1933 Act File No. 33-47641
1940 Act File No. 811-6650
SECURITIES & EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Post-Effective Amendment No. 18 |X|
And
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT |X|
OF 1940
AMENDMENT No. 17 |X|
LORD ABBETT RESEARCH FUND, INC.
-------------------------------
Exact Name of Registrant as Specified in Charter
767 Fifth Avenue, New York, N.Y. 10153
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Address of Principal Executive Office
Registrant's Telephone Number (212) 848-1800
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Thomas F. Konop, Vice President
767 Fifth Avenue, New York, N.Y. 10153
--------------------------------------
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
|_| immediately on filing pursuant to paragraph (b) of Rule 485
|_| on (date) pursuant to paragraph (b) of Rule 485
|_| 60 days after filing pursuant to paragraph (a)(1) of Rule 485
|X| on (September 29, 1998) pursuant to paragraph (a)(1) of Rule 485
|_| 75 days after filing pursuant to paragraph (a)(2) of Rule 485
|_| on (date) pursuant to paragraph (a) (3) of Rule 485
If appropriate, check the following box:
|_| this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
<PAGE>
LORD ABBETT RESEARCH FUND, INC.
FORM N-1A
Cross Reference Sheet
Post-Effective Amendment No. 18
Pursuant to Rule 481(a)
Explanatory Note
This Post-Effective Amendment No. 18 (the "Amendment") to the Registrant's
Registration Statement relates only to Lord Abbett Research Fund - Lord Abbett
Growth Opportunities Fund (formerly named Mid-Cap Series).
The other classes of shares of the Registrant are listed below and are offered
by the Prospectus and Statement of Additional Information in Parts A and B,
respectively of the Post-Effective Amendment to the Registrant's Registration
Statement as identified. The following are separate series and classes of shares
of the Registrant. This Amendment does not relate to, amend or otherwise affect
the Prospectus and Statement of Additional Information contained in the prior
Post-Effective Amendment listed below, and pursuant to Rule 485(d) under the
Securities Act of 1933, does not affect the effectiveness of each such
Post-Effective Amendment.
Post-Effective
Amendment No.
-------------
Small-Cap Series Class Y 17
Large-Cap and Small Cap Class A, B & C 15 and 16
Form N-1A Location In Prospectus or
Item No. Statement of Additional Information
- -------- -----------------------------------
1 Cover Page
2 Investor Expenses
3 Financial Highlights
4(a)(i) Cover Page; Our Management
4(a)(ii)(b)(c) How We Invest; Investment Policies, Risks and Limits
5(a)(b)(c) Portfolio Management; Our Management; Sales
Compensation; Last Page
5 (d) N/A
5 (e) Last Page
5 (f) Our Management
5 (g) Purchases
6 (a) Cover Page; Our Management
6 (b)(c)(d) N/A
6 (e) Cover Page; Purchases
6 (f)(g) Dividends and Capital Gains
6 (h) Purchases
7 (a) Back Cover Page
7 (b)(c)(d) Purchases
2
<PAGE>
8 (a)(b)(c)(d) Redemptions; Purchases, and Shareholder Services
9 N/A
Form N-1A Location in Prospectus or
Item No. Statement of Additional Information
- -------- -----------------------------------
10 Cover Page
11 Cover Page -- Table of Contents
12 N/A
13(a)(b)(c)(d) Investment Objective and Policies
14 Directors and Officers
15(a)(b)(c) Directors and Officers
16(a)(i) Investment Advisory and Other
Services
16(a)(ii) Directors and Officers
16(a)(iii) Investment Advisory and Other
Services
16(b) Investment Advisory and Other Services
16(c)(d)(e)(g) N/A
16(f)(h) Investment Advisory and Other Services
16(i) N/A
17(a) Portfolio Transactions
17(b) N/A
17(c) Portfolio Transactions
17(d)(e) N/A
18(a) Cover Page
18(b) N/A
19(a)(b) Purchases, Redemptions and Shareholder Services;
Notes to Financial Statements
19(c) N/A
20 Taxes
21(a) Purchases, Redemptions and Shareholder Services
21(b)(c) N/A
22(a) N/A
22(b) Past Performance
23 Financial Statements
3
<PAGE>
October __, 1998
Application Inside
Lord Abbett
Growth Opportunites
Fund
PROSPECTUS
[LOGO] LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
<PAGE>
This Prospectus sets forth concisely the information about Lord Abbett Growth
Opportunities Fund ("we" or the "Fund") that you should know before investing.
Please read this Prospectus before investing and retain it for future reference.
The Fund's investment objective is capital appreciation. In its search for
growth, the Fund seeks companies which are primarily middle-sized, based on the
value of their outstanding stock. There can be no assurance the Fund will
achieve its objective.
The Statement of Additional Information dated October __, 1998 has been
filed with the Securities and Exchange Commission and is incorporated by
reference into this Prospectus. You may obtain it, without charge, by writing to
the Fund or by calling 800-874-3733. Ask for "Part B of the Prospectus -- the
Statement of Additional Information". In addition, the Commission maintains a
website (http://www.sec.gov) that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
registrants that file electronically with the Commission.
Shaded terms are defined in the Glossary of Terms.
Mutual Fund shares are not deposits or obligations of, or guaranteed or
endorsed by, any bank. Shares are not insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency. An investment in
the Fund involves risks, including the possible loss of principal.
These securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission nor has the Securities
and Exchange Commission or any state securities commission passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
LORD ABBETT
GROWTH OPP0RTUNITIES
FUND
PROSPECTUS
October __, 1998
TABLE OF CONTENTS PAGE
How We Invest 2
Risk Factors 2
Portfolio Management 2
Investor Expenses 2
Financial Highlights 3
Purchases 3
Opening Your Account 5
Shareholder Services 5
Redemptions 6
Dividends and Capital Gains 7
Our Management 7
Fund Performance 8
Investment Policies, Risks and Limits 8
Sales Compensation 12
Glossary of Terms 12
LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
The General Motors Building
767 Fifth Avenue o New York o New York o 10153
(800) 426-1130
<PAGE>
HOW WE INVEST
Normally we invest primarily in equity securities of mid-sized companies,
defined for this purpose as companies whose outstanding equity securities have
an aggregate market value of between $1 billion and $6 billion. We favor
companies that show the potential for stronger than expected earnings or growth.
Under normal circumstances, at least 65% of our total assets will consist of
investments made in growth companies, determined at the time of purchase.
See "Investment Policies, Risks and Limits".
- --------------------------------------------------------------------------------
RISK FACTORS
The value of your investment will fluctuate in response to stock market
movements. The Fund employs other investment practices such as investments in
foreign securities, small-sized companies and other securities, that could
adversely affect performance. Before you invest, please read "Investment
Policies, Risks and Limits".
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT
Stephen J. McGruder, Executive Vice President of the Fund, has served as Senior
Portfolio Manager since July 15, 1998. He joined Lord, Abbett & Co. ("Lord
Abbett") in 1995. Prior to joining Lord Abbett, Mr. McGruder served since
October of 1988 as Vice President of Wafra Investment Advisory Group, a private
investment company. Mr. McGruder is assisted by, and may delegate management
duties to, other Lord Abbett employees who may be Fund officers.
Mr. McGruder has over 29 years of investment experience.
When Mr. McGruder became the Senior Portfolio Manager of the Fund, he introduced
a growth style of investing to the Fund. Under this method, companies are
favored that show the potential for stronger-than-expected earnings growth.
Gradually, as the opportunities present themselves, these kinds of companies
will be favored in the selection process. Under the former value style of
investing used to manage the Fund, companies were selected without regard to
current income under a process that sought to identify and invest in undervalued
securities.
- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The expenses shown below are based on historical expenses adjusted to reflect
current fees. Future expenses may be different than those shown.
================================================================================
Class A Class B Class C
================================================================================
================================================================================
Shareholder Transaction Expenses
================================================================================
Maximum Sales Charge on Purchases
(as a % of offering price) 5.75% None None
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Deferred Sales Charge (See "Purchases") None 5.00% 1.00%
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================================================================================
Annual Fund Operating Expenses (as a % of average net assets)
================================================================================
Management Fees 0.90% 0.90% 0.90%
(See "Our Management")
- --------------------------------------------------------------------------------
12b-1 Fees(1) 0.35% 1.00% 1.00%
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Other Expenses 0.28% 0.28% 0.28%
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(See "Our Management")
- --------------------------------------------------------------------------------
Total Operating Expenses 1.53% 2.18% 2.18%
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Example
Assume an average annual return of 5% and no change in the level of expenses.
For a $1,000 investment with all dividends and distributions reinvested, you
would have paid the following total expenses assuming you sold your shares at
the end of each time period indicated.
================================================================================
Share Class 1 year 3 years 5 years 10 years
================================================================================
Class A shares $72 $103 $136 $229
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Class B shares(2) $72 $98 $136 $235
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Class C shares $32 $68 $117 $252
You would pay the following expenses on the same investment, assuming you kept
your shares:
Class A shares $72 $103 $136 $229
- --------------------------------------------------------------------------------
Class B shares(2) $22 $68 $117 $235
- --------------------------------------------------------------------------------
Class C shares $22 $68 $117 $252
This example is for comparison and is not a representation of the Fund's actual
expenses and returns, either past or present.
(1) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge. Lord Abbett
Distributor LLC has voluntarily agreed not to use a portion of the Distribution
Fee attributable to Class A shares of the Fund. Without such limitation
Distribuiton Fees for Class A shares would be payable at the rate of 0.25% of
average daily net assets.
(2) Class B shares will automatically convert to Class A shares on the eighth
anniversary of your original purchase of Class B shares.
2
<PAGE>
FINANCIAL HIGHLIGHTS Except for the six month period ended May 31, 1998 which
has not been audited, the following table has been audited by Deloitte & Touche
LLP, independent auditors, in connection with their annual audit of the Fund's
Financial Statements, whose report may be obtained on request. Call 800-821-5129
and ask for the Lord Abbett Growth Opportunities Fund's 1997 annual report.
<TABLE>
<CAPTION>
=================================================================================================================================
Per Class A Share Operating(a) Six Months Ended Year Ended November 30, For the Period August 1,
Performance: May 31, 1998 1997 1996 1995(d) to November 30, 1995
=================================================================================================================================
<S> <C> <C> <C> <C>
Net asset value, beginning of period $16.18 $12.84 $10.18 $10.00
Income from Investment Operations
Net investment income(b) .08 .23 .30 .10
Net realized and unrealized gain on investments 1.72 3.39 2.50 .08
Total from investment operations 1.80 3.62 2.80 .18
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.22) (.28) (.12) --
Net realized gain from security transactions (2.06) -- (.02) --
Net asset value, end of period $15.70 $16.18 $12.84 $10.18
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return(c) 13.01%(e) 28.90% 27.81% 1.80%(e)
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (000) $2,095 $1,672 $1,462 $968
Ratios to Average Net Assets:
Expenses, including waiver .00(e) .00% .00% 0.00%(e)
Expenses, excluding waiver .69(e) 1.58% 2.39% 1.20%(e)
Net investment income .55(e) 1.69% 2.67% 1.04%(e)
Portfolio turnover rate 33.39% 52.86% 30.78% 1.55%
Average commisions per share paid on equity transactions $.049 $.062 $.048
=================================================================================================================================
</TABLE>
(a) See Notes to Financial Statements.
(b) Net of Management fee waiver and expenses assumed
(c) Total return does not consider the effects of front-end sales or contingent
deferred sales charges.
(d) Commencement of operations.
(e) Not annualized.
PURCHASES
This Prospectus offers three classes of shares, Class A, B and C. These classes
of shares represent investments in the same portfolio of securities but are
subject to different expenses. Our shares are continuously offered based on the
per share net asset value ("NAV") next computed after we accept your purchase
order submitted in proper form, plus a front-end sales charge as described
below, in the case of the Class A shares and without a front-end sales charge,
in the case of the Class B and C shares as described below. Investors should
read this section carefully to determine which class of shares represents the
best investment option for their particular situation.
Class A
o Normally offered with a front-end sales charge.
o Lower annual expenses than Class B and Class C shares.
Class B
o No front-end sales charge.
o Higher annual expenses than Class A shares.
o A contingent deferred sales charge is applied to shares sold prior to the
sixth anniversary of purchase.
o Automatically convert to Class A shares after eight years.
Class C
o No front-end sales charge.
o Higher annual expenses than Class A shares.
o A contingent deferred sales charge is usually applied to shares sold prior
to the first anniversary of purchase.
It may not be suitable for you to place a purchase order for Class B shares of
$500,000 or more or a purchase order for Class C shares of $1,000,000 or more.
You should discuss pricing options with your investment professional.
For more information, see "Alternative Sales Arrangements" in the Statement of
Additional Information.
3
<PAGE>
Class A Shares. Front-end sales charges are as follows:
To Compute
As a % of As a % of Offering Price
Offering Your Divide
Your Investment Price Investment NAV by
- --------------------------------------------------------------------------------
Less than $50,000 5.75% 6.10% .9425
- --------------------------------------------------------------------------------
$50,000 to $99,999 4.75% 4.99% .9525
- --------------------------------------------------------------------------------
$100,000 to $249,999 3.75% 3.90% .9625
- --------------------------------------------------------------------------------
$250,000 to $499,999 2.75% 2.83% .9725
- --------------------------------------------------------------------------------
$500,000 to $999,999 2.00% 2.04% .9800
- --------------------------------------------------------------------------------
$1,000,000 over No Sales Charge 1.0000
Reducing Your Class A Front-End Sales Charges. There are several ways you can
qualify for a lower sales charge when purchasing Class A shares if you inform
the Fund that you are eligible at the time of purchase.
o Rights of Accumulation -- a Purchaser can add the share value of any
Eligible Fund already owned to the amount of the next purchase of
Class A shares for purposes of calculating the sales charge.
o Statement of Intention -- a Purchaser can purchase Class A shares of
any Eligible Fund over a 13-month period and receive the same sales
charge as if all shares had been purchased at once. Shares purchased
through reinvestment of distributions are not included.
For more information on eligibility for these privileges, read the applicable
sections in the attached application.
Class A Share Purchases Without a Front-End Sales Charge. Class A shares may be
purchased without a front-end sales charge under the following circumstances.
1 Purchases of $1 million or more.*
2 Purchases by Retirement Plans with at least 100 eligible employees.*
3 Purchases under a Special Retirement Wrap Program.*
4 Purchases made with dividends and distributions on Class A shares of
another Eligible Fund.
5 Purchases representing repayment under the loan feature of the Lord
Abbett-sponsored prototype 403(b) plan for Class A shares.
6 Employees of any consenting securities dealer having a sales
agreement with Lord Abbett Distributor.
7 Purchases under a Mutual Fund Wrap-Fee Program.
8 Lord Abbett Consultants/Advisers.
9 Employees of our shareholder servicing agent.
10 Employees of any national securities trade organization to which
Lord Abbett belongs.
11 Employees of Lord Abbett and our Directors/Trustees (active or
retired), their spouses, including surviving spouses, and other
family members.
12 Trustees or custodians of any pension or profit sharing plan, or
payroll deduction IRA for the persons mentioned in 6, 9, 10 and 11
above.
*May be subject to a CDSC.
Contingent Deferred Sales Charges ("CDSC"). The CDSC, regardless of class, is
not charged on shares acquired through reinvestment of dividends or capital
gains distributions and is charged on the original purchase cost or the current
market value of the shares being sold, whichever is lower. In addition,
repayment of loans under Retirement Plans and 403(b) plans will constitute new
sales for purposes of assessing the CDSC.
Class A Share CDSC. If you buy Class A shares under one of the starred (?)
categories listed above subject to a dealer's concession of up to 1% and you
redeem any of the Class A shares within 24 months after the month in which you
initially purchased such shares, the Fund normally will collect a CDSC of 1%.
The Class A share CDSC generally will be waived under the following
circumstances.
o Benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
distribution under Retirement Plans (documentation may be required).
o Redemptions continuing as investments in another fund participating in a
Special Retirement Wrap Program.
Class B Share CDSC. The CDSC for Class B shares normally applies if you redeem
your shares before the sixth anniversary of their initial purchase. The CDSC
varies depending on how long you own your shares according to the following
schedule.
4
<PAGE>
Contingent Deferred
Anniversary(1) Sales Charge on
of the Day on Redemptions
Which the Purchase (As % of Amount
Order Was Accepted Subject to Charge)
- ------------------------------------------------------------
On Before
- ------------------------------------------------------------
1st 5.0%
- ------------------------------------------------------------
1st 2nd 4.0%
- ------------------------------------------------------------
2nd 3rd 3.0%
- ------------------------------------------------------------
3rd 4th 3.0%
- ------------------------------------------------------------
4th 5th 2.0%
- ------------------------------------------------------------
5th 6th 1.0%
- ------------------------------------------------------------
on or after the None
6th anniversary(2)
(1) Anniversary is the 365th day subsequent to a purchase or a prior
anniversary.
(2) Class B shares will automatically convert to Class A shares on the eighth
anniversary of the purchase of Class B shares.
The Class B share CDSC generally will be waived under the following
circumstances.
o Benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
distribution under Retirement Plans.
o Eligible Mandatory Distributions under 403(b) plans and individual
retirement accounts.
o Death of the shareholder (natural person).
o On redemptions of shares in connection with Div-Move and Systematic
Withdrawal Plans (up to 12% per year).
See "Systematic Withdrawal Plan" for more information on CDSCs with respect to
Class B shares.
Class C Share CDSC. The 1% CDSC for Class C shares normally applies if you
redeem your shares before the first anniversary of your original purchase. An
exception is made for shares redeemed from a Mutual Fund Wrap-Fee Program.
Application of CDSC to a Redemption. To determine if a CDSC applies to a
redemption, the Fund redeems shares in the following order.
1 Shares acquired by reinvestment of dividends and capital gains.
2 Shares held for six years or more (Class B) or one year or more (Class C).
3 Shares held the longest before the sixth anniversary of their purchase
(Class B) or before the first anniversary of their purchase (Class C).
OPENING YOUR ACCOUNT
Minimum Initial Investment Per Series
- --------------------------------------------------------------------------------
o Regular account $1000
- --------------------------------------------------------------------------------
o Individual Retirement Accounts, 403(b)
and employer-sponsored retirement plans
under the Internal Revenue Code $250
- --------------------------------------------------------------------------------
o Invest-A-Matic and Div-Move $250 initial
$50 subsequent minimum
For Retirement Plans and Mutual Fund Wrap Programs, there is no minimum
investment required, regardless of share class.
You may purchase shares through any independent securities dealer who has a
sales agreement with Lord Abbett Distributor or you can fill out the attached
application and send it to the Fund at the address stated below. You may be
charged a fee if you effect transactions through an independent dealer or agent.
You should read this Prospectus carefully before placing your order to assure
your order is in proper form.
Lord Abbett Growth Opportunities Fund
P.O. Box 419100
Kansas City, MO 64141
Proper Form. To be in proper form an order submitted directly to the Fund must
contain (1) a completed Application Form or information and documentation
required supplementally by the Fund, and (2) payment must be credited in U.S.
dollars to our custodian bank's account. For more information regarding proper
form of a purchase order, call the Fund at 800-821-5129.
Payment must be credited in U.S. dollars to our custodian bank's account.
IMPORTANT INFORMATION. If you fail to provide a correct taxpayer identification
number or to make certain required certifications, you may be subject to a $50
penalty under the Internal Revenue Code and we may be required to withhold a
portion (31%) of any redemption proceeds and of any dividend or distribution on
your account.
By Exchange. Telephone the Fund at 1-800-821-5129 to request an exchange from
any eligible Lord Abbett-sponsored fund.
We reserve the right to withdraw all or any part of the offering made by
this Prospectus or to reject any purchase order. We also reserve the right to
waive, increase or establish minimum investment requirements. All purchase
orders are subject to our acceptance and are not binding until confirmed or
accepted in writing.
SHAREHOLDER SERVICES
Telephone Exchanges. You or your investment professional, with proper
identification, can instruct the Fund by telephone to exchange shares of any
class for the same class of any Eligible Fund.
5
<PAGE>
Instructions must be received by the Fund in Kansas City by calling
1-800-821-5129 prior to the close of the New York Stock Exchange ("NYSE") to
obtain an Eligible Fund's NAV per class share on that day. Exchanges will be
treated as a sale for federal tax purposes.
For your protection, telephone requests for exchanges are recorded. We
will take measures to verify the identity of the caller, such as asking for your
name, account number, social security or taxpayer identification number and
other relevant information. The Fund will not be liable for following
instructions communicated by telephone that it reasonably believes to be
genuine.
Expedited exchanges by telephone may be difficult to implement in times of
drastic economic or market change. The exchange privilege should not be used to
take advantage of short-term swings in the market. The Fund reserves the right
to limit or terminate this privilege for any shareholder making frequent
exchanges and may revoke the privilege for all shareholders upon 60 days' prior
written notice. You have this privilege unless you refuse it in writing.
You should read the prospectus of the other Lord Abbett-sponsored fund(s)
selected before making an exchange.
Invest-A-Matic. You can make fixed, periodic investments ($250 initial and $50
subsequent minimum) into the Fund by means of automatic money transfers from
your bank checking account. See the attached Application Form for instructions.
Div-Move. You can invest the dividends paid on your account ($50 minimum) into
another account, within the same class, in any Eligible Fund.
The account must be either your account, a joint spousal account, or a custodial
account for your minor child.
Investing by Phone. Upon completion and receipt of the attached application form
(in particular, section 7), you can instruct the Fund by phone to have money
transferred from your bank account to purchase shares of the Fund for an
existing account. The Fund will purchase the requested shares upon receipt of
the money from your bank.
Systematic Withdrawal Plan ("SWP"). You can make periodic cash withdrawals from
your account which are automatically paid to you in fixed or variable amounts.
To participate, the value of your shares must be at least $10,000, except for
retirement plans for which there is no minimum.
With respect to Class B shares, the CDSC will be waived on redemptions of
up to 12% of the current net asset value of your account at the time of your
SWPrequest. For Class B share redemptions over 12% per year, the CDSC will apply
to the entire redemption. Please contact the Fund for assistance in minimizing
the CDSC in this situation.
Redemption proceeds due to a SWP for Class B (up to 12% per year) and
Class C shares, will be redeemed in the order described under "Redemptions".
Lord Abbett's Retirement Plans. The Lord Abbett Family of Funds offers a range
of qualified retirement plans, including IRAs, SIMPLE IRAs, Simplified Employee
Pension Plans, 403(b) and pension and profit-sharing plans, including 401(k)
plans. To find out more about these plans, call the Fund at 1-800-842-0828.
Account Changes. For any changes you need to make to your account, consult your
financial representative or call the Fund at 1-800-821-5129.
Householding. Generally, shareholders with the same last name and address will
receive a single copy of an annual or semi-annual report, unless additional
reports are specifically requested in writing to the Fund.
Reinvestment Privilege. If you sell shares of the Fund, you have the one time
right to reinvest some or all of the proceeds in the same class of any Eligible
Fund within 60 days without a sales charge. If you paid a CDSC when you sold
your shares, you will be credited with the amount of the CDSC. All accounts
involved must have the same registration.
Pricing Shares. The net asset value ("NAV") per share for each class of shares
is calculated each business day at the close of regular trading on the New York
Stock Exchange ("NYSE") by dividing a class's net assets by the number of shares
outstanding. The Fund is open on those business days when the NYSE is open.
Purchases and redemptions are executed at the next NAV to be calculated after
your request is accepted.
6
<PAGE>
REDEMPTIONS
By Broker. Call your broker or investment professional for directions on how to
redeem your shares.
By Telephone. To obtain the proceeds of an expedited redemption of $50,000 or
less, you or your representative can call the Fund at 1-800-821-5129. The Fund
will employ the procedures described in telephone exchanges to confirm that the
instructions received are genuine.
The Fund will not be liable for following instructions communicated by telephone
that it reasonably believes to be genuine.
By Mail. Submit a written redemption request indicating your Fund's name, your
share class, your account number, the name(s) in which the account is registered
and the dollar value or number of shares you wish to sell.
Include all necessary signatures. If the signer has any Legal Capacity,
the signature and capacity must be guaranteed by an Eligible Guarantor. Certain
other legal documentation may be required. For more information regarding proper
documentation call 1-800-821-5129.
We will verify that the shares being redeemed were purchased at least 15
days earlier. Your account balance must be sufficient to cover the amount being
redeemed or your redemption order will not be processed.
Normally a check will be mailed to the name(s) and addresses in which the
account is registered, or otherwise according to your instruction within one
business day after receipt of your redemption request. The Fund reserves the
right to make payment within three business days.
To determine if a CDSC applies to a redemption, see "Contingent Deferred
Sales Charges" above.
- --------------------------------------------------------------------------------
DIVIDENDS AND CAPITAL GAINS
Dividends. The Fund distributes most or all of its net earnings in the form of
dividends which are expected to be paid to shareholders annually.
Capital Gains Distributions. Any capital gains distribution is expected to be
made annually and may be taken in cash or reinvested. Distributions by the Fund
of any net long-term capital gains will be taxable to a shareholder as long-term
capital gains regardless of how long the shareholder has held the shares. Under
recently enacted legislation, the maximum tax rate on long-term capital gains
for a U.S. individual, estate or trust is reduced to 20% for distributions
derived from the sale of assets held by the Fund for more than 12 months. (If
the taxpayer is in the 15% tax bracket, the rate is 10%.)
Dividends/Capital Gains Receipt or Reinvestment. If you elect to receive
dividends or capital gains in cash, a check will be mailed to you as soon as
possible after the reinvestment date. If you arrange for direct deposit, your
payment will be electronically transmitted to your bank account within one day
after the payable date. Most investors reinvest their dividends and capital
gains. If you choose this option, or if you do not indicate any choice, your
dividends and capital gains distributions will be automatically reinvested in
additional shares.
Taxes. The Fund pays no federal income tax on the earnings it distributes to
shareholders. Consequently, dividends you receive from the Fund, whether
reinvested or taken in cash, are generally considered taxable. Dividends
declared in December of any year will be treated for federal income tax purposes
as having been received by shareholders in that year if they are paid before
February 1 of the following year.
Each January the Fund will mail to you, if applicable, a Form 1099 tax
information statement detailing your dividends and capital gain distributions.
You should consult your tax adviser concerning applicable state and local taxes.
For more information about the tax consequences from dividends and
distributions, see the Statement of Additional Information.
- --------------------------------------------------------------------------------
OUR MANAGEMENT
The Fund is supervised by a Board of Directors, an independent body which has
ultimate responsibility for the Fund's activities. The Board has retained Lord
Abbett as investment manager pursuant to a Management Agreement. Lord Abbett has
been an investment manager for over 69 years and currently manages about $27
billion in a family of mutual funds and other advisory accounts. Lord Abbett
provides similar services to thirteen investment companies with thirty-four
separate mutual fund portfolios having various investment objectives and also
advises other investment clients. For more information about the services Lord
Abbett pro-
7
<PAGE>
vides to the Fund, see the Statement of Additional Information.
The Fund pays Lord Abbett a monthly fee based on average daily net assets
for each month. For the fiscal year ended November 30, 1997, the Fund was
obligated to pay Lord Abbett at an annual rate of .75 of 1%. But Lord Abbett
waived the fee and subsidized all the Fund's expenses. For the current fiscal
year such fee and expenses are estimated to be .90 and .63 of 1%, respectively.
The Fund. The Fund is a diversified separate series of Lord Abbett
Research Fund, Inc. (the "Company"), an open-end management investment company
incorporated in Maryland on April 6, 1992. The Fund's former name was Mid-Cap
Series. Its Class A, B and C shares have equal rights as to voting, dividends,
assets and liquidation except for differences resulting from certain
class-specific expenses. The Company currently consists of three series. Only
shares of the Fund are being offered in this prospectus.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
The Fund completed its fiscal year on November 30, 1997. The Fund's net
asset value was $16.18 per share versus $12.84 one year ago. Over the period,
the Fund produced a total return (the percent change in net asset value with all
distributions reinvested) of 28.9%.
Over the past year, the stock market experienced several corrections
before rebounding to new heights. This occurred against a background of
surprising strength in the economy, concerns of inflation and a volatile
interest-rate environment. The positive performance of your Fund over the past
year can be attributed to the use of the best ideas generated by the Fund's
research team. Specifically, individual issues in the technology, finance and
consumer sectors proved to be rewarding.
Your Fund is not sector-weighted (diversified in proportion to an index)
and, as such, during the past year relied on, and continues to rely on, stock
selection of companies with solid fundamental prospects, in the mid-cap
universe.
See the performance chart on the second to last page of this Prospectus.
- --------------------------------------------------------------------------------
INVESTMENT POLICIES, RISKS AND LIMITS
The Fund is permitted to utilize, within limits established by the Board of
Directors, the following investment policies in an effort to enhance the Fund's
performance. If no limit is disclosed for a particular investment policy, this
means that the Board of Directors did not establish a limit for such investment
policy. These policies have risks associated with them. However, the Fund
follows certain practices that may reduce these risks. To the extent the Fund
utilizes some of these policies, its overall performance may be positively or
negatively affected.
Selling Covered Call Options: A covered call option on stock gives the buyer of
the option, upon payment of a premium to the seller (writer) of the option, the
right to call upon the writer to deliver a specified number of shares of a stock
owned by the writer on or before a fixed date at a predetermined price.
Risk: Although the Fund receives income based on receipt of the premium, it
gives up participation in the appreciation of the stock above the predetermined
price if it is called away by the buyer.
Limit: Provided they are traded on a national securities exchange and used to
increase Fund's income and to provide greater flexibility in the disposition of
Fund's portfolio securities, the Fund may write covered call options on
securities having an aggregate market value not to exceed 5% of the Fund's gross
assets.
Financial Futures: A financial futures transaction is an exchange-traded
contract to buy or sell a standard quantity and quality of a financial
instrument or index at a specific future date and price. The Fund may deal in
financial futures transactions with respect to the type of securities described
herein, including indices of such securities and options on such financial
futures.
Risk: The price behavior of the futures contract may not correlate with that of
the item being hedged.
Limit: The Fund will not enter into any futures contracts, or options thereon,
if the aggregate market value of the securities covered by futures contracts
plus options on such financial futures exceeds 50% of the Fund's total assets.
8
<PAGE>
Options Transactions: The Fund may purchase and write (i.e., sell) put and call
options on equity securities or stock indices that are traded on national
securities exchanges.
A put option on equity securities gives the purchaser, in return for a premium,
the right, for a specified period of time, to sell the securities subject to the
option to the writer of the put at the specified exercise price. The writer of
the put option, in return for the premium, has the obligation, upon exercise of
the option, to acquire the securities underlying the option at the exercise
price.
A call option on equity securities gives the purchaser, in return for a premium
paid, the right for a specified period of time to purchase the securities
subject to the option at a specified price (the "exercise price" or "strike
price"). The writer of a call option, in return for the premium, has the
obligation, upon exercise of the option, to deliver, depending upon the terms of
the option contract, the underlying securities to the purchaser upon receipt of
the exercise price.
Options on stock indices are similar to options on equity securities except
that, rather than the right to take or make delivery of stock at a specified
price, an option on a stock index gives the holder the right, in return for a
premium paid, to receive, upon exercise of the option, an amount of cash if the
closing level of the stock index upon which the option is based is greater than,
in the case of a call, or less than, in the case of a put, the exercise price of
the option. The writer of an index option, in return for a premium, is obligated
to pay the amount of cash due upon exercise of the option.
Risk: The Fund as the writer of a put option, might therefore be obligated to
purchase underlying securities for more than their current market value.
When the Fund writes a call option, it gives up the potential for gain on
the underlying securities in excess of the exercise price of the option during
the period that the option is open.
Participation in the options market involves investment risks and
transaction costs to which the Fund would not be subject absent the use of these
strategies. If Fund management's prediction of movement in the direction of the
securities markets is inaccurate, the adverse consequences to the Fund may leave
it in a worse position than if such strategies were not used. Risks inherent in
the use of options include (1) dependence on management's ability to predict
correctly movements in the direction of specific securities being hedged or the
movement in stock indices; (2) imperfect correlation between the price of
options and stock indices and options thereon and movements in the prices of the
securities being hedged; (3) the fact that skills needed to use these strategies
are different from those needed to select portfolio securities; (4) the possible
absence of a liquid secondary market for any particular instrument at any time;
and (5) the possible need to defer closing out certain hedged positions to avoid
adverse tax consequences.
Limit: The Fund may only write covered put options to the extent that
cover for such options does not exceed 25% of the Fund's net assets. The Fund
will not purchase an option if, as a result of such purchase, more than 20% of
its total assets would be invested in premiums for such options.
The Fund will write only "covered" options. An option is covered if, so
long as the Fund is obligated under the option, it owns an offsetting position
in the underlying securities or maintains cash, U.S. Government securities or
other liquid high-grade debt obligations with a value sufficient at all times to
cover its obligations in a segregated account.
See "Investment Objective and Policies -- Limitation on Purchase and Sale of
Stock Options, Options on Stock Indices and Stock Index Futures" in the
Statement of Additional Information.
Foreign Investments: The Fund may invest in securities (of the type described
herein) that are primarily traded in foreign countries.
Risk: Securities markets of foreign countries in which we may invest generally
are not subject to the same degree of regulation as the U.S. markets and may be
more volatile and less liquid than the major U.S. markets. There may be less
publicly-available information on publicly-traded companies, banks and
governments in foreign countries than generally is the case for such entities in
the United States. The lack of uniform accounting standards and practices among
countries impairs the validity of direct comparisons of valuation measures (such
as price/earnings ratios) for securities in different countries. Other
considerations include political and social instability, expropriation, higher
transaction costs, currency fluctuations, withholding taxes that cannot be
passed through as a tax credit or reduction to shareholders and different
securities settlement practices. Foreign securities
9
<PAGE>
may be traded on days that we do not value our portfolio securities, and,
accordingly, net asset values may be significantly affected on days when
shareholders do not have access to the Fund.
Limit: Up to 35% of the Fund's net assets (at the time of investment) may be
invested in securities that are primarily traded in foreign countries.
Forward Foreign Currency Contracts: The Fund may utilize a forward foreign
currency contract which involves an obligation to purchase or sell a specific
amount of a currency at a set price on a future date. The Fund may enter into
forward foreign currency contracts in primarily two circumstances. First, when
the Fund desires to "lock in" the U.S. dollar price of the security, by entering
into a forward contract for the purchase or sale of the amount of foreign
currency involved in the underlying security transaction, the Fund will be able
to protect against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the subject foreign currency during the
period between the date of purchase or sale and the date of settlement.
Second, when Fund management believes that the currency of a particular foreign
country may suffer a decline against the U.S. dollar, the Fund may enter into a
forward contract to sell the amount of foreign currency approximating the value
of some or all of the portfolio securities denominated in such foreign currency
or, in the alternative, may use a cross-currency-hedging technique whereby it
enters into such a forward contract to sell another currency (obtained in
exchange for the currency in which the portfolio securities are denominated if
such securities are sold) which it expects to decline in a similar manner but
that has a lower transaction cost.
Risk: Precise matching of the forward contract and the value of the securities
involved will generally not be possible.
Foreign Currency Put and Call Options: The Fund may purchase foreign currency
put options and write foreign currency call options on U.S. exchanges or U.S.
over-the-counter markets ("OTC"). A put option gives the Fund, upon payment of a
premium, the right to sell a currency at the exercise price until the expiration
of the option and serves to insure against adverse currency price movements in
the underlying portfolio assets denominated in that currency.
A foreign currency call option written by the Fund gives the purchaser, upon
payment of a premium, the right to purchase from the Fund a currency at the
exercise price until the expiration of the option. The Fund may write a call
option on a foreign currency only in conjunction with a purchase of a put option
on that currency ("Cross Hedging"). Such a strategy is designed to reduce the
cost of downside currency protection by limiting currency appreciation
potential.
Risk: OTC options are generally less liquid and involve issuer credit risk. The
staff of the SEC has taken the position that purchased OTC options and the
assets used as "cover" for written OTC options are illiquid securities unless
the Fund and the counterparty have provided for the Fund, at the Fund's
election, to unwind the OTC option. The exercise of such an option ordinarily
would involve the payment by the Fund of an amount designed to reflect the
counterparty's economic loss from an early termination, but does allow the Fund
to treat the assets used as "cover" as "liquid."
Limit: The premiums paid for such foreign currency put options will not exceed
5% of the net assets of the Fund. Unlisted options, together with other illiquid
securities, may comprise no more than 15% of the Fund's net assets. The face
value of such currency call option writing or cross-hedging may not exceed 90%
of the value of the securities denominated in such currency (a) invested in by
the Fund to cover such call writing or (b) to be crossed.
Repurchase Agreements: The Fund may, on occasion, enter into repurchase
agreements whereby the seller of a security agrees to repurchase that security
at a mutually agreed-upon time and price. The period of maturity is usually
quite short, possibly overnight or a few days, although it may extend over a
number of months. The resale price is in excess of the purchase price,
reflecting an agreed-upon rate of return effective for the period of time the
Fund's money is invested in the security. The Fund's repurchase agreements will
at all times be fully collateralized in an amount at least equal to the purchase
price, including accrued interest earned on the underlying securities. The
instruments held as collateral are valued daily, and if the value of the
instruments declines, the Fund's will require additional collateral.
Risk: If the seller defaults and the value of the col-
10
<PAGE>
lateral securing the repurchase agreement declines, the Fund may incur a loss.
When-issued or delayed delivery transactions: Such transactions arise when
securities are purchased or sold by the Fund with payment and delivery taking
place as much as a month or more in the future in order to secure what is
considered to be an advantageous price and yield to the Funds at the time of
entering other liquid high-grade debt obligations having a value equal to or
greater than the Fund's purchase commitments; the custodian will likewise
designate as segregated those securities sold on a delayed delivery basis.
Risk: The securities so purchased are subject to market fluctuation and no
interest accrues to the purchaser during the period between purchase and
settlement. At the time of delivery of the securities the value may be more or
less than the purchase price and an increase in the percentage of the Fund's
assets committed to the purchase of securities on a when-issued or delayed
delivery basis may increase the volatility of the Fund's net asset value.
Illiquid Securities: Securities not traded on the open market. May include
illiquid Rule 144A securities.
Risk: Certain securities may be difficult or impossible to sell at the time and
price the seller would like. Limit: The Fund may invest up to 15% of its assets
in illiquid securities. Securities determined by the Board of Directors to be
liquid are not subject to this limitation.
Rule 144A Securities: Securities determined by the Directors to be liquid
pursuant to Securities and Exchange Commission Rule 144A (the "Rule"). Under the
Rule, a qualifying unregistered security may be resold to a qualified
institutional buyer without registration and without regard to whether the
seller originally purchased the security for investment.
Risk: Investments in Rule 144A securities initially determined to be liquid
could have the effect of diminishing the level of the Fund's liquidity during
periods of decreased market interest in such securities.
Borrowing: The Fund may borrow money.
Risk: Depending on the circumstances, the interest paid on borrowed money may
reduce the Fund's return.
Limit: Not in excess of 331/3% of total assets (including the amount borrowed),
and then only as a temporary measure for extraordinary or emergency purposes. Up
to an additional 5% of total assets are available for temporary purposes. The
Fund may obtain such short-term credit as may be necessary for the clearance of
purchases and sales of portfolio securities.
Rights and Warrants: The Fund may hold or sell any property or securities which
it may obtain through the exercise of conversion rights or warrants. The term
"warrants" includes warrants which are not listed on the New York or American
Stock Exchanges.
Limit: The Fund has no present intention to commit more than 5% of its gross
assets to rights and warrants.
Closed-End Investment Companies: The Fund may invest in closed-end investment
companies.
Risk: Shares of such investment companies sometimes trade at a discount or
premium in relation to their net asset value and there may be duplication of
fees, for example, to the extent that the Fund and the closed-end investment
company both charge a management fee.
Limit: No more than 5% of the gross assets of the Fund may be invested in
closed-end investment companies.
Securities Lending: The lending of securities to financial institutions which
provide continuous collateral equal to the market value of the securities
loaned.
Risk: Delay in recovery of collateral and loss should the borrower of the
security fail financially.
Limit: Loans, in the aggregate, may not exceed 5% of the Fund's total assets.
Temporary Investments: For temporary defensive purposes or to create reserve
purchasing power pending other investments, the Fund may invest in high-quality,
short-term debt obligations of banks, corporations or the U.S. Government of the
type normally owned by a money market fund. Neither an issuer's ceasing to be
rated investment grade nor a rating reduction below that grade will
11
<PAGE>
require elimination of a bond from our portfolios.
Objective, Restriction and Policy Changes. The Fund will not change its
investment objective or its fundamental restrictions without shareholder
approval. If the Fund determines that its objective can best be achieved by a
substantive change in investment policy, which may be changed without
shareholder approval, the Fund may make such change by disclosing it in the
prospectus.
For more information about investment policies, restrictions and risk factors,
see the Statement of Additional Information.
- --------------------------------------------------------------------------------
SALES COMPENSATION
As part of its plan for distributing shares, the Fund, along with Lord Abbett
Distributor, pays compensation to Authorized Institutions that sell the Fund's
shares. These firms typically pass along a portion of this compensation to your
financial representative.
Compensation payments originate from two sources: sales charges (front-end,
level-load and back-end) and 12b-1 fees that are paid out of the Fund's assets
("12b-1" refers to the federal securities regulation authorizing annual fees of
this type). The 12b-1 fee rates vary by share class, according to the Rule 12b-1
plan adopted by the Fund for each share class. The sales charges and 12b-1 fees
paid by investors are detailed in the class-by-class information under "Investor
Expenses" and "Purchases". The portion of these expenses that are paid as
compensation to Authorized Institutions, such as your dealer, are shown in the
chart on the last page of this Prospectus. Sometimes compensation is not paid
where tracking data is not available for certain accounts and where the
Authorized Institution waives part of the compensation as with an account under
a Mutual Fund Wrap-Fee Program.
Rule 12b-1 distribution fees may be used to pay for sales compensation to
Authorized Institutions, for any activity which is primarily intended to result
in the sale of shares and, for Class B shares, the financing of sales
commissions.
First Year Compensation. Whenever you make an investment in the Fund, the
Authorized Institution receives compensation as described in the chart on the
last page of this Prospectus.
Annual Compensation After First Year. Beginning with the second year after an
investment is made, the Authorized Institution receives annual compensation as
described in the chart on the last page of this Prospectus.
Additional Concessions may be paid to Authorized Institutions from time to time.
- --------------------------------------------------------------------------------
GLOSSARY OF TERMS
Additional Concessions. A supplemental annual distribution fee equal to 0.10% of
the average daily net asset value of the Class A shares is available to
Authorized Institutions which have a program for the promotion and retention of
such shares satisfying Lord Abbett Distributor. Class A shares held pursuant to
a satisfactory program would, for example, (i) constitute a significant
percentage of the Fund's net assets, (ii) be held for a substantial length of
time and/or (iii) have a lower than average redemption rate.
Lord Abbett Distributor may, for specified periods, allow dealers to
retain the full sales charge for sales of shares or may pay an additional
concession to a dealer who sells a minimum dollar amount of our shares and/or
shares of other Lord Abbett-sponsored funds. In some instances, such additional
concessions will be offered only to certain dealers expected to sell significant
amounts of shares. Lord Abbett Distributor may, from time to time, implement
promotions under which Lord Abbett Distributor will pay a fee to dealers with
respect to certain purchases not involving imposition of a sales charge.
Additional payments may be paid from Lord Abbett Distributor's own resources and
will be made in the form of cash or, if permitted, non-cash payments. The
non-cash payments will include business seminars at Lord Abbett's headquarters
or other locations, including meals and entertainment, or the receipt of
merchandise. The cash payments may include payment of various business expenses
of the dealer.
12
<PAGE>
In selecting dealers to execute portfolio transactions for the Fund's
portfolio, if two or more dealers are considered capable of obtaining best
execution, we may prefer the dealer who has sold our shares and/or shares of
other Lord Abbett-sponsored funds.
Authorized Institutions. Institutions and persons permitted by law to receive
service and/or distribution fees under a Rule 12b-1 plan are "authorized
institutions".
Eligible Fund. (a) Any Lord Abbett-sponsored fund except certain tax-free,
single-state series where the exchanging shareholder is a resident of a state in
which such series is not offered for sale; Lord Abbett Equity Fund; Lord Abbett
Series Fund; Lord Abbett U.S. Government Securities Money Market Fund ("GSMMF")
(except for holdings in GSMMF which are attributable to any shares exchanged
from the Lord Abbett Family of Funds). (b) Any Authorized Institution's
affiliated money market fund satisfying Lord Abbett Distributor as to certain
omnibus account and other criteria.
Eligible Guarantor. Any broker or bank that is a member of the medallion stamp
program. Most major securities firms and banks are members of this program. A
notary public is not an eligible guarantor.
Eligible Mandatory Distributions. If Class B shares represent a part of an
individual's total IRA or 403(b) investment, the CDSC waiver is available only
for that portion of a mandatory distribution which bears the same relation to
the entire mandatory distribution as the B share investment bears to the total
investment.
Employees of Lord Abbett/Fund Directors (Trustees). The terms "directors,"
"trustees" (of a Fund) and "employees" (of Lord Abbett) include a director's
(trustee's) or employee's spouse (including the surviving spouse of a deceased
director (trustee) or employee). The terms "directors," "trustees" and
"employees of Lord Abbett" also include other family members and retired
directors (trustees) and employees.
Legal Capacity. With respect to a redemption request, if (for example) the
request is on behalf of the estate of a deceased shareholder, John W. Doe, by a
person (Robert A. Doe) who has the legal capacity to act for the estate of the
deceased shareholder because he is the executor of the estate, then the request
must be executed as follows: Robert A.Doe, Executor of the Estate of John W.
Doe.
Similarly, if (for example) the redemption request is on behalf of the ABC
Corporation by a person (Mary B. Doe) that has the legal capacity to act on
behalf of this corporation, because she is the President of the corporation,
then the request must be executed as follows: ABC Corporation by Mary B.Doe,
President.
An acceptable form of guarantee would be as follows:
o In the case of the estate -
Robert A. Doe, Executor
of the Estate of John W. Doe
SIGNATURE GUARANTEED
[Date] MEDALLION GUARANTEED
NAME OF GUARANTOR
/s/ [ILLEGIBLE]
--------------------
AUTHORIZED SIGNATURE
(960) X9003470
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM(TM)
SR
o In the case of the corporation -
ABC Corporation
/s/ Mary B. Doe
By Mary B. Doe, President
SIGNATURE GUARANTEED
[Date] MEDALLION GUARANTEED
NAME OF GUARANTOR
/s/ [ILLEGIBLE]
--------------------
AUTHORIZED SIGNATURE
(960) X9003470
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM(TM)
SR
Lord Abbett Consultants/Advisers. Consultants and advisers to Lord Abbett, Lord
Abbett Distributor or Lord Abbett-sponsored funds who consent to such purchase
if such persons provide services to Lord Abbett, Lord Abbett Distributor or such
funds on a continuing basis and are familiar with such fund.
13
<PAGE>
Lord Abbett Distributor LLC. Lord Abbett Distributor is the Fund's exclusive
selling agent. Lord Abbett Distributor is obligated to use its best efforts to
find purchasers for the shares of the Fund, and to make reasonable efforts to
sell Fund shares so long as, in Lord Abbett Distributor's judgment, a
substantial distribution can be obtained.
Mutual Fund Wrap-Fee Program. Certain unaffiliated authorized brokers, dealers,
registered investment advisers or other financial institutions who have entered
into an agreement with Lord Abbett Distributor in accordance with certain
standards approved by Lord Abbett Distributor, providing specifically for the
use of our shares (and sometimes providing for acceptance of orders for such
shares on our behalf) in particular investment products made available for a fee
to clients of such brokers, dealers, registered investment advisers and other
financial institutions.
Purchaser. The term "purchaser" includes: (i) an individual, (ii) an individual
and his or her spouse and children under the age of 21 and (iii) a trustee or
other fiduciary purchasing shares for a single trust estate or single fiduciary
account (including a pension, profit-sharing, or other employee benefit trust
qualified under Section 401 of the Internal Revenue Code -- more than one
qualified employee benefit trust of a single employer, including its
consolidated subsidiaries, may be considered a single trust, as may qualified
plans of multiple employers registered in the name of a single bank trustee as
one account), although more than one beneficiary is involved.
Retirement Plans. Employer-sponsored retirement plans under the Internal Revenue
Code.
Special Retirement Wrap Program. A program sponsored by an authorized
institution showing one or more characteristics distinguishing it, in the
opinion of Lord Abbett Distributor from a mutual fund wrap-fee program. Such
characteristics include, among other things, the fact that an authorized
institution does not charge its clients any fee of a consulting or advisory
nature that is economically equivalent to the distribution fee under Class A
12b-1 Plan and the fact that the program relates to participant-directed
Retirement Plans.
Total Return. "Total return" for the one-, five- and ten-year periods represents
the average annual compounded rate of return on an investment of $1,000 in the
Fund at the maximum public offering price. When total return is quoted for Class
A shares, it includes the payment of the maximum initial sales charge. When
total return is shown for Class B and Class C shares, it reflects the effect of
the applicable CDSC. Total return also may be presented for other periods or
based on investments at reduced sales charge levels or net asset value. Any
quotation of total return not reflecting the maximum sales charge (front-end,
level, or back-end) would be reduced if such sales charge were used. Quotations
of yield or total return for any period when an expense limitation is in effect
will be greater than if the limitation had not been in effect. See "Past
Performance" in the Statement of Additional Information for a more detailed
description.
Yield. Each class of shares calculates its "yield" by dividing the annualized
net investment income per share on the portfolio during a 30-day period by the
maximum offering price on the last day of the period. The yield of each class
will differ because of the different expenses (including actual 12b-1 fees) of
each class of shares. The yield data represents a hypothetical investment return
on the portfolio, and does not measure investment return based on dividends
actually paid to shareholders. To show that return, a dividend distribution rate
may be calculated. Dividend distribution rate is calculated by dividing the
dividends of a class derived from net investment income during a stated period
by the maximum offering price on the last day of the period. Yields and dividend
distribution rate for Class A shares reflect the deduction of the maximum
initial sales charge, but may also be shown based on the Fund's net asset value
per share. Yields for Class B and Class C shares do not reflect the deduction of
the CDSC.
- --------------------------------------------------------------------------------
This Prospectus does not constitute an offering in any jurisdiction in
which such offer is not authorized or in which the person making such offer is
not qualified to do so or to anyone to whom it is unlawful to make such offer.
No person is authorized to give any information or to make any
representations not contained in this Prospectus or in supplemental sales
material authorized by the Fund and no person is entitled to rely upon any
information or representation not contained herein or therein.
14
<PAGE>
The performance of the Class A shares of the multi-class Fund which is shown in
the comparisons below will be more or less than that shown below for Class B and
Class C shares based on the differences in sales charges and fees paid by
shareholders investing in the different classes.
Fund at Maximum
Fund at NAV Offering Price
8/1/95 $10,000 $ 9,425
11/30/95 10,180 9,595
11/30/96 13,011 12,263
11/30/97 16,772 15,808
S&P Mid-Cap Russel Mid-Cap
400 Index Growth Index
8/1/95 $10,000 $10,000
11/30/95 10,609 10,524
11/30/96 12,600 12,581
11/30/97 16,059 14,962
- --------------------------------------------------------------------------------
Average Annual Total Returns
for Class A Shares(3)
- --------------------------------------------------------------------------------
Life of Series
1 Year 8/1/95 - 11/30/97
- --------------------------------------------------------------------------------
21.50% 21.69%
================================================================================
(1) Data reflects the deduction of the maximum initial sales charge of 5.75%
appliable to Class A shares.
(2) Performance numbers for the Standard & Poor's Mid-Cap 400 and the Russell
Mid-Cap Growth Indices which are unmanaged, do not reflect transaction costs
or management fees. The second index is being used because it is a growth
index which, in Fund management's opinion, is a more appropriate standard to
measure the Fund's performance against in view of the growth style of
investing used to manage the portfolio. See "Portfolio Management". An
investor cannot invest directly in these indices.
(3) Total return is the percent change in value with all dividends and
distributions reinvested for the periods shown using the SEC-required
uniform method to compute such return.
15
<PAGE>
<TABLE>
<CAPTION>
==================================================================================================================================
FIRST YEAR COMPENSATION
Class A investments
Front=end
sales charge Dealer's
paid by investors concession Service fee(1) Total compensation(2)
(% of offering price) (% of offering price) (%of net investment) (% of offering price)
==================================================================================================================================
<S> <C> <C> <C> <C>
Less than $50,000 5.75% 5.00% 0.25% 5.24%
- ----------------------------------------------------------------------------------------------------------------------------------
$50,000 - $99,999 4.75% 4.00% 0.25% 4.24%
- ----------------------------------------------------------------------------------------------------------------------------------
$100,000 - $249,999 3.75% 3.25% 0.25% 3.49%
- ----------------------------------------------------------------------------------------------------------------------------------
$250,000 - $499,999 2.75% 2.25% 0.25% 2.49%
- ----------------------------------------------------------------------------------------------------------------------------------
$500,000 - $999,999 2.00% 1.75% 0.25% 2.00%
==========================--------------------------------------------------------------------------------------------------------
$1 million or more(3) or
Retirement Plan - 100 or
more eligible employees(3)
or Special Retirement Wrap
Program(3)
==========================--------------------------------------------------------------------------------------------------------
First $5 million no front-end sales charge 1.00% 0.25% 1.25%
- ----------------------------------------------------------------------------------------------------------------------------------
Next $5 million above that no front-end sales charge 0.55% 0.25% 0.80%
- ----------------------------------------------------------------------------------------------------------------------------------
Next $40 million above that no front-end sales charge 0.50% 0.25% 0.75%
- ----------------------------------------------------------------------------------------------------------------------------------
Over $50 million no front-end sales charge 0.25% 0.25% 0.50%
==================================================================================================================================
Class B investments Paid at time of sale (% of net asset value)
==================================================================================================================================
All amounts no front-end sales charge 3.75% 0.25% 4.00%
==================================================================================================================================
Class C investments
==================================================================================================================================
All amounts no front-end sales charge 0.75% 0.25% 1.00%
<CAPTION>
==================================================================================================================================
ANNUAL COMPENSATION AFTER FIRST YEAR
Class A investments
==================================================================================================================================
<S> <C> <C> <C> <C>
All amounts no front-end sales charge none 0.25% 0.25%
==================================================================================================================================
Class B investments Percentage of average net assets (4)
==================================================================================================================================
All amounts no front-end sales charge none 0.25% 0.25%
==================================================================================================================================
Class C investments
==================================================================================================================================
All amounts no front-end sales charge 0.75% 0.25% 1.00%
</TABLE>
(1) The service fee for Class A shares is paid quarterly. The first year's
service fee on Class B and C shares is paid at the time of sale.
(2) Reallowance/concession percentages and service fee percentages are
calculated from different amounts, and therefore may not equal total
compensation percentages if combined using simple addition. Additional
Concessions may be paid to Authorized Institutions from time to time.
(3) Concessions are paid at the time of sale on all Class A shares sold during
any 12-month period starting from the day of the first net asset value sale.
With respect to(a) Class A share purchases at $1 million or more, sales
qualifying at such level under rights of accumulation and statement of
intention privileges are included and(b) for Special Retirement Wrap
Programs, only new sales are eligible and exchanges into the Fund are
excluded.
(4) With respect to Class B and C shares, 0.25% and 1.00%, respectively, of the
average annual net asset value of such shares outstanding during the quarter
(including distribution reinvestment shares after the first anniversary of
their issuance) is paid to Authorized Institutions. With respect to Class C
shares, 1% of such average annual net asset value for distribution
reinvestment shares before the first anniversary of their issuance is paid
to Lord Abbett Disbributor LLC to finance its activities primarily intended
to result in the sale of such shares. These fees are paid quarterly in
arrears.
16
<PAGE>
Investment Manager and Underwriter
Lord, Abbett & Co. and Lord Abbett Distributor LLC
The General Motors Building
767 Fifth Avenue
New York, New York 10153-0203
212-848-1800
Custodian
The Bank of New York
48 Wall Street
New York, New York 10286
Transfer Agent and Dividend Disbursing Agent
United Missouri Bank of Kansas City, N.A.
Tenth and Grand
Kansas City, Missouri 64141
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419100
Kansas City, Missouri 64141
800-821-5129
Auditors
Deloitte & Touche LLP
Counsel
Debevoise & Plimpton
Printed in the U.S.A.
LARF-_-____
(10/98)
LORD ABBETT GROWTH OPPORTUNITES FUND
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
<PAGE>
LORD ABBETT
Statement of Additional Information October----,1998
Lord Abbett Growth Opportunities Fund
- --------------------------------------------------------------------------------
This Statement of Additional Information is not a Prospectus. A Prospectus may
be obtained from your securities dealer or from Lord Abbett Distributor LLC
("Lord Abbett") at The General Motors Building, 767 Fifth Avenue, New York, New
York 10153-0203. This Statement relates to, and should be read in conjunction
with, the Prospectus dated October 1, 1998.
The Lord Abbett Growth Opportunities Fund (sometimes referred to as `we" or the
"Fund") is a diversified separate Series of Lord Abbett Research Fund, Inc. (the
"Company"), an open-end management investment company incorporated in Maryland
on April 6, 1992. The Fund's former name was Mid-Cap Series. Its Class A, B and
C shares have equal rights as to voting, dividends, assets and liquidation
except for differences resulting from certain class-specific expenses. Only
shares of the Fund are described in this Statement of Additional Information. To
date 50,000,000 shares of the Fund have been designated by the Board of
Directors.
Rule 18f-2 under the Investment Company Act of 1940, provides that any matter
required to be submitted by the provisions of the Act or applicable state law,
or otherwise, to the holders of the outstanding voting securities of an
investment company, such as the Fund, shall not be deemed to have been
effectively acted upon unless approved by the holders of a majority of the
outstanding shares of the Fund affected by such matter. Rule 18f-2 further
provides that a Fund shall be deemed to be affected by a matter unless the
interests of the Fund in the matter are identical or the matter does not affect
any interest of such Fund. However, the Rule exempts from these separate voting
requirements the selection of independent public accountants, the approval of
principal distributing contracts and the election of directors.
Shareholder inquiries should be made by writing directly to the Fund or by
calling 800-821-5129. In addition, you can make inquiries through Lord Abbett.
TABLE OF CONTENTS PAGE
1. Investment Objective and Policies 2
2. Directors and Officers 4
3. Investment Advisory and Other Services 7
4. Portfolio Transactions 8
5. Purchases, Redemptions
and Shareholder Services 9
6. Past Performance 10
7. Taxes 10
8. Information About The Fund 11
9. Financial Statements 11
1
<PAGE>
1.
Investment Objective and Policies
Fundamental Investment Restrictions. The Fund's investment objective and
policies are described in the Prospectus under "How We Invest." In addition to
those policies described in the Prospectus, the Fund is subject to the following
fundamental investment restrictions which cannot be changed for the Fund without
the approval of the holders of a majority of the Fund's respective shares. The
Fund may not: (1) borrow money (except that (i) the Fund may borrow from banks
(as defined in the Act) in amounts up to 33 1/3% of its total assets (including
the amount borrowed), (ii) the Fund may borrow up to an additional 5% of its
total assets for temporary purposes, (iii) the Fund may obtain such short-term
credit as may be necessary for the clearance of purchases and sales of portfolio
securities and (iv) the Fund may purchase securities on margin to the extent
permitted by applicable law); (2) pledge its assets (other than to secure such
borrowings or, to the extent permitted by the Fund's investment policies as set
forth in its prospectus and statement of additional information, as they may be
amended from time to time, in connection with hedging transactions, short sales,
when-issued and forward commitment transactions and similar investment
strategies); (3) engage in the underwriting of securities except pursuant to a
merger or acquisition or to the extent that in connection with the disposition
of its portfolio securities it may be deemed to be an underwriter under federal
securities laws; (4) make loans to other persons, except that the acquisition of
bonds, debentures or other corporate debt securities and investment in
government obligations, commercial paper, pass-through instruments, certificates
of deposit, bankers acceptances, repurchase agreements or any similar
instruments shall not be deemed to be the making of a loan, and except further
that the Fund may lend its portfolio securities, provided that the lending of
portfolio securities may be made only in accordance with applicable law and the
guidelines set forth in the Fund's prospectus and statement of additional
information, as they may be amended from time to time; (5) buy or sell real
estate (except that the Fund may invest in securities directly or indirectly
secured by real estate or interests therein or issued by companies which invest
in real estate or interests therein), commodities or commodity contracts (except
to the extent the Fund may do so in accordance with applicable law and without
registering as a commodity pool operator under the Commodity Exchange Act as,
for example, with futures contracts); (6) with respect to 75% of the gross
assets of the Fund, buy securities if the purchase would then cause it to (i)
have more than 5% of its gross assets, at market value at the time of
investment, invested in the securities of any one issuer except securities
issued or guaranteed by the U.S. Government, its agencies or instrumentalities
or (ii) own more than 10% of the voting securities of any issuer; (7) invest
more than 25% of its assets, taken at market value, in the securities of issuers
in any particular industry (excluding securities of the U.S. Government, its
agencies and instrumentalities);or (8) issue senior securities to the extent
such issuance would violate applicable law.
With respect to the restrictions mentioned herein, compliance therewith will not
be affected by change in the market value of portfolio securities but will be
determined at the time of purchase or sale of such securities.
Non-Fundamental Investment Restrictions. In addition to those policies described
in the Prospectus and the investment restrictions above which cannot be changed
without shareholder approval, the Fund also is subject to the following
non-fundamental investment policies which may be changed by the Board of
Directors without shareholder approval. The Fund may not: (1) borrow in excess
of 5% of make short sales of securities or maintain a short position except to
the extent permitted by applicable law; (2) invest knowingly more than 15% of
its net assets (at the time of investment) in illiquid securities (securities
qualifying for resale under Rule 144A of the Securities Act of 1933 ("Rule
144A") that are determined by the Directors, or by Lord Abbett pursuant to
delegated authority, to be liquid are considered liquid securities); (3) invest
in securities issued by other investment companies as defined in the Act, except
as permitted by the Act; (4) purchase securities of any issuer unless it or its
predecessor has a record of three years' continuous operation, except that the
Fund may purchase securities of such issuers through subscription offers or
other rights it receives as a security holder of companies offering such
subscriptions or rights, and such purchases will then be limited in the
aggregate to 5% of the Fund's net assets at the time of investment; (5) hold
securities of any issuer when more than 1/2 of 1% of the issuer's securities are
owned beneficially by one or more of the Fund's officers or directors or by one
or more partners of the Fund's underwriter or investment adviser if these owners
in the aggregate own beneficially more than 5% of such securities; (6) invest in
warrants, valued at the lower of cost or market, to exceed 5% of the Fund's net
assets,
2
<PAGE>
including warrants not listed on the New York or American Stock Exchange which
may not exceed 2% of such net assets; (7) invest in real estate limited
partnership interests or interest in oil, gas or other mineral leases, or
exploration or development programs, except that the Fund may invest in
securities issued by companies that engage in oil, gas or other mineral
exploration or development activities; or (8) borrow in excess of 33 1/3 of its
total assets (including the amount borrowed), and then only as a temporary
measure for extraordinary or emergency purposes.
Investment Techniques Which May Be Used By The Fund
Lending of Portfolio Securities. The Fund may seek to earn income by lending
portfolio securities. Under present regulatory policies, such loans may be made
to member firms of the New York Stock Exchange ("NYSE") and are required to be
secured continuously by collateral consisting of cash, cash equivalents, or
United States Treasury bills maintained in an amount at least equal to the
market value of the securities loaned. The Fund will have the right to call a
loan and obtain the securities loaned at any time upon five days' notice. During
the existence of a loan the Fund will receive the income earned on investment of
collateral. The aggregate value of the securities loaned will not exceed 5% of
the value of the Fund's gross assets.
If the Fund enters into repurchase agreements as provided in clause (4) above,
it will do so only with those primary reporting dealers that report to the
Federal Reserve Bank of New York and with the 100 largest United States
commercial banks and the underlying securities purchased under the agreements
will consist only of those securities in which the Fund otherwise may invest.
Foreign Currency Hedging Techniques. The Fund may utilize various foreign
currency hedging techniques described below, including forward foreign currency
contracts and foreign currency put and call options.
Forward Foreign Currency Contracts. A forward foreign currency contract involves
an obligation to purchase or sell a specific amount of a specific currency at a
set price at a future date. The Fund expects to enter into forward foreign
currency contracts in primarily two circumstances. First, when the Fund enters
into a contract for the purchase or sale of a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security. By
entering into a forward contract for the purchase or sale of the amount of
foreign currency involved in the underlying security transaction, the Fund will
be able to protect against a possible loss resulting from an adverse change in
the relationship between the U.S. dollar and the subject foreign currency during
the period between the date the security is purchased or sold and the date on
which payment is made or received.
Second, when management believes that the currency of a particular foreign
country may suffer a decline against the U.S. dollar, the Fund may enter into a
forward contract to sell the amount of foreign currency approximating the value
of some or all of the Fund's portfolio securities denominated in such foreign
currency or, in the alternative, the Fund may use a cross-hedging technique
whereby it sells another currency which the Fund expects to decline in a similar
way but which has a lower transaction cost. Precise matching of the forward
contract amount and the value of the securities involved will not generally be
possible since the future value of such securities denominated in foreign
currencies will change as a consequence of market movements in the value of
those securities between the date the forward contract is entered into and the
date it matures. The Fund does not intend to enter into such forward contracts
under this second circumstance on a continuous basis.
Foreign Currency Put and Call Options. The Fund also may purchase foreign
currency put options and write foreign currency call options on U.S. exchanges
or U.S. over-the-counter markets. A put option gives the Fund, upon payment of a
premium, the right to sell a currency at the exercise price until the expiration
of the option and serves to insure against adverse currency price movements in
the underlying portfolio assets denominated in that currency.
3
<PAGE>
Exchange-listed options markets in the United States include several major
currencies, and trading may be thin and illiquid. A number of major investment
firms trade unlisted options which are more flexible than exchange-listed
options with respect to strike price and maturity date. Unlisted options
generally are available in a wider range of currencies. Unlisted foreign
currency options are generally less liquid than listed options and involve the
credit risk associated with the individual issuer. Unlisted options, together
with other illiquid securities, are subject to a limit of 15% of the Fund's net
assets.
A call option written by the Fund gives the purchaser, upon payment of a
premium, the right to purchase from the Fund a currency at the exercise price
until the expiration of the option. The Fund may write a call option on a
foreign currency only in conjunction with a purchase of a put option on that
currency. Such a strategy is designed to reduce the cost of downside currency
protection by limiting currency appreciation potential. The face value of such
writing may not exceed 90% of the value of the securities denominated in such
currency invested in by a Fund or in such cross currency (referred to above) to
cover such call writing.
The Fund's custodian will segregate cash or permitted securities belonging to
the Fund in an amount not less than that required by SEC Release 10666 and
related policies with respect to the Fund's assets committed to (a) writing
options, (b) forward foreign currency contracts and (c) cross hedges entered
into by the Fund. If the value of the securities segregated declines, additional
cash or debt securities will be added on a daily basis (i.e., marked to market),
so that the segregated amount will not be less than the amount of the Fund's
commitments with respect to such written options, forward foreign currency
contracts and cross hedges.
2.
Directors and Officers
The following director is a partner of Lord, Abbett & Co. ("Lord Abbett"), The
General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203. He has
been associated with Lord Abbett for over five years and is also an officer,
director or trustee of the twelve other Lord Abbett-sponsored Fund's. He is an
"interested person" as defined in the Act, and as such, may be considered to
have an indirect financial interest in the Rule 12b-1 Plan described in the
Prospectus.
Robert S. Dow, age 53, Chairman and President
The following outside directors are also directors or trustees of the twelve
other Lord Abbett-sponsored Fund's referred to above.
E. Thayer Bigelow
Courtroom Television Network
600 Third Avenue
New York, New York
Chief Executive Officer of Courtroom Television Network. Formerly President and
Chief Executive Officer of Time Warner Cable Programming, Inc. Prior to that,
formerly President and Chief Operating Officer of Home Box Office, Inc. Age 56.
William H.T. Bush
Bush-O'Donnell & Co., Inc
101 South Hanley Road, Suite 1025
St. Louis, Missouri
Co-founder and Chairman of the Board of financial advisory firm of
Bush-O'Donnell & Company. Age 60.
4
<PAGE>
Robert B. Calhoun
Monitor Clipper Partners
650 Madison Avenue, 9th Floor
New York, NY
Managing Director of Monitor Clipper Partners and President of the Clipper Group
L.P., both private equity investment funds. Age 56.
Stewart S. Dixon
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois
Partner in the law firm of Wildman, Harrold, Allen & Dixon. Age 67.
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 72.
Alan MacDonald
Directorship Inc.
8 Sound Shore Drive
Greenwich, Connecticut
Managing Director of Directorship Inc., a consultancy in board management and
corporate governance. Formerly General Partner of The Marketing Partnership,
Inc., a full service marketing consulting firm (1994-1997). Prior to that,
Chairman and Chief Executive Officer of Lincoln Snacks, Inc., manufacturer of
branded snack foods (1992-1994). His career spands 36 years at Stouffers and
Nestle with 18 of the years as Chief Executive Officer. Currently serves as
Director of Den West Restaurant Co., J. B. Williams, and Fountainhead Water
Company. Age 65.
Hansel B. Millican, Jr.
Rochester Button Company
1100 Noblin Avenue
South Boston, Virginia
President and Chief Executive Officer of Rochester Button Company. Age 69.
Thomas J. Neff
Spencer Stuart & Associates
277 Park Avenue
New York, New York
Chairman of Spencer Stuart U.S., an executive search consulting firm. Age 60.
5
<PAGE>
The second column of the following table sets forth the compensation accrued for
the Fund's outside directors. The third and fourth columns set forth information
with respect to the equity-based benefits accrued for outside directors
maintained by the Lord Abbett-sponsored Fund's. The fourth column sets forth the
total compensation payable by such Fund's to the outside directors/trustees. No
director of the Fund associated with Lord Abbett and no officer of the Fund
received any compensation from the Fund for acting as a director or officer.
For the Fiscal Year Ended November 30, 1997
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Pension or For Year Ended
Retirement Benefits December 31, 1997
Accrued by the Fund Total Compensation
Aggregate and Twelve Other Accrued by the Fund
Compensation Lord Abbett-Sponsored And Twelve other Lord
Name of Director Accrued by the Fund Funds(2) Abbett--Sponsored Funds(3)
- ---------------- ------------------- ------ --------------------------
<S> <C> <C> <C>
E. Thayer Bigelow None $17,068 $56,000
William T. Bush* None None None
Robert B. Calhoun** None None None
Stewart S. Dixon None $32,190 $55,000
John C. Jansing None $45,085(4) $55,000
C. Alan MacDonald None $30,703 $57,400
Hansel B. Millican, Jr. None $37,747 $55,000
Thomas J. Neff None $19,853 $56,000
</TABLE>
- --------------------------------------------------------------------------------
* Elected as a director, May 5, 1998 effective as of June 17, 1998
**Elected as a director, June 17, 1998 effective as of August 13, 1998
1. Outside directors' fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored Fund's based on
the net assets of each fund. The Fund has not commenced paying such fees.
When the Fund starts to pay such fees, a portion of the fees payable by
the Fund to its outside directors/trustees will be deferred under a plan
that deems the deferred amounts to be invested in shares of the Fund for
later distribution to the directors/trustees. The amounts of the aggregate
compensation payable by the other series of the Fund as of November
30,1997, deemed invested in Company Shares, including dividends reinvested
and changes in net asset value applicable to such deemed investments,
were: Mr. Bigelow, $39,081; Mr. Dixon, $107,152, Mr. Jansing, $142,903,
Mr. MacDonald,$84,555; Mr. Millican,$143,927; and Mr. Neff,$143,008.
2. The amounts in Column 3 were accrued by the Lord Abbett-Sponsored Fund's
for the 12 months ended November 30, 1997 with respect to the equity based
plans established for independent directors in 1996. This plan supersedes
a previously approved retirement plan for all future directors. Current
directors had the option to convert their accrued benefits under the
retirement plan. All of the outside directors except one made such an
election.
3. This column shows aggregate compensation, including directors fees and
attendance fees for board and committee meetings, of a nature referred to
in footnote one, accrued by the Lord Abbett-sponsored funds during the
year ended December 31, 1997. Since no amounts of aggregate compensation
were payable by the Fund for the year ended November 30, 1997, no shares
were deemed invested in Fund shares.
4 Mr. Jansing chose to continue to receive benefits under the retirement
plan which provides that outside directors (trustees) may receive annual
retirement benefits for life equal to their final annual retainer
following retirement at or after age 72 with at least ten years of
service. Thus, if Mr. Jansing were to retire and the annual retainer
payable by the other Lord Abbett Fund's (excluding the Fund) were the same
as it is today, he would receive annual retirement benefits of $50,000.
6
<PAGE>
Except where indicated, the following executive officers of the Company have
been associated with Lord Abbett for over five years. Of the following, Messrs.
Brown, Carper, Hilstad, Morris, and Walsh are partners of Lord Abbett; the
others are employees: Robert G. Morris, age 52, Robert P. Fetch, age 45
Executive Vice Presidents, Paul A. Hilstad, age 55, Vice President and Secretary
(with Lord Abbett since 1995; formerly Senior Vice President and General Counsel
of American Capital Management & Research, Inc.); Zane E. Brown, age 46; Daniel
E. Carper, age 46; Lawrence H. Kaplan, age 41 (with Lord Abbett since 1997
formerly Vice President and Chief Counsel of Salomon Brothers Asset Management
Inc. 1995 - 1997; prior thereto Senior Vice President and Associate General
Counsel of Kidder, Peabody & Co. Incorporated); Thomas F. Konop, age 55; A.
Edward Oberhaus, age 37; Keith F. O'Connor, age 42; John J. Walsh, age 62, Vice
Presidents; and Donna M. McManus, age 37, Treasurer (with Lord Abbett since
1996, formerly a Senior Manager at Deloitte & Touche LLP).
The Company's By-Laws provide that the Company shall not hold an annual meeting
of its stockholders in any year unless one or more matters are required to be
acted on by stockholders under the Act, or unless called by a majority of the
Board of Directors or by stockholders holding at least one quarter of the stock
of the Company outstanding and entitled to vote at the meeting. When any such
annual meeting is held, the stockholders will elect directors and vote on the
approval of the independent auditors of the Company.
As of November 30, 1997 our officers and directors, as a group, owned less than
12% of the Fund's outstanding shares.
3.
Investment Advisory and Other Services
As described under "Our Management" in the Prospectus, Lord Abbett is the
company's investment manager. Six of the twelve general partners of Lord Abbett
are officers and/or directors of the Company and are identified as follows: Zane
E. Brown, Daniel E. Carper, Robert S. Dow, Paul A. Hilstad, Robert G. Morris,
and John J. Walsh. The other general partners of Lord Abbett who are neither an
officers nor directors of the Fund are Stephen I. Allen, Daria L. Foster, Robert
J. Noelke, E. Wayne Nordberg , Michael McLaughlin and W. Thomas Hudson. The
address of each partner is The General Motors Building, 767 Fifth Avenue, New
York, New York 10153-0203.
The services performed by Lord Abbett are described under "Our Management" in
the Prospectus. Under the Management Agreement, we are obligated to pay Lord
Abbett a monthly fee, based on average daily net assets for each month, at the
annual rate of .90 of 1% of the Fund's average daily net assets. For the period
from August 1, 1995 (commencement of operations) through November 30, 1995, and
each of the two fiscal years ended November 30, 1997 and the fiscal half year
ended May 31, 1998 this management fee was .75 of 1% and was waived by Lord
Abbett with respect to the Fund and, except for this waiver, would have amounted
to $2,125, $8,249; $10,844, and $7,077 respectively. On September 15, 1998, the
Fund's shareholders voted to raise the management fee to .90 of 1%.
We are obligated to pay all expenses not expressly assumed by Lord Abbett,
including, without limitation, 12b-1 expenses, outside directors' fees and
expenses, association membership dues, legal and auditing fees, taxes, transfer
and dividend disbursing agent fees, shareholder servicing costs, expenses
relating to shareholder meetings, expenses of preparing, printing and mailing
stock certificates and shareholder reports, expenses of registering the Fund's
shares under federal and state securities laws, expenses of preparing, printing
and mailing prospectuses to existing shareholders, insurance premiums, brokerage
and other expenses connected with executing portfolio transactions. For the
period from August 1, 1995 (commencement of operations) through November 30,
1995 and each of the two fiscal years ended November 30, 1997, and the fiscal
half year ended May 31, 1998, Lord Abbett, although not obligated to,
voluntarily assumed the above-mentioned expenses which, if not so assumed, would
have amounted to $7,544, $18,000; $12,000, and $6,000 respectively, with respect
to the Fund.
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281 are
the independent auditors of the Fund and must be approved at least annually by
our Board of Directors to continue in such capacity. They perform audit services
for the Fund including the examination of financial statements included in our
annual report to shareholders.
The Bank of New York ("BONY"), 48 Wall Street, New York, New York, is the Fund's
custodian. In accordance with the requirements of Rule 17f-5, the Fund's
directors have approved arrangements permitting the Fund's
7
<PAGE>
foreign assets not held by BONY or its foreign branches to be held by certain
qualified foreign banks and depositories.
4.
Portfolio Transactions
Our policy is to obtain best execution on all our portfolio transactions, which
means that we seek to have purchases and sales of portfolio securities executed
at the most favorable prices, considering all costs of the transaction including
brokerage commissions and dealer markups and markdowns and taking into account
the full range and quality of the brokers' services. Consistent with obtaining
best execution, we pay a commission rate determined to attract the services we
require, as described below. That rate may be higher or lower than other brokers
might charge on the same transactions. Our 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, we may, if considered
advantageous, make a purchase from or sale to another Lord Abbett-sponsored fund
without the intervention of any broker-dealer.
Broker-dealers are selected on the basis of their professional capability and
the value and quality of their brokerage and research services. Normally, the
selection is made by traders who are officers of the Company 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.
We pay a commission rate that we believe is appropriate to give maximum
assurance that our brokers will provide us, on a continuing basis, the highest
level of brokerage services available. While we do not always seek the lowest
possible commissions on particular trades, we believe that our commission rates
are in line with the rates that many other institutions pay. Our traders are
authorized to pay brokerage commissions in excess of those that other brokers
might accept on the same transactions in recognition of the value of the
services performed by the executing brokers, viewed in terms of either the
particular transaction or the overall responsibilities of Lord Abbett with
respect to us and the other accounts they manage. Such services include showing
us trading opportunities in a timely manner, 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 these brokers also provide research services at least some of which are
useful to Lord Abbett in their overall responsibilities with respect to us and
the other accounts they manage. Research includes the furnishing of analyses and
reports concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts and trading equipment and
computer software packages, acquired from third-party suppliers, that enable
Lord Abbett to access various information bases. Such services may be used by
Lord Abbett in servicing all their accounts, and not all of such services will
necessarily be used by Lord Abbett in connection with their management of the
Fund; conversely, such services furnished in connection with brokerage on other
accounts managed by Lord Abbett may be used in connection with their management
of the Fund, and not all of such services will necessarily be used by Lord
Abbett in connection with their advisory services to such other accounts. We
have been advised by Lord Abbett that research services received from brokers
cannot be allocated to any particular account, are not a substitute for Lord
Abbett's services but are supplemental to their own research effort and when
utilized, are subject to internal analysis before being incorporated by Lord
Abbett into their investment process. As a practical matter, it would not be
possible for Lord Abbett to generate all of the information presently provided
by brokers. While receipt of research services from brokerage firms has not
reduced Lord Abbett's normal research activities, the expenses of Lord Abbett
could be materially increased if it attempted to generate such additional
information through its own staff and purchased such equipment and software
packages directly from the suppliers.
No commitments are made regarding the allocation of brokerage business to or
among brokers, and trades are executed only when they are dictated by investment
decisions of the Fund to purchase or sell portfolio securities.
If two or more broker-dealers are considered capable of offering the equivalent
likelihood of best execution, the broker-dealer who has sold our shares and/or
shares of other Lord Abbett-sponsored Fund's may be preferred.
If other clients of Lord Abbett buy or sell the same security at the same time
as we do, transactions will, to the extent practicable, be allocated among all
participating accounts in proportion to the amount of each order and will be
executed daily until filled so that each account shares the average price and
commission cost of each day. Other clients who direct that their brokerage
business be placed with specific brokers or who invest through wrap accounts
8
<PAGE>
introduced to Lord Abbett by certain brokers may not participate with us in the
buying and selling of the same securities as described above. If these clients
wish to buy or sell the same security as we do, they may have their transactions
executed at times different from our transactions and thus may not receive the
same price or incur the same commission cost as we do.
We will not seek "reciprocal" dealer business (for the purpose of applying
commissions in whole or in part for our benefit or otherwise) from dealers as
consideration for the direction to term of portfolio business.
If we tender portfolio securities pursuant to a cash tender offer, we will seek
to recapture any fees or commissions involved by designating Lord Abbett our
agent so that the fees may be passed back to us. As other legally permissible
opportunities come to our attention for the direct or indirect recapture by us
of brokerage commissions or similar fees paid on portfolio transactions, our
directors will determine whether we should or should not seek such recapture.
For the period from August 1, 1995 (commencement of operations) through November
30, 1995 and the two fiscal years ended November 30, 1997, and the fiscal half
year ended May 31, 1998 we paid total commissions to independent broker-dealers
of $3,245, $2,155, $3,687 and $4,027 respectively, with respect to the Mid-Cap
Fund.
5.
Purchases, Redemptions
and Shareholder Services
Information concerning how we value our shares for the purchase and redemption
of our shares is contained in the Prospectus under "Purchases" and
"Redemptions", respectively.
As disclosed in the Prospectus, we calculate our net asset value as of the close
of the New York Stock Exchange ("NYSE") on each day that the NYSE is open for
trading by dividing our total net assets by the number of shares outstanding at
the time of calculation. The NYSE is closed on Saturdays and Sundays and the
following holidays -- New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas.
The Fund values its portfolio securities at market value as of the close of the
NYSE. Market value will be determined as follows: securities listed or admitted
to trading privileges on the New York or American Stock Exchange or on the
NASDAQ National Market System are valued at the last sales price, or, if there
is no sale on that day, at the mean between the last bid and asked prices, or,
in the case of bonds, in the over-the-counter market if, in the judgment of the
Fund's officers, that market more accurately reflects the market value of the
bonds. Over-the-counter securities not traded on the NASDAQ National Market
System are valued at the mean between the last bid and asked prices. Securities
for which market quotations are not available are valued at fair market value
under procedures approved by the Board of Directors.
The maximum offering price of our shares on October 15, 1998 was computed as
follows:
The Fund
Net asset value per share (net assets value divided by
shares outstanding) ...............................................$----------
Maximum offering price per share (net asset value
divided by .9425) .................................................$----------
The Fund has entered into a distribution agreement with Lord Abbett under which
Lord Abbett is obligated to use its best efforts to find purchasers for the
shares of the Fund and to make reasonable efforts to sell the Fund's shares so
long as, in Lord Abbett's judgment, a substantial distribution can be obtained
by reasonable efforts.
As stated in the Prospectus, our shares may be purchased at net asset value only
by directors (trustees) of the Lord Abbett-sponsored Fund's, partners and
employees of Lord Abbett, and spouses and other family members of such directors
(trustees), partners and employees.
The right to redeem and receive payment, as described in the Prospectus, may be
suspended if the NYSE is closed (except for weekends or customary holidays),
trading on the NYSE is restricted or the Securities and Exchange Commission
deems an emergency to exist.
Our Board of Directors may authorize redemption of all of the shares in any
account in which there are fewer than
9
<PAGE>
25 shares. Before authorizing such redemption, the Board must determine that it
is in our economic best interest or necessary to reduce disproportionately
burdensome expenses in servicing shareholder accounts. At least 60 days' prior
written notice will be given before any such redemption, during which time
shareholders may avoid redemption by bringing their accounts up to the minimum
set by the Board.
6.
Past Performance
The Fund computes the average annual compounded rate of total return during
specified periods that would equate the initial amount invested to the ending
redeemable value of such investment by adding one to the computed average annual
total return, raising the sum to a power equal to the number of years covered by
the computation and multiplying the result by one thousand dollars, which
represents a hypothetical initial investment. The calculation assumes deduction
of the maximum sales charge from the initial amount invested (in this case there
is no sales charge) and reinvestment of all income dividends and capital gains
distributions on the reinvestment dates at prices calculated as stated in the
Prospectus. The ending redeemable value is determined by assuming a complete
redemption at the end of the period(s) covered by the average annual total
return computation.
These figures represent past performance, and an investor should be aware that
the investment return and principal value of a Fund investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. Therefore, there is no assurance that this performance will be
repeated in the future.
7.
Taxes
The value of any shares redeemed by the Fund or otherwise sold may be more or
less than your tax basis in the shares at the time the redemption or sale is
made. Any gain or loss generally will be taxable for federal income tax
purposes. Any loss realized on the sale or redemption of Fund shares which you
have held for six months or less will be treated for tax purposes as a long-term
capital loss to the extent of any capital gains distributions which you received
with respect to such shares. Losses on the sale of stock or securities are not
deductible if, within a period beginning 30 days before the date of the sale and
ending 30 days after the date of sale, the taxpayer acquires stock or securities
that are substantially identical.
The writing of call options and other investment techniques and practices which
the Fund may utilize, as described above under "Investment Objectives and
Policies," may create "straddles" for United States federal income tax purposes
and may affect the character and timing of the recognition of gains and losses
by the Fund. Such transactions may increase the amount of short-term capital
gain realized by the Fund, which is taxed as ordinary income when distributed to
shareholders. Limitations imposed by the Internal Revenue Code on regulated
investment companies may restrict the Fund's ability to engage in transactions
in options. As described in the Prospectus under "How We Invest - Risk Factors,"
the Fund may be subject to foreign withholding taxes which would reduce the
yield on its investments. Tax treaties between certain countries and the United
States may reduce or eliminate such taxes. It is expected that Fund shareholders
who are subject to United States federal income tax will not be entitled to
claim a federal income tax credit or deduction for foreign income taxes paid by
the Fund.
The Fund will be subject to a 4% non-deductible excise tax on certain amounts
not distributed (and not treated as having been distributed) on a timely basis
in accordance with a calendar-year distribution requirement. The Fund intends to
distribute to shareholders each year an amount adequate to avoid the imposition
of such excise tax. Dividends paid by the Fund will qualify for the
dividends-received deduction for corporations to the extent they are derived
from dividends paid by domestic corporations.
Gains and losses realized by the Fund on certain transactions, including sales
of foreign debt securities and certain transactions involving foreign currency,
will be treated as ordinary income or loss for federal income tax purposes to
the extent, if any, that such gains or losses are attributable to changes in
exchange rates for foreign currencies. Accordingly, distributions taxable as
ordinary income will include the net amount, if any, of such foreign exchange
gains and will be reduced by the net amount, if any, of such foreign exchange
losses.
If the Fund purchases shares in certain foreign investment entities, called
"passive foreign investment companies," it may be subject to United States
federal income tax on a portion of any "excess distribution" or gain from the
disposition of such shares, even if such income is distributed as a taxable
dividend by the Fund to its shareholders. Additional charges in the nature of
interest may be imposed on either the Fund or its shareholders in respect of
10
<PAGE>
deferred taxes arising from such distributions or gains.
If the Fund were to invest in a passive foreign investment company with respect
to which the Fund elected to make a "qualified electing fund" election, in lieu
of the foregoing requirements, the Fund might be required to include in income
each year a portion of the ordinary earnings and net capital gains of the
qualified electing fund, even if such amount were not distributed to the Fund.
8.
Information About the Fund
The directors, trustees and officers of Lord Abbett-sponsored mutual Fund's,
together with the partners and employees of Lord Abbett, are permitted to
purchase and sell securities for their personal investment accounts. In engaging
in personal securities transactions, however, such persons are subject to
requirements and restrictions contained in the Fund's Code of Ethics which
complies, in substance, with each of the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing. Among other things,
the Code requires that Lord Abbett partners and employees obtain advance
approval before buying or selling securities, submit confirmations and quarterly
transaction reports, and obtain approval before becoming a director of any
company; and it prohibits such persons from investing in a security 7 days
before or after any Lord Abbett-sponsored fund or Lord Abbett-managed account
considers a trade or trades in such G1 security, prohibiting profiting on trades
of the same security within 60 days and trading on material and non-public
information. The Code imposes certain similar requirements and restrictions on
the independent directors and trustees of each Lord Abbett-sponsored mutual fund
to the extent contemplated by the recommendations of such Advisory Group.
9.
Financial Statements
The financial statements with respect to the Fund for the fiscal half year ended
May 31, 1998 (unaudited) and the fiscal year ended November 30, 1997 and the
report of Deloitte & Touche LLP, independent auditors, on such financial
statements contained in the 1997 Annual Report to Shareholders of Fund are
incorporated herein by reference to such financial statements and report in
reliance upon the authority of Deloitte & Touche LLP as experts in auditing and
accounting.
11
<PAGE>
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Part A - Financial Highlights for the six-month period ended
May 31, 1998, for the two fiscal years ended November 30, 1997
and November 30, 1996, and for the period August 1, 1995
(commencement of operations) to November 30, 1995.
(b) Exhibits -
5 Addendum to Management Contract*
15 Plan of Distribution pursuant to Rule 12b-1 for Class C Shares**
27 Financial Data Schedule*
* Filed herewith.
** To be filed.
Item 25. Person Controlled by or Under Common Control with Registrant
None.
Item 26. Number of Record Holders of Securities
As of June 22, 1998:
Large-Cap - (Class A) - 2,814
(Class B) - 2,153
(Class C) - 539
Small-Cap - (Class A) - 16,443
(Class B) - 16,478
(Class C) - 4,629
(Class Y) - 6
Mid-Cap - (Class A) - 58
Item 27. Indemnification
Registrant is incorporated under the laws of the State of Maryland
and is subject to Section 2-418 of the Corporations and Associations
Article of the Annotated Code of the State of Maryland controlling
the indemnification of directors and officers. Since Registrant has
its executive offices in the State of New York, and is qualified as
a foreign corporation doing business in such State, the persons
covered by the foregoing statute may also be entitled to and subject
to the limitations of the indemnification provisions of Section
721-727 of the New York Business Corporation Law.
The general effect of these statutes is to protect officers,
directors and employees of Registrant against legal liability and
expenses incurred by reason of their positions with the Registrant.
The statutes provide for indemnification for liability for
proceedings not brought on behalf of the corporation and for those
brought on behalf of the corporation, and in each case place
conditions under which indemnification will be permitted,
4
<PAGE>
including requirements that the officer, director or employee acted
in good faith. Under certain conditions, payment of expenses in
advance of final disposition may be permitted. The By-Laws of
Registrant, without limiting the authority of Registrant to
indemnify any of its officers, employees or agents to the extent
consistent with applicable law, makes the indemnification of its
directors mandatory subject only to the conditions and limitations
imposed by the above-mentioned Section 2-418 of Maryland Law and by
the provisions of Section 17(h) of the Investment Company Act of
1940 as interpreted and required to be implemented by SEC Release
No. IC-11330 of September 4, 1980.
In referring in its By-Laws to, and making indemnification of
directors subject to the conditions and limitations of, both Section
2-418 of the Maryland Law and Section 17(h) of the Investment
Company Act of 1940, Registrant intends that conditions and
limitations on the extent of the indemnification of directors
imposed by the provisions of either Section 2-418 or Section 17(h)
shall apply and that any inconsistency between the two will be
resolved by applying the provisions of said Section 17(h) if the
condition or limitation imposed by Section 17(h) is the more
stringent. In referring in its By-Laws to SEC Release No. IC-11330
as the source for interpretation and implementation of said Section
17(h), Registrant understands that it would be required under its
By-Laws to use reasonable and fair means in determining whether
indemnification of a director should be made and undertakes to use
either (1) a final decision on the merits by a court or other body
before whom the proceeding was brought that the person to be
indemnified ("indemnitee") was not liable to Registrant or to its
security holders by reason of willful malfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the
conduct of his office ("disabling conduct") or (2) in the absence of
such a decision, a reasonable determination, based upon a review of
the facts, that the indemnitee was not liable by reason of such
disabling conduct, by (a) the vote of a majority of a quorum of
directors who are neither "interested persons" (as defined in the
1940 Act) of Registrant nor parties to the proceeding, or (b) an
independent legal counsel in a written opinion. Also, Registrant
will make advances of attorneys' fees or other expenses incurred by
a director in his defense only if (in addition to his undertaking to
repay the advance if he is not ultimately entitled to
indemnification) (1) the indemnitee provides a security for his
undertaking, (2) Registrant shall be insured against losses arising
by reason of any lawful advances, or (3) a majority of a quorum of
the non- interested, non-party directors of Registrant, or an
independent legal counsel in a written opinion, shall determine,
based on a review of readily available facts, that there is reason
to believe that the indemnitee ultimately will be found entitled to
indemnification.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expense incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the
5
<PAGE>
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
Lord, Abbett & Co. acts as investment advisor for twelve, other
open-end investment companies (of which it is principal underwriter
for thirteen), and as investment adviser to approximately 6,220
private accounts as of December 31, 1997. Other than acting as
directors and/or officers of open-end investment companies managed
by Lord, Abbett & Co., none of Lord, Abbett & Co.'s partners has, in
the past two fiscal years, engaged in any other business,
profession, vocation or employment of a substantial nature for his
own account or in the capacity of director, officer, employee,
partner or trustee of any entity except as follows:
John J. Walsh
Trustee
The Brooklyn Hospital Center
100 Parkside Avenue
Brooklyn, N.Y.
Item 29. Principal Underwriter
(a) Lord Abbett Affiliated Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Mid-Cap Value Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett Global Fund, Inc.
Lord Abbett U. S. Government Securities Money Market Fund,
Inc.
Lord Abbett Series Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Tax-Free Income Trust
Lord Abbett Securities Trust
Lord Abbett Investment Trust
Investment Advisor
American Skandia Trust (Lord Abbett Growth and Income
Portfolio)
6
<PAGE>
(b) The partners of Lord, Abbett & Co. are:
Name and Principal Positions and Offices
Business Address(1) with Registrant
------------------- ---------------
Robert S. Dow Chairman and President
Paul A. Hilstad Vice President & Secretary
Zane E. Brown Vice President
Daniel E. Carper Vice President
Robert G. Morris Vice President
John J. Walsh Vice President
The other general partners of Lord, Abbett & Co. who are neither
officers nor directors of the Registrant are Stephen Allen, Daria L. Foster, W.
Thomas Hudson, Michael McLaughlin, Robert J. Noelke and E. Wayne Nordberg.
(1) Each of the above has a principal business address 767 Fifth
Avenue, New York, NY 10153
(c) Not applicable
Item 30. Location of Accounts and Records
Registrant maintains the records, required by Rules 31a - 1(a) and
(b), and 31a - 2(a) at its main office.
Lord, Abbett & Co. maintains the records required by Rules 31a -
1(f) and 31a - 2(e) at its main office.
Certain records such as canceled stock certificates and
correspondence may be physically maintained at the main office of
the Registrant's Transfer Agent, Custodian, or Shareholder Servicing
Agent within the requirements of Rule 31a-3.
Item 31. Management Services
None
Item 32. Undertakings
The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
The registrant undertakes, if requested to do so by the holders of
at least 10% of the registrant's outstanding shares, to call a
meeting of shareholders for the purpose of voting upon the question
of removal of a director or directors and to assist in
communications with other shareholders as required by Section 16(c).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant has duly caused this Registration Statement
and/or any amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on the
31st day of July 1998.
LORD ABBETT RESEARCH FUND, INC.
By /s/ Robert S. Dow
----------------------------
Robert S. Dow,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Chairman, President
/s/ Robert S. Dow and Director July 31, 1998
- ----------------------- ------------------------- ----------------------
Robert S. Dow (Title) (Date)
Vice President and
Keith F. O'Connor Chief Financial Officer July 31, 1998
- ----------------------- ------------------------- ----------------------
Keith F. O'Connor (Title) (Date)
/s/ E. Wayne Nordberg Director July 31, 1998
- ----------------------- ------------------------- ----------------------
E. Wayne Nordberg (Title) (Date)
/s/ Stewart S. Dixon Director July 31, 1998
- ----------------------- ------------------------- ----------------------
Stewart S. Dixon (Title) (Date)
/s/ John C. Jansing Director July 31, 1998
- ----------------------- ------------------------- ----------------------
John C. Jansing (Title) (Date)
/s/ C. Alan MacDonald Director July 31, 1998
- ----------------------- ------------------------- ----------------------
C. Alan MacDonald (Title) (Date)
/s/ Hansel B. Millican, Jr. Director July 31, 1998
- ----------------------- ------------------------- ----------------------
Hansel B. Millican, Jr. (Title) (Date)
/s/ Thomas J. Neff Director July 31, 1998
- ----------------------- ------------------------- ----------------------
Thomas J. Neff (Title) (Date)
/s/ E. Thayer Bigelow Director July 31, 1998
- ----------------------- ------------------------- ----------------------
E. Thayer Bigelow (Title) (Date)
/s/ Robert B. Calhoun Director July 31, 1998
- ----------------------- ------------------------- ----------------------
Robert B. Calhoun (Title) (Date)
<PAGE>
Exhibit 5
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 Lord Abbett Growth Opportunities Fund ("Fund") do hereby agree that
the annual management fee rate for the Fund with respect to paragraph 2 of the
Agreement shall be .90% of 1% of the value of the Fund's 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
Fund.
LORD, ABBETT & CO.
BY: ________________________
Partner
LORD ABBETT RESEARCH FUND, INC.
(on behalf of Lord Abbett Growth Opportunities Fund)
BY: _______________________
Vice President
Dated: August , 1998
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000887194
<NAME> LORD ABBETT RESEARCH FUND, INC.
<SERIES>
<NUMBER> 02
<NAME> LORD ABBETT RESEARCH FUND, INC. - MID-CAP SERIES
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<TOTAL-LIABILITIES> 6552
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<EQUALIZATION> 752
<DISTRIBUTIONS-OF-INCOME> 22742
<DISTRIBUTIONS-OF-GAINS> 212952
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<NUMBER-OF-SHARES-REDEEMED> 514
<SHARES-REINVESTED> 16654
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<ACCUMULATED-NII-PRIOR> 24451
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<OVERDISTRIB-NII-PRIOR> 0
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