1933 Act File No. 33-31072
1940 Act File No. 811-5876
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 14 [X]
And
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]
OF 1940
Post-Effective Amendment No. 14 [X]
LORD ABBETT SERIES FUND, INC.
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Exact Name of Registrant as Specified in Charter
767 FIFTH AVENUE, NEW YORK, N.Y. 10153-0203
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Address of Principal Executive Office
(212) 848-1800
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Registrant's Telephone Number
Thomas F. Konop, Vice President
767 Fifth Avenue, New York, N.Y. 10153-0203
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
|_| immediately on filing pursuant to paragraph (b) of Rule 485.
|_| on (date) pursuant to paragraph (b) of Rule 485
|X| 60 days after filing pursuant to paragraph (a)(1) of Rule 485
|_| on (date) pursuant to paragraph (a)(1) of Rule 485
|_| 75 days after filing pursuant to paragraph (a)(2) of Rule 485
|_| on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
|_| this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
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2
LORD ABBETT SERIES FUND, INC.
FORM N-1A
Cross Reference Sheet
Pursuant to Rule 481(a)
EXPLANATORY NOTE
This Post-Effective Amendment No. 14 (the "Amendment") to the Registration
Statement relates only to the Variable Contract Class of the Mid-Cap Value
Portfolio of Lord Abbett Series Fund, Inc. The other Series and classes of
shares of the Registrant are listed below and are offered by the Prospectuses
and Statements of Additional Information in Parts A and B, respectively, of the
Post-Effective Amendments to the Registrant's Registration Statements as
identified. The following are separate series and classes of shares of the
Registrant. This Amendment does not relate to, amend or otherwise affect the
Prospectuses and Statements of Additional Information contained in the prior
Post-Effective Amendments listed below, and pursuant to Rule 485(d) under the
Securities Act of 1933, does not affect the effectiveness of such Post-Effective
Amendments.
POST-EFFECTIVE
AMENDMENT NO.
Growth and Income Portfolio - Variable Contract Class 12
Bond-Debenture Portfolio - Variable Contract Class 13
Form N-1A Location In Prospectus or
Item No. Statement of Additional Information
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1 Cover Page
2 N/A
3 N/A
4(a)(i) Cover Page; Our Management
4(a)(ii) How We Invest; Investment Policies, Risks and
Limits
4(b)(c) How We Invest; Investment Policies, Risks and
Limits
5(a) Our Management
5(b) Our Management; Back Cover Page
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3
5(c) Portfolio Management; Our Management
5(d) N/A
5(e) Back Cover Page
5(f) Our Management
5(g)(i) N/A
5(g)(ii) Purchases and Redemptions
5A N/A
6(a) Our Management
6(b)(c)(d) N/A
6(e) Cover Page
6(f)(g) Dividends and Distributions; Investment Policies, Risks
and Limits
7(a) Back Cover Page; Purchases and Redemptions
7(b) Purchases and Redemptions; Net Asset Value
7(c)(d) N/A
7(e)(f) Purchases and Redemptions
8 Purchases and Redemptions
9 N/A
10 Cover Page
11 Cover Page - Table of Contents
12 N/A
13 Investment Policies, Risks and Limits
14 Directors and Officers
15(a)(b) N/A
15(c) Directors and Officers
16(a)(i) Investment Advisory and Other Services
16(a)(ii) Directors and Officers
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16(a)(iii) Investment Advisory and Other Services
16(b) Investment Advisory and Other Services
16(c)(d)(e)(g) N/A
16(f) Purchases and Redemptions; Investment Advisory
and Other Services
16(g)(h) Investment Advisory and Other Services
16(i) N/A
17(a) Portfolio Transactions
17(b) N/A
17(c) Portfolio Transactions
17(d) Portfolio Transactions
17(e) N/A
18(a) Cover Page
18(b) N/A
19(a)(b) Purchases and Redemptions; Notes to Financial
Statements
19(c) N/A
20 Taxes
21(a) Purchases and Redemptions
21(b)(c) N/A
22(a) N/A
22(b) Past Performance
23 N/A
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1
This Prospectus sets forth concisely the information about the Mid-Cap Value
Portfolio ("we" or the "Portfolio") of Lord Abbett Series Fund, Inc. (the
"Fund") that you should know before investing. Please read this Prospectus
before investing and retain it for future reference.
The investment objective is to seek capital appreciation through investments,
primarily in equity securities, which are believed to be undervalued in the
marketplace. There can be no assurance that this objective will be achieved.
The Statement of Additional Information dated January 1, 1999 has been filed
with the Securities and Exchange Commission and is incorporated by reference
into this Prospectus. You may obtain it, without charge, by writing to the Fund
or by calling 800-874-3733. Ask for "Part B of the Prospectus -- the Statement
of Additional Information."
Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank. Shares are not insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency. An investment in
the Portfolio involves risks, including the possible loss of principal.
These securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission nor has the Securities
and Exchange Commission or any state securities commission passed upon the
accuracy or adequacy of this Prospectus. Any representation to the contrary is a
criminal offense.
January 1, 1999
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HOW WE INVEST
We primarily invest in common stocks of midsized companies while utilizing a
value approach to investing. The Fund generally focuses on companies with market
capitalizations of roughly $500 million to $5 billion, but not less than
approximately $50 million. Selection of stocks is based on appreciation
potential, without regard to current income. Normally, at least 65% of our total
assets will consist of investments in mid-cap companies, determined at the time
of purchase.
Our investment portfolio is diversified among many issues representing various
industries. The holdings in our portfolio typically are selected for their
potential for significant market appreciation from growing recognition of
substantial improvement in the Company's financial results or increasing
anticipation of such improvement. This potential may derive from such factors as
(i) changes in the economic and financial environment, (ii) new or improved
products or services, (iii) new or rapidly expanding markets, (iv) changes in
management or structure of the company, (v) price increases, (vi) improved
efficiencies resulting from new technologies or changes in distribution or (vii)
changes in governmental regulations, political climate or competitive
conditions.
See "Investment Policies, Risks and Limits."
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RISK FACTORS
The value of your investment will fluctuate in response to stock market
movements. The Fund employs other investment practices such as investments in
foreign securities and other securities, that could adversely affect
performance. Before you invest, please read "Investment Policies, Risks and
Limits."
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PORTFOLIO MANAGEMENT
Edward K. von der Linde, Executive Vice President and portfolio manager of the
Fund is primarily responsible for the day-to-day management of the Fund. Mr. von
der Linde has been with Lord Abbett since 1988 and has over 12 years of
investment experience. Mr. von der Linde is assisted by Howard E. Hansen.
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PURCHASES AND REDEMPTIONS
Lord Abbett Distributor LLC ("Lord Abbett Distributor"), located at The General
Motors Building, 767 Fifth Avenue, New York, New York 10153-0203, is the
distributor of the shares of the Portfolio. Shares of the Class (the "shares")
are currently issued and redeemed only in connection with investment in and
payments under certain variable annuity contracts issued by life insurance
companies and their affiliates ("Life Companies"). The shares are purchased and
redeemed at net asset value. Lord Abbett Distributor and the Fund each reserves
the right to suspend, change or withdraw the offering of shares of any Portfolio
or Portfolios or any of the terms of such offering.
In selecting broker-dealers to execute portfolio transactions for the Fund's
Portfolio, if two or more broker-dealers are considered capable of best
execution, the Fund may prefer the broker-dealer who has sold Fund shares
through the sale of such Variable Contracts.
Shareholder Servicing Plan. Under the Shareholder Servicing Plan (the "Plan"),
the Portfolio, on behalf of the Class, may make payments to Lord Abbett
Distributor for remittance to a Life Company for certain shareholder servicing
activities of such Life Company, provided that such remittances in the aggregate
do not exceed 0.25 of 1%, on an annual basis, of the average daily net asset
value of shares of the Portfolio sold to such Life Company to be used as the
underlying investment for variable life insurance and variable annuity contracts
("Variable Contracts").
The Plan is intended to provide additional incentives to Life Companies to
provide continuiing information and investment services to variable life
insurance policyholders and variable annuity contract owners who invest in the
Portfolio and to encourage such persons to remain invested in the Portfolio.
Variable annuity contract owners should refer to the fee table section of their
separate account prospectuses for further information with respect to the effect
of the Plan on their annuity contract expenses.
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DIVIDENDS AND DISTRIBUTIONS
All dividends and distributions are distributed to the shareholders and will be
payable in shares or cash at the election of shareholders. The Life Companies,
with respect to shares held by their separate accounts, have elected, and intend
to continue to elect, to receive dividends and distributions in shares.
Dividends and distributions are made at such frequency and in such amount as to
assure compliance with the Internal Revenue Code.
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OUR MANAGEMENT
The Fund is supervised by a Board of Directors, an independent body which has
ultimate responsibility for the Fund's activities. The Board has retained Lord
Abbett as investment manager pursuant to a Management Agreement. Lord Abbett has
been an investment manager for over 69 years and currently manages over $27
billion in a family of mutual funds and other advisory accounts. Lord Abbett
provides similar services to twelve other funds having various investment
objectives and also advises other investment clients. For more information about
the services Lord Abbett provides to the Fund, see the Statement of Additional
Information.
In accordance with its view of present applicable law, the Fund views the
separate account(s) of Life Companies as shareholders of the Fund having the
right to vote Fund shares at any meeting of shareholders and will provide
pass-through voting privileges to all contract owners. Life Companies will vote
shares of the Fund held in the separate account(s) for which no timely voting
instructions from contract owners are received, as well as shares they own, in
the same proportion as those shares for which voting instructions are received.
Additional information concerning voting rights is described in the separate
account prospectuses.
The Fund pays Lord Abbett a monthly fee, based on average daily net assets of
Portfolio for each month, at an annual rate of 0.75 of 1%. In addition, the Fund
pays all expenses not expressly assumed by Lord Abbett.
The Fund. The Fund is a diversified open-end management investment company
established in 1989. The Fund is a series fund currently comprised of four
active Portfolios. This Prospectus offers only the single class of shares of the
Mid-Cap Value Portfolio: the Variable Contract Class. Each share of common stock
of the Fund, regardless of Class, has a par value of $.001 per share and has one
vote and an equal right to dividends and distributions which are affected by
expenses unique to the class. All shares have noncumulative voting rights for
the election of directors. Each share is fully paid, nonassessable and freely
transferable. There are no liquidation, conversion or preemptive rights. The
fiscal year-end of the Fund is December 31.
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INVESTMENT POLICIES, RISKS AND LIMITS
The Fund is permitted to utilize, within limits established by the Board of
Directors, the following investment policies in an effort to enhance the Fund's
performance. These
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5
policies have risks associated with them. However, the Fund follows certain
practices that may reduce these risks. To the extent the Fund utilizes some of
these policies, its overall performance may be positively or negatively
affected.
Securities Lending: The lending of securities to financial institutions which
provide continuous collateral equal to the market value of the securities
loaned.
Risk: Delay in recovery of collateral and loss should the borrower of the
security fail financially.
Limit: Loans, in the aggregate, may not exceed 30% of the Fund's total assets.
Foreign Securities: Foreign securities are securities primarily traded in
countries outside the United States.
Risk: These securities are not subject to the same degree of regulation and may
be more volatile and less liquid than securities traded in major U.S. markets.
Other considerations include political and social instability, expropriations,
higher transaction costs, currency fluctuations, nondeductible withholding taxes
and different settlement practices.
Limit: The Fund may invest up to 10% of its assets at the time of investment in
foreign securities.
Illiquid Securities: Securities ot traded on the open market. May include
illiquid Rule 144A securities.
Risk: Certain securities may be difficult or impossible to sell at the time and
price the seller would like.
Limit: The Fund may invest up to 15% of its assets in illiquid securities.
Securities determined by the Board of Directors to be liquid are not subject to
this limitation.
The Fund serves as the underlying investment for Variable Contracts issued by
the Life Companies. Section 817(h) of the Internal Revenue Code of 1986, as
amended (the "Code"), imposes certain diversification standards on the
underlying assets of Variable Contracts held in any Portfolios of the Fund. The
Code provides that a Variable Contract shall not be treated as an annuity
contract or life insurance for any period (and any subsequent period) for which
the investments are not, in accordance with regulations prescribed by the
Treasury Department, adequately diversified. Disqualification of a Variable
Contract as an annuity contract or life insurance would result in imposition of
federal income tax on contract owners with respect to earnings allocable to the
Variable Contract prior to the receipt of payments under the Variable Contract.
Section 817(h)(2) of the Code is a safe harbor provision which provides that
contracts such as the Variable
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6
Contracts meet the diversification requirements if, as of the close of each
quarter, the underlying assets meet the diversification standards for a
regulated investment company and no more than fifty-five percent (55%) of the
total assets consists of cash, cash items, U.S. Government securities and
securities of other regulated investment companies.
On March 1, 1989, the Treasury Department released Regulations (Treas. Reg.
1.817-5), which established diversification requirements for the investment
portfolios underlying Variable Contracts. The Regulations amplify the
diversification requirements for Variable Contracts set forth in Section 817(h)
of the Code and provide an alternative to the safe harbor provision described
above. Under the Regulations, an investment portfolio will be deemed adequately
diversified if (i) no more than 55 percent of the value of the total assets of
the portfolio is represented by any one investment; (ii) no more than 70 percent
of such value is represented by any two investments; (iii) no more than 80
percent of such value is represented by any three investments; and (iv) no more
than 90 percent of such value is represented by any four investments. For
purposes of these Regulations, all securities of the same issuer are treated as
a single investment.
The Code provides that for purposes of determining whether or not the
diversification standards imposed on the underlying assets of Variable Contracts
by Section 817(h) of the Code have been met, "each United States government
agency or instrumentality shall be treated as a separate issuer."
The Portfolio will be managed in such a manner as to comply with these
diversification requirements. It is possible that in order to comply with the
diversification requirements, less desirable investment decisions may be made
which would affect the investment performance of the Portfolio.
The Portfolio has a name and an investment objective similar to that of the Lord
Abbett Mid-Cap Value Fund, Inc. The performance of a separate account investing
in the Portfolio is not expected to be the same as the performance of the Lord
Abbett Mid-Cap Value Fund due in part to differences in their investments.
Various insurance-related costs at the Life Company's separate account will also
affect performance.
The Portfolio sells its shares to separate accounts of Life Companies that are
unaffiliated with Lord Abbett. The Portfolio does not foresee any disadvantages
to policyholders arising out of the fact that the Portfolio offers its shares to
separate accounts of various Life Companies to serve as the investment medium
for their variable products. Nevertheless, the Board of Directors intends to
monitor events to identify any material irreconcilable conflicts that may
possibly arise, and to determine what action, if any, should be taken in
response to such conflicts. If such a conflict were to arise, one or more
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7
Life Companies might be required to withdraw its investments in the Portfolio.
This might force the Portfolio to sell securities at disadvantageous prices. In
addition, the Board of Directors may refuse to sell shares of the Portfolio to
any Life Company or may suspend or terminate the offering of shares of any fund
if such action is required by law or regulatory authority or is in the best
interests of shareholders of the Portfolio.
For more information about investment policies, restrictions and risk factors,
see the Statement of Additional Information.
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OBJECTIVE, RESTRICTION AND POLICY CHANGES. We will not change our investment
objective or our fundamental investment restrictions without shareholder
approval. If we determine that our objective can best be achieved by a
substantive change in investment policy, which may be changed without
shareholder approval, we may make such change by disclosing it in our
prospectus.
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TAX STATUS
The Fund intends to cause the Portfolio to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code. The Fund distributes
all of its net income and gains to its shareholders (the separate accounts). The
Portfolio is treated as a separate entity for federal income tax purposes and,
therefore, the investments and results of the Portfolio are determined
separately for purposes of determining whether the Portfolio qualifies as a
"regulated investment company" and for purposes of determining net ordinary
income (or loss) and net realized capital gains (or losses).
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NET ASSET VALUE
Portfolio shares are sold and redeemed at a price equal to the share's net asset
value. Net asset value per share is determined as of the close of the New York
Stock Exchange on each day that the New York Stock Exchange is open for trading
by dividing the net assets of each class by the number of shares outstanding for
that class at the time of calculation. The daily net asset value per share is
also determined once daily on each day (other than a day during which no such
shares were tendered for redemption and no order to purchase or sell such shares
was received by the Fund) in which there is a sufficient degree of trading in
the Portfolio's securities that the current net asset value of the Portfolio's
shares might be materially affected by changes in the value of the securities.
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8
Total assets are determined by adding the total current value of the Portfolio's
securities, cash, receivables and other assets and subtracting liabilities.
Portfolio shares are sold and redeemed at the net asset value next determined
after receipt of the sales order or request for redemption.
Securities that are listed on a securities exchange are valued at their closing
sales price on the day of the valuation. Price valuations for listed securities
are based on market quotations where the security is primarily traded or, if not
available, are valued at the mean of the bid and asked prices on any valuation
date. Unlisted securities in a Portfolio are primarily valued based on their
latest quoted bid price or, if not available, are valued by a method determined
by the Directors to accurately reflect fair value. Money market instruments
maturing in 60 days or less are valued on the basis of amortized cost, which
means that they are valued at their acquisition cost to reflect a constant
amortization rate to maturity of any premium or discount, rather than at current
market value.
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PERFORMANCE
From time to time, advertisements and other sales materials for the Fund may
include information concerning the historical performance of the Fund. Total
return information will include the Portfolio's average annual compounded rate
of return for a given period, based upon the value of the shares acquired
through a hypothetical $1000 investment at the beginning of the specified period
and the net asset or redemption value of such shares at the end of the period,
assuming reinvestment of all dividends and distributions at net asset value. In
lieu of or in addition to total return calculations, such information may
include performance rankings and similar information from independent
organizations such as Lipper Analytical Services, Inc., Business Week, Forbes or
other industry publications.
Total return figures utilized by the Fund are based on historical performance
and are not intended to indicate future performance. Total return and net asset
value per share can be expected to fluctuate over time. Further information
about the Fund's performance is contained in the Annual Report to shareholders
which may be obtained, without charge, by calling 800-874-3733.
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9
This Prospectus does not constitute an offering in any jurisdiction in which
such offer is not authorized or in which the person making such offer is not
qualified to do so or to anyone to whom it is unlawful to make such offer.
No person is authorized to give any information or to make any representations
not contained in this Prospectus or in supplemental sales material authorized by
the Fund and no person is entitled to rely upon any information or
representation not contained herein or therein.
Investment Manager and Underwriter
Lord, Abbett & Co. and Lord Abbett Distributor LLC
The General Motors Building
767 Fifth Avenue
New York, New York 10153-0203
212-848-1800
Custodian
The Bank of New York
48 Wall Street
New York, New York 10286
Transfer Agent and Dividend Disbursing Agent
United Missouri Bank of Kansas City, N.A.
Tenth and Grand
Kansas City, Missouri 64141
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419100
Kansas City, Missouri 64141
800-821-5129
Auditors
Deloitte & Touche LLP
Counsel
Debevoise & Plimpton
Printed in the U.S.A.
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10
January 1, 1999
Lord Abbett Series Fund, Inc.
Mid-Cap Value Portfolio
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
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1
LORD ABBETT January 1, 1999
Statement of Additional Information
Lord Abbett Series Fund, Inc.
Mid-Cap Value Portfolio
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This Statement of Additional Information is not a Prospectus. A Prospectus may
be obtained from Lord Abbett Distributor LLC ("Lord Abbett Distributor") at the
General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203. This
Statement relates to, and should be read in conjunction with, the Prospectus
dated January 1, 1999
Lord Abbett Series Fund, Inc. (sometimes referred to as "we" or the "Fund") was
incorporated under Maryland law in 1989. The Fund has 1,000,000,000 shares of
authorized capital stock consisting of four portfolios. This Statement of
Additional Information offers the Variable Contract shares of the Mid-Cap Value
Portfolio (the "Portfolio"). They are fully paid and nonassessable when issued
and have no preemptive or conversion rights. Although no present plans exist to
do so, further portfolios may be added in the future. The Investment Company Act
of 1940, as amended (the "Act"), requires that where more than one series
exists, each series must be preferred over all other series in respect of assets
specifically allocated to such series.
Rule 18f-2 under the Act provides that any matter required to be submitted, by
the provisions of the Act or applicable state law or otherwise, to the holders
of the outstanding voting securities of an investment company such as the Fund
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each class affected by such
matter. Rule 18f-2 further provides that a class shall be deemed to be affected
by a matter unless the interests of each class in the matter are substantially
identical or the matter does not affect any interest of such class. However, the
Rule exempts the selection of independent public accountants, the approval of a
contract with a principal underwriter and the election of directors from its
separate voting requirements.
Shareholder inquiries should be made by writing directly to the Fund or by
calling 800-874-3733.
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TABLE OF CONTENTS Page
1. Investment Policies 3
2. Directors and Officers 4
3. Investment Advisory and Other Services 8
4. Portfolio Transactions 9
5. Purchases, Redemptions and Shareholder
Services 12
6. Past Performance 13
7. Taxes 14
8. Information About the Fund 14
1. Investment Policies
Fundamental Investment Restrictions
We are subject to the following investment restrictions which cannot be changed
without approval of a majority of our outstanding shares. The Portfolio may not:
(1) borrow money, except that (i) the Portfolio may borrow from banks (as
defined in the Investment Company Act of 1940, as amended (the "Act")) in
amounts up to 33 1/3% of its total assets (including the amount borrowed), (ii)
the Portfolio may borrow up to an additional 5% of its total assets for
temporary purposes, (iii) the Portfolio may obtain such short-term credit as may
be necessary for the clearance of purchases and sales of portfolio securities
and (iv) the Portfolio may purchase securities on margin to the extent permitted
by applicable law; (2) pledge its assets (other than to secure borrowings, or to
the extent permitted by the Portfolio's investment policies as permitted by
applicable law); (3) engage in the underwriting of securities, except pursuant
to a merger or acquisition or to the extent that, in connection with the
disposition of its portfolio securities, it may be deemed to be an underwriter
under federal securities laws; (4) make loans to other persons, except that the
acquisition of bonds, debentures or other corporate debt securities and
investment in government obligations, commercial paper, pass-through
instruments, certificates of deposit, bankers acceptances, repurchase agreements
or any similar instruments shall not be subject to this limitation, and except
further that the Portfolio
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3
may lend its portfolio securities, provided that the lending of portfolio
securities may be made only in accordance with applicable law; (5) buy or sell
real estate (except that the Portfolio may invest in securities directly or
indirectly secured by real estate or interests therein or issued by companies
which invest in real estate or interests therein) or commodities or commodity
contracts (except to the extent the Portfolio may do so in accordance with
applicable law and without registering as a commodity pool operator under the
Commodity Exchange Act as, for example, with futures contracts); (6) with
respect to 75% of the gross assets of the Portfolio, buy securities of one
issuer representing more than (i) 5% of the Portfolio's gross assets, except
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities or (ii) 10% of the voting securities of such issuer; (7)
invest more than 25% of its assets, taken at market value, in the securities of
issuers in any particular industry (excluding securities of the U.S. Government,
its agencies and instrumentalities); or (8) issue senior securities to the
extent such issuance would violate applicable law.
With respect to the restrictions mentioned herein, compliance therewith will not
be affected by changes in the market value of portfolio securities but will be
determined at the time of purchase or sale of such securities.
Non-Fundamental Investment Restrictions. In addition to the investment
restrictions above which cannot be changed without shareholder approval, we also
are subject to the following non-fundamental investment policies which may be
changed by the Board of Directors without shareholder approval. The Portfolio
may not: (1) borrow in excess of 33 1/3% of its total assets (including the
amount borrowed), and then only as a temporary measure for extraordinary or
emergency purposes; (2) make short sales of securities or maintain a short
position except to the extent permitted by applicable law; (3) invest knowingly
more than 15% of its net assets (at the time of investment) in illiquid
securities, except for securities qualifying for resale under Rule 144A of the
Securities Act of 1933, deemed to be liquid by the Board of Directors; (4)
invest in the securities of other investment companies except as permitted by
applicable law; (5) invest in securities of issuers which, with their
predecessors, have a record of less than three years' continuous operations, if
more than 5% of the Portfolio's total assets would be invested in such
securities (this restriction shall not apply to mortgage-backed securities,
asset-backed securities or obligations issued or guaranteed by the U. S.
Government, its agencies or instrumentalities); (6) hold securities of any
issuer if more than 1/2 of 1% of the securities of such issuer are owned
beneficially by one or more officers or directors of the Fund or by one or more
partners or members of the Fund's underwriter or investment adviser if these
owners in the aggregate own beneficially more than 5% of the securities of such
issuer; (7) invest in warrants if, at the time of the acquisition, its
investment in warrants, valued at the lower of cost or market, would exceed 5%
of the Portfolio's total
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4
assets (included within such limitation, but not to exceed 2% of the Portfolio's
total assets, are warrants which are not listed on the New York or American
Stock Exchange or a major foreign exchange); (8) invest in real estate limited
partnership interests or interests in oil, gas or other mineral leases, or
exploration or other development programs, except that the Portfolio may invest
in securities issued by companies that engage in oil, gas or other mineral
exploration or other development activities; (9) write, purchase or sell puts,
calls, straddles, spreads or combinations thereof, except to the extent
permitted in the Portfolio's prospectus and statement of additional information,
as they may be amended from time to time; or (10) buy from or sell to any of its
officers, directors, employees, or its investment adviser or any of its
officers, directors, partners or employees, any securities other than shares of
the Portfolio's common stock.
Under normal circumstances, at least 65% of the Portfolio's total assets will
consist of investments in mid-cap companies, determined at the time of purchase.
"Mid-cap" companies are defined for this purpose as companies whose outstanding
equity securities have an aggregate market value of between $500,000,000 and
$5,000,000,000.
Although it has no current intention to do so, the Portfolio may invest in
financial futures and options on financial futures.
Portfolio Turnover Rate. For the first year of operation, our portfolio turnover
is expected to be between 30% and 75%.
2. Directors and Officers
The following director is a partner of Lord, Abbett & Co. ("Lord Abbett"), The
General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203. He has
been associated with Lord Abbett for over five years and is also an officer
and/or director or trustee of the twelve other Lord Abbett-sponsored funds. He
is an "interested person" as defined in the Act.
Robert S. Dow, age 53, Chairman and President
The following outside directors are also directors or trustees of the twelve
other Lord Abbett-sponsored funds referred to above.
E. Thayer Bigelow
Courtroom Television Network
600 Third Avenue
<PAGE>
5
New York, New York
Chief Executive Officer of Courtroom Television Network. Formerly President and
Chief Executive Officer of Time Warner Cable Programming, Inc. Prior to that,
President and Chief Operating Officer of Home Box Office. Age 57.
William H.T. Bush
Bush-O'Donnell & Co., Inc.
101 South Hanley Road, Suite 1025
St. Louis, Missouri
Co-founder and Chairman of the Board of the financial advisory firm of
Bush-O'Donnell & Co. Age 60.
Robert Calhoun, Jr.
Monitor Clipper Partners
650 Madison Avenue, 9th Floor
New York, New York
Managing Director of Monitor Clipper Partners and President of The Clipper
Group, both private equity investment funds. Age 56.
Stewart S. Dixon
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois
Partner in the law firm of Wildman, Harrold, Allen & Dixon. Age 68.
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a
proxy tabulating firm. Age 73.
C. Alan MacDonald
Directorship, Inc.
8 Sound Shore Drive
Greenwich, Connecticut
<PAGE>
6
Managing Director of Directorship Inc., a consultancy in board management and
corporate governance. Formerly General Partner, The Marketing Partnership, Inc.,
a full service marketing consulting firm (1994-1997). Prior to that, Chairman
and Chief Executive Officer of Lincoln Snacks, Inc., manufacturer of branded
snack foods (1992-1994). His career spans 36 years at Stouffers and Nestle with
18 of the years as Chief Executive Officer. Currently serves as Director of
DenAmerica Corp., J.B. Williams Company, Inc., Fountainhead Water Company and
Exigent Diagnostics. Age 65.
Hansel B. Millican, Jr.
Rochester Button Company
1100 Noblin Avenue
South Boston, Virginia
President and Chief Executive Officer of Rochester Button Company. Age 70.
Thomas J. Neff
Spencer Stuart U.S.
277 Park Avenue
New York, New York
Chairman of Spencer Stuart U.S., an executive search consulting firm. Age 61.
The second column of the following table sets forth the compensation accrued for
the Fund's outside directors. The third and fourth columns set forth information
with respect to the equity-based benefits accrued for outside directors/trustees
maintained by the Lord Abbett-sponsored funds. The fourth column sets forth the
total compensation payable by such funds to the outside directors/trustees. No
director of the Fund associated with Lord Abbett and no officer of the Fund
received any compensation from the Fund for acting as a director or officer.
<PAGE>
7
For the Fiscal Year Ended December 31, 1997
(1) (2) (3) (4)
Pension or For Year Ended
Proposed Retirement Benefits December 31, 1997
Aggregate Accrued by the Total Compensation
Compensation Fund and Accrued by the Fund
Accrued by Twelve Other Lord and Twelve Other Lord
the Abbett-sponsored Abbett-sponsored
Name of Director Portfolio (1) Funds(2) Funds(3)
- ---------------- ------------- -------- --------
E. Thayer Bigelow $ 1,000 $17,068 $56,000
William H.T. Bush* $ 1,000 $0 $0
Robert Calhoun, Jr.** $ 1,000 $0 $0
Stewart S. Dixon $ 1,000 $32,190 $55,000
John C. Jansing $ 1,000 $45,085(4) $55,000
C. Alan MacDonald $ 1,000 $30,703 $57,400
Hansel B. Millican, Jr $ 1,000 $37,747 $55,000
Thomas J. Neff $ 1,000 $19,853 $56,000
* Elected director, June 17, 1998, effective as of August 13, 1998.
** Elected director, May 5, 1998, effective as of June 17, 1998.
1. Outside directors' fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored funds based on the
net assets of each fund. The Portfolio has not begun paying such fees.
When the Portfolio starts to pay such fees, a portion of the fees payable
by the Portfolio to its outside directors/trustees will be deferred under
a plan that deems the deferred amounts to be invested in shares of the
Portfolio for later distribution to the directors/trustees. Mr. Bush and
Mr. Calhoun joined each of the boards of directors/trustees in 1998 and
consequently the Funds did not accrue compensation for them in 1997.
2. The amounts in Column 3 were accrued by the Lord Abbett-sponsored funds
for the year ended December 31, 1997, with respect to the equity based
plans established for independent directors in 1996. This plan superseded
a previously approved retirement plan for all future directors. Current
directors had the option to convert their accrued benefits under the
retirement plan. All of the outside directors except one made such an
election.
3. This column shows aggregate compensation, including directors' fees and
attendance fees for board and committee meetings, of a nature referred to
in footnote one, accrued by the Lord Abbett-sponsored funds during the
year ended December 31, 1997.
<PAGE>
8
4. Mr. Jansing chose to continue to receive benefits under the retirement
plan which provides that outside directors/trustees may receive annual
retirement benefits for life equal to their final annual retainer
following retirement at or after age 72 with at least ten years of
service. Thus, if Mr. Jansing were to retire and the annual retainer
payable by the funds were the same as it is today, he would receive annual
retirement benefits of $50,000.
Except where indicated, the following executive officers of the Fund have been
associated with Lord Abbett for over five years. Of the following, Messrs.
Brown, Carper, Hilstad, Hudson, Morris, Towle and Walsh are partners of Lord
Abbett; the others are employees: W. Thomas Hudson, Jr., age 56; Edward K. von
der Linde, age 38; Christopher Taylor, age 40 (Managing Director of Fuji
Lord-Abbett International, Ltd.); Christopher J. Towle, age 41; Executive Vice
Presidents; Paul A. Hilstad, age 56, Vice President and Secretary (with Lord
Abbett since 1995; formerly Senior Vice President and General Counsel of
American Capital Management & Research, Inc.); Zane E. Brown, age 47; Daniel E.
Carper, age 47; Lawrence H. Kaplan, age 41 (with Lord Abbett since 1997,
formerly Vice President and Chief Counsel of Salomon Brothers Asset Management
Inc. from 1995 to 1997, before that Senior Vice President, Director and General
Counsel of Kidder Peabody Asset Management, Inc.); Thomas F. Konop, age 56;
Robert G. Morris, age 53; A. Edward Oberhaus, age 38; Keith F. O'Connor, age 43;
John J. Walsh, age 62, Vice Presidents; and Donna M. McManus, age 38, Treasurer
(with Lord Abbett since 1996, formerly a Senior Manager at Deloitte & Touche
LLP).
The Fund's By-Laws provide that the Fund shall not hold an annual meeting of
stockholders unless one or more matters are required to be acted on by
shareholders under the Act or unless called by a majority of the Board of
Directors by the holders of at least one-quarter of the shares of the Fund
outstanding and entitled to vote at the meeting.
As of October 31, 1998 our directors and officers, as a group, owned less than
1% of our outstanding shares.
3. Investment Advisory and Other Services
<PAGE>
9
As described under "Our Management" in the Prospectus, Lord Abbett is the
investment manager for the Portfolio. The eight general partners of Lord Abbett
who are officers and/or directors of the Fund, are: Zane E. Brown, Daniel E.
Carper, Robert S. Dow, Paul A. Hilstad, W. Thomas Hudson, Jr., Robert G. Morris,
Christopher J. Towle and John J. Walsh. The address of each partner is The
General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203. The
other general partners of Lord Abbett who are neither officers nor directors of
the Fund are Stephen I. Allen, John E. Erard, Robert P. Fetch, Daria L. Foster,
Robert Gerber, Stephen I. McGruder, Michael McLaughlin, Robert J. Noelke and R.
Mark Pennington.
The services performed by Lord Abbett are described under "Our Management" in
the Prospectus. Under the Management Agreement, the Portfolio is obligated to
pay Lord Abbett a monthly fee, based on average daily net assets for each month,
at the annual rate of .75 of 1%.
Although not obligated to do so, Lord Abbett has waived or may waive all or part
of its management fees and has assumed or may assume other expenses of the
Portfolio.
As discussed in the Prospectus under "Our Management," the Portfolio is
contingently obligated to repay to Lord Abbett the amounts of such assumed other
expenses.
The Portfolio pays all expenses not expressly assumed by Lord Abbett, including,
without limitation, outside directors' fees and expenses, association membership
dues, legal and auditing fees, taxes, transfer and dividend disbursing agent
fees, shareholder servicing costs, expenses relating to shareholder meetings,
expenses of preparing, printing and mailing stock certificates and shareholder
reports, expenses of registering our shares under federal and state securities
laws, expenses of preparing, printing and mailing prospectuses to existing
shareholders, insurance premiums, brokerage and other expenses connected with
executing portfolio transactions.
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10128, are
the independent auditors of the Fund and must be approved at least annually by
our directors to continue in such capacity. Deloitte & Touche LLP perform audit
services for the Fund including the examination of financial statements included
in our annual report to shareholders.
The Bank of New York ("BNY"), 48 Wall Street, New York, New York 10286, is the
Fund's custodian.
<PAGE>
10
4. Portfolio Transactions
Our policy is to obtain best execution on all our portfolio transactions, which
means that we seek to have purchases and sales of portfolio securities executed
at the most favorable prices, considering all costs of the transaction including
brokerage commissions and dealer markups and markdowns and taking into account
the full range and quality of the brokers' services. Consistent with obtaining
best execution, the Fund may pay, as described below, a higher commission than
some brokers might charge on the same transaction. This policy governs the
selection of brokers or dealers and the market in which the transaction is
executed. To the extent permitted by law, we may, if considered advantageous,
make a purchase from or sale to another Lord Abbett-sponsored fund without the
intervention of any broker-dealer.
Broker-dealers are selected on the basis of their professional capability and
the value and quality of their brokerage and research services. Normally, the
selection is made by traders who are officers of the Fund and also are employees
of Lord Abbett. These traders do the trading as well for other accounts --
investment companies (of which they are also officers) and other investment
clients -- managed by Lord Abbett.
In transactions on stock exchanges in the United States, commissions are
negotiated, whereas on many foreign stock exchanges commissions are fixed. In
the case of securities traded in the foreign and domestic over-the-counter
markets, there is generally no stated commission, but the price usually includes
an undisclosed commission or markup. Purchases from underwriters of newly-issued
securities for inclusion in the Fund's portfolios usually will include a
concession paid to the underwriter by the issuer and purchases from dealers
serving as market makers will include the spread between the bid and asked
prices. When commissions are negotiated, we pay a commission rate that we
believe is appropriate to give maximum assurance that our brokers will provide
us, on a continuing basis, the highest level of brokerage services available.
While we do not always seek the lowest possible commission on particular trades,
we pay a commission rate that we believe is appropriate to give maximum
assurance that our brokers will provide us, on a continuing basis, the highest
level of brokerage services available. While we do not always seek the lowest
possible commissions on particular trades, we believe that our commission rates
are in line with the rates that many other institutions pay. Our traders are
authorized to pay brokerage commissions in excess of those that other brokers
might accept on the same transactions in recognition of the value of the
services performed by the executing brokers, viewed in terms of either the
particular transaction or the overall responsibilities of Lord Abbett with
respect to us and the other accounts they manage. Such services include showing
us trading opportunities including blocks, a willingness and ability to take
positions in securities, knowledge of a particular security
<PAGE>
11
or market, proven ability to handle a particular type of trade, confidential
treatment, promptness and reliability.
Some of our brokers also provide research services at least some of which are
useful to Lord Abbett in their overall responsibilities with respect to us and
the other accounts they manage. Research includes the furnishing of analyses and
reports concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts and trading equipment and
computer software packages, acquired from third-party suppliers, that enable
Lord Abbett to access various information bases. Such services may be used by
Lord Abbett in servicing all their accounts, and not all of such services will
necessarily be used by Lord Abbett in connection with their management of the
Fund; conversely, such services furnished in connection with brokerage on other
accounts managed by Lord Abbett may be used in connection with their management
of the Fund; and not all of such services will necessarily be used by Lord
Abbett in connection with their advisory services to such other accounts. We
have been advised by Lord Abbett that research services received from brokers
cannot be allocated to any particular account, are not a substitute for Lord
Abbett's services but are supplemental to their own research effort and, when
utilized, are subject to internal analysis before being incorporated by Lord
Abbett into their investment process. As a practical matter, it would not be
possible for Lord Abbett to generate all of the information presently provided
by brokers. While receipt of research services from brokerage firms has not
reduced Lord Abbett's normal research activities, the expenses of Lord Abbett
could be materially increased if it attempted to generate such additional
information through its own staff and purchased such equipment and software
packages directly from the suppliers.
No commitments are made regarding the allocation of brokerage business to or
among brokers, and trades are executed only when they are dictated by investment
decisions of the Fund to purchase or sell portfolio securities.
If two or more broker-dealers are considered capable of offering the equivalent
likelihood of best execution, the broker-dealer who has sold our shares and/or
shares of other Lord Abbett-sponsored funds may be preferred.
If other clients of Lord Abbett buy or sell the same security at the same time
as we do, transactions will, to the extent practicable, be allocated among all
participating accounts in proportion to the amount of each order and will be
executed daily until filled so that each account shares the average price and
commission cost of each day. Other clients who direct that their brokerage
business be placed with specific brokers or who invest through wrap accounts
introduced to Lord Abbett by certain brokers may not participate
<PAGE>
12
with us in the buying and selling of the same securities as described above. If
these clients wish to buy or sell the same security as we do, they may have
their transactions executed at times different from our transactions and thus
may not receive the same price or incur the same commission cost as we do.
We will not seek "reciprocal" dealer business (for the purpose of applying
commissions in whole or in part for our benefit or otherwise) from dealers as
consideration for the direction to them of portfolio business.
5. Purchases, Redemptions and Shareholder Services
Securities in the Fund's portfolios are valued at their market values as of the
close of the NYSE. Market value will be determined as follows: securities listed
or admitted to trading privileges on any national or foreign securities exchange
are valued at the last sales price on the principal securities exchange on which
such securities are traded, or, if there is no sale, at the mean between the
last bid and asked prices on such exchange, or, in the case of bonds, in the
over-the-counter market if, in the judgment of the Fund's officers, that market
more accurately reflects the market value of the bonds. Securities traded only
in the over-the-counter market are valued at the mean between the bid and asked
prices, except that securities admitted to trading on the NASDAQ National Market
System are valued at the last sales price. Securities for which market
quotations are not available are valued at fair value under procedures approved
by the Board of Directors. All assets and liabilities expressed in foreign
currencies will be converted into United States dollars at the mean between the
buying and selling rates of such currencies against United States dollars last
quoted by any major bank. If such quotations are not available, the rate of
exchange will be determined in accordance with policies established by the
Fund's Board of Directors. The Board of Directors will monitor, on an ongoing
basis, the Fund's method of valuation.
Information concerning how we value our Shares for the purchase and redemption
of our Shares is described in the Prospectus under "Purchases and Redemptions."
As disclosed in the Prospectus, we calculate our net asset values and are
otherwise open for business on each day that the NYSE is open for trading. The
NYSE is closed on Saturdays and Sundays and the following holidays -- New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
The Fund has entered into a distribution agreement with Lord Abbett Distributor
LLC, a New York limited liability company ("Lord Abbett Distributor"), under
which Lord Abbett Distributor is obligated to use its best efforts to find
purchasers for the shares of
<PAGE>
13
the Fund, and to make reasonable efforts to sell Fund shares so long as, in Lord
Abbett Distributor's judgment, a substantial distribution can be obtained by
reasonable efforts.
Shareholder Servicing Plan. As described in the Prospectus, under the
Shareholder Servicing Plan (the "Plan"), the Portfolio, on behalf of the Class,
may make payments to Lord Abbett Distributor for remittance to a Life Company
for certain shareholder servicing activities of such Life Company, provided that
such remittances in the aggregate do not exceed 0.25 of 1%, on an annual basis,
of the average daily net asset value of shares of the Portfolio sold to such
Life Company to be used as the underlying investment for variable life insurance
and variable annuity contracts ("Variable Contracts").
The Plan is intended to provide additional incentives to Life Companies to
provide continuiing information and investment services to variable life
insurance policyholders and variable annuity contract owners who invest in the
Portfolio and to encourage such persons to remain invested in the Portfolio.
Variable annuity contract owners should refer to the fee table section of their
separate account prospectuses for further information with respect to the effect
of the Plan on their annuity contract expenses.
6. Past Performance
The Portfolio computes the average annual compounded rate of total return for
the Variable Contract Class during specified periods that would equate the
initial amount invested to the ending redeemable value of such investment by
adding one to the computed average annual total return, raising the sum to a
power equal to the number of years covered by the computation and multiplying
the result by $1,000, which represents a hypothetical initial investment. The
calculation assumes deduction of the maximum sales charge (as described in the
next paragraph) from the amount invested and reinvestment of all income
dividends and capital gains distributions on the reinvestment dates at net asset
value. The ending redeemable value is determined by assuming a complete
redemption at the end of the period(s) covered by the average annual total
return computation.
The Portfolio's yield quotation for each class is based on a 30-day period ended
on a specified date, computed by dividing the Portfolio's net investment income
per share earned during the period by such Portfolio' maximum offering price per
share on the last day of the period. This is determined by finding the following
quotient: take the dividends and interest earned during the period minus its
expenses accrued for the period and divide by the product of (i) the average
daily number of Class shares outstanding during the period that were entitled to
receive dividends and (ii) the Portfolio's maximum
<PAGE>
14
offering price per share on the last day of the period. To this quotient add
one. This sum is multiplied by itself five times. Then one is subtracted from
the product of this multiplication and the remainder is multiplied by two.
These figures represent past performance, and an investor should be aware that
the investment return and principal value of a Fund investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. Therefore, there is no assurance that this performance will be
repeated in the future.
7. Taxes
The Fund intends to qualify as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986, as amended. Under such provisions, the
Fund will not be subject to Federal income tax on that part of its net ordinary
income and net realized capital gains which it distributes to shareholders. The
Portfolio will be treated as a separate entity for Federal income tax purposes
and, therefore, the investments and results of the Portfolio are determined
separately for purposes of determining whether the Fund qualifies as a regulated
investment company and for purposes of determining the Fund's net ordinary
income (or loss) and net realized capital gains (or losses). To qualify for
treatment as a regulated investment company, the Fund must, among other things,
derive in each taxable year at least 90% of its gross income from dividends,
interest and gains from the sale or other disposition of securities and certain
other related income.
8. Information About the Fund
The directors, trustees and officers of Lord Abbett-sponsored mutual funds,
together with the partners and employees of Lord Abbett, are permitted to
purchase and sell securities for their personal investment account. In engaging
in personal securities transactions, however, such persons are subject to
requirements and restrictions contained in the Fund's Code of Ethics which
complies, in substance, with each of the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing. Among other things,
the Code requires that Lord Abbett partners and employees obtain advance
approval before buying or selling securities, submit confirmations and quarterly
transaction reports, and obtain approval before becoming a director of any
company; and it prohibits such persons from investing in a security seven days
before or after any Lord Abbett-sponsored fund trades in such security,
profiting from trades of the same security within 60 days and trading on
material non-public information. The Code imposes similar requirements and
restrictions on the independent directors of the Fund to the extent contemplated
by the recommendations of such Advisory Group.
<PAGE>
PART C OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
Not applicable.
(b) Exhibits -
[to be supplied in subsequent filing]
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
Item 26. NUMBER OF RECORD HOLDERS OF SECURITIES
None.
Item 27. INDEMNIFICATION
Registrant is incorporated under the laws of the State of Maryland and is
subject to Section 2-418 of the Corporations and Associations Article of the
Annotated Code of the State of Maryland controlling the indemnification of the
directors and officers. Since Registrant has its executive offices in the State
of New York, and is qualified as a foreign corporation doing business in such
State, the persons covered by the foregoing statute may also be entitled to and
subject to the limitations of the indemnification provisions of Section 721-726
of the New York Business Corporation Law.
The general effect of these statutes is to protect officers, directors and
employees of Registrant against legal liability and expenses incurred by reason
of their positions with the Registrant. The statutes provide for indemnification
for liability for proceedings not brought on behalf of the corporation and for
those brought on behalf of the corporation, and in each case place conditions
under which indemnification will be permitted, including requirements that the
officer, director or employee acted in good faith. Under certain conditions,
payment of expenses in advance of final disposition may be permitted. The
By-laws of Registrant, without limiting the authority of Registrant to indemnify
any of its officers, employees or agents to the extent consistent with
applicable law, make the indemnification of its directors mandatory subject only
to the conditions and limitations
<PAGE>
2
imposed by the above-mentioned Section 2-418 of Maryland law and by the
provisions of Section 17(h) of the Investment Company Act of 1940 as interpreted
and required to be implemented by SEC Release No. IC-11330 of September 4, 1980.
In referring in its By-laws to, and making indemnification of directors subject
to the conditions and limitations of, both Section 2-418 of the Maryland law and
Section 17(h) of the Investment Company Act of 1940, Registrant intends that
conditions and limitations on the extent of the indemnification of directors
imposed by the provisions of either Section 2-418 or Section 17(h) shall apply
and that any inconsistency between the two will be resolved by applying the
provisions of said Section 17(h) if the condition or limitation imposed by
Section 17(h) is the more stringent. In referring in its By-laws to SEC Release
No. IC-11330 as the source for interpretation and implementation of said Section
17(h), Registrant understands that it would be required under its By-laws to use
reasonable and fair means in determining whether indemnification of a director
should be made and undertakes to use either (1) a final decision on the merits
by a court or other body before whom the proceeding was brought that the person
to be indemnified ("indemnitee") was not liable to Registrant or to its security
holders by reason of willful malfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office
("disabling conduct") or (2) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of such disabling conduct, by (a) the vote of a majority of a
quorum of directors who are neither "interested persons" (as defined in the 1940
Act) of Registrant nor parties to the proceeding, or (b) an independent legal
counsel in a written opinion. Also, Registrant will make advances of attorneys'
fees or other expenses incurred by a director in his defense only if (in
addition to his undertaking to repay the advance if he is not ultimately
entitled to indemnification) (1) the indemnitee provides a security for his
undertaking, (2) Registrant shall be insured against losses arising by reason of
any lawful advances, or (3) a majority of a quorum of the non-interested,
non-party directors of Registrant, or an independent legal counsel in a written
opinion, shall determine, based on a review of readily available facts, that
there is reason to believe that the indemnitee ultimately will be found entitled
to indemnification.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expense incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the
<PAGE>
3
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
In addition, Registrant maintains a directors' and officers' errors and
omissions liability insurance policy protecting directors and officers against
liability for breach of duty, negligent act, error or omission committed in
their capacity as directors or officers. The policy contains certain exclusions,
among which is exclusion from coverage for active or deliberate dishonest or
fraudulent acts and exclusion for fines or penalties imposed by law or other
matters deemed uninsurable.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Lord, Abbett & Co. acts as investment adviser for twelve other open-end
investment companies (of which it is principal underwriter for thirteen) and as
investment adviser to approximately 6,220 private accounts as of December 31,
1997. Other than acting as directors and/or officers of open-end investment
companies sponsored by Lord, Abbett & Co., none of Lord, Abbett & Co.'s partners
has, in the past two fiscal years, engaged in any other business, profession,
vocation or employment of a substantial nature for his own account or in the
capacity of director, officer, employee, or partner of any entity except as
follows:
John J. Walsh
Trustee
The Brooklyn Hospital Center
100 Parkside Avenue
Brooklyn, N.Y.
Item 29.(a) PRINCIPAL UNDERWRITER
Lord Abbett Mid-Cap Value Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett Global Fund, Inc.
Lord Abbett Series Fund, Inc.
Lord Abbett U.S. Government Money Market Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Tax-Free Income Trust
<PAGE>
4
Lord Abbett Securities Trust
Lord Abbett Investment Trust
Lord Abbett Research Fund, Inc.
INVESTMENT ADVISOR
American Skandia Trust (Lord Abbett Growth & Income Portfolio)
(b) The partners of Lord, Abbett & Co. are:
Name and Principal Positions and Offices
Business Address (1) With Registrant
Robert S. Dow Chairman and President
Paul A. Hilstad Vice President & Secretary
Zane E. Brown Vice President
Daniel E. Carper Vice President
W. Thomas Hudson, Jr. Vice President
Robert G. Morris Vice President
Christopher J. Towle Vice President
John J. Walsh Vice President
The other general partners of Lord Abbett & Co. who are neither officers nor
directors of the Registrant are Stephen I. Allen, John E. Erard, Robert P.
Fetch, Daria L. Foster, Robert Gerber, Stephen I. McGruder, Michael McLaughlin,
Robert J. Noelke and R. Mark Pennington.
(1) Each of the above has a principal business address: 767 Fifth
Avenue, New York, NY 10153
(c) Not applicable
Item 30. LOCATION OF ACCOUNTS AND RECORDS
Registrant maintains the records, required by Rules 31a-1(a) and (b), and
31a-2(a) at its main office.
Lord, Abbett & Co. maintains the records required by Rules 31a-1(f) and 31a-2(e)
at its main office.
<PAGE>
5
Certain records such as canceled stock certificates and correspondence may be
physically maintained at the main office of the Registrant's Transfer Agent,
Custodian, or Shareholder Servicing Agent within the requirements of Rule 31a-3.
Item 31. MANAGEMENT SERVICES
(a) None
Item 32. UNDERTAKINGS
(c) Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of Registrant's latest annual report to shareholders, upon
request and without charge. Registrant undertakes, if requested to do so by the
holders of at least 10% of Registrant's outstanding shares, to call a meeting of
shareholders for the purpose of voting upon the question of removal of a
director or directors and to assist in communications with other shareholders as
required by Section 16(c).
<PAGE>
6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant has duly caused this Registration Statement
and/or any amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on the
___ day of November, 1998.
LORD ABBETT SERIES FUND, INC.
By /s/ Robert S. Dow
----------------------------
Robert S. Dow,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Chairman, President
/s/ Robert S. Dow and Director , 1998
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Robert S. Dow (Title) (Date)
Vice President and
/s/ Keith F. O'Connor Chief Financial Officer , 1998
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Keith F. O'Connor (Title) (Date)
/s/ Stewart S. Dixon Director , 1998
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Stewart S. Dixon (Title) (Date)
/s/ John C. Jansing Director , 1998
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John C. Jansing (Title) (Date)
/s/ C. Alan MacDonald Director , 1998
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C. Alan MacDonald (Title) (Date)
/s/ Hansel B. Millican Director , 1998
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Hansel B. Millican, Jr. (Title) (Date)
/s/ Thomas J. Neff Director , 1998
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Thomas J. Neff (Title) (Date)
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/s/ E. Thayer Bigelow Director , 1998
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E. Thayer Bigelow (Title) (Date)
/s/ Robert B. Calhoun Jr. Director , 1998
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Robert B. Calhoun Jr. (Title) (Date)
/s/ William H.T. Bush Director , 1998
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William H.T. Bush (Title) (Date)
