1933 Act File No. 33-47641
1940 Act File No. 811-6650
SECURITIES & EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 4 [X]
And
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]
OF 1940
AMENDMENT No. 4 [X]
LORD ABBETT RESEARCH FUND, INC.
-------------------------------
Exact Name of Registrant as Specified in Charter
767 Fifth Avenue, New York, N.Y. 10153
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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)
immediately on filing pursuant to paragraph (b) of Rule 485
----
X on April 1, 1995 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) and a Rule 24f-2 Notice for
Registrant's most recent fiscal year was filed with the Commission on or about
January 23, 1995.
<PAGE>
LORD ABBETT RESEARCH FUND, INC.
FORM N-1A
Cross Reference Sheet
Post-Effective Amendment No. 4
Pursuant to Rule 481(a)
Form N-1A Location In Prospectus or
Item No. Statement of Additional Information
-------- -----------------------------------
1 Cover Page
2 Fee Table
3 (a) Financial Highlights; Performance
3 (b) N/A
4 (a) (i) Cover Page
4 (a) (ii) Investment Objective; How We Invest
4 (b) (c) How We Invest
5 (a) (b) (c) Our Management; Back Cover Page
5 (d) N/A
5 (e) Back Cover Page
5 (f) Our Management
5 (g) N/A
5 A Performance
6 (a) Cover Page
6 (b) (c) (d) N/A
6 (e) Cover Page
6 (f) (g) Dividends, Capital Gains
Distributions and Taxes
7 (a) Back Cover Page
7 (b) (c) (d)
(e) (f) Purchases
8 (a) (b) (c)
(d) Redemptions
9 N/A
10 Cover Page
11 Cover Page - Table of Contents
12 N/A
13 (a) (b) (c)
(d) Investment Objective and Policies
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) Purchases, Redemptions
and Shareholder Services
16 (h) Investment Advisory and Other Services
16 (i) N/A
17 (a) Portfolio Transactions
<PAGE>
Form N-1A Location In Prospectus or
Item No. Statement of Additional Information
-------- -----------------------------------
17 (b) N/A
17 (c) Portfolio Transactions
17 (d) Portfolio Transactions
17 (e) N/A
18 (a) Cover Page
18 (b) N/A
19 (a) (b) Purchases, Redemptions
and Shareholder Services; Notes
to Financial Statements
19 (c) N/A
20 Taxes
21 (a) Purchases, Redemptions
and Shareholder Services
21 (b) (c) N/A
22 (a) N/A
22 (b) Past Performance
23 Financial Statements; Supplementary
Financial Information
<PAGE>
LORD ABBETT RESEARCH FUND, INC.
THE GENERAL MOTORS BUILDING
767 FIFTH AVENUE
NEW YORK, NY 10153-0203
800-426-1130
--------------------------------------------------------------------------------
LORD ABBETT RESEARCH FUND, INC. (WE OR THE FUND) IS A DIVERSIFIED, OPEN-END
MANAGEMENT INVESTMENT COMPANY INCORPORATED IN MARYLAND ON APRIL 6, 1992. THE
FUND CURRENTLY CONSISTS OF ONE SERIES-SERIES 1.
THE FUND'S INVESTMENT OBJECTIVE IS GROWTH OF CAPITAL AND GROWTH OF INCOME
CONSISTENT WITH REASONABLE RISK. PRODUCTION OF CURRENT INCOME IS A SECONDARY
CONSIDERATION. THE FUND SEEKS TO ATTAIN ITS OBJECTIVE BY INVESTING IN A BROAD
RANGE OF COMMON STOCKS (INCLUDING SECURITIES CONVERTIBLE INTO COMMON STOCKS)
WHICH IT BELIEVES ARE SELLING AT ATTRACTIVE PRICES IN RELATION TO VALUE AND
THEREFORE REPRESENT FUNDAMENTAL INVESTMENT VALUE. THIS OBJECTIVE MAY NOT BE
CHANGED WITHOUT SHAREHOLDER APPROVAL. THERE CAN BE NO ASSURANCE THAT THE FUND
WILL ACHIEVE ITS OBJECTIVE.
THE DIRECTORS MAY PROVIDE FOR ADDITIONAL SERIES FROM TIME TO TIME. WITHIN
EACH SERIES, THE FREELY TRANSFERABLE SHARES WILL HAVE EQUAL RIGHTS WITH RESPECT
TO DIVIDENDS, ASSETS, LIQUIDATION AND VOTING.
THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION ABOUT THE FUND THAT A
PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING. ADDITIONAL INFORMATION ABOUT
THE FUND HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS
AVAILABLE UPON REQUEST WITHOUT CHARGE. THE STATEMENT OF ADDITIONAL INFORMATION
IS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS AND MAY BE OBTAINED, WITHOUT
CHARGE, BY WRITING DIRECTLY TO THE FUND OR BY CALLING 800-874-3733. ASK FOR PART
B OF THE PROSPECTUS THE STATEMENT OF ADDITIONAL INFORMATION.
THE DATE OF THIS PROSPECTUS, AND THE DATE OF THE STATEMENT OF ADDITIONAL
INFORMATION, IS APRIL 1, 1995.
PROSPECTUS
INVESTORS SHOULD READ AND RETAIN THIS PROSPECTUS. SHAREHOLDER INQUIRIES SHOULD
BE MADE IN WRITING DIRECTLY TO THE FUND OR BY CALLING 800-821-5129. YOU CAN ALSO
MAKE INQUIRIES THROUGH YOUR BROKER-DEALER.
CONTENTS PAGE
1 Investment Objectives 2
2 Fee Table 2
3 Financial Highlights 2
4 How We Invest 3
5 Purchases 4
6 Our Management 4
7 Dividends, Capital Gains
Distributions and Taxes 4
8 Redemptions 5
9 Performance 5
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS FUND IS SOLD ONLY IN NEW YORK.
<PAGE>
1 INVESTMENT OBJECTIVES
---------------------
The investment objective of Lord Abbett Research Fund, Inc. is growth of capital
and growth of income consistent with reasonable risk. Production of current
income is a secondary consideration.
2 FEE TABLE
---------
A summary of the Funds expenses is set forth in the table below. The example
should not be considered a representation of past or future expenses. Actual
expenses may be more or less than those shown.
<TABLE>
<CAPTION>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
Maximum Sales Load(1) on Purchases
(See Purchases) None
Redemption Fee (See Purchases) None
-----------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (See Our Management) .00%(2)
12b-1 Fees (See Purchases) None
Other Expenses (See Our Management) .00%(2)
-----------------------------------------------------------
Total Operating Expenses .00%(2)
Example: Assume an annual return of 5% and there is no change in the level of
-------
expenses described in the Fee Table. For every $1,000 invested, with
reinvestment of all distributions, you would pay the following total expenses if
you closed your account after the number of years indicated.
1 year(3) 3 years(3) 5 years(3) 10 years(3)
------ ------- ------- --------
$0 $0 $0 $0
<FN>
<F1>
(1)Sales load is referred to as sales charge throughout this Prospectus.
<F2>
(2)Although not obligated to, Lord, Abbett & Co. waived its management fee and
subsidized the operating expenses of the Fund and continues to do so. This fee
would have been .75% and total operating expenses are estimated to be 1.15% for
the fiscal year absent such waiver and subsidy.
<F3>
(3)These figures reflect a management fee waiver and expense subsidy from Lord,
Abbett & Co. These expenses without such waiver and subsidy are estimated to be
$12, $37, $63, and $140, respectively.
The foregoing is provided to give investors a better understanding of the
expenses that are incurred by an investment in the Fund.
</FN>
</TABLE>
3 FINANCIAL HIGHLIGHTS
--------------------
The following table has been audited by Deloitte & Touche LLP, independent
accountants, in connection with their annual audit of the Funds Financial
Statements, whose report thereon is incorporated by reference in the Statement
of Additional Information and may be obtained upon request, and has been
included herein in reliance upon their authority as experts in auditing and
accounting.
<TABLE>
<CAPTION>
For the Period June 3, 1992
PER SHARE OPERATING Year Ended November 30, (Commencement of Operations)
-----------------------
PERFORMANCE: 1994 1993 to November 30, 1992
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.33 $10.61 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .34 .29 .12
Net realized and unrealized
gain on investments .65 1.57 .49
TOTAL FROM INVESTMENT OPERATIONS .99 1.86 .61
-----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from net investment income (.20) (.14) -
Net realized gain from security transactions (.33)
NET ASSET VALUE, END OF PERIOD $12.79 $12.33 $10.61
---------------------------------------------------------------- -------------------------------------------------
TOTAL RETURN 8.21% 17.72% 6.10%**
-----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (000) $5,558 $4,086 $2,372
Ratios to Average Net Assets:
Expenses, including waiver .00% .00% .00%
Expenses, excluding waiver 1.15% 1.20% .79%**
Net investment income 2.65% 2.44% 1.39%**
Portfolio turnover rate 43.85% 74.16% 20.70%
<FN>
Net of management fee waiver.
**Not annualized.
</FN>
</TABLE>
<PAGE>
4 HOW WE INVEST
--------------
We invest in common stocks (including securities convertible into common stocks
such as investment-grade convertible bonds or convertible-preferred stocks) of
companies with good prospects for improvement in earnings trends or asset
values. We will invest in companies on the basis of the fundamental economic and
business factors (such as government, fiscal and monetary policies, employment
levels, demographics, retail sales and market share) which will affect future
earnings and which we believe are the primary factors determining the future
market valuation of stocks. Although the prices of common stocks fluctuate and
their dividends vary, historically, common stocks have appreciated in value and
their dividends have increased when the companies they represent have prospered
and grown. There can be no assurance that stocks selected for our portfolio will
appreciate in value or that their dividends will increase or be maintained.
In selecting securities for investment, we give more weight to the
possibilities of capital growth and growth of income than to current income. In
seeking to fulfill our objective, we will invest primarily in both large and
middle-sized companies, as measured by the value of their outstanding stock.
By concentrating our research and stock selection on companies that are
undervalued or out of current investment favor, our investment portfolio
typically will encompass less market risk as measured by its
price-to-normal-earnings and price-to-book-value ratios. Our management process
results in the sale of stocks that we judge to be overpriced and reinvestment in
other securities which we believe offer better values and less market risk.
Our investment portfolio will be diversified among many issuers
representing many different industries. The portfolio reflects the collective
judgment of the Research Department of Lord, Abbett & Co. (Lord Abbett) as to
what securities represent the greatest investment value, regardless of industry
sector, market capitalization, or Wall Street sponsorship. At the time of
purchase, securities selected for our portfolio may be largely neglected by the
investment community or, if widely followed, they may be out of favor or at
least controversial.
Up to 10% of our net assets (at the time of investment) may be invested in
foreign securities.
In an attempt to increase our income and to provide greater flexibility in
the disposition of our portfolio securities, we may write covered call options
which are traded on a national securities exchange with respect to securities in
our portfolio with an aggregate market value of up to 5% of our gross assets at
the time an option is written.
We may engage in (a) investing in closed-end investment companies, (b)
lending of our portfolio securities to broker-dealers on a secured basis and (c)
investing in rights and warrants to purchase securities (included within these
purchases but not exceeding 2% of the value of the Funds assets, may be warrants
which are not listed on the New York or American Stock Exchanges), but we have
no present intention to commit more than 5% of gross assets to any one of these
three identified practices.
We will not borrow money, except as a temporary measure for extraordinary
or emergency purposes and then not in excess of 5% of our gross assets at the
lower of cost or market value.
Neither an issuers ceasing to be rated investment grade nor a rating
reduction below that grade will require elimination of a bond from the Funds
portfolio. For temporary defensive purposes, we may invest in high-quality
short-term debt obligations of banks, corporations or the U.S. Government of the
type normally owned by a money market fund.
RISK FACTORS. If the Fund remains small, there is risk that redemptions may (a)
cause portfolio securities to be sold prematurely (at a loss or gain, depending
upon the circumstances) or (b) hamper or prevent a contemplated portfolio
security purchase. Securities markets of foreign countries in which we may
invest (up to 10% of our net assets) generally are not subject to the same
degree of regulation as the U.S. markets and may be more volatile and less
liquid than the major U.S. markets. There may be less publicly-available
information on publicly-traded companies, banks and governments in foreign
countries than generally is the case for such entities in the United States. The
lack of uniform accounting standards and practices among countries impairs the
validity of direct comparisons of valuation measures (such as price/earnings
ratios) for securities in different countries. Other considerations include
political and social instability, expropriation, higher transaction costs,
currency fluctuations, withholding taxes that cannot be passed through as a tax
credit or reduction to shareholders and different securities settlement
practices. Foreign securities may be traded on days that we do not value our
portfolio securities, and, accordingly, our net asset value may be significantly
affected on days when shareholders do not have access to the Fund.
We also may invest in stocks of companies with small market capitalization
guided by the policies mentioned above. Stock prices of such companies may be
more volatile than those of large and middle-sized companies.
Convertible bonds and convertible-preferred stocks tend to be more volatile
than straight bonds but less volatile and more income producing than their
underlying common stocks.
<PAGE>
5 PURCHASES
---------
Our shares may only be purchased by employees and partners of Lord Abbett,
directors (trustees) of Lord Abbett-managed funds, and spouses and other family
members of such employees, partners and directors (trustees). All shares may be
purchased at the net asset value per share next computed after the order is
received by Lord Abbett. The minimum initial investment is $1,000. Subsequent
investments may be made in any amount. Place your order with Lord Abbett or send
it to Lord Abbett Research Fund, Inc. (P.O. Box 419100, Kansas City, Missouri
64141).
The net asset value of our shares is calculated every business day as of
the close of the New York Stock Exchange (NYSE), by dividing net assets by the
number of shares outstanding. Securities are valued at their market value as
more fully described in the Statement of Additional Information. A business day
is a day on which the NYSE is open for trading. We are not obligated to maintain
this offering or its terms and this offering may be suspended, changed or
withdrawn. Lord Abbett reserves the right to reject any order. Certificates
representing shares of the Fund will not be issued. This will relieve
shareholders of the responsibility and inconvenience of safekeeping share
certificates and save the Fund unnecessary expense. If you have any questions,
call the Fund at 800-821-5129.
TELEPHONE EXCHANGE PRIVILEGE: Shares may be exchanged, without a service
charge, for those of any other Lord Abbett-sponsored fund except for (i) Lord
Abbett Equity Fund, Lord Abbett Series Fund and Lord Abbett Counsel Group and
(ii) certain tax-free single-state series where the exchanging shareholder is a
resident of a state in which such series is not offered for sale (together,
"ELIGIBLE FUNDS").
You or YOUR REPRESENTATIVE WITH PROPER IDENTIFICATION can instruct the Fund
to exchange shares by telephone. Shareholders have this privilege unless they
refuse it in writing. The Fund will not be liable for following instructions
communicated by telephone that it reasonably believes to be genuine and will
employ reasonable procedures to confirm that instructions received are genuine,
including requesting proper identification, and recording all telephone
exchanges. Instructions must be received by the Fund in Kansas City
(800-521-5315) prior to the close of the NYSE to obtain each funds net asset
value per share on that day. Expedited exchanges by telephone may be difficult
to implement in times of drastic economic or market change. The exchange
privilege should not be used to take advantage of short-term swings in the
market. The Fund reserves the right to terminate or limit the privilege of any
shareholder who makes frequent exchanges. The Fund can revoke the privilege for
all shareholders upon 60 days prior written notice. A prospectus for the other
Lord Abbett-sponsored fund selected by you should be obtained and read before an
exchange. Exercise of the Exchange Privilege will be treated as a sale for
federal income tax purposes and, depending on the circumstances, a capital gain
or loss may be recognized.
6 OUR MANAGEMENT
--------------
Our business is managed by our officers on a day-to-day basis under the overall
direction of our Board of Directors. We employ Lord Abbett as investment manager
pursuant to a Management Agreement. Lord Abbett has been an investment manager
for over 60 years and currently manages approximately $16 billion in a family of
mutual funds and other advisory accounts. Under the Management Agreement, Lord
Abbett provides the Fund with investment management services and executive and
other personnel, pays the remuneration of our officers and of our directors
affiliated with Lord Abbett, provides us with office space and pays for ordinary
and necessary office and clerical expenses relating to research, statistical
work and supervision of our portfolio and certain other costs. Lord Abbett
provides similar services to fifteen other Lord Abbett-sponsored funds having
various investment objectives and also advises other investment clients. E.
Wayne Nordberg, Lord Abbett partner for over five years, is primarily
responsible for the day-to-day management of the Fund and has been since
inception. Mr. Nordberg delegates management duties to a committee consisting,
at any time, of three Lord Abbett employees from the Research Department. The
members of the committee, who also may be officers of the Fund, have staggered
terms to assure continuity and a forum for different judgments as to what
securities represent the greatest investment value, regardless of industry
sector, market capitalization or Wall Street sponsorship.
We are obligated to pay Lord Abbett a monthly fee based on average daily
net assets for each month at the annual rate of .75%. This fee is higher than
that paid by most mutual funds. For the fiscal year ended November 30, 1994,
Lord Abbett waived $33,861 of its management fee and assumed $18,000 of
expenses. Due to such waiver, the effective fee paid to Lord Abbett as a
percentage of average daily net assets was at the annual rate of zero percent
for such period. In addition, we pay all expenses not expressly assumed by Lord
Abbett. Our ratio of expenses, including management fee expenses, to average net
assets for such fiscal year was zero percent. This expense ratio would have been
1.15% had Lord Abbett not waived its management fee and paid all other expenses
of the Fund.
7 DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
------------------------------------------------
Dividends from taxable net investment income may be taken in cash or reinvested
in additional shares at net asset value (without a sales charge) and will be
paid to shareholders semi-annually in December and June.
A long-term capital gains distribution is made when we have net profits
<PAGE>
during the year from sales of securities which we have held more than one year.
If we realize net short-term capital gains, they also will be distributed. Any
capital gains distribution will be made in December and may be taken in cash or
reinvested in more shares at net asset value without a sales charge.
Supplemental dividends and distributions also may be paid in December.
Dividends and distributions declared in October, November or December of any
year to shareholders of record as of a date in such a month will be treated for
federal income tax purposes as having been received by shareholders in that year
if they are paid before February 1 of the following year.
We intend to continue to meet the requirements of Subchapter M of the
Internal Revenue Code. We try to distribute to shareholders all our net
investment income and net realized capital gains, so as to avoid the necessity
of the Fund paying federal income tax. Shareholders, however, must report
dividends and capital gains distributions as taxable income. Distributions
derived from net long-term capital gains which are designated by the Fund as
capital gains dividends will be taxable to shareholders as long-term capital
gains, whether received in cash or shares, regardless of how long a taxpayer has
held the shares. Under current law, net long-term capital gains of individuals
and corporations are taxed at the rates applicable to ordinary income, except
that the maximum rate for long-term capital gains for individuals is 28%.
You may be subject to a $50 penalty under the Internal Revenue Code and we
may be required to withhold and remit to the U.S. Treasury a portion (31%) of
any redemption or repurchase proceeds and of any dividend or distribution on any
account, where the payee (shareholder) failed to provide a correct taxpayer
identification number or to make certain required certifications.
We will inform shareholders of the federal tax status of each dividend and
distribution shortly after the end of each calendar year.
You should consult your tax adviser concerning applicable state and local
taxes as well as on the tax consequences of gains or losses from the redemption
or exchange of our shares.
8 REDEMPTION
----------
To obtain the proceeds of an expedited redemption of $50,000 or less, you or
your representative with proper identification can telephone the Fund. The Fund
will not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine and will employ reasonable procedures to
confirm that instructions received are genuine, including requesting proper
identification, recording all telephone redemptions and mailing the proceeds
only to the named shareholder at the address appearing on the account
registration.
If you do not qualify for the expedited redemption procedures described
above to redeem shares directly, send your request to Lord Abbett Research Fund,
Inc. (P.O. Box 419100, Kansas City, Missouri 64141) with signature(s) and any
legal capacity of the signer(s) guaranteed by an eligible guarantor.
Under certain circumstances and subject to prior written notice, our Board
of Directors may authorize redemption of all of the shares in any account in
which there are fewer than 25 shares.
9 PERFORMANCE
-----------
We calculate our average annual total return for a given period by determining
an annual compounded rate that would cause the hypothetical initial investment
made on the first day of the period to equal the ending redeemable value. The
calculation assumes for the period a $1,000 hypothetical initial investment, the
reinvestment of all income and capital gains distributions on the reinvestment
dates at the prices calculated as stated in the Prospectus, and a complete
redemption at the end of the period to determine the ending redeemable value.
Further information about Fund performance is in the Annual Report, which may be
obtained without charge.
<PAGE>
INVESTMENT MANAGER
Lord, Abbett & Co.
The General Motors Building
767 Fifth Avenue
New York, New York 10153-0203
212-848-1800
CUSTODIAN
Morgan Guaranty Trust Company of New York
60 Wall Street, New York, New York 10005
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
United Missouri Bank of Kansas City, N.A.
Tenth and Grand
Kansas City, Missouri 64141
SHAREHOLDER SERVICING AGENT
DST Systems, Inc.
P.O. Box 419100
Kansas City, Missouri 64141
800-821-5129
AUDITORS
Deloitte & Touche LLP
<PAGE>
LORD ABBETT
Statement of Additional Information April 1, 1995
Lord Abbett
Research Fund, Inc.
-------------------------------------------------------------------------------
This Statement of Additional Information is not a Prospectus. A Prospectus
may be obtained from your securities dealer or from Lord, Abbett & Co. ("Lord
Abbett") at The General Motors Building, 767 Fifth Avenue, New York, New York
10153-0203. This Statement relates to, and should be read in conjunction with,
the Prospectus dated April 1, 1995.
Lord Abbett Research Fund, Inc. (sometimes referred to as "we" or the "Fund")
was incorporated under Maryland law on April 6, 1992. Our authorized capital
stock consists of a single class of 50,000,000 shares, $.001 par value. All
shares have equal noncumulative voting rights and equal rights with respect to
dividends, assets and liquidation. They are fully paid and nonassessable when
issued and have no preemptive or conversion rights.
Shareholder inquiries should be made by writing directly to the Fund or by
calling 800-821-5129. In addition, you can make inquiries through Lord Abbett.
TABLE OF CONTENTS PAGE
1. Investment Objective and Policies 2
2. Directors and Officers 3
3. Investment Advisory and Other Services 4
4. Portfolio Transactions 5
5. Purchases, Redemptions and Shareholder Services 6
6. Past Performance 7
7. Taxes 7
8. Information About The Fund 8
9. Financial Statements 8
<PAGE>
1.
Investment Objectives and Policies
The Fund's investment objectives and policies are described in the Prospectus on
the cover page and under "How We Invest," respectively. In addition to those
policies described in the Prospectus, we are subject to the following investment
restrictions which cannot be changed without approval of a majority of our
outstanding shares. We may not: (1) sell short securities or buy securities or
evidences of interests therein on margin, although we may obtain short-term
credit necessary for the clearance of purchases of securities; (2) buy or sell
put or call options, although we may buy, hold or sell rights or warrants and we
may write covered call options and enter into closing purchase transactions as
discussed below; (3) issue senior securities or borrow money except as a
temporary measure for extraordinary or emergency purposes, and then not in
excess of 5% of our gross assets (at cost or market value, whichever is lower)
at the time of borrowing; (4) invest knowingly in securities or other assets not
readily marketable at the time of purchase; (5) act as underwriter of securities
issued by others, unless we are deemed to be one in selling a portfolio security
requiring registration under the Securities Act of 1933; (6) lend money or
securities to any person except through lending our portfolio securities to
registered broker-dealers where the loan is 100% secured by cash or its
equivalent as long as we comply with regulatory requirements; (7) pledge,
mortgage or hypothecate our assets -- however, this provision does not apply to
the grant of escrow receipts or the entry into other similar escrow arrangements
arising out of the writing of covered call options; (8) buy or sell real estate
including limited partnership interests therein (except securities of companies,
such as real estate investment trusts, that deal in real estate or interests
therein, although we have no current intent to invest in such securities), or
oil, gas or other mineral leases, commodities or commodity contracts in the
ordinary course of our business, except such interests and other property
acquired as a result of owning other securities, though securities will not be
purchased in order to acquire any of these interests; (9) buy securities issued
by any other open-end investment company except pursuant to a merger,
acquisition or consolidation, although we may invest up to 5% of our gross
assets at market value at the time of purchase in closed-end investment
companies if bought in the open market with a fee or commission no greater than
the customary broker's commission; (10) invest more than 5% of our gross assets,
taken at market value at the time of investment, in companies (including their
predecessors) with less than three years' continuous operation; (11) with regard
to 75% of our gross assets, buy securities if the purchase would then cause us
to have more than 5% of our gross assets, at market value at the time of
purchase, invested in securities of any one issuer, except securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities; (12) buy
voting securities if the purchase would then cause us to own more than 10% of
the outstanding voting stock of any one issuer; (13) own securities in a company
when any of its officers, directors or security holders is an officer or
director of the Fund or an officer, director or partner of our investment
manager if, after the purchase, any of such persons owns beneficially more than
1/2 of 1% of such securities and such persons together own more than 5% of such
securities; (14) concentrate our investments in any particular industry, but if
deemed appropriate for attainment of our investment objectives, up to 25% of our
gross assets (at market value at the time of investment) may be invested in any
one industry classification we use for investment purposes or (15) buy
securities from, or sell them to, our officers, directors, or employees, or to
our investment manager or to its partners and employees, other than capital
stock of the Fund.
For the year ended November 30, 1994, the portfolio turnover rate was 43.85%
versus 74.16% for the prior year.
Lending of Portfolio Securities
-------------------------------
Although we have no current intention of doing so in the foreseeable future, we
may seek to earn income by lending portfolio securities. Under present
regulatory policies, such loans may be made to member firms of the New York
Stock Exchange ("NYSE") and are required to be secured continuously by
collateral consisting of cash, cash equivalents, or United States Treasury bills
maintained in an amount at least equal to the market value of the securities
loaned. We will have the right to call a loan and obtain the securities loaned
at any time upon five days' notice. During the existence of a loan we will
receive the income earned on investment of collateral. The aggregate value of
the securities loaned will not exceed 5% of the value of the Series' gross
assets.
<PAGE>
Other Investment Restrictions(which can be changed without shareholder approval)
--------------------------------------------------------------------------------
Covered Call Options
--------------------
As stated in the Prospectus, we may write covered call options on securities in
our portfolio in an attempt to increase our income and to provide greater
flexibility in the disposition of our portfolio securities. A "call option" is a
contract sold for a price (the "premium") giving its holder the right to buy a
specific number of shares of a stock at a specific price prior to a specified
date. A "covered call option" is a call option issued on securities already
owned by the writer of the call option for delivery to the holder upon the
exercise of the option. During the period of the option, we forgo the
opportunity to profit from any increase in the market price of the underlying
security above the exercise price of the option (to the extent that the increase
exceeds our net premium). We also may enter into "closing purchase transactions"
in order to terminate our obligation to deliver the underlying security (this
may result in a short-term gain or loss). A closing purchase transaction is the
purchase of a call option (at a cost which may be more or less than the premium
received for writing the original call option) on the same security with the
same exercise price and call period as the option previously written. If we are
unable to enter into a closing purchase transaction, we may be required to hold
a security that we otherwise might have sold to protect against depreciation. We
don't intend to write covered call options with respect to securities with an
aggregate market value of more than 5% of our gross assets at the time an option
is written. This percentage limitation will not be increased without prior
disclosure in our current prospectus.
Rights and Warrants
-------------------
We may invest in rights and warrants to purchase securities. Included within
that amount, but not to exceed 2% of the value of the Series' net assets, may be
warrants which are not listed on the NYSE or American Stock Exchange.
Rights represent a privilege offered to holders of record of issued securities
to subscribe (usually on a pro rata basis) for additional securities of the same
class, of a different class or of a different issuer, as the case may be.
Warrants represent the privilege to purchase securities at a stipulated price
and are usually valid for several years. Rights and warrants generally do not
entitle a holder to dividends or voting rights with respect to the underlying
securities nor do they represent any rights in the assets of the issuing
company.
Also, the value of a right or warrant may not necessarily change with the value
of the underlying securities and rights and warrants cease to have value if they
are not exercised prior to their expiration date.
Investment Companies
--------------------
As stated in investment restriction number (9) above, we may invest in
closed-end investment companies but have no present plans to do so. Such
investments may involve duplicate management fees and expenses.
2.
Directors and Officers
The following director is a partner of Lord, Abbett & Co., The General Motors
Building, 767 Fifth Avenue, New York, New York 10153-0203. He has been
associated with Lord Abbett for over five years and is also an officer and/or
director or trustee of fifteen other Lord Abbett-sponsored funds. He is an
"interested person" as defined in the Investment Company Act of 1940, as
amended.
Ronald P. Lynch, age 59, President and Chairman
The following outside directors are also directors or trustees of the fifteen
other Lord Abbett-sponsored funds referred to above.
<PAGE>
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
277 Park Avenue
New York, New York
President of Spencer Stuart & Associates, an executive search consulting firm.
Age 57.
No director and no officer of the Fund received compensation from the Fund for
acting in such capacity.
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, Nordberg and Walsh are partners of Lord Abbett; the
others are employees: Kenneth B. Cutler, age 62, Vice President and Secretary;
Stephen I. Allen, age 41, Daniel E. Carper age, 43, Robert S. Dow, age 50, E.
Wayne Nordberg, age 58, John J. Walsh, age 58, Jeffery H. Boyd, age 38 (with
Lord Abbett since 1994 - formerly partner in the law firm of Robinson & Cole),
John J. Gargana, Jr., age 63, Thomas F. Konop, age 52, Victor W. Pizzolato, age
62, Vice Presidents; and Keith F.
O'Connor, age 39, Treasurer.
The Fund's By-Laws provide that the Fund shall not hold an annual meeting of its
stockholders in any year unless one or more matters are required to be acted on
by stockholders under the Investment Company Act of 1940, as amended (the
"Act"), or unless called by a majority of the Board of Directors or by
stockholders holding at least one quarter of the stock of the Fund outstanding
and entitled to vote at the meeting. When any such annual meeting is held, the
stockholders will elect directors and vote on the approval of the independent
auditors of the Fund.
As of March 1, 1995 our officers and directors as a group owned less than 2% of
our outstanding shares.
3.
Investment Advisory and Other Services
As described under "Our Management" in the Prospectus, Lord Abbett is the
Fund's investment manager. The eight general partners of Lord Abbett, all of
whom are officers and/or directors of the Fund, are: Stephen I. Allen, Daniel E.
Carper, Kenneth B. Cutler, Robert S. Dow, Thomas S. Henderson, Ronald P. Lynch,
E. Wayne Nordberg and John J. Walsh. The address of each partner is The General
Motors Building, 767 Fifth Avenue, New York, New York 10153-0203.
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281 are
the independent auditors of the Fund and must be approved at least annually by
our Board of Directors to continue in such capacity. They perform audit services
for the Fund including the examination of financial statements included in our
annual report to shareholders.
Morgan Guaranty Trust Company of New York ("Morgan"), 60 Wall Street, New York,
New York, is the Fund's custodian. In accordance with the requirements of Rule
17f-5, the Fund's directors have approved arrangements permitting the Fund's
foreign assets not held by Morgan or its foreign branches to be held by certain
qualified foreign banks and depositories.
<PAGE>
4.
Portfolio Transactions
Our policy is to have purchases and sales of portfolio securities executed at
the most favorable prices, considering all costs of the transaction including
brokerage commissions and dealer markups and markdowns, consistent with
obtaining best execution, except to the extent that we may pay a higher
commission as described below. This policy governs the selection of brokers or
dealers and the market in which the transaction is executed. To the extent
permitted by law, we may, if considered advantageous, make a purchase from or
sale to another Lord Abbett-sponsored fund without the intervention of any
broker-dealer.
We select broker-dealers on the basis of their professional capability and the
value and quality of their brokerage and research services. Normally, the
selection is made by our traders who are officers of the Fund and also are
employees of Lord Abbett. Our traders do the trading as well for other accounts
-- investment companies (of which they are also officers) and other investment
clients -- managed by Lord Abbett. They are responsible for the negotiation of
prices and commissions.
A broker may receive a commission for portfolio transactions exceeding the
amount another broker would have charged for the same transaction if our traders
determine that such amount of commission is reasonable in relation to the value
of the brokerage and research services performed by the executing broker viewed
in terms of either the particular transaction or its overall responsibilities
with respect to us and other accounts managed by Lord Abbett. Brokerage services
may include such factors as showing us trading opportunities including blocks,
willingness and ability to take positions in securities, knowledge of a
particular security or market, proven ability to handle a particular type of
trade, confidential treatment, promptness, reliability and quotation and pricing
services. Research may include the furnishing of analyses and reports concerning
issuers, industries, securities, economic factors and trends, portfolio strategy
and the performance of accounts. Such research may be used by Lord Abbett in
servicing all their accounts, and not all of such research will necessarily be
used by Lord Abbett in connection with their services to us; conversely,
research furnished in connection with brokerage on other accounts managed by
Lord Abbett may be used in connection with their services to us, and not all of
such research will necessarily be used by Lord Abbett in connection with their
services to such other accounts. We have been advised by Lord Abbett that,
although such research is often useful, no dollar value can be ascribed to it
nor can it be accurately ascribed or allocated to any account and it is not a
substitute for services provided by them to us; nor does it materially reduce or
otherwise affect the expenses incurred by Lord Abbett in the performance of such
services. We make no commitments regarding the allocation of brokerage business
to or among dealers.
If two or more broker-dealers are considered capable of offering the equivalent
likelihood of best execution, the broker-dealer who has sold our shares and/or
shares of other Lord Abbett-sponsored funds may be preferred.
If other clients of Lord Abbett buy or sell the same security at the same time
as we do, transactions will, to the extent practicable, be allocated among all
participating accounts in proportion to the amount of each order and will be
executed daily until filled so that each account shares the average price and
commission cost of each day.
If we tender portfolio securities pursuant to a cash tender offer, we will seek
to recapture any fees or commissions involved by designating Lord Abbett as our
agent so that the fees may be passed back to us. As other legally permissible
opportunities come to our attention for the direct or indirect recapture by us
of brokerage commissions or similar fees paid on portfolio transactions, our
directors will determine whether we should or should not seek such recapture.
During the fiscal years ended November 30, 1994, 1993 and 1992 we paid
$8,033, $14,055 and $5,292 in commissions to independent dealers, respectively.
<PAGE>
5.
Purchases, Redemptions
and Shareholder Services
Information concerning how we value our shares for the purchase and redemption
of our shares is contained in the Prospectus under "Purchases" and
"Redemptions", respectively.
As disclosed in the Prospectus, we calculate our net asset value as of the close
of the New York Stock Exchange ("NYSE") on each day is a day that the NYSE is
open for trading by dividing our total net assets by the number of shares
outstanding at the time of calculation. The NYSE is closed on Saturdays and
Sundays and the following holidays -- New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
The Fund values its portfolio securities at market value as of the close of the
NYSE. Market value will be determined as follows: securities listed or admitted
to trading privileges on the New York or American Stock Exchange or on the
NASDAQ National Market System are valued at the last sales price, or, if there
is no sale on that day, at the mean between the last bid and asked prices, or,
in the case of bonds, in the over-the-counter market if, in the judgment of the
Fund's officers, that market more accurately reflects the market value of the
bonds. Over-the-counter securities not traded on the NASDAQ National Market
System are valued at the mean between the last bid and asked prices. Securities
for which market quotations are not available are valued at fair market value
under procedures approved by the Board of Directors.
The maximum offering price of our shares on November 30, 1994 was computed as
follows (assuming no sales charge currently in effect):
Maximum offering price per share is equal to
the net asset value per share
(net assets divided by shares outstanding).......................... $12.79
The Fund currently acts as the distributor of its own shares pursuant to the
provisions of Section 10(d) of the Act. These provisions include the following:
no sales charge may be applied to Fund shares; no sales or promotion expenses
may be incurred by the Fund (expenses incurred in complying with laws regulating
the issue or sale of Fund shares shall not be deemed sales or promotion
expenses); the Fund may have only one investment adviser and its management fee
may not exceed 1% per annum of the Fund's net assets; all executive salaries and
executive expenses and office rent of the Fund must be paid by Lord Abbett; and
only one class of shares of the Fund may be outstanding. In the event the Fund
cannot comply with Section 10(d), it will enter into a distribution agreement
with Lord Abbett.
As stated in the Prospectus, our shares may be purchased at net asset value only
by directors (trustees) of the Lord Abbett-sponsored funds, partners and
employees of Lord Abbett, and spouses and other family members of such directors
(trustees), partners and employees.
The right to redeem and receive payment, as described in the Prospectus, may be
suspended if the NYSE is closed (except for weekends or customary holidays),
trading on the NYSE is restricted or the Securities and Exchange Commission
deems an emergency to exist.
Our Board of Directors may authorize redemption of all of the shares in any
account in which there are fewer than 25 shares. Before authorizing such
redemption, the Board must determine that it is in our economic best interest or
necessary to reduce disproportionately burdensome expenses in servicing
shareholder accounts. At least 60 days' prior written notice will be given
before any such redemption, during which time shareholders may avoid redemption
by bringing their accounts up to the minimum set by the Board.
<PAGE>
6.
Past Performance
The Fund computes the average annual compounded rate of total return during
specified periods that would equate the initial amount invested to the ending
redeemable value of such investment by adding one to the computed average annual
total return, raising the sum to a power equal to the number of years covered by
the computation and multiplying the result by one thousand dollars, which
represents a hypothetical initial investment. The calculation assumes deduction
of the maximum sales charge from the initial amount invested (in this case there
is no sales charge) and reinvestment of all income dividends and capital gains
distributions on the reinvestment dates at prices calculated as stated in the
Prospectus. The ending redeemable value is determined by assuming a complete
redemption at the end of the period(s) covered by the average annual total
return computation.
Using the method to compute average annual compounded total return described
above, for the one year ended, and the life-of-fund periods (from commencement
of operations on June 3, 1992 through) November 30, 1994 assuming a $1,000
investment at the beginning of the period, the average annual rate of total
return of the Fund amounted to 8.2% and 12.8% and the redeemable values were
$1,082 and $1,352, respectively.
These figures represent past performance, and an investor should be aware that
the investment return and principal value of a Fund investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. Therefore, there is no assurance that this performance will be
repeated in the future.
7.
Taxes
The value of any shares redeemed by the Fund or repurchased or otherwise sold
may be more or less than your tax basis in the shares at the time the
redemption, repurchase or sale is made. Any gain or loss generally will be
taxable for federal income tax purposes. Any loss realized on the sale,
redemption or repurchase of Fund shares which you have held for six months or
less will be treated for tax purposes as a long-term capital loss to the extent
of any capital gains distributions which you received with respect to such
shares. Losses on the sale of stock or securities are not deductible if, within
a period beginning 30 days before the date of the sale and ending 30 days after
the date of sale, the taxpayer acquires stock or securities that are
substantially identical.
The writing of call options and other investment techniques and practices which
the Fund may utilize, as described above under "Investment Objectives and
Policies," may create "straddles" for United States federal income tax purposes
and may affect the character and timing of the recognition of gains and losses
by the Fund. Such transactions may increase the amount of short-term capital
gain realized by the Fund, which is taxed as ordinary income when distributed to
shareholders. Limitations imposed by the Internal Revenue Code on regulated
investment companies may restrict the Fund's ability to engage in transactions
in options.
As described in the Prospectus under "How We Invest - Risk Factors," the Fund
may be subject to foreign withholding taxes which would reduce the yield on its
investments. Tax treaties between certain countries and the United States may
reduce or eliminate such taxes. It is expected that Fund shareholders who are
subject to United States federal income tax will not be entitled to claim a
federal income tax credit or deduction for foreign income taxes paid by the
Fund.
The Fund will be subject to a 4% non-deductible excise tax on certain amounts
not distributed (and not treated as having been distributed) on a timely basis
in accordance with a calendar-year distribution requirement. The Fund intends to
distribute to shareholders each year an amount adequate to avoid the imposition
of such excise tax. Dividends paid by the Fund will qualify for the
dividends-received deduction for corporations to the extent they are derived
from dividends paid by domestic corporations.
Gains and losses realized by the Fund on certain transactions, including sales
of foreign debt securities and certain transactions involving foreign currency,
will be treated as ordinary income or loss for federal income tax purposes to
<PAGE>
the extent, if any, that such gains or losses are attributable to changes in
exchange rates for foreign currencies. Accordingly, distributions taxable as
ordinary income will include the net amount, if any, of such foreign exchange
gains and will be reduced by the net amount, if any, of such foreign exchange
losses.
If the Fund purchases shares in certain foreign investment entities, called
"passive foreign investment companies," it may be subject to United States
federal income tax on a portion of any "excess distribution" or gain from the
disposition of such shares, even if such income is distributed as a taxable
dividend by the Fund to its shareholders. Additional charges in the nature of
interest may be imposed on either the Fund or its shareholders in respect of
deferred taxes arising from such distributions or gains.
If the Fund were to invest in a passive foreign investment company with respect
to which the Fund elected to make a "qualified electing fund" election, in lieu
of the foregoing requirements, the Fund might be required to include in income
each year a portion of the ordinary earnings and net capital gains of the
qualified electing fund, even if such amount were not distributed to the Fund.
8.
Information About the Fund
The directors, trustees and officers of Lord Abbett-sponsored mutual funds,
together with the partners and employees of Lord Abbett, are permitted to
purchase and sell securities for their personal investment accounts. In engaging
in personal securities transactions, however, such persons are subject to
requirements and restrictions contained in the Fund's Code of Ethics which
complies, in substance, with each of the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing. Among other things,
the Code requires that Lord Abbett partners and employees obtain advance
approval before buying or selling securities, submit confirmations and quarterly
transaction reports, and obtain approval before becoming a director of any
company; and it prohibits such persons from investing in a security 7 days
before or after any Lord Abbett-sponsored fund or Lord Abbett-managed account
considers a trade or trades in such security, prohibiting profiting on trades of
the same security within 60 days and trading on material and non-public
information. The Code imposes certain similar requirements and restrictions on
the independent directors and trustees of each Lord Abbett-sponsored mutual fund
to the extent contemplated by the recommendations of such Advisory Group.
9.
Financial Statements
The financial statements for the fiscal year ended November 30, 1994 and the
report of Deloitte & Touche LLP, independent auditors, on such financial
statements contained in the 1994 Annual Report to Shareholders of Lord Abbett
Research Fund, Inc. are incorporated herein by reference to such financial
statements and report in reliance upon the authority of Deloitte & Touche LLP as
experts in auditing and accounting.
<PAGE>
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements
Part A - Financial Highlights for the year ended
November 30, 1994 and for the period June 3, 1992
(commencement of operations) to November 30, 1993.
Part B - Statement of Net Assets at November 30, 1994.
Statement of Operations for the year ended November 30,
1994 and for the period June 3, 1992 (commencement of
operations) to November 30, 1993. Statement of Changes
in Net Assets for the year ended November 30, 1994 and
for the period June 3, 1992 (commencement of
operations) to November 30, 1993.
(b) Exhibits -
99.B1 Articles of Incorporation*
99.B2 By-Laws*
99.B5 Management Agreement between Registrant and
Lord, Abbett & Co.*
99.B7(a) Retirement Plan for Non-interested Person
Directors and Trustees of Lord Abbett
Funds.**
99.B7(b) Lord Abbett Prototype Retirements Plans***
(1) 401(k)
(2) IRA
(3) 403(b)
(4) Profit-Sharing, and
(5) Money Purchases
99.B8 Global Custody Agreement*
99.B9 Agreement between Registrant and
Transfer Agent*
99.B10 Opinion and Consent of Counsel*
99.B11 Consent of Deloitte & Touche LLP*
99.B13 Subscription Agreement*
99.B16 Computation of Performance.*
* Filed herewith.
** Incorporated by reference to Post-Effective
Amendment No. 7 to the Registration
Statement (on Form N1-A) of Lord Abbett
Equity Fund (File No. 811-6033).
*** Incorporated by reference to Post-Effective
Amendment No. 6 to the Registration
Statement (on Form N1-A) of Lord Abbett
Securities Trust (File No. 811-7538).
Item 25. Person Controlled by or Under Common Control with Registrant
------------------------------------------------------------
None.
Item 26. Number of Record Holders of Securities
--------------------------------------
As of March 10, 1995 - 152
Item 27. Indemnification
---------------
Registrant is incorporated under the laws of the State of
Maryland and is subject to Section 2-418 of the Corporations
and Associations Article of the Annotated Code of the State
of Maryland controlling the indemnification of directors and
officers. Since Registrant has its executive offices in the
State of New York, and is qualified as a foreign corporation
<PAGE>
doing business in such State, the persons covered by the
foregoing statute may also be entitled to and subject to the
limitations of the indemnification provisions of Section
721-727 of the New York Business Corporation Law.
The general effect of these statutes is to protect officers,
directors and employees of Registrant against legal liability
and expenses incurred by reason of their positions with the
Registrant. The statutes provide for indemnification for
liability for proceedings not brought on behalf of the
corporation and for those brought on behalf of the
corporation, and in each case place conditions under which
indemnification will be permitted, including requirements
that the officer, director or employee acted in good faith.
Under certain conditions, payment of expenses in advance of
final disposition may be permitted. The By-Laws of
Registrant, without limiting the authority of Registrant to
indemnify any of its officers, employees or agents to the
extent consistent with applicable law, makes the
indemnification of its directors mandatory subject only to
the conditions and limitations imposed by the above-mentioned
Section 2-418 of Maryland Law and by the provisions of
Section 17(h) of the Investment Company Act of 1940 as
interpreted and required to be implemented by SEC Release No.
IC-11330 of September 4, 1980.
In referring in its By-Laws to, and making indemnification of
directors subject to the conditions and limitations of, both
Section 2-418 of the Maryland Law and Section 17(h) of the
Investment Company Act of 1940, Registrant intends that
conditions and limitations on the extent of the
indemnification of directors imposed by the provisions of
either Section 2-418 or Section 17(h) shall apply and that
any inconsistency between the two will be resolved by
applying the provisions of said Section 17(h) if the
condition or limitation imposed by Section 17(h) is the more
stringent. In referring in its By-Laws to SEC Release No.
IC-11330 as the source for interpretation and implementation
of said Section 17(h), Registrant understands that it would
be required under its By-Laws to use reasonable and fair
means in determining whether indemnification of a director
should be made and undertakes to use either (1) a final
decision on the merits by a court or other body before whom
the proceeding was brought that the person to be indemnified
("indemnitee") was not liable to Registrant or to its
security holders by reason of willful malfeasance, bad faith,
gross negligence, or reckless disregard of the duties
involved in the conduct of his office ("disabling conduct")
or (2) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the
indemnitee was not liable by reason of such disabling
conduct, by (a) the vote of a majority of a quorum of
directors who are neither "interested persons" (as defined in
the 1940 Act) of Registrant nor parties to the proceeding, or
(b) an independent legal counsel in a written opinion. Also,
Registrant will make advances of attorneys' fees or other
expenses incurred by a director in his defense only if (in
addition to his undertaking to repay the advance if he is not
ultimately entitled to indemnification) (1) the indemnitee
provides a security for his undertaking, (2) Registrant shall
be insured against losses arising by reason of any lawful
advances, or (3) a majority of a quorum of the non-
interested, non-party directors of Registrant, or an
independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts, that
there is reason to believe that the indemnitee ultimately
will be found entitled to indemnification.
Insofar as indemnification for liability arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
<PAGE>
payment by the registrant of expense incurred or paid by a
director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of
such issue.
Item 28. Business and Other Connections of Investment Adviser
----------------------------------------------------
Lord, Abbett & Co. acts as investment advisor for seventeen,
other open-end investment companies (of which it is
principal underwriter for fifteen), and as investment
adviser to approximately 5,100 private accounts. Other than
acting as directors and/or officers of open-end investment
companies managed by Lord, Abbett & Co., none of Lord,
Abbett & Co.'s partners has, in the past two fiscal years,
engaged in any other business, profession, vocation or
employment of a substantial nature for his own account or in
the capacity of director, officer, employee, partner or
trustee of any entity except as follows:
John J. Walsh
Trustee
The Brooklyn Hospital Center
100 Parkside Avenue
Brooklyn, N.Y.
Item 29. Principal Underwriter
---------------------
(a) Affiliated Fund, Inc.
Lord Abbett U. S. Government Securities 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 California Tax-Free Income Fund, Inc.
Lord Abbett Fundamental Value Fund, Inc.
Lord Abbett Global Fund, Inc.
Lord Abbett U. S. Government Securities Money Market
Fund, Inc.
Lord Abbett Series Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Tax-Free Income Trust
Lord Abbett Securities Trust
Lord Abbett Investment Trust
Investment Advisor
------------------
American Skandia Trust (Lord Abbett Growth and Income
Portfolio)
America's Utility Fund, Inc.
(b) The partners of Lord, Abbett & Co. are:
Name and Principal Positions and Offices
Business Address (1) with Registrant
------------------- ---------------
Ronald P. Lynch President, Chairman
and Director
Thomas S. Henderson Vice President
Kenneth B. Cutler Vice President &
Secretary
Stephen I. Allen Vice President
Daniel E. Carper Vice President
Robert S. Dow Vice President
E. Wayne Nordberg Vice President
John J. Walsh Vice President
(1) Each of the above has a principal business address
767 Fifth Avenue, New York, NY 10153
(c) Not applicable
<PAGE>
Item 30. Location of Accounts and Records
--------------------------------
Registrant maintains the records, required by Rules 31a - 1(a)
and (b), and 31a - 2(a) at its main office.
Lord, Abbett & Co. maintains the records required by Rules
31a - 1(f) and 31a - 2(e) at its main office.
Certain records such as canceled stock certificates
and correspondence may be physically maintained at the main
office of the Registrant's Transfer Agent, Custodian,
or Shareholder Servicing Agent within the requirements of
Rule 31a-3.
Item 31. Management Services
-------------------
None
Item 32. Undertakings
------------
The Registrant undertakes to furnish each person to whom
a prospectus is delivered with a copy of the Registrant's
latest annual report to shareholders, upon request and without
charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant certifies that it meets all the requirements
for effectiveness of this Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Registration Statement
and/or any amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on the
30th day of March 1995.
LORD ABBETT RESEARCH FUND, INC.
By /S/ RONALD P. LYNCH
-------------------------------
Ronald P. Lynch, Chairman
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.
NAME TITLE DATE
----- ------ -----
Chairman,
/s/ Ronald P. Lynch President & Director March 30, 1995
---------------------------
/s/ John J. Gargana, Jr. Vice President & March 30, 1995
--------------------------- Chief Financial Officer
/s/ Hansel B. Millican, Jr. Director March 30, 1995
---------------------------
/s/ Thomas J. Neff Director March 30, 1995
---------------------------
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
NO.
------- -----------
99.B1 Articles of Incorporation
99.B2 By-Laws
99.B5 Management Agreement between Registrant and
Lord, Abbett & Co.
99.B8 Global Custody Agreement
99.B9 Agreement between Registrant and
Transfer Agent
99.B10 Opinion and Consent of Counsel
99.B11 Consent of Deloitte & Touche LLP
99.B13 Subscription Agreement
99.B16 Computation of Performance
27 Financial Data Schedule
EXHIBIT 99.B1
ARTICLES OF INCORPORATION
OF
LORD ABBETT RESEARCH FUND, INC.
This is to Certify:
Article I
I, the subscriber, Kenneth B. Cutler, whose post office
address is 767 Fifth Avenue, New York, New York 10153, being over eighteen years
of age, am acting as incorporator with the intention of forming a corporation
under and by virtue of the general laws of the State of Maryland authorizing the
formation of corporations.
Article II
The name of the corporation (hereinafter called the
"Corporation") is Lord Abbett Research Fund, Inc.
Article III
The post office address of the place at which the principal
office of the Corporation in the State of Maryland will be located is c/o The
Prentice-Hall Corporation System, Maryland, 1123 North Eutaw Street, Baltimore
City, Maryland 21201.
The Corporation's resident agent is The Prentice-Hall
Corporation System, Maryland, 1123 North Eutaw Street, Baltimore City, Maryland
21201. Said resident agent is a corporation of the State of Maryland.
Article IV
The purpose or purposes for which the Corporation is formed
and the business or objects to be transacted, carried on and promoted by it, are
as follows:
A. To conduct, operate and carry on the business of an
investment company.
B. To purchase, subscribe for, invest in or otherwise acquire,
and to own, hold, sell, possess, transfer or otherwise dispose of, or
turn to account or realize upon, and generally deal in, all forms of
securities of every nature, kind, character, type and form, including
but not limited to, shares, stocks, bonds, debentures, notes, scrip,
participation certificates, rights to subscribe, warrants, options,
certificates of deposit, choses in action, evidences of
<PAGE>
indebtedness, certificates of indebtedness and certificates of interest
of any and every kind and nature whatsoever, secured and unsecured,
issued or to be issued, by any corporation, partnership, association,
trust, entity or person, public or private, whether organized under the
laws of the United States, or any state, commonwealth, territory or
possession thereof, or organized under the laws of any foreign country.
C. To issue, sell, repurchase, redeem, retire, cancel,
acquire, resell, transfer, and otherwise deal in shares of the capital
stock of the Corporation, and to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of shares of
capital stock of the Corporation, any funds of the Corporation, whether
capital, surplus or otherwise to the full extent permitted by the laws
of Maryland, all without the vote or consent of the stockholders of the
Corporation.
D. To conduct its business in the State of Maryland,
all other states and elsewhere in any part of the world, and
to have one or more offices outside the State of Maryland.
E. To do any and all things herein set forth, and in addition
such other acts and things as are necessary or convenient to the
attainment of the purposes of this Corporation, or any of them, to the
same extent as natural persons lawfully might or could do in any part
of the world, and to engage in any lawful act or activity for which
corporations may be organized under the laws of the State of Maryland.
The foregoing objects and purposes shall, except as
otherwise expressly provided, be in no way limited or restricted by
reference to, or inference from the terms of any other clause of this
or any other Article of these Articles of Incorporation, and shall each
be regarded as independent, and construed as powers as well as objects
and purposes, and the enumeration of specific purposes, objects and
powers shall not be construed to limit or restrict in any manner the
meaning of general terms or the general powers of the Corporation now
or hereafter conferred by the laws of the State of Maryland, nor shall
the expression of one thing be deemed to exclude another, though it be
of like nature, not expressed; provided, however, that the Corporation
shall not have power to carry on within the State of Maryland any
business whatsoever the carrying on of which would preclude it from
being
2
<PAGE>
classified as an ordinary business corporation under the laws of said
State; nor shall any of the foregoing statements of its objects,
purposes and powers be deemed to permit the Corporation to carry on any
business, or exercise any powers, in any state, territory, district or
country except to the extent that the same may lawfully be carried on
or exercised under the laws thereof.
Article V
SECTION 1. The total number of shares which the
Corporation has authority to issue is 1,000,000,000 shares of capital
stock of the par value of $.001 each (the "Shares"), having an
aggregate par value of $1,000,000. The Shares shall initially
constitute one class designated as the "Series" class consisting of
50,000,000 Shares (such class, together with any further class or
classes of Shares from time to time created by the Board of Directors,
being herein referred to individually as a "Class" and collectively as
"Classes"). The Board of Directors shall have the power and authority
to further classify or reclassify any unissued Shares from time to time
by setting or changing the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions or redemption of such unissued
Shares.
SECTION 2. A description of the relative preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption
of all Classes of Shares is as follows, unless otherwise set forth in
Articles Supplementary filed with the Maryland State Department of
Assessments and Taxation describing any further Class or Classes from
time to time created by the Board of Directors:
(a) Assets Belonging to Class. All consideration received by
-------------------------
the Corporation for the issuance or sale of Shares of a
particular Class, together with all assets in which such
consideration is invested or reinvested, all income,
earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the
same may be, shall irrevocably belong to that Class for
all purposes, subject only to the rights of creditors,
and shall be so recorded upon the books of account of the
Corporation. Such consideration, assets, income,
3
<PAGE>
earnings, profits and proceeds, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds,
in whatever form the same may be, together with any unallocated
items (as hereinafter defined) relating to that Class as provided
in the following sentence, are herein referred to as "assets
belonging to" that Class. In the event that there are any assets,
income, earnings, profits or proceeds thereof, funds or payments
which are not readily identifiable as belonging to any particular
Class (collectively "Unallocated Items"), the Board of Directors
shall allocate such Unallocated Items to and among any one or
more of the Classes created from time to time in such manner and
on such basis as it, in its sole discretion, deems fair and
equitable; and any Unallocated Items so allocated to a particular
Class shall belong to that Class. Each such allocation by the
Board of Directors shall be conclusive and binding upon the
stockholders of all Classes for all purposes.
(b) Liabilities Belonging to Class. The assets belonging to
------------------------------ each particular Class shall be
charged with the liabilities of the Corporation in respect of
that Class and with all expenses, costs, charges and reserves
attributable to that Class, and shall be so recorded upon the
books of account of the Corporation. Such liabilities, expenses,
costs, charges and reserves, together with any unallocated items
(as hereinafter defined) relating to that Class as provided in
the following sentence, so charged to that Class are herein
referred to as "liabilities belonging to" that Class. In the
event there are any unallocated liabilities, expenses, costs,
charges or reserves of the Corporation which are not readily
identifiable as belonging to any particular Class (collectively
"Unallocated Items"), the Board of Directors shall allocate and
charge such Unallocated Items to and among any one or more of the
Classes created from time to time in such manner and on such
basis as the Board of Directors in its sole discretion deems fair
and equitable; and any Unallocated Items so allocated and charged
to a particular Class shall belong to that Class. Each such
allocation by the Board of Directors shall be conclusive and
binding upon the stockholders of all Classes for all purposes.
4
<PAGE>
(c) Dividends. Dividends and distributions on Shares of a
particular Class may be paid to the holders of Shares of
that Class from the assets belonging to that Class, after
providing for actual and accrued liabilities belonging to
that Class, at such times, in such manner and from such
lawful sources, as the Board of Directors may determine.
(d) Liquidation. In the event of the liquidation or
----------- dissolution of the Corporation the stockholders
of each Class that has been created shall be entitled to
receive, as a Class, when and as declared by the Board of
Directors, the excess of the assets belonging to that Class
over the liabilities belonging to that Class. The assets so
distributable to the stockholders of any particular Class
shall be distributed among such stockholders in proportion
to the number of Shares of the Class held by them and
recorded on the books of the Corporation.
(e) Voting. On each matter submitted to vote of the
------
stockholders, each holder of a Share shall be entitled to
one vote for each such Share standing in his name on the
books of the Corporation irrespective of the Class thereof
and all Shares of all Classes shall vote as a single class
("Single Class Voting"); provided, however, that (i) as to
any matter with respect to which a separate vote of any
Class is required by the Investment Company Act of 1940 or
would be required under the Maryland General Corporation
Law, such requirements as to a separate vote by that Class
shall apply in lieu of Single Class Voting as described
above; (ii) in the event that the separate vote requirements
referred to in (i) above apply with respect to one or more
Classes, then, subject to (iii) below, the Shares of all
other Classes shall vote as a single class; and (iii) as to
any matter which does not affect the interest of a
particular Class, only the holders of Shares of the one or
more affected Classes shall be entitled to vote.
(f) Equality. All Shares of each particular Class shall represent
-------- an equal proportionate interest in the
assets belonging to that Class (subject to the liabilities
belonging to that Class), and each Share of any particular
Class shall be equal to each other Share of that Class, but
the provisions of this sentence shall not
5
<PAGE>
restrict any distinctions permissible pursuant to subsection
(c) of this Section 2 of this Article or otherwise under
these Articles of Incorporation that may exist with respect to
stockholder elections to receive dividends or distributions in
cash or Shares of the same Class or that may otherwise exist
with respect to dividends and distributions on Shares of the
same Class.
SECTION 3. The Shares of the Corporation, of any Class, shall
be subject to the following provisions:
(a) All Shares now or hereafter authorized, of any Class,
shall be subject to redemption and be redeemable at the
option of the stockholder, in the sense used in the
general laws of the State of Maryland authorizing the
formation of corporations. Each holder of the Shares,
upon request to the Corporation accompanied by surrender
(to the Corporation, or an agent designated by it) of the
appropriate stock certificate or certificates, if any, in
proper form for transfer, and such other instruments as
the Board of Directors may require, shall be entitled to
require the Corporation to redeem all or any part of the
Shares outstanding in the name of such holder on the
books of the Corporation, at a redemption price for
Shares of that Class equal to the net asset value of such
Shares of that Class determined as hereinafter set forth,
less a charge, not to exceed one percent (1%) of such net
asset value, if and as fixed by resolution of the Board
of Directors of the Corporation from time to time.
(b) Notwithstanding the foregoing, the Board of Directors of the
Corporation may suspend the right of the holders of the
Shares of any Class to require the Corporation to redeem
Shares or may suspend any voluntary purchase of such Shares:
(i) for any period (A) during which the New York Stock
Exchange is closed other than the customary weekend
and holiday closing, or (B) during which trading on
the New York Stock Exchange is restricted;
(ii) for any period during which an emergency, as defined
by the rules of the Securities and Exchange Commission
or any successor
6
<PAGE>
thereto, exists as a result of which (A) disposal
by the Corporation of securities owned by it is not
reasonably practicable, or (B) it is not reasonably
practicable for the Corporation fairly to determine
the value of its net assets; or
(iii) for such other periods as the Securities and Exchange
Commission or any successor thereto may by order permit
for the protection of security holders of the
Corporation.
(c) The Corporation, pursuant to a resolution of the Board of
Directors and without the vote or consent of stockholders of the
Corporation, shall have the right to redeem at net asset value
all Shares, of any Class, in any stockholder account in which
there are less than 25 Shares or such lesser number of Shares as
shall be specified in such resolution. Such resolution shall set
forth that redemption of Shares in such accounts has been
determined to be necessary to reduce disproportionately
burdensome expenses in servicing stockholder accounts, or to be
otherwise in the economic best interest of the Corporation. Such
resolution shall provide that prior notice of at least 30 days
shall be given to a stockholder before such redemption of shares
and the stockholder will have 30 days (or such longer period as
is specified in the resolution) from the date of the notice to
avoid such redemption by increasing his account to at least 25
Shares, or such lesser number of Shares as is specified in the
resolution.
SECTION 4. Notwithstanding any provision of Maryland law requiring any
action to be taken or authorized by the affirmative vote of the holders of a
designated proportion greater than a majority of the Shares outstanding or of
the votes entitled to be cast, such action shall be effective and valid if taken
or authorized by the affirmative vote of the holders of a majority of the total
number of Shares outstanding or entitled to vote thereon pursuant to the
provisions of these Articles of Incorporation.
SECTION 5. No holder of stock of the Corporation shall, as such holder,
have any right to purchase or subscribe for any Shares which the Corporation may
issue or sell (whether out of the number of Shares now or hereafter authorized
by these Articles of Incorporation, or any amendment thereof, or out of any
Shares
7
<PAGE>
acquired by the Corporation after the issue thereof, or otherwise) other
than such right, if any, as the Board of Directors, in its discretion, may
determine.
Article VI
The initial number of directors of the Corporation shall be one until stock
of the Corporation is issued, and his name is:
Ronald P. Lynch
However, the By-Laws of the Corporation may fix the number of directors and
may authorize the Board of Directors, by the vote of a majority of the entire
Board of Directors, to divide the Board into classes, to increase or decrease
the number of directors within a limit specified in the By-Laws, provided that
in no case, after stock of the Corporation is issued, shall the number of
directors be less than three, and to fill the vacancies created by any such
increase in the number of directors. Unless otherwise provided by the By-Laws of
the Corporation, the directors of the Corporation need not be stockholders.
Article VII
The following provisions are inserted for the management of the business
and conduct of the affairs of the Corporation, and to create, define, limit and
regulate the powers of the Corporation, the directors and the stockholders.
SECTION 1. In furtherance and not in limitation of the powers conferred by
the statute and pursuant to these Articles of Incorporation, the Board of
Directors is expressly authorized to do the following:
(a) To make, adopt, alter, amend and repeal By-Laws of the
Corporation.
(b) To declare (from interest, dividends or other income
received or accrued, from accruals of original issue or
other discounts on obligations held, from capital or
other profits on portfolio assets whether realized or
unrealized, from surplus whether earned, capital or paid
in from any other lawful sources with respect to a
particular Class) dividends and distributions on the
Corporation's Shares, with respect to such Class, for
8
<PAGE>
payment in cash, property or the Corporation's own stock
to stockholders of record on such dates (which may be as
frequently as every day) and payable at such intervals as
the Board of Directors shall determine at any time in
advance of such payment, whether or not the amount of such
payment can at that time be determined or must be calculated
subsequent to declaration and prior to payment by reference
to amounts or other factors not yet determined at the time
of declaration (including but not limited to the amount of a
dividend or distribution to be determined only by reference
to what is sufficient to enable the Corporation to qualify
as a regulated investment company under the United States
Internal Revenue Code or to avoid liability for Federal
income tax); provided that if a dividend is paid from any
source other than earned surplus, the source of the dividend
shall be disclosed not later than at the time of payment to
the stockholders of such Class or Classes who receive it
(the authority granted by this subsection (b) to permit,
without limitation, and if otherwise lawful: the declaration
of dividends or distributions 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; establishing record or payment dates
for dividends or distributions on any basis, including
establishing a number of record or payment dates subsequent
to the declaration at any dividend or distribution;
establishing the same payment date for any number of
dividends or distributions declared prior to such date;
providing for the payment of dividends or distributions
declared and as yet unpaid to stockholders of the
Corporation redeeming shares prior to the payment date
otherwise applicable; and providing in advance for the
conditions under which any dividend or distribution may be
payable in the Corporation's own shares to all or less than
all of the Corporation's stockholders with respect to a
particular Class and for the calculation of any transfer
from earned surplus to capital surplus in excess of the
transfer to the stated capital of the aggregate par value of
the shares of a particular Class so to be issued, whether
such dividend or distribution is in authorized but unissued
or in treasury shares of the Corporation).
(c) To issue and sell or to cause the issuance and sale
of
9
<PAGE>
Shares, of any Class, in such amounts and on
such terms and conditions, for such purpose and for such
amount or kind of consideration as is now or hereafter
permitted by the laws of the State of Maryland and in
accordance with the Investment Company Act of 1940.
(d) To purchase and to cause to be purchased Shares, of any
Class, pursuant to these Articles of Incorporation, upon
tender thereof by the holder or holders thereof or
otherwise, provided the Corporation has assets belonging
to that Class legally available for such purpose whether
arising out of paid-in surplus, other surplus, net
profits or otherwise, to such extent and in such manner
and upon such terms as the Board of Directors shall deem
expedient, and to pay for such Shares in cash belonging
to that Class then held or owned by the Corporation.
(e) To authorize, subject to such vote, consent, or approval
of stockholders and other conditions, if any, as may be
required by any applicable statute, rule or regulation,
the execution and performance by the Corporation of an
agreement or agreements with any person, corporation,
association, partnership or other organization whereby,
subject to the supervision and control of the Board of
Directors, any such other person, corporation,
association, partnership, or other organization shall
render managerial, investment advisory and related
services to the Corporation (including, if deemed
advisable, the management or supervision of the
investment portfolios of the Corporation) upon such terms
and conditions as may be provided in such agreement or
agreements.
(f) To authorize, subject to such vote, consent or approval
of stockholders and other conditions, if any, as may be
required by any applicable statute, rule or regulation,
the execution and performance by the Corporation of an
agreement or agreements, which may be exclusive, with any
person, corporation, association, partnership or other
organization, as distributor, providing for the sale and
distribution of the Shares. Such agreement or agreements
may provide for the charge by the Corporation of a
premium over the net asset value (determined as
hereinafter provided) of such Shares and allowance of a
discount by the Corporation to such distributor, and may
10
<PAGE>
further provide for the reallowance by such distributor of
concessions or commissions from but not exceeding such
discount; provided, however, that such discount shall not
exceed the amount of the premium. Such agreement may also
provide for the payment of certain distribution expenses by
the Corporation.
(g) To authorize any agreement of the character described in
sections (e) or (f) of this Section 1 with any person,
corporation, association, partnership or other
organization, although one or more of the members of the
Board of Directors or officers of the Corporation may be
the other party to any such agreement or an officer,
director, shareholder, or member of such other party, and
no such agreement shall be invalidated or rendered
voidable by reason of the existence of any such
relationship. Any director of the Corporation who is also
a director or officer of such corporation or who is so
interested may be counted in determining the existence of
a quorum at any meeting of the Board of Directors which
shall authorize any such agreement, and may vote thereat
to authorize any such contract or transaction, with like
force and effect as if he were not such director or
officer of such other corporation or not so interested.
Any Agreement entered into pursuant to said sections (e)
or (f) shall be consistent with and subject to the
requirements of the Investment Company Act of 1940
(including any amendment thereof or other applicable Act
of Congress hereafter enacted), and no amendment to any
agreement entered into pursuant to said section (e)
(other than an amendment reducing the compensation of the
other party thereto) shall be effective unless assented
to by the affirmative vote of a majority of the
outstanding voting securities of the Corporation (and of
each Class affected by such amendment) as such phrase is
defined in the Investment Company Act of 1940.
SECTION 2. The Board of Directors may authorize the purchase by the
Corporation, either directly or through any agent, of the Shares, of any Class,
in the open market or otherwise, at prices not in excess of the net asset value
of such Shares (determined as hereinafter provided) as of a time determined by
the Board of Directors reasonably proximate to the time of purchase by the
Corporation or any such agent.
11
<PAGE>
SECTION 3. For the purposes referred to in these Articles of Incorporation,
the net asset value of the Shares of a particular Class as of any particular
time shall be determined by or pursuant to the direction of the Board of
Directors as follows:
(a) The net asset value of each Share, of any Class, at any
particular time, shall be the quotient, carried out to
not less than two decimal points, obtained by dividing
the net value of the assets of the Corporation belonging
to that Class (determined as hereinafter provided) as of
such determination time by the total number of Shares of
that Class then outstanding, including all Shares of that
Class which the Corporation has agreed to sell for which
the price has been determined, and excluding Shares of
that Class which have been surrendered to the Corporation
or an agent and which the Corporation has agreed to
purchase, for which the price has been determined.
The net value of the assets of the Corporation of a Class as
of any such determination time shall be determined in
accordance with sound accounting practice by deducting from
the gross value of the assets of the Corporation belonging to
that Class (determined as hereinafter provided) at such time,
the amount of all liabilities belonging to that Class,
including accrued expenses, such reserves as may be set up to
cover taxes and any other liabilities, and such other
deductions belonging to such Class as in the opinion of the
Board of Directors of the Corporation are in accordance with
sound accounting practice.
The gross value of the assets of the Corporation of a Class at
any such determination time shall be an amount equal to all
cash, receivables, the market value of all securities for
which market quotations are readily available and the fair
value of other assets of the Corporation belonging to that
Class at such determination time, all determined in accordance
with sound accounting practice and giving effect to the
following:
(1) The market value as of any such determination time of any
security owned by the Corporation which is traded in the
NASDAQ National Market System or is listed or admitted to
trading privileges on the New York Stock Exchange or the
American Stock Exchange shall be the last
12
<PAGE>
sale price or (in the case of a security in which there has
been no previously reported sale transaction since the last
determination time) the mean between the last bid price and
the last asked price, for such security on such exchange or in
such market system. In case securities being valued are listed
or admitted to trading privileges on any securities exchange
other than the New York Stock Exchange, the American Stock
Exchange or the NASDAQ National Market System, the securities
exchange, sale transactions or bid or asked prices which are
to be used as aforesaid shall be selected by the Board of
Directors or by any officer or other person designated by the
Board of Directors for the purpose.
(2) The market value of securities traded in an
over-the-counter market and not traded in the NASDAQ National
Market System, shall be the mean between the last bid and
asked price in such market prior to such determination time.
(3) The market value of other property, including any
securities which are neither listed nor admitted to trading
privileges on any exchange or traded in an over-the-counter
market, shall be determined in good faith in such manner as
the Board of Directors shall prescribe from time to time.
(4) The determination of the market value of securities
hereunder may be made in reliance on any recognized source of
quotations or basis for ascertaining quotations.
(5) If a security is traded in more than one market, a
determination may be made as to which market most accurately
reflects the value of such security.
(b) The Board of Directors is empowered, in its discretion,
to establish other methods for determining such net asset
value whenever such other methods are deemed by it to 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.
13
<PAGE>
SECTION 4. The presence in person or by proxy of the holders of one-third
of the Shares of all Classes issued and outstanding and entitled to vote thereat
shall constitute a quorum for the transaction of any business at all meetings of
the shareholders, except as otherwise provided by law or in these Articles of
Incorporation and except that where the holders of Shares of any Class are
entitled to a separate vote as a Class (a "Separate Class") or where the holders
of Shares of two or more (but not all) Classes are required to vote as a single
class (a "Combined Class"), the presence in person or by proxy of the holders of
one-third of the Shares of that Separate Class or Combined Class, as the case
may be, issued and outstanding and entitled to vote thereat shall constitute a
quorum for such vote. If, however, a quorum with respect to all Classes, a
Separate Class or a Combined Class, as the case may be, shall not be present or
represented at any meeting of the shareholders, the holders of a majority of the
Shares of all Classes, such Separate Class or such Combined Class, as the case
may be, present in person or by proxy and entitled to vote shall have power to
adjourn the meeting from time to time as to all Classes, such Separate Class or
such Combined Class, as the case may be, without notice other than announcement
at the meeting, until the requisite number of Shares entitled to vote at such
meeting shall be present. At such adjourned meeting at which the requisite
number of Shares entitled to vote thereat shall be represented any business may
be transacted which might have been transacted at the meeting as originally
notified. The absence from any meeting of stockholders of the number of Shares
in excess of one-third of the Shares of all Classes or of the affected Class or
Classes, as the case may be, which may be required by the laws of the State of
Maryland, the Investment Company Act of 1940 or any other applicable law, or by
these Articles of Incorporation, for action upon any given matter shall not
prevent action of such meeting upon any other matter or matters which may
properly come before the meeting, if there shall be present thereat, in person
or by proxy, holders of the number of Shares required for action in respect of
such other matter or matters.
SECTION 5. Any determination as to any of the following matters made by or
pursuant to the direction of the Board of Directors consistent with these
Articles of Incorporation and in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of duties, shall be final and conclusive
and shall be binding upon the Corporation and every holder of the Shares of any
Class, namely, the amount of the assets, obligations,
14
<PAGE>
liabilities and expenses of the Corporation belonging to any Class; the
amount of the net income of the Corporation from dividends and interest for any
period and the amount of assets at any time legally available for the payment of
dividends with respect to any Class; the amount of paid-in surplus, other
surplus, annual or other net profits, or net assets in excess of capital,
undivided profits, or excess of profits over losses on sales of securities
belonging to any Class; the amount, purpose, time of creation, increase or
decrease, alteration or cancellation of any reserves or charges and the
propriety thereof (whether or not any obligation or liability for which such
reserves or charges shall have been created shall have been paid or discharged)
with respect to any Class; the market value, or any sale, bid or asked price to
be applied in determining the market value, of any security owned or held by the
Corporation with respect to any Class; the fair value of any asset owned by the
Corporation; the number of Shares of the Corporation of any Class issued or
outstanding; the existence of conditions permitting the postponement or payment
of the repurchase price of Shares of any Class or the suspension of the right of
redemption as provided by law; any matter relating to the acquisition, holding
and disposition of securities and other assets by the Corporation belonging to
any Class; any question as to whether any transaction constitutes a purchase of
securities on margin, a short sale of securities, or an underwriting of the sale
of, or participation in any underwriting or selling group in connection with the
public distribution of, any securities; and any matter relating to the issue,
sale, repurchase and/or other acquisition or disposition of Shares of any Class.
SECTION 6. The Corporation is adopting its corporate title through
permission of the firm of Lord, Abbett & Co., which is entering into a
management or advisory contract with the Corporation. Such contract shall make
appropriate provisions that upon the termination of such contract for any cause,
or if such firm or subsidiary or affiliate or successor deems it advisable to
withdraw the right to the use of its name, the Corporation will, at the request
of such firm or a subsidiary, affiliate or successor 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
registered service mark of Lord, Abbett & Co., without the written consent of
such firm, subsidiary, affiliate or successor. The Corporation shall also agree
in such contract that investment companies other than the Corporation for which
such firm or a subsidiary successor may act as investment adviser, and other
companies affiliated with
15
<PAGE>
Lord, Abbett & Co., may be formed with the words "Lord Abbett" in their
corporate titles. Such agreements on the part of the Corporation are hereby made
binding upon it, its directors, officers, stockholders, creditors and all other
persons claiming under or through it.
Article VIII
To the fullest extent permitted by Maryland statutory or decisional law, as
amended from time to time, no director or officer of the Corporation shall be
personally liable to the Corporation or its stockholders for money damages,
except to the extent such exemption from liability or limitation thereof is not
permitted by the Investment Company Act of 1940, as amended from time to time.
No amendment of these Articles or repeal of any of its provisions shall limit or
eliminate the benefits provided to directors and officers under this provision
with respect to any act or omission which occurred prior to such amendment or
repeal.
Article IX
From time to time any of the provisions of these Articles of Incorporation
may be amended, altered or repealed (including any amendment that changes the
terms of any of the outstanding Shares by classification, reclassification or
otherwise), and other provisions that might, under the statutes of the State of
Maryland at the time in force, be lawfully contained in Articles of
Incorporation may be added or inserted, upon the vote of the holders of a
majority of the Shares of all Classes or of the affected Classes, as the case
may be, at the time outstanding and entitled to vote, and all rights at any time
conferred upon the stockholders of the Corporation by these Articles of
Incorporation are subject to the provisions of this Article IX.
IN WITNESS WHEREOF, I have signed these ARTICLES OF INCORPORATION on this
3rd day of April, 1992, and acknowledge the same to be my act.
/s/ Kenneth B. Cutler
----------------------
Kenneth B. Cutler
16
EXHIBIT 99.B2
BY-LAWS
OF
LORD ABBETT RESEARCH FUND, INC.
ARTICLE I
OFFICES
SECTION 1. Principal Office - The principal office of the Corporation
in Maryland shall be in the City of Baltimore, and the name of the resident
agent in charge thereof is The Prentice-Hall Corporation Systems, Maryland.
SECTION 2. Other Offices - The Corporation may also have an office in
the City and State of New York and offices at such other places as the Board of
Directors may from time to time determine.
ARTICLE II
STOCKHOLDERS MEETINGS
SECTION 1. Annual Meetings. The Corporation shall not hold an annual
meeting of its stockholders in any fiscal year of the Corporation unless
required in accordance with the following sentence. The Chairman of the Board or
the President shall call an annual meeting of the stockholders when one or more
matters are required to be acted on by stockholders under the Investment Company
Act of 1940, as amended, and the Chairman of the Board, the President, a Vice
President, the Secretary or any director shall call an annual meeting of
stockholders at the request in writing of a majority of the Board of Directors
or of stockholders holding at least one quarter of the stock of the Corporation
outstanding and entitled to vote at the meeting. Any annual meeting of the
stockholders held pursuant to the foregoing sentence shall be held at such
<PAGE>
time and at such place, within the City of New York or elsewhere, as may be
fixed by the Chairman of the Board or the President or the Board of Directors or
by the stockholders holding at least one-quarter of the stock of the Corporation
outstanding and entitled to vote, as the case may be, and as may be stated in
the notice setting forth such call, provided that any stockholders requesting
such meeting shall have paid to the Corporation the reasonably estimated cost of
preparing and mailing the notice thereof, which the Secretary shall determine
and specify to the stockholders. Any meeting of stockholders held in accordance
with this Section 1 shall for all purposes constitute the annual meeting of
stockholders for the fiscal year of the Corporation in which the meeting is held
and, without limiting the generality of the foregoing, shall be held for the
purposes of (a) acting on any such matter of matters so required to be acted on
by stockholders under the Investment Company Act of 1940, as amended, and (b)
electing directors, and for transacting such other business as may properly be
bought before the meeting. Only such business, in addition to that prescribed by
law, by the Articles of Incorporation and by these By-laws, may be brought
before such meeting as may be specified by resolution of the Board of Directors
or by writing filed with the Secretary of the Corporation and signed by the
Chairman of the Board or by the President or by a majority of the directors or
by stockholders holding at least one-quarter of the stock of the Corporation
outstanding and entitled to vote at the meeting.
SECTION 2. Special meetings - Special meetings of the stockholders for
any purpose or purposes may be held upon call by the Chairman of the Board or by
a majority of the Board of Directors, and shall be called by the Chairman of the
Board, the President, a Vice President, the Secretary or any director at the
request in writing of a majority of the Board of Directors or of stockholders
holding at least one-quarter of the stock of the Corporation outstanding and
entitled to vote at the meeting, at such
<PAGE>
time and at such place where an annual meeting of stockholders could be held, as
may be fixed by the Chairman of the Board, the President or the Board of
Directors or by the stockholders holding at least one-quarter of the stock of
the Corporation outstanding and so entitled to vote, as the case may be, and as
may be stated in the notice setting forth such call. Such request shall state
the purpose or purposes of the proposed meting, and only such purpose or
purposes so specified may properly be brought before such meeting.
SECTION 3. Notice of Meetings - Written or printed notice of every
annual or special meeting of stockholders, stating the time and place thereof
and the general nature of the business proposed to be transacted at any such
meeting, shall be delivered personally or mailed not less than 10 nor more than
90 days previous thereto to each stockholder of record entitled to vote at the
meeting at his address as the same appears on the books of the Corporation.
Meetings may be held without notice if all of the stockholders entitled to vote
are present or represented at the meeting, or if notice is waived in writing,
either before or after the meeting, by those not present or represented at the
meeting. No notice of an adjourned meeting of the stockholders other than an
announcement of the time and place thereof at the preceding meeting shall be
required.
SECTION 4. Quorum - The presence in person or by proxy of the holders
of a third of the Shares of all Classes issued and outstanding and entitled to
vote thereat shall constitute a quorum for the transaction of any business at
all meetings of the shareholders except as otherwise provided by law or in the
Articles of Incorporation and except that where the holders of Shares of any
Class are entitled to a separate vote as a Class (a "Separate Class:) or where
the holders of Shares of two or more (but not all) Classes are required to vote
as a single Class (a "Combined Class"), the presence in person or by proxy of
the holders of a third of the Shares of that Separate Class or Combined Class,
as the case may be, issued and outstanding and
<PAGE>
entitled to vote thereat shall constitute a quorum for such vote. If, however, a
quorum with respect to all Classes, a Separate Class or a Combined Class, as the
case may be, issued and outstanding and entitled to vote thereat shall
constitute a quorum for such vote. If, however, a quorum with respect to all
Classes, a Separate Class or a Combined Class, as the case may be, shall not be
present or represented at any meeting of the shareholders, the holders of a
majority of the Shares of all Classes, such Separate Class or such Combined
Class, as the case may be, present in person or by proxy and entitled to vote
shall have power to adjourn the meeting form time to time as to all Classes,
such Separate Class or such Combined Class, as the case may be, without notice
other than announcement at the meeting, until the requisite number of Shares
entitled to vote at such meeting shall be present. At such adjourned meeting at
which the requisite number of Shares entitled to vote thereat shall be
represented any business may be transacted at the meeting as originally
notified. The absence from any meeting of stockholders of the number of Shares
in excess of a third of the Shares of all Classes or of the affected Class or
Classes, as the case may be, which may be required by the laws of the State of
Maryland, the Investment Company Act of 1940 or any other applicable law or the
Articles of Incorporation, for action upon any given matter shall not prevent
action of such meeting upon any other matter or matters which may properly come
before the meeting, if there shall be present thereat, in person or by proxy,
holders of the number of Shares required for action in respect of such matter or
matters.
SECTION 5. Voting - All elections shall be had and all questions
decided by a majority of the votes cast, without regard to Class, at a duly
constituted meeting, except as otherwise provided by law or by the Articles of
Incorporation or by these By-laws and except that with respect to a question as
to which the holders of Shares of any Class or Classes are
<PAGE>
entitled or required to vote as a Separate Class or a Combined Class, as the
case may be, such question shall be decided as to such Separate Class or such
Combined Class, as the case may be, by a majority of the votes cast by Shares of
such Separate Class or such Combined Class, as the case may be.
With respect to all Shares having voting rights (a) a shareholder may
vote the Shares owned of record by him either in person or by proxy executed in
writing by the shareholder or by his duly authorized attorney-in-fact, provided
that no proxy shall be valid after eleven months from its date unless otherwise
provided in the proxy and (b) in all elections for directors every shareholder
shall have the right to vote, in person or by proxy, the Shares owned of record
by him, for as many persons as there are directors to be elected and for whose
election he has a right to vote.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. General Powers - The property, affairs and business of the
Corporation shall be managed by the Board of Directors, provided, however, that
the Board of Directors may authorize the Corporation to enter into an agreement
or agreements with any person, corporation, association, partnership or other
organization, subject to the Board's supervision and control, for the purpose of
providing managerial, investment advisory and related services to the
Corporation which may include management or supervision of the investment
portfolio of the Corporation.
SECTION 2. Number, Class Quorum, Election, Term of Office and
Qualifications. The Board of Directors of the Corporation shall consist of not
less than three or more than fifteen persons, none of whom need be stockholders
of the Corporation. The number of directors (within the above limits) shall be
determined by the Board of Directors from time to time, as it sees fit, by vote
of a majority of the whole Board. Directors shall
<PAGE>
consist of one class only. The directors shall be elected at each annual meeting
of stockholders and, whether or not elected for a specific term, shall hold
office, unless sooner removed, until their respective successors are elected and
qualify.
One-third of the whole Board, but in no event less than two, shall
constitute a quorum for the transaction of business, but if at any meeting of
the Board there shall be less than a quorum present, a majority of the directors
present may adjourn the meeting from time to time until a quorum shall have been
obtained, when any business may be transacted which might have been transacted
at the meeting as originally convened. No notice of an adjourned meeting of the
directors other than an announcement of the time and place thereof at the
preceding meeting shall be required. The acts of the majority of the directors
present at any meeting at which there is a quorum shall be the acts of the
Board, except as otherwise provided by law, by the Articles of Incorporation or
by these By-laws.
SECTION 3. Vacancies. The Board of Directors, by vote of a majority of
the whole Board, may elect directors to fill vacancies in the Board resulting
from an increase in the number of directors or from any other cause. Directors
so chosen shall hold office until their respective successors are elected and
qualify, unless sooner displaced pursuant to law or these By-laws. The
stockholders, at any meeting called for the purpose, may, with or without cause,
remove any director by the affirmative vote of the holders of a majority of the
votes entitled to be cast, and at any meeting called for the purpose may fill
the vacancy in the Board thus caused.
SECTION 4. Regular Meetings - Regular meetings of the Board of
Directors shall be held at such time and place, within or without the State of
Maryland, as may from time to time be fixed by Resolution of the Board or as may
be specified in the notice of any meeting. No notice of regular meetings of the
Board shall be required except as required by the
<PAGE>
Investment Company Act of 1940, as amended.
SECTION 5. Special Meetings - Special meetings of the Board of
Directors may be called from time to time by the Chairman of the Board, the
President, any Vice President or any two directors. Each special meeting of the
Board shall be held at such place, either within or outside of the State of
Maryland, as shall be designated in the notice of such meeting. Notice of each
such meeting shall be mailed to each director, at his residence or usual place
of business, at least two days before the day of the meeting, or shall be
directed to him at such place by telegraph or cable, or be delivered to him
personally not later than the day before the day of the meeting. Every such
notice shall state the time and place of the meeting but need not state the
purposes thereof, except as otherwise expressly provided in these By-Laws or by
statute.
SECTION 6. Telephonic Conference Meetings - Any meeting of the Board or
any committee thereof may be held by conference telephone, regardless where each
director may be located at the time, by means of which all persons participating
in the meeting can hear each other, and participation in such meeting in such
manner shall constitute presence in person at such meeting, except where the
Investment Company Act of 1940, as amended, specifically requires that the vote
of such director be cast in person.
SECTION 7. Fees and Expenses - The directors shall receive such fees
and expenses for services to the Corporation as may be fixed by the Board of
Directors, subject however, to such limitations as may be provided in the
Articles of Incorporation. Nothing herein contained shall be construed to
preclude any director from serving the Corporation in any other capacity as an
officer, agent or otherwise and receiving compensation therefor.
SECTION 8. Transactions with Directors - Except as otherwise provided
by law or in the Articles of Incorporation, a director of the Corporation shall
not in the absence of fraud be disqualified from office by dealing or
contracting with the Corporation either as a vendor,
<PAGE>
purchaser or otherwise, nor in the absence of fraud shall any transaction or
contract of the Corporation be void or voidable or affected by reason of the
fact that any director, or any firm of which any director is a member, or any
corporation of which any director is an officer, director or stockholder, is in
any way interested in such transaction or contract; provided that at the meeting
of the Board of Directors, at which said contract or transaction is authorized
or confirmed, the existence of an interest of such director, firm or corporation
is disclosed or made known and there shall be present a quorum of the Board of
Directors a majority of which, consisting of directors not so interested, shall
approve such contract or transaction. Nor shall any director be liable to
account to the Corporation for any profit realized by him from or through any
such transaction or contract of the Corporation ratified or approved as
aforesaid, by reason of the fact that he or any firm of which he is a member, or
any corporation of which he is an officer, director, or stockholder, was
interested in such transaction or contract. Directors so interested may be
counted when present at meetings of the Board of Directors for the purpose of
determining the existence of a quorum. Any contract, transaction or act of the
Corporation or of the Board of Directors (whether or not approved or ratified as
hereinabove provided) which shall be ratified by a majority of the votes cast at
any annual or special meeting at which a quorum is present called for such
purpose, or approved in writing by a majority in interest of the stockholders
having voting power without a meeting, shall, except as otherwise provided by
law, be valid and as binding as though ratified by every stockholder of the
Corporation.
SECTION 9. Committees - The Board of Directors may, by resolution
adopted by a majority of the whole Board, designate one or more committees each
such committee to consist of two or more directors of the Corporation, which, to
the extent permitted by law and provided in said resolution,
<PAGE>
shall have and may exercise the powers of the Board over the business and
affairs of the Corporation, and may have power to authorize the seal of the
Corporation to be affixed to all papers which may require it. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors. A majority of the members of
any such committee may determine its action and fix the time and place of its
meetings, unless the Board of Directors shall otherwise provide. The Board of
Directors shall have power at any time to change the membership of, to fill
vacancies in, or to dissolve any such committee.
SECTION 10. Written Consents - Any action required or permitted to be
taken at any meeting of the Board of Directors or by any committee thereof may
be taken without a meeting, if a written consent thereto is signed by all
members of the Board or of such committee, as the case may be, and such written
consent is filed with the minutes or proceedings of the Board or committee.
SECTION 11. Waiver of Notice - Whenever under the provisions of these
By-Laws, or of the Articles of Incorporation, or of any of the laws of the State
of Maryland, or other applicable statue, the Board of Directors is authorized to
hold any meeting or take any action after notice or after the lapse of any
prescribed period of time, a waiver thereof, in writing, signed by the person or
persons entitled to such notice or lapse of time, whether signed before or after
the time of meeting or action stated herein, shall be deemed equivalent thereto.
The presence at any meeting of a person or persons entitled to notice thereof
shall be deemed a waiver of such notice as to such person or persons.
<PAGE>
ARTICLE IV
OFFICERS
SECTION 1. Number and Designation. The Board of Directors shall each
year appoint from among their members a Chairman and a President of the
Corporation, and shall appoint one or more Vice Presidents, a Secretary and a
Treasurer and, from time to time, any other officers and agents as it may deem
proper. Any two of the above-mentioned offices, except those of the President
and a Vice President, may be held by the same person, but no officer shall
execute, acknowledge or verify any instrument in more than one capacity if such
instrument be required by law or by these By-laws to be executed, acknowledged
or verified by any two or more officers.
SECTION 2. Term of Office - The term of office of all officers shall be
one year or until their respective successors are chosen; but any officer or
agent chosen or appointed by the Board of Directors may be removed, with or
without cause, at any time, by the affirmative vote of a majority of the members
of the Board then in office.
SECTION 3. Duties. Subject to such limitations as the Board of
Directors may from time to time prescribe, the officers of the Corporation shall
each have such powers and duties as generally appertain to their respective
offices, as well as such powers and duties as from time to time may be conferred
by the Board of Directors.
ARTICLE V
CERTIFICATE OF STOCK
SECTION 1. Form and Issuance - Each stockholder of the Corporation, of
a particular Class, shall be entitled upon request, to a certificate or
certificates, in such form as the Board of Directors may from time to time
prescribe, which shall represent and certify the number of shares of stock
<PAGE>
of the Corporation of that Class of stock owned by such stockholder. The
certificates for shares of stock of the Corporation shall bear the signature,
either manual or facsimile, of the Chairman of the Board, the President or a
Vice President and the Treasurer or an Assistant Treasurer or the Secretary or
an Assistant Secretary, and shall be sealed with the seal of the Corporation or
bear a facsimile of such seal. The validity of any stock certificate shall not
be affected if any officer whose signature appears thereon ceases to be an
officer of the Corporation before such certificate is issued.
SECTION 2. Transfer of Stock - The shares of stock of the Corporation
of any Class shall be transferable on the books of the Corporation by the holder
thereof in person or by a duly authorized attorney, upon surrender for
cancellation of a certificate or certificates for a like number of shares, with
a duly executed assignment and power of transfer endorsed thereon or attached
thereto, or, if no certificate has been issued to the holder in respect of
shares of stock of the Corporation, upon receipt of written instructions, signed
by such holder, to transfer such shares from the account maintained in the name
of such holder by the Corporation or its agent. Such proof of the authenticity
of the signatures as the Corporation or its agent may reasonably require shall
be provided.
SECTION 3. Lost, Stolen, Destroyed and Mutilated Certificates - The
holder of any stock of the Corporation of any Class shall immediately notify the
Corporation of any loss, theft, destruction or mutilation of any certificate
therefore, and the Board of Directors may, in its discretion, cause to be issued
to him a new certificate or certificates of stock of the same Class, upon the
surrender of the mutilated certificate or in case of loss, theft or destruction
of the certificate upon satisfactory proof of such loss, theft or destruction of
the certificate upon satisfactory proof of such loss, theft, or destruction; and
the Board of Directors may, in its discretion, require the owner of the lost,
stolen or destroyed certificate,
<PAGE>
or his legal representatives, to give to the Corporation and to such registrar
or transfer agent as may be authorized or required to countersign such new
certificate or certificates, a bond, in such sum as they may direct, and with
such surety or sureties as they may direct, as indemnity against any claim that
may be made against them or any of them on account of or in connection with the
alleged loss, theft, or destruction of any such certificate.
SECTION 4. Record Date - The Board of Directors may fix, in advance, a
date as the record date for the purpose of determining stockholders, of any
Class, entitled to notice of, or to vote at, any meeting of stockholders of any
Class, or stockholders of any Class entitled to receive payment of any dividend
or the allotment of any rights, or in order to make a determination of
stockholders of any Class for any other proper purpose. Such date, in any case,
shall be not more than 90 days, and in case of a meeting of stockholders, not
less than 10 days, prior to the date on which the particular action requiring
such determination of stockholders is to be taken. In lieu of fixing a record
date, the Board of Directors may provide that the stock transfer books shall be
closed for a stated period but not to exceed, in any case, 20 days prior to the
date of any meeting of stockholders or the date for payment of any divided or
the allotment of rights. If the stock transfer books are closed for the purpose
of determining stockholders entitled to notice of or to vote at a meeting of
stockholders, such books shall be closed for at least 10 days immediately
preceding such meeting. If no record date for the determination of stockholders
entitled to notice of, or to vote at, a meeting of stockholders shall be at the
close of business on the day on which notice of the meeting is mailed or the day
30 days before the meeting, whichever is the closer date to the meeting, and the
record date for the determination of stockholders entitled to receive payment of
a dividend or an allotment of any rights shall be at the close of business on
the day on
<PAGE>
which the resolution of the Board of Directors declaring the dividend or
allotment of rights is adopted, provided that the payment or allotment date
shall not be more than 90 days after the date of the adoption of such
resolution.
ARTICLE VI
CORPORATE BOOKS
The books of the Corporation may be kept outside the State of Maryland
at such place or places as the Board of Directors may from time to time
determine. The original or duplicate stock ledger shall be maintained at the
office of the Corporation's transfer agent.
ARTICLE VII
SIGNATURES
Except as otherwise provided in these By-Laws or as the Board of Directors may
generally or in particular cases authorize the execution thereof in some other
manner, all deeds, leases, transfers, contracts, bonds, notes, checks, drafts
and other obligations made, accepted or endorsed by the Corporation and all
endorsements, assignments, transfers, stock powers or other instruments of
transfer of securities owned by or standing in the name of the Corporation shall
be signed or executed by two officers of the Corporation, who shall be the
Chairman, the President or a Vice President and a Vice President, the Secretary
or the Treasurer.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall be established by resolution
of the Board of Directors of the Corporation.
<PAGE>
ARTICLE IX
CORPORATE SEAL
The corporate seal of the Corporation shall consist of a flat faced
circular die with the word "Maryland" together with the name of the Corporation,
the year of its organization, and such other appropriate legend as the Board of
Directors may from time to time determine, cut or engraved thereon. In lieu of
the corporate seal, when so authorized by the Board of Directors or a duly
empowered committee thereof, a facsimile thereof may be impressed or affixed or
reproduced.
ARTICLE X
INDEMNIFICATION
As part of the consideration for agreeing to serve and serving as a
director of the Corporation, each director of the Corporation shall be
indemnified by the Corporation against every judgment, penalty, fine,
settlement, and reasonable expense (including attorneys' fees) actually incurred
by the director in connection with any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, in
which the director was, is, or is threatened to be made a named defendant or
respondent (or otherwise becomes a party) by reason of such director's service
in that capacity or status as such, and the amount of every such judgment,
penalty, fine, settlement and reasonable expense so incurred by the director
shall be paid by the Corporation or, if paid by the director, reimbursed to the
director by the Corporation, subject only to the conditions and limitations
imposed by the applicable provisions of Section 2-418 of the Corporations and
Associations Article of the Annotated Code of the State of Maryland and by the
provisions of Section 17(h) of the United States Investment Company Act of
<PAGE>
1940 as interpreted and as required to be implemented by Securities and Exchange
Commission Release No. IC-11330 of September 4, 1980. The foregoing shall not
limit the authority of the Corporation to indemnify any of its officers,
employees, or agents to the extent consistent with applicable law.
ARTICLE XI
AMENDMENTS
All By-Laws of the Corporation shall be subject to alteration,
amendment, or repeal, and new By-Laws not inconsistent with any provision of the
Articles of Incorporation of the Corporation may be made, either by the
affirmative vote of the holders of record of a majority of the outstanding stock
of the Corporation entitled to vote in respect thereof, given at an annual
meeting or at any special meeting, provided notice of the proposed alteration,
amendment or repeal of the proposed new By-Laws is included in or accompanies
the notice of such meeting, or by the affirmative vote of a majority of the
whole Board of Directors given at a regular or special meeting of the Board of
Directors, provided that the notice of any such special meeting indicates that
the By-Laws are to be altered, amended, repealed, or that new By-Laws are to be
adopted.
ARTICLE XII
COMPLIANCE WITH INVESTMENT COMPANY ACT OF 1940
Investment Company Act of 1940 - No provision of the By-Laws of the
Corporation shall be given effect to the extent inconsistent with the
requirements of the Investment Company Act of 1940, as amended.
EXHIBIT 99.B5
MANAGEMENT AGREEMENT
AGREEMENT made as of this 10th day of June, 1992 by and
between LORD ABBETT RESEARCH FUND, INC., a Maryland Corporation (hereinafter
called the "Corporation"), and LORD, ABBETT & CO., a New York partnership
(hereinafter called the "Investment Manager").
WHEREAS, the Corporation, 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 of the Corporation 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 Corporation 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 Corporation's direction or
control) including, without limitation, the supervision of its investment
portfolio and the recommendation of investment policies and procedures within
the limitations set forth in the Corporation's Registration Statement on file
with the Securities and Exchange Commission under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended (the "Act").
<PAGE>
The Investment Manager agrees to maintain an adequate
organization of competent persons to perform the supervisory functions mentioned
herein.
All recommendations with respect to the investment portfolios
will be made to the Corporation's trading department which, with the approval of
authorized officers of the Corporation, will execute all trades in accordance
with the Corporation'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 Corporation are,
and shall at all times be, subject to the control and direction of its Board of
Directors.
2. Each Series of the Corporation 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 three quarters
(3/4) of one percent (1%)of the value of the Series' average daily net assets.
The value of the net assets of the Series shall include all assets held in trust
or in custody of any bank, savings bank or trust company for the Corporation,
subject to its control or direction, and shall be determined as provided in the
Articles of Incorporation of the Corporation. The fee shall be paid on the first
day of each month for the preceding month.
2
<PAGE>
The Investment Manager may receive research and other
statistical information from broker-dealers and from other sources and, in
accordance with said Section 28(e) of the Securities and Exchange Act of 1934, a
broker-dealer may be paid a commission for a transaction involving portfolio
securities of the Corporation exceeding the amount another broker-dealer would
have charged for the same transaction if it is determined by the Investment
Manager 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 Corporation 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 Corporation.
It is understood that any supplemental advisory or statistical
services which may be provided to the Corporation 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 Corporation, but their value is
3
<PAGE>
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 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 Corporation) 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 Corporation, 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 Corporation 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 its investment portfolio and shares of its capital
stock outstanding.
4
<PAGE>
5. The Investment Manager shall be under no obligation to pay
any fees, costs, expenses or other charges of the Corporation, except for the
compensation of its officers, the compensation, if any, of its directors who are
affiliated with the Investment Manager, the rental for its office space, and the
ordinary and necessary office and clerical expenses relating to research,
statistical work and supervision of each Series' investment portfolio, to be
performed by the Investment Manager under paragraph 1 of this Agreement. Each
Series will pay all other 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 its
investment portfolio; fees and expenses of directors not affiliated with the
Investment Manager; governmental fees; interest charges; taxes and 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); costs and expenses of repurchase
and redemption of its shares; costs and expenses of preparing, printing and
mailing to shareholders stock certificates, proxy statements and materials,
prospectuses, reports and notices; costs of preparing reports to governmental
agencies; brokerage fees and commissions of every kind
5
<PAGE>
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 kind incurred by and on behalf of the
Corporation 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 Corporation in
any fiscal year exceed expense limitations applicable to the Corporation imposed
by state securities administrators, as such limitations may be lowered or raised
from time to time, the Investment Manger will reimburse the Corporation for any
such excess.
If the Investment Manager pays for other expenses of the Corporation or
furnishes without charge to the Corporation services the cost of which is to be
borne by the Corporation under this Agreement, the Investment Manager shall not
be deemed to have waived its rights under this Agreement to have the Corporation
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 Corporation 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 Articles of Incorporation (including any amendments
thereto) of the Corporation which shall in
6
<PAGE>
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 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 Corporation 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 Corporation 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
Board of Directors of the Corporation 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 directors, officers, stockholders, or other
representatives of the Corporation are or may be interested in the Investment
Manager, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, or other representatives of the Investment
Manager are or may be interested in the Corporation, except as otherwise may be
7
<PAGE>
provided in the Investment Company Act of 1940. The Investment Manager in acting
hereunder shall be an independent contractor and not any agent of the
Corporation.
9. This Agreement shall become effective upon the date hereof and shall
continue in force until January 30, 1994, and is renewable annually thereafter
by specific approval of the Board of Directors of the Corporation or by vote of
a majority of the outstanding voting securities of the Corporation; 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 Corporation, 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
Corporation upon 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.
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 Corporation 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
8
<PAGE>
the Corporation's shareholders. In the event of such withdrawal or the
termination of this Agreement, for any reason, the Corporation will, on the
written request of the Investment Manager, take such action as may be 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.
IN WITNESS WHEREOF, the Corporation 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 RESEARCH FUND, INC.
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
9
EXHIBIT 99B.8
GLOBAL CUSTODY AGREEMENT
THIS AGREEMENT made the 1st day of June, 1992, by and between LORD
ABBETT RESEARCH FUND, INC., a Maryland corporation (hereinafter called the
"Corporation"), and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a banking
corporation organized under the laws of the State of New York (hereinafter
called the "Custodian").
WITNESSETH:
WHEREAS, the Corporation desires that all securities and cash, if any,
now held by the Corporation, together with all such other securities and cash as
may hereafter be delivered or caused to be delivered by the Corporation to the
Custodian, shall be hereafter held and administered by the Custodian pursuant to
the terms of this Agreement; and
WHEREAS, the Corporation and the Custodian desire to provide for the
maintenance of foreign securities owned by the Corporation, and cash incidental
to transactions in such securities, in the custody of certain foreign banking
institutions and foreign securities depositories acting as sub-custodians in
conformity with the requirements of Rule 17f-5 of the rules and regulations
under the Investment Company Act of 1940, as amended (the "Act");
<PAGE>
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Corporation and Custodian agree as follows:
SEC. 1. Definitions.
------------
The words "Authorized Instructions" mean a communication given by an
Authorized Person and received by the Custodian in writing or by telephone,
facsimile transmission, telegram, teletype, cablegram or other teleprocess or
electronic instruction system which the Custodian believes in good faith to be
given by the Corporation or which are transmitted with proper testing or
authentication pursuant to terms and conditions specified in writing and
provided to the Corporation by the Custodian.
The words "Authorized Persons" mean those officers or agents of the
Corporation who have been designated by a certificate of the Corporation, a
certified copy of which has been filed with the Custodian, to act on behalf of
the Corporation in the performance of any acts that Authorized Persons may do
under this Agreement pursuant to such certificate. Such persons shall continue
to be Authorized Persons until such time as there has been filed with the
Custodian a certified copy of a certificate of the Corporation revoking the
authority of such persons.
The word "securities" as used herein includes stocks, bonds,
debentures, notes, evidences of indebtedness, evidences of interest, warrants
and other securities, irrespective of their
<PAGE>
form, the name by which they may be described, or the character or form of the
entities by which they are issued or created.
The words "Foreign Custodian" shall have the meaning assigned to such
words in Section 14 hereof.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Corporation by the Chairman,
President or a Vice President and the Secretary or the Treasurer or an Assistant
Secretary or an Assistant Treasurer.
The word "Depository" as used herein shall mean any "system" or
"person" contemplated by Section 17(f) of the Act in which the Custodian may,
under that Section and any rules, regulations or orders thereunder and under
Section 13 of this Agreement, deposit all or part of the securities of the
Corporation.
The word "receipt" whenever used in this Agreement in connection with
receipt of securities shall mean receipt by the Custodian of: (i) securities in
bearer form or in form for transfer satisfactory to the recipient; or (ii)
written or telegraphic advice from a Depository that securities have been
credited to the account of the Custodian or a Foreign Custodian, as the case may
be, at the Depository; or (iii) written or telegraphic advice from any branch of
the Custodian doing business in the United States and/or any foreign country
that such securities in bearer form or in form for transfer have been deposited
with it.
<PAGE>
The word "receipt" whenever used in this Agreement in connection with
receipt of payment by the Custodian shall mean receipt by the Custodian of: (i)
cash or check certified or issued by a bank (which term as used herein shall
include a Federal Reserve Bank), trust company, member of a national securities
exchange or a Depository; or (ii) written or telegraphic advice from a bank,
trust company, registered clearing agency or a Depository that funds have been
credited to the account of the Custodian or a Foreign Custodian, as the case may
be, at one or more of the foregoing or such advice from a registered clearing
agency or a Depository that funds will be so credited to the account of the
Custodian or a Foreign Custodian, as the case may be.
SEC. 2. Names, Titles and Signatures; Securities Devices.
--------------------------------------------------
The Corporation will furnish to the Custodian from time to time, whenever
any change occurs, an officers' certificate setting forth the names, titles and
signatures of its officers, the name of the transfer agent of its capital stock,
and the names and signatures of the officers, employees and agents thereof
entitled to sign documents hereunder. The Corporation will use its best efforts
to safeguard any test keys, identification codes or other security devices with
which the Custodian provides it.
SEC. 3. Receipt, and Disbursement of Money.
------------------------------------
A. The Custodian shall open and maintain a separate account or accounts in
the name of the Corporation with respect to assets belonging to each Series and
shall hold in such account or
<PAGE>
accounts all cash received by it for the account of the Corporation. The
Custodian shall make payments of cash to, or for the account of, the Corporation
from such cash accounts only (a) upon the purchase of securities for the
portfolio against receipt of such securities, (b) for the purchase or redemption
of shares of the Corporation; (c) for the payment of dividends, taxes,
management or supervisory fees, operating expenses or other liabilities
belonging to the Corporation, (d) for payments in connection with the
conversion, exchange or surrender of securities owned by the Corporation and
belonging to the Corporation, (e) for payments in connection with the return of
securities loaned by the Corporation or the reduction of cash collateral held by
the Custodian with respect to such securities, (f) for the transfer of funds to
a Depository or a Foreign Custodian, as the case may be, or (g) for other proper
corporate purposes pertaining to the Corporation. In making any such payment
pursuant to clause (a) above, the Custodian shall first receive Authorized
Instructions (which may be given by an officers' certificate) requesting such a
payment. If such Authorized Instructions pursuant to clause (a) above are not
given by an officers' certificate, then promptly following such payment, the
Corporation shall furnish to the Custodian an officers' certificate confirming
the request for such payment. In making any such other payment, the Custodian
shall first receive an officers' certificate requesting such payment and stating
the clause of this subsection A pursuant to which such payment is
<PAGE>
permitted, any additional evidence specifically called for in this subsection A,
and for the purposes of clause (g) above, the Custodian shall also receive a
resolution of the Board of Directors of the Corporation signed by an officer of
the Corporation and certified by its Secretary or an Assistant Secretary,
setting forth the purposes of such payment, declaring such purposes to be proper
corporate purposes pertaining to the Corporation, and naming the person or
persons to which such payment is to be made.
B. The Custodian is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received by the Custodian for
the account of the Corporation.
SEC. 4. Receipt of Securities.
----------------------
The Custodian agrees to hold in the separate account opened and maintained
for the Corporation all securities received by the Custodian for the account of
the Corporation which may now or hereafter be delivered to it by or for the
account of the Corporation. All securities of the Corporation in the custody of
the Custodian are to be held or disposed of, subject at all times to the
instructions of, the Corporation pursuant to the terms of this Agreement.
SEC. 5. Transfer, Exchange, Delivery, etc., of Securities.
-------------------------------------------------
The Custodian shall have sole power to release or deliver any securities of
the Corporation held by it pursuant to this Agreement. The Custodian shall
transfer, exchange or deliver securities held by it hereunder only (a) upon
sales of such securities for the account of the Corporation and receipt by
Custodian of payment therefor, provided that, in the case of sales of physical
securities within the United States, the Custodian may transfer or deliver
securities physically held by it in accordance with the customs prevailing in
the market for such securities under which such securities are delivered to a
broker (specified by the Corporation by Authorized Instructions as provided
below) for examination by such broker against such broker's receipt, (b) when
such securities are called, redeemed or retired or otherwise become payable, (c)
in exchange for or upon conversion into other securities or cash whether
pursuant to any plan of merger, consolidation, reorganization, recapitalization
or readjustment, or otherwise, (d) upon conversion of such securities pursuant
to their terms into other securities, (e) upon exercise of subscription,
purchase or other similar rights represented by such securities, (f) for the
purpose of exchanging interim receipts or temporary securities for definitive
securities, (g) for the purpose of redeeming in kind shares of the Corporation,
(h) for loans of such securities by the Corporation, or for the return of
securities held as collateral in connection with such loans, upon receipt by the
Custodian of security in form of cash or its equivalent equal to 100% of the
fair market value of such securities, (i) upon deposit of such securities owned
by the Corporation in a Depository or with a Foreign Custodian, or (j) for other
proper
<PAGE>
corporate purposes pertaining to the Corporation, but only, for purposes of this
clause (j), upon receipt of a resolution of the Board of Directors of the
Corporation, signed by an officer of the Corporation and certified by its
Secretary or Assistant Secretary, specifying the securities to be delivered,
setting forth the purposes for which such delivery is to be made, declaring such
purposes to be proper corporate purposes, and naming the person or persons, each
of whom shall be stated in such resolution to be an officer or employee of the
Corporation bonded against larceny or embezzlement, to whom delivery of such
securities shall be made. In making any such transfer, exchange or delivery
pursuant to clause (a) above, the Custodian shall first receive Authorized
Instructions (which may be given by an officers' certificate) requesting such
transfer, exchange or delivery. If such Authorized Instructions pursuant to
clause (a) above are not given by an officers' certificate, then promptly
following such transfer, exchange and delivery, the Corporation shall furnish to
the Custodian an officers' certificate requesting such transfer, exchange or
delivery. In making any such other transfer, exchange or delivery, the Custodian
shall first receive an officers' certificate requesting such transfer, exchange
or delivery and stating the clause of this Section 5 pursuant to which such
transfer, exchange or delivery is permitted, and any additional evidence
specifically called for in this Section 5. For the purposes of clause (h) above,
the officers' certificate shall also identify the securities to be delivered and
shall state the loan agreement under which the delivery is to be made, the date
of delivery, the name of the borrower and the amount and description of
collateral to be received in connection therewith.
SEC. 6. Custodian's Acts Without Instructions.
--------------------------------------
Unless and until the Custodian receives an officers' certificate to the
contrary, the Custodian shall:
(a) Take such steps as may reasonably be necessary to secure or
otherwise prevent the loss of rights relating to any securities held by it for
the account of the Corporation, provided that the Custodian's (i) timely
monitoring of investment data provided by one or more recognized international
investment data services identified to the Corporation and whose data pertains
to each relevant market and (ii) prompt action in respect thereof will be deemed
to fulfill the Custodian's obligations under this paragraph (a) with respect to
corporate actions;
(b) Present for payment all coupons and other income items held by it
for the account of the Corporation which call for payment upon presentation, and
hold the cash received by it upon such payment for the account of the
Corporation, any advance of the collections of funds or other property paid or
distributed with respect to any securities shall be made subject to final
payment.
(c) Collect interest and cash dividends received, and other
income of any kind, with notice to the Corporation, for the
<PAGE>
account of the Corporation;
(d) Hold for the account of the Corporation all stock dividends, rights
and similar securities issued with respect to any securities held by it
hereunder; and,
(e) Execute as agent on behalf of the Corporation all necessary
ownership certificates required by the Internal Revenue Code or the Income Tax
Regulations of the United States Treasury Department now or hereafter in effect,
inserting the Corporation's name on such certificates as the owner of the
securities covered thereby, to the extent it may lawfully do so.
SEC. 7. Registration of Securities.
--------------------------
The Custodian shall register all securities, except such as are in
bearer form or held by a Depository or a Foreign Custodian (except as otherwise
directed by an officers' certificate), in the name of a registered nominee of
Custodian as defined in the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder or in any provision of any subsequent
Federal Tax Law exempting such transaction from liability for stock transfer
taxes and shall execute and deliver all such certificates in connection
therewith as may be required by such laws or Regulations or under the laws of
any State. The Corporation will hold any such nominee harmless from any
liability as a holder of record of such securities. The Custodian shall use its
best efforts to the end that the specific securities held by it hereunder shall
be at all times identifiable. The Corporation shall from time to time furnish to
<PAGE>
the Custodian appropriate instruments to enable the Custodian to hold or deliver
in proper form for transfer, or to register in the name of its registered
nominee, any securities which it may hold for the account of the Corporation and
which may from time to time be registered in the name of the Corporation.
SEC. 8. Voting and Other Action.
------------------------
Neither the Custodian nor any nominee of the Custodian shall vote any
of the securities held hereunder by or for the account of the Corporation,
except in accordance with the instructions contained in an officers'
certificate. The Custodian shall execute and deliver, or cause to be executed
and delivered, to the Corporation all notices, proxies and proxy soliciting
materials with relation to such securities, but without indicating the manner in
which such proxies are to be voted.
SEC. 9. Transfer Taxes and other Disbursements.
--------------------------------------
The Corporation shall pay or reimburse the Custodian from time to time for
any transfer taxes payable upon transfers of securities made hereunder, and for
all other necessary and proper disbursements and expenses made or incurred by
the Custodian in the performance of this Agreement. The Custodian shall execute
and deliver such certificates in connection with securities delivered to it or
by it under this Agreement as may be required under the provisions of the
Internal Revenue Code and any Regulations of the Treasury Department issued
thereunder, or under the laws of any State, to exempt from taxation any
exemptible transfers and/or deliveries of any such securities.
SEC. 10. Custodian's Liability.
---------------------
In taking any action called for by this Agreement, the Custodian shall
be entitled in good faith to rely upon the officers' certificate (or, in the
case of Sections 3A. (a) and 5(a), Authorized Instructions) and other evidence
specifically called for by the appropriate section of this Agreement. The
Corporation, its successors and assigns shall at all times fully indemnify and
save harmless the Custodian, its successors and assigns, from any and all
liability whatsoever which may arise out of the obligation of the Custodian to
perform the things to be done by it under this Agreement. Nothing herein shall
exempt the Custodian from liability due to its own negligence or willful
misconduct or the negligence or willful misconduct of a Foreign Custodian or
DTC. The Custodian is not under any duty under this Agreement to provide the
Corporation with investment advice or to supervise (in an advisory capacity) its
investments.
SEC. 11. Reports.
--------
The Custodian shall advise the Corporation with respect to transactions
for the account of the Corporation and with respect to each Series and shall
report as to the composition of the Corporation's assets at such times as the
Corporation shall reasonably request. The books and records of the Custodian
pertaining to its actions under this Agreement shall be open to inspection and
audit at reasonable times by the Corporation's officers and auditors. The
Custodian shall also furnish
<PAGE>
information as reasonably requested by the Corporation in order to enable the
Corporation to comply with applicable laws and regulations. Such information
shall include, but not be limited to, identification (quarterly and as such
information is received) of all non-United States entities having actual
physical possession of cash and securities of the Corporation.
SEC. 12. Custodian Compensation.
-----------------------
The Custodian shall be paid as compensation for its services pursuant to
this Agreement such compensation as may from time to time be agreed upon between
the two parties.
SEC. 13. Depositories
------------
The parties agree that, as of the date of this Agreement, the
Depositories in which deposits of securities may be made are The Federal
Reserve/Treasury Book Entry System (the "System"), Depository Trust Company
("DTC") and Euro-clear, a clearance system for internationally traded securities
organized and operated by the Custodian (the "Euro-clear System"), subject to
the terms and conditions of this Section 13 and Section 14. Other Depositories
may be used under this Agreement if both parties consent in writing to the use
thereof; any such use shall be subject to the terms and conditions of this
Section 13 applicable to the System, DTC and the Euro-clear System except to the
extent, if any, to which such terms and conditions are changed in any such
consent or consents.
In using Depositories under this Agreement, the parties will comply with
the terms and conditions of Rule 17f-4 and, in the case of the Euro-clear
System, Rule 17f-5 under the Act, and such terms and conditions the parties
hereto agree, and such terms and conditions shall supersede conflicting
provisions of this Agreement. Nothing herein shall be deemed to require that the
Custodian ascertain, as a condition to the use of the System, DTC or the
Euro-clear System, that any required action has been taken by the Board of
Directors of the Corporation. Notwithstanding the use of any Depository or
Foreign Custodian hereunder, the securities and the funds of the Corporation at
all times will be deemed to be in the custody of, and maintained by, the
Custodian, and the Custodian will indemnify and save harmless the Corporation
for any losses (i) caused by the use of a Depository (other than DTC) or (ii)
caused by the negligence or willful misconduct of a Foreign Custodian or DTC.
If and to the extent that a Depository permits the withdrawal of a
security from it in certificate form and the Corporation requires a certificate
for making a loan or otherwise, the Custodian shall take all necessary and
appropriate action to obtain such certificate upon receipt of an officers'
certificate requesting the same.
The Corporation has agreed to use DTC's Institutional Delivery (ID)
system which will provide it with broker trade confirmations of certain
securities transactions which it has entered into. After comparing the trade
data with each confirmation, the Corporation shall affirm to DTC electronically
<PAGE>
all trades whose confirmations accurately reflect the trades which it has
entered into, such affirmations constituting its instructions to deliver or
receive portfolio assets of the Corporation. Upon receipt of each affirmation,
DTC has been instructed to send appropriate instructions to the Custodian in the
form of an "Eligible Trade Report". In the event a broker's trade confirmation
does not accurately reflect the transaction in question, the Corporation shall
not affirm the transaction in question in which event DTC has been instructed
not to send the Custodian instructions with respect to such trade confirmation.
Accordingly, anything in this agreement to the contrary
notwithstanding, whenever securities transactions of the Corporation are to be
settled through the DTC ID system, or through a similar depository system, the
Custodian shall be authorized to act in accordance with, and shall be entitled
to rely on, and be protected in acting on, those instructions received by it on
the Eligible Trade Report through such depository system to the same extent as
if the information contained in such instructions was given in an officers'
certificate, signed by officers of the Corporation. In the event that such
depository system for any reason does not furnish the Custodian with an Eligible
Trade Report, the Corporation shall provide the Custodian with an officers'
certificate with the same information such Report otherwise would have
contained. SEC. 14. Employment of Subcustodians; Euro-clear Subcustodians.
(a) The Corporation hereby authorizes the Custodian to employ as
subcustodians for securities and other assets owned by the Corporation and
maintained outside the United States, the foreign banking institutions which are
"eligible foreign custodians" as such term is defined in paragraph (c)(2) of
Rule 17f-5 under the Act and which are listed in Exhibit A attached hereto (when
such entities are employed by the Custodian pursuant to the terms hereof,
"Foreign Custodians"). The Foreign Custodians may hold securities and other
assets of the Corporation in the countries set forth opposite their respective
names in Exhibit A. As part of its use of the Euro-clear System, securities and
other assets owned by the Corporation may also be held in the countries and by
the banks listed on Exhibit A as Euro-clear Subcustodians (the "Euro-clear
Subcustodians") which are "eligible foreign custodians" as so defined or is an
overseas branch of a "qualified U.S. bank" as defined in paragraph (c)(3) of
Rule 17f-5 under the Act.
(b) Exhibit A may be expanded from time to time pursuant to one or more
letter agreements approved by the Corporation's Board of Directors. If the
Corporation advises the Custodian that a majority of the Board of Directors of
the Corporation has determined that (i) a foreign banking institution or the
Euro- clear Subcustodian listed on Exhibit A hereto, as the same may be
supplemented as provided above, or the Euro-clear System, may no longer be
considered an "eligible foreign custodian" under Rule 17f-5 under the Act, (or,
in the case of an overseas branch of a U.S. bank, if such U.S. bank may no
longer be considered a
<PAGE>
"qualified U.S. bank" under Rule 17f-5 under the Act) and is not the subject of
an exemptive order of the Securities and Exchange Commission under the Act, or
(ii) continuance of the arrangement with any such entity would not otherwise be
consistent with the best interests of the Corporation and its shareholders, the
Corporation's assets shall be withdrawn from the care of such foreign banking
institution or such Euro-clear Subcustodian or the Euro-clear System (or such
overseas branch of a U.S. bank), as the case may be, as soon as reasonably
practicable, and in any event within 180 days of the date the Corporation make
such determination.
(c) Notwithstanding the use hereunder of a Foreign Custodian or a
Depository, the Custodian will at all times maintain a separate account or
accounts in the name of the Corporation and shall maintain such account or
accounts for any and all cash and/or securities which are from time to time
received for the account of the Corporation and which are held by a Foreign
Custodian or a Depository pursuant to the terms hereof.
(d) The Custodian's employment of any Foreign Custodian under this
Agreement shall be governed by a written agreement substantially in the form
attached hereto as Exhibit B.
(e) The use of the Euro-clear System under this Agreement shall be in
accordance with the Terms and Conditions Governing the Use of Euro-clear, as
supplemented or amended from time to time (the "Euro-clear Terms"), a current
copy of which document is attached hereto as Exhibit C, and with Rule 17f-5
under the Act.
(f) The Custodian (A) will confirm to the Corporation in writing by
February 1 in each year that each Foreign Custodian and each Euro-clear
Subcustodian continues to be an "eligible foreign custodian" as defined in Rule
17f-5 under the Act and that the provisions contained in paragraphs (d) and (e)
above are being complied with and (B) will advise the Corporation immediately in
writing if any Foreign Custodian or Euro-clear Subcustodian ceases to be an
"eligible foreign custodian" as so defined (or, in the case of a Euro-clear
Subcustodian which is an overseas branch of a U.S. bank, if such bank ceases to
be a "qualified U.S. bank" as defined in Rule 17f-5 under the Act) or if any
such provision is not being complied with. The Custodian will also advise the
Corporation promptly of any significant amendment to any subcustodian agreement
with any Foreign Custodian or the Euro-clear Terms, if it learns of any
significant change in the insurance maintained by any Foreign Custodian, the
Euro-clear System or any Euro-clear Subcustodian from the insurance previously
described by the Custodian to the Corporation, or if it learns of any
significant change in the substance of any of the Opinions of Counsel obtained
by the Custodian in connection with its employment of Foreign Custodians
(including, without limitation, changes with respect to (i) assets of the
Corporation being subject to any right, charge, security, interest, lien or
claim, or (ii) beneficial ownership of securities), from the description of such
Opinions of Counsel furnished to the Corporation.
<PAGE>
(g) Until the Custodian receives an officers' certificate to the contrary,
the Custodian will instruct each Foreign Custodian to:
(1) deposit all cash received for the benefit of the
Corporation in a deposit account maintained by the Foreign Custodian in the name
of the Custodian and to make payments of such cash only to the extent the
Custodian is authorized to make such payments pursuant to Section 3 of this
Agreement;
(2) transfer, exchange or deliver securities owned by the
Corporation only to the extent the Custodian is authorized to make such
transfers, exchanges or deliveries pursuant to Section 5 of this Agreement,
provided that the Foreign Custodian may make delivery of securities and accept
payment therefor in accordance with the customs prevailing in the particular
market or among securities dealers in such market; provided further that if such
customs include, in the case of delivery of physical securities, delivery
against receipt of payment therefor, the Custodian will instruct the Foreign
Custodian to make delivery in that manner;
(3) vote securities owned by the Corporation only in
accordance with the instructions contained in an officers' certificate as
provided in Section 8 of this Agreement;
(4) maintain securities owned by the Corporation with the Euro
-clear System only in accordance with the provisions of this Section 14 and
maintain securities owned by the Corporation with no securities depository or
clearing agency other than the Euro-clear System except to the extent other
Depositories have been consented to pursuant to Section 13 of this Agreement;
(5) take such steps (to be specified in such instructions) as
may reasonably be necessary to secure or otherwise prevent the loss of rights
relating to any securities owned by the Corporation, provided that it shall be
understood that the Custodian's (i) timely monitoring of investment data
provided by one or more recognized international investment data services
identified to the Corporation and whose data pertains to each relevant market
and (ii) prompt instructions to the appropriate Foreign Custodian in respect
thereof will be deemed to fulfill the Custodian's obligations under this
paragraph;
(6) promptly notify the Custodian upon receiving notices or
reports of corporate actions affecting any securities owned by the Corporation;
(7) on a timely basis, present for payment maturing
obligations and those called for redemption to the extent that the Foreign
Custodian receives notice of such opportunities for payment and hold monies
received upon presentation of such maturing obligations for credit to the
account maintained pursuant to paragraph (g)(1) of this Section 14;
(8) execute in the name of the Custodian such ownership and
other certificates as may be required to obtain payment in respect of any
securities owned by the Corporation;
(9) accept, open and act appropriately with respect to
all mail directed to the Corporation or the Custodian in care of
<PAGE>
the Foreign Custodian relating to any securities or cash
belonging to the Corporation;
(10) disclose the Corporation's name, address and securities
position to the issuers of securities belonging to the Corporation when
requested to do so by such issuers; and
(11) deal with fractional interests received by the Foreign
Custodian as a result of stock dividends by buying the additional fractional
interest needed to obtain a full share.
(h) Securities owned by the Corporation may be registered
in the name of the Foreign Custodian's nominee to the same extent as set forth
in Section 7 hereof. The Corporation will hold any such nominee harmless from
any liability as a holder of record of such securities.
Sec. 15. Termination or Assignment of Agreement.
---------------------------------------
This Agreement may be terminated by the Corporation on thirty days'
notice or by the Custodian on sixty days' notice given in writing and sent by
registered mail to the Custodian at 23 Wall Street, New York, N.Y. 10015, or to
the Corporation, at 767 Fifth Avenue, New York, N.Y. 10153, as the case may be.
Upon any termination of this Agreement, including any termination pursuant
to Section 16 hereof, the Custodian shall not be required to make any delivery
or payment of cash and securities held by it hereunder until full payment shall
have been made by the Corporation of all liabilities constituting a charge on or
against the cash and securities held by the Custodian or on or against the
Custodian, and until full payment shall have been made to the Custodian of all
its fees, compensation, cost and expenses, or until the Custodian shall have
been furnished with security and indemnity satisfactory to it against any
liability, obligation, fees, compensation, cost or expense in connection with
this Agreement or on account of any action taken or omitted by the Corporation
or its officers or directors under this Agreement.
This Agreement may not be assigned by the Custodian without the consent of
the Corporation, authorized or approved by a resolution of its Board of
Directors.
SEC. 16. Successors.
-----------
A. Upon any termination of this Agreement, or in case at any time the
Custodian shall tender its resignation or shall be removed or dissolved, or
otherwise shall become incapable of acting, or in case control of the Custodian
or of its offices shall be taken over by any public officer or officers, (a) the
Corporation, by an officers' certificate furnished to the Custodian, may (i)
designate a successor, to whom the Custodian shall thereupon deliver all cash
and securities of the Corporation held by it, or held in its name by a
Depository, or held by a Foreign Custodian, or (ii) specify the names of the
persons or entities to whom all cash and securities of the Corporation shall be
delivered or paid, or (iii) certify that the stockholders of the Corporation
have duly voted that it function without a qualified bank or trust company to
hold its cash and securities and request delivery of all cash and securities to
it,
<PAGE>
in which case the Custodian shall thereupon deliver to the Corporation all cash
and securities held by it or held in its name by a Depository, or held by a
Foreign Custodian, or (b) in the absence of any officers' certificate pursuant
to (i), (ii) or (iii) within a period of 60 days after such resignation,
removal, dissolution, incapacity or taking over, the Custodian may deliver any
cash and securities of the Corporation held by it or held in its name by a
Depository or held by a Foreign Custodian to a bank or trust company in the City
of New York, having a capital, surplus and undivided profit aggregating not less
than $5,000,000 selected by it, such cash and securities to be held subject to
the same terms as those set forth in this Agreement. Any successor appointed by
the Corporation or selected by the Custodian shall immediately and without
further act be superseded by a successor appointed by the holders of not less
than a majority of the shares of the capital stock of the Corporation at the
time outstanding.
B. Any bank or trust company in or into which the Custodian or any
successor hereunder may be merged or converted, or with which it or any such
successor may be consolidated, or any bank or trust company resulting from any
merger, conversion or consolidation to which the Custodian or any such successor
shall be a party, or any bank or trust company succeeding to the business of the
Custodian or any such successor, shall be substituted as successor under this
Agreement and any amendments thereof and all agreements hereunder without the
execution of any instrument or any further act on the part of the Corporation or
any such successor, provided such bank or trust company be a national banking
association or trust company or banking corporation organized under the laws of
the United States of any State thereof and have a capital surplus and undivided
profits aggregating not less than $5,000,000.
C. Any successor resulting from the provisions of subsections A or B above
shall be vested with all the powers, duties and obligations of its predecessor
under this Agreement and any amendments thereof and agreements hereunder and
shall succeed to all the exemptions and privileges of its predecessor under this
Agreement and any amendments thereof and agreements hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and their respective corporate seals to be affixed hereto as of the
date first above written by their respective officers thereunto duly authorized.
<PAGE>
Executed in four counterparts, each of which is an original.
LORD ABBETT RESEARCH FUND, INC.
By /s/ Kenneth B. Cutler
--------------------------
Vice President
(Seal)
Attest:
/s/ Thomas F. Konop
---------------------
Assistant Secretary
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
BY /s/ Stella Milano
---------------------------
Vice President
(Seal)
Attest:
Assistant Secretary
<PAGE>
STATE OF )NEW YORK
: ss.:
COUNTY OF)NEW YORK
On this 1st day of June, 1992, before me personally came Kenneth B.
Cutler to me known, who, being by me duly sworn, did depose and say that he
resides in Bronxville, New York, that he is a Vice-President of LORD ABBETT
RESEARCH FUND, INC., the Corporation described in and which executed the
foregoing instrument; that he knows the seal of said Corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said Corporation, and that he signed his name
thereto by like order.
/s/ Lydia Guzman
______________________
Notary Public
<PAGE>
STATE OF )NEW YORK
: ss.:
COUNTY OF)NEW YORK
On this 2nd day of June, 1992, before me personally came Stella Milano
to me known, who, being by me duly sworn, did depose and say that she resides at
Huntington, New York, that she is a Vice-President of Morgan Guaranty Trust
Company of New York, the Corporation described in and which executed the
foregoing instrument; that she knows the seal of said Corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said Corporation, and that she signed her
name thereto by like authority.
/s/ Allen R. Hayes, JR.
------------------------
Notary Public
<PAGE>
Exhibit C
Terms and
Conditions
Governing Use of Euro-clear
<PAGE>
TABLE OF CONTENTS Page
1. Definitions 1
2. Securities Clearance Accounts and Cash Accounts 3
3. Operating Procedures 3
4. Holding of Securities; Terms of Custody 3
5. Payments with Respect to Securities 8
6. Effecting Transactions 9
7. Blocking of Securities or Cash 10
8. Receipt of Securities 11
9. Reversal of Entries 11
10. Statements to be Rendered by Morgan Guaranty Brussels 11
11. Other Depositaries; Other Clearance Systems 12
12. Duties and Liabilities of Morgan Guaranty 13
13. Fees and Expenses 16
14. Termination of Participation; Resignation of Participants 16
15. Certain Responsibilities and Liabilities of Participants 18
16. Special Rules Applicable to Cash Accounts 20
17. Securities Losses 23
18. Entire Agreement; Benefit of Terms and Conditions 27
19. Modifications; Waivers 28
20. Notices 28
21. Maintenance of Records; Limitation on Actions 28
22. Governing Law; Jurisdiction; Evidence 29
<PAGE>
The following Terms and Conditions govern use of the Euro-clear System.
1. Definitions
When used herein, unless the context otherwise requires:
(a) "Cash Account" means a current account (which may be divided into
a number of sub-accounts, denominated in U.S. dollars or in any
other currency or Composite Currency Unit, permitted by the
Operating Procedures) opened in connection with the Euro-clear
System by Morgan Guaranty Brussels on its books in the name of a
Participant or in the name of an Other Clearance System selected
pursuant to Section 11(b).
(b) "Component Currency" means one of the currencies which is taken
into account in determining the value of a Composite Currency
Unit.
(c) "Composite Currency Unit" means a unit consisting of the
aggregate of specified amounts of Component Currencies, as set
forth in the Operating Procedures.
(d) "Depositary" means any office of Morgan Guaranty or of an Other
Depositary at which securities are held in custody pursuant to
Section 4(b)(i).
(e) "Euro-clear System" means the clearance system for
internationally traded securities operated under contract by
Morgan Guaranty Brussels.
(f) "Morgan Guaranty" means Morgan Guaranty Trust Company of New
York.
(g) "Morgan Guaranty Brussels" means the Brussels office of Morgan
Guaranty.
(h) "Operating Procedures" means the Operating Procedures established
by Morgan Guaranty Brussels in accordance with Section 3 (and any
document referred to therein as being supplemental thereto), as
the same may be amended from time to time.
(i) "Other Clearance System" means any entity operating a system for
the holding of securities or the clearance or the settlement of
securities transactions.
(j) "Other Clearance System Custodian" has the meaning set forth in
Section 11(c).
(k) "Other Depositary" has the meaning set forth in Section
11(a)(i).
<PAGE>
(l) "Participant" means any company, central bank, government,
partnership, individual or legal entity, which has entered into
an agreement to participate in the Euro-clear System as a
Participant under these Terms and Conditions and which has
furnished other documentation in a form required by Morgan
Guaranty Brussels, including those in connection with the
operation of its Securities Clearance Account and Cash Account.
The term "Participant" shall also include those using the
Euro-clear System on a temporary basis in accordance with the
Operating Procedures ("Temporary Participants"), but only for
that period during which (and the circumstances under which) they
are permitted by such Operating Procedures to use the Euro-clear
System.
(m) "Securities Clearance Account" means a securities clearance
account opened in connection with the Euro-clear System by Morgan
Guaranty Brussels on its books in the name of a Participant or in
the name of an Other Clearance System referred to in Section
11(b).
(n) "Securities Loss" has the meaning set forth in Section 17(a).
(o) "Specialized Depositary" has the meaning set forth in Section
4(c).
(p) "Terms and Conditions" means these Terms and Conditions, as the
same may be amended or supplemented pursuant to Section 19.
2. Securities Clearance Accounts and Cash Accounts
Morgan Guaranty Brussels shall open a Securities Clearance Account and a
Cash Account for each Participant. Any Participant may with the consent of
Morgan Guaranty Brussels open additional Securities Clearance Accounts and
related Cash Accounts.
3. Operating Procedures
Operating Procedures have been established for the Euro-clear System. The
<PAGE>
Operating Procedures, which shall be supplemental hereto and shall
constitute an integral part hereof, set forth detailed rules and procedures
with respect to the functioning of the Euro-clear System. Morgan Guaranty
Brussels may amend the Operating Procedures at any time by notice to the
Participants. Each Participant will, without prejudice to its rights under
Section 14(b), be deemed to have agreed to have accepted any such amendment
(a) effective immediately, in the case of an amendment not
adversely affecting Participants, and
(b) effective ten business days after despatch thereof, in
the case of any other amendment.
In the event of any conflict between the Operating Procedures and the numbered
Sections 1 through 22, inclusive, of these Terms and Conditions, the latter
shall prevail.
4. Holding of Securities; Terms of Custody
(a) The provisions of the Belgian Royal Decree No. 62 dated November 10, 1967
Facilitating the Circulation of Securities (the "Royal Decree") apply to
the extent applicable to securities held in the Euro-clear System and these
Terms and Conditions have effect as thus supplemented by the provisions of
the Royal Decree. Each Participant and holder of a Securities Clearance
Account agrees that securities of any issue held for its account in the
Euro-clear System may be treated by Morgan Guaranty Brussels as fungible
with all other securities of the same issue which are on deposit with
Morgan Guaranty Brussels subject to the Royal Decree. No Participant or
holder of a Securities Clearance Account shall have any right to any
specific securities certificates, but each Participant and each such holder
will, instead be entitled, subject to these Terms and Conditions and the
Operating Procedures, to transfer (by book entry), to deliver or to
repossess from Morgan Guaranty Brussels an amount of securities of any
issue equivalent to the amount credited to any Securities Clearance Account
in its name, without regard to the certificate numbers of the securities
certificates, and Morgan Guaranty's obligation to any such Participant or
any such holder with respect to such securities will be limited to
effecting such a transfer, delivery or repossession.
(b) Securities held in the Euro-clear System shall be held in the vaults of
Morgan Guaranty Brussels or of another office of Morgan Guaranty, except
that
(i) Morgan Guaranty may hold any of such securities with any Other
Depositary pursuant to arrangements requiring such Other Depositary
to hold such securities
(y) in its own vaults or
<PAGE>
(z) with any subcustodian in conformity with the practice of
such Other Depositary or, directly or indirectly through
such a subcustodian, with any Other Clearance System (such
subcustodian or Other Clearance System to be approved by
Morgan Guaranty Brussels) and upon such terms and conditions
as may be customary for such subcustodian or Other Clearance
System (or upon such other terms and conditions as may be
approved by Morgan Guaranty Brussels),
it being understood that any securities so deposited or held by Morgan
Guaranty are to be carried in a customers securities account of Morgan
Guaranty Brussels with such Other Depositary,
(ii) Morgan Guaranty may hold any of such securities with any subcustodian
in conformity with the practice of Morgan Guaranty or, directly or
indirectly through such a subcustodian, with any Other Clearance
System (whether or not pursuant to arrangements referred to in Section
11(b)), provided that the terms and conditions upon which such
subcustodian or Other Clearance System is to act are the customary
terms and conditions of such subcustodian or Other Clearance System
(or shall have been approved by Morgan Guaranty),
(iii) any Other Clearance System with which securities are held may, in
turn, redeposit or hold securities with one or more subcustodians or
depositaries used by it without the requirement of approval of Morgan
Guaranty,
(iv) Morgan Guaranty may in connection with arrangements entered into
pursuant to Section 11(b)(i) hold any of such securities with any
Other Clearance System Custodian under arrangements requiring such
Other Clearance System Custodian to hold such securities for the
account of Morgan Guaranty Brussels upon such terms and conditions.
(x) as may exist between an Other Clearance System selected
pursuant to Section 11(b) and such Other Clearance System
Custodian, or
(y) as may be the customary terms and conditions of such
Other Clearance System Custodian, or
(z) as Morgan Guaranty Brussels shall otherwise approve in
the arrangements between it and such Other Clearance System
(or such Other Clearance System Custodian), and
(v) securities may from time to time be in transit in connection with the
operations of the Euro-clear System. Securities held at any office of
Morgan Guaranty or by any Other
<PAGE>
Depositary, Other Clearance System, Other Clearance System Custodian,
subcustodian or depositary pursuant to this Section 4(b) may be held on a
fungible or non-fungible basis.
(c) Morgan Guaranty Brussels may with respect to any issue of securities
designate one or more Depositaries as the Depositary or Depositaries for
securities of such issue held in the Euro-clear System, and may terminate
any such designation. So long as a Depositary is so acting with respect to
any such issue of securities, it shall be a "Specialised Depositary" for
such issue. The designation of a Depositary as a Specialised Depositary
shall not preclude securities from being held
(i) with any subcustodian or Other Clearance System pursuant to
Section 4(b)(i) or (ii) or
(ii) with any Other Clearance System Custodian pursuant to
Section 4(b)(iv).
Morgan Guaranty Brussels will give periodic notices to Participants of any
Specialised Depositaries for the various issues of securities.
(d) Unless otherwise provided in the Operating Procedures
(i) a security shall be deemed to be held in the Euro-clear System
(v) if it is standing to the credit of a Securities Clearance
Account, or
(w) if it has been physically received by a Depositary for
credit to a Securities Clearance Account (whether or not it
is held in any temporary or other interim account referred
to in the Operating Procedures) unless it may be refused by
the Depositary initially receiving the security for deposit
or by the relevant Specialised Depositary, if any, as not
being in the form, or for not satisfying any of the
conditions, prescribed by the Operating Procedures, or
(x) if it has been tendered to Morgan Guaranty Brussels by an
Other Clearance System referred to in Section 11(b) for
credit to a Securities Clearance Account and the conditions,
if any, prescribed by the Operating Procedures with respect
to the acceptance of such tender by Morgan Guaranty Brussels
have been satisfied (whether or not it is held in any
temporary or other interim account referred to in the
Operating Procedures), or
(y) if it has been debited to a Securities Clearance Account
pending physical delivery by a Depositary unless the risk of
loss with respect to such delivery has in accordance with
the Operating Procedures passed to the intended recipient,
or
<PAGE>
(z) if it has been debited to a Securities Clearance Account
pending the tender of such security to, and its acceptance
by, an Other Clearance System referred to in Section 11(b),
and
(ii) a security held in the Euro-clear System shall (subject to any adjustments
contemplated by the Operating Procedures) be deemed to be held by the
holder of the Securities Clearance Account
(v) to which it is standing to the credit,
(w) for the credit to which it was physically received by a
Depositary (whether or not it is held in any temporary or
other interim account referred to in the Operating
Procedures) unless it may be refused as specified in Section
4(d)(i)(w),
(x) for the credit to which it was tendered to Morgan Guaranty
Brussels by an Other Clearance System referred to in Section
11(b) if any conditions prescribed by the Operating
Procedures with respect to the acceptance of such tender by
Morgan Guaranty Brussels have been satisfied (whether or not
it is held in any temporary or other interim account
referred to in the Operating Procedures),
(y) to which it shall have been debited pending physical
delivery by a Depositary until the risk of loss with respect
to such physical delivery has in accordance with the
Operating Procedures passed to the intended recipient, or
(z) to which it shall have been debited pending the tender of
such security to, and its acceptance by, an Other Clearance
System referred to in Section 11(b) unless the provisions of
Section 4(d)(ii)(v) are also applicable to such security.
5. Payments with Respect to Securities
(a) All payments of principal, premium, interest or dividends received by
Morgan Guaranty Brussels with respect to securities credited to any
Securities Clearance Accounts will be distributed to the holders of
Securities Clearance Accounts on the basis of the amounts of such
securities credited thereto in such manner and on such dates as may be
specified in the Operating Procedures.
<PAGE>
(b) Morgan Guaranty Brussels shall take such steps as may be specified in the
Operating Procedures to have notice of any due date of any payment with
respect to
(i) any security credited to any Securities Clearance Account upon its
maturity and
(ii) any coupons pertaining to any such security.
If Morgan Guaranty Brussels in its capacity as operator of the Euro-clear
System shall have such notice, Morgan Guaranty will (in the case of
securities held by it), and Morgan Guaranty Brussels will instruct each
Other Depositary (in the case of securities held by it) to, use its best
efforts to, surrender the securities or coupons held by it on such due date
for payment at any place where payment may be made or comply with such
other formalities as will result in such payment.
(c) Morgan Guaranty Brussels shall take such steps as may be specified in
the Operating Procedures to have notice of any call for redemption in whole
or in part of any issue of securities credited to any Securities Clearance
Accounts. If Morgan Guaranty Brussels in its capacity as operator of the
Euro-clear System shall have notice of any call for redemption in whole or
in part of any issue of securities held in the Euro-clear System, then
(except as otherwise provided in the Operating Procedures):
(i) in the case of redemption in part, Morgan Guaranty Brussels will, in
such manner as it shall deem fair and appropriate, determine to which
of such Securities Clearance Accounts, and in what amounts, such
securities to be so redeemed will be allocated,
(ii) Morgan Guaranty Brussels will notify each holder of such a Securities
Clearance Account of the amount of securities standing to the credit
thereof which are to be redeemed, and
(iii)unless contrary instructions are received from the holder of such a
Securities Clearance Account in accordance with the Operating
Procedures, Morgan Guaranty Brussels will, subject to rules and
practices of any Other Clearance System, or Other Clearance System
Custodian, depositary or subcustodian with which securities may be
held or redeposited pursuant to Section 4(b), in a timely manner use
its best efforts to surrender (or will instruct a Depositary to use
its best efforts to surrender) such securities for payment at any
place where payment may be made or comply with such other formalities
as will result in such payment.
<PAGE>
6. Effecting Transactions
(a) Transactions between Participants, and transactions between
Participants and non-Participants, may be effected in accordance with these
Terms and Conditions and the Operating Procedures, subject, in all events,
to
(i) sufficient securities standing to the credit of any Securities
Clearance Account being available for any debit to be made to such
Securities Clearance Account and
(ii) sufficient funds or provision for such funds in any Cash Account being
available for any debit to be made to such Cash Account.
(b) If the available securities standing to the credit of a Securities
Clearance Account or the available funds or provision for such funds in a
Cash Account to which any debits are to be made in accordance with these
Terms and Conditions and the Operating Procedures is sufficient to permit
the carrying out of some but less than all such debits, then, except as
otherwise specified in the Operating Procedures, Morgan Guaranty Brussels
may determine, in its sole discretion without liability to any Participant,
which debits are to be so made.
7. Blocking of Securities or Cash
Morgan Guaranty Brussels will not be required to effect any transaction (or take
any other action) at the demand or upon the instructions of any Participant
pursuant to these Terms and Conditions or pursuant to the Operating Procedures
(a) to the extent that the same would
(i) violate any applicable law, decree, regulation or order of any
government or governmental body (including any court or tribunal) or
(ii) be contrary to any agreement made with Morgan Guaranty by such
Participant or
(b) in such other circumstances as may be specified in the Operating
Procedures.
Morgan Guaranty shall not have any liability for any loss or damage suffered by
any Participant as a result of the operation of the foregoing.
<PAGE>
8. Receipt of Securities
In the case of any receipt at a Depositary of securities to be held in the
Euro-clear System, Morgan Guaranty will, and Morgan Guaranty Brussels will
instruct any Other Depositary (and the relevant Specialised Depositary, if any)
to, use reasonable efforts not to accept any securities which are not in the
form, or which do not satisfy the conditions, prescribed by the Operating
Procedures. Subject to the foregoing, Morgan Guaranty shall have no liability
for losses incurred by any Participant or any other person as a result of the
receipt or acceptance of fraudulent, forged or invalid securities (or securities
which are otherwise not freely transferable or deliverable without encumbrance
in any relevant market) for credit to a Securities Clearance Account.
9. Reversal of Entries
Morgan Guaranty Brussels reserves the right to reverse any erroneous credit or
debit to any Cash Account or Securities Clearance Account and to reverse any
conditional credit or debit if the relevant conditions shall not be fulfilled.
10. Statements to be Rendered by Morgan Guaranty Brussels
Morgan Guaranty Brussels will furnish by mail, telex, computer transmission, or
such other method as may be specified in the Operating Procedures, to each
Participant such statements, at such times and under such conditions as may be
specified in the Operating Procedures. It shall be the responsibility of each
Participant to reconcile its records with such statements and to inform Morgan
Guaranty Brussels of any error or omission in any statement of (or any
accompanying advice with respect to) any Cash Account or Securities Clearance
Account in its name delivered to it pursuant to this Section. Failure to do so
within 30 days of receipt of any such statement shall be evidence of the
approval of such statement by the Participant.
11. Other Depositaries; Other Clearance Systems
(a) Morgan Guaranty Brussels from time to time may
<PAGE>
(i) appoint banks or legal entities (other than Morgan Guaranty) as
additional depositaries ("Other Depositaries") for securities held in
the Euro-clear System,
(ii) determine the terms and conditions upon which any Other Depositary
shall act, and
(iii) terminate the appointment of any Other Depositary.
(b) Morgan Guaranty from time to time may
(i) enter into direct arrangements with Other Clearance Systems pursuant
to which members of such Other Clearance Systems may effect transfers
by book entry (without physical delivery) to Participants and
Participants may effect transfers by book entry (without physical
delivery) to members of such Other Clearance Systems,
(ii) determine the terms and conditions of such arrangements, and
(iii) terminate any such arrangement at any time.
Morgan Guaranty Brussels will inform each Participant of any such
arrangement and of any termination of any such arrangement.
(c) The arrangements referred to in Section 11(b)(ii) may include arrangements
for the depositaries of an Other Clearance System referred to in Section
11(b)(i) to maintain custody for Morgan Guaranty Brussels of securities
held in the Euro-clear System which were transferred by book entry from
participants in such Other Clearance System to Participants in the
Euro-clear System (each such depositary being hereafter called an "Other
Clearance System Custodian", it being understood that no such depositary
shall, by virtue of such arrangements, be deemed to be an Other
Depositary).
(d) Morgan Guaranty Brussels shall have the sole right to the exclusion of any
holder of a Securities Clearance Account to exercise or assert any and all
rights or claims in respect of actions or omissions of, or the bankruptcy
or insolvency of, any Other Depositary, any Other Clearance System or any
Other Clearance System Custodian with which Morgan Guaranty shall hold or
deposit securities and to receive therefrom any securities held in the
Euro-clear System and deposited therewith or held thereby and any amounts
received by such Other Depositary, Other Clearance System or Other
Clearance System Custodian in respect of such securities.
<PAGE>
(e) Any Other Depositary or Other Clearance System Custodian may be a
Participant and, in that capacity, will have the same rights, duties and
liabilities as it would have if it were not an Other Depositary or Other
Clearance System Custodian.
(f) Morgan Guaranty Brussels will give to each Participant notice of the
appointment or termination of any Other Depositary or Other Clearance
System Custodian, and of the designation, location or change in location of
any Depositary.
12. Duties and Liabilities of Morgan Guaranty
(a) Morgan Guaranty undertakes to perform such duties and only such duties as
are specifically set forth in these Terms and Conditions or the Operating
Procedures. Without limiting the generality of the foregoing, no
Participant or other person shall have or assert any rights, claims or
remedies against Morgan Guaranty with respect to the commencement of the
participation by a Participant in the Euro-clear System, matters of general
policy of the Euro-clear System or the establishment of fees to be paid and
the categories of expenses and disbursements to be charged to Participants.
In the absence of negligence or wilful misconduct on its part, Morgan
Guaranty shall not be liable to any Participant or any other person with
respect to any action taken or omitted to be taken by it in connection with
furnishing the services contemplated hereby and by the Operating
Procedures. However, Morgan Guaranty will have no liability to any
Participant or any other person for indirect or unforeseeable losses,
except where such liability is established in the case of gross negligence
or wilful misconduct of Morgan Guaranty.
(b) Morgan Guaranty Brussels shall take such action as may be expressly set
forth in the Operating Procedures to verify the authenticity of any
instructions given to it by any Participant or any other person in
connection with the Euro-clear System. Morgan Guaranty shall have no
liability for acting upon any instruction, document or other instrument the
authenticity of which has been so verified or which is believed by it to be
genuine or, subject to the foregoing, for failing to detect any forgery.
(c) Morgan Guaranty shall not be liable for any action taken, or any failure to
take any action required to be taken hereunder or otherwise to fulfill its
obligations hereunder (including without limitation the failure to receive
or deliver securities or the failure to receive or make any payment), in
the event and to the extent that the taking of such action or such failure
<PAGE>
arises out of or is caused by war, insurrection, riot, civil commotion, act
of God, accident, fire, water damage, explosion, mechanical breakdown,
computer or system failure or other failure of equipment, failure or
malfunctioning of any communications media for whatever reason (whether or
not such media are made available to Participants by Morgan Guaranty),
interruption (whether partial or total) of power supplies or other utility
or service, strike or other stoppage (whether partial or total) of labour,
any law, decree, regulation or order of any government or governmental body
(including any court or tribunal), or any other cause (whether similar or
dissimilar to any of the foregoing) whatsoever beyond its reasonable
control. Without limiting the generality of the foregoing but without
prejudice to its obligations under Section 17, Morgan Guaranty shall have
no liability for the acts or omissions of (or the bankruptcy or insolvency
of) any Other Depositary, any subcustodian or depositary referred to in
Section 4(b), any Other Clearance System, any Other Clearance System
Custodian or any carrier transporting securities between Depositaries or
between a Depositary and an Other Clearance System or an Other Clearance
System Custodian (provided such carrier shall have been selected by Morgan
Guaranty Brussels with due care and that insurance required by the
Operating Procedures shall have been obtained in respect of securities in
possession of such carrier). If, however, as a result of any act or
omission of, or the bankruptcy or insolvency of, any Other Depositary, any
Other Clearance System, any Other Clearance System Custodian, any carrier
transporting securities held in the Euro-clear System, or any subcustodian
or depositary referred to in Section 4(b), any holder of a Securities
Clearance Account (in that capacity) suffers any loss or liability, Morgan
Guaranty shall take such steps with respect thereto in order to effect a
recovery as it shall reasonably deem appropriate under all the
circumstances (including without limitation the bringing and settling of
legal proceedings), provided that Morgan Guaranty, unless it shall be
liable for such loss or liability by virtue of its negligence or wilful
misconduct, shall charge to such holder the amount of any cost or expense
in effecting, or attempting to effect, such recovery.
(d) Morgan Guaranty makes no investigation with respect to and shall have no
liability for
(i) the creditworthiness or status of any issuer or guarantor of
securities accepted into the Euro-clear System,
(ii) the validity or binding effect of any such security or any guarantee
thereof or any related document or
(iii) any other similar matter.
<PAGE>
(e) Morgan Guaranty shall not be liable for any loss resulting from
(i) a failure by a Participant or any other person to comply with any
procedures or requirements specified herein or in the Operating
Procedures or
(ii) the taking by Morgan Guaranty of action contemplated hereby or by the
Operating Procedures.
(f) Morgan Guaranty shall not be liable for any loss arising, as a result of
the applicability of any law, decree, regulation or order of any government
or governmental body (including any court or tribunal), out of the shipment
or delivery of securities to a Depositary.
(g) Where a Participant requests physical delivery of securities credited to a
Securities Clearance Account maintained for it, the responsibility of
Morgan Guaranty in respect of the delivery of such securities shall be as
set forth in the Operating Procedures.
(h) Morgan Guaranty Brussels is authorized to sign for the account of each
Participant any declaration, affidavit or certificate of ownership, to the
extent it may legally do so, which may be required from time to time in
collecting payments (or otherwise in carrying out its duties hereunder) and
in doing so to rely fully upon any information regarding such Participant
or the ownership of such securities which may have been furnished to Morgan
Guaranty Brussels by or on behalf of such Participant.
(i) Morgan Guaranty may be a Participant and, in that capacity, will have the
same rights, duties and liabilities it would have if Morgan Guaranty
Brussels were not the operator of the Euro-clear System.
13. Fees and Expenses
The Participants shall be charged such fees, and for such expenses and
disbursements, as shall be specified from time to time in accordance with the
Operating Procedures. The amounts so charged shall be debited to the
Participants' Cash Accounts.
<PAGE>
14. Termination of Participation; Resignation of Participants
(a) Morgan Guaranty Brussels may at any time terminate the participation in the
Euro-clear System of any Participant by giving such Participant at least 30
days' notice thereof, provided that Morgan Guaranty Brussels may effect
such termination upon notice effective immediately if
(i) any of the following events shall occur:
(w) liquidation or bankruptcy of such Participant or initiation of
any proceedings with respect thereto,
(x) application by such Participant for composition with its
creditors, whether in or out of court, or for deferment of
its debts,
(y) protest of a cheque, note or acceptance respectively drawn,
made or accepted by such Participant, or
(z) attachment or execution upon or against any asset or
property of such Participant or
(ii) for any reason delay in the effectiveness of such
termination could be materially prejudicial to the interests of Morgan
Guaranty or other Participants generally.
(b) Any Participant may resign from the Euro-clear System by giving notice
to Morgan Guaranty Brussels. Such resignation will be effective upon the
date upon which all transactions of such Participant with respect to any
Cash Account or Securities Clearance Account have been settled, provided
that from and after the time that Morgan Guaranty Brussels receives notice
of such resignation it may decline to accept any instruction or give effect
to any transaction which would result in any credit to any Securities
Clearance Account or Cash Account in the name of such Participant.
(c) The participation of any Temporary Participant in the Euro-clear System
shall, in addition, terminate as provided in the Operating Procedures.
(d) Upon the effectiveness of any termination or resignation, or as soon
thereafter as is reasonably practicable, Morgan Guaranty Brussels shall
cause to be returned to such Participant the amounts then held by such
Participant in its Cash Accounts and securities credited to its Securities
Clearance Accounts, provided, however, that Morgan Guaranty, without
affecting any other rights it may have, shall have the right
<PAGE>
(i) to set off against or retain from such amounts to be so returned any
amounts which are due to, or which may become due to, Morgan Guaranty
from such Participant and
(ii) to retain securities held in such Securities Clearance Accounts to
provide for the payment in full of any amounts which are due to, or
which may become due to, Morgan Guaranty from such Participant.
No such termination or resignation shall affect any right or liability
arising out of events (including any Securities Loss) occurring, or
securities delivered, prior to the effectiveness thereof.
(e) Morgan Guaranty shall have no liability to any Participant or other
person as a result of any termination or any other action pursuant to this
Section 14.
15. Certain Responsibilities and Liabilities of Participants
(a) Each holder of a Securities Clearance Account
(i) shall comply with any law, decree, regulation, or order of any
government or governmental body (including any court or tribunal)
applicable to it or its participation in the Euro-clear System and any
contract, agreement or other instrument binding upon it and
(ii) shall indemnity Morgan Guaranty upon demand against any loss,
claim, liability or expense asserted against or imposed upon
Morgan Guaranty (other than any such loss, claim, liability or
expense caused by the negligence or wilful misconduct of Morgan
Guaranty) as a result of
(y) the violation or breach by such holder of any such law,
decree, regulation, order, contract, agreement or other
instrument, or
(z) the holding by such holder of any securities in the
Euro-clear System (or the receipt of payments or the
effecting of any transaction with respect thereto) and
arising out of or caused by the operation of any law,
decree, regulation or order of any government or
governmental body (including any court or tribunal).
<PAGE>
(b) If any security which shall have been received at any Depositary for
credit to any Securities Clearance Account shall at any time prove to be
forged, fraudulent or invalid (or otherwise not freely transferable and
deliverable without encumbrance in any market which Morgan Guaranty
Brussels determines to be relevant under the circumstances), the holder of
such Securities Clearance Account shall be liable therefor and Morgan
Guaranty Brussels shall, upon notice to such holder, debit to such
Securities Clearance Account an amount of securities of the same issue upon
discovery that securities so received are forged, fraudulent or invalid (or
are not freely transferable and deliverable without encumbrance in any such
market). The records of Morgan Guaranty Brussels as to which Securities
Clearance Account securities received were initially to be credited will be
sufficient evidence of the matters referred to therein in the event of
controversy.
(c) Nothing in these Terms and Conditions is intended to allow a
Participant to create a debit balance in any Securities Clearance Account
with respect to any securities of any issue. If, however, a debit to any
Securities Clearance Account of a Participant shall at any time result in a
debit balance in such Securities Clearance Account with respect to
securities of any issue, such Participant shall immediately deliver for
credit (or otherwise cause to be credited) to such Securities Clearance
Account a sufficient amount of securities of such issue to eliminate such
debit balance. If such Participant does not within seven business days so
deliver (or cause to be credited) such securities, Morgan Guaranty Brussels
may (but, in its discretion, need not) purchase, for the account and at the
sole expense of such Participant, such amount of such securities for credit
to such Securities Clearance Account, such purchase to be in such markets,
in such manner and for such consideration as Morgan Guaranty Brussels shall
reasonably determine.
(d) Each Participant shall be responsible for notifying Morgan Guaranty
Brussels in writing, with appropriate supporting documents, of any change
in its legal capacity or in the extent or validity of the signing
authorities of its representatives, and Morgan Guaranty Brussels shall have
no obligation to make any inquiry or investigation with respect to such
changes.
16. Special Rules Applicable to Cash Accounts
(a) Except as otherwise provided by law or otherwise agreed in writing
between a Participant and Morgan Guaranty Brussels with respect to any
specified account, all Cash Accounts and other current accounts with Morgan
Guaranty in Belgium opened in the name of such Participant are part of one
<PAGE>
single and indivisible current account of which they are mere subdivisions
for bookkeeping purposes, even if such subdivisions are maintained in
different currencies, including Composite Currency Units, earn credit
interest or are charged debit interest at different rates and even if the
transactions therein are reported in different statements of account.
Consequently, Morgan Guaranty has the option, among others, of transferring
the balance of any subdivision in credit of the Participant's current
account to any subdivision in debit thereof or vice versa, at any time and
without prior notice.
Transfers pursuant to this Section 16(a) between subdivisions of the
Participant's current account denominated in different currencies will,
unless otherwise provided in the Operating Procedures, be effected on the
basis of the rate of exchange of the relevant currencies in relation to the
Belgian franc established at the daily fixing in Brussels on the last
business day prior to the transfer or, if the rate of exchange of a
currency in relation to the Belgian franc is not quoted in Brussels as
aforesaid, on the basis of a quote obtained from a source considered
reliable by Morgan Guaranty Brussels.
(b) Except as otherwise provided by law or otherwise agreed between a
Participant and Morgan Guaranty Brussels in writing with respect to any
specified account, the overall credit balance of any single and indivisible
current account of a Participant may be set off by Morgan Guaranty at any
time and without prior notice against debts of the Participant to other
offices of Morgan Guaranty that have not been paid when due.
(c) Morgan Guaranty Brussels will carry out for account of Participants
instructions to make payments in accordance with the Operating Procedures.
(d) Morgan Guaranty Brussels may in accordance with customary practice hold
any currency (other than Belgian francs) or Composite Currency Unit in
which any subdivision of a Participant's current account is denominated on
deposit in and effect transactions relating thereto through an account with
an office of Morgan Guaranty or of another bank in the country where such
currency is the lawful currency or in other countries where such currency
or Composite Currency Unit may be lawfully held on deposit. Morgan Guaranty
shall have no liability for any loss or damage arising from the
applicability of any law or regulation, now or hereafter in effect, or from
the occurrence of any event, which may affect the transferability,
convertibility, or availability of such currency or Composite Currency Unit
in the countries where such accounts are maintained and in no event shall
Morgan Guaranty be obligated to substitute another currency for a Component
Currency whose transferability, convertibility or availability has been
affected by such law, regulation or event. To the extent that any such law,
regulation or event imposes a cost or charge upon Morgan Guaranty Brussels
in relation to the transferability, convertibility, or availability of any
such currency or Composite Currency Unit, such cost or charge will be for
the account of the affected Participant. If pursuant to any such law or
regulation, or as a result of any such event, Morgan Guaranty Brussels
cannot deal in any Component Currency or effect a particular transaction in
a Composite Currency Unit on behalf of a Participant, Morgan Guaranty
Brussels may thereafter treat any account denominated in an affected
Composite Currency Unit as a group of separate accounts denominated in the
relevant Component Currencies.
<PAGE>
(e) Transactions in a currency or Composite Currency Unit shall be subject
to the regulations laid down by the Belgian exchange control authorities.
(f) Morgan Guaranty Brussels determines the terms and rates of interest
applicable to credit balances in the various subdivisions of a
Participant's current account and the terms and rates of interest to be
charged on debit balances in the various subdivisions of a Participant's
current account, and shall have the right to modify such terms and rates at
any time. Unless otherwise agreed, debit balances in any subdivision of a
Participant's current account and interest thereon will be required to be
offset forthwith by a corresponding credit to such subdivision of such
current account by such Participant.
(g) Except in the case of negligence or wilful misconduct, Morgan Guaranty
shall not be liable for delays in carrying out payment instructions given
by any Participant. Without limiting the generality of the foregoing, in
the event that Morgan Guaranty Brussels shall use the services of another
bank or Other Clearance System (whether or not selected by Morgan Guaranty
Brussels) for carrying out payment instructions received from a
Participant, it shall not be held liable to the Participant if such payment
instructions, although transmitted correctly to that other bank or Other
Clearance System, shall not be carried out or shall be carried out
incorrectly by the latter. In the event that a delay in the carrying out of
a payment instruction is caused by negligence of Morgan Guaranty, the
liability of Morgan Guaranty Brussels shall not exceed an interest
equivalent, determined in accordance with the Operating Procedures, for the
period from the day when the payment would have been carried out, but for
the negligence of Morgan Guaranty, until the day when it is actually
carried out (excluding any portion of such period during which Morgan
Guaranty Brussels cannot carry out such instructions as a result of any
event referred to in Section 12(c)), provided, however, if the Participant
shall fail to report the delay to Morgan Guaranty Brussels within ten days
from the date when the payment would, but for the negligence of Morgan
Guaranty, have been made, the relevant period shall not exceed ten days.
<PAGE>
17. Securities Losses
(a) Without prejudice to any obligation of Morgan Guaranty Brussels to take
action under Section 17(c) or 17(f) or to any liability that Morgan
Guaranty may have to compensate any Participant or other entity holding
securities in the Euro-clear System for negligence or wilful misconduct on
the part of Morgan Guaranty, if all or any portion of the securities of a
particular issue held in the Euro-clear System is lost or otherwise becomes
unavailable for delivery (such loss or unavailability being referred to as
a "Securities Loss"), then, subject to the last sentence of this Section
17(a), the reduction in the amount of securities of such issue held in the
Euro-clear System arising therefrom shall be shared by those holding such
issue in the Euro-clear System at the opening of the business day on which
Morgan Guaranty Brussels shall make a determination to the effect that such
Securities Loss has occurred (or if such day is not a business day, at the
opening of business on the immediately preceding business day), such
sharing to be proportionate to the amount of securities of such issue so
held at the time of such determination and to be effected by means of
debits to Securities Clearance Accounts to which securities of such issue
are credited at such time (subject to appropriate adjustment in the event
that any portion of the securities of such issue held in the Euro-clear
System is for any reason not then credited to Securities Clearance
Accounts). Notwithstanding the foregoing, any reduction in the amount of
securities available for delivery arising solely from any Securities Loss
with respect to securities held with any Other Depositary, any Other
Clearance System or any Other Clearance System Custodian (or otherwise held
for Morgan Guaranty Brussels or another Depositary on a fungible basis)
shall be shared at the time as of which such reduction is attributed to
Morgan Guaranty. For the purpose of this subsection,
(i) securities of a particular issue called for redemption in part and
allocated to Securities Clearance Accounts pursuant to Section 5(c)(i)
shall be considered to be a separate issue and
(ii) Morgan Guaranty Brussels may deem a security of a particular issue to
be lost or unavailable for delivery
(v) if such security is mutilated, lost, stolen or destroyed (or if
for any other reason cannot be delivered or is unavailable for
delivery),
(w) if such security proves to be forged, fraudulent or invalid (in
whole or in part),
(x) if such security is nationalized, expropriated or seized,
<PAGE>
(y) if for any reason such security is not freely transferable or
deliverable without encumbrance in any market which Morgan
Guaranty determines to be relevant under the circumstances or
(z) to the extent of any debit balance which
(A) is created with respect to securities of such issue in the
Securities Clearance Account of a Participant as a result of
the application of the foregoing sentence and
(B) has not been cured pursuant to Section 15(c).
Notwithstanding the foregoing, Morgan Guaranty Brussels shall not effect
any debits with respect to a Securities Loss pursuant to the first sentence
of this Section 17(a) so long as Morgan Guaranty Brussels determines that
it will be able to replace the securities which are the subject of such
Securities Loss (or effect recovery with respect thereto) pursuant to
Section 15(b), the third sentence of Section 15(c), Section 17(c) or
Section 17(f) or otherwise in sufficient time and in a manner to permit the
efficient operation of the Euro-clear System, it being understood that,
without limiting any obligations of Morgan Guaranty Brussels under Section
15(b), the third sentence of Section 15(c), Section 17(c) or Section 17(f),
the foregoing shall not itself impose any obligations on Morgan Guaranty
Brussels to take any action to replace any security.
(b) Simultaneously with any debit to a Securities Clearance Account pursuant to
Section 17(a). Morgan Guaranty Brussels shall establish a memorandum
account in favour of the holder thereof to reflect any claims, contingent
or otherwise, which such holder may have against Morgan Guaranty as a
result of
(i) any possible recovery of securities or cash which Morgan Guaranty
Brussels may effect pursuant to Section 17(c) or 17(f), or
(ii) any other liability arising from the Securities Loss giving rise
to such debit that Morgan Guaranty Brussels may have to such
holder under the Terms and Conditions,
it being understood that the establishment of any such memorandum account
shall not enlarge the liabilities of Morgan Guaranty under these Terms and
Conditions. Morgan Guaranty Brussels shall from time to time report to the
holder of any memorandum account the status of such memorandum account,
together with a general description of any action that Morgan Guaranty has
taken or proposes to take, pursuant to Section 17(c) or 17(f), with respect
thereto. Morgan Guaranty Brussels shall not be required to take
instructions from any Participant to effect any transaction with respect to
any memorandum account.
<PAGE>
(c) In the case of any Securities Loss with respect to any issue of
securities arising under circumstances in which any Other Depositary, any
Participant, any Other Clearance System, any Other Clearance System
Custodian, any subcustodian or any other person is or may be legally liable
therefor (or if any other remedy may be available for making good the
Securities Loss), Morgan Guaranty Brussels shall take such steps with
respect thereto in order to recover the securities which are the subject of
such Securities Loss or damages in respect thereof (or to obtain the
benefits of any such other remedy) as it shall reasonably deem appropriate
under all the circumstances (including without limitation the bringing
settling of legal proceedings). Unless Morgan Guaranty is liable for such
Securities Loss by virtue of its negligence or wilful misconduct, Morgan
Guaranty Brussels shall charge to those sharing pursuant to Section 17(a)
the reduction in securities arising out of such Securities Loss
(proportionately in accordance with the amount of such sharing) the amount
of any cost or expense incurred in connection with any action taken
pursuant to this Section 17(c). This Section 17(c) is not intended to limit
the generality of the last sentence of Section 1 2(c).
(d) Nothing in this Section 17 shall relieve Morgan Guaranty of
liability arising from its own negligence or wilful
misconduct or any obligation of Morgan Guaranty Brussels to
take action pursuant to Section 17(c) or 1 7(f).
(e) Any cash amounts or securities which Morgan Guaranty shall recover in
respect of a Securities Loss relating to a particular issue of securities
or for which Morgan Guaranty shall be liable pursuant to Section 17(d) in
connection with a Securities Loss shall be credited to the appropriate Cash
Accounts or Securities Clearance Accounts of those sharing pursuant to
Section 17(a) the reduction in the amount of securities of such issue
arising from such Securities Loss, proportionately in accordance with the
amount of such reduction so shared.
(f) If a Securities Loss shall arise out of the mutilation, loss, theft or
destruction of securities and it is necessary in order to obtain the
reissuance of such securities that Morgan Guaranty obtain and deliver a
bond, indemnity or other like instrument, then either
(i) Morgan Guaranty shall obtain and deliver such bond, indemnity or other
instrument and, unless it is liable for such Securities Loss by virtue of
its negligence or wilful misconduct, may charge any related cost or expense
<PAGE>
to the holders of Securities Clearance Accounts affected by such Securities
Loss, proportionately in accordance with the amount of securities subject
to such Securities Loss, or
(ii) If it shall not elect to proceed under clause (i), Morgan Guaranty
Brussels
(y) shall so notify each holder of a Securities Clearance Account
affected by such Securities Loss and
(z) to the extent practicable and if so instructed by any holders of
such Securities Clearance Accounts, shall obtain and deliver, on
behalf of and, unless Morgan Guaranty is liable for such
Securities Loss by virtue of its negligence or wilful misconduct,
at the cost and expense of those giving such instructions
(proportionately in accordance with the amounts of such
securities), such bond, indemnity or other instrument, but,
unless Morgan Guaranty is liable as aforesaid, only upon
receiving indemnity or security satisfactory to it with respect
to the cost thereof and its expenses arising therefrom.
Nothing in this Section 17(f) shall require Morgan Guaranty itself to issue
any bond, indemnity or other like instrument.
(g) If as a result of the operation of Section 17(a) or 17(e) there
would stand to the credit of one or more Securities Clearance Accounts a
fraction of the smallest deliverable definitive certificate of an issue,
Morgan Guaranty Brussels in order to avoid any fractional security being so
credited is authorised to sell and debit to (or to purchase and credit to)
such Securities Clearance Accounts securities of such issue in an amount
sufficient to eliminate such fractions. Any such sale or purchase will be
for the several accounts of the holders of such Securities Clearance
Accounts, proportionately in accordance with respective amounts of such
debits or credits, and may be made in such markets, in such manner and for
such consideration as Morgan Guaranty Brussels shall reasonably determine.
18. Entire Agreement; Benefit of Terms and Conditions
Except as may be otherwise provided in any separate written agreement with a
Participant, these Terms and Conditions and the Operating Procedures set forth
the entire agreement with the Participants with respect to the subject matter
hereof. No customer or other entity or individual for which any Participant may
be acting shall, in that capacity, have or be entitled to assert any rights,
claims or remedies against Morgan Guaranty.
<PAGE>
19. Modifications; Waivers
These Terms and Conditions may be amended or supplemented at any time upon
notice to the Participants. Each Participant will, without prejudice to its
rights under Section 14(b), be deemed to have accepted any such amendment and
supplement
(a) effective immediately, in the case of any amendment or supplement not
adversely affecting Participants, or
(b) effective ten business days after despatch thereof, in the case of any
other amendment or supplement.
No failure to exercise a right or power conferred hereunder shall
constitute a waiver thereof.
20. Notices
All notices, requests, demands or other communications from Morgan Guaranty
Brussels shall be deemed to have been received as specified in the Operating
Procedures and sent to such address as most recently specified by the
Participant as its address for such purpose. All notices, requests, demands or
communications to Morgan Guaranty Brussels shall be deemed to have been duly
given and made when received at the address, and through the means, set forth in
the Operating Procedures.
21. Maintenance of Records; Limitation on Actions
Morgan Guaranty Brussels accepts no responsibility to maintain records with
respect to instructions received or transactions carried out after the
<PAGE>
expiration of a period of five years from the time such instructions are
received or transactions are carried out. Accordingly, any action, claim or
counterclaim by a holder of a Securities Clearance Account or Cash Account based
upon any such instruction or transaction shall be barred upon the expiration of
such period of five years, the running of such period not to be interrupted or
suspended for any reason.
22. Governing Law; Jurisdiction; Evidence
These Terms and Conditions shall be governed by and construed in accordance with
the laws of Belgium. Each Participant submits to the nonexclusive jurisdiction
of the competent courts of Brussels for the purposes of any dispute arising
hereunder. Morgan Guaranty Brussels' own books and records (whether kept on
paper, microfilm, microfiche, by electronic or magnetic recording, in any other
mechanically reproducible form or otherwise) shall be deemed to constitute
sufficient evidence of any obligations of the Participant to Morgan Guaranty
Brussels and of any facts and events relied upon by Morgan Guaranty Brussels.
<PAGE>
Exhibit D
Fee Schedule
Euro-clear
----------
Safekeeping
4 basis points per annum
Transactions
$30.00 each
Euro C/D
--------
Safekeeping
.00004 basis points per annum
Transactions
$100.00 each
Physically Held
---------------
Safekeeping
10 basis points per annum
Transactions
$75.00 each
The fund will also be charged for out of pocket expenses incurred in Singapore,
Spain, Hong Kong, Portugal and Malaysia.
<PAGE>
LIST OF CASH CORRESPONDENTS
LISTE DES CORRESPONDANTS-ESPECES
LISTE DER KORRESPONDENZBANKEN
In order for the correspondent to recognize that cash is for credit to a Cash
Account of a Participant in the Euroclear System, the Participant should ensure
that the credit advice submitted by the remitter states:
"For account of Euroclear, account number . . . "
"In favor of Participant (full name and location) 9nnnn"
"Account numbers or description are indicated below"
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CODE CURRENCY CORRESPONDENT B.I.C. EUROCLEAR ACCOUNT
ISO/ DEVISE CORRESPONDANTCO DECOMPTE EUROCLEAR
B.I.C. WAHRUNG KORRESPONDENZBANK CODE EUROCLEAR KONTO
CODE B.I.C.
ATS Austrian Schilling Creditanstalt-Bankverein, CABV AT WW 01/32795/00
Vienna
AUD Australian Dollar Westpac Banking Corporation, WPAC AU 25 EUR 000 1970
Sydney Interbank Settlements
BEF Belgian Franc Morgan Guaranty Trust MGTC BE BB 687-7000100-24
Company of New York, Brussels
BHD Bahrain Dinar National Bank of Bahrain, NBOB BH BM 9931/4762
Maname
CAD Canadian Dollar Royal Bank of Canada, Toronto ROYC CA T2 TIC 236/262/2
CHF Swiss Franc Morgan Guaranty Trust MGTC CH ZZ 8041/61
Company of New York, Zurich
DKK Deutsche Mark Morgan Guaranty Trust MGTC DE FF 8060/5611
Company of New York,
Frankfurt
DEM Danish Krone Den Danske Bank A/S, DABA DK KK 52334.3
Copenhagen
ESB Spanish Peseta Banco de Santander S.A., BDER ES MM 810.635
Madrid
FIM Finnish Markka Kansalis-Osaka-Pankki, KOPI FI HH 122-FIM.
Helsinki MGTC BE BE ECL
FRF French Franc Morgan Guaranty Trust MGTC FR PP 437/07643/T.0004
Company of New York, Paris
GBP Pound Sterling Morgan Guaranty Trust MGTC GB 2L 1124/7776
Company of New York, London
HKD Hong Kong Dollar The Hongkong and Shanghai HSBC HK HH HKH 111/028072/001
Banking Corporation Limited,
Hong Kong
IEP Irish Pound Allied Irish Banks PLC, AIBK IEZD 08075564
Dublin
ISK Icelandic Krone Landsbanki Islands, Reykjavik LAIS IS RE 100/26/90901
ITL Italian Lira Credito Italiano, Milan CRIT IT MM 80849-00
JPY Japanese Yen The Bank of Tokyo, Ltd., BOTK JP JT TOK IBJT JP JT 653/043/0897
Tokyo 285.01.99.030197007
The Industrial Bank of Japan
Limited, Tokyo
KWD Kuwaiti Dinar National Bank of Kuwait, NBOK KW KW BIC 000.601055.01.01
Kuwait
MYR Malaysian Ringgit The Hongkong and Shanghai HSBC MY KL 301/968327-001
Banking Corporation Limited,
Kuala Lumpur
NLG Dutch Guilder ABN AMRO Bank N.V., Amsterdam BSNA NL 2A 45.60.32.835
NOK Norwegian Krone Christiania Bank og XIAN NO KK 6001/02/09105
Kreditkasse, Oslo
NZD New Zealand Dollar Bank of New Zealand, BKNZ NZ 22 985 0999-212100-000
Wellington
PTE Portuguese Escudo Banco Comercial Portugues, BCOM PT PLDRI 783-63-197
Lisbon
SAR Saudi Riyal National Commercial Bank, 213/189
Jeddah
SEK Swedish Krona Skandinaviska Enskilda ESSE SE SS 5201/56/329/01
Banken, Stockholm
SGD Singapore Dollar The Development Bank of DBSS SG SG 37.00480.4
Singapore, Singapore
USD U.S. Dollar Morgan Guaranty Trust MGTC US 33 670/01/862
Company of New York, New York (via CHIPS:034084)
XAU Gold Morgan Guaranty Trust MGTC GB2L 509
Company of New York, London
XDR Special Drawing Rights Morgan Guaranty Trust MGTC BE BB 687-7000101-25
Company of New York, Brussels
XEU European Morgan Guaranty MGTC BE BB 687-7000102-26
Currency Unit Trust Company
of New York,
Brussels
</TABLE>
EXHIBIT 99.B9
AGREEMENT
THIS AGREEMENT, made as of the lst day of July, 1992, by and between LORD
ABBETT RESEARCH FUND, INC., a Maryland corporation, having its principal office
and place of business at 767 Fifth Avenue, New York, New York, (hereinafter
called the "Fund"), and UNITED MISSOURI BANK, N.A., a national banking
association, having its principal office and place of business at Kansas City,
Missouri (hereinafter sometimes called the "Bank" or "Transfer Agent"),
WITNESSETH:
WHEREAS, the Fund desires to appoint the Bank as Transfer Agent and
Dividend Disbursing Agent, and the Bank desires to accept such appointment;
NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
Section 1. Certain Representations and Warranties of the Bank.
The Bank represents and warrants to the Fund that:
1.01 It is a national banking association duly organized and
existing and in good standing under the laws of the
United States of America.
1.02 It is duly qualified to carry on its business in the State
of Missouri.
<PAGE>
1.03 It is empowered under applicable laws and by its charter and
by-laws to enter into and perform the services contemplated
in this Agreement.
1.04 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
1.05 It has or has available to it, and will continue to have
available and cause to be maintained, the necessary
facilities, equipment and personnel to perform its duties
and obligations under this Agreement.
Section 2. Certain Representations and Warranties of the Fund.
The Fund represents and warrants to the Bank that:
2.01 It is a Maryland corporation duly organized and existing and
in good standing under the laws of the State of Maryland.
2.02 It is an open-end diversified management investment company
registered under the Investment Company Act of 1940.
2.03 A registration statement under the Securities Act of 1933 is
currently effective with respect to all shares of the Fund
being offered for sale.
2.04 All requisite steps have been taken to register the Fund's
shares for sale in all states in which the Fund's shares are
now offered for sale, and the Fund has no notice of any stop
order or other proceeding in any such state affecting such
registration or the sale of the Fund's shares.
<PAGE>
2.05 The Fund is empowered under applicable laws and by its
charter and by-laws to enter into and perform this
Agreement; and, when authorized by its Board of Directors,
all requisite corporate proceedings will have been taken to
authorize it to enter into and perform this Agreement.
Section 3. Scope of Appointment.
3.01 Subject to the conditions set forth in this Agreement, the
Fund hereby employs and appoints the Bank as Transfer Agent
and Dividend Disbursing Agent effective July 1, 1992.
3.02 The Bank hereby accepts such employment and appointment and
agrees that on and after July 1, 1992, it will act as the
Fund's Transfer Agent and Dividend Disbursing Agent.
3.03 The Bank agrees to provide the necessary facilities,
equipment and personnel to perform its duties and
obligations hereunder in accordance with the best industry
practice.
3.04 The Bank agrees that it will perform all of the usual and
ordinary services as Transfer Agent and Dividend Disbursing
Agent and as agent for the various shareholder accounts,
including, without limitation, the following: issuing,
transferring and cancelling stock certificates, maintaining
all shareholder accounts, preparing shareholding meeting
lists, mailing proxies, receiving and tabulating proxies,
mailing shareholder reports and prospectuses, withholding
taxes on non-resident alien accounts, preparing and mailing
checks for disbursement of income dividends and capital
gains distributions, preparing and filing U.S. dividends and
capital gains distributions, preparing and filing U. S.
Treasury Department Form 1099 for all shareholders,
preparing and mailing confirmation forms to shareholders and
dealers with respect to all purchases and liquidations of
Fund shares and other transactions in shareholder accounts
for which confirmations are required, recording
reinvestments of dividends and distributions in Fund shares,
recording redemption of Fund shares and preparing and
mailing checks, for payments upon redemption and for
disbursements to withdrawal plan holders.
<PAGE>
Section 4. Fees and Expenses.
4.01 For the services to be rendered by the Bank pursuant to this
Agreement, the Fund agrees to pay to the Bank a reasonable
compensation as agreed upon in writing between the Fund and
the Bank for all services rendered as Transfer Agent and
Dividend Disbursing Agent, taking into account among other
factors the lowest rates which the Bank and its sub-agent,
if any, charge other mutual funds for similar services and
economies resulting from increased volume of business and
from reduced costs to the Bank and its sub-agent, if any.
One-twelfth (1/12th) of the annual maintenance fee agreed
upon per shareholder account shall be paid on the fifth
(5th) day of each month. Each monthly payment shall be
calculated by multiplying 1/12th of the annual maintenance
fee times the highest number of open shareholder accounts
existing at any time during the previous month; provided,
however, that any service fees or charges other than
transcript fees paid to the Transfer Agent or its sub-agent,
if any, by the Fund's shareholders or by dealers shall be
applied toward such monthly payments by the Fund. (See
Exhibit B attached hereto.)
<PAGE>
4.02 The Fund agrees to promptly reimburse the Bank for all
reasonable out-of-pocket expenses or advances incurred by it
and by its sub-agent, if any, in connection with the
performance of services under this Agreement, for postage
(and first class mail insurance in connection with mailing
stock certificates), envelopes, check forms, continuous
forms, forms for reports and statements, stationery, and
other similar items, telephone and telegraph charges
incurred in answering inquiries from dealers or shareholders
(unless due to errors of the Bank or its sub-agent, if any),
and microfilm or microfiche used each year to record the
previous year's transactions in shareholder accounts and
computer tapes used for permanent storage of records.
<PAGE>
Section 5. Efficient Operation of System.
5.01 In connection with the performance of its services under
this Agreement, the Bank assumes full responsibility for the
accurate and efficient functioning of the system used for
the establishment and maintenance of shareholder accounts at
all times, including without limitation:
(a) The accuracy of all entries in the Bank's records reflecting
orders and instructions received from dealers, shareholders,
the Fund or its principal underwriter;
(b) The continuous availability and the accuracy of shareholder
lists, shareholder account verifications, confirmations and
other shareholder account information to be produced from
its records by date;
(c) The accurate and timely issuance of dividend and
distribution checks in accordance with instructions received
from the Fund;
(d) The accuracy of redemption transactions and payments in
accordance with redemption instructions received from
dealers, shareholders or the Fund;
(e) The deposit daily in the Fund's appropriate special bank
account of all checks and payments received from dealers or
shareholders for investment in shares;
(f) The requiring of proper forms of instructions, signatures
and signature guarantees and any necessary documents
supporting the legality of transfers, redemptions and other
shareholder account transactions, all in conformity with the
Transfer Agent's present procedures with such changes as may
be required or approved by the Fund; and
<PAGE>
(g) The maintenance of a current duplicate set of the Fund's
essential records at a secure distant location, in form
available and usable forthwith in the event of any breakdown
or disaster disrupting its main operation.
Section 6. Indemnification.
6.01 Except to the extent that the Bank or its sub-agent, if any,
is covered by and receives payment from any insurance
required hereunder, the Bank shall not be responsible for,
and the Fund shall hold harmless and indemnify the Bank from
and against any loss or liability to the Fund or third
parties (and expenses including attorney's fees in
connection with any claim or suit asserting any such
liability) arising out of or attributable to actions taken
by the Bank or its sub-agent, if any, pursuant to this
Agreement, provided that the Bank and its sub-agent, if any,
have acted in good faith, with due diligence and without
negligence. The matters covered by this indemnification
include but are not limited to the following:
(a) Actions under this Agreement in reliance on, or in the
carrying out of, any instructions or requests of the
Fund or its officers (it being agreed that the Bank or
its sub-agent, if any, may apply to the Fund for
instructions whenever it is deemed advisable);
<PAGE>
(b) Actions under this Agreement taken or omitted by the
Bank or its sub-agent, if any, in good faith in
reliance or an opinion of outside legal counsel for the
Bank or for the Fund; and
(c) Actions of the Bank or its sub-agent, if any, under
this Agreement in reliance upon any certificate or
document reasonably believed by it to be genuine and to
have been signed by (or bear the proper facsimile
signature of) the proper person or persons. The Fund
shall be responsible for, and shall have the right to
conduct or control the defense of any litigation
asserting liability against which the Bank or its
sub-agent, if any, is indemnified hereunder.
6.02 The Bank shall hold harmless and indemnify the Fund from and
against any loss or liability arising out of the Bank's
failure to comply with the terms of this Agreement or
arising out of the Bank's negligence or misconduct.
Section 7. Certain Covenants of the Bank and the Fund.
7.01 All requisite steps will be taken by the Fund from time to
time when and as necessary to register the Fund's shares for
sale in all states in which the Fund's shares shall at any
time be offered for sale. If at any time the Fund shall
receive notice of any stop order or other proceeding in any
such state affecting such registration or the sale of the
Fund's shares, or of any stop order or other proceeding
under the Federal securities laws affecting the sale of the
Fund's shares, the Fund will give prompt notice thereof to
the Bank.
<PAGE>
7.02 The Bank hereby agrees to establish and maintain or to cause
to be established and maintained facilities and procedures
reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms, and facsimile signature
imprinting devices, if any; and for the preparation or use,
and for keeping account of, such certificates, forms and
devices and to cause its sub-agent, if any, to carry
insurance as specified in Exhibit A hereto with insurers
acceptable to the Fund which insurance shall be in the
minimum amounts specified in Exhibit B and which shall not
be changed without the consent of the Fund, and will be
expanded in coverage or increased in amounts from time to
time if and when reasonably requested by the Fund.
7.03 To the extent required by Section 31 of the Investment
Company Act of 1940 and Rules thereunder, the Bank agrees
that all records maintained by the Bank or by its sub-agent,
if any, relating to the services to be performed by the Bank
under this Agreement are the property of the Fund and will
be preserved and will be surrendered promptly to the Fund on
request.
7.04 The Bank agrees to furnish and to cause its sub-agent, if
any, to furnish the Fund semi-annual reports of its
financial condition, consisting of a balance sheet, earnings
statement and any other financial information reasonably
requested by the Fund. The annual financial statements of
the sub-agent, if any, shall be certified by the certified
public accountants for such sub-agent.
<PAGE>
7.05 The Bank will cause its sub-agent, if any, to represent and
agree that it will use its best efforts to keep current on
the trends of the investment company industry relating to
shareholder services and to agree that it will use its best
efforts to continue to modernize and improve its systems
without additional costs to the Fund.
7.06 The Fund and its authorized representatives will be
permitted to make periodic inspections of the mutual fund
operations of the Bank and the operations of the Bank's
sub-agent, if any, at reasonable times during business
hours.
Section 8. Termination of Agreement.
8.01 This Agreement may be terminated by either party by one (1)
year's written notice to the other.
8.02 The Fund, in addition to any other rights and remedies,
shall have the right to terminate this Agreement forthwith
upon the occurrence at any time of any of the following
events:
(a) Any interruption or cessation of operations by the Bank
or its sub-agent, if any, which materially interferes
with the business operation of the Fund;
<PAGE>
(b) Insolvency or bankruptcy of the Bank or the Bank's
sub-agent, if any;
(c) Any merger, consolidation or sale of substantially all
the assets of the Bank or the Bank's sub-agent, if any;
(d) The acquisition of the Bank's sub-agent, if any, or a
controlling interest therein by any broker, dealer,
investment adviser or investment company; or
(e) Failure by the Bank or its sub-agent, if any, to
perform its duties in accordance with this Agreement
which failure materially adversely affects the business
operations of the Fund and which failure continues for
sixty (60) days after written notice from the Fund.
8.03 If at any time this Agreement shall be terminated by the
Fund pursuant to clause (a), (b) or (e) of paragraph 8.02,
the Fund shall have and is hereby granted the right, at its
option, to use or cause its agents, employees or independent
contractors to use, for as long as the Fund deems necessary
for its own operations, and no other, and without payment of
any compensation or reimbursement to the Bank or its
sub-agent, if any, the system then being used to process and
maintain the Fund's shareholder records, including all of
the programs, manuals and other materials and information
necessary to operate the system.
<PAGE>
Section 9. Conditions Precedent to the Fund's Obligations.
9.01 Anything herein contained to the contrary notwithstanding,
this Agreement shall not take effect or be binding on the
Fund unless and until the following conditions shall have
been met;
(a) This Agreement shall have been approved by the Board of
Directors of the Fund.
Section 10. Assignment.
10.01 It is understood that the Fund desires to utilize the
services, facilities, systems and programs of DST
Systems, Inc., a Missouri corporation, having its
principal place of business at Kansas City, Missouri,
and to that end, it is understood and agreed that all
or any portion of the services to be provided by the
Bank under this Agreement may be performed by DST, as
the sub-agent of the Bank, under a sub-contract and
that in the event of performance of any such services
which are subcontracted to DST:
(a) DST and the Bank shall each be entitled to all of the
benefits herein afforded to the Bank, including, but
not limited to the indemnities provided herein.
(b) DST shall, by the terms and provisions of the
Sub-Contract Agreement between the Bank and DST, be
required to assume the same duties and responsibilities
and provide the same quality of service, accuracy,
efficient functioning of its system and operations, and
keeping of records as required of the Bank, as Transfer
Agent for the Fund.
<PAGE>
(c) The Fund shall deliver to DST and to the Bank certified
copies of any and all resolutions of its Board of
Directors relating to the duties, procedures or
responsibilities provided for herein.
(d) The Fund agrees that if it requests DST to perform any
functions not provided for in this Agreement, and DST
performs such functions, the Bank shall have no
responsibility for, and shall be indemnified by the
Fund against any loss, liability or claim resulting
therefrom unless the performance of such functions by
DST shall have been consented to or approved by the
Bank prior to such performance.
10.02 With the exception of the sub-contract to DST referred
to above, neither this Agreement nor any rights or
obligations hereunder may be assigned by the Bank
without the written consent of the Fund.
10.03 This Agreement shall inure to the benefit of and be
binding upon the parties and their respective
successors and assigns. If for any reason the Bank
terminates its sub-contract agreement with DST, the
Fund shall have the right to terminate this agreement
pursuant to Section 8.02 hereof.
Section 11. Confidentiality.
11.01 The Bank agrees that in the event the Bank enters into
a sub-contract with DST as contemplated by Section
10.01 hereof, it will cause DST to agree that DST will
keep confidential all records of and information in its
possession relating to the Fund or its shareholders or
shareholder accounts and will not disclose the same to
any person except at the request or with the consent of
the Fund.
<PAGE>
11.02 The Fund agrees that, subject to paragraph 8.03 and
except as otherwise required by law, the Fund will,
providing the Bank enters into a sub-contract with DST
as contemplated by Section 10.01 hereof, keep
confidential all financial statements and other
financial records (other than statements and records
relating solely to the Fund's business dealings with
the Bank and its sub-agent, if any, and all manuals,
systems and other technical information and data not
publicly disclosed relating to DST's operations and
programs furnished to it by DST pursuant to this
Agreement and will not disclose the same to any person
except at the request or with the consent of DST.
Section 12. Survival of Representations and Warranties.
12.01 All representations and warranties by either party
herein contained shall survive the execution and
delivery of this Agreement and its becoming effective
under paragraph 10.01.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their corporate seals by and
through their duly authorized officers, as of the day and year first above
written.
LORD ABBETT RESEARCH FUND, INC.
By /s/ Kenneth B. Cutler
-----------------------
Vice President
ATTEST:
/s/ Thomas F. Konop
-------------------
Assistant Secretary
UNITED MISSOURI BANK, N.A.
ATTEST:
By /s/ Duane E. Schempf
-------------------------
Vice President
/s/ Mary E. Mallow
--------------------
Assistant Secretary
<PAGE>
EXHIBIT A
LORD ABBETT RESEARCH FUND, INC.
Insurance Policies Obtained by DST Systems, Inc.
and Minimum Amounts of Coverage
Minimum Amount
Description of Insurance Policies of Coverage
---------------------------------- --------------
1. Broker's Blanket Bond $80,000,000
Covering losses caused by dishonesty of employees, physical
loss of securities on or outside of premises while in
possession of an authorized person, loss caused by
forgery or alteration of checks or similar instruments.
2. Securities Forgery Bond (Included in 100,000,000
Broker's Blanket Bond)
Covering losses from acting upon securities which are forged,
altered or stolen.
3. First Class Mail and Registered Mail Insurance
Covering mail losses on negotiable or
non-negotiable securities sent by first
class registered mail. 1,000,000
Covering mail losses on non-negotiable
securities sent by registered mail. 10,000,000
Covering mail losses on negotiable
securities sent by registered mail. 1,000,000
4. Errors and Omissions Insurance 10,000,000
5. Draft Forgery Insurance 500,000
Covering losses caused through forgery or
alteration of checks or drafts.
6. Electronic and Computer Crime Insurance 5,000,000*
20,000,000**
Covering losses due to computer related
crime which is not covered under the
Broker's Blanket Bond.
* Customer voice initiated transfers
**All other insuring agreements
<PAGE>
EXHIBIT B
LORD, ABBETT & COMPANY
STANDARD MUTUAL FUND SHAREHOLDER
YEARLY SERVICE FEES
ANNUAL OPEN ACCOUNT FEES 1990
Non-Money (Other)
Fund 01 - Fundamental Value $12.10
Fund 04 - Global Equity (Effective
10/l/89)
Fund 11 - Affiliated SWP Cash Reserve
Fund 13 - Lord Abbett Bond Debenture
Fund 14 - Lord Abbett Developing Growth
Fund 16 - Lord Abbett Value Appreciation
Fund 46 - Lord Abbett Research Fund
Non-Money (Monthly)
Fund 02 - California Tax-Free Income Fund $13.65
Fund 03 - Texas Tax-Free Income Fund
Fund 06 - National Tax-Free Income Fund
Fund 07 - New York Tax-Free Income Fund
Fund 08 - Global Income (Effective 10/l/89)
Fund 12 - U.S. Government - SWP Cash Reserve
Fund 17 - Lord Abbett Growth Income
Fund 20 - Lord Abbett New Jersey
Fund 23 - Lord Abbett Equity Fund
Fund 24 - Lord Abbett Global Portfolio
Fund 26 - Lord Abbett Pennsylvania
Fund 27 - Lord Abbett Hawaii
Fund 28 - Lord Abbett Florida
Fund 32 - Lord Abbett Connecticut
Fund 33 - Lord Abbett Tax Free Missouri
Daily Dividend
Fund 15 - Lord Abbett Cash Reserve $19.40
OTHER ANNUAL FEES
Closed Accounts ** $2.40
IRA Fees Per Social Security Number $9.00
Including Spousal Accounts
Investor Level Combined Statement Fees (If Used)
<PAGE>
CDSC Charge Per CDSC Account $1.80
Non Mutual Fund Index $1.80
Non Mutual Fund Transaction $0.24
Investor / C.I.F. Link $2.40
Networking Charge Per fund $1,200.00
12b-1 Fee $0.00
* Open Account Definition: An account is billed as open if it is open
anytime during the month.
** Closed Account Definition: An account is billed as closed if it is
closed at the beginning of the month.
The above fees and expenses are hereby accepted.
UNITED MISSOURI BANK, N.A.
By
DST SYSTEMS, INC.
By
EXHIBIT 99B.10
KENNETH B. CUTLER
Attorney at Law
767 Fifth Avenue
New York, New York 10153
June 3, 1992
Lord Abbett Research Fund, Inc.
767 Fifth Avenue
New York, New York 10153
Dear Sirs:
I have acted as counsel for Lord Abbett Research Fund, Inc. (the
"Company"), a Maryland corporation, in connection with the organization of the
Company and the registration by the Company of shares of its capital stock,
$.001 par value which have been classified into one series -- Series 1,
consisting of 50,000,000 Shares (the "Shares"). The Directors of the Company may
provide for additional series form time to time with respect to the remaining
authorized and unclassified shares. I am familiar with the Company's
Registration Statement (the "Registration Statement") on Form N-1A (Registration
No. 33-47641) filed with the Securities and Exchange Commission (the
"Commission") registering an indefinite number of Shares under the Securities
Act of 1933, as amended (the "Securities Act").
In so acting, I have examined and relied upon the originals, or copies
certified or otherwise identified to my satisfaction, of such corporate records,
documents and other instruments, and have made such other investigations, as in
my judgment are necessary or appropriate to enable me to render the opinion
expressed below.
I am of the following opinion:
1. The Company has been duly incorporated and is validly existing
under the laws of the State of Maryland.
2. Upon the issuance of Shares classified as Series 1 for the
consideration described in the Registration Statement and upon receipt by the
Company of consideration equal to the net asset value of such Shares, the Shares
so issued will be validly issued, fully paid and non-assessable.
I understand that this opinion is to be used in connection with the
registration of the Shares for offering and sale pursuant to the Securities Act.
I hereby consent to the filing of this opinion with and as a part of the
Registration Statement.
Very truly yours,
/s/ Kenneth B. Cutler
---------------------
Kenneth B. Cutler
EXHIBIT 99.B11
CONSENT OF INDEPENDENT AUDITORS
Lord Abbett Research Fund, Inc.
We consent to the incorporation by reference in Post-Effective Amendment No. 4
to Registration Statement No. 33-47641 of our report dated December 28, 1994
appearing in the annual report to shareholders and to the reference to us under
the captions "Financial Highlights" in the Prospectus and "Investment Advisory
and Other Services" and "Financial Statements" in the Statement of Additional
Information, both of which are part of such Registration Statement.
/S/ DELOITTE & TOUCHE LLP
New York, New York
March 22, 1995
EXHIBIT 99.B13
SUBSCRIPTION AGREEMENT
In connection with the organization of LORD ABBETT RESEARCH
FUND, INC. (the "Fund") and the registration of its shares of capital stock with
the Securities and Exchange Commission, the Fund agrees to sell to each of the
partners of Lord, Abbett & Co. named below, and each such partner agrees to
purchase from the Fund, in a private offering, the number of shares of Series 1
of the Fund set forth opposite his name at a net sales price of $10.00 per
share. Receipt of payment in full for such shares is hereby acknowledged by the
Fund.
Each partner further agrees and states that (1) he has no
present intention of selling, transferring or redeeming any of the shares so
purchased and (ii) if any of the shares so purchased by him are redeemed during
the period in which the organizational expenses of the Fund are being amortized,
the proceeds of any such redemption will be reduced by the proportionate amount
of the Fund's unamortized organizational expenses which the number of shares
redeemed bears to the number of shares of Series 1 of the Fund then outstanding.
PARTNER NUMBER OF SHARES
Ronald P. Lynch 1,250
Daniel E. Carper 1,250
Kenneth B. Cutler 1,250
Robert S. Dow 1,250
Thomas S. Henderson 1,250
Albert R. Hughes, Jr. 1,250
John J. Walsh 1,250
E. Wayne Nordberg 1,250
-----
TOTAL 10,000
/s/ Ronald P. Lynch /s/ Daniel E. Carper
/s/ Thomas S. Henderson /s/ Albert R. Hughes, Jr.
/s/ John J. Walsh /s/ Robert S. Dow
/s/ Kenneth B. Cutler /s/ E. Wayne Nordberg
LORD ABBETT RESEARCH FUND, INC.
/s/ Thomas F. Konop
Vice President Dated: June 3, 1992
EXHIBIT 99.B16
LORD ABBETT RESEARCH FUND
-------------------------
Post Effective Amendment No. 4
Results of a $1,000 investment reflecting net asset value and the reinvestment
of all distributions for:
Period Ending November 30, 1994 Year Ending November 30, 1994
------------------------------- -----------------------------
Life of Fund* One Year
------------- --------
$1,352 ERV $1,082 ERV
=========== ==========
SEC Formula for calculating Average Annual Rate of Total Return:
P(1+T)n = ERV, P(1+T)n = ERV
WHERE: WHERE:
N = 2.5 N = 1
P = $ 1,000 P = $ 1,000
ERV = $1,352 ERV = $1,082
T = AVERAGE ANNUAL TOTAL RETURN
Life of Fund Year Ending November 30,1993
------------ ---------------------------
1000(1+T)n = $1,352 1000(1+T)n = $1,082
(1 + T)n = 1.352 (1 + T) = 1.082
T = (1.352)1/n -1 T = 1.082 -1
T = 12.8% T = 8.2%
* Fund commenced operations 6/3/92
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NAME> LORD ABBETT RESEARCH FUND, INC.
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