As filed with the Securities and Exchange Commission April 30, 1997
Registration No. 2-10694
811-0091
______________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM S-6
________________________
POST-EFFECTIVE AMENDMENT NO. 36 TO
REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
_________________________
A. Exact name of Trust:
LEXINGTON CORPORATE LEADERS TRUST FUND
B. Name of depositor:
Lexington Management Corporation
C. Complete address of depositor's principal executive offices:
Lexington Management Corporation
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
D. Name and address of agent for service:
Lisa Curcio
Lexington Corporate Leaders Trust Fund
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
With a copy to:
Carl Frischling, Esq.
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
E. Amount of filing fee:
The Registrant has registered an indefinite number of shares
under the Securities Act of 1933 pursuant to Section 24(f)
of the Investment Company Act of 1940. A Rule 24f-2 Notice
for the Registrant's fiscal year ended December 31, 1996 was
filed on February 26, 1997.
F. Approximate date of proposed public offering:
It is proposed that this filing will become effective April 30, 1997
pursuant to paragraph (b) of Rule 485.
<PAGE>
LEXINGTON CORPORATE LEADERS TRUST FUND
CROSS-REFERENCE SHEET
Pursuant to Rule 404(c) of Regulation C under the Securities Act of 1933.
(Form N-8B-2 Items required by Instructions as to the Prospectus in Form S-6)
FORM N-8B-2 FORM S-6
Item Number Heading in Prospectus
- ----------- ---------------------
I. Organization and General Information
1. (a) Name of Trust and Tax I.D. Number Description of the Trust
(b) Title of securities issued Description of the Trust
2. Name and address of each depositor Cover
3. Name and address of trustee Cover
4. Name and address of principal Cover
underwriter
5. State of organization of Fund Description of the Trust
6. Execution and termination of Highlights; Amendment and
trust indenture Termination
7. Changes of Name Description of the Trust
8. Fiscal Year Miscellaneous
9. Litigation Miscellaneous
10. (a) Registered or bearer Purchase of Participations
(b) Cumulative or distributive Shareholder Services
securities
(c) Redemption How to Redeem Participations
(d) Conversion, transfer, etc. Shareholder Services
(e) Periodic Payment Plan *
(f) Voting Rights Amendment and Termination
<PAGE>
FORM N-8B-2 FORM S-6
Item Number Heading in Prospectus
- ----------- ---------------------
(g) Notice to holders Amendment and Termination
(h) Consents required Amendment and Termination
(i) Other provisions *
11. Type of securities comprising a Unit Description of the Trust
12. Certain information regarding *
periodic payment certificates
13. (a) Load, fees, expenses, etc. Purchase of Participations
(b) Certain information *
regarding periodic
payment certificates
(c) Certain percentages Purchase of Participations
(d) Certain differences in prices Purchase of Participations
(e) Certain other fees, etc. Purchase of Participations
payable by holders
(f) Certain other profits Miscellaneous
(g) Ratio of annual charges to income *
14. Issuance of trust's securities Purchase of Participations
15. Receipt and handling of payments from Description of the Trust
purchasers
16. Acquisition and disposition of Description of The Trust
underlying securities
17. Withdrawal or redemption Description of the Trust
(a) Receipt, custody and Shareholder Services
disposition of income
(b) Reinvestment of distributions Shareholder Services
(c) Reserves or special funds Shareholder Services
(d) Schedule of distributions Nonstandardized Investment
Return
19. Records, accounts and reports Purchase of Participations
20. Certain miscellaneous
provision of trust agreement
(a) Amendment Amendment and Termination
(b) Termination Amendment and Termination
(c)&(d) Trustee, removal and
successor Resignation, Removal, etc.
(e)&(f) Depositor, removal
and successor Resignation, Removal, etc.
21. Loans to security holders *
<PAGE>
FORM N-8B-2 FORM S-6
Item Number Heading in Prospectus
- ----------- ---------------------
22. Limitations on Liability Resignation, Removal, etc.
23. Bonding arrangements *
24. Other material provisions of
trust agreement Miscellaneous
III. Organization, Personnel and Affiliated
25. Organization of depositor Miscellaneous
26. Fees received by depositor Miscellaneous
27. Business of depositor Miscellaneous
28. Certain information as to Miscellaneous
officials and affiliated
persons of depositor
29. Voting securities of depositor Miscellaneous
30. Persons controlling depositor Miscellaneous
31. Payments by depositor for *
certain services
32. Payments by depositor for *
certain other services
rendered to trust
33. Remuneration of employees of *
depositor for certain services
rendered to trust
34. Remuneration of other persons *
for certain services rendered
to trust
IV. Distribution and Redemption of Securities
35. Distribution of trust's Purchase of Participations
securities by states
36. Suspension of sales of trust's *
securities
37. Revocation of authority to *
distribute
38. (a) Method of distribution *
(b) Underwriting agreements *
(c) Selling agreements *
<PAGE>
FORM N-8B-2 FORM S-6
Item Number Heading in Prospectus
- ----------- ---------------------
39. (a) Organization of principal Miscellaneous
underwriters
(b) N.A.S.D. membership of
principal underwriters Miscellaneous
40. Certain fees received by Purchase of Participations;
principal underwriters Miscellaneous
41. (a) Business of principal underwriters Miscellaneous
(b) Branch officers of principal
underwriters *
(c) Salesmen of principal
underwriters *
42. Ownership of trust's securities by Miscellaneous
certain persons
43. Certain brokerage commissions
by principal underwriters *
44. (a) Method of valuation How to Redeem Participations
(b) Schedule as to offering price
(c) Variation in offering price to
certain persons Purchase of Participations
45. Suspension of redemption rights How to Redeem Participations
46. (a) Redemption valuation How to Redeem Participations
(b) Schedule as to redemption price How to Redeem Participations
47. Maintenance of position in *
underlying securities
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of Miscellaneous
trustee
49. Fees and expenses of trustee Miscellaneous
50. Trustee's lien *
VI. Information Concerning Insurance of Holders of Securities
51. Insurance of holders of *
Trust's securities
<PAGE>
FORM N-8B-2 FORM S-6
Item Number Heading in Prospectus
- ----------- ----------------------
VII. Policy of Registrant
52. (a) Provisions of trust Description of the Trust
agreement with respect to
selection or elimination
of underlying securities
(b) Transactions involving Description of the Trust
elimination of underlying
securities
(c) Policy regarding Description of the Trust
substitution elimination
of underlying securities
(d) Fundamental policy not *
otherwise covered
53. Tax status of trust Taxation
VIII. Financial and Statistical Information
54. Fund's securities during last Financial Statements
ten years
55. Certain information regarding *
periodic payment certificates
56. Certain information regarding *
periodic payment certificates
57. Certain information regarding *
periodic payment certificates
58. Certain information regarding *
periodic payment certificates
59. Financial statements Financial Statements
(Instruction 1(c) Form S-6)
PROSPECTUS DATED APRIL 30, 1997
LEXINGTON CORPORATE LEADERS
TRUST FUND
PARK 80 WEST, PLAZA TWO
SADDLE BROOK, NEW JERSEY 07663
Shareholder Services: 1-800-526-0056
Institutional/Financial Adviser Services: 1-800-367-9160
24 Hour Account Information: 1-800-526-0052
- --------------------------------------------------------------------------------
Lexington Corporate Leaders Trust Fund (the "Trust") was created in 1935
with the objective of seeking long term capital growth and income through
investment in an equal number of shares of the common stocks of a fixed list of
American blue chip corporations. See "Description of the Trust" on page 2.
Currently, the Trust is invested in twenty-five such corporations including
Eastman Kodak, General Electric, Mobil, Sears Roebuck and Travelers. Investments
in these corporations, while having potential for long term capital growth and
income, may be considered conservative investments. The value of participations
of the Trust will fluctuate with the market value of the underlying portfolio
securities.
The minimum initial purchase requirement is $1,000 and additional
investments must be at least $50. Participations are sold without a sales or
redemption charge.
- --------------------------------------------------------------------------------
Sponsor: Trustee:
Lexington Management Corporation State Street Bank and Trust Company
Park 80 West, Plaza Two Mutual Fund Services Area
Saddle Brook, New Jersey 07663 Lexington Corporate Leaders Trust Fund
225 Franklin Street
Distributor: Boston, Massachusetts 02110
Lexington Funds Distributor, Inc.
Park 80 West, Plaza Two
Saddle Brook, New Jersey 07663
Participations are not deposits or obligations of (or endorsed or guaranteed
by) any bank, nor are they federally insured or otherwise protected by the
Federal Deposit Insurance Corporation ("FDIC"), the Federal Reserve Board or any
other agency. Investing in the Trust involves investment risks, including the
possible loss of principal, and their value and return will fluctuate.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
- --------------------------------------------------------------------------------
READ AND RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE.
<PAGE>
HIGHLIGHTS
THE TRUST AND ITS OBJECTIVE
THE TRUST WAS CREATED IN 1935 WITH THE OBJECTIVE OF SEEKING LONG
TERM CAPITAL GROWTH AND INCOME THROUGH INVESTMENT IN AN EQUAL
NUMBER OF SHARES OF COMMON STOCK OF A FIXED LIST OF AMERICAN BLUE
CHIP CORPORATIONS. CURRENTLY THE TRUST IS INVESTED IN TWENTY-FIVE SUCH
CORPORATIONS. THERE CAN BE NO ASSURANCE THAT THE TRUST'S OBJECTIVE
WILL BE ACHIEVED. SEE "DESCRIPTION OF THE TRUST" HEREIN.
PUBLIC OFFERING PRICE
The initial purchase requirement for an investment in the Trust is $1,000
and additional investments must be at least $50. Investors receive a fractional
undivided interest in and ownership of the Trust Fund and Distributive Fund
described below which is called a participation. Participations are offered at a
price equal to the net asset value next determined after an order is received.
SPECIAL CONSIDERATIONS
The value of a participation fluctuates with the market value of the
underlying portfolio securities of the Trust. The dividend income, if any, from
the portfolio securities is subject to fluctuation which in turn will affect the
amounts of distributions made to participants. An investor in the Trust has no
assurance against loss in a declining market and redemption at a time when the
market value of the participations is less than their cost, will result in a
loss to the investor.
SEMI-ANNUAL DISTRIBUTIONS
Semi-annual distributions on June 30 and December 31 of each year
(Distribution Date) will be reinvested at net asset value in additional
participations of the Trust unless the participant notifies the Trustee to pay
such distributions in cash.
TAXATION
For Federal income tax purposes, (1) the Trust will be treated as a fixed
investment trust and will not be subject to Federal income tax, (2) each
participant will be treated as the owner of his pro rata portion of the common
stock of the corporations held by the Trust, (3) each participant will be
required to include in his gross income his pro rata portion of the dividends
and interest received by the Trust (including the amounts of such dividends and
interest that are not distributed to participants but are used to pay the fees
and expenses of the Trust), at the time such dividends and interest are received
by the Trust, not at the later time such dividends and interests are distributed
to participants or reinvested in additional participations, and (4) each
individual participant who itemizes deductions may deduct his pro rata portion
of the fees and expenses of the Trust only to the extent such amount, together
with his other miscellaneous itemized deductions, exceeds 2% of his adjusted
gross income. See "Taxation" herein.
THE INDENTURE
The Amended and Restated Indenture is effective as of November 14, 1989, as
amended on April 23, 1993 (the "Indenture"). Both the Indenture and the Trust
will terminate on November 30, 2100.
DESCRIPTION OF THE TRUST
Corporate Leaders Trust Fund was created under New York Law by an Indenture
dated November 18, 1935, as amended and supplemented, between Empire Trust
Company (now The Bank of New York by merger) as Trustee, and Corporate Leaders
of America, Inc., as Sponsor. On October 29, 1971, Corporate Leaders of America,
Inc. was merged into Piedmont Capital Corporation, which designated Manlex
Corporation as Sponsor of the Trust on March 25, 1981. On October 31, 1988
holders of Corporate Leaders Trust Fund Certificates Series B voted to approve
an Amended and Restated Indenture which, among other things, designated
Lexington Management Corporation, the parent company of Manlex Corporation, as
Sponsor, and changed the name to Lexington Corporate Leaders Trust Fund (Federal
I.D. #13-6061925). Holders of Corporate Leaders Trust Fund Certificates Series A
continue to be governed by the initial Indenture. This Prospectus pertains
solely to Lexington Corporate Leaders Trust Fund Certificates Series B (herein
referred to as the "Trust"). All discussions herein of articles and sections of
the Indenture refer to the Amended and Restated Indenture (the "Indenture").
The Trust is comprised of a Trust Fund and a Distributive Fund. The Trust
Fund is composed of stock units, each unit consisting of one share of common
2
<PAGE>
stock of each of the twenty-five American corporations (except with respect to
shares received from spin-offs of existing portfolio securities--see discussion
below) and such cash as may be available for the purchase of stock units. Cash
received on sales of participations, (excluding the portion thereof, if any,
attributable to the value of, and therefore deposited in, the Distributive Fund)
including distributions by the Trust which are reinvested in additional
participations under the Distribution Reinvestment Program described herein, is
held in the Trust Fund without interest until receipt of sufficient cash to
purchase at least one hundred stock units. To the extent monies remain
uninvested in the Trust, the Trustee will derive a benefit therefrom.
All dividends and any other cash distributions received by the Trust with
respect to the common stock held in the Trust Fund are deposited in the
Distributive Fund. Any non-cash distributions received by the Trust with respect
to the common stock held in the Trust Fund are sold by the Trustee and the
proceeds of sale are deposited in the Distributive Fund. The Trustee may invest
the funds deposited in the Distributive Fund in debt obligations issued or
guaranteed by the United States Government, its agencies or instrumentalities,
or in repurchase agreements collateralized by such United States Government
obligations, which mature prior, and as close as practicable, to the next
Distribution Date. The interest earned on such investments is also deposited in
the Distributive Fund. Fees and expenses of the Trust are paid from the
Distributive Fund. The Trustee may from time to time set aside out of the
Distributive Fund a reserve for payments of taxes or other governmental charges.
On each Distribution Date, the Trustee uses the money in the Distributive
Fund to purchase additional participations for participants under the
Distribution Reinvestment Program described herein, unless the participant has
elected to receive his distribution in cash.
In the event of the merger, consolidation, re-capitalization or
readjustment of the issuer of any portfolio security with any other corporation,
the Sponsor may instruct the Trustee, in writing, to accept or reject such offer
or take such other action as the Sponsor may deem proper. Any securities
received in exchange shall be held by the Portfolio and shall be subject to the
terms and conditions of the Amended and Restated Indenture to the same extent as
the securities originally held in the Portfolio. Securities received pursuant to
an exchange may result in the Trust holding fewer shares than originally held in
the Portfolio security. Each stock unit issued after the effective date of such
an exchange will include one share of the corporation received on exchange.
The Trust will enter into repurchase agreements only with commercial banks
and dealers in U.S. government securities. Repurchase agreements when entered
into with dealers, will be fully collateralized including the interest earned
thereon during the entire term of the agreement. If the institution defaults on
the repurchase agreement, the Trust will retain possession of the underlying
securities. In addition, if bankruptcy proceedings are commenced with respect to
the seller, realization on the collateral by the Trust may be delayed or limited
and the Trust may incur additional costs. In such case the Trust will be subject
to risks associated with changes in the market value of the collateral
securities.
The Trust is invested generally in an equal number of shares of the common
stock of a fixed list of twenty-five American corporations. The Trust's
portfolio investments are not managed and are expected to remain fixed. Of the
securities held on December 31, 1996, 17.3% were in consumer products, 20.7%
were in international oil companies and 9.8% were in chemical and fertilizer
companies. A complete list of the securities is contained in the financial
statements included herein. The value of a participation in the Trust fluctuates
with the market value of the underlying common stock held by the Trust. The
dividend income, if any, from the common stocks is subject to fluctuation,
which, in turn will affect the amounts of distributions made to participants.
The Sponsor may direct the Trustee to sell the shares of common stock of
any of the twenty-five corporations if (i) the corporation has failed to declare
or pay dividends on the common stock; (ii) a materially adverse legal proceeding
has been instituted which affects the declaration or payment of dividends; (iii)
a breach of covenant or warranty exists which may materially affect the payment
of dividends; (iv) a default in payment of principal or income on any other
outstanding securities of the corporation occurs which may affect the payment of
dividends; or (v) the common stock ceased to be listed on the New York Stock
Exchange and after fifteen days has not been reinstated. The proceeds of any
such sale shall be deposited in the Distributive Fund.
------------------------------
3
<PAGE>
SELECTED FINANCIAL INFORMATION
The following table of selected financial information has been audited by
McGladrey & Pullen, LLP independent certified public accountants, whose report
thereon appears elsewhere in this prospectus.
<TABLE>
<CAPTION>
Per participation operating
performance (for a
Thirteen
participation outstanding
Months Years
throughout the period)
Ended Ended
Years Ended December 31,
December November
- -------------------------------------------------------------------------
1996 1995 1994 1993 1992
1991 1990 1989 31, 1988 30, 1987
---- ---- ---- ---- ----
- ---- ---- ---- -------- --------
<S> <C> <C> <C> <C> <C>
<C> <C> <C> <C> <C>
Net asset value,
beginning year ............. $13.74 $10.51 $12.78 $11.62 $11.52
$10.53 $13.68 $12.00 $10.93 $14.26
------ ------ ------ ------ ------
- ------ ------ ------ ------ ------
Income from investment
operations:
Net investment income ...... .28 .28 .31 .33 .36
.39 .43 .46 .77 .55
------ ------ ------ ------ ------
- ------ ------ ------ ------ ------
Net realized and
unrealized gain
(loss) on investments ..... 2.79 3.82 (.45) 1.71 .70
1.64 (.89) 3.18 2.27 (1.31)
------ ------ ------ ------ ------
- ------ ------ ------ ------ ------
Total from investment
operations ................. 3.07 4.10 (.14) 2.04 1.06
2.03 (.46) 3.64 3.04 (.76)
------ ------ ------ ------ ------
- ------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income ........ (.28) (.03) (.90) (.28) (.35)
(.28) (1.29) (1.00) (.58) (.96)
Distributions from
income and realized
gains included in
terminations ............. (.02) (.02) (.01) -- (.01)
- -- (.01) (.02) (.02) (.02)
Distributions from capital . (.18) (.54) (.90) (.27) (.25)
(.36) (.96) (.48) (.55) (1.04)
------ ------ ------ ------ ------
- ------ ------ ------ ------ ------
Total distributions ... (.76) (.87) (2.13) (.88) (.96)
(1.04) (2.69) (1.96) (1.97) (2.57)
------ ------ ------ ------ ------
- ------ ------ ------ ------ ------
Change in net asset
value for the year ......... 2.31 3.23 (2.27) 1.16 .10
.99 (3.15) 1.68 1.07 (3.33)
------ ------ ------ ------ ------
- ------ ------ ------ ------ ------
Net asset value
at end of year ............. $16.05 $13.74 $10.51 $12.78 $11.62
$11.52 $10.53 $13.68 $12.00 $10.93
====== ====== ====== ====== ======
====== ====== ====== ====== ======
Total Return.................. 22.43% 39.21% (0.77%) 17.57% 9.63%
19.41% (4.20%) 30.34% 28.21% (7.81%)
Ratio/Supplemental Data
Net Assets,
end of year (000)........... $392,295 $256,427 $156,286 $147,181 $105,712
$98,104 $85,961 $94,379 $77,868 $65,967
Ratios to average
net asset of:
Expenses ................... .63% .58% .62% .57% .60%
.67% .67% .72% .26%* .08%
Net investment income ...... 2.05% 2.57% 2.84% 2.78% 3.16%
3.46% 3.57% 3.34% 5.88%* 4.01%
*Annualized
</TABLE>
HOW TO PURCHASE PARTICIPATIONS
INITIAL INVESTMENT--MINIMUM $1,000. BY MAIL: Send a check payable to Lexington
Corporate Leaders Trust Fund, along with a completed New Account Application to
State Street Bank and Trust Company (the "Agent").
SUBSEQUENT INVESTMENTS--MINIMUM $50. BY MAIL: Send a check payable to Lexington
Corporate Leaders Trust Fund, to the Agent, accompanied by either the detachable
form which is part of the confirmation of a prior transaction or a letter
indicating the dollar amount of the investment and identifying the Trust,
account number and registration.
BROKER-DEALERS: You may invest in participations of the Trust through
broker-dealers who are members of the National Association of Securities
Dealers, Inc., and other financial institutions and who have selling agreements
with Lexington Funds Distributor, Inc. Broker-dealers and financial institutions
who process such purchase and sale transactions for their customers may charge a
transaction fee for these services. The fee may be avoided by purchasing
participations directly from the Trust.
THE OPEN ACCOUNT: By investing in the Trust, a shareholder appoints the Agent,
as his agent, to establish an open account to which all participations
purchased, including additional participations purchased under the Distribution
Reinvestment Program, will be credited. Participation certificates will be
issued for full participations only when requested in writing. Unless payment
for participations is made by certified or cashier's check or federal funds
wire, certificates will not be issued for 30 days. In order to facilitate
redemptions and transfers, most participation holders elect not to receive
certificates.
4
<PAGE>
After an Open Account is established, payments can be provided for by
"Lex-O-Matic" or other authorized automatic bank check program accounts (checks
drawn on the investor's bank periodically for investment in the Trust).
Automatic Investing Plan with "Lex-O-Matic". A shareholder may arrange to
make additional purchases of shares automatically on a monthly or quarterly
basis. The investments of $50 or more are automatically deducted from a checking
account on or about the 15th day of each month. The institution must be an
Automated Clearing House (ACH) member. Should an order to purchase shares of a
fund be cancelled because your automated transfer does not clear, you will be
responsible for any resulting loss incurred by that fund. The shareholder
reserves the right to discontinue the Lex-O-Matic program provided written
notice is given ten days prior to the scheduled investment date. Further
information regarding this service can be obtained from Lexington by calling
1-800-526-0056.
On payroll deduction accounts administered by an employer and on payments
into qualified pension or profit sharing plans and other continuing purchase
programs, there are no minimum purchase requirements.
TERMS OF OFFERING: If an order to purchase participations is cancelled because
the investor's check does not clear, the purchaser will be responsible for any
loss incurred by the Trust. To recover any such loss the Trust reserves the
right to redeem participations owned by the purchaser, and may prohibit or
restrict the purchaser in placing future orders in any of the Lexington Funds.
The Trust reserves the right to reject any order, and to waive or lower the
investment minimums with respect to any person or class of persons, including
participation holders of the Trust's special investment programs. An order to
purchase participations is not binding on the Trust until it has been confirmed
by the Agent.
SHAREHOLDER SERVICING AGENTS: The Trust may enter into Shareholder Servicing
Agreements with one or more Shareholder Servicing Agents. The Shareholder
Servicing Agent may, as agent for its customers, among other things: answer
customer inquiries regarding account status, account history and purchase and
redemption procedures; assist shareholders in designating and changing dividend
options, account designations and addresses; provide necessary personnel and
facilities to establish and maintain shareholder accounts and records; assist in
processing purchase and redemption transactions; arrange for the wiring of
funds; transmit and receive funds in connection with customer orders to purchase
or redeem shares; verify and guarantee shareholder signatures in connection with
redemption orders and transfers and changes in shareholder-designated accounts;
furnish monthly and year-end statements and confirmations of purchases and
redemptions; transmit, on behalf of the Trust, proxy statements, annual reports,
updated prospectuses and other communications to shareholders of the Trust;
receive, tabulate and transmit to the Trust proxies executed by shareholders
with respect to meetings of shareholders of the Trust; and provide such other
related services as the Trust or a shareholder may request. For these services,
each Shareholder Servicing Agent receives fees, which may be paid periodically,
provided that such fees will not exceed, on an annual basis, 0.25% of the
average daily net assets of the Trust represented by participations owned during
the period for which payment is made. LMC, at no cost to the Trust, may pay to
Shareholder Servicing Agents additional amounts from its past profits. Each
Shareholder Servicing Agent may, from time to time, voluntarily waive all or a
portion of the fees payable to it.
ACCOUNT STATEMENTS: The Agent will send participation holders either purchasing
or redeeming participations of the Trust, a confirmation of the transaction
indicating the date the purchase or redemption was accepted, the number of
participations purchased or redeemed, the purchase or redemption price per
participation, and the amount purchased or redemption proceeds. A statement is
also sent to participation holders whenever a distribution is paid, or when a
change in the registration, address, or dividend option occurs. PARTICIPATION
HOLDERS ARE URGED TO RETAIN THEIR ACCOUNT STATEMENTS FOR TAX PURPOSES.
HOW TO REDEEM PARTICIPATIONS
BY MAIL: Send to the Agent (see the back cover of this prospectus for the
Agent's address): (1) a written request for redemption, signed by each
registered owner exactly as the participations are registered including the name
of the Trust, account number and exact registration; (2) participation
certificates for any participations to be redeemed which are held by the
participation holder; (3) signature guarantees, when required, and (4) the
additional documents required for redemptions by corporations, executors,
administrators, trustees, and guardians. REDEMPTIONS BY MAIL WILL NOT BECOME
EFFECTIVE UNTIL ALL DOCUMENTS IN PROPER FORM HAVE BEEN RECEIVED BY THE AGENT. IF
A PARTICIPATION HOLDER HAS ANY QUESTIONS REGARDING THE REQUIREMENTS FOR
REDEEMING PARTICIPATIONS, HE SHOULD CALL THE TRUST AT THE TOLL FREE NUMBER ON
5
<PAGE>
THE BACK COVER PRIOR TO SUBMITTING A REDEMPTION REQUEST. If a redemption request
is sent to the Trust in New Jersey, it will be forwarded to the Agent and the
effective date of redemption will be the date received by the Agent.
Checks for redemption proceeds will normally be mailed within three
business days, but will not be mailed until all checks in payment for the
participations to be redeemed have been cleared.
SIGNATURE GUARANTEE: Signature guarantees are required in connection with (a)
redemptions by mail involving $25,000 or more; (b) all redemptions by mail,
regardless of the amount involved, when the proceeds are to be paid to someone
other than the registered owners; (c) changes in instructions as to where the
proceeds of redemptions are to be sent, and (d) participation transfer requests.
The Agent requires that the guarantor be either a commercial bank which is
a member of the Federal Deposit Insurance Corporation, a trust company, a
savings and loan association, a savings bank, a credit union, a member firm of a
domestic stock exchange, or a foreign branch of any of the foregoing. A NOTARY
PUBLIC IS NOT AN ACCEPTABLE GUARANTOR.
With respect to redemption requests submitted by mail, the signature
guarantees must appear either: (a) on the written request for redemption, (b) on
a separate instrument of assignment ("stock power") specifying the total number
of participations to be redeemed, or (c) on all participation certificates
tendered for redemption and, if participations held by the Agent are also being
redeemed, on the letter or stock power.
REDEMPTION PRICE: The redemption price will be the net asset value per
participation of the Trust next determined after receipt by the Agent of a
redemption request in proper form.
The redemption price per participation is computed on (i) any Trust
business day, which is each day on which the New York Stock Exchange, the
Federal Reserve Bank of New York and the Trustee are open for business and on
such other days as there is sufficient trading in the Trust's securities to
materially affect net asset value per participation except for certain national
holidays. The calculation is made by (a) adding: (i) the aggregate value of the
portfolio securities; (ii) available cash; (iii) amounts in the Distributive
Fund, including dividends on the portfolio securities and interest on the
investment of monies in the Distributive Fund; and (iv) any other assets of the
Trust and (b) deducting: (i) taxes and other governmental charges; (ii) fees and
expenses of the Trust; (iii) cash allocated for distribution to participants of
record as of a date prior to the evaluation; and (iv) any other liabilities of
the Trust.
Participations will be redeemed in cash from the Trust Fund and the
Distributive Fund at a price equal to the next determined participation value
following receipt of an appropriate request multiplied by the number of
participations being redeemed and subject to payment by the participant of any
tax or other governmental charge. If there is insufficient cash in the Trust
Fund to pay the portion of the redemption price attributable thereto, the
Trustee shall sell stock units. Sales of such securities will be at the best
price obtainable subject to any minimum value limitations on sales specified by
the Sponsor.
A security listed or traded on a recognized stock exchange is valued at its
last sale price prior to the time when assets are valued on the principal
exchange on which the security is traded. If no sale is reported at that time,
the mean between the current bid and asked price will be used. All other
securities for which over-the-counter market quotations are readily available
are valued at the mean between the last current bid and asked price. Short-term
securities having maturity of 60 days or less are valued at cost, when it is
determined by the Trustee that amortized cost reflects the fair value of such
securities. Securities for which market quotations are not readily available and
other assets are valued at fair value as determined in good faith by the
Trustee.
The Trustee may, in its discretion, or when directed by the Sponsor in
writing, suspend the right of redemption or postpone the date of payment of the
redemption price for more than seven days (a) for any period during which the
New York Stock Exchange is closed or the Securities and Exchange Commission
("SEC") determines that trading on the Exchange is restricted, (b) when there is
an emergency as determined by the SEC as a result of which it is not reasonably
practicable for the Trust to dispose of securities owned by it or to determine
fairly the value of its net assets, or (c) for such other periods as the SEC may
by order permit for the protection of participants. Due to the proportionately
high cost of maintaining smaller accounts, the Trust reserves the right to
redeem all participations in an account with a value of less than $500 other
than as a result of a change in net asset value and mail the proceeds to the
participant. Participants will be notified before these redemptions are to be
made and will have thirty (30) days to make an additional investment to bring
their accounts up to the required minimum.
6
<PAGE>
SHAREHOLDER SERVICES
TRANSFER
Participations may be transferred to another owner. A signature guarantee
of the registered participant is required on the letter of instruction or other
instrument of assignment.
SYSTEMATIC WITHDRAWAL PLAN
Participants may elect to withdraw cash in fixed amounts from their
accounts at regular intervals. The minimum investment to establish a Systematic
Withdrawal Plan is $10,000. If the proceeds are to be mailed to someone other
than the registered owner, a signature guarantee is required.
GROUP SUB-ACCOUNTING: To minimize recordkeeping by fiduciaries, corporations and
certain other investors, the minimum initial investment may be waived.
EXCHANGE PRIVILEGE
Participations may be exchanged for shares of the following funds managed
by the Sponsor, Lexington Management Corporation, (the "Lexington Funds") on the
basis of relative net asset value per share at the time of the exchange. In the
event shares of one or more of these funds being exchanged by a single investor
have a value in excess of $500,000, participations will not be purchased until
the third business day following the redemption of the shares being exchanged in
order to enable the redeeming fund to utilize normal securities settlement
procedures in transferring the proceeds of the redemption to the Trust.
EXCHANGES MAY NOT BE MADE UNTIL ALL CHECKS IN PAYMENT FOR PARTICIPATIONS TO BE
EXCHANGED HAVE BEEN CLEARED.
The Lexington Funds currently available for exchange are:
LEXINGTON WORLDWIDE EMERGING MARKETS FUND, INC. (NASDAQ Symbol: LEXGX)/Seeks
long-term growth of capital primarily through investment in equity
securities of companies domiciled in, or doing business in, emerging
countries and emerging markets.
LEXINGTON INTERNATIONAL FUND, INC.* (NASDAQ Symbol: LEXIX)/Seeks long term
growth of capital through investment in common stocks of companies
domiciled in foreign countries.
LEXINGTON CROSBY SMALL CAP ASIA GROWTH FUND, INC.* (NASDAQ Symbol: LXCAX)/Seeks
long-term capital appreciation through investment in companies domiciled in
the Asia Region with a market capitalization of less than $1 billion.
LEXINGTON TROIKA DIALOG RUSSIA FUND, INC.* (NASDAQ Symbol: LETRX)/Seeks
long-term capital appreciation through investment primarily in the equity
securities of Russian companies. The Fund has a $5,000 minimum investment.
LEXINGTON RAMIREZ GLOBAL INCOME FUND* (NASDAQ Symbol: LEBDX)/Seeks high current
income by investing in a combination of foreign and domestic high-yield,
lower rated debt securities. Capital appreciation is a secondary objective.
LEXINGTON GOLDFUND, INC.* (NASDAQ Symbol: LEXMX)/Seeks capital appreciation and
such hedge against loss of buying power as may be obtained through
investment in gold bullion and equity securities of companies engaged in
mining or processing gold throughout the world.
LEXINGTON SMALLCAP VALUE FUND, INC.* (NASDAQ Symbol: LESVX)/Seeks long-term
capital appreciation through investment in common stocks of companies
domiciled in the United States with a market capitalization of less than $1
billion.
LEXINGTON CORPORATE LEADERS TRUST FUND (NASDAQ Symbol: LEXCX)/Seeks long-term
capital growth and income through investment in an equal number of shares
of the common stocks of a fixed list of American blue chip corporations.
7
<PAGE>
LEXINGTON GROWTH AND INCOME FUND, INC. (NASDAQ Symbol: LEXRX)/Seeks long-term
capital appreciation through investments in stocks of large, ably managed
and well financed companies. Income is a secondary objective. Shares are
not presently available for sale in New Hampshire.
LEXINGTON CONVERTIBLE SECURITIES FUND* (NASDAQ Symbol: CNCVX)/Seeks total return
by providing capital appreciation, current income and conservation of
capital through investments in a diversified portfolio of securities
convertible into shares of common stock.
LEXINGTON GNMA INCOME FUND, INC. (NASDAQ Symbol: LEXNX)/Seeks a high level of
current income, consistent with liquidity and safety of principal, through
investment primarily in mortgage-backed GNMA Certificates.
LEXINGTON MONEY MARKET TRUST (NASDAQ Symbol: LMMXX)/Seeks a high level of
current income consistent with preservation of capital and liquidity
through investments in interest bearing short term money market
instruments.
*These Funds are not available for exchange until exemptive relief is
received from the SEC.
The Exchange Privilege enables a participant to acquire another Lexington
Fund with a different investment objective when the participant believes that a
shift between funds is an appropriate investment decision. Participants
contemplating an exchange should obtain and review the prospectus of the Fund to
be acquired. If an exchange involves investing in a Lexington Fund not already
owned and a new account has to be established, the dollar amount exchanged must
meet the minimum initial investment of the Fund being purchased. If, however, an
account already exists in the Fund being bought, there is a $500 minimum
exchange required. Participants must provide the account number of the existing
account. Any exchange between Funds is, in effect, a redemption in one Fund and
a purchase in the other Fund. Participants should consider the possible tax
effects of an exchange.
TELEPHONE EXCHANGE PROVISIONS
Exchange instructions may be given in writing or by telephone. TELEPHONE
EXCHANGES MAY ONLY BE MADE IF A TELEPHONE AUTHORIZATION FORM HAS BEEN PREVIOUSLY
EXECUTED AND FILED WITH THE SPONSOR. Telephone exchanges are permitted only
after a minimum of seven (7) days have elapsed from the date of a previous
exchange. EXCHANGES MAY NOT BE MADE UNTIL ALL CHECKS IN PAYMENT FOR
PARTICIPATIONS TO BE EXCHANGED HAVE BEEN CLEARED.
Telephonic exchanges can only involve participants registered on the books
of the Trustee; participations held in certificate form cannot be included.
However, outstanding certificates can be returned to the Trustee and qualify for
these services. Any new account established with the same registration will also
have the privileges of exchange by telephone in the Lexington Funds. All
accounts involved in a telephonic exchange must have the same registration and
dividend option as the account from which the participations were transferred
and will also have the privilege of exchange by telephone in the Lexington Funds
in which these services are available.
By checking the box on the Purchase Application authorizing telephone
exchange services, a participant constitutes and appoints Lexington Funds
Distributor, Inc. ("LFD"), distributor of the Lexington Funds, as the true and
lawful attorney to surrender for redemption or exchange any and all
non-certificate shares held by the Trustee in account(s) designated, or in any
other account with the Lexington Funds, present or future which has the
identical registration with full power of substitution in the premises and
authorizes and directs LFD to act upon any instruction from any person by
telephone for exchange of shares held in any of these accounts, to purchase
shares of any other Lexington Fund that is available, provided the registration
and mailing address of the shares to be purchased are identical to the shares
being redeemed, and agrees that neither LFD, the Trustee, the Trust or the
Lexington Fund(s) will be liable for any loss, expense or cost arising out of
any requests effected in accordance with this authorization which would include
requests effected by imposters or persons otherwise unauthorized to act on
behalf of the account. LFD, the Agent and the Fund, will employ reasonable
procedures to confirm that instructions communicated by telephone are genuine
and if they do not employ reasonable procedures they may be liable for any
8
<PAGE>
losses due to unauthorized or fraudulent instructions. The following
identification procedures may include, but are not limited to, the following:
account number, registration and address, taxpayer identification number and
other information particular to the account. In addition, all exchange
transactions will take place on recorded telephone lines and each transaction
will be confirmed in writing by the Fund. LFD reserves the right to cease to act
as agent subject to the above appointment upon thirty (30) days' written notice
to the address of record. If the participant is an entity other than an
individual, such entity may be required to certify that certain persons have
been duly elected and are now legally holding the titles given and that the said
corporation, trust, unincorporated association, etc., is duly organized and
existing and has the power to take action called for by this continuing
authorization.
Exchange Authorization Forms, telephone authorization forms and
prospectuses of the other Lexington Funds may be obtained from LFD.
LFD has made arrangements with certain dealers to accept instructions by
telephone to exchange participations for shares of one of the other Lexington
Funds at net asset value as described above. Under this procedure, the dealer
must agree to indemnify LFD and the Lexington Funds from any loss or liability
that any of them might incur as a result of the acceptance of such telephone
exchange orders. A properly signed exchange application must be received by the
Distributor within five (5) days of the exchange request. In each such exchange,
the registration of the shares of the Fund being acquired must be identical to
the registration of the participations of the Fund being exchanged.
Participations in certificate form are not eligible for this type of exchange.
LFD reserves the right to reject any telephone exchange request. Any telephone
exchange orders so rejected may be processed by mail.
TAX SHELTERED RETIREMENT PLANS
The Trust offers a Prototype Pension and Profit Sharing Plan, including a
Keogh Plan, IRA's, SEP-IRA Rollover Accounts, 401(k) Salary Reduction Plans,
Section 457 Deferred Compensation Plans and 403(b)(7) Plans. Plan support
services are available through the Shareholder Services Department of the
Sponsor. For further information, call 1-800-526-0056.
DISTRIBUTION REINVESTMENT PROGRAM
On June 30 and December 31 of each year, the Distribution Dates, the
Trustee will compute to at least two decimal places the amount of the
semi-annual distribution per participation for participants of record, and shall
use such distributions to purchase additional participations unless the Trustee
has been instructed by the participant, in writing, prior to the Distribution
Date to pay such distributions in cash.
TAX MATTERS
The Trust is treated as a fixed investment trust under the Internal Revenue
Code of 1986, as amended (the "Code"), and not an association taxable as a
corporation. The Trust is also treated as a grantor trust under the Code. As a
result, the Trust will not be subject to Federal income taxes. In addition, for
Federal income tax purposes, each participant is treated as the owner of his pro
rata portion (i.e., the ratio of the number of participations owned by the
participant to the total number of participations outstanding) of (i) the common
stock of each corporation and any cash held in the Trust Fund and (ii) the
securities and cash held in the Distributive Fund.
Each participant is treated as receiving his pro rata portion of dividends
and any other distributions received by the Trust on the common stock of the
corporations held in the Trust Fund and interest received by the Trust from the
investment of such dividends (and any other amounts) deposited in the
Distributive Fund. Each participant shall include in gross income his pro rata
portion of such dividends and interest when such dividends and interest are
received by the Trust (or, in the case of an accrual basis participant, as such
interest accrues), regardless of when such dividends and interest are
distributed by the Trust to participants (or reinvested in additional
participations) and regardless of the fact that a portion of such dividends and
interest are not distributed to participants (or reinvested in additional
participations) but rather are used to pay the fees and expenses of the Trust.
A corporate participant will generally be entitled to the 70%
dividends-received deduction with respect to the dividends so included in its
gross income, subject to various limitations and restrictions imposed by the
Code. A corporate participant will also be entitled to a deduction for his pro
rata portion of fees and expenses paid by the Trust. An individual participant
who itemizes deductions will be entitled to a deduction for his pro rata portion
9
<PAGE>
of fees and expenses paid by the Trust only to the extent that such amount,
together with the participant's other miscellaneous itemized deductions, exceeds
2% of the participant's adjusted gross income. Further, certain itemized
deductions of an individual participant (including any portion of the
miscellaneous itemized deductions which exceeds the 2% floor, state and local
income and property taxes, home mortgage interest, and charitable contributions)
will be reduced (but not by more than 80% thereof) by 3% of the participant's
adjusted gross income in excess of $111,800 (for 1994, adjusted for inflation
thereafter).
The purchase price paid by a participant for his participations (excluding
any portion thereof attributable to, and to be deposited in, the Distributive
Fund) shall be allocated (based upon relative fair market values) among the
participant's pro rata portion of the common stock of each corporation and any
cash held in the Trust Fund, in order to determine his tax basis in his pro rata
portion of the common stock of each corporation. If the common stock of any of
the corporations held in the Trust Fund is sold by the Trust, each participant
will be considered to have sold his pro rata portion of the common stock of that
corporation and will be considered to have received his pro rata portion of the
sale proceeds received by the Trust. If a participant redeems his
participations, he will be considered to have sold his pro rata portion of the
common stock of each corporation. The redemption price received by the
participant (excluding any portion thereof attributable to, and paid out of, the
Distributive Fund) shall be allocated (based upon relative fair market values)
among his pro rata portion of the common stock of each corporation and any cash
held in the Trust Fund. If a participant is considered to have sold his pro rata
portion of the common stock of any corporation, he will recognize a capital gain
or loss equal to the difference between the amount he is considered to have
received with respect thereto and his tax basis therein. Any such capital gain
or loss generally will be long-term capital gain or loss if the participant held
his participations for more than one year.
Under the back-up withholding rules of the Code, certain shareholders may
be subject to 31% withholding of federal income tax on distributions and
redemption payments made by the Trust. In order to avoid this back-up
withholding, a shareholder must provide the Trust with a correct taxpayer
identification number (which for most individuals is their Social Security
number) or certify that it is a corporation or otherwise exempt from or not
subject to back-up withholding. The new account application included with this
Prospectus provides for shareholder compliance with these certification
requirements.
Information concerning the Federal income tax status of distributions will
be mailed to participants annually. Prospective participants are urged to
consult their own tax advisers as to the tax consequences of an investment in
the Trust.
INVESTMENT RETURN
The Trust may, from time to time, include total return information in
advertisements and reports to shareholders. The average annual total return of
the Trust for the 1, 5 and 10 years ended December 31, 1996 is set forth in the
following table:
Average Annual
Period Total Return
------ --------------
1 year ended December 31, 1996 +22.43%
5 years ended December 31, 1996 +16.87%
10 years ended December 31, 1996 +14.80%
This performance is calculated pursuant to the formula P(1+T)n = ERV (where
P = a hypothetical investment of $1,000; T = the average annual total return; n
= the number of years and ERV = the ending redeemable value of the hypothetical
$1,000 investment). The computation reflects the reinvestment of all dividends
and distributions reinvested on participations acquired with the original
hypothetical $1,000 investment. Past results are not necessarily representative
of future results.
Comparative performance information may be used from time to time in
advertising or marketing of the Trust's participations, including data from
Lipper Analytical Services, Inc., the Dow Jones Industrial Average Index and
Standard & Poor's 500 Composite Stock Index. Such comparative performance
information will be stated in the same terms in which the comparative data and
indices are stated.
10
<PAGE>
AMENDMENT AND TERMINATION
The Sponsor and Trustee may amend the Indenture without the consent of
participants (i) to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent; (ii) to change any
provision as may be required by the SEC or any successor governmental agency; or
(iii) to make any other provisions which do not adversely affect the interest of
participants. The Indenture may be amended by the Sponsor and the Trustee with
the consent of a majority of the participations entitled to vote.
The Trust and Indenture will terminate on November 30, 2100 upon the sale
or disposition of the last portfolio security of the Trust unless terminated
sooner by written instrument executed by the Sponsor and consented to by
participants owning 51% of the then outstanding participations. The Trustee will
deliver written notice of any termination to each participant specifying the
times at which the participants may surrender their certificates for
cancellation. Within a reasonable period of time after the termination, the
Trustee will distribute to each participant registered on the Trustee's books in
uncertificated form, and to each other participant upon surrender for
cancellation of his certificate, after deducting all unpaid expenses, fees,
taxes and other governmental charges, the participant's interest in the
Distributive Fund (into which had been deposited the proceeds from the sale of
the portfolio securities) and furnish to each participant a final account
statement.
RESIGNATION, REMOVAL AND LIMITATIONS ON LIABILITY OF SPONSOR
Sponsor The Sponsor may resign upon written notice to the Trustee. The
resignation will not become effective unless the Trustee shall have appointed a
successor sponsor to assume, with such compensation as the Trustee may deem
desirable, the duties of the resigning Sponsor. If the Sponsor fails to perform
its duties for 30 days after notice from the Trustee, or becomes incapable of
acting or becomes bankrupt or its affairs are taken over by a public official,
then the Sponsor will be automatically discharged. The Sponsor shall be under no
liability to the Trust or to the participants for taking any action or for
refraining from taking any action in good faith or for errors in judgment or for
depreciation or loss incurred by reason of the purchase or sale of any portfolio
security. This provision, however, shall not protect the Sponsor in cases of
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties.
TRUSTEE
The Trustee may resign upon written notice to the Sponsor and by mailing a
copy of such notice to all participants of record not less than sixty days prior
to the effective date of their resignation. The Sponsor shall then use its best
efforts to promptly appoint a successor trustee, and if upon resignation of the
Trustee no successor has been appointed within thirty days after notification,
the Trustee may apply to a court of competent jurisdiction for the appointment
of a successor. If, after such an application by the Trustee is made to a court
of competent jurisdiction (after November 30, 2015) and the court is unable to
appoint a successor trustee, then no earlier than six months after the date of
such application, the Trustee may notify each participant and the Sponsor that
the Trust shall terminate on a day no earlier than six months from the date of
such notice unless a successor trustee is appointed. If the Trustee fails to
perform its duties or becomes incapable of acting or becomes bankrupt or a
public official takes over its affairs, the Sponsor may remove the Trustee and
appoint a successor trustee by written notice to the Trustee. The Trustee shall
be under no liability for any action taken in good faith in reliance upon prima
facie properly executed documents or for the disposition of monies or portfolio
securities. This provision shall not protect the Trustee in cases of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties. The Trustee will not be responsible for the misconduct
of any of its agents, attorneys or accountants if they were selected with
reasonable care.
MISCELLANEOUS
Trustee The Trustee is State Street Bank and Trust Company (Federal I.D.
#04-1867445), a trust company incorporated under the laws of Massachusetts and
subject to regulation by the Federal Deposit Insurance Corporation and the
Commissioner of Banks of
11
<PAGE>
Massachusetts. Its principal office is at 225 Franklin Street, Boston,
Massachusetts 02110. The Trustee receives a fee of $10,000 per year for its
services as set forth in the Indenture and is reimbursed for all of its
disbursements relating to the Trust. In addition, the Trustee receives fees for
acting as Custodian and Transfer Agent and for providing portfolio, tax
accounting and recordkeeping services. During the year ended December 31, 1996,
aggregate fees received by the Trustee were $138,352.
SPONSOR
The Sponsor, Lexington Management Corporation (Federal l.D. #22- 1891864),
a Delaware corporation, serves as investment adviser and sponsor to 18
registered investment companies and to private and institutional investment
accounts. The Sponsor is responsible for performing certain administrative
services for the Trust including shareholder servicing, answering inquiries,
blue sky compliance and accounting. For performing such administrative services
the Sponsor receives an annual fee of .40% of the Trust's average daily net
assets. For the year ended December 31, 1996, the Sponsor received fees of
$1,268,269.
The Sponsor is a wholly-owned subsidiary of Lexington Global Asset
Managers, Inc., a Delaware corporation with offices at Park 80 West Plaza Two,
Saddle Brook, New Jersey 07663. Descendants of Lunsford Richardson, Sr., their
spouses, trusts and other related entities have a majority voting control of
outstanding shares of Lexington Global Asset Managers, Inc.
The principal officers and the directors of the Sponsor and their principal
occupations during the past five years are as follows:
*Robert M. DeMichele Chairman and Chief Executive Officer, Lexington
Management Corporation; President and Director,
Lexington Global Asset Managers, Inc.; Chairman
and Chief Executive Officer, Lexington Funds
Distributor, Inc.; Chairman of the Board, Market
Systems Research, Inc. and Market Systems Research
Advisors, Inc.; Director, Chartwell Re
Corporation, Claredon National Insurance Company,
The Navigator's Group, Inc., Unione Italiana
Reinsurance, Vanguard Cellular Systems, Inc. and
Weeden & Co.; Vice Chairman of the Board of
Trustees, Union College and Trustee, Smith
Richardson Foundation.
*Richard M. Hisey Chief Financial Officer, Managing Director and
Director, Lexington Management Corporation; Chief
Financial Officer, Vice President and Director,
Lexington Funds Distributor, Inc.; Chief Financial
Officer, Market Systems Research Advisors, Inc.;
Executive Vice President and Chief Financial
Officer, Lexington Global Asset Managers, Inc.
*Lawrence Kantor Executive Vice President, Managing Director and
Director of Lexington Management Corporation;
Executive Vice President and Director, Lexington
Funds Distributor, Inc.; Executive Vice President
and General Manager--Mutual Funds, Lexington
Global Asset Managers, Inc.
Stuart S. Richardson Director, Lexington Management Corporation;
Chairman, Lexington Global Asset Managers, Inc.;
Vice Chairman, Vanguard Cellular Systems, Inc.
Prior to January 1986, Chairman, Richardson-Vicks,
Inc.
*Lisa Curcio Senior Vice President and Secretary, Lexington
Management Corporation; Vice President and
Secretary, Lexington Funds Distributor, Inc.;
Secretary, Lexington Global Asset Managers, Inc.
- ----------
*Messrs. DeMichele, Hisey and Kantor and Ms. Curcio hold officer, director
and/or trustee positions with some or all of the registered investment companies
advised and/or distributed by Lexington Management Corporation and Lexington
Funds Distributor, Inc.
During its last fiscal year ended December 31, 1996, the Sponsor paid all
its salaried officers a total of $ .
12
<PAGE>
DISTRIBUTOR
State Street Bank and Trust Company has appointed Lexington Funds
Distributor, Inc., a registered broker-dealer to act as distributor to the
Trust. Lexington Funds Distributor, Inc. is a wholly-owned subsidiary of
Lexington Global Asset Managers, Inc., and receives no compensation for its
services.
LEGAL OPINION
The legality of the participations has been passed upon by Kramer, Levin,
Naftalis, & Frankel, 919 Third Avenue, New York, New York 10022, as counsel for
the Trust.
AUDITORS
Financial Statements have been examined by McGladrey & Pullen, LLP
independent certified public accountants, as stated in their opinion appearing
herein and has been so included in reliance upon that opinion given on the
authority of that firm as experts in accounting and auditing.
This Prospectus does not contain all of the information with respect to the
investment company set forth in its registration statements and exhibits
relating thereto which have been filed with the Securities and Exchange
Commission, Washington, D.C. under the Securities Act of 1933 and the Investment
Company Act of 1940, and to which reference is hereby made.
* * * * *
No person is authorized to give any information or to make any
representations not contained in this Prospectus; and any information or
representation not contained herein must not be relied upon as having been
authorized by the Trust, the Trustee or the Sponsor. The Trust is registered as
a unit investment trust under the Investment Company Act of 1940. Such
registration does not imply that the Trust has been guaranteed, sponsored,
recommended or approved by the United States or any state or any agency or
officer thereof.
* * * * *
This Prospectus does not constitute an offer to sell, or a solicitation of
an offer to buy securities in any state to any person to whom it is not lawful
to make such offer in such state.
13
<PAGE>
NONSTANDARD INVESTMENT RETURN IF YOU HAD INVESTED $10,000 55 YEARS AGO
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $10,000
WITH DIVIDENDS AND OTHER DISTRIBUTIONS REINVESTED
The table below covers the period from March 16, 1941 to December 31, 1996.
This period was one of generally rising common stock prices. The results shown
should not be considered as a representation of the dividends and other
distributions which may be realized from an investment made in the Trust today.
A program of the type illustrated does not assure a profit or protect against
depreciation in declining markets.
The cumulative cost figure represents the initial investment of $10,000 plus the
cumulative amount of dividends reinvested. Dividends and other distributions
were assumed to have been reinvested in additional participations at the
reinvestment price. The value of participations Initiailly Acquired" includes
the value of additional participations created as a result of the reinvestment
of that portion of the semi-annual distributions representing "A Return of
Capital" (the proceeds from securities sold representing the cost of securities
sold, and other principal transactions). No adjustment has been made for any
income taxes payable by holders on dividends and other distributions reinvested
in additional participations.
The dollar amount of distributions from realized gains (determined at the Trust
level) reinvested in additional participations were: 1941_None; 1942--None;
1943--None; 1944--$3; 1945--$450; 1946-- None; 1947--$44; 1948--$338;
1949--None; 1950--$283; 1951--$796; 1952--$185; 1953--$10; 1954--$812;
1955--$474; 1956--$4,347; 1957--$48; 1958--$17; 1959--$3,032; 1960--$2,371;
1961--$2,118; 1962--$2,749; 1963--$735; 1964--$3.138; 1965--$9,035; 1966--
$1,077; 1967--$48; 1968--$4.121; 1969--$102; 1970--$644; 1971-- $1,862;
1972--$2,300; 1973--None; 1974--None; 1975--None; 1976-- $5,071; 1977--$4,161;
1978--None; 1979--None; 1980--$5,182; 1981-- $31,473; 1982--None; 1983--$18,602;
1984--$8,258; 1985--$39,496; 1986--$64,138; 1987--$69,182; 1988--$49,350;
1989--$99,410; 1990--$148,727; 1991--$39,773; 1992--$52,819; 1993--$46,262;
1994--$160,296; 1995--$7,696; 1996--$62,612; Total $953,647.
<TABLE>
<CAPTION>
CUMULATIVE
COST OF VALUE OF
PARTICIPATIONS
PARTICI- PURCHASED
PATIONS THROUGH REIN-
PURCHASED
AMOUNT OF PURCHASED CUMULATIVE INVESTMENT OF
THROUGH
DIVIDENDS THROUGH COST DISTRIBUTIONS
REINVESTMENT NUMBER
YEAR REINVESTED REINVEST- INCLUDING FROM REALIZED
OF NET OF
ENDED SEMI- MENT OF REINVESTED INITIALLY GAINS
DIVIDENDS ASSET PARTICI-
DEC. 31 ANNUALLY DIVIDENDS DIVIDENDS ACQUIRED (CUMULATIVE)
SUB-TOTAL (CUMULATIVE) VALUE PATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<C> <C> <C> <C>
1941* -- -- $ 10,000 $ 8,799 -- $
8,799 -- $ 8,799 566
1942 -- -- 10,000 9,613 --
9,613 -- 9,613 584
1943 $ 190 $ 190 10,190 10,809 --
10,809 $ 188 10,997 601
1944 192 382 10,382 11,983 $ 3
11,986 402 12,388 620
1945 215 597 10,597 14,709 464
15,173 682 15,855 693
1946 187 784 10,784 13,961 430
14,391 816 15,207 716
1947 370 1,154 11,154 14,639 447
15,086 1,141 16,227 824
1948 513 1,668 11,668 14,840 718
15,558 1,480 17,038 989
1949 509 2,177 12,177 17,113 701
17,814 1,968 19,782 1,176
1950 804 2,980 12,980 19,871 994
20,865 2,779 23,644 1,392
1951 1,012 3,992 13,992 21,659 1,756
23,415 3,674 27,089 1,652
1952 1,054 5,046 15,046 24,356 2,016
26,372 4,901 31,273 1,845
1953 1,217 6,263 16,263 24,849 2,030
26,879 6,149 33,028 1,945
1954 1,378 7,641 17,641 33,779 3,476
37,255 9,475 46,730 2,117
1955 1,599 9,240 19,240 39,164 4,398
43,562 12,349 55,911 2,243
1956 1,790 11,030 21,030 38,511 7,051
45,562 10,475 56,037 3,123
1957 1,910 12,940 22,940 36,268 6,574
42,842 11,496 54,338 3,269
1958 2,134 15,075 25,075 48,925 8,778
57,703 17,710 75,413 3,406
1959 2,184 17,258 27,258 55,426 11,821
67,247 19,992 87,239 3,906
1960 2,416 19,674 29,674 55,782 12,653
68,435 19,772 88,207 4,562
1961 2,697 22,371 32,371 67,126 16,993
84,119 25,757 109,876 4,881
1962 2,926 25,296 35,296 62,396 17,033
79,429 24,446 103,875 5,541
1963 3,243 28,540 38,540 71,467 19,863
91,330 30,711 122,041 5,803
1964 3,553 32,093 42,093 83,001 24,049
107,050 35,865 142,915 6,452
1965 3,855 35,948 45,948 92,523 30,246
122,769 35,623 158,392 8,066
1966 4,571 40,519 50,519 74,713 24,491
99,204 31,774 130,978 8,606
1967 5,060 45,579 55,579 83,121 27,090
110,211 40,165 150,376 8,948
1968 5,573 51,153 61,153 89,160 32,157
121,317 46,879 168,196 9,710
1969 5,915 57,068 67,068 75,017 26,979
101,996 44,536 146,532 10,115
1970 6,009 63,077 73,077 82,621 28,564
111,185 52,500 163,685 10,957
1971 6,190 69,267 79,267 93,454 32,126
125,580 61,694 187,274 11,856
1972 6,585 75,852 85,852 108,913 38,484
147,397 75,949 223,346 12,605
1973 7,371 83,223 93,223 93,151 32,729
125,880 71,868 197,748 13,123
1974 8,196 91,419 101,419 68,448 22,864
91,312 57,376 148,688 14,124
1975 9,139 100,557 110,557 91,498 30,474
121,972 85,413 207,385 14,781
1976 9,666 110,223 120,223 115,461 37,963
153,424 101,306 254,730 16,914
1977 11,237 121,460 131,460 108,466 35,919
144,385 96,397 240,782 18,898
1978 13,283 134,743 144,743 110,210 34,687
144,897 105,738 250,635 20,370
1979 15,804 150,547 160,547 139,110 34,774
173,884 121,307 295,191 23,931
1980 19,369 169,916 179,916 173,026 47,488
220,514 165,362 385,876 26,181
1981 21,822 191,738 201,738 163,070 62,645
225,715 140,698 366,413 33,836
1982 24,452 216,190 226,190 191,554 69,992
261,546 183,359 444,905 36,772
1983 25,923 242,114 252,114 235,913 91,870
327,783 218,649 546,432 42,757
1984 28,926 271,040 281,040 250,855 91,476
342,331 226,566 568,897 49,375
1985 31,808 302,848 312,848 333,623 145,913
479,536 293,217 772,753 58,251
1986 39,216 342,064 352,064 408,170 212,840
621,010 342,608 963,618 69,711
1987 40,394 382,458 392,458 412,599 241,185
653,784 326,728 980,512 83,847
1988 71,268 453,726 463,726 470,438 297,425
767,863 407,155 1,175,018 97,918
1989 45,103 498,829 508,829 583,494 438,476
1,021,970 509,512 1,531,482 111,950
1990 51,303 550,132 560,132 552,346 473,992
1,026,338 440,810 1,467,148 139,330
1991 55,828 605,960 615,960 654,372 558,392
1,212,764 539,190 1,751,954 152,079
1992 55,460 661,420 671,420 700,391 619,341
1,319,732 600,946 1,920,678 165,291
1993 54,505 715,925 725,925 814,945 727,611
1,542,556 715,658 2,258,214 176,699
1994 60,332 776,257 786,257 832,095 759,684
1,591,779 649,069 2,240,848 213,211
1995 61,329 837,586 847,586 1,207,794 998,228
2,206,022 913,513 3,119,535 227,040
1996 64,546 902,132 912,132 1,452,214 1,232,426
2,684,640 1,134,598 3,819,238 237,959
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*FROM MARCH 16, 1941.
NOTE--DURING 1990 ALL SALES CHARGES WERE ELIMINATED. THE ABOVE TABLE
REFLECTS THE CHANGE TO A "NO LOAD" STATUS AS IF IT WERE IN EFFECT FOR THE
ENTIRE PERIOD SHOWN.
THE AMOUNTS SHOWN AS DIVIDENDS FOR PERIODS AFTER OCTOBER 31, 1988 INCLUDE
INTEREST INCOME FROM THE INVESTMENT OF AMOUNTS DEPOSITED IN THE DISTRIBUTIVE
FUND.
14
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Participation Holders of Lexington Corporate Leaders Trust Fund
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Lexington Corporate Leaders Trust
Fund as of December 31, 1996 and the related statements of operations, changes
in net assets and the selected financial information for the periods indicated
in the accompanying financial statements. These financial statements and
selected financial information are the responsibility of the management of the
Trust. Our responsibility is to express an opinion on these financial statements
and selected financial information based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and selected
financial information are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1996, by correspondence with State Street Bank and
Trust Company, Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and selected financial information
referred to above present fairly, in all material respects, the financial
position of Lexington Corporate Leaders Trust Fund as of December 31, 1996 and
the results of its operations, the changes in its net assets and the selected
financial information for the periods indicated, in conformity with generally
accepted accounting principles.
New York, New York /s/McGladrey & Pullen, LLP
January 10, 1997
15
<PAGE>
LEXINGTON CORPORATE LEADERS
TRUST FUND STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1996
- --------------------------------------------------------------------------------
ASSETS
Investments at market quotations,
common stocks (identified
cost $259,495,211) ........................................... $383,752,319
Cash ........................................................... 8,560,554
Receivable for accrued dividends ............................... 988,327
Subscriptions receivable ....................................... 678,279
------------
Total assets .......................................... 393,979,479
------------
LIABILITIES
Distribution payable ........................................... 1,131,657
Payable for participations redeemed ............................ 419,675
Accrued expenses ............................................... 133,014
------------
Total liabilities ..................................... 1,684,346
------------
NET ASSETS
Balance applicable to 24,447,241
participations outstanding (Note 6) ........................... $392,295,133
============
Computation of public offering price:
Net asset value, offering and
redemption price per participation
(net assets divided by
participations outstanding) ................................ $ 16.05
============
See Notes to Financial Statements.
16
<PAGE>
LEXINGTON CORPORATE LEADERS TRUST FUND
STATEMENT OF OPERATIONS
Years Ended December 31,
-----------------------------------------
1996 1995 1994
----------- --------- ----------
Investment Income:
Income:
Dividends ....................... $ 8,730,682 $ 5,974,941 $ 5,177,999
Interest ........................ 103,006 234,501 160,518
------------ ------------ ------------
Total income .............. 8,833,688 6,209,442 5,338,517
------------ ------------ ------------
Expenses:
Sponsor's administrative
fee (Note 4) .................. 1,268,269 689,822 541,100
Professional fees ............... 64,797 52,907 52,543
Trustee's fee (Note 4) .......... 10,833 10,000 10,000
Custodian fees and
other services (Note 4) ....... 127,519 103,513 109,431
Transfer agent fees ............. 390,712 138,644 125,301
Printing, mailing and sundry .... 141,076 112,527 87,283
Registration and filing fees .... 63,025 31,079 29,480
------------ ------------ ------------
Total expenses ............... 2,066,231 1,138,492 955,138
------------ ------------ ------------
Net investment income ........ 6,767,457 5,070,950 4,383,379
------------ ------------ ------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS:
Net realized gain from
securities transactions ......... 12,337,780 2,521,317 12,380,590
Unrealized appreciation
(depreciation) of
investments for the year .... 47,385,034 56,613,954 (18,331,342)
------------ ------------ ------------
Net gain (loss) on investments 59,722,814 59,135,271 (5,950,752)
------------ ------------ ------------
Net increase (decrease)
in net assets from
operations ....................... $ 66,490,271 $ 64,206,221 $(1,567,373)
------------ ------------ ------------
17
See Notes to Financial Statements.
<PAGE>
LEXINGTON CORPORATE LEADERS TRUST FUND
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended December 31,
-----------------------------------------
1996 1995 1994
----------- --------- ----------
Income and
Distributable Fund:
Additions:
Net investment income ...... $ 6,767,457 $ 5,070,950 $ 4,383,379
Realized gains from
sale of securities,
other than sale
of stock units ............ 6,395,874 820,396 11,402,269
------------ ------------ ------------
13,163,331 5,891,346 15,785,648
------------ ------------ ------------
Deductions:
Paid on account of
participations redeemed ... 486,295 212,668 219,442
Semi-annual
distributions
(Note 3(a))
Paid in cash ............. 1,849,390 939,656 2,810,148
Reinvested, below ........ 10,714,827 4,685,472 12,699,124
------------ ------------ ------------
13,050,512 5,837,796 15,728,714
------------ ------------ ------------
Net change in income
and distributable fund ...... 112,819 53,550 56,934
------------ ------------ ------------
Principal Account:
Additions:
Payments received on
sale of participations ..... 167,449,209 74,367,391 40,209,522
Semi-annual
distributions
reinvested, above ........ 10,714,827 4,685,472 12,699,124
Realized gains on
sale of stock units ........ 5,941,906 1,700,921 978,321
Unrealized appreciation
(depreciation) of
investments .............. 47,385,034 56,613,954 (18,331,342)
------------ ------------ ------------
231,490,976 137,367,738 35,555,625
------------ ------------ ------------
Deductions:
Paid on account
of participations
redeemed ................... 95,197,345 35,780,396 24,442,332
Semi-annual
distributions of
principal (Note 3(b)) ..... 578,409 1,459,632 2,065,563
------------ ------------ ------------
95,775,754 37,240,028 26,507,895
------------ ------------ ------------
Net change
in principal account ...... 135,715,222 100,127,710 9,047,730
------------ ------------ ------------
Net assets at
beginning of year:
Income and
distributable fund ....... 432,414 378,864 321,930
Principal account .......... 256,034,678 155,906,968 146,859,238
------------ ------------ ------------
256,467,092 156,285,832 147,181,168
------------ ------------ ------------
Net assets at
end of year:
Income and
distributable fund ....... 545,233 432,414 378,864
Principal account .......... 391,749,900 256,034,678 155,906,968
------------ ------------ ------------
$392,295,133 $256,467,092 $156,285,832
============ ============ ============
See Notes to Financial Statements.
18
<PAGE>
LEXINGTON CORPORATE LEADERS TRUST FUND
STATEMENT OF INVESTMENTS December 31, 1996
Number Market
Securities of Shares Cost Value
- ------------------- --------- --------- ---------
CONSUMER PRODUCTS: (17.3%)
American Brands, Inc. .......... 278,900 $ 10,450,174 $ 13,840,413
Eastman Kodak Co. .............. 278,900 14,471,365 22,381,725
Procter & Gamble Co. ........... 278,900 17,161,874 29,981,750
------------ ------------
42,083,413 66,203,888
------------ ------------
OIL INTERNATIONAL: (20.7%)
Chevron Corp. .................. 278,900 13,110,451 18,128,500
Exxon Corp. .................... 278,900 17,511,249 27,332,200
Mobil Corp. .................... 278,900 22,755,150 34,095,525
------------ ------------
53,376,850 79,556,225
------------ ------------
CHEMICAL & FERTILIZERS: (9.8%)
duPont (E.I.)
de Nemours & Co., Inc. ....... 278,900 15,990,733 26,321,187
Union Carbide Corp. ............ 278,900 7,151,820 11,400,038
------------ ------------
23,142,553 37,721,225
------------ ------------
ELECTRICAL EQUIPMENT: (8.6%)
General Electric Co. ........... 278,900 16,143,502 27,576,237
Westinghouse Electric Corp. .... 278,900 5,614,603 5,543,138
------------ ------------
21,758,105 33,119,375
------------ ------------
RETAILING: (4.9%)
Sears, Roebuck & Co. ........... 278,900 8,114,543 12,864,262
Woolworth Corp. ................ 278,900 5,859,608 6,100,938
------------ ------------
13,974,151 18,965,200
------------ ------------
UTILITIES: (6.5%)
Consolidated Edison
Co. of N.Y., Inc. ............ 278,900 7,931,764 8,157,825
Pacific Gas & Electric Co. ..... 278,900 7,179,327 5,856,900
Union Electric Company ......... 278,900 9,606,266 10,737,650
------------ ------------
24,717,357 24,752,375
------------ ------------
RAILROADS: (8.1%)
Burlington Northern Santa Fe ... 166,014 9,395,456 14,339,459
Union Pacific Corp. ............ 278,900 10,407,538 16,768,863
------------ ------------
19,802,994 31,108,322
------------ ------------
ENERGY: (8.2%)
Columbia Gas Systems, Inc. ..... 278,900 10,361,691 17,745,012
Union Pacific
Resources Group Inc. . ....... 237,667 5,070,486 6,951,760
USX Marathon Group ............. 278,900 5,840,610 6,658,738
------------ ------------
21,272,787 31,355,510
------------ ------------
MISC. INDUSTRIAL: (8.2%)
AlliedSignal Corp. ............. 278,900 11,240,594 18,686,300
Praxair, Inc. .................. 278,900 6,362,448 12,864,262
------------ ------------
17,603,042 31,550,562
------------ ------------
COMMUNICATIONS: (4.4%)
A T & T Corp. .................. 278,900 9,931,761 12,132,150
Lucent Technologies Inc. ....... 100,160 4,343,760 4,632,400
------------ ------------
14,275,521 16,764,550
------------ ------------
FINANCIAL: (3.3%)
Travelers Group Inc. ........... 278,900 7,488,438 12,655,087
------------ ------------
TOTAL INVESTMENTS (100%) . $259,495,211 $383,752,319
============ ============
* Non Income producing.
See Notes to Financial Statements.
19
<PAGE>
LEXINGTON CORPORATE LEADERS TRUST FUND
NOTES TO FINANCIAL STATEMENTS
1. NATURE OF BUSINESS AND BASIS OF PRESENTATION
Lexington Corporate Leaders Trust Fund (the "Trust") is an unincorporated
Unit Investment Trust registered as such with the Securities and Exchange
Commission. The Trust commenced operations in 1941 as a series of Corporate
Leaders Trust Fund which was created under a Trust Indenture dated November 18,
1935.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements:
(a) Valuation of securities--Investments are stated at value based on
the last sale price on the principal exchange on which the security is
traded prior to the time the Trust's assets are valued. Investments for
which no sale is reported, or which are traded over-the-counter, are valued
at the mean between bid and asked prices. Short term securities with 60
days or less to maturity are valued at amortized cost.
(b) Income taxes--No provision for Federal income taxes is made since
the Trust, under applicable provisions of the Internal Revenue Code, is a
Grantor Trust and all its income is taxable to the Holders of
participations.
(c) Other--Investment transactions are recorded on the trade date
basis. Dividend income is recorded on the ex-dividend date. Interest income
is accrued as earned.
3. DISTRIBUTIONS
(a) During the year ended December 31, 1996, the distributions from
net investment income were $.28047 per participation and, from realized
gains, were $.27318 per participation.
(b) The amount shown does not reflect the reinvestment of that portion
of the proceeds from the sale of securities (other than stock units)
representing the cost of the securities sold which is distributed and then
reinvested in additional participations. In addition, any gain on the sale
of stock units to provide funds for the redemption of participations is
non-distributable and remains a part of the principal account. During the
year ended December 31, 1996, the distributions from return of capital were
$.17214 per participation.
4. TRUSTEE AND SPONSOR FEES
State Street Bank and Trust Company (the "Trustee") receives an annual
Trustee fee as well as fees for acting as custodian and for providing portfolio
accounting and record keeping services which aggregated $138,352 for the year
ended December 31, 1996. The Trust pays an administrative fee to Lexington
Management Corporation (Sponsor) equal, on an annual basis, to 0.40% (.35% prior
to May 1, 1996) of the average daily net assets of the Trust.
5. INVESTMENT TRANSACTIONS
During the year ended December 31, 1996, the cost of purchases and proceeds
of sales of investment securities, other than short-term obligations, were
$99,232,310 and $19,044,457, respectively.
The cost of investment securities as well as realized security gains and
losses are based on the identified cost basis. The cost of investments for
Federal income taxes is the same as that reported in the Trust's financial
statements.
As of December 31, 1996, net unrealized appreciation of portfolio
securities was $124,257,108, comprised of unrealized appreciation of
$125,651,000 and unrealized depreciation of $1,393,892.
20
<PAGE>
6. SOURCE OF NET ASSETS
As of December 31, 1996, the Trust's net assets were
comprised of the following amounts:
Net amounts paid in and reinvested by Holders
net of terminations and return of capital payments ............ $224,775,285
Cumulative amount of non-distributable realized
gains retained in Principal Account ............................. 42,717,507
Unrealized appreciation in value of securities .................. 124,257,108
-----------
Principal account ............................................. 391,749,900
Income and distributable fund ................................. 545,233
-----------
Total net assets ............................................ $392,295,133
============
7. PARTICIPATIONS ISSUED AND REDEEMED
During the periods indicated, participations were issued and redeemed as
follows:
Number of Participations
Year ended December 31,
---------------------------------------------
1996 1995 1994
------- ------- -------
Issued on payments from Holders 11,313,596 5,797,609 3,324,643
Issued on reinvestment
of distributions ................. 919,816 914,327 2,100,371
Redeemed ........................... (6,457,089) (2,910,131) (2,072,895)
---------- ---------- ----------
Net increase ................... 5,776,323 3,801,805 3,352,119
========= ========= =========
8. SELECTED FINANCIAL INFORMATION
Refer to page 4 of the Prospectus for selected financial information.
21
<PAGE>
SPONSOR
- --------------------------------------------------------------------------------
LEXINGTON MANAGEMENT CORPORATION
P.O. Box 1515/Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
DISTRIBUTOR
- --------------------------------------------------------------------------------
LEXINGTON FUNDS DISTRIBUTOR, INC.
P.O. Box 1515/Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
TRUSTEE
- --------------------------------------------------------------------------------
STATE STREET BANK AND TRUST COMPANY
MUTUAL FUND SERVICES AREA
Lexington Corporate Leaders Trust Fund
225 Franklin Street
Boston, Massachusetts 02110
- --------------------------------------------------------------------------------
ALL SHAREHOLDER REQUESTS FOR SERVICES OF ANY KIND SHOULD BE SENT TO:
- --------------------------------------------------------------------------------
TRANSFER AGENT
STATE STREET BANK AND TRUST COMPANY
C/O NATIONAL FINANCIAL DATA SERVICES
LEXINGTON FUNDS
1004 BALTIMORE
KANSAS CITY, MISSOURI 64105
OR CALL TOLL FREE:
SERVICE: 1-800-526-0056
INSTITUTIONAL/FINANCIAL ADVISER SERVICES:
1-800-367-9160
24 HOUR ACCOUNT INFORMATION: 1-800-526-0052
- --------------------------------------------------------------------------------
TABLE OF CONTENTS PAGE
- --------------------------------------------------------------------------------
Highlights ............................................................. 2
Description of the Trust ............................................... 2
Selected Financial Information ......................................... 4
How to Purchase Participations ......................................... 4
How to Redeem Participations ........................................... 5
Shareholder Services ................................................... 7
Exchange Privilege ..................................................... 7
Tax Matters ............................................................ 9
Investment Return ...................................................... 10
Amendment and Termination .............................................. 11
Resignation, Removal and Limitations on Liability
of Sponsor ........................................................... 11
Miscellaneous .......................................................... 11
Nonstandard Investment Return .......................................... 14
Financial Statements ................................................... 15
- --------------------------------------------------------------------------------
LEXINGTON
CORPORATE
LEADERS
TRUST
FUND
--------------------------------o----------------------------------
o No sales charge
o No redemption fees
o Created in 1935
o Blue chip stocks
o Free telephone
exchange privilege
--------------------------------o----------------------------------
The Lexington Group
of
NO-LOAD
Investment Companies
- --------------------------------------------------------------------------------
PROSPECTUS
APRIL 30, 1997
<PAGE>
PART II
ADDITIONAL INFORMATION NOT INCLUDED
IN THE PROSPECTUS
Undertaking to File Reports
Subject to the terms and conditions of Section 15(d) of the
Securities Exchange Act of 1934, the undersigned Registrant
hereby undertakes to file with the Securities and Exchange
Commission such supplementary and periodic information, documents
and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
Contents of Registration Statement
This Registration Statement on Form S-6 is comprised of the
following papers and documents:
The facing sheet.
The Prospectus consisting of 22 pages.
Additional information not included in the Prospectus (Part II).
The undertaking to file reports.
The signatures.
The following exhibits:
Form of Amended and Restated Trust Indenture
Distribution Agreement with Lexington Funds Distributor, Inc.
Opinion of counsel as to legality of securities being issued
including its consent to the use of its name under the heading
"Legal Opinion" in the Prospectus.
Consent of Certified Public Accountants.
Computation of Performance Quotations
Article 6 Financial Data Schedule
(The Annual Report for the year ending December 31, 1996 was filed
electronically on February 26, 1997 (as form type N-30D). Financial
statements from this 1996 Annual Report have been included in the
Prospectus)
<PAGE>
Registration No. 2-10694
___________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
Exhibits
File With
Form S-6
___________________________
LEXINGTON CORPORATE LEADERS TRUST FUND
___________________________________________________________________________
<PAGE>
EXHIBIT INDEX
The following documents are being filed electronically as exhibits to this
filing:
Form of Amended and Restated Trust Indenture
Distribution Agreement with Lexington Funds Distributor, Inc.
Opinion of Counsel as to legality of securities being issued
Consent of Kramer, Levin, Naftalis & Frankel
Consent of Certified Public Accountants
Computation of Performance Quotations
Article 6 Financial Data Schedule
Cover
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant, Lexington Corporate Leaders Trust Fund, has
duly caused this Registration Statement to be signed on its
behalf by the undersigned thereunto duly authorized in the City
of Saddle Brook and state of New Jersey on the 30th day of April,
1997.
LEXINGTON CORPORATE LEADERS TRUST FUND
/s/ Lawrence Kantor
________________________________
Lawrence Kantor
Executive Vice President
Managing Director and Director
Lexington Management Corporation
LEXINGTON CORPORATE LEADERS TRUST FUND
AMENDED AND RESTATED TRUST INDENTURE
Between
LEXINGTON MANAGEMENT CORPORATION,
as Sponsor, and
STATE STREET BANK AND TRUST COMPANY
as Trustee
EFFECTIVE AS OF ______________________________
<PAGE>
TABLE OF CONTENTS
Page
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE I Definitions. . . . . . . . . . . . . . . . . . . . . .2
Business Day. . . . . . . . . . . . . . . . . . . . . . . .2
Certificate . . . . . . . . . . . . . . . . . . . . . . . .2
Distribution Day. . . . . . . . . . . . . . . . . . . . . .2
Distributive Fund . . . . . . . . . . . . . . . . . . . . .2
Evaluation Time . . . . . . . . . . . . . . . . . . . . . .2
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . .2
Income. . . . . . . . . . . . . . . . . . . . . . . . . . .2
Indenture . . . . . . . . . . . . . . . . . . . . . . . . .2
Participation . . . . . . . . . . . . . . . . . . . . . . .2
Participation Value . . . . . . . . . . . . . . . . . . . .3
Prospectus. . . . . . . . . . . . . . . . . . . . . . . . .3
Record Day. . . . . . . . . . . . . . . . . . . . . . . . .3
Redemption Date . . . . . . . . . . . . . . . . . . . . . .3
Redemption Price. . . . . . . . . . . . . . . . . . . . . .3
Securities. . . . . . . . . . . . . . . . . . . . . . . . .3
Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . .3
Stock Unit. . . . . . . . . . . . . . . . . . . . . . . . .3
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Trust Fund. . . . . . . . . . . . . . . . . . . . . . . . .4
Trust Evaluation. . . . . . . . . . . . . . . . . . . . . .4
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE II Formation of Trust. . . . . . . . . . . . . . . .4
SECTION 2.01. Trust Fund . . . . . . . . . . . . . . . . .4
SECTION 2.02. Purchase of Stock Units. . . . . . . . . . .4
SECTION 2.03. Register of Certificates, Participations . .4
SECTION 2.04. Form of Certificates . . . . . . . . . . . .4
ARTICLE III Administration of Trust . . . . . . . . . . . . .5
SECTION 3.01. Distributive Fund. . . . . . . . . . . . . .5
SECTION 3.02. Certain Deductions and Distributions . . . .5
SECTION 3.03. Dividend Reinvestment Program. . . . . . . .6
SECTION 3.04. Statement and Reports. . . . . . . . . . . .6
SECTION 3.05. Sale of Securities and of Certain Rights . .7
SECTION 3.06. Securities Received Pursuant to an Exchange.7
SECTION 3.07. Counsel. . . . . . . . . . . . . . . . . . .8
SECTION 3.08. Trustee Not to Adjust Accounts . . . . . . .8
SECTION 3.09. Notice of Change in Distributive Fund. . . .8
<PAGE>
ARTICLE IV Evaluation of Securities. . . . . . . . . . . . .8
SECTION 4.01. Evaluation of Securities . . . . . . . . . .8
SECTION 4.02. Liability of the Trustee . . . . . . . . . .8
ARTICLE V Trust Fund Evaluation. . . . . . . . . . . . . . . . .9
SECTION 5.01. Trust Fund Evaluation. . . . . . . . . . . .9
SECTION 5.02. Redemption of Participations . . . . . . . .9
ARTICLE VI Transfer of Interchange of Participations . . . 10
SECTION 6.01. Transfer or Interchange of Participations. 10
SECTION 6.02. Certificate Mutilated, Destroyed, Stolen or Lost10
ARTICLE VII Rights of Holders . . . . . . . . . . . . . . . 11
SECTION 7.01. Beneficiaries of Trust . . . . . . . . . . 11
SECTION 7.02. Ownership of Participations, Certificates. 11
SECTION 7.03. Rights, Terms and Conditions . . . . . . . 11
ARTICLE VIII Sponsor . . . . . . . . . . . . . . . . . . . . 12
SECTION 8.01. Discharge of a Sponsor . . . . . . . . . . 12
SECTION 8.02. Resignation of the Sponsor . . . . . . . . 12
SECTION 8.03. Liability of Sponsor and Indemnification . 12
SECTION 8.04. Sponsor's Fee. . . . . . . . . . . . . . . 13
ARTICLE IX Trustee . . . . . . . . . . . . . . . . . . . . 13
SECTION 9.01. General Matters Relating to Trustee. . . . 13
SECTION 9.02. Books and Records. . . . . . . . . . . . . 15
SECTION 9.03. Indenture and List of Securities on File . 15
SECTION 9.04. Compensation of Trustee. . . . . . . . . . 15
SECTION 9.05. Resignation, Discharge or Removal of Trustee;
Successors . . . . . . . . . . . . . . . . . . . . . 15
SECTION 9.06. Qualification of Trustee . . . . . . . . . 16
ARTICLE X Termination. . . . . . . . . . . . . . . . . . . . . 16
SECTION 10.01. Procedure Upon Termination . . . . . . . . 16
SECTION 10.02. Notice to Holders of Participations Evidenced by
Certificates . . . . . . . . . . . . . . . . . . . . 17
SECTION 10.03. Monies to be Held in Trust Without Interest17
SECTION 10.04. Dissolution of Sponsor Not to Terminate. . 17
ARTICLE XI Miscellaneous Provisions. . . . . . . . . . . . 18
SECTION 11.01. Amendment and Waiver . . . . . . . . . . . 18
SECTION 11.02. Registration of Participations and Trust . 18
SECTION 11.03. Fiscal Year. . . . . . . . . . . . . . . . 19
SECTION 11.04. New York Law to Govern . . . . . . . . . . 19
SECTION 11.05. Notices. . . . . . . . . . . . . . . . . . 19
SECTION 11.06. Severability . . . . . . . . . . . . . . . 19
SECTION 11.07. Separate and Distinct Series . . . . . . . 19
<PAGE>
LEXINGTON CORPORATE LEADERS TRUST FUND
AMENDED AND RESTATED TRUST INDENTURE
Effective as of ___________________________
This Amended and Restated Trust Indenture effective as of
______________, is executed between Lexington Management Corporation, as
Sponsor, and State Street Bank and Trust Company, as Trustee, and the
registered holders from time to time of participations of Lexington
Corporate Leaders Trust Fund.
WITNESSETH THAT:
WHEREAS, the Sponsor, the Trustee and the Holders from time to time
of Corporate Leaders Trust Fund (the "Trust") have made a certain
Indenture dated as of November 18, 1935, as amended and supplemented by
a Supplemental Indenture dated December 27,1935; a Supplemental Indenture
dated January 22, 1936; a Statement dated May 10, 1937; a Supplemental
Indenture dated June 9, 1938; a Supplemental Indenture dated August 23,
1938; a Supplemental Indenture dated February 28, 1941; an Agreement
dated August 11, 1943 made by the Sponsor, and a Letter Agreement dated
August 11, 1943 between the Sponsor and the Trustee; a Supplemental
Indenture dated December 4, 1953; a Supplemental Indenture dated May 22,
1958; a Supplemental Indenture dated February 29, 1960; and an Amended
and Restated Trust Indenture dated November 14, 1989; and an Amendment
dated April 23, 1993; and
WHEREAS, the Sponsor has requested and the Trustee has consented
that the Indenture be modified and supplemented as to Series B, subject
to the approval of the Holders holding certificates of Series B issued
on or after January 1, 1941 and which represent in the aggregate not less
than a majority of the Participations credited to all accounts in Series
B, as hereinafter provided; and
WHEREAS, Holders of Corporate Leaders Trust Fund Certificates Series
A will continue to be governed by the Indenture;
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the Sponsor and the Trustee agree as
follows:
INTRODUCTION
This Amended and Restated Indenture effective as of the day and year
first above written shall be applicable to Series B and to any series
formed subsequent to the effective date hereof. Each series shall be
independent of all other series. All cash, securities, properties and
interests received with respect to each series shall be administered
separately and in trust, as hereinafter provided, for the registered
Holders of the respective series. No persons or parties shall have any
rights, titles or interests under any circumstances in such series by
virtue of any interest in or connection with any other series or the
certificates thereof. This Amended and Restated Indenture and the
respective rights, powers, obligations and duties of the Sponsor, the
Trustee and each Holder hereunder shall be construed in all respects as
if this Amended and Restated Indenture constituted a separate indenture
for each series which shall at any time be outstanding hereunder and each
term and provision of this Amended and Restated Indenture shall be
construed, unless the contrary is clearly required by the context, to
refer (whether or not expressly so stated) severally to each such series
as if it were the only series so outstanding.
1
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ARTICLE I
Definitions
Whenever used in this Amended and Restated Indenture, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
Business Day
Any day on which the New York Stock Exchange and the Federal Reserve
Bank of New York and the Trustee are open for business.
Certificate
Any one of the non-negotiable certificates duly executed by the
Trustee, in each case in substantially the form set forth as Exhibit A
with the blanks appropriately filled in.
Distribution Day
June 30 and December 31 of each year.
Distributive Fund
The meaning assigned in Section 3.01.
Evaluation Time
4:00 p.m. New York time.
Holder
The registered holder of any Participation, whether or not evidenced
by a certificate, as recorded on the registration books of the Trustee.
Income
Any cash dividend distribution by an issuer of a Security in respect
thereof, whether or not such distribution is taxable to the recipient
thereof.
Indenture
The Indenture dated November 18, 1935 whereby the Trust Fund was
created and all amendments and supplements thereto.
Participation
A fractional undivided interest in and ownership of the Trust Fund
and the Distributive Fund.
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Participation Value
The total of the respective values of the Trust Fund the
Distributive Fund as determined by a Trust Evaluation, divided by the
number of Participations then outstanding.
Prospectus
The prospectus relating to the Trust Fund filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended and
the Investment Company Act of 1940, as amended.
Record Day
The next to the last business day of the month.
Redemption Date
The meaning assigned in Section 5.02.
Redemption Price
The meaning assigned in Section 5.02.
Securities
The equity securities which are listed or referred to as Securities
hereunder in Schedule A to this Amended and Restated Indenture as may be
reconstituted from time to time as provided herein.
Sponsor
Lexington Management Corporation or its successor or any successor
Sponsor appointed as herein provided.
Stock Unit
A Stock Unit is comprised of one share of common stock of each of
the Securities listed in Schedule A to this Amended and Restated
Indenture as may be reconstituted from time to time as provided herein.
Trust
The trust created by the Indenture, as amended by this Amended and
Restated Indenture (and all series created therein or at anytime
outstanding hereunder) which shall consist of a Trust Fund and a
Distributive Fund.
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Trust Fund
The meaning assigned to it in Section 2.01.
Trust Evaluation
The meaning assigned to it in Section 5.01.
Trustee
State Street Bank and Trust Company or its successors or any
successor trustee appointed as herein provided.
ARTICLE II
Formation of Trust
SECTION 2.01. Trust Fund. The Trust Fund shall consist of stock
units and such cash as may be available for the purchase of Stock Units.
The Trustee shall hold the Trust Fund under this Amended and Restated
Indenture as Trustee pursuant to the Indenture.
The interest of each Holder under this Amended and Restated
Indenture shall consist of respective interests in the Trust Fund and the
Distributive Fund (as described in Section 3.01). Such interest of each
Holder shall be designated in Participations. No Holder shall have any
interest in any specific Stock Units or any property held as part of the
Trust Fund, but the interest of each Holder shall be an undivided
interest in the whole of the Trust Fund and Distributive Fund (subject
to deductions and reserves as provided in Section 3.02) and shall bear
the same ratio to the whole of such Trust Fund and Distributive Fund as
the number of Participations credited to such Holder's account shall bear
to the total number of Participations credited to all Holders' accounts.
SECTION 2.02. Purchase of Stock Units. Monies received on sales
of Participations and any excess cash insufficient to purchase an entire
Stock Unit following a Distribution Date will be held in the Trust Fund
without interest until the business day following receipt of sufficient
cash to purchase at least one hundred (100) Stock Units at the then
market price.
SECTION 2.03. Register of Certificates, Participations. A
register shall be kept by the Trustee containing the names and addresses
of the Holders and the number of Participations credited to each Holder's
account, whether or not represented by a certificate, and in which all
issues, exchanges, transfers, redemptions and cancellations of
Participations shall be recorded. Unless a Holder requests to be issued
a Certificate hereunder, the Trustee will record the ownership of
Participations owned by such person in said register without issuing a
certificate, in which event (i) such register shall be conclusive as to
such person's ownership of such Participations and entitlement to all the
rights such person would have as the registered owner of a certificate
representing such Participations, (ii) such person shall have the right
at any time to request the issuance of a certificate or certificates
representing such Participations in denominations deemed appropriate by
the Trustee, and (iii) such Participations (if not represented by a
certificate) may be transferred by such person only by entry of the name
and address of the transferee in the register maintained by the Trustee
upon delivery to the Trustee of a written instrument or instruments of
transfer in form satisfactory to the Trustee.
SECTION 2.04. Form of Certificates. Each certificate referred to
in Section 2.04 is, and each certificate hereafter issued shall be
numbered serially for identification, in fully registered form,
transferable only on the books of the Trustee as herein provided, duly
executed by an authorized signatory of the Trustee and in facsimile by
the Chairman of the Board, the President or one of the Vice Presidents
of the Sponsor and dated the date of execution and delivery by the
Trustee.
4
<PAGE>
ARTICLE III
Administration of Trust
SECTION 3.01. Distributive Fund. Except to the extent that the
Trustee is participating in a dividend reinvestment program of an issuer
of Securities in accordance with Section 3.03, the Trustee shall collect
the dividends, interest and capital gains on Securities and any other
money received by the Trustee under this Amended and Restated Indenture
and credit such amounts to an account to be known as the "Distributive
Fund". All distributions other than cash shall be sold for cash by the
Trustee. Upon any stock split, a number of shares equal to the number
of outstanding Stock Units shall be retained in the Trust Fund and the
balance shall be sold.
The Trustee shall invest the funds in the Distributive Fund in
obligations issued or guaranteed by the United States Government, its
agencies or instrumentalities which mature prior to the next Distribution
Date. On each Distribution Day the Trustee shall use such distributions
to purchase additional Stock Units in accordance with the Dividend
Reinvestment Program.
The Trustee may from time to time allocate a reserve for any
applicable taxes or other governmental charges that may be payable out
of the Trust Fund. The Trustee shall not be required to distribute to
the Holders any of the amounts so allocated, provided, however, that if
it, in its sole discretion, determines that such amounts are no longer
necessary for payment of any applicable taxes or other governmental
charges, then it shall promptly include such amounts in the Distributive
Fund.
SECTION 3.02. Certain Deductions and Distributions. On the last
business day of each month the Trustee shall:
(a) deduct from the Distributive Fund and pay to itself
individually (i) the amounts that it is at the time entitled to receive
pursuant to Section 9.04 on account of its services theretofore performed
and expenses theretofore incurred and (ii) the amount that it is at the
time entitled to receive under the terms of this Section in reimbursement
of amounts advanced by it pursuant to that Section;
(b) deduct from the Distributive Fund an amount equal to unpaid
fees and expenses of the Trust Fund, if any, of counsel and auditors
pursuant to Section 9.01;
(c) deduct from the Distributive Fund the amount that the Sponsor
is at the time entitled to receive as compensation pursuant to Section
8.04 for performing certain administrative services.
The Trustee shall as of each Distribution Day compute to at least
two decimal places the amount of the semi-annual income distribution per
Participation for each Holder of record at the close of business on the
preceding Record Day and shall use such distributions to purchase
additional Stock Units in accordance with the Dividend Reinvestment
Program unless the Trustee has been authorized by the Holder to
distribute at the post office address of such Holder appearing on the
register of the Trustee or by such other means as shall have been
mutually agreed upon by such Holder and the Trustee, an amount
substantially equal to the semi-annual distribution computed on such
Distribution Day, except for cash required to be held specially under
Section 3.01; provided, however, that the Trustee in its discretion may
on any Distribution Day determine that the amount to be distributed to
Holders should be more or less than the amount of the semi-annual income
distribution per Participation because of any unusual or extraordinary
increase or decrease in the expenses incurred or expected to be incurred
by the Trust Fund. In making the computation of such Holder's interest
in the balance of the Distributive Fund, fractions of less than one cent
per Participation shall be omitted.
5
<PAGE>
Except as required by the preceding paragraph, Holders of record on
the register of the Trustee at the close of business on the Record Day
prior to each Distribution Day shall be entitled to the distribution in
respect of such Distribution Day, and no liability shall attach to the
Trustee by reason of payment to or on the order of any such Holder of
record.
SECTION 3.03. Dividend Reinvestment Program. Unless a Holder
elects otherwise, cash distributions and amounts received from the sale
of Securities, stock dividends or stock splits will be reinvested in
additional Stock Units on the business day following the Distribution
Date at the net asset value on the applicable Distribution Date. To the
extent there is insufficient cash funds to purchase an entire Stock Unit,
such funds shall be held in the Trust Fund pursuant to Section 3.02.
Holders who choose not to participate in the dividend reinvestment
program must inform the Sponsor in writing prior to the next Distribution
Date.
SECTION 3.04. Statement and Reports. With each distribution from
the Distributive Fund the Trustee shall set forth, either in the
instrument by means of which payment of such distribution is made or in
a separate statement to each Holder, the amount being distributed to each
such account expressed as a dollar amount per Participation and, if such
distribution was reinvested in Participations, the number of such
Participations in the Holder's account maintained by the Trustee.
Within a reasonable period of time after the last business day of
each calendar year, the Trustee shall furnish to each person who at any
time during such calendar year was a Holder a statement setting forth,
with respect to such calendar year:
(a) (1) the amount of income received on the sale or
liquidation of Securities;
(2) the deductions for applicable taxes and fees
and expenses of the Trustee and the Sponsor and of
counsel pursuant to Section 3.01, if any;
(3) any other amounts credited or deducted from
the Distributive Fund;
(4) the balance remaining after such
distributions, deductions and reservations; and
(b) the following information:
(1) a list of the Securities disposed of or
acquired during such calendar year;
(2) the number of Participations outstanding on
the last business day of such calendar year;
(3) the Participation Value based on the last
Trust Evaluation made during such calendar year; and
(4) the amounts actually distributed to Holders
during such calendar year expressed as total dollar
amounts and as dollar amounts per Participation
outstanding on the Record Days for such distributions
and the status of such distributions for Federal income
tax purposes and, if any such distributions were
reinvested in Participations, the number of such
Participations in each Holder's account maintained by
the Trustee.
6
<PAGE>
SECTION 3.05. Sale of Securities and of Certain Rights. The
Sponsor by written notice may direct the Trustee to sell Securities as
to which any of the following conditions exist at such price and time and
in such manner as shall be deemed appropriate by the Sponsor if the
Sponsor shall have determined that any one or more of the following
conditions exist:
(a) that there has been a failure by such Securities to declare or
pay dividends;
(b) that any materially adverse action or proceeding has been
instituted at law or in equity seeking to restrain or enjoin the
declaration or payment of dividends on any such Securities or that there
exists any other materially adverse legal question or impediment
affecting such Securities or the declaration or payment of dividends on
the same;
(c) that there has occurred any breach of covenant or warranty in
any trust indenture or other document relating to the issuer which might
materially and adversely affect either immediately or contingently the
declaration or payment of dividends on such Securities;
(d) that there has been a default in the payment of principal or
par or stated value of, premium, if any, or income on any other
outstanding securities of the issuer or the guarantor of such securities
which might materially and adversely, either immediately or contingently,
affect the declaration or payment of dividends on the Securities;
(e) that such Securities (except for certificates of deposit)
shall cease to be or shall not be listed on the New York Stock Exchange,
and, after a period of fifteen (15) business days, shall not have been
reinstated.
Upon receipt of such direction from the Sponsor with respect to any
Securities, or in the case of options, warrants or other rights to
purchase Securities distributed to the Trust Fund in respect of
Securities as soon as is practicable after receipt of such options,
warrants or other rights, the Trustee shall proceed to sell the specified
Securities or any such rights. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by reason of any
sale made pursuant to any such direction or by reason of the failure of
the Sponsor to give any such direction, and in the absence of such
direction the Trustee shall have no duty to inquire whether or not any
of the foregoing conditions exist or sell any Securities under this
Section 3.05. The Sponsor shall not be liable for errors of judgment in
directing or failing to direct the Trustee pursuant to this Section 3.05
or for errors of judgment. This provision, however, shall not protect
the Trustee or Sponsor against any liability for which they would
otherwise be subject by reason of wilful misfeasance, bad faith or gross
negligence in the performance of their duties or by reason of their
reckless disregard of their obligations and duties hereunder.
SECTION 3.06. Securities Received Pursuant to an Exchange. In
the event of the merger or consolidation of the issuer of any of the
Securities with any other corporation or reorganization (including the
sale or conveyance or lease by it of all or substantially all of its
properties to any other corporation) or any recapitalization or
readjustment of the capital stock of any issuer of the Securities; and
an offer by the issuer of the Securities is made to issue new Securities
of the same or a different kind or for securities of any other
corporation and/or for other property and/or for cash, the Sponsor may
instruct the Trustee in writing to accept or reject such offer or take
any other action with respect thereto as the Sponsor may deem proper.
Any Securities received in exchange shall be deposited hereunder and
shall be subject to the terms and conditions of this Amended and Restated
Indenture to the same extent as the Securities originally deposited
hereunder and the Trustee shall give notice to the Sponsor in writing
with respect to the acquisition of such Securities.
7
<PAGE>
SECTION 3.07. Counsel. The Sponsor may employ from time to time
counsel to act on behalf of the Trust for any legal services in
connection with the Securities, including advice as to any legal matters
relating to the possible disposition or acquisition of any Securities
pursuant to any provision hereof. The fees and expenses of such counsel
shall be paid by the Trustee as provided in Section 9.01 hereof.
SECTION 3.08. Trustee Not to Adjust Accounts. Nothing in this
Amended and Restated Indenture, or otherwise, shall be construed to
require the Trustee to make any adjustments to the Distributive Fund by
reason of any premium or discount in respect of any of the Securities.
SECTION 3.09. Notice of Change in Distributive Fund. The Trustee
shall give prompt written notice to the Sponsor of all amounts credited
to or withdrawn from the Distributive Fund pursuant to any of the
provisions of this Article III, and the balance in such Fund after giving
effect to the credit or withdrawal.
ARTICLE IV
Evaluation of Securities
SECTION 4.01. Evaluation of Securities. The Trustee shall
determine separately and promptly furnish to the Sponsor upon request the
value of each Security as of the Evaluation Time based on the closing
sale price of each Security on the days on which Trust Evaluation is
required by Section 5.01. A security listed or traded on a recognized
stock exchange is valued at its last sale price prior to the time when
assets are valued on the principal exchange on which the security is
traded. If no sale is reported at that time, the mean between the
current bid and asked price will be used. All other securities for which
over-the-counter market quotations are readily available are valued at
the mean between the last current bid and asked price. Short-term
securities having maturity of 60 days or less are valued at cost, when
it is determined by the Trustee that amortized cost reflects the fair
value of such securities. Securities for which market quotations are not
readily available and other assets are valued at fair value as determined
in good faith by the Trustee.
For each evaluation, the Trustee shall also determine and furnish
to the Sponsor the aggregate of (a) the value of all Securities on the
basis of such evaluation and (b) on the basis of the information pursuant
to Section 5.01, cash on hand in the Trust Fund (other than cash
specially for the purchase of Securities).
For the purposes of this Section 4.01, the Trustee may obtain
current bid prices for the Securities from investment dealers or brokers
that customarily deal in corporate securities or from any other reporting
service or source of information which the Trustee deems appropriate.
SECTION 4.02. Liability of the Trustee. The Sponsor and the
Holders may rely on any evaluation furnished by the Trustee and shall
have no responsibility for the accuracy thereof. The determinations made
by the Trustee hereunder shall be made in good faith upon the basis of
the best information available to it. The Trustee shall be under no
liability to the Sponsor or the Holders for errors in judgment, provided,
however, that this provision shall not protect the Trustee against any
liability to which it would otherwise be subject by reason of wilful
misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and
duties hereunder.
8
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ARTICLE V
Trust Evaluation
SECTION 5.01. Trust Evaluation. As of the Evaluation Time (1) on
each June 30 and December 31 (or the last business day prior thereto)
commencing with the first such day which is more than six months after
the date of this Amended and Restated Indenture, (2) on any business day
as of the Evaluation Time next following the tender of any Participation
for redemption and (3) on any other business day desired by it, the
Trustee shall:
Add:
(1) cash on hand in the Distributive Fund,
(2) the aggregate value of each issue of the Securities,
(3) dividends on any investments of monies in the
Distributive Fund in U.S. Government in U.S. Government obligations, and
(4) any other assets of the Trust.
Deduct:
(1) amounts representing any applicable taxes on governmental
charges payable out of the Distributive Fund,
(2) amounts representing estimated accrued fees and expenses
of the Trust including but not limited to unpaid fees and expenses of the
Trustee (including legal and auditing expenses), and the Sponsor pursuant to
Section 9.01,
(3) cash allocated for distribution to Holders of record as of a
date prior to the evaluation then being made,
(4) any other liabilities of the Trust.
The resulting figure is herein called a "Trust Evaluation."
SECTION 5.02. Redemption of Participations. Any Participation
tendered by the Holder for redemption to the Trustee at its principal
office shall be redeemed and canceled by the Trustee in the manner set
forth below. Any Participation evidenced by a certificate tendered by
the Holder as set forth above, any Participation in uncertificated form
tendered by means of an appropriate request for redemption in form
approved by the Trustee shall be redeemed at the net asset value next
determined after receipt of the request (the "Redemption Date"). Subject
to payment by such Holder of any tax or other governmental charges which
may be imposed thereon, such redemption is to be made by payment on the
Redemption Date of cash equal to the Participation Value (determined on
the basis of the Trust Evaluation made in accordance with Section 5.01)
multiplied by the number of Participations being redeemed (herein called
the "Redemption Price"). The balance paid on any redemption, including
accrued or declared but unpaid income, if any, shall be withdrawn from
the Distributive Fund to the extent that funds are available for such
purpose. If such available balance shall be insufficient, the Trustee
shall inform the Sponsor to sell such Securities form among those
designated on the current list for such purpose as provided below and in
the manner, in the Sponsor's discretion, as it shall deem advisable or
necessary. Sales of Securities by the Trustee shall be made in such
manner as the Trustee shall determine will bring the best price
9
<PAGE>
obtainable for the Trust Fund subject to any minimum value limitations
on sales which shall have been specified by the Sponsor. Securities
transactions of the Trust Fund will be placed by the Sponsor with
unaffiliated brokers or dealers at the most favorable price and execution
of orders. In the event that funds are withdrawn from the Distributive
Fund or Securities are sold for payment of any portion of the Redemption
Price representing accrued or declared but unpaid income, the
Distributive Fund shall be reimbursed when sufficient funds are next
available.
Not later than the close of business on the day of tender of a
Participation for redemption by a Holder other than the Sponsor, the
Trustee shall notify the Sponsor of such tender.
The Trustee may in its discretion, and shall when so directed by the
Sponsor in writing, suspend the right of redemption or postpone the date
of payment of the Redemption Price for more than seven calendar days
following the day on which tender for redemption is made (1) for any
period during which the New York Stock Exchange, Inc. is closed other
than customary weekend and holiday closings; (2) for any period during
which (as determined by the Securities and Exchange Commission by rule,
regulation or order) (i) trading on the New York Stock Exchange, Inc. is
restricted or (ii) an emergency exists as a result of which disposal by
the Trust Fund of the Securities is not reasonably practicable or it is
not reasonably practicable fairly to determine in accordance herewith the
value of the Securities for the purposes of any Trust Evaluation; or (3)
for such other periods as the Securities and Exchange Commission may by
order permit.
ARTICLE VI
Transfer or Interchange of Participations
SECTION 6.01. Transfer or Interchange of Participations.
Ownership of any Participation may be transferred by the registered
Holder thereof by presentation at the corporate office of the Trustee of
a written instrument or instruments of transfer in form satisfactory to
the Trustee and executed by the Holder or his authorized attorney,
whereupon the records of the Trustee will be revised to reflect such
transfer. Certificates evidencing Participations, if issued, must be
properly surrendered and endorsed or accompanied by a written instrument
or instruments of transfer in form satisfactory to the Trustee and
executed by the Holder or his authorized attorney. If specifically
requested by the exchanging Holder, a new registered certificate or
certificates for the same number of Participations executed by the
Trustee and the Sponsor will be issued in exchange and substitution
therefor.
Participations issued pursuant to this Amended and Restated
Indenture are interchangeable for one or more other Participations. The
Sponsor and the Trustee may deem and treat the person in whose name any
Participation shall be registered upon the books of the Trustee as the
owner of such Participation for all purposes hereunder and neither the
Sponsor nor the Trustee shall not be affected by any notice to the
contrary, nor be liable to any person or in any way for so deeming and
treating the person in whose name any Participation shall be so
registered.
A sum sufficient to pay any tax or other governmental charge that
may be imposed in connection with any such transfer or interchange shall
be paid by the Holder to the Trustee.
All certificates canceled pursuant to this Amended and Restated
Indenture shall be disposed of by the Trustee without liability on its
part.
SECTION 6.02. Certificate Mutilated, Destroyed, Stolen or Lost.
In case any certificate shall become mutilated or be destroyed, stolen
or lost, the Sponsor upon the Holder's written request shall execute and
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deliver a new certificate in exchange and substitution therefor upon the
Holder's furnishing the Sponsor with proper identification and indemnity
satisfactory to the Sponsor, complying with such other reasonable
regulations and conditions as the Sponsor may prescribe and paying such
expenses as the Sponsor may incur. Any mutilated certificate shall be
duly surrendered and canceled before any new certificate shall be issued
in exchange and substitution therefor. Upon the issuance of any new
certificate a sum sufficient to pay any tax or other governmental charge
and the fees and expenses of the Trustee may be imposed. Any such new
certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed certificate shall be found
at any time.
In the event the Trust has terminated or is in the process of
termination, the Sponsor may, instead of issuing a new certificate in
exchange and substitution for any certificate which shall have become
mutilated or shall have been destroyed, stolen or lost, make the
distributions in respect of such surrender thereof (except in the case
of a mutilated certificate) as provided in Section 5.02 hereof if the
Trustee is furnished with such security or indemnity as it may require
to save it harmless, and in the case of destruction, loss or theft of a
certificate evidence to the satisfaction of the Sponsor of the
destruction, loss or theft of such certificate and of the ownership
thereof.
ARTICLE VII
Rights of Holders
SECTION 7.01. Beneficiaries of Trust. By the purchase and
acceptance or other lawful delivery and acceptance of any Participation,
a Holder shall be deemed to be a beneficiary of the Trust created by this
Amended and Restated Indenture and vested with all right, title and
interest in the Trust attributable to such Participation, subject to the
terms and conditions of this Amended and Restated Indenture.
SECTION 7.02. Ownership of Participations, Certificates.
Ownership of Participations is evidenced by recording on the books of the
Trustee, which recording shall be by a Holder's investment account number
with the Sponsor as long as such an account is maintained. If a Holder
so requests in writing with signature guaranteed by an officer of a
national bank and trust company or by a member firm of the National
Association of Securities Dealers, Inc. (or in such other manner as may
be acceptable to the Trustee), the Trustee shall issue without charge a
certificate or certificates to such Holder in the amount of such Holder's
Participation.
SECTION 7.03. Rights, Terms and Conditions. In addition to the
other rights and powers set forth in and the other provisions and
conditions of this Amended and Restated Indenture, Holders shall have the
following rights and powers and shall be subject to the following terms
and conditions:
(a) a Holder may at any time tender his Participation or
Participations for redemption in accordance with Section 5.02;
(b) the death or incapacity of any Holder shall not operate to
terminate this Amended and Restated Indenture or Trust, nor entitle his
legal representatives or heirs to claim an accounting or to take any
action or proceeding in any court of competent jurisdiction for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them. Each
Holder expressly waives any right he may have under any rule of law, or
the provisions of any statute, or otherwise, to require the Trustee at
any time to account, in any manner other than as expressly provided in
this Amended and Restated Indenture, in respect of the Securities or
monies from time to time received, held and applied by the Trustee
hereunder;
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(c) except as provided in Section 11.01, no Holder shall have any
right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto; nor
shall anything herein set forth, or contained in the terms of the
Participations, be construed so as to constitute the Holders from time
to time as partners or members of any joint venture; nor shall any Holder
ever be under any liability to any third persons by reason of any action
taken by the parties to this Amended and Restated Indenture, or any other
cause whatsoever.
ARTICLE VIII
Sponsor
SECTION 8.01. Discharge of a Sponsor. In the event that the
Sponsor shall fail to undertake or perform any of the duties which by the
terms of this Amended and Restated Indenture are required by it to be
undertaken or performed and such failure shall continue for 30 days after
notice to the Sponsor from the Trustee or if a court having jurisdiction
in the premises shall enter a decree or order for relief in respect of
any Sponsor in an involuntary case, or the Sponsor shall commence a
voluntary case, under any applicable bankruptcy, insolvency, or other
similar law now or hereafter in effect, or any receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) for the
Sponsor or for any substantial part of its property shall be appointed
or the Sponsor shall make any general assignment for the benefit of
creditors or shall generally fail to pay its debts as they become due,
then such Sponsor shall forthwith be and shall be deemed to be discharged
forever as Sponsor hereunder.
Notwithstanding the discharge of the Sponsor in accordance with this
Section, such Sponsor shall continue to be fully liable in accordance
with the provisions hereof in respect of action taken or refrained from
under this Amended and Restated Indenture by it before the date of such
discharge, as fully and to the same extent as if no discharge had
occurred.
SECTION 8.02. Resignation of the Sponsor. If at any time the
Sponsor desires to resign its position as Sponsor hereunder, it may
resign by delivering to the Trustee an instrument of resignation executed
by the Sponsor. Such resignation shall not be or become effective or
valid for any purpose whatsoever unless prior to or concurrently with the
delivery thereof the Trustee shall have appointed a successor Sponsor to
assume, with such compensation from the Trust as the Trustee may deem
reasonable under the circumstances, the duties and obligations of the
resigning Sponsor hereunder by an instrument of appointment and
assumption executed by the Trustee and the successor Sponsor any such
successor shall be satisfactory to the Trustee. Upon such delivery, the
resigning Sponsor shall be discharged and shall no longer be liable in
any manner hereunder except as to acts or omissions occurring prior to
such delivery. The successor Sponsor shall not be under any liability
hereunder for any occurrences or omissions prior to the execution of this
instrument.
SECTION 8.03. Liability of Sponsor and Indemnification.
(a) The Sponsor shall be under no liability to the Trust Fund or
any Holders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Amended and Restated Indenture, or
for errors in judgment or for depreciation or loss incurred by reason of
the purchase or sale of any Securities, provided, however, that this
provision shall not protect the Sponsor against any liability to which
they would otherwise be subject by reason of wilful misfeasance, bad
faith or gross negligence in the performance of its duties or by reasons
of its reckless disregard of its obligations and duties hereunder. The
Sponsor may rely in good faith on any paper, order, notice, list,
affidavit, receipt, evaluation, opinion endorsement, assignment, draft
or any other document of any kind prima facie properly executed and
submitted to them by the Trustee, the Trustee's counsel or any other
person for any matter arising hereunder (including the determination as
to whether any Security is a Restricted Security). The Sponsor shall in
no event be deemed to have assumed or incurred any liability, duty or
obligation to any Holder or the Trustee other than as expressly provided
for herein.
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(b) The Trust Fund shall pay and hold the Sponsor harmless from
and against any loss, liability or expense incurred in acting as Sponsor
of the Fund other than by reason of wilful misfeasance, bad faith or
gross negligence in the performance of their duties or by reason of their
reckless disregard of their obligations and duties hereunder, including
the costs and expenses of the defense against any claim or liability in
the premises. The Sponsor shall not be under any obligation to appear
in, prosecute or defend any expense or liability, provided, however, that
the Sponsor may in its discretion undertake any such action which they
may deem necessary or desirable in respect of this Amended and Restated
Indenture and the rights and duties of the parties hereto and the
interests of the Holders hereunder and in such event, the legal expenses
and costs of any such action and any liability resulting therefrom shall
be expenses, costs and liability of the Trust Fund and shall be paid
directly by the Trustee out of the Distributive Fund.
(c) None of the provisions of this Amended and Restated Indenture
shall be deemed to protect or purport to protect the Sponsor against any
liability to the Trust Fund or to the Holders to which the Sponsor would
otherwise be subject by reason of wilful misfeasance, bad faith or gross
negligence in performance of their duties, or by reason of the Sponsor's
reckless disregard of their obligations and duties under this Amended and
Restated Indenture.
SECTION 8.04. Sponsor's Fee. For performing certain
administrative services under this Amended and Restated Indenture, the
Sponsor shall receive an annual fee paid monthly by the Trustee in
accordance with Section 3.02 of a percentage of the Trust Fund's average
daily assets in an amount specified as compensation in Schedule C annexed
hereto provided that in no event shall such compensation exceed the
amount permitted pursuant to Section 26 of the Investment Company Act of
1940. If the balances in the Distributive Fund shall be insufficient to
provide amounts payable pursuant to this Section 8.04, the Trustee shall
have the power to sell securities in the manner provided in Section 3.05
hereof. The Trustee shall not be liable or responsible in any way for
depreciation or loss incurred by reason of any sale of securities made
pursuant to this Section 8.04.
ARTICLE IX
Trustee
SECTION 9.01. General Matters Relating to Trustee.
(a) All monies deposited with or received by the Trustee hereunder
shall be held by it in trust as part of the Trust Fund or the
Distributive Fund until required to be disbursed in accordance with the
provisions of this Amended and Restated Indenture and such monies will
be segregated by separate recordation on the trust ledger of the Trustee
in such manner as shall constitute the segregation and holding thereof
in trust within the meaning of the Investment Company Act of 1940.
(b) The Trustee shall be under no liability for any action taken
in good faith on any paper, order, list, demand, request, consent,
affidavit, notice, opinion, direction, endorsement, assignment,
resolution, draft or other document whether or not of the same kind,
prima facie properly executed, or for the disposition of monies or
Securities pursuant to this Amended and Restated Indenture; provided,
however, that this provision shall not protect the Trustee against any
liability to which it would otherwise be subject by reason of wilful
misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and
duties hereunder, and the Trustee may construe any of the provisions of
this Amended and Restated Indenture insofar as the same may appear to be
ambiguous or inconsistent with any other provisions hereof, and any
construction of any such provisions hereof by the Trustee in good faith
shall be binding upon the parties hereto and the Holders.
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(c) The Trustee shall not be responsible for or in respect of the
recitals herein, the validity or sufficiency of this Amended and Restated
Indenture or for the due execution hereof by the Sponsor or for the form,
character, genuineness, sufficiency, value or validity of any Securities
(except that the Trustee shall be responsible for the exercise of due
care in determining the genuineness of Securities delivered to it or of
Securities purchased by the Trustee) or for or in respect of the validity
or sufficiency of the certificates (except for the due execution thereof
by the Trustee), or for the due execution thereof by the Sponsor, and the
Trustee shall in no event assume or incur any liability, duty or
obligation to any Holder or to the Sponsor, other than as expressly
provided for herein. The Trustee shall not be responsible for or in
respect of the validity of any signature by or on behalf of the Sponsor.
(d) The Trustee shall not be under any obligation to appear in,
prosecute or defend any action, which in its opinion may involve it in
expense or liability unless it shall be furnished with such reasonable
security and indemnity against such expense or liability as it may
require, and any pecuniary cost of the Trustee from such actions shall
be deductible from and a charge against the Distributive Fund. The
Trustee shall in its discretion undertake such action as it may deem
necessary at any and all times to protect the Trust Fund and the rights
and interest of the Holders pursuant to the terms of this Amended and
Restated Indenture, provided, however, that the expenses and costs of
such actions, undertakings or proceedings shall be reimbursable to the
Trustee from the Distributive Fund.
(e) The Trustee may employ agents, attorneys, accountants and
auditors and shall not be answerable for the default or misconduct of any
such agents, attorneys, accountants or auditors if such agents,
attorneys, accountants or auditors shall have been selected with
reasonable care. The accounts of the Trust shall be examined not less
frequently than annually by independent certified public accountants
designated from time to time by the Sponsor, and the report of such
accountants shall be furnished by the Trustee to Holders as required
under the Investment Company Act of 1940. The Trustee shall not be
liable in respect of any action taken or suffered under this Amended and
Restated Indenture in good faith, in accordance with an opinion of
counsel. The fees and expenses charged by such agents, attorneys,
accountants or auditors shall constitute an expense of the Trustee
reimbursable from the Distributive Fund.
(f) If at any time the Sponsor shall fail to undertake or perform
any of the duties which by the terms of this Amended and Restated
Indenture are required by it to be undertaken or performed, or the
Sponsor shall become incapable of acting, or if a court having
jurisdiction in the premises shall enter a decree or order for relief in
respect of the Sponsor in an involuntary case, or the Sponsor shall
commence a voluntary case, under any applicable bankruptcy, insolvency,
or other similar law now or hereafter in effect, or any receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) for the Sponsor or for any substantial part of its property
shall be appointed or the Sponsor shall make any general assignment for
the benefit of creditors or shall generally fail to pay its debts as they
become due, then in any such case, the Trustee may do any one or more of
the following: (1) appoint a successor Sponsor which shall act hereunder
in all respects in place of such Sponsor and which may be compensated at
rates deemed by the Trustee to be reasonable under the circumstances, by
deduction from the Distributive Fund, but no such deduction shall be made
exceeding such reasonable amount as permitted in accordance with Section
26(a)(2)(C) of the Investment Company Act of 1940; (2) act hereunder in
its own absolute discretion without appointing any successor Sponsor and
receive additional compensation at rates determined as provided in clause
(1); or (3) terminate this Amended and Restated Indenture and the trust
created hereby and liquidate the Trust in the manner provided in Section
10.01.
(g) The Sponsor shall have the right to purchase any Participation
tendered for redemption by notifying the Trustee in writing of its
election to make such purchase as soon as practicable thereafter. Such
purchase shall be made by payment for such Participation by the Sponsor
to the Holder not later than the close of business on the Redemption Date
of an amount not less than the Redemption Price which would otherwise be
payable by the Trustee to such Holder.
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(h) In no event shall the Trustee or Sponsor be personally liable
for any taxes or other governmental charges imposed upon or in respect
of the Securities or upon the interest thereon. The Trustee shall be
reimbursed and indemnified for all such taxes and charges, for any tax
or charge imposed against the Trustee as trustee of the Trust and for any
expenses, including counsel fees, which the Trustee may sustain or incur
with respect to such taxes and charges.
(i) Notwithstanding any provisions of this Amended and Restated
Indenture to the contrary, except as set forth in Section 8.04, no
payment to the Sponsor or to any principal underwriter (as defined in the
Investment Company Act of 1940) for the Trust Fund or to any affiliated
person (as so defined) or agent of the Sponsor or such underwriter shall
be allowed the Trustee as an expense except for payment of such
reasonable amounts as permitted under the Investment Company Act of 1940
and rules and regulations adopted by the Securities and Exchange
Commission.
SECTION 9.02. Books and Records. The Trustee shall keep proper
books of record and account of all the transactions under this Amended
and Restated Indenture at its corporate trust office including, as agent
of the Sponsor, a record of the name and address of Holders, and the
number of Participations registered in the name of such Holders
(indicating whether they are evidenced by certificates or in
uncertificated form), and such books and records shall be open to
inspection by any Holder at all reasonable times during usual business
hours of the Trustee.
SECTION 9.03. Indenture and List of Securities on File. The
Trustee shall keep a conformed copy or duplicate original of this Amended
and Restated Indenture on file at its corporate trust office available
for inspection at all reasonable times during its usual business hours
by any Holder, and the Trustee shall keep and so make available for
inspection a current list of Securities.
SECTION 9.04. Compensation of Trustee. The Trustee shall be
entitled to reasonable compensation for all services rendered by it
hereunder, and to be reimbursed for all of its disbursements and
exonerated from and indemnified against all expenses and liabilities
which it shall incur, suffer or be subject to hereunder. All losses,
expenses and liabilities of the Trustee caused otherwise than by its bad
faith shall be conclusively deemed to be part of its expense hereunder.
The Trustee's normal and extraordinary compensation and reimbursement of
expenses and losses shall be charged monthly by the Trustee against the
Distributive Fund in accordance with Section 3.02. If the balances in
the Distributive Fund shall be insufficient to provide for amounts
payable pursuant to this Section 9.04, the Trustee shall have the power
to sell Securities in the manner provided in Section 3.05 hereof. The
Trustee shall not be liable or responsible in any way for depreciation
or loss incurred by reason of any sale of Securities made pursuant to
this Section 9.04.
SECTION 9.05. Resignation, Discharge or Removal of Trustee;
Successors.
(a) The Trustee may resign and be discharged of its obligations
with respect to the Trust Fund by executing an instrument in writing
resigning as such Trustee, filing the same with the Sponsor and mailing
a copy of a notice of resignation to all Holders then of record at the
expense of the Trust Fund, not less than sixty days before the date
specified in such instrument when, subject to Section 8.03(c), such
resignation is to take effect. Upon receiving such notice of
resignation, the Sponsor shall use its best efforts promptly to appoint
a successor Trustee in the manner and meeting the qualifications
hereinafter provided. Notice of such appointment of a successor Trustee
shall be mailed promptly after acceptance of such appointment by the
successor Trustee to each Holder then of record. In case at any time the
Trustee shall not meet the requirements set forth in Section 9.06 hereof,
or shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or a receiver of such Trustee or of its property shall be
appointed, or any public officer shall take charge or control of such
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Trustee or of its property or affairs for the purposes of rehabilitation,
conservation or liquidation, the Sponsor may remove such Trustee and
appoint a successor Trustee by written instrument or instruments
delivered to the Trustee so removed and the successor Trustee provided
that a notice of such removal and appointment of a successor shall be
mailed by the successor Trustee promptly after acceptance of such
appointment of each Holder then of record.
(b) Within a reasonable period of time after such termination the
Trustee shall, subject to any applicable provisions of law, sell all of
the Securities then held, if any, and shall deduct from the Distributive
Fund and pay to itself individually an amount equal to the sum of (1) its
accrued compensation for its ordinary services, (2) any compensation due
it for its extraordinary services and (3) any other expenses and
disbursements as provided herein.
(c) In case at any time the Trustee shall resign and no successor
Trustee shall have been appointed within thirty days after notice of
resignation has been received by the Sponsor, the retiring Trustee may
forthwith apply to a court of competent jurisdiction for the appointment
of a successor Trustee. Such court may thereupon, after such notice, if
any, as it may deem proper and prescribe, appoint a successor Trustee.
If, after such an application is made by the Trustee to a court of
competent jurisdiction (after November 30, 2015) and the court is unable
to appoint a successor Trustee, then no earlier than six months after the
date of such application, the Trustee may notify each participant and the
Sponsor that the Trust shall terminate on a day no earlier than six
months from the date of such notice unless a successor Trustee has been
appointed.
(d) Any successor Trustee appointed hereunder shall execute and
acknowledge to the Sponsor and retiring Trustee an instrument accepting
such appointment hereunder, and such successor Trustee without any
further act, deed or conveyance shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder with like
effect as if originally named a Trustee herein and shall be bound by all
the terms and conditions of this Amended and Restated Indenture. Upon
the request of such successor Trustee, the retiring Trustee shall, upon
payment of all amounts due, execute and deliver an instrument
acknowledged by it transferring to such successor Trustee all the rights
and powers of the retiring Trustee; and the retiring Trustee shall
transfer, deliver and pay over to the successor Trustee all Securities
and monies at the time held by it hereunder, if any, together with all
necessary instruments of transfer and assignment or other documents
properly executed necessary to effect such transfer and such of the
records or copies thereof maintained by the retiring Trustee in the
administration hereof as may be requested by the successor Trustee and
shall thereupon be discharged from all duties and responsibilities under
this Amended and Restated Indenture. Any resignation or removal of a
Trustee and appointment of a successor Trustee pursuant to this Section
shall become effective upon such acceptance of appointment by the
successor Trustee.
(e) Any corporation into which the Trustee hereunder may be merged
or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Trustee shall be a party, shall
be the successor Trustee under its Amended and Restated Indenture without
the execution or filing of any paper, instrument or further act to be
done on the part of the parties hereto, anything herein, or in any
agreement relating to such merger or consolidation, by which any such
Trustee may seek to retain certain powers, rights and privileges
theretofore obtaining for any period of time following such merger or
consolidation, to the contrary notwithstanding.
SECTION 9.06. Qualification of Trustee. The Trustee and any
successor shall be a banking corporation organized and doing business
under the laws of the United States, or any state thereof, having at all
times an aggregate capital, surplus, and undivided profits of not less
than $5,000,000.
ARTICLE X
Termination
SECTION 10.01. Procedure Upon Termination. This Amended and
Restated Trust Indenture and the Trust shall terminate on November 30,
2100, or upon the sale or other disposition as the case may be, of the
last Common Stock held hereunder unless sooner terminated at any time by
written instrument executed by the Sponsor and consented to (as provided
in this Section 10.01) by Holders owning 51% of the Participations then
outstanding under this Amended and Restated Indenture.
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Written notice of any termination, specifying the time or times at
which the Holders evidenced by certificates may surrender their
certificates for cancellation and the date determined by the Trustee,
upon which the transfer books of the Trustee, maintained pursuant to
Section 6.01 shall be closed, shall be given by the Trustee to each
Holder. The expenses of such termination shall be deducted from the
Distributive Fund. Within a reasonable period of time after such
termination the Trustee shall, subject to any applicable provisions of
law, sell all of the Securities then held, if any, and shall:
(a) deduct from the Distributive Fund and pay to itself
individually an amount equal to the sum of (1) its accrued compensation
for its ordinary services, (2) any compensation due it for its
extraordinary services and (3) any other expenses and disbursements as
provided herein;
(b) deduct from the Distributive Fund and pay accrued and unpaid
fees to the Trustee, the Sponsor and counsel pursuant to Section 9.01;
(c) deduct from the Distributive Fund any amounts which it, in its
sole discretion, shall deem requisite to provide for any applicable taxes
or other governmental charges that may be payable out of the Trust Fund;
(d) distribute forthwith to each Holder of Participations in
uncertificated form, and to each Holder of Participations evidenced by
certificates upon surrender for cancellation of his certificate or
certificates, such Holder's interest in the balance of the Distributive
Fund provided that such distribution shall be made to Holders of record
as of the date of such computation and shall be distributed to them
within five days or shortly thereafter;
(e) together with such distribution to each Holder as provided for
in paragraph (c), furnish to each such Holder a final statement as of the
date of the computation of the amount distributable to Holders, setting
forth the data and information in substantially the form and manner
provided for in Section 3.04 hereof.
SECTION 10.02. Notice to Holders Evidenced by Certificates.
In the event that all of the Holders of Participations evidenced by
Certificates shall not surrender their Certificates for cancellation
within six months after the time specified in the above-mentioned written
notice, the Trustee shall give a second written notice to the remaining
Holders of such Participations to surrender their Certificates for
cancellation and receive the liquidating distribution with respect
thereto. The expenses of such notice shall be deducted from the
Distributive Fund. If within one year after the second notice all
Certificates shall not have been surrendered for cancellation, the
Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Holders of Participations
evidenced by Certificates concerning surrender of their Certificates and
the cost thereof shall be paid out of the monies and other assets which
remain in the Trust Fund.
SECTION 10.03. Monies to be Held in Trust Without Interest.
The Trustee shall be under no liability with respect to monies in
Distributive Fund upon termination, except to hold the same in trust
without interest.
SECTION 10.04. Dissolution of Sponsor Not to Terminate. The
dissolution of the Sponsor shall not operate to terminate this Amended
and Restated Indenture or the Trust Fund.
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ARTICLE XI
Miscellaneous Provisions
SECTION 11.01. Amendment and Waiver. This Amended and
Restated Indenture may be amended from time to time by the Sponsor and
the Trustee without the consent of any of the Holders (a) to cure any
ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions
contained herein; (b) to change any provision hereof as may be required
by the Securities and Exchange Commission or any successor governmental
agency exercising similar authority; or (c) to make such other provisions
in regard to matters or questions arising hereunder as shall not
adversely affect the interests of the Holders.
This Amended and Restated Indenture may in any event be amended
and/or supplemented as to any series as follows: A written statement may
be prepared and executed by an authorized officer of the Sponsor in its
name and by an authorized officer of the Trustee in its name and filed
with the Sponsor and the Trustee, setting forth specific proposals to
amend and/or supplement this Amended and Restated Indenture, provided
that Holders representing in the aggregate not less than a majority of
the Participations entitled to vote hereunder shall consent to such
proposals. Such statement shall be mailed to all Holders at their
addresses as they appear on the books of the Trustee. Upon receipt by
the Trustee of written consents from Holders representing in the
aggregate not less than a majority of the Participations, the Trustee
shall mail to all Holders at their addresses as they appear on the
Trustee's books, a notice to the effect that this Amended and Restated
Indenture as modified and/or supplemented in accordance with the
proposals contained in such statement on a date to be designated by the
Trustee and therein specified, which date shall be at least twenty (20)
days after the date of such mailing. All Holders who do not exercise
their respective rights of termination within fifteen days after the date
of mailing of such notice shall be conclusively and finally deemed for
all purposes to have consented and agreed to this Amended and Restated
Indenture as modified and/or supplemented in accordance with the
proposals contained in such statement, whether or not they consented
thereto or had actual notice thereof; and this Amended and Restated
Indenture shall, on the date specified in the statement containing such
proposals, be deemed modified and/or supplemented in accordance with such
proposals, and the Sponsor, the Trustee and all Holders in such series
shall be deemed conclusively and irrevocably bound thereby.
Promptly after the execution of any such amendment the Trustee shall
furnish written notification at the expense of the Trust of the substance
of such amendment to each Holder then of record.
It shall not be necessary for the consent of Holders under this
Section 11.01 to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Holders shall be subject to
such reasonable regulations as the Trustee may prescribe.
SECTION 11.02. Registration of Participations and Trust. The
Sponsor agrees and undertakes to keep the registration of the
Participations and the Trust with the Securities and Exchange Commission
and under the Blue Sky laws of the states on a current basis and the
Trustee shall have no obligation with respect thereto. Registration
charges, Blue Sky fees, printing costs, attorney's fees, and other
miscellaneous out-of-pocket expenses incurred pursuant to this Section
and related to all Participations shall be borne by the Trust Fund. The
Sponsor shall also make such annual or other reports, make such elections
and file such tax returns as may from time to time be required under any
applicable or Federal statute or rule or regulation thereunder.
18
<PAGE>
SECTION 11.03. Fiscal Year. The fiscal year end of the Trust
shall be December 31.
SECTION 11.04. New York Law to Govern. All laws and rules
of construction of the State of New York shall govern the rights of the
parties hereto and the Holders and the interpretation of the provisions
hereof.
SECTION 11.05. Notices. Any notice, demand, direction or
instruction to be given to the Sponsor hereunder shall be in writing and
shall be duly given if mailed or delivered to the Corporate Secretary,
Lexington Management Corporation, Park 80 West, Plaza Two, Eighth Floor,
Saddle Brook, New Jersey 07663, or at such other address as shall be
specified by the Sponsor to the other parties hereto in writing. Any
notice, demand, direction or instruction to be given to the Trustee shall
be in writing and shall be duly given if received at the office of the
Trustee, 225 Franklin Street, Boston, Massachusetts 02110, or at such
other address as shall be specified to the other parties hereto by the
Trustee in writing. Any notice to be given to a Holder shall be duly
given if mailed or delivered to each Holder at the address of such Holder
appearing on the registration books of the Trustee.
SECTION 11.06. Severability. If any one or more of the
covenants, agreements, provisions or terms of this Amended and Restated
Indenture shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Amended
and Restated Indenture and shall in no way affect the validity or
enforceability of the other provisions of this Amended and Restated
Indenture or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Separate and Distinct Series. Each series to
which this Amended and Restated Indenture shall be applicable shall, for
all financial and administrative purposes, be considered separate and
distinct from every other Series, and the assets of one series shall not
be commingled with the assets of another series nor shall the expenses
of any one Series be charged against any other Series.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Indenture to be duly executed.
________________________________________
_______________________________________
19
DISTRIBUTION AGREEMENT
between
LEXINGTON CORPORATE LEADERS TRUST FUND
and
LEXINGTON FUNDS DISTRIBUTOR, INC.
THIS AGREEMENT made this 21st day of August, 1990 by and between
LEXINGTON CORPORATE LEADERS TRUST FUND, a New York grantor trust
(hereinafter referred to as the "Fund"), and LEXINGTON FUNDS DISTRIBUTOR,
INC., a Delaware Corporation (hereinafter referred to as the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged,
the parties hereto agree as follows:
FIRST: The Fund hereby appoints the Distributor as its exclusive
underwriter to promote the sale and to arrange for the sale of shares of
common stock of the Fund in jurisdictions wherein shares may legally be
offered for sale.
The Fund agrees to sell and deliver its unissued shares, as from time
to time shall be effectively registered under the Securities Act of 1933,
upon the terms hereinafter set forth.
SECOND: The Fund hereby authorizes the Distributor, subject to law
and the Articles of Incorporation of the Fund, to accept, for the account
of the Fund, orders for the purchase of its shares, satisfactory to the
Distributor, as of the time of receipt of such orders or as otherwise
described in the then current prospectus of the Fund.
THIRD: The public offering price of such shares shall be based on the
net asset value per share (as determined by the Fund) of the outstanding
shares of the Fund. The net asset value shall be regularly determined on
every business day as of the time of closing of the New York Stock Exchange.
It is expected that the New York Stock Exchange will be closed on Saturdays
and Sundays and on New Year's Day, President's Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas. The
public offering price shall become effective as set forth from time to time
in the Fund's current prospectus; such net asset value shall also be
regularly determined, and the public offering price based thereon shall
become effective, as of such other times for the regular determination of
net asset value as may be required or permitted by rules of the National
Association of Securities Dealers, Inc. or of the Securities and Exchange
Commission. The Fund shall furnish the Distributor, with all possible
promptness, a statement of each computation of net asset value, and of the
details entering into such computation.
The Distributor may, and when requested by the Fund shall, suspend its
efforts to effectuate sales of the shares of common stock at any time when
in the opinion of the Distributor or of the Fund no sales should be made
because of market or other economic considerations or abnormal circumstances
of any kind.
The Fund may withdraw the offering of its common stock (i) at any time
with the consent of the Distributor, or (ii) without such consent when so
required by the provisions of any statute or of any order, rule or
regulation of any governmental body or securities exchange having
jurisdiction. It is mutually understood and agreed that the Distributor
does not undertake to sell all or any specific portion of the shares of
common stock of the Fund.
FOURTH: The Distributor agrees that it will use its best efforts with
reasonable promptness to promote and sell shares of the Fund; but so long
as it does so, nothing herein contained shall prevent the Distributor from
entering into similar arrangements with other funds and to engage in other
activities. The Fund reserves the right to issue shares in connection with
any merger or consolidation of the Fund with any other investment company
or any personal holding company or in connection with offers of exchange
exempted from Section 11(a) of the Investment Company Act of 1940.
FIFTH: Upon a receipt by the Fund at its principal place of business
or other place designated by the Fund of an order from the Distributor,
together with delivery instructions, the Fund shall, as promptly as
practicable, cause the shareholder's account or certificates for the shares
called for in such order to be credited or delivered in such amount and in
such names as shall be specified by the Distributor, against payment
therefor in such manner as may be acceptable to the Fund.
SIXTH: All sales literature and advertisements used by the
Distributor in connection with sales of the shares of the Fund shall be
subject to the approval of the Fund. The Fund authorizes the Distributor
in connection with the sale or arranging for the sales of its shares to give
only such information and to make only such statements or representations
as are contained in the current prospectus and statement of additional
information or in sales literature or advertisements approved by the Fund
or in such financial statements and reports as are furnished to the
Distributor pursuant to this Agreement. The Fund shall not be responsible
in any way for any information, statements or representatives given or made
by the Distributor or its representatives or agents other than such
information, statements or representations contained in the then current
prospectus and statement of additional information or other financial
statements of the Fund.
SEVENTH: The Distributor as agent of the Fund is authorized, subject
to the direction of the Fund, to accept shares for redemption at their net
asset value, determined as prescribed in the then current prospectus of the
Fund. The Fund shall reimburse the Distributor monthly for its out-of-
pocket expenses reasonably incurred for carrying out the foregoing
authorization, but the Distributor shall not be entitled to any commissions
or other compensation in respect to such redemptions.
EIGHTH: The Fund shall bear:
(A) the expenses of qualification of the shares for sale in connection
with such public offerings in such states as shall be selected by the
Distributor and of continuing the qualification continued; and
(B) all legal expenses in connection with the foregoing.
NINTH: The Distributor shall bear:
(A) the expenses of printing and distributing prospectuses and
statements of additional information (other than those prospectuses and
statements of additional information required by applicable laws and
regulations to be distributed to the Fund's shareholders by the Fund) and
any other promotional or sales literature which are used by the Distributor
or furnished by the Distributor to purchasers or dealers in connection with
the Distributor's activities pursuant to this Agreement;
(B) expenses of any advertising used by the Distributor in connection
with such public offering; and
(C) all legal expenses in connection with the foregoing.
TENTH: The Distributor will accept orders for shares of the Fund only
to the extent of purchase orders actually received and not in excess of such
orders, and it will not avail itself of any opportunity of making a profit
by expediting or withholding orders.
ELEVENTH: The Fund shall keep the Distributor fully informed with
regard to its affairs, shall furnish the Distributor with a certified copy
of all financial statements, and a signed copy of each report, prepared by
independent public accountants, and with such reasonable number of printed
copies of each semi-annual and annual report of the Fund as the Distributor
may request, and shall cooperate fully in the efforts of the Distributor to
sell and arrange for the sale of its shares and in the performance by the
Distributor of all its duties under the Agreement.
TWELFTH: The Fund agrees to register, from time to time as necessary,
additional shares with the Securities and Exchange Commission, state and
other regulatory bodies and to pay the related filing fees therefor and to
file such amendments, reports and other documents as may be necessary in
order that there may be no untrue statement of a material fact in the
Registration Statement or prospectus or necessary in order that there may
be no omission to state a material fact therein necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. As used in this Agreement, the term "Registration
Statement" shall mean from time to time the Registration Statement most
recently filed by the Fund with the Securities and Exchange Commission and
effective under the Securities Act of 1933, as amended, as such Registration
Statement is amended at such time, and the terms "Prospectus" shall mean for
the purposes of this Agreement from time to time the form of prospectus and
statement of additional information authorized by the Fund for use by
Distributor and by dealers.
THIRTEENTH:
(A) The Fund and Distributor shall each comply with all applicable
provisions of the Investment Company Act of 1940, the Securities Act of
1933, and the rules and regulations of the National Association of
Securities Dealers, Inc. and of all other Federal and State laws, rules and
regulations governing the issuance and sale of shares of the Fund.
(B) In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Fund agrees to indemnify the Distributor and any
controlling person of the Distributor against any and all claims, demands,
liabilities and expenses including reasonable costs of any alleged
litigation which the Distributor may incur under the Securities Act of 1933,
or common law on otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in any registration statement,
statement of additional information or prospectus of the Fund, or any
omission to state a material fact therein, the omission of which makes any
statement contained therein misleading, unless such statement or omission
was made in reliance upon, and in conformity with written information
furnished to the Fund in connection with written information furnished to
the Fund in connection therewith by or on behalf of the Distributor. The
Distributor agrees to indemnify the Fund against any and all claims,
demands, liabilities and expenses which the Fund may incur arising out of
or based upon any act or deed of sales representatives of the Distributor
which is outside the scope of their authority under this Agreement.
(C) The Distributor agrees to indemnify the Fund against any and all
claims, demands, liabilities and expenses which the Fund may incur under the
Securities Act of 1933, or common law or otherwise, arising out of or based
upon any alleged untrue statement of material fact contained in any
registration statement, statement of additional information or prospectus
of the Fund, relating to the Fund, or any omission to state a material fact
therein if such statement or omission was made in reliance upon, and in
conformity with, written information furnished to the Fund in connection
therewith by or on behalf of the Distributor.
FOURTEENTH: Nothing herein contained shall require the Fund to take
any action contrary to any provision of its Declaration of Trust or to any
applicable statute or regulation.
FIFTEENTH: This Agreement has been approved by the Directors of the
Fund and shall become effective at the close of business on the date hereof.
This Agreement shall continue in force and effect for successive annual
periods, provided that such continuance is specifically approved at least
annually (a) (i) by the Board of Directors of the Fund, or (ii) by vote of
a majority of the Fund's outstanding voting securities (as defined in
Section 2 (a) (42) of the Investment Company Act of 1940), and (b) by vote
of majority of the Fund's Directors who are not interested persons (as
defined in Section 2 (a) (19) of the Investment Company Act of 1940) of the
Distributor by votes cast in person at a meeting called for such purposes.
SIXTEENTH:
(A) This Agreement may be terminated at any time, without the payment
of any penalty, by vote of the Board of Directors of the Fund or by vote of
a majority of the outstanding voting securities of the Fund, or by the
Distributor, on sixty (60) days written notice of the other party.
(B) This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" for this purpose having the meaning
defined in Section 2(a)(4) of the Investment Company Act of 1940.
SEVENTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed, postage paid, to the other party at such
address as such other party may designate for the receipt of such notices.
Until further notice to the other party, it is agreed that the address of
the Fund shall be Park 80 West, Plaza Two, Saddle Brook, New Jersey and
Distributor shall be Park 80 West, Plaza Two, Saddle Brook, New Jersey.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.
LEXINGTON MANAGEMENT CORPORATION
as sponsor for
LEXINGTON CORPORATE LEADERS TRUST FUND
Attest: By:
__________________________________
LEXINGTON FUNDS DISTRIBUTOR, INC.
Attest: By:
___________________________________
SPENGLER CARLSON GUBAR BRODSKY & FRISCHLING
ATTORNEYS AT LAW
520 MADISON AVENUE, NEW YORK, N.Y. 10022
(212) 935-5000
March 2, 1989
Lexington Group of Mutual Funds
Park 80 West, Plaza Two, Eighth Floor
Saddle Brook, NJ 07663
Re: Corporate Leaders Trust Fund
Gentlemen:
We have acted as counsel to Lexington Management Corporation, a New York
corporation, sponsor of Lexington Corporate Leaders Trust Fund (the "Trust"), in
connection with the public offering of participations of the Trust pursuant to
Post-Effective Amendment No. 28 to a registration statement on Form S-6 (File
No. 33-20415) (the "Registration Statement") filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended.
We have reviewed the Trust Agreement dated November 18, 1935, as amended,
between Empire Trust Company (now The Bank of New York, by merger) and
Corporate Leaders of America, Inc. (which was merged into Piedmont Capital
Corporation which in turn assigned its rights and responsibilities as sponsor
of the Trust to Manlex Corporation, a wholly owned subsidiary of Lexington
Management Corporation on March 25, 1981); the Amended and Restated Indenture
dated October 31, 1988 between The Bank of New York and Lexington Management
Corporation (the "Indenture") and the Registration Statement including exhibits
thereto. We have also made such inquiries and have examined originals,
certified copies or copies otherwise identified to our satisfaction, of such
documents, records and other instruments we have deemed necessary or
appropriate for the purposes of this opinion.
It is our opinion that the securities being registered pursuant to said Post-
Effective Amendment will, when offered, sold and issued in accordance with the
then effective Prospectus and the Indenture, be duly authorized and legally
issued.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the references therein to our firm under the caption "Legal
Opinion".
Very truly yours,
/s/ Spengler Carlson Gubar
Brodsky & Frischling
Kramer, Levin, Naftalis & Frankel
9 1 9 T H I R D A V E N U E
NEW YORK, N.Y. 10022 3852
(212) 715 9100
FAX
(212) 715-8000
______
WRITER'S DIRECT
NUMBER
(212) 715-9100
April 29, 1997
Lexington Corporate Leaders Trust Fund
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
Re: Lexington Corporate Leaders Trust Fund
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
Gentlemen:
We hereby consent to the reference to our firm as counsel in Post-
Effective Amendment No. 36 to the Registration Statement of the Lexington
Corporate Leaders Trust Fund on Form S-6.
Very truly yours,
/s/Kramer, Levin, Naftalis & Frankel
McGLADREY & PULLEN, LLP
Certified Public Accountants and Consultants
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the use of our Report dated January 10, 1997 on
the financial statements of Lexington Corporate Leaders Trust Fund referred to
therein, which appears in Post-Effective Amendment No. 36 to the Registration
Statement on Form S-6 as filed with the Securities and Exchange Commission.
We also consent to the reference to our firm in the Prospectus under
the captions "Selected Financial Information" and "Auditors."
/s/ McGladrey & Pullen, LLP
McGladrey & Pullen, LLP
New York, New York
April 29, 1997
Lexington Corporate Leaders Trust Fund
Computation of Performance Quotations
Total Return for One Year
P (1 + T)N = ERV
$1000 (1 + T)1 = 1,084,81946
1 + T = 1.08491946
T = .0848194553
T = 8.5%
Total Return for Five Years
$1000 (1 + T)5 = 2,064,33444
(1 + T)5 = 2.06433444
1 + T = 1.559951492
T = .1559951492
T = 15.6%
Total Return for Ten Years
$1000 (1 + T)10 = 4,500.63688
(1 + T)10 = 4.50063588
1 + T = 1.1623245142
T = .1623245142
T = 16.2%
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
The Schedule contains summary financial information extracted from year-
end audited financial statements dated December 31, 1996 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 259,495,211
<INVESTMENTS-AT-VALUE> 383,752,319
<RECEIVABLES> 1,666,606
<ASSETS-OTHER> 8,560,554
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 333,979,479
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,684,346
<TOTAL-LIABILITIES> 1,684,346
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 224,775,285
<SHARES-COMMON-STOCK> 24,447,241<F1>
<SHARES-COMMON-PRIOR> 18,670,918
<ACCUMULATED-NII-CURRENT> 545,233
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 42,717,507<F2>
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 124,257,108
<NET-ASSETS> 392,295,133<F6>
<DIVIDEND-INCOME> 8,730,682
<INTEREST-INCOME> 103,006
<OTHER-INCOME> 0
<EXPENSES-NET> 2,066,231
<NET-INVESTMENT-INCOME> 6,767,457
<REALIZED-GAINS-CURRENT> 12,337,780<F3>
<APPREC-INCREASE-CURRENT> 47,385,034
<NET-CHANGE-FROM-OPS> 66,490,271
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 10,714,827
<DISTRIBUTIONS-OF-GAINS> 6,395,874
<DISTRIBUTIONS-OTHER> 578,409<F4>
<NUMBER-OF-SHARES-SOLD> 11,313,596
<NUMBER-OF-SHARES-REDEEMED> (6,457,089)
<SHARES-REINVESTED> 919,816
<NET-CHANGE-IN-ASSETS> 82,388,282<F5>
<ACCUMULATED-NII-PRIOR> 432,414
<ACCUMULATED-GAINS-PRIOR> 36,775,601
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,066,231
<AVERAGE-NET-ASSETS> 329,360,251
<PER-SHARE-NAV-BEGIN> 13.74
<PER-SHARE-NII> .28
<PER-SHARE-GAIN-APPREC> 2.79
<PER-SHARE-DIVIDEND> (.28)
<PER-SHARE-DISTRIBUTIONS> (.28)
<RETURNS-OF-CAPITAL> (.20)
<PER-SHARE-NAV-END> 16.05
<EXPENSE-RATIO> 0.63
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Shares of Common Stock = Trust Participations
<F2>Accumulated Net Gains = Cumulative Amount of Non-Distributable Gains
Retained in Principal Account
<F3>Realized Gains Current = Distributable $6,395,874
Non-Distributable $5,941,906
<F4>Distributions-Other = Return of Principal Distributions
<F5>Net Change in Assets = Amounts Paid In and Reinvested, Less Paid Out on
Redemptions and Return of Principal Distributions
<F6>Net Assets = Income and Distributable Fund $545,233
Principal Account $391,749,900
============
$392,295,133
</FN>
</TABLE>
