LEXINGTON NATURAL RESOURCES TRUST
P.O. Box 1515
Park 80 West, Plaza Two
Saddle Brook, New Jersey 07663
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
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November 5, 1996
Notice is hereby given that a Special Meeting of the Shareholders of the
Lexington Natural Resources Trust (the "Fund"), a Massachusetts business trust,
will be held on November 5, 1996 at 10:30 a.m. Eastern time at the offices of
the Fund, Park 80 West, Plaza Two, Saddle Brook, New Jersey for the following
purposes:
I. To elect eleven trustees to serve as members of the Board of Trustees
of the Fund;
II. To ratify or reject the selection of KPMG Peat Marwick as independent
certified public accountants of the Fund; and
III. The transaction of such other business as may be properly brought
before the meeting.
Shareholders of record at the close of business on September 10, 1996 are
entitled to notice of, and to vote at, this meeting or any adjournment thereof.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING, PLEASE FILL IN,
SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE PAID
RETURN ENVELOPE ENCLOSED, SO THAT A QUORUM WILL BE PRESENT AND A MAXIMUM NUMBER
OF SHARES MAY BE VOTED. IT IS MOST IMPORTANT AND IN YOUR INTEREST FOR YOU TO
SIGN YOUR PROXY CARD AND RETURN IT. THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO
ITS USE.
By Order of the Board of Trustees,
Lisa A. Curcio, Secretary
October 10, 1996
LEXINGTON NATURAL RESOURCES TRUST
P.O. Box 1515
Park 80 West, Plaza Two
Saddle Brook, New Jersey 07663
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PROXY STATEMENT
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Dated October 10, 1996
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD
November 5, 1996
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of the Lexington Natural Resources Trust (the
"Fund"), a Massachusetts business trust, for use at a Special Meeting of
Shareholders (the "Meeting") to be held on November 5, 1996 at 10:30 a.m.
Eastern time at the offices of the Fund, Park 80 West, Plaza Two, Saddle Brook,
New Jersey, and at any adjournment thereof, and was first mailed to shareholders
on or about October 10, 1996. Even if you sign and return the accompanying
proxy, you may revoke it by giving written notice of such revocation to the
Secretary of the Fund prior to the Meeting or by delivering a subsequently dated
proxy or by attending and voting at the Meeting in person. Management expects to
solicit proxies principally by mail, but Management or agents appointed by
Management may also solicit proxies by telephone, telegraph or personal
interview. The costs of solicitation will be borne by the Fund.
The following are the Proposals for the Meeting:
I. Shareholders will be asked to elect eleven trustees to serve as members
of the Board of Trustees of the Fund;
II. Shareholders will be asked to ratify or reject the selection of KPMG
Peat Marwick as independent certified public accountants of the Fund;
and
III. Shareholders will be asked to transact such other business as may be
properly brought before the meeting.
The Board of Trustees has fixed the close of business on September 10, 1996
as the record date for the determination of the shareholders entitled to notice
of and to vote at the Meeting or any adjournment thereof. As of that date, there
were approximately 2,236,323 outstanding shares of the Fund, each share being
entitled to one vote on each matter to come before the Meeting. As of September
10, 1996, the following shareholders each beneficially owned 5% or more of the
Fund's shares:
Number of Percentage of
Name Shares Owned Fund Outstanding
---- ------------ ----------------
Aetna Life Insurance and Annuity Company 1,814,275 81%
151 Farmington Avenue
Hartford, CT 06156
Kemper Investors Life Insurance Company 275,96 12%
1 Kemper Drive
Long Grove, IL 60049
1
Shares of the Fund are held exclusively by insurance companies for the
purpose of funding variable annuity contracts and variable life insurance
policies. The insurance companies vote these shares in accordance with the
directions of the contract holders and policy owners. The number of votes a
contract holder or policy owner may direct is equal to the contract or policy
value invested in the Fund's shares on September 10, 1996, divided by the net
asset value of one share of the Fund on that date. The number of votes that each
contract holder may direct (or for which a participant may give instructions
under group contracts where the contract holder permits such instructions) or
each policy owner may direct, is stated in the authorizations and furnished with
this Proxy Statement. Shares for which no instructions have been given by
participants under a group contract will be voted in the same proportion as
shares for which instructions have been given under the same contract.
Undirected shares of the Fund will be voted in the same proportion as directed
shares. Directions or instructions may be revoked by written notice to the
insurance carrier.
The Fund's Annual Report for the year ended December 31, 1995, including
financial statements, has been sent to all shareholders of record on February
23, 1996. The Annual Report does not, however, form any part of the proxy
soliciting material. A copy of the Fund's Annual Report and the most recent
Semi-Annual Report succeeding the Annual Report, may be received, free of
charge, by calling the Fund, toll free, at 1-800-526-0056.
The favorable vote of the holders of a simple majority of the shares
represented at the Meeting, assuming a quorum of 50% of the outstanding shares
is present, is required for the election of Trustees (Proposal I, below) and for
the ratification of the selection of KPMG Peat Marwick as independent certified
public accountants (Proposal II, below).
In addition to the solicitation of proxies by mail, the Fund may utilize the
services of officers and employees of the Fund, Lexington Management
Corporation, the Fund's investment adviser (the "Adviser" or the "Investment
Adviser"), and Lexington Funds Distributor, Inc., the Fund's distributor (the
"Distributor"), none of whom receive any compensation therefor, to solicit
proxies by telephone, telegraph and personal interview, and may also provide
shareholders with a procedure for recording their votes by telegraph, facsimile,
telephone or other electronic means. The estimated costs of solicitation of
proxies are expected to be approximately $13,000 in the aggregate for the Fund
and will be borne by the Fund. The Fund may request brokers, custodians,
nominees and fiduciaries to forward proxy material to the beneficial owners of
shares of record. Persons holding shares as nominees will, upon request, be
reimbursed for their reasonable expenses incurred in sending soliciting material
to their principals.
In the event that a quorum of shareholders is not represented at the Meeting
or at any adjournment thereof, or, even if a quorum is so represented, in the
event that sufficient votes in favor of any of the proposals set forth in the
Notice of the Meeting are not received, the persons named as proxies may propose
and vote for one or more adjournments of the Meeting to be held within a
reasonable time after the date originally set for the Meeting (but not more than
90 days after the original record date for the Meeting), and further
solicitation of proxies may be made without the necessity of further notice. The
persons named as proxies will vote in favor of any such adjournment if such
proxies instruct them to vote in favor of any of the proposals to be considered
at the adjourned meeting, and will vote against any such adjournment if such
proxies instruct them to vote against or to abstain from voting on all of the
proposals to be considered at the adjournment meeting.
THE PERSONS NAMED IN THE ACCOMPANYING PROXY WILL VOTE THE NUMBER OF SHARES
REPRESENTED THEREBY AS DIRECTED BY THE PROXY OR, IN THE ABSENCE OF SUCH
DIRECTION, FOR APPROVAL OF EACH OF THE ABOVE PROPOSALS.
2
Proposal I
ELECTION OF TRUSTEES
Eleven trustees are to be elected at the Meeting as the entire Board of
Trustees, to hold office until the next meeting and until their successors shall
have been elected and shall have qualified. If authority is granted on the
accompanying proxy to vote in the election of Trustees, it is the intention of
the persons named in the proxy to vote at the Meeting for the election of the
nominees named below, each of whom has consented to serve if elected. If any of
the nominees is unavailable to serve for any reason, the persons named as
proxies will vote for such other nominee or nominees selected by the Board of
Trustees or the Board may reduce the number of Trustees as provided in the
Fund's By-Laws. The Fund currently knows of no reason why any of the nominees
listed below will be unable to serve if elected.
Year First Shares Owned
Nominee's Name Became A Beneficially
and Age Principal Occupation for Past 5 Years Trustee Sept. 10, 1996**
- ------- ------------------------------------- ------- ----------------
S.M.S. Chadha Trustee. Secretary, Ministry of External Affairs, New 1996 0
(59) 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 Pro-
gram, New York.
*Robert M. DeMichele President and Chairman; Chairman and Chief Executive 1988 0
(51) Officer, Lexington Management Corporation; Chairman
and Chief Executive Officer, Lexington Funds Distributor,
Inc.; President and Director, Lexington Global Asset Man-
agers, Inc.; Director, Chartwell Re Corporation; Director,
Continental National Corporation; Director, The Naviga-
tor's Group, Inc.; Chairman, Lexington Capital Manage-
ment, Inc.; Director, Vanguard Cellular Systems, Inc.;
Chairman of the Board, Market Systems Research Advi-
sors, Inc. (registered investment advisors).
Beverley C. Duer Trustee. Private Investor; formerly, Manager of Operations 1988 0
(67) Research Department, CPC International, Inc.
*Barbara R. Evans Trustee. Private Investor; formerly, Assistant Vice Presi- 1991 0
(36) dent and Securities Analyst, Lexington Management Cor-
poration.
3
Year First Shares Owned
Nominee's Name Became A Beneficially
and Age Principal Occupation for Past 5 Years Trustee Sept. 10, 1996**
- ------- ------------------------------------- ------- ----------------
*Lawrence Kantor Vice President and Trustee. Executive Vice President, 1988 0
(49) Managing Director and Director, Lexington Management
Corporation; Executive Vice President and Director, Lex-
ington Funds Distributor, Inc.; Executive Vice President
and General Manager - Mutual Funds, Lexington Global
Asset Managers, Inc.
Jerard F. Maher Trustee. General Counsel, Federal Business Centers; 1996 0
(50) Counsel, Ribis, Graham & Curtin; Trustee, Lexington
Convertible Fund since 1986.
Andrew M. McCosh Trustee. Professor of the Organisation of Industry and 1996 0
(56) Commerce, Department of Business Studies, The Univer-
sity of Edinburgh, Scotland.
Donald B. Miller Trustee. Chairman, Horizon Media, Inc.; Trustee, Galaxy 1988 0
(73) Funds (registered investment companies); Director,
Maguire Group of Connecticut.
John G. Preston Trustee. Associate Professor of Finance, Boston College. 1988 0
(64)
Margaret W. Russell Trustee. Private Investor. 1996 0
(76)
Philip C. Smith Trustee. Private Investor; Director, Southwest Investors 1988 0
(84) Income Fund, Inc., Government Income Fund, Inc., U.S.
Trend Fund, Inc., Investors Cash Reserve and Plimony
Fund, Inc. (registered investment companies).
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*An "interested person" as defined in Section 2(a)(19) of the Investment
Company Act of 1940, as amended.
**Beneficial ownership is defined in accordance with the rules of the Securities
and Exchange Commission and means generally the power to vote or dispose
of shares, regardless of any economic interest therein.
All of the Trustees hold similar offices with some or all of the other
registered investment companies advised and/or whose shares are distributed by
Lexington Management Corporation ("LMC") and Lexington Funds Distributor, Inc.
("LFD"). LMC, P.O. Box 1515, Park 80 West, Plaza Two, Saddle Brook, N.J. 07663,
is the investment adviser to the Fund. LFD, P.O. Box 1515, Park 80 West, Plaza
Two, Saddle Brook, N.J. 07663, is the distributor of the Fund.
The Board of Trustees met five times during the twelve months ended December
31, 1995, and each of the Trustees attended at least 75% of those meetings.
4
Officers of the Fund
Year First Shares Owned
Nominee's Name Became An Beneficially
and Age Principal Occupation; Other Associations Officer Sept. 10, 1996**
- ------- ---------------------------------------- ------- ----------------
Robert M. DeMichele* Chairman of the Board (see page 4). 1988 0
(51)
Richard M. Hisey* Vice President and Treasurer. Managing Director, Chief 1988 0
(38) Financial Officer and Director, Lexington Management
Corporation; Vice President, Chief Financial Officer and
Director, Lexington Funds Distributor, Inc.; Executive
Vice President and Chief Financial Officer, Lexington
Global Asset Managers, Inc.
Lawrence Kantor* Vice President and Trustee (see page 5). 1988 0
(49)
Lisa Curcio* Vice President and Secretary. Senior Vice President and 1988 0
(36) Secretary, Lexington Management Corporation; Vice
President and Secretary, Lexington Funds Distributor,
Inc.; Secretary, Lexington Global Asset Managers, Inc.
- --------------
*Messrs. DeMichele, Hisey, and Kantor and Ms. Curcio hold similar offices with
some or all of the other registered investment companies advised and/or whose
shares are distributed by Lexington Management Corporation and Lexington Funds
Distributor, Inc.
**Beneficial ownership is defined in accordance with the rules of the Securities
and Exchange Commission and means generally the power to vote or dispose of
shares, regardless of any economic interest therein.
As of September 10, 1996, the Trustees and executive officers of the Fund as
a group did not beneficially own any shares of the Fund.
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 Adviser is compensated for his or her services according to a
fee schedule which recognizes the fact that each Trustee also serves as a
Trustee (or Director) 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, 1995 to December 31, 1995 for each Trustee:
5
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Aggregate Total Compensation From Number of Trusteeships
Name of Director Compensation from Fund Fund and Fund Complex in Fund Complex
- ----------------------------------------------------------------------------------------------------------
Robert M. DeMichele 0 0 15
- ----------------------------------------------------------------------------------------------------------
Beverley C. Duer $1,056 $22,616 15
- ----------------------------------------------------------------------------------------------------------
Barbara R. Evans 0 0 14
- ----------------------------------------------------------------------------------------------------------
Lawrence Kantor 0 0 14
- ----------------------------------------------------------------------------------------------------------
Donald B. Miller $1,056 $22,616 14
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John G. Preston $1,056 $22,616 14
- ----------------------------------------------------------------------------------------------------------
Philip C. Smith $1,056 $22,616 14
- ----------------------------------------------------------------------------------------------------------
Retirement Plan for Eligible Trustees
Effective September 12, 1995, the Trustees instituted a Retirement Plan for
Eligible Trustees (the "Plan") pursuant to which each Trustee (who is not an
employee of any of the funds managed by the Adviser, the Adviser, 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 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 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 Trustee's years of service (not in
excess of 15 years) completed with respect to any of the Covered Funds. Such
benefit is payable to each eligible Trustee in quarterly installments for ten
years following the date of retirement or the life of the Trustee. The Plan
establishes age 72 as a mandatory retirement age for Trustees; however, Trustees
serving the Covered Funds as of September 12, 1995 are not subject to such
mandatory retirement. Trustees serving the Covered 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 Trustee dies prior to receiving full benefits
under the Plan, the 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, 1995, the estimated credited years
of service for Trustees Duer, Miller, Preston, and Smith are 18, 22, 18 and 26,
respectively. The following table refers to retirement compensation for the
trustees and directors of the entire Lexington fund complex (the investment
companies managed by LMC):
6
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
Proposal II
RATIFICATION OR REJECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Trustees, including a majority of the trustees who are not
interested persons of the Fund, unanimously appointed KPMG Peat Marwick, as
independent certified public accountants to examine and to report on the
financial statements of the Fund for the fiscal year ending December 31, 1996.
Such appointment was expressly conditioned upon the right of the Fund by a vote
of the majority of the outstanding voting securities at any meeting called for
the purpose to terminate such employment. Such firm has no direct or indirect
interest in the Fund.
Representatives of KPMG Peat Marwick are not expected to be present at the
Meeting.
The Board of Trustees recommends that you vote FOR the ratification of the
selection of KPMG Peat Marwick as independent certified public accountants to
examine and report on the financial statements of the Fund for the fiscal year
ending December 31, 1996.
Proposal III
OTHER MATTERS
The Trustees do not know of any matters to be presented at the Meeting other
than those set forth in this proxy statement. If any other business should come
before the meeting, the persons named in the accompanying proxy will vote
thereon in accordance with their best judgment.
ADDITIONAL INFORMATION
A. The Investment Adviser
LMC, P.O. Box 1515, Park 80 West, Plaza Two, Saddle Brook, New Jersey 07663,
is the investment adviser to the Fund. The Investment Adviser identifies and
analyzes possible investments for the Fund, determines the amount and timing of
such investments, and the form of investment. The Investment Adviser has the
responsibility of monitoring and reviewing the Fund's portfolio, and, on a
regular basis, to recommend the ultimate disposition of such
7
investments. It is the Investment Adviser's responsibility to cause the purchase
and sale of securities in the Fund's portfolio, subject at all times to the
policies set forth by the Fund's Board of Directors. The Investment Adviser also
provides certain administrative and managerial services to the Fund.
B. The Principal Underwriter
LFD, P.O. Box 1515, Park 80 West, Plaza Two, Saddle Brook, New Jersey 07663,
is the principal underwriter of the Fund. The Principal Underwriter promotes the
sale and arranges for the sale of shares through its representatives and to
investment dealers. LMC and LFD 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.
C. The Administrator
LMC also acts as administrator to the Fund and performs certain
administrative and internal accounting services, including but not limited to,
maintaining general ledger accounts, regulating compliance preparation of
financial information for semi-annual and annual reports, preparing registration
statements, calculating net asset values, shareholder communications and
supervisor of custodian, transfer agent and provides facilities for such
services.
SUBMISSION OF PROPOSALS FOR THE
NEXT MEETING OF SHAREHOLDERS
Under the Lexington Natural Resources Trust's Declaration of Trust and
By-Laws, annual meetings of shareholders are not required to be held unless
necessary under the Investment Company Act of 1940, as amended (for example,
when fewer than a majority of the Trustees have been elected by shareholders).
Therefore, the Fund does not hold shareholder meetings on an annual basis. A
shareholder proposal intended to be presented at any meeting hereafter called
should be sent to the Lexington Natural Resources Trust at P.O. Box 1515, Park
80 West, Plaza Two, Saddle Brook, New Jersey 07663, and must be received by the
Fund within a reasonable time before the solicitation relating thereto is made
in order to be included in the notice or proxy statement related to such
meeting. The submission by a shareholder of a proposal for inclusion in a proxy
statement does not guarantee that it will be included. Shareholder proposals are
subject to certain regulations under federal securities law.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. IF YOU DO NOT EXPECT TO
ATTEND THE MEETING, PLEASE SIGN YOUR PROXY CARD PROMPTLY AND RETURN IT IN THE
ENCLOSED ENVELOPE TO AVOID UNNECESSARY EXPENSE AND DELAY. NO POSTAGE IS
NECESSARY.
October 10, 1996
By Order of the Board of Trustees,
Lisa A. Curcio, Secretary
8
LEXINGTON NATURAL RESOURCES TRUST
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of the Lexington Natural
Resources Trust (the "Fund"), for use at a Special Meeting of Shareholders to be
held at the offices of the Fund, Park 80 West, Plaza Two, Saddle Brook, New
Jersey, on November 8, 1996 at 10:30 a.m. Eastern time.
The undersigned hereby appoints Peter Corniotes and Richard J. Lavery, and each
of them, with full power of substitution, as proxies of the undersigned to vote
at the above-stated Special Meeting, and at all adjournments thereof, all shares
of beneficial interest of the Fund that are held of record by the undersigned on
the record date for the Special Meeting, upon the following matters:
(Left Column)
---
| X | PLEASE MARK BOX IN
--- BLUE OR BLACK INK
Every properly signed proxy will be voted in the manner specified thereon and,
in the absence of specification, will be treated as GRANTING authority to vote
FOR all of the above items.
Receipt of Notice of Special Meeting is hereby acknowledged.
------------------------
Please sign, date and return promptly. Date
- --------------------------------------------------------------------
- ------------Sign here exactly as name(s) appears hereon-------------
IMPORTANT: Joint owners must EACH sign. When signing as attorney, executor,
administrator, trustee, guardian or corporate officer, please give your full
title as such.
(Right Column)
ITEM I
For With- For All
hold Except
---- ---- ----
| | | | | |
---- ---- ----
Votes on Proposal to elect trustees to serve as members of the Board of Trustees
of the Fund, the nominees are:
S.M.S. Chadha, Robert M. DeMichele, Beverley C. Duer,
Barbara R. Evans, Lawrence Kantor, Jerard F. Maher,
Andrew M. McCosh, Donald B. Miller, John G. Preston,
Margaret W. Russell and Philip C. Smith.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "FOR ALL
EXCEPT" BOX, AND STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.
ITEM II For Against Abstain
---- ---- ----
| | | | | |
---- ---- ----
Vote on Proposal to ratify the selection of KPMG Peat Marwick as independent
certified public accountants to the Fund.
ITEM III For Against Abstain
---- ---- ----
| | | | | |
---- ---- ----
The transaction of such other business as may be properly brought before the
meeting.