1933 Act File No. 33-33225
1940 Act File No. 811-6033
SECURITIES & EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [x]
OF 1940 [x]
Amendment No. 8
LORD ABBETT EQUITY FUND
(Formerly Lord Abbett Guaranteed Equity Fund)
Exact Name of Registrant as Specified in Declaration of Trust
767 Fifth Avenue, New York, N.Y. 10153
Address of Principal Executive Office
Registrant's Telephone Number (212) 848-1800
Kenneth B. Cutler, Vice President & Secretary
767 Fifth Avenue, New York, N.Y. 10153
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box)
X immediately on filing pursuant to paragraph (b) of Rule 485
on (date) pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a)(1) of Rule 485
on (date) pursuant to paragraph (a)(1) of Rule 485
75 days after filing pursuant to paragraph (a)(2) of Rule 485
on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
this post-effective amendment designates a new effective date for
a previously filed post-effective amendment
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1). Pursuant to Rule
24f-2(b)(2), Registrant need not file a Rule 24f-2 Notice as no
securities were sold during Registrant's most recent fiscal year.
<PAGE>
LORD ABBETT EQUITY FUND (1990 Series)
FORM N-1A
Cross Reference Sheet
Post-Effective Amendment No. 8
Pursuant to Rule 481(a)
Form N-1A Location In Prospectus or
Item No. Statement of Additional Information
1 N/A
2 N/A
3 N/A
4 (a) (i) Cover Page
4 (a) (ii) How the Fund Invests
4 (b) (c) How the Fund Invests
5 (a) Management
5 (b) Management; Back Cover Page
5 (c) Management*
6 (a) Cover Page
6 (b) (c) (d) N/A
6 (e) Cover Page
6 (f) (g) Dividends, Capital Gains
Distributions and Taxes; Taxes*
7 (a) Back Cover Page
7 (b) (c) (d) Purchases
7 (e) Purchases*
7 (f) Purchases*
8 (a) (b) (d) Redemptions*
8 (c) N/A
9 N/A
10 Cover Page
11 Cover Page -- Table of Contents
12 Cover Page
13 (a) (b) (c) Investment Objectives and Policies*
13 (d) N/A
14 Trustees and Officers
15 (a) (b) N/A
15 (c) Trustees and Officers*
16 (a) (i) Investment Advisory and Other
Services
16 (a) (ii) Trustees and Officers
16 (a) (iii) Investment Advisory and Other
Services*
16 (b) Investment Advisory and Other
Services
16 (c) (d) (e) (g) N/A
16 (f) (h) Investment Advisory and Other
Services*
16 (i) N/A
17 (a) Portfolio Transactions*
17 (b) N/A
17 (c) Portfolio Transactions
17 (d) (e) N/A
18 (a) Further Information about the Fund
18 (b) N/A
Shareholder Services;* Notes
19 (a) (b) to Financial Statements
19 (c) N/A
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20 Taxes
21 (a) Purchases, Redemptions and
Shareholder Services
21 (b) (c) N/A
22 N/A
22 (b) Past Performance
23 Financial Statements*
* Including Supplement dated September 14, 1995.
<PAGE>
LORD ABBETT EQUITY FUND - 1990 SERIES
SUPPLEMENT DATED SEPTEMBER 14, 1995
The following supplements and amends the disclosure contained
in the specified sections of Parts A and B of the Registration
Statement pertaining to the 1990 Series of shares of the Registrant
filed April 9, 1990, as thereafter supplemented.
PART A
(Prospectus dated April 9, 1990, as thereafter supplemented)
MANAGEMENT
For the fiscal year ended May 31, 1995, the actual management
fee paid by the Fund to Lord, Abbett & Co. ("Lord Abbett") amounted to
.65 of 1% of the Fund's average daily net assets, and the total
expenses of the Fund were 1.80% of its average net assets. The Fund's
total expenses would have been 1.81% of its average net assets had Lord
Abbett not waived a portion of its management fee.
Mr. John J. Walsh, Vice President of the Fund, is a partner of
Lord Abbett and has served as portfolio manager of the Fund since
1990. Mr. Walsh has been with Lord Abbett since 1960.
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PART B
(Statement of Additional Information dated April 9, 1990,
as thereafter supplemented)
TRUSTEES AND OFFICERS
The following trustees are partners of Lord Abbett, The
General Motors Building, 767 Fifth Avenue, New York, New York
10153-0203. They have been associated with Lord Abbett for over five
years and are also officers and/or directors or trustees of the fifteen
other Lord Abbett- sponsored funds (except for Mr. Dow, who is not a
director of Lord Abbett Research Fund, Inc.). They are "interested
persons" as defined in the Investment Company Act of 1940, as amended
(the "Act"), and as such, may be considered to have an indirect
financial interest in the Rule 12b-1 Plan described in the Prospectus.
Ronald P. Lynch, Chairman and President
Robert S. Dow, Vice President
The following outside trustees are also directors or trustees
of the fifteen other Lord Abbett-sponsored funds (except for Lord
Abbett Research Fund, Inc., of which only Messrs. Millican and Neff are
directors.)
E. Thayer Bigelow
Time Warner Cable
300 First Stamford Place
Stamford, Connecticut
President and Chief Executive Officer of Time Warner Cable Programming,
Inc. Formerly President and Chief Operating Officer of Home Box Office,
Inc. Age 54.
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 64.
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of
America, a proxy tabulating firm. Age 69.
C. Alan MacDonald
The Marketing Partnership, Inc.
27 Signal Road
Stamford, Connecticut
General Partner, The Marketing Partnership, Inc., a full service
marketing consulting firm that specializes in strategic planning and
customer- specific marketing. Formerly Acquisition Consultant, The Noel
Group, a private consulting firm (1994). Formerly Chairman and Chief
Executive Officer of Lincoln Foods, Inc., manufacturer of branded snack
foods (1992- 1994). Formerly President and Chief Executive Officer of
Nestle Foods
2
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Corporation, a subsidiary of Nestle S.A. (Switzerland). Age 62.
Hansel B. Millican, Jr.
Rochester Button Company
1100 Noblin Avenue
South Boston, Virginia
President and Chief Executive Officer of Rochester Button Company. Age
65.
Thomas J. Neff
Spencer Stuart & Associates
277 Park Avenue
New York, New York
President of Spencer Stuart & Associates, an executive search
consulting firm. Age 57.
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 retirement plan for outside
directors maintained by the Lord Abbett-sponsored funds. The fifth
column sets forth the total compensation payable by such funds to the
outside directors. No director of the Fund associated with Lord Abbett
and no officer of the Fund received any compensation from the Fund for
acting as a director or officer.
<TABLE>
<CAPTION>
For the Fiscal Year Ended May 31, 1995
(1) (2) (3) (4) (5)
For Year Ended
Pension or Estimated Annual December 31, 1994
Retirement Benefits Benefits Upon Total Compensation
Accrued as Expenses Retirement Proposed Accrued by the
by the to Fund and to be Paid by the Fund and the
Aggregate Fifteen Other Lord Fund and Fifteen Fifteen Other Lord
Compensation Abbett-sponsored Other Lord Abbett- Abbett-sponsored
from the Fund1 Funds2 sponsored Funds2 Funds3
-------------- ------------------- ------------------- -------------------
Name of Director
----------------
<S> <C> <C> <C> <C>
E. Thayer Bigelow4 $105 NONE $33,600 $8,400
Thomas F. Creamer5 $ 43 $27,578 $33,600 $29,500
Stewart S. Dixon $113 $22,595 $33,600 $43,600
John C. Jansing $182 $28,636 $33,600 $42,500
C. Alan MacDonald $107 $27,508 $33,600 $41,500
Hansel B. Millican, Jr. $180 $24,842 $33,600 $41,750
Thomas J. Neff $177 $16,214 $33,600 $41,200
<FN>
1. Outside directors' fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored funds based on net
assets of each fund. Fees payable by the Fund to its outside directors are
being deferred under a plan that deems the deferred amounts to be invested in
shares of the Fund for later distribution to the directors. The amounts
accrued by the Fund for the year ended May 31, 1995, are as set forth after
each outside Director's name above. The total amount accrued for each outside
Director since the beginning of his tenure with the Fund, together with
dividends reinvested and changes in net asset value applicable to such deemed
investments, were as follows as of May 31, 1995: Mr. Bigelow, $115; Mr.
Creamer, $2,789; Mr. Dixon, $3,005; Mr. Jansing, $3,069; Mr. MacDonald,
$3,026; Mr. Millican, $3,106 and Mr. Neff, $3,089.
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2. Each Lord Abbett-sponsored fund has a retirement plan providing that
outside directors will receive annual retirement benefits for life equal to
80% of their final annual retainers following retirement at or after age 72
with at least 10 years of service. Each plan also provides for a reduced
benefit upon early retirement under certain circumstances, a pre-retirement
death benefit and actuarially reduced joint-and-survivor spousal benefits.
The amounts stated, except in the case of Mr. Creamer, would be payable
annually under such retirement plans if the director were to retire at age
72 and the annual retainers payable by such funds were the same as they are
today. The amounts accrued in column 3 were accrued by the Lord
Abbett-sponsored funds during the fiscal year ended May 31, 1995 with
respect to the retirement benefits in column 4.
3. This column shows aggregate compensation, including director's 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, 1994.
4. Mr. Bigelow was elected a director of the Fund on October 19, 1994.
5. Mr. Creamer retired as a director of the Fund effective September 21, 1994.
The stated amount of his retirement income (column 4) is the annual amount
payable to him by the Lord Abbett-sponsored funds before reduction for a
joint-and-survivor spousal benefit.
</FN>
</TABLE>
Except where indicated, the following executive officers of the Fund have been
associated with Lord Abbett for over five years. Of the following, Messrs.
Allen, Carper, Cutler, Dow, Henderson, Nordberg and Walsh are partners of Lord
Abbett; the others are employees: Stephen J. McGruder, age 51 (with Lord Abbett
since May 1995 - formerly Vice President of Wafra Investment Advisory Group, a
private investment company), Executive Vice President; Kenneth B. Cutler, age
63, Vice President and Secretary; Stephen I. Allen, age 42; Daniel E. Carper,
age 43; Robert S. Dow, age 50; Thomas S. Henderson, age 63; E. Wayne Nordberg,
age 59; John J. Gargana, Jr., age 64; Thomas F. Konop, age 53; Victor W.
Pizzolato, age 62; John J. Walsh, age 58, Vice Presidents; and Keith F.
O'Connor, age 40, Treasurer.
At September 1, 1995, the officers and trustees of the Fund, as a group, owned
less than 1% of the 1990 Series outstanding shares.
INVESTMENT ADVISORY AND OTHER SERVICES
For the fiscal years ended May 31, 1993, 1994 and 1995 the management fees paid
by the Fund to Lord Abbett under the Management Agreement were $112,578,
$273,224 and $331,949, respectively, which amounts reflected waivers of fees by
Lord Abbett of $258,106, $88,233 and $7,318, respectively.
During the fiscal year ended May 31, 1995, the Fund paid through Lord Abbett to
dealers $122,161, under the Fund's Rule 12b-1 Plan.
PORTFOLIO TRANSACTIONS
For the fiscal years ended May 31, 1993, 1994 and 1995, the Fund paid $115,889,
$97,415 and $63,875, respectively, in brokerage commissions.
TAXES
Under current law, net long-term capital gains are subject to federal
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<PAGE>
income tax at the rates applicable to ordinary income, except that the maximum
rate for net long-term capital gains for individuals is 28%.
FINANCIAL STATEMENTS
The financial statements for the fiscal year ended May 31, 1995 and the report
of Deloitte & Touche LLP, independent auditors for the Fund on such financial
statements contained in the 1995 Annual Report to Shareholders of Lord Abbett
Equity Fund are incorporated herein by reference to such financial statements
and report in reliance upon the authority of Deloitte & Touche LLP as experts in
auditing and accounting.
5
<PAGE>
PART C OTHER INFORMATION
Item 24 Financial Statements and Exhibits
(a) Financial Statements - Statements of Net Assets at May 31, 1995;
Statement of Operations for Year ended May 31, 1995; Statement of
Changes in Net Assets for Year ended May 31, 1995.
(b) Exhibits -
(1) Amended and Restated Declaration of Trust of Registrant.*
(5) Management Agreement between Registrant and Lord, Abbett &
Co.*
(6) Distribution Agreement between Registrant and Lord,
Abbett & Co.*
(11) Consent of Deloitte & Touche LLP with respect to the
financials of the Registrant.*
(15) Amended Distribution Plan and Agreement pursuant to Rule
12-b1 under the 1940 Act.*
Item 25 Persons Controlled by or Under Common Control with Registrant
None
Item 26 Number of Record Holders as of September 1, 1995 - 5,099
Item 27 Indemnification
All trustees, officers, employees and agents of Registrant are to be
indemnified as set forth in Section 4.3 of Registrant's Amended and
Restated Declaration of Trust, which has been previously filed.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to trustees, 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 expenses incurred or paid by a trustee,
officer or controlling person of the Registrant in the successful defense
of any action, suit or
1
<PAGE>
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of 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 trustees' and officers' errors and
omissions liability insurance policy protecting trustees and officers
against liability for breach of duty, negligent act, error or omission
committed in their capacity as trustees 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 seventeen other
open-end investment companies (of which it is principal underwriter for
fourteen), and as investment adviser to approximately 5,100 private
accounts. Other than acting as trustees, 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, partner or trustee of any entity except as follows:
John J. Walsh
Trustee
The Brooklyn Hospital
Center 100 Parkside Avenue
Brooklyn, New York
Item 29. Principal Underwriter
(a) Affiliated Fund, Inc.
Lord Abbett Global Fund, Inc.
Lord Abbett Series Fund, Inc.
Lord Abbett U.S. Government Securities Money Market Fund, Inc.
Lord Abbett Tax-Free Income Trust
Lord Abbett Fundamental Value Fund, Inc.
Lord Abbett California Tax-Free Income Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Value Appreciation Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett U.S. Government Securities Fund, Inc.
Lord Abbett Securities Trust
Lord Abbett Investment Trust
2
<PAGE>
Investment Advisor
American Skandia Trust (Lord Abbett Growth and Income Portfolio) Lord
Abbett Research Fund, Inc.
(b) The partners of Lord, Abbett & Co. are:
Name and Principal Positions and Offices
Business Address (1) with Registrant
Ronald P.Lynch Chairman, President and Trustee
Stephen I. Allen Vice President
Kenneth B. Cutler Vice President and Secretary
Daniel E. Carper Vice President
Robert S. Dow Vice President and Trustee
Thomas S. Henderson Vice President
E. Wayne Nordberg Vice President
John J. Walsh Vice President
(1) Each of the above has a principal business address at 767 Fifth
Avenue, New York, New York 10153
(c) Not applicable.
Item 30. Location of Accounts and Records
Registrant maintains the records required by Rules 31a-1(a) and (b), and
31-a2(a) at its main office.
Lord, Abbett & Co. maintains the records required by Rules 31a-(f) and
31a-2(e) at its main office.
Certain records such as stock certificates and correspondence may be
physically maintained at the main office of the Registrant's Transfer
Agent, Custodian, or Shareholder Servicing Agent within the
requirements of Rule 31a-3.
Item 31. Management Services
None.
Item 32. Undertakings
(a) N/A
(b) N/A
(c) The Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
(d) Registrant hereby undertakes, if requested to do so by the
holders of at least 10% of the Registrant's outstanding shares,
3
<PAGE>
to call a meeting of shareholders for the purpose of voting upon
the question of removal of a trustee or trustees and to assist in
communications with other shareholders as required by Section
16(c) of the Investment Company Act of 1940, as amended.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant certifies that it meets all the requirements
for effectiveness of this Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Registration Statement
and/or any amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on the
14th day of September, 1995
LORD ABBETT EQUITY FUND
By /s/ Ronald P. Lynch
Ronald P. Lynch, President
and 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.
President, Chairman of the Board
/s/ Ronald P. Lynch and Trustee
Ronald P. Lynch (Title) 9/14/95
Vice President and
/s/ John J. Gargana, Jr. Chief Financial Officer
John J. Gargana, Jr. (Title) 9/14/95
/s/ E. Thayer Bigelow Trustee
E. Thayer Bigelow (Title) 9/14/95
/s/ Stewart S. Dixon Trustee
Stewart S. Dixon (Title) 9/14/95
/s/ Robert S. Dow Trustee
Robert S. Dow (Title) 9/14/95
/s/ John C. Jansing Trustee
John C. Jansing (Title) 9/14/95
/s/ C. Alan MacDonald Trustee
C. Alan MacDonald (Title) 9/14/95
/s/ Hansel B. Millican, Jr. Trustee
Hansel B. Millican, Jr. (Title) 9/14/95
/s/ Thomas J. Neff Trustee
Thomas J. Neff (Title) 9/14/95
<PAGE>
EXHIBIT INDEX
Exhibit No.
EX-99B1 Amended and Restated Declaration of Trust of Registrant.*
EX-99B5 Management Agreement between Registrant and Lord, Abbett & Co.*
EX-99B6 Distribution Agreement between Registrant and Lord,
Abbett & Co.*
EX-99B11 Consent of Deloitte & Touche LLP with respect to the
financials of the Registrant.*
EX-99B15 Amended Distribution Plan and Agreement pursuant to Rule
12-b1 under the 1940 Act.*
EX-9B27 Financial Data Schedule*
LORD ABBETT EQUITY FUND
---------------------
DECLARATION OF TRUST
(As amended and restated May 16, 1990)
---------------------
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
<S> <C>
Page
ARTICLE I -- NAME AND DEFINITIONS............................................................ 3
Section 1.1 Name.......................................................................... 3
Section 1.2 Definitions................................................................... 3
ARTICLE II -- TRUSTEES....................................................................... 6
Section 2.1 Powers........................................................................ 6
Section 2.2 Legal Title................................................................... 16
Section 2.3 Number of Trustees;
Term of Office.............................................................. 17
Section 2.4 Election of Trustees.......................................................... 18
Section 2.5 Resignation and Removal ...................................................... 18
Section 2.6 Vacancies .................................................................... 19
Section 2.7 Committees; Delegation ....................................................... 20
Section 2.8 Quorum........................................................................ 21
Section 2.9 Action Without a Meeting;
Participation by
Conference Telephone ....................................................... 21
Section 2.10 By-Laws....................................................................... 22
Section 2.11 No Bond Required ............................................................. 22
Section 2.12 Reliance on Experts, Etc. .................................................... 22
ARTICLE III -- CONTRACTS .................................................................... 24
Section 3.1 Distribution Contract ........................................................ 24
Section 3.2 Advisory or Management
Contracts .................................................................. 24
Section 3.3 Affiliations of Trustees
or Officers, Etc. .......................................................... 25
ARTICLE IV -- LIMITATION OF LIABILITY;
INDEMNIFICATION ............................................................... 26
Section 4.1 No Personal Liability of
Shareholders, Trustees, Etc. ............................................... 26
Section 4.2 Execution of Documents;
Notice; Apparent Authority ................................................. 27
Section 4.3 Indemnification of Trustees,
Officers, Etc. ............................................................. 28
Section 4.4 Indemnification of
Shareholders ............................................................... 32
1
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Page
ARTICLE V -- SHARES OF BENEFICIAL INTEREST .................................................. 33
Section 5.1 Beneficial Interest .......................................................... 33
Section 5.2 Series Designation ........................................................... 34
Section 5.3 Additional Series ............................................................ 34
Section 5.4 Series Shares, Assets,
Liabilities and Expenses ................................................... 35
Section 5.4.1 Series Shares .............................................................. 35
Section 5.4.2 Series Assets .............................................................. 36
Section 5.4.3 Series Liabilities and Expenses .................................................37
Section 5.4.4 Termination of a Series .................................................... 37
Section 5.5 Rights of Shareholders ....................................................... 38
Section 5.6 Trust Only ................................................................... 39
Section 5.7 Issuance of Shares ........................................................... 39
Section 5.7.1 General..................................................................... 39
Section 5.7.2 Price....................................................................... 40
Section 5.7.3 On Merger or
Consolidation............................................................... 40
Section 5.7.4 Fractional Shares .......................................................... 41
Section 5.8 Register of Shares............................................................ 41
Section 5.9 Share Certificates ........................................................... 42
Section 5.10 Transfer of Shares ........................................................... 42
Section 5.11 Voting Powers ................................................................ 43
Section 5.12 Meetings of Shareholders ..................................................... 45
Section 5.13 Action Without a Meeting ..................................................... 46
Section 5.14 Removal of Trustees by
Shareholders ............................................................... 46
ARTICLE VI -- REDEMPTION AND REPURCHASE
OF SHARES ..................................................................... 47
Section 6.1 Redemption of Shares ......................................................... 47
Section 6.2 Price ........................................................................ 47
Section 6.3 Payment ...................................................................... 47
Section 6.4 Effect of Suspension of
Right of Redemption .......................................................... 48
Section 6.5 Repurchase by Agreement ...................................................... 49
2
<PAGE>
Page
Section 6.6 Suspension of Right of
Redemption ................................................................... 49
Section 6.7 Involuntary Redemption
of Shares; Disclosure
of Holding ................................................................. 50
ARTICLE VII -- DETERMINATION OF NET ASSET VALUE;
DISTRIBUTIONS................................................................. 52
Section 7.1 By Whom Determined ........................................................... 52
Section 7.2 When Determined............................................................... 52
Section 7.3 Computation of Per Share
Net Asset Value............................................................... 53
Section 7.3.1 Net Asset Value Per Share................................................... 53
Section 7.3.2 Value of the Net Assets
of a Series ................................................................ 53
Section 7.4 Interim Determinations........................................................ 55
Section 7.5 Outstanding Shares ........................................................... 56
Section 7.6 Distributions to Shareholders................................................. 57
Section 7.7 Power to Modify Foregoing
Procedures.................................................................... 58
ARTICLE VIII -- DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC. ................................................... 59
Section 8.1 Duration and Termination...................................................... 59
Section 8.2 Amendment Procedure........................................................... 60
Section 8.3 Merger, Consolidation and
Sale of Assets................................................................ 62
Section 8.4 Incorporation................................................................. 62
ARTICLE IX -- MISCELLANEOUS................................................................ 64
Section 9.1 Filing......................................................................... 64
Section 9.2 Registered Agent............................................................... 64
Section 9.3 Governing Law.................................................................. 65
Section 9.4 Counterparts................................................................... 65
Section 9.5 Reliance by Third Parties...................................................... 65
Section 9.6 Provisions in Conflict
with Law or Regulations........................................................ 66
Section 9.7 Use of Name.................................................................... 67
Section 9.8 Section Headings;
Interpretation................................................................. 68
3
</TABLE>
<PAGE>
DECLARATION OF TRUST
OF
LORD ABBETT EQUITY FUND
(As amended and restated May 16, 1990)
DECLARATION OF TRUST as amended and restated May 16, 1990 by
and among the individuals executing this Declaration of Trust as Trustees.
WHEREAS, Article IX, Section 9.2 of the Declaration of Trust
of this Trust dated January 19, 1990 provides that the Declaration of Trust may
be amended at any time by an instrument in writing signed by a majority of the
Trustees when so authorized by a Majority Shareholder Vote; and
WHEREAS, pursuant to Article II, Section 2.3 and 2.6 of the
Declaration of Trust of this Trust dated January 19, 1990 the number of Trustees
of the Trust has been increased from three to nine and individuals have been
appointed to fill the resulting vacancies; and
WHEREAS, it is desired that the Declaration of Trust be
amended to reflect the foregoing actions and to effect various other changes;
and
WHEREAS, it is further desired that the Declaration of Trust
be restated to incorporate such amendments together with the previous amendments
changing the name of the Trust and adopting a second series of shares of
beneficial interest of the Trust (the "1990A Series"); and
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WHEREAS, this amendment and restatement of the Declaration of
Trust has been authorized by a Majority Shareholder Vote in a written consent
dated May 16, 1990 pursuant to Article V, Section 5.13 of the Declaration of
Trust;
NOW, THEREFORE, said Declaration of Trust is amended and
restated to read in its entirety as follows:
WHEREAS, this Trust has been established for the
investment and reinvestment of funds contributed thereto; and
WHEREAS, in furtherance of such purpose, the Trustees have
acquired and may hereafter acquire assets and properties, to hold and manage as
trustees of a Massachusetts voluntary association with transferable shares of
beneficial interest, as hereinafter provided;
NOW THEREFORE, the Trustees hereby declare that all money and
property contributed to the trust established hereunder and all proceeds thereof
shall be held and managed in trust for the pro rata benefit of the holders, from
time to time, of the shares of beneficial interest issued hereunder and subject
to the provisions hereof.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby is the
"Lord Abbett Equity Fund", and as far as may be practicable the Trustees shall
conduct the business and activities of the trust created hereby and execute all
documents and take all actions under that name or any other name they may from
time to time determine,
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<PAGE>
which name (and the word "Trust" whenever used in this Declaration, except where
the context requires otherwise) shall refer to the Trustees in their capacity as
Trustees, and not individually or personally, and shall not refer to the
officers, agents, employees or shareholders of the trust created hereby or of
such Trustees.
Section 1.2. Definitions. Wherever they are used
herein, the following terms have the following meanings:
"Affiliated Person" shall have the meaning set forth in
Section 2(a)(3) of the 1940 Act.
"Commission" shall mean the Securities and Exchange
Commission.
"Declaration" shall mean this Declaration of Trust as amended
from time to time.
"Interested Person" shall have the meaning set forth in
Section 2(a)(19) of the 1940 Act.
"Majority Shareholder Vote" shall mean the vote of a majority
of the outstanding voting securities, as defined in Section 2(a)(42) of the 1940
Act, of the Trust, provided that if there are two or more Series of Shares
outstanding, then "Majority Shareholder Vote" shall have, when used with respect
to any matter required to be submitted to the holders of the outstanding Shares
of any Series pursuant to this Declaration or the 1940 Act, the meaning set
forth in Rule 18f-2 under the 1940 Act.
"1940 Act" shall mean the Investment Company Act of 1940, as
amended from time to time.
"Person" shall mean an individual, a company, a
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corporation, partnership, trust, or association, a joint venture, an
organization, a business, a firm or other entity, whether or not a legal entity,
or a country, a state, municipality or other political subdivision or any
governmental agency or instrumentality.
"Principal Underwriter" shall have the meaning set forth in
Section 2(a)(29) of the 1940 Act.
"Series" shall mean the one or more separate series of Shares
authorized by Section 5.3 of this Declaration.
"Series Majority Shareholder Vote" shall mean the vote of a
"majority of the outstanding voting securities," as defined in Section 2(a)(42)
of the 1940 Act, of a Series.
"Shareholder" shall mean a record owner of Shares.
"Shares" shall mean the units of interest into which the
beneficial interest in the Trust (or, if more than one Series of Shares is
authorized, in each Series) shall be divided from time to time and includes
fractions of Shares as well as whole Shares. All references to Shares shall be
deemed to refer to Shares of any or all Series, as the context may require.
"Trust" shall mean the Massachusetts business trust
established by this Declaration of Trust, as from time to time amended.
"Trust Property" shall mean any and all property, real or
personal, tangible or intangible, which is owned or held by or for the account
of the Trust or the Trustees, including any and all assets of or allocated to
any Series, as the context may require.
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"Trustees" shall mean the individuals who have signed this
Declaration of Trust, so long as they shall continue in office in accordance
with the terms hereof, and all other individuals who may from time to time be
duly elected or appointed, qualified and serving as Trustees in accordance with
the provisions of Article II hereof, and reference herein to a Trustee or the
Trustees shall refer to such person or persons in his or her capacity or their
capacities as trustees hereunder.
ARTICLE II
TRUSTEES
Section 2.1. Powers. The Trustees, subject only to the
specific limitations contained in this Declaration, shall have exclusive and
absolute power, control and authority over the Trust Property and over the
business of the Trust to the same extent as if the Trustees were the sole owners
of the Trust Property and business in their own right, including such power,
control and authority to do all such acts and things as in their sole judgment
and discretion are necessary, incidental, convenient or desirable for the
carrying out of or conducting of the business of the Trust or in order to
promote the interests of the Trust, but with such powers of delegation as may be
permitted by this Declaration. The enumeration of any specific power, control or
authority herein shall not be construed as limiting the aforesaid power, control
and authority or any other specific power, control or authority. The Trustees
shall have power to conduct and carry on the business of the Trust, or any part
thereof, to have one or more offices and to
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exercise any or all of its trust powers and rights, in the Commonwealth of
Massachusetts, in any other states, territories, districts, colonies and
dependencies of the United States and in any foreign countries. In construing
the provisions of this Declaration, the presumption shall be in favor of a grant
of power to the Trustees. Such powers of the Trustees may be exercised without
order of or resort to any court.
Without limiting the foregoing, the Trustees shall have the
power:
To operate as and to carry on the business of an
investment company, and to exercise all the powers necessary and
appropriate to the conduct of such operations.
To subscribe for and to invest and reinvest funds in,
and hold for investment, the securities (including but not limited to
bonds, debentures, notes, certificates of deposit, commercial paper,
bankers' acceptances and all other evidences of indebtedness and
shares, stock, subscription rights, options, warrants, profit-sharing
interests or participations and all other contracts for or evidences of
equity interests) of any Person and to hold cash uninvested.
To acquire (by purchase, subscription or otherwise),
to trade in and deal in, to sell or otherwise dispose of, to enter into
repurchase agreements, reverse repurchase agreements and firm forward
commitment agreements with respect to, and to lend and to pledge any
such securities, to enter into futures contracts for the purpose of
hedging the value of
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any such securities, and to effect spot (i.e. cash) transactions in, or
enter into forward contracts with respect to, foreign currency exchange
for the purpose of hedging the value of any securities denominated in
currencies other than United States dollars.
To exercise all rights, powers and privileges of
ownership or interest in all securities included in the Trust Property,
including the right to vote, give assent, execute and deliver proxies
or powers of attorney to such person or persons as the Trustees shall
deem proper and otherwise act with respect thereto and to do all acts
for the preservation, protection, improvement and enhancement in value
of all such securities and to delegate, assign, waive or otherwise
dispose of any of such rights, powers or privileges.
To exercise powers and rights of subscription or
otherwise which in any manner arise out of the Trust's ownership of
securities.
To declare (from interest, dividends or other income
received or accrued, from accruals of original issue or other discounts
on obligations held, from capital or other profits whether realized or
unrealized and from any other lawful sources) dividends and
distributions on the Shares and to credit the same to the account of
Shareholders, or at the election of the Trustees to accrue income to
the account of Shareholders, on such dates (which may be as frequently
as every day) as the Trustees may determine. Such dividends,
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distributions or accruals shall be payable in cash, property or Shares
at such intervals as the Trustees may determine at any time in advance
of such payment or accrual, whether or not the amount of such dividend,
distribution or accrual can at the time of declaration be determined or
must be calculated subsequent to declaration and prior to payment or
accrual by reference to amounts or other factors not yet determined at
the time of declaration (including but not limited to the amount of a
dividend or distribution to be determined by reference to what is
sufficient to enable the Trust to qualify as a regulated investment
company under the United States Internal Revenue Code or to avoid
liability for Federal income tax).
The power granted by this Subsection (f) shall include,
without limitation, and if otherwise lawful, the power (A) to declare
dividends or distributions or to accrue income to the account of
Shareholders by means of a formula or other similar method of
determination whether or not the amount of such dividend or
distribution can be calculated at the time of such declaration; (B) to
establish record or payment dates for dividends or distributions on any
basis, including the power to establish a number of record or payment
dates subsequent to the declaration of any dividend or distribution;
(C) to establish the same payment date for any number of dividends or
distributions declared prior to such date; (D) to provide for payment
of dividends or distributions declared and as yet
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unpaid, or unpaid accrued income, to shareholders redeeming Shares
prior to the payment date otherwise applicable; and (E) to provide in
advance for conditions under which any dividend or distribution may be
payable in Shares to all or less than all of the Shareholders.
To acquire (by purchase, lease or otherwise) and to
hold, use, maintain, develop and dispose of (by sale, lease or
otherwise) any property, real or personal, and any interest therein.
To borrow money, and in this connection to issue
notes or other evidences of indebtedness; to secure borrowings by
mortgaging, pledging or otherwise subjecting to security interests the
Trust Property; and to lend Trust Property.
To aid by further investment any Person, if any
obligation of or interest in such Person is included in the Trust
Property or if the Trustees have any direct or indirect interest in the
affairs of such Person; to do anything designed to preserve, protect,
improve or enhance the value of such obligation or interest; and to
endorse or guarantee or become surety on any or all of the contracts,
stocks, bonds, notes, debentures and other obligations of any such
Person; and to mortgage the Trust Property or any part thereof to
secure any of or all such obligations.
To enter into joint ventures, general or limited
partnerships and any other combinations or associations.
To purchase and pay for entirely out of Trust
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Property liability, casualty, property and other insurance, including,
without limitation, (i) insurance policies insuring the Shareholders,
Trustees, officers, employees and agents of the Trust, the Investment
Adviser, the Distributor and dealers or independent contractors of the
Trust against all claims and liabilities of every nature arising by
reason of holding or having held any such position or by reason of any
action taken or omitted by any such Person in such capacity, whether or
not constituting negligence, to the extent the Trust would have the
power, under provisions of applicable law, to indemnify such Person
against such liability, and (ii) an insurance policy or policies
guaranteeing that the net asset value per Share of the Series will not
be less than a specified amount (whether the original cost of the
Shares or otherwise); provided, however that such policy or policies
shall be purchased solely at the cost of the Series to which it or they
pertain.
To establish and carry out pension, profit-sharing,
share purchase, share bonus, savings, thrift and other retirement,
incentive and benefit plans for any Trustees, officers, employees or
agents of the Trust.
To the extent permitted by law and determined by the
Trustees, to indemnify any Person with whom the Trust has dealings,
including, without limitation, the Shareholders, the Trustees, the
officers, employees and agents of the Trust, the Investment Adviser,
the Distributor, the transfer agent, the
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custodian and dealers.
To incur and pay any charges, taxes and expenses
which in the opinion of the Trustees are necessary or incidental to or
proper for carrying out any of the purposes of this Declaration, and to
pay from the funds of the Trust Property to themselves as Trustees
reasonable compensation and reimbursement for expenses.
To prosecute or abandon and to compromise, arbitrate
or otherwise adjust claims in favor of or against the Trust or any
matter in controversy, including but not limited to claims for taxes.
To exercise the right to consent, and to enter into
releases, agreements and other instruments, including, but not limited
to, the right to consent or participate in any plan for the
reorganization, consolidation or merger of any corporation or issuer
any security of which is or was held by the Trust; to consent to any
contract, lease, mortgage, purchase or sale of such property by said
corporation or issuer, and to pay calls or subscriptions with respect
to securities held by the Trust.
To employ or contract with such Persons as the
Trustees may deem desirable for the transaction of the business of the
Trust.
To adopt a seal for the Trust, but the absence of
such seal shall not impair the validity of any instrument executed on
behalf of the Trust.
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To employ one or more custodians of the assets of the Trust
and authorize such custodians to employ subcustodians and to deposit
all or any part of such assets in a system or systems for the central
handling of securities.
To take such actions as are authorized or required to be
taken by the Trustees pursuant to other provisions of this Declaration.
In general to carry on any other business in
connection with or incidental to any of the objects and purposes of the
Trust, to do everything necessary, suitable or proper for the
accomplishment of any purpose or the attainment of any object or the
furtherance of any power herein set forth, either alone or in
association with others, and to take any action incidental or
appurtenant to or growing out of or connected with the business,
purposes, objects or powers of the Trustees.
The foregoing clauses shall be construed both as
objects and as powers, and the foregoing enumeration of specific powers
shall not be held to limit or restrict in any manner the general powers
of the Trustees.
The Trustees shall not be limited by any law now or
hereafter in effect limiting the investments which may be made or
retained by fiduciaries, but they shall have full power and authority
to make any and all investments within the limitation of this
Declaration that they, in their sole and absolute discretion, shall
determine, and without liability for loss even though such
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investments do not or may not produce income or are of a character or
in an amount not considered proper for the investment of trust funds.
Section 2.2. Legal Title. Legal title to all the
Trust Property shall as far as may be practicable be vested in the name
of the Trust, which name shall refer to the Trustees in their capacity
as Trustees, and not individually or personally, and shall not refer to
the officers, agents, employees or Shareholders of the Trust or of the
Trustees, provided that the Trustees shall have power to cause legal
title to any Trust Property to be held by or in the name of one or more
of the Trustees with suitable reference to their trustee status, or in
the name of the Trust, or any Series thereof, or in a form not
indicating any trust, whether in bearer, unregistered or other
negotiable form, or in the name of a custodian or sub-custodian or a
nominee or nominees or otherwise. The right, title and interest of the
Trustees in the Trust Property shall vest automatically in each Person
who may hereafter become a Trustee. Upon the termination of the term of
office of a Trustee, whether upon such Trustee's resignation or
removal, or upon the due election and qualification of his successor or
upon the occurrence of any of the events specified in the first
sentence of Section 2.6 hereof or otherwise, such Trustee shall
automatically cease to have any right, title or interest in any of the
Trust Property, and the right, title and interest of such Trustee in
the Trust Property shall vest automatically in the remaining Trustees.
Such vesting
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and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered.
Section 2.3. Number of Trustees; Term of Office. The
number of Trustees shall be nine, which number may be increased or
decreased from time to time by written instrument signed by a
majority of the Trustees, provided that the number of Trustees
shall not be fewer than two nor more than 15. Each of the nine
Trustees executing this Declaration of Trust and each Trustee
thereafter appointed or elected (whenever such election occurs)
shall hold office until his successor is elected and qualified or
until the earlier occurrence of any of the events specified in the
first sentence of Section 2.6 hereof.
Section 2.4. Election of Trustees. Trustees may
succeed themselves in office. Trustees may be elected at a
Shareholders' meeting. At such a Shareholders' meeting, Trustees shall
be elected by a plurality of the votes validly cast. The election of
any Trustee (other than an individual who was serving as a Trustee
immediately prior thereto) shall not become effective, however, until
the individual named shall have accepted in writing such election and
agreed in writing to be bound by the terms of this Declaration.
Trustees need not own Shares.
Section 2.5. Resignation and Removal. Any Trustee may
resign his trust (without need for prior or subsequent accounting) by
an instrument in writing signed by him and delivered to the Chairman of
the Board, or the Secretary or any Assistant Secretary, and such
resignation shall be effective upon such delivery, or at
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any later date specified in the instrument. Any of the Trustees may be
removed (i) with cause by the affirmative vote of two-thirds of the
remaining Trustees (provided that the aggregate number of Trustees
after such removal shall not be less than two) or (ii) by the
Shareholders pursuant to Section 5.14 hereof.
Section 2.6. Vacancies. The term of office of a
Trustee shall terminate and a vacancy shall occur in the event of the
death, retirement, resignation or removal (whether pursuant to Section
2.5 hereof or otherwise), bankruptcy, adjudication of incompetence or
other incapacity to perform the duties of the office of a Trustee. A
vacancy shall also occur upon an increase in the number of Trustees in
accordance with Section 2.3 hereof. No vacancy shall operate to annul
this Declaration or to revoke any existing agency created pursuant to
the terms of the Declaration. In the case of an existing vacancy,
including a vacancy existing by reason of an increase in the authorized
number of Trustees, the remaining Trustees shall fill such vacancy by
the appointment of such individual as they in their sole and absolute
discretion shall see fit, made by a written instrument signed by a
majority of the Trustees then in office, provided that such power of
appointment shall be subject to and limited by all applicable
provisions of the 1940 Act and no such appointment shall become
effective until the person named shall have accepted in writing such
appointment and agreed in writing to be bound by the terms of this
Declaration. Whenever a vacancy in the number of Trustees shall occur,
until such vacancy is filled as provided in Section 2.4 or this Section
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2.6, the Trustees in office, regardless of their number, shall have all
the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by the Declaration.
Section 2.7. Committees; Delegation. The Trustees
shall have the power to appoint from their own number, and terminate,
any one or more committees consisting of two or more Trustees,
including an executive committee which may exercise some or all of the
power and authority of the Trustees as the Trustees may determine
(including but not limited to the power to determine net asset value
and net income), subject to any limitations contained in the By-Laws,
and in general to delegate from time to time to one or more of their
number or to officers, employees or agents of the Trust such power and
authority and the doing of such things and the execution of such
instruments, either in the name of the Trust or the names of the
Trustees or otherwise, as the Trustees may deem expedient, provided
that no committee shall have the power
(a) to change the principal office of the Trust;
(b) to amend the By-Laws;
(c) to issue Shares of any Series;
(d) to elect or remove from office any Trustee or the
Chairman of the Board, the President, the Chief Financial
Officer, the Treasurer or the Secretary of the Trust;
(e) to increase or decrease the number of Trustees;
(f) to declare a dividend or other distribution on the
Shares of any Series;
(g) to authorize the repurchase of Shares of any Series;
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or
(h) to authorize any merger, consolidation or sale,
lease or exchange of all or substantially all of the Trust
Property.
Section 2.8. Quorum. At all meetings of the Trustees,
the presence of one-third of the total number of Trustees
authorized, but not less than two, shall constitute a quorum for
the transaction of business.
Section 2.9. Action Without a Meeting; Participation
by Conference Telephone. Unless the 1940 Act requires that a particular
action must be taken only at a meeting of Trustees, any action required
or permitted to be taken at any meeting of the Trustees (or of any
commit-tee of the Trustees) may be taken without a meeting if written
consents thereto are signed by a majority of the Trustees then in
office (or by a majority of the members of such committee) and such
written consents are filed with the records of the meetings. Unless the
1940 Act requires that Trustees must be present in person at a meeting
of Trustees, Trustees may participate in a meeting of the Trustees (or
of any committee of the Trustees) by means of a conference telephone or
similar communications equipment if all individuals participating can
hear each other at the same time. Participation in a meeting by these
means shall constitute presence at the meeting.
Section 2.10. By-Laws. The Trustees may adopt By-Laws
not inconsistent with this Declaration or law to provide for the
conduct of the business of the Trust, and may amend or repeal such
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By-Laws.
Section 2.11. No Bond Required. No Trustee shall be
obliged to give any bond or other security for the performance of
any of his duties hereunder.
Section 2.12. Reliance on Experts, Etc. Each Trustee,
officer, agent and employee of the Trust or any Series thereof shall,
in the performance of his duties, be fully and completely justified and
protected by relying in good faith upon the books of account or other
records of the Trust, or upon reports made to the Trustees (a) by any
of the officers or employees of the Trust or any Series thereof, (b) by
the Investment Adviser, the Distributor, the Custodian or the Transfer
Agent, or (c) by any accountants, selected dealers or appraisers or
other agents, experts or consultants selected with reasonable care by
the Trustees, regardless of whether such agent, expert or consultant
may also be a Trustee. The Trustees, officers, agents and employees of
the Trust or any Series thereof may take advice of counsel with respect
to the meaning and operation of this Declaration, and shall be under no
liability for any act or omission in accordance with such advice or for
failing to follow such advice. The exercise by the Trustees of their
powers and discretion hereunder and the construction in good faith by
the Trustees of the meaning or effect of any provision of this
Declaration shall be binding upon everyone interested. A Trustee,
officer, agent or employee shall be liable for his own willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his
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office, and for nothing else, and shall not be liable for errors of
judgment or mistakes of fact or law.
ARTICLE III
CONTRACTS
Section 3.1. Distribution Contract The Trustees may
from time to time enter into a distribution contract with another
Person (the "Distributor") providing for the sale of Shares, pursuant
to which the Trustees may agree to sell the Shares of one or more
Series to the Distributor or appoint the Distributor their sales agent
for the Shares. Such contract may provide that the Distributor may
enter into contracts with other persons to sell the Shares of one or
more Series on behalf of the Distributor and the Trust. Such contract
may also provide for the repurchase of Shares by the Distributor as
agent of the Trustees and shall contain such terms and conditions, if
any, as may be prescribed in the By-Laws and such further terms and
conditions not inconsistent with the provisions of this Article III or
of the By-Laws as the Trustees may in their discretion determine.
Section 3.2. Advisory or Management Contracts.
Subject to approval by a Majority Shareholder Vote or, where
appropriate pursuant to Section 5.11 hereof, a Series Majority
Shareholder Vote, the Trustees may from time to time enter into
investment advisory or management contracts with one or more other
Persons (the "Investment Advisers") pursuant to which the Investment
Adviser or Advisers shall agree to furnish to the Trustees manage-
ment, investment advisory, statistical and research facilities or
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other services with respect to one or more Series of the Trust. Such
contract shall contain such other terms and conditions, if any, as may
be prescribed in the By-Laws and such further terms and conditions not
inconsistent with the provisions of this Article III, the By-Laws or
applicable law as the Trustees may in their discretion determine,
including the grant of authority to the Investment Adviser to determine
what securities shall be purchased or sold by the Portfolios of the
Trust and what portion of its assets shall be uninvested and to
implement its determinations by making changes in the Series'
investments.
Section 3.3. Affiliations of Trustees or Officers,
Etc. The fact that any Shareholder, Trustee, officer, agent or employee
of the Trust or any Series thereof is a shareholder, member, director,
officer, partner, trustee, employee, manager, adviser or distributor of
or for any Person or of or for any parent or affiliate of any Person
with which an investment advisory or management contract, principal
underwriter or distributor contract or custodian, transfer agent,
disbursing agent or similar agency contract may have been or may
hereafter be made, or that any such Person, or any parent or affiliate
thereof, is a Shareholder of or has any other interest in the Trust or
any Series thereof, or that any such Person also has any one or more
similar contracts with one or more other such Persons, or has other
businesses or interests, shall not affect the validity of any such
contract made or that may hereafter be made with the Trustees or
disqualify any Shareholder, Trustee, officer, agent or employee of the
Trust or any Series
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thereof from voting upon or executing the same or create any liability
or accountability to the Trustees, the Trust, any Series thereof or the
Shareholders.
ARTICLE IV
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 4.1. No Personal Liability of Share-holders,
Trustees, Etc. No Shareholder shall be subject to any personal
liability whatsoever in connection with Trust Property or the acts,
obligations or affairs of the Trust or any Series thereof. All Persons
extending credit to, contracting with or having any claim against the
Trust or any Series thereof shall look only to the assets of the Trust
or the Portfolio of any affected Series for payment under such credit,
contract or claim, and neither the Shareholders nor the Trustees, nor
any of the Trust's officers, employees or agents, whether past, present
or future, shall be personally liable therefor. The Trustees shall not
be responsible or liable in any event for any neglect or wrongdoing of
any officer, employee or agent (including, without limitation, the
Investment Advisers, the Distributor, the Custodian and the Transfer
Agent) of the Trust or any Series thereof, nor shall any Trustee be
responsible or liable for the act or omission of any other Trustee.
Nothing in this Declaration shall, however, protect any Trustee,
officer, employee or agent of the Trust against any liability to which
such Person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her
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office.
Section 4.2. Execution of Documents; Notice; Apparent
Authority. Every note, bond, contract, instrument, certificate or
undertaking and every other act or thing whatsoever executed or done by
or on behalf of the Trust or any Series thereof or the Trustees or any
of them in connection with the Trust or any Series thereof shall be
conclusively deemed to have been executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and
such Trustees or Trustee shall not be personally liable thereon. Every
note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice
that this Declaration of Trust is on file with the Secretary of State
of the Commonwealth of
Massachusetts and shall recite that the obligations of such instruments
are not binding upon any of the Trustees, Shareholders, officers,
employees or agents of the Trust individually but are binding only upon
the assets and property of the Trust, but the omission thereof shall
not operate to bind any Trustees, Shareholders or officers, employees
and agents of the Trust individually. No purchaser, lender, Transfer
Agent or other Person dealing with the Trustees or any officer,
employee or agent of the Trust shall be bound to make any inquiry
concerning the validity of any transaction purporting to be made by the
Trustees or by such officer, employee or agent or make inquiry
concerning or be liable for the application of money or property paid,
loaned or delivered to or on the order of the Trustees or of such
officer, employee or
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agent.
Section 4.3. Indemnification of Trustees, Officers,
Etc. The Trust shall indemnify each of its Trustees, officers,
employees and agents (including any individual who serves at its
request as director, officer, partner, trustee or the like of another
organization in which it has any interest as a shareholder, creditor or
otherwise) against all liabilities and expenses,
including but not limited to amounts paid in satisfaction of judgments,
in compromise or as fines and penalties, and counsel fees reasonably
incurred by him or her in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal, before
any court or administrative or legislative body in which he or she may
be or may have been involved as a party or otherwise or with which he
or she may be or may have been threatened, while acting as Trustee or
as an officer, employee or agent of the Trust or the Trustees, as the
case may be, or thereafter, by reason of his or her being or having
been such a Trustee, officer, employee or agent, except with respect to
any matter as to which he or she shall have been adjudicated not to
have acted in good faith in the reasonable belief that his or her
action was in the best interests of the Trust or any Series thereof.
Notwithstanding anything herein to the contrary, if any matter which is
the subject of indemnification hereunder relates only to one Series (or
to more than one but not all of the Series of the Trust), then the
indemnity shall be paid only out of the assets of the affected Series.
No individual shall be indemnified
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hereunder against any liability to the Trust or any Series thereof or
the Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his or her office. In addition, no such indemnity
shall be provided with respect to any matter disposed of by settlement
or a compromise payment by such Trustee, officer, employee or agent,
pursuant to a consent decree or otherwise, either for said payment or
for any other expenses unless there has been a determination that such
compromise is in the best interests of the Trust or, if appropriate, of
any affected Series thereof and that such Person appears to have acted
in good faith in the reasonable belief that his or her action was in
the best interests of the Trust or, if appropriate, of any affected
Series thereof, and did not engage in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of his or her office. All determinations that the applicable
standards of conduct have been met for indemnification hereunder shall
be made by (a) a majority vote of a quorum consisting of disinterested
Trustees who are not parties to the proceeding relating to
indemnification, or (b) if such a quorum is not obtainable or, even if
obtainable, if a majority vote of such quorum so directs, by
independent legal counsel in a written opinion, or (c) a vote of
Shareholders (excluding Shares owned of record or beneficially by such
individual). In addition, unless a matter is disposed of with a court
determination (i) on the merits that such Trustee, officer, employee or
agent was not liable or (ii) that such Person was not
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guilty of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office,
no indemnification shall be provided hereunder unless there has been a
determination by independent legal counsel in a written opinion that
such Person did not engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his or her office.
The Trustees may make advance payments out of the
assets of the Trust or, if appropriate, of the affected Series in
connection with the expense of defending any action with respect to
which indemnification might be sought under this Section 4.3. The
indemnified Trustee, officer, employee or agent shall give a written
undertaking to reimburse the Trust or the Series in the event it is
subsequently determined that he or she is not entitled to such
indemnification and (a) the indemnified Trustee, officer, employee or
agent shall provide security for his or her undertaking, (b) the Trust
shall be insured against losses arising by reason of lawful advances,
or (c) a majority of a quorum of disinterested Trustees or an
independent legal counsel in a written opinion shall determine, based
on a review of readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the indemnitee
ultimately will be found entitled to indemnification. The rights
accruing to any Trustee, officer, employee or agent under these
provisions shall not exclude any other right to which he or she may be
lawfully entitled and shall inure to the benefit of his or her heirs,
executors,
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administrators or other legal representatives.
Section 4.4. Indemnification of Shareholders. In case
any Shareholder or former Shareholder shall be held to be personally
liable solely by reason of his or her being or having been a
Shareholder and not because of acts or omissions or for some other
reason, the Share- holder or former Shareholder (or his or her heirs,
executors, administrators or other legal representatives or in the case
of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the assets of the Trust or, if
there are two or more Series of the Trust, the assets of the affected
Series of which such Shareholder held Shares, to be held harmless from
and indemnified against all loss and expense, including legal expenses
reasonably incurred, arising from such
liability. The rights accruing to a Shareholder under this Section 4.4
shall not exclude any other right to which such Shareholder may be
lawfully entitled, nor shall anything contained herein restrict the
right of the Trust or any Series thereof to indemnify or reimburse a
Shareholder in any appropriate situation even though not specifically
provided herein.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
Section 5.1. Beneficial Interest. The interest of the
beneficiaries hereunder shall be divided into transferable shares of
beneficial interest ("Shares"), without par value. The Trustees may
from time to time divide or combine the Shares into a greater or lesser
number without thereby changing the proportionate benefi-
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cial interests in the Trust. The number of Shares authorized hereunder
is unlimited. All Shares issued hereunder, including without limitation
Shares issued in connection with a dividend in Shares or a split in
Shares, shall be fully paid and nonassessable. No shares shall have any
approval, conversion or preemptive rights. The Trustees shall have full
power and authority, without Shareholder approval, to establish or
change from time to time the par value of Shares as the Trustees shall
determine, provided the rights of outstanding Shares shall not thereby
be impaired in any material way.
Section 5.2. Series Designation. Subject to the
designation of additional Series pursuant to Section 5.3, the Shares
shall constitute two Series, the 1990 Series and the 1990A Series, the
Shares of each of which represent undivided beneficial interests in the
assets allocated to that Series pursuant to Section 5.4.2.
Section 5.3. Additional Series. The Trustees may,
without Shareholder approval, from time to time authorize additional
Series. The establishment and designation of any Series additional to
the initial Series of Shares shall be effective upon the execution by a
majority of the Trustees of an instrument setting forth the
establishment and designation of such Series (which instrument shall
have the status of an amendment to this Declaration). Such instrument
shall also set forth any rights and preferences of such Series which
are in addition to the rights and preferences of Shares set forth in
this Declaration. Each
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reference to "Shares" in this Declaration shall be deemed to be a
reference to Shares of any or all Series, as the context may require.
All Shares of any Series shall have equal voting, distribution,
redemption, liquidation and other rights and shall be entitled to a
preference over Shares of other Series with respect to the assets of or
allocated (pursuant to subsection 5.4.2) to such Series. Subject to the
provisions of this Declaration, the Trustees may establish variations
between different Series as to purchase price, determination of net
asset value, the price, terms and manner of redemption, special and
relative rights as to dividends and on liquidation, and conditions
under which the several Series shall have separate voting rights. The
Trustees may from time to time divide or combine the Shares of any
Series into a greater or lesser number of Shares of such Series without
thereby changing the proportionate beneficial interests of holders of
Shares in such Series. The number of Shares of each Series that may be
issued shall be unlimited.
Section 5.4. Series Shares, Assets, Liabilities and
Expenses.
Section 5.4.1. Series Shares. The Trustees may
classify or reclassify any unissued Shares or any Shares previously
issued and reacquired of any Series into Shares of such Series or
Shares of one or more other Series. The Trustees may hold as treasury
Shares (of the same or some other Series), reissue for such
consideration and on such terms as they may determine, or cancel any
Shares of any Series repurchased or redeemed by the Trust at
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their discretion from time to time.
Section 5.4.2. Series Assets. All consideration
received by the Trust for the issue or sale of Shares of a particular
Series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale, loan, exchange
or liquidation of such assets, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be,
shall irrevocably belong to that Series for all purposes, subject only
to the rights of creditors, and shall be so recorded upon the books of
account of the Trust. In the event that there are any assets, income,
earnings, profits, and proceeds thereof, funds, or payments which are
not readily identifiable as belonging to any particular Series, the
Trustees shall allocate them among any one or more of the Series
established and designated from time to time in such manner and on such
basis as they, in their sole discretion, deem fair and equitable. Each
such allocation by the Trustees shall be conclusive and binding upon
the Shareholders of all Series for all purposes.
Section 5.4.3. Series Liabilities and Expenses. The
assets belonging to each particular Series shall be charged with the
liabilities of the Trust in respect of that Series and all expenses,
costs, charges and reserve attributable to that Series, and any general
liabilities, expenses, costs, charges or reserves of the Trust which
are not readily identifiable as belonging to any particular Series
shall be allocated and charged by the Trustees to
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and among any one or more of the Series in such manner and on such
basis as the Trustees in their sole discretion deem fair and equitable.
Each such allocation by the Trustees shall be conclusive and binding
upon the Shareholders of all Series for all purposes.
Section 5.4.4. Termination of a Series. Any Series
may be terminated by the affirmative vote of at least two-thirds of the
Shares of such Series outstanding or, when authorized by a Series
Majority Shareholder Vote, by an instrument in writing signed by a
majority of the Trustees. Upon the termination of a Series, the Series
shall carry on no business except for the purpose of winding up its
affairs, and the Trustees shall proceed to wind up the affairs of the
Series, having with respect to such Series all powers contemplated by
Section 9.1 of this Declaration in the event of the termination of the
Trust.
At any time that there are no Shares outstanding of
any particular Series previously established, the Trustees may by an
instrument executed by a majority of their number, abolish the Series.
Section 5.5. Rights of Shareholders. Shares shall be
deemed to be personal property giving only the rights provided in this
Declaration. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof
and to have become a party hereto. The ownership
of the Trust Property and the right to conduct any business
hereinbefore described are vested exclusively in the Trustees, and the
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Shareholders shall have no interest therein other than the beneficial
interest conferred by their Shares, and they shall have no right to
call for any partition or division of any property, profits, rights or
interests of the Trust or any Series thereof nor can they be called
upon to share or assume any losses of the Trust or any Series thereof
or suffer an assessment of any kind by virtue of their ownership of
Shares. The death of a Shareholder during the continuance of the Trust
shall not operate to terminate the Trust or any Series thereof nor to
entitle the legal representative of such shareholder to an accounting
or to take any action in any court or otherwise against other
Shareholders or the Trustees or the Trust Property, but only to the
rights of such Shareholder hereunder. The Shares shall not entitle the
holder to preference, preemptive, appraisal, conversion or exchange
rights.
Section 5.6. Trust Only. The Trust shall be of the
type commonly termed a Massachusetts business trust. It is the
intention of the Trustees to create only the relationship of Trustee
and beneficiary between the Trustees and each Shareholder from time to
time. It is not the intention of the Trustees to create a general
partnership, limited partnership, joint stock association, corporation,
bailment or any form of legal relationship other than a trust. Nothing
in this Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint
stock association.
Section 5.7. Issuance of Shares.
Section 5.7.1. General. The Trustees may from time to
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time without vote of the Shareholders issue and sell or cause to be
issued and sold Shares of any Series, except that only Shares
previously contracted to be sold may be issued during any period when
the right of redemption is suspended pursuant to the provisions of
Section 6.6 hereof. All such Shares, when issued in accordance with the
terms of this Section 5.7, shall be fully paid and nonassessable.
Section 5.7.2. Price. No Shares of any Series shall
be issued or sold by the Trustees for less than an amount which would
result in proceeds to the Trust, before taxes and other expenses
payable by the Trust in connection with such transaction, of at least
the net asset value per share of Shares of such Series determined as
set forth in Article VII hereof as of the time specified in the
prospectus of the Trust at the time in effect.
Section 5.7.3. On Merger or Consolidation. In
connection with the acquisition of assets (including the acquisition of
assets subject to, and in connection with the assumption of,
liabilities), businesses or stock of another Person, the Trustees may
issue or cause to be issued Shares of any Series and accept in payment
therefor, in lieu of cash, such assets or businesses at their market
value (as determined by the Trustees) or such stock at the market value
(as determined by the Trustees) of the assets held by such other
Person, either with or without adjustment for contingent costs or
liabilities, provided that the funds of the Trust are permitted by law
to be invested in such assets, businesses or stock.
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Section 5.7.4. Fractional Shares. The Trustees may
issue and sell fractions of Shares of any Series, to three decimal
places, having pro rata all the rights of full Shares of such Series,
including, without limitation, the right to vote and to receive
dividends and distributions.
Section 5.8. Register of Shares. A register shall be
kept at the principal office of the Trust or an office of the Transfer
Agent which shall contain the names and addresses of the Shareholders
of each Series and the number of Shares of each such Series held by
them respectively and a record of all transfers thereof. Such register
shall be conclusive as to who are the holders of the Shares and who
shall be entitled to receive dividends or distributions or otherwise to
exercise or enjoy the rights of Shareholders of each Series. No
Shareholder shall be entitled to receive payment of any dividend or
distribution, nor to have notice given to him as herein or in the
By-Laws provided, until he has given his address to the Transfer Agent
or such other officer or agent of the Trust as shall keep the said
register for entry thereon.
Section 5.9. Share Certificates. No certificates
certifying ownership of Shares shall be issued except as the
Trustees may otherwise determine from time to time.
Section 5.10. Transfer of Shares. Shares of any Series
shall be transferable on the records of the Trust upon delivery to
the Trust or the Transfer Agent or Agents of appropriate evidence
of assignment, transfer, succession or authority to transfer
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accompanied by any certificate or certificates representing such Shares
previously issued to the transferor. Upon such delivery the transfer
shall be recorded on the register of the appropriate Series. Until such
record is made, the Trustees, the Transfer Agent, and the officers,
employees and agents of the Trust or any Series shall not be entitled
or required to treat the assignee or transferee of any Share as the
absolute owner thereof for any purpose, and accordingly shall not be
bound to recognize any legal, equitable or other claim or interest in
such Share on the part of any Person, other than the holder of record,
whether or not any of them shall have express or other notice of such
claim or interest.
Section 5.11. Voting Powers. The Shareholders shall
have power to vote only: (a) for the election of Trustees as
provided in Section 2.4 hereof; (b) with respect to any investment
advisory or management contract entered into pursuant to Section 3.2
hereof; (c) with respect to the removal of Trustees pursuant to Section
5.14 hereof; (d) with respect to any termination of the Trust, as
provided in Section 8.1 hereof; (e) with respect to any amendment of
this Declaration to the extent and as provided in Section 8.2 hereof;
(f) with respect to any merger, consolidation or sale of assets of the
Trust as provided in Section 8.3 hereof; (g) with respect to
incorporation of the Trust to the extent and as provided in Section 8.4
hereof; (h) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding or
claim should or should not be brought or maintained derivatively or
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as a class action on behalf of the Trust or the Shareholders; and (i)
with respect to such additional matters relating to the Trust as may be
required by this Declaration or the By-Laws or by reason of the
registration of the Trust or the Shares with the Commission or any
State or by any applicable law or any regulation or order of
the Commission or any State or as the Trustees may consider necessary
or desirable. On any matter submitted to a vote of Shareholders, all
Shares issued and outstanding shall, subject to applicable law, be
voted as a single class in the aggregate and not by Series, except with
respect to the following matters: (i) any investment advisory or
management contract pertaining to any particular Series entered into
pursuant to Section 3.2 hereof; (ii) any amendment of this Declaration
affecting the Shareholders of any particular Series differently from
the Shareholders of other Series; and (iii) such additional matters
relating to a particular Series as may be required by this Declaration
or by the By-Laws or by reason of the registration of the Trust or the
Shares of such Series with the Commission or any State or by any
applicable law (including the 1940 Act) or any regulation or order of
the Commission or any State or as the Trustees may consider necessary
or desirable. With respect to such matters, the Shareholders of each
affected Series shall have the power to vote as a separate Series. A
majority of the Shares voted shall decide any questions, except when a
different vote is specified by applicable law, any provision of the
By-Laws or this Declaration. Each whole Share shall be entitled to one
vote as to any matter on which Shareholders are
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entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in
the election of Trustees. Shares may be voted in person or by Proxy.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders (including the right to authorize an amendment to this
Declaration under Section 9.2 hereof) and may take any action required
by law, the By-Laws or this Declaration to be taken by Shareholders.
The By-Laws may include further provisions for Shareholders' votes and
related matters.
Section 5.12. Meetings of Shareholders. Meetings of
the Shareholders may be called at any time by the Chairman of the
Board, the President or any Vice President of the Trust, or by a
majority of the Trustees for the purpose of taking action upon any
matter requiring the vote or authority of the Shareholders as herein
provided or upon any other matters deemed to be necessary or desirable.
Without limiting the provisions of Section 5.14 hereof, a special
meeting of Shareholders may also be called at any time upon the written
request of a holder or the holders of not less than 25% of all of the
Shares entitled to be voted at such meeting, provided that the
Shareholder or Shareholders requesting such meeting shall have paid to
the Trust the reasonably estimated cost of preparing and mailing the
notice thereof, which the Secretary shall determine and specify to such
Shareholder or Shareholders.
Section 5.13. Action Without a Meeting. Any action
which may be taken by Shareholders may be taken without a meeting
if such proportion of Shareholders as is required to vote for
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approval of the matter by law, the Declaration or the By-Laws consents
to the action in writing and the written consents are filed with the
records of Shareholders' meetings. Such consents shall be treated for
all purposes as a vote taken at a Shareholders' meeting.
Section 5.14. Removal of Trustees by Shareholders. No
Trustee shall serve as trustee of the Trust after the holders of
record of not less than two-thirds of the outstanding Shares of the
Trust have declared that such Trustee be removed from office either
by a declaration in writing filed with the Secretary of the Trust
or by votes cast in person or by proxy at a meeting called for such
purpose. Notwithstanding the provisions of Section 5.12 hereof,
the Trustees shall comply at all times with the provisions of the
1940 Act, including without limitation Section 16(c) thereof or any
successor section, pertaining to the removal of Trustees by
Shareholders.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares. The Trustees shall
redeem Shares of any Series, subject to the conditions and at the price
determined as herein set forth, upon proper application of the record
holder thereof at such office or agency as may be designated from time
to time for that purpose by the Trustees. The Trustees shall have power
to determine from time to time the form and the other accompanying
documents which shall be necessary to constitute a proper application
for redemption.
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Section 6.2. Price. Such Shares shall be redeemed for
an amount equal to the net asset value of such Shares next determined
as set forth in Article VII hereof after receipt of a proper
application for redemption, less a charge, not to exceed one percent
(1%) of such net asset value, if and as fixed by resolution of the
Board of Trustees from time to time.
Section 6.3. Payment. Payment for such Shares
redeemed shall be made to the Shareholder of record within 7 days after
the date upon which proper application is received, subject to the
Trustees or their designated agent being satisfied that the purchase
price of such Shares has been collected and to the provisions of
Section 6.4 hereof. Such payment shall be made in cash or other assets
of the Trust or both, as the Trustees shall prescribe. For the purposes
of such payment for Shares redeemed, the value of assets delivered
shall be determined as set forth in Article VII hereof as of the same
time as of which the per share net asset value of such Shares is
determined.
Section 6.4. Effect of Suspension of Right of
Redemption. If, pursuant to Section 6.6 hereof, the Trustees shall
declare a suspension of the right of redemption, the rights of
Shareholders (including those who shall have applied for redemption
pursuant to Section 6.1 hereof but who shall not yet have received
payment) to have Shares redeemed and paid for by the Trust shall be
suspended until the time specified in Section 6.6. Any record holder
who shall have his redemption right so suspended may, during the period
of such suspension, by appropriate written notice of
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revocation at the office or agency where application was made, revoke
any application for redemption not honored. The redemption price of
Shares for which redemption applications have not been revoked shall
not exceed the net asset value of such Shares next determined as set
forth in Article VII hereof after the termination of such suspension,
and payment shall be made within 7 days after the date upon which the
application was made plus the period after such application during
which the determination of net asset value was suspended.
Section 6.5. Repurchase by Agreement. The Trust may
repurchase Shares directly, or through the Distributor or another agent
designated for the purpose, by agreement with the owner thereof, or an
agent designated by such owner, at a price not exceeding the net asset
value per share determined as set forth in Article VII hereof as of the
time specified in the prospectus of the Trust at the time in effect.
Section 6.6. Suspension of Right of Redemption. The
Trustees may declare a suspension of the right of redemption or
postpone the date of payment or redemption as permitted by the 1940 Act
and regulations and orders from time to time in effect thereunder. Such
suspension shall take effect at such time as the Trustees shall
specify, which shall not be later than the close of business on the
business day next following the declaration, and thereafter there shall
be no determination of net asset value until the Trustees shall declare
the suspension at an end, except that the suspension shall terminate in
any event on the first day on
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which (i) the condition giving rise to the suspension shall have ceased
to exist and (ii) no other condition exists under which suspension is
authorized under this Section 6.6. Each declaration by the Trustees
pursuant to this Section 6.6 shall be consistent with such applicable
rules and regulations, if any, relating to the subject matter thereof
as shall have been promulgated by the Commission or any other
governmental body having jurisdiction over the Trust and as shall be in
effect at the time. To the extent not inconsistent with such rules and
regulations, the determination of the Trustees shall be conclusive.
Section 6.7. Involuntary Redemption of Shares;
Disclosure of Holding. (a) If the Trustees shall, at any time and in
good faith, be of the opinion that direct or indirect ownership of
Shares or other securities of the Trust or any Series thereof has or
may become concentrated in any Person to an extent which would
disqualify the Trust or any Series thereof as a regulated investment
company under the United States Internal Revenue Code, then the
Trustees shall have the power by lot or other means deemed equitable by
them
(i) to call for redemption a number, or principal amount, of
Shares sufficient in the opinion of the Trustees to maintain or bring
the direct or indirect ownership of Shares into conformity with the
requirements for such qualification, and
(ii) to refuse to transfer or issue Shares to any Person
whose acquisition of the Shares in question would in the
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opinion of the Trustees result in such disqualification. Any redemption
pursuant to this Section 6.7(a) shall be effected at a redemption price
determined in accordance with Section 6.2 hereof.
(b) The holders of Shares of the Trust or any Series
thereof shall, upon request, disclose to the Trustees in writing such
information with respect to direct and indirect ownership of Shares of
the Trust or any Series thereof as the Trustees deem necessary to
comply with the provisions of the United States Internal Revenue Code,
or to comply with the requirements of any other taxing authority.
(c) The Trustees shall have the power to re- deem
Shares of any Series in any Shareholder's account at a redemption price
determined in accordance with Section 6.2 hereof if at any time the
total number of Shares of such Series held in such account is fewer
than an established minimum selected by the Trustees, in which event
the Shareholder shall be notified that the number of Shares in the
account is fewer than the minimum and shall be allowed a period, fixed
by the Trustees, in which to avoid such redemption by increasing the
account to at least the established minimum.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE; DISTRIBUTIONS
Section 7.1. By Whom Determined. The Trustees shall have
the power and duty to determine from time to time the net asset
value per share of the Shares of each Series. They may appoint one
or more Persons to assist them in the determination of the value of
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securities in
the portfolio of each Series and to make the actual calculations
pursuant to their directions. Any determination made pursuant to this
Article VII shall be binding on all parties concerned.
Section 7.2. When Determined. The net asset value
shall be determined at such times as the Trustees shall prescribe in
accordance with the applicable provisions of the 1940 act and
regulations and orders from time to time in effect thereunder. The
Trustees may suspend the daily determination of net asset value to the
extent permitted by the 1940 Act or the regulations and orders from
time to time in effect thereunder.
Section 7.3. Computation of Per Share Net Asset Value.
Section 7.3.1. Net Asset Value Per Share. The net
asset value of each Share of each Series as of any particular time
shall be the quotient obtained by dividing the value of the net assets
of such Series (determined in accordance with Section 7.3.2.) by the
total number of outstanding Shares of that Series.
Section 7.3.2. Value of the Net Assets of a Series.
The value of the net assets of any Series as of any particular time
shall be the value of that Series' assets less its liabilities,
determined and computed as follows:
(1) Assets. The assets of any Series shall be deemed to
include the following assets relating to that Series:
(A) all
cash on hand or on deposit, including any interest accrued thereon, (B)
all bills and demand notes and accounts receivable, (C) all securities
owned or contracted for by the
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Trustees, (D) all stock and cash dividends and cash distributions
payable to but not yet received by the Trustees (when the valuation of
the underlying security is being determined ex-dividend), (E) all
interest accrued on any interest-bearing securities owned by the
Trustees (except accrued interest included in the valuation of the
underlying security) and (F) all other property of every kind and
nature, including prepaid expenses, but not any insurance policy of the
kind referred to in Section 2.1(l)(ii) until such time as any amount
payable thereunder becomes due and payable to the Trust.
(2) Valuation of Assets. Determination of the value of such
assets shall be made, with respect to securities for which market
quotations are readily available, at the market value of such
securities; and with respect to other securities and assets, at the
fair value as determined in good faith by the Trustees.
(3) Liabilities. The liabilities of any Series shall not be
deemed to include any Shares of that Series and surplus, but they shall
be deemed to include the following liabilities relating to that Series:
(A) all bills and accounts payable, (B) all administrative expenses
accrued and unpaid, (C) all contractual obligations for the payment of
money or property, including the amount of any declared but unpaid
dividends upon Shares of that Series and the amount of
all income accrued to the account of but not paid to Shareholders of
that Series, (D) all reserves authorized or
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approved by the Trustees for taxes or contingencies and (E) all other
liabilities of whatsoever kind and nature except any liabilities
represented by Shares of that Series and surplus. The Board of Trustees
is empowered, in its discretion, to establish other methods for
determining net asset value whenever such other methods are deemed by
it to be necessary or desirable, including, but without limiting the
generality of the foregoing, any method deemed necessary or desirable
in order to enable the Corporation to comply with any provision of the
Investment Company Act of 1940 or any rule or regulation thereunder.
Section 7.4. Interim Determinations. Any
determination of net asset value other than as of the close of trading
on the New York Stock Exchange may be made either by appraisal or by
calculation or estimate. Any such calculation or estimate shall be
based on changes in the market value of representative or selected
securities or on changes in recognized market averages since the last
closing appraisal and made in a manner which in the opinion of the
Trustees will fairly reflect the changes in the net asset value.
Section 7.5. Outstanding Shares. For the purposes of
this Article VII, outstanding Shares of any Series shall mean those
Shares shown from time to time on the books of such Series or the
Transfer Agent as then issued and outstanding, adjusted as follows:
(a) Shares sold shall be deemed to be outstanding Shares from
the time as of which the Trust has agreed to such sale and the sale
price in currency has been determined.
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(b) Shares distributed pursuant to Section 7.6 shall be deemed
to be outstanding as of the time that Shareholders who shall receive
the distribution are determined.
(c) Shares for which a proper application for redemption has
been made or which are subject to repurchase by the Trustees shall be
deemed to be outstanding Shares up to and including the time as of
which the redemption or repurchase price is determined. After such
time, they shall be deemed to be no longer outstanding Shares and the
redemption or purchase price until paid shall be deemed to be a
liability of the Trust.
Section 7.6. Distributions to Shareholders. Without
limiting the powers of the Trustees under Subsection (f) of Section 2.1
of Article II hereof, the Trustees may at any time and from time to
time, as they may determine, allocate or distribute to Shareholders of
a Series such income and capital gains of the Series, accrued or
realized, as the Trustees may determine, after providing for actual,
accrued or estimated expenses and liabilities (including such reserves
as the Trustees may establish) determined in accordance with generally
accepted accounting practices. The Trustees shall have full discretion
to determine which items shall be treated as income and which items as
capital and their determination shall be binding upon the Shareholders.
Such distributions shall be made in cash, property or Shares of the
appropriate Series or any combination thereof as determined by the
Trustees. Any such distribution paid in Shares shall be paid at the
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net asset value thereof as determined pursuant to this Article VII. The
Trustees may adopt and offer to Shareholders such dividend reinvestment
plans, cash dividend payout plans or related plans as the Trustees
shall deem appropriate. Inasmuch as the computation of net income and
gains for Federal income tax purposes may vary from the computation
thereof on the books of the Trust, the above provisions shall be
interpreted to give the Trustees the power in their discretion to
allocate or distribute for any fiscal year as
ordinary dividends and as capital gains distributions, respectively,
additional amounts sufficient to enable the Trust to avoid or reduce
liability for taxes.
Section 7.7. Power to Modify Foregoing Procedures.
Notwithstanding any of the foregoing provisions of this Article VII,
the Trustees may prescribe, in their absolute discretion, such other
bases and times for the determination of the per share net asset value
of Shares of any Series as may be permitted by, or as they deem
necessary or desirable to enable the Trust to comply with, any
provision of the 1940 Act, any rule or regulation thereunder (including
any rule or regulation adopted pursuant to Section 22 of the 1940 Act,
or any successor section, by the Commission or any securities
association or exchange registered under the Securities Exchange Act of
1934, as amended) or any order of exemption issued by the Commission,
all as in effect now or as hereafter amended or modified.
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ARTICLE VIII
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
Section 8.1 Duration and Termination. (a) Unless
terminated as provided herein, the Trust shall continue without
limitation of time. The Trust may be terminated by the affirmative vote
of at least 66 2/3% of the Shares outstanding or, when authorized by a
Majority Shareholder Vote, by an instrument in writing signed by a
majority of the Trustees. Upon the termination of the Trust,
(i) The Trust shall carry on no business except for the
purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust
and all of the powers of the Trustees under this Declaration shall
continue until the affairs of the Trust shall have been wound up,
including the power to fulfill or discharge the contracts of the Trust,
collect its assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining Trust Property to
one or more persons at public or private sale for consideration which
may consist in whole or in part of cash, securities or other property
of any kind, discharge or pay its liabilities, and do all other acts
appropriate to liquidate its business, provided that any sale,
conveyance, assignment, exchange, transfer or other disposition of all
or substantially all the Trust Property that requires Shareholder
approval under Section 8.3 hereof shall receive the approval so
required.
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(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust Property, in cash or in
kind or partly each, among the Shareholders according to their
respective rights.
(b) After termination of the Trust and distribution
to the Shareholders as herein provided, a majority of the Trustees
shall execute and lodge among the records of the Trust an instrument in
writing setting forth the fact of such termination, and the Trustees
shall thereupon be discharged from all further liabilities and duties
hereunder, and the rights and interests of all Shareholders shall
thereupon cease.
Section 8.2. Amendment Procedure. (a) This
Declaration may be amended from time to time by an instrument in
writing signed by a majority of the Trustees (or by an officer of the
Trust pursuant to the vote of a majority of the Trustees) when
authorized by a Majority Shareholder Vote or, subject to the provisions
of Section 5.11, a Series Majority Shareholder Vote, as the case may
be, provided that any amendment having the purpose of changing the name
of the Trust or of any Series or of supplying any omission, curing any
ambiguity or curing, correcting or supplementing any defective or
inconsistent provision, or which has been determined by vote of a
majority of the Trustees, including a majority of the Trustees who are
not Interested Persons of the Trust, not to adversely affect the rights
of any Shareholder with respect to
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which such amendment is or purports to be applicable, shall not require
authorization by the Shareholders. Nothing contained in this
Declaration shall permit the amendment of this Declaration to impair
the exemption from personal liability of the Shareholders, Trustees,
officers, employees and agents of the Trust or any Series thereof or to
permit assessments upon Shareholders.
(b) A certificate signed by a majority of the
Trustees (or by an officer of the Trust pursuant to the vote of a
majority of the Trustees) setting forth an amendment and reciting that
it was duly adopted as aforesaid, or a copy of this Declaration as
amended, executed by a majority of the Trustees, shall be conclusive
evidence of such amendment when lodged among the records of the Trust.
Subject to the foregoing any such amendment shall be effective as
provided in the instrument containing the terms of such amendment or,
if there is no provision therein with respect to effectiveness, upon
the execution of such instrument and of a certificate (which may be a
part of such instrument) executed by a Trustee or officer of the Trust
to the effect that such amendment has been duly adopted.
Section 8.3. Merger, Consolidation and Sale of
Assets. The Trust may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange
all or substantially all of the Trust Property, including its good
will, upon such terms and conditions and for such consideration when
and as authorized by a Majority Shareholder Vote at any Shareholders'
meeting called for the purpose.
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Section 8.4. Incorporation. With the approval of a
Majority Shareholder Vote, the Trustees may cause to be organized or
assist in organizing under the laws of any jurisdiction a corporation
or corporations or any other trust, partnership, association or other
organization to take over all of the Trust Property or to carry on any
business in which the Trust shall directly or indirectly have any
interest, and may sell, convey and transfer the Trust Property to any
such corporation, trust, partnership, association or other organization
in exchange for the shares or securities thereof or otherwise, and may
lend money to, subscribe for the shares or securities of, and enter
into any contracts with any such corporation, trust, partnership,
association or other organization, or any corporation, partnership,
trust, association or other organization in which the Trust holds or is
about to acquire shares or any other interest. The Trustees may also
cause a merger or consolidation between the Trust or any successor
thereto and any such corporation, trust, partnership, association or
other organization. Nothing contained herein shall be construed as
requiring approval of Shareholders for the Trustees to organize or
assist in organizing one or more corporations, trusts, partnerships,
associations or other organizations and selling, conveying or
transferring less than all or substantially all of the Trust Property
to such organization or entities.
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ARTICLE IX
MISCELLANEOUS
Section 9.1. Filing. This Declaration and any
amendment hereto shall be filed with the Secretary of the Commonwealth
of Massachusetts and in such other places as may be required under the
laws of the Commonwealth of Massachusetts and may also be filed or
recorded in such other places as the Trustees deem appropriate. A
restated Declaration, integrating into a single instrument all of the
provisions of this Declaration which are then in effect and operative,
may be executed from time to time by a majority of the Trustees and
shall, upon filing with the Secretary of the Commonwealth of
Massachusetts, be conclusive evidence of all amendments contained
therein and may hereafter be referred to in lieu of the original
Declaration and the various amendments thereto.
Section 9.2. Registered Agent. The Registered Agent
of the Trust within the Commonwealth of Massachusetts for service of
process, and the principal place of business of the Trust within the
Commonwealth of Massachusetts, shall be The Prentice-Hall Corporation
System, Inc., 84 State Street, Boston, Massachusetts 02109, or such
other agent or place, respectively, as the Trustees may designate from
time to time by any supplement to this Declaration of Trust.
Section 9.3. Governing Law. This Declaration is
executed by the Trustees with reference to the laws of the Commonwealth
of Massachusetts, and the rights of all parties and the
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validity and construction of every provision hereof shall be subject to
and construed according to the applicable laws of said Com- monwealth.
Section 9.4. Counterparts. This Declaration may be
simultaneously executed in several counterparts, each of which shall be
deemed to be an original, and such counterparts, together, shall
constitute one and the same instrument, which shall be sufficiently
evidenced by any such original counterpart.
Section 9.5. Reliance by Third Parties. Any
certificate executed by an officer of the Trust or a Trustee certifying
to: (a) the number or identity of Trustees or Shareholders, (b) the due
authorization of the execution of any instrument or writing, (c) the
form of any vote passed at a meeting of Trustees or Shareholders, (d)
the fact that the number of Trustees or Shareholders present at any
meeting or executing any written instrument satisfies the requirements
of this Declaration, (e) the form of any By-Laws adopted by or the
identity of any officers elected by the Trustees or (f) the existence
of any fact or facts which in any manner relate to the affairs of the
Trust or any Series thereof, shall be conclusive evidence as to the
matters so certified in favor of any Person dealing with the Trustees
and their successors.
Section 9.6. Provisions in Conflict with Law or
Regulations. (a) The provisions of this Declaration are
severable, and if the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with
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requirements of the 1940 Act, would be inconsistent with any of the
conditions necessary for qualification of the Trust as a regulated
investment company under the United States Internal Revenue Code or is
inconsistent with other applicable laws and regulations, such provision
shall be deemed never to have constituted a part of this Declaration,
provided that such determination shall not affect any of the remaining
provisions of this Declaration or render invalid or improper any action
taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be
held invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provision in any
other jurisdiction or any other provision of this Declaration in any
jurisdiction.
Section 9.7 Use of Name. The Trust is adopting its
name through permission of the firm of Lord, Abbett & Co., which is
entering into a management or advisory contract with the Trust. Such
contract shall make appropriate provisions that upon the termination of
such contract for any cause, or if such firm, or a subsidiary,
affiliate or successor thereof, deems it advisable to withdraw the
right to the use of its name, the Trust will, at the request of such
firm, or of a subsidiary, affiliate or successor thereof lawfully using
the name, take such action as may be necessary to change its name to
eliminate all use of or reference to the words "Lord Abbett" in any
form and will not use the
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registered service mark of Lord, Abbett & Co. without the written
consent of such firm, subsidiary, affiliate or successor. The Trust
shall also agree in such contract that investment companies other than
the Trust for which such firm or a subsidiary or successor thereof may
act as investment adviser, and other companies affiliated with Lord,
Abbett & Co., may be formed with the words "Lord Abbett" in their
corporate titles. Such agreements on the part of the Trust are hereby
made binding upon it, its Trustees, officers, shareholders, creditors
and all other persons claiming under or through it.
Section 9.8. Section Headings; Interpretation.
Section headings in this Declaration are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.
References in this Declaration to "this Declaration" shall be deemed to
refer to this Declaration as from time to time amended, and all
expressions such as "hereof", "herein" and "hereunder" shall be deemed
to refer to this Declaration as from time to time amended and not
exclusively to the article or section in which such words appear.
IN WITNESS WHEREOF, the undersigned have executed
this instrument this 16th day of May, 1990.
/s/ Ronald P. Lynch
Ronald P. Lynch
/s/ John M. McCarthy
John M. McCarthy
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/s/ Robert S. Dow
Robert S. Dow
/s/ Thomas F. Creamer
Thomas F. Creamer
/s/ Stewart S. Dixon
Stewart S. Dixon
/s/ John C. Jansing
John C. Jansing
/s/ C. Alan MacDonald
C. Alan MacDonald
/s/ Hansel B. Millican
Hansel B. Millican
/s/ Thomas J. Neff
Thomas J. Neff
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<PAGE>
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK) NEW YORK, NEW YORK
On May 16th, 1990 there personally appeared before me the
above-named Ronald P. Lynch, John M. McCarthy, Robert S. Dow,
Thomas F. Creamer, Stewart S. Dixon, John C. Jansing, C. Alan
MacDonald, Hansel B. Millican and Thomas J. Neff who severally
acknowledged the foregoing instrument to be their free act and
deed.
Before me
/s/ Lydia Guzman
Notary Public
My commission expires:
May 15, 1991
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MANAGEMENT AGREEMENT
AGREEMENT made as of this 9th day of April, 1990 by and
between LORD ABBETT EQUITY FUND, a Massachusetts business trust (hereinafter
called the "Trust"), and LORD, ABBETT & CO., a New York partnership (hereinafter
called the "Investment Manager").
WHEREAS, the Trust and each Series thereof desires to obtain
the investment management services of the Investment Manager and the Investment
Manager is willing to provide services of the nature desired upon the terms and
conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and
of other good and valuable consideration, receipt of which is hereby
acknowledged, it is agreed as follows:
1. Each Series through the Trust hereby employs the Investment
Manager under the terms and conditions of this Agreement, and the Investment
Manager hereby accepts such employment and agrees to perform supervisory
functions of the Trust with respect to the investment and reinvestment of its
property and assets (whether or not held in trust or in the custody of a bank or
trust company subject to the Trust's direction or control) including, without
limitation, the supervision of its investment portfolios and the recommendation
of investment policies and procedures within the limitations set forth in the
Trust's Registration Statement on file with the Securities and Exchange
Commission under the Securities Act of 1933 and the Investment Company Act of
1940.
The Investment Manager agrees to maintain an adequate
organization of competent persons to perform the supervisory
<PAGE>
functions mentioned herein.
All recommendations with respect to the investment portfolios
will be made to the Trust's trading department which, with the approval of
authorized officers of the Trust, will execute all trades in accordance with the
Trust's investment procedures.
The Investment Manager reserves the right, in its discretion,
to purchase or otherwise obtain statistical information and services from other
sources, including affiliated persons of the Investment Manager.
Notwithstanding the provisions of this paragraph 1, the
investment policies and procedures and all other actions of the Trust are, and
shall at all times be, subject to the control and direction of its Trustees.
2. Each Series of the Trust agrees to pay the Investment
Manager for its services under this Agreement and for the expenses assumed, a
management fee computed and payable monthly at the annual rate of .65 of one
percent (1%) of the value of the Series' average daily net assets. The value of
the net assets of each Series shall include all assets of such Series held in
trust or in custody of any bank, savings bank or trust company for the Trust,
subject to its control or direction, and shall be determined as provided in the
Declaration of Trust of the Trust. The fee shall be paid on the first day of
each month for the preceding month.
The Investment Manager may receive research and other statistical
information from broker-dealers and from other sources and, in accordance with
section 28(e) of the Securities Exchange Act
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<PAGE>
of 1934, a broker-dealer may be paid a commission for a transaction involving
portfolio securities of the Trust exceeding the amount another broker-dealer
would have charged for the same transaction if it is determined by the
Investment Manager in good faith that such amount of commission is reasonable in
relation to the value of the research services provided by the executing
broker-dealer, viewed in terms of either the particular transaction or the
overall responsibilities of the Investment Manager with respect to the Trust and
other accounts (investment companies and other investment clients) with respect
to which it exercises investment discretion. Such research services may be used
by the Investment Manager in serving all its accounts, and not all of such
research services need necessarily be used by the Investment Manager in
connection with its services to the Trust.
It is understood that any supplemental advisory or statistical
services which may be provided to the Trust or to the Investment Manager from
time to time by independent broker-dealers or persons other than the Investment
Manager, for whatever reason, shall not reduce the amount of the fees payable to
the Investment Manager hereunder. It is recognized that such supplementary
advisory or statistical services may be useful to the Investment Manager and the
Trust, but their value is indeterminable and is not to be considered a
substitute for the services provided by the Investment Manager hereunder.
3. It is understood that the services of the Investment
Manager are not deemed to be exclusive, and nothing in this Agreement
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shall prevent the Investment Manager, or any officer, director, partner or
employee thereof, from providing similar services to other investment companies
and other clients (whether or not their investment objectives and policies are
similar to those of the Trust) or to engage in other activities. When other
clients of the Investment Manager desire to purchase or sell the same portfolio
security at the same time as the Trust, it is understood that such purchases and
sales will be made as nearly as practicable on a pro rata basis in proportion to
the amounts desired to be purchased or sold by each client.
4. Each Series of the Trust will, at its own expense, furnish
to the Investment Manager periodic (but not less than semi-annually) statements
of its books of account, including balance sheets and earnings statements, and
all other information which may reasonably be required, from time to time, by
the Investment Manager, and will, at its own expense, at all times keep the
Investment Manager fully advised as to the cash, securities and other property
then comprising its assets, and furnish daily detailed price makeup sheets with
respect to each of its investment portfolios and shares of each class of its
capital stock outstanding.
5. The Investment Manager shall be under no obligation to pay
any fees, costs, expenses or other charges of any Series of the Trust, except
for the compensation of its officers, the compensation, if any, of its Trustees
who are affiliated with the Investment Manager, the rental for its office space,
and the ordinary and
4
<PAGE>
necessary office and clerical expenses relating to research, statistical work
and supervision of the Trust's investment portfolio, to be performed by the
Investment Manager under paragraph 1 of this Agreement. Each Series of the Trust
will pay its own fees, costs, expenses or charges relating to its assets and
operations, including without limitation: office and clerical expenses not
relating to research, statistical work and supervision of the Trust's investment
portfolio; fees and expenses of trustees not affiliated with the Investment
Manager; governmental fees; interest charges; taxes; association membership
dues; fees and charges for legal and auditing services; fees and expenses of any
custodians or trustees with respect to custody of its assets; fees, charges and
expenses of dividend disbursing agents, registrars and transfer agents
(including the cost of keeping all necessary shareholder records and accounts,
and of handling any problems relating thereto and the expense of furnishing to
all shareholders statements of their accounts after every transaction including
the expense of mailing); cost and expenses of repurchase and redemption of its
shares; cost and expenses of preparing, printing and mailing to shareholders
stock certificates, proxy statements and material, prospectuses, reports and
notices; costs of preparing reports to governmental agencies; brokerage fees and
commissions of every kind and expenses in connection with the execution of
portfolio security transactions (including the cost of any service or agency
designed to facilitate the purchase and sale of portfolio securities); and all
postage, insurance premiums, and any other fee, cost, expense or charge of any
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kind incurred by and on behalf of the Trust and not expressly assumed by the
Investment Manager under this Agreement.
Notwithstanding any other provision of this Agreement, if
expenses (including the management fee hereunder but excluding interest, taxes,
brokerage fees, and where permitted, extraordinary expenses) borne by the Trust
in any fiscal year exceed expense limitations applicable to the Trust imposed by
state securities administrators, as such limitations may be lowered or raised
from time to time, the Investment Manager will reimburse the applicable Series
of the Trust for any such excess. If the Investment Manager pays for other
expenses of the Trust or furnishes without charge to the Corporation services
the cost of which is to be borne by the Trust under this Agreement, the
Investment Manager shall not be deemed to have waived its rights under this
Agreement to have the Trust pay for such expenses or provide or pay for such
services in the future. The Investment Manager may also advance the payment of
expenses, subject to reimbursement by the Trust in the ordinary course of
business.
6. The Investment Manager agrees that it shall observe and be
bound by all of the provisions of the Declaration of Trust (including any
amendments thereto) of the Trust which shall in any way limit or restrict or
prohibit or otherwise regulate any action by the Investment Manager.
7. Other than to abide by the provisions hereof and render
the services called for hereunder in good faith, the Investment
Manager assumes no responsibility under this Agreement and, having so
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<PAGE>
acted, the Investment Manager shall not be held liable or accountable for any
mistakes of law or fact, or for any error or omission of its officers,
directors, partners or employees, or for any loss or damage arising or resulting
therefrom suffered by the Trust or any of its stockholders, creditors, directors
or officers; provided however, that nothing herein shall be deemed to protect
the Investment Manager against any liability to the Trust or to its stockholders
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of the reckless disregard of
its obligations and duties hereunder. The Investment Manager shall not be
responsible for any action of the Trustees of the Trust in following or
declining to follow any advice or recommendation of the Investment Manager.
8. Neither this Agreement nor any other transaction between
the parties hereto pursuant to this Agreement shall be invalidated or in any way
affected by the fact that any or all of the trustees, officers, stockholders, or
other representatives of the Trust are or may be interested in the Investment
Manager, or any successor or assignee thereof, or that any or all of the
trustees, officers, partners, or other representatives of the Investment Manager
are or may be interested in the Trust, except as otherwise may be provided in
the Investment Company Act of 1940, as amended. The Investment Manager in acting
hereunder shall be an independent contractor and not any agent of the Trust.
9. This Agreement shall become effective upon the
effective date of the Registration Statement of the Trust, and shall
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<PAGE>
continue in force for two years from the date thereof, and is renewable annually
thereafter by specific approval of the trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Trust; any such renewal
shall be approved by the vote of a majority of the directors who are not parties
to this Agreement or interested persons of the Investment Manager or of the
Trust, cast in person at a meeting called for the purpose of voting on such
renewal.
This Agreement may be terminated without penalty at any time
by the trustees of the Trust on 60 days' written notice. This Agreement shall
automatically terminate in the event of its assignment. The terms "interested
persons", "assignment" and "vote of a majority of the outstanding voting
securities" shall have the same meaning as those terms are defined in the
Investment Company Act of 1940 as amended.
10. The Investment Manager reserves the right to grant the use
of the name "LORD ABBETT" OR "LORD, ABBETT & CO.", or any derivative thereof, to
any other investment company or business enterprise. The Investment Manager
reserves the right to withdraw from the Trust the use of the name "LORD ABBETT"
and the use of its registered service mark; at such time of withdrawal of the
right to use the name "LORD ABBETT", the Investment Manager agrees that the
question of continuing this Agreement may be submitted to a vote of the Trust's
shareholders. In the event of such withdrawal or the termination of this
Agreement, for any reason, the Trust will, on the written request of the
Investment Manager, take such action as may be
8
<PAGE>
necessary to change its name and eliminate all reference to the words "LORD
ABBETT" in any form, and will no longer use such registered service mark.
11. The Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts. The obligations of the
Trust, including those imposed hereby, are not personally binding upon, nor
shall resort be had to the private property of, any of the trustees,
shareholders, officers, employees or agents of the Trust individually, but are
binding only upon the assets and property of the Trust. Any and all personal
liability, either at common law or in equity, or by statute or constitution, of
every such trustee, shareholder, officer, employee or agent for any breach by
the Trust of any agreement, representation or warranty hereunder is hereby
expressly waived as a condition of and in consideration for the execution of
this Agreement by the Trust.
9
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IN WITNESS WHEREOF, the Trust has caused this Agreement to be
executed by its duly authorized officers and its corporate seal to be affixed
hereto, and the Investment Manager has caused this Agreement to be executed by
one of its partners all on the day and year first above written.
LORD ABBETT EQUITY FUND
By: /s/ Ronald P. Lynch
Chairman of the Board
/s/ Thomas F. Konop
Assistant Secretary
LORD, ABBETT & CO.
By: /s/ Kenneth B. Cutler
A Partner
10
DISTRIBUTION AGREEMENT
AGREEMENT made this 24th day of April, 1990 by and between
LORD ABBETT EQUITY FUND, a Massachusetts business trust (hereinafter
called the "Trust"), and LORD, ABBETT & CO., a New York partnership
(hereinafter called the "Distributor").
WHEREAS, the Trust desires to enter into an agreement with the
Distributor for the purpose of finding purchasers for its securities
which are issued in various Series, and the Distributor is desirous of
undertaking to perform these services upon the terms and conditions
hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and
of other good and valuable consideration, receipt of which is hereby
acknowledged, it is agreed as follows:
1. The Trust hereby appoints the Distributor its exclusive
selling agent for the sale of its shares of capital stock, of all
Series, and all other securities now or hereafter created or issued by
the Trust (except notes and other evidences of indebtedness issued for
borrowed money), pursuant to paragraph 2 of this Agreement, and the
Trust agrees to issue (and upon request of its shareholders make
delivery of certificates for) its shares of stock or other securities,
subject to the provisions of its Declaration of Trust, to purchasers
thereof and against payment of the consideration to be received by the
Trust therefor. The Distributor may appoint one or more independent
broker-dealers and the Distributor or any such broker-dealer may
transmit orders to
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the Trust for acceptance at its office in New York. Such shares of
stock shall be registered in such name or names and amounts as the
Distributor or any such broker-dealer may request from time to time,
and all shares of stock when so paid for and issued shall be fully paid
and non-assessable.
2. The Distributor will act as exclusive selling agent
for the Trust in selling shares of its capital stock.
The Distributor agrees to sell exclusively through independent
broker-dealers and not through agents of the Distributor or the Trust
during the initial offering described in the Trust's first prospectus,
and agrees to use its best efforts to find purchasers for shares of
stock of the Trust to be offered; provided however, that the services
of the Distributor under this Agreement are not deemed to be exclusive,
and nothing in this Agreement shall prevent Distributor, or any
officer, director, partner or employee thereof, from providing similar
services to other investment companies and other clients or to engage
in other activities.
The sales charge or premium relating to each class of shares
of capital stock of the Trust shall be determined by the Trustees of
the Trust, but in no event shall the sales charge or premium exceed the
maximum rate permitted under Federal regulations, and the amount to be
retained by the Trust on any sale of its shares of capital stock shall
in each case be the net asset value thereof (determined as provided in
the Declaration of Trust). From the premium the Trust agrees to pay the
Distributor a sales
2
<PAGE>
commission. The Distributor may allow concessions from such sales
commissions. In such event the amount of the payment hereunder by the
Trust to the Distributor shall be the difference between the sales
commission and any concessions which have been allowed in accordance
herewith. The sales commission payable to the Distributor shall not
exceed the premium.
Recognizing the need for providing an incentive to sell and
providing necessary and continuing informational and investment
services to stockholders of the Trust, the Trust or the Distributor (by
agreement) may pay independent broker dealers a periodic servicing fee
based on the net asset value of all shareholder accounts of such
broker-dealers.
3. Notwithstanding anything herein to the contrary, sales and
distributions of the Trust's capital stock may be made upon the
following special terms:
(a) Capital gains distributions and income dividends on shares of the
Trust's stock may be reinvested by shareholders at net asset
value without any sales commission.
(b) Shares of stock may be issued by the Trust at net asset value
without any sales commission in connection with offers of
exchange between investment companies having the same
Distributor.
(c) Shares of stock may be issued by the Trust at net asset value
without a sales commission or at a reduced sales commission as
may from time to time
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be permitted by rules of the Securities and Exchange Commission under
the Investment Company Act of 1940.
4. The independent broker-dealers who sell the Trust's shares may
also render other services to the Trust, such as executing purchases
and sales of portfolio securities, providing statistical information,
and similar services. The receipt of compensation for such other
services shall in no way reduce the amount of the sales commissions
payable hereunder by the Trust to the Distributor or the amount of the
commissions, concessions or fees allowed.
5. The Distributor agrees to act as agent of the Trust in
connection with the repurchase of shares of capital stock of the
Trust, or in connection with exchanges of shares between investment
companies having the same Distributor, and the Trust agrees to advise
the Distributor of the net asset value of its shares of stock as
frequently as may be mutually agreed, and to accept shares duly
tendered to the Distributor. The net asset value shall be determined
as provided in the Articles of In Trust of the Trust.
6. The Trust will pay all fees, costs, expenses and charges in
connection with the issuance, federal registration, transfer,
redemption and repurchase of its shares of capital stock, including
without limitation, all fees, costs, expenses and charges of transfer
agents and registrars, all taxes and other Governmental charges, the
costs of qualifying or continuing the qualifications of the Trust as
broker-dealer, if required, and of registering the
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shares of the Trust's capital stock under the state blue sky laws, or
similar laws of any jurisdiction (domestic or foreign), costs of
preparation and mailing prospectuses to its shareholders, and any
other cost, expense or charge not expressly assumed by the Distributor
hereunder. The Trust will also furnish to the Distributor daily such
information as may reasonably be requested by the Distributor in order
that it may know all of the facts necessary to sell shares of the
Trust's stock.
7. The Distributor agrees to pay the cost of all sales literature
and other material which it may require or think desirable to use in
connection with sale of such shares, including the cost of reproducing
the offering prospectus furnished to it by the Trust. The Trust agrees
to use its best efforts to qualify its shares of stock for sale under
the laws of such states of the United States and such other
jurisdictions (domestic or foreign) as the Distributor may reasonably
request. If the Distributor pays for other expenses of the Trust or
furnishes the Trust with services, the cost of which is to be borne by
the Trust under this Agreement, the Distributor shall not be deemed to
have waived its rights under this Agreement to have the Trust pay for
such expenses or provide such services in the future.
8. The Distributor agrees to use its best efforts to find
purchasers for shares of stock of the Trust and to make reasonable
efforts to sell the same so long as in the judgment of the Distributor
a substantial distribution can be
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obtained by reasonable efforts. The Distributor is not authorized to
act otherwise than in accordance with applicable laws.
9. Neither this Agreement nor any other transaction between the
parties hereto pursuant to this Agreement shall be invalidated or in
any way affected by the fact that any or all of the directors,
officers, stockholders, or other representatives of the Trust are or
may be interested in the Distributor, or any successor or assignee
thereof, or that any or all of the directors, officers, partners, or
other representatives of the Distributor are or may be interested in
the Trust, except as otherwise may be provided in the Investment
Company Act of 1940.
10. The Distributor agrees that it will not sell for its own
account to the Trust any stocks, bonds or other securities of any kind
or character, except that if it shall own any of the Trust's shares of
stock or other securities, it may sell them to the Trust on the same
terms as any other holder might do.
11. Other than to abide by the provisions hereof and render the
services called for hereunder in good faith, the Distributor assumes
no responsibility under this Agreement and, having so acted, the
Distributor shall not be held liable or held accountable for any
mistake of law or fact, or for any loss or damage arising or resulting
therefrom suffered by the Trust or any of the stockholders, creditors,
directors, or officers of the Trust; provided, however, that nothing
herein shall be deemed to protect the Distributor against any
liability to the Trust or its shareholders by reason of willful
misfeasance, bad faith or gross
6
<PAGE>
negligence in the performance of its duties hereunder, or by reason of
the reckless disregard of its obligations and duties hereunder.
12. The Distributor agrees that it shall observe and be bound by
all of the terms of the Articles of In Trust, including any amendments
thereto, of the Trust which shall in any way limit or restrict or
prohibit or otherwise regulate any action of the Distributor.
13. This Agreement shall continue in force for two years from the
date hereof, and it is renewable annually thereafter by specific
approval of the Board of Directors of the Trust or by vote of a
majority of the outstanding voting securities of the Trust; any such
renewal shall be approved by the vote of a majority of the directors
who are not parties to this Agreement or interested persons of the
Distributor or of the Trust, cast in person at a meeting called for
the purpose of voting on such renewal.
This Agreement may be terminated without penalty at any time by
the Board of Directors of the Trust or by vote of a majority of the
outstanding voting securities of the Trust on 60 days' written notice.
This Agreement shall automatically terminate in the event of its
assignment. The terms "interested persons", "assignment" and "vote of
a majority of the outstanding voting securities" shall have the same
meaning as those terms are defined in the Investment Company Act of
1940.
IN WITNESS WHEREOF, the Trust has caused this Agreement to be
executed by its duly authorized officers and its corporate
7
<PAGE>
seal to be affixed thereto, and the Distributor has caused this
Agreement to be executed by one of its partners all on the day and
year first above written.
LORD ABBETT EQUITY FUND
By: /s/ Ronald P. Lynch
Chairman of the Board
Attest:
/s/ Thomas F. Konop
Assistant Secretary
LORD, ABBETT & CO.
By: /s/ Kenneth B. Cutler
A Partner
8
EXHIBIT 11
CONSENT OF INDEPENDENT AUDITORS
Lord Abbett Equity Fund:
We consent to the incorporation by reference in Post-Effective Amendment No. 8
to Registration Statement No. 811-6033 of our report dated July 7, 1995
appearing in the annual report to shareholders and to the reference to us under
the captions "Financial Statements" in the Statement of Additional Information,
which are part of such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
New York, New York
September 14, 1995
Rule 12b-1 Distribution Plan and Agreement
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of the 24th day of
April, 1990 by and between LORD ABBETT EQUITY FUND, a Massachusetts business
trust (the "Company"), and LORD, ABBETT & CO., a New York partnership (the
"Distributor"), as amended June 12, 1991.
WHEREAS, the Company is an open-end management investment company and
is registered as such under the Investment Company Act of 1940, as amended (the
"Act"); and the Distributor acts as the Company's distributor pursuant to the
Distribution Agreement between the Company and the Distributor, dated the 24th
day of April, 1990.
WHEREAS, the Company desires to adopt a Distribution Plan and Agreement
(the "Plan") with the Distributor, as permitted by Rule 12b-1 under the Act,
pursuant to which the Company may make certain payments to the Distributor for
payment to broker-dealers with respect to the distribution of shares of the
Company.
WHEREAS, the Company's Trustees have determined that there is a
reasonable likelihood that the Plan will benefit the Company and its
shareholders.
NOW, THEREFORE, in consideration of the mutual covenants and of other
good and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Company hereby authorizes the Distributor to enter into
distributor's agreements (the "Distributor's Agreements") with independent
broker-dealers appointed by the Distributor providing for the payment to such
broker-dealers of distribution fees which the Distributor receives from the
Company in order to provide additional incentives to the broker-dealers (i) to
sell shares of the Company, (ii) to provide continuing information and
investment services to their shareholder accounts and (iii) to assist the
Company in soliciting proxies for shareholder meetings and otherwise to
encourage their accounts to remain invested in the Company.
2. The Company shall pay to the Distributor pursuant to this Plan
distribution fees at an annual rate not to exceed the sum of .25 of 1% of the
average daily net asset value of the shares of the Company in each account
covered by the Distributor's Agreement. Such fees shall be calculated and paid
quarterly, subject to change by the Trustees of the Company in the manner
contemplated in paragraph 8 of this Plan.
3. The value of the net assets of the Company shall be
determined as provided in its Declaration of Trust. If the
<PAGE>
Distributor waives all or a portion of fees which are to be paid by the Company
hereunder, the Distributor shall not be deemed to have waived its rights under
this Agreement to have the Company pay such fees in the future.
4. The Secretary of the Company, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Company hereunder and shall provide to the Company's Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
5. Neither this Plan nor any other transaction between the parties
hereto pursuant to this Plan shall be invalidated or in any way affected by the
fact that any or all of the Trustees, officers, stockholders, or other
representatives of the Company are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, or other representatives of the Distributor are
or may be "interested persons" of the Company, except as otherwise may be
provided in the Act.
6. The Distributor shall give the Company the benefit of the
Distributor's best judgment and good faith efforts in rendering services under
this Plan. Other than to abide by the provisions hereof and render the services
called for hereunder in good faith, the Distributor assumes no responsibility
under this Plan and, having so acted, the Distributor shall not be held liable
or held accountable for any mistake of law or fact, or for any loss or damage
arising or resulting therefrom suffered by the Company or any of the
stockholders, creditors, trustees, or officers of the Company; provided however,
that nothing herein shall be deemed to protect the Distributor against any
liability to the Company or its stockholders by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties hereunder, or by
reason of the reckless disregard of its obligation and duties hereunder.
7. This Plan shall be effective upon the date hereof, and shall
continue in effect for a period of more than one year from the date hereof only
so long as such continuance is specifically approved at least annually by a vote
of the Trustees of the Company, including the vote of a majority of the trustees
who are not "interested persons" of the Company and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to the Plan, cast in person at a meeting called for the purpose of
voting on such renewal.
8. This Plan may not be amended to increase materially the
amount to be spent by the Company hereunder without the vote of a
majority of its outstanding voting securities and each material
2
<PAGE>
amendment must be approved by a vote of the Trustees of the Company, including
the vote of a majority of the directors who are not "interested persons" of the
Company and who have no direct or indirect financial interest in the operation
of this Plan or in any agreement related to the Plan, cast in person at a
meeting called for the purpose of voting on such amendment.
9. Amendments to this Plan other than material amendments of the kind
referred to in the forgoing paragraph 8 may be adopted by a vote of the Trustees
of the Company, including the vote of a majority of the directors who are not
"interested persons" of the Company and who have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to this Plan.
The Trustees of the Company may, by such a vote, interpret this Plan and make
all determinations necessary or advisable for its administration.
10. This Plan may be terminated at any time without the payment of any
penalty by (a) the vote of a majority of the trustees of the Company who are not
"interested persons" of the Company and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by vote of a majority of the outstanding voting securities of the
Company. This Plan shall automatically terminate in the event of its assignment.
The terms "interested persons", "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meaning as those terms are
defined in the Act.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and on its behalf by its duly authorized representative
as of the date first above written.
LORD ABBETT EQUITY FUND
By: /s/ Ronald P. Lynch
Chairman of the Board
ATTEST:
/s/ Thomas F. Konop
Assistant Secretary
LORD, ABBETT & CO.
By: /s/ Kenneth B. Cutler
Partner
3
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<CIK> 0000859903
<NAME> LORD ABBETT EQUITY FUND, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> MAY-01-1994
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 44584361
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<APPREC-INCREASE-CURRENT> 3518242
<NET-CHANGE-FROM-OPS> 8139316
<EQUALIZATION> (71747)
<DISTRIBUTIONS-OF-INCOME> 1195266
<DISTRIBUTIONS-OF-GAINS> 4394361
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 438620
<SHARES-REINVESTED> 436349
<NET-CHANGE-IN-ASSETS> 1702809
<ACCUMULATED-NII-PRIOR> 163072
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