1933 Act File No. 2-64536
1940 Act File No. 811-2924
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 19 [X]
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]
OF 1940
Amendment No. 17 [X]
LORD ABBETT U.S. GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
(FORMERLY LORD ABBETT CASH RESERVE FUND, INC.)
Exact Name of Registrant as Specified in Charter
767 FIFTH AVENUE, NEW YORK, N.Y. 10153
Address of Principal Executive Office
Registrant's Telephone Number (212) 848-1800
Kenneth B. Cutler, Vice President & Secretary
767 Fifth Avenue, New York, N.Y. 10153
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
____ immediately on filing pursuant to paragraph (b) of Rule 485
X on November 1, 1995 pursuant to paragraph (b) of Rule 485
____ 60 days after filing pursuant to paragraph (a) (1) of Rule 485
____ on (date) pursuant to paragraph (a) (1) of Rule 485
____ 75 days after filing pursuant to paragraph (a) (2) of Rule 485
____ on (date) pursuant to paragraph (a) (ii) of Rule 485
If appropriate, check the following box:
____ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a) (1) and a Rule 24f-2 Notice for
Registrant's most recent fiscal year was filed with the Commission on or about
August 29, 1995.
<PAGE>
LORD ABBETT FUNDAMENTAL VALUE FUND, INC.
FORM N-1A
Cross Reference Sheet
Pursuant to Rule 481(a)
Form N-1A Location In Prospectus or
ITEM NO. STATEMENT OF ADDITIONAL INFORMATION
1 Cover Page
2 Fee Table
3 (a) Financial Highlights; Performance
3 (b) N/A
4 (a) (i) Cover Page
4 (a) (ii) Cover Page; How We Invest
4 (b) (c) N/A
5 (a)(b) (c) Our Management; Back Cover Page
5 (d) N/A
5 (e) Back Cover Page
5 (f) Our Management; Financial Highlights
5 (g) N/A
5 A N/A
6 (a) Cover Page
6 (b) (c) (d) N/A
6 (e) Cover Page
6 (f) (g) Dividends, Yield, Taxes
6 (h) N/A
7 (a) Back Cover Page
7 (b) (c) (d) Purchases; New Asset Value; Shareholder Services
(f)
7 (e) N/A
8 (a) Redemptions
8 (b) N/A
8 (c) (d) Redemptions
9 N/A
10 Cover Page
11 Cover Page - Table of Contents
12 N/A
13 (a) (b) Investment Objective and Policies
13 (c) (d) N/A
14 Directors and Officers
15 (a) (b) N/A
15 (c) Directors and Officers
16 (a) (i) Investment Advisory and Other Services
16 (a) (ii) Directors and Officers
16 (a) (iii) Investment Advisory and Other Services
16 (b) Investment Advisory and Other Services
16 (c) (d) (e)
(g) N/A
16 (f) Telephone Exchange Privilege and Rule 12b-1 Plan
16 (h) Investment Advisory and Other Services
16 (i) N/A
<PAGE>
Form N-1A Location In Prospectus or
ITEM NO. STATEMENT OF ADDITIONAL INFORMATION
17 (a) (c) Portfolio Transactions
17 (b) (d) (e) N/A
18 (a) N/A - Prospectus Cover Page
18 (b) N/A
19 (a) Telephone Exchange Privilege and Rule 12b-1;
Shareholder Services and Retirement Plans
19 (b) Net Asset Value and Dividends
19 (c) N/A
20 Taxes
21 (a) Investment Advisory and Other Services
21 (b) (c) N/A
22 (a) Yield
22 (b) N/A
23 Financial Statements
<PAGE>
LORD ABBETT U.S. GOVERNMENT
SECURITIES MONEY MARKET FUND, INC.
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
800-426-1130
OUR FUND, LORD ABBETT U.S. GOVERNMENT SECURITIES MONEY MARKET FUND, INC. (WE OR
THE FUND), IS A DIVERSIFIED, OPEN-END MANAGEMENT INVESTMENT COMPANY INCORPORATED
UNDER MARYLAND LAW ON MAY 9, 1979. WE HAVE A SINGLE CLASS OF SHARES WITH EQUAL
RIGHTS AS TO VOTING, DIVIDENDS, ASSETS AND LIQUIDATION.
THE INVESTMENT OBJECTIVE OF THE FUND IS TO PROVIDE HIGH CURRENT INCOME AND
PRESERVATION OF CAPITAL THROUGH INVESTMENTS IN HIGH-QUALITY, SHORT-TERM LIQUID
SECURITIES. THERE CAN BE NO ASSURANCE THAT THIS OBJECTIVE WILL BE ACHIEVED.
UNDER NORMAL CIRCUMSTANCES, THE FUND SEEKS TO ATTAIN ITS INVESTMENT OBJECTIVE BY
INVESTING AT LEAST 65% OF ITS TOTAL ASSETS IN OBLIGATIONS ISSUED OR BACKED BY
THE U.S. GOVERNMENT OR ITS AGENCIES OR INSTRUMENTALITIES. THIS PROSPECTUS SETS
FORTH CONCISELY THE INFORMATION ABOUT THE FUND THAT A PROSPECTIVE INVESTOR
SHOULD KNOW BEFORE INVESTING. ADDITIONAL INFORMATION ABOUT THE FUND HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS AVAILABLE UPON REQUEST
WITHOUT CHARGE. THE STATEMENT OF ADDITIONAL INFORMATION IS INCORPORATED BY
REFERENCE INTO THIS PROSPECTUS AND MAY BE OBTAINED, WITHOUT CHARGE, BY WRITING
DIRECTLY TO THE FUND OR BY CALLING THE FUND AT 800-874-3733. ASK FOR PART B OF
THE PROSPECTUS -- THE STATEMENT OF ADDITIONAL INFORMATION.
THE DATE OF THIS PROSPECTUS, AND THE DATE OF THE STATEMENT OF ADDITIONAL
INFORMATION, IS NOVEMBER 1, 1995.
PROSPECTUS
INVESTORS SHOULD READ AND RETAIN THIS PROSPECTUS. SHAREHOLDER INQUIRIES SHOULD
BE MADE IN WRITING TO THE FUND OR BY CALLING 800-821-5129. IN ADDITION, YOU CAN
MAKE INQUIRIES THROUGH YOUR BROKER-DEALER.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. AN
INVESTMENT IN THE FUND INVOLVES RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
CONTENTS PAGE
1 Investment Objective 2
2 Fee Table 2
3 Financial Highlights 2
4 How We Invest 3
5 Net Asset Value 4
6 Purchases 4
7 Dividends, Yield and Taxes 5
8 Redemptions 6
9 Our Management 6
10 Shareholder Services 7
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
OUR POLICY IS TO MAINTAIN, AND WE HAVE MAINTAINED, A CONSTANT NET ASSET VALUE OF
$1.00 PER SHARE. HOWEVER, AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE FUND
WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
<PAGE>
1 INVESTMENT OBJECTIVE
Our investment objective is to provide high current income and preservation of
capital through investments in high-quality, short-term liquid securities.
2 FEE TABLE
A summary of the Funds expenses is set forth in the table below. The example is
not a representation of past or future expenses. Actual expenses may be greater
or less than those shown.
<TABLE>
<CAPTION>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load(1) on Purchases
(See Purchases) None
Deferred Sales Load(1) (See Purchases) None(2)
- ----------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee (See Our Management) .50%
12b-1 Fee (See Purchases). None(2)
Other Expenses (See Our Management) .36%
- ----------------------------------------------------
Total Operating Expenses .86%
====================================================
<FN>
Example: Assume an annual return is 5% and no change in the level of expenses
described above. For every $1,000 invested, with reinvestment of all
dividends and distributions, you would pay the following total expenses if
you closed your account after the number of years indicated.
1 year 3 years 5 years 10 years
------ ------- ------- --------
$9(3) $27(3) $48(3) $106(3)
(1) Sales load is referred to as sales charge and deferred sales load is
referred to as contingent deferred reimbursement charge throughout this
Prospectus.
(2) Other Lord Abbett-sponsored funds have instituted Rule 12b-1 plans that
provide for a 1% contingent deferred reimbursement charge on shares subject
to the 1% fee paid under those plans where those shares (or any shares of
another fund received in exchange for those shares) are redeemed within 12
months of purchase or 24 months after the month of purchase. Although the
Fund does not pay a 1% Rule 12b-1 fee, it will collect the contingent
deferred reimbursement charge on behalf of other Lord Abbett funds.
(3) Based on total operating expenses shown on table above.
The foregoing is provided to give investors a better understanding of the
expenses that are incurred by an investment in the Fund.
</FN>
</TABLE>
3 FINIANCIAL HIGHLIGHTS
The following table has been audited by Deloitte & Touche LLP, independent
auditors, in connection with their annual audit of the Funds Financial
Statements, whose report thereon is incorporated by reference into the Statement
of Additional Information and may be obtained upon request and has been included
herein in reliance upon their authority as experts in auditing and accounting.
<TABLE>
<CAPTION>
PER SHARE OPERATING YEAR ENDED JUNE 30,
--------------------------------------------------------------------------------------
PERFORMANCE: 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .046 .025 .024 .038 .064 .077 .080 .062 .052 .068
Less Distributions
Dividends from net investment income (.046) (.025) (.024) (.038) (.064) (.077) (.080) (.062) (.052) (.068)
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 4.65% 2.54% 2.43% 3.87% 6.55% 8.01% 8.32% 6.35% 5.31% 6.99%
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $140,642 $156,069 $122,782 $147,229 $195,134 $195,547 $212,001 $211,795 $168,871 $193,527
RATIOS TO AVERAGE NET ASSETS:
Expenses, including waiver 0.86% 0.85% 0.87% 1.01% 0.95% 0.90% 0.87% 0.88% 1.03% 0.89%
Expenses, excluding waiver 0.86% 0.90% 0.96% 1.02% 0.95% 0.90% 0.87% 0.88% 1.03% 0.89%
Net investment income 4.54% 2.56% 2.41% 3.86% 6.40% 7.74% 8.02% 6.17% 5.22% 6.77%
===================================================================================================================================
<FN>
After taking into account management fee waiver.
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
4 HOW WE INVEST
Our investment objective is to provide high current income and preservation of
capital through investments in high-quality, short- term liquid securities.
Under normal circumstances, the Fund will seek to achieve its objective by
investing at least 65% of its total assets in obligations issued or backed by
the U.S. Government, its agencies or instrumentalities. These obligations which
must be eligible investments for a money market fund include: (1) obligations
issued by the U.S. Treasury, differing only in their interest rates, maturities
and time of issuance, and including Treasury bills, notes and bonds and (2)
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities which are supported by any of the following: (a) the full
faith and credit of the United States (such as GNMA certificates), (b) the right
of the issuer to borrow from the U.S. Treasury or (c) the credit of the agency
or instrumentality. Agencies and instrumentalities include Federal Home Loan
Banks, Federal Home Loan Mortgage Association, Federal National Mortgage
Association, Federal Farm Credit Banks and Student Loan Marketing Association.
With respect to not more than 35% of the Funds total assets, the Fund may invest
in high-quality, short-term liquid securities, including certificates of deposit
of domestic banks, corporate commercial paper, bankers acceptances, repurchase
agreements, corporate bonds and notes and other debt instruments.
We seek to keep money at work in what we consider to be the most attractive
short-term debt investments consistent with our objective. We invest in a
portfolio of short-term liquid securities which have maturities of not more than
12 months from the date of settlement of our purchase, which may include, among
other investments, the following.
BANK OBLIGATIONS: Obligations (including certificates of deposit and bankers
acceptances) of U.S. banks and savings and loan associations which at the date
of their latest public reporting had total assets in excess of $1 billion and
capital, surplus and undivided profits in excess of $100 million.
COMMERCIAL PAPER: Commercial paper (short-term unsecured promissory notes of
corporations including variable amount master demand notes) which at the date of
investment is rated A-1 by Standard & Poors Corporation (S&P) or P-1 by Moodys
Investors Service, Inc. (Moodys) or, if not rated, is issued by companies having
outstanding debt rated AAA or AA by S&P or Aaa or Aa by Moodys.
SHORT-TERM CORPORATE DEBT SECURITIES: Corporate debt securities (bonds and
debentures) with no more than 12 months remaining to maturity at date of
settlement and rated AAA or AA by S&P or Aaa or Aa by Moodys.
REPURCHASE AGREEMENTS: Repurchase agreements with (i) any member bank of the
Federal Reserve System or primary dealer in U.S. Government securities or (ii) a
broker-dealer for periods not to exceed 30 days and only with respect to
underlying money market securities which throughout the period have a value at
least equal to the amount of the repurchase price (including accrued interest).
We will not invest more than 25% of our assets in any one industry, except that
there is no percentage limitation on our investments in obligations of banks,
bank holding companies, finance companies or U.S. Government obligations.
We may invest in obligations (for example, commercial paper with a bank letter
of credit or commercial paper of a subsidiary accompanied by a guarantee of the
parent) other than those listed above if the obligation is accompanied by a
guarantee of principal and interest, provided that the guarantee is that of a
bank or corporation whose obligations we may otherwise purchase. Any such
obligation and guarantee must be due within no more than 12 months from the date
of settlement of our purchase.
We have no present plans to change our policies with regard to the types or
maturities of securities in which we invest. However, if we determine that our
investment objective can best be achieved by a change in investment policy or
strategy, we may make such a change without shareholder approval by disclosing
it in our Prospectus.
RULE 2A-7. In addition to the foregoing, our investment practices are also
governed by certain portfolio maturity, diversification and quality requirements
contained in Rule 2a-7, as amended, under the Investment Company Act of 1940
(the Rule). The Rule imposes these requirements on the Fund, both because we
hold ourselves out as a money market fund and because we employ the amortized
cost method of valuing our portfolio securities (see also Net Asset Value).
The Rules maturity requirements limit the Funds dollar-weighted average
portfolio maturity to not more than 90 days and the maturity of any single
portfolio instrument to not more than 397 days. Generally speaking, the
diversification provisions of the Rule limit our investments in (i) the
securities of any one issuer, other than U.S. Government securities or
repurchase agreements fully collateralized by U.S. Government securities
(limited to 5% of our total assets, except with respect to certain investments
held for three business days or less), (ii) securities issued by or subject to
puts from any single institution (limited to 5% of total assets, except that
unconditional puts are treated less restrictively) and (iii) securities that are
neither rated nor comparable in quality to securities that are rated in the
highest category by a requisite number of rating agencies (generally, limited to
5% of our total assets overall and the greater of $1 million or 1% of total
assets in such securities of one issuer). Finally, as to the quality of our
portfolio securities, the Rule permits us to invest only in securities that
present minimal credit risks as determined by Lord, Abbett & Co. (Lord Abbett)
(where such determination is delegable by the Board of Directors under the Rule)
or by the Board of Directors (where not delegable) and that satisfy certain
requirements in the Rule relating to ratings by nationally-recognized rating
organizations.
<PAGE>
If the Board of Directors should determine that continuing to abide by the
conditions of the Rule is not in the best interest of our shareholders, we would
neither use amortized cost nor hold ourselves out as a money market fund.
However, we would continue to comply with our remaining policies and
restrictions.
CONCENTRATION. We may invest more than 25% of our assets in finance companies,
for example, General Electric Capital Corporation and General Motors Acceptance
Corporation. To the extent that these finance companies are in the same industry
and represent more than 25% of our assets, there would be concentration in that
industry and exposure to the risk of nonpayment for that industry would be
greater. However, to the extent that these investments are made pursuant to the
policies above, including the maturity and quality requirements, this risk is
minimized.
5 NET ASSET VALUE
The net asset value of our shares is calculated twice on each day that the New
York Stock Exchange is open for trading; at 12 noon and at 2 P.M. (New York
time). Securities are valued at cost plus (minus) amortized discount (premium),
if any, pursuant to the Rule. The conditions of the Rule are briefly described
above under How We Invest.
6 PURCHASES
Our shares are continuously offered at their net asset value (normally $1.00 per
share) next determined after the purchase order in proper form is received by
Lord Abbett. Proper purchase order form includes federal funds received by our
custodian bank. The minimum initial investment is $1,000 for regular accounts;
$250 for IRA, 403(b) and tax-qualified retirement plans. We may waive the
initial investment minimum for plans involving continuous investments.
Subsequent investments can be made in any amount. There is no sales charge.
You may open an account either by mail or wire. To open an account by mail, send
the completed Application Form plus payment to Lord Abbett U.S. Government
Securities Money Market Fund, Inc., P.O. Box 419576, Kansas City, Missouri
64141. Checks should be made payable to Lord Abbett U.S. Government Securities
Money Market Fund, Inc.
To open an account by wire, first call us at 800-821-5129 to obtain an account
number. You should direct payment wired in federal funds to our custodian bank,
United Missouri Bank of Kansas City, N.A., Tenth and Grand, Kansas City,
Missouri and specify the name of the Fund and your account number in the wire.
The Fund is not responsible for any delays in the wiring system.
In accordance with our investment objective, we intend to be invested as fully
as possible at all times. Since we will be investing in instruments which
normally require immediate payment in federal funds (monies credited to our
custodian banks account with its regional Federal Reserve Bank), if your
purchase order in all other respects is found to be in proper form, payment to
complete a proper order normally will be considered received as follows.
1. Payment transmitted by federal funds wire if wire and order, in proper
form, are received by Lord Abbett prior to 12 noon (New York time) dividends
begin accruing on the day of receipt. If wire and order, in proper form, are
received after 12 noon (New York time) dividends begin accruing on the following
business day.
2. Payment by check or other negotiable bank draft drawn on U.S. banks
after receipt of an order in proper form by Lord Abbett, dividends begin
accruing on the business day on which the federal funds represented by such
check or draft are made available to our custodian bank. Checks drawn on foreign
banks will not be accepted unless provision is made for payment in U.S. dollars
through a U.S. bank.
A purchase or redemption order is in proper form when it contains all of the
information and documentation required by the order form or required
supplementally by Lord Abbett or the Fund to carry out the order. Payments must
be converted to federal funds by being credited to our custodian banks account
with its Federal Reserve Bank. For required signatures, if the signer has any
legal capacity, the signature and such capacity must be guaranteed by an
eligible guarantor. Certain legal documents may be required from corporations or
other organizations, executors, trustees and others in a fiduciary or
representative capacity. If you have any questions concerning a purchase or
redemption, call the Fund at 800-821-5129.
Subsequent investments can be made either by mail or wire. We reserve the right
to withdraw all or any part of the offering made by this Prospectus or to reject
any purchase order. We also reserve the right to waive, increase or establish
minimum investment requirements. All purchase orders are subject to our
acceptance and are not binding until confirmed or accepted in writing. Stock
certificates are issued only upon request and no stock certificates are issued
for fractional shares.
RULE 12B-1 PLAN. The service fees described below are not being paid by the Fund
(and have not been paid since July 1, 1992).
The Fund has adopted a Rule 12b-1 Plan (the Plan) which authorizes the Fund to
pay service fees through Lord Abbett to dealers (except with respect to certain
accounts for which tracking data is not available) in order to provide
additional incentives for them to provide continuing information and investment
services to their shareholder accounts and otherwise to encourage their accounts
to remain invested in the Fund. The annual service fee (payable quarterly)
consists of .15% of the average daily net asset value of the Funds shares sold
by broker-dealers.
<PAGE>
Other Lord Abbett-sponsored funds (the Lord Abbett Family of Funds), not
including the Lord Abbett Counsel Group, Lord Abbett Equity Fund (LAEF), Lord
Abbett Series Fund, Inc. (LASF) and Lord Abbett Research Fund, Inc. if not
offered to the general public (LARF), have adopted plans pursuant to Rule 12b-1
calling for, among other things, the payment of a one-time sales distribution
fee, at the time of sale, not to exceed 1% of the net asset value of shares sold
at the $1 million breakpoint (the 1% Family of Funds fee).
Series in the Lord Abbett Counsel Group also have adopted plans pursuant to Rule
12b-1 calling for, among other things, the payment of a service fee and a
distribution fee, at the time shares are sold, not to exceed .25% and .75%,
respectively, of the net asset value of such shares (the 1% Counsel Group fee).
The Fund pays neither such a 1% Family of Funds fee nor a 1% Counsel Group fee.
If shares of another Lord Abbett-sponsored fund subject to a 1% Family of Funds
fee or a 1% Counsel Group fee are exchanged for shares of the Fund and those
Fund shares are later redeemed on or before the end of the twenty-fourth month
after the month in which the original shares were purchased (in the case of a
redemption of shares subject to the 1% Family of Funds fee) or before the first
anniversary of the original shares purchase (in the case of a redemption of
shares subject to the 1% Counsel Group fee), the Fund agrees to collect from the
shareholder, at the time of redemption, a contingent deferred reimbursement
charge of 1% of the cost of the original shares or the then current net asset
value of the redeemed shares, whichever is less, to reimburse the fund or series
that paid such 1% fee in the first instance. The Fund is currently collecting
contingent deferred reimbursement charges on behalf of other Lord
Abbett-sponsored funds under these circumstances even though the Fund is
currently not making service fee payments under its own Plan. The timing,
categories and calculation of this charge may be changed by vote (including a
disinterested directors vote) of the Board of Directors. After such
twenty-fourth month-end (in the case of the 1% Family of Funds fee) or such
first anniversary (in the case of the 1% Counsel Group fee), the Fund will not
collect such contingent deferred reimbursement charge. Redemptions of Fund
shares in exchange for another Lord Abbett-sponsored fund (see Telephone
Exchange Privilege in Shareholder Services) or by participants in qualified
retirement plans under Section 401 of the Internal Revenue Code resulting from
plan loans, hardship withdrawals, death, retirement or separation from service
are excluded from this 1% reimbursement charge.
7 DIVIDENDS, YIELD AND TAXES
DIVIDENDS: On each day that the New York Stock Exchange is open for trading, our
net income will be declared as a dividend to shareholders of record as of 12
noon (New York time) that day. Unless you elect to receive cash, dividends will
be reinvested in additional shares on the monthly reinvestment date.
If you elect a cash payment, (i) a check will be mailed to you as soon as
possible after the monthly reinvestment date or (ii) if you arranged for direct
deposit, your payment will be wired directly to your bank account within one day
after the payable date. If you redeem your entire account, all dividends
declared to the effective time of redemption will be paid to you. Dividends and
distributions declared in October, November or December of any year will be
treated for federal income tax purposes as having been received by shareholders
in that year if they are paid before February 1 of the following year.
YIELD: For the seven-day period ending June 30, 1995, our annualized yield was
4.96% and the compounded effective yield was 5.09%. On that date our portfolio
had a dollar-weighted life to maturity of 29.5 days.
From time to time, the Fund may advertise its yield and effective yield. Both
yield figures are based on historical earnings and are not intended to indicate
future performance. It can be expected that these yields will fluctuate
substantially. The yield of the Fund refers to the income generated by an
investment in the Fund over a seven-day period (which period will be stated in
any advertisement). This income is then annualized. That is, the amount of
income generated by the investment during that week is assumed to be generated
each week over a 52-week period and is shown as a percentage of the investment.
The effective yield is calculated similarly but, when annualized, the income
earned by an investment in the Fund is assumed to be reinvested. The effective
yield will be slightly higher than the yield because of the compounding effect
of this assumed reinvestment.
Yield information is useful in reviewing the Funds performance but, because
yields will fluctuate, such information may not provide a basis for comparison
with domestic bank deposits and other investments which pay a fixed yield for a
stated period of time or other investment companies which may use a different
method of computing yield.
TAXES: We intend to continue to qualify under the Internal Revenue Code as a
regulated investment company. We will try to distribute to shareholders all our
taxable income, so as to avoid the necessity of the Fund paying federal income
tax. Dividends, whether received in cash or reinvested in additional shares,
will generally be treated as ordinary income to shareholders for federal income
tax purposes.
Shareholders may be subject to a $50 penalty under the Internal Revenue Code and
we may be required to withhold and remit to the U.S. Treasury a portion (31%) of
any redemption proceeds (including the value of shares exchanged into another
Lord Abbett-sponsored fund), and of any dividend or distribution on any account,
where the payee (shareholder) failed to provide a correct taxpayer
identification number or to make certain required certifications. For more
details, see the Application Form.
We will inform shareholders of the federal tax status of each dividend and
distribution after the end of each calendar year. Shareholders should consult
their tax advisers concerning applicable state and local taxes as well as the
tax consequences of gains or losses from the redemption or exchange of our
shares.
<PAGE>
8 REDEMPTIONS
We will redeem shares at our net asset value next determined after receipt by
the Fund of a redemption request in the form described below. If you redeem all
of your shares, you will receive, in addition to the net asset value thereof,
all declared but unpaid dividends. You may elect to use either the expedited or
regular redemption procedures or to redeem by check. If either the expedited
procedure or checkwriting has been elected, no stock certificates will be
issued. The expedited procedure and checkwriting may not be used to redeem
shares purchased by check until 15 days after acceptance of the order, or, in
the case of checks drawn on banks located outside of the United States, until
the Fund determines that the check has cleared. Redemption requests with payment
to be made by check will be accepted as of 2 P.M. (New York time) on the day of
receipt so that you will receive that days dividend. Redemption requests with
payment to be made by wire transfer will be effected at the last determined net
asset value and you will not earn the dividend declared on the day shares are
redeemed by wire if such a request is received prior to 12 noon (New York time).
CHECKWRITING. The Fund will provide you, upon request, with forms of checks
drawn on the United Missouri Bank of Kansas City, N.A. (the Bank). These checks
may be made payable to any person in any amount of not less than $500 nor more
than $5,000,000. When such a check is presented to the Bank for payment, the
Bank, as your agent, will request the Fund to redeem a sufficient number of full
and fractional shares in your account to cover the amount of the check. You will
continue earning daily dividends until the check has cleared. You will be
subject to all applicable Bank rules and regulations including the right of the
Bank not to honor checks in amounts exceeding the value of the account at the
time the check is presented for payment, even though you may have another
account with sufficient value in your name on which the check was not written.
You do not establish a checking or other account with the Bank for the purpose
of FDIC federal deposit insurance or otherwise when you participate in this
checkwriting privilege. The Fund and the Bank each reserves the right to modify
or terminate this service at any time. Checks should not be used to close your
account since your account earns dividends until the check clears, and the
amount in your account, including accrued dividends, may not equal the amount of
the check.
EXPEDITED PROCEDURE. Under the expedited procedure, you should designate on the
Application Form an account at a domestic bank. Thereafter, the redemption
proceeds normally will be transmitted by wire (minimum $1,000) or mailed by
check to the designated account on the next business day following receipt of
the request, except that if a redemption request for wire transfer is received
prior to 12 noon (New York time), the redemption proceeds normally will be wired
that day and shares so redeemed will not earn that days dividend. The Fund will
not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine and will employ reasonable procedures to
confirm that instructions received are genuine, including requesting proper
identification and recording all telephone redemptions and mailing the proceeds
only to the named shareholder at the address appearing on the account
registration.
We reserve the right to increase the minimum that may be wired or to impose a
reasonable charge for this service. You may transmit a redemption request to the
Fund by telephone (call the Fund at 800-521-5316 and ask for Expedited
Redemptions Lord Abbett U.S. Government Securities Money Market Fund ) or in
writing. In order to use the expedited procedure, all redemption proceeds must
be paid to the same bank and account as designated on the Application Form. To
change the bank or account you must send a written request to the Fund with
signature(s) guaranteed as described below.
REGULAR PROCEDURE. You must submit a written redemption request to the Fund in
proper form. See Purchases for a description of when a redemption request
(order) is in proper form. Normally, payment will be made by check mailed within
one business day after receipt of a redemption request in proper form, although
we reserve the right to make such payment within three business days.
GENERAL. Within three days after acceptance of a redemption request, we make
payment in cash except that payment may be delayed until checks received for
shares purchased have cleared. In addition, we may suspend the right of
redemption or delay payment more than three days during any period when the New
York Stock Exchange is closed (other than customary weekend or holiday closings)
or an emergency exists as determined by the Securities and Exchange Commission
(SEC) so that disposal of our investments or determination of our net asset
value is not reasonably practicable, or for such other periods as the SEC, by
order, may permit for protection of our shareholders.
Under certain circumstances and subject to prior written notice, our
Board of Directors may authorize redemption of all of the shares in any account
in which there are fewer than 500 shares.
9 OUR MANAGEMENT
Our business is managed by our officers on a day-to-day basis under the overall
direction of our Board of Directors. We employ Lord Abbett as investment manager
pursuant to a Management Agreement. Lord Abbett has been an investment manager
for over 65 years and currently manages over $18 billion in a family of mutual
funds and other advisory accounts. Under the Management Agreement, Lord Abbett
provides us with investment management services and executive and other
personnel, pays the remuneration of our officers and our directors affiliated
with Lord Abbett, provides us
<PAGE>
with office space and pays for ordinary and necessary office and clerical
expenses relating to research, statistical work and supervision of our portfolio
and certain other costs. Lord Abbett provides similar services to fifteen other
Lord Abbett-sponsored funds having various investment objectives and also
advises other investment clients. David Seto, Executive Vice President, serves
as portfolio manager of the Fund and has done so since March 1992. Prior to
joining Lord Abbett, Mr. Seto was a portfolio manager for Lexington Management
Corporation.
Under the Management Agreement, we are obligated to pay Lord Abbett a
monthly fee, based on average daily net assets for each month. For the fiscal
year ended June 30, 1995, the fee paid to Lord Abbett as a percentage of average
daily net assets was at the annual rate of .50 of 1%. Our ratio of expenses,
including management fee expenses, to average net assets for this fiscal year
was .86%.
10 SHAREHOLDER SERVICES
We offer the following shareholder services:
Telephone Exchange Privilege: Shares may be exchanged, without a service
charge, for those of any other Lord Abbett-sponsored fund except for (i) LAEF,
LARF and LASF, (ii) certain tax-free single-state series where the exchanging
shareholder is a resident of a state in which such series is not offered for
sale and (iii) shares of the Fund acquired through exchange of shares of a fund
in the Lord Abbett Family of Funds may be exchanged only for shares of a fund in
that family, as noted above, and shares of the Fund acquired through exchange of
shares of a series in the Lord Abbett Counsel Group may be exchanged only for
shares of a series in that group (together, Eligible Funds). Shares purchased
directly from the Fund may be exchanged only for shares of a fund in the Lord
Abbett Family of Funds. You or your representative with proper identification
can instruct the Fund to exchange uncertificated shares (held by the transfer
agent) by telephone. Shareholders have this privilege unless they refuse it in
writing. The Fund will not be liable for following instructions communicated by
telephone that it reasonably believes to be genuine and will employ reasonable
procedures to confirm that instructions received are genuine, including
requesting proper identification and recording all telephone exchanges.
Exchanges for shares of any Eligible Fund will be based on the relative net
asset values of the shares exchanged, without a sales charge in most cases. A
sales charge will, however, be payable on exchanges for shares of any Eligible
Fund in the Lord Abbett Family of Funds in accordance with the prospectus of
that fund if the shares of the fund being exchanged were purchased directly from
the Fund (not including shares described under Div-Move below). Instructions
must be received by the Fund in Kansas City (800-521-5315) prior to the close of
the NYSE to obtain each funds net asset value per share on that day. Expedited
exchanges by telephone may be difficult to implement in times of drastic
economic or market change. The exchange privilege should not be used to take
advantage of short-term swings in the market. The Fund reserves the right to
terminate or limit the privilege of any shareholder who makes frequent
exchanges. The Fund can revoke the privilege for all shareholders upon 60 days
prior written notice. A prospectus for the other Lord Abbett-sponsored fund
selected by you should be obtained and read before an exchange. Exercise of the
Exchange Privilege will be treated as a sale for federal income tax purposes
and, depending on the circumstances, a capital gain or loss may be recognized.
SYSTEMATIC WITHDRAWAL PLAN: Except for retirement plans for which there is no
such minimum, if the offering price value of your uncertificated shares is at
least $10,000, you may have periodic cash withdrawals automatically paid to you
in either fixed or variable amounts.
DIV-MOVE: You can invest the dividends paid on your account ($50 minimum
investment) into an existing account in any other Eligible Fund. The account
must be either your account, a joint account for you and your spouse, a single
account for your spouse, or a custodial account for your minor child under the
age of 21. You should read the prospectus of the other fund before investing.
INVEST-A-MATIC: You can make fixed, periodic investments ($50 minimum
investment) into an existing account in any Eligible Fund by means of automatic
money transfers from your bank checking account. You should read the prospectus
of the other fund before investing.
RETIREMENT PLANS: Lord Abbett makes available the retirement plan forms and
custodial agreements for IRAs (Individual Retirement Accounts, including
Simplified Employee Pensions), 403(b) plans and pension and profit-sharing
plans, including 401(k) plans.
All correspondence should be directed to Lord Abbett U.S. Government
Securities Money Market Fund, Inc. (P.O. Box 419100, Kansas City, Missouri
64141; 800-821-5129).
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN
WHICH SUCH OFFER IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER IS
NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
NOT CONTAINED IN THIS PROSPECTUS OR IN SUPPLEMENTAL SALES MATERIAL AUTHORIZED BY
THE FUND AND NO PERSON IS ENTITLED TO RELY UPON ANY INFORMATION OR
REPRESENTATION NOT CONTAINED HEREIN OR THEREIN.
<PAGE>
UNDERWRITER AND INVESTMENT MANAGER
Lord, Abbett & Co.
The General Motors Building
767 Fifth Avenue
New York, New York 10153-0203
212-848-1800
CUSTODIAN, TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT
United Missouri Bank of Kansas City, N.A.
Tenth and Grand
Kansas City, Missouri 64141
SHAREHOLDER SERVICING AGENT
DST Systems, Inc.
P.O. Box 419576
Kansas City, Missouri 64141
800-821-5129
AUDITORS
Deloitte & Touche LLP
COUNSEL
Debevoise & Plimpton
<PAGE>
LORD ABBETT
STATEMENT OF ADDITIONAL INFORMATION NOVEMBER 1, 1995
LORD ABBETT
U.S. GOVERNMENT SECURITIES
MONEY MARKET FUND, INC.
- -----------------------------------------------------------------------------
This Statement of Additional Information is not a Prospectus. A Prospectus may
be obtained from Lord Abbett & Co. ("Lord Abbett") at The General Motors
Building, 767 Fifth Avenue, New York, New York 10153-0203. This Statement
relates to, and should be read in conjunction with, the Prospectus dated
November 1, 1995.
Lord Abbett U.S. Government Securities Money Market Fund, Inc. (sometimes
referred to as "we" or the "Fund") was incorporated under the name "Lord Abbett
Cash Reserve Fund, Inc." Our name was changed to its present name in December
1993.
TABLE OF CONTENTS PAGE
1. Investment Objective and Policies 2
2. Yield Calculation 3
3. Directors and Officers 4
4. Investment Advisory and Other Services 6
5. Portfolio Transactions 7
6. Net Asset Value and Dividends 7
7. Telephone Exchange Privilege and Rule 12b-1 Plan 8
8. Shareholder Programs and Retirement Plans 9
9. Commercial Paper and Bond Ratings 10
10. Taxes 12
11. Further Information About the Fund 12
12. Financial Statements 12
<PAGE>
1.
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective and policies are described in the Prospectus
under "Investment Objective" and "How We Invest". The Prospectus also briefly
describes the types of securities in which the Fund may invest. The following is
a more detailed description of certain of these securities.
Direct U.S. Government obligations are issued by the U.S. Treasury and include
bills, certificates of indebtedness, notes and bonds. U.S. agency obligations
are issued by agencies established under the authority of an act of Congress
including, but not limited to, the Bank for Cooperatives, Federal Home Loan
Banks and Federal Intermediate Credit Banks.
Certificates of deposit are certificates issued in consideration for funds
deposited in a bank or savings and loan association. They are for a definite
period of time, earn a specified rate of return and are negotiable. Banker's
acceptances are short-term credit instruments primarily used to finance the
import, export, transfer or storage of goods. They are termed "accepted" when a
bank guarantees their payment at maturity.
Variable amount master demand notes are demand obligations that permit the
investment of fluctuating amounts at varying market rates of interest pursuant
to arrangements between the issuer and a commercial bank acting as agent for the
payees of such notes; each party has the right to vary the amount of the
outstanding indebtedness of the notes.
A repurchase agreement is an instrument under which the purchaser (i.e., the
Fund) acquires the obligation (debt security) and the seller agrees, at the time
of the sale, to repurchase the obligation at a mutually agreed upon time and
repurchase price, thereby determining the yield during the purchaser's holding
period. This results in a fixed rate of return insulated from market fluctuation
during such period. The underlying securities will consist only of securities in
which we may otherwise invest and their value will be marked to market daily to
ensure that such value is at least equal to the repurchase price (including
accrued interest). Repurchase agreements usually are for short periods. In the
event of bankruptcy or other default by the seller, we would be subject to
possible risks such as delays and expenses in liquidating the underlying
securities, decline in value of the underlying securities and loss of interest.
To minimize any such risk, the creditworthiness of entities with whom we enter
into repurchase agreements is carefully evaluated by our investment manager,
Lord Abbett.
In addition to those policies described in the Prospectus, we are subject to the
following investment restrictions which cannot be changed without shareholder
approval. We may not: (1) buy common stocks or other voting securities; (2) sell
short or buy on margin (except for such short-term credits as are necessary for
the clearance of transactions); (3) write or buy put or call options; (4) borrow
money, except from banks (a) as a temporary measure for extraordinary or
emergency purposes and then only in amounts up to 5% of our assets taken at cost
or (b) in an amount up to 33 1/3% of our total assets in order to meet
redemption requests which might otherwise require untimely disposition of
portfolio securities (we will repay all borrowings before making additional
investments and interest paid on any such borrowings will reduce net income);
(5) engage in the underwriting of any security issued by other persons except to
the extent that in selling portfolio securities we may be deemed to be an
underwriter under federal securities laws; (6) acquire securities with
contractual or other restrictions on resale, except in connection with
repurchase agreements; (7) invest 25% or more of the value of our assets in
securities of issuers in any one industry, except we may invest more than 25% in
short-term securities issued by the U.S. Government or its agencies or
instrumentalities, finance companies, or banks or bank holding companies; (8)
buy or sell real estate, although we may buy short-term securities secured by
real estate or interests therein, or issued by companies which invest in real
estate or interests therein; (9) buy or sell commodities or commodity contracts,
interests in oil, gas or other mineral exploration or development programs; (10)
make loans, except for (a) time or demand deposits with banks, (b) purchasing
commercial paper or publicly-offered debt securities at original issue or
otherwise, (c) repurchase agreements (to the extent they may be considered
loans) with sellers of securities we have bought provided not more than 10% of
our assets, taken at cost, may be invested in repurchase agreements maturing in
more than seven days and (d) loans of our portfolio securities to registered
broker-dealers if 100% secured by cash or cash equivalents, made in full
compliance with applicable regulations and which, in
<PAGE>
management's opinion, do not expose us to significant risks; (11) buy securities
of an issuer if the purchase would then cause more than 5% of our assets, taken
at cost, to be invested in the securities of any one issuer, except the U.S.
Government, its agencies or instrumentalities; (12) buy securities of other
investment companies, except in connection with a merger, consolidation,
acquisition or reorganization; (13) pledge, mortgage or hypothecate our assets
except to secure borrowings as may be permissible under (4) above, and in an
aggregate amount not to exceed 10% of our net assets; (14) buy the securities of
a company, which (including predecessors) has a record of less than three years'
continuous operation if such purchase would then cause more than 5% of our
assets to be invested in the securities of such companies; and (15) buy or hold
the outstanding securities of any issuer if, to the knowledge of our management,
our officers and directors and the partners of Lord Abbett, each of whom owns
beneficially more than 1/2 of 1% of such securities, together own beneficially
more than 5% of such securities.
While restriction number 4 permits us to borrow money, we have not borrowed any
money to date.
2.
YIELD CALCULATION
We calculate our "yield" and "effective yield" based on the number of days in
the period for which the calculation is made ("base period"). Our "yield" is
computed by determining the net change for the base period (exclusive of capital
changes) in the value of a hypothetical preexisting account having a balance of
one share at the start of the base period and subtracting this value from the
value of the account at the end of the base period and dividing the result by
the account's beginning value to come up with a "base period return" which is
then multiplied by 365 over the number of days in the base period. "Effective
yield" is determined by compounding the "base period return" by adding one,
raising the sum to a power equal to 365 divided by the number of days in the
base period and subtracting one from the result. An example follows for the
seven-day period ended June 30, 1995 of the calculation of both "yield" and
"effective yield":
Value of hypothetical account with
exactly one share at beginning of
base period $1.000000000
- -------------------------------------------------------------------------------
Value of same account at end of base
period $ 1.000952000
Net change in account value $ .000952000
===============================================================================
Base period return (net change in
account value divided by the
beginning account value) .000952000%
- -------------------------------------------------------------------------------
"Yield" [base period return
times (365 divided by 7)] 4.96%
- ------------------------------------------------------------------------------
"Effective yield" [(base period
return + 1) 365/7] - 1 5.09%
On June 30, 1995, our portfolio had a dollar-weighted life to maturity of
29.5 days.
Publishing of the annualized yield for a given period provides investors with a
basis for comparing our yield with that of other investment vehicles. However,
yields of other investment vehicles may not always be comparable because of
different methods of calculating yield. In addition, the safety and yield of the
Fund and other money market funds are a function of portfolio quality, portfolio
maturity and operating expenses, while the yields on competing bank accounts are
established by the bank and their principal is generally insured.
<PAGE>
The Fund's yield is not fixed. It fluctuates and the annualization of a yield
rate is not a representation by the Fund as to what an investment in the Fund
will actually yield for any given period. Actual yields will depend not only on
changes in interest rates on money market instruments during the course of the
period in which the investment in the Fund is held, but also on such matters as
any realized and unrealized gains and losses, changes in the expenses of the
Fund during the period and on the relative amount of new money coming into the
Fund which has to be invested at a different yield than that represented by
existing assets.
3.
DIRECTORS AND OFFICERS
The following directors are partners of Lord Abbett, The General Motors
Building, 767 Fifth Avenue, New York, New York 10153-0203. They have been
associated with Lord Abbett for over five years and are also officers and/or
directors or trustees of the fifteen other Lord Abbett-sponsored funds (except
for Mr. Dow, who is not a director of Lord Abbett Research Fund, Inc.). They are
"interested persons" as defined in the Investment Company Act of 1940.
Ronald P. Lynch, age 59, Chairman and President
Robert S. Dow, age 50, President
The following outside directors are also directors or trustees of the fifteen
other Lord Abbett-sponsored funds referred to above except for Lord Abbett
Research Fund, Inc., of which only Messrs. Millican and Neff are directors.
E. Thayer Bigelow
Time Warner Cable
300 First Stamford Place
Stamford, Connecticut
President and Chief Executive Officer of Time Warner Cable Programming, Inc.
Formerly President and Chief Operating Officer of Home Box Office, Inc. Age 54.
Stewart S. Dixon
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois
Partner in the law firm of Wildman, Harrold, Allen & Dixon. Age 64.
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 69.
C. Alan MacDonald
The Marketing Partnership, Inc.
27 Signal Road
Stamford, Connecticut
General Partner, The Marketing Partnership, Inc., a full service marketing
consulting firm that specializes in strategic planning and customer-specific
marketing. Formerly Acquisition Consultant, The Noel Group, a private consulting
firm (1994). Formerly Chairman and Chief Executive Officer of Lincoln Foods,
Inc., manufacturer of branded snack foods (1992-1994). Formerly President and
Chief Executive Officer of Nestle Foods Corporation, a subsidiary of
Nestle S.A. (Switzerland). Age 62.
<PAGE>
Hansel B. Millican, Jr.
Rochester Button Company
1100 Noblin Avenue
South Boston, Virginia
President and Chief Executive Officer of Rochester Button Company. Age 67.
Thomas J. Neff
Spencer Stuart & Associates
277 Park Avenue
New York, New York
President of Spencer Stuart & Associates, an executive search consulting firm.
Age 58.
The second column of the following table sets forth the compensation accrued for
the Fund's outside directors. The third and fourth columns set forth information
with respect to the retirement plan for outside directors maintained by the Lord
Abbett-sponsored funds. The fifth column sets forth the total compensation
payable by such funds to the outside directors. No director of the Fund
associated with Lord Abbett and no officer of the Fund received any compensation
from the Fund for acting as a director or officer.
<TABLE>
<CAPTION>
For the Fiscal Year Ended June 30, 1995
- -----------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
Pension or Estimated Annual For Year Ended
Retirement Benefits Benefits Upon December 31, 1994
Accrued by the Retirement Proposed Total Compensation
Aggregate Fund and Fifteen to be Paid by the Accrued by the Fund and
Compensation Other Lord Fund and Fifteen Fifteen Other Lord
Accrued by Abbett-sponsored Other Lord Abbett- Abbett-sponsored
Name of Director the Fund (1) Funds sponsored Funds(2) Funds(3)
- ---------------- ------------ ------------------- ------------------- -----------------------
<S> <C> <C> <C> <C>
E. Thayer Bigelow(4) $413 $ 7,556 $33,600 $8,400
Thomas F. Creamer (5) $110 $27,578 $33,600 $29,650
Stewart S. Dixon $581 $22,595 $33,600 $43,600
John C. Jansing $591 $28,636 $33,600 $42,500
C. Alan MacDonald $597 $27,508 $33,600 $41,500
Hansel B.Millican, Jr. $588 $24,892 $33,600 $41,750
Thomas J.Neff $573 $16,294 $33,600 $41,200
<FN>
1. Outside directors' fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored funds based on net
assets of each fund. Fees payable by the Fund to its outside directors are being
deferred under a plan that deems the deferred amounts to be invested in shares
of the Fund for later distribution to the directors. The amounts of the
aggregate compensation payable by the Fund for the fiscal year ended June 30,
1995 deemed invested in Fund shares, including dividends reinvested and changes
in net asset value applicable to such deemed investments, were as follows as of
June 30, 1995: Mr. Bigelow, $419: Mr. Creamer, $14,914; Mr. Dixon, $20,151; Mr.
Jansing, $20,836; Mr. MacDonald, $8,699; Mr. Millican, $20,711 and Mr. Neff,
$20,929.
2. Each Lord Abbett-sponsored fund has a retirement plan providing that outside
directors will receive annual retirement benefits for life equal to 80% of their
final annual retainers following retirement at or after age 72 with at least 10
years of service. Each plan also provides for a reduced benefit upon early
retirement under certain circumstances, a pre-retirement death benefit and
actuarially reduced joint-and-survivor spousal benefits. The amounts stated,
except in the case of Mr. Creamer, would be payable annually under such
retirement plans if the director were to retire at age 72 and the annual
retainers payable by such funds were the same as they are today. The amounts
accrued in column 3 were accrued by the Lord Abbett-sponsored funds during the
fiscal year ended June 30 , 1995 with respect to the retirement benefits set
forth in column 4.
3. This column shows aggregate compensation, including director's fees and
attendance fees for board and committee meetings, of a nature referred to in
footnote one, accrued by the Lord Abbett-sponsored funds during the year ended
December 31, 1994.
<PAGE>
4. Mr. Bigelow was elected a director of the Fund on October 19, 1994.
5. Mr. Creamer retired as a director of the Fund effective September 21, 1994.
The stated amount of his retirement income (column 4) is the annual amount
payable to him by the Lord Abbett-sponsored funds before reduction for a
joint-and-survivor spousal benefit.
</FN>
</TABLE>
Except where indicated, the following executive officers of the Fund have been
associated with Lord Abbett for over five years. Of the following, Messrs.
Allen, Carper, Cutler, Dow, Henderson, Morris, Nordberg and Walsh are partners
of Lord Abbett; the others are employees: David Seto, age 35, Executive Vice
President; Kenneth B. Cutler, age 62, Vice President and Secretary; Stephen I.
Allen, age 41; Daniel E. Carper, age 43; Robert S. Dow, age 50; Thomas S.
Henderson, age 63; Robert G. Morris, age 51; E. Wayne Nordberg, age 57; John J.
Gargana, Jr., age 63; Paul A. Hilstad, age 53, (with Lord Abbett since 1995 -
formerly Senior Vice President and General Counsel of American Capital
Management & Research, Inc.); Thomas F. Konop, age 53; Victor W. Pizzolato, age
62; John J. Walsh, age 58, Vice Presidents; and Keith F. O'Connor, age 40,
Treasurer.
The Fund's By-Laws provide that the Fund shall not hold an annual meeting of its
stockholders in any year unless one or more matters are required to be acted on
by stockholders under the Act, as amended (the "Act"), or unless called by a
majority of the Board of Directors or by stockholders holding at least one
quarter of the stock of the Fund outstanding and entitled to vote at the
meeting. When any such annual meeting is held, the stockholders will elect
directors and vote on the approval of the independent auditors of the Fund.
As of September 30, 1995, our directors and officers, as a group, owned less
than 1% of our outstanding shares.
4.
INVESTMENT ADVISORY AND OTHER SERVICES
As described under "Our Management" in the Prospectus, Lord Abbett is the Fund's
investment manager. The nine general partners of Lord Abbett, all of whom are
officers and/or directors of the Fund, are: Stephen I. Allen, Daniel E. Carper,
Kenneth B. Cutler, Robert S. Dow, Thomas S. Henderson, Ronald P. Lynch, Robert
G. Morris, E. Wayne Nordberg and John J. Walsh. The address of each partner is
The General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203.
The services performed by Lord Abbett are described under "Our Management" in
the Prospectus. Under the Management Agreement we pay Lord Abbett a monthly fee,
based on average daily net assets for each month, at the annual rate of .5 of 1%
of the portion of our net assets not in excess of $250,000,000, .45 of 1% of
such assets in excess of $250,000,000 but not in excess of $500,000,000 and .4
of 1% of such assets over $500,000,000. For the fiscal years ended June 30,
1995, 1994 and 1993, the management fees paid to Lord Abbett amounted to
$775,871, $595,657 and $571,659, respectively. For the fiscal years ended June
30, 1994 and 1993, the management fees would have been $661,762 and, $694,541,
respectively, had Lord Abbett not waived a portion of its fee for those years.
Lord Abbett did not waive a portion of its fee for the fiscal year ended June
30, 1995.
We pay all expenses not expressly assumed by Lord Abbett, including, without
limitation, 12b-1 expenses, outside directors' fees and expenses, association
membership dues, legal and auditing fees, taxes, transfer and dividend
disbursing agent fees, shareholder servicing costs, fees and expenses of
registering our shares under federal and state securities laws, expenses of
preparing, printing and mailing prospectuses to existing shareholders, insurance
premiums, brokerage and other expenses connected with executing portfolio
security transactions expenses.
We have agreed with the State of California to limit operating expenses
(including management fees but excluding taxes, interest, extraordinary expenses
and brokerage commissions) to 2 1/2% of average annual net assets up to
$30,000,000, 2% of the next $70,000,000 of such assets and 1 1/2% of such assets
in excess of $100,000,000. The expense limitation is a condition on the
registration of investment company shares for sale in California and applies so
long as our shares are registered for sale in that State.
<PAGE>
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281, are
the independent auditors of the Fund and must be approved at least annually by
our Board of Directors to continue in such capacity. They perform audit services
for the Fund including the examination of financial statements included in our
annual report to shareholders.
United Missouri Bank of Kansas City, N.A., Tenth and Grand, Kansas City,
Missouri, is the Fund's custodian. The custodian pays for and collects proceeds
of securities bought and sold by the Fund and attends to the collection of
principal and income.
5.
PORTFOLIO TRANSACTIONS
We expect that purchases and sales of portfolio securities usually will be
principal transactions. Portfolio securities normally will be purchased directly
from the issuer or from an underwriter or market maker for the securities. We
usually will pay no brokerage commissions for such purchases and no brokerage
commissions have been paid over the last three fiscal years. Purchases from
underwriters of portfolio securities will include a commission or concession
paid by the issuer to the underwriter and purchases from dealers serving as
market makers will include a dealer's markup. Decisions as to the purchase and
sale of portfolio securities are made by Lord Abbett. Our traders, who are
officers of the Fund and also employees of Lord Abbett, implement these
decisions. They do the trading as well for other accounts- -investment companies
(of which they are also officers) and other clients--managed by Lord Abbett.
They are responsible for the negotiation of prices and commissions.
Our policy is to have purchases and sales of portfolio securities executed at
the most favorable prices, considering all costs of the transaction, including
brokerage commissions and dealer markups and markdowns, consistent with
obtaining best execution. This policy governs the selection of dealers. We make
no commitments regarding the allocation of brokerage business to or among
broker-dealers.
6.
NET ASSET VALUE AND DIVIDENDS
NET ASSET VALUE. The determination of our net asset value is described under
"Net Asset Value" in the Prospectus.
As disclosed in the Prospectus, we calculate our net asset value, declare
dividends and otherwise are open for business on each day that the New York
Stock Exchange (the "NYSE") is open for trading. The NYSE is closed on Saturdays
and Sundays and the following holidays: New Year's Day, President's Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
We attempt to maintain a net asset value of $1.00 per share for purposes of
sales and redemptions but there is no assurance that we shall be able to do so.
Although we have received an exemptive order from the Securities and Exchange
Commission which permits us to round our net asset value per share to the
nearest cent for such purpose, our Board of Directors has determined that it is
in the best interests of the Fund and its shareholders to value our portfolio
securities under the amortized cost method of securities valuation pursuant to
Rule 2a-7 under the Investment Company Act of 1940, as amended (the "Act") so
long as that method fairly reflects the Fund's market-based net asset value.
Rule 2a-7, as amended, contains certain maturity, diversification and quality
requirements that apply to any fund employing the amortized cost method in
reliance on the Rule and to any registered investment company which, like the
Fund, holds itself out as a money market fund. (See Prospectus - "How We Invest
- - Rule 2a-7".)
DIVIDENDS. As described in the Prospectus under "Dividends, Yield and Taxes,"
our net income will be declared as a dividend daily. Net income consists of (1)
all interest income and discount earned (including original issue discount and
market discount) less (2) a provision for all expenses, plus or minus (3) all
short-term realized gains and losses on portfolio assets.
<PAGE>
7.
TELEPHONE EXCHANGE PRIVILEGE AND
RULE 12B-1 PLAN
TELEPHONE EXCHANGE PRIVILEGE. Shares of the Fund may be exchanged for those of
any other Lord Abbett-sponsored fund except for (i) Lord Abbett Equity Fund
("LAEF"), Lord Abbett Series Fund ("LASF") and Lord Abbett Research Fund
("LARF") and (ii) certain single-state tax-free series and funds where the
exchanging shareholder is a resident of a state in which such series or fund is
not offered for sale. However, shares of the Fund acquired through exchange for
shares of a fund in the Lord Abbett Family of Funds (described below) may be
exchanged only for shares of a fund in that family. Shares of the Fund acquired
through exchange for shares of a series in the Lord Abbett Counsel Group
(described below) may be exchanged only for shares of a series in that group.
Shares purchased directly from the Fund may be exchanged only for shares of a
fund in the Lord Abbett Family of Funds.
You or your representative with proper identification can instruct the Fund to
exchange by telephone. All shareholders have this privilege unless they refuse
it in writing. Exchanges for shares of any eligible Lord Abbett-sponsored fund
will be based on the relative net asset values of the shares exchanged, without
a sales charge in most cases. A sales charge will, however, be payable on
exchanges for shares of any eligible fund in the Lord Abbett Family of Funds in
accordance with the prospectus of that fund if the Fund shares being exchanged
were purchased directly from the Fund (not including shares described under
"Div-Move" below). Instructions for the exchange must be received by the Fund in
Kansas City prior to the close of the NYSE to obtain the other fund's net asset
value per share calculated on that day. Securities dealers may charge for their
services in expediting exchange transactions. Before making an exchange you
should read the prospectus of the other fund which is available from your
securities dealer or Lord Abbett. An "exchange" is effected through the
redemption of Fund shares and the purchase of shares of such other Lord Abbett-
sponsored fund. Exercise of the exchange privilege will be treated as a sale for
federal income tax purposes, and, depending on the circumstances, a capital gain
or loss may be recognized. This privilege may be modified or terminated at any
time.
You should not view the exchange privilege as a means for taking advantage of
short-term swings in the market and the Fund reserves the right to terminate or
limit the privilege of any shareholder who makes frequent exchanges.
THE LORD ABBETT FAMILY OF FUNDS. The funds (or series within a fund) in the Lord
Abbett Family of Funds, together with the Fund, make up the Family for purposes
of the Family's exchange privilege.
LORD ABBETT COUNSEL GROUP. The various series of Lord Abbett Securities Trust,
together with the Fund, makes up the Lord Abbett Counsel Group for purposes of
the Group's exchange privilege.
RULE 12B-1 PLAN. The Fund is not making payments of Rule 12b-1 service fees. As
described in the Fund's current Prospectus, the Fund has adopted a Distribution
Plan and Agreement (the "Plan") pursuant to Rule 12b-1 under the Act. In
adopting the Plan and in approving its continuance, the Board of Directors has
concluded that based on information requested by the Board and provided by Lord
Abbett, there is a reasonable likelihood that the Plan will benefit the Fund and
its shareholders. The expected benefits include greater sales, lower redemptions
of Fund shares and a higher quality of service to shareholders by dealers than
otherwise would be the case. Lord Abbett is to use all amounts received under
the Plan for payments to dealers for (i) providing continuous services to the
Fund's shareholders, such as answering shareholder inquiries, maintaining
records, and assisting shareholders in making redemptions, transfers, additional
purchases and exchanges and (ii) their assistance in distributing shares of the
Fund. Further, the Plan permits Lord Abbett to use such fees to finance any
activity which is primarily intended to result in the sale of shares of the
Fund, provided that (i) the Board of Directors, including a majority of the
disinterested directors, shall have approved the timing, categories and
calculation of such payments and (ii) Lord Abbett shall neither retain any
portion of such payments nor use such payments for its obligations under its
Distribution Agreement with the Fund.
<PAGE>
The Plan requires the Board of Directors to review, on a quarterly basis,
written reports of all amounts expended pursuant to the Plan and the purposes
for which such expenditures were made. The Plan shall continue in effect only if
its continuance is specifically approved at least annually by vote of the Board
of Directors and of the Fund's directors who are not interested persons of the
Fund and who have no direct or indirect financial interest in the operation of
the Plan or in any agreements related to the Plan ("outside directors"), cast in
person at a meeting called for the purpose of voting on such Plan. The Plan may
not be amended to increase materially the amount spent for distribution expenses
without approval by a majority of the Fund's directors, including a majority of
the outside directors. The Plan may be terminated at any time by vote of a
majority of the Fund's outside directors or by vote of the holders of a majority
of the Fund's outstanding voting securities.
As stated in the Prospectus, a 1% contingent deferred reimbursement charge
("CDRC") is imposed with respect to those shares of the Fund bought in exchange
for shares of another Lord Abbett-sponsored fund or series on which the other
fund has paid the one-time 1% 12b-1 sales distribution fee if such shares are
redeemed out of the Fund within a period of 24 months from the end of the month
in which the original sale occurred in the case of shares bought in exchange for
shares of a fund in the Lord Abbett Family of Funds or within a period of 12
months from the end of the month in which the original sale occurred in the case
of shares bought in exchange for shares of a Series in the Lord Abbett Counsel
Group. The Fund does not pay such a 1% 12b-1 fee with respect to shares
purchased from it in a non-exchange transaction.
In no event will the amount of the CDRC exceed 1% of the lesser of (i) the net
asset value of the shares redeemed or (ii) the original cost of the shares for
which such shares were exchanged ("Exchanged Shares"). No CDRC will be imposed
when the investor redeems (i) amounts derived from increases in the value of the
account above the total cost of shares being redeemed due to increases in net
asset value, (ii) shares with respect to which no Lord Abbett fund paid a 1%
sales distribution fee on issuance (including shares acquired through
reinvestment of dividend income and capital gains distributions) or (iii) shares
which, together with Exchanged Shares, have been held continuously for 24 months
from the end of the month in which the original sale occurred. In determining
whether a CDRC is payable, (a) shares not subject to the CDRC will be redeemed
before shares subject to the CDRC and (b) of shares subject to a CDRC, those
held the longest will be the first to be redeemed.
8.
SHAREHOLDER PROGRAMS AND RETIREMENT PLANS
We have several programs available. These include automatic subsequent
investments of $50 or more from your checking account, a systematic withdrawal
plan, cash payments of monthly dividends to a designated third party and
expedited exchanges among the Lord Abbett-sponsored funds. Forms are available
from the Fund or Lord Abbett.
Under the Div-Move service described in the Prospectus, you can invest the
dividends paid on your account into an existing account in any other Eligible
Fund. The account must be either your account, a joint account for you and your
spouse, a single account for your spouse, or a custodial account for your minor
child under the age of 21. You should read the prospectus of the other fund
before investing.
The Invest-A-Matic method of investing in the Fund and/or any other Eligible
Fund is described in the Prospectus. To avail yourself of this method you must
complete the application form, selecting the time and amount of your bank
checking account withdrawals and the funds for investment, include a voided,
unsigned check and complete the bank authorization.
The Systematic Withdrawal Plan (the "SWP") also is described in the Prospectus.
You may establish a SWP if you own or purchase uncertificated shares having a
current offering price value of at least $10,000. Lord Abbett prototype
retirement plans have no such minimum. The SWP involves the planned redemption
of shares on a periodic basis by receiving either fixed or variable amounts at
periodic intervals. Since the value of shares redeemed may be more or less than
their cost, gain or loss may be recognized for income tax purposes on each
periodic payment. Normally, you may not make regular investments at the same
time you are receiving systematic withdrawal payments because it is not in your
interest to pay a sales charge on new investments when in effect a portion of
that new investment is soon
<PAGE>
withdrawn. The minimum investment accepted while a withdrawal plan is in effect
is $1,000. The SWP may be terminated by you or by us at any time by written
notice.
The Prospectus indicates the types of retirement plans for which Lord Abbett
provides forms and explanations. Lord Abbett makes available the retirement plan
forms and custodial agreements for IRAs (Individual Retirement Accounts
including Simplified Employee Pensions), 403(b) plans and qualified pension and
profit-sharing plans, including 401(k) plans. The forms name Investors Fiduciary
Trust Company as custodian and contain specific information about the plans.
Explanations of the eligibility requirements, annual custodial fees and
allowable tax advantages and penalties are set forth in the relevant plan
documents. Adoption of any of these plans should be on the advice of your legal
counsel or qualified tax adviser.
Our Board of Directors may authorize redemption of all of the shares in any
account in which there are fewer than 500 shares. Before authorizing such
redemption, the Board must determine that it is in our economic best interest or
necessary to reduce disproportionately burdensome expenses in servicing
shareholder accounts. At least 60 days' prior written notice will be given
before any such redemption, during which time shareholders may avoid redemption
by bringing their accounts up to the minimum set by the Board.
9.
COMMERCIAL PAPER AND BOND RATINGS
COMMERCIAL PAPER RATINGS
The rating A-1+ is the highest commercial paper rating assigned by Standard &
Poor's Corporation ("S&P"). Paper rated A-1 has the following characteristics:
Liquidity ratio is adequate to meet cash requirements; long-term senior debt is
rated A or better; the issuer has access to diverse channels of borrowing; core
earnings and cash flow have an upward trend with allowance made for unusual
circumstances; typically, the issuer's industry is well established and the
issuer has a strong position within the industry; the reliability and quality of
management are sound. Those issues determined to possess overwhelming safety
characteristics will be denoted with a plus (+) sign designation.
The rating P-1 is the highest commercial paper rating assigned by Moody's
Investors Service, Inc. ("Moody's"). Among the factors considered by Moody's in
assigning ratings are the following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of parent company
and the relationships which exist with the issuer; and (8) recognition by the
management of obligations which may be present or may arise as a result of
public interest questions and preparations to meet such obligations.
<PAGE>
BOND RATINGS
Moody's Investors Service, Inc.'s Corporate Bond Ratings
Aaa - Bonds which are rated Aaa are judged to be of the best quality and carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin, and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
Aa - Bonds which are rated Aa are judged to be of high-quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium- grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa - Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.
Ba - Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance and
other terms of the contract over any long period of time may be small.
Caa - Bonds that are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca - Bonds that are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C - Bonds that are rated C are the lowest-rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Standard & Poor's Corporation's Corporate Bond Ratings
AAA - This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA - Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong and in the majority of instances they
differ from AAA issues only in small degree.
A - Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
<PAGE>
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
BB-B-CCC-CC-C - Debt rated BB, B, CCC, CC and C is regarded as having
predominately speculative characteristics with respect to capacity to pay
interest and repay principal. 'BB' indicates the least degree of
speculation and 'CCC' the highest. While such debt will likely have
some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
D - Debt rated 'D' is in payment default. The 'D' rating
category is used when interest payments or principal payments are not made on
the date due even if the applicable grace period has not expired, unless S&P
believes such payments will be made during such grace period. The 'D'
rating also will be used upon the filing of a bankruptcy petition if debt
service payments are jeopardized.
10.
TAXES
The Fund will be subject to a 4% nondeductible excise tax on certain amounts not
distributed (and not treated as having been distributed) on a timely basis in
accordance with a calendar year distribution requirement. The Fund intends to
distribute to shareholders each year an amount adequate to avoid the imposition
of such excise tax.
Dividends paid by the Fund will not qualify for the dividends-received deduction
for corporations.
11.
FURTHER INFORMATION ABOUT THE FUND
The directors, trustees and officers of Lord Abbett-sponsored mutual funds,
together with the partners and employees of Lord Abbett, are permitted to
purchase and sell securities for their personal investment accounts. In engaging
in personal securities transactions, however, such persons are subject to
requirements and restrictions contained in the Fund's Code of Ethics which
complies, in substance, with each of the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing. Among other things,
the Code requires that Lord Abbett partners and employees obtain advance
approval before buying or selling securities, submit confirmations and quarterly
transaction reports, and obtain approval before becoming a director of any
company; and it prohibits such persons from investing in a security 7 days
before or after any Lord Abbett-sponsored fund or Lord Abbett-managed account
considers a trade or trades in such security, from profiting on trades of the
same security within 60 days and from trading on material and non-public
information. The Code imposes certain similar requirements and restrictions on
the independent directors and trustees of each Lord Abbett-sponsored mutual fund
to the extent contemplated by the recommendations of the Advisory Group.
12.
FINANCIAL STATEMENTS
The financial statements for the fiscal year ended June 30, 1995 and the report
of Deloitte & Touche LLP, independent auditors, on such financial statements
contained in the 1995 Annual Report to Shareholders of Lord Abbett U.S.
Government Securities Money Market Fund, Inc. are incorporated herein by
reference to such financial statements and report in reliance upon the authority
of Deloitte & Touche LLP as experts in auditing and accounting.
<PAGE>
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements
Part A - Financial Highlights for the 10 years ended
June 30, 1995.
Part B -Statement of Net Assets at June 30, 1995. Statement of
Operations for the year ended June 30, 1995. Statements of
Changes in Net Assets for the years ended June 30, 1995 and 1994.
(b) Exhibits
(11) Consent of Deloitte & Touche LLP*
(16) Yield calculation.*
* Filed herewith
Item 25. Persons Controlled by or Under Common Control with Registrant
None.
Item 26. Number of Record Holders of Securities
At September 30, 1995-10,066
Item 27. Indemnification
Registrant is incorporated under the laws of the State of
Maryland and is subject to Section 2-418 of the Corporations and
Associations Article of the Annotated Code of the State of
Maryland controlling the indemnification of directors and
officers. Since Registrant has its executive offices in the State
of New York, and is qualified as a foreign corporation doing
business in such State, the persons covered by the foregoing
statute may also be entitled to and subject to the limitations of
the indemnification provisions of Section 721-726 of the New York
Business Corporation Law.
The general effect of these statutes is to protect officers,
directors and employees of Registrant against legal liability and
expenses incurred by reason of their positions with the
Registrant. The statutes provide for indemnification for
liability for proceedings not brought on behalf of the
corporation and for those brought on behalf of the corporation,
and in each
1
<PAGE>
case place conditions under which indemnification will be
permitted, including requirements that the officer, director or
employee acted in good faith. Under certain conditions, payment
of expenses in advance of final disposition may be permitted. The
By-Laws of Registrant, without limiting the authority of
Registrant to indemnify any of its officers, employees or agents
to the extent consistent with applicable law, make the
indemnification of its directors mandatory subject only to the
conditions and limitations imposed by the above-mentioned Section
2-418 of Maryland Law and by the provisions of Section 17(h) of
the Investment Company Act of 1940 as interpreted and required to
be implemented by SEC Release No. IC-11330 of September 4, 1980.
In referring in its By-Laws to, and making indemnification of
directors subject to the conditions and limitations of, both
Section 2-418 of the Maryland Law and Section 17(h) of the
Investment Company Act of 1940, Registrant intends that
conditions and limitations on the extent of the indemnification
of directors imposed by the provisions of either Section 2- 418
or Section 17(h) shall apply and that any inconsistency between
the two will be resolved by applying the provisions of said
Section 17(h) if the condition or limitation imposed by Section
17(h) is the more stringent. In referring in its By-Laws to SEC
Release No. IC- 11330 as the source for interpretation and
implementation of said Section 17(h), Registrant understands that
it would be required under its By-Laws to use reasonable and fair
means in determining whether indemnification of a director should
be made and undertakes to use either (1) a final decision on the
merits by a court or other body before whom the proceeding was
brought that the person to be indemnified ("indemnitee") was not
liable to Registrant or to its security holders by reason of
willful malfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office
("disabling conduct") or (2) in the absence of such a decision, a
reasonable determination, based upon a review of the facts, that
the indemnitee was not liable by reason of such disabling
conduct, by (a) the vote of a majority of a quorum of directors
who are neither "interested persons" (as defined in the 1940 Act)
of Registrant nor parties to the proceeding, or (b) an
independent legal counsel in a written opinion. Also, Registrant
will make advances of attorneys' fees or other expenses incurred
by a director in his defense only if (in addition to his
undertaking to repay the advance if he is not ultimately entitled
to indemnification) (1) the indemnitee provides a security for
his undertaking, (2) Registrant shall be insured against losses
arising by reason of any lawful advances, or (3) a majority of a
quorum of the non-interested, non-party directors of Registrant,
or an independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts, that
there is reason to believe that the indemnitee ultimately will be
found entitled to indemnification.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expense incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
In addition, Registrant maintains a directors' and officers'
errors and omissions liability insurance policy protecting
directors and officers against liability for breach of duty,
negligent act, error or omission committed in their capacity as
directors or officers. The policy contains certain exclusions,
among which is exclusion from coverage for active or
2
<PAGE>
deliberate dishonest or fraudulent acts and exclusion for fines
or penalties imposed by law or other matters deemed uninsurable.
Item 28 Business and Other Connections of Investment Adviser
Lord, Abbett & Co. acts as investment adviser for seventeen other
open-end investment companies (of which it is principal
underwriter for fifteen), and as investment adviser to
approximately 5,100 private accounts. Other than acting as
directors and/or officers of open-end investment companies
managed by Lord, Abbett & Co., none of Lord, Abbett & Co.'s
partners has, in the past two fiscal years, engaged in any other
business, profession, vocation or employment of a substantial
nature for his own account or in the capacity of director,
officer, employee, partner or trustee of any entity except as
follows:
John J. Walsh
Trustee
The Brooklyn Hospital Center
100 Parkside Avenue
Brooklyn, N.Y.
Item 29 Principal Underwriter
(a) Affiliated Fund, Inc.
Lord Abbett U.S. Government Securities Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Value Appreciation Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Global Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett California Tax-Free Income Fund, Inc.
Lord Abbett U.S. Government Securities Money Market
Fund, Inc.
Lord Abbett Series Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Tax-Free Income Trust
Lord Abbett Securities Trust
Lord Abbett Investment Trust
Investment Advisor
------------------
Lord Abbett Research Fund, Inc. (Mid-Cap Series and Series I)
American Skandia Trust (Lord Abbett Growth and Income Portfolio)
(b) The partners of Lord, Abbett & Co. are:
Name and Principal Positions and Offices
Business Address with Registrant
------------------ ----------------------
Ronald P. Lynch Chairman and Director
Stephen I. Allen Vice President
Daniel E. Carper Vice President
Kenneth B. Cutler Vice President & Secretary
Robert S. Dow President & Director
Thomas S. Hnderson Vice President and Director
Robert G. Morris Vice President
E. Wayne Nordberg Vice President
John J. Walsh Vice President
3
<PAGE>
(1) Each of the above has as a principal business address: 767
Fifth Avenue, New York, New York
(c) Not Applicable
Item 30. Location of Accounts and Records
Registrant maintains the records, required by Rules 31a - 1(a)
and (b), and 31a - 2(a) at its main office.
Lord, Abbett & Co. maintains the records required by Rules 31a -
1(f) and 31a - 2(e) at its main office.
Certain records such as cancelled stock certificates and
correspondence may be physically maintained at the main office of
the Registrant's Transfer Agent, Custodian, or Shareholder
Servicing Agent within the requirements of Rule 31a-3.
Item 31. Management Services
None
Item 32. Undertakings
None
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant certifies that it meets all the requirements
for effectiveness of this Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Registration Statement
and/or any amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on the
31st day of October, 1995
LORD ABBETT U.S. GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
By /s/ Ronald P. Lynch
Ronald P. Lynch,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Chairman of the Board
/s/ Ronald P. Lynch and Director
Ronald P. Lynch (Title) 10/31/95
/s/ Robert S. Dow President and Director
Robert S. Dow (Title) 10/31/95
Vice President and
/s/ John J. Gargana, Jr. Chief Financial Officer
John J. Gargana, Jr. (Title) 10/31/95
/s/ E. Thayer Bigelow Director
E. Thayer Bigelow (Title) 10/31/95
/s/ Stewart S. Dixon Director
Stewart S. Dixon (Title) 10/31/95
/s/ John C. Jansing Director
John C. Jansing (Title) 10/31/95
/s/ C. Alan MacDonald Director
C. Alan MacDonald (Title) 10/31/95
/s/ Hansel B. Millican, Jr. Director
Hansel B. Millican, Jr. (Title) 10/31/95
/s/ Thomas J. Neff Director
Thomas J. Neff (Title) 10/31/95
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- ------- -----------
11 Consent of Deloitte & Touche LLP
16 Yield calculation.
CONSENT OF INDEPENDENT AUDITORS
Lord Abbett U.S. Government Securities Money Market Fund, Inc.:
We consent to the incorporation by reference in Post-Effective Amendment No. 19
to Registration Statement No. 2-64536 of our report dated August 3, 1995
appearing in the annual report to shareholders and to the reference to us under
the captions "Financial Highlights" in the Prospectus and "Investment Advisory
and Other Services" and "Financial Statements" in the Statement of Additional
Information, both of which are part of such Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
October 30, 1995
EXHIBIT 99.B16
YIELD CALCULATION
The calculate our "yield" and "effective yield" based on the number of days in
the period for which the calculation is made ("base period"). Our "yield" is
computed by determining the net change for the base period (exclusive of capital
changes) in the value of a hypothetical preexisting account having a balance of
one share at the start of the base period and subtracting this value from the
value of the account at the end of the base period and dividing the result by
the account's beginning value to come up with a "base period return" which is
then multiplied by 365 over the number of days in the base period. "Effective
yield" is determined by compounding the "base period return" by adding one,
raising the sum to a power equal to 365 divided by the number of days in the
base period and subtracting one from the result. An example follows for the
seven-day period ended June 30, 1995 of the calculation of both "yield" and
"effective yield":
Value of hypothetical account with
exactly one share at beginning of
base period $1.000000000
- -------------------------------------------------------------------------------
Value of same account at end of base
period $ 1.000952000
Net change in account value $ .000952000
===============================================================================
Base period return (net change in
account value divided by the
beginning account value) .000952000%
- -------------------------------------------------------------------------------
"Yield" [base period return
times (365 divided by 7)] 4.96%
- ------------------------------------------------------------------------------
"Effective yield" [(base period
return + 1) 365/7] - 1 5.09%
On June 30, 1995, our portfolio had a dollar-weighted life to maturity of
29.5 days.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000311635
<NAME> US GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
<S> <C>
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