Lord Abbett
Global Fund, Inc.
Equity Series
Income Series
Prospectus
May 1, 1999
(As Revised August 1, 1999)
[LOGO]
As with all mutual funds, the Securities and Exchange Commission does not
guarantee that the information in this prospectus is accurate or complete, and
it has not judged these funds for investment merit. It is a criminal offense to
state otherwise.
Class P shares of the fund are neither offered to the general public nor
available in all states. Please call 800-821-5129 for further information.
<PAGE>
Table of Contents
The Funds Page
Information about the goal/ Equity Fund 2
strategy, main risks, past Income Fund 5
performance, fees and expenses
Your Investment
Information for managing Purchases 9
your fund account Opening Your Account 11
Redemptions 12
Distributions and Taxes 12
Services For Fund Investors 13
Sales Charges and Service Fees 14
Management 15
For More Information
How to learn more Other Investment Techniques 16
about the funds Glossary of Shaded Terms 17
Recent Performance 19
Financial Information
Financial highlights and line Equity Fund 20
graph comparison of each fund Income Fund 22
Compensation For Your Dealer 24
How to learn more about the Back Cover
funds and other Lord Abbett funds
<PAGE>
Equity Fund
GOAL/STRATEGY
The fund seeks long-term growth of capital and income consistent with
reasonable risk. The production of current income is a secondary
consideration.
To pursue its goal, the fund primarily invests in the common stocks of
domestic and foreign companies in sound financial condition which are
expected to show above-average price appreciation. The fund attempts to
invest in companies well positioned within their industries that represent
the best value. We generally try to sell securities we believe to be
overvalued and reinvest the proceeds in other securities we deem to offer
better value. Under normal circumstances, the fund 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).
The fund may take a temporary defensive position by investing in domestic
securities, in securities primarily traded in fewer than three foreign
countries, or in debt securities with more than 35% of the fund's total
assets. This could prevent the fund from realizing its investment
objective.
MAIN RISKS
While stocks have historically been a leading choice of long-term
investors, they fluctuate in price. In addition, because the fund invests
in foreign securities, the fund faces certain risks that are not normally
involved in investments in U. S. securities. Foreign securities are not
subject to the same degree of regulation as securities traded in the U. S.
markets, and there may be less reliable information about the issuers of
the securities. Foreign securities may experience greater price
fluctuations and be less liquid than U. S. securities. In addition, there
is the risk that unfavorable changes in currency exchange rates could
reduce the fund's share price. The fund may, but is not required to,
attempt to hedge these currency risks through the use of foreign currency
forwards and options. Such hedges, if used, may not work as planned,
however. Other concerns include political and social instability,
expropriations, higher transaction costs, currency fluctuations,
nondeductible withholding taxes and different settlement practices.
An investment in the fund is not a bank deposit. It is not FDIC-insured or
governmentendorsed. It is not a complete investment program. You could lose
money in this fund.
We or the fund refers to Equity Series ("Equity Fund"), a series of Lord Abbett
Global Fund, Inc. (the "company"), which operates under the supervision of the
company's Board, with the advice of Lord, Abbett & Co. (" Lord Abbett"), its
investment manager.
About the fund. The fund is a professionally managed portfolio primarily holding
securities purchased with the pooled money of investors. It strives to reach its
stated goal, although as with all funds, it cannot guarantee results.
You should read this entire prospectus, including "Other Investment Techniques,"
which concisely describes the other investment strategies, and their risks, used
by the fund.
2 The Funds
<PAGE>
Equity Fund Symbols: Class A -LAGEX
Class B -LAGBX
Class C -LAGCX
PAST PERFORMANCE
The information below provides some indication of the risks of investing in
the fund by showing changes in the fund's class A shares' performance from
calendar year to calendar year and by showing how the fund's average annual
returns compare with those of a broad measure of market performance. Past
performance is not a prediction of future results.
[GRAPHIC OMMITTED]
Best Quarter 4th Q '98 19.08%
Worst Quarter 3rd Q '98 -18.35%
The table below shows a comparison of the fund's class A, B and C average
annual total return to that of the Morgan Stanley World Index (" MSWI").
Fund returns assume reinvestment of all dividends and distributions and
payment of the maximum applicable front-end or deferred sales charge. All
periods end on December 31, 1998.
Class 1 Year 5 Years 10 Years Since Inception (i) MSWI (ii)
A 2.78% 5.58% 6.80% 7.07% 12.10% (iii)
- --------------------------------------------------------------------------------
B 3.37% -- -- 7.27% 21.63% (iv)
- --------------------------------------------------------------------------------
C 7.36% -- -- 8.47% 21.63% (iv)
- --------------------------------------------------------------------------------
MSWI 24.80% 16.19% 11.21% -- --
- --------------------------------------------------------------------------------
(i) The dates of inception for each class are: A -9/30/88; B -8/1/96; and C
-8/1/96.
(ii) Performance for the Morgan Stanley World Index does not reflect transaction
costs or management fees.
(iii) Represents total returns for the period 9/30/88 to 12/31/98, to correspond
with class A inception date.
(iv) Represents total returns for the period 8/31/96 to 12/31/98, to correspond
with class B and C inception date.
The Funds 3
<PAGE>
Equity Fund Symbols: Class A -LAGEX
Class B -LAGBX
Class C -LAGCX
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Fee table
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Class B Class C Class P
Shareholder Fees (Fees paid directly from your investment)
Maximum Sales Charge on Purchases
- ------------------------------------------------------------------------------------------
(as a % of offering price) 5.75% none none none
- ------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (See "Purchases") none 5.00% (1) 1.00% none
- ------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (Expenses deducted from fund assets)
(as a % of average net assets) (2)
- ------------------------------------------------------------------------------------------
Management Fees (See "Management") 0.75% 0.75% 0.75% 0.75%
- ------------------------------------------------------------------------------------------
Distribution and Service (12b-1) Fees (3) 0.35% 1.00% 1.00% 0.45%
- ------------------------------------------------------------------------------------------
Other Expenses 0.62% 0.62% 0.62% 0.62%
- ------------------------------------------------------------------------------------------
Total Operating Expenses 1.72% 2.37% 2.37% 1.82%
- ------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Expense example
- --------------------------------------------------------------------------------
This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment at maximum sales charge, if any, 5% total return each year and no
changes in expenses. You pay the following expenses over the course of each
period shown if you sell your shares at the end of the period, although your
actual cost may be higher or lower. The expenses include any applicable
contingent deferred sales charges.
Share class 1 Year 3 Years 5 Years 10 Years
Class A shares $740 $1,085 $1,454 $2,491
- --------------------------------------------------------------------------------
Class B shares $740 $1,039 $1,465 $2,546
- --------------------------------------------------------------------------------
Class C shares $340 $ 739 $1,265 $2,707
- --------------------------------------------------------------------------------
Class P shares $185 $ 572 $ 985 $2,139
- --------------------------------------------------------------------------------
You would pay the following expenses on the same investment, assuming you kept
your shares.
Class A shares $740 $1,085 $1,454 $2,491
- --------------------------------------------------------------------------------
Class B shares $240 $ 739 $1,265 $2,546
- --------------------------------------------------------------------------------
Class C shares $240 $ 739 $1,265 $2,707
- --------------------------------------------------------------------------------
Class P shares $185 $ 572 $ 985 $2,139
- --------------------------------------------------------------------------------
This example is for comparison and is not a representation of the fund's actual
expenses or returns, either past or present.
Management fees are payable to Lord Abbett for the fund's investment management.
12b-1 fees refer to fees incurred for activities that are primarily intended to
result in the sale of fund shares and service fees for shareholder account
services and maintenance.
Other expenses include fees paid for miscellaneous items such as shareholder
services and professional fees.
(1) Class B shares will convert to class A shares on the eighth anniversary of
your original purchase of class B shares.
(2) The annual operating expenses have been restated from fiscal year amounts
to reflect current fees.
(3) Because 12b-1 distribution fees are paid out on an ongoing basis, over time
they will increase the cost of your investment and may cost you more than
paying other types of sales charges.
4 The Funds
<PAGE>
Income Fund
GOAL/STRATEGY
The fund seeks high current income consistent with reasonable risk. Capital
appreciation is a secondary consideration.
To pursue its goal, the fund primarily invests in high-quality debt
securities. These high-quality debt securities consist of those securities
rated within one of the two highest grades assigned by Standard & Poor's
Ratings Services ("S& P") or Moody's Investor Services, Inc. ("Moody's").
The fund invests primarily in securities issued or guaranteed by
governments (including the United States), their political subdivisions,
authorities, agencies or instrumentalities, foreign government related
issuers and supranational organizations. Under normal circumstances, the
fund will invest at least 65% of such assets invested in long-term debt
securities. Normally, the weighted average life of the fund's portfolio
will vary based on our perception of the relationship between the return
potential and the maturities of the securities, among other factors.
Although the fund is subject to no prescribed limits on geographic asset
distribution, under normal circumstances, at least 65% of its assets will
be invested in at least three different countries, including the United
States. The fund will select which countries and currencies it will invest
in based on its perception of the best opportunities for an attractive
return consistent with its objective. The fund's choices will be based on
analysis of fixed-income market returns, price appreciation of fixed-income
obligations, equity securities and currency exchange-rate movements.
The fund may hold foreign currencies to meet settlement requirements
relating to the purchase of foreign securities. The fund also may effect
currency exchange transactions, including agreements to exchange one
currency for another at a future date, known as forward foreign currency
contracts. The fund may use currency exchange transactions to try to
protect against uncertainties in the levels of future exchange rates
between particular foreign currencies and the U. S. dollar or between
foreign currencies in which portfolio securities are or may be denominated.
The fund also may use these transactions as an efficient way to gain
exposure to short-term interest rates in a particular country instead of
investing in securities denominated in the country's currency.
The fund may take a temporary defensive position by investing in securities
primarily traded in fewer than three countries or in equity or short-term
debt securities with more than 35% of the fund's total assets.
Consequently, the market prices of long-term debt securities tend to be
more volatile than those of short-term debt securities when interest rates
change. This could prevent the fund from realizing its investment
objective.
The fund may engage in active and frequent trading of its portfolio
securities to achieve its principal investment strategies and can be
expected to have portfolio turnover rates substantially in excess of 100%.
For the fiscal year ended December 31, 1998, the portfolio turnover rate
for the Income Fund was 359%. These rates vary year to year. High turnover
increases transaction costs and may increase taxable capital gains.
We or the fund refers to Income Series ("Income Fund"), a series of Lord Abbett
Global Fund, Inc. (the "company"), which operates under the supervision of the
company's Board, with the advice of Lord, Abbett & Co. ("Lord Abbett"), its
investment manager.
About the fund. The fund is a professionally managed portfolio primarily holding
securities purchased with the pooled money of investors. It strives to reach its
stated goal, although as with all funds, it cannot guarantee results.
Supranational organizations are entities designated or supported by one or more
governments or governmental entities to promote economic development. Examples
include the Asian Development Bank, the European Coal and Steel Community, the
European Economic Community and the World Bank.
The Funds 5
<PAGE>
MAIN RISKS
The fund faces interest rate risk, the risks involved with foreign
securities, and, to a lesser degree, credit risk.
Interest Rate Risk. Generally, the prices of fixed-income securities rise
when interest rates fall and fall when interest rates rise. Longer-term
bonds are usually more sensitive to interest rate changes. Put another way,
the longer the maturity of a bond or other debt security, the greater the
effect a change in interest rates is likely to have on the instrument's
price.
Foreign Securities. Because it invests in foreign securities, the fund
faces the risk that unfavorable changes in currency exchange rates could
reduce its share price. The fund may, but is not required to, attempt to
hedge these currency risks through the use of forward foreign currency
contracts and options. Such hedges, if used, may not work as planned,
however. In addition, foreign securities are not subject to the same degree
of regulation as securities traded in the U. S. markets, and there may be
less reliable information about the issuers of the securities. In addition,
foreign securities may experience greater price fluctuations and be less
liquid than U. S. securities. Other concerns include political and social
instability, expropriations, higher transaction costs, currency
fluctuations, nondeductible withholding taxes and different settlement
practices.
The fund also faces certain risks related to forward foreign currency
contracts, including the possibility that we may judge market conditions
incorrectly or use a strategy that does not correlate well with the fund's
investments, thereby resulting in a loss.
Credit Risk. The debt securities in which the fund invests involve risks
that the interest and principal payments may not be made. Some issuers may
default as to principal and/or interest payments after the fund purchases
their securities. The fund attempts to reduce this risk by investing
primarily in high-quality debt securities.
An investment in the fund is not a bank deposit. It is not FDIC-insured or
governmentendorsed. It is not a complete investment program. You could lose
money in this fund.
You should read this entire prospectus, including "Other Investment Techniques,"
which concisely describes the other investment strategies, and their risks, used
by the fund.
6 The Funds
<PAGE>
Income Fund Symbols: Class A -LAGIX
Class B -LAIBX
Class C -GBLAX
PAST PERFORMANCE
The information below provides some indication of the risks of investing in
the fund by showing changes in the fund's class A shares' performance from
calendar year to calendar year and by showing how the fund's average annual
returns compare with those of a broad measure of market performance. Past
performance is not a prediction of future results.
[GRAPHIC OMMITTED]
Best Quarter: 3rd Q '91 9.21%
Worst Quarter: 1st Q '94 -4.11%
The table below shows a comparison of the fund's class A, B, and C average
annual total return to that of the J. P. Morgan Global Government Bond Index
("JPMGGBI"). Fund returns assume reinvestment of all dividends and distributions
and payment of the maximum applicable front-end or deferred sales charge. All
periods end on December 31, 1998.
Class 1 Year 5 Years 10 Years Since Inception (i) JPMGGBI (ii)
A 5.56% 5.85% 8.21% 8.15% 9.28% (iii)
- --------------------------------------------------------------------------------
B 5.03% -- -- 6.80% 8.42% (iv)
- --------------------------------------------------------------------------------
C 9.03% -- -- 8.53% 8.95% (v)
- --------------------------------------------------------------------------------
JPMGGBI 15.31% 8.09% 9.09% -- --
- --------------------------------------------------------------------------------
(i) The dates of inception for each class are as follows: A -9/30/88; B-8/1/96;
and C -7/15/96.
(ii) Performance for the unmanaged J. P. Morgan Global Government Bond Index
does not reflect transaction costs or management fees.
(iii) Represents total returns for the period 9/30/88 to 12/31/98, to correspond
with class A inception date.
(iv) Represents total returns for the period 8/31/96 to 12/31/98, to correspond
with class B inception date.
(v) Represents total returns for the period 7/31/96 to 12/31/98, to correspond
with class C inception date.
The Funds 7
<PAGE>
Income Fund Symbols: Class A -LAGIX
Class B -LAIBX
Class C -GBLAX
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Fee table
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Class B Class C Class P
Shareholder Fees (Fees paid directly from your investment)
Maximum Sales Charge on Purchases
- ------------------------------------------------------------------------------------------
(as a % of offering price) 4.75% none none none
- ------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (See "Purchases") none 5.00% (1) 1.00% none
- ------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (Expenses deducted from fund assets)
(as a % of average net assets) (2)
- ------------------------------------------------------------------------------------------
Management Fees (See "Management") 0.50% 0.50% 0.50% 0.50%
- ------------------------------------------------------------------------------------------
Distribution and Service (12b-1) Fees (3) 0.35% 1.00% 1.00% 0.45%
- ------------------------------------------------------------------------------------------
Other Expenses 0.38% 0.38% 0.38% 0.38%
- ------------------------------------------------------------------------------------------
Total Operating Expenses 1.23% 1.88% 1.88% 1.33%
- ------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Expense example
- --------------------------------------------------------------------------------
This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment at maximum sales charge, if any, 5% total return each year and no
changes in expenses. You pay the following expenses over the course of each
period shown if you sell your shares at the end of the period, although your
actual cost may be higher or lower. The expenses include any applicable
contingent deferred sales charges.
Share class 1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Class A shares $594 $847 $1,119 $1,895
- --------------------------------------------------------------------------------
Class B shares $691 $890 $1,216 $2,033
- --------------------------------------------------------------------------------
Class C shares $291 $590 $1,016 $2,203
- --------------------------------------------------------------------------------
Class P shares $135 $421 $ 729 $1,604
- --------------------------------------------------------------------------------
You would pay the following expenses on the same investment, assuming you kept
your shares.
Class A shares $594 $847 $1,119 $1,895
- --------------------------------------------------------------------------------
Class B shares $191 $590 $1,016 $2,033
- --------------------------------------------------------------------------------
Class C shares $191 $590 $1,016 $2,203
- --------------------------------------------------------------------------------
Class P shares $135 $421 $ 729 $1,604
- --------------------------------------------------------------------------------
This example is for comparison and is not a representation of the fund's actual
expenses or returns, either past or present.
Management fees are payable to Lord Abbett for the fund's investment management.
12b-1 fees refer to fees incurred for activities that are primarily intended to
result in the sale of fund shares and service fees for shareholder account
services and maintenance.
Other expenses include fees paid for miscellaneous items such as shareholder
services and professional fees.
(1) Class B shares will convert to class A shares on the eighth anniversary of
your original purchase of class B shares.
(2) The annual operating expenses have been restated from fiscal year amounts
to reflect current fees.
(3) Because 12b-1 distribution fees are paid out on an ongoing basis, over time
they will increase the cost of your investment and may cost you more than
paying other types of sales charges.
8 The Funds
<PAGE>
Your Investement
PURCHASES
This prospectus offers four classes of shares, classes A, B, C and P for
each fund (call 800-821-5129 to find out if P shares of the Equity Fund are
available in your state). Although each fund has more than one class of
shares, these different classes of shares represent investments in the same
portfolio of securities but are subject to different expenses. Our shares
are continuously offered. The offering price is based on the Net Asset
Value (" NAV") per share next determined after we receive your purchase
order submitted in proper form. A front-end sales charge is added to the
NAV in the case of the class A shares. There is no front-end sales charge,
although there is a Contingent Deferred Sales Charge in the case of the
class B and C shares as described below.
You should read this section carefully to determine which class of shares
represents the best investment option for your particular situation. It may
not be suitable for you to place a purchase order for class B shares of
$500,000 or more, or a purchase order for class C shares of $1,000,000 or
more. You should discuss pricing options with your investment professional.
For more information, see "Alternative Sales Arrangements" in the Statement
of Additional Information.
We reserve the right to withdraw all or any part of the offering made by
this prospectus or to reject any purchase order. We also reserve the right
to waive or change minimum investment requirements. All purchase orders are
subject to our acceptance and are not binding until confirmed or accepted
in writing.
- --------------------------------------------------------------------------------
Front-End Sales Charges -Class A Shares
(Equity Fund Only)
- --------------------------------------------------------------------------------
As a % of As a % of To Compute Offering
Your Investment Offering Price Your Investment Price Divide 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 3.95% 4.11% .9605
- --------------------------------------------------------------------------------
$250,000 to $499,999 2.75% 2.83% .9725
- --------------------------------------------------------------------------------
$500,000 to $999,999 1.95% 1.99% .9805
- --------------------------------------------------------------------------------
$1,000,000 and over No Sales Charge 1.0000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Front-End Sales Charges -Class A Shares
(Income Fund Only)
- --------------------------------------------------------------------------------
As a % of As a % of To Compute Offering
Your Investment Offering Price Your Investment Price Divide NAV by
- --------------------------------------------------------------------------------
Less than $100,000 4.75% 4.99% .9525
- --------------------------------------------------------------------------------
$100,000 to $249,999 3.95% 4.11% .9605
- --------------------------------------------------------------------------------
$250,000 to $499,999 2.75% 2.83% .9725
- --------------------------------------------------------------------------------
$500,000 to $999,999 1.95% 1.99% .9805
- --------------------------------------------------------------------------------
$1,000,000 and over No Sales Charge 1.0000
- --------------------------------------------------------------------------------
NAV per share for each class of fund shares is calculated each business day at
the close of regular trading on the New York Stock Exchange (" NYSE"). Each fund
is open on those business days when the NYSE is open. Purchases and sales of
fund shares are executed at the NAV next determined after the fund receives your
order. In calculating NAV, securities for which market quotations are available
are valued at those quotations. Securities for which such quotations are not
available are valued at fair value under procedures approved by the Board.
Share classes
Class A
normally offered with a frontend sales charge
Class B
no front-end sales charge, however, a contingent deferred sales charge is
applied to shares sold prior to the sixth anniversary of purchase
higher annual expenses than class A shares
automatically convert to class A shares after eight years
Class C
no front-end sales charge
higher annual expenses than class A shares
a contingent deferred sales charge is applied to shares sold prior to the
first anniversary of purchase
Class P
available to certain pension or retirement plans and pursuant to a Mutual
Fund Advisory Program
Your Investment 9
<PAGE>
Reducing Your Class A Front-End Sales Charges. Class A shares may be purchased
at a discount if you qualify under either of the following conditions:
Rights of Accumulation -- A Purchaser can apply the value (at public
offering price) of the shares you already own to a new purchase of class A
shares of any Eligible Fund in order to reduce the sales charge.
Statement of Intention -- A Purchaser of class A shares can purchase
additional shares of any Eligible Fund over a 13-month period and receive
the same sales charge as if all shares were purchased at once. Shares
purchased through reinvestment of dividends and distributions are not
included. A statement of intention can be backdated 90 days. Current
holdings under rights of accumulation can be included in a statement of
intention.
For more information on eligibility for these privileges, read the applicable
sections in the attached application.
Class A Share Purchases Without A Front-End Sales Charge. Class A shares may be
purchased without a front-end sales charge under any of the following
conditions:
purchases of $1 million or more +
purchases by Retirement Plans with at least 100 eligible employees +
purchases under a Special Retirement Wrap Program +
purchases made with dividends and distributions on class A shares of
another Eligible Fund
purchases representing repayment under the loan feature of the Lord
Abbettsponsored prototype 403(b) Plan for class A shares
purchases by employees of any consenting securities dealer having a sales
agreement with Lord Abbett Distributor
purchases under a Mutual Fund Advisory Program
purchases by trustees or custodians of any pension or profit sharing plan,
or payroll deduction IRA for employees of any consenting securities dealer
having a sales agreement with Lord Abbett Distributor
See the Statement of Additional Information for a listing of other categories of
purchasers who qualify for class A share purchases without a front-end sales
charge.
+ These categories may be subject to a Contingent Deferred Sales Charge
("CDSC").
Class A Share CDSC. If you buy class A shares under one of the starred (+)
categories listed above and you redeem any of them within 24 months after the
month in which you initially purchased them, the fund will normally collect a
CDSC of 1%.
The class A share CDSC will generally be waived for the following
conditions:
benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
distribution under Retirement Plans (documentation may be required)
redemptions continuing as investments in another fund participating in a
Special Retirement Wrap Program
CDSC, regardless of class, is not charged on shares acquired through
reinvestment of dividends or capital gains distributions and is charged on the
original purchase cost or the current market value of the shares at the time
they are being sold, whichever is lower. In addition, repayment of loans under
Retirement Plans and 403(b) Plans will constitute new sales for purposes of
assessing the CDSC.
To minimize the amount of any CDSC, the fund redeems shares in the following
order:
1. shares acquired by reinvestment of dividends and capital gains (always free
of a CDSC)
2. shares held for six years or more (class B) or two years or more after the
month of purchase (class A) or one year or more (class C)
3. shares held the longest before the sixth anniversary of their purchase
(class B) or before the second anniversary after the month of purchase
(class A) or before the first anniversary of their purchase (class C)
Retirement Plans include employersponsored retirement plans under the Internal
Revenue Code, excluding Individual Retirement Accounts.
Lord Abbett Distributor LLC ("Lord Abbett Distributor") acts as agent for the
funds to work with investment professionals that buy and/or sell shares of the
funds on behalf of their clients. Generally, Lord Abbett Distributor does not
sell fund shares directly to investors.
Benefit Payment Documentation.
(class A only)
under $50,000 -no documentation necessary
over $50,000 -reason for benefit payment must be received in writing. Use
the address indicated under "Opening Your Account."
10 Your Investment
<PAGE>
Class B Share CDSC. The CDSC for class B shares normally applies if you
redeem your shares before the sixth anniversary of their initial purchase.
The CDSC declines the longer you own your shares, according to the
following schedule:
- --------------------------------------------------------------------------------
Contingent Deferred Sales Charges -Class B Shares
- --------------------------------------------------------------------------------
Anniversary (1) of Contingent Deferred Sales Charge
the day on which the on redemptions (as a % of amount
purchase 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 6th (2) None
- --------------------------------------------------------------------------------
(1) The anniversary is the same calendar day in each respective year after the
date of purchase. For example, the anniversaries for shares purchased on
May 1 will be May 1 of each succeeding year.
(2) Class B shares will automatically convert to class A shares on the eighth
anniversary of the purchase of class B shares.
The class B share CDSC will generally be waived under any one of the
following conditions:
benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
contribution or distribution under Retirement Plans
Eligible Mandatory Distributions under 403(b) Plans and individual
retirement accounts
death of the shareholder (natural person)
redemptions of shares in connection with Div-Move and Systematic
Withdrawal Plans (up to 12% per year)
See "Systematic Withdrawal Plan" under "Services For Fund Investors" below
for more information on CDSCs with respect to class B shares.
Class C Share CDSC. The 1% CDSC for class C shares normally applies if you
redeem your shares before the anniversary of the purchase of such shares.
Class P Shares. Class P shares have lower annual expenses than class B and
class C shares, no front-end sales charge, and no CDSC. Class P shares are
currently sold and redeemed at NAV (a) pursuant to a Mutual Fund Advisory
Program, or (b) to the trustees of, or employer-sponsors with respect to,
pension or retirement plans with at least 100 eligible employees (such as a
plan under Section 401(a), 401(k) or 457(b) of the Internal Revenue Code)
which engage an investment professional providing or participating in an
agreement to provide certain recordkeeping, administrative and/or
sub-transfer agency services to the fund on behalf of the class P
shareholders.
OPENING YOUR ACCOUNT
MINIMUM INITIAL INVESTMENT
Regular account $1,000
Individual Retirement Accounts and
403(b) Plans under the Internal Revenue Code $250
Uniform Gifts to Minors Account $250
Important Information. You may be subject to a $50 penalty under the Internal
Revenue Code if you do not provide a correct taxpayer identification number
(Social Security Number for individuals) or make certain required
certifications. In addition, we may be required to withhold from your account
and pay to the U. S. Treasury 31% of any redemption proceeds and of any dividend
or distribution from your account.
Your Investment 11
<PAGE>
For Retirement Plans and Mutual Fund Advisory Programs, no minimum
investment is required, regardless of share class.
You may purchase shares through any independent securities dealer who has a
sales agreement with Lord Abbett Distributor or you can fill out the
attached application and send it to the fund you select at the address
stated below. You should carefully read the paragraph below entitled
"Proper Form" before placing your order to assure your order will be
accepted.
Small Accounts. Our Board may authorize closing any account in which there are
fewer than 25 shares if it is in a fund's best interest to do so.
Name of Fund
P. O. Box 419100
Kansas City, MO 64141
Proper Form. An order submitted directly to the fund must contain: (1) a
completed application, and (2) payment by check. When purchases are made by
check, redemptions will not be allowed until the fund or the transfer agent
is advised that the check has cleared, which may take up to 15 calendar
days. For more information regarding proper form of a purchase order, call
the fund at 800-821-5129.
By Exchange. Telephone the fund at 800-821-5129 to request an exchange from
any eligible Lord Abbett-sponsored fund.
REDEMPTIONS
By Broker. Call your investment professional for directions on how to
redeem your shares.
By Telephone. To obtain the proceeds of a redemption of $50,000 or less
from your account, you or your representative can call the fund at
800-821-5129.
By Mail. Submit a written redemption request indicating the name(s) in
which the account is registered, the fund's name, the class of shares, your
account number, and the dollar value or number of shares you wish to sell.
Include all necessary signatures. If the signer has any Legal Capacity, the
signature and capacity must be guaranteed by an Eligible Guarantor. Certain
other legal documentation may be required. For more information regarding
proper documentation call 800-821-5129.
Normally, a check will be mailed to the name and address in which the
account is registered (or otherwise, according to your instruction) within
three business days after receipt of your redemption request. Your account
balance must be sufficient to cover the amount being redeemed or your
redemption order will not be processed. Under unusual circumstances, the
fund may suspend redemptions, or postpone payment for more that seven days,
as permitted by federal securities laws.
To determine if a CDSC applies to a redemption, see "Class A Share CDSC,"
"Class B Share CDSC" or "Class C Share CDSC."
Eligible Guarantor is any broker or bank that is a member of the Medallion Stamp
Program. Most major securities firms and banks are members of this program. A
notary public is not an eligible guarantor.
DISTRIBUTIONS AND TAXES
Each fund pays its shareholders dividends from its net investment income,
and distributes net capital gains that it has realized. The Equity Fund
expects to pay such income dividends to shareholders semi-annually. The
Income Fund declares income dividends daily, however, it expects to pay
such dividends to shareholders monthly from its net investment income. If a
capital gain distribution is declared, it is expected to be paid annually.
Your distributions will be reinvested in your fund unless you instruct the
fund to pay them to you in cash. There are no sales charges on
reinvestments.
12 Your Investment
<PAGE>
The tax status of distributions is the same for all shareholders regardless
of how long they have been in the fund or whether distributions are
reinvested or paid in cash. In general, distributions are taxable as
follows:
- --------------------------------------------------------------------------------
Federal Taxability Of Distributions
Type of Tax rate for taxpayer Tax rate for taxpayer subject
distribution subject to 15% bracket to 28% bracket or above
- --------------------------------------------------------------------------------
Income Ordinary income Ordinary income
dividends rate rate
- --------------------------------------------------------------------------------
Short-term Ordinary income Ordinary income
capital gains rate rate
- --------------------------------------------------------------------------------
Long-term
capital gains 10% 20%
- --------------------------------------------------------------------------------
Except in tax-advantaged accounts, any sale or exchange of fund shares may
be a taxable event.
Annual Information -- Information concerning the tax treatment of dividends
and other distributions will be mailed annually to shareholders. Each fund
will also provide annually to its shareholders information regarding the
source of dividends and distributions of capital gains by that fund.
Because everyone's tax situation is unique, you should consult your tax
adviser regarding the treatment of those distributions under the federal,
state and local tax rules that apply to you, as well as the tax
consequences of gains or losses from the redemption or exchange of your
shares.
Taxes on transactions. The chart at left also can provide a "rule of thumb"
guide for your potential U. S. federal income tax liability when selling or
exchanging fund shares. The second row, "Short-term capital gains," applies to
fund shares sold within 12 months of purchase. The third row, "Long-term capital
gains," applies to shares held for more than 12 months.
Starting January 1, 2001, sales of securities held for more than five years will
be taxed at special lower rates.
Any gains realized on a fund's transactions in options and financial futures
will be treated as taxable long-or short-term capital gains.
SERVICES FOR FUND INVESTORS
AUTOMATIC SERVICES
Buying or selling shares automatically is easy with the services described
below. With each service, you select a schedule and amount, subject to
certain restrictions. You can set up most of these services when filling
out your application or by calling 800-821-5129.
<TABLE>
<CAPTION>
<S> <C>
- ------------------------------------------------------------------------------------------------------
For investing
Invest-A-Matic You can make fixed, periodic investments ($ 50 minimum) into your fund
(Dollar-cost account by means of automatic money transfers from your bank checking
averaging) account. See the attached application for instructions.
Div-Move You can automatically reinvest the dividends and distributions from your
account into another account in any Eligible Fund ($ 50 minimum).
For selling shares
Systematic You can make regular withdrawals from most Lord Abbett funds. Automatic
Withdrawal cash withdrawals can be paid to you from your account in fixed or variable
Plan (" SWP") amounts. To establish a plan, the value of your shares must be at least
$10,000, except for Retirement Plans for which there is no minimum. Your
shares must be in non-certificate form.
Class B shares The CDSC will be waived on SWP redemptions of up to 12% of the current net
asset value of your account at the time of your SWP request. For class B share
SWP redemptions over 12% per year, the CDSC will apply to the entire redemption.
Please contact the fund for assistance in minimizing the CDSC in this situation.
Class B and Redemption proceeds due to a SWP for class B and class C shares will be
C shares redeemed in the order described under "Purchases."
- ------------------------------------------------------------------------------------------------------
</TABLE>
Lord Abbett offers a variety of Retirement Plans. Call 800-253-7299 for
information about:
Traditional, Rollover, Roth and Education IRAs
Simple IRAs, SEP-IRAs, 401(k) and 403(b) accounts
Defined Contribution Plans
Your Investment 13
<PAGE>
OTHER SERVICES
Telephone Investing . After we have received the attached application
(selecting "yes" under Section 7C and completing Section 7), you can
instruct us by phone to have money transferred from your bank account to
purchase shares of the fund for an existing account. The fund will purchase
the requested shares when it receives the money from your bank.
Exchanges. You or your investment professional can instruct your fund to
exchange shares of any class for shares of the same class of any Eligible
Fund. Instruction may be provided in writing or by telephone, with proper
identification, by calling 800-821-5129. The fund must receive instructions
for the exchange before the close of the NYSE on the day of your call. If
you meet this requirement, you will get the NAV per share of the Eligible
Fund determined on that day. Exchanges will be treated as a sale for
federal tax purposes. Be sure to read the current prospectus for any fund
into which you are exchanging.
Reinvestment Privilege. If you sell shares of the fund, you have a one time
right to reinvest some or all of the proceeds in the same class of any
Eligible Fund within 60 days without a sales charge. If you paid a CDSC
when you sold your shares, you will be credited with the amount of the
CDSC. All accounts involved must have the same registration.
Account Statements. Every Lord Abbett investor automatically receives
quarterly account statements.
Householding. Shareholders with the same last name and address will receive
a single copy of a prospectus and an annual or semi-annual report, unless
additional reports are specifically requested in writing to the fund.
Account Changes. For any changes you need to make to your account, consult
your investment professional or call the fund at 800-821-5129.
Systematic Exchange. You or your investment professional can establish a
schedule of exchanges between the same classes of any Eligible Fund.
Telephone Transactions. You have this privilege unless you refuse it in writing.
For your security, telephone transaction requests are recorded. We will take
measures to verify the identity of the caller, such as asking for your name,
account number, social security or taxpayer identification number and other
relevant information. Each fund will not be liable for following instructions
communicated by telephone that it reasonably believes to be genuine.
Transactions by telephone may be difficult to implement in times of drastic
economic or market change.
Exchange Limitations. Exchanges should not be used to try to take advantage of
short-term swings in the market. Frequent exchanges create higher expenses for
the funds. Accordingly, the funds reserve the right to limit or terminate this
privilege for any shareholder making frequent exchanges or abusing the
privilege. The funds also may revoke the privilege for all shareholders upon 60
days' written notice.
SALES CHARGES AND SERVICE FEES
Sales and Service Compensation. As part of its plan for distributing
shares, each fund and Lord Abbett Distributor pays sales and service
compensation to Authori zed Institutions that sell the fund's shares and
service its shareholder accounts.
Sales compensation originates from two sources: sales charges and 12b-1
distribution fees that are paid out of each fund's assets. Service
compensation originates from 12b-1 service fees. The 12b-1 fee rates vary
by share class, according to the Rule 12b-1 Plans adopted by each fund. The
sales charges and 12b-1 fees paid by investors are shown in the
class-by-class information under "Fees and Expenses" and "Purchases." The
portion of these expenses that is paid as sales and service compensation to
Authori zed Institutions, such as your dealer, is shown in the chart at the
end of this prospectus. The portion of such sales and service compensation
paid to Lord Abbett Distributor is discussed under "Sales Activities" and
"Service Activities." Sometimes we do not pay sales and service
compensation where tracking data is not available for certain accounts or
where the Authorized Institution waives part of the compensation.
We may pay Additional Concessions to Authorized Institutions from time to
time.
Sales Activities. We may use 12b-1 distribution fees to pay Authorized
Institutions to finance any activity which is primarily intended to result
in the sale of shares. Lord Abbett Distributor uses its portion of the
distribution fees attributable to a fund's class A
12b-1 fees payable regardless of expenses. The amounts payable by a fund need
not be directly related to expenses. If Lord Abbett Distributor's actual
expenses exceed the fee payable to it, a fund will not have to pay more than
that fee. If Lord Abbett Distributor's expenses are less than the fee it
receives, Lord Abbett Distributor will keep the full amount of the fee.
14 Your Investment
<PAGE>
and class C shares for activities that are primarily intended to result in
the sale of such class A and class C shares, respectively. These activities
include, but are not limited to, printing of prospectuses and statements of
additional information and reports for other than existing shareholders,
preparation and distribution of advertising and sales material, expenses of
organizing and conducting sales seminars, Additional Concessions to
Authorized Institutions, the cost necessary to provide distribution-related
services or personnel, travel, office expenses, equipment and other
allocable overhead.
Service Activities. We may pay Rule 12b-1 service fees to Authorized
Institutions for any activity which is primarily intended to result in
personal service and/or the maintenance of shareholder accounts. Any
portion of the service fees paid to Lord Abbett Distributor will be used to
service and maintain shareholder accounts.
MANAGEMENT
The fund's investment adviser is Lord, Abbett & Co., 767 Fifth Avenue, New
York, NY 10153-0203. Founded in 1929, Lord Abbett manages one of the
nation's oldest mutual fund complexes, with over $30 billion in more than
35 mutual fund portfolios and other advisory accounts. For more information
about the services Lord Abbett provides to the funds, see the Statement of
Additional Information.
The fund pays Lord Abbett a monthly fee based on the average daily net
assets for each month. For the fiscal year ended December 31, 1998, the fee
paid to Lord Abbett was at an annual rate of .75 of 1% for the Equity Fund
and .50 of 1% for the Income Fund. In addition, the fund pays all expenses
not expressly assumed by Lord Abbett.
Equity Fund. Lord Abbett has entered into an agreement with Fuji-Lord
Abbett International, Limited. (the "Sub-Adviser"), under which the
Sub-Adviser provides Lord Abbett with advice regarding the Income Fund's
assets. Lord Abbett pays the Sub-Adviser a monthly fee equal to one half of
Lord Abbett's fee.
The fund's investments are all managed by a team of portfolio managers and
analysts acting together to manage the fund's investments. Christopher J.
Taylor is Managing Director of the Sub-Adviser and heads the team, the
senior member is Simon Steele, U. K. Equity Fund Manager. Mr. Steele joined
the Sub-Adviser in 1996 and previously was responsible for the WH Smith
Pension Trust's U. K. Equities, as well as the whole fund's International
Asset allocation. Mr. Taylor has been employed by the Sub-Adviser since
1987.
Income Fund. Lord Abbett uses a team of portfolio managers and analysts
acting together to manage the fund's investments. Zane E. Brown, Partner of
Lord Abbett, heads the team, the other senior members include, Timothy W.
Horan and Jerald M. Lanzotti. Mr. Brown has been with Lord Abbett for over
five years. Mr. Horan joined Lord Abbett in 1996; before that he was a
member of Senior Management at Credit Suisse from 1994-1996. Mr. Lanzotti
joined Lord Abbett in 1996; before that he was an Associate in Global Fixed
Income at Deutsche Morgan Grenfell from 1993-1996.
Your Investment 15
<PAGE>
For More Information
OTHER INVESTMENT TECHNIQUES
This section describes some of the investment techniques that might be used
by each fund and their risks.
Adjusting Investment Exposure. Each fund may, but is not required to, use
various strategies to change its investment exposure to adjust to changing
security prices, interest rates, currency exchange rates, commodity prices
and other factors. These strategies may involve buying or selling options
and futures contracts and rights and warrants. Each fund may use these
transactions to change the risk and return characteristics of each fund's
portfolio. If we judge market conditions incorrectly or use a strategy that
does not correlate well with the fund's investments, it could result in a
loss, even if we intended to lessen risk or enhance returns. These
transactions may involve a small investment of cash compared to the
magnitude of the risk assumed and could produce disproportionate gains or
losses. Also, these strategies could result in losses if the counterparty
to a transaction does not perform as promised.
Borrowing. Each fund may borrow from banks. If a fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. Each fund may borrow only for temporary or emergency purposes,
and not in an amount exceeding 33 1 /3 % of its total assets.
Covered Call Options. Each fund may write (sell) call options on securities
it owns. A call option on a 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.
Diversification. The Equity Fund is a diversified fund, which means that
with respect to 75% of its total assets, it will not purchase a security
if, as a result, more than 5% of the fund's total assets would be invested
in securities of a single issuer or the fund would hold more than 10% of
the outstanding voting securities of the issuer. The Income Fund is a
nondiversified mutual fund. This means that the fund may invest a greater
portion of its assets in, and own a greater amount of the voting securities
of, a single company than a diversified fund. This may expose the fund to
greater risk.
Foreign Currency Hedging Techniques. Each fund may use currency forwards
and options to hedge the risk to the portfolio if it expects that foreign
exchange price movements will be unfavorable for U. S. investors.
Generally, these instruments allow each fund to lock in a specified
exchange rate for a period of time. If the fund's forecast proves to be
wrong, such a hedge may cause a loss. Also, it may be difficult or
impractical to hedge currency risk in many emerging countries. The funds
generally will not enter into a forward contract with a term greater than
one year. Under some circumstances, a fund may commit a substantial portion
of its portfolio to the completion of forward contracts. Although such
contracts will be used primarily to attempt to protect the fund from
adverse currency movements, their use involves the risk Lord Abbett will
not accurately predict currency movements, and the fund's return could be
reduced.
Illiquid Securities. Each fund may invest up to 15% of its assets in
illiquid securities. These securities include those that are not traded on
the open market or that trade irregularly or in very low volume. They may
be difficult or impossible to sell at the time and price the fund would
like.
16 For More Information
<PAGE>
Portfolio Securities Lending. Each fund may lend securities to
broker-dealers and financial institutions, as a means of earning income.
This practice could result in a loss or delay in recovering a fund's
securities, if the borrower defaults. The Equity Fund will limit its
security loans to 5% of its total assets and the Income Fund will limit its
loans to 30% of its total assets.
Repurchase Agreements. In a repurchase agreement, a fund buys a security at
one price from a broker-dealer or financial institution and simultaneously
agrees to sell the same security back to the same party at a higher price
in the future. If the other party to the agreement defaults or becomes
insolvent, the fund could lose money.
Rights and Warrants. Each fund may invest up to 5% of its assets in rights
and warrants to purchase securities. Rights represent a privilege offered
to holders of record of issued securities (usually on a pro-rata basis) for
additional securities of the same class, or 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.
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
after their expiration date.
When-Issued or Delayed Delivery Transactions. The Income Fund may buy or
sell securities with payment and delivery taking place as much as a month
or more later. The fund would do this in an effort to buy or sell the
securities at an advantageous price and yield. The securities involved 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, their market value may be less than the purchase price.
Also, if the fund commits a significant amount of assets to when-issued or
delayed delivery transactions, it may increase the volatility of the fund's
net asset value.
GLOSSARY OF SHADED TERMS
Additional Concessions. Lord Abbett Distributor may, for specified periods,
allow dealers to retain the full sales charge for sales of shares or may
pay an additional concession to a dealer who sells a minimum dollar amount
of our shares and/or shares of other Lord Abbett-sponsored funds. In some
instances, such additional concessions will be offered only to certain
dealers expected to sell significant amounts of shares. Additional payments
may be paid from Lord Abbett Distributor's own resources or from
distribution fees received from a fund 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.
In selecting dealers to execute portfolio transactions for a fund's
portfolio, if two or more dealers are considered capable of obtaining best
execution, we may prefer the dealer who has sold our shares and/or shares
of other Lord Abbett-sponsored funds.
Authorized Institutions. Institutions and persons permitted by law to
receive service and/or distribution fees under a Rule 12b-1 Plan are
"Authorized Institutions." Lord Abbett Distributor is an Authorized
Institution.
For More Information 17
<PAGE>
Eligible Fund. An Eligible Fund is any Lord Abbett-sponsored fund except
for (1) certain tax-free, single-state funds where the exchanging
shareholder is a resident of a state in which such a fund is not offered
for sale; (2) Lord Abbett Equity Fund; (3) Lord Abbett Series Fund; and (4)
Lord Abbett U. S. Government Securities Money Market Fund (" GSMMF")
(except for holdings in GSMMF which are attributable to any shares
exchanged from the Lord Abbett family of funds). An Eligible Fund also is
any Authori zed Institution's affiliated money market fund satisfying Lord
Abbett Distributor as to certain omnibus account and other criteria.
Eligible Mandatory Distributions. If class B shares represent a part of an
individual's total IRA or 403(b) investment, the CDSC will be waived only
for that part of a mandatory distribution which bears the same relation to
the entire mandatory distribution as the B share investment bears to the
total investment.
Legal Capacity. 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. That signature using that capacity
must be guaranteed by an Eligible Guarantor.
Similarly, if (for example) the redemption request is on behalf of the ABC
Corporation by a person (Mary B. Doe) who 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. That signature using that capacity must be
guaranteed by an Eligible Guarantor (see example in right column).
Mutual Fund Advisory Program. Certain unaffiliated authorized brokers,
dealers, registered investment advisers or other financial institutions who
either (1) have an arrangement with Lord Abbett Distributor in accordance
with certain standards approved by Lord Abbett Distributor, providing
specifically for the use of our shares (and sometimes providing for
acceptance of orders for such shares on our behalf) in particular
investment products made available for a fee to clients of such brokers,
dealers, registered investment advisers and other financial institutions,
or (2) charge an advisory, consulting or other fee for their services and
buy shares for their own accounts or the accounts of their clients.
Purchaser. The term "purchaser" includes: (1) an individual, (2) an
individual and his or her spouse and children under the age of 21 and (3) a
trustee or other fiduciary purchasing shares for a single trust estate or
single fiduciary account (including a pension, profit-sharing, or other
employee benefit trust qualified under Section 401 of the Internal Revenue
Code -- more than one qualified employee benefit trust of a single
employer, including its consolidated subsidiaries, may be considered a
single trust, as may qualified plans of multiple employers registered in
the name of a single bank trustee as one account), although more than one
beneficiary is involved.
Special Retirement Wrap Program. A program sponsored by an Authorized
Institution showing one or more characteristics distinguishing it, in the
opinion of Lord Abbett Distributor from a Mutual Fund Advisory Program.
Such characteristics include, among other things, the fact that an
Authorized Institution does not charge its clients any fee of a consulting
or advisory nature that is economically equivalent to the distribution fee
under the class A 12b-1 Plan and the fact that the program relates to
participantdirected Retirement Plans.
GUARANTEED SIGNATURE. An acceptable form of guarantee would be as follows:
In the case of the estate --
Robert A. Doe
Executor of the Estate of
John W. Doe
[Date]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
[SIGNATURE ILLEGIBLE]
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'sm'
SR
In the case of the corporation --
ABC Corporation
Mary B. Doe
By Mary B. Doe, President
[Date]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
[SIGNATURE ILLEGIBLE]
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'sm'
SR
18 For More Information
<PAGE>
RECENT PERFORMANCE
Income Fund. During the fall months, the Federal Reserve Board (Fed)
imposed a series of three interest rate cuts, which were viewed in most
markets as a necessary action to increase liquidity and restore order to
markets in disarray. The Fed's easing prompted similar cuts at other
central banks throughout the world. Emerging markets, particularly in Latin
America, continued to languish as Brazil grappled with its fiscal reform
and speculation about a devaluation. The International Monetary Fund (IMF),
which focuses on lowering trade barriers and stabilizing currencies,
indicated that it would provide weaker countries with the short-term
liquidity needed to work our their fiscal problems in an effort to achieve
economic stability.
Throughout the fiscal year, we were rewarded for our emphasis on
high-quality issues, particularly U. S. Treasuries, which experienced
significant price appreciation due to global demand for "safer, more
liquid" investments. We maintained a large exposure in Greece, in order to
capitalize on the country's efforts to improve its economy and gain entry
to the European Economic Community. We continued to maintain an
underweighting of yen assets, which are currently among the lowest yielding
of all global bonds. Our fund's focus on high-quality issues helped us
achieve strong performance relative to our peer group average. For the
fiscal year ended 12/31/98, the fund's class A shares returned 10.79% at
net asset value versus 6.2% for the Lipper Global Income Funds Average.
The year ahead should provide ample opportunities for global fixed-income
investors if, as we believe, central banks continue to implement rate cuts
in an attempt to stave off economic deceleration. Europe, for example, will
likely need additional rate cuts in order to maintain growth, fuel domestic
demand and ensure that the new Euro currency does not become over-valued as
central banks and asset managers realign their portfolios with the advent
of the new currency.
Equity Fund. Throughout the year, the fund's management worked to
restructure the portfolio by reducing the number of stocks held in order to
focus on what we consider "Best of Breed" companies. Given our long-term
strategy, we have maintained a strong exposure to European-based companies.
Many of these companies, because of their significant export sales to North
America, were impacted by the decline in the value of the U. S. dollar
during the period. We believe, however, that they are generally undervalued
and have potential for significant long-term outperformance relative to
other world equity markets.
We are encouraged by the fact that the Euro has had a successful start. Our
current projections call for European economic growth to average over 2%
during the next year, and for continued subdued inflation. In the U. S., we
anticipate slowing economic growth and benign interest rates, which should
translate to further appreciation of the fund's holdings. We believe
corporate restructuring, rather than economic expansion, will continue to
drive European earnings growth. However, we remain watchful of problems in
the emerging markets, which could hurt economic prospects throughout many
global economies.
Year 2000 Issues. Each fund could be adversely affected if the computers used by
each fund and their service providers do not properly process and calculate
date-related information from and after January 1, 2000.
Lord Abbett is working to avoid such problems and has received assurances from
each fund's service providers that they are taking similar steps. Of course, the
Year 2000 problem is unprecedented and, therefore, Lord Abbett cannot eliminate
altogether the possibility that it or the funds will be affected.
For More Information 19
<PAGE>
Equity Fund
Financial Information
FINANCIAL HIGHLIGHTS
This table describes the fund's performance for the fiscal periods
indicated." Total return" shows how much your investment in the fund would
have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These Financial Highlights have
been audited by Deloitte & Touche LLP, the fund's independent auditors, in
conjunction with their annual audit of the fund's financial statements.
Financial statements for the year ended December 31, 1998 and the
Independent Auditors' Report thereon appear in the Annual Report to
Shareholders for the year ended December 31, 1998 and are incorporated by
reference into the Statement of Additional Information, which is available
upon request. Certain information reflects financial results for a single
fund share.
<TABLE>
<CAPTION>
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Class A Shares
Year Ended December 31,
Per Share Operating Performance: 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $12.08 $12.55 $11.96 $11.55 $12.44
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .01 (b) .07 (b) .07 .16 .10
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Net realized and unrealized
- ------------------------------------------------------------------------------------------------------------------------------------
gain (loss) on investments 1.08 .90 .93 .90 (.1125)
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Total from investment operations 1.09 .97 1.00 1.06 (.0125)
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Distributions
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (.03) (.06) (.07) (.17) (.10)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains (.85) (1.11) (.21) (.48) (.7775)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions from foreign currency transactions -- (.27) (.13) -- --
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Net asset value, end of year $12.29 $12.08 $12.55 $11.96 $11.55
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Total Return (a) 9.07% 7.99% 8.37% 9.19% (0.09)%
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Ratios to Average Net Assets:
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses (e) 1.66% 1.51% 1.52% 1.63% 1.56%
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Net investments income 0.06% 0.57% 0.54% 1.31% 0.79%
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Class B Shares Class C Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Period Ended December 31, Period Ended December 31,
Per Share Operating Performance: 1998 1997 1996 (c) 1998 1997 1996 (c)
Net asset value, beginning of period $12.03 $12.53 $12.30 $12.05 $12.54 $12.31
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.09) (b) (.02) (b) (.01) (.09) (b) (.01) (a)(b) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
- ------------------------------------------------------------------------------------------------------------------------------------
gain (loss) on investments 1.09 .89 .58 1.09 .90 .57
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.00 .87 .57 1.00 .89 .57
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income -- -- -- -- (.01) --
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gain (.85) (1.11) (.21) (.85) (1.11) (.21)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions from foreign
- ------------------------------------------------------------------------------------------------------------------------------------
currency transactions -- (.26) (.13) -- (.26) (.13)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.18 $12.03 $12.53 $12.20 $12.05 $12.54
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (a) 8.37% 7.19% 4.56% (d) 8.35% 7.34% 4.64% (d)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses (e) 2.37% 2.23% 0.83% (d) 2.37% 2.14% 0.83% (d)
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.70)% (0.16)% (0.16)% (d) (0.69)% (0.06)% (0.11)% (d)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31,
Supplemental Data For All Classes: 1998 1997 1996 1995 1994
Net assets, end of year (000) $80,093 $80,820 $92,164 $84,731 $83,739
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 89.48% 99.05% 81.97% 83.32% 75.39%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(b) Calculated using average shares during the period.
(c) Commencement of operations: class B -August 1, 1996, and class C -August 1,
1996.
(d) Not annualized.
(e) The ratios for 1997 and 1998 include expenses paid through an expense
offset arrangement.
20 Financial Information
<PAGE>
Equity Fund
LINE GRAPH COMPARISON
Immediately below is a comparison of a $10,000 investment in class A shares
to the same investment in the Morgan Stanley World Index, assuming
reinvestment of all dividends and distributions.
[GRAPHIC OMMITTED]
Fiscal Year-end 12/31
- --------------------------------------------------------------------------------
Average Annual Total Return At Maximum Applicable
Sales Charge For The Periods Ending December 31, 1998
1 Year 5 Years 10 Years (or Life)
- --------------------------------------------------------------------------------
Class A (3) 2.78% 5.58% 6.80%
- --------------------------------------------------------------------------------
Class B (4) 3.37% -- 7.27%
- --------------------------------------------------------------------------------
Class C (5) 7.36% -- 8.47%
- --------------------------------------------------------------------------------
(1) Reflects the deduction of the maximum initial sales charge of 5.75%.
(2) Performance for the unmanaged Morgan Stanley World Index does not reflect
transaction costs, management fees or sales charges.
(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, with all
dividends and distributions reinvested for the periods shown ending
December 31, 1998 using the SEC-required uniform method to compute such
return.
(4) The class B shares were first offered on 8/1/96. Performance reflects the
deduction of a CDSC of 4% (for 1 year) and 3% (life of the class).
(5) The class C shares were first offered on 8/1/96. Performance reflects the
deduction of a CDSC of 1% (for 1 year) and 3% (life of the class).
Financial Information 21
<PAGE>
Income Fund
FINANCIAL HIGHLIGHTS
This table describes the fund's performance for the fiscal periods
indicated." Total return" shows how much your investment in the fund would
have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These Financial Highlights have
been audited by Deloitte & Touche LLP, the fund's independent auditors, in
conjunction with their annual audit of the fund's financial statements.
Financial statements for the year ended December 31, 1998 and the
Independent Auditors' Report thereon appear in the Annual Report to
Shareholders for the year ended December 31, 1998 and are incorporated by
reference into the Statement of Additional Information, which is available
upon request. Certain information reflects financial results for a single
fund share.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Shares
Year Ended December 31,
Per Share Operating Performance: 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $8.09 $8.34 $8.58 $7.98 $9.02
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .55 (b) .51 (b) .53 .77 .65
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
- ------------------------------------------------------------------------------------------------------------------------------------
gain (loss) on investments .30 (.18) (.04) .6138 (.9603)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations .85 .33 .49 1.3838 (.3103)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (.50) (.51) (.61) (.6613) (.6035)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from paid-in-capital -- (.07) -- -- (.1262)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions from foreign currency transactions -- -- (.12) (.1225) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $8.44 $8.09 $8.34 $8.58 $7.98
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (a) 10.79% 4.23% 6.12% 17.86% (3.40)%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses (e) 1.18% 1.10% 1.04% 1.04% 1.02%
- ------------------------------------------------------------------------------------------------------------------------------------
Net investments income 6.75% 6.29% 6.52% 7.60% 7.72%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Class B Shares Class C Shares
Year Ended December 31, Year Ended December 31,
Per Share Operating Performance: 1998 1997 1996 (c) 1998 1997 1996 (c)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $8.09 $8.34 $8.24 $8.09 $8.34 $8.14
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .49 (b) .45 (b) .23 .50 (b) .45 (a)(b) .21
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
- ------------------------------------------------------------------------------------------------------------------------------------
gain (loss) on investments .30 (.18 ) .22 .29 (.18) .37
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations .79 .27 .45 .79 .27 .58
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (.44) (.46) (.23) (.44) (.46) (.26)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends to shareholders from paid-in-capital -- (.06) -- -- (.06) --
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions from foreign
- ------------------------------------------------------------------------------------------------------------------------------------
currency transactions -- -- (.12) -- -- (.12)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.44 $8.09 $8.34 $8.44 $8.09 $8.34
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (a) 10.03% 3.49% 5.58% (d) 10.03% 3.48% 7.43% (d)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses (e) 1.87% 1.78% 0.73% (d) 1.85% 1.77% 0.87% (d)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 6.01% 5.57% 2.11% (d) 6.08% 5.62% 2.69% (d)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31,
Supplemental Data For All Classes: 1998 1997 1996 1995 1994
Net assets, end of year (000) $125,162 $148,785 $202,494 $238,291 $249,490
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 359.13% 616.63% 621.79% 1,073.69% 1,230.20%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(b) Calculated using average shares during the period.
(c) Commencement of operations of: class B -August 1, 1996, and class C -July
15, 1996.
(d) Not annualized.
(e) The ratios for 1997 and 1998 include expenses paid through an expense
offset arrangement.
22 Financial Information
<PAGE>
Income Fund
LINE GRAPH COMPARISON
Immediately below is a comparison of a $10,000 investment in class A shares
to the same investment in the J. P. Morgan Global Government Bond Index,
assuming reinvestment of all dividends and distributions.
[GRAPHIC OMMITTED]
Fiscal Year-end 12/31
Average Annual Total Return At Maximum Applicable
Sales Charge For The Periods Ending December 31, 1998
- --------------------------------------------------------------------------------
1 Year 5 Years 10 Years (or Life)
- --------------------------------------------------------------------------------
Class A (3) 5.56% 5.85% 8.21%
- --------------------------------------------------------------------------------
Class B (4) 5.03% -- 6.80%
- --------------------------------------------------------------------------------
Class C (5) 9.03% -- 8.53%
- --------------------------------------------------------------------------------
(1) Reflects the deduction of the maximum initial sales charge of 4.75%.
(2) Performance numbers for the unmanaged J. P. Morgan Global Government Bond
Index does not reflect transaction costs, management fees or sales charges.
(3) Total return is the percent change in value, after deduction of the maximum
initial sales charge of 4.75%, with all dividends and distributions
reinvested for the periods shown ending December 31, 1998 using the
SECrequired uniform method to compute such return.
(4) The class B shares were first offered on 8/1/96. Performance reflects the
deduction of a CDSC of 4% (for 1 year) and 3% (life of the class).
(5) The class C shares were first offered on 7/15/96. Performance reflects the
deduction of a CDSC of 1% (for 1 year) and 3% (life of the class).
Financial Information 23
<PAGE>
COMPENSATION FOR YOUR DEALER -- Equity Fund
<TABLE>
<CAPTION>
FIRST YEAR COMPENSATION
- ------------------------------------------------------------------------------------------------------------------------------------
Front-end
sales charge Dealer's
paid by investors concession Service fee (1) Total compensation (2)
Class A investments (% of offering price) (% of offering price) (% of net investment) (% of offering price)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Less than $50,000 5.75% 5.00% 0.25% 5.24%
- ------------------------------------------------------------------------------------------------------------------------------------
$50,000 -$99,999 4.75% 4.00% 0.25% 4.24%
- ------------------------------------------------------------------------------------------------------------------------------------
$100,000 -$249,999 3.95% 3.25% 0.25% 3.49%
- ------------------------------------------------------------------------------------------------------------------------------------
$250,000 -$499,999 2.75% 2.25% 0.25% 2.49%
- ------------------------------------------------------------------------------------------------------------------------------------
$500,000 -$999,999 1.95% 1.75% 0.25% 2.00%
- ------------------------------------------------------------------------------------------------------------------------------------
$1 million or more (3) or Retirement Plan -100 or more
eligible employees (3) or Special Retirement Wrap Program (3)
- ------------------------------------------------------------------------------------------------------------------------------------
First $5 million no front-end sales charge 1.00% 0.25% 1.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Next $5 million above that no front-end sales charge 0.55% 0.25% 0.80%
- ------------------------------------------------------------------------------------------------------------------------------------
Next $40 million above that no front-end sales charge 0.50% 0.25% 0.75%
- ------------------------------------------------------------------------------------------------------------------------------------
Over $50 million no front-end sales charge 0.25% 0.25% 0.50%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B investments Paid at time of sale (% of net asset value)
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 3.75% 0.25% 4.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class C investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.75% 0.25% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class P investments Percentage of average net assets
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION AFTER FIRST YEAR
Class A investments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
All amounts no front-end sales charge none 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B investments Percentage of average net assets (4)
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge none 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Class C investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.75% 0.25% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class P investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The service fee for class A and P shares is paid quarterly. The first
year's service fee on class B and C shares is paid at the time of sale.
(2) Dealer's concession percentages and service fee percentages are calculated
from different amounts, and therefore may not equal total compensation
percentages if combined using simple addition. Additional Concessions may
be paid to Authorized Institutions from time to time.
(3) Concessions are paid at the time of sale on all class A shares sold during
any 12-month period starting from the day of the first net asset value
sale. With respect to (a) class A share purchases at $1 million or more,
sales qualifying at such level under rights of accumulation and statement
of intention privileges are included and (b) for Special Retirement Wrap
Programs, only new sales are eligible and exchanges into the fund are
excluded.
(4) With respect to class B, C and P shares, 0.25%, 1.00% and 0.45%,
respectively, of the average annual net asset value of such shares
outstanding during the quarter (including distribution reinvestment shares
after the first anniversary of their issuance) is paid to Authorized
Institutions. These fees are paid quarterly in arrears.
24 Financial Information
<PAGE>
COMPENSATION FOR YOUR DEALER -- Income Fund
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FIRST YEAR COMPENSATION
Front-end
sales charge Dealer's
paid by investors concession Service fee (1) Total compensation (2)
Class A investments (% of offering price) (% of offering price) (% of net investment) (% of offering price)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Less than $100,000 4.75% 4.00% 0.25% 4.24%
- ------------------------------------------------------------------------------------------------------------------------------------
$100,000 -$249,999 3.95% 3.25% 0.25% 3.49%
- ------------------------------------------------------------------------------------------------------------------------------------
$250,00 -$499,999 2.75% 2.25% 0.25% 2.74%
- ------------------------------------------------------------------------------------------------------------------------------------
$500,000 -$999,999 1.95% 1.75% 0.25% 2.00%
- ------------------------------------------------------------------------------------------------------------------------------------
$1 million or more (3) or
Retirement Plan -100 or more eligible employees (3) or
Special Retirement Wrap Program (3)
- ------------------------------------------------------------------------------------------------------------------------------------
First $5 million no front-end sales charge 1.00% 0.25% 1.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Next $5 million above that no front-end sales charge 0.55% 0.25% 0.80%
- ------------------------------------------------------------------------------------------------------------------------------------
Next $40 million above that no front-end sales charge 0.50% 0.25% 0.75%
- ------------------------------------------------------------------------------------------------------------------------------------
Over $50 million no front-end sales charge 0.25% 0.25% 0.50%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B investments Paid at time of sale (% of net asset value)
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 3.75% 0.25% 4.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class C investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.75% 0.25% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class P investments Percentage of average net assets
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION AFTER FIRST YEAR
Class A investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge none 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B investments Percentage of average net assets (4)
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge none 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Class C investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.65% 0.25% 0.90%
- ------------------------------------------------------------------------------------------------------------------------------------
Class P investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The service fee for class A and P shares is paid quarterly. The first
year's service fee on class B and C shares is paid at the time of sale.
(2) Dealer's concession percentages and service fee percentages are calculated
from different amounts, and therefore may not equal total compensation
percentages if combined using simple addition. Additional Concessions may
be paid to Authorized Institutions 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 purchase at $1 million or more,
sales qualifying at such level under rights of accumulation and statement
of intention privileges are included and (b) for Special Retirement Wrap
Programs, only new sales are eligible and exchanges into the Fund are
excluded.
(4) With respect to class B, C and P shares, 0.25%, 0.90% and 0.45%,
respectively, of the average annual net asset value of such shares
outstanding during the quarter (including distribution reinvestment shares
after the first anniversary of their issuance) is paid to Authorized
Institutions. 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.
Financial Information 25
<PAGE>
More information on these funds is available free upon request, including
the following:
ANNUAL/SEMI-ANNUAL REPORT
Describes the funds, lists portfolio holdings and contains a letter from
each fund's manager discussing recent market conditions and the
investment strategies.
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
Provides more details about the funds and their policies. A current SAI is
on file with the Securities and Exchange Commission ("SEC") and is
incorporated by reference (is legally considered part of this
prospectus).
To obtain information:
By telephone. Call the funds at:
888-222-2388
By mail. Write to the funds at:
The Lord Abbett Family of Funds
767 Fifth Avenue
New York, NY 10153-0203
Via the Internet
Lord, Abbett & Co.
http://www.lordabbett.com
Text only versions of fund documents can be viewed online or downloaded from:
SEC http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 800-SEC-0330) or by sending your request and a duplicating
fee to the SEC's Public Reference Section, Washington, DC 20549-6009.
Lord Abbett Global Fund, Inc.
Equity Series
Income Series
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
- -----------------------
SEC file number: 811-5476
LAGF-1-599
(5/99)
