LANDMARK TAX FREE INCOME FUNDS, DEF 14A, 1997-09-05

LANDMARK TAX FREE INCOME FUNDS
DEF 14A, 1997-09-05

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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 TAX FREE INCOME FUNDS--LANDMARK NATIONAL TAX FREE INCOME FUND AND
LANDMARK NEW YORK TAX FREE INCOME FUND
- --------------------------------------------------------------------------------
(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:
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5. Total fee paid:
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/ / 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:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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LANDMARK NATIONAL TAX FREE INCOME FUND
LANDMARK NEW YORK TAX FREE INCOME FUND

6 St. James Avenue
Boston, Massachusetts 02116

September 3, 1997

Dear Shareholder:

The accompanying materials relate to a Special Meeting of Shareholders of
Landmark National Tax Free Income Fund and Landmark New York Tax Free Income
Fund. The Meeting will be held on Friday, October 17, 1997 at 3:00 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.

At the meeting, you will be asked to vote on proposals that would give the
Funds increased flexibility to invest in other investment companies. This would
allow the Funds to take advantage in the future of recent changes in federal law
without the expense of an additional shareholder meeting. You also will be asked
to vote on several other matters which relate, in large part, to conforming the
service arrangements and investment policies for the Funds to other open-end
funds managed by Citibank, N.A., and on the election of Trustees. All of these
proposals are described in the accompanying Notice and Proxy Statement.

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 items to be voted on, or need assistance in completing your proxy
please contact SCC at 1-800-733-8481 ext. 492.

We appreciate your participation in this important meeting. Thank you.

Sincerely,

/s/ Philip W. Coolidge

Philip W. Coolidge
President

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LANDMARK NATIONAL TAX FREE INCOME FUND
LANDMARK NEW YORK TAX FREE INCOME FUND

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 Landmark National Tax Free Income Fund
and Landmark New York Tax Free Income Fund will be held at Citicorp Center, 153
East 53rd Street, 14th Floor, New York, New York, on Friday, October 17, 1997 at
3:00 p.m., Eastern Time, for the following purposes:

ITEM 1. To elect Mark T. Finn, Diana R. Harrington, Susan B. Kerley and C.
Oscar Morong, Jr. as Trustees of the Funds.

ITEM 2. 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 3. 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 4. To vote on an amendment to the fundamental investment policies of each
Fund concerning that Fund's ability to pledge its assets to support
borrowings, purchase securities on margin, purchase and sell put and
call options, make loans to other persons, make short sales of
securities, buy or sell futures contracts and options on futures, and,
in the case of Landmark New York Tax Free Income Fund, invest in
restricted and certain other securities.

ITEM 5. To vote on a Management Agreement for each Fund with Citibank, N.A.

ITEM 6. To vote on a Service Plan for each Fund.

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ITEM 7. To vote on the selection of Deloitte & Touche LLP as the independent
certified public accountants for each Fund.

ITEM 8. To transact such other business as may properly come before the
Special Meeting of Shareholders and any adjournments thereof.

THE BOARD OF TRUSTEES OF THE FUNDS RECOMMENDS THAT YOU VOTE IN FAVOR OF EACH OF
ITEMS 1 THROUGH 7.

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

September 3, 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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LANDMARK NATIONAL TAX FREE INCOME FUND
LANDMARK NEW YORK TAX FREE INCOME FUND

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 Landmark National Tax Free Income Fund and Landmark New
York Tax Free Income Fund 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 3:00
p.m., Eastern Time. The Meeting is being held to vote on matters which will give
the Funds flexibility to invest in other investment companies 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. 168,120.179 shares of Landmark National Tax Free Income Fund and
6,828,719.079 shares of Landmark New York Tax Free Income Fund, 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 ext. 492.

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 5, 1997.

The Funds currently operate on a stand-alone basis; that is, each Fund invests
directly in investment securities. Landmark National Tax Free Income Fund has
the ability to convert to a two-tier, master/feeder structure whereby the Fund
would invest all of its investable assets in a single investment company.
Landmark New York Tax Free Income Fund does not have the ability to use the
master/feeder structure. As described below, the Funds are seeking the
flexibility to invest in more than one investment company, consistent with their
investment objectives. This change has been made possible by a recent amendment
of federal law. Although the Funds currently have no

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plans to change their investment structure, the Board believes this flexibility
will permit the Funds to take advantage in the future of these and any further
changes in federal law on investment in other investment companies without the
expense of an additional shareholder meeting. 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 approve a Service Plan pursuant to Rule
12b-1 under the federal Investment Company Act of 1940 (the "1940 Act"), to
authorize certain other amendments to the Funds' investment restrictions, to
elect Trustees of the Funds 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 other than Item 1 and Item 7, where shareholders of the
Funds will vote together as a single class. IF NO INSTRUCTIONS ARE SPECIFIED,
ALL SHARES OF EACH FUND WILL BE VOTED FOR EACH OF PROPOSED ITEMS 1 THROUGH 7. 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 7 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 7 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 7. 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

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broker "non-votes" will have the effect of a "no" vote for purposes of obtaining
the requisite approval of Items 1 through 7.

GENERAL BACKGROUND

The Funds are open-end management investment companies, or mutual funds. The
National Fund invests primarily (I.E., at least 80% of its assets under normal
circumstances) in debt securities consisting of obligations issued by state and
municipal governments and by other qualifying issuers (called Municipal
Obligations) that pay interest that is exempt from federal income taxes,
including the federal alternative minimum tax. The New York Fund invests
primarily (I.E., at least 80% of its assets under normal circumstances) in
Municipal Obligations that pay interest that is exempt from federal, New York
State and New York City personal income taxes, including the federal alternative
minimum tax. Each Fund is non-diversified, which means that it is not subject to
any statutory restrictions under the 1940 Act limiting the investment of its
assets in one or relatively few issuers (although certain diversification
requirements are imposed by the Internal Revenue Code).

The Funds currently operate on a stand-alone basis; that is, each Fund invests
directly in investment securities. The National Fund has the ability under its
investment restrictions and governing documents to convert to a two-tier,
master/feeder structure. In the master/feeder structure, the Fund would invest
all of its investable assets in a single investment company with the same
investment objective and policies as the Fund. This underlying investment
company would buy, hold and sell securities in accordance with its objective and
policies. The New York Fund does not have the ability under its investment
restrictions or its governing documents to use the master/feeder 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 (the "SEC"). Recent amendments to the 1940
Act 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. 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.

In order to take advantage of this change in law and any future changes in law
on this topic, the Funds are proposing that their Declaration of Trust and their
fundamental investment policies be amended to give them the flexibility to
invest in multiple investment companies to the extent permitted by applicable
law. ALTHOUGH THE FUNDS HAVE NO CURRENT PLAN TO CHANGE THEIR INVESTMENT
STRUCTURE, the proposed changes, as shown below, will permit the Funds to change
that structure in the future without the expense of an additional shareholder
meeting.

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DESCRIPTION OF CHART

Heading above chart: "Current Fund Structure:"

Two large boxes, each box contains the name of one fund. The boxes contain
the following names (from left to right): "Landmark National Tax Free Income
Fund" and "Landmark New York Tax Free Income Fund".

Currently, the Funds operate on a stand-alone basis; that is, it invests
directly in investment securities.

Heading above chart: "Investment in Multiple Investment Companies:"

Two large boxes. Each box contains the name of one fund. The boxes contain
the following names (from left to right): "Landmark National Tax Free Income
Fund" and "Landmark New York Tax Free Income Fund". Three small boxes are
under each of the two large boxes. An arrow connects each large box with the
three small boxes beneath it. Each of the small boxes contains the name
"Investment Company".

ALTHOUGH THE FUNDS HAVE NO CURRENT PLANS TO CHANGE THEIR INVESTMENT
STRUCTURE, the proposed changes will permit the Funds to invest their assets
in multiple investment companies to the extent permitted by applicable law.

In addition, the Funds are proposing certain amendments to their fundamental
investment policies. These amendments are intended for clarification and for
conforming the policies to those of other Landmark Funds and other mutual funds
advised by Citibank. In addition, certain of these amendments are intended to
eliminate fundamental policies that the Funds consider to be unnecessary or
unduly restrictive.

The Funds currently receive investment advisory services pursuant to
investment advisory agreements with Citibank. The Funds currently receive
administrative services under administrative services agreements with their
distributor. The distributor, in turn, subcontracts with Citibank so that
Citibank actually provides administrative services to the Funds. The Funds are
proposing to simplify these contractual arrangements. Each Fund will enter into
a management agreement with Citibank. These agreements will permit them to
obtain both investment advisory and administrative services directly from
Citibank. These agreements also will enable the Funds to invest in multiple
investment companies, if they choose to do so. The Funds' existing
administrative services agreements will then be unnecessary, and will be
terminated. THE AGGREGATE MANAGEMENT FEES PAYABLE BY SHAREHOLDERS OF

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THE NATIONAL FUND UNDER ITS PROPOSED MANAGEMENT AGREEMENT WILL BE THE SAME AS
THE AGGREGATE INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES FEES CURRENTLY
PAYABLE BY SHAREHOLDERS OF THIS FUND. THE AGGREGATE MANAGEMENT FEES PAYABLE BY
SHAREHOLDERS OF THE NEW YORK FUND UNDER ITS PROPOSED MANAGEMENT AGREEMENT WILL
BE HIGHER THAN THE AGGREGATE INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES
FEES CURRENTLY PAYABLE BY SHAREHOLDERS OF THIS FUND. AS NOTED BELOW, IF NEW
SERVICE PLANS ARE ADOPTED, THE FUNDS' CONTRACTUAL TOTAL EXPENSE RATIOS ARE NOT
EXPECTED TO INCREASE.

The Funds also are proposing to replace their existing Rule 12b-1 Distribution
Plans with Service Plans entered into pursuant to Rule 12b-1 under the 1940 Act.
The Service Plans will permit payment of distribution and service fees which are
lower than the maximum such fees currently permissible under the National Fund's
existing Distribution Plan and higher than the maximum such fees currently
permissible under the New York Fund's existing Distribution Plan. The Funds are
proposing the Service Plans in order to simplify their existing distribution and
shareholder servicing arrangements, and to conform them to those of other
open-end funds managed by Citibank.

IMPORTANTLY, THE FUNDS' CONTRACTUAL TOTAL EXPENSE RATIOS WILL NOT INCREASE AS
A RESULT OF THE CHANGES DESCRIBED ABOVE. IN FACT, THE FUNDS' TOTAL EXPENSE
RATIOS, COMPUTED BASED ON CONTRACTUAL FEE LEVELS WITHOUT VOLUNTARY WAIVERS, WILL
DECREASE. IT IS EXPECTED THAT THE SAME PERSONNEL AT CITIBANK WHO CURRENTLY
PROVIDE SERVICES TO THE FUNDS WILL CONTINUE TO DO SO AFTER GIVING EFFECT TO
THESE CHANGES, AND THE NATURE, LEVEL AND QUALITY OF SERVICES TO THE FUNDS WILL
NOT BE ADVERSELY AFFECTED.

The following table summarizes current estimated annual operating expenses for
each of the Funds, without any fee waivers or reimbursements. The following
table also summarizes PRO FORMA estimated annual operating expenses for the
Funds after giving effect to the proposals set forth in Items 5 and 6. The PRO
FORMA expenses also do not reflect any fee waivers or reimbursements.

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<TABLE>
<CAPTION>
NATIONAL FUND NEW YORK FUND
------------------------------- -------------------------------
CURRENT(4) PRO FORMA CURRENT(4) PRO FORMA
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES:
Management Fee.......................... 0.40% 0.75%(1) 0.40% 0.75%(1)
12b-1 Fees (2).......................... 0.10%(3) 0.25% 0.20%(3) 0.25%
Other Expenses
Administrative Services Fees.......... 0.40% None(1) 0.25% None(1)
Shareholder Servicing Agent Fees...... 0.25% None 0.25% None
Other Operating Expenses................ 7.08% 7.08% 0.22% 0.22%
Total Operating Expenses................ 8.23%(3) 8.08% 1.32% 1.22%
</TABLE>

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(1) A combined fee for investment advisory and administrative services.

(2) 12b-1 distribution fees are asset-based sales charges.

(3) 12b-1 fees assume a 0.05% charge for print or electronic media expenses, but
for the National Fund do not reflect the 0.25% service fee currently
permissible under the National Fund's existing Distribution Plan. If this
service fee were included, 12b-1 fees and total operating expenses would be
0.35% and 8.48%, respectively, for the National Fund.

(4) After giving effect to fee waivers and reimbursements currently in effect,
management fees, 12b-1 fees, administrative services fees, other operating
expenses and total fund operating expenses for the National Fund would be
0.25%, 0.05%, 0.10%, 0.15% and 0.80%, respectively. After giving effect to
fee waivers and reimbursements currently in effect, management fees, 12b-1
fees, administrative service fees and total fund operating expenses for the
New York Fund would be 0.19%, 0.05%, 0.09% and 0.80%, respectively.

EXAMPLE: Based on the table above and without any fee waivers or reimbursements,
a shareholder would pay the following expenses on a $1,000 investment in each
Fund, assuming a 5% annual return, that all dividends are reinvested, and
redemption at the end of each period indicated below:

<TABLE>
<CAPTION>
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
----------- ------------- ------------- -----------
<S> <C> <C> <C> <C>
NATIONAL FUND (1)
Current (2).............................. $ 118 $ 266 $ 404 $ 714
Pro Forma................................ $ 116 $ 262 $ 399 $ 706
NEW YORK FUND (1)
Current (2).............................. $ 53 $ 80 $ 109 $ 193
Pro Forma................................ $ 52 $ 77 $ 104 $ 182
</TABLE>

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(1) Assumes deduction at the time of purchase of the maximum 4.00% sales load.
Expenses are based on each Fund's fiscal year ended December 31, 1996.

(2) After giving effect to certain voluntary waivers, the amounts in the example
would be $48, $65, $83 and $135 for the National Fund and $48, $65, $83 and
$135 for the New York Fund.

The assumption of a 5% annual return in the Example is required by the
Securities and Exchange Commission for all mutual funds, and is not a prediction
of either Fund's future performance. THE EXAMPLE SHOULD NOT BE

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CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OF EITHER FUND. ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

The Funds' Trustees believe that the matters described in this section are in
the best interests of Fund shareholders. In the event that the proposals in
Items 1 through 7 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 ELECT MARK T. FINN, DIANA R. HARRINGTON, SUSAN B. KERLEY AND C.
OSCAR MORONG, JR. AS TRUSTEES OF THE FUNDS.

The Funds are proposing that each of Mark T. Finn, Diana R. Harrington, Susan
B. Kerley and C. Oscar Morong, Jr. be elected as Trustees of the Funds, to hold
office until their successors are chosen and qualified. All of these individuals
currently serve as Trustees. Mr. Finn and Mr. Morong were appointed by the Board
of Trustees in 1990, and Mss. Harrington and Kerley were appointed by the Board
in 1992. Since their appointment, these Trustees have not been elected by Fund
shareholders. The remaining Trustees, Elliott J. Berv, Philip W. Coolidge, Riley
C. Gilley, Walter E. Robb, III, E. Kirby Warren and William S. Woods, Jr., were
previously elected by shareholders.

The following information shows the Trustees and the executive officers of the
Funds and their principal occupations which, unless otherwise specified, are of
more than five years duration, although the titles held may have varied during
that period. Each Trustee and officer is also a Trustee or officer of certain
other funds for which The Landmark Funds Broker-Dealer Services, Inc., the
Funds' distributor and administrator, or an affiliate, serves as the distributor
or administrator or for which Citibank serves as investment adviser. Asterisks
indicate those Trustees and officers who are "interested persons," as defined in
the 1940 Act, of the Funds. The principal business address of those Trustees and
officers indicated by an asterisk is 6 St. James Avenue, Boston, Massachusetts
02116.

ELLIOTT J. BERV; 54 -- Chairman and Director, Catalyst, Inc. (Management
Consultants) (since June 1992); President, Chief Operating Officer and Director,
Deven International, Inc. (International Consultants) (June 1991 to June 1992);
President and Director, Elliott J. Berv & Associates (Management Consultants)
(since May 1984). His address is 15 Stornoway Drive, Cumberland Foreside, Maine.

PHILIP W. COOLIDGE*; 46 -- President of the Trust; Chairman, Chief Executive
Officer and President, Signature Financial Group, Inc. and The Landmark Funds
Broker-Dealer Services, Inc. (since December 1988).

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MARK T. FINN; 54 -- President and Director, Delta Financial, Inc. (since June
1983); Chairman of the Board and Chief Executive Officer, FX 500 Ltd. (Commodity
Trading Advisory Firm) (since April 1990); Director, Vantage Consulting Group,
Inc. (since October 1988). His address is 3500 Pacific Avenue, P.O. Box 539,
Virginia Beach, Virginia.

RILEY C. GILLEY; 71 -- Vice President and General Counsel, Corporate Property
Investors (November 1988 to December 1991); Partner, Breed, Abbott & Morgan
(Attorneys) (retired, December 1987). His address is 4041 Gulf Shore Boulevard
North, Naples, Florida.

DIANA R. HARRINGTON; 57 -- Professor, Babson College (since September 1993);
Visiting Professor, Kellogg Graduate School of Management, Northwestern
University (September 1992 to September 1993); Professor, Darden Graduate School
of Business, University of Virginia (September 1978 to September 1993); Trustee,
The Highland Family of Funds (since March 1997). Her address is 120 Goulding
Street, Holliston, Massachusetts.

SUSAN B. KERLEY; 46 -- President, Global Research Associates, Inc. (Investment
Research) (since August 1990); Manager, Rockefeller & Co. (March 1988 to July
1990); Trustee, Mainstay Institutional Funds (since December 1990). Her address
is P.O. Box 9572, New Haven, Connecticut.

C. OSCAR MORONG, JR.; 62 -- Chairman of the Board of Trustees of the Trust;
Managing Director, Morong Capital Management (since February 1993); Senior Vice
President and Investment Manager, CREF Investments, Teachers Insurance & Annuity
Association (retired, January 1993); Director, Indonesia Fund; Director, MAS
Funds. His address is 1385 Outlook Drive West, Mountainside, New Jersey.

WALTER E. ROBB, III; 71 -- President, Benchmark Consulting Group, Inc. (since
1991); Principal, Robb Associates (corporate financial advisers) (since 1978);
President, Benchmark Advisors, Inc. (Corporate Financial Advisors) (since 1989);
Trustee of certain registered investment companies in the MFS Family of Funds.
His address is 35 Farm Road, Sherborn, Massachusetts.

E. KIRBY WARREN; 63 -- Professor of Management, Graduate School of Business,
Columbia University (since 1987); Samuel Bronfman Professor of Democratic
Business Enterprise (1978 to 1987). His address is Columbia University, Graduate
School of Business, 725 Uris Hall, New York, New York.

WILLIAM S. WOODS, JR.; 77 -- Vice President-Investments, Sun Company, Inc.
(retired, April 1984). His address is 35 Colwick Road, Cherry Hill, New Jersey.

As of June 30, 1997, all Trustees and officers of the Funds, as a group, owned
less than 1% of the outstanding shares of the National Fund and less than 1% of
the outstanding shares of the New York Fund. As of the same date, 95% of the
outstanding shares of the National Fund and 17% of the

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outstanding shares of the New York Fund were held of record by Citibank N.A.,
and 5% of the outstanding shares of the National Fund and 83% of the outstanding
shares of the New York Fund were held of record by Citicorp Investment Services,
each as a shareholder servicing agent of the Funds, for the accounts of their
respective clients.

Trustees who serve on the boards of investment companies within the Landmark
family of funds are compensated for their services on a complex-wide basis. Only
those Trustees who are not affiliated with the Funds' distributor or an
affiliate receive compensation from the Landmark Funds (including the Funds).
The following table shows the compensation paid to the Trustees by the Funds and
the other Landmark Funds during the fiscal year ended December 31, 1996.

COMPENSATION TABLE

<TABLE>
<CAPTION>
AGGREGATE AGGREGATE TOTAL
COMPENSATION COMPENSATION FROM COMPENSATION
FROM THE NEW THE NATIONAL FUND FROM TRUST AND
TRUSTEE YORK FUND (1) (1) COMPLEX (2)
- -------------------------------------- --------------- ------------------- ---------------
<S> <C> <C> <C>
H.B. Alvord (3)....................... $ 2,122 $ 1,673 $ 44,000
Elliott J. Berv....................... $ 1,642 $ 1,601 $ 42,250
Philip W. Coolidge.................... $ 0 $ 0 $ 0
Mark T. Finn.......................... $ 1,631 $ 1,601 $ 43,000
Riley C. Gilley....................... $ 2,271 $ 1,610 $ 46,000
Diana R. Harrington................... $ 2,381 $ 1,682 $ 47,250
Susan B. Kerley....................... $ 2,324 $ 1,680 $ 45,250
C. Oscar Morong, Jr................... $ 2,478 $ 1,678 $ 58,875
Walter E. Robb, III................... $ 1,755 $ 1,668 $ 45,375
E. Kirby Warren....................... $ 2,206 $ 1,675 $ 47,375
William S. Wood, Jr................... $ 2,529 $ 1,685 $ 47,000
</TABLE>

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

(1) For the fiscal year ended December 31, 1996.

(2) Information relates to the fiscal year ended December 31, 1996. Messrs.
Berv, Coolidge, Finn, Gilley, Morong, Robb, Warren and Woods, and Mses.
Harrington and Kerley are Trustees of 24, 48, 26, 27, 25, 24, 25, 27, 25,
and 25 funds and portfolios, respectively, in the Landmark Family of Funds.

(3) Mr. Alvord retired as a Trustee on May 31, 1997.

The Board of Trustees met four times during the period commencing January 1,
1996 and ending December 31, 1996. The Board has created a standing Audit
Committee, currently comprised of Messrs. Robb and Woods and Ms. Kerley, none of
whom is an "interested person," as defined in the 1940 Act, of the Funds or
their administrator or distributor or of Citibank. The Audit Committee met four
times during the period commencing January 1, 1996 and ending December 31, 1996
to review the internal and external accounting procedures of the Funds and,
among other things, to consider the selection of independent certified public
accountants for the Funds, to

12
<PAGE>
approve all significant services proposed to be performed by its independent
certified public accountants and to consider the possible effect of such
services on their independence. The Board has also created a standing
Performance & Review Committee, currently comprised of Messrs. Finn and Woods
and Ms. Harrington, none of whom is an "interested person" of the Funds or their
administrator or distributor or of Citibank. The Performance & Review Committee
met four times during the period commencing January 1, 1996 and ending December
31, 1996. The Board has also created an Organization and Compensation Committee,
currently comprised of Messrs. Berv, Gilley and Warren, none of whom is an
"interested person" of the Funds or their administrator or distributor or of
Citibank. The Organization and Compensation Committee met four times during the
period commencing January 1, 1996 and ending December 31, 1996. Each Trustee
attended at least 75% of all Board and applicable committee meetings.

The Funds' Declaration of Trust provides that they will indemnify their
Trustees and officers against all liabilities and expenses incurred or paid in
connection with litigation in which they may be involved because of their
offices with the Funds, unless, with respect to liability to Fund shareholders,
it is finally adjudicated that they engaged in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
their offices, or unless with respect to any other matter it is finally
adjudicated that they did not act in good faith in the reasonable belief that
their actions were in the best interest of the Funds. In the case of settlement,
such indemnification will not be provided unless it has been determined by a
court or other body approving the settlement or other disposition, or by a
reasonable determination, based upon a review of readily available facts, by
vote of a majority of disinterested Trustees or in a written opinion of
independent counsel, that such Trustees or officers have not engaged in willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of their offices.

13
<PAGE>
VOTE REQUIRED

Election of these Trustees will require approval by the holders of a majority
of the outstanding shares of the Funds, taken together as a single class, 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 THE ELECTION OF MARK T. FINN, DIANA R.
HARRINGTON, SUSAN B. KERLEY AND C. OSCAR MORONG, JR. AS TRUSTEES OF THE FUNDS.

ITEM 2. 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, THE RULES AND
REGULATIONS THEREUNDER AND EXEMPTIVE ORDERS GRANTED UNDER SUCH 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 the National Fund, but not
the New York Fund, to invest all of its investable assets in a single investment
company that is registered under the 1940 Act. This permission appears in the
amendment to the Declaration which established and designated the National Fund
as a separate Fund. As described above, the National Fund is not currently using
the master/feeder structure. Also 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. The Funds' Board of Trustees
believes 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 the following
new section be added to the Declaration of Trust after the existing Section
3.2(b) thereof:

(c) 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 EACH SERIES OF THE TRUST, OR SELL ALL OR A PORTION OF SUCH TRUST
PROPERTY AND INVEST THE PROCEEDS OF SUCH SALES, IN ONE OR MORE INVESTMENT
COMPANIES TO THE EXTENT NOT PROHIBITED BY THE 1940 ACT AND EXEMPTIVE ORDERS
GRANTED UNDER SUCH ACT.

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<PAGE>
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.

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 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 3. 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, THE
RULES AND REGULATIONS THEREUNDER AND EXEMPTIVE ORDERS GRANTED UNDER
SUCH 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 the National Fund, but not
the New York 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, 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 4 for additional proposed changes to the
Funds' investment restrictions. The New York Fund will not be able to invest in
multiple investment companies unless the proposal in Item 4, as well as the
proposal in this Item 3, is approved as to that Fund.

The Trustees believe that these proposed amendments to the fundamental
investment policies are in the best interests of the shareholders of each Fund.

15
<PAGE>
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.

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 4. TO VOTE ON AN AMENDMENT TO THE FUNDAMENTAL INVESTMENT POLICIES OF EACH
FUND CONCERNING THE FUND'S ABILITY TO PLEDGE ITS ASSETS TO SUPPORT
BORROWINGS, PURCHASE SECURITIES ON MARGIN, PURCHASE AND SELL PUT AND
CALL OPTIONS, MAKE LOANS TO OTHER PERSONS, MAKE SHORT SALES OF
SECURITIES, BUY OR SELL FUTURES CONTRACTS AND OPTIONS ON FUTURES, AND,
IN THE CASE OF LANDMARK NEW YORK TAX FREE INCOME FUND, INVEST IN
RESTRICTED AND CERTAIN OTHER SECURITIES.

As noted above in Item 3, each Fund has adopted certain fundamental investment
restrictions which, as a matter of law, cannot be changed without shareholder
approval. Fundamental restriction (1) limits the amount of money that each Fund
may borrow to 1/3 of the current value of the Fund's net assets, including the
amount borrowed. This restriction also limits the amount of assets that the Fund
may pledge to secure these borrowings to 1/3 of such assets. The limitation on
borrowing tracks the requirements of the 1940 Act. However, the 1940 Act does
not require that mutual funds limit the amount of assets they may pledge to
secure their borrowings. The Funds wish to have the full flexibility permitted
by applicable law to pledge their assets. It is possible that the existing
restriction could prevent the Funds from obtaining credit when it is in their
shareholders' best interests to do so. As a result, the Funds propose to delete
the limitation on pledging of assets.

Fundamental restriction (2) prevents the Funds from purchasing any security on
margin. The 1940 Act prohibits mutual funds from purchasing securities on margin
except in accordance with rules and regulations promulgated by the SEC. The
Funds' investment restriction is more restrictive than the 1940 Act because it
does not permit the Funds to purchase securities on margin in accordance with
SEC rules in effect from time to time. The Funds wish to have the full
flexibility permitted by applicable law, and any future changes in law, on this
topic without the expense of an additional shareholder meeting. As a result, the
Funds are proposing to delete this restriction in its entirety.

16
<PAGE>
Fundamental restriction (3) prevents the Funds from purchasing and selling put
and call options, other than those with respect to futures contracts. This
restriction is not required by applicable law, and the Funds believe it is
unduly restrictive. The Funds wish to have the flexibility to purchase and sell
options if their investment adviser believes that utilizing this investment
technique is appropriate. Of course, the Funds' prospectus will disclose to
shareholders the Funds' ability to engage in options transactions.

Fundamental restriction (5) 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. The Funds also are proposing to delete from this restriction
the limitations that not more than 15% of the total assets of the National Fund
and not more than 10% of the total assets of the New York Fund be invested in
repurchase agreements maturing in more than seven days. Similarly, the New York
Fund is proposing that fundamental restriction (6), which prevents the Fund from
knowingly investing more than 10% of its total assets in securities (including
repurchase agreements maturing in more than seven days) which are subject to
legal or contractual restrictions on resale, be deleted in its entirety. The New
York Fund's prospectus currently permits the Fund to invest up to 10% of its net
assets in securities for which there is no readily available market. This 10%
limitation is not fundamental and may be changed by the Trustees without a vote
of shareholders.

The Staff of the SEC has taken the position that if a mutual fund holds a
material percentage (I.E., 15% of its net assets in most cases) of its assets in
illiquid securities, or securities that may not be sold or disposed of in the
ordinary course of business at the price at which the fund values the
securities, there may be a question as to the fund's ability to pay redemption
proceeds on shares redeemed within seven days of the redemption request. The
Staff also has taken the position that a fund's ability to invest in these types
of securities should be disclosed in its prospectus. The New York Fund's 10%
limitation under certain circumstances could be more restrictive than the
Staff's current position on illiquid securities. The Funds wish to have the full
flexibility permitted by applicable law and policy positions, and any future
changes in law and policy, on this topic without the expense of an additional
shareholder meeting. The Funds' prospectus discloses, and will continue to
disclose, the Funds' ability to invest in these types of securities.

The Funds are proposing technical amendments to fundamental restriction (7)
clarifying the Funds' ability to buy and sell futures contracts and options on
futures. The proposed amendments clarify that the Funds' ability to buy or sell
futures contracts and options on futures is consistent with that described in
the Funds' prospectus.

Fundamental restriction (8) prevents the New York Fund from purchasing
securities of any issuer if such purchase would cause the Fund to own more

17
<PAGE>
than 10% of the voting securities of the issuer. The Fund is a non-diversified
mutual fund, meaning that it is not subject to any statutory restrictions under
the 1940 Act limiting its investments in any one issuer (although certain
diversification requirements are imposed by the Internal Revenue Code). The Fund
believes that the 10% limitation is unduly restrictive, and is not required by
applicable law. The Fund wishes to have the full flexibility permitted by
applicable law on this topic. As a result, the Fund proposes to delete this
restriction in its entirety.

Fundamental restriction (9) prevents the Funds from making short sales of
securities. The 1940 Act prohibits mutual funds from making short sales of
securities except in accordance with rules and regulations promulgated by the
SEC. The Funds' investment restriction is more restrictive than the 1940 Act
because it does not permit the Funds to make short sales in accordance with SEC
rules in effect from time to time. The Funds wish to have the full flexibility
permitted by applicable law, and any future changes in law, on this topic
without the expense of an additional shareholder meeting. As a result, the Funds
are proposing to delete this restriction in its entirety.

The Funds are proposing to delete from fundamental restriction (11),
concerning the issuance of senior securities, language concerning collateral
arrangements with respect to futures contracts. 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 restriction, the Funds will continue to provide
collateral with respect to futures contracts to the extent required by
applicable rules and regulations.

To give effect to these amendments, it is proposed that each of the
fundamental investment restrictions listed in EXHIBIT B be amended as indicated
in that Exhibit.

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 B 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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<PAGE>
ITEM 5. TO VOTE ON A MANAGEMENT AGREEMENT FOR EACH FUND WITH CITIBANK, N.A.

The Funds are proposing to enter into management agreements with Citibank (the
"Proposed Fund Management Agreements"). Under the Proposed Fund Management
Agreements, Citibank will be responsible for the overall management of each
Fund's business affairs, and will provide investment advisory as well as
administrative services to the Funds, including the provision of general office
facilities and supervising the overall administration of each Fund. The Proposed
Fund Management Agreements will enable the Funds to invest in the future in
multiple investment companies, if they choose to do so. See "General
Background."

The Proposed Fund Management Agreements will render the Funds' existing
administrative services agreements unnecessary, and they will be terminated. The
same personnel at Citibank who currently provide administrative and investment
advisory services to the Funds are expected to continue to do so after the
Proposed Fund Management Agreements are entered into, and the nature, level and
quality of services to the Funds will not be adversely effected.

The aggregate management fees payable by shareholders of the National Fund
under its Proposed Fund Management Agreement will be the same as the aggregate
investment advisory and administrative services fees currently payable by
shareholders of this Fund. The aggregate management fees payable by shareholders
of the New York Fund under its Proposed Fund Management Agreement will be higher
than the aggregate investment advisory and administrative services fees
currently payable by shareholders of this Fund. However, assuming that Fund
shareholders approve Item 5 and adopt new Service Plans under Rule 12b-1, the
Funds' contractual total expense ratios are not expected to increase. In fact,
the Funds' total expense ratios, computed based on contractual fee levels
without voluntary waivers, will decrease.

A copy of the Proposed Fund Management Agreement for each Fund is attached
hereto as EXHIBIT C. Shareholders should refer to EXHIBIT C for the complete
terms of the Proposed Fund Management Agreement of each Fund, and the
description of the Proposed Fund Management Agreement set forth herein is
qualified in its entirety by the provisions of the Proposed Fund Management
Agreement as set forth in EXHIBIT C.

19
<PAGE>
THE PROPOSED FUND MANAGEMENT AGREEMENTS

If the Proposed Fund Management Agreement is approved by a Fund's
shareholders, Citibank will be authorized to provide investment advisory
services directly to that Fund. The terms and conditions of each Proposed Fund
Management Agreement are identical. A description of the investment management
fees payable under the Proposed Fund Management Agreements is set forth below.
See "Management Fees."

Under each Proposed Fund 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 Proposed Fund Management Agreement, Citibank also 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.

The Proposed Fund Management Agreement, if approved by a Majority Shareholder
Vote of a Fund, 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 Proposed Fund 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
Proposed Fund Management Agreement of a Fund will also terminate automatically
in the event of its "assignment" (as defined in the 1940 Act).

20
<PAGE>
Under each Proposed Fund 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 Proposed Fund 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 Proposed Fund Management Agreement, each Fund will pay Citibank
management fees equal on an annual basis 0.75% of the Fund's average daily net
assets for the Fund's then-current fiscal year. Fees will be accrued daily and
payable monthly. The aggregate investment advisory and administrative services
fees currently payable by the Funds are 0.80% of the National Fund's average
daily net assets and 0.65% of the New York Fund's average daily net assets, in
each case for the Fund's then-current fiscal year.

Shareholders of the New York Fund should note that the aggregate management
fees payable by them will increase as a result of the Fund's Proposed Fund
Management Agreement. Shareholders of both Funds should note that if Fund
shareholders approve Item 6 and adopt new Service Plans under Rule 12b-1, the
Funds' contractual total expense ratios are not expected to increase. See
"General Background" for a table showing the effect of these proposed management
agreements and service plans on the Funds' estimated annual operating expenses.

Investment advisory and administrative fees accrued under the existing
advisory and administrative services agreements for the last two fiscal years of
each Fund were as follows: for the National Fund, $15,196 and $2,585 for the
fiscal year ended December 31, 1996 and for the period from August 17, 1995
(commencement of operations) to December 31, 1995, respectively, and for the New
York Fund, $566,725 and $531,202 for the fiscal years ended December 31, 1996
and 1995, respectively. Had the proposed management fees been in effect for
these periods, $14,246 and $2,423 would have been payable by the National Fund
for investment advisory and administrative services for these periods, and
$642,375 and $612,925 would have been payable by the New York Fund for
investment advisory and administrative services for these periods (a 0.10%
increase for each of the fiscal years ended December 31, 1996 and 1995 from the
investment advisory and administrative services fees accrued under the existing
advisory and administrative services agreements for such periods).

Except as set forth above with respect to administrative services and
investment advisory 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

21
<PAGE>
for services provided to any of the Funds during their last two fiscal years.
There were no other material payments by the Funds to Citibank, any affiliated
person of Citibank, or any affiliated person of such person, during such period.

As of June 30, 1997, the National Fund had net assets of $1,752,983; and the
New York Fund had net assets of $77,738,996.

For the last two fiscal years of each Fund, no brokerage commissions were paid
by the Funds to any broker during the same period that (i) is an affiliated
person of the Funds, 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 Funds, Citibank or the distributor of the Funds.

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.

John C. Mooney, a Vice President of Citibank, has managed the Funds since June
1997. Mr. Mooney is a Senior Portfolio Manager responsible for managing
tax-exempt fixed income funds. He is also part of the team responsible for
fixed-income strategy, research and trading. Prior to joining Citibank in 1997,
Mr. Mooney served as a tax-exempt portfolio manager at SunAmerica for over three
years and also served as a tax-exempt portfolio manager at First Investors for
three years. His prior experience also includes positions at Alliance Capital
Management L.P. and The Boston Company.

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;

22
<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>

23
<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 Proposed Fund Management Agreements and the activities performed by it
or its affiliates as Shareholder Servicing 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

24
<PAGE>
activities by banks. State laws on this issue may differ from applicable federal
law, and banks and financial institutions may be required to register as dealers
pursuant to state securities laws. Changes in either federal or state statutes
or regulations, or in their interpretations, could prevent Citibank or its
affiliates from continuing to perform these services. If Citibank or its
affiliates were to be prevented from acting as the investment manager or a
Shareholder Servicing 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. Those companies are identified in EXHIBIT D 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 ITS AFFILIATES AS SHAREHOLDER SERVICING AGENTS. The Funds have
entered into separate shareholder servicing agreements with each Shareholder
Servicing Agent pursuant to which that Shareholder Servicing Agent provides
shareholder services, including answering customer inquiries, assisting in
processing purchase, exchange and redemption transactions and furnishing Fund
communications to shareholders. For these services, each Shareholder Servicing
Agent receives a fee from each Fund at an annual rate of 0.25% of the average
daily net assets of the Fund represented by shares owned by investors for whom
such Shareholder Servicing Agent maintains a servicing relationship.

Net fees accrued to Citibank and its affiliates for services provided as
Shareholder Servicing Agent of each Fund for the last two fiscal years of each
Fund were as follows: for the National Fund, $4,748 and $1,723 for the fiscal
year ended December 31, 1996 and for the period from August 17, 1995
(commencement of operations) to December 31, 1995, respectively; and for the New
York Fund, $214,125 and $221,334 for the fiscal years ended December 31, 1996
and 1995, respectively.

THE EVALUATION BY THE BOARD OF TRUSTEES

The Funds' Board of Trustees has determined that approving the Proposed Fund
Management Agreements is in the best interests of the Funds and their
shareholders.

25
<PAGE>
At a meeting on August 8, 1997, the Trustees considered information concerning
the Proposed Fund Management Agreements. The Trustees considered, among other
factors, representations by Citibank that the proposed agreements would not
materially affect the nature, level and quality of services now provided to the
Funds and proposed to be provided to the Funds. The Trustees also considered
that, subject to the required approval of shareholders of the Funds, the same
personnel at Citibank who provide investment advisory and administrative
services to the Funds were expected to continue to do so under the Proposed Fund
Management Agreements. The Trustees noted that the aggregate investment advisory
and administrative services fees payable by shareholders of the National Fund
would not increase, but that the aggregate investment advisory and
administrative services fees payable by shareholders of the New York Fund would
increase. They reviewed comparative fee data for comparable funds and found the
fees for both Funds to be in line with industry standards and with the fees of
comparable funds. 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 Proposed Fund
Management Agreements are reasonable, fair and in the best interests of each
Fund and its shareholders, and that the fees provided in the Proposed Fund
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 Proposed Fund Management
Agreements for the Funds and voted to recommend their approval by Fund
shareholders.

VOTE REQUIRED

Approval of the Proposed Fund 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 MANAGEMENT AGREEMENT OF THE
FUND.

ITEM 6. TO VOTE ON A SERVICE PLAN FOR EACH FUND.

Each Fund currently has a Distribution Plan which has been adopted in
accordance with Rule 12b-1 under the 1940 Act. The Funds are proposing to
replace these existing Distribution Plans with Service Plans, which also will be
adopted in accordance with Rule 12b-1. The Service Plans will permit

26
<PAGE>
payment of distribution and service fees which are lower than the maximum such
fees currently permissible under the National Fund's existing Distribution Plan
and higher than the maximum such fees currently permissible under the New York
Fund's existing Distribution Plan.

A copy of the proposed Service Plan for each Fund is attached hereto as
EXHIBIT E. Shareholders should refer to EXHIBIT E for the complete terms of the
proposed Service Plan for each Fund, and the description of the Service Plans
set forth herein is qualified in its entirety by the provisions of the Service
Plan as set forth in EXHIBIT E.

Each Fund's existing Distribution Plan was most recently approved by that
Fund's Board of Trustees in accordance with the 1940 Act on May 9, 1997.

COMPARISON OF EXISTING DISTRIBUTION PLANS AND PROPOSED SERVICE PLANS

The National Fund's existing Distribution Plan provides that the Fund may pay
its distributor a monthly distribution fee and a monthly service fee at annual
rates not to exceed, respectively, 0.05% and 0.25% of the Fund's average daily
net assets. However, the Fund has not entered into any agreement to pay the
service fee to the distributor. The New York Fund's existing Distribution Plan
provides that the Fund may pay its distributor a monthly distribution fee at an
annual rate not to exceed 0.15% of the Fund's average daily net assets. The
existing Distribution Plans also permit the Funds to pay the distributor an
additional fee (not to exceed 0.05% of average daily net assets) in anticipation
of or as reimbursement for print or electronic media advertising expenses
incurred in connection with the sale of Fund shares. The Funds did not pay
anything under this provision during 1996, and do not anticipate doing so during
the current fiscal year. Under the Distribution Plans, the distributor uses the
distribution fees to offset each Fund's marketing costs, such as preparation of
sales literature, advertising, and printing and distributing prospectuses and
other shareholder materials to prospective investors. In addition, the
distributor may use the distribution fees to pay costs related to distribution
activities, including employee salaries, bonuses and other overhead expenses.

The proposed Service Plans provide that the Funds may pay monthly fees in an
amount not to exceed 0.25% per annum of the Funds' average daily net assets.
Each proposed Service Plan contemplates one aggregate fee which may be used for
distribution and service matters. These fees may be used to make payments to the
distributor for distribution services, and to shareholder service agents and
others as compensation for the sale of shares of the Funds, and to make payments
for advertising, marketing or other promotional activity, and payments for
preparation, printing, and distribution of prospectuses, statements of
additional information and reports for recipients other than regulators and
existing shareholders. The Funds also may make payments to the distributor,
service agents and others for providing personal

27
<PAGE>
service or the maintenance of shareholder accounts. See "General Background" for
a table showing the effect of the proposed Service Plan on each Fund's estimated
annual operating expenses.

Under the proposed Service Plans, as under the existing Distribution Plans,
for so long as the Service Plans are in effect the Funds are obligated to pay
fees to the distributor, service agents and others as compensation for their
services, not as reimbursement for specific expenses incurred. Thus, even if
their expenses exceed the fees provided for under the Service Plan for any Fund,
the Fund will not be obligated to pay more than those fees and, if their
expenses are less than the fees paid to them, they will realize a profit. Each
Fund will pay the fees to the distributor, service agents and others until the
Service Plan or related distribution agreement is terminated or not renewed. In
that event, the distributor's or service agent's expenses in excess of fees
received or accrued through the termination date will be the distributor's or
service agent's sole responsibility and not obligations of the Fund.

Like the existing Distribution Plans, the proposed Service Plans provide that
their continuance must be specifically approved at least annually by a vote of
both a majority of the Trustees who are not "interested persons" of the Funds
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreement related to the Plan ("Qualified Trustees"). The Service
Plans and the Distribution Plans further provide that the selection and
nomination of the Qualified Trustees is committed to the discretion of the
disinterested Trustees (as defined in the 1940 Act) then in office.

The proposed Service Plans, like the existing Distribution Plans, may be
terminated with respect to a Fund at any time by a vote of a majority of the
Qualified Trustees or by a vote of a majority of the outstanding shares of the
Fund and may not be materially amended in any case without a vote of the
majority of both the Trustees and the Qualified Trustees. Under the proposed
Service Plans, as under the Distribution Plans, shareholders of a Fund must
approve any amendments to the Plan which increase materially the amount of the
Fund's permitted expenses thereunder.

Under both the proposed Service Plans and the existing Distribution Plans the
distributor is required to preserve copies of any plan, agreement or report made
pursuant to the Plan for a period of not less than six years from the date of
the Plan, and for the first two years the distributor will preserve such copies
in an easily accessible place.

For the fiscal year ended December 31, 1996 all fees under the existing
Distribution Plans were waived by the Funds' distributor.

The maximum allowable expense under the Distribution Plans is 0.35% of the
National Fund's average daily net assets and 0.20% of the New York Fund's
average daily net assets, respectively. Under the Service Plans, the

28
<PAGE>
maximum allowable expense would be 0.25% of each Fund's average daily net
assets.

THE EVALUATION BY THE BOARD OF TRUSTEES

The Funds' Board of Trustees has determined that approval of the Service Plans
is in the best interests of the Funds and their shareholders. At a meeting on
August 8, 1997, the Trustees considered, among other factors, the flexibility
provided by the Service Plans, in that they contemplate one aggregate fee which
may be used for distribution and services matters, as opposed to, for the
National Fund, two separate fees for these matters. The Trustees believe that
this structure will give the Funds flexibility in promoting sales of their
shares. The Trustees also noted that the aggregate distribution and service fees
payable by shareholders of the National Fund would decrease as a result of the
adoption of the Service Plan for that Fund. The Trustees concluded that the fees
provided in the Service Plan are fair and reasonable and in line with industry
standards. As a result of these and other factors, the Trustees believe that the
Service Plans are reasonably likely to benefit the Funds and their shareholders,
and recommend that they be approved by Fund shareholders.

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 APPROVAL OF A SERVICE PLAN FOR EACH FUND.

ITEM 7. TO VOTE ON THE SELECTION OF DELOITTE & TOUCHE 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 Deloitte & Touche 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. Deloitte & Touche LLP has no direct or material
indirect interest in any Fund.

Deloitte & Touche LLP has served as the independent certified public
accountants of each Fund since its commencement of operations, providing

29
<PAGE>
audit services and consultation with respect to the preparation of filings with
the SEC.

Representatives of Deloitte & Touche 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 the Funds, taken together as
a single class, 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 DELOITTE & TOUCHE LLP AS
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR EACH FUND.

ITEM 8. 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.

30
<PAGE>
INTERESTS OF CERTAIN PERSONS

As of August 1, 1997, no Trustees or officers of the Funds, individually or as
a group, 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, the following
persons beneficially owned 5% or more of the outstanding shares of the Funds:

<TABLE>
<CAPTION>
AMOUNT OF
BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF SHARES
- --------------------------------------------------------------- ------------- -----------
<S> <C> <C>
Landmark National Tax Free Income Fund
Andreas Enderlin
8 Taylor Road
Short Hills, NJ 07078......................................... 30,979.734 18.43%
Brenda Joy Sasson
18-15 215th Street
Bayside, NY 11360............................................. 19,740.865 11.75%
Joel E. Krischer
Sharon L. Krischer JT Ten
225 S. Linden Drive
Beverly Hills, CA 90212....................................... 9,447.262 5.62%
Neil F. Hall
Renee S. Hall JT Ten
1779 Greenbriar Ct
Yardley, PA 19067............................................. 20,479.282 12.19%

Landmark New York Tax Free Income Fund
None
</TABLE>

ADDITIONAL INFORMATION

Each Fund is a series of Landmark Tax Free Income Funds (the "Trust"), a
diversified, open-end registered investment company organized as a Massachusetts
business trust under a Declaration of Trust dated May 27, 1986, as amended.
Prior to October 21, 1993, the Trust was known as Landmark New York Tax Free
Income Fund. The National Fund and the New York Fund were designated as separate
series of the Trust on May 27, 1986 and October 21, 1993, respectively. 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 Shareholder
Servicing Agents) that have entered into shareholder servicing agreements
concerning the Funds. In these cases, the Shareholder Servicing Agents are

31
<PAGE>
the shareholders of record of the Funds. At any meeting of Fund shareholders, a
Shareholder Servicing 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
Shareholder Servicing Agent is the holder of record.

The cost of soliciting proxies in the accompanying form, which is expected to
be about $70,543 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

September 3, 1997

32
<PAGE>
- ----------------------------------------------------------------------
FOR EDGAR FILING, LANGUAGE THAT WILL BE ADDED IS PRECEDED BY A "<*>" AND
FOLLOWED BY A "</*>". LANGUAGE THAT WILL BE ELIMINATED IS PRECEDED BY A "<#>"
AND FOLLOWED BY A "</#>".
- ----------------------------------------------------------------------

EXHIBIT A

Deleted text is marked through and added text appears in ITALICS.

FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED TO BE AMENDED UNDER ITEM 3.

(4) 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 <#>Trust</#> <*>FUND</*> may
technically be deemed an underwriter under the Securities Act <#>of
1933</#> in selling a <#>portfolio</#> security. <#>for a Fund (provided,
however, that the National Fund may invest all of its assets in an
open-end management investment company with the same investment objective
and policies and substantially the same investment restrictions as the
Fund (a "Qualifying Portfolio")).</#>

(10) Concentrate <*>ITS</*> <#>the Fund's</#> investments in any particular
industry, but if it is deemed appropriate for the achievement of the
Fund's investment objective, up to 25% of <*>ITS</*> <#>the Fund's</#>
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 <#>and except that all of the assets of
the National Fund may be invested in a Qualifying Portfolio.</#>
<PAGE>
- ----------------------------------------------------------------------
FOR EDGAR FILING, LANGUAGE THAT WILL BE ADDED IS PRECEDED BY A "<*>" AND
FOLLOWED BY A "</*>". LANGUAGE THAT WILL BE ELIMINATED IS PRECEDED BY A "<#>"
AND FOLLOWED BY A "</#>".
- ----------------------------------------------------------------------

EXHIBIT B

Deleted text is marked through and added text appears in ITALICS.

FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED TO BE AMENDED UNDER ITEM 4.

(1) Borrow money or <#>pledge, mortgage or hypothecate assets of the Fund,</#>
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
<#>the Fund's</#> <*>ITS</*> net assets, including the amount borrowed
<*>OR PURCHASE ANY SECURITIES AT ANY TIME AT WHICH BORROWINGS EXCEED 5% OF
THE TOTAL ASSETS OF THE FUND, TAKEN AT MARKET VALUE</*><#>, and may
pledge, mortgage or hypothecate not more than 1/3 of such assets to secure
such borrowings</#>;. <#>(it</#> <*>IT</*> is intended that <#>money would
be borrowed</#> <*>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.<#>),
provided that collateral arrangements with respect to futures contracts,
including deposits of initial and variation margin, are not considered a
pledge of assets for purposes of this restriction.</#>

(2) <#>Purchase any security or evidence of interest therein on margin, except
that the Trust may obtain such short-term credit for the Fund as may be
necessary for the clearance of purchases and sales of securities and
except that deposits of initial and variation margin may be made for the
Fund in connection with the purchase, ownership, holding or sale of
futures contracts.</#>

<#>(</#>3<#>)</#> <#>Write, purchase or sell any put or call option or any
combination thereof, provided that this shall not prevent (i) the writing,
purchasing or selling of puts, calls or combinations thereof with respect
to U.S. Government securities or with respect to futures contracts, or
(ii) the writing, purchase, ownership, holding or sale of futures
contracts.</#>

(5) Make loans to other persons except (a) through the lending of <#>the
Fund's</#> <*>ITS</*> portfolio securities and provided that any such
loans not exceed 30% of the Fund's total assets (taken at market value),
(b) through the use of repurchase agreements <*>OR FIXED TIME DEPOSITS</*>
or the purchase of short-term obligations <#>and provided that not more
than 10% of the New York Fund's total assets, and 15% of the National
Fund's total assets, will be invested in repurchase agreements maturing in
more than seven days,</#> or (c) by purchasing <*>ALL OR</*> a portion of
an issue of debt securities of types commonly distributed privately to
financial institutions<#>, for which purposes the</#>. <*>THE</*> purchase
of short-term commercial paper or a portion of an issue of debt

<PAGE>
securities which <#>are</#> <*>IS</*> part of an issue to the public shall
not be considered the making of a loan.

<#>(6)</#> <#>With respect to the New York Fund only, knowingly invest in
securities which are subject to legal or contractual restrictions on
resale (other than repurchase agreements maturing in not more than seven
days) if, as a result thereof, more than 10% of the New York Fund's total
assets (taken at market value) would be so invested (including repurchase
agreements maturing in more than seven days).</#>

(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 <#>(except futures contracts)</#> in the ordinary course of
business <#>(the Trust</#> <*>(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 <#>for
the Fund's portfolio</#> and to sell real estate acquired as a result of
<*>THE</*> ownership of securities <*>BY THE FUND</*>).

(8) <#>With respect to the New York Fund only, purchase securities of any
issuer if such purchase at the time thereof would cause more than 10% of
the voting securities of such issuer to be held by the New York Fund.</#>

(9) <#>Make short sales of securities or maintain a short position, unless at
all times when a short position is open the Trust, on behalf of the Fund,
owns an equal amount of such securities or securities convertible into or
exchangeable, without payment of any further consideration, for securities
of the same issue as, and equal in amount to, the securities sold short,
and unless not more than 10% of the Fund's net assets (taken at market
value) is held as collateral for such sales at any one time (it is the
present intention of management to make such sales only for the purpose of
deferring realization of gain or loss for federal income tax purposes;
such sales would not be made of securities subject to outstanding
options).</#>

(11) 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 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</#>.

2
<PAGE>
EXHIBIT C

MANAGEMENT AGREEMENT
LANDMARK TAX FREE INCOME FUNDS
LANDMARK NATIONAL TAX FREE INCOME FUND

MANAGEMENT AGREEMENT, dated as of , 199 , by and between Landmark
Tax Free Income Funds, a Massachusetts business trust (the "Trust"), and
Citibank, N.A., a national banking association ("Citibank" or the "Manager").

W I T N E S S E T H:

WHEREAS, the Trust engages in business as an open-end management investment
company and is registered as such under the Investment Company Act of 1940, as
amended (collectively with the rules and regulations promulgated thereunder 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
Landmark National Tax Free Income Fund (the "Fund"), and Citibank is willing to
provide such investment advisory and administrative services for the Fund on the
terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto as herein set forth, the parties covenant and agree as follows:

1. DUTIES OF CITIBANK. (a) Citibank shall act as the Manager for the Fund and
as such shall furnish continuously an investment program and shall determine
from time to time what securities shall be purchased, sold or exchanged and what
portion of the assets of the Fund shall be held uninvested, subject always to
the restrictions of the Trust's Declaration of Trust, dated as of May 27, 1986,
and By-laws, as each may be amended from time to time (respectively, the
"Declaration" and the "By-Laws"), the provisions of the 1940 Act, and the
then-current Registration Statement of the Trust with respect to the Fund. The
Manager shall also make recommendations as to the manner in which voting rights,
rights to consent to corporate action and any other rights pertaining to the
Fund's portfolio securities shall be exercised. Should the Board of Trustees of
the Trust at any time, however, make any definite determination as to investment
policy applicable to the Fund and notify the Manager thereof in writing, the
Manager shall be bound by such determination for the period, if any, specified
in such notice or until similarly notified that such determination has been
revoked. The Manager

<PAGE>
shall take, on behalf of the Fund, all actions which it deems necessary to
implement the investment policies determined as provided above, and in
particular to place all orders for the purchase or sale of securities for the
Fund's account with the brokers or dealers selected by it, and to that end the
Manager is authorized as the agent of the Trust to give instructions to the
custodian or any subcustodian of the Fund as to deliveries of securities and
payments of cash for the account of the Fund. In connection with the selection
of such brokers or dealers and the placing of such orders, brokers or dealers
may be selected who also provide brokerage and research services (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934) to the Fund
and/or the other accounts over which the Manager or its affiliates exercise
investment discretion. The Manager is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Manager determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities
which the Manager and its affiliates have with respect to accounts over which
they exercise investment discretion. In making purchases or sales of securities
or other property for the account of the Fund, the Manager may deal with itself
or with the Trustees of the Trust or the Trust's underwriter or distributor, to
the extent such actions are permitted by the 1940 Act. In providing the services
and assuming the obligations set forth herein, the Manager may employ, at its
own expense, or may request that the Trust employ at the Fund's expense, one or
more subadvisers; PROVIDED that in each case the Manager shall supervise the
activities of each subadviser. Any agreement between the Manager and a
subadviser shall be subject to the renewal, termination and amendment provisions
applicable to this Agreement. Any agreement between the Trust on behalf of the
Fund and a subadviser may be terminated by the Manager at any time on not more
than 60 days' nor less than 30 days' written notice to the Trust and the
subadviser.

(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 "affiliated
persons" of Citibank; 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 0.75% of the Fund's average daily net assets
for the Fund's then-current fiscal year. If Citibank provides services hereunder
for less than the whole of any period specified in this Section 3, the
compensation to Citibank shall be accordingly adjusted and prorated.

4. COVENANTS OF CITIBANK. Citibank agrees that it will not deal with itself,
or with the Trustees of the Trust or the Trust's principal underwriter or
distributor, as principals in making purchases or sales of securities or other
property for the account of the Fund, except as permitted by the 1940 Act, will
not take a long or short position in shares of beneficial interest in 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 August 8, 1998, on which date it will terminate unless its continuance
after August 8, 1998 is "specifically approved at least annually" (a) by the
vote of a majority of the Trustees of the Trust who are not "interested persons"
of the Trust or of Citibank at a meeting specifically called for the purpose of
voting on such approval, and (b) by the Board of Trustees of the Trust or by
"vote of a majority of the outstanding voting securities" of the Fund.

4
<PAGE>
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 "Citi" 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
"Citi" in their names. If Citibank, or its assignee as the case may be, ceases
to serve as the adviser to 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 "Citi."

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 TAX FREE CITIBANK, N.A.
INCOME FUNDS

By: ------------------------------ By: ------------------------------

Title: ----------------------------- Title: -----------------------------

6
<PAGE>
MANAGEMENT AGREEMENT
LANDMARK TAX FREE INCOME FUNDS
LANDMARK NEW YORK TAX FREE INCOME FUND

W I T N E S S E T H:

WHEREAS, the Trust wishes to engage Citibank to provide certain investment
advisory and administrative services for the series of the Trust designated as
Landmark New York Tax Free Income Fund (the "Fund"), and Citibank is willing to
provide such investment advisory and administrative services for the Fund on the
terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto as herein set forth, the parties covenant and agree as follows:

7
<PAGE>
Fund's account with the brokers or dealers selected by it, and to that end the
Manager is authorized as the agent of the Trust to give instructions to the
custodian or any subcustodian of the Fund as to deliveries of securities and
payments of cash for the account of the Fund. In connection with the selection
of such brokers or dealers and the placing of such orders, brokers or dealers
may be selected who also provide brokerage and research services (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934) to the Fund
and/or the other accounts over which the Manager or its affiliates exercise
investment discretion. The Manager is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Manager determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities
which the Manager and its affiliates have with respect to accounts over which
they exercise investment discretion. In making purchases or sales of securities
or other property for the account of the Fund, the Manager may deal with itself
or with the Trustees of the Trust or the Trust's underwriter or distributor, to
the extent such actions are permitted by the 1940 Act. In providing the services
and assuming the obligations set forth herein, the Manager may employ, at its
own expense, or may request that the Trust employ at the Fund's expense, one or
more subadvisers; PROVIDED that in each case the Manager shall supervise the
activities of each subadviser. Any agreement between the Manager and a
subadviser shall be subject to the renewal, termination and amendment provisions
applicable to this Agreement. Any agreement between the Trust on behalf of the
Fund and a subadviser may be terminated by the Manager at any time on not more
than 60 days' nor less than 30 days' written notice to the Trust and the
subadviser.

8
<PAGE>
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.

3. COMPENSATION OF CITIBANK. For the services to be rendered and the
facilities to be provided by Citibank hereunder, the Trust shall pay to Citibank
from the assets of the Fund a management fee computed daily and paid monthly at
an annual rate equal to 0.75% of the Fund's average daily net assets for the
Fund's then-current fiscal year. If Citibank provides services

9
<PAGE>
hereunder for less than the whole of any period specified in this Section 3, the
compensation to Citibank shall be accordingly adjusted and prorated.

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."

10
<PAGE>
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).

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.

11
<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 TAX FREE CITIBANK, N.A.
INCOME FUNDS

By: ------------------------------ By: ------------------------------

Title: ----------------------------- Title: -----------------------------

12
<PAGE>
EXHIBIT D

OTHER INVESTMENT COMPANIES 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
CitiSelect Folio 200............................. 0.75%+ $ 102,775,406
CitiSelect Folio 300............................. 0.75%+ $ 195,428,322
CitiSelect Folio 400............................. 0.75%+ $ 253,555,763
CitiSelect Folio 500............................. 0.75%+ $ 85,072,307
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 E

SERVICE PLAN

SERVICE PLAN of Landmark Tax Free Income Funds, a Massachusetts business trust
(the "Trust"), with respect to shares of beneficial interest ("Shares") of its
series Landmark National Tax Free Income Fund, Landmark New York Tax Free Income
Fund, and any other series of the Trust adopting this plan (the "Series").

WHEREAS, the Trust engages in business as an open-end management investment
company and is registered as such under the Investment Company Act of 1940, as
amended (the "1940 Act");

WHEREAS, the Trust's shares of beneficial interest are divided into separate
series representing interests in separate funds of securities and other assets;

WHEREAS, the Trust intends to distribute Shares in accordance with Rule 12b-1
under the 1940 Act, and wishes to adopt this Plan as a plan of distribution
pursuant to Rule 12b-1;

WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are not
interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement relating hereto (the "Non-Interested Trustees"), having determined, in
the exercise of reasonable business judgment and in light of their fiduciary
duties under state law and under Section 36(a) and (b) of the 1940 Act, that
there is a reasonable likelihood that this Plan will benefit the Trust and the
shareholders of the Series, have approved this Plan by votes cast at a meeting
called for the purpose of voting hereon and on any agreements related hereto;

NOW, THEREFORE, the Trust hereby adopts this Plan as a plan of distribution in
accordance with Rule 12b-1 under the 1940 Act, with the terms of the Plan being
as follows:

1. DISTRIBUTION AND SERVICING ACTIVITIES. Subject to the supervision of the
Trustees of the Trust, the Trust may:

(a) engage, directly or indirectly, in any activities primarily intended to
result in the sale of Shares of the Series, which activities may include, but
are not limited to (i) payments to the Trust's Distributor for distribution
services, (ii) payments to securities dealers, financial institutions (which
may include banks) and others in respect of the sale of Shares of the Series,
(iii) payments for advertising, marketing or other promotional activity, and
(iv) payments for preparation, printing, and distribution of prospectuses and
statements of additional information and reports of the

<PAGE>
Trust for recipients other than regulators and existing shareholders of the
Trust; and

(b) make payments, directly or indirectly, to the Trust's Distributor,
securities dealers, financial institutions (which may include banks) and
others for providing personal service and/or the maintenance of shareholder
accounts.

The Trust is authorized to engage in the activities listed above either
directly or through other persons with which the Trust has entered into
agreements related to this Plan.

2. MAXIMUM EXPENDITURES. The expenditures to be made by the Trust pursuant to
this Plan shall be determined by the Trustees of the Trust, but in no event may
such expenditures exceed an amount calculated at the rate of 0.25% per annum of
the average daily net assets of each Series attributable to Shares of that
Series. Payments pursuant to this Plan may be made directly by the Trust or to
other persons with which the Trust has entered into agreements related to this
Plan. For purposes of determining the fees payable under this Plan, the value of
each Series' average daily net assets attributable to Shares shall be computed
in the manner specified in the applicable Series' then-current prospectus and
statement of additional information.

3. TRUST'S EXPENSES. The Trust shall pay all expenses of its operations,
including the following, and such expenses shall not constitute expenditures
under this Plan: organization costs of each series; compensation of Trustees;
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 Series; expenses connected with the
execution, recording and settlement of security transactions; insurance
premiums; fees and expenses of the custodian for all services to the Series,
including safekeeping of funds and securities and maintaining required books and
accounts; expenses of calculating the net asset value of the Series (including
but not limited to the fees of independent pricing services); expenses of
meetings of shareholders; expenses relating to the issuance, registration and
qualification of shares; and such non-recurring or extraordinary expenses as may
arise, including those relating to actions, suits or proceedings to which the
Trust may be a party and the legal obligation which the Trust may have to
indemnify its Trustees and officers with respect thereto.

2
<PAGE>
4. TERM AND TERMINATION. (a) This Plan shall become effective as to a Series
on , 199 , provided that the following have occurred: (i) approval by a
vote of at least a majority of the outstanding voting securities (as defined in
the 1940 Act) of Shares of the particular Series, and (ii) approval by a
majority of the Trustees of the Trust and a majority of the Non-Interested
Trustees cast in person at a meeting called for the purpose of voting on this
Plan. Unless terminated as herein provided, this Plan shall continue until
August 8, 1998, and shall continue in effect for successive periods of one year
thereafter, but only so long as each such continuance is specifically approved
by votes of a majority of both the Trustees of the Trust and the Non-Interested
Trustees, cast in person at a meeting called for the purpose of voting on such
approval.

(b) This Plan may be terminated at any time with respect to any Series by a
vote of a majority of the Non-Interested Trustees or by a vote of a majority of
the outstanding voting securities, as defined in the 1940 Act, of Shares of the
applicable Series.

5. AMENDMENTS. This Plan may not be amended to increase materially the maximum
expenditures permitted by Section 2 hereof unless such amendment is approved by
a vote of the majority of the outstanding voting securities, as defined in the
1940 Act, of Shares of the applicable Series, and no material amendment to this
Plan shall be made unless approved in the manner provided for annual renewal of
this Plan in Section 4(a) hereof.

6. SELECTION AND NOMINATION OF TRUSTEES. While this Plan is in effect, the
selection and nomination of the Non-Interested Trustees of the Trust shall be
committed to the discretion of such Non-Interested Trustees.

7. QUARTERLY REPORTS. The Treasurer of the Trust shall provide to the Trustees
of the Trust and the Trustees shall review quarterly a written report of the
amounts expended pursuant to this Plan and any related agreement and the
purposes for which such expenditures were made.

8. RECORDKEEPING. The Trust shall preserve copies of this Plan and any related
agreement and all reports made pursuant to Section 7 hereof, for a period of not
less than six years from the date of this Plan. Any such related agreement or
such reports for the first two years will be maintained in an easily accessible
place.

9. GOVERNING LAW. This Plan shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts and the provisions of the
1940 Act.

3
<PAGE>

PROXY CARD PROXY CARD

LANDMARK NATIONAL TAX FREE INCOME FUND
LANDMARK NEW YORK TAX FREE INCOME FUND

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
the above-referenced Landmark Fund 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. The nominees for election as Trustees of the Landmark National Tax Free
Income Fund

Mark T. Finn
Diana R. Harrington
Susan B. Kerley
C. Oscar Morong, Jr.

____ VOTE FOR all nominees listed above, except as indicated below.

____ VOTE WITHHELD (To withhold your vote for a specific nominee write
that nominee's name on the line below.)

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

The nominees for election as Trustees of the Landmark New York Tax Free Income
Fund

Mark T. Finn
Diana R. Harrington
Susan B. Kerley
C. Oscar Morong, Jr.

____ VOTE FOR all nominees listed above, except as indicated below.

____ VOTE WITHHELD (To withhold your vote for a specific nominee write
that nominee's name on the line below.)

--------------------------
<PAGE>

2. An amendment to the Declaration of Trust 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 Landmark National Tax Free Income Fund, if any:

____ FOR ____ AGAINST ____ ABSTAIN

I vote my shares in Landmark New York Tax Free Income Fund, if any:
____ FOR ____ AGAINST ____ ABSTAIN

3. 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 Landmark National Tax Free Income Fund, if any:

____ FOR ____ AGAINST ____ ABSTAIN

I vote my shares in Landmark New York Tax Free Income Fund, if any:

____ FOR ____ AGAINST ____ ABSTAIN

4. An amendment to the fundamental investment policies of the Fund concerning
the Fund's ability to pledge its assets to support borrowings, purchase
securities on margin, purchase and sell put and call options, make loans to
other persons, make short sales of securities, buy or sell futures
contracts and options on futures, and, in the case of Landmark New York Tax
Free Income Fund, invest in restricted and certain other securities.

I vote my shares in Landmark National Tax Free Income Fund, if any:

____ FOR ____ AGAINST ____ ABSTAIN

I vote my shares in Landmark New York Tax Free Income Fund, if any:

____ FOR ____ AGAINST ____ ABSTAIN

5. A Management Agreement for the Fund with Citibank, N.A.

I vote my shares in Landmark National Tax Free Income Fund, if any:
____ FOR ____ AGAINST ____ ABSTAIN

I vote my shares in Landmark New York Tax Free Income Fund, if any:

____ FOR ____ AGAINST ____ ABSTAIN
<PAGE>

6. A Service Plan for the Fund.

I vote my shares in Landmark National Tax Free Income Fund, if any:
____ FOR ____ AGAINST ____ ABSTAIN

I vote my shares in Landmark New York Tax Free Income Fund, if any:

____ FOR ____ AGAINST ____ ABSTAIN

7. The selection of Deloitte & Touche LLP as the independent certified public
accountants for the Fund.

I vote my shares in Landmark National Tax Free Income Fund, if any:

____ FOR ____ AGAINST ____ ABSTAIN

I vote my shares in Landmark New York Tax Free Income Fund, if any:

____ FOR ____ AGAINST ____ ABSTAIN

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(S) 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.