Lord Abbett
Research Fund
Large-Cap Series
Small-Cap Value Series
Prospectus
April 1, 1999
(As Revised August 1, 1999)
[LOGO]
As with all mutual funds, the Securities and Exchange Commission does not
guarantee that the information in this prospectus is accurate or complete, and
it has not judged these funds for investment merit. It is a criminal offense
to state otherwise.
Class P shares of the funds are neither offered to the general public nor
available in all states. Please call 800-821-5129 for further information.
<PAGE>
Table of Contents
The Funds Page
Information about the goal/ Large-Cap Series 2
approach, main risks, past Small-Cap Value Series 4
performance, fees and expenses
Your Investment
Information for managing Purchases 6
your fund account Opening Your Account 8
Redemptions 9
Distributions and Taxes 9
Services For Fund Investors 10
Sales Charges and Service Fees 11
Management 12
For More Information
How to learn more Other Investment Techniques 13
about the funds Glossary of Shaded Terms 16
Recent Performance 18
Financial Information
Financial highlights of each Large-Cap Series 19
fund, and dealer compensation Small-Cap Value Series 21
Compensation For Your Dealer 23
How to learn more about the Back Cover
funds and other Lord Abbett funds
<PAGE>
GOAL/APPROACH
The Large-Cap Fund's investment objective is growth of capital and growth
of income consistent with reasonable risk. Normally, we invest in the
undervalued common stocks of large-capitalization companies with
outstanding equity securities having an aggregate market value of at least
$1.5 billion. Current income is not emphasized.
Typically, in choosing stocks, we look for companies using the following
process:
Quantitative research is performed on a universe of large, seasoned
U.S. companies to identify those which have stocks that we believe
represent the best bargains.
Fundamental research is conducted to identify current bargain-priced
securities among the largest publicly-traded companies.
Under normal circumstances, at least 65% of the Large-Cap Fund's total
assets will consist of investments made in large-cap companies, determined
at the time of purchase.
We may take a temporary defensive position by investing some of our assets
in shortterm debt securities. This could reduce the benefit from any
upswing in the market and prevent the fund from achieving its investment
objective.
MAIN RISKS
The Large-Cap Fund will invest in companies that appear to have good
prospects for improvement in earnings trends or asset values. The fund will
invest in companies on the basis of the fundamental economic and business
factors which will affect future earnings and which the fund believes are
the primary factors determining the future market valuation of stocks.
There can be no assurance that stocks selected for the fund will appreciate
in value.
At the time of purchase, securities selected for our portfolio may be
largely neglected by the investment community or, if widely followed, they
may be out of favor. Our investment portfolio typically will be less
volatile and prices will move less dramatically than the overall stock
market. Individual-security risk is managed through broad company and
industry diversification.
An investment in the fund is not a bank deposit. It is not FDIC-insured or
government endorsed. It is not a complete investment program. You could
lose money in the fund, but you also have the potential to make money.
We or the fund refers to either of the Large-Cap Series (the "Large-Cap Fund")
or the Small-Cap Value Series (the "Small-Cap Value Fund") of Lord Abbett
Research Fund, Inc. (the "company"). Each fund operates under the supervision of
the company's Board with the advice of Lord, Abbett & Co. ("Lord Abbett"), its
investment manager.
About each fund. Each fund is a professionally managed portfolio of securities
purchased with the pooled money of investors. Each fund strives to reach its
stated goals, although as with all mutual funds, cannot guarantee results.
Bargain stocks are stocks of companies that appear underpriced according to
certain financial measurements of their intrinsic worth or business prospects.
Large companies are established companies that are considered "known
quantities." Large companies often have the resources to weather economic
shifts, though they can be slower to innovate than small companies.
Seasoned companies are usually established companies whose securities have
gained a reputation for quality with the investing public and enjoy high
liquidity in the market.
You should read this entire prospectus, including "Other Investment Techniques,"
which concisely describes the other investment strategies and their risks used
by the fund.
2 The Funds
<PAGE>
Large-Cap Series Symbols: Class A -LRLCX
Class B -LARBX
Class C -LLRCX
PAST PERFORMANCE
The information below provides some indication of the risks of investing in
the fund, by showing changes in the fund's class A shares' performance from
calendar year to calendar year and by showing how the fund's average annual
returns compare with those of a broad measure of market performance.
[GRAPHIC OMITTED]
Best Quarter: 18.88%
Worst Quarter: -12.45%
The table below shows a comparison of the fund's class A, B and C average annual
total returns to that of the S&P 500(R) Index. Fund returns assume reinvestment
of dividends and distributions and payment of the maximum applicable front-end
or deferred sales charge. All periods end on December 31, 1998.
<TABLE>
Class 1 Year 5 Years Since Inception (i) S& P 500(R)Index (ii)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A 9.60% 18.40% 18.27% 20.73% (iii)
- -----------------------------------------------------------------------------------------
B 9.59% - 21.29% 33.33% (iv)
- -----------------------------------------------------------------------------------------
C 13.94% - 20.17% 31.31% (v)
- -----------------------------------------------------------------------------------------
S& P 500(R)Index (ii) 28.74% 24.08% - -
- -----------------------------------------------------------------------------------------
</TABLE>
Past performance is not a prediction of future results.
- ----------------------
(i)The date of inception for each class is: A -6/3/92; B -8/1/96; and C -4/1/97.
(ii) Performance for the unmanaged S& P 500 (R) Index does not reflect
transaction costs or management fees.
(iii) Represents total return for the period 6/30/92 -12/3198, to correspond
with class A inception date.
(iv) Represents total return for the period 8/31/96 -12/31/98, to correspond
with class B inception date.
(v)Represents total return for the period 4/30/97 -12/31/98, to correspond with
class C inception date.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
Fee table
<TABLE>
<CAPTION>
Class A Class B Class C Class P
<S> <C> <C> <C> <C>
Shareholder Fees (Fees paid directly from your investment)
- -------------------------------------------------------------------------------------------------------
Maximum Sales Charge on Purchases
- -------------------------------------------------------------------------------------------------------
(as a % of offering price) 5.75% none none none
- -------------------------------------------------------------------------------------------------------
(3)
Maximum Deferred Sales Charge (See "Purchases") none 5.00% 1.00% none
- -------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (Expenses deducted from fund assets) (as a % of average net assets) (1)
- -------------------------------------------------------------------------------------------------------
Management Fees (See "Management") 0.75% 0.75% 0.75% 0.75%
- -------------------------------------------------------------------------------------------------------
Distribution and Service (12b-1) Fees (2) 0.35% 1.00% 1.00% 0.45%
- -------------------------------------------------------------------------------------------------------
Other Expenses 0.24% 0.24% 0.24% 0.24%
- -------------------------------------------------------------------------------------------------------
Total Operating Expenses 1.34% 1.99% 1.99% 1.44%
- -------------------------------------------------------------------------------------------------------
</TABLE>
Expense example
- --------------------------------------------------------------------------------
This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment at maximum sales charge, if any, 5% total return each year and no
changes in expenses. You pay the following expenses over the course of each
period shown if you sell your shares at the end of the period, although your
actual cost may be higher or lower. The expenses include any applicable
contingent deferred sales charges.
Share class 1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Class A shares $703 $975 $1,267 $2,097
- --------------------------------------------------------------------------------
Class B shares $702 $924 $1,272 $2,151
- --------------------------------------------------------------------------------
Class C shares $302 $624 $1,072 $2,319
- --------------------------------------------------------------------------------
Class P shares $146 $455 $ 787 $1,727
You would pay the following expenses on the same investment, assuming you kept
your shares.
Class A shares $703 $975 $1,267 $2,097
- --------------------------------------------------------------------------------
Class B shares $202 $624 $1,072 $2,151
- --------------------------------------------------------------------------------
Class C shares $202 $624 $1,072 $2,319
- --------------------------------------------------------------------------------
Class P shares $146 $455 $ 787 $1,727
- --------------------------------------------------------------------------------
This example is for comparison and is not a representation of the fund's actual
expenses or returns, either past or present.
Management fees are payable to Lord Abbett for the fund's investment management.
12b-1 fees refer to fees incurred for activities that are primarily intended to
result in the sale of fund shares and service fees for shareholder account
service and maintenance.
Other expenses include fees paid for miscellaneous items such as transfer
agency, legal and share registration fees.
(1) The annual fund operating expenses have been restated from fiscal year
amounts to reflect current fees.
(2) Because 12b-1 distribution fees are paid out on an ongoing basis, over time
they will increase the cost of your investment and may cost you more than
paying other types of sales charges.
(3) Class B shares will convert to class A shares on the eighth anniversary of
your original purchase of class B shares.
The Funds 3
<PAGE>
Small-Cap Value Series
GOAL/APPROACH
The Small-Cap Value Fund's investment objective is long-term capital
appreciation. Usually we invest primarily in equity securities of smaller
companies with market capitalizations of less than $1 billion.
Typically, in choosing stocks, we usually look for companies using the
following process:
Quantitative research is performed to evaluate various criteria,
including the price of shares in relation to book value, sales, asset
value, earnings, dividends and cash flow.
Fundamental research is conducted to assess the dynamics of each
company within its industry and within the economy. We evaluate the
company's business strategies by assessing management's ability to
execute the strategies, and evaluating the adequacy of its financial
resources.
Usually, at least 65% of the Small-Cap Value Fund's total assets will be
invested in common stocks issued by smaller, less well-known companies
(with market capitalizations of less than $1 billion) selected using
fundamental investment analysis. The fund may invest up to 35% of its total
assets in the securities of larger companies. Companies in which the fund
is likely to invest may have more limited product lines, markets or
financial resources and may lack management depth or experience as compared
with companies with larger market capitalizations. The fund may invest up
to 35% of its assets in foreign securities.
We may take a temporary defensive position by investing some of our assets
in shortterm debt securities. This could reduce the benefit from any
upswing in the market and prevent the fund from achieving its investment
objective.
MAIN RISKS
Small-company stocks offer significant appreciation potential. Generally,
small companies carry more risk than larger companies. Generally, small
companies rely on limited product lines and markets, financial resources,
or other factors, and this may make them more susceptible to setbacks or
economic downturns. Small-company stocks tend to be more volatile in price,
have fewer shares outstanding and trade less frequently than large company
stocks. Therefore, small company stocks may be subject to wider price
fluctuations. Many small company stocks are traded over-the-counter and are
not traded in the volume typical of stocks listed on a national securities
exchange.
The foreign securities in which the Small-Cap Value Fund may invest are
subject to currency fluctuations. Foreign securities markets may not be
subject to the same degree of regulation as the U. S. markets and may be
more volatile and less liquid than the U. S. markets. Investors should also
be aware that the fund has the ability to invest in derivatives, the value
of which may fluctuate greatly.
An investment in the fund is not a bank deposit. It is not FDIC-insured or
government endorsed. It is not a complete investment program. You could
lose money in the fund, but you also have the potential to make money.
Small companies often are younger and less well-established, with a potential to
be faster-growing but often more volatile than large companies.
Large companies are established companies that are considered "known
quantities." Large companies often have the resources to weather economic
shifts, though they can be slower to innovate than small companies.
Over-the-counter stocks are usually those of smaller companies that do not meet
listing requirements of major exchanges. Transactions are conducted by telephone
and computer network rather than on the floor of an exchange.
You should read this entire prospectus, including "Other Investment Techniques,"
which concisely describes the other investment strategies and their risks used
by the fund.
4 The Funds
<PAGE>
Small-Cap Value Series Symbols: Class A -LRSCX
Class B -LRSBX
Class C -LSRCX
PAST PERFORMANCE
The information below provides some indication of the risks of investing in
the fund, by showing changes in the fund's class A shares' performance from
calendar year to calendar year and by showing how the fund's average annual
returns compare with those of a broad measure of market performance.
[GRAPHIC OMITTED]
Best Quarter: 19.61%
Worst Quarter: -24.20%
The table below shows a comparison of the fund's class A average annual total
returns to that of the Russell 2000(R) Index. Fund returns assume reinvestment
of dividends and distributions and payment of the maximum applicable front-end
or deferred sales charge. All periods end on December 31, 1998.
Class 1 Year Since Inception (i) Russell 2000(R)Index (ii)
A (12.70)% 15.74% 11.58% (iii)
- --------------------------------------------------------------------------------
B (12.66)% 11.95% 12.30% (iv)
- --------------------------------------------------------------------------------
C (8.92)% 10.71% 12.53% (v)
- --------------------------------------------------------------------------------
Russell 2000(R)Index (ii) (2.55)% - -
- --------------------------------------------------------------------------------
Past performance is not a prediction of future results.
- -------------
(i) The date of inception for each class is: A -12/13/95; B -11/15/96; and C
-4/1/97.
(ii) Performance for the unmanaged Russell 2000 (R) Index does not reflect
transaction costs or management fees.
(iii) Represents total return for the period 12/31/95 -12/31/98, to correspond
with class A inception date.
(iv) Represents total return for the period 11/30/96 -12/31/98, to correspond
with class B inception date.
(v) Represents total return for the period 4/30/97 -12/31/98, to correspond
with class C inception date.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Fee table
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Class B Class C Class P
Shareholder Fees (Fees paid directly from your investment)
- ----------------------------------------------------------------------------------------
Maximum Sales Charge on Purchases
- ----------------------------------------------------------------------------------------
(as a % of offering price) 5.75% none none none Maximum Deferred Sales Charge
- ----------------------------------------------------------------------------------------
(See "Purchases") none 5.00% (3) 1.00% none Annual Fund Operating Expenses
- ----------------------------------------------------------------------------------------
(Expenses deducted from fund assets) (as a % of average net assets) (1)
- ----------------------------------------------------------------------------------------
Management Fees (See "Management") 0.75% 0.75% 0.75% 0.75%
- ----------------------------------------------------------------------------------------
Distribution and Service (12b-1) Fees (2) 0.36% 1.00% 1.00% 0.45%
- ----------------------------------------------------------------------------------------
Other Expenses 0.24% 0.24% 0.24% 0.24%
- ----------------------------------------------------------------------------------------
Total Operating Expenses 1.35% 1.99% 1.99% 1.44%
- ----------------------------------------------------------------------------------------
</TABLE>
Expense example
This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment at maximum sales charge, if any, 5% total return each year and no
changes in expenses. You pay the following expenses over the course of each
period shown if you sell your shares at the end of the period, although your
actual cost may be higher or lower. The expenses include any applicable
contingent deferred sales charges.
<TABLE>
<CAPTION>
Share class 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Class A shares $704 $978 $1,272 $2,108
- ----------------------------------------------------------------------------------------
Class B shares $702 $924 $1,272 $2,153
- ----------------------------------------------------------------------------------------
Class C shares $302 $624 $1,072 $2,319
- ----------------------------------------------------------------------------------------
Class P shares $146 $455 $ 787 $1,727
- ----------------------------------------------------------------------------------------
You would pay the following expenses on the same investment, assuming you kept
your shares.
Class A shares $704 $978 $1,272 $2,108
- ----------------------------------------------------------------------------------------
Class B shares $202 $624 $1,072 $2,153
- ----------------------------------------------------------------------------------------
Class C shares $202 $624 $1,072 $2,319
- ----------------------------------------------------------------------------------------
Class P shares $146 $455 $ 787 $1,727
- ----------------------------------------------------------------------------------------
</TABLE>
This example is for comparison and is not a representation of the fund's actual
expenses or returns, either past or present.
Management fees are payable to Lord Abbett for the fund's investment management.
12b-1 fees refer to fees incurred for activities that are primarily intended to
result in the sale of fund shares and service fees for shareholder account
service and maintenance.
Other expenses include fees paid for miscellaneous items such as transfer
agency, legal and share registration fees.
(1) The annual fund operating expenses have been restated from fiscal year
amounts to reflect current fees.
(2) Because 12b-1 distribution fees are paid out on an ongoing basis, over time
they will increase the cost of your investment and may cost you more than
paying other types of sales charges.
(3) Class B shares will convert to class A shares on the eighth anniversary of
your original purchase of class B shares.
The Funds 5
<PAGE>
Your Investment
PURCHASES
This prospectus offers four classes of shares for each fund: classes A,
B,C, and P (call 800-821-5129 to find out if class P shares are available
in your state). These different classes of shares represent investments in
the same portfolio of securities but are subject to different expenses. Our
shares are continuously offered. The offering price is based on the Net
Asset Value (" NAV") per share next determined after we receive your
purchase order submitted in proper form. A front-end sales charge is added
to the NAV, in the case of the class A shares. There is no front-end sales
charge, although there is a CDSC in the case of the class B and C shares,
as described below.
You should read this section carefully to determine which class of shares
represents the best investment option for your particular situation. 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.
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 or change minimum investment requirements. All purchase orders are
subject to our acceptance and are not binding until confirmed or accepted
in writing.
NAV per share for each class of fund shares is calculated each business day at
the close of regular trading on the New York Stock Exchange ("NYSE"). Each fund
is open on those business days when the NYSE is open. Purchases and sales of
fund shares are executed at the NAV next determined after the fund receives your
order. In calculating NAV, securities for which market quotations are available
are valued at those quotations. Securities for which such quotations are not
available are valued at fair value under procedures approved by the Board.
- ---------------------------------------
Front-End Sales Charges -Class A Shares
- ---------------------------------------
To Compute
As a % of As a % of Offering Price
Your Investment Offering Price Your Investment Divide 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 3.95% 4.11% .9605
- --------------------------------------------------------------------------------
$250,000 to $499,999 2.75% 2.83% .9725
- --------------------------------------------------------------------------------
$500,000 to $999,999 1.95% 1.99% .9805
- --------------------------------------------------------------------------------
$1,000,000 and over No Sales Charge 1.0000
- --------------------------------------------------------------------------------
Reducing Your Class A Front-End Sales Charges. Class A shares may be
purchased at a discount if you qualify under either of the following
conditions:
Rights of Accumulation -- A Purchaser can apply the value (at public
offering price) of the shares already owned to a new purchase of class
A shares of any Eligible Fund in order to reduce the sales charge.
Statement of Intention -- A Purchaser of class A shares can purchase
additional shares of any Eligible Fund over a 13-month period and
receive the same sales charge as if all shares were purchased at once.
Shares purchased through reinvestment of dividends or distributions
are not included. A statement of intention can be backdated 90 days.
Current holdings under rights of accumulation can be included in a
statement of intention.
For more information on eligibility for these privileges, read the
applicable sections in the attached application.
Share classes
Class A
normally offered with a frontend sales charge
Class B
no front-end sales charge, however, a contingent deferred sales charge is
applied to shares sold prior to the sixth anniversary of purchase
higher annual expenses than class A shares
automatically convert to class A shares after eight years
Class C
no front-end sales charge
higher annual expenses than class A shares
a contingent deferred sales charge is applied to shares sold prior to the
first anniversary of purchase
Class P
available to certain pension or retirement plans and pursuant to a Mutual
Fund Advisory Program
6 Your Investment
<PAGE>
Class A Share Purchases Without A Front-End Sales Charge. Class A shares
may be purchased without a front-end sales charge under any of the
following conditions:
purchases of $1 million or more +
purchases by Retirement Plans with at least 100 eligible employees +
purchases under a Special Retirement Wrap Program +
purchases made with dividends and distributions on class A shares of
another Eligible Fund
purchases representing repayment under the loan feature of the Lord
Abbettsponsored prototype 403(b) Plan for class A shares
purchases by employees of any consenting securities dealer having a
sales agreement with Lord Abbett Distributor
purchases under a Mutual Fund Advisory Program
purchases by trustees or custodians of any pension or profit sharing
plan, or payroll deduction IRA for the employees of any consenting
securities dealer having a sales agreement with Lord Abbett
Distributor.
See the Statement of Additional Information for a listing of other
categories of purchasers who qualify for class A share purchases without a
front-end sales charge.
+ These categories may be subject to a Contingent Deferred Sales Charge
(" CDSC").
Class A Share CDSC. If you buy class A shares under one of the starred (+)
categories listed above and you redeem any of them within 24 months after
the month in which you initially purchased them, the fund normally will
collect a CDSC of 1%.
The class A share CDSC generally will be waived for:
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)
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 declines the longer you own your shares, according to the
following schedule:
Contingent Deferred Sales Charges -Class B Shares
Anniversary (1) of Contingent Deferred Sales Charge
the day on which the on redemption (as % of amount
purchase 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 6th (2) None
- --------------------------------------------------------------------------------
(1) The anniversary is the same calendar day in each respective year after the
date of purchase. For example, the anniversaries for shares purchased on
May 1 will be May 1 of each succeeding year.
(2) Class B shares will automatically convert to class A shares on the eighth
anniversary of the purchase of class B shares.
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 at the time
they are 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.
To minimize the amount of any CDSC, the fund redeems shares in the following
order:
1. shares acquired by reinvestment of dividends and capital gains (always free
of a CDSC)
2. shares held for six years or more (class B) or two years or more after the
month of purchase (class A) or one year or more (class C)
3. shares held the longest before the sixth anniversary of their purchase
(class B) or before the second anniversary after the month of purchase
(class A) or before the first anniversary of their purchase (class C)
Retirement Plans include employersponsored retirement plans under the Internal
Revenue Code, excluding Individual Retirement Accounts.
Lord Abbett Distributor LLC ("Lord Abbett Distributor") acts as agent for the
funds to work with investment professionals that buy and/or sell shares of the
funds on behalf of their clients. Generally, Lord Abbett Distributor does not
sell fund shares directly to investors.
Benefit Payment Documentation.
(class A only)
under $50,000 -no documentation necessary
over $50,000 -reason for benefit payment must be received in writing. Use
the address indicated under "Opening Your Account."
Your Investment 7
<PAGE>
The class B share CDSC generally will be waived under any one of the
following conditions:
benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
contribution or distribution under Retirement Plans
Eligible Mandatory Distributions under 403(b) Plans and individual
retirement accounts
death of the shareholder (natural person)
redemptions of shares in connection with Div-Move and Systematic
Withdrawal Plans (up to 12% per year)
See "Systematic Withdrawal Plan" under "Services For Fund Investors --
Automatic Services" below 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 anniversary of the purchase of such shares.
Class P Shares. Class P shares have lower annual expenses than class B and
class C shares, no front-end sales charge, and no CDSC. Class P shares are
currently sold and redeemed at NAV (a) pursuant to a Mutual Fund Advisory
Program or (b) to the trustees of, or employer-sponsors with respect to,
pension or retirement plans with at least 100 eligible employees (such as a
plan under Section 401(a), 401(k) or 457(b) of the Internal Revenue Code)
which engage an investment professional providing, or participating in an
agreement to provide, certain recordkeeping, administrative and/or
sub-transfer agency services to the fund on behalf of the class P
shareholders.
OPENING YOUR ACCOUNT
MINIMUM INITIAL INVESTMENT
Regular account $1,000
Individual Retirement Accounts and
403(b) Plans under the Internal Revenue Code $250
Uniform Gifts to Minors Account $250
For Retirement Plans and Mutual Fund Advisory Programs, no minimum
investment is 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 you select at the address
stated below. You should carefully read the paragraph below entitled
"Proper Form" before placing your order to assure your order will be
accepted.
Name of Fund
P. O. Box 419100
Kansas City, MO 64141
Proper Form. An order submitted directly to the fund must contain: (1) a
completed application, and (2) payment by check. 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.
By Exchange. Telephone the fund at 800-821-5129 to request an exchange from
any eligible Lord Abbett-sponsored fund.
Important Information. You may be subject to a $50 penalty under the Internal
Revenue Code if you do not provide a correct taxpayer identification number
(Social Security Number for individuals) or make certain required
certifications. In addition, we may be required to withhold from your account
and pay to the U. S. Treasury 31% of any redemption proceeds and any dividend or
distribution from your account.
Small Accounts. Our Board may authorize closing any account in which there are
fewer than 25 shares if it is in a fund's best interest to do so.
8 Your Investment
<PAGE>
REDEMPTIONS
By Broker. Call your investment professional for directions on how to
redeem your shares.
By Telephone. To obtain the proceeds of a redemption of $50,000 or less
from your account, you or your representative can call the fund at
800-821-5129.
By Mail. Submit a written redemption request indicating the name(s) in
which the account is registered, the fund's name, the class of shares, your
account number, 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 the capacity must be guaranteed by an Eligible Guarantor.
Certain other legal documentation may be required. For more information
regarding proper documentation call 800-821-5129.
Normally a check will be mailed to the name and address in which the
account is registered (or otherwise according to your instruction) within
three business days after receipt of your redemption request. Your account
balance must be sufficient to cover the amount being redeemed or your
redemption order will not be processed. Redemption requests for shares
initially purchased by check will not be honored for up to 15 days, unless
we are assured that the check has cleared earlier.
To determine if a CDSC applies to a redemption, see "Class A Share CDSC,""
Class B Share CDSC" or "Class C Share CDSC."
Eligible Guarantor is 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.
DISTRIBUTIONS AND TAXES
Eachfund pays its shareholders dividends from its net investment income,
and distributes net capital gains that it has realized. Dividends from net
investment income are expected to be paid to shareholders of Large-Cap Fund
semi-annually and Small-Cap Value Fund annually. If a capital gains
distribution is declared, it is expected to be paid annually. Your
distributions will be reinvested in your fund unless you instruct the fund
to pay them to you in cash. There are no sales charges on reinvestments.
The tax status of any distribution is the same for all shareholders
regardless of how long they have been in the fund or whether distributions
are reinvested or paid in cash. In general, distributions are taxable as
follows:
- --------------------------------------------------------------------------------
Federal Taxability Of Distributions
Type of Tax rate for Tax rate for
distribution 15% bracket 28% bracket and above
- --------------------------------------------------------------------------------
Income Ordinary Income Ordinary Income
dividends Rate Rate
- --------------------------------------------------------------------------------
Short-term Ordinary Income Ordinary Income
capital gains Rate Rate
- --------------------------------------------------------------------------------
Long-term
capital gains 10% 20%
- --------------------------------------------------------------------------------
Except in tax-advantaged accounts, any sale or exchange of fund shares may
be a taxable event.
Annual Information - Information concerning the tax treatment of dividends
and other distributions will be mailed to shareholders each year. Each fund
will also provide annually to its shareholders information regarding the
source of dividends and distribu-
- -------------------
Taxes on Transactions. The chart at left also can provide a "rule of thumb"
guide for your potential U. S. federal income tax liability when selling or
exchanging fund shares. The second row, "Short-term capital gains," applies to
fund shares sold within 12 months of purchase. The third row, "Long-term capital
gains," applies to shares held for more than 12 months.
Starting January 1, 2001, sales of securities held for more than five years will
be taxed at special lower rates.
Your Investment 9
<PAGE>
tions of capital gains by that fund. Because everyone's tax situation is
unique, you should consult your tax adviser regarding the treatment of
those distributions under the federal, state and local tax rules that apply
to you as well as the tax consequences of gains or losses from the
redemption or exchange of your shares.
SERVICES FOR FUND INVESTORS
AUTOMATIC SERVICES
Buying or selling shares automatically is easy with the services described
below. With each service, you select a schedule and amount, subject to
certain restrictions. You can set up most of these services when filling
out your application or by calling 800-821-5129.
- --------------------------------------------------------------------------------
For investing
Invest-A-Matic You can make fixed, periodic investments ($ 50 minimum) into your
fund (Dollar-cost account by means of automatic money transfers from your bank
checking averaging) account. See the attached application for instructions.
Div-Move You can automatically reinvest the dividends and
distributions from your account into another account in any
Eligible Fund ($ 50 minimum).
For selling shares
Systematic You can make regular withdrawals from most Lord Abbett
Withdrawal funds. Automatic cash withdrawals can be paid to you from
Plan (" SWP") your account in fixed or variable amounts. To establish a
plan, the value of your shares must be at least
$10,000, except for Retirement Plans for which there is no
minimum. Your shares must be in non-certificate form.
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 SWP request. 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.
Class B and Redemption proceeds due to a SWP for class B and class C
C shares shares will be redeemed in the order described under "CDSC"
under "Purchases."
- --------------------------------------------------------------------------------
OTHER SERVICES
Lord Abbett offers a variety of Retirement Plans. Call 800-253-7299 for
information about:
Traditional, Rollover, Roth and Education IRAs
Simple IRAs, SEP-IRAs, 401(k) and 403(b) accounts
Defined Contribution Plans
Telephone Investing . After we have received the attached application
(selecting "yes" under Section 7C and completing Section 7), you can
instruct us 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 when it receives the money from your bank.
Exchanges. You or your investment professional can instruct your fund to
exchange shares of any class for shares of the same class of any Eligible
Fund. Instruction may be provided in writing or by telephone, with proper
identification, by calling 800-821-5129. The fund must receive instructions
for the exchange before the close of the NYSE on the day of your call. If
you meet this requirement, you will get the NAV per share of the Eligible
Fund determined on that day. Exchanges will be treated as a sale for
federal tax purposes. Be sure to read the current prospectus for any fund
into which you are exchanging.
Reinvestment Privilege. If you sell shares of the fund, you have a 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.
Telephone Transactions. You have this privilege unless you refuse it in writing.
For your security, telephone transaction requests 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 funds will not be liable for following instructions
communicated by telephone that they reasonably believe to be genuine.
Transactions by telephone may be difficult to implement in times of drastic
economic or market change.
Exchange Limitations. Exchanges should not be used to try to take advantage of
short-term swings in the market. Frequent exchanges create higher expenses for
the funds. Accordingly, the funds reserve the right to limit or terminate this
privilege for any shareholder making frequent exchanges or abusing the
privilege. The funds also may revoke the privilege for all shareholders upon 60
days' written notice.
10 Your Investment
<PAGE>
Account Statements. Every Lord Abbett investor automatically receives
quarterly account statements.
Householding. Shareholders with the same last name and address will receive
a single copy of a prospectus and an annual or semi-annual report, unless
additional reports are specifically requested in writing to the fund.
Account Changes. For any changes you need to make to your account, consult
your investment professional or call the fund at 800-821-5129.
Systematic Exchange. You or your investment professional can establish a
schedule of exchanges between the same classes of any Eligible Fund.
SALES CHARGES AND SERVICE FEES
Sales and Service Compensation. As part of its plan for distributing
shares, each fund and Lord Abbett Distributor pay sales and service
compensation to Authori zed Institutions that sell the fund's shares and
service its shareholder accounts.
Sales compensation originates from two sources: sales charges and 12b-1
distribution fees that are paid out of each fund's assets. Service
compensation originates from 12b-1 service fees. The 12b-1 fee rates vary
by share class, according to the Rule 12b-1 plan adopted by each fund. The
sales charges and 12b-1 fees paid by investors are shown in the
class-by-class information under "Expenses" and "Purchases." The portion of
these expenses that is paid as sales and service compensation to Authorized
Institutions, such as your dealer, is shown in the chart at the end of this
prospectus. The portion of such sales and service compensation paid to Lord
Abbett Distributor is discussed under "Sales Activities" and "Service
Activities." Sometimes we do not pay sales and service compensation where
tracking data is not available for certain accounts or where the Authori
zed Institution waives part of the compensation.
We may pay Additional Concessions to Authorized Institutions from time to
time.
Sales Activities. We may use 12b-1 distribution fees to pay Authorized
Institutions to finance any activity which is primarily intended to result
in the sale of shares. Lord Abbett Distributor uses its portion of the
distribution fees attributable to a fund's class A and class C shares for
activities which are primarily intended to result in the sale of such class
A and class C shares, respectively. These activities include, but are not
limited to, printing of prospectuses and statements of additional
information and reports for those other than existing shareholders,
preparation and distribution of advertising and sales material, expenses of
organizing and conducting sales seminars, Additional Concessions to
Authorized Institutions, the cost necessary to provide distribution-related
services or personnel, travel, office expenses, equipment and other
allocable overhead.
Service Activities. We may pay Rule 12b-1 service fees to Authorized
Institutions for any activity which is primarily intended to result in
personal service and/or the maintenance of shareholder accounts. Any
portion of the service fees paid to Lord Abbett Distributor will be used to
service and maintain shareholder accounts.
12b-1 fees are payable regardless of expenses. The amounts payable by a fund
need not be directly related to expenses. If Lord Abbett Distributor's actual
expenses exceed the fee payable to it, a fund will not have to pay more than
that fee. If Lord Abbett Distributor's expenses are less than the fee it
receives, Lord Abbett Distributor will keep the full amount of the fee.
Your Investment 11
<PAGE>
MANAGEMENT
The funds' investment adviser is Lord, Abbett & Co., 767 Fifth Avenue, New
York, NY 10153-0203. Founded in 1929, Lord Abbett manages one of the
nation's oldest mutual fund complexes, with approximately $28 billion in
more than 35 mutual fund portfolios and other advisory accounts. For more
information about the services Lord Abbett provides to the funds, see the
Statement of Additional Information.
Each fund pays Lord Abbett a monthly fee based on average daily net assets
for each month. For the fiscal year ended November 30, 1998, the fee paid
to Lord Abbett was at an annual rate of 0.75 of 1% for both Large-Cap Fund
and Small-Cap Value Fund.
Lord Abbett uses a team of portfolio managers and analysts acting together
to manage each fund's investments.
Large-Cap Fund. Eli M. Salzman heads the fund's team, the other senior
members of which are W. Thomas Hudson, Jr., Partner of Lord Abbett, and
Robert B. Morris, Partner of Lord Abbett. Mr. Salzman joined Lord Abbett in
1997; before that he was a Vice President with Mutual of America Capital
Corp. from 1996 to 1997, and a Vice President at Mitchell Hutchins Asset
Management, Inc. from 1986 to 1996. Mr. Hudson and Mr. Morris have both
been with Lord Abbett for more than five years.
Small-Cap Value Fund. Robert P. Fetch, Partner of Lord Abbett, heads the
fund's team, the other senior member of which is Gregory M. Macosko. Mr.
Fetch joined Lord Abbett in 1995; before that, he was was a Managing
Director of Prudential Investment Advisors from 1983 to 1995. Mr. Macosko
joined Lord Abbett in 1996; before that he was an Equity Analyst with Quest
Advisory Service from 1991 to 1996.
12 Your Investment
<PAGE>
For More Information
OTHER INVESTMENT TECHNIQUES
This section describes some of the investment techniques that might be used
by the funds, and their risks.
Adjusting Investment Exposure. Each fund may, but is not required to, use
various strategies to change its investment exposure to adjust to changing
security prices, interest rates, currency exchange rates, commodity prices
and other factors. Each fund may use these transactions to change the risk
and return characteristics of each fund's portfolio. If we judge market
conditions incorrectly or use a strategy that does not correlate well with
a fund's investments, it could result in a loss, even if we intended to
lessen risk or enhance returns. These transactions may involve a small
investment of cash compared to the magnitude of the risk assumed and could
produce disproportionate gains or losses. Also, these strategies could
result in losses if the counterparty to a transaction does not perform as
promised.
Borrowing. Each fund may borrow from banks. If a fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. Each fund may borrow only for temporary or emergency purposes,
and not in an amount exceeding 33 1 /3 % of its total assets.
Closed-End Investment Companies. Each fund may invest in shares of
closed-end investment companies if it pays a fee or commission no greater
than the customary broker's commission. Shares of investment companies
sometimes trade at a discount or premium to their net asset value. Also,
there may be duplication of fees if a fund and the closed-end investment
company both charge a management fee. No more than 5% of each fund's gross
assets may be invested in Closed-End Investment Companies.
Debt Securities. The Small-Cap Value Fund may invest in bonds or other debt
securities. However, not more than 5% of its assets will be invested in
high yield debt securities. High-yield debt securities or "junk bonds" are
rated BB/Ba or lower and typically pay a higher yield than investment grade
debt securities. These bonds have a higher risk of default than investment
grade bonds, and their prices can be much more volatile.
Diversification. Each fund is a diversified fund, which means that with
respect to 75% of its total assets, it will not purchase a security if, as
a result, more than 5% of the fund's total assets would be invested in
securities of a single issuer or the fund would hold more than 10% of the
outstanding voting securities of the issuer. U. S. government securities
are not subject to these requirements.
Financial Futures Transactions. The Large-Cap Fund may enter into financial
futures transactions. A financial futures transaction is the purchase or
sale of an exchange-traded contract to buy or sell a standard quality and
quantity of a financial instrument or index at a specific future date and
price. The price behavior of the futures contract may not correlate with
that of the item being hedged. 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 its total assets.
Foreign Currency Hedging Techniques. The Small-Cap Value Fund may use
Foreign Currency Hedging Techniques. Although it does not normally engage
in extensive currency hedging, it may use forward foreign currency
contracts and options thereon to hedge the risk to the portfolio if it
expects that foreign exchange price movements will
For More Information 13
<PAGE>
be unfavorable for U. S. investors. Generally, these instruments allow a
fund to lock in a specified exchange rate for a period of time. If the
fund's forecast proves to be wrong, such a hedge may cause a loss. Also, it
may be difficult or impractical to hedge currency risk in many emerging
countries. Under some circumstances, a fund may commit a substantial
portion of its portfolio to the completion of forward contracts. Although
such contracts will be used primarily to protect the fund from adverse
currency movements, their use involves the risk that Lord Abbett will not
accurately predict currency movement, and the fund's return could be
reduced.
Certain of the fund's investments may be denominated in foreign currency.
The fund uses currency transactions in an attempt to eliminate currency
risk associated with foreign investments.
The Small-Cap Value Fund may also purchase foreign currency put and call
options, subject to certain limitations.
There is the possibility that the foreign currency hedging techniques will
not work as anticipated.
Foreign Securities. The Large-Cap Fund may invest up to 10% and the
Small-Cap Value Fund may invest up to 35% of total assets in foreign
securities. These securities are not subject to the same degree of
regulation and may be more volatile and less liquid than securities traded
in major U. S. markets. Foreign portfolio securities may trade on days when
a fund does not value them. Fund share prices could be affected on days an
investor cannot purchase or sell shares. Other risks include less
information on public companies, banks, and governments; political and
social instability; expropriations; higher transaction costs; currency
fluctuations; non-deductible withholding taxes and different accounting and
settlement practices.
Illiquid Securities. Each fund may invest in illiquid securities. These
securities include those that are not traded on the open market or that
trade irregularly or in very low volume. They may be difficult or
impossible to sell at the time and price the fund would like. Each fund may
invest up to 15% of its assets in illiquid securities.
Options Transactions. The Small-Cap Value Fund and Large-Cap Fund may only
sell (write) covered call options. This means that the funds may only sell
the call options on securities which the funds own. The Small-Cap Value
Fund may purchase and write put and call options on equity securities or
stock indices that are traded on national securities exchanges. A put
option on securities gives the buyer, in return for a premium, the right,
for a specified period of time, to sell the securities subject to the
option to the writer (seller) 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. The writer of a put option
might be obligated to purchase underlying securities for more than their
current market value.
A call option on securities gives the buyer, in return for a premium paid,
the right for a specified period of time to buy 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 buyer upon receipt of the
exercise price
When a 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.
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
14 For More Information
<PAGE>
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.
The Small-Cap Value Fund may write only 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.
Portfolio Securities Lending. Each fund may lend securities to
broker-dealers and financial institutions, as a means of earning income.
This practice could result in a loss or delay in recovering a fund's
securities, if the borrower defaults. Each fund will limit its securities
loans to 5% of its total assets and all loans will be fully collateralized.
Repurchase Agreements. The Small-Cap Value Fund may enter into repurchase
agreements. In a repurchase agreement, a fund buys a security at one price
from a broker-dealer or financial institution and simultaneously agrees to
sell the same security back to the same party at a higher price in the
future. If the other party to the agreement defaults or becomes insolvent,
a fund could lose money.
Rights and Warrants. Each fund may invest up to 5% of its assets in rights
and warrants to purchase securities. Rights represent a privilege offered
to holders of record of issued securities (usually on a pro-rata basis) for
additional securities of the same class, or of a different class, or of a
different issuer, as the case may be. Warrants represent the privilege to
purchase securities at a stipulated price and are usually valid for several
years. Rights and warrants generally do not entitle a holder to dividends
or voting rights with respect to the underlying securities, nor do they
represent any rights in the assets of the issuing company.
The value of a right or warrant may not necessarily change with the value
of the underlying securities and rights and warrants cease to have value
after their expiration date.
Rule 144A Securities. Both funds may invest in Rule 144A securities, which
are securities determined by the Board 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. A substantial part of the
lower-rated debt market consists of Rule 144A securities, many of which are
registered within a few months of their purchases. Investments in Rule 144A
securities initially determined to be liquid could have the effect of
diminishing the level of a fund's liquidity during periods of decreased
market interest in such securities.
Stock Index Futures. The Small-Cap Value Fund may invest in stock index
futures. A stock index futures contract is an agreement in which one party
agrees to deliver to another anamount of cash equal to a specific dollar
amount times the difference between a specific stock index at the close of
the last trading day of the contract and the price at which the agreement
is made. No physical delivery of the underlying stocks in the index is
made.
Participation in the options or futures markets involves investment risks
and transaction costs to which the Small-Cap Value Fund would not be
subject absent the use of these strategies. If the Small-Cap Value 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 and stock index futures include: (1) dependence on
management's ability to
For More Information 15
<PAGE>
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 index futures 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; (5) the possible need to
defer closing out certain hedged positions to avoid adverse tax
consequences; and (6) daily limits on price variance for a futures contract
or related options imposed by certain futures exchanges and boards of trade
may restrict transactions in such securities on a particular day.
The Small-Cap Value Fund may not purchase or sell stock index futures if,
immediately after a purchase or sale, more than one-third of its net assets
would be hedged. In addition, except in the case of a call written and held
on the same index, the Small-Cap Value Fund will write call options on
indices or sell stock index futures only if the amount resulting from the
multiplication of the then current level of the index (or indices) upon
which the options or futures contract(s) is based, the applicable
multiplier(s), and the number of futures or options contracts which would
be outstanding would not exceed one-third of the value of the Small-Cap
Value Fund's net assets.
The Small-Cap Value Fund's ability to enter into stock index futures and
listed options is limited by certain tax requirements in order to qualify
as a regulated investment company.
Short Sales. The Small-Cap Value Fund may make short sales of securities or
maintain a short position, provided that at all times when a short position
is open the fund owns an equal amount of such securities or securities
convertible into or exchangeable, without payment of any further
consideration, for an equal amount of the securities of the same issuer as
the securities sold short. The Small-Cap Value Fund does not intend to have
more than 5% of its net assets (determined at the time of the short sale)
subject to short sales against the box.
When-Issued or Delayed Delivery Securities. The Small-Cap Value Fund may
purchase or sell securities with payment and delivery taking place as much
as a month or more later. The fund would do this in an effort to buy or
sell the securities at an advantageous price and yield. The securities
involved 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, their market value may be less than the
purchase price. Also, if the fund commits a significant amount of assets to
when-issued or delayed delivery transactions, it may increase the
volatility of its net asset value.
GLOSSARY OF SHADED TERMS
Additional Concessions. 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. Additional payments
may be paid from Lord Abbett Distributor's own resources or from
distribution fees received from a fund 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.
16 For More Information
<PAGE>
In selecting dealers to execute portfolio transactions for a 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." Lord Abbett Distributor is an Authorized
Institution.
Eligible Fund. An Eligible Fund is any Lord Abbett-sponsored fund except
for: (1) certain tax-free, single-state funds where the exchanging
shareholder is a resident of a state in which such fund is not offered for
sale; (2) Lord Abbett Equity Fund; (3) Lord Abbett Series Fund; and (4)
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). An Eligible Fund also is
any Authori zed Institution's affiliated money market fund satisfying Lord
Abbett Distributor as to certain omnibus account and other criteria.
Eligible Mandatory Distributions. If class B shares represent a part of an
individual's total IRA or 403(b) investment, the CDSC will be waived only
for that part of a mandatory distribution which bears the same relation to
the entire mandatory distribution as the class B share investment bears to
the total investment.
Legal Capacity. This term refers to the authority of an individual to act
on behalf of an entity or other person(s). For example, if a redemption
request were to be made 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. That signature using that capacity
must be guaranteed by an Eligible Guarantor.
To give another example, if a redemption request were to be made on behalf
of the ABC Corporation by a person (Mary B. Doe) who has the legal capacity
to act on the behalf of the Corporation, because she is the president of
the Corporation, the request must be executed as follows: ABC Corporation
by Mary B. Doe, President. That signature using that capacity must be
guaranteed by an Eligible Guarantor (see example in right column).
Mutual Fund Advisory Program. This includes certain unaffiliated authorized
brokers, dealers, registered investment advisers or other financial
institutions who either (a) have an arrangement with Lord Abbett
Distributor in accordance with certain standards approved by Lord Abbett
Distributor, providing specifically for the use of fund 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, or (b) charge an advisory consulting or other fee for their
services and buy shares for their own accounts or the accounts of their
clients.
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.
GUARANTEED SIGNATURE. An acceptable form of guarantee would be as follows:
In the case of the estate --
Robert A. Doe
Executor of the Estate of
John W. Doe
[Date]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
[SIGNATURE ILLEGIBLE]
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'sm'
SR
In the case of the corporation --
ABC Corporation
Mary B. Doe
By Mary B. Doe, President
[Date]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
[SIGNATURE ILLEGIBLE]
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'sm'
SR
For More Information 17
<PAGE>
Special Retirement Wrap Program. This is a program sponsored by an Authori
zed Institution showing one or more characteristics distinguishing it, in
the opinion of Lord Abbett Distributor, from a Mutual Fund Advisory
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 the class A 12b-1 Plan and the fact that the program relates to
participantdirected Retirement Plans.
RECENT PERFORMANCE
Large-Cap Fund. The fund's strong absolute returns for the fiscal year
ended November 30, 1998 were due, in part, to our decision to maintain an
overweighting of financial company holdings. After a weak start, these
holdings benefited from attractive valuations relative to their expected
earnings and from ongoing industry consolidations.
Favorable earnings developments and merger activity among pharmaceutical
and health care holdings also enhanced the portfolio's performance, as did
our particular stock selections in the energy sector. Interim price
weakness among technology companies created the opportunity to add
technology stocks to the portfolio, as we anticipated that this industry
would continue to perform well into 1998. The announcement of the
ExxonMobil merger had a positive impact on the fund's performance,
although, overall, companies in the electric utilities and energy sectors
did not perform well during the period.
We believe that the anticipated environment of continued low inflation,
modest economic growth and benign interest rates, combined with S& P 500(R)
Index's flat projected earnings growth in 1999, will favor the fund's
research-driven value investment strategy in the years ahead.
Small-Cap Value Fund. In a year of challenge for small-cap stocks, our
management team focused on various industry sectors. For example, our
overweighting of companies in the technology and consumer non-cyclical
industries, such as apparel and general retailers, which moved ahead of the
broad market early in the year and then again during the fourth quarter,
added significant value to the portfolio. On the other hand, we reduced our
exposure to industrial companies late in the year when they continued to
struggle despite improved market conditions.
We believe the stage is set for a small-cap rebound now that these
companies are selling at historically low prices relative to larger
companies and that our value approach will enable us to continue to provide
attractive long-term returns relative to our peers.
Year 2000 Issues. Each fund could be adversely affected if the computers used by
each fund and their service providers do not properly process and calculate
date-related information from and after January 1, 2000.
Lord Abbett is working to avoid such problems and has received assurances from
each fund's service providers that they are taking similar steps. Of course, the
Year 2000 problem is unprecedented and, therefore, Lord Abbett cannot eliminate
altogether the possibility that it or the fund will be affected.
18 For More Information
<PAGE>
Large-Cap Series
FINANCIAL HIGHLIGHTS
This table describes the fund's performance for the fiscal periods indicated."
Total return" shows how much your investment in the fund would have increased
(or decreased) during each period, assuming you had reinvested all dividends and
distributions. These Financial Highlights have been audited by Deloitte & Touche
LLP, the fund's independent auditors, in conjunction with their annual audit of
the fund's financial statements. Financial statements for the fiscal year ended
November 30, 1998 and the Independent Auditors' Report thereon appear in the
Annual Report to Shareholders for the fiscal year ended November 30, 1998 and
are incorporated by reference into the Statement of Additional Information,
which is available upon request. Certain information reflects financial results
for a single fund share.
<TABLE>
<CAPTION>
Class A Shares
--------------
Year Ended November 30,
Per Share Operating Performance: 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $20.08 $17.86 $15.54 $12.79 $12.33
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.15 (a) .08 (a) .270 .42 .34
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
- ------------------------------------------------------------------------------------------------------------------------------------
gain on investments 2.45 3.21 3.505 3.44 .65
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.60 3.29 3.775 3.86 .99
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (.06) (.12) (.57) (.29) (.20)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain (.71) (.95) (.885) (.82) (.33)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $21.91 $20.08 $17.86 $15.54 $12.79
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (b) 13.45% 19.87% 26.25% 32.82% 8.21%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses, including waiver and reimbursements 1.24% 1.52% 0.36% 0.00% 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses, excluding waiver and reimbursements 1.24% 1.52% 0.96% 1.02% 1.15%
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.74% 0.42% 2.24% 3.27% 2.65%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class B Shares Class C Shares
-------------- --------------
Period Ended November 30, Period Ended November 30,
Per Share Operating Performance: 1998 1997 1996 (c) 1998 1997 (c)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $20.00 $17.83 $15.24 $20.01 $16.90
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) -- (a)(e) (.06) (a) .12 (.01) (a) (0.07) (a)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
- ------------------------------------------------------------------------------------------------------------------------------------
gain on investments 2.42 3.20 2.66 2.44 3.18
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.42 3.14 2.78 2.43 3.11
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income -- (.02) (.19) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain (.71) (.95) -- (0.71) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $21.71 $20.00 $17.83 $21.73 $20.01
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (b) 12.56% 18.92% 18.39% (d) 12.61% 18.40% (d)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses 2.00% 2.28% 0.59% (d) 2.00% 1.54% (d)
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.01)% (0.34)% 0.22% (d) (. 04)% (0.37)% (d)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended November 30,
Supplemental Data For All Classes: 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net Assets, end of year (000) $143,153 $69,796 $23,592 $7,549 $5,558
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 99.14% 30.81% 62.25% 37.17% 43.85%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes
reinvestment of all distributions.
(c) Commencement of operations: August 1, 1996 (class B); and April 1, 1997
(class C).
(d) Not annualized.
(e) Amount less than $. 01.
See Notes to Financial Statements.
Financial Information 19
<PAGE>
Small-Cap Value
Series`
LINE GRAPH COMPARISON
Immediately below is a comparison of a $10,000 investment in class A shares
to the same investment in the S& P 500(R) Index, assuming reinvestment of
all dividends and distributions.
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
Average Annual Total Return At Maximum Applicable
Sales Charge For The Periods Ending November 30, 1998
1 Year 5 Years Life
- --------------------------------------------------------------------------------
Class A (1) 6.90% 18.39% 17.85%
- --------------------------------------------------------------------------------
Class B (4) 6.94% - 20.24%
- --------------------------------------------------------------------------------
Class C (5) 11.48% - 18.84%
(1) This reflects the deduction of the maximum initial sales charge of 5.75%
(2) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 5.75% applicable to class
A shares, with all dividends and distributions reinvested for the periods
shown ending November 30, 1998, using the SEC-required uniform method to
compute such return.
(3) Performance for the unmanaged S& P 500 (R) Index does not reflect
transaction costs, management fees or sales charges. Performance for this
index begins on 6/30/92.
(4) The class B shares were first offered on 8/1/96. Performance reflects the
deduction of a CDSC of 5% (for 1 year) and 3% (life of class).
(5) The class C shares were first offered on 4/1/97. Performance reflects the
deduction of a CDSC of 1% (for 1 year) and 0% (life of class).
20 Financial Information
<PAGE>
Small-Cap Value Series
FINANCIAL HIGHLIGHTS
This table describes the fund's performance for the fiscal periods
indicated." Total return" shows how much your investment in the fund would
have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These Financial Highlights have
been audited by Deloitte & Touche LLP, the fund's independent auditors, in
conjunction with their annual audit of the fund's financial statements.
Financial statements for the fiscal year ended November 30, 1998 and the
Independent Auditors' Report thereon appear in the Annual Report to
Shareholders for the fiscal year ended November 30, 1998 and are
incorporated by reference into the Statement of Additional Information,
which is available upon request. Certain information reflects financial
results for a single fund share.
<TABLE>
<CAPTION>
Class A Shares Class B Shares
----------------------------------- ------------------------------------
Period Ended November 30, Period Ended November 30,
Per Share Operating Performance: 1998 1997 1996 (a) 1998 1997 1996 (b)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $16.56 $12.01 $10.00 $16.44 $12.00 $11.67
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.06) (c) .02 (c) .127 (.17) (c) (.09) (c) .001
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
- ------------------------------------------------------------------------------------------------------------------------------------
gain (loss) on investments (1.85) 4.53 2.658 (1.82) 4.53 .329
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (1.91) 4.55 2.785 (1.99) 4.44 .33
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income -- -- (.075) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain (.29) -- (.700) (.25) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.36 $16.56 $12.01 $14.20 $16.44 $12.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (d) (11.71)% 37.89% 28.24% (e) (12.27)% 37.00% 2.84% (e)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses, including waiver and reimbursements 1.28% 1.17% 0.01% (e) 2.00% 1.86% 0.04% (e)
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses, excluding waiver and reimbursements 1.28% 1.17% 1.00% (e) 2.00% 1.86% 0.07% (e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.37)% 0.10% 1.02% (e) (1.09)% (0.56)% 0.01% (e)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class C Shares
--------------
Period Ended November 30,
Per Share Operating Performance: 1998 1997 (b)
<S> <C> <C>
Net asset value, beginning of period $16.44 $12.81
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment loss (.17) (c) (0.05) (c)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
- ------------------------------------------------------------------------------------------------------------------------------------
gain (loss) on investments (1.82) 3.68
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (1.99) 3.63
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gain (.25) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.20 $16.44
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (d) (12.27)% 28.34% (e)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses 2.00% 1.25% (e)
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment loss (1.09)% (0.30)% (e)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Period Ended November 30,
Supplemental Data For All Classes: 1998 1997 1996 (a)
<S> <C> <C> <C>
Net Assets, end of period (000) $515,379 $435,776 $8,772
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 67.86% 45.24% 110.09%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) From commencement of operations: December 13, 1995 (class A).
(b) Commencement of offering respective class shares: November 15, 1996
(class B), April 1, 1997 (class C).
(c) Calculated using average shares outstanding during the period.
(d) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(e) Not annualized.
Financial Information 21
<PAGE>
Small-Cap Value Series
LINE GRAPH COMPARISON
Immediately below is a comparison of a $10,000 investment in class A shares
to the same investment in Russell 2000(R) Index, assuming reinvestment of
all dividends and distributions.
[GRAPHIC OMITTED]
Average Annual Total Return At Maximum Applicable
Sales Charge For The Periods Ending November 30, 1998
1 Year Life
- --------------------------------------------------------------------------------
Class A (1) (16.80)% 13.89%
- --------------------------------------------------------------------------------
Class B (4) (16.66)% 9.28%
- --------------------------------------------------------------------------------
Class C (5) (13.15)% 7.37%
- --------------------------------------------------------------------------------
(1) This reflects the deduction of the maximum initial sales charge of 5.75%
(2) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 5.75% applicable to class
A shares, with all dividends and distributions reinvested for the periods
shown ending November 30, 1998, using the SEC-required uniform method to
compute such return.
(3) Performance for the unmanaged Russell 2000 (R) Index does not reflect
transaction costs, management fees or sales charges. Performance of this
index begins on 12/31/95.
(4) The class B shares were first offered on 11/15/96. Performance reflects the
deduction of a CDSC of 5% (for 1 year) and 3% (life of the class).
(5) The class C shares were first offered on 4/1/97. Performance reflects the
deduction of a CDSC of 1% (for 1 year) and 0% (life of class).
22 Financial Information
<PAGE>
COMPENSATION FOR YOUR DEALER
<TABLE>
<CAPTION>
FIRST YEAR COMPENSATION
Front-end
sales charge Dealer's
paid by investors Concession Service fee (1) Total compensation (2)
Class A investments (% 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 3.95% 3.25% 0.25% 3.49%
- ------------------------------------------------------------------------------------------------------------------------------------
$250,000 -$499,999 2.75% 2.25% 0.25% 2.49%
- ------------------------------------------------------------------------------------------------------------------------------------
$500,000 -$999,999 1.95% 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%
- ------------------------------------------------------------------------------------------------------------------------------------
Class P investments Percentage of average net assets
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<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%
- ------------------------------------------------------------------------------------------------------------------------------------
Class P investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The service fee for class A and P shares is paid quarterly. The first
year's service fee on class B and C shares is paid at the time of sale.
(2) Dealer's 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, such as your dealer, 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, C and P shares, 0.25%, 1.00% and 0.45%,
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, such as your dealer. These fees are paid quarterly in
arrears.
Financial Information 23
<PAGE>
More information on these funds is available free upon request, including
the following:
ANNUAL/SEMI-ANNUAL REPORT
Describes the funds, lists portfolio holdings and contains a letter from
the funds' manager discussing recent market conditions and the funds'
investment strategies.
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
Provides more details about the funds and their policies. A current SAI is
on file with the Securities and Exchange Commission ("SEC") and is
incorporated by reference (is legally considered part of this
prospectus).
To obtain information:
By telephone. Call the funds at:
888-222-2388
By mail. Write to the funds at:
The Lord Abbett Family of Funds
767 Fifth Avenue
New York, NY 10153-0203
Via the Internet.
Lord, Abbett & Co.
http://www.lordabbett.com
Text only versions of fund documents can be viewed online or downloaded from:
SEC
http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 800-SEC-0330) or by sending your request and a duplicating
fee to the SEC's Public Reference Section, Washington, DC 20549-6009.
Lord Abbett Research Fund
Large-Cap Series
Small-Cap Value Series
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
- -----------------------
SEC file number: 811-6650
LARF-1-499
(4/99)
