1933 Act File No. 2-64536
1940 Act File No. 811-2924
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 20 [X]
And
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]
OF 1940
[X] Amendment No. 18
LORD ABBETT U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
Exact Name of Registrant as Specified in Charter
767 FIFTH AVENUE, NEW YORK, N. Y. 10153-0203
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 July 15, 1996 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) (2) 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 25, 1995.
<PAGE>
LORD ABBETT U.S. GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
FORM N-1A
Cross Reference Sheet
Post-Effective Amendment No. 20
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) Investment Objective; How We Invest
4 (b) (c) How We Invest
5 (a) (b) (c) Our Management; Back Cover Page
5 (d) N/A
5 (e) Back Cover Page
5 (f) Our Management
5 (g) N/A
5 A Performance
6 (a) Cover Page
6 (b) (c) (d) N/A
6 (e) Cover Page
6 (f) (g) Dividends, Capital Gains
Distributions and Taxes
7 (a) Back Cover Page
7 (b) (c) (d)
(e) (f) Purchases
8 Redemptions and Repurchases
9 N/A
10 Cover Page
11 Cover Page - Table of Contents
12 N/A
13 Investment Objective and Policies
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) Purchases, Redemptions
and Shareholder Services
16 (h) Investment Advisory and Other Services
2
<PAGE>
Form N-1A Location In Prospectus or
Item No. Statement of Additional Information
16 (i) N/A
17 (a) Portfolio Transactions
17 (b) N/A
17 (c) Portfolio Transactions
17 (d) Portfolio Transactions
17 (e) N/A
18 (a) Cover Page
18 (b) N/A
19 (a) (b) Purchases, Redemptions
and Shareholder Services
19 (c) N/A
20 Taxes
21 (a) Purchases, Redemptions
and Shareholder Services
21 (b) (c) N/A
22 (a) N/A
22 (b) Past Performance
23 Financial Statements
3
<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 MUTUAL FUND WITH THREE CLASSES OF SHARES. THESE CLASSES,
CALLED CLASS A, B AND C SHARES, PROVIDE INVESTORS WITH A CHOICE ON HOW TO
PURCHASE THE FUND. SEE "PURCHASES" FOR A DESCRIPTION OF THESE CHOICES. THE CLASS
B AND C SHARES WILL BE OFFERED TO THE PUBLIC FOR THE FIRST TIME ON OR ABOUT
AUGUST 1, 1996. THE CLASS B AND CLASS C SHARES MAY BE ACQUIRED ONLY BY AN
EXCHANGE FOR SHARES OF THE SAME CLASS OF ANOTHER LORD ABBETT-SPONSORED FUND. SEE
"PURCHASES".
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.
1 Investment Objective 2
2 Fee Table 2
3 Financial Highlights 3
4 How We Invest 3
5 Net Asset Value 4
6 Purchases 4
7 Dividends, Yield and Taxes 8
8 Redemptions 9
9 Our Management 10
10 Shareholder Services 10
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.
<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 Fund's 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>
Class A Class B Class C
Shares Shares Shares
<S> <C> <C> <C>
Shareholder Transaction Expenses
(as a percentage of offering price)
Maximum Sales Load(1) on Purchases
(See Purchases) None(2)(3) None None
Deferred Sales Load(1) (See Purchases) None(2) 5% if shares are redeemed 1% if shares
before 1st anniversary are redeemed
of purchase, declining before 1st anniversary
to 1% before 6th of purchase(2)(3)
anniversary and
eliminated on and
after 6th anniversary(2)(3)
Annual Fund Operating Expenses(4)
(as a percentage of average net assets)
Management Fees (See "Our Management") 0.50% 0.50% 0.50%
12b-1 Fees (See "Purchases") None(2) 0.75%(2)(3) None(2)
Other Expenses (See "Our Management") 0.36% 0.36% 0.36%
Total Operating Expenses 0.86% 1.61% 0.86%
<FN>
Example:
Assume an annual return is 5% and no change in the level of expenses described
above. For a $1,000 investment, 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
Class A shares(4) $9 $27 $48 $106
Class B shares(4) $56 $81 $98 $171(5)
Class C shares(4) $9 $27 $48 $106
(1) Sales "load" is referred to as sales "charge", "deferred sales load" is
referred to as "contingent deferred sales charge" (or "CDSC") and "12b-1 fees"
which consist of a "service fee" and a "distribution fee" are referred to by
either or both of these terms where appropriate with respect to Class A, Class B
and Class C shares throughout this Prospectus. (2)The Fund has no Class A and
Class C CDSC of its own but it does have its own Class B CDSC. The Fund will
collect Class A and Class C CDSCs on behalf of the other Lord Abbett funds and
the Class B CDSC on behalf of Lord Abbett Distributor LLC. See "Collection of
CDSCs by the Fund" and "Acquiring Class B Shares", both under "Purchases". Other
Lord Abbett-sponsored funds have instituted Class A and Class C Rule 12b-1 plans
that provide for a CDSC on such shares subject to a Rule 12b-1 fee of up to 1%
paid under such a plan where those shares (or any shares of another fund
received in exchange for those shares) are redeemed within 24 months after the
month of purchase (in the case of Class A shares) and within 12 months of
purchase (in the case of Class C shares). The Fund pays no Rule 12b-1 fees with
respect to Class A or Class C shares. With respect to Class B shares, an
"anniversary" is in the 365th day subsequent to the original purchase, or a
prior anniversary of such purchase, of "B Exchanged Shares", i.e. shares of the
same class of another Lord Abbett-sponsored fund used in an exchange for the
Fund's Class B shares. (3)Although the Fund does not, with respect to the Class
B shares, charge a front-end sales charge, investors should be aware that
long-term shareholders may pay, under the Rule 12b-1 plan applicable to the
Class B shares of the Fund (which pays annual 0.75% distribution fees), more
than the economic equivalent of the maximum front-end sales charge as permitted
by certain rules of the National Association of Securities Dealers, Inc. (4)The
annual operating expenses shown in the summary are the actual expenses for the
Fund for the fiscal year ended June 30, 1995 except for the substitution of
estimated 12b-1 fees for Class B shares. (5)Based on conversion of Class B
shares to Class A shares on the eighth anniversary of the purchase of Class B
shares and closing your account by redeeming Class A shares after ten years. The
foregoing is provided to give investors a better understanding of the expenses
that are incurred by an investment in the Fund.
</FN>
</TABLE>
<PAGE>
3 FINANCIAL HIGHLIGHTS
The following table has been audited by Deloitte & Touche LLP, independent
public accountants, in connection with their annual audit of the Fund's Class A
share 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 Class A 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%
</TABLE>
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 Fund's total assets, the Fund may invest in high-quality, short-term
liquid securities, including certificates of deposit of domestic banks,
corporate commercial paper, banker's acceptances, repurchase agreements,
corporate bonds and notes and other debt instruments.
<PAGE>
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 banker's 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 & Poor's Corporation ("S&P") or P-1 by
Moody's Investors Service, Inc. ("Moody's") or, if not rated, is issued by
companies having outstanding debt rated AAA or AA by S&P or Aaa or Aa by
Moody's. 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 Moody's.
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).
Concentration. We will not invest more than 25% of our assets, taken at market
value, in the securities of issuers in any one industry, except that there is no
percentage limitation on our investments in obligations issued or backed by the
U.S. Government, its agencies or instrumentalities as described above.
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 Rule's maturity requirements limit the Fund's 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.
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
ALTERNATIVE SALES ARRANGEMENTS
Classes of Shares. The Fund offers investors three different classes of shares.
The different classes of shares represent investments in the same portfolio of
securities but are subject to different expenses and will likely have different
dividends and yields. Investors should read this section carefully to determine
which class represents the best investment option for their particular
situation.
Class A Shares. If you buy Class A shares, you pay no sales charge. If you
acquire Class A shares in exchange for shares of the same class of another Lord
Abbett-sponsored fund subject to a contingent deferred sales charge ("CDSC") and
you redeem any of the Class A shares within 24 months after the month in which
you initially purchased shares of such fund, the Fund will collect for such fund
a CDSC of 1% which is remitted to such fund to reimburse it. The CDSC and an
inactive Rule 12b-1 Plan for Class A shares are described in "Acquiring Class A
Shares" and "Collection of CDSCs by the Fund" below.
Class B Shares. Class B shares may only be acquired in exchange for shares of
the same class of another Lord Abbett-sponsored fund. See "Shareholder Services
- -- Telephone Exchanges" below. If you redeem your shares before the sixth
anniversary of the initial purchase of shares of such fund, you will normally
pay a CDSC to Lord Abbett Distributor LLC (hereinafter referred to as "Lord
Abbett Distributor"). That CDSC varies depending on how long you own shares.
Class B shares are subject to distribution fees at an annual rate of 0.75 of 1%
of the annual net asset value of the Class B shares. The CDSC and the Rule 12b-1
Plan applicable to the Class B shares are described in "Acquiring Class B
Shares" and "Class B Rule 12b-1 Plan" below.
Class C Shares. Class C shares may only be acquired in exchange for shares of
the same class of another Lord Abbett-sponsored fund. See "Shareholder Services
- -- Telephone Exchanges" below. If you redeem your shares before the first
anniversary of the initial purchase of shares of such fund, you will normally
pay the Fund a CDSC of 1% which is remitted to such fund to reimburse it. The
CDSC and an inactive Rule 12b-1 Plan for Class C shares are described in
"Acquiring Class C Shares" and "Collection of CDSCs by the Fund" below.
<PAGE>
GENERAL
How Much Must You Invest. The minimum initial investment for Class A, B and C
shares is $1,000 for regular accounts; $250 for IRAs, 403(b) plans and
"Retirement Plans" (i.e. employer-sponsored retirement plans under the Internal
Revenue Code). 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 except for the Class B shares which have an asset-based sales
charge of .75 of 1%. See "Class B 12b-1 Plan" below. Our shares (Class A, B and
C) 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. Class B and C shares may be purchased only by exchange for shares of the
same class of another Lord Abbett-sponsored fund, as discussed below. Proper
purchase order form includes federal funds received by our custodian bank.
How Do You Open An Account? 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 bank's 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 Distributor 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 Distributor, 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 Distributor or the Fund to carry out the order.
Payments must be converted to federal funds by being credited to our custodian
bank's 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 for Class A shares and no stock
certificates are issued for fractional shares or Class B and C shares.
<PAGE>
Acquiring Class A Shares. Class A shares are sold directly to investors at net
asset value per share without a sales charge and also may be acquired in
exchange for shares of the same class of any other Lord Abbett-sponsored fund
(an "initial fund"). Class A shares normally will be subject to a 1.0% CDSC when
redeemed for cash on or before the end of the twenty-fourth month after the
month in which they were first purchased if the initial fund paid a distribution
fee on such shares under its Class A 12b-1 plan. The CDSC will be assessed on
the lesser of the net asset value of the shares at the time of redemption or the
original purchase price. The CDSC is not imposed on the amount of your account
value represented by the increase in net asset value over the initial purchase
price (including increases due to the reinvestment of dividends). The Class A
CDSC is paid to the Fund for remittance to the initial fund to reimburse it, in
whole or in part, for the service and distribution fee payments made by that
initial fund at the time such shares were first sold.
Class A Rule 12b-1 Plan. The service fees described below are not being paid by
the Fund and have not been paid since the effective date of the Class A share
Rule 12b-1 Plan (the "A Plan") on July 12, 1996 and, in connection with the
Fund's prior plan, since July 1, 1992.
The A Plan authorizes the Fund to pay service fees through Lord Abbett
Distributor to authorized institutions (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 Class A shareholder accounts and otherwise to encourage their Class A
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 Fund's
shares sold by authorized institutions.
Acquiring Class B Shares. Class B shares are acquired at net asset value per
share without an initial sales charge only in exchange for "B Exchanged Shares",
i.e. shares of the same class of another Lord Abbett-sponsored fund used in such
exchange. See "Shareholder Services -- Telephone Exchanges" below. However, if
Class B shares are redeemed for cash before the sixth anniversary of the initial
purchase of B Exchanged Shares, a CDSC normally will be deducted from the
redemption proceeds. The charge will be assessed on the lesser of the net asset
value of the shares at the time of redemption or the original purchase price.
The CDSC is not imposed on the amount of your account value represented by the
increase in net asset value over the initial purchase price (including increases
due to the reinvestment of dividends). The Class B CDSC is paid to Lord Abbett
Distributor to reimburse part of its expenses associated with providing
distribution-related services to the Fund in connection with the distribution of
Class B shares.
To determine whether the CDSC applies to a redemption, the Fund redeems shares
in the following order: (1) shares acquired by reinvestment of dividends (2)
shares held until the sixth anniversary of their initial purchase or later, and
(3) shares held the longest before the sixth anniversary of their initial
purchase.
The amount of the CDSC will depend on the number of years since you invested and
the dollar amount being redeemed, according to the following schedule.
Anniversary
of the Day on Contingent Deferred
Which the Purchase Sales Charge on
Order Was Accepted Redemptions
(As % of Amount
On Before Subject to Charge)
1st 5.0%
1st 2nd 4.0%
2nd 3rd 3.0%
3rd 4th 3.0%
4th 5th 2.0%
5th 6th 1.0%
on or after the None
6th anniversary
In the table, an "anniversary" is the 365th day subsequent to a purchase or a
prior anniversary. All purchases are considered to have been made on the
business day the original purchase of B Exchanged Shares was made. See "General"
above.
Waiver of Class B Sales Charges. The Class B CDSC will not be applied to shares
purchased in certain types of transactions nor will it apply to shares redeemed
in certain circumstances as described below.
The Class B CDSC will be waived for redemptions of shares (i) in connection with
the Systematic Withdrawal Plan and Div-Move services, as described in more
detail under "Shareholder Services" below; (ii) by Retirement Plans due to any
benefit payment such as Plan loans, hardship withdrawals, death, retirement or
separation from service with respect to plan participants or the distribution of
any excess contributions, and (iii) in connection with mandatory distributions
under 403(b) plans and individual retirement accounts.
<PAGE>
Class B Rule 12b-1 Plan. The Fund has adopted a Class B share Rule 12b-1 Plan
(the "B Plan") under which the Fund periodically pays Lord Abbett Distributor an
annual distribution fee of 0.75 of 1% of the average daily net asset value of
the Class B shares that are outstanding for less than 8 years from the original
purchase date of B Exchanged Shares.
The 0.75% annual distribution fee is paid to Lord Abbett Distributor to
compensate it for its services rendered in connection with the distribution of
Class B shares, including the payment and financing of sales commissions on B
Exchanged Shares. Lord Abbett Distributor pays an up-front payment to authorized
institutions totalling 4% with respect to B Exchanged Shares, consisting of
0.25% for service and 3.75% for a sales commission as described below. Under the
Rule 12b-1 Plans ("other Plans") of other Lord Abbett-sponsored funds, Lord
Abbett Distributor pays the 0.25% service fee to authorized institutions in
advance for the first year after B Exchanged Shares have been sold by the
authorized institutions. After the shares have been held for a year, Lord Abbett
Distributor pays the service fee on a quarterly basis. Lord Abbett Distributor
is entitled to retain such service fee payable under the other Plans with
respect to accounts for which there is no authorized institution of record or
for which such authorized institution did not qualify.
Although B Exchanged Shares sold directly to investors by other Lord
Abbett-sponsored funds are sold without a front-end sales charge, Lord Abbett
Distributor pays authorized institutions responsible for sales of B Exchanged
Shares a sales commission of 3.75% of the purchase price. This payment is made
at the time of sale from Lord Abbett Distributor's own resources. Lord Abbett
Distributor has made arrangements to finance these commission payments, which
arrangements include non-recourse assignments by Lord Abbett Distributor to the
financing party of such distribution and CDSC payments which are made to Lord
Abbett Distributor by shareholders who redeem their Class B shares within six
years of the initial purchase of B Exchanged Shares.
The distribution fee and the CDSC payments described above allow investors to
acquire Class B shares with B Exchanged Shares. The CDSC is intended to
supplement Lord Abbett Distributor's reimbursement for the commission payments
it has made with respect to B Exchanged Shares and its related distribution and
financing costs. The distribution fee payments are at a fixed rate and the CDSC
payments are of a nature that, during any year, both forms of payment may not be
sufficient to reimburse Lord Abbett Distributor for its actual expenses. The
Fund is not liable for any expenses incurred by Lord Abbett Distributor in
excess of (i) the amount of such distribution fee payments to be received by
Lord Abbett Distributor and (ii) unreimbursed distribution expenses of Lord
Abbett Distributor incurred in a prior plan year, subject to the right of the
Board of Directors or shareholders to terminate the B Plan. Over the long-term
the expenses incurred by Lord Abbett Distributor are likely to be greater than
such distribution fee and CDSC payments. Nevertheless, there exists a
possibility that for a short-term period Lord Abbett Distributor may not have
sufficient expenses to warrant reimbursement by receipt of such distribution fee
payments. Although Lord Abbett Distributor undertakes not to make a profit under
the B Plan, the B Plan is considered a compensation plan (i.e., distribution
fees are paid regardless of expenses incurred) in order to avoid the possibility
of Lord Abbett Distributor not being able to receive distribution fees because
of a temporary timing difference between its incurring expenses and receipt of
such distribution fees.
Automatic Conversion of Class B Shares. On the eighth anniversary of your
original purchase of B Exchanged Shares, your Class B shares will automatically
convert to Class A shares. This conversion relieves Class B shareholders of the
higher annual distribution fee that applies to Class B shares under the Class B
Rule 12b-1 Plan. The conversion is based on the relative net asset value of the
two classes, and no sales charge or other charge is imposed. When Class B shares
convert, any other Class B shares that were acquired by the reinvestment of
dividends will also convert to
Class A shares on a pro rata basis. The conversion feature is subject to the
continued availability of an opinion of counsel or of a tax ruling described in
"Purchases, Redemptions and Shareholder Services" in the Statement of Additional
Information.
Acquiring Class C Shares. Class C shares are acquired at net asset value per
share without a sales charge only in exchange for "C Exchanged Shares", i.e.
shares of the same class of another Lord Abbett-sponsored fund used in such
exchange. See "Shareholder Services -- Telephone Exchanges" below. However, if
Class C shares are redeemed for cash before the first anniversary of the initial
purchase of C Exchanged Shares, a CDSC of 1% normally will be deducted from the
redemption proceeds. The charge will be assessed on the lesser of the net asset
value of the shares at the time of redemption or the original purchase price.
The CDSC is not imposed on the amount of your account value represented by the
increase in net asset value over the initial purchase price (including increases
due to the reinvestment of dividends). The Class C CDSC is paid to the Fund for
remittance to the original Lord Abbett-sponsored fund to reimburse it, in whole
or in part, for the service and distribution fee payments made by that original
fund.
To determine whether the CDSC applies to a redemption, the Fund redeems shares
in the following order: (1) shares acquired by reinvestment of dividends, (2)
shares held for one year or more, and (3) shares held the longest before the
first anniversary of their initial purchase. If Class C shares are exchanged
into the same class of another Lord Abbett-sponsored fund and subsequently
redeemed before the first anniversary of their original purchase, the CDSC will
be collected by the other fund on behalf of the original fund. The Fund will
collect such a charge for other Lord Abbett-sponsored funds in a similar
situation.
Class C Rule 12b-1 Plan. The service fees described below are not being paid by
the Fund and have not been paid since July 12, 1996, the effective date of the
Class C share Rule 12b-1 Plan (the "C Plan"). Under the C Plan, (except as to
certain accounts for which tracking data is not available) the Fund is permitted
to pay authorized institutions through Lord Abbett Distributor (1) a service fee
at the time shares are sold, not to exceed 0.25 of 1% of the net asset value of
such shares and (2) at each quarter-end after the first anniversary of the sale
of shares, fees for services at annual rates not to exceed 0.25 of 1% of the
average annual net asset value of such shares outstanding (payments with respect
to shares not outstanding during the full quarter to be prorated). These service
fees are for purposes similar to those mentioned above with respect to the A
Plan. Sales in clause (1) exclude shares issued for reinvested dividends and
shares outstanding in clause (2) include shares issued for reinvested dividends
after the first anniversary of their issuance. Collection of CDSCs by the Fund.
The Fund is currently collecting CDSCs on behalf of other Lord Abbett-sponsored
funds with operating 12b-1 plans even though the Fund is currently not making
service fee payments under its own A Plan or C Plan. The timing, categories and
calculation of this charge may be changed by vote (including a disinterested
directors' vote) of the Boards of Directors of such other funds. Redemptions of
Fund shares in exchange for another Lord Abbett-sponsored fund (see "Telephone
Exchange Privilege" under "Shareholder Services") or by participants in
Retirement Plans due to any benefit payment, such as plan loans, hardship
withdrawals, death, retirement or separation from service or the distribution of
any excess contributions are excluded from the CDSCs mentioned above in the case
of Class A and Class B shares but not in the case of Class C shares.
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 Class A share
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.
<PAGE>
Yield information is useful in reviewing the Fund's 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 day's 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.
Shares (full and fractional) in an account of a different class than those in
the account on which the check is drawn will not be redeemed to cover such
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 day's 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 800-821-5129 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 with the advice of Lord Abbett. 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 $19 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 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 twelve 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 Class A share 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 of any class may be exchanged, without a
service charge, (a) for shares of the same class of any other Lord
Abbett-sponsored fund except for (i) Lord Abbett Equity Fund ("LAEF"), any
Series of Lord Abbett Research Fund, Inc. not offered to the general public
("LARF") and Lord Abbett Series Fund, Inc. ("LASF") and (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 (b) for shares of any authorized
institution's affiliated money market fund satisfying Lord Abbett Distributor as
to certain omnibus account and other criteria (together, "Eligible Funds").
Class A Shares purchased directly from the Fund may be exchanged only for shares
of the same class of an Eligible Fund. Class B and Class C shares, which may not
be purchased directly from the Fund, may be acquired in exchange for shares of
the same class of any Eligible Fund. 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, however, will 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 being exchanged are in Class A and were purchased
directly from the Fund (not including shares described under "Div-Move" below).
Instructions must be received by the Fund in Kansas City (800-821-5129) prior to
the close of the NYSE to obtain each fund's 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 ("SWP"): 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. With respect to Class B shares, the
CDSC will be waived on redemptions of up to 12% per year of either the current
net asset value of your account or your original purchase price, whichever is
higher. For Class B shares (over 12% per year) and C shares, redemption proceeds
due to a SWP will be derived from the following sources in the order listed: (1)
shares acquired by reinvestment of dividends, (2) shares held for six years or
more (Class B) or one year or more (Class C); and (3) shares held the longest
before the sixth anniversary of their initial purchase (Class B) or before the
first anniversary of their initial purchase (Class C). Shareholders should be
careful in establishing a SWP, especially to the extent that such a withdrawal
exceeds the annual total return for a class, in which case, the shareholder's
original principal will be invaded and, over time, may be depleted.
<PAGE>
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. Such dividends are not subject to a CDSC. 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.
Householding: A single copy of an annual or semi-annual report will be sent to
an address to which more than one registered shareholder of the Fund with the
same last name has indicated mail is to be delivered, unless additional reports
are specifically requested in writing or by telephone.
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.
The following table has been audited by Deloitte & Touche LLP, independent
public accountants, in connection with their annual audit of the Fund's Class A
share 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.
<PAGE>
Investment Manager and Underwriter
Lord, Abbett & Co. and Lord Abbett Distributor LLC
The General Motors Building
767 Fifth Avenue
New York, New York 10153-0203
212-848-1800
Custodian
The Bank of New York
48 Wall Street
New York, New York 10286
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 419100
Kansas City, Missouri 64141
800-821-5129
Auditors
Deloitte & Touche LLP
Counsel
Debevoise & Plimpton
<PAGE>
LORD ABBETT
Statement of Additional Information July 15, 1996
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 Distributor LLC ("Lord Abbett Distributor") 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 July 15, 1996.
As of July 12, 1996, Lord Abbett U.S. Government Securities Money Market Fund,
Inc. (sometimes referred to as "we" or the "Fund") had 1,000,000,000 shares of
authorized capital stock consisting of three classes (A, B and C), $.001 par
value. The Board of Directors will allocate these authorized shares of capital
stock among the classes from time to time. Prior to July 12, 1996, we had one
class of shares, which is now designated Class A. The Class B and Class C shares
will be offered to the public for the first time on or about August 1, 1996.
Only Class A shares may be purchased directly or acquired by exchange. Class B
and Class C shares may be acquired only by exchange. See "Telephone Exchange
Privilege" for more information. All shares have equal noncumulative voting
rights and equal rights with respect to dividends, assets and liquidation,
except for certain class-specific expenses. They are fully paid and
nonassessable when issued and have no preemptive or conversion rights.
Rule 18f-2 under the Act provides that any matter required to be submitted, by
the provisions of the Act or applicable state law or otherwise, to the holders
of the outstanding voting securities of an investment company such as the Fund
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each class affected by such
matter. Rule 18f-2 further provides that a class shall be deemed to be affected
by a matter unless the interests of each class in the matter are substantially
identical or the matter does not affect any interest of such class. However, the
Rule exempts the selection of independent public accountants, the approval of
principal distributing contracts and the election of directors from its separate
voting requirements.
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 Plans 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
Fundamental Investment Restrictions
- -----------------------------------
The Fund may not: (1) borrow money, except that (i) the Fund may borrow from
banks (as defined in the Investment Company Act of 1940, as amended (the "Act"))
in amounts up to 33 1/3% of its total assets (including the amount borrowed),
(ii) the Fund may borrow up to an additional 5% of its total assets for
temporary purposes, (iii) the Fund may obtain such short-term credit as may be
necessary for the clearance of purchases and sales of portfolio securities and
(iv) the Fund may purchase securities on margin to the extent permitted by
applicable law; (2) pledge its assets (other than to secure borrowings, or to
the extent permitted by the Fund's investment policies as permitted by
applicable law); (3) engage in the underwriting of securities, except pursuant
to a merger or acquisition or to the extent that, in connection with the
disposition of its portfolio securities, it may be deemed to be an underwriter
under federal securities laws; (4) make loans to other persons, except that the
acquisition of bonds, debentures or other corporate debt securities and
investment in government obligations, commercial paper, pass-through
instruments, certificates of deposit, bankers acceptances, repurchase agreements
or any similar instruments shall not be subject to this limitation, and except
further that the Fund may lend its portfolio securities, provided that the
lending of portfolio securities may be made only in accordance with applicable
law; (5) buy or sell real estate, although the Fund may buy short-term
securities secured by real estate or interests therein, or issued by companies
which invest in real estate or interests therein, nor may the Fund buy or sell
commodities or commodity contracts, interests in oil, gas or other mineral
exploration or development programs; (6) with respect to 75% of the gross assets
of the Fund, buy securities of one issuer representing more than 5% of the
Fund's gross assets, except securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; (7) invest more than 25% of its
assets, taken at market value, in the securities of issuers in any particular
industry (excluding U.S. Government securities as described in the Fund's
prospectus); (8) issue senior securities to the extent such issuance would
violate applicable law; or (9) buy common stocks or other voting securities.
With respect to the restrictions mentioned herein, compliance therewith will not
be affected by changes in the market value of portfolio securities but will be
determined at the time of purchase or sale of such securities.
Non-Fundamental Investment Restrictions. In addition to the investment
- -------------------------------------------
restrictions above which cannot be changed without shareholder approval, we also
are subject to the following non-fundamental investment policies which may be
changed by the Board of Directors without shareholder approval. The Fund may
not: (1) borrow in excess of 5% of its gross assets taken at cost or market
value, whichever is lower at the time of borrowing, and then only as a temporary
measure for extraordinary or emergency purposes; (2) make short sales of
securities or maintain a short position except to the extent permitted by
applicable law; (3) invest knowingly more than 15% of its net assets (at the
time of investment) in illiquid securities, except for securities qualifying for
resale under Rule 144A of the Securities Act of 1933, deemed to be liquid by the
Board of Directors; (4) invest in the securities of other investment companies
except as permitted by applicable law; (5) invest in securities of issuers
which, with their predecessors, have a record of less than three years'
continuous operations, if more than 5% of the Fund's total assets would be
invested in such securities (this restriction shall not apply to
mortgaged-backed securities, asset-backed securities or obligations issued or
guaranteed by the U. S. Government, its agencies or instrumentalities); (6) hold
securities of any issuer if more than 1/2 of 1% of the securities of such issuer
are owned beneficially by one or more officers or directors of the Fund or by
one or more partners or members of the Fund's underwriter or investment adviser
if these owners in the aggregate own beneficially more than 5% of the securities
of such issuer; (7) invest in warrants if, at the time of the acquisition, its
investment in warrants, valued at the lower of cost or market, would exceed 5%
of the Fund's total assets (included within such limitation, but not to exceed
2% of the Fund's total assets, are warrants which are not listed on the New York
or American Stock Exchange or a major foreign exchange); (8) write, purchase or
sell puts, calls, straddles, spreads or combinations thereof, except to the
extent permitted in the Fund's prospectus and statement of additional
information, as they may be amended from time to time; or (9) buy from or sell
to any of its officers, directors, employees, or its investment adviser or any
of its officers, directors, partners or employees, any securities other than
shares of the Fund's common stock.
2
<PAGE>
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.
REPURCHASE AGREEMENTS. 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.
2.
Yield Calculation
Each Class calculates its "yield" and "effective yield" based on the number of
days in the period for which the calculation is made ("base period"). Each
Class' "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. Prior
to July 12, 1996 we had one class of shares which is now designated Class A. An
example follows for the seven-day period ended June 30, 1995 of the calculation
of both "yield" and "effective yield" for one Class A share:
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
- --------------------------------------------------------------------------------
3
<PAGE>
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.
Each Class' yield is not fixed. It fluctuates and the annualization of a yield
rate is not a representation by the Class as to what an investment in the Class
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 Class is held, but also on such matters as
any realized and unrealized gains and losses, changes in the expenses of the
Class during the period and on the relative amount of new money coming into the
Class which has to be invested at a different yield than that represented by
existing assets.
3.
DIRECTORS AND OFFICERS
The following director is a partner of Lord, Abbett & Co., The General Motors
Building, 767 Fifth Avenue, New York, New York 10153-0203. He has been
associated with Lord Abbett for over five years and is also an officer, director
or trustee of the twelve other Lord Abbett-sponsored funds. He is an "interested
person" as defined in the Investment Company Act of 1940, as amended, and as
such, may be considered to have an indirect financial interest in the Rule 12b-1
Plan described in the Prospectus.
Robert S. Dow, age 51, Chairman & President
The following outside directors are also directors or trustees of the twelve
other Lord Abbett-sponsored funds referred to above.
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 65.
4
<PAGE>
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 70.
C. Alan MacDonald
The Marketing Partnership, Inc.
27 Signal Road
Stamford, Connecticut
General Partner, The Marketing Partnership, Inc., a full service marketing
consulting firm. Formerly Chairman and Chief Executive Officer of Lincoln
Snacks, Inc., manufacturer of branded snack foods (1992-1994). Formerly
President and Chief Executive Officer of Nestle Foods Corp, and prior to that,
President and Chief Executive Officer of Stouffer Foods Corp., both subsidiaries
of Nestle SA, Switzerland. Currently serves as Director of Den West Restaurant
Co., J. B. Williams, and Fountainhead Water Company. Age 63.
Hansel B. Millican, Jr.
Rochester Button Company
1100 Noblin Avenue
South Boston, Virginia
President and Chief Executive Officer of Rochester Button Company. Age 68.
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 Twelve to be Paid by the Accrued by the Fund and
Compensation Other Lord Fund and Twelve Twelve Other Lord
Accrued by Abbett-sponsored Other Lord Abbett- Abbett-sponsored
Name of Director the Fund1 Funds2 sponsored Funds2 Funds3
- ---------------- ------------ -------------------- ------------------- ------------------------
<S> <C> <C> <C> <C>
E. Thayer Bigelow4 $413 $ 7,556 $33,600 $8,400
Thomas F. Creamer5 $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
5
<PAGE>
<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.
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, 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 64, Vice President and Secretary; Stephen I.
Allen, age 43; Daniel E. Carper, age 44; Robert G. Morris, age 51, E. Wayne
Nordberg, age 58; John J. Gargana, Jr., age 65; 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 54; Victor
W. Pizzolato, age 63; John J. Walsh, age 60, Vice Presidents; and Keith F.
O'Connor, age 41, 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 eight 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, 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. This fee is allocated among Classes A, B
and C based on each class' proportionate share of such average daily net assets.
For the fiscal years ended June 30, 1995, 1994 and 1993, the management fees
attributable to Class A shares only and paid to Lord Abbett amounted to
$775,871, $595,657 and $571,659, respectively. For the fiscal years ended
6
<PAGE>
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, and were attributable to Class A shares only. 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.
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.
7
<PAGE>
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, including class-specific
expenses, plus or minus (3) all short-term realized gains and losses on
portfolio assets.
7.
Telephone Exchange Privilege and
Rule 12b-1 Plans
Telephone Exchange Privilege. Shares of the Fund may be exchanged for those in
- -----------------------------
the same class of (a) any other Lord Abbett-sponsored fund except for (i) Lord
Abbett Equity Fund ("LAEF"), Lord Abbett Series Fund ("LASF") and any series of
Lord Abbett Research Fund not offered to the general public ("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,
and (b) any authorized institution's affiliated money market fund satisfying
Lord Abbett Distributor as to certain omnibus account and other criteria,
hereinafter referred to as an "authorized money market fund" or "AMMF". Class B
and Class C shares of the Fund may be acquired only by exchange for shares in
the same class of any eligible Lord Abbett-sponsored fund or AMMF.
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 in the same class of any eligible Lord
Abbett-sponsored fund or AMMF will be based on the relative net asset values of
the shares exchanged, without a sales charge in most cases. Only Class A shares
may be purchased directly from the Fund or acquired by exchange. Therefore, a
sales charge will 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 Class A 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
Distributor. An "exchange" is effected through the redemption of Fund shares and
the purchase of shares of such other Lord Abbett-sponsored fund or AMMF.
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.
Rule 12b-1 Plans. The Fund is not making payments of Rule 12b-1 fees for its
- -----------------
Class A share Rule 12b-1 Plan ("A Plan") and its Class C share Rule 12b-1 Plan
("C Plan"). The Fund is making annual distribution fee payments (0.75 of 1% of
the average daily net asset value of the Class B shares that are outstanding for
less than 8 years) pursuant to its Class B share Rule 12b-1 Plan ("B Plan"). As
described in the Fund's current Prospectus, the Fund has adopted
8
<PAGE>
a Distribution Plan and Agreement pursuant to Rule 12b-1 under the Act for each
Class. In adopting each 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 each Plan will
benefit the Class and its shareholders. The expected benefits include (in the
case of the Class B Plan) greater sales and lower redemptions of Class B shares
and (in the case of the Class A and C Plan) a higher quality of service to
shareholders by dealers than otherwise would be the case. Lord Abbett is to use
all amounts received under each Plan for payments to dealers for (i) providing
continuous services to each Class' shareholders (in the case of the A and C
Plans), such as answering shareholder inquiries, maintaining records, and
assisting shareholders in making redemptions, transfers, additional purchases
and exchanges and (ii) their assistance in distributing Class B shares (in the
case of the B Plan).
Each 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. Each 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. Each 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. Each 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 each Class' outstanding voting securities.
As stated in the Prospectus, a contingent deferred sales charge ("CDSC") 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
a 12b-1 fee if such shares are redeemed out of the Fund (a) within a period of
24 months from the end of the month in which the original sale occurred in the
case of Class A shares acquired in exchange for shares in the same class of a
fund in the Lord Abbett Family of Funds or (b) within 6 years of their original
purchase in the case of Class B shares, or (c) within a period of 12 months from
the end of the month in which the original sale occurred in the case of Class C
shares acquired in exchange for shares in the same class of a fund in the Lord
Abbett Family of Funds.
As described in the Prospectus, in no event will the amount of the CDSC exceed
1% in the case of Class A and C shares or 5% scaled down to 1%, in the case of
Class B shares, 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 CDSC 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 12b-1 fee (including shares acquired
through reinvestment of dividend income and capital gains distributions) or
(iii) shares which, together with Exchanged Shares, have been held continuously
(a) for 24 months from the end of the month in which the original sale occurred
in the case of Class A shares, (b) until the 6th anniversary of their original
purchase in the case of Class B shares and (c) until the 1st anniversary of
their original purchase in the case of Class C shares. In determining whether a
CDSC is payable, (a) shares not subject to the CDSC will be redeemed before
shares subject to the CDSC and (b) of shares subject to a CDSC, 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
9
<PAGE>
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. With respect to Class B shares, the CDSC will be waived on
redemptions of up to 12% per year of either the current net asset value of your
account or your original purchase price, whichever is higher. 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
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
10
<PAGE>
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.
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.
11
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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
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 Class A share 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.
12
<PAGE>
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Part A - Financial Highlights for the ten years ended
November 30, 1995
Part B - Statement of Net Assets at November 30, 1995
Statement of Operations for the year ended
November 30, 1995
Statements of Changes in Net Assets for the years
ended November 30, 1995 and 1994
Financial Highlights for the five years ended
November 30, 1995
(b) 99.B1 Articles of Amendment and Articles Supplementing*
99.B6 Form of Distribution Agreement**
99.B11 Consent of Deloitte & Touche*
99.B15a Forms of Rule 12b-1 Plans for Class A and Class
C shares**
99.B15b Form of Rule 12b-1 Plan for Class B shares**
99.B18 Form of Plan entered into by Registrant pursuant
to Rule 18f-3.***
* Filed herewith.
** The form of this document is incorporated by reference to
Post-Effective Amendment No. 41 to the Registration Statement on Form
N-1A of Lord Abbett Bond-Debenture Fund, Inc. (File No. 811- 2145).
The Lord Abbett Bond-Debenture Fund document is substantially
identical to that form used for the Registrant except for the name of
the Registrant and/or its Series and perhaps minor differences.
*** Incorporated by Reference to Post-Effective Amendment No. 40 to the
Registration Statement on Form N-1A of Lord Abbett Bond-Debenture
Fund, Inc. (File No. 811-2145)
Item 25. Persons Controlled by or Under Common Control with Registrant
None.
Item 26. Number of Record Holders of Securities
At June 28, 1996 - 9,897
1
<PAGE>
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 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, makes 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 con
ditions 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
2
<PAGE>
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 deliberate dishonest
or fraudulent acts and exclusion for fines or penalties
imposed by law or other matters deemed uninsurable.
3
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Lord, Abbett & Co. acts as investment advisor for twelve other
open-end investment companies (of which it is principal
underwriter for thirteen), 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) Lord Abbett Affiliated Fund, Inc.
Lord Abbett U. S. Government Securities Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Mid-Cap Value Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett Global 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
Lord Abbett Research Fund
Investment Adviser
American Skandia Trust (Lord Abbett Growth and Income Portfolio)
4
<PAGE>
(b) The partners of Lord, Abbett & Co. are:
Name and Principal Positions and Offices
Business Address (1) with Registrant
Robert S. Dow Chairman and President
Kenneth B. Cutler Vice President & Secretary
Stephen I. Allen Vice President
Daniel E. Carper Vice President
Thomas S. Henderson Vice President
Robert G. Morris Vice President
E. Wayne Nordberg Vice President
John J. Walsh Vice President
(1) Each of the above has a principal business address
767 Fifth Avenue, New York, NY 10153
(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 canceled 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
The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
5
<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
15th day of July, 1996
LORD ABBETT U.S. GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
By /s/ Robert S. Dow
Robert S. Dow,
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/ Robert S. Dow and Director
Robert S. Dow (Title) 7/15/96
Vice President and
/s/ John J. Gargana, Jr. Chief Financial Officer
John J. Gargana, Jr. (Title) 7/15/96
/s/ E. Thayer Bigelow Director
E. Thayer Bigelow (Title) 7/15/96
/s/ Stewart S. Dixon Director
Stewart S. Dixon (Title) 7/15/96
/s/ John C. Jansing Director
John C. Jansing (Title) 7/15/96
/s/ C. Alan MacDonald Director
C. Alan MacDonald (Title) 7/15/96
/s/ Hansel B. Millican, Jr. Director
Hansel B. Millican, Jr. (Title) 7/15/96
/s/ Thomas J. Neff Director
Thomas J. Neff (Title) 7/15/96
<PAGE>
LORD ABBETT U.S. GOVERNMENT SECURITIES
MONEY MARKET FUND, INC.
ARTICLES OF AMENDMENT
LORD ABBETT U.S. GOVERNMENT SECURITIES MONEY MARKET FUND, INC., a
Maryland corporation (hereinafter called the "Corporation"), hereby certifies to
the State Department of Assessments and Taxation of Maryland, that:
FIRST: The Articles of Incorporation of the Corporation (hereinafter
called the "Articles"), as heretofore amended, are hereby further amended by:
(a) Striking out Section 1 of ARTICLE V and inserting in lieu thereof:
"SECTION 1. The total number of shares which the Corporation has
authority to issue is 1,000,000,000 shares of capital stock of the par
value of $.001 each, having an aggregate par value of $1,000,000. The Board
of Directors of the Corporation shall have full power and authority, from
time to time, to classify or reclassify any unissued shares of stock of the
Corporation, including, without limitation, the power to classify or
reclassify unissued shares into series, and to classify or reclassify a
series into one or more classes of stock that may be invested together in
the common investment portfolio in which the series is invested, by setting
or changing the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption of such shares of stock. All shares of stock of a
series shall represent the same interest in the Corporation and have the
same preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption as the other shares of stock of that series, except to the
extent that the Board of Directors provides for differing preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications, or terms or conditions of redemption of shares
of stock of classes of such series as determined pursuant to Articles
Supplementary filed for record with the State Department of Assessments and
Taxation of Maryland, or as otherwise determined pursuant to these Articles
or by the Board of Directors in accordance with law. Prior to the first
<PAGE>
classification of unissued shares of stock into additional series, all
outstanding shares of stock shall be of a single series, and prior to the
first classification of a series into additional classes, all outstanding
shares of stock of such series shall be of a single class. Notwithstanding
any other provision of these Articles, upon the first classification of
unissued shares of stock into additional series, the Board of Directors
shall specify a legal name for the outstanding series, as well as for the
new series, in appropriate charter documents filed for record with the
State Department of Assessments and Taxation of Maryland providing for such
name change and classification, and upon the first classification of a
series into additional classes, the Board of Directors shall specify a
legal name for the outstanding class, as well as for the new class or
classes, in appropriate charter documents filed for record with the State
Department of Assessments and Taxation of Maryland providing for such name
change and classification."
(b) Adding a new Section 2 to Article V (and renumbering Sections 2, 3 and
4 as Sections 3, 4 and 5, respectively), as follows:
"SECTION 2. A description of the relative preferences, conversion and
other rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption of all series and
classes of series of shares is as follows, unless otherwise set forth in
Articles Supplementary filed for record with the State Department of
Assessments and Taxation of Maryland or otherwise determined pursuant to
these Articles:
(a) Assets Belonging to Series. All consideration received or
--------------------------
receivable by the Corporation for the issuance or sale of shares
of a particular series, together with all assets in which such
consideration is invested or reinvested, all income, earnings,
profits and proceeds thereof, including any proceeds derived from
the sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that
series for all purposes, subject only to the rights of creditors,
and shall be so recorded upon the books of account of the
Corporation. Such consideration, assets, income, earnings, profits
and proceeds, including any proceeds derived from the sale,
exchange or liquidation
2
<PAGE>
of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be,
together with any unallocated items (as hereinafter defined)
relating to that series as provided in the following sentence, are
herein referred to as "assets belonging to" that series. In the
event that there are any assets, income, earnings, profits or
proceeds thereof, funds or payments which are not readily
identifiable as belonging to any particular series (collectively
"Unallocated Items"), the Board of Directors shall allocate such
Unallocated Items to and among any one or more of the series
created from time to time in such manner and on such basis as it,
in its sole discretion, deems fair and equitable; and any
Unallocated Items so allocated to a particular series shall belong
to that series. Each such allocation by the Board of Directors
shall be conclusive and binding upon the stockholders of all
series for all purposes.
(b) Liabilities Belonging to Series. The assets belonging to each
-------------------------------
particular series shall be charged with the liabilities of the
Corporation in respect of that series, including any class
thereof, and with all expenses, costs, charges and reserves
attributable to that series, including any such class, and shall
be so recorded upon the books of account of the Corporation. Such
liabilities, expenses, costs, charges and reserves, together with
any unallocated items (as hereinafter defined) relating to that
series, including any class thereof, as provided in the following
sentence, so charged to that series, are herein referred to as
"liabilities belonging to" that series. In the event there are any
unallocated liabilities, expenses, costs, charges or reserves of
the Corporation which are not readily identifiable as belonging to
any particular series (collectively "Unallocated Items"), the
Board of Directors shall allocate and charge such Unallocated
Items to and among any one or more of the series created from time
to time in such manner and on such basis as the Board of Directors
in its sole discretion deems fair and equitable; and any
Unallocated Items so allocated and charged to a particular series
shall belong
3
<PAGE>
to that series. Each such allocation by the Board of Directors
shall be conclusive and binding upon the stock holders of all
series for all purposes. To the extent determined by the Board of
Directors, liabilities and expenses relating solely to a
particular class (including, without limitation, distribution
expenses under a Rule 12b-1 plan and administrative expenses under
an administration or service agreement, plan or other arrangement,
however designated, which may be adopted for such class) shall be
allocated to and borne by such class and shall be appropriately
reflected (in the manner determined by the Board of Directors) in
the net asset value, dividends and distributions and liquidation
rights of the shares of such class.
(c) Dividends. Dividends and distributions on shares of a particular
---------
series may be paid to the holders of shares of that series at such
times, in such manner and from such of the income and capital
gains, accrued or realized, from the assets belonging to that
series, after providing for actual and accrued liabilities
belonging to that series, as the Board of Directors may determine.
Such dividends and distributions may vary between or among classes
of a series to reflect differing allocations of liabilities and
expenses of such series between or among such classes to such
extent as may be provided in or determined pursuant to Articles
Supplementary filed for record with the State Department of
Assessments and Taxation of Maryland or as may otherwise be
determined by the Board of Directors.
(d) Liquidation. In the event of the liquidation or dissolution of
-----------
the Corporation, the stockholders of each series shall be entitled
to receive, as a series, when and as declared by the Board of
Directors, the excess of the assets belonging to that series over
the liabilities belonging to that series. The assets so
distributable to the stockholders of one or more classes of a
series shall be distributed among such stockholders in proportion
to the respective aggregate net asset values of the shares of
4
<PAGE>
such series held by them and recorded on the books of the
Corporation.
(e) Voting. On each matter submitted to vote of the stockholders,
------
each holder of a share shall be entitled to one vote for each such
share standing in his name on the books of the Corporation
irrespective of the series or class thereof and all shares of all
series and classes shall vote as a single class ("Single Class
Voting"); provided, however, that (i) as to any matter with
-
respect to which a separate vote of any series or class is
required by the Investment Company Act of 1940, as amended from
time to time, applicable rules and regulations thereunder, or the
Maryland General Corporation Law, such requirement as to a
separate vote of that series or class shall apply in lieu of
Single Class Voting as described above; (ii) in the event that the
--
separate vote requirements referred to in (i) above apply with
respect to one or more (but less than all) series or classes,
then, subject to (iii) below, the shares of all other series and
classes shall vote as a single class; and (iii) as to any matter
---
which does not affect the interest of a particular series or
class, only the holders of shares of the one or more affected
series or classes shall be entitled to vote.
(f) Conversion. At such times (which times may vary among shares of a
----------
class) as may be determined by the Board of Directors, shares of a
particular class of a series may be automatically converted into
shares of another class of such series based on the relative net
asset values of such classes at the time of conversion, subject,
however, to any conditions of conversion that may be imposed by
the Board of Directors."
(c) Striking out the last sentence of Section 3(a) (as renumbered from
Section 2(a) by this Amendment) of Article V, and inserting in lieu thereof:
"Each holder of the shares of capital stock of the Corporation, upon
request to the Corporation accompanied by surrender (to the Corporation, or
an agent designated by it) of the appropriate stock certificate or
certificates, if any, in proper form for transfer, and such
5
<PAGE>
other instruments as the Board of Directors may require, shall be entitled
to require the Corporation to redeem all or any part of the shares of
capital stock outstanding in the name of such holder on the books of the
Corporation, at a redemption price equal to the net asset value of such
shares determined as hereinafter set forth. Notwithstanding the foregoing,
the Corporation may deduct from the proceeds otherwise due to any
stockholder requiring the Corporation to redeem shares a redemption charge
not to exceed one percent (1%) of such net asset value or a reimbursement
charge, a deferred sales charge or other charge that is integral to the
Corporation's distribution program (which charges may vary within and among
series and classes) as may be established from time to time by the Board of
Directors."
(d) Striking out the words "of any class" from Section 5 (as renumbered
from Section 4 by this Amendment) of Article V.
(e) Striking out the last two sentences of Section 1(g) of Article VII and
inserting in lieu thereof:
"Any agreement entered into pursuant to said sections (e) or (f) shall be
consistent with and subject to the requirements of the Investment Company
Act of 1940, as amended from time to time, applicable rules and regulations
thereunder, or any other applicable Act of Congress hereafter enacted, and
no amendment to any agreement entered into pursuant to said section (e)
(other than an amendment reducing the compensation of the other party
thereto) shall be effective unless assented to by the affirmative vote of a
majority of the outstanding voting securities of the Corporation (as such
phrase is defined in the Investment Company Act of 1940, as amended from
time to time) entitled to vote on the matter."
(f) Striking out the preamble to Section 3 of Article VII and the portion
of Section 3(a) of Article VII prior to subsection (1) and inserting in lieu
thereof:
"SECTION 3. For the purposes referred to in these Articles of
Incorporation, the net asset value of shares of the capital stock of the
Corporation of each series and class as of any particular time (a
"determination time") shall be determined by or pursuant to the direction
of the Board of Directors as follows:
6
<PAGE>
(a) At times when a series is not classified into multiple classes, the net
asset value of each share of stock of a series, as of a determination
time, shall be the quotient, carried out to not less than two decimal
points, obtained by dividing the net value of the assets of the
Corporation belonging to that series (determined as hereinafter
provided) as of such determination time by the total number of shares
of that series then outstanding, including all shares of that series
which the Corporation has agreed to sell for which the price has been
determined, and excluding shares of that series which the Corporation
has agreed to purchase or which are subject to redemption for which the
price has been determined.
The net value of the assets of the Corporation of a series as of a
determination time shall be determined in accordance with sound
accounting practice by deducting from the gross value of the assets of
the Corporation belonging to that series (determined as hereinafter
provided), the amount of all liabilities belonging to that series (as
such terms are defined in subsection (b) of Section 2 of Article V), in
each case as of such determination time.
The gross value of the assets of the Corporation belonging to a series
as of such determination time shall be an amount equal to all cash,
receivables, the market value of all securities for which market
quotations are readily available and the fair value of other assets of
the Corporation belonging to that series (as such terms are defined in
subsection (a) of Section 2 of Article V) at such determination time,
all determined in accordance with sound accounting practice and giving
effect to the following:"
(g) Adding a new subsection (b) to Section 3 of Article VII (and
renumbering subsection (b) as subsection (c)), as follows:
"(b) At times when a series is classified into multiple classes, the
net asset value of each share of stock of a class of such series
shall be determined in accordance with
7
<PAGE>
subsections (a) and (c) of this Section 3 with appropriate
adjustments to reflect differing allocations of liabilities and
expenses of such series between or among such classes to such
extent as may be provided in or determined pursuant to Articles
Supplementary filed for record with the State Department of
Assessments and Taxation of Maryland or as may otherwise be
determined by the Board of Directors."
(h) Striking out Section 4 of Article VII and inserting in lieu thereof:
"SECTION 4. Any determination as to any of the following matters made
by or pursuant to the direction of the Board of Directors consistent with
these Articles of Incorporation and in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of duties, shall be final
and conclusive and shall be binding upon the Corporation and every holder
of shares of capital stock of the Corporation, of any series or class,
namely, the amount of the assets, obligations, liabilities and expenses of
the Corporation or belonging to any series or with respect to any class;
the amount of the net income of the Corporation from dividends and interest
for any period and the amount of assets at any time legally available for
the payment of dividends with respect to any series or class; the amount of
paid-in surplus, other surplus, annual or other net profits, or net assets
in excess of capital, undivided profits, or excess of profits over losses
on sales of securities belonging to the Corporation or any series or class;
the amount, purpose, time of creation, increase or decrease, alteration or
cancellation of any reserves or charges and the propriety thereof (whether
or not any obligation or liability for which such reserves or charges shall
have been created shall have been paid or discharged) with respect to the
Corporation or any series or class; the market value, or any sale, bid or
asked price to be applied in determining the market value, of any security
owned or held by the Corporation; the fair value of any other asset owned
by the Corporation; the number of shares of stock of any series or class
issued or issuable; the existence of conditions permitting the postponement
of payment of the repurchase price of shares of stock of any series or
class or the suspension of the right of redemption as provided by law; any
matter relating to the acquisition, holding and disposition of securities
and other assets by the Corporation; any question as to whether any
transaction constitutes a purchase of securities on margin, a short sale of
securities, or an
8
<PAGE>
underwriting of the sale of, or participation in any underwriting or
selling group in connection with the public distribution of any securities;
and any matter relating to the issue, sale, repurchase and/or other
acquisition or disposition of shares of stock of any series or class."
SECOND: The Board of Directors of the Corporation on March 14, 1996,
duly adopted resolutions in which was set forth the foregoing amendments to the
Articles, declaring that the said amendments of the Articles as proposed were
advisable and directing that they be submitted for action thereon by the
stockholders of the Corporation at a meeting to be held on June 19, 1996.
THIRD: Notice setting forth said amendments of the Articles and
stating that a purpose of the meeting of the stockholders would be to take
action thereon, was given, as required by law, to all stockholders entitled to
vote thereon. The amendments of the Articles as hereinabove set forth were
approved by the stockholders of the Corporation at said meeting by the
affirmative vote of a majority of all the votes entitled to be cast thereon, as
required by the Articles.
FOURTH: The amendments of the Articles hereinabove set forth have
been duly advised by the Board of Directors and approved by the stockholders of
the Corporation.
FIFTH: This Amendment does not increase the number of shares which
the Corporation has authority to issue or decrease the par value of the shares
of capital stock of the Corporation.
9
<PAGE>
IN WITNESS WHEREOF, Lord Abbett U.S. Government Securities Money
Market Fund, Inc. has caused these presents to be signed in its name and on its
behalf by its President and witnessed by its Secretary on ____________, 1996.
LORD ABBETT U.S. GOVERNMENT SECURITIES
MONEY MARKET FUND, INC.
By:/s/Robert S. Dow
-----------------------
Robert S. Dow, President
WITNESS:
/s/Kenneth B. Cutler
- ----------------------------
Kenneth B. Cutler, Secretary
10
<PAGE>
THE UNDERSIGNED, President of Lord Abbett U.S. Government Securities
Money Market Fund, Inc., who executed on behalf of the Corporation the foregoing
Articles of Amendment, of which this Certificate is made a part, hereby
acknowledges, in the name and on behalf of said Corporation, the foregoing
Articles of Amendment to be the corporate act of said Corporation and further
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects under the penalties of
perjury.
/s/Robert S. Dow
-----------------------
Robert S. Dow, President
11
<PAGE>
LORD ABBETT U.S. GOVERNMENT SECURITIES
MONEY MARKET FUND, INC.
ARTICLES OF AMENDMENT
LORD ABBETT U.S. GOVERNMENT SECURITIES MONEY MARKET FUND, INC., a
Maryland corporation (hereinafter called the "Corporation"), hereby certifies to
the State Department of Assessments and Taxation of Maryland, that:
FIRST: The Articles of Incorporation of the Corporation (hereinafter
called the "Articles"), as heretofore amended, are hereby further amended by
specifying the legal name for the existing class of capital stock of the
Corporation, both outstanding shares and unissued shares, as Class A.
SECOND: A majority of the entire Board of Directors of the
Corporation on March 14, 1996, duly adopted resolutions approving the foregoing
amendment to the Articles.
THIRD: The amendment of the Articles hereinabove set forth has been
duly approved by the Board of Directors of the Corporation and is limited to a
change expressly permitted by (S) 2-605 of the General Corporation Law of the
State of Maryland to be made without action of the stockholders.
FOURTH: The Corporation is registered as an open-end company under
the Investment Company Act of 1940, as amended from time to time.
<PAGE>
IN WITNESS WHEREOF, Lord Abbett U.S. Government Securities Money
Market Fund, Inc. has caused these presents to be signed in its name and on its
behalf by its President and witnessed by its Secretary on ____________, 1996.
LORD ABBETT U.S. GOVERNMENT SECURITIES
MONEY MARKET FUND, INC.
By:/s/Robert S. Dow
----------------------
Robert S. Dow, President
WITNESS:
/s/Kenneth B. Cutler
- -----------------------------
Kenneth B. Cutler, Secretary
2
<PAGE>
THE UNDERSIGNED, President of Lord Abbett U.S. Government Securities
Money Market Fund, Inc., who executed on behalf of the Corporation the foregoing
Articles of Amendment, of which this Certificate is made a part, hereby
acknowledges, in the name and on behalf of said Corporation, the foregoing
Articles of Amendment to be the corporate act of said Corporation and further
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects under the penalties of
perjury.
/s/Robert S. Dow
----------------------
Robert S. Dow, President
3
<PAGE>
LORD ABBETT U.S. GOVERNMENT SECURITIES
MONEY MARKET FUND, INC.
ARTICLES SUPPLEMENTARY
LORD ABBETT U.S. GOVERNMENT SECURITIES MONEY MARKET FUND, INC., a
Maryland corporation (hereinafter called the "Corporation"), hereby certifies to
the State Department of Assessments and Taxation of Maryland that:
FIRST: The Corporation presently has authority to issue 1,000,000,000
shares of capital stock, of the par value $.001 each, previously classified and
designated by the Board of Directors as Class A shares.
SECOND: Pursuant to the authority of the Board of Directors to
classify and reclassify unissued shares of stock of the Corporation and to
classify a series into one or more classes of such series, the Board of
Directors hereby (i) classifies and reclassifies 200,000,000 authorized but
unissued Class A shares as Class C shares and (ii) classifies and reclassifies
100,000,000 authorized but unissued Class A shares as Class B shares.
THIRD: Subject to the power of the Board of Directors to classify and
reclassify unissued shares, all shares of the Corporation's Class B and Class C
stock shall be invested in the same investment portfolio of the Corporation as
the Class A stock and shall have the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption set forth in Article V of the Articles of
Incorporation of the Corporation (hereafter called the "Articles") and shall be
subject to all other provisions of the Articles relating to stock of the
Corporation generally.
FOURTH: The Class B and Class C shares aforesaid have been duly
classified by the Board of Directors under the authority contained in the
Articles.
<PAGE>
IN WITNESS WHEREOF, Lord Abbett U.S. Government Securities Money
Market Fund, Inc. has caused these presents to be signed in its name and on its
behalf by its President and witnessed by its Secretary on July 9, 1996.
LORD ABBETT U.S. GOVERNMENT SECURITIES
MONEY MARKET FUND, INC.
By:/s/Robert S. Dow
------------------------
Robert S. Dow, President
WITNESS:
/s/ Kenneth B. Cutler
- -----------------------------
Kenneth B. Cutler, Secretary
2
<PAGE>
THE UNDERSIGNED, President of Lord Abbett U.S. Government Securities
Money Market Fund, Inc., who executed on behalf of the Corporation the foregoing
Articles Supplementary, of which this Certificate is made a part, hereby
acknowledges, in the name and on behalf of said Corporation, the foregoing
Articles Supplementary to be the corporate act of said Corporation and further
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects under the penalties of
perjury.
/s/Robert S. Dow
------------------------
Robert S. Dow, President
3
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. 20
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
July 15, 1996
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<FISCAL-YEAR-END> JUN-30-1995
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