<PAGE>
Draft--March 15, 1996
================================================================================
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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
b(e)(2))
[ ] 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):
[X] $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:
[ ] 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>
[Letterhead of Lord Abbett Tax-Free Income Fund, Inc.]
FROM THE CHAIRMAN OF THE BOARD
- ------------------------------
Dear Shareholder,
The Board of Directors of Lord Abbett Tax-Free Income Fund, Inc. (the
"Fund") has called an Annual Meeting of Shareholders of of the Fund to consider
the matters described below. The board recommends that you vote in favor of each
proposal.
First, the board recommends that you vote to reelect the current
directors of the Fund and to ratify the selection of Deloitte & Touche LLP as
the Fund's independent public accountants.
Second, the board recommends that you vote in favor of a proposed
revision of your Series' investment objective to clarify that your Series seeks
as high a level of interest income exempt from federal income tax as is
consistent with reasonable risk.
Third, the board recommends that you vote in favor of a proposed revision
of the fundamental investment policies and restrictions of your Series which is
intended to provide for greater flexibility in managing the Series' portfolio
and to permit the board to change applicable policies in the future without
incurring the expense of shareholder meetings.
Fourth, the directors propose that your Series enter into a new 12b-1
Plan and Dis tribution Agreement for your class of shares. This new 12b-1 Plan
has several changes which are designed primarily to maintain the competitive
position of the Fund and to encourage sales of Fund shares. These changes, and
the estimated effect of these changes on your Series' expenses, are described in
detail in the proxy statement.
Fifth, the directors propose that the Fund's Articles of Incorporation be
amended (i) to authorize the creation of new classes of each Series which is
-
intended to encourage sales of Fund shares, and (ii) to confirm that the Fund
--
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).
These various matters are to be voted upon at a meeting of the
shareholders of the Fund to be held in New York on Wednesday, June 19, 1996 at
11:00 a.m.
YOUR VOTE ON THESE ISSUES IS CRITICAL. TO ENSURE THAT YOUR VOTE IS
COUNTED, IT IS IMPORTANT THAT YOU:
1. REVIEW THE ENCLOSED PROXY STATEMENT;
2. COMPLETE AND SIGN THE ENCLOSED PROXY CARD; AND
3. RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE AS SOON AS POSSIBLE.
Your prompt response will help save the Fund the expense of additional
solicitations.
We encourage you to review the enclosed materials. Because we believe
these proposals are in the best interests of shareholders, we encourage you to
vote in favor of the proposals.
Sincerely,
Ronald P. Lynch
Chairman of the Board
April 17, 1996
<PAGE>
PRELIMINARY COPY
LORD ABBETT TAX-FREE INCOME FUND, INC.
767 Fifth Avenue
New York, New York 10153
Tel. No. (212) 848-1800
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
Telephone No. (212) 848-1800
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.
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
(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).
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 ____ shares of the National Series,
______ shares of the Connecticut Series, ______ shares of the Hawaii Series,
______ shares of the Minnesota Series, ______ shares of the Missouri Series,
______ shares of the New Jersey Series, ______ shares of the New York Series,
______ shares of the Texas Series, ______ shares of the Washington Series, and
_______ 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 ___________ shares of the National Series , ______ shares
of the Connecticut Series, ______ shares of the Hawaii Series, ______ shares of
the Minnesota Series, ______ shares of the Missouri Series, ______ shares of the
New Jersey Series, ______ shares of the New York Series, ______ shares of the
Texas Series and ______ shares of the Washington Series (each such Series, a
"Series", and collectively the "Series") and _______ 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 $_______. The cost of the
solicitation will be borne by _____________.
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: (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.
<PAGE>
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.
E. Thayer Bigelow President and Chief Executive of 1994
(2) 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.
</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>
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
Act, because of his association with Lord Abbett.
(2) Also an officer and/or director or trustee of other Lord Abbett-sponsored
funds.
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 and officers 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 1,329,953
Robert S. Dow 0
E. Wayne Nordberg 202,372
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Beneficially Owned
Name and Phantom Shares/(1)/
- ---------------------------- -------------------------------------
<S> <C>
E. Thayer Bigelow 850
Stewart S. Dixon 4,937
John C. Jansing 8,115
C. Alan MacDonald 17,129
Hansel B. Millican, Jr. 5,487
Thomas J. Neff 5,665
Directors and Officers as a 1,997,918
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, 850 shares; Mr. Dixon, 4,937 shares; Mr. Jansing, 5,611 shares;
Mr. MacDonald, 3,198 shares; Mr. Millican, 5,487 shares; Mr. Neff, 5,665
shares; and directors and officers as a group: 25,748 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 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.
4
<PAGE>
<TABLE>
<CAPTION>
For Year Ended
For the Fiscal Year Ended September 30, 1995 December 31, 1995
------------------------------------------------------ --------------------
(I) (II) (III) (IV) (V)
- ----------------------- ------------------------------------------------------------------------------
Estimated Annual
Pension or Retire- Benefits Upon Re-
ment Benefits tirement Proposed
Accrued by the to be Paid by the Total Compensation
Aggregate Com- Fund and Fund and Fifteen Accrued by the Fund
pensation Ac- Fifteen Other Other Lord and Fifteen Other
crued by the Lord Abbett- Abbett-sponsored Lord Abbett-spon-
Name of Director Fund/1/ sponsored Funds/2/ 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 re tirement 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 Director's 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.
5
<PAGE>
Listed below are the executive officers of the Fund, other than Messrs.
Lynch and Dow who are listed above in the table of nominees. Each executive
officer has been associated with Lord Abbett for over five years, except as
indicated. Messrs. Allen, Carper, Cutler, Henderson, Morris, Nordberg and Walsh
are partners of Lord Abbett; the others listed below are employees.
Stephen I. Allen, age 42, Vice President since 1994.
Daniel E. Carper, age 43, 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.
E. Wayne Nordberg, age 59, Vice President since 1988.
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 shares of the Fund voted at
the meeting. 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 and for purposes of calculating the vote with
respect to this matter, but shall not be deemed to have been voted in favor of
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 be represented at the meeting for purposes of calculating the
vote with respect to this matter.
The Board of Directors recommends that the shareholders vote FOR the
election of each of the nominees as a director of the Fund.
6
<PAGE>
2. RATIFICATION OR REJECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche LLP as the 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 shares of the Fund voted at the meeting.
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 and for purposes of calculating the vote with respect to
this matter, but shall not be deemed to have been voted in favor of 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
be represented at the meeting for purposes of calculating the vote with respect
to 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.
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.
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
7
<PAGE>
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. 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 and
for purposes of calculating the vote with respect to this matter, but shall not
be deemed to have been voted in favor of 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 be represented at
the meeting for purposes of calculating the vote with respect to this matter.
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.
4. PROPOSAL TO AMEND THE FUNDAMENTAL INVESTMENT RESTRICTIONS AND POLICIES OF
EACH SERIES OF THE FUND
The Board of Directors has approved various amendments to the investment
policies and restrictions of each Series in order to provide increased
flexibility in managing such Series' investment portfolio. Those investment
policies and restrictions of a Series that are designated "fundamental" may only
be changed by the vote of a "majority" (as defined in the Act) of the voting
securities of such Series. 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. The current and proposed
investment policies and restrictions for each Series (both fundamental and non-
fundamental) with respect to various investment techniques and securities are
set forth in Exhibit A attached hereto.
Investment policies and restrictions govern generally the investment
activities of the 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 any Series.
Although the proposed fundamental investment policies and restrictions are less
restrictive than the current fundamental investment policies and restrictions of
each Series, non-fundamental restrictions have been adopted, to become effective
with the proposed amendments to the fundamental policies and restrictions, which
will limit the effect of such changes on the operations of the Series. The
proposed fundamental policies and restrictions are intended principally to
provide greater flexibility in the future management of the Series' respective
investment portfolios. The Board of Directors has no present intention of
approving actions permitted by these less restrictive fundamental policies. 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 each Series. In some instances, certain
fundamental
8
<PAGE>
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 the 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 the Series and its shareholders,
without incurring the costs (normally borne by the 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 require the Fund
to seek a shareholder vote to amend the policy or restriction to conform to
applicable law, as revised.
Approval of the proposed amendments to any Series' fundamental investment
restrictions and policies 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. 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 and for purposes of calculating the vote with respect to
this matter, but shall not be deemed to have been voted in favor of 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
be represented at the meeting for purposes of calculating the vote with respect
to this matter.
If the proposed amendments are not approved by the shareholders of a
Series, the current fundamental policies and restrictions will continue in
effect for such Series.
The Board of Directors recommends that shareholders of each Series vote in
favor of the proposed amendments to the fundamental investment restrictions and
policies of such Series.
5. NEW DISTRIBUTION PLAN AND AGREEMENT FOR THE CLASS A SHARES
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 text of the Proposed Plan for each Series is attached hereto
as Exhibit B. The directors who approved the Proposed Plans include all of the
Independent Directors, none of
9
<PAGE>
whom are "interested persons" of the Fund within the meaning of the Act or will
have 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 each Series will replace
the distribution plan and agreement for each Series (each a "Current Plan")
described below:
The National Series' Current Plan was approved by such Series' shareholders
on March 14, 1990 and became effective 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 effective June 1992.
The Hawaii Series' Current Plan was approved by such Series' shareholders
on October 16, 1991 and became effective January 1, 1993. The Current Plan for
the Hawaii Series was last amended by action of the Board of Directors on
October 9, 1991.
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 effective.
The Missouri Series' Current Plan was approved by such Series' shareholders
on June 12, 1991 and became effective October 1992.
The New Jersey Series' Current Plan was approved by such Series'
shareholders on December 15, 1990 and became effective 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 effective 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 effective 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 effective.
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 with respect to the National, New York and Texas
Series (except as to certain accounts for which tracking data is not available),
10
<PAGE>
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. These service and distribution
fees 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 Fund and (b) to sell
-
shares of the Fund.
Each of the Current Plans for the Connecticut, Hawaii, Minnesota, Missouri,
New Jersey and Washington Series is identical to the Current Plans for the
National, New York and Texas Series, except as discussed below. Each Plan has
become effective except for the Washington and Minnesota Series which will go
into effect on the first day (the "Effective Date") of the quarter subsequent to
the date that such respective Series' net assets reach $100 million. As of
_______, 1996, the net assets of the Washington Series totaled $____ million and
the next assets of the Minnesota Series totaled $____ million. The Fund cannot
estimate when the net assets of the Washington or Minnesota Series will reach
the level required for effectiveness of that Series' Plan. Under each Plan
(except as to certain accounts for which 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 from commencement of
the Series' public offering and (b) in the case of the Hawaii, Minnesota, New
-
Jersey and Washington Series, 0.15% of the average daily net asset value of such
shares sold prior to its Effective Date and 0.25% of the average daily net asset
value of such shares sold on or after that date and (2) a one-time 1% sales
-
distribution fee, at the time of sale, on all shares at the $1 million level
sold by dealers on or after the Series' Effective Date, including sales
qualifying at such level under the rights of accumulation and statement on
intention privileges.
Under the Current Plans, holders of shares on which the 1% dis tribution
fee has been paid are required to pay to the Fund 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 re demptions 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 and are thereafter redeemed out of the
Lord Abbett family on or before the end of such twenty-fourth month, the charge
is collected for the Fund by the other fund. The Fund collects such a charge for
other Lord Abbett-sponsored funds 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 distribution fees up to 0.25% of the average annual net assets
attributable
11
<PAGE>
to the Class A Shares of each Series (the "Distribution Fee Ceiling"). This
increased spending limit is intended primarily to permit the directors to
increase the amount to be spent for distribution to meet changing sales
competition. The directors believe it is desirable to be able to make these
changes without further shareholder approval because additional shareholder
meetings would be time-consuming and costly to the Series and their
shareholders. The Board of Directors will approve additional charges under this
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 shareholders.
The one-time 1% distribution fee, payable at the time of certain sales as
described above, is to be charged against the Distribution Fee Ceiling for each
Series. 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 continue paying (or,
with respect to the Washington and Minnesota Series, to begin paying after the
Effective 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.
If shareholders approve the Proposed Plans, the Board of Directors has
authorized each Series to pay, 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. 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 an annual rate of 0.25% of the average daily net asset
value of shares sold (i) with respect to the National, New York and Texas
Series, on or after June 1, 1990 (0.15% of the average daily net asset value of
shares sold, or attributable to shares sold, prior to such date) and (ii) with
respect to each other Series, on or after the Effective Date of such Series'
Proposed Plan (which Effective Dates would remain the same as under the 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.
12
<PAGE>
(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 or distribution of any excess contribution thereunder (not just
those described above in connection with such exception under the Current
Plans). 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 as follows: for the
National Series, from 0.82% to approximately 0.85%, representing a 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%; for the Texas Series,
from 0.62% to approximately 0.66%, representing a difference of 0.04%; and for
the Connecticut and New Jersey Series, there would have been no 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 to compete
more effectively in this growing and important
13
<PAGE>
market. The 0.10% per annum supplemental payments to dealers who meet certain
criteria will permit the Fund 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.
(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 in vestment 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, $294,562 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: 0.23% for
the National, 0.23% for the Connecticut, 0.22% for the Hawaii, 0.23% for the
Missouri, 0.25% for the New Jersey, 0.22% for the New York and 0.24% 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 taking into account the increased
fees that could be paid under the Proposed Plans. 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. The example set forth below is not a
representation of past or future expenses. Actual expenses may be greater or
less than those shown.
14
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- ---------------------------------------------------------------------------------------------
Pro Forma
Pro Forma (reflecting
(reflecting estimated
maximum amounts that
Year ended amounts would have
September 30, 1995 payable under been paid
(reflecting the the Proposed under the
Current Plan) Plan) Proposed Plan)
NATIONAL SERIES ------------------- -------------- --------------
- ---------------------------------------------------------------------------------------------
<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%/4 / 0.27%/5/
Other Expenses 0.09% 0.09% 0.09%
- ---------------------------------------------------------------------------------------------
Total Operating Expenses 0.82% 1.08%/4/ 0.85%/5/
- ---------------------------------------------------------------------------------------------
</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
------ ------- ------- --------
- ------------------------------------------------------------------------------------------------------------------------------
Pro Pro Pro Pro Pro Pro Pro Pro
Forma Forma Forma Forma Forma Forma Forma Forma
Current (max.) (est.) Current (max.) (est.) Current (max.) (est.) Current (max.) (est.)
- --------- ------ ------ ------- ------ ------ ------- ------ ------ ------- ------ ------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$55/6/ $58/4,6/ $56/5,6/ $72/6/ $80/4,6/ $74/5,6/ $91/6/ $105/4,6/ $93/5,6/ $101/6/ $174/4,6/ $149/5,6/
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- ------------------------------------------------------------------------------------------
Pro Forma
(reflecting
Pro-Forma estimated
(reflecting amounts that
maximum would have
Year ended amounts been paid
September 30, payable under under the
1995 (reflecting the Proposed Proposed
CONNECTICUT SERIES the Current Plan) Plan) 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%/7/ 0.06%/7/ 0.06%/7/
12b-1 Fees 0.25% 0.50%/4/ 0.25%/5/
Other Expenses 0.10% 0.10% 0.10%
- ------------------------------------------------------------------------------------------
Total Operating Expenses 0.41%/7/ 0.66%/4,7/ 0.41%/5,7/
- ------------------------------------------------------------------------------------------
</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
------ ------- ------- --------
- -----------------------------------------------------------------------------------------------------------------------------------
Pro Pro Pro Pro Pro Pro Pro Pro
Forma Forma Forma Forma Forma Forma Forma Forma
Current (max.) (est.) Current (max.) (est.) Current (max.) (est.) Current (max.) (est.)
- ------- ------ ------ ------- ------ ------ ------- ------ ------ ------- ------ ------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$51/6,7/ $54/4,6,7/ $51/5,6,7/ $60/6,7/ $68/4,6,7/ $60/5,6,7/ $69/6,7/ $83/4,6,7/ $69/5,6,7/ $74/6,7/ $126/4,6,7/ $74/5,6,7/
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- --------------------------------------------------------------------------------------------------------------------------
Pro Forma
Pro-Forma (reflecting
(reflecting estimated
maximum amounts that
Year ended amounts would have
September 30, payable under been paid
1995 (reflecting the Proposed under the
HAWAII SERIES the Current Plan) 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%/7/ 0.20%/7/ 0.20%/7/
12b-1 Fees 0.27% 0.50%/4/ 0.32%/5/
Other Expenses 0.11% 0.11% 0.11%
- --------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses 0.58%/7/ 0.81%/4,7/ 0.63%/5,7/
- --------------------------------------------------------------------------------------------------------------------------
</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
------ ------- ------- --------
- ------------------------------------------------------------------------------------------------------------------------------------
Pro Pro Pro Pro Pro Pro Pro Pro
Forma Forma Forma Forma Forma Forma Forma Forma
Current (max.) (est.) Current (max.) (est.) Current (max.) (est.) Current (max.) (est.)
- ------- ------ ------ ------- ------ ------ ------- ------ ------ ------- ------ ------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$53/6,7/ $59/4,6,7/ $55/5,6,7/ $65/6,7/ $76/4,6,7/ $72/5,6,7/ $78/6,7/ $97/4,6,7/ $90/5,6,7/ $85/6,7/ $156/4,6,7/ $143/5,6,7/
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- -------------------------------------------------------------------------------------------------------------------------
Pro Forma
Pro-Forma (reflecting
(reflecting estimated
maximum amounts that
Year ended amounts would have
September 30, payable under been paid
1995 (reflecting the Proposed under the
MINNESOTA SERIES the Current Plan) 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 0.00%/7/ 0.00%/7/ 0.00%/7/
12b-1 Fees 0.00%/3/ 0.00%/3/ 0.00%/3/
Other Expenses 0.00%/7/ 0.00%/7/ 0.00%/7/
- -------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses 0.00%/3,7/ 0.50%/3,7/ 0.00%/3,7/
- -------------------------------------------------------------------------------------------------------------------------
</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
------ ------- ------- --------
- -----------------------------------------------------------------------------------------------------------------------------------
Pro Pro Pro Pro Pro Pro Pro Pro
Forma Forma Forma Forma Forma Forma Forma Forma
Current (max.) (est.) Current (max.) (est.) Current (max.) (est.) Current (max.) (est.)
- ------- ------ ------ ------- ------ ------ ------- ------ ------ ------- ------ ------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$48/3,6,7/ $48/3,6,7/ $48/3,6,7/ $48/3,6,7/ $48/3,6,7/ $48/3,6,7/ $48/3,6,7/ $48/3,6,7/ $48/3,6,7/ $48/3,6,7/ $48/3,6,7/ $48/3,6,7/
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- -------------------------------------------------------------------------------------------------------------------------
Pro Forma
Pro-Forma (reflecting
(reflecting estimated
maximum amounts that
Year ended amounts would have
September 30, payable under been paid
1995 (reflecting the Proposed under the
MISSOURI SERIES the Current Plan) 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%/7/ 0.35%/7/ 0.35%/7/
12b-1 Fees 0.24% 0.50%/4/ 0.31%/5/
Other Expenses 0.15% 0.15% 0.15%
- -------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses 0.74%/7/ 1.00%/4,7/ 0.81%/5,7/
- -------------------------------------------------------------------------------------------------------------------------
</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
------ ------- ------- --------
- -----------------------------------------------------------------------------------------------------------------------------------
Pro Pro Pro Pro Pro Pro Pro Pro
Forma Forma Forma Forma Forma Forma Forma Forma
Current (max.) (est.) Current (max.) (est.) Current (max.) (est.) Current (max.) (est.)
- ------- ------ ------ ------- ------ ------ ------- ------ ------ ------- ------ ------
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$53/6,7/ $57/4,6,7/ $57/5,6,7/ $70/6,7/ $78/4,6,7/ $77/5,6,7/ $87/6,7/ $100/4,6,7/ $98/5,6,7/ $96/6,7/ $164/4,6,7/ $160/5,6,7/
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- -------------------------------------------------------------------------------------------------------------------------
Pro Forma
Pro-Forma (reflecting
(reflecting estimated
maximum amounts that
Year ended amounts would have
September 30, payable under been paid
1995 (reflecting the Proposed under the
NEW JERSEY SERIES the Current Plan) 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%/7/ 0.35%/7/ 0.35%/7/
12b-1 Fees 0.26% 0.50%/4/ 0.26%/5/
Other Expenses 0.11% 0.11% 0.11%
- -------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses 0.72%/7/ 0.96%/4,7/ 0.72%/5,7/
- -------------------------------------------------------------------------------------------------------------------------
</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
------ ------- ------- --------
- ------------------------------------------------------------------------------------------------------------------------------------
Pro Pro Pro Pro Pro Pro Pro Pro
Forma Forma Forma Forma Forma Forma Forma Forma
Current (max.) (est.) Current (max.) (est.) Current (max.) (est.) Current (max.) (est.)
- ------- ------ ------ ------- ------ ------ ------- ------ ------ ------- ------ ------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$55/6,7/ $57/4,6,7/ $55/5,6,7/ $69/6,7/ $77/4,6,7/ $69/5,6,7/ $86/6,7/ $98/4,6,7/ $86/5,6,7/ $94/6,7/ $160/4,6,7/$94/5,6,7/
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- -------------------------------------------------------------------------------------------------------------------------
Pro Forma
Pro-Forma (reflecting
(reflecting estimated
maximum amounts that
Year ended amounts would have
September 30, payable under been paid
1995 (reflecting the Proposed under the
NEW YORK SERIES the Current Plan) 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%/4/ 0.24%/5/
Other Expenses 0.09% 0.09% 0.09%
- -------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses 0.82% 1.09%/4/ 0.83%/5/
- -------------------------------------------------------------------------------------------------------------------------
</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
------ ------- ------- --------
- -----------------------------------------------------------------------------------------------------------------------------------
Pro Pro Pro Pro Pro Pro Pro Pro
Forma Forma Forma Forma Forma Forma Forma Forma
Current (max.) (est.) Current (max.) (est.) Current (max.) (est.) Current (max.) (est.)
- ------- ------ ------ ------- ------ ------ ------- ------ ------ ------- ------ ------
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$55/6/ $58/4,6/ $56/5,6/ $72/6/ $80/4,6/ $73/5,6/ $91/6/ $105/4,6/ $97/5,6/ $101/6/ $174/4,6/ $145/5,6/
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- -------------------------------------------------------------------------------------------------------------------------
Pro Forma
Pro-Forma (reflecting
(reflecting estimated
maximum amounts that
Year ended amounts would have
September 30, payable under been paid
1995 (reflecting the Proposed under the
TEXAS SERIES the Current Plan) 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%/7/ 0.25%/7/ 0.25%/7/
12b-1 Fees 0.25% 0.50%/4/ 0.29%/5/
Other Expenses 0.12% 0.12% 0.12%
- -------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses 0.62%/7/ 0.87%/4,7/ 0.66%/5,7/
- ------------------------------------------------------------------------------------------------------------------------------
</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
------ ------- ------- --------
- -----------------------------------------------------------------------------------------------------------------------------------
Pro Pro Pro Pro Pro Pro Pro Pro
Forma Forma Forma Forma Forma Forma Forma Forma
Current (max.) (est.) Current (max.) (est.) Current (max.) (est.) Current (max.) (est.)
- ------- ------ ------ ------- ------ ------ ------- ------ ------ ------- ------ ------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$54/6,7/ $56/4,6,7/ $54/5,6,7/ $66/6,7/ $74/4,6,7/ $68/5,6,7/ $80/6,7/ $93/4,6,7/ $83/5,6,7/ $88/6,7/ $150/4,6,7/ $126/5,6,7/
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
I II III IV
- -------------------------------------------------------------------------------------------------------------------------
Pro Forma
Pro-Forma (reflecting
(reflecting estimated
maximum amounts that
Year ended amounts would have
September 30, payable under been paid
1995 (reflecting the Proposed under the
WASHINGTON SERIES the Current Plan) 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%/7/ 0.35%/7/ 0.35%/7/
12b-1 Fees 0.00%/3/ 0.00%/3/ 0.00%/3/
Other Expenses 0.18% 0.18% 0.18%
- -------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses 0.53%/3,7/ 0.53%/3,7/ 0.53%/3,7/
- -------------------------------------------------------------------------------------------------------------------------
</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
------ ------- ------- --------
- -----------------------------------------------------------------------------------------------------------------------------------
Pro Pro Pro Pro Pro Pro Pro Pro
Forma Forma Forma Forma Forma Forma Forma Forma
Current (max.) (est.) Current (max.) (est.) Current (max.) (est.) Current (max.) (est.)
- ------- ------ ------ ------- ------ ------ ------- ------ ------ ------- ------ ------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
$53/3,6,7/ $53/3,6,7/ $53/3,6,7/ $64/3,6,7/ $64/3,6,7/ $64/3,6,7/ $76/3,6,7/ $76/3,6,7/ $76/3,6,7/ $82/3,6,7/ $82/3,6,7/ $82/3,6,7/
- ------------------------------------------------------------------------------------------------------------------------------------
</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.
2. Under both the Current Plans and the Proposed Plans, redemptions of shares
on which each 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.
23
<PAGE>
3. This figure omits Rule 12b-1 fees because this Series cannot predict when
its Rule 12b-1 Plan will become effective. The Current Plan for this Series
will go into effect on the first day of the calendar quarter subsequent to
such Series' net assets reaching $100 million. If the Proposed Plans go
into effect, each Series could pay a maximum annual distribution fee of
0.25% of net assets and a maximum annual service fee of 0.25% of net assets
thereunder.
4. Reflects the maximum annual 12b-1 fee of 0.50% that could be paid under the
proposed plan in any year, consisting of a distribution fee of 0.25% and
a service fee of 0.25%.
5. Reflects the estimated level of distribution fees that would have been paid
under the Proposed Plan had it been in effect for the Fund's last fiscal
year.
6. Based on total current and pro-forma operating expenses shown in the table
above.
7. Although not obligated to, Lord, Abbett & Co. may waive its management fee
and subsidize the operating expenses with respect to each 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 waiver and/or subsidy, the management
fee would have been 0.50% for each of the Connecticut, Hawaii, Minnesota,
Missouri, New Jersey, Texas and Washington Series and the total operating
expenses of the Minnesota Series would have been 0.81% (annualized).
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. 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 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. If a shareholder abstains from voting on this matter,
24
<PAGE>
then the shares held by such shareholder shall be deemed present at the meeting
for purposes of determining a quorum and for purposes of calculating the vote
with respect to this matter, but shall not be deemed to have been voted in favor
of 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 be represented at the meeting for purposes of calculating the
vote with respect to this matter.
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 a Series, with each share of a
Series, regardless of class, sharing pro rata (based on net asset value) in the
portfolio and income of the Series and in the Series' expenses, except for
differences in expenses resulting from different Rule 12b-1 plans for the
various classes and possibly other class-specific expenses. It is expected that
implementation of such a multi-class fund structure will (i) enable investors in
-
a Series to choose the distribution option that best suits their individual
situations, (ii) facilitate distribution of the Fund's shares, and (iii)
-- ---
maintain the competitive position of the Fund in relation to other funds that
have implemented or are seeking to implement similar distribution arrangements.
The Board of Directors has approved with respect to the National and New
York Series, subject to shareholder approval, two classes of shares which are to
share in each such Series' portfolio but are to have different distribution
arrange ments. For all Series, the existing class of shares, to be designated
the "Class A Shares," will continue to be offered as described in the Fund's
current prospectus, except that the Board of Directors is recommending that
shareholders 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
each 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
25
<PAGE>
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 of the National or New York Series.
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 December 31, 1995, the net assets of the National
Acquired Series and the National Series were approximately $44,110,905 and
$668,028,274, respectively, and the net assets of the New York Acquired Series
and the New York Series were approximately $9,148,464 and $335,094,483,
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 the existing Series and to create
additional 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 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 will convert automatically into Class A Shares of the National 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 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.
Shares of all classes will vote together on all matters affecting 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,
26
<PAGE>
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.
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. 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 and for purposes of calculating the vote with respect to
this matter, but shall not be deemed to have been voted in favor of 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
be represented at the meeting for purposes of calculating the vote with respect
to this matter.
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.
27
<PAGE>
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
reports(s) by writing to the Fund or by calling 800-___-____.
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. 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-
28
<PAGE>
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 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.
By:_______________________
Kenneth B. Cutler
Vice President and Secretary
29
<PAGE>
EXHIBIT A
COMPARISON OF CURRENT AND PROPOSED
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
margin (good faith deposits made in on margin to the extent permitted by
connection with entering into options and applicable law.
financial futures transactions are not
deemed to be margin), although it may NON-FUNDAMENTAL
obtain short-term credit necessary for the Each Series may not make short sales
clearance of purchases of securities. of securities or maintain a short
position except to the extent permitted
by applicable law.
- ----------------------------------------------------------------------------------------------
BORROWING.
FUNDAMENTAL FUNDAMENTAL
Each Series may not borrow money except Each Series may not borrow money,
as a temporary measure for extraordinary except that (i) each Series may
or emergency purposes and then not in borrow from banks (as defined in the
excess of 5% of its gross assets (at cost or Act) in amounts up to 33 1/3% of its
market value, whichever is lower) at the total assets (including the amount
time of borrowing. borrowed), (ii) each Series may bor-
row 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
securities issued by others, except to the underwriting of securities, except
extent that in connection with the pursuant to a merger or acquisition or
disposition of its portfolio securities it may to the extent that, in connection with
be deemed to be an underwriter under the disposition of its portfolio
federal securities laws. Notwithstanding securities, it may be deemed to be an
the foregoing, in the future, upon underwriter under federal securities
shareholder approval, each of the Series 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 Each Series may not make loans to
for the purchase of debt securities in which other persons, except that the
it may invest consistent with its investment acquisition of bonds, debentures or
objective and policies. other corporate debt securities and
investment in government obligations,
commercial paper, pass-through
instruments, certificates of deposit,
bankers acceptances, repurchase
agreements or any similar instruments
shall not be 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 Each Series may not buy or sell real
estate, including real estate mortgages in estate (except that each Series may in-
the ordinary course of its business, except vest in securities directly or indirectly
that it may invest in marketable securities secured by real estate or interests
secured by real estate or interests therein. therein or issued by companies which
Each Series may not buy or sell oil, gas, invest in real estate or interests
or other mineral leases, commodities or therein), commodity or commodity
commodity contracts (for this purpose contracts (except to the extent each
options and financial futures contracts are Series may do so in accordance with
not deemed to be commodities or applicable law and without registering
commodity contracts). 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 With respect to 75% of its gross
if the purchase would cause the Series to assets, the National Series may not
have more than 5% of its gross assets, at buy securities of one issuer
market value at the time of purchase, representing more than (i) 5% of such
invested in the securities of any one issuer, Series' gross assets, except securities
except securities issued or guaranteed by issued or guaranteed by the U.S.
the U.S. Government, its agencies or Government, its agencies or
instrumentalities. Each Series may not instrumentalities, or (ii) 10% of the
buy voting securities if the purchase would voting securities of such issuer.
then cause it to own more than 10% of the NON-FUNDAMENTAL
voting securities of any issuer). With respect to each Series other than
Notwithstanding the foregoing, in the the National Series, there is no
future, upon shareholder approval, each of fundamental policy or restriction (but
the Series may seek to achieve its the Series will be required to meet the
investment objective by investing all of its diversification rules under Subchapter
assets in another investment company (or M of the Internal Revenue Code).
series or class thereof) having the same
investment objective. Shareholders will be
notified thirty days in advance of such
conversion.
- ----------------------------------------------------------------------------------------------
INVESTMENT IN A SINGLE
INDUSTRY.
FUNDAMENTAL FUNDAMENTAL
Each Series may not invest more than 25% Each Series may not invest more than
of its gross assets taken at market value in 25% of its assets, taken at market
any one industry (except that each Series value, in the securities of issuers in
may invest more than 25% of such gross any particular industry (excluding tax-
assets in tax-exempt securities). Notwith- exempt securities, such as tax-exempt
standing the foregoing, in the future, upon securities financing facilities in the
shareholder approval, each of the Series same industry or issued by
may seek to achieve its investment objec- nongovernmental users and securities
tive by investing all of its assets in another of the U.S. Government, its agencies
investment company (or series or class and instrumentalities).
thereof) having the same 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 NON-FUNDAMENTAL
more than 10% of its net assets in illiquid Each Series may not invest,
securities (securities qualifying for resale knowingly, more than 15% of its net
under Rule 144A that are determined by assets (at the time of investment) in
the Board of Directors, or by Lord Abbett illiquid securities, except for
under the Board's delegation, to be liquid securities qualifying for resale under
are considered liquid securities). Rule 144A of the Securities Act of
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
permitted borrowings (neither a deposit to the extent permitted by each Series'
required to enter into or to maintain investment policies, in connection
municipal bond index futures contracts nor with hedging transactions, short sales,
an allocation or segregation of portfolio when-issued and forward commitment
assets to collateralize a position in such transactions and similar investment
options or futures contracts is deemed to strategies).
be a pledge, mortgage or hypothecation).
- ----------------------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES OF
OTHER INVESTMENT COMPANIES.
FUNDAMENTAL NON-FUNDAMENTAL
Each Series may not buy securities issued Each Series may not invest in the
by any other open-end investment securities of other investment
company except pursuant to a merger, companies, except as permitted by
acquisition or consolidation. applicable law.
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
straddle or spread options, although it may or sell puts, calls, straddles, spreads
buy, hold or sell options and financial or combinations thereof, except to the
futures. extent permitted in the Fund's
prospectus and statement of additional
NON-FUNDAMENTAL information, as they may be amended
Each Series may not buy or sell puts or from time to time.
calls 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, any issuer if more than 1/2 of 1% of
Fund officers and directors or partners of the securities of such issuer are
the Fund's investment adviser, who owned beneficially by one or more
beneficially own more than 1/2 of 1% of officers or directors of the Fund or by
the securities of that issuer, together own one or more partners or members of
more than 5% of such securities. 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 NON-FUNDAMENTAL
or sell them to the Fund's officers, Each Series may not buy from or sell
directors or employees, or to the Fund's to any of its officers, directors,
investment adviser or to its partners and employees, or its investment adviser
employees, other than capital stock of the or any of its officers, directors,
Series. partners or employees, any securities
other than shares of each Series'
common stock.
- ----------------------------------------------------------------------------------------------
SENIOR SECURITIES
FUNDAMENTAL FUNDAMENTAL
Each Series may not issue senior securities Each Series may not issue senior se-
as defined in the Act of (neither a purchase curities to the extent such issuance
or sale of options nor a collateral would violate applicable law.
arrangement 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
invest more than 5% of its assets in warrants if, at the time of the
warrants and not more than 2% in acquisition, its investment in
warrants not listed on the New York or warrants, valued at the lower of cost
American Stock Exchange, except when or market, would exceed 5% of such
they form a unit with other securities. As Series' total assets (included within
a matter of operating policy, no Series will such limitation, but not to exceed 2%
invest more than 5% of its assets in rights. of such Series' total assets, are
warrants which are not listed on the
New York or American Stock
Exchange or a major foreign
exchange).
- ----------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
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 agreements
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
8
<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 of the fees which are to be paid by the Series hereunder, the
Distributor shall not be
9
<PAGE>
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 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
10
<PAGE>
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 forgoing 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.
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
11
<PAGE>
LORD ABBETT DISTRIBUTOR LLC
By:_____________________________
12
<PAGE>
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 agreements
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
13
<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 of the fees which are to be paid by the Series hereunder, the
Distributor shall not be
14
<PAGE>
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 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
15
<PAGE>
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 forgoing 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.
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
16
<PAGE>
LORD ABBETT DISTRIBUTOR LLC
By:_____________________________
17
<PAGE>
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 agreements
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
18
<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 of the fees which are to be paid by the Series hereunder, the
Distributor shall not be
19
<PAGE>
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 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
20
<PAGE>
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 forgoing 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.
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
21
<PAGE>
LORD ABBETT DISTRIBUTOR LLC
By:_____________________________
22
<PAGE>
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, and subject
to the effective date provisions of paragraph 8 of this Plan, it is agreed as
follows.
1. The Fund hereby authorizes the Distributor to enter into agreements
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
23
<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 effective date hereof 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 of the fees which are to be paid by the Series hereunder, the
Distributor shall not be
24
<PAGE>
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 on the first day of the calendar
quarter subsequent to the Series' net assets reaching $50 million.
Notwithstanding the foregoing, the Plan shall become effective on such date and
shall continue in effect thereafter only so long as such continuance is
specifically approved at least annually from the date hereof 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
25
<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 forgoing 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.
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
26
<PAGE>
LORD ABBETT DISTRIBUTOR LLC
By:_____________________________
27
<PAGE>
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 effective date provisions of paragraph 8 of this Plan, it is agreed as
follows.
1. The Fund hereby authorizes the Distributor to enter into agreements
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
28
<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 effective date hereof 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 of the fees which are to be paid by the Series hereunder, the
Distributor shall not be
29
<PAGE>
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 on the first day of the calendar
quarter subsequent to the Series' net assets reaching $100 million.
Notwithstanding the foregoing, the Plan shall become effective on such date and
shall continue in effect thereafter only so long as such continuance is
specifically approved at least annually from the date hereof 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
30
<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 forgoing 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.
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
31
<PAGE>
LORD ABBETT DISTRIBUTOR LLC
By:_____________________________
32
<PAGE>
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, and subject
to the effective date provisions of paragraph 8 of this Plan, it is agreed as
follows.
1. The Fund hereby authorizes the Distributor to enter into agreements
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
33
<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 effective date hereof 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 of the fees which are to be paid by the Series hereunder, the
Distributor shall not be
34
<PAGE>
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 on the first day of the calendar
quarter subsequent to the Series' net assets reaching $100 million.
Notwithstanding the foregoing, the Plan shall become effective on such date and
shall continue in effect thereafter only so long as such continuance is
specifically approved at least annually from the date hereof 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
35
<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 forgoing 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.
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
36
<PAGE>
LORD ABBETT DISTRIBUTOR LLC
By:_____________________________
37
<PAGE>
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 effective date provisions of paragraph 8 of this Plan, it is agreed as
follows.
1. The Fund hereby authorizes the Distributor to enter into agreements
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
38
<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 effective date hereof 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 of the fees which are to be paid by the Series hereunder, the
Distributor shall not be
39
<PAGE>
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 on the first day of the calendar
quarter subsequent to the Series' net assets reaching $100 million.
Notwithstanding the foregoing, the Plan shall become effective on such date and
shall continue in effect thereafter only so long as such continuance is
specifically approved at least annually from the date hereof 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
40
<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 forgoing 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.
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
41
<PAGE>
LORD ABBETT DISTRIBUTOR LLC
By:_____________________________
42
<PAGE>
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, and subject
to the effective date provisions of paragraph 8 of this Plan, it is agreed as
follows.
1. The Fund hereby authorizes the Distributor to enter into agreements
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
43
<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.
44
<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 on the first day of the calendar
quarter subsequent to the Series' net assets reaching $50 million.
Notwithstanding the foregoing, the Plan shall become effective on such date and
shall continue in effect thereafter only so long as such continuance is
specifically approved at least annually from the date hereof 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
45
<PAGE>
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 forgoing 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.
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
46
<PAGE>
LORD ABBETT DISTRIBUTOR LLC
By:_____________________________
47
<PAGE>
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, and subject
to the effective date provisions of paragraph 8 of this Plan, it is agreed as
follows.
1. The Fund hereby authorizes the Distributor to enter into agreements
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
- --
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
48
<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.
49
<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 on the first day of the calendar
quarter subsequent to the Series' net assets reaching $100 million.
Notwithstanding the foregoing, the Plan shall become effective on such date and
shall continue in effect thereafter only so long as such continuance is
specifically approved at least annually from the date hereof 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
50
<PAGE>
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 forgoing 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.
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
51
<PAGE>
LORD ABBETT DISTRIBUTOR LLC
By:_____________________________
52
<PAGE>
EXHIBIT C
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION OF THE FUND AUTHORIZING
THE BOARD OF DIRECTORS TO CREATE NEW CLASSES AND SERIES OF SHARES OF THE
CAPITAL STOCK OF THE FUND AND CONFIRMING THAT THE FUND MAY IMPOSE CONTINGENT
DEFERRED SALES CHARGES IN CONNECTION WITH ITS RULE 12B-1 PLANS
--------------------------------------------------------------------------
The following text shows those provisions of the Articles of Incorporation of
the Fund that are to be amended; the text that is lined through shows deletions
and the text that is double underlined indicates additions.
ARTICLE V
SECTION 1. The total number of shares which the Corporation has authority to
issue is 1,000,000,000 shares of capital stock of the par value of $.001 each
(the "Shares"), having an aggregate par value of $1,000,000. The
=========
Board of Directors of the Corporation shall have full power and authority,
==========================================================================
from time to time, to classify or reclassify any unissued Shares, including,
===== ============
without limitation, the power to classify or reclassify unissued shares into
=============================================================================
series, and to classify or reclassify a series into one or more classes of
==========================================================================
stock that may be invested together in the common investment portfolio in which
===============================================================================
the series is invested, by setting or changing the preferences, conversion or
=======================
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption of such shares of stock.
================
All Shares of a series shall represent the same interest in the Corporation and
===============================================================================
have the same preferences, conversion or other rights, voting powers,
===============================================================================
restrictions, limitations as to dividends, qualifications, and terms and
===============================================================================
conditions of redemption as the other Shares of that series, except to the
===============================================================================
extent that the Board of Directors provides for differing preferences,
===============================================================================
conversion or other rights, voting powers, restrictions, limitations as to
===============================================================================
dividends, qualifications, or terms or conditions of redemption of Shares of
===============================================================================
classes of such series as determined pursuant to Articles Supplementary filed
===============================================================================
for record with the State Department of Assessments and Taxation of Maryland, or
================================================================================
as otherwise determined pursuant to these Articles or by the Board of Directors
===============================================================================
in accordance with law. The Shares shall initially be classified into nine
==========================================================================
series designated initially as
==============================
<PAGE>
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:
================================================
(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
2
<PAGE>
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 account of the Corporation.
=====
Such liabilities, expenses, costs, charges and reserves, together with any
unallo cated 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
3
<PAGE>
particular series shall belong to that series. Each such allocation
====== ======
by the Board of Directors shall be conclusive and binding upon the stockholders
of all series for all purposes. 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 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
====================
4
<PAGE>
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 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
5
<PAGE>
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 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.
6
<PAGE>
(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 account to at
least 25 Shares, or such lesser number of Shares as is specified in the
resolution.
Article VII
SECTION 1.
(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
7
<PAGE>
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 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
8
<PAGE>
to that series legally available for such purpose whether arising out
======
of paid-in surplus, other surplus, net profits or otherwise, to such extent
and in such manner and upon such terms as the Board of Directors shall deem
expedient, and to pay for such Shares in cash 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.
===============================================================
9
<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 series (as such terms are defined in
====================================
subsection (b) of Section 2 of Article V), in each case as of such determination
================================================================================
time.
=====
10
<PAGE>
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) series or classes are required to vote as a single series or
================= =========
class (each such single series or class, a "Combined Class"), the presence in
============================================================
person or by proxy of the holders of one-third of the Shares of that Separate
Class or Combined Class, as the case may be, issued and outstanding and entitled
to vote thereat shall constitute a quorum for such vote. If, however, a 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
11
<PAGE>
series, such Separate Class or such Combined Class, as the case may be, present
======
in person or by proxy and entitled to vote shall have power to adjourn the
meeting from time to time as to all series, such Separate Class or such
======
Combined Class, as the case may be, without notice other than announcement at
the meeting, until the requisite number of Shares entitled to vote at such
meeting shall be present. At such adjourned meeting at which the requisite
number of Shares entitled to vote thereat shall be represented any business may
be transacted which might have been transacted at the meeting as originally
notified. The absence from any meeting of stockholders of the number of Shares
in excess of one-third of the Shares of all series or classes, or of the
==================
affected series or classes, as the case may be, which may be required by the
====== =======
laws of the State of Maryland, the Investment Company Act of 1940 or any other
applicable law, or by these Articles of Incorporation, for action upon any
given matter shall not prevent action at such meeting upon any other matter or
==
matters which may properly come before the meeting, if there shall be present
thereat, in person or by proxy, holders of the number of Shares required for
action in respect of such other matter or matters.
SECTION 5. Any determination as to any of the following matters made by or
pursuant to the direction of the Board of Directors consistent with these
Articles of Incorporation and in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of duties, shall be final and conclusive
and shall be binding upon the Corporation and every holder of the Shares, of any
=
series or class, namely, the amount of the assets, obligations, liabilities and
===============
expenses of the Corporation or belonging to any series or with respect to any
== =============================
class; the amount of the net income of the Corporation from dividends and
=====
interest for any period and the amount of assets at any time legally available
for the payment of dividends with respect to any series or class; the amount of
===============
paid-in surplus, other surplus, annual or other net profits, or net assets in
excess of capital, undivided profits, or excess of profits over losses on sales
of securities belonging to the Corporation or any series or class; the amount,
======================================
purpose, time of creation, increase or decrease, alteration or cancellation of
any reserves or charges and the propriety thereof (whether or not any
obligation or liability for which such reserves or charges shall have been
created shall have been paid or discharged) with respect to the Corporation
===============
or any series or class; the market value, or any sale, bid or asked price to be
======================
applied in determining the market value, of any security owned or held by the
Corporation; the fair value of any asset owned by the Corporation; the number of
Shares of the Corporation of any series or class issued or issuable;
=============== ========
the existence of conditions permitting the postponement of payment of the
==
repurchase price of Shares of any series or class or the suspension of the
===============
right of redemption as provided by law; any matter relating to the acquisition,
holding and disposition of securities and other assets by the Corporation; 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
12
<PAGE>
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.
13
<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
Tel. No. (212) 848-1800
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.
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 autho rized 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
Tel. No. (212) 848-1800
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.
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 autho rized 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
Tel. No. (212) 848-1800
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.
1
<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 autho rized 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
Tel. No. (212) 848-1800
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 autho rized 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
Tel. No. (212) 848-1800
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 autho rized 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
Tel. No. (212) 848-1800
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 autho rized 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
Tel. No. (212) 848-1800
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 autho rized 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
Tel. No. (212) 848-1800
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 autho rized 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
Tel. No. (212) 848-1800
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 autho rized officers should sign for corporations.
Date:......................................................
Signature(s) of Shareholder(s) as shown at left
.............................................................
.............................................................
(Please read other side)
3
