As filed with the Securities and Exchange Commission July 28, 2000
Registration No. 2-10694
811-0091
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-6
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POST-EFFECTIVE AMENDMENT NO. 41 TO
REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
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A. Exact name of Trust:
PILGRIM CORPORATE LEADERS TRUST FUND
B. Name of depositor:
PILGRIM INVESTMENTS, INC.
C. Complete address of depositor's principal executive offices:
Pilgrim Investments, Inc.
40 North Central Avenue
Suite 1200
Phoenix, Arizona 85004
D. Name and address of agent for service:
James M. Hennessy
Pilgrim Corporate Leaders Trust Fund
40 North Central Avenue, Suite 1200
Phoenix, Arizona 85004
With a copy to:
Jeffrey S. Puretz, Esq.
Dechert
1775 Eye Street N.W.
Washington, DC 20006
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, 1999 was filed on March 31, 2000.
F. Approximate date of proposed public offering:
It is proposed that this filing will become effective July 31, 2000
pursuant to paragraph (b) of Rule 485.
================================================================================
<PAGE>
PILGRIM 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)
<PAGE>
PROSPECTUS DATED JULY 31, 2000
PILGRIM CORPORATE LEADERS
TRUST FUND
40 N. CENTRAL AVENUE, SUITE 1200
PHOENIX, AZ 85004
Shareholder Services: 1-800-992-0180
24 Hour Account Information: 1-800-992-0180
Pilgrim Corporate Leaders Trust Fund (the "Trust") was created in 1935 with
the objective of seeking long term capital growth and income through investment
generally 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, Exxon, Mobil, Sears Roebuck and Citigroup.
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: Pilgrim Investments, Inc.
40 N. Central Avenue, Suite 1200
Phoenix, AZ 85004
Trustee: State Street Bank and Trust Company
Mutual Fund Services Area
Pilgrim Corporate Leaders Trust Fund
225 Franklin Street
Boston, Massachusetts 02110
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 of participations
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.
2
<PAGE>
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). Subsequently, on July 26, 2000, Lexington Management
Corporation was acquired by ReliaStar Financial Corp. ("ReliaStar") and Pilgrim
Investments, Inc. ("Pilgrim Investments"), an indirect wholly-owned subsidiary
of ReliaStar, was designated the Sponsor of the Trust. Consequently, the Trust's
name was changed to Pilgrim Corporate Leaders Trust Fund. Holders of Corporate
Leaders Trust Fund Certificates Series A continue to be governed by the initial
Indenture. This Prospectus pertains solely to Pilgrim 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
stock of each of the twenty-five 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 (excluding additional shares of
common stock received upon a stock split which shall remain assets of 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 Trust 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 Trust. 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.
3
<PAGE>
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 holding
in Gallaher Group Plc, a United Kingdom company traded on the New York Stock
Exchange, is a result of its spinoff from Fortune Brands, Inc., a portfolio
security. The Trust's portfolio investments are not managed and are expected to
remain fixed. Of the securities held on December 31, 1999, 14.7% were in
consumer products, 16.3% were in international oil companies and 8.7% 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.
4
<PAGE>
SELECTED FINANCIAL INFORMATION
The following table of selected financial information has been audited by
PricewaterhouseCoopers LLP, independent certified public accountants, for the
year ended December 31, 1999, whose report thereon appears elsewhere in this
prospectus, and by other auditors for prior years.
<TABLE>
<CAPTION>
Per participation operating performance
(for a participation outstanding
throughout the period) Years Ended December 31,
--------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
year............................ $ 15.70 $ 14.88 $ 16.05 $ 13.74 $ 10.51 $ 12.78 $ 11.62 $ 11.52
-------- -------- -------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income........... .24 .23 .27 .28 .28 .31 .33 .36
Net realized and unrealized
gain (loss) on
investments................... 1.92 1.28 3.45 2.79 3.82 (.45) 1.71 .70
-------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations...................... 2.16 1.51 3.72 3.07 4.10 (.14) 2.04 1.06
-------- -------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment
income........................ (.24) (.23) (.28) (.28) (.28) (.32) (.33) (.35)
Distributions from net
realized gains................ (.15) (.26) (2.60) (.28) (.03) (.90) (.28) (.35)
Distributions from income and
realized gains included in
terminations.................. (.02) (.02) (0.11) (.02) (.02) (.01) -- (.01)
Distributions from capital...... (.15) (.18) (1.90) (.18) (.54) (.90) (.27) (.25)
-------- -------- -------- -------- -------- -------- -------- --------
Total distributions....... (.56) (.69) (4.89) (.76) (.87) (2.13) (.88) (.96)
-------- -------- -------- -------- -------- -------- -------- --------
Change in net asset value for
the year........................ 1.60 .82 (1.17) 2.31 3.23 (2.27) 1.16 .10
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value at end of
year............................ $ 17.30 $ 15.70 $ 14.88 $ 16.05 $ 13.74 $ 10.51 $ 12.78 $ 11.62
======== ======== ======== ======== ======== ======== ======== ========
Total Return..................... 13.68% 9.94% 23.09% 22.43% 39.21% (0.77%) 17.57% 9.63%
Ratio/Supplemental Data Net
Assets, end of year (000)....... $463,995 $485,195 $525,669 $392,295 $256,467 $156,286 $147,181 $105,712
Ratios to average net asset of:
Expenses........................ .65% .65% .62% .63% .58% .62% .57% .60%
Net investment income........... 1.41% 1.46% 1.76% 2.05% 2.57% 2.84% 2.78% 3.16%
<CAPTION>
Per participation operating per
(for a participation outstanding
throughout the period) Years Ended December 31,
------------------------
1991 1990
------- -------
<S> <C> <C>
Net asset value, beginning
year.......................... $ 10.53 $ 13.68
------- -------
Income from investment
operations:
Net investment income......... .39 .43
Net realized and unrealized
gain (loss) on
investments................. 1.64 (.89)
------- -------
Total from investment
operations.................... 2.03 (.46)
------- -------
Less distributions:
Dividends from net investment
income...................... (.40) (.43)
Distributions from net
realized gains.............. (.28) (1.29)
Distributions from income and
realized gains included in
terminations................ -- (.01)
Distributions from capital.... (.36) (.96)
------- -------
Total distributions..... (1.04) (2.69)
------- -------
Change in net asset value for
the year...................... .99 (3.15)
------- -------
Net asset value at end of
year.......................... $ 11.52 $ 10.53
======= =======
Total Return................... 19.41% (4.20%)
Ratio/Supplemental Data Net
Assets, end of year (000)..... $98,104 $85,691
Ratios to average net asset of:
Expenses...................... .67% .67%
Net investment income......... 3.46% 3.57%
</TABLE>
5
<PAGE>
HOW TO PURCHASE PARTICIPATIONS
INITIAL INVESTMENT--MINIMUM $1,000. BY MAIL: Send a check payable to Pilgrim
Corporate Leaders Trust Fund, along with a completed New Account Application to
the address shown on the New Account Application. To transmit funds by wire,
contact the Trust at 1-800-336-3436, Ext. 8186.
SUBSEQUENT INVESTMENTS--MINIMUM $100. BY MAIL: Send a check payable to Pilgrim
Corporate Leaders Trust Fund, to the Trust, 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. The Trust does not accept third party checks or
cash investments. Third party checks are defined as checks made payable to
someone other than the Trust. Checks must be in U.S. dollars, and to avoid fees
and delays, drawn only on banks located in the U.S.
BROKER-DEALERS: Broker-dealers and financial institutions who process purchase
and sale transactions for their customers may charge a transaction fee for these
services.
THE OPEN ACCOUNT: By investing in the Trust, a shareholder establishes 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 federal
funds wire, certificates will not be issued for 15 days. In order to facilitate
redemptions and transfers, most participation holders elect not to receive
certificates.
After an Open Account is established, payments can also be provided for by
a pre-authorized investment plan or other authorized automatic bank check
program accounts (checks drawn on the investor's bank periodically for
investment in the Trust).
PRE-AUTHORIZED INVESTING PLAN. A shareholder may arrange to make additional
purchases of shares automatically on a monthly or quarterly basis. The
investments of $100 or more are automatically deducted from a checking account
on or about the 5th or 20th day of each month. The institution must be an
Automated Clearing House (ACH) member. Should an order to purchase shares of the
Trust be cancelled because your automated transfer does not clear, you will be
responsible for any resulting loss incurred by the Trust. The shareholder
reserves the right to discontinue the automatic investing program provided
written notice is given ten days prior to the scheduled investment date. Further
information regarding this service can be obtained from Pilgrim by calling
1-800-992-0180.
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 Pilgrim 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
in writing.
6
<PAGE>
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. Pilgrim Investments, 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 when a change in the registration, address,
or dividend option occurs. Additionally, quarterly account information
statements are provided to shareholders. PARTICIPATION HOLDERS ARE URGED TO
RETAIN THEIR ACCOUNT STATEMENTS FOR TAX PURPOSES.
HOW TO REDEEM PARTICIPATIONS
BY MAIL: Send to the Trust: (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, in certificate form; (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 (800)
992-0180 PRIOR TO SUBMITTING A REDEMPTION REQUEST.
Checks for redemption proceeds will normally be mailed within three
business days, but will not be mailed until all payments for the participations
to be redeemed have been cleared by the bank on which they were drawn. DST
Systems, Inc., the transfer agent, will restrict the mailing of redemption
proceeds to a participation holder's address of record within 30 days of such
address being changed unless the participation holder provides a signature
guaranteed letter of instruction.
BY TELEPHONE: To establish this privilege on your account, please call our
Shareholder Services Department at 1-800-992-0180 between 9:00 A.M. and 7:00
P.M. Eastern Time and request a Special Privilege Form. This privilege will
automatically be assigned to your account unless you decline on the New Account
Application.
7
<PAGE>
Shareholders redeeming at least $1,000 worth of shares (for which
certificates have not been issued) may effect a telephone redemption by calling
our Shareholder Services Department at 1-800-992-0180 Monday - Friday between
9:00 a.m. and 7:00 p.m. Eastern Time. A telephone redemption in good order will
be processed at the net asset value of the Trust next determined. There is a
maximum telephone redemption limit of $100,000.
The redemption proceeds will be made payable to the registered shareholder(s)
and forwarded to the address of record. The Transfer Agent will restrict the
mailing of telephone redemption proceeds to a participation holder's address of
record within 30 days of such address being changed, unless the participation
holder provides a signature guaranteed letter of instruction. Proceeds of a
liquidation may be wired to a pre-designated bank account. (See "Telephone
Exchange/Redemption Provisions").
SIGNATURE GUARANTEE: Signature guarantees are required in connection with (a)
redemptions by mail involving $50,000 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 or to an address other than that shown on the
shareholders account; (c) changes in instructions as to where the proceeds of
redemptions are to be sent, and (d) participation transfer requests.
The Trust 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 participation certificates tendered
for redemption and, if participations held by the Trust 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 Trust 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
8
<PAGE>
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 right of redemption may be suspended (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.
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 certain funds managed by the
Sponsor, Pilgrim Investments (the "Pilgrim 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, under certain circumstances, participations may 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.
SYSTEMATIC EXCHANGE PRIVILEGE
With an initial account balance of at least $5,000 and subject to
information and limitations outlined in this section, you may elect to have a
specified dollar amount of participation units systematically exchanged. This
systematic exchange can be effected monthly, quarterly, semi-annually or
annually (on or about the 10th of the applicable month) from your Trust account
to an identically registered account of any of the Pilgrim Funds listed in this
section.
The Exchange Privilege and the Systematic Exchange Privilege may be
modified at any time or terminated upon 60-days' written notice to shareholders.
9
<PAGE>
The Pilgrim Funds currently available for exchange are:
PILGRIM SILVER FUND, INC. (NASDAQ SYMBOL: STSLX)/Seeks long-term growth of
capital and income principally through investment in a portfolio of
securities which are engaged in the exploration, mining, processing,
fabrication or distribution of silver and in silver bullion.
PILGRIM 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.
PILGRIM 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.
10
<PAGE>
The Exchange Privilege enables a participant to acquire another Pilgrim
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 Pilgrim 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. 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. There is
no specific limit on exchange frequency. However, the Trust and other Pilgrim
Funds are intended for long-term investment and not as short-term trading
vehicles. Pilgrim may prohibit excessive exchanges (more than four per year).
TELEPHONE EXCHANGE/REDEMPTION PROVISIONS
The telephone exchange and privilege will automatically be assigned to your
account unless you decline this privilege on the New Account Application.
Exchange or redemption instructions may be given in writing or by telephone.
Telephonic exchanges/redemptions can only involve participants registered
on the books of the Trustee; participations held in certificate form cannot be
exchanged until surrendered. 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/redemption by
telephone. 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 Pilgrim Funds in which these services are available.
By not checking the box(es) on the New Account Application declining
telephone exchange and/or telephone redemption services, a participant
constitutes and appoints Pilgrim Group, Inc., 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 Funds,
present or future which has the identical registration with full power of
substitution in the premises and authorizes and directs Pilgrim 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 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 Pilgrim, the Trustee, the
Trust or the Pilgrim 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. Pilgrim, the Agent and the Trust, 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 losses due to unauthorized or fraudulent instructions. The 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 Trust. Pilgrim 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.
11
<PAGE>
TAX SHELTERED RETIREMENT PLANS
The Trust offers a Prototype Pension and Profit Sharing Plan, including
IRA's, SEP-IRA Rollover Accounts and 403(b)(7) Plans. Plan support services are
available through the Shareholder Services Department of the Sponsor. For
further information, call 1-800-992-0180. An investor participating in any of
the Trust's special plans has no obligation to continue to invest in the Trust
and may terminate the Plan with the Trust at any time. Except for expenses of
sales and promotion, executive and administrative personnel, and certain
services which are furnished by Sponsor, the cost of the plans generally is
borne by the Trust; however, each Qualified Retirement Plan account is subject
to an annual maintenance fee of $12.00 charged by the Trustee.
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.
TAXATION
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 its 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
12
<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. Furthermore, individual
participants, whose adjusted gross income ("AGI") exceeds a certain
inflation-adjusted threshold amount must reduce their itemized deductions
(subject to specific exceptions such as medical expense, investment interest and
casualty/wagering/theft loss deductions) by 3% of this excess. This reduction,
however, is limited to no more than 80% of the applicable itemized deductions.
In 2000, the threshold amount was $128,950 ($64,475 for married filing
separately).
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, 1999 is set forth in the
following table:
AVERAGE ANNUAL
PERIOD TOTAL RETURN
------ --------------
1 year ended December 31, 1999 13.68%
5 years ended December 31, 1999 21.26%
10 years ended December 31, 1999 14.39%
13
<PAGE>
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, 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.
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
14
<PAGE>
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 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, 1999,
aggregate fees received by the Trustee were $145,535.
SPONSOR
The Sponsor, Pilgrim Investments, Inc. (Federal I.D. #95-4516049), a
Delaware corporation, serves as investment adviser and sponsor to 17 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. Prior to July 26,
2000, Lexington Management Corporation ("LMC") served as sponsor to the Trust.
For the year ended December 31, 1999, LMC received fees of $1,887,832.
The Sponsor is an indirect wholly-owned subsidiary of ReliaStar Financial
Corp., a corporation with offices at 20 Washington Avenue South, Minneapolis, MN
55401. Through its subsidiaries, ReliaStar offers individuals and institutions
life insurance and annuities, employee benefits products and services, life and
health reinsurance, retirement plans, mutual funds, bank products and personal
financial education.
15
<PAGE>
The principal officers and the directors of the Sponsor and their principal
occupations during the past five years are as follows:
<TABLE>
<CAPTION>
POSITION WITH
NAME PILGRIM INVESTMENTS PRINCIPAL OCCUPATION DURING THE LAST FIVE YEARS
---- ------------------- -----------------------------------------------
<S> <C> <C>
Robert W. Stallings Chairman of the Board Chairman, Chief Executive Officer and President of Pilgrim
of Directors Group, Inc. ("Pilgrim Group") (since December 1994); Chairman,
Pilgrim Investments, Inc. ("Pilgrim Investments") and Pilgrim
Securities, Inc. ("Pilgrim Securities") (since December 1994);
President and Chief Executive Officer of Pilgrim Funding, Inc.
(since November 1999); and President and Chief Executive
Officer of Pilgrim Capital Corporation (since October 1999) and
its predecessors (since August 1991). Mr. Stallings is also a
Director, Trustee, or a member of the Advisory Board of each of
the Pilgrim Funds.
James R. Reis Director, Vice Director, Vice Chairman (since December 1994), Executive Vice
Chairman, Executive President (since April 1995), and Director of Senior Lending and
Vice President and Structured Finance (since April 1998), Pilgrim Group and
Director of Senior Pilgrim Investments; Director (since December 1994) and Vice
Lending and Structured Chairman (since November 1995), Pilgrim Securities; Executive
Finance Vice President, Assistant Secretary and Chief Credit Officer of
Pilgrim Prime Rate Trust; Executive Vice President and Assistant
Secretary of each of the other Pilgrim Funds. Presently serves
or has served as an officer or director of other affiliates
of Pilgrim Capital Corporation.
Stanley D. Vyner President and Chief President and Chief Executive Officer (since August 1996),
Executive Officer Pilgrim Investments; Executive Vice President of most of the
Pilgrim Funds (since July 1996). Formerly Chief Executive
Officer (November 1993 - December 1995), HSBC Asset Management
Americas, Inc.
</TABLE>
During its last fiscal year ended December 31, 1999, LMC, the former
Sponsor, paid all its salaried officers a total of $5,116,156.
16
<PAGE>
AUDITORS
Financial Statements have been examined by PricewaterhouseCoopers 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.
17
<PAGE>
IF YOU HAD INVESTED $10,000 59 YEARS AGO
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $10,000
WITH INCOME DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS REINVESTED
The table on the following page covers the period from March 16, 1941 to
December 31, 1999. 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.
Long-term investments in industry, such as Pilgrim Corporate Leaders Trust
Fund, tend to move with the basic inflationary trend and offer your dollars an
opportunity to grow.
--------------------------------------------------------------------------------
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 "Initially 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 or other distributions reinvested
in additional participations.
The dollar amounts 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; 1997--$664,104; 1998--$83,389; 1999--$51,130;
Total $1,752,270.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Cumulative
Cost of VALUE OF PARTICIPATIONS
Amount of Participations Cumulative Purchased Through Purchased
Dividends Purchased Cost Reinvestment of Through
Year Reinvested Through Including Distributions from Reinvestment Net
Ended Semi- Reinvestment Reinvested Initially Realized Gains of Dividends Asset
Dec. 31 Annually of Dividends Dividends Acquired (Cumulative) Sub-Total (Cumulative) Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1941* -- -- $ 10,000 $ 8,799 -- $ 8,799 -- $ 8,799
1942 -- -- 10,000 9,613 -- 9,613 -- 9,613
1943 $ 190 $ 190 10,190 10,809 -- 10,809 $ 188 10,997
1944 192 382 10,382 11,983 $ 3 11,986 402 12,388
1945 215 597 10,597 14,709 464 15,173 682 15,855
1946 187 784 10,784 13,961 430 14,391 816 15,207
1947 370 1,154 11,154 14,639 447 15,086 1,141 16,227
1948 513 1,668 11,668 14,840 718 15,558 1,480 17,038
1949 509 2,177 12,177 17,113 701 17,814 1,968 19,782
1950 804 2,980 12,980 19,871 994 20,865 2,779 23,644
1951 1,012 3,992 13,992 21,659 1,756 23,415 3,674 27,089
1952 1,054 5,046 15,046 24,356 2,016 26,372 4,901 31,273
1953 1,217 6,263 16,263 24,849 2,030 26,879 6,149 33,028
1954 1,378 7,641 17,641 33,779 3,476 37,255 9,475 46,730
1955 1,599 9,240 19,240 39,164 4,398 43,562 12,349 55,911
1956 1,790 11,030 21,030 38,511 7,051 45,562 10,475 56,037
1957 1,910 12,940 22,940 36,268 6,574 42,842 11,496 54,338
1958 2,134 15,075 25,075 48,925 8,778 57,703 17,710 75,413
1959 2,184 17,258 27,258 55,426 11,821 67,247 19,992 87,239
1960 2,416 19,674 29,674 55,782 12,653 68,435 19,772 88,207
1961 2,697 22,371 32,371 67,126 16,993 84,119 25,757 109,876
1962 2,926 25,296 35,296 62,396 17,033 79,429 24,446 103,875
1963 3,243 28,540 38,540 71,467 19,863 91,330 30,711 122,041
1964 3,553 32,093 42,093 83,001 24,049 107,050 35,865 142,915
1965 3,855 35,948 45,948 92,523 30,246 122,769 35,623 158,392
1966 4,571 40,519 50,519 74,713 24,491 99,204 31,774 130,978
1967 5,060 45,579 55,579 83,121 27,090 110,211 40,165 150,376
1968 5,573 51,153 61,153 89,160 32,157 121,317 46,879 168,196
1969 5,915 57,068 67,068 75,017 26,979 101,996 44,536 146,532
1970 6,009 63,077 73,077 82,621 28,564 111,185 52,500 163,685
1971 6,190 69,267 79,267 93,454 32,126 125,580 61,694 187,274
1972 6,585 75,852 85,852 108,913 38,484 147,397 75,949 223,346
1973 7,371 83,223 93,223 93,151 32,729 125,880 71,868 197,748
1974 8,196 91,419 101,419 68,448 22,864 91,312 57,376 148,688
1975 9,139 100,557 110,557 91,498 30,474 121,972 85,413 207,385
1976 9,666 110,223 120,223 115,461 37,963 153,424 101,306 254,730
1977 11,237 121,460 131,460 108,466 35,919 144,385 96,397 240,782
1978 13,283 134,743 144,743 110,210 34,687 144,897 105,738 250,635
1979 15,804 150,547 160,547 139,110 34,774 173,884 121,307 295,191
1980 19,369 169,916 179,916 173,026 47,488 220,514 165,362 385,876
1981 21,822 191,738 201,738 163,070 62,645 225,715 140,698 366,413
1982 24,452 216,190 226,190 191,554 69,992 261,546 183,359 444,905
1983 25,923 242,114 252,114 235,913 91,870 327,783 218,649 546,432
1984 28,926 271,040 281,040 250,855 91,476 342,331 226,566 568,897
1985 31,808 302,848 312,848 333,623 145,913 479,536 293,217 772,753
1986 39,216 342,064 352,064 408,170 212,840 621,010 342,608 963,618
1987 40,394 382,458 392,458 412,599 241,185 653,784 326,728 980,512
1988 71,268 453,726 463,726 470,438 297,425 767,863 407,155 1,175,018
1989 45,103 498,829 508,829 583,494 438,476 1,021,970 509,512 1,531,482
1990 51,303 550,132 560,132 552,346 473,992 1,026,338 440,810 1,467,148
1991 55,828 605,960 615,960 654,372 558,392 1,212,764 539,190 1,751,954
1992 55,460 661,420 671,420 700,391 619,341 1,319,732 600,946 1,920,678
1993 54,505 715,925 725,925 814,945 727,611 1,542,556 715,658 2,258,214
1994 60,332 776,257 786,257 832,095 759,684 1,591,779 649,069 2,240,848
1995 61,329 837,586 847,586 1,207,794 998,228 2,206,022 913,513 3,119,535
1996 64,546 902,132 912,132 1,452,214 1,232,426 2,684,640 1,134,598 3,819,238
1997 71,379 973,511 983,511 1,794,519 1,785,369 3,579,888 1,121,302 4,701,190
1998 72,385 1,045,896 1,055,896 1,948,610 1,965,327 3,913,937 1,254,684 5,168,621
1999 78,614 1,124,210 1,134,210 2,198,244 2,216,745 4,414,989 1,460,590 5,875,579
-------------------------------------------------------------------------------------------------------------------
Year
Ended Number of
Dec. 31 Participations
--------------------------------------------------------------------------------
1941* 566
1942 584
1943 601
1944 620
1945 693
1946 716
1947 824
1948 989
1949 1,176
1950 1,392
1951 1,652
1952 1,845
1953 1,945
1954 2,117
1955 2,243
1956 3,123
1957 3,269
1958 3,406
1959 3,906
1960 4,562
1961 4,881
1962 5,541
1963 5,803
1964 6,452
1965 8,066
1966 8,606
1967 8,948
1968 9,710
1969 10,115
1970 10,957
1971 11,856
1972 12,605
1973 13,123
1974 14,124
1975 14,781
1976 16,914
1977 18,898
1978 20,370
1979 23,931
1980 26,181
1981 33,836
1982 36,772
1983 42,757
1984 49,375
1985 58,251
1986 69,711
1987 83,847
1988 97,918
1989 111,950
1990 139,330
1991 152,079
1992 165,291
1993 176,699
1994 213,211
1995 227,040
1996 237,959
1997 315,940
1998 329,211
1999 339,629
</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.
18
<PAGE>
INDEPENDENT AUDITOR'S REPORT
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participation Holders of Lexington Corporate Leaders Trust Fund
In our opinion, the accompanying statement of assets and liabilities,
including the statement of investments, and the related statements of operations
and of changes in net assets and the selected financial information present
fairly, in all material respects, the financial position of Lexington Corporate
Leaders Trust Fund (the "Trust") at December 31, 1999, and the results of its
operations, the changes in its net assets and the selected financial information
for the year then ended, in conformity with accounting principles generally
accepted in the United States. These financial statements and selected financial
information (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these financial statements in accordance with auditing standards generally
accepted in the United States which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at December 31, 1999 by
correspondence with the custodian, provides a reasonable basis for the opinion
expressed above. The financial statements for the year ended December 31, 1998,
including the selected financial information for each of the four years in the
period then ended, were audited by other independent accountants whose report
dated January 7, 1999 expressed an unqualified opinion on those financial
statements.
PricewaterhouseCoopers LLP
New York, New York
January 7, 2000
19
<PAGE>
LEXINGTON CORPORATE LEADERS TRUST FUND
STATEMENT OF ASSETS AND LIABILITIES December 31, 1999
--------------------------------------------------------------------------------
Assets
Investments at market quotations, common stocks (identified
cost $330,146,215) ........................................... $453,006,994
Cash .......................................................... 12,283,354
Subscriptions receivable ...................................... 379,148
Receivable for accrued dividends .............................. 671,212
------------
Total assets ......................................... 466,340,708
------------
Liabilities
Distribution payable .......................................... 1,513,906
Payable for participations redeemed ........................... 672,824
Accrued expenses .............................................. 158,543
------------
Total liabilities .................................... 2,345,273
Net Assets
Balance applicable to 26,818,793 participations outstanding
(Note 6) ..................................................... $463,995,435
============
Computation of public offering price:
Net asset value, offering and redemption price per
participation (net assets divided by participations
outstanding).................................................. $ 17.30
============
The accompanying notes form an integral part of these financial statements.
20
<PAGE>
LEXINGTON CORPORATE LEADERS TRUST FUND
STATEMENT OF OPERATIONS Year Ended December 31, 1999
--------------------------------------------------------------------------------
Investment income:
Income:
Dividends (net of $63,737 tax expense) .................... $ 9,452,773
Interest .................................................. 63,255
-----------
Total income........................................... 9,516,028
-----------
Expenses:
Sponsor's administrative fee (Note 4) ....................... 1,887,832
Professional fees ........................................... 72,960
Trustee's fee (Note 4) ...................................... 9,167
Custody fees and other services (Note 4) .................... 136,368
Transfer agent fees ......................................... 588,831
Printing, mailing and sundry ................................ 138,730
Registration and filing fees ................................ 25,627
-----------
Total expenses ........................................ 2,859,515
-----------
Net investment income ............................... 6,656,513
===========
Realized and unrealized gain on investments:
Net realized gain from securities transactions .............. 36,101,224
Unrealized appreciation of investments for the period ..... 16,587,948
-----------
Net gain on investments ........................................ 52,689,172
Net increase in net assets from operations ..................... $59,345,685
===========
The accompanying notes form an integral part of these financial statements.
21
<PAGE>
LEXINGTON CORPORATE LEADERS TRUST FUND
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
Year Ended Year Ended
December 31, December 31,
1999 1998
------------ ------------
Income and Distributable Fund:
Additions:
Net investment income ..................... $ 6,656,513 $ 7,463,661
Realized gains from sale of securities,
other than sale of stock units ............ 4,133,398 8,884,899
------------ ------------
10,789,911 16,348,560
------------ ------------
Deductions:
Paid on account of participations redeemed . 414,733 648,862
Semi-annual distributions (Note 3(a))
Paid in cash ............................. 1,392,270 1,783,831
Reinvested, below ........................ 9,067,257 13,985,638
------------ ------------
10,874,260 16,418,331
------------ ------------
Net change in income and distributable fund (84,349) (69,771)
------------ ------------
Principal Account:
Additions:
Payments received on sale of participations 40,626,909 73,930,270
Semi-annual distributions reinvested, above 9,067,257 13,985,638
Realized gains on sale of stock units ..... 1,967,826 45,931,415
Unrealized appreciation (depreciation)
of investments ........................... 16,587,948 (13,378,650)
------------ ------------
98,249,940 120,468,673
------------ ------------
Deductions:
Paid on account of participations redeemed.. 118,815,387 160,221,771
Semi-annual distributions of principal
(Note 3(b)) ............................... 549,286 651,211
------------ ------------
119,364,673 160,872,982
------------ ------------
Net change in principal account ............ (21,114,733) (40,404,309)
------------ ------------
Net assets at beginning of period:
Income and distributable fund .............. 597,016 666,787
Principal account .......................... 484,597,501 525,001,810
------------ ------------
485,194,517 525,668,597
------------ ------------
Net assets at end of period:
Income and distributable fund .............. 512,667 597,016
Principal account .......................... 463,482,768 484,597,501
------------ ------------
$463,995,435 $485,194,517
============ ============
The accompanying notes form an integral part of these financial statements.
22
<PAGE>
LEXINGTON CORPORATE LEADERS TRUST FUND
STATEMENT OF INVESTMENTS December 31, 1999
--------------------------------------------------------------------------------
Number of Market
Shares Cost Value
--------- ------------ -----------
Securities
Consumer Products: (14.7%)
Eastman Kodak Co. ..................... 297,200 $ 20,999,070 $19,689,500
Fortune Brands, Inc. .................. 297,200 9,446,426 9,826,175
Gallaher Group PLC .................... 297,200 5,327,727 4,569,450
Procter & Gamble Co. .................. 297,200 20,285,477 32,561,975
------------ ------------
56,058,700 66,647,100
------------ ------------
Oil International: (16.3%)
Chevron Corp. ......................... 297,200 19,239,757 25,744,950
Exxon Mobil Corp. ..................... 599,100 31,559,754 48,264,994
------------ ------------
50,799,511 74,009,944
------------ ------------
Chemical & Fertilizers: (8.7%)
DuPont (E.I.) de Nemours & Co., Inc.... 297,200 15,954,096 19,578,050
Union Carbide Corp. ................... 297,200 12,807,570 19,838,100
------------ ------------
28,761,666 39,416,150
------------ ------------
Electrical Equipment: (10.2%)
General Electric Co. .................. 297,200 17,014,730 45,991,700
------------ ------------
Broadcasting: (4.2%)
CBS Corp.* ............................ 297,200 6,279,220 19,002,225
------------ ------------
Retailing: (2.5%)
Sears, Roebuck & Co. .................. 297,200 13,606,042 9,046,025
Venator Group, Inc.* .................. 297,200 5,770,338 2,080,400
------------ ------------
19,376,380 11,126,425
------------ ------------
Utilities: (5.8%)
Ameren Corp. .......................... 297,200 11,629,982 9,733,300
Consolidated Edison, Inc. ............. 297,200 9,624,012 10,253,400
Pacific Gas & Electric Co. ............ 297,200 7,755,463 6,092,600
------------ ------------
29,009,457 26,079,300
------------ ------------
Railroads: (6.5%)
Burlington Northern Santa Fe .......... 684,942 20,203,666 16,609,843
Union Pacific Corp. ................... 297,200 16,311,167 12,965,350
------------ ------------
36,514,833 29,575,193
------------ ------------
23
<PAGE>
Energy: (9.1%)
Columbia Energy Group .................. 485,450 17,467,431 30,704,713
Union Pacific Resources Group, Inc...... 255,967 6,445,217 3,263,579
USX Marathon Group ..................... 297,200 7,600,814 7,337,125
------------ ------------
31,513,462 41,305,417
------------ ------------
Misc. Industrial: (7.1%)
Honeywell International Corp. .......... 297,200 11,771,100 17,144,725
Praxair, Inc. .......................... 297,200 12,575,032 14,952,875
------------ ------------
24,346,132 32,097,600
------------ ------------
Communications: (9.4%)
AT&T Corp. ............................. 456,100 12,923,760 23,147,075
Lucent Technologies, Inc. .............. 259,020 6,016,973 19,377,934
------------ ------------
18,940,733 42,525,009
------------ ------------
Financial: (5.5%)
CitiGroup, Inc. ........................ 454,100 11,531,391 25,230,931
------------ ------------
Total Investments (100%) ............... $330,146,215 $453,006,994
============ ============
* Non Income producing
The accompanying notes form an integral part of these financial statements.
24
<PAGE>
LEXINGTON CORPORATE LEADERS TRUST FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 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.
NOTE 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.
(d) Accounting estimates--The preparation of financial statements in
accordance with accounting principles generally accepted in the United
States requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
NOTE 3. DISTRIBUTIONS
(a) During the year ended December 31, 1999 the distributions from net
investment income were $0.23796 per participation and, from realized gains
were $0.15424 per participation.
(b) The amount shown does not reflect the reinvestment, if any, of
that portion 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, 1999, the distributions from return of capital were
$0.15409 per participation.
Effective June 1, 1998 the Trust amended its Trust indenture requiring that
additional shares of common stock received as a result of a stock split shall
remain assets of the Trust.
25
<PAGE>
NOTE 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 $145,535 for the year
ended December 31, 1999. The Trust pays an administrative fee to Lexington
Management Corporation (Sponsor) equal, on an annual basis, to 0.40% of the
average daily net assets of the Trust.
NOTE 5. INVESTMENT TRANSACTIONS
During the year ended December 31, 1999, the proceeds of sales of
investment securities, other than short-term obligations, were $81,987,609.
There were no purchases of securities during the period.
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, 1999, net unrealized appreciation of portfolio
securities was $122,860,779, comprised of unrealized appreciation of
$147,123,093 and unrealized depreciation of $24,262,314.
NOTE 6. SOURCE OF NET ASSETS
As of December 31, 1999, 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 .............. $205,938,872
Cumulative amount of non-distributable realized gains
retained in principal account ............................ 134,683,117
Unrealized appreciation in value of securities ............. 122,860,779
------------
Principal account .......................................... 463,482,768
Income and distributable fund .............................. 512,667
------------
Total net assets ...................................... $463,995,435
============
NOTE 7. PARTICIPATIONS ISSUED AND REDEEMED
During the periods indicated, participations were issued and redeemed as
follows:
Number of Participations
------------------------------------
Year Ended Year Ended
December 31, 1999 December 31, 1998
----------------- -----------------
Issued on payments from holders ........... 2,391,797 4,778,866
Issued on reinvestment of dividends and
distributions............................. 724,515 1,198,055
Redeemed .................................. (7,202,045) (10,403,573)
----------- ------------
Net (decrease) ....................... (4,085,733) (4,426,652)
=========== ============
26
<PAGE>
NOTE 8. SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Selected Data Per Participation Years Ended December 31,
outstanding throughout the -----------------------------------------------------------------
period 1999 1998 1997 1996 1995
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ......................... $ 15.70 $ 14.88 $ 16.05 $ 13.74 $ 10.51
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income ............. 0.24 0.23 0.27 0.28 0.28
Net realized and unrealized
gain (loss) on investments....... 1.92 1.28 3.45 2.79 3.82
-------- -------- -------- -------- --------
Total from investment operations.... 2.16 1.51 3.72 3.07 4.10
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment
income .......................... (0.24) (0.23) (0.28) (0.28) (0.28)
Distributions from net realized
gains ............................ (0.15) (0.26) (2.60) (0.28) (0.03)
Distributions from income and
realized gains included in
terminations...................... (0.02) (0.02) (0.11) (0.02) (0.02)
Distributions from capital.......... (0.15) (0.18) (1.90) (0.18) (0.54)
-------- -------- -------- -------- --------
Total distributions ........... (0.56) (0.69) (4.89) (0.76) (0.87)
-------- -------- -------- -------- --------
Change in net asset value for
this year.......................... 1.60 0.82 (1.17) 2.31 3.23
-------- -------- -------- -------- --------
Net asset value at end of year...... $ 17.30 $ 15.70 $ 14.88 $ 16.05 $ 13.74
======== ======== ======== ======== ========
Total Return ....................... 13.68% 9.94% 23.09% 22.43% 39.21%
Ratios/Supplemental Data Net
Assets, end of period (000)........ $463,995 $485,195 $525,669 $392,295 $256,467
Ratios to average net asset of:
Expenses .......................... 0.61% 0.65% 0.62% 0.63% 0.58%
Net investment income ............. 1.41% 1.46% 1.76% 2.05% 2.57%
</TABLE>
27
<PAGE>
SPONSOR
Pilgrim Investments, Inc.
40 N. Central Avenue, Suite 1200
Phoenix, AZ 85004
TRUSTEE
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
All Shareholder Requests for Services of Any Kind Should be Sent to:
TRANSFER AGENT
DST Systems, Inc.
P.O. Box 419368
Kansas City, Missouri 64141-6368
or Call Toll Free:
Service: 1-800-992-0180
24 Hour Account Information: 1-800-992-0180
Table of Contents Page
----------------- ----
Highlights.....................................
Description of the Trust.......................
Selected Financial Information.................
How to Purchase Participations.................
How to Redeem Participations...................
Shareholder Services...........................
Exchange Privilege.............................
Taxation ......................................
Investment Return..............................
Amendment and Termination......................
Resignation, Removal and Limitations on
Liability of Sponsor.........................
Miscellaneous..................................
Nonstandard Investment Return..................
Financial Statements...........................
[PILGRIM LOGO]
PILGRIM CORPORATE LEADERS TRUST FUND
- No sales charge
- No redemption fees
- Created in 1935
- Blue chip stocks
PROSPECTUS
July 31, 2000
<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 27 pages.
Additional information not included in the Prospectus (Part II).
The undertaking to file reports.
The signatures.
THE FOLLOWING EXHIBITS:
Consent of Certified Public Accountants.
(The Annual Report for the year ending December 31, 1999 was filed
electronically on April 6, 2000 (as form type N-30D). Financial statements from
this 1999 Annual Report have been included in the Prospectus)
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Amendment to be
signed on its behalf by the Undersigned, thereunto duly authorized, in the City
of Phoenix and State of Arizona, on the 26th day of July, 2000.
PILGRIM CORPORATE LEADERS TRUST FUND
/s/
--------------------------------------
Stanley D. Vyner *
President and Chief Executive Officer
Pilgrim Investments, Inc.
/s/
--------------------------------------
Michael J. Roland *
Principal Financial Officer
Pilgrim Investments, Inc.
* By: /s/ James M. Hennessy
---------------------
James M. Hennessy, Attorney-in-Fact **
----------
** Power of Attorney is filed herewith.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Robert W. Stallings, James M. Hennessy, Jeffrey S. Puretz and Karen L.
Anderberg, and each of them his true and lawful attorney-in-fact as agent with
full power of substitution and resubstitution of him in his name, place, and
stead, to sign any and all registration statements on Form S-6 applicable to
Pilgrim Corporate Leaders Trust Fund and any amendment or supplement thereto,
and to file the same with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agent, or his substitutes, may lawfully do or
cause to be done by virtue hereof.
Dated: July 26, 2000
/s/ Robert W. Stallings /s/ Stanley D. Vyner
---------------------------------- -------------------------------------
Robert W. Stallings Stanley D. Vyner
Chairman of the Board of Directors President and Chief Executive Officer
Pilgrim Investments, Inc. Pilgrim Investments, Inc.
/s/ James M. Hennessy
------------------------------
James M. Hennessy
Executive Vice President and Secretary
Pilgrim Investments, Inc.
