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. 31 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT /X/
OF 1940
Amendment No. 30 /X/
LORD ABBETT U.S. GOVERNMENT & GOVERNMENT
SPONSORED ENTERPRISES MONEY MARKET FUND, INC.
------------------------------------------------
Exact Name of Registrant as Specified in Charter
90 HUDSON STREET, JERSEY CITY, NEW JERSEY 07302-3973
----------------------------------------------------
Address of Principal Executive Office
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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 October 19, 2004 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
[LORD ABBETT LOGO]
2004
PROSPECTUS
CLASS Y SHARES
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
LORD ABBETT
U.S. GOVERNMENT & GOVERNMENT
SPONSORED ENTERPRISES
MONEY MARKET FUND
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
CLASS Y SHARES OF U.S. GOVERNMENT & GOVERNMENT SPONSORED ENTERPRISES MONEY MARKET FUND ARE NEITHER OFFERED TO THE GENERAL PUBLIC NOR AVAILABLE IN ALL STATES.
PLEASE CALL 800-821-5129 FOR FURTHER INFORMATION.
TABLE OF CONTENTS
PAGE
THE FUND
What you should know Goal 2
about the Fund Principal Strategy 2
Main Risks 2
Performance 3
Fees and Expenses 4
Management 4
YOUR INVESTMENT
Information for managing Purchases 5
your Fund account Sales Compensation
Opening Your Account
Redemptions 6
Distributions and Taxes 7
Services For Fund Investors 8
ADDITIONAL INFORMATION
How to learn more about the Fund Back Cover
and other Lord Abbett Funds
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THE FUND
GOAL
The investment objective of the Fund is to seek high current income and preservation of capital through investments in high quality, short-term, liquid securities. These securities are commonly known as money market instruments.
PRINCIPAL STRATEGY
The Fund is a money market fund that attempts to manage its portfolio to maintain a stable share price of $1.00 in accordance with strict rules of the Securities and Exchange Commission ("SEC"). The Fund normally invests all of its assets in:
- securities issued or guaranteed by the U.S. government, including Treasury
bills, notes, bonds and certificates of indebtedness,
- securities issued or guaranteed by agencies or instrumentalities of the
U.S. government, such as the Government National Mortgage Association,
Federal National Mortgage Association, Federal Home Loan Mortgage
Corporation and Federal Home Loan Banks (collectively, "government
sponsored enterprises"), and
- repurchase agreements involving these securities.
In selecting investments, the Fund focuses on securities that appear to offer the best relative value.
Although the Fund does not currently intend to do so, the Fund may invest up to 20% of its assets in other money market instruments such as certificates of deposit, bankers' acceptances, commercial paper, and other short-term corporate debt securities.
MAIN RISKS
The Fund's yield may vary in response to changes in interest rates and other market factors.
The Fund generally invests a substantial portion of its assets in securities issued by various government sponsored enterprises. Some of these securities, such as those issued by the Government National Mortgage Association, are supported by the full faith and credit of the U.S. Government (i.e., and the payment of principal and interest on those securities is unconditionally guaranteed by the U.S. Government). Others are not guaranteed by the U.S. Government, but are supported only by the credit of the government sponsored enterprise itself and the discretionary authority of the U.S. Treasury to purchase the enterprise's obligations, such as securities of the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and the Federal Home Loan Banks. There is no assurance that the U.S. Government will provide financial support to government sponsored enterprises that are not supported by the full faith and credit of the U.S. Government.
An investment in the Fund is not a bank deposit and 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. The Fund is not a complete investment program and may not be appropriate for all investors.
[SIDENOTE]
WE OR THE FUND OR U.S. GOVERNMENT & GOVERNMENT SPONSORED ENTERPRISES MONEY MARKET FUND refers to Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund, Inc., formerly known as Lord Abbett U.S. Government Securities Money Market Fund, Inc.
ABOUT THE FUND. The 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 & GOVERNMENT SPONSORED
ENTERPRISES MONEY MARKET FUND
PERFORMANCE
The bar chart and table below provide some indication of the risks of investing in the Fund by illustrating the variability of the Fund's returns. Each assumes reinvestment of dividends and distributions. The Fund's past performance is not necessarily an indication of how the Fund will perform in the future.
The bar chart shows changes in the performance of the Fund's Class A shares from calendar year to calendar year. Performance for Class Y shares is not shown because the Class has less than one year of performance. Class Y shares will have substantially similar annual returns as Class A shares because the two classes are invested in the same portfolio of securities. Annual returns for Class Y will differ only to the extent that the classes do not have the same expenses. Class A shares are not offered by this Prospectus.
[CHART]
94 +3.5% 95 +5.2% 96 +4.7% 97 +4.7% 98 +4.6% 99 +4.4% 2000 +5.5% 2001 +3.2% 2002 +0.9% 2003 +0.3% |
BEST QUARTER 4th Q '00 +1.4% WORST QUARTER 4th Q '03 +0.1% |
The Fund's Class A shares total return for the nine-month period from January 1, 2004 to September 30, 2004 was %.
For the Fund's current 7-day yield, call toll-free 1-800-426-1130. The table below shows the Fund's Class A performance over time.
SHARE CLASS 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND Class A Shares 0.26% 2.81% 3.66% -- |
U.S. GOVERNMENT & GOVERNMENT SPONSORED
ENTERPRISES MONEY MARKET FUND
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold Class Y shares of the Fund.
CLASS Y
SHAREHOLDER FEES (Fees paid directly from your investment)
Maximum Sales Charge on Purchases
(as a % of offering price) none
Maximum Deferred Sales Charge none
ANNUAL FUND OPERATING EXPENSES (Expenses deducted from Fund assets) (as a % of average net assets)(1)
Management Fees (See "Management") 0.49%
Other Expenses 0.48%
Total Operating Expenses 0.97%
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(1) The annual operating expenses are based on estimated expenses.
This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. This example, like that in other funds' prospectuses, assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year, that dividends and distributions are reinvested, and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS Class Y Shares $ 99 $ 309 $ 536 $ 1,190 -------------------------------------------------------------------------------- |
MANAGEMENT
The Fund's investment adviser is Lord, Abbett & Co. LLC, which is located at 90 Hudson Street, Jersey City, NJ 07302-3973. Founded in 1929, Lord Abbett manages one of the nation's oldest mutual fund complexes, with assets under management of approximately $80 billion in more than 40 mutual funds and other advisory accounts as of June 30, 2004.
Lord Abbett is entitled to an annual management fee based on the Fund's average daily net assets. The fee is calculated daily and payable monthly. The management fee is calculated at the following rates:
.50% on the first $250 million in assets, .45% on the next $250 million, and .40% on assets over $500 million.
For the fiscal year ended June 30, 2004, the fee paid to Lord Abbett was at an annual rate of .49 of 1% of average daily net assets.
In addition, Lord Abbett provides certain administrative services to the Fund for a fee at the annual rate of .04% of the Fund's average daily net assets. The Fund pays all expenses not expressly assumed by Lord Abbett. For more information about the services Lord Abbett provides to the Fund, see the Statement of Additional Information.
[SIDENOTE]
MANAGEMENT FEES are payable to Lord, Abbett & Co. LLC ("Lord Abbett") for the Fund's investment management.
OTHER EXPENSES include fees paid for miscellaneous items such as shareholder services, professional services, administrative services provided by Lord Abbett, and fees to certain Financial Intermediaries for providing recordkeeping or other administrative services in connection with investments in the Fund.
LORD ABBETT IS CURRENTLY REIMBURSING A PORTION OF THE OTHER EXPENSES FOR EACH CLASS OF SHARES. LORD ABBETT MAY STOP REIMBURSING OTHER EXPENSES AT ANY TIME. TOTAL OPERATING EXPENSES TAKING THE REIMBURSEMENT INTO ACCOUNT ARE .83% FOR CLASS Y SHARES.
YOUR INVESTMENT
PURCHASES
CLASS Y SHARES. You may purchase Class Y shares at the net asset value ("NAV") per share next determined after we receive your purchase order submitted in proper form. We will not consider an order to be in proper form until we have certain identifying information required under applicable law. For more information see below. No sales charges apply.
NAV per share for each class of Fund shares is generally calculated at 12 noon and 2:00 p.m. Eastern time each business day that the New York Stock Exchange ("NYSE") is open for trading. Purchases and sales of Fund shares are executed at the NAV next determined after the Fund receives your order in proper form. In calculating NAV, securities are valued at cost plus (minus) amortized discount (premium), if any, pursuant to the requirements for money market funds.
We reserve the right to withdraw all or any part of the offering made by this Prospectus, waive or change minimum investment requirements, and reject any purchase order. In particular, we reserve the right to reject or restrict any purchase order or exchange request if the Fund or LORD ABBETT DISTRIBUTOR LLC determines that it is in the best interest of the Fund and its shareholders. The Fund is designed for long-term investors and is not designed to serve as a vehicle for frequent trading in response to short-term swings in the market. Excessive, short-term or market-timing trading practices may disrupt management of the Fund, raise its expenses, and harm long-term shareholders. We have longstanding procedures in place to monitor investors, FINANCIAL INTERMEDIARIES that place orders on behalf of their clients, and other agents, and to prevent or stop such trading based on the number of transactions, amounts involved, past transactional activity, and our knowledge of current market activity, among other factors.
All purchase orders are subject to our acceptance and are not binding until confirmed or accepted in writing.
WHO MAY INVEST? Class Y shares are currently available in connection with:
(1) purchases by or on behalf of Financial Intermediaries for clients that
pay the Financial Intermediaries fees for services that include investment
advisory or management services, provided that the Financial Intermediaries
or their trading agents have entered into special arrangements with the Fund
and/or Lord Abbett Distributor specifically for such purchases; (2) purchases
by the trustee or custodian under any deferred compensation or pension or
profit-sharing plan or payroll deduction IRA established for the benefit of
the employees of any company with an account(s) in excess of $10 million
managed by Lord Abbett or its sub-advisers on a private-advisory-account
basis; or (3) purchases by institutional investors, such as retirement plans
("Plans"), companies, foundations, trusts, endowments and other entities
where the total amount of potential investable assets exceeds $50 million,
that were not introduced to Lord Abbett by persons associated with a broker
or dealer primarily involved in the retail security business. Additional
payments may be made by Lord Abbett out of its own resources with respect to
certain of these sales.
HOW MUCH MUST YOU INVEST? You may buy our shares through any independent securities dealer having a sales agreement with Lord Abbett Distributor, our principal underwriter. Place your order with your investment dealer or send the money to the Fund (P.O. Box 219366, Kansas City, Missouri 64121). The minimum initial investment is
[SIDENOTE]
AS OF THE DATE OF THIS PROSPECTUS, THE FUND OFFERS CLASS Y SHARES ONLY TO PARTICIPANTS IN THE LORD ABBETT 401(k) PROFIT SHARING PLAN. IN THE FUTURE, CLASS Y SHARES MAY BE OFFERED TO OTHER INVESTORS.
LORD ABBETT DISTRIBUTOR LLC ("Lord Abbett Distributor") acts as agent for the Fund to work with investment professionals that buy and/or sell shares of the Fund on behalf of their clients. Generally, Lord Abbett Distributor does not sell Fund shares directly to investors.
FINANCIAL INTERMEDIARIES include broker-dealers, registered investment advisers, banks, trust companies, certified financial planners, third-party administrators, recordkeepers, trustees, custodians, financial consultants and insurance companies.
$1 million, except for (1) certain purchases through Financial Intermediaries that charge a fee for services that include investment advisory or management services, and (2) purchases by Plans meeting the eligibility requirements described in the preceding paragraph, which have no minimum. This offering may be suspended, changed or withdrawn by Lord Abbett Distributor, which reserves the right to reject any order.
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT REQUIRED BY THE USA PATRIOT ACT. To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions, including the Fund, to obtain, verify, and record information that identifies each person or entity that opens an account. What this means for you - when you open an account, we will require your name, address, date and place of organization or date of birth, Taxpayer Identification Number or Social Security Number, and we may ask for other information that will allow us to identify you. We also will ask for this information in the case of persons who will be signing on behalf of certain entities that will own the account. We may ask for copies of documents. If we are unable to obtain the required information within a short period of time after you try to open an account, we will return your purchase order or account application. Your monies will not be invested until we have all required information. You also should know that we will verify your identity through the use of a database maintained by a third party or through other means. If we are unable to verify your identity, we may liquidate and close the account. This may result in adverse tax consequences. In addition, the Fund reserves the right to reject purchase orders or account applications accompanied by cash, cashier's checks, money orders, bank drafts, traveler's checks, and third party or double-endorsed checks, among others.
BUYING SHARES THROUGH YOUR DEALER. Orders for shares received by the Fund prior to the time the NAV per share is calculated, or received by dealers and Lord Abbett Distributor prior to such time, will be confirmed at the NAV next determined, see "Class Y shares" above. The dealer is responsible for the timely transmission of orders to Lord Abbett Distributor.
BUYING SHARES BY WIRE. To open an account, call 800-821-5129 Ext. 34028, Institutional Trade Dept., to set up your account and to arrange a wire transaction. Wire to: UMB, N.A., Kansas City, Routing number - 101000695, bank account number: 987800033-3, FBO: (account name) and (your Lord Abbett account number). Specify the complete name of the Fund, note Class Y shares and include your new account number and your name. To add to an existing account, wire to: UMB, N.A., Kansas City, routing number - 101000695, bank account number: 987800033-3, FBO: (account name) and (your Lord Abbett account number). Specify the complete name of the Fund, note Class Y shares and include your account number and your name.
REDEMPTIONS
Redemptions of Fund shares are executed at the NAV next determined after the Fund receives your order in proper form. In the case of redemptions involving Retirement and Benefit Plans, you may be required to provide the Fund with one or more completed forms before your order will be executed. For more information, please call 800-821-5129.
BY BROKER. Call your investment professional for instructions on how to redeem your shares.
BY TELEPHONE. To obtain the proceeds of a redemption of less than $50,000 from your account, you or your representative should call the Fund at 800-821-5129.
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 redeem and include all necessary signatures.
Normally a check will be mailed to the name(s) and address in which the account is registered (or otherwise according to your instruction) within 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.
If the signer has any legal capacity (i.e., the authority of an individual to act on behalf of an entity or other person(s)), the signature and capacity must be guaranteed by an ELIGIBLE GUARANTOR. Certain other legal documentation may be required. For more information regarding proper documentation, please call 800-821-5129.
A GUARANTEED SIGNATURE is designed to protect you from fraud by verifying your signature. We require a Guaranteed Signature by an Eligible Guarantor on requests for:
- a redemption check for which you have the legal capacity to sign on behalf of another person or entity (i.e., on behalf of an estate or on behalf of a corporation),
- a redemption check payable to anyone other than the shareholder(s) of record,
- a redemption check to be mailed to an address other than the address of record,
- a redemption check payable to a bank other than the bank we have on file, or
- a redemption for $50,000 or more.
BY WIRE. In order to receive funds by wire, our servicing agent must have the wiring instructions on file. To verify that this feature is in place, call 800-821-5129 Ext. 34028, Institutional Trading Dept. (minimum wire: $1,000). Your wire redemption request must be received by the Fund before the close of the NYSE for money to be wired on the next business day.
REDEMPTIONS IN KIND. The Fund has the right to pay redemption proceeds to you in whole or in part by a distribution of securities from the Fund's portfolio. It is not expected that the Fund would do so except in unusual circumstances. If the Fund pays your redemption proceeds by a distribution of securities, you could incur brokerage or other charges in converting the securities to cash.
DISTRIBUTIONS AND TAXES
The Fund normally pays you dividends from its net investment income on a monthly basis. Any distributions that you receive are taxable to you as ordinary income for federal income tax purposes. This tax treatment of distributions applies regardless of how long you have owned Fund shares and whether distributions are reinvested or paid in cash. The Fund does not expect to make any capital gain distributions to shareholders.
Distributions will be reinvested in Fund shares unless you instruct the Fund to pay them to you in cash. For distributions payable on accounts other than those held in the name of your dealer, if you instruct the Fund to pay your distributions in cash, and the Post Office is unable to deliver one or more of your checks or one or more of your checks remains uncashed for a certain period, the Fund reserves the right to reinvest your checks in your account at the NAV on the day of the reinvestment following such period. In addition, the Fund reserves the right to reinvest all subsequent distributions in additional Fund shares in your account. No interest will accrue on checks while they remain uncashed before they are reinvested or on amounts represented by uncashed redemption checks. There are no sales charges on reinvestments.
[SIDENOTE]
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.
ELIGIBLE GUARANTOR is any broker or bank that is usually 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.
GUARANTEED SIGNATURE. An acceptable form of guarantee would be as follows:
- In the case of an estate -
ROBERT A. DOE
EXECUTOR OF THE ESTATE OF
JOHN W. DOE
[Date]
[SEAL]
- In the case of a corporation - ABC Corporation
MARY B. DOE
By Mary B. Doe, President
[Date]
[SEAL]
The Fund's distributions are taxable to you in the year they are considered received for tax purposes.
Certain tax reporting information concerning the tax treatment of Fund distributions will be mailed to shareholders each year. Because everyone's tax situation is unique, you should consult your tax adviser regarding the treatment of such distributions under the federal, state and local tax rules that apply to you.
SERVICES FOR FUND INVESTORS
We offer the following shareholder services:
TELEPHONE EXCHANGE PRIVILEGE. Class Y shares may be exchanged without a service charge for Class Y shares of any ELIGIBLE FUND among the Lord Abbett-sponsored funds.
ACCOUNT STATEMENTS. Every Lord Abbett investor automatically receives quarterly account statements.
HOUSEHOLDING. We have adopted a policy that allows us to send only one copy of the Fund's prospectus, proxy material, annual report and semi-annual report to certain shareholders residing at the same "household." This reduces Fund expenses, which benefits you and other shareholders. If you need additional copies or do not want your mailings to be "householded," please call us at 800-821-5129 or send a written request with your name, the name of your fund or funds, and your account number or numbers to Lord Abbett Family of Funds, P.O. Box 219366, Kansas City, MO 64121.
ACCOUNT CHANGES. For any changes you need to make to your account, consult your investment professional or call the Fund at 800-821-5129.
RECORDKEEPING SERVICES. From time to time, the Fund may enter into arrangements with and pay fees to organizations that provide recordkeeping services to certain groups of investors in the Fund, including participants in Retirement and Benefit Plans, investors in mutual fund advisory programs, investors in variable insurance products and clients of broker-dealers that operate in an omnibus environment (collectively, "Investors"). The recordkeeping services typically include: (a) establishing and maintaining Investor accounts and records; (b) recording Investor account balances and changes thereto; (c) arranging for the wiring of funds; (d) providing statements to Investors; (e) furnishing proxy materials, periodic Fund reports, prospectuses and other communications to Investors as required; (f) transmitting Investor transaction information; and (g) providing information in order to assist the Fund in its compliance with state securities laws. In each instance, the fees the Fund pays are designed to be equal to or less than the fees the Fund would pay to its transfer agent for similar services. In addition, none of these arrangements relate to distribution services. Lord Abbett Distributor LLC, the principal underwriter for the Fund, also may pay the recordkeeper or an affiliate fees for other services pursuant to a selling dealer agreement or shareholder services agreement. The Fund understands that, in accordance with guidance from the U.S. Department of Labor, Plans, sponsors of qualified retirement plans and/or recordkeepers may be required to use the fees they (or, in the case of recordkeepers, their affiliates) receive for the benefit of the plans or the Investors.
[SIDENOTE]
EXCHANGE LIMITATIONS. As described under "Your Investment -- Purchases," we reserve the right to reject or restrict any exchange request if the Fund or Lord Abbett Distributor determines it is in the best interest of the Fund and its shareholders. The Fund also may revoke the privilege for all shareholders upon 60 days' written notice.
ELIGIBLE FUND. An Eligible Fund is any Lord Abbett-sponsored fund offering Class Y shares.
TO OBTAIN INFORMATION: ADDITIONAL INFORMATION
BY TELEPHONE. For shareholder account
inquiries call the Fund at: More information on the Fund is available free
800-821-5129. For literature requests upon request, including the following:
call the Fund at: 888-522-2388.
ANNUAL/SEMI-ANNUAL REPORT
BY MAIL. Write to the Fund at: The Fund's Annual and Semi-Annual Reports contain
The Lord Abbett Family of Funds more information about the Fund's investments. The
90 Hudson Street Annual Report also includes details about the
Jersey City, NJ 07302-3973 market conditions and investment strategies that
had a significant effect on the Fund's performance
VIA THE INTERNET. during the last fiscal year.
LORD, ABBETT & CO. LLC
www.LordAbbett.com STATEMENT OF ADDITIONAL INFORMATION ("SAI")
Provides more details about the Fund and its
Text only versions of Fund documents can policies. A current SAI is on file with the
be viewed online or downloaded from the Securities and Exchange Commission ("SEC") and is
SEC: www.sec.gov incorporated by reference (is legally considered
part of this prospectus).
You can also obtain copies by visiting
the SEC's Public Reference Room in
Washington, DC (phone 202-942-8090) or
by sending your request and a
duplicating fee to the SEC's Public
Reference Section, Washington, DC
20549-0102 or by sending your request
electronically to publicinfo@sec.gov.
[LORD ABBETT(R) LOGO]
Lord Abbett U.S. Government & Government
Lord Abbett Mutual Fund shares are distributed by: Sponsored Enterprises Money Market Fund, Inc. LAMM-Y-1
LORD ABBETT DISTRIBUTOR LLC (10/04)
90 Hudson Street - Jersey City, New Jersey 07302-3973
SEC FILE NUMBER: 811-2924
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THE INFORMATION IN THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT COMPLETE AND MAY BE CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
LORD ABBETT
STATEMENT OF ADDITIONAL INFORMATION OCTOBER 19, 2004
LORD ABBETT U.S. GOVERNMENT & GOVERNMENT
SPONSORED ENTERPRISES MONEY MARKET FUND, INC.
(CLASS Y SHARES)
This Statement of Additional Information ("SAI") is not a Prospectus. A Prospectus may be obtained from your securities dealer or from Lord Abbett Distributor LLC ("Lord Abbett Distributor") at 90 Hudson Street, Jersey City, NJ 07302-3973. This SAI relates to, and should be read in conjunction with, the Prospectus for the Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund, Inc. (the "Fund") (formerly known as Lord Abbett U.S. Government Securities Money Market Fund, Inc.) dated October 19, 2004.
Shareholder account inquiries should be made by directly contacting the Fund or by calling 800-821-5129. The Annual Report to Shareholders is available without charge, upon request by calling 800-874-3733. In addition, you can make inquiries through your dealer.
TABLE OF CONTENTS PAGE 1. Fund History 2 2. Investment Policies 2 3. Management of the Fund 4 4. Control Persons and Principal Holders of Securities 10 5. Investment Advisory and Other Services 10 6. Brokerage Allocations and Other Practices 11 7. Classes of Shares 12 8. Purchases, Redemptions, and Pricing 12 9. Taxation of the Fund 13 10. Underwriter 14 11. Yield Calculation 15 12. Financial Statements 15 Appendix - Commercial Paper and Bond Ratings 16 |
1.
FUND HISTORY
Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund, Inc. is a diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the "Act"). The Fund was formerly known as Lord Abbett U.S. Government Securities Money Market Fund, Inc. and changed its name effective October 1, 2003. The Fund has 1,500,000,000 shares of authorized capital stock consisting of four classes (A, B, C, and Y), $.001 par value, but only Class Y shares of the Fund are offered in this SAI. The Board of Directors (the "Board") will allocate these authorized shares of capital stock among the classes from time to time. Class Y shares of the Fund are neither offered to the general public nor available in all states. As of the date of this SAI, Class Y shares of the Fund are only offered to participants in the Lord Abbett 401)(k) Profit Sharing Plan. In the future, Class Y shares may be offered to other investors.
2.
INVESTMENT POLICIES
FUNDAMENTAL INVESTMENT RESTRICTIONS. The Fund's investment objective in the Prospectus cannot be changed without approval of a majority of the Fund's outstanding shares. The Fund is also subject to the following fundamental investment restrictions that cannot be changed without approval of a majority of the Fund's outstanding shares.
The Fund may not:
(1) borrow money, except that (i) the Fund may borrow from banks (as defined in 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 investments 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.
Compliance with these investment restrictions will be determined at the time of the purchase or sale of the security, except in the case of the first restriction with which the Fund must comply on a continuous basis.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The Fund is also subject to the following non-fundamental investment restrictions that may be changed by the Board without shareholder approval.
The Fund may not:
(1) make short sales of securities or maintain a short position except to the extent permitted by applicable law;
(2) invest knowingly more than 10% 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, determined by Lord Abbett to be liquid, subject to the oversight of the Board (in accordance with currently applicable Securities and Exchange Commission ("SEC") requirements);
(3) invest in the securities of other investment companies except as permitted by applicable law;
(4) invest in warrants if, at the time of the acquisition, its investment in warrants, valued at the lower of cost or market, would exceed 5% of the Fund's total assets (included within such limitation, but not to exceed 2% of the Fund's total assets, are warrants which are not listed on the New York or American Stock Exchange or a major foreign exchange);
(5) write, purchase or sell puts, calls, straddles, spreads or combinations thereof, except to the extent permitted in the Fund's Prospectus and SAI, as they may be amended from time to time; or
(6) buy from or sell to any of the Fund's officers, directors, employees, or its investment adviser or any of the adviser's officers, partners or employees, any securities other than shares of the Fund.
Compliance with these investment restrictions will be determined at the time of the purchase or sale of the security.
ADDITIONAL INFORMATION ON PORTFOLIO RISKS, INVESTMENTS, AND TECHNIQUES. This section provides further information on certain types of investments and investment techniques that may be used by the Fund, including their associated risks.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with respect to securities. A repurchase agreement is a transaction by which the purchaser acquires a security and simultaneously commits to resell that security to the seller (a bank or securities dealer) at an agreed-upon price on an agreed-upon date. The resale price reflects the purchase price plus an agreed-upon market rate of interest that is unrelated to the coupon rate or date of maturity of the purchased security. The Fund requires at all times that the repurchase agreement be collateralized by cash or by securities of the U.S. Government, its agencies, its instrumentalities, or U.S. Government sponsored enterprises ("U.S. Government Securities") having a value equal to, or in excess of, the value of the repurchase agreement (including accrued interest). Such agreements permit the Fund to keep all of its assets at work while retaining flexibility in pursuit of investments of a longer-term nature.
The use of repurchase agreements involves certain risks. For example, if the seller of the agreement defaults on its obligation to repurchase the underlying securities at a time when the value of these securities has declined, the Fund may incur a loss upon disposition of them. Even though the repurchase agreements may have maturities of seven days or less, they may lack liquidity, especially if the issuer encounters financial difficulties. The Fund intends to limit repurchase agreements to transactions with dealers and financial institutions believed by Lord Abbett, as the investment manager, to present minimal credit risks. Lord Abbett will monitor the creditworthiness of the repurchase agreement sellers on an ongoing basis.
SECURITIES OF GOVERNMENT SPONSORED ENTERPRISES. The Fund invests extensively in securities issued or guaranteed by agencies or instrumentalities of the U.S. Government, such as the Government National Mortgage Association ("Ginnie Mae"), Federal National Mortgage Association ("Fannie Mae"), Federal Home Loan Mortgage Corporation ("Freddie Mac"), and Federal Home Loan Banks ("FHLBanks"). Ginnie Mae is authorized to guarantee, with the full faith and credit of the United States Government, the timely payment of principal and interest on securities issued by institutions approved by Ginnie Mae (such as savings and loan institutions, commercial banks and mortgage bankers) and backed by pools of mortgages insured or guaranteed by the Federal Housing Administration, the Department of Veterans Affairs, the Rural Housing Service, or the U.S. Department of Housing and Urban Development. Both Fannie Mae and Freddie Mac
are federally chartered public corporations owned entirely by their shareholders; the FHLBanks are federally chartered corporations owned by their member financial institutions. Although Fannie Mae, Freddie Mac, and the FHLBanks guarantee the timely payment of interest and ultimate collection of principal with respect to the securities they issue, their securities are not backed by the full faith and credit of the United States Government.
U.S. GOVERNMENT SECURITIES. The Fund may invest in obligations of the U.S. Government and its agencies and instrumentalities, including Treasury bills, notes, bonds and certificates of indebtedness, that are issued or guaranteed as to principal or interest by the U.S. Treasury.
3.
MANAGEMENT OF THE FUND
The Board ""is responsible for the management of the business and affairs of the Fund in accordance with the laws of the State of Maryland. The Board appoints officers who are responsible for the day-to-day operations of the Fund and who execute policies authorized by the Board. As discussed fully below, the Board also approves an investment adviser to the Fund and continues to monitor the cost and quality of the services provided by the investment adviser, and annually considers whether to renew the contract with the adviser. Generally, each Director holds office until his/her successor is elected and qualified or until his/her earlier resignation or removal, as provided in the Fund's organizational documents.
Lord, Abbett & Co. LLC ("Lord Abbett"), a Delaware limited liability company, is the Fund's investment adviser.
INTERESTED DIRECTOR
The following Director is the Managing Partner of Lord Abbett and is an
"interested person" as defined in the Act. Mr. Dow is also an officer, director,
or trustee of each of the fourteen Lord Abbett-sponsored funds, which consist of
49 portfolios or series.
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION
DATE OF BIRTH WITH FUND DURING PAST FIVE YEARS OTHER DIRECTORSHIPS
----------------- ----------------- ---------------------- -------------------
ROBERT S. DOW Director since Managing Partner and Chief N/A
Lord, Abbett & Co. LLC 1989; Chairman Investment Officer of Lord Abbett
90 Hudson Street since 1996 since 1996.
Jersey City, NJ
Date of Birth: 3/8/1945
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INDEPENDENT DIRECTORS
The following independent or outside Directors are also directors or trustees of
each of the fourteen Lord Abbett-sponsored funds, which consist of 49 portfolios
or series.
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION
DATE OF BIRTH WITH FUND DURING PAST FIVE YEARS OTHER DIRECTORSHIPS
----------------- ----------------- ---------------------- -------------------
E. THAYER BIGELOW Director since 1994 Managing General Partner, Bigelow Currently serves as
Bigelow Media, LLC Media, LLC (since 2000); Senior director of Adelphia
41 Madison Ave., Suite 3810 Adviser, Time Warner Inc. (1998 - Communications, Inc.,
New York, NY 2000); Acting Chief Executive Crane Co. and Huttig
Date of Birth: 10/22/1941 Officer of Courtroom Television Building Products Inc.
Network (1997 - 1998); President
and Chief Executive Officer of
Time Warner Cable Programming,
Inc. (1991 - 1997).
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CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION
DATE OF BIRTH WITH FUND DURING PAST FIVE YEARS OTHER DIRECTORSHIPS
----------------- ----------------- ---------------------- -------------------
WILLIAM H.T. BUSH Director since 1998 Co-founder and Chairman of the Currently serves as
Bush-O'Donnell & Co., Inc. Board of the financial advisory director of Wellpoint
101 South Hanley Road firm of Bush-O'Donnell & Company Health Networks, Inc.,
Suite 1250 (since 1986). DT Industries Inc., and
St. Louis, MO Engineered Support
Date of Birth: 7/14/1938 Systems, Inc.
ROBERT B. CALHOUN, JR. Director since 1998 Managing Director of Monitor Currently serves as
Monitor Clipper Partners Clipper Partners (since 1997) and director of Avondale,
650 Madison Ave., 9th Fl. President of Clipper Asset Inc. and Interstate
New York, NY Management Corp. (since 1991), Bakeries Corp.
Date of Birth: 10/25/1942 both private equity investment
funds.
JULIE A. HILL Trustee since 2004 Owner and CEO of the Hillsdale Currently serves as
20 Via Diamante Companies, a business consulting director of Wellpoint
Newport Coast, CA firm (1997 - present); Founder, Health Networks, Inc.;
Date of Birth: 7/16/1946 President and Owner of the Resources Connection
Hiram-Hill and Hillsdale Inc.; Holcim (US) Inc.
Development Companies from 1998 (parent company Holcim
to 2001. Ltd).
FRANKLIN W. HOBBS Director since 2000 Senior Advisor (since April 2003) Currently serves as
Houlihan Lokey Howard & and Former Chief Executive Officer director of Adolph Coors
Zukin of Houlihan Lokey Howard & Zukin, Company.
685 Third Ave. an investment bank (January 2002
New York, NY - April 2003); Chairman of Warburg
Date of Birth: 7/30/1947 Dillon Read (1999 - 2001); Global
Head of Corporate Finance of SBC
Warburg Dillon Read (1997 - 1999);
Chief Executive Officer of Dillon,
Read & Co. (1994 - 1997).
C. ALAN MACDONALD Director since 1988 Retired - General Business and Currently serves as
415 Round Hill Road Governance Consulting (since director of Lincoln
Greenwich, CT 1992); formerly President and CEO Snacks, and H.J. Baker.
Date of Birth: 5/19/1933 of Nestle Foods.
THOMAS J. NEFF Director since 1982 Chairman of Spencer Stuart, an Currently serves as
Spencer Stuart executive search consulting firm director of Ace, Ltd.
277 Park Avenue (since 1996); President of Spencer and Exult, Inc.
New York, NY Stuart (1979-1996).
Date of Birth: 10/2/1937
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OFFICERS
None of the officers listed below have received compensation from the Fund. All
the officers of the Fund may also be officers of the other Lord Abbett-sponsored
funds and maintain offices at 90 Hudson Street, Jersey City, NJ 07302.
NAME AND CURRENT POSITION LENGTH OF SERVICE PRINCIPAL OCCUPATION
(DATE OF BIRTH) WITH FUND OF CURRENT POSITION DURING PAST FIVE YEARS
--------------- ---------------- ------------------- ----------------------
ROBERT S. DOW Chief Executive Elected in 1995 Managing Partner and Chief Investment Officer
(3/8/1945) Officer and of Lord Abbett since 1996.
President
ROBERT I. GERBER Executive Vice Elected in 1997 Partner and Director of Taxable Fixed Income
(5/29/1954) President Management, joined Lord Abbett in 1997.
TRACIE E. AHERN Vice President Elected in 1999 Partner and Director of Portfolio Accounting
(1/12/1968) and Operations, joined Lord Abbett in 1999,
prior thereto Vice President - Head of Fund
Administration of Morgan Grenfell.
JOAN A. BINSTOCK Chief Financial Elected in 1999 Partner and Chief Operations Officer, joined
(3/4/1954) Officer and Vice Lord Abbett in 1999, prior thereto Chief
President Operating Officer of Morgan Grenfell.
DANIEL E. CARPER Vice President Elected in 1986 Partner, joined Lord Abbett in 1979.
(1/22/1952)
PAUL A. HILSTAD Vice President and Elected in 1995 Partner and General Counsel, joined Lord
(12/13/1942) Secretary Abbett in 1995.
LAWRENCE H. KAPLAN Vice President and Elected in 1997 Partner and Deputy General Counsel, joined
(1/16/1957) Assistant Secretary Lord Abbett in 1997.
ROBERT A. LEE Vice President Elected in 2000 Partner and Fixed Income Investment Manager
(8/28/1969) -Mortgage and Asset Backed Securities, joined
Lord Abbett in 1997.
ROBERT G. MORRIS Vice President Elected in 1995 Partner and Director of Equity Investments,
(11/6/1944) joined Lord Abbett in 1991.
A. EDWARD OBERHAUS, III Vice President Elected in 1996 Partner and Manager of Equity Trading, joined
(12/21/1959) Lord Abbett in 1983.
CHRISTINA T. SIMMONS Vice President and Elected in 2000 Assistant General Counsel, joined Lord Abbett
(11/12/1957) Assistant Secretary in 1999, formerly Assistant General Counsel of
Prudential Investments from 1998 to 1999,
prior thereto Counsel of Drinker, Biddle &
Reath LLP, a law firm.
BERNARD J. GRZELAK Treasurer Elected in 2003 Director of Fund Administration, joined Lord
(6/12/1971) Abbett in 2003, formerly Vice President,
Lazard Asset Management from 2000 to 2003,
prior thereto Manager of Deloitte & Touche
LLP.
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COMMITTEES. The standing committees of the Board are the Audit Committee, the Proxy Committee, and the Nominating and Governance Committee.
The Audit Committee is composed wholly of Directors who are not "interested persons" of the Fund. The members of the Audit Committee are Messrs. Bigelow, Calhoun, and Hobbs and Ms. Hill. The Audit Committee provides assistance to the Board in fulfilling its responsibilities relating to accounting matters, the reporting practices of the Fund, and the quality and integrity of the Fund's financial reports. Among other things, the Audit Committee is responsible for reviewing and evaluating the performance and independence of the Fund's independent auditors and considering violations of the Fund's Code of Ethics to determine what action should be taken. The Audit Committee meets quarterly and during the past fiscal year met four times.
The Proxy Committee is composed of at least two Directors who are not "interested persons" of the Fund, and also may include one or more Directors who are partners or employees of Lord Abbett. The current members of the Proxy Committee are three independent Directors: Messrs. Bush, MacDonald and Neff. The Proxy Committee shall (i) monitor the actions of Lord Abbett in voting securities owned by the Funds; (ii) evaluate the policies of Lord Abbett in voting securities; and (iii) meet with Lord Abbett to review the policies in voting securities, the sources of information used in determining how to vote on particular matters, and the procedures used to determine the votes in any situation where there may be a conflict of interest. During the past fiscal year, the Proxy Committee met once.
The Nominating and Governance Committee is composed of all the Directors who are not "interested persons" of the Fund. Among other things, the Nominating and Governance Committee is responsible for (i) evaluating and nominating individuals to serve as independent Directors and as committee members; and (ii) periodically reviewing director/trustee compensation. During the past fiscal year, the Nominating and Governance Committee met four times.
APPROVAL OF ADVISORY CONTRACT
At a meeting on December 12, 2003, the Board, including all of its Directors who
are not interested persons of the Fund, considered whether to approve the
continuation of the existing management agreement between the Fund and Lord
Abbett. In addition to the materials the Board had reviewed throughout the
course of the year, the Board received materials relating to the management
agreement before the meeting and had the opportunity to ask questions and
request further information in connection with their consideration.
INFORMATION RECEIVED BY THE BOARD. The materials received by the Board included, but were not limited to, (1) information on the investment performance of the Fund and a peer group of funds for the preceding twelve months and for other periods, (2) information on the effective management fee rates and expense ratios for funds with the same objectives and similar size, (3) sales and redemption information for the Fund, (4) information regarding Lord Abbett's financial condition, (5) an analysis of the relative profitability of the management agreement to Lord Abbett, (6) information regarding the distribution arrangements of the Fund, (7) information regarding the personnel, information technology, and other resources devoted by Lord Abbett to managing the Fund.
In considering whether to approve the continuation of the management agreement, the Board did not identify any single factor as paramount or controlling. This summary does not discuss in detail all matters considered. Matters considered by the Board in connection with its approval of the continuation of the management agreement included, but were not limited to, the following:
INVESTMENT MANAGEMENT SERVICES GENERALLY. The Board considered the investment management services provided by Lord Abbett to the Fund, including investment research, portfolio management, and trading.
INVESTMENT PERFORMANCE AND COMPLIANCE. The Board reviewed the Fund's investment performance as well as the performance of the peer group of funds, both in terms of total return and in terms of other statistical measures for the preceding twelve months and for other periods. The Board also considered whether the Fund had operated within its investment restrictions.
LORD ABBETT'S PERSONNEL AND METHODS. The Board considered the qualifications of the personnel providing investment management services to the Fund, in light of the Fund's investment objective and discipline. Among other things, the Board considered the size, education, and experience of Lord Abbett's investment management staff, its use of technology, and Lord Abbett's approach to recruiting, training, and retaining investment management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board considered the nature, quality, costs, and extent of administrative and other services performed by Lord Abbett and Lord Abbett Distributor and the nature and extent of Lord Abbett's supervision of third party service providers, including the Fund's transfer agent, custodian, and subcustodians.
EXPENSES. The Board considered the expense ratios of each class and the expense ratios of a peer group of funds. The Board also considered the amount and nature of fees paid by shareholders.
PROFITABILITY. The Board considered the level of Lord Abbett's profits in managing the Fund, including a review of Lord Abbett's methodology for allocating its costs to its management of the Fund. The Board concluded that the allocation methodology had a reasonable basis and was appropriate. The Board considered the profits realized by Lord Abbett in connection with the operation of the Fund and whether the amount of profit is fair for the management of the Fund. The Board also considered the profits realized from other businesses of Lord Abbett, which may benefit from or be related to the Fund's business. The Board also considered Lord Abbett's profit margins in comparison with available industry data, both accounting for and ignoring marketing and distribution expenses, and how those profit margins could affect Lord Abbett's ability to recruit and retain investment personnel.
ECONOMIES OF SCALE. The Board considered whether there have been any economies of scale in managing the Fund, whether the Fund has appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale.
OTHER BENEFITS TO LORD ABBETT. The Board considered the character and amount of fees paid by the Fund and the Fund's shareholders to Lord Abbett and Lord Abbett Distributor for services other than investment management, the allocation of Fund brokerage, and the receipt of research by Lord Abbett in return for fund brokerage. The Board also considered the revenues and profitability of Lord Abbett's investment advisory business apart from its mutual fund business, and the intangible benefits enjoyed by Lord Abbett by virtue of its relationship with the Fund.
ALTERNATIVE ARRANGEMENTS. The Board considered whether, instead of approving continuation of the management agreement, employing one or more alternative arrangements might be in the best interests of the Fund, such as continuing to employ Lord Abbett, but on different terms.
After considering all of the relevant factors, the Board unanimously voted to approve continuation of the existing management agreement.
COMPENSATION DISCLOSURE
The following table summarizes the compensation for each of the
directors/trustees of the Fund and for all Lord Abbett-sponsored funds.
The second column of the following table sets forth the compensation accrued by the Fund for outside Directors. The third column sets forth the total compensation paid by all Lord Abbett-sponsored funds to the outside directors/trustees, and amounts payable but deferred at the option of the director/trustee. No director/trustee of the funds associated with Lord Abbett and no officer of the funds received any compensation from the funds for acting as a director/trustee or officer.
(2) (3)
FOR THE FISCAL YEAR ENDED FOR YEAR ENDED DECEMBER 31, 2003
JUNE 30, 2003 AGGREGATE TOTAL COMPENSATION PAID
(1) COMPENSATION ACCRUED BY THE FUND AND THIRTEEN OTHER
NAME OF DIRECTOR BY THE FUND(1) LORD ABBETT-SPONSORED FUNDS (2)
---------------- ------------------------- --------------------------------
E. Thayer Bigelow $ 1,042 $ 95,000
William H.T. Bush $ 1,038 $ 94,000
Robert B. Calhoun, Jr. $ 1,071 $ 99,000
Julie A. Hill* $ $ -
Franklin W. Hobbs $ 1,042 $ 95,000
C. Alan MacDonald $ 1,049 $ 96,500
Thomas J. Neff $ 1,030 $ 94,000
James F. Orr, III** $ 642 $ 11,833
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* Elected effective February 1, 2004. ** Resigned March 3, 2003.
(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 may be deferred at the option of a Director under an equity-based plan (the "equity-based plan") that deems the deferred amounts to be invested in shares of the funds for later distribution to the Directors. In addition, $25,000 of each Director's retainer must be deferred and is deemed invested in shares of the Fund and other Lord Abbett-sponsored funds under the equity-based plan. Of the amounts shown in the second column, the total deferred amounts for the Directors are $600, $621, $1,071, $145, $1042, $290, $1,030, and $642, respectively.
(2). The third column shows aggregate compensation, including the types of compensation described in the second column, accrued by all Lord Abbett-sponsored funds during the year ended December 31, 2003, including fees directors/trustees have chosen to defer.
The following chart provides certain information about the dollar range of equity securities beneficially owned by each Director in the Fund and other Lord Abbett-sponsored funds as of December 31, 2003. The amounts shown include deferred compensation to the Directors deemed invested in fund shares. The amounts ultimately received by the Directors under the deferred compensation plan will be directly linked to the investment performance of the funds.
AGGREGATE DOLLAR RANGE OF
DOLLAR RANGE OF EQUITY EQUITY SECURITIES IN LORD
NAME OF DIRECTOR SECURITIES IN THE FUND ABBETT-SPONSORED FUNDS
---------------- ---------------------- -------------------------
Robert S. Dow $10,001-$50,000 Over $100,000
E. Thayer Bigelow $1-$10,000 Over $100,000
William H. T. Bush $1-$10,000 Over $100,000
Robert B. Calhoun, Jr. $1-$10,000 Over $100,000
Julie A. Hill $ None
Franklin W. Hobbs $1-$10,000 Over $100,000
C. Alan MacDonald $10,001-$50,000 Over $100,000
Thomas J. Neff $1-$10,000 Over $100,000
James F. Orr, III** $1-$10,000 Over $100,000
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* Elected effective February 1, 2004. ** Resigned March 3, 2003.
CODE OF ETHICS
The directors, trustees and officers of Lord Abbett-sponsored 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 Rule 17j-1 of the Act and each of the recommendations of the
Investment Company Institute's Advisory Group on Personal Investing. Among other
things, the Code of Ethics requires, with limited exceptions, 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 seven days before or after any Lord
Abbett-sponsored fund or Lord Abbett-managed account considers a trade or trades
in such security, prohibiting profiting on trades of the same security within 60
days and trading on material and non-public information. The Code of Ethics
imposes certain similar requirements and restrictions on the independent
directors and trustees of each Lord Abbett-sponsored fund to the extent
contemplated by the recommendations of the Advisory Group.
4.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
The Fund's Class Y shares are currently being offered only to participants in the Lord Abbett 401(k) Profit Sharing Plan. However, as of October 20, 2004, the ownership of the Fund's Class Y shares by Lord Abbett was 100%, which represents the initial investment in Class Y shares. It is anticipated that over time this percentage of ownership will decrease. As of October 20, 2004, there were no other record holders that held 5 % or more of each Fund's outstanding Class Y shares.
5.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT MANAGER
As described under "Management" in the Prospectus, Lord Abbett is the Fund's
investment manager. The following partners of Lord Abbett are also officers of
the Fund: Tracie E. Ahern, Joan A. Binstock, Daniel E. Carper, Robert I. Gerber,
Paul A. Hilstad, Lawrence H. Kaplan, Robert A. Lee, Robert G. Morris and A.
Edward Oberhaus, III. Robert S. Dow is the managing partner of Lord Abbett and
an officer and Director of the Fund. The other partners of Lord Abbett are:
Michael Brooks, Zane E. Brown, Patrick Brown, John J. DiChiaro, Stan Dinsky,
Lesley-Jane Dixon, Kevin P. Ferguson, Robert P. Fetch, Daria L. Foster, Daniel
H. Frascarelli, Michael S. Goldstein, Michael A. Grant, Howard E. Hansen,
Charles Hofer, W. Thomas Hudson, Cinda Hughes, Ellen G. Itskovitz, Maren
Lindstrom, Gregory M. Macosko, Thomas Malone, Charles Massare, Paul McNamara,
Robert J. Noelke, F. Thomas O'Halloran, R. Mark Pennington, Walter Prahl,
Michael Rose, Eli M. Salzmann, Douglas B. Sieg, Richard Sieling, Michael T.
Smith, Richard Smola, Diane Tornejal, Christopher J. Towle, Edward von der
Linde, and Marion Zapolin. The address of each Partner is 90 Hudson Street,
Jersey City, NJ 07302-3973.
Under the Management Agreement between Lord Abbett and the Fund, the Fund pays 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 the Fund's 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 the classes based on the classes' proportionate share of such average daily net assets. For the fiscal years ended June 30, 2004, 2003, and 2002, the management fees paid to Lord Abbett amounted to $1,637,635, $1,548,664, and $1,230,637, respectively.
The Fund pays all expenses attributable to its operations 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, expenses relating to shareholder meetings, expenses of registering its shares under federal and state securities laws, expenses of preparing, printing and mailing prospectuses and shareholder reports to existing shareholders, insurance premiums, and other expenses connected with executing portfolio transactions.
ADMINISTRATIVE SERVICES
Pursuant to an Administrative Services Agreement with the Fund, Lord Abbett
provides certain administrative services not involving the provision of
investment advice to the Fund. Under the Agreement, the Fund pays Lord Abbett a
monthly fee, based on average daily net assets for each month, at an annual rate
of .04%. This fee is allocated among the classes of shares of the Fund based on
average daily net assets.
PRINCIPAL UNDERWRITER
Lord Abbett Distributor LLC, a New York limited liability company and subsidiary
of Lord Abbett, 90 Hudson Street, Jersey City, NJ 07302-3973, serves as the
principal underwriter for the Fund.
CUSTODIAN AND ACCOUNTING AGENT
State Street Bank and Trust Company, 801 Pennsylvania Avenue, Kansas City, MO,
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. In addition, State Street Bank and Trust Company performs
certain accounting and record keeping functions relating to portfolio
transactions and calculates the Fund's net asset value.
TRANSFER AGENT
The Fund has entered into a new Transfer Agency Agreement with DST Systems, Inc.
210 West 10th Street, Kansas City MO 64105. UMB, N.A., 928 Grand Blvd., Kansas
City, MO 64106, had been transfer agent and dividend disbursing agent for the
Fund until June 30, 2004.
INDEPENDENT AUDITORS
Deloitte & Touche LLP, Two World Financial Center, New York, NY 10281, are the
independent registered public accounting firm of the Fund and must be approved
at least annually by the Fund's Board to continue in such capacity. Deloitte &
Touche LLP perform audit services for the Fund, including the examination of
financial statements included in the Fund's Annual Report to Shareholders.
6.
BROKERAGE ALLOCATIONS AND OTHER PRACTICES
The Fund expects 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. The Fund usually will not pay 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. Normally, the selection is made by traders, who may be officers of the Fund and are also employees of Lord Abbett. They do the trading as well for other accounts--investment companies and other clients--managed by Lord Abbett. They are responsible for obtaining best execution.
The Fund's 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. No commitments are made regarding the allocation of brokerage business to or among broker-dealers.
When, in the opinion of Lord Abbett, two or more broker-dealers (either directly or through their correspondent clearing agents) are in a position to obtain the best price and execution, preference may be given to brokers who have sold shares of the Fund, and/or shares of other Lord Abbett-sponsored funds, or who have provided investment research, statistical, or other related services to the Fund.
7.
CLASSES OF SHARES
The Fund offers different classes of shares to eligible purchasers. Only Class Y shares are offered in this SAI. The different classes of shares represent investments in the same portfolio of securities but are subject to different expenses.
All classes of 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. Additional classes or funds may be added in the future. The Act requires that where more than one class or fund exists, each class or fund must be preferred over all other classes or funds in respect of assets specifically allocated to such class or fund.
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 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 auditors, the approval of a contract with a principal underwriter and the election of directors from the separate voting requirements.
The Fund's By-Laws provide that the Fund shall not hold an annual meeting of its shareholders in any year unless one or more matters are required to be acted on by shareholders under the Act, or unless called by a majority of the Board of Directors or by shareholders 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 shareholders will elect directors of the Fund.
8.
PURCHASES, REDEMPTIONS AND PRICING
Information concerning how we value Fund shares is contained in the Prospectus under "Purchases" and "Redemptions."
Under normal circumstances, we calculate the Fund's 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, Presidents' 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 will be able to do so. 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. Our net income will be declared as a dividend daily and payable monthly. 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.
CLASS Y SHARE EXCHANGES. The Prospectus briefly describes the Telephone Exchange Privilege. You may exchange some or all of your Class Y shares for Class Y shares of any Lord Abbett-sponsored funds currently offering Class Y shares to the public. You should read the prospectus of the other fund before exchanging. In establishing a new account by exchange, shares of the fund being exchanged must have a value equal to at least the minimum initial investment required for the other fund into which the exchange is made. We reserve the right to reject or restrict any purchase order or exchange request if the Fund or Lord Abbett Distributor determines that it is in the best interest of the Fund and its shareholders. The Fund is designed for long-term investors and is not designed to serve as a vehicle for frequent trading in response to short-term swings in the market.
REDEMPTIONS. A redemption order is in proper form when it contains all of the information and documentation required by the order form or otherwise by Lord Abbett Distributor or the Fund to carry out the order. The signature(s) and any legal capacity of the signer(s) must be guaranteed by an eligible guarantor. See the Prospectus for expedited redemption procedures.
The right to redeem and receive payment, as described in the Prospectus, may be suspended if the NYSE is closed (except for weekends or customary holidays), trading on the NYSE is restricted or the Securities and Exchange Commission ("SEC") deems an emergency to exist.
The Board 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.
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, including 401(k) plans and custodial agreements for IRAs (Individual Retirement Accounts, including Traditional, Education, Roth, and SIMPLE IRAs and Simplified Employee Pensions), 403(b) plans and qualified pension and profit-sharing plans. The forms name State Street Bank & Trust Company as custodian and contain specific information about the plans, excluding 401(k) 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.
PURCHASES THROUGH FINANCIAL INTERMEDIARIES. The Fund and/or Lord Abbett Distributor has authorized one or more agents to receive on its behalf purchase and redemption orders. Such agents are authorized to designate other intermediaries to receive purchase and redemption orders on behalf of the Fund or Lord Abbett Distributor. The Fund will be deemed to have received a purchase or redemption order when an authorized agent or, if applicable, an agent's authorized designee, receives the order. A Financial Intermediary may charge transaction fees on the purchase and/or sale of Fund shares.
REDEMPTIONS IN KIND. Under circumstances in which it is deemed detrimental to the best interests of the Fund's shareholders to make redemption payments wholly in cash, the Fund may pay any portion of a redemption in excess of the lesser of $250,000 or 1% of the Fund's net assets by a distribution in kind of readily marketable securities in lieu of cash. The Fund presently has no intention to make redemptions in kind under normal circumstances, unless specifically requested by a shareholder.
9.
TAXATION OF THE FUND
The Fund intends to elect and to qualify for the special tax treatment afforded regulated investment companies under the Internal Revenue Code of 1986 (the "Code"), as amended. If it qualifies as a regulated investment company, the Fund will not be liable for U.S. federal income taxes on income that the Fund timely distributes to its shareholders. If in any taxable year the Fund does not qualify as a regulated investment company, all of its taxable income will be taxed to the Fund at regular corporate rates. Assuming the Fund does qualify as a regulated investment company, it will be subject to a 4% non-deductible excise tax on certain amounts that are not distributed or treated as having been distributed on a timely basis each calendar year. The Fund intends to distribute to its shareholders each year an amount adequate to avoid the imposition of this excise tax.
The Fund intends to declare and pay as dividends each year substantially all of its net investment income. Dividends are taxable to you as ordinary income, regardless of whether they are received in cash or reinvested in Fund shares and regardless of the time you have owned the Fund shares.
Dividends paid by the Fund will not qualify for the dividends received deduction for corporations.
Ordinarily, you are required to take distributions by the Fund into account in the year in which they are made. A distribution declared in October, November, or December of any year and payable to shareholders of record on a
specified date in those months, however, is deemed paid by the Fund and received by you on December 31 of that calendar year if the distribution is paid by the Fund in January of the following year. The Fund will send you annual information concerning the tax treatment of dividends and other distributions paid to you by the Fund.
You may be subject to a 28% withholding tax on reportable dividends and redemption payments ("backup withholding"). Generally, you will be subject to backup withholding if the Fund does not have your certified taxpayer identification number on file, or, to the Fund's knowledge, you have furnished an incorrect number. When establishing an account, you must certify under penalties of perjury that your taxpayer identification number is correct and that you are not otherwise subject to backup withholding.
The tax rules of the various states of the United States and their local jurisdictions with respect to distributions from the Fund can differ from the U.S. federal income tax rules described above. Many states allow you to exclude from your state taxable income the percentage of dividends derived from certain federal obligations, including interest on some federal agency obligations. Certain states, however, may require that a specific percentage of the Fund's income be derived from federal obligations before such dividends may be excluded from state taxable income. The Fund may invest some or all of its assets in such federal obligations. The Fund intends to provide to you on an annual basis information to permit you to determine whether Fund dividends derived from interest on federal obligations may be excluded from state taxable income.
If you are investing through a tax-deferred retirement account, such as an IRA, special tax rules apply and you should consult your tax adviser for detailed information about the tax consequences to you of owning Fund shares.
The foregoing discussion addresses only the U.S. federal income tax consequences applicable to U.S. persons (generally, U.S. citizens or residents (including certain former citizens and former long-term residents), domestic corporations or domestic entities taxed as corporations for U.S. tax purposes, estates the income of which is subject to U.S. federal income taxation regardless of its source, and trusts if a court within the United States is able to exercise primary supervision over their administration and at least one U.S. person has the authority to control all substantial decisions of the trusts). The treatment of the owner of an interest in an entity that is a pass-through entity for U.S. tax purposes (e.g., partnerships and disregarded entities) and that owns Fund shares will generally depend upon the status of the owner and the activities of the pass-through entity. If you are not a U.S. person or are the owner of an interest in a pass-through entity that owns Fund shares, you should consult your tax adviser regarding the U.S. and foreign tax consequences of the ownership of Fund shares, including the applicable rate of U.S. withholding tax on dividends representing ordinary income, and the applicability of U.S. gift and estate taxes.
Because everyone's tax situation is unique, you should consult your tax adviser regarding the treatment of distributions under the federal, state, and local tax rules that apply to you.
10.
UNDERWRITER
Lord Abbett Distributor LLC, a New York limited liability company and subsidiary of Lord Abbett, 90 Hudson Street, Jersey City, NJ 07302-3973, serves as the principal underwriter for the Fund. The Fund has entered into a distribution agreement with Lord Abbett Distributor, under which Lord Abbett Distributor is obligated to use its best efforts to find purchasers for the shares of the Fund, and to make reasonable efforts to sell Fund shares on a continuous basis so long as, in Lord Abbett Distributor's judgment, a substantial distribution can be obtained by reasonable efforts.
11.
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, 2004 of the calculation of both "yield" and "effective yield" for one Class A share: The yield and effective yield calculation below is based on one Class A share because Class Y has less than one year of performance. Class Y shares will have substantially similar yields because the two classes are invested in the same portfolio of securities. Returns for Class Y will differ only to the extent that the classes do not have the same expenses.
Value of hypothetical account with exactly one share at beginning of base period $ 1.000000000 Value of same account at end of base period $ 1.000044216 Net change in account value $ .000044216 Base period return (net change in account value divided by the beginning account value) .0044216% "Yield" [base period return times (365 divided by 7)] .23% "Effective yield" [(base period return + 1) (TO THE POWER OF 365/7)] - 1 .23% |
On June 30, 2004, the portfolio had a dollar-weighted life to maturity of 21.7 days.
Publishing 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.
The Fund may from time to time quote or otherwise use yield and total return information in advertisements, shareholder reports or sales literature. Thirty-day yield and average annual total return values are computed pursuant to formulas specified by the SEC. The Fund may also from time to time quote distribution rates in reports to shareholders and in sales literature. In addition, the Fund may from time to time advertise or describe in sales literature its performance relative to certain averages, performance rankings, indices, other information prepared by recognized mutual fund statistical services and/or investments for which reliable performance information is available.
12.
FINANCIAL STATEMENTS
Not applicable.
APPENDIX
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 edged." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.
Aa - Bonds rated Aa are judged to be of high-quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities.
A - Bonds rated A possess many favorable investment attributes and are to be considered as upper medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment some time 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 from the highest rated obligations only to a 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' are 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.
LORD ABBETT U.S. GOVERNMENT & GOVERNMENT
SPONSORED ENTERPRISES MONEY MARKET FUND, INC.
PART C
OTHER INFORMATION
This Post-Effective Amendment No. 31 (the "Amendment") to Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund, Inc.'s (the "Registrant") Registration Statement relates only to Class Y shares of the Registrant.
The other classes of shares of the Registrant are offered by the Prospectus and Statement of Additional Information in Parts A and B, respectively, of the Post-Effective Amendment No 30 to the Registrant's Registration Statement. This Amendment does not relate to, amend or otherwise affect the Prospectuses and Statements of Additional Information contained in the prior Post-Effective Amendment No 30, and pursuant to Rule 485(d) under the Securities Act of 1933, does not affect the effectiveness of such Post-Effective Amendment.
Item 23. Exhibits
(a)(i) ARTICLES OF RESTATEMENT incorporated by reference to Post-Effective Amendment No. 24 to the Registrant's Registration Statement on Form N-1A filed on October 28, 1998.
(ii) ARTICLES SUPPLEMENTARY to Articles of Incorporation dated August 19, 2002 and ARTICLES OF AMENDMENT to Articles of Incorporation dated September 19, 2003. Incorporated by reference to Post-Effective Amendment No. 30 to the Registrant's Registration Statement on Form N-1A filed on October 27, 2003.
(iii) ARTICLES SUPPLEMENTARY TO ARTICLES OF INCORPORATION DATED AUGUST 11, 2004 (CLASS Y). FILED HEREIN.
(b) BY-LAWS. AMENDED AND RESTATED BY-LAWS (DATED 4/20/2004). FILED HEREIN.
(c) INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS. Not applicable.
(d) INVESTMENT ADVISORY CONTRACTS, MANAGEMENT AGREEMENT. Incorporated by reference to Post-Effective Amendment No. 23 to the Registrant's Registration Statement on Form N-1A filed on October 31, 1997.
(e) UNDERWRITING CONTRACTS. Distribution Agreement incorporated by reference to Post-Effective Amendment No. 27 to the Registrant's Registration Statement on Form N-1A filed on October 31, 2000.
(f) BONUS OR PROFIT SHARING CONTRACTS. EQUITY BASED PLANS FOR NON-INTERESTED PERSON DIRECTORS AND TRUSTEES OF LORD ABBETT FUNDS. Incorporated by reference to Post-Effective Amendment No. 28 to the Registrant's Registration Statement on Form N-1A filed on October 30, 2001.
(g) CUSTODIAN AGREEMENTS. Incorporated by reference to Post-Effective Amendment No. 29 to the Registrant's Registration Statement on Form N-1A filed on October 29, 2002.
(h) OTHER MATERIAL CONTRACTS.
(i) Administrative Services Agreement Incorporated by reference to Post-Effective Amendment No. 30 to the Registrant's Registration Statement on Form N-1A filed on October 27, 2003.
(ii) Transfer Agency Agreement. Incorporated by Reference.
(i) LEGAL OPINION. FILED HEREIN.
(j) OTHER OPINION. Not applicable.
(k) OMITTED FINANCIAL STATEMENTS. Not applicable.
(l) INITIAL CAPITAL AGREEMENTS incorporated by reference.
(m) RULE 12b-1 PLAN. (i) Rule 12b-1 Class A Plan and Rule 12b-1 Class B Plan incorporated by reference to Post-Effective Amendment No. 27 to the Registrant's Registration Statement on Form N-1A filed on October 31, 2000; (ii) Rule 12b-1 Class C Plan incorporated by reference to Post-Effective Amendment No. 29 to the Registrant's Registration Statement on Form N-1A filed on October 29, 2002.
(n) RULE 18f-3 PLAN TO BE FILED BY AMENDMENT.
(o) RESERVED.
(p) CODE OF ETHICS. Incorporated by reference to Post-Effective Amendment No. 30 to the Registrant's Registration Statement on Form N-1A filed on October 27, 2003.
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 ("Section 2-418").
The general effect of Section 2-418 is to protect officers, directors and employees of Registrant against legal liability and expenses incurred by reason of their positions with Registrant. It provides for indemnification for liability for proceedings not brought on behalf of the corporation and for those brought on behalf of the corporation, and in each case place conditions under which indemnification will be permitted, including requirements that the officer, director or employee acted in good faith. Under certain conditions, payment of expenses in advance of final disposition may be permitted. The By-Laws of Registrant, without limiting the authority of Registrant to indemnify any of its officers, employees or agents to the extent consistent with applicable law, makes the indemnification of its directors mandatory subject only to the conditions and limitations imposed by Section 2-418 and by the provisions of Section 17(h) of the Investment Company Act of 1940, as amended (the "1940 Act") 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 and
Section 17(h) of the 1940 Act, 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 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 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 (the "1933 Act") may be permitted to directors, officers and controlling persons of Registrant pursuant to the foregoing provisions, or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by 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, 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 1933 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.
Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Lord, Abbett & Co. LLC acts as investment adviser for the Lord Abbett registered investment companies and provides investment management services to various pension plans, institutions and individuals. Lord Abbett Distributor, a limited liability company, serves as their distributor and principal underwriter. Other than acting as trustees, directors and/or officers of open-end investment companies managed by Lord, Abbett & Co. LLC, none of Lord, Abbett & Co. LLC's partners has, in the past two fiscal years, engaged in any other business, profession, vocation or employment of a substantial nature for his or her own account or in the capacity of director, trustee, officer, employee, or partner of any entity.
Item 27. PRINCIPAL UNDERWRITER
(a) Lord Abbett Distributor LLC serves as principal underwriter for the Registrant. Lord Abbett Distributor LLC also serves as principal underwriter for the following Lord Abbett-sponsored funds:
Lord Abbett Affiliated Fund, Inc.
Lord Abbett Blend Trust
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Global Fund, Inc.
Lord Abbett Investment Trust
Lord Abbett Large-Cap Growth Fund
Lord Abbett Mid-Cap Value Fund, Inc.
Lord Abbett Research Fund, Inc.
Lord Abbett Securities Trust
Lord Abbett Series Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett Tax-Free Income Trust
(b) Lord Abbett Distributor LLC is a wholly-owned subsidiary of Lord, Abbett & Co. LLC. The principal officers of Lord, Abbett Distributor LLC are:
NAME AND PRINCIPAL POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
BUSINESS ADDRESS * LORD ABBETT DISTRIBUTOR LLC WITH REGISTRANT
------------------ --------------------------- ---------------------
Robert S. Dow Chief Executive Officer Chairman and President
Paul A. Hilstad General Counsel Vice President & Secretary
Lawrence H. Kaplan Assistant General Counsel Vice President & Assistant
Secretary
Marion Zapolin Chief Financial Officer Not Applicable
|
* Each Officer has a principal business address of:
90 Hudson Street, Jersey City, New Jersey 07302
(c) Not applicable
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. LLC 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 Registrant's Transfer Agent, Custodian, or Shareholder Servicing Agent within the requirements of Rule 31a-3.
Item 29. MANAGEMENT SERVICES
None
Item 30. UNDERTAKINGS
Registrant undertakes to furnish each person to whom a prospectus is delivered with a copy of Registrant's latest annual report to shareholders, upon request and without charge.
Registrant undertakes, if requested to do so by the holders of at least 10% of 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) of the 1940 Act, as amended.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Jersey City, and State of New Jersey on the 19th day of August, 2004.
LORD ABBETT U.S. GOVERNMENT &
GOVERNMENT SPONSORED ENTERPRISES MONEY
MARKET FUND, INC.
BY: /s/ Christina T. Simmons
-------------------------------
Christina T. Simmons
Vice President & Assistant Secretary
BY: /s/ Joan A. Binstock
-------------------------------
Joan A. Binstock
Chief Financial Officer and Vice President
|
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.
SIGNATURES TITLE DATE ---------- ----- ---- Robert S. Dow * Chairman, President August 19, 2004 ---------------- and Director Robert S. Dow E. Thayer Bigelow * Director August 19, 2004 ------------------- E. Thayer Bigelow William H. T. Bush* Director August 19, 2004 ------------------- William H. T. Bush Robert B. Calhoun, Jr.* Director August 19, 2004 ----------------------- Robert B. Calhoun, Jr. Julie A. Hill* Director August 19, 2004 -------------- Julie A. Hill Franklin W. Hobbs* Director August 19, 2004 ------------------ Franklin W. Hobbs C. Alan MacDonald* Director August 19, 2004 ------------------ C. Alan MacDonald Thomas J. Neff* Director August 19, 2004 --------------- Thomas J. Neff |
* By /s/ Christina T. Simmons
-----------------------------------
Christina T. Simmons
Attorney - in - Fact*
|
POWER OF ATTORNEY
Each person whose signature appears below on this Registration Statement hereby constitutes and appoints Paul A. Hilstad, Lawrence H. Kaplan and Christina T. Simmons, each of them, with full power to act without the other, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities (until revoked in writing) to sign any and all amendments to this Registration Statement of each Fund enumerated on Exhibit A hereto (including post-effective amendments and amendments thereto), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
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.
SIGNATURES TITLE DATE ---------- ----- ---- /s/ Robert S. Dow Chairman, President March 11, 2004 ------------------ and Director/Trustee Robert S. Dow /s/ E. Thayer Bigelow Director/Trustee March 11, 2004 --------------------- E. Thayer Bigelow /s/ William H.T. Bush Director/Trustee March 11, 2004 --------------------- William H. T. Bush /s/ Robert B. Calhoun, Jr. Director/Trustee March 11, 2004 -------------------------- Robert B. Calhoun, Jr. /s/ Julie A. Hill Director/Trustee March 11, 2004 ------------------ Julie A. Hill /s/ Franklin W. Hobbs Director/Trustee March 11, 2004 --------------------- Franklin W. Hobbs /s/ C. Alan MacDonald Director/Trustee March 11, 2004 --------------------- C. Alan MacDonald /s/ Thomas J. Neff Director/Trustee March 11, 2004 ------------------ Thomas J. Neff |
EXHIBIT A
Lord Abbett Affiliated Fund, Inc.
Lord Abbett Blend Trust
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Global Fund, Inc.
Lord Abbett Investment Trust
Lord Abbett Large-Cap Growth Fund
Lord Abbett Mid-Cap Value Fund, Inc.
Lord Abbett Research Fund, Inc.
Lord Abbett Securities Trust
Lord Abbett Series Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett Tax-Free Income Trust
Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund, Inc.
Exhibit 99.23(a)(iii)
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
OF
LORD ABBETT U.S. GOVERNMENT & GOVERNMENT SPONSORED ENTERPRISES
MONEY MARKET FUND, INC.
LORD ABBETT U.S. GOVERNMENT & GOVERNMENT SPONSORED ENTERPRISES MONEY MARKET FUND, INC., a Maryland corporation having its principal office c/o The Prentice-Hall Corporation System, 11 East Chase Street, Baltimore, Maryland 21202 (hereinafter called the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland, that:
FIRST: The Corporation presently has authority to issue 1,500,000,000 shares of capital stock, of the par value $.001 each, having an aggregate par value of $1,500,000. The Board of Directors has previously classified and designated 800,000,000 authorized shares as Class A shares, 400,000,000 authorized shares as Class B shares, and 300,000,000 authorized shares as Class C shares.
SECOND: Pursuant to the authority of the Board of Directors to classify and reclassify unissued shares of stock of the Corporation and to classify a series into one or more classes of such series, the Board of Directors hereby classifies and reclassifies 100,000,000 authorized but unissued Class A shares of the Corporation as Class Y shares of the Corporation, resulting in 700,000,000 authorized Class A shares, 400,000,000 authorized Class B shares, 300,000,000 authorized Class C shares, and 100,000,000 authorized Class Y shares.
THIRD: Subject to the power of the Board of Directors to classify and reclassify unissued shares, all shares of the Corporation hereby classified or reclassified as specified in Article Second above shall be invested in the same investment portfolio of the Corporation and shall have the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption set forth in Article V of the Articles of Incorporation of the Corporation (hereinafter called the "Articles") and shall be subject to all other provisions of the Articles relating to stock of the Corporation generally.
FOURTH: The shares of stock of the Corporation hereby classified or reclassified as specified in Article Second above have been duly classified by the Board of Directors under the authority contained in the Articles.
FIFTH: The Corporation is registered as an open-end company under the Investment Company Act of 1940.
IN WITNESS WHEREOF, the Corporation has caused these presents to be signed in its name and on its behalf by its Vice President and witnessed by its Assistant Secretary on August 11, 2004.
LORD ABBETT U.S. GOVERNMENT &
GOVERNMENT SPONSORED ENTERPRISES
MONEY MARKET FUND, INC.
By: /s/ PAUL A. HILSTAD
------------------------
Paul A. Hilstad
Vice President & Secretary
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WITNESS:
/s/ CHRISTINA T. SIMMONS ------------------------ Christina T. Simmons Vice President and Assistant Secretary |
THE UNDERSIGNED, Vice President and Secretary of LORD ABBETT U.S.
GOVERNMENT & GOVERNMENT SPONSORED ENTERPRISES MONEY MARKET FUND, INC., who
executed on behalf of said Corporation the foregoing Articles Supplementary, of
which this Certificate is made a part, hereby acknowledges, in the name and on
behalf of said Corporation, the foregoing Articles Supplementary to be the
corporate act of said Corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the authorization and approval thereof are true in all material
respects under the penalties of perjury.
/s/ PAUL A. HILSTAD --------------------- Paul A. Hilstad Vice President & Secretary |
Exhibit 99.23(b)
(as amended 4/20/2004)
BY-LAWS
OF
LORD ABBETT U.S. GOVERNMENT & GOVERNMENT SPONSORED
ENTERPRISES MONEY MARKET FUND, INC.
(a Maryland corporation)
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office of the Corporation in Maryland shall be in the City of Baltimore, and the name of the resident agent in charge thereof is the Prentice-Hall Corporation Systems, Maryland.
Section 2. OTHER OFFICES. The Corporation may also have an office in the City and State of New York and offices at such other places as the Board of Directors may from time to time determine.
ARTICLE II
STOCKHOLDERS MEETINGS
Section 1. ANNUAL MEETINGS. The Corporation shall not hold an annual meeting of its stockholders in any fiscal year of the Corporation unless required in accordance with the following sentence. The Chairman of the Board or the President shall call an annual meeting of the stockholders when the election of directors is required to be acted on by the stockholders under the Investment Company Act of 1940, as
amended, and the Chairman of the Board, the President, a Vice President, the Secretary or any director shall call an annual meeting of stockholders at the request in writing of a majority of the Board of Directors or of stockholders holding at least one-quarter of the stock of the Corporation outstanding and entitled to vote at the meeting. Any annual meeting of the stockholders held pursuant to the foregoing sentence shall be held at such time and at such place, within the City of New York or elsewhere, as may be fixed by the Chairman of the Board or the President or the Board of Directors or by the stockholders holding at least one-quarter of the stock of the Corporation outstanding and entitled to vote, as the case may be, and as may be stated in the notice setting forth such call, provided that any stockholders requesting such meeting shall have paid to the Corporation the reasonably estimated cost of preparing and mailing the notice thereof, which the Secretary shall determine and specify to such stockholders. Any meeting of stockholders held in accordance with this Section 1 shall for all purposes constitute the annual meeting of stockholders for the fiscal year of the Corporation in which the meeting is held and, without limiting the generality of the foregoing, shall be held for the purposes of (a) acting on any such matter or matters so required to be acted on by stockholders under the Investment Company Act of 1940, as amended, and (b) electing directors to hold the offices of any directors who have held office for more than one year (or, in the case of directors elected prior to July 1, 1987, who have held office for more than three years) or who have been elected by the Board of Directors to fill vacancies which result from any cause, and for transacting such other business as may properly be brought before the meeting. Only such business, in addition to that prescribed by law, by the Articles of Incorporation and by these By-Laws, may be brought before such meeting as may be
specified by resolution of the Board of Directors or by writing filed with the Secretary of the Corporation and signed by the Chairman of the Board or by the President or by a majority of the directors or by stockholders holding at least one-quarter of the stock of the Corporation outstanding and entitled to vote at the meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders for any purpose or purposes may be held upon call by the President or by a majority of the Board of Directors, and shall be called by the President, a Vice President, the Secretary or any director at the request in writing of a majority of the Board of Directors or of stockholders holding at least one-quarter of the stock of the Corporation outstanding and entitled to vote at the meeting, at such time and at such place where an annual meeting of stockholders could be held, as may be fixed by the President or the Board of Directors or by the stockholders holding at least one-quarter of the stock of the Corporation outstanding and so entitled to vote, as the case may be, and as may be stated in the notice setting forth such call. Such request shall state the purpose or purposes of the proposed meeting, and only such purpose or purposes so specified may properly be brought before such meeting.
Section 3. NOTICE OF MEETINGS. Written or printed notice of every annual or special meeting of stockholders, stating the time and place thereof and the general nature of the business proposed to be transacted at any such meeting, shall be delivered personally or mailed not less than 10 nor more than 90 days previous thereto to each stockholder of record entitled to vote at the meeting at his address as the same appears on the books of the Corporation. Meetings may be held without notice if all of the stockholders entitled to vote are present or represented at the meeting, or if notice is
waived in writing, either before or after the meeting, by those not present or represented at the meeting. No notice of an adjourned meeting of the stockholders other than an announcement of the time and place thereof at the preceding meeting shall be required.
Section 4. QUORUM. At every meeting of the stockholders the holders of record of one-third of the outstanding shares of the stock of the Corporation entitled to vote at the meeting, whether present in person or represented by proxy, shall, except as otherwise provided by law, constitute a quorum. If at any meeting there shall be no quorum, the holders of record of a majority of such shares entitled to vote at the meeting so present or represented may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall have been obtained, at which time any business may be transacted which might have been transacted at the meeting as originally called.
Section 5. VOTING. All elections shall be had and all questions decided by a majority of the votes cast, without regard to Class, at a duly constituted meeting, except as otherwise provided by law or by the Articles of Incorporation or by these By-laws and except that with respect to a question as to which the holders of Shares of any Class or Classes are entitled or required to vote as a Separate Class or a Combined Class, as the case may be, such question shall be decided as to such Separate Class or such Combined Class, as the case may be, by a majority of the votes cast by Shares of such Separate Class or such Combined Class, as the case may be.
With respect to all Shares having voting rights (a) a shareholder may vote the shares owned of record by him either in person or by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact, provided that no proxy shall be
valid after eleven months from its date unless otherwise provided in the proxy and (b) in all elections for directors every shareholder shall have the right to vote, in person or by proxy, the Shares owned of record by him, for as many persons as there are directors to be elected and for whose election be has a right to vote. Any shareholder may give authorization by telephone, facsimile, or the Internet for another person to execute his or her proxy. Unless otherwise specifically limited by their terms, proxies shall entitle the holder thereof to vote at any adjournment of a meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 1. GENERAL POWERS. The property, affairs and business of the Corporation shall be managed by the Board of Directors, provided, however, that the Board of Directors may authorize the Corporation to enter into an agreement or agreements with any person, corporation, association, partnership or other organization, subject to the Board's supervision and control, for the purpose of providing managerial, investment advisory and related services to the Corporation which may include management or supervision of the investment portfolio of the Corporation.
Section 2. NUMBER, CLASS, QUORUM, ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The Board of Directors of the Corporation shall consist of not less than three or more than fifteen persons, none of whom need be stockholders of the Corporation. The number of directors (within the above limits) shall be determined by the Board of Directors from time to time, as it sees fit, by vote of a majority of the whole Board. Directors elected prior to July 1, 1987, shall be divided into three classes, each to
hold office for a term of three years; directors elected thereafter shall consist of one class only. The directors shall be elected at each annual meeting of stockholders and, whether or not elected for a specific term, shall hold office, unless sooner removed, until their respective successors are elected and qualify.
One-third of the whole Board, but in no event less than two, shall constitute a quorum for the transaction of business, but if at any meeting of the Board there shall be less than a quorum present, a majority of the directors present may adjourn the meeting from time to time until a quorum shall have been obtained, when any business may be transacted which might have been transacted at the meeting as originally convened. No notice of an adjourned meeting of the directors other than an announcement of the time and place thereof at the preceding meeting shall be required. The acts of the majority of the directors present at any meeting at which there is a quorum shall be the acts of the Board, except as otherwise provided by law, by the Articles of Incorporation or by these By-Laws.
Section 3. VACANCIES. The Board of Directors, by vote of a majority of the whole Board, may elect directors to fill vacancies in the Board resulting from an increase in the number of directors or from any other cause. Directors so chosen shall hold office until their respective successors are elected and qualify, unless sooner displaced pursuant to law or these By-Laws. The stockholders, at any meeting called for the purpose, may, with or without cause, remove any director by the affirmative vote of the holders of a majority of the votes entitled to be cast, and at any meeting called for the purpose may fill the vacancy in the Board thus caused.
Section 4. REGULAR MEETINGS. Regular meetings of the Board of Directors shall be held at such time and place, within or without the State of Maryland, as may from time to time be fixed by Resolution of the Board or as may be specified in the notice of any meeting. No notice of regular meetings of the Board shall be required.
Section 5. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called from time to time by the President, any Vice President or any two directors. Each special meeting of the Board shall be held at such place, either within or outside the State of Maryland, as shall be designated in the notice of such meeting. Notice of each such meeting shall be mailed to each director, at his residence or usual place of business, at least two days before the day of the meeting, or shall be directed to him at such place by telegraph or cable, or be delivered to him personally not later than the day before the day of the meeting. Every such notice shall state the time and place of the meeting but need not state the purposes thereof, except as otherwise expressly provided in these By-Laws or by statute.
Section 6. TELEPHONIC CONFERENCE MEETINGS. Any meeting of the Board or any committee thereof may be held by conference telephone, regardless where each director may be located at the time, by means of which all persons participating in the meeting can hear each other, and participation in such meeting in such manner shall constitute presence in person at such meeting.
Section 7. FEES AND EXPENSES. The directors shall receive such fees and expenses for services to the Corporation as may be fixed by the Board of Directors, subject however, to such limitations as may be provided in the Articles of Incorporation. Nothing herein contained shall be construed to preclude any director from serving the
Corporation in any other capacity as an officer, agent or otherwise and receiving compensation therefor.
Section 8. TRANSACTIONS WITH DIRECTORS. Except as otherwise provided by law or in the Articles of Incorporation, a director of the Corporation shall not in the absence of fraud be disqualified from office by dealing or contracting with the Corporation either as a vendor, purchaser or otherwise, nor in the absence of fraud shall any transaction or contract of the Corporation be void or voidable or affected by reason of the fact that any director, or any firm of which any director is a member, or any corporation of which any director is an officer, director or stockholder, is in any way interested in such transaction or contract; provided that at the meeting of the Board of Directors, at which said contract or transaction is authorized or confirmed, the existence of an interest of such director, firm or corporation is disclosed or made known and there shall be present a quorum of the Board of Directors a majority of which, consisting of directors not so interested, shall approve such contract or transaction. Nor shall any director be liable to account to the Corporation for any profit realized by him from or through any such transaction or contract of the Corporation ratified or approved as aforesaid, by reason of the fact that he or any firm of which he is a member, or any corporation of which he is an officer, director, or stockholder, was interested in such transaction or contract. Directors so interested may be counted when present at meetings of the Board of Directors for the purpose of determining the existence of a quorum. Any contract, transaction or act of the Corporation or of the Board of Directors (whether or not approved or ratified as hereinabove provided) which shall be ratified by a majority of the votes cast at any annual or special meeting at which a quorum is present called for such
purpose, or approved in writing by a majority in interest of the stockholders having voting power without a meeting, shall except as otherwise provided by law, be valid and as binding as though ratified by every stockholder of the Corporation.
Section 9. COMMITTEES. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, each such committee to consist of one or more directors of the Corporation, which, to the extent permitted by law and provided in said resolution, shall have and may exercise the powers of the Board over the business and affairs of the Corporation, and may have power to authorize the seal of the Corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. A majority of the Members of any such committee may determine its action and fix the time and place of its meetings, unless the Board of Directors shall otherwise provide. The Board of Directors shall have power at any time to change the Membership of, to fill vacancies in, or to dissolve any such committee.
Section 10. WRITTEN CONSENTS. Any action required or permitted to be taken at any meeting of the Board of Directors or by any committee thereof may be taken without a meeting, if a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes or proceedings of the Board or committee.
Section 11. WAIVER OF NOTICE. Whenever under the provisions of these By-Laws, or of the Articles of Incorporation, or of any of the laws of the State of Maryland, or other applicable statute, the Board of Directors is authorized to hold any
meeting or take any action after notice or after the lapse of any prescribed period of time, a waiver thereof, in writing, signed by the person or persons entitled to such notice or lapse of time, whether before or after the time of meeting or action stated herein, shall be deemed equivalent thereto. The presence at any meeting of a person or persons entitled to notice thereof shall be deemed a waiver of such notice as to such person or persons.
ARTICLE IV
OFFICERS
Section 1. NUMBER AND DESIGNATION. The Board of Directors shall each year appoint from among their members a Chairman and a President of the Corporation, and shall appoint one or more Vice Presidents, a Secretary and a Treasurer and, from time to time, any other officers and agents as it may deem proper. Any two of the above-mentioned offices, except those of the President and a Vice President, may be held by the same person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity if such instrument be required by law or by these By-Laws to be executed, acknowledged or verified by any two or more officers.
Section 2. TERM OF OFFICE. The term of office of all officers shall be one year or until their respective successors are chosen; but any officer or agent chosen or appointed by the Board of Directors may be removed, with or without cause, at any time, by the affirmative vote of a majority of the members of the Board then in office.
Section 3. DUTIES. Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such
powers and duties as generally appertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the Board of Directors.
ARTICLE V
CERTIFICATE OF STOCK
Section 1. FORM AND ISSUANCE. Each stockholder of the Corporation shall be entitled upon request, to a certificate or certificates, in such form as the Board of Directors may from time to time prescribe, which shall represent and certify the number of shares of stock of the Corporation owned by such stockholder. The certificates for shares of stock of the Corporation shall bear the signature, either manual or facsimile, of the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation or bear a facsimile of such seal. The validity of any stock certificate shall not be affected if any officer whose signature appears thereon ceases to be an officer of the Corporation before such certificate is issued.
Section 2. TRANSFER OF STOCK. The shares of stock of the Corporation shall be transferable on the books of the Corporation by the holder thereof in person or by a duly authorized attorney, upon surrender for cancellation of a certificate or certificates for a like number of shares, with a duly executed assignment and power of transfer endorsed thereon or attached thereto, or, if no certificate has been issued to the holder in respect of shares of stock of the Corporation, upon receipt of written instructions, signed by such holder, to transfer such shares from the account maintained in the name of such holder by
the Corporation or its agent. Such proof of the authenticity of the signatures as the Corporation or its agent may reasonably require shall be provided.
Section 3. LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES. The holder of any stock of the Corporation shall immediately notify the Corporation of any loss, theft, destruction or mutilation of any certificate therefor, and the Board of Directors may, in its discretion, cause to be issued to him a new certificate or certificates of stock, upon the surrender of the mutilated certificate or in case of loss, theft or destruction of the certificate upon satisfactory proof of such loss, theft, or destruction; and the Board of Directors may, in its discretion, require the owner of the lost, stolen or destroyed certificate, or his legal representatives, to give to the Corporation and to such registrar or transfer agent as may be authorized or required to countersign such new certificate or certificates a bond, in such sum as they may direct, and with such surety or sureties, as they may direct, as indemnity against any claim that may be made against them or any of them on account of or in connection with the alleged loss, theft, or destruction of any such certificates.
Section 4. RECORD DATE. The Board of Directors may fix, in advance, a date as the record date for the purpose of determining stockholders entitled to notice of, or to vote at, any meeting of stockholders, or stockholders entitled to receive payment of any dividend or the allotment of any rights, or in order to make a determination of stockholders for any other proper purpose. Such date, in any case, shall be not more than 90 days, and in case of a meeting of stockholders, not less than 10 days, prior to the date on which the particular action requiring such determination of stockholders is to be taken. In lieu of fixing a record date, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, 20 days prior to the date of any meeting of stockholders or the date for payment of any dividend or the allotment of rights. If the stock transfer books are closed for the purpose of determining stockholders entitled to notice of or to vote at a meeting of stockholders, such books shall be closed for at least 10 days immediately preceding such meeting. If no record date is fixed and the stock transfer books are not closed for determination of stockholders, the record date for the determination of stockholders entitled to notice of, or to vote at, a meeting of stockholders shall be at the close of business on the day on which notice of the meeting is mailed or the day 30 days before the meeting, whichever is closer date to the meeting, and the record date for the determination of stockholders entitled to receive payment of a dividend or an allotment of any rights shall be at the close of business on the day on which the resolution of the Board of Directors declaring the dividend or allotment of rights is adopted, provided that the payment or allotment date shall not be more than 90 days after the date of the adoption of such resolution.
ARTICLE VI
CORPORATE BOOKS
The books of the Corporation, except the original or a duplicate stock ledger, may be kept outside the State of Maryland at such place or places as at the Board of Directors may from time to time determine. The original or duplicate stock ledger shall be maintained at the office of the Corporation's transfer agent.
ARTICLE VII
SIGNATURES
Except as otherwise provided in these By-Laws or as the Board of Directors may generally or in particular cases authorize the execution thereof in some other manner, all deeds, leases, transfers, contracts, bonds, notes, checks, drafts and other obligations made, accepted or endorsed by the Corporation and all endorsements, assignments, transfers, stock powers or other instruments of transfer of securities owned by or standing in the name of the Corporation shall be signed or executed by two officers of the Corporation, who shall be the President or a Vice President and a Vice President, the Secretary or the Treasurer.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall be established by resolution of the Board of Directors of the Corporation.
ARTICLE IX
CORPORATE SEAL
The corporate seal of the Corporation shall consist of a flat faced circular die with the word "Maryland" together with the name of the Corporation, the year of its organization, and such other appropriate legend as the Board of Directors may from time to time determine, cut or engrave thereon. In lieu of the corporate seal, when so
authorized by the Board of Directors or a duly empowered committee thereof, a facsimile thereof may be impressed or affixed or reproduced.
ARTICLE X
INDEMNIFICATION
As part of the consideration for agreeing to serve and serving as a director of the Corporation, each director of the Corporation shall be indemnified by the Corporation against every judgment, penalty, fine, settlement, and reasonable expense (including attorneys' fees) actually incurred by the director in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, in which the director was, is, or is threatened to be made a named defendant or respondent (or otherwise becomes a party) by reason of such director's service in that capacity or status as such, and the amount of every such judgement, penalty, fine, settlement and reasonable expense so incurred by the director shall be paid by the Corporation or, if paid by the director, reimbursed to the director by the Corporation, subject only to the conditions and limitations imposed by the applicable provisions of Section 2-418 of the Corporations and Associations Article of the Annotated Code of the State of Maryland and by the provisions of Section 17(h) of the United States Investment Company Act of 1940 as interpreted and as required to be implemented by Securities and Exchange Commission Release No. IC-11330 of September 4, 1980. The foregoing shall not limit the authority of the Corporation to indemnify any of its officers, employees or agents to the extent consistent with applicable law.
ARTICLE XI
AMENDMENTS
All By-Laws of the Corporation shall be subject to alteration, amendment, or repeal, and new By-Laws not inconsistent with any provision of the Articles of Incorporation of the Corporation may be made, either by the affirmative vote of the holders of record of a majority of the outstanding stock of the Corporation entitled to vote in respect thereof, given at an annual meeting or at any special meeting, provided notice of the proposed alteration, amendment, or repeal of the proposed new By-Laws is included in or accompanies the notice of such meeting, or by the affirmative vote of a majority of the whole Board of Directors given at a regular or special meeting of the Board of Directors, provided that the notice of any such special meeting indicates that the By-Laws are to be altered, amended, repealed, or that new By-Laws are to be adopted.
Exhibit 99.23(i)
August 19, 2004
Lord Abbett U.S. Government & Government
Sponsored Enterprises Money Market Fund, Inc.
90 Hudson Street
Jersey City, NJ 07302-3972
Dear Sirs:
You have requested our opinion in connection with your filing of Post-Effective Amendment No. 31 to the Registration Statement on Form N-1A (the "Amendment") under the Securities Act of 1933, as amended (Amendment No. 30 under the Investment Company Act of 1940, as amended), of Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund, Inc., a Maryland corporation (the "Company"), and in connection therewith your registration of Class Y shares of capital stock, with a par value of $.001 each, of the Company (collectively, the "Shares").
We have examined and relied upon originals, or copies certified to our satisfaction, of such company records, documents, certificates, and other instruments as in our judgment are necessary or appropriate to enable us to render the opinion set forth below.
We are of the opinion that the Shares issued in the continuous offering have been duly authorized and, assuming the issuance of the Shares for cash at net asset value and receipt by the Company of the consideration therefor as set forth in the Amendment and that the number of shares issued does not exceed the number authorized, the Shares will be validly issued, fully paid, and nonassessable.
We express no opinion as to matters governed by any laws other than the Title 2 of the Maryland Code: Corporations and Associations. We consent to the filing of this opinion solely in connection with the Amendment. In giving such consent, we do not hereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
WILMER CUTLER PICKERING
HALE AND DORR LLP
By: /s/ Robert G. Gagnall
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Robert G. Bagnall, a partner
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