Traditional IRA and Roth IRA by liuqingyan

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									LORD ABBETT


Lord Abbett Retirement Planning
Traditional IRA and Roth IRA
Application Booklet




                                  1
How to Open Your Lord Abbett IRA Account
                  1 Be sure to read the Universal Individual Retirement Account
                    Information Kit and Custodial Account Agreement before opening
                    an account.

                  2 Complete the IRA Application.

                  3 If you wish to transfer existing assets from another institution to a
                    Lord Abbett IRA, also complete the Transfer and Rollover Form.

                  4 Mail all forms in the business reply envelope.




2
 LORD ABBETT

IRA APPLICATION AND CUSTODIAL ACCOUNT ADOPTION AGREEMENT
Use this form to establish a Lord Abbett Traditional, Rollover, Roth, SEP and SAR-SEP IRA Only. Please complete one application per IRA.
• Make check(s) payable to Lord Abbett Family of Funds (Please include                Mail completed and signed IRA application form to:
  applicant's name and Social Security Number.                                        Regular Mail:                            Overnight Mail:
                                                                                      Lord Abbett Service Center               Lord Abbett Service Center
• Retain the Universal Individual Retirement Account Information Kit for your         P.O. Box 219336                          330 West 9th Street
  records.                                                                            Kansas City, MO 64121-9336               Kansas City, MO 64105
                                                                                      Please call us at 800-842-0828 if you have any questions.
                                                                                      (Monday-Friday between 8:30 a.m. and 6:00 p.m. EST)

1 Applicant Information: (please print)                                                                                                             Mr.       Mrs.      Ms.

   Name                                                                                 Social Security Number

   Address                                                                              Date of Birth (month, day, year)

   City                                               State         Zip Code            Daytime Phone Number

   Email Address                                                                        Evening Phone Number

   Country of Permanent Residence
      Check this box if applicant is a MINOR (please complete Section 3).
      Check this box if your first annual Custodial Fee is enclosed. The annual Custodial Fee is $10. If you do not enclose the Custodial Fee, your Account will be
      debited annually.

2 Type of IRA
      Traditional IRA                              Roth Conversion IRA                          Roth Combination IRA
      Roth IRA                                     Direct Rollover                              SEP-IRA/SAR-SEP IRA*
   * Complete Section 4 (SEP-IRA/SAR-SEP IRA)
   It may be beneficial to combine your IRA Accounts. Please consult your tax advisor before proceeding, as only IRAs of certain types
   may be combined.
   Special Note: For additional IRA information, please refer to the “Universal Individual Retirement Account Information Kit” which
   includes the Custodial Agreement.
3 IRA for a Minor (if applicable)                                                   4 SEP-IRA/SAR-SEP IRA (if applicable)

   Name of Guardian for Minor (first, middle, last)                                      Print Full Name of Employer

   Relationship of Guardian to Minor (parent, grandparent, etc.)                         Address of Employer

                                                                                         City                                                         State          Zip Code

                                                                                         Contact Name and Phone Number (required)

5 Investment Professional’s Information (This section to be completed by the Broker/Dealer)

   Investment Professional’s Name (please print)                                         Investment Professional’s Phone Number (required)

   Investment Professional's Dealer Firm                                                 Investment Firm's Phone Number (if different from above)

   Branch/Agency                                                                         Branch Number

   Branch Address                                                                        Investment Professional’s Identification Number

   City                            State                Zip Code                         Investment Professional's Signature

   Notice to Broker/Dealer: Do not process through your order room. Mail Application and check to the Lord Abbett Service Center.
                                                                                                                                                                          3
    6 Investment Instructions
                    I have enclosed a check for $_______ (the minimum initial investment is $250 for each Lord Abbett fund selection)
                    as a contribution for tax year ____. (If no year is indicated, Lord Abbett will assume that contribution is for the year in which it is received.)
                   I wish to utilize the Invest-A-Matic privilege (please complete Section 11)
                   I have enclosed a Transfer and Rollover Form (if applicable)
                 Under the provisions of my IRA Account, I have the right to direct the investments. I understand, however, that the investment options available to
                 me are limited to those shown below and are governed by the terms of the current Prospectus for the Funds. By giving instructions to invest in a
                 Fund, I acknowledge receipt of such Prospectus.
                 IMPORTANT: Please check appropriate Fund and Share Class in the box to the left of the Fund numbers. Also, please indicate
                 the percentage (%) or dollars ($) to be allocated to each Fund. If you are transferring or rolling over your IRA assets and the
                 amount is unknown, or you are using Lord Abbett’s Asset Allocation Service, please indicate the percentage(s) to be allocated to
                 each Fund. (Total must equal 100%.)

                    Fund                                                                       Class A              Class B               Class C           Dollar Amount                  Percentage
                    Lord Abbett Alpha Fund                                                       (265)                 (564)                 (679)              ___________                ___________
                    Lord Abbett All Value Fund                                                   (262)                 (561)                 (243)              ___________                ___________
                    Lord Abbett Developing Growth Fund                          (1)
                                                                                                                    This Fund is closed to new investors.
                    Lord Abbett Global Equity Fund(2)                                            (4)                   (553                  (663)              ___________                ___________
                    Lord Abbett Growth Opportunities Fund                                        (260)                 (566)                 (680)              ___________                ___________
    Growth
    Funds




                    Lord Abbett International Fund            (2)
                                                                                                 (263)                 (562)                 (677)              ___________                ___________
                    Lord Abbett Large-Cap Growth Fund                                            (270)                 (569)                 (683)              ___________                ___________
                    Lord Abbett Mid-Cap Value Fund                                               (16)                  (560)                 (676)              ___________                ___________
                    Lord Abbett Small-Cap Blend Fund                                             (587)                 (588)                 (589)              ___________                ___________
                    Lord Abbett Small-Cap Value Fund                   (1)
                                                                                                                    This Fund is closed to new investors.
                    Lord Abbett Affiliated Fund                                                  (11)                  (550)                 (661)              ___________                ___________
    Income Funds
      Growth &




                    Lord Abbett America’s Value Fund (3)                                         (573)                 (574)                 (575)              ___________                ___________
                    Lord Abbett Balanced Fund(3)                                                 (259)                 (565)                 (667)              ___________                ___________
                    Lord Abbett Large-Cap Research Fund                                          (46)                  (552)                 (675)              ___________                ___________
                    Lord Abbett Bond-Debenture Fund                     (3)
                                                                                                 (13)                  (557)                 (673)              ___________                ___________
                    Lord Abbett Core Fixed Income Fund                                           (273)                 (570)                 (684)              ___________                ___________
                    Lord Abbett High Yield Fund         (3)
                                                                                                 (266)                 (567)                 (681)              ___________                ___________
    Income
     Funds




                    Lord Abbett Global Income Fund                  (2)(3)(4)
                                                                                                 (8)                   (554)                 (664)              ___________                ___________
                    Lord Abbett U.S. Government Fund                     (5)
                                                                                                 (12)                  (555)                 (665)              ___________                ___________
                    Lord Abbett Limited Duration U.S. Government Fund (5)                        (249)                  N/A                  (668)              ___________                ___________
                    Lord Abbett Total Return Fund             (2)(3)
                                                                                                 (275)                 (571)                 (585)              ___________                ___________
    Money Market




                    Lord Abbett U.S. Government Money Market Fund                     (5)(6)
                                                                                                 (15)               (558)  (7)
                                                                                                                                          (240)   (8)
                                                                                                                                                                ___________                ___________
        Fund




                    Other Lord Abbett Fund: ____________________                                                                                                ___________                ___________
                    Other Lord Abbett Fund: ____________________                                                                                                ___________                ___________
                                                                                                                                                                $__________                100%
           IMPORTANT NOTE: All distributions will be reinvested. Exchange privilege is offered within the same class of shares for the Funds listed above.
           State Street Bank and Trust Company (“State Street”), as Custodian of your IRA, charges an annual fee of $10 per active participant per IRA. You may enclose a separate
           check for this fee, or include the fee in your purchase total. Fee is subject to change.
           (1)
               The Fund is closed to new investors.
           (2)
               The Fund invests substantially or significantly in foreign stocks which tend to be more volatile than U.S. stocks. Investments in foreign securities present increased market, liquidity, currency,
               political, informational and other risks.
           (3)
               The Fund invests substantially or significantly in high-yield securities, sometimes called “junk bonds” These securities carry increased risks of price volatility, liquidity and the possibility of
               default in the timely payment of interest and principal.
           (4)
               The Fund may use foreign currency forwards and options in an attempt to hedge currency risk and may employ other derivatives.
           (5)
               An investment in this Fund is neither insured nor guaranteed by the U.S. Government.
           (6)
               An investment in the Fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation nor any other government agency. Although the Fund seeks to preserve the
               value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. This Fund is managed to maintain, and has maintained, its stable $1.00 per share price.
           (7)
               A special application for Class B share purchases is available through Lord Abbett Distributor LLC at 800-847-3733.
           (8)
               Available for exchanges only.


4
7 Beneficiary Designation (If you have an additional primary beneficiary, or wish to designate an additional contingent beneficiary, please attach a separate list.
    If you cannot accomplish your estate planning objectives by using Section 7 to designate your beneficiary(ies), you may submit another form of written beneficiary desig-
    nation to the Custodian.)
    Upon my death, distribute all fund accounts in my IRA in equal shares, unless otherwise specified, to each primary beneficiary listed below who survives me. I revoke all
    prior beneficiary designations, if any, made by me for these assets. I understand that I may change or add beneficiaries at any time by written notice to the Custodian.
    If no beneficiary is designated, assets will be paid to your estate. If the Custodian receives satisfactory proof that a primary beneficiary has predeceased the appli-
    cant, the assets will be paid to the contingent beneficiary.
    The applicant may change the beneficiary(ies) designated below at any time after the account is established by filing a new Beneficiary Designation with the Custodian.
    Any such subsequent beneficiary designation will revoke all prior Designations.


    Primary Beneficiary(ies)
    First Name/Middle Initial/Last Name or                 Social Security Number Share %                         Date of Birth (mm-dd-yy) Relationship or Trust                       Per Stirpes*
    Name of Trust and Trustee                               or Tax ID Number                                      or Date of Trust                                                     Yes or No
    1.
    2.
                                                                                             Total = 100%


    Contingent Beneficiary(ies)
    First Name/Middle Initial/Last Name or                 Social Security Number Share %                         Date of Birth (mm-dd-yy) Relationship or Trust                       Per Stirpes*
    Name of Trust and Trustee                              or Tax ID Number                                       or Date of Trust                                                     Yes or No
    1.
    2.
                                                                                             Total = 100%

  * Per Stirpes. When a “Per Stirpes” distribution to a designated Beneficiary's descendants is provided for under this Account, the amount of such distribution shall be divided into as many equal
    shares as there are then living children of such Beneficiary and then deceased children represented by descendants then living, and each then living child shall receive one share, and the share of
    each deceased child shall be divided among his or her descendants in the same manner, repeating this pattern with respect to succeeding generations until all shares are determined.
    Spousal Consent (This section should be reviewed if the applicant is married and designates a beneficiary other than the spouse. It is the applicant’s responsibility to determine if
    this section applies. If the applicant is married and resides in a community property or marital property state (AZ, CA, ID, LA, NM, NV,TX,WA, or WI), the applicant may need to obtain
    his/her spouse’s consent if the applicant has not designated his/her spouse as the Primary Beneficiary for at least half of the Account. The applicant may need to consult with legal coun-
    sel. Neither the Custodian nor the plan sponsor is liable for any consequences resulting from the applicant’s failure to provide proper spousal consent.)
    I am the spouse of the above-named applicant. I acknowledge that I have received a full and reasonable disclosure of my spouse’s property and financial obligations. Due
    to any possible consequences of giving up my community property or marital property interest in this IRA, I have been advised to see a tax professional or legal advisor.
    I hereby consent to the beneficiary designation(s) indicated above. I assume full responsibility for any adverse consequence that may result. No tax or legal advice was given
    to me by the Custodian or Plan Sponsor.

    Signature of Spouse                                                                                                                                   Date


    Signature of Witness for Spouse                                                                                                                       Date




                                                                                                                                                                                                  5
    8 Information and Certifications Concerning Tax Withholding
       By signing this form, the applicant certifies that he/she is a U.S. Person (a U.S. citizen or a resident alien) or a Foreign Person (a nonresident
       alien), as indicated by checking the appropriate box below, and makes the related certifications.
       Applicant is a (check one)
          U.S. Person. Applicant certifies that the number shown in Section 1 of this Adoption Agreement is the applicant’s correct Social Security num-
          ber (or the applicant is waiting to be issued a Social Security number); and
          The applicant is not subject to backup withholding because: (a) the applicant is exempt from backup withholding, or (b) the applicant has not
          been notified by the Internal Revenue Service ("IRS") that the applicant is subject to backup withholding as a result of failure to report all
          interest or dividends, or (c) the IRS has notified the applicant that applicant is no longer subject to backup withholding. (NOTE: Cross out this
          sentence if the applicant has been notified by the IRS that the applicant is currently subject to backup withholding because of failure to report
          all interest and dividends on the applicant’s tax return.)
          Foreign Person. Applicant acknowledges that the IRS does not require consent to any provisions of this document other than the
          Form W-8BEN certification required to avoid backup withholding and qualify for a tax treaty rate of withholding (see IRS Publication 515).

    9 Signature and Acknowledgement
       Applicant has received and read the applicable sections of the “Universal Individual Retirement Account Information Kit” related to this Account
       (including the Custodian’s fee schedule), the Custodial Account document, and the “Instructions” pertaining to this Adoption Agreement. If the distribu-
       tion is from another Traditional or Roth IRA, the applicant certifies he/she has not made another rollover within the one-year period immediately pre-
       ceding this rollover; that such distribution was received within 60 days of making the rollover to this account; and that no portion of the amount rolled
       over is a required minimum distribution under the required distribution rules.
       If the applicant has indicated a conversion or a rollover of an existing Traditional IRA to a Roth IRA, applicant acknowledges that the amount con-
       verted will be treated as taxable income (except for prior nondeductible contributions) for federal income tax purposes. If applicant has indicated
       a rollover from another Roth IRA, applicant certifies that the information given above is correct and acknowledges that adverse tax conse-
       quences or penalties could result from giving incorrect information.
       If the applicant is a minor under the law of the applicant’s state of residence, a parent or guardian must also sign the Adoption Agreement. Until
       the applicant reaches the age of majority, the parent or guardian will exercise the powers and duties of the applicant.
       Applicant acknowledges and understands that the beneficiaries named herein may be changed or revoked at any time by filing a new designation
       in writing with the Custodian. All forms must be acceptable to the Custodian, and applicant must sign and date.

       Signature of Applicant (or Minor’s Guardian, if applicable)                                                           Date

       Custodian Acceptance: State Street and Trust Company will accept appointment as Custodian of the applicant's account. However, this
       Agreement is not binding upon the Custodian until the applicant has received a statement of the transaction. Receipt by the applicant of a confir-
       mation of the purchase of the Fund shares indicated in Section 6 will serve as notification of State Street and Trust Company's acceptance of
       appointment as Custodian of the applicant's account.
       State Street Bank and Trust Company, Custodian




6
SPECIAL IRA ACCOUNT OPTIONS
10 Optional: Discount Privileges
   Rights of Accumulation: I currently have the following Account(s), which may make me eligible for sales charge discounts on purchases of Class A shares through Rights
   of Accumulation and/or Statement of Intention. I have attached a separate sheet for additional Accounts or a copy of the appropriate brokerage statement if applicable.
           Lord Abbett Account Number(s):                         Broker/Dealer Account Number(s) (if applicable):                                Name of Fund(s):




   Statement of Intention: I agree to the Statement of Intention. I understand purchases only apply to eligible Class A shares of Lord Abbett Family of Funds. I
   understand purchases of Lord Abbett U.S. Government Securities Money Market Fund and Lord Abbett Series Fund do not apply. I understand that there is no oblig-
   ation, but it is my intent to invest in Lord Abbett Funds over a thirteen-month period from the effective date, an aggregate amount (which may include both IRA and
   non-IRA monies) at least equal to:
      $50,000                  $100,000              $250,000               $500,000                       $1,000,000


   Applicant Signature                                                                                                  Effective Date (date of initial purchase)
                                    Any purchases made within the past 90 days can be included as part of your Statement of Intention.
                                                 You must notify the Fund or Lord Abbett of previous eligible purchases.


11 Optional Service: Invest-A-Matic (Dollar-Cost Averaging)
   This section will be kept on file as authority to debit your bank account.
   Please enclose an unsigned check for the bank account from which your investment will be made.Write “Void” on the face of the check and
   attach it to this Form.Your investment will be made in the Fund Account you are establishing with this Application.

   Shareholder’s Bank                                                                                                   Bank’s Telephone Number


   Bank’s Address                                                                       City                                             State                 Zip Code

   Please honor debit instructions sent by the Fund for purchasing shares of the Lord Abbett sponsored Funds.Your authority to do so shall continue until you
   receive written revocation by me.You may terminate your participation by written notice to the Fund or to me.Your rights, regarding each debit instruction, shall
   be the same as if the instructions were signed by me; you shall be under no liability for dishonor.


   Depositor’s Name                                                                                                     Bank Account Number


   Depositor’s Signature                                                                                                Depositor’s Social Security Number
   Investments: debit bank account on the                         5th            20th
   Frequency:            twice a month         monthly            every other month            quarterly         Start in month of
   Amount of each investment: (Minimum investment is $50; Maximum annual investment is $3,000, $3,500 age 50 or older.) $
   IMPORTANT NOTE: Signature guarantee is required for Invest-A-Matic when the shareholder name on the retirement account registra-
   tion differs from the shareholder name(s) on the bank account registration. To obtain a signature guarantee, sign this Form in the presence of an
   authorized person at a broker/dealer firm or other financial institution, such as a bank or trust company. A notarization from a Notary Public does not meet sig-
   nature guarantee requirements.


   Signature Guarantee stamp and authorized signature and title                                                                                                     Date




                                                                                                                                                                           7
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8
 LORD ABBETT


TRANSFER AND ROLLOVER FORM
Use this form to transfer your account type, as outlined in Section 4 below, to a Lord Abbett IRA.

• Make check(s) payable to: Lord Abbett Family of Funds (Please include                  Mail completed and signed Transfer and Rollover Form to:
  investor's name, Social Security Number and account number).                           Regular Mail:                          Overnight Mail:
• Please forward a copy of a current account statement for the account                   Lord Abbett Service Center             Lord Abbett Service Center
  you wish to transfer to Lord Abbett.                                                   P.O. Box 219336                        330 West 9th Street
                                                                                         Kansas City, MO 64121-9336             Kansas City, MO 64105
• A complete IRA Application is also required for all new Accounts.
                                                                                         Please call us at 800-842-0828 if you have any questions.
• Retain a photocopy this Transfer and Rollover Form for your records.                   (Monday-Friday between 8:30 a.m. and 6:00 p.m. EST)



1 Investor Information

     Name                                                                                 Social Security Number


     Address                                                                              Daytime Phone Number


     City                                            State             Zip Code


     Investment Professional's Name (please print)                                        Investment Professional's Phone Number (required)


2 Investment Instructions (please choose investment option A or B)
     A.      Invest proceeds in a new Lord Abbett account. (I have attached a completed IRA Application.)
     B.        Invest proceeds in my existing* Lord Abbett IRA account according to the following:

                  Lord Abbett Fund Name(s)                            Lord Abbett Account Number(s)                             Percentage




                                                                                                                         Total must equal 100%
                  *Please consult your tax advisor regarding transfers between different types of accounts.

3 Account to be Transferred (Who is currently holding your Account?)
     Name of Existing Trustee/Custodian (Please see Special Note in Section 5)              Contact Name


     Address of Trustee/Custodian (required)                                                Contact's Phone Number (required)


     City                                            State             Zip Code             Account Number (required)


4 Type Of Account You Are Transferring (check one)
                     Traditional IRA                                       Direct Rollover                                    SEP IRA
                     Rollover IRA                                          Roth IRA                                           SAR-SEP IRA
                     Qualified Plan                                        403(b) Plan                                        457(b) Plan
                     SIMPLE IRA (Account must be at least 2 years old prior to transfer.)



                                                                                                                                                             9
5 Transfer Instructions (Instructions to custodian of existing account)
     If the account previously listed in Section 3 contains shares of Lord Abbett Fund(s), you may choose to transfer them “in-kind” (see Option 2).
     To transfer all other assets, they must be liquidated.
     Option 1
             Please liquidate the account(s) listed in Section 3 and issue a check(s) payable to Lord Abbett Family of Funds.
            Amount to liquidate:_______                        All                      Partial liquidation of $___________
            When to liquidate:_______                              Immediately          At Maturity* ____/____/____
                                                                                                              Maturity date
     Option 2
            Please transfer “in-kind” to the Lord Abbett Fund(s) held in the account listed in Section 3. All non-Lord Abbett Funds will be liquidated.
     Special Note:
     For all transfers, you must contact your current Custodian or Employer to ensure that all requirements are met.
     *Transfer instructions of CD proceeds must be received at least two weeks prior to maturity but no more than 60 days until maturity. If you liquidate a CD prior to maturity, you
      may incur a penalty.

6 Signature and Agreement
     The undersigned certifies to the present Custodian or Trustee that the undersigned has established an Individual Retirement Custodial Account
     meeting the requirements of Internal Revenue Code Section 408(a), 408(k) or 408A (as the case may be) to which assets will be transferred, and cer-
     tifies to State Street Bank and Trust Company that the account from which assets are being transferred meets the requirements of Internal Revenue
     Code Section 401(a), 403(b), 408(a), 408(k), 408A or 457(b) (whichever case may be appropriate).
     The undersigned acknowledges receipt of the current Prospectus(es) for each Lord Abbett-managed Fund in which an investment is to be made; the
     undersigned acknowledges receipt of the Universal Individual Retirement Account Information Kit and the undersigned represents that he/she has
     signed the Lord Abbett IRA Application and it has been executed.


     Signature of Individual (or Minor’s Guardian if applicable)                                   Date

     Signature Guarantee: If you are liquidating securities, your existing Trustee/Custodian may require a Signature Guarantee (Please contact your
     Trustee/Custodian to determine whether a Signature Guarantee is required). To obtain a signature guarantee, sign this Form in the presence of an
     authorized person at a broker/dealer firm or other financial institution, such as a bank or trust company. A notarization from a Notary Public does
     not meet signature guarantee requirements.


     Signature Guarantee stamp and authorized signature and title


7 Custodian's Acceptance
     State Street Bank and Trust Company agrees to accept the transfer of the above amount for deposit to the investor’s State Street Bank and Trust
     Company Individual Retirement Custodial Account, and requests the liquidation and the transfer of assets as indicated above.

     State Street Bank and Trust Company, Custodian

8 Instructions to Current Trustee/Custodian
     All non-Lord Abbett Funds must be liquidated prior to transfer. Send completed and signed Transfer and Rollover Form to:
     Regular Mail:                                         Overnight Mail:
     Lord Abbett Service Center                            Lord Abbett Service Center
     P.O. Box 219336                                       330 West 9th Street
     Kansas City, MO 64121-9336                            Kansas City, MO 64105
     Make check(s) payable to Lord Abbett Family of Funds. Please indicate the Lord Abbett Fund, account number and investor’s Social
     Security Number on all documents. Please call us at 800-842-0828 if you have any questions. (Monday - Friday between 8:30 a.m.
     and 6:00 p.m. EST).




10
   UNIVERSAL INDIVIDUAL RETIREMENT ACCOUNT INFORMATION KIT
INTRODUCTION                                                  not apply to any amount distributed to the IRS under a         This Universal IRA Information Kit contains information
                                                              levy for unpaid taxes.                                       and forms for both Traditional IRAs and Roth IRAs.
What’s new in the world of IRAs?                                                                                           However, you may use the Adoption Agreement in this
  An Individual Retirement Account (“IRA”) has always         What’s in this Kit?                                          Kit to establish only one Traditional IRA or one Roth IRA;
provided an attractive means to save money for the future       In this Kit, you will find detailed information about      separate Adoption Agreements must be completed if you
on a tax-advantaged basis. Recent changes to federal tax      Roth IRAs and the changes that have been made to             want to establish multiple (Roth or Traditional) IRA
law have now made the IRA an even more flexible               Traditional IRAs. You will also find everything you          accounts.
investment and savings vehicle. Among the changes is          need to establish and maintain either a Traditional or
the creation of the Roth Individual Retirement Account        Roth IRA, or to convert all or part of an existing           What’s the difference between a Traditional IRA
(“Roth IRA”), which was first available on January 1, 1998.                                                                and a Roth IRA?
                                                              Traditional IRA to a Roth IRA.
Under a Roth IRA, the earnings and interest on an indi-                                                                      With a Traditional IRA, an individual can contribute up
vidual’s non-deductible contributions grow without being        The first section of this Kit contains the instructions    to $3,000 per year beginning in 2002 and may be able to
taxed, and distributions may be tax-free under certain        and forms you will need to open a new Traditional or         deduct the contribution from taxable income, reducing cur-
circumstances. Most taxpayers (except for those with very     Roth IRA, to transfer from another IRA to a Lord Abbett      rent income taxes or, if you qualify, a tax credit is available.
high income levels) will be eligible to contribute to a       IRA, or to convert a Traditional IRA to a Roth IRA.          Taxes on investment growth and dividends are deferred
Roth IRA. A Roth IRA can be used instead of a Traditional                                                                  until the money is withdrawn. Withdrawals are taxed as
                                                                The second section of this Kit contains our Universal
IRA to replace an existing Traditional IRA, or to comple-                                                                  additional ordinary income when received. Non-
                                                              IRA Disclosure Statement. The Disclosure Statement is
ment a Traditional IRA you wish to maintain. Taxpayers                                                                     deductible contributions, if any, are withdrawn tax-free.
                                                              divided into three parts:
with adjusted gross income of up to $100,000 are eligible                                                                  Withdrawals before age 591⁄2 are assessed a 10% penalty
to convert existing Traditional IRAs into Roth IRAs. If you      Part One describes the basic rules and benefits,          in addition to income tax, unless an exception applies.
convert early in a year and later turn out to be ineligible      which are specifically applicable to your
because your gross income exceeds $100,000 (or for               Traditional IRA.                                            With a Roth IRA, the contribution limits are essentially
other reasons you wish to reverse the conversion), you                                                                     the same as Traditional IRAs, but there is no tax deduction
can “recharacterize” the conversion by transferring the          Part Two describes the basic rules and benefits,          for contributions. However, beginning in 2002, a tax
amount in the converted Roth IRA back to a Traditional           which are specifically applicable to your Roth IRA.       credit is available for shareholders who qualify (maximum
IRA. The details on conversion and recharacterization are                                                                  $1,000). All dividends and investment growth in the
                                                                 Part Three describes important rules and informa-         account are tax-free. Most important with a Roth IRA:
found on pages 16-17 in this booklet.                            tion applicable to all IRAs.                              there is no income tax on qualified withdrawals from
  Other IRA changes, starting in 1998, are as follows.          The third section of this Kit contains the State Street    your Roth IRA. Additionally, unlike a Traditional IRA,
First, Congress increased the income levels at which          Bank and Trust Company Universal IRA Custodial               there is no rule against making contributions to Roth IRAs
IRA holders, who participate in employer-sponsored            Agreement. The Custodial Agreement is also divided           after turning age 70 1⁄2, and there’s no requirement that
retirement plans can make deductible Traditional IRA          into three parts:                                            you begin making minimum withdrawals at that age.
contributions. The rules for deductible contributions by
an IRA holder whose spouse is a participant in an                Part One contains provisions specifically applica-        NOTE: If a minimum required distribution (MRD) is due
employer-sponsored retirement plan have been liberal-            ble to Traditional IRAs.                                  for a year from a Traditional IRA, the taxpayer cannot
ized. Second, the 10% penalty tax for premature with-                                                                      convert to a Roth IRA until the MRD has been made.
drawals (before age 59 1⁄2) will no longer apply in the          Part Two contains provisions specifically applicable
                                                                 to Roth IRAs.                                               The following chart highlights some of the major
case of withdrawals to pay certain higher education                                                                        differences between a Traditional IRA and a Roth IRA:
expenses or certain first-time homebuyer expenses.               Part Three contains provisions applicable to all
Beginning in the year 2000, the 10% penalty tax will             IRAs (Traditional and Roth).
                   CHARACTERISTICS                                                TRADITIONAL IRA                                                   ROTH IRA
    ELIGIBILITY                                               • Individuals (and their spouses) who receive                • Individuals (and their spouses) who receive
                                                                compensation                                                 compensation

                                                              • Individuals age 70 1⁄2 and over may not contribute         • Individuals age 70 1⁄2 and over may contribute


    TAX TREATMENT OF CONTRIBUTION                             • Subject to limitations, contributions are deductible       • No deduction permitted for amounts contributed but
                                                                and a tax credit may also be available if the individual     may receive a tax credit if the individual qualifies
                                                                qualifies

                                                              • Tax credit depends on filing status and Adjusted Gross
                                                                Income (AGI)

    CONTRIBUTION LIMITS                                       • Individuals may contribute up to $3,000 annually           • Individuals may generally contribute up to $3,000
                                                                (or 100% of compensation, if less)                           (or 100% of compensation, if less)

                                                              • Deductibility depends on income level and filing           • Ability to contribute phases out at income levels of
                                                                status for individuals who are active participants in an     $95,000 to $110,000 (individual taxpayer) and
                                                                employer-sponsored retirement plan                           $150,000 to $160,000 (married taxpayers filing jointly)

                                                                                                                           • Overall limit for contributions to Traditional and Roth
                                                                                                                             IRAs (but not including SEP or SIMPLE IRAs) is $3,000
                                                                                                                             annually (or 100% of compensation, if less)

    EARNINGS                                                  • Earnings and interest are not taxed when received by       • Earnings and interest are not taxed when received by
                                                                your IRA                                                     your IRA

    ROLLOVER/CONVERSIONS                                      • Individuals may rollover amounts held in employer-         • Rollovers from other IRAs only
                                                                sponsored retirement arrangements (401(k), SEP IRA,
                                                                etc.) tax-free to Traditional IRA                          • Amounts rolled over (or converted) from a non-Roth
                                                                                                                             IRA are subject to income tax in the year rolled
                                                                                                                             over or converted

    WITHDRAWALS                                               • Total (principal + earnings) taxable as income in year     • Not taxable as long as a qualified distribution—generally,
                                                                withdrawn (except for any prior non-deductible               account open for 5 years, and age 59 1⁄2
                                                                contributions)

                                                              • Minimum withdrawals must begin after age 70 1⁄2            • Minimum withdrawals not required after age 70 1⁄2




                                                                                                                                                                                       11
Is a Roth or a Traditional IRA right for me?                   IRAs described in these pages are called “Traditional      CONTRIBUTIONS
  We cannot act as your legal or tax advisor, therefore,     IRAs” to distinguish them from “Roth IRAs,” which first
we cannot tell you which kind of IRA is right for you.       became available in 1998. Roth IRAs are described in         When can I make contributions to a
                                                             Part Two of this Disclosure Statement. Contributions to      Traditional IRA?
The information contained in this Kit is intended to
provide you with the basic information and material          a Roth IRA are not deductible (regardless of your AGI),        You may make a contribution to your existing Traditional
you will need if you decide whether a Traditional or         but may be eligible for a tax credit depending on filing     IRA or establish a new Traditional IRA for a taxable
Roth IRA is better for you, or if you want to convert an     status and AGI and withdrawals that meet certain             year by the due date (not including any extensions) for
existing Traditional IRA to a Roth IRA. We suggest that      requirements are not subject to federal income tax;          your federal income tax return for the year. Usually
you consult with your accountant, lawyer or other tax        therefore, dividends and investment growth on                this is April 15 of the following year.
advisor, or with a qualified financial planner, to deter-    amounts held in the Roth IRA can escape federal
mine whether you should open a Traditional or Roth           income tax. Please see Part Two of this Disclosure           How much can I contribute to my Traditional IRA?
IRA or convert any or all of an existing Traditional IRA     Statement if you are interested in learning more about         For each year when you are eligible (see above), you
to a Roth IRA. Your tax advisor can also advise you as       Roth IRAs.                                                   can contribute up to the lesser of $3,000 or 100% of
to the state tax consequences that may affect whether                                                                     your compensation (or earned income, if you are self-
                                                               Traditional IRAs described in this Disclosure Statement
a Traditional or Roth IRA is right for you.                                                                               employed). Contributions allocated to year 2001 are
                                                             may be used as part of a simplified employee pension
                                                             (SEP) plan maintained by your employer. Under a SEP,         limited to $2,000 and a catch-up contribution is not
SEPS AND SIMPLES                                             your employer may make contributions to your                 permitted. Please note, under the tax laws, all or a por-
  The Lord Abbett Traditional IRA may be used in con-        Traditional IRA, and these contributions may exceed          tion of your contribution may not be deductible.
nection with a simplified employee pension (SEP) plan        the normal limits on Traditional IRA contributions.            If you and your spouse have Spousal Traditional IRAs,
maintained by your employer. To establish a Traditional                                                                   each spouse may contribute up to $3,000 to his or her
IRA as part of your Employer’s SEP plan, complete the          This Disclosure Statement does not describe IRAs
                                                             established in connection with a SIMPLE IRA program          IRA for a year as long as the combined compensation of
Adoption Agreement for a Traditional IRA, indicating in                                                                   both spouses for the year (as shown on your joint
the proper box that the IRA is part of a SEP plan. A Roth    maintained by your employer. Employers provide spe-
                                                             cial explanatory materials for accounts established as       income tax return) is at least $6,000. If the combined
IRA should not be used in connection with a SEP plan.                                                                     compensation of both spouses is less than $6,000, the
                                                             part of a SIMPLE IRA program. Traditional IRAs may
  A Roth IRA may not be used as part of an employer          be used in connection with a SIMPLE IRA program;             spouse with the higher amount of compensation may
SIMPLE IRA plan. (However, after two years, amounts          but for the first two years of participation, a special      contribute up to that spouse’s compensation amount, or
contributed to a SIMPLE IRA may be converted to a            SIMPLE IRA (not a Traditional IRA) is required.              $3,000 if less. The spouse with the lower compensation
Roth IRA.) A Traditional IRA may be used, but only                                                                        amount may contribute any amount up to that spouse’s
after an individual has been participating for two or                                                                     compensation plus any excess of the other spouse’s com-
                                                             YOUR TRADITIONAL IRA
more years (for the first two years, only a special                                                                       pensation over the other spouse’s IRA contribution.
                                                               This Part One contains information about your              However, the maximum contribution to either spouse’s
SIMPLE IRA may be used). SIMPLE IRA plans were
                                                             Traditional Individual Retirement Custodial Account          Traditional IRA is $3,000 for the year.
added by the 1996 tax law to provide an easy and
                                                             with State Street Bank and Trust Company as Custodian.
inexpensive way for small employers to provide retire-                                                                      If you (or your spouse) establish a new Roth IRA and
                                                             A Traditional IRA gives you several tax benefits. Earnings
ment benefits for their employees. If you are interested                                                                  make contributions to both your Traditional IRA and a
                                                             on the assets, held in your Traditional IRA, are not sub-
in a SIMPLE IRA plan at your place of employment,                                                                         Roth IRA, the combined limit on contributions to both
                                                             ject to federal income tax until withdrawn by you. You
call or write to the number or address given at the end                                                                   your (or your spouse’s) Traditional IRA and Roth IRA
                                                             may be able to deduct all or part of your Traditional
of the Disclosure Statement portion of this Kit.                                                                          for a single calendar year is $3,000.
                                                             IRA contribution on your federal income tax return and
                                                             you may be eligible for a tax credit depending on filing
OTHER POINTS TO NOTE                                                                                                        Taxpayers age 50 or over, determined anytime during
                                                             status and AGI. State income tax treatment of your
                                                                                                                          calendar year 2002 or later, may make an additional
  The Disclosure Statement in this Kit provides you          Traditional IRA may differ from federal treatment; ask
                                                                                                                          contribution called a “catch-up contribution.” The
with the basic information that you should know              your state tax department or your personal tax advisor
                                                                                                                          catch-up contribution is equal to an additional $500 per
about Lord Abbett Traditional IRAs and Roth IRAs.            for details.
                                                                                                                          year through 2005 and increases to $1,000 after 2005.
The Disclosure Statement provides general information
about the governing rules for these IRAs and the benefits      Be sure to read Part Three of this Disclosure Statement
                                                             for important additional information, including infor-       How do I know if my contribution is tax deductible?
and features offered through each type of IRA. However,
the Lord Abbett Adoption Agreement and the State Street      mation on how to revoke your Traditional IRA, invest-          The deductibility of your contribution depends upon
Custodial Agreement are the primary documents con-           ments and prohibited transactions, fees and expenses,        whether you are an active participant in any employer-
trolling the terms and conditions of your personal Lord      and certain tax requirements.                                sponsored retirement plan. Generally if you are not an
Abbett Traditional or Roth IRA, and these shall govern in                                                                 active participant, the entire contribution to your
the case of any difference with the Disclosure               ELIGIBILITY                                                  Traditional IRA is deductible.
Statement.                                                   What are the eligibility requirements for a                    If you are an active participant in an employer-spon-
                                                             Traditional IRA?                                             sored plan, your Traditional IRA contribution may still
  “You” or “your” when used throughout this Kit refer
to the person for whom the Lord Abbett Traditional or          You are eligible to establish and contribute to a          be completely or partly deductible on your tax return.
Roth IRA is established. A Roth IRA is either a Lord         Traditional IRA for a year if:                               This depends on the amount of your income.
Abbett Roth IRA or any Roth IRA established by any                                                                           Similarly, the deductibility of a contribution to a
                                                                You received compensation (or earned income if
other financial institution. A Traditional IRA is any                                                                     Traditional IRA for your spouse depends upon whether
                                                                you are self-employed) during the year for personal
non-Roth IRA offered by Lord Abbett or any other                                                                          your spouse is an active participant in any employer-
                                                                services you rendered. If you received taxable alimo-
financial institution excluding SIMPLE IRAs and                                                                           sponsored retirement plan. If your spouse is not an
                                                                ny, this is treated like compensation for IRA purposes.
Educational IRAs (recently renamed Coverdell                                                                              active participant, the contribution to your spouse’s
Education Savings Account).                                     You did not reach age 70 1⁄2 during the year.
                                                                                                                          Traditional IRA generally will be deductible. If your
                                                             Can I contribute to a Traditional IRA for my spouse?         spouse is an active participant, the Traditional IRA con-
                                                               For each year before the year when your spouse             tribution will be completely, partly or not deductible
LORD ABBETT                                                                                                               depending upon your combined income.
                                                             attains age 70 1⁄2, you can contribute to a separate
UNIVERSAL INDIVIDUAL RETIREMENT                              Traditional IRA for your spouse, regardless of whether         An exception to the preceding rules applies to
ACCOUNT DISCLOSURE STATEMENT                                 your spouse had any compensation or earned income            high-income married taxpayers, where one spouse is
                                                             in that year. This is called a “Spousal IRA.” To make        an active participant in an employer-sponsored retire-
Part One: DESCRIPTION OF TRADITIONAL IRAs                    a contribution to a Traditional IRA for your spouse,         ment plan and the other spouse is not. A contribution
                                                             you must file a joint tax return for the year with your      to the non-active participant spouse’s Traditional IRA
SPECIAL NOTE                                                 spouse. For a Spousal IRA, your spouse must set up           will be only partly deductible starting at an adjusted
  Part One of the Disclosure Statement describes the rules   a different Traditional IRA, separate from yours, to         gross income level on the joint tax return of $150,000,
applicable to Traditional IRAs, as of January 1, 2002.       which you contribute.                                        and the deductibility will be phased out as described


12
below over the next $10,000 so that there will be no                   How do I calculate my deduction if I fall in the                  What happens if I contribute more than allowed to
deduction at all with an adjusted gross income level                   “Partly Deductible” range?                                        my Traditional IRA?
of $160,000 or higher.                                                    If your AGI falls in the partly deductible range, you            The maximum contribution you can make to a
                                                                       must calculate the portion of your contribution that              Traditional IRA generally is $3,000 or 100% of com-
How do I determine my or my spouse’s “Active                           is deductible. To do this, multiply your contribution
Participant” status?                                                                                                                     pensation or earned income, whichever is less. Any
                                                                       by a fraction. The numerator is the amount by which               amount contributed to the IRA above the maximum
  Your (or your spouse’s) Form W-2 should indicate if                  your AGI exceeds the lower limit (for 2002 the lower              is considered an “excess contribution.” The excess
you (or your spouse) were an active participant in an                  limit is: $34,000 if single, or $54,000 if married filing         is calculated using your contribution limit, not the
employer-sponsored retirement plan for a year. If you                  jointly). The denominator is $10,000 (note that the               deductible limit. An excess contribution is subject to
have a question, you should ask your employer or the                   denominator for married, joint filers, increases to               excise tax of 6% for each year it remains in the IRA.
plan administrator. In addition, regardless of income                  $20,000 starting in 2007). Subtract this from your con-
level, your spouse’s “active participant” status will not              tribution and then round down to the nearest $10.                 How can I correct an excess contribution?
affect the deductibility of your contributions to your                 When you fall in the “partly deductible” range, the
Traditional IRA if you and your spouse file separate tax               deductible amount is the greater of the amount calcu-               Excess contributions may be corrected without
returns for the taxable year and you lived apart at all                lated or $200 (provided you contribute at least $200).            paying a 6% penalty. To do so, you must withdraw
times during the taxable year.                                         If your contribution is less than $200, then the entire           the excess and any earnings on the excess before the
                                                                       contribution is deductible.                                       due date (including extensions) for filing your federal
What are the deduction restrictions for active                                                                                           income tax return for the year for which you made the
participants?                                                            For example, assume that you make a $3,000 contri-              excess contribution. A deduction should not be taken
                                                                       bution to your Traditional IRA in 2002, a year in which           for any excess contribution. Earnings on the amount
  If you (or your spouse) are an active participant in an
                                                                       you are an active participant in your employer’s retire-          withdrawn must also be withdrawn. The earnings must
employer plan during a year, the contribution to your
                                                                       ment plan. Also assume that your AGI is $61,555 and               be included in your income for the tax year for which
Traditional IRA (or your spouse’s Traditional IRA) may
                                                                       you are married, filing jointly. You would calculate the          the contribution was made and may be subject to a
be completely, partly or not deductible depending
                                                                       deductible portion of your contribution this way:                 10% premature withdrawal tax if you have not reached
upon your filing status and your amount of AGI. If your
                                                                                                                                         age 59 1⁄2.
AGI is any amount up to the lower limit, the contribu-                       1. The amount by which your AGI exceeds the lower
tion is deductible. If your AGI falls between the lower                         limit of the partly-deductible range:                    What happens if I don’t correct the excess contribu-
limit and the upper limit, the contribution is partly                                                                                    tion by the tax return due date?
deductible. If your AGI falls above the upper limit, the                                      ($61,555 – $54,000) = $7,555
contribution is not deductible.                                                                                                            Any excess contribution withdrawn after the tax
                                                                             2. Divide this by $10,000:   $ 7,555 = 0.7555               return due date (including any extensions) for the year
                                                                                                          $10,000
                                                                                                                                         for which the contribution was made will be subject to
             FOR ACTIVE PARTICIPANTS — 2002
                                                                             3. Multiply this by your contribution limit:                the 6% excise tax. There will be an additional 6% excise
                                                                                0.7555 x $3,000 = $2,267                                 tax for each year the excess remains in your account.
                                     If You Are         Then Your
                   If You Are       Married Filing   Traditional IRA
                                                                             4. Subtract this from your contribution:                      Under limited circumstances, you may correct an
                      Single           Jointly       Contribution Is
                                                                                ($3,000 – $2,267) = $733                                 excess contribution after tax filing time by withdrawing
                     Up to              Up to            Fully
                                                                                                                                         the excess contribution (leaving the earnings in the
                                                                             5. Round this down to the nearest $10 = $730
                  Lower Limit        Lower Limit       Deductible                                                                        account). This withdrawal will not be includible in
                   ($34,000           ($54,000                               6. Your deductible contribution is $730 (the greater of     income nor will it be subject to any premature
                   for 2002)          for 2002)                                                                                          withdrawal penalty if (1) your contributions to all
                                                                                the amount calculated in Step 5 or $200).
Adjusted                                                                                                                                 Traditional IRAs for 2001 do not exceed $2,000
Gross Income       More than         More than           Partly          Even though part or all of your contribution is not             (increasing to $3,000 for 2002, or $3,500 if you quali-
(AGI) Level       Lower Limit       Lower Limit        Deductible      deductible, you may still contribute to your Traditional          fy for a catch-up contribution) and (2) you did not take
                  but less than     but less than                      IRA (and your spouse may contribute to their Traditional
                  Upper Limit       Upper Limit                                                                                          a deduction for the excess amount (or you file an
                   ($44,000          ($64,000                          IRA) up to the limit on contributions. When you file your         amended return (Form 1040X) which removes the
                   for 2002)         for 2002)                         tax return for the year, you must designate the amount of         excess deduction).
                                                                       non-deductible contributions to your Traditional IRA for
                  Upper Limit        Upper Limit          Not          the year. See IRS Form 8606.                                      How are excess contributions treated if none of
                   or more            or more          Deductible                                                                        the preceding rules apply?
                                                                       What are the tax credit restrictions for IRA
                                                                       contributions?
                                                                                                                                           Unless an excess contribution qualifies for the spe-
  The lower limit and the upper limit will change                                                                                        cial treatment outlined above, the excess contribution
for 2003 and later years. The lower limit and upper                       If you (or your spouse) make contributions to a                and any earnings on it withdrawn after tax filing time
limit for these years are shown in the following table.                Traditional IRA (or Roth IRA), the contribution may be            will be includible in taxable income and may be sub-
Substitute the correct lower limit and upper limit in                  eligible to a tax credit up to $1,000 per individual on the       ject to a 10% premature withdrawal penalty. No
the table above to determine deductibility in any                      first $2,000 of contributions (in addition to any available       deduction will be allowed for the excess contribution
particular year. (Note: if you are married but filing                  tax deduction) depending upon your filing status and              for the year in which it is made.
separate returns, your lower limit is zero and your                    your amount of AGI, based on the following table:(1)
upper limit is $10,000, unless you have lived apart at                                                                                     Excess contributions may be corrected in a subse-
all times during the taxable year.)                                          Tax Credit %     50%           20%              10%         quent year to the extent that you contribute less than
                                                                         Married AGI        $0-30,000 $30,001-32,500    $32,501-50,000   your maximum contribution amount. As the prior
                                                                                                                                         excess contribution is reduced or eliminated, the 6%
          TABLE OF LOWER AND UPPER LIMITS                                Head of
                                                                         Household AGI $0-22,500 $22,501-24,375         $24,376-37,500   excise tax will become correspondingly reduced or
                                                                         Single AGI         $0-15,000 $15,001-16,250    $16,251-25,000
                                                                                                                                         eliminated for subsequent tax years. Also, you may be
   Year               Single                Married Filing Jointly
                                                                                                                                         able to take an income tax deduction for the amount
              Lower Limit Upper Limit Lower Limit Upper Limit                                                                            of excess that was reduced or eliminated, depending
                                                                         Available for tax years beginning after December 31, 2001 and
                                                                       (1)

   2002        $34,000         $44,000     $54,000       $64,000       ending before January 1, 2007.                                    on whether you would be able to take a deduction if
                                                                                                                                         you had instead contributed the same amount.
   2003        $40,000         $50,000     $60,000       $70,000       How do I determine my AGI?
   2004        $45,000         $55,000     $65,000       $75,000                                                                         Are the earnings on my Traditional IRA funds taxed?
                                                                          AGI is your gross income minus those deductions
   2005        $50,000         $60,000     $70,000       $80,000       which are available to all taxpayers even if they don’t             Any dividends on or growth of the investments held
                                                                       itemize. Instructions to calculate your AGI are provided          in your Traditional IRA are generally exempt from fed-
   2006        $50,000         $60,000     $75,000       $85,000                                                                         eral income taxes and will not be taxed until with-
                                                                       with your income tax Form 1040 or 1040A.
   2007        $50,000         $60,000     $80,000      $100,000                                                                         drawn by you, unless the tax exempt status of your
 and Later                                                                                                                               Traditional IRA is revoked (this is described in Part
                                                                                                                                         Three of this Disclosure Statement).


                                                                                                                                                                                              13
TRANSFERS/ROLLOVERS                                              receive the rollover. Such a rollover must be completed       available to certain lump-sum distributions from quali-
                                                                 within 60 days after the withdrawal from your first           fied employer retirement plans.
Can I transfer or roll over a distribution I receive             Traditional IRA. After making such a regular rollover from
from my Employer’s Retirement Plan into a                        one Traditional IRA to another, you must wait a full year       Since the purpose of a Traditional IRA is to accumu-
Traditional IRA?                                                 (365 days) before you can make another such rollover.         late funds for retirement, your receipt or use of any
  Almost all distributions from employer plans includ-           (However, you can instruct a Traditional IRA custodian to     portion of your Traditional IRA before you attain age
ing, 457(b) plans (for employees of governmental enti-           transfer amounts directly to another Traditional IRA custo-   59 1/ generally will be considered as an early withdrawal
                                                                                                                                  2



ties) or 403(b) plans (for employees of tax-exempt               dian. Such a direct transfer does not count as a rollover.)   and subject to a 10% penalty tax.
employers) are eligible for rollover to a Traditional IRA.                                                                       The 10% penalty tax for early withdrawal will not
The main exceptions are:                                         What happens if I combine rollover contributions
                                                                                                                               apply if:
                                                                 with my annual contributions in one IRA?
     payments over the lifetime or life expectancy of the par-                                                                    The distribution was a result of your death or
                                                                    If you wish to combine a rollover contribution and the
     ticipant (or participant and a designated beneficiary),                                                                      disability.
                                                                 IRA holding your annual contributions, you should estab-
     installment payments for a period of 10 years or more,      lish the Account as an Annual Contributions IRA                  The purpose of the withdrawal is to pay certain
     required distributions (generally the rules require         on the Adoption Agreement and make the contributions             higher education expenses for yourself or your
     distributions starting at age 70 1⁄2 or for certain         to that Account.                                                 spouse, child, or grandchild. Qualifying expenses
     employees starting at retirement, if later), and                                                                             include tuition, fees, books, supplies and equipment
                                                                 How do rollovers affect my contribution or                       required for attendance at a post-secondary educa-
     hardship withdrawals from a 401(k) plan or a 403(b)         deduction limits?
     arrangement.                                                                                                                 tional institution and expenses for special needs ser-
                                                                   Rollover contributions, if properly made, do not               vices in the case of a Special Needs Student which
  If you are eligible to receive a distribution from a tax       count toward the maximum contribution. Also,                     are incurred in connection with such enrollment or
qualified retirement plan as a result of, for example,           rollovers are not deductible, and they do not affect             attendance. Room and board expenses may qualify
termination of employment, plan discontinuance, or               your deduction limits as described above.                        if the student is attending at least half-time.
retirement, all or part of the distribution may be trans-
ferred directly into your Traditional IRA. This is called                                                                         The withdrawal is used to pay eligible first-time
                                                                 What about converting my Traditional IRA to a
a “direct rollover.” Or, you may receive the distribution                                                                         homebuyer expenses. These are the costs of purchas-
                                                                 Roth IRA?
and make a regular rollover to your Traditional IRA                                                                               ing, building or rebuilding a principal residence
                                                                   The rules for converting a Traditional IRA to a Roth           (including customary settlement, financing or clos-
within 60 days. By making a direct rollover or a regu-           IRA, or making a rollover from a Traditional IRA to a
lar rollover, you can defer income taxes on the amount                                                                            ing costs). The purchaser may be you, your spouse,
                                                                 Roth IRA, are described in Part Two below.                       or a child, grandchild, parent or grandparent of you
rolled over until you subsequently make withdrawals
from your Traditional IRA.                                                                                                        or your spouse. An individual is considered a “first-
                                                                 WITHDRAWALS                                                      time homebuyer” if the individual did not have (or,
   You may roll over the amount of employer contribu-                                                                             if married, neither spouse had) an ownership interest
                                                                 When can I make withdrawals from my
tions and earnings distributed, including any after-tax          Traditional IRA?
                                                                                                                                  in a principal residence during the two-year period
employee contributions you made to the employer                                                                                   immediately preceding the acquisition in question.
retirement plan. If you are over age 70 1⁄2 and are                You may withdraw from your Traditional IRA at any              The withdrawal must be used for eligible expenses
required to take minimum distributions under the tax             time. However, withdrawals before age 59 1/ may be
                                                                                                                2
                                                                                                                                  within 120 days after the withdrawal. (If there is an
laws, you may not roll over any amount required to be            subject to a 10% penalty tax in addition to regular              unexpected delay or cancellation of the home
distributed to you under the minimum distribution                income taxes (see below).                                        acquisition, a withdrawal may be redeposited as
rules. Also, if you are receiving periodic payments                                                                               a rollover).
                                                                 When must I start making withdrawals?
over your, or you and your designated Beneficiary’s                                                                               There is a lifetime limit on eligible first-time home-
life expectancy, for a period of at least 10 years, you            If you have not withdrawn the total amount held in             buyer expenses of $10,000 per individual.
may not roll over these payments. A rollover to a                your Traditional IRA by April 1 following the year in
Traditional IRA must be completed within 60 days                 which you reach 701/ , you must make minimum with-
                                                                                       2                                          The distribution is one of a scheduled series of sub-
after the distribution from the employer retirement              drawals in order to avoid penalty taxes. The rule allow-         stantially equal periodic payments for your life or
plan to be valid.                                                ing certain employees to postpone distributions from             life expectancy (or the joint lives or life expectancies
                                                                 an employer qualified plan until actual retirement               of you and your Beneficiary).
NOTE: A qualified plan administrator, 457(b) sponsor or          (even if this is after age 701/ ) does not apply to
403(b) sponsor MUST WITHHOLD 20% OF YOUR DIS-
                                                                                              2
                                                                                                                                  If there is an adjustment to the scheduled series of
                                                                 Traditional IRAs.                                                payments, the 10% penalty tax may apply. The 10%
TRIBUTION for federal income taxes UNLESS you
elect a direct rollover. Your plan administrator, 457(b)           The minimum withdrawal amount is determined by                 penalty will not apply if you make no change in the
sponsor or 403(b) sponsor, is required to provide you            dividing the balance in your Traditional IRA (or IRAs)           series of payments until the end of five years or until
with information about direct and regular rollovers and          by your life expectancy or the combined life expectan-           you reach age 59 1⁄2, whichever is later. If you make
withholding taxes before you receive your distribution           cy of you and your designated beneficiary. The mini-             a change before then, the penalty will apply. For
and must comply with your directions to make a direct            mum withdrawal rules are complex. Consult your tax               example, if you begin receiving payments at age 50
rollover.                                                        advisor for assistance.                                          under a withdrawal program providing for substan-
                                                                                                                                  tially equal payments over your life expectancy, and
  The rules governing rollovers are complicated. Be sure           If you fail to take a Minimum Required Distribution,           at age 58 you elect to receive the remaining amount
to consult your tax advisor or the IRS if you have a             then the penalty tax is 50% of the difference between            in your Traditional IRA in a lump sum, the 10%
question about rollovers.                                        the minimum withdrawal amount and your actual with-              penalty tax will apply to the lump sum and to the
                                                                 drawals during a year. The IRS may waive or reduce the           amounts previously paid to you before age 59 1⁄2.
Once I have rolled over a Plan Distribution into a               penalty tax if you can show that your failure to make the
Traditional IRA, can I subsequently roll over into               required minimum withdrawals was due to reasonable               The distribution does not exceed the amount of
another Employer’s Qualified Retirement Plan?                    cause and you are taking reasonable steps to remedy              your deductible medical expenses for the year
                                                                 the problem.                                                     (generally speaking, medical expenses paid during
  Yes. Part or all of an eligible distribution received
                                                                                                                                  a year are deductible if they are greater than 7 1⁄2%
from a qualified plan plus the balance of your IRA
                                                                 How are withdrawals from my Traditional                          of your adjusted gross income for that year).
account, not including any non-deductible contribu-
tions you made or after-tax rollover contributions               IRA taxed?                                                       The distribution does not exceed the amount you
received, may be transferred to another qualified plan,            Amounts withdrawn by you are included in your                  paid for health insurance coverage for yourself,
457(b) plan or 403(b) plan. The new qualified plan               gross income in the taxable year that you receive                your spouse and dependents. This exception
must accept rollovers.                                           them, and are taxable as ordinary income. Amounts                applies only if you have been unemployed and
                                                                 withdrawn may be subject to income tax withholding               received federal or state unemployment compensa-
Can I make a rollover from my Traditional IRA to                 by the custodian unless you elect not to have with-              tion payments for at least 12 weeks; this exception
another Traditional IRA?                                         holding. See Part Three below for additional informa-            applies to distributions during the year in which
  You may make a rollover from one Traditional IRA               tion on withholding. Lump-sum withdrawals from a                 you received the unemployment compensation and
to another Traditional IRA you have or you establish to          Traditional IRA are not eligible for averaging treatment         during the following year, but not to any distribu-

14
   tions received after you have been reemployed for         Part Two: DESCRIPTION OF ROTH IRAs                             Of course, if your spouse has compensation or
   at least 60 days.                                                                                                      earned income, your spouse can establish his or her
                                                             SPECIAL NOTE                                                 own Roth IRA and make contributions to it in accor-
   The distribution is made pursuant to an IRS levy to
   pay overdue taxes.                                          Part Two of the Disclosure Statement describes the         dance with the rules and limits described in this Part
                                                             rules generally applicable to Roth IRAs as of January 1,     Two of the Disclosure Statement.
How are nondeductible contributions taxed when               2002.
they are withdrawn?                                                                                                       CONTRIBUTIONS
   A withdrawal of non-deductible contributions                Roth IRAs were available for the first time in 1998.
                                                             Contributions to a Roth IRA are not tax-deductible,          When can I make contributions to a Roth IRA?
(not including earnings) will be tax-free. However,
if you made both deductible and non-deductible               but withdrawals that meet certain requirements are             You may make a contribution to your Roth IRA or
contributions to your Traditional IRA, then each             not subject to federal income taxes. This makes the          establish a new Roth IRA for a taxable year by the due
distribution will be treated as partly a return of your      dividends on and growth of the investments, held             date (not including any extensions) for your federal
non-deductible contributions (not taxable) and partly        in your Roth IRA, tax-free for federal income tax            income tax return for the year. Usually this is April 15
a distribution of deductible contributions and earnings      purposes if the requirements are met.                        of the following year. For example, you will have until
(taxable). The non-taxable amount is the portion of                                                                       April 15, 2003 to establish and make a contribution to
                                                               Traditional IRAs, which have existed since 1975, are       a Roth IRA for 2002.
the amount withdrawn, which bears the same ratio as          still available. Contributions to a Traditional IRA may
your total non-deductible Traditional IRA contributions      be tax-deductible. Earnings and gains on amounts             How much can I contribute to my Roth IRA?
bear to the total balance of all your Traditional IRAs       while held in a Traditional IRA are tax-deferred.
(including rollover IRAs and SEPs, but not including         Withdrawals are subject to federal income tax (except          For each year when you are eligible (see above),
Roth IRAs).                                                  for prior non-deductible contributions, which may be         you can contribute up to the lesser of $3,000 or 100%
                                                             recovered without additional federal income tax).            of your compensation (or earned income, if you are
  For example, assume that you made the following                                                                         self-employed).
Traditional IRA contributions:                                 This Part Two does not describe Traditional IRAs. If
                                                             you wish to review information about Traditional IRAs,         Your Roth IRA limit is reduced by any contributions
 Year           Deductible       Non-deductible                                                                           for the same year to a Traditional IRA. For example,
                                                             please see Part One of this Disclosure Statement.
                                                                                                                          assuming you have at least $3,000 in compensation
 1998           $2,000
                                                               This Disclosure Statement also does not describe           or earned income if you contribute $500 to your
 1999           $2,000                                       IRAs established in connection with a SIMPLE IRA             Traditional IRA for a year, your maximum Roth IRA
                                                             program or a Simplified Employee Pension (SEP) plan          contribution for that year will be $2,500. (Note: the
 2000           $1,000           $1,000                      maintained by your employer. Roth IRAs may not be            Roth IRA contribution limit is not reduced by contribu-
 2001                            $1,000                      used in connection with a SIMPLE IRA program or a            tions made to either a SEP IRA or a SIMPLE IRA; salary
                                                             SEP plan.                                                    reduction contributions by you are considered employ-
                $5,000           $2,000                                                                                   er contributions for this purpose.)
                                                             YOUR ROTH IRA
  In addition, assume that your Traditional IRA has                                                                         If you and your spouse have Spousal Roth IRAs, each
total investment earnings through 2001 of $1,000.              Your Roth IRA gives you several tax benefits. While        spouse may contribute up to $3,000 to his or her Roth
During 2001 you withdrew $500. Your total account            contributions to a Roth IRA are not deductible, divi-        IRA for a year as long as the combined compensation
balance as of 12/31/01 is $7,500 as shown below.             dends on and growth of the assets held in your Roth          of both spouses for the year (as shown on your joint
                                                             IRA are not subject to federal income tax. Withdrawals       income tax return) is at least $6,000. If the combined
 Deductible Contributions                    $ 5,000         by you from your Roth IRA are excluded from your             compensation of both spouses is less than $6,000, the
                                                             income for federal income tax purposes if certain            spouse with the higher amount of compensation may
 Non-deductible Contributions                $ 2,000
                                                             requirements (described below) are met. State income         contribute up to that spouse’s compensation amount,
 Earnings on IRA                             $ 1,000         tax treatment of your Roth IRA may differ from federal       or $3,000 if less. The spouse with the lower compensa-
                                                             treatment; ask your state tax department or your per-        tion amount may contribute any amount up to that
 Less 2001 Withdrawal                        $ 500           sonal tax advisor for details.                               spouse’s compensation plus any excess of the other
 Total Account Balance as of 12/31/01        $ 7,500                                                                      spouse’s compensation over the other spouse’s Roth
                                                               Be sure to read Part Three of this Disclosure
                                                                                                                          IRA contribution. However, the maximum contribution
                                                             Statement for important additional information,
  To determine the non-taxable portion of your 2001                                                                       to either spouse’s Roth IRA is $3,000 for the year.
                                                             including information on how to revoke your Roth
withdrawal, the total 2001 withdrawal ($500) must be
                                                             IRA, investments and prohibited transactions, fees             As noted above, the Spousal Roth IRA limits are
multiplied by a fraction. The numerator of the fraction is
                                                             and expenses and certain tax requirements.                   reduced by any contributions for the same calendar year
the total of all non-deductible contributions remaining
in the account before the 2001 withdrawal ($2,000).                                                                       to a Traditional IRA maintained by you or your spouse.
The denominator is the total account balance as of           ELIGIBILITY
                                                                                                                            For taxpayers with high income levels, the contribu-
12/31/01 ($7,500) plus the 2001 withdrawal ($500) or         What are the eligibility requirements for a Roth IRA?        tion limits may be reduced (see below).
$8,000. The calculation is:
                                                               You are eligible to establish and contribute to a
                                                                                                                            Taxpayers age 50 or over, determined anytime during
 Total Remaining                                             Roth IRA for a year if you received compensation
                                                                                                                          calendar year 2002 or later, may make an additional
 Nondeductible                                               (or earned income if you are self-employed) during
                                                                                                                          contribution called a "catch-up contribution." The catch-
 Contributions               $2,000 x $500 = $125            the year for personal services you rendered. If you
                                                                                                                          up contribution is equal to an additional $500 per year
 Total Account Balance       $8,000                          received taxable alimony, this is treated like compen-
                                                                                                                          through 2005 and increases to $1,000 after 2005.
                                                             sation for IRA purposes.
  Thus, $125 of the $500 withdrawal in 2001 will not
be included in your taxable income. The remaining              In contrast to a Traditional IRA, with a Roth IRA you      Are contributions to a Roth IRA tax-deductible?
$375 will be taxable for 2001. In addition, for future       may continue making contributions after you reach              Contributions to a Roth IRA are not deductible.
calculations the remaining non-deductible contribution       age 70 1⁄2.                                                  This is a major difference between Roth IRAs and
total will be $2,000 minus $125, or $1,875.                                                                               Traditional IRAs. Contributions to a Traditional IRA
                                                             Can I contribute to a Roth IRA for my spouse?                may be deductible on your federal income tax return,
  A loss in your Traditional IRA investment may be
                                                                If you meet the eligibility requirements, you not only    depending on whether or not you are an active partici-
deductible. You should consult your tax advisor for
                                                             can contribute to your own Roth IRA but also to a sep-       pant in an employer-sponsored plan and on your
further details on the appropriate calculation for this
                                                             arate Roth IRA for your spouse out of your compensa-         income level.
deduction if applicable.
                                                             tion or earned income, regardless of whether your
                                                             spouse had any compensation or earned income in that         What are the tax credit restrictions for IRA
Is there a penalty tax on certain large withdrawals
                                                                                                                          contributions?
or accumulations in my IRA?                                  year. This is called a “Spousal Roth IRA.” To make a
                                                             contribution to a Roth IRA for your spouse, you must            If you (or your spouse) make contributions to a Roth
  Important: Please see Part Three below which con-                                                                       IRA (or Traditional IRA), the contribution may be eligi-
                                                             file a joint tax return for the year with your spouse. For
tains important information applicable to all Lord                                                                        ble to a tax credit up to $1,000 per individual on the
                                                             a Spousal Roth IRA, your spouse must set up a different
Abbett IRAs.                                                                                                              first $2,000 of contributions (in addition to any avail-
                                                             Roth IRA, separate from yours, to which you contribute.

                                                                                                                                                                               15
able tax deduction) depending upon your filing status                      If your AGI falls in the reduced contribution range,          income tax return for the year for which you made the
and your amount of AGI, based on the following                           you must calculate your contribution limit. To do this,         excess contribution. Earnings on the amount withdrawn
table:(1)                                                                multiply your normal contribution limit ($3,000 or your         must also be withdrawn. The earnings must be included
                                                                         compensation if less) by a fraction. The numerator is the       in your income for the tax year for which the contribu-
      Tax Credit %       50%            20%                 10%          amount by which your AGI exceeds the lower limit of             tion was made and may be subject to a 10% premature
  Married AGI         $0-30,000 $30,001-32,500         $32,501-50,000    the reduced contribution range ($95,000 if single, or           withdrawal tax if you have not reached age 59 1⁄2 (unless
  Head of
                                                                         $150,000 if married filing jointly). The denominator is         an exception to the 10% penalty tax applies).
  Household AGI $0-22,500 $22,501-24,375               $24,376-37,500    $15,000 (single taxpayers) or $10,000 (married filing           What happens if I don’t correct the Excess
  Single AGI          $0-15,000 $15,001-16,250         $16,251-25,000    jointly). Subtract this from your normal limit and then         Contribution by the tax return due date?
                                                                         round down to the nearest $10. With AGI in the
                                                                                                                                           Any excess contribution withdrawn after the tax return
(1)   Available for tax years beginning after December 31,2001.          reduced contribution range, the contribution limit is
                                                                                                                                         due date (including any extensions) for the year for
                                                                         the greater of the amount calculated or $200.
Are the earnings on my Roth IRA funds taxed?                                                                                             which the contribution was made will be subject to the
  Any dividends on or growth of investments held in                        For example, assume that your AGI for the year is             6% excise tax. There will be an additional 6% excise tax
your Roth IRA are generally exempt from federal                          $157,555 and you are married, filing jointly. You would         for each year the excess remains in your account.
income taxes and will not be taxed until withdrawn                       calculate your Roth IRA contribution limit this way:
                                                                                                                                           Unless an excess contribution qualifies for the spe-
by you, unless the tax-exempt status of your Roth IRA                                                                                    cial treatment outlined above, the excess contribution
                                                                           1. The amount by which your AGI exceeds the lower
is revoked. If the withdrawal qualifies as a tax-free                         limit of the partly-deductible range:                      and any earnings on it withdrawn after tax filing time
withdrawal (see below), amounts reflecting earnings                                                                                      will be includible in taxable income and may be sub-
or growth of assets in your Roth IRA will not be                                         ($157,555 – $150,000) = $7,555
                                                                                                                                         ject to a 10% premature withdrawal penalty.
subject to federal income tax.
                                                                           2. Divide this by $10,000:   $ 7,555 = 0.7555
                                                                                                                                           You may reduce the excess contributions by making a
                                                                                                        $10,000
Which is better, a Roth IRA or a Traditional IRA?                                                                                        withdrawal equal to the excess. Earnings need not be
  This will depend upon your individual situation.                         3. Multiply this by $3,000 (or your compensation              withdrawn. To the extent that no earnings are withdrawn,
A Roth IRA may be better if you are an active partici-                        limit, if less for the year):                              the withdrawal will not be subject to income taxes or
pant in an employer-sponsored plan and your adjusted                          0.7555 x $3,000 = $2,267                                   possible penalties for premature withdrawals before
gross income is too high to make a deductible IRA                                                                                        age 59 1⁄ 2. Excess contributions may also be corrected
                                                                           4. Subtract this from $3,000 (or your compensation
contribution (but not too high to make a Roth IRA                                                                                        in a subsequent year to the extent that you contribute
                                                                              limit, if less for the year):
contribution). Also, the benefits of a Roth IRA vs. a                         ($3,000 – $2,267) = $733
                                                                                                                                         less than your Roth IRA contribution limit for the
Traditional IRA may depend upon a number of other                                                                                        subsequent year. As the prior excess contribution is
factors including: your current income tax bracket vs.                     5. Round this down to the nearest $10 = $730                  reduced or eliminated, the 6% excise tax will become
your expected income tax bracket when you make                                                                                           correspondingly reduced or eliminated for subsequent
                                                                           6. Your contribution is $730 (the greater of the amount
withdrawals from your IRA, whether you expect to be                                                                                      tax years.
                                                                              calculated in Step 5 or $200).
able to make non-taxable withdrawals from your Roth
IRA (see below), how long you expect to leave your                         Remember, your Roth IRA contribution limit of                 CONVERSION OF EXISTING TRADITIONAL IRA
contributions in the IRA, how much you expect the                        $3,000 is reduced by any contributions for the same
                                                                                                                                         Can I convert an existing Traditional IRA into a
IRA to earn in the meantime, and possible future tax                     year to a Traditional IRA. If you fall in the reduced
                                                                                                                                         Roth IRA?
law changes.                                                             contribution range, the reduction formula applies to
                                                                         the Roth IRA contribution limit left after subtracting             Yes, you can convert an existing Traditional IRA into
  Consult a qualified tax or financial advisor for assis-                your contribution for the year to a Traditional IRA.            a Roth IRA if you meet the eligibility requirements
tance on this question.                                                                                                                  described below. Conversion may be accomplished in
                                                                         How do I determine my AGI?                                      any of three ways: First, you can withdraw the amount
Are there any restrictions on contributions to                                                                                           you want to convert from your Traditional IRA and roll
my Roth IRA?                                                               AGI is your gross income minus those deductions,
                                                                                                                                         it over to a Roth IRA within 60 days. Second, you can
                                                                         which are available to all taxpayers even if they don’t
  Taxpayers with very high income levels may not be                                                                                      establish a Roth IRA and then direct the custodian of
                                                                         itemize. Instructions to calculate your AGI are provid-
able to contribute to a Roth IRA at all, or their contri-                                                                                your Traditional IRA to transfer the amount in your
                                                                         ed with your income tax Form 1040 or 1040A.
bution may be limited to an amount less than $3,000.                                                                                     Traditional IRA you wish to convert to the new Roth IRA.
This depends upon your filing status and the amount of                      There are two additional rules when calculating AGI          Third, if you want to convert an existing Traditional
your adjusted gross income (AGI). The following table                    for purposes of Roth IRA contribution limits. First, if you     IRA with State Street as custodian to a Roth IRA, you
shows how the contribution limits are restricted:                        are making a deductible contribution for the year to a          may give us directions to convert; we will convert your
                                                                         Traditional IRA, your AGI is not reduced by the amount          existing account when the paperwork to establish your
                                                                         of the deduction. Second, if you are converting a Traditional   new Roth IRA is complete.
                       If You Are      If You Are
                        a Single      Married Filing       Then You
                                                                         IRA to a Roth IRA in a year (see below), the amount
                                                                                                                                            You are eligible to convert a Traditional IRA to a
                        Taxpayer         Jointly           May Make      included in your income as a result of the conversion is
                                                                                                                                         Roth IRA if, for the year of the conversion, your AGI
                                                                         not considered AGI when computing your Roth IRA con-
                                                                                                                                         is $100,000 or less. The same limit applies to married
                         Up to            Up to              Full        tribution limit for the year.
                        $95,000         $150,000         Contribution
                                                                                                                                         and single taxpayers, and the limit is not indexed to
 Adjusted                                                                What happens if I contribute more than allowed to               cost-of-living increases. Married taxpayers are eligible
 Gross Income                                                            my Roth IRA?                                                    to convert a Traditional IRA to a Roth IRA only if they
                       More than        More than           Reduced
 (AGI) Level                                                                                                                             file a joint income tax return; married taxpayers filing
                        $95,000         $150,000         Contribution
                                                                            The maximum contribution you can make to a Roth              separately are not eligible to convert. However, if you
                      but less than    but less than     (see explana-
                       $110,000         $160,000          tion below)    IRA generally is $3,000 or 100% of compensation or              file separately and have lived apart from your spouse for
                                                                         earned income, whichever is less. As noted above,               the entire taxable year, you are considered not married,
                        $110,000        $160,000           Zero (No
                                                                         your maximum is reduced by the amount of any con-               and the fact that you are filing separately will not prevent
                         and up          and up          Contribution)   tribution to a Traditional IRA for the same year and            you from converting.
                                                                         may be further reduced if you have high AGI. Any
                                                                         amount contributed to the Roth IRA above the maxi-                If you accomplish a conversion by withdrawing from
                ROTH IRA CONTRIBUTION LIMITS                             mum is considered an “excess contribution.”                     your Traditional IRA and rolling over to a Roth IRA
  Note: If you are a married taxpayer filing separately,                                                                                 within 60 days, the requirements in the preceding
                                                                          An excess contribution is subject to excise tax of             sentence apply to the year of the withdrawal (even
your maximum Roth IRA contribution limit phases out
                                                                         6% for each year it remains in the Roth IRA.                    though the rollover contribution occurs in the following
over the first $10,000 of adjusted gross income. If your
AGI is $10,000 or more you may not contribute to a                                                                                       calendar year).
                                                                         How can I correct an excess contribution?
Roth IRA for the year.                                                     Excess contributions may be corrected without pay-              Caution: If you have reached age 70 1⁄2 by the year
                                                                         ing a 6% penalty. To do so, you must withdraw the               when you convert another non-Roth IRA you own to
How do I calculate my limit if I fall in the “Reduced
                                                                         excess and any earnings on the excess before the due            a Roth IRA, be careful not to convert any amount that
Contribution” range?
                                                                         date (including extensions) for filing your federal             would be a minimum required distribution under the
16
applicable age 70 1⁄2 rules. Under current IRS regula-        If you have a SEP IRA as part of an employer simpli-      required withdrawal amounts for any particular year
tions, minimum required distributions may not be            fied employee pension (SEP) program, or a SIMPLE            during your lifetime. Unlike Traditional IRAs, you are
converted.                                                  IRA as part of an employer SIMPLE IRA program, you          not required to start making withdrawals from a Roth
                                                            can convert the IRA to a Roth IRA. However, with a          IRA by the April 1 following the year in which you
What happens if I change my mind about converting?          SIMPLE IRA account, this can be done only after the         reach age 70 1⁄2.
  You can undo a conversion by notifying the custodian      SIMPLE IRA account has been in existence for at least
                                                            two years. You must meet the eligibility rules summa-          After your death, there are IRS rules on the timing
or trustee of each IRA (the custodian of the first IRA –
                                                            rized above to convert.                                     and amount of distributions. In general, the amount
the Traditional IRA that you converted – and the custo-
                                                                                                                        in your Roth IRA must be distributed by the end of the
dian of the second IRA – the Roth IRA that received
                                                            Should I convert my Traditional IRA to a Roth IRA?          fifth year after your death. However, distributions to
the conversion). The amount that you transfer back to
                                                                                                                        a designated Beneficiary that begin by the end of the
the Traditional IRA is treated as if it had not been con-     Only you can answer this question, in consultation
                                                                                                                        year, following the year of your death, and that are
verted. This is called “recharacterization.” You can        with your tax or financial advisers. A number of fac-
                                                                                                                        paid over the life expectancy of the Beneficiary satisfy
recharacterize an amount for any reason.                    tors, including the following, may be relevant.
                                                                                                                        the rules. Also, if your surviving spouse is your sole
                                                            Conversion may be advantageous if you expect to
   If you want to recharacterize a converted amount,                                                                    designated Beneficiary, the spouse may defer the start
                                                            leave the converted funds on deposit in your Roth IRA
you must do so before the due date (including any                                                                       of distributions until you would have reached age 70 1⁄2
                                                            for at least five years and to be able to withdraw the
extensions you receive) of your federal income tax                                                                      had you lived or may treat the Roth IRA as his or her
                                                            funds under circumstances that will not be taxable (see
return for the year of the conversion. You must also                                                                    own.
                                                            below). The benefits of converting will also depend on
transfer any net income on the recharacterized amount       whether you expect to be in the same tax bracket
back to the Traditional IRA. The amount of net income                                                                   What are the requirements for a tax-free
                                                            when you withdraw from your Roth IRA as you are             withdrawal?
that you transfer back to the Traditional IRA is treated    now. Also, conversion is based upon an assumption
as if it had been earned in the Traditional IRA.                                                                          To be tax-free, a withdrawal from your Roth IRA
                                                            that Congress will not change the tax rules for with-
Recharacterization is not restricted to amounts you                                                                     must meet two requirements. First, the Roth IRA must
                                                            drawals from Roth IRAs in the future, but this cannot
converted. You can, for example, make an annual con-                                                                    have been open for five (5) or more years before the
                                                            be guaranteed.
tribution to a Traditional IRA and recharacterize it as                                                                 withdrawal. Second, at least one of the following con-
a contribution to a Roth IRA, or vice versa.                                                                            ditions must be satisfied:
                                                            TRANSFERS/ROLLOVERS
  If you recharacterize an amount that was converted                                                                       You are age 59 1⁄2 or older when you make the
                                                            Can I transfer or roll over a distribution I receive
from a Roth IRA, you may be eligible to convert to a        from my employer’s retirement plan into a Roth IRA?            withdrawal.
Roth IRA again, later, subject to certain limits. This is                                                                  The withdrawal is made by your Beneficiary (or
called “reconversion.” Caution: The rules in this area        Distributions from qualified employer-sponsored
                                                            retirement plans, 457(b) plans (for employees of gov-          estate) after you die.
are very complex; be sure to consult a competent tax
                                                            ernmental entities) or 403(b) plans (for employees of          You are disabled (as defined in IRS rules) when
professional for assistance and the latest developments
                                                            tax-exempt employers) are not eligible for rollover or         you make the withdrawal.
in this area.
                                                            direct transfer to a Roth IRA. However, in certain cir-        You are using the withdrawal to cover eligible first-
  The Rules: Effective January 1, 2000, if you convert      cumstances, it may be possible to make a direct                time homebuyer expenses. These are the costs of
an amount from a Traditional IRA to a Roth IRA during       rollover of an eligible distribution to a Traditional IRA      purchasing, building or rebuilding a principal resi-
a taxable year and transfer that amount back to a           and then to convert the Traditional IRA to a Roth IRA          dence (including customary settlement, financing
Traditional IRA through recharacterization, you will        (see above). Consult your tax or financial advisor for         or closing costs). The purchaser may be you, your
not be eligible to reconvert back to a Roth IRA before      further information on this possibility.                       spouse or a child, grandchild, parent or grandpar-
the beginning of the taxable year following the taxable                                                                    ent of you or your spouse. An individual is consid-
year in which the amount was converted                      Can I make a rollover from my Roth IRA to another              ered a “first-time homebuyer” if the individual did
to a Roth IRA (or, if later, the end of the 30-day period   Roth IRA?
                                                                                                                           not have (or, if married, neither spouse had) an
beginning on the day on which you transfer the                You may make a rollover from one Roth IRA to                 ownership interest in a principal residence during
amount back to a Traditional IRA).                          another Roth IRA you have or you establish to receive          the two-year period immediately preceding the
                                                            the rollover. Such a rollover must be completed within         acquisition in question. The withdrawal must be
  If you reconvert an amount before you are eligible
                                                            60 days after the withdrawal from your first Roth IRA.         used for eligible expenses within 120 days after
to do so, you must recharacterize that amount back
                                                            After making a rollover from one Roth IRA to another,          the withdrawal (if there is an unexpected delay, or
to a Traditional IRA — that is, you must transfer that
                                                            you must wait a full year (365 days) before you can            cancellation of the home acquisition, a withdrawal
amount, plus any net income on that amount, back
                                                            make another such rollover. (However, you can                  may be redeposited as a rollover).
to a Traditional IRA before the due date (including
                                                            instruct a Roth IRA custodian to transfer amounts
any extensions you receive) for your federal income                                                                      There is a lifetime limit on eligible first-time home-
                                                            directly to another Roth IRA custodian; such a direct
tax return for the year of the initial conversion.                                                                      buyer expenses of $10,000 per individual.
                                                            transfer does not count as a rollover.)
What are the tax results from converting?                                                                                 For purposes of the five-year rule, all your Roth IRAs
                                                            How do rollovers affect my Roth IRA                         are considered. As soon as the five-year rule is satisfied
  The taxable amount in your Traditional IRA you con-       contribution limits?                                        for any Roth IRA, it is considered satisfied for all your
vert to a Roth IRA will be considered taxable income           Rollover contributions, if properly made, do not         Roth IRAs. For a Roth IRA that you started with an
in the year of the conversion. All distributions, trans-    count toward the maximum contribution. Also, you            annual contribution, the five-year period starts with
ferred from the Traditional IRA, are taxable in the year    may make a rollover from one Roth IRA to another            the year for which you make the initial annual contri-
of the distribution from your Traditional IRA except for    even during a year when you are not eligible to con-        bution. For a Roth IRA that you set up with amounts
your prior non-deductible contributions to the              tribute to a Roth IRA (for example, because your AGI        rolled over or converted from a non-Roth IRA, the five-
Traditional IRA.                                            for that year is too high).                                 year period begins with the year in which the conver-
  If you convert a Traditional IRA (or a SEP IRA or                                                                     sion or rollover was made.
SIMPLE IRA — see below) to a Roth IRA, under IRS            WITHDRAWALS
                                                                                                                        How are withdrawals from my Roth IRA taxed if the
rules income tax withholding will apply unless you
                                                            When can I make withdrawals from my Roth IRA?               tax-free requirements are not met?
elect not to have withholding. The Adoption Agreement
or the Universal IRA Transfer of Assets Form has more          You may withdraw from your Roth IRA at any time.           If the qualified withdrawal requirements are not met,
information about withholding. However, withholding         If the withdrawal meets the requirements discussed          the tax treatment of a withdrawal depends on the
income taxes from the amount converted (instead of          below, it is tax-free. This means that you pay no federal   character of the amounts withdrawn. To determine
paying applicable income taxes from another source)         income tax even though the withdrawal includes earn-        this, all your Roth IRAs (if you have more than one)
may adversely affect the anticipated financial benefits     ings or gains on your contributions while they were         are treated as one, including any Roth IRA you may
of converting. Consult your financial advisor for more      held in your Roth IRA.                                      have established with another Roth IRA custodian.
information.                                                                                                            Amounts withdrawn are considered to come out in
                                                            When must I start making withdrawals?                       the following order:
Can I convert a SEP IRA or SIMPLE IRA account to             There are no rules on when you must start making
a Roth IRA?                                                                                                                First, all annual contributions.
                                                            withdrawals from your Roth IRA or on minimum

                                                                                                                                                                              17
     Second, all conversion amounts (on a first-in,          Your receipt of any taxable withdrawal from your            1099-R as required and will complete Form 1099-R
     first-out basis).                                     Roth IRA before you attain age 59 1⁄2 generally will be       based on your Roth IRA account with the custodian.
     Third, earnings (including dividends and gains).      considered as an early withdrawal and subject to a            However, since all Roth IRAs are considered together
                                                           10% penalty tax.                                              when determining the tax treatment of withdrawals, and
   A withdrawal treated as your own prior annual con-                                                                    since you may have other Roth IRAs with other custodi-
tribution amounts to your Roth IRA will not be consid-       The 10% penalty tax for early withdrawal will not           ans (about which we have no information) you have sole
ered taxable income in the year you receive it, nor will   apply if any of the following exceptions apply:               responsibility for correctly reporting withdrawals on your
the 10% penalty apply. However, conversion amounts                                                                       tax return. It is essential that you keep proper records and
withdrawn in the first five years may be subject to the       The withdrawal was a result of your death or
                                                              disability.                                                report the income taxes properly if you have multiple
10% penalty upon withdrawal if no exceptions apply.                                                                      Roth IRAs. Second, the discussion of the tax rules for Roth
A withdrawal consisting of previously taxed conversion        The withdrawal is one of a scheduled series of sub-        IRAs in this Disclosure Statement is based upon the best
amounts is also not generally considered taxable              stantially equal periodic payments for your life or        available information. Therefore, you should consult your
income in the year of the withdrawal, and is generally        life expectancy (or the joint lives or life expectan-      tax advisor for the latest developments or for advice about
not subject to the 10% premature withdrawal penalty.          cies of you and your beneficiary).                         how maintaining a Roth IRA will affect your personal tax
To the extent that the non-qualified withdrawal consists     If there is an adjustment to the scheduled series of        or financial situation.
of dividends or gains while your contributions were        payments, the 10% penalty tax will apply. For exam-
held in your Roth IRA, the withdrawal may be included      ple, if you begin receiving payments at age 50 under            Please see Part Three below, which contains important
in your gross income in the taxable year you receive it,   a withdrawal program providing for substantially equal        information applicable to all Lord Abbett IRAs.
and may be subject to the 10% withdrawal penalty.          payments over your life expectancy; and at age 58,
                                                           you elect to withdraw the remaining amount in your            SUMMARY OF TAX RULES FOR WITHDRAWALS
   As mentioned, for purposes of determining what
portion of any withdrawal is included in income, all       Roth IRA in a lump-sum, the 10% penalty tax will                 The following table summarizes when income taxes or
of your Roth IRA accounts are considered as one sin-       apply to the lump sum and to the amounts previously           the 10% premature withdrawal penalty tax will apply to a
gle account. Therefore, withdrawals from Roth IRA          paid to you before age 59 1⁄2 to the extent they were         withdrawal from your Roth IRA. Remember, income taxes
accounts are not considered to be from earnings or         included in your taxable income.                              or penalties may apply or not, depending on the type of
interest until an amount equal to all prior annual con-                                                                  contribution withdrawn. This is determined by the IRS
                                                              The withdrawal is used to pay eligible higher edu-
tributions and, if applicable, all conversion amounts,                                                                   Rules described above, considering all of your Roth IRAs
                                                              cation expenses. These are expenses for tuition,
made to all of an individual’s Roth IRA accounts is                                                                      together (including any you may maintain with another
                                                              fees, books, and supplies required to attend an
withdrawn. The following example illustrates this:                                                                       trustee or custodian). Therefore, if you have multiple Roth
                                                              institution for post-secondary education. Room
                                                                                                                         IRAs, the tax treatment of a withdrawal will not necessari-
  A single individual contributes $1,000 a year to his        and board expenses are also eligible for a student
                                                                                                                         ly follow from the type of contributions held in the partic-
Lord Abbett Roth IRA account and $1,000 a year to             attending at least half-time and expenses for spe-
                                                                                                                         ular Roth IRA account you withdrew from. Also, the
the Brand X Roth IRA account over a period of ten             cial needs services in the case of a Special Needs
                                                                                                                         income and penalty tax rules for Roth IRA withdrawals
years. At the end of 10 years his account balances            Student which are incurred in connection with
                                                                                                                         are extremely complex; the following table is only a sum-
are as follows:                                               such enrollment or attendance. The student may be
                                                                                                                         mary and may not cover every possible situation. Consult
                                                              you, your spouse, or your child or grandchild.
                                                                                                                         the IRS or your personal tax advisor if you have a ques-
                       Principal                              However, expenses that are paid for with a scholar-
                                                                                                                         tion about your individual situation. The table summarizes
                       Contributions      Earnings            ship or other educational assistance payment are
                                                                                                                         the tax rules that may apply if you withdraw from your
                                                              not eligible expenses.
Lord Abbett                                                                                                              Roth IRA. What happens if you die and your beneficiary
Roth IRA               $10,000            $10,000             The withdrawal is used to cover eligible first-time        wants to make withdrawals from the account? The follow-
                                                              homebuyer expenses (as described above in the              ing is a summary of the Rules.
Brand X Roth IRA       $10,000            $ 7,000             discussion of tax-free withdrawals).
                                                                                                                             First, if you converted from a Traditional IRA to a
Total                  $20,000            $17,000             The withdrawal does not exceed the amount of
                                                                                                                             Roth IRA in 1998, spreading the income taxes due
                                                              your deductible medical expenses for the year
                                                                                                                             over the 1998-2001 period, and you die before
  At the end of 10 years, this person has $37,000 in          (generally speaking, medical expenses paid during
                                                                                                                             2001, the deferred income taxes must be recog-
both Roth IRA accounts, of which $20,000 represents           a year are deductible if they are greater than 7.5%
                                                                                                                             nized and paid with your final income tax return
his contributions (aggregated) and $17,000 represents         of your adjusted gross income for that year).
                                                                                                                             for the year of death. As an exception to this rule,
his earnings (aggregated). This individual, who is 40,        The withdrawal does not exceed the amount you                  if your surviving spouse is the sole beneficiary of
withdraws the entire $17,000 from his Brand X Roth            paid for health insurance coverage for yourself,               all your Roth IRAs, the spouse can elect to contin-
IRA (not a qualified withdrawal). We look to the aggre-       your spouse and dependents. This exception                     ue spreading the income over the remainder of
gate amount of all principal contributions – in this          applies only if you have been unemployed and                   the 1998-2001 period.
case $20,000 – to determine whether the withdrawal is         received federal or state unemployment compensa-
from contributions, and thus non-taxable. In this exam-                                                                     Second, if your beneficiary is not your surviving
                                                              tion payments for at least 12 weeks; this exception
ple, there is no ($0) taxable income as a result of this                                                                    spouse, withdrawals by the beneficiary will be
                                                              applies to distributions during the year in which
withdrawal because the $17,000 withdrawal is less                                                                           subject to income taxes depending on the type
                                                              you received the unemployment compensation
than the total amount of aggregated contributions                                                                           of contribution withdrawn as summarized in the
                                                              and during the following year, but not to any distri-
($20,000). If this individual then withdrew $15,000                                                                         table. However, in determining what type of contri-
                                                              butions received after you have been reemployed
from his Lord Abbett Roth IRA, $3,000 would not be                                                                          bution the beneficiary is withdrawing, any Roth
                                                              for at least 60 days.
taxable (the remaining aggregate contributions), and                                                                        IRAs the beneficiary owns in his or her own right
$12,000 would be treated as taxable income for the            The distribution is made pursuant to an IRS levy to           are not considered (this is an exception to the nor-
year of the withdrawal, subject to normal income taxes        pay overdue taxes.                                            mal rule that all Roth IRAs are considered togeth-
and the 10% premature withdrawal penalty (unless an           There is one additional time when the 10% penalty             er). A beneficiary will not be subject to the 10%
exception applies).                                        tax may apply. If you convert an amount from a non-              premature withdrawal penalty because withdrawals
                                                           Roth IRA to a Roth IRA, and then make a withdrawal               following the original owner’s death are an excep-
  Taxable withdrawals of dividends and gains from a        that is treated as coming from that converted amount             tion to the 10% penalty tax.
Roth IRA are treated as ordinary income. Withdrawals       within five years after the conversion, the 10% penalty          Third, if your surviving spouse is the beneficiary,
of taxable amounts from a Roth IRA are not eligible        applies (unless there is an exception). This rule is the         the spouse can elect either to receive withdrawals
for averaging treatment available to certain lump-sum      one exception to the usual Roth IRA rule that, once the          as beneficiary, or to treat your Roth IRA as the
distributions from qualified employer-sponsored retire-    five-year requirement is satisfied for one of your Roth          spouse’s Roth IRA. If the spouse receives withdrawals
ment plans, nor are such withdrawals eligible for capi-    IRAs, it is satisfied for all your Roth IRAs. See the Table      as a beneficiary, the rules in the preceding paragraph
tal gains tax treatment.                                   at the end of this Part for a summary of the Rules on            generally apply to the spouse just as to any other
  Amounts withdrawn may be subject to income-tax           when withdrawals from your Roth IRA will be subject              beneficiary. If the spouse treats the Roth IRA as the
withholding by the custodian unless you elect not to       to income taxes or the 10% penalty tax.                          spouse’s own, there are a couple of special rules.
have withholding. See Part Three below for additional                                                                       First, the spouse will be treated as having had a
                                                            Two Important Points: First, the custodian will report
information on withholding.                                                                                                 Roth IRA for five years (one of the requirements for
                                                           withdrawals from your Roth IRA to the IRS on Form
                                                                                                                            tax-free withdrawals) if either your Roth IRA or any

18
   of the spouse’s Roth IRAs has been in effect for at          items as sales charges, administrative expenses or                     The tax-exempt status of your Traditional or Roth IRA
   least five years. Second, withdrawals will be subject        fluctuations in market value.                                        will be revoked if you engage in any of the prohibited
   to the 10% penalty tax unless an exception applies.                                                                               transactions listed in Section 4975 of the tax code.
   Since the spouse has elected to treat your Roth IRA          INVESTMENTS                                                          Upon such revocation, your Traditional or Roth IRA is
   as the spouse’s own Roth IRA, the exception for                                                                                   treated as distributing its assets to you. The taxable por-
   payments following your death will not apply.                How are my IRA contributions invested?                               tion of the amount in your IRA will be subject to
                                                                   You control the investment and reinvestment of con-               income tax (unless, in the case of a Roth IRA, the
                                                                tributions to your Traditional or Roth IRA. Investments              requirements for a tax-free withdrawal are satisfied).
Part Three: RULES FOR ALL IRAS                                  must be in one or more of the Fund(s) available from                 Also, you may be subject to a 10% penalty tax on the
(TRADITIONAL AND ROTH)                                          time to time as listed in the Adoption Agreement for                 taxable amount as a premature withdrawal if you have
                                                                your Traditional or Roth IRA or in an investment selec-              not yet reached the age of 59 1⁄2.
GENERAL INFORMATION                                             tion form provided with your Adoption Agreement or
                                                                from the Fund Distributor or Service Company. You                      Any investment in a collectible (for example, rare stamps)
IRA Requirements                                                                                                                     by your Traditional or Roth IRA is treated as a withdrawal;
                                                                direct the investment of your IRA by giving your invest-
  All IRAs must meet certain requirements. Contributions        ment instructions to the Distributor or Service Company              the only exception involves certain types of government-
generally must be made in cash. The IRA trustee or              for the Fund(s). Since you control the investment of                 sponsored coins or certain types of precious metal bullion.
custodian must be a bank or other person who has                your Traditional or Roth IRA, you are responsible for
been approved by the Secretary of the Treasury. Your                                                                                 What is a prohibited transaction?
                                                                any losses; neither the Custodian, the Distributor nor
contributions may not be invested in life insurance or          the Service Company has any responsibility for any loss                Generally, a prohibited transaction is any improper
collectibles or be commingled with other property               or diminution in value occasioned by your exercise of                use of the assets in your Traditional or Roth IRA. Some
except in a common trust or investment fund. Your               investment control. Transactions for your Traditional or             examples of prohibited transactions are:
interest in the account must be non-forfeitable at all          Roth IRA will generally be at the applicable public                       Direct or indirect sale or exchange of property
times. You may obtain further information on IRAs               offering price or net asset value for shares of the Fund(s)               between you and your Traditional or Roth IRA.
from any district office of the Internal Revenue Service.       involved next established after the Distributor or the
                                                                                                                                          Transfer of any property from your Traditional or
                                                                Service Company (whichever may apply) receives
May I revoke my IRA?                                                                                                                      Roth IRA to yourself or from yourself to your
                                                                proper investment instructions from you; consult the
                                                                                                                                          Traditional or Roth IRA.
  You may revoke a newly established Traditional or             current prospectus for the Fund(s) involved for addi-
Roth IRA at any time within seven days after the date           tional information.                                                    Your Traditional or Roth IRA could lose its tax exempt
on which you receive this Disclosure Statement. A                                                                                    status if you use all or part of your interest in your
Traditional or Roth IRA established more than seven               Before making any investment, read carefully the                   Traditional or Roth IRA as security for a loan or borrow
days after the date of your receipt of this Disclosure          current Prospectus for any Fund you are considering                  any money from your Traditional or Roth IRA. Any por-
Statement may not be revoked.                                   as an investment for your Traditional IRA or Roth IRA.               tion of your Traditional or Roth IRA used as security for
                                                                The Prospectus will contain information about the                    a loan will be treated as a distribution in the year in
   To revoke your Traditional or Roth IRA, mail or deliv-       Fund’s investment objectives and policies, as well as                which the money is borrowed. This amount may be tax-
er a written notice of revocation to the Custodian at           any minimum initial investment or minimum balance                    able and you may also be subject to the 10% prema-
the address which appears at the end of this Disclosure         requirements and any sales, redemption or other charges.             ture withdrawal penalty on the taxable amount.
Statement. Mailed notice will be deemed given on the
date that it is postmarked (or, if sent by certified or reg-       Since you control the selection of investments for your           FEES AND EXPENSES
istered mail, on the date of certification or registration).    Traditional or Roth IRA and because mutual fund shares
                                                                                                                                     Custodian’s Fees
If you revoke your Traditional or Roth IRA within the           fluctuate in value, the growth in value of your Traditional
                                                                or Roth IRA cannot be guaranteed or projected.                         The fees charged by the Custodian for maintaining
seven-day period, you are entitled to a return of the
                                                                                                                                     either a Traditional IRA or a Roth IRA are listed in the
entire amount you originally contributed into your
                                                                Are there any restrictions on the use of my IRA assets?              Adoption Agreement.
Traditional or Roth IRA, without adjustment for such




                                                               Qualified Withdrawal                                                    Not a Qualified Withdrawal
      Type of Contribution Withdrawn                  (the requirements for a qualified                  Exception to 10% tax applies                               Exception to 10% tax does
                                                      withdrawal are outlined above)                    (exceptions are listed above)                                      not apply

  Annual Contribution Amounts                                                                 N o i n c o m e o r p e n a l t y t a x o n w i t h d rawa l

  1998 Conversion Amounts.

  Income taxes on amount converted pre-           No income or penalty tax on withdrawal.         No income or penalty tax on                                No income tax on withdrawal. Penalty
  viously paid (in other words, either you                                                        withdrawal.                                                tax applies if the withdrawal occurs
  paid any income taxes due on your                                                                                                                          within 5 years of conversion and if the
  1998 tax return, or you spread the                                                                                                                         withdrawal is treated as consisting of
  income taxes due over 1998-2001, but                                                                                                                       taxable amounts included in the original
  have paid them all by the time of the                                                                                                                      conversion.
  withdrawal).

  Income taxes on amount converted were           N/A                                             Income tax applies to withdrawal to the                    Income and penalty tax apply to
  spread over 1998-2001 and not fully                                                             extent of remaining taxable amount.                        withdrawal.
  paid by the time of withdrawal.                                                                 No penalty tax.

  1999 and Later Conversion Amounts.              No income or penalty tax on                     No income or penalty tax on                                No income tax on withdrawal. Penalty
                                                  withdrawal.                                     withdrawal.                                                tax applies to taxable amounts included
                                                                                                                                                             in the conversion if the withdrawal
                                                                                                                                                             occurs within 5 years of conversion.
  Earnings, Gains or Growth of Account.           No income or penalty tax on                     Income tax applies.                                        Income and penalty tax apply to
                                                  withdrawal.                                     No penalty tax.                                            withdrawal.




                                                                                                                                                                                                   19
General Fee Policies                                        include additional information on your tax return. The            Any outstanding fees must be received prior to such a
     Fees may be paid by you directly, or the Custodian     information required includes: (1) the amount of your           termination of your account.
     may deduct them from your Traditional or Roth IRA.     non-deductible contributions for that year; (2) the amount
                                                            of withdrawals from Traditional IRAs in that year; (3) the        The amount you receive from your IRA upon termi-
     Fees may be changed upon 30 days written notice                                                                        nation of the account will be treated as a withdrawal,
                                                            amount by which your total non-deductible contributions
     to you.                                                                                                                and thus the rules relating to Traditional IRA or Roth
                                                            for all the years exceed the total amount of your distribu-
     The full annual maintenance fee will be charged        tions previously excluded from gross income; and (4) the        IRA withdrawals will apply. For example, if the IRA is
     for any calendar year during which you have a          total value of all your Traditional IRAs as of the end of the   terminated before you reach age 59 1⁄2, the 10% early
     Traditional or Roth IRA with us. This fee is not       year. If you fail to report any of this information, the IRS    withdrawal penalty may apply to the taxable amount
     prorated for periods of less than one full year.       will assume that all your contributions were deductible.        you receive.
     If provided for in this Disclosure Statement or the    This will result in the taxation of the portion of your with-
                                                            drawals that should be treated as a non-taxable return of       IRA DOCUMENTS
     Adoption Agreement, termination fees are charged
     when your account is closed whether the Funds          your non-deductible contributions.                              Traditional IRA
     are distributed to you or transferred to a successor
                                                            Which withdrawals are subject to withholding?                     The terms contained in Articles I to VII of Part One
     custodian or trustee.
                                                                                                                            of the State Street Bank and Trust Company Universal
     The Custodian may charge you for its reasonable        Roth IRA                                                        Individual Retirement Custodial Account document
     expenses for services not covered by its fee             Federal income tax may be withheld at a flat rate of          have been promulgated by the IRS in Form 5305-A for
     schedule.                                              10% of any taxable withdrawal from your Roth IRA,               use in establishing a Traditional IRA Custodial Account
                                                            unless you elect not to have tax withheld. Withdrawals          that meets the requirements of Code Section 408(a) for
Other Charges
                                                            from a Roth IRA are not subject to the mandatory 20%            a valid Traditional IRA. This IRS approval relates only
  There may be sales or other charges associated with       income tax withholding that applies to most distribu-           to the form of Articles I to VII and is not an approval of
the purchase or redemption of shares of a Fund in           tions from qualified plans or 403(b) accounts that are          the merits of the Traditional IRA or of any investment
which your Traditional IRA or Roth IRA is invested.         not directly rolled over to another plan or IRA.                permitted by the Traditional IRA.
Before investing, be sure to read carefully the current
Prospectus of any Fund you are considering as an            Traditional IRA                                                 Roth IRA
investment for your Traditional IRA or Roth IRA for a
                                                              Federal income tax will be withheld at a flat rate of           The terms contained in Articles I to VII of Part Two
description of applicable charges.
                                                            10% from any withdrawal from your Traditional IRA,              of the State Street Bank and Trust Company Universal
                                                            unless you elect not to have tax withheld. Withdrawals          Individual Retirement Account Custodial Agreement
TAX MATTERS                                                                                                                 have been promulgated by the IRS in Form 5305-RA
                                                            from a Traditional IRA are not subject to the mandatory
What IRA reports does the Custodian issue?                  20% income tax withholding that applies to most distrib-        for use in establishing a Roth IRA Custodial Account
                                                            utions from qualified plans, 457(b) plans or 403(b) plans       that meets the requirements of Code Section 408A for
  The Custodian will report all withdrawals to the IRS                                                                      a valid Roth IRA. This IRS approval relates only to the
                                                            that are not directly rolled over to another plan or IRA.
and the recipient on the appropriate form. For reporting                                                                    form of Articles I to VII and is not an approval of the
purposes, a direct transfer of assets to a successor cus-                                                                   merits of the Roth IRA or of any investment permitted
todian or trustee is not considered a withdrawal (except    ACCOUNT TERMINATION
                                                                                                                            by the Roth IRA.
for such a transfer that effects a conversion of a            You may terminate your Traditional IRA or Roth IRA at
Traditional IRA to a Roth IRA, or a recharacterization      any time after its establishment by sending a completed           Based on our legal advice related to current tax laws
of a Roth IRA back to a Traditional IRA).                   Withdrawal Form (or other withdrawal instructions in a          and IRS meetings, State Street believes that the use of a
                                                            form acceptable to the Custodian) or a Transfer                 Universal Individual Retirement Account Information
   The Custodian will report to the IRS the year-end        Authorization Form to:                                          Kit such as this, containing information and documents
value of your account and the amount of any rollover                                                                        for both a Traditional IRA or a Roth IRA, will be
(including conversions of a Traditional IRA to a Roth                   Regular Mail
                                                                                                                            acceptable to the IRS. However, if the IRS makes a rul-
IRA) or a regular annual contribution made during a                     Lord Abbett Service Center
                                                                                                                            ing, or if Congress enacts legislation, regarding the use
calendar year, as well as the tax year for which a con-                 P.O. Box 219336
                                                                        Kansas City, MO 64121-9336
                                                                                                                            of different documentation, we will forward to you
tribution is made. Unless the Custodian receives an                                                                         new documentation for your Traditional IRA or a Roth
indication from you to the contrary, it will treat any                  Overnight Mail                                      IRA (as appropriate) for you to read and, if necessary,
amount as a contribution for the tax year in which it                   Lord Abbett Service Center                          an appropriate new Adoption Agreement to sign. By
is received. It is most important that a contribution                   330 West 9th Street                                 adopting a Traditional IRA or a Roth IRA using these
between January and April 15th for the prior year be                    Kansas City, MO 64105                               materials, you acknowledge this possibility and agree
clearly designated as such.                                                                                                 to this procedure if necessary. In all cases, to the
                                                              Your Traditional IRA or Roth IRA with State Street will
                                                                                                                            extent permitted, State Street will treat your IRA as
What tax information must I report to the IRS?              terminate upon the first to occur of the following:
                                                                                                                            being opened on the date your account was opened
   You must file Form 5329 with the IRS for each tax-          The date your properly executed Withdrawal Form              using the Adoption Agreement in this Kit.
able year for which you made an excess contribution            or instructions (as described above) withdrawing
or you take a premature withdrawal that is subject to          your total Traditional IRA or Roth IRA balance is            ADDITIONAL INFORMATION
the 10% penalty tax, or you withdraw less than the             received and accepted by the Custodian or, if later,
minimum amount required from your Traditional IRA.                                                                           For additional information you may call us at
                                                               the termination date specified in the Withdrawal             800-842-0828 or write to the following address:
If your beneficiary fails to make required minimum             Form.
withdrawals from your Traditional or Roth IRA after                                                                                    Regular Mail
                                                               The date the Traditional IRA or Roth IRA ceases to
your death, your beneficiary may be subject to an                                                                                      Lord Abbett Service Center
                                                               qualify under the tax code. This will be deemed a
excise tax and be required to file Form 5329.                                                                                          P.O. Box 219336
                                                               termination.
                                                                                                                                       Kansas City, MO 64121-9336
  For Traditional IRAs, you must also report each non-         The transfer of the Traditional IRA or Roth IRA to
deductible contribution to the IRS by designating it as a      another custodian/trustee.                                              Overnight Mail
non-deductible contribution on your tax return. Use                                                                                    Lord Abbett Service Center
                                                               The rollover of the amounts in the Traditional IRA or                   330 West 9th Street
Form 8606. For any year in which you make a non-
                                                               Roth IRA to another custodian/trustee.                                  Kansas City, MO 64105
deductible contribution or take a withdrawal, you must




20
   PRIVACY NOTICE                                                 We collect nonpublic personal information about our IRA           We do not disclose nonpublic personal information about
                                                                  customers from the following sources:                             our present or former IRA customers to third parties,
   A message from the Custodian of your retirement account:                                                                         except as required by law.
                                                                  • information we receive from you on applications or
   State Street Bank and Trust Company is pleased to be cus-        other forms, such as name, address, age, social security        We restrict access to nonpublic personal information about
   todian for your Traditional or Roth Individual Retirement        number, and name of beneficiary; and                            our IRA customers to employees and service providers
   Custodial Account. We recognize the importance of safe-                                                                          involved in administering and servicing these accounts.
   guarding the nonpublic personal information of our IRA         • information about your transactions with us, our affili-
   customers. Our policies and practices are designed to            ates and others, such as the purchase and sale of secu-         We maintain physical, electronic, and procedural safe-
   achieve this goal.                                               rities and account balances.                                    guards that comply with federal standards to guard the
                                                                                                                                    nonpublic personal information of our account customers.




                                    State Street Bank and Trust Company
                        Universal Individual Retirement Account Custodial Agreement
 Part One: PROVISIONS APPLICABLE TO                                  ner acceptable to the Custodian, to have the balance in                  period in paragraph (a)(iii), even if longer), over
                                                                     the Custodial Account distributed in:                                    such spouse’s designated beneficiary’s life
TRADITIONAL IRA
                                                                                                                                              expectancy, or in accordance with (ii) below if
                                                                     (a) A single-sum or                                                      there is no such designated beneficiary.
  The following provisions of Articles I to VII are in the
form promulgated by the Internal Revenue Service in Form             (b) Payments over a period not longer than the life of                 (ii) The remaining interest will be distributed by the
5305-A (Rev. March 2002 ) for use in establishing an indi-               the depositor or the joint lives of the depositor and                   end of the calendar year containing the fifth
vidual retirement Custodial Account.                                     his or her designated beneficiary.                                      anniversary of the depositor’s death.
Article I.                                                         3. If the depositor dies before his or her entire interest is      4. If the depositor dies before his or her entire interest
                                                                      distributed to him or her, the remaining interest will             has been distributed and if the designated beneficiary
  Except in the case of a rollover contribution described in
                                                                      be distributed as follows:                                         is not the depositor’s surviving spouse, no additional
section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457
(e)(16), an employer contribution to a simplified employee           (a) If the depositor dies on or after the required begin-           contributions may be accepted in the account.
pension plan as described in section 408(k), or a recharac-              ning date and:                                               5. The minimum amount that must be distributed each
terized contribution described in section 408A(d)(6), the
                                                                          (i) The designated beneficiary is the depositor’s              year, beginning with the year containing the deposi-
Custodian will accept only cash contributions up to
                                                                              surviving spouse, the remaining interest will be           tor’s required beginning date, is known as the
$3,000 per year for tax years 2002 through 2004. That
                                                                              distributed over the surviving spouse’s life               “required minimum distribution” and is determined as
contribution limit is increased to $4,000 for tax years 2005
                                                                              expectancy as determined each year until such              follows:
through 2007 and $5,000 for 2008 and thereafter. For indi-
viduals who have reached the age of 50 before the close of                    spouse’s death, or over the period of paragraph            (a) The required minimum distribution under para-
the tax year, the contribution limit is increased to $3,500                   (a)(iii) below if longer. Any interest remaining               graph 2(b) for any year, beginning with the year the
per year for tax years 2002 through 2004, $4,500 for 2005,                    after the spouse’s death will be distributed                   depositor reaches age 701/2, is the depositor’s
$5,000 for 2006 and 2007, and $6,000 for 2008 and there-                      over such spouse’s remaining life expectancy as                account value at the close of business on
after. For tax years after 2008, the above limits will be                     determined in the year of the spouse’s death                   December 31 of the preceding year divided by the
increased to reflect a cost-of-living adjustment, if any.                     and reduced by 1 for each subsequent year, or,                 distribution period in the uniform lifetime table in
                                                                              if distributions are being made over the period                Regulations section 1.401(a)(9)-9. However, if the
                                                                              in paragraph (a)(iii) below, over such period.                 depositor’s designated beneficiary is his or her sur-
Article II.
                                                                         (ii) The designated beneficiary is not the depositor’s              viving spouse, the required minimum distribution
 The depositor’s interest in the balance in the Custodial
                                                                              surviving spouse, the remaining interest will be               for a year shall not be more than the depositor’s
Account is nonforfeitable.
                                                                              distributed over the beneficiary’s remaining life              account value at the close of business on
                                                                              expectancy as determined in the year following                 December 31 of the preceding year divided by the
Article III.                                                                                                                                 number in the joint and last survivor table in
                                                                              the death of the depositor and reduced by 1 for
  1. No part of the custodial account funds may be invest-                    each subsequent year, or over the period in                    Regulations section 1.401(a)(9)-9. The required
     ed in life insurance contracts, nor may the assets of                    paragraph (a)(iii) below if longer.                            minimum distribution for a year under this para-
     the Custodial Account be commingled with other                                                                                          graph (a) is determined using the depositor’s (or, if
     property except in a common trust fund or common                   (iii) There is no designated beneficiary, the remain-                applicable, the depositor and spouse’s) attained age
     investment fund (within the meaning of section                           ing interest will be distributed over the remain-              (or ages) in the year.
     408(a)(5)).                                                              ing life expectancy of the depositor as deter-
                                                                              mined in the year of the depositor’s death and             (b) The required minimum distribution under para-
  2. No part of the custodial account funds may be invest-                    reduced by 1 for each subsequent year.                         graphs 3(a) and 3(b)(i) for a year, beginning with
     ed in collectibles (within the meaning of section                                                                                       the year following the year of the depositor’s death
     408(m)) except as otherwise permitted by section                (b) If the Depositor dies before the required beginning                 (or the year the depositor would have reached age
     408(m)(3) which provides an exception for certain                   date, the remaining interest will be distributed in                 70 1/2, if applicable under paragraph 3(b)(i)) is the
     gold, silver and platinum coins, coins issued under                 accordance with (i) below or, if elected or there is                account value at the close of business on
     the laws of any state, and certain bullion.                         no designated beneficiary, in accordance with (ii)                  December 31 of the preceding year divided by the
                                                                         below:                                                              life expectancy (in the single life table in
                                                                                                                                             Regulations section 1.401(a)(9)-9) of the individual
Article IV.                                                             (i) The remaining interest will be distributed in                    specified in such paragraphs 3(a) and 3(b)(i).
  1. Notwithstanding any provisions of this agreement to                    accordance with paragraphs (a)(i) and (a)(ii)
     the contrary, the distribution of the depositor’s interest             above (but not over the period in paragraph                  (c) The required minimum distribution for the year the
     in the Custodial Account shall be made in accordance                   (a)(iii), even if longer), starting by the end of the            depositor reaches age 70 1/2 can be made as late as
     with the following requirements and shall otherwise                    calendar year following the year of the deposi-                  April 1 of the following year. The required mini-
     comply with section 408(a)(6) and the Regulations                      tor’s death. If, however, the designated benefi-                 mum distribution for any other year must be made
     thereunder, the provisions of which are herein incor-                  ciary is the depositor’s surviving spouse, then                  by the end of such year.
     porated by reference.                                                  this distribution is not required to begin before
                                                                            the end of the calendar year in which the depos-          6. The owner of two or more traditional IRAs may satisfy
  2. The Depositor’s entire interest in the Custodial Account               itor would have reached age 70 1/2. But, in such             the minimum distribution requirements descrisbed
     must be, or begin to be, distributed not later than the                case, if the depositor’s surviving spouse dies               above by taking from one traditional IRA the amount
     depositor’s required beginning date, April 1 following                 before distributions are required to begin, then             required to satisfy the requirement for another in
     the calendar year in which the depositor reaches age                   the remaining interest will be distributed in                accordance with the regulations under section
     70 1/2. By that date, the depositor may elect, in a man-               accordance with (a)(ii) above (but not over the              408(a)(6).


                                                                                                                                                                                               21
     STATE STREET BANK AND TRUST COMPANY UNIVERSAL IRA CUSTODIAL AGREEMENT

Article V.                                                           2. No part of the custodial funds may be invested in col-       Roth Individual Retirement Account, as specified by the
  1. The depositor agrees to provide the Custodian with                 lectibles (within the meaning of section 408(m))             depositor. See Section 24 below.
     information necessary to prepare any reports required              except as otherwise permitted by section 408(m)(3),
                                                                        which provides an exception for certain gold, silver,          “Custodian” means State Street Bank and Trust Company.
     under section 408(i) and Regulations sections 1.408-5
     and 1.408-6.                                                       and platinum coins, coins issued under the laws of              “Fund” means any registered investment company which
                                                                        any state, and certain bullion.                              is advised, sponsored or distributed by Sponsor; provided,
  2. The Custodian agrees to submit to the Internal                                                                                  however, that such a mutual fund or registered investment
     Revenue Service (IRS) and depositor the reports pre-          Article V.                                                        company must be legally offered for sale in the state of the
     scribed by the IRS .                                                                                                            depositor’s residence.
                                                                     1. If the depositor dies before his or her entire interest is
Article VI.                                                             distributed to him or her and the Depositor's surviving        “Distributor” means the entity which has a contract with
                                                                        spouse is not the designated beneficiary, the remain-        the Fund(s) to serve as distributor of the shares of such
  Notwithstanding any other articles which may be added
                                                                        ing interest will be distributed in accordance with (a)      Fund(s).
or incorporated, the provisions of Articles I through III and
                                                                        below or, if elected or there is no designated benefi-
this sentence will be controlling. Any additional articles                                                                             In any case where there is no Distributor, the duties
                                                                        ciary, in accordance with (b) below:
that are not consistent with section 408(a) and the related                                                                          assigned hereunder to the Distributor may be performed
regulations will be invalid.                                                                                                         by the Fund(s) or by an entity that has a contract to per-
                                                                       (a) The remaining interest will be distributed, starting
                                                                           by the end of the calendar year following the year        form management or investment advisory services for the
Article VII.                                                               of the depositor’s death, over the designated bene-       Fund(s).
   This agreement will be amended as necessary to comply                   ficiary’s remaining life expectancy as determined in        “Service Company” means any entity employed by the
with the provisions of the Code and the related regula-                    the year following the death of the depositor.            Custodian or the Distributor, including the transfer agent
tions. Other amendments may be made with the consent                                                                                 for the Fund(s), to perform various administrative duties of
of the persons whose signatures appear on the Adoption                 (b) The remaining interest will be distributed by the
                                                                                                                                     either the Custodian or the Distributor.
Agreement.                                                                 end of the calendar year containing the fifth
                                                                           anniversary of the depositor’s death.                        In any case where there is no Service Company, the
                                                                                                                                     duties assigned hereunder to the Service Company will be
Part Two: PROVISIONS APPLICABLE TO ROTH IRAS                         2. The minimum amount that must be distributed each             performed by the Distributor (if any) or by an entity speci-
                                                                        year under paragraph 1(a) above is the account value         fied in the second preceding paragraph.
The following provisions of Articles I to VII are in the form           at the close of business on December 31 of the pre-
promulgated by the Internal Revenue Service in Form                     ceding year divided by the life expectancy (in the sin-        “Sponsor” means Lord, Abbett & Co.
5305-RA (March 2002) for use in establishing a Roth                     gle life table in Regulations section 1.401(a)(9)-9) of
Individual Retirement Custodial Account.                                                                                               2. The Depositor may revoke the Custodial Account
                                                                        the designated beneficiary using the attained age of
                                                                                                                                          established hereunder by mailing or delivering a writ-
                                                                        the beneficiary in the year following the year of the
Article I.                                                                                                                                ten notice of revocation to the Custodian within seven
                                                                        depositor’s death and subtracting 1 from the divisor
                                                                                                                                          days after the depositor receives the Disclosure
  1. Except in the case of a rollover contribution described            for each subsequent year.
                                                                                                                                          Statement related to the Custodial Account. Mailed
     in section 408A(e), a recharacterized contribution
                                                                     3. If the depositor's surviving spouse is the designated             notice is treated as given to the Custodian on date of
     described in section 408A(d)(6), or an IRA Conversion
                                                                        beneficiary, such spouse will then be treated as the              the postmark (or on the date of Post Office certifica-
     Contribution, the Custodian will accept only cash
                                                                        depositor.                                                        tion or registration in the case of notice sent by certi-
     contributions up to $3,000 per year for tax years
                                                                                                                                          fied or registered mail). Upon timely revocation, the
     2002 through 2004. That contribution limit is
                                                                   Article VI.                                                            depositor’s initial contribution will be returned, with-
     increased to $4,000 for tax years 2005 through 2007
                                                                                                                                          out adjustment for administrative expenses, commis-
     and $5,000 for 2008 and thereafter. For individuals
                                                                     1. The depositor agrees to provide the Custodian with all            sions or sales charges, fluctuations in market value or
     who have reached the age of 50 before the close of
                                                                        information necessary to prepare any reports required             other changes.
     the tax year, the contribution limit is increased to
     $3,500 per year for tax years 2002 through 2004,                   by sections 408(i) and 408A(d)(3)(E), Regulations sec-
                                                                                                                                         The depositor may certify in the Adoption Agreement
     $4,500 for 2005, $5,000 for 2006 and 2007, and                     tion 1.408-5 and 1.408-6, or other guidance published
                                                                                                                                         that the depositor received the Disclosure Statement
     $6,000 for 2008 and thereafter. For tax years after                by the Internal Revenue Service (IRS).
                                                                                                                                         related to the Custodial Account at least seven days
     2008, the above limits will be increased to reflect a                                                                               before the depositor signed the Adoption Agreement
                                                                     2. The Custodian agrees to submit to the IRS and depos-
     cost-of-living adjustment, if any.                                                                                                  to establish the Custodial Account, and the Custodian
                                                                        itor the reports prescribed by the IRS.
                                                                                                                                         may rely upon such certification.
Article II.                                                        Article VII.                                                        3. All contributions to the Custodial Account shall be
  1. The annual contribution limit described in Article I is         Notwithstanding any other articles which may be added                invested and reinvested in full and fractional shares of
     gradually reduced to $0 for higher income levels. For a       or incorporated, the provisions of Articles I through IV and           one or more Funds. All such shares shall be issued
     single depositor, the annual contribution is phased out       this sentence will be controlling. Any additional articles             and accounted for as book entry shares, and no physi-
     between adjusted gross income (AGI) of $95,000 and            inconsistent with section 408A, the related regulations,               cal shares or share certificate will be issued. Such
     $110,000; for a married depositor filing jointly,             and other published guidance will be invalid.                          investments shall be made in such proportions and/or
     between AGI of $150,000 and $160,000; and for a                                                                                      in such amounts as depositor from time to time in the
     married depositor filing separately, between AGI of $0                                                                               Adoption Agreement or by other written notice to the
     and $10,000. In case of a conversion, the Custodian           Article VIII.
                                                                                                                                          Service Company (in such form as may be acceptable
     will not accept IRA Conversion Contributions in a tax           This agreement will be amended as necessary to comply                to the Service Company) may direct.
     year if the depositor's AGI for the tax year the funds        with the provisions of the Code, the related regulations,
     were distributed from the other IRA exceeds $100,000          and other published guidance. Other amendments may be                 The Service Company shall be responsible for prompt-
     or if the depositor is married and files a separate return.   made with the consent of the persons whose signatures                 ly transmitting all investment directions by the deposi-
     Adjusted gross income is defined in section 408A(c)(3)        appear on the Adoption Agreement.                                     tor for the purchase or sale of shares of one or more
     and does not include IRA Conversion Contributions.                                                                                  Funds hereunder to the Funds’ transfer agent for exe-
                                                                                                                                         cution. However, if investment directions with respect
  2. In the case of a joint return, the AGI limits in the pre-     Part Three: PROVISIONS APPLICABLE TO BOTH
     ceding paragraph apply to the combined AGI of the                                                                                   to the investment of any contribution hereunder are
                                                                   TRADITIONAL IRAs AND ROTH IRAs                                        not received from the depositor as required or, if
     depositor and his or her spouse.
                                                                                                                                         received, are unclear or incomplete in the opinion of
                                                                   Article IX.
Article III.                                                                                                                             the Service Company, the contribution will be
                                                                     1. As used in this Article IX the following terms have the          returned to the depositor, or will be held uninvested
  The depositor's interest in the balance in the custodial              following meanings:                                              (or invested in a money market fund if available)
account is nonforfeitable..                                                                                                              pending clarification or completion by the depositor,
                                                                     “Account” or “Custodial Account” means the individual
                                                                                                                                         in either case without liability for interest or for loss of
Article IV.                                                        retirement account established using the terms of either
                                                                                                                                         income or appreciation. If any other directions or
                                                                   Part One or Part Two and, in either event, Part Three of this
  1. No part of the custodial funds may be invested in life                                                                              other orders by the depositor with respect to the sale
                                                                   State Street Bank and Trust Company Universal Individual
     insurance contracts, nor may the assets of the custodi-                                                                             or purchase of shares of one or more Funds for the
                                                                   Retirement Account Custodial Agreement and the
     al account be commingled with other property except                                                                                 Custodial Account are unclear or incomplete in the
                                                                   Adoption Agreement signed by the depositor. The Account
     in a common trust fund or common investment fund                                                                                    opinion of the Service Company, the Service Company
                                                                   may be a Traditional Individual Retirement Account or a
     (within the meaning of section 408(a)(5)).                                                                                          will refrain from carrying out such investment direc-

22
  tions or from executing any such sale or purchase,            responsibility for rendering advice with respect to the            quently, the tax treatment of the withdrawal may be
  without liability for loss of income or for appreciation      investment and reinvestment of Depositor’s Custodial               different than if the depositor had no other individ-
  or depreciation of any asset, pending receipt of clarifi-     Account, nor shall such parties be liable for any loss             ual retirement accounts, and (iii) that, accordingly,
  cation or completion from the depositor.                      or diminution in value which results from Depositor’s              it is the responsibility of the depositor to maintain
                                                                exercise of investment control over his Custodial                  appropriate records so that the depositor (or other
  All investment directions by depositor will be subject        Account. Depositor shall have and exercise exclusive               person ordering the distribution) can correctly com-
  to any minimum initial or additional investment or            responsibility for and control over the investment of              pute all taxes due. Neither the Custodian nor any
  minimum balance rules applicable to a Fund as                 the assets of his Custodial Account, and neither                   other party providing services to the Custodial
  described in its prospectus.                                  Custodian nor any other such party shall have any                  Account assumes any responsibility for the tax treat-
  All dividends and capital gains or other distributions        duty to question his directions in that regard or to               ment of any distribution from the Custodial
  received on the shares of any Fund held in the deposi-        advise him regarding the purchase, retention or sale of            Account; such responsibility rests solely with the
  tor’s Account shall be (unless received in additional         shares of one or more Funds for the Custodial                      person ordering the distribution.
  shares) reinvested in full and fractional shares of such      Account.
                                                                                                                             10. The Custodian assumes (and shall have) no responsi-
  Fund (or of any other Fund offered by the Sponsor, if       8. The depositor may in writing appoint an investment              bility to make any distribution except upon the writ-
  so directed).                                                  adviser with respect to the Custodial Account on a              ten order of depositor (or Beneficiary if depositor is
  In the event that any Fund held in the Custodial               form acceptable to the Custodian and the Service                deceased) containing such information as the
  Account is liquidated or is otherwise made unavail-            Company. The investment adviser’s appointment will              Custodian may reasonably request. Also, before
  able by the Sponsor as a permissible investment for a          be in effect until written notice to the contrary is            making any distribution from or honoring any assign-
  Custodial Account hereunder, the liquidation or other          received by the Custodian and the Service Company.              ment of the Custodial Account, Custodian shall be
  proceeds of such Fund shall be invested in accor-              While an investment adviser’s appointment is in effect,         furnished with any and all applications, certificates,
  dance with the instructions of the depositor; if the           the investment adviser may issue investment directions          tax waivers, signature guarantees, releases, indemni-
  depositor does not give such instructions, or if such          or may issue orders for the sale or purchase of shares          fication agreements, and other documents (including
  instructions are unclear or incomplete in the opinion          of one or more Funds to the Service Company, and the            proof of any legal representative’s authority) deemed
  of the Service Company, the Service Company may                Service Company will be fully protected in carrying             necessary or advisable by Custodian, but Custodian
  invest such liquidation or other proceeds in such other        out such investment directions or orders to the same            shall not be responsible for complying with any
  Fund (including a money market fund if available) as           extent as if they had been given by the depositor.              order or instruction which appears on its face to be
  the Sponsor designates, and neither the Service                                                                                genuine, or for refusing to comply if not satisfied it is
                                                                The depositor’s appointment of any investment adviser            genuine, and Custodian has no duty of further
  Company nor the Custodian will have any responsibil-          will also be deemed to be instructions to the
  ity for such investment.                                                                                                       inquiry. Any distributions from the Account may be
                                                                Custodian and the Service Company to pay such                    mailed, first-class postage prepaid, to the last known
4. Subject to the minimum initial or additional invest-         investment adviser’s fees to the investment adviser              address of the person who is to receive such distribu-
   ment, minimum balance and other exchange rules               from the Custodial Account hereunder without addi-               tion, as shown on the Custodian’s records, and such
   applicable to a Fund, the depositor may at any time          tional authorization by the Depositor or the                     distribution shall to the extent thereof completely
   direct the Service Company to exchange all or a spec-        Custodian.                                                       discharge the Custodian’s liability for such payment.
   ified portion of the shares of a Fund in the depositor’s   9. (a) Distribution of the assets of the Custodial Account
   Account for shares and fractional shares of one or                                                                        11. (a) The term “Beneficiary” means the person or per-
                                                                     shall be made at such time and in such form as                  sons designated as such by the "designating per-
   more other Funds. The depositor shall give such                   depositor (or the Beneficiary if depositor is
   directions by written or telephonic notice acceptable                                                                             son" (as defined below) on a form acceptable to
                                                                     deceased) shall elect by written order to the                   the Custodian for use in connection with the
   to the Service Company, and the Service Company                   Custodian. Depositor acknowledges that any dis-
   will process such directions as soon as practicable                                                                               Custodial Account, signed by the designating per-
                                                                     tribution of a taxable amount from the Custodial                son, and filed with the Custodian. If, in the opin-
   after receipt thereof (subject to the second paragraph            Account (except for distribution on account of
   of Section 3 of this Article IX).                                                                                                 ion of the Custodian or Service Company, any
                                                                     depositor’s disability or death, return of an “excess           designation of beneficiary is unclear or incom-
5. Any purchase or redemption of shares of a Fund for or             contribution” referred to in Code Section 4973, or              plete, in addition to any documents or assurances
   from the depositor’s account will be effected at the              a “rollover” from this Custodial Account) made                  the Custodian may request under Section 10, the
   public offering price or net asset value of such Fund             earlier than age 591/2 may subject Depositor to an              Custodian or Service Company shall be entitled
   (as described in the then effective prospectus for such           “additional tax on early distributions” under Code              to request and receive such clarification or addi-
   Fund) next established after the Service Company has              Section 72(t) unless an exception to such addition-             tional instructions as the Custodian in its discre-
   transmitted the depositor’s investment directions to the          al tax is applicable. For that purpose, depositor               tion deems necessary to determine the correct
   transfer agent for the Fund(s).                                   will be considered disabled if Depositor can prove,             Beneficiary(ies) following the depositor’s death.
                                                                     as provided in Code Section 72(m)(7), that deposi-              The form designating the Beneficiary(ies) may
  Any purchase, exchange, transfer or redemption of                  tor is unable to engage in any substantial gainful              name individuals, trusts, estates, or other entities
  shares of a Fund for or from the depositor’s account               activity by reason of any medically determinable                as either primary or contingent beneficiaries.
  will be subject to any applicable sales, redemption or             physical or mental impairment which can be                      However, if the designation does not effectively
  other charge as described in the then effective                    expected to result in death or be of long-continued             dispose of the entire Custodial Account as of the
  prospectus for such Fund.                                          and indefinite duration. It is the responsibility of            time distribution is to commence, the term
                                                                     the depositor (or the Beneficiary) by appropriate               “Beneficiary” shall then mean the designating
6. The Service Company shall maintain adequate records               distribution instructions to the Custodian to insure            person’s estate with respect to the assets of the
   of all purchases or sales of shares of one or more                that any applicable distribution requirements of                Custodial Account not disposed of by the desig-
   Funds for the Depositor’s Custodial Account. Any                  Code Section 401(a)(9) and Article IV above are                 nation form. The form last accepted by the
   account maintained in connection herewith shall be                met. If the depositor (or Beneficiary) does not                 Custodian before such distribution is to com-
   in the name of the Custodian for the benefit of the               direct the Custodian to make distributions from the             mence, provided it was received by the Custodian
   depositor. All assets of the Custodial Account shall be           Custodial Account by the time that such distribu-               (or deposited in the U.S. Mail or with a reputable
   registered in the name of the Custodian or of a suit-             tions are required to commence in accordance                    delivery service) during the designating person’s
   able nominee. The books and records of the                        with such distribution requirements, the Custodian              lifetime, shall be controlling and, whether or not
   Custodian shall show that all such investments are                (and Service Company) shall assume that the                     fully dispositive of the Custodial Account, there-
   part of the Custodial Account.                                    depositor (or Beneficiary) is meeting any applica-              upon shall revoke all such forms previously filed
                                                                     ble minimum distribution requirements from                      by that person. The term "designating person"
  The Custodian shall maintain or cause to be main-
                                                                     another individual retirement arrangement main-                 means depositor during his/her lifetime; after
  tained adequate records reflecting transactions of the
                                                                     tained by the depositor (or Beneficiary) and the                depositor’s death, it also means depositor’s
  Custodial Account. In the discretion of the Custodian,
                                                                     Custodian and Service Company shall be fully pro-               spouse, but only if the spouse elects to treat the
  records maintained by the Service Company with
                                                                     tected in so doing.                                             Custodial Account as the spouse’s own Custodial
  respect to the Account hereunder will be deemed to
  satisfy the Custodian’s recordkeeping responsibilities        (b) The depositor acknowledges (i) that any withdrawal               Account in accordance with applicable provi-
  therefor. The Service Company agrees to furnish the               from the Custodial Account will be reported by the               sions of the Code. (Note: Married depositors who
  Custodian with any information the Custodian                      Custodian in accordance with applicable IRS                      reside in a community property or marital proper-
  requires to carry out the Custodian’s recordkeeping               requirements (currently, on Form 1099-R), (ii) that              ty state (Arizona, California, Idaho, Louisiana,
  responsibilities.                                                 the information reported by the Custodian will be                Nevada, New Mexico, Texas, Washington or
                                                                    based on the amounts in the Custodial Account and                Wisconsin), may need to obtain spousal consent
7. Neither the Custodian nor any other party providing                                                                               if they have not designated their spouse as the
                                                                    will not reflect any other individual retirement
   services to the Custodial Account will have any                                                                                   primary Beneficiary for at least half of their
                                                                    accounts the depositor may own and that, conse-

                                                                                                                                                                                      23
         Account. Consult a lawyer or other tax profes-               mailed, depositor either (i) gives Custodian a writ-            file with depositor a written report or reports
         sional for additional information and advice.)               ten order for a complete distribution or transfer of            reflecting the transactions effected by it during
                                                                      the Custodial Account, or (ii) removes the                      such period and the assets of the Custodial
     (b) Notwithstanding any provisions in this Agreement             Custodian and appoints a successor under Section                Account at its close. Upon the expiration of 60
         to the contrary, when and after the distribution             17 below.                                                       days after such a report is sent to depositor (or
         from the Custodial Account to depositor’s                                                                                    Beneficiary), the Custodian or Service Company
         Beneficiary commence, all rights and obligations             Pending the adoption of any amendment necessary                 shall be forever released and discharged from all
         assigned to depositor hereunder shall inure to, and          or desirable to conform this Custodial Account doc-             liability and accountability to anyone with respect
         be enjoyed and exercised by, Beneficiary instead of          ument to the requirements of any amendment to                   to transactions shown in or reflected by such
         depositor.                                                   any applicable provision of the Internal Revenue                report except with respect to any such acts or
                                                                      Code or regulations or rulings thereunder (including            transactions as to which depositor shall have filed
     (c) Notwithstanding Section 3 of Article V of Part Two           any amendment to Form 5305-A or Form 5305-RA),
         above, if the depositor’s spouse is the sole                                                                                 written objections with the Custodian or Service
                                                                      the Custodian and the Service Company may oper-                 Company within such 60 day period.
         Beneficiary on the depositor’s date of death, the            ate the depositor’s Custodial Account in accordance
         spouse will not be treated as the depositor if the           with such requirements to the extent that the                (e) The Service Company shall deliver, or cause to be
         spouse elects not to be so treated. In such event,           Custodian and/or the Service Company deem nec-                   delivered, to depositor all notices, prospectuses,
         the Custodial Account will be distributed in accor-          essary to preserve the tax benefits of the Account.              financial statements and other reports to sharehold-
         dance with the other provisions of such Article IV,                                                                           ers, proxies and proxy soliciting materials relating
         except that distributions to the depositor’s spouse       (c) Notwithstanding the provisions of subsections (a)               to the shares of the Funds(s) credited to the
         are not required to commence until December 31                and (b) above, no amendment shall increase the                  Custodial Account. No shares shall be voted, and
         of the year in which the depositor would have                 responsibilities or duties of Custodian without its             no other action shall be taken pursuant to such
         turned age 70 1/2.                                            prior written consent.                                          documents, except upon receipt of adequate writ-
12.(a) The depositor agrees to provide information to the          (d) This Section 13 shall not be construed to restrict              ten instructions from depositor.
       Custodian at such time and in such manner as may                the Custodian’s right to substitute fee schedules in        (f) Depositor shall always fully indemnify Service
       be necessary for the Custodian to prepare any                   the manner provided by Section 16 below, and no                 Company, Distributor, the Fund(s), Sponsor and
       reports required under Section 408(i) or Section                such substitution shall be deemed to be an amend-               Custodian and save them harmless from any and all
       408A(d)(3)(E) of the Code and the regulations there-            ment of this Agreement.                                         liability whatsoever which may arise either (i) in
       under or otherwise.                                                                                                             connection with this Agreement and the matters
                                                                14. (a) Custodian shall terminate the Custodial Account if
     (b) The Custodian or the Service Company will submit               this Agreement is terminated or if, within 30 days             which it contemplates, except that which arises
         reports to the Internal Revenue Service and the                (or such longer time as Custodian may agree) after             directly out of the Service Company’s, Distributor’s,
         depositor at such time and manner and containing               resignation or removal of Custodian under Section              Fund’s, Sponsor’s or Custodian’s bad faith, gross
         such information as is prescribed by the Internal              17, depositor or Sponsor, as the case may be, has              negligence or willful misconduct, (ii) with respect
         Revenue Service.                                               not appointed a successor which has accepted                   to making or failing to make any distribution, other
                                                                        such appointment. Termination of the Custodial                 than for failure to make distribution in accordance
     (c) The depositor, Custodian and Service Company                   Account shall be effected by distributing all assets           with an order therefor which is in full compliance
         shall furnish to each other such information rele-             thereof in a single payment in cash or in kind to              with Section 10, or (iii) actions taken or omitted in
         vant to the Custodial Account as may be required               depositor, subject to Custodian’s right to reserve             good faith by such parties. Neither Service
         under the Code and any regulations issued or                   funds as provided in Section 17.                               Company nor Custodian shall be obligated or
         forms adopted by the Treasury Department thereun-                                                                             expected to commence or defend any legal action
         der or as may otherwise be necessary for the              (b) Upon termination of the Custodial Account, this                 or proceeding in connection with this Agreement or
         administration of the Custodial Account.                      custodial account document shall have no further                such matters unless agreed upon by that party and
                                                                       force and effect (except for Sections 15(f), 17(b)              depositor, and unless fully indemnified for so doing
     (d) The depositor shall file any reports to the Internal          and (c) hereof which shall survive the termination              to that party’s satisfaction.
         Revenue Service which are required of him by law              of the Custodial Account and this document), and
         (including Form 5329), and neither the Custodian              Custodian shall be relieved from all further liability      (g)The Custodian and Service Company shall each be
         nor Service Company shall have any duty to advise             hereunder or with respect to the Custodial                     responsible solely for performance of those duties
         depositor concerning or monitor depositor’s com-              Account and all assets thereof so distributed.                 expressly assigned to it in this Agreement, and nei-
         pliance with such requirement.                                                                                               ther assumes any responsibility as to duties
                                                                15.(a) In its discretion, the Custodian may appoint one or            assigned to anyone else hereunder or by operation
13.(a) Depositor retains the right to amend this Custodial             more contractors or service providers to carry out             of law.
       Account document in any respect at any time,                    any of its functions and may compensate them
       effective on a stated date which shall be at least 60           from the Custodial Account for expenses attendant           (h)The Custodian and Service Company may each
       days after giving written notice of the amendment               to those functions. In the event of such appoint-              conclusively rely upon and shall be protected in
       (including its exact terms) to Custodian by regis-              ment, all rights and privileges of the Custodian               acting upon any written order from depositor or
       tered or certified mail, unless Custodian waives                under this Agreement shall pass through to such                Beneficiary, or any investment adviser appointed
       notice as to such amendment. If the Custodian                   contractors or service providers who shall be enti-            under Section 8, or any other notice, request, con-
       does not wish to continue serving as such under                 tled to enforce them as if a named party.                      sent, certificate or other instrument or paper
       this Custodial Account document as so amended, it                                                                              believed by it to be genuine and to have been
       may resign in accordance with Section 17 below.             (b) The Service Company shall be responsible for                   properly executed, and so long as it acts in good
                                                                       receiving all instructions, notices, forms and remit-          faith, in taking or omitting to take any other action
     (b) Depositor delegates to the Custodian the deposi-              tances from depositor and for dealing with or for-             in reliance thereon. In addition, Custodian will
         tor’s right so to amend, provided (i) the Custodian           warding the same to the transfer agent for the                 carry out the requirements of any apparently valid
         does not change the investments available under               Fund(s).                                                       court order relating to the Custodial Account and
         this Custodial Agreement and (ii) the Custodian                                                                              will incur no liability or responsibility for so doing.
         amends in the same manner all agreements compa-           (c) The parties do not intend to confer any fiduciary
         rable to this one, having the same Custodian, per-            duties on Custodian or Service Company (or any           16.(a) The Custodian, in consideration of its services
         mitting comparable investments, and under which               other party providing services to the Custodial                 under this Agreement, shall receive the fees speci-
         such power has been delegated to it; this includes            Account), and none shall be implied. Neither                    fied on the applicable fee schedule. The fee sched-
         the power to amend retroactively if necessary or              shall be liable (or assumes any responsibility) for             ule originally applicable shall be the one specified
         appropriate in the opinion of the Custodian in                the collection of contributions, the proper amount,             in the Adoption Agreement or Disclosure
         order to conform this Custodial Account to perti-             time or tax treatment of any contribution to the                Statement, as applicable. The Custodian may sub-
         nent provisions of the Code and other laws or suc-            Custodial Account or the propriety of any contri-               stitute a different fee schedule at any time upon 30
         cessor provisions of law, or to obtain a governmen-           butions under this Agreement, or the purpose,                   days’ written notice to depositor. The Custodian
         tal ruling that such requirements are met, to adopt           time, amount (including any minimum distribution                shall also receive reasonable fees for any services
         a prototype or master form of agreement in substi-            amounts), tax treatment or propriety of any distrib-            not contemplated by any applicable fee schedule
         tution for this Agreement, or as otherwise may be             ution hereunder, which matters are the sole                     and either deemed by it to be necessary or desir-
         advisable in the opinion of the Custodian. Such an            responsibility of depositor and depositor’s                     able or requested by depositor.
         amendment by the Custodian shall be communicat-               Beneficiary.
         ed in writing to depositor, and depositor shall be                                                                        (b)Any income, gift, estate and inheritance taxes and
         deemed to have consented thereto unless, within           (d) Not later than 60 days after the close of each cal-            other taxes of any kind whatsoever, including trans-
         30 days after such communication to depositor is              endar year (or after the Custodian’s resignation or            fer taxes incurred in connection with the invest-
                                                                       removal), the Custodian or Service Company shall               ment or reinvestment of the assets of the Custodial

24
      Account, that may be levied or assessed in respect           sent by first-class mail to such person at that person’s          Part Three of this Agreement and the provisions of
      to such assets, and all other administrative expenses        last address on the Custodian’s records.                          the Adoption Agreement are the legal documents
      incurred by the Custodian in the performance of its                                                                            governing the depositor’s Custodial Account.
      duties (including fees for legal services rendered to     20.Depositor or depositor’s Beneficiary shall not have the
      it in connection with the Custodial Account) shall           right or power to anticipate any part of the Custodial          (c) In the Adoption Agreement the depositor must
      be charged to the Custodial Account. If the                  Account or to sell, assign, transfer, pledge or hypothe-            designate the Custodian Account as either a Roth
      Custodian is required to pay any such amount, the            cate any part thereof. The Custodial Account shall not              IRA or a Traditional IRA, and a separate account
      Depositor (or Beneficiary) shall promptly upon               be liable for the debts of depositor or depositor’s                 will be established for such IRA. One Custodial
      notice thereof reimburse the Custodian.                      Beneficiary or subject to any seizure, attachment, exe-             Account may not serve as a Roth IRA and a
                                                                   cution or other legal process in respect thereof except             Traditional IRA (through the use of subaccounts or
   (c) All such fees and taxes and other administrative            to the extent required by law. At no time shall it be               otherwise).
       expenses charged to the Custodial Account shall be          possible for any part of the assets of the Custodial
       collected either from the amount of any contribu-           Account to be used for or diverted to purposes other            (d) The depositor acknowledges that the Service
       tion or distribution to or from the Account, or (at         than for the exclusive benefit of the depositor or his/her          Company may require the establishment of differ-
       the option of the person entitled to collect such           Beneficiary except to the extent required by law.                   ent Roth IRA accounts to hold annual contribu-
       amounts) to the extent possible under the circum-                                                                               tions under Code Section 408A(c)(2) and to hold
       stances by the conversion into cash of sufficient        21.When accepted by the Custodian, this Agreement is                   conversion amounts under Code Section
       shares of one or more Funds held in the Custodial           accepted in and shall be construed and administered                 408A(c)(3)(B). The Service Company may also
       Account (without liability for any loss incurred            in accordance with the laws of the state where the                  require the establishment of different Roth IRA
       thereby). Notwithstanding the foregoing, the                principal offices of the Custodian are located. Any                 accounts to hold amounts converted in different
       Custodian or Service Company may make demand                action involving the Custodian brought by any other                 calendar years. If the Service Company does not
       upon the depositor for payment of the amount of             party must be brought in a state or federal court in                require such separate account treatment, the
       such fees, taxes and other administrative expenses.         such state.                                                         depositor may make annual contributions and
       Fees which remain outstanding after 60 days may                                                                                 conversion contributions to the same account.
                                                                   If in the Adoption Agreement, depositor designates
       be subject to a collection charge.                          that the Custodial Account is a Traditional IRA, this           (e) The depositor acknowledges that the Service
17.(a) Upon 30 days’ prior written notice to the Custodian,        Agreement is intended to qualify under Code Section                 Company may require the establishment of differ-
       Depositor or Sponsor, as the case may be, may               408(a) as an individual retirement custodial account                ent Traditional IRA accounts to hold pre-tax
       remove it from its office hereunder. Such notice, to        and to entitle depositor to the retirement savings                  amounts and any after-tax amounts.
       be effective, shall designate a successor custodian         deduction under Code Section 219 if available. If in
                                                                   the Adoption Agreement depositor designates that the         25. This Agreement and the Adoption Agreement signed
       and shall be accompanied by the successor’s written                                                                          by the depositor (as either may be amended) are the
       acceptance. The Custodian also may at any time              Custodial Account is a Roth IRA, this Agreement is
                                                                   intended to qualify under Code Section 408A as a                 documents governing the depositor’s Custodial
       resign upon 30 days’ prior written notice to                                                                                 Account. Articles I through VII of Part One of this
       Sponsor, whereupon the Sponsor shall notify the             Roth individual retirement Custodial Account and to
                                                                   entitle depositor to the tax-free withdrawal of amounts          Agreement are in the form promulgated by the
       depositor (or Beneficiary) and shall appoint a suc-                                                                          Internal Revenue Service as Form 5305-A. It is antic-
       cessor to the Custodian. In connection with its res-        from the Custodial Account to the extent permitted in
                                                                   such Code section.                                               ipated that, if and when the Internal Revenue Service
       ignation hereunder, the Custodian may, but is not                                                                            promulgates changes to Form 5305-A, the Custodian
       required to, designate a successor custodian by             If any provision hereof is subject to more than one              will amend this Agreement correspondingly.
       written notice to the Sponsor or depositor (or              interpretation or any term used herein is subject to
       Beneficiary), and the Sponsor or depositor (or              more than one construction, such ambiguity shall be              Articles I through VIII of Part Two of this Agreement
       Beneficiary) will be deemed to have consented to            resolved in favor of that interpretation or construction         are in the form promulgated by the Internal Revenue
       such successor unless the Sponsor or depositor (or          which is consistent with the intent expressed in                 Service as Form 5305-RA. It is anticipated that, if
       Beneficiary) designates a different successor custodi-      whichever of the two preceding sentences is applicable.          and when the Internal Revenue Service promulgates
       an and provides written notice thereof together with                                                                         changes to Form 5305-RA, the Custodian will amend
       such a different successor’s written acceptance by          However, the Custodian shall not be responsible for              this Agreement correspondingly.
       such date as the Custodian specifies in its original        whether or not such intentions are achieved through
       notice to the Sponsor or depositor (or Beneficiary)         use of this Agreement, and depositor is referred to              The Internal Revenue Service has endorsed the use
       (provided that the Sponsor or depositor (or                 depositor’s attorney for any such assurances.                    of documentation permitting a depositor to establish
       Beneficiary) will have a minimum of 30 days to des-                                                                          either a Traditional IRA or Roth IRA (but not both
       ignate a different successor).                           22.Depositor should seek advice from depositor’s attor-             using a single Adoption Agreement), and this Kit
                                                                   ney regarding the legal consequences (including but              complies with the requirements of the IRS guidance
   (b)The successor custodian shall be a bank, insured             not limited to federal and state tax matters) of entering        for such use. If the Internal Revenue Service subse-
      credit union, or other person satisfactory to the            into this Agreement, contributing to the Custodial               quently determines that such an approach is not per-
      Secretary of the Treasury under Code Section                 Account, and ordering Custodian to make distribu-                missible, or that the use of a “combined” Adoption
      408(a)(2). Upon receipt by Custodian of written              tions from the Account. Depositor acknowledges that              Agreement does not establish a valid Traditional IRA
      acceptance by its successor of such successor’s              Custodian and Service Company (and any company                   or a Roth IRA (as the case may be), the Custodian
      appointment, Custodian shall transfer and pay over           associated therewith) are prohibited by law from ren-            will furnish the depositor with replacement docu-
      to such successor the assets of the Custodial                dering such advice.                                              ments and the depositor will if necessary sign such
      Account and all records (or copies thereof) of                                                                                replacement documents. Depositor acknowledge
      Custodian pertaining thereto, provided that the suc-      23. If any provision of any document governing the                  and agrees to such procedures and to cooperate with
      cessor custodian agrees not to dispose of any such            Custodial Account provides for notice, instructions or          Custodian to preserve the intended tax treatment of
      records without the Custodian’s consent.                      other communications from one party to another in               the Account.
      Custodian is authorized, however, to reserve such             writing, to the extent provided for in the procedures
      sum of money or property as it may deem advis-                of the Custodian, Service Company or another party,         26. If the depositor maintains an Individual Retirement
      able for payment of all its fees, compensation,               any such notice, instructions or other communications           Account under Code Section 408(a), Depositor may
      costs, and expenses, or for payment of any other              may be given by telephonic, computer, other electron-           convert or transfer such other IRA to a Roth IRA
      liabilities constituting a charge on or against the           ic or other means, and the requirement for written              under Code Section 408A using the terms of this
      assets of the Custodial Account or on or against the          notice will be deemed satisfied.                                Agreement and the Adoption Agreement by complet-
      Custodian, with any balance of such reserve                                                                                   ing and executing the Adoption Agreement and giv-
                                                                24.The legal documents governing the Custodial Account              ing suitable directions to the Custodian and the cus-
      remaining after the payment of all such items to be
                                                                   are as follows:                                                  todian or trustee of such other IRA. Alternatively, the
      paid over to the successor custodian.
                                                                   (a) If in the Adoption Agreement the depositor desig-            depositor may convert or transfer such other IRA to a
   (c) Any Custodian shall not be liable for the acts or                                                                            Roth IRA by use of a reply card or by telephonic,
                                                                       nated the Custodial Account as a Traditional IRA
       omissions of its predecessor or its successor.                                                                               computer or electronic means in accordance with
                                                                       under Code Section 408(a), the provisions of Part
                                                                       One and Part Three of this Agreement and the pro-            procedures adopted by the Custodian or Service
18. References herein to the “Internal Revenue Code” or                                                                             Company intended to meet the requirements of Code
    “Code” and sections thereof shall mean the same as                 visions of the Adoption Agreement are the legal
                                                                       documents governing the depositor’s Custodial                Section 408A, and the depositor will be deemed to
    amended from time to time, including successors to                                                                              have executed the Adoption Agreement and adopted
    such sections.                                                     Account.
                                                                                                                                    the provisions of this Agreement and the Adoption
19. Except where otherwise specifically required in this           (b) If in the Adoption Agreement the depositor desig-            Agreement in accordance with such procedures.
    Agreement, any notice from Custodian to any person                 nated the Custodial Account as a Roth IRA under
                                                                       Code Section 408A, the provisions of Part Two and           In accordance with the requirements of Code Section
    provided for in this Agreement shall be effective if                                                                           408A(d)(6) and regulations thereunder, the depositor
                                                                                                                                                                                       25
     may recharacterize a contribution to a Traditional            account. However, this Agreement (and the                 ment of the age of majority under the laws of the
     IRA as a contribution to a Roth IRA, or may rechar-           Adoption Agreement) is not binding upon the               depositor’s state of residence at such time, the depos-
     acterize a contribution to a Roth IRA as a contribu-          Custodian until the depositor has received a state-       itor may advise the Custodian in writing (accompa-
     tion to a Traditional IRA. The depositor agrees to            ment confirming the initial transaction for the           nied by such documentation as the Custodian may
     observe any limitations imposed by the Service                Account. Receipt by the depositor of a confirmation       require) that he or she is assuming sole responsibility
     Company on the number of such transactions in any             of the purchase of the Fund shares indicated in the       to exercise all rights, powers, obligations, responsi-
     year (or any such limitations or other restrictions that      depositor’s Adoption Agreement will serve as notifi-      bilities, authorities or requirements associated with
     may be imposed by the Service Company or the IRS).            cation of State Street Bank and Trust Company’s           the Account. Upon such notice to the Custodian,
                                                                   acceptance of appointment as Custodian of the             the depositor shall have and shall be responsible for
 27. The depositor acknowledges that he or she has                 depositor’s account.                                      all of the foregoing, the Custodian will deal solely
     received and read the current prospectus for each Fund                                                                  with the depositor as the person controlling the
     in which his or her Account is invested and the            29. If the depositor is a minor under the laws of his or     administration of the Account, and the depositor’s
     Individual Retirement Account Disclosure Statement             her state of residence, then a parent or guardian        parent or guardian thereafter shall not have or exer-
     related to the Account. The depositor represents under         shall exercise all powers and duties of the Depositor,   cise any of the foregoing. (Absent such written
     penalties of perjury that his or her Social Security           as indicated herein, and shall sign the Adoption         notice from the depositor, Custodian shall be under
     Number (or other Taxpayer Identification Number) as            Agreement on behalf of the minor. The Custodian’s        no obligation to acknowledge the depositor’s right to
     stated in the Adoption Agreement is correct.                   acceptance of the Account on behalf of any deposi-       exercise such powers and authority and may contin-
                                                                    tor who is a minor is expressly conditioned upon the     ue to rely on the parent or guardian to exercise such
 28. If all required forms and information are properly             agreement of the parent or guardian to accept the
     submitted, State Street Bank and Trust Company will                                                                     powers and authority until notified to the contrary by
                                                                    responsibility to exercise all such powers and duties,
     accept appointment as Custodian of the depositor’s                                                                      the depositor.)
                                                                    and all parties hereto so acknowledge. Upon attain-




26
FOR MORE INFORMATION
Shareholder Account            Literature Only        Website
or Statement Inquiries         800-874-3733           www.LordAbbett.com
800-842-0828
Lord Abbett Mutual Fund Shares are distributed by: LORD ABBETT DISTRIBUTOR LLC • 90 Hudson Street • Jersey City, NJ 07302-3973
                                                                                                                                 LARP-20-APP
                                                                                                                                       (9/02)

								
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