<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
LANDMARK FUNDS I--CITISELECT-SM- FOLIO 200,
CITISELECT-SM- FOLIO 300, CITISELECT-SM- FOLIO 400 AND
CITISELECT-SM- FOLIO 500
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
LEA ANNE COPENHEFER
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1. Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
2. Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
4. Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
5. Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
-----------------------------------------------------------------------
2. Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
3. Filing Party:
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4. Date Filed:
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<PAGE>
CITISELECT-SM- FOLIO 200, CITISELECT-SM- FOLIO 300,
CITISELECT-SM- FOLIO 400 AND CITISELECT-SM- FOLIO 500
6 St. James Avenue
Boston, Massachusetts 02116
August 29, 1997
Dear Shareholder:
The accompanying materials relate to a Special Meeting of Shareholders of
CitiSelect-SM- Folio 200, CitiSelect-SM- Folio 300, CitiSelect-SM- Folio 400 and
CitiSelect-SM- Folio 500. The Meeting will be held on Friday, October 17, 1997
at 3 p.m. Eastern time.
YOUR PARTICIPATION AT THIS MEETING IS VERY IMPORTANT IN ORDER TO ACCOMPLISH
PROPOSALS WHICH YOUR BOARD OF TRUSTEES HAS DETERMINED ARE FAIR AND REASONABLE
AND IN YOUR BEST INTERESTS.
If you cannot attend the Meeting, you may participate by proxy. As a
shareholder, you cast one vote for each share that you own. Please take a few
moments to read the enclosed materials and then cast your vote on the enclosed
proxy card. If the Funds do not receive your proxy card, our proxy solicitor,
Shareholder Communications Corporation ("SCC") may contact you to help you
decide how to cast your vote.
VOTING TAKES ONLY A FEW MINUTES. EACH SHAREHOLDER'S VOTE IS IMPORTANT. YOUR
PROMPT RESPONSE WILL BE MUCH APPRECIATED.
Items 1, 2 and 3 are interrelated. In general, they involve proposals to
restructure the Funds to take advantage of recent amendments to federal law
which, among other things, would allow the Funds to be managed in a more
cost-efficient and administratively simpler manner. Importantly, the Funds'
expense ratios will not increase as a result of the proposed restructuring. In
fact, it is expected that the proposed changes will result in lower custody and
fund accounting charges, and may eventually result in a decrease in the Funds'
expense ratios.
Shareholders also are being asked to vote on certain changes to the Funds'
investment restrictions and governing documents, as well as certain other
matters, to permit the restructuring described above. In addition, shareholders
are being asked to authorize the selection of subadvisers by the Board, to
authorize certain other technical amendments to the Funds' investment
restrictions and to approve the selection of the Funds' accountants.
After you have voted on the proposals, please be sure to SIGN YOUR PROXY CARD
AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE. If you have any questions
regarding the issues to be voted on, or need assistance in completing your proxy
card, please contact SCC at 1-800-733-8481 x492.
We appreciate your participation in this important meeting. Thank you.
Sincerely,
/s/ Philip W. Coolidge
Philip W. Coolidge
President
1
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CITISELECT-SM- FOLIO 200, CITISELECT-SM- FOLIO 300,
CITISELECT-SM- FOLIO 400 AND CITISELECT-SM- FOLIO 500
6 St. James Avenue
Boston, Massachusetts 02116
Telephone: (617) 423-1679
NOTICE OF SPECIAL MEETING
OF SHAREHOLDERS
To be held October 17, 1997
A Special Meeting of Shareholders of CitiSelect-SM- Folio 200, CitiSelect-SM-
Folio 300, CitiSelect-SM- Folio 400 and CitiSelect-SM- Folio 500 will be held at
Citicorp Center, 153 East 53rd Street, 14th Floor, New York, New York, on
Friday, October 17, 1997 at 3 p.m., Eastern Time, for the following purposes:
ITEM 1. To vote on an amendment to the Funds' Declaration of Trust to allow
the assets of each Fund to be invested in one or more investment
companies to the extent not prohibited by the Investment Company Act
of 1940, the rules and regulations thereunder, and exemptive orders
granted under such Act (the "1940 Act").
ITEM 2. To vote on an amendment to the fundamental investment policies of each
Fund to allow the assets of that Fund to be invested in one or more
investment companies to the extent not prohibited by the 1940 Act.
ITEM 3. To vote on an Amended and Restated Management Agreement for each Fund
with Citibank, N.A.
ITEM 4. To vote on authorizing the Trustees to select and change investment
subadvisers and enter into investment subadvisory agreements without
obtaining the approval of shareholders.
ITEM 5. To vote on an amendment to the fundamental investment policies of each
Fund concerning that Fund's ability to make loans to other persons and
to buy or sell futures contracts and options on futures.
ITEM 6. To vote on the selection of Price Waterhouse LLP as the independent
certified public accountants for each Fund.
ITEM 7. To transact such other business as may properly come before the
Special Meeting of Shareholders and any adjournments thereof.
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THE BOARD OF TRUSTEES OF THE FUNDS RECOMMENDS THAT YOU VOTE IN FAVOR OF EACH OF
ITEMS 1 THROUGH 6.
Only shareholders of record on August 18, 1997 will be entitled to vote at the
Special Meeting of Shareholders and at any adjournments thereof.
Linda T. Gibson, Secretary
August 29, 1997
YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOUR PROMPTLY VOTING, SIGNING AND
RETURNING THE ENCLOSED PROXY, WHICH WILL HELP AVOID THE ADDITIONAL EXPENSE OF A
SECOND SOLICITATION. THE ENCLOSED ADDRESSED ENVELOPE REQUIRES NO POSTAGE AND IS
PROVIDED FOR YOUR CONVENIENCE.
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CITISELECT-SM- FOLIO 200, CITISELECT-SM- FOLIO 300,
CITISELECT-SM- FOLIO 400 AND CITISELECT-SM- FOLIO 500
6 St. James Avenue
Boston, Massachusetts 02116
Telephone: (617) 423-1679
PROXY STATEMENT
This Proxy Statement and Notice of Special Meeting with accompanying form of
proxy are being furnished in connection with the solicitation of proxies by the
Board of Trustees of CitiSelect-SM- Folio 200, CitiSelect-SM- Folio 300,
CitiSelect-SM- Folio 400 and CitiSelect-SM- Folio 500 for use at a Special
Meeting of Shareholders of these Funds, or any adjournment thereof, to be held
at Citicorp Center, 153 East 53rd Street, 14th Floor, New York, New York, on
Friday, October 17, 1997 at 3 p.m., Eastern Time. The Meeting is being held to
vote on matters which will permit a proposed restructuring of the Funds and
certain other matters, as described below and in the accompanying President's
Letter and Notice of Special Meeting.
The close of business on August 18, 1997 has been fixed as the Record Date for
the determination of shareholders entitled to notice of and to vote at the
Meeting. 12,914,949.161 shares of CitiSelect-SM- Folio 200, 25,488,689.436
shares of CitiSelect-SM- Folio 300, 34,269,228.360 shares of CitiSelect-SM-
Folio 400 and 14,314,774.291 shares of CitiSelect-SM- Folio 500, without par
value, were outstanding as of the close of business on the Record Date.
Shareholders of record at the close of business on the Record Date will be
entitled to one vote for each share held.
The Funds' Annual Report for the fiscal year ended December 31, 1996,
including audited financial statements, has previously been sent to shareholders
and is available without charge, by written request or by calling Shareholder
Communications Corporation at (800) 733-8481 x492.
This Proxy Statement and Notice of Special Meeting with accompanying form of
proxy are being mailed by the Board of Trustees on or about September 3, 1997.
Each Fund invests in equity, fixed income and money market securities in
different proportions that correspond to that Fund's investment objective and
its level of potential risk and return. As described below, the Funds propose to
change the way they make their investments so that all of the Funds' assets of a
particular asset class (such as international equity securities or money market
securities) may be managed in a single pool. This change has been made possible
by a recent amendment of federal law. The Board believes this change will allow
the Funds to manage their assets in a more
4
<PAGE>
efficient manner by taking advantage of economies of scale. Shareholders are
being asked to vote on certain changes to the Funds' investment restrictions and
governing documents, as well as certain other matters, to permit this change.
Shareholders are also being asked to authorize the selection of subadvisers by
the Board, to authorize certain other technical amendments to the Funds'
investment restrictions and to approve the selection of the Funds' accountants.
MANNER OF VOTING PROXIES AND VOTE REQUIRED
If the accompanying form of proxy is executed properly and returned, shares
represented by it will be voted at the Meeting in accordance with the
instructions on the proxy. Shareholders of each Fund will vote separately with
respect to each Item. IF NO INSTRUCTIONS ARE SPECIFIED, ALL SHARES OF EACH FUND
WILL BE VOTED FOR EACH OF PROPOSED ITEMS 1 THROUGH 6. If the enclosed form of
proxy is executed and returned, it may nevertheless be revoked prior to its
exercise by a signed writing delivered at the Meeting or filed with the
Secretary of the Funds.
If sufficient votes to approve the proposed Items 1 through 6 are not
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those shares voted at the Meeting.
When voting on a proposed adjournment, the persons named as proxies will vote
all shares that they are entitled to vote with respect to Items 1 through 6 FOR
the proposed adjournment, unless directed to disapprove the Item, in which case
such shares will be voted against the proposed adjournment.
With respect to each Fund, the presence in person or by proxy of the holders
of a majority of the outstanding shares of that Fund entitled to vote is
required to constitute a quorum at the Meeting for purposes of voting on Items 1
through 6. For purposes of determining the presence of a quorum for transacting
business at the Meeting, abstentions and broker "non-votes" (that is, proxies
from brokers or nominees indicating that such persons have not received
instructions from the beneficial owner or other persons entitled to vote shares
on a particular matter with respect to which the brokers or nominees do not have
discretionary power) will be treated as shares that are present but which have
not been voted. For this reason, abstentions and broker "non-votes" will have
the effect of a "no" vote for purposes of obtaining the requisite approval of
Items 1 through 6.
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<PAGE>
GENERAL BACKGROUND
The Funds are asset allocation funds managed by Citibank, N.A. Citibank
allocates each Fund's assets among equity, fixed income and money market
instruments in different proportions that correspond to the Funds' investment
objectives and their levels of potential risk and return. Citibank generally
diversifies the equity investments of each Fund among large capitalization
securities, small capitalization securities and international securities.
Citibank generally diversifies the fixed income securities of each Fund among
U.S. and non-U.S. government and corporate bonds. There is, however, no
requirement that each Fund invest in all of these types of equity and fixed
income securities at all times.
CURRENT STRUCTURE
The Funds currently are organized in a two-tier, master/feeder structure, as
shown in the chart below. Each Fund invests all of its investable assets in a
single investment company (an "Old Portfolio") with the same investment
objective and policies as that Fund. Each Old Portfolio buys, holds and sells
securities in accordance with its objective and policies. Each Fund may withdraw
its investment in its Old Portfolio at any time, and will do so when the Fund's
Trustees believe that withdrawal would be in the best interests of the Fund's
shareholders.
The assets of each Old Portfolio currently are allocated among up to eight
types of securities, or asset classes. These asset classes are: large
capitalization growth securities, large capitalization value securities, small
capitalization growth securities, small capitalization value securities,
international equity securities, U.S. fixed income securities, foreign
government securities, and money market securities. Citibank manages certain of
these asset classes itself, and employs and supervises subadvisers for the
remaining asset classes. Currently, Citibank manages the large capitalization
growth, small capitalization growth, U.S. fixed income and money market asset
classes. The following subadvisers currently manage the asset classes indicated:
large capitalization value securities, Miller Anderson & Sherrerd, LLP; small
capitalization value securities, Franklin Advisory Services, Inc.; international
equity securities, Hotchkis and Wiley; and foreign government securities,
Pacific Investment Management Company. Citibank may terminate the services of
any subadviser at any time, and may assume management of that subadviser's asset
class; however, the hiring of any new subadviser currently requires shareholder
approval.
Under this existing structure, Citibank and each subadviser manage the assets
in each asset class for each Old Portfolio separately. This means, for example,
that Citibank manages four pools of assets consisting of large capitalization
growth securities, one for each Old Portfolio. Because the assets of
6
<PAGE>
each Old Portfolio currently are allocated among up to eight types of
securities, and because there are four Old Portfolios, Citibank and the
subadvisers currently manage a total of 32 separate pools of assets. This
structure is administratively burdensome and expensive for the Funds. In
addition, because of the separate pools of assets, the Funds are limited in
their ability to take advantage of economies of scale of asset management.
PROPOSED STRUCTURE
Until recently, mutual funds could not invest their assets in more than one
other registered investment company without obtaining exemptive relief from the
Securities and Exchange Commission. Recent amendments to the federal Investment
Company Act of 1940 now permit funds to invest their assets in multiple
registered investment companies so long as the investment companies hold
themselves out to investors as related companies for purposes of investment and
investor services.
In order to take advantage of this change in law and any future changes in law
on this topic, the Funds are proposing the following restructuring: multiple new
or existing investment companies ("New Portfolios") will be created or utilized,
each corresponding to a particular asset class of the existing Old Portfolios or
any additional asset class in which the Funds are permitted to invest. Each Old
Portfolio will contribute each of its securities to that New Portfolio
representing the asset class for that particular security (E.G., foreign bonds
will be contributed to the New Portfolio which will invest in foreign bonds and
related investments). In exchange, each Old Portfolio will receive an interest
in the New Portfolio to which the contribution was made. The Old Portfolios will
then dissolve, and will distribute to their investors, including the Funds,
interests in the New Portfolios. As a result, each Fund will invest all of its
investable assets in the New Portfolios. After giving effect to the
restructuring, Citibank will perform its asset allocation services at the Fund
level; these services currently are performed at the Old Portfolio level.
Under this proposed structure, Citibank and each subadviser will manage the
assets in each asset class in a single pool. This means, for example, that
Citibank will manage all large cap growth securities for all of the Funds in a
single New Portfolio. If the Funds' assets continue to be allocated among eight
types of securities, Citibank and the subadvisers would manage a total of eight,
as opposed to 32, separate pools of assets.
7
<PAGE>
After the proposed restructuring, the Funds will continue to be organized in a
two-tier structure. Each Fund will invest its assets in multiple New Portfolios,
instead of a single Old Portfolio. The restructuring is illustrated by the chart
below.
DESCRIPTION OF CHART
(Page layout- landscape)
Heading above chart on top half of page: "Before Restructuring: Each Fund
invests all of its investable assets in an Old Portfolio."
TOP HALF OF PAGE
Four small boxes across top of page. Each box contains the name of one fund. The
boxes contain the following names (from left to right): CitiSelect Folio 200,
CitiSelect Folio 300, CitiSelect Folio 400, and CitiSelect Folio 500. A large
box is under each of the four small boxes. An arrow connects each small box with
the large box beneath it. The large box to the far left contains the heading
"Old Portfolio" with the following names listed from top to bottom: Large Cap
Growth Securities, Small Cap Growth Securities, Large Cap Value Securities,
Small Cap Value Securities, Intermediate Income Securities, International
Securities, Foreign Government Bonds, and Short-Term Securities. The second
large box from the left includes the heading "Old Portfolio" with the following
names listed from top to bottom: Large Cap Growth Securities, Small Cap Growth
Securities, Large Cap Value Securities, Small Cap Value Securities, Intermediate
Income Securities, International Securities, Foreign Government Bonds, and
Short-Term Securities. The third large box from the left includes the heading
"Old Portfolio" with the following names listed from top to bottom: Large Cap
Growth Securities, Small Cap Growth Securities, Large Cap Value Securities,
Small Cap Value Securities, Intermediate Income Securities, International
Securities, Foreign Government Bonds, and Short-Term Securities. The large box
to the far right side of the page includes the heading "Old Portfolio" with the
following names listed from top to bottom: Large Cap Growth Securities, Small
Cap Growth Securities, Large Cap Value Securities, Small Cap Value Securities,
Intermediate Income Securities, International Securities, Foreign Government
Bonds, and Short-Term Securities.
BOTTOM HALF OF PAGE
Heading above chart on bottom half of page: "After Restructuring: Each Fund
invests all of its investable assets in multiple portfolios."
Four rectangular boxes across bottom of page. Each box includes the name of one
fund. The names of the individual funds included in each box are (from left to
right): CitiSelect Folio 200, CitiSelect Folio 300, CitiSelect Folio 400, and
CitiSelect Folio 500. Eight square boxes are situated across the bottom of the
page under the four rectangular boxes. Each of the eight boxes contains the
heading "New Portfolio". In each of the eight boxes under the "New Portfolio"
heading is the name of a portfolio. The names of the portfolios in the boxes are
(from left to right): Large Cap Growth Securities, Small Cap Growth Securities,
Large Cap Value Securities, Small Cap Value Securities, Intermediate Income
Securities, International Securities, Foreign Government Bonds, and Short-Term
Securities. Arrows connect each of the four rectangular boxes with the eight
square boxes beneath it.
THE FUNDS' EXPENSE RATIOS WILL NOT INCREASE AS A RESULT OF THE RESTRUCTURING.
IN FACT, IT IS EXPECTED THAT THE RESTRUCTURING WILL RESULT IN LOWER CUSTODY AND
FUND ACCOUNTING CHARGES. THIS WILL ALLOW CITIBANK TO REDUCE ITS VOLUNTARY
WAIVERS OF OTHER FEES AND MAY EVENTUALLY RESULT IN A DECREASE IN THE FUNDS'
EXPENSE RATIOS. SHAREHOLDERS ALSO SHOULD NOTE THAT THE CONTRACTUAL LEVEL OF
MANAGEMENT FEES FOR FUND SHAREHOLDERS (INCLUDING THEIR SHARE OF THE NEW
PORTFOLIOS' MANAGEMENT FEES) WILL NOT INCREASE. IT IS EXPECTED THAT THE SAME
PERSONNEL AT CITIBANK AND AT EACH SUBADVISER WHO CURRENTLY PROVIDE MANAGEMENT
SERVICES WILL CONTINUE TO DO SO AFTER THE RESTRUCTURING, AND THE NATURE, LEVEL
AND QUALITY OF SERVICES TO THE FUNDS WILL NOT BE ADVERSELY AFFECTED.
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The following table from the Funds' prospectus summarizes estimated
shareholder transaction and annual operating expenses for each Fund and for its
Old Portfolio. The contractual level of management fees for each Fund (including
the Fund's share of the New Portfolios' management fees) will not increase, and
the table is not expected to change, as a result of the restructuring.
<TABLE>
<CAPTION>
CITISELECT CITISELECT CITISELECT CITISELECT
FOLIO 200 FOLIO 300 FOLIO 400 FOLIO 500
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES...................... None None None None
Annual Fund Operating Expenses
after Fee Waivers
(as a Percentage of Net
Assets):
Management Fee.................. 0.75% 0.75% 0.75% 0.75%
12b-1 Fees (including service
fees) (1)..................... 0.50% 0.50% 0.50% 0.50%
Other Expenses (2).............. 0.25% 0.25% 0.50% 0.50%
Total Fund Operating Expenses
(2)........................... 1.50% 1.50% 1.75% 1.75%
</TABLE>
- ----------------------------------
(1) Includes fees for distribution and shareholder servicing.
(2) After voluntary fee waivers and reimbursements. Absent fee waivers and
reimbursements, "Other Expenses" and "Total Fund Operating Expenses" would be
1.41% and 2.66% for CitiSelect Folio 200, 1.01% and 2.26% for CitiSelect
Folio 300, 0.95% and 2.20% for CitiSelect Folio 400 and 1.55% and 2.80% for
CitiSelect Folio 500.
This table is intended to assist investors in understanding the various costs
and expenses that a shareholder of a Fund will bear, either directly or
indirectly. Other Expenses in the table are based on estimated amounts for
the current fiscal year. There can be no assurance that the fee waivers and
reimbursements reflected in the table will continue. Long-term shareholders
in a Fund could pay more in sales charges than the economic equivalent of the
maximum front-end sales charges permitted by the National Association of
Securities Dealers, Inc.
EXAMPLE: A shareholder would pay the following expenses on a $1,000 investment,
assuming redemption at the end of each period indicated below:
<TABLE>
<CAPTION>
ONE YEAR THREE YEARS
------------- ---------------
<S> <C> <C>
CitiSelect Folio 200............................................. $ 15 $ 47
CitiSelect Folio 300............................................. $ 15 $ 47
CitiSelect Folio 400............................................. $ 18 $ 55
CitiSelect Folio 500............................................. $ 18 $ 55
</TABLE>
The Example assumes a 5% annual return and that all dividends are reinvested and
reflects certain voluntary fee waivers and reimbursements. Absent fee waivers
and reimbursements, the amounts in the example would be $27 and $83 for
CitiSelect Folio 200, $23 and $71 for CitiSelect Folio 300, $22 and $69 for
CitiSelect Folio 400 and $28 and $87 for CitiSelect Folio 500. Expenses are
estimated. The assumption of a 5% annual return is required by the
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Securities and Exchange Commission for all mutual funds, and is not a prediction
of any Funds' future performance. THE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURNS OF ANY FUND. ACTUAL
EXPENSES AND RETURNS MAY BE GREATER OR LESS THAN THOSE SHOWN.
The Funds' Trustees believe that the restructuring is in the best interests of
Fund shareholders. The Trustees will implement the restructuring for each Fund
if shareholders of that Fund and each other Fund approve each of the proposals
in Items 1, 2 and 3 below. The proposal in Item 4 will permit the Trustees,
subject to applying for and receiving exemptive relief from the Securities and
Exchange Commission, to hire new subadvisers for the New Portfolios without Fund
shareholder approval. The Trustees will implement the restructuring whether or
not Fund shareholders approve the proposal in Item 4.
In the event that the proposals in Items 1, 2 and 3 below do not receive the
requisite shareholder approval for the Funds, the Trustees will consider
possible alternatives, which might include resubmission of the proposals for
approval by shareholders of the Funds.
ITEM 1. TO VOTE ON AN AMENDMENT TO THE FUNDS' DECLARATION OF TRUST TO ALLOW
THE ASSETS OF EACH FUND TO BE INVESTED IN ONE OR MORE INVESTMENT
COMPANIES TO THE EXTENT NOT PROHIBITED BY THE 1940 ACT.
It is proposed that the Funds' Declaration of Trust be amended to permit the
Funds to invest in other investment companies to the extent not prohibited by
the 1940 Act.
The Funds' Declaration of Trust presently permits each Fund to invest all of
its investable assets in a single investment company that is registered under
the 1940 Act. Pursuant to this authority, each Fund invests all of its
investable assets in an Old Portfolio with the same investment objectives and
policies as the Fund. As described above, recent amendments to the 1940 Act
permit mutual funds to invest their investable assets in multiple registered
investment companies so long as certain conditions are met. It is possible that
there could be additional amendments to the 1940 Act in the future which affect
mutual funds' ability to invest in other funds.
The proposed amendment to the Funds' Declaration of Trust which appears below
will allow the Funds to take advantage of the recent changes in law, as well as
future changes in law or regulation on this topic. This amendment will also
facilitate the Funds completing the proposed restructuring described under
"General Background" above. The Funds' Board of Trustees believe that this
amendment will be to the Funds' advantage and is in the best interests of the
shareholders of each Fund. It is proposed that
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Section 3.2(d) of the Declaration of Trust be amended by deleting the words
below that have been marked through and adding the ITALICIZED words:
(d) Notwithstanding any other provision of this Declaration to the contrary,
the Trustees shall have the power in their discretion without any requirement
of approval by shareholders to either invest all or a portion of the Trust
Property of CitiSelect-SM- Folio 200, CitiSelect-SM- Folio 300, CitiSelect-SM-
Folio 400 and CitiSelect-SM- Folio 500 AND OF EACH OTHER SERIES OF THE TRUST
(OTHER THAN LANDMARK BALANCED FUND), or sell all or a portion of such Trust
Property and invest the proceeds of such sales, in <#>another investment
company that is registered under the 1940 Act</#> ONE OR MORE INVESTMENT
COMPANIES TO THE EXTENT NOT PROHIBITED BY THE 1940 ACT AND EXEMPTIVE ORDERS
GRANTED UNDER SUCH ACT.
Under the Declaration of Trust, the 1940 Act is defined to include both that
Act itself and the rules and regulations under that Act; the amendment would be
based on that definition.
The Old Portfolios' Declaration of Trust currently requires that investors in
each Old Portfolio approve sales, transfers or exchanges of all or substantially
all of the assets of that Old Portfolio, including the transfer of each Old
Portfolio's assets to the New Portfolios. See "General Background." The Old
Portfolios will call a meeting of their investors to approve the transfer of
each Old Portfolio's assets to the New Portfolios. By voting in favor of this
Item, Fund shareholders will be authorizing the Funds' Trustees to vote in favor
of this transfer.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the outstanding shares of
a Fund is required for approval of the amendment to the Declaration of Trust
with respect to that Fund. This requires approval by the holders of 67% or more
of the outstanding shares of the Fund which are present at the
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Meeting if the holders of more than 50% of such shares are present in person or
by proxy, or more than 50% of the outstanding shares of the Fund, whichever is
less (a "Majority Shareholder Vote").
THE BOARD OF TRUSTEES OF THE FUNDS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF EACH FUND VOTE FOR APPROVAL OF THE PROPOSED AMENDMENT TO THE
DECLARATION OF TRUST.
ITEM 2. TO VOTE ON AN AMENDMENT TO THE FUNDAMENTAL INVESTMENT POLICIES OF EACH
FUND TO ALLOW THE ASSETS OF THAT FUND TO BE INVESTED IN ONE OR MORE
INVESTMENT COMPANIES TO THE EXTENT NOT PROHIBITED BY THE 1940 ACT.
Each Fund has adopted certain fundamental investment restrictions which, as a
matter of law, cannot be changed without shareholder approval. Certain of these
fundamental investment restrictions currently permit each Fund to invest its
investable assets in a single investment company having the same investment
objectives and policies and substantially the same investment restrictions as
that Fund. As noted above, recent amendments to the 1940 Act permit mutual funds
to invest their investable assets in multiple investment companies so long as
certain conditions are met. There also may be future amendments to the 1940 Act
affecting mutual funds' ability to invest in other funds.
In order to take advantage of the flexibility of current and future applicable
law and regulation and to permit the Funds to enter into the restructuring, it
is proposed that each of the fundamental investment restrictions listed in
EXHIBIT A be amended as indicated in that Exhibit. Shareholders also should
review Item 5 for additional proposed changes to these investment restrictions.
The Trustees believe that these proposed amendments to the fundamental
investment policies are in the best interests of the shareholders of each Fund.
The Old Portfolios have adopted fundamental restrictions which are
substantially similar to those listed in EXHIBIT A. Each of these restrictions
for the Old Portfolios will be amended in the same way that the Funds'
restrictions will be amended. The Old Portfolios will call a meeting of their
investors to approve these amendments. By voting in favor of this Item, Fund
shareholders will be authorizing the Funds' Trustees to vote in favor of these
amendments to the Old Portfolios' fundamental investment restrictions.
VOTE REQUIRED
Because the investment restrictions in EXHIBIT A are fundamental policies of
each Fund, approval of this proposal with respect to a Fund will require a
Majority Shareholder Vote of the shareholders of that Fund.
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THE BOARD OF TRUSTEES OF THE FUNDS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF EACH FUND VOTE FOR APPROVAL OF THE PROPOSED AMENDMENT TO THE
FUNDS' FUNDAMENTAL INVESTMENT POLICIES TO ALLOW THE ASSETS OF EACH FUND TO BE
INVESTED IN ONE OR MORE INVESTMENT COMPANIES TO THE EXTENT NOT PROHIBITED BY THE
1940 ACT.
ITEM 3. TO VOTE ON AN AMENDED AND RESTATED MANAGEMENT AGREEMENT FOR EACH FUND
WITH CITIBANK, N.A.
Each Fund has entered into a separate Management Agreement with Citibank, N.A.
(the "Current Management Agreements"). Under the Current Management Agreements,
Citibank is responsible for the overall management of each Fund's business
affairs. Citibank is also responsible for certain administrative services to the
Funds, including the provision of general office facilities and supervising the
overall administration of each Fund. The Current Management Agreements are
identical, with the exception of the identity of the Fund.
Citibank does not currently provide investment advisory services to the Funds.
Instead, investment advisory services are provided to the Old Portfolios. If the
restructuring is implemented, Citibank will provide investment advisory services
to each Fund, including the asset allocation services described above. See
"General Background." As the Current Management Agreements do not contemplate
Citibank providing these services, they must be amended to do so. The same
personnel at Citibank who currently provide management services to the Funds and
the Old Portfolios are expected to continue to do so after the Current
Management Agreements are amended, and the nature, level and quality of services
to the Funds will not be adversely effected.
THE CONTRACTUAL LEVEL OF MANAGEMENT FEES FOR FUND SHAREHOLDERS (INCLUDING
THEIR SHARE OF THE NEW PORTFOLIOS' MANAGEMENT FEES) WILL NOT INCREASE. THE
FUNDS' TOTAL EXPENSE RATIOS (INCLUDING THEIR SHARES OF THE NEW PORTFOLIOS'
EXPENSES) ALSO WILL NOT INCREASE AS A RESULT OF THE RESTRUCTURING. IN FACT, IT
IS EXPECTED THAT THE RESTRUCTURING WILL RESULT IN LOWER CUSTODY AND FUND
ACCOUNTING CHARGES. THIS WILL ALLOW CITIBANK TO REDUCE ITS VOLUNTARY WAIVERS OF
OTHER FEES AND MAY EVENTUALLY RESULT IN A DECREASE IN THE FUNDS' EXPENSE RATIOS.
A copy of the management agreement for each Fund as proposed to be amended
(the "Amended and Restated Management Agreement") is attached hereto as EXHIBIT
B. Shareholders should refer to EXHIBIT B for the complete terms of the Amended
and Restated Management Agreement of each Fund, and the description of the
Amended and Restated Management Agreement set forth herein is qualified in its
entirety by the provisions of the Amended and Restated Management Agreement as
set forth in EXHIBIT B.
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Each Fund's Current Management Agreement was approved by the initial
shareholder of that Fund on June 17, 1996 (September 3, 1996 for CitiSelect-SM-
Folio 500).
COMPARISON OF THE CURRENT MANAGEMENT AGREEMENTS
AND THE AMENDED AND RESTATED MANAGEMENT AGREEMENTS
If the Amended and Restated Management Agreement is approved by a Fund's
shareholders, Citibank will provide investment advisory services directly to
that Fund. The terms and conditions of each Amended and Restated Management
Agreement are identical to those of the Current Management Agreement for that
Fund, with the exception of the commencement and termination dates, the
investment management fees and the provisions as described in the following
paragraph. A description of the investment management fees payable under the
Amended and Restated Management Agreements is set forth below. See "Management
Fees."
Under each Amended and Restated Management Agreement, Citibank as investment
manager will furnish continuously an investment program for the Funds and will
determine from time to time what securities are purchased, sold or exchanged,
and what portion of the assets of the Funds are held uninvested, subject always
to the restrictions of the Funds' Declaration of Trust and By-laws, as each may
be amended from time to time, the provisions of the 1940 Act and the Funds'
prospectus. Citibank will also make recommendations as to the manner in which
proxies, voting rights, rights to consent to corporate action and any other
rights pertaining to portfolio securities will be exercised; and will take all
actions which Citibank deems necessary to implement Fund investment policies.
Under each Amended and Restated Management Agreement, as under each Current
Management Agreement, Citibank will perform such administrative and management
services as may from time to time be reasonably requested, including: (i)
providing office space, equipment and clerical personnel necessary for
maintaining the organization of the Fund and for performing administrative and
management functions; (ii) supervising the overall administration of the Fund,
including negotiation of contracts and fees with and the monitoring of
performance and billings of the Fund's transfer agent, shareholder servicing
agents, custodian and other independent contractors or agents; (iii) preparing
and, if applicable, filing all documents required for compliance by the Fund
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; (iv) preparing
agendas and supporting documents for and minutes of meetings of Trustees,
committees of Trustees and shareholders; and (v) arranging for maintenance of
the books and records of the Fund.
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The Amended and Restated Management Agreement, if approved by a Majority
Shareholder Vote of a Fund, will become effective with respect to that Fund on
the effective date of the proposed restructuring, and will continue in effect
for a two-year period, and thereafter from year to year, subject to approval
annually in accordance with the 1940 Act. The Amended and Restated Management
Agreement of a Fund may be terminated at any time without the payment of any
penalty by the Fund's Board of Trustees or by Majority Shareholder Vote of that
Fund, or by Citibank, in each case on not more than 60 days' nor less than 30
days' written notice to the other party. The Amended and Restated Management
Agreement of a Fund will also terminate automatically in the event of its
"assignment" (as defined in the 1940 Act).
Under each Amended and Restated Management Agreement, as under each Current
Management Agreement, Citibank will not be liable for any error of judgment or
mistake of law or for any loss suffered by a Fund in connection with the matters
to which the Amended and Restated Management Agreement relates, except a loss
resulting from Citibank's willful misfeasance, or its bad faith or gross
negligence in the performance of its obligations and duties, or by reason of
Citibank's reckless disregard of its obligations and duties under such
agreement.
MANAGEMENT FEES
Under its Current Management Agreement, each Fund pays Citibank management
fees equal on an annual basis to 0.10% of the average daily net assets of that
Fund for its then current fiscal year. Fees are accrued daily and payable
monthly. Under its Amended and Restated Management Agreement, each Fund will pay
Citibank management fees equal on an annual basis to the lesser of (a) 0.40% of
the Fund's average daily net assets for the Fund's then-current fiscal year or
(b) the difference between 0.75% of the Fund's average daily net assets for the
Fund's then-current fiscal year (which is the aggregate management fee currently
payable) and the aggregate management fees allocated to the Fund for the Fund's
then-current fiscal year from the portfolios in which it invests and for which
Citibank is the manager.
Net management fees accrued to Citibank under the Current Management
Agreements for the initial fiscal year of each Fund (commencement of operations
to December 31, 1996) were as follows: CitiSelect-SM- Folio 200: $31,604, all of
which was waived; CitiSelect-SM- Folio 300: $61,408, all of which was waived;
CitiSelect-SM- Folio 400: $78,821, none of which was waived; and, CitiSelect-SM-
Folio 500: $16,855, all of which was waived. Had the proposed management fees
been in effect for that period, the following fees would have been payable:
CitiSelect-SM- Folio 200: $72,689; CitiSelect-SM- Folio 300: $98,252;
CitiSelect-SM- Folio 400: $78,821; and CitiSelect-SM- Folio 500: $8,427.
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<PAGE>
The total management fees payable to Citibank by the New Portfolios could be
higher than the management fees payable to Citibank by the Old Portfolios.
However, because of the new formulation of the Funds' management fees, the
contractual level of management fees payable by Fund shareholders (including
their share of the New Portfolios' management fees) will not increase by virtue
of the restructuring. The Funds' total expense ratios (including their shares of
the New Portfolios' expenses) also will not increase as a result of the
restructuring. See "General Background" for a table showing the Funds' estimated
annual operating expenses, both before and after the proposed restructuring.
Net management fees accrued to Citibank for services provided pursuant to the
Management Agreement of each Old Portfolio for the initial fiscal year of each
Old Portfolio (commencement of operations to December 31, 1996) were as follows:
Asset Allocation Portfolio 200: $197,989, all of which was waived; Asset
Allocation Portfolio 300: $385,745, all of which was waived; Asset Allocation
Portfolio 400: $495,484, of which $361,792 was waived; and, Asset Allocation
Portfolio 500: $103,638, all of which was waived.
Except as set forth above with respect to management fees and under the
caption "Other Services Provided by Citibank" below, neither Citibank nor any
affiliated person of Citibank, nor any affiliated person of such person,
received any other fees from the Funds or the Old Portfolios for services
provided to any of the Funds or the Old Portfolios during their initial fiscal
years (commencement of operations to December 31, 1996). Except as described
below, there were no other material payments by the Funds or the Old Portfolios
to Citibank, any affiliated person of Citibank, or any affiliated person of such
person, during such period.
As of June 30, 1997, CitiSelect-SM- Folio 200 had net assets of $131,143,004;
CitiSelect-SM- Folio 300 had net assets of $276,276,405; CitiSelect-SM- Folio
400 had net assets of $378,707,307; and CitiSelect-SM- Folio 500 had net assets
of $155,202,018.
For the initial fiscal year of each Fund (commencement of operations to
December 31, 1996), brokerage commissions totaling $32,881 were paid by the Old
Portfolios to Morgan Stanley & Co. Incorporated ("Morgan Stanley") and certain
broker-dealers affiliated with Morgan Stanley. This amount represents 3.4% of
aggregate commissions paid by the Old Portfolios during that period. Morgan
Stanley is an affiliate of Miller Anderson & Sherrerd, LLP, which is a
subadviser to the Old Portfolios. For the same period, brokerage commissions
totaling $25,888 were paid by the Old Portfolios to Merrill Lynch & Co., Inc.
("Merrill Lynch") and certain broker-dealers affiliated with Merrill Lynch. This
amount represents 2.7% of aggregate commissions paid by the Old Portfolios
during that period. Merrill Lynch is an affiliate of Hotchkis and Wiley, which
also is a subadviser to the Old Portfolios. No other commissions were paid by
the Funds or the Old Portfolios to any broker during the same
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<PAGE>
period that (i) is an affiliated person of the Old Portfolios, or (ii) is
affiliated with any person described in clause (i) of this paragraph, or (iii)
an affiliated person of which is an affiliated person of the Old Portfolios,
Citibank or the distributor of the Old Portfolios. During the initial fiscal
year of each Fund, Hotchkis and Wiley, on behalf of the Old Portfolios, effected
foreign currency transactions with Citibank in the aggregate amount of
$48,509,911.43.
DESCRIPTION OF THE MANAGER
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 $81 billion in assets worldwide. Citibank is a wholly-owned subsidiary
of Citicorp. Citibank's address is 153 East 53rd Street, New York, New York
10043.
Lawrence P. Keblusek, U.S. Chief Investment Officer of Citibank, has been the
overall portfolio manager of the Old Portfolios since their inception and is
responsible for determining asset allocations, supervising and monitoring the
performance of Citibank personnel responsible for the asset classes, and
supervising and monitoring the performance of the subadvisers. Mr. Keblusek has
been responsible for the daily management of large capitalization growth
securities since the Old Portfolios' inception. Prior to joining Citibank in
1995, Mr. Keblusek, who has 25 years experience in the investment management
industry, was Senior Vice President and Director of Portfolio Management for The
Northern Trust Company with responsibility for investment performance in the
organization's High Net Worth, Corporate and Institutional and Mutual Fund
Group. Earlier in his career, Mr. Keblusek held senior investment positions with
Maryland National Bank and the National Bank of Washington.
John S. Reed is the Chairman of the Board and a Director of Citibank. 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
Alain J.P. Belda, President and Chief Operating Officer, Alcoa Corporation; D.
Wayne Calloway, former Chairman and Chief Executive Officer, PepsiCo, Inc.,
Purchase, New York; Kenneth T. Derr, Chairman and Chief Executive Officer,
Chevron Corporation; John M. Deutch, Director, CMS Energy; Reuben Mark, Chairman
and Chief Executive Officer, Colgate-Palmolive Company; Richard D. Parsons,
Member, Board of Representatives, Time Warner Entertainment Company, L.P.;
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;
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<PAGE>
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:
<TABLE>
<S> <C>
D. Wayne Calloway Director, Exxon Corporation
Director, General Electric Company
Director, PepsiCo, Inc.
Paul J. Collins Director, Kimberly-Clark Corporation
Kenneth T. Derr Director, American Telephone and Telegraph, Co.
Director, Chevron Corporation
Director, Potlatch Corporation
John M. Deutch Director, Ariad Pharmaceuticals, Inc.
Director, CMS Energy
Director, Palomar Medical Technologies, Inc.
Reuben Mark Director, Colgate-Palmolive Company
Director, New York Stock Exchange
Director, Time Warner, Inc.
Non-Executive Director, Pearson, PLC
Richard D. Parsons Director, Federal National Mortgage Association
Director, Philip Morris Companies Incorporated
Member, Board of Representatives, Time Warner
Entertainment Company, L.P.
Director and President, Time Warner, Inc.
John S. Reed Director, Monsanto Company
Director, Philip Morris Companies Incorporated
Stockholder, Tampa Tank & Welding, Inc.
William R. Rhodes Director, Private Export Funding Corporation
Rozanne L. Ridgway Director, 3M
Director, Bell Atlantic Corporation
Director, The 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
</TABLE>
18
<PAGE>
<TABLE>
<S> <C>
H. Onno Ruding Member, Board of Supervisory Directors, Amsterdam
Trustee's Kantoor
Board Member, Corning Incorporated
Advisor, Intercena (C&A) (Netherlands)
Director, Pechiney S.A.
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, The Boeing Company
Director, Boise Cascade Corp.
Director, Chevron Corporation
Franklin A. Thomas Director, Aluminum Company of America
Director, Cummins Engine Company, Inc.
Director, Lucent Technologies
Director, PepsiCo, Inc.
Edgar S. Woolard,
Jr. Director, E.I. DuPont de Nemours & Company
Director, Apple Computer, Inc.
Director, Zurich Holding Company of America, Inc.
Advisory Director, Zurich Insurance Corporation
</TABLE>
BANKING RELATIONSHIPS. Citibank and its affiliates may have deposit, loan and
other relationships with the issuers of securities purchased on behalf of the
Funds, 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 Funds 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 Funds. Citibank believes that its services
under the Management Agreements and the activities performed by it or its
affiliates as Service Agents (see "Other Services Provided by Citibank" below)
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, shareholder
servicing and administrative activities by banks. State laws on this
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<PAGE>
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. If Citibank or its affiliates were to be prevented from
acting as the investment manager or a Service Agent, the Funds would seek
alternative means for obtaining these services. The Funds do not expect that
shareholders would suffer any adverse financial consequences as a result of any
such occurrence.
Citibank furnishes at its own expense all services, facilities and personnel
necessary in connection with managing the Funds' investments and effecting
securities transactions for the Funds. Citibank also provides other services to
each of the Funds. See "Other Services Provided by Citibank" below.
Citibank also serves as adviser or subadviser to other registered investment
companies with similar investment objectives. Those companies are identified in
EXHIBIT C hereto, along with their asset size and the rates of compensation paid
by those companies to Citibank for advisory or subadvisory services.
OTHER SERVICES PROVIDED BY CITIBANK
CITIBANK AND AFFILIATES AS SERVICE AGENTS. Under a Service Plan which has
been adopted in accordance with Rule 12b-1 under the 1940 Act, the Funds may pay
monthly fees at an annual rate not to exceed 0.50% of the average daily net
assets of each Fund. These fees may be used to make payments for various
marketing and promotional activities in respect of the sale of shares of the
Funds, including, among other things, payments to (i) the Funds' distributor for
distribution services and (ii) securities dealers and other industry
professionals ("Service Agents") as compensation for the sale of shares of the
Funds. The Funds may also make payments to the distributor, Service Agents and
others for providing personal services or the maintenance of shareholder
accounts. The Funds' distributor may also enter into agreements with Service
Agents and may pay compensation to such Service Agents for accounts for which
the Service Agents are holders of record. During the period it is in effect, the
Service Plan obligates the Funds to pay fees to the Service Agents and others as
compensation for their services, and not as reimbursement for specific expenses
incurred.
Net fees accrued to Citibank and its affiliates for services provided as
Service Agent of each Fund for the initial fiscal year of each Fund were as
follows: CitiSelect-SM- Folio 200: $158,021; CitiSelect-SM- Folio 300: $307,039;
CitiSelect-SM- Folio 400: $394,103; CitiSelect-SM- Folio 500: $83,802.
20
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THE EVALUATION BY THE BOARD OF TRUSTEES
The Funds' Board of Trustees has determined that, by approving the Amended and
Restated Management Agreements, the Funds can best assure themselves that
investment management services, including asset allocation services, now being
provided by Citibank to the Old Portfolios will continue to be provided without
interruption after the proposed restructuring.
At a meeting on May 9, 1997, the Trustees considered information with respect
to whether the amendments to the Current Management Agreements proposed in
connection with the restructuring were in the best interests of each Fund and
its shareholders. The Trustees considered, among other factors, representations
by Citibank that the proposed restructuring would not materially affect the
nature, level and quality of services now provided to the Old Portfolios and
proposed to be provided to the Funds after the proposed restructuring. The
Trustees also considered that, subject to the required approval of shareholders
of the Funds, the same personnel at Citibank who provide management services to
the Funds are expected to continue to do so under the Amended and Restated
Management Agreements, and that the contractual level of management fees payable
by Fund shareholders (including their share of the New Portfolios' management
fees) would not increase as a result of the restructuring. The Trustees also
considered the nature and quality of services expected to be provided by
Citibank to the Funds, and information regarding fees, expense ratios and
performance. In evaluating Citibank's ability to provide services to the Funds,
the Trustees considered information as to Citibank's business organization,
financial resources and personnel.
Based upon its review, the Trustees concluded that the Amended and Restated
Management Agreements are reasonable, fair and in the best interests of each
Fund and its shareholders, and that the fees provided in the Amended and
Restated Management Agreements are fair and reasonable in light of the usual and
customary charges made by others for services of the same nature and quality.
Accordingly, after consideration of the above factors, and such other factors
and information as were deemed relevant, the Trustees, including all of the
Independent Trustees, unanimously approved the Amended and Restated Management
Agreements for the Funds and voted to recommend their approval by Fund
shareholders.
VOTE REQUIRED
Approval of the Amended and Restated Management Agreement with respect to a
Fund will require a Majority Shareholder Vote of that Fund.
THE BOARD OF TRUSTEES OF THE FUNDS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF EACH FUND VOTE FOR APPROVAL OF THE AMENDED AND RESTATED
MANAGEMENT AGREEMENT OF THE FUND.
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<PAGE>
ITEM 4. TO VOTE ON AUTHORIZING THE TRUSTEES TO SELECT AND CHANGE INVESTMENT
SUBADVISERS AND ENTER INTO INVESTMENT SUBADVISORY AGREEMENTS WITHOUT
OBTAINING THE APPROVAL OF SHAREHOLDERS.
As discussed above, Citibank employs subadvisers to perform the daily
management of a particular asset class. See "General Background" above. Citibank
monitors and supervise the activities of the subadvisers, and may terminate the
services of any subadviser at any time. Citibank may assume the management of a
terminated subadviser's asset class at any time without Fund shareholder
approval; however, retaining the services of a new subadviser currently requires
Fund shareholder approval.
The 1940 Act requires that all contracts pursuant to which persons serve as
investment advisers to investment companies be approved by shareholders. This
requirement would apply to the appointment of a new or replacement subadviser to
any Fund. This requirement also would apply to the appointment of a new or
replacement subadviser to any New Portfolio following the organization of that
New Portfolio. Absent exemptive relief from the Securities and Exchange
Commission, investors in a New Portfolio (I.E., Funds) would be asked to approve
the advisory contract for the new subadviser. The Funds would then seek approval
of the contract from their shareholders. The Securities and Exchange Commission
has previously granted conditional exemptions from these shareholder vote
requirements. The Funds and the New Portfolios may apply for such an exemption,
and if it is granted and this proposed Item 4 is approved, the Board of Trustees
would be able, without further shareholder approval, to appoint additional or
replacement subadvisers. The Trustees would not, however, be able to replace
Citibank as investment manager without complying with the 1940 Act and
applicable regulations governing shareholder approval of advisory contracts.
This Item 4 is intended to facilitate the efficient supervision and management
of the subadvisers by Citibank and the Trustees. Citibank continuously monitors
the performance of the subadvisers and may from time to time recommend that the
Board of Trustees replace one or more subadvisers or appoint additional
subadvisers, depending on Citibank's assessment of what combination of
subadvisers it believes will optimize each Fund's chances of achieving its
investment objective. Citibank has no current plans to recommend the replacement
of an existing subadviser, which would presently require shareholder approval.
However, if the Securities and Exchange Commission were to grant the exemptive
relief and shareholders were to approve this proposed Item 4, the Trustees would
no longer be required to call a Fund shareholder meeting each time a new
subadviser is appointed.
Shareholder meetings entail substantial costs which could diminish the
benefits of the current subadvisory arrangements. These costs must be weighed
against the benefits of shareholder scrutiny of proposed contracts with
additional or replacement subadvisers. However, even in the absence of
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<PAGE>
shareholder approval, any proposal to add or replace subadvisers would receive
careful review. First, Citibank would assess a Fund's needs and, if it believed
additional or replacement subadvisers could benefit the Fund, would search for
available investment subadvisers. Second, any recommendations made by Citibank
would have to be approved by a majority of the Trustees, including a majority of
the Trustees who are not "interested persons" within the meaning of the 1940
Act. In selecting any new or replacement subadvisers, the Trustees are required
to determine that an investment management agreement with the subadviser is
reasonable, fair and in the best interests of a fund and its shareholders, and
that the fees provided in the agreement are fair and reasonable in light of the
usual and customary charges made by others for services of the same nature and
quality. Finally, any further appointments of additional or replacement
subadvisers would have to comply with any conditions contained in the Securities
and Exchange Commission exemptive order, if such order is granted.
The Trustees believe that the proposed authority to select and change
investment subadvisers and enter into investment subadvisory agreements without
obtaining the approval of shareholders is in the best interests of the
shareholders of each Fund.
VOTE REQUIRED
Approval of this proposal with respect to a Fund will require a Majority
Shareholder Vote of the shareholders of that Fund.
THE BOARD OF TRUSTEES OF THE FUNDS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF EACH FUND VOTE FOR AUTHORIZING THE TRUSTEES TO SELECT AND CHANGE
INVESTMENT SUBADVISERS AND ENTER INTO INVESTMENT SUBADVISORY AGREEMENTS WITHOUT
OBTAINING THE APPROVAL OF SHAREHOLDERS.
ITEM 5. TO VOTE ON AN AMENDMENT TO THE FUNDAMENTAL INVESTMENT POLICIES OF EACH
FUND CONCERNING THAT FUND'S ABILITY TO MAKE LOANS TO OTHER PERSONS AND
TO BUY OR SELL FUTURES CONTRACTS AND OPTIONS ON FUTURES.
As noted above in Item 2, each Fund has adopted certain fundamental investment
restrictions which, as a matter of law, cannot be changed without shareholder
approval. One of these fundamental investment restrictions concerns each Fund's
ability to make loans to other persons. The Funds are proposing a technical
amendment to this restriction to clarify that the purchase of fixed time
deposits would not be a violation of this restriction.
Certain other of the Funds' fundamental investment restrictions could be
construed to limit the Funds' ability to buy or sell futures contracts and
options on futures. The Funds are proposing technical amendments to these
restrictions to clarify this point. The proposed amendments will clarify that
23
<PAGE>
the Funds' ability to buy or sell futures contracts and options on futures is
consistent with that described in the Funds' prospectus. The Funds' prospectus
disclosure on futures and options on futures has not changed materially since
the Funds' inception.
The Funds are proposing to delete language concerning collateral arrangements
with respect to futures contracts and options on futures from their fundamental
investment restriction concerning the issuance of senior securities. The Funds
believe that this language is not required as a matter of law, and adds nothing
to the investment restriction which does not already appear therein. Even though
the language will be deleted from the investment restrictions, the Funds will
continue to provide collateral with respect to options, futures contracts and
options on futures contracts to the extent required by applicable rules and
regulations.
To give effect to these technical amendments, it is proposed that each of the
fundamental investment restrictions listed in EXHIBIT D be amended as indicated
in that Exhibit. Shareholders should note that EXHIBIT D assumes that Item 2 has
been approved.
The Trustees believe that these proposed amendments to the fundamental
investment policies are in the best interests of the shareholders of each Fund.
VOTE REQUIRED
Because the investment restrictions in EXHIBIT D are fundamental policies of
each Fund, approval of this proposal with respect to a Fund will require a
Majority Shareholder Vote of the shareholders of that Fund.
THE BOARD OF TRUSTEES OF THE FUNDS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF EACH FUND VOTE FOR APPROVAL OF THE PROPOSED AMENDMENT TO THE
FUNDS' FUNDAMENTAL INVESTMENT POLICIES CONCERNING THE FUNDS' ABILITY TO MAKE
LOANS TO OTHER PERSONS AND TO BUY OR SELL FUTURES CONTRACTS AND OPTIONS ON
FUTURES.
ITEM 6. TO VOTE ON THE SELECTION OF PRICE WATERHOUSE LLP AS THE INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS FOR EACH FUND.
It is intended that proxies cast by each Fund's shareholders not limited to
the contrary will be voted in favor of ratifying the selection, by a majority of
the Trustees of the Funds who are not "interested persons" (as that term is
defined in the 1940 Act) of the Funds, of Price Waterhouse LLP under Section
32(a) of the 1940 Act as independent public accountants, to certify every
financial statement of each Fund required by any law or regulation to be
certified by independent public accountants and filed with the Securities and
Exchange Commission in respect of all or any part of the fiscal year of the Fund
ending December 31, 1997 (or, subject to obtaining favorable rulings from the
Internal Revenue Service, such earlier date as coincides with the
24
<PAGE>
restructuring described under "General Background"). Price Waterhouse LLP has no
direct or material indirect interest in any Fund.
Price Waterhouse LLP has served as the Funds' independent certified public
accountants since their commencement of operations, providing audit services and
consultation with respect to the preparation of filings with the Securities and
Exchange Commission.
Price Waterhouse, an affiliate of Price Waterhouse LLP, has served as the Old
Portfolios' independent certified public accountants since their commencement of
operations. At the meeting of the Old Portfolios' investors to vote on the
matters described under Items 1 and 2, investors in the Old Portfolios also will
be asked to approve Price Waterhouse as the Old Portfolios' independent
certified public accountants. By voting in favor of this Item, Fund shareholders
will be authorizing the Funds' Trustees to vote in favor of Price Waterhouse as
the Old Portfolios' independent certified public accountants.
Representatives of Price Waterhouse LLP are not expected to be present at the
Meeting unless a written request is received by the Funds at least 5 days prior
to the meeting date.
VOTE REQUIRED
Approval of this proposal with respect to a Fund will require approval by the
holders of a majority of the outstanding shares of that Fund which are present
at the Meeting in person or by proxy.
THE BOARD OF TRUSTEES OF THE FUNDS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF EACH FUND VOTE FOR APPROVAL OF PRICE WATERHOUSE LLP AS
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR EACH FUND.
ITEM 7. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
SPECIAL MEETING OF SHAREHOLDERS AND ANY ADJOURNMENTS THEREOF.
The management of the Funds knows of no other business to be presented at the
Meeting. If any additional matters should be properly presented, it is intended
that the enclosed proxy (if not limited to the contrary) will be voted in
accordance with the judgment of the persons named in the enclosed form of proxy.
INTERESTS OF CERTAIN PERSONS
As of August 1, 1997, Walter E. Robb, III, a Trustee of the Funds, owned
1,919,551 shares of CitiSelect Folio 400 or .00005% of the outstanding shares of
the Folio. As of that date no other Trustee or officer of the Funds owned
beneficially or had the right to vote any outstanding shares of the Funds.
As of August 1, 1997, to the best knowledge of the Funds, no person
beneficially owned 5% or more of the outstanding shares of the Funds.
25
<PAGE>
ADDITIONAL INFORMATION
Each Fund is a series of Landmark Funds I (the "Trust"), a diversified,
open-end registered investment company organized as a Massachusetts business
trust under a Declaration of Trust dated as of April 13, 1984, as amended and
restated on August 9, 1996. The Funds were designated as separate series of the
Trust on February 9, 1996. The mailing address of the Trust is 6 St. James
Avenue, Boston, Massachusetts 02116.
Fund shareholders may have purchased their shares through banks or other
financial institutions, securities dealers or others (called Service Agents)
that have entered into service agreements with the Funds' distributor. In these
cases, the Service Agents are the shareholders of record of the Funds. At any
meeting of Fund shareholders, a Service Agent may vote any shares of which it is
the holder of record and for which it does not receive voting instructions
proportionately in accordance with the instructions it receives for all other
shares of which that Service Agent is the holder of record.
The cost of soliciting proxies in the accompanying form, which is expected to
be about $148,868, including the fees of a proxy soliciting agent, will be borne
by Citibank. In addition to solicitation by mail, proxies may be solicited by
the Board of Trustees, officers, and regular employees and agents of the Funds
without compensation therefor. Citibank may reimburse brokerage firms and others
for their expenses in forwarding proxy materials to the beneficial owners and
soliciting them to execute the proxies.
The Funds' distributor is The Landmark Funds Broker-Dealer Services, Inc., 6
St. James Avenue, Boston, MA 02116. State Street Bank and Trust Company acts as
transfer agent, dividend disbursing agent and custodian for each Fund. The
principal business address of State Street is 225 Franklin Street, Boston,
Massachusetts 02110.
SUBMISSION OF CERTAIN PROPOSALS
The Trust is a Massachusetts business trust and as such is not required to
hold annual meetings of shareholders, although special meetings may be called
for the Funds, or for the Trust as a whole, for purposes such as electing
Trustees or removing Trustees, changing fundamental policies, or approving an
advisory contract. Shareholder proposals to be presented at any subsequent
meeting of shareholders must be received by the Trust at the Trust's office
within a reasonable time before the proxy solicitation is made.
YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
Linda T. Gibson, Secretary
August 29, 1997
26
<PAGE>
EXHIBIT A
Deleted text is marked through and added text appears in ITALICS.
FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED TO BE AMENDED UNDER ITEM 2.
(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<#>, with respect to each Fund, the applicable Trust</#> THE FUND may
invest all or <#>substantially all</#> ANY PORTION of <#>the Fund's</#> ITS
assets in <#>another registered investment company having the same
investment objectives and policies and substantially the same investment
restrictions as those with respect to the Fund (a "Qualifying
Portfolio").</#> ONE OR MORE INVESTMENT COMPANIES, TO THE EXTENT NOT
PROHIBITED BY THE 1940 ACT, THE RULES AND REGULATIONS THEREUNDER, AND
EXEMPTIVE ORDERS GRANTED UNDER SUCH ACT.
(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 state, or any agency or instrumentality of the United
States or of any state or of any political subdivision of any state),
except that<#>, with respect to each Fund, the Trust</#> THE FUND may
invest all or <#>substantially all</#> ANY PORTION of <#>the Fund's</#> ITS
assets in <#>a Qualifying Portfolio.</#> ONE OR MORE INVESTMENT COMPANIES,
TO THE EXTENT NOT PROHIBITED BY THE 1940 ACT, THE RULES AND REGULATIONS
THEREUNDER, AND EXEMPTIVE ORDERS GRANTED UNDER SUCH ACT.
(6) Underwrite securities issued by other persons, except that all OR ANY
PORTION OF the assets of the Fund may be invested in <#>a Qualifying
Portfolio</#> ONE OR MORE INVESTMENT COMPANIES, TO THE EXTENT NOT
PROHIBITED BY THE 1940 ACT, THE RULES AND REGULATIONS THEREUNDER, AND
EXEMPTIVE ORDERS GRANTED UNDER SUCH ACT, and except insofar as the Fund may
technically be deemed an underwriter under the Securities Act in selling a
security.
<PAGE>
EXHIBIT B
Deleted text is marked through and added text appears in ITALICS.
AMENDED AND RESTATED MANAGEMENT AGREEMENT
LANDMARK FUNDS I
CITISELECT-SM- FOLIO [** **]
MANAGEMENT AGREEMENT, dated as of February 9, 1996, AND AMENDED AND RESTATED
AS OF , 1997, by and between Landmark Funds I, a Massachusetts trust (the
"Trust"), and Citibank, N.A., a national banking association ("Citibank" or the
"Adviser").
<*>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 AND
ANY EXEMPTIVE ORDERS 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
CitiSelect-SM- Folio [ ] (the "Fund"), and Citibank is willing</#> PURSUANT TO
THAT CERTAIN MANAGEMENT AGREEMENT DATED AS OF FEBRUARY 9, 1996 (THE "ORIGINAL
AGREEMENT") BETWEEN THE TRUST AND CITIBANK, THE TRUST ENGAGED CITIBANK TO
PROVIDE CERTAIN MANAGEMENT SERVICES FOR THE SERIES OF THE TRUST DESIGNATED AS
CITISELECT-SM- FOLIO [** **] (THE "FUND"), AND CITIBANK AGREED to provide such
<#>investment advisory and advisory administrative</#> MANAGEMENT services for
the Fund on the terms and conditions set forth therein;
WHEREAS, THE TRUST AND CITIBANK DESIRE TO AMEND AND RESTATE THE ORIGINAL
AGREEMENT AS PROVIDED HEREIN;
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 ADVISER 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 AS OF APRIL 13,
1984, AS AMENDED AND RESTATED ON AUGUST 9, 1996, 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
<PAGE>
ADVISER 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 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 ADVISER THEREOF IN WRITING, THE
ADVISER 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 ADVISER 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 ADVISER 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 ADVISER OR ITS
AFFILIATES EXERCISE INVESTMENT DISCRETION. THE ADVISER 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 ADVISER 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 ADVISER AND ITS AFFILIATES HAVE WITH RESPECT TO ACCOUNTS OVER WHICH
THEY EXERCISE INVESTMENT DISCRETION. IN MAKING PURCHASES OR SALES OF SECURITIES
OR OTHER PROPERTY FOR THE ACCOUNT OF THE FUND, THE ADVISER 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. IN PROVIDING THE SERVICES
AND ASSUMING THE OBLIGATIONS SET FORTH HEREIN, THE ADVISER MAY EMPLOY, AT ITS
OWN EXPENSE, ONE OR MORE SUBADVISERS; <*>PROVIDED</*> THAT IN EACH CASE THE
ADVISER SHALL SUPERVISE THE ACTIVITIES OF EACH SUBADVISER. ANY AGREEMENT BETWEEN
THE ADVISER AND A SUBADVISER SHALL BE SUBJECT TO THE RENEWAL, TERMINATION AND
AMENDMENT PROVISIONS APPLICABLE TO THIS AGREEMENT.
(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: (i) 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; (ii) 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, shareholder servicing agents, custodian and other independent contractors
or agents; (iii) preparing and, if applicable, filing all documents required for
compliance by the Trust with applicable laws and
2
<PAGE>
regulations, including registration statements, prospectuses and statements of
additional information, semi-annual and annual reports to shareholders, proxy
statements and tax returns; (iv) preparation of agendas and supporting documents
for and minutes of meetings of Trustees, committees of Trustees and
shareholders; and (v) 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, custodian or
shareholder servicing agent 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, shareholder servicing agent, 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 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 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
3
<PAGE>
Citibank from the assets of the Fund a management fee computed daily and paid
monthly at an annual rate equal to <#>0.10%</#> THE LESSER OF (I) 0.40% of the
Fund's average daily net assets for the Fund's then-current fiscal year OR (II)
THE DIFFERENCE BETWEEN 0.75% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR THE
FUND'S THEN-CURRENT FISCAL YEAR AND THE AGGREGATE INVESTMENT MANAGEMENT FEES
ALLOCATED TO THE FUND FOR THE FUND'S THEN-CURRENT FISCAL YEAR FROM THE
PORTFOLIOS IN WHICH IT INVESTS OF WHICH CITIBANK IS THE MANAGER. 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 beneficial interest of the Fund
except as permitted by the Declaration, and will comply with all other
provisions of the Declaration and By-Laws 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
the relations between the parties hereto thereafter and shall remain in force
until <#>February 9, 1998</#> MAY 9, 1999 on which date it will terminate unless
its continuance after <#>February 9, 1998</#> MAY 9, 1999 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.
4
<PAGE>
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.
9. Use of Name. The Trust hereby acknowledges that any and all rights in or to
the name "CitiSelect-SM-" 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 word "CitiSelect-SM-" 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 word "CitiSelect-SM-."
5
<PAGE>
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: -----------------------------
6
<PAGE>
EXHIBIT C
OTHER INVESTMENT COMPANIES WITH SIMILAR INVESTMENT OBJECTIVES TO THE FUNDS FOR
WHICH CITIBANK IS AN INVESTMENT ADVISER OR SUBADVISER
<TABLE>
<CAPTION>
ANNUAL FEE
(AS A PERCENTAGE OF ASSETS AS OF
NAME OF FUND AVERAGE NET ASSETS) DECEMBER 31, 1996
- ------------------------------------------------- ------------------- ------------------
<S> <C> <C>
Landmark Balanced Fund........................... 0.40% $ 230,382,490
Landmark Equity Fund............................. 0.50% $ 228,954,247
Landmark Small Cap Equity Fund................... 0.75%+ $ 24,311,269
Landmark International Equity Fund............... 1.00% $ 32,588,644
Landmark Emerging Asian Markets Equity Fund...... 1.00%+ $ 10,584,818
Landmark U.S. Government Income Fund............. 0.35%+ $ 26,744,380
Landmark Intermediate Income Fund................ 0.35%+ $ 43,918,612
Landmark New York Tax Free Income Fund........... 0.40%+ $ 82,182,006
Landmark National Tax Free Income Fund........... 0.40%+ $ 2,060,302
CitiSelect VIP Folio 200......................... 0.75%+ N/A*
CitiSelect VIP Folio 300......................... 0.75%+ N/A*
CitiSelect VIP Folio 400......................... 0.75%+ N/A*
CitiSelect VIP Folio 500......................... 0.75%+ N/A*
Citi Small Cap Equity VIP Fund................... 0.75%+ N/A*
</TABLE>
- ----------------------------------
* Did not commence operations until February 10, 1997.
+ Certain contractual fee amounts have been voluntarily waived by Citibank.
<PAGE>
EXHIBIT D
Deleted text is marked through and added text appears in ITALICS.
FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED TO BE AMENDED UNDER ITEM 5.
(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</#>;
OR 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 <#>a</#> 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, FIXED TIME DEPOSITS 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</#>; PROVIDED THAT, FOR PURPOSES OF THIS RESTRICTION, THE ISSUER OF
AN OPTION OR FUTURES CONTRACT SHALL NOT BE DEEMED TO BE THE ISSUER OF THE
SECURITY OR SECURITIES UNDERLYING SUCH CONTRACT; AND PROVIDED FURTHER that
the Fund may invest all or any portion of its assets in one or more
investment companies, to the extent not prohibited by the 1940 Act, the
rules and regulations thereunder, and exemptive orders granted under such
Act.
(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</#>; PROVIDED THAT, FOR PURPOSES OF THIS RESTRICTION, THE
ISSUER OF AN OPTION OR FUTURES CONTRACT SHALL NOT BE DEEMED TO BE THE
ISSUER OF THE SECURITY OR SECURITIES UNDERLYING SUCH CONTRACT; AND PROVIDED
FURTHER that the Fund may invest all or any portion of its assets in one or
more
<PAGE>
investment companies, to the extent not prohibited by the 1940 Act, the
rules and regulations thereunder, and exemptive orders granted under such
Act.
(5) Concentrate its investments in any particular industry, but if it is
deemed appropriate for the achievement of the Fund's investment
<#>objectives</#> OBJECTIVE, up to 25% of its assets, at market value at
the time of each investment, may be invested in any one industry, EXCEPT
THAT POSITIONS IN FUTURES CONTRACTS SHALL NOT BE SUBJECT TO THIS
RESTRICTION.
(6) Underwrite securities issued by other persons, except that all or any
portion of the assets of the Fund may be invested in one or more investment
companies, to the extent not prohibited by the 1940 Act, the rules and
regulations thereunder, and exemptive orders granted under such Act, and
except insofar 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 <#>(each of the Funds</#>(THE FOREGOING
SHALL NOT BE DEEMED TO PRECLUDE THE FUND FROM PURCHASING OR SELLING FUTURES
CONTRACTS OR OPTIONS THEREON, AND 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<#>, provided that collateral
arrangements with respect to options, futures contracts, and options on
futures contracts, including deposits of initial and variation margin, are
not considered to be the issuance of a senior security for purposes of this
restriction and except as appropriate to evidence a debt incurred without
violating Investment Restriction (1) above</#>.
2
<PAGE>
PROXY CARD PROXY CARD
CITISELECT-SM- FOLIO 200, CITISELECT-SM- FOLIO 300,
CITISELECT-SM- FOLIO 400 AND CITISELECT-SM- FOLIO 500
A PROXY FOR A SPECIAL MEETING
OF SHAREHOLDERS TO BE HELD OCTOBER 17, 1997
The undersigned, revoking all Proxies heretofore given, hereby appoints each
of John R. Elder, Linda T. Gibson, Christine A. Drapeau, Molly S. Mugler and
Stephanie K. Flood, or any of them, as Proxies of the undersigned with full
power of substitution, to vote on behalf of all of the undersigned all shares in
CitiSelect-SM- Folio 200, CitiSelect-SM- Folio 300, CitiSelect-SM- Folio 400 and
CitiSelect-SM- Folio 500 which the undersigned is entitled to vote at the
Special Meeting of Shareholders of the Funds to be held at Citicorp Center, 153
East 53rd Street, 14th Floor, New York, New York, on Friday, October 17, 1997 at
3 p.m., Eastern Time, and at any adjournment thereof, as fully as the
undersigned would be entitled to vote if personally present, as follows:
PROXY SOLICITED ON BEHALF OF THE FUNDS' BOARD OF TRUSTEES.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS.
1. An amendment to the Fund's Declaration of Trust to allow the assets of the
Fund to be invested in one or more investment companies to the extent not
prohibited by the 1940 Act.
I vote my shares in CitiSelect-SM- Folio 200, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 300, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 400, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 500, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
2. An amendment to the fundamental investment policies of the Fund to allow
the assets of the Fund to be invested in one or more investment companies to
the extent not prohibited by the 1940 Act.
I vote my shares in CitiSelect-SM- Folio 200, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
<PAGE>
I vote my shares in CitiSelect-SM- Folio 300, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 400, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 500, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
3. An Amended and Restated Management Agreement for the Fund with Citibank,
N.A.
I vote my shares in CitiSelect-SM- Folio 200, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 300, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 400, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 500, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
4. Authorizing the Trustees to select and change investment subadvisers and
enter into investment subadvisory agreements without obtaining the approval
of shareholders.
I vote my shares in CitiSelect-SM- Folio 200, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 300, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 400, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 500, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
5. An amendment to the fundamental investment policies of the Fund concerning
the Fund's ability to make loans to other persons and to buy or sell futures
contracts and options on futures.
I vote my shares in CitiSelect-SM- Folio 200, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 300, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
<PAGE>
I vote my shares in CitiSelect-SM- Folio 400, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 500, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
6. The selection of Price Waterhouse LLP as the independent certified
public accountants for the Fund.
I vote my shares in CitiSelect-SM- Folio 200, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 300, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 400, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
I vote my shares in CitiSelect-SM- Folio 500, if any:
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
</TABLE>
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY PROPOSALS
FOR WHICH NO CHOICE IS INDICATED.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH OTHER MATTERS
AS MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Date: ------------------------- -----------------------------------
Signature
-----------------------------------
Signature of joint owner, if any
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD
When signing as attorney, executor, administrator, trustee, guardian or as
custodian for a minor, please sign your name and give your full title as such.
If signing on behalf of a corporation, please sign the full corporate name and
your name and indicate your title. If you are a partner signing for a
partnership, please sign the partnership name and your name. Joint owners should
each sign this proxy. Please sign, date and return in the enclosed envelope.
