As filed with the Securities and Exchange Commission on September 12, 1996
File Nos. 2-90518
811-4006
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 22
AND
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 23
LANDMARK FUNDS I*
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
6 ST. JAMES AVENUE, BOSTON, MASSACHUSETTS 02116
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 617-423-1679
PHILIP W. COOLIDGE, 6 ST. JAMES AVENUE, BOSTON, MASSACHUSETTS 02116
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO:
ROGER P. JOSEPH, BINGHAM, DANA & GOULD LLP, 150 FEDERAL STREET,
BOSTON, MASSACHUSETTS 02110
It is proposed that this filing will become effective on November 26, 1996
pursuant to paragraph (a) of Rule 485, or such earlier date on which the
Commission may declare this filing effective pursuant to subparagraph (3) of
Rule 485(a).
Pursuant to Rule 24f-2, Registrant has registered an indefinite number of
its Shares of Beneficial Interest (without par value) under the Securities Act
of 1933 and filed a Rule 24f-2 Notice on February 28, 1996 for Registrant's
fiscal year ended December 31, 1995.
*This filing relates only to shares of Landmark Small Cap Equity VIP Fund.
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LANDMARK FUNDS I
(LANDMARK SMALL CAP EQUITY VIP FUND)
REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET
N-1A N-1A ITEM LOCATION
ITEM No.
PROSPECTUS
PART A
Item 1. Cover Page...................... Cover Page
Item 2. Synopsis........................ Not Applicable
Item 3. Condensed Financial Information. Not Applicable
Item 4. General Description of Registrant Investment Information; General
Information; Appendix
Item 5. Management of the Fund.......... Management; Expenses
Item 5A. Management's Discussion of Fund
Performance..................... Not Applicable
Item 6. Capital Stock and Other Securities General Information;
Purchase and Redemption
of Shares; Dividends and
Distributions; Tax Matters
Item 7. Purchase of Securities Being Purchase and Redemption
Offered......................... of Shares
Item 8. Redemption or Repurchase........ Purchase and Redemption
of Shares
Item 9. Pending Legal Proceedings....... Not Applicable
STATEMENT OF
ADDITIONAL
PART B INFORMATION
Item 10. Cover Page...................... Cover Page
Item 11. Table of Contents............... Cover Page
Item 12. General Information and History. The Trust
Item 13. Investment Objectives and Policies Investment Objective and
Policies; Description of
Permitted Investments and
Investment Practices;
Investment Restrictions
Item 14. Management of the Fund.......... Management
Item 15. Control Persons and Principal
Holders of Securities........... Management
Item 16. Investment Advisory and Other Management
Services........................
Item 17. Brokerage Allocation and Other Portfolio Transactions
Practices.......................
Item 18. Capital Stock and Other Securities Description of Shares,
Voting Rights and Liabilities
Item 19. Purchase, Redemption and Pricing
of Securities Description of Shares,
Being Offered................... Voting Rights and
Liabilities; Determinatuion of
Net Asset Value; Valuation of
Securities; Additional Redemption
Information
Item 20. Tax Status...................... Certain Additional Tax Matters
Item 21. Underwriters.................... Management
Item 22. Calculation of Performance Data. Performance Information
Item 23. Financial Statements............ Not Applicable
<PAGE>
PART C Information required to be included
in Part C is set forth under the
appropriate Item, so numbered, in Part C
to this Registration Statement.
<PAGE>
Prospectus
__________ __, 1996
LANDMARK SMALL CAP EQUITY VIP FUND
Landmark Small Cap Equity VIP Fund (the "Fund") is an investment vehicle
for variable annuity contracts and variable life insurance policies offered by
the separate accounts ("Separate Accounts") of participating life insurance
companies ("Participating Insurance Companies").
The Fund's objective is long-term capital growth; dividend income, if any,
is incidental to this investment objective. The Fund invests primarily in
stocks of U.S. issuers that have small market capitalizations (i.e., $750
million or less). In this Prospectus these companies are called "small cap
companies." In addition, the Fund may invest in companies that are believed to
be emerging companies relative to their potential markets. There is, of course,
no assurance that the Fund will achieve its investment objective.
Citibank, N.A. ("Citibank" or the "Manager") is the investment manager for
the Fund. PROSPECTIVE INVESTORS SHOULD BE AWARE THAT SHARES OF THE FUND ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, CITIBANK, N.A. OR ANY
OF ITS AFFILIATES, ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, AND INVOLVE INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL
AMOUNT INVESTED.
Shares of the Fund are not offered to the general public but may only be
purchased by the Separate Accounts of Participating Insurance Companies for the
purpose of funding variable annuity contracts and variable life insurance
policies.
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.
This Prospectus concisely sets forth information about the Fund that a
prospective investor should know before investing. A Statement of Additional
Information dated __________ __, 1996 (and incorporated by reference in this
Prospectus) has been filed with the Securities and Exchange Commission. Copies
of the Statement of Additional Information may be obtained without charge, and
further inquiries about the Fund may be made, by contacting the Fund's
distributor at (617) 423-1679 or a Participating Insurance Company.
INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.
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TABLE OF CONTENTS
Page
Investment Information
Risk Considerations
Valuation of Shares
Purchase and Redemption of Shares
Dividends and Distributions
Management
Tax Matters
Performance Information
General Information
Appendix--Permitted Investments and Investment Practices A-1
<PAGE>
INVESTMENT INFORMATION
INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term capital growth, Dividend
income, if any, is incidental to this investment objective.
The investment objective of the Fund may be changed by its Trustees
without approval by the Fund's shareholders, but shareholders will be given
written notice at least 30 days before any change is implemented. Of course,
there can be no assurance that the Fund will achieve its investment objective.
INVESTMENT POLICIES
The Fund seeks its objective by investing in a diversified portfolio
consisting primarily of equity securities of U.S. companies that have small
market capitalizations. Under normal circumstances, at least 65% of the Fund's
total assets is invested in equity securities of these companies. Small market
capitalization companies are those with market capitalizations of $750 million
or less at the time of the Fund's investment. In addition, the Fund may invest
in companies that are believed to be emerging companies relative to their
potential markets.
The Manager may also select other securities for the Fund that it believes
provide an opportunity for appreciation, such as fixed income securities and
convertible and non-convertible bonds. Most of the Fund's long-term
non-convertible debt investments are investment grade securities, and less than
5% of the Fund's investments consist of securities rated Baa by Moody's
Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's Ratings Group
("S&P").
ADDITIONAL INVESTMENT POLICIES
NON-U.S. SECURITIES. While the Fund emphasizes U.S. securities, the Fund
may invest a portion of its assets in non-U.S. equity and debt securities,
including depository receipts. The Fund does not intend to invest more than 25%
of its assets in non-U.S. securities, including sponsored American Depositary
Receipts, which represent the right to receive securities of non-U.S. issuers
deposited in a U.S. or correspondent bank. The Fund may invest up to 5% of its
assets in closed-end investment companies which primarily hold non-U.S.
securities.
TEMPORARY INVESTMENTS. During periods of unusual economic or market
conditions or for temporary defensive purposes or liquidity, the Fund may
invest without limit in cash and in U.S. dollar-denominated high quality money
market and short-term instruments. These investments may result in a lower
yield than would be available from investments with a lower quality or longer
term.
OTHER PERMITTED INVESTMENTS. For more information regarding the Fund's
permitted investments and investment practices, see Appendix A -- Permitted
Investments and Investment Practices on page A-1. The Fund will not necessarily
invest or engage in each of the investments and investment practices in
Appendix A but reserves the right to do so.
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INVESTMENT RESTRICTIONS. The Statement of Additional Information contains
a list of specific investment restrictions which govern the investment policies
of the Fund, including a limitation that the Fund may borrow money from banks
in an amount not to exceed 1/3 of the Fund's net assets for extraordinary or
emergency purposes (e.g., to meet redemption requests). Except as otherwise
indicated, the Fund's investment objective and policies may be changed without
shareholder approval. If a percentage or rating restriction (other than a
restriction as to borrowing) is adhered to at the time an investment is made, a
later change in percentage or rating resulting from changes in the Fund's
securities will not be a violation of policy.
PORTFOLIO TURNOVER. Securities of the Fund will be sold whenever it is
appropriate to do so in light of the Fund's investment objective, without
regard to the length of time a particular security may have been held. The
turnover rate for the Fund is not expected to exceed 100% annually. The amount
of brokerage commissions and realization of taxable capital gains will tend to
increase as the level of portfolio activity increases.
BROKERAGE TRANSACTIONS. The primary consideration in placing the Fund's
security transactions with broker-dealers for execution is to obtain and
maintain the availability of execution at the most favorable prices and in the
most effective manner possible.
STATE INSURANCE REGULATION. The Fund provides an investment vehicle for
variable annuity contracts and variable life insurance policies to be offered
by the Separate Accounts of Participating Insurance Companies. Certain states
have regulations concerning concentration of investments and purchase and sale
of futures contracts, among other techniques. If these regulations are applied
to the Fund, the Fund may be limited in its ability to engage in such
techniques and to manage its investments with the flexibility provided herein.
It is the Fund's intention to operate in material compliance with current
insurance laws and regulations, as applied in each jurisdiction in which
contracts or policies of Separate Accounts of Participating Insurance Companies
are offered.
CERTAIN RISK CONSIDERATIONS
The risks of investing in the Fund vary depending upon the nature of the
securities held, and the investment practices employed, on its behalf. Certain
of these risks are described below.
CHANGES IN NET ASSET VALUE. The Fund's net asset value will fluctuate
based on changes in the values of the underlying portfolio securities. This
means that an investor's shares may be worth more or less at redemption than at
the time of purchase. Equity securities fluctuate in response to general market
and economic conditions and other factors, including actual and anticipated
earnings, changes in management, political developments and the potential for
takeovers and acquisitions. During periods of rising interest rates the value
of debt securities generally declines, and during periods of falling rates the
value of these securities generally increases. Changes by recognized rating
agencies in the rating of any debt security, and actual or perceived changes in
an issuer's ability to make principal or interest payments, also affect the
value of these investments.
CREDIT RISK OF DEBT SECURITIES. Investors should be aware that securities
offering above average yields may at times involve above average risks.
Securities rated Baa by Moody's or BBB by S&P and equivalent securities may
have speculative characteristics. Adverse economic or changing circumstances
are more likely to lead to a weakened capacity to make principal and interest
payments than is the case for higher grade obligations.
<PAGE>
SMALL CAP COMPANIES. Investors in the Fund should be aware that the
securities of companies with small market capitalizations may have more risks
than the securities of other companies. Small cap companies may be more
susceptible to market downturns or setbacks because they may have limited
product lines, markets, distribution channels, and financial and management
resources. Further, there is often less publicly available information about
small cap companies than about more established companies. As a result of these
and other factors, the prices of securities issued by small cap companies may
be volatile. Shares of the Fund, therefore, may be subject to greater
fluctuation in value than shares of an equity fund with more of its investments
in securities of larger, more established companies.
NON-U.S. SECURITIES. Investments in non-U.S. securities involve risks
relating to political, social and economic developments abroad, as well as
risks resulting from the differences between the regulations to which U.S. and
non-U.S. issuers and markets are subject. These risks may include
expropriation, confiscatory taxation, withholding taxes on dividends and
interest, limitations on the use or transfer of portfolio assets and political
or social instability. Enforcing legal rights may be difficult, costly and slow
in non-U.S. countries, and there may be special problems enforcing claims
against non-U.S. governments. In addition, non-U.S. companies may not be
subject to accounting standards or governmental supervision comparable to U.S.
companies, and there may be less public information about their operations.
Non-U.S. markets may be less liquid and more volatile than U.S. markets, and
may offer less protection to investors such as the Fund. Prices at which the
Fund may acquire securities may be affected by trading by persons with material
non-public information and by securities transactions by brokers in
anticipation of transactions by the Fund.
Because non-U.S. securities often are denominated in currencies other than
the U.S. dollar, changes in currency exchange rates will affect the Fund's net
asset value, the value of dividends and interest earned and gains and losses
realized on the sale of securities. In addition, some non-U.S. currency values
may be volatile and there is the possibility of governmental controls on
currency exchanges or governmental intervention in currency markets.
The costs attributable to non-U.S. investing, such as the costs of
maintaining custody of securities in non-U.S. countries, frequently are higher
than those involved in U.S. investing. As a result, the operating expense
ratios of the Fund may be higher than those of investment companies investing
exclusively in U.S. securities.
The Fund may invest in securities of issuers in developing countries, and
all of these risks are increased for investments in issuers in developing
countries.
INVESTMENT PRACTICES. Certain of the investment practices employed for the
Fund may entail certain risks. These risks are in addition to the risks
described above and are described in Appendix A. See Appendix A -- Permitted
Investments and Investment Practices on page A-1.
VALUATION OF SHARES
Net asset value per share of the Fund is determined each day the New York
Stock Exchange is open for trading (a "Business Day"). This determination is
made once each day as of the close of regular trading on the Exchange (normally
<PAGE>
4:00 p.m. Eastern time) by adding the market value of all securities and other
assets of the Fund, then subtracting the liabilities charged to the Fund, and
then dividing the result by the number of outstanding shares of the Fund.
Portfolio securities and other assets are valued primarily on the basis of
market quotations, or if quotations are not available, by a method believed to
accurately reflect fair value. Non-U.S. securities are valued based on
quotations from the primary market in which they are traded and are translated
from the local currency into U.S. dollars using current exchange rates. In
light of the non-U.S. nature of some of the Fund's investments, trading may
take place in securities held by the Fund on days which are not Business Days
and on which it will not be possible to purchase or redeem shares of the Fund.
PURCHASE AND REDEMPTION OF SHARES
Investors may not purchase or redeem shares of the Fund directly, but only
through variable annuity contracts and variable life insurance policies offered
through the Separate Accounts of Participating Insurance Companies. Investors
should refer to the prospectus of the Participating Insurance Company's
Separate Account for information on how to purchase a variable annuity contract
or variable life insurance policy, how to select the Fund as an investment
option for the applicable contract or policy and how to redeem monies from the
applicable contract or policy.
The Separate Accounts of the Participating Insurance Companies place
orders to purchase and redeem shares of the Fund based on, among other things,
the amount of premium payments to be invested and the amount of surrender and
transfer requests (as defined in the prospectus describing the variable annuity
contracts and variable life insurance policies issued by the Participating
Insurance Companies) to be effected on that day pursuant to variable annuity
contracts and variable life insurance policies. Orders received by the Fund are
effected on Business Days only. Orders for the purchase of shares of the Fund
are effected at the net asset value per share next calculated after an order is
received in proper form by the Fund or its designee so long as payment for the
shares is received by the end of the next Business Day. Redemptions are
effected at the net asset value per share next calculated after receipt in
proper form of a redemption request by the Fund or its designee. For purposes
of the purchase and redemption of shares of the Fund, the Separate Account of a
Participating Insurance Company shall be a designee of the Fund for receipt of
requests for purchase and redemption, and receipt by such designee shall
constitute receipt by the Fund, provided that the Fund receives notice of such
requests in accordance with applicable requirements on the next following
Business Day. Separate Accounts must transmit purchase and redemption orders
promptly. Payment for redemptions will be made by the Fund within seven days
after the request is received. The Fund may suspend the right of redemption
under certain extraordinary circumstances in accordance with the rules of the
Securities and Exchange Commission.
The Fund does not assess any sales charges or redemption fees. Sales
charges, mortality and expense risk fees and other charges may be assessed by
Participating Insurance Companies under the variable annuity contracts or
variable life insurance policies. The Participating Insurance Companies are
required to describe these fees in the prospectuses for the contracts or
policies.
Shares of the Fund may be sold to and held by Separate Accounts that fund
variable annuity and variable life insurance contracts issued by both
affiliated and unaffiliated Participating Insurance Companies. The Fund
currently does not foresee any disadvantages to the holders of variable annuity
<PAGE>
contracts and variable life insurance policies of affiliated and unaffiliated
Participating Insurance Companies arising from the fact that interests of the
holders of variable annuity contracts and variable life insurance policies may
differ due to differences of tax treatment or other considerations or due to
conflicts between the affiliated or unaffiliated Participating Insurance
Companies. Nevertheless, the Trustees will monitor events to seek to identify
any material irreconcilable conflicts which may possibly arise and to determine
what action, if any, should be taken in response to such conflicts. Should a
material irreconcilable conflict arise between the holders of variable annuity
contracts and variable life insurance policies of affiliated or unaffiliated
Participating Insurance Companies, the Participating Insurance Companies may be
required to withdraw the assets allocable to some or all of the Separate
Accounts from the Fund. Any such withdrawal could disrupt orderly portfolio
management to the potential detriment of such holders. The variable annuity
contracts and variable life insurance policies are described in the separate
prospectuses issued by the Participating Insurance Companies. The Fund assumes
no responsibility for such prospectuses.
DIVIDENDS AND DISTRIBUTIONS
Substantially all of the Fund's net income from dividends and interest is
distributed annually on or about the last day of December. Net realized
short-term and long-term capital gains, if any, will be distributed annually,
in December. The Fund may also make additional distributions to the extent
necessary to avoid the application of the 4% non-deductible excise tax on
certain undistributed income and net capital gains of mutual funds.
All dividends and distributions will be automatically reinvested in
additional shares of the Fund issued at the net asset value of such shares on
the payment date of such dividends and distributions.
MANAGEMENT
TRUSTEES AND OFFICERS
The Fund is supervised by the Board of Trustees of Landmark Funds I. A
majority of the Trustees are not affiliated with Citibank. More information on
the Trustees and officers of the Fund appears under "Management" in the
Statement of Additional Information.
INVESTMENT MANAGER
Citibank. The Fund draws on the strength and experience of Citibank.
Citibank offers a wide range of banking and investment services to customers
across the United States and throughout the world, and has been managing money
since 1822. Its portfolio managers are responsible for investing in money
market, equity and fixed income securities. Citibank and its affiliates manage
more than $83 billion in assets worldwide. Citibank is a wholly-owned
subsidiary of Citicorp. Citibank also serves as investment adviser to other
registered investment companies. Citibank's address is 153 East 53rd Street,
New York, New York 10043.
Citibank manages the Fund's assets pursuant to a Management Agreement.
Subject to policies set by the Trustees, Citibank is responsible for overall
management of the Fund's business affairs, and has a Management Agreement with
the Fund. Citibank also provides certain administrative services to the Fund.
These administrative services include providing general office facilities and
<PAGE>
supervising the overall administration of the Fund. Pursuant to a
sub-administrative services agreement, the Distributor performs such
sub-administrative duties for the Fund as from time to time are agreed upon by
Citibank and the Distributor. The Distributor's compensation as
sub-administrator is paid by Citibank.
David N. Pearl manages the Fund. Mr. Pearl is a portfolio manager of U.S.
equity assets for institutional clients, and joined Citibank in 1994. Prior to
joining Citibank he worked as a portfolio manager at both Fleming Capital
Management and Bankers Trust Company.
Management Fees. For its services under the Management Agreement, Citibank
receives a fee, which is accrued daily and paid monthly, of 0.80% of the Fund's
average daily net assets on an annualized basis for the Fund's then-current
fiscal year. This fee is higher than those paid by most investment companies.
Citibank may voluntarily agree to waive a portion of its investment advisory
fee.
Banking Relationships. Citibank and its affiliates may have deposit, loan
and other relationships with the issuers of securities purchased on behalf of
the Fund, including outstanding loans to such issuers which may be repaid in
whole or in part with the proceeds of securities so purchased. Citibank has
informed the Fund that, in making its investment decisions, it does not obtain
or use material inside information in the possession of any division or
department of Citibank or in the possession of any affiliate of Citibank.
Bank Regulatory Matters. The Glass-Steagall Act prohibits certain
financial institutions, such as Citibank, from underwriting securities of
open-end investment companies, such as the Fund. Citibank believes that its
services under the Management Agreement and the activities performed by it as
administrator are not underwriting and are consistent with the Glass-Steagall
Act and other relevant federal and state laws. However, there is no controlling
precedent regarding the performance of the combination of investment advisory
and administrative activities by banks. State laws on this issue may differ
from applicable federal law and banks and financial institutions may be
required to register as dealers pursuant to state securities laws. Changes in
either federal or state statutes or regulations, or in their interpretations,
could prevent Citibank or its affiliates from continuing to perform these
services for the Fund. If Citibank or its affiliates were to be prevented from
acting as the Manager or administrator, the Fund would seek alternative means
for obtaining these services. The Fund does not expect that shareholders would
suffer any adverse financial consequences as a result of any such occurrence.
DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS"), 6 St. James
Avenue, Boston, Massachusetts 02116 (telephone: (617) 423-1679), is the
distributor of shares of the Fund. LFBDS receives no fee for its distribution
services.
LFBDS is a wholly-owned subsidiary of Signature Financial Group, Inc.
"Landmark" is a service mark of LFBDS.
CUSTODIAN, TRANSFER AGENT AND FUND ACCOUNTANT
State Street Bank and Trust Company acts as transfer agent, dividend
disbursing agent and custodian for the Fund. Securities may be held by a
sub-custodian bank approved by the Trustees. State Street also provides certain
<PAGE>
fund accounting services and calculates the daily net asset value for the
Funds. The principal business address of State Street is 225 Franklin Street,
Boston, Massachusetts 02110.
TAX MATTERS
This discussion of the federal income taxation of the Fund and its
distributions is for general information only. Purchasers of variable annuity
contracts or variable life insurance policies issued by Participating Insurance
Companies should refer to the prospectuses for those contracts or policies for
additional tax information and should consult their own tax advisers about
their particular situations.
The Fund will be treated as a separate entity for federal income tax
purposes. The Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
which would relieve the Fund of liability for Federal income and excise taxes
to the extent the Fund's earnings are distributed in accordance with the timing
requirements of the Code. In order to so qualify, the Fund must comply with
certain distribution, diversification, source of income, holding period, and
other applicable requirements. If for any taxable year the Fund does not
qualify for the special Federal tax treatment afforded regulated investment
companies, all of the Fund's taxable income would be subject to tax at regular
corporate rates without any deduction for distributions to shareholders. In
such event, the Fund's distributions to segregated asset accounts holding
shares of the Fund would be taxable as ordinary income to the extent of the
Fund's current and accumulated earnings and profits. A failure of the Fund to
qualify as a regulated investment company could also have the adverse effects
on investors noted below.
A segregated asset account upon which a variable annuity contract or
variable life insurance policy is based must meet certain diversification tests
set forth in U.S. Treasury regulations. If, as is intended, the Fund meets
these tests and complies with certain other conditions, a segregated asset
account investing solely in shares of the Fund will also be deemed to meet
these diversification requirements. However, a failure of the Fund to qualify
as a regulated investment company or to meet such conditions and to comply with
such tests could cause the owners of variable annuity contracts and variable
life insurance policies based on such accounts to recognize ordinary income
each year in the amount of any net appreciation of such contract or policy
during the year (including the annual costs of life insurance, if any, provided
under such policy).
Provided that the Fund and a segregated asset account investing in the
Fund satisfy the above requirements, any distributions from the Fund will be
exempt from current Federal income taxation to the extent that such
distributions accumulate in a variable annuity contract or a variable life
insurance contract.
The foregoing discussion of federal income tax consequences is based on
tax laws and regulations in effect on the date of this Prospectus and is
subject to change by legislative or administrative action.
PERFORMANCE INFORMATION
Fund performance may be quoted in advertising, shareholder reports and
other communications in terms of yield or total rate of return. All performance
information is historical and is not intended to indicate future performance.
Yield and total rates of return fluctuate in response to market conditions and
other factors, and the value of an investor's shares when redeemed may be more
or less than their original cost.
<PAGE>
The Fund may provide its period and average annualized "total rates of
return." The "total rate of return" refers to the change in the value of an
investment in the Fund over a stated period which was made at the maximum
public offering price and reflects any change in net asset value per share and
is compounded to include the value of any shares purchased with any dividends
or capital gains declared during such period. Period total rates of return may
be "annualized." An "annualized" total rate of return assumes that the period
total rate of return is generated over a one-year period.
The Fund may provide annualized "yield" quotations. The "yield" of the
Fund refers to the income generated by an investment in the Fund over a 30-day
or one-month period (which period is stated in any such advertisement or
communication). This income is then annualized; that is, the amount of income
generated by the investment over that period is assumed to be generated each
month over a one-year period and is shown as a percentage of the maximum public
offering price on the last day of that period. A "yield" quotation, unlike a
total rate of return quotation, does not reflect changes in net asset value.
Yields and total returns quoted for the Fund include the effect of
deducting the Fund's expenses, but may not include charges and expenses
attributable to a particular variable annuity contract or variable life
insurance policy. Since shares of the Fund can be purchased only through a
variable annuity contract or variable life insurance policy, a prospective
purchaser should carefully review the prospectus of the variable annuity
contract or variable life insurance policy he or she has chosen for information
on relevant charges and expenses. Including these charges in the quotations of
the Fund's yield and total return would have the effect of decreasing
performance. Performance information for the Fund must always be accompanied
by, and be reviewed with, performance information for the insurance product
which invests in the Fund. See the Statement of Additional Information for more
information concerning the calculation of yield and total rate of return
quotations for the Fund.
GENERAL INFORMATION
ORGANIZATION
The Fund is a newly established series of Landmark Funds I, an open-end
investment company organized as a Massachusetts business trust on April 13,
1984.
The Fund is a diversified mutual fund. Under the 1940 Act, a diversified
mutual fund must invest at least 75% of its assets in cash and cash items, U.S.
Government securities, investment company securities and other securities
limited as to any one issuer to not more than 5% of the total assets of the
investment company and not more than 10% of the voting securities of the
issuer.
Under Massachusetts law, shareholders of a business trust may, under
certain circumstances, be held personally liable as partners for the trust's
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the trust itself was unable to meet its
obligations.
VOTING AND OTHER RIGHTS
The Fund may issue an unlimited number of shares (without par value), may
<PAGE>
create new series of shares and may divide shares in each series into
classes. Each share of the Fund gives the shareholder one vote in Trustee
elections and other matters submitted to shareholders for vote. All shares of
each series of Landmark Funds I have equal voting rights except that, in
matters affecting only a particular Fund, only shares of that particular Fund
are entitled to vote.
The Fund's activities are supervised by the Board of Trustees of Landmark
Funds I. As series of a Massachusetts business trust, the Fund is not required
to hold annual shareholder meetings. Shareholder approval will usually be
sought only for changes in the Fund's fundamental investment restrictions and
for the election of Trustees under certain circumstances. Trustees may be
removed by shareholders under certain circumstances. Each share of the Fund is
entitled to participate equally in dividends and other distributions and the
proceeds of any liquidation of the Fund.
The rights accompanying Fund shares are legally vested in the Separate
Accounts. However, in accordance with current law and interpretations thereof,
Participating Insurance Companies will vote shares held in the Separate
Accounts in a manner consistent with timely voting instructions received from
the holders of variable annuity contracts and variable life insurance policies.
Each Participating Insurance Company will vote Fund shares held in Separate
Accounts for which no timely instructions are received from the holders of
variable annuity contracts and variable life insurance policies, as well as
shares it owns, in the same proportion as those shares for which voting
instructions are received. For a further discussion, please refer to the
insurance company's Separate Account prospectus.
CERTIFICATES
The Fund's Transfer Agent maintains a share register for shareholders of
record, i.e., the Separate Accounts of the Participating Insurance Companies.
Share certificates are not issued.
EXPENSES
In addition to amounts payable under the Management Agreement, up to 0.10%
of the Fund's average daily net assets on an annualized basis for the Fund's
then-current fiscal year may be paid to certain service providers and others in
order to cover Fund operating expenses. Such expenses may include, among other
things, the costs of securities transactions, the compensation of Trustees that
are not affiliated with the Manager or LFBDS, government fees, taxes,
accounting and legal fees, expenses of communicating with shareholders,
interest expense, and insurance premiums.
All fee waivers are voluntary and may be reduced or terminated at any
time.
COUNSEL AND INDEPENDENT AUDITORS
Bingham, Dana & Gould LLP, Boston, Massachusetts, is counsel for the Fund.
Price Waterhouse LLP, located at 160 Federal Street, Boston, Massachusetts
02110, serves as independent auditor for the Fund.
The Statement of Additional Information dated the date hereof contains
more detailed information about the Fund, including information relating to (i)
investment policies and restrictions, (ii) the Trustees, officers and
Administrator, (iii) securities transactions, (iv) the Fund's shares, including
rights and liabilities of shareholders, (v) the method used to calculate
performance information, and (vi) the determination of net asset value.
<PAGE>
No person has been authorized to give any information or make any
representations not contained in this Prospectus or the Statement of Additional
Information in connection with the offering made by this Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Fund or its distributor. This Prospectus does not
constitute an offering by the Fund or its distributor in any jurisdiction in
which such offering may not lawfully be made.
<PAGE>
APPENDIX A
PERMITTED INVESTMENTS AND
INVESTMENT PRACTICES
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements in
order to earn a return on temporarily available cash. Repurchase agreements are
transactions in which an institution sells the Fund a security at one price,
subject to the Fund's obligation to resell and the selling institution's
obligation to repurchase that security at a higher price normally within a
seven day period. There may be delays and risks of loss if the seller is unable
to meet its obligation to repurchase.
REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements. Reverse repurchase agreements involve the sale of securities held
by the Fund and the agreement by the Fund to repurchase the securities at an
agreed-upon price, date and interest payment. When the Fund enters into reverse
repurchase transactions, securities of a dollar amount equal in value to the
securities subject to the agreement will be maintained in a segregated account
with the Fund's custodian. The segregation of assets could impair the Fund's
ability to meet its current obligations or impede investment management if a
large portion of the Fund's assets are involved. Reverse repurchase agreements
are considered to be a form of borrowing.
LENDING OF PORTFOLIO SECURITIES. Consistent with applicable regulatory
requirements and in order to generate additional income, the Fund may lend its
portfolio securities to broker-dealers and other institutional borrowers. Such
loans must be callable at any time and continuously secured by collateral (cash
or U.S. Government securities) in an amount not less than the market value,
determined daily, of the securities loaned. It is intended that the value of
securities loaned by the Fund would not exceed 30% of the Fund's total assets.
In the event of the bankruptcy of the other party to a securities loan,
repurchase agreement or a reverse repurchase agreement, the Fund could
experience delays in recovering either the securities lent or cash. To the
extent that, in the meantime, the value of the securities lent has increased or
the value of the securities purchased has decreased, the Fund could experience
a loss.
RULE 144A SECURITIES. The Fund may purchase restricted securities that are
not registered for sale to the general public if the Manager determines that
there is a dealer or institutional market in the securities. In that case, the
securities will not be treated as illiquid for purposes of the Fund's
investment limitations. The Trustees will review these determinations. These
securities are known as "Rule 144A securities," because they are traded under
SEC Rule 144A among qualified institutional buyers. Institutional trading in
Rule 144A securities is relatively new, and the liquidity of these investments
could be impaired if trading in Rule 144A securities does not develop or if
qualified institutional buyers become, for a time, uninterested in purchasing
Rule 144A securities.
PRIVATE PLACEMENTS AND ILLIQUID INVESTMENTS. The Fund may invest up to 15%
of its net assets in securities for which there is no readily available market.
These illiquid securities may include privately placed restricted securities
for which no institutional market exists. The absence of a trading market can
make it difficult to ascertain a market value for illiquid investments.
Disposing of illiquid investments may involve time-consuming negotiation and
legal expenses, and it may be difficult or impossible for the Fund to sell them
promptly at an acceptable price.
<PAGE>
"WHEN-ISSUED" SECURITIES. In order to ensure the availability of suitable
securities, the Fund may purchase securities on a "when-issued" or on a
"forward delivery" basis, which means that the securities would be delivered to
the Fund at a future date beyond customary settlement time. Under normal
circumstances, the Fund takes delivery of the securities. In general, the Fund
does not pay for the securities until received and does not start earning
interest until the contractual settlement date. While awaiting delivery of the
securities, the Fund establishes a segregated account consisting of cash, cash
equivalents or high quality debt securities equal to the amount of the Fund's
commitments to purchase "when-issued" securities. An increase in the percentage
of the Fund's assets committed to the purchase of securities on a "when-issued"
basis may increase the volatility of its net asset value.
SECURITIES OF ISSUERS IN DEVELOPING COUNTRIES. Shareholders should be
aware that investing in the equity and fixed income markets of developing
countries involves exposure to economic structures that are generally less
diverse and mature, and to political systems which can be expected to have less
stability, than those of developed countries. Historical experience indicates
that the markets of developing countries have been more volatile than the
markets of developed countries with more mature economies; such markets often
have provided higher rates of return, and greater risks. These heightened risks
include (i) greater risks of expropriation, confiscatory taxation and
nationalization, and less social, political and economic stability; (ii) the
small current size of markets for securities of issuers based in developing
countries and the currently low or non-existent volume of trading, resulting in
a lack of liquidity and in price volatility; (iii) certain national policies
which may restrict a Fund's investment opportunities including restrictions on
investing in issuers or industries deemed sensitive to relevant national
interests; and (iv) the absence of developed legal structures. Such
characteristics can be expected to continue in the future.
LOWER-RATED DEBT SECURITIES. The Fund may purchase lower-rated securities
(those rated Baa or better by Moody's or BBB by S&P) which may have poor
protection of payment of principal and interest. These securities are often
considered to be speculative and involve greater risk of default or price
changes than securities assigned a higher quality rating due to changes in the
issuer's creditworthiness. The market prices of these securities may fluctuate
more than higher-rated securities and may decline significantly in periods of
general economic difficulty which may follow periods of rising interest rates.
SHORT SALES "AGAINST THE BOX." In a short sale, a fund sells a borrowed
security and has a corresponding obligation to the lender to return the
identical security. The Fund may engage in short sales only if at the time of
the short sale it owns or has the right to obtain, at no additional cost, an
equal amount of the security being sold short. This investment technique is
known as a short sale "against the box." The Fund may make a short sale as a
hedge, when it believes that the value of a security owned by the Fund (or a
<PAGE>
security convertible or exchangeable for such security) may decline, or when
the Fund wants to sell the security at an attractive current price but wishes
to defer recognition of gain or loss for tax purposes. Not more than 40% of the
Fund's total assets would be involved in short sales "against the box."
<PAGE>
Statement of
Additional Information
__________ __, 1996
LANDMARK SMALL CAP EQUITY VIP FUND
Landmark Funds I (the "Trust") is an investment company which was
organized as a business trust under the laws of the Commonwealth of
Massachusetts on April 13, 1984. The Trust offers shares of Landmark Small Cap
Equity VIP Fund (the "Fund"), as well as the shares of nine other series. The
shares of the Fund are offered only to separate accounts ("Separate Accounts")
of participating life insurance companies ("Participating Insurance Companies")
for the purpose of funding variable annuity contracts and variable life
insurance policies. The address and telephone number of the Trust are 6 St.
James Avenue, Boston, Massachusetts 02116, (617) 423-1679.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, CITIBANK, N.A. OR ANY OF ITS AFFILIATES, ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER AGENCY, AND INVOLVE INVESTMENT
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
Table of Contents
Page
The Trust
Investment Objective and Policies
Description of Permitted Investments and
Investment Practices
Investment Restrictions
Performance Information
Determination of Net Asset Value; Valuation of
Securities; Additional Redemption Information
Management
Portfolio Transactions
Description of Shares, Voting Rights and Liabilities
Certain Additional Tax Matters
Financial Statements
This Statement of Additional Information sets forth information which may
be of interest to investors but which is not necessarily included in the
Trust's Prospectus, dated __________ __, 1996, by which shares of the Fund are
offered. This Statement of Additional Information should be read in conjunction
with the Prospectus, a copy of which may be obtained by an investor without
charge by contacting the Trust's distributor at (617) 423-1679 or a
Participating Insurance Company.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
<PAGE>
1. THE TRUST
Landmark Funds I, the Trust, is an investment company organized as a
business trust under the laws of the Commonwealth of Massachusetts on April 13,
1984. This Statement of Additional Information relates to Landmark Small Cap
Equity VIP Fund, a series of the Trust. The Fund is an investment vehicle for
variable annuity contracts and variable life insurance policies offered by
Separate Accounts of Participating Insurance Companies.
Citibank, N.A. ("Citibank" or the "Manager") is investment adviser and
also provides certain administrative services to the Fund. The Manager manages
the investments of the Fund from day to day in accordance with the Fund's
investment objective and policies. The selection of investments for the Fund
and the way they are managed depend on the conditions and trends in the economy
and the financial marketplaces.
The Board of Trustees of the Trust provides broad supervision over the
affairs of the Fund. Shares of the Fund are continuously sold by The Landmark
Funds Broker-Dealer Services, Inc., the Funds' distributor ("LFBDS" or the
"Distributor"), only to Separate Accounts.
2. INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is long-term capital growth. Dividend
income, if any, is incidental to the Fund's investment objective.
The investment objective of the Fund may be changed by its Trustees
without approval by the Fund's shareholders, but shareholders will be given
written notice at least 30 days before any change is implemented. Of course,
there can be no assurance that the Fund will achieve its investment objective.
The Prospectus contains a discussion of the various types of securities in
which the Fund may invest and the risks involved in such investments. The
following supplements the information contained in the Prospectus concerning
the investment objective, policies and techniques of the Fund.
While it is the policy of the Fund to invest its assets in a broadly
diversified portfolio of equity securities consisting mainly of common stocks
of U.S. issuers, the Fund may also invest in other types of securities such as
fixed income securities and convertible and non-convertible bonds.
The Trust has also adopted the following policies with respect to the
Fund's investments in (i) warrants and (ii) securities of issuers with less
than three years' continuous operation. The Trust's purchases of warrants for
the Fund will not exceed 5% of the Fund's net assets. Included within that
amount, but not exceeding 2% of its net assets, may be warrants which are not
listed on the New York Stock Exchange or the American Stock Exchange. Any such
warrants will be valued at their market value except that warrants which are
attached to securities at the time such securities are acquired for the Fund
will be deemed to be without value for the purpose of this restriction. The
Trust will not invest more than 5% of the Fund's assets in companies which,
including their respective predecessors, have a record of less than three
years' continuous operation.
<PAGE>
3. DESCRIPTION OF PERMITTED INVESTMENTS AND INVESTMENT PRACTICES
REPURCHASE AGREEMENTS
The Fund may invest in repurchase agreements collateralized by securities
in which the Fund may otherwise invest. Repurchase agreements are agreements by
which the Fund purchases a security and simultaneously commits to resell that
security to the seller (which is usually a member bank of the U.S. Federal
Reserve System or a member firm of the New York Stock Exchange (or a subsidiary
thereof)) at an agreed upon date within a number of days (usually not more than
seven) from the date of purchase. The resale price reflects the purchase price
plus an agreed upon market rate of interest which is unrelated to the coupon
rate or maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is in
effect secured by the value of the underlying security, usually U.S. Government
or Government agency issues. Under the Investment Company Act of 1940, as
amended (the "1940 Act"), repurchase agreements may be considered to be loans
by the buyer. The Fund's risk is limited to the ability of the seller to pay
the agreed-upon amount on the delivery date. If the seller defaults, the
underlying security constitutes collateral for the seller's obligation to pay
although the Fund may incur certain costs in liquidating this collateral and in
certain cases may not be permitted to liquidate this collateral. All repurchase
agreements entered into by the Fund are fully collateralized, with such
collateral being marked to market daily.
SECURITIES OF NON-U.S. ISSUERS
The Fund may invest in securities of non-U.S. issuers. Investing in
securities of foreign issuers may involve significant risks not present in
domestic investments. For example, the value of such securities fluctuates
based on the relative strength on the U.S. dollar. In addition, there is
generally less publicly available information about foreign issuers,
particularly those not subject to the disclosure and reporting requirements of
the U.S. securities laws. Non-U.S. issuers are generally not bound by uniform
accounting, auditing and financial reporting requirements comparable to those
applicable to domestic issuers. Investments in securities of non-U.S. issuers
also involve the risk of possible adverse changes in investment or exchange
control regulations, expropriation or confiscatory taxation, limitation on the
removal of funds or other assets of the Fund, political or financial
instability or diplomatic and other developments which would affect such
investments. Further, economies of other countries or areas of the world may
differ favorably or unfavorably from the economy of the U.S.
It is anticipated that in most cases the best available market for
securities of non-U.S. issuers would be on exchanges or in over-the-counter
markets located outside the U.S. Non-U.S. stock markets, while growing in
volume and sophistication, are generally not as developed as those in the U.S.,
and securities of some non-U.S. issuers (particularly those located in
developing countries) may be less liquid and more volatile than securities of
comparable U.S. companies. Non-U.S. security trading practices, including those
involving securities settlement where the Fund's assets may be released prior
to receipt of payments, may expose the Fund to increased risk in the event of a
failed trade or the insolvency of a non-U.S. broker-dealer. In addition,
foreign brokerage commissions are generally higher than commissions on
securities traded in the U.S. and may be non-negotiable. In general, there is
less overall governmental supervision and regulation of non-U.S. securities
exchanges, brokers and listed companies than in the U.S.
Investments in closed-end investment companies which primarily hold
securities of non-U.S. issuers may entail the risk that the market value of
such investments may be substantially less than their net asset value and that
there would be duplication of investment management and other fees and
expenses.
<PAGE>
American Depositary Receipts ("ADRs"), European Depositary Receipts
("EDRs"), Global Depositary Receipts ("GDRs") and other forms of depositary
receipts for securities of non-U.S. issuers provide an alternative method for
the Fund to make non-U.S. investments. These securities are not usually
denominated in the same currency as the securities into which they may be
converted. Generally, ADRs, in registered form, are designed for use in U.S.
securities markets and EDRs and GDRs, in bearer form, are designed for use in
European and global securities markets. ADRs are receipts typically issued by a
U.S. bank or trust company evidencing ownership of the underlying securities.
EDRs and GDRs are European and global receipts, respectively, evidencing a
similar arrangement.
The Fund may invest in securities of non-U.S. issuers that impose
restrictions on transfer within the United States or to United States persons.
Although securities subject to such transfer restrictions may be marketable
abroad, they may be less liquid than securities of non-U.S. issuers of the same
class that are not subject to such restrictions.
<PAGE>
SHORT SALES "AGAINST THE BOX"
In a short sale, a fund sells a borrowed security and has a corresponding
obligation to the lender to return the identical security. The Fund, in
accordance with its investment restrictions, may engage in short sales only if
at the time of the short sale it owns or has the right to obtain, at no
additional cost, an equal amount of the security being sold short. This
investment technique is known as a short sale "against the box."
In a short sale, the seller does not immediately deliver the securities
sold and is said to have a short position in those securities until delivery
occurs. If the Fund engages in a short sale, the collateral for the short
position is maintained for the Fund by the custodian or qualified
sub-custodian. While the short sale is open, an amount of securities equal in
kind and amount to the securities sold short or securities sold convertible
into or exchangeable for such equivalent securities are maintained in a
segregated account for the Fund. These securities constitute the Fund's long
position.
The Fund does not engage in short sales against the box for investment
purposes. The Fund may, however, make a short sale against the box as a hedge,
when it believes that the price of a security may decline, causing a decline in
the value of a security owned by the Fund (or a security convertible or
exchangeable for such security), or when the Fund wants to sell the security at
an attractive current price, but also wishes to defer recognition of gain or
loss for federal income tax purposes or for purposes of satisfying certain
tests applicable to regulated investment companies under the Internal Revenue
Code. In such case, any future losses in the Fund's long position should be
reduced by a gain in the short position. Conversely, any gain in the long
position should be reduced by a loss in the short position. The extent to which
such gains or losses are reduced depends upon the amount of the security sold
short relative to the amount the Fund owns. There are certain additional
transaction costs associated with short sales against the box, but the Fund
endeavors to offset these costs with the income from the investment of the cash
proceeds of short sales.
The Manager does not expect that more than 40% of the Fund's total assets
would be involved in short sales against the box. The Manager does not
currently intend to engage in such sales.
LENDING OF SECURITIES
Consistent with applicable regulatory requirements and in order to
generate income, the Fund may lend its securities to broker-dealers and other
institutional borrowers. Such loans will usually be made only to member banks
of the U.S. Federal Reserve System and to member firms of the New York Stock
Exchange (and subsidiaries thereof). Loans of securities would be secured
continuously by collateral in cash, cash equivalents, or U.S. Treasury
obligations maintained on a current basis at an amount at least equal to the
market value of the securities loaned. The cash collateral would be invested in
high quality short-term instruments. The Fund would have the right to call a
loan and obtain the securities loaned at any time on customary industry
settlement notice (which will not usually exceed three business days). During
the existence of a loan, the Fund would continue to receive the equivalent of
the interest or dividends paid by the issuer on the securities loaned and would
also receive compensation based on investment of cash collateral or a fee from
the borrower in the event the collateral consists of securities. The Fund,
would not, however, have the right to vote any securities having voting rights
during the existence of the loan, but would call the loan in anticipation of an
important vote to be taken among holders of the securities or of the giving or
withholding of their consent on a material matter affecting the investment. As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the collateral should the borrower fail financially. However,
the loans would be made only to entities deemed by the Manager to be of good
<PAGE>
standing, and when, in the judgment of the Manager, the consideration which can
be earned currently from loans of this type justifies the attendant risk. If
the Manager determines to make loans, it is not intended that the value of the
securities loaned would exceed 30% of the value of the Fund's total assets.
WHEN-ISSUED SECURITIES
The Fund may purchase securities on a "when-issued" or on a "forward
delivery" basis. It is expected that, under normal circumstances, the Fund
would take delivery of such securities. When the Fund commits to purchase a
security on a "when-issued" or on a "forward delivery" basis, it sets up
procedures consistent with Securities and Exchange Commission policies. Since
those policies currently require that an amount of the Fund's assets equal to
the amount of the purchase be held aside or segregated to be used to pay for
the commitment, the Fund expects always to have cash, cash equivalents, or high
quality debt securities sufficient to cover any commitments or to limit any
potential risk. However, even though the Fund does not intend to make such
purchases for speculative purposes and intends to adhere to the provisions of
Securities and Exchange Commission policies, purchases of securities on such
bases may involve more risk than other types of purchases. For example, the
Fund may have to sell assets which have been set aside in order to meet
redemptions. Also, if the Manager determines it is advisable as a matter of
investment strategy to sell the "when-issued" or "forward delivery" securities,
the Fund would be required to meet its obligations from the then available cash
flow or the sale of securities, or, although it would not normally expect to do
so, from the sale of the "when-issued" or "forward delivery" securities
themselves (which may have a value greater or less than the Fund's payment
obligation).
RULE 144A SECURITIES
Consistent with applicable investment restrictions, the Fund may purchase
securities that are not registered ("restricted securities") under the
Securities Act of 1933 (the "Securities Act"), but can be offered and sold to
"qualified institutional buyers" under Rule 144A under the Securities Act.
However, the Fund will not invest more than 15% of its net assets in illiquid
investments, which include securities for which there is no readily available
market, securities subject to contractual restrictions on resale and restricted
securities, unless the Board of Trustees of the Trust determines, based on the
trading markets for the specific restricted security, that it is liquid. The
Trustees may adopt guidelines and delegate to the Manager the daily function of
determining and monitoring liquidity of restricted securities. The Trustees,
however, retain sufficient oversight and are ultimately responsible for the
determinations.
Since it is not possible to predict with assurance exactly how the market
for restricted securities sold and offered under Rule 144A will develop, the
Trust's Trustees will carefully monitor the Fund's investments in these
securities, focusing on such factors, among others, as valuation, liquidity and
availability of information. The liquidity of investments in Rule 144A
securities could be impaired if trading in Rule 144A securities does not
develop or if qualified institutional buyers become for a time uninterested in
purchasing Rule 144A securities.
4. INVESTMENT RESTRICTIONS
The Trust, on behalf of the Fund, has adopted the following policies which
may not be changed with respect to the Fund without approval by holders of a
majority of the outstanding voting securities of the Fund, which as used in
this Statement of Additional Information means the vote of the lesser of (i)
67% or more of the outstanding voting securities of the Fund present at a
meeting at which the holders of more than 50% of the outstanding voting
securities of the Fund are present or represented by proxy, or (ii) more than
50% of the outstanding voting securities of the Fund. The term "voting
securities" as used in this paragraph has the same meaning as in the 1940 Act.
<PAGE>
The Fund may not:
(1) Borrow money, except that as a temporary measure for extraordinary or
emergency purposes it may borrow in an amount not to exceed 1/3 of the current
value of its net assets, including the amount borrowed (nor purchase any
securities at any time at which borrowings exceed 5% of the total assets of the
Fund, taken at market value). It is intended that the Fund would borrow money
only from banks and only to accommodate requests for the repurchase of shares
of the Fund while effecting an orderly liquidation of portfolio securities.
(2) Make loans to other persons except (a) through the lending of its
portfolio securities and provided that any such loans not exceed 30% of the
Fund's total assets (taken at market value), (b) through the use of repurchase
agreements or the purchase of short-term obligations or (c) by purchasing all
or a portion of an issue of debt securities of types commonly distributed
privately to financial institutions. The purchase of short-term commercial
paper or a portion of an issue of debt securities which is part of an issue to
the public shall not be considered the making of a loan.
(3) Purchase securities of any issuer if such purchase at the time
thereof would cause with respect to 75% of the total assets of the Fund more
than 10% of the voting securities of such issuer to be held by the Fund, except
that the Fund may invest all or substantially all of its investable assets
in another registered investment company having the same investment objective
and policies and substantially the same investment restrictions as those with
respect to the Fund (a "Qualifying Portfolio").
(4) Purchase securities of any issuer if such purchase at the time thereof
would cause as to 75% of the Fund's total assets more than 5% of the Fund's
assets (taken at market value) to be invested in the securities of such issuer
(other than securities or obligations issued or guaranteed by the United
States, any state or political subdivision thereof, or any political
subdivision of any such state, or any agency or instrumentality of the United
States or of any state or of any political subdivision of any state), except
that the Fund may invest all or substantially all of its investable assets in a
Qualifying Portfolio.
(5) Concentrate its investments in any particular industry, but if it is
deemed appropriate for the achievement of the Fund's investment objective, up
to 25% of its assets, at market value at the time of each investment, may be
invested in any one industry.
(6) Underwrite securities issued by other persons, except that all the
assets of the Fund may be invested in a Qualifying Portfolio and except in so
far as the Fund may technically be deemed an underwriter under the Securities
Act in selling a security.
(7) Purchase or sell real estate (including limited partnership interests
but excluding securities secured by real estate or interests therein),
interests in oil, gas or mineral leases, commodities or commodity contracts in
the ordinary course of business (the Fund reserves the freedom of action to
hold and to sell real estate acquired as a result of the ownership of
securities by the Fund).
(8) Issue any senior security (as that term is defined in the 1940 Act) if
such issuance is specifically prohibited by the 1940 Act or the rules and
regulations promulgated thereunder, except as appropriate to evidence a debt
incurred without violating Investment Restriction (1) above.
<PAGE>
NON-FUNDAMENTAL RESTRICTIONS
The Fund does not as a matter of operating policy:
(i) borrow money in excess of 10% of the total assets of the Fund (taken
at cost), except that the Fund may borrow up to 25% of its total assets when
such borrowing is necessary to meet redemption requests (moreover, the Fund
will not purchase any securities for the Fund at any time at which borrowings
exceed 5% of the total assets of the Fund (taken at market value)),
(ii) pledge, mortgage or hypothecate for any purpose in excess of 10% of
the net assets of the Fund (taken at market value),
(iii) sell any security which the Fund does not own unless by virtue of the
ownership of other securities there is at the time of sale a right to obtain
securities, without payment of further consideration, equivalent in kind and
amount to the securities sold and provided that if such right is conditional
the sale is made upon the same conditions,
(iv) invest for the purpose of exercising control or management, except
that all of the assets of the Fund may be invested in a Qualifying Portfolio,
(v) purchase securities issued by any registered investment company,
except that all of the assets of the Fund may be invested in a Qualifying
Portfolio and except by purchase in the open market where no commission or
profit to a sponsor or dealer results from such purchase other than the
customary broker's commission, or except when such purchase, though not made in
the open market, is part of a plan of merger or consolidation; provided,
however, that the Fund will not purchase the securities of any registered
investment company if such purchase at the time thereof would cause more than
10% of the total assets of the Fund (taken in each case at the greater of cost
or market value) to be invested in the securities of such issuers or would
cause more than 3% of the outstanding voting securities of any such issuer to
be held for the Fund (for purposes of this clause (v) securities of non-U.S.
banks shall be treated as investment company securities, except that debt
securities and non-voting preferred stock of non-U.S. banks are not subject to
the 10% limitation described herein),
(vi) knowingly invest in securities which are not readily marketable or
which are subject to legal or contractual restrictions on resale (other than
repurchase agreements maturing in not more than seven days and other than
securities which may be resold pursuant to Rule 144A under the Securities Act
if the Board of Trustees of the Trust determines that a liquid market exists
for such securities) if, as a result thereof, more than 15% of the Fund's net
assets (taken at market value) would be so invested (including repurchase
agreements maturing in more than seven days), except that the Trust may invest
all or substantially all of the Fund's assets in a Qualifying Portfolio,
(vii) purchase or retain any securities issued by an issuer any of whose
officers, directors, trustees or security holders is an officer or Trustee of
the Trust, or is an officer or director of the Manager, if after the purchase
of the securities of such issuer by the Fund, one or more of such persons owns
beneficially more than 1/2 of 1% of the shares or securities, or both, all
taken at market value, of such issuer, and such persons owning more than 1/2 of
1% of such shares or securities together own beneficially more than 5% of such
shares or securities, or both, all taken at market value,
(viii) write, purchase or sell any put or call option or any combination
thereof or enter into any futures contract, except that this restriction shall
<PAGE>
not prevent the Fund from entering into transactions involving futures
contracts and non-U.S. currencies as described in the Prospectus and this
Statement of Additional Information,
(ix) make short sales of securities or maintain a short position, unless
at all times when a short position is open it owns an equal amount of such
securities or securities convertible into or exchangeable, without payment of
any further consideration, for securities of the same issue as, and equal in
amount to, the securities sold short, and unless not more than 10% of the net
assets of the Fund (taken at market value) is held as collateral for such sales
at any one time (the Fund does not presently intend to make such short sales
for investment purposes), or
(x) invest more than 20% of is total assets in the securities of issuers
located in any one foreign country, except that the Fund may have an additional
15% of its total assets in the securities of issuers located in any one of the
following countries: Australia, Canada, France, Japan, the United Kingdom, or
Germany.
These policies are not fundamental and may be changed by the Fund without
the approval of its shareholders.
PERCENTAGE AND RATING RESTRICTIONS
If a percentage or rating restriction on investment or utilization of
assets set forth above or referred to in this Registration Statement is adhered
to at the time an investment is made or assets are so utilized, a later change
in percentage resulting from changes in the value of the securities or a later
change in the rating of the securities held for the Fund will not be considered
a violation of policy.
5. PERFORMANCE INFORMATION
A total rate of return quotation for the Fund is calculated for any period
by (a) dividing (i) the sum of the net asset per share on the last day of the
period and the net asset value per share on the last day of the period of
shares purchasable with dividends and capital gains distributions declared
during such period with respect to a share held at the beginning of such period
and with respect to shares purchased with such dividends and capital gains
distributions, by (ii) the public offering price per share on the first day of
such period, and (b) subtracting 1 from the result. Any annualized total rate
of return quotation is calculated by (x) adding 1 to the period total rate of
return quotation calculated above, (y) raising such sum to a power which is
equal to 365 divided by the number of days in such period, and (z) subtracting
1 from the result. Total rates of return may also be calculated on investments
at various sales charge levels or at net asset value. Any performance data
which is based on a reduced sales charge or net asset value would be reduced if
the maximum sales charge were taken into account.
Any current yield quotation for the Fund consists of an annualized
historical yield, carried at least to the nearest hundredth of one percent,
based on a 30 calendar day or one month period and is calculated by (a) raising
to the sixth power the sum of 1 plus the quotient obtained by dividing the
Fund's net investment income earned during the period by the product of the
average daily number of shares outstanding during the period that were entitled
to receive dividends and the maximum public offering price per share on the
last day of the period, (b) subtracting 1 from the result, and (c) multiplying
the result by 2.
Yields and total returns quoted for the Fund include the effect of
deducting the Fund's expenses, but may not include charges and expenses
attributable to a particular variable annuity contract or variable life
<PAGE>
insurance policy. Since shares of the Fund can be purchased only through a
variable annuity contract or variable life insurance policy, a purchaser of
such contract or policy should carefully review the prospectus for the
applicable variable annuity contract or variable life insurance policy for
information on relevant charges and expenses. Including these charges in the
quotations of the Fund's yield and total return would have the effect of
decreasing performance. Performance information for the Fund must always be
accompanied by, and be reviewed with, performance information for the insurance
product which invests in the Fund.
6. DETERMINATION OF NET ASSET VALUE; VALUATION OF SECURITIES; ADDITIONAL
REDEMPTION INFORMATION
The net asset value of each share of the Fund is determined each day
during which the New York Stock Exchange is open for trading. As of the date of
this Statement of Additional Information, such Exchange is open for trading
every weekday except for the following holidays (or the days on which they are
observed): New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. This
determination of net asset value of shares of the Fund is made once each day as
of the close of regular trading on such Exchange (normally 4:00 p.m. Eastern
time) by dividing the value of the Fund's net assets (i.e., the value of its
assets less its liabilities, including expenses payable or accrued) by the
number of shares of the Fund outstanding at the time the determination is made.
A share's net asset value is effective for orders received by the Trust prior
to its calculation and received by the Distributor prior to the close of the
business day on which such net asset value is determined.
For purposes of calculating net asset value per share, all assets and
liabilities initially expressed in non-U.S. currencies will be converted into
U.S. dollars at the prevailing market rates at the time of valuation. Equity
securities are valued at the last sale price on the exchange on which they are
primarily traded or on the NASDAQ system for unlisted national market issues,
or at the last quoted bid price for securities in which there were no sales
during the day or for unlisted securities not reported on the NASDAQ system.
Securities listed on a foreign exchange are valued at the last quoted sale
price available before the time when net assets are valued. Bonds and other
fixed income securities (other than short-term obligations) are valued on the
basis of valuations furnished by a pricing service, use of which has been
approved by the Board of Trustees of the Trust. In making such valuations, the
pricing service utilizes both dealer-supplied valuations and electronic data
processing techniques which take into account appropriate factors such as
institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics and other market
data, without exclusive reliance upon quoted prices or exchange or
over-the-counter prices, since such valuations are believed to reflect more
accurately the fair value of such securities. Short-term obligations (maturing
in 60 days or less) are valued at amortized cost, which constitutes fair value
as determined by the Board of Trustees of the Trust. Futures contracts are
normally valued at the settlement price on the exchange on which they are
traded. Securities for which there are no such valuations are valued at fair
value as determined in good faith by or at the direction of the Board of
Trustees of the Trust.
Trading in securities on most foreign exchanges and over-the-counter
markets is normally completed before the close of regular trading on the
Exchange and may also take place on days on which the Exchange is closed. If
events materially affecting the value of foreign securities occur between the
time when the exchange on which they are traded closes and the time when the
Fund's net asset value is calculated, such securities will be valued at fair
value in accordance with procedures established by and under the general
supervision of the Board of Trustees of the Trust.
<PAGE>
Interest income on long-term obligations held for the Fund is determined
on the basis of interest accrued plus amortization of "original issue discount"
(generally, the difference between issue price and stated redemption price at
maturity) and premiums (generally, the excess of purchase price over stated
redemption price at maturity). Interest income on short-term obligations is
determined on the basis of interest accrued plus amortization of premium.
Subject to compliance with applicable regulations, the Trust has reserved
the right to pay the redemption or repurchase price of shares of the Fund,
either totally or partially, by a distribution in kind of readily marketable
securities (instead of cash). The securities so distributed would be valued at
the same amount as that assigned to them in calculating the net asset value for
the shares or beneficial interests being sold. If a holder of shares or
beneficial interests received a distribution in kind, such holder could incur
brokerage or other charges in converting the securities to cash.
The Trust may suspend the right of redemption or postpone the date of
payment for shares of the Fund more than seven days during any period when (a)
trading in the markets the Fund normally utilizes is restricted, or an
emergency, as defined by the rules and regulations of the Securities and
Exchange Commission (the "SEC"), exists making disposal of the Fund's
investments or determination of its net asset value not reasonably practicable;
(b) the New York Stock Exchange is closed (other than customary weekend and
holiday closings); or (c) the SEC has by order permitted such suspension.
7. MANAGEMENT
TRUSTEES
The Trustees and officers of the Trust, their ages and their principal
occupations during the past five years are set forth below. Their titles may
have varied during that period. Asterisks indicate that those Trustees and
officers are "interested persons" (as defined in the 1940 Act) of the Trust.
Unless otherwise indicated below, the address of each Trustee and officer is 6
St. James Avenue, Boston, Massachusetts.
TRUSTEES OF THE TRUST
H.B. ALVORD (aged 74) -- Treasurer-Tax Collector, County of Los Angeles
(retired, March, 1984); Chairman, certain registered investment companies in
the 59 Wall Street funds group. His address is 1450 Oleada Road, Pebble Beach,
California.
PHILIP W. COOLIDGE* (aged 45) -- President of the Trust; Chief Executive
Officer, Signature Financial Group, Inc. and The Landmark Funds Broker-Dealer
Services, Inc. (since December, 1988).
RILEY C. GILLEY (aged 70) -- Vice President and General Counsel, Corporate
Property Investors (November, 1988 to December, 1991); Partner, Breed, Abbott &
Morgan (Attorneys) (retired, December, 1987). His address is 4041 Gulf Shore
Boulevard North, Naples, Florida.
DIANA R. HARRINGTON (aged 56) -- Professor, Babson College (since
September, 1993); Visiting Professor, Kellogg Graduate School of Management,
Northwestern University (September, 1992 to September, 1993); Professor, Darden
Graduate School of Business, University of Virginia (September, 1978 to
September, 1993); Consultant to PanAgora Asset Management (since 1994). Her
address is 120 Goulding Street, Holliston, Massachusetts.
<PAGE>
SUSAN B. KERLEY (aged 45) -- President, Global Research Associates, Inc.
(Investment Research) (since August, 1990); Adviser, Rockefeller & Co. (March,
1988 to July, 1990); Trustee, Mainstay Institutional Funds (since December,
1990). Her address is P.O. Box 9572, New Haven, Connecticut.
C. OSCAR MORONG, JR. (aged 61) -- Chairman of the Board of Trustees of the
Trust; Managing Director, Morong Capital Management (since February, 1993);
Senior Vice President and Investment Adviser, CREF Investments, Teachers
Insurance & Annuity Association (retired January, 1993); Director, Indonesithe
Fund; Director, MAS Funds. His address is 1385 Outlook Drive West,
Mountainside, New Jersey.
E. KIRBY WARREN (aged 62) -- Professor of Management, Graduate School of
Business, Columbia University (since 1987); Samuel Bronfman Professor of
Democratic Business Enterprise (1978-1987). His address is Columbia University,
Graduate School of Business, 725 Uris Hall, New York, New York.
WILLIAM S. WOODS, JR. (aged 76) -- Vice President-Investments, Sun
Company, Inc. (retired, April, 1984). His address is 35 Colwick Road, Cherry
Hill, New Jersey.
OFFICERS OF THE TRUST
PHILIP W. COOLIDGE* (aged 45) -- President of the Trust; Chairman, Chief
Executive Officer and President, Signature Financial Group, Inc. and The
Landmark Funds Broker-Dealer Services, Inc. (since December, 1988).
JOHN R. ELDER* (aged 48) -- Treasurer of the Trust; Vice President,
Signature Financial Group, Inc. (since April, 1995); Treasurer of the Phoenix
Family of Mutual Funds, Phoenix Home Life Mutual Insurance Company (1983 to
March, 1995).
LINDA T. GIBSON* (aged 31) -- Assistant Secretary of the Trust; Legal
Counsel, Signature Financial Group, Inc. (since June, 1991); Law Student,
Boston University School of Law (September, 1989 to May, 1992); Product
Adviser, Signature Financial Group, Inc. (January, 1989 to September, 1989).
SUSAN JAKUBOSKI* (aged 32) -- Assistant Secretary of the Trust; Adviser,
Signature Financial Group (Cayman) Ltd. (since August, 1994); Senior Fund
Administrator, Signature Financial Group, Inc. (since August, 1994); Assistant
Treasurer, Signature Broker-Dealer Services, Inc. (since September, 1994); Fund
Compliance Administrator, Concord Financial Group (November, 1990 to August,
1994); Senior Fund Accountant, Neuberger & Berman Management, Inc. (from
February, 1988 to November, 1990); Customer Service Representative, I.B.J.
Schroder (prior to 1988). Her address is Elizabethan Square, George Town, Grand
Cayman, Cayman Islands, BWI.
THOMAS M. LENZ* (aged 38) -- Secretary of the Trust; Vice President and
Associate General Counsel, Signature Financial Group, Inc. (since November,
1989); Assistant Secretary, Signature Broker-Dealer Services, Inc. (since
February, 1991); Attorney, Ropes & Gray (September, 1984 to November, 1989).
MOLLY S. MUGLER* (aged 44) -- Assistant Secretary of the Trust; Legal
Counsel and Assistant Secretary, Signature Financial Group, Inc. (since
December, 1988); Assistant Secretary, The Landmark Funds Broker-Dealer
Services, Inc. (since December, 1988).
<PAGE>
BARBARA M. O'DETTE* (aged 37) -- Assistant Treasurer of the Trust;
Assistant Treasurer, Signature Financial Group, Inc. and The Landmark Funds
Broker-Dealer Services, Inc. (since December, 1988).
DANIEL E. SHEA* (aged 34) -- Assistant Treasurer of the Trust; Assistant
Adviser of Fund Administration, Signature Financial Group, Inc. (since
November, 1993); Supervisor and Senior Technical Advisor, Putnam Investments
(prior to November, 1993).
The Trustees and officers of the Trust also hold comparable positions with
certain other funds for which The Landmark Funds Broker-Dealer Services, Inc.,
Signature Financial Group, Inc. or their affiliates serve as the distributor or
administrator.
As of the date of this Statement of Additional Information, there are no
shareholders of the Fund.
The Declaration of Trust of the Trust provides that the Trust will
indemnify its Trustees and officers against liabilities and expenses incurred
in connection with litigation in which they may be involved because of their
offices with the Trust unless, as to liability to the Trust, or its investors,
it is finally adjudicated that they engaged in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in their offices,
or unless with respect to any other matter it is finally adjudicated that they
did not act in good faith in the reasonable belief that their actions were in
the best interests of the Trust. In the case of settlement, such
indemnification will not be provided unless it has been determined by a court
or other body approving the settlement or other disposition, or by a reasonable
determination, based upon a review of readily available facts, by vote of a
majority of disinterested Trustees of the Trust, or in a written opinion of
independent counsel, that such officers or Trustees have not engaged in willful
misfeasance, bad faith, gross negligence or reckless disregard of their duties.
The Trustees of the Trust (with the exception of Mr. Coolidge, who
received no remuneration from the Trust) received the following remuneration
from the Trust during its fiscal year ended December 31, 1995:
<TABLE>
TOTAL
PENSION OR COMPENSATION
AGGREGATE RETIREMENT ESTIMATED FROM REGISTRANT
COMPENSATION BENEFITS ACCRUED ANNUAL AND FUND
NAME OF PERSON, FROM AS PART OF FUND BENEFITS UPON COMPLEX PAID
POSITION REGISTRANT EXPENSES RETIREMENT TO TRUSTEES (1)
<S> <C> <C> <C> <C>
H.B. ALVORD $ 3,198.55 NONE NONE $40,000.00
RILEY C. GILLEY $ 4,352.29 NONE NONE $44,000.00
DIANA R. HARRINGTON $ 3,921.20 NONE NONE $40,000.00
SUSAN B. KERLEY $ 3,921.20 NONE NONE $40,000.00
C. OSCAR MORONG, JR. $ 3,606.47 NONE NONE $44,500.00
DONALD B. OTIS(2) $ 7,758.16 NONE NONE $40,000.00
E. KIRBY WARREN $ 3,606.47 NONE NONE $44,500.00
WILLIAM S. WOODS, JR. $ 4,582.57 NONE NONE $44,000.00
</TABLE>
(1) Information relates to the fiscal year ended December 31, 1995.
Messrs. Alvord, Coolidge, Gilley, Morong, Warren and Woods and Mses. Harrington
and Kerley are trustees of 20, 36, 19, 20, 20, 19, 19 and 19 funds,
respectively, of the Landmark Family of Funds.
(2) Mr. Otis retired as a trustee of the Trust on August 31, 1996.
<PAGE>
MANAGER
Citibank manages the assets of the Fund and provides certain
administrative services to the Trust pursuant to a management agreement (the
"Management Agreement") with the Trust. Citibank furnishes at its own expense
all services, facilities and personnel necessary in connection with managing
the Fund's investments and effecting securities transactions for the Fund. The
Management Agreement with the Trust will continue in effect until ____________
__, 1998 and thereafter as long as such continuance is specifically approved at
least annually by the Board of Trustees of the Trust or by a vote of a majority
of the outstanding voting securities of the Fund, and, in either case, by a
majority of the Trustees of the Trust who are not parties to the Management
Agreement or interested persons of any such party, at a meeting called for the
purpose of voting on the Management Agreement.
Citibank provides the Trust with general office facilities and supervises
the overall administration of the Trust, including, among other
responsibilities, the negotiation of contracts and fees with, and the
monitoring of performance and billings of, the Trust's independent contractors
and agents; the preparation and filing of all documents required for compliance
by the Trust with applicable laws and regulations; and arranging for the
maintenance of books and records of the Trust. Trustees, officers, and
investors in the Trust are or may be or may become interested in Citibank, as
directors, officers, employees, or otherwise and directors, officers and
employees of Citibank are or may become similarly interested in the Trust.
The Management Agreement provides that Citibank may render services to
others. The Management Agreement is terminable without penalty on not more than
60 days' nor less than 30 days' written notice by the Trust, when authorized
either by a vote of a majority of the outstanding voting securities of the Fund
or by a vote of a majority of the Board of Trustees of the Trust, or by
Citibank on not more than 60 days' nor less than 30 days' written notice, and
will automatically terminate in the event of its assignment. The Management
Agreement provides that neither Citibank nor its personnel shall be liable for
any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the execution of securities
transactions for the Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties under the Management Agreement with the Trust.
The Prospectus contains a description of the fees payable to Citibank for
services under the Management Agreement. Citibank, if required by state law,
will reimburse the Fund or waive all or a portion of its management fees to the
extent that the expenses of the Fund exceed the expense limitation prescribed
by any state in which the Fund is qualified for offer or sale.
Pursuant to a sub-administrative services agreement with Citibank, LFBDS
performs such sub-administrative duties for the Trust as from time to time are
agreed upon by Citibank and LFBDS. For performing such sub-administrative
services, LFBDS receives compensation as from time to time is agreed upon by
Citibank, not in excess of the amount paid to Citibank for its services under
the Management Agreement with the Trust. All such compensation is paid by
Citibank.
LFBDS is a wholly-owned subsidiary of Signature Financial Group, Inc.
<PAGE>
DISTRIBUTOR
LFBDS serves as the Distributor of the Trust's shares pursuant to a
Distribution Agreement with the Trust. Unless otherwise terminated, the
Distribution Agreement continues in effect from year to year upon annual
approval by the Trust's Board of Trustees, or by the vote of a majority of the
outstanding shares of the Trust and by the vote of a majority of the Board of
Trustees of the Trust who are not parties to the Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose
of voting on such approval. The Agreement will terminate in the event of its
assignment, as defined in the 1940 Act. LFBDS is not currently paid a fee for
the provision of distribution services with respect to shares of the Fund.
TRANSFER AGENT AND CUSTODIAN
The Trust has entered into a Transfer Agency and Service Agreement with
State Street Bank and Trust Company ("State Street") pursuant to which State
Street acts as transfer agent for the Fund. The Trust also has entered into a
Custodian Agreement and the Fund Accounting Agreement with State Street,
pursuant to which custodial and fund accounting services, respectively, are
provided for the Fund. See "Custodian, Transfer Agent and Fund Accountant" in
the Prospectus for additional information. The principal business address of
State Street is 225 Franklin Street, Boston, Massachusetts 02110.
AUDITORS
Price Waterhouse LLP are the independent certified public accountants for
the Trust, providing audit services and assistance and consultation with
respect to the preparation of filings with the SEC. The address of Price
Waterhouse LLP is 160 Federal Street, Boston, Massachusetts 02110.
8. PORTFOLIO TRANSACTIONS
The Trust trades securities for the Fund if it believes that a transaction
net of costs (including custodian charges) will help achieve the Fund's
investment objective. Changes in the Fund's investments are made without regard
to the length of time a security has been held, or whether a sale would result
in the recognition of a profit or loss. Therefore, the rate of turnover is not
a limiting factor when changes are appropriate. Specific decisions to purchase
or sell securities for the Fund are made by a portfolio manager who is an
employee of the Manager and who is appointed and supervised by its senior
officers. The portfolio manager may serve other clients of the Manager in a
similar capacity.
The primary consideration in placing portfolio securities transactions
with broker-dealers for execution is to obtain and maintain the availability of
execution at the most favorable prices and in the most effective manner
possible. The Manager attempts to achieve this result by selecting
broker-dealers to execute transactions on behalf of the Fund and other clients
of the Manager on the basis of their professional capability, the value and
quality of their brokerage services, and the level of their brokerage
commissions. In the case of securities traded in the over-the-counter market
(where no stated commissions are paid but the prices include a dealer's markup
or markdown), the Manager normally seeks to deal directly with the primary
market markers, unless in its opinion, best execution is available elsewhere.
In the case of securities purchased from underwriters, the cost of such
securities generally includes a fixed underwriting commission or concession.
From time to time, soliciting dealer fees are available to the Manager on the
<PAGE>
tender of the Fund's securities in so-called tender or exchange offers. Such
soliciting dealer fees are in effect recaptured for the Fund by the Manager. At
present no other recapture arrangements are in effect.
Under the Management Agreement, in connection with the selection of such
brokers or dealers and the placing of such orders, the Manager is directed to
seek for the Fund in its best judgment, prompt execution in an effective manner
at the most favorable price. Subject to this requirement of seeking the most
favorable price, securities may be bought from or sold to broker-dealers who
have furnished statistical, research and other information or services to the
Manager or the Fund, subject to any applicable laws, rules and regulations.
The investment advisory fee that the Fund pays to the Manager will not be
reduced as a consequence of the Manager's receipt of brokerage and research
services. While such services are not expected to reduce the expenses of the
Manager, the Manager would, through the use of the services, avoid the
additional expenses which would be incurred if it should attempt to develop
comparable information through its own staff or obtain such services
independently.
In certain instances there may be securities that are suitable as an
investment for the Fund as well as for one or more of the Manager's other
clients. Investment decisions for the Fund and for the Manager's other clients
are made with a view to achieving their respective investment objectives. It
may develop that a particular security is bought or sold for only one client
even though it might be held by, or bought or sold for, other clients.
Likewise, a particular security may be bought for one or more clients when one
or more clients are selling the same security. Some simultaneous transactions
are inevitable when several clients receive investment advice from the same
investment adviser, particularly when the same security is suitable for the
investment objectives of more than one client. When two or more clients are
simultaneously engaged in the purchase or sale of the same security, the
securities are allocated among clients in a manner believed to be equitable to
each. It is recognized that in some cases this system could adversely affect
the price of or the size of the position obtainable in a security for the Fund.
When purchases or sales of the same security for the Fund and for other
portfolios managed by the Manager occur contemporaneously, the purchase or sale
orders may be aggregated in order to obtain any price advantages available to
large volume purchases or sales.
9. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Trust's Declaration of Trust permits the Trustees to issue an
unlimited number of full and fractional Shares of Beneficial Interest (without
par value) of each series and to divide or combine the shares of any series
into a greater or lesser number of shares of that series without thereby
changing the proportionate beneficial interests in that series. The Fund,
Landmark Balanced Fund, CitiSelectSM Folio 200, CitiSelectSM Folio 300,
CitiSelectSM Folio 400, CitiSelectSM Folio 500, CitiSelectSM VIP Folio 200,
CitiSelectSM VIP Folio 300, CitiSelectSM VIP Folio 400 and CitiSelectSM VIP
Folio 500 are the only current series of shares of the Trust and the Trust has
reserved the right to create and issue additional series of shares. Each share
of the Fund represents an equal proportionate interest in the Fund with each
other share. Shares of each series participate equally in the earnings,
dividends and distribution of net assets of the particular series upon
liquidation or dissolution. Shares of each series are entitled to vote
separately to approve advisory agreements or changes in investment policy, but
shares of all series may vote together in the election or selection of Trustees
and accountants for the Trust.
Shareholders are entitled to one vote for each share held on matters on
which they are entitled to vote. Shareholders in the Trust do not have
cumulative voting rights, and shareholders owning more than 50% of the
outstanding shares of the Trust may elect all of the Trustees of the Trust if
they choose to do so and in such event the other shareholders in the Trust
<PAGE>
would not be able to elect any Trustee. The Trust is not required and has no
present intention to hold annual meetings of shareholders but the Trust will
hold special meetings of shareholders when in the judgment of the Trustees it
is necessary or desirable to submit matters for a shareholder vote.
Shareholders have, under certain circumstances (e.g., upon the application and
submission of certain specified documents to the Trustees by a specified number
of shareholders), the right to communicate with other shareholders in
connection with requesting a meeting of shareholders for the purpose of
removing one or more Trustees. Shareholders also have under certain
circumstances the right to remove one or more Trustees without a meeting by a
declaration in writing by a specified number of shareholders. No material
amendment may be made to the Trust's Declaration of Trust without the
affirmative vote of the holders of a majority of the outstanding shares of each
series affected by the amendment. (See "Investment Restrictions.")
The Trust may enter into a merger or consolidation, or sell all or
substantially all of its assets (or all or substantially all of the assets
belonging to any series of the Trust), if approved by a vote of the holders of
two-thirds of the Trust's outstanding shares, voting as a single class, or of
the affected series of the Trust, as the case may be, except that if the
Trustees of the Trust recommend such sale of assets, merger or consolidation,
the approval by vote of the holders of a majority of the Trust's outstanding
shares would be sufficient. The Trust or any series of the Trust, as the case
may be, may be terminated (i) by a vote of a majority of the outstanding voting
securities of the Trust or the affected series or (ii) by the Trustees by
written notice to the shareholders of the Trust or the affected series. If not
so terminated, the Trust will continue indefinitely.
The rights accompanying Fund shares are legally vested in the Separate
Accounts. However, in accordance with current law and interpretations thereof,
Participating Insurance Companies will vote shares held in the Separate
Accounts in a manner consistent with timely voting instructions received from
the holders of variable annuity contracts and variable life insurance policies.
Each Participating Insurance Company will vote Fund shares held in Separate
Accounts for which no timely instructions are received from the holders of
variable annuity contracts and variable life insurance policies, as well as
shares it owns, in the same proportion as those shares for which voting
instructions are received. For a further discussion, please refer to the
insurance company's Separate Account prospectus.
Share certificates will not be issued.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations and liabilities. However, the Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the
Trust and provides for indemnification and reimbursement of expenses out of
Trust property for any shareholder held personally liable for the obligations
of the Trust. The Declaration of Trust also provides that the Trust may
maintain appropriate insurance (for example, fidelity bonding and errors and
omissions insurance) for the protection of the Trust, its investors, Trustees,
officers, employees and agents covering possible tort and other liabilities.
Thus, the risk of an investor incurring financial loss on account of investor
liability is limited to circumstances in which both inadequate insurance
existed and the Trust itself was unable to meet its obligations.
The Trust's Declaration of Trust further provides that obligations of the
Trust are not binding upon the Trustees individually but only upon the property
of the Trust and that the Trustees will not be liable for any action or failure
to act, but nothing in the Declaration of Trust of the Trust protects a Trustee
against any liability to which he or she would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his or her office.
<PAGE>
10. CERTAIN ADDITIONAL TAX MATTERS
Any investment in zero coupon bonds, certain stripped securities, and
certain securities purchased at a market discount will cause the Fund to
recognize income prior to the receipt of cash payments with respect to those
securities. In order to distribute this income and avoid a tax on the Fund, the
Fund may be required to liquidate portfolio securities that it might otherwise
have continued to hold, potentially resulting in additional taxable gain or
loss to the Fund. The Fund's transactions in options, futures contracts, and
forward contracts will be subject to special tax rules that may affect the
amount, timing and character of Fund income and distributions to shareholders.
Certain positions held by the Fund that substantially diminish its risk of loss
with respect to other positions in its portfolio may constitute "straddles,"
and may be subject to special tax rules that would cause deferral of Fund
losses, adjustments in the holding periods of Fund securities, and conversion
of short-term into long-term capital losses. Certain tax elections exist for
straddles that may alter the effects of these rules. The Fund will limit its
activities in options, futures contracts, and forward contracts to the extent
necessary to meet the requirements of Subchapter M of the Internal Revenue
Code.
Special tax considerations apply with respect to foreign investments. Use
of foreign currencies for non-hedging purposes may be limited in order to avoid
a tax on the Fund. Investment by the Fund in certain "passive foreign
investments companies" may also be limited in order to avoid a tax on the Fund.
Investment income received by the Fund from foreign securities may be subject
to foreign income taxes withheld at the source. The United States has entered
into tax treaties with many foreign countries that may entitle the Fund to a
reduced rate of tax or an exemption from tax on such income; the Fund intends
to qualify for treaty reduced rates where available. It is not possible,
however, to determine the Fund's effective rate of foreign tax in advance since
the amount of the Fund's assets to be invested within various countries is not
known.
11. FINANCIAL STATEMENTS
Not applicable.
<PAGE>
PART C
Item 24. Financial Statements and Exhibits.
(a) Financial Statements Included in Part A:
Not applicable.
Financial Statements Included in Part B:
Not applicable.
(b) Exhibits
******* 1(a) Amended and Restated Declaration of Trust of the Registrant
1(b) Form of Amendment to Amended and Restated Declaration of
Trust of the Registrant
* 2(a) Amended and Restated By-Laws of the Registrant
**** 2(b) Amendment to Amended and Restated By-Laws of the
Registrant
5 Form of Management Agreement between the Registrant and
Citibank, N.A., as investment manager
6 Form of Distribution Agreement between the Registrant and
The Landmark Funds Broker-Dealer Services, Inc.
("LFBDS"), as distributor
******* 7 Form of Custodian Agreement between the Registrant, on
behalf of the Fund, and State Street Bank and Trust
Company, as custodian
* 9 Form of Transfer Agency and Service Agreement between
the Registrant and State Street Bank and Trust Company,
as transfer agent
*,**,***, 25 Powers of Attorney for the Registrant
*****,******
---------------------
* Incorporated by reference to Post-Effective Amendment No. 8 to the
Registrant's Registration Statement on Form N-1A (File No. 2-90518) as
filed with the Securities and Exchange Commission on March 2, 1992.
** Incorporated by reference to Post-Effective Amendment No. 9 to the
Registrant's Registration Statement on Form N-1A (File No. 2-90518)
as filed with the Securities and Exchange Commission on April 13, 1993.
*** Incorporated by reference to Post-Effective Amendment No. 10 to the
Registrant's Registration Statement on Form N-1A (File No. 2-90518) as
filed with the Securities and Exchange Commission on December 30, 1993.
**** Incorporated by reference to Post-Effective Amendment No. 12 to the
Registrant's Registration Statement on Form N-1A (File No. 2-90518) as
filed with the Securities and Exchange Commission on October 14, 1994.
***** Incorporated by reference to Post-Effective Amendment No. 16 to the
Registrant's Registration Statement on Form N-1A (File No. 2-90518) as
filed with the Securities and Exchange Commission on February 5, 1996.
****** Incorporated by reference to Post-Effective Amendment No. 17 to the
Registrant's Registration Statement on Form N-1A (File No. 2-90518) as
filed with the Securities and Exchange Commission on February 16, 1996.
<PAGE>
******* Incorporated by reference to Post-Effective Amendment No. 20 to the
Registrant's Registration Statement on Form N-1A (File No. 2-90518) as
filed with the Securities and Exchange Commission on August 22, 1996.
Item 25. Persons Controlled by or under Common Control with Registrant.
Not applicable.
Item 26. Number of Holders of Securities.
Title of Class Number of Record Holders
Shares of Beneficial Interest As of September 11, 1996
(without par value)
Landmark Small Cap Equity VIP Fund 0
Item 27. Indemnification.
Reference is hereby made to (a) Article V of the Registrant's Declaration
of Trust, filed as an Exhibit to Post-Effective Amendment No. 20 to the
Registrant's Registration Statement on Form N-1A; (b) Section 6 of the
Distribution Agreement between the Registrant and LFBDS, filed as an Exhibit
herein; and (c) the undertaking of the Registrant regarding indemnification set
forth in its Registration Statement on Form N-1A.
The Trustees and officers of the Registrant and the personnel of the
Registrant's administrator are insured under an errors and omissions liability
insurance policy. The Registrant and its officers are also insured under the
fidelity bond required by Rule 17g-1 under the Investment Company Act of 1940.
Item 28. Business and Other Connections of Investment Advisers.
Citibank, N.A. ("Citibank") is a commercial bank offering a wide range of
banking and investment services to customers across the United States and
around the world. Citibank is a wholly-owned subsidiary of Citicorp, a
registered bank holding company. Citibank also serves as investment adviser to
the following registered investment companies (or series thereof): The Premium
Portfolios (Balanced Portfolio, Equity Portfolio, Government Income Portfolio,
International Equity Portfolio, Emerging Asian Markets Equity Portfolio and
Small Cap Equity Portfolio), Tax Free Reserves Portfolio, U.S. Treasury
Reserves Portfolio, Cash Reserves Portfolio, Asset Allocation Portfolios (Asset
Allocation Portfolio 200, Asset Allocation Portfolio 300, Asset Allocation
Portfolio 400 and Asset Allocation Portfolio 500), Landmark Multi-State Tax
Free Funds (Landmark New York Tax Free Reserves, Landmark Connecticut Tax Free
Reserves and Landmark California Tax Free Reserves), Landmark Fixed Income
Funds (Landmark Intermediate Income Fund), Landmark Tax Free Income Funds
(Landmark National Tax Free Income Fund and Landmark New York Tax Free Income
Fund), Landmark VIP Funds (Landmark VIP U.S. Government Portfolio, Landmark VIP
Balanced Portfolio, Landmark VIP Equity Portfolio and Landmark VIP
International Equity Portfolio), CitiSelectSM VIP Folio 200, CitiSelectSM VIP
<PAGE>
Folio 300, CitiSelectSM VIP Folio 400 and CitiSelectSM VIP Folio 500. As of
December 31, 1995, Citibank and its affiliates managed assets in excess of $83
billion worldwide. The principal place of business of Citibank is located at
399 Park Avenue, New York, New York 10043.
The Chairman of the Board and a Director of Citibank is John S. Reed. The
following are Vice Chairmen of the Board and Directors of Citibank: Paul J.
Collins, William R. Rhodes and H. Onno Ruding. Other Directors of Citibank are
D. Wayne Calloway, Chairman and Chief Executive Officer, PepsiCo, Inc.,
Purchase, New York; Colby H. Chandler, Former Chairman and Chief Executive
Officer, Eastman Kodak Company; Pei-yuan Chia, Director, Baxter International,
Inc.; Kenneth T. Derr, Chairman and Chief Executive Officer, Chevron
Corporation; H.J. Haynes, Senior Counselor, Bechtel Group, Inc., San Francisco,
California; Rozanne L. Ridgway, President, The Atlantic Council of the United
States; Robert B. Shapiro, President and Chief Operating Officer, Monsanto
Company; Frank A. Shrontz, Chairman and Chief Executive Officer, The Boeing
Company, Seattle, Washington; Roger B. Smith, Former Chairman and Chief
Executive Officer, General Motors Corporation; Franklin A. Thomas, President,
The Ford Foundation, New York, New York; and Edgar S. Woolard, Jr., Chairman
and Chief Executive Officer, E.I. DuPont De Nemours & Company.
Each of the individuals named above is also a Director of Citicorp. In
addition, the following persons have the affiliations indicated:
D. Wayne Calloway Director, Exxon Corporation
Director, General Electric Company
Director, Pepsico, Inc.
Colby H. Chandler Director, Digital Equipment Corporation
Director, Ford Motor Company
Director, J.C. Penney Company, Inc.
Pei-yuan Chia Director, Baxter International, Inc.
Paul J. Collins Director, Kimberly-Clark Corporation
Kenneth T. Derr Director, American Telephone and Telegraph, Co.
Director, Chevron Corporation
Director, Potlatch Corporation
H.J. Haynes Director, Bechtel Group, Inc.
Director, Boeing Company
Director, Fremont Group, Inc.
Director, Hewlett-Packard Company
Director, Paccar Inc.
Director, Saudi Arabian Oil Company
John S. Reed Director, Monsanto Company
Director, Philip Morris Companies Incorporated
Stockholder, Tampa Tank & Welding, Inc.
William R. Rhodes Director, Private Export Funding Corporation
<PAGE>
Rozanne L. Ridgway Director, 3M
Director, Bell Atlantic Corporation
Director, Boeing Company
Director, Emerson Electric Company
Member-International Advisory Board,
New Perspective Fund, Inc.
Director, RJR Nabisco, Inc.
Director, Sara Lee Corporation
Director, Union Carbide Corporation
H. Onno Ruding Member, Board of Supervisory Directors,
Amsterdam Trustee's Kantoor
Board Member, Corning, Incorporated
Advisor, Intercena (C&A) (Netherlands)
Member, Board of Supervisory
Directors, Pechiney Nederland N.V.
Member, Board of Advisers, Robeco N.V.
Advisory Director, Unilever N.V.
Advisory Director, Unilever PLC
Robert B. Shapiro Director, G.D. Searle & Co.
Director, Silicon Graphics
Director, Monsanto Company
Director, The Nutrasweet Company
Frank A. Shrontz Director, 3M
Director, Baseball of Seattle, Inc.
Director, Boeing Company
Director, Boise Cascade Corp.
Roger B. Smith Director, International Paper Company
Director, Johnson & Johnson
Director, Pepsico, Inc.
Franklin A. Thomas Director, Aluminum Company of America
Director, American Telephone and Telegraph, Co.
Director, Cummins Engine Company, Inc.
Director, Pepsico, Inc.
Edgar S. Woolard, Jr. Director, E.I. DuPont De Nemours & Company
Item 29. Principal Underwriters.
(a) The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS"), the
Registrant's Distributor, is also the distributor for Landmark International
Equity Fund, Landmark Emerging Asian Markets Equity Fund, Landmark U.S.
Treasury Reserves, Landmark Cash Reserves, Premium U.S. Treasury Reserves,
Premium Liquid Reserves, Landmark Institutional U.S. Treasury Reserves,
Landmark Institutional Liquid Reserves, Landmark Tax Free Reserves, Landmark
<PAGE>
California Tax Free Reserves, Landmark Connecticut Tax Free Reserves,
Landmark New York Tax Free Reserves, Landmark U.S. Government Income Fund,
Landmark Intermediate Income Fund, Landmark Balanced Fund, CitiSelectSM Folio
200, CitiSelectSM Folio 300, CitiSelectSM Folio 400, CitiSelectSM Folio 500,
Landmark Equity Fund, Landmark Small Cap Equity Fund, Landmark National Tax
Free Income Fund, Landmark New York Tax Free Income Fund, Landmark VIP Funds
(Landmark VIP U.S. Government Portfolio, Landmark VIP Balanced Portfolio,
Landmark VIP Equity Portfolio and Landmark VIP International Equity Portfolio),
CitiSelectSM VIP Folio 200, CitiSelectSM VIP Folio 300, CitiSelectSM VIP Folio
400 and CitiSelectSM VIP Folio 500. LFBDS is also the placement agent for
International Equity Portfolio, Balanced Portfolio, Equity Portfolio, Small Cap
Equity Portfolio, Government Income Portfolio, Emerging Asian Markets Equity
Portfolio, Tax Free Reserves Portfolio, Cash Reserves Portfolio, Asset
Allocation Portfolio 200, Asset Allocation Portfolio 300, Asset Allocation
Portfolio 400, Asset Allocation Portfolio 500 and U.S. Treasury Reserves
Portfolio.
(b) The information required by this Item 29 with respect to each director
and officer of LFBDS is incorporated by reference to Schedule A of Form BD
filed by LFBDS pursuant to the Securities and Exchange Act of 1934 (File No.
8-32417).
(c) Not applicable.
Item 30. Location of Accounts and Records.
The accounts and records of the Registrant are located, in whole or in
part, at the office of the Registrant and the following locations:
NAME ADDRESS
The Landmark Funds Broker-Dealer 6 St. James Avenue
Services, Inc. Boston, MA 02116
(distributor)
State Street Bank and Trust Company 1776 Heritage Drive
(custodian and transfer agent) North Quincy, MA 02171
Citibank, N.A. 153 East 53rd Street
(investment manager) New York, NY 10043
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
(a) The Registrant hereby undertakes to file a post-effective amendment to
this Registration Statement, containing reasonably current financial statements
that need not be certified, within four to six months following the
commencement of operations of the Fund.
(b) The Registrant hereby undertakes to call a meeting of shareholders for
the purpose of voting upon the question of removal of one or more of the
Trust's Trustees when requested in writing to do so by the holders of at least
10% of the Registrant's outstanding shares, and in connection therewith to
comply with the provisions of Section 16(c) of the Investment Company Act of
1940 relating to shareholder communication.
<PAGE>
(c) The Registrant undertakes to furnish to each person to whom a
prospectus of the Fund is delivered with a copy of its latest Annual Report to
Shareholders, upon request without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston and Commonwealth of
Massachusetts on the 11th day of September, 1996.
LANDMARK FUNDS I
By: Philip W. Coolidge
Philip W. Coolidge
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to this Registration Statement has been signed below
by the following persons in the capacities indicated below on September 11,
1996.
Signature Title
Philip W. Coolidge President, Principal Executive Officer and Trustee
Philip W. Coolidg
John R. Elder Principal Financial Officer and Principal
John R. Elder Accounting Officer
H.B. Alvord* Trustee
H.B. Alvord
Riley C. Gilley* Trustee
Riley C. Gilley
Diana R. Harrington* Trustee
Diana R. Harrington
Susan B. Kerley* Trustee
Susan B. Kerley
C. Oscar Morong, Jr.* Trustee
C. Oscar Morong, Jr.
E. Kirby Warren* Trustee
Kirby Warren
William S. Woods, Jr.* Trustee
William S. Woods, Jr.
*By: Philip W. Coolidge
Philip W. Coolidge
Executed by Philip W.
Coolidge on behalf of those
indicated pursuant to
Powers of Attorney.
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
1(b) Form of Amendment to Amended and Restated Declaration of Trust
of the Registrant
5 Form of Management Agreement between the Registrant
and Citibank, N.A., as investment manager
6 Form of Distribution Agreement between the Registrant and The
Landmark Funds Broker-Dealer Services, Inc. ("LFBDS"),
as distributor
Exhibit 1(b)
LANDMARK FUNDS I
FORM OF AMENDED AND RESTATED
ESTABLISHMENT AND DESIGNATION OF SERIES OF
SHARES OF BENEFICIAL INTEREST (WITHOUT PAR VALUE)
Pursuant to Section 6.9 of the Declaration of Trust, dated April 13, 1984,
as amended (the "Declaration of Trust"), of Landmark Funds I (the "Trust"), the
undersigned, being a majority of the Trustees of the Trust, do hereby establish
and designate ten series of Shares (as defined in the Declaration of Trust),
such series to have the following special and relative rights:
1. The series shall be designated as follows:
LANDMARK BALANCED FUND
CITISELECTSM FOLIO 200
CITISELECTSM FOLIO 300
CITISELECTSM FOLIO 400
CITISELECTSM FOLIO 500
CITISELECTSM VIP FOLIO 200
CITISELECTSM VIP FOLIO 300
CITISELECTSM VIP FOLIO 400
CITISELECTSM VIP FOLIO 500
LANDMARK SMALL CAP EQUITY VIP FUND
2. Each series shall be authorized to invest in cash, securities,
instruments and other property as from time to time described in the Trust's
then currently effective registration statement under the Securities Act of
1933 to the extent pertaining to the offering of Shares of each series. Each
Share of each series shall be redeemable, shall be entitled to one vote or
fraction thereof in respect of a fractional share on matters on which shares of
that series shall be entitled to vote, shall represent a pro rata beneficial
interest in the assets allocated or belonging to such series, and shall be
entitled to receive its pro rata share of the net assets of such series upon
liquidation of the series, all as provided in Section 6.9 of the Declaration of
Trust.
3. Shareholders of each series shall vote separately as a class on any
matter to the extent required by, and any matter shall be deemed to have been
effectively acted upon with respect to each series as provided in, Rule 18f-2,
as from time to time in effect, under the Investment Company Act of 1940, as
amended, or any successor rule, and by the Declaration of Trust.
<PAGE>
4. The assets and liabilities of the Trust shall be allocated to each
series as set forth in Section 6.9 of the Declaration of Trust.
5. Subject to the provisions of Section 6.9 and Article IX of the
Declaration of Trust, the Trustees (including any successor Trustees) shall
have the right at any time and from time to time to reallocate assets and
expenses or to change the designation of any series now or hereafter created or
otherwise to change the special and relative rights of any such series.
IN WITNESS WHEREOF, the undersigned have executed this Establishment and
Designation of Series on separate counterparts this ____ day of __________,
1996.
_________________________ ____________________________
H.B. ALVORD PHILIP W. COOLIDGE
_________________________ ____________________________
RILEY C. GILLEY DIANA R. HARRINGTON
_________________________ ____________________________
SUSAN B. KERLEY C. OSCAR MORONG, JR.
_________________________ ____________________________
E. KIRBY WARREN WILLIAM S. WOODS, JR.
Exhibit 5
FORM OF MANAGEMENT AGREEMENT
LANDMARK FUNDS I
Landmark Small Cap Equity VIP Fund
MANAGEMENT AGREEMENT, dated as of __________ __, 1996, by and between
Landmark Funds I, a Massachusetts trust (the "Trust"), and Citibank, N.A., a
national banking association ("Citibank" or the "Manager").
W I T N E S S E T H:
WHEREAS, the Trust engages in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act"), and
WHEREAS, the Trust wishes to engage Citibank to provide certain investment
advisory and administrative services for the series of the Trust designated as
Landmark Small Cap Equity VIP Fund (the "Fund"), and Citibank is willing to
provide such investment advisory and administrative services for the Fund on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties of Citibank. (a) Citibank shall act as the Manager for the Fund
and as such shall furnish continuously an investment program and shall
determine from time to time what securities shall be purchased, sold or
exchanged and what portion of the assets of the Fund shall be held uninvested,
subject always to the restrictions of the Trust's Declaration of Trust, dated
April 13, 1984, and By-laws, as each may be amended from time to time
(respectively, the "Declaration" and the "By-Laws"), the provisions of the 1940
Act, and the then-current Registration Statement of the Trust with respect to
the Fund. The Manager shall also make recommendations as to the manner in which
voting rights, rights to consent to corporate action and any other rights
pertaining to the Fund's portfolio securities shall be exercised. Should the
<PAGE>
Board of Trustees of the Trust at any time, however, make any definite
determination as to investment policy applicable to the Fund and notify the
Manager thereof in writing, the Manager shall be bound by such determination
for the period, if any, specified in such notice or until similarly notified
that such determination has been revoked. The Manager shall take, on behalf of
the Fund, all actions which it deems necessary to implement the investment
policies determined as provided above, and in particular to place all orders
for the purchase or sale of securities for the Fund's account with the brokers
or dealers selected by it, and to that end the Manager is authorized as the
agent of the Trust to give instructions to the custodian or any subcustodian of
the Fund as to deliveries of securities and payments of cash for the account of
the Fund. In connection with the selection of such brokers or dealers and the
placing of such orders, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) to the Fund and/or the other accounts over
which the Manager or its affiliates exercise investment discretion. The Manager
is authorized to pay a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for the
Fund which is in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if the Manager determines in
good faith that such amount of commission is reasonable in relation to the
value of the brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular transaction
or the overall responsibilities which the Manager and its affiliates have with
respect to accounts over which they exercise investment discretion. The
Trustees of the Trust shall periodically review the commissions paid by the
Fund to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Fund. In making purchases or
sales of securities or other property for the account of the Fund, the Manager
may deal with itself or with the Trustees of the Trust or the Trust's
underwriter or distributor, to the extent such actions are permitted by the
1940 Act.
(b) Subject to the direction and control of the Board of Trustees of the
Trust, Citibank shall perform such administrative and management services as
may from time to time be reasonably requested by the Trust, which shall include
without limitation: (a) providing office space, equipment and clerical
personnel necessary for maintaining the organization of the Trust and for
performing the administrative and management functions herein set forth; (b)
supervising the overall administration of the Trust, including negotiation of
contracts and fees with and the monitoring of performance and billings of the
Trust's transfer agent, custodian and other independent contractors or agents;
<PAGE>
(c) preparing and, if applicable, filing all documents required for compliance
by the Trust with applicable laws and regulations, including registration
statements, prospectuses and statements of additional information, semi-annual
and annual reports to shareholders, proxy statements and tax returns; (d)
preparation of agendas and supporting documents for and minutes of meetings of
Trustees, committees of Trustees and shareholders; and (e) arranging for
maintenance of books and records of the Trust. Notwithstanding the foregoing,
Citibank shall not be deemed to have assumed any duties with respect to, and
shall not be responsible for, the distribution of shares of beneficial interest
in the Fund, nor shall Citibank be deemed to have assumed or have any
responsibility with respect to functions specifically assumed by any transfer
agent, fund accounting agent or custodian of the Trust or the Fund. In
providing administrative and management services as set forth herein, Citibank
may, at its own expense, employ one or more subadministrators; provided that
Citibank shall remain fully responsible for the performance of all
administrative and management duties set forth herein and shall supervise the
activities of each subadministrator.
2. Allocation of Charges and Expenses. Citibank shall furnish at its own
expense all necessary services, facilities and personnel in connection with its
responsibilities under Section 1 above. Except as provided in the foregoing
sentence, it is understood that the Trust will pay from the assets of the Fund
all of its own expenses allocable to the Fund including, without limitation,
organization costs of the Fund; compensation of Trustees who are not
"interested persons" of the Trust; governmental fees; interest charges; loan
commitment fees; taxes; membership dues in industry associations allocable to
the Trust; fees and expenses of independent auditors, legal counsel and any
transfer agent, distributor, registrar or dividend disbursing agent of the
Trust; expenses of issuing and redeeming shares of beneficial interest and
servicing shareholder accounts; expenses of preparing, typesetting, printing
and mailing prospectuses, statements of additional information, shareholder
reports, notices, proxy statements and reports to governmental officers and
commissions and to existing shareholders of the Fund; expenses connected with
the execution, recording and settlement of security transactions; insurance
premiums; fees and expenses of the custodian for all services to the Fund,
including safekeeping of funds and securities and maintaining required books
and accounts; expenses of calculating the net asset value of the Fund
(including but not limited to the fees of independent pricing services);
expenses of meetings of the Fund's shareholders; expenses relating to the
issuance, registration and qualification of shares of the Fund; and such
non-recurring or extraordinary expenses as may arise, including those relating
to actions, suits or proceedings to which the Trust on behalf of the Fund may
<PAGE>
be a party and the legal obligation which the Trust may have to indemnify its
Trustees and officers with respect thereto.
3. Compensation of Citibank. For the services to be rendered and the
facilities to be provided by Citibank hereunder, the Trust shall pay to
Citibank from the assets of the Fund a management fee computed daily and paid
monthly at an annual rate equal to 0.80% of the Fund's average daily net assets
for the Fund's then-current fiscal year. If Citibank provides services
hereunder for less than the whole of any period specified in this Section 3,
the compensation to Citibank shall be accordingly adjusted and prorated.
4. Covenants of Citibank. Citibank agrees that it will not deal with
itself, or with the Trustees of the Trust or the Trust's principal underwriter
or distributor, as principals in making purchases or sales of securities or
other property for the account of the Fund, except as permitted by the 1940
Act, will not take a long or short position in shares of the Fund except as
permitted by the Trust's Declaration of Trust, dated April 13, 1984, as amended
(the "Declaration"), and will comply with all other provisions of the
Declaration, the Trust's By-Laws, as in effect from time to time and the
then-current Registration Statement applicable to the Fund relative to Citibank
and its directors and officers.
5. Limitation of Liability of Citibank. Citibank shall not be liable for
any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the execution of securities
transactions for the Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties hereunder. As used in this Section 5, the term
"Citibank" shall include directors, officers and employees of Citibank as well
as Citibank itself.
6. Activities of Citibank. The services of Citibank to the Fund are not
to be deemed to be exclusive, Citibank being free to render investment
advisory, administrative and/or other services to others. It is understood that
Trustees, officers, and shareholders of the Trust are or may be or may become
interested in Citibank, as directors, officers, employees, or otherwise and
that directors, officers and employees of Citibank are or may become similarly
interested in the Trust and that Citibank may be or may become interested in
the Trust as a shareholder or otherwise.
7. Duration, Termination and Amendments of this Agreement. This Agreement
shall become effective as of the day and year first above written, shall govern
<PAGE>
the relations between the parties hereto thereafter and shall remain in force
until __________ __, 1998, on which date it will terminate unless its
continuance after __________ __, 1998 is "specifically approved at least
annually" (a) by the vote of a majority of the Trustees of the Trust who are
not "interested persons" of the Trust or of Citibank at a meeting specifically
called for the purpose of voting on such approval, and (b) by the Board of
Trustees of the Trust or by "vote of a majority of the outstanding voting
securities" of the Fund.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the "vote of a majority of the outstanding voting
securities" of the Fund, or by Citibank, in each case on not more than 60 days'
nor less than 30 days' written notice to the other party. This Agreement shall
automatically terminate in the event of its "assignment."
This Agreement may be amended only if such amendment is approved by the
"vote of a majority of the outstanding voting securities" of the Fund (except
for any such amendment as may be effected in the absence of such approval
without violating the 1940 Act).
The terms "specifically approved at least annually," "vote of a majority
of the outstanding voting securities," "assignment," "affiliated person," and
"interested persons," when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
Each party acknowledges and agrees that all obligations of the Trust under
this Agreement are binding only with respect to the Fund; that any liability of
the Trust under this Agreement, or in connection with the transactions
contemplated herein, shall be discharged only out of the assets of the Fund;
and that no other series of the Trust shall be liable with respect to this
Agreement or in connection with the transactions contemplated herein.
The undersigned officer of the Trust has executed this Agreement not
individually, but as an officer under the Declaration and the obligations of
this Agreement are not binding upon any of the Trustees, officers or
shareholders of the Trust individually.
8. Governing Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.
<PAGE>
9. Use of Name. The Trust hereby acknowledges that any and all rights in
or to the name "Landmark Small Cap Equity VIP Fund" which exist on the date of
this Agreement or which may arise hereafter are, and under any and all
circumstances shall continue to be, the sole property of Citibank; that
Citibank may assign any or all of such rights to another party or parties
without the consent of the Trust; and that Citibank may permit other parties,
including other investment companies, to use the words "Landmark Small Cap
Equity VIP Fund" in their names. If Citibank, or its assignee as the case may
be, ceases to serve as the adviser and administrator of the Trust, the Trust
hereby agrees to take promptly any and all actions which are necessary or
desirable to change its name so as to delete the words "Landmark Small Cap
Equity VIP Fund."
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
LANDMARK FUNDS I CITIBANK, N.A.
By: By:
Title: Title:
Exhibit 6
FORM OF DISTRIBUTION AGREEMENT
AGREEMENT , dated as of __________ __, 1996, by and between Landmark Funds
I, a Massachusetts business trust (the "Trust"), and The Landmark Funds
Broker-Dealer Services, Inc., a Massachusetts corporation ("Distributor").
WHEREAS, the Trust engages in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (the "1940 Act");
WHEREAS, the Trust's shares of beneficial interest ("Shares") are divided
into separate series representing interests in separate funds of securities and
other assets;
WHEREAS, the Trust wishes to retain the services of a distributor for
Shares of each class of each of the Trust's series listed on Exhibit A hereto
(the "Funds") and has registered the Shares of the Funds under the Securities
Act of 1933, as amended (the "1933 Act");
WHEREAS, Distributor has agreed to act as distributor of the Shares of
each class of the Funds for the period of this Agreement;
NOW, THEREFORE, it is hereby agreed between the parties hereto as follows:
1. Appointment of Distributor.
(a) The Trust hereby appoints Distributor its exclusive agent for the
distribution of Shares of each class of the Funds in jurisdictions wherein such
Shares may be legally offered for sale; provided, however, that the Trust in
its absolute discretion may issue Shares of the Funds in connection with (i)
the payment or reinvestment of dividends or distributions; (ii) any merger or
consolidation of the Trust or of the Funds with any other investment company or
trust or any personal holding company, or the acquisition of the assets of any
such entity or another Fund of the Trust; or (iii) any offer of exchange
permitted by Section 11 of the 1940 Act.
(b) Distributor hereby accepts such appointment as exclusive agent for the
distribution of Shares of each class of the Funds and agrees that it will sell
the Shares as agent for the Trust at prices determined as hereinafter provided
<PAGE>
and on the terms hereinafter set forth, all according to the then-current
prospectus and statement of additional information of each Fund (collectively,
the "Prospectus" and the "Statement of Additional Information"), applicable
laws, rules and regulations and the Declaration of Trust of the Trust.
Distributor agrees to use its best efforts to solicit orders for the sale of
Shares of the Funds, and agrees to transmit promptly to the Trust (or to the
transfer agent of the Funds, if so instructed in writing by the Trust) any
orders received by it for purchase or redemption of Shares.
(c) Distributor may sell Shares of the Funds to or through qualified
securities dealers, financial institutions or others. Distributor will require
each dealer or other such party to conform to the provisions of this Agreement,
the Prospectus, the Statement of Additional Information and applicable law; and
neither Distributor nor any such dealers or others shall withhold the placing
of purchase orders for Shares so as to make a profit thereby.
(d) Distributor shall order Shares of the Funds from the Trust only to the
extent that it shall have received unconditional purchase orders therefor.
Distributor will not make, or authorize any dealers or others to make: (i) any
short sales of Shares; or (ii) any sales of Shares to any Trustee or officer of
the Trust, any officer or director of Distributor or any corporation or
association furnishing investment advisory, managerial or supervisory services
to the Trust, or to any such corporation or association, unless such sales are
made in accordance with the Prospectus and the Statement of Additional
Information.
(e) Distributor is not authorized by the Trust to give any information or
make any representations regarding Shares of the Funds, except such information
or representations as are contained in the Prospectus, the Statement of
Additional Information or advertisements and sales literature prepared by or on
behalf of the Trust for Distributor's use.
(f) The Trust agrees to execute any and all documents, to furnish any and
all information and otherwise to take all actions which may be reasonably
necessary in the discretion of the Trust's officers in connection with the
qualification of Shares of each Fund for sale in such states as Distributor and
the Trust agree.
(g) No Shares of any Fund shall be offered by either Distributor or the
Trust under this Agreement, and no orders for the purchase or sale of such
Shares hereunder shall be accepted by the Trust, if and so long as the
effectiveness of the Trust's then current registration statement as to Shares
<PAGE>
of that Fund or any necessary amendments thereto shall be suspended under any
of the provisions of the 1933 Act, or if and so long as a current prospectus
for Shares of that Fund as required by Section 10 of the 1933 Act is not on
file with the Securities and Exchange Commission; provided, however, that
nothing contained in this paragraph (g) shall in any way restrict the Trust's
obligation to repurchase any Shares from any shareholder in accordance with the
provisions of the applicable Fund's Prospectus or charter documents.
(h) Notwithstanding any provision hereof, the Trust may terminate, suspend
or withdraw the offering of Shares of any Fund whenever, in its sole
discretion, it deems such action to be desirable.
2. Offering Price of Shares. All Fund Shares sold under this Agreement
shall be sold at the public offering price per Share in effect at the time of
the sale, as described in the Prospectus. The excess, if any, of the public
offering price over the net asset value of the Shares sold by Distributor as
agent, and any contingent deferred sales charge applicable to Shares of any
class of any Fund as set forth in the applicable Fund's Prospectus, shall be
retained by Distributor as a commission for its services hereunder. Out of such
commission Distributor may allow commissions, concessions or agency fees to
dealers or other financial institutions, including banks, and may allow them to
others in its discretion in such amounts as Distributor shall determine from
time to time. Except as may be otherwise determined by Distributor from time to
time, such commissions, concessions or agency fees shall be uniform to all
dealers and other financial institutions. At no time shall the Trust receive
less than the full net asset value of the Shares of each Fund, determined in
the manner set forth in the Prospectus and the Statement of Additional
Information.
3. Furnishing of Information.
(a) The Trust shall furnish to Distributor copies of any information,
financial statements and other documents that Distributor may reasonably
request for use in connection with the sale of Shares of the Funds under this
Agreement. The Trust shall also make available a sufficient number of copies of
the Funds' Prospectus and Statement of Additional Information for use by the
Distributor.
(b) The Trust agrees to advise Distributor immediately in writing:
<PAGE>
(i) of any request by the Securities and Exchange Commission for
amendments to any registration statement concerning a Fund or to a
Prospectus or for additional information;
(ii) in the event of the issuance by the Securities and Exchange
Commission of any stop order suspending the effectiveness of any such
registration statement or Prospectus or the initiation of any proceeding
for that purpose;
(iii) of the happening of any event which makes untrue any statement
of a material fact made in any such registration statement or Prospectus
or which requires the making of a change in such registration statement or
Prospectus in order to make the statements therein not misleading; and
(iv) of all actions of the Securities and Exchange Commission with
respect to any amendments to any such registration statement or Prospectus
which may from time to time be filed with the Securities and Exchange
Commission.
4. Expenses.
(a) The Trust will pay or cause to be paid the following expenses:
organization costs of the Funds; compensation of Trustees who are not
"interested persons" of the Trust; governmental fees; interest charges; loan
commitment fees; taxes; membership dues in industry associations allocable to
the Trust; fees and expenses of independent auditors, legal counsel and any
transfer agent, distributor, registrar or dividend disbursing agent of the
Trust; expenses of issuing and redeeming shares of beneficial interest and
servicing shareholder accounts; expenses of preparing, typesetting, printing
and mailing prospectuses, statements of additional information, shareholder
reports, notices, proxy statements and reports to governmental officers and
commissions and to existing shareholders of the Funds; expenses connected with
the execution, recording and settlement of security transactions; insurance
premiums; fees and expenses of the custodian for all services to the Funds,
including safekeeping of funds and securities and maintaining required books
and accounts; expenses of calculating the net asset value of the Funds
(including but not limited to the fees of independent pricing services);
expenses of meetings of shareholders; expenses relating to the issuance,
registration and qualification of shares; and such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
<PAGE>
or proceedings to which the Trust may be a party and the legal obligation which
the Trust may have to indemnify its Trustees and officers with respect thereto.
(b) Except as otherwise provided in this Agreement, Distributor will pay
or cause to be paid all expenses connected with its own qualification as a
dealer under state and federal laws and all other expenses incurred by
Distributor in connection with the sale of Shares of each Fund as contemplated
by this Agreement.
5. Repurchase of Shares. Distributor as agent and for the account of the
Trust may repurchase Shares of the Funds offered for resale to it and redeem
such Shares at their net asset value.
6. Indemnification by the Trust. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of Distributor, the Trust agrees to indemnify
Distributor, its officers and directors, and any person which controls
Distributor within the meaning of the 1933 Act against any and all claims,
demands, liabilities and expenses that any such indemnified party may incur
under the 1933 Act, or common law or otherwise, arising out of or based upon
any alleged untrue statement of a material fact contained in the registration
statement for any Fund, any Prospectus or Statement of Additional Information,
or any advertisements or sales literature prepared by or on behalf of the Trust
for Distributor's use, or any omission to state a material fact therein, the
omission of which makes any statement contained therein misleading, unless such
statement or omission was made in reliance upon and in conformity with
information furnished to the Trust in connection therewith by or on behalf of
Distributor. Nothing herein contained shall require the Trust to take any
action contrary to any provision of its Declaration of Trust or any applicable
statute or regulation.
7. Indemnification by Distributor. Distributor agrees to indemnify the
Trust, its officers and Trustees and any person which controls the Trust within
the meaning of the 1933 Act against any and all claims, demands, liabilities
and expenses that any such indemnified party may incur under the 1933 Act, or
common law or otherwise, arising out of or based upon (i) any alleged untrue
statement of a material fact contained in the registration statement for any
Fund, any Prospectus or Statement of Additional Information, or any
advertisements or sales literature prepared by or on behalf of the Trust for
Distributor's use, or any omission to state a material fact therein, the
omission of which makes any statement contained therein misleading, if such
<PAGE>
statement or omission was made in reliance upon and in conformity with
information furnished to the Trust in connection therewith by or on behalf of
Distributor; and (ii) any act or deed of Distributor or its sales
representatives that has not been authorized by the Trust in any Prospectus or
Statement of Additional Information or by this Agreement.
8. Term and Termination.
(a) Unless terminated as herein provided, this Agreement shall continue in
effect as to each Fund until __________ __, 1998 and shall continue in full
force and effect as to each Fund for successive periods of one year thereafter,
but only so long as each such continuance is approved (i) by either the
Trustees of the Trust or by vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of the particular Fund, or (ii) by vote
of a majority of the Trustees of the Trust who are not parties to this
Agreement or interested persons (as defined in the 1940 Act) of any such party
and who have no direct or indirect financial interest in this Agreement or in
any agreement related thereto ("Independent Trustees"), cast at a meeting
called for the purpose of voting on such approval.
(b) This Agreement may be terminated as to any Fund on not less than
thirty days' nor more than sixty days' written notice to the other party.
(c) This Agreement shall automatically terminate in the event of its
assignment (as defined in the 1940 Act).
9. Limitation of Liability. The obligations of the Trust hereunder shall
not be binding upon any of the Trustees, officers or shareholders of the Trust
personally, but shall bind only the assets and property of the particular Fund
or Funds in question, and not any other Fund or series of the Trust. The term
"Landmark Funds I" means and refers to the Trustees from time to time serving
under the Declaration of Trust of the Trust, a copy of which is on file with
the Secretary of the Commonwealth of Massachusetts. The execution and delivery
of this Agreement has been authorized by the Trustees, and this Agreement has
been signed on behalf of the Trust by an authorized officer of the Trust,
acting as such and not individually, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the assets and property of the Trust as
provided in the Declaration of Trust.
<PAGE>
10. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts and the provisions of the 1940
Act.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
Landmark Funds I
By:_______________________________
The Landmark Funds Broker-Dealer
Services, Inc.
By:_______________________________
<PAGE>
Exhibit A
Funds
Landmark Small Cap Equity VIP Fund
