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]
Pre-Effective Amendment No.
Post-Effective Amendment No. 25 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]
OF 1940
Amendment No. 25 [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
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Address of Principal Executive Office
Registrant's Telephone Number (212) 848-1800
--------------------------------------------
Lawrence H. Kaplan, Vice President & Assistant 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)
- ------- on (date) pursuant to paragraph (b)
- ------- 60 days after filing pursuant to paragraph (a) (1)
X on November 1, 1999 pursuant to paragraph (a) (1)
- -------
- ------- 75 days after filing pursuant to paragraph (a) (2)
- ------- 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.
Prospectus
November 1, 1999
[LOGO]
As with all mutual funds, the Securities and Exchange Commission does
not guarantee that the information in this prospectus is accurate or
complete, and it has not judged this fundfor investment merit. It is a
criminaloffense to state otherwise.
<PAGE>
TABLE OF CONTENTS
The Fund Page
What you should know Goal/Strategy 2
about the fund Main Risks 2
Past Performance 3
Fees and Expenses 3
Your Investment
Information for managing Purchases 4
your fund account Opening Your Account 6
Redemptions 6
Distributions and Taxes 7
Services For Fund Investors 8
Sales Charges and Service Fees 9
Management 9
For More Information
How to learn more Other Investment Techniques 10
about the fund Glossary of Shaded Terms 10
Financial Information
Financial Highlights 12
Compensation For Your Dealer 13
How to learn more about the Back Cover
fund and other Lord Abbett funds
<PAGE>
GOAL /STRATEGY
The fund seeks high current income and preservation of capital through
investments in high quality, short-term, liquid securities. Currently, the
fund is 100% invested in U. S. government securities or securities of its
agencies or instrumentalities. However, the fund is permitted to invest at
least 65% of its total assets in U. S. government securities, agencies and
instrumentalities; and up to 35% of its total assets in other high-quality
short-term securities.
Other high-quality, short-term debt securities include:
o 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
o Commercial paper (short-term unsecured promissory notes of
corporations) 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
o Corporate debt securities (bonds and debentures) with no more than 12
months remaining to mature and rated AAA or AA by S& P or Aaa or Aa by
Moody's
We seek to maintain a stable net asset value of $1.00 per share by
investing in assets that present minimal credit risk, maintaining an
average weighted maturity of 90 days or less, and investing all of the
fund's assets in securities or other instruments maturing in 397 days or
less.
MAIN RISKS
Although the fund invests in U. S. government securities which are
considered to be among the highest-quality investments available and has
maintained a constant share price, there are risks associated with
investing in this fund.
These risks include:
o the possibility that the issuer of a particular security may be unable
to make principal and interest payments when they are due
o the possibility that a security will lose value because of a rise in
interest rates, or
Therefore, the yield paid by the fund will vary with changes in the market
and changes in interest rates. There is a remote risk that the fund's share
price could fall below $1.00, which would reduce the value of your account.
An investment in the fund is not a bank deposit. It is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in
the fund.
We or the fund refers to Lord Abbett U. S. Government Securities Money Market
Fund, Inc., which operates under the supervision of its Board with the advice of
Lord, Abbett & Co. (" Lord Abbett"), its investment manager.
About the fund. This fund is a professionally managed portfolio primarily
holding securities purchased with the pooled money of investors. It strives to
reach its stated goal, although as with all mutual funds, it cannot guarantee
results.
U. S. government securities are obligations issued or guaranteed as to principal
and interest by the U. S. government, its agencies or instrumentalities that are
supported by the full faith and credit of the United States.
U. S. government agency securities are debt securities issued or guaranteed as
to principal and interest by U. S. government agencies, U. S. government
enterprises and U. S. government instrumentalities that are not direct
obligations of the United States.
Certificates of deposit are certificates issued funds deposited in a bank or
savings and loan associations for a definite period of time, earn a specified
rate and are negotiable.
Banker's acceptance are short-term credit instruments used to finance the
import, export, transfer or storage of goods. They are termed "accepted" when a
bank guarantees their payment at maturity.
You should read this entire prospectus, including "Other Investment Techniques,"
which concisely describes the other investment strategies, and their risks, used
by the fund.
2 The Fund
<PAGE>
Symbols: Class A -LACXX
PAST PERFORMANCE
The information below provides some indication of the risks of investing in
the fund by showing changes in the fund's class A shares' performance from
calendar year to calendar year. The returns shown do not reflect fund fees
and expenses. The deduction of such fees and expenses (and the compounding
effect thereof over time) may reduce the investors' return. Past
performance is not a prediction of future results.
Best Quarter: 1st Q'91 29.96%
Worst Quarter: 3rd Q'90 (24.62)%
[GRAPHIC OMITTED]
For the fund's current yield, call toll-free 1-800-426-1130.
The table below shows the fund's class A, B and C average annual total returns.
Fund returns assume reinvestment of dividends and distributions and payment of
the maximum applicable front-end or deferred sales charge. All periods end on
December 31, 1998.
Class 1 Year 5 Years 10 Years Inception (i)
A 2.00% 20.32% 16.48% 12.53
- --------------------------------------------------------------------------------
B 3.20% - - 19.84%
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C 7.57% - - 21.42%
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(i) The dates of inception of each class are: A -6/27/79, B -8/1/96 and C
-7/15/96.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
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Fee table
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Shareholder Fees Class A Class B Class C
(Fees paid directly from your investment)
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Maximum Sales Charge on Purchases
- --------------------------------------------------------------------------------
(as a % of offering price) none none none
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Maximum Deferred Sales Charge (See "Purchases") none 5.00% (1) none
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Annual Fund Operating Expenses
(Expenses deducted from fund assets) (as a % of average net assets)
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Management Fees (See "Management") 0.50% 0.50% 0.50%
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Distribution and Service (12b-1) Fees (2)(3) none 0.75% none
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Other Expenses 0.00% 0.00% 0.00%
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Total Operating Expenses 0.00% 0.00% 0.00%
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Expense example
- --------------------------------------------------------------------------------
This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment at maximum sales charge, if any, 5% total return each year and no
changes in expenses. You pay the following expenses over the course of each
period shown if you sell your shares at the end of the period, although your
actual cost may be higher or lower. The expenses include any applicable
contingent deferred sales charges.
Share class 1 Year 3 Years 5 Years 10 Years
Class A shares $000 $000 $000 $000
- --------------------------------------------------------------------------------
Class B shares $000 $000 $000 $000
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Class C shares $000 $000 $000 $000
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You would pay the following expenses on the same investment, assuming you kept
your shares.
Class A shares $000 $000 $000 $000
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Class B shares $000 $000 $000 $000
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Class C shares $000 $000 $000 $000
- --------------------------------------------------------------------------------
This example is for comparison and is not a representation of the fund's actual
expenses or returns, either past or present.
Management fees are payable to Lord Abbett for the fund's investment management.
12b-1 fees refer to fees incurred for activities that are primarily intended to
result in the sale of fund shares and service fees for shareholder account
service and maintenance.
Other expenses include fees paid for miscellaneous items such as shareholder
services and professional fees.
(1) Class B shares will convert to class A shares on the eighth anniversary of
your original purchase of class B shares.
(2) The Distribution and Service Fees have been restated from fiscal year
amounts to reflect current fees.
(3) Because 12b-1 distribution fees are paid out on an ongoing basis, over time
they will increase the cost of your investment and may cost you more than
paying other types of sales charges.
The Fund 3
<PAGE>
PURCHASES
This prospectus offers four classes of shares, class A, B and C. Although
the fund has more than one class of shares, these different classes of
shares represent investments in the same portfolio of securities but are
subject to different sales charges and expenses. Our shares are
continuously offered. The offering price is based on the Net Asset Value
(NAV) per share next determined after we receive your purchase order
submitted in proper form. A front-end sales charge is added to the NAV in
the case of the class A shares. There is no front-end sales charge,
although there is a Contingent Deferred Sales Charge in the case of the
class B and C shares as described below.
You should read this section carefully to determine which class of shares
represents the best investment option for your particular situation. It may
not be suitable for you to place a purchase order for class B shares of
$500,000 or more, or a purchase order for class C shares of $1,000,000 or
more. Class C shares may be purchased only by an exchange from the same
class of another Lord Abbett sponsored fund. You should discuss pricing
options with your investment professional.
For more information, see "Alternative Sales Arrangements" in the Statement
of Additional Information.
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 or change minimum investment requirements. All purchase orders are
subject to our acceptance and are not binding until confirmed or accepted
in writing.
- --------------------------------------------------------------------------------
Front-End Sales Charges - Class A Shares
- --------------------------------------------------------------------------------
To Compute
As a % of As a % of Offering Price
Your Investment Offering Price Your Investment Divide NAV by
- --------------------------------------------------------------------------------
Less than $50,000 5.75% 6.10% .9425
- --------------------------------------------------------------------------------
$50,000 to $99,999 4.75% 4.99% .9525
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$100,000 to $249,999 3.75% 3.90% .9625
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$250,000 to $499,999 2.75% 2.83% .9725
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$500,000 to $999,999 2.00% 2.04% .9800
- --------------------------------------------------------------------------------
$1,000,000 and over No Sales Charge 1.0000
- --------------------------------------------------------------------------------
Reducing Your Class A Front-End Sales Charges. Class A shares may be
purchased at a discount if you qualify under either of the following
conditions:
o Rights of Accumulation - A Purchaser can apply the value (at public
offering price) of the shares you already own to a new purchase of
class A shares of any Eligible Fund in order to reduce the sales
charge.
o Statement of Intention - A Purchaser of class A shares can purchase
additional shares of any Eligible Fund over a 13-month period and
receive the same sales charge as if you had purchased all shares at
once. Shares purchased through reinvestment of dividends or
distributions are not included. A statement of intention can be
backdated 90 days. Current holdings under rights of accumulation can
be included in a statement of intention.
NAV per share for each class of fund shares is calculated each business day at
the close of regular trading on the New York Stock Exchange (NYSE). Each fund is
open on those business days when the NYSE is open. Purchases and sales of fund
shares are executed at the NAV next determined after the fund receives your
order. In calculating NAV, securities for which market quotations are available
are valued at those quotations. Securities for which such quotations are not
available are valued at fair value under procedures approved by the Board.
Share classes
Class A
o normally offered with a frontend sales charge
Class B
o no front-end sales charge, however, a contingent deferred sales charge is
applied to shares sold prior to the sixth anniversary of purchase
o higher annual expenses than class A shares
o automatically convert to class A shares after eight years
Class C
o no front-end sales charge
o higher annual expenses than class A shares
o a contingent deferred sales charge is applied to shares sold prior to the
first anniversary of purchase
o acquired by exchange only
For more information on eligibility for these privileges, read the
applicable sections in the attached application.
4 Your Investment
<PAGE>
Class A Share Purchases Without A Front-End Sales Charge. Class A shares may be
purchased without a front-end sales charge under any of the following
conditions:
o purchases of $1 million or more +
o purchases by Retirement Plans with at least 100 eligible employees +
o purchases under a Special Retirement Wrap Program +
o purchases made with dividends and distributions on class A shares of
another Eligible Fund
o purchases representing repayment under the loan feature of the Lord
Abbettsponsored prototype 403(b) Plan for class A shares
o purchases by employees of any consenting securities dealer having a sales
agreement with Lord Abbett Distributor
o purchases under a Mutual Fund Advisory Program
o purchases by trustees or custodians of any pension or profit sharing plan,
or payroll deduction IRA for employees of any consenting securities dealer
having a sales agreement with Lord Abbett Distributor
See the Statement of Additional Information for a listing of other categories of
purchasers who qualify for class A share purchases without a front-end sales
charge.
+ These categories may be subject to a Contingent Deferred Sales Charge ("
CDSC").
Class A Share CDSC. If you buy class A shares under one of the starred (+)
categories listed above and you redeem any of them within 24 months after the
month in which you initially purchased them, the fund normally will collect a
CDSC of 1%.
The class A share CDSC generally will be waived for the following conditions:
o benefit payments under Retirement Plans such as loans, hardship
withdrawals, death, disability, retirement, separation from service or any
excess distribution under Retirement Plans (documentation may be required)
o redemptions continuing as investments in another fund participating in a
Special Retirement Wrap Program
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
declines the longer you own your shares, according to the following schedule:
Contingent Deferred Sales Charges -Class B Shares
- --------------------------------------------------------------------------------
Anniversary (1) of Contingent Deferred Sales Charge
the day on which the on redemption (as % of amount
purchase 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 6th (2) None
- --------------------------------------------------------------------------------
(1) The anniversary is the same calendar day in each respective year after the
date of purchase. For example, the anniversaries for shares purchased on
May 1 will be May 1 of each succeeding year.
(2) Class B shares will automatically convert to class A shares on the eighth
anniversary of the purchase of class B shares.
CDSC, regardless of class, is not charged on shares acquired through
reinvestment of dividends or capital gains distributions and is charged on the
original purchase cost or the current market value of the shares at the time
they are being sold, whichever is lower. In addition, repayment of loans under
Retirement Plans and 403(b) Plans will constitute new sales for purposes of
assessing the CDSC.
To minimize the amount of any CDSC, the fund redeems shares in the following
order:
1. shares acquired by reinvestment of dividends and capital gains (always free
of a CDSC)
2. shares held for six years or more (class B) or two years or more after the
month of purchase (class A) or one year or more (class C)
3. shares held the longest before the sixth anniversary of their purchase
(class B) or before the second anniversary after the month of purchase
(class A) or before the first anniversary of their purchase (class C)
Retirement Plans include employersponsored retirement plans under the Internal
Revenue Code, excluding Individual Retirement Accounts.
Lord Abbett Distributor LLC (" Lord Abbett Distributor") acts as agent for the
funds to work with investment professionals that buy and/or sell shares of the
funds on behalf of their clients. Generally, Lord Abbett Distributor does not
sell fund shares directly to investors.
Benefit Payment Documentation.
(class A CDSC only)
o under $50,000 - no documentation necessary
o over $50,000 - reason for benefit payment must be received in writing. Use
the address indicated under "Opening Your Account."
Your Investment 5
<PAGE>
The class B share CDSC generally will be waived under any one of the following
conditions:
o benefit payments under Retirement Plans such as loans, hardship
withdrawals, death, disability, retirement, separation from service or any
excess contribution or distribution under Retirement Plans
o Eligible Mandatory Distributions under 403(b) Plans and individual
retirement accounts
o death of the shareholder (natural person)
o redemptions of shares in connection with Div-Move and Systematic Withdrawal
Plans (up to 12% per year)
See "Systematic Withdrawal Plan" under "Services For Fund Investors" below for
more information on CDSCs with respect to class B shares.
Class C Share CDSC. The 1% CDSC for class C shares normally applies if you
redeem your shares before the anniversary of the purchase of such shares.
OPENING YOUR ACCOUNT
MINIMUM INITIAL INVESTMENT
o Regular account (Class A) $1,000
(Class B) $5,000
o Individual Retirement Accounts and
403(b) Plans under the Internal Revenue Code (Class A) $250
(Class B) $2,000
o Uniform Gifts to Minors Account $250
For Retirement Plans and Mutual Fund Advisory Programs, no minimum
investment is required, regardless of share class.
You may purchase shares through any independent securities dealer who has a
sales agreement with Lord Abbett Distributor or you can fill out the
attached application and send it to the fund at the address stated below.
You should carefully read the paragraph below entitled "Proper Form" before
placing your order to assure your order will be accepted.
Lord Abbett
U. S. Government Securities Money Market Fund, Inc.
P. O. Box 419100
Kansas City, MO 64141
Proper Form. An order submitted directly to the fund must contain: (1) a
completed application, and (2) payment by check. When purchases are made by
check, redemptions will not be allowed until the fund or transfer agent is
advised that the check has cleared, which may take up to 15 calendar days.
For more information regarding proper form of a purchase order, call the
fund at 800-821-5129.
By Exchange. Telephone the fund at 800-821-5129 to request an exchange from
any eligible Lord Abbett-sponsored fund.
REDEMPTIONS
By Broker. Call your investment professional for directions on how to
redeem your shares.
By Telephone. To obtain the proceeds of a redemption of $50,000 or less
from your account, you or your representative can call the fund at
800-821-5129.
Important Information. You may be subject to a $50 penalty under the Internal
Revenue Code if you do not provide a correct taxpayer identification number
(Social Security Number for individuals) or make certain required
certifications. In addition, we may be required to withhold from your account
and pay to the U. S. Treasury 31% of any redemption proceeds and of any dividend
or distribution from your account.
Small Accounts. Our Board may authorize closing any account in which there are
fewer than 25 shares if it is in a fund's best interest to do so.
6 Your Investment
<PAGE>
By Mail. Submit a written redemption request indicating the name(s) in
which the account is registered, the fund's name, the class of shares, your
account number, and the dollar value or number of shares you wish to sell.
Include all necessary signatures. 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 call 800-821-5129.
Normally a check will be mailed to the name and address in which the
account is registered (or otherwise according to your instruction) within
three business days after receipt of your redemption request. Your account
balance must be sufficient to cover the amount being redeemed or your
redemption order will not be processed. Under unusual circumstances, the
fund may suspend redemptions, or postpone payment for more than seven days,
as permitted by federal securities laws.
To determine if a CDSC applies to a redemption, see "Class A Share CDSC,""
Class B Share CDSC" or "Class C Share CDSC."
DISTRIBUTIONS AND TAXES
The fund pays its shareholders dividends from its net investment income.
The fund expects to pay such income dividends to shareholders monthly. Your
distributions will be reinvested in your fund unless you instruct the fund
to pay them to you in cash. There are no sales charges on reinvestments.
The tax status of distributions is the same for all shareholders regardless
of how long they have been in the fund and whether distributions are
reinvested or paid in cash. In general, distributions are taxable as
follows:
- --------------------------------------------------------------------------------
Federal Taxability Of Distributions
Type of Tax rate for taxpayer Tax rate for taxpayer subject
distribution subject to 15% bracket to 28% bracket or above
- --------------------------------------------------------------------------------
Income Ordinary Ordinary
dividends income rate income rate
- --------------------------------------------------------------------------------
Except in tax-advantaged accounts, any sale or exchange of fund shares may
be a taxable event.
Annual Information - Information concerning the tax treatment of dividends
and other distributions will be mailed to shareholders each year. The fund
will also provide annually to its shareholders information regarding the
source of dividends paid by the fund. Because everyone's tax situation is
unique, you should consult your tax adviser regarding the treatment of
those distributions under the federal, state and local tax rules that apply
to you as well as the tax consequences of gains or losses from the
redemption or exchange of your shares.
Eligible Guarantor is any broker or bank that is a member of the Medallion STAMP
Program. Most major securities firms and banks are members of this program. A
notary public is not an eligible guarantor.
Taxes on Transactions. The chart at left also can provide a "rule of thumb"
guide for your potential U. S. federal income tax liability when selling or
exchanging fund shares.
Your Investment 7
<PAGE>
SERVICES FOR FUND INVESTORS
AUTOMATIC SERVICES
Buying or selling shares automatically is easy with the services described
below. With each service, you select a schedule and amount, subject to
certain restrictions. You can set up most of these services when filling
out your application or by calling 800-821-5129.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
<S> <C>
For investing
Invest-A-Matic You can make fixed, periodic investments ($ 50 minimum) into your fund
(Dollar-cost account by means of automatic money transfers from your bank checking
averaging) account. See the attached application for instructions.
Div-Move You can automatically reinvest the dividends and distributions from your
account into another account in any Eligible Fund ($ 50 minimum).
For selling shares
Systematic You can make regular withdrawals from most Lord Abbett funds. Automatic
Withdrawal cash withdrawals can be paid to you from your account in fixed or variable
Plan (" SWP") amounts. To establish a plan, the value of your shares must be at least
$10,000, except for Retirement Plans for which there is no minimum. Your
shares must be in non-certificate form.
Class B shares The CDSC will be waived on SWP 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
SWP 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.
Class B and Redemption proceeds due to a SWP for class B and class C shares will be
C shares redeemed in the order described under "Purchases."
- ---------------------------------------------------------------------------------------------------
</TABLE>
OTHER SERVICES
Telephone Investing. After we have received the attached application
(selecting "yes" under Section 7C and completing Section 7), you can
instruct us by phone to have money transferred from your bank account to
purchase shares of the fund for an existing account. The fund will purchase
the requested shares when it receives the money from your bank.
Exchanges. You or your investment professional can instruct your fund to
exchange shares of any class for shares of the same class of any Eligible
Fund. Instruction may be provided in writing or by telephone, with proper
identification, by calling 800-821-5129. The fund must receive instructions
for the exchange before the close of the NYSE on the day of your call. If
you meet this requirement, you will get the NAV per share of the Eligible
Fund determined on that day. Exchanges will be treated as a sale for
federal tax purposes. Be sure to read the current prospectus for any fund
into which you are exchanging.
Reinvestment Privilege. If you sell shares of the fund, you have a one time
right to reinvest some or all of the proceeds in the same class of any
Eligible Fund within 60 days without a sales charge. If you paid a CDSC
when you sold your shares, you will be credited with the amount of the
CDSC. All accounts involved must have the same registration.
Account Statements. Every Lord Abbett investor automatically receives
quarterly account statements.
Householding. Shareholders with the same last name and address will receive
a single copy of a prospectus and an annual or semi-annual report, unless
additional reports are specifically requested in writing to the fund.
Account Changes. For any changes you need to make to your account, consult
your investment professional or call the fund at 800-821-5129.
Systematic Exchange. You or your investment professional can establish a
schedule of exchanges between the same classes of any Eligible Fund.
Lord Abbett offers a variety of Retirement Plans. Call 800-253-7299 for
information about:
o Traditional, Rollover, Roth and Education IRAs
o Simple IRAs, SEP-IRAs, 401(k) and 403(b) accounts
o Defined Contribution Plans
Telephone Transactions. You have this privilege unless you refuse it in writing.
For your security, telephone transaction requests 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.
Transactions by telephone may be difficult to implement in times of drastic
economic or market change.
Exchange Limitations. Exchanges should not be used to try to take advantage of
short-term swings in the market. Frequent exchanges create higher expenses for
the fund. Accordingly, the fund reserves the right to limit or terminate this
privilege for any shareholder making frequent exchanges or abusing the
privilege. The fund also may revoke the privilege for all shareholders upon 60
days' written notice.
8 Your Investment
<PAGE>
SALES CHARGES AND SERVICE FEES
Sales and Service Compensation. As part of its plan for distributing
shares, the fund and Lord Abbett Distributor pay sales and service
compensation to Authorized Institutions that sell the fund's shares and
service its shareholder accounts.
Sales compensation originates from two sources: sales charges and 12b-1
distribution fees that are paid out of the fund's assets. Service
compensation originates from 12b-1 service fees. The 12b-1 fee rates vary
by share class, according to the Rule 12b-1 Plan adopted by the fund. The
sales charges and 12b-1 fees paid by investors are shown in the
class-by-class information under "Fees and Expenses" and "Purchases." The
portion of these expenses that is paid as sales and service compensation to
Authorized Institutions, such as your dealer, is shown in the chart at the
end of this prospectus. The portion of such sales and service compensation
paid to Lord Abbett Distributor is discussed under "Sales Activities" and
"Service Activities." Sometimes we do not pay sales and service
compensation where tracking data is not available for certain accounts or
where the Authorized Institution waives part of the compensation.
We may pay Additional Concessions to Authorized Institutions from time to
time.
Sales Activities. We may use 12b-1 distribution fees to pay Authorized
Institutions to finance any activity which is primarily intended to result
in the sale of shares. Lord Abbett Distributor uses its portion of the
distribution fees attributable to a fund's class A and class C shares for
activities which are primarily intended to result in the sale of such class
A and class C shares, respectively. These activities include, but are not
limited to, printing of prospectuses and statements of additional
information and reports for other than existing shareholders, preparation
and distribution of advertising and sales material, expenses of organizing
and conducting sales seminars, Additional Concessions to Authorized
Institutions, the cost necessary to provide distribution-related services
or personnel, travel, office expenses, equipment and other allocable
overhead.
Service Activities. We may pay Rule 12b-1 service fees to Authorized
Institutions for any activity which is primarily intended to result in
personal service and/or the maintenance of shareholder accounts. Any
portion of the service fees paid to Lord Abbett Distributor will be used to
service and maintain shareholder accounts.
MANAGEMENT
The fund's investment adviser is Lord, Abbett & Co., 767 Fifth Avenue, New
York, NY 10153-0203. Founded in 1929, Lord Abbett manages one of the
nation's oldest mutual fund complexes, with over $32 billion in more than
35 mutual fund portfolios and other advisory accounts. 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, 1999, the fee paid to
Lord Abbett was at an annual rate of .50 of 1%. In addition, the fund pays
all expenses not expressly assumed by Lord Abbett.
Lord Abbett uses a team of portfolio managers and analysts acting together
to manage the fund's investments. Robert Gerber, Partner of Lord Abbett and
Portfolio Manager of the fund heads the team, the other senior members of
which include Walter H. Prahl and Robert A. Lee. Mr. Gerber joined Lord
Abbett in July 1997 as Director of Taxable Fixed Income. Before joining
Lord Abbett, Mr. Gerber served as a Senior Portfolio Manager at Sanford C.
Bernstein & Co., Inc. since 1992. Mr. Prahl joined Lord Abbett in 1997 as
Director of Quantitative Research, Taxable Fixed Income. Before joining
Lord Abbett, Mr. Prahl served as a Fixed Income Research Analyst at Sanford
C. Bernstein & Co., Inc. since 1994. Mr. Lee joined Lord Abbett in 1997 as
a Fixed Income Portfolio Manager; prior to that he served as a Portfolio
Manager at ARM Capital Advisors since 1995 and an Assistant Portfolio
Manager at Kidder Peabody Asset Management from 1993.
12b-1 fees payable regardless of expenses. The amounts payable by a fund need
not be directly related to expenses. If Lord Abbett Distributor's actual
expenses exceed the fee payable to it, the fund will not have to pay more than
that fee. If Lord Abbett Distributor's expenses are less than the fee it
receives, Lord Abbett Distributor will keep the full amount of the fee.
Your Investment 9
<PAGE>
OTHER INVESTMENT TECHNIQUES
This section describes some of the investment techniques that might be used
by the fund and their risks.
Diversification. The fund will not purchase a security if, as a result,
more than 5% of the fund's total assets would be invested in securities of
a single issuer or the fund would hold more than 10% of the outstanding
voting securities of the issuer. U. S. Government Securities are not
subject to these requirements.
Illiquid Securities. These securities include those that are not traded on
the open market or that trade irregularly or in very low volume. They may
be difficult or impossible to sell at the time and price the fund would
like. The fund may invest up to 10% of its assets in illiquid securities.
Repurchase Agreements. In a repurchase agreement, a fund buys a security at
one price from a broker-dealer or financial institution and simultaneously
agrees to sell the same security back to the same party at a higher price
in the future. If the other party to the agreement defaults or becomes
insolvent, the fund could lose money.
GLOSSARY OF SHADED TERMS
Additional Concessions. Lord Abbett Distributor may, for specified periods,
allow dealers to retain the full sales charge for sales of shares or may
pay an additional concession to a dealer who sells a minimum dollar amount
of our shares and/or shares of other Lord Abbett-sponsored funds. In some
instances, such additional concessions will be offered only to certain
dealers expected to sell significant amounts of shares. Additional payments
may be paid from Lord Abbett Distributor's own resources or from
distribution fees received from a fund and will be made in the form of cash
or, if permitted, non-cash payments. The non-cash payments will include
business seminars at Lord Abbett's headquarters or other locations,
including meals and entertainment, or the receipt of merchandise. The cash
payments may include payment of various business expenses of the dealer.
In selecting dealers to execute portfolio transactions for a fund's
portfolio, if two or more dealers are considered capable of obtaining best
execution, we may prefer the dealer who has sold our shares and/or shares
of other Lord Abbett-sponsored funds.
Authorized Institutions. Institutions and persons permitted by law to
receive service and/or distribution fees under a Rule 12b-1 Plan are
"Authorized Institutions." Lord Abbett Distributor is an Authorized
Institution.
Eligible Fund. An Eligible Fund is any Lord Abbett-sponsored fund except
for (1) certain tax-free, single-state funds where the exchanging
shareholder is a resident of a state in which such a fund is not offered
for sale; (2) Lord Abbett Equity Fund; (3) Lord Abbett Series Fund; (4)
Lord Abbett U. S. Government Securities Money Market Fund (" GSMMF")
(except for holdings in GSMMF which are attributable to any shares
exchanged from the Lord Abbett family of funds). An Eligible Fund also is
any Authori zed Institution's affiliated money market fund satisfying Lord
Abbett Distributor as to certain omnibus account and other criteria.
Eligible Mandatory Distributions. If class B shares represent a part of an
individual's total IRA or 403(b) investment, the CDSC will be waived only
for that part of a manda-
10 For More Information
<PAGE>
tory distribution which bears the same relation to the entire mandatory
distribution as the B share investment bears to the total investment.
Legal Capacity. With respect to a redemption request, if (for example) the
request is on behalf of the estate of a deceased shareholder, John W. Doe,
by a person (Robert A. Doe) who has the legal capacity to act for the
estate of the deceased shareholder because he is the executor of the
estate, then the request must be executed as follows: Robert A. Doe,
Executor of the Estate of John W. Doe. That signature using that capacity
must be guaranteed by an Eligible Guarantor.
Similarly, if (for example) the redemption request is on behalf of the ABC
Corporation by a person (Mary B. Doe) who has the legal capacity to act on
behalf of this corporation, because she is the President of the
corporation, then the request must be executed as follows: ABC Corporation
by Mary B. Doe, President. That signature using that capacity must be
guaranteed by an Eligible Guarantor (see example in right column).
Mutual Fund Advisory Program. Certain unaffiliated authorized brokers,
dealers, registered investment advisers or other financial institutions who
either (1) have an arrangement with Lord Abbett Distributor in accordance
with certain standards approved by Lord Abbett Distributor, providing
specifically for the use of our shares (and sometimes providing for
acceptance of orders for such shares on our behalf ) in particular
investment products made available for a fee to clients of such brokers,
dealers, registered investment advisers and other financial institutions,
or (2) charge an advisory, consulting or other fee for their services and
buy shares for their own accounts or the accounts of their clients.
Purchaser. The term "purchaser" includes: (1) an individual, (2) an
individual and his or her spouse and children under the age of 21 and (3) a
trustee or other fiduciary purchasing shares for a single trust estate or
single fiduciary account (including a pension, profit-sharing, or other
employee benefit trust qualified under Section 401 of the Internal Revenue
Code - more than one qualified employee benefit trust of a single employer,
including its consolidated subsidiaries, may be considered a single trust,
as may qualified plans of multiple employers registered in the name of a
single bank trustee as one account), although more than one beneficiary is
involved.
Special Retirement Wrap Program. A program sponsored by an Authorized
Institution showing one or more characteristics distinguishing it, in the
opinion of Lord Abbett Distributor from a Mutual Fund Advisory Program.
Such characteristics include, among other things, the fact that an
Authorized Institution does not charge its clients any fee of a consulting
or advisory nature that is economically equivalent to the distribution fee
under the class A 12b-1 Plan and the fact that the program relates to
participant-directed Retirement Plans.
GUARANTEED SIGNATURE. An acceptable form of guarantee would be as follows:
In the case of the estate --
Robert A. Doe
Executor of the Estate of
John W. Doe
[Date]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
[SIGNATURE ILLEGIBLE]
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'sm'
SR
In the case of the corporation --
ABC Corporation
Mary B. Doe
By Mary B. Doe, President
[Date]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
[SIGNATURE ILLEGIBLE]
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'sm'
SR
Year 2000 Issues. The fund could be adversely affected if the computers used by
the fund and their service providers do not properly process and calculate
date-related information from and after January 1, 2000.
Lord Abbett is working to avoid such problems and has received assurances from
each fund's service providers that they are taking similar steps. Of course, the
Year 2000 problem is unprecedented and, therefore, Lord Abbett cannot eliminate
altogether the possibility that it or the funds will be affected.
For More Information 11
<PAGE>
FINANCIAL HIGHLIGHTS
This table describes the fund's performance for the fiscal periods indicated."
Total return" shows how much your investment in the fund would have increased
(or decreased) during each period, assuming you had reinvested all dividends and
distributions. These Financial Highlights have been audited by Deloitte & Touche
LLP, the fund's independent auditors, in conjunction with their annual audit of
the fund's financial statements. Financial statements for the fiscal year ended
June 30, 1999 and the Independent Auditors' Report thereon appear in the Annual
Report to Shareholders for the fiscal year ended June 30, 1999 and are
incorporated by reference into the Statement of Additional Information, which is
available upon request. Certain information reflects financial results for a
single fund share.
<TABLE>
<CAPTION>
Class A Shares
---------------------------------------------------
Year Ended June 30,
Per Share Operating Performance: 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $0.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------------------------------
Income from investment operations
- ----------------------------------------------------------------------------------------------
Net investment income .00 .047 .046 .048 .046
- ----------------------------------------------------------------------------------------------
Distributions
- ----------------------------------------------------------------------------------------------
Dividends from net investment income .00 (.047) (.046) (.048) (.046)
- ----------------------------------------------------------------------------------------------
Net asset value, end of year $0.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------------------------------
Total Return (c) 0.00% 4.79% 4.66% 4.85% 4.65%
- ----------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ----------------------------------------------------------------------------------------------
Expenses 0.00% 0.83% 0.84% 0.81% 0.86%
- ----------------------------------------------------------------------------------------------
Net investment income 0.00% 4.68% 4.57% 4.75% 4.54%
- ----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class B Shares Class C Shares
Year Ended June 30, Year Ended June 30,
---------------------------- -----------------------------
Per Share Operating Performance: 1999 1998 1997(b) 1999 1998 1997 (b)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $0.00 $1.00 $1.00 $0.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------
Income from investment operations
- --------------------------------------------------------------------------------------------------------------
Net investment income .00 .039 .024 .00 .047 .044
- --------------------------------------------------------------------------------------------------------------
Distributions
- --------------------------------------------------------------------------------------------------------------
Dividends from net investment income .00 (.039) (.024) .00 (.047) (.044)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $0.00 $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------
Total Return (c) 0.00% 4.01% 2.39%(a) 0.00% 4.79% 4.47%(a)
- --------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- --------------------------------------------------------------------------------------------------------------
Expenses 0.00% 1.59% 0.99%(a) 0.00% 0.84% 0.81%(a)
- --------------------------------------------------------------------------------------------------------------
Net investment income 0.00% 3.96% 2.38%(a) 0.00% 4.73% 4.39%(a)
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended June 30,
-------------------------------------------------------------------------------------
Supplemental Data For All Classes: 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net assets, end of year (000) $0,000 $162,631 $143,197 $152,531 $140,642
Portfolio turnover rate 0.00% 0.00% 0.00% 0.00% 0.00%
</TABLE>
(a) Not annualized.
(b) Commencement of offering respective class of shares: B - August 1, 1996, C
- July 15, 1996.
(c) Total return assumes reinvestment of all distributions.
12 Financial Information
<PAGE>
COMPENSATION FOR YOUR DEALER
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FIRST YEAR COMPENSATION
Front-end
sales charge Dealer's
paid by investors concession Service fee (1) Total compensation (2)
Class A investments (% of offering price) (% of offering price) (% of net investment) (% of offering price)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Less than $50,000 5.75% 5.00% 0.25% 5.24%
- ------------------------------------------------------------------------------------------------------------------------------------
$50,000 -$99,999 4.75% 4.00% 0.25% 4.24%
- ------------------------------------------------------------------------------------------------------------------------------------
$100,000 -$249,999 3.75% 3.25% 0.25% 3.49%
- ------------------------------------------------------------------------------------------------------------------------------------
$250,000 -$499,999 2.75% 2.25% 0.25% 2.49%
- ------------------------------------------------------------------------------------------------------------------------------------
$500,000 -$999,999 2.00% 1.75% 0.25% 2.00%
- ------------------------------------------------------------------------------------------------------------------------------------
$1 million or more (3) or Retirement Plan -100 or more
eligible employees (3) or Special Retirement Wrap Program (3)
- ------------------------------------------------------------------------------------------------------------------------------------
First $5 million no front-end sales charge 1.00% 0.25% 1.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Next $5 million above that no front-end sales charge 0.55% 0.25% 0.80%
- ------------------------------------------------------------------------------------------------------------------------------------
Next $40 million above that no front-end sales charge 0.50% 0.25% 0.75%
- ------------------------------------------------------------------------------------------------------------------------------------
Over $50 million no front-end sales charge 0.25% 0.25% 0.50%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B investments Paid at time of sale (% of net asset value) (4)
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 3.75% 0.25% 4.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class C investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.75% 0.25% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class P investments Percentage of average net assets
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION AFTER FIRST YEAR
Class A investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge none 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B investments Percentage of average net assets (5)
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge none 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Class C investments
All amounts no front-end sales charge 0.75% 0.25% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class P investments
- ------------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The service fee for class A and P shares is paid quarterly and for class A
shares may not exceed 0.15% if sold prior to June 1, 1990. The first year's
service fee on class B and C shares is paid at the time of sale.
(2) Dealer's concession percentages and service fee percentages are calculated
from different amounts, and therefore may not equal total compensation
percentages if combined using simple addition. Additional Concessions may
be paid to Authorized Institutions from time to time.
(3) Concessions are paid at the time of sale on all class A shares sold during
any 12-month period starting from the day of the first net asset value
sale. With respect to (a) class A share purchases at $1 million or more,
sales qualifying at such level under rights of accumulation and statement
of intention privileges are included and (b) for Special Retirement Wrap
Programs, only new sales are eligible and exchanges into the fund are
excluded.
(4) Class C shares of the fund may be purchased under a Mutual Fund Advisory
Program, in which case, an alternative method of payment may be made
quarterly on average net assets, on a pro-rata basis, during the first year
subsequent to the purchase of shares, excluding dividend and distribution
reinvestments. After the first year, payments with respect to C shares
under a Mutual Fund Advisory Program follow the chart above as set forth
under "Annual Compensation After First Year."
(5) With respect to class B, C and P shares, 0.25% and 1.00% and 0.45%,
respectively, of the average annual net asset value of such shares
outstanding during the quarter (including distribution reinvestment shares
after the first anniversary of their issuance) is paid to Authorized
Institutions. These fees are paid quarterly in arrears.
Financial Information 13
<PAGE>
More information on this fund is available free upon request, including the
following:
ANNUAL/SEMI-ANNUAL REPORT
Describes the fund, lists portfolio holdings.
STATEMENT OF ADDITIONAL INFORMATION (" SAI")
Provides more details about the fund and its policies. A current SAI is on
file with the Securities and Exchange Commission (" SEC") and is
incorporated by reference (is legally considered part of this prospectus).
To obtain information:
By telephone. Call the fund at:
800-201-6984
By mail. Write to the fund at:
The Lord Abbett Family of Funds
767 Fifth Avenue
New York, NY 10153-0203
Via the Internet.
Lord, Abbett & Co.
http://www. lordabbett. com
Text only versions of fund
documents can be viewed
online or downloaded from:
SEC
http://www. sec. gov
You can also obtain copies by
visiting the SEC's Public Reference
Room in Washington, DC (phone
800-SEC-0330) or by sending
your request and a duplicating
fee to the SEC's Public Reference
Section, Washington, DC
20549-6009.
Lord Abbett U. S. Government Securities
Money Market Fund, Inc.
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
- -------------------------
SEC file number: 811-2924
LAMM-1-1199
(11/99)
<PAGE>
LORD ABBETT
Statement of Additional Information November 1, 1999
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 your securities dealer or 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, 1999.
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. Although
no present plans exist to do so, further classes may be added in the future. The
Investment Company Act of 1940, as amended (the "Act"), requires that where more
than one class exists, each class must be preferred over all other classes in
respect of assets specifically allocated to such class.
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 a
contract with a principal underwriter 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 7
5. Portfolio Transactions 8
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. Information About the Fund 14
13. Financial Statements 14
1
<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
2
<PAGE>
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.
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, 1999 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
3
<PAGE>
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, 1999, our portfolio had a dollar-weighted life to maturity of 21
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. ("Lord Abbett"), 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
and/or director or trustee of the 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 54, Chairman and President
The following outside trustees are also directors or trustees of the other Lord
Abbett-sponsored funds referred to above.
E. Thayer Bigelow
Time Warner Inc.
1271 Avenue of the Americas
New York, New York
Senior Adviser, Time Warner Inc. Formerly, Acting Chief Executive Officer of
Courtroom Television Network (1997-1998). Formerly, President and Chief
Executive Officer of Time Warner Cable Programming, Inc. (1991-1997). Prior to
that, President and Chief Operating Officer of Home Box Office, Inc. Age 58.
William H. T. Bush
Bush-O'Donnell & Co., Inc.
101 South Hanley Road, Suite 1025
St. Louis, Missouri
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<PAGE>
Co-founder and Chairman of the Board of financial advisory firm of
Bush-O'Donnell & Company. Age 61.
Robert B. Calhoun, Jr.
Monitor Clipper Partners
650 Madison Avenue, 9th Floor
New York, New York
Managing Director of Monitor Clipper Partners and President of The Clipper
Group, both private equity investment funds. Age 56.
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 68.
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 73.
C. Alan MacDonald
415 Round Hill Road
Greenwich, Connecticut
Currently involved in golf development management on a consultancy basis.
Formerly, Managing Director of The Directorship Group, Inc., a consultancy in
executive search, board management and corporate governance (1997-1999). Prior
to that, General Partner of The Marketing Partnership, Inc., a full service
marketing consulting firm (1994 - 1997), Chairman and Chief Executive Officer of
Lincoln Snacks, Inc., manufacturer of branded snack foods (1992 - 1994). His
career includes 36 years at Stouffers and Nestle with 18 of those years as Chief
Executive Officer. Currently serves as Director of J.B. Williams Company, Inc.,
Fountainhead Water Company, CARESIDE, Inc. and Lincoln Snacks Company. Age 66.
Hansel B. Millican, Jr.
Rochester Button Company
1328 Broadway (Suite 816)
New York, New York
President and Chief Executive Officer of Rochester Button Company. Currently
serves as Director of Polyvision Corporation. Age 71.
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
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<PAGE>
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, 1999
(1) (2) (3) (4)
For Year Ended
Equity-Based December 31, 1998
Benefits Accrued Total Compensation
Aggregate by the Fund and Accrued by the Fund and
Compensation all other Lord all other Lord
Accrued by Abbett-sponsored Abbett-sponsored
Name of Director the Fund(1) Funds(2) Funds(3)
<S> <C> <C> <C>
E. Thayer Bigelow $ $17,068 $57,400
William H. T. Bush* $ None $27,500
Robert B. Calhoun, Jr.** $ None $33,500
Stewart S. Dixon $ $32,190 $56,500
John C. Jansing $ $45,0854 $55,500
C. Alan MacDonald $ $30,703 $55,000
Hansel B. Millican, Jr. $ $37,747 $55,500
Thomas J. Neff $ $19,853 $56,500
</TABLE>
* Elected August 13, 1998.
** Elected 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.
2. The amounts in Column 3 were accrued by the Lord Abbett-sponsored Funds for
the 12 months ended June 30, 1999 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, 1998. The amounts of the aggregate compensation payable
by the Fund as of June 30, 1999 deemed invested in Fund shares, including
dividends reinvested and changes in net asset value applicable to such
deemed investments, were: Mr. Bigelow, $ ; Mr. Calhoun, $ ; Mr.
Dixon, $ ;Mr. Jansing, $ ; Mr. MacDonald, $ ; Mr. Millican,
$ and Mr. Neff, $ . If the amounts deemed invested in Fund shares
were added to each director's actual holdings of Fund shares as of June 30,
1999, each would own the following: Mr. Bigelow, shares; Mr. Dixon,
shares; Mr. Jansing, shares; Mr. MacDonald, shares; Mr. Millican,
shares; and Mr. Neff, 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.
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<PAGE>
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 45, 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 47
Paul A. Hilstad, age 56, Vice President and Secretary (with Lord Abbett since
1995; formerly Senior Vice President and General Counsel of American Capital
Management & Research, Inc.)
Lawrence H. Kaplan, age 42, (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.)
Robert G. Morris, age 54
A. Edward Oberhaus, III, age 39
John J. Walsh, age 63
Treasurer:
Donna M. McManus, age 38, (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 1999, our directors and officers, as a group, owned less than 1% of
our outstanding shares. As of ,1999, the record holders of 5% or more of the
Fund's outstanding shares are as follows:
4.
Investment Advisory and Other Services
As described under "Management" in the Prospectus, Lord Abbett is the Fund's
investment manager. Of the general partners of Lord Abbett, the following are
officers and/or directors of the Fund: 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 are: Stephen I. Allen, John E. Erard, Robert P.
Fetch, Daria L. Foster, W. Thomas Hudson, Stephen J. McGruder,
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<PAGE>
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 "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, 1999, 1998, and 1997, the management fees
paid to Lord Abbett amounted to $ , $740,978, and $773,869, 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.
8
<PAGE>
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
9
<PAGE>
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.
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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.
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<PAGE>
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.
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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.
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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.
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, 1999 and the report
of Deloitte & Touche LLP, independent auditors, on such financial statements
contained in the 1999 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.
14
<PAGE>
<TABLE>
<CAPTION>
PART C OTHER INFORMATION
<S> <C>
Item 23. Exhibits
(a) Articles of Incorporation. Articles Supplementary. Incorporated by reference to Post-Effective Amendment
No. to the Registration Statement on Form N-1A filed on .
(b) By-Laws. Incorporated by reference to Post-Effective
Amendment No. to the Registration Statement on Form N-1A filed on .
(c) Instruments Defining Rights of Security Holders. Incorporated by reference.
(d) Investment Advisory Contracts, Management Agreement. Incorporated by reference to Post-
Effective Amendment No. to the Registration Statement on Form N-1A filed on .
(e) Underwriting Contracts. Incorporated by reference.
(f) Bonus or Profit Sharing Contracts. Incorporated by reference to Post-Effective Amendment No. 6 to the
Registration Statement on Form N-1A of Lord Abbett Securities Trust (File No. 811-7538).
(g) Custodian Agreements. Incorporated by reference.
(h) Other Material Contracts. Not applicable.
(i) Legal Opinion. Incorporated by reference.
(j) Other Opinion. Not applicable.
(k) Omitted Financial Statements. Incorporated by reference.
(l) Initial Capital Agreements. Incorporated by reference.
(m) Rule 12b-1 Plan. Incorporated by reference to Post-Effective Amendment No. 12 to the Registration Statement
on Form N-1A of Lord Abbett Research Fund, Inc. (File No. 811-6650).
(n) Financial Data Schedule. Incorporated by reference.
(o) Rule 18f-3 Plan. 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).
</TABLE>
Item 24. Persons Controlled by or Under Common Control with Registrant
None.
Item 25. 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
2
<PAGE>
imposed by the above-mentioned Section 2-418 of
Maryland Law and by the provisions of Section 17(h)
of the Investment Company Act of 1940 as interpreted
and required to be implemented by SEC Release No.
IC-11330 of September 4, 1980.
In referring in its By-Laws to, and making
indemnification of directors subject to the
conditions and limitations of, both Section 2-418 of
the Maryland Law and Section 17(h) of the Investment
Company Act of 1940, Registrant intends that
conditions and limitations on the extent of the
indemnification of directors imposed by the
provisions of either Section 2-418 or Section 17(h)
shall apply and that any inconsistency between the
two will be resolved by applying the provisions of
said Section 17(h) if the condition or limitation
imposed by Section 17(h) is the more stringent. In
referring in its By-Laws to SEC Release No. IC-11330
as the source for interpretation and implementation
of said Section 17(h), Registrant understands that
it would be required under its By-Laws to use
reasonable and fair means in determining whether
indemnification of a director should be made and
undertakes to use either (1) a final decision on the
merits by a court or other body before whom the
proceeding was brought that the person to be
indemnified ("indemnitee") was not liable to
Registrant or to its security holders by reason of
willful malfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the
conduct of his office ("disabling conduct") or (2)
in the absence of such a decision, a reasonable
determination, based upon a review of the facts,
that the indemnitee was not liable by reason of such
disabling conduct, by (a) the vote of a majority of
a quorum of directors who are neither "interested
persons" (as defined in the 1940 Act) of Registrant
nor parties to the proceeding, or (b) an independent
legal counsel in a written opinion. Also, Registrant
will make advances of attorneys' fees or other
expenses incurred by a director in his defense only
if (in addition to his undertaking to repay the
advance if he is not ultimately entitled to
indemnification) (1) the indemnitee provides a
security for his undertaking, (2) Registrant shall
be insured against losses arising by reason of any
lawful advances, or (3) a majority of a quorum of
the non-interested, non-party directors of
Registrant, or an independent legal counsel in a
written opinion, shall determine, based on a review
of readily available facts, that there is reason to
believe that the indemnitee ultimately will be found
entitled to indemnification.
Insofar as indemnification for liability arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange
Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than
the payment by the registrant of expense incurred or
paid by a director, officer or controlling person of
the registrant in the successful defense of any
action, suit or proceeding) is asserted by such
director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its
counsel the matter has been settled by controlling
precedent, submit to a court of appropriate
jurisdiction the question whether such
indemnification by it is against public policy as
expressed in the Act and will be governed by the
final adjudication of such issue. In addition,
Registrant maintains a directors' and officers'
errors and omissions liability insurance policy
protecting directors and officers against liability
for breach of duty, negligent act, error or omission
committed in their capacity as directors or
officers. The policy contains certain exclusions,
among which is exclusion from coverage for active or
deliberate dishonest or fraudulent acts and
exclusion for fines or penalties imposed by law or
other matters deemed uninsurable.
3
<PAGE>
Item 26. Business and Other Connections of Investment Adviser
Lord, Abbett & Co. acts as investment advisor for
twelve other open-end investment companies and is
principal underwriter for all thirteen. It is also
an investment adviser to approximately 6,220 private
accounts as of May 31, 1998. 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.
Item 27. Principal Underwriter
(a) Lord Abbett Affiliated 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, Inc.
Investment Adviser
American Skandia Trust (Lord Abbett Growth and
Income Portfolio)
(b) The partners of Lord, Abbett & Co. are:
Name and Principal Positions and Offices
Business Address (1) with Registrant
-------------------- ---------------
Robert S. Dow Chairman and President
Paul A. Hilstad Vice President & Secretary
Robert Gerber Executive Vice President
Zane E. Brown Vice President
Daniel E. Carper Vice President
Robert G. Morris Vice President
John J. Walsh Vice President
The other 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.
(1) Each of the above has a principal business address
767 Fifth Avenue, New York, NY 10153
(c) Not applicable
4
<PAGE>
Item 28. 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 29. Management Services
None
Item 30. 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.
The registrant undertakes, if requested to do so by the holders of
at least 10% of the registrant's outstanding shares, to call a
meeting of shareholders for the purpose of voting upon the
question of removal of a director or directors and to assist in
communications with other shareholders as required by Section
16(c).
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, under rule 485(a) under the Securities Act
and had duly caused this registration statement to be signed on its behalf by
the undersigned, duly authorized, in the City of New York, and State of New York
on the 30th day of August, 1999.
BY: /s/ Lawrence H. Kaplan
----------------------
Lawrence H. Kaplan
Vice President
LORD ABBETT U.S. GOVERNMENT MONEY MARKET FUND, INC.
6
<PAGE>
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.
<TABLE>
<CAPTION>
Signatures Title Date
<S> <C> <C>
Chairman, President
/s/ Robert S. Dow and Director/Trustee August 30, 1999
- --------------------- ---------------------- ---------------
Robert S. Dow
/s/ E. Thayer Bigelow Director/Trustee August 30, 1999
- --------------------- ---------------------- ---------------
E. Thayer Bigelow
/s/ William H. T. Bush Director/Trustee August 30, 1999
- --------------------- ---------------------- ---------------
William H. T. Bush
/s/ Robert B. Calhoun, Jr. Director/Trustee August 30, 1999
- --------------------- ---------------------- ---------------
Robert B. Calhoun, Jr.
/s/ Stewart S. Dixon Director/Trustee August 30, 1999
- --------------------- ---------------------- ---------------
Stewart S. Dixon
/s/ John C. Jansing Director/Trustee August 30, 1999
- --------------------- ---------------------- ---------------
John C. Jansing
/s/ C. Alan MacDonald Director/Trustee August 30, 1999
- --------------------- ---------------------- ---------------
C. Alan MacDonald
/s/ Hansel B. Millican, Jr. Director/Trustee August 30, 1999
- --------------------- ---------------------- ---------------
Hansel B. Millican, Jr.
/s/ Thomas J. Neff Director/Trustee August 30, 1999
- --------------------- ---------------------- ---------------
Thomas J. Neff
</TABLE>
BY: /s/ Lawrence H. Kaplan
----------------------
Lawrence H. Kaplan
Attorney - in - Fact
