LANDMARK TAX FREE INCOME FUNDS, PRES14A, 1997-08-15

LANDMARK TAX FREE INCOME FUNDS
PRES14A, 1997-08-15

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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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] 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:
________________________________________________________________________
5. Total fee paid:

[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

1. Amount Previously Paid:
________________________________________________________________________

2. Form, Schedule or Registration Statement No.:
________________________________________________________________________

3. Filing Party:
________________________________________________________________________

4. Date Filed:
________________________________________________________________________

<PAGE>

BD&G Draft
8/13/97

PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION

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

6 St. James Avenue
Boston, Massachusetts 02116

August __, 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 [ ]
[a.m./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,

Philip W. Coolidge
President

<PAGE>

PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION

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

6 St. James Avenue
Boston, Massachusetts 02116
Telephone: (800) ___-____

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, [ ] Floor, New York, New York, on Friday, October
17, 1997 at [ ] [a.m./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 pursuant to Rule
12b-1 under the 1940 Act.

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

<PAGE>

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

August __, 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.

<PAGE>

PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION

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

6 St. James Avenue
Boston, Massachusetts 02116
Telephone: (800) ___-_____

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, [ ] Floor, New York, New York, on Friday, October 17, 1997 at
[ ] [a.m./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. [ ] shares of Landmark National Tax Free Income Fund and [ ]
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 upon request by calling the Funds
toll free at (800) 625-4554.

This Proxy Statement and Notice of Special Meeting with accompanying form
of proxy are being mailed by the Board of Trustees on or about August __, 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 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.

<PAGE>

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 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).

<PAGE>

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 will permit the Funds to change that
structure in the future without the expense of an additional shareholder
meeting.

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 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.

<PAGE>

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.
<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..................... .40% .75%(1) .40% .75%(1)
12b-1 Fees (2)..................... .10%(3) .25% .20%(3) .25%
Other Expenses
Administrative Services Fees...... .40% See(1) .25% See (1)
Shareholder Servicing Agent Fees.. .25% None .25% None
Other Operating Expenses.......... 7.08% [____] .22% [___]
Total Operating Expenses........... 8.23%(3) [_____%] 1.32% [____%]
</TABLE>

(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 .05% charge for print or electronic media expenses, but
for the National Fund do not reflect the .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
.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
.25%, .05%, .10%, .15% and .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 .19%, .05%, .09% and .80%, respectively.

<PAGE>

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:

One Year Three Five Ten Years
Years Years
NATIONAL FUND (1)
Current(2)....... $118 $266 $404 $714
Pro Forma........ $__ $__ $___ $___

NEW YORK FUND (1)
Current (2)...... $53 $80 $109 $193
Pro Forma........ $__ $__ $___ $___

(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
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 ____, 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, Kirby S. Warren and William
S. Woods, Jr., were previously elected by shareholders.

The following table 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

<PAGE>

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. The table also shows certain additional
information.

[table]

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, ___% of
the outstanding shares of the National Fund and ___% of the outstanding shares
of the New York Fund were held of record by Citibank, and ___% of the
outstanding shares of the National Fund and _____% 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.
<TABLE>
<CAPTION>

COMPENSATION TABLE

<S> <C> <C> <C> <C>
Aggregate Pension or Retirement Estimated Annual Total Compensation
Compensation Benefits Accrued as Benefits Upon From Fund and other
Trustee From Fund Part of Fund Expenses Retirement Landmark Funds

</TABLE>

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 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

<PAGE>

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.

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.

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

<PAGE>

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.

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.

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.

<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.

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

<PAGE>

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 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 is 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 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.

<PAGE>

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.

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

<PAGE>

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.

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

<PAGE>

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).

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 0.75% 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
administrative services agreement for the last two fiscal years of each Fund
were as follows: for the National Fund, [$_______] and [$________] for the
fiscal year ended December 31, 1996 and to the period from August 17, 1995
(commencement of operations) to December 31, 1995, respectively (of which
$15,196 and $2,585, respectively, accrued to Citibank); and for the New York
Fund, [$________] and [$_________] for the fiscal years ended December 31, 1996
and 1995, respectively (of which $566,725 and $531,202, respectively, accrued
to Citibank). Had the proposed management fees been in effect for these
periods, [the same] aggregate fees would have been payable by the National Fund
for investment advisory and administrative services for these periods, and
$642,375 and $664,003 would have been payable by the New York Fund for
investment advisory and administrative services for these periods (a __% and
___% increase from the investment advisory and administrative services fees
accrued under the existing administrative services agreement 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
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.

<PAGE>

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.

Kevin Connolly, a Vice President of Citibank, has managed the Funds since
April 1997. Mr. Connolly's responsibilities include the supervision of trading
and management for over $4.0 billion in tax-exempt securities, including all
municipal bond activities, and the management of institutional, private client
and retail accounts or funds. He directly manages $600 million in both taxable
and tax-exempt accounts for individuals and institutions. Prior to joining
Citibank in _______, Mr. Connolly spent over two years with the Chase Manhattan
Investment Management Group managing fixed income assets and over four years
with Goldman Sachs Asset Management Group.

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; Rozanne L. Ridgway, President, The
Atlantic Council of the United States; Robert B. Shapiro, President and Chief
Operating Officer, Monsanto Company; Frank A. Shrontz, Chairman and Chief
Executive Officer, The Boeing Company, Seattle, Washington; Roger B. Smith,
Former Chairman and Chief Executive Officer, General Motors Corporation;
Franklin A. Thomas, President, The Ford Foundation, New York, New York; and
Edgar S. Woolard, Jr., Chairman and Chief Executive Officer, E.I. DuPont De
Nemours & Company.

Each of the individuals named above is also a Director of Citicorp. In
addition, the following persons have the affiliations indicated:

D. Wayne Calloway Director, Exxon Corporation
Director, General Electric Company
Director, PepsiCo, Inc.

Paul J. Collins Director, Kimberly-Clark Corporation

<PAGE>

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

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

<PAGE>

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

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 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 with similar investment objectives. 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.

<PAGE>

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, $4,768 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.

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.

<PAGE>

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 PURSUANT TO RULE
12B-1 UNDER THE 1940 ACT.

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 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

<PAGE>

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

<PAGE>

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
PURSUANT TO RULE 12B-1 UNDER THE 1940 ACT.

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 audit
services and consultation with respect to the preparation of filings with the
SEC.

Representatives of Deloitte & Touche LLP are expected to be present at
the Meeting and are expected to be available to respond to appropriate
questions. Representatives of Deloitte & Touche LLP are expected to have the
opportunity to make a statement if they desire to do so.

<PAGE>

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.

INTERESTS OF CERTAIN PERSONS

As of August 1, 1997, the Trustees and officers of the Funds,
individually and as a group, owned beneficially or had the right to vote the
following outstanding shares of the Funds.

Amount of
Name and Address Beneficial Percent
of Beneficial Owner Ownership of Shares

Trustees of the Funds

[names]........................... ------- -----%

Officers of the Funds

[names]........................... ------- -----%

All Trustees and officers of
the Funds as a group........ ------- -----%

<PAGE>

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:

Amount of
Name and Address Beneficial Percent
of Beneficial Owner Ownership of Shares

Landmark National Tax Free Income Fund

[LIST SHAREHOLDERS]...................... ------- -----%

Landmark New York Tax Free Income Fund

[LIST SHAREHOLDERS]...................... ------- -----%

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 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 $[ ], 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

<PAGE>

approving an advisory contract. Shareholder proposals to be presented at any
subsequent meeting of shareholders must be received by the Trust at the Trust's
office within a reasonable time before the proxy solicitation is made.

YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY
PROMPTLY.

By Order of the Board of Trustees,

Linda T. Gibson, Secretary

August __, 1997

<PAGE>

EXHIBIT A

Deleted text is bracketed and added text appears in double brackets.

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>

EXHIBIT B

Deleted text is bracketed and added text appears in double brackets.

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 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),

<PAGE>

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].

<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 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

<PAGE>

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
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.

<PAGE>

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
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.

<PAGE>

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.

This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the "vote of a majority of the outstanding voting
securities" of the Fund, or by Citibank, in each case on not more than 60 days'
nor less than 30 days' written notice to the other party. This Agreement shall
automatically terminate in the event of its "assignment."

This Agreement may be amended only if such amendment is approved by the
"vote of a majority of the outstanding voting securities" of the Fund (except
for any such amendment as may be effected in the absence of such approval
without violating the 1940 Act).

The terms "specifically approved at least annually," "vote of a majority
of the outstanding voting securities," "assignment," "affiliated person," and
"interested persons," when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.

Each party acknowledges and agrees that all obligations of the Trust
under this Agreement are binding only with respect to the Fund; that any
liability of the Trust under this Agreement, or in connection with the
transactions contemplated herein, shall be discharged only out of the assets of
the Fund; and that no other series of the Trust shall be liable with respect to
this Agreement or in connection with the transactions contemplated herein.

The undersigned officer of the Trust has executed this Agreement not
individually, but as an officer under the Declaration and the obligations of
this Agreement are not binding upon any of the Trustees, officers or
shareholders of the Trust individually.

8. Governing Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.

9. Use of Name. The Trust hereby acknowledges that any and all rights in
or to the name "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

<PAGE>

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."

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
INCOME FUNDS CITIBANK, N.A.

By:_______________________ By:_______________________

Title:____________________ Title:____________________

<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:

<PAGE>

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.

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

<PAGE>

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.

7. Duration, Termination and Amendments of this Agreement. This Agreement
shall become effective as of the day and year first above written, shall govern

<PAGE>

the relations between the parties hereto thereafter and shall remain in force
until 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.

8. Governing Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.

<PAGE>

LANDMARK TAX FREE
INCOME FUNDS CITIBANK, N.A.

By:______________________ By:_______________________

Title:___________________ Title:____________________

<PAGE>

EXHIBIT D

OTHER INVESTMENT COMPANIES WITH SIMILAR INVESTMENT OBJECTIVES TO THE FUNDS FOR
WHICH CITIBANK IS AN INVESTMENT ADVISER OR SUBADVISER

Annual Fee (as a Percentage of Assets as of
Name of Fund Average Net Assets) [**____________**]

<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 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.

<PAGE>

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.

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

<PAGE>

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.

<PAGE>

PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION

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 [ ] and [ ], 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 Landmark National Tax Free Income Fund and Landmark New York Tax Free Income
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,
[ ] Floor, New York, New York, on Friday, October 17, 1997 at [ ] [a.m./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 marked to the contrary.

_____VOTE WITHHELD (To withhold your vote for any individual nominee
strike a line through the nominee's name in the list
above.)

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 marked to the contrary.

_____VOTE WITHHELD (To withhold your vote for any individual nominee
strike a line through the nominee's name in the list
above.)

<PAGE>

2. An amendment to the Declaration of Trust 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.

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