 178478895
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 175147837
<SHARES-COMMON-STOCK> 17586613
<SHARES-COMMON-PRIOR> 23335704
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 3915710
<ACCUMULATED-NET-GAINS> (25034351)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 410509
<NET-ASSETS> 148784927
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 12444785
<OTHER-INCOME> 0
<EXPENSES-NET> 1785383
<NET-INVESTMENT-INCOME> 10321722
<REALIZED-GAINS-CURRENT> (386507)
<APPREC-INCREASE-CURRENT> (4218698)
<NET-CHANGE-FROM-OPS> 6123313
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 10676319
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 1201001
<NUMBER-OF-SHARES-SOLD> 604529
<NUMBER-OF-SHARES-REDEEMED> 7011721
<SHARES-REINVESTED> 658101
<NET-CHANGE-IN-ASSETS> (47485329)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (24334067)
<OVERDISTRIB-NII-PRIOR> 2359935
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 821119
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1785383
<AVERAGE-NET-ASSETS> 164223831
<PER-SHARE-NAV-BEGIN> 8.34
<PER-SHARE-NII> .51
<PER-SHARE-GAIN-APPREC> (.18)
<PER-SHARE-DIVIDEND> .51
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> .07
<PER-SHARE-NAV-END> 8.09
<EXPENSE-RATIO> 1.09
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000829901
<NAME> LORD ABBETT GLOBAL FUND, INC.
<SERIES>
<NUMBER> 022
<NAME> INCOME SERIES - CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 158948733
<INVESTMENTS-AT-VALUE> 158538224
<RECEIVABLES> 167192343
<ASSETS-OTHER> 233598
<OTHER-ITEMS-ASSETS> 1299657
<TOTAL-ASSETS> 327263822
<PAYABLE-FOR-SECURITIES> 177355833
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1123062
<TOTAL-LIABILITIES> 178478895
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 175147837
<SHARES-COMMON-STOCK> 166168
<SHARES-COMMON-PRIOR> 69521
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 9652
<ACCUMULATED-NET-GAINS> (25034351)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 418509
<NET-ASSETS> 148784927
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 83134
<OTHER-INCOME> 0
<EXPENSES-NET> 19567
<NET-INVESTMENT-INCOME> 61615
<REALIZED-GAINS-CURRENT> (386507)
<APPREC-INCREASE-CURRENT> (4218698)
<NET-CHANGE-FROM-OPS> 6123313
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 60905
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 9781
<NUMBER-OF-SHARES-SOLD> 118462
<NUMBER-OF-SHARES-REDEEMED> 26822
<SHARES-REINVESTED> 5007
<NET-CHANGE-IN-ASSETS> (47485329)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (24334067)
<OVERDISTRIB-NII-PRIOR> 813
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5530
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 19567
<AVERAGE-NET-ASSETS> 1105911
<PER-SHARE-NAV-BEGIN> 8.34
<PER-SHARE-NII> .45
<PER-SHARE-GAIN-APPREC> (.18)
<PER-SHARE-DIVIDEND> .46
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> .06
<PER-SHARE-NAV-END> 8.09
<EXPENSE-RATIO> 1.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000829901
<NAME> LORD ABBETT GLOBAL FUND, INC.
<SERIES>
<NUMBER> 023
<NAME> INCOME SERIES - CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 158948733
<INVESTMENTS-AT-VALUE> 158538224
<RECEIVABLES> 167192343
<ASSETS-OTHER> 233598
<OTHER-ITEMS-ASSETS> 1299657
<TOTAL-ASSETS> 327263822
<PAYABLE-FOR-SECURITIES> 177355833
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1123062
<TOTAL-LIABILITIES> 178478895
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 175147837
<SHARES-COMMON-STOCK> 631205
<SHARES-COMMON-PRIOR> 863282
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 269719
<ACCUMULATED-NET-GAINS> (25034351)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 410509
<NET-ASSETS> 148784927
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 466071
<OTHER-INCOME> 0
<EXPENSES-NET> 107291
<NET-INVESTMENT-INCOME> 345181
<REALIZED-GAINS-CURRENT> (386507)
<APPREC-INCREASE-CURRENT> (4218698)
<NET-CHANGE-FROM-OPS> 6123313
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 360770
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 38752
<NUMBER-OF-SHARES-SOLD> 95470
<NUMBER-OF-SHARES-REDEEMED> 353771
<SHARES-REINVESTED> 26224
<NET-CHANGE-IN-ASSETS> (47485329)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (24334067)
<OVERDISTRIB-NII-PRIOR> 213394
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 30702
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 107291
<AVERAGE-NET-ASSETS> 6140360
<PER-SHARE-NAV-BEGIN> 8.34
<PER-SHARE-NII> .45
<PER-SHARE-GAIN-APPREC> (.18)
<PER-SHARE-DIVIDEND> .46
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> .06
<PER-SHARE-NAV-END> 8.09
<EXPENSE-RATIO> 1.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
