-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, EshCYPHfWRBwzoGFKp7Rza3TzYWWkqWR2iDzO/gvtn2pHJ+R89EoPlTObtONn71F qLXyAoRGBY4GV59HhJex2Q== 0000024924-95-000003.txt : 19950517 0000024924-95-000003.hdr.sgml : 19950516 ACCESSION NUMBER: 0000024924-95-000003 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950512 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEXINGTON CORPORATE LEADERS TRUST FUND CENTRAL INDEX KEY: 0000024924 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 136061925 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 002-10694 FILM NUMBER: 95537537 BUSINESS ADDRESS: STREET 1: PARK 80 W PLZ TWO STREET 2: PO BOX 1515 CITY: SADDLE BROOK STATE: NJ ZIP: 07622 BUSINESS PHONE: 2018457300 MAIL ADDRESS: STREET 1: PARK 80 WEST PLAZA TWO CITY: SADDLE BROOK STATE: NJ ZIP: 07663 FORMER COMPANY: FORMER CONFORMED NAME: CORPORATE LEADERS TRUST FUND DATE OF NAME CHANGE: 19890306 497 1 Prospectus dated May 1, 1995 LEXINGTON CORPORATE LEADERS TRUST FUND PARK 80 WEST, PLAZA TWO SADDLE BROOK, NEW JERSEY 07663 Shareholder Services: 1-800-526-0056 24 Hour Account Information: 1-800-526-0052 - -------------------------------------------------------------------------------- Lexington Corporate Leaders Trust Fund (the "Trust") was created in 1935 with the objective of seeking long term capital growth and income through investment in an equal number of shares of the common stocks of a fixed list of American blue chip corporations. Currently, the Trust is invested in twenty-three such corporations including Eastman Kodak, General Electric, Mobil, Sears Roebuck and Travelers. Investments in these corporations, while having potential for long term capital growth and income, may be considered conservative investments. The value of participations of the Trust will fluctuate with the market value of the underlying portfolio securities. The minimum initial purchase requirement is $1,000 and additional investments must be at least $50. Participations are sold without a sales or redemption charge. - -------------------------------------------------------------------------------- Sponsor: Trustee: Lexington Management Corporation State Street Bank and Trust Company Park 80 West, Plaza Two Mutual Fund Services Area Saddle Brook, New Jersey 07663 Lexington Corporate Leaders Trust Fund 225 Franklin Street Distributor: Boston, Massachusetts 02110 Lexington Funds Distributor, Inc. Park 80 West, Plaza Two Saddle Brook, New Jersey 07663 Participations are not deposits or obligations of (or endorsed or guaranteed by) any bank, nor are they federally insured or otherwise protected by the Federal Deposit Insurance Corporation ("FDIC"), the Federal Reserve Board or any other agency. Investing in the Trust involves investment risks, including the possible loss of principal, and their value and return will fluctuate. - -------------------------------------------------------------------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COM- MISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - -------------------------------------------------------------------------------- Read and Retain this Prospectus for Future Reference. HIGHLIGHTS The Trust and Its Objective The Trust was created in 1935 with the objective of seeking long term capital growth and income through investment in an equal number of shares of common stock of a fixed list of American blue chip corporations. Currently the Trust is invested in twenty-three such corporations. There can be no assurance that the Trust's objective will be achieved. See "Description of the Trust" herein. Public Offering Price The initial purchase requirement for an investment in the Trust is $1,000 and additional investments must be at least $50. Investors receive a fractional undivided interest in and ownership of the Trust Fund and Distributive Fund described below which is called a participation. Participations are offered at a price equal to the net asset value next determined after an order is received. Special Considerations The value of a participation fluctuates with the market value of the underlying portfolio securities of the Trust. The dividend income, if any, from the portfolio securities is subject to fluctuation which in turn will affect the amounts of distributions made to participants. An investor in the Trust has no assurance against loss in a declining market and redemption at a time when the market value of the participations is less than their cost, will result in a loss to the investor. Semi-Annual Distributions Semi-annual distributions on June 30 and December 31 of each year (Distribution Date) will be reinvested at net asset value in additional participations of the Trust unless the participant notifies the Trustee to pay such distributions in cash. Taxation For Federal income tax purposes, (1) the Trust will be treated as a fixed investment trust and will not be subject to Federal income tax, (2) each participant will be treated as the owner of his pro rata portion of the common stock of the corporations held by the Trust, (3) each participant will be required to include in his gross income his pro rata portion of the dividends and interest received by the Trust (including the amounts of such dividends and interest that are not distributed to participants but are used to pay the fees and expenses of the Trust), at the time such dividends and interest are received by the Trust, not at the later time such dividends and interests are distributed to participants or reinvested in additional participations, and (4) each individual participant who itemizes deductions may deduct his pro rata portion of the fees and expenses of the Trust only to the extent such amount, together with his other miscellaneous itemized deductions, exceeds 2% of his adjusted gross income. See "Taxation" herein. The Indenture The Amended and Restated Indenture is effective as of November 14, 1989, as amended on April 23, 1993 (the "Indenture"). Both the Indenture and the Trust will terminate on November 30, 2100. DESCRIPTION OF THE TRUST Corporate Leaders Trust Fund was created under New York Law by an Indenture dated November 18, 1935, as amended and supplemented, between Empire Trust Company (now The Bank of New York by merger) as Trustee, and Corporate Leaders of America, Inc., as Sponsor. On October 29, 1971, Corporate Leaders of America, Inc. was merged into Piedmont Capital Corporation, which designated Manlex Corporation as Sponsor of the Trust on March 25, 1981. On October 31, 1988 holders of Corporate Leaders Trust Fund Certificates Series B voted to approve an Amended and Restated Indenture which, among other things, designated Lexington Management Corporation, the parent company of Manlex Corporation, as Sponsor, and changed the name to Lexington Corporate Leaders Trust Fund (Federal I.D. #13-6061925). Holders of Corporate Leaders Trust Fund Certificates Series A continue to be governed by the initial Indenture. This Prospectus pertains solely to Lexington Corporate Leaders Trust Fund Certificates Series B (herein referred to as the "Trust"). All discussions herein of articles and sections of the Indenture refer to the Amended and Restated Indenture (the "Indenture"). The Trust is comprised of a Trust Fund and a Distributive Fund. The Trust Fund is composed of stock units, each unit consisting of one share of common stock of each of the twenty-four American corporations and such cash as may be available for the purchase of stock units. Cash received on sales of participations, (excluding the portion thereof, if any, attributable to the value of, and therefore 2 deposited in, the Distributive Fund) including distributions by the Trust which are reinvested in additional participations under the Distribution Reinvestment Program described herein, is held in the Trust Fund without interest until receipt of sufficient cash to purchase at least one hundred stock units. To the extent monies remain uninvested in the Trust, the Trustee will derive a benefit therefrom. All dividends and any other cash distributions received by the Trust with respect to the common stock held in the Trust Fund are deposited in the Distributive Fund. Any non-cash distributions received by the Trust with respect to the common stock held in the Trust Fund are sold by the Trustee and the proceeds of sale are deposited in the Distributive Fund. The Trustee may invest the funds deposited in the Distributive Fund in debt obligations issued or guaranteed by the United States Government, its agencies or instrumentalities, or in repurchase agreements collateralized by such United States Government obligations, which mature prior, and as close as practicable, to the next Distribution Date. The interest earned on such investments is also deposited in the Distributive Fund. Fees and expenses of the Trust are paid from the Distributive Fund. The Trustee may from time to time set aside out of the Distributive Fund a reserve for payments of taxes or other governmental charges. On each Distribution Date, the Trustee uses the money in the Distributive Fund to purchase additional participations for participants under the Distribution Reinvestment Program described herein, unless the participant has elected to receive his distribution in cash. The Trust will enter into repurchase agreements only with commercial banks and dealers in U.S. government securities. Repurchase agreements when entered into with dealers, will be fully collateralized including the interest earned thereon during the entire term of the agreement. If the institution defaults on the repurchase agreement, the Trust will retain possession of the underlying securities. In addition, if bankruptcy proceedings are commenced with respect to the seller, realization on the collateral by the Trust may be delayed or limited and the Trust may incur additional costs. In such case the Trust will be subject to risks associated with changes in the market value of the collateral securities. The Trust is invested in an equal number of shares of the common stock of a fixed list of twenty-three American corporations. The Trust's portfolio investments are not managed and are expected to remain fixed. Of the securities held on December 31, 1994, 18.0% were in consumer products, 21.4% were in international oil companies and 9.7% were in chemical and fertilizer companies. A complete list of the securities is contained in the financial statements included herein. The value of a participation in the Trust fluctuates with the market value of the underlying common stock held by the Trust. The dividend income, if any, from the common stocks is subject to fluctuation, which, in turn will affect the amounts of distributions made to participants. The Sponsor may direct the Trustee to sell the shares of common stock of any of the twenty-three corporations if (i) the corporation has failed to declare or pay dividends on the common stock ; (ii) a materially adverse legal proceeding has been instituted which affects the declaration or payment of dividends; (iii) a breach of covenant or warranty exists which may materially affect the payment of dividends; (iv) a default in payment of principal or income on any other outstanding securities of the corporation occurs which may affect the payment of dividends; or (v) the common stock ceased to be listed on the New York Stock Exchange and after fifteen days has not been reinstated. The proceeds of any such sale shall be deposited in the Distributive Fund. ------------------------------ 3 SELECTED FINANCIAL INFORMATION The following table of selected financial information has been audited by McGladrey & Pullen, LLP independent certified public accountants, whose report thereon appears elsewhere in this prospectus.
Thirteen Months Per participation operating Years Ended December 31, Ended Years Ended November 30, performance ---------------------------------------------------- December ------------------------ (for a participation outstanding 1994 1993 1992 1991 1990 1989 31, 1988 1987 1986 1985 throughout the period) ---- ---- ---- ---- ---- ----- -------- ---- ---- ---- Net asset value, beginning year ....$12.78 $11.62 $11.52 $10.53 $13.68 $12.00 $10.93 $14.26 $12.71 $11.40 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Income from investment operations: Net investment income ...............31 .33 .36 .39 .43 .46 .77 .55 .64 .63 Net realized and unrealized gain (loss) on investments ...........(.45) 1.71 .70 1.64 (.89) 3.1 2.27 (1.31) 3.70 2.99 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total from investment operations ....(.14) 2.04 1.06 2.03 (.46) 3.64 3.04 (.76) 4.34 3.62 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income (.32) (.33) (.35) (.40) (.43) (.46) (.82) (.55) (.65) (.63) Distributions from net realized gains(.90) (.28) (.35) (.28) (1.29) (1.00) (.58) (.96) (1.04) (.77) Distributions from income and realized gains included in terminations ...(.01) - (.01) - (.01) (.02) (.02) (.02) (.03) (.03) Distributions from capital ..........(.90) (.27) (.25) (.36) (.96) (.48) (.55) (1.04) (1.07) (.88) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total distributions .............. (2.13) (.88) (.96) (1.04) (2.69) (1.96) (1.97) (2.57) (2.79) (2.31) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Change in net asset value for the year (2.27) 1.16 .10 .99 (3.15) 1.68 1.07 (3.33) 1.55 1.31 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net asset value at end of year .......$10.51 $12.78 $11.62 $11.52 $10.53 $13.68 $12.00 $10.93 $14.26 $12.71 ======= ====== ====== ====== ====== ====== ====== ====== ====== ====== Total Return ........................(0.77%) 17.57% 9.63% 19.41% (4.20%) 30.34% 28.21% (7.81%) 34.27% 31.53% Ratio/Supplemental Data Net Assets, end of year (000) ........$156,286 $147,181 $105,712 $98,104 $85,961 $94,379 $77,868 $65,967 $78,714 $63,423 Ratios to average net asset of: Expenses .............................. .62% .57% .60% .67% .67% .72% .26%* .08% .08% .10% Net investment income ................. 2.84% 2.78% 3.16% 3.46% 3.57% 3.34% 5.88%* 4.01% 4.47% 4.85%
*Annualized HOW TO PURCHASE PARTICIPATIONS Initial Investment-Minimum $1,000. By Mail: Send a check payable to Lexington Corporate Leaders Trust Fund, along with a completed New Account Application to State Street Bank and Trust Company (the "Agent"). See the back cover of this prospectus for the Agent's address. Subsequent Investments-Minimum $50. By Mail: Send a check payable to Lexington Corporate Leaders Trust Fund, to the Agent, accompanied by either the detachable form which is part of the confirmation of a prior transaction or a letter indicating the dollar amount of the investment and identifying the Trust, account number and registration. Broker-Dealers: You may invest in participations of the Trust through broker-dealers who are members of the National Association of Securities Dealers, Inc., and other financial institutions and who have selling agreements with Lexington Funds Distributor, Inc. Broker-dealers and financial institutions who process such purchase and sale transactions for their customers may charge a transaction fee for these services. The fee may be avoided by purchasing participations directly from the Trust. The Open Account: By investing in the Trust, a shareholder appoints the Agent, as his agent, to establish an open account to which all participations purchased, including additional participations purchased under the Distribution Reinvestment Program, will be credited. Participation certificates will be issued for full participations only when requested in writing. Unless payment for participations is made by certified or cashier's check or federal funds wire, certificates will not be issued for 30 days. In order to facilitate redemptions and transfers, most participation holders elect not to receive certificates. 4 After an Open Account is established, payments can be provided for by "Lex-O-Matic" or other authorized automatic bank check program accounts (checks drawn on the investor's bank periodically for investment in the Trust). Automatic Investing Plan with "Lex-O-Matic". A shareholder may arrange to make additional purchases of shares automatically on a monthly or quarterly basis. The investments of $50 or more are automatically deducted from a checking account on or about the 15th day of each month. The institution must be an Automated Clearing House (ACH) member. Should an order to purchase shares of a fund be cancelled because your automated transfer does not clear, you will be responsible for any resulting loss incurred by that fund. The shareholder reserves the right to discontinue the Lex-O-Matic program provided written notice is given ten days prior to the scheduled investment date. Further information regarding this service can be obtained from Lexington by calling 1-800-526-0056. On payroll deduction accounts administered by an employer and on payments into qualified pension or profit sharing plans and other continuing purchase programs, there are no minimum purchase requirements. Terms of Offering: If an order to purchase participations is cancelled because the investor's check does not clear, the purchaser will be responsible for any loss incurred by the Trust. To recover any such loss the Trust reserves the right to redeem participations owned by the purchaser, and may prohibit or restrict the purchaser in placing future orders in any of the Lexington Funds. The Trust reserves the right to reject any order, and to waive or lower the investment minimums with respect to any person or class of persons, including participation holders of the Trust's special investment programs. An order to purchase participations is not binding on the Trust until it has been confirmed by the Agent. Shareholder Servicing Agents: The Trust may enter into Shareholder Servicing Agreements with one or more Shareholder Servicing Agents. The Shareholder Servicing Agent may, as agent for its customers, among other things: answer customer inquiries regarding account status, account history and purchase and redemption procedures; assist shareholders in designating and changing dividend options, account designations and addresses; provide necessary personnel and facilities to establish and maintain shareholder accounts and records; assist in processing purchase and redemption transactions; arrange for the wiring of funds; transmit and receive funds in connection with customer orders to purchase or redeem shares; verify and guarantee shareholder signatures in connection with redemption orders and transfers and changes in shareholder-designated accounts; furnish monthly and year-end statements and confirmations of purchases and redemptions; transmit, on behalf of the Trust, proxy statements, annual reports, updated prospectuses and other communications to shareholders of the Trust; receive, tabulate and transmit to the Trust proxies executed by shareholders with respect to meetings of shareholders of the Trust; and provide such other related services as the Trust or a shareholder may request. For these services, each Shareholder Servicing Agent receives fees, which may be paid periodically, provided that such fees will not exceed, on an annual basis, 0.25% of the average daily net assets of the Trust represented by participations owned during the period for which payment is made. LMC, at no cost to the Trust, may pay to Shareholder Servicing Agents additional amounts from its past profits. Each Shareholder Servicing Agent may, from time to time, voluntarily waive all or a portion of the fees payable to it. Account Statements: The Agent will send participation holders either purchasing or redeeming participations of the Trust, a confirmation of the transaction indicating the date the purchase or redemption was accepted, the number of participations purchased or redeemed, the purchase or redemption price per participation, and the amount purchased or redemption proceeds. A statement is also sent to participation holders whenever a distribution is paid, or when a change in the registration, address, or dividend option occurs. Participation holders are urged to retain their account statements for tax purposes. HOW TO REDEEM PARTICIPATIONS By Mail: Send to the Agent (see the back cover of this prospectus for the Agent's address): (1) a written request for redemption, signed by each registered owner exactly as the participations are registered including the name of the Trust, account number and exact registration; (2) participation certificates for any participations to be redeemed which are held by the participation holder; (3) signature guarantees, when required, and (4) the additional documents required for redemptions by corporations, executors, administrators, trustees, and guardians. Redemptions by mail will not become effective until all documents in proper form have been received by the Agent. If a participation holder has any questions regarding the requirements for redeeming 5 participations, he should call the Trust at the toll free number on the back cover prior to submitting a redemption request. If a redemption request is sent to the Trust in New Jersey, it will be forwarded to the Agent and the effective date of redemption will be the date received by the Agent. Checks for redemption proceeds will normally be mailed within seven days, but will not be mailed until all checks in payment for the participations to be redeemed have been cleared. Signature Guarantee: Signature guarantees are required in connection with (a) redemptions by mail involving $10,000 or more; (b) all redemptions by mail, regardless of the amount involved, when the proceeds are to be paid to someone other than the registered owners; (c) changes in instructions as to where the proceeds of redemptions are to be sent, and (d) participation transfer requests. The Agent requires that the guarantor be either a commercial bank which is a member of the Federal Deposit Insurance Corporation, a trust company, a savings and loan association, a savings bank, a credit union, a member firm of a domestic stock exchange, or a foreign branch of any of the foregoing. A notary public is not an acceptable guarantor. With respect to redemption requests submitted by mail, the signature guarantees must appear either: (a) on the written request for redemption, (b) on a separate instrument of assignment ("stock power") specifying the total number of participations to be redeemed, or (c) on all participation certificates tendered for redemption and, if participations held by the Agent are also being redeemed, on the letter or stock power. Redemption Price: The redemption price will be the net asset value per participation of the Trust next determined after receipt by the Agent of a redemption request in proper form . The redemption price per participation is computed on (i) any Trust business day, which is each day on which the New York Stock Exchange, the Federal Reserve Bank of New York and the Trustee are open for business and on such other days as there is sufficient trading in the Trust's securities to materially affect net asset value per participation except for certain national holidays. The calculation is made by (a) adding: (i) the aggregate value of the portfolio securities; (ii) available cash; (iii) amounts in the Distributive Fund, including dividends on the portfolio securities and interest on the investment of monies in the Distributive Fund; and (iv) any other assets of the Trust and (b) deducting: (i) taxes and other governmental charges; (ii) fees and expenses of the Trust; (iii) cash allocated for distribution to participants of record as of a date prior to the evaluation; and (iv) any other liabilities of the Trust. Participations will be redeemed in cash from the Trust Fund and the Distributive Fund at a price equal to the next determined participation value following receipt of an appropriate request multiplied by the number of participations being redeemed and subject to payment by the participant of any tax or other governmental charge. If there is insufficient cash in the Trust Fund to pay the portion of the redemption price attributable thereto, the Trustee shall sell stock units. Sales of such securities will be at the best price obtainable subject to any minimum value limitations on sales specified by the Sponsor. A security listed or traded on a recognized stock exchange is valued at its last sale price prior to the time when assets are valued on the principal exchange on which the security is traded. If no sale is reported at that time, the mean between the current bid and asked price will be used. All other securities for which over-the-counter market quotations are readily available are valued at the mean between the last current bid and asked price. Short-term securities having maturity of 60 days or less are valued at cost, when it is determined by the Trustee that amortized cost reflects the fair value of such securities. Securities for which market quotations are not readily available and other assets are valued at fair value as determined in good faith by the Trustee. The Trustee may, in its discretion, or when directed by the Sponsor in writing, suspend the right of redemption or postpone the date of payment of the redemption price for more than seven days (a) for any period during which the New York Stock Exchange is closed or the Securities and Exchange Commission ("SEC") determines that trading on the Exchange is restricted, (b) when there is an emergency as determined by the SEC as a result of which it is not reasonably practicable for the Trust to dispose of securities owned by it or to determine fairly the value of its net assets, or (c) for such other periods as the SEC may by order permit for the protection of participants. Due to the proportionately high cost of maintaining smaller accounts, the Trust reserves the right to redeem all participations in an account with a value of less than $500 other than as a result of a change in net asset value and mail the proceeds to the participant. Participants will be notified before these redemptions are to be made and will have thirty (30) days to make an additional investment to bring their accounts up to the required minimum. 6 SHAREHOLDER SERVICES Transfer Participations may be transferred to another owner. A signature guarantee of the registered participant is required on the letter of instruction or other instrument of assignment. Systematic Withdrawal Plan Participants may elect to withdraw cash in fixed amounts from their accounts at regular intervals. The minimum investment to establish a Systematic Withdrawal Plan is $10,000. If the proceeds are to be mailed to someone other than the registered owner, a signature guarantee is required. Group Sub-Accounting: To minimize recordkeeping by fiduciaries, corporations and certain other investors, the minimum initial investment may be waived. EXCHANGE PRIVILEGE Participations may be exchanged for shares of the following funds managed by the Sponsor, Lexington Management Corporation, (the "Lexington Funds") on the basis of relative net asset value per share at the time of the exchange. In the event shares of one or more of these funds being exchanged by a single investor have a value in excess of $500,000, participations will not be purchased until the fifth business day following the redemption of the shares being exchanged in order to enable the redeeming fund to utilize normal securities settlement procedures in transferring the proceeds of the redemption to the Trust. Exchanges may not be made until all checks in payment for participations to be exchanged have been cleared. The Lexington Funds currently available for exchange are: LEXINGTON GLOBAL FUND, INC.* (NASDAQ Symbol: LXGLX)/Seeks long-term growth of capital primarily through investment in common stocks of companies domiciled in foreign countries and the United States. LEXINGTON WORLDWIDE EMERGING MARKETS FUND, INC.* (NASDAQ Symbol: LEXGX)/Seeks long-term growth of capital primarily through investment in equity securities of companies domiciled in, or doing business in, emerging countries. LEXINGTON INTERNATIONAL FUND, INC.* (NASDAQ Symbol: LEXIX)/Seeks long term growth of capital through investment in common stocks of companies domiciled in foreign countries. Shares of the Fund are not presently available for sale in Vermont. LEXINGTON CORPORATE LEADERS TRUST FUND (NASDAQ Symbol: LEXCX)/Seeks long-term capital growth and income through investment in an equal number of shares of the common stocks of a fixed list of American blue chip corporations. LEXINGTON GROWTH AND INCOME FUND, INC. (NASDAQ Symbol: LEXRX)/Seeks long-term capital appreciation through investments in stocks of large, ably managed and well financed companies. Income is a secondary objective. Shares are not presently available for sale in New Hampshire. LEXINGTON GOLDFUND, INC.* (NASDAQ Symbol: LEXMX)/Seeks capital appreciation and such hedge against loss of buying power as may be obtained through investment in gold bullion and equity securities of companies engaged in mining or processing gold throughout the world. Shares are not presently available for sale in Wisconsin. LEXINGTON CONVERTIBLE SECURITIES FUND* (NASDAQ Symbol: CNCVX)/Seeks total return by providing capital appreciation, current income and conservation of capital through investments in a diversified portfolio of securities convertible into shares of common stock. Shares of the Fund are not presently available for sale in Vermont. LEXINGTON GNMA INCOME FUND, INC. (NASDAQ Symbol: LEXNX)/Seeks a high level of current income, consistent with liquidity and safety of principal, through investment primarily in mortgage-backed GNMA Certificates. LEXINGTON RAMIREZ GLOBAL INCOME FUND* (NASDAQ Symbol: LEBDX)/Seeks high current income by investing in a combination of foreign and domestic high-yield, lower rated debt securities. Capital appreciation is a secondary objective. 7 LEXINGTON SHORT-INTERMEDIATE GOVERNMENT SECURITIES FUND, INC.* (NASDAQ Symbol: LSGXX)/Seeks current income as is consistent with preservation of capital by investing in a portfolio of U.S. Government securities. LEXINGTON MONEY MARKET TRUST (NASDAQ Symbol: LMMXX)/Seeks a high level of current income consistent with preservation of capital and liquidity through investments in interest bearing short term money market instruments. LEXINGTON TAX FREE MONEY FUND, INC. (NASDAQ Symbol: LTFXX)/Seeks current income exempt from Federal income taxes while maintaining liquidity and stability of principal through investment in short term municipal securities. *These Funds are not available for exchange until exemptive relief is received from the SEC. The Exchange Privilege enables a participant to acquire another Lexington Fund with a different investment objective when the participant believes that a shift between funds is an appropriate investment decision. Participants contemplating an exchange should obtain and review the prospectus of the Fund to be acquired. If an exchange involves investing in a Lexington Fund not already owned and a new account has to be established, the dollar amount exchanged must meet the minimum initial investment of the Fund being purchased. If, however, an account already exists in the Fund being bought, there is a $500 minimum exchange required. Participants must provide the account number of the existing account. Any exchange between Funds is, in effect, a redemption in one Fund and a purchase in the other Fund. Participants should consider the possible tax effects of an exchange. Telephone Exchange Provisions Exchange instructions may be given in writing or by telephone. Telephone exchanges may only be made if a Telephone Authorization Form has been previously executed and filed with the Sponsor. Telephone exchanges are permitted only after a minimum of seven (7) days have elapsed from the date of a previous exchange. Exchanges may not be made until all checks in payment for participations to be exchanged have been cleared. Telephonic exchanges can only involve participants registered on the books of the Trustee; participations held in certificate form cannot be included. However, outstanding certificates can be returned to the Trustee and qualify for these services. Any new account established with the same registration will also have the privileges of exchange by telephone in the Lexington Funds. All accounts involved in a telephonic exchange must have the same registration and dividend option as the account from which the participations were transferred and will also have the privilege of exchange by telephone in the Lexington Funds in which these services are available. By checking the box on the Purchase Application authorizing telephone exchange services, a participant constitutes and appoints Lexington Funds Distributor, Inc. ("LFD"), distributor of the Lexington Funds, as the true and lawful attorney to surrender for redemption or exchange any and all non-certificate shares held by the Trustee in account(s) designated, or in any other account with the Lexington Funds, present or future which has the identical registration with full power of substitution in the premises and authorizes and directs LFD to act upon any instruction from any person by telephone for exchange of shares held in any of these accounts, to purchase shares of any other Lexington Fund that is available, provided the registration and mailing address of the shares to be purchased are identical to the shares being redeemed, and agrees that neither LFD, the Trustee, the Trust or the Lexington Fund(s) will be liable for any loss, expense or cost arising out of any requests effected in accordance with this authorization which would include requests effected by imposters or persons otherwise unauthorized to act on behalf of the account. LFD, the Agent and the Fund, will employ reasonable procedures to confirm that instructions communicated by telephone are genuine and if they do not employ reasonable procedures they may be liable for any losses due to unauthorized or fraudulent instructions. The following identification procedures may include, but are not limited to, the following: account number, registration and address, taxpayer identification number and other information particular to the account. In addition, all exchange transactions will take place on recorded telephone lines and each transaction will be confirmed in writing by the Fund. LFD reserves the right to cease to act as agent subject to the above appointment upon thirty (30) days' written notice to the address of record. If the participant is an entity other than an individual, such entity may be required to certify that certain persons have been duly elected and are now legally holding the titles given and that the said corporation, trust, unincorporated association, etc., is duly organized and existing and has the power to take action called for by this continuing authorization. 8 Exchange Authorization Forms, telephone authorization forms and prospectuses of the other Lexington Funds may be obtained from LFD. LFD has made arrangements with certain dealers to accept instructions by telephone to exchange participations for shares of one of the other Lexington Funds at net asset value as described above. Under this procedure, the dealer must agree to indemnify LFD and the Lexington Funds from any loss or liability that any of them might incur as a result of the acceptance of such telephone exchange orders. A properly signed exchange application must be received by the Distributor within five (5) days of the exchange request. In each such exchange, the registration of the shares of the Fund being acquired must be identical to the registration of the participations of the Fund being exchanged. Participations in certificate form are not eligible for this type of exchange. LFD reserves the right to reject any telephone exchange request. Any telephone exchange orders so rejected may be processed by mail. Tax Sheltered Retirement Plans The Trust offers a Prototype Pension and Profit Sharing Plan, including a Keogh Plan, IRA's, SEP-IRA Rollover Accounts, 401(k) Salary Reduction Plans, Section 457 Deferred Compensation Plans and 403(b)(7) Plans. Plan support services are available through the Shareholder Services Department of the Sponsor. For further information, call 1-800-526-0056. Distribution Reinvestment Program On June 30 and December 31 of each year, the Distribution Dates, the Trustee will compute to at least two decimal places the amount of the semi-annual distribution per participation for participants of record, and shall use such distributions to purchase additional participations unless the Trustee has been instructed by the participant, in writing, prior to the Distribution Date to pay such distributions in cash. TAX MATTERS The Trust is treated as a fixed investment trust under the Internal Revenue Code of 1986, as amended (the "Code"), and not an association taxable as a corporation. The Trust is also treated as a grantor trust under the Code. As a result, the Trust will not be subject to Federal income taxes. In addition, for Federal income tax purposes, each participant is treated as the owner of his pro rata portion (i.e., the ratio of the number of participations owned by the participant to the total number of participations outstanding) of (i) the common stock of each corporation and any cash held in the Trust Fund and (ii) the securities and cash held in the Distributive Fund. Each participant is treated as receiving his pro rata portion of dividends and any other distributions received by the Trust on the common stock of the corporations held in the Trust Fund and interest received by the Trust from the investment of such dividends (and any other amounts) deposited in the Distributive Fund. Each participant shall include in gross income his pro rata portion of such dividends and interest when such dividends and interest are received by the Trust (or, in the case of an accrual basis participant, as such interest accrues), regardless of when such dividends and interest are distributed by the Trust to participants (or reinvested in additional participations) and regardless of the fact that a portion of such dividends and interest are not distributed to participants (or reinvested in additional participations) but rather are used to pay the fees and expenses of the Trust. A corporate participant will generally be entitled to the 70% dividends-received deduction with respect to the dividends so included in its gross income, subject to various limitations and restrictions imposed by the Code. A corporate participant will also be entitled to a deduction for his pro rata portion of fees and expenses paid by the Trust. An individual participant who itemizes deductions will be entitled to a deduction for his pro rata portion of fees and expenses paid by the Trust only to the extent that such amount, together with the participant's other miscellaneous itemized deductions, exceeds 2% of the participant's adjusted gross income. Further, certain itemized deductions of an individual participant (including any portion of the miscellaneous itemized deductions which exceeds the 2% floor, state and local income and property taxes, home mortgage interest, and charitable contributions) will be reduced (but not by more than 80% thereof) by 3% of the participant's adjusted gross income in excess of $111,800 (for 1994, adjusted for inflation thereafter). 9 The purchase price paid by a participant for his participations (excluding any portion thereof attributable to, and to be deposited in, the Distributive Fund) shall be allocated (based upon relative fair market values) among the participant's pro rata portion of the common stock of each corporation and any cash held in the Trust Fund, in order to determine his tax basis in his pro rata portion of the common stock of each corporation. If the common stock of any of the corporations held in the Trust Fund is sold by the Trust, each participant will be considered to have sold his pro rata portion of the common stock of that corporation and will be considered to have received his pro rata portion of the sale proceeds received by the Trust. If a participant redeems his participations, he will be considered to have sold his pro rata portion of the common stock of each corporation. The redemption price received by the participant (excluding any portion thereof attributable to, and paid out of, the Distributive Fund) shall be allocated (based upon relative fair market values) among his pro rata portion of the common stock of each corporation and any cash held in the Trust Fund. If a participant is considered to have sold his pro rata portion of the common stock of any corporation, he will recognize a capital gain or loss equal to the difference between the amount he is considered to have received with respect thereto and his tax basis therein. Any such capital gain or loss generally will be long-term capital gain or loss if the participant held his participations for more than one year. Under the back-up withholding rules of the Code, certain shareholders may be subject to 31% withholding of federal income tax on distributions and redemption payments made by the Trust. In order to avoid this back-up withholding, a shareholder must provide the Trust with a correct taxpayer identification number (which for most individuals is their Social Security number) or certify that it is a corporation or otherwise exempt from or not subject to back-up withholding. The new account application included with this Prospectus provides for shareholder compliance with these certification requirements. Information concerning the Federal income tax status of distributions will be mailed to participants annually. Prospective participants are urged to consult their own tax advisers as to the tax consequences of an investment in the Trust. INVESTMENT RETURN The Trust may, from time to time, include total return information in advertisements and reports to shareholders. The average annual total return of the Trust for the 1, 5 and 10 years ended December 31, 1994 is set forth in the following table: Average Annual Period Total Return ------ ------------ 1 year ended December 31, 1994 - 0.77% 5 years ended December 31, 1994 + 7.91% 10 years ended December 31, 1994 +14.73% This performance is calculated pursuant to the formula P(1+T)n = ERV (where P = a hypothetical investment of $1,000; T = the average annual total return; n = the number of years and ERV = the ending redeemable value of the hypothetical $1,000 investment). The computation reflects the reinvestment of all dividends and distributions reinvested on participations acquired with the original hypothetical $1,000 investment. Past results are not necessarily representative of future results. Comparative performance information may be used from time to time in advertising or marketing of the Trust's participations, including data from Lipper Analytical Services, Inc., the Dow Jones Industrial Average Index and Standard & Poor's 500 Composite Stock Index. Such comparative performance information will be stated in the same terms in which the comparative data and indices are stated. AMENDMENT AND TERMINATION The Sponsor and Trustee may amend the Indenture without the consent of participants (i) to cure any ambiguity or to correct or supplement any provision contained herein which may be defective or inconsistent; (ii) to change any provision as may be required by the SEC or any successor governmental agency; or (iii) to make any other provisions which do not adversely affect the interest of participants. The Indenture may be amended by the Sponsor and the Trustee with the consent of a majority of the participations entitled to vote. 10 The Trust and Indenture will terminate on November 30, 2100 upon the sale or disposition of the last portfolio security of the Trust unless terminated sooner by written instrument executed by the Sponsor and consented to by participants owning 51% of the then outstanding participations. The Trustee will deliver written notice of any termination to each participant specifying the times at which the participants may surrender their certificates for cancellation. Within a reasonable period of time after the termination, the Trustee will distribute to each participant registered on the Trustee's books in uncertificated form, and to each other participant upon surrender for cancellation of his certificate, after deducting all unpaid expenses, fees, taxes and other governmental charges, the participant's interest in the Distributive Fund (into which had been deposited the proceeds from the sale of the portfolio securities) and furnish to each participant a final account statement. RESIGNATION, REMOVAL AND LIMITATIONS ON LIABILITY OF SPONSOR Sponsor The Sponsor may resign upon written notice to the Trustee. The resignation will not become effective unless the Trustee shall have appointed a successor sponsor to assume, with such compensation as the Trustee may deem desirable, the duties of the resigning Sponsor. If the Sponsor fails to perform its duties for 30 days after notice from the Trustee, or becomes incapable of acting or becomes bankrupt or its affairs are taken over by a public official, then the Sponsor will be automatically discharged. The Sponsor shall be under no liability to the Trust or to the participants for taking any action or for refraining from taking any action in good faith or for errors in judgment or for depreciation or loss incurred by reason of the purchase or sale of any portfolio security. This provision, however, shall not protect the Sponsor in cases of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties. Trustee The Trustee may resign upon written notice to the Sponsor and by mailing a copy of such notice to all participants of record not less than sixty days prior to the effective date of their resignation. The Sponsor shall then use its best efforts to promptly appoint a successor trustee, and if upon resignation of the Trustee no successor has been appointed within thirty days after notification, the Trustee may apply to a court of competent jurisdiction for the appointment of a successor. If, after such an application by the Trustee is made to a court of competent jurisdiction (after November 30, 2015) and the court is unable to appoint a successor trustee, then no earlier than six months after the date of such application, the Trustee may notify each participant and the Sponsor that the Trust shall terminate on a day no earlier than six months from the date of such notice unless a successor trustee is appointed. If the Trustee fails to perform its duties or becomes incapable of acting or becomes bankrupt or a public official takes over its affairs, the Sponsor may remove the Trustee and appoint a successor trustee by written notice to the Trustee. The Trustee shall be under no liability for any action taken in good faith in reliance upon prima facie properly executed documents or for the disposition of monies or portfolio securities. This provision shall not protect the Trustee in cases of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties. The Trustee will not be responsible for the misconduct of any of its agents, attorneys or accountants if they were selected with reasonable care. MISCELLANEOUS Trustee The Trustee is State Street Bank and Trust Company (Federal I.D. #04-1867445), a trust company incorporated under the laws of Massachusetts and subject to regulation by the Federal Deposit Insurance Corporation and the Commissioner of Banks of Massachusetts. Its principal office is at 225 Franklin Street, Boston, Massachusetts 02110. The Trustee receives a fee of $10,000 per year for its services as set forth in the Indenture and is reimbursed for all of its disbursements relating to the Trust. In addition, the Trustee receives fees for acting as Custodian and Transfer Agent and for providing portfolio, tax accounting and recordkeeping services. During the year ended December 31, 1994, aggregate fees received by the Trustee were $119,431. Sponsor The Sponsor, Lexington Management Corporation (Federal l.D. #22-1891864), a Delaware corporation, serves as investment adviser and sponsor to 15 registered investment companies and to private and institutional investment accounts. The Sponsor is 11 responsible for performing certain administrative services for the Trust including shareholder servicing, answering inquiries, Blue Sky compliance and accounting. For performing such administrative services the Sponsor receives an annual fee of .35% of the Trust's average daily net assets. For the year ended December 31, 1994, the Sponsor received fees of $541,000. The Sponsor is a wholly-owned subsidiary of Piedmont Management Company Inc., a Delaware corporation with offices at 80 Maiden Lane, New York, New York 10038. Descendants of Lunsford Richardson, Sr., their spouses, trusts and other related entities have a majority voting control of outstanding shares of Piedmont Management Company Inc. The principal officers and the directors of the Sponsor and their principal occupations during the past five years are as follows: *Robert M. DeMichele Chairman of the Board and Chief Executive Officer of Lexington Management Corporation; Chairman and Chief Executive Officer, Lexington Funds Distributor, Inc.; President and Director, Piedmont Management Company Inc.; Director, Reinsurance Corporation of New York; Director, Unione Italiana Reinsurance Company; Director, Continental National Corporation; Director, The Navigator's Group, Inc.; Chairman, Lexington Capital Management, Inc.; Chairman, LCM Financial Services, Inc.; Director, Vanguard Cellular Systems, Inc.; Chairman, Market Systems Research, Inc. and Market Systems Research Advisors, Inc. *Richard M. Hisey Chief Financial Officer, Managing Director and Director, Lexington Management Corporation; Chief Financial Officer, Vice President and Director, Lexington Funds Distributor, Inc.; Chief Financial Officer, Market Systems Research Advisors, Inc. *Lawrence Kantor Executive Vice President, Managing Director and Director of Lexington Management Corporation; Executive Vice President and Director, Lexington Funds Distributor, Inc. James H. O'Leary Managing Director, Institutional Marketing and Director of Lexington Management Corporation. Prior to October 1992, Vice President, Marketing, Federated Investment Counseling. Peter J. Palenzona Director, Lexington Management Corporation; Senior Vice President, Secretary and Treasurer, Piedmont Management Company Inc. Stuart S. Richardson Director, Lexington Management Corporation; Vice Chairman, Piedmont Management Company Inc.; Chairman, Vanguard Cellular Systems, Inc. Prior to January 1986, Chairman, Richardson-Vicks, Inc. John B. Waymire Director and Vice President, Lexington Management Corporation; President and Chief Executive Officer, Lexington Capital Management, Inc.; President and Chief Executive Officer, Lexington Capital Management Associates, Inc.; President, Lexington Plan Administrators, Inc. *Lisa Curcio Senior Vice President and Secretary, Lexington Management Corporation; Vice President and Secretary, Lexington Funds Distributor, Inc. - ----------------- *Messrs. DeMichele, Hisey and Kantor and Ms. Curcio hold officer, director and/or trustee positions with some or all of the registered investment companies advised and/or distributed by Lexington Management Corporation and Lexington Funds Distributor, Inc. During its last fiscal year ended December 31, 1994, the Sponsor paid all its salaried officers a total of $3,393,541. Distributor State Street Bank and Trust Company has appointed Lexington Funds Distributor, Inc., a registered broker-dealer to act as distributor to the Trust. Lexington Funds Distributor, Inc. is a wholly-owned subsidiary of Piedmont Management Company Inc., and receives no compensation for its services. 12 Legal Opinion The legality of the participations has been passed upon by Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, 919 Third Avenue, New York, New York 10022, as counsel for the Trust. Auditors Financial Statements have been examined by McGladrey & Pullen, LLP independent certified public accountants, as stated in their opinion appearing herein and has been so included in reliance upon that opinion given on the authority of that firm as experts in accounting and auditing. This Prospectus does not contain all of the information with respect to the investment company set forth in its registration statements and exhibits relating thereto which have been filed with the Securities and Exchange Commission, Washington, D.C. under the Securities Act of 1933 and the Investment Company Act of 1940, and to which reference is hereby made. * * * * * No person is authorized to give any information or to make any representations not contained in this Prospectus; and any information or representation not contained herein must not be relied upon as having been authorized by the Trust, the Trustee or the Sponsor. The Trust is registered as a unit investment trust under the Investment Company Act of 1940. Such registration does not imply that the Trust has been guaranteed, sponsored, recommended or approved by the United States or any state or any agency or officer thereof. * * * * * This Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy securities in any state to any person to whom it is not lawful to make such offer in such state. 13 NONSTANDARD INVESTMENT RETURN IF YOU HAD INVESTED $10,000 54 YEARS AGO ILLUSTRATION OF AN ASSUMED INVESTMENT OF $10,000 With Dividends and Other Distributions Reinvested The table below covers the period from March 16, 1941 to December 31, 1994. This period was one of generally rising common stock prices. The results shown should not be considered as a representation of the dividends and other distributions which may be realized from an investment made in the Trust today. A program of the type illustrated does not assure a profit or protect against depreciation in declining markets. - -------------------------------------------------------------------------------- The cumulative cost figure represents the initial investment of $10,000 plus the cumulative amount of dividends reinvested. Dividends and other distributions were assumed to have been reinvested in additional participations at the reinvestment price. The value of participations "Initiaily Acquired" includes the value of additional participations created as a result of the reinvestment of that portion of the semi-annual distributions representing "A Return of Capital" (the proceeds from securities sold representing the cost of securities sold, and other principal transactions). No adjustment has been made for any income taxes payable by holders on dividends and other distributions reinvested in additional participations. The dollar amount of distributions from realized gains (determined at the Trust level) reinvested in additional participations were: 1941-None; 1942-None; 1943-None; 1944-$3; 1945-$450; 1946-None; 1947-$44; 1948-$338; 1949-None; 1950-$283; 1951-$796; 1952-$185; 1953-$10; 1954-$812; 1955-$474; 1956-$4,347; 1957-$48; 1958-$17; 1959-$3,032; 1960-$2,371; 1961-$2,118; 1962-$2,749; 1963-$735; 1964-$3.138; 1965-$9,035; 1966-$1,077; 1967-$48; 1968-$4.121; 1969-$102; 1970-$644; 1971-$1,862; 1972-$2,300; 1973-None; 1974-None; 1975-None; 1976-$5,071; 1977-$4,161; 1978-None; 1979-None; 1980-$5,182; 1981-$31,473; 1982-None; 1983-$18,602; 1984-$8,258; 1985-$39,496; 1986-$64,138; 1987-$69,182; 1988-$49,350; 1989-$99,410; 1990-$148,727; 1991-$39,773; 1992-$52,819; 1993-$46,262; 1994-$160,296; Total $883,339. - --------------------------------------------------------------------------------
VALUE OF PARTICIPATIONS Cumulative ----------------------------------------------------------------- Cost of Purchased Partici- Through Purchased Amount of pations Cumulative Reinvestment Through Dividends Purchased Cost of Distributions Reinvest- Number Year Reinvested Through Including from ment of Net of Ended Semi- Reinvestment Reinvested Initially Realized Gains Dividends Asset Partici- Dec. 31 Annually of Dividends Dividends Acquired (Cumulative) Sub-Total (Cumulative) Value pations - ------------------------------------------------------------------------------------------------------------------------------------ 1941* - - $ 10,000 $ 8,799 - $ 8,799 - $ 8,799 566 1942 - - 10,000 9,613 - 9,613 - 9,613 584 1943 $ 190 $ 190 10,190 10,809 - 10,809 $ 188 10,997 601 1944 192 382 10,382 11,983 $ 3 11,986 402 12,388 620 1945 215 579 10,597 14,709 464 15,173 682 15,855 693 1946 187 784 10,784 13,961 430 14,391 816 15,207 716 1947 370 1,154 11,154 14,639 447 15,086 1,141 16,227 824 1948 513 1,668 11,668 14,840 718 15,558 1,480 17,038 989 1949 509 2,177 12,177 17,113 701 17,814 1,968 19,782 1,176 1950 804 2,980 12,980 19,871 994 20,865 2,779 23,644 1,392 1951 1,012 3,992 13,992 21,659 1,756 23,415 3,674 27,089 1,652 1952 1,054 5,046 15,046 23,356 2,016 26,372 4,901 31,273 1,845 1953 1,217 6,263 16,263 24,849 2.030 26,879 6,149 33,028 1,945 1954 1,378 7,641 17,641 33,779 3,476 37,255 9,475 46,730 2,117 1955 1,599 9,240 19,240 39,164 4,398 43,562 12,349 55,911 2,243 1956 1,790 11,030 21,030 38,511 7,051 45,562 10,475 56,037 3,123 1957 1,910 12,940 22,940 36,268 6,574 42,842 11,496 54,338 3,269 1958 2,134 15,075 25,075 48,925 8,778 57,703 17,710 75,413 3,406 1959 2,184 17,258 27,258 55,426 11,821 67,247 19,992 87,239 3,906 1960 2,416 19,674 29,674 55,782 12,653 68,435 19,772 88,207 4,562 1961 2,697 22,371 32,371 67,126 16,993 84,119 25,757 109,876 4,881 1962 2,926 25,296 35,296 62,396 17,033 79,429 24,446 103,875 5,541 1963 3,243 28,540 38,540 71,467 19,863 91,330 30,711 122,041 5,803 1964 3,553 32,093 42,093 83,001 24,049 107,050 35,865 142,915 6,452 1965 3,855 35,948 45,948 92,523 30,246 122,769 35,623 158,392 8,066 1966 4,571 40,519 50,519 74,713 24,491 99,204 31,774 130,978 8,606 1967 5,060 45,579 55,579 83,121 27,090 110,211 40,165 150,376 8,948 1968 5,573 51,153 61,153 89,160 32,157 121,317 46,879 168,196 9,710 1969 5,915 57,068 67,068 75,017 26,979 101,996 44,536 146,532 10,115 1970 6,009 63,077 73,077 82,621 28,564 111,185 52,500 163,685 10,957 1971 6,190 69,267 79,267 93,454 32,126 125,580 61,694 187,274 11,586 1972 6,585 75,852 85,852 108,913 38,484 147,397 75,949 223,346 12,605 1973 7,371 83,223 93,223 93,151 32,729 125,880 71,868 197,748 13,123 1974 8,196 91,419 101,419 68,448 22,864 91,312 57,376 148,688 14,124 1975 9,139 100,557 110,557 91,498 30,474 121,972 85,413 207,385 14,781 1976 9,666 110,223 120,223 115,461 37,963 153,424 101,306 254,730 16,914 1977 11,237 121,460 131,460 108,466 35,919 144,385 96,397 240,782 18,898 1978 13,283 134,743 144,743 110,210 34,687 144,897 105,738 250,635 20,370 1979 15,804 150,547 160,547 139,110 34,774 173,884 121,307 295,191 23,931 1980 19,369 169,916 179,916 173,026 47,488 220,514 165,362 385,876 26,181 1981 21,822 191,738 201,738 163,070 62,645 225,715 140,698 366,413 33,836 1982 24,452 216,190 226,190 191,554 69,992 261,546 183,359 444,905 36,772 1983 25,923 242,114 252,114 235,913 91,870 327,783 218,649 546,432 42,757 1984 28,926 271,040 281,040 250,855 91,476 342,331 226,566 568,897 49,375 1985 31,808 302,848 312,848 333,623 145,913 479,536 293,217 772,753 58,251 1986 39,216 342,064 352,064 408,170 212,840 621,010 342,608 963,618 69,711 1987 40,394 382,458 392,458 412,599 241,185 653,784 326,728 980,512 83,847 1988 71,268 453,726 463,726 470,438 297,425 767,863 407,155 1,175,018 97,918 1989 45,103 498,829 508,829 583,494 438,476 1,021,970 509,512 1,531,482 111,950 1990 51,303 550,132 560,132 552,346 473,992 1,026,338 440,810 1,467,148 139,330 1991 55,828 605,960 615,960 654,372 558,392 1,212,764 539,190 1,751,954 152,079 1992 55,460 661,420 671,420 700,391 619,341 1,319,732 600,946 1,920,678 165,291 1993 54,505 715,925 725,925 814,945 727,611 1,542,556 715,658 2,258,214 176,699 1994 $60,332 776,257 786,257 832,095 759,684 1,591,779 649,069 2,240,848 213,211 - ------------------------------------------------------------------------------------------------------------------------------------
*From March 16. 1941. Note-During 1990 all sales charges were eliminated. The above table reflects the change to a "No Load" status as if it were in effect for the entire period shown. The amounts shown as dividends for periods after October 31, 1988 include interest income from the investment of amounts deposited in the Distributive Fund. 14 INDEPENDENT AUDITOR'S REPORT To the Participation Holders of Lexington Corporate Leaders Trust Fund We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Lexington Corporate Leaders Trust Fund as of December 31, 1994 and the related statements of operations, changes in net assets and the selected financial information for the periods indicated in the accompanying financial statements. These financial statements and selected financial information are the responsibility of the management of the Trust. Our responsibility is to express an opinion on these financial statements and selected financial information based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and selected financial information are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1994, by correspondence with State Street Bank and Trust Company, Trustee. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and selected financial information referred to above present fairly, in all material respects, the financial position of Lexington Corporate Leaders Trust Fund as of December 31, 1994 and the results of its operations, the changes in its net assets and the selected financial information for the periods indicated, in conformity with generally accepted accounting principles. New York, New York January 12, 1995 McGladrey & Pullen, LLP 15 LEXINGTON CORPORATE LEADERS TRUST FUND STATEMENT OF ASSETS AND LIABILITIES December 31, 1994 - -------------------------------------------------------------------------------- Assets Investments at market quotations, common stocks (identified cost $132,382,818) ....... $152,640,938 Cash ................................................................................. 5,168,446 Receivable for accrued dividends ..................................................... 424,989 Subscriptions receivable ............................................................. 106,935 ------------ Total assets ................................................................... 158,341,308 ------------ Liabilities Distribution payable ................................................................. 673,922 Payable for investments purchased .................................................... 1,159,821 Payable for participations redeemed .................................................. 175,639 Accrued expenses ..................................................................... 46,094 ------------ Total liabilities .............................................................. 2,055,476 ------------ Net Assets Balance applicable to 14,870,112 participations outstanding (Note 6) ................. $156,285,832 ============ Computation of public offering price: Net asset value, offering and redemption price per participation (net assets divided by participations outstanding) ............................... $10.51 ======
See Notes to Financial Statements. 16 LEXINGTON CORPORATE LEADERS TRUST FUND STATEMENTS OF OPERATIONS - --------------------------------------------------------------------------------
Years Ended December 31, ------------------------------------------ 1994 1993 1992 ------------ ----------- ---------- Investment Income: Income: Dividends .................................................. $ 5,177,999 $ 4,038,351 $3,745,862 Interest ................................................... 160,518 75,260 25,250 ------------ ----------- ---------- Total income ......................................... 5,338,517 4,113,611 3,771,112 ------------ ----------- ---------- Expenses: Sponsor's administrative fee (Note 4) ...................... 541,100 430,608 351,168 Professional fees .......................................... 52,543 54,816 59,600 Trustee's fee (Note 4) ..................................... 10,000 10,000 10,000 Custody, transfer and other fees (Note 4) .................. 234,732 150,358 131,341 Printing, mailing and sundry ............................... 87,283 34,001 34,782 Registration and filing fees ............................... 29,480 19,111 13,570 ------------ ----------- ---------- Total expenses ....................................... 955,138 698,894 600,461 ------------ ----------- ---------- Net investment income ................................ 4,383,379 3,414,717 3,170,651 ------------ ----------- ---------- Realized and Unrealized Gain on Investments: Net realized gain from securities transactions ............... 12,380,590 3,829,598 4,128,543 Unrealized appreciation (depreciation) of investments for the year ............................................. (18,331,342) 11,134,361 2,043,232 ------------ ----------- ---------- Net gain (loss) on investments ....................... (5,950,752) 14,963,959 6,171,775 ------------ ----------- ---------- Net increase (decrease) in net assets from operations ........ $ (1,567,373) $18,378,676 $9,342,426 ============ =========== ==========
See Notes to Financial Statements. 17 LEXINGTON CORPORATE LEADERS TRUST FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
Years Ended December 31, ---------------------------------------------- 1994 1993 1992 ------------ ------------ ------------ Income and Distributable Fund: Additions: Net investment income ...................................... $ 4,383,379 $ 3,414,717 $ 3,170,651 Realized gains from sale of securities, other than sale of stock units ........................... 11,402,269 2,850,449 2,983,375 ------------ ------------ ------------ 15,785,648 6,265,166 6,154,026 ------------ ------------ ------------ Deductions: Paid on account of participations redeemed ................. 219,442 137,118 69,952 Semi-annual distributions (Note 3(a)) Paid in cash ............................................. 2,810,148 1,222,437 1,273,798 Reinvested, below ........................................ 12,699,124 4,844,397 4,772,475 ------------ ------------ ------------ 15,728,714 6,203,952 6,116,225 ------------ ------------ ------------ Net change in income and distributable fund .................. 56,934 61,214 37,801 ------------ ------------ ------------ Principal Account: Additions: Payments received on sale of participations ................ 40,209,522 40,300,990 8,375,250 Semi-annual distributions reinvested, above ................ 12,699,124 4,844,397 4,772,475 Realized gains on sale of stock units ...................... 978,321 979,149 1,145,168 Unrealized appreciation (depreciation) of investments ...... (18,331,342) 11,134,361 2,043,233 ------------ ------------ ------------ 35,555,625 57,258,897 16,336,126 ------------ ------------ ------------ Deductions: Paid on account of participations redeemed ................. 24,442,332 15,303,313 8,314,768 Semi-annual distributions of principal (Note 3(b)) ......... 2,065,563 547,223 451,627 ------------ ------------ ------------ 26,507,895 15,850,536 8,766,395 ------------ ------------ ------------ Net change in principal account ............................ 9,047,730 41,408,361 7,569,731 ------------ ------------ ------------ Net assets at beginning of year: Income and distributable fund .............................. 321,930 260,716 222,915 Principal account .......................................... 146,859,238 105,450,877 97,881,146 ------------ ------------ ------------ 147,181,168 105,711,593 98,104,061 ------------ ------------ ------------ Net assets at end of year: Income and distributable fund .............................. 378,864 321,930 260,716 Principal account .......................................... 155,906,968 146,859,238 105,450,877 ------------ ------------ ------------ $156,285,832 $147,181,168 $105,711,593 ============ ============ ============
See Notes to Financial Statements. 18 LEXINGTON CORPORATE LEADERS TRUST FUND STATEMENT OF INVESTMENTS December 31, 1994 - -------------------------------------------------------------------------------- [CAPTION] Number Market Securities of Shares Cost Value - -------------- --------- ------ -------- Consumer Products: (18.0%) American Brands, Inc. .................. 172,500 $ 5,535,381 $ 6,468,750 Borden, Inc. ........................... 172,500 3,972,670 2,134,687 Eastman Kodak Co. ...................... 172,500 6,568,878 8,236,875 Procter & Gamble Co. ................... 172,500 7,438,294 10,695,000 ------------ ------------ 23,515,223 27,535,312 ------------ ------------ Oil International: (21.4%) Chevron Corp. .......................... 172,500 7,095,386 7,697,812 Exxon Corp. ............................ 172,500 8,275,116 10,479,375 Mobil Corp. ............................ 172,500 10,186,545 14,533,125 ------------ ------------ 25,557,047 32,710,312 ------------ ------------ Chemical & Fertilizers: (9.7%) duPont (E.I.) de Nemours & Co., Inc..... 172,500 7,383,801 9,703,125 Union Carbide Corp. .................... 172,500 2,473,937 5,067,188 ------------ ------------ 9,857,738 14,770,313 ------------ ------------ Electrical Equipment: (7.1%) General Electric Co. ................... 172,500 7,729,940 8,797,500 Westinghouse Electric Corp. ............ 172,500 3,877,215 2,113,125 ------------ ------------ 11,607,155 10,910,625 ------------ ------------ Retailing: (6.9%) Sears, Roebuck & Co. ................... 172,500 6,264,988 7,935,000 Woolworth Corp. ........................ 172,500 4,207,362 2,587,500 ------------ ------------ 10,472,350 10,522,500 ------------ ------------ Utilities: (9.7%) Consolidated Edison Co. of N.Y., Inc.... 172,500 4,580,313 4,441,875 Pacific Gas & Electric Co. ............. 172,500 4,241,413 4,204,688 Union Electric Company ................. 172,500 5,048,170 6,102,188 ------------ ------------ 13,869,896 14,748,751 ------------ ------------ Railroads: (7.1%) Santa Fe Pacific Corp. ................. 172,500 1,369,211 3,018,750 Union Pacific Corp. .................... 172,500 7,945,813 7,870,312 ------------ ------------ 9,315,024 10,889,062 ------------ ------------ Energy: (4.5%) Columbia Gas Systems, Inc.* ............ 172,500 5,474,858 4,053,750 USX Marathon Group ..................... 172,500 3,790,454 2,824,688 ------------ ------------ 9,265,312 6,878,438 ------------ ------------ Misc. Industrial: (6.2%) AlliedSignal Corp. ..................... 172,500 5,289,169 5,865,000 Praxair, Inc. .......................... 172,500 2,377,507 3,536,250 ------------ ------------ 7,666,676 9,401,250 ------------ ------------ Communications: (5.7%) American Telephone & Telegraph Corp..... 172,500 6,919,793 8,668,125 ------------ ------------ Financial: (3.7%) Travelers, Inc. ........................ 172,500 4,336,604 5,606,250 ------------ ------------ Total Investments (100%) ......... $132,382,818 $152,640,938 ============ ============
*Non Income producing. See Notes to Financial Statements. 19 LEXINGTON CORPORATE LEADERS TRUST FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. Nature of Business and Basis of Presentation Lexington Corporate Leaders Trust Fund (the "Trust") is an unincorporated Unit Investment Trust registered as such with the Securities and Exchange Commission. The Trust commenced operations in 1941 as a series of Corporate Leaders Trust Fund which was created under a Trust Indenture dated November 18, 1935. 2. Significant Accounting Policies The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements: (a) Valuation of securities-Investments are stated at value based on the last sale price on the principal exchange on which the security is traded prior to the time the Trust's assets are valued. Investments for which no sale is reported, or which are traded over-the-counter, are valued at the mean between bid and asked prices. Short term securities with 60 days or less to maturity are valued at amortized cost. (b) Income taxes-No provision for Federal income taxes is made since the Trust, under applicable provisions of the Internal Revenue Code, is a Grantor Trust and all its income is taxable to the Holders of participations. (c) Other-Investment transactions are recorded on the trade date basis. Dividend income is recorded on the ex-dividend date. Interest income is accrued as earned. 3. Distributions (a) During the year ended December 31, 1994, the distributions from net investment income were $.31504 per participation and, from realized gains, were $.89976 per participation. (b) The amount shown does not reflect the reinvestment of that portion of the proceeds from the sale of securities (other than stock units) representing the cost of the securities sold which is distributed and then reinvested in additional participations. In addition, any gain on the sale of stock units to provide funds for the redemption of participations is non-distributable and remains a part of the principal account. During the year ended December 31, 1994, the distributions from return of capital were $.89552 per participation. 4. Trustee and Sponsor Fees State Street Bank and Trust Company (the "Trustee") receives an annual Trustee fee as well as fees for acting as custodian and for providing portfolio accounting and record keeping services which aggregated $119,431 for the year ended December 31, 1994. The Trust pays an administrative fee to Lexington Management Corporation (Sponsor) equal, on an annual basis, to 0.35% of the average daily net assets of the Trust. 5. Investment Transactions During the year ended December 31, 1994, the cost of purchases and proceeds of sales of investment securities, other than short-term obligations, were $41,141,435 and $24,224,621, respectively. The cost of investment securities as well as realized security gains and losses are based on the identified cost basis. The cost of investments for Federal income taxes is the same as that reported in the Trust's financial statements. As of December 31, 1994, net unrealized appreciation of portfolio securities was $20,258,120, comprised of unrealized appreciation of $28,117,592 and unrealized depreciation of $7,859,472. 20 - -------------------------------------------------------------------------------- 6. Source of Net Assets As of December 31, 1994, the Trust's net assets were comprised of the following amounts: Net amounts paid in and reinvested by Holders net of terminations and return of capital payments ................................................................... $100,574,168 Cumulative amount of non-distributable realized gains retained in Principal Account ................ 35,074,680 Unrealized appreciation in value of securities ..................................................... 20,258,120 ------------ Principal account ................................................................................ 155,906,968 Income and distributable fund .................................................................... 378,864 ------------ Total net assets ............................................................................... $156,285,832 ============
7. Participations Issued and Redeemed During the periods indicated, participations were issued and redeemed as follows:
Number of Participations Year ended December 31, ----------------------------------- 1994 1993 1992 ---- ---- ---- Issued on payments from Holders ................ 3,324,643 3,065,926 717,836 Issued on reinvestment of distributions ........ 2,100,371 554,881 582,703 Redeemed ....................................... (2,072,895) (1,198,249) (718,184) ---------- ---------- -------- Net increase ................................. 3,352,119 2,422,558 582,355 ========= ========= =======
8. Selected Financial Information Refer to page 4 of the Prospectus for selected financial information. 21 Sponsor - ----------------------------------------------------------- LEXINGTON MANAGEMENT CORPORATION P.O. Box 1515/Park 80 West Plaza Two Saddle Brook, N.J. 07663 Distributor - ----------------------------------------------------------- LEXINGTON FUNDS DISTRIBUTOR, INC. Park 80 West Plaza Two Saddle Brook, N.J. 07663 All shareholder requests for services of any kind should be sent to: Transfer Agent - ----------------------------------------------------------- STATE STREET BANK AND TRUST COMPANY c/o National Financial Data Services 1004 Baltimore Kansas City, Missouri 64105 Or call toll free: Service: 1-800-526-0056 24 Hour Account Information: 1-800-526-0052 Table of Contents Page - ----------------------------------------------------------- Highlights.............................................. 2 Description of the Trust................................ 2 Selected Financial Information.......................... 4 How to Purchase Participations.......................... 4 How to Redeem Participations............................ 5 Shareholder Services.................................... 7 Exchange Privilege...................................... 7 Tax Matters............................................. 9 Investment Return....................................... 10 Amendment and Termination............................... 10 Resignation, Removal and Limitations on Liability of Sponsor............................................ 11 Miscellaneous........................................... 11 Nonstandard Investment Return........................... 14 Financial Statements ................................... 15 ----------------- L E X I N G T O N ----------------- ----------------- LEXINGTON CORPORATE LEADERS TRUST FUND ----------------- No sales charge No redemption fee Created in 1935 Blue chip stocks Free telephone exchange privilege ----------------- The Lexington Group of Investment Companies ----------------- P R O S P E C T U S MAY 1, 1995 ----------- -----END PRIVACY-ENHANCED MESSAGE-----