August 21, 1998
TO: All Employee Investors in Mid-Cap Series of Lord Abbett Research Fund
FR: Bob Dow
RE: VOTE YOUR PROXY
I'm sending along this memo to let you know how important we believe
the attached Proxy Statement on Lord Abbett Research Fund - Mid-Cap
Series will be to our firm's long-term growth objectives.
The proposed changes you vote on through this Proxy Statement will help
transform the Series from a mid-cap value fund into a mid-cap growth
fund. As you are probably aware, only Lord Abbett employees have been
able to invest in Mid-Cap Series since its inception on August 1, 1995.
Employees will still be able to invest in the Series, without a sales
charge, after it opens to investment by the general public on October
15, 1998.
Why have we decided to pursue this strategy now? One key reason is that
mid-cap companies, which have historically provided returns similar to
those of small-cap stocks at considerably lower levels of volatility,
offer attractive current valuations relative to the largest names in
the S&P 500. Add this to the Series' strong performance record AND its
new manager - Developing Growth Fund's Stephen J. McGruder - and we
think the result is a compelling fund sales opportunity that will help
us reach our five-year target of $100 billion under management. Of
course, past performance is no indication of future results.
To help us get this sales ball rolling, we ask that you please vote
your proxy Statement promptly.
<PAGE>
LORD ABBETT RESEARCH FUND, INC.
A Lord Abbett Managed Investment Company
The GM Building o 767 Fifth Avenue o New York, New York 10153-0203 o
(212) 848-1800
August 21, 1998
Dear Fellow Shareholder:
You are cordially invited to attend a Special Meeting of Mid-Cap Series
Shareholders that will take place:
o Date and Time: Tuesday, September 15, 1998 at 10:45 a.m.
o Location: 875 Third Avenue, 25th Floor
New York, New York
The meeting's agenda includes a shareholder vote on whether to:
o Amend the Fund's investment objective by eliminating the reference to
investing in undervalued equity securities as the primary method of
achieving capital appreciation, as described in the Proxy Statement.
o Approve or disapprove a new Management Agreement increasing the fee payable
to Lord Abbett, as described in the Proxy Statement.
Lord Abbett is very excited about these proposals and we are pleased the Fund's
Board of Directors has unanimously recommended that shareholders cast their
votes "in favor" of them both.
The proposals that Fund shareholders will put to a vote on September 15 are
described in the enclosed Proxy Statement. I encourage you to review this
document as a way to help ensure that your votes really count, no matter how
many Fund shares you own. Please sign, date and return the enclosed proxy ballot
in the postage-paid return envelope at your earliest convenience. If you have
any questions regarding the meeting or need assistance in voting, please contact
us at 888-L-ABBETT (888-522-2388).
Sincerely,
Robert S. Dow
Chairman of the Board
<PAGE>
LORD ABBETT RESEARCH FUND, INC. - MID-CAP SERIES
767 Fifth Avenue
New York, New York 10153
NOTICE OF SPECIAL MEETING OF
MID-CAP SERIES SHAREHOLDERS
TO BE HELD
September 15, 1998
PROXY STATEMENT
PLEASE SIGN AND RETURN THE PROXY BALLOT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE, EVEN IF YOU OWN ONLY A FEW SHARES. YOUR PROMPT
RETURN OF THE PROXY MAY SAVE THE MID-CAP
SERIES THE EXPENSE OF FURTHER SOLICITATIONS
TO ENSURE A QUORUM AT THIS MEETING.
<PAGE>
LORD ABBETT RESEARCH FUND, INC. - MID-CAP SERIES
767 Fifth Avenue
New York, New York 10153
Notice of Special Meeting of Mid-Cap Series Shareholders
To Be Held September 15, 1998 August 21, 1998
Notice is given hereby of a Special Meeting of the shareholders of the Mid-Cap
Series (the "Fund") of Lord Abbett Research Fund, Inc. The Meeting will be held
on the 25th floor, 875 Third Avenue, New York, New York, on Tuesday, September
15, 1998, at 10:45 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 approve or disapprove a change to the Fund's investment objective;
and
ITEM 2. To approve or disapprove a new Management Agreement increasing
the fee payable to Lord, Abbett & Co., as described in the Proxy
Statement.
By order of the Board of Directors
Paul A. Hilstad
Vice President and Secretary
<PAGE>
The Board of Directors has fixed the close of business on August 11, 1998 as the
record date for determination of shareholders of Mid-Cap Series entitled to
notice of, and to vote at, the Special Meeting. Shareholders are entitled to one
vote for each share held. As of August 11, 1998, there were 142,388 shares of
the Fund issued and outstanding.
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY BALLOT.
SIGN, DATE AND RETURN IT IN THE ENVELOPE PROVIDED.
TO SAVE THE COST OF ADDITIONAL SOLICITATIONS, PLEASE RETURN YOUR PROXY PROMPTLY.
<PAGE>
LORD ABBETT RESEARCH FUND, INC. - MID-CAP SERIES
767 Fifth Avenue
New York, New York 10153
August 21, 1998
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. (the "Corporation"), a diversified, open-end management investment
company organized as a Maryland corporation, for use at a Special Meeting of
shareholders of the Mid-Cap Series (the "Fund"), a series of the Corporation to
be held at 10:45 a.m. on Tuesday, September 15, 1998, on the 25th floor, 875
Third Avenue, New York, New York 10153, and at any adjournments thereof. This
Proxy Statement and the enclosed proxy ballot are first being mailed to
shareholders on or about August 21, 1998.
At the close of business on August 11, 1998 (the "Record Date"), there
were issued and outstanding 142,388 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 Special 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 the Corporation and its
affiliates. The cost of the solicitation will be borne by Lord, Abbett & Co.
("Lord Abbett"), the Investment Manager of the Fund.
The following lists the owners of more than 5% of the shares
of the Fund:
Number and Percentage of Shares
Name and Address Beneficially Owned as of August 11, 1998
---------------- ----------------------------------------
Lord, Abbett & Co. 60,368 (42.40%)
767 Fifth Avenue
New York, New York 10153
Susan Lynch 16,988 (11.93%)
c/o Lord, Abbett & Co.
767 Fifth Avenue
New York, New York 10153
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 the item described in this 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.
<PAGE>
1. PROPOSAL TO CHANGE THE INVESTMENT OBJECTIVE OF THE FUND
It is proposed to simplify the Fund's investment objective to capital
appreciation by eliminating the reference to investing in undervalued equity
securities as the primary method of achieving the objective. Thus, the
investment objective would be changed "to seek capital appreciation" rather than
"to seek capital appreciation through investment primarily in equity securities,
which are believed to be undervalued in the marketplace". This change would give
the Board of Directors the freedom to select any style of investing as the
primary means of achieving the Fund's objective. Once the Directors have this
freedom, the additional Fund expense of shareholder approval would be eliminated
for a change to another primary method of achieving the objective.
Mr. Stephen J. McGruder, recently appointed senior portfolio manager of
the Fund on July 15, 1998, has introduced a growth style of investment on a
limited basis. If the change in objective is approved by shareholders, Mr.
McGruder would be able to follow the growth style of investing approved by the
Board of Directors as the primary means of achieving the Fund's objective. The
growth style seeks investments that show the potential for
stronger-than-expected earnings growth, as compared to the previous value style
of investing which seeks investments primarily in equity securities which are
believed to be undervalued in the marketplace. The risks of seeking capital
appreciation are similar under both the value and growth methods of investing.
Approval of this proposal requires the affirmative vote of a "majority"
of the Fund's outstanding voting securities. A majority means the lesser of (i)
67% or more of the Fund's shares present at the Meeting if the holders of more
than 50% of the Fund's outstanding shares are present or represented by proxy at
the Meeting or (ii) more than 50% of the Fund's outstanding shares (a "1940 Act
Majority Shareholder Vote"). The effect of an abstention or broker non-vote is
the same as a vote against this proposal.
If the proposed change is not approved by the shareholders of the Fund,
the current investment objective will continue in effect.
The Board of Directors recommends that shareholders vote in favor of
the proposed change to the Fund's investment objective.
2. PROPOSAL TO INCREASE THE MANAGEMENT FEE PAYABLE TO LORD ABBETT
At a meeting of the Board of Directors of the Corporation held on
August 13, 1998, the Directors of the Corporation unanimously approved, subject
to shareholder approval, and determined to submit to the shareholders for
approval, an addendum to the management contract relating to the Fund ("New
Agreement") under which the contractual rate at which annual management fees are
payable to Lord Abbett would be increased. Under the current Management
Agreement ("Current Agreement") Lord Abbett is entitled to receive from the Fund
a management fee based on its average daily net assets at the annual rate of .75
of 1%. Under the New Agreement, the annual percentage rate would be increased to
.90 of 1%. Except for the increase set forth in this proposal, the terms of the
New Agreement are identical to the Current Agreement. The Current Agreement was
most recently approved by the Board of Directors on December 11, 1997 and by
shareholders on July 27, 1995.
<PAGE>
A. Reasons for the Proposed Increase
Lord Abbett has informed the Board of Directors that its goal has been
to strive for a high level of portfolio performance while maintaining the
management fee and total Fund expenses at levels that are generally no higher
than the approximate average management fees and total expenses of the Fund's
peer group. In that regard, as discussed in further detail below, according to
information provided by Lipper Analytical Services, Inc. ("Lipper"), the Fund's
performance over the past several years has been above average while the Fund's
management fee and estimated total expense ratio1 fall below average levels as
compared with investment companies judged by Lipper to be comparable to the
Fund.2
The Board believes that, under these circumstances, an increase in the
management fee is necessary and appropriate in order to ensure that Lord Abbett
is able to remain competitive in attracting and retaining personnel. The Board
recognizes that the continuing success of the Fund depends largely on the
quality of Lord Abbett's personnel. In addition, the Board believes that over
the past several years Lord Abbett has made a significant and ongoing commitment
of resources to the Fund. As a result of its efforts to attract and retain
highly trained and capable personnel, Lord Abbett has continued to add portfolio
managers, securities analysts, traders, accounting, legal and other
administrative staff who support the Fund, many of whom have relatively senior
experience. The Board believes that these additions have benefited the Fund in
many respects, including increasing both the coverage of the industries in which
the Fund may invest and portfolio management expertise generally, contributing
to the Fund's above-average performance record. In addition, Lord Abbett has
added new technology and systems for portfolio accounting, as well as for
securities valuation and analysis. The addition of personnel and new technology
by Lord Abbett was in part designed to support the administration and operation
of the Fund's multiple class structure for the Fund's shares, which will be
implemented on October 15, 1998 when the Fund begins offering Class B, Class C
and Class Y shares.
In reaching its decision, the Board considered the fact that Lipper
calculated the Fund's annualized total return performance against all other
open-end mid-cap funds and ranked the Fund's Class A shares 31 out of 282 funds,
4 out of 209 funds and 12 out of 171 funds for the one-, two-, and
life-of-the-fund (from July 31, 1995) periods ended May 31, 1998. The Fund's
annualized total return performance (Class A shares) during the periods was
30.81%, 29.47% and 25.32%, respectively, according to Lipper.3 These returns
compared favorably to broad equity market returns over the periods; the
annualized returns for the S&P Mid-Cap 400 Index for the one-, two-, and
life-of-the-fund (from July 31, 1995) periods ended May 31, 1998 were 29.91%,
23.89% and 23.11%, respectively.
- --------
1 As of May 31, 1998 the Fund was sold without a sales charge only to employees
and partners of Lord Abbett and Directors (Trustees) of the Lord Abbett Funds.
Under these circumstances, Lord Abbett waived its management fee of .75 of 1%
and assumed expenses of .28 of 1%. In addition, the Fund's Class A share Rule
12b-1 Plan, estimated to cost .35 of 1% was not activated. Thus, the Fund's
estimated total expense ratio as of that date was 1.38% versus 1.46%, the
average of the peer group chosen by Lipper. On and after October 15, 1998
employees and partners of Lord Abbett and Directors (Trustees) of the Lord
Abbett Funds will continue to be able to buy the Fund without a sales charge. 2
Lipper is a nationally recognized organization that reports on open- and
closed-end fund total return performance. 3 Lipper calculates fund ranking based
on total returns. Total returns are calculated based on changes in net asset
value and assume the reinvestment of dividends and distributions at the
then-current net asset value. Ranking results change monthly. The performance
information shown relates only to the Fund's Class A shares, which are available
only to employees and partners of Lord Abbett and Directors (Trustees) of the
Lord Abbett Funds. Commencing on October 15, 1998, in addition to Class A
shares, the Fund will begin offering Class B, Class C and Class Y shares to the
public, each of which bears certain different expenses than those borne by Class
A shares. All fees and expenses for each class of shares will be described in
the Fund's prospectus. Call 1-800-874-3733 on or after October 15, 1998 for a
free prospectus.
<PAGE>
The information provided by Lipper also indicates that the Fund's
management fee and estimated total expense ratio as of May 31, 1998 fall below
the average contractual management fee rates and expense ratios of the funds in
the group supplied by Lipper as comparable4. Moreover, even with the higher
management fee and total expense ratio that are proposed, the information
supplied by Lipper indicates that on a pro forma basis the management fee as of
October 15, 1998 would still fall below the average management fee rates of the
funds in the comparison group and the Fund's estimated total expense ratio as of
the same date would fall slightly above the average ratio of the funds in the
comparison group.
B. Deliberations by the Board of Directors
A proposal for an increased management fee was presented by Lord Abbett
to the Board of Directors at a meeting held on August 13, 1998. At this meeting,
Lord Abbett presented the reasons discussed above to the Board as the basis of
its request. The Non-Interested Directors consulted with their legal counsel.
Information prepared specifically for the purpose of assisting the
Non-Interested Directors in their evaluation of the proposed amendment included
the analysis prepared by Lipper of the comparative performance, management fee
and expenses of the Fund with the funds chosen by Lipper as comparable to the
Fund, as discussed above.
The Fund's legal counsel advised the Board of Directors on the nature
of the matters to be considered and the standards to be used by the Board in
approving the proposed fee. The Board, in consultation with its legal counsel,
considered the reasons and factors discussed above, particularly the fact that
while the Fund's performance has been above average as compared with its peers,
the current estimated fees and expenses of the Fund at existing levels are
generally below those of comparable funds, and the proposed fees and expenses
would continue to be competitive with comparable funds. Moreover, the Board
evaluated the nature, quality and extent of services furnished by Lord Abbett
and possible economies of scale, focusing especially on the ongoing commitment
of resources, as described above. The financial resources of Lord Abbett also
were considered, including the activation of the Rule 12b-1 Plan and the fact
that Lord Abbett will no longer waive its management fee and subsidize the
expenses with respect to the Fund commencing on October 15, 1998. In light of
the reasons discussed above, the Board believes that the increase set forth in
this proposal is fair and reasonable and in the best interests of the Fund's
shareholders.
- --------
4 The comparison group was supplied by Lipper based on the
following parameters: (1) fund type, (2) similarity of investment objective, (3)
load structure, (4) asset level comparability, (5) expense components or
structure and (6) primary channel of distribution. With respect to comparing the
Fund's total expenses, the Fund was included in an "expense universe" (the
"Universe") consisting of all mid-cap open-end investment companies, as
classified by Lipper, with average net assets below $25 million.
<PAGE>
C. Current and October 15, 1998 Fees and Expenses
This table describes the current fees and expenses that you may pay if
you buy and hold Class A shares of the Fund. In addition, when the Fund begins
offering its Class A shares to the public on October 15, 1998, Lord Abbett will
no longer assume the expenses of the Fund and will activate the Class A share
12b-1 Plan. Therefore, the fees and expenses you will be expected to pay if you
buy and hold Class A shares of the Fund on or after October 15, 1998 also are
shown.
Current October 15, 1998
SHAREHOLDER FEES
(fees paid directly from you investment)
Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of offering price)---None(1)------------None(1)
Maximum Deferred Sales Charge (Load)
(as a percentage of the net asset value
of redeemed shares)-----------------------------None(1)------------None(1)
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
Management fees----------------------------------.75%---------------.90%
Distribution and Service
(12b-1)Fees-------------------------------------None(1)-------------.35%
Other Expenses----------------------------------None(1)-------------.28%
Total Annual Fund
Operating Expenses-------------------------------.75%--------------1.53%
EXAMPLE
The example is intended to help you compare the current and October 15,
1998 cost of investing in the Fund with the cost of investing in other mutual
funds.
The example assumes that you invest $10,000 in the Fund for the time
periods indicated and then redeem all of your shares at the end of those
periods. The example also assumes that your investment has a 5% return each year
and that the Fund's operating expenses remain the same. Although your actual
cost maybe higher or lower, based on these assumptions your costs would be:
Years Current October 15, 1998
1----------------------------------------$ 77-------------------$ 156
3----------------------------------------$240-------------------$ 483
5----------------------------------------$417-------------------$ 834
10----------------------------------------$930-------------------$1,824
You would have paid the same amount shown above if you did not redeem your
shares. The example does not reflect sales charges (loads) on reinvested
dividends and other distributions. If these sales charges (loads) were included,
your costs would be higher.
<PAGE>
D. Material Provisions of the New Management Agreement
A form of the proposed Management Agreement is attached to this Proxy
Statement as Exhibit A. The material terms of the proposed Management Agreement
are described below, although the description below is qualified by reference to
Exhibit A.
Under both the New and Current Agreements, Lord Abbett supervises the
Fund's investments, provides it with certain other management services and
executive and other personnel, and pays the remuneration of its officers. Lord
Abbett is obligated to pay for the rental of office space and for ordinary and
necessary office and clerical expenses relating to research, statistical work
and portfolio supervision to be performed by Lord Abbett. The Fund is obligated
to pay all expenses not expressly assumed by Lord Abbett; these include, without
limitation, Rule 12b-1 expenses, office and clerical expenses not related to
research, statistical work and portfolio supervision; governmental fees;
interest charges; taxes; outside Directors' fees and expenses; custody fees;
association membership dues; legal and auditing fees; transfer and dividend
disbursing agent fees; shareholder servicing costs; expenses of preparing,
printing and mailing shareholder reports; costs of preparing reports to
governmental agencies; expenses relating to shareholder meetings; insurance
premiums, and brokerage and other expenses connected with executing portfolio
transactions. Under the New Agreement the Fund is obligated to pay Lord Abbett a
fee, computed and paid monthly, at the annual rate of .90 of 1% of the Fund's
average daily net assets.
The Board of Directors recommends that shareholders vote in favor of the
proposed New Management Agreement.
E. Required Vote
Approval of this proposal requires the affirmative vote of a "majority"
of the Fund's outstanding voting securities. A majority means the lesser of (i)
67% or more of the Fund's shares present at the Meeting if the holders of more
than 50% of the Fund's outstanding shares are present or represented by proxy at
the Meeting or (ii) more than 50% of the Fund's outstanding shares. The effect
of an abstention or broker non-vote is the same as a vote against this proposal.
3. 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.
<PAGE>
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 Lord Abbett Distributor LLC, a subsidiary of Lord
Abbett located at the same address, acts as 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.
LORD ABBETT RESEARCH FUND, INC.
Paul A. Hilstad
Vice President and Secretary
<PAGE>
Exhibit A
MANAGEMENT AGREEMENT
AGREEMENT made as of this 10th day of June, 1992 by and
between LORD ABBETT RESEARCH FUND, INC., a Maryland Corporation (hereinafter
called the "Corporation"), and LORD, ABBETT & CO., a New York partnership
(hereinafter called the "Investment Manager").
WHEREAS, the Corporation desires to obtain the investment
management services of the Investment Manager and the Investment Manager is
willing to provide services of the nature desired upon the terms and conditions
hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and
of other good and valuable consideration, receipt of which is hereby
acknowledged, it is agreed as follows:
1. Each Series of the Corporation hereby employs the
Investment Manager under the terms and conditions of this Agreement, and the
Investment Manager hereby accepts such employment and agrees to perform
supervisory functions of the Corporation with respect to the investment and
reinvestment of its property and assets (whether or not held in trust or in the
custody of a bank or trust company subject to the Corporation's direction or
control) including, without limitation, the supervision of its investment
portfolio and the recommendation of investment policies and procedures within
the limitations set forth in the Corporation's Registration Statement on file
with the Securities and Exchange Commission under the Securities Act of 1933
and the Investment Company Act of 1940.
The Investment Manager agrees to maintain an adequate
organization of competent persons to perform the supervisory functions
mentioned herein.
All recommendations with respect to the investment portfolios
will be made to the Corporation's trading department which, with the approval
of authorized officers of the Corporation, will execute all trades in
accordance with the Corporation's investment procedures.
The Investment Manager reserves the right, in its discretion,
to purchase or otherwise obtain statistical information and services from other
sources, including affiliated persons of the Investment Manager.
Notwithstanding the provisions of this paragraph 1, the
investment policies and procedures and all other actions of the Corporation
are, and shall at all times be, subject to the control and direction of its
Board of Directors.
2. Each Series of the Corporation agrees to pay the Investment
Manager for its services under this Agreement and for the expenses assumed, a
management fee computed and payable monthly at the annual rate of three quarters
(3/4) of one percent (1%) of the value of the Series' average daily net assets.
The value of the net assets of the Corporation shall include all assets held in
trust or in custody of any bank, savings bank or trust company for the Series,
subject to its control or direction, and shall be determined as provided in the
Articles of Incorporation of the Corporation. The fee shall be paid on the first
day of each month for the preceding month.
The Investment Manager may receive research and other
statistical information from broker-dealers and from other sources and, in
accordance with section 28(e) of the Securities Exchange Act of 1934, a
broker-dealer may be paid a commission for a transaction involving portfolio
securities of the Corporation exceeding the amount another broker-dealer would
have charged for the same transaction if it is determined by the Investment
Manager that such amount of commission is reasonable in relation to the value of
the research services provided by the executing broker-dealer, viewed in terms
of either the particular transaction or the overall responsibilities of the
Investment Manager with respect to the Corporation and other accounts
(investment companies and other investment clients) with respect to which it
exercises investment discretion. Such research services may be used by the
Investment Manager in serving all its accounts, and not all of such research
services need necessarily be used by the Investment Manager in connection with
its services to the Corporation.
It is understood that any supplemental advisory or statistical
services which may be provided to the Corporation or to the Investment Manager
from time to time by independent broker-dealers or persons other than the
Investment Manager, for whatever reason, shall not reduce the amount of the fees
payable to the Investment Manager hereunder. It is recognized that such
supplementary advisory or statistical services may be useful to the Investment
Manager and the Corporation, but their value is indeterminable and is not to be
considered a substitute for the services provided by the Investment Manager
hereunder.
3. It is understood that the services of the Investment
Manager are not deemed to be exclusive, and nothing in this Agreement shall
prevent the Investment Manager, or any officer, director, partner or employee
thereof, from providing similar services to other investment companies and other
clients (whether or not their investment objectives and policies are similar to
those of the Corporation) or to engage in other activities. When other clients
of the Investment Manager desire to purchase or sell the same portfolio security
at the same time as the Corporation, it is understood that such purchases and
sales will be made as nearly as practicable on a pro rata basis in proportion to
the amounts desired to be purchased or sold by each client.
4. Each Series of the Corporation will, at its own expense,
furnish to the Investment Manager periodic (but not less than semi-annually)
statements of its books of account, including balance sheets and earnings
statements, and all other information which may reasonably be required, from
time to time, by the Investment Manager, and will, at its own expense, at all
times keep the Investment Manager fully advised as to the cash, securities and
other property then comprising its assets, and furnish daily detailed price
makeup sheets with respect to its investment portfolio and its shares of its
capital stock outstanding.
5. The Investment Manager shall be under no obligation to pay
any fees, costs, expenses or other charges of the Corporation, except for the
compensation of its officers, the compensation, if any, of its directors who are
affiliated with the Investment Manager, the rental for its office space, and the
ordinary and necessary office and clerical expenses relating to research,
statistical work and supervision of each Series' investment portfolio, to be
performed by the Investment Manager under paragraph 1 of this Agreement. Each
Series will pay all other fees, costs, expenses or charges relating to its
assets and operations, including without limitation: office and clerical
expenses not relating to research, statistical work and supervision of its
investment portfolio; fees and expenses of directors not affiliated with the
Investment Manager; governmental fees; interest charges; taxes and association
membership dues; fees and charges for legal and auditing services; fees and
expenses of any custodians or trustees with respect to custody of its assets;
fees, charges and expenses of dividend disbursing agents, registrars and
transfer agents (including the cost of keeping all necessary shareholder records
and accounts, and of handling any problems relating thereto and the expense of
furnishing to all shareholders statements of their accounts after every
transaction including the expense of mailing); costs and expenses of repurchase
and redemption of its shares; costs and expenses of preparing, printing and
mailing to shareholders stock certificates, proxy statements and materials,
prospectuses, reports and notices; costs of preparing reports to governmental
agencies; brokerage fees and commissions of every kind and expenses in
connection with the execution of portfolio security transactions (including the
cost of any service or agency designed to facilitate the purchase and sale of
portfolio securities); and all postage, insurance premiums, and any other fee,
cost, expense or charge of any kind incurred by and on behalf of the Corporation
and not expressly assumed by the Investment Manager under this Agreement.
Notwithstanding any other provision of this Agreement, if
expenses (including the management fee hereunder but excluding interest, taxes,
brokerage fees, and where permitted, extraordinary expenses) borne by the
Corporation in any fiscal year exceed expense limitations applicable to the
Corporation imposed by state securities administrators, as such limitations may
be lowered or raised from time to time, the Investment Manager will reimburse
the Corporation for any such excess.
If the Investment Manager pays for other expenses of the
Corporation or furnishes without charge to the Corporation services the cost of
which is to be borne by the Corporation under this Agreement, the Investment
Manager shall not be deemed to have waived its rights under this Agreement to
have the Corporation pay for such expenses or provide or pay for such services
in the future. The Investment Manager may also advance the payment of expenses,
subject to reimbursement by the Corporation in the ordinary course of business.
6. The Investment Manager agrees that it shall observe and be
bound by all of the provisions of the Articles of Incorporation (including any
amendments thereto) of the Corporation which shall in any way limit or restrict
or prohibit or otherwise regulate any action by the Investment Manager.
7. Other than to abide by the provisions hereof and render the
services called for hereunder in good faith, the Investment Manager assumes no
responsibility under this Agreement and, having so acted, the Investment Manager
shall not be held liable or accountable for any mistakes of law or fact, or for
any error or omission of its officers, directors, partners or employees, or for
any loss or damage arising or resulting therefrom suffered by the Corporation or
any of its stockholders, creditors, directors or officers; provided however,
that nothing herein shall be deemed to protect the Investment Manager against
any liability to the Corporation or to its stockholders by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
hereunder, or by reason of the reckless disregard of its obligations and duties
hereunder. The Investment Manager shall not be responsible for any action of the
Board of Directors of the Corporation in following or declining to follow any
advice or recommendation of the Investment Manager.
<PAGE>
8. Neither this Agreement nor any other transaction between
the parties hereto pursuant to this Agreement shall be invalidated or in any way
affected by the fact that any or all of the directors, officers, stockholders,
or other representatives of the Corporation are or may be interested in the
Investment Manager, or any successor or assignee thereof, or that any or all of
the directors, officers, partners, or other representatives of the Investment
Manager are or may be interested in the Corporation, except as otherwise may be
provided in the Investment Company Act of 1940. The Investment Manager in acting
hereunder shall be an independent contractor and not any agent of the
Corporation.
9. This Agreement shall become effective upon the date hereof,
and shall continue in force until January 30, 1994, and is renewable annually
thereafter by specific approval of the Board of Directors of the Corporation or
by vote of a majority of the outstanding voting securities of the Corporation;
any such renewal shall be approved by the vote of a majority of the directors
who are not parties to this Agreement or interested persons of the Investment
Manager or of the Corporation, cast in person at a meeting called for the
purpose of voting on such renewal.
This Agreement may be terminated without penalty at any time
by the Corporation on 60 days' written notice. This Agreement shall
automatically terminate in the event of its assignment. The terms "interested
persons", "assignment" and "vote of a majority of the outstanding voting
securities" shall have the same meaning as those terms are defined in the
Investment Company Act of 1940 as amended.
10. The Investment Manager reserves the right to grant the use
of the name "LORD ABBETT" or "LORD, ABBETT & CO.", or any derivative thereof, to
any other investment company or business enterprise. The Investment Manager
reserves the right to withdraw from the Corporation the use of the name "LORD
ABBETT" and the use of its registered service mark; at such time of withdrawal
of the right to use the name "LORD ABBETT", the Investment Manager agrees that
the question of continuing this Agreement may be submitted to a vote of the
Corporation's shareholders. In the event of such withdrawal or the termination
of this Agreement, for any reason, the Corporation will, on the written request
of the Investment Manager, take such action as may be necessary to change its
name and eliminate all reference to the words "LORD ABBETT" in any form, and
will no longer use such registered service mark.
IN WITNESS WHEREOF, the Corporation has caused this Agreement
to be executed by its duly authorized officers and its corporate seal to be
affixed hereto, and the Investment Manager has caused this Agreement to be
executed by one of its partners all on the day and year first above written.
LORD ABBETT RESEARCH FUND, INC.
By: _____________________
Chairman of the Board
- ---------------------------
Assistant Secretary
LORD, ABBETT & CO.
By: ________________________
A Partner
<PAGE>
Addendum to Management
Agreement between Lord Abbett
Research Fund, Inc. and Lord, Abbett & Co.
Dated June 10, 1992 (the "Agreement")
Lord, Abbett & Co. and Lord Abbett Research Fund, Inc. (the "Corporation")
on behalf of a series of the Corporation, Mid-Cap Series ("Series") do hereby
agree that the annual management fee rate for the Series with respect to
paragraph 2 of the Agreement shall be .90% of 1% of the value of the Series'
average daily net assets.
For purposes of Section 15 (a) of the Act, this Addendum and the
Agreement shall together constitute the investment advisory contract of the
Series.
LORD, ABBETT & CO.
BY: ________________________
Partner
LORD ABBETT RESEARCH FUND, INC.
(on behalf of Mid-Cap Series)
BY: _______________________
Vice President
Dated: August , 1998
<PAGE>
x Please Mark Votes
As In This Example
LORD ABBETT RESEARCH FUND, INC. - MID-CAP SERIES
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1 AND 2.
1. To approve or disapprove a change to the Mid-Cap Series' investment
objective.
__ For __ Against __ Abstain
2. To approve or disapprove a new Management Agreement increasing the fee
payable to Lord, Abbett & Co., as described in the Proxy Statement.
__ For __ Against __ Abstain
Mark box if an address change or comment has been noted on the reverse
side of this ballot. __
Please be sure to sign and date this Proxy. Date
Shareholder sign here Co-owner sign here
<PAGE>
LORD ABBETT RESEARCH FUND, INC. - MID-CAP SERIES
SPECIAL MEETING OF SHAREHOLDERS
September 15, 1998
875 Third Avenue
New York, New York
The undersigned hereby appoints as proxies ROBERT S. DOW and PAUL A.
HILSTAD and each of them 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 Special Meeting of shareholders of the Mid-Cap Series
(the "Fund") of LORD ABBETT RESEARCH FUND, INC. on September 15, 1998, including
all adjournments, as specified on the reverse side, and in their discretion upon
such other business as may properly be brought before the Meeting.
UNLESS OTHERWISE SPECIFIED IN THE BOXES PROVIDED, THE VOTE OF THE UNDERSIGNED IS
TO BE CAST FOR THE PROPOSALS LISTED ON THE REVERSE SIDE.
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.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
