LEXINGTON WORLDWIDE EMERGING MARKETS FUND INC, PRES14A, 2000-06-09

LEXINGTON WORLDWIDE EMERGING MARKETS FUND INC
PRES14A, 2000-06-09

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SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a party other than the Registrant [_]
Check the appropriate box:

[X] Preliminary proxy statement [_] Confidential, for Use of the
Definitive proxy statement Commission Only (as permitted by
[_] Definitive additional materials Rule 14a-6(e)(2))
[_] Soliciting material under Rule 14a-12

Lexington Global Corporate Leaders Fund, Inc.
(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials:

[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.

(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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PRELIMINARY PROXY MATERIALS FOR THE INFORMATION OF THE SECURITIES AND EXCHANGE
COMMISSION.

LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
LEXINGTON GLOBAL TECHNOLOGY FUND, INC.
LEXINGTON GNMA INCOME FUND, INC.
LEXINGTON GOLDFUND, INC.
LEXINGTON GROWTH AND INCOME FUND, INC.
LEXINGTON INTERNATIONAL FUND, INC.
LEXINGTON SILVER FUND, INC.
LEXINGTON SMALL CAP ASIA GROWTH FUND, INC.
LEXINGTON TROIKA DIALOG RUSSIA FUND, INC.
LEXINGTON WORLDWIDE EMERGING MARKETS FUND, INC.
LEXINGTON GLOBAL INCOME FUND
LEXINGTON MONEY MARKET TRUST
P.O. Box 1515
Park 80 West, Plaza Two
Saddle Brook, New Jersey 07663
(800) 526-0056

June , 2000

Dear Shareholder:

You are invited to attend a Special Meeting of Shareholders (the "Meeting")
of the Lexington Global Corporate Leaders Fund, Inc., Lexington Global
Technology Fund, Inc., Lexington GNMA Income Fund, Inc., Lexington Goldfund,
Inc., Lexington Growth and Income Fund, Inc., Lexington International Fund,
Inc., Lexington Silver Fund, Inc., Lexington Small Cap Asia Growth Fund, Inc.,
Lexington Troika Dialog Russia Fund, Inc., Lexington Worldwide Emerging Markets
Fund, Inc., Lexington Global Income Fund and Lexington Money Market Trust (each
a "Fund" or collectively the "Funds") to be held on July 21, 2000, at the
offices of the Funds located at Park 80 West, Plaza Two, Saddle Brook, New
Jersey 07663.

The Meeting has been called by your Board of Directors/Trustees because two
transactions have been proposed which, if completed, would substantially affect
your Fund. These transactions require your careful consideration and their
completion require your vote on the proposals outlined below.

The first transaction is the proposed acquisition of Lexington Global Asset
Managers, Inc., the parent of your Fund's current investment adviser, Lexington
Management Corporation, by ReliaStar Financial Corp. Upon the completion of
this transaction, Pilgrim Investments, Inc., which is an indirect, wholly-owned
subsidiary of ReliaStar Financial Corp., would become the investment adviser to
the Funds, subject to your approval at this Meeting. It is proposed that
Pilgrim Investments, Inc. would be paid the same advisory fees as are currently
paid by the Funds to Lexington Management Corporation. Should it become the
investment adviser to the Funds, Pilgrim Investments, Inc. expects that many of
the portfolio managers who currently manage the Funds will remain the portfolio
managers of those Funds and that except for Strato Advisors, Inc., which is the
sub-adviser to Lexington Global Technology Fund and Lexington Worldwide
Emerging Markets Fund, the current sub-advisers will continue to be sub-adviser
to the Funds. In addition, upon the completion of the acquisition, your Fund
would become part of the Pilgrim mutual fund complex, which currently consists
of 36 different investment portfolios. As a shareholder of a Fund, you will be
able to continue to purchase shares of that or any other Fund without paying
any sales charge, even though it is expected that a sales load will be added to
the Funds for new investors. You would also be permitted to exchange into or
purchase shares of any fund in the Pilgrim mutual fund complex without paying
any sales charge, even though all of those funds, except the money market
funds, are sold with a sales load.
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Second, after Lexingon Asset Managers, Inc. and ReliaStar Financial Corp.
entered into their agreement, ING Groep N.V. entered into an agreement with
ReliaStar Financial Corp. to acquire ReliaStar Financial Corp. Should you
approve Pilgrim Investments, Inc. becoming the investment adviser to the Funds
upon the completion of the Lexington/ReliaStar transaction, it is expected that
Pilgrim Investments, Inc. would remain the investment adviser to the Funds upon
the completion of this second ReliaStar/ING transaction, and your status as a
Fund shareholder within the Pilgrim mutual fund complex would not change. The
investment advisory fees paid to Pilgrim Investments, Inc. would not change. In
addition, you would continue to have all the same privileges to purchase and
exchange shares of mutual funds within that complex. The continuation of
Pilgrim Investments, Inc. as the investment adviser, however, requires that you
take certain additional actions, which are more fully described in the proxy
statement. The acquisition of ReliaStar Financial Corp. by ING Groep N.V. is
expected to be completed in September 2000.

At the Meeting you will be asked to consider and approve the following:

. A proposal to elect thirteen (13) members to the Board of Directors or
Board of Trustees, as the case may be, to hold office until the election
and qualification of their successors;

. Two proposals to approve new Investment Management Agreements between
each Fund and Pilgrim Investments, Inc.;

. Two proposals to approve new Sub-Adviser Agreements between Pilgrim
Investments, Inc. and Crosby Asset Management (US) Inc. for the Lexington
Small Cap Asia Growth Fund, Inc.;

. Two proposals to approve new Sub-Adviser Agreements between Pilgrim
Investments Inc. and Insinger Asset Management N.V. for the Lexington
Small Cap Asia Growth Fund, Inc.;

. Two proposals to approve new Sub-Adviser Agreements between Pilgrim
Investments, Inc. and Troika Dialog Asset Management (Cayman Islands),
Ltd. for the Lexington Troika Dialog Russia Fund, Inc.;

. A proposal to ratify the selection of KPMG LLP as each Fund's independent
public accountants for the fiscal year ending December 31, 2000;

. A proposal to approve a new Service and Distribution Plan for each Fund
other than the Lexington Money Market Trust;

. A proposal to approve Amended and Restated Articles of Incorporation for
Lexington Global Corporate Leaders Fund, Inc., Lexington Global
Technology Fund, Inc., Lexington GNMA Income Fund, Inc., Lexington
Goldfund, Inc., Lexington Growth and Income Fund, Inc., Lexington
International Fund, Inc., Lexington Silver Fund, Inc., Lexington Small
Cap Asia Growth Fund, Inc., Lexington Troika Dialog Russia Fund, Inc.,
and Lexington Worldwide Emerging Markets Fund, Inc., each a Maryland
corporation, which would make the Declaration of Trust for each
Massachusetts business trust consistent with each other and would permit
each Fund to offer its shares in multiple series and classes;

. A proposal to approve an Amended and Restated Declaration of Trust for
Lexington Global Income Fund and Lexington Money Market Trust, each a
Massachusetts business trust, which would make the Declaration of Trust
for each Massachusetts business trust consistent with each other and
would permit each Fund to offer its shares in multiple series and
classes; and

. To transact such other business as may properly come before the meeting.

These proposals are being presented to you because two events have occurred
that affect the Funds. These events require your consideration of the proposals
outlined above.

These proposals are very important to the completion of both of the
acquisitions described above. Each proposal is discussed in detail in the proxy
statement. All of these proposals have been approved by your Board of
Directors/Trustees. The Directors/Trustees recommend that each proposal be
approved by shareholders. We are asking you to consider them carefully and
express your vote on the enclosed proxy card or at the Meeting.

The Boards of Directors/Trustees have fixed the close of business on May 23,
2000 as the record date (the "Record Date") for determining the shareholders
who are entitled to receive notice of the Meeting and to vote

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their shares at the Meeting or any adjournments or postponements thereof. You
are entitled to cast one vote for each full share and a fractional vote for
each fractional share that you own on the Record Date.

WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE FILL IN,
SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE PAID
RETURN ENVELOPE ENCLOSED IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER
PROXY SOLICITATION, AND TO ENSURE THAT A QUORUM WILL BE PRESENT AT THE MEETING
AND A MAXIMUM NUMBER OF SHARES MAY BE VOTED. IT IS MOST IMPORTANT AND IN YOUR
BEST INTEREST TO SIGN YOUR PROXY CARD AND RETURN IT. THE PROXY IS REVOCABLE AT
ANY TIME PRIOR TO ITS USE.

The Board of Directors/Trustees of each Fund has given careful consideration
to these proposals, and each has concluded that they are in the best interests
of each Fund and its shareholders. WE URGE YOU TO APPROVE ALL OF THE PROPOSALS.

Sincerely,

Robert M. DeMichele
President

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PRELIMINARY PROXY MATERIALS FOR THE INFORMATION OF THE SECURITIES AND EXCHANGE
COMMISSION.

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON

July 21, 2000

Lexington Global Corporate Leaders Fund, Inc., Lexington Global Technology
Fund, Inc., Lexington GNMA Income Fund, Inc., Lexington Goldfund, Inc.,
Lexington Growth and Income Fund, Inc., Lexington International Fund, Inc.,
Lexington Silver Fund, Inc., Lexington Small Cap Asia Growth Fund, Inc.,
Lexington Troika Dialog Russia Fund, Inc., Lexington Worldwide Emerging Markets
Fund, Inc., Lexington Global Income Fund and Lexington Money Market Trust (each
a "Fund" or collectively the "Funds") will host a Special Meeting of
Shareholders (the "Meeting") on July 21, 2000 at 9:00 a.m. Eastern time at the
offices of the Funds located at Park 80 West, Plaza Two, Saddle Brook, New
Jersey, 07663. This will be a joint meeting for the shareholders of each Fund
and for the shareholders of Lexington Emerging Markets Fund, Inc. and Lexington
Natural Resources Trust.

At the Meeting, shareholders will be asked to consider and approve the
following:

1. A proposal to elect thirteen (13) Directors or Trustees, as the
case may be, to hold office until the election and qualification
of their successors;

2. A proposal to approve a new Investment Management Agreement
between each Fund and Pilgrim Investments, Inc. ("Pilgrim"), an
indirect, wholly-owned subsidiary of ReliaStar Financial Corp.
("ReliaStar"), to take effect upon the completion of the proposed
acquisition of Lexington Global Asset Managers, Inc. by
ReliaStar. The new Investment Management Agreement would have the
same fees as the current Investment Management Agreement;

3. A proposal to approve a new Investment Management Agreement
between each Fund and Pilgrim to take effect upon the completion
of the proposed acquisition of ReliaStar by ING Groep N.V.
("ING"). The new Investment Management Agreement would have the
same fees as the current Investment Management Agreement;

4. Lexington Small Cap Asia Growth Fund, Inc. only:

a. A proposal to approve a new Sub-Adviser Agreement between
Pilgrim and Crosby Asset Management (US) Inc. for Lexington Small
Cap Asia Growth Fund, Inc., with no effective change in the fees
from current Sub-Adviser Agreement, to take effect upon the
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completion of the proposed acquisition of Lexington Global Asset
Managers, Inc. by ReliaStar;

b. A proposal to approve a new Sub-Adviser Agreement between
Pilgrim and Crosby Asset Management (US) Inc. for the Lexington
Small Cap Asia Growth Fund, Inc., with no effective change in the
fees from the current Sub-Adviser Agreement, to take effect upon
the completion of the acquisition of ReliaStar by ING;

5. Lexington Small Cap Asia Growth Fund, Inc. only:

a. A proposal to approve a new Sub-Adviser Agreement between
Pilgrim and Insinger Asset Management N.V. for the Lexington
Small Cap Asia Growth Fund, Inc., with no effective change in the
fees from the current Sub-Adviser Agreement, to take effect upon
the acquisition of certain regulatory approvals and the
completion of the proposed acquisition of Lexington Global Asset
Managers, Inc. by ReliaStar;

b. A proposal to approve a new Sub-Adviser Agreement between
Pilgrim and Insinger Asset Management N.V. for the Lexington
Small Cap Asia Growth Fund, Inc., with no effective change in the
fees from the current Sub-Adviser Agreement, to take effect upon
the acquisition of certain regulatory approvals and the
completion of the acquisition of ReliaStar by ING;

6. Lexington Troika Dialog Russia Fund, Inc. only:

a. A proposal to approve a new Sub-Adviser Agreement between
Pilgrim and Troika Dialog Asset Management (Cayman Islands), Ltd.
for the Lexington Troika Dialog Russia Fund, Inc., with no
effective change in the fees from the current Sub-Adviser
Agreement, to take effect upon the completion of the proposed
acquisition of Lexington Global Asset Managers, Inc. by
ReliaStar;

b. A proposal to approve a new Sub-Adviser Agreement between
Pilgrim and Troika Dialog Asset Management (Cayman Islands), Ltd.
for the Lexington Troika Dialog Russia Fund, Inc., with no
effective change in the fees from the current Sub-Adviser
Agreement, to take effect upon the completion of the acquisition
of ReliaStar by ING;

7. A proposal to ratify the selection of KPMG LLP as each Fund's
independent public accountants for the fiscal year ending
December 31, 2000;

8. A proposal to approve a new Service and Distribution Plan for
each Fund, other than the Lexington Money Market Trust, which
would impose on each Fund a fee on an annualized basis of 0.25%
of the average daily net assets;

9. A proposal to approve Amended and Restated Articles of
Incorporation for Lexington Global Corporate Leaders Fund, Inc.,
Lexington Global Technology Fund, Inc., Lexington GNMA Income
Fund, Inc., Lexington Goldfund, Inc., Lexington Growth and Income
Fund, Inc., Lexington International Fund, Inc., Lexington Silver
Fund, Inc., Lexington Small Cap Asia Growth Fund, Inc., Lexington
Troika Dialog Russia Fund, Inc., and Lexington Worldwide Emerging
Markets Fund, Inc., each a Maryland corporation;

10. A proposal to approve an Amended and Restated Declaration of
Trust for Lexington Global Income Fund and Lexington Money
Market Trust, each a Massachusetts business trust;

11. Any other business properly brought before the meeting.

The Boards of Directors/Trustees have fixed the close of business on May 23,
2000 as the record date (the "Record Date") for determining the shareholders
who are entitled to notice of the Meeting and to vote their shares at the
Meeting or any adjournments or postponements thereof. Shareholders are entitled
to cast one vote for each full share and a fractional vote for each fractional
share they own on the Record Date. Please read the full text of the proxy
statement for a complete understanding of the proposals.

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Dated: June , 2000

By Order of the Boards of Directors/Trustees

Lisa Curcio
Secretary
P.O. Box 1515, Park 80 West, Plaza Two
Saddle Brook, New Jersey 07663

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PRELIMINARY PROXY MATERIALS FOR THE INFORMATION
OF THE SECURITIES AND EXCHANGE COMMISSION.

PROXY STATEMENT

Dated June , 2000

SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON

July 21, 2000

GENERAL INFORMATION:

The Directors of the Lexington Global Corporate Leaders Fund, Inc.,
Lexington Global Technology Fund, Inc., Lexington GNMA Income Fund, Inc.,
Lexington Goldfund, Inc., Lexington Growth and Income Fund, Inc., Lexington
International Fund, Inc., Lexington Silver Fund, Inc., Lexington Small Cap Asia
Growth Fund, Inc., Lexington Troika Dialog Russia Fund, Inc., and Lexington
Worldwide Emerging Markets Fund, Inc., each a Maryland Corporation, and the
Trustees of the Lexington Global Income Fund and Lexington Money Market Trust,
each a Massachusetts business trust (each a "Fund" or collectively the
"Funds"), are soliciting your proxy for use at a Special Meeting of
Shareholders (the "Meeting") to approve proposals that have already been
approved by the Board of Directors/Trustees, as the case may be, of each Fund.
The shareholders of each Fund will vote separately on each proposal presented
at the Meeting. For your convenience, we have divided this proxy statement into
four parts:

Part 1--An Overview
Part 2--The Proposals
Part 3--More on Proxy Voting
Part 4--Additional Information

Your vote is important! You should read the entire proxy statement before
voting. If you have any questions, please call the Funds at 1-800-526-0056.
Even if you sign and return the accompanying proxy, you may revoke it by giving
written notice of such revocation to the Secretary of the Fund prior to the
Meeting or by delivering a subsequently dated proxy or by attending and voting
at the Meeting in person. Management expects to solicit proxies principally by
mail, but Management, or agents appointed by Management, may also solicit
proxies by telephone, telegraph or personal interview. The costs of
solicitation will be borne by Lexington Management Corporation.
<PAGE>

We began mailing this proxy statement, Notice of Special Meeting and Proxy
Card to shareholders on or about June , 2000.

The Funds are required by federal law to file reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). The
SEC maintains a Web site that contains information about the Funds
(www.sec.gov). Any such proxy material, reports and other information can be
inspected and copied at the public reference facilities of the SEC, 450 Fifth
Street, N.W., Washington DC 20549 and at the SEC's New York Regional Office,
Seven World Trade Center, New York, NY 10048. Copies of such materials can be
obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services of the SEC at 450 Fifth Street, N.W., Washington DC 20549,
at prescribed rates.

The Funds' most recent annual and semi-annual reports to shareholders are
available at no cost. To request a report, please call the Funds toll-free at
1-800-526-0056 or write to the Funds at P.O. Box 1515, Park 80 West, Plaza Two,
Saddle Brook, New Jersey, 07663.

PART 1--AN OVERVIEW

This proxy statement is furnished in connection with the solicitation of
proxies by the Boards of Directors/Trustees of the Funds for use at the Meeting
to be held on July 21, 2000 at 9:00 a.m. Eastern time at the offices of the
Funds located at Park 80 West, Plaza Two, Saddle Brook, New Jersey, 07663.

Two events have occurred that require the calling of this Meeting. These
events directly affect the investment advisory agreements the Funds have with
Lexington Management Corporation ("LMC") and the sub-advisory agreements LMC
has with various sub-advisers.

On February 29, 2000, Lexington Global Asset Managers, Inc. ("LGAM"), the
parent to each Fund's current investment adviser, LMC, entered into an
agreement with ReliaStar Financial Corp. ("ReliaStar") whereby ReliaStar would
acquire LGAM (the "Lexington Acquisition"). ReliaStar is a Minneapolis-based,
publicly held life insurance holding company whose subsidiaries offer
individuals and institutions life insurance and annuities, employee benefit
products and services, life and health reinsurance, retirement plans, mutual
funds, and bank and trust products. As of December 31, 1999, ReliaStar had
approximately $ billion in assets. Upon the completion of the Lexington
Acquisition, it is proposed that Pilgrim Investments, Inc. ("Pilgrim"), become
the investment adviser for the Funds. Pilgrim is a wholly-owned subsidiary of
Pilgrim Capital Corporation. Pilgrim Capital Corporation is a wholly-owned
subsidiary of ReliaStar. Organized in 1994, Pilgrim is a registered investment
adviser. As of April 30, 2000, Pilgrim managed 36 open-end funds, one closed-
end fund, and other institutional accounts, with combined assets of
approximately $16.2 billion.

On April 30, 2000, ING Groep N.V. ("ING") entered into an agreement with
ReliaStar for ING to acquire ReliaStar (the "ReliaStar Acquisition"). ING is a
global financial institution active in the field of insurance, banking and
asset management in more than 60 countries, with almost 90,000 employees. As of
December 31, 1999, ING had total assets of approximately $ , with
approximately $ under management. ING has informed the Funds that, if
shareholders approve the investment management agreements with Pilgrim, to go
into effect upon the completion of the Lexington Acquisition, ING intends
Pilgrim to continue as the investment adviser to the Funds, subject to
shareholder approval.

It is anticipated that the Lexington Acquisition will close shortly after
the Meeting and that, upon the closing, the names of the Funds will be changed
to replace "Lexington" with "Pilgrim." The Lexington Acquisition is subject to
the satisfaction of certain conditions including, but not limited to, the
approval of new investment advisory contracts with Pilgrim by (i) Lexington
Funds holding 90% of the net assets held by all of the Lexington Funds and (ii)
all Lexington Funds except Lexington Global Corporate Leaders Fund, Inc.,
Lexington Global Technology, Inc., Lexington Goldfund, Inc., Lexington Silver
Fund, Inc. and Lexington Small Cap Asia Growth Fund, Inc. Accordingly,
completion of the Lexington Acquisition requires the following:

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1. Approval by the Board of Directors or Board of Trustees, as the case
may be, of each Fund of a new investment management agreement with Pilgrim;
and

2. Approval by the shareholders of each Fund of a new investment
management agreement with Pilgrim.

ReliaStar has advised the Boards of Directors/Trustees of the Funds that in
addition to the conditions stated above, upon the closing of the Lexington
Acquisition, it desires to have the Funds overseen by new Boards of
Directors/Trustees. ReliaStar has advised the Boards of Directors/Trustees of
the Funds that upon the closing of the Lexington Acquisition, it desires to
have the Funds overseen by new Boards of Directors/Trustees. In addition,
Pilgrim plans to recommend to the newly-elected Directors/Trustees, if elected
by shareholders, that the Funds issue shares in multiple classes. Accordingly,
the Boards of Directors/Trustees of the Funds, based on ReliaStar's and
Pilgrim's recommendations and representations, recommend that all the Funds
operate under the same form of Articles of Incorporation or Declaration of
Trust, as the case may be, which, among other things, would allow the Funds to
issue multiple series and classes of shares.

Should shareholders of a Fund approve the investment management agreement
with Pilgrim, that Fund will become a member of the Pilgrim mutual fund complex
upon the completion of the Lexington Acquisition. The shareholders of that Fund
who are shareholders at the time of the completion of the Lexington Acquisition
will be able to continue to purchase shares of that or any other fund in the
Pilgrim mutual fund complex at net asset value, without a sales load, even
though it is likely that those mutual funds would otherwise be sold with a
sales load. ING has advised the Directors/Trustees that it intends to continue
this practice upon the completion of the ReliaStar Acquisition.

Under the Investment Company Act of 1940, as amended, (the "1940 Act"), the
closing of the ReliaStar Acquisition, which is expected to occur in September
2000, after the completion of the Lexington Acquisition, would cause the new
investment management agreements between the Funds and Pilgrim, should
shareholders approve them, to terminate. In order to avoid an additional
shareholder meeting to approve new investment management agreements, which
would be identical to those the Directors/Trustees are recommending be approved
by you to go in effect upon the completion of the Lexington Acquisition, the
Directors/Trustees are proposing that you consider and approve those new
agreements at this Meeting, to go into effect upon the completion of the
ReliaStar Acquisition. The Directors/Trustees have been advised that ING,
subject to the closing of the Lexington Acquisition, intends to continue to
have the investment advisory functions for the Funds performed by Pilgrim,
including those portfolio managers who are expected to manage the Funds after
the Lexington Acquisition.

The Directors/Trustees who are not "affiliated persons" of LMC or Pilgrim
met on April 11, April 17 and April 18, 2000, to consider the Lexington
Acquisition, the requests by ReliaStar and the recommendations they would make
to the shareholders. On April 18, 2000, the full Boards met and took certain
actions in connection with the proposed Lexington Acquisition. The
Directors/Trustees recommended that those actions requiring shareholder
approval be presented to shareholders. Pilgrim Capital Corporation has
indicated that it will recommend that the newly constituted Boards of
Directors/Trustees of the Funds, should they be elected by shareholders, ratify
all actions taken by the current Directors/Trustees at their meetings on April
18, 2000, in connection with their consideration of the Lexington Acquisition.

The Directors/Trustees who are not "affiliated persons" of LMC or Pilgrim
met again on May 22 and May 23, 2000 to consider the ReliaStar Acquisition. On
May 23, 2000, the full Boards met and took certain actions in connection with
the proposed ReliaStar Acquisition. The Directors/Trustees recommended that
those actions requiring shareholder approval be presented to shareholders.
Pilgrim Capital Corporation has indicated that it also will recommend that the
newly constituted Boards of Directors/Trustees of the Funds, should they be
elected by shareholders, ratify all actions taken by the current
Directors/Trustees at their meetings on May 23, 2000, in connection with their
consideration of the ReliaStar Acquisition.

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The Directors/Trustees met again on June 7, 2000, to give final
consideration to both the Lexington Acquisition and the ReliaStar Acquisition.
The Directors/Trustees reviewed various additional materials and information,
as well as all of the representations and assurances provided by ReliaStar,
Pilgrim and ING. In addition, the Directors/Trustees were advised that Stratos
Advisors, Inc. would not continue as the sub-adviser to Lexington Global
Technology Fund, Inc. and Lexington Worldwide Emerging Markets Fund, Inc. after
the closing of the Reliastar Acquisition. To ensure continuity of management,
the Directors/Trustees further determined that it was in the best interest of
shareholders to terminate the current sub-adviser agreement between LMC and
Stratos Advisors, Inc. As a result, effective June 7, 2000, Messrs. Alan H.
Wapnick, Richard T. Saler and Philip A. Schwartz will constitute the portfolio
management team that will manage Lexington Global Technology Fund, Inc. and
Lexington Worldwide Emerging Markets Fund, Inc. Additional information
regarding Messrs. Wapnick, Saler and Schwartz can be found under Proposal 2 of
the proxy statement.

After considering all matters related to the acquisitions and their impact
on the Funds, the Boards of Directors/Trustees have called these Meetings where
shareholders will be asked to consider and approve the following proposals:

1. To elect thirteen (13) Directors or Trustees, as the case may be,
to hold office until the election and qualification of their successors.

2. To approve a new Investment Management Agreement between each Fund
and Pilgrim Investments, Inc. ("Pilgrim"), an indirect, wholly-owned
subsidiary of ReliaStar Financial Corp. ("ReliaStar"), to take effect upon
the completion of the proposed acquisition of Lexington Global Asset
Managers, Inc. by ReliaStar. The new Investment Management Agreement would
have the same fees as the current Investment Management Agreement;

3. To approve a new Investment Management Agreement between each Fund
and Pilgrim to take effect upon the completion of the proposed acquisition
of ReliaStar by ING Groep N.V. ("ING"). The new Investment Management
Agreement would have the same fees as the current Investment Management
Agreement;

4. Lexington Small Cap Asia Growth Fund, Inc. only:
a. To approve a new Sub-Adviser Agreement between Pilgrim and
Crosby Asset Management (US) Inc. for Lexington Small Cap Asia
Growth Fund, Inc., with no effective change in the fees from the
current Sub-Adviser Agreement, to take effect upon the completion
of the proposed acquisition of Lexington Global Asset Managers,
Inc. by ReliaStar;

b. To approve a new Sub-Adviser Agreement between Pilgrim and
Crosby Asset Management (US) Inc. for Lexington Small Cap Asia
Growth Fund, Inc., with no effective change in the fees from the
current Sub-Adviser Agreement, to take effect upon the completion
of the proposed acquisition of ReliaStar by ING;

5. Lexington Small Cap Asia Growth Fund, Inc. only:
a. To approve a new Sub-Adviser Agreement between Pilgrim and
Insinger Asset Management N.V. for Lexington Small Cap Asia
Growth Fund, Inc., with no effective change in the fees from the
current Sub-Adviser Agreement, to take effect upon the
acquisition of certain regulatory approvals and the completion of
the proposed acquisition of Lexington Global Asset Managers, Inc.
by ReliaStar;

b. To approve a new Sub-Adviser Agreement between Pilgrim and
Insinger Asset Management N.V. for Lexington Small Cap Asia
Growth Fund, Inc., with no effective change in the fees from the
current Sub-Adviser Agreement, to take effect upon the
acquisition of certain regulatory approvals and the completion of
the proposed acquisition of ReliaStar by ING;

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6. Lexington Troika Dialog Russia Fund, Inc. only:
a. To approve a new Sub-Adviser Agreement between Pilgrim and
Troika Dialog Asset Management (Cayman Islands), Ltd. for
Lexington Troika Dialog Russia Fund, Inc., with no effective
change in the fees from the current Sub-Adviser Agreement, to
take effect upon the completion of the proposed acquisition of
Lexington Global Asset Managers, Inc. by ReliaStar;

b. To approve a new Sub-Adviser Agreement between Pilgrim and
Troika Dialog Asset Management (Cayman Islands), Ltd. for
Lexington Troika Dialog Russia Fund, Inc., with no effective
change in the fees from the current Sub-Adviser Agreement, to
take effect upon the completion of the proposed acquisition of
ReliaStar by ING;

7. To ratify the selection of KPMG LLP as each Fund's independent
public accountants for the fiscal year ending December 31, 2000;

8. To approve a new Service and Distribution Plan for each Fund, other
than the Lexington Money Market Trust, which would impose on each Fund a
fee on an annualized basis of 0.25% of the average daily net assets;

9. To approve Amended and Restated Articles of Incorporation for
Lexington Global Corporate Leaders Fund, Inc., Lexington Global Technology
Fund, Inc., Lexington GNMA Income Fund, Inc., Lexington Goldfund, Inc.,
Lexington Growth and Income Fund, Inc., Lexington International Fund, Inc.,
Lexington Silver Fund, Inc., Lexington Small Cap Asia Growth Fund, Inc.,
Lexington Troika Dialog Russia Fund, Inc., and Lexington Worldwide Emerging
Markets Fund, Inc., each a Maryland corporation;

10. To approve an Amended and Restated Declaration of Trust for
Lexington Global Income Fund and Lexington Money Market Trust, each a
Massachusetts business trust;

11. Any other business properly brought before the meeting.

THE FOLLOWING TABLE SUMMARIZES WHICH SHAREHOLDERS WILL VOTE ON EACH PROPOSAL:

<TABLE>
<CAPTION>
Fund Name Proposal
-----------------------------------------------------------------------------------
1 2 3 4a 4b 5a 5b 6a 6b 7 8 9 10 11
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Lexington Global
Corporate Leaders Fund,
Inc. . . . . . . .
-----------------------------------------------------------------------------------
Lexington Global
Technology Fund, Inc. . . . . . . .
-----------------------------------------------------------------------------------
Lexington GNMA Income
Fund, Inc. . . . . . . .
-----------------------------------------------------------------------------------
Lexington Goldfund, Inc. . . . . . . .
-----------------------------------------------------------------------------------
Lexington Growth and
Income Fund, Inc. . . . . . . .
-----------------------------------------------------------------------------------
Lexington International
Fund, Inc. . . . . . . .
-----------------------------------------------------------------------------------
Lexington Silver Fund,
Inc. . . . . . . .
-----------------------------------------------------------------------------------
Lexington Small Cap Asia
Growth Fund, Inc. . . . . . . . . . . .
-----------------------------------------------------------------------------------
Lexington Troika Dialog
Russia Fund, Inc. . . . . . . . . .
-----------------------------------------------------------------------------------
Lexington Worldwide
Emerging Markets
Fund, Inc. . . . . . . .
-----------------------------------------------------------------------------------
Lexington Global Income
Fund . . . . . . .
-----------------------------------------------------------------------------------
Lexington Money Market
Trust . . . . . .
</TABLE>

5
<PAGE>

PART 2--THE PROPOSALS

PROPOSAL 1

THE ELECTION OF DIRECTORS/TRUSTEES

A. General Information:

The Directors/Trustees of the Funds who are not "interested persons" of the
Funds, LMC or Pilgrim nominated the thirteen individuals listed below (the
"Nominees") to serve as Directors or Trustees, as the case may be, of the Funds
upon the completion of the Lexington Acquisition and until the next meeting of
shareholders at which Directors and Trustees are elected and their successors
have been duly elected and qualified. The Nominees, none of whom are currently
serving on the Boards of Directors/Trustees of the Funds, have been nominated
to replace the current Boards of Directors/Trustees of the Funds immediately
upon the completion of the Lexington Acquisition. All Nominees have consented
to be named in this proxy statement and have agreed to serve if elected.

The Nominees are being nominated in connection with the Lexington
Acquisition. In evaluating the Nominees, the Directors/Trustees met in person
with all of them except Messrs. Doherty, Patton and Turner, who were unable to
attend. The Directors/Trustees took into account the background and experience
of the Nominees, including their familiarity with the issues relating to these
types of funds and investments, as well as their careers in business, finance,
marketing and other areas. In selecting the Nominees, the Boards considered the
fact that each is a director, trustee or advisory board member of each of the
investment companies advised by Pilgrim. Based on their discussions with the
Nominees present, the Directors/Trustees believed that the Nominees and the
Nominees who were not present would serve the Funds well in the future if
elected by shareholders.

IF YOU GRANT AUTHORITY ON THE ACCOMPANYING PROXY CARD TO VOTE IN THE
ELECTION OF THE THIRTEEN DIRECTORS/TRUSTEES, THE PERSONS NAMED AS PROXIES WILL
VOTE FOR THE ELECTION OF THE NOMINEES NAMED BELOW TO THE BOARD OF
DIRECTORS/TRUSTEES OF EACH FUND FOR A TERM OF OFFICE COMMENCING WITH THE
COMPLETION OF THE LEXINGTON ACQUISITION AND CONTINUING UNTIL THE NEXT MEETING
OF SHAREHOLDERS AT WHICH DIRECTORS/TRUSTEES ARE ELECTED AND THEIR SUCCESSORS
HAVE BEEN ELECTED AND QUALIFIED.

If any of the Nominees is unable to serve for any reason, the persons named
as proxies will vote for such other Nominee or Nominees selected by the Boards
of Directors/Trustees, or the Boards may reduce the number of Directors or
Trustees as provided in each Fund's by-laws. Any other Nominee or Nominees who
would not be an "interested person" of a Fund, any manager, or any sub-adviser,
as defined by the 1940 Act (the "Independent Directors/Trustees"), will be
selected by the Independent Directors/Trustees currently serving on the Board
of Directors/Trustees. The Funds know of no reason why any of the Nominees
listed below would be unable to serve if elected.

B. Nominees for Election to the Boards of Directors/Trustees:

The Nominees for election to the Boards of Directors/Trustees are:

. Mary A. Baldwin, Ph.D. . Jock Patton
. Al Burton . David W.C. Putnam
. Paul S. Doherty . John R. Smith
. Robert B. Goode . Robert W. Stallings
. Alan L. Gosule . John G. Turner
. Mark Lipson . David W. Wallace
. Walter H. May

6
<PAGE>

The following tables summarize information about the Nominees, the positions
they will hold with each Fund, and their principal occupations. The address of
each Nominee is 40 North Central Avenue, Suite 1200, Phoenix, Arizona 85004.

<TABLE>
<CAPTION>
Position(s) to
be Held With the
Name, Age and Address Fund** Principal Occupation During Past 5 Years
---------------------------------------------------------------------------------------------
<S> <C> <C>
Mary A. Baldwin Ph.D. Director/Trustee Realtor, Caldwell Banker Success Realty
(Age 60) (formerly, The Prudential Arizona Realty) for
more than the last five years. Ms. Baldwin is
also Vice President, United States Olympic
Committee (November 1996-present) and formerly
Treasurer, United States Olympic Committee
(November 1992-November 1996). Ms. Baldwin is
also a director, trustee or advisory board
member of each of the funds managed by
Pilgrim.***
---------------------------------------------------------------------------------------------
Al Burton (Age 71) Director/Trustee President of Al Burton Productions for more than
the last five years. Mr. Burton was formerly
Vice President, First Run Syndication, Castle
Rock Entertainment (July 1992-November 1994).
Mr. Burton is also a director, trustee or
advisory board member of each of the funds
managed by Pilgrim.***
---------------------------------------------------------------------------------------------
Paul S. Doherty (Age 65) Director/Trustee President of Doherty, Wallace, Pillsbury and
Murphy, P.C., Attorneys. Formerly a Director of
Tambrands, Inc. Mr. Doherty is also a director
or trustee of each of the funds managed by
Pilgrim.***
---------------------------------------------------------------------------------------------
Robert B. Goode (Age 69) Director/Trustee Retired. Mr. Goode was formerly Chairman of
American Direct Business Insurance Agency, Inc.
(1996-2000), Chairman of The First Reinsurance
Company of Hartford (1990-1991) and President
and Director of American Skandia Life Assurance
Company (1987-1989). Mr. Goode is also a
director or trustee of each of the funds managed
by Pilgrim.***
---------------------------------------------------------------------------------------------
Alan L. Gosule (Age 58) Director/Trustee Partner, Rogers & Wells (since 1991). Mr. Gosule
is a Director of F.L. Putnam Investment
Management Co., Inc., Simpson Housing Limited
Partnership, Home Properties of New York, Inc.,
CORE Cap, Inc. and Calonnade Partners. Mr.
Gosule is also a director or trustee of each of
the funds managed by Pilgrim.***
---------------------------------------------------------------------------------------------
*Mark Lipson (Age 50) Director/Trustee Mr. Lipson was formerly Chairman of Northstar
Holding Corporation, Northstar Investment
Management Corporation and Northstar
Distributors, Inc.; Director of Northstar
Funding, Inc.; Director, President and Chief
Executive Officer of National Securities &
Research Corporation; and Director/Trustee and
President of the National Affiliated Investment
Companies and certain of National's subsidiaries
(prior to August 1993). Mr. Lipson is also a
director or trustee of each of the funds managed
by Pilgrim.***
---------------------------------------------------------------------------------------------
Walter H. May (Age 63) Director/Trustee Retired. Mr. May was formerly Managing Director
and Director of Marketing for Piper Jaffray,
Inc. Mr. May is also a director or trustee of
each of the funds managed by Pilgrim.***
---------------------------------------------------------------------------------------------
Jock Patton (Age 54) Director/Trustee Private Investor. Director of Hypercom
Corporation (since January 1999), Stuart
Entertainment, Inc. (since January 1999), and
JDA Software Group, Inc. (since January 1999).
Mr. Patton is also a Director of Buick of
Scottsdale, Inc., National Airlines, Inc., BG
Associates, Inc., BK Entertainment, Inc.,
Arizona Rotorcraft, Inc. and Director and Chief
Executive Officer of Rainbow Multimedia Group,
Inc. Mr. Patton was formerly
</TABLE>

7
<PAGE>

<TABLE>
<CAPTION>
Position(s) to be
Held With the
Name, Age and Address Fund** Principal Occupation During Past 5 Years
----------------------------------------------------------------------------------------------
<S> <C> <C>
Director of Stuart Entertainment, Inc. Director
of Artisoft, Inc. (August 1994-July 1998);
President and Co-owner of StockVal, Inc. (April
1993-June 1997) and a Partner and Director of
the law firm of Streich, Lang, P.A. (1972-1993).
Mr. Patton is also a director, trustee or a
member of the advisory board of each of the
funds managed by Pilgrim.***
----------------------------------------------------------------------------------------------
David W.C. Putnam (Age Director/Trustee President, Clerk and Director of F.L. Putnam
60) Securities Company, Inc., and its affiliates.
Mr. Putnam is Director of Anchor Investment
Management Corporation and President and
Director/Trustee of Anchor Capital Accumulation
Trust, Anchor International Bond Trust, Anchor
Gold and Currency Trust, Anchor Resources and
Commodities Trust and Anchor Strategic Assets
Trust. Mr. Putnam was formerly Director of Trust
Realty Corp. and Bow Ridge Mining Co. Mr. Putnam
is also a director or trustee of each of the
funds managed by Pilgrim.***
----------------------------------------------------------------------------------------------
John R. Smith (Age 76) Director/Trustee/ President of New England Fiduciary Company
Chairman (since 1991). Mr. Smith is Chairman of
Massachusetts Educational Financing Authority
(since 1987), Vice Chairman of Massachusetts
Health and Education Authority, Vice Chairman of
MHI, Inc. (Massachusetts non-profit Energy
Purchasers Consortium (since 1996), and formerly
Financial Vice President of Boston College
(1970-1991). Mr. Smith is also a director or
trustee of each of the funds managed by
Pilgrim.***
----------------------------------------------------------------------------------------------
*Robert W. Stallings Director/Trustee Chairman, Chief Executive Officer and President
(Age 50) of Pilgrim Group, Inc. (since December 1994);
Chairman Pilgrim Investments, Inc. (since
December 1994); Chairman, Pilgrim Securities,
Inc. (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
and its predecessors (since August 1991). Mr.
Stallings is also a director, trustee or a
member of the advisory board of each of the
funds managed by Pilgrim.***
----------------------------------------------------------------------------------------------
*John G. Turner (Age 60) Director/Trustee/ Chairman and Chief Executive Officer of
Chairman ReliaStar Financial Corp. and ReliaStar Life
Insurance Co. (since 1993); Chairman of
ReliaStar Life Insurance Company of New York
(since 1995); Chairman of Northern Life
Insurance Company (since 1992). Formerly
Director of Northstar Investment Management
Corporation and affiliates (1993-1999);
President of ReliaStar Financial Corp. and
ReliaStar Life Insurance Co. (1989-1991) and
President and Chief Operating Officer of
ReliaStar Life Insurance Company (1986-1991).
Mr. Turner is also Chairman of each of the funds
managed by Pilgrim.***
----------------------------------------------------------------------------------------------
David Wallace (Age 75) Director/Trustee Chairman of Putnam Trust Company and FECO
Engineered Systems, Inc. Mr. Wallace is
President and Director/Trustee of the Robert R.
Young Foundation, Governor of the New York
Hospital, Trustee of Greenwit Hospital and
Director of UMC Electronics and Zurn Industries,
Inc. Mr. Wallace was formerly Chairman of Lone
Star Industries, Putnam Trust Company, Chairman
and Chief Executive Officer of Todd Shipyards,
Bangor Punta Corporation and National Securities
& Research Corporation. Mr. Wallace is also a
director or trustee of each of the funds managed
by Pilgrim.***
</TABLE>

8
<PAGE>

* An "interested person" as defined in section 2(a)(19) of the 1940 Act.
** None of the Directors/Trustees own beneficial shares of the Funds as of May
23, 2000.
*** The funds managed by Pilgrim consist of 11 open-end investment companies
and one closed-end investment company. Ms. Baldwin and Messrs. Burton,
Patton and Stallings serve as members of an advisory board for certain of
the Pilgrim Funds. The advisory board members actively participate in
discussions regarding the Pilgrim Funds, but do not have the ability to
vote on any matters.

At their meeting on April 18, 2000, the Directors/Trustees elected Mr.
S.M.S. Chadha and Dr. Andrew M. McCosh to serve, for a term to expire December
31, 2006, as non-voting Advisory Directors/Trustees to those Funds having
international portfolios. The Boards' actions were based on the belief that the
Funds should continue to benefit from the particular experience and expertise
relating to international markets and economies that these two individuals have
brought to the Funds as current Directors/Trustees and that their participation
will provide continuity of oversight to the Funds with more unique portfolios.
As Advisory Directors/Trustees, Mr. Chadha and Dr. McCosh each will receive an
annual retainer of $15,000 plus reasonable travel expenses.

C. Remuneration of Nominees:

The Nominees currently serve on the boards of a number of funds advised by
Pilgrim (the "Pilgrim Funds"). Those individuals who are Independent
Directors/Trustees/Advisory Board Members of the Pilgrim Funds receive (i) an
annual retainer of $20,000; (ii) $5,000 per quarterly Board meeting; (iii) $500
per committee meeting; (iv) $500 per special or telephonic meeting; and (v)
out-of-pocket expenses. Pilgrim has advised the Funds that it is not aware of
any proposals to increase the fees paid to the Independent
Directors/Trustees/Advisory Board Members should the Nominees be elected to the
Boards of the Funds. The pro rata share of the retainer paid by each of the
Funds would likely be based on each Fund's average net assets as a percentage
of the average net assets of all the funds managed by Pilgrim for which the
Nominees serve in common as Directors/Trustees/Advisory Board Members.
Directors/Trustees/Advisory Board Members who are not Independent
Directors/Trustees would continue to receive no fees from the Funds. All
Directors/Trustees/Advisory Board Members would continue to be reimbursed for
any expenses incurred in attending meetings of the Funds and for other
incidental expenses. Each Fund's Board fees are subject to the approval of the
New Board upon its election; shareholders are not being asked to vote on these
fees. Thereafter, Board fees may be reviewed periodically and changed by the
Board. The Pilgrim Funds currently do not provide retirement benefits for their
Directors/Trustees/Advisory Board Members.

9
<PAGE>

The following table has been provided to the Funds by Pilgrim and sets forth
information regarding the compensation paid to the Nominees for the fiscal year
ended December 31, 1999 for service on the boards of the Pilgrim Funds.
Nominees whose names are preceded by an asterisk (*) will be Directors/Trustees
who are not Independent Directors/Trustees of the Funds if elected and if the
Lexington Acquisition is completed.

<TABLE>
<CAPTION>
Pension or
Retirement Estimated
Benefits Annual Aggregate Number of
Accrued as Benefits Compensation Directorships
Name of Fund Upon from the in the Fund
Director/Trustee Expenses Retirement Fund Complex Complex
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mary A. Baldwin............. N/A N/A $40,875 15
--------------------------------------------------------------------------------
Al Burton................... N/A N/A $40,875 15
--------------------------------------------------------------------------------
Jock Patton................. N/A N/A $45,875 15
--------------------------------------------------------------------------------
*Robert W. Stallings......... N/A N/A $0 15
--------------------------------------------------------------------------------
*John G. Turner.............. N/A N/A $0 15
--------------------------------------------------------------------------------
David W. Wallace............ N/A N/A $24,875 15
--------------------------------------------------------------------------------
Paul S. Doherty............. N/A N/A $27,125 15
--------------------------------------------------------------------------------
Robert B. Goode............. N/A N/A $26,625 15
--------------------------------------------------------------------------------
Alan L. Gosule.............. N/A N/A $25,125 15
--------------------------------------------------------------------------------
*Mark L. Lipson.............. N/A N/A $0 15
--------------------------------------------------------------------------------
Walter H. May............... N/A N/A $27,125 15
--------------------------------------------------------------------------------
David W.C. Putnam........... N/A N/A $24,375 15
--------------------------------------------------------------------------------
John R. Smith............... N/A N/A $27,125 15
</TABLE>

* As of December 31, 1999, there were 15 directorships in the Pilgrim Fund
complex. As a result of fund mergers which occurred on April 1, 2000, there
are currently 12 directorships in the Pilgrim Fund complex.

10
<PAGE>

Upon the completion of the Lexington Acquisition, it is anticipated that
the officers of the Funds will be:

<TABLE>
<CAPTION>
Name and Age Position(s) with the Fund Principal Occupation During Past 5 Years
---------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert W. Stallings President and CEO Chairman, Chief Executive Officer and President
(Age 51) of Pilgrim Group, Inc. ("Pilgrim Group") (since
December 1994); Chairman, Pilgrim Investments,
Inc. ("Pilgrim Investments") (since December
1994); Chairman, 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 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 Executive Vice President Director, Vice Chairman (since December 1994),
(Age 42) and Assistant Secretary Executive Vice President (since April 1995), and
Director of Structured Finance (since April
1998), Pilgrim Group, Inc. and Pilgrim
Investments; Director (since December 1994) and
Vice Chairman (since November 1995) of Pilgrim
Securities; Executive 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 Vyner Executive Vice President President and Chief Executive Officer (since
(Age 49) August 1996), Pilgrim Investments; Executive
Vice President of most of the other Pilgrim
Funds (since July 1996). Formerly Chief
Executive Officer (November 1993-December 1995)
HSBC Asset Management Americas, Inc., and Chief
Executive Officer, and Actuary (May 1986-October
1993) HSBC Life Assurance Co.
---------------------------------------------------------------------------------------------------
James M. Hennessy Executive Vice President Executive Vice President and Secretary (since
(Age 51) and Secretary October 1999), Pilgrim Capital Corporation and
its predecessors since April 1998. Executive
Vice President and Secretary (since April 1998),
Pilgrim Group, Pilgrim Securities and Pilgrim
Investments; Executive Vice President and
Secretary of each of the other Pilgrim Funds.
Formerly Senior Vice President, Pilgrim Capital
Corporation (April 1995-April 1998).
---------------------------------------------------------------------------------------------------
Michael J. Roland Senior Vice President and Senior Vice President and Chief Financial
(Age 41) Principal Financial Officer Officer, Pilgrim Group, Pilgrim Investments and
Pilgrim Securities (since June 1998); Senior
Vice President and Principal Financial Officer
of each of the other Pilgrim Funds. He served in
same capacity from January, 1995-April, 1997.
Formerly, Chief Financial Officer of Endeaver
Group (April, 1997 to June, 1998).
</TABLE>

11
<PAGE>

<TABLE>
<CAPTION>
Name and Age Position(s) with the Fund Principal Occupation During Past 5 Years
--------------------------------------------------------------------------------------------
<S> <C> <C>
Robert S. Naka Senior Vice President and Senior Vice President, Pilgrim Investments
(Age 36) Assistant Secretary (since November 1999) and Pilgrim Group, Inc.
(since August 1999). Senior Vice President and
Assistant Secretary of each of the other Pilgrim
Funds. Formerly Vice President, Pilgrim
Investments (April 1997-October 1999), Pilgrim
Group, Inc. (February 1997-August 1999).
Formerly Assistant Vice President, Pilgrim
Group, Inc. (August 1995-February 1997).
Formerly Operations Manager, Pilgrim Group, Inc.
(April 1992-April 1995).
--------------------------------------------------------------------------------------------
Robyn Ichilov Vice President Vice President, Pilgrim Investments (since
(Age 32) and Treasurer August 1997), Accounting Manager (since November
1995). Vice President and Treasurer of most of
the other Pilgrim Funds. Formerly Assistant Vice
President and Accounting Supervisor for
PaineWebber (June 1993-April 1995).
</TABLE>

These officers of the Funds will receive no compensation directly from the
Funds for performing the duties of their offices.

The mailing address of each officer will be 40 N. Central Ave., Suite 1200,
Phoenix, AZ 85004.

D. Required Vote:

Directors/Trustees are elected by the affirmative vote of a plurality of the
shares present in person or by proxy at the Meeting.

E. Board Recommendation:

The Boards of Directors/Trustees recommend that shareholders VOTE FOR the
election of each of the Nominees to the Boards of Directors/Trustees of the
Funds subject to their terms commencing and continuing as described above. If
any of the Nominees is not elected by shareholders, the current
Directors/Trustees may consider other courses of action. Because the
commencement of each Nominee's term is conditioned upon the completion of the
Lexington Acquisition, the effectiveness of shareholder action in electing the
Nominees likewise will be conditioned on the consummation of the Lexington
Acquisition. In the event the Lexington Acquisition is not consummated, the
current Directors/Trustees will remain in office even if the Nominees are
elected by shareholders.

PROPOSAL 2

THE APPROVAL OF A NEW INVESTMENT MANAGEMENT AGREEMENT TO
TAKE EFFECT UPON THE COMPLETION OF THE PROPOSED ACQUISITION OF
LEXINGTON GLOBAL ASSET MANAGERS, INC BY RELIASTAR FINANCIAL CORP.

A. General Information:

Under the 1940 Act, a transaction that results in a "change of control" or
control of an investment adviser may be deemed to result in an "assignment" of
any investment advisory agreement with that investment adviser. The 1940 Act
further provides that an invest-ment advisory agreement will automatically
terminate in the event of its assignment. The Lexington Acquisition described
above may constitute a "change of control" of the adviser for purposes of the
1940 Act, which would cause the "assignment" and resulting termination of the
present management agreements between the Funds and LMC (the "Current
Agreements").

The Independent Directors/Trustees reviewed the proposed Lexington
Acquisition and the effect it would have on the Current Agreements in detail at
their meetings held on April 11, April 17 and April 18, 2000. On April 18, 2000
the full Boards, including a majority of the Independent Directors/Trustees,
after giving due

12
<PAGE>

consideration to the conditions of the Lexington Acquisition, voted to approve
a new investment management agreement between each Fund and Pilgrim (the
"Proposed Agreements") subject to the approval of Fund shareholders. The
Proposed Agreements would become effective upon the closing of the Lexington
Acquisition. (A copy of the form of the Proposed Agreement is attached hereto
as Exhibit A.)

If approved by shareholders, the Proposed Agreements would remain in effect
for two years from the date they take effect and, unless terminated early,
would continue from year to year thereafter, provided that each such
continuance is approved annually with respect to each Fund (i) by the
applicable Fund's Board of Directors/Trustees, or by the vote of a majority of
the outstanding voting securities of the particular Fund, and in either case,
(ii) by a majority of the Fund's Independent Directors/Trustees who are also
not parties to the Proposed Agreements.

B. The Terms of the Proposed Agreements:

The terms of the Proposed Agreements related to the advisory services to be
provided are substantially similar in all material respects to the terms of
each Current Agreement. In addition, there is no change in the advisory fees to
be paid by the Funds. The Proposed Agreements require Pilgrim to provide,
subject to the supervision of the Boards of the Directors/Trustees of the
Funds, a continuous investment program for each Fund and determine the
composition of the assets of each Fund's portfolio, including determination of
the purchase retention or sale of the securities, cash and other investments
contained in the portfolio. Pilgrim will provide investment research and
conduct program of evaluation, investment, sales and reinvestment of each
Fund's assets.

There are, however, some important differences between the Proposed
Agreements and the Current Agreements you should take into consideration. Under
the Current Agreements, LMC, on behalf of the Funds, performs certain
accounting, shareholder servicing and other administrative services and is
reimbursed by the Funds for the costs of performing them. The Proposed
Agreements have no similar provision. Instead, certain accounting and
administrative services and shareholder servicing would be performed under a
separate Administrative Agreement whereby the Funds would pay an annual fee of
0.10% of average daily net assets.

In addition, the Current Agreements obligate LMC to limit the ordinary
business expenses of the Funds so as to not exceed the most restrictive expense
limits imposed by any statute or regulation. Currently, neither LMC nor Pilgrim
are aware of any, such statutes or regulations. LMC voluntarily limits expenses
of certain Funds by waiving some or all of its advisory fee and/or reimbursing
the Funds for certain expenses. While the Proposed Agreements contain no
provisions that limit expenses, Pilgrim, has agreed under separate Expense
Limitation Agreements, which were approved by the Directors/Trustees at their
meetings on April 18, 2000, and again on May 23, 2000 to limit the expenses of
the Funds to the levels shown below. The "expense caps," along with all of the
current and expected expenses of the Funds, are also described below in more
detail.

13
<PAGE>

As indicated above, the Proposed Agreements contain no increase in advisory
fees for any of the Funds. The annual advisory fees paid by the Funds to
Pilgrim as a percentage of each Fund's average daily net assets will be as
follows:

<TABLE>
<CAPTION>
Fund Name Adviser Fee
-----------------------------------------------------------------------------
<S> <C>
Lexington Global Corporate Leaders Fund, 1.00%
Inc.
-----------------------------------------------------------------------------
Lexington Global Technology Fund, Inc. 1.25%
-----------------------------------------------------------------------------
Lexington GNMA Income Fund, Inc. .60% on the first $150 million,
.50% on the next $250 million,
.45% on the next $400 million,
.40% thereafter.
-----------------------------------------------------------------------------
Lexington Goldfund, Inc. 1.00% on the first $50 million
and .75% thereafter.
-----------------------------------------------------------------------------
Lexington Growth and Income Fund, Inc. .75% on the first $100 million
of average daily net assets,
.60% on the next $50 million,
.50% on the next $100 million
and .40% thereafter.
-----------------------------------------------------------------------------
Lexington International Fund, Inc. 1.00%
-----------------------------------------------------------------------------
Lexington Silver Fund, Inc. 1.00% on the first $30 million
and .75% thereafter.
-----------------------------------------------------------------------------
Lexington Small Cap Asia Growth Fund, Inc. 1.25%
-----------------------------------------------------------------------------
Lexington Troika Dialog Russia Fund, Inc. 1.25%
-----------------------------------------------------------------------------
Lexington Worldwide Emerging Markets Fund, 1.00%
Inc.
-----------------------------------------------------------------------------
Lexington Global Income Fund 1.00%
-----------------------------------------------------------------------------
Lexington Money Market Trust .50% on the first $500 million
and .45% thereafter.
</TABLE>

Pilgrim will enter into expense limitation agreements with each Fund which
would limit for the next two years total expenses of the Funds (excluding:
interest; taxes; brokerage commissions; other investment related costs;
extraordinary expenses such as litigation; other expenses not incurred in the
ordinary course of the Fund's business; and expenses of counsel or other
persons or services retained by the Fund's Independent Directors/Trustees) to
the same total expense limitations, plus any new distribution fees imposed by
the adoption of Rule 12b-1 plans, currently in effect for each Fund. The
following table shows the current expense limitation and the proposed expense
limitation for each Fund.

<TABLE>
<CAPTION>
Fund Name Expense Cap
-------------------------------------------------------------------------------
Current Proposed
-------------------------------------------------------------------------------
<S> <C> <C>
Lexington Global Corporate Leaders Fund, Inc. 2.50% 2.75%
-------------------------------------------------------------------------------
Lexington Global Technology Fund, Inc. 2.50% 2.75%
-------------------------------------------------------------------------------
Lexington GNMA Income Fund, Inc. 1.04% 1.29%
-------------------------------------------------------------------------------
Lexington Goldfund, Inc. 2.75% 2.75%
-------------------------------------------------------------------------------
Lexington Growth and Income Fund, Inc. 2.75% 2.75%
-------------------------------------------------------------------------------
Lexington International Fund, Inc. 2.75% 2.75%
-------------------------------------------------------------------------------
Lexington Silver Fund, Inc. 2.50% 2.75%
-------------------------------------------------------------------------------
Lexington Small Cap Asia Growth Fund, Inc. 2.50% 2.75%
-------------------------------------------------------------------------------
Lexington Troika Dialog Russia Fund, Inc. 3.35% 3.35%
-------------------------------------------------------------------------------
Lexington Worldwide Emerging Markets Fund, Inc. 2.75% 2.75%
-------------------------------------------------------------------------------
Lexington Global Income Fund 2.75% 2.75%
-------------------------------------------------------------------------------
Lexington Money Market Trust 1.00% 1.00%
</TABLE>

14
<PAGE>

The following chart compares the fees and expenses that shareholders in the
Lexington Funds currently pay and the fees and expenses it is estimated that
shareholders would pay if the Rule 12b-1 Plans and new Investment Management
Proposed Agreements with Pilgrim are approved at the Meeting and the Lexington
Acquisition occurs. The information presented is based on the assumptions that
(1) shareholders approve all Proposed Agreements and proposed Rule 12b-1 Plans,
and (2) after the Lexington Acquisition, vendors and other service providers
provide services to the Funds under current fee arrangements in place for the
Pilgrim Funds or under lower fee arrangements that Pilgrim has negotiated with
vendors. The proposed expense ratios shown below were provided by Pilgrim and
represent good faith estimates of expenses.

<TABLE>
<CAPTION>
Global Growth
Corporate Global GNMA &
Leaders Technology Income Goldfund Income International
-----------------------------------------------------------------------------------------------------
Cur- Pro- Cur- Pro- Cur- Pro- Cur- Pro- Cur- Pro- Cur- Pro-
Expenses rent posed rent posed rent posed rent posed rent posed rent posed
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment advisory..... 1.00% 1.00% 1.25% 1.25% 0.63% 0.63% 0.54% 0.54% 0.93% 0.93% 1.00% 1.00%
-----------------------------------------------------------------------------------------------------
Custodian expenses...... 0.02% 0.02% 0.00% 0.35% 0.01% 0.02% 0.01% 0.02% 0.08% 0.08% 0.18% 0.30%
-----------------------------------------------------------------------------------------------------
Transfer agent.......... 0.21% 0.15% 0.00% 0.15% 0.11% 0.13% 0.27% 0.11% 0.28% 0.15% 0.15% 0.15%
-----------------------------------------------------------------------------------------------------
Administrative service
fees................... 0.00% 0.10% 0.00% 0.10% 0.00% 0.10% 0.00% 0.10% 0.00% 0.10% 0.00% 0.10%
-----------------------------------------------------------------------------------------------------
Professional fees....... 0.23% 0.02% 0.00% 0.02% 0.02% 0.02% 0.01% 0.02% 0.13% 0.02% 0.14% 0.02%
-----------------------------------------------------------------------------------------------------
Distribution expenses... 0.00% 0.25% 0.00% 0.25% 0.04% 0.25% 0.00% 0.25% 0.12% 0.25% 0.08% 0.25%
-----------------------------------------------------------------------------------------------------
Printing and mailing.... 0.11% 0.04% 0.00% 0.04% 0.02% 0.04% 0.02% 0.04% 0.10% 0.04% 0.12% 0.04%
-----------------------------------------------------------------------------------------------------
Directors fees and
expenses............... 0.09% 0.01% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.03% 0.01% 0.08% 0.01%
-----------------------------------------------------------------------------------------------------
Accounting and
recordkeeping
expenses............... 0.08% 0.02% 0.00% 0.02% 0.08% 0.02% 0.07% 0.02% 0.07% 0.02% 0.09% 0.02%
-----------------------------------------------------------------------------------------------------
Registration fees....... 0.07% 0.04% 0.00% 0.04% 0.01% 0.04% 0.02% 0.04% 0.04% 0.04% 0.05% 0.04%
-----------------------------------------------------------------------------------------------------
Computer processing
fees................... 0.04% 0.00% 0.00% 0.00% 0.01% 0.00% 0.01% 0.00% 0.02% 0.00% 0.04% 0.00%
-----------------------------------------------------------------------------------------------------
Amortization of deferred
organization costs..... 0.00% 0.00% 0.00% 0.02% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
-----------------------------------------------------------------------------------------------------
Other expenses.......... 0.09% 0.02% 1.75% 0.02% 0.02% 0.02% 0.02% 0.02% 0.10% 0.02% 0.07% 0.02%
-----------------------------------------------------------------------------------------------------
2% redemption........... -- -- -- -- -- -- -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------
Expenses before
reimbursement*......... 1.95% 1.67% 3.00% 2.27% 0.95% 1.28% 0.98% 1.17% 1.89% 1.66% 1.99% 1.95%
-----------------------------------------------------------------------------------------------------
Fund expense
reimbursement.......... 0.00% 0.00% 0.50% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
-----------------------------------------------------------------------------------------------------
Expense after
reimbursement.......... 1.95% 1.67% 2.50% 2.27% 0.95% 1.28% 0.98% 1.17% 1.89% 1.66% 1.99% 1.95%
</TABLE>

* May not reflect exactly the sum of the itemized expenses due to the effects
of rounding.

15
<PAGE>

<TABLE>
<CAPTION>
Worldwide
Small Troika Emerging Global Money
Silver Cap Asia Russia Markets Income Market
-----------------------------------------------------------------------------------------------------
Cur- Pro- Cur- Pro- Cur- Pro- Cur- Pro- Cur- Pro- Cur- Pro-
Expenses rent posed rent posed rent posed rent posed rent posed rent posed
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment advisory..... 1.00% 1.00% 1.25% 1.25% 1.25% 1.25% 1.00% 1.00% 1.00% 1.00% 0.50% 0.50%
-----------------------------------------------------------------------------------------------------
Custodian expenses...... 0.15% 0.15% 0.31% 0.46% 0.83% 0.83% 0.26% 0.33% 0.13% 0.11% 0.02% 0.02%
-----------------------------------------------------------------------------------------------------
Transfer agent.......... 0.37% 0.15% 0.37% 0.15% 0.22% 0.15% 0.13% 0.15% 0.13% 0.15% 0.21% 0.15%
-----------------------------------------------------------------------------------------------------
Administrative service
fees................... 0.00% 0.10% 0.00% 0.10% 0.00% 0.10% 0.00% 0.10% 0.00% 0.10% 0.00% 0.00%
-----------------------------------------------------------------------------------------------------
Professional fees....... 0.15% 0.02% 0.26% 0.02% 0.17% 0.02% 0.04% 0.02% 0.11% 0.02% 0.03% 0.02%
-----------------------------------------------------------------------------------------------------
Distribution expenses... 0.00% 0.25% 0.00% 0.25% 0.17% 0.25% 0.24% 0.25% 0.12% 0.25% 0.00% 0.00%
-----------------------------------------------------------------------------------------------------
Printing and mailing.... 0.13% 0.04% 0.24% 0.04% 0.16% 0.04% 0.08% 0.04% 0.10% 0.04% 0.06% 0.04%
-----------------------------------------------------------------------------------------------------
Directors fees and
expenses............... 0.06% 0.01% 0.13% 0.01% 0.13% 0.01% 0.02% 0.01% 0.05% 0.01% 0.02% 0.01%
-----------------------------------------------------------------------------------------------------
Accounting and
recordkeeping
expenses............... 0.08% 0.02% 0.09% 0.02% 0.06% 0.02% 0.07% 0.02% 0.09% 0.02% 0.08% 0.02%
-----------------------------------------------------------------------------------------------------
Registration fees....... 0.05% 0.04% 0.17% 0.04% 0.06% 0.04% 0.03% 0.04% 0.05% 0.04% 0.02% 0.04%
-----------------------------------------------------------------------------------------------------
Computer processing
fees................... 0.03% 0.00% 0.07% 0.00% 0.04% 0.00% 0.02% 0.00% 0.03% 0.00% 0.02% 0.00%
-----------------------------------------------------------------------------------------------------
Amortization of deferred
organization costs..... 0.00% 0.00% 0.09% 0.09% 0.06% 0.06% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
-----------------------------------------------------------------------------------------------------
Other expenses.......... 0.07% 0.02% 0.11% 0.02% 0.10% 0.02% 0.07% 0.02% 0.06% 0.02% 0.05% 0.02%
-----------------------------------------------------------------------------------------------------
2% redemption........... -- -- -- -- -1.05% -1.05% -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------
Expenses before
reimbursement*......... 2.11% 1.80% 3.09% 2.45% 2.20% 1.74% 1.97% 1.98% 1.87% 1.76% 1.00% 0.82%
-----------------------------------------------------------------------------------------------------
Fund expense
reimbursement.......... 0.00% 0.00% 0.59% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
-----------------------------------------------------------------------------------------------------
Expense after
reimbursement.......... 2.11% 1.80% 2.50% 2.45% 2.20% 1.74% 1.97% 1.98% 1.87% 1.76% 1.00% 0.82%
</TABLE>

* May not reflect exactly the sum of the itemized expenses due to the effects
of rounding.

Like each Current Agreement, each Proposed Agreement provides that Pilgrim
is not subject to liability to the Fund, and shall be indemnified by the Fund,
for any act or omission in the course of, or connected with, rendering services
under the Agreement, except by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties under the
Agreement. Like each Current Agreement, each Proposed Agreement provides that
Pilgrim is not subject to liability to the Fund, and shall be indemnified by
the Fund, for any act or omission in the course of, or connected with,
rendering services under the Agreement, except by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties under the Agreement. In addition, Pilgrim would not be
subject to liability to the Fund, and would be indemnified by the Fund, for any
act or omission in the course of, or in connection with, a Sub-Adviser's
rendering services under a Sub-Adviser Agreement, except by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of its
obligations and duties under the Agreement.

Each Proposed Agreement may be terminated by a Fund without penalty upon not
less than 60 days' notice by the Board of Directors/Trustees or by a vote of
the shareholders of a majority of the Fund's outstanding shares voting as a
single class, or upon not less than 60 days' notice by Pilgrim. Each Proposed
Agreement would terminate automatically in the event of their "assignment" (as
defined in the 1940 Act).

C. Information About Pilgrim:

Organized in December 1994, Pilgrim is registered as an investment adviser
with the Securities and Exchange Commission. As of April 30, 2000, Pilgrim
managed over $16.2 billion in mutual funds and institutional accounts.

Pilgrim is an indirect, wholly owned subsidiary of ReliaStar, and is located
at 40 North Central Avenue, Suite 1200, Phoenix, Arizona 85004-4424. 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 finance
education. Additional information regarding Pilgrim can be found in Part 4 of
this proxy statement.

16
<PAGE>

The individuals listed below, except for Mr. Underwood, currently are the
portfolio managers for one or more of the Funds and are expected to be the
portfolio mangers if the Proposed Agreements are approved by shareholders and
become effective.

Alan H. Wapnick: Mr. Wapnick will be a member of the investment management
team that manages Pilgrim Global Corporate Leaders Fund and Pilgrim Global
Technology Fund and the lead manager for Pilgrim Growth and Income Fund. He is
Senior Vice President, Director of Domestic Investment Equity Strategy of LMC.
Prior to joining LMC in 1986, Mr. Wapnick was an equity analyst with Merrill
Lynch, J.&W. Seligman, Dean Witter and most recently Union Carbide Corporation.
Mr. Wapnick graduated from Dartmouth College and received an M.B.A. from
Columbia University.

Richard T. Saler: Mr. Saler will be a member of the investment management
team that manages the Pilgrim Global Corporate Leaders Fund, Pilgrim Global
Technology Fund and Pilgrim Worldwide Emerging Markets Fund. He will be the
lead manager of an investment management team for Pilgrim International Fund.
Mr. Saler is Senior Vice President, Director of International Investment
Strategy of LMC and is responsible for international investment analysis and
portfolio management at LMC. He has thirteen years of investment experience.
Mr. Saler first joined LMC in 1986. In 1991 he was a strategist with Nomura
Securities and rejoined LMC in 1992. Mr. Saler graduated from New York
University with a B.S. in Marketing and from New York University's Graduate
School of Business Administration with an M.B.A. in Finance.

Philip A. Schwartz, CFA: Mr. Schwartz also will be a member of an investment
management team that manages Pilgrim Global Corporate Leaders Fund, Pilgrim
Global Technology Fund, Pilgrim Worldwide Emerging Markets Fund and Pilgrim
International Fund. Mr. Schwartz is a Vice President at LMC, and is a Chartered
Financial Analyst and a member of the New York Society of Security Analysts. He
is responsible for international investment analysis and portfolio management
at LMC and has twelve years of investment experience. Prior to joining LMC in
1993, Mr. Schwartz was Vice President of European Research Sales with Cheuvreux
De Virieu in Paris and New York, serving the institutional market. Prior to
Cheuvreux, he was affiliated with Olde and Co. and Kidder, Peabody as a
stockbroker. Mr. Schwartz earned his B.A. and M.A. degrees from Boston
University.

Denis P. Jamison, CFA: Mr. Jamison will manage Pilgrim GNMA Income Fund,
Lexington Money Market Trust and Pilgrim Global Income Fund. Mr. Jamison is
Senior Vice President and Director of Fixed Income Strategy of LMC and is
responsible for fixed-income portfolio management. He is a Chartered Financial
Analyst and a member of the New York Society of Security Analysts. Prior to
joining LMC in 1981, Mr. Jamison spent nine years at Arnold Bernhard & Company,
an investment counseling and financial services organization. At Bernhard, he
was a Vice President supervising the security analyst staff and managing
investment portfolios. He is a specialist in government, corporate and
municipal bonds. Mr. Jamison graduated from the City College of New York with a
B.A. in Economics.

Roseann G. McCarthy: Ms. McCarthy will co-manage Pilgrim GNMA Income Fund
and Lexington Money Market Trust. Ms. McCarthy is an Assistant Vice President
of LMC. Prior to joining the Fixed Income Department at LMC in 1997, she was
Mutual Fund Marketing and Research Coordinator. Prior to 1995, Ms. McCarthy was
Fund Statistician and a Shareholder Service Representative for the Lexington
Funds. Ms. McCarthy is a graduate of Hofstra University with a B.B.A. in
Marketing and has an M.B.A. in Finance from Seton Hall University.

James A. Vail, CFA: Mr. Vail will manage Pilgrim Goldfund and Pilgrim Silver
Fund. Mr. Vail is a Vice President of LMC responsible for precious metals
analysis and portfolio management. He is a Chartered Financial Analyst, a
member of the New York Society of Security Analysts and has 25 years of
investment experience. Prior to joining LMC in 1991, Mr. Vail held investment
research positions with Chemical Bank, Oppenheimer & Co., Robert Fleming Inc.
and most recently, Beacon Trust Company, where he was a Senior Investment
Analyst. Mr. Vail is a graduate of St. Peter's College with a B.S. degree and
holds an M.B.A. in Finance from Seton Hall University.

17
<PAGE>

All of the portfolio managers except Mr. Wapnick, Mr. Jamison, Mr. Vail and
Ms. McCarthy have entered into employment contracts with Pilgrim. Stratos will
be terminating its investment management business, and Messrs. Viegas and Zaidi
will become employees of Pilgrim.

For information on the management of Lexington Small Cap Asia Growth Fund,
Inc. and Lexington Troika Dialog Russia Fund, Inc., please refer to Proposals
4a, 5a, and 6a, respectively.

D. Evaluation by the Board of Directors/Trustees:

In approving the Proposed Agreements the Boards considered a number of
factors, including: (1) the performance of the mutual funds to which Pilgrim
currently serves as investment adviser; (2) the depth and experience of Pilgrim
and the financial strength of ReliaStar; (3) the fact that the advisory fees
imposed under the Proposed Agreements are identical to those imposed by LMC;
(4) in the case of the sub-advised Funds except Lexington Global Technology
Fund and Lexington Worldwide Emerging Markets Fund, the fact that the sub-
advisers will remain unchanged; (5) the fact that after the transaction, many
of the current portfolio managers will remain unchanged; (6) Pilgrim's
representation that it will not seek to increase the rate of advisory fees paid
by the Funds for a period of at least two years, and that it will keep any
existing expense limitation arrangements in effect for a period of at least two
years; (7) the projected expense ratios for each Fund; (8) the commonality of
terms of the Proposed Agreements and Current Agreements; and (9) the fairness
of the compensation payable to Pilgrim under the Proposed Agreements in light
of the services provided. In addition, the Boards of Directors/Trustees,
including the Independent Directors/Trustees, considered various materials and
representations provided by Pilgrim, including the representation that
shareholders having accounts with the Funds at the time of the completion of
the Lexington Acquisition will continue to be able to purchase shares of those
Funds and any other mutual fund within the Pilgrim complex at net asset value,
without any sales load, so long as the account remains open. The
Director/Trustees also were advised by independent legal counsel with respect
to these matters.

Based upon their review, the Boards have determined that the Proposed
Agreements are in the best interests of the Funds and their shareholders.
Accordingly, after consideration of the factors described above, and such other
factors and information it considered relevant, the Board of Directors/Trustees
of each Fund including the unanimous vote of the Independent
Directors/Trustees, approved the Proposed Agreements and recommended that each
Fund's shareholders vote for the Proposed Agreement.

E. Vote Required:

Approval of the Proposed Agreements requires the affirmative vote of a
"majority of the outstanding voting securities" of the Fund, which, for this
purpose, means the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the Fund, or (2) 67% or more of the shares of the Fund
present at the Meeting, if more than 50% of the outstanding shares of the Fund
are represented at the Meeting in person or by proxy.

F. Board Recommendation:

The Board of Directors/Trustees of each Fund recommends that you VOTE FOR
this Proposal. Should any Proposed Agreement not be approved by shareholders,
or the Lexington Acquisition not be completed, the Current Agreement will
continue in effect. Should any Proposed Agreement not be approved by
shareholders, and the Lexington Acquisition is completed, Pilgrim may
nonetheless serve as investment adviser to that Fund at the lesser of the fees
that would be paid under the Proposed Agreement of Pilgrim's cost to render
services to the Fund until such time as the Directors/Trustees determine an
appropriate course of action. Under the agreement between ReliaStar and LGAM,
the Lexington Acquisition is conditioned upon approval of the Proposed
Agreements representing at least 90% of the aggregate assets of the Funds and
the approval by shareholders of certain specific Funds.

18
<PAGE>

PROPOSAL 3

THE APPROVAL OF A NEW INVESTMENT MANAGEMENT AGREEMENT TO
TAKE EFFECT UPON THE COMPLETION OF THE PROPOSED ACQUISITION OF
RELIASTAR FINANCIAL CORP. BY ING GROEP N.V.

A. General Information:

As described earlier, certain transactions may result in the "assignment" of
an investment company's investment advisory agreement. When an assignment
occurs, the agreement terminates. The ReliaStar Acquisition may constitute a
"change of control" of the adviser for purposes of the 1940 Act, which would
cause the "assignment" termination of those investment management agreements
between the Funds and Pilgrim approved by you under Proposal 2 (the "First
Pilgrim Management Agreements").

The Independent Directors/Trustees reviewed the potential assignment and
termination of the First Pilgrim Management Agreements in detail at their
meetings held on May 22 and May 23, 2000. On May 23, 2000 the full Boards,
including a majority of the Independent Directors/Trustees, after giving due
consideration to the ReliaStar Acquisition, voted to approve a second new
investment management agreement between each Fund and Pilgrim (the "Second
Pilgrim Management Agreements") subject to the approval of Fund shareholders.
The Second Pilgrim Management Agreements would become effective upon the
closing of the ReliaStar Acquisition.

If approved by shareholders, the Second Pilgrim Management Agreements will
remain in effect for two years from the date they take effect and, unless
terminated early, would continue from year to year thereafter, provided that
each such continuance is approved annually with respect to each Fund (i) by the
applicable Fund's Board of Directors/Trustees, or by the vote of a majority of
the outstanding voting securities of the particular Fund, and in either case,
(ii) by a majority of the Fund's Independent Directors/Trustees who are also
not parties to the Second Pilgrim Management Agreements.

B. The Terms of the Proposed Agreements:

The terms of the Second Pilgrim Management Agreements will be identical to
the terms of the First Pilgrim Management Agreements. There will be no change
in fees, and the agreements will be the same in all respects. In addition, it
is expected that the same portfolio mangers who would be responsible for your
Funds under the First Pilgrim Management Agreements would continue to be
responsible for those same Funds under the Second Pilgrim Management
Agreements.

C. Evaluation by the Board of Directors/Trustees:

In approving the Second Pilgrim Management Agreements, the Boards considered
a number of factors specific to the acquisition of ReliaStar by ING. Among
others, these factors included: (1) the substantially greater financial
strength of ING and the overall impact the ReliaStar Acquisition would have on
Pilgrim and, ultimately, the Funds; (2) ING's representation that it will abide
by the agreement made by ReliaStar to LGAM, which was communicated to the
Directors/Trustees, that advisory fees imposed under the First Pilgrim
Management Agreements will be identical to those fees currently imposed by LMC
and that Fund shareholders will be able to continue to purchase shares of the
Funds and other mutual funds in the Pilgrim complex at net asset value, without
any sales load; (3) ING's representation that Pilgrim will not seek to increase
the rate of advisory fees paid by the Funds for a period of at least two years
from the effective date of the First Pilgrim Management Agreements, and that
all existing expense limitation arrangements will remain in effect for a period
of at least two years from the effective date of the First Pilgrim Management
Agreements; (4) the representation by ING that after the ReliaStar Acquisition,
Pilgrim will remain the investment adviser to the Funds, (5) representation
that ING, after the ReliaStar Acquisition, will make every reasonable effort to
keep Pilgrim senior management and investment personnel in place; and that ING
will not intentionally affect the plans for portfolio management, marketing and
fund administration discussed with the Boards by Pilgrim including the intent
to retain many of the current Fund portfolio managers; and (7) the Board's
understanding

19
<PAGE>

that ING will make every reasonable effort to ensure that the level and quality
of service to the Funds and their shareholders will not be diminished by the
addition to Pilgrim of assets currently managed by ING.

Based upon their reviews, the Boards have determined that the Second Pilgrim
Management Agreements are in the best interest of the Funds and their
shareholders. Accordingly, after consideration of all the factors mentioned
above and such other factors and information it considered relevant, and
particularly the fact that the Second Pilgrim Management Agreements would be
identical to the First Pilgrim Management Agreements and that there would be no
change in the fees paid to Pilgrim, the Board of Directors/Trustees of each
Fund unanimously approved the Second Pilgrim Management Agreements to take
effect upon the completion of the ReliaStar Acquisition and recommended that
each Fund's shareholders vote for the Second Pilgrim Management Agreements.

D. Vote Required:

Approval of the Second Pilgrim Management Agreements requires the
affirmative vote of a "majority of the outstanding voting securities" of the
Fund, which, for this purpose, means the affirmative vote of the lesser of (1)
more than 50% of the outstanding shares of the Fund, or (2) 67% or more of the
shares of the Fund present at the Meeting, if more than 50% of the outstanding
shares of the Fund are represented at the Meeting in person or by proxy.

E. Board Recommendation:

The Board of Directors/Trustees of each Fund recommends that you VOTE FOR
this Proposal. Should the ReliaStar Acquisition not be completed, the First
Pilgrim Management Agreements will continue in effect, so long as they were
approved by shareholders under Proposal 2. Should any Second Pilgrim Management
Agreement not be approved by shareholders, and the ReliaStar Acquisition is
completed, the First Pilgrim Management Agreement would terminate. Pilgrim
could nonetheless continue to serve as investment adviser to that Fund at the
lesser of the fees that would be paid under the proposed Second Pilgrim
Management Agreement or Pilgrim's cost to render services to the Fund until
such time as the Directors/Trustees determine an appropriate course of action.

PROPOSAL 4a

THE APPROVAL OF A NEW INVESTMENT SUB-ADVISER AGREEMENT
FOR LEXINGTON SMALL CAP ASIA GROWTH FUND, INC. TO TAKE EFFECT
UPON THE COMPLETION OF THE PROPOSED ACQUISITION OF
LEXINGTON GLOBAL ASSET MANAGERS, INC BY RELIASTAR FINANCIAL CORP.
(Only shareholders of Lexington Small Cap Asia Growth Fund, Inc. will consider
and vote on this proposal.)

A. General Information:

Currently, LMC has engaged Crosby Asset Management (US) Inc. ("Crosby") to
assist it in the management of Lexington Small Cap Asia Growth Fund, Inc. (the
"Current Sub-Adviser Agreement"). If the Lexington Acquisition is completed,
there may be an "assignment" of the Current Sub-Adviser Agreement. In order to
ensure continuity in the management of the Fund, Pilgrim has agreed to enter
into an agreement with Crosby (the "Proposed Sub-Adviser Agreement") if
shareholders of the Fund approve the Investment Management Agreement with
Pilgrim. Under the Proposed Sub-Adviser Agreement, Crosby would provide the
same services it currently provides under the agreement with LMC. There will be
no change in the sub-advisory fee. If the Proposed Sub-Adviser Agreement is
approved by shareholders, it will become effective upon the closing of the
Lexington Acquisition. (The form of the Proposed Sub-Adviser Agreement is
attached hereto as Exhibit B.)

The Independent Directors met on April 11, April 17 and April 18, 2000, to
consider the Lexington Acquisition and, among other things, the Proposed Sub-
Adviser Agreement and the impact the Lexington

20
<PAGE>

Acquisition would have on the Current Sub-Adviser Agreement. On April 18, 2000,
the Fund's full Board of Directors, including all of the Independent Directors,
approved the Proposed Sub-Adviser Agreement between Pilgrim and Crosby. The
Board also directed that the Proposed Sub-Adviser Agreement be submitted to
shareholders for approval at the Meeting.

If approved by shareholders, the Proposed Sub-Adviser Agreement will remain
in effect for two years from the date it takes effect and unless terminated
early, will continue from year to year thereafter, provided that each such
continuance is approved annually (i) by the Fund's Board of Directors, or by
the vote of a majority of the outstanding voting securities of the Fund, and in
either case, (ii) by a majority of the Fund's Independent Directors who are
also not parties to the Proposed Sub-Adviser Agreement.

B. The Terms of the Proposed Sub-Adviser Agreement:

Under the Proposed Sub-Adviser Agreement, Crosby would act as Sub-Adviser to
the Fund. In this capacity, Crosby, subject to the supervision of Pilgrim and
the Directors of the Fund, would provide a continuous investment program of
evaluation, investment, sales, and reinvestment of the Fund's assets. The
Proposed Sub-Adviser Agreement is the same in many respects to the Current Sub-
Adviser Agreement, and even though the fee that would be paid by Pilgrim to
Crosby would be calculated differently under the Proposed Sub-Adviser
Agreement, it is effectively the same as the fee paid under the Current Sub-
Adviser Agreement. The Current Sub-Adviser Agreement provides that the sub-
adviser be paid a percentage of the fee paid by the Fund to LMC after any
reimbursements LMC might make to the Fund. Under the Proposed Sub-Adviser
Agreement, the sub-adviser is paid a specific fee which is then subject
proportionately to any reimbursement to the Fund under a separate Expense
Limitation Agreement.

The Proposed Sub-Advisory Agreement provides that Crosby will not be liable
for any act or omission related to any portfolio for which Crosby is not the
sub-adviser nor for any act or omission related to any services provided except
by reason of willful misfeasance, bad faith or gross negligence in the
performance of those duties, or by reason of reckless disregard of its
obligations and duties under the Proposed Sub-Adviser Agreement. The Proposed
Sub-Adviser Agreement can be terminated by Pilgrim on 60 days' notice to
Crosby; by the Fund, the Fund's Board of Directors or by vote of the
shareholders on 60 days' notice; or by Crosby on three months' notice.

The Current Sub-Adviser Agreement became effective on June 17, 1995, and was
last approved by shareholders on June 17, 1995. During the Fund's last fiscal
year, Crosby received $83,626 from LMC under the Current Sub-Adviser Agreement.

The Fund is expected to be managed by a portfolio management team consisting
of investment professionals from both Pilgrim and Crosby. The lead manager, who
is currently the lead manager for the Fund, will be:

Christina Lam: Ms. Lam is Vice President of Crosby and will be Portfolio
Manager of the Pilgrim Small Cap Asia Growth Fund. Ms. Lam joined Crosby Asset
Management in 1991. After graduating with a Law Degree with Honors from Warwick
University, she qualified as a barrister from Lincoln's Inn in London. In 1987
she joined Schroder Securities Limited in Hong Kong as an investment analyst,
where her coverage included the utilities, industrials and retail sectors and
conglomerates.

Crosby (32/F Asia Pacific Finance Tower, Citibank Tower, Citibank Plaza, 3
Garden Road, Central, Hong Kong) was established on October 4, 1990 in the
British Virgin Islands. Crosby manages assets and provides investment advice
for investment companies and institutional private accounts around the world
including the United States.

C. Adviser Fees:

21
<PAGE>

investment sub-advisory fee of 0.625% of the Fund's average daily net assets.
The investment sub-advisory fee would be paid by Pilgrim, not the Fund.

D. Board Considerations:

In considering whether to recommend that the Proposed Sub-Adviser Agreement
be approved by shareholders, the Board of Directors considered, among other
things, the qualifications of Crosby's professional staff and information
related to Crosby's past performance. In addition, the Board considered the
importance of maintaining continuity of management should Pilgrim become the
Fund's investment adviser. Moreover, the Board noted that the sub-advisory fees
effectively would remain the same and that the Proposed Sub-Adviser Agreement
would be materially the same as the Current Sub-Adviser Agreement.

E. Required Vote:

Approval of the Proposed Sub-Adviser Agreement will require the affirmative
vote of a "majority of the outstanding voting securities" of the Fund, which,
for this purpose, means the affirmative vote of the lesser of (1) more than 50%
of the outstanding shares of the Fund, or (2) 67% or more of the shares of the
Fund present at the Meeting, if more than 50% of the outstanding shares of the
Fund are represented at the Meeting in person or by proxy.

F. Board Recommendation:

The Board of Directors recommends that you VOTE FOR approval of the Proposed
Sub-Adviser Agreement between Pilgrim and Crosby. If the Proposed Sub-Adviser
Agreement is not approved, the Directors will determine what action, if any,
should be taken. The Directors may consider proposing a different sub-adviser,
or having no sub-adviser. The effectiveness of the Proposed Sub-Adviser
Agreement, if approved by shareholders, is conditioned on the completion of the
Lexington Acquisition and the approval of the First Pilgrim Management
Agreement.

PROPOSAL 4b

THE APPROVAL OF A NEW INVESTMENT SUB-ADVISER AGREEMENT FOR THE
LEXINGTON SMALL CAP ASIA GROWTH FUND, INC. TO TAKE EFFECT UPON
THE COMPLETION OF THE PROPOSED ACQUISITION OF
RELIASTAR FINANCIAL CORP. BY ING GROEP N.V.

(Only shareholders of Lexington Small Cap Asia Growth Fund, Inc. will consider
and vote on this proposal.)

A. General Information:

Should shareholders of Lexington Small Cap Asia Growth Fund, Inc. approve
the sub-advisory agreement between Pilgrim and Crosby as proposed in Proposal
4a, that agreement (the "First Pilgrim Sub-Adviser Agreement") would become
effective upon the completion of the Lexington Acquisition. The First Pilgrim
Sub-Adviser Agreement, however, may terminate upon the completion of the
ReliaStar Acquisition. In order to ensure continuity in the management of the
Fund, Pilgrim will enter into a second agreement with Crosby (the "Second
Pilgrim Sub-Adviser Agreement") to take effect upon the completion of the
ReliaStar Acquisition if shareholders of the Fund approve the Second Pilgrim
Management Agreement with Pilgrim. Under the Second Pilgrim Sub-Adviser
Agreement, Crosby would provide the same services it currently provides under
the agreement with LMC and it proposes to provide under the First Pilgrim Sub-
Adviser Agreement. As with the First Pilgrim Sub-Adviser Agreement, there would
be no change in the sub-advisory fee. If the Second Pilgrim Sub-Adviser
Agreement is approved by shareholders, it would become effective upon the
closing of the ReliaStar Acquisition.

22
<PAGE>

the Independent Directors, unanimously approved the Second Pilgrim Sub-Adviser
Agreement between Pilgrim and Crosby. The Board also directed that the Second
Pilgrim Sub-Adviser Agreement be submitted to shareholders for approval at the
Meeting.

If approved by shareholders, the Second Pilgrim Sub-Adviser Agreement would
remain in effect for two years from the date it takes effect and, unless
terminated early, would continue from year to year thereafter, provided that
each such continuance is approved annually (i) by the Fund's Board of
Directors, or by the vote of a majority of the outstanding voting securities of
the Fund, and in either case, (ii) by a majority of the Fund's Independent
Directors who are also not parties to the Second Pilgrim Sub-Adviser Agreement.

B. The Terms of the Second Pilgrim Sub-Adviser Agreement:

The terms of the Second Pilgrim Sub-Adviser Agreement would be identical to
the terms of the First Pilgrim Sub-Adviser Agreement, including the amount of
the fee paid to Crosby. In addition, it is expected that the Fund would be
managed by the same portfolio management team with the same lead manager as is
anticipated under the First Pilgrim Sub-Adviser Agreement.

C. Board Considerations:

In considering whether to recommend that the Second Pilgrim Sub-Adviser
Agreement be approved by shareholders, the Board of Directors considered all of
the same factors it considered in approving the First Pilgrim Sub-Adviser
Agreement. In addition, the Board took into account the representations by
Pilgrim that the terms of the Second Pilgrim Sub-Adviser Agreement would be
identical to the First Pilgrim Sub-Adviser Agreement and that there would be no
change in the fee paid to Crosby.

D. Required Vote:

Approval of the Second Pilgrim Sub-Adviser Agreement requires the
affirmative vote of a "majority of the outstanding voting securities" of the
Fund, which, for this purpose, means the affirmative vote of the lesser of (1)
more than 50% of the outstanding shares of the Fund, or (2) 67% or more of the
shares of the Fund present at the Meeting, if more than 50% of the outstanding
shares of the Fund are represented at the Meeting in person or by proxy.

E. Board Recommendation:

The Board of Directors recommends that you VOTE FOR approval of the Second
Pilgrim Sub-Adviser Agreement between Pilgrim and Crosby. If the Second Pilgrim
Sub-Adviser Agreement is not approved, the Directors will determine what action
should be taken. The Directors may consider proposing a different sub-adviser,
or having no sub-adviser. The effectiveness of the Second Pilgrim Sub-Adviser
Agreement, if approved by shareholders, is conditioned on the completion of the
ReliaStar Acquisition and the approval of the Second Pilgrim Management
Agreement.

23
<PAGE>

PROPOSAL 5a

THE APPROVAL OF A NEW INVESTMENT SUB-ADVISER AGREEMENT
FOR THE LEXINGTON SMALL CAP ASIA GROWTH FUND, INC. TO TAKE EFFECT
UPON THE ACQUISITION OF CERTAIN REGULATORY APPROVALS AND
THE COMPLETION OF THE PROPOSED ACQUISITION OF
LEXINGTON GLOBAL ASSET MANAGERS, INC BY RELIASTAR FINANCIAL CORP.

(Only shareholders of Lexington Small Cap Asia Growth Fund, Inc. will consider
and vote on this proposal.)

A. General Information:

In September 1999, Crosby Asset Management (US) Inc. ("Crosby"), the sub-
adviser to Lexington Small Cap Asia Growth Fund, Inc under an agreement with
LMC, informed LMC that it intended to no longer provide investment advisory
services to investment companies and that the portfolio manager for the Fund
would become an employee of Insinger Asset Management N.V. ("Insinger"). The
transfer of advisory functions was to take place only after Insinger received
all necessary governmental authorizations to provide advisory services in the
Asia region. In anticipation of this, the Board of Directors of the Fund, at a
meeting held on September 14, 1999, unanimously approved a new Sub-Advisory
Agreement with Insinger under which Insinger would replace Crosby as sub-
adviser to the Fund upon the dissolution of Crosby (the "Insinger Agreement").
The Insinger Agreement was to be proposed to shareholders at a meeting to be
scheduled.

Pilgrim has agreed that if shareholders of the Fund approve the Investment
Management Agreement with Pilgrim and the Lexington Acquisition is completed,
it would enter into an agreement with Insinger to take effect upon the
dissolution of Crosby (the "Proposed Sub-Adviser Agreement," the form of which
is attached hereto as Exhibit B). Both the Board and Pilgrim understand that
the effectiveness of this agreement is contingent upon Insinger receiving the
necessary governmental authorizations.

The Independent Directors met on April 11, April 17 and April 18, 2000, to
consider the Lexington Acquisition and, among other things, the Proposed Sub-
Adviser Agreement and the impact the Lexington Acquisition would have on the
Current Sub-Adviser Agreement. On April 18, 2000, the Fund's full Board of
Directors, including all of the Independent Directors, approved the Proposed
Sub-Adviser Agreement between Pilgrim and Insinger. The Board also directed
that the Proposed Sub-Adviser Agreement be submitted to shareholders for
approval at the Meeting.

Under the Proposed Sub-Adviser Agreement, Insinger would provide
substantially the same services Crosby currently provides under the agreement
with LMC. The fee to be paid to Insinger would be the same as that paid to
Crosby. Furthermore, upon the dissolution of Crosby Christina Lam, the current
portfolio manager of the Fund, would become an employee of Insinger, and is
expected to remain the portfolio manager of the Fund (see Proposal 4a above for
Ms. Lam's biography). If the Proposed Sub-Adviser Agreement is approved by
shareholders, it would become effective upon the dissolution of Crosby, the
closing of the Lexington Acquisition and the acquisition by Insinger of all
necessary regulatory approvals.

B. Terms of the Proposed Sub-Adviser Agreement:

Under the Proposed Sub-Adviser Agreement, Insinger would act as Sub-Adviser
to the Fund. In this capacity, Insinger, subject to the supervision of Pilgrim
and the Directors of the Fund, would provide a continuous investment program of
evaluation, investment, sales, and reinvestment of the Fund's assets. The

24
<PAGE>

Proposed Sub-Adviser Agreement is the same in many respects to the Current Sub-
Adviser Agreement, including the fee that would be paid by Pilgrim to Insinger.
It provides that Insinger would not be liable for any act or omission related
to any portfolio for which Insinger is not the sub-adviser nor for any act or
omission related to any services provided except by reason of willful
misfeasance, bad faith or gross negligence in the performance of those duties,
or by reason of reckless disregard of its obligations and duties under the
Proposed Sub-Adviser Agreement. The Proposed Sub-Adviser Agreement can be
terminated by Pilgrim on 60 days' notice to Insinger; by the Fund, the Fund's
Board of Directors or by vote of the shareholders on 60 days' notice; or by
Insinger on three months' notice.

Insinger is part of Insinger S.A., the holding company of a private banking
group engaged in the provision of asset management, securities trading, private
banking, trust and fiduciary services. The Insinger Group manages approximately
$3 billion of assets for a variety of private clients, pension funds, insurance
companies and semi-government agencies. Insinger is responsible for segregated
institutional portfolio management and manages both Luxembourg and Netherlands
based ranges of mutual funds for some 5,000 clients around the world. It is
located at 1605 Wheelock House, 20 Pedder Street, Central, Hong Kong.

C. Adviser Fees:

As compensation for its services as investment adviser, the Fund would pay
Pilgrim a monthly advisory fee at the annual rate of 1.25% of the average daily
net assets of the Fund. Pilgrim would pay Insinger an annual investment sub-
advisory fee of 0.625% of the Fund's average daily net assets. The investment
sub-advisory fee is paid by Pilgrim, not the Fund.

D. Board Considerations:

In considering whether to recommend that the Proposed Sub-Adviser Agreement
be approved by shareholders, the Board of Directors considered, among other
things, the general qualifications of Insinger as an investment adviser and the
fact that Ms. Lam would remain the lead portfolio manager of the Fund. In
addition, the Board requested and evaluated other information from Insinger
which the Board deemed to be relevant. Moreover, the Board noted that the
Fund's portfolio manager would remain the same, that the sub-advisory fees
would remain the same and that the Proposed Sub-Adviser Agreement would be
materially the same as the agreement currently with Crosby and which is
proposed with Insinger.

E. Required Vote:

Approval of the Proposed Sub-Adviser Agreement requires the affirmative vote
of a "majority of the outstanding voting securities" of the Fund, which, for
this purpose, means the affirmative vote of the lesser of (1) more than 50% of
the outstanding shares of the Fund, or (2) 67% or more of the shares of the
Fund present at the Meeting, if more than 50% of the outstanding shares of the
Fund are represented at the Meeting in person or by proxy.

F. Board Recommendation:

The Board of Directors recommends that you VOTE FOR approval of the Proposed
Sub-Adviser Agreement between Pilgrim and Insinger. If the Proposed Sub-Adviser
Agreement is not approved, the Directors will determine what action, if any,
should be taken. The Directors may consider proposing a different sub-adviser,
or having no sub-adviser. The effectiveness of the Proposed Sub-Adviser
Agreement, if approved by shareholders, is conditioned on the receipt by
Insinger of authority to conduct business in Hong Kong, and the completion of
the Lexington Acquisition and the approval of the First Pilgrim Management
Agreement.

25
<PAGE>

PROPOSAL 5b

THE APPROVAL OF A NEW INVESTMENT SUB-ADVISER AGREEMENT FOR
LEXINGTON SMALL CAP ASIA GROWTH FUND, INC. TO TAKE EFFECT UPON THE ACQUISITION
OF CERTAIN REGULATORY APPROVALS AND THE COMPLETION OF THE
PROPOSED ACQUISITION OF RELIASTAR FINANCIAL CORP. BY ING GROEP N.V.

(Only shareholders of Lexington Small Cap Asia Growth Fund, Inc. will consider
and vote on this proposal.)

A. General Information:

Should shareholders of Lexington Small Cap Asia Growth Fund, Inc. approve
the sub-advisory agreement between Pilgrim and Insinger Asset Management N.V.
("Insinger") as proposed in Proposal 5a, that agreement (the "First Pilgrim
Sub-Adviser Agreement") would become effective upon the completion of the
Lexington Acquisition. The First Pilgrim Sub-Adviser Agreement, however, may
terminate upon the completion of the ReliaStar Acquisition. In order to ensure
continuity in the management of the Fund, Pilgrim would enter into a second
agreement with Insinger (the "Second Pilgrim Sub-Adviser Agreement") to take
effect upon the completion of the ReliaStar Acquisition if shareholders of the
Fund approve the Second Pilgrim Management Agreement with Pilgrim. Under the
Second Pilgrim Sub-Adviser Agreement, Insinger would provide the same services
it intended to provide under the agreement with LMC and it proposes to provide
under the First Pilgrim Sub-Adviser Agreement. As with the First Pilgrim Sub-
Adviser Agreement, there would be no change in the sub-advisory fee. If the
Second Pilgrim Sub-Adviser Agreement is approved by shareholders, it would
become effective upon the closing of the ReliaStar Acquisition. The
effectiveness of the Second Pilgrim Sub-Adviser Agreement with Insinger is
further conditioned upon the dissolution of Crosby and the acquisition by
Insinger of necessary regulatory approvals.

The Independent Directors reviewed the Second Pilgrim Sub-Adviser Agreement
in detail at its meetings on May 22 and May 23, 2000. On May 23, 2000, the
Fund's full Board of Directors, including a majority of the Independent
Directors, unanimously approved the Second Pilgrim Sub-Adviser Agreement
between Pilgrim and Crosby. The Board also directed that the Second Pilgrim
Sub-Adviser Agreement be submitted to shareholders for approval at the Meeting.

B. The Terms of the Second Pilgrim Sub-Adviser Agreement:

The terms of the Second Pilgrim Sub-Adviser Agreement would be identical to
the terms of the First Pilgrim Sub-Adviser Agreement, including the amount of
the fee to be paid to Insinger. In addition, it is expected that the Fund would
be managed by the same portfolio management team with the same lead manager as
is anticipated under the First Pilgrim Sub-Adviser Agreement.

C. Board Considerations:

In considering whether to recommend that the Second Pilgrim Sub-Adviser
Agreement be approved by shareholders, the Board of Directors considered all of
the same factors it considered in approving the First Pilgrim Sub-Adviser
Agreement. In addition, the Board took into account the representations by
Pilgrim that the terms of the Second Pilgrim Sub-adviser Agreement would be
identical to the First Pilgrim Sub-Adviser Agreement and that there would be no
change in the fee to be paid to Insinger.

D. Required Vote:

26
<PAGE>

of (1) more than 50% of the outstanding shares of the Fund, or (2) 67% or more
of the shares of the Fund present at the Meeting, if more than 50% of the
outstanding shares of the Fund are represented at the Meeting in person or by
proxy.

E. Board Recommendation:

The Board of Directors recommends that you VOTE FOR approval of the Second
Pilgrim Sub-Adviser Agreement between Pilgrim and Insinger. If the Second
Pilgrim Sub-Adviser Agreement is not approved, the Directors will determine
what action should be taken. The Directors may consider proposing a different
sub-adviser, or having no sub-adviser. The effectiveness of the Second Pilgrim
Sub-Adviser Agreement, if approved by shareholders, is conditioned on the
receipt by Insinger of authority to conduct business in Hong Kong and the
completion of the ReliaStar Acquisition.

PROPOSAL 6a

THE APPROVAL OF A NEW INVESTMENT SUB-ADVISER AGREEMENT FOR THE LEXINGTON TROIKA
DIALOG RUSSIA FUND, INC. TO TAKE EFFECT UPON THE COMPLETION OF THE PROPOSED
ACQUISITION OF LEXINGTON GLOBAL ASSET MANAGERS, INC BY RELIASTAR FINANCIAL
CORP.

(Only shareholders of Lexington Troika Dialog Russia Fund, Inc. will consider
and vote on this proposal.)

A. General Information:

Currently, LMC has engaged Troika Dialog Asset Management (Cayman Islands),
Ltd. ("Troika") to assist it in the management of the Lexington Troika Dialog
Russia Fund, Inc. (the "Current Sub-Adviser Agreement"). If the Lexington
Acquisition is completed, there may be an assignment of the Current Sub-Adviser
Agreement. In order to ensure continuity in the management of the Fund, Pilgrim
has agreed to enter into an agreement with Troika (the "Proposed Sub-Adviser
Agreement") if shareholders of the Fund approve the First Pilgrim Management
Agreement. Under the Proposed Sub-Adviser Agreement, Troika would provide
substantially the same services it currently provides under the agreement with
LMC. There would effectively be no change in the sub-advisory fee. If the
Proposed Sub-Adviser Agreement is approved by shareholders, it would become
effective upon the closing of the Lexington Acquisition. (The form of Proposed
Sub-Adviser Agreement is attached hereto as Exhibit B.)

The Independent Directors met on April 11, April 17 and April 18, 2000, to
consider the Lexington Acquisition and, among other things, the Proposed Sub-
Adviser Agreement and the impact the Lexington Acquisition would have on the
Current Sub-Adviser Agreement. On April 18, 2000, the Fund's full Board of
Directors, including all of the Independent Directors, approved the Proposed
Sub-Adviser Agreement between Pilgrim and Troika. The Board also directed that
the Proposed Sub-Adviser Agreement be submitted to shareholders for approval at
the Meeting.

B. The Terms of the Proposed Sub-Adviser Agreement:

Under the Proposed Sub-Adviser Agreement, Troika would act as sub-adviser to
the Fund. In this capacity, Troika, subject to the supervision of Pilgrim and
the Directors of the Fund, would provide a continuous investment program of
evaluation, investment, sales, and reinvestment of the Fund's assets. The
Proposed Sub-

27
<PAGE>

Adviser Agreement is the same in many respects to the Current Sub-Adviser
Agreement, and even though the fee that would be paid by Pilgrim Crosby would
be calculated differently under the Proposed Sub-Adviser Agreement, it is
effectively the same as the fee paid under the Current Sub-Adviser Agreement.
The Current Sub-Adviser Agreement provides that the sub-adviser be paid a
percentage of the fee paid by the Fund to LMC after any reimbursements LMC
might make to the Fund. Under the Proposed Sub-Adviser Agreement, the sub-
adviser is paid a specific fee which is then subject proportionately to any
reimbursements to the Fund under a separate Expense Limitation Agreement.

The Proposed Sub-Adviser Agreement provides that Troika would not be liable
for any act or omission related to any portfolio for which Troika is not the
sub-adviser to that series nor for any act or omission related to any services
provided except by reason of willful misfeasance, bad faith or gross negligence
in the performance of those duties, or by reason of reckless disregard of its
obligations and duties under the Proposed Sub-Adviser Agreement. The Proposed
Sub-Adviser Agreement can be terminated by Pilgrim on 60 days' notice to
Troika; by the Fund, the Fund's Board of Directors or by vote of the
shareholders on 60 days' notice; or by Troika on three months' notice.

The Current Sub-Advisory Agreement became effective on March 27, 1996, and
was last approved by shareholders on December 19, 1997. During the Fund's last
fiscal year, Troika received $ from LMC under the Current Sub-Advisory
Agreement.

The Fund is expected to be managed by a portfolio management team consisting
of investment professionals from both Pilgrim and Troika. The lead managers,
who currently are the lead managers for the Fund, will be:

Timothy D. McCarthy: Mr. McCarthy has a B.S. degree in Economics from the
State University of New York at Oneonta and an M.B.A. from the State University
of New York at Binghamton. He joined Troika Dialog, Moscow in July 1998. Prior
to May, 1998 he was an Executive Director with Alfa Asset Management, Moscow.
From January 1995 to March 1997 he was co-founder and director of Capital
Regent Securities, a Moscow based investment and advisory firm. From June 1990
to December 1994 he was a consultant and senior consultant with Deloitte &
Touche Management Consulting in New York.

Richard M. Hisey, C.F.A.: Mr. Hisey will co-manage the Pilgrim Troika Dialog
Russia Fund. Mr. Hisey is Managing Director and Chief Financial Officer of LMC
and is also a Vice President and a member of the Board of Directors of the
Lexington Family of Mutual Funds. Mr. Hisey is Executive Vice President and
Chief Financial Officer of Lexington Global Asset Managers, Inc., the parent
company of LMC. He sits on the Investment Company Institute's
Accounting/Treasurers, International and Tax Committees. He is a Chartered
Financial Analyst and is a member of the New York Society of Security Analysts.
Prior to joining LMC in 1986, Mr. Hisey was a Senior Financial Analyst for
Richardson Vicks, Inc. Mr. Hisey is a graduate with Distinction of the
University of Connecticut with a Bachelor of Arts in Soviet and Eastern
European Studies. His undergraduate work included studies at Middlebury College
and at Leningrad State University in the former Soviet Union. He also holds an
M.B.A. from the University of Connecticut.

Ruben Vardanian: Mr. Vardanian is Chairman of the Board of Troika Dialog
Asset Management. He is Vice Chairman of the Board of Directors of the
Depository Clearing Company, Moscow. He is a member of the expert council of
the Federal Securities Commission of Russia and a Director of the Russian
Trading System (RTS). He is also Chairman of the Board of Directors of the
Russian Capital markets self-regulatory organization (NAUFOR). Mr. Vardanian
received a Masters Degree with Distinction from the Finance Department of
Moscow State University. He received post-graduate training with Banca CRT in
Italy and with the Emerging Markets Division of Merrill Lynch in New York.

Pavel Teplukhin: Dr. Teplukhin is the President of Troika Dialog Asset
Management. Dr. Teplukhin received a diploma in Economics and a Doctorate in
Economic Analysis and Statistics from Moscow State University. He also received
a Master of Science in Economics/Macroeconomics from the London School of
Economics. From 1993 to 1996, Dr. Teplukhin was Economic Adviser to the First
Deputy Prime Minister at the Ministry of Finance of the Russian Federation.

28
<PAGE>

Oleg Larichev: Mr. Larichev received a Master of Arts in Economics from the
New Economic School, Moscow and a Diploma in Computer Graphics from Moscow
State University. He has been associated with Troika Dialog, Moscow since
September 1996. Prior to September 1996, he was an economics expert with the
Russian European Center for Economic Policy. Prior to April 1995 he held part-
time positions with the World Bank and the Moscow office of the London School
of Economics.

Troika is a majority owned subsidiary of the Bank of Moscow and provides
investment advice and management to the Fund. It is located at Romanov Pereulok
#4, 103875, Moscow, Russia.

C. Adviser Fees:

As compensation for its services as investment adviser, the Fund would pay
Pilgrim a monthly advisory fee at the annual rate of 1.25% of the average daily
net assets of the Fund. Pilgrim would pay Troika an annual investment sub-
advisory fee of 0.625% of the Fund's average daily net assets. The investment
sub-advisory fee would be paid by Pilgrim, not the Fund.

D. Board Considerations:

In considering whether to recommend that the Proposed Sub-Adviser Agreement
be approved by shareholders, the Board of Directors considered, among other
things, the qualifications of Troika's professional staff and information
related to Troika's past performance. In addition, the Board considered the
importance of maintaining continuity of management should Pilgrim become the
Fund's investment adviser. Moreover, the Board noted that the sub-advisory fees
would remain the same and that the Proposed Sub-Adviser Agreement would be
materially the same as the Current Sub-Adviser Agreement.

E. Required Vote:

F. Board Recommendation:

The Board of Directors recommends that you VOTE FOR approval of the Proposed
Sub-Adviser Agreement between Pilgrim and Troika. If the Proposed Sub-Adviser
Agreement is not approved, the Directors will determine what action, if any,
should be taken. The Directors may consider proposing a different sub-adviser
or having no sub-adviser. The effectiveness of the Proposed Sub-Adviser
Agreement, if approved by shareholders, is conditioned on completion of the
Lexington Acquisition and the approval of the First Pilgrim Management
Agreement.

29
<PAGE>

PROPOSAL 6b

THE APPROVAL OF A NEW INVESTMENT SUB-ADVISER AGREEMENT FOR
THE LEXINGTON TROIKA DIALOG RUSSIA FUND, INC. TO TAKE EFFECT UPON
THE COMPLETION OF THE PROPOSED ACQUISITION OF
RELIASTAR FINANCIAL CORP. BY ING GROEP N.V.

(Only shareholders of Lexington Troika Dialog Russia Fund, Inc. will consider
and vote on this proposal.)

A. General Information:

Should shareholders of Lexington Troika Dialog Russia Fund, Inc. approve the
sub-advisory agreement between Pilgrim and Troika as proposed in Proposal 6a,
that agreement (the "First Pilgrim Sub-Adviser Agreement") would become
effective upon the completion of the Lexington Acquisition. The First Pilgrim
Sub-Adviser Agreement, however, may terminate upon the completion of the
ReliaStar Acquisition. In order to ensure continuity in the management of the
Fund, Pilgrim would enter into a second agreement with Troika (the "Second
Pilgrim Sub-Adviser Agreement") to take effect upon the completion of the
ReliaStar Acquisition if shareholders of the Fund approve the Second Pilgrim
Management Agreement with Pilgrim. Under the Second Pilgrim Sub-Adviser
Agreement, Troika would provide the same services it currently provides under
the agreement with LMC and which it proposes to provide under the First Pilgrim
Sub-Adviser Agreement As with the First Pilgrim Sub-Adviser Agreement, there
would be no change in the sub-advisory fee.

The Independent Directors reviewed the Second Pilgrim Sub-Adviser Agreement
in detail at its meetings on May 22 and May 23, 2000. On May 23, 2000, the
Fund's full Board of Directors, including a majority of the Independent
Directors, voted unanimous to approve the Second Pilgrim Sub-Adviser Agreement
between Pilgrim and Troika. The Board also directed that the Second Pilgrim
Sub-Adviser Agreement be submitted to shareholders for approval at the Meeting.

If the Second Pilgrim Sub-Adviser Agreement is approved by shareholders, it
would become effective upon the closing of the ReliaStar Acquisition. If
approved by shareholders, the Second Pilgrim Sub-Adviser Agreement would remain
in effect for two years from the date it takes effect and, unless terminated
early, would continue from year to year thereafter, provided that each such
continuance is approved annually (i) by the Fund's Board of Directors, or by
the vote of a majority of the outstanding voting securities of the Fund, and in
either case, (ii) by a majority of the Fund's Independent Directors who are
also not parties to the Second Pilgrim Sub-Adviser Agreement.

B. The Terms of the Second Pilgrim Sub-Adviser Agreement:

The terms of the Second Pilgrim Sub-Adviser Agreement will be identical to
the terms of the First Pilgrim Sub-Adviser Agreement, including the amount of
the fee paid to Troika. In addition, it is expected that the Fund will be
managed by the same portfolio management team with the same lead managers as is
anticipated under the First Pilgrim Sub-Adviser Agreement.

C. Board Considerations:

D. Required Vote:

Approval of the Second Pilgrim Sub-Adviser Agreement will require the
affirmative vote of a "majority of the outstanding voting securities" of the
Fund, which, for this purpose, means the affirmative vote of the lesser

30
<PAGE>

E. Board Recommendation:

The Board of Directors recommends that you VOTE FOR approval of the Second
Pilgrim Sub-Adviser Agreement between Pilgrim and Troika. If the Second Pilgrim
Sub-Adviser Agreement is not approved, the Directors will determine what action
should be taken. The Directors may consider proposing a different sub-adviser,
or having no sub-adviser. The effectiveness of the Second Pilgrim Sub-Adviser
Agreement, if approved by shareholders, is conditioned on the completion of the
ReliaStar Acquisition and the approval of the Second Pilgrim Management
Agreement.

PROPOSAL 7

THE RATIFICATION OF AUDITORS

A. General Information:

The Boards of Directors/Trustees, including a majority of the Independent
Directors/Trustees, unanimously appointed KPMG LLP as independent certified
public accountants to examine and to report on the financial statements of the
Funds for the fiscal year ending December 31, 2000. Such appointment was
expressly conditioned upon the right of the shareholders of the Funds to
terminate the employment of KPMG LLP by a vote of the majority of the
outstanding voting securities at any meeting called for the purpose of voting
on such termination. The Board's selection of KPMG LLP is hereby submitted to
shareholders for ratification. Because the Funds are not required to hold
annual meetings of shareholders, the ratification of the selection by the
Boards of Directors/Trustees, of KPMG LLP, or any other independent certified
public accountant, may not be presented to shareholders in the future.

As the independent auditors, KPMG LLP audits and certifies each Fund's
financial statements. KPMG LLP also reviews each Fund's Annual Reports to
shareholders and filings with the SEC. Neither KPMG LLP nor any of its partners
has any direct or material indirect financial interest in any Fund.
Representatives of KPMG LLP are not expected to attend the Meeting, but have
been given the opportunity to make a statement if they so desire, and will be
available should any matter arise requiring their participation.

B. Required Vote:

The favorable vote of a majority of the shares of each Fund present in
person or by proxy at the Meeting is required to ratify the selection of the
KPMG LLP as the independent certified public accountants.

C. Board Recommendation:

The Boards of Directors/Trustees recommend that you VOTE FOR the
ratification of the selection of KPMG LLP as independent certified public
accountants to examine and to report on the financial statements of the Fund
for the fiscal year ending December 31, 2000. If this Proposal 7 is not
approved, the Boards of Directors/Trustees will take such action as they deem
appropriate, which may include retention of another accounting firm or re-
proposal of KPMG LLP to the shareholders of the Funds.

31
<PAGE>

PROPOSAL 8

APPROVAL OF A NEW SERVICE AND DISTRIBUTION PLAN

(Shareholders of Lexington Money Market Trust will not consider and vote on
this proposal.)

A. The Plan:

Rule 12b-1 under the 1940 Act provides that a registered investment company
(i.e., a mutual fund) which engages "directly or indirectly in financing any
activity which is primarily intended to result in the sale of shares issued by
such company, including, but not necessarily limited to: advertising;
compensation of underwriters, dealers and sales personnel; the printing and
mailing of prospectuses to other than current shareholders; and the printing
and mailing of sales literature," may only do so pursuant to a written plan
"describing all material aspects of the proposed financing of distribution."

In anticipation of the completion of the Lexington Acquisition and the
subsequent appointment of Pilgrim Securities, Inc. as distributor of the Funds,
the Boards of Directors/Trustees, approved Service and Distribution Plans under
Rule 12b-1 (the "Plans") for each of the Funds except Lexington Money Market
Trust at their meetings on April 18, 2000. A copy of the form of the Plan is
attached hereto as Exhibit C. Subject to the terms of the Plans and the rules
of the National Association of Securities Dealers, Inc. concerning sales
charges, each Fund will pay its distributor, Pilgrim Securities, Inc. (the
"Distributor"), a service or distribution fee at the rate of 0.25% on an
annualized basis of the average daily net assets of the Fund. The fee paid to
the Distributor may be more or less than the actual marketing expense incurred
by the Distributor, including the expense of providing the services described
below. Any fees paid to the Distributor under the Plan and not used to pay for
these services will be retained by the Distributor. In this regard, the Plan is
considered a compensation type Plan.

The Distributor will pay securities dealers and other financial institutions
and organizations, or retain some or all of the fee for itself, for servicing
accounts or for services primarily intended to result in the sale of shares of
the Funds. Activities for which payments may be made include: promotional
activities; preparation and distribution of advertising materials and sales
literature; expenses of organizing and conducting sales seminars; personnel
costs and overhead of the Distributor; printing of prospectuses and statements
of additional information (and supplements thereto) and reports for other than
existing shareholders; payments to dealers and others provide shareholder
services; interest on accrued distribution expenses; and costs of administering
the Plan.

If approved by shareholders, each Plan will continue in effect as long as
its continuance is specifically approved at least annually by a majority of
each Board of Directors/Trustees, including a majority of the
Directors/Trustees who are Independent Directors/Trustees and who have no
direct or indirect financial interest in the operation of the Plan or any
agreement related to the Plan, cast in person at a meeting called for the
purpose of voting on the Plan.

B. Current Rule 12b-1 Plans:

Currently, the following Funds have adopted a plan under Rule 12b-1 for the
sale and distribution of shares:

1) Lexington Goldfund, adopted April 15, 1992;
2) Lexington Global Income Fund, adopted April 15, 1992;
3) Lexington Growth and Income Fund, adopted November 30, 1994;
4) Lexington International Fund, adopted December 3, 1993;
5) Lexington Troika Dialog Russia Fund, adopted March 27, 1996;
6) Lexington Worldwide Emerging Markets Fund, adopted August 12, 1998.

These plans provide that the Funds may pay distribution fees, including
payments to the Lexington Funds Distributor, Inc., the Funds' distributor, at
an annual rate not to exceed 0.25% of its average daily net assets for

32
<PAGE>

distribution services. Payments made to Lexington Funds Distributor, Inc. are
intended to reimburse it for those distribution expenses it specifically incurs
and reports to the Funds' Boards. Amounts reimbursed cannot exceed the maximums
under the Plans. In this regard, the plans are considered reimbursement type
plans and are different from the compensation type plans being proposed in that
payments under the latter are made regardless of the distributor's expenses.

Under the current plans, distribution payments are to be made as follows:
The Fund, either directly or through the adviser, may make payments
periodically (i) to the distributor or to any broker-dealer (a "Broker") who is
registered under the Securities Exchange Act of 1934 and a member in good
standing of the National Association of Securities Dealers, Inc. and who has
entered into a Selected Dealer Agreement with Lexington Funds Distributor,
Inc., (ii) to other persons or organizations ("Servicing Agents") who have
entered into shareholder processing and service agreements with the Fund's
investment adviser or with its distributor, with respect to Fund shares owned
by shareholders for which the Broker is the dealer or holder of record or the
servicing agent has a servicing relationship, or (iii) for expenses associated
with distribution of Fund shares, including the compensation of the sales
personnel of the distributor. Payments may also be made for any advertising and
promotional expenses relating to selling efforts incurred by or for the
distributor in carrying out its obligations under the distribution agreement,
including but not limited to: the incremental costs of printing prospectuses,
statements of additional information, annual reports and other periodic reports
for distribution to persons who are not shareholders of the Fund; the costs of
preparing and distributing any other supplemental sales literature; costs of
radio, television, newspaper and other advertising; and telecommunications
expenses, including the cost of telephones, telephone lines and other
communications equipment.

The following table shows the expenses incurred by the Funds for
distribution-related activities under the Rule 12b-1 Plans during the fiscal
year ended December 31, 1999, and what each Fund would pay as a percentage of
average net assets if the Plan is adopted for that Fund and the Lexington
Acquisition is completed.

<TABLE>
<CAPTION>
% of the Fund's
Aggregate % of the Fund's Average Net Asset
Name of the Fund Amount Paid Average Net Assets Under Proposed Plans
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Lexington Global
Corporate Leaders Fund,
Inc.................... N/A N/A 0.25%
-------------------------------------------------------------------------------
Lexington Global
Technology Fund, Inc... N/A N/A 0.25%
-------------------------------------------------------------------------------
Lexington GNMA Income
Fund, Inc.............. N/A N/A 0.25%
-------------------------------------------------------------------------------
Lexington Goldfund,
Inc.................... 75,410 0.12% 0.25%
-------------------------------------------------------------------------------
Lexington Growth and
Income Fund, Inc....... 102,040 0.04% 0.25%
-------------------------------------------------------------------------------
Lexington International
Fund, Inc.............. 17,424 0.08% 0.25%
-------------------------------------------------------------------------------
Lexington Silver Fund,
Inc.................... N/A N/A 0.25%
-------------------------------------------------------------------------------
Lexington Small Cap Asia
Growth Fund, Inc....... N/A N/A 0.25%
-------------------------------------------------------------------------------
Lexington Troika Dialog
Russia Fund, Inc....... 61,804 0.17% 0.25%
-------------------------------------------------------------------------------
Lexington Worldwide
Emerging Markets Fund,
Inc.................... 196,336 0.24% 0.25%
-------------------------------------------------------------------------------
Lexington Global Income
Fund................... 40,884 0.12% 0.25%
-------------------------------------------------------------------------------
Lexington Money Market
Fund................... N/A N/A N/A
</TABLE>

Despite the expected increase in distribution expenses should the proposed
Plans be approved, Pilgrim has advised the Funds that it expects total expenses
to decrease for most of the Funds, as seen in the tables found on page of
this proxy statement.

33
<PAGE>

C. Evaluation by the Boards of Directors/Trustees:

In approving the proposed Plans, the Boards considered the impact of adding
Rule 12b-1 fees to each Fund, and the potential benefits the Funds and the
shareholders could derive from the Plans. In particular, the Boards reviewed:
(1) the overall expenses of the Funds projected over the next year as described
in the table under Proposal 2 in this proxy statement; (2) the marketing
program presented by the Fund's proposed distributor and the importance of Rule
12b-1 fees to that program; (3) the experience the proposed distributor has and
the success it has had in marketing the current retail funds advised by
Pilgrim, all of which have Rule 12b-1 Plans; and (4) the benefits to
shareholders from the growth of assets in the Funds and the continuous flow of
new assets into the Funds. In this regard, the Directors/Trustees were advised
that a marketing plan for the Funds using Rule 12b-1 fees was important to add
new shareholders and assets to the Funds, and that increased assets would
provide the necessary resources to attract and maintain good portfolio
management and could reduce cost through economies of scale. After considering
these and other pertinent factors, the Directors/Trustees, including a majority
of Independent Directors/Trustees, concluded that there is a reasonable
likelihood that the Plans will benefit the Funds and their shareholders.

D. Required Vote:

Approval of the proposed Service and Distribution Plan requires the
affirmative vote of a "majority of the outstanding voting securities" of the
Fund, which, for this purpose, means the affirmative vote of the lesser of (1)
more than 50% of the outstanding shares of the Fund, or (2) 67% or more of the
shares of the Fund present at the Meeting, if more than 50% of the outstanding
shares of the Fund are represented at the Meeting in person or by proxy.

E. Board Recommendation:

The Boards recommend that shareholders VOTE FOR the proposed Plans. If the
Proposal is not approved, the Boards may consider other possible courses of
action, including leaving the current plans in place. The effectiveness of the
proposed Plans, if approved by shareholders, is conditioned on the completion
of the Lexington Acquisition.

PROPOSAL 9
APPROVAL OF THE AMENDED
AND RESTATED ARTICLES OF INCORPORATION

(Only shareholders of Lexington Global Corporate Leaders Fund, Inc.,
Lexington Global Technology Fund, Inc., Lexington GNMA Income Fund, Inc.,
Lexington Goldfund, Inc., Lexington Growth and Income Fund, Inc., Lexington
International Fund, Inc., Lexington Silver Fund, Inc., Lexington Small Cap Asia
Growth Fund, Inc., Lexington Troika Dialog Russia Fund, Inc. and Lexington
Worldwide Emerging Markets Fund, Inc. (the "Maryland Corporations") will
consider and vote on this proposal.)

A. General Information:

Mutual funds, such as the Funds, are required to organize under the laws of
a state and to create and be bound by organizational documents which outline
how they will operate. The Maryland Corporations are organized as Maryland
corporations, and are governed by their Articles of Incorporation (the "Current
Articles"). Because not all of the Maryland Corporations were organized at the
same time or pursuant to the same advice, some of the Current Articles differ.
In an attempt to ensure that each Maryland Corporation is able to take
advantage of all operational opportunities provided to them under Maryland law,
and to ensure consistency among them, the Board of Directors of each Maryland
Corporation has determined that it is in the best interest of the Maryland
Corporations and their shareholders to amend and restate the Current Articles.
In addition, in contemplation of the completion of the Lexington Acquisition
and Pilgrim's future marketing plans

34
<PAGE>

for the Funds, the Directors determined that each Maryland Corporation should
have the ability to divide its shares into separate portfolios or series
("Series"), and to further divide those Series into classes ("Classes"). The
form of amended and restated Articles of Incorporation (the "Proposed
Articles") is included with this proxy statement as Exhibit D.

Each Maryland Corporation will remain a Maryland corporation, and the
interpretation of the Proposed Articles will continue to be governed by
Maryland law. In addition, the operations of the Maryland Corporations will
remain subject to the provisions of the 1940 Act and the rules promulgated
thereunder. Finally, the number and classification of shares authorized to be
issued under the current Articles will not change and are stated for each
Maryland Corporation in Schedule A to the form of Proposed Article in
Exhibit D.

The following summarizes the material changes contained in the Proposed
Articles. The Proposed Articles also contain certain non-material changes which
are not described here. Because this is a summary, it does not describe all of
the changes in the Proposed Articles. Please review the entire Proposed
Articles before you decide how to vote on this proposal.

B. The Differences between the Current Articles and the Proposed Articles:

Shareholders are being asked to approve the Proposed Articles which would
give all of the Maryland Corporations the flexibility to classify their shares
into Series and reclassify their shares into one or more Classes within a
Series. Under their Current Articles, some of the Maryland Corporations cannot
classify their share into either Series or Classes, while others are permitted
to classify into Series, but not Classes. Some of the Maryland Corporations
currently have the ability to classify their shares into both Series and
Classes. In this regard, the Proposed Articles will have no impact on these
Maryland Corporations. The amendments would allow each Maryland Corporation to
issue its shares in separate Series of common stock. A Series could be further
classified by the Board of Directors into two or more Classes of stock that may
be invested together in the common investment portfolio in which the Series is
invested. Income and expenses of each Class in a Series would be determined
separately and, therefore, dividends and distributions may vary among the
Classes in the same Series. Except for the differences in liabilities and
expenses and certain other differences, Classes in the same Series would have
the same preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption.

In addition, in order to make the Articles of each of the Funds consistent
with one another, both the quorum and voting sections of some of the Current
Articles would be amended. The presence in person or by proxy of the holders of
one-third of the shares of stock entitled to vote would constitute a quorum in
order to conduct a meeting of shareholders. And, unless the Articles of
Incorporation provide otherwise, the vote of a concurrence of a majority of the
aggregate number of shares entitled to vote would be permitted to approve or
authorize an action even though Maryland law would require concurrence by a
greater number than a majority. The amendments also would make clear that all
shares vote as a single class except where regulatory requirements dictate
otherwise or where a matter affects only one or more Series or Classes, in
which case, only the holders of shares of those Series or Classes will be
entitle to vote on that matter.

Finally, if the Acquisition is completed, the name of each of the Maryland
Corporations would be changed to replace the word "Lexington" with the word
"Pilgrim."

At a meeting held on April 18, 2000, the Directors voted unanimously to
approve the Proposed Articles and recommended that they be presented to
shareholders.

C. Required Vote:

The favorable vote of a majority of the shares of each Fund present in
person or by proxy at the Meeting is required to approve the Amended and
Restated Articles of Incorporation.

35
<PAGE>

D. Board Recommendation:

After considering the Proposed Articles, the Boards of Directors determined
that the changes related to Series and Classes are consistent with their
earlier review of the proposed marketing plans for the Funds and that the other
changes provided continuity among the Maryland Corporations which would be
beneficial to the Funds and their shareholders. Accordingly, the Boards of
Directors recommend that shareholders VOTE FOR the Proposed Articles. In the
event that the Proposed Articles are not approved by the shareholders of any
Fund, the Current Articles for that Fund will remain in effect, and the Board
of Directors of that Fund will consider what action, if any, should be taken.

PROPOSAL 10
APPROVAL OF THE AMENDED AND RESTATED DECLARATION OF TRUST

(Only shareholders of Lexington Global Income Fund and Lexington Money
Market Trust (the "Massachusetts Trusts") will consider and vote on this
proposal.)

A. General Information:

Mutual funds, such as the Funds, are required to organize under the laws of
a state, and to create and be bound by organizational documents which outline
how they will operate. The Massachusetts Trusts are organized as Massachusetts
business trusts, and are governed by their Declarations of Trust (the "Current
Declarations"). Because the Massachusetts Trusts were organized at different
times and pursuant to the different advice, the Current Declarations differ. In
addition the Current Declarations differ from the Declarations of Trust under
which the Pilgrim Funds operate. In an attempt to ensure that each
Massachusetts Trust is able to take advantage of all operational opportunities
provided to them under Massachusetts business trust law, and to ensure
consistency among them and the Pilgrim Funds upon the completion of the
Lexington Acquisition, the Board of Trustees of each Massachusetts Trust has
determined that it is in the best interest of the Funds and their shareholders
to amend and restate the Current Declarations. In addition, in contemplation of
the completion of the Lexington Acquisition and Pilgrim's future marketing
plans for the Funds, the Trustees determined that each Massachusetts Trust
should have the ability to divide its shares into separate portfolios or series
("Series"), and to further divide those Series into classes ("Classes"). The
form of amended and restated Declaration of Trust (the "Proposed Declaration")
is included with this Proxy Statement as Exhibit E.

Each Massachusetts Trust will remain a Massachusetts business trust, and the
interpretation of the Proposed Declaration will continue to be governed by
Massachusetts law. In addition, the operations of the Massachusetts Trusts will
remain subject to the provisions of the 1940 Act and the rules promulgated
thereunder.

The following summarizes the material changes contained in the Proposed
Declaration. The Proposed Declaration also contains certain non-material
changes which are not described here. Because this is a summary, it does not
detail all of the changes in the Proposed Declaration. The provisions of the
Proposed Declaration would not negatively alter the rights and privileges of
current Trust shareholders under the Current Declarations. Please review the
entire Proposed Declaration before you decide how to vote on this proposal.

B. The Differences between the Current Declaration and the Proposed
Declaration:

Shareholders are being asked to approve the Proposed Declaration which would
give both of the Massachusetts Trusts the flexibility to add Series and to
designate one or more Classes within a portfolio. Currently, Lexington Money
Market Trust, under its Current Declaration, cannot classify its shares into
either Series or Classes, Lexington Global Income Fund is permitted to issue
more than one Series and to further divide those Series into Classes. The
amendments would allow both Massachusetts Trust to issue their shares in
separate Series of shares of beneficial interest. A Series could be further
classified by the Board of Trustees into two or more Classes of shares that may
be invested together in the common investment portfolio in which the

36
<PAGE>

Series is invested. All shares of the Trust shall be identical to all other
shares of the Trust, except that there may be variations between different
Classes as to allocation of expenses, right of redemption, special and relative
rights as to dividends and on liquidation, conversion rights and conditions
under which the Classes shall have separate voting rights. Liabilities,
expenses, costs, charges and reserves related to the distribution of, and other
identified expenses that should properly be allocated to, the shares of a
particular Class may be charged to and borne solely by that Class. Those
expenses may be appropriately reflected (in a manner determined by the
Trustees) and cause differences in the net asset value attributable to, and the
dividend, redemption and liquidation rights of, the shares of different
Classes.

In addition, if the Lexington Acquisition is completed, the name of
Lexington Global Income Fund would be changed to replace the word "Lexington"
with the word "Pilgrim."

At a meeting held on April 18, 2000, the Trustees voted to approve the
Proposed Declaration and recommended that it be presented to shareholders.

C. Required Vote:

The affirmative vote of a majority of the shares outstanding entitled to
vote at the Meeting is necessary to approve the Amended and Restated
Declaration of Trust for Lexington Money Market Trust. Approval of the Amended
and Restated Declaration of Trust by shareholders of Lexington Global Income
Fund will require the affirmative vote of the holders of a majority of the
shares then outstanding and entitled to vote which, for this purpose, means the
affirmative vote of the lesser of (1) more than 50% of the outstanding shares
of the Fund, or (2) 67% or more of the shares of the Fund present at the
Meeting, if more than 50% of the outstanding shares of the Fund are represented
at the Meeting in person or by proxy.

D. Board Recommendation:

After considering the Proposed Declarations, the Boards of Trustees
determined that the changes related to Series and Classes are consistent with
their earlier review of the proposed marketing plans for the Funds and that the
other changes provided continuity among the Massachusetts Trusts which would be
beneficial to the Funds and their shareholders. Accordingly, the Boards of
Trustees recommend that shareholders VOTE FOR the Proposed Declaration. In the
event that the Proposed Declaration is not approved by the shareholders of any
Fund, the Current Declaration for that Fund will remain in effect, and Board of
Trustees of that Fund will consider what action, if any, should be taken.

PROPOSAL 11
OTHER MATTERS

The Board of Directors/Trustees of each Fund knows of no other matters to be
presented at the Meeting other than those set forth in this Proxy Statement. If
any other business should come before the Meeting, the persons named on the
accompanying proxy card will vote thereon in accordance with their best
judgment.

37
<PAGE>

PART 3--MORE ON PROXY VOTING

A. Who Can Vote:

Only shareholders of record of the Funds at the close of business on the
Record Date, May 23, 2000, may vote at the Meeting. As of the Record Date, each
of the Funds had the number of beneficial shares issued and outstanding listed
below, each share being entitled to one vote:

<TABLE>
<CAPTION>
Shares entitled
Fund Name to Vote
--------------------------------------------------------------------------------
<S> <C>
Lexington Global Corporate Leaders Fund, Inc.................. 1,576,110.786
--------------------------------------------------------------------------------
Lexington Global Technology Fund, Inc......................... 1,217,979.799
--------------------------------------------------------------------------------
Lexington GNMA Income Fund, Inc............................... 43,666,425.586
--------------------------------------------------------------------------------
Lexington Goldfund, Inc....................................... 20,351,161.906
--------------------------------------------------------------------------------
Lexington Growth and Income Fund, Inc......................... 11,077,962.187
--------------------------------------------------------------------------------
Lexington International Fund, Inc............................. 1,920,855.906
--------------------------------------------------------------------------------
Lexington Silver Fund, Inc.................................... 7,819,733.211
--------------------------------------------------------------------------------
Lexington Small Cap Asia Growth Fund, Inc..................... 1,390,437.326
--------------------------------------------------------------------------------
Lexington Troika Dialog Russia Fund, Inc...................... 9,901,592.283
--------------------------------------------------------------------------------
Lexington Worldwide Emerging Markets Fund, Inc................ 9,919,240.857
--------------------------------------------------------------------------------
Lexington Global Income Fund.................................. 3,288,681.978
--------------------------------------------------------------------------------
Lexington Money Market Trust.................................. 85,785,363.740
</TABLE>

B. Information Concerning Outstanding Shares:

To the best knowledge of each Fund, the following shareholders beneficially
owned 5% or more of the outstanding shares of the Fund as of the Record Date:

<TABLE>
<CAPTION>
Percent Owned Percent Owned
Fund Name Name and Address of Owner of Record Beneficially
----------------------------------------------------------------------------
<C> <S> <C> <C>
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>

C. Quorum Requirements:

At the Meeting, the presence in person or by proxy of shareholders of one-
third of the outstanding shares entitled to vote at the Meeting shall be
necessary and sufficient to constitute a quorum for the transaction of business
by Lexington Global Technology Fund, Inc., Lexington International Fund, Inc.,
Lexington Silver

38
<PAGE>

Fund, Inc., Lexington Small Cap Asia Growth Fund, Inc., Lexington Troika Dialog
Russia Fund, Inc. and Lexington Worldwide Emerging Markets Fund, Inc. The
presence in person or by proxy of shareholders of one-half of the outstanding
shares entitled to vote at the Meeting shall be necessary and sufficient to
constitute a quorum for the transaction of business by Lexington Global
Corporate Leaders Fund, Inc., Lexington GNMA Income Fund, Inc., Lexington
Goldfund, Inc., Lexington Growth and Income Fund, Inc., Lexington Global Income
Fund and Lexington Money Market Trust. In the event that a quorum of
shareholders is not present for any Fund at the Meeting, the persons named as
proxies shall have the power to adjourn the Meeting. Such meeting shall be
reconvened without additional notice within a period not to exceed 120 days
from the date originally set for the Meeting. In the event a quorum is present
but sufficient votes to approve a proposal are not received, the persons named
as proxies may propose one or more adjournments to permit further solicitation
of proxies. If this should occur, we will vote proxies for or against a motion
to adjourn in the same proportion to the votes received in favor or against the
proposal. A shareholder vote may be taken on one or more of the proposals in
this proxy statement prior to any adjournment if a quorum is present and
sufficient votes have been received.

If a proxy represents a broker "non-vote" (that is, a proxy from a broker or
nominee indicating that such person has not received instructions from the
beneficial owner or other person entitled to vote shares on a particular matter
with respect to which the broker or nominee does not have discretionary power)
or if a proxy is marked with an abstention, the shares represented thereby will
be considered to be present at the Meeting for purposes of determining the
existence of a quorum for the transaction of business but will not be voted.
For this reason, abstentions and broker "non-votes" will have the affect of a
"no" vote for purposes of obtaining the requisite approval of some of the
proposals.

The Funds expect that, before the Meeting, broker-dealer firms holding
shares of the Funds in "street name" for their customers will request voting
instructions from their customers and beneficial owners. If these instructions
are not received by the date specified in the broker-dealer firms' proxy
solicitation materials, the Funds understand that the broker-dealers that are
members of the New York Stock Exchange may vote on the items to be considered
at the Meeting on behalf if their customers and beneficial owners under the
rules of the New York Stock Exchange.

D. The Proxy Solicitation Process:

The Board of Directors/Trustees of each Fund is soliciting your proxy to
vote on the matters described in this Proxy Statement. We expect to solicit
proxies primarily by mail, but representatives of Lexington Funds Distributors,
Inc. or its affiliates or others may communicate with you by mail or by
telephone or other electronic means to discuss your vote. We will ask broker-
dealers and other institutions that hold shares for the benefit of their
customers to send the proxy materials to the beneficial owners of those shares
and to obtain authorization to vote on their behalf.

IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE SIGN YOUR PROXY CARD
PROMPTLY AND RETURN IT IN THE ENCLOSED ENVELOPE TO AVOID UNNECESSARY EXPENSE
AND DELAY. NO POSTAGE IS NECESSARY.

PART 4--ADDITIONAL INFORMATION:

A. Section 15(f) of the 1940 Act:

Section 15(f) of the 1940 Act provides that, when a change in the control of
an investment adviser occurs, the investment adviser or any of its affiliated
persons may receive any amount or benefit in connection therewith if the
following two conditions are satisfied:

(1) An "unfair burden" must not be imposed on the investment company as
a result of the transaction relating to the change of control, or any
express or implied terms, conditions or understandings applicable thereto.
The term "unfair burden" includes any arrangement during the two-year
period after the change in control whereby the investment adviser (or
predecessor or successor adviser), or any interested person of any such
adviser, receives or is entitled to receive any compensation, directly or

39
<PAGE>

indirectly, from the investment company or its securities holders (other
than fees for bona fide investment adviser or other services) or from any
person in connection with the purchase or sale of securities or other
property to, from, or on behalf of the investment company (other than fees
for bona fide principal underwriting services). No such compensation
arrangements are contemplated as a result of either the Lexington
Acquisition or the ReliaStar Acquisition.

(2) During the three-year period immediately following consummation of
the transaction, at least 75% of each Fund's Board of Directors/Trustees
must not be "interested persons" of the investment adviser or predecessor
investment adviser within the meaning of the 1940 Act.

Pilgrim Investments, Inc. and its affiliates have agreed to use their
best efforts to assure compliance with the conditions of Section 15(f) of
the 1940 Act.

B. Information Regarding Committees, Meetings and Compensation of the Existing
Boards of Directors/Trustees:

On November 29, 1999, the Boards created an Audit Committee composed of Dr.
McCosh and Messrs. Preston (now deceased) and Miller. The committee did not
hold any meetings during the last fiscal year of the Funds.

Each Board of Directors/Trustees met five times during the last fiscal year.
Each of the Directors/Trustees attended at least 75% of the total number of
meetings of the Board of Directors/Trustees.

Each Director/Trustee is reimbursed for expenses incurred in attending each
meeting of the Board of Directors/Trustees or any committee thereof up to a
maximum of $9,000 per year for Directors/Trustees living outside the U.S. and
$6,000 per year for Directors/Trustees living within the U.S. Each
Director/Trustee who is not an affiliate of LMC is compensated for his or her
services according to a fee schedule which recognizes the fact that each
Director/Trustee also serves as a Director/Trustee of other investment
companies advised by LMC. Each Director/Trustee receives a fee, allocated among
all investment companies for which the Director/Trustee serves.

Set forth below is information regarding compensation paid or accrued during
the last fiscal year for each existing Director/Trustee:

<TABLE>
<CAPTION>
Total
Compensation Number of Directorships
Name of Director/Trustee from Fund Complex in Fund Complex
------------------------------------------------------------------------------
<S> <C> <C>
S.M.S. Chadha..................... $24,006 15
------------------------------------------------------------------------------
Robert M. DeMichele............... $ 0 15
------------------------------------------------------------------------------
Beverly C. Duer................... $29,656 15
------------------------------------------------------------------------------
Barbara R. Evans.................. $ 0 15
------------------------------------------------------------------------------
Richard M. Hisey.................. $ 0 8
------------------------------------------------------------------------------
Jerard F. Maher................... $22,976 15
------------------------------------------------------------------------------
Andrew M. McCosh.................. $24,006 15
------------------------------------------------------------------------------
Donald B. Miller.................. $24,006 15
------------------------------------------------------------------------------
Frances Olmsted*.................. $16,800 N/A
------------------------------------------------------------------------------
John G. Preston................... $24,006 15
------------------------------------------------------------------------------
Margaret W. Russell*.............. $18,000 N/A
------------------------------------------------------------------------------
Philip C. Smith*.................. $19,200 N/A
------------------------------------------------------------------------------
Allen H. Stowe.................... $12,712 15
------------------------------------------------------------------------------
Frances A. Sunderland*............ $16,800 N/A
</TABLE>
* Retired

40
<PAGE>

The following table shows the annual benefits payable to certain
Directors/Trustees who are now, or will be eligible for benefits under the
Lexington Group of Funds' Retirement Plan for Eligible Directors/Trustees,
effective as of September 12, 1995, and amended and restated on April 18, 2000
(the "Retirement Plan"). The Retirement Plan was amended by the
Directors/Trustees on April 18, 2000 to, among other things, eliminate the age
a Director/Trustee must attain in order to receive retirement benefits. As
amended a Director/Trustee will be eligible for retirement benefits if he has
completed ten continuous or non-forfeited years of service, as defined in the
Retirement Plan, and his service has terminated due to death, disability or
voluntary or involuntary termination other than for cause. Messrs. Duer,
Maher, Miller and Stowe have not been nominated to serve as Directors/Trustees
of the Funds after the completion of the Acquisition. Therefore, their service
will be terminated and their benefits will commence with the closing of the
Acquisition and will continue for ten years, in accordance with the terms of
the Retirement Plan.

As Advisory Directors/Trustees, the periods of service with the Funds will
continue for Mr. Chadha and Dr. McCosh. They will be eligible for retirement
benefits after more than six years of service, even if the Retirement Plan is
terminated during that period, and they will be eligible to receive those
benefits if their service as Advisory Director/Trustee is terminated before
their term expires or terminates for any reason other than for "cause," as
defined in the Retirement Plan.

<TABLE>
<CAPTION>
Date Benefits
Name of Director/Trustee Annual Benefit Expected to End
------------------------------------------------------------------------------
<S> <C> <C>
Beverly C. Duer.............................. $21,750 July 2010
------------------------------------------------------------------------------
Jerard F. Maher*............................. $18,000 July 2010
------------------------------------------------------------------------------
Donald B. Miller............................. $21,750 July 2010
------------------------------------------------------------------------------
Frances Olmsted.............................. $16,800 October 1, 2005
------------------------------------------------------------------------------
Margaret W. Russell.......................... $18,000 April 1, 2008
------------------------------------------------------------------------------
Philip C. Smith.............................. $19,200 October 1, 2006
------------------------------------------------------------------------------
Allen H. Stowe*.............................. $18,000 July 2010
------------------------------------------------------------------------------
Frances A. Sunderland........................ $16,800 April 1, 2006
</TABLE>
* Messrs. Maher and Stowe are eligible to receive benefits under the
Retirement Plan as a result of their prior service as a Trustee of Lexington
Convertible Securities Fund.

As Advisory Directors/Trustees, the periods of service with the Funds will
continue for Messrs. Chadha and McCosh. They will be eligible for retirement
benefits after more than six years of service, even if the Retirement Plan is
terminated during that period, and they will be eligible to receive those
benefits if their service as Advisory Director/Trustee is terminated before
their term expires or terminates for any reason other than for cause, as
defined in the Retirement Plan.

C. Officers of the Funds:

The officers of the Funds, their ages, and principal occupations during the
past five years, are as follows:

<TABLE>
<CAPTION>
Principal Occupation During Past 5
Name and Age Position(s) with the Fund Years
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Janice Carnicelli (Age 40) Vice President Vice President, Lexington Funds
------------------------------------------------------------------------------------------------
Christie Carr-Waldron (Age 32) Treasurer Treasurer, Lexington Funds
------------------------------------------------------------------------------------------------
Lisa Curcio (Age 40) Vice President and Senior Vice President and Secretary,
Secretary Lexington Management Corporation;
Vice President and Secretary,
Lexington Funds Distributor, Inc.;
Secretary Lexington Global Asset
Managers, Inc.
</TABLE>

41
<PAGE>

<TABLE>
<CAPTION>
Principal Occupation During Past 5
Name and Age Position(s) with the Fund Years
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert M. DeMichele (Age 55) President Chairman and Chief Executive Officer,
Lexington Management Corporation;
President and Director, Lexington
Global Asset Managers, Inc.; Chairman
of the Board, Market Systems
Research, Inc. and Market Systems
Research Advisors, Inc.; Director,
The Trenwick Group, The Navigator's
Group, Inc., Unione Italiana
Reinsurance, and Weeden & Co.;
Trustee, Union College and Smith
Richardson Foundation.
-----------------------------------------------------------------------------------------------
Richard M. Hisey (Age 41) Vice President Executive Vice President (Mutual
Funds), Chief Financial Officer,
Manager Director and Director,
Lexington Management Corporation;
Chief Financial Officer, Vice
President and Director, Lexington
Funds Distributor, Inc.; Chief
Financial Officer, Market Systems
Research Advisors, Inc.; Executive
Vice President (Mutual Funds) and
Chief Financial Officer, Lexington
Global Asset Managers, Inc.
-----------------------------------------------------------------------------------------------
Denis Jamison (Age 52) V.P. of Lexington Senior Vice President, Director of
Money Market Trust, Fixed Income Investment Strategy,
GNMA Income, and Lexington Management Corporation.
Global Income Fund
-----------------------------------------------------------------------------------------------
Richard J. Lavery (Age 46) Vice President Senior Vice President, Lexington
Management Corporation; Vice
President, Lexington Funds
Distributor, Inc.
-----------------------------------------------------------------------------------------------
Christina Lam (Age 35) V.P. of Lexington Vice President, Crosby Asset
Small Cap Asia Growth Management.
Fund
-----------------------------------------------------------------------------------------------
Oleg Larichev (Age 27) V.P. of Lexington Portfolio Manager, Troika Dialog
Troika Dialog Russia Asset Management. Prior to 1997,
Fund Economist, Russian European Center
for Economic Policy.
-----------------------------------------------------------------------------------------------
Timothy McCarthy (Age 32) V.P. of Lexington Portfolio Manager, Troika Dialog
Troika Dialog Russia Asset Management. Prior to 1999,
Fund Executive Director, Alfa Asset
Management. Prior to 1998, Co-founder
and Director, Capital Regent
Securities. Prior to 1995,
Consultant, Deloitte & Touche
Management Consulting, Inc.
-----------------------------------------------------------------------------------------------
Richard T. Saler (Age 38) V.P. of Lexington Senior Vice President, Director of
Global Corporate International Investment Strategy,
Leaders, and Lexington Management Corporation.
International Fund
-----------------------------------------------------------------------------------------------
Pavel Teplukhin (Age 35) V.P. of Lexington President Troika Dialog Asset
Troika Dialog Russia Management. Executive Vice President
Fund and Chief Economist, Troika Dialog.
Prior to 1996, Dr. Teplukin was
Economic Adviser to the First Deputy
Prime Minister at the Ministry of
Finance of the Russian Federation.
</TABLE>

42
<PAGE>

<TABLE>
<CAPTION>
Principal Occupation During Past 5
Name and Age Position(s) with the Fund Years
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James A. Vail (Age 55) V.P. of Lexington Vice President and Portfolio Manager
Goldfund, and Silver (Domestic Equity and Precious
Fund Metals), Lexington Management
Corporation.
------------------------------------------------------------------------------------------
Ruben Vardanian (Age 31) V.P. of Lexington Chairman, Troika Dialog Asset
Troika Dialog Russia Management. President and Chief
Fund Operating Officer, Troika Dialog.
------------------------------------------------------------------------------------------
Alfredo Viegas (Age 31) V.P. of Lexington Chief Executive Officer and Senior
Worldwide Emerging Portfolio Manager, Stratos Advisors,
Markets, and Global Inc. Senior Portfolio Manager and
Technology Fund Partner, VZB Partners LLC. Prior to
1995, Vice President and Latin
American Equity Strategist for
emerging markets, Salomon Brothers.
------------------------------------------------------------------------------------------
Alan H. Wapnick (Age 53) V.P. of Lexington Senior Vice President, Director of
Growth and Income, Domestic Equity Investment Strategy,
and Global Corporate Lexington Management Corporation.
Leaders Fund
------------------------------------------------------------------------------------------
Mohammed Zaidi (Age 30) V.P. of Lexington Portfolio Manager, Stratos Advisors,
Worldwide Emerging Inc. Portfolio Manager, VZB Partners
Markets, and Global LLC. Prior to 1995, Chief Financial
Technology Fund Officer and Partner, Paradigm
Software, Inc.
</TABLE>

The mailing address of each officer of the Funds is P.O. Box 1515, Park 80
West, Plaza Two, Saddle Brook, New Jersey 07663.

The officers of the Funds receive no compensation directly from the Funds
for performing the duties of their offices.

As of the end of the last fiscal year, the Directors/Trustees and officers
as a group owned beneficially less than 1% of all classes of the outstanding
shares of the Funds.

D. The Principal Underwriter:

Lexington Funds Distributor, Inc. is the principal underwriter of the Funds.
It is a wholly owned subsidiary of Lexington Global Asset Managers, Inc.
Lexington Funds Distributor, Inc. has its principal offices at Park 80 West,
Plaza Two, Saddle Brook, New Jersey 07663.

On April 18, 2000, the Boards of Directors/Trustees approved new
Underwriting Agreements on behalf of the Funds pursuant to which Pilgrim
Securities, Inc. will serve as principal underwriter of the Funds effective
upon the closing of the Lexington Acquisition. Pilgrim Securities, Inc. an
indirect, wholly-owned subsidiary of ReliaStar, has its offices at 40 North
Central Avenue, Phoenix, Arizona 85004.

E. The Administrator:

LMC also acts as administrator to the Funds and performs certain
administrative and internal accounting services, including but not limited to,
maintaining general ledger accounts, regulating compliance preparation of
financial information for semi-annual and annual reports, preparing
registration statements, calculating net asset values, communicating with
shareholders, supervising the custodian and providing facilities for such
services. At the meetings of the Boards of Directors/Trustees of the Funds on
April 18, 2000, the Directors/Trustees approved a new administrative agreement
with Pilgrim Group, Inc. Under the agreement, each Fund will pay Pilgrim Group,
Inc. a fee of 0.10% of the Fund's average daily net assets for administrative
and shareholder services.

43
<PAGE>

F. Information About Pilgrim

The table below provides the name and principal occupation of each of the
current directors and principal executive officers of Pilgrim. The address of
each director and officer is 40 N. Central Avenue, Suite 1200, Phoenix, AZ
85004:

<TABLE>
<CAPTION>
Principal Occupation during the past 5
Name and Age Position with the Fund years
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert W. Stallings (Age 51) Chairman and Director Chairman, Chief Executive Officer and
President of Pilgrim Group, Inc.
("Pilgrim Group") (since December
1994); Chairman, Pilgrim Investments,
Inc. (since December 1994); Chairman,
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 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 (Age 42) Vice Chairman, Director, Vice Chairman (since December
Director and 1994), Executive Vice President (since
Executive Vice April 1995), and Director of Structured
President Finance (since April 1998), Pilgrim
Group, Inc. and Pilgrim Investments;
Director (since December 1994) and Vice
Chairman (since November 1995) of
Pilgrim Securities; Executive 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 (Age 49) President and CEO President and Chief Executive Officer
(since August 1996), Pilgrim
Investments; Executive Vice President
of most of the other Pilgrim Funds
(since July 1996). Formerly Chief
Executive Officer (November 1993-
December 1995) HSBC Asset Management
Americas, Inc., and Chief Executive
Officer, and Actuary (May 1986-October
1993) HSBC Life Assurance Co.
----------------------------------------------------------------------------------------------
James M. Hennessy (Age 50) Executive Vice Executive Vice President and Secretary,
President and Pilgrim Capital Corporation and its
Secretary predecessors since April 1998.
Executive Vice President and Secretary
(since April 1998), Pilgrim Group,
Pilgrim Securities and Pilgrim
Investments; Executive Vice President
and Secretary of each of the other
Pilgrim Funds. Formerly Senior Vice
President, Pilgrim Capital Corporation
(April 1995-April 1998).
</TABLE>

44
<PAGE>

<TABLE>
<CAPTION>
Position with the Principal Occupation during the past 5
Name and Age Fund years
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Michael J. Roland (Age 41) Senior Vice Senior Vice President and Chief
President Treasurer Financial Officer, Pilgrim Group,
and Chief Financial Pilgrim Investments and Pilgrim
Officer Securities (since June 1998); Senior
Vice President and Principal Financial
Officer of each of the other Pilgrim
Funds. He served in same capacity from
January, 1995-April, 1997. Formerly,
Chief Financial Officer of Endeaver
Group (April, 1997 to June, 1998).
</TABLE>

The following table identifies other investment companies that are advised
by Pilgrim:

45
<PAGE>

<TABLE>
<CAPTION>
Net Assets as of
Company Name April 30, 2000 Pilgrim's Compensation Rate Fee Waiver
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pilgrim Balanced Fund...
$146,303,153 0.75% of the first $500 million Class A -- 1.60%
of the Fund's average net assets, Class B -- 2.25%
0.675% of the next $500 million Class C -- 2.25%
of average net assets, and 0.65% Class M -- N/A
of the average net assets in Class Q -- 1.25%
excess of $1 billion Class T -- 1.75%
------------------------------------------------------------------------------------------------
Pilgrim Strategic Income
Fund................... $ 11,296,730 0.45% of the first $500 million Class A -- 0.95%
of the Fund's average net assets, Class B -- 1.35%
0.40% of the next $250 million of Class C -- 1.35%
average net assets, and 0.35% of Class M -- N/A
the average net assets in excess Class Q -- 0.85%
of $750 million Class T -- N/A
------------------------------------------------------------------------------------------------
Pilgrim Emerging
Countries Fund......... $246,980,379 1.25% of the Fund's average net Class A -- 2.25%
assets Class B -- 2.90%
Class C -- 2.90%
Class M -- N/A
Class Q -- 1.90%
Class T -- N/A
------------------------------------------------------------------------------------------------
Pilgrim Worldwide Growth
Fund................... $602,711,243 1.00% of the first $500 million Class A -- 1.85%
of the Fund's average net assets, Class B -- 2.50%
0.90% of the next $500 million of Class C -- 2.50%
average net assets, and 0.85% of Class M -- N/A
the average net assets in excess Class Q -- 1.60%
of $1 billion Class T -- N/A
------------------------------------------------------------------------------------------------
Pilgrim International
SmallCap Growth Fund...
$668,069,444 1.00% of the first $500 million Class A -- 1.95%
of the Fund's average net assets, Class B -- 2.60%
0.90% of the next $500 million of Class C -- 2.60%
average net assets, and 0.85% of Class M -- N/A
the average net assets in excess Class Q -- 1.65%
of $1 billion Class T -- N/A
------------------------------------------------------------------------------------------------
Pilgrim International
Core Growth Fund.......
$ 85,214,314 1.00% of the first $500 million Class A -- 1.95%
of the Fund's average net assets, Class B -- 2.60%
0.90% of the next $500 million of Class C -- 2.60%
average net assets, and 0.85% of Class M -- N/A
the average net assets in excess Class Q -- 1.65%
of $1 billion Class T -- N/A
------------------------------------------------------------------------------------------------
Pilgrim Money Market
Fund*.................. $ 68,739,086 0.50% of average net assets if
the Fund has not invested Class A -- 1.50%
substantially all of its assets Class B -- 2.25%
in another investment company, Class C -- 2.25%
0.15% if substantially all of its Class M -- N/A
assets are invested in another Class Q -- N/A
investment company Class T -- N/A
</TABLE>

46
<PAGE>

<TABLE>
<CAPTION>
Net Assets as of
Company Name April 30, 2000 Pilgrim's Compensation Rate Fee Waiver
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pilgrim MidCap Value
Fund................... $ 30,431,196 1/12 of 1.00% of the Fund's Class A -- 1.75%
average daily net assets during Class B -- 2.50%
the month (approximately 1.00% Class C -- 2.50%
on an annual basis) Class M -- 2.25%
Class Q -- 1.75%
Class T -- N/A
--------------------------------------------------------------------------------------------------
Pilgrim LargeCap Leaders
Fund................... $ 40,843,850 1/12 of 1.00% of the Fund's Class A -- 1.75%
average daily net assets during Class B -- 2.50%
the month (approximately 1.00% Class C -- 2.50%
on an annual basis) Class M -- 2.25%
Class Q -- 1.75%
Class T -- N/A
--------------------------------------------------------------------------------------------------
Pilgrim Asia-Pacific
Equity Fund............ $ 29,322,354 1/12 of 1.25% of the Fund's Class A -- 2.00%
average daily net assets during Class B -- 2.75%
the month (approximately 1.25% Class C -- N/A
on an annual basis) Class M -- 2.50%
Class Q -- N/A
Class T -- N/A
--------------------------------------------------------------------------------------------------
Pilgrim MagnaCap
Fund................... $439,317,385 1.00% of the Fund's average N/A
daily net assets on the first
$30 million of net assets. The
annual rate is reduced to 0.75%
on net assets from $30 million
to $250 million; to 0.625% on
net assets from $250 million to
$500 million; and to 0.50% on
net assets over $500 million
--------------------------------------------------------------------------------------------------
Pilgrim High Yield
Fund................... $322,344,790 0.60% of the Fund's average Class A -- 1.10%
daily net assets. Class B -- 1.85%
Class C -- 1.85%
Class M -- 1.60%
Class Q -- 1.10%
Class T -- N/A
--------------------------------------------------------------------------------------------------
Pilgrim Bank and Thrift
Fund................... $369,566,472 1.00% of the first $30 million N/A
of average daily net assets,
0.75% of the next $95 million of
average daily net assets and
0.70% of average daily net
assets in excess of $125 million
--------------------------------------------------------------------------------------------------
Pilgrim Government
Securities Income
Fund................... $112,821,691 0.50% of the Fund's average The annual rate is
daily net assets on the first reduced to 0.45% on
$500 million of net assets. net assets from $500
million to $1
billion, and to
0.40% on net assets
in excess of $1
billion
</TABLE>

47
<PAGE>

<TABLE>
<CAPTION>
Net Assets as of
Company Name April 30, 2000 Pilgrim's Compensation Rate Fee Waiver
---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pilgrim SmallCap
Opportunities
Fund.................. $ 674,376,211 0.75% of the Fund's average daily N/A
net assets.
---------------------------------------------------------------------------------------------
Pilgrim Mid-Cap
Opportunities
Fund................... $ 137,773,156 1.00% of the Fund's average daily N/A
net assets.
---------------------------------------------------------------------------------------------
Pilgrim Growth
Opportunities
Fund................... $ 680,447,976 0.75% of the Fund's average daily N/A
net assets.
---------------------------------------------------------------------------------------------
Pilgrim Growth + Value
Fund................... $ 808,556,707 1.00% of the Fund's average daily N/A
net assets.
---------------------------------------------------------------------------------------------
Pilgrim International
Value Fund............. $1,570,646,841 1.00% of the Fund's average daily N/A
net assets.
---------------------------------------------------------------------------------------------
Pilgrim Emerging
Markets Value
Fund................... $ 16,354,604 1.00% of the Fund's average daily N/A
net assets.
---------------------------------------------------------------------------------------------
Pilgrim Research
Enhanced Index
Fund................... $ 251,917,222 0.70% of the Fund's average daily N/A
net assets.
---------------------------------------------------------------------------------------------
Pilgrim High Total
Return Fund II......... $ 92,850,562 0.75% of the Fund's average daily N/A
net assets.
---------------------------------------------------------------------------------------------
Pilgrim High Total
Return Fund............ $ 236,910,599 0.75% on the first $250 million N/A
of aggregate average daily net
assets, 0.70% on the next $250
million of such assets, 0.65% on
the next $250 million of such
assets; 0.60% on the next $250
million of such assets, and 0.55%
on the remaining aggregate daily
net assets in excess of $1
billion.
</TABLE>

48
<PAGE>

<TABLE>
<CAPTION>
Net Assets as of
Company Name April 30, 2000 Pilgrim's Compensation Rate Fee Waiver
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pilgrim SmallCap
Opportunities
Portfolio of
Pilgrim Variable
Products Trust........ $105,934,775 0.75% on the first $250,000,000 Voluntary expense
of aggregate average daily net cap of 0.90%.
assets; 0.70% on the next
$250,000,000 of such assets;
0.65% on the next $250,000,000 of
such assets; 0.60% on the next
$250,000,00 of such assets; and
0.55% in excess of $1 billion of
such assets.
-----------------------------------------------------------------------------------------------
Pilgrim Growth +
Value Portfolio of
Pilgrim Variable
Products Trust........ $131,592,674 0.75% on the first $250,000,000 Voluntary expense
of aggregate average daily net cap of 0.80%.
assets; 0.70% on the next
$250,000,000 of such assets;
0.65% on the next $250,000,000 of
such assets; 0.60% on the next
$250,000,00 of such assets; and
0.55% in excess of $1 billion of
such assets.
-----------------------------------------------------------------------------------------------
Pilgrim Research
Enhanced Index
Portfolio of Pilgrim
Variable
Products Trust........ $ 28,059,885 0.75% on the first $250,000,000 Voluntary expense
of aggregate average daily net cap of 0.90%.
assets; 0.70% on the next
$250,000,000 of such assets;
0.65% on the next $250,000,000 of
such assets; 0.60% on the next
$250,000,00 of such assets; and
0.55% in excess of $1 billion of
such assets.
-----------------------------------------------------------------------------------------------
Pilgrim High
Yield Bond
Portfolio of
Pilgrim Variable
Products Trust........ $ 14,088,451 0.75% on the first $250,000,000 Voluntary expense
of aggregate average daily net cap of 0.80%.
assets; 0.70% on the next
$250,000,000 of such assets;
0.65% on the next $250,000,000 of
such assets; 0.60% on the next
$250,000,00 of such assets; and
0.55% in excess of $1 billion of
such assets.
</TABLE>

49
<PAGE>

<TABLE>
<CAPTION>
Net Assets as of
Company Name April 30, 2000 Pilgrim's Compensation Rate Fee Waiver
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pilgrim International
Value Portfolio of
Pilgrim Variable
Products
Trust.................. $26,029,154 1.00% of aggregate average daily Voluntary expense
net assets cap of 1.00%.
-------------------------------------------------------------------------------------------------
Pilgrim Growth
Opportunities
Portfolio of
Pilgrim Variable
Products
Trust.................. $0 0.75% of aggregate average daily Voluntary expense
(Commenced net assets cap of 0.90%.
operations on
May 1, 2000)
-------------------------------------------------------------------------------------------------
Pilgrim MagnaCap
Portfolio of
Pilgrim Variable
Products
Trust.................. $0 0.75% of aggregate average daily Voluntary expense
(Commenced net assets cap of 0.90%.
operations on
May 1, 2000)
-------------------------------------------------------------------------------------------------
Pilgrim MidCap
Opportunities
Portfolio of
Pilgrim Variable
Products
Trust.................. $0 0.75% of aggregate average daily Voluntary expense
(Commenced net assets cap of 0.90%.
operations on
May 1, 2000)
-------------------------------------------------------------------------------------------------
Pilgrim Prime Rate
Trust.................. $1,715,854,189 0.80% of the average daily net N/A
(Net assets assets
plus borrowings)
</TABLE>
* The Money Market Fund will also pay advisory fees to Reserve Management
Company, Inc., the investment adviser of Primary Institutional Fund, a series
of Reserve Institutional Trust, the investment company in which the Money
Market Fund invests substantially all of its assets.

50
<PAGE>

G. LMC and Its Agreements With the Funds:

LMC, a wholly-owned subsidiary of LGAM, is located at P.O. Box 1515, Park 80
West Plaza Two, Saddle Brook, New Jersey 07663. LMC and its predecessor
companies were established in 1938. Descendants of Lunsford Richardson, Sr.,
their spouses, trusts and other related entities have a controlling interest in
LGAM. LMC advises private clients as well as the Lexington Funds. The names,
addresses and principal occupation of each director and the principal executive
officer of LMC are:

<TABLE>
<CAPTION>
Principal Occupation during the past 5
Name and Age Position with LMC years
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert M. DeMichele (Age 55) Chairman and Chairman and Chief Executive Officer,
Chief Executive Lexington Management Corporation;
Officer President and Director, Lexington
Global Asset Managers, Inc.; Chairman
of the Board, Market Systems Research,
Inc. and Market Systems Research
Advisors, Inc.; Director, The Trenwick
Group, The Navigator's Group, Inc.,
Unione Italiana Reinsurance, and Weeden
& Co.; Vice Chairman of the Board of
Trustees, Union College and Trustee,
Smith Richardson Foundation
-------------------------------------------------------------------------------------------
Richard M. Hisey (Age 41) Executive Vice Executive Vice President (Mutual
President Funds), Chief Financial Officer,
(Mutual Funds), Managing Director and Director,
Chief Financial Lexington Management Corporation; Chief
Officer, Financial Officer, Vice President and
Managing Director, Lexington Funds Distributor,
Director and Inc.; Chief Financial Officer, Market
Director Systems Research Advisors, Inc.;
Executive Vice President (Mutual Funds)
and Chief Financial Officer, Lexington
Global Asset Managers, Inc.
-------------------------------------------------------------------------------------------
Stuart S. Richardson (Age ) Director Director, Lexington Management
Corporation; Chairman, Lexington Global
Asset Managers, Inc.; Vice Chairman,
Vanguard Cellular Systems, Inc. Prior
to January 1986, Chairman, Richardson-
Vicks, Inc.
-------------------------------------------------------------------------------------------
Lisa Curcio (Age 40) Senior Vice Senior Vice President and Secretary,
President and Lexington Management Corporation; Vice
Secretary President and Secretary, Lexington
Funds Distributor, Inc.; Secretary,
Lexington Global Asset Managers, Inc.
</TABLE>

The address of each director and officer of LMC is P.O. Box 1515, Park 80
West Plaza Two, Saddle Brook, New Jersey 07663.

51
<PAGE>

The following chart provides information related to LMC's investment
advisory agreements with the Funds:

<TABLE>
<CAPTION>
Amount of Fee
Date Last Approved Paid During Last
Name of the Fund Date of Agreement By Shareholders Fiscal Year
---------------------------------------------------------------------------------
<S> <C> <C> <C>
Lexington Global
Corporate Leaders Fund,
Inc. .................. April 8, 1988 April 8, 1988 $ 176,043
---------------------------------------------------------------------------------
Lexington Global
Technology Fund, Inc... December 27, 1999 December 27, 1999 $ 0
---------------------------------------------------------------------------------
Lexington GNMA Income
Fund, Inc.............. April 14, 1981 April 14, 1981 $1,844,256
---------------------------------------------------------------------------------
Lexington Goldfund,
Inc.................... May 13, 1986 May 13, 1986 $ 583,491
---------------------------------------------------------------------------------
Lexington Growth and
Income Fund, Inc. ..... April 15, 1992 April 15, 1992 $1,498,729
---------------------------------------------------------------------------------
Lexington International
Fund, Inc.............. January 3, 1993 January 3, 1993 $ 224,416
---------------------------------------------------------------------------------
Lexington Silver Fund,
Inc.................... March 16, 1992 March 16, 1992 $ 261,004
---------------------------------------------------------------------------------
Lexington Small Cap Asia
Growth Fund, Inc. ..... June 17, 1995 June 17, 1995 $ 167,228*
---------------------------------------------------------------------------------
Lexington Troika Dialog
Russia Fund, Inc....... April 3, 1996 March 27, 1996 $ 444,970
---------------------------------------------------------------------------------
Lexington Worldwide
Emerging Markets Fund,
Inc. .................. April 14, 1991 April 14, 1991 $ 785,431
---------------------------------------------------------------------------------
Lexington Global Income
Fund................... November 30, 1994 November 30, 1994 $ 334,433
---------------------------------------------------------------------------------
Lexington Money Market
Fund................... April 14, 1981 April 14, 1981 $ 422,726*
</TABLE>
* LMC reimbursed Lexington Money Market Fund and Lexington Small Cap Asia
Growth Fund $9,546 and $67,545, respectively.

H. Submission of Proposals for the Next Meeting of the Fund:

Under each Fund's Articles of Incorporation or Declaration of Trust, as the
case may be, and By-Laws, annual meetings of shareholders are not required to
be held unless necessary under the 1940 Act. Therefore, the Funds do not hold
shareholder meetings on an annual basis. A shareholder proposal intended to be
presented at any meeting hereafter called should be sent to the Fund at PO Box
1515, Saddle Brook, New Jersey 07663, and must be received by the Fund within a
reasonable time before the solicitation relating thereto is made in order to be
included in the notice or proxy statement related to such meeting. The
submission by a shareholder of a proposal for inclusion in a proxy statement
does not guarantee that it will be included. Shareholder proposals are subject
to certain regulations under federal securities law.

52
<PAGE>

Exhibit A

INVESTMENT MANAGEMENT AGREEMENT

AGREEMENT made this day of , 2000 between [Name of Fund] (the
"Fund"), a [type of entity] and Pilgrim Investments, Inc. (the "Manager"), a
Delaware corporation (the "Agreement").

WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");

WHEREAS, the Fund is authorized to issue shares of common stock in separate
series with each such series representing interests in a separate portfolio of
securities and other assets;

WHEREAS, the Fund may offer shares of additional series in the future;

WHEREAS, the Fund desires to avail itself of the services of the Manager for
the provision of advisory and management services for the Fund; and

WHEREAS, the Manager is willing to render such services to the Fund;

NOW, THEREFORE, in consideration of the premises, the promises and mutual
covenants herein contained, it is agreed between the parties as follows:

1. Appointment. The Fund hereby appoints the Manager, subject to the
direction of the Board of Directors, for the period and on the terms set forth
in this Agreement, to provide advisory, management, and other services, as
described herein, with respect to each series of the Fund (individually and
collectively referred to herein as "Series"). The Manager accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.

In the event the Fund establishes and designates additional series with
respect to which it desires to retain the Manager to render advisory services
hereunder, it shall notify the Manager in writing. If the Manager is willing to
render such services, it shall notify the Fund in writing, whereupon such
additional series shall become a Series hereunder.

2. Services of the Manager. The Manager represents and warrants that it is
registered as an investment adviser under the Investment Advisers Act of 1940
and will maintain such registration for so long as required by applicable law.
Subject to the general supervision of the Board of Directors of the Fund, the
Manager shall provide the following advisory, management, and other services
with respect to the Series:

(a) Provide general, investment advice and guidance with respect to the
Series and provide advice and guidance to the Fund's Directors, and oversee
the management of the investments of the Series and the composition of each
Series' portfolio of securities and investments, including cash, and the
purchase, retention and disposition thereof, in accordance with each
Series' investment objective or objectives and policies as stated in the
Fund's current registration statement, which management may be provided by
others selected by the Manager and approved by the Board of Directors as
provided below or directly by the Manager as provided in Section 3 of this
Agreement;

(b) In the event that the Manager wishes to select others to render
investment management services, the Manager shall analyze, select and
recommend for consideration and approval by the Fund's Board of Directors
investment advisory firms (however organized) to provide investment advice
to one or more of the Series, and, at the expense of the Manager, engage
(which engagement may also be by the Fund) such investment advisory firms
to render investment advice and manage the investments of such Series and
the composition of each such Series' portfolio of securities and
investments, including cash, and the purchase, retention and disposition
thereof, in accordance with the Series' investment objective or objectives
and
<PAGE>

policies as stated in the Fund's current registration statement (any such
firms approved by the Board of Directors and engaged by the Fund and/or the
Manager are referred to herein as "Sub-Advisers");

(c) Periodically monitor and evaluate the performance of the Sub-
Advisers with respect to the investment objectives and policies of the
Series;

(d) Monitor the Sub-Advisers for compliance with the investment
objective or objectives, policies and restrictions of each Series, the 1940
Act, Subchapter M of the Internal Revenue Code, and if applicable,
regulations under such provisions, and other applicable law;

(e) If appropriate, analyze and recommend for consideration by the
Fund's Board of Directors termination of a contract with a Sub-Adviser
under which the Sub-Adviser provides investment advisory services to one or
more of the Series;

(f) Supervise Sub-Advisers with respect to the services that such Sub-
Advisers provide under respective portfolio management agreements ("Sub-
Adviser Agreements");

(g) Render to the Board of Directors of the Fund such periodic and
special reports as the Board may reasonably request; and

(h) Make available its officers and employees to the Board of Directors
and officers of the Fund for consultation and discussions regarding the
administration and management of the Series and services provided to the
Fund under this Agreement.

3. Investment Management Authority. In the event the Manager wishes to
render investment management services directly to a Series, then with respect
to any such Series, the Manager, subject to the supervision of the Fund's Board
of Directors, will provide a continuous investment program for the Series'
portfolio and determine the composition of the assets of the Series' portfolio,
including determination of the purchase, retention, or sale of the securities,
cash, and other investments contained in the portfolio. The Manager will
provide investment research and conduct a continuous program of evaluation,
investment, sales, and reinvestment of the Series' assets by determining the
securities and other investments that shall be purchased, entered into, sold,
closed, offered to the public, or exchanged for the Series, when these
transactions should be executed, and what portion of the assets of the Series
should be held in the various securities and other investments in which it may
invest, and the Manager is hereby authorized to execute and perform such
services on behalf of the Series. To the extent permitted by the investment
policies of the Series, the Manager shall make decisions for the Series as to
foreign currency matters and make determinations as to, and execute and
perform, foreign currency exchange contracts on behalf of the Series. The
Manager will provide the services under this Agreement in accordance with the
Series' investment objective or objectives, policies, and restrictions as
stated in the Fund's Registration Statement filed with the Securities and
Exchange Commission (the "SEC"), as amended. Furthermore:

(a) The Manager will manage the Series so that each will qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code. In managing the Series in accordance with these requirements, the
Manager shall be entitled to receive and act upon advice of counsel to the
Fund or counsel to the Manager.

(b) The Manager will conform with the 1940 Act and all rules and
regulations thereunder, all other applicable federal and state laws and
regulations, with any applicable procedures adopted by the Fund's Board of
Directors, and the provisions of the Registration Statement of the Fund
under the Securities Act of 1933 and the 1940 Act, as supplemented or
amended.

(c) On occasions when the Manager deems the purchase or sale of a
security to be in the best interest of the Series as well as any other
investment advisory clients, the Manager may, to the extent permitted by
applicable laws and regulations and any applicable procedures adopted by
the Fund's Board of Directors, but shall not be obligated to, aggregate the
securities to be so sold or purchased with those of its other clients where
such aggregation is not inconsistent with the policies set forth in the
Registration Statement. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the

2
<PAGE>

transaction, will be made by the Manager in a manner that is fair and
equitable in the judgment of the Manager in the exercise of its fiduciary
obligations to the Fund and to such other clients.

(d) In connection with the purchase and sale of securities of the
Series, the Manager will arrange for the transmission to the custodian for
the Fund on a daily basis, of such confirmation, trade tickets, and other
documents and information, including, but not limited to, Cusip, Cedel, or
other numbers that identify securities to be purchased or sold on behalf of
the Series, as may be reasonably necessary to enable the custodian to
perform its administrative and recordkeeping responsibilities with respect
to the Series. With respect to portfolio securities to be purchased or sold
through the Depository Trust Company, the Manager will arrange for the
prompt transmission of the confirmation of such trades to the Fund's
custodian.

(e) The Manager will assist the custodian or portfolio accounting agent
for the Fund in determining, consistent with the procedures and policies
stated in the Registration Statement for the Fund and any applicable
procedures adopted by the Fund's Board of Directors, the value of any
portfolio securities or other assets of the Series for which the custodian
or portfolio accounting agent seeks assistance or review from the Manager.

(f) The Manager will make available to the Fund, promptly upon request,
any of the Series' or the Managers' investment records and ledgers as are
necessary to assist the Fund to comply with requirements of the 1940 Act,
as well as other applicable laws. The Manager will furnish to regulatory
authorities having the requisite authority any information or reports in
connection with its services which may be requested in order to ascertain
whether the operations of the Fund are being conducted in a manner
consistent with applicable laws and regulations.

(g) The Manager will regularly report to the Fund's Board of Directors
on the investment program for the Series and the issuers and securities
represented in the Series' portfolio, and will furnish the Fund's Board of
Directors with respect to the Series such periodic and special reports as
the Directors may reasonably request.

(h) In connection with its responsibilities under this Section 3, the
Manager is responsible for decisions to buy and sell securities and other
investments for the Series' portfolio, broker-dealer selection, and
negotiation of brokerage commission rates. The Manager's primary
consideration in effecting a security transaction will be to obtain the
best execution for the Series, taking into account the factors specified in
the Prospectus and/or Statement of Additional Information for the Fund,
which include price (including the applicable brokerage commission or
dollar spread), the size of the order, the nature of the market for the
security, the timing of the transaction, the reputation, experience and
financial stability of the broker-dealer involved, the quality of the
service, the difficulty of execution, execution capabilities and
operational facilities of the firms involved, and the firm's risk in
positioning a block of securities. Accordingly, the price to the Series in
any transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified, in the judgment of
the Manager in the exercise of its fiduciary obligations to the Fund, by
other aspects of the portfolio execution services offered. Subject to such
policies as the Board of Directors may determine and consistent with
Section 28(e) of the Securities Exchange Act of 1934, as amended, the
Manager shall not be deemed to have acted unlawfully or to have breached
any duty created by this Agreement or otherwise solely by reason of its
having caused the Series to pay a broker-dealer for effecting a portfolio
investment transaction in excess of the amount of commission another
broker-dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker-dealer, viewed in terms of either that particular
transaction or the Manager's overall responsibilities with respect to the
Series and to its other clients as to which it exercises investment
discretion. To the extent consistent with these standards and in accordance
with Section 11(a) of the Securities Exchange Act of 1934 and Rule 11a2-
2(T) thereunder, the Manager is further authorized to allocate the orders
placed by it on behalf of the Series to the Manager if it is registered as
a broker-dealer with the SEC, to an affiliated broker-dealer, or to such
brokers and dealers who also provide research or statistical material or
other services to the Series, the Manager or an

3
<PAGE>

affiliate of the Manager. Such allocation shall be in such amounts and
proportions as the Manager shall determine consistent with the above
standards, and the Manager will report on said allocation regularly to the
Board of Directors of the Fund indicating the broker-dealers to which such
allocations have been made and the basis therefor.

4. Conformity with Applicable Law. The Manager, in the performance of its
duties and obligations under this Agreement, shall act in conformity with the
Registration Statement of the Fund and with the instructions and directions of
the Board of Directors of the Fund and will conform to, and comply with, the
requirements of the 1940 Act and all other applicable federal and state laws
and regulations.

5. Exclusivity. The services of the Manager to the Fund under this Agreement
are not to be deemed exclusive, and the Manager, or any affiliate thereof,
shall be free to render similar services to other investment companies and
other clients (whether or not their investment objectives and policies are
similar to those of any of the Series) and to engage in other activities, so
long as its services hereunder are not impaired thereby.

6. Documents. The Fund has delivered properly certified or authenticated
copies of each of the following documents to the Manager and will deliver to it
all future amendments and supplements thereto, if any:

(a) certified resolution of the Board of Directors of the Fund
authorizing the appointment of the Manager and approving the form of this
Agreement;

(b) the Registration Statement as filed with the SEC and any amendments
thereto; and

(c) exhibits, powers of attorney, certificates and any and all other
documents relating to or filed in connection with the Registration
Statement described above.

7. Records. The Fund agrees to maintain and to preserve for the periods
prescribed under the 1940 Act any such records as are required to be maintained
by the Fund with respect to the Series by the 1940 Act. The Manager further
agrees that all records of the Series are the property of the Fund and, to the
extent held by the Manager, it will promptly surrender any of such records upon
request.

8. Expenses. During the term of this Agreement, the Manager will pay all
expenses incurred by it in connection with its activities under this Agreement,
except such expenses as are assumed by the Fund under this Agreement and such
expenses as are assumed by a Sub-Adviser under its Sub-Adviser Agreement. The
Manager further agrees to pay all fees payable to the Sub-Advisers, executive
salaries and expenses of the Directors of the Fund who are employees of the
Manager or its affiliates, and office rent of the Fund. The Fund shall be
responsible for all of the other expenses of its operations, including, without
limitation, the management fee payable hereunder; brokerage commissions;
interest; legal fees and expenses of attorneys; fees of auditors, transfer
agents and dividend disbursing agents, custodians and shareholder servicing
agents; the expense of obtaining quotations for calculating each Fund's net
asset value; taxes, if any, and the preparation of the Fund's tax returns; cost
of stock certificates and any other expenses (including clerical expenses) of
issue, sale, repurchase or redemption of shares; expenses of registering and
qualifying shares of the Fund under federal and state laws and regulations
(including the salary of employees of the Manager engaged in the registering
and qualifying of shares of the Fund under federal and state laws and
regulations or a pro-rata portion of the salary of employees to the extent so
engaged); salaries of personnel involved in placing orders for the execution of
the Fund's portfolio transactions; expenses of disposition or offering any of
the portfolio securities held by a Series; expenses of printing and
distributing reports, notices and proxy materials to existing shareholders;
expenses of printing and filing reports and other documents filed with
governmental agencies; expenses in connection with shareholder and director
meetings; expenses of printing and distributing prospectuses and statements of
additional information to existing shareholders; fees and expenses of Directors
of the Fund who are not employees of the Manager or any Sub-Adviser, or their
affiliates; trade association dues; insurance premiums; extraordinary expenses
such as litigation expenses. To the extent the Manager incurs any costs or
performs any services which are an obligation of the Fund, as set forth herein,
the Fund shall promptly reimburse the Manager for such costs and expenses. To
the extent the services for which the Fund is

4
<PAGE>

obligated to pay are performed by the Manager, the Manager shall be entitled to
recover from the Fund only to the extent of its costs for such services.

9. Compensation. For the services provided by the Manager to each Series
pursuant to this Agreement, the Fund will pay to the Manager an annual fee
equal to the amount specified for such Series in Schedule A hereto, payable
monthly in arrears. Payment of the above fees shall be in addition to any
amount paid to the Manager for the salary of its employees for performing
services which are an obligation of the Fund as provided in Section 8. The fee
will be appropriately pro-rated to reflect any portion of a calendar month that
this Agreement is not in effect between us.

10. Liability of the Manager. The Manager may rely on information reasonably
believed by it to be accurate and reliable. Except as may otherwise be required
by the 1940 Act or the rules thereunder, neither the Manager nor its
stockholders, officers, directors, employees, or agents shall be subject to,
and the Fund will indemnify such persons from and against, any liability for,
or any damages, expenses, or losses incurred in connection with, any act or
omission connected with or arising out of any services rendered under this
Agreement, except by reason of willful misfeasance, bad faith, or gross
negligence in the performance of the Manager's duties, or by reason of reckless
disregard of the Manager's obligations and duties under this Agreement. Except
as may otherwise be required by the 1940 Act or the rules thereunder, neither
the Manager nor its stockholders, officers, directors, employees, or agents
shall be subject to, and the Fund will indemnify such persons from and against,
any liability for, or any damages, expenses, or losses incurred in connection
with, any act or omission by a Sub-Adviser or any of the Sub-Adviser's
stockholders or partners, officers, directors, employees, or agents connected
with or arising out of any services rendered under a Sub-Adviser Agreement,
except by reason of willful misfeasance, bad faith, or gross negligence in the
performance of the Manager's duties under this Agreement, or by reason of
reckless disregard of the Manager's obligations and duties under this
Agreement. No director, officer, employee or agent of the Fund shall be subject
to any personal liability whatsoever, in his or her official capacity, to any
person, including the Sub-Adviser, other than to the Fund or its shareholders,
in connection with Fund property or the affairs of the Fund, save only that
arising from his or her bad faith, willful misfeasance, gross negligence or
reckless disregard of his or her duty to such person; and all such persons
shall look solely to the Fund property for satisfaction of claims of any nature
against a director, officer, employee or agent of the Fund arising in
connection with the affairs of the Fund. Moreover, the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to a Series shall be enforceable against the assets and property of
that Series only, and not against the assets or property of any other series of
the Fund.

11. Continuation and Termination. This Agreement shall become effective on
the date first written above, subject to the condition that the Fund's Board of
Directors, including a majority of those Directors who are not interested
persons (as such term is defined in the 1940 Act) of the Manager, and the
shareholders of each Series, shall have approved this Agreement. Unless
terminated as provided herein, the Agreement shall continue in full force and
effect for two (2) years from the effective date of this Agreement, and shall
continue from year to year there-after with respect to each Series so long as
such continuance is specifically approved at least annually (i) by the vote of
a majority of the Board of Directors of the Fund, or (ii) by vote of a majority
of the outstanding voting shares of the Series (as defined in the 1940 Act),
and provided continuance is also approved by the vote of a majority of the
Board of Directors of the Fund who are not parties to this Agreement or
"interested persons" (as defined in the 1940 Act) of the Fund or the Manager,
cast in person at a meeting called for the purpose of voting on such approval.
This Agreement may not be amended in any material respect without a majority
vote of the outstanding voting shares (as defined in the 1940 Act).

However, any approval of this Agreement by the holders of a majority of the
outstanding shares (as defined in the 1940 Act) of a Series shall be effective
to continue this Agreement with respect to such Series notwithstanding (i) that
this Agreement has not been approved by the holders of a majority of the
outstanding shares of any other Series or (ii) that this Agreement has not been
approved by the vote of a majority of the outstanding shares of the Fund,
unless such approval shall be required by any other applicable law or

5
<PAGE>

otherwise. This Agreement may be terminated by the Fund at any time, in its
entirety or with respect to a Series, without the payment of any penalty, by
vote of a majority of the Board of Directors of the Fund or by a vote of a
majority of the outstanding voting shares of the Fund, or with respect to a
Series, by vote of a majority of the outstanding voting shares of such Series,
on sixty (60) days' written notice to the Manager, or by the Manager at any
time, without the payment of any penalty, on sixty (60) days' written notice to
the Fund. This Agreement will automatically and immediately terminate in the
event of its "assignment" as described in the 1940 Act.

12. Use of Name. It is understood that the name "Pilgrim Investments, Inc."
or any derivative thereof (including the name "Pilgrim") or logo associated
with that name is the valuable property of the Manager and its affiliates, and
that the Fund and/or the Series have the right to use such name (or derivative
or logo) only so long as this Agreement shall continue with respect to such
Fund and/or Series. Upon termination of this Agreement, the Fund (or Series)
shall forthwith cease to use such name (or derivative or logo) and, in the case
of the Fund, shall promptly amend its Articles of Incorporation to change its
name (if such name is included therein).

13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.

14. Applicable Law.

(a) This Agreement shall be governed by the laws of the State of Arizona,
provided that nothing herein shall be construed in a manner inconsistent with
the 1940 Act, the Investment Advisers Act of 1940, or any rules or order of the
SEC thereunder.

(b) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.

(c) The captions of this Agreement are included for convenience only and in
no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.

[Name of Fund]

By: _________________________________

___________________________________
Title

PILGRIM INVESTMENTS, INC.

By: _________________________________

___________________________________
Title

6
<PAGE>

Schedule A

<TABLE>
<CAPTION>
Fund Annual Investment Management Fee
---- --------------------------------
<S> <C>
Pilgrim Growth and Income Fund, 0.75% of the Fund's average daily net
Inc. assets up to $100 million, 0.60% of the
Fund's average daily net assets in excess
of $100 million up to $150 million, 0.50%
of the Fund's average daily net assets in
excess of $150 million up to $250 million,
and 0.40% of the Fund's average daily net
assets in excess of $250 million.

Pilgrim Global Corporate Leaders 1.00% of the Fund's average daily net
Fund, Inc. assets.

Pilgrim International Fund, Inc. 1.00% of the Fund's average daily net
assets.

Pilgrim Worldwide Emerging Markets 1.00% of the Fund's average daily net
Fund, Inc. assets.

Pilgrim Small Cap Asia Growth 1.25% of the Fund's average daily net
Fund, Inc. assets.

Pilgrim Troika Dialog Russia Fund, 1.25% of the Fund's average daily net
Inc. assets.

Pilgrim GNMA Income Fund, Inc. 0.60% of the Fund's average daily net
assets up to $150 million, 0.50% of the
Fund's average daily net assets in excess
of $150 million up to $400 million, 0.45%
of the Fund's average daily net assets in
excess of $400 million up to $800 million,
and 0.40% of the Fund's average daily net
assets in excess of $800 million.

Pilgrim Global Income Fund 1.00% of the Fund's average daily net
assets.

Pilgrim Money Market Trust 0.50% of the Trust's average daily net
assets up to $500 million, and 0.45% of the
Trust's average daily net assets in excess
of $500 million.

Pilgrim Goldfund, Inc. 1.00% of the Fund's average daily net
assets up to $50 million, and 0.75% of the
Fund's average daily net assets in excess
of $50 million.

Pilgrim Silver Fund, Inc. 1.00% of the Fund's average daily net
assets of the first $30 million, and 0.75%
of the Fund's average daily net assets in
excess of $30 million.

Pilgrim Emerging Markets Fund, 0.85% of the Fund's average daily net
Inc. assets.

Pilgrim Natural Resources Trust 0.85% of the Fund's average daily net
assets.

Pilgrim Global Technology Fund 1.25% of the Fund's average daily net
assets.

Pilgrim Corporate Leaders Trust [To Be Added]
Fund
</TABLE>

7
<PAGE>

Exhibit B

SUB-ADVISER AGREEMENT

AGREEMENT made this day of , 2000 between Pilgrim Investments, Inc.,
a Delaware corporation (the "Manager"), and [Name of Sub-Adviser], a [type of
entity] (the "Sub-Adviser").

WHEREAS, [Name of Fund] (the "Fund") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end, management
investment company;

WHEREAS, the Fund is authorized to issue separate series, each series having
its own investment objective or objectives, policies, and limitations;

WHEREAS, the Fund may offer shares of additional series in the future;

WHEREAS, pursuant to an Investment Management Agreement, dated the date
hereof (the "Management Agreement"), a copy of which has been provided to the
Sub-Adviser, the Fund has retained the Manager to render advisory and
management services with respect to each of the Fund's series; and

WHEREAS, pursuant to authority granted to the Manager in the Management
Agreement, the Manager wishes to retain the Sub-Adviser to furnish investment
advisory services to one or more of the series of the Fund, and the Sub-Adviser
is willing to furnish such services to the Fund and the Manager;

NOW, THEREFORE, in consideration of the premises and the promises and mutual
covenants herein contained, it is agreed between the Manager and the Sub-
Adviser as follows:

1. Appointment. The Manager hereby appoints the Sub-Adviser to act as the
investment adviser and manager to the series of the Fund set forth on Schedule
A hereto (the "Series") for the periods and on the terms set forth in this
Agreement The Sub-Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided.

In the event the Fund designates one or more series (other than the Series)
with respect to which the Manager wishes to retain the Sub-Adviser to render
investment advisory services hereunder, it shall notify the Sub-Adviser in
writing. If the Sub-Adviser is willing to render such services, it shall notify
the Manager in writing, whereupon such series shall become a Series hereunder,
and be subject to this Agreement.

2. Sub-Adviser Duties. Subject to the supervision of the Fund's Board of
Directors and the Manager, the Sub-Adviser will provide a continuous investment
program for each Series' portfolio and determine in its discretion the
composition of the assets of each Series' portfolio, including determination of
the purchase, retention, or sale of the securities, cash, and other investments
contained in the portfolio. The Sub-Adviser will provide investment research
and conduct a continuous program of evaluation, investment, sales, and
reinvestment of each Series' assets by determining the securities and other
investments that shall be purchased, entered into, sold, closed, or exchanged
for the Series, when these transactions should be executed, and what portion of
the assets of the Series should be held in the various securities and other
investments in which it may invest. To the extent permitted by the investment
policies of each Series, the Sub-Adviser shall make decisions for the Series as
to foreign currency matters and make determinations as to and execute and
perform foreign currency exchange contracts on behalf of the Series. The Sub-
Adviser will provide the services under this Agreement in accordance with each
Series' investment objective or objectives, policies, and restrictions as
stated in the Fund's Registration Statement filed with the Securities and
Exchange Commission ("SEC"), as amended, copies of which shall be sent to the
Sub-Adviser by the Manager prior to the commencement of this Agreement and
promptly following any such amendment. The Sub-Adviser further agrees as
follows:

(a) The Sub-Adviser will conform with the 1940 Act and all rules and
regulations thereunder, all other applicable federal and state laws and
regulations, with any applicable procedures adopted by the
<PAGE>

Fund's Board of Directors of which the Sub-Adviser has been sent a copy,
and the provisions of the Registration Statement of the Fund filed under
the Securities Act of 1933 (the "1933 Act") and the 1940 Act, as
supplemented or amended, of which the Sub-Adviser has received a copy, and
with the Manager's portfolio manager operating policies and procedures as
in effect on the date hereof, as such policies and procedures may be
revised or amended by the Manager and agreed to by the Sub-Adviser. In
carrying out its duties under the Sub-Adviser Agreement, the Sub-Adviser
will comply with the following policies and procedures:

(i) The Sub-Adviser will manage each Series so that it meets the
income and asset diversification requirements of Section 851 of the
Internal Revenue Code.

(ii) The Sub-Adviser will vote all proxies solicited by or with
respect to the issuers of securities which assets of the Series are
invested consistent with any procedures or guidelines promulgated by
the Board or the Manager, or if none, in the discretion of the Sub-
Adviser based upon the best interests of the Series. The Sub-Adviser
will maintain appropriate records detailing its voting of proxies on
behalf of the Fund and will provide to the Fund at least quarterly a
report setting forth the proposals voted on and how the Series' shares
were voted since the prior report, including the name of the
corresponding issuers.

(iii) In connection with the purchase and sale of securities for
each Series, the Sub-Adviser will arrange for the transmission to the
custodian and portfolio accounting agent for the Series on a daily
basis, such confirmation, trade tickets, and other documents and
information, including, but not limited to, Cusip, Cedel, or other
numbers that identify securities to be purchased or sold on behalf of
the Series, as may be reasonably necessary to enable the custodian and
portfolio accounting agent to perform its administrative and
recordkeeping responsibilities with respect to the Series. With respect
to portfolio securities to be settled through the Depository Trust
Company, the Sub-Adviser will arrange for the prompt transmission of
the confirmation of such trades to the Fund's custodian and portfolio
accounting agent.

(iv) The Sub-Adviser will assist the custodian and portfolio
accounting agent for the Fund in determining or confirming, consistent
with the procedures and policies stated in the Registration Statement
for the Fund or adopted by the Board of Directors, the value of any
portfolio securities or other assets of the Series for which the
custodian and portfolio accounting agent seeks assistance from or
identifies for review by the Sub-Adviser. The parties acknowledge that
the Sub-Adviser is not a custodian of the Series' assets and will not
take possession or custody of such assets.

(v) The Sub-Adviser will provide the Manager, no later than the 20th
day following the end of each of the first three fiscal quarters of
each Series and the 45th day following the end of each Series' fiscal
year, a letter to shareholders (to be subject to review and editing by
the Manager) containing a discussion of those factors referred to in
Item 5(a) of 1940 Act Form N-1A in respect of both the prior quarter
and the fiscal year to date.

(vi) The Sub-Adviser will complete and deliver to the Manager a
written compliance checklist in a form provided by the Manager for each
month by the 10th day of the following month.

(vii) The parties agree that in the event that the Manager or an
affiliated person of the Manager sends sales literature or other
promotional material to the Sub-Adviser for its approval and the Sub-
Adviser has not commented within 10 days, the Manager and its
affiliated persons may use and distribute such sales literature or
other promotional material.

(b) In connection with the purchase and sale of securities for each
Series, the Sub-Adviser will arrange for the transmission to the custodian
and portfolio accounting agent for the Series on a daily basis, such
confirmation, trade tickets, and other documents and information,
including, but not limited to, Cusip, Cedel, or other numbers that identify
securities to be purchased or sold on behalf of the Series, as may be
reasonably necessary to enable the custodian and portfolio accounting agent
to perform its administrative and recordkeeping responsibilities with
respect to the Series. With respect to portfolio securities to be

2
<PAGE>

settled through the Depository Trust Company, the Sub-Adviser will arrange
for the prompt transmission of the confirmation of such trades to the
Fund's custodian and portfolio accounting agent.

(c) The Sub-Adviser will make available to the Fund and the Manager,
promptly upon request, any of the Series' investment records and ledgers
maintained by the Sub-Adviser (which shall not include the records and
ledgers maintained by the custodian or portfolio accounting agent for the
Fund) as are necessary to assist the Fund and the Manager to comply with
requirements of the 1940 Act and the Investment Advisers Act of 1940 (the
"Advisers Act"), as well as other applicable laws. The Sub-Adviser will
furnish to regulatory authorities having the requisite authority any
information or reports in connection with such services in respect to the
Series which may be requested in order to ascertain whether the operations
of the Fund are being conducted in a manner consistent with applicable laws
and regulations.

(d) The Sub-Adviser will provide reports to the Fund's Board of
Directors for consideration at meetings of the Board on the investment
program for each Series and the issuers and securities represented in each
Series' portfolio, and will furnish the Fund's Board of Directors with
respect to each Series such periodic and special reports as the Directors
and the Manager may reasonably request.

3. Broker-Dealer Selection. The Sub-Adviser is authorized to make decisions
to buy and sell securities and other investments for each Series' portfolio,
broker-dealer selection, and negotiation of brokerage commission rates in
effecting a security transaction. The Sub-Adviser's primary consideration in
effecting a security transaction will be to obtain the best execution for the
Series, taking into account the factors specified in the prospectus and/or
statement of additional information for the Fund, and determined in
consultation with the Manager, which include price (including the applicable
brokerage commission or dollar spread), the size of the order, the nature of
the market for the security, the timing of the transaction, the reputation, the
experience and financial stability of the broker-dealer involved, the quality
of the service, the difficulty of execution, and the execution capabilities and
operational facilities of the firm involved, and the firm's risk in positioning
a block of securities. Accordingly, the price to a Series in any transaction
may be less favorable than that available from another broker-dealer if the
difference is reasonably justified, in the judgment of the Sub-Adviser in the
exercise of its fiduciary obligations to the Fund, by other aspects of the
portfolio execution services offered. Subject to such policies as the Fund's
Board of Directors or Manager may determine and consistent with Section 28(e)
of the Securities Exchange Act of 1934, the Sub-Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused a Series to pay a broker-dealer
for effecting a portfolio investment transaction in excess of the amount of
commission another broker-dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker-dealer, viewed in terms of either
that particular transaction or the Sub-Adviser's or the Manager's overall
responsibilities with respect to the Series and to their respective other
clients as to which they exercise investment discretion. The Sub-Adviser will
consult with the Manager to the end that portfolio transactions on behalf of a
Series are directed to broker-dealers on the basis of criteria reasonably
considered appropriate by the Manager. To the extent consistent with these
standards, the Sub-Adviser is further authorized to allocate the orders placed
by it on behalf of a Series to the Sub-Adviser if it is registered as a broker-
dealer with the SEC, to an affiliated broker-dealer, or to such brokers and
dealers who also provide research or statistical material, or other services to
the Series, the Sub-Adviser, or an affiliate of the Sub-Adviser. Such
allocation shall be in such amounts and proportions as the Sub-Adviser shall
determine consistent with the above standards, and the Sub-Adviser will report
on said allocation regularly to the Fund's Board of Directors indicating the
broker-dealers to which such allocations have been made and the basis therefor.

4. Disclosure about Sub-Adviser. The Sub-Adviser has reviewed Post-Effective
Amendment No. to the Registration Statement for the Fund filed with the SEC
that contains disclosure about the Sub-Adviser, and represents and warrants
that, with respect to the disclosure about the Sub-Adviser or information
relating, directly or indirectly, to the Sub-Adviser, such Registration
Statement contains, as of the date hereof, no untrue

3
<PAGE>

statement of any material fact and does not omit any statement of a material
fact which was required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. The Sub-Adviser further represents and warrants that
it is a duly registered investment adviser under the Advisers Act and will
maintain such registration so long as this Agreement remains in effect. The
Sub-Adviser will provide the Manager with a copy of the Sub-Adviser's Form ADV,
Part II at the time the Form ADV is filed with the SEC.

5. Expenses. During the term of this Agreement, the Sub-Adviser will pay all
expenses incurred by it and its staff and for their activities in connection
with its portfolio management duties under this Agreement. The Manager or the
Fund shall be responsible for all the expenses of the Fund's operations.

6. Compensation. For the services provided to each Series, the Manager will
pay the Sub-Adviser an annual fee equal to the amount specified for such Series
in Schedule A hereto, payable monthly in arrears. The fee will be appropriately
prorated to reflect any portion of a calendar month that this Agreement is not
in effect among the parties. In accordance with the provisions of the
Management Agreement, the Manager is solely responsible for the payment of fees
to the Sub-Adviser, and the Sub-Adviser agrees to seek payment of its fees
solely from the Manager; provided, however, that if the Fund fails to pay the
Manager all or a portion of the management fee under said Management Agreement
when due, and the amount that was paid is insufficient to cover the Sub-
Adviser's fee under this Agreement for the period in question, then the Sub-
Adviser may enforce against the Fund any rights it may have as a third-party
beneficiary under the Management Agreement and the Manager will take all steps
appropriate under the circumstances to collect the amount due from the Fund.

7. Compliance.

(a) The Sub-Adviser agrees to use reasonable compliance techniques as the
Manager or the Board of Directors may adopt, including any written compliance
procedures.

(b) The Sub-Adviser agrees that it shall promptly notify the Manager and the
Fund (1) in the event that the SEC has censured the Sub-Adviser; placed
limitations upon its activities, functions or operations; suspended or revoked
its registration as an investment adviser; or has commenced proceedings or an
investigation that may result in any of these actions, or (2) upon having a
reasonable basis for believing that the Series has ceased to qualify or might
not qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code. The Sub-Adviser further agrees to notify the Manager and
the Fund promptly of any material fact known to the Sub-Adviser respecting or
relating to the Sub-Adviser that is not contained in the Registration Statement
or prospectus for the Fund (which describes the Series), or any amendment or
supplement thereto, or if any statement contained therein that becomes untrue
in any material respect.

(c) The Manager agrees that it shall promptly notify the Sub-Adviser (1) in
the event that the SEC has censured the Manager or the Fund; placed limitations
upon either of their activities, functions, or operations; suspended or revoked
the Manager's registration as an investment adviser; or has commenced
proceedings or an investigation that may result in any of these actions, or (2)
upon having a reasonable basis for believing that the Series has ceased to
qualify or might not qualify as a regulated investment company under Subchapter
M of the Internal Revenue Code.

8. Books and Records. The Sub-Adviser hereby agrees that all records which
it maintains for the Series are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund's or the
Manager's request in compliance with the requirements of Rule 31a-3 under the
1940 Act, although the Sub-Adviser may, at its own expense, make and retain a
copy of such records. The Sub-Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-l under the 1940 Act.

9. Cooperation; Confidentiality. Each party to this Agreement agrees to
cooperate with the other party and with all appropriate governmental
authorities having the requisite jurisdiction (including, but not limited to,

4
<PAGE>

the SEC) in connection with any investigation or inquiry relating to this
Agreement or the Fund. Subject to the foregoing, the Sub-Adviser shall treat as
confidential all information pertaining to the Fund and actions of the Fund,
the Manager and the Sub-Adviser, and the Manager shall treat as confidential
and use only in connection with the Series all information furnished to the
Fund or the Manager by the Sub-Adviser, in connection with its duties under the
agreement except that the aforesaid information need not be treated as
confidential if required to be disclosed under applicable law, if generally
available to the public through means other than by disclosure by the Sub-
Adviser or the Manager, or if available from a source other than the Manager,
Sub-Adviser or this Fund.

10. Representations Respecting Sub-Adviser. The Manager agrees that neither
the Manager, nor affiliated persons of the Manager, shall give any information
or make any representations or statements in connection with the sale of shares
of the Series concerning the Sub-Adviser or the Series other than the
information or representations contained in the Registration Statement,
prospectus, or statement of additional information for the Fund's shares, as
they may be amended or supplemented from time to time, or in reports or proxy
statements for the Fund, or in sales literature or other promotional material
approved in advance by the Sub-Adviser, except with the prior permission of the
Sub-Adviser.

11. [Intentionally Omitted]

12. Control. Notwithstanding any other provision of the Agreement, it is
understood and agreed that the Fund shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement and has reserved the right to reasonably direct any action hereunder
taken on its behalf by the Sub-Adviser.

13. Liability. Except as may otherwise be required by the 1940 Act or the
rules thereunder or other applicable law, the Manager agrees that the Sub-
Adviser, any affiliated person of the Sub-Adviser, and each person, if any,
who, within the meaning of Section 15 of the 1933 Act controls the Sub-Adviser
(1) shall bear no responsibility and shall not be subject to any liability for
any act or omission respecting any series of the Fund that is not a Series
hereunder, and (2) shall not be liable for, or subject to any damages,
expenses, or losses in connection with, any act or omission connected with or
arising out of any services rendered under this Agreement, except by reason of
willful misfeasance, bad faith, or gross negligence in the performance of the
Sub-Adviser's duties, or by reason of reckless disregard of the Sub-Adviser's
obligations and duties under this Agreement.

14. Indemnification.

(a) The Manager agrees to indemnify and hold harmless the Sub-Adviser, any
affiliated person of the Sub-Adviser, and each person, if any, who, within the
meaning of Section 15 of the 1933 Act controls ("controlling person") the Sub-
Adviser (all of such persons being referred to as "Sub-Adviser Indemnified
Persons") against any and all losses, claims, damages, liabilities, or
litigation (including legal and other expenses) to which a Sub-Adviser
Indemnified Person may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, under any other statute, at common law or otherwise, arising out
of the Manager's responsibilities to the Fund which (1) may be based upon the
Manager's negligence, willful misfeasance, or bad faith in the performance of
its duties (which could include a negligent action or a negligent omission to
act), or by reason of the Manager's reckless disregard of its obligations and
duties under this Agreement, or (2) may be based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or prospectus covering shares of the Fund or any Series, or any
amendment thereof or any supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, unless such statement
or omission was made in reliance upon information furnished to the Manager or
the Fund or to any affiliated person of the Manager by a Sub-Adviser
Indemnified Person; provided however, that in no case shall the indemnity in
favor of the Sub-Adviser Indemnified Person be deemed to protect such person
against any liability to which any such person would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties, or by reason of its reckless disregard of
obligations and duties under this Agreement.

5
<PAGE>

(b) Notwithstanding Section 13 of this Agreement, the Sub-Adviser agrees to
indemnify and hold harmless the Manager, any affiliated person of the Manager,
and any controlling person of the Manager (all of such persons being referred
to as "Manager Indemnified Persons") against any and all losses, claims,
damages, liabilities, or litigation (including legal and other expenses) to
which a Manager Indemnified Person may become subject under the 1933 Act, 1940
Act, the Advisers Act, under any other statute, at common law or otherwise,
arising out of the Sub-Adviser's responsibilities as Sub-Adviser of the Series
which (1) may be based upon the Sub-Adviser's negligence, willful misfeasance,
or bad faith in the performance of its duties (which could include a negligent
action or a negligent omission to act), or by reason of the Sub-Adviser's
reckless disregard of its obligations and duties under this Agreement, or (2)
may be based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or prospectus covering
the shares of the Fund or any Series, or any amendment or supplement thereto,
or the omission or alleged omission to state therein a material fact known or
which should have been known to the Sub-Adviser and was required to be stated
therein or necessary to make the statements therein not misleading, if such a
statement or omission was made in reliance upon information furnished to the
Manager, the Fund, or any affiliated person of the Manager or Fund by the Sub-
Adviser or any affiliated person of the Sub-Adviser; provided, however, that in
no case shall the indemnity in favor of a Manager Indemnified Person be deemed
to protect such person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence in the performance of its duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.

(c) The Manager shall not be liable under Paragraph (a) of this Section 14
with respect to any claim made against a Sub-Adviser Indemnified Person unless
such Sub-Adviser Indemnified Person shall have notified the Manager in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such Sub-
Adviser Indemnified Person (or after such Sub-Adviser Indemnified Person shall
have received notice of such service on any designated agent), but failure to
notify the Manager of any such claim shall not relieve the Manager from any
liability which it may have to the Sub-Adviser Indemnified Person against whom
such action is brought except to the extent the Manager is prejudiced by the
failure or delay in giving such notice. In case any such action is brought
against the Sub-Adviser Indemnified Person, the Manager will be entitled to
participate, at its own expense, in the defense thereof or, after notice to the
Sub-Adviser Indemnified Person, to assume the defense thereof, with counsel
satisfactory to the Sub-Adviser Indemnified Person. If the Manager assumes the
defense of any such action and the selection of counsel by the Manager to
represent the Manager and the Sub-Adviser Indemnified Person would result in a
conflict of interests and therefore, would not, in the reasonable judgment of
the Sub-Adviser Indemnified Person, adequately represent the interests of the
Sub-Adviser Indemnified Person, the Manager will, at its own expense, assume
the defense with counsel to the Manager and, also at its own expense, with
separate counsel to the Sub-Adviser Indemnified Person, which counsel shall be
satisfactory to the Manager and to the Sub-Adviser Indemnified Person. The Sub-
Adviser Indemnified Person shall bear the fees and expenses of any additional
counsel retained by it, and the Manager shall not be liable to the Sub-Adviser
Indemnified Person under this Agreement for any legal or other expenses
subsequently incurred by the Sub-Adviser Indemnified Person independently in
connection with the defense thereof other than reasonable costs of
investigation. The Manager shall not have the right to compromise on or settle
the litigation without the prior written consent of the Sub-Adviser Indemnified
Person if the compromise or settlement results, or may result in a finding of
wrongdoing on the part of the Sub-Adviser Indemnified Person.

(d) The Sub-Adviser shall not be liable under Paragraph (b) of this Section
14 with respect to any claim made against a Manager Indemnified Person unless
such Manager Indemnified Person shall have notified the Sub-Adviser in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such Manager
Indemnified Person (or after such Manager Indemnified Person shall have
received notice of such service on any designated agent), but failure to notify
the Sub-Adviser of any such claim shall not relieve the Sub-Adviser from any
liability which it may have to the Manager Indemnified Person against whom such
action is brought except to the extent the Sub-Adviser is prejudiced by the
failure or delay in giving such notice. In case any such action is brought

6
<PAGE>

against the Manager Indemnified Person, the Sub-Adviser will be entitled to
participate, at its own expense, in the defense thereof or, after notice to the
Manager Indemnified Person, to assume the defense thereof, with counsel
satisfactory to the Manager Indemnified Person. If the Sub-Adviser assumes the
defense of any such action and the selection of counsel by the Sub-Adviser to
represent both the Sub-Adviser and the Manager Indemnified Person would result
in a conflict of interests and therefore, would not, in the reasonable judgment
of the Manager Indemnified Person, adequately represent the interests of the
Manager Indemnified Person, the Sub-Adviser will, at its own expense, assume
the defense with counsel to the Sub-Adviser and, also at its own expense, with
separate counsel to the Manager Indemnified Person, which counsel shall be
satisfactory to the Sub-Adviser and to the Manager Indemnified Person. The
Manager Indemnified Person shall bear the fees and expenses of any additional
counsel retained by it, and the Sub-Adviser shall not be liable to the Manager
Indemnified Person under this Agreement for any legal or other expenses
subsequently incurred by the Manager Indemnified Person independently in
connection with the defense thereof other than reasonable costs of
investigation. The Sub-Adviser shall not have the right to compromise on or
settle the litigation without the prior written consent of the Manager
Indemnified Person if the compromise or settlement results, or may result in a
finding of wrongdoing on the part of the Manager Indemnified Person.

15. Duration and Termination.

(a) This Agreement shall become effective on the date first indicated above,
subject to the condition that the Fund's Board of Directors, including a
majority of those Directors who are not interested persons (as such term is
defined in the 1940 Act) of the Manager or the Sub-Adviser, and the
shareholders of each Series, shall have approved this Agreement. Unless
terminated as provided herein, this Agreement shall remain in full force and
effect for two years from such date and continue on an annual basis thereafter
with respect to each Series covered by this Agreement; provided that such
annual continuance is specifically approved each year by (a) the Board of
Directors of the Fund, or by the vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of each Series, and (b) the vote of a
majority of those Directors who are not parties to this Agreement or interested
persons (as such term is defined in the 1940 Act) of any such party to this
Agreement cast in person at a meeting called for the purpose of voting on such
approval. However, any approval of this Agreement by the holders of a majority
of the outstanding shares (as defined in the 1940 Act) of a Series shall be
effective to continue this Agreement with respect to such Series
notwithstanding (i) that this Agreement has not been approved by the holders of
a majority of the outstanding shares of any other Series or (ii) that this
agreement has not been approved by the vote of a majority of the outstanding
shares of the Fund, unless such approval shall be required by any other
applicable law or otherwise. Notwith-standing the foregoing, this Agreement may
be terminated with respect to any Series covered by this Agreement: (a) by the
Manager at any time, upon sixty (60) days' written notice to the Sub-Adviser
and the Fund, (b) at any time without payment of any penalty by the Fund, by
the Fund's Board of Directors or a majority of the outstanding voting
securities of each Series, upon sixty (60) days' written notice to the Manager
and the Sub-Adviser, or (c) by the Sub-Adviser upon three (3) months written
notice unless the Fund or the Manager requests additional time to find a
replacement for the Sub-Adviser, in which case the Sub-Adviser shall allow the
additional time requested by the Fund or Manager not to exceed three (3)
additional months beyond the initial three-month notice period; provided,
however, that the Sub-Adviser may terminate this Agreement at any time without
penalty, effective upon written notice to the Manager and the Fund, in the
event either the Sub-Adviser (acting in good faith) or the Manager ceases to be
registered as an investment adviser under the Advisers Act or otherwise becomes
legally incapable of providing investment management services pursuant to its
respective contract with the Fund, or in the event the Manager becomes bankrupt
or otherwise incapable of carrying out its obligations under this Agreement, or
in the event that the Sub-Adviser does not receive compensation for its
services from the Manager or the Fund as required by the terms of this
agreement.

In the event of termination for any reason, all records of each Series for
which the Agreement is terminated shall promptly be returned to the Manager or
the Fund, free from any claim or retention of rights in such record by the Sub-
Adviser, although the Sub-Adviser may, at its own expense, make and retain a
copy of such records. This Agreement shall automatically terminate in the event
of its assignment (as such term is

7
<PAGE>

described in the 1940 Act). In the event this Agreement is terminated or is not
approved in the manner described above, the Sections or Paragraphs numbered 8,
9, 10, 12, 13 and 14 of this Agreement shall remain in effect, as well as any
applicable provision of this Section numbered 15 and, to the extent that only
amounts are owed to the Sub-Adviser as compensation for services rendered while
the agreement was in effect, Section 6.

(b) Notices.

Any notice must be in writing and shall be sufficiently given (1) when
delivered in person, (2) when dispatched by telegram or electronic facsimile
transfer (confirmed in writing by postage prepaid first class air mail
simultaneously dispatched), (3) when sent by internationally recognized
overnight courier service (with receipt confirmed by such overnight courier
service), or (4) when sent by registered or certified mail, to the other party
at the address of such party set forth below or at such other address as such
party may from time to time specify in writing to the other party.

If to the Fund:

[Name of Fund]
[Address]
[City, State Zip Code]
Attention: [Name of Contact Person]

If to the Sub-Adviser:

[Name of Sub-Adviser]
[Address]
[City, State Zip Code]
Attention: [Name of Contact Person]

16. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) the holders of a majority of the
outstanding voting securities of the Series, and (ii) the Directors of the
Fund, including a majority of the Directors of the Fund who are not interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, if such approval is required by
applicable law.

17. Miscellaneous.

(a) This Agreement shall be governed by the laws of the State of ,
provided that nothing herein shall be construed in a manner inconsistent with
the 1940 Act, the Advisers Act or rules or orders of the SEC thereunder, and
without regard for the conflicts of laws principle thereof. The term
"affiliate" or "affiliated person" as used in this Agreement shall mean
"affiliated person" as defined in Section 2(a)(3) of the 1940 Act.

(b) The Manager and the Sub-Adviser acknowledge that the Fund enjoys the
rights of a third-party beneficiary under this Agreement, and the Manager
acknowledges that the Sub-Adviser enjoys the rights of a third party
beneficiary under the Management Agreement.

(c) The captions of this Agreement are included for convenience only and in
no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.

(d) To the extent permitted under Section 15 of this Agreement, this
Agreement may only be assigned by any party with the prior written consent of
the other parties.

8
<PAGE>

(e) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby, and to this extent, the provisions of this
Agreement shall be deemed to be severable.

(f) Nothing herein shall be construed as constituting the Sub-Adviser as an
agent or co-partner of the Manager, or constituting the Manager as an agent or
co-partner of the Sub-Adviser.

(g) This agreement may be executed in counterparts.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.

PILGRIM INVESTMENTS, INC.

By: _________________________________

___________________________________
Title

[Name of Sub-Adviser]

By: _________________________________

___________________________________
Title

9
<PAGE>

Schedule A (per Fund)

<TABLE>
<CAPTION>
Fund Annual Sub-Adviser Fee
---- ----------------------
<S> <C>
Pilgrim Small Cap Asia Growth
Fund, Inc. 0.625% of the Fund's average daily net assets.
Pilgrim Troika Dialog Russia
Fund, Inc. 0.625% of the Fund's average daily net assets.
</TABLE>

10
<PAGE>

Exhibit C

SERVICE AND DISTRIBUTION PLAN

WHEREAS, [Name of Fund] (the "Company") engages in business as an open-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act");

WHEREAS, shares of common stock of the Company currently consist of one
series, [Name of Fund] (the "Fund);

WHEREAS, shares of common stock of the Fund are divided into classes of
shares, one of which is designated Class A;

WHEREAS, the Company employs Pilgrim Securities, Inc. (the "Distributor") as
distributor of the securities of which it is the issuer; and

WHEREAS, the Company and the Distributor have entered into an Underwriting
Agreement pursuant to which the Company has employed the Distributor in such
capacity during the continuous offering of shares of the Company; and

WHEREAS, the Company wishes to adopt the Distribution Plan and the
Shareholder Service Plan of the Fund with respect to Class A shares as set
forth hereinafter.

NOW, THEREFORE, the Company hereby adopts on behalf of the Fund with respect
to its Class A shares, and the Distributor hereby agrees to the terms of the
Plan, in accordance with Rule 12b-l under the Act, on the following terms and
conditions:

1. The Fund shall pay to the Distributor, as the distributor of the
Class A shares of the Fund, a service or distribution fee at the rate of
0.25% on an annualized basis of the average daily net assets of the Fund's
Class A shares, provided that, at any time such payment is made, whether or
not this Plan continues in effect, the making thereof will not cause the
limitation upon such payments established by this Plan to be exceeded. Such
fee shall be calculated and accrued daily and paid monthly or at such
intervals as the Board of Directors shall determine, subject to any
applicable restriction imposed by rules of the National Association of
Securities Dealers, Inc.

2. The amount set forth in paragraph 1 of this Plan shall be used by the
Distributor to pay securities dealers (which may include the Distributor
itself) and other financial institutions and organizations for servicing
shareholder accounts, including a continuing fee which may accrue
immediately after the sale of shares. To the extent not used for servicing
shareholder accounts, the amount set forth in paragraph 1 of this Plan may
be paid for the Distributor's services as distributor of the shares of the
Fund in connection with any activities or expenses primarily intended to
result in the sale of the Class A shares of the Fund, including, but not
limited to, payment of compensation, including incentive compensation, to
securities dealers (which may include the Distributor itself) and other
financial institutions and organizations (collectively, the "Service
Organizations") to obtain various distribution related and/or
administrative services for the Funds. These services may include, among
other things, processing new shareholder account applications, preparing
and transmitting to the Fund's Transfer Agent computer processable tapes of
all transactions by customers and serving as the primary source of
information to customers in answering questions concerning the Fund and
their transactions with the Fund. The Distributor is also authorized to
engage in advertising, the preparation and distribution of sales literature
and other promotional activities on behalf of the Fund. In addition, this
Plan hereby authorizes payment by the Fund of the cost of preparing,
printing and distributing Fund Prospectuses and Statements of Additional
<PAGE>

Information to prospective investors and of implementing and operating the
Plan. Distribution expenses also include an allocation of overhead of the
Distributor and accruals for interest on the amount of distribution
expenses that exceed distribution fees and contingent deferred sales
charges received by the Distributor.

3. This Plan shall not take effect until it, together with any related
agreements, has been approved by votes of a majority of both (a) the
Company's Board of Directors and (b) those Directors of the Company who are
not "interested persons" of the Company (as defined in the Act) and who
have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it (the "Rule 12b-l Directors"), cast in
person at a meeting (or meetings) called for the purpose of voting on this
Plan and such related agreements.

4. After approval as set forth in paragraph 3, and any other approvals
required pursuant to the Act and Rule 12b-1 thereunder, this Plan shall
take effect at the time specified by the Company's Board of Directors. The
Plan shall continue in full force and effect as to the Class A shares of
the Fund for so long as such continuance is specifically approved at least
annually in the manner provided for approval of this Plan in paragraph 3.

5. The Distributor shall provide to the Directors of the Company, at
least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made.

6. This Plan may be terminated as to the Fund at any time, without
payment of any penalty, by vote of the Directors of the Company, by vote of
a majority of the Rule 12b-l Directors, or by a vote of a majority of the
outstanding voting securities of Class A shares of the Fund on not more
than 30 days' written notice to any other party to the Plan.

7. This Plan may not be amended to increase materially the amount of the
fee (including any service fee) provided for in paragraph 1 hereof unless
such amendment is approved by a vote of the shareholders of the Class A
shares of the Fund, and no material amendment to the Plan shall be made
unless approved in the manner provided for approval and annual renewal in
paragraph 3 hereof.

8. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the
Company shall be committed to the discretion of the Directors who are not
such interested persons.

9. The Company shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof, for a
period of not less than six years from the date of this Plan, any such
agreement or any such report, as the case may be, the first two years in an
easily accessible place.

Last revised: , 2000

2
<PAGE>

Exhibit D

ARTICLES OF INCORPORATION
OF
LEXINGTON [ ] FUND, INC.

FIRST: The undersigned, , whose address is , being at least
eighteen years of age, hereby forms a corporation under the Maryland General
Corporation Law.

SECOND: The name of the corporation is [" ."] (hereinafter called the
"corporation").

THIRD: The purpose for which the corporation is formed and the business or
objects to be transacted, carried on and promoted by it, is to act as an open-
end investment company of the management type registered as such with the
Securities and Exchange Commission pursuant to the Investment Company Act of
1940 and to exercise and generally to enjoy all of the powers, rights and
privileges granted to, or conferred upon, corporations by the general laws of
the State of Maryland now or hereafter in force.

FOURTH: The post office address of the principal office and Resident Agent
of the corporation within the State of Maryland is 11 East Chase Street, Suite
9E, c/o CSC-Lawyers Incorporating Service Company, Baltimore, Maryland 21202.
The name and address of the Resident Agent of the corporation is CSC-Lawyers
Incorporating Service Company, 11 East Chase Street, Suite 9E, Baltimore,
Maryland 21202.

FIFTH: (1) The total number of shares of stock which the corporation
initially has authority to issue is one billion (1,000,000,000) shares of
Common Stock which are initially designated by series as follows: shares are
designated [" "] series and of which shares are unclassified. All of the
shares of Common Stock of each series are initially designated as one class of
shares. The par value of the shares of each class is one tenth of one cent
($.001) per share.

(2) The aggregate par value of all the authorized shares of stock is one
million dollars ($1,000,000.00).

(3) The Board of Directors of the corporation is authorized, from time to
time, to fix the price or the minimum price or the consideration or minimum
consideration for, and to authorize the issuance of, the shares of stock of
the corporation and securities convertible into shares of stock of the
corporation.

(4) The Board of Directors of the corporation is authorized, from time to
time, to further classify or to reclassify, as the case may be, any unissued
shares of stock of the corporation by setting or changing the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms or conditions of redemption of the stock.

(5) Subject to the power of the Board of Directors to classify and
reclassify unissued shares, the shares of each class of stock of the
corporation shall have the following preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption:

(a) (i) All consideration received by the corporation for the issuance
or sale of shares of the class together with all income, earnings, profits
and proceeds thereof, shall irrevocably belong to such class for all
purposes, subject only to the rights of creditors and to effect the
conversion of shares of any class of stock into another class of stock of
the corporation, and are herein referred to as "assets belonging to" such
class.

(ii) The assets belonging to such class shall be charged with the
liabilities of the corporation in respect of such class and with such
class's share of the general liabilities of the corporation, in the latter
case in proportion that the net asset value of such class bears to the net
asset value of all classes. The determination of the Board of Directors
shall be conclusive as to the allocation of liabilities, including accrued
expenses and reserves, to a class.

<PAGE>

(iii) Dividends or distributions on shares of each class, whether
payable in stock or cash, shall be paid only out of earnings, surplus or
other assets belonging to such class.

(iv) In the event of the liquidation or dissolution of the corporation,
stockholders of each class shall be entitled to receive, as a class, out of
the assets of the corporation available for distribution to stockholders,
the assets belonging to such class and the assets so distributable to the
stockholders of such class shall be distributed among such stockholders in
proportion to the number of shares of such class held by them.

(b) A series of Common Stock may be further classified by the Board of
Directors into two or more classes of stock that may be invested together
in the common investment portfolio in which the series is invested.
Notwithstanding the provisions of paragraph (5)(a) of this Article FIFTH,
if two or more classes are invested in a common investment portfolio as a
series, the shares of each such class of stock of the corporation shall be
subject to the following preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications and terms
and conditions of redemption, and, if there are other classes of stock of
another series invested in a different investment portfolio, shall also be
subject to the provisions of paragraph (5)(a) of this Article FIFTH at the
series level as if the classes within the series were one class:

(i) The income and expenses of the series shall be allocated among
the classes in the series in accordance with the number of shares
outstanding of each such class or as otherwise determined by the Board
of Directors in a manner consistent with subparagraph (iii) below.

(ii) As more fully set forth in this paragraph (5)(b) of Article
FIFTH, the liabilities and expenses of the classes in the series shall
be determined separately from those of each other and, accordingly, the
net asset value, the dividends and distributions payable to holders,
and the amounts distributable in the event of liquidation of the
corporation to holders of shares of the corporation's stock may vary
from class to class within the series. Except for these differences and
certain other differences set forth in this paragraph (5) of Article
FIFTH or elsewhere in the Articles of Incorporation, the classes in the
same series shall have the same preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption.

(iii) The dividends and distributions of investment income and
capital gains with respect to the classes in the series shall be in
such amounts as may be declared from time to time by the Board of
Directors, and such dividends and distributions may vary among the
classes in the series to reflect differing allocations of the expenses
of the corporation among the classes and any resultant differences
among the net asset values per share of the classes, to such extent and
for such purposes as the Board of Directors may deem appropriate. The
allocation of investment income, capital gains, expenses and
liabilities of the corporation among the classes in the series shall be
determined by the Board of Directors in a manner that is consistent
with an order, if any, obtained from the Securities and Exchange
Commission or any future amendment to such order or any rule or
interpretation under the Investment Company Act of 1940, as amended.

(c) Except as provided below, on each matter submitted to a vote of the
stockholders, each holder of a share of stock shall be entitled to one vote
for each share standing in his name on the books of the corporation
irrespective of the class or series thereof. All holders of shares of stock
shall vote as a single class except as may otherwise be required by law
pursuant to any applicable order, rule or interpretation issued by the
Securities and Exchange Commission, or otherwise, or except with respect to
any matter which affects only one or more classes or series of stock, in
which case only the holders of shares of the class, classes or series
affected shall be entitled to vote.

(d) The proceeds of the redemption of shares of any class of stock of
the corporation may be reduced by the amount of any contingent deferred
sales charge or other charge (which charges may vary within and among the
classes) payable on such redemption pursuant to the terms of issuance of
such shares, all in accordance with the Investment Company Act of 1940,
applicable rules and regulations thereunder, and applicable rules and
regulations of the National Association of Securities Dealers, Inc.
("NASD").

2
<PAGE>

(e) At such times as may be determined by the Board of Directors (or
with the authorization of the Board of Directors, by the officers of the
corporation) in accordance with the Investment Company Act of 1940,
applicable rules and regulations thereunder, and applicable rules and
regulations of the NASD and reflected in the corporation's current
registration statement, shares of a particular class of stock of the
corporation may be automatically converted into shares of another class of
stock of the corporation based on the relative net asset values of such
classes at the time of conversion, subject, however, to any conditions of
conversion that may be imposed by the Board of Directors (or with the
authorization of the Board of Directors, by the officers of the
corporation) and reflected in the corporation's current registration
statement as aforesaid.

Except as provided above, all provisions of the Articles of Incorporation
relating to stock of the corporation shall apply to shares of, and to the
holders of, all classes of stock.

(6) Notwithstanding any provisions of the Maryland General Corporation Law
requiring a greater proportion than a majority of the votes of stockholders of
all classes or of any class of stock entitled to be cast in order to take or
authorize any action, any such action may be taken or authorized upon the
concurrence of a majority of the aggregate number of votes entitled to be cast
thereon.

(7) The presence in person or by proxy of the holders of one-third of the
shares of stock of the corporation entitled to vote (without regard to class)
shall constitute a quorum at any meeting of the stockholders, except with
respect to any matter which, under applicable statutes or regulatory
requirements, requires approval by a separate vote of one or more classes of
stock, in which case the presence in person or by proxy of the holders of one-
third of the shares of stock of each class required to vote as a class on the
matter shall constitute a quorum.

(8) The corporation may issue shares of stock in fractional denominations to
the same extent as its whole shares, and shares in fractional denominations
shall be shares of stock having proportionately to the respective fractions
represented thereby all the rights of whole shares, including, without
limitation, the right to vote, the right to receive dividends and distributions
and the right to participate upon liquidation of the corporation, but excluding
the right to receive a stock certificate evidencing a fractional share.

(9) No holder of any shares of any class of the corporation shall be
entitled as of right to subscribe for, purchase, or otherwise acquire any
shares of any class which the corporation proposes to issue, or any rights or
options which the corporation proposes to issue or to grant for the purchase of
shares of any class or for the purchase of any shares, bonds, securities, or
obligations of the corporation which are convertible into or exchangeable for,
or which carry any rights to subscribe for, purchase, or otherwise acquire
shares of any class of the corporation; and any and all of such shares, bonds,
securities or obligations of the corporation, whether now or hereafter
authorized or created, may be issued, or may be reissued if the same have been
reacquired, and any and all of such rights and options may be granted by the
Board of Directors to such persons, firms, corporations and associations, and
for such lawful consideration, and on such terms, as the Board of Directors in
its discretion may determine, without first offering the same, or any thereof,
to any said holder.

SIXTH: (1) The initial number of directors of the corporation is ( )
and the names of those who will serve as such until the first annual meeting or
until their successors are duly elected and qualify are as follows:

The By-Laws of the corporation may fix the number of directors at a number
greater or less than that named in these Articles of Incorporation and may
authorize a majority of the entire Board of Directors to increase or decrease
the number of directors. The number of directors shall never be less than the
minimum number prescribed by the Maryland General Corporation Law.

(2) The initial by-laws of the corporation shall be adopted by the directors
at their organizational meeting or by their informal written action, as the
case may be. Thereafter, the power to make, alter, and repeal the by-laws of
the corporation shall be vested in the Board of Directors of the corporation.

3
<PAGE>

(3) Any determination made in good faith by or pursuant to the direction of
the Board of Directors, as to: the amount of the assets, debts, obligations, or
liabilities of the corporation; the amount of any reserves or charges set up
and the propriety thereof; the time of or purpose for creating such reserves or
charges; the use, alteration or cancellation of any reserves or charges
(whether or not any debt, obligation or liability for which such reserves or
charges shall have been created shall have been paid or discharged or shall be
then or thereafter required to be paid or discharged); the value of any
investment or fair value of any other asset of the corporation; the amount of
net investment income; the number of shares of stock outstanding; the estimated
expense in connection with purchases or redemptions of the corporation's stock;
the ability to liquidate investments in an orderly fashion; the extent to which
it is practicable to deliver a cross-section of the portfolio of the
corporation in payment for any such shares, or as to any other matters relating
to the issue, sale, purchase, redemption and/or other acquisition or
disposition of investments or shares of the corporation, or the determination
of the net asset value of shares of the corporation shall be final and
conclusive, and shall be binding upon the corporation and all holders of its
shares, past, present and future, and shares of the corporation are issued and
sold on the condition and understanding that any and all such determinations
shall be binding as aforesaid.

SEVENTH: (1) To the fullest extent that limitations on the liability of
directors and officers are permitted by the Maryland General Corporation Law,
no director or officer of the corporation shall have any liability to the
corporation or its stockholders for damages. This limitation on liability
applies to events occurring at the time a person serves as a director or
officer of the corporation whether or not such person is a director or officer
at the time of any proceeding in which liability is asserted.

(2) The corporation shall indemnify and advance expenses to its currently
acting and its former directors to the fullest extent that indemnification of
directors is permitted by the Maryland General Corporation Law. The corporation
shall indemnify and advance expenses to its officers to the same extent as its
directors and to such further extent as is consistent with law. The Board of
Directors may, through a by-law, resolution or agreement, make further
provisions for indemnification of directors, officers, employees and agents to
the fullest extent permitted by the Maryland General Corporation Law.

(3) No provision of this Article SEVENTH shall be effective (i) to require a
waiver of compliance with any provision of the Securities Act of 1933, or of
the Investment Company Act of 1940, or of any valid rule, regulation or order
of the Securities and Exchange Commission thereunder or (ii) to protect or
purport to protect any director or officer of the corporation against any
liability to the corporation or its stockholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.

(4) References to the Maryland General Corporation Law in this Article
SEVENTH are to the law as from time to time amended. No amendment to the
Articles of Incorporation of the corporation shall affect any right of any
person under this Article SEVENTH based on any event, omission or proceeding
prior to such amendment.

EIGHTH: (1) Any holder of shares of stock of the corporation may require the
corporation to redeem and the corporation shall be obligated to redeem at the
option of such holder all or any part of the shares of the corporation owned by
said holder, at the redemption price, pursuant to the method, upon the terms
and subject to the conditions hereinafter set forth:

(a) The redemption price per share shall be the net asset value per
share determined at such time or times as the Board of Directors of the
corporation shall designate in accordance with any provision of the
Investment Company Act of 1940, any rule or regulation thereunder or
exemption or exception therefrom, or any rule or regulation made or adopted
by any securities association registered under the Securities Exchange Act
of 1934.

4
<PAGE>

(b) Net asset value per share of a class shall be determined by
dividing:

(i) The total value of the assets of such class, or in the case of a
series with more than one class, such class's proportionate share of
the total value of the assets of the series, such value determined as
provided in Subsection (c) below less, to the extent determined by or
pursuant to the direction of the Board of Directors, all debts,
obligations and liabilities of such class (which debts, obligations and
liabilities shall include, without limitation of the generality of the
foregoing, any and all debts, obligations, liabilities, or claims, of
any and every kind and nature, fixed, accrued and otherwise, including
the estimated accrued expenses of management and supervision,
administration and distribution and any reserves or charges for any or
all of the foregoing, whether for taxes, expenses or otherwise) but
excluding such class's liability upon its shares and its surplus, by

(ii) The total number of shares of such class outstanding.

The Board of Directors is empowered, in its absolute discretion, to
establish other methods for determining such net asset value whenever such
other methods are deemed by it to be necessary in order to enable the
corporation to comply with, or are deemed by it to be desirable provided
they are not inconsistent with, any provision of the Investment Company Act
of 1940 or any rule or regulation thereunder.

(c) In determining for the purposes of these Articles of Incorporation
the total value of the assets of the corporation at any time, investments
and any other assets of the corporation shall be valued in such manner as
may be determined from time to time by the Board of Directors.

(d) Payment of the redemption price by the corporation may be made
either in cash or in securities or other assets at the time owned by the
corporation or partly in cash and partly in securities or other assets at
the time owned by the corporation. The value of any part of such payment to
be made in securities or other assets of the corporation shall be the value
employed in determining the redemption price. Payment of the redemption
price shall be made on or before the seventh day following the day on which
the shares are properly presented for redemption hereunder, except that
delivery of any securities included in any such payment shall be made as
promptly as any necessary transfers on the books of the issuers whose
securities are to be delivered may be made.

The corporation, pursuant to resolution of the Board of Directors, may
deduct from the payment made for any shares redeemed a liquidating,
redemption or similar charge as may be determined by the Board of Directors
from time to time.

(e) Redemption of shares of stock by the corporation is conditional upon
the corporation having funds or property legally available therefor.

(2) The corporation, either directly or through an agent, may repurchase its
shares, out of funds legally available therefor, upon such terms and conditions
and for such consideration as the Board of Directors shall deem advisable, by
agreement with the owner at a price not exceeding the net asset value per share
as determined by the corporation at such time or times as the Board of
Directors of the corporation shall designate, less any liquidating, redemption
or similar charge as may be fixed by resolution of the Board of Directors of
the corporation from time to time, and take all other steps deemed necessary or
advisable in connection therewith.

(3) The corporation may cause the redemption, upon the terms set forth in
subsections (1)(a) through (e) and subsection 5 of this Article EIGHTH, of
shares of a class of stock held by a stockholder if the net asset value of the
shares of stock is less than $500 or such other amount not exceeding $5000 as
may be fixed from time to time by the Board of Directors (the "Minimum Amount")
with respect to that class. The Board of Directors may establish differing
Minimum Amounts for each class of the corporation's stock and for categories of
holders of stock based on such criteria as the Board of Directors may deem
appropriate. The

5
<PAGE>

corporation shall give the stockholder notice which shall be in writing
personally delivered or deposited in the mail, at least 30 days (or such other
number of days as may be specified from time to time by the Board of Directors)
prior to such redemption.

Notwithstanding any other provision of this Article EIGHTH, if certificates
representing such shares have been issued, the redemption price need not be
paid by the corporation until such certificates are presented in proper form
for transfer to the corporation or the agent of the corporation appointed for
such purpose; however, the redemption shall be effective, in accordance with
the resolution of the Board of Directors, regardless of whether or not such
presentation has been made.

(4) The obligations set forth in this Article EIGHTH may be suspended or
postponed as may be permissible under the Investment Company Act of 1940 and
the rules and regulations thereunder.

(5) The Board of Directors may establish other terms and conditions and
procedures for redemption, including requirements as to delivery of
certificates evidencing shares, if issued.

NINTH: All persons who shall acquire stock or other securities of the
corporation shall acquire the same subject to the provisions of the
corporation's Charter, as from time to time amended.

TENTH: From time to time any of the provisions of the Charter of the
corporation may be amended, altered or repealed, including amendments which
alter the contract rights of any class of stock outstanding, and other
provisions authorized by the Maryland General Corporation Law at the time in
force may be added or inserted in the manner and at the time prescribed by said
Law, and all rights at any time conferred upon the stockholders of the
corporation by its Charter are granted subject to the provisions of this
Article.

IN WITNESS WHEREOF, I have adopted and signed these Articles of
Incorporation and do hereby acknowledge that the adoption and signing are my
act.

_____________________________________
[ ]
Sole Incorporator

Dated:

6
<PAGE>

EXHIBIT E

DECLARATION OF TRUST

[ ]

DATED: [ ]
<PAGE>

DECLARATION OF TRUST
[ ]

DATED: [ ]

DECLARATION OF TRUST, made this [ ] day of [ ], 2000 by the undersigned
Trustees (Together with all other persons from time to time duly elected,
qualified and serving as Trustees) in accordance with the provisions of
Article II hereof, (the "Trustees");

WHEREAS, the Trustees desire to establish a trust for the investment and
reinvestment of funds contributed thereto; and

WHEREAS, the Trustees desire that the beneficial interest in the trust
assets be divided into transferable shares of beneficial interest, as
hereinafter provided; and

NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust established hereunder shall be held and managed in
trust for the benefit of the holders, from time to time, of the shares of
beneficial interest issued hereunder, and subject to the provisions hereof.

ARTICLE I

NAME AND DEFINITIONS

Section 1.1. Name. The name of the Trust created hereby is [" "].

Section 1.2. Definitions. Wherever they are used herein the following terms
have the following respective meanings:

(a) "Administrator" means a party furnishing services to the Trust
pursuant to any contract described in Section 3.3 hereof.

(b) "By-Laws" means the By-laws referred to in Section 2.8 hereof, as
from time to time amended.

(c) "Class" means the two or more classes as may be established and
designated from time to time by the Trustees pursuant to Section 5.13
hereof.

(d) "Commission" has the meaning given to it in the 1940 Act. The term
"Interested Person" has the meaning given it in the 1940 Act, as modified
by any applicable order or orders of the Commission. Except as otherwise
defined by the Trustees in conjunction with the establishment of any series
of Shares, the term "vote of a majority of the Shares outstanding and
entitled to vote" shall have the same meaning as the term "vote of a
majority of the outstanding voting securities" given it in the 1940 Act.

(e) "Custodian" means any Person other than the Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does
not include a system for the central handling of securities described in
said Section 17(f).

(f) "Declaration" means this Declaration of Trust as further amended
from time to time. Reference in this Declaration of Trust to "Declaration,"
"hereof," "herein," and "hereunder" shall be deemed to refer to this
Declaration rather than exclusively to the article or section in which such
words appear.

(g) "Distributor" means the party, other than the Trust, to the contract
described in Section 3.1 hereof.

(h) "His" shall include the feminine and neuter, as well as the
masculine genders.

(i) "Investment Adviser" means the party, other than the Trust, to the
contract described in Section 3.2 hereof.
<PAGE>

(j) "Municipal Bonds" means obligations issued by or on behalf of
states, territories of the United States and the District of Columbia and
their political subdivisions, agencies and instrumentalities, the interest
from which is exempt from regular Federal income tax.

(k) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.

(1) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures and other entities, whether or not
legal entities, and governments and agencies and political subdivisions
thereof.

(m) "Series" individually or collectively means the two or more Series
as may be established and designated from time to time by the Trustees
pursuant to Section 5.11 hereof. Unless the context otherwise requires, the
term "Series" shall include Classes into which shares of the Trust, or of a
Series, may be divided from time to time.

(n) "Shareholder" means a record owner of Outstanding Shares.

(o) "Shareholder Servicing Agent" means a party furnishing services to
the Trust pursuant to any shareholder servicing contract described in
Section. 3.4 hereof.

(p) "Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust shall be divided from time to time,
including the Shares of any and all Series and Classes which may be
established by the Trustees, and includes fractions of Shares as well as
whole Shares. "Outstanding Shares" means those Shares shown from time to
time on the books of the Trust or its Transfer Agent as then issued and
outstanding, but shall not include Shares which have been redeemed or
repurchased by the Trust and which are at the time held in the treasury of
the Trust.

(q) "Transfer Agent" means any one or more Persons other than the Trust
who maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.

(r) "Trust" means the Trust referred to in Section 1.1.

(s) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees.

(t) "Trustees" means the person, or persons, who has, or have, signed
this Declaration, so long as he, or they, shall continue in office in
accordance with the terms hereof, and all other persons who may from time
to time be duly qualified and serving as Trustees in accordance with the
provisions of Article II hereof, and reference herein to a Trustee or the
Trustees shall refer to such person or person in this capacity or their
capacities as trustees hereunder.

ARTICLE II

TRUSTEES

Section 2.1. General Powers. The Trustees shall have exclusive and absolute
control over the Trust Property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the Trust Property and
business in their own right, but with such powers of delegation as may be
permitted by this Declaration. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its
branches and maintain offices both within and without the Commonwealth of
Massachusetts, in any and all states of the United States of America, in the
District of Columbia, and in any and all commonwealths, territories,
dependencies, colonies, possessions, agencies or instrumentalities of the
United States of America and of foreign governments, and to do all such other
things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically mentioned. Any determination as to what is in the
interests of the Trust made by the Trustees in good faith shall be conclusive.
In construing the provisions of this Declaration, the presumption shall be in
favor of a grant of power to the Trustees.

2
<PAGE>

The enumeration of any specific power herein shall not be construed as
limiting the aforesaid power. Such powers of the Trustees may be exercised
without order of or resort to any court.

Section 2.2. Investments.

(a) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of such
operations.

(b) To invest in, hold for investment, or reinvest in, securities, including
common and preferred stocks; warrants; bonds, debentures, bills, time notes and
all other evidences of indebtedness; negotiable or non-negotiable instruments;
any form of gold or other precious metal; commodity contracts; shares of, or
any other interest in, any investment company as defined in the 1940 Act;
government securities, including securities of any state, municipality or other
political subdivision thereof, or any governmental or quasi governmental agency
or instrumentality; and money market instruments including bank certificates of
deposit, finance paper, commercial paper, bankers acceptances and all kinds of
repurchase agreements, of any corporation, company, trust, association, firm or
other business organization however established, and of any country, state,
municipality or other political subdivision, or any governmental or quasi-
governmental agency or instrumentality; "when issued" contracts for any such
securities, contracts or interests; to retain Trust assets in cash and from
time to time to change the securities contracts or interest in which the assets
of the Trust are invested.

(c) To acquire (by purchase, subscription or otherwise), to hold, to trade
in and deal in, to acquire any rights or options to purchase or sell, to sell
or otherwise dispose of, to lend, and to pledge any such securities, contracts
or interests, and to enter into repurchase agreements and forward foreign
currency exchange contracts, to purchase and sell futures contracts on
securities, securities indices and foreign currencies, to purchase or sell
options on sucks contracts, foreign currency contracts, and foreign currencies
and to engage in all types of hedging and risk management transactions.

(d) To exercise all rights, powers and privileges of ownership or interest
in all securities, repurchase agreements, futures contracts and options and
other assets included in the Trust Property, including the right to vote
thereon and otherwise act with respect thereto and to do all acts for the
preservation, protection, improvement and enhancement in value of all such
assets.

(e) To acquire (by purchase, lease or otherwise) and to hold, use, maintain,
develop and dispose of (by sale or otherwise) any property, real or personal,
including cash, and any interest therein.

(f) To borrow money and in this connection issue notes or other evidence of
indebtedness; to secure borrowings by mortgaging, pledging or otherwise
subjecting as security the Trust Property; to endorse, guarantee, or undertake
the performance of any obligation or engagement of any other Person and to lend
Trust property.

(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest, and to guarantee
or become surety on any or all of the contracts, stocks, bonds, notes,
debentures and other obligations of any such corporation, company, trust,
association or firm.

(h) To enter into a plan of distribution and any related agreements whereby
the Trust may finance directly or indirectly any activity which is primarily
intended to result in the sale of Shares.

(i) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or Proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either along or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connection with the aforesaid business or
purposes, objects or powers.

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The foregoing clauses shall be construed both as objects and powers, and the
foregoing enumeration of specific powers shall not be held to limit or restrict
in any manner the general powers of the Trustees.

The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust, nor shall the Trustees be limited
by any law limiting the investment which may be made by fiduciaries.

Section 2.3. Legal Title. Legal title to all the Trust Property, including
the property of any Series of the Trust, shall be vested in the Trustees as
joint tenants except that the Trustees shall have power to cause legal title to
any Trust Property to be held by or in the name of one or more of the Trustees,
or in the name of the Trust, or in the name of any other person as nominee, on
such terms as the Trustees may determine, provided that the interest of the
Trust therein is deemed appropriately protected. The right, title and interest
of the Trustees in the Trust Property and the property of each Series of the
Trust shall vest automatically in each Person who may hereafter become a
Trustee. Upon the termination of the term of office, resignation, removal or
death of a Trustee he shall automatically cease to have any right, title or
interest in any of the Trust Property or the property of any Series of the
Trust, and the right, title and interest of such Trustee in the Trust Property
shall vest automatically in the remaining Trustees. Such vesting and cessation
of title shall be effective whether or not conveyancing documents have been
executed and delivered.

Section 2.4. Issuance and Repurchase of Shares. The Trustees shall have the
power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in Shares and,
subject to the provisions set forth in Articles VI and VII and Section 5.11
hereof, to apply to any such repurchase, redemption, retirement, cancellation
or acquisition of Shares any funds or property of the particular series of the
Trust with respect to which such Shares are issued, whether capital or surplus
or otherwise, to the full extent now or hereafter permitted by the laws of the
Commonwealth of Massachusetts governing business corporation.

Section 2.5. Delegation; Committees. The Trustees shall have power to
delegate from time to time to such of their number or to officers, employees or
agents of the Trust the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Trustees or
otherwise as the Trustees may deem expedient, to the sine extent as such
delegations permitted by the 1940 Act.

Section 2.6. Collection and Payment The Trustees shall have the power to
collect all property due to the Trust; to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the Trust Property; to foreclose any security interest
securing any obligations, by virtue of which any property is owed to the Trust;
and to enter into releases, agreements and other instruments.

Section 2.7. Expenses. The Trustees shall have the power to incur and pay
any expenses which in the opinion of the Trustees are necessary or incidental
to carry out any of the purposes of this Declaration, and to pay reasonable
compensation from the funds of the Trust to themselves as Trustees. The
Trustees shall fix the compensation of all officers, employees and Trustees.

Section 2.8. Manner of Acting; By-laws. Except as otherwise, provided herein
or in the By-laws, any action to be taken by the Trustee may be taken by a
majority of the Trustees present at a meeting of Trustees (a quorum being
present), including any meeting held by means of a conference telephone circuit
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, or by written consents of the entire number
of Trustees then in office. The Trustees may adopt By-laws not inconsistent
with this Declaration to provide for the conduct of the business of the Trust
and may amend or repeal such By-laws to the extent such power is not reserved
to the Shareholders.

Notwithstanding the foregoing provisions of this Section 2.8 and in addition
to such provisions or any other provision of this Declaration or of the By-
laws, the Trustees may by resolution appoint a committee

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consisting of less than the whole number of Trustees then in office, which
committee may be empowered to act for and bind the Trustees and the Trust, as
if The acts of such committee were the acts of all the Trustees then in office,
with respect to the institution, prosecution, dismissal, settlement, review or
investigation of any action, suit or proceeding which shall be pending or
threatened to be brought before any court, administrative agency or other
adjudicatory body.

Section 2.9. Miscellaneous Powers. Subject to Section 5.11 hereof, the
Trustees shall have the power to: (a) employ or contract with such Persons as
the Trustees may deem desirable for the transaction of the business of the
Trust; (b) enter into joint ventures, partnerships and any other combinations
or associations; (c) remove Trustees or fill vacancies in or add to their
number, elect and remove such officers and appoint and terminate such agents or
employees as they consider appropriate, and appoint from their own number, and
terminate, any one or more committees which may exercise some or all of the
power and authority of the Trustees as the Trustees may determine; (d)
purchase, and pay for out of Trust Property, insurance policies insuring the
Shareholders, the Administrator, Trustees, officers, employees, agents,
investment advisers, distributors, selected dealers or independent contractors
of the Trust against all claims arising by reason of holding any such position
or by reason of any action taken or omitted by any such Person in such
capacity, whether or not constituting negligence, or whether or not the Trust
would have the power to indemnify such Person against such liability; (e)
establish pension, profit-sharing, share purchase, and other retirement,
incentive and benefit plans for any Trustees, officers, employees and agents of
the Trust; (f) to the extent permitted by law, indemnify any person with whom
the Trust has dealings, including the Investment Adviser, Distributor, Transfer
Agent and selected dealers, to such extent as the Trustees shall determine; (g)
guarantee indebtedness or contractual obligations of others; (h) determine and
change the fiscal year of the Trust and the method by which its accounts shall
be kept; and (i) adopt a seal for the Trust, but the absence of such seal shall
not impair the validity of any instrument executed on behalf of the Trust.

Section 2.10. Principal Transactions. Except in transactions not permitted
by the 1940 Act or rules and regulations adopted by the Commission, the
Trustees may, on behalf of the Trust, buy any securities from or sell any
securities to, or lend any assets of the Trust to, any Trustee or officer of
the Trust or any firm of which any such Trustee or officer is a member acting
as principal, or have any such dealings with the Investment Adviser,
Distributor or transfer agent or with any interested Person of such Person; and
the Trust may employ any such person, or firm or company which such Person is
an Interested Person, as broker, legal counsel, registrar, transfer agent,,
dividend disbursing agent or Custodian upon customary terms.

Section 2.11. Number of Trustees. The number of Trustees shall initially be
two (2), and thereafter shall be such number as shall be fixed from time to
time by a written instrument signed by a majority of the Trustees, provided,
however, that the number of Trustees shall in no event be more than fifteen
(15).

Section 2.12. Election and Term. Except for the Trustees named herein or
appointed to fill vacancies pursuant to Section 2.14 hereof, the Trustees shall
be elected by the Shareholders owning of record a plurality of the Shares
voting at a meeting of Shareholders. Such a meeting shall be held on a date
fixed by the Trustees. Except in the event of resignation or removals pursuant
to Section 2.13 hereof, each Trustee shall hold office until such time as less
than a majority of the Trustees holding office have been elected by
Shareholders. In such event the Trustees then in office will call a
Shareholders' meeting for the election of Trustees. Except for the foregoing
circumstances, the Trustees shall continue to hold office and may appoint
successor Trustees.

Section 2.13. Resignation and Removal. Any Trustee may resign his trust
(without the need for any prior or subsequent accounting) by an instrument in
writing signed by him, and delivered to the other Trustees and such resignation
shall be effective upon such delivery, or at a later date according to the
terms of the instrument. Any of the Trustees may be removed (provided the
aggregate number of Trustees after such removal shall not be less than one)
with cause, by the action of two-thirds of the remaining Trustees. Any Trustee
may be removed at any meeting of Shareholders by vote of two-thirds of the
Outstanding Shares. The Trustees shall promptly call a meeting of the
Shareholders for the purpose of voting upon the question of

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removal of any such Trustee or Trustees when requested in writing so to do by
the holders of not less than ten percent of the Outstanding Shares and, in that
connection, the Trustees will assist shareholder communications to the extent
provided for in Section 16(c) under the 1940 Act. Upon the resignation or
removal of a Trustee, or his otherwise ceasing to be a Trustee, he shall
execute and deliver such documents as the remaining Trustees shall require for
the purpose of conveying to the Trust or the remaining Trustees any Trust
Property or property of any series of the Trust held in the name of the
resigning or removed Trustee. Upon the incapacity or death of any Trustee, his
legal representative shall execute and deliver on his behalf such documents as
the remaining Trustees shall require as provided in the preceding sentence.

Section 2.14. Vacancies. The term of office of a Trustee shall terminate and
a vacancy shall occur in the event of the death, resignation, removal,
bankruptcy, adjudicated incompetence or other incapacity to perform the duties
of the office of a Trustee. No such vacancy shall operate to annul the
Declaration or to revoke any existing agency created pursuant to the terms of
the Declaration. In the case of an existing vacancy, including a vacancy
existing by reason of an increase in the number of Trustees, subject to the
provisions of Section 16(a) of the 1940 Act, the remaining Trustees shall fill
such vacancy by the appointment of such other person as they in their
discretion shall see fit, made by a written instrument signed by a majority of
the Trustees then in office. Any such appointment shall not become effective,
however, until the person named in the written instrument of appointment shall
have accepted in writing such appointment and agreed in writing to be bound by
the terms of the Declaration. An appointment of a Trustee may be made in
anticipation of a vacancy to occur at a later date by reason of retirement,
resignation or increase in the number of Trustees, provided that such
appointment shall not become effective prior to such retirement, resignation or
increase in the number of Trustees. Whenever a vacancy in the number of
Trustees shall occur, until such vacancy is filled as provided in this Section
2.14, the Trustees in office, regardless of their number, shall have all the
powers granted to the Trustees and shall discharge all the duties imposed upon
the Trustees by the Declaration. A written instrument certifying the existence
of such vacancy signed by a majority of the Trustees in office shall be
conclusive evidence of the existence of such vacancy.

Section 2.15. Delegation of Power to Other Trustees. Any Trustee may, by
power of attorney, delegate his power for a period not to exceed six (6) months
at any one time to any other Trustee or Trustees; provided that in no case
shall less than two (2) Trustees personally exercise the powers granted to the
Trustees under this Declaration except as herein otherwise expressly provided.

ARTICLE III

CONTRACTS

Section 3.1. Distribution Contract. The Trustees may in their discretion
from time to time enter into an exclusive or non-exclusive underwriting
contract or contracts providing for the sale of the Shares at a price based on
the net asset value of a Share, whereby the Trustees may either agree to sell
the Shares to the other party to the contract or appoint such other party their
sales agent for the Shares, and in either case on such terms and conditions, if
any, as may be prescribed in the By-Laws, and such further terms and conditions
as the Trustees may inn their discretion determine not inconsistent with the
provision of this Article III or of the By-Laws; and such contract may also
provide for the repurchase of the Shares by such other parry as agent of the
Trustees. Such contract may also further provide that such other party may
enter into selected dealer agreements with registered securities dealers to
further the purpose of the distribution or repurchase of the Shares. The
foregoing services may be provided by one or more persons.

Section 3.2. Advisory or Management Contract. The Trustees may in their
discretion from time to time enter into an investment advisory or management
contract or separate advisory contracts with respect to one or more Series
whereby the other party to such contract shall undertake to furnish to the
Trust such management, investment advisory, statistical and research facilities
and services and such other facilities and services, if any,

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and all upon such terms and conditions as the Trustees may in their discretion
determine, including the grant of authority to such other party to determine
what securities shall be purchased or sold by the Trust and what portion of its
assets shall be uninvested, which authority shall include the power to make
changes in the investments of the Trust or any Series.

The Trustees may also employ, or authorize the Investment Adviser to employ,
one or more sub advisers from time to time to perform such of the acts and
services of the Investment Adviser and upon such terms and conditions as may be
agreed upon between the Investment Adviser and such sub-advisers and approved
by the Trustees. Any reference in this Declaration to the Investment Adviser
shall be deemed to include such sub-advisers unless the context otherwise
requires

Section 3.3. Administrator. The Trustees may in their discretion from time
to time enter into one or more administrative services contracts whereby the
other party to each such contract shall undertake to furnish such
administrative services to the Trust as the Trustees shall from time to time
consider desirable and all upon such terms and conditions as the Trustees may
in their discretion determine, provided that such terms and conditions are not
inconsistent with the provisions of this Declaration or the By-Laws. Such
services may be provided by one or more persons.

Section 3.4. Transfer Agent and Shareholder Servicing Agents. The Trustees
may in their discretion from time to time enter into one or more transfer
agency contracts and one or more shareholder servicing contracts whereby the
other party to each such contract shall undertake to furnish such transfer
agency and/or shareholder services to the Trust as the Trustees shall from time
to time consider desirable and all upon such terms and conditions as the
Trustees may in their discretion determine, provided that such terms and
conditions are not inconsistent with the provisions of this Declaration or the
By-Laws. Such services may be provided by one or more Persons.

Section 3.5. Affiliations of Trustees or Officers.

The fact that:

(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholders, director, officer, partner, trustee, employee, manager,
adviser or distributor of or for any partnership, corporation, trust,
association or other organization or of or for any parent or affiliate of
any organization, with which a contract of the character described in
Sections 3.1, 3.2, 3.3 or 3.4 above or any Custodian contract as described
in Article X of the By-Laws, or for related services may have been or may
hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder of or has an interest in the Trust, or
that

(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in Sections
3.1, 3.2, 3.3 or 3.4 above or for services as Custodian or for related
services may have been or may hereafter be made also has any one or more of
such contracts with one or more other partnerships corporations, trusts,
associations, or other organizations, or has other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing
the same or create any liability or accountability to the Trust or its
Shareholders.

Section 3.6. Compliance with 1940 Act. Any contract entered into pursuant to
Sections 3.1 or 3.2, shall be consistent with and subject to the requirements
of Section 15 of the 1940 Act (including any amendment thereof or other
applicable act of Congress hereafter enacted), as modified by any applicable
order or orders of the Commission, with respect to its continuance in effect,
its termination and the method of authorization and approval of such contract
or renewal thereof.

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ARTICLE IV

LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OFFICERS

Section 4.1. No Personal Liability of Shareholders, Trustees. No Shareholder
shall be subject to any personal liability whatsoever to any Person in
connection with Trust property or the acts, obligations or affairs of the
Trust. No Trustee, officer, employee or agent of the Trust shall be subject to
any personal liability whatsoever to any Person, other than to the Trust or its
Shareholders, in connection with Trust property or the affairs of the Trust,
save only that arising from bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties with respect to such Person; and all such
Persons shall look solely to the Trust Property for satisfaction of claims of
any nature arising in connection with the affairs of the Trust. If any
Shareholder, Trustee, officer, employee, or agent, as such, of the Trust, is
made a party to any suit or proceeding to enforce any such liability of the
Trust, he shall not, on account thereof, be held to any personal liability. The
Trust shall indemnify and hold each Shareholder harmless from, and against all
claims and liabilities, to which such Shareholder may become subject by reason
of his being or having been a Shareholder, and shall reimburse such Shareholder
for all legal and other expenses reasonably incurred by him in connection with
any such claim or liability. The indemnification and reimbursement required by
the preceding sentence shall be made only out of the assets of the one or more
Series of which the Shareholder who is entitled to indemnification or
reimbursement was a Shareholder at the time the act or event occurred which
gave rise to the claim against or liability of said Shareholder. The rights
accruing to a Shareholder under this Section 4.1 shall not impair any other
right to which such Shareholder may be lawfully entitled, nor shall anything
herein contained restrict the right of the Trust to indemnify or reimburse a
Shareholder in any appropriate situation even though not specifically provided
herein.

Section 4.2. Non-Liability of Trustees. No Trustee, officer, employee or
agent of the Trust shall be liable to the Trust, its Shareholders, or to any
Shareholder, Trustee, officer, employee, or agent thereof for any action or
failure to act (including without limitation the failure to compel in any way
any former or acting Trustee to redress any breach of trust) except for his own
bad faith, willful misfeasance, gross negligence or reckless disregard of the
duties involved in the conduct of his office.

Section 4.3. Mandatory Indemnification. (a) Subject to the exceptions and
limitations contained in paragraph (b) below:

(i) every person who is, or has been, a Trustee or officer of the Trust
shall be indemnified by the Trust to the fullest extent permitted by law
against all liability and against all expenses reasonably incurred or paid
by him in connection with any claim, action, suit or proceeding in which he
becomes involved as a party or otherwise by virtue of his being or having
been, a Trustee or officer and against amounts paid or incurred by him in
the settlement thereof, and

(ii) the words "claim," "action," "suit," or "proceeding" shall apply to
all claims, actions, suits or proceedings (civil, criminal, administrative
or other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include, without limitation, attorneys
fees, costs, judgments, amounts paid in settlement, fines, penalties and
other liabilities.

(b) No indemnification shall be provided hereunder to a Trustee or officer:

(i) against any liability to the Trust, a Series thereof, or the
Shareholders by reason of a final adjudication by a court or other body
before which a proceeding was brought that he engaged in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office;

(ii) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief that
his action was in the best interest of the Trust; or

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(iii) in the event of a settlement or other disposition not involving a
final adjudication as provided in paragraph (b)(i) or (b)(ii) resulting in
a payment by a Trustee or officer, unless there has been a determination
that such Trustee or officer did not engage in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office:

(A) by the court or other body approving the settlement of other
disposition; or,

(B) based upon a review of readily available facts (as opposed to a
full trial-type inquiry) by (x) vote of a majority of the Disinterested
Trustees acting on the matter (provided that a majority of the
Disinterested Trustees then in office act on the matter) or (y) written
opinion of independent legal counsel.

(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now or hereafter be entitled,
shall continue as to a person who has ceased to be such Trustee or officer and
shall inure to the benefit of the heirs, executors, administrators and assigns
of such a person. Nothing contained herein shall affect any rights to
indemnification to which personnel of the Trust other than Trustees and
officers may be entitled by contract or otherwise under law.

(d) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in paragraph (a) of this
Section 4.3 may be advanced by the Trust prior to final disposition thereof
upon receipt of an undertaking by or on behalf of the recipient to repay such
amount if it is ultimately determined that he is not entitled to
indemnification under this Section 4.3, provided that either:

(i) such undertaking is secured by a surety bond or some other
appropriate security provided by the recipient, or the Trust shall be
insured against losses arising out of any such advances; or

(ii) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees act on the matter)
or an independent legal counsel in a written opinion shall determine, based
upon a review of readily available facts (as opposed to a full trial type
inquiry), that there is reason to believe that the recipient ultimately
will be found entitled to indemnification.

As used in this Section 4.3, a "Disinterested Trustee" is one who is not (i)
an Interested Person of the Trust (including anyone who has been exempted from
being an Interested Person by any rule, regulation or order of the Commission),
or (ii) involved in the claim, action, suit or proceeding.

Section 4.4. No Bond Required of Trustees. No Trustee shall be obligated to
give any bond or other security for the Performance of any of his duties
hereunder.

Section 4.5. No Duty of Investigation; Notice in Trust Instruments. No
purchaser, lender, transfer agent or other Person dealing with the Trustees or
any officer, employee or agent of the Trust shall be bound to make any inquiry
concerning the validity of any transaction purporting to be made by the
Trustees or by said officer, employee or agent or be liable for the application
of money or property paid, loaned, or delivered to or on the order of the
Trustees or of said officer, employee or agent. Every obligation, contract,
instrument, certificate, Share, other security of the Trust or undertaking, and
every other act or thing whatsoever executed in connection with the Trust shall
be conclusively presumed to have been executed or done by the executors thereof
only in their capacity as "trustees under this Declaration or in their capacity
as officers, employees or agents of the Trust. Every written obligation,
contract, instrument, certificate, share, other security of the Trust or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust under any such instrument are not binding
upon any of the Trustees or Shareholders individually, but bind only the trust
estate, and may contain any further recital which they or he may deem
appropriate, but the omission of such recital shall not operate to bind the
Trustees individually. The Trustees shall at all times maintain insurance for
the protection of the Trust Property, its Shareholders, Trustees, officers,
employees and agents in such amount as the Trustees shall deem adequate to
cover possible tort liability, and such other insurance as the Trustees in
their sole judgment shall deem advisable.

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Section 4.6. Reliance on Experts. Each Trustee and officer or employee of
the Trust shall, in the performance of his duties, be fully and completely
justified and protected with regard to any act or any failure to act resulting
from reliance in good faith upon the books of account or other records of the
Trust, upon an opinion of counsel, or upon reports made to the Trust by any of
its officers or employees or by the Investment Adviser, the Distributor,
Transfer Agent, selected dealers, accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees, officers or
employees of the Trust, regardless of whether such counsel or expert may also
be a Trustee.

ARTICLE V

SHARE OF BENEFICIAL INTEREST

Section 5.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of beneficial interest, all
of one class, except as provided in Section 5.11 and Section 5.13 hereof, par
value $.0l per share. The number of Shares of beneficial interest authorized
hereunder is unlimited. All Shares issued hereunder including, without
limitation, Shares issued in connection with a dividend in Shares or a split of
shares, shall be fully paid and non-assessable.

Section 5.2. Rights of Shareholders. The ownership of the Trust Property and
the property of each Series of the Trust of every description and the right to
conduct any business hereinbefore described are vested exclusively in the
Trustees, and the Shareholders shall have no interest therein other than the
beneficial interest conferred by their Shares, and they shall have no right to
call for any partition or division of any property, profits, rights or
interests of the Trust nor can they be called upon to share or assume any
losses of the Trust nor can they suffer an assessment of any kind by virtue of
their ownership of Shares. The Shares shall be personal property giving only
the rights specifically set forth in this Declaration. The Shares shall not
entitle the holder to preference, preemptive, appraisal, conversion or exchange
rights, except as the Trustees may determine with respect to any Series of
Shares.

Section 5.3. Trust Only . It is the intention of the Trustees to create only
the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to
create a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or member of
a joint stock association.

Section 5.4. Issuance of Shares. The Trustees in their discretion may, from
time to time without vote of the Shareholders, issue Shares, in addition to the
then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times and on such terms as the Trustees may deem
best, and may in such manner acquire other assets (including the acquisition of
assets subject to, and in connection with the assumption of liabilities) and
businesses. In connection with any issuance of Shares, the Trustees may issue
fractional Shares and Shares held in the treasury. The Trustees may from time
to time divide or combine the Shares into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Trust.
Contributions to the Trust may be accepted for, and Shares shall be redeemed
as, whole Shares and/or 1/1,000ths of a Share or integral multiples thereof.

Section 5.5. Register of Shares. A register shall be kept at the principal
office of the Trust or an office of the Transfer Agent which shall contain the
names and addresses of the Shareholders and the number of Shares held by them
respectively and a record of all transfers thereof. Such register shall be
conclusive as to who are the holders of the Shares and who shall be entitled to
receive dividends or distributions or otherwise to exercise or enjoy the rights
of Shareholders. No Shareholder shall be entitled to receive payment of any
dividend or distribution, nor to have notice given to him as herein or in the
By-Laws provided, until he has given his address to the Transfer Agent or such
other officer or agent of the Trustees as shall keep the said

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register for entry thereon. It is not contemplated that certificates will be
issued for the Shares; however, the Trustees, in their discretion, may
authorize the issuance of share certificates and promulgate appropriate rules
and regulations as to their use.

Section 5.6. Transfer of Shares. Except as otherwise provided by the
Trustees, shares shall be transferable on the records of the Trust only by the
record holder thereof or by his agent thereunto duly authorized in writing,
upon delivery to the Trustees or the Transfer Agent of a duly executed
instrument of transfer, together with such evidence of the genuineness of each
such execution and authorization and of other matter as may reasonably be
required. Upon such delivery the transfer shall be recorded on the register of
the Trust. Until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any transfer agent or registrar nor any officer, employee or agent
of the Trust shall be affected by any notice of the proposed transfer.

Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or
incompetence, or other operation of law.

Section 5.7. Notices, Reports. Any and all notices to which any Shareholder
may be entitled and any and all communications shall be deemed duly served or
given if mailed, postage prepaid, addressed to any Shareholder of record at his
last known address as recorded on the register of the Trust. A notice of a
meeting, an annual report and any other communication to Shareholders need not
be sent to a Shareholder (i) if an annual report and a proxy statement for two
consecutive shareholder meetings have been mailed to such Shareholders address
and have been returned as undeliverable, (ii) if all, and at least two, checks
(if sent by first class mail) in payment of dividends on Shares during a
twelve-month period have been mailed to such Shareholder's address and have
been returned as undeliverable or (iii) in any other case in which a proxy
statement concerning a meeting of security holders is not required to be given
pursuant to the Commission's proxy rules as from time to time in effect under
the Securities Exchange Act of 1934. However, delivery of such proxy
statements, annual reports and other communications shall resume if and when
such Shareholder delivers or causes to be delivered to the Trust written notice
setting forth such Shareholder's then current address.

Section 5.8. Treasury Shares. Shares held in the treasury shall, until
reissued pursuant to Section 5.4, not confer any voting rights on the Trustees,
nor shall such Shares be entitled to any dividends or other distributions
declared with respect to the Shares.

Section 5.9. Voting Powers. The Shareholders shall have power to vote only
(i) for the election of Trustees as provided in Section 2.12; (ii) for the
removal of Trustees as provided in Section 2.13; (iii) with respect to any
investment advisory or management contract entered into pursuant to Section
3.2; (iv) with respect to termination of the Trust as provided in Section 9.2;
(v) with respect to any amendment of this Declaration to the extent and as
provided in Section 9.3; (vi) with respect to any merger, consolidation or sale
of assets as provided in Section 9.4; (vii) with respect to incorporation of
the Trust or any Series to the extent and as provided in Section 9.5; (viii) to
the same extent as the stockholders of a Massachusetts business corporation as
to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or any Series or Class thereof or the Shareholders (provided, however, that a
Shareholder of a particular Series or Class shall not be entitled to a
derivative or class action on behalf of any other Series or Class (or
Shareholder of any other Series or Class) of the Trust); (ix) with respect to
any plan adopted pursuant to Rule l2b-1 (or any successor rule) under the 1940
Act; and (x) with respect to such additional matters relating to the Trust as
may be required by this Declaration, the By-Laws or any registration of the
Trust as an investment company under the 1940 Act with the Commission (or any
successor agency) or as the Trustees may consider necessary or desirable. Each
whole

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Share shall be entitled to one vote as to any matter on which it is entitled to
vote and each fractional Share shall be entitled to a proportionate fractional
vote, except that the Trustees may, in conjunction with the establishment of
any Series or Class of Shares, establish or reserve the right to establish
conditions under which the several Series or Classes shall have separate voting
rights or, if a Series or Class would not, in the sole judgment of the
Trustees, be materially affected by a proposal, no voting rights. There shall
be no cumulative voting in the election of Trustees. Until Shares are issued,
the Trustees may exercise all rights of Shareholders and may take any action
required by law, this Declaration or the By-laws to be taken by Shareholders.
The By-laws may include further provisions for Shareholders votes and meetings
and related matters.

Section 5.10. Meetings of Shareholders. Meetings of Shareholders may be
called at any time by the President, and shall be called by the President and
Secretary at the request in writing or by resolution, of a majority of
Trustees, or at the written request of the holder or holders of ten percent
(10%) or more of the total number of Shares then issued and outstanding of the
Trust entitled to vote at such meeting. Any such request shall state the
purpose of the proposed meeting. At any meeting of Shareholders of the Trust or
of any series of the Trust, a Shareholder Servicing Agent may vote any shares
as to which such Shareholder Servicing Agent is the Agent of record and which
are not otherwise represented in person or by proxy at the meeting,
proportionately in accordance with the votes cast by holders of all shares
otherwise represented at the meeting in person or by proxy as to which such
Shareholder Servicing Agent is the agent of record. Any shares so voted by a
Shareholder Servicing Agent will be deemed represented at the meeting for
quorum purposes.

Section 5.11. Series Designation. The Trustees, in their discretion, may
authorize the division of Shares into two or more Series, and the different
Series shall be established and designated, and the variations in the relative
rights and preferences as between the different Series shall be fixed and
determined, by the Trustees; provided, that all Shares shall be identical
except that there may be variations so fixed and determined between different
Series as to investment objective, purchase price, allocation of expenses,
right of redemption, special and relative rights as to dividends and on
liquidation, conversion rights, and conditions under which the several Series
shall have separate voting rights. All references to Shares in this Declaration
shall be deemed to be Shares of any or all series as the context may require.

If the Trustees shall divide the Shares of the Trust into two or more
Series, the following provisions shall be applicable:

(a) All provisions herein relating to the Trust shall apply equally to
each Series of the Trust except as the context requires otherwise.

(b) The number of authorized Shares and the number of Shares of each
Series that may be issued shall be unlimited. The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and
reacquired of any Series into one or more Series that may be established
and designated froze time to time. The Trustees may hold as treasury Shares
(of the same or some other Series), reissue for such consideration and on
such terms as they may determine, or cancel any Shares of any Series
reacquired by the Trust at their discretion from time to time.

(c) All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the
rights of creditors of such Series and except as may otherwise be required
by applicable laws, and shall be so recorded upon the books of account of
the Trust. In the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular Series, the Trustees shall
allocate them among any one or more of the Series established and
designated from time to time in such matter and on such basis as they, in
their sole discretion, deem fair and equitable. Each such allocation by the
Trustees shall be conclusive and binding upon the shareholders of all
Series for all purposes.

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(d) The assets belonging to each particular Series shall be charged with
the liabilities of the Trust in respect of that Series and all expenses,
costs, charges and reserves attributable to that Series, and any general
liabilities, expenses, costs, charges or reserves of the Trust which are
not readily identifiable as belonging to any particular Series shall be
allocated and charged by the Trustees to and among any one or more of the
Series established and designated from time to time in such manner and on
such basis as the Trustees in their sole discretion deem fair and
equitable. Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon the
Shareholders of all Series for all purposes. The Trustees shall have full
discretion, to the extent not inconsistent with the 1940 Act, to determine
which items are capital; and each such determination and allocation shall
be conclusive and binding upon the Shareholders. The assets of a particular
Series of the Trust shall, under no circumstances, be charged with
liabilities attributable to any other Series of the Trust. All persons
extending credit to, or contracting with or having any claim against a
particular Series of the Trust shall look only to the assets of that
particular Series for payment of such credit, contract or claim. No
Shareholder or former Shareholder of any Series shall have any claim on or
right to any assets allocated or belonging to any other series.

(e) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a
Series shall be entitled to receive his pro rata share of distributions of
income and capital gains made with respect to such Series. Upon redemption
of his Shares or indemnification for liabilities incurred by reason of his
being or having been a Shareholder of a Series, such shareholder shall be
paid solely out of the funds and property of such Series of the Trust. Upon
liquidation or termination of a Series of the Trust, Shareholders of such
Series shall be entitled to receive a pro rata share of the net assets of
such Series. A Shareholder of a particular Series of the Trust shall not be
entitled to participate in a derivative or class action on behalf of any
other Series or the Shareholders of any other Series of the Trust.

(f) The establishment and designation of any Series of Shares shall be
effective upon the execution by a majority of the then Trustees of an
instrument setting forth such establishment and designation and the
relative rights and preferences of such Series, or as otherwise provided in
such instrument. The Trustees may by an instrument executed by a majority
of their number abolish any Series and the establishment and designation
thereof Except as otherwise provided in this Article V, the Trustees shall
have the power to determine the designations, preferences, privileges,
limitations and rights, of each class and Series of Shares. Each instrument
referred to in this paragraph shall have the status of an amendment to this
Declaration.

Section 5.12. Assent to Declaration of Trust. Every Shareholder, by virtue
of having become a shareholder, shall be held to have expressly assented and
agreed to the terms hereof and to have become a party hereto.

Section 5.13. Class Designation. The Trustees, in their discretion, may
authorize the division of the Shares of the Trust, or, if any Series be
established, the Shares of any Series, into two or more Classes, and the
different Classes shall be established and designated, and the variations in
the relative rights and preferences as between the different Classes shall be
fixed and determined by the Trustees; provided, that all Shares of the Trust or
of any Series shall be identical to all other Shares of the Trust or the same
Series, as the case may be, except that there may be variations between
different classes as to allocation of expenses, right of redemption, special
and relative rights as to dividends and on liquidation, conversion rights, and
conditions under which the several Classes shall have separate voting rights.
All references to Shares in this Declaration shall be deemed to be Shares of
any or all Classes as the context may require.

If the Trustees shall divide the Shares of the Trust or any Series into two
or more Classes, the following provisions shall be applicable:

(a) All provisions herein relating to the Trust, or any Series of the
Trust, shall apply equally to each class of Shares of the Trust or of any
Series of the Trust, except as the context requires otherwise.

(b) The number of Shares of each Class that may be issued shall be
unlimited. The Trustees may classify or reclassify any unissued Shares of
the Trust or any Series or any Shares previously issued and

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reacquired of any Class of the Trust or of any Series into one or more
Classes that may be established and designated from time to time. The
Trustees may hold as treasury Shares (of the same or some other class),
reissue for such consideration and on such terms as they may determine, or
cancel any Shares of any Class reacquired by the Trust at their discretion
from time to time.

(c) Liabilities, expenses, costs, charges and reserves related to the
distribution of, and other identified expenses that should properly be
allocated to, the Shares of a particular Class may be charged to and borne
solely by such Class and the bearing of expenses solely by a Class of
Shares may be appropriately reflected (in a manner determined by the
Trustees) and cause differences in the net asset value attributable to, and
the dividend, redemption and liquidation rights of, the Shares of different
Classes. Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon the
Shareholders of all Classes for all purposes.

(d) The establishment and designation of any Class of Shares shall be
effective upon the execution of a majority of the then Trustees of an
instrument setting forth such establishment and designation and the
relative rights and preferences of such Class, or as otherwise provided in
such instrument. The Trustees may, by an instrument executed by a majority
of their number, abolish any Class and the establishment and designation
thereof. Each instrument referred to in this paragraph shall have the
status of an amendment to this Declaration.

ARTICLE VI

REDEMPTION AND REPURCHASE OF SHARES

Section 6.1. Redemption of Shares. All Shares of the Trust shall be
redeemable, at the redemption price determined in the manner set out in this
Declaration. Redeemed or repurchased Shares may be resold by the Trust.

The Trust shall redeem the Shares upon the appropriately verified written
application of the record holder thereof (or upon such other form of request as
the Trustees may determine) at the office of the Transfer Agent, the
Shareholder Servicing Agent, which is the agent of record for such Shareholder,
or at the office of any bank or trust company, either in or outside the office
of any bank or trust company, either in or outside the Commonwealth of
Massachusetts, which is a member of the Federal Reserve System and which the
said Transfer Agent or the said Shareholder Servicing Agent has designated for
that purpose, or at such office or agency as may be designated from, time to
time in the Trust's then effective registration statement under the Securities
Act of 1933. The Trustees may from time to time specify additional conditions,
not inconsistent with the 1940 Act, regarding the redemption of Shares in the
Trust's then effective registration statement under the Securities Act of 1933.

Section 6.2. Price. Shares shall be redeemed at their net asset value
determined as set forth in Section 7.1 hereof as of such time as the Trustees
shall have theretofore prescribed by resolution. In the absence of such
resolution, the redemption price of Shares deposited shall be the net asset
value of such Shares next determined as set forth in Section 7.1 hereof after
receipt of such application.

Section 6.3. Payment. Payment for such Shares shall be made in cash or in
property out of the assets of the relevant series of the Trust to the
Shareholder of record at such time and in the manner, not inconsistent with the
1940 Act or other applicable laws, as may be specified from time to time in the
Trust's then effective registration statement under the Securities Act of 1933,
subject to the provisions of Section 6.4 hereof.

Section 6.4. Effect of Suspension of Determination of Net Asset Value. If,
pursuant to Section 6.9 hereof, the Trustees shall declare a suspension of the
determination of net asset value, the rights of Shareholders (including those
who shall have applied for redemption pursuant to Section 6.1 hereof but who
shall not yet have received payment) to have Shares redeemed and paid for by
the Trust shall be suspended until the termination of such suspension is
declared. Any record holder who shall have his redemption right so

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suspended may, during the period of such suspension, by appropriate written
notice of revocation at the office or agency where application was made, revoke
any application for redemption not honored and withdraw any certificates on
deposit. The redemption price of Shares for which redemption applications have
not been revoked shall be the net asset value of such Shares next determined as
set forth in Section 7.1 after the termination of such suspension, and payment
shall be made within seven (7) days after the date upon which the application
was made plus the period after such application during which the determination
of net asset value was suspended.

Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose by agreement with the owner thereof at a price not exceeding the net
asset value per share determined as of the time when the purchase or contract
of purchase is made or the net asset value as of any time which may be later
determined pursuant to Section 7.1 hereof, provided payment is not made for the
Shares prior to the time as of which such net asset value is determined.

Section 6.6. Redemption of Sub-Minimum Accounts. The Trust shall have the
right at any time without prior notice to the shareholder to redeem shares of
any shareholder for their then current net asset value per share if at such
time the shareholder own Shares having an aggregate net asset value of less
than an amount set forth from time to time by the Trustees, subject to such
terms and conditions as the Trustees may approve, and subject to the Trust's
giving general notice to all shareholders of its intention to avail itself of
such right, either by publication in the Trust's registration statement, if
any, or by such other means as the Trustees may determine.

Section 6.7. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding. If the Trustees shall, at any time
and in good faith, be of the opinion that direct or indirect ownership of
Shares or other securities of the Trust has or may become concentrated in any
Person to an extent which would disqualify any Series of the Trust as a
regulated investment company under the Internal Revenue Code, then the Trustees
shall have the power by lot or other means deemed equitable by them (i) to call
for redemption by any such Person a number, or principal amount, of Shares or
other securities of the Trust sufficient to maintain or bring the direct or
indirect ownership of Shares or other securities of the Trust into conformity
with the requirements for such qualification, and (ii) to refuse to transfer or
issue Shares or other securities of the Trust to any Person whose acquisition
of the Shares or other securities of the Trust in question would result in such
disqualification. The redemption shall be effected at the redemption price and
in the manner provided in Section 6.1.

The holders of Shares or other securities of the Trust shall upon demand
disclose to the Trustees in writing such information with respect to direct and
indirect ownership of Shares or other securities of the Trust as the Trustees
deem necessary to comply with the provisions of the Internal Revenue Code, or
to comply with the requirements of any other taxing authority.

Section 6.8. Reductions in Number of Outstanding Shares Pursuant to Net
Asset Value Formula. The Trust may also reduce the number of Outstanding Shares
pursuant to the provisions of Section 7.3.

Section 6.9. Suspension of Right of Redemption . The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New
York Stock Exchange is closed other than customary week-end and holiday
closings, (ii) during which trading on the New York Stock Exchange is
restricted, (iii) during which an emergency exists as a result of which
disposal by the Trust of securities owned by it is not reasonably practicable
or it is not reasonably practicable for the Trust fairly to determine the value
of its net assets, or (iv) during any other period when the Commission may for
the protection of Shareholders of the Trust by order permit suspension of the
right of redemption or postponement of the date of payment or redemption;
provided that applicable rules and regulations of the Commission shall govern
as to whether the conditions prescribed in (ii), (iii), or (iv) exist. Such
suspension shall take effect at such time as the Trust shall specify but not
later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of

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redemption or payment on redemption until the Trust shall declare the
suspension at an end, except that the suspension shall terminate in any event
on the first day on which said stock exchange shall have reopened or the Period
specified in (ii) or (iii) shall have expired (as to which in the absence of an
official ruling by the Commission, the determination of the Trust shall be
conclusive). In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his request for redemption or receive payment
based on the net asset value existing after the termination of the suspension.

ARTICLE VII

DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS

Section 7.1. Net Asset Value. The value of the assets of the Trust or any
Series of the Trust shall be determined by appraisal of the securities of the
Trust or allocated to such Series, such appraisal to be on the basis of the
amortized cost of such securities in the case of money market securities,
market value in the case of other securities, or by such other method as shall
be deemed to reflect the fair value thereof, determined in good faith by or
under the direction of the Trustees. From the total value of said assets, there
shall be deducted all indebtedness, interest, taxes, payable or accrued,
including estimated taxes on unrealized book profits, expenses and management
charges accrued to the appraisal date, net income determined and declared as a
distribution and all other items in the nature of liabilities attributable to
the Trust or such Series or Class thereof which shall be deemed appropriate.
The net asset value of a Share shall be determined by dividing the net asset
value of the Class, or, if no Class has been established, of the Series, or if
no Series has been established, of the Trust, by the number of Shares of that
Class, or Series, of the Trust as applicable, outstanding. The net asset value
of Shares of the Trust or any Class or Series of the Trust shall be determined
pursuant to the procedure and methods prescribed or approved by the Trustees in
their discretion and as set forth in the most recent Registration Statement of
the Trust as filed with the Securities and Exchange Commission pursuant to the
requirements of the Securities Act of 1933, as amended, the Investment Company
Act of 1940, as amended, and the Rules thereunder. The net asset value of the
Shares shall be determined at least once on each business day, as of the close
of trading on the New York Stock Exchange or as of such other time or times as
the Trustees shall determine. The power and duty to make the daily calculations
may be delegated by the Trustees to the Investment Adviser, the custodian, the
Transfer Agent or such other person as the Trustees may determine by
resolution, or by approving a contract which delegates such duty to another
Person. The Trustees may suspend the daily determination of net asset value to
the extent permitted by the 1940 Act.

Section 7.2. Distributions to Shareholders. The Trustees shall from time to
time distribute ratably among the Shareholders of the Trust or a Series such
proportion of the net profits, surplus (including paid-in surplus), capital, or
assets of the Trust or such Series held by the Trustees as they may deem
proper. Such distributions may be made in cash or property (including without
limitation any type of obligations of the Trust or such Series or any assets
thereof), and the Trustees may distribute ratably among the Shareholders
additional Shares of the Trust or such Series issuable hereunder in such
manner, at such times, and on such terms as the Trustees may deem proper. Such
distributions may be among the Shareholders of record at the time of declaring
a distribution or among the Shareholders of record at such other date or time
or dates or times as the Trustees shall determine. To the extent the Trustees
deem it appropriate as a matter of administrative convenience, distributions to
Shareholders may be effected on different dates to different Shareholders,
provided that such distributions shall be made at regularly occurring intervals
of approximately the same length with respect to each Shareholder of the Trust.
The Trustees may in their discretion determine that, solely for the purposes of
such distributions, Outstanding Shares shall exclude Shares for which orders
have been placed subsequent to a specified time on the date the distribution is
declared or on the preceding day if the distribution is declared as of a day on
which Boston banks are not open for business, all as described in the
registration statement under the Securities Act of 1933. The Trustees may
always retain from the net profits such amount as they may deem necessary to
pay the debts or expenses of the Trust or the Series or to meet obligations of
the

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Trust or the Series, or as they may deem desirable to use in the conduct of its
affairs or to retain for future requirements or extensions of the business. The
Trustees may adopt and offer to Shareholders such dividend reinvestment plans,
cash dividend payout plans or related plans as the Trustees shall deem
appropriate.

Inasmuch as the computation of net income and gains for Federal income tax
purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust or the Series to avoid or reduce liability of taxes.

Section 7.3. Determination of Net Income; Constant Net Asset Value;
Reduction of Outstanding Shares. Subject to Section 5.11 hereof, the net income
of the Trust or any Series shall be determined in such manner as the Trustees
shall provide by resolution. Expenses of the Trust or a Series, including the
advisory or management fee and service fees, shall be accrued each day. Such
net income may be determined by or under the direction of the Trustees as of
the close of trading on the New York Stock Exchange on each day on which such
Exchange is open or as of such other time or times as the Trustees shall
determine, and, except as provided therein, all the net income of the Trust or
any Series, as so determined, may be declared as a dividend on the Outstanding
Shares of the Trust or such Series. If for any reason, the net income of the
Trust or any Series, determined at any time is a negative amount, the Trustees
shall have the power with respect to the Trust or such Series (i) to offset
each Shareholder's pro rata shares of such negative amount from the accrued
dividend account of such Shareholder, or (ii) to reduce the number of
Outstanding Shares of the Trust or such Series by reducing the number of Shares
in the account of such Shareholder by that number of full and fractional Shares
which represents the amount of such excess negative net income, or (iii) to
cause to be recorded on the books of the Trust or such Series an asset account
in the amount of such negative net income, which account may be reduced by the
amount, provided that the same shall thereupon become the property of the Trust
or such Series with respect to the Trust or such Series and shall not be paid
to any Shareholder, of dividends declared thereafter upon the Outstanding
Shares of the Trust or such Series on the day such negative net income is
experienced, until such asset account is reduced to zero, or (iv) to combine
the methods described in clauses (i) and (ii) and (iii) of this sentence, in
order to cause the net asset value per Share of the Trust or such Series to
remain at a constant amount per Outstanding Share immediately after each such
determination and declaration. The Trustees shall also have the power to fail
to declare a dividend out of net income for the purpose of causing the net
asset value per share to be increased to a constant amount. The Trustees shall
not be required to adopt, but may at any time adopt, discontinue or amend the
practice of maintaining the net asset value per Share of the Trust or a Series
at a constant amount.

Section 7.4. Allocation Between Principal and Income. The Trustees shall
have full discretion to determine whether any cash or property received shall
be treated as income or as principal and whether any item of expense shall be
charged to the income or the principal account, and their determination made in
good faith shall be conclusive upon the Shareholders. In the case of stock
dividends received, the Trustees shall have full discretion to determine, in
the light of the particular circumstances, how much if any of the value thereof
shall be treated as income, the balance, if any, to be treated as principal.

Section 7.5. Power to Modify Foregoing Procedures. Notwithstanding any of
the foregoing provisions of this Article VII, the Trustees may prescribe, in
their absolute discretion, such other bases and times for determining the per
Share net asset value or net income, or the declaration and payment of
dividends and distributions as they may deem necessary or desirable.

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ARTICLE VIII

DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.

Section 8.1. Duration. The Trust shall continue without limitation of time
but subject to the provisions of this Article VIII.

Section 8.2. Termination of Trust. (a) The Trust or any Series of the Trust
may be terminated by an instrument in writing signed by a majority of the
Trustees, or by the affirmative vote of the holders of a majority of the
Shares of the Trust or Series outstanding and entitled to vote, at any meeting
of Shareholders. Upon the termination of the Trust or any Series,

(i) the Trust or any Series shall carry on no business except for the
purpose of winding up its affairs;

(ii) the Trustees shall proceed to wind up the affairs of the Trust or
Series and all of the powers of the Trustees under this Declaration shall
continue until the affairs of the Trust or Series shall have been wound up,
including the power to fulfill or discharge the contracts of the Trust or
Series, collect its assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining Trust Property or
property of the Series to one or more persons at public or private sale for
consideration which may consist in whole or in part of cash, securities or
other property of any kind, discharge or pay its liabilities, and do all
other acts appropriate to liquidate its business; and

(iii) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property or property of the Series, in cash
or in kind or partly each, among the Shareholders of the Trust or Series
according to their respective rights.

(b) After termination of the Trust or any Series and distribution to the
Shareholders as herein provided, a majority of the Trustees shall execute and
lodge among the records of the Trust an instrument in writing setting forth
the fact of such termination, and the Trustees shall thereupon be discharged
from all further liabilities and duties hereunder, and the rights and
interests of all Shareholders of the Trust or Series shall thereupon cease.

Section 8.3. Amendment Procedure. (a) This Declaration may be amended by a
vote of the holders of a majority of the Shares outstanding and entitled to
vote. Amendments shall be effective upon the taking of action as provided in
this section or at such later time as shall be specified in the applicable
vote or instrument. The Trustees may also amend this Declaration without the
vote or consent of Shareholders if they deem it necessary to conform this
Declaration to the requirements of applicable federal or state laws or
regulations or the requirements of the regulated investment company provisions
of the Internal Revenue Code (including those provisions of such Code relating
to the retention of the exemption from federal income tax with respect to
dividends paid by the Trust out of interest income received on Municipal
Bonds), but the Trustees shall not be liable for failing so to do. The
Trustees may also amend this Declaration without the vote or consent of
Shareholders if they deem it necessary or desirable to change the name of the
Trust or to make any other changes in the Declaration which do not materially
adversely affect the rights of Shareholders hereunder.

(b) No amendment may be made under this Section 8.3 which would change any
rights with respect to any Shares of the Trust or Series by reducing the
amount payable thereon upon liquidation of the Trust of Series or by
diminishing or eliminating any voting rights pertaining thereto, except with
the vote or consent of the holders of two-thirds of the Shares of the Trust or
Series outstanding and entitled to vote. Noting contained in this Declaration
shall permit the amendment of this Declaration to impair the exemption from
personal liability of the Shareholders, Trustees, officers, employees and
agents of the Trust or to permit assessments upon Shareholders.

18
<PAGE>

(c) A certificate signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Shareholders or by the
Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.

Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, this Declaration may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.

Section 8.4. Merger, Consolidation and Sale of Assets. The Trust or any
Series thereof may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of the Trust Property or the property of any Series,
including its good will, upon such terms and conditions and for such
consideration when and as authorized at any meeting of Shareholders of the
Trust or Series called for the purpose by the affirmative vote of the holders
of a majority of the Shares of the Trust or Series.

Section 8.5. Incorporation. With the approval of the holders of a majority
of the Shares of the Trust or any Series outstanding and entitled to vote, the
Trustees may cause to be organized or assist in organizing a corporation or
corporations under the laws of any jurisdiction or any other trust,
partnership, association or other organization to take over all of the Trust
Property or the property of any Series or to carry on any business in which the
Trust or the Series shall directly of indirectly have any interest, and to
sell, convey and transfer the Trust property or the property of any Series to
any such corporation, partnership, trust, association or organization in
exchange for the Shares or securities thereof or otherwise, and to lend money
to, subscribe for the Shares or securities of, and enter into any contracts
with any such corporation, partnership, trust, association or organization, or
any corporation, partnership, trust, association or organization in which the
Trust or the Series holds or is about to acquire Shares or any other interest.
The Trustees may also cause a merger or consolidation between the Trust or any
Series or any successor thereto and any such corporation, partnership, trust,
association or other organization if and to the extent permitted by law, as
provided under the law then in effect. Nothing contained herein shall be
construed as requiring approval of Shareholders for the Trustees to organize or
assist in organizing one or more corporations, partnerships, trusts,
associations or other organizations and selling, conveying or transferring a
portion of the Trust Property to such organization or entities.

ARTICLE IX

REPORTS TO SHAREHOLDERS

The Trustees shall at least semi-annually submit to the Shareholders a
written financial report, which may be included in the Trust's prospectus or
statement of additional information, of the transactions of the Trust,
including financial statements which shall at least annually be certified by
independent public accountants.

ARTICLE X

MISCELLANEOUS

Section 10.1. Filing. This Declaration and any amendment hereto shall be
filed in the office of the Secretary of the Commonwealth of Massachusetts and
in such other places as may be required under the laws of Massachusetts and may
also be filed or recorded in such other places as the Trustees deem
appropriate. Unless the amendment is embodied in an instrument signed by a
majority of the Trustees, each amendment filed shall be accompanied by a
certificate signed and acknowledged by a Trustee stating that such action was
duly taken in a manner provided herein. A restated Declaration, integrating
into a single instrument all of the

19
<PAGE>

provisions of the Declaration which are then in effect and operative, may be
executed from time to time by a majority of the Trustees and shall, upon filing
with the Secretary of the Commonwealth of Massachusetts, be conclusive evidence
of all amendments contained therein and may hereafter be referred to in lieu of
the original Declaration and the various amendments thereto. The restated
Declaration may include any amendment which the Trustees are empowered to
adopt, whether or not such amendment has been adopted prior to the execution of
the restated Declaration.

Section 10.2. Governing Law. This Declaration is executed by the Trustees
and delivered in the Commonwealth of Massachusetts and with reference to the
internal laws thereof, and the rights of all parties and the validity and
construction of every provision hereof shall be subject to and construed
according to the internal laws of said State without regard to the choice of
law rules thereof.

Section 10.3. Counterparts. This Declaration may be simultaneously executed
in several counterparts, each of which shall be deemed to be an original, and
such counterparts, together, shall constitute one and the same instrument,
which shall be sufficiently evidenced by any such original counterpart.

Section 10.4. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust appears to be a Trustee
hereunder, certifying to: (a) the number or identity of Trustees or
Shareholders, (b) the due authorization of the execution of any instrument or
writing, (c) the form of any vote passed at a meeting of Trustees or
Shareholders, (d) the fact that the number of Trustees or Shareholders present
at any meeting or executing any written instrument satisfies the requirements
of this Declaration, (e) the form of any By-laws adopted by or the identity of
any officers elected by the Trustees, or (f) the existence of any fact or facts
which in any manner relate to the affairs of the Trust, shall be conclusive
evidence as to the matters so certified in favor of any person dealing with the
Trustees and their successors.

Section 10.5. Provisions in Conflict with law or Regulations. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; provided, however, that such determination shall not affect any of
the remaining provisions of this Declaration or render invalid or improper any
action taken or omitted prior to such determination.

(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provisions in any other jurisdiction or any other provision of this
Declaration or jurisdiction.

Section 10.6. Principal Place of Business. The principal place of business
of the Trust is 300 First Stamford Place, Stamford, CT 06902. The principal
place of business may be changed by resolution of a majority of the Trustees.

Section 10.7. Resident Agent. The Trust shall maintain a resident agent in
the Commonwealth of Massachusetts, which agent shall initially be CT
Corporation System, 2 Oliver Street, Boston, MA 02109. The Trustees may
designate a successor resident agent, provided, however, that such appointment
shall not become effective until written notice thereof is delivered to the
office of the Secretary of the Commonwealth.

20
<PAGE>

IN WITNESS WHEREOF, the undersigned has executed this instrument this
day of April, 2000.

-------------------------------------

(as Trustee and not individually)
Ten Post Office Square, Suite 1230
Boston, MA 02109

-------------------------------------

(as Trustee and not individually)
Ten Post Office Square, Suite 1230
Boston, MA 02109

COMMONWEALTH OF MASSACHUSETTS

SS. [ , 2000]

There personally appeared the above named and who
acknowledge the foregoing instrument to be their free act and deed.

Before me,

-------------------------------------
Notary Public

MY commission expires:

21
<PAGE>

[NAME OF THE FUND]
MEETING: July 21, 2000 AT 9:00 AM
PROXY SOLICITED BY THE BOARD OF DIRECTORS (Trustees)

The undersigned holder of shares of the [Name of the Fund ] (the "Fund") hereby
appoints Enrique Faust and Richard J. Lavery, attorneys with full powers of
substitution and revocation, to represent the undersigned and to vote on behalf
of the undersigned all shares of the Fund that the undersigned is entitled to
vote at the Special Meeting of Shareholders of the Fund to be held at Park 80
West, Plaza Two, Saddle Brook, New Jersey at the date and time indicated above
and at any postponements or adjournments thereof. The undersigned hereby
acknowledges receipt of the enclosed Notice of Special Meeting and Proxy
Statement and hereby instructs said attorneys and proxies to vote said shares as
indicated herein. Every properly signed proxy will be voted in the manner
specified thereon and, in the absence of specification, will be treated as
GRANTING authority to vote FOR all of the above items. In their discretion, the
proxies are authorized to vote on such other business as may properly come
before the Special Meeting. A majority of the persons appointed as attorneys or
proxies who are present and acting at the Special Meeting in person or by
substitute (or, if only one shall be so present, then that one) shall have and
may exercise all of the power and authority of said attorneys or proxies
hereunder. The undersigned hereby revokes any proxy previously given.
<PAGE>

NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE
---- ---------------------------------------------------------------

Please vote by filling in the appropriate box below.

<TABLE>
<CAPTION>
Proposal: FOR ALL FOR ALL EXCEPT AS WITHHOLD ALL
--------- MARKED BELOW
<S> <C> <C> <C> <C>
1. To elect each of the following nominees (except as noted on the line below)
to the Board of Directors (Trustees) of the Fund, for a term of office to
commence upon the completion of the acquisition described in the [_] [_] [_]
accompanying proxy statement and to continue until the next meeting of
shareholder at which Directors (Trustees) are elected and their successors
have been duly elected and qualified.

(1) Mary A. Baldwin, Ph.D (2) Al Burton, (3) Paul S. Doherty, (4) Robert B.
Goode, (5) Alan L. Gosule, (6) Mark Lipson (7) Walter H. May, (8) Jock Patton,
(9) David W.C. Putnam, (10) John R. Smith, (11) Robert W. Stallings, (12) John
G. Turner and (13) David W. Wallace.

To withhold authority to vote for any
individual nominee, print that nominee's
name on the line below

----------------------------------------

FOR AGAINST ABSTAIN

2. To approve a new Investment Management Agreement between each Fund and
Pilgrim Investments, Inc. to take effect upon the completion of the [_] [_] [_]
proposed acquisition of Lexington Global Asset Managers, Inc. by ReliaStar
Financial Corp.

3. To approve a new Investment Management Agreement between each Fund and
Pilgrim Investments, Inc. to take effect upon the completion of the [_] [_] [_]
proposed acquisition of ReliaStar Financial Corp. by ING Group.

4. Lexington Small Cap Asia Growth Fund, Inc. only:

a. To approve a new Sub-Adviser Agreement between Pilgrim Investments, Inc.
and Crosby Asset Management (US) Inc. for Lexington Small Cap Asia Growth [_] [_] [_]
Fund, Inc. to take effect upon the completion of the proposed acquisition
of Lexington Global Asset Managers, Inc. by ReliaStar Financial Corp.

b. To approve a new Sub-Adviser Agreement between Pilgrim Investments, Inc.
and Crosby Asset Management (US) Inc. for the Lexington Small Cap Asia [_] [_] [_]
Growth Fund, Inc. to take effect upon the completion of the proposed
acquisition of ReliaStar Financial Corp. by ING Groep N.V.
</TABLE>
<PAGE>

<S> <C> <C> <C> <C>
5. Lexington Small Cap Asia Growth Fund, Inc. only:

a. To approve a new Sub-Adviser Agreement between Pilgrim Investments, Inc.
and Insinger Asset Management N.V. for the Lexington Small Cap Asia Growth
Fund, Inc. to take effect upon the acquisition of certain regulatory [_] [_] [_]
approvals and the completion of the proposed acquisition of Lexington
Global Asset Managers, Inc. by ReliaStar Financial Corp.

b. To approve a new Sub-Adviser Agreement between Pilgrim Investments, Inc.
and Insinger Asset Management N.V. for the Lexington Small Cap Asia Growth
Fund, Inc. to take effect upon the acquisition of certain regulatory [_] [_] [_]
approvals and the completion of the proposed acquisition of ReliaStar
Financial Corp. by ING Groep N.V.;

6. Lexington Troika Dialog Russia Fund, Inc. only:

a. To approve a new Sub-Adviser Agreement between Pilgrim and Troika Dialog
Asset Management (Cayman Islands), Ltd. for the Lexington Troika Dialog
Russia Fund, Inc. to take effect upon the completion of the proposed [_] [_] [_]
acquisition of Lexington Global Asset Managers, Inc. by ReliaStar
Financial Corp.

b. To approve a new Sub-Adviser Agreement between Pilgrim and Troika Dialog
Asset Management (Cayman Islands), Ltd. for the Lexington Troika Dialog
Russia Fund, Inc. to take effect upon the completion of the proposed [_] [_] [_]
acquisition of ReliaStar by ING Groep N.V.

7. To ratify the selection of KPMG LLP as each Fund's independent public
accountants for the fiscal year ending December 31, 2000; [_] [_] [_]

8. To approve a new Service and Distribution Plan for each Fund, other than
the Lexington Money Market Trust, which would impose on each Fund a fee on [_] [_] [_]
an annualized basis of 0.25% of the average daily net assets;

9. To approve Amended and Restated Articles of Incorporation for Lexington
Global Corporate Leaders Fund, Inc., Lexington Global Technology Fund,
Inc., Lexington GNMA Income Fund, Inc., Lexington Goldfund, Inc., Lexington
Growth and Income Fund, Inc., Lexington International Fund, Inc., Lexington
Silver Fund, Inc., Lexington Small Cap Asia Growth Fund, Inc., Lexington
Troika Dialog Russia Fund, Inc., and Lexington Worldwide Emerging Markets [_] [_] [_]
Fund, Inc., each a Maryland corporation

10. To approve an Amended and Restated Declaration of Trust for Lexington
Global Income Fund and Lexington Money Market Trust, each a Massachusetts [_] [_] [_]
business trust;

11. Any other business properly brought before the meeting [_] [_] [_]

(NAME OF THE FUND)
PLEASE SIGN IN THE BOX BELOW
</TABLE>

<PAGE>

Please sign exactly as your name appears on this Proxy.
If Joint owners, EITHER may sign the Proxy. When signing
as attorney, executor, administrator, trustee, guardian
or corporate officer, please give your full title.

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Signature(s) Title(s), if applicable Date
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