As filed with the Securities and Exchange Commission on April 10, 1997
Registration No. 33-26116
811-5710
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 9 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 10 X
(Check appropriate box or boxes.)
LEXINGTON NATURAL RESOURCES TRUST
-----------------------------------------------
(Exact name of Registrant as specified in Charter)
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
------------------------------------------------
(Address of principal executive offices)
Registrant's Telephone Number: (201) 845-7300
Lisa Curcio, Secretary
Lexington Natural Resources Trust
Park 80 West Plaza Two, Saddle Brook, New Jersey 07663
------------------------------------------------
(Name and address of agent for service)
With a copy to:
Carl Frischling, Esq.
Kramer, Levin, Naftalis & Frankel
919 Third Avenue, New York, New York 10022
------------------------------------------------
It is proposed that this filing will become effective April 30, 1997
pursuant to Paragraph (b) of Rule 485.
------------------------------------------------
The Registrant has registered an indefinite number of shares under the
Securities Act of 1933, pursuant to Section 24(f) of the Investment Company
Act of 1940. A Rule 24f-2 Notice for the Registrant's fiscal year ended
December 31, 1996 was filed on February 26, 1997.
<PAGE>
LEXINGTON NATURAL RESOURCES TRUST
REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET
PART A
Items in Part A Prospectus
of Form N-1A Prospectus Caption Page Number
- --------------- ------------------ -----------
1. Cover Page Cover Page
2. Synopsis *
3. Condensed Financial Information 2
4. General Description of Registrant 3
5. Management of the Fund 5
6. Capital Stock and Other Securities 8
7. Purchase of Securities Being Offered 6
8. Redemption or Repurchase 6
9. Legal Proceedings *
Note * Omitted since answer is negative or inapplicable
<PAGE>
LEXINGTON NATURAL RESOURCES TRUST
STATEMENT OF ADDITIONAL STATEMENT OF ADDITIONAL
PART B INFORMATION CAPTION INFORMATION PAGE NUMBER
- ------ ----------------------- -----------------------
10. Cover Page Cover Page
11. Table of Contents Cover Page
12. General Information and History 8 (Part A)
13. Investment Objectives and Policies 2
14. Management of the Registrant 7
15. Control Persons and Principal Holders 3
of Securities
16. Investment Advisory and Other Services 3
17. Brokerage Allocation and Other Practices 4
18. Capital Stock and Other Securities 8 (Part A)
19. Purchase, Redemption and Pricing of 6 (Part A)
securities being offered
20. Tax Status 6
21. Underwriters 5 (Part A)
22. Calculation of Yield Quotations on Money *
Market Funds
23. Financial Statements 10
PART C
- ------
Information required to be included in Part C is set forth
under the appropriate Item, so numbered, in Part C to this
Registration Statement.
* Not Applicable
<PAGE>
PROSPECTUS
April 30, 1997
LEXINGTON NATURAL RESOURCES TRUST
P.O. Box 1515 / Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
201-845-7300
================================================================================
Lexington Natural Resources Trust (the "Fund"), is a no load open-end
non-diversified management investment company. The Fund's investment objective
is to seek long-term growth of capital through investment primarily in common
stocks of companies which own, or develop natural resources and other basic
commodities, or supply goods and services to such companies. Current income will
not be a factor. Total return will consist primarily of capital appreciation.
For a description of the types of securities in which the Fund will invest, see
"Investment Objectives and Policies" on page 3.
Shares of the Fund may be purchased only by insurance companies for the
purpose of funding variable annuity contracts and variable life insurance
policies.
This Prospectus concisely sets forth information about the Fund that you
should know before investing. It should be read and retained for future
reference.
A Statement of Additional Information ("SAI") dated April 30, 1997, has
been filed with the Securities and Exchange Commission and is incorporated
herein by reference. The SAI further discusses certain areas in this Prospectus
and other matters which may be of interest to some investors. For a free copy,
call the telephone number above or write to the address listed above.
Lexington Management Corporation (the "Investment Adviser") is the
Investment Adviser of the Fund. Lexington Funds Distributor, Inc. (the
"Distributor") is the Distributor of shares of the Fund. Market Systems Research
Advisors, Inc. (the "Sub-Adviser") is the Sub-Adviser to the Fund.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
1
<PAGE>
FINANCIAL HIGHLIGHTS
The following Per Share and Capital Changes Information for each of the
years in the five year period ended December 31, 1996 has been audited by KPMG
Peat Marwick LLP, Independent Auditors, whose report thereon appears in the
Statement of Additional Information. This information should be read in
conjunction with the financial statements and related notes thereto included in
the Statement of Additional Information. The Fund's annual report, which
contains additional performance information, is available upon request and
without charge.
Selected per share data for a share outstanding throughout the period:
<TABLE>
<CAPTION>
PERIOD FROM
AUGUST 1, 1989
(COMMENCEMENT
OF OPERATIONS)
TO DECEMBER 31,
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period ............................. $11.30 $ 9.71 $10.30 $ 9.30 $9.01 $9.50 $11.49 $10.00
----- ------ ------ ------ ----- ----- ------ ------
Income (loss) from investment
operations:
Net investment income (loss) ....... 0.05 0.06 0.04 -- -- 0.02 (0.01) 0.01
Net realized and unrealized gain
(loss) on investments .............. 2.99 1.58 (0.59) 1.01 0.29 (0.49) (1.70) 1.48
----- ------ ------ ------ ----- ----- ------ ------
Total income (loss) from
investment operations .............. 3.04 1.64 (0.55) 1.01 0.29 (0.47) (1.71) 1.49
----- ------ ------ ------ ----- ----- ------ ------
Less distributions:
Dividends from net
investment income ................ (0.05) (0.05) (0.04) (0.01) -- (0.02) -- --
Dividends from capital gains ......... -- -- -- -- -- -- (0.28) --
----- ------ ------ ------ ----- ----- ------ ------
Net asset value, end of period ....... $11.30 $ 9.71 $10.30 $9.30 $9.01 $ 9.50 $11.49
====== ====== ====== ===== ===== ====== ======
Total return ......................... 16.87% (5.38%) 10.90% 3.22% (4.95%) (14.85%) 40.98%*
Ratio to average net assets:
Expenses, before
reimbursement ...................... 1.42% 1.47% 1.55% 2.26% 2.31% 2.97% 4.55% 19.76%*
Expenses, net of reimbursement ....... 1.42% 1.47% 1.55% 2.26% 2.31% 1.60% 1.54% 0.39%*
Net investment income (loss),
before reimbursement ............... 0.40% 0.56% 0.49% 0.08% 0.02% (1.10%) (3.06%) (19.16%)*
Net investment income (loss) ......... 0.40% 0.56% 0.49% 0.08% 0.02% 0.27% (0.05%) 0.22%*
Portfolio turnover ................... 102.76 149.18% 87.40% 114.44% 65.50% 100.94% 50.43% 0.00%*
Average commissions paid on
equity security transactions* ...... $0.07
Net assets, end of period (000's
omitted) ...........................$37,934 $16,955 $13,627 $5,325 $1,926 $1,393 $916 $280
</TABLE>
- --------------------------------------------------------------------------------
*Annualized
*In accordance with recent SECdisclosure guidelines, the average commissions are
calculated for the current period but not for prior periods.
2
<PAGE>
DESCRIPTION OF THE FUND
Lexington Natural Resources Trust is a no-load open-end non-diversified
management investment company organized as a business trust under the laws of
Massachusetts. The Fund is intended to be the funding vehicle for variable
annuity contracts and variable life insurance policies to be offered by the
separate accounts of certain life insurance companies ("participating insurance
companies"). The Fund currently does not foresee any disadvantages to the
holders of variable annuity contracts and variable life insurance policies
arising from the fact that the interests of the holders of such contracts and
policies may differ. Nevertheless, the Fund's Trustees intend to monitor events
in order to identify any material irreconcilable conflicts which may possibly
arise and to determine what action, if any, should be taken in response thereto.
If a conflict were to occur, an insurance company separate account might be
required to withdraw its investments in the Fund and the Fund might be forced to
sell securities at disadvantageous prices. The variable annuity contracts and
variable life insurance policies are described in the separate prospectuses
issued by the Participating Insurance Companies. The Fund assumes no
responsibility for such prospectuses.
Individual variable annuity contract holders and variable life insurance
policy holders are not "shareholders" of the Fund. The Participating Insurance
Companies and their separate accounts are the shareholders or investors,
although such companies may pass through voting rights to their variable annuity
contract or variable life insurance policy. Shares of the Fund are not offered
directly to the general public.
INVESTMENT OBJECTIVES AND POLICIES
The Fund's investment objective is to seek long-term growth of capital
through investment primarily in common stocks of companies that own or develop
natural resources and other basic commodities, or supply goods and services to
such companies. Current income will not be a factor. Total return will consist
primarily of capital appreciation.
Management attempts to achieve the investment objective of the Fund by
seeking to identify securities of companies that, in its opinion, are
undervalued relative to the value of natural resource holdings of such companies
in light of current and anticipated economic or financial conditions. Natural
resource assets are materials derived from natural sources which have economic
value. The Fund will consider a company to have substantial natural resource
assets when, in management's opinion, the company's holdings of the assets are
of such magnitude, when compared to the capitalization, revenues or operating
profits of the company, that changes in the economic value of the assets will
affect the market price of the equity securities of such company. Generally, a
company has substantial natural resource assets when at least 50% of the
non-current assets, capitalization, gross revenues or operating profits of the
company in the most recent or current fiscal year are involved in or result
from, directly or indirectly through subsidiaries, exploring, mining, refining,
processing, fabricating, dealing in or owning natural resource assets. Examples
of natural resource assets include: companies that specialize in energy sources
(e.g., coal, geothermal power, natural gas and oil), environmental technology
(e.g., pollution control and waste recycling), forest products, agricultural
products, chemical products, ferrous and non-ferrous metals (e.g., iron,
aluminum and copper), strategic metals (e.g., uranium and titanium), precious
metals (e.g., gold, silver and platinum), and other basic commodities. The Fund
presently does not intend to invest directly in natural resource assets or
related contracts. The Fund may invest up to 25% of its total assets in
securities principally traded in markets outside the United States.
Management of the Fund believes that, based upon past performance, the
securities of specific companies that hold different types of substantial
natural resource assets may move relatively independently of one another during
different stages of inflationary cycles due to different degrees of demand for,
or market values of, their respective natural resource holdings during
particular portions of such inflationary cycles. The Fund's fully-managed
investment approach enables it to switch its emphasis among various industry
groups depending upon management's outlook with respect to prevailing trends and
developments. The investment objective and policies of the Fund described in the
first two paragraphs of this section are fundamental policies of the Fund and
may not be changed without the approval of the holders of a majority of the
Fund's outstanding voting securities, as defined in the Investment Company Act
of 1940, as amended.
Except for defensive or liquidity purposes, at least 65% of the total
assets of the Fund will be invested in companies with substantial natural
resource assets. The remaining assets to the extent not invested in the common
stocks of natural resource companies may be invested in companies other than the
natural resource companies and in debt securities of natural resource companies
as well as other companies. At any time management deems it advisable for
temporary defensive or liquidity purposes, the Fund may hold all its assets in
cash or cash equivalents and invest in, or hold unlimited amounts of, debt
obligations of the United States government or its political subdivisions, and
money market instruments including repurchase agreements with maturities of
seven days or less and Certificates of Deposit.
The Fund's investment portfolio may include repurchase agreements with
banks and dealers in U.S. Government securities. A repurchase agreement involves
the purchase by the Fund of an investment contract from a bank or a dealer in
U.S. Government securities which contract is secured by debt securities whose
value is equal to or greater than the value of the repurchase agreement
including the agreed upon interest. The agreement provides that the institution
will
3
<PAGE>
repurchase the underlying securities at an agreed upon time and price. The total
amount received on repurchase would exceed the price paid by the Fund,
reflecting an agreed upon rate of interest for the period from the date of the
repurchase agreement to the settlement date, and would not be related to the
interest rate on the underlying securities. The difference between the total
amount to be received upon the repurchase of the securities and the price paid
by the Fund upon their acquisition is accrued daily as interest. If the
institution defaults on the repurchase agreement, the Fund will retain
possession of the underlying securities. In addition, if bankruptcy proceedings
are commenced with respect to the seller, realization on the collateral by the
Fund may be delayed or limited and the Fund may incur additional costs. In such
case the Fund will be subject to risks associated with changes in the market
value of collateral securities. The Fund intends to limit repurchase agreements
to transactions with institutions believed by the Investment Adviser and
Sub-Adviser to present minimal credit risk.
Although the Fund's Board of Trustees present policy prohibits
investments in speculative securities trading at extremely low prices and in
relatively illiquid markets, investments in such securities can be made when and
if the Board determines such investments to be in the best interests of the Fund
and its shareholders. The policies set forth in this paragraph are subject to
change by the Board of Trustees of the Fund, in its sole discretion (see
"Special Considerations and Risks" and "Dividend, Distribution and Reinvestment
Policy").
The Fund anticipates that its annual portfolio turnover rate will
generally not exceed 150%. A 100% turnover rate would occur if all of the Fund's
portfolio investments were sold and either repurchased or replaced within one
year. High turnover may result in increased transaction costs to the Fund;
however, the rate of turnover will not be a limiting factor when the Fund deems
it desirable to purchase or sell portfolio investments. For the fiscal year
ended December 31, 1996, the portfolio turnover rate was 102.76%.
Generally, the primary consideration in placing portfolio securities
transactions with broker-dealers for execution is to obtain, and maintain the
availability of, execution at the best net price available and in the most
effective manner possible. The Fund's brokerage allocation policy may permit the
Fund to pay a broker-dealer which furnishes research services a higher
commission than that which might be charged by another broker-dealer which does
not furnish research services, provided that such commission is deemed
reasonable in relation to the value of the services provided by such
broker-dealer. For a complete discussion of portfolio transactions and brokerage
allocation, see "Portfolio Transactions and Brokerage Commissions" in the
Statement of Additional Information.
SPECIAL CONSIDERATION AND RISKS
Because the Fund will invest a substantial portion of its portfolio in
the securities of companies with natural resources assets, the Fund should be
considered as a vehicle for diversification and not as a balanced investment
program. In addition, investments in foreign securities may involve risks and
considerations not present in domestic investments.
INVESTMENTS IN FOREIGN SECURITIES
A portion of the Fund's security investments will be in the securities of
foreign issuers. Investments in foreign securities may involve risks greater
than those attendant to investments in securities of U.S. issuers. Publicly
available information concerning issuers located outside the U.S. may not be
comparable in scope or depth of analysis to that generally available for
publicly held U.S. corporations. Accounting and auditing practices and financial
reporting requirements vary significantly from country to country and generally
are not comparable to those applicable to publicly held U.S. corporations.
Government supervision and regulation of foreign securities exchanges and
markets, securities listed on such exchanges or traded in such markets and
brokers, dealers, banks and other financial institutions who trade the
securities in which the Fund may invest is generally less extensive than in the
U.S., and trading customs and practices may differ substantially from those
prevailing in the U.S. The Fund may trade in certain foreign securities markets
which are less developed than comparable U.S. markets, which may result in
reduced liquidity of securities traded in such markets. Investments in foreign
securities are also subject to currency fluctuations. For example, when the
Fund's assets are invested primarily in securities denominated in foreign
currencies, an investor can expect that the Fund's net asset value per share
will tend to increase when the value of U.S. dollars is decreasing as against
such currencies. Conversely, a tendency toward decline in net asset value can be
expected when the value of U.S. dollars is increasing as against such
currencies. Changes in net asset value per share as a result of foreign exchange
rate fluctuations will be determined by the composition of the Fund's portfolio
at any given time. Further, it is not possible to avoid altogether the risks of
expropriation, burdensome or confiscatory taxation, moratoriums, exchange and
investment controls or political or diplomatic events which might adversely
affect the Fund's investments in foreign securities or restrict the Fund's
ability to dispose of such investments.
4
<PAGE>
INVESTMENT RESTRICTIONS
The Fund has adopted a number of investment restrictions which may not be
changed without shareholder approval. These are set forth under "Investment
Restrictions" in the Statement of Additional Information. Some of these
restrictions provide that the Fund shall not:
o Invest more than 5% of its total assets in the securities of any one
issuer with respect to 50% of its total assets (except securities issued
or guaranteed by the U.S. Government, or its agencies and instrument-
alities);
o Purchase any securities if such purchase would cause the Fund to own at
the time of purchase more than 10% of the outstanding voting securities
of one issuer;
o Borrow money; except that the Fund may borrow from a bank as a temporary
measure for extraordinary purposes or to meet redemptions in amounts
not exceeding 10% (taken at market value)of its total assets and pledge
its assets to secure such borrowings. The Fund may not purchase
additional securities when money borrowed exceeds 5% of the Fund's total
assets;
o Purchase any security restricted as to disposition under Federal
securities laws or securities that are not readily marketable or
purchase any securities if such a purchase would cause the Fund to own
at the time of such purchase, illiquid-securities, including repurchase
agreements with an agreed upon repurchase date in excess of seven days
from the date of acquisition by the Fund, having aggregate market value
in excess of 10% of the value of the Fund's total assets.
MANAGEMENT OF THE FUND
The business affairs of the Fund are managed under the direction of its
Board of Trustees. There are currently ten Trustees (of whom seven are
non-affiliated persons) who meet five times each year. The Statement of
Additional Information contains additional information regarding the Trustees
and officers of the Fund.
INVESTMENT ADVISER, SUB-ADVISER, DISTRIBUTOR AND ADMINISTRATOR
Lexington Management Corporation, P.O. Box 1515/Park 80 West Plaza Two,
Saddle Brook, New Jersey 07663, is the investment adviser to the Fund, and, as
such, advises and makes recommendations to the Fund with respect to its
investments and investment policies. Lexington Funds Distributor, Inc. is a
registered broker-dealer and is the distributor of shares of the Fund.
The Investment Adviser has entered into a sub-advisory management
contract with Market Systems Research Advisors, Inc., 80 Maiden Lane, New York,
New York 10038, a registered investment adviser, under which the Sub-Adviser
will provide the Fund with certain investment management and administrative
services. The Sub-Adviser serves as investment adviser to private and
institutional accounts.
The Investment Adviser is paid an investment advisory fee at the annual
rate of 1.00% of the net assets of the Fund which is higher than that paid by
most other investment companies. This fee is computed on the basis of the Fund's
average daily net assets and is payable on the last business day of each month.
For the year ended December 31, 1996, the Investment Adviser received $260,014
in investment advisory fees from the Fund and paid the Sub-Adviser $130,009.
From time to time, the Investment Adviser may pay amounts from its past
profits to participating insurance companies or insurance companies or other
financial institutions that provide administrative services for the Fund or that
provide to contract holders other services relating to the Fund. These services
may include, among other things, sub-accounting services, answering inquiries of
contract holders regarding the Fund, transmitting, on behalf of the Fund, proxy
statements, annual reports, updated prospectus and other communications to
contract holders regarding the Fund, and such other related services as the Fund
or a contract holder may request. The Investment Adviser will not pay more than
0.25% of the average daily net assets of the Fund represented by shares of the
Fund held in the separate account of any participating insurance company.
Payment of such amounts by the Investment Adviser will not increase the fees
paid by the Fund or its shareholders.
The Investment Adviser serves as investment adviser to other investment
companies and private institutional investment accounts. Included among these
clients are persons and organizations which own significant amounts of capital
stock of the Investment Adviser's parent. The clients pay fees which the
Investment Adviser considers comparable to the fee levels for similarly served
clients.
The Investment Adviser also acts as administrator to the Fund and
performs certain administrative and internal accounting services, including but
not limited to, maintaining general ledger accounts, regulatory compliance,
preparation of financial information for semiannual and annual reports,
preparing registration statements, calculating net asset values, shareholder
communications and supervision of the custodian, transfer agent and provides
facilities for such services. The Fund shall reimburse the Aministrator for its
actual cost in providing such services, facilities and expenses.
5
<PAGE>
The Investment Adviser and the Distributor are wholly-owned subsidiaries
of Lexington Global Asset Managers, Inc., a Delaware corporation with offices at
Park 80 West Plaza Two, Saddle Brook, New Jersey 07663. Lexington Global Asset
Managers, Inc., holds a controlling interest in the Sub-Adviser. Descendants of
Lunsford Richardson, Sr., their spouses, trusts and other related entities have
a majority voting control of outstanding shares of Lexington Global Asset
Managers, Inc., common stock. See "Investment Adviser and Distributor" in the
Statement of Additional Information.
PORTFOLIO MANAGERS
The Fund is managed by an investment management team. Frank A. Peluso,
Robert M. DeMichele and Robert W. Radsch are the lead managers.
FRANK A. PELUSO is a Portfolio Manager of the Fund. He has 34 years
investment experience. Mr. Peluso is President and Chief Executive Officer of
Market Systems Research Advisors, Inc. (MSR), the sub-adviser to the Fund. Mr.
Peluso utilizes a proprietary analytical system to identify securities with
performance potential which he believes to be exceptional. In addition, Mr.
Peluso's proprietary data is used by professional money managers, insurance
companies, brokerage firms, banks, mutual fund companies and pension funds.
Mr. Peluso is a graduate of Princeton University and has completed a year
of post-graduate study at Columbia University.
ROBERT M. DEMICHELE is Chairman and Chief Executive Officer of Lexington
Management Corporation. He is also the Chairman of the Investment Strategy
Group. In addition, he is President of Lexington Global Asset Managers, Inc.,
LMC's parent company. He holds similar offices in other companies owned by
Lexington Global Asset Managers, Inc., as well as, the Lexington Funds.
Prior to joining LMC in 1981, Mr. DeMichele was a Vice President at A.G.
Becker, Inc. the securities division of Warburg, Paribus, Becker, an
international investment banking firm. From 1973 to 1981, Mr. DeMichele held
several positions, the most recent managing A.G. Becker's Funds Evaluation and
Consulting Group for both the East and West coasts.
Mr. DeMichele is a graduate of Union College with a B.A. Degree in
Economics and an M.B.A. in Finance from Cornell University.
ROBERT W. RADSCH, CFA, is a Portfolio Manager of the Fund and is a Vice
President of Lexington Management Corporation. Prior to joining Lexington in
July, 1994, he was Senior Vice President, Portfolio Manager and Chief Economist
for the Bull & Bear Group. He has extensive experience managing gold, silver and
platinum on an international basis, having managed precious metals and
international funds for more than 14 years.
Mr. Radsch is a graduate of Yale University with a B.A. Degree and holds an
M.B.A. in Finance from Columbia University.
HOW TO PURCHASE AND REDEEM SHARES
With the exception of shares held in connection with initial capital of
the Fund, shares of the Fund are currently available for purchase solely by
participating insurance companies for the purpose of funding variable annuity
contracts and variable life insurance policies. Shares of the Fund are purchased
and redeemed at net asset value next calculated after a purchase or redemption
order is received by the Fund in good order. There are no minimum investment
requirements. Payment for shares redeemed will be made as soon as possible, but
in any event within three business days after the order for redemption is
received by the Fund. However, payment may be postponed under unusual
circumstances, such as when normal trading is not taking place on the New York
Stock Exchange.
DETERMINATION OF NET ASSET VALUE
The net asset value of the shares of the Fund is determined as of the
close of trading on each day the New York Stock Exchange is open, by dividing
the value of the Fund's securities plus any cash and other assets (including
accrued dividends and interest) less all liabilities (including accrued
expenses) by the number of shares outstanding, the result being adjusted to the
nearest whole cent. A security listed or traded on a recognized stock exchange
is valued at its last sale price prior to the time when assets are valued on the
principal exchange on which the security is traded. If no sale is reported at
that time, the mean between the current bid and asked price will be used.
However, when LMCdeems it appropriate, prices obtained for the day of valuation
from a third party pricing service will be used. For over-the-counter securities
the mean between the bid and asked prices is used. All other securities for
which the over-the-counter market quotations are readily available are valued at
the mean between the last current bid and asked price. Short-term securities
having maturity of 60 days or less are valued at cost when it is determined by
the Fund's Board of Trustees that amortized cost reflects the fair value of such
6
<PAGE>
securities. Securities for which market quotations are not readily available and
other assets shall be valued by Fund Management in good faith under the
direction of the Fund's Board of Trustees.
Generally, trading in foreign securities markets is substantially
completed each day at various times prior to the close of the New York Stock
Exchange. The values of foreign securities used in computing the net asset value
of the shares of the Fund are determined as of the earlier of such market close
or the closing time of the New York Stock Exchange (the "Exchange"). Foreign
currency exchange rates are also generally determined prior to the close of the
Exchange. Occasionally, events affecting the value of such securities and such
exchange rates may occur between the times at which they are determined and the
close of the Exchange, which will not be reflected in the computation of net
asset value. If during such periods, events occur which materially affect the
value of such securities, the securities will be valued at their fair market
value as determined by the investment adviser and approved in good faith by the
Trustees.
In order to determine net asset value per share, the aggregate value of
portfolio securities is added to the value of the Fund's other assets, such as
cash and receivables; the total of the assets thus obtained, less liabilities,
is then divided by the number of shares outstanding.
PERFORMANCE CALCULATION
Advertisements and communications with shareholders and others may cite
the Fund's performance calculated on a total return basis. All such
advertisements and communications will portray the value of an assumed initial
investment of $1,000 at the end of one, five and ten year periods. These values
will be calculated by multiplying the compounded average annual total return for
each time period by the amount of the assumed initial investment and will
reflect all recurring charges against Fund income.
Advertisements and communications may compare the Fund's performance to
major market indices. Quotations of historical total returns are not indicative
of future dividend income or total return, but are an indication of the return
to shareholders only for the limited historical period used. The Fund's total
return will depend on the particular investments in its portfolio, its total
operating expenses and other conditions. For further information, including the
formula and an example of the total return calculation, see the Statement of
Additional Information.
DIVIDEND, DISTRIBUTION AND REINVESTMENT POLICY
The Fund intends to declare or distribute a dividend from its net
investment income and/or net capital gain income to shareholders annually or
more frequently if necessary in order to comply with distribution requirements
of the Code to avoid the imposition of regular Federal income tax, and if
applicable, a 4% excise tax.
Any dividends and distribution payments will be reinvested at net asset
value, without sales charge, in additional full and fractional shares of the
Fund. Dividend and capital gain distributions are generally not currently
taxable to owners of variable contracts.
TAX MATTERS
THE FUND. The Fund intends to qualify as a regulated investment company
by satisfying the requirements under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), concerning the diversification of assets,
distribution of income, and sources of income. When the Fund qualifies as a
regulated investment company and all of its taxable income is distributed in
accordance with the timing requirements imposed by the Code, the Fund will not
be subject to federal income tax. If, however, for any taxable year the Fund
does not qualify as a regulated investment company, then all of its income will
be subject to tax at regular corporate rates (without any deduction for
distributions to the separate accounts of the Participating Insurance Companies
(the "Accounts")), and the receipt of such distributions will be taxable to the
extent that the Fund has current and accumulated earnings and profits.
FUND DISTRIBUTIONS. Distributions by the Fund are taxable, if at all, to
the Accounts, and not to variable annuity contract holders or variable life
insurance policy holders. An Account will include distributions in its taxable
income in the year in which they are received (whether paid in cash or
reinvested).
SHARE REDEMPTIONS. Redemptions of the shares held by the Accounts
generally will not result in gain or loss for the Accounts and will not result
in gain or loss for the variable annuity contract holders or variable life
insurance policy holders.
SUMMARY. The foregoing discussion of federal income tax consequences is
based on tax laws and regulations in effect on the date of this Prospectus, and
is subject to change by legislative or administrative action. The foregoing
discussion also assumes that the Accounts are the owners of the shares and that
the policies or contracts qualify as life insurance policies or annuities,
respectively, under the Code. If the foregoing requirements are not met then the
variable annuity contract holders or variable life insurance policy holders will
be treated as recognizing income (from distributions or otherwise) related to
the ownership of Fund shares. The foregoing discussion is for general
7
<PAGE>
information only; a more detailed discussion of federal income tax
considerations is contained in the Statement of Additional Information. Variable
annuity contract holders or variable life insurance policy holders must consult
the prospectuses of their respective contracts or policies for information
concerning the federal income tax consequences of owning such contracts or
policies.
GENERAL INFORMATION
The Fund was organized as a Massachusetts business trust on October 7,
1988 under the name Lexington Gold Trust. At a meeting held on September 30,
1991, the shareholders of the Fund approved a change in the Fund's fundamental
investment objective and policies. In connection with the change of investment
objective and policies, the Fund also changed its name to "Lexington Natural
Resources Trust." The capitalization of the Fund consists solely of an unlimited
number of shares of beneficial interest, no par value. When issued, shares of
the Fund are fully paid, non-assessable and freely transferable.
Unlike the stockholder of a corporation, shareholders could under certain
circumstances be held personally liable for the obligations of the Fund.
However, the Declaration of Trust disclaims liability of the shareholders,
Trustees, or officers of the Fund for acts or obligations of the Fund, which are
binding only on the assets and property of the Fund. The Declaration of Trust
provides for indemnification out of Fund property for all loss and expense of
any shareholder held personally liable for the obligations of the Fund. The risk
of a shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be unable to meet its
obligations and thus should be considered remote.
VOTING RIGHTS
Shareholders of the Fund are given certain voting rights. Each share of
the Fund will be given one vote, unless a different allocation of voting rights
is required under applicable law for a mutual fund that is an investment medium
for variable life insurance or annuity contracts. Participating insurance
companies provide variable annuity Contract Holders and Participants the right
to direct the voting of Fund shares at shareholder meetings to the extent
required by law. See the Separate Account Prospectus for the Variable Contract
for more information regarding the pass-through of these voting rights.
Massachusetts business trust law does not require the Fund to hold annual
shareholder meetings, although special meetings may be called for the Fund, for
purposes such as electing or removing Trustees, changing fundamental policies or
approving an investment management contract. A shareholders' meeting will be
held after the Fund begins operations for the purpose of electing the initial
Board of Trustees. In addition, the Fund will be required to hold a meeting to
elect Trustees to fill any existing vacancies on the Board if, at any time,
fewer than a majority of the Trustees have been elected by the shareholders of
the Fund. In addition, the holders of not less than two-thirds of the
outstanding shares or other voting interests of the Fund may remove a person
serving as Trustee either by declaration in writing or at a meeting called for
such purpose. The Trustees are required to call a meeting for the purpose of
considering the removal of a person serving as trustee, if requested in writing
to do so by the holders of not less than 10% of the outstanding shares of other
voting interests of the Fund. The Fund is required to assist in shareholders'
communications. In accordance with current laws, an insurance company issuing a
variable life insurance or annuity contract that participates in the Fund will
request voting instructions from Contract Holders and will vote shares or other
voting interests in the Separate Account in proportion to the voting
instructions received.
COUNSEL AND INDEPENDENT AUDITORS
Kramer, Levin, Naftalis, & Frankel will pass upon legal matters for the
Fund in connection with the shares offered by this Prospectus.
KPMG Peat Marwick LLP, New York, New York has been selected as independent
auditors for the Fund for the fiscal year ending December 31, 1997.
CUSTODIANS, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Chase Manhattan Bank, N.A., 1211 Avenue of the Americas, New York, New
York, 10036 has been retained to act as the Custodian for the Fund's investments
and assets. In addition, Chase Manhattan Bank, N.A. may appoint foreign banks
and securities depositories to act as sub-custodians for the Fund's portfolio
securities subject to their qualification as eligible foreign custodians under
the rules adopted by the SEC. State Street Bank & Trust Company, 225 Franklin
Street, Boston, Massachusetts 02110 has been retained to act as the Transfer
Agent and Dividend Disbursing Agent for the Fund. Neither Chase Manhattan Bank,
N.A. nor State Street Bank and Trust Company have any part in determining the
investment policies of the Fund or in determining which portfolio securities are
to be purchased or sold by the Fund or in the declaration of dividends and
distributions.
8
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Investment Adviser
- --------------------------------------------------------------------------------
LEXINGTON MANAGEMENT CORPORATION
P.O. Box 1515/Park 80 West Plaza Two
Saddle Brook, N.J. 07663
Sub-Adviser
- --------------------------------------------------------------------------------
MARKET SYSTEMS RESEARCH ADVISORS, INC.
80 Maiden Lane
New York, N.Y. 10038
Distributor
- --------------------------------------------------------------------------------
LEXINGTON FUNDS DISTRIBUTOR, INC.
P.O. Box 1515/Park 80 West Plaza Two
Saddle Brook, N.J. 07663
Transfer Agent
- --------------------------------------------------------------------------------
STATE STREET BANK AND TRUST COMPANY c/o National Financial Data Services 1004
Baltimore Kansas City, Missouri 64105
Table of Contents Page
- --------------------------------------------------------------------------------
Financial Highlights .................................................... 2
Description of the Fund ................................................. 3
Investment Objective and Policies ....................................... 3
Special Considerations and Risks ........................................ 4
Investment Restrictions ................................................. 5
Management of the Fund .................................................. 5
Investment Adviser, Sub-Adviser, Distributor
and Administrator .................................................... 5
Portfolio Managers ...................................................... 6
How to Purchase and Redeem Shares ....................................... 6
Determination of Net Asset Value ........................................ 6
Performance Calculation ................................................. 7
Dividend, Distribution and Reinvestment Policy .......................... 7
Tax Matters ............................................................. 7
General Information ..................................................... 8
LEXINGTON
- --------------------------------------------------------------------------------
LEXINGTON
NATURAL
RESOURCES
TRUST
- --------------------------------------------------------------------------------
PROSPECTUS
APRIL 30, 1997
<PAGE>
LEXINGTON NATURAL RESOURCES TRUST
STATEMENT OF ADDITIONAL INFORMATION
APRIL 30, 1997
This Statement of Additional Information, which is not a prospectus,
should be read in conjunction with the current prospectus of Lexington Natural
Resources Trust (the "Fund"), dated April 30, 1997, as it may be revised from
time to time. To obtain a copy of the Fund's prospectus at no charge, please
write to the Fund at P.O. Box 1515/Park 80 West - Plaza Two, Saddle Brook, New
Jersey 07663 or call the following number:
201-845-7300
TABLE OF CONTENTS
Page
General Information and History ............................................ 2
Investment Objectives and Policies ......................................... 2
Investment Restrictions .................................................... 2
Investment Adviser, Sub-Adviser, Distributor and
Administrator ............................................................. 3
Portfolio Transactions and Brokerage Commissions ........................... 4
Performance Calculation .................................................... 5
Dividend, Distribution and Reinvestment Policy ............................. 6
Tax Matters ................................................................ 6
Custodians, Transfer Agent and Dividend Disbursing
Agent ..................................................................... 6
Management of the Fund ..................................................... 7
Other Information .......................................................... 9
Financial Statements ....................................................... 10
1
<PAGE>
GENERAL INFORMATION AND HISTORY
The Fund was formerly named "Lexington Gold Trust". At a meeting held on
September 30, 1991, the shareholders of the Fund approved a change in the Fund's
fundamental investment objective and policies. In connection with the change of
investment objective and policies, the Fund also changed its name to "Lexington
Natural Resources Trust."
INVESTMENT OBJECTIVES AND POLICIES
The Fund's investment objective is to seek long-term growth of capital
through investment primarily in common stocks of companies which own, or develop
natural resources and other basic commodities, or supply goods and services to
such companies. Current income will not be a factor. Total return will consist
primarily of capital appreciation.
Management attempts to achieve the investment objective of the Fund by
seeking to identify securities of companies that, in its opinion, are
undervalued relative to the value of natural resource holdings of such companies
in light of current and anticipated economic or financial conditions. Natural
resource assets are materials derived from natural sources which have economic
value. The Fund will consider a company to have substantial natural resource
assets when, in management's opinion, the company's holdings of the assets are
of such magnitude, when compared to the capitalization, revenues or operating
profits of the company, that changes in the economic value of the assets will
affect the market price of the equity securities of such company. Generally, a
company has substantial natural resource assets when at least 50% of the
non-current assets, capitalization, gross revenues or operating profits of the
company in the most recent or current fiscal year are involved in or result
from, directly or indirectly through subsidiaries, exploring, mining, refining,
processing, fabricating, dealing in or owning natural resource assets. Examples
of natural resource assets include: companies that specialize in energy sources
(e.g. coal, geothermal power, natural gas and oil), environmental technology
(e.g. pollution control and waste recycling), forest products, agricultural
products, chemical products, ferrous and non- ferrous metals (e.g. iron,
aluminum and copper), strategic metals (e.g. uranium and titanium), precious
metals (e.g. gold, silver and platinum), and other basic commodities. The Fund
presently does not intend to invest directly in natural resource assets or
related contracts. The Fund may invest up to 25% of its total assets in
securities principally traded in markets outside the United States.
Management of the Fund believes that, based upon past performance, the
securities of specific companies that hold different types of substantial
natural resource assets may move relatively independently of one another during
different stages of inflationary cycles due to different degrees of demand for,
or market values of, their respective natural resource holdings during
particular portions of such inflationary cycles. The Fund's fully managed
investment approach enables it to switch its emphasis among various industry
groups depending upon management's outlook with respect to prevailing trends and
developments. The investment objective and policies of the Fund described in the
first two paragraphs of this section are fundamental policies of the Fund and
may not be changed without the approval of the holders of a majority of the
Fund's outstanding voting securities, as defined in the Investment Company Act
of 1940, as amended.
INVESTMENT RESTRICTIONS
The Fund's investment objective, as described under "Investment Policy,"
and the following investment restrictions are matters of fundamental policy
which may not be changed without the affirmative vote of the lesser of (a) 67%
or more of the shares of the Fund present at a shareholder's meeting at which
more than 50% of the outstanding shares are present or represented by proxy or
(b) more than 50% of the outstanding shares. The Fund is a non-diversified
management investment company and
1. with respect to 50% of its assets, the Fund will not at the time of
purchase invest more than 5% of its total assets, at market value, in the
securities of one issuer (except the securities of the United States
Government);
2. with respect to the other 50% of its assets, the Fund will not invest at
the time of purchase more than 25% of the market value of its total assets
in any single issuer.
These two restrictions, hypothetically, could give rise to a portfolio
with as few as fourteen issues. In addition, the Fund will not:
1. Purchase more than 10% of the voting securities or more than 10% of any
class of securities of any issuer. (For this purpose all outstanding debt
securities of an issuer are considered as one class, and all preferred
stocks of an issuer are considered as one class.)
2. Purchase any security restricted as to disposition under Federal Securities
laws or securities that are not readily marketable or purchase any
securities if such a purchase would cause the Fund to own at the time of
such purchase, illiquid securities, including repurchase agreements with an
agreed upon repurchase date in excess of seven days from the date of
2
<PAGE>
acquisition by the Fund, having aggregate market value in excess of 10% of
the value of the Fund's total assets.
3. Make short sales of securities or purchase any securities on margin, except
for such short term credits as are necessary for the clearance of
transactions.
4. Write, purchase or sell puts, calls or combinations thereof. However, the
Fund may invest up to 15% of the value of its assets in warrants. The
holder of a warrant has the right to purchase a given number of shares of a
particular company at a specified price until expiration. Such investments
generally can provide a greater potential for profit - or loss - than
investment of an equivalent amount in the underlying common stock. The
prices of warrants do not necessarily move parallel to the prices of the
underlying securities. If the holder does not sell the warrant, he risks
the loss of his entire investment if the market price of the underlying
stock does not, before the expiration date, exceed the exercise price of
the warrant plus the cost thereof. It should be understood that investment
in warrants is a speculative activity. Warrants pay no dividends and confer
no rights (other than the right to purchase the underlying stock) with
respect to the assets of the corporation issuing them. In addition, the
sale of warrants held more than one year generally results in a long term
capital gain or loss to the holder, and the sale of warrants held for less
than such period generally results in a short term capital gain or loss.
The holding period for securities acquired upon exercise of warrants,
however, begins on the day after the date of exercise, regardless of how
long the warrant was held. This restriction on the purchase of warrants
does not apply to warrants attached to, or otherwise included in, a unit
with other securities.
5. Invest in any commodities or commodities futures contracts, including
futures contracts relating to gold.
6. Invest in real estate.
7. Invest more than 5% of the value of its total assets in securities of
issuers which, with their predecessors, have a record of less than three
years continuous operation.
8. Purchase or retain the securities of any issuer if the officers or Trustees
of the Fund, or its Investment Adviser, or Sub-Adviser who own individually
more than 1/2 of 1% of the securities of such issuer together own more than
5% of the securities of such issuer.
9. Lend money or securities, provided that the making of time or demand
deposits with domestic banks and the purchase of debt securities such as
bonds, debentures, commercial paper, repurchase agreements and short term
obligations in accordance with the Fund's objective and policies, are not
prohibited.
10. Borrow money, except for temporary emergency purposes, and in no event more
than 5% of its net assets at value or cost, whichever is less; or pledge
its gold or portfolio securities or receivables or transfer or assign or
otherwise encumber them in an amount exceeding 10% of the value of its
total assets.
11. Underwrite securities issued by others.
12. Purchase securities of other investment companies, except in connection
with a merger, consolidation, reorganization or acquisition of assets.
13. Invest for the purpose of exercising control or management of another
company.
14. Participate on a joint or a joint and several basis in any trading account
in securities.
The percentage restrictions referred to above are to be adhered to at the
time of investment, and are not applicable to a later increase or decrease in
percentage beyond the specified limit resulting from a change in values or net
assets.
INVESTMENT ADVISER, SUB-ADVISER, DISTRIBUTOR AND ADMINISTRATOR
Lexington Management Corporation ("LMC"), P.O. Box 1515/Park 80 West
Plaza Two, Saddle Brook, New Jersey 07663, is the investment adviser to the
Fund, and, as such, advises and makes recommendations to the Fund with respect
to its investments and investment policies.
LMC has entered into a sub-advisory management contract with Market
Systems Research Advisors, Inc. ("MSR"), 80 Maiden Lane, New York, New York
10038, a registered investment advisor, under which the MSR will provide the
Fund with certain investment management and administrative services.
Under the terms of the investment management agreement, LMC also pays the
Fund's expenses for office rent, utilities, telephone, furniture and supplies
utilized for the Fund's principal office and the salaries and payroll expense of
officers and Trustees of the Fund who are employees of LMC or its affiliates in
carrying out its duties under the investment management agreement. The Fund pays
all its other expenses, including custodian and transfer agent fees, legal and
registration fees, audit fees, printing of prospectuses, shareholder reports and
3
<PAGE>
communications required for regulatory purposes or for distribution to existing
shareholders, computation of net asset value, mailing of shareholder reports and
communications, portfolio brokerage, taxes and independent Trustees' fees.
LMC shall reimburse the Fund in any fiscal year for the amount by which
the Fund's aggregate expenses exceed the most restrictive expense limits imposed
by any statute or regulatory authority of any jurisdiction in which shares of
the Fund are offered for sale during such year. Brokerage fees and commissions,
taxes, interest and extraordinary expenses are not deemed to be expenses of the
Fund for such reimbursement.
LMC's services are provided and its investment advisory fee is paid
pursuant to an investment management agreement, dated August 20, 1991 which will
automatically terminate if assigned and which may be terminated by either party
upon 60 days' notice. The terms of the agreement and any renewal thereof must be
approved annually by a majority of the Fund's Board of Trustees, including a
majority of Trustees who are not parties to the agreement or "interested
persons" of such parties, as such term is defined under the Investment Company
Act of 1940, as amended. For the year ended December 31, 1996 LMC received
$260,014 in investment advisory fees from the Fund and paid MSR $130,009.
LMC serves as investment adviser to other investment companies and
private and institutional investment accounts. Included among these clients are
persons and organizations which own significant amounts of capital stock of
LMC's parent. These clients pay fees which LMC considers comparable to the fee
levels for similarly served clients. LMC's accounts are managed independently
with reference to the applicable investment objectives and current security
holdings but on occasion more than one fund or counsel account may seek to
engage in transactions in the same security at the same time. To the extent
practicable, such transactions will be effected on a pro-rata basis in
proportion to the respective amounts of securities to be bought and sold for a
fund, and the allocated transactions will be averaged as to price. While this
procedure may adversely affect the price or volume of a given Fund transaction,
LMC believes that the ability of the Fund to participate in combined
transactions may generally produce better execution overall.
MSR, the Sub-Adviser serves as investment adviser to private and
institutional accounts.
LMC also acts as administrator to the Fund pursuant to an Administration
Services Agreement dated February 28, 1995 and performs certain administrative
and internal accounting services, including but not limited to, maintaining
general ledger accounts, regulatory compliance, preparation of financial
information for semiannual and annual reports, preparing registration
statements, calculating net asset values, shareholder communications and
supervision of the custodian, transfer agent and provides facilities for such
services. The Fund shall reimburse LMC for its actual cost in providing such
services, facilities and expenses.
Lexington Funds Distributor, Inc. ("LFD") serves as distributor for Fund
shares under a distribution agreement which is subject to annual approval by a
majority of the Fund's Board of Trustees, including a majority of Trustees who
are not "interested persons."
LMC and LFD are wholly owned subsidiaries of Lexington Global Asset
Managers, Inc., a publicly traded corporation. Lexington Global Asset Managers,
Inc., holds a controlling interest in MSR. Descendants of Lunsford Richardson,
Sr., their spouses, trusts and other related entities have a majority voting
control of outstanding shares of Lexington Global Asset Managers, Inc.,
Of the Trustees, officers or employees ("affiliated persons") of the
Fund, Messrs. Corniotes, DeMichele, Faust, Hisey, Kantor and Lavery and Mmes.
Carnicelli, Carr, Curcio, Gilfillan and Mosca (see "Management of the Fund"),
may also be deemed affiliates of LMC by virtue of being officers, trustees or
employees thereof.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
As a general matter, purchases and sales of portfolio securities by the
Fund are placed by LMC or MSR with brokers and dealers who in its opinion will
provide the Fund with the best combination of price (inclusive of brokerage
commissions) and execution for its orders. However, pursuant to the Fund's
investment management agreement, management consideration may be given in the
selection of broker-dealers to research provided and payment may be made at a
fee higher than that charged by another broker-dealer which does not furnish
research services or which furnishes research services deemed to be of lesser
value, so long as the criteria of Section 28(e) of the Securities Exchange Act
of 1934, as amended are met. Section 28(e) was adopted in 1975 and specifies
that a person with investment discretion shall not be "deemed to have acted
unlawfully or to have breached a fiduciary duty" solely because such person has
caused the account to pay a higher commission than the lowest available under
certain circumstances, provided that the person so exercising investment
discretion makes a good faith determination that the commissions paid are
"reasonable in relation to the value of the brokerage and research services
provided . . . viewed in terms of either that particular transaction or his
overall responsibilities with respect to the accounts as to which he exercises
investment discretion."
Currently, it is not possible to determine the extent to which
commissions that reflect an element of value for research services ("soft
dollars") might exceed commissions that would be payable for execution services
4
<PAGE>
alone. Nor generally can the value of research services to the Fund be measured.
Research services furnished might be useful and of value to LMC or MSR and its
affiliates, in serving other clients as well as the Fund. On the other hand, any
research services obtained by LMC or MSR or its affiliates from the placement of
portfolio brokerage of other clients might be useful and of value to LMC or MSR
in carrying out its obligations to the Fund.
As a general matter, it is the Fund's policy to execute in the U.S. all
transactions with respect to securities traded in the U.S. except when better
price and execution can, in the judgment of management of the Fund, be obtained
elsewhere. Over-the-counter purchases and sales are normally made with principal
market makers, except where, in the opinion of management, the best executions
are available elsewhere.
In addition, the Fund may from time to time allocate brokerage
commissions to firms which furnish research and statistical information to LMC
or MSR or which render to the Fund services which LMC or MSR is not required to
provide. The supplementary research supplied by such firms is useful in varying
degrees and is of indeterminable value. No formula has been established for the
allocation of business to such brokers. For the fiscal year ended December 31,
1994, the portfolio turnover rate for the Fund was 87.40%, and the Fund paid
$66,168 in brokerage commissions. For the fiscal year ended December 31, 1995
the portfolio turnover rate for the Fund was 149.18%, and the Fund paid $100,622
in brokerage commissions. For the fiscal year ended December 31, 1996, the
portfolio turnover rate for the Fund was 102.76% and the Fund paid $118,713 in
brokerage commissions and of that amount, $40,567 was paid for with soft
dollars.
Advisory fees paid to LMC and expense reimbursements paid to the Fund are
as follows:
EXPENSE
PERIOD ADVISORY FEE SUB ADVISORY FEE REIMBURSEMENT
------ ---------- --------------- --------------
1/1/94 to 12/31/94 $107,760 $53,880 $0
1/1/95 to 12/31/95 148,634 74,304 0
1/1/96 to 12/31/96 260,014 130,009 0
PERFORMANCE CALCULATION
For purposes of quoting and comparing the performance of the Fund to that
of other mutual funds and to other relevant market indices in advertisements or
in reports to shareholders, rules promulgated by the Securities and Exchange
Commission ("SEC"), a fund's advertising performance must include total return
quotations calculated according to the following formula: P(1 + T)n = ERV Where:
P = a hypothetical initial payment of $1,000,
T = average annual total return,
n = number of years (1, 5 or 10)
ERV = ending redeemable value of a hypothetical $1,000 payment,
made at the beginning of the 1, 5 or 10 year period, at the
end of such period (or fractional portion thereof).
Under the foregoing formula, the time periods used in advertising will be
based on rolling calendar quarters, updated to the last day of the most recent
quarter prior to submission of the advertising for publication, and will cover
1,5 and 10 year periods of the Fund's existence or such shorter period dating
from the effectiveness of the Fund's Registration Statement. In calculating the
ending redeemable value, the maximum sales load is deducted from the initial
$1,000 payment and all dividends and distributions by the Fund are assumed to
have been reinvested at net asset value as described in the Prospectus on the
reinvestment dates during the period. Total return, or "T" in the formula above,
is computed by finding the average annual compounded rates of return over the 1,
5 and 10 year periods (or fractional portion thereof) that would equate the
initial amount invested to the ending redeemable value. Any recurring account
charges that might in the future be imposed by the Fund would be included at
that time.
The Fund may also from time to time include in such advertising a total
return figure that is not calculated according to the formula set forth above in
order to compare more accurately the performance of the Fund with other measures
of investment return. For example, in comparing the Fund's total return, the
Fund calculates its aggregate total return for the specified periods of time by
assuming the investment of $10,000 in Fund shares and assuming the reinvestment
of each dividend or other distribution at net asset value on the reinvestment of
each dividend or other distribution at net asset value on the reinvestment date.
Percentage increases are determined by subtracting the initial value of the
investment from the ending value and by dividing the remainder by the beginning
value. Such alternative total return information will be given no greater
prominence in advertising than the information prescribed under Item 21 of Form
N-1A.
5
<PAGE>
The Fund's performance may be compared in advertising to the performance
of other mutual funds in general, or of particular types of mutual funds,
especially those with similar objectives. Such performance data may be prepared
by Lipper Analytical Services, Inc. and other independent services which monitor
the performance of mutual funds. The Fund may also advertise mutual fund
performance rankings which have been assigned to it by such monitoring services.
Pursuant to the SEC calculation, the Fund's average total rate of return
for the one and five year and since commencement (8/1/89) period ended December
31, 1996 was 26.89%, 9.94% and 5.63%.
DIVIDEND, DISTRIBUTION AND REINVESTMENT POLICY
The Fund intends to declare or distribute a dividend from its net capital
gain income to shareholders annually or more frequently if necessary in order to
comply with distribution requirements of the Internal Revenue Code of 1986, as
amended ("Code"), and to avoid the imposition of regular Federal income tax, and
if applicable, a 4% excise tax.
Any dividends and distribution payments will be reinvested at net asset
value, in additional full and fractional shares of the Fund.
TAX MATTERS
The following is only a summary of certain additional tax considerations
that are not described in the Prospectus and generally affect each Fund and its
shareholders. No attempt is made to present a detailed explanation of the tax
treatment of the Fund or its shareholders, and the discussions here and in the
Prospectus are not intended as substitutes for careful tax planning.
QUALIFICATIONS AS A REGULATED INVESTMENT COMPANY
The Fund intends to qualify to be treated as a "regulated investment
company" ("RIC") under the Internal Revenue Code of 1986, as amended (the
"Code"). If so qualified, the Fund will not be subject to federal income tax on
its investment company taxable income and net capital gains to the extent that
such investment company taxable income and net capital gains are distributed in
each taxable year to the separate accounts of the Participating Insurance
Companies. In addition, if the Fund distributes annually to the separate
accounts its ordinary income and capital gain net income, in the manner
prescribed in the Code, it will also not be subject to the 4% federal excise tax
otherwise applicable to the undistributed income or gain of a RIC. Distributions
of net investment income and net short-term capital gains will be treated as
ordinary income and distributions of net long-term capital gains will be treated
as long-term capital gain in the hands of the Participating Insurance Companies.
Under current tax law, capital gains or dividends from the Fund are not
currently taxable when left to accumulate within a variable annuity or variable
life insurance contract.
Section 817(h) of the Code requires that investments of a segregated
asset account of an insurance company be "adequately diversified," in accordance
with Treasury Regulations promulgated thereunder, in order for the holders of
the variable annuity contracts or variable life insurance policies investing in
the account to receive the tax-deferred or tax-free treatment generally afforded
holders of annuities or life insurance policies under the Code. The Department
of the Treasury has issued Regulations under section 817(h) which, among other
things, provide the manner in which a segregated asset account will treat
investments in a RIC for purposes of the applicable diversification
requirements. Under the Regulations, if a RIC satisfies certain conditions, that
RIC will not be treated as a single investment for these purposes, but rather
the segregated asset account will be treated as owning its proportionate share
of each of the assets of the RIC. The Fund plans to satisfy these conditions at
all times so that each segregated asset account of a Participating Insurance
Company investing in the Fund will be treated as adequately diversified under
the Code and Regulations.
For information concerning the federal income tax consequences to the
holders of variable annuity contracts and variable rate insurance policies, such
holders should consult the prospectuses used in connection with the issuance of
their particular contracts or policies.
CUSTODIANS, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Chase Manhattan Bank, N.A., 1211 Avenue of the Americas, New York, New
York 10036 has been retained to act as the Custodian for the Fund. In addition,
the Fund and Chase Manhattan Bank, N.A., may appoint foreign banks and foreign
securities depositories which qualify as eligible foreign sub-custodians under
rules adopted by the Securities and Exchange Commission. State Street Bank and
Trust Company, N.A., 225 Franklin Street, Boston, Massachusetts 02110 has been
retained to act as the Transfer Agent and Dividend Disbursing Agent for the
Fund.
The custodians and transfer agent have no part in determining the
investment policies of the Fund or in determining which portfolio securities are
to be purchased or sold by the Fund or in the declaration of dividends and
distributions.
6
<PAGE>
MANAGEMENT OF THE FUND
The Fund's Trustees and executive officers and their principal
occupations and former affiliations are:
+S.M.S. CHADHA (59), TRUSTEE. 3/16 Shanti Niketan, New Delhi 21, India.
Secretary, Ministry of External Affairs, New Delhi, India; Head of Foreign
Service Institute, New Delhi, India; Special Envoy of the Government of
India; Director, Special Unit for Technical Cooperation among Developing
Countries, United Nations Development Program, New York.
*+ROBERT M. DEMICHELE (52), PRESIDENT AND CHAIRMAN. P.O. Box 1515, Saddle Brook,
N.J. 07663. Chairman and Chief Executive Officer, Lexington Management
Corporation; President and Director, Lexington Global Asset Managers, Inc.;
Chairman and Chief Executive Officer, Lexington Funds Distributor, Inc.;
Chairman of the Board, Market Systems Research, Inc. and Market Systems
Research Advisors, Inc.; Director, Chartwell Re Corporation, Claredon
National Insurance Company, The Navigator's Group, Inc., Unione Italiana
Reinsurance, Vanguard Cellular Systems, Inc. and Weeden &Co.; Vice Chairman
of the Board of Trustees, Union College and Trustee, Smith Richardson
Foundation.
*+BEVERLEY C. DUER, P.E. (67), TRUSTEE. 340 East 72nd Street, New York, N.Y.
10021. Private Investor. Formerly Manager, Operations Research Department,
CPC International Inc.
*+BARBARA R. EVANS (36), TRUSTEE. 5 Fernwood Road, Summit, N.J. 07901. Private
Investor. Prior to May 1989, Assistant Vice President and Securities
Analyst, Lexington Management Corporation.
*+LAWRENCE KANTOR (50), VICE PRESIDENT AND TRUSTEE. P.O. Box 1515, Saddle Brook,
N.J. 07663. Managing Director, Executive Vice President and Director,
Lexington Management Corporation; Executive Vice President and Director,
Lexington Funds Distributor, Inc.; Executive Vice President and General
Manager -- Mutual Funds, Lexington Global Asset Managers, Inc.,
+JERARD F. MAHER (50), TRUSTEE. 300 Raritan Center Parkway, Edison, N.J. 08818.
General Counsel, Federal Business Center; Counsel, Ribis, Graham &Curtin.
+ANDREW M. MCCOSH (56), TRUSTEE. 12 Wyvern Park, Edinburgh EH92 JY, Scotland,
U.K. Professor of the Organisation of Industry and Commerce, Department of
Business Studies, The University of Edinburgh, Scotland..
*+DONALD B. MILLER (70), TRUSTEE. 10725 Quail Covey Drive, Boynton Beach,
Florida 33436. Chairman, Horizon Media, Inc.; Trustee, Galaxy Funds;
Director, Maguire Group of Connecticut; prior to January 1989, President,
Director and C.E.O., Media General Broadcast Services.
*+JOHN G. PRESTON (64), TRUSTEE. 3 Woodfield Road, Wellesley, Massachusetts
02181. Associate Professor of Finance, Boston College, Boston,
Massachusetts.
+MARGARET W. RUSSELL (76), TRUSTEE. 55 North Mountain Avenue, Montclair, N.J.
07042. Private Investor, formerly Community Affairs Director, Union Camp
Corporation.
*+LISA CURCIO (37), VICE PRESIDENT AND SECRETARY. P.O. Box 1515, Saddle Brook,
N.J. 07663. Senior Vice President and Secretary, Lexington Management
Corporation; Vice President and Secretary, Lexington Funds Distributor,
Inc.; Secretary, Lexington Global Asset Managers, Inc.
*+RICHARD M. HISEY (38), VICE PRESIDENT AND TREASURER. P.O. Box 1515, Saddle
Brook, N.J. 07663. Managing Director, Chief Financial Officer and Director,
Lexington Management Corporation; Chief Financial Officer, Vice President
and Director, Lexington Funds Distributor, Inc; Chief Financial Officer,
Market Systems Research Advisers, Inc.; Executive Vice President and Chief
Financial Officer, Lexington Global Asset Managers, Inc.
*+RICHARD J. LAVERY, CLU, CHFC (42), VICE PRESIDENT. P. O. Box 1515, Saddle
Brook, N.J. 07663. Senior Vice President, Lexington Management Corporation;
Vice President, Lexington Funds Distributor, Inc.
*+JANICE A. CARNICELLI (37), VICE PRESIDENT. P. O. Box 1515, Saddle Brook, N.J.
07663.
*+CHRISTIE CARR (29), ASSISTANT TREASURER, P.O. Box 1515, Saddle Brook, N.J.
07663. Prior to October 1992, Senior Accountant, KPMG Peat Marwick LLP.
*+SIOBHAN GILFILLAN (33), ASSISTANT TREASURER. P.O. Box 1515, Saddle Brook, N.J.
07663.
*+THOMAS LUEHS (34), ASSISTANT TREASURER, P.O. Box 1515, Saddle Brook, N.J.
07663. Prior to November 1993, Supervisor Investment Accounting, Alliance
Capital Management, Inc.
*+SHERI MOSCA (33), ASSISTANT TREASURER. P. O. Box 1515, Saddle Brook, N.J.
07663.
7
<PAGE>
*+PETER CORNIOTES (35), ASSISTANT SECRETARY. P. O. Box 1515, Saddle Brook, N.J.
07663. Assistant Vice President and Assistant Secretary, Lexington
Management Corporation. Assistant Secretary, Lexington Funds Distributor,
Inc.
*+ENRIQUE FAUST (36), ASSISTANT SECRETARY, P.O. Box 1515, Saddle Brook, N.J.
07663. Prior to March 1994, Blue Sky Compliance Coordinator, Lexington
Group of Investment Companies.
*"Interested person" and/or "affiliated person" as defined in the Investment
Company Act of 1940, as amended.
+Messrs. Chaana Corniotes, DeMichele, Duer, Hisey, Faust, Kantor, Lavery, Luehs,
Maner, McCosh Miller, and Preston and Mmes. Carnicelli, Carr, Curcio, Evans,
Gilfillan Mosca and Russell hold similar offices with some or all of the other
registered investment companies advised and/or distributed by Lexington
Management Corporation or Lexington Funds Distributor, Inc. or Market Systems
Research Advisers, Inc.
The Board of Trustees met 5 times during the twelve months ended December
31, 1996, and each of the Trustees attended at least 75% of those meetings.
REMUNERATION OF TRUSTEES AND CERTAIN EXECUTIVE OFFICERS
Each Trustee is reimbursed for expenses incurred in attending each
meeting of the Board of Trustees or any committee thereof. Each Trustee who is
not an affiliate of the advisor is compensated for his or her services according
to a fee schedule which recognizes the fact that each Trustee also serves as a
Trustee of other investment companies advised by LMC. Each Trustee receives a
fee, allocated among all investment companies for which the Trustee serves.
Effective September 12, 1995 each Trustee receives annual compensation of
$24,000. Prior to September 12, 1995, the trustees who were not employed by the
Fund or its affiliates received annual compensation of $16,000.
Set forth below is information regarding compensation paid or accrued
during the period January 1, 1996 to December 31, 1996 for each Trustee:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
AGGREGATE TOTAL COMPENSATION NUMBER OF
NAME OF DIRECTOR COMPENSATION FROM FROM FUND AND DIRECTORSHIPS IN
FUND FUND COMPLEX FUND COMPLEX
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
S.M.S. Chadha $856 $13,696 16
Robert M. DeMichele 0 0 17
Beverley C. Duer $1,712 $29,110 17
Barbara R. Evans 0 0 16
Lawrence Kantor 0 0 16
Jerard F. Maher $856 $16,046 17
Andrew M. McCosh $856 $13,696 16
Donald B. Miller $1,712 $26,760 16
John G. Preston $1,712 $26,760 16
Margaret W. Russell $856 $25,048 16
Philip Smith* $1,600 $25,080 16
- ------------------------------------------------------------------------------------------------
*Retired
</TABLE>
RETIREMENT PLAN FOR ELIGIBLE DIRECTORS/TRUSTEES
Effective September 12, 1995, the Trustees instituted a Retirement Plan
for Eligible Directors/Trustees (the "Plan") pursuant to which each
Director/Trustee (who is not an employee of any of the Funds, the Advisor,
Administrator or Distributor or any of their affiliates) may be entitled to
certain benefits upon retirement from the Board. Pursuant to the Plan, the
normal retirement date is the date on which the eligible Director/Trustee has
attained age 65 and has completed at least ten years of continuous and
non-forfeited service with one or more of the investment companies advised by
LMC (or its affiliates) (collectively, the "Covered Funds"). Each eligible
Director/Trustee is entitled to receive from the Covered Fund an annual benefit
commencing on the first day of the calendar quarter coincident with or next
following his date of retirement equal to 5% of his compensation multiplied by
the number of such Director/Trustee's years of service (not in excess of 15
8
<PAGE>
years) completed with respect to any of the Covered Portfolios. Such benefit is
payable to each eligible Trustee in quarterly installments for ten years
following the date of retirement or the life of the Director/Trustee. The Plan
establishes age 72 as a mandatory retirement age for Directors/Trustees;
however, Director/Trustees serving the Funds as of September 12, 1995 are not
subject to such mandatory retirement. Directors/Trustees serving the Funds as of
September 12, 1995 who elect retirement under the Plan prior to September 12,
1996 will receive an annual retirement benefit at any increased compensation
level if compensation is increased prior to September 12, 1997 and receive
spousal benefits (i.e., in the event the Director/Trustee dies prior to
receiving full benefits under the Plan, the Director/Trustee's spouse (if any)
will be entitled to receive the retirement benefit within the 10 year period.)
Retiring Trustees will be eligible to serve as Honorary Trustees for one
year after retirement and will be entitled to be reimbursed for travel expenses
to attend a maximum of two meetings.
Set forth in the table below are the estimated annual benefits payable to
an eligible Trustee upon retirement assuming various compensation and years of
service classifications. As of December 31, 1996, the estimated credited years
of service for Trustees Chadha, Duer, Maher, McCosh, Miller, Preston and Russell
are 1, 18, 1, 1, 22, 18 and 15, respectively.
HIGHEST ANNUAL COMPENSATION PAID BY ALL FUNDS
---------------------------------------------
$20,000 $25,000 $30,000 $35,000
YEARS OF
SERVICE ESTIMATED ANNUAL BENEFIT UPON RETIREMENT
------- ----------------------------------------
15 $15,000 $18,750 $22,500 $26,250
14 14,000 17,500 21,000 24,500
13 13,000 16,250 19,500 22,750
12 12,000 15,000 18,000 21,000
11 11,000 13,750 16,500 19,250
10 10,000 12,500 15,000 17,500
OTHER INFORMATION
As of March 31, 1997, Lexington Management Corporation, P. O. Box
1515/Park 80 West Plaza Two, Saddle Brook, New Jersey 07663 owned beneficially
10,454 shares of the Fund (0.2% of the Fund's outstanding shares). The balance
of the outstanding shares of the Fund (99.8%) are owned by Aetna Life Insurance
and Annuity Company, Kemper Investors Life Insurance Company and Safeco Life and
Annuity Company and allocated to a separate account used for funding variable
annuity contracts and variable life insurance policies.
9
<PAGE>
<PAGE>
PART C. OTHER INFORMATION
- ------- -----------------
Item 24. Financial Statements and Exhibits - List
----------------------------------------
The Annual Report for the year ending December 31, 1996 was filed
electronically on February 27, 1997 (as form type N-30D). Financial
statements from this 1996 Annual Report have been included in the Statement
of Additional Information.
Page in the Statement
(a) Financial statements: of Additional Information
--------------------- -------------------------
Report of Independent Auditors
dated February 10, 1997
Statement of Net Assets (Including
the Portfolio of Investments) at
December 31, 1996 (1)
Statement of Assets and Liabilities
at December 31, 1996
Statement of Operations for the year
ended December 31, 1996 (2)
Statements of Changes in Net Assets for
the years ended December 31, 1995
and 1996
Notes to Financial Statements
Schedules II-VII and other Financial Statements, for which
provisions are made in the applicable accounting regulations of
the Securities and Exchange Commission, are omitted because
they are not required under the related instructions, they are
inapplicable, or the required information is presented in the
financial statements or notes thereto.
(1) Includes the information required by Schedule I.
(2) Includes the information required by the Statement of
Realized Gain or Loss on Investments
<PAGE>
ITEM 24. Financial Statements and Exhibits - List
----------------------------------------
(b) Exhibits:
1. Declaration of Trust - Filed electronically
2. By-Laws - Filed electronically
3. Not Applicable
4. Stock Certificate Specimen - Filed 8/28/91 -
Incorporated by reference
5. Investment Advisory Agreement between Registrant
and Lexington Management Corporation - Filed Electronically
on April 29, 1996 - Incorporated by reference
5a. Sub-Advisory Investment Management Agreement between
Registrant & Market Systems Research Advisors, Inc.- Filed
electronically on April 29, 1996 - Incorporated by reference
6. Distribution Agreement between Registrant
and Lexington Funds Distributor, Inc. - Filed electronically
7. Not Applicable
8a. Form of Custodian Agreement between
Registrant and Chase Manhattan Bank, N.A. -
Filed electronically on 4/28/95 -
Incorporated by reference
8b. Transfer Agency Agreements between Registrant
and State Street Bank and Trust Company - Filed Electronically
on April 29, 1996 - Incorporated by reference
9. Form of Administrative Services Agreement between
Registrant and Lexington Management Corporation -
Filed electronically on 4/28/95 -
Incorporated by reference
10. Opinion of Counsel as to Legality of Securities being
registered - Filed 12/14/88 - Incorporated by reference
11. Consents
(a) Consent of Counsel Filed Electronically
(b) Consent of Independent Auditors Filed Electronically
12. Not Applicable
13. Not Applicable
14. Not Applicable
15. Not Applicable
16. Performance Calculation - Filed 3/1/90 -
Incorporated by reference
<PAGE>
Item 25. Persons Controlled by or under Common Control with Registrant
-------------------------------------------------------------
Furnish a list or diagram of all persons directly or indirectly
controlled by or under common control with the Registrant and as to each
such person indicate (1) if a company, the state or other sovereign power
under the laws of which it is organized, (2) the percentage of voting
securities owned or other basis of control by the person, if any,
immediately controlling it.
None.
Item 26. Number of Holders of Securities
-------------------------------
State in substantially the tabular form indicated, as of a specified
date within 90 days prior to the date of filing, the number of record
holders of each class of securities of the Registrant.
The following information is given as of March 31, 1997:
Title of Class Number of Record Holders
-------------- ------------------------
Shares of beneficial interest 13
(no par value)
Item 27. Indemnification
---------------
State the general effect of any contract, arrangements or statute
under which any director, officer, underwriter or affiliated person of the
Registrant is insured or indemnified in any manner against any liability
which may be incurred in such capacity, other than insurance provided by
any director, officer, affiliated person or underwriter for their own
protection.
Under the terms of the General Laws of the State of Massachusetts and
the Trust's Restated Declaration of Trust, the Trust shall indemnify each
of its Trustees to receive such indemnification (including those who serve
at its request as directors, officers or trustees of another organization
in which it has any interest as a shareholder, creditor or otherwise),
against all liabilities and expenses, including amounts paid in
satisfaction of judgements, in compromise of fines and penalties, and
counsel fees, reasonably incurred by him in connection with the defense or
disposition of any action, suit or other proceeding by the Trust or any
other person, whether civil or criminal, in which he may be involved or
with which he may be threatened, while in office or thereafter, by reason
of this being or having been such a Trustee, officer, employee or agent,
except with respect to any matter as to which he shall have been
adjudicated to have acted in bad faith or with willful misfeasance or
reckless disregard of duties or gross negligence; provided, however, that
as to any matter disposed of by a compromise payment by such Trustee,
officer, employee or agent, pursuant to a consent, decree or otherwise, no
indemnification either for said payment or for any other expenses shall be
provided unless the Trust shall have received a written opinion from
independent counsel approved by the Trustee to the effect that if the
foregoing matter had been adjudicated they would likely have been
adjudicated in favor of such Trustee, officer, employee or agent. The
rights accruing to any Trustee, officer, employee or agent under these
provisions shall not exclude any other right to which he may lawfully be
titled; provided, however, that no Trustee, officer, employee or agent may
satisfy any right of indemnity or reimbursement granted herein or to which
he may otherwise be entitled except out of Trust Property, and no
Shareholder shall be personally liable to any Person with respect to any
claim for indemnity or reimbursement or otherwise. The Trustees may make
advance payments in connection with indemnification under the Declaration
of Trust, provided that the indemnified Trustee, officer, employee or agent
shall have given a written undertaking to reimburse the Trust in the event
it is subsequently determined that he is entitled to such indemnification.
Item 28. Business and Other Connections of Investment Adviser
----------------------------------------------------
Describe any other business, profession, vocation or employment of a
substantial nature in which the investment adviser of the Registrant, and
each director, officer or partner of any such investment adviser, is or has
been, at any time during the past two fiscal years, engaged for his own
account or in the capacity of director, officer, employee, partner or
trustee.
See Prospectus Part A and Statement of Additional Information Part B
("Management of the Fund").
Item 29. Principal Underwriters
----------------------
(a) Lexington Money Market Trust
Lexington Tax Free Money Fund, Inc.
Lexington Growth and Income Fund, Inc.
Lexington GNMA Income Fund, Inc.
Lexington Ramirez Global Income Fund
Lexington Worldwide Emerging Markets Fund, Inc.
Lexington Goldfund, Inc.
Lexington Global Fund, Inc.
Lexington Corporate Leaders Trust Fund
Lexington Natural Resources Trust
Lexington Strategic Investments Fund, Inc.
Lexington Strategic Silver Fund, Inc.
Lexington Convertible Securities Fund
Lexington International Fund, Inc.
Lexington Emerging Markets Fund, Inc.
Lexington Crosby Small Cap Asia Growth Fund, Inc.
Lexington SmallCap Value Fund, Inc.
Lexington Troika Dialog Russia Fund, Inc.
<PAGE>
29 (b)
Position and Offices Position and
Name and Principal with Principal Offices with
Business Address Underwriter Registrant
- ------------------ -------------------- ------------
Peter Corniotes* Assistant Secretary Asst. Secretary
Lisa Curcio* Vice President and Secretary
Secretary
Robert M. DeMichele* Chief Executive Officer Chairman of the
and Chairman Board and President
Richard M. Hisey* Chief Financial Officer, Vice President &
Vice President & Director Treasurer
Lawrence Kantor* Executive Vice President Trustee & Vice
and Director President
Richard Lavery* Vice President Vice President
Janice Violette* Assistant Treasurer None
(c)
Not Applicable.
*P.O. Box 1515
Saddle Brook, New Jersey 07663
<PAGE>
Item 30. Location of Accounts and Records
--------------------------------
With respect to each account, book or other document required to
be maintained by Section 31(a) of the 1940 Act and the Rules (17 CFR 270,
31a-1 to 31a-3) promulgated thereunder, furnish the name and address of
each person maintaining physical possession of each such account, book or
other document.
The Registrant, Lexington Natural Resources Trust, Park 80 West
Plaza Two, Saddle Brook, New Jersey 07663 will maintain physical
possession of each such account, book or other document of the Company,
except for those maintained by the Registrant's Custodian, Chase Manhattan
Bank, N.A., 1211 Avenue of the Americas, New York, New York 10036, or
Transfer Agent, State Street Bank and Trust Company, c/o National Financial
Data Services, City Center Square, 1100 Main, Kansas City, Missouri 64105.
Item 31. Management Services
-------------------
Furnish a summary of the substantive provisions of any
management-related service contract not discussed in Part A or B of this
Form (because the contract was not believed to be material to a purchaser
of securities of the Registrant) under which services are provided to the
Registrant, indicating the parties to the contract, the total dollars paid
and by whom for the last three fiscal years.
None.
Item 32. Undertakings -
------------
The Registrant, Lexington Natural Resources Trust undertakes to
furnish a copy of the Fund's latest annual report, upon request
and without charge, to every person to whom a prospectus is
delivered.
The Registrant will hold a meeting of its public shareholders, if
requested to do so by the holders of at least 10 percent of the
Registrant's outstanding shares, to call a meeting of shareholders
for the purpose of voting upon the question of removal of a
director or directors and to assist in communications with other
shareholders.
<PAGE>
Registration No. 33-26116
Securities and Exchange Commission
Washington, D.C. 20549
Exhibits
Filed With
Form N-1A
LEXINGTON NATURAL RESOURCES TRUST
<PAGE>
EXHIBIT INDEX
The following documents are being filed electronically as exhibits to this
filing:
Form of Declaration of Trust including Amendment
Form of By-Laws
Form of Distribution Agreement
Consent of Kramer, Levin, Naftalis & Frankel
Consent of independent auditors for the inclusion of their report herein
Article 6 Financial Data Schedule
Cover
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940 the Registrant certifies that it meets
all of the requirements for effectiveness of this amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this amendment to be signed on its behalf by the
Undersigned, thereunto duly authorized, in the City of Saddle Brook and
State of New Jersey, on the 10th day of April, 1997.
LEXINGTON NATURAL RESOURCES TRUST
/s/ Robert M. DeMichele
________________________________________
By Robert M. DeMichele
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Robert M. DeMichele
__________________________ Chairman of the Board April 10, 1997
Robert M. DeMichele Principal Executive
Officer
/s/ Richard M. Hisey
__________________________ Principal Financial April 10, 1997
Richard M. Hisey and Accounting Officer
/s/ Lisa Curcio
__________________________ Principal Compliance April 10, 1997
Lisa Curcio Officer
*SMS Chadha Trustee April 10, 1997
__________________________
SMS Chadha
*Beverley C. Duer, P.E. Trustee April 10, 1997
__________________________
Beverley C. Duer, P.E.
*Barbara M. Evans Trustee April 10, 1997
__________________________
Barbara M. Evans
<PAGE>
Signature Title Date
*Lawrence Kantor Trustee April 10, 1997
__________________________
Lawrence Kantor
*Jerard F. Maher Trustee April 10, 1997
__________________________
Jerard F. Maher
*Andrew M. McCosh Trustee April 10, 1997
__________________________
Andrew M. McCosh
*Donald B. Miller Trustee April 10, 1997
__________________________
Donald B. Miller
*John G. Preston Trustee April 10, 1997
__________________________
John G. Preston
*Margaret W. Russell Trustee April 10, 1997
__________________________
Margaret W. Russell
/s/ Lisa Curcio
*By: ______________________
Lisa Curcio
Attorney-in-Fact
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Lawrence Kantor, Lisa Curcio or Jay Baris, and each of them, his
or her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his or her name, place and
stead, in any and all his or her capacities as a trustee of LEXINGTON
NATURAL RESOURCES TRUST, a Massachusetts business trust, to sign on his or
her or its behalf any and all Registration Statements (including any post-
effective amendments to Registration Statements) under the Securities Act
of 1933, the Investment Company Act of 1940 and any amendments and
supplements thereto, and other documents in connection thereunder, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority
to do and perform each and every act and this requisite and necessary to
be done in and about the premises, as fully as to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
DATED this 27th day of February, 1997.
/s/ S.M.S. Chadha
_____________________________
S.M.S. Chadha
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Lawrence Kantor, Lisa Curcio or Jay Baris, and each of them, his
or her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his or her name, place and
stead, in any and all his or her capacities as a trustee of LEXINGTON
NATURAL RESOURCES TRUST, a Massachusetts business trust, to sign on his or
her or its behalf any and all Registration Statements (including any post-
effective amendments to Registration Statements) under the Securities Act
of 1933, the Investment Company Act of 1940 and any amendments and
supplements thereto, and other documents in connection thereunder, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority
to do and perform each and every act and this requisite and necessary to
be done in and about the premises, as fully as to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
DATED this 27th day of February, 1997.
/s/ Jerard F. Maher
_____________________________
Jerard F. Maher
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Lawrence Kantor, Lisa Curcio or Jay Baris, and each of them, his
or her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his or her name, place and
stead, in any and all his or her capacities as a trustee of LEXINGTON
NATURAL RESOURCES TRUST, a Massachusetts business trust, to sign on his or
her or its behalf any and all Registration Statements (including any post-
effective amendments to Registration Statements) under the Securities Act
of 1933, the Investment Company Act of 1940 and any amendments and
supplements thereto, and other documents in connection thereunder, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority
to do and perform each and every act and this requisite and necessary to
be done in and about the premises, as fully as to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
DATED this 27th day of February, 1997.
/s/ Andrew M. McCosh
_____________________________
Andrew M. McCosh
<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Lawrence Kantor, Lisa Curcio or Jay Baris, and each of them, his
or her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his or her name, place and
stead, in any and all his or her capacities as a trustee of LEXINGTON
NATURAL RESOURCES TRUST, a Massachusetts business trust, to sign on his or
her or its behalf any and all Registration Statements (including any post-
effective amendments to Registration Statements) under the Securities Act
of 1933, the Investment Company Act of 1940 and any amendments and
supplements thereto, and other documents in connection thereunder, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority
to do and perform each and every act and this requisite and necessary to
be done in and about the premises, as fully as to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, and each of them, may lawfully do or
cause to be done by virtue hereof.
DATED this 27th day of February, 1997.
/s/ Margaret W. Russell
_____________________________
Margaret W. Russell
LEXINGTON GOLD TRUST
CERTIFICATE OF AMENDMENT
OF AGREEMENT AND DECLARATION OF TRUST
The undersigned, being a majority of the Trustees of LEXINGTON GOLD
TRUST (the Trust ), organized and existing pursuant to an Agreement and
Declaration of Trust dated November 15, 1988 (the Declaration of Trust ),
under the laws of the Commonwealth of Massachusetts, do hereby declare and
certify as follows:
Article I Section 1, is hereby amended as follows:
Section 1. Name. This Trust shall be known as Lexington Natural
Resources Trust , and the Trustees shall conduct the business of the
Trust under that name or any other name as they may from time to
time determine.
IN WITNESS WHEREOF, the undersigned have executed this instrument as
of the day and year first above written.
/s/ Robert M. DeMichele /s/ Beverley C. Duer
________________________________ ________________________________
Robert DeMichele, Trustee Beverley C. Duer, Trustee
Piedmont Management Company, Inc. 340 East 72nd Street, Apt. 3N
80 Maiden Lane New York, NY 10021-4768
New York, NY 10038
/s/ Lawrence Kantor /s/ Donald B. Miller
_________________________________ ________________________________
Lawrence Kantor, Trustee Donald B. Miller, Trustee
Lexington Management Corporation Horizon Media, Inc.
Park 80 West, Plaza Two 630 Third Avenue, 3rd Floor
Saddle Brook, NJ 07663 New York, NY 10017
/s/ William S. Stack /s/ Leon M. Stern
_________________________________ ________________________________
William S. Stack, Trustee Leon M. Stern, Trustee
Lexington Management Corporation 45 West 60th Street
Park 80 West, Plaza Two Suite 9-A
Saddle Brook, NJ 07663 New York, NY 10023
==============================================================================
LEXINGTON GOLD TRUST
____________________
AGREEMENT AND DECLARATION OF TRUST
__________________________________
AGREEMENT AND DECLARATION OF TRUST made this 15th day of November,
1988, by the Trustees hereunder, and by the holders of shares of
beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as trustees of a Massachusetts voluntary association with
transferable shares in accordance with the provisions hereinafter set
forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets, which they may from time to time
acquire in any manner as Trustees hereunder IN TRUST to manage and dispose
of the same upon the following terms and conditions for the pro rata
benefit of the holders from time to time of Shares in this Trust as
hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name. This Trust shall be known as Lexington Gold
Trust , and the Trustees shall conduct the business of the Trust under
that name or any other name as they may from time to time determine.
Section 2. Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) the Trust refers to the Massachusetts business trust
established by this Agreement and Declaration of Trust, as amended from
time to time;
(b) Trustees refers to the Trustees of the Trust named herein or
elected in accordance with Article IV;
(c) Shares means the equal proportionate transferable units of
interest into which the beneficial interest in the Trust shall be divided
from time to time or, if more than one series of Shares is authorized by
the Trustees, the equal proportionate transferable units into which each
series of Shares shall be divided from time to time;
(d) Shareholder means a record owner of Shares;
(e) the 1940 Act refers to the Investment Company Act of 1940 and
the Rules and Regulations thereunder, all as amended from time to time;
(f) The terms Affiliated Person , Assignment , Commission ,
Interested Person , Principal Underwriter and Majority Shareholder Vote
(the 67% or 50% requirement of the third sentence of Section 2(a)(42) of
the 1940 Act, whichever may be applicable) shall have the meanings given
them in the 1940 Act;
(g) Declaration of Trust shall mean this Agreement and
Declaration of Trust as amended or restated from time to time; and
(h) By-laws shall mean the By-laws of the Trust as amended from
time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to provide investors a managed
investment primarily in securities and debt instruments and to carry on
such other business as the Trustees may from time to time determine
pursuant to their authority under this Declaration of Trust.
ARTICLE III
SHARES
Section 1. Division of Beneficial Interest. The Shares of the
Trust shall be issued in one or more series as the Trustees may, without
shareholder approval, authorize. Each series shall be preferred over all
other series in respect of the assets allocated to that series. The
beneficial interest in each series shall at all times be divided into
Shares, with $.01 par value, each of which shall represent an equal
proportionate interest in the series with each other Share of the same
series, none having priority or preference over another. The number of
Shares authorized shall be unlimited. 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 series.
Section 2. Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or a transfer or similar agent. No
certificates certifying the ownership of Shares shall be issued except as
the Trustees may otherwise determine from time to time. The Trustees may
make such rules as they consider appropriate for the issuance of share
certificates, the transfer of Shares and similar matters. The record
books of the Trust as kept by the Trust or any transfer or similar agent,
as the case may be, shall be conclusive as to who are the Shareholders of
each series and as to the number of Shares of each series held from time
to time by each Shareholder.
Section 3. Investment in the Trust. The Trustees shall accept
investments in the Trust from such persons and on such terms and for such
consideration, which may consist of cash or tangible or intangible
property or a combination thereof, as they from time to time authorize.
All consideration received by the Trust for the issue or sale of
Shares of each series, together with all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange
or liquidation thereof, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to the series of Shares with respect to which the same
were received by the Trust for all purposes, subject only to the rights of
creditors, and shall be so handled upon the books of account of the Trust
and are herein referred to as assets of such series.
Section 4. No Preemptive Rights. Shareholders shall have no
preemptive or other right to subscribe to any additional Shares or other
securities issued by the Trust.
Section 5. Status of Shares and Limitation of Personal Liability.
Shares shall be deemed to be personal property giving only the rights
provided in this instrument. 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. The death of a
Shareholder during the continuance of the Trust shall not operate to
terminate the same nor entitle the representative of any deceased
Shareholder to an accounting or to take any action in court or elsewhere
against the Trust or the Trustees, but only to the rights of said decedent
under this Trust. Ownership of Shares shall not entitle the Shareholder
to any title in or to the whole or any part of the Trust property or right
to call for a partition or division of the same or for an accounting, nor
shall the ownership of Shares constitute the Shareholders partners.
Neither the Trust nor the Trustees, nor any officer, employee or agent of
the Trust shall have any power to bind personally any Shareholder, nor
except as specifically provided herein to call upon any Shareholder for
the payment of any sum of money or assessment whatsoever other than such
as the Shareholder may at any time personally agree to pay.
ARTICLE IV
THE TRUSTEES
Section 1. Election. The persons who shall act as Trustees until
the first annual meeting or until their successors are duly chosen and
qualify are the initial Trustees executing this Agreement and Declaration
of Trust or any counterpart thereof. The number of Trustees shall be as
provided in the By-laws or as fixed from time to time by the Trustees.
The shareholders may elect Trustees at any meeting of Shareholders called
by the Trustees for that purpose. Each Trustee shall serve during the
continued lifetime of the Trust until he dies, resigns or is removed, or,
if sooner, until the next meeting of Shareholders called for the purpose
of electing Trustees and the election and qualification of his successor.
Any Trustee may resign at any time by written instrument signed by him and
delivered to any officer of the Trust, to each other Trustee or to a
meeting of the Trustees. Such resignation shall be effective upon receipt
unless specified to be effective at some other time. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee
resigning and no Trustee removed shall have any right to any compensation
for any period following his resignation or removal, or any right to
damages on account of such removal.
Section 2. Effect of Death, Resignation, etc. of a Trustee. The
death, declination, resignation, retirement, removal or incapacity of the
Trustees, or any one of them, shall not operate to annul the Trust or to
revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
Section 3. Powers. Subject to the provisions of this Declaration
of Trust, the business of the Trust shall be managed by the Trustees, and
they shall have all powers necessary or convenient to carry out that
responsibility. Without limiting the foregoing, the Trustees may adopt
By-laws not inconsistent with this Declaration of Trust providing for the
conduct of the business of the Trust and may amend and repeal them to the
extent that such By-laws do not reserve that right to the Shareholders;
they may enlarge or reduce their number, may fill vacancies in their
number, including vacancies caused by enlargement of their number, and may
remove Trustees with or without cause; they may elect and remove, with or
without cause, such officers and appoint and terminate such agents as they
consider appropriate; they may appoint from their own number, and
terminate, any one or more committees consisting of two or more Trustees,
including an executive committee which may, when the Trustees are not in
session, exercise some or all of the power and authority of the Trustees
as the Trustees may determine; they may employ one or more custodians of
the assets of the Trust and may authorize such custodians to employ
subcustodians and to deposit all or any part of such assets in a system or
systems for the central handling of securities, retain a transfer agent or
a Shareholder servicing agent, or both, provide for the distribution of
Shares by the Trust, through one or more principal underwriters or
otherwise, set record dates for the determination of Shareholders with
respect to various matters, and in general delegate such authority as they
consider desirable to any officer of the Trust, to any committee of the
Trustees and to any agent or employee of the Trust or to any such
custodian or underwriter.
Without limiting the foregoing, the Trustees shall have power and
authority;
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(c) To act as a distributor of shares and as underwriter of, or
broker or dealer in, securities or other property;
(d) To vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such power
and discretion with relation to securities or property as the Trustees
shall deem proper;
(e) To exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities;
(f) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or in the
name of the Trustees or of the Trust or in the name of a custodian, sub-
custodian or other depository or a nominee or nominees or otherwise;
(g) To allocate assets, liabilities and expenses of the Trust to
a particular series of Shares or to apportion the same among two or more
series, provided that any liabilities or expenses incurred by a particular
series of Shares shall be payable solely out of the assets of that series;
(h) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or issuer, any
security of which is or was held in the Trust; to consent to any contract,
lease, mortgage, purchase or sale of property by such corporation or
issuer, and to pay calls or subscriptions with respect to any security
held in the Trust;
(i) To join with other security holders in acting through a
committee, depository, voting trustee or otherwise, and in that connection
to deposit any security with, or transfer any security to, any such
committee, depository or trustee, and to delegate to them such power and
authority with relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and
to pay, such portion of the expenses and compensation of such committee,
depository or trustee as the Trustees shall deem proper;
(j) To compromise, arbitrate or otherwise adjust claims in favor
of or against the Trust or any matter in controversy, including but not
limited to claims for taxes;
(k) To enter into joint ventures, general or limited partnerships
and any other combinations or associations;
(l) To borrow funds;
(m) To enter into contracts of every kind and description;
(n) To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and pledge
the Trust property or any part thereof to secure any of or all such
obligation;
(o) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including without limitation, insurance policies insuring the
assets of the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers or managers,
principal underwriters, or independent contractors of the Trust
individually against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such
person as Shareholder, Trustee, officer, employee, agent, investment
adviser or manager, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to indemnify
such person against such liability;
(p) To pay pensions for faithful service, as deemed appropriate by
the Trustees, and to adopt, establish and carry out pension, profit
sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions, including
the purchasing of life insurance and annuity contracts as a means of
providing such retirement and other benefits, for any or all of the
Trustees, officers, employees and agents of the Trust; and
(q) To engage in any other lawful act or activity in which
corporations organized under the Massachusetts Business Corporation Law
may engage.
The Trustees shall not in any way be bound or limited by any present
or future law or custom in regard to investments by trustees.
Except as otherwise provided herein or from time to time in the By-
laws, any action to be taken by the Trustees may be taken by a majority of
the Trustees present at a meeting of Trustees (a quorum being present),
within or without Massachusetts, including any meeting held by means of a
conference telephone or other communications equipment by means of which
all persons participating in the meeting can hear each other at the same
time and participation by such means shall constitute presence in person
at a meeting, or by written consents of a majority of the Trustees then in
office.
Section 4. Payment of Expenses by Trust. The Trustees are
authorized to pay or to cause to be paid out of the principal or income of
the Trust, or partly out of principal and partly out of income, as they
deem fair, all expenses, fees, charges, taxes and liabilities incurred or
arising in connection with the Trust, in connection with the management
thereof, or in connection with the financing of the sale of Shares,
including, but not limited to, the Trustees compensation and such
expenses and charges for the services of the Trust s officers, employees,
and investment adviser, manager, or sub-adviser, principal underwriter,
auditor, counsel, custodian, transfer agent, shareholder servicing agent,
and such other agents or independent contractors and such other expenses
and charges as the Trustees may deem necessary or proper to incur,
provided, however, that all expenses, fees, charges, taxes and liabilities
incurred or arising in connection with a particular series of Shares as
determined by the Trustees, shall be payable solely out of the assets of
that series.
Section 5. Ownership of Assets of the Trust. Title to all of the
assets of each series of Shares and of the Trust shall at all times be
considered as vested in the Trustees.
Section 6. Advisory, Management and Distribution Services. The
Trustees may, at any time and from time to time, contract for exclusive or
nonexclusive advisory and/or management services with any corporation,
trust, association or other organization (the Manager ), every such
contract to comply with such requirements and restrictions as may be set
forth in the By-laws; and any such contract may provide for one or more
subadvisers who shall perform all or part of the obligations of the
Manager under such contract and may contain such other terms interpretive
of or in addition to said requirements and restrictions as the Trustees
may determine, including, without limitation, authority to determine from
time to time what investments shall be purchased, held, sold or exchanged
and what portion, if any, of the assets of the Trust shall be held
uninvested and to make changes in the Trust s investments. The Trustees
may also, at any time and from time to time, contract with the Manager or
any other corporation, trust, association or other organization,
appointing it exclusive or nonexclusive distributor or principal
underwriter for the Shares, every such contract to comply with such
requirements and restrictions as may be set forth in the By-laws; and any
such contract may contain such other terms interpretive of or in addition
to said requirements and restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee,
employee, manager, adviser, principal underwriter or distributor or
agent of or for any corporation, trust, association, or other
organization, or of or for any parent or affiliate of any
organization, with which an advisory or management contract, or
principal underwriter s or distributor s contract, or transfer,
shareholder servicing or other agency contract may have been or may
hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in the Trust,
or that
(ii) any corporation, trust, association or other
organization with which an advisory or management contract or
principal underwriter s or distributor s contract, or transfer,
shareholder servicing or other agency contract may have been or may
hereafter be made also has an advisory or management contract, or
principal underwriter s or distributor s contract, or transfer,
shareholder servicing or other agency contract with one or more
other 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.
ARTICLE V
SHAREHOLDERS VOTING POWERS AND MEETINGS
Shareholders shall have such power to vote as is provided for in,
and may hold meetings and take actions pursuant to the provisions of the
By-laws. A majority of the outstanding Trust shares may vote to remove a
trustee at a special meeting, called for that purpose or by a written
declaration filed with the Trust s custodian. A special meeting of
Shareholders for the purpose of removal of a trustee will be called upon
the written request of at least 10 percent of the Trust shares then
outstanding.
ARTICLE VI
DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES
Section 1. Distributions. The Trustees may each year, or more
frequently if they so determine, distribute to the Shareholders of each
series such income and capital gains relating to such series, accrued or
realized, as the Trustees may determine, after providing for actual and
accrued expenses and liabilities (including such reserves as the Trustees
may establish) determined in accordance with good accounting practices.
The Trustees shall have full discretion to determine which items shall be
treated as income and which items as capital and their determination shall
be binding upon the Shareholders. Distributions of each year s income of
each series shall be distributed pro rata to Shareholders of a series in
proportion to the number of Shares of such series held by each of them.
Such distributions shall be made in cash or Shares or an combination
thereof as determined by the Trustees. Any such distribution paid in
Shares of a series will be paid at the net asset value thereof as
determined in accordance with the By-laws.
Section 2. Redemptions and Repurchases. The Trust shall purchase
such Shares as are offered by any Shareholder for redemption, upon the
presentation of any certificate for the Shares to be purchased, a proper
instrument of transfer and a request directed to the Trust or a person
designated by the Trust that the Trust purchase such Shares, or in
accordance with such other procedures for redemption as the Trustees may
from time to time authorize; and the Trust will pay therefor the net asset
value thereof, as next determined in accordance with the By-laws, less
such redemption charge or fee as the Trustees may determine from time to
time. Payment for said Shares shall be made by the Trust to the
Shareholder within seven days after the date on which the request is made.
The obligation set forth in this Section 2 is subject to the provision
that in the event that any time the New York Stock Exchange is closed for
other than customary weekends or holidays or, if permitted by rules of the
Commission, during periods when trading on the Exchange is restricted or
during any emergency which makes it impractical for the Trust to dispose
of its investments or to determine fairly the value of its net assets, or
during any other period permitted by order of the Commission for the
protection of investors, such obligation may be suspended or postponed by
the Trustees. The Trust may also purchase or repurchase Shares at a price
not exceeding the net asset value of such Shares in effect when the
purchase or repurchase or any contract to purchase or repurchase is made.
Section 3. Redemptions at the Option of the Trust. The Trust shall
have the right at its option and at any time to redeem Shares of any
Shareholder at the net asset value thereof as determined in accordance
with the By-laws: (i) if at such time such Shareholder owns fewer Shares
of a particular series than, or Shares of a particular series having an
aggregate net asset value of less than, an amount determined from time to
time for such series by the Trustees; or (ii) to the extent that such
Shareholder owns Shares of a particular series of Shares equal to or in
excess of a percentage of the outstanding Shares of that series determined
from time to time by the Trustees; or (iii) to the extent that such
Shareholder owns Shares of the Trust representing a percentage equal to or
in excess of such percentage of the aggregate number of outstanding Shares
of the Trust or the aggregate net asset value of the Trust determined from
time to time by the Trustees.
Section 4. Dividends, Distribution, Redemptions and Repurchases.
No dividend or distribution (including, without limitation, any
distribution paid upon termination of the Trust or of any series) with
respect to, nor any redemption or repurchase of, the Shares of any series
shall be effected by the Trust other than from the assets allocated to
such series.
ARTICLE VII
COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES
Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust; they may fix the amount of their
compensation. Nothing herein shall in any way prevent the employment of
any Trustee for advisory, management, legal, accounting, investment
banking, underwriting, brokerage, or investment dealer or other services
and payment for the same by the Trust.
Section 2. Limitation of Liability. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any
officer, agency, employee, manager or principal underwriter of the Trust,
nor shall any Trustee be responsible for the act or omission of any other
Trustee, but nothing herein contained shall protect any Trustee against
any liability to which he or she would otherwise be subject by reason of
wilful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his or her office.
Every note, bond, contract, instrument, certificate or undertaking
and every other act or thing whatsoever executed or done by or on behalf
of the Trust or the Trustees or any of them in connection with the Trust
shall be conclusively deemed to have been executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon.
ARTICLE VIII
INDEMNIFICATION
Section 1. Trustees, Officers, etc. The Trust shall indemnify each
of its Trustees and officers (including persons who serve at the Trust s
request as directors, officers or trustees of another organization in
which the Trust has any interest as a shareholder, creditor or otherwise)
(hereinafter referred to as a Covered Person ) against all liabilities and
expenses, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and counsel fees
reasonably incurred by any Covered Person in connection with the defense
or disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative body, in which
such Covered Person may be or may have been involved as a party or
otherwise or with which such Covered Person may be or may have been
threatened, while in office or thereafter, by reason of being or having
been such a Covered Person except with respect to any matter as to which
such Covered Person shall have been finally adjudicated in any such
action, suit or other proceeding (a) not to have acted in good faith in
the reasonable belief that such Covered Person s action was in the best
interests of the Trust or (b) to be liable to the Trust or its
Shareholders by reason of wilful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of such
Covered Person s office. Expenses, including counsel fees so incurred by
any such Covered Person (but excluding amounts paid in satisfaction of
judgments, in compromise or as fines or penalties) shall be paid from time
to time by the Trust in advance of the final disposition of any such
action, suit or proceeding upon receipt of any undertaking by or on behalf
of such Covered Person to repay amounts so paid to the Trust if it is
ultimately determined that indemnification of such expenses is not
authorized under this Article, provided, however, that either (a) such
Covered Person shall have provided appropriate security for such
undertaking, (b) the Trust shall be insured against losses arising from
any such advance payments or (c) either 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 independent
legal counsel in a written opinion shall have determined, based upon a
review of readily available facts (as opposed to a full trial type
inquiry) that there is reason to believe that such Covered Person will be
found entitled to indemnification under this Article.
Section 2. Compromise Payment. As to any matter disposed of
(whether by a compromise payment, pursuant to a consent decree or
otherwise) without an adjudication by a court, or by any other body before
which the proceeding was brought, that such Covered Person either (a) did
not act in good faith in the reasonable belief that his or her action was
in the best interests of the Trust or (b) is liable to the Trust or its
Shareholders by reason of wilful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his or her
office, indemnification shall be provided if (a) approved as in the best
interests of the Trust, after notice that it involves such
indemnification, by at least 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) upon a determination, based
upon a review of readily available facts (as opposed to a full trial type
inquiry) that such Covered Person acted in good faith in the reasonable
belief that his or her action was in the best interests of the Trust and
is not liable to the Trust or its Shareholders by reasons of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her office, or (b) there has been
obtained an opinion in writing of independent legal counsel, based upon a
review of readily available facts (as opposed to a full trial type
inquiry) to the effect that such Covered Person appears to have acted in
good faith in the reasonable belief that his or her action was in the best
interests of the Trust and that such indemnification would not protect
such Covered Person against any liability to the Trust to which he or she
would otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of his or her office. Any approval pursuant to this Section shall
not prevent the recovery from any Covered Person of any amount paid to
such Covered Person in accordance with this Section as indemnification if
such Covered Person is subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief that
such Covered Person s action was in the best interests of the Trust or to
have been liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person s office.
Section 3. Indemnification Not Exclusive. The right of
indemnification hereby provided shall not be exclusive of or affect any
other rights to which such Covered Person may be entitled. As used in
this Article VIII, the term Covered Person shall include such person s
heirs, executors and administrators and a disinterested Trustee is a
Trustee who is not an interested person of the Trust as defined in
Section 2(a)(19) of the 1940 Act (or who has been exempted from being an
interested person by any rule, regulation or order of the Commission) and
against whom none of such actions, suits or other proceedings or another
action, suit or other proceeding on the same or similar grounds is then or
has been pending. Nothing contained in this Article shall affect any
rights to indemnification to which personnel of the Trust, other than
Trustees or officers, and other persons may be entitled by contract or
otherwise under law, nor the power of the Trust to purchase and maintain
liability insurance on behalf of any such person; provided, however, that
the Trust shall not purchase or maintain any such liability insurance in
contravention of applicable law, including without limitation the 1940
Act.
Section 4. Shareholders. In case any Shareholder or former
Shareholder shall be held to be personally liable solely by reason of his
or her being or having been a Shareholder and not because of his or her
acts or omissions or for some other reason, the Shareholder or former
Shareholder (or his or her heirs, executors, administrators or other legal
representatives or in the case of a corporation or other entity, its
corporate or other general successor) shall be entitled to be held
harmless from and indemnified against all loss and expense arising from
such liability, but only out of the assets of the particular series of
Shares of which he or she is or was a Shareholder.
ARTICLE IX
MISCELLANEOUS
Section 1. Trustees, Shareholders, etc. Not Personally Liable;
Notice. All persons extending credit to, contracting with or having any
claim against the Trust or a particular series of Shares shall look only
to the assets of the Trust or the assets allocated to that particular
series of Shares for payment under such credit, contract or claim; and
neither the Shareholders nor the Trustees, nor any of the Trust s
officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Nothing in this Declaration of Trust shall
protect any Trustee against any liability to which such Trustee would
otherwise be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee.
Every note, bond, contract, instrument, certificate of undertaking
made or issued by the Trustees or by any officer or officers shall give
notice that this Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts and shall recite that the same was executed
or made by or on behalf of the Trust or by them as Trustee or Trustees or
as officers or officer and not individually and that the obligations of
such instrument are not binding upon any of them or the Shareholders
individually but are binding only upon the assets and property of the
Trust, and may contain such further recital as he or she or they may deem
appropriate, but the omission thereof shall not operate to bind any
Trustee or Trustees or officer or officers or Shareholder or Shareholders
individually.
Section 2. Trustee s Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be
liable for his or her own wilful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of the office
of Trustee, and for nothing else, and shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take advice of
counsel or other experts with respect to the meaning and operation of this
Declaration of Trust, and shall be under no liability for any act or
omission in accordance with such advice or for failing to follow such
advice. The Trustees shall not be required to give any bond as such, nor
any surety if a bond is required.
Section 3. Liability of Third Persons Dealing with Trustees. No
person dealing with the Trustees shall be bound to make any inquiry
concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the trust or upon its order.
Section 4. Duration and Termination of Trust. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The
Trust may be terminated at any time by the vote of Shareholders holding at
least a majority of the Shares of each series entitled to vote or by the
Trustees by written notice to the Shareholders. Any series of Shares may
be terminated at any time by vote of Shareholders holding at least a
majority of the Shares of such series entitled to vote or by the Trustees
by written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of
Shares, after paying or otherwise providing for all charges, taxes,
expenses and liabilities, whether due or accrued or anticipated, of the
Trust or of the particular series as may be determined by the Trustees,
the Trust shall in accordance with such procedures as the Trustees
consider appropriate reduce the remaining assets to distributable form in
cash or shares or other securities, or any combination thereof, and
distribute the proceeds to the Shareholders of the series involved,
ratably according to the number of Shares of such series held by the
several Shareholders of such series on the date of termination.
Section 5. Filing of Copies, References, Headings. The original or
a copy of this instrument and of each amendment hereto shall be kept at
the office of the Trust where it may be inspected by any Shareholder. A
copy of this instrument and of each amendment hereto shall be filed by the
Trust with the Secretary of the Commonwealth of Massachusetts and with the
Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the Trust
may rely on a certificate by an officer of the Trust as to whether or not
any such amendments have been made and as to any matters in connection
with the Trust hereunder, and, with the same effect as if it were the
original, may rely on a copy certified by an officer of the Trust to be a
copy of this instrument or of any such amendments. In this instrument and
in any such amendment, references to this instrument and all expressions
like herein , hereof and hereunder shall be deemed to refer to this
instrument as amended or affected by any such amendments. Headings are
placed herein for convenience of reference only and shall not be taken as
a part hereof or control or affect the meaning, construction or effect of
his instrument. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.
Section 6. Applicable Law. This Declaration of Trust is created
under and is to be governed by and construed and administered according to
the laws of The Commonwealth of Massachusetts. The Trust shall be of the
type commonly called a Massachusetts business trust, and without limiting
the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust.
Section 7. Amendments. This Declaration of Trust may be amended at
any time by an instrument in writing signed by a majority of the then
Trustees when authorized to do so by vote of Shareholders holding a
majority of the Shares of each series entitled to vote, except that an
amendment which shall affect the holders of one or more series of Shares
but not the holders of all outstanding series shall be authorized by vote
of the Shareholders holding a majority of the Shares entitled to vote of
each series affected and no vote of Shareholders of a series not affected
shall be required. Amendments having the purpose of changing the name of
the Trust or of supplying any omission, curing any ambiguity or curing,
correcting or supplementing any defective or inconsistent provision
contained herein shall not require authorization by Shareholder vote.
Section 8. Use of Word Lexington . Lexington Management
Corporation ( LMC ) has consented to the use by the Trust of the
identifying word Lexington in the name of the Trust. Such consent is
conditioned upon the employment of LMC or a subsidiary thereof as
investment adviser of the Trust. As between the Trust and LMC, LMC
controls the use of the name of the Trust insofar as such name contains
the identifying word Lexington . LMC may from time to time use the
identifying word Lexington in other connections and for other purposes,
including, without limitation, in the names of other investment companies,
corporations or businesses which it may manage, advise, sponsor or own or
in which it may have a financial interest.
Section 9. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original and all of which,
when taken together, shall constitute one agreement, and any party hereto
may execute this Agreement by signing one or more counterparts thereof.
Section 10. Registered Office. The registered office of the Trust
is to be located in the City of Boston, County of Suffolk, in the
Commonwealth of Massachusetts. The name of its registered agent is CT
Corporation System, 2 Oliver Street, Boston, Massachusetts 02109.
IN WITNESS WHEREOF, the undersigned have executed this instrument as
of the day and year first above written.
/s/ Robert M. DeMichele /s/ Beverley C. Duer
________________________________ ________________________________
Robert DeMichele, Trustee Beverley C. Duer, Trustee
Piedmont Management Company, Inc. 340 East 72nd Street, Apt. 3N
80 Maiden Lane New York, NY 10021-4768
New York, NY 10038
/s/ Harry B. Freeman /s/ Lawrence Kantor
________________________________ _________________________________
Harry B. Freeman, Trustee Lawrence Kantor, Trustee
200 E. 74th Street Lexington Management Corporation
New York, NY 10021 Park 80 West, Plaza Two
Saddle Brook, NJ 07663
/s/ Donald B. Miller /s/ John G. Preston
_________________________________ __________________________________
Donald B. Miller, Trustee John G. Preston, Trustee
Media General Broadcast Services 3 Woodfield Road
630 Third Avenue, 3rd Floor Wellesley, MA 02181
New York, NY 10017
/s/ William S. Stack /s/ Philip C. Smith
_________________________________ __________________________________
William S. Stack, Trustee Philip C. Smith, Trustee
Lexington Management Corporation 87 Lord s Highway
Park 80 West, Plaza Two Weston, CT 06880
Saddle Brook, NJ 07663
/s/ Leon M. Stern
_________________________________
Leon M. Stern, Trustee
Photomarker
212 National Avenue
Spartenburg, SCS 29303-9700
BY-LAWS
OF
LEXINGTON NATURAL RESOURCES TRUST
(formerly known as "LEXINGTON GOLD TRUST"; name change effective
September 30, 1991)
ARTICLE I
Agreement and Declaration
of Trust and Principal Office
1.1. Agreement and Declaration of Trust. These By-laws shall be
subject to the Agreement and Declaration of Trust as from time to time in
effect (the "Declaration of Trust"), LEXINGTON GOLD TRUST, a Massachusetts
business trust established by the Declaration of Trust (the "Trust").
1.2. Principal Office of the Trust. The principal office of the
Trust shall be located within or without Massachusetts as the Trustees may
determine or as they may authorize.
ARTICLE 2
Meetings of Trustees
2.1. Regular Meetings. Regular meetings of the Trustees may be
held without call or notice at such places and at such times as the
Trustees may from time to time determine, provided that notice of the
first regular meeting following any such determination shall be given to
absent Trustees. A regular meeting of the Trustees may be held without
call or notice immediately after and at the same place as the annual
meeting of the shareholders.
2.2. Special Meetings. Special meetings of the Trustees may be
held at any time and at any place designated in the call of the meeting
when called by the Chairman of the Trustees, the President or the
Treasurer or by two or more Trustees, sufficient notice thereof being
given to each Trustee by the Secretary or an Assistant Secretary or by the
officer or the Trustee calling the meeting.
2.3. Notice. It shall be sufficient notice to the Trustee of a
special meeting to send notice by mail at least forty-eight hours or by
telegram, telex or telecopy or other electronic facsimile transmission
method at least twenty-four hours before the meeting addressed to the
Trustee at his or her usual or last known business or residence address or
to give notice to him or her in person or by telephone at least twenty-four
hours before the meeting. Notice of a meeting need not be given to
any Trustee if a written waiver of notice, executed by him or her before
the meeting, is filed with the records of the meeting, or to any Trustee
who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him or her. Neither notice of a
meeting nor a waiver of a notice need specify the purposes of the
meetings.
2.4. Quorum. At any meeting of the Trustees a majority of the
Trustees then in office shall constitute a quorum. Any meeting may be
adjourned from time to time by a majority of the votes cast upon the
question, whether or not a quorum is present, and the meeting may be held
as adjourned without further notice.
ARTICLE 3
Officers
3.1. Enumeration; Qualification. The officers of the Trust shall
be a President, a Treasurer, a Secretary, and such other officers
including a Chairman of the Trustees, if any, as the Trustees from time to
time may in their discretion elect. The Trust may also have such agents
as the Trustees from time to time may in their discretion appoint. The
Chairman of the Trustees, if one is elected, shall be a Trustee and may
but need not be a shareholder; and any other officer may but need not be
a Trustee or a shareholder. Any two or more offices may be held by the
same person.
3.2. Election. The President, the Treasurer, and the Secretary
shall be elected annually by the Trustees. Other officers, if any, may be
elected or appointed by the Trustees at said meeting or at any other time.
Vacancies in any office may be filled at any time.
3.3. Tenure. The Chairman of the Trustees, if one is elected, the
President, the Treasurer and the Secretary shall hold office until their
respective successors are chosen and qualified, or in each case until he
or she sooner dies, resigns, is removed or becomes disqualified. Each
other officer shall hold office and each agent shall retain authority at
the pleasure of the Trustees.
3.4. Powers. Subject to the other provisions of these By-laws,
each officer shall have, in addition to the duties and powers herein and
in the Declaration of Trust set forth, such duties and powers as are
commonly incident to the office occupied by him or her as if the Trust
were organized as a Massachusetts business corporation and such other
duties and powers as the Trustees may from time to time designate.
3.5. Chairman; President. Unless the Trustees otherwise provide,
the Chairman of the Trustees or, if there is none or in the absence of the
Chairman, the President shall preside at all meetings of the shareholders
and of the Trustees. The President shall be the chief executive officer.
3.6. Treasurer. The Treasurer shall be the chief financial and
accounting officer of the Trust, and shall, subject to the provisions of
the Declaration of Trust and to any arrangement made by the Trustees with
a custodian, investment adviser or manager, or transfer, shareholder
servicing or similar agent, be in charge of the valuable papers, books of
account and accounting records of the Trust, and shall have such other
duties and powers as may be designated from time to time by the Trustees
or by the President.
3.7. Secretary. The Secretary shall record all proceedings of the
shareholders and the Trustees in books to be kept therefor, which books or
a copy thereof shall be kept at the principal office of the Trust. In the
absence of the Secretary from any meeting of the shareholders or Trustees,
an assistant secretary, or if there be none or if he or she is absent, a
temporary secretary chosen at such meeting shall record the proceedings
thereof in the aforesaid books.
3.8. Resignations. Any officer may resign at any time by written
instrument signed by him or her and delivered to the Chairman, the
President or the Secretary or to a meeting of the Trustees. Such
resignation shall be effective upon receipt unless specified to be
effective at some other time. Except to the extent expressly provided in
a written agreement with the Trust, no officer resigning and no officer
removed shall have any right to any compensation for any period following
his or her resignation or removal, or any right to damages on account of
such removal.
ARTICLE 4
Committees
4.1. Quorum; Voting. A majority of the members of any Committee of
the Trustees shall constitute a quorum for the transaction of business,
any action of such a Committee may be taken at a meeting by a vote of a
majority of the members present (a quorum being present) or evidenced by
one or more writings signed by such a majority. Members of a Committee
may participate in a meeting of such Committee by means of a conference
telephone or other communications equipment by means of which all persons
participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a
meeting.
ARTICLE 5
Reports
5.1. General. The Trustees and officers shall render reports at
the time and in the manner required by the Declaration of Trust or any
applicable law. Officers and Committees shall render such additional
reports as they may deem desirable or as may from time to time be required
by the Trustees.
ARTICLE 6
Fiscal Year
6.1. General. Except as from time to time otherwise provided by
the Trustees, the initial fiscal year of the Trust shall end on such date
as is determined in advance or in arrears by the Treasurer, and subsequent
fiscal years shall end on such date in subsequent years.
ARTICLE 7
Seal
7.1. General. The seal of the Trust shall consist of a flat-faced
die with the word "Massachusetts", together with the name of the Trust and
the year of its organization cut or engraved thereon but, unless otherwise
required by the Trustees, the seal shall not be necessary to be placed on,
and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
ARTICLE 8
Execution of Papers
8.1. General. Except as the Trustees may generally or in
particular cases authorize the execution thereof in some other manner, all
deeds, leases, contracts, notes and other obligations made by the Trustees
shall be signed by the President or by the Treasurer and need not bear the
seal of the Trust.
ARTICLE 9
Issuance of Share Certificates
9.1. Share Certificates. In lieu of issuing certificates for
shares, the Trustees or the transfer agent may either issue receipts
therefor or may keep accounts upon the books of the Trust for the record
holders of such shares, who shall in either case be deemed, for all
purposes hereunder, to be the holders of certificates for such shares as
if they had accepted such certificates and shall be held to have expressly
assented and agreed to the terms hereof.
The Trustees may at any time authorize the issuance of share
certificates. In that event, each shareholder shall be entitled to a
certificate stating the number of shares owned by him, in such form as
shall be prescribed from time to time by the Trustees. Such certificates
shall be signed by the president or vice-president and by the treasurer or
assistant treasurer. Such signatures may be facsimile if the certificate
is signed by a transfer agent, or by a registrar, other than a Trustee,
officer or employee of the Trust. In case any officer who has signed or
whose facsimile signature has been place on such certificate shall cease
to be such officer before such certificate is issued, it may be issued by
the Trust with the same effect as if he were such officer at the time of
its issue.
9.2. Loss of Certificates. In case of the alleged loss or
destruction or the mutilation of a share certificate, a duplicate
certificate may be issued in place thereof, upon such terms as the
Trustees shall prescribe.
9.3. Issuance of New Certificates to Pledgee. A pledgee of shares
transferred as collateral security shall be entitled to a new certificate
if the instrument of transfer substantially describes the debt or duty
that is intended to be secured thereby. Such new certificates shall
express on its face that it is held as collateral security, and the name
of the pledgor shall be stated thereon, who alone shall be liable as a
shareholder and entitled to vote thereon.
9.4. Discontinuance of Issuance of Certificates. The Trustees may
at any time discontinue the issuance of share certificates and may, by
written notice to each shareholder, require the surrender of share
certificates to the Trust for cancellation. Such surrender and
cancellation shall not effect the ownership of shares in the Trust.
ARTICLE 10
Provisions Relating to the
Conduct of the Trust's Business
10.1. Certain Definitions. When used herein the following words
shall have the following meanings: "Distributor" shall mean any one or
more corporations, firms or associations which have distributor's or
principal underwriter's contracts in effect with the Trust providing that
redeemable shares issued by the Trust shall be offered and sold by such
Distributor. "Manager" shall mean any corporation, firm or association
which may at the time have an advisory or management contract with the
Trust and any corporation, firm or association which may at any time have
a sub-advisory contract relating to the Trust with any such Manager.
10.2. Limitation on Holdings by the Trust of Certain Securities and
on Dealings with Officers or Trustees. The Trust may not purchase or
retain shares or securities issued by an issuer if one or more of the
holders of the shares or securities issued by an issuer is an officer or
Trustee of the Trust or officer or director of the Manager and if one or
more of such officers, Trustees or directors owns beneficially more than
1/2 of 1% of the shares or securities, or both, of such issuer and such
officers, Trustees and directors owning more than 1/2 of 1% of such shares
or securities together own beneficially more than 5% of such shares or
securities. Each officer and Trustee of the Trust shall keep the
Treasurer of the Trust informed of the names of all issuers shares or
securities of which are held in the portfolio of the Trust in which such
officer or Trustee owns as much as 1/2 of 1% of the outstanding shares or
securities.
The Trust will not lend any of its assets to the Distributor or
Manager or to any officer or director of the Distributor or Manager or any
officer or Trustee of the Trust, and shall not permit any officer or
Trustee or any officer or director of the Distributor or Manager to deal
for or on behalf of the Trust with himself or herself as principal or
agent, or with any partnership, association or corporation in which he or
she has a financial interest; provided that the foregoing provisions shall
not prevent (a) officers and Trustees of the Trust or officers and
directors of the Distributor or Manager from buying, holding or selling
shares in the Trust or from being partners, officers and directors of or
otherwise financially interested in the Distributor or the Manager; (b)
purchases or sales of securities or other property if such transaction is
permitted by or is exempt or exempted from the provisions of the
Investment Company Act of 1940 or any Rule or Regulation thereunder; (c)
employment of legal counsel, registrar, transfer agent, shareholder
servicing agent, dividend disbursing agent, or custodian who is, or has a
partner, shareholder, officer or director who is, an officer or Trustee of
the Trust or an officer or director of the Distributor or Manager; (d)
sharing statistical, research, legal and management expenses and office
hire and expenses with any other investment company in which an officer or
Trustee of the Trust or an officer or director of the Distributor or
Manager is an officer or director or otherwise financially interested.
10.3. Limitation on Dealing in Securities of the Trust by Certain
Officers, Trustees, Distributor or Manager. Neither the Distributor nor
Manager, nor any officer or Trustee of the Trust or officer or director of
the Distributor or Manager shall take long or short positions in
securities issued by the Trust; provided, however, that:
(a) the Distributor may purchase from the Trust and
otherwise deal in shares issued by the Trust pursuant to the terms
of its contract with the Trust;
(b) any officer or Trustee of the Trust or officer or
director of the Distributor or Manager or any trustee or fiduciary
for the benefit of any of them may at any time, or from time to
time, purchase from the Trust or from the Distributor shares issued
by the Trust at the price available to the public or to such
officer, Trustee, director, trustee or fiduciary, no such purchase
to be in contravention of any applicable state or federal
requirement; and
(c) the Distributor or the Manager may at any time, or from
time to time purchase for investment shares issued by the Trust.
10.4. Securities and Cash of the Trust to be held by Custodian
subject to certain Terms and Conditions.
(a) all securities and cash owned by this Trust shall be
held by or deposited with one or more banks or trust companies
having (according to its last published report) not less than
$5,000,000 aggregate capital, surplus and undivided profits (any
such bank or trust company being hereby designated as "Custodian"),
provided such a Custodian can be found ready and willing to act;
subject to such rules, regulations and orders, if any, as the
Securities and Exchange Commission may adopt, this Trust may, or may
not permit any Custodian to, deposit all or any part of the
securities owned by this Trust in a system for the central handling
of securities pursuant to which all securities of any particular
class or series of any issue deposited within the system may be
transferred or pledged by bookkeeping entry, without physical
delivery. The Custodian may appoint, subject to the approval of the
Trustees, one or more subcustodians.
(b) The Trust shall enter into a written contract with each
Custodian regarding the powers, duties and compensation of such
Custodian with respect to the cash and securities of the Trust held
by such Custodian. Said contract and all amendments thereto shall
be approved by the Trustees.
(c) The Trust shall upon the resignation or inability to
serve of any Custodian or upon change of any Custodian:
(i) in case of such resignation or inability to serve,
use its better efforts to obtain a successor Custodian;
(ii) require that the cash and securities owned by the
Trust be delivered directly to the successor Custodian; and
(iii) in the event that no successor Custodian can be
found, submit to the shareholders, before permitting delivery
of the cash and securities owned by the Trust otherwise than
to a successor Custodian, the question whether the Trust shall
be liquidated or shall function without a Custodian.
10.5. Requirements and Restrictions Regarding the Management
Contract. Every advisory or management contract entered into by the Trust
shall provide that in the event that the total expenses of any series of
shares of the Trust for any fiscal year should exceed the limits imposed
on investment company expenses imposed by any statute or regulatory
authority of any jurisdiction in which shares of the Trust are offered for
sale, the compensation due the Manager for such fiscal year shall be
reduced by the amount of such excess by a reduction or refund thereof.
10.6. Reports to Shareholders; Distributions from Realized Gains.
The Trust shall send to each shareholder of record at least semi-annually
a statement of the condition of the Trust and of the results of its
operations, containing all information required by applicable laws or
regulations.
10.7. Determination of Net Asset Value Per Share. Net asset value
per share of each series of shares of the Trust shall mean: (i) the value
of all the assets of such series; (ii) less total liabilities of such
series; (iii) divided by the number of shares of such series outstanding,
in each case at the time of each determination. The net asset value per
share of each series shall be determined as of the normal close of trading
on the New York Stock Exchange on each day on which such Exchange is open.
As of any time other than the normal close of trading on such Exchange,
the Trustees may cause the net asset value per share last determined to be
determined again in a similar manner or adjusted to reflect changes in
market values of securities in the portfolio, such adjustment to be made
on the basis of changes in selected security prices determined by the
Trustees to be relevant to the portfolio of such series or in averages or
in other standard and readily ascertainable market data, and the Trustees
may fix the time when such redetermined or adjusted net asset value per
share of each series shall become effective.
In valuing the portfolio investments of any series for determination
of net asset value per share of such series, securities for which market
quotations are readily available shall be valued at prices which, in the
opinion of the Trustees or the person designated by the Trustees to make
the determination, most nearly represent the market value of such
securities, and other securities and assets shall be valued at their fair
value as determined by or pursuant to the direction of the Trustees, which
in the case of short-term debt obligations, commercial paper and
repurchase agreements may, but need not, be on the basis of quoted yields
for securities of comparable maturity, quality and type, or on the basis
of amortized cost. Expenses and liabilities of the trust shall be accrued
each day. Liabilities may include such reserves for taxes, estimated
accrued expenses and contingencies as the Trustees or their designates may
in their sole discretion deem fair and reasonable under the circumstances.
No accruals shall be made in respect of taxes or unrealized appreciation
of securities owned unless the Trustees shall otherwise determine.
Dividends payable by the Trust shall be deducted as at the time of but
immediately prior to the determination of net asset value per share on the
record date therefor.
ARTICLE 11
Shareholders' Voting Powers and Meetings
11.1. Voting Powers. The Shareholders shall have power to vote only
(i) for the election of Trustees as provided in Article IV, Section 1 and
Article V of the Declaration of Trust, provided, however, that no meeting
of Shareholders is required to be called for the purpose of electing
Trustees unless and until such time as less than a majority of the
Trustees have been elected by the Shareholders, (ii) with respect to any
Manager or Sub-Adviser as provided in Article IV, Section 6 of the
Declaration of Trust to the extent required by the Investment Company Act
of 1940 and the rules and regulations thereunder, (iii) with respect to
any termination of this Trust to the extent and as provided in Article IX,
Section 4 of the Declaration of Trust, (iv) with respect to any amendment
of the Declaration of Trust to the extent as provided in Article IX,
Section 7 of the Declaration of Trust, (v) 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 the
Shareholders, and (vi) with respect to such additional matters relating to
the Trust as may be required by law, the Declaration of Trust, these By-laws
or any registration of the Trust with the Commission (or any successor
agency) or any state, or as the Trustees may consider necessary or desirable.
Each whole 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. On any matter submitted to a vote of
Shareholders all Shares of the Trust then entitled to vote shall be voted by
individual series, except (i) when required by the 1940 Act, Shares shall be
voted in the aggregate and not by individual series and (ii) when the
Trustees have determined that the matter affects only the interests of one or
more series, then only Shareholders of such series shall be entitled to vote
thereon. There shall be no cumulative voting in the election of Trustees.
Shares held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to exercise of the proxy the Trust
receives a specific written notice to the contrary from any one of them. A
proxy purporting to be executed by or on behalf of a Shareholder shall be
deemed valid unless challenged at or prior to its exercise and the burden of
proving invalidity shall rest on the challenger. Until Shares are issued,
the Trustees may exercise all rights of Shareholders and may take any action
required by law, the Declaration of Trust or these By-laws to be taken by
Shareholders.
11.2. Voting Power and Meetings. Meetings of the Shareholders may
be called by the Trustees for the purpose of electing Trustees as provided
in Article IV, Section 1 of the Declaration of Trust and for such other
purposes as may be prescribed by law, by the Declaration of Trust or by
these By-laws. Meetings of the Shareholders may also be called by the
Trustees from time to time for the purpose of taking action upon any other
matter deemed by the Trustees to be necessary or desirable. A meeting of
Shareholders may be held at any place designated by the Trustees. Written
notice of any meeting of Shareholders shall be given or caused to be given
by the Trustees by mailing such notice at least seven days before such
meeting, postage prepaid, stating the time and place of the meeting, to
each Shareholder at the Shareholder's address as it appears on the records
of the Trust. Whenever notice of a meeting is required to be given to a
Shareholder under the Declaration of Trust or these By-laws, a written
waiver thereof, executed before or after the meeting by such Shareholder
or his attorney thereunto authorized and filed with the records of the
meeting, shall be deemed equivalent to such notice.
11.3. Quorum and Required Vote. A majority of Shares entitled to
vote shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of the Declaration of
Trust or these By-laws permits or requires that holders of any series
shall vote as a series, then a majority of the aggregate number of Shares
of that series entitled to vote shall be necessary to constitute a quorum
for the transaction of business by that series. Any lesser number shall
be sufficient for adjournments. Any adjourned session or sessions may be
held, within a reasonable time after the date set for the original
meeting, without the necessity of further notice. Except when a larger
vote is required by any provision of law or the Declaration of Trust or
these By-laws, a majority of the Shares voted shall decide any questions
and a plurality shall elect a Trustee, provided that where any provision
of law or of the Declaration of Trust or these By-laws permits or requires
that the holders of any series shall vote as a series, then a majority of
the Shares of that series voted on the matter (or a plurality with respect
to the election of a Trustee) shall decide that matter insofar as that
series is concerned.
11.4. Action by Written Consent. Any action taken by Shareholders
may be taken without a meeting if a majority of Shareholders entitled to
vote on the matter (or such larger proportion thereof as shall be required
by any express provision of law or the Declaration of Trust or these By-laws)
consent to the action in writing and such written consents are filed with the
records of the meetings of Shareholders. Such consent shall be treated for
all purposes as a vote taken at a meeting of Shareholders.
11.5. Record Dates. For the purpose of determining the Shareholders
who are entitled to vote or act at any meeting or any adjournment thereof, or
who are entitled to receive payment of any dividend or of any other
distribution, the Trustees may from time to time fix a time, which shall be
not more than 60 days before the date of any meeting of Shareholders or the
date for the payment of any dividend or of any other distribution, as the
record date for determining the Shareholders having the right to notice of
and to vote at such meeting and any adjournment thereof or the right to
receive such dividend or distribution, and in such case only Shareholders of
record on such record date shall has such right notwithstanding any transfer
of shares on the books of the Trust after the record date; or without fixing
such record date and Trustees may for any of such purposes close the register
or transfer books for all or any part of such period.
Article 12
Amendments to the By-laws
12.1. General. These By-laws may be amended or repealed, in whole
or in part, by a majority of the Trustees then in office at any meeting of
the Trustees, or by one of more writings signed by such a majority.
DISTRIBUTION AGREEMENT
between
LEXINGTON NATURAL RESOURCES TRUST
and
LEXINGTON FUNDS DISTRIBUTOR, INC.
THIS AGREEMENT made this 30th day of September, 1991 by and between
LEXINGTON NATURAL RESOURCES TRUST, a Massachusetts business trust
(hereinafter referred to as the "Fund"), and LEXINGTON FUNDS DISTRIBUTOR,
INC., a Delaware Corporation (hereinafter referred to as the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
FIRST: The Fund hereby appoints the Distributor as its exclusive
underwriter to promote the sale and to arrange for the sale of shares of
common stock of the Fund in jurisdictions wherein shares may legally be
offered for sale.
The Fund agrees to sell and deliver its unissued shares, as from time
to time shall be effectively registered under the Securities Act of 1933,
upon the terms hereinafter set forth.
SECOND: The Fund hereby authorizes the Distributor, subject to law
and the Articles of Incorporation of the Fund, to accept, for the account
of the Fund, orders for the purchase of its shares, satisfactory to the
Distributor, as of the time of receipt of such orders or as otherwise
described in the then current prospectus of the Fund.
THIRD: The public offering price of such shares shall be based on
the net asset value per share (as determined by the Fund) of the
outstanding shares of the Fund. The net asset value shall be regularly
determined on every business day as of the time of closing of the New York
Stock Exchange. It is expected that the New York Stock Exchange will be
closed on Saturdays and Sundays and on New Year's Day, President's Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas. The public offering price shall become effective as set
forth from time to time in the Fund's current prospectus; such net asset
value shall also be regularly determined, and the public offering price
based thereon shall become effective, as of such other times for the
regular determination of net asset value as may be required or permitted
by rules of the National Association of Securities Dealers, Inc. or of the
Securities and Exchange Commission. The Fund shall furnish the
Distributor, with all possible promptness, a statement of each computation
of net asset value, and of the details entering into such computation.
The Distributor may, and when requested by the Fund shall, suspend
its efforts to effectuate sales of the shares of common stock at any time
when in the opinion of the Distributor or of the Fund no sales should be
made because of market or other economic considerations or abnormal
circumstances of any kind.
The Fund may withdraw the offering of its common stock (i) at any
time with the consent of the Distributor, or (ii) without such consent when
so required by the provisions of any statute or of any order, rule or
regulation of any governmental body or securities exchange having
jurisdiction. It is mutually understood and agreed that the Distributor
does not undertake to sell all or any specific portion of the shares of
common stock of the Fund.
FOURTH: The Distributor agrees that it will use its best efforts
with reasonable promptness to promote and sell shares of the Fund; but so
long as it does so, nothing herein contained shall prevent the Distributor
from entering into similar arrangements with other funds and to engage in
other activities. The Fund reserves the right to issue shares in
connection with any merger or consolidation of the Fund with any other
investment company or any personal holding company or in connection with
offers of exchange exempted from Section 11(a) of the Investment Company
Act of 1940.
FIFTH: Upon a receipt by the Fund at its principal place of business
or other place designated by the Fund of an order from the Distributor,
together with delivery instructions, the Fund shall, as promptly as
practicable, cause the shareholder's account or certificates for the shares
called for in such order to be credited or delivered in such amount and in
such names as shall be specified by the Distributor, against payment
therefor in such manner as may be acceptable to the Fund.
SIXTH: All sales literature and advertisements used by the
Distributor in connection with sales of the shares of the Fund shall be
subject to the approval of the Fund. The Fund authorizes the Distributor
in connection with the sale or arranging for the sales of its shares to
give only such information and to make only such statements or
representations as are contained in the current prospectus and statement
of additional information or in sales literature or advertisements approved
by the Fund or in such financial statements and reports as are furnished
to the Distributor pursuant to this Agreement. The Fund shall not be
responsible in any way for any information, statements or representatives
given or made by the Distributor or its representatives or agents other
than such information, statements or representations contained in the then
current prospectus and statement of additional information or other
financial statements of the Fund.
SEVENTH: The Distributor as agent of the Fund is authorized, subject
to the direction of the Fund, to accept shares for redemption at their net
asset value, determined as prescribed in the then current prospectus of the
Fund. The Fund shall reimburse the Distributor monthly for its out-of-pocket
expenses reasonably incurred for carrying out the foregoing authorization,
but the Distributor shall not be entitled to any commissions or other
compensation in respect to such redemptions.
EIGHTH: The Fund shall bear:
(A) the expenses of qualification of the shares for sale in
connection with such public offerings in such states as shall be selected
by the Distributor and of continuing the qualification continued; and
(B) all legal expenses in connection with the foregoing.
NINTH: The Distributor shall bear:
(A) the expenses of printing and distributing prospectuses and
statements of additional information (other than those prospectuses and
statements of additional information required by applicable laws and
regulations to be distributed to the Fund's shareholders by the Fund) and
any other promotional or sales literature which are used by the Distributor
or furnished by the Distributor to purchasers or dealers in connection with
the Distributor's activities pursuant to this Agreement;
(B) expenses of any advertising used by the Distributor in connection
with such public offering; and
(C) all legal expenses in connection with the foregoing.
TENTH: The Distributor will accept orders for shares of the Fund
only to the extent of purchase orders actually received and not in excess
of such orders, and it will not avail itself of any opportunity of making
a profit by expediting or withholding orders.
ELEVENTH: The Fund shall keep the Distributor fully informed with
regard to its affairs, shall furnish the Distributor with a certified copy
of all financial statements, and a signed copy of each report, prepared by
independent public accountants, and with such reasonable number of printed
copies of each semi-annual and annual report of the Fund as the Distributor
may request, and shall cooperate fully in the efforts of the Distributor
to sell and arrange for the sale of its shares and in the performance by
the Distributor of all its duties under the Agreement.
TWELFTH: The Fund agrees to register, from time to time as
necessary, additional shares with the Securities and Exchange Commission,
state and other regulatory bodies and to pay the related filing fees
therefor and to file such amendments, reports and other documents as may
be necessary in order that there may be no untrue statement of a material
fact in the Registration Statement or prospectus or necessary in order that
there may be no omission to state a material fact therein necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. As used in this Agreement, the term
"Registration Statement" shall mean from time to time the Registration
Statement most recently filed by the Fund with the Securities and Exchange
Commission and effective under the Securities Act of 1933, as amended, as
such Registration Statement is amended at such time, and the terms
"Prospectus" shall mean for the purposes of this Agreement from time to
time the form of prospectus and statement of additional information
authorized by the Fund for use by Distributor and by dealers.
THIRTEENTH:
(A) The Fund and Distributor shall each comply with all applicable
provisions of the Investment Company Act of 1940, the Securities Act of
1933, and the rules and regulations of the National Association of
Securities Dealers, Inc. and of all other Federal and State laws, rules and
regulations governing the issuance and sale of shares of the Fund.
(B) In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the
part of the Distributor, the Fund agrees to indemnify the Distributor and
any controlling person of the Distributor against any and all claims,
demands, liabilities and expenses including reasonable costs of any alleged
litigation which the Distributor may incur under the Securities Act of
1933, or common law on otherwise, arising out of or based upon any alleged
untrue statement of a material fact contained in any registration
statement, statement of additional information or prospectus of the Fund,
or any omission to state a material fact therein, the omission of which
makes any statement contained therein misleading, unless such statement or
omission was made in reliance upon, and in conformity with written
information furnished to the Fund in connection with written information
furnished to the Fund in connection therewith by or on behalf of the
Distributor. The Distributor agrees to indemnify the Fund against any and
all claims, demands, liabilities and expenses which the Fund may incur
arising out of or based upon any act or deed of sales representatives of
the Distributor which is outside the scope of their authority under this
Agreement.
(C) The Distributor agrees to indemnify the Fund against any and all
claims, demands, liabilities and expenses which the Fund may incur under
the Securities Act of 1933, or common law or otherwise, arising out of or
based upon any alleged untrue statement of material fact contained in any
registration statement, statement of additional information or prospectus
of the Fund, relating to the Fund, or any omission to state a material fact
therein if such statement or omission was made in reliance upon, and in
conformity with, written information furnished to the Fund in connection
therewith by or on behalf of the Distributor.
FOURTEENTH: Nothing herein contained shall require the Fund to take
any action contrary to any provision of its Declaration of Trust or to any
applicable statute or regulation.
FIFTEENTH: This Agreement has been approved by the Trustees of the
Fund and shall become effective at the close of business on the date
hereof. This Agreement shall continue in force and effect for successive
annual periods, provided that such continuance is specifically approved at
least annually (a) (i) by the Board of Trustees of the Fund, or (ii) by
vote of a majority of the Fund's outstanding voting securities (as defined
in Section 2 (a) (42) of the Investment Company Act of 1940), and (b) by
vote of majority of the Fund's Trustees who are not interested persons (as
defined in Section 2 (a) (19) of the Investment Company Act of 1940) of the
Distributor by votes cast in person at a meeting called for such purposes.
SIXTEENTH: The Distributor, as the owner of the registered service
mark "Lexington" (registration number 836-088), hereby sublicenses and
authorizes the Fund to include the word "Lexington" as part of its
corporate name, subject, however, to revocation by the Distributor in the
event that the Fund ceases to engage the Distributor or affiliates of the
Distributor as investment advisor or distributor. The Fund agrees upon
demand of the Distributor to change its corporate name to delete the word
"Lexington" therefrom.
SEVENTEENTH:
(A) This Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Board of Trustees of the Fund or
by vote of a majority of the outstanding voting securities of the Fund, or
by the Distributor, on sixty (60) days written notice of the other party.
(B) This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" for this purpose having the meaning
defined in Section 2(a)(4) of the Investment Company Act of 1940.
EIGHTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed, postage paid, to the other party at
such address as such other party may designate for the receipt of such
notices. Until further notice to the other party, it is agreed that the
address of the Fund shall be Park 80 West, Plaza Two, Saddle Brook, New
Jersey and Distributor shall be Park 80 West, Plaza Two, Saddle Brook,
New Jersey.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.
LEXINGTON NATURAL RESOURCES TRUST
Attest: By
_________________________
_______________________
LEXINGTON FUNDS DISTRIBUTOR, INC.
Attest: By
_________________________
_______________________
Kramer, Levin, Naftalis & Frankel
9 1 9 T H I R D A V E N U E
NEW YORK, N.Y. 10022 3852
(212) 715 9100
FAX
(212) 715-8000
______
WRITER'S DIRECT NUMBER
(212) 715-9100
April 9, 1997
Lexington Natural Resources Trust
Park 80 West Plaza Two
Saddle Brook, New Jersey 07662
Re: Lexington Natural Resources Trust
Park 80 West Plaza Two
Saddle Brook, New Jersey 07662
Gentlemen:
We hereby consent to the reference to our firm as counsel in the
Post-Effective Amendment to the Registration Statement on Form N-1A.
Very truly yours,
/s/Kramer, Levin, Naftalis & Frankel
KPMG Peat Marwick LLP
345 Park Avenue
New York, NY 10154
Independent Auditors' Consent
To the Board of Trustees and Shareholders
Lexington Natural Resources Trust:
We consent to the use of our report dated February 10, 1997 included in the
Registration Statement on Form N-1A and to the references to our firm under
the headings "Financial Highlights" and "Counsel and Independent Auditors"
in the Prospectus.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
New York, New York
April 10, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
The Schedule contains summary financial information extracted from year-end
audited financial statements dated December 31, 1996 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 32,062,071
<INVESTMENTS-AT-VALUE> 37,794,514
<RECEIVABLES> 37,938,284
<ASSETS-OTHER> 61,958
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 38,000,242
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 66,306
<TOTAL-LIABILITIES> 66,306
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 30,298,823
<SHARES-COMMON-STOCK> 2,653,910
<SHARES-COMMON-PRIOR> 1,500,607
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,902,670
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,732,443
<NET-ASSETS> 37,933,936
<DIVIDEND-INCOME> 406,922
<INTEREST-INCOME> 75,232
<OTHER-INCOME> (9,421)
<EXPENSES-NET> 369,748
<NET-INVESTMENT-INCOME> 102,985
<REALIZED-GAINS-CURRENT> 2,033,892
<APPREC-INCREASE-CURRENT> 4,072,007
<NET-CHANGE-FROM-OPS> 6,208,884
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (125,875)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,945,915
<NUMBER-OF-SHARES-REDEEMED> (801,456)
<SHARES-REINVESTED> 8,844
<NET-CHANGE-IN-ASSETS> 14,895,680
<ACCUMULATED-NII-PRIOR> 11,627
<ACCUMULATED-GAINS-PRIOR> (119,959)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 260,014
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 369,748
<AVERAGE-NET-ASSETS> 26,001,812
<PER-SHARE-NAV-BEGIN> 11.30
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 2.99
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.29
<EXPENSE-RATIO> 1.42
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
