<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-b(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
LORD ABBETT TAX-FREE INCOME FUND, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
LORD ABBETT TAX-FREE INCOME FUND, INC.
INVESTMENT MANAGEMENT
THE GM BUILDING 767 FIFTH AVENUE NEW YORK NEW YORK 10153
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
the Lord Abbett Tax-Free Income Fund, Inc. scheduled to be held on June 19,
1996, at 11:00 a.m., at the General Motors Building, 767 Fifth Avenue, New York,
New York. Your Board of Directors looks forward to greeting those shareholders
who are able to attend.
At the meeting, in addition to the election of directors and approval of
the appointment of auditors, you will be asked to vote on a proposed revision of
your Series' investment objective, a proposed revision of your Series'
fundamental investment policies and restrictions, a new 12b-1 Plan and
Distribution Agreement for your Series and an amendment to the Fund's Articles
of Incorporation.
Such proposals, if approved, are intended to provide for greater
uniformity among the Lord Abbett-sponsored funds and greater flexibility in the
future management of the Fund's portfolio, as well as to maintain the
competitive position of the Fund.
All proposals are fully described in the enclosed proxy statement. I
encourage you to review the proxy statement for all the details regarding the
meeting agenda.
Your Board of Directors believes these proposals are in the best interest
of the Fund and its shareholders and unanimously recommends a vote "for" all
proposals. Regardless of the number of shares you own, it is important that they
be represented and voted. Accordingly, please sign, date and mail the enclosed
proxy card in the postage paid return envelope.
Your prompt response will help save the Fund the expense of additional
solicitation.
Sincerely,
/s/ Ronald P. Lynch
Ronald P. Lynch
Chairman of the Board
April 17, 1996
<PAGE>
LORD ABBETT TAX-FREE INCOME FUND, INC.
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
JUNE 19, 1996
PROXY STATEMENT
YOU ARE URGED TO SIGN AND MAIL THE PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE WHETHER YOU OWN A FEW OR MANY
SHARES. YOUR PROMPT RETURN OF THE PROXY MAY SAVE
THE FUND THE NECESSITY AND EXPENSE OF FURTHER
SOLICITATIONS TO INSURE A QUORUM
AT THIS MEETING.
<PAGE>
LORD ABBETT TAX-FREE INCOME FUND, INC.
767 Fifth Avenue
New York, New York 10153
Notice of Annual Meeting of Shareholders
To Be Held June 19, 1996 April 17, 1996
Notice is given hereby of an annual meeting of the shareholders of Lord Abbett
Tax-Free Income Fund, Inc. (the "Fund"). The meeting will be held at the
offices of Lord, Abbett & Co., on the 11th floor of The General Motors Building,
767 Fifth Avenue, New York, New York, on Wednesday, June 19, 1996, at 11:00
a.m., for the following purposes and to transact such other business as may
properly come before the meeting and any adjournments thereof.
<TABLE>
<C> <S>
ITEM 1. To elect directors;
ITEM 2. To ratify or reject the selection of Deloitte & Touche LLP as
independent public accountants of the Fund for the current
fiscal year;
ITEM 3. To approve or disapprove a change in the investment objective of
each of the National, Connecticut, Hawaii, Minnesota, Missouri,
New Jersey, New York, Texas and Washington series of the Fund
(each, a "Series", and collectively the "Series");
ITEM 4. To approve or disapprove certain changes in each Series'
fundamental investment policies and restrictions;
ITEM 5. To approve or disapprove a new Distribution Plan and Agreement
for the existing class of shares of each Series pursuant to Rule
12b-1 under the Investment Company Act of 1940; and
ITEM 6. To approve or disapprove an amendment to the Fund's Articles of
Incorporation (i) authorizing the Board of Directors to create
-
classes within series of shares of capital stock; and (ii)
--
confirming that the board may impose contingent deferred sales
charges in connection with new classes of shares to be created
(this change will have no effect on your shares).
</TABLE>
By order of the Board of Directors
Kenneth B. Cutler
Vice President and Secretary
<PAGE>
The Board of Directors has fixed the close of business on March 22, 1996 as the
record date for determination of shareholders of the Fund entitled to notice of
and to vote at the meeting. Shareholders are entitled to one vote for each share
held. As of March 22, 1996, there were 58,351,086 shares of the National
Series, 11,629,555 shares of the Connecticut Series, 17,427,281 shares of the
Hawaii Series, 1,413,690 shares of the Minnesota Series, 26,316,185 shares of
the Missouri Series, 37,011,042 shares of the New Jersey Series, 30,021,285
shares of the New York Series, 9,761,227 shares of the Texas Series, 14,991,811
shares of the Washington Series, and 206,923,162 shares of the Fund issued and
outstanding.
- --------------------------------------------------------------------------------
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD.
SIGN, DATE AND RETURN IT IN THE ENVELOPE PROVIDED.
TO SAVE THE COST OF ADDITIONAL SOLICITATIONS, PLEASE MAIL YOUR PROXY PROMPTLY.
2
<PAGE>
LORD ABBETT TAX-FREE INCOME FUND, INC.
767 Fifth Avenue
New York, New York 10153
April 17, 1996
PROXY STATEMENT
---------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors of Lord Abbett Tax-Free
Income Fund, Inc., an open-end management investment company incorporated under
the laws of Maryland (the "Fund"), for use at an annual meeting of shareholders
of the Fund to be held at 11:00 a.m. on Wednesday, June 19, 1996 at the offices
of Lord, Abbett & Co., the investment manager and principal underwriter of the
Fund ("Lord Abbett"), on the 11th floor of the General Motors Building, 767
Fifth Avenue, New York, New York 10153, and at any adjournments thereof. This
proxy statement and the enclosed proxy card are first being mailed to
shareholders on or about April 17, 1996.
At the close of business on March 22, 1996 (the "Record Date"), there
were issued and outstanding 58,351,086 shares of the National Series, 11,629,555
shares of the Connecticut Series, 17,427,281 shares of the Hawaii Series,
1,413,690 shares of the Minnesota Series, 26,316,185 shares of the Missouri
Series, 37,011,042 shares of the New Jersey Series, 30,021,285 shares of the New
York Series, 9,761,227 shares of the Texas Series and 14,991,811 shares of the
Washington Series (each such Series a "Series", and collectively the "Series")
and 206,923,162 shares of the Fund. Only shareholders of record at the close of
business on the Record Date are entitled to notice of, and to vote at, the
annual meeting or any adjournment thereof. Proxies will be solicited by mail.
Additional solicitations may be made by telephone, facsimile or personal contact
by officers or employees of Lord Abbett and its affiliates. The Fund may also
request brokerage houses, custodians, nominees, and fiduciaries who are
shareholders of record to forward proxy materials to beneficial owners. D.F.
King & Co. has been retained to assist in the solicitation of proxies at an
estimated cost of $45,000. The cost of the solicitation will be borne by the
Fund.
Shareholders are entitled to one vote for each full share, and a pro
portionate vote for each fractional share, of the Fund held as of the Record
Date. Under Maryland law, shares owned by two or more persons (whether as joint
tenants, co-fiduciaries or otherwise) will be voted as follows, unless a written
instrument or court order providing to the contrary has been filed with the
Secretary of the Fund:
<PAGE>
(1) if only one votes, that vote binds all; (2) if more than one votes, the vote
- -
of the majority binds all; and (3) if more than one votes and the vote is evenly
-
divided, the vote will be cast proportionately. If the enclosed form of proxy is
properly executed and returned in time to be voted at the meeting, the proxies
named therein will vote the shares represented by the proxy in accordance with
the instructions marked thereon. Unmarked proxies will be voted FOR each of the
items described in this Proxy Statement and any other matters as deemed
appropriate. A proxy may be revoked by the signer at any time at or before the
meeting by written notice to the Fund, by execution of a later-dated proxy or by
voting in person at the meeting.
1. ELECTION OF DIRECTORS
The nominees for election as directors are Ronald P. Lynch, Robert S.
Dow, E. Wayne Nordberg, E. Thayer Bigelow, Stewart S. Dixon, John C. Jansing, C.
Alan MacDonald, Hansel B. Millican, Jr. and Thomas J. Neff, who have been
nominated by the Board of Directors to succeed themselves. The individuals
named as proxies intend to vote the proxies, unless otherwise directed, in favor
of the election of such nominees, each of whom has agreed to continue to serve
as a director of the Fund. Management of the Fund has no reason to believe that
any nominee will be unable to serve as a director. If any nominee should be
unable to serve as a director, it is the intention of the individuals named as
proxies to vote for the election of such person or persons as the Board of
Directors may, in its discretion, recommend.
Information about each person nominated for election as a director is set
forth in the following table. Except where indicated, each of the persons
listed in the table has held the principal occupation listed opposite his name
for the past five years.
<TABLE>
<CAPTION>
Director of
Names and Ages of Principal Occupation and Director- the Fund
Directors of the Fund ships Since
--------------------- ---------------------------------- -----------
<C> <S> <C>
Ronald P. Lynch/1,2/ Chairman of the Board of the Fund. 1983
60 Partner of Lord Abbett.
Robert S. Dow/1,2/ President of the Fund. 1989
51 Partner of Lord Abbett.
E. Wayne Nordberg/1,2/ Vice President of the Fund. Partner 1992
59 of Lord Abbett.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Director of
Names and Ages of Principal Occupation and Director- the Fund
Directors of the Fund ships Since
--------------------- ---------------------------------- -----------
<C> <S> <C>
E. Thayer Bigelow/2/ President and Chief Executive of 1994
54 Time Warner Cable Programming,
Inc. Formerly President and Chief
Operating Officer of Home Box
Office, Inc.
Stewart S. Dixon/2/ Partner in the law firm of Wildman, 1983
65 Harrold, Allen & Dixon.
John C. Jansing/2/ Retired. Former Chairman of Inde- 1983
70 pendent Election Corporation of
America, a proxy tabulating firm.
C. Alan MacDonald/2/ General Partner, The Marketing 1988
62 Partnership, Inc., a full service
marketing consulting firm. Formerly
Chairman and Chief Executive Officer
of Lincoln Snacks, Inc., manufacturer
of branded snack foods (1992-1994).
Formerly President and Chief
Executive Officer of Nestle Foods
Corp., and prior to that, President
and Chief Executive Officer of
Stouffer Foods Corp., both
subsidiaries of Nestle SA,
Switzerland. Currently serves as
Director of Den West Restaurant Co.,
J. B. Williams, and Fountainhead
Water Company.
Hansel B. Millican,
Jr./2/ President and Chief Executive Officer 1983
67 of Rochester Button Company.
Thomas J. Neff/2/ President, Spencer Stuart & Asso- 1983
58 ciates, an executive search consulting
firm.
- -----------------
</TABLE>
1. "Interested person" of the Fund and Lord Abbett, within the meaning of the
Investment Company Act of 1940, as amended, because of his association with Lord
Abbett.
2. Also an officer and/or director or trustee of other Lord Abbett-sponsored
funds.
3
<PAGE>
Listed below is the number of shares of the Fund owned beneficially by
each director as of March 22, 1996, together with the number of "phantom" shares
credited to the account of each director under a plan (the "Deferred Plan")
permitting independent directors to defer their directors' fees and to have the
deferred amounts deemed invested in shares of the Fund for later payment. Also
shown is the number of shares owned beneficially by the directors and officers
as a group, together with such "phantom" shares credited to the accounts of
directors as a group. In each case, the amounts shown are less than 1% of the
Fund's outstanding capital stock.
<TABLE>
<CAPTION>
Number of Shares Beneficially Owned
Name and Phantom Shares/1/
- -------------------------------- -----------------------------------
<S> <C>
Ronald P. Lynch 1,823,820
Robert S. Dow 9,242
E. Wayne Nordberg 202,372
E. Thayer Bigelow 921
Stewart S. Dixon 4,968
John C. Jansing 8,236
C. Alan MacDonald 17,258
Hansel B. Millican, Jr. 5,748
Thomas J. Neff 6,009
Directors and Officers as a 2,416,521
group
</TABLE>
___________________
1. Of the shares listed in the foregoing table, the following constitute
"phantom" shares credited to directors under the Deferred Plan: Mr. Bigelow,
921 shares; Mr. Dixon, 4,968 shares; Mr. Jansing, 5,709 shares; Mr. MacDonald,
3,327 shares; Mr. Millican, 5,748 shares; Mr. Neff, 5,759 shares; and directors
as a group: 26,432 shares.
The Board of Directors has only one standing committee, an Audit Committee,
consisting of Messrs. Bigelow, MacDonald and Millican. The functions performed
by the Audit Committee include recommendation of the selection of independent
public accountants for the Fund to the Board of Directors for approval, review
of the scope and results of audit and non-audit services, the adequacy of
internal controls and material changes in accounting principles and practices
and other matters when requested from time to time by the directors (the
"Independent Directors") who are not "interested persons" of the Fund within the
meaning of the
4
<PAGE>
Investment Company Act of 1940, as amended (the "Act"). The Audit Committee
held four meetings during the fiscal year ended September 30, 1995.
The Board of Directors of the Fund met twelve times during the fiscal year
ended September 30, 1995, and each director attended at least 75% of the total
number of meetings of the board and, if he was a member of the Audit Committee,
of such committee.
The second column of the following table sets forth the compensation accrued
by the Fund for the Independent Directors. The third and fourth columns set
forth information with respect to the retirement plan for Independent Directors
maintained by the Fund and the other Lord Abbett-sponsored funds. The fifth
column sets forth the total compensation accrued by the Fund and such other
funds for the Independent Directors. The second, third and fourth columns give
information for the Fund's most recent fiscal year; the fifth column gives
information for the calendar year ended December 31, 1995. No director of the
Fund associated with Lord Abbett and no officer of the Fund received any
compensation from the Fund for acting as a director or officer.
5
<PAGE>
<TABLE>
<CAPTION>
For Year Ended
For the Fiscal Year Ended September 30, 1995 December 31, 1995
- ----------------------------------------------------------------------------------------------------------------
(I) (II) (III) (IV) (V)
- ----------------------------------------------------------------------------------------------------------------
Pension or Retire- Estimated Annual
ment Benefits Benefits Upon Re-
Accrued by the tirement Proposed Total Compensation
Fund and to be Paid by the Accrued by the Fund
Aggregate Com- Fifteen Other Lord Fund and Fifteen and Fifteen Other
pensation Accrued Abbett-sponsored Other Lord Abbett- Lord Abbett-spons-
Name of Director by the Fund/1/ Funds/2/ sponsored Funds/2/ sored Funds/3/
- ---------------- ----------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
E. Thayer Bigelow $4,970 $ 9,772 $33,600 $41,700
Stewart S. Dixon $5,696 $22,472 $33,600 $42,000
John C. Jansing $5,721 $28,480 $33,600 $42,960
C. Alan MacDonald $5,692 $27,435 $33,600 $42,750
Hansel B. Millican, Jr. $5,691 $24,707 $33,600 $43,000
Thomas J. Neff $5,594 $16,126 $33,600 $42,000
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
1. Independent Directors' fees, including attendance fees for board and
committee meetings, are generally allocated among all Lord Abbett-sponsored
funds based on net assets of each fund. A portion of the fees payable by the
Fund to its Independent Directors is being deferred under a plan that deems the
deferred amounts to be invested in shares of the Fund for later distribution to
the directors. The total amount accrued under the plan for each Independent
Director since the beginning of his tenure with the Fund, including dividends
reinvested and changes in net asset value applicable to such deemed investments,
as of September 30, 1995, were as follows: Mr. Bigelow, $5,261; Mr. Dixon,
$48,695; Mr. Jansing, $52,388; Mr. MacDonald, $31,222; Mr. Millican, $52,823;
and Mr. Neff, $53,041.
2. Each Lord Abbett-sponsored fund has a retirement plan providing that
Independent Directors will receive annual retirement benefits for life equal to
80% of their final annual retainers following retirement at or after age 72 with
at least 10 years of service. Each plan also provides for a reduced benefit upon
early retirement under certain circumstances, a pre-retirement death benefit and
actuarially reduced joint-and-survivor spousal benefits. The amounts stated in
column (IV) would be payable annually under such retirement plans if the
director were to retire at age 72 and the annual retainers payable by such funds
were the same as they are today. The amounts set forth in column (III) were
accrued by the Lord Abbett-sponsored funds during the fiscal year ended
September 30, 1995 with respect to the retirement benefits set forth in column
(IV).
3. This column shows aggregate Independent Directors' fees, including
attendance fees for board and committee meetings, of a nature referred to in the
first sentence of footnote (1), accrued by the Lord Abbett-sponsored funds
during the year ended December 31, 1995.
6
<PAGE>
Listed below are the executive officers of the Fund, other than Messrs. Lynch,
Dow and Nordberg who are listed above in the table of nominees. Each executive
officer has been associated with Lord Abbett for over five years, except as
indicated. Messrs. Allen, Carper, Cutler, Henderson, Morris and Walsh are
partners of Lord Abbett; the others listed below are employees.
Stephen I. Allen, age 42, Vice President since 1994.
Daniel E. Carper, age 44, Vice President since 1986.
Kenneth B. Cutler, age 63, Vice President and Secretary since 1983.
Philip Fang, age 30, Executive Vice President since 1994.
John J. Gargana, Jr., age 64, Vice President since 1983.
Barbara A. Grummel, age 39, Executive Vice President since 1991.
Thomas S. Henderson, age 64, Vice President since 1983.
Paul A. Hilstad, age 53, Vice President since 1995 (with Lord Abbett since 1995;
formerly Senior Vice President and General Counsel of American Capital Manage
ment & Research, Inc.).
Thomas F. Konop, age 54, Vice President since 1987.
Robert G. Morris, age 51, Vice President since 1995.
John R. Mousseau, age 39, Executive Vice President since 1994.
Keith F. O'Connor, age 40, Treasurer since 1987.
Victor W. Pizzolato, age 63, Vice President since 1983.
John J. Walsh, age 60, Vice President since 1983.
Pursuant to the Fund's By-Laws, the election of each director of the Fund
requires the affirmative vote of a majority of the votes cast. If a shareholder
abstains from voting on this matter, then the shares held by such shareholder
shall be deemed present at the meeting for purposes of determining
7
<PAGE>
a quorum, but shall not be deemed to have been voted on this matter. If a broker
returns a "non-vote" proxy, indicating a lack of authority to vote on this
matter, then the shares covered by such non-vote shall be deemed present at the
meeting for purposes of determining a quorum but shall not be deemed to have
been voted on this matter.
The Board of Directors recommends that the shareholders vote FOR the election
of each of the nominees as a director of the Fund.
2. RATIFICATION OR REJECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche LLP as the in dependent
public accountants of the Fund for the fiscal year ending September 30, 1996.
The Act requires that such selection be submitted for ratification or rejection
at the next annual meeting of shareholders if such meeting be held. Deloitte &
Touche LLP (or a predecessor firm) acted as the Fund's independent public
accountants for the year ended September 30, 1995, and for a number of years
prior thereto. Based on information in the possession of the Fund, and
information furnished by Deloitte & Touche LLP, the firm has no direct financial
interest and no material indirect financial interest in the Fund. A
representative of Deloitte & Touche LLP is expected to attend the meeting and
will be provided with an opportunity to make a statement and answer appropriate
questions.
Ratification of the selection of Deloitte & Touche LLP requires the
affirmative vote of a majority of the votes cast. If a shareholder abstains
from voting on this matter, then the shares held by such shareholder shall be
deemed present at the meeting for purposes of determining a quorum, but shall
not be deemed to have been voted on this matter. If a broker returns a "non-
vote" proxy, indicating a lack of authority to vote on this matter, then the
shares covered by such non-vote shall be deemed present at the meeting for
purposes of determining a quorum but shall not be deemed to have been voted on
this matter.
The Board of Directors recommends that shareholders vote to ratify the
selection of Deloitte & Touche LLP as the Fund's independent public accountants
for the fiscal year ending September 30, 1996.
8
<PAGE>
3. PROPOSAL TO AMEND THE INVESTMENT OBJECTIVE OF EACH SERIES
The Board of Directors has approved an amendment to the investment objective
of each Series. The amended objective of each Series states that the Series
seeks as high a level of interest income exempt from federal income tax as is
consistent with reasonable risk. The current investment objective of each
Series is to seek as high a level of interest income exempt from federal income
tax as is consistent with preservation of capital. Before the amendment may
become effective for any Series, it must be approved by the shareholders of that
Series.
If the proposed amendment is approved, the Series affected will continue to
seek a high level of interest income and will continue to invest in the same
types of securities. The proposed amendment is simply intended to make clear
that, because each Series invests in interest-rate-sensitive securities,
preservation of capital is not possible in a rising interest rate environment.
While preservation of capital has been, and remains, an important consideration,
it has never been guaranteed and is subject to reasonable risk in connection
with the objective of seeking a high level of interest income. For this
purpose, "reasonable risk" means that each Series over time will have a
volatility approximating the Lehman Brothers Current Coupon Long Index.
Approval of the proposed amendment to the investment objective with respect to
any Series requires the affirmative vote of a "majority" (as defined in the Act)
of the voting securities of such Series. A "majority" vote for a Series is
defined in the Act as the vote of the holders of the lesser of: (i) 67% or more
-
of the voting securities of such Series present or represented by proxy at the
shareholders meeting, if the holders of more than 50% of the outstanding voting
securities of such Series are present or represented by proxy, or (ii) more than
--
50% of the outstanding voting securities of such Series. The effect of an
abstention or broker non-vote is the same as a vote against this proposal.
If the proposed amendment is not approved for one or more Series, the current
investment objective for each such Series will continue in effect.
The Board of Directors recommends that shareholders of each Series vote in
favor of the proposed amendment to the investment objective of such Series.
9
<PAGE>
4. PROPOSAL TO AMEND THE FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS OF
EACH SERIES
The Board of Directors has approved various amendments to each Series'
investment policies and restrictions in order to provide greater uniformity
among the Lord Abbett-sponsored funds and greater flexibility in managing the
Series' investment portfolios. A Series' investment policies and restrictions
designated "fundamental" may be changed only by the vote of a "majority" (as
defined in the Act) of such Series' voting securities. Those investment policies
and restrictions designated "non-fundamental" may be changed by the vote of the
Board of Directors alone. Therefore, the proposed amendments to the fundamental
policies and restrictions described below require shareholder approval. Each
Series' current fundamental investment policies and restrictions and its
proposed fundamental and certain non-fundamental investment policies and
restrictions are set forth in Exhibit A attached hereto.
The investment policies and restrictions of a Series govern generally the
investment activities of such Series and limit its ability to invest in certain
types of securities or engage in certain types of transactions. The proposed
changes are not expected to affect materially the current operations of the
Series. The proposed fundamental investment policies and restrictions of each
Series have been made less restrictive in order to provide greater uniformity
among the Lord Abbett-sponsored funds and greater flexibility in managing the
Series' investment portfolios as noted above. The Board of Directors has no
present intention of approving actions permitted by these less restrictive
fundamental policies and restrictions. If it were to do so, the risks of
investing in the Series could be increased.
The proposed policies and restrictions restate many of the policies and
restrictions currently in effect for the Series. In some instances, certain
fundamental policies and restrictions have been modified or eliminated in
accordance with developments in Federal or state blue sky regulations or in the
securities markets since the inception of a Series. In other instances, as
illustrated in Exhibit A, certain policies and restrictions previously deemed
fundamental have been redesignated non-fundamental. By making certain policies
and restrictions non-fundamental, the board may amend a policy or restriction as
it deems appropriate and in the best interest of a Series and its shareholders,
without incurring the costs (normally borne by such Series and its shareholders)
of seeking a shareholder vote. Also, certain of the proposed fundamental
investment policies and restrictions are stated in terms of "to the extent
permitted by applicable law". Applicable law can change over time and may
become more or less restrictive as a result. The policies and restrictions have
been drafted in this manner so that a change in law would not
10
<PAGE>
require a Series to seek a shareholder vote to amend the policy or restriction
to conform to applicable law, as revised.
The principal effect of the proposed amendments will be to permit each Series
to take certain actions not now permitted to it without obtaining additional
shareholder approval. Fund management either will not be permitted to, or does
not intend to, take any such action with respect to a Series unless such action
is approved by the Board of Directors. The board does not now intend to approve
any such action or to do so in the future unless it deems such action to be an
appropriate means of seeking a Series' investment objective in the best
interests of such Series and its shareholders, in which case disclosure of the
change would be made in the Fund's then current prospectus or statement of
additional information or both. Such actions, none of which the board has a
present intention of approving, involve the following matters, among others: (i)
-
short sales of securities and purchases of securities on margin to the extent
permitted by applicable law; (ii) borrowings from banks in amounts up to one-
--
third of total assets (and up to an additional 5% of total assets for temporary
purposes) and such short-term credits as may be necessary for the clearance of
purchases and sales of portfolio securities; (iii) loans of portfolio securities
---
to the extent permitted by law; (iv) purchases and sales of securities directly
--
or indirectly secured by real estate or interests therein, commodities and
commodity contracts in accordance with applicable law so long as registration
would not be required as a commodity pool operator under the Commodity Exchange
Act; (v) with respect to 25% of gross assets, purchasing securities of one
-
issuer representing more than 5% of the gross assets of the Series or 10% of the
voting securities of such issuer (National Series only); purchasing more than
10% of the voting securities of an issuer (all other Series); (vi) investments
--
of up to 15% of gross assets in illiquid securities; (vii) pledges to secure
---
borrowings or as permitted by other investment policies and applicable law;
(viii) investments in the securities of other investment companies to the extent
- -----
permitted by applicable law; and (ix) purchases and sales of puts and calls.
--
See Exhibit A hereto for a detailed comparison of the current fundamental
investment policies and restrictions and the proposed fundamental and certain
non-fundamental investment policies and restrictions of the Series.
Approval of the proposed amendments to a Series' fundamental investment
policies and restrictions requires the affirmative vote of a "majority" (as
defined in the Act) of the voting securities of such Series. A "majority" vote
of a Series is defined in the Act as the vote of the holders of the lesser of:
(i) 67% or more of the voting securities of such Series present or represented
-
by proxy at the shareholders meeting, if the holders of more than 50% of the
outstanding voting securities of such Series are present or represented by
proxy, or (ii) more than 50% of the outstanding voting securities of such
--
Series. The effect of an abstention or broker non-vote is the same as a vote
against this proposal.
11
<PAGE>
If the proposed amendments are not approved by the shareholders of one or more
Series, the current fundamental policies and restrictions for such Series will
continue in effect.
The Board of Directors recommends that shareholders vote in favor of the
proposed amendments to the Series' fundamental investment policies and
restrictions.
5. NEW DISTRIBUTION PLAN AND AGREEMENT FOR THE CLASS A SHARES OF EACH
SERIES
At a meeting of the Board of Directors of the Fund held on March 14, 1996, the
directors of the Fund unanimously approved, subject to shareholder approval, and
determined to submit to the shareholders of each Series for approval, a new
Distribution Plan and Agreement pursuant to Rule 12b-1 under the Act (each a
"Proposed Plan") for the existing class of shares of each Series. The existing
class of shares for each Series is to be designated the Class A Shares -- see
Item 6 below. The texts of the Proposed Plans for the respective Series are
attached hereto as Exhibits B-1 through B-9. The directors who approved the
Proposed Plans include all of the Independent Directors, none of whom is an
"interested person" of the Fund within the meaning of the Act or has a direct or
indirect financial interest in the operations of the Proposed Plans or in any
agreements related thereto.
If approved by shareholders, the Proposed Plan for a Series will replace the
distribution plan and agreement for such Series (each a "Current Plan")
described below:
The National Series' Current Plan was approved by such Series' shareholders on
May 14, 1990 and became operative June 1, 1990. The Current Plan for the
National Series was last amended by action of the Board of Directors on June 12,
1991.
The Connecticut Series' Current Plan was approved by such Series' shareholders
on June 12, 1991 and became operative October 1, 1992.
The Hawaii Series' Current Plan was approved by such Series' shareholders on
October 16, 1991 and became operative January 1, 1993. The Current Plan for the
Hawaii Series was last amended by action of the Board of Directors on October 9,
1991.
12
<PAGE>
The Minnesota Series' Current Plan was approved by such Series' shareholders
on December 15, 1994. The Current Plan for the Minnesota Series has not yet
become operative.
The Missouri Series' Current Plan was approved by such Series' shareholders on
June 12, 1991 and became operative July 1, 1992.
The New Jersey Series' Current Plan was approved by such Series' shareholders
on December 15, 1990 and became operative July 1, 1992. The Current Plan for
the New Jersey Series was last amended by action of the Board of Directors on
June 12, 1991.
The New York Series' Current Plan was approved by such Series' shareholders on
March 14, 1990 and became operative June 1, 1990. The Current Plan for the New
York Series was last amended by action of the Board of Directors on June 12,
1991.
The Texas Series' Current Plan was approved by such Series' shareholders on
March 14, 1990 and became operative June 1, 1990. The Current Plan for the
Texas Series was last amended by action of the Board of Directors on June 12,
1991.
The Washington Series' Current Plan was approved by such Series' shareholders
on March 11, 1992. The Current Plan for the Washington Series has not yet
become operative.
The changes included in the Proposed Plans, which are described below, are
designed primarily to maintain the competitive position of the Class A Shares of
each Series.
Under the Current Plans for the National, New York and Texas Series (except as
to certain accounts for which tracking data is not available), each Series pays
dealers through Lord Abbett (1) an annual service fee (payable quarterly) of
-
0.25% of the average daily net asset value of shares sold by dealers on or after
June 1, 1990 (0.15% of the average daily net asset value of shares sold, or
attributable to shares sold, by dealers prior to that date) and (2) a one-time
-
1% distribution fee, at the time of sale, on all shares sold at the $1 million
level by dealers, including sales qualifying at such level under the rights of
accumulation and statement of intention privileges described in the Fund's
prospectus in effect at such time.
Under the Current Plans for the Connecticut, Minnesota, Missouri and New
Jersey Series (except as to certain accounts for which
13
<PAGE>
tracking data is not available) the Series pays dealers through Lord Abbett (1)
-
an annual service fee (payable quarterly) of (a) in the case of the Connecticut
-
and Missouri Series, 0.25% of the average daily net asset value of shares sold
by dealers and (b) in the case of the Hawaii and New Jersey Series, 0.25% of the
-
average daily net asset value of shares sold by dealers on or after January 1,
1993 (Hawaii) and July 1, 1992 (New Jersey) (0.15% of the average daily net
asset value of shares sold, or attributable to shares sold, by dealers prior to
those respective dates), and (2) a one-time 1% distribution fee, at the time of
-
sale, on all shares at the $1 million level sold by dealers, including sales
qualifying at such level under the rights of accumulation and statement of
intention privileges described in the Fund's prospectus in effect at such time.
The Current Plans of the Washington and Minnesota Series have not yet become
operative. Each of those Plans is to become operative on the first day (the
"Operative Date") of the quarter subsequent to the date that such Series' net
assets reach $100 million. As of March 22, 1996, the net assets of the
Washington Series totaled $73,997,221 million and the net assets of the
Minnesota Series totaled $6,896,282 million. When those Current Plans become
operative (except as to certain accounts for which tracking data will not be
available) each Series is to pay dealers through Lord Abbett (1) an annual
-
service fee (payable quarterly) of 0.25% of the average daily net asset value of
shares sold by dealers on or after the applicable Operative Date (0.15% of the
average daily net asset value of shares sold, or attrib utable to shares sold,
by dealers prior to those respective dates), and (2) a one-time 1.0%
-
distribution fee, at the time of sale, on all shares at the $1 million level
sold by dealers after the applicable Operative Date, including sales qualifying
at such level under the rights of accumulation and statement of intention
privileges described in the Fund's prospectus in effect at such time.
The above-described service and distribution fees are intended to provide
additional incentives for dealers (a) to provide continuing information and
-
investment services to their shareholder accounts and otherwise to encourage
their accounts to remain invested in the applicable Series and (b) to sell
-
shares of the applicable Series. Holders of shares on which the 1% distribution
fee has been paid under a Current Plan that is operative are required to pay to
the applicable Series a contingent deferred reimbursement charge ("CDRC") of 1%
of the original cost or the then net asset value, whichever is less, of such
shares if they are redeemed out of the Lord Abbett-sponsored family of funds on
or before the end of the twenty-fourth month after the month in which the
purchase occurred. (An exception is made for certain redemptions by tax-
qualified plans under Section 401 of the Internal Revenue Code due to plan
loans, hardship withdrawals, death, retirement or separation from service with
respect to plan participants.) If the shares are exchanged into another Lord
Abbett fund or series and are thereafter redeemed out of the Lord Abbett family
on or before the end of such twenty-fourth month, the charge is collected for
the
14
<PAGE>
Fund by the other fund or series. The Fund collects such a charge for other
Lord Abbett-sponsored funds in a similar situation.
Set forth below is a description of the principal changes to be effected under
the Proposed Plans:
(a) Distribution Fees. The Fund's Board of Directors will be authorized under
-----------------
the Proposed Plans, without further shareholder vote, to increase the
amount of annual distribution fees (payable after their respective Operative
Dates, which will remain the same as under the Current Plans, in the case of the
Minnesota and Washington Series) up to 0.25% of the average annual net assets
attributable to the Class A Shares of each Series (the "Distribution Fee
Ceiling") (the annual distribution and service fees could total 0.50% of such
average annual net assets if approved by the board). This increased spending
limit is intended primarily to permit the directors to increase the amount to be
spent for distribution to meet changing sales competition. The directors
believe it is desirable to be able to make these changes without further
shareholder approval because additional shareholder meetings would be time-
consuming and costly to the Series and their shareholders. The Board of
Directors will approve additional charges under this increased authority only if
a majority of the Independent Directors conclude in their business judgment that
there is a reasonable likelihood that the increase will benefit the affected
Series and its share holders.
The one-time 1% distribution fee, payable (after the Operative Dates in the
case of the Minnesota and Washington Series) at the time of certain sales as
described above, is to be charged against the Distribution Fee Ceiling. During
the Fund's last fiscal year, payments of the one-time 1% distribution fee under
the Current Plans totaled 0.01% for the National, 0.02% for the Connecticut,
0.05% for the Hawaii, 0.01% for the Missouri, 0.01% for the New Jersey, 0.01%
for the New York and 0.01% for the Texas Series of each such Series' average net
assets. Subject to shareholder approval of the Proposed Plans, the Board of
Directors has authorized the Series to pay (or, with respect to the Washington
and Minnesota Series, to begin paying after the Operative Date) this one-time
distribution fee with respect to sales of Class A Shares, subject to three
changes: First, the payments will be made in connection with sales to
-----
retirement plans with 100 or more eligible employees, in addition to sales at
the $1 million level as under the Current Plans; Second, the payments will be
------
scaled down at certain breakpoints, as follows: 1% of the first $5 million,
0.55% of the next $5 million, 0.50% of the next $40 million and 0.25% over $50
million of shares sold to a retirement plan or other qualifying purchaser within
a 12-month period (beginning when the first purchase is made at net asset
value); and Third, the payments will be made to institutions and persons
-----
permitted by applicable law and/or rules to receive such payments ("Authorized
Institutions"), rather than just to dealers as is the case under the Current
Plans.
15
<PAGE>
If shareholders approve the Proposed Plans, the Board of Directors has
authorized each Series (other than the Minnesota Series) to pay (after the
Operative Date in the case of the Washington Series), as an additional
distribution fee, a supplemental payment to dealers who have accounts comprising
a significant percentage of such Series' Class A Share assets and having a lower
than average redemption rate and who have a satisfactory program for the
promotion of Class A Shares. Any such payments will be 0.10% per annum of the
average assets of the Series represented by the Class A Share accounts of
qualifying dealers, and will be charged against the Distribution Fee Ceiling.
This supplemental payment is intended by the Board of Directors to enhance the
Fund's relationships with those dealers most likely to have a significant impact
on the growth of the Class A Shares.
(b) Service Fees. Service fee payments, which are to be continued under the
------------
Proposed Plans at the same rates as under the respective Current Plans, could be
made to all Authorized Institutions (institutions and persons permitted by
applicable law and/or rules to receive such payments), rather than just to
dealers as is the case under the Current Plans.
(c) Use of Payments by Lord Abbett. Lord Abbett would be permitted to use
------------------------------
payments received under the Proposed Plans to provide continuing services to
shareholder accounts not serviced by Authorized Institutions and, with board
approval, to finance any activity which is primarily intended to result in the
sale of Class A Shares. Any such payments to finance activities primarily
intended to result in the sale of Class A Shares would be subject to the
Distribution Fee Ceiling.
(d) CDRC. The CDRC applicable to the Class A Shares would be substantially
----
similar to that payable under the Current Plans, except that no CDRC would be
payable in connection with redemptions by retirement plans (not just those
qualified under Section 401 of the Internal Revenue Code) attributable to any
benefit payment. In addition, no CDRC would apply if the plan sponsor requested
a redemption to correct an excess contribution in order to comply with
applicable IRS rules. Because CDRC payments will be made directly to the
Series, they will have the effect of reducing the amount of the distribution
fees paid by the Series for the purpose of complying with the Distribution Fee
Ceiling. As in the case of the specific distribution fees authorized by the
Board of Directors of the Fund, the CDRC authorized from time to time by the
board for the Class A Shares of each Series will be described in the then
current prospectus of the Fund.
If the supplemental payment to dealers, the revised one-time dis tribution fee
and the other changes described above had been in effect for the Fund's last
fiscal year, it is estimated that, in the aggregate, they would have increased
the ratio of expenses to average net assets of each Series with an operative
plan as follows: for the National Series, from 0.82% to approximately 0.85%,
representing a
16
<PAGE>
difference of 0.03%; for the Hawaii Series, from 0.58% to approximately 0.63%,
representing a difference of 0.05%; for the Missouri Series, from 0.74% to
approximately 0.81%, representing a difference of 0.07%; for the New York
Series, from 0.82% to approximately 0.83%, representing a difference of 0.01%;
and for the Texas Series, from 0.62% to approximately 0.66%, representing a
difference of 0.04%. For the Connecticut and New Jersey Series, there was no
estimated increase in expenses.
(e) Lord Abbett Distributor. The other party to the Proposed Plans is
-----------------------
to be Lord Abbett Distributor LLC, a New York limited liability company, to be
formed as a subsidiary of Lord Abbett ("Lord Abbett Distributor"), rather than
Lord Abbett. Lord Abbett Distributor is to take on all the underwriting
functions currently performed directly by Lord Abbett.
In considering whether to recommend the Proposed Plans for approval, the board
considered, among other things, the factors set forth below:
(i) Flexibility in Adapting Distribution Fees to Meet Industry-Wide Changes.
-----------------------------------------------------------------------
During the last several years, there has been significantly increased
competition and pricing experimentation in the mutual fund industry. As the
pace of change increases, the Board of Directors believes it will be useful to
be able to respond more quickly to marketplace pressures, and change in
appropriate cases the amount of the Class A 12b-1 distribution fees to be paid,
without unnecessarily burdening the shareholders with the costs of additional
proxy solicitations. The directors believe that the increased distribution fees
described above are good examples of the desirability of this flexibility.
Based on advice received from Lord Abbett, the decision by the board to approve
the payment of distribution fees in connection with sales to retirement plans
with 100 or more eligible employees will enable the Class A Shares of the
applicable Series to compete more effectively in this growing and important
market. The 0.10% per annum supplemental payments to dealers who meet certain
criteria will permit the Series with operative plans to enhance relationships
with those dealers most likely to have a significant impact on the growth of the
Class A Shares.
(ii) Expanding Categories of Persons Eligible to Receive Payments. The Current
------------------------------------------------------------
Plans limit payments thereunder to dealers selling Fund shares. Since the
Current Plans were adopted, different methods of distribution, using different
entities, have developed in the industry. The Board of Directors sees no reason
to limit arbitrarily the categories of persons eligible to receive payments
under the Proposed Plans, and believes that the availability of payments under
the plans will induce such other entities to invest in Class A Shares.
17
<PAGE>
(iii) Flexibility in Distributor's Use of Payments. Lord Abbett has
--------------------------------------------
advised the Board of Directors of the Fund that allowing Lord Abbett Distributor
to retain fees received from the Series to (i) provide continuing information
-
and investment services to shareholder accounts and (ii) finance, with board
--
approval, any activity which is primarily intended to result in the sale of
Class A Shares, will provide useful flexibility and will be in line with common
practice in the industry.
In light of the anticipated benefits to each Series and its shareholders as a
result of adopting the Proposed Plans, and having reviewed a comparison of the
costs to each Series of the Current Plans and the Proposed Plans, the directors
of the Fund have concluded, in the exercise of reasonable business judgment and
in light of their fiduciary duties, that there is a reasonable likelihood that
the Proposed Plans will benefit each Series and its shareholders. There can,
however, be no assurance that the anticipated benefits will be realized.
Payments by each Series to dealers through Lord Abbett under the Current Plans
for the fiscal year ended September 30, 1995 were $1,499,000 for the National,
$252,000 for the Connecticut, $192,000 for the Hawaii, $294,652 for the
Missouri, $459,000 for the New Jersey, $747,306 for the New York and $233,348
for the Texas Series. Such payments represented the following percentages of
each Series' average net assets during that period: 0.24% for the National,
0.25% for the Connecticut, 0.27% for the Hawaii, 0.24% for the Missouri, 0.26%
for the New Jersey, 0.23% for the New York and 0.25% for the Texas Series.
Set forth in the tables below is a summary comparison of each Series'
expenses, on a current and pro-forma basis. The annual operating expenses shown
in the second column are the Series' actual expenses for the fiscal year ended
September 30, 1995. The expenses shown in the third column represent, on a pro-
forma basis, such actual expenses adjusted to show the effect of the maximum
distribution fee the board would be authorized to approve under the Proposed
Plans. The fourth column shows such pro-forma annual operating expenses based on
the distribution fee rate the board has approved subject to approval of the
Proposed Plan by shareholders, but reflecting, in the case of the Washington and
Minnesota Series, that their Proposed Plans would not have met the requirements
for being operative during such fiscal year. The example set forth below is not
a representation of past or future expenses. Actual expenses may be greater or
less than those shown.
18
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- --------------------------------------------------------------------------------------------------------------
Pro-Forma
Pro-Forma (reflecting
Year ended (reflecting estimated amounts
September 30, 1995 maximum amounts that would have
(reflecting the Current payable under the been paid under
NATIONAL SERIES Plan) Proposed Plan) the Proposed Plan)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
- --------------------------------------------------------------------------------------------------------------
Maximum Sales Load/1/ on Purchases 4.75% 4.75% 4.75%
Deferred Sales Load/1/ None/2/ None/2/ None/2/
- --------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- --------------------------------------------------------------------------------------------------------------
Management Fee 0.49% 0.49% 0.49%
12b-1 Fees 0.24% 0.50%/3/ 0.27%/4/
Other Expenses 0.09% 0.09% 0.09%
- --------------------------------------------------------------------------------------------------------------
Total Operating Expenses 0.82% 1.08% 0.85%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. For every $1,000 invested, with reinvestment of all
distributions, you would pay the following total expenses if you closed your
account after the number of years indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT $ 55/5/ $ 72/5/ $ 91/5/ $ 144/5/
- ---------------------------------------------------------------------------------------------------------
PRO-FORMA (MAXIMUM) $ 58/3,5/ $ 80/3,5/ $105/3,5/ $174/3,5/
- ---------------------------------------------------------------------------------------------------------
PRO-FORMA (ESTIMATED) $ 56/4,5/ $ 74/4,5/ $ 93/4,5/ $149/4,5/
- ---------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- ---------------------------------------------------------------------------------------------
Pro-Forma
(reflecting
estimated
Pro-Forma (re- amounts that
Year ended flecting maximum would have
September 30, 1995 amounts payable been paid
(reflecting the under the under the
CONNECTICUT SERIES Current Plan) Proposed Plan) Proposed Plan)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
- ---------------------------------------------------------------------------------------------
Maximum Sales Load/1/ on Purchases 4.75% 4.75% 4.75%
Deferred Sales Load/1/ None/2/ None/2/ None/2/
- ---------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------
Management Fee 0.06%/6/ 0.06%/6/ 0.06%/6/
12b-1 Fees 0.25% 0.50%/3/ 0.25%/4/
Other Expenses 0.10% 0.10% 0.10%
- ---------------------------------------------------------------------------------------------
Total Operating Expenses 0.41%/6/ 0.66%/6/ 0.41%/6/
- ---------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. For every $1,000 invested, with reinvestment of all
distributions, you would pay the following total expenses if you closed your
account after the number of years indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT $ 51/5,6/ $ 60/5,6/ $ 69/5,6/ $ 74/5,6/
- --------------------------------------------------------------------------------------------------------------
PRO-FORMA (MAXIMUM) $54/3,5,6/ $68/3,5,6/ $83/3,5,6/ $126/3,5,6/
- --------------------------------------------------------------------------------------------------------------
PRO-FORMA (ESTIMATED) $51/4,5,6/ $60/4,5,6/ $69/4,5,6/ $ 74/4,5,6/
- --------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- ------------------------------------------------------------------------------------------------
Pro-Forma
(reflecting
Pro-Forma (re- estimated
Year ended flecting maximum amounts that
September 30, 1995 amounts payable would have been
(reflecting the under the paid under the
HAWAII SERIES Current Plan) Proposed Plan) Proposed Plan)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
- ------------------------------------------------------------------------------------------------
Maximum Sales Load/1/ on Purchases 4.75% 4.75% 4.75%
Deferred Sales Load/1/ None/2/ None/2/ None/2/
- ------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ------------------------------------------------------------------------------------------------
Management Fee 0.20%/6/ 0.20%/6/ 0.20%/6/
12b-1 Fees 0.27% 0.50%/3/ 0.32%/4/
Other Expenses 0.11% 0.11% 0.11%
- ------------------------------------------------------------------------------------------------
Total Operating Expenses 0.58%/6/ 0.81%/6/ 0.63%/6/
- ------------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. For every $1,000 invested, with reinvestment of all
distributions, you would pay the following total expenses if you closed your
account after the number of years indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT $ 53/5,6/ $ 65/5,6/ $ 78/5,6/ $ 117/5,6/
- ---------------------------------------------------------------------------------------------------------
PRO-FORMA (MAXIMUM) $ 55/3,5,6/ $ 72/3,5,6/ $ 90/3,5,6/ $ 143/3,5,6/
- ---------------------------------------------------------------------------------------------------------
PRO-FORMA (ESTIMATED) $ 54/4,5,6/ $ 67/4,5,6/ $ 81/4,5,6/ $ 122/4,5,6/
- ---------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- -------------------------------------------------------------------------------------------
Pro-Forma (re-
Year ended flecting maximum
September 30, 1995 amounts payable
(reflecting the under the
MINNESOTA SERIES Current Plan) Proposed Plan) Pro-Forma
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
- -------------------------------------------------------------------------------------------
Maximum Sales Load/1/ on Purchases 4.75% 4.75% 4.75%
Deferred Sales Load/1/ None/2/ None/2/ None/2/
- -------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -------------------------------------------------------------------------------------------
Management Fee 0.00%/6/ 0.00%/6/ 0.00%/6/
12b-1 Fees 0.00%/7/ 0.50%/3/ 0.00%/7/
Other Expenses 0.00%/6/ 0.00%/6/ 0.00%/6/
- -------------------------------------------------------------------------------------------
Total Operating Expenses 0.00%/6,7/ 0.50%/6/ 0.00%/6,7/
- -------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. For every $1,000 invested, with reinvestment of all
distributions, you would pay the following total expenses if you closed your
account after the number of years indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT $48/5,6,7/ $48/5,6,7/ $48/5,6,7/ $ 48/5,6,7/
- --------------------------------------------------------------------------------------------------------------
PRO-FORMA (MAXIMUM) $52/3,5,6/ $63/3,5,6/ $74/3,5,6/ $107/3,5,6/
- --------------------------------------------------------------------------------------------------------------
PRO-FORMA $48/5,6,7/ $48/5,6,7/ $48/5,6,7/ $ 48/5,6,7/
- --------------------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- ------------------------------------------------------------------------------------------------
Pro-Forma
(reflecting
Pro-Forma (re- estimated
Year ended flecting maximum amounts that
September 30, 1995 amounts payable would have been
(reflecting the under the paid under the
MISSOURI SERIES Current Plan) Proposed Plan) Proposed Plan)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
- ------------------------------------------------------------------------------------------------
Maximum Sales Load/1/ on Purchases 4.75% 4.75% 4.75%
Deferred Sales Load/1/ None/2/ None/2/ None/2/
- ------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ------------------------------------------------------------------------------------------------
Management Fee 0.35%/6/ 0.35%/6/ 0.35%/6/
12b-1 Fees 0.24% 0.50%/3/ 0.31%/4/
Other Expenses 0.15% 0.15% 0.15%
- ------------------------------------------------------------------------------------------------
Total Operating Expenses 0.74%/6/ 1.00%/6/ 0.81%/6/
- ------------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. For every $1,000 invested, with reinvestment of all
distributions, you would pay the following total expenses if you closed your
account after the number of years indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT $55/5,6/ $70/5,6/ $ 87/5,6/ $135/5,6/
- --------------------------------------------------------------------------------------------------------------
PRO-FORMA (MAXIMUM) $57/3,5,6/ $78/3,5,6/ $100/3,5,6/ $164/3,5,6/
- --------------------------------------------------------------------------------------------------------------
PRO-FORMA (ESTIMATED) $55/4,5,6/ $72/4,5,6/ $ 90/4,5,6/ $143/4,5,6/
- --------------------------------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- ------------------------------------------------------------------------------------------------
NEW JERSEY SERIES Pro-Forma
(reflecting
Pro-Forma (re- estimated
Year ended flecting maximum amounts that
September 30, 1995 amounts payable would have been
(reflecting the under the paid under the
Current Plan Proposed Plan) Proposed Plan)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
- ------------------------------------------------------------------------------------------------
Maximum Sales Load/1/ on Purchases 4.75% 4.75% 4.75%
Deferred Sales Load/1/ None/2/ None/2/ None/2/
- ------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ------------------------------------------------------------------------------------------------
Management Fee 0.35%/6/ 0.35%/6/ 0.35%/6/
12b-1 Fees 0.26% 0.50%/3/ 0.26%/4/
Other Expenses 0.11% 0.11% 0.11%
- ------------------------------------------------------------------------------------------------
Total Operating Expenses 0.72%/6/ 0.96%/6/ 0.72%/6/
- ------------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. For every $1,000 invested, with reinvestment of all
distributions, you would pay the following total expenses if you closed your
account after the number of years indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT $55/5,6/ $69/5,6/ $86/5,6/ $ 94/5,6/
- --------------------------------------------------------------------------------------------------------------
PRO-FORMA (MAXIMUM) $57/3,5,6/ $77/3,5,6/ $98/3,5,6/ $160/3,5,6/
- --------------------------------------------------------------------------------------------------------------
PRO-FORMA (ESTIMATED) $55/4,5,6/ $69/4,5,6/ $86/4,5,6/ $ 94/4,5,6/
- --------------------------------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- ------------------------------------------------------------------------------------------------
Pro-Forma
(reflecting
Pro-Forma (re- estimated
Year ended flecting maximum amounts that
September 30, 1995 amounts payable would have been
(reflecting the under the paid under the
NEW YORK SERIES Current Plan) Proposed Plan) Proposed Plan)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
- ------------------------------------------------------------------------------------------------
Maximum Sales Load/1/ on Purchases 4.75% 4.75% 4.75%
Deferred Sales Load/1/ None/2/ None/2/ None/2/
- ------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ------------------------------------------------------------------------------------------------
Management Fee 0.50% 0.50% 0.50%
12b-1 Fees 0.23% 0.50%/3/ 0.24%/4/
Other Expenses 0.09% 0.09% 0.09%
- ------------------------------------------------------------------------------------------------
Total Operating Expenses 0.82% 1.09% 0.83%
- ------------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. For every $1,000 invested, with reinvestment of all
distributions, you would pay the following total expenses if you closed your
account after the number of years indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT $ 55/5/ $ 72/5/ $ 91/5/ $144/5/
- ------------------------------------------------------------------------------------------------------------
PRO-FORMA (MAXIMUM) $ 58/3,5/ $ 80/3,5/ $105/3,5/ $174/3,5/
- ------------------------------------------------------------------------------------------------------------
PRO-FORMA (ESTIMATED) $ 56/4,5/ $ 73/4,5/ $ 97/4,5/ $145/4,5/
- ------------------------------------------------------------------------------------------------------------
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- ------------------------------------------------------------------------------------------------
Pro-Forma
(reflecting
Pro-Forma (re- estimated
Year ended flecting maximum amounts that
September 30, 1995 amounts payable would have been
(reflecting the under the paid under the
TEXAS SERIES Current Plan) Proposed Plan) Proposed Plan)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
- ------------------------------------------------------------------------------------------------
Maximum Sales Load/1/ on Purchases 4.75% 4.75% 4.75%
Deferred Sales Load/1/ None/2/ None/2/ None/2/
- ------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ------------------------------------------------------------------------------------------------
Management Fee 0.25%/6/ 0.25%/6/ 0.25%/6/
12b-1 Fees 0.25% 0.50%/3/ 0.29%/4/
Other Expenses 0.12% 0.12% 0.12%
- ------------------------------------------------------------------------------------------------
Total Operating Expenses 0.62%/6/ 0.87%/6/ 0.66%/6/
- ------------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. For every $1,000 invested, with reinvestment of all
distributions, you would pay the following total expenses if you closed your
account after the number of years indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT $ 54/5,6/ $66/5,6/ $ 80/5,6/ $121/5,6/
- ---------------------------------------------------------------------------------------------------------
PRO-FORMA (MAXIMUM) $ 56/3,5,6/ $74/3,5,6/ $ 93/3,5,6/ $150/3,5,6/
- ---------------------------------------------------------------------------------------------------------
PRO-FORMA (ESTIMATED) $ 54/4,5,6/ $68/4,5,6/ $ 83/4,5,6/ $126/4,5,6/
- ---------------------------------------------------------------------------------------------------------
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- -------------------------------------------------------------------------------------------
Pro-Forma (re-
Year ended flecting maximum
September 30, 1995 amounts payable
(reflecting the under the
WASHINGTON SERIES Current Plan) Proposed Plan) Pro-Forma
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(AS A PERCENTAGE OF OFFERING PRICE)
- -------------------------------------------------------------------------------------------
Maximum Sales Load/1/ on Purchases 4.75% 4.75% 4.75%
Deferred Sales Load/1/ None/2/ None/2/ None/2/
- -------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -------------------------------------------------------------------------------------------
Management Fee 0.35%/6/ 0.35%/6/ 0.35%/6/
12b-1 Fees 0.00%/7/ 0.50%/3/ 0.00%/7/
Other Expenses 0.18% 0.18% 0.18%
- -------------------------------------------------------------------------------------------
Total Operating Expenses 0.53%/6,7/ 1.03%/6/ 0.53%/6,7/
- -------------------------------------------------------------------------------------------
</TABLE>
Example: Assume an annual return of 5% and there is no change in the level of
- -------
expenses described above. For every $1,000 invested, with reinvestment of all
distributions, you would pay the following total expenses if you closed your
account after the number of years indicated.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT $53/5,6,7/ $64/5,6,7/ $ 76/5,6,7/ $ 82/5,6,7/
- -----------------------------------------------------------------------
PRO-FORMA (MAXIMUM) $58/3,5,6/ $78/3,5,6/ $102/3,5,6/ $167/3,5,6/
- -----------------------------------------------------------------------
PRO-FORMA $53/5,6,7/ $64/5,6,7/ $ 76/5,6,7/ $ 82/5,6,7/
- -----------------------------------------------------------------------
</TABLE>
1. Sales "load" is referred to as sales "charge" and "deferred sales load"
is referred to as "contingent deferred reimbursement charge" or "CDRC"
throughout this Proxy Statement. Investors should be aware that long-term
shareholders may pay, as a front-end sales charge and under both the Current
Plans and the Proposed Plans, more than the economic equivalent of the maximum
front-end sales charge permitted by certain rules of the National Association of
Securities Dealers, Inc.
2. Under both the Current Plans and the Proposed Plans, redemptions of shares
on which a Series' Rule 12b-1 sales distribution fee has been paid are subject
to a CDRC of 1% of the original cost or the then net asset value, whichever is
less, of all shares so purchased which are redeemed out of the Lord Abbett-
sponsored family of funds on or before the end of the twenty-fourth month after
the month in which the purchase occurred, subject to certain exceptions
described herein.
27
<PAGE>
3. Reflects the maximum annual 12b-1 fees of 0.50% that could be paid under
the Proposed Plans in any year, consisting of a distribution fee of 0.25% and a
service fee of 0.25%. This maximum amount would not be applicable with respect
to the Minnesota or Washington Series until such Series' Proposed Plan became
operative.
4. Reflects the estimated level of distribution and service fees that would
have been paid under the Proposed Plan for this Series had it been operative for
the Fund's last fiscal year.
5. Based on total current and pro-forma operating expenses shown in the table
above.
6. Although not obligated to, Lord, Abbett & Co. may waive its management fee
and subsidize the operating expenses with respect to any Series. For the fiscal
year ended September 30, 1995, Lord Abbett waived portions of its management fee
for these Series and subsidized certain operating expenses for the Minnesota
Series. Absent such waivers and subsidy, the management fee would have been
0.50% for each of the Connecticut, Hawaii, Minnesota (annualized), Missouri, New
Jersey, Texas and Washington Series and the total operating expenses of the
Minnesota Series would have been 0.81% (annualized).
7. This figure omits Rule 12b-1 fees because the Current Plan for this Series
was not, and the Proposed Plan for this Series would not have been, operative.
The Proposed Plan for this Series is to become operative on the first day of the
calendar quarter subsequent to such Series' net assets reaching $100 million.
If the shareholders approve the Proposed Plans, the Proposed Plans shall,
unless terminated as described below, become effective July 12, 1996 and
continue in effect until July 12, 1997 and from year to year thereafter only so
long as such continuance is specifically approved, at least annually, by the
Fund's Board of Directors and its Independent Directors by a vote cast in person
at a meeting called for the purpose of voting on such continuance.
Notwithstanding the foregoing, the Proposed Plans for the Minnesota and
Washington Series will not become operative until their respective Operative
Dates (as defined above). Each Proposed Plan may be terminated at any time by a
vote of a majority of the Independent Directors or by a shareholder vote in
compliance with Rule 12b-1 under the Act. The Plan may not be amended to
increase materially the amount to be spent for distribution above the maximum
amounts set forth in the Proposed Plans without a shareholder vote in compliance
with Rule 12b-1 under the Act. All material amendments must be approved by a
majority of the Independent Directors.
Each Proposed Plan provides that while it is in effect, the selection and
nomination of Independent Directors is committed to the discretion of the
Independent Directors then sitting on the board. This does not prevent the
involvement of others in such selection and nomination if the final decision on
any such selection or nomination is approved by a majority of the Independent
Directors.
Pursuant to Rule 12b-1 under the Act, approval of the Proposed Plan with
respect to any Series requires the affirmative vote of a "majority" (as defined
in
28
<PAGE>
the Act) of the voting securities of such Series. A "majority" vote for a
Series is defined in the Act as the vote of the holders of the lesser of: (i)
-
67% or more of the voting securities of such Series present or represented by
proxy at the shareholders meeting, if the holders of more than 50% of the
outstanding voting securities of such Series are present or represented by
proxy, or (ii) more than 50% of the outstanding voting securities of such
--
Series. The effect of an abstention or broker non-vote is the same as a vote
against this proposal.
If the Proposed Plan is not approved for one or more Series, the Current Plan
for each such Series will continue in effect according to its terms.
The Board of Directors recommends that shareholders of each Series vote in
favor of adoption of the Proposed Plan for such Series.
6. AMENDMENT OF THE ARTICLES OF INCORPORATION TO AUTHORIZE CLASSES OF EACH
SERIES OF SHARES AND TO CONFIRM THAT THE FUND MAY IMPOSE CONTINGENT DEFERRED
SALES CHARGES IN CONNECTION WITH REDEMPTIONS
On March 14, 1996, the Fund's Board of Directors unanimously voted to approve
an amendment to the Articles of Incorporation of the Fund to give the Fund's
Board of Directors the power to classify the Fund's shares into classes within
series, and voted to submit such amendment to the Fund's shareholders for
approval. The full text of the amendment is attached hereto as Exhibit C.
The Fund's Articles of Incorporation presently designate nine classes
(referred to herein as "Series") of shares of capital stock and do not authorize
the Board of Directors to create classes within Series. The Board of Directors
believes that the Fund's best interests will be served if the Board of Directors
is able to create classes of shares within Series, with each share of a Series,
regardless of class, sharing pro rata (based on net asset value) in the
portfolio and income of the Series and in the Series' expenses, except for
differences in expenses resulting from different Rule 12b-1 plans for the
various classes and possibly other class-specific expenses. It is expected that
implementation of such a multi-class fund structure will (i) enable investors in
-
a Series to choose the distribution option that best suits their individual
situations, (ii) facilitate distribution of the Fund's shares, and (iii)
-- ---
maintain the competitive position of the Fund in relation to other funds that
have implemented or are seeking to implement similar distribution arrangements.
The Board of Directors has approved for the National and New York Series,
subject to shareholder approval, two classes of shares which are to share in
such Series' portfolio but are to have different distribution arrangements.
29
<PAGE>
The existing class of shares of each such Series, to be designated the "Class A
Shares," will continue to be offered as described in the Fund's current
prospectus, except that the Board of Directors is recommending that shareholders
approve a new Distribution Plan and Agreement pursuant to Rule 12b-1 under the
Act that, if approved, will be applicable to the Class A Shares for such Series.
See Item 5 above.
The second class of shares of the National and New York Series, to be
designated the "Class C Shares," will be offered at net asset value without an
initial sales charge, but if redeemed for cash before the first anniversary of
purchase, will be subject to a CDRC, or contingent deferred reimbursement
charge, equal to 1% of the lower of their cost or then net asset value. The
Class C Shares are to be subject to a Rule 12b-1 plan that involves annual
distribution and service fee payments for the account of such class equal to 1%
of the average net asset value of the Class C shares. None of these charges
will be allocated to the Class A Shares.
It is expected that Class C Shares of the National and New York Series will
also be issued to shareholders of the Lord Abbett National Tax-Free Income Trust
(the "National Acquired Series"), and Lord Abbett New York Tax-Free Income Trust
(the "New York Acquired Series"), each a series of Lord Abbett Securities Trust
(the "Trust"), in connection with acquisitions by the National and New York
Series of the assets of the National Acquired Series and the New York Acquired
Series, respectively. These transactions, which are subject to certain
conditions, have been approved by the Board of Directors of the Fund, including
a majority of the Independent Directors, as in the best interests of the
shareholders of each of the National and New York Series and of the Fund.
Shareholders of the National and New York Series are not required to approve the
proposed transactions. As of March 22, 1996, the net assets of the National
Acquired Series and the National Series were approximately $44,088,290 and
$645,863,761, respectively, and the net assets of the New York Acquired Series
and the New York Series were approximately $8,696,792 and $324,888,997,
respectively.
If the proposed amendment to the Fund's Articles of Incorporation is approved,
the Board of Directors will be authorized to create and issue one or more
additional classes of shares within Series. Lord Abbett has advised the Board
of Directors of the Fund that, with respect to the National and New York Series,
it intends to propose to the board in the near future that the board authorize
such Series to issue a third class of shares, to be designated the "Class B
Shares" of such Series. If authorized, the Class B Shares are expected to be
sold without an initial sales charge and otherwise to be similar to the Class C
Shares except that (i) they will be subject to a contingent deferred sales
-
charge ("CDSC") that is payable to the distributor of such shares, rather than
subject to a contingent deferred reimbursement charge payable to the Fund as is
the case with the Class C Shares, (ii) the B Share
--
30
<PAGE>
CDSC will be substantially larger than the 1% CDRC charged on early redemptions
of Class C Shares, (iii) the B Share CDSC will apply over a period of time
---
substantially longer than the 12 months applicable to the C Share CDRC, and will
scale down to zero over that longer period, and (iv) the Class B Shares of a
--
Series will convert automatically into Class A Shares of such Series at net
asset value after a period of time.
The Board of Directors has created an additional series of the Fund, the
California Series, for the purpose of acquiring two other Lord Abbett-sponsored
funds. The California Series will issue Class A shares and Class C Shares, and
Lord Abbett has advised the board that it intends to propose that the California
Series also issue Class B Shares. The Board of Directors has determined that
these transactions are in the best interests of the shareholders of the Fund.
Even though the board has not approved at this time additional classes for the
Series other than National, New York and California, the existing class of each
such other series will be designated the "Class A Shares."
Shares of all classes will vote together on all matters affecting a Series or
the Fund, except for matters, such as approval of a Rule 12b-1 plan or a related
service plan, affecting only a particular class or classes. All shares voting
on a matter will have identical voting rights. All issued shares will be fully
paid and non-assessable, and shareholders will have no pre-emptive or other
right to subscribe to any additional shares. All shares within a series will
have the same rights and be subject to the same limitations set forth in the
Articles of Incorporation with respect to dividends, redemptions and liquidation
except for differences resulting from class-specific Rule 12b-1 plans and
related service plans and certain other class-specific expenses.
The proposed amendment to the Fund's Articles of Incorporation will also make
clear that the Fund may impose a CDSC and other charges (which charges may vary
within and among the classes) payable upon redemption as may be estab lished
from time to time by the Board of Directors of the Fund. The Fund's Articles of
Incorporation currently provide that the Fund may deduct a redemption charge not
exceeding 1% of the net asset value of the shares being redeemed. The proposed
amendment is deemed advisable in order to avoid any question as to whether the
proposed B Share CDSC referred to above, which in some instances may exceed 1%,
may be imposed in connection with the proposed issuance of the Class B Shares.
The Board of Directors has no intention of increasing the CDRC currently payable
or proposed to be payable on certain early redemptions of your Fund shares. See
Item 5 above.
31
<PAGE>
Approval of the proposed amendment to the Articles of Incorporation requires
an affirmative vote of more than 50% of the outstanding shares of the Fund.
The effect of an abstention or broker non-vote is the same as a vote against
this proposal.
The Board of Directors recommends that shareholders vote in favor of this
proposed amendment to the Articles of Incorporation.
7. OTHER INFORMATION
Management is not aware of any matters to come before the meeting other than
those set forth in the notice. If any such other matters do come before the
meeting, the individuals named as proxies will vote, act, and consent with
respect thereto in accordance with their best judgment.
a. Timeliness of Shareholder Proposals.
-----------------------------------
Any shareholder proposals to be presented for action at the Fund's next
shareholder meeting pursuant to the provisions of Rule 14a-8 under the
Securities Exchange Act of 1934, as amended, must be received at the Fund's
principal execu tive offices within a reasonable time in advance of the date
solicitation is made for such meeting. The Fund does not intend to hold another
annual or special meeting of shareholders unless required to do so by the Act.
b. Investment Adviser and Underwriter.
----------------------------------
Lord, Abbett & Co., 767 Fifth Avenue, New York, New York, 10153, acts as
investment adviser and principal underwriter with respect to the Fund.
c. Annual Report Available Upon Request.
------------------------------------
The Fund will furnish, without charge, a copy of the Fund's most recent annual
report and the most recent semi-annual report succeeding the annual report, if
any, to a shareholder upon request. A shareholder may obtain such report(s) by
writing to the Fund or by calling 800-874-3733.
d. Portfolio Transactions.
----------------------
Purchases and sales of portfolio securities usually will be principal
transactions and normally such securities will be purchased directly from the
issuer or from an underwriter or purchased from or sold to a market maker for
the securities. Therefore, the Fund usually will pay no brokerage commissions on
such transactions.
32
<PAGE>
Purchases from underwriters of portfolio securities will include a commission or
concession paid by the issuer to the underwriter and purchases from or sales to
dealers serving as market makers will include a dealer's markup or markdown.
Principal transactions, including riskless principal transactions, are not
afforded the protection of the safe harbor in Section 28(e) of the Securities
Exchange Act of 1934.
The Fund's policy is to obtain best execution on all portfolio trans actions,
which means that the Fund seeks to have purchases and sales of portfolio
securities executed at the most favorable prices, considering all costs of the
trans action including dealer markups and markdowns and any brokerage
commissions. This policy governs the selection of dealers and brokers and the
market in which the transaction is executed. To the extent permitted by law,
the Fund may, if considered advantageous, make a purchase from or sale to
another Lord Abbett-sponsored fund without the intervention of any broker-
dealer.
The Fund selects broker-dealers on the basis of their professional capability
and the value and quality of their brokerage and research services. Normally,
the selection is made by traders who are officers of the Fund and also are
employees of Lord Abbett. These traders do the trading as well for other
accounts --investment companies (of which they are also officers) and other
investment clients --managed by Lord Abbett. They are responsible for the
negotiation of prices and any commissions.
The Fund may pay a brokerage commission on the purchase or sale of a security
that could be purchased from or sold to a market maker if the Fund's net cost of
the purchase or the net proceeds to the Fund of the sale are at least as
favorable as the Fund could obtain on a direct purchase or sale. Brokers who
receive such commissions may also provide research services at least some of
which are useful to Lord Abbett in their overall responsibilities with respect
to the Fund and the other accounts they manage. Research includes trading
equipment and computer software packages, acquired from third-party suppliers,
that enable Lord Abbett to access various information bases and may include the
furnishing of analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and the performance of accounts.
Such services may be used by Lord Abbett in servicing all their accounts, and
not all of such services will neces sarily be used by Lord Abbett in connection
with their management of the Fund; conversely, such services furnished in
connection with brokerage on other accounts managed by Lord Abbett may be used
in connection with their management of the Fund, and not all of such services
will necessarily be used by Lord Abbett in con nection with their advisory
services to such other accounts. The Fund has been advised by Lord Abbett that
research services received from brokers cannot be allocated to any particular
account, are not a substitute for Lord Abbett's services but are supplemental to
their own research effort and, when utilized, are subject to
33
<PAGE>
internal analysis before being incorporated by Lord Abbett into their investment
process. As a practical matter, it would not be possible for Lord Abbett to
generate all of the information presently provided by brokers. While receipt of
research services from brokerage firms has not reduced Lord Abbett's normal
research activities, the expenses of Lord Abbett could be materially increased
if it purchased such equipment and software packages directly from the suppliers
and attempted to generate such additional information through its own staff. No
commitments are made regarding the allocation of brokerage business to or among
brokers and trades are executed only when they are dictated by investment
decisions of the Fund to purchase or sell portfolio securities.
If two or more broker-dealers are considered capable of offering the
equivalent likelihood of best execution, the broker-dealer who has sold the
Fund's shares and/or shares of other Lord Abbett-sponsored funds may be
preferred.
If other clients of Lord Abbett buy or sell the same security at the same time
as the Fund, transactions will, to the extent practicable, be allocated among
all participating accounts in proportion to the amount of each order and will be
executed daily until filled so that each account shares the average price and
com mission cost of each day. Other clients who direct that their brokerage
business be placed with specific brokers or who invest through wrap accounts
introduced to Lord Abbett by certain brokers may not participate with the Fund
in the buying and selling of the same securities as described above. If these
clients wish to buy or sell the same security as the Fund does, they may have
their transactions executed at times different from the Fund's transactions and
thus may not receive the same price or incur the same commission cost as the
Fund does.
The Fund will not seek "reciprocal" dealer business (for the purpose of
applying commissions in whole or in part for the Fund's benefit or otherwise)
from broker-dealers as consideration for the direction to them of portfolio
business.
For the fiscal years ended September 30, 1995, 1994 and 1993, the Fund paid no
commissions to independent broker-dealers.
LORD ABBETT TAX-FREE INCOME
FUND, INC.
Kenneth B. Cutler
Vice President and Secretary
34
<PAGE>
EXHIBIT A
COMPARISON OF CURRENT FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS AND
PROPOSED FUNDAMENTAL AND CERTAIN NON-FUNDAMENTAL INVESTMENT POLICIES AND
RESTRICTIONS
<TABLE>
<CAPTION>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
-------------------------- ---------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
SHORT SALES/MARGIN.
FUNDAMENTAL FUNDAMENTAL
Each Series may not sell short or buy on Each Series may purchase securities on
margin (good faith deposits made in margin to the extent permitted by applica-
connection with entering into options and ble law.
financial futures transactions are not deemed to
be margin), although it may obtain short-term NON-FUNDAMENTAL
credit necessary for the clearance of purchases Each Series may not make short sales of
of securities. securities or maintain a short position
except to the extent permitted by
applicable law.
- ----------------------------------------------------------------------------------------------------
BORROWING.
FUNDAMENTAL FUNDAMENTAL
Each Series may not borrow money except as Each Series may not borrow money,
a temporary measure for extraordinary or except that (i) each Series may borrow
emergency purposes and then not in excess of from banks (as defined in the Act) in
5% of its gross assets (at cost or market value, amounts up to 33 1/3% of its total assets
whichever is lower) at the time of borrowing. (including the amount borrowed),
(ii) each Series may borrow up to an
additional 5% of its total assets for
temporary purposes, and (iii) each Series
may obtain such short-term credit as may
be necessary for the clearance of
purchases and sales of portfolio
securities.
NON-FUNDAMENTAL
Each Series may not borrow in excess of
5% of its gross assets taken at cost or
market value, whichever is lower at the
time of borrowing, and then only as a
temporary measure for extraordinary or
emergency purposes.
- ----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
-------------------------- ---------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
UNDERWRITING.
FUNDAMENTAL FUNDAMENTAL
Each Series may not act as underwriter of Each Series may not engage in the under-
securities issued by others, except to the extent writing of securities, except pursuant to a
that in connection with the disposition of its merger or acquisition or to the extent
portfolio securities it may be deemed to be an that, in connection with the disposition of
underwriter under federal securities laws. its portfolio securities, it may be deemed
Notwithstanding the foregoing, in the future, to be an underwriter under federal securi-
upon shareholder approval, each of the Series ties laws.
may seek to achieve its investment objective
by investing all of its assets in another
investment company (or series or class thereof)
having the same investment objective.
Shareholders will be notified thirty days in
advance of such conversion.
- ----------------------------------------------------------------------------------------------------
LENDING.
FUNDAMENTAL FUNDAMENTAL
Each Series may not make loans, except for Each Series may not make loans to other
the purchase of debt securities in which it may persons, except that the acquisition of
invest consistent with its investment objective bonds, debentures or other corporate debt
and policies. securities and investment in government
obligations, commercial paper, pass-
through instruments, certificates of depos-
it, bankers acceptances, repurchase agree-
ments or any similar instruments shall not
be subject to this limitation, and except
further that each Series may lend its
portfolio securities, provided that the
lending of portfolio securities may be
made only in accordance with applicable
law.
- ----------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
-------------------------- ---------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
REAL ESTATE/COMMODITIES.
FUNDAMENTAL FUNDAMENTAL
Each Series may not buy or sell real estate, Each Series may not buy or sell real
including real estate mortgages in the ordinary estate (except that each Series may invest
course of its business, except that it may invest in securities directly or indirectly secured
in marketable securities secured by real estate by real estate or interests therein or
or interests therein. Each Series may not buy issued by companies which invest in real
or sell oil, gas, or other mineral leases, estate or interests therein) or commodities
commodities or commodity contracts (for this or commodity contracts (except to the
purpose options and financial futures contracts extent each Series may do so in
are not deemed to be commodities or accordance with applicable law and
commodity contracts). without registering as a commodity pool
operator under the Commodity Exchange
Act as, for example, with futures
contracts).
NON-FUNDAMENTAL
Each Series may not invest in real estate
limited partnership interests or interests
in oil, gas or other mineral leases, or
exploration or other development
programs, except that each Series may
invest in securities issued by companies
that engage in oil, gas or other mineral
exploration or development activities.
- ----------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
-------------------------- ---------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
DIVERSIFICATION.
FUNDAMENTAL FUNDAMENTAL
The National Series may not buy securities if With respect to 75% of its gross assets,
the purchase would cause the Series to have the National Series may not buy securities
more than 5% of its gross assets, at market of one issuer representing more than
value at the time of purchase, invested in the (i) 5% of such Series' gross assets,
securities of any one issuer, except securities except securities issued or guaranteed by
issued or guaranteed by the U.S. Government, the U.S. Government, its agencies or
its agencies or instrumentalities. Each Series instrumentalities, or (ii) 10% of the
may not buy voting securities if the purchase voting securities of such issuer.
would then cause it to own more than 10% of
the voting securities of any issuer. NON-FUNDAMENTAL
Notwithstanding the foregoing, in the future, With respect to each Series other than the
upon shareholder approval, each of the Series National Series, there is no fundamental
may seek to achieve its investment objective policy or restriction (but the Series will
by investing all of its assets in another be required to meet the diversification
investment company (or series or class thereof) rules under Subchapter M of the Internal
having the same investment objective. Revenue Code).
Shareholders will be notified thirty days in
advance of such conversion.
- ----------------------------------------------------------------------------------------------------
INVESTMENT IN A SINGLE INDUSTRY.
FUNDAMENTAL
Each Series may not invest more than 25% of FUNDAMENTAL
its gross assets taken at market value in any Each Series may not invest more than
one industry (except that each Series may 25% of its assets, taken at market value,
invest more than 25% of such gross assets in in the securities of issuers in any
tax-exempt securities). Notwithstanding the particular industry (excluding tax-exempt
foregoing, in the future, upon shareholder securities, such as tax-exempt securities
approval, each of the Series may seek to financing facilities in the same industry
achieve its investment objective by investing or issued by nongovernmental users and
all of its assets in another investment company securities of the U.S. Government, its
(or series or class thereof) having the same agencies and instrumentalities).
investment objective. Shareholders will be
notified thirty days in advance of such
conversion.
- ----------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
-------------------------- ---------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
RESTRICTED/ILLIQUID SECURITIES.
FUNDAMENTAL
Each Series may not invest knowingly more NON-FUNDAMENTAL
than 10% of its net assets in illiquid securities Each Series may not invest knowingly
(securities qualifying for resale under Rule more than 15% of its net assets (at the
144A that are determined by the Board of time of investment) in illiquid securities,
Directors, or by Lord Abbett under the except for securities qualifying for resale
board's delegation, to be liquid are considered under Rule 144A of the Securities Act of
liquid securities). 1933, deemed to be liquid by the Board
of Directors.
- ----------------------------------------------------------------------------------------------------
MORTGAGING AND PLEDGING OF
ASSETS.
FUNDAMENTAL FUNDAMENTAL
Each Series may not pledge, mortgage or Each Series may not pledge its assets
hypothecate its assets except to secure (other than to secure borrowings, or to
permitted borrowings (neither a deposit the extent permitted by each Series'
required to enter into or to maintain municipal investment policies, as permitted by
bond index futures contracts nor an allocation applicable law).
or segregation of portfolio assets to
collateralize a position in such options or
futures contracts is deemed to be a pledge,
mortgage or hypothecation).
- ----------------------------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES OF
OTHER INVESTMENT COMPANIES.
FUNDAMENTAL NON-FUNDAMENTAL
Each Series may not buy securities issued by Each Series may not invest in the
any other open-end investment company except securities of other investment companies,
pursuant to a merger, acquisition or except as permitted by applicable law.
consolidation. Notwithstanding the foregoing,
in the future, upon shareholder approval, each
of the Series may seek to achieve its
investment objective by investing all of its
assets in another investment company (or
series or class thereof) having the same
investment objective. Shareholders will be
notified thirty days in advance of such
conversion.
- ----------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
-------------------------- ---------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
OPTIONS
FUNDAMENTAL NON-FUNDAMENTAL
Each Series may not buy or sell put, call, Each Series may not write, purchase or
straddle or spread options, although it may sell puts, calls, straddles, spreads or
buy, hold or sell options and financial futures. combinations thereof, except to the extent
permitted in the Fund's prospectus and
NON-FUNDAMENTAL statement of additional information, as
Each Series may not buy or sell puts or calls they may be amended from time to time.
except that each Series may write covered
calls.
- ----------------------------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES OF
ISSUERS IN OPERATION FOR LESS
THAN THREE YEARS.
No policy/restriction stated. NON-FUNDAMENTAL
Each Series may not invest in securities
of issuers which, with their predecessors,
have a record of less than three years
continuous operations, if more than 5%
of such Series' total assets would be
invested in such securities (this restriction
shall not apply to mortgage-backed
securities, asset-backed securities or
obligations issued or guaranteed by the
U.S. Government, its agencies or
instrumentalities).
- ----------------------------------------------------------------------------------------------------
OWNERSHIP OF PORTFOLIO SE-
CURITIES BY OFFICERS AND
DIRECTORS.
FUNDAMENTAL NON-FUNDAMENTAL
Each Series may not own securities of an Each Series may not hold securities of
issuer if, to the knowledge of the Fund, Fund any issuer if more than 1/2 of 1% of the
officers and directors or partners of the Fund's securities of such issuer are owned
investment adviser, who beneficially own more beneficially by one or more officers or
than 1/2 of 1% of the securities of that issuer, directors of the Fund or by one or more
together own more than 5% of such securities. partners or members of the underwriter
or investment advisor if these owners in
the aggregate own beneficially more than
5% of the securities of such issuer.
- ----------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
CURRENT POLICY/RESTRICTION PROPOSED POLICY/RESTRICTION
-------------------------- ---------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
TRANSACTIONS WITH CERTAIN
PERSONS.
FUNDAMENTAL
Each Series may not buy securities from or NON-FUNDAMENTAL
sell them to the Fund's officers, directors or Each Series may not buy from or sell to
employees, or to the Fund's investment adviser any of its officers, directors, employees,
or to its partners and employees, other than or its investment adviser or any of its
capital stock of the Series. officers, directors, partners or employees,
any securities other than shares of each
Series' common stock.
- ----------------------------------------------------------------------------------------------------
SENIOR SECURITIES.
FUNDAMENTAL FUNDAMENTAL
Each Series may not issue senior securities as Each Series may not issue senior se-
defined in the Act of (neither a purchase or curities to the extent such issuance would
sale of options nor a collateral arrangement violate applicable law.
with respect to either financial futures or the
writing of options is deemed to be the issuance
of a senior security).
- ----------------------------------------------------------------------------------------------------
PURCHASE OF WARRANTS.
NON-FUNDAMENTAL NON-FUNDAMENTAL
Pursuant to state law, each Series will not Each Series may not invest in warrants if,
invest more than 5% of its assets in warrants at the time of the acquisition, its
and not more than 2% in warrants not listed investment in warrants, valued at the
on the New York or American Stock lower of cost or market, would exceed
Exchange, except when they form a unit with 5% of such Series' total assets (included
other securities. As a matter of operating within such limitation, but not to exceed
policy, no Series will invest more than 5% of 2% of such Series' total assets, are
its assets in rights. warrants which are not listed on the New
York or American Stock Exchange or a
major foreign exchange).
- ----------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
EXHIBIT B-1
NATIONAL SERIES
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Tax-Free Income Fund, Inc. -- National Series -- Class A Shares
- ---------------------------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 12, 1996 by and
between LORD ABBETT TAX-FREE INCOME FUND, INC., a Maryland corporation (the
"Fund"), on behalf of its NATIONAL SERIES (the "Series"), and LORD ABBETT
DISTRIBUTOR LLC, a New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's shares of capital
stock, including the Series' Class A shares (the "Shares") pursuant to the
Distribution Agreement between the Fund and the Distributor, dated as of the
date hereof (the "Distribution Agreement").
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") for the Series with the Distributor, as permitted by Rule 12b-1 under
the Act, pursuant to which the Series may make certain payments to the
Distributor to be used by the Distributor or paid to institutions and persons
permitted by applicable law and/or rules to receive such payments ("Authorized
Institutions") in connection with sales of Shares and/or servicing of accounts
of shareholders holding Shares.
WHEREAS, the Fund's Board of Directors has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good and
valuable consideration, receipt of which is hereby acknowledged, it is agreed as
follows:
1. The Fund hereby authorizes the Distributor to enter into agree ments with
Authorized Institutions (the "Agreements") which may provide for the payment to
such Authorized Institutions of distribution and service fees which the
Distributor receives from the Series in order to provide additional incentives
to such Authorized Institutions (i) to sell Shares and (ii) to provide
- --
continuing information and investment services to their accounts holding Shares
and otherwise to encourage their accounts to remain invested in the Shares.
<PAGE>
2. The Fund also hereby authorizes the Distributor to use payments received
hereunder from the Series in order to (a) finance any activity which is
-
primarily intended to result in the sale of Shares and (b) provide continuing
-
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the Shares;
provided that (i) any payments referred to in the foregoing clause (a) shall not
- -------- -
exceed the distribution fee permitted to be paid at the time under paragraph 3
of this Plan and shall be authorized by the Board of Directors of the Fund by a
vote of the kind referred to in paragraph 10 of this Plan and (ii) any payments
--
referred to in clause (b) shall not exceed the service fee permitted to be paid
at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for remittance
to Authorized Institutions and/or use by the Distributor pursuant to this Plan
(a) service fees and (b) distribution fees, each at an annual rate not to exceed
- - -
.25 of 1% of the average annual net asset value of Shares outstanding, except
that service fees payable with respect to Shares that were initially issued, or
are attributable to shares that were initially issued, by the Fund or a
predecessor fund prior to June 1, 1990 shall not exceed .15 of 1% of the average
net asset value of such Shares. The Board of Directors of the Fund shall from
time to time determine the amounts, within the foregoing maximum amounts, that
the Series may pay the Distributor hereunder. Any such fees (which may be waived
by the Authorized Institutions in whole or in part) may be calculated and paid
quarterly or more frequently if approved by the Board of Directors of the Fund.
Such determinations and approvals by the Board of Directors shall be made and
given by votes of the kind referred to in paragraph 10 of this Plan. Payments
by holders of Shares to the Series of contingent deferred reim bursement charges
relating to distribution fees paid by the Series hereunder shall reduce the
amount of distribution fees for purposes of the annual 0.25% distribution fee
limit. The Distributor will monitor the payments hereunder and shall reduce
such payments or take such other steps as may be necessary to assure that (i)
-
the payments pursuant to this Plan shall be consistent with Article III, Section
26, subparagraphs (d)(2) and (5) of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. with respect to investment companies
with asset-based sales charges and service fees, as the same may be in effect
from time to time and (ii) the Series shall not pay with respect to any
--
Authorized Institution service fees equal to more than .25 of 1% of the average
annual net asset value of Shares sold by (or attributable to Shares or shares
sold by) such Authorized Institution and held in an account covered by an
Agreement.
2
<PAGE>
4. The net asset value of the Shares shall be determined as provided in the
Articles of Incorporation of the Fund. If the Distributor waives all or a
portion of the fees which are to be paid by the Series hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Series pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Chief Financial Officer,
is hereby authorized to direct the disposition of monies paid or payable by the
Series hereunder and shall provide to the Fund's Board of Directors, and the
directors shall review at least quarterly, a written report of the amounts so
expended pursuant to this Plan and the purposes for which such expenditures were
made.
6. Neither this Plan nor any other transaction between the parties hereto
pursuant to this Plan shall be invalidated or in any way affected by the fact
that any or all of the directors, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as may
otherwise be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's best
judgment and good faith efforts in rendering services under this Plan. Other
than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund, the Series or any of the shareholders,
creditors, directors, or officers of the Fund; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Fund or the Series' shareholders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or by reason of the
reckless disregard of its obligations and duties hereunder.
8. This Plan shall become effective upon the date hereof, and shall continue
in effect for a period of more than one year from that date only so long as such
continuance is specifically approved at least annually by a vote of the Board of
Directors of the Fund, including the vote of a majority of the directors who are
not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
renewal.
3
<PAGE>
9. This Plan may not be amended to increase materially the amount to be spent
by the Series hereunder above the maximum amounts referred to in paragraph 3 of
this Plan without a shareholder vote in compliance with Rule 12b-1
and Rule 18f-3 under the Act as in effect at such time, and each material
amendment must be approved by a vote of the Board of Directors of the Fund,
including the vote of a majority of the directors who are not "interested
persons" of the Fund and who have no direct or indirect financial interest in
the operation of this Plan or in any agreement related to this Plan, cast in
person at a meeting called for the purpose of voting on such amendment.
Amendments to this Plan which do not increase materially the amount to be spent
by the Series hereunder above the maximum amounts referred to in paragraph 3 of
this Plan may be made pursuant to paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Directors of the Fund, including the vote of a majority of the directors who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Directors of the Fund may, by such a vote, interpret
this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the directors of the Fund who are not
-
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
-
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and nomination
of those directors of the Fund who are not "interested persons" of the Fund are
committed to the discretion of such disinterested directors. The terms
"interested persons," "assignment" and "vote of a majority of the outstanding
voting securities" shall have the same meanings as those terms are defined in
the Act.
4
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on its behalf by its duly authorized representative as
of the date first above written.
LORD ABBETT TAX-FREE INCOME FUND, INC.
By: _____________________________
President
ATTEST:
___________________________
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By: _____________________________
5
<PAGE>
EXHIBIT B-2
CONNECTICUT SERIES
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Tax-Free Income Fund, Inc. -- Connecticut Series -- Class A Shares
- ------------------------------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 12, 1996 by and
between LORD ABBETT TAX-FREE INCOME FUND, INC., a Maryland corporation (the
"Fund"), on behalf of its CONNECTICUT SERIES (the "Series"), and LORD ABBETT
DISTRIBUTOR LLC, a New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's shares of capital
stock, including the Series' Class A shares (the "Shares") pursuant to the
Distribution Agreement between the Fund and the Distributor, dated as of the
date hereof (the "Distribution Agreement").
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") for the Series with the Distributor, as permitted by Rule 12b-1 under
the Act, pursuant to which the Series may make certain payments to the
Distributor to be used by the Distributor or paid to institutions and persons
permitted by applicable law and/or rules to receive such payments ("Authorized
Institutions") in connection with sales of Shares and/or servicing of accounts
of shareholders holding Shares.
WHEREAS, the Fund's Board of Directors has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agree ments
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
<PAGE>
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Series in order to (a) finance any activity which is
-
primarily intended to result in the sale of Shares and (b) provide continuing
-
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the Shares;
provided that (i) any payments referred to in the foregoing clause (a) shall not
- -------- -
exceed the distribution fee permitted to be paid at the time under paragraph 3
of this Plan and shall be authorized by the Board of Directors of the Fund by a
vote of the kind referred to in paragraph 10 of this Plan and (ii) any payments
--
referred to in clause (b) shall not exceed the service fee permitted to be paid
at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for
remittance to Authorized Institutions and/or use by the Distributor pursuant to
this Plan (a) service fees and (b) distribution fees, each at an annual rate not
- -
to exceed .25 of 1% of the average annual net asset value of Shares outstanding.
The Board of Directors of the Fund shall from time to time determine the
amounts, within the foregoing maximum amounts, that the Series may pay the
Distributor hereunder. Any such fees (which may be waived by the Authorized
Institutions in whole or in part) may be calculated and paid quarterly or more
frequently if approved by the Board of Directors of the Fund. Such
determinations and approvals by the Board of Directors shall be made and given
by votes of the kind referred to in paragraph 10 of this Plan. Payments by
holders of Shares to the Series of contingent deferred reimbursement charges
relating to distribution fees paid by the Series hereunder shall reduce the
amount of distribution fees for purposes of the annual 0.25% distribution fee
limit. The Distributor will monitor the payments hereunder and shall reduce such
payments or take such other steps as may be necessary to assure that (i) the
-
payments pursuant to this Plan shall be consistent with Article III, Section 26,
subparagraphs (d)(2) and (5) of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. with respect to investment companies
with asset-based sales charges and service fees, as the same may be in effect
from time to time and (ii) the Series shall not pay with respect to any
--
Authorized Institution service fees equal to more than .25 of 1% of the average
annual net asset value of Shares sold by (or attributable to Shares or shares
sold by) such Authorized Institution and held in an account covered by an
Agreement.
4. The net asset value of the Shares shall be determined as provided in
the Articles of Incorporation of the Fund. If the Distributor waives all or a
portion of the fees which are to be paid by the Series hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Series pay such fees in the future.
2
<PAGE>
5. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Series hereunder and shall provide to the Fund's Board of
Directors, and the directors shall review at least quarterly, a written report
of the amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
6. Neither this Plan nor any other transaction between the parties hereto
pursuant to this Plan shall be invalidated or in any way affected by the fact
that any or all of the directors, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as may
otherwise be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's
best judgment and good faith efforts in rendering services under this Plan.
Other than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund, the Series or any of the shareholders,
creditors, directors, or officers of the Fund; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Fund or the Series' shareholders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or by reason of the
reckless disregard of its obligations and duties hereunder.
8. This Plan shall become effective upon the date hereof and shall continue
in effect for a period of more than one year from that date only so long as such
continuance is specifically approved at least annually by a vote of the Board of
Directors of the Fund, including the vote of a majority of the directors who are
not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
renewal.
9. This Plan may not be amended to increase materially the amount to be
spent by the Series hereunder above the maximum amounts referred to in paragraph
3 of this Plan without a shareholder vote in compliance with Rule 12b-1 and Rule
18f-3 under the Act as in effect at such time, and each material amendment must
be approved by a vote of the Board of Directors of the Fund, including the vote
of a majority of the directors who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of this Plan
or in any
3
<PAGE>
agreement related to this Plan, cast in person at a meeting called for the
purpose of voting on such amendment. Amendments to this Plan which do not
increase materially the amount to be spent by the Series hereunder above the
maximum amounts referred to in paragraph 3 of this Plan may be made pursuant to
paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Directors of the Fund, including the vote of a majority of the directors who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Directors of the Fund may, by such a vote, interpret
this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the directors of the Fund who are not
-
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
-
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such disinterested directors. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meanings as those terms are
defined in the Act.
4
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this in strument to be
executed in its name and on its behalf by its duly authorized repre sentative as
of the date first above written.
LORD ABBETT TAX-FREE INCOME FUND, INC.
By: _____________________________
President
ATTEST:
___________________________
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By: _____________________________
5
<PAGE>
EXHIBIT B-3
HAWAII SERIES
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Tax-Free Income Fund, Inc. -- Hawaii Series -- Class A Shares
- -------------------------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 12, 1996 by and
between LORD ABBETT TAX-FREE INCOME FUND, INC., a Maryland corporation (the
"Fund"), on behalf of its HAWAII SERIES (the "Series"), and LORD ABBETT
DISTRIBUTOR LLC, a New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's shares of capital
stock, including the Series' Class A shares (the "Shares") pursuant to the
Distribution Agreement between the Fund and the Distributor, dated as of the
date hereof (the "Distribution Agreement").
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") for the Series with the Distributor, as permitted by Rule 12b-1 under
the Act, pursuant to which the Series may make certain payments to the
Distributor to be used by the Distributor or paid to institutions and persons
permitted by applicable law and/or rules to receive such payments ("Authorized
Institutions") in connection with sales of Shares and/or servicing of accounts
of shareholders holding Shares.
WHEREAS, the Fund's Board of Directors has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agree ments
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
<PAGE>
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Series in order to (a) finance any activity which is
-
primarily intended to result in the sale of Shares and (b) provide continuing
-
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the Shares;
provided that (i) any payments referred to in the foregoing clause (a) shall not
- -------- -
exceed the distribution fee permitted to be paid at the time under paragraph 3
of this Plan and shall be authorized by the Board of Directors of the Fund by a
vote of the kind referred to in paragraph 10 of this Plan and (ii) any payments
--
referred to in clause (b) shall not exceed the service fee permitted to be paid
at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for
remittance to Authorized Institutions and/or use by the Distributor pursuant to
this Plan (a) service fees and (b) distribution fees, each at an annual rate not
- -
to exceed .25 of 1% of the average annual net asset value of Shares outstanding,
except that service fees payable with respect to Shares that were initially
issued, or are attributable to shares that were initially issued by the Fund, or
a predecessor fund prior to January 1, 1993 shall not exceed .15 of 1% of the
average net asset value of such Shares. The Board of Directors of the Fund shall
from time to time determine the amounts, within the foregoing maximum amounts,
that the Series may pay the Distributor hereunder. Any such fees (which may be
waived by the Authorized Institutions in whole or in part) may be calculated and
paid quarterly or more frequently if approved by the Board of Directors of the
Fund. Such determinations and approvals by the Board of Directors shall be made
and given by votes of the kind referred to in paragraph 10 of this Plan.
Payments by holders of Shares to the Series of contingent deferred reimbursement
charges relating to distribution fees paid by the Series hereunder shall reduce
the amount of distribution fees for purposes of the annual 0.25% distribution
fee limit. The Distributor will monitor the payments hereunder and shall reduce
such payments or take such other steps as may be necessary to assure that (i)
-
the payments pursuant to this Plan shall be consistent with Article III, Section
26, subparagraphs (d)(2) and (5) of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. with respect to investment companies
with asset-based sales charges and service fees, as the same may be in effect
from time to time and (ii) the Series shall not pay with respect to any
--
Authorized Institution service fees equal to more than .25 of 1% of the average
annual net asset value of Shares sold by (or attributable to Shares or shares
sold by) such Authorized Institution and held in an account covered by an
Agreement.
4. The net asset value of the Shares shall be determined as provided in
the Articles of Incorporation of the Fund. If the Distributor waives all or a
portion
2
<PAGE>
of the fees which are to be paid by the Series hereunder, the Distributor shall
not be deemed to have waived its rights under this Agreement to have the Series
pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Series hereunder and shall provide to the Fund's Board of
Directors, and the directors shall review at least quarterly, a written report
of the amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
6. Neither this Plan nor any other transaction between the parties hereto
pursuant to this Plan shall be invalidated or in any way affected by the fact
that any or all of the directors, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as may
otherwise be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's
best judgment and good faith efforts in rendering services under this Plan.
Other than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund, the Series or any of the shareholders,
creditors, directors, or officers of the Fund; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Fund or the Series' shareholders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or by reason of the
reckless disregard of its obligations and duties hereunder.
8. This Plan shall become effective upon the date hereof and shall continue
in effect for a period of more than one year from that date only so long as such
continuance is specifically approved at least annually by a vote of the Board of
Directors of the Fund, including the vote of a majority of the directors who are
not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
renewal.
9. This Plan may not be amended to increase materially the amount to be
spent by the Series hereunder above the maximum amounts referred to in paragraph
3 of this Plan without a shareholder vote in compliance with Rule 12b-1
3
<PAGE>
and Rule 18f-3 under the Act as in effect at such time, and each material
amendment must be approved by a vote of the Board of Directors of the Fund,
including the vote of a majority of the directors who are not "interested
persons" of the Fund and who have no direct or indirect financial interest in
the operation of this Plan or in any agreement related to this Plan, cast in
person at a meeting called for the purpose of voting on such amendment.
Amendments to this Plan which do not increase materially the amount to be spent
by the Series hereunder above the maximum amounts referred to in paragraph 3 of
this Plan may be made pursuant to paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Directors of the Fund, including the vote of a majority of the directors who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Directors of the Fund may, by such a vote, interpret
this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the directors of the Fund who are not
-
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
-
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such disinterested directors. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meanings as those terms are
defined in the Act.
4
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on its behalf by its duly authorized representative as
of the date first above written.
LORD ABBETT TAX-FREE INCOME FUND, INC.
By: _____________________________
President
ATTEST:
___________________________
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By: _____________________________
5
<PAGE>
EXHIBIT B-4
MINNESOTA SERIES
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Tax-Free Income Fund, Inc. -- Minnesota Series -- Class A Shares
- ----------------------------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 12, 1996 by and
between LORD ABBETT TAX-FREE INCOME FUND, INC., a Maryland corporation (the
"Fund"), on behalf of its MINNESOTA SERIES (the "Series"), and LORD ABBETT
DISTRIBUTOR LLC, a New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's shares of capital
stock, including the Series' Class A shares (the "Shares") pursuant to the
Distribution Agreement between the Fund and the Distributor, dated as of the
date hereof (the "Distribution Agreement").
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") for the Series with the Distributor, as permitted by Rule 12b-1 under
the Act, pursuant to which the Series may make certain payments to the
Distributor to be used by the Distributor or paid to institutions and persons
permitted by applicable law and/or rules to receive such payments ("Authorized
Institutions") in connection with sales of Shares and/or servicing of accounts
of shareholders holding Shares.
WHEREAS, the Fund's Board of Directors has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, and subject
to the provisions of paragraph 8 of this Plan, it is agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agree ments
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
<PAGE>
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Series in order to (a) finance any activity which is
-
primarily intended to result in the sale of Shares and (b) provide continuing
-
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the Shares;
provided that (i) any payments referred to in the foregoing clause (a) shall not
- -------- -
exceed the distribution fee permitted to be paid at the time under paragraph 3
of this Plan and shall be authorized by the Board of Directors of the Fund by a
vote of the kind referred to in paragraph 10 of this Plan and (ii) any payments
--
referred to in clause (b) shall not exceed the service fee permitted to be paid
at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for
remittance to Authorized Institutions and/or use by the Distributor pursuant to
this Plan (a) service fees and (b) distribution fees, each at an annual rate not
- -
to exceed .25 of 1% of the average annual net asset value of Shares outstanding,
except that service fees payable with respect to Shares that were initially
issued, or are attributable to shares that were initially issued, by the Fund or
a predecessor fund prior to the first day of the calendar quarter subsequent to
the Series' net assets reaching $100 million shall not exceed .15 of 1% of the
average net asset value of such Shares. The Board of Directors of the Fund
shall from time to time determine the amounts, within the foregoing maximum
amounts, that the Series may pay the Distributor hereunder. Any such fees
(which may be waived by the Authorized Institutions in whole or in part) may be
calculated and paid quarterly or more frequently if approved by the Board of
Directors of the Fund. Such determinations and approvals by the Board of
Directors shall be made and given by votes of the kind referred to in paragraph
10 of this Plan. Payments by holders of Shares to the Series of contingent
deferred reimbursement charges relating to distribution fees paid by the Series
hereunder shall reduce the amount of distribution fees for purposes of the
annual 0.25% distribution fee limit. The Distributor will monitor the payments
hereunder and shall reduce such payments or take such other steps as may be
necessary to assure that (i) the payments pursuant to this Plan shall be
-
consistent with Article III, Section 26, subparagraphs (d)(2) and (5) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
with respect to investment companies with asset-based sales charges and service
fees, as the same may be in effect from time to time and (ii) the Series shall
--
not pay with respect to any Authorized Institution service fees equal to more
than .25 of 1% of the average annual net asset value of Shares sold by (or
attributable to Shares or shares sold by) such Authorized Institution and held
in an account covered by an Agreement.
2
<PAGE>
4. The net asset value of the Shares shall be determined as provided in
the Articles of Incorporation of the Fund. If the Distributor waives all or a
portion of the fees which are to be paid by the Series hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Series pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Series hereunder and shall provide to the Fund's Board of
Directors, and the directors shall review at least quarterly, a written report
of the amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
6. Neither this Plan nor any other transaction between the parties hereto
pursuant to this Plan shall be invalidated or in any way affected by the fact
that any or all of the directors, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as may
otherwise be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's
best judgment and good faith efforts in rendering services under this Plan.
Other than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund, the Series or any of the shareholders,
creditors, directors, or officers of the Fund; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Fund or the Series' shareholders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or by reason of the
reckless disregard of its obligations and duties hereunder.
8. This Plan shall become effective upon the date hereof and shall continue
in effect for a period of more than one year from that date only so long as such
continuance is specifically approved at least annually by a vote of the Board of
Directors of the Fund, including the vote of a majority of the directors who are
not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
renewal. Notwithstanding the foregoing, no payments may be made by the Series
hereunder
3
<PAGE>
prior to or with respect to any period prior to the first day of the calendar
quarter subsequent to the Series' net assets reaching $100 million.
9. This Plan may not be amended to increase materially the amount to be
spent by the Series hereunder above the maximum amounts referred to in paragraph
3 of this Plan without a shareholder vote in compliance with Rule 12b-1 and Rule
18f-3 under the Act as in effect at such time, and each material amendment must
be approved by a vote of the Board of Directors of the Fund, including the vote
of a majority of the directors who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreement related to this Plan, cast in person at a meeting called for
the purpose of voting on such amendment. Amendments to this Plan which do not
increase materially the amount to be spent by the Series hereunder above the
maximum amounts referred to in paragraph 3 of this Plan may be made pursuant to
paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Directors of the Fund, including the vote of a majority of the directors who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Directors of the Fund may, by such a vote, interpret
this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the directors of the Fund who are not
-
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
-
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such disinterested directors. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meanings as those terms are
defined in the Act.
4
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on its behalf by its duly authorized representative as
of the date first above written.
LORD ABBETT TAX-FREE INCOME FUND, INC.
By: _____________________________
President
ATTEST:
___________________________
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By: _____________________________
5
<PAGE>
EXHIBIT B-5
MISSORI SERIES
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Tax-Free Income Fund, Inc. -- Missouri Series -- Class A Shares
- ---------------------------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 12, 1996 by and
between LORD ABBETT TAX-FREE INCOME FUND, INC., a Maryland corporation (the
"Fund"), on behalf of its MISSOURI SERIES (the "Series"), and LORD ABBETT
DISTRIBUTOR LLC, a New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's shares of capital
stock, including the Series' Class A shares (the "Shares") pursuant to the
Distribution Agreement between the Fund and the Distributor, dated as of the
date hereof (the "Distribution Agreement").
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") for the Series with the Distributor, as permitted by Rule 12b-1 under
the Act, pursuant to which the Series may make certain payments to the
Distributor to be used by the Distributor or paid to institutions and persons
permitted by applicable law and/or rules to receive such payments ("Authorized
Institutions") in connection with sales of Shares and/or servicing of accounts
of shareholders holding Shares.
WHEREAS, the Fund's Board of Directors has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agree ments
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
<PAGE>
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Series in order to (a) finance any activity which is
-
primarily intended to result in the sale of Shares and (b) provide continuing
-
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the Shares;
provided that (i) any payments referred to in the foregoing clause (a) shall not
- -------- -
exceed the distribution fee permitted to be paid at the time under paragraph 3
of this Plan and shall be authorized by the Board of Directors of the Fund by a
vote of the kind referred to in paragraph 10 of this Plan and (ii) any payments
--
referred to in clause (b) shall not exceed the service fee permitted to be paid
at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for
remittance to Authorized Institutions and/or use by the Distributor pursuant to
this Plan (a) service fees and (b) distribution fees, each at an annual rate not
- -
to exceed .25 of 1% of the average annual net asset value of Shares outstanding.
The Board of Directors of the Fund shall from time to time determine the
amounts, within the foregoing maximum amounts, that the Series may pay the
Distributor hereunder. Any such fees (which may be waived by the Authorized
Institutions in whole or in part) may be calculated and paid quarterly or more
frequently if approved by the Board of Directors of the Fund. Such
determinations and approvals by the Board of Directors shall be made and given
by votes of the kind referred to in paragraph 10 of this Plan. Payments by
holders of Shares to the Series of contingent deferred reimbursement charges
relating to distribution fees paid by the Series hereunder shall reduce the
amount of distribution fees for purposes of the annual 0.25% distribution fee
limit. The Distributor will monitor the payments hereunder and shall reduce such
payments or take such other steps as may be necessary to assure that (i) the
-
payments pursuant to this Plan shall be consistent with Article III, Section 26,
subparagraphs (d)(2) and (5) of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. with respect to investment companies
with asset-based sales charges and service fees, as the same may be in effect
from time to time and (ii) the Series shall not pay with respect to any
--
Authorized Institution service fees equal to more than .25 of 1% of the average
annual net asset value of Shares sold by (or attributable to Shares or shares
sold by) such Authorized Institution and held in an account covered by an
Agreement.
4. The net asset value of the Shares shall be determined as provided in
the Articles of Incorporation of the Fund. If the Distributor waives all or a
portion of the fees which are to be paid by the Series hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Series pay such fees in the future.
2
<PAGE>
5. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Series hereunder and shall provide to the Fund's Board of
Directors, and the directors shall review at least quarterly, a written report
of the amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
6. Neither this Plan nor any other transaction between the parties hereto
pursuant to this Plan shall be invalidated or in any way affected by the fact
that any or all of the directors, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as may
otherwise be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's
best judgment and good faith efforts in rendering services under this Plan.
Other than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund, the Series or any of the shareholders,
creditors, directors, or officers of the Fund; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Fund or the Series' shareholders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or by reason of the
reckless disregard of its obligations and duties hereunder.
8. This Plan shall become effective upon the date hereof and shall continue
in effect for a period of more than one year from that date only so long as such
continuance is specifically approved at least annually by a vote of the Board of
Directors of the Fund, including the vote of a majority of the directors who are
not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
renewal.
9. This Plan may not be amended to increase materially the amount to be
spent by the Series hereunder above the maximum amounts referred to in paragraph
3 of this Plan without a shareholder vote in compliance with Rule 12b-1 and Rule
18f-3 under the Act as in effect at such time, and each material amendment must
be approved by a vote of the Board of Directors of the Fund, including the vote
of a majority of the directors who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of this Plan
or in any
3
<PAGE>
agreement related to this Plan, cast in person at a meeting called for the
purpose of voting on such amendment. Amendments to this Plan which do not
increase materially the amount to be spent by the Series hereunder above the
maximum amounts referred to in paragraph 3 of this Plan may be made pursuant to
paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Directors of the Fund, including the vote of a majority of the directors who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Directors of the Fund may, by such a vote, interpret
this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the directors of the Fund who are not
-
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
-
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such disinterested directors. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meanings as those terms are
defined in the Act.
4
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on its behalf by its duly authorized representative as
of the date first above written.
LORD ABBETT TAX-FREE INCOME FUND, INC.
By: _____________________________
President
ATTEST:
___________________________
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By: _____________________________
5
<PAGE>
EXHIBIT B-6
NEW JERSEY SERIES
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Tax-Free Income Fund, Inc. -- New Jersey Series -- Class A Shares
- -----------------------------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 12, 1996 by and
between LORD ABBETT TAX-FREE INCOME FUND, INC., a Maryland corporation (the
"Fund"), on behalf of its NEW JERSEY SERIES (the "Series"), and LORD ABBETT
DISTRIBUTOR LLC, a New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's shares of capital
stock, including the Series' Class A shares (the "Shares") pursuant to the
Distribution Agreement between the Fund and the Distributor, dated as of the
date hereof (the "Distribution Agreement").
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") for the Series with the Distributor, as permitted by Rule 12b-1 under
the Act, pursuant to which the Series may make certain payments to the
Distributor to be used by the Distributor or paid to institutions and persons
permitted by applicable law and/or rules to receive such payments ("Authorized
Institutions") in connection with sales of Shares and/or servicing of accounts
of shareholders holding Shares.
WHEREAS, the Fund's Board of Directors has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agree ments
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
<PAGE>
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Series in order to (a) finance any activity which is
-
primarily intended to result in the sale of Shares and (b) provide continuing
-
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the Shares;
provided that (i) any payments referred to in the foregoing clause (a) shall not
- -------- -
exceed the distribution fee permitted to be paid at the time under paragraph 3
of this Plan and shall be authorized by the Board of Directors of the Fund by a
vote of the kind referred to in paragraph 10 of this Plan and (ii) any payments
--
referred to in clause (b) shall not exceed the service fee permitted to be paid
at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for
remittance to Authorized Institutions and/or use by the Distributor pursuant to
this Plan (a) service fees and (b) distribution fees, each at an annual rate not
- -
to exceed .25 of 1% of the average annual net asset value of Shares outstanding,
except that service fees payable with respect to Shares that were initially
issued, or are attributable to shares that were initially issued, by the Fund or
a predecessor fund prior to July 1, 1992 shall not exceed .15 of 1% of the
average net asset value of such Shares. The Board of Directors of the Fund
shall from time to time determine the amounts, within the foregoing maximum
amounts, that the Series may pay the Distributor hereunder. Any such fees (which
may be waived by the Authorized Institutions in whole or in part) may be
calculated and paid quarterly or more frequently if approved by the Board of
Directors of the Fund. Such determinations and approvals by the Board of
Directors shall be made and given by votes of the kind referred to in paragraph
10 of this Plan. Payments by holders of Shares to the Series of contingent
deferred reim bursement charges relating to distribution fees paid by the Series
hereunder shall reduce the amount of distribution fees for purposes of the
annual 0.25% distribution fee limit. The Distributor will monitor the payments
hereunder and shall reduce such payments or take such other steps as may be
necessary to assure that (i) the payments pursuant to this Plan shall be
-
consistent with Article III, Section 26, subparagraphs (d)(2) and (5) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
with respect to investment companies with asset-based sales charges and service
fees, as the same may be in effect from time to time and (ii) the Series shall
--
not pay with respect to any Authorized Institution service fees equal to more
than .25 of 1% of the average annual net asset value of Shares sold by (or
attributable to Shares or shares sold by) such Authorized Institution and held
in an account covered by an Agreement.
4. The net asset value of the Shares shall be determined as provided in
the Articles of Incorporation of the Fund. If the Distributor waives all or a
portion
2
<PAGE>
of the fees which are to be paid by the Series hereunder, the Distributor shall
not be deemed to have waived its rights under this Agreement to have the Series
pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Series hereunder and shall provide to the Fund's Board of
Directors, and the directors shall review at least quarterly, a written report
of the amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
6. Neither this Plan nor any other transaction between the parties hereto
pursuant to this Plan shall be invalidated or in any way affected by the fact
that any or all of the directors, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as may
otherwise be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's
best judgment and good faith efforts in rendering services under this Plan.
Other than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund, the Series or any of the shareholders,
creditors, directors, or officers of the Fund; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Fund or the Series' shareholders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or by reason of the
reckless disregard of its obligations and duties hereunder.
8. This Plan shall become effective upon the date hereof and shall continue
in effect for a period of more than one year from that date only so long as such
continuance is specifically approved at least annually by a vote of the Board of
Directors of the Fund, including the vote of a majority of the directors who are
not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
renewal.
9. This Plan may not be amended to increase materially the amount to be
spent by the Series hereunder above the maximum amounts referred to in paragraph
3 of this Plan without a shareholder vote in compliance with Rule 12b-1
3
<PAGE>
and Rule 18f-3 under the Act as in effect at such time, and each material
amendment must be approved by a vote of the Board of Directors of the Fund,
including the vote of a majority of the directors who are not "interested
persons" of the Fund and who have no direct or indirect financial interest in
the operation of this Plan or in any agreement related to this Plan, cast in
person at a meeting called for the purpose of voting on such amendment.
Amendments to this Plan which do not increase materially the amount to be spent
by the Series hereunder above the maximum amounts referred to in paragraph 3 of
this Plan may be made pursuant to paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Directors of the Fund, including the vote of a majority of the directors who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Directors of the Fund may, by such a vote, interpret
this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the directors of the Fund who are not
-
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
-
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such disinterested directors. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meanings as those terms are
defined in the Act.
4
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on its behalf by its duly authorized representative as
of the date first above written.
LORD ABBETT TAX-FREE INCOME FUND, INC.
By: _____________________________
President
ATTEST:
___________________________
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By: _____________________________
5
<PAGE>
EXHIBIT B-7
NEW YORK SERIES
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Tax-Free Income Fund, Inc. -- New York Series -- Class A Shares
- ---------------------------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 12, 1996 by and
between LORD ABBETT TAX-FREE INCOME FUND, INC., a Maryland corporation (the
"Fund"), on behalf of its NEW YORK SERIES (the "Series"), and LORD ABBETT
DISTRIBUTOR LLC, a New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's shares of capital
stock, including the Series' Class A shares (the "Shares") pursuant to the
Distribution Agreement between the Fund and the Distributor, dated as of the
date hereof (the "Distribution Agreement").
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") for the Series with the Distributor, as permitted by Rule 12b-1 under
the Act, pursuant to which the Series may make certain payments to the
Distributor to be used by the Distributor or paid to institutions and persons
permitted by applicable law and/or rules to receive such payments ("Authorized
Institutions") in connection with sales of Shares and/or servicing of accounts
of shareholders holding Shares.
WHEREAS, the Fund's Board of Directors has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agree ments
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
<PAGE>
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Series in order to (a) finance any activity which is
-
primarily intended to result in the sale of Shares and (b) provide continuing
-
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the Shares;
provided that (i) any payments referred to in the foregoing clause (a) shall not
- -------- -
exceed the distribution fee permitted to be paid at the time under paragraph 3
of this Plan and shall be authorized by the Board of Directors of the Fund by a
vote of the kind referred to in paragraph 10 of this Plan and (ii) any payments
--
referred to in clause (b) shall not exceed the service fee permitted to be paid
at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for
remittance to Authorized Institutions and/or use by the Distributor pursuant to
this Plan (a) service fees and (b) distribution fees, each at an annual rate not
- -
to exceed .25 of 1% of the average annual net asset value of Shares outstanding,
except that service fees payable with respect to Shares that were initially
issued, or are attributable to shares that were initially issued, by the Fund or
a predecessor fund prior to June 1, 1990 shall not exceed .15 of 1% of the
average net asset value of such Shares. The Board of Directors of the Fund
shall from time to time determine the amounts, within the foregoing maximum
amounts, that the Series may pay the Distributor hereunder. Any such fees (which
may be waived by the Authorized Institutions in whole or in part) may be
calculated and paid quarterly or more frequently if approved by the Board of
Directors of the Fund. Such determinations and approvals by the Board of
Directors shall be made and given by votes of the kind referred to in paragraph
10 of this Plan. Payments by holders of Shares to the Series of contingent
deferred reim bursement charges relating to distribution fees paid by the Series
hereunder shall reduce the amount of distribution fees for purposes of the
annual 0.25% distribution fee limit. The Distributor will monitor the payments
hereunder and shall reduce such payments or take such other steps as may be
necessary to assure that (i) the payments pursuant to this Plan shall be
-
consistent with Article III, Section 26, subparagraphs (d)(2) and (5) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
with respect to investment companies with asset-based sales charges and service
fees, as the same may be in effect from time to time and (ii) the Series shall
--
not pay with respect to any Authorized Institution service fees equal to more
than .25 of 1% of the average annual net asset value of Shares sold by (or
attributable to Shares or shares sold by) such Authorized Institution and held
in an account covered by an Agreement.
4. The net asset value of the Shares shall be determined as provided in
the Articles of Incorporation of the Fund. If the Distributor waives all or a
portion
2
<PAGE>
of the fees which are to be paid by the Series hereunder, the Distributor shall
not be deemed to have waived its rights under this Agreement to have the Series
pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Series hereunder and shall provide to the Fund's Board of
Directors, and the directors shall review at least quarterly, a written report
of the amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
6. Neither this Plan nor any other transaction between the parties hereto
pursuant to this Plan shall be invalidated or in any way affected by the fact
that any or all of the directors, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as may
otherwise be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's
best judgment and good faith efforts in rendering services under this Plan.
Other than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund, the Series or any of the shareholders,
creditors, directors, or officers of the Fund; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Fund or the Series' shareholders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or by reason of the
reckless disregard of its obligations and duties hereunder.
8. This Plan shall become effective upon the date hereof, and shall
continue in effect for a period of more than one year from that date only so
long as such continuance is specifically approved at least annually by a vote of
the Board of Directors of the Fund, including the vote of a majority of the
directors who are not "interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to this Plan, cast in person at a meeting called for the purpose of
voting on such renewal.
9. This Plan may not be amended to increase materially the amount to be
spent by the Series hereunder above the maximum amounts referred to in paragraph
3 of this Plan without a shareholder vote in compliance with Rule 12b-1
3
<PAGE>
and Rule 18f-3 under the Act as in effect at such time, and each material
amendment must be approved by a vote of the Board of Directors of the Fund,
including the vote of a majority of the directors who are not "interested
persons" of the Fund and who have no direct or indirect financial interest in
the operation of this Plan or in any agreement related to this Plan, cast in
person at a meeting called for the purpose of voting on such amendment.
Amendments to this Plan which do not increase materially the amount to be spent
by the Series hereunder above the maximum amounts referred to in paragraph 3 of
this Plan may be made pursuant to paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Directors of the Fund, including the vote of a majority of the directors who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Directors of the Fund may, by such a vote, interpret
this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the directors of the Fund who are not
-
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
-
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such disinterested directors. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meanings as those terms are
defined in the Act.
4
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on its behalf by its duly authorized representative as
of the date first above written.
LORD ABBETT TAX-FREE INCOME FUND, INC.
By: _____________________________
President
ATTEST:
___________________________
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By: _____________________________
5
<PAGE>
EXHIBIT B-8
TEXAS SERIES
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Tax-Free Income Fund, Inc. -- Texas Series -- Class A Shares
- ------------------------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 12, 1996 by and
between LORD ABBETT TAX-FREE INCOME FUND, INC., a Maryland corporation (the
"Fund"), on behalf of its TEXAS SERIES (the "Series"), and LORD ABBETT
DISTRIBUTOR LLC, a New York limited liability company(the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's shares of capital
stock, including the Series' Class A shares (the "Shares") pursuant to the
Distribution Agreement between the Fund and the Distributor, dated as of the
date hereof (the "Distribution Agreement").
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") for the Series with the Distributor, as permitted by Rule 12b-1 under
the Act, pursuant to which the Series may make certain payments to the
Distributor to be used by the Distributor or paid to institutions and persons
permitted by applicable law and/or rules to receive such payments ("Authorized
Institutions") in connection with sales of Shares and/or servicing of accounts
of shareholders holding Shares.
WHEREAS, the Fund's Board of Directors has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agree ments
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
<PAGE>
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Series in order to (a) finance any activity which is
-
primarily intended to result in the sale of Shares and (b) provide continuing
-
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the Shares;
provided that (i) any payments referred to in the foregoing clause (a) shall not
- -------- -
exceed the distribution fee permitted to be paid at the time under paragraph 3
of this Plan and shall be authorized by the Board of Directors of the Fund by a
vote of the kind referred to in paragraph 10 of this Plan and (ii) any payments
--
referred to in clause (b) shall not exceed the service fee permitted to be paid
at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for
remittance to Authorized Institutions and/or use by the Distributor pursuant to
this Plan (a) service fees and (b) distribution fees, each at an annual rate not
- -
to exceed .25 of 1% of the average annual net asset value of Shares outstanding,
except that service fees payable with respect to Shares that were initially
issued, or are attributable to shares that were initially issued, by the Fund or
a predecessor fund prior to June 1, 1990 shall not exceed .15 of 1% of the
average net asset value of such Shares. The Board of Directors of the Fund
shall from time to time determine the amounts, within the foregoing maximum
amounts, that the Series may pay the Distributor hereunder. Any such fees (which
may be waived by the Authorized Institutions in whole or in part) may be
calculated and paid quarterly or more frequently if approved by the Board of
Directors of the Fund. Such determinations and approvals by the Board of
Directors shall be made and given by votes of the kind referred to in paragraph
10 of this Plan. Payments by holders of Shares to the Series of contingent
deferred reim bursement charges relating to distribution fees paid by the Series
hereunder shall reduce the amount of distribution fees for purposes of the
annual 0.25% distribution fee limit. The Distributor will monitor the payments
hereunder and shall reduce such payments or take such other steps as may be
necessary to assure that (i) the payments pursuant to this Plan shall be
-
consistent with Article III, Section 26, subparagraphs (d)(2) and (5) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
with respect to investment companies with asset-based sales charges and service
fees, as the same may be in effect from time to time and (ii) the Series shall
--
not pay with respect to any Authorized Institution service fees equal to more
than .25 of 1% of the average annual net asset value of Shares sold by (or
attributable to Shares or shares sold by) such Authorized Institution and held
in an account covered by an Agreement.
4. The net asset value of the Shares shall be determined as provided in
the Articles of Incorporation of the Fund. If the Distributor waives all or a
portion
2
<PAGE>
of the fees which are to be paid by the Series hereunder, the Distributor shall
not be deemed to have waived its rights under this Agreement to have the Series
pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Series hereunder and shall provide to the Fund's Board of
Directors, and the directors shall review at least quarterly, a written report
of the amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
6. Neither this Plan nor any other transaction between the parties hereto
pursuant to this Plan shall be invalidated or in any way affected by the fact
that any or all of the directors, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as may
otherwise be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's
best judgment and good faith efforts in rendering services under this Plan.
Other than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund, the Series or any of the shareholders,
creditors, directors, or officers of the Fund; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Fund or the Series' shareholders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or by reason of the
reckless disregard of its obligations and duties hereunder.
8. This Plan shall become effective upon the date hereof, and shall
continue in effect for a period of more than one year from that date only so
long as such continuance is specifically approved at least annually by a vote of
the Board of Directors of the Fund, including the vote of a majority of the
directors who are not "interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to this Plan, cast in person at a meeting called for the purpose of
voting on such renewal.
9. This Plan may not be amended to increase materially the amount to be
spent by the Series hereunder above the maximum amounts referred to in paragraph
3 of this Plan without a shareholder vote in compliance with Rule 12b-1
3
<PAGE>
and Rule 18f-3 under the Act as in effect at such time, and each material
amendment must be approved by a vote of the Board of Directors of the Fund,
including the vote of a majority of the directors who are not "interested
persons" of the Fund and who have no direct or indirect financial interest in
the operation of this Plan or in any agreement related to this Plan, cast in
person at a meeting called for the purpose of voting on such amendment.
Amendments to this Plan which do not increase materially the amount to be spent
by the Series hereunder above the maximum amounts referred to in paragraph 3 of
this Plan may be made pursuant to paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Directors of the Fund, including the vote of a majority of the directors who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Directors of the Fund may, by such a vote, interpret
this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the directors of the Fund who are not
-
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
-
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such disinterested directors. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meanings as those terms are
defined in the Act.
4
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on its behalf by its duly authorized representative as
of the date first above written.
LORD ABBETT TAX-FREE INCOME FUND, INC.
By: _____________________________
President
ATTEST:
___________________________
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By: _____________________________
5
<PAGE>
EXHIBIT B-2
WASHINGTON SERIES
Rule 12b-1 Distribution Plan and Agreement
Lord Abbett Tax-Free Income Fund, Inc. -- Washington Series -- Class A Shares
- -----------------------------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 12, 1996 by and
between LORD ABBETT TAX-FREE INCOME FUND, INC., a Maryland corporation (the
"Fund"), on behalf of its WASHINGTON SERIES (the "Series"), and LORD ABBETT
DISTRIBUTOR LLC, a New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and the
Distributor is the exclusive selling agent of the Fund's shares of capital
stock, including the Series' Class A shares (the "Shares") pursuant to the
Distribution Agreement between the Fund and the Distributor, dated as of the
date hereof (the "Distribution Agreement").
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") for the Series with the Distributor, as permitted by Rule 12b-1 under
the Act, pursuant to which the Series may make certain payments to the
Distributor to be used by the Distributor or paid to institutions and persons
permitted by applicable law and/or rules to receive such payments ("Authorized
Institutions") in connection with sales of Shares and/or servicing of accounts
of shareholders holding Shares.
WHEREAS, the Fund's Board of Directors has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
and valuable consideration, receipt of which is hereby acknowledged, and subject
to the provisions of paragraph 8 of this Plan, it is agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agree ments
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
<PAGE>
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Series in order to (a) finance any activity which is
-
primarily intended to result in the sale of Shares and (b) provide continuing
-
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the Shares;
provided that (i) any payments referred to in the foregoing clause (a) shall not
- -------- -
exceed the distribution fee permitted to be paid at the time under paragraph 3
of this Plan and shall be authorized by the Board of Directors of the Fund by a
vote of the kind referred to in paragraph 10 of this Plan and (ii) any payments
--
referred to in clause (b) shall not exceed the service fee permitted to be paid
at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for
remittance to Authorized Institutions and/or use by the Distributor pursuant to
this Plan (a) service fees and (b) distribution fees, each at an annual rate not
- -
to exceed .25 of 1% of the average annual net asset value of Shares outstanding,
except that service fees payable with respect to Shares that were initially
issued, or are attributable to shares that were initially issued, by the Fund or
a predecessor fund prior to the first day of the calendar quarter subsequent to
the Series' net assets reaching $100 million shall not exceed .15 of 1% of the
average net asset value of such Shares. The Board of Directors of the Fund
shall from time to time determine the amounts, within the foregoing maximum
amounts, that the Series may pay the Distributor hereunder. Any such fees
(which may be waived by the Authorized Institutions in whole or in part) may be
calculated and paid quarterly or more frequently if approved by the Board of
Directors of the Fund. Such determinations and approvals by the Board of
Directors shall be made and given by votes of the kind referred to in paragraph
10 of this Plan. Payments by holders of Shares to the Series of contingent
deferred reimbursement charges relating to distribution fees paid by the Series
hereunder shall reduce the amount of distribution fees for purposes of the
annual 0.25% distribution fee limit. The Distributor will monitor the payments
hereunder and shall reduce such payments or take such other steps as may be
necessary to assure that (i) the payments pursuant to this Plan shall be
-
consistent with Article III, Section 26, subparagraphs (d)(2) and (5) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
with respect to investment companies with asset-based sales charges and service
fees, as the same may be in effect from time to time and (ii) the Series shall
--
not pay with respect to any Authorized Institution service fees equal to more
than .25 of 1% of the average annual net asset value of Shares sold by (or
attributable to Shares or shares sold by) such Authorized Institution and held
in an account covered by an Agreement.
2
<PAGE>
4. The net asset value of the Shares shall be determined as provided in
the Articles of Incorporation of the Fund. If the Distributor waives all or a
portion of the fees which are to be paid by the Series hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Series pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Series hereunder and shall provide to the Fund's Board of
Directors, and the directors shall review at least quarterly, a written report
of the amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
6. Neither this Plan nor any other transaction between the parties hereto
pursuant to this Plan shall be invalidated or in any way affected by the fact
that any or all of the directors, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as may
otherwise be provided in the Act.
7. The Distributor shall give the Fund the benefit of the Distributor's
best judgment and good faith efforts in rendering services under this Plan.
Other than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Distributor assumes no responsibility under this
Plan and, having so acted, the Distributor shall not be held liable or held
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting therefrom suffered by the Fund, the Series or any of the shareholders,
creditors, directors, or officers of the Fund; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Fund or the Series' shareholders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder, or by reason of the
reckless disregard of its obligations and duties hereunder.
8. This Plan shall become effective upon the date hereof and shall continue
in effect for a period of more than one year from that date only so long as such
continuance is specifically approved at least annually by a vote of the Board of
Directors of the Fund, including the vote of a majority of the directors who are
not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
renewal. Notwithstanding the foregoing, no payments may be made by the Series
hereunder
3
<PAGE>
prior to or with respect to any period prior to the first day of the calendar
quarter subsequent to the Series' net assets reaching $100 million.
9. This Plan may not be amended to increase materially the amount to be
spent by the Series hereunder above the maximum amounts referred to in paragraph
3 of this Plan without a shareholder vote in compliance with Rule 12b-1 and Rule
18f-3 under the Act as in effect at such time, and each material amendment must
be approved by a vote of the Board of Directors of the Fund, including the vote
of a majority of the directors who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreement related to this Plan, cast in person at a meeting called for
the purpose of voting on such amendment. Amendments to this Plan which do not
increase materially the amount to be spent by the Series hereunder above the
maximum amounts referred to in paragraph 3 of this Plan may be made pursuant to
paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Directors of the Fund, including the vote of a majority of the directors who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Directors of the Fund may, by such a vote, interpret
this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of any
penalty (a) by the vote of a majority of the directors of the Fund who are not
-
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
-
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such disinterested directors. The
terms "interested persons," "assignment" and "vote of a majority of the
outstanding voting securities" shall have the same meanings as those terms are
defined in the Act.
4
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on its behalf by its duly authorized representative as
of the date first above written.
LORD ABBETT TAX-FREE INCOME FUND, INC.
By: _____________________________
President
ATTEST:
___________________________
Assistant Secretary
LORD ABBETT DISTRIBUTOR LLC
By: _____________________________
5
<PAGE>
EXHIBIT C
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION OF THE FUND AUTHORIZING
THE BOARD OF DIRECTORS TO CREATE NEW CLASSES OF SHARES OF THE CAPITAL
STOCK OF THE FUND AND CONFIRMING THAT THE FUND MAY IMPOSE CONTINGENT DEFERRED
SALES CHARGES IN CONNECTION WITH ITS RULE 12B-1 PLANS
__________________________________________________________________
The following text shows those provisions of the Articles of Incorporation of
the Fund that are to be amended; the text that is lined through shows deletions
and the text that is double underlined indicates additions.
ARTICLE V
SECTION 1. The total number of shares which the Corporation has authority
to issue is 1,000,000,000 shares of capital stock of the par value of $.001 each
(the "Shares"), having an aggregate par value of $1,000,000. The Board of
Directors of the Corporation shall have full power and authority, from time to
time to classify or reclassify any unissued Shares, including, without
limitation, the power to classify or reclassify unissued shares into series, and
to classify or reclassify a series into one or more classes of stock that may be
invested together in the common investment portfolio in which the series is
invested, by setting or changing the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications, or
terms or conditions of redemption of such shares of stock. All Shares of a
series shall represent the same interest in the Corporation and have the same
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and
<PAGE>
terms and conditions of redemption as the other Shares of that series, except to
the extent that the Board of Directors provides for differing preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications, or terms or conditions of redemption of Shares of
classes of such series as determined pursuant to Articles Supplementary filed
for record with the State Department of Assessments and Taxation of Maryland, or
as otherwise determined pursuant to these Articles or by the Board of Directors
in accordance with law. The Shares shall initially be classified into nine
series designated initially as the "National Series", consisting of 80,000,000
Shares, the "Connecticut Series", consisting of 40,000,000 Shares, the "Hawaii
Series", consisting of 40,000,000 Shares, the "Minnesota Series", consisting of
40,000,000 Shares, the "Missouri Series", consisting of 40,000,000 Shares, the
"New Jersey Series", consisting of 80,000,000 Shares, the "New York Series",
consisting of 80,000,000 Shares, the "Texas Series", consisting of 40,000,000
Shares and the "Washington Series", consisting of 40,000,000 Shares. Prior to
the first classification of a series into additional classes, all outstanding
Shares of such series shall be of a single class. Notwithstanding any other
provision of these Articles, upon the classification of unissued Shares into
additional series, the Board of Directors shall specify a legal name for the new
series in appropriate charter documents filed for record with the State
Department of Assessments and Taxation of Maryland providing for such name
change and classification, and upon the first classification of a series into
additional classes, the Board of Directors shall specify a legal name for the
outstanding class, as well as for the new class or classes, in appropriate
charter documents filed for record with the State Department of Assessments and
Taxation of Maryland providing for such name change and classification.
SECTION 2. A description of the relative preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends, qualifications
and terms and conditions of redemption of all series and classes of series of
Shares is as follows, unless otherwise set forth in Articles Supplementary filed
for record with the State Department of Assessments and Taxation of Maryland or
otherwise determined pursuant to these Articles:
2
<PAGE>
(a) Assets Belonging to Series. All consideration received or
--------------------------
receivable by the Corporation for the issuance or sale of Shares of a particular
series, together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in whatever
form the same may be, shall irrevocably belong to that series for all purposes,
subject only to the rights of creditors, and shall be so recorded upon the books
of account of the Corporation. Such consideration, assets, income, earnings,
profits and proceeds, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds, in whatever form the same may be, together with
any unallocated items (as hereinafter defined) relating to that series as
provided in the following sentence, are herein referred to as "assets belonging
to" that series. In the event that there are any assets, income, earnings,
profits or proceeds thereof, funds or payments which are not readily
identifiable as belonging to any particular series (collectively "Unallocated
Items"), the Board of Directors shall allocate such Unallocated Items to and
among any one or more of the series created from time to time in such manner and
on such basis as it, in its sole discretion, deems fair and equitable; and any
Unallocated Items so allocated to a particular series shall belong to that
series. Each such allocation by the Board of Directors shall be conclusive and
binding upon the stockholders of all series for all purposes.
(b) Liabilities Belonging to Series. The assets belonging to
-------------------------------
each particular series shall be charged with the liabilities of the Corporation
in respect of that series, including any class thereof, and with all expenses,
costs, charges and reserves attributable to that series, including any such
class, and shall be so recorded upon the books of
3
<PAGE>
account of the Corporation. Such liabilities, expenses, costs, charges and
reserves, together with any unallocated items (as hereinafter defined) relating
to that series, including any class thereof, as provided in the following
sentence, so charged to that series, are herein referred to as "liabilities
belonging to" that series. In the event there are any unallocated liabilities,
expenses, costs, charges or reserves of the Corporation which are not readily
identifiable as belonging to any particular series (collectively "Unallocated
Items"), the Board of Directors shall allocate and charge such Unallocated Items
to and among any one or more of the series created from time to time in such
manner and on such basis as the Board of Directors in its sole discretion deems
fair and equitable; and any Unallocated Items so allocated and charged to a
particular series shall belong to that series. Each such allocation by the Board
of Directors shall be conclusive and binding upon the stockholders of all series
for all purposes. To the extent determined by the Board of Directors,
liabilities and expenses relating solely to a particular class (including,
without limitation, distribution expenses under a Rule 12b-1 plan and
administrative expenses under an administration or service agreement, plan or
other arrangement, however designated, which may be adopted for such class)
shall be allocated to and borne by such class and shall be appropriately
reflected (in the manner determined by the Board of Directors) in the net asset
value, dividends and distributions and liquidation rights of the shares of such
class.
(c) Dividends. Dividends and distributions on Shares of a particular
---------
series may be paid to the holders of Shares of that series at such times, in
such manner and from such of the income and capital gains, accrued or realized,
from the assets belonging to that series, after providing for actual and accrued
liabilities belonging to that series, as the Board of Directors may determine.
Such dividends and distributions may vary between or among classes of a series
to reflect
4
<PAGE>
differing allocations of liabilities and expenses of such series between or
among such classes to such extent as may be provided in or determined pursuant
to Articles Supplementary filed for record with the State Department of
Assessments and Taxation of Maryland or as may otherwise be determined by the
Board of Directors.
(d) Liquidation. In the event of the liquidation or dissolution of
-----------
the Corporation, the stockholders of each series shall be entitled to receive,
as a series, when and as declared by the Board of Directors, the excess of the
assets belonging to that series over the liabilities belonging to that series.
The assets so distributable to the stockholders of one or more classes of a
series shall be distributed among such stockholders in proportion to the
respective aggregate net asset values of the shares of such series held by them
and recorded on the books of the Corporation.
(e) Voting. On each matter submitted to vote of the stockholders,
------
each holder of a Share shall be entitled to one vote for each such Share
standing in his name on the books of the Corporation irrespective of the series
or class thereof and all shares of all series and classes shall vote as a single
class ("Single Class Voting"); provided, however, that (i) as to any matter with
-
respect to which a separate vote of any series or class is required by the
Investment Company Act of 1940, as amended from time to time, applicable rules
and regulations thereunder, or the Maryland General Corporation Law, such
requirement as to a separate vote of that series or class shall apply in lieu of
Single Class Voting as described above; (ii) in the event that the separate vote
--
requirements referred to in (i) above apply with respect to one or more (but
less than all) series or classes, then, subject to (iii) below, the shares of
all other series and classes shall vote as a single class; and (iii) as
---
5
<PAGE>
to any matter which does not affect the interest of a particular series or
class, only the holders of shares of the one or more affected series or classes
shall be entitled to vote.
(f) Conversion. At such times (which times may vary among shares of a
class) as may be determined by the Board of Directors, Shares of a particular
class of a series may be automatically converted into Shares of another class of
such series based on the relative net asset values of such classes at the time
of conversion, subject, however, to any conditions of conversion that may be
imposed by the Board of Directors.
(g) Equality. All Shares of each particular series shall
--------
represent an equal proportionate interest in the assets belonging to that series
(subject to the liabilities belonging to that series), but the provisions of
this sentence or any other provision of these Articles shall not restrict any
distinctions that may exist with respect to stockholder elections to receive
dividends or distributions in cash or Shares or that may
otherwise exist with respect to dividends and distributions on Shares of the
same series.
SECTION 3. The Shares of the Corporation, shall be subject to the following
provisions:
(a) All Shares now or hereafter authorized shall be subject to redemption and
redeemable at the option of the stockholder, in the sense used in the
General Laws of the State of Maryland authorizing the formation of
corporations. Each holder of the Shares, upon request to the Corporation
accompanied by surrender (to the Corporation, or an agent designated by it)
of the appropriate stock certificate or certificates, if any, in proper
form for transfer, and such other
6
<PAGE>
instruments as the Board of Directors may require, shall be entitled to
require the Corporation to redeem all or any part of the Shares outstanding
in the name of such holder on the books of the Corporation, at a redemption
price equal to the net asset value of such Shares determined as hereinafter
set forth Notwithstanding the foregoing, the Corporation may deduct from
the proceeds otherwise due to any stockholder requiring the Corporation to
redeem Shares a redemption charge not to exceed one percent (1%) of such
net asset value or a reimbursement charge, a deferred sales charge or
other charge that is integral to the Corporation's distribution program
(which charges may vary within and among series and classes) as may be
established from time to time by the Board of Directors.
(b) Notwithstanding the foregoing, the Board of Directors of the
Corporation may suspend the right of the holders of the Shares to require the
Corporation to redeem Shares or may suspend any voluntary purchase of such
Shares.
(c) The Corporation, pursuant to a resolution of the Board of Directors and
without the vote or consent of stockholders of the Corporation, shall have
the right to redeem at net asset value all Shares, in any stockholder
account in which there are less than 25 shares or such lesser number of
Shares as shall be specified in such resolution. Such resolution shall set
forth that redemption of Shares in such accounts has been determined to be
necessary to reduce dis proportionately burdensome expenses in servicing
stockholder accounts, or to be otherwise in the economic best interest of
the Corporation. Such resolution shall provide that prior notice of at
least 30 days shall be given to a stockholder before such redemption of
shares and the stockholder will have 30 days (or such longer period as is
specified in the resolution) from the date of the notice to avoid such
redemption by increasing his
7
<PAGE>
account to at least 25 Shares, or such lesser number of Shares as is
specified in the resolution.
* * *
Article VII
* * *
SECTION 1. In furtherance and not in limitation of the powers conferred
by statute and pursuant to these Articles of Incorporation, the Board of
Directors is expressly authorized to do the following:
* * *
(b) To declare (from interest, dividends or other income received or
accrued, from accruals of original issue or other discounts on
obligations held, from capital or other profits on portfolio assets
whether realized or unrealized, from surplus whether earned, capital or
paid in from any other lawful sources with respect to a particular
series) dividends and distributions on the Corporation's shares, with
respect to such series, for payment in cash, property or the
Corporation's own stock to stockholders of record on such dates (which
may be as frequently as every day) and payable at such intervals as the
Board of Directors shall determine at any time in advance of such
payment, whether or not in the amount of such payment can at that time
be determined or must be calculated subsequent to declaration and prior
to payment by reference to amounts or other factors not yet determined
at the time of declaration (including but not limited to the amount of
a dividend or distribution to be determined only by reference to what
is sufficient to enable the Corporation to qualify as a regulated
investment company under the United States Internal Revenue Code or to
avoid liability for Federal income tax); provided that if a dividend is
paid from any source other than earned surplus, the source of the
dividend shall be disclosed not later than at the time of payment to
the stockholders of such
8
<PAGE>
series who receive it (the authority granted by this subsection (b) to
permit, without limitation, and if otherwise lawful: the declaration of
dividends or distributions by means of a formula or other similar method of
determination whether or not the amount of such dividend or distribution
can be calculated at the time of such declaration; establishing record or
payment dates for dividends or distributions on any basis, including
establishing a number of record or payment dates subsequent to the
declaration of any dividend or distribution; establishing the same payment
date for any number of dividends or distributions declared prior to such
date; providing for the payment of dividends or distributions declared and
as yet unpaid to stockholders of the Corporation redeeming shares prior to
the payment date otherwise applicable; and providing in advance for the
conditions under which any dividend or distribution may be payable in the
Corporation's own shares to all or less than all of the Corporation's
stockholders with respect to a particular series and for the calculation of
any transfer from earned surplus to capital surplus in excess of the
transfer to the stated capital of the aggregate par value of the shares of
a particular series so to be issued, whether such dividend or distribution
is in authorized but unissued or in treasury shares of the Corporation.
(c) To issue and sell or to cause the issuance and sale of Shares, in such
amounts and on such terms and conditions, for such purpose and for such
amount or kind of consideration as is now or hereafter permitted by the
laws of the State of Maryland and in accordance with the Investment Company
Act of 1940;
(d) To purchase and to cause to be purchased Shares, of any series, pursuant to
these Articles of Incorporation, upon tender thereof by the holder or
holders thereof or otherwise, provided the Corporation has assets belonging
to that series legally available for such purpose whether arising out of
paid-in surplus, other surplus, net profits or otherwise, to such extent
and in such manner
9
<PAGE>
and upon such terms as the Board of Directors shall deem expedient, and to
pay for such Shares in cash belonging to that series then held or owned by
the Corporation;
* * *
(g) To authorize any agreement of the character described in subsection (e) or
(f) of this Section 1 with any person, corporation, association,
partnership or other organization, although one or more of the members of
the Board of Directors or Officers of the Corporation may be the other
party to any such agreement or an officer, director, shareholder, or member
of such other party, and no such agreement shall be invalidated or rendered
voidable by reason of the existence of any such relationship. Any director
of the Corporation who is also a director or officer of such corporation or
who is so interested may be counted in determining the existence of a
quorum at any meeting of the Board of Directors which shall authorize any
such agreement, and may vote thereat to authorize any such contract or
transaction, with like force and effect as if he were not such director or
officer of such other corporation or not so interested. Any agreement
entered into pursuant to said subsections (e) or (f) shall be consistent
with and subject to the requirements of the Investment Company Act of 1940
as amended from time to time, applicable rules and regulations thereunder,
or any other applicable Act of Congress hereafter enacted, and no
amendment to any agreement entered into pursuant to said subsection (e)
(other than an amendment reducing the compensation of the other party
thereto) shall be effective unless assented to by the affirmative vote of a
majority of the outstanding voting securities of the Corporation (as such
phrase is defined in the Investment Company Act of 1940, as amended from
time to time) entitled to vote on the matter.
10
<PAGE>
SECTION 2. The Board of Directors may authorize the purchase by the
Corporation, either directly or through any agent, of the Shares, in the open
market or otherwise, at prices not in excess of the net asset value of such
Shares (determined as hereinafter provided) as of a time determined by the Board
of Directors reasonably proximate to the time of purchase by the Corporation or
any such agent.
SECTION 3. For the purposes referred to in these Articles of Incorporation,
the net asset value of shares of the capital stock of the Corporation of each
series and class as of any particular time (a "determination time") shall be
determined by or pursuant to the direction of the Board of Directors as follows:
(a) At times when a series is not classified into multiple classes, the
net asset value of each share of stock of a series, as of a
determination time, shall be the quotient, carried out to not less than
two decimal points, obtained by dividing the net value of the assets of
the Corporation belonging to that series (determined as hereinafter
provided) as of such determination time by the total number of shares
of that series then outstanding, including all shares of that series
which the Corporation has agreed to sell for which the price has been
determined, and excluding shares of that series which the Corporation
has agreed to purchase or which are subject to redemption for which
the price has been determined.
The net value of the assets of the Corporation of a series as of a
determination time shall be determined in accordance with sound
accounting practice by deducting from the gross value of the assets of
the Corporation belonging to that series (determined as hereinafter
provided) the amount of all liabilities belonging to that
11
<PAGE>
series (as such terms are defined in subsection (b) of Section 2 of Article
V), in each case as of such determination time.
The gross value of the assets of the Corporation belonging to a series as
of such determination time shall be an amount equal to all cash,
receivables, the market value of all securities for which market quotations
are readily available and the fair value of other assets of the Corporation
belonging to that series (as such terms are defined in subsection (a) of
Section 2 of Article V) at such determination time, all determined in
accordance with sound accounting practice. Securities held shall be valued
pursuant to methods approved by the Board of Directors and in accordance
with applicable statutes and regulations. The determination of the market
value of securities hereunder may be determined by reference to any
recognized source of quotations or to a valuation service approved by the
Board of Directors.
(b) At times when a series is classified into multiple classes, the net asset
value of each share of stock of a class of such series shall be determined
in accordance with the foregoing subsection (a) with appropriate
adjustments to reflect differing allocations of liabilities and expenses of
such series between or among such classes to such extent as may be provided
in or determined pursuant to Articles Supplementary filed for record with
the State Department of Assessments and Taxation of Maryland or as may
otherwise be determined by the Board of Directors.
SECTION 4. The presence in person or by proxy of the holders of one-third
of the Shares issued and outstanding and entitled to vote thereat shall
constitute a quorum for the transaction of any business at all meetings of the
shareholders, except as otherwise provided by law or in these Articles of
Incorporation and except that where the holders of Shares of any series or class
are entitled to a separate vote as such series or class (each such series or
class, a "Separate Class") or where the holders of Shares of two or more (but
not all) Classes series or classes are required to vote as a single
12
<PAGE>
series or class (each such single series or class, a "Combined Class"), the
presence in person or by proxy of the holders of one-third of the Shares of that
Separate Class or Combined Class, as the case may be, issued and outstanding and
entitled to vote thereat shall constitute a quorum for such vote. If, however, a
quorum with respect to all series, including all classes thereof, a Separate
Class or a Combined Class, as the case may be, shall not be present or
represented at any meeting of the shareholders, the holders of a majority of the
Shares of all series, such Separate Class or such Combined Class, as the case
may be, present in person or by proxy and entitled to vote shall have power to
adjourn the meeting from time to time as to all series, such Separate Class or
such Combined Class, as the case may be, without notice other than announcement
at the meeting, until the requisite number of Shares entitled to vote at such
meeting shall be present. At such adjourned meeting at which the requisite
number of Shares entitled to vote thereat shall be represented any business may
be transacted which might have been transacted at the meeting as originally
notified. The absence from any meeting of stockholders of the number of Shares
in excess of one-third of the Shares of all series or classes, or of the
affected series or classes, as the case may be, which may be required by the
laws of the State of Maryland, the Investment Company Act of 1940 or any other
applicable law, or by these Articles of Incorporation, for action upon any given
matter shall not prevent action at such meeting upon any other matter or matters
which may properly come before the meeting, if there shall be present thereat,
in person or by proxy, holders of the number of Shares required for action in
respect of such other matter or matters.
SECTION 5. Any determination as to any of the following matters made by or
pursuant to the direction of the Board of Directors consistent with these
Articles of Incorporation and in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of duties, shall be final and conclusive
and shall be binding upon the Corporation and every holder of the Shares, of any
series or class, namely, the amount of the assets, obligations, liabilities and
expenses of the Corporation or belonging to any series or with respect to any
class; the amount of the net income of the Corporation from dividends and
interest for any period and the amount of assets at any time legally available
for the payment of dividends with respect to any series or class; the amount of
paid-in surplus, other surplus, annual or other net profits, or net assets in
excess of capital, undivided profits, or excess of profits over losses on sales
of securities belonging to the Corporation or any series or class; the amount,
purpose, time of creation, increase or decrease, alteration or cancellation of
any reserves or charges and the propriety thereof (whether or not any obligation
or liability for which such reserves or charges shall have been created shall
have been paid or discharged) with respect the Corporation or any series or
class; the market value, or any sale, bid or asked
13
<PAGE>
price to be applied in determining the market value, of any security owned or
held by the Corporation the fair value of any asset owned by the Corporation;
the number of Shares of the Corporation of any series or class issued or
issuable; the existence of conditions permitting the postponement of payment of
the repurchase price of Shares of any series or class or the suspension of the
right of redemption as provided by law; any matter relating to the acquisition,
holding and disposition of securities and other assets by the Corporation any
question as to whether any transaction constitutes a purchase of securities on
margin, a short sale of securities, or an underwriting of the sale of, or
participation in any underwriting or selling group in connection with the public
distribution of, any securities; and any matter relating to the issue, sale,
repurchase and/or other acquisition or disposition of Shares of any series or
class.
* * *
Article VIII
From time to time any of the provisions of these Articles of
Incorporation may be amended, altered or repealed (including any amendment that
changes the terms of any of the outstanding stock by classification,
reclassification or otherwise), and other provisions that might, under the
statutes of the State of Maryland at the time in force, be lawfully contained in
Articles of Incorporation may be added or inserted, upon the vote of the holders
of a majority of the Shares at the time outstanding and entitled to vote, and
all rights at any time conferred upon the stockholders of the Corporation by
these Articles of Incorporation are subject to the provisions of this Article
VIII.
14
<PAGE>
LORD ABBETT TAX-FREE INCOME FUND, INC.
NATIONAL SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and RONALD
P. LYNCH and each of them proxies, with full power of substitution, to vote
(according to the number of votes which the undersigned would be entitled to
cast if then personally present) at the annual meeting of shareholders of LORD
ABBETT TAX-FREE INCOME FUND, INC. (the "Fund") on June 19, 1996, including all
adjournments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-6.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1. Election of Directors:
For [_] Without Authority [_] For All Except [_]
(NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME
BELOW.)
Ronald P. Lynch, Robert S. Dow, E. Wayne Nordberg, E. Thayer Bigelow,
Stewart S. Dixon, John C. Jansing, C. Alan MacDonald, Hansel B.
Millican, Jr. and Thomas J. Neff.
2. For [_] Against [_] Abstain [_] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the
fiscal year ending September 30, 1996.
3. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
change in the Series' investment objective, as described in the proxy
statement.
<PAGE>
4. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
changes in the Series' fundamental investment policies and
restrictions, as described in the proxy statement.
5. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
new Distribution Plan and Agreement for the Series' existing class of
shares pursuant to Rule 12b-1 under the Investment Company Act of
1940, as described in the proxy statement.
6. For [_] Against [_] Abstain [_] To approve or disapprove an amendment
to the Fund's Articles of Incorporation (i) authorizing the Board of
Directors to create new classes of shares of capital stock; and (ii)
confirming that the board may impose contingent deferred sales charges
in connection with new classes of shares to be created, as described
in the proxy statement.
2
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT TAX-FREE INCOME FUND, INC.
NATIONAL SERIES
PLEASE SIGN, DATE AND MAIL THIS
PROXY IN THE POSTAGE PAID RETURN
ENVELOPE PROVIDED.
For information as to the voting of stock
registered in more than one name, see page
1 of the proxy statement. When signing the
proxy as attorney, executor, administrator,
trustee or guardian, please indicate the
capacity in which you are acting. Only
authorized officers should sign for
corporations.
Date:..........................................
Signature(s) of Shareholder(s) as shown at left
...............................................
(Please read other side)
3
<PAGE>
LORD ABBETT TAX-FREE INCOME FUND, INC.
CONNECTICUT SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and
RONALD P. LYNCH and each of them proxies, with full power of substitution, to
vote (according to the number of votes which the undersigned would be entitled
to cast if then personally present) at the annual meeting of shareholders of
LORD ABBETT TAX-FREE INCOME FUND, INC. (the "Fund") on June 19, 1996, including
all adjournments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-6.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1. Election of Directors:
For [_] Without Authority [_] For All Except [_]
(NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME
BELOW.)
Ronald P. Lynch, Robert S. Dow, E. Wayne Nordberg, E. Thayer Bigelow,
Stewart S. Dixon, John C. Jansing, C. Alan MacDonald, Hansel B.
Millican, Jr. and Thomas J. Neff.
2. For [_] Against [_] Abstain [_] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the fiscal
year ending September 30, 1996.
3. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
change in the Series' investment objective, as described in the proxy
statement.
<PAGE>
4. For [_] Against [_] Abstain [_] To approve or disapprove the
proposed changes in the Series' fundamental investment policies and
restrictions, as described in the proxy statement.
5. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
new Distribution Plan and Agreement for the Series' existing class of
shares pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as described in the proxy statement.
6. For [_] Against [_] Abstain [_] To approve or disapprove an amendment to
the Fund's Articles of Incorporation (i) authorizing the Board of
Directors to create new classes of shares of capital stock; and (ii)
confirming that the board may impose contingent deferred sales charges
in connection with new classes of shares to be created, as described in
the proxy statement.
2
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT TAX-FREE INCOME FUND, INC.
CONNECTICUT SERIES
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE
POSTAGE PAID RETURN ENVELOPE PROVIDED.
For information as to the voting of stock
registered in more than one name, see page 1 of
the proxy statement. When signing the proxy as
attorney, executor, administrator, trustee or
guardian, please indicate the capacity in which
you are acting. Only authorized officers should
sign for corporations.
Date:..........................................
Signature(s) of Shareholder(s) as shown at left
...............................................
...............................................
(Please read other side)
3
<PAGE>
LORD ABBETT TAX-FREE INCOME FUND, INC.
HAWAII SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and
RONALD P. LYNCH and each of them proxies, with full power of substitution, to
vote (according to the number of votes which the undersigned would be entitled
to cast if then personally present) at the annual meeting of shareholders of
LORD ABBETT TAX-FREE INCOME FUND, INC. (the "Fund") on June 19, 1996, including
all adjournments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-6.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1. Election of Directors:
For [_] Without Authority [_] For All Except [_]
(NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME
BELOW.)
Ronald P. Lynch, Robert S. Dow, E. Wayne Nordberg, E. Thayer Bigelow,
Stewart S. Dixon, John C. Jansing, C. Alan MacDonald, Hansel B.
Millican, Jr. and Thomas J. Neff.
2. For [_] Against [_] Abstain [_] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the fiscal
year ending September 30, 1996.
3. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
change in the Series' investment objective, as described in the proxy
statement.
4. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
changes in the Series' fundamental investment policies and restrictions,
as described in the proxy statement.
<PAGE>
5. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
new Distribution Plan and Agreement for the Series' existing class of
shares pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as described in the proxy statement.
6. For [_] Against [_] Abstain [_] To approve or disapprove an amendment to
the Fund's Articles of Incorporation (i) authorizing the Board of
Directors to create new classes of shares of capital stock; and (ii)
confirming that the board may impose contingent deferred sales charges
in connection with new classes of shares to be created, as described in
the proxy statement.
2
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT TAX-FREE INCOME FUND, INC.
HAWAII SERIES
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE
POSTAGE PAID RETURN ENVELOPE PROVIDED.
For information as to the voting of stock
registered in more than one name, see page 1 of
the proxy statement. When signing the proxy as
attorney, executor, administrator, trustee or
guardian, please indicate the capacity in which
you are acting. Only authorized officers should
sign for corporations.
Date:..........................................
Signature(s) of Shareholder(s) as shown at left
...............................................
...............................................
(Please read other side)
3
<PAGE>
LORD ABBETT TAX-FREE INCOME FUND, INC.
MINNESOTA SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and
RONALD P. LYNCH and each of them proxies, with full power of substitution, to
vote (according to the number of votes which the undersigned would be entitled
to cast if then personally present) at the annual meeting of shareholders of
LORD ABBETT TAX-FREE INCOME FUND, INC. (the "Fund") on June 19, 1996, including
all adjournments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-6.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1. Election of Directors:
For [_] Without Authority [_] For All Except [_]
(NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME
BELOW.)
Ronald P. Lynch, Robert S. Dow, E. Wayne Nordberg, E. Thayer Bigelow,
Stewart S. Dixon, John C. Jansing, C. Alan MacDonald, Hansel B.
Millican, Jr. and Thomas J. Neff.
2. For [_] Against [_] Abstain [_] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the fiscal
year ending September 30, 1996.
3. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
change in the Series' investment objective, as described in the proxy
statement.
4. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
changes in the Series' fundamental investment policies and restrictions,
as described in the proxy statement.
<PAGE>
5. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
new Distribution Plan and Agreement for the Series' existing class of
shares pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as described in the proxy statement.
6. For [_] Against [_] Abstain [_] To approve or disapprove an amendment to
the Fund's Articles of Incorporation (i) authorizing the Board of
Directors to create new classes of shares of capital stock; and (ii)
confirming that the board may impose contingent deferred sales charges
in connection with new classes of shares to be created, as described in
the proxy statement.
2
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT TAX-FREE INCOME FUND, INC.
MINNESOTA SERIES
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE
POSTAGE PAID RETURN ENVELOPE PROVIDED.
For information as to the voting of stock
registered in more than one name, see page 1 of
the proxy statement. When signing the proxy as
attorney, executor, administrator, trustee or
guardian, please indicate the capacity in which
you are acting. Only authorized officers should
sign for corporations.
Date:..........................................
Signature(s) of Shareholder(s) as shown at left
...............................................
...............................................
(Please read other side)
3
<PAGE>
LORD ABBETT TAX-FREE INCOME FUND, INC.
MISSOURI SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and
RONALD P. LYNCH and each of them proxies, with full power of substitution, to
vote (according to the number of votes which the undersigned would be entitled
to cast if then personally present) at the annual meeting of shareholders of
LORD ABBETT TAX-FREE INCOME FUND, INC. (the "Fund") on June 19, 1996, including
all adjournments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-6.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1. Election of Directors:
For [_] Without Authority [_] For All Except [_]
(NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME
BELOW.)
Ronald P. Lynch, Robert S. Dow, E. Wayne Nordberg, E. Thayer Bigelow,
Stewart S. Dixon, John C. Jansing, C. Alan MacDonald, Hansel B.
Millican, Jr. and Thomas J. Neff.
2. For [_] Against [_] Abstain [_] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the fiscal
year ending September 30, 1996.
3. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
change in the Series' investment objective, as described in the proxy
statement.
4. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
changes in the Series' fundamental investment policies and restrictions,
as described in the proxy statement.
<PAGE>
5. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
new Distribution Plan and Agreement for the Series' existing class of
shares pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as described in the proxy statement.
6. For [_] Against [_] Abstain [_] To approve or disapprove an amendment to
the Fund's Articles of Incorporation (i) authorizing the Board of
Directors-to create new classes of shares of capital stock; and (ii)
confirming that the board may impose contingent deferred sales charges
in connection with new classes of shares to be created, as described in
the proxy statement.
2
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT TAX-FREE INCOME FUND, INC.
MISSOURI SERIES
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE
POSTAGE PAID RETURN ENVELOPE PROVIDED.
For information as to the voting of stock
registered in more than one name, see page 1 of
the proxy statement. When signing the proxy as
attorney, executor, administrator, trustee or
guardian, please indicate the capacity in which
you are acting. Only authorized officers should
sign for corporations.
Date:..........................................
Signature(s) of Shareholder(s) as shown at left
...............................................
...............................................
(Please read other side)
3
<PAGE>
LORD ABBETT TAX-FREE INCOME FUND, INC.
NEW JERSEY SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and
RONALD P. LYNCH and each of them proxies, with full power of substitution, to
vote (according to the number of votes which the undersigned would be entitled
to cast if then personally present) at the annual meeting of shareholders of
LORD ABBETT TAX-FREE INCOME FUND, INC. (the "Fund") on June 19, 1996, including
all adjournments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-6.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1. Election of Directors:
For [_] Without Authority [_] For All Except [_] (NOTE: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK THE "FOR ALL EXCEPT"
BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME BELOW.)
Ronald P. Lynch, Robert S. Dow, E. Wayne Nordberg, E. Thayer Bigelow,
Stewart S. Dixon, John C. Jansing, C. Alan MacDonald, Hansel B.
Millican, Jr. and Thomas J. Neff.
2. For [_] Against [_] Abstain [_] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the fiscal
year ending September 30, 1996.
3. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
change in the Series' investment objective, as described in the proxy
statement.
4. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
changes in the Series' fundamental investment policies and restrictions,
as described in the proxy statement.
<PAGE>
5. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
new Distribution Plan and Agreement for the Series' existing class of
shares pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as described in the proxy statement.
6. For [_] Against [_] Abstain [_] To approve or disapprove an amendment to
the Fund's Articles of Incorporation (i) authorizing the Board of
Directors to create new classes of shares of capital stock; and (ii)
confirming that the board may impose contingent deferred sales charges
in connection with new classes of shares to be created, as described in
the proxy statement.
2
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT TAX-FREE INCOME FUND, INC.
NEW JERSEY SERIES
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE
POSTAGE PAID RETURN ENVELOPE PROVIDED.
For information as to the voting of stock
registered in more than one name, see page 1 of
the proxy statement. When signing the proxy as
attorney, executor, administrator, trustee or
guardian, please indicate the capacity in which
you are acting. Only authorized officers should
sign for corporations.
Date:..........................................
Signature(s) of Shareholder(s) as shown at left
...............................................
...............................................
(Please read other side)
3
<PAGE>
LORD ABBETT TAX-FREE INCOME FUND, INC.
NEW YORK SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and
RONALD P. LYNCH and each of them proxies, with full power of substitution, to
vote (according to the number of votes which the undersigned would be entitled
to cast if then personally present) at the annual meeting of shareholders of
LORD ABBETT TAX-FREE INCOME FUND, INC. (the "Fund") on June 19, 1996, including
all adjournments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-6.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1. Election of Directors:
For [_] Without Authority [_] For All Except [_]
(NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME
BELOW.)
Ronald P. Lynch, Robert S. Dow, E. Wayne Nordberg, E. Thayer Bigelow,
Stewart S. Dixon, John C. Jansing, C. Alan MacDonald, Hansel B.
Millican, Jr. and Thomas J. Neff.
2. For [_] Against [_] Abstain [_] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the fiscal
year ending September 30, 1996.
3. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
change in the Series' investment objective, as described in the proxy
statement.
4. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
changes in the Series' fundamental investment policies and restrictions,
as described in the proxy statement.
<PAGE>
5. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
new Distribution Plan and Agreement for the Series' existing class of
shares pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as described in the proxy statement.
6. For [_] Against [_] Abstain [_] To approve or disapprove an amendment to
the Fund's Articles of Incorporation (i) authorizing the Board of
Directors-to create new classes of shares of capital stock; and (ii)
confirming that the board may impose contingent deferred sales charges
in connection with new classes of shares to be created, as described in
the proxy statement.
2
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT TAX-FREE INCOME FUND, INC.
NEW YORK SERIES
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE
POSTAGE PAID RETURN ENVELOPE PROVIDED.
For information as to the voting of stock
registered in more than one name, see page 1 of
the proxy statement. When signing the proxy as
attorney, executor, administrator, trustee or
guardian, please indicate the capacity in which
you are acting. Only authorized officers should
sign for corporations.
Date:..........................................
Signature(s) of Shareholder(s) as shown at left
...............................................
...............................................
(Please read other side)
3
<PAGE>
LORD ABBETT TAX-FREE INCOME FUND, INC.
TEXAS SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and
RONALD P. LYNCH and each of them proxies, with full power of substitution, to
vote (according to the number of votes which the undersigned would be entitled
to cast if then personally present) at the annual meeting of shareholders of
LORD ABBETT TAX-FREE INCOME FUND, INC. (the "Fund") on June 19, 1996, including
all adjournments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-6.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1. Election of Directors:
For [_] Without Authority [_] For All Except [_]
(NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME
BELOW.)
Ronald P. Lynch, Robert S. Dow, E. Wayne Nordberg, E. Thayer Bigelow,
Stewart S. Dixon, John C. Jansing, C. Alan MacDonald, Hansel B.
Millican, Jr. and Thomas J. Neff.
2. For [_] Against [_] Abstain [_] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the fiscal
year ending September 30, 1996.
3. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
change in the Series' investment objective, as described in the proxy
statement.
4. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
changes in the Series' fundamental investment policies and restrictions,
as described in the proxy statement.
<PAGE>
5. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
new Distribution Plan and Agreement for the Series' existing class of
shares pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as described in the proxy statement.
6. For [_] Against [_] Abstain [_] To approve or disapprove an amendment to
the Fund's Articles of Incorporation (i) authorizing the Board of
Directors-to create new classes of shares of capital stock; and (ii)
confirming that the board may impose contingent deferred sales charges
in connection with new classes of shares to be created, as described in
the proxy statement.
2
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT TAX-FREE INCOME FUND, INC.
TEXAS SERIES
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE
POSTAGE PAID RETURN ENVELOPE PROVIDED.
For information as to the voting of stock
registered in more than one name, see page 1 of
the proxy statement. When signing the proxy as
attorney, executor, administrator, trustee or
guardian, please indicate the capacity in which
you are acting. Only authorized officers should
sign for corporations.
Date:..........................................
Signature(s) of Shareholder(s) as shown at left
...............................................
...............................................
(Please read other side)
3
<PAGE>
LORD ABBETT TAX-FREE INCOME FUND, INC.
WASHINGTON SERIES
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1996
767 Fifth Avenue
New York, New York 10153
The undersigned hereby appoints KENNETH B. CUTLER, ROBERT S. DOW and
RONALD P. LYNCH and each of them proxies, with full power of substitution, to
vote (according to the number of votes which the undersigned would be entitled
to cast if then personally present) at the annual meeting of shareholders of
LORD ABBETT TAX-FREE INCOME FUND, INC. (the "Fund") on June 19, 1996, including
all adjournments, as specified below, and in their discretion upon such other
business as may properly be brought before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
THAT YOU VOTE FOR PROPOSALS 1-6.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE VOTE OF THE UNDERSIGNED
IS TO BE CAST FOR ALL PROPOSALS LISTED BELOW.
1. Election of Directors:
For [_] Without Authority [_] For All Except [_]
(NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK
THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME
BELOW.)
Ronald P. Lynch, Robert S. Dow, E. Wayne Nordberg, E. Thayer Bigelow,
Stewart S. Dixon, John C. Jansing, C. Alan MacDonald, Hansel B.
Millican, Jr. and Thomas J. Neff.
2. For [_] Against [_] Abstain [_] To ratify the selection of Deloitte &
Touche LLP as independent public accountants of the Fund for the fiscal
year ending September 30, 1996.
3. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
change in the Series' investment objective, as described in the proxy
statement.
4. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
changes in the Series' fundamental investment policies and restrictions,
as described in the proxy statement.
<PAGE>
5. For [_] Against [_] Abstain [_] To approve or disapprove the proposed
new Distribution Plan and Agreement for the Series' existing class of
shares pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as described in the proxy statement.
6. For [_] Against [_] Abstain [_] To approve or disapprove an amendment to
the Fund's Articles of Incorporation (i) authorizing the Board of
Directors to create new classes of shares of capital stock; and (ii)
confirming that the board may impose contingent deferred sales charges
in connection with new classes of shares to be created, as described in
the proxy statement.
2
<PAGE>
ACCOUNT NUMBER SHARES PROXY NUMBER
LORD ABBETT TAX-FREE INCOME FUND, INC.
WASHINGTON SERIES
PLEASE SIGN, DATE AND MAIL THIS PROXY IN
THE POSTAGE PAID RETURN ENVELOPE PROVIDED.
For information as to the voting of stock
registered in more than one name, see page 1 of
the proxy statement. When signing the proxy as
attorney, executor, administrator, trustee or
guardian, please indicate the capacity in which
you are acting. Only authorized officers should
sign for corporations.
Date:..........................................
Signature(s) of Shareholder(s) as shown at left
...............................................
...............................................
(Please read other side)
3
