<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-b(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
LORD ABBETT RESEARCH FUND, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
-----------------------
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[X] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
(Lord Abbett Fund Letterhead)
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
of the Lord Abbett Research Fund, Inc. scheduled to be held on June 19, 1996, at
11:00 a.m., at the General Motors Building, 767 Fifth Avenue, New York, New
York. Your Board of Directors looks forward to greeting those shareholders who
are able to attend.
At the meeting, in addition to the election of directors and approval
of the appointment of auditors, all shareholders will be asked to vote on an
amendment to the Fund's Articles of Incorporation. In addition, shareholders of
each Series will be asked to vote on a new 12b-1 Plan and Distribution Agreement
for their Series.
Such proposals, if approved, are intended to maintain the competitive
position of the Fund.
All proposals are fully described in the enclosed proxy statement. I
encourage you to review the proxy statement for all the details regarding the
meeting agenda.
Your Board of Directors believes these proposals are in the best
interest of the Fund and its shareholders and unanimously recommends a vote
"for" all proposals. Regardless of the number of shares you own, it is
important that they be represented and voted. Accordingly, please sign, date
and mail the enclosed proxy card in the postage paid return envelope.
Your prompt response will help save the Fund the expense of additional
solicitation.
Sincerely,
/s/ Ronald P. Lynch
Ronald P. Lynch
Chairman of the Board
April 17, 1996
<PAGE>
LORD ABBETT RESEARCH FUND, INC.
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
JUNE 19, 1996
PROXY STATEMENT
YOU ARE URGED TO SIGN AND MAIL THE PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE WHETHER YOU OWN A FEW OR MANY
SHARES. YOUR PROMPT RETURN OF THE PROXY MAY SAVE
THE FUND THE NECESSITY AND EXPENSE OF FURTHER
SOLICITATIONS TO INSURE A QUORUM
AT THIS MEETING.
<PAGE>
LORD ABBETT RESEARCH FUND, INC.
767 Fifth Avenue
New York, New York 10153
Notice of Annual Meeting of Shareholders
To Be Held June 19, 1996 April 17, 1996
Notice is given hereby of an annual meeting of the shareholders of Lord Abbett
Research Fund, Inc. (the "Fund"). The meeting will be held at the offices of
Lord, Abbett & Co., on the 11th floor of The General Motors Building, 767 Fifth
Avenue, New York, New York, on Wednesday, June 19, 1996, at 11:00 a.m., for the
following purposes and to transact such other business as may properly come
before the meeting and any adjournments thereof.
ITEM 1. To elect directors;
ITEM 2. To ratify or reject the selection of Deloitte & Touche LLP as
independent public accountants of the Fund for the current fiscal
year;
ITEM 3. To approve or disapprove a new Distribution Plan and Agreement
for the existing class of shares of each Series pursuant to Rule
12b-1 under the Investment Company Act of 1940; and
ITEM 4. To approve or disapprove an amendment to the Fund's Articles of
Incorporation (i) authorizing the Board of Directors to create
-
classes within series of shares of capital stock; and (ii)
--
confirming that the board may impose contingent deferred sales
charges in connection with new classes of shares to be created
(this change will have no effect on your shares).
By order of the Board of Directors
Kenneth B. Cutler
Vice President and Secretary
<PAGE>
The Board of Directors has fixed the close of business on March 22, 1996 as the
record date for determination of shareholders of the Fund entitled to notice of
and to vote at the meeting. Shareholders are entitled to one vote for each
share held. As of March 22, 1996, there were 536,394 shares of the Large Cap
Series, 98,713 shares of the Mid-Cap Series, 150,755 shares of the Small-Cap
Series and 785,862 shares of the Fund issued and outstanding.
- -------------------------------------------------------------------------------
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD.
SIGN, DATE AND RETURN IT IN THE ENVELOPE PROVIDED.
TO SAVE THE COST OF ADDITIONAL SOLICITATIONS, PLEASE MAIL YOUR PROXY PROMPTLY.
2
<PAGE>
LORD ABBETT RESEARCH FUND, INC.
767 Fifth Avenue
New York, New York 10153
April 17, 1996
PROXY STATEMENT
---------------
This Proxy Statement is furnished in connection with the solicitation
of proxies by and on behalf of the Board of Directors of Lord Abbett Research
Fund, Inc., a diversified, open-end management investment company incorporated
under the laws of Maryland (the "Fund"), for use at an annual meeting of
shareholders of the Fund to be held at 11:00 a.m. on Wednesday, June 19, 1996 at
the offices of Lord, Abbett & Co., the investment manager and principal
underwriter of the Fund ("Lord Abbett"), on the 11th floor of the General Motors
Building, 767 Fifth Avenue, New York, New York 10153, and at any adjournments
thereof. This proxy statement and the enclosed proxy card are first being
mailed to shareholders on or about April 17, 1996.
At the close of business on March 22, 1996 (the "Record Date"), there
were issued and outstanding 536,394 shares of the Large-Cap Series, 98,713
shares of the Mid-Cap Series, 150,755 shares of the Small-Cap Series (each such
series a "Series", and collectively the "Series") and 785,862 shares of the
Fund. Only shareholders of record at the close of business on the Record Date
are entitled to notice of, and to vote at, the annual meeting or any adjournment
thereof. Proxies will be solicited by mail. Additional solicitations may be
made by telephone, facsimile or personal contact by officers or employees of
Lord Abbett and its affiliates. The Fund may also request brokerage houses,
custodians, nominees, and fiduciaries who are shareholders of record to forward
proxy materials to beneficial owners. The cost of the solicitation will be
borne by Lord Abbett.
Shareholders are entitled to one vote for each full share, and a
proportionate vote for each fractional share, of the Fund held as of the Record
Date. Under Maryland law, shares owned by two or more persons (whether as joint
tenants, co-fiduciaries or otherwise) will be voted as follows, unless a written
instrument or court order providing to the contrary has been filed with the
Secretary of the Fund: (1) if only one votes, that vote binds all; (2) if more
- -
than one votes, the vote of the majority binds all; and (3) if more than one
-
votes and the vote is evenly divided, the vote will be cast proportionately. If
the enclosed form of proxy is properly executed and returned in time to be voted
at the meeting, the proxies named therein will vote the shares represented by
the proxy in accordance with the instructions marked thereon. Unmarked proxies
will be voted FOR each of the items described in this
<PAGE>
Proxy Statement and any other matters as deemed appropriate. A proxy may be
revoked by the signer at any time at or before the meeting by written notice to
the Fund, by execution of a later-dated proxy or by voting in person at the
meeting.
1. ELECTION OF DIRECTORS
The nominees for election as directors are Ronald P. Lynch, Robert S.
Dow, E. Thayer Bigelow, Stewart S. Dixon, John C. Jansing, C. Alan MacDonald,
Hansel B. Millican, Jr. and Thomas J. Neff, who have been nominated by the
Board of Directors. The individuals named as proxies intend to vote the
proxies, unless otherwise directed, in favor of the election of such nominees,
each of whom has agreed to serve as a director of the Fund. Management of the
Fund has no reason to believe that any nominee will be unable to serve as a
director. If any nominee should be unable to serve as a director, it is the
intention of the individuals named as proxies to vote for the election of such
person or persons as the Board of Directors may, in its discretion, recommend.
Information about each person nominated for election as a director is
set forth in the following table. The third column lists, for each current
director, the year in which he was elected to the board. All others are
nominees who are not currently members of the board. Except where indicated,
each of the persons listed in the table has held the principal occupation listed
opposite his name for the past five years.
<TABLE>
<CAPTION>
Names and Ages of Principal Occupation and Director of the Fund
Directors of the Fund Directorships Since
- ------------------------ -------------------------- ---------------------
<S> <C> <C>
Ronald P. Lynch/1,2/ Chairman of the Board of 1992
60 the Fund. Partner of Lord
Abbett.
Robert S. Dow/1,2/ President of the Fund. 1995
51 Partner of Lord Abbett.
E. Thayer Bigelow/2/ President and Chief
54 Executive of Time Warner
Cable Programming, Inc.
Formerly President and
Chief Operating Officer of
Home Box Office, Inc.
Stewart S. Dixon/2/ Partner in the law firm of
65 Wildman, Harrold, Allen &
Dixon.
John C. Jansing/2/ Retired. Former Chairman
70 of Independent Election
Corporation of America, a
proxy tabulating firm.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Names and Ages of Principal Occupation and Director of the Fund
Directors of the Fund Directorships Since
- ------------------------ -------------------------- ---------------------
<S> <C> <C>
C. Alan MacDonald/2/ General Partner, The
62 Marketing Partnership,
Inc., a full service
marketing consulting firm.
Formerly Chairman and
Chief Executive Officer of
Lincoln Snacks, Inc.,
manufacturer of branded
snack foods (1992-1994).
Formerly President and
Chief Executive Officer of
Nestle Foods Corp., and
prior to that, President
and Chief Executive
Officer of Stouffer Foods
Corp., both subsidiaries
of Nestle SA, Switzerland.
Currently serves as
Director of Den West
Restaurant Co., J. B.
Williams, and Fountainhead
Water Company.
Hansel B. Millican, Jr./2/ President and Chief 1992
67 Executive Officer of
Rochester Button Company.
Thomas J. Neff/2/ President, Spencer Stuart 1992
58 & Associates, an executive
search consulting firm.
</TABLE>
- ---------------------
1. "Interested person" of the Fund and Lord Abbett, within the meaning of the
Investment Company Act of 1940, as amended, because of his association with
Lord Abbett.
2. Also a director or trustee of the other Lord Abbett-sponsored funds.
Listed below are the numbers of shares of the Fund owned beneficially as of
March 22, 1996 by the directors, the nominees and the directors and officers as
a group. In each case, except as noted otherwise, the amounts shown are less
than 1% of the Fund's outstanding capital stock.
3
<PAGE>
<TABLE>
<CAPTION>
Name Number of Shares Beneficially Owned
- ---------------------------------- ------------------------------------
<S> <C>
Ronald P. Lynch 2,834
Robert S. Dow 11,960/1/
E. Thayer Bigelow 1,309
Stewart S. Dixon 118
John C. Jansing 1,690
C. Alan MacDonald 1,252
Hansel B. Millican, Jr. 3,470
Thomas J. Neff 468
Directors and Officers as a group 105,320/2/
</TABLE>
- ----------------------------
1. Represents 1.5% of the Fund's outstanding capital stock.
2. Represents 13.4% of the Fund's outstanding capital stock.
The Board of Directors has no standing committees. Upon election of
directors at this meeting, the Board of Directors intends to appoint an Audit
Committee, consisting of Messrs. Bigelow, MacDonald and Millican. The functions
to be performed by the Audit Committee will include recommendation of the
selection of independent public accountants for the Fund to the Board of
Directors for approval, review of the scope and results of audit and non-audit
services, the adequacy of internal controls and material changes in accounting
principles and practices and other matters when requested from time to time by
the directors (the "Independent Directors") who are not "interested persons" of
the Fund within the meaning of the Investment Company Act of 1940, as amended
(the "Act").
The Board of Directors of the Fund met twice during the fiscal year ended
November 30, 1995, and each director attended at least 75% of the total number
of meetings of the board.
No director or officer of the Fund has received any compensation from the
Fund for acting as a director or officer since the Fund's inception. The third
and fourth columns of the following table set forth information with respect to
the retirement plan for Independent Directors maintained by the other Lord
Abbett-sponsored funds (no such Plan was maintained by the Fund but such a plan
is expected to be adopted following this meeting). The fifth column sets forth
the total compensation accrued by such other funds (not the Fund) for the
Independent Directors. The second, third and fourth columns give information
for the most recent
4
<PAGE>
fiscal year; the fifth column gives information for the calendar year ended
December 31, 1995.
<TABLE>
<CAPTION>
For Year Ended
For the Fiscal Year Ended November 30, 1995 December 31, 1995
-------------------------------------------------------------------------- -------------------------
(I) (II) (III) (IV) (V)
- --------------------------- -------------------- ------------------------- ------------------------- ------------------------
Estimated Annual
Aggregate Pension or Retirement Benefits Upon Retirement Total Compensation
Compensation Benefits Accrued by the Proposed to be Paid by Accrued by the Fifteen
Accrued by the Fifteen Other Lord the Fifteen Other Lord Other Lord
Name of Director Fund/1/ Abbett-sponsored Funds/2/ Abbett-sponsored Funds/2/ Abbett-sponsored Funds/3/
- --------------------------- -------------------- ------------------------- ------------------------- ------------------------
<S> <C> <C> <C>
E. Thayer Bigelow None $ 9,772 $33,600 $41,700
Stewart S. Dixon None $22,472 $33,600 $42,000
John C. Jansing None $28,480 $33,600 $42,960
C. Alan MacDonald None $27,435 $33,600 $42,750
Hansel B. Millican, Jr. None $24,707 $33,600 $43,000
Thomas J. Neff None $16,126 $33,600 $42,000
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. The Fund has paid no fees to its Independent Directors.
2. The Fund has no retirement plan for Independent Directors. However, each
other Lord Abbett-sponsored fund has a retirement plan providing that
Independent Directors will receive annual retirement benefits for life
equal to 80% of their final annual retainers following retirement at or
after age 72 with at least 10 years of service. Each plan also provides for
a reduced benefit upon early retirement under certain circumstances, a pre-
retirement death benefit and actuarially reduced joint-and-survivor spousal
benefits. The amounts stated in column (IV) would be payable annually under
such retirement plans if the director were to retire at age 72 and the
annual retainers payable by such funds were the same as they are today.
The amounts set forth in column (III) were accrued by the Lord Abbett-
sponsored funds during the fiscal year ended November 30, 1995 with respect
to the retirement benefits set forth in column (IV). The Fund expects to
adopt such a retirement plan following the election of directors at this
meeting.
3. This column shows aggregate Independent Directors' fees, including
attendance fees for board and committee meetings, accrued by the other Lord
Abbett-sponsored funds (not by the Fund) during the year ended December 31,
1995.
Listed below are the executive officers of the Fund, other than Messrs.
Lynch and Dow who are listed above in the table of nominees. Each executive
officer has been associated with Lord Abbett for over five years, except as
indicated.
5
<PAGE>
Messrs. Allen, Carper, Cutler, Henderson, Morris, Nordberg and Walsh
are partners of Lord Abbett; the others listed below are employees.
Stephen I. Allen, age 42, Vice President since 1994.
Daniel E. Carper, age 44, Vice President since 1992.
Kenneth B. Cutler, age 63, Vice President and Secretary since 1992.
John J. Gargana, Jr., age 64, Vice President since 1992.
Thomas S. Henderson, age 64, Vice President since 1992.
Paul A. Hilstad, age 53, Vice President since 1995 (with Lord Abbett since 1995;
formerly Senior Vice President and General Counsel of American Capital
Management & Research, Inc.).
Thomas F. Konop, age 54, Vice President since 1992.
Robert G. Morris, age 51, Vice President since 1992.
E. Wayne Nordberg, age 59, Vice President since 1992.
Keith F. O'Connor, age 40, Treasurer since 1992.
Victor W. Pizzolato, age 63, Vice President since 1992.
John J. Walsh, age 60, Vice President since 1992.
Pursuant to the Fund's By-Laws, the election of each director of the Fund
requires the affirmative vote of a majority of the votes cast. If a shareholder
abstains from voting on this matter, then the shares held by such shareholder
shall be deemed present at the meeting for purposes of determining a quorum, but
shall not be deemed to have been voted on this matter. If a broker returns a
"non-vote" proxy, indicating a lack of authority to vote on this matter, then
the shares covered by such non-vote shall be deemed present at the meeting for
purposes of determining a quorum but shall not be deemed to have been voted on
this matter.
The Board of Directors recommends that the shareholders vote FOR the
election of each of the nominees as a director of the Fund.
6
<PAGE>
2. RATIFICATION OR REJECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche LLP as the
independent public accountants of the Fund for the fiscal year ending November
30, 1996. The Act requires that such selection be submitted for ratification or
rejection at the next annual meeting of shareholders if such meeting be held.
Deloitte & Touche LLP (or a predecessor firm) acted as the Fund's independent
public accountants for the year ended November 30, 1995, and since the Fund's
inception in 1992. Based on information in the possession of the Fund, and
information furnished by Deloitte & Touche LLP, the firm has no direct financial
interest and no material indirect financial interest in the Fund. A
representative of Deloitte & Touche LLP is expected to attend the meeting and
will be provided with an opportunity to make a statement and answer appropriate
questions.
Ratification of the selection of Deloitte & Touche LLP requires the
affirmative vote of a majority of the votes cast. If a shareholder abstains
from voting on this matter, then the shares held by such shareholder shall be
deemed present at the meeting for purposes of determining a quorum, but shall
not be deemed to have been voted on this matter. If a broker returns a "non-
vote" proxy, indicating a lack of authority to vote on this matter, then the
shares covered by such non-vote shall be deemed present at the meeting for
purposes of determining a quorum but shall not be deemed to have been voted on
this matter.
The Board of Directors recommends that shareholders vote to ratify the
selection of Deloitte & Touche LLP as the Fund's independent public accountants
for the fiscal year ending November 30, 1996.
3. NEW DISTRIBUTION PLAN AND AGREEMENT FOR THE CLASS A SHARES OF EACH
SERIES
At a meeting of the Board of Directors of the Fund held on March 14, 1996,
the directors of the Fund unanimously approved, subject to shareholder approval,
and determined to submit for approval to the shareholders of each Series, a new
Distribution Plan and Agreement pursuant to Rule 12b-1 under the Act (each, a
"Proposed Plan") for the existing class of shares of such Series. The existing
class of shares of each Series is to be designated the Class A Shares -- see
Item 4 below. The text of the Proposed Plan for the Large-Cap Series is
attached hereto as Exhibit A; the Proposed Plan for the Mid-Cap and Small-Cap
Series will be identical except for the names of the Series. The directors who
approved the Proposed Plan include all of the Independent Directors, none of
whom is an
7
<PAGE>
"interested person" of the Fund within the meaning of the Act or has
a direct or indirect financial interest in the operations of the Proposed Plan
or in any agreements related thereto.
Lord Abbett has advised the Fund that if the Proposed Plans for the Mid-Cap
and the Small-Cap Series are approved by the shareholders of those Series, Lord
Abbett will suspend the Plans pending sales of the shares of those Series to the
general public.
Under the Proposed Plan (except as to certain accounts for which tracking
data is not available), each Series will be authorized to pay to Lord Abbett
Distributor LLC ("Lord Abbett Distributor") annual fees totaling 0.50% of the
average annual net assets attributable to Class A Shares of such Series,
consisting of (a) service fees and (b) distribution fees, each payable quarterly
- -
and each not to exceed a maximum of 0.25% of such average annual net assets.
Payments made under the Proposed Plan may be used by Lord Abbett Distributor for
remittance to institutions and persons permitted by law to receive such payments
("Authorized Institutions") and/or for use by Lord Abbett Distributor to provide
continuing services to shareholder accounts not serviced by Authorized
Institutions and, with board approval, to finance any activity which is
primarily intended to result in the sale of Class A Shares. Any such payments
to finance activities primarily intended to result in the sale of Class A Shares
would be subject to the ceiling on distribution fees of 0.25% of the average
annual net assets attributable to the Class A Shares (the "Distribution Fee
Ceiling").
Subject to the approval by the shareholders of a Series of its Proposed
Plan, the Fund's Board of Directors has authorized the Series to pay annual
service fees at an initial level of 0.25% of the average daily net asset value
of Class A Shares sold. Subject to such approval, the board has also approved
each Series to pay two distribution fees: (1) A one-time distribution fee,
payable at the time of sale, on all Class A Shares sold by Authorized
Institutions (i) at the $1 million level or (ii) to retirement plans with 100 or
- --
more eligible employees. Such distribution fee will scale down at certain
breakpoints, as follows: 1% of the first $5 million, 0.55% of the next $5
million, 0.50% of the next $40 million and 0.25% over $50 million of shares sold
to a retirement plan or other qualifying purchaser within a 12-month period
(beginning when the first purchase is made at net asset value). (2) Annual
supplemental payments to dealers who have accounts comprising a significant
percentage of such Series' Class A Share assets and having a lower than average
redemption rate and who have a satisfactory program for the promotion of Class A
Shares. Any such payments will be 0.10% per annum of the average assets of the
Series represented by the Class A Share accounts of qualifying dealers. This
supplemental payment is intended by the Board of Directors to enhance the
Series' relationships with those dealers most likely to have a significant
impact on the growth of
8
<PAGE>
its Class A Shares. Any such one-time distribution fee and any such annual
supplemental payment will be charged against the Distribution Fee Ceiling.
The board will be authorized under the Proposed Plan for each Series,
without further shareholder vote, to increase the amount of distribution fees up
to the Distribution Fee Ceiling. This increased spending limit is intended
primarily to permit the directors to increase the amount to be spent for
distribution to meet changing sales competition. The directors believe it is
desirable to be able to make these changes without further shareholder approval
because additional shareholder meetings would be time-consuming and costly to
the Series and their shareholders. The Board of Directors will approve
additional charges under this authority only if a majority of the Independent
Directors conclude in their business judgment that there is a reasonable
likelihood that the increase will benefit the Series and their
shareholders.
Holders of shares of a Series on which the distribution fee of up to 1% has
been paid will be required to pay to the Series a contingent deferred
reimbursement charge ("CDRC") of 1% of the original cost or the then net asset
value, whichever is less, of such shares if they are redeemed out of the Lord
Abbett-sponsored family of funds on or before the end of the twenty-fourth month
after the month in which the purchase occurred except that no CDRC would be
payable in connection with redemptions by retirement plans attributable to any
benefit payment or distribution of any excess contribution thereunder. If the
shares are exchanged into another Lord Abbett fund or series and are thereafter
redeemed out of the Lord Abbett family on or before the end of such twenty-
fourth month, the charge is collected for the Fund by the other fund. The Fund
collects such a charge for other Lord Abbett-sponsored funds and series in
similar situations. CDRC payments will have the effect of reducing the amount
of the distribution fees paid by a Series for the purpose of complying with the
Distribution Fee Ceiling. As in the case of the specific distribution fees
authorized by the Board of Directors of the Fund, the CDRC authorized from time
to time by the board for the Class A Shares of a Series will be described in the
then current prospectus of the Fund.
In considering whether to recommend the Proposed Plans for approval, the
board considered, among other things, the factors set forth below:
(i) Desirability of 12b-1 Plans to Compete Successfully in the Industry.
-------------------------------------------------------------------
The board believes that the Proposed Plans will provide an additional incentive
to Authorized Institutions to sell the Class A Shares of the Large-Cap Series
(and, if and when implemented, of the Mid-Cap and the Small-Cap Series) and will
aid in the growth of the assets attributable to the Class A Shares. A
consistent cash flow from a higher level of sales is expected to enhance the
ability of
9
<PAGE>
the affected Series to take advantage of buying opportunities without
having to make unwarranted liquidations of portfolio securities and to meet
redemptions. Although the expense ratio of the Large-Cap Series is expected to
increase initially by 0.25% as a result of the adoption of the Proposed Plan for
such Series (and the expense ratios of the Mid-Cap and Small-Cap series would be
expected to increase initially by a comparable amount if the Proposed Plans for
those Series were implemented), and could increase more thereafter, in the view
of the board, the competitive situation in the industry involving adoption of
12b-1 plans by an increasing number of funds makes the Proposed Plans a
reasonable measure to encourage additional sales and discourage redemptions and
to provide reasonable assurance of the long-term viability of the three
Series.
(ii) Incentives for Authorized Institutions to Provide Better Service to
-------------------------------------------------------------------
Shareholders. The board believes that the Proposed Plans will give to
- ------------
Authorized Institutions an appropriate incentive to provide better service to
the Fund's shareholder accounts than would otherwise be the case.
(iii) Flexibility in Adapting Distribution Fees to Meet Industry-Wide
---------------------------------------------------------------
Changes. During the last several years, there has been significantly increased
- -------
competition and pricing experimentation in the mutual fund industry. As the
pace of change increases, the Board of Directors believes it will be useful to
be able to respond quickly to marketplace pressures, and change in appropriate
cases the amount of the Class A 12b-1 distribution fees to be paid, without
unnecessarily burdening the shareholders with the costs of additional proxy
solicitations.
(iv) Flexibility in Distributor's Use of Payments. Lord Abbett has advised
--------------------------------------------
the Board of Directors of the Fund that allowing Lord Abbett Distributor to
retain fees received from the Series to (i) provide continuing information and
-
investment services to shareholder accounts and (ii) finance, with board
--
approval, any activity which is primarily intended to result in the sale of
Class A Shares, will provide useful flexibility and will be in line with common
practice in the industry.
In light of the anticipated benefits to each Series and its shareholders as
a result of adopting the Proposed Plan for that Series, the directors of the
Fund have concluded, in the exercise of reasonable business judgment and in
light of their fiduciary duties, that there is a reasonable likelihood that each
Proposed Plan will benefit the Series affected and its shareholders. There can,
however, be no assurance that the anticipated benefits will be realized.
Set forth in the table below is a summary comparison for each Series of the
Series' expenses, on a current and pro-forma basis taking into account the fees
that could be paid under the Proposed Plan for that Series. The annual
operating expenses shown in the second column are the Series' actual expenses
for the fiscal
10
<PAGE>
year ended November 30, 1995. The expenses shown in the third column represent,
on a pro-forma basis, such actual expenses of the Series adjusted to show the
effect of the maximum distribution fee the board would be authorized to approve
under the Proposed Plan. The fourth column shows such pro-forma annual operating
expenses based on the distribution fee rate the board has approved subject to
approval of the Proposed Plan by shareholders of the Large-Cap Series. The
example set forth below is not a representation of past or future expenses.
Actual expenses may be greater or less than thoseshown.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
I II III IV
- ------------------------------------------------------------------------------------------------------------------
Pro-Forma
(reflecting
Pro-Forma estimated
(reflecting amounts that
maximum amounts would have been
Year ended payable under the paid under the
LARGE-CAP SERIES November 30, 1995 Proposed Plan) Proposed Plan)
----------------- ------------- -------------
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
- ------------------------------------------------------------------------------------------------------------------
Maximum Sales Load/1/ on Purchases None None None
Deferred Sales Load/1/ None None/2/ None/2/
- ------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ------------------------------------------------------------------------------------------------------------------
Management Fee 0.00%/3/ 0.00%/3/ 0.00%/3/
12b-1 Fees 0.00% 0.50%/4/ 0.25%/5/
Other Expenses 0.00%/3/ 0.00% /3/ 0.00%/3/
- ------------------------------------------------------------------------------------------------------------------
Total Operating Expenses 0.00%/3/ 0.50%/3/ 0.25%/3/
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. 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.
11
<PAGE>
<TABLE>
<CAPTION>
1 year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Current $ 58/3,6/ $ 58/3,6/ 58 /3,6/ $ 58/3,6/
- -------------------------------------------------------------------------------
Pro-Forma (maximum) $74/3,4,6/ $109/3,4,6/ $147/3,4,6/ $252/3,4,6/
- -------------------------------------------------------------------------------
Pro-Forma (estimated) $72/3,5,6/ $102/3,5,6/ $135/3,5,6/ $226/3,5,6/
- -------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
I II III IV
- ---------------------------------------------------------------------------------------------------------------
Pro-Forma
(reflecting
Pro-Forma estimated
(reflecting amounts that
maximum amounts would have been
Year ended payable under the paid under the
MID-CAP SERIES November 30, 1995 Proposed Plan) Proposed Plan)
----------------- ------------- -------------
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
- ---------------------------------------------------------------------------------------------------------------
Maximum Sales Load/1/ on Purchases None None None
Deferred Sales Load/1/ None None None
- ---------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------------------
Management Fee 0.00%/3/ 0.00%/3/ 0.00%/3/
12b-1 Fees 0.00% 0.50%/4/ 0.25%/5/
Other Expenses 0.00%/3/ 0.00% /3/ 0.00%
- ---------------------------------------------------------------------------------------------------------------
Total Operating Expenses 0.00%/3/ 0.50%/3/ 0.25%/3/
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. 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.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
1 year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Current $ 58/3,6/ $ 58/3,6/ 58 /3,6/ $ 58/3,6/
- --------------------------------------------------------------------------
Pro-Forma (maximum) $74/3,4,6/ $109/3,4,6/ $147/3,4,6/ $252/3,4,6/
- --------------------------------------------------------------------------
Pro-Forma (estimated) $72/3,5,6/ $102/3,5,6/ $135/3,5,6/ $226/3,5,6/
- --------------------------------------------------------------------------
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
I II III IV
- ----------------------------------------------------------------------------------------------------------------
Pro-Forma
(reflecting
Pro-Forma estimated
(reflecting amounts that
maximum amounts would have been
Year ended payable under the paid under the
SMALL-CAP SERIES November 30, 1995 Proposed Plan) Proposed Plan)
----------------- ------------- -------------
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
- ----------------------------------------------------------------------------------------------------------------
Maximum Sales Load/1/ on Purchases None None None
Deferred Sales Load/1/ None None None
- ----------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ----------------------------------------------------------------------------------------------------------------
Management Fee 0.00%/3/ 0.00%/3/ 0.00%/3/
12b-1 Fees 0.00% 0.50%/4/ 0.25%/5/
Other Expenses 0.00%/3/ 0.00% /3/ 0.00%
- ----------------------------------------------------------------------------------------------------------------
Total Operating Expenses 0.00%/3/ 0.50%/3/ 0.25%/3/
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. 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.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
1 year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Current $ 58/3,6/ $ 58/3,6/ 58/3,6/ $ 58/3,6/
- --------------------------------------------------------------------------
Pro-Forma (maximum) $74/3,4,6/ $109/3,4,6/ $147/3,4,6/ $252/3,4,6/
- --------------------------------------------------------------------------
Pro-Forma (estimated) $72/3,5,6/ $102/3,5,6/ $135/3,5,6/ $226/3,5,6/
- --------------------------------------------------------------------------
</TABLE>
1. Sales "load" is referred to as sales "charge" and "deferred sales load" is
referred to as "contingent deferred reimbursement charge" or "CDRC"
throughout this Proxy Statement. Investors should be aware that long-term
shareholders may pay, under the Proposed Plan, more than the economic
equivalent of the maximum front-end sales charge permitted by certain rules
of the National Association of Securities Dealers, Inc.
2. Redemptions of shares on which a Rule 12b-1 sales distribution fee has been
paid will be subject to a CDRC of up to 1% of the original cost or the then
net asset value, whichever is less, of all shares so purchased which are
redeemed out of the Lord Abbett-sponsored family
14
<PAGE>
of funds on or before the end of the twenty-fourth month after the month in
which the purchase occurred, subject to certain exceptions described
herein.
3. Although not obligated to, Lord Abbett may waive some or all of its
management fee, and subsidize other expenses, with respect to each Series.
It has waived the management fee and subsidized all other expenses with
respect to each Series during the past fiscal year (and continues to do
so). Lord Abbett currently expects that such waiver and subsidy with
respect to the Large-Cap Series will cease upon the commencement of the
offering of shares of the Large-Cap Series to the general public. Absent
such waiver and subsidy, the management fee, other expense and total
operating expense figures above would have been 0.75%, 0.27% and 1.02%,
respectively, for the Large-Cap Series and 0.75%, 0.40% and 1.15%,
annualized, respectively, for the Mid-Cap and the Small-Cap Series.
4 Reflects the maximum annual 12b-1 fees of 0.50% that could be paid under
the Proposed Plan in any year, consisting of a distribution fee of 0.25%
and a service fee of 0.25%.
5. Reflects the estimated level of service and distribution fees that would
have been paid under the Proposed Plan had it been in effect for the Fund's
last fiscal year. To date, none of the Series has been sold through
dealers, and so no supplemental distribution payments are included in these
estimates.
6. Based on total current and pro-forma operating expenses shown in the table
above.
If the shareholders of a Series approve the Proposed Plan for that Series,
such Proposed Plan shall, unless terminated as described below, become effective
July 12, 1996 and continue in effect until July 12, 1997 and from year to year
thereafter only so long as such continuance is specifically approved, at least
annually, by the Fund's Board of Directors and its Independent Directors by a
vote cast in person at a meeting called for the purpose of voting on such
continuance. (However, as discussed above, the Proposed Plans of the Mid-Cap and
Small-Cap Series will not be implemented on July 12, 1996.) Each Proposed Plan
may be terminated at any time by a vote of a majority of the Independent
Directors or by a shareholder vote in compliance with Rule 12b-1 under the Act.
No Proposed Plan may be amended to increase materially the amount to be spent
for distribution above the maximum amounts set forth in such Proposed Plan
without a shareholder vote in compliance with Rule 12b-1 under the Act. All
material amendments must be approved by a majority of the Independent
Directors.
Each Proposed Plan provides that while it is in effect, the selection and
nomination of Independent Directors is committed to the discretion of the
Independent Directors then sitting on the board. This does not prevent the
involvement of others in such selection and nomination if the final decision
on any such selection or nomination is approved by a majority of the
Independent Directors.
Pursuant to Rule 12b-1 under the Act, approval of a Proposed Plan requires
the affirmative vote of a "majority" (as defined in the Act) of the voting
15
<PAGE>
securities of the Series affected. A "majority" vote for a Series is defined in
the Act as the vote of the holders of the lesser of: (i) 67% or more of the
-
voting securities of such Series present or represented by proxy at the
shareholders meeting, if the holders of more than 50% of the outstanding voting
securities of such Series are present or represented by proxy, or (ii) more
--
than 50% of the outstanding voting securities of such Series. The effect of an
abstention or broker non-vote is the same as a vote against this proposal.
The Board of Directors recommends that shareholders of each Series vote in
favor of adoption of the Proposed Plan for such Series.
4. AMENDMENT OF THE ARTICLES OF INCORPORATION TO AUTHORIZE CLASSES OF EACH
SERIES OF SHARES AND TO CONFIRM THAT THE FUND MAY IMPOSE CONTINGENT
DEFERRED SALES CHARGES IN CONNECTION WITH REDEMPTIONS
On March 14, 1996, the Fund's Board of Directors unanimously voted to
approve an amendment to the Articles of Incorporation of the Fund to give the
Fund's Board of Directors the power to classify the Fund's shares into classes
within series, and voted to submit such amendment to the Fund's shareholders for
approval. The full text of the amendment is attached hereto as Exhibit B.
The Fund's Articles of Incorporation presently designate three classes
(referred to herein as "Series") of shares of capital stock and do not authorize
the Board of Directors to create classes within Series. The Board of Directors
believes that the Fund's best interests will be served if the Board of Directors
is able to create classes of shares within a Series, with each share of a
Series, regardless of class, sharing pro rata (based on net asset value) in the
portfolio and income of the Series and in the Series' expenses, except for
differences in expenses resulting from different Rule 12b-1 plans for the
various classes and possibly other class-specific expenses. It is expected that
implementation of such a multi-class fund structure will (i) enable investors
-
in a Series to choose the distribution option that best suits their individual
situations, (ii) facilitate distribution of the Fund's shares, and (iii)
-- ---
maintain the competitive position of the Fund in relation to other funds that
have implemented or are seeking to implement similar distribution arrangements.
For all Series, the existing class of shares, to be designated the "Class
A Shares," will continue to be offered as described in the Fund's current
prospectus, except that the Board of Directors is recommending that shareholders
of each Series approve a new Distribution Plan and Agreement pursuant to Rule
12b-1 under the Act that, if approved, will be applicable to the Class A Shares
for such Series. See Item 3 above.
16
<PAGE>
If the proposed amendment to the Fund's Articles of Incorporation is
approved, the Board of Directors will be authorized to create and issue one or
more additional classes of shares within the existing Series and to create
additional series. Lord Abbett has advised the Board of Directors of the Fund
that, with respect to the Large-Cap Series, it intends to propose to the board
in the near future that the board authorize the Fund to issue a second class of
shares, to be designated the "Class B Shares" of such Series. If authorized, the
Class B Shares are expected to be sold at net asset value without an initial
sales charge and to be subject to a Rule 12b-1 plan that involves annual
distribution and service fee payments for the account of such class equal to 1%
of the average net asset value of the Class B Shares. If redeemed for cash
before a certain date, the Class B Shares are expected to be subject to a
contingent deferred sales charge ("CDSC") that (i) is payable to the distributor
-
of such-shares, rather than subject to a contingent deferred reimbursement
charge payable to the Fund as is the case with the Class A Shares of the Large-
Cap Series, (ii) will be substantially larger than the 1% CDRC charged on early
--
redemptions of certain of such Class A Shares and (iii) will scale down to zero
---
over the period from sale to the expiration date of the CDSC. The Class B Shares
will convert automatically into Class A Shares at net asset value after a period
of time.
Shares of all classes of a Series will vote together on all matters
affecting the Series, except for matters, such as approval of a Rule 12b-1 plan
or a related service plan, affecting only a particular class or classes. Shares
of all Series will vote together on all matters affecting the Fund, except for
matters affecting only one or more particular Series. All shares voting on a
matter will have identical voting rights. All issued shares will be fully paid
and non-assessable, and shareholders will have no pre-emptive or other right to
subscribe to any additional shares. All shares within a series will have the
same rights and be subject to the same limitations set forth in the Articles of
Incorporation with respect to dividends, redemptions and liquidation except for
differences resulting from class-specific Rule 12b-1 plans and related service
plans and certain other class-specific expenses.
The proposed amendment to the Fund's Articles of Incorporation will also
make clear that the Fund may impose a CDSC and other charges (which charges may
vary within and among the classes) payable upon redemption as may be established
from time to time by the Board of Directors of the Fund. The Fund's Articles of
Incorporation currently provide that the Fund may deduct a redemption charge not
exceeding 1% of the net asset value of the shares being redeemed. The proposed
amendment is deemed advisable in order to avoid any question as to whether the
proposed B Share CDSC referred to above, which in some instances may exceed 1%,
may be imposed in connection with the proposed issuance of the Class B Shares.
The Board of Directors has no intention of increasing the CDRC proposed to be
payable on certain early redemptions of some Class A Shares of the Large-Cap
Series. See Item 3 above.
17
<PAGE>
Approval of the proposed amendment to the Articles of Incorporation
requires an affirmative vote of more than 50% of the outstanding shares of the
Fund. The effect of an abstention or broker non-vote is the same as a vote
against this proposal.
The Board of Directors recommends that shareholders vote in favor of this
proposed amendment to the Articles of Incorporation.
5. OTHER INFORMATION
Management is not aware of any matters to come before the meeting other
than those set forth in the notice. If any such other matters do come before the
meeting, the individuals named as proxies will vote, act, and consent with
respect thereto in accordance with their best judgment.
a. Timeliness of Shareholder Proposals .
------------------------------------
Any shareholder proposals to be presented for action at the Fund's next
shareholder meeting pursuant to the provisions of Rule 14a-8 under the
Securities Exchange Act of 1934, as amended, must be received at the Fund's
principal executive offices within a reasonable time in advance of the date
solicitation is made for such meeting. The Fund does not intend to hold another
annual or special meeting of shareholders unless required to do so by the Act.
b. Investment Adviser and Underwriter.
-----------------------------------
Lord, Abbett & Co., 767 Fifth Avenue, New York, New York, 10153, acts as
investment adviser and principal underwriter with respect to the Fund.
c. Annual Report Available Upon Request.
-------------------------------------
The Fund will furnish, without charge, a copy of the Fund's most recent
annual report and the most recent semi-annual report succeeding the annual
report, if any, to a shareholder upon request. A shareholder may obtain such
report(s) by writing to the Fund or by calling 800-874-3733.
d. Portfolio Transactions.
----------------------
The Fund's policy is to obtain best execution on all portfolio
transactions, which means that the Fund seeks to have purchases and sales of
portfolio securities executed at the most favorable prices, considering all
costs of the transaction including brokerage commissions and dealer markups and
markdowns and
18
<PAGE>
taking into account the full range and quality of the brokers' services.
Consistent with obtaining best execution, the Fund may pay, as described below,
a higher commission than some brokers might charge on the same transactions. The
Fund's policy with respect to best execution governs the selection of brokers or
dealers and the market in which the transaction is executed. To the extent
permitted by law, the Fund may, if considered advantageous, make a purchase from
or sale to another Lord Abbett sponsored fund without the intervention of any
broker-dealer.
Broker-dealers are selected on the basis of their professional capacity
and the value and quality of their brokerage and research services. Normally,
the selection is made by traders who are officers of the Fund and also are
employees of Lord Abbett. These traders do the trading as well for other
accounts -- investment companies (of which they are also officers) and other
investment clients -- managed by Lord Abbett. They are responsible for obtaining
best execution.
The Fund pays a commission rate that the Fund believes is appropriate to
give maximum assurance that the Fund's brokers will provide to the Fund, on a
continuing basis, the highest level of brokerage services available. While the
Fund does not always seek the lowest possible commissions on particular trades,
the Fund believes that its commission rates are in line with the rates that many
other institutions pay. The Fund's traders are authorized to pay brokerage
commissions in excess of those that other brokers might accept on the same
transactions in recognition of the value of the services performed by the
executing brokers, viewed in terms of either the particular transaction or the
overall responsibilities of Lord Abbett with respect to the Fund and the other
accounts they manage. Such services include showing the Fund trading
opportunities including blocks, a willingness and ability to take positions in
securities, knowledge of a particular security or market, proven ability to
handle a particular type of trade, confidential treatment, promptness and
reliability.
Some of the Fund's brokers also provide research services at least some of
which are useful to Lord Abbett in their overall responsibilities with respect
to the Fund and the other accounts they manage. Research includes the furnishing
of analyses and reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts and
trading equipment and computer software packages, acquired from third-party
suppliers, that enable Lord Abbett to access various information bases. Such
services may be used by Lord Abbett in servicing all their accounts, and not all
of such services will necessarily be used by Lord Abbett in connection with
their management of the Fund; conversely, such services furnished in connection
with brokerage on other accounts managed by Lord Abbett may be used in
connection with their management of the Fund, and not all of such services will
necessarily be used by Lord Abbett in connection with their advisory services to
such other accounts. The Fund has been advised by Lord Abbett that research
services received from brokers cannot be allocated to any particular
19
<PAGE>
account, are not a substitute for Lord Abbett's services but are supplemental to
their own research effort and, when utilized, are subject to internal analysis
before being incorporated by Lord Abbett into their investment process. As a
practical matter, it would not be possible for Lord Abbett to generate all of
the information presently provided by brokers. While receipt of research
services from brokerage firms has not reduced Lord Abbett's normal research
activities, the expenses of Lord Abbett could be materially increased if it
attempted to generate such additional information through its own staff and
purchased such equipment and software packages directly from the suppliers.
No commitments are made regarding the allocation of brokerage business to
or among brokers and trades are executed only when they are dictated by
investment decisions of the Fund to purchase or sell portfolio securities.
If two or more broker-dealers are considered capable of offering the
equivalent likelihood of best execution, the broker-dealer who has sold the
Fund's 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 the Fund, transactions will, to the extent practicable, be allocated
among all participating accounts in proportion to the amount of each order and
will be executed daily until filled so that each account shares the average
price and commission cost of each day. Other clients who direct that their
brokerage business be placed with specific brokers or who invest through wrap
accounts introduced to Lord Abbett by certain brokers may not participate with
the Fund in the buying and selling of the same securities as described above. If
these clients wish to buy or sell the same security as the Fund does, they may
have their transactions executed at times different from the Fund's transactions
and thus may not receive the same price or incur the same commission cost as the
Fund does.
The Fund will not seek "reciprocal" dealer business (for the purpose of
applying commissions in whole or in part for the Fund's benefit or otherwise)
from broker-dealers as consideration for the direction to them of portfolio
business.
For the fiscal years ended November 30, 1995, 1994 and 1993, the Large-Cap
Series paid total commissions to independent broker-dealers of $7,214, $8,033
and $7,817. For the period from August 1, 1995 (commencement of
20
<PAGE>
operations) to November 30, 1995, the Mid-Cap Series paid total commissions to
independent broker-dealers of $1,689.
LORD ABBETT RESEARCH
FUND, INC.
Kenneth B. Cutler
Vice President and Secretary
21
<PAGE>
EXHIBIT A
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Research Fund, Inc. -- Large-Cap Series -- Class A Shares
---------------------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 12, 1996 by and
between LORD ABBETT RESEARCH FUND, INC., a Maryland corporation (the "Fund"), on
behalf of its LARGE-CAP SERIES (the "Series"), and LORD ABBETT DISTRIBUTOR LLC,
a New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's shares of capital
stock, including the Series' Class A shares (the "Shares") pursuant to the
Distribution Agreement between the Fund and the Distributor, dated as of the
date hereof (the "Distribution Agreement").
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") for the Series with the Distributor, as permitted by Rule 12b-1 under
the Act, pursuant to which the Series may make certain payments to the
Distributor to be used by the Distributor or paid to institutions and persons
permitted by applicable law and/or rules to receive such payments ("Authorized
Institutions") in connection with sales of Shares and/or servicing of accounts
of shareholders holding Shares.
WHEREAS, the Fund's Board of Directors has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agreements with
Authorized Institutions (the "Agreements") which may provide for the payment to
such Authorized Institutions of distribution and service fees which the
Distributor receives from the Series in order to provide additional incentives
to such Authorized Institutions (i) to sell Shares and (ii) to provide
- --
continuing information and investment services to their accounts holding Shares
and otherwise to encourage their accounts to remain invested in the Shares.
2. The Fund also hereby authorizes the Distributor to use payments received
hereunder from the Series in order to (a) finance any activity which is
-
primarily intended to result in the sale of Shares and (b) provide continuing
-
information and investment services to shareholder accounts not serviced by
Authorized
<PAGE>
Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the Shares;
provided that (i) any payments referred to in the foregoing clause (a) shall not
- -------- -
exceed the distribution fee permitted to be paid at the time under paragraph 3
of this Plan and shall be authorized by the Board of Directors of the Fund by a
vote of the kind referred to in paragraph 10 of this Plan and (ii) any payments
--
referred to in clause (b) shall not exceed the service fee permitted to be paid
at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for remittance
to Authorized Institutions and/or use by the Distributor pursuant to this Plan
(a) service fees and (b) distribution fees, each at an annual rate not to exceed
- -- -
.25 of 1% of the average annual net asset value of Shares outstanding. The
Board of Directors of the Fund shall from time to time determine the amounts,
within the foregoing maximum amounts, that the Series may pay the Distributor
hereunder. Any such fees (which may be waived by the Authorized Institutions in
whole or in part) may be calculated and paid quarterly or more frequently if
approved by the Board of Directors of the Fund. Such determinations and
approvals by the Board of Directors shall be made and given by votes of the kind
referred to in paragraph 10 of this Plan. Payments by holders of Shares to the
Series of contingent deferred reimbursement charges relating to distribution
fees paid by the Series hereunder shall reduce the amount of distribution fees
for purposes of the annual 0.25% distribution fee limit. The Distributor will
monitor the payments hereunder and shall reduce such payments or take such other
steps as may be necessary to assure that (i) the payments pursuant to this Plan
-
shall be consistent with Article III, Section 26, subparagraphs (d)(2) and (5)
of the Rules of Fair Practice of the National Association of Securities Dealers,
Inc. with respect to investment companies with asset-based sales charges and
service fees, as the same may be in effect from time to time and (ii) the Series
--
shall not pay with respect to any Authorized Institution service fees equal to
more than .25 of 1% of the average annual net asset value of Shares sold by (or
attributable to Shares or shares sold by) such Authorized Institution and held
in an account covered by an Agreement.
4. The net asset value of the Shares shall be determined as provided in the
Articles of Incorporation of the Fund. If the Distributor waives all or a
portion of the fees which are to be paid by the Series hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Series pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Chief Financial Officer,
is hereby authorized to direct the disposition of monies paid or payable by the
Series hereunder and shall provide to the Fund's Board of Directors, and the
directors shall review at least quarterly, a written report of the amounts so
expended pursuant to this Plan and the purposes for which such expenditures were
made.
2
<PAGE>
6. Neither this Plan nor any other transaction between the parties hereto
pursuant to this Plan shall be invalidated or in any way affected by the fact
that any or all of the directors, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as may
otherwise be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's best
judgment and good faith efforts in rendering services under this Plan. Other
than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund, the Series or any of the shareholders,
creditors, directors, or officers of the Fund; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Fund or the Series' shareholders 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.
8. This Plan shall become effective upon the date hereof, and shall continue
in effect for a period of more than one year from that date only so long as such
continuance is specifically approved at least annually by a vote of the Board of
Directors of the Fund, including the vote of a majority of the directors who are
not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
renewal.
9. This Plan may not be amended to increase materially the amount to be spent
by the Series hereunder above the maximum amounts referred to in paragraph 3 of
this Plan without a shareholder vote in compliance with Rule 12b-1 and Rule 18f-
3 under the Act as in effect at such time, and each material amendment must be
approved by a vote of the Board of Directors of the Fund, including the vote of
a majority of the directors who are not "interested persons" of the Fund and who
have no direct or indirect financial interest in the operation of this Plan or
in any agreement related to this Plan, cast in person at a meeting called for
the purpose of voting on such amendment. Amendments to this Plan which do not
increase materially the amount to be spent by the Series hereunder above the
maximum amounts referred to in paragraph 3 of this Plan may be made pursuant to
paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Directors of the Fund, including the vote of a majority of the directors who
3
<PAGE>
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Directors of the Fund may, by such a vote, interpret
this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the directors of the Fund who are not
-
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
-
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such disinterested directors. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meanings as those terms are
defined in the Act.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on its behalf by its duly authorized representative as
of the date first above written.
LORD ABBETT RESEARCH FUND, INC.
By:________________________________
President
ATTEST:
_____________________________
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By:_____________________________
4
<PAGE>
EXHIBIT B
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION OF THE FUND AUTHORIZING
THE BOARD OF DIRECTORS TO CREATE NEW CLASSES AND SERIES OF SHARES OF THE
CAPITAL STOCK OF THE FUND AND CONFIRMING THAT THE FUND MAY IMPOSE CONTINGENT
DEFERRED SALES CHARGES IN CONNECTION WITH ITS RULE 12B-1 PLANS
________________________________________________________________________
The following text shows those provisions of the Articles of Incorporation of
the Fund that are to be amended; the text that is lined through shows deletions
and the text that is double underlined indicates additions.
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 Board of
Directors of the Corporation shall have full power and authority, from time to
time , to classify or reclassify any unissued Shares , including, without
limitation, the power to classify or reclassify unissued shares into series, and
to classify or reclassify a series into one or more classes of stock that may be
invested together in the common investment portfolio in which the series is
invested, by setting or changing the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications, or
terms or conditions of redemption of such shares of stock. All Shares of a
series shall represent the same interest in the Corporation and have the same
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption as the other Shares of that series, except to the extent that the
Board of Directors provides for differing preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption of Shares of classes of
such series as determined pursuant to Articles Supplementary filed for record
with the State Department of Assessments and Taxation of Maryland, or as
otherwise determined pursuant to these Articles or by the Board of Directors in
accordance with law. The Shares shall initially be classified into three series
designated initially as the "Large-Cap Series", consisting of 50,000,000 Shares,
the "Mid-Cap Series", consisting of 50,000,000 Shares and the "Small-Cap
Series", consisting of 50,000,000 Shares. Prior to the first classification of
a series into additional classes, all outstanding Shares of such series shall be
of a single class. Notwithstanding any other provision of these Articles, upon
the classification of unissued Shares into additional series, the Board of
Directors shall specify a legal name for the new series in appropriate
<PAGE>
charter documents filed for record with the State Department of Assessments and
Taxation of Maryland providing for such name change and classification, and upon
the first classification of a series into additional classes, the Board of
Directors shall specify a legal name for the outstanding class, as well as for
the new class or classes, in appropriate charter documents filed for record with
the State Department of Assessments and Taxation of Maryland providing for such
name change and classification.
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 series and classes of series of
Shares is as follows, unless otherwise set forth in Articles Supplementary filed
for record with the State Department of Assessments and Taxation of Maryland
or otherwise determined pursuant to these Articles:
(a) Assets Belonging to Series. All consideration received or
--------------------------
receivable by the Corporation for the issuance or sale of
Shares of a particular series, together with all assets in
which such consideration is invested or reinvested, all
income, earnings, profits and proceeds thereof, including
any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may
be, shall irrevocably belong to that series for all
purposes, subject only to the rights of creditors, and shall
be so recorded upon the books of account of the Corporation.
Such consideration, assets, income, 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 series as
provided in the following sentence, are herein referred to
as "assets belonging to" that series. 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 series
(collectively "Unallocated Items"), the Board of Directors
shall allocate such Unallocated Items to and among any one
or more of the series 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
2
<PAGE>
particular series shall belong to that series. Each such
allocation by the Board of Directors shall be conclusive and
binding upon the stockholders of all series for all
purposes.
(b) Liabilities Belonging to Series. The assets belonging to
--------------------------------
each particular series shall be charged with the
liabilities of the Corporation in respect of that series,
including any class thereof, and with all expenses, costs,
charges and reserves attributable to that series, including
any such 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 series,
including any class thereof, as provided in the following
sentence, so charged to that series, are herein referred to
as "liabilities belonging to" that series. 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 series
(collectively "Unallocated Items"), the Board of Directors
shall allocate and charge such Unallocated Items to and
among any one or more of the series 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 series shall belong to that series. Each such
allocation by the Board of Directors shall be conclusive and
binding upon the stockholders of all series for all
purposes. To the extent determined by the Board of
Directors, liabilities and expenses relating solely to a
particular class (including, without limitation,
distribution expenses under a Rule 12b-1 plan and
administrative expenses under an administration or service
agreement, plan or other arrangement, however designated,
which may be adopted for such class) shall be allocated to
and borne by such class and shall be appropriately reflected
(in the manner determined by the Board of Directors) in the
net asset value, dividends and distributions and liquidation
rights of the shares of such class.
3
<PAGE>
(c) Dividends. Dividends and distributions on Shares of a
---------
particular series may be paid to the holders of Shares of
that series at such times, in such manner and from such of
the income and capital gains, accrued or realized, from the
assets belonging to that series, after providing for actual
and accrued liabilities belonging to that series, as the
Board of Directors may determine. Such dividends and
distributions may vary between or among classes of a series
to reflect differing allocations of liabilities and expenses
of such series between or among such classes to such extent
as may be provided in or determined pursuant to Articles
Supplementary filed for record with the State Department of
Assessments and Taxation of Maryland or as may otherwise be
determined by the Board of Directors.
(d) Liquidation. In the event of the liquidation or dissolution
-----------
of the Corporation, the stockholders of each series shall
be entitled to receive, as a series, when and as declared
by the Board of Directors, the excess of the assets
belonging to that series over the liabilities belonging to
that series. The assets so distributable to the
stockholders of one or more classes of a series shall be
distributed among such stockholders in proportion to the
respective aggregate net asset values of the shares of such
series 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 series or
class thereof and all shares of all series and 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 series or class is required by
the Investment Company Act of 1940 , as amended from time to
time, applicable rules and regulations thereunder, or the
Maryland General
4
<PAGE>
Corporation Law, such requirement as to a separate vote of
that series or 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 (but less than all) series or
classes, then, subject to (iii) below, the shares of all
---
other series and classes shall vote as a single class; and
(iii) as to any matter which does not affect the interest of
---
a particular series or class, only the holders of shares of
the one or more affected series or classes shall be entitled
to vote.
(f) Conversion. At such times (which times may vary among
shares of a class) as may be determined by the Board of
Directors, Shares of a particular class of a series may be
automatically converted into Shares of another class of such
series based on the relative net asset values of such
classes at the time of conversion, subject, however, to any
conditions of conversion that may be imposed by the Board of
Directors.
(g) Equality. All Shares of each particular series shall
--------
represent an equal proportionate interest in the assets
belonging to that series (subject to the liabilities
belonging to that series), but the provisions of this
sentence or any other provision of these Articles shall not
restrict any distinctions that may exist with respect to
stockholder elections to receive dividends or distributions
in cash or Shares or that may otherwise exist with respect
to dividends and distributions on Shares of the same
series.
SECTION 3. The Shares of the Corporation shall be subject to the following
provisions:
(a) All Shares now or hereafter authorized 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
5
<PAGE>
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 equal to the net asset
value of such Shares determined as hereinafter set forth.
Notwithstanding the foregoing, the Corporation may deduct
from the proceeds otherwise due to any stockholder requiring
the Corporation to redeem Shares a redemption charge not to
exceed one percent (1%) of such net asset value or a
reimbursement charge, a deferred sales charge or other
charge that is integral to the Corporation's distribution
program (which charges may vary within and among series and
classes) as may be established from time to time by the
Board of Directors.
(b) Notwithstanding the foregoing, the Board of Directors of the
Corporation may suspend the right of the holders of the
Shares to require the Corporation to redeem Shares or may
suspend any voluntary purchase of such Shares:
(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 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
6
<PAGE>
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.
* * *
ARTICLE VII
* * *
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:
* * *
(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 series)
dividends and distributions on the Corporation's Shares,
with respect to such series, for 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
7
<PAGE>
the time of payment to the stockholders of such series 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 series 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 series 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
Shares, 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
series, 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 series 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
8
<PAGE>
belonging to that series then held or owned by the
Corporation.
* * *
(g) To authorize any agreement of the character described in
subsection (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 subsections (e) or (f) shall be consistent with and
subject to the requirements of the Investment Company Act of
1940, as amended from time to time, applicable rules and
regulations thereunder, or any other applicable Act of
Congress hereafter enacted, and no amendment to any
agreement entered into pursuant to said subsection (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 (as such phrase is
defined in the Investment Company Act of 1940, as amended
from time to time) entitled to vote on the matter.
SECTION 2. The Board of Directors may authorize the purchase by the
Corporation, either directly or through any agent, of the Shares, 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
9
<PAGE>
Directors reasonably proximate to the time of purchase by the Corporation or
any such agent.
SECTION 3. For the purposes referred to in these Articles of
Incorporation, the net asset value of shares of the capital stock of the
Corporation of each series and class as of any particular time (a "determination
time") shall be determined by or pursuant to the direction of the Board of
Directors as follows:
(a) At times when a series is not classified into multiple
classes, the net asset value of each share of stock of a
series, as of a determination 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 series (determined as hereinafter
provided) as of such determination time by the total number
of shares of that series then outstanding, including all
shares of that series which the Corporation has agreed to
sell for which the price has been determined, and excluding
shares of that series which the Corporation has agreed to
purchase or which are subject to redemption for which the
price has been determined.
The net value of the assets of the Corporation of a series
as of a 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 series (determined as hereinafter provided) , the
amount of all liabilities belonging to that series (as such
terms are defined in subsection (b) of Section 2 of Article
V), in each case as of such determination time.
The gross value of the assets of the Corporation belonging
to a series as of such determination time shall be an amount
equal to all cash,
10
<PAGE>
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 series
(as such terms are defined in subsection (a) of Section 2 of
Article V) at such determination time, all determined in
accordance with sound accounting practice and giving effect
to the following:
* * *
(b) At times when a series is classified into multiple classes,
the net asset value of each share of stock of a class of
such series shall be determined in accordance with
subsections (a) and (c) of this Section 3 with appropriate
adjustments to reflect differing allocations of liabilities
and expenses of such series between or among such classes to
such extent as may be provided in or determined pursuant to
Articles Supplementary filed for record with the State
Department of Assessments and Taxation of Maryland or as may
otherwise be determined by the Board of Directors.
(c) 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.
SECTION 4. The presence in person or by proxy of the holders of one-third
of the Shares 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 series or
class are entitled to a separate vote as such series or class (each such series
or class, a "Separate Class") or where the holders of Shares of two or more (but
not all) series or classes are required to vote as a single series or class
(each such single series or 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
11
<PAGE>
quorum with respect to all series, including all classes thereof, 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 series, 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 series, 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 series or classes, or of the
affected series 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 at 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
series or class, namely, the amount of the assets, obligations, liabilities and
expenses of the Corporation or belonging to any series or with respect 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 series or 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 the Corporation or any series or 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 the Corporation or any series or
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 ;
the fair value of any asset owned by the Corporation; the number of Shares of
the Corporation of any series or class issued or issuable; the existence of
conditions permitting the postponement of payment of the repurchase price of
Shares of any series or 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;
12
<PAGE>
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 series or
class.
* * *
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 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.
13
<PAGE>
LORD ABBETT RESEARCH FUND, INC.
LARGE-CAP SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and RONALD
P. LYNCH and each of them proxies, with full power of substitution, to vote
(according to the number of votes which the undersigned would be entitled to
cast if then personally present) at the annual meeting of shareholders of LORD
ABBETT RESEARCH FUND, INC. (the "Fund") on June 19, 1996, including all
adjournments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-4.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1. Election of Directors:
For [_] Without Authority [_] For All Except [_] (NOTE: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK THE "FOR ALL EXCEPT"
BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME BELOW.)
Ronald P. Lynch, Robert S. Dow, E. Thayer Bigelow, Stewart S. Dixon,
John C. Jansing, C. Alan MacDonald, Hansel B. Millican, Jr. and Thomas
J. Neff.
2. For [_] Against [_] Abstain [_] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the fiscal
year ending November 30, 1996.
3. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
new Distribution Plan and Agreement for the Series' existing class of
shares pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as described in the proxy statement.
4. For [_] Against [_] Abstain [_] To approve or disapprove an amendment
to the Fund's Articles of Incorporation (i) authorizing the Board of
-
Directors to create new classes and series of shares of capital stock;
and (ii) confirming that the board may impose contingent deferred sales
--
charges in connection with new classes of shares to be created, as
described in the proxy statement.
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT RESEARCH FUND, INC.
LARGE-CAP SERIES
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE POSTAGE PAID
RETURN ENVELOPE PROVIDED.
For information as to the voting of stock registered in more
than one name, see page 1 of the proxy statement. When
signing the proxy as attorney, executor, administrator,
trustee or guardian, please indicate the capacity in which you
are acting. Only authorized officers should sign for
corporations.
Date:......................................................
Signature(s) of Shareholder(s) as shown at left
.............................................................
.............................................................
(Please read other side)
2
<PAGE>
LORD ABBETT RESEARCH FUND, INC.
MID-CAP SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and RONALD
P. LYNCH and each of them proxies, with full power of substitution, to vote
(according to the number of votes which the undersigned would be entitled to
cast if then personally present) at the annual meeting of shareholders of LORD
ABBETT RESEARCH FUND, INC. (the "Fund") on June 19, 1996, including all
adjournments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-4.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1. Election of Directors:
For [_] Without Authority [_] For All Except [_] (NOTE: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK THE "FOR ALL EXCEPT"
BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME BELOW.)
Ronald P. Lynch, Robert S. Dow, E. Thayer Bigelow, Stewart S. Dixon,
John C. Jansing, C. Alan MacDonald, Hansel B. Millican, Jr. and Thomas
J. Neff.
2. For [_] Against [_] Abstain [_] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the fiscal
year ending November 30, 1996.
3. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
new Distribution Plan and Agreement for the Series' existing class of
shares pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as described in the proxy statement.
4. For [_] Against [_] Abstain [_] To approve or disapprove an amendment
to the Fund's Articles of Incorporation (i) authorizing the Board of
-
Directors to create new classes and series of shares of capital stock;
and (ii) confirming that the board may impose contingent deferred sales
--
charges in connection with new classes of shares to be created, as
described in the proxy statement.
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT RESEARCH FUND, INC.
MID-CAP SERIES
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE POSTAGE PAID
RETURN ENVELOPE PROVIDED.
For information as to the voting of stock registered in more
than one name, see page 1 of the proxy statement. When
signing the proxy as attorney, executor, administrator,
trustee or guardian, please indicate the capacity in which you
are acting. Only authorized officers should sign for
corporations.
Date:......................................................
Signature(s) of Shareholder(s) as shown at left
.............................................................
.............................................................
(Please read other side)
2
<PAGE>
LORD ABBETT RESEARCH FUND, INC.
SMALL-CAP SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and RONALD
P. LYNCH and each of them proxies, with full power of substitution, to vote
(according to the number of votes which the undersigned would be entitled to
cast if then personally present) at the annual meeting of shareholders of LORD
ABBETT RESEARCH FUND, INC. (the "Fund") on June 19, 1996, including all
adjournments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-4.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1. Election of Directors:
For [_] Without Authority [_] For All Except [_] (NOTE: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK THE "FOR ALL EXCEPT"
BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME BELOW.)
Ronald P. Lynch, Robert S. Dow, E. Thayer Bigelow, Stewart S. Dixon,
John C. Jansing, C. Alan MacDonald, Hansel B. Millican, Jr. and Thomas
J. Neff.
2. For [_] Against [_] Abstain [_] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the fiscal
year ending November 30, 1996.
3. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
new Distribution Plan and Agreement for the Series' existing class of
shares pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as described in the proxy statement.
4. For [_] Against [_] Abstain [_] To approve or disapprove an amendment
to the Fund's Articles of Incorporation (i) authorizing the Board of
-
Directors to create new classes and series of shares of capital stock;
and (ii) confirming that the board may impose contingent deferred sales
--
charges in connection with new classes of shares to be created, as
described in the proxy statement.
3
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT RESEARCH FUND, INC.
SMALL-CAP SERIES
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE POSTAGE PAID
RETURN ENVELOPE PROVIDED.
For information as to the voting of stock registered in more
than one name, see page 1 of the proxy statement. When
signing the proxy as attorney, executor, administrator,
trustee or guardian, please indicate the capacity in which you
are acting. Only authorized officers should sign for
corporations.
Date:......................................................
Signature(s) of Shareholder(s) as shown at left
.............................................................
.............................................................
(Please read other side)
4
