PROSPECTUS DATED APRIL 30, 1997

                          LEXINGTON CORPORATE LEADERS
                                   TRUST FUND

                            PARK 80 WEST, PLAZA TWO
                         SADDLE BROOK, NEW JERSEY 07663
                      Shareholder Services: 1-800-526-0056
            Institutional/Financial Adviser Services: 1-800-367-9160
                  24 Hour Account Information: 1-800-526-0052

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     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.  See  "Description  of the  Trust" on page 2.
Currently,  the Trust is invested in  twenty-five  such  corporations  including
Eastman  Kodak,  General  Electric,  Mobil,  Sears Roebuck and Travelers  Group.
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.

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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.

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     THESE  SECURITIES  HAVE  NOT BEEN  APPROVED  OR  DISAPPROVED  BY THE
     SECURITIES   AND  EXCHANGE   COMMISSION  OR  ANY  STATE   SECURITIES
     COMMISSION  NOR HAS THE  SECURITIES  AND EXCHANGE  COMMISSION OR ANY
     STATE SECURITIES  COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
     THIS PROSPECTUS.  ANY  REPRESENTATION  TO THE CONTRARY IS A CRIMINAL
     OFFENSE.
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              READ AND RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE.

<PAGE>


                                   HIGHLIGHTS

THE TRUST AND ITS OBJECTIVE

        THE TRUST WAS CREATED IN 1935 WITH THE OBJECTIVE OF SEEKING LONG
         TERM CAPITAL GROWTH AND INCOME THROUGH INVESTMENT IN AN EQUAL
       NUMBER OF SHARES OF COMMON STOCK OF A FIXED LIST OF AMERICAN BLUE
     CHIP CORPORATIONS. CURRENTLY THE TRUST IS INVESTED IN TWENTY-FIVE SUCH
       CORPORATIONS. THERE CAN BE NO ASSURANCE THAT THE TRUST'S OBJECTIVE
            WILL BE ACHIEVED. SEE "DESCRIPTION OF THE TRUST" HEREIN.

PUBLIC OFFERING PRICE
     The initial  purchase  requirement for an investment in the Trust is $1,000
and additional  investments must be at least $50. Investors receive a fractional
undivided  interest in and  ownership  of the Trust Fund and  Distributive  Fund
described below which is called a participation. Participations are offered at a
price equal to the net asset value next determined after an order is received.

   
     SPECIAL  CONSIDERATIONS  The value of a  participation  fluctuates with the
market value of the underlying  portfolio  securities of the Trust. The dividend
income, if any, from the portfolio securities is subject to fluctuation which in
turn will affect the amounts of distributions made to participants.  An investor
in the Trust has no assurance  against loss in a declining market and redemption
at a time when the market  value of the  participations  is less than their cost
will result in a loss to the investor.
    

SEMI-ANNUAL DISTRIBUTIONS
     Semi-annual  distributions  on  June  30  and  December  31  of  each  year
(Distribution  Date)  will  be  reinvested  at net  asset  value  in  additional
participations  of the Trust unless the participant  notifies the Trustee to pay
such distributions in cash.

TAXATION
     For Federal  income tax purposes,  (1) the Trust will be treated as a fixed
investment  trust  and will not be  subject  to  Federal  income  tax,  (2) each
participant  will be treated as the owner of his pro rata  portion of the common
stock  of the  corporations  held by the  Trust,  (3) each  participant  will be
required to include in his gross  income his pro rata  portion of the  dividends
and interest  received by the Trust (including the amounts of such dividends and
interest that are not distributed to  participants  but are used to pay the fees
and expenses of the Trust), at the time such dividends and interest are received
by the Trust, not at the later time such dividends and interests are distributed
to  participants  or  reinvested  in  additional  participations,  and (4)  each
individual  participant who itemizes  deductions may deduct his pro rata portion
of the fees and expenses of the Trust only to the extent such  amount,  together
with his other  miscellaneous  itemized  deductions,  exceeds 2% of his adjusted
gross income. See "Taxation" herein.

THE INDENTURE
     The Amended and Restated Indenture is effective as of November 14, 1989, as
amended on April 23, 1993 (the  "Indenture").  Both the  Indenture and the Trust
will terminate on November 30, 2100.


                            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

                                        2

<PAGE>

   
stock of each of the twenty-five  American  corporations (except with respect to
shares received from spin-offs of existing portfolio securities--see  discussion
below) and such cash as may be available  for the purchase of stock units.  Cash
received on sales of  participations,  (excluding the portion  thereof,  if any,
attributable to the value of, and therefore deposited in, the Distributive Fund)
including  distributions  by  the  Trust  which  are  reinvested  in  additional
participations under the Distribution  Reinvestment Program described herein, is
held in the Trust Fund without  interest  until  receipt of  sufficient  cash to
purchase  at  least  one  hundred  stock  units.  To the  extent  monies  remain
uninvested in the Trust, the Trustee will derive a benefit therefrom.
    

     All dividends and any other cash  distributions  received by the Trust with
respect  to the  common  stock  held in the  Trust  Fund  are  deposited  in the
Distributive Fund. Any non-cash distributions received by the Trust with respect
to the  common  stock  held in the Trust  Fund are sold by the  Trustee  and the
proceeds of sale are deposited in the Distributive  Fund. The Trustee may invest
the funds  deposited  in the  Distributive  Fund in debt  obligations  issued or
guaranteed by the United States Government,  its agencies or  instrumentalities,
or in repurchase  agreements  collateralized  by such United  States  Government
obligations,  which  mature  prior,  and as  close as  practicable,  to the next
Distribution  Date. The interest earned on such investments is also deposited in
the  Distributive  Fund.  Fees and  expenses  of the  Trust  are  paid  from the
Distributive  Fund.  The  Trustee  may from  time to time set  aside  out of the
Distributive Fund a reserve for payments of taxes or other governmental charges.

     On each  Distribution  Date, the Trustee uses the money in the Distributive
Fund  to  purchase   additional   participations   for  participants  under  the
Distribution  Reinvestment Program described herein,  unless the participant has
elected to receive his distribution in cash.

     In  the  event  of  the   merger,   consolidation,   re-capitalization   or
readjustment of the issuer of any portfolio security with any other corporation,
the Sponsor may instruct the Trustee, in writing, to accept or reject such offer
or take such  other  action  as the  Sponsor  may deem  proper.  Any  securities
received in exchange  shall be held by the Portfolio and shall be subject to the
terms and conditions of the Amended and Restated Indenture to the same extent as
the securities originally held in the Portfolio. Securities received pursuant to
an exchange may result in the Trust holding fewer shares than originally held in
the Portfolio security.  Each stock unit issued after the effective date of such
an exchange will include one share of the corporation received on exchange.

     The Trust will enter into repurchase  agreements only with commercial banks
and dealers in U.S. government  securities.  Repurchase  agreements when entered
into with dealers,  will be fully  collateralized  including the interest earned
thereon during the entire term of the agreement.  If the institution defaults on
the  repurchase  agreement,  the Trust will retain  possession of the underlying
securities. In addition, if bankruptcy proceedings are commenced with respect to
the seller, realization on the collateral by the Trust may be delayed or limited
and the Trust may incur additional costs. In such case the Trust will be subject
to  risks  associated  with  changes  in the  market  value  of  the  collateral
securities.

   
     The Trust is invested  generally in an equal number of shares of the common
stock  of a  fixed  list  of  twenty-five  American  corporations.  The  Trust's
portfolio  investments  are not managed and are expected to remain fixed. Of the
securities  held on December 31, 1996,  17.3% were in consumer  products,  20.7%
were in  international  oil companies  and 9.8% were in chemical and  fertilizer
companies.  A complete  list of the  securities  is contained  in the  financial
statements included herein. The value of a participation in the Trust fluctuates
with the market  value of the  underlying  common  stock held by the Trust.  The
dividend  income,  if any,  from the common  stocks is  subject to  fluctuation,
which, in turn will affect the amounts of distributions made to participants.
    

   
     The Sponsor  may direct the  Trustee to sell the shares of common  stock of
any of the twenty-five corporations if (i) the corporation has failed to declare
or pay dividends on the common stock; (ii) a materially adverse legal proceeding
has been instituted which affects the declaration or payment of dividends; (iii)
a breach of covenant or warranty exists which may materially  affect the payment
of  dividends;  (iv) a default in payment  of  principal  or income on any other
outstanding securities of the corporation occurs which may affect the payment of
dividends;  or (v) the  common  stock  ceased to be listed on the New York Stock
Exchange  and after  fifteen days has not been  reinstated.  The proceeds of any
such sale shall be deposited in the Distributive Fund.
    

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

                                        3

<PAGE>

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.

<TABLE>
<CAPTION>
                                                                                                             
Per participation operating
  performance (for a                                                                                          Thirteen
  participation outstanding                                                                                    Months      Years
  throughout the period)                                                                                        Ended      Ended
                                                           Years Ended December 31,                            December   November
                                   -------------------------------------------------------------------------
                                    1996       1995      1994      1993      1992     1991     1990     1989   31, 1988   30, 1987
                                    ----       ----      ----      ----      ----     ----     ----     ----   --------   --------
<S>                               <C>        <C>       <C>       <C>       <C>       <C>      <C>      <C>      <C>      <C>    
   
Net asset value,
  beginning year .............    $13.74     $10.51    $12.78    $11.62    $11.52   $10.53   $13.68   $12.00    $10.93     $14.26
                                  ------     ------    ------    ------    ------   ------   ------   ------    ------     ------
Income from investment
 operations:
  Net investment income ......       .28        .28       .31      .33        .36      .39      .43      .46       .77        .55
                                  ------     ------    ------    ------    ------   ------   ------   ------    ------     ------
  Net realized and
  unrealized gain
  (loss) on  investments .....      2.79       3.82      (.45)    1.71        .70     1.64     (.89)    3.18      2.27      (1.31)
                                  ------     ------    ------    ------    ------   ------   ------   ------    ------     ------
Total from investment
  operations .................      3.07       4.10      (.14)    2.04       1.06     2.03     (.46)    3.64      3.04       (.76)
                                  ------     ------    ------    ------    ------   ------   ------   ------    ------     ------
    

Less distributions:
  Dividends from net
    investment income ........      (.28)      (.03)     (.90)    (.28)      (.35)    (.28)   (1.29)   (1.00)     (.58)      (.96)
  Distributions from
    income and realized
    gains included in
    terminations .............      (.02)      (.02)     (.01)     --        (.01)     --      (.01)    (.02)     (.02)      (.02)
  Distributions from capital .      (.18)      (.54)     (.90)   (.27)       (.25)    (.36)    (.96)    (.48)     (.55)     (1.04)
                                  ------     ------    ------    ------    ------   ------   ------   ------    ------     ------
       Total distributions ...      (.76)      (.87)    (2.13)     (.88)     (.96)   (1.04)   (2.69)   (1.96)    (1.97)     (2.57)
                                  ------     ------    ------    ------    ------   ------   ------   ------    ------     ------
Change in net asset
  value for the year .........      2.31       3.23     (2.27)     1.16       .10      .99    (3.15)    1.68      1.07      (3.33)
                                  ------     ------    ------    ------    ------   ------   ------   ------    ------     ------
Net asset value
  at end of year .............    $16.05     $13.74    $10.51    $12.78    $11.62   $11.52   $10.53   $13.68    $12.00     $10.93
                                  ======     ======    ======    ======    ======   ======   ======   ======    ======     ======
Total Return..................     22.43%     39.21%    (0.77%)   17.57%     9.63%   19.41%   (4.20%)  30.34%    28.21%     (7.81%)

Ratio/Supplemental Data
Net Assets,
  end of year (000)...........  $392,295   $256,427  $156,286  $147,181  $105,712  $98,104  $85,961  $94,379   $77,868    $65,967
Ratios to average
  net asset of:
  Expenses ...................       .63%       .58%      .62%      .57%      .60%     .67%     .67%     .72%      .26%*      .08%
  Net investment income ......      2.05%      2.57%     2.84%     2.78%     3.16%    3.46%    3.57%    3.34%     5.88%*     4.01%

 *Annualized

</TABLE>

                         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").  To transmit  funds by wire,
contact the Trust at 1-800-526-0056.

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.  The Fund does not accept third party checks or
cash  investments.  Third party  checks are  defined as checks  made  payable to
someone other than the Fund.  Checks must be in U.S.  dollars, and to avoid fees
and delays, drawn only on banks located in the U.S.
    

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
<PAGE>


     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  PARTICIPATIONS,  HE SHOULD  CALL THE TRUST AT THE TOLL FREE NUMBER ON


                                       5
<PAGE>


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  three
business  days,  but will not be mailed  until all  checks  in  payment  for the
participations  to be  redeemed  have been  cleared.  The  Transfer  Agent  will
restrict the mailing of redemption proceeds to a participation  holder's address
of record within 30 days of such address being changed unless the  participation
holder provides a signature guaranteed letter of instruction.

BY  TELEPHONE:  TO ESTABLISH  THIS  PRIVILEGE ON YOUR  ACCOUNT,  PLEASE CALL OUR
SHAREHOLDER  SERVICES  DEPARTMENT AT  1-800-526-0056  BETWEEN 9:00 A.M. AND 5:00
P.M. EASTERN TIME AND REQUEST A TELEPHONE AUTHORIZATION FORM.

     Shareholders   redeeming  at  least  $1,000  worth  of  shares  (for  which
certificates have not been issued) may effect a telephone  redemption by calling
our Shareholder  Services  Department at 1-800-526-0056  Monday--Friday  between
9:00 a.m. and 4:00 p.m. Eastern Time. A telephone  redemption in good order will
be  processed  at the net asset value of the Trust next  determined.  There is a
maximum telephone redemption limit of $100,000.

     The   redemption   proceeds   will  be  made  payable  to  the   registered
shareholder(s)  and forwarded to the address of record.  The Transfer Agent will
restrict  the  mailing  of  telephone  redemption  proceeds  to a  participation
holder's address of record within 30 days of such address being changed,  unless
the participation  holder provides a signature  guaranteed letter of instruction
(See "Telephone Exchange/Redemption Provisions").
    

SIGNATURE  GUARANTEE:  Signature  guarantees are required in connection with (a)
redemptions  by mail  involving  $25,000 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.

                                       6
<PAGE>

     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 right of  redemption  may be suspended  (a) for any period during which
the New York Stock Exchange is closed or the Securities and Exchange  Commission
("SEC") determines that trading on the Exchange is restricted, (b) when there is
an emergency as determined by the SEC as a result of which it is not  reasonably
practicable  for the Trust to dispose of securities  owned by it or to determine
fairly the value of its net assets, or (c) for such other periods as the SEC may
by order permit for the protection of participants.  Due to the  proportionately
high cost of  maintaining  smaller  accounts,  the Trust  reserves  the right to
redeem all  participations  in an  account  with a value of less than $500 other
than as a result  of a change in net asset  value and mail the  proceeds  to the
participant.  Participants  will be notified before these  redemptions are to be
made and will have thirty (30) days to make an  additional  investment  to bring
their accounts up to the required minimum.
    

                              SHAREHOLDER SERVICES

TRANSFER
     Participations  may be transferred to another owner. A signature  guarantee
of the registered  participant is required on the letter of instruction or other
instrument of assignment.

SYSTEMATIC WITHDRAWAL PLAN

     Participants  may  elect to  withdraw  cash in  fixed  amounts  from  their
accounts at regular intervals.  The minimum investment to establish a Systematic
Withdrawal  Plan is $10,000.  If the proceeds are to be mailed to someone  other
than the registered owner, a signature guarantee is required.

GROUP SUB-ACCOUNTING: To minimize recordkeeping by fiduciaries, corporations and
certain other investors,  the minimum initial investment may be waived.

                               EXCHANGE PRIVILEGE

   
     Participations  may be exchanged for shares of 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  may not be purchased until
the third business day following the redemption of the shares being exchanged in
order to enable the  redeeming  fund to  utilize  normal  securities  settlement
procedures  in  transferring  the  proceeds  of the  redemption  to  the  Trust.
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 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 and emerging markets.
       

LEXINGTON  INTERNATIONAL  FUND,  INC.* (NASDAQ  Symbol:  LEXIX)/Seeks  long term
     growth  of  capital  through  investment  in  common  stocks  of  companies
     domiciled in foreign countries.

   
LEXINGTON CROSBY SMALL CAP ASIA GROWTH FUND, INC.* (NASDAQ Symbol:  LXCAX)/Seeks
     long-term capital appreciation through investment in companies domiciled in
     the Asia Region with a market capitalization of less than $1 billion.

LEXINGTON  TROIKA  DIALOG  RUSSIA  FUND,  INC.*  (NASDAQ  Symbol:   LETRX)/Seeks
     long-term capital  appreciation  through investment primarily in the equity
     securities of Russian companies. The Fund has a $5,000 minimum investment.
    

                                       7
<PAGE>

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.

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.

   
LEXINGTON SMALLCAP  VALUE FUND,  INC.* (NASDAQ  Symbol:  LESVX)/Seeks  long-term
     capital  appreciation  through  investment  in common  stocks of  companies
     domiciled in the United States with a market capitalization of less than $1
     billion.
    

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.
    

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.

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  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.
       

     *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/REDEMPTION PROVISIONS 

     Exchange  or  redemption  instructions  may  be  given  in  writing  or  by
telephone.  TELEPHONE  EXCHANGES/REDEMPTIONS  MAY  ONLY BE  MADE IF A  TELEPHONE
AUTHORIZATION  FORM HAS BEEN  PREVIOUSLY  EXECUTED  AND FILED WITH THE  SPONSOR.
Telephone  exchanges/redemptions are permitted only after a minimum of seven (7)
days   have   elapsed   from  the  date  of  a   previous   exchange/redemption.
EXCHANGES/REDEMPTIONS   MAY  NOT  BE  MADE  UNTIL  ALL  CHECKS  IN  PAYMENT  FOR
PARTICIPATIONS TO BE EXCHANGED HAVE BEEN CLEARED.

     Telephonic  exchanges/redemptions  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/redemption  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 and/or telephone  redemption  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

                                       8
<PAGE>

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.

     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

                                       9
<PAGE>

of fees and  expenses  paid by the Trust  only to the extent  that such  amount,
together with the participant's other miscellaneous itemized deductions, exceeds
2% of  the  participant's  adjusted  gross  income.  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).

     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, 1996 is set forth in the
following table:

                                               Average Annual
                     Period                     Total Return
                     ------                   --------------
         1 year ended December 31, 1996          +22.43%
         5 years ended December 31, 1996         +16.87%
         10 years ended December 31, 1996        +14.80%

     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.

                                       10

<PAGE>

     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.

     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

                                       11
<PAGE>


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, 1996,
aggregate  fees  received by the Trustee  were  $138,352.  

SPONSOR

     The Sponsor,  Lexington Management Corporation (Federal l.D. #22- 1891864),
a  Delaware  corporation,  serves  as  investment  adviser  and  sponsor  to  18
registered  investment  companies  and to private and  institutional  investment
accounts.  The Sponsor is  responsible  for  performing  certain  administrative
services for the Trust including  shareholder  servicing,  answering  inquiries,
blue sky compliance and accounting.  For performing such administrative services
the  Sponsor  receives an annual fee of .40% of the  Trust's  average  daily net
assets.  For the year ended  December 31,  1996,  the Sponsor  received  fees of
$1,268,269.

     The  Sponsor  is  a  wholly-owned  subsidiary  of  Lexington  Global  Asset
Managers,  Inc., a Delaware  corporation with offices at Park 80 West Plaza Two,
Saddle Brook, New Jersey 07663.  Descendants of Lunsford Richardson,  Sr., their
spouses,  trusts and other related  entities have a majority  voting  control of
outstanding shares of Lexington Global Asset Managers, Inc.

     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 and Chief  Executive  Officer,  Lexington
                              Management  Corporation;  President  and Director,
                              Lexington  Global Asset Managers,  Inc.;  Chairman
                              and  Chief  Executive  Officer,   Lexington  Funds
                              Distributor,  Inc.;  Chairman of the Board, Market
                              Systems Research, Inc. and Market Systems Research
                              Advisors,    Inc.;    Director,    Chartwell    Re
                              Corporation,  Claredon National Insurance Company,
                              The  Navigator's   Group,  Inc.,  Unione  Italiana
                              Reinsurance,  Vanguard Cellular Systems,  Inc. and
                              Weeden  &  Co.;  Vice  Chairman  of the  Board  of
                              Trustees,   Union   College  and  Trustee,   Smith
                              Richardson Foundation.
    

*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.;
                              Executive  Vice  President  and  Chief   Financial
                              Officer, Lexington Global Asset Managers, Inc.

*Lawrence Kantor              Executive Vice  President,  Managing  Director and
                              Director  of  Lexington  Management   Corporation;
                              Executive Vice  President and Director,  Lexington
                              Funds Distributor,  Inc.; Executive Vice President
                              and  General   Manager--Mutual   Funds,  Lexington
                              Global Asset Managers, Inc.

   
Stuart S. Richardson          Director,    Lexington   Management   Corporation;
                              Chairman,  Lexington Global Asset Managers,  Inc.;
                              Vice Chairman,  Vanguard  Cellular  Systems,  Inc.
                              Prior to January 1986, Chairman, Richardson-Vicks,
                              Inc.
    
       

*Lisa Curcio                  Senior Vice  President  and  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  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, 1996,  the Sponsor paid all
its salaried officers a total of $ .
    

                                       12
<PAGE>

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
Lexington  Global Asset  Managers,  Inc., and receives no  compensation  for its
services.

LEGAL OPINION

     The legality of the participations  has been passed upon by Kramer,  Levin,
Naftalis,  & 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
<PAGE>
     NONSTANDARD INVESTMENT RETURN IF YOU HAD INVESTED $10,000 55 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, 1996.
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  Initiailly  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; 1995--$7,696; 1996--$62,612; Total $953,647.

<TABLE>
<CAPTION>

                              CUMULATIVE
                                COST OF                                  VALUE OF PARTICIPATIONS
                               PARTICI-                              PURCHASED             
                                PATIONS                             THROUGH REIN-                 PURCHASED
                 AMOUNT OF     PURCHASED   CUMULATIVE               INVESTMENT OF                  THROUGH
                 DIVIDENDS      THROUGH      COST                   DISTRIBUTIONS                REINVESTMENT                NUMBER
      YEAR      REINVESTED     REINVEST-   INCLUDING                 FROM REALIZED                    OF            NET        OF
     ENDED        SEMI-         MENT OF   REINVESTED     INITIALLY      GAINS                      DIVIDENDS        ASSET   PARTICI-
    DEC. 31      ANNUALLY      DIVIDENDS   DIVIDENDS     ACQUIRED    (CUMULATIVE)    SUB-TOTAL   (CUMULATIVE)       VALUE    PATIONS
------------------------------------------------------------------------------------------------------------------------------------
<S>  <C>         <C>          <C>           <C>         <C>           <C>           <C>           <C>           <C>          <C>    
     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           597        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        24,356         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     11,856
     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
     1995        61,329       837,586       847,586     1,207,794       998,228     2,206,022       913,513     3,119,535    227,040
     1996        64,546       902,132       912,132     1,452,214     1,232,426     2,684,640     1,134,598     3,819,238    237,959
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

*FROM MARCH 16, 1941.
NOTE--DURING 1990 ALL SALES CHARGES WERE ELIMINATED. THE ABOVE TABLE
REFLECTS THE CHANGE TO A "NO LOAD" STATUS AS IF IT WERE IN EFFECT FOR THE
ENTIRE PERIOD SHOWN.
THE AMOUNTS  SHOWN AS  DIVIDENDS  FOR  PERIODS  AFTER  OCTOBER 31, 1988  INCLUDE
INTEREST  INCOME FROM THE  INVESTMENT OF AMOUNTS  DEPOSITED IN THE  DISTRIBUTIVE
FUND.
<PAGE>

                          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, 1996 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,  1996,  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, 1996 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                         /s/McGladrey & Pullen, LLP
 January 10, 1997

                                       15
<PAGE>

LEXINGTON CORPORATE LEADERS
TRUST FUND STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1996
--------------------------------------------------------------------------------
ASSETS
Investments at market quotations,
  common stocks (identified
  cost $259,495,211) ...........................................    $383,752,319
Cash ...........................................................       8,560,554
Receivable for accrued dividends ...............................         988,327
Subscriptions receivable .......................................         678,279
                                                                    ------------
         Total assets ..........................................     393,979,479
                                                                    ------------
LIABILITIES                                       
Distribution payable ...........................................       1,131,657
Payable for participations redeemed ............................         419,675
Accrued expenses ...............................................         133,014
                                                                    ------------
         Total liabilities .....................................       1,684,346
                                                                    ------------
NET ASSETS                                        
Balance applicable to 24,447,241                  
  participations outstanding (Note 6) ...........................   $392,295,133
                                                                    ============
Computation of public offering price:             
  Net asset value, offering and                   
    redemption price per participation            
    (net assets divided by                        
     participations outstanding) ................................   $      16.05
                                                                    ============


See Notes to Financial Statements.


                                       16


<PAGE>

LEXINGTON CORPORATE LEADERS TRUST FUND
STATEMENT OF OPERATIONS
   
                                               Years Ended December 31,
                                       -----------------------------------------
                                           1996           1995           1994
                                       -----------      ---------     ----------

Investment Income:
  Income:
    Dividends .......................  $  8,730,682  $  5,974,941  $  5,177,999
    Interest ........................       103,006       234,501       160,518
                                       ------------  ------------   ------------
          Total income ..............     8,833,688     6,209,442     5,338,517
                                       ------------  ------------   ------------
  Expenses:
    Sponsor's administrative
      fee (Note 4) ..................     1,268,269       689,822       541,100
    Professional fees ...............        64,797        52,907        52,543
    Trustee's fee (Note 4) ..........        10,833        10,000        10,000
    Custodian fees and
      other services (Note 4) .......       127,519       103,513       109,431
    Transfer agent fees .............       390,712       138,644       125,301
    Printing, mailing and sundry ....       141,076       112,527        87,283
    Registration and filing fees ....        63,025        31,079        29,480
                                       ------------  ------------   ------------

       Total expenses ...............     2,066,231     1,138,492       955,138
                                       ------------  ------------   ------------
       Net investment income ........     6,767,457     5,070,950     4,383,379
                                       ------------  ------------   ------------
    

REALIZED AND UNREALIZED
  GAIN ON INVESTMENTS:
  Net realized gain from
    securities transactions .........    12,337,780     2,521,317    12,380,590
      Unrealized appreciation
        (depreciation) of
        investments for the year ....    47,385,034    56,613,954   (18,331,342)
                                       ------------  ------------   ------------

       Net gain (loss) on investments    59,722,814    59,135,271    (5,950,752)
                                       ------------  ------------   ------------
Net increase (decrease)
   in net assets from
   operations .......................  $ 66,490,271  $ 64,206,221   $(1,567,373)
                                       ------------  ------------   ------------

                                       17
See Notes to Financial Statements.
<PAGE>


LEXINGTON CORPORATE LEADERS TRUST FUND
STATEMENTS OF CHANGES IN NET ASSETS


                                               Years Ended December 31,
                                       -----------------------------------------
                                           1996           1995           1994
                                       -----------      ---------     ----------

   
Income and
Distributable Fund:
  Additions:
    Net investment income ......    $  6,767,457    $  5,070,950    $  4,383,379
    Realized gains from
     sale of securities,
     other than sale
     of stock units ............       6,395,874         820,396      11,402,269
                                    ------------    ------------    ------------
                                      13,163,331       5,891,346      15,785,648
                                    ------------    ------------    ------------
       
  Deductions:
    Paid on account of
     participations redeemed ...         486,295         212,668         219,442
    Semi-annual
      distributions
       (Note 3(a))
      Paid in cash .............       1,849,390         939,656       2,810,148
      Reinvested, below ........      10,714,827       4,685,472      12,699,124
                                    ------------    ------------    ------------
                                      13,050,512       5,837,796      15,728,714
                                    ------------    ------------    ------------
  Net change in income
   and distributable fund ......         112,819          53,550          56,934
                                    ------------    ------------    ------------
Principal Account:
  Additions:
    Payments received on
    sale of participations .....     167,449,209      74,367,391      40,209,522
    Semi-annual
     distributions
      reinvested, above ........      10,714,827       4,685,472      12,699,124
    Realized gains on
    sale of stock units ........       5,941,906       1,700,921         978,321
    Unrealized appreciation
    (depreciation) of
      investments ..............      47,385,034      56,613,954    (18,331,342)
                                    ------------    ------------    ------------
                                     231,490,976     137,367,738      35,555,625
                                    ------------    ------------    ------------
  Deductions:
    Paid on account
    of participations
    redeemed ...................      95,197,345      35,780,396      24,442,332

    Semi-annual
     distributions of
     principal (Note 3(b)) .....         578,409       1,459,632       2,065,563
                                    ------------    ------------    ------------
                                      95,775,754      37,240,028      26,507,895
                                    ------------    ------------    ------------
    Net change
     in principal account ......     135,715,222     100,127,710       9,047,730
                                    ------------    ------------    ------------
Net assets at
  beginning of year:
    Income and
      distributable fund .......         432,414         378,864         321,930
    Principal account ..........     256,034,678     155,906,968     146,859,238
                                    ------------    ------------    ------------
                                     256,467,092     156,285,832     147,181,168
                                    ------------    ------------    ------------
Net assets at
  end of year:
    Income and
      distributable fund .......         545,233         432,414         378,864
    Principal account ..........     391,749,900     256,034,678     155,906,968
                                    ------------    ------------    ------------
                                    $392,295,133    $256,467,092    $156,285,832
                                    ============    ============    ============
    


See Notes to Financial Statements.


                                       18

<PAGE>

LEXINGTON CORPORATE LEADERS TRUST FUND
STATEMENT OF INVESTMENTS December 31, 1996

                                         Number                        Market
Securities                              of Shares        Cost           Value
-------------------                     ---------      ---------       ---------

CONSUMER PRODUCTS: (17.3%)
American Brands, Inc. ..........         278,900    $ 10,450,174    $ 13,840,413
Eastman Kodak Co. ..............         278,900      14,471,365      22,381,725
Procter & Gamble Co. ...........         278,900      17,161,874      29,981,750
                                                    ------------    ------------
                                                      42,083,413      66,203,888
                                                    ------------    ------------
OIL INTERNATIONAL: (20.7%)
Chevron Corp. ..................         278,900      13,110,451      18,128,500
Exxon Corp. ....................         278,900      17,511,249      27,332,200
Mobil Corp. ....................         278,900      22,755,150      34,095,525
                                                    ------------    ------------
                                                      53,376,850      79,556,225
                                                    ------------    ------------
CHEMICAL & FERTILIZERS: (9.8%)
duPont (E.I.)
  de Nemours & Co., Inc. .......         278,900      15,990,733      26,321,187
Union Carbide Corp. ............         278,900       7,151,820      11,400,038
                                                    ------------    ------------
                                                      23,142,553      37,721,225
                                                    ------------    ------------
ELECTRICAL EQUIPMENT: (8.6%)
General Electric Co. ...........         278,900      16,143,502      27,576,237
Westinghouse Electric Corp. ....         278,900       5,614,603       5,543,138
                                                    ------------    ------------
                                                      21,758,105      33,119,375
                                                    ------------    ------------
RETAILING: (4.9%)
Sears, Roebuck & Co. ...........         278,900       8,114,543      12,864,262
Woolworth Corp. ................         278,900       5,859,608       6,100,938
                                                    ------------    ------------
                                                      13,974,151      18,965,200
                                                    ------------    ------------
UTILITIES: (6.5%)
Consolidated Edison
  Co. of N.Y., Inc. ............         278,900       7,931,764       8,157,825
Pacific Gas & Electric Co. .....         278,900       7,179,327       5,856,900
Union Electric Company .........         278,900       9,606,266      10,737,650
                                                    ------------    ------------
                                                      24,717,357      24,752,375
                                                    ------------    ------------
RAILROADS: (8.1%)
Burlington Northern Santa Fe ...         166,014       9,395,456      14,339,459
Union Pacific Corp. ............         278,900      10,407,538      16,768,863
                                                    ------------    ------------
                                                      19,802,994      31,108,322
                                                    ------------    ------------
ENERGY: (8.2%)
Columbia Gas Systems, Inc. .....         278,900      10,361,691      17,745,012
Union Pacific
  Resources Group Inc. . .......         237,667       5,070,486       6,951,760
USX Marathon Group .............         278,900       5,840,610       6,658,738
                                                    ------------    ------------
                                                      21,272,787      31,355,510
                                                    ------------    ------------
MISC. INDUSTRIAL: (8.2%)
AlliedSignal Corp. .............         278,900      11,240,594      18,686,300
Praxair, Inc. ..................         278,900       6,362,448      12,864,262
                                                    ------------    ------------
                                                      17,603,042      31,550,562
                                                    ------------    ------------
COMMUNICATIONS: (4.4%)
A T & T Corp. ..................         278,900       9,931,761      12,132,150
Lucent Technologies Inc. .......         100,160       4,343,760       4,632,400
                                                    ------------    ------------
                                                      14,275,521      16,764,550
                                                    ------------    ------------
FINANCIAL: (3.3%)
Travelers Group Inc. ...........         278,900       7,488,438      12,655,087
                                                    ------------    ------------
      TOTAL INVESTMENTS (100%) .                    $259,495,211    $383,752,319
                                                    ============    ============
* Non Income producing.

See Notes to Financial Statements.

  


                                       19
<PAGE>

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, 1996, the  distributions  from
     net  investment  income were $.28047 per  participation  and, from realized
     gains, were $.27318 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, 1996, the distributions from return of capital were
     $.17214 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  $138,352 for the year
ended  December  31,  1996.  The Trust pays an  administrative  fee to Lexington
Management Corporation (Sponsor) equal, on an annual basis, to 0.40% (.35% prior
to May 1, 1996) of the average daily net assets of the Trust.

5. INVESTMENT TRANSACTIONS

     During the year ended December 31, 1996, the cost of purchases and proceeds
of sales of  investment  securities,  other than  short-term  obligations,  were
$99,232,310 and $19,044,457, 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,  1996,  net  unrealized   appreciation  of  portfolio
securities   was   $124,257,108,   comprised  of  unrealized   appreciation   of
$125,651,000 and unrealized depreciation of $1,393,892.

                                       20
<PAGE>


6. SOURCE OF NET ASSETS

As of December 31, 1996, 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 ............   $224,775,285
Cumulative amount of non-distributable realized
gains retained in Principal Account .............................     42,717,507
Unrealized appreciation in value of securities ..................    124,257,108
                                                                     -----------
  Principal account .............................................    391,749,900
  Income and distributable fund .................................        545,233
                                                                     -----------
    Total net assets ............................................   $392,295,133
                                                                    ============
7. PARTICIPATIONS ISSUED AND REDEEMED

     During the periods  indicated,  participations  were issued and redeemed as
follows:

                                           Number of Participations
                                            Year ended December 31,
                                   ---------------------------------------------
   
                                            1996          1995            1994
                                          -------       -------         -------
Issued on payments from Holders ....    11,313,596     5,797,609      3,324,643
Issued on reinvestment
  of distributions .................       919,816       914,327      2,100,371
Redeemed ...........................    (6,457,089)   (2,910,131)    (2,072,895)
                                        ----------    ----------     ----------
    Net increase ...................     5,776,323     3,801,805      3,352,119
                                         =========     =========      =========
    

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, New Jersey 07663

DISTRIBUTOR
--------------------------------------------------------------------------------
LEXINGTON FUNDS DISTRIBUTOR, INC.
P.O. Box 1515/Park 80 West Plaza Two
Saddle Brook, New Jersey 07663

   
TRUSTEE
--------------------------------------------------------------------------------
STATE STREET BANK AND TRUST COMPANY
MUTUAL FUND SERVICES AREA
Lexington Corporate Leaders Trust Fund
225 Franklin Street
Boston, Massachusetts 02110
    

--------------------------------------------------------------------------------
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
LEXINGTON FUNDS
1004 BALTIMORE
KANSAS CITY, MISSOURI 64105

OR CALL TOLL FREE:
SERVICE: 1-800-526-0056
INSTITUTIONAL/FINANCIAL ADVISER SERVICES:
  1-800-367-9160
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 ..............................................    11
Resignation, Removal and Limitations on Liability
  of Sponsor ...........................................................    11
Miscellaneous ..........................................................    12
Nonstandard Investment Return ..........................................    14
Financial Statements ...................................................    15
    

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

                                   LEXINGTON
                                   CORPORATE
                                    LEADERS
                                     TRUST
                                      FUND

       --------------------------------o----------------------------------

                  o No sales charge
                  o No redemption fees
                  o Created in 1935
                  o Blue chip stocks
                  o Free telephone
                    exchange privilege

       --------------------------------o----------------------------------

                               The Lexington Group
                                       of
                                    NO-LOAD
                              Investment Companies

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

                                   PROSPECTUS
                                 APRIL 30, 1997