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. 24 [X]
And
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]
OF 1940
Amendment No. 22 [X]
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
Thomas F. Konop, Vice President
767 FIFTH AVENUE, NEW YORK, N. Y. 10153
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately on filing pursuant to paragraph (b) of Rule 485
X on November 1, 1998 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
<PAGE>
LORD ABBETT U.S. GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
FORM N-1A
Cross Reference Sheet
Post-Effective Amendment No. 24
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
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
<PAGE>
This Prospectus sets forth concisely the information about Lord Abbett U.S.
Government Securities Money Market Fund, Inc. ("we" or the "Fund") that you
should know before investing. Please read this Prospectus before investing and
retain it for future reference.
The Fund has three classes of shares, designated Classes A, B and C, which
provide you with different purchasing options. See "Purchases" for a description
of these options.
The investment objective of the Fund is to provide high current income and
preservation of capital through investments in high-quality, short-term liquid
securities. There can be no assurance that this objective will be achieved.
The Statement of Additional Information dated November 1, 1998 has been filed
with the Securities and Exchange Commission and is incorporated by reference
into this Prospectus. You may obtain it, without charge, by writing to the Fund
or by calling 800-874-3733 and asking for "Part B of the Prospectus -- the
Statement of Additional Information." In addition, the Commission maintains a
website (http://www.sec.gov) that contains this Prospectus, the Statement of
Additional Information, other material incorpor ated by reference, and other
information regarding companies that file electronically with the Commission.
Shaded terms are defined in the "Glossary of Terms."
Like all mutual fund shares, 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.
PROSPECTUS
November 1, 1998
Lord Abbett
U.S. GOVERNMENT SECURITIES
MONEY MARKET FUND, INC.
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.
TABLE OF CONTENTS PAGE
How We Invest 2
Portfolio Management 2
Investor Expenses 2
Financial Highlights 3
Purchases 4
Opening an Account 5
Shareholder Services 5
Redemptions 6
Dividends, Taxes and Yield 7
Our Management 8
Fund Performance 8
Glossary of Terms 8
It is the Fund's policy to maintain, and it has maintained, a constant net asset
value of $1.00 per share. However, an investment in the Fund is neither insured
nor guaranteed by the U.S. Government and there can be no assurance that we will
be able to maintain a stable net asset value of $1.00 per share.
<PAGE>
HOW WE INVEST
Under normal circumstances, we intend to invest at least 65% of our total assets
in U.S. Government Securities, Agencies and Instrumentalities eligible as
investments for a money market fund. Up to 35% of our total assets may be
invested in other High-Quality, Short-Term Securities.
Our investments must meet certain portfolio maturity, diversification and
quality requirements because we are a "money market fund" and use the
amortized cost method of valuing our portfolio securities. See "Net Asset
Value."
MATURITY. The maturity requirements limit 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.
DIVERSIFICATION. Generally speaking, with certain exceptions, including
Government Securities, the diversification requirements limit our investments as
follows: (i) the securities of any one issuer are limited to 5% of our total
assets, (ii) securities issued by or subject to puts from any single institution
are limited to 5% of our total assets, and (iii) securities that are neither
rated nor comparable in quality to securities that are rated in the highest
category are limited to 5% of our total assets.
QUALITY. We may invest only in securities that present minimal risks as
determined by the Board of Directors (or Lord, Abbett & Co. where delegable) and
that satisfy certain requirements relating to ratings by nationally-recognized
ratings organizations.
CONCENTRATION. No more than 25% of our total assets may
be invested in securities of any one industry, except there is no limitation on
investments in obligations issued or backed by the U.S. Government, its agencies
or instrumentalities.
We may enter into repurchase agreements with Federal Reserve member banks,
primary dealers in U.S. Government Securities and broker-dealers.
Repurchase agreements must be collateralized by money market securities,
may not exceed 30 days and must be marked daily to the repurchase price.
For more information about investment policies, restrictions and risk factors,
see the Statement of Additional Information.
PORTFOLIO MANAGEMENT
The Fund's investment decisions are made by Robert Gerber. Mr. Gerber is a
Partner of Lord Abbett and Executive Vice President and Portfolio Manager
of the Fund. He joined Lord Abbett in July 1997 as Director of High Grade
Fixed Income. Prior to joining Lord Abbett, Mr. Gerber served as a Senior
Portfolio Manager of Sanford C. Bernstein & Co., Inc. from 1992 to 1997.
INVESTOR EXPENSES
The expenses shown below are based on historical expenses for the fiscal year
ended June 30, 1998. Future expenses may be more or less than shown.
Class A Class B Class C
Shareholder Transaction Expenses
Maximum Sales Charge on Purchases
(as a % of offering price) None None None
Deferred Sales Charge(1)
(See "Purchases") None 5.00% None
Annual Fund Operating Expenses
(as a % of average net assets)
Management Fees (See "Our Management") .50% .50% .50%
12b-1 Fees(2) None .75% None
Other Expenses (See "Our Management") .33% .33% .33%
Total Operating Expenses .83% 1.58% .83%
Example: Assume an average annual return of 5% and no change in the level
of expenses. For a $1,000 investment with all dividends and distributions
reinvested, you would have paid the following total expenses, assuming
redemption at the end of each time period indicated.
Share Class Year 1 Year 3 Year 5 Year 10
Class A shares $8 $26 $46 $103
Class B shares(3) $56 $80 $96 $168
Class C shares $8 $26 $46 $103
You would pay the following expenses on the same investment, assuming no
redemption:
Class A shares $8 $26 $46 $103
Class B shares(3) $16 $50 $86 $168
Class C shares $8 $26 $46 $103
This example is for comparison and is not a representation of the Fund's actual
expenses and returns, either past or present.
(1) See "Purchases" for a description of sales charges, the Contingent Deferred
Sales Charge ("CDSC") payable on certain redemptions and separate Rule 12b-1
plans applicable to each class of shares.
(2) Because of the 12b-1 fees, long-term shareholders may indirectly pay more
than the equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers, Inc. While there are 12b-1 Plans for
Class A and C, they are currently inactive.
(3) Class B shares will automatically convert to Class A shares on the
eighth anniversary of your original purchase of Class B shares.
The purpose of the table is to assist you in understanding the various costs and
expenses that you will bear directly or indirectly as an investor in the Fund.
<PAGE>
FINANCIAL HIGHLIGHTS
The following table has been audited by Deloitte & Touche LLP,
independent accountants, in connection with their annual audit of the
Fund's Financial Statements, whose report thereon may be obtained on
request.
<TABLE>
<CAPTION>
Per Class A Share Operating Year Ended June 30,
Performance: 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
<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 .047 .046 .048 .046 .025 .024 .038 .064 .077 .080
Less Distributions
Dividends from net investment income (.047) (.046) (.048) (.046) (.025) (.024) (.038) (.064) (.077) (.080)
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(d) 4.79% 4.66% 4.85% 4.65% 2.54% 2.43% 3.87% 6.55% 8.01% 8.32%
Ratios/Supplemental Data:
Net assets, end of year (000) $162,631 $143,197 $152,531 $140,642 $156,069 $122,782 $147,229 $195,134 $195,547 $212,001
Ratios to Average Net Assets:
Expenses, including waiver 0.83% 0.84% 0.81% 0.86% 0.85% 0.87% 1.01% 0.95% 0.90% 0.87%
Expenses, excluding waiver 0.83% 0.84% 0.81% 0.86% 0.90% 0.96% 1.02% 0.95% 0.90% 0.87%
Net investment income 4.68% 4.57% 4.75% 4.54% 2.56% 2.41% 3.86% 6.40% 7.74% 8.02%
Per Class Share Operating Class B Shares Class C Shares
Performance: Year Ended August 1, 1996(a)(c) Year Ended July 15, 1996(a)
June 30, 1998 to June 30, 1997 June 30, 1998 to June 30, 1997
<S> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
Income from investment operations
Net investment income .039 .024 .047 .044
Less Distributions
Dividends from net investment income (.039) (.024) (.047) (.044)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
Total Return(d) 4.01% 2.39%(b) 4.79% 4.47%(b)
Ratios/Supplemental Data:
Net assets, end of year (000) $1,760 $244 $738 $791
Ratios to Average Net Assets:
Expenses 1.59% 0.99%(b) 0.84% 0.81%(b)
Net investment income 3.96% 2.38%(b) 4.73% 4.39%(b)
<FN>
(a) Commencement of offering Class B and Class C shares, respectively.
(b) Not annualized.
(c) November 15, 1996 commencement of operations.
(d) Total return assumes reinvestment of all distributions.
</FN>
</TABLE>
<PAGE>
PURCHASES
The Fund offers three classes of shares - Classes A, B and C. Our shares are
continuously offered at their net asset value (normally $1.00 per share). You
may purchase shares at the net asset value next determined after the Fund
accepts your purchase order submitted in proper form. Each class of shares
represents an investment in the same portfolio of securities but is subject to
different expenses and has different dividends and yields. Investors should read
this section carefully to determine which class of shares represents the best
investment option for their particular situation.
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.
Class A - Purchased directly or acquired by exchange.
- -Offered without a sales charge.
- -Lower annual expenses than Class B shares.
Class B - Purchased directly or acquired by exchange.*
- -No front-end sales charge.
- -Higher annual expenses than Class A shares.
- -A contingent deferred sales charge is applied to shares sold prior to sixth
anniversary of purchase.
- -Automatically convert to Class A shares after eight years.
- -Asset-based sales charge 0.75 of 1%.
See "Class B Rule 12b-1 Plan."
*Class B shares of the Fund
may be purchased (i) directly by investors opening dollar cost averaging
accounts pursuant to which all of the amount invested will be reinvested in an
Eligible Fund within 24 months of the initial purchase and (ii) by exchange for
shares of the same class of any Eligible Fund.
Class C - Acquired by exchange only.
- -No front-end sales charge.
- -Lower annual expenses than Class B shares.
- -A contingent deferred sales charge is applied to shares sold prior to the
first anniversary of purchase.
CONTINGENT DEFERRED SALES CHARGE ("CDSC") If you
acquire shares through an exchange from another Lord Abbett-sponsored fund in
which a CDSC applies and you subsequently redeem them, the Fund will collect and
remit the CDSC to the fund in which you originally purchased the shares. The
CDSC will be remitted to Lord Abbett Distributor LLC ("Lord Abbett
Distributor"), in the case of Class B shares. The CDSC is based on the original
purchase cost or the current market value of the shares being sold, whichever is
less. There is no CDSC on shares acquired through reinvestment of dividends.
CLASS A SHARE CDSC. If you buy Class A shares, you pay no sales charge. If you
acquire Class A shares in exchange for Class A shares of another Lord
Abbett-sponsored fund subject to a 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 a CDSC of 1%.
CLASS B SHARE CDSC. The CDSC for Class
B shares normally applies if you redeem your shares before the sixth anniversary
of their initial purchase. The CDSC varies depending on how long you own your
shares as shown below.
Anniversary Contingent Deferred Sales
of the Day on Charge on Redemptions
Which the Purchase (As % of Amount
Order Was Accepted Subject to Charge)
On Before
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
CLASS B SHARE CDSC WAIVER.The CDSC will generally be waived under the following
circumstances:
- -death of the shareholder (natural person);
- -on redemptions of shares in connection with Div-Move and Systematic Withdrawal
Plans (up to 12% per year);
- -benefit payments such as Plan loans, hardship withdrawals,death, disability,
retirement, separation from service or any excess contribution or
distribution under Retirement Plans; and
- -Eligible Mandatory Distributions under 403(b) plans and Individual Retirement
Accounts.
See "Systematic Withdrawal Plan" for more information on CDSCs with respect to
Class B shares.
<PAGE>
CLASS C SHARE CDSC. The 1% CDSC for Class C shares normally
applies if you redeem your shares before the first anniversary of your original
purchase.
SALES COMPENSATION
Compensation payments originate from two sources: CDSCs and 12b-1 fees paid out
of the Fund's assets. The Fund is currently not making 12b-1 fee payments under
the Class A and Class C share Rule 12b-1 plans. However, Lord Abbett Distributor
pays an up-front payment to authorized institutions totaling 4%, consisting of
0.25% for service and 3.75% for a sales commission in connection with purchases
of Class B shares for dollar cost averaging accounts described above.
CLASS B RULE 12B-1 PLAN. The Fund has adopted a Class B share Rule 12b-1 plan
under which we periodically pay Lord Abbett Distributor an annual distribution
fee of 0.75 of 1% of the average daily net asset value of the Class B shares.
The 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 Class B shares at the time of their original purchase.
OPENING AN ACCOUNT
Minimum Initial Investment - DIRECT PURCHASE
Regular account $1,000 (Class A) and
$5,000 (Class B shares)
Individual Retirement Account (Traditional, Education and Roth),
403(b) and employer-sponsored retirement plans under
the Internal Revenue Code $250 (Class A shares)
$2,000 (Class B shares)
Invest-A-Matic $250 initial (Class A shares)
$50 subsequent minimum (Class A shares)
BY CHECK. To purchase Class A shares by mail, send the completed
attached Application Form, together with a check in U.S. dollars to:
Lord Abbett U.S. Government Securities
Money Market Fund, Inc.
P.O. Box 419576 u Kansas City, MO 64141
BY WIRE. Telephone the Fund to obtain an account number. You can then
instruct your bank to wire the amount of your investment to:
United Missouri Bank of Kansas City, N.A.
Tenth and Grand u Kansas City, MO 64141
Account # 980103352-2
ABA # 1010-0069-5
Specify the name of the Fund, your account number and the name(s) in which the
account is registered. Your bank may charge you a fee to wire funds. Wires
received prior to 12 noon Eastern Standard Time will receive the dividends for
that day. Otherwise, dividends will begin accruing on the next business day.
BY EXCHANGE. Telephone the Fund to request an exchange from any eligible
Lord Abbett-sponsored fund.
Minimum Initial Investment - EXCHANGE PURCHASE
Regular account $1,000 (Class A, B and C shares)
Individual Retirement Account (Traditional, Education and Roth),
403(b) and employer-sponsored retirement plans
under the Internal Revenue Code $250 (Class A, B and C shares)
PROPER FORM. Your account will begin accruing dividends on the day on which your
purchase order is accepted by the Fund as being in proper form. To be in proper
form, an order submitted directly to the Fund must contain all information and
documentation required by the Application Form or supplementally by the Fund,
and payment must be credited by check in U.S. dollars to our custodian bank's
account. Checks drawn on foreign banks will not be credited to our custodian
bank's account unless cleared in U.S. dollars by a U.S. bank. For more
information regarding proper form of a purchase order, call the Fund at
800-821-5129.
SHAREHOLDER SERVICES
TELEPHONE EXCHANGES. You or your investment professional, with proper
identification, can instruct the Fund by telephone to exchange your Class A or B
shares, purchased directly, for the same shares of any Eligible Fund. Class C
shares may only be acquired by exchange for shares of the same class of any
Eligible Fund. Certain of the tax-free, single-state series may not be offered
in your state. Instructions must be received by the Fund in Kansas City by
calling 800-821-5129 before the close of the New York Stock Exchange ("NYSE") to
exchange at the net asset value on that day.
For your protection, telephone requests for exchanges are recorded.
We will take measures to verify the identity of the caller, such as asking for
your name, account number, Social Security or taxpayer identification number and
other relevant information. The Fund will not be liable for following
instructions communicated by telephone that it reasonably believes to be
genuine. Expedited exchanges by telephone may be difficult to implement in times
of drastic economic or market change.
<PAGE>
The exchange privilege should not be used to take advantage of
short-term swings in the market. The Fund reserves the right to limit
or terminate this privilege for any shareholder making frequent
exchanges and may revoke the privilege for all shareholders upon 60
days' prior written notice. You have this privilege unless you refuse
it in writing. You should read the prospectus of the other Lord
Abbett-sponsored fund(s) selected before making an exchange.
INVEST-A-MATIC. You can make fixed, periodic investments ($250 initial and $50
subsequent 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.
DIV-MOVE. You can
invest the dividends paid on your account ($50 minimum) into
another account, within the same class, in any
Eligible Fund. The account must be either your account, your joint account with
another, or a custodial account for your minor child.
SYSTEMATIC WITHDRAWAL PLAN ("SWP"). You can make periodic cash withdrawals from
your account which are automatically paid to you in fixed or variable
amounts. To participate, the value of your shares must be at least $10,000,
except for retirement plans for which there is no minimum.
With respect to Class B shares, the CDSC will be
waived on redemptions of up to 12% of the current net asset value of your
account at the time of your SWP request. For Class B share redemptions over 12%
per year, the CDSC will apply to the entire redemption. Please contact the Fund
for assistance in minimizing the CDSC in this situation.
Redemption proceeds due to a SWP for Class B (up to 12% per year) and Class C
shares, will be redeemed in the order described under "Redemptions."
RETIREMENT PLANS. The Lord Abbett
Family of Funds offers a range of qualified retirement plans, including IRAs
(Traditional, Education and Roth), SIMPLE IRAs, Simplified Employee Pension
Plans, 403(b) and pension and profit-sharing plans, including 401(k) plans. To
find out more about these plans, call the Fund at 800-253-7299.
SHARE CERTIFICATES. All shares are electronically recorded.
Certificated shares are no longer available for any Class of the Fund.
Account Changes. For any changes you need to make to your account,
consult your financial representative or call the Fund at
800-821-5129.
HOUSEHOLDING. Shareholders with the same last name and address
will receive one copy of annual or semi-annual reports, unless they
request additional reports in writing.
REDEMPTIONS. REGULAR PROCEDURE. To redeem
shares you must submit a written redemption request indicating your share class,
your account number, the name(s) in which the account is registered and the
dollar value or number of shares you wish to sell.
Include all necessary
signatures and any additional documents that may be required. If the signer has
any legal capacity, the signature and capacity must be guaranteed by an Eligible
Guarantor. Certain other legal documentation may be required. For more
information regarding proper documentation, telephone the Fund.
We will verify that the shares being redeemed were purchased more than
15 days earlier or were purchased by wire and represent an amount
sufficient to cover the amount being redeemed.
Normally a check will be mailed to the name(s) and address in which
the account is registered, or otherwise according to your instruction,
within one business day after receipt of your redemption request. The
Fund reserves the right to make payment within three business days.
EXPEDITED PROCEDURE. To be
eligible for this procedure, you must have filled out the "Expedited Telephone
Redemption" section of your Application Form. To verify whether the expedited
telephone redemption privilege is in place on an account, or to request an
Application Form to add it, or to change information for an existing account,
call your investment professional or the Fund.
Telephone the Fund at 800-821-5129 and ask for "Expedited
Redemptions." All proceeds will be paid to the same bank account
designated on your Application Form.
Amounts of $1,000 or more normally will be wired to the designated account on
the same day if your order is accep-ted before 12 noon Eastern Standard
Time or on the next business day if accepted after such time.
<PAGE>
Amounts of less than $1,000 normally will be
mailed by check on the next business day after your order is accepted.
To receive the dividend for the same day you sell, your
redemption order must be accepted after 12 noon Eastern Standard Time.
The Fund will not be liable for following instructions communicated by
telephone that it reasonably believes to be genuine.
CHECKWRITING. To be eligible for this privilege, you must have
filled out the "Checkwriting" section of your Application Form. To verify
whether the
checkwriting privilege is in place on an account, or to request an
Application Form to add it to an existing account, call your
investment professional or the Fund. You can write a check for no less
than $500 and no more than $5,000,000. Shares in an account of a
different class than those in the account on which the check is drawn
will not be redeemed to cover the check.
This privilege should not be used to close an account because you
earn dividends until the check clears.
To determine if a CDSC applies to a redemption, the Fund
redeems shares in the following order:
1 shares acquired by
reinvestment of dividends and capital gains;
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 purchase (Class
B) or before the first anniversary of their purchase (Class C).
NET ASSET VALUE. The net asset value of each class of shares is calculated
at 12 noon and 2 p.m. Eastern Standard Time each day that the NYSE is
open for trading. Securities are valued at cost plus (minus) amortized
discount (premium), if any, pursuant to the requirements for money
market funds.
DIVIDENDS, TAXES AND YIELD
DIVIDENDS. Our net income
will be declared as a dividend to shareholders of record as of 12 noon
Eastern Standard Time on each day the NYSE is open for trading. Unless
you elect to receive cash, dividends will be reinvested in additional
shares on the monthly reinvestment date. If you elect cash, a check
will be mailed to you as soon as possible after the reinvestment date
or, if you arrange for direct deposit, your payment will be
electronically transferred directly to your bank account within two
days after the payable date.
If you redeem your entire account, all
dividends declared to the time of redemption will be paid to you.
TAXES. The Fund pays no federal income tax on the earnings it
distributes to shareholders. Consequently, dividends you receive from
the Fund, whether reinvested or taken in cash, are generally
considered taxable. Dividends declared in 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.
Each January you should receive, if applicable, a Form
1099 tax information statement detailing your dividends and their
federal tax category. You should consult your tax adviser concerning
applicable state and local taxes.
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 if the payee failed to provide a correct
taxpayer identification number or to make certain required
certifications.
For more information about the tax consequences from
dividends and distributions, see the Statement of Additional
Information.
YIELD. The Fund's "yield" refers to the income generated
by an investment in the Fund over a seven-day period, which is then
annualized. The "effective yield" is calculated similarly but, when
annualized, the income earned is assumed to be reinvested and will
therefore be slightly higher. Both yield figures are based on
historical earnings and are not intended to indicate future
performance.
For the seven-day period ending June 30, 1998, the Class
A, B and C share yields were 4.59%, 3.84% and 4.59%, respectively. For
the same period, the effective yields for Class A, B and C shares were
4.70%, 3.92% and 4.70%, respectively. On that day, the portfolio's
dollar-weighted life to maturity was 33 days.
<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 bank deposits and other investments that pay
a fixed yield for a stated period of time or with other investment
companies which may use a different method of computing yield.
OUR MANAGEMENT
The Fund is supervised by a board of directors, an independent body which has
ultimate responsibility for the Fund's activities. The board has retained
Lord Abbett as investment manager pursuant to a Management Agreement. Lord
Abbett has been an investment manager for over 69 years and currently
manages approximately $26 billion in a family of mutual funds and other
advisory accounts. Lord Abbett provides services to thirty-six mutual fund
portfolios having various investment objectives and also advises other
investment clients. For more information about the services Lord Abbett
provides to the Fund, see the Statement of Additional Information.
The Fund pays Lord Abbett a monthly fee based on average daily net assets for
each month. For the fiscal year ended June 30, 1998, the fee paid to Lord
Abbett was at an annual rate of 0.50 of 1%. In addition, the Fund pays all
expenses not expressly assumed by Lord Abbett.
The services provided to the Fund and its shareholders by Lord Abbett, Lord
Abbett Distributor, the Fund's transfer agent and the Fund's custodian
depend on the proper functioning of their computer systems and those of
their outside service providers. Many computer systems, and many imbedded
microprocessors now in use cannot distinguish between the year 2000 and the
year 1900, an inability that could disrupt the services provided to the
Fund. Lord Abbett, Lord Abbett Distributor, the Fund's transfer agent and
the Fund's custodian all have advised the Fund that they have been actively
working on changes to their computer systems to prepare for the year 2000
and expect that their systems, and those of their outside service
providers, will be adapted in time. However, because the year 2000 problem
is unprecedented, there can be no assurance that they will be successful.
Neither can there be any assurance that their services will not be impaired
by interactions with other computer systems that have not been adapted for
the year 2000.
In addition, it is possible that the markets for securities in
which the Fund invests may be detrimentally affected by computer and
microprocessor failures throughout the financial services industry
beginning January 1, 2000. Also, corporate and governmental data
processing errors may result in problems for individual companies and
may create overall economic uncertainties. Accordingly, the Fund's
investments may be adversely affected.
THE FUND. The Fund is a diversified open-end management investment company
established in 1979. Its Class A, B and C shares have equal rights as to
voting, dividends, assets and liquidation except for differences resulting
from certain class-specific expenses.
FUND PERFORMANCE During the past fiscal year which ended on June 30, 1998, we
sought investments that provided the highest yield, while attempting to
maintain the average maturity at approximately 30 days. In an effort to
preserve capital and maintain liquidity, we invested only in high-quality
U.S. Government Agency discount notes.
Your Fund's management team continues to focus on those areas we believe will
produce the highest available yields.
GLOSSARY OF TERMS
ELIGIBLE FUND: Any Lord
Abbett-sponsored fund, including "AAMF" (i.e., any authorized
institution's affiliated money market fund satisfying Lord Abbett
Distributor as to certain omnibus account and other criteria) except:
Lord Abbett Equity Fund, Lord Abbett Series Fund and 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.
ELIGIBLE
GUARANTOR: Any member bank or broker that is a member of the medallion
stamp program.
ELIGIBLE MANDATORY DISTRIBUTIONS: If Class B shares
represent a part of an individual's total IRA or 403(b) investment,
the CDSC waiver is available only for that portion of a mandatory
distribution which bears the same relation to the entire mandatory
distribution as the B share investment bears to the total investment.
HIGH-QUALITY, SHORT-TERM SECURITIES: These securities include: (1)
Bank 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;
<PAGE>
(2) Commercial Paper (short-term unsecured promissory
notes of corporations, including variable amount master demand notes)
which at the date of investment are 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, are issued by companies having
outstanding debt rated AAA or AA by S&P or Aaa or Aa by Moody's; and
(3) 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.
U.S. GOVERNMENT SECURITIES,
AGENCIES AND 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.
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.
Investment Manager and Distributor
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, Transfer Agent and Dividend
Disbursing Agent
United Missouri Bank of Kansas City, N.A.
Tenth and Grand
Kansas City, Missouri 64141
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419576
Kansas City, Missouri 64141 800-821-5129 Auditors Deloitte & Touche LLP Counsel
Debevoise & Plimpton Printed in the U.S.A.
LAMM-1-1198
(11/98)
November 1, 1998
PROSPECTUS
Lord Abbett
U.S. Government
Securities Money
Market Fund, Inc.
<PAGE>
Statement of Additional Information November 1, 1998
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 November 1, 1998.
Lord Abbett U.S. Government Securities Money Market Fund, Inc. (sometimes
referred to as "we" or the "Fund") has 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. Class A and B shares may be purchased directly
and may be acquired in exchange for shares of the same class of another Lord
Abbett- sponsored fund. Class C shares may be acquired only in exchange from
shares of the same class of another Lord Abbett-sponsored fund. 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 Policies 2
2. Yield Calculation 3
3. Directors and Officers 4
4. Investment Advisory and Other Services 8
5. Portfolio Transactions 9
6. Net Asset Value and Dividends 9
7. Telephone Exchange Privilege and Rule 12b-1 Plans 9
8. Class B Share Conversion Feature 11
9. Shareholder Programs and Retirement Plans 11
10. Commercial Paper and Bond Ratings 12
11. Taxes 14
12. Further Information About the Fund 14
13. Financial Statements 15
<PAGE>
1.
Investment Policies
FUNDAMENTAL INVESTMENT RESTRICTIONS
We are subject to the following investment restrictions which cannot be changed
without approval of a majority of our outstanding shares. 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 33 1/3% of its total assets (including the amount
borrowed), 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.
OTHER INVESTMENT POLICIES
U.S. GOVERNMENT OBLIGATIONS. 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. 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. 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. Repurchase agreements are instruments 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. These result in fixed rates of return
insulated from market fluctuation during such period. The underlying securities
will consist only of securities in which the Fund 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, the Fund 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. An
example follows for the seven-day period ended June 30, 1998 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 $ 1.000880274
Net change in account value $ .000880274
Base period return (net change in
account value divided by the
beginning account value) .0880274%
"Yield" [base period return
times (365 divided by 7)] 4.59%
"Effective yield" [(base period
return + 1) 365/7] - 1 4.70%
On June 30, 1998, our portfolio had a dollar-weighted life to maturity of 33
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 Act, and as such, may be considered to have indirect
financial interests in the Rule 12b-1 Plan described in the Prospectus.
Robert S. Dow, age 53, Chairman and President
The following outside trustees are also directors or trustees of some or all of
the twelve other Lord Abbett-sponsored funds referred to above.
E. Thayer Bigelow
Courtroom Television Network
600 Third Avenue
New York, New York
Formerly President and Chief Executive Officer of Time Warner Cable
Programming, Inc. Prior to that, formerly President and Chief Operating Officer
of Home Box Office, Inc. Age 57.
William H. T. Bush
Bush-O'Donnell & Co., Inc.
101 South Hanley Road, Suite 1025
St. Louis, Missouri
Co-founder and Chairman of the Board of financial advisory firm of
Bush-O'Donnell & Company. Age 60.
Robert B. Calhoun
Monitor Clipper Partners
650 Madison Avenue, 9th Floor
New York, New York
Managing Director of Monitor Clipper Partners and President of The Clipper Group
L.P., both private equity investment funds. Age 57.
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 67.
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a
proxy tabulating firm. Age 72.
C. Alan MacDonald
Directorship, Inc.
8 Sound Shore Drive
Greenwich, Connecticut
Managing Director of Directorship Inc., a consultancy in board management and
corporate governance. Formerly General Partner of The Marketing Partnership,
Inc., a full service marketing consulting firm (1994 - 1997). Prior to that,
Chairman and Chief Executive Officer of Lincoln Snacks, Inc., manufacturer of
branded snack foods (1992 - 1994). His career spans 36 years at Stouffers and
Nestle with 18 of the years as Chief Executive Officer. Currently serves as
Director of DenAmerica Corp., J.B. Williams Company, Inc., Fountainhead Water
Company and Exigent Diagnostics. Age 65.
Hansel B. Millican, Jr.
President & CEO
The Rochester Button Co.
1328 Broadway (Suite 816)
New York, New York 10001
President and Chief Executive Officer of Rochester Button Company. Age 70.
Thomas J. Neff
Spencer Stuart
277 Park Avenue
New York, New York
Chairman of Spencer Stuart, an executive search consulting firm. Currently,
serves as Director of Ace Ltd. (NYSE). Age 61.
The second column of the following table sets forth the compensation accrued for
the Fund's outside directors. The third column sets forth information with
respect to the equity-based benefits accrued for outside directors by the Lord
Abbett-sponsored funds. The fourth 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.
For the Fiscal Year Ended June 30, 1998
(1) (2) (3) (4)
For Year Ended
Equity-Based December 31, 1997
Benefits Accrued Total Compensation
Aggregate by the Fund and Accrued by the Fund
Compensation all other Lord and all other Lord
Accrued by Abbett-sponsored Abbett-sponsored
Name of Director the Fund1 Funds2
Funds3
E. Thayer Bigelow $461 $17,068 $56,000
William H. T. Bush* None None None
Robert B. Calhoun** $49 None None
Stewart S. Dixon $450 $32,190 $55,000
John C. Jansing $448 $45,0854 $55,000
C. Alan MacDonald $459 $30,703 $57,400
Hansel B. Millican, Jr. $448 $37,747 $55,000
Thomas J. Neff $455 $19,853 $56,000
* Elected director, June 17, 1998, effective as of August 13, 1998.
** Elected director, May 5, 1998, effective as of June 17, 1998.
1.Outside directors' fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored funds based on the
net assets of each fund. A portion of the fees payable by the Fund to its
outside directors/trustees is being deferred under a plan that deems the
deferred amounts to be invested in shares of the Fund for later distribution
to the directors/trustees so that each trustee's compensation depends in part
on the performance of the Fund.
2.The amounts in Column 3 were accrued by the Lord Abbett-sponsored Funds for
the 12 months ended June 30, 1998 with respect to the equity based plans
established for independent directors/trustees in 1996. This plan supercedes
a previously approved retirement plan for all future directors/trustees.
Current directors had the option to convert their accrued benefits under the
retirement plan. All of the outside directors except one made such an
election. Each plan also provides for a pre-retirement death benefit and
actuarially reduced joint-and-survivor spousal benefits.
3. This column shows aggregate compensation, including directors 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, 1997. The amounts of the aggregate compensation payable by
the Fund as of June 30, 1998 deemed invested in Fund shares, including
dividends reinvested and changes in net asset value applicable to such deemed
investments, were: Mr. Bigelow, $2,245; Mr. Calhoun, $49; Mr. Dixon, $10,788;
Mr. Jansing, $25,182; Mr. MacDonald, $9,993; Mr. Millican, $25,566 and Mr.
Neff, $25,796. If the amounts deemed invested in Fund shares were added to
each director's actual holdings of Fund shares as of June 30, 1998, each
would own the following: Mr. Bigelow, 0 shares; Mr. Dixon, 769.690 shares;
Mr. Jansing, 0 shares; Mr. MacDonald, 1,149.820 shares; Mr.
Millican, 0 shares; and Mr. Neff, 2,303.480 shares.
4. Mr. Jansing chose to continue to receive benefits under the retirement plan,
which provides that outside directors/ trustees may receive annual retirement
benefits for life equal to their final annual retainer following retirement
at or after age 72 with at least ten years of service. Thus, if Mr. Jansing
were to retire and the annual retainer payable by the funds were the same as
it is today, he would receive annual retirement benefits of $50,000.
Except where indicated, the following executive officers of the Fund have been
associated with Lord Abbett for over five years. Of the following, Messrs.
Brown, Carper, Gerber, Hilstad, Morris, and Walsh are partners of Lord Abbett;
the others are employees:
Executive Vice President: Robert Gerber, age 44, Executive Vice President
(with Lord Abbett since July 1997; formerly Senior Portfolio Manager of Sanford
C. Bernstein & Co., Inc.);
Vice Presidents:
Zane E. Brown, age 46
Daniel E. Carper, age 46
Paul A. Hilstad, age 55, Vice President and Secretary (with Lord Abbett since
1995; formerly Senior Vice President and General Counsel of American Capital
Management & Research, Inc.)
Lawrence Kaplan, age 41, (with Lord Abbett since 1997 - formerly Vice President
and Chief Counsel of Salomon Brothers Asset Management Inc from 1995 to 1997,
prior thereto Senior Vice President, Director and General Counsel of Kidder
Peabody Asset Management, Inc.)
Thomas F. Konop, age 56
Robert G. Morris, age 53
A. Edward Oberhaus, III, age 38
Keith O'Connor, age 43
John J. Walsh, age 60
Treasurer:
Donna M. McManus, age 37, Treasurer (with Lord Abbett since 1996, formerly a
Senior Manager at Deloitte & Touche LLP)
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, 1998, 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. Seven of the seventeen general partners of Lord
Abbett are officers and/or directors of the Fund and are identified as follows:
Zane E. Brown, Daniel E. Carper, Robert S. Dow, Robert I. Gerber, Paul A.
Hilstad, Robert G. Morris, and John J. Walsh.
The other general partners who are neither officers/nor directors of the
Fund are Stephen Allen, John E. Erard, Robert P. Fetch, Daria L. Foster, W.
Thomas Hudson, Stephen J. McGruder, Michael B. McLaughlin, Robert J. Noelke, R.
Mark Pennington, and Christopher J. Towle. 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 .50 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 .40
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, 1998, 1997 and 1996, the management fees
paid to Lord Abbett amounted to $740,978, $773,869, and $748,926, respectively.
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 may be
officers of the Fund and are 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 "Redemptions" - 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, Martin Luther King, Jr.
Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
We attempt to maintain a net asset value of $1.00 per share for all classes 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 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.
DIVIDENDS. As described in the Prospectus under "Dividends, Taxes and Yield,"
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 any class 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
(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 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. Class A
and B shares of the Fund may be acquired either by such an exchange or by direct
purchase.
You or your investment professional, 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 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. Class A shares
purchased directly from the Fund may be exchanged for Class A, B or C shares of
an eligible Lord Abbett-sponsored fund. 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 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 the appropriate 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.
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, regardless of
whether this increase is reflected in reinvested dividends or distributions, in
the case of Class A shares, and due to such an increase because of reinvested
dividends and capital gains, in the case of Class B and C shares, (ii) shares
with respect to which no Lord Abbett fund paid a 12b-1 fee 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.
Class B Share Conversion Feature
The conversion of Class B shares on the eighth anniversary of their purchase is
subject to the continuing availability of a private letter ruling from the
Internal Revenue Service, or an opinion of counsel or tax advisor, to the effect
that the conversion of Class B shares does not constitute a taxable event for
the holder under Federal income tax law. If such revenue ruling or opinion is no
longer available, the automatic conversion feature may be suspended, in which
event no further conversions of Class B shares would occur while such suspension
remained in effect. Although Class B shares could then be exchanged for Class A
shares on the basis of relative net asset value of the two classes, without the
imposition of a sales charge or fee, such exchange could constitute a taxable
event for the holder.
9.
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.
DIV-MOVE. Under the Div-Move service described in the Prospectus, you can invest
the dividends paid on your account into an existing account in any other
Eligible Fund. The account must be either your account, a joint account for you
and your spouse, a single account for your spouse, or a custodial account for
your minor child under the age of 21. You should read the prospectus of the
other fund before investing.
INVEST-A-MATIC. 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.
SYSTEMATIC WITHDRAWAL PLAN. 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 the current net
asset value of your account at the time your SWP is established. 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. The SWP may be
terminated by you or by us at any time by written notice.
RETIREMENT PLANS. 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 Traditional, Education, Roth, Simplified Employee
Pension Plans and Simple IRA's), 403(b) plans and qualified pension and
profit-sharing plans, including 401(k) plans. The forms 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.
REDEMPTIONS. A redemption order is in proper form when it contains all of the
information and documentation required by the order form or supplementally by
Lord Abbett Distributor or the Fund to carry out the order. The signature(s) and
any legal capacity of the signer(s) must be guaranteed by an eligible guarantor.
See the Prospectus for expedited redemption procedures.
The right to redeem and receive payment, as described in the Prospectus, may be
suspended if the NYSE is closed (except for weekends or customary holidays),
trading on the NYSE is restricted or the Securities and Exchange Commission
deems an emergency to exist.
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.
10.
Commercial Paper and Bond Ratings
Commercial Paper Ratings
The rating A-1+ is the highest commercial paper rating assigned by Standard &
Poor's Corporation ("S&P"). Paper rated A-1 has the following characteristics:
Liquidity ratio is adequate to meet cash requirements; long-term senior debt is
rated A or better; the issuer has access to diverse channels of borrowing; core
earnings and cash flow have an upward trend with allowance made for unusual
circumstances; typically, the issuer's industry is well established and the
issuer has a strong position within the industry; the reliability and quality of
management are sound. Those issues determined to possess overwhelming safety
characteristics will be denoted with a plus (+) sign designation.
The rating P-1 is the highest commercial paper rating assigned by Moody's
Investors Service, Inc. ("Moody's"). Among the factors considered by Moody's in
assigning ratings are the following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of parent company
and the relationships which exist with the issuer; and (8) recognition by the
management of obligations which may be present or may arise as a result of
public interest questions and preparations to meet such obligations.
Bond Ratings
MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS
Aaa - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
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 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 or 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 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 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 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 rated B generally lack characteristics of a desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.
Caa - Bonds 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 rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.
C - Bonds 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. The obligor's
capacity to meet its financial commitment on the obligation is extremely strong.
AA - Bonds rated AA differ form the highest rated obligations only in small
degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A - Bonds rated A are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB - Bonds rated BBB exhibit adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation.
BB-B-CCC-CC-C - Obligations rated BB, B, CCC, CC and C are regarded as having
significant speculative characteristics. 'BB' indicates the least degree of
speculation and 'C' the highest. while such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.
D - Obligations rated D is in payment default. The D rating
category is used when interest payments on an obligation are not made on the
date due even if the applicable grace period has not expired, unless Standard &
Poor's believes that such payments will be made during such grace period. The
'D' rating also will be used upon the filing of a bankruptcy petition or the
taking of a similar action if payments on an obligation are jeopardized.
11.
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.
The foregoing discussion relates solely to U.S. federal income tax law as
applicable to United States persons (United States citizens or residents and
United States domestic corporations, partnerships, trusts and estates). Each
shareholder who is not a United States person should consult his tax adviser
regarding the U.S. and foreign tax consequences of the ownership of shares of
the Fund, including a 30% (or lower treaty rate) United States withholding tax
on dividends representing ordinary income and net short-term capital gains, and
the applicability of United States gift and estate taxes to non-United States
persons who own Fund shares.
12.
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.
13.
Financial Statements
The financial statements for the fiscal year ended June 30, 1998 and the report
of Deloitte & Touche LLP, independent auditors, on such financial statements
contained in the 1998 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.
