<PAGE>
As filed with the Securities and Exchange Commission on October 16, 1998
File Nos. 33-38848*
811-5812
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 11*
AND
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 18
CITIFUNDS PREMIUM TRUST**
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
21 MILK STREET, 5TH FLOOR, BOSTON, MASSACHUSETTS 02109
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 617-423-1679
PHILIP W. COOLIDGE, 21 MILK STREET, 5TH FLOOR, BOSTON, MASSACHUSETTS 02109
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO:
ROGER P. JOSEPH, BINGHAM DANA LLP, 150 FEDERAL STREET,
BOSTON, MASSACHUSETTS 02110
It is proposed that this filing will become effective on January 4, 1999
pursuant to paragraph (a) of Rule 485.
Cash Reserves Portfolio and U.S. Treasury Reserves Portfolio have executed
this Registration Statement.
- ------------------------------------------------------------------------------
* Pursuant to Rule 429 under the Securities Act of 1933, this Post-Effective
Amendment also serves as Post-Effective Amendment No. 10 to the Registrant's
Registration Statement under the Securities Act of 1933 at File No.
33-28844.
** Formerly known as "Landmark Premium Funds."
<PAGE>
PROSPECTUS
CITIFUNDS(SM) PREMIUM MONEY MARKET FUNDS
CITIBANK, N.A., INVESTMENT ADVISER
CITIFUNDS(SM) PREMIUM LIQUID RESERVES
CITIFUNDS(SM) PREMIUM U.S. TREASURY RESERVES
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.
January 4, 1999
<PAGE>
CITIFUNDS PREMIUM MONEY MARKET FUNDS
Each of the Funds described in this prospectus is a money market fund. Money
market funds must follow strict rules about the quality, maturity and other
features of securities they purchase. The Funds also try to maintain a share
price of $1.00 while paying income to shareholders. However, no money market
fund guarantees that you will receive your money back.
Each Fund has different goals and different investment strategies, and each
offers a different mix of investments. See page for a summary of investment
information for each Fund. For more information, see page . Of course, there
is no assurance that any Fund will achieve its investment goals.
TABLE OF CONTENTS
FUNDS AT A GLANCE .................................................... 3
CitiFunds Premium Liquid Reserves ............................ 3
CitiFunds Premium U.S. Treasury Reserves ..................... 6
YOUR CITIFUNDS ACCOUNT ............................................... 9
How to Buy Shares ............................................ 9
How the Price of Your Shares Is Calculated ................... 9
How to Sell Shares ........................................... 9
Exchanges .................................................... 9
Dividends .................................................... 9
Retirement Accounts .......................................... 10
Tax Matters .................................................. 10
MANAGEMENT OF THE FUNDS .............................................. 10
Investment Adviser ........................................... 10
Distribution Arrangements .................................... 11
Investment Structure ......................................... 11
MORE ABOUT THE FUNDS ................................................. 11
FINANCIAL HIGHLIGHTS ................................................. 14
<PAGE>
Funds at a Glance
CITIFUNDS PREMIUM LIQUID RESERVES
This summary briefly describes CitiFunds Premium Liquid Reserves and the
principal risks of investing in it. For more information, see "More About the
Funds" on page .
FUND GOAL
The Fund's goal is to provide shareholders with liquidity and as high a level
of current income as is consistent with preservation of capital. Of course,
there is no assurance that the Fund will achieve its goal.
MAIN INVESTMENT STRATEGIES
Liquid Reserves invests only in high quality, short-term money market
instruments denominated in U.S. dollars. These include:
o short-term obligations of the U.S. government and its agencies and
instrumentalities, and repurchase agreements for these obligations;
o obligations of U.S. and non-U.S. banks;
o obligations issued or guaranteed by the governments of Western Europe,
Australia, Japan and Canada; and
o commercial paper and asset backed securities.
The Fund invests at least 25%, and may invest up to 100%, of its assets in
bank obligations, such as certificates of deposit, fixed time deposits and
bankers' acceptances.
Investing in high quality, short-term instruments may result in a lower yield
(the income on your investment) than investing in lower quality or longer-term
instruments.
MAIN RISKS
The principal risks of investing in Liquid Reserves are described below. See
page for more information about risks.
o The amount of income paid to you by the Fund will go up or down depending on
day-to-day variations in short-term interest rates.
o A major change in interest rates, a default on an investment held by the
Fund or a significant decline in the value of a Fund investment could cause
the value of your investment in the Fund, or its yield, to decline.
o Non-U.S. securities are subject to additional risks, such as political,
social and economic developments abroad, different kinds and levels of
market and issuer regulations and the different characteristics of overseas
economies and markets. There may be rapid changes in the value of these
securities.
o The Fund concentrates in bank obligations. This means that your investment
in the Fund is susceptible to adverse events affecting the banking industry.
Banks are sensitive to changes in money market and general economic
conditions, as well as to decisions by regulators that can affect their
profitability.
o An investment in the Fund is not a deposit of Citibank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
o Although the Fund seeks to preserve the value of your investment at $1.00
per share, it is possible to lose money by investing in the Fund.
WHO MAY WANT TO INVEST
You should keep in mind that an investment in Liquid Reserves is not a
complete investment program and should be considered just one part of your
total investment program.
You should consider investing in Liquid Reserves if:
o You're seeking current income and a stabilized share price.
o You want to be able to convert your investment to cash quickly with reduced
risk to principal.
o You're seeking higher returns than are usually available from U.S. Treasury
money market funds.
Don't invest in Liquid Reserves if:
o You're seeking long term growth of capital or high current income and you
can tolerate daily share price fluctuation.
FUND PERFORMANCE
The following bar chart and table can help you evaluate the risks and
potential rewards of investing in the Fund. The bar chart shows the Fund's
performance over the last ten calendar years. The table compares the average
annual returns for the Fund over the last ten calendar years to the
performance of the IBC Financial 1st Tier Taxable Money Market Funds Average.
When you consider this information, please remember that the Fund's past
performance is not necessarily an indication of how it will perform in the
future. For current yield information, please call 800-625-4554 toll free, or
contact your account representative.
YEAR-BY-YEAR TOTAL RETURNS
This bar chart shows how the Fund's performance has varied from year to year
and gives an indication of the risk of investing in the Fund.
[bar chart -- for calendar quarters September 30, 1990 through September 30,
1998]
QUARTERLY RETURNS MARCH JUNE SEPTEMBER DECEMBER
- ----------------- ----- ---- --------- --------
1990 ..................... 2.00% 1.99%
1991 ..................... 1.72% 1.49% 1.43 1.29
1992 ..................... 1.04 0.94 0.84 0.74
1993 ..................... 0.71 0.74 0.77 0.75
1994 ..................... 0.78 0.95 1.11 1.25
1995 ..................... 1.41 1.48 1.44 1.42
1996 ..................... 1.31 1.27 1.29 1.31
1997 ..................... 1.28 1.34 1.36 1.36
1998 ..................... 1.33 1.33 1.35
Footnote to bar chart: As of September 30, 1998, the Fund had a year-to-date
return of %.
FUND'S HIGHEST AND LOWEST RETURNS QUARTER ENDING
--------------------------------- --------------
(FOR CALENDAR QUARTERS COVERED BY THE BAR CHART)
Highest 2.00% September 30, 1990
Lowest 0.71% March 31, 1993
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 1997)
This table shows how the Fund's average annual total returns for the periods
indicated compare with those of the IBC Financial 1st Tier Taxable Money
Market Funds Average, a broad measure of money market fund performance, and
gives another indication of the risk of investing in the Fund.
AS OF 12/31/97
-------------------------------------------------------
Avg. Annual Total Rtn 5/3/90
-------------------------------------------------------
1 YEAR 5 YEAR 10 YEAR INCEPTION
-------------------------------------------------------
FUND 5.45% 4.75% N/A 5.05%
-------------------------------------------------------
IBC 4.94% 4.27% N/A 4.53%*
-------------------------------------------------------
* 5/31/90
<PAGE>
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND
HOLD SHARES OF THE FUND.
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases ...................... None
Maximum Deferred Sales Charge (Load) .................................. None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends ........... None
Redemption Fee ........................................................ None
Exchange Fee .......................................................... None
ANNUAL FUND OPERATING EXPENSES(1) (expenses that are deducted from Fund
assets):
BEFORE WAIVER AFTER WAIVER(2)
------------- ---------------
Management Fees ............................... 0.15% 0.08%
Distribution (12b-1) Fees ..................... 0.10% 0.00%
Other Expenses (administrative, shareholder
servicing and other expenses) ............... 0.55% 0.32%
Total Annual Fund Operating Expenses .......... 0.80%(2) 0.40%
(1)This table reflects the expenses of both the Fund and Cash Reserves
Portfolio, the underlying mutual fund in which the Fund invests.
(2)Certain Fund service providers voluntarily waived fees and reimbursed
expenses of 0.40% through August 31, 1998 in order to prevent total
expenses from exceeding 0.40% of average daily net assets. These waivers
can be reduced or terminated at any time.
EXAMPLE
This example is intended to help you compare the cost of investing in the Fund
to the cost of investing in other mutual funds. The example assumes that you
invest $10,000 in the Fund for the time periods indicated and then sell all of
your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses as
shown in the table above before giving effect to any fee waivers or
reimbursements remain the same. The assumption of a 5% return is required by
the SEC for purposes of this example. It is not a prediction of the Fund's
future performance. Although your actual costs may be higher or lower, based
on these assumptions your costs would be:
CITIFUNDS PREMIUM LIQUID RESERVES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Before waiver ..................... $82 $256 $444 $990
After waiver ...................... $41 $128 $224 $505
<PAGE>
CITIFUNDS PREMIUM U.S. TREASURY RESERVES
This summary briefly describes CitiFunds Premium U.S. Treasury Reserves and
the principal risks of investing in it. For more information, see "More About
the Funds" on page .
FUND GOAL
The Fund's goal is to provide its shareholders with liquidity and as high a
level of current income from U.S. government obligations as is consistent with
the preservation of capital. Of course, there is no assurance that the Fund
will achieve its goal.
MAIN INVESTMENT STRATEGIES
U.S. Treasury Reserves invests in:
o U.S. Treasury bills, notes and bonds;
o Treasury receipts; and
o securities issued by U.S. government agencies and instrumentalities that are
backed by the full faith and credit of the U.S. government.
Unlike many other U.S. Treasury money market funds, the Fund does not enter
into repurchase agreements.
Investing in high quality, short-term instruments may result in a lower yield
(the return on your investment) than investing in lower quality or longer term
instruments.
MAIN RISKS
The principal risks of investing in U.S. Treasury Reserves are described
below. See page for more information about risks.
o The amount of income paid to you by the Fund will go up or down depending on
day-to-day variations in short-term interest rates.
o A major change in interest rates could cause the value of your investment in
the Fund to decline.
o An investment in the Fund is not a deposit of Citibank and is not insured or
guaranteed by the U.S. Government, the Federal Deposit Insurance Corporation
or any other government agency.
o Although the Fund seeks to preserve the value of your investment at $1.00
per share, it is possible to lose money by investing in the Fund.
WHO MAY WANT TO INVEST
You should keep in mind that an investment in U.S. Treasury Reserves is not a
complete investment program and should be considered just one part of your
total investment program.
You should consider investing in U.S. Treasury Reserves if:
o You're seeking current income and a stabilized share price.
o You want to be able to convert your investment to cash quickly with reduced
risk to principal.
o You want the added safety of a fund that invests only in U.S. government
securities.
Don't invest in U.S. Treasury Reserves if:
o You're seeking long-term growth of capital or high current income and you
can tolerate daily share price fluctuation.
FUND PERFORMANCE
The following bar chart and table can help you evaluate the risks and
potential rewards of investing in the Fund. The bar chart shows the Fund's
performance over the last ten calendar years. The table compares the average
annual returns for the Fund over the last ten calendar years to the
performance of the IBC Financial 100% U.S. Treasury Rated Money Market Funds
Average. When you consider this information, please remember that the Fund's
past performance is not necessarily an indication of how the Fund will perform
in the future. For current yield information, please call 800-625-4554 toll
free, or contact your account representative.
YEAR-BY-YEAR TOTAL RETURNS
This bar chart shows how the Fund's performance has varied from year to year
and gives an indication of the risk of investing in the Fund.
[bar chart -- for calendar quarters June 30, 1991 through September 30, 1998]
QUARTERLY RETURNS MARCH JUNE SEPTEMBER DECEMBER
- ----------------- ----- ---- --------- --------
1991 ...................... 1.46% 1.37% 1.20%
1991 ...................... 0.94% 0.89 0.86 0.69
1993 ...................... 0.68 0.67 0.70 0.70
1994 ...................... 0.70 0.82 0.98 1.15
1995 ...................... 1.27 1.37 1.33 1.28
1996 ...................... 1.19 1.15 1.21 1.21
1997 ...................... 1.18 1.21 1.23 1.19
1998 ...................... 1.21 1.20 1.20
Footnote to bar chart: As of September 30, 1998, the Fund had a year-to-date
return of %.
FUND'S HIGHEST AND LOWEST RETURNS QUARTER ENDING
--------------------------------- --------------
(FOR CALENDAR QUARTERS COVERED BY THE BAR CHART)
Highest 1.46% June 30, 1991
Lowest 0.67% June 30, 1993
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 1997)
This table shows how the Fund's average annual total returns for the periods
indicated compare with those of the IBC Financial 100% U.S. Treasury Rated
Money Market Funds Average, a broad measure of money market fund performance,
and gives another indication of the risk of investing in the Fund.
AS OF 12/31/97
-------------------------------------------------------
Avg. Annual Total Rtn 3/1/91
-------------------------------------------------------
1 YEAR 5 YEAR 10 YEAR INCEPTION
-------------------------------------------------------
FUND 4.90% 4.31% N/A 4.33%
-------------------------------------------------------
IBC 4.67% 4.11% N/A 4.18%*
-------------------------------------------------------
* SINCE 3/31/91
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND
HOLD SHARES OF THE FUND.
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases ...................... None
Maximum Deferred Sales Charge (Load) .................................. None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends ........... None
Redemption Fee ........................................................ None
Exchange Fee .......................................................... None
ANNUAL FUND OPERATING EXPENSES(1) (expenses that are deducted from Fund
assets):
BEFORE WAIVER AFTER WAIVER(2)
------------- ---------------
Management Fees .............................. 0.15% 0.07%
Distribution (12b-1) Fees .................... 0.10% 0.00%
Other Expenses (administrative, shareholder
servicing and other expenses) .............. 0.57% 0.38%
Total Annual Fund Operating Expenses ......... 0.82%(2) 0.45%
(1)This table reflects the expenses of both the Fund and U.S. Treasury
Reserves Portfolio, the underlying mutual fund in which the Fund invests.
(2)Certain Fund service providers voluntarily waived fees and reimbursed
expenses of 0.37% through August 31, 1998 in order to prevent total
expenses from exceeding 0.45% of average daily net assets. These waivers
can be reduced or terminated at any time.
EXAMPLE
This example is intended to help you compare the cost of investing in the Fund
to the cost of investing in other mutual funds. The example assumes that you
invest $10,000 in the Fund for the time periods indicated and then sell all of
your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses as
shown in the table above before giving effect to any fee waivers or
reimbursements remain the same. The assumption of a 5% return is required by
the SEC for purposes of this example. It is not a prediction of the Fund's
future performance. Although your actual costs may be higher or lower, based
on these assumptions your costs would be:
CITIFUNDS PREMIUM U.S. TREASURY RESERVES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Before waiver ............................ $84 $262 $455 $1,015
After waiver ............................. $46 $144 $252 $ 567
<PAGE>
YOUR CITIFUNDS ACCOUNT
HOW TO BUY SHARES
Shares of the Funds are offered continuously and purchases may be made Monday
through Friday, except on certain holidays. Shares may be purchased from the
Funds' distributor or a broker-dealer or financial institution that has an
agreement with the distributor. You must be a customer of a Shareholder
Servicing Agent to purchase shares. Shareholder Servicing Agents are financial
institutions that have entered into shareholder servicing agreements
concerning the Funds. You pay no sales charge (load) to invest in the Funds.
Each Fund and its distributor have the right to reject any purchase order or
cease offering Fund shares at any time.
Shares are purchased at net asset value (normally $1.00 per share) the next
time it is calculated after your order is received and accepted by the
distributor. NAV is the value of a single share of a Fund.
A Shareholder Servicing Agent will establish and maintain your account and is
the shareholder of record. The Agent may establish its own terms, conditions
and charges (such as minimum investments, fixed annual fees or account
maintenance fees) and may offer you a variety of services, such as automatic
purchase and redemption programs, at an additional charge. These charges, if
imposed, would reduce your net return on an investment in a Fund.
Your Agent will not transmit your purchase order for Fund shares until it
receives the purchase price in federal or other immediately available funds.
If you pay by check, the Agent transmits the order when the check clears,
usually within two business days.
The Fund's distributor may make payments for distribution and/or shareholder
servicing activities out of its past profits and other available sources. The
distributor may also make payments for marketing, promotional or related
expenses to dealers. The amount of these payments are determined by the
distributor and may vary. Citibank may make similar payments to dealers under
similar arrangements.
HOW THE PRICE OF YOUR SHARES IS CALCULATED
Every day the New York Stock Exchange is open for trading (at 3:00 p.m.
Eastern time for Liquid Reserves and 12:00 noon Eastern time for U.S. Treasury
Reserves), each Fund calculates its net asset value (NAV). On days when the
financial markets in which the Funds invest close early, NAV will be
calculated as of the close of those markets. The Funds' securities are valued
at amortized cost, which is approximately equal to market value.
HOW TO SELL SHARES
You may sell your shares on any business day without a sales charge at the NAV
(normally $1.00 per share) next determined after your redemption request has
been received by your Agent. You may contact your Agent in writing or, if your
Agent permits, by telephone. All redemption requests must be in proper form,
as determined by your Agent.
You will receive your redemption proceeds in federal funds, if the New York
Stock Exchange is open and operating without restrictions, normally on the day
on which you sell your shares but in any event within seven days. Your
redemption proceeds may also be delayed for up to ten days if the purchase was
made by check. You should be aware that you may have to pay taxes on your
redemption proceeds.
EXCHANGES
You may exchange Fund shares for those of another CitiFund or certain other
funds managed or advised by Citibank which are made available by your
Shareholder Servicing Agent. Your Agent can provide you with more information,
including a prospectus for any fund to be acquired through an exchange. If
your account application allows, you may arrange the exchange by telephone.
The exchange will be based on the relative NAVs of both funds next determined
after the order is accepted by the Funds' distributor. You should be aware
that you may have to pay taxes on your exchange. You cannot exchange shares
until the Fund has received payment in federal funds for your shares.
DIVIDENDS
Each business day when we determine NAV for a Fund, we calculate the Fund's
net income and declare dividends for all shareholders of record. Shares begin
to accrue dividends on the day they are purchased. You will not receive
dividends for the day on which you redeem your shares. Dividends are
distributed once a month, on or before the last business day of the month.
Unless you choose to receive your dividends in cash, we will distribute them
as full and fractional additional Fund shares.
RETIREMENT ACCOUNTS
Your Shareholder Servicing Agent can advise you about how investments in the
Funds may be incorporated into your retirement plan.
TAX MATTERS
This discussion of taxes is for general information only. You should consult
your own tax adviser about your particular situation.
Shareholders are required to pay federal income tax on any dividends and other
distributions received. Generally, distributions from a Fund's net investment
income and short-term capital gains will be taxed as ordinary income.
Distributions from long-term net capital gains will be taxed as such
regardless of how long the shares of a Fund have been held. Dividends and
distributions are treated in the same manner for federal tax purposes whether
they are paid in cash or as additional shares. Distributions derived from
interest on U.S. Government obligations may be exempt from certain state and
local taxes.
If you sell your shares of a Fund, or exchange them for shares of another
Fund, you generally will be subject to tax on any taxable gain. Your taxable
gain is computed by subtracting your tax basis in the shares from the
redemption proceeds (in the case of a sale) or the value of the shares
received (in the case of an exchange).
The account application asks each new investor to certify that the investor's
Social Security or taxpayer identification number is correct and that the
shareholder is not subject to 31% backup withholding for failing to report
income to the IRS. A Fund may be required to withhold (and pay over to the IRS
for the shareholder's credit) 31% of certain distributions paid to investors
who fail to provide this information or otherwise violate IRS regulations.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER
Each Fund draws on the strength and experience of Citibank. Citibank is the
investment adviser of each Fund, and subject to policies set by the Funds'
Trustees, Citibank makes investment decisions. Citibank, 153 East 53rd Street,
New York, New York, has been managing money since 1822. With its affiliates,
it currently manages more than $290 billion in assets worldwide. Citibank is a
wholly-owned subsidiary of Citicorp, which is, in turn, a wholly-owned
subsidiary of Citigroup Inc. Citigroup Inc. was formed as a result of the
merger of Citicorp and Travelers Group, Inc., which was completed on October
8, 1998. "CitiFunds" is a service mark of Citicorp.
Although Citibank and its affiliates may have banking relationships with the
issuers of securities that are held in the Funds, in making investment
decisions for the Funds, Citibank does not obtain or use material inside
information acquired by any division, department or affiliate of Citibank in
the course of those relationships. Citibank and its affiliates may have loans
outstanding that are repaid with proceeds of securities purchased by the
Funds.
ADVISORY FEES
For the services it provided under the investment advisory agreements for the
Funds, for the Funds' fiscal year ended August 31, 1998 Citibank received the
following fees:
FEE, AS PERCENTAGE OF AVERAGE
FUND DAILY NET ASSETS, AFTER WAIVER
- ---- ------------------------------
LIQUID RESERVES 0.08%
U.S. TREASURY RESERVES 0.07%
DISTRIBUTION ARRANGEMENTS
The Funds do not charge any sales loads, deferred sales loads or other fees in
connection with the purchase of shares.
The Funds have adopted distribution plans under rule 12b-1 under the
Investment Company Act of 1940. The plans allow each Fund to use up to 0.10%
per year of its average daily net assets to compensate the Funds' distributor
for its distribution activities. The distributor uses the fees to offset Fund
marketing costs, including advertising and other promotional activities, and
to pay its own costs related to distribution activities, including employee
salaries and bonuses. The distributor currently waives a portion of these fees
on a voluntary basis. This fee waiver may be terminated or reduced at any
time. The plans also allow each Fund to pay up to an additional 0.10% per year
of its average daily net assets in anticipation of or as reimbursement for
certain advertising expenses. The Funds did not pay any of these additional
advertising expenses during their last fiscal year, and do not anticipate
doing so during the current fiscal year. Because fees under the plans are paid
out of Fund assets, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
INVESTMENT STRUCTURE
Each Fund invests in securities through an underlying mutual fund having the
same goals and strategies. Each Fund may stop investing in its corresponding
underlying fund at any time, and will do so if the Fund's Trustees believe
that to be in the shareholders' best interests. The Fund could then invest in
another mutual fund or pooled investment vehicle, or could invest directly in
securities.
MORE ABOUT THE FUNDS
The Funds' goals, principal investments and risks are summarized in FUNDS AT A
GLANCE. More information on investments, investment strategies and risks
appears below.
PRINCIPAL INVESTMENT STRATEGIES
The Funds' principal investment strategies are the strategies that, in the
opinion of Citibank, are most likely to be important in trying to achieve each
Fund's investment goals. Of course, there can be no assurance that any Fund
will achieve its goals. Please note that each Fund may also use strategies and
invest in securities that are not described below but that are described in
the Statement of Additional Information.
Each Fund has specific investment policies and procedures designed to maintain
a constant net asset value of $1.00 per share. Each Fund also complies with
industry regulations that apply to money market funds. These regulations
require that each Fund's investments mature or be deemed to mature within 397
days from the date purchased and that the average maturity of each Fund's
investments (on a dollar-weighted basis) be 90 days or less. In addition, all
of the Funds' investments must be in U.S. dollar-denominated high quality
securities which have been determined by Citibank to present minimal credit
risks. To be high quality, a security (or its issuer) must be rated in one of
the two highest short-term rating categories by nationally recognized rating
agencies, such as Moody's or Standard & Poor's, or, in Citibank's opinion, be
of comparable quality. Investors should note that within these two rating
categories there may be sub-categories or gradations indicating relative
quality. Investments in high quality, short-term securities may result in a
lower yield than would be available from investments in lower quality or
longer term securities.
WHAT ARE MONEY MARKET INSTRUMENTS?
A MONEY MARKET INSTRUMENT is a short-term IOU issued by banks or other
corporations, or the U.S. or a foreign government and state or local
governments. Money market instruments have maturity dates of 13 months or
less. Money market instruments may include CERTIFICATES OF DEPOSIT, BANKERS'
ACCEPTANCES, VARIABLE RATE DEMAND NOTES (where the interest rate is reset
periodically and the holder may demand payment from the issuer at any time),
FIXED-TERM OBLIGATIONS, COMMERCIAL PAPER (short term unsecured debt of
corporations), ASSET-BACKED SECURITIES (which are backed by pools of accounts
receivable such as car installment loans or credit card receivables) and
REPURCHASE AGREEMENTS. In a repurchase agreement, the seller sells a security
and the buyer agrees to buy it back at a later date (usually within seven
days) and at a higher price, which reflects an agreed upon interest rate.
LIQUID RESERVES invests in high quality U.S. dollar-denominated money market
instruments of U.S. and non-U.S. issuers. These obligations include U.S.
government obligations, obligations of U.S. and non-U.S. banks, obligations
issued or guaranteed by the governments of Western Europe, Australia, Japan
and Canada, commercial paper, asset backed securities and repurchase
agreements. The Fund's U.S. government obligations may include U.S. Treasury
bills, bonds and notes and obligations of U.S. government agencies and
instrumentalities that may, but need not, be backed by the full faith and
credit of the United States. The Fund concentrates in bank obligations,
including certificates of deposit, fixed time deposits and bankers'
acceptances. This means that the Fund invests at least 25% of its assets in
bank obligations, and the Fund may invest up to all of its assets in bank
obligations. Except for this concentration policy, the Fund's investment goals
and policies may be changed without a shareholder vote.
Liquid Reserves invests only in "first tier" securities, which are securities
rated in the highest short-term rating category by nationally recognized
rating agencies or, in Citibank's opinion, of comparable quality.
U.S. TREASURY RESERVES invests in U.S. Treasury bills, bonds, notes and
receipts. Treasury receipts are interest coupons on other U.S. Treasury
obligations. This Fund may also invest in short-term obligations of U.S.
government agencies and instrumentalities, but only if the obligations are
backed by the full faith and credit of the United States. Unlike most other
money market funds and many U.S. Treasury money market funds, the Fund does
not invest in repurchase agreements. The Fund's investment goals and policies
may be changed without a shareholder vote. ALTHOUGH THE FUND INVESTS IN U.S.
GOVERNMENT OBLIGATIONS, AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT.
INVESTMENT STRUCTURE. Liquid Reserves and U.S. Treasury Reserves each invest
in securities through an underlying mutual fund having the same goals and
strategies.
MANAGEMENT STYLE. Managers of mutual funds use different styles when selecting
securities to purchase. Citibank's portfolio managers use a "top-down"
approach when selecting securities for these funds. When using a "top-down"
approach, the portfolio manager looks first at broad economic factors and
market conditions, such as prevailing and anticipated interest rates. On the
basis of those factors and conditions, the manager selects optimal interest
rates and chooses certain sectors or industries within the overall market. The
manager then looks at individual companies within those sectors or industries
to select securities for the investment portfolio.
RISKS
Investing in a mutual fund involves risk, including the risk that you may
receive little or no return on your investment or even that you may lose part
or all of your investment. Before investing, you should consider the risks you
will assume. Certain of these risks are described below.
The risks of investing in each Fund vary depending on the securities it holds
and the investment practices it uses. Please remember that an investment in
the Funds is not a deposit of Citibank and is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
each Fund seeks to preserve the value of your investment at $1.00 per share,
it is possible to lose money by investing in the Funds.
INTEREST RATE RISK. The Funds invest in short term money market instruments.
As a result, the amount of income paid to you by the Fund will go up or down
depending on day-to-day variations in short term interest rates. A major
change in interest rates could cause the value of your investment in the Fund,
as well as the yield on your investment, to decline.
CREDIT RISK. The Funds invest in high quality debt securities, meaning
securities that are rated, when the Funds buy them, in one of the two highest
short term rating categories by nationally recognized rating agencies or, in
Citibank's opinion, are of comparable quality. However, it is possible that
some issuers will be unable to make the required payments on debt securities
held by the Funds. Debt securities also fluctuate in value based on perceived
creditworthiness of issuers. A default on an investment held by a Fund, or a
significant decline in the value of a Fund investment, could cause the value
of your investment in the Fund to decline.
NON-U.S. SECURITIES. Investors in Liquid Reserves should be aware that
investments in non-U.S. securities involve risks relating to political, social
and economic developments abroad, as well as risks resulting from the
differences between the regulations to which U.S. and non-U.S. issuers and
markets are subject. These risks may include expropriation of assets,
confiscatory taxation, withholding taxes on dividends and interest paid on
fund investments, currency exchange controls and other limitations on the use
or transfer of fund assets and political or social instability. In addition,
non-U.S. companies may not be subject to accounting standards or governmental
supervision comparable to U.S. companies, and there may be less public
information about their operations. Non-U.S. markets may be less liquid and
more volatile than U.S. markets. As a result, there may be rapid changes in
the value of non-U.S. securities. Non-U.S. markets also may offer less
protection to investors such as the Fund.
YEAR 2000. The Funds could be adversely affected if the computer systems used
by the Funds or their service providers are not programmed to process
information accurately on or after January 1, 2000. The Funds, and their
service providers, are making efforts to resolve any potential Year 2000
problems. While it is likely these efforts will be successful, the failure to
implement any necessary modifications could have an adverse impact on the
Funds. The Funds also could be adversely affected if the issuers of securities
held by the Funds do not solve their Year 2000 problems.
$1.00 NET ASSET VALUE. In order to maintain a $1.00 per share net asset value,
a Fund could reduce the number of its outstanding shares. The Fund could do
this if there were a default on, or significant decline in value of, an
investment held by the Fund. In these circumstances, each investor would be
treated as having made a pro rata capital contribution to the Fund. By
investing in a Fund, you agree to this capital contribution should it become
necessary.
<PAGE>
CITIFUNDS PREMIUM LIQUID RESERVES
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period ......................... $1.00000 $1.00000 $1.00000 $1.00000 $1.00000
Net investment income ............ 0.05348 0.05240 0.05322 0.05465 0.03432
Less dividends from net investment
income ......................... (0.05348) (0.05240) (0.05322) (0.05465) (0.03432)
-------- -------- -------- -------- --------
Net asset value, end of period ... $1.00000 $1.00000 $1.00000 $1.00000 $1.00000
======== ======== ======== ======== ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000
omitted) ......................... $611,270 $387,910 $380,303 $423,992 $238,732
Ratio of expenses to average net
assets+ ........................ 0.40% 0.40% 0.40% 0.40% 0.40%
Ratio of net investment income to
average net assets+ ............ 5.39% 5.25% 5.35% 5.47% 3.47%
Total return ..................... 5.48% 5.37% 5.45% 5.60% 3.49%
Note: If agents of the Fund and agents of Cash Reserves Portfolio had not
waived all or a portion of their fees during the periods indicated, the net
investment income per share and the ratios would have been as follows:
Net investment income per share .. $0.04950 $0.04833 $0.04911 $0.05047 $0.02962
RATIOS:
Expenses to average net assets+ .. 0.80% 0.81% 0.82% 0.83% 0.88%
Net investment income to average
net assets+ .................... 4.99% 4.84% 4.93% 5.04% 2.99%
- ----------
+Includes the Fund's share of Cash Reserves Portfolio's allocated expenses.
</TABLE>
<PAGE>
CITIFUNDS PREMIUM U.S. TREASURY RESERVES
FINANCIAL HIGHLIGHTS
<TABLE>
YEAR ENDED AUGUST 31,
------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period ......................... $1.00000 $1.00000 $0.00000 $1.00000 $1.00000
Net investment income ............ 0.04802 0.04794 0.04851 0.04999 0.03087
Less dividends from net investment
income ......................... (0.04802) (0.04794) (0.04851) (0.04999) (0.03087)
-------- -------- -------- -------- --------
Net asset value, end of period ... $1.00000 $1.00000 $1.00000 $1.00000 $1.00000
======== ======== ======== ======== ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's
omitted) ......................... $325,738 $239,441 $235,271 $317,312 $252,458
Ratio of expenses to average net
assets+ ........................ 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of net investment income to
average net assets+ ............ 4.81% 4.80% 4.88% 5.02% 3.09%
Total return ..................... 4.91% 4.90% 4.96% 5.12% 3.13%
Note: If agents of the Fund and agents of U.S. Treasury Reserves Portfolio had not waived all or a portion of their fees
during the periods indicated, the net investment income per share and the ratios would have been as follows:
Net investment income per share .. $0.04433 $0.04414 $0.04463 $0.04601 $0.02667
RATIOS:
Expenses to average net assets+ .. 0.82% 0.83% 0.85% 0.84% 0.87%
Net investment income to average
net assets+ .................... 4.44% 4.42% 4.49% 4.62% 2.67%
- ----------
+Includes the Fund's share of U.S. Treasury Reserves Portfolio's allocated expenses.
</TABLE>
<PAGE>
The Statement of Additional Information (SAl) provides more details about the
Funds and their policies. The SAl is incorporated by reference into this
Prospectus and is legally part of it.
The Annual and Semi-Annual Reports for each Fund list portfolio holdings and
describe fund performance.
To obtain free copies of the SAl and the Annual and Semi-Annual Reports or to
make other inquiries, please call 1-800-625-4554 toll-free, or your account
representative.
The SAI is also available from the Securities and Exchange Commission. You can
find it on the SEC Internet site at http://www.sec.gov. Information about the
Fund (including the SAI) can also be reviewed and copied at the SEC's Public
Reference Room in Washington, DC. You can get information on the operation of
the Public Reference Room by calling the SEC at: 1-800-SEC-0330. You can
receive copies of this information by sending your request and a duplicating
fee to the SEC's Public Reference Section, Washington, DC 20549-6009.
<PAGE>
Statement of
Additional Information
January 4, 1999
CITIFUNDS(SM) PREMIUM LIQUID RESERVES
CITIFUNDS(SM) PREMIUM U.S. TREASURY RESERVES
This Statement of Additional Information sets forth information which may
be of interest to investors but which is not necessarily included in the
Prospectus, dated January 4, 1999, for CitiFunds(SM) Premium Liquid Reserves
("Liquid Reserves") and CitiFunds SM Premium U.S. Treasury Reserves ("U.S.
Treasury Reserves") (the foregoing, collectively, the "Funds"). This Statement
of Additional Information should be read in conjunction with the Prospectus, a
copy of which may be obtained by an investor without charge by contacting the
Funds' Distributor (see back cover for address and phone number).
The Funds are each separate series of CitiFunds(SM) Premium Trust (the
"Trust"). The address and telephone number of the Trust are 21 Milk Street,
Boston, Massachusetts 02109, (617) 423-1679. The Trust invests all of the
investable assets of Liquid Reserves and U.S. Treasury Reserves in Cash Reserves
Portfolio and U.S. Treasury Reserves Portfolio (collectively, the "Portfolios"),
respectively. The address and telephone number of Cash Reserves Portfolio are
Elizabethan Square, George Town, Grand Cayman, British West Indies, (345)
945-1824. The address and telephone number of U.S. Treasury Reserves Portfolio
are 21 Milk Street, Boston, Massachusetts 02109, (617) 423-1679.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, CITIBANK, N.A. OR ANY OF ITS AFFILIATES, ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER AGENCY, AND INVOLVE INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
TABLE OF CONTENTS PAGE
1. The Funds............................................................. 2
2. Investment Objectives, Policies and Restrictions...................... 3
3. Performance Information............................................... 8
4. Determination of Net Asset Value...................................... 9
5. Management............................................................ 11
6. Portfolio Transactions................................................ 16
7. Description of Shares, Voting Rights and Liabilities.................. 17
8. Certain Additional Tax Matters........................................ 18
9. Independent Accountants and Financial Statements...................... 19
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
<PAGE>
1. THE FUNDS
The Trust is a no-load, open-end management investment company which was
organized as a business trust under the laws of the Commonwealth of
Massachusetts on May 23, 1989. Prior to January 2, 1998, the Trust was called
Landmark Premium Funds. Shares of the Trust are divided into two separate
series, CitiFunds Premium Liquid Reserves and CitiFunds Premium U.S. Treasury
Reserves, which are described in this Statement of Additional Information. Prior
to January 2, 1998, CitiFunds Premium Liquid Reserves and CitiFunds Premium U.S.
Treasury Reserves were called Premium Liquid Reserves and Premium U.S. Treasury
Reserves, respectively. References in this Statement of Additional Information
to the Prospectus are to the Prospectus, dated January 4, 1999, of the Funds by
which shares of the Funds are offered.
Each of the Funds is a type of mutual fund commonly referred to as a
"money market fund." The net asset value of each of the Funds' shares is
expected to remain constant at $1.00, although there can be no assurance that
this will be so on a continuing basis. (See "Determination of Net Asset Value.")
The Trust seeks the investment objectives of the Funds by investing all
the investable assets of Liquid Reserves and U.S. Treasury Reserves in Cash
Reserves Portfolio and U.S. Treasury Reserves Portfolio, respectively. Each of
the Portfolios is a diversified open-end management investment company. Each
Portfolio has the same investment objectives and policies as its corresponding
Fund.
The Trustees of the Trust believe that the aggregate per share expenses of
Liquid Reserves and U.S. Treasury Reserves and their corresponding Portfolios
will be less than or approximately equal to the expenses that the Fund would
incur if the assets of the Fund were invested directly in the types of
securities held by its Portfolio. Either Fund many withdraw its investment in
its Portfolio at any time, and will do so if the Fund's Trustees believe it to
be in the best interest of the Fund's shareholders. If a Fund were to withdraw
its investment in its Portfolio, the Fund could either invest directly in
securities in accordance with the investment policies described below or invest
in another mutual fund or pooled investment vehicle having the same investment
objectives and policies. If a Fund were to withdraw, the Fund could receive
securities from the Portfolio instead of cash, causing the Fund to incur
brokerage, tax and other charges or leaving it with securities which may or may
not be readily marketable or widely diversified.
Each Portfolio may change its investment objective and certain of its
investment policies and restrictions without approval by its investors, but a
Portfolio will notify its corresponding Fund (which in turn will notify its
shareholders) and its other investors at least 30 days before implementing any
change in its investment objective. A change in investment objective, policies
or restrictions may cause a Fund to withdraw its investment in its Portfolio.
The Portfolios, as New York trusts, are not required to hold and have no
intention of holding annual meetings of investors. However, when a Portfolio is
required to do so by law, or in the judgment of Trustees it is necessary or
desirable to do so, the Portfolio will submit matters to its investors for a
vote. When a Fund is asked to vote on matters concerning its corresponding
Portfolio (other than a vote to continue the Portfolio following the withdrawal
of an investor), the Fund will hold a shareholder meeting and vote in accordance
with shareholder instructions, or otherwise act in accordance with applicable
law. Of course, the Fund could be outvoted, or otherwise adversely affected, by
other investors in the Portfolio.
The Portfolios may sell interests to investors in addition to the Funds.
These investors may be mutual funds which offer shares to their shareholders
with different costs and expenses than the Funds. Therefore, the investment
returns for all investors in funds investing in a Portfolio may not be the same.
These differences in returns are also present in other mutual fund structures.
Information about other holders of interests in the Portfolios is
available from the Funds' distributor, CFBDS, Inc. ("CFBDS") (21 Milk Street,
Boston, Massachusetts 02109, (617) 423-1679).
Citibank, N.A. ("Citibank" or the "Adviser") is the investment adviser to
each of the Portfolios. The Adviser manages the investments of each Portfolio
from day to day in accordance with the investment objectives and policies of
that Portfolio. The selection of investments for each Portfolio, and the way
they are managed, depend on the conditions and trends in the economy and the
financial marketplaces.
CFBDS, the Funds' administrator (the "Administrator"), supervises the
overall administration of the Trust and U.S. Treasury Reserves Portfolio.
Signature Financial Group (Cayman) Ltd. ("SFG") supervises the overall
administration of Cash Reserves Portfolio. The Boards of Trustees of the Trust
and the Portfolios provide broad supervision over the affairs of the Trust and
of the Portfolios, respectively.
Shares of each Fund are continuously sold by CFBDS, the Funds' distributor
(the "Distributor"), only to investors who are customers of a financial
institution, such as a federal or state-chartered bank, trust company, savings
and loan association or savings bank, or a securities broker, that has entered
into a shareholder servicing agreement with the Trust with respect to that Fund
(collectively, "Shareholder Servicing Agents"). Although shares of the Funds are
sold without a sales load, CFBDS may receive fees from the Funds pursuant to a
Distribution Plan adopted in accordance with Rule 12b-1 under the Investment
Company Act of 1940, as amended (the "1940 Act").
2. INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVES
The investment objective of PREMIUM LIQUID RESERVES is to provide
shareholders with liquidity and as high a level of current income as is
consistent with the preservation of capital.
The investment objective of PREMIUM U.S. TREASURY RESERVES is to provide
its shareholders with liquidity and as high a level of current income from U.S.
government obligations as is consistent with the preservation of capital.
The investment objective of each Fund may be changed without approval by
that Fund's shareholders. Of course, there can be no assurance that either Fund
will achieve its investment objectives.
INVESTMENT POLICIES
The Trust seeks the investment objectives of the Funds by investing all of
the investable assets of Liquid Reserves and U.S. Treasury Reserves in Cash
Reserves Portfolio and U.S. Treasury Reserves Portfolio, respectively, each of
which has the same investment objective and policies as its corresponding Fund.
The Prospectus contains a discussion of the principal investment strategies of
each Fund and certain risks of investing in each Fund. The following supplements
the information contained in the Prospectus concerning the investment
objectives, policies and techniques of each Fund and Portfolio, and contains
more information about the various types of securities in which each Fund and
each Portfolio may invest and the risks involved in such investments. Since the
investment characteristics of Liquid Reserves and U.S. Treasury Reserves will
correspond directly to those of the Portfolio in which it invests, the following
is a supplementary discussion with respect to each Portfolio.
The Trust may withdraw the investment of either Fund from its
corresponding Portfolio at any time, if the Board of Trustees of the Trust
determines that it is in the best interests of the Fund to do so. Upon any such
withdrawal, a Fund's assets would be invested in accordance with the investment
policies described below with respect to its corresponding Portfolio. Except for
the concentration policy of Liquid Reserves with respect to bank obligations
described in paragraph (1) below which may not be changed without the approval
of Liquid Reserves' shareholders, the approval of a Fund's shareholders would
not be required to change that Fund's investment objectives or any of its
investment policies. Likewise, except for the concentration policy of Cash
Reserves Portfolio with respect to bank obligations described in paragraph (1)
below which may not be changed without the approval of Cash Reserves Portfolio's
investors, the approval of the investors in a Portfolio would not be required to
change that Portfolio's investment objectives or any of its investment policies
discussed below, including those concerning securities transactions. Each
Portfolio would, however, give written notice to its investors at least 30 days
prior to implementing any change in its investment objectives.
CASH RESERVES PORTFOLIO
Cash Reserves Portfolio seeks its investment objective through investments
limited to the following types of high quality U.S. dollar-denominated money
market instruments. All investments by Cash Reserves Portfolio mature or are
deemed to mature within 397 days from the date of acquisition, and the average
maturity of the investments held by the Portfolio (on a dollar-weighted basis)
is 90 days or less. All investments by the Portfolio are in "first tier"
securities (i.e., securities rated in the highest rating category for short-term
obligations by at least two nationally recognized statistical rating
organizations (each, an "NRSRO") assigning a rating to the security or issuer
or, if only one NRSRO assigns a rating, that NRSRO or, in the case of an
investment which is not rated, of comparable quality as determined by the
Adviser) and are determined by the Adviser to present minimal credit risks.
Investments in high quality, short term instruments may, in many circumstances,
result in a lower yield than would be available from investments in instruments
with a lower quality or a longer term. Cash Reserves Portfolio may hold
uninvested cash reserves pending investment. Under the 1940 Act, Cash Reserves
and Cash Reserves Portfolio are each classified as "diversified," although in
the case of Cash Reserves, all of its investable assets are invested in the
Portfolio. A "diversified investment company" must invest at least 75% of its
assets in cash and cash items, U.S. government securities, investment company
securities (e.g., interests in the Portfolio) and other securities limited as to
any one issuer to not more than 5% of the total assets of the investment company
and not more than 10% of the voting securities of the issuer.
(1) Bank obligations -- Cash Reserves Portfolio invests at least 25%
of its investable assets, and may invest up to 100% of its assets, in bank
obligations. This concentration policy is fundamental and may not be
changed without the approval of the investors in Cash Reserves Portfolio.
Bank obligations include, but are not limited to, negotiable certificates
of deposit, bankers' acceptances and fixed time deposits. Cash Reserves
Portfolio limits its investments in U.S. bank obligations (including their
non-U.S. branches) to banks having total assets in excess of $1 billion
and which are subject to regulation by an agency of the U.S. government.
The Portfolio may also invest in certificates of deposit issued by banks
the deposits in which are insured by the Federal Deposit Insurance
Corporation ("FDIC"), through either the Bank Insurance Fund or the
Savings Association Insurance Fund, having total assets of less than $1
billion, provided that the Portfolio at no time owns more than $100,000
principal amount of certificates of deposit (or any higher principal
amount which in the future may be fully insured by FDIC insurance) of any
one of those issuers. Fixed time deposits are obligations which are
payable at a stated maturity date and bear a fixed rate of interest.
Generally, fixed time deposits may be withdrawn on demand by the
Portfolio, but they may be subject to early withdrawal penalties which
vary depending upon market conditions and the remaining maturity of the
obligation. Although fixed time deposits do not have a market, there are
no contractual restrictions on the Portfolio's right to transfer a
beneficial interest in the deposit to a third party.
U.S. banks organized under federal law are supervised and examined by
the Comptroller of the Currency and are required to be members of the
Federal Reserve System and to be insured by the FDIC. U.S. banks organized
under state law are supervised and examined by state banking authorities
and are members of the Federal Reserve System only if they elect to join.
However, state banks which are insured by the FDIC are subject to federal
examination and to a substantial body of federal law and regulation. As a
result of federal and state laws and regulations, U.S. branches of U.S.
banks, among other things, are generally required to maintain specified
levels of reserves, and are subject to other supervision and regulation
designed to promote financial soundness.
Cash Reserves Portfolio limits its investments in non-U.S. bank
obligations (i.e., obligations of non-U.S. branches and subsidiaries of
U.S. banks, and U.S. and non-U.S. branches of non-U.S. banks) to U.S.
dollar-denominated obligations of banks which at the time of investment
are branches or subsidiaries of U.S. banks which meet the criteria in the
preceding paragraphs or are branches of non-U.S. banks which (i) have more
than $10 billion, or the equivalent in other currencies, in total assets;
(ii) in terms of assets are among the 75 largest non-U.S. banks in the
world; (iii) have branches or agencies in the United States; and (iv) in
the opinion of the Adviser, are of an investment quality comparable with
obligations of U.S. banks which may be purchased by the Portfolio. These
obligations may be general obligations of the parent bank, in addition to
the issuing branch or subsidiary, but the parent bank's obligations may be
limited by the terms of the specific obligation or by governmental
regulation. The Portfolio also limits its investments in non-U.S. bank
obligations to banks, branches and subsidiaries located in Western Europe
(United Kingdom, France, Germany, Belgium, the Netherlands, Italy,
Switzerland, Denmark, Norway, Sweden), Australia, Japan, the Cayman
Islands, the Bahamas and Canada. Cash Reserves Portfolio does not purchase
any bank obligation of the Adviser or an affiliate of the Adviser.
Since Cash Reserves Portfolio may hold obligations of non-U.S.
branches and subsidiaries of U.S. banks, and U.S. and non-U.S. branches of
non-U.S. banks, an investment in Cash Reserves involves certain additional
risks. Such investment risks include future political and economic
developments, the possible imposition of non-U.S. withholding taxes on
interest income payable on such obligations held by the Portfolio, the
possible seizure or nationalization of non-U.S. deposits and the possible
establishment of exchange controls or other non-U.S. governmental laws or
restrictions applicable to the payment of the principal of and interest on
certificates of deposit or time deposits that might affect adversely such
payment on such obligations held by the Portfolio. In addition, there may
be less publicly-available information about a non-U.S. branch or
subsidiary of a U.S. bank or a U.S. or non-U.S. branch of a non-U.S. bank
than about a U.S. bank and such branches and subsidiaries may not be
subject to the same or similar regulatory requirements that apply to U.S.
banks, such as mandatory reserve requirements, loan limitations and
accounting, auditing and financial record-keeping standards and
requirements.
The provisions of federal law governing the establishment and
operation of U.S. branches do not apply to non-U.S. branches of U.S.
banks. However, Cash Reserves Portfolio may purchase obligations only of
those non-U.S. branches of U.S. banks which were established with the
approval of the Board of Governors of the Federal Reserve System (the
"Board of Governors"). As a result of such approval, these branches are
subject to examination by the Board of Governors and the Comptroller of
the Currency. In addition, such non-U.S. branches of U.S. banks are
subject to the supervision of the U.S. bank and creditors of the non-U.S.
branch are considered general creditors of the U.S. bank subject to
whatever defenses may be available under the governing non-U.S. law and to
the terms of the specific obligation. Nonetheless, Cash Reserves Portfolio
generally will be subject to whatever risk may exist that the non-U.S.
country may impose restrictions on payment of certificates of deposit or
time deposits.
U.S. branches of non-U.S. banks are subject to the laws of the state
in which the branch is located or to the laws of the United States. Such
branches are therefore subject to many of the regulations, including
reserve requirements, to which U.S. banks are subject. In addition, Cash
Reserves Portfolio may purchase obligations only of those U.S. branches of
non-U.S. banks which are located in states which impose the additional
requirement that the branch pledge to a designated bank within the state
an amount of its assets equal to 5% of its total liabilities.
Non-U.S. banks in whose obligations Cash Reserves Portfolio may invest
may not be subject to the laws and regulations referred to in the
preceding two paragraphs.
(2) Obligations of, or guaranteed by, non-U.S. governments. Cash
Reserves Portfolio limits its investments in non-U.S. government
obligations to obligations issued or guaranteed by the governments of
Western Europe (United Kingdom, France, Germany, Belgium, the Netherlands,
Italy, Switzerland, Denmark, Norway, Sweden), Australia, Japan and Canada.
Generally, such obligations may be subject to the additional risks
described in paragraph (1) above in connection with the purchase of
non-U.S. bank obligations.
(3) Commercial paper rated Prime-1 by Moody's Investors Service, Inc.
("Moody's") or A-1 by Standard & Poor's Ratings Group ("Standard &
Poor's") or, if not rated, determined to be of comparable quality by the
Adviser, such as unrated commercial paper issued by corporations having an
outstanding unsecured debt issue currently rated Aaa by Moody's or AAA by
Standard & Poor's. Commercial paper is unsecured debt of corporations
usually maturing in 270 days or less from its date of issuance.
(4) Obligations of, or guaranteed by, the U.S. government, its
agencies or instrumentalities. These include issues of the U.S. Treasury,
such as bills, certificates of indebtedness, notes, bonds and Treasury
Receipts, which are unmatured interest coupons of U.S. Treasury bonds and
notes which have been separated and resold in a custodial receipt program
administered by the U.S. Treasury, and issues of agencies and
instrumentalities established under the authority of an Act of Congress.
Some of the latter category of obligations are supported by the full faith
and credit of the United States, others are supported by the right of the
issuer to borrow from the U.S. Treasury, and still others are supported
only by the credit of the agency or instrumentality. Examples of each of
the three types of obligations described in the preceding sentence are (i)
obligations guaranteed by the Export-Import Bank of the United States,
(ii) obligations of the Federal Home Loan Mortgage Corporation, and (iii)
obligations of the Student Loan Marketing Association, respectively.
(5) Repurchase agreements, providing for resale within 397 days or
less, covering obligations of, or guaranteed by, the U.S. government, its
agencies or instrumentalities which may have maturities in excess of 397
days. A repurchase agreement arises when a buyer purchases an obligation
and simultaneously agrees with the vendor to resell the obligation to the
vendor at an agreed-upon price and time, which is usually not more than
seven days from the date of purchase. The resale price of a repurchase
agreement is greater than the purchase price, reflecting an agreed-upon
market rate which is effective for the period of time the buyer's funds
are invested in the obligation and which is not related to the coupon rate
on the purchased obligation. Obligations serving as collateral for each
repurchase agreement are delivered to the Portfolio's custodian either
physically or in book entry form and the collateral is marked to the
market daily to ensure that each repurchase agreement is fully
collateralized at all times. A buyer of a repurchase agreement runs a risk
of loss if, at the time of default by the issuer, the value of the
collateral securing the agreement is less than the price paid for the
repurchase agreement. If the vendor of a repurchase agreement becomes
bankrupt, Cash Reserves Portfolio might be delayed, or may incur costs or
possible losses of principal and income, in selling the collateral. The
Portfolio may enter into repurchase agreements only with a vendor which is
a member bank of the Federal Reserve System or which is a "primary dealer"
(as designated by the Federal Reserve Bank of New York) in U.S. government
obligations. The Portfolio will not enter into any repurchase agreements
with the Adviser or an affiliate of the Adviser. The restrictions and
procedures described above which govern the Portfolio's investment in
repurchase agreements are designed to minimize the Portfolio's risk of
losses in making those investments. (See "Repurchase Agreements.")
(6) Asset-backed securities, which may include securities such as
Certificates for Automobile Receivables ("CARS") and Credit Card
Receivable Securities ("CARDS"), as well as other asset-backed securities
that may be developed in the future. CARS represent fractional interests
in pools of car installment loans, and CARDS represent fractional
interests in pools of revolving credit card receivables. The rate of
return on asset-backed securities may be affected by early prepayment of
principal on the underlying loans or receivables. Prepayment rates vary
widely and may be affected by changes in market interest rates. It is not
possible to accurately predict the average life of a particular pool of
loans or receivables. Reinvestment of principal may occur at higher or
lower rates than the original yield. Therefore, the actual maturity and
realized yield on asset-backed securities will vary based upon the
prepayment experience of the underlying pool of loans or receivables. (See
"Asset-Backed Securities.")
Cash Reserves Portfolio does not purchase securities which the Portfolio
believes, at the time of purchase, will be subject to exchange controls or
non-U.S. withholding taxes; however, there can be no assurance that such laws
may not become applicable to certain of the Portfolio's investments. In the
event exchange controls or non-U.S. withholding taxes are imposed with respect
to any of the Portfolio's investments, the effect may be to reduce the income
received by the Portfolio on such investments or to prevent the Portfolio from
receiving any value in U.S. dollars from its investment in non-U.S. securities.
ASSET-BACKED SECURITIES
As set forth above, Cash Reserves Portfolio may purchase asset-backed
securities that represent fractional interests in pools of retail installment
loans, both secured (such as CARS) and unsecured, or leases or revolving credit
receivables, both secured and unsecured (such as CARDS). These assets are
generally held by a trust and payments of principal and interest or interest
only are passed through monthly or quarterly to certificate holders and may be
guaranteed up to certain amounts by letters of credit issued by a financial
institution affiliated or unaffiliated with the trustee or originator of the
trust.
Underlying automobile sales contracts, leases or credit card receivables
are subject to prepayment, which may reduce the overall return to certificate
holders. Nevertheless, principal repayment rates tend not to vary much with
interest rates and the short-term nature of the underlying loans, leases or
receivables tends to dampen the impact of any change in the prepayment level.
Reinvestment of principal may occur at higher or lower rates than the original
yield. Certificate holders may also experience delays in payment on the
certificates if the full amounts due on underlying loans, leases or receivables
are not realized by the Portfolio because of unanticipated legal or
administrative costs of enforcing the contracts or because of depreciation or
damage to the collateral (usually automobiles) securing certain contracts, or
other factors. If consistent with its investment objectives and policies, Cash
Reserves Portfolio may invest in other asset-backed securities that may be
developed in the future.
REPURCHASE AGREEMENTS
Each of Cash Reserves and Cash Reserves Portfolio may invest its assets in
instruments subject to repurchase agreements only with member banks of the
Federal Reserve System or "primary dealers" (as designated by the Federal
Reserve Bank of New York) in U.S. government securities. Under the terms of a
typical repurchase agreement, the Fund would acquire an underlying debt
instrument for a relatively short period (usually not more than one week)
subject to an obligation of the seller to repurchase and the Fund to resell the
instrument at a fixed price and time, thereby determining the yield during the
Fund's holding period. This results in a fixed rate of return insulated from
market fluctuations during such period. A repurchase agreement is subject to the
risk that the seller may fail to repurchase the security. Repurchase agreements
may be deemed to be loans under the 1940 Act. All repurchase agreements entered
into by the Funds shall be fully collateralized at all times during the period
of the agreement in that the value of the underlying security shall be at least
equal to the amount of the loan, including the accrued interest thereon, and the
Fund or its custodian or sub-custodian shall have possession of the collateral,
which the Trust's Board of Trustees believes will give it a valid, perfected
security interest in the collateral. Whether a repurchase agreement is the
purchase and sale of a security or a collateralized loan has not been
definitively established. This might become an issue in the event of the
bankruptcy of the other party to the transaction. In the event of default by the
seller under a repurchase agreement construed to be a collateralized loan, the
underlying securities are not owned by the Fund but only constitute collateral
for the seller's obligation to pay the repurchase price. Therefore, a Fund may
suffer time delays and incur costs in connection with the disposition of the
collateral. The Trust's Board of Trustees believes that the collateral
underlying repurchase agreements may be more susceptible to claims of the
seller's creditors than would be the case with securities owned by the Funds.
Repurchase agreements will give rise to income which will not qualify as
tax-exempt income when distributed by the Funds. A Fund will not invest in a
repurchase agreement maturing in more than seven days if any such investment
together with illiquid securities held by the Fund exceed 10% of the Fund's
total net assets. Repurchase agreements are also subject to the same risks
described herein with respect to stand-by commitments.
U.S. TREASURY RESERVES PORTFOLIO
U.S. Treasury Reserves Portfolio seeks its investment objective by
investing in obligations of, or guaranteed by, the U.S. government, its agencies
or instrumentalities including issues of the U.S. Treasury, such as bills,
certificates of indebtedness, notes, bonds and Treasury Receipts, which are
unmatured interest coupons of U.S. Treasury bonds and notes which have been
separated and resold in a custodial receipt program administered by the U.S.
Treasury, and in issues of agencies and instrumentalities established under the
authority of an Act of Congress which are supported by the full faith and credit
of the United States. U.S. Treasury Reserves Portfolio will not enter into
repurchase agreements. All investments by the Portfolio are in "first tier"
securities (i.e., securities rated in the highest rating category for short-term
obligations by at least two NRSRO's assigning a rating to the security or issuer
or, if only one NRSRO assigns a rating, that NRSRO or, in the case of an
investment which is not rated, of comparable quality as determined by the
Adviser) and are determined by the Adviser to present minimal credit risks.
Investments in high quality, short term instruments may, in many circumstances,
result in a lower yield than would be available from investments in instruments
with a lower quality or a longer term. U.S. Treasury Reserves Portfolio may hold
uninvested cash reserves pending investment.
LENDING OF SECURITIES
Consistent with applicable regulatory requirements and in order to
generate income, each of the Funds and Portfolios may lend its securities to
broker-dealers and other institutional borrowers. Such loans will usually be
made only to member banks of the U.S. Federal Reserve System and to member firms
of the New York Stock Exchange (and subsidiaries thereof). Loans of securities
would be secured continuously by collateral in cash, cash equivalents, or U.S.
Treasury obligations maintained on a current basis at an amount at least equal
to the market value of the securities loaned. The cash collateral would be
invested in high quality short-term instruments. Either party has the right to
terminate a loan at any time on customary industry settlement notice (which will
not usually exceed three business days). During the existence of a loan, a Fund
or Portfolio would continue to receive the equivalent of the interest or
dividends paid by the issuer on the securities loaned and with respect to cash
collateral would also receive compensation based on investment of the collateral
(subject to a rebate payable to the borrower). Where the borrower provides a
Fund or Portfolio with collateral consisting of U.S. Treasury obligations, the
borrower is also obligated to pay the Fund or Portfolio a fee for use of the
borrowed securities. The Fund or Portfolio would not, however, have the right to
vote any securities having voting rights during the existence of the loan, but
would call the loan in anticipation of an important vote to be taken among
holders of the securities or of the giving or withholding of their consent on a
material matter affecting the investment. As with other extensions of credit,
there are risks of delay in recovery or even loss of rights in the collateral
should the borrower fail financially. However, the loans would be made only to
entities deemed by the Adviser to be of good standing, and when, in the judgment
of the Adviser, the consideration which can be earned currently from loans of
this type justifies the attendant risk. In addition, a Fund or Portfolio could
suffer loss if the borrower terminates the loan and the Fund or Portfolio is
forced to liquidate investments in order to return the cash collateral to the
buyer. If the Adviser determines to make loans, it is not intended that the
value of the securities loaned by a Fund or Portfolio would exceed 33 1/3% of
the value of its net assets.
PRIVATE PLACEMENTS AND ILLIQUID INVESTMENTS
Each Fund and Portfolio may invest up to 10% of its net assets in
securities for which there is no readily available market. These illiquid
securities may include privately placed restricted securities for which no
institutional market exists. The absence of a trading market can make it
difficult to ascertain a market value for illiquid investments. Disposing of
illiquid investments may involve time-consuming negotiation and legal expenses,
and it may be difficult or impossible for a Fund or Portfolio to sell them
promptly at an acceptable price.
INVESTMENT RESTRICTIONS
The Trust, on behalf of the Funds, and the Portfolios have each adopted
the following policies which may not be changed without approval by holders of a
"majority of the outstanding shares" of the applicable Fund or Portfolio, which
as used in this Statement of Additional Information means the vote of the lesser
of (i) 67% or more of the outstanding voting securities of the Fund or Portfolio
present at a meeting, if the holders of more than 50% of the outstanding "voting
securities" of the Fund or Portfolio are present or represented by proxy, or
(ii) more than 50% of the outstanding "voting securities" of the Fund or the
Portfolio. The term "voting securities" as used in this paragraph has the same
meaning as in the 1940 Act. Whenever the Trust is requested to vote on a change
in the investment restrictions of a Portfolio (or, in the case of Cash Reserves
Portfolio, its concentration policy described in paragraph (1) under "Investment
Policies"), the Trust will hold a meeting of the corresponding Fund's
shareholders and will cast its vote as instructed by the shareholders. Each Fund
will vote the shares held by its shareholders who do not give voting
instructions in the same proportion as the shares of that Fund's shareholders
who do give voting instructions. Shareholders of the Funds who do not vote will
have no effect on the outcome of these matters.
Neither the Trust, on behalf of a Fund, nor a Portfolio may:
(1) borrow money, except that as a temporary measure for
extraordinary or emergency purposes either the Trust or the Portfolio may
borrow from banks in an amount not to exceed 1/3 of the value of the net
assets of the Fund or the Portfolio, respectively, including the amount
borrowed (moreover, neither the Trust (on behalf of the Fund) nor the
Portfolio may purchase any securities at any time at which borrowings
exceed 5% of the total assets of the Fund or the Portfolio, respectively
(taken in each case at market value)) (it is intended that the Fund and
the Portfolio would borrow money only from banks and only to accommodate
requests for the repurchase of shares of the Fund or the withdrawal of all
or a portion of a beneficial interest in the Portfolio while effecting an
orderly liquidation of securities);
(2) purchase any security or evidence of interest therein on margin,
except that either the Trust, on behalf of the Fund, or the Portfolio may
obtain such short term credit as may be necessary for the clearance of
purchases and sales of securities;
(3) underwrite securities issued by other persons, except that all
the assets of the Fund may be invested in the Portfolio and except insofar
as either the Trust or the Portfolio may technically be deemed an
underwriter under the Securities Act of 1933 in selling a security;
(4) make loans to other persons except (a) through the lending of
securities held by either the Fund or the Portfolio, but not in excess of
33 1/3% of the Fund's or the Portfolio's net assets, as the case may be,
(b) through the use of repurchase agreements (or, in the case of Liquid
Reserves and Cash Reserves Portfolio, fixed time deposits) or the purchase
of short term obligations, or (c) by purchasing all or a portion of an
issue of debt securities of types commonly distributed privately to
financial institutions; for purposes of this paragraph 4 the purchase of a
portion of an issue of debt securities which is part of an issue to the
public (and in the case of Liquid Reserves and Cash Reserves Portfolio,
short term commercial paper) shall not be considered the making of a loan;
(5) purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests
therein), interests in oil, gas or mineral leases, commodities or
commodity contracts in the ordinary course of business (the Trust on
behalf of each Fund and the Portfolio reserve the freedom of action to
hold and to sell real estate acquired as a result of the ownership of
securities by the Fund or the Portfolio);
(6) in the case of U.S. Treasury Reserves and U.S. Treasury Reserves
Portfolio, concentrate its investment in any particular industry; provided
that nothing in this Investment Restriction is intended to affect the
ability to invest 100% of U.S. Treasury Reserves' assets in U.S. Treasury
Reserves Portfolio;
(7) in the case of Liquid Reserves and Cash Reserves Portfolio,
concentrate its investments in any particular industry, but, if it is
deemed appropriate for the achievement of its investment objective, up to
25% of the assets of Liquid Reserves or Cash Reserves Portfolio,
respectively (taken at market value at the time of each investment) may be
invested in any one industry, except that the Portfolio will invest at
least 25% of its assets and may invest up to 100% of its assets in bank
obligations; provided that, if the Trust withdraws the investment of
Liquid Reserves from Cash Reserves Portfolio, the Trust will invest the
assets of the Fund in bank obligations to the same extent and with the
same reservation as the Portfolio; and provided, further that nothing in
this Investment Restriction is intended to affect Liquid Reserves' ability
to invest 100% of its assets in Cash Reserves Portfolio; or
(8) issue any senior security (as that term is defined in the 1940
Act) if such issuance is specifically prohibited by the 1940 Act or the
rules and regulations promulgated thereunder, except as appropriate to
evidence a debt incurred without violating Investment Restriction (1)
above.
If a percentage restriction or a rating restriction (other than a
restriction as to borrowing) on investment or utilization of assets set forth
above or referred to in the Prospectus is adhered to at the time an investment
is made or assets are so utilized, a later change in percentage resulting from
changes in the value of the securities held by a Fund or a Portfolio or a later
change in the rating of a security held by the Fund or the Portfolio is not
considered a violation of policy.
3. PERFORMANCE INFORMATION
Fund performance may be quoted in advertising, shareholder reports and
other communications in terms of yield, effective yield, tax equivalent yield,
total rate of return or tax equivalent total rate of return. All performance
information is historical and is not intended to indicate future performance.
Yields and total rates of return fluctuate in response to market conditions and
other factors.
Each Fund may provide annualized yield and effective yield quotations. The
yield of a Fund refers to the income generated by an investment in the Fund over
a seven-day period (which period is stated in any such advertisement or
communication). This income is then annualized; that is, the amount of income
generated by the investment over that period is assumed to be generated each
week over a 365-day period and is shown as a percentage of the investment. Any
current yield quotation of a Fund which is used in such a manner as to be
subject to the provisions of Rule 482(d) under the Securities Act of 1933, as
amended, consists of an annualized historical yield, carried at least to the
nearest hundredth of one percent, based on a specific seven calendar day period
and is calculated by dividing the net change in the value of an account having a
balance of one share at the beginning of the period by the value of the account
at the beginning of the period and multiplying the quotient by 365/7. For this
purpose the net change in account value would reflect the value of additional
shares purchased with dividends declared on the original share and dividends
declared on both the original share and any such additional shares, but would
not reflect any realized gains or losses as a result of a Fund's investment in a
Portfolio or from the sale of securities or any unrealized appreciation or
depreciation on portfolio securities. The effective yield is calculated
similarly, but when annualized the income earned by the investment during that
seven-day period is assumed to be reinvested. The effective yield is slightly
higher than the yield because of the compounding effect of this assumed
reinvestment. Any effective yield quotation of a Fund so used shall be
calculated by compounding the current yield quotation for such period by
multiplying such quotation by 7/365, adding 1 to the product, raising the sum to
a power equal to 365/7, and subtracting 1 from the result.
U.S. Treasury Reserves may provide tax equivalent yield quotations. The
tax equivalent yield refers to the yield that a fully taxable money market fund
would have to generate in order to produce an after-tax yield equivalent to that
of a Fund. The use of a tax equivalent yield allows investors to compare the
yield of the Fund, the dividends from which may be exempt from federal or state
personal income tax, with yields of funds the dividends from which are not tax
exempt. Any tax equivalent yield quotation of a Fund is calculated as follows:
If the entire current yield quotation for such period is tax-exempt, the tax
equivalent yield will be the current yield quotation divided by 1 minus a stated
income tax rate or rates. If a portion of the current yield quotation is not
tax-exempt, the tax equivalent yield will be the sum of (a) that portion of the
yield which is tax-exempt divided by 1 minus a stated income tax rate or rates
and (b) the portion of the yield which is not tax-exempt. A Fund also may
provide yield, effective yield and tax equivalent yield quotations for longer
periods.
Each Fund may provide its period and average annualized total rates of
return. The total rate of return refers to the change in the value of an
investment in a Fund over a stated period and is compounded to include the value
of any shares purchased with any dividends or capital gains declared during such
period. A total rate of return quotation for a Fund is calculated for any period
by (a) dividing (i) the sum of the net asset value per share on the last day of
the period and the net asset value per share on the last day of the period of
shares purchasable with dividends and capital gains distributions declared
during such period with respect to a share held at the beginning of such period
and with respect to shares purchased with such dividends and capital gains
distributions, by (ii) the public offering price on the first day of such
period, and (b) subtracting 1 from the result. Period total rate of return may
be annualized. An annualized total rate of return assumes that the period total
rate of return is generated over a one-year period. Any annualized total rate of
return quotation is calculated by (x) adding 1 to the period total rate of
return quotation calculated above, (y) raising such sum to a power which is
equal to 365 divided by the number of days in such period, and (z) subtracting 1
from the result.
U.S. Treasury Reserves may provide tax equivalent total rates of return.
The tax equivalent total rate of return refers to the total rate of return that
a fully taxable money market fund would have to generate in order to produce an
after-tax total rate of return equivalent to that of a Fund. The use of a tax
equivalent total rate of return allows investors to compare the total rates of
return of a Fund, the dividends from which may be exempt from federal or state
personal income taxes, with the total rates of return of funds the dividends
from which are not tax exempt. Any tax equivalent total rate of return quotation
of a Fund is calculated as follows: If the entire current total rate of return
quotation for such period is tax-exempt, the tax equivalent total rate of return
will be the current total rate of return quotation divided by 1 minus a stated
income tax rate or rates. If a portion of the current total rate of return
quotation is not tax-exempt, the tax equivalent total rate of return will be the
sum of (a) that portion of the total rate of return which is tax-exempt divided
by 1 minus a stated income tax rate or rates and (b) the portion of the total
rate of return which is not tax-exempt.
Set forth below is total rate of return information, assuming that
dividends and capital gains distributions, if any, were reinvested, for each
Fund for the periods indicated, at the beginning of which periods no sales
charges were applicable to purchases of shares of the Funds.
<TABLE>
<CAPTION>
REDEEMABLE VALUE
OF A HYPOTHETICAL
$1,000 INVESTMENT
ANNUALIZED TOTAL AT THE END
PERIOD RATE OF RETURN OF THE PERIOD
- ------ ---------------- ------------------
LIQUID RESERVES
<S> <C> <C>
May 3, 1990 (commencement of operations) to
August 31, 1998 5.09% $1.512.03
Five years ended August 31, 1998 5.08% $1,280.87
One year ended August 31, 1998 5.48% $1,054.81
U.S. TREASURY RESERVES
March 1, 1991 (commencement of operations) to
August 31, 1998 4.38% $1,379.80
Five years ended August 31, 1998 4.60% $1,252.19
One year ended August 31, 1998 4.91% $1,049.09
</TABLE>
The annualized yield of Liquid Reserves for the seven-day period ended
August 31, 1998 was 5.31%. The effective compound annualized yield of Liquid
Reserves for such period was 5.45%. The annualized yield of U.S. Treasury
Reserves for the seven-day period ended August 31, 1998 was 4.66%. The effective
compound annualized yield of U.S. Treasury Reserves for such period was 4.76%,
and the annualized tax equivalent yield of U.S. Treasury Reserves for such
period was 5.25% (assuming a combined state and local tax rate of 11.307%
for New York City residents).
4. DETERMINATION OF NET ASSET VALUE
The net asset value of each share of the Funds is determined on each day
on which the New York Stock Exchange is open for trading. This determination is
normally made once during each such day as of 3:00 p.m., Eastern time, for
Liquid Reserves and 12:00 noon, Eastern time, for U.S. Treasury Reserves, by
dividing the value of each Fund's net assets (i.e., the value of its assets,
including its investment in a Portfolio, less its liabilities, including
expenses payable or accrued) by the number of the Fund's shares outstanding at
the time the determination is made. On days when the financial markets in which
the Funds invest close early, each Fund's net asset value is determined as of
the close of these markets if such time is earlier than the time at which the
net asset value is normally calculated. As of the date of this Statement of
Additional Information, the Exchange is open for trading every weekday except
for the following holidays (or the days on which they are observed): New Year's
Day, Martin Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It is
anticipated that the net asset value of each share of each Fund will remain
constant at $1.00 and, although no assurance can be given that they will be able
to do so on a continuing basis, as described below, the Funds and Portfolios
employ specific investment policies and procedures to accomplish this result.
The value of a Portfolio's net assets (i.e., the value of its securities
and other assets less its liabilities, including expenses payable or accrued) is
determined at the same time and on the same days as the net asset value per
share of the corresponding Fund is determined. The net asset value of a Fund's
investment in the corresponding Portfolio is equal to the Fund's pro rata share
of the total investment of the Fund and of other investors in the Portfolio less
the Fund's pro rata share of the Portfolio's liabilities.
The securities held by a Fund or Portfolio are valued at their amortized
cost. Amortized cost valuation involves valuing an instrument at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium. If fluctuating interest rates cause the market value of the securities
held by the Fund or Portfolio to deviate more than 1/2 of 1% from their value
determined on the basis of amortized cost, the Trust's or applicable Portfolio's
Board of Trustees will consider whether any action should be initiated, as
described in the following paragraph. Although the amortized cost method
provides certainty in valuation, it may result in periods during which the
stated value of an instrument is higher or lower than the price the Fund or
Portfolio would receive if the instrument were sold.
Pursuant to the rules of the SEC, the Trust's and the Portfolios' Boards
of Trustees have established procedures to stabilize the value of the Funds' and
Portfolios' net assets within 1/2 of 1% of the value determined on the basis of
amortized cost. These procedures include a review of the extent of any such
deviation of net asset value, based on available market rates. Should that
deviation exceed 1/2 of 1% for a Fund or Portfolio, the Trust's or applicable
Portfolio's Board of Trustees will consider whether any action should be
initiated to eliminate or reduce material dilution or other unfair results to
investors in the Fund or Portfolio. Such action may include withdrawal in kind,
selling securities prior to maturity and utilizing a net asset value as
determined by using available market quotations. The Funds and Portfolios
maintain a dollar-weighted average maturity of 90 days or less, do not purchase
any instrument with a remaining maturity greater than 397 days or (in the case
of Liquid Reserves and Cash Reserves Portfolio) subject to a repurchase
agreement having a duration of greater than 397 days, limit their investments,
including repurchase agreements, to those U.S. dollar-denominated instruments
that are determined by the Adviser to present minimal credit risks and comply
with certain reporting and recordkeeping procedures. The Trust and Portfolios
also have established procedures to ensure that securities purchased by the
Funds and Portfolios meet high quality criteria. (See "Investment Objectives,
Policies and Restrictions -- Investment Policies.")
Because of the short-term maturities of the portfolio investments of each
Fund, the Funds do not expect to realize long-term capital gains or losses. Any
net realized short-term capital gains will be declared and distributed to the
Funds' shareholders annually after the close of each Fund's fiscal year.
Distributions of short-term capital gains are taxable to shareholders as
described in "Certain Additional Tax Matters." Any realized short-term capital
losses will be offset against short-term capital gains or, to the extent
possible, utilized as capital loss carryover. Each Fund may distribute
short-term capital gains more frequently then annually, reduce shares to reflect
capital losses or make distributions of capital if necessary in order to
maintain the Fund's net asset value of $1.00 per share.
It is expected that each Fund will have a positive net income at the time
of each determination thereof. If for any reason a Fund's net income is a
negative amount, which could occur, for instance, upon default by an issuer of a
portfolio security, the Fund would first offset the negative amount with respect
to each shareholder account from the dividends declared during the month with
respect to those accounts. If and to the extent that negative net income exceeds
declared dividends at the end of the month, the Fund would reduce the number of
outstanding Fund shares by treating each shareholder as having contributed to
the capital of the Fund that number of full and fractional shares in the
shareholder's account which represents the shareholder's share of the amount of
such excess. Each shareholder would be deemed to have agreed to such
contribution in these circumstances by investment in the Fund.
Subject to compliance with applicable regulations, the Trust and the
Portfolios have each reserved the right to pay the redemption price of shares of
the Funds or beneficial interests in the Portfolios, either totally or
partially, by a distribution in kind of readily marketable securities (instead
of cash). The securities so distributed would be valued at the same amount as
that assigned to them in calculating the net asset value for the shares or
beneficial interests being sold. If a holder of shares or beneficial interests
received a distribution in kind, such holder could incur brokerage or other
charges in converting the securities to cash.
Shareholders may redeem Fund shares by sending written instructions in
proper form (as determined by a shareholder's Shareholder Servicing Agent) to
their Shareholder Servicing Agents. Shareholders are responsible for ensuring
that a request for redemption is in proper form.
Shareholders may redeem or exchange Fund shares by telephone, if their
account applications so permit, by calling their Shareholder Servicing Agents.
During periods of drastic economic or market changes or severe weather or other
emergencies, shareholders may experience difficulties implementing a telephone
exchange or redemption. In such an event, another method of instruction, such as
a written request sent via an overnight delivery service, should be considered.
The Funds and each Shareholder Servicing Agent will employ reasonable procedures
to confirm that instructions communicated by telephone are genuine. These
procedures may include recording of the telephone instructions and verification
of a caller's identity by asking for the shareholder's name, address, telephone
number, Social Security number, and account number. If these or other reasonable
procedures are not followed, the Fund or the Shareholder Servicing Agent may be
liable for any losses to a shareholder due to unauthorized or fraudulent
instructions. Otherwise, the shareholders will bear all risk of loss relating to
a redemption or exchange by telephone.
The Trust and the Portfolios may suspend the right of redemption or
postpone the date of payment for shares of a Fund or beneficial interests in a
Portfolio more than seven days during any period when (a) trading in the markets
the Fund or Portfolio normally utilizes is restricted, or an emergency, as
defined by the rules and regulations of the SEC, exists making disposal of the
Fund's or Portfolio's investments or determination of its net asset value not
reasonably practicable; (b) the New York Stock Exchange is closed (other than
customary weekend and holiday closings); or (c) the SEC has by order permitted
such suspension.
5. MANAGEMENT
Each Fund and Portfolio is supervised by a Board of Trustees. In each
case, a majority of the Trustees are not affiliated with the Adviser. In
addition, a majority of the disinterested Trustees of the Funds are different
from a majority of the disinterested Trustees of their corresponding Portfolios.
The Trustees and officers of the Trust and the Portfolios, their ages and
their principal occupations during the past five years are set forth below.
Their titles may have varied during that period. Asterisks indicate that those
Trustees and officers are "interested persons" (as defined in the 1940 Act) of
the Trust or a Portfolio. Unless otherwise indicated below, the address of each
Trustee and officer is 21 Milk Street, Boston, Massachusetts. The address of
Cash Reserves Portfolio is Elizabethan Square, George Town, Grand Cayman,
British West Indies. The address of U.S. Treasury Reserves Portfolio is 21 Milk
Street, Boston, Massachusetts.
TRUSTEES OF THE TRUST
PHILIP W. COOLIDGE; 47* -- President of the Trust and the Portfolios; Chief
Executive Officer and President, Signature Financial Group, Inc. and CFBDS.
MARK T. FINN; 55 -- President and Director, Delta Financial, Inc. (since June,
1983); Chairman of the Board and Chief Executive Officer, FX 500 Ltd. (Commodity
Trading Advisory Firm) (since April, 1990); Director, Vantage Consulting Group,
Inc. (since October, 1988). His address is 3500 Pacific Avenue, P.O. Box 539,
Virginia Beach, Virginia.
RILEY C. GILLEY; 72 -- Vice President and General Counsel, Corporate Property
Investors (November, 1988 to December, 1991); Partner, Breed, Abbott & Morgan
(Attorneys) (retired, December 1987). His address is 4041 Gulf Shore Boulevard
North, Naples, Florida.
WILLIAM S. WOODS, JR.; 78 -- Vice President - Investments, Sun Company, Inc.
(retired, April, 1984). His address is 35 Colwick Road, Cherry Hill, New Jersey.
TRUSTEES OF THE PORTFOLIOS
ELLIOTT J. BERV; 55 -- Chairman and Director, Catalyst, Inc. (Management
Consultants) (since June, 1992); President, Chief Operating Officer and
Director, Deven International, Inc. (International Consultants) (June, 1991 to
June, 1992); President and Director, Elliott J. Berv & Associates (Management
Consultants) (since May, 1984). His address is 15 Stornoway Drive, Cumberland
Foreside, Maine.
PHILIP W. COOLIDGE; 47* -- President of the Trust and the Portfolios; Chief
Executive Officer and President, Signature Financial Group, Inc. and CFBDS.
RILEY C. GILLEY; 72 -- Vice President and General Counsel, Corporate Property
Investors (November, 1988 to December, 1991); Partner, Breed, Abbott & Morgan
(Attorneys) (retired, December 1987). His address is 4041 Gulf Shore Boulevard
North, Naples, Florida.
WALTER E. ROBB, III; 72 -- President, Benchmark Consulting Group, Inc. (since
1991); Principal, Robb Associates (Corporate Financial Advisors) (since 1978);
President, Benchmark Advisors, Inc. (Corporate Financial Advisors) (since 1989);
Trustee of certain registered investment companies in the MFS Family of Funds.
His address is 35 Farm Road, Sherborn, Massachusetts.
OFFICERS OF THE TRUST AND THE PORTFOLIOS
PHILIP W. COOLIDGE; 47* -- President of the Trust and the Portfolios; Chief
Executive Officer and President, Signature Financial Group, Inc. and CFBDS.
CHRISTINE A. DRAPEAU; 28* -- Assistant Secretary and Assistant Treasurer of the
Trust and the Portfolios; Assistant Vice President, Signature Financial Group,
Inc. (since January, 1996); Paralegal and Compliance Officer, various financial
companies (July, 1992 to January, 1996); Graduate Student, Bentley College
(prior to December, 1994).
TAMIE EBANKS-CUNNINGHAM, 26* -- Assistant Secretary of the Trust and the
Portfolios; Office Manager, Signature Financial Group (Cayman) Ltd. (Since April
1995); Administrator, Cayman Islands Primary School (prior to April 1995). Her
address is P.O. Box 2494, Elizabethan Square, George Town, Grand Cayman, Cayman
Islands, B.W.I.
JOHN R. ELDER; 50* -- Treasurer of the Trust and the Portfolios; Vice President,
Signature Financial Group, Inc. (since April, 1995); Treasurer, CFBDS (since
April, 1995); Treasurer, Phoenix Family of Mutual Funds (Phoenix Home Life
Mutual Insurance Company) (1983 to March, 1995).
LINDA T. GIBSON; 33* -- Secretary of the Trust and the Portfolios; Vice
President, Signature Financial Group, Inc. (since May, 1992); Assistant
Secretary, CFBDS (since October, 1992).
JOAN R. GULINELLO; 43* -- Assistant Secretary and Assistant Treasurer of the
Trust and the Portfolios; Vice President, Signature Financial Group, Inc. (since
October, 1993); Secretary, CFBDS (since October, 1995); Vice President and
Assistant General Counsel, Massachusetts Financial Services Company (prior to
October, 1993).
JAMES E. HOOLAHAN; 51* -- Vice President, Assistant Secretary and Assistant
Treasurer of the Trust and the Portfolios; Senior Vice President, Signature
Financial Group, Inc.
SUSAN JAKUBOSKI; 34* -- Vice President, Assistant Treasurer and Assistant
Secretary of the Trust and the Portfolios; Vice President, Signature Financial
Group (Cayman) Ltd. (since August, 1994); Fund Compliance Administrator, Concord
Financial Group (November, 1990 to August, 1994). Her address is Suite 193, 12
Church St., Hamilton HM11, Bermuda.
MOLLY S. MUGLER; 47* -- Assistant Secretary and Assistant Treasurer of the Trust
and the Portfolios; Vice President, Signature Financial Group, Inc.; Assistant
Secretary, CFBDS.
CLAIR TOMALIN, 30* -- Assistant Secretary of the Trust and the Portfolios;
Office Manager, Signature Financial Group (Europe) Limited (since 1993). Her
address is 117 Charterhouse Street, London ECIM 6AA.
SHARON M. WHITSON; 50* -- Assistant Secretary and Assistant Treasurer of the
Trust and the Portfolios; Assistant Vice President, Signature Financial Group,
Inc.
JULIE J. WYETZNER; 39* -- Vice President, Assistant Secretary and Assistant
Treasurer of the Trust and the Portfolios; Vice President, Signature Financial
Group, Inc.
The Trustees and officers of the Trust and the Portfolios also hold comparable
positions with certain other funds for which CFBDS or an affiliate serves as the
distributor or administrator.
<TABLE>
<CAPTION>
TRUSTEES COMPENSATION TABLE
AGGREGATE
AGGREGATE COMPENSATION FROM
COMPENSATION FROM PREMIUM TOTAL COMPENSATION
PREMIUM LIQUID U.S. TREASURY FROM THE TRUST
TRUSTEE RESERVES(1) RESERVES(1) AND COMPLEX(2)
<S> <C> <C> <C>
Philip W. Coolidge............................. $0 $0 $0
Mark T. Finn................................... $ 2,099 $ 1,825 $ 54,000
Riley C. Gilley................................ $ 2,740 $ 2,241 $ 50,000
William S. Woods, Jr........................... $ 3,673 $ 2,816 $ 58,000
(1) For the fiscal year ended August 31, 1998.
(2) Information relates to the fiscal year ended August 31, 1998. Messrs. Coolidge, Finn, Gilley and Woods are trustees
of 53, 29, 33, and 26 Funds, respectively, of the family of open-end registered investment companies advised or
managed by Citibank.
</TABLE>
As of December __, 1998, all Trustees and officers as a group owned less
than 1% of each Fund's outstanding shares. As of the same date, more than 95% of
the outstanding shares of Liquid Reserves and more than 95% of the outstanding
shares of U.S. Treasury Reserves were held of record by Citibank or an
affiliate, as a Shareholder Servicing Agent of the Funds, for the accounts of
their respective clients.
The Declaration of Trust of each of the Trust and the Portfolios provides
that the Trust or such Portfolio, as the case may be, will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Trust or such Portfolio, as the case may be, unless, as to liability to the
Trust or such Portfolio or its respective investors, it is finally adjudicated
that they engaged in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in their offices, or unless with
respect to any other matter it is finally adjudicated that they did not act in
good faith in the reasonable belief that their actions were in the best
interests of the Trust or such Portfolio, as the case may be. In the case of
settlement, such indemnification will not be provided unless it has been
determined by a court or other body approving the settlement or other
disposition, or by a reasonable determination, based upon a review of readily
available facts, by vote of a majority of disinterested Trustees of the Trust or
such Portfolio, or in a written opinion of independent counsel, that such
officers or Trustees have not engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties.
ADVISER
Citibank manages the assets of each Portfolio pursuant to separate
investment advisory agreements (the "Advisory Agreements"). Subject to such
policies as the Board of Trustees of a Portfolio may determine, the Adviser
manages the securities of the Portfolio and makes investment decisions for the
Portfolio. The Adviser furnishes at its own expense all services, facilities and
personnel necessary in connection with managing the Portfolios' investments and
effecting securities transactions for each Portfolio. Each of the Advisory
Agreements will continue in effect as long as such continuance is specifically
approved at least annually by the Board of Trustees of the applicable Portfolio
or by a vote of a majority of the outstanding voting securities of the
applicable Portfolio, and, in either case, by a majority of the Trustees of the
applicable Portfolio who are not parties to such Advisory Agreement or
interested persons of any such party, at a meeting called for the purpose of
voting on the Advisory Agreement.
Each of the Advisory Agreements provides that the Adviser may render
services to others. Each Advisory Agreement is terminable without penalty on not
more than 60 days' nor less than 30 days' written notice by the applicable
Portfolio when authorized either by a vote of a majority of the outstanding
voting securities of the applicable Portfolio or by a vote of a majority of the
Board of Trustees of the applicable Portfolio, or by the Adviser on not more
than 60 days' nor less than 30 days' written notice, and will automatically
terminate in the event of its assignment. Each Advisory Agreement provides that
neither the Adviser nor its personnel shall be liable for any error of judgment
or mistake of law or for any loss arising out of any investment or for any act
or omission in the execution of security transactions for the applicable
Portfolio, except for willful misfeasance, bad faith or gross negligence or
reckless disregard of its or their obligations and duties under the Advisory
Agreement.
For its services under the Advisory Agreements, the Adviser receives
investment advisory fees, which are accrued daily and paid monthly, of 0.15% of
each Portfolio's average daily net assets on an annualized basis for the
Portfolio's then-current fiscal year. The Adviser has voluntarily agreed to
waive a portion of its investment advisory fee.
CASH RESERVES PORTFOLIO: For the fiscal years ended August 31, 1996, 1997
and 1998 the fees paid to Citibank under the Advisory Agreement, after waivers,
were $2,713,691, $4,395,286 and $6,739,206, respectively.
U.S. TREASURY RESERVES PORTFOLIO: For the fiscal years ended August 31,
1996, 1997 and 1998, the fees paid to Citibank under the Advisory Agreement,
after waivers, were $373,944, $494,339 and $578,350, respectively.
Citibank and its affiliates may have deposit, loan and other relationships
with the issuers of securities purchase 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.
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 Investment Advisory
Agreements and the activities performed by it or its affiliates as Shareholder
Servicing Agents and sub-administrator are not underwriting and are consistent
with the Glass-Steagall Act and other relevant federal and state laws. However,
there is no controlling precedent regarding the performance of the combination
of investment advisory, shareholder servicing and sub-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 Adviser, sub-administrator or
a Shareholder Servicing Agent, the Funds or Portfolios 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.
ADMINISTRATORS
Pursuant to Administrative Services Agreements (the "Administrative
Services Agreements"), CFBDS provides the Trust and U.S. Treasury Reserves
Portfolio, and SFG provides Cash Reserves Portfolio, with general office
facilities, and CFBDS supervises the overall administration of the Trust and
U.S. Treasury Reserves Portfolio and SFG supervises the overall administration
of Cash Reserves Portfolio, including, among other responsibilities, the
negotiation of contracts and fees with, and the monitoring of performance and
billings of, the independent contractors and agents of the Trust and the
Portfolios; the preparation and filing of all documents required for compliance
by the Trust and the Portfolios with applicable laws and regulations; and
arranging for the maintenance of books and records of the Trust and the
Portfolios. CFBDS and SFG provide persons satisfactory to the Board of Trustees
of the Trust and the Portfolios to serve as Trustees and officers of the Trust
and the Portfolios. Such Trustees and officers may be directors, officers or
employees of CFBDS, SFG or their affiliates.
For these services, the Administrators receive fees accrued daily and paid
monthly of 0.35% of the average daily net assets of each Fund and 0.05% of the
assets of each Portfolio, in each case on an annualized basis for the Fund's or
the Portfolio's then-current fiscal year. However, each of the Administrators
may voluntarily agree to waive a portion of the fees payable to it.
LIQUID RESERVES: For the fiscal years ended August 31, 1996, 1997 and
1998, the fees paid to CFBDS from the Fund under the Administrative Services
Agreement, after waivers, were $436,506, $571,767 and $894,835, respectively.
For the fiscal years ended August 31, 1996, 1997 and 1998, all fees payable to
SFG under the Administrative Services Agreement with Cash Reserves Portfolio
were voluntarily waived.
U.S. TREASURY RESERVES: For the fiscal years ended August 31, 1996, 1997
and 1998, the fees paid to CFBDS from U.S. Treasury Reserves under the
Administrative Services Agreement, after waivers, were $476,435, $468,960 and
$575,894, respectively. For the fiscal years ended August 31, 1996, 1997 and
1998, the fees payable to CFBDS under the Administrative Services Agreement with
U.S. Treasury Reserves Portfolio were voluntarily waived.
By Agreement, the Trust acknowledges that the name "CitiFunds" is the
property of Citigroup Inc. and provides that if Citibank ceases to serve as the
Adviser of the Trust, the Trust will change its name so as to delete the word
CitiFunds. The Agreement with the Trust also provides that Citibank may permit
other investment companies in addition to the Trust to use the word "CitiFunds"
in their names.
The Administrative Services Agreement with the Trust continues in effect
as to a Fund if such continuance is specifically approved at least annually by
the Trust's Board of Trustees or by a vote of a majority of the outstanding
voting securities of such Fund and, in either case, by a majority of the
Trustees of the Trust who are not interested parties of the Trust or CFBDS. The
Administrative Services Agreement with the Trust terminates automatically if it
is assigned and may be terminated as to a Fund by the Trust without penalty by
vote of a majority of the outstanding voting securities of the Fund or by either
party on not more than 60 days' nor less than 30 days' written notice. The
Administrative Services Agreement with the Trust also provides that neither
CFBDS nor its personnel shall be liable for any error of judgment or mistake of
law or for any act or omission in the administration or management of the Trust,
except for willful misfeasance, bad faith or gross negligence in the performance
of its or their duties or by reason of reckless disregard of its or their
obligations and duties under the Administrative Services Agreement.
CFBDS has agreed to reimburse the Funds for their operating expenses
(exclusive of interest, taxes, brokerage, and extraordinary expenses) which in
any year exceed the limits prescribed by any state in which the Funds' shares
are qualified for sale. The expenses incurred by the Funds for distribution
purposes pursuant to the Trust's Distribution Plans are included within such
operating expenses only to the extent required by any state in which the Funds'
shares are qualified for sale. The Trust may elect not to qualify the Funds'
shares for sale in every state. The Trust believes that currently the most
restrictive expense ratio limitation imposed by any state is 2 1/2% of the
first $30 million of a Fund's average net assets for its then-current fiscal
year, 2% of the next $70 million of such assets, and 1 1/2% of such assets in
excess of $100 million. For the purpose of this obligation to reimburse
expenses, the Funds' annual expenses are estimated and accrued daily, and any
appropriate estimated payments will be made by CFBDS. Subject to the obligation
of CFBDS to reimburse the Funds for their excess expenses as described above,
the Trust has, under its Administrative Services Agreement, confirmed its
obligation for payment of all other expenses of the Funds.
The Administrative Services Agreements with the Portfolios provide that
CFBDS or SFG, as the case may be, may render administrative services to others.
The Administrative Services Agreement with each of the Portfolios terminates
automatically if it is assigned and may be terminated without penalty by a vote
of a majority of the outstanding voting securities of the Portfolio or by either
party on not more than 60 days' nor less than 30 days' written notice. The
Administrative Services Agreement with each of the Portfolios also provides that
neither CFBDS or SFG, as the case may be, nor its personnel shall be liable for
any error of judgment or mistake of law or for any act or omission in the
administration or management of the Portfolio, except for willful misfeasance,
bad faith or gross negligence in the performance of its or their duties or by
reason of reckless disregard of its or their obligations and duties under the
Administrative Services Agreement.
CFBDS and SFG are wholly-owned subsidiaries of Signature Financial Group,
Inc.
Pursuant to Sub-Administrative Services Agreements (the "Sub-
Administrative Agreements"), Citibank performs such sub-administrative duties
for the Trust and the Portfolios as are from time to time agreed upon by
Citibank and, as the case may be, CFBDS or SFG. Citibank's sub-administrative
duties may include providing equipment and clerical personnel necessary for
maintaining the organization of the Trust and the Portfolios, participation in
preparation of documents required for compliance by the Trust and the Portfolios
with applicable laws and regulations, preparation of certain documents in
connection with meetings of Trustees and shareholders of the Trust and
Portfolios, and other functions which would otherwise be performed by CFBDS as
set forth above. For performing such sub-administrative services, Citibank
receives such compensation as is from time to time agreed upon by Citibank and,
as the case may be, CFBDS or SFG not in excess of the amount paid to CFBDS or
SFG for its services under the applicable Administrative Services Agreement. All
such compensation is paid by CFBDS or SFG, as the case may be.
DISTRIBUTOR
The Trust has adopted a Distribution Plan (the "Distribution Plan") in
accordance with Rule 12b-1 under the 1940 Act after having concluded that there
is a reasonable likelihood that the Distribution Plan will benefit the Funds and
their shareholders. The Distribution Plan provides that the Distributor receives
a fee from each Fund at an annual rate not to exceed 0.10% of the Fund's average
daily net assets in anticipation of, or as reimbursement for, expenses incurred
in connection with the sale of shares of the Fund, such as advertising expenses
and the expenses of printing (excluding typesetting) and distributing
prospectuses and reports used for sales purposes, expenses of preparing and
printing sales literature and other distribution related expenses, including,
but not limited to, employee salaries, bonuses and other overhead expenses.
The Distribution Plan continues in effect if such continuance is
specifically approved at least annually by a vote of both a majority of the
Trust's Trustees and a majority of the Trust's Trustees who are not "interested
persons" of the Trust and who have no direct or indirect financial interest in
the operation of the Distribution Plan or in any agreement related to such Plan
("Qualified Trustees"). The Distribution Plan requires that at least quarterly
the Trust and the Distributor provide to the Board of Trustees and the Board of
Trustees review a written report of the amounts expended (and the purposes
therefor) under the Distribution Plan. The Distribution Plan further provides
that the selection and nomination of the Trust's Qualified Trustees is committed
to the discretion of the Trust's disinterested Trustees then in office. The
Distribution Plan may be terminated with respect to the applicable Fund at any
time by a vote of a majority of the Trust's Qualified Trustees or by a vote of a
majority of the outstanding voting securities of that Fund. The Distribution
Plan may not be amended to increase materially the amount of the Funds'
permitted expenses thereunder without the approval of a majority of the
outstanding voting securities of the applicable Fund and may not be materially
amended in any case without a vote of the majority of both the Trust's Trustees
and the Trust's Qualified Trustees. The Distributor will preserve copies of any
plan, agreement or report made pursuant to the Distribution Plan for a period of
not less than six years from the date of the Distribution Plan, and for the
first two years the Distributor will preserve such copies in an easily
accessible place.
As contemplated by the Distribution Plan, CFBDS acts as the agent of the
Funds in connection with the offering of shares of the Funds pursuant to a
Distribution Agreement (the "Distribution Agreement"). After the prospectus and
periodic reports have been prepared, set in type and mailed to existing
shareholders, the Distributor pays for the printing and distribution of copies
of the prospectuses and periodic reports which are used in connection with the
offering of shares of the Funds to prospective investors. The Prospectus
contains a description of fees payable to the Distributor under the Distribution
Agreement. During the period they are in effect, the Distribution Plan and
Distribution Agreement obligate the applicable Funds to pay distribution fees to
CFBDS as compensation for its distribution activities, not as reimbursement for
specific expenses incurred. Thus, even if CFBDS's expenses exceed its
distribution fees for any Fund, the Fund will not be obligated to pay more than
those fees and, if CFBDS's expenses are less than such fees, it will retain its
full fees and realize a profit. Each Fund will pay the distribution fees to
CFBDS until either its Distribution Plan or Distribution Agreement is terminated
or not renewed. In that event, CFBDS's expenses in excess of distribution fees
received or accrued through the termination date will be CFBDS's sole
responsibility and not obligations of the Fund.
LIQUID RESERVES: For the fiscal years ended August 31, 1996 and 1997 the
fees paid to the Distributor from Liquid Reserves under the Distribution
Agreement, after waivers, were $160,755 and $50,263, respectively. For the
fiscal year ended August 31, 1998, all fees payable to the Distributor from
Liquid Reserves under the Distribution Agreement were voluntarily waived.
U.S. TREASURY RESERVES: For the fiscal years ended August 31, 1996 and
1997 the fees paid from U.S. Treasury Reserves to the Distributor under the
Distribution Agreement, after waivers, were $75,602 and $33,523, respectively.
For the fiscal year ended August 31, 1998, all fees payable from U.S. Treasury
Reserves to the distributor under the Distribution Agreement were voluntarily
waived.
SHAREHOLDER SERVICING AGENTS, TRANSFER AGENT AND CUSTODIAN
The Trust has adopted an Administrative Services Plan (the "Administrative
Plan") which provides that the Trust may obtain the services of an
administrator, a transfer agent, a custodian and one or more Shareholder
Servicing Agents, and may enter into agreements providing for the payment of
fees for such services. Under the Administrative Plan, the aggregate of the fee
paid to the Administrator from each Fund and the fees paid to the Shareholder
Servicing Agents from each Fund may not exceed 0.45% of the applicable Fund's
average daily net assets on an annualized basis for the Fund's then-current
fiscal year. The Administrative Plan continues in effect if such continuance is
specifically approved at least annually by a vote of both a majority of the
Trust's Trustees and a majority of the Trust's Trustees who are not "interested
persons" of the Trust and who have no direct or indirect financial interest in
the operation of the Administrative Plan or in any agreement related to such
Plan ("Qualified Trustees"). The Administrative Plan requires that the Trust
provide to the Trust's Board of Trustees and the Trust's Board of Trustees
review, at least quarterly, a written report of the amounts expended (and the
purposes therefor) under the Administrative Plan. The Administrative Plan may be
terminated at any time with respect to a Fund by a vote of a majority of the
Trust's Qualified Trustees or by a vote of a majority of the outstanding voting
securities of the Fund. The Administrative Plan may not be amended to increase
materially the amount of permitted expenses thereunder without the approval of a
majority of the outstanding voting securities of a Fund and may not be
materially amended in any case without a vote of the majority of both the
Trust's Trustees and the Trust's Qualified Trustees.
The Trust has entered into a shareholder servicing agreement (a "Servicing
Agreement") 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 services
provided under each Servicing Agreement, each Shareholder Servicing Agent
receives fees from each Fund at an annual rate of 0.10% 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. Some Shareholder
Servicing Agents may impose certain conditions on their customers in addition to
or different from those imposed by the Funds, such as requiring a minimum
initial investment or charging their customers a direct fee for their services.
Each Shareholder Servicing Agent has agreed to transmit to its customers who are
shareholders of a Fund appropriate prior written disclosure of any fees that it
may charge them directly and to provide written notice at least 30 days prior to
imposition of any transaction fees. For the fiscal years ended August 31, 1996,
1997 and 1998, aggregate fees paid from Liquid Reserves to Shareholder Servicing
Agents, after waivers, were $351,340, $365,697 and $511,556, respectively. For
the fiscal years ended August 31, 1996, 1997 and 1998, the aggregate fees paid
from U.S. Treasury Reserves to Shareholder Servicing Agents under the Servicing
Agreements, after waivers, were $269,240, $232,345 and $276,404, respectively.
The Trust and each Portfolio has entered into a Transfer Agency and
Service Agreement and a Custodian Agreement with State Street Bank and Trust
Company ("State Street") pursuant to which State Street (or its affiliate State
Street Canada, Inc.) acts as transfer agent and custodian and performs fund
accounting services. State Street (or its affiliate State Street Canada, Inc.)
calculates the daily net asset value for the Funds and the Portfolios.
Securities held for a Fund or Portfolio may be held by a sub-custodian bank
approved by the Trust's or Portfolio's Trustees.
The Portfolios have also adopted Administrative Services Plans (the
"Portfolio Administrative Plans") which provide that the Portfolios may obtain
the services of an administrator, a transfer agent and a custodian, and may
enter into agreements providing for the payment of fees for such services. Under
the Portfolio Administrative Plans, the administrative services fee payable to
either CFBDS or SFG, as the case may be, may not exceed 0.05% of a Portfolio's
average daily net assets on an annualized basis for its then-current fiscal
year. Each Portfolio Administrative Plan continues in effect if such continuance
is specifically approved at least annually by a vote of both a majority of the
applicable Portfolio's Trustees and a majority of the Portfolio's Trustees who
are not "interested persons" of the Portfolio and who have no direct or indirect
financial interest in the operation of the Portfolio Administrative Plan or in
any agreement related to such Plan ("Qualified Trustees"). Each Portfolio
Administrative Plan requires that the applicable Portfolio provide to its Board
of Trustees and the Board of Trustees review, at least quarterly, a written
report of the amounts expended (and the purposes therefor) under the Portfolio
Administrative Plan. Each Portfolio Administrative Plan may be terminated at any
time by a vote of a majority of the Portfolio's Qualified Trustees or by a vote
of a majority of the outstanding voting securities of the applicable Portfolio.
Neither Portfolio Administrative Plan may be amended to increase materially the
amount of permitted expenses thereunder without the approval of a majority of
the outstanding voting securities of the applicable Portfolio and may not be
materially amended in any case without a vote of the majority of both the
Portfolio's Trustees and the Portfolio's Qualified Trustees.
6. PORTFOLIO TRANSACTIONS
The Portfolios' purchases and sales of portfolio securities usually are
principal transactions. Portfolio securities are normally purchased directly
from the issuer or from an underwriter or market maker for the securities. There
usually are no brokerage commissions paid for such purchases. The Portfolios do
not anticipate paying brokerage commissions. Any transaction for which a
Portfolio pays a brokerage commission will be effected at the best price and
execution available. Purchases from underwriters of portfolio securities include
a commission or concession paid by the issuer to the underwriter, and purchases
from dealers serving as market makers include the spread between the bid and
asked price.
Allocation of transactions, including their frequency, to various dealers
is determined by the Adviser in its best judgment and in a manner deemed to be
in the best interest of investors in the applicable Portfolio rather than by any
formula. The primary consideration is prompt execution of orders in an effective
manner at the most favorable price.
Investment decisions for each Portfolio will be made independently from
those for any other account, series or investment company that is or may in the
future become managed by the Adviser or its affiliates. If, however, a Portfolio
and other investment companies, series or accounts managed by the Adviser are
contemporaneously engaged in the purchase or sale of the same security, the
transactions may be averaged as to price and allocated equitably to each
account. In some cases, this policy might adversely affect the price paid or
received by the Portfolio or the size of the position obtainable for the
Portfolio. In addition, when purchases or sales of the same security for a
Portfolio and for other investment companies or series managed by the Adviser
occur contemporaneously, the purchase or sale orders may be aggregated in order
to obtain any price advantages available to large denomination purchases or
sales.
Portfolio transactions may be executed with the Adviser, or with any
affiliate of the Adviser, acting either as principal or as broker, subject to
applicable law. No commissions on portfolio transactions were paid by any
Portfolio during the fiscal year ended August 31, 1998 to the Adviser or any
affiliate of the Adviser.
7. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Trust's Declaration of Trust permits the Trust's Board of Trustees to
issue an unlimited number of full and fractional shares of beneficial interest
($0.00001 par value) of each series and to divide or combine the shares of any
series into a greater or lesser number of shares of that series without thereby
changing the proportionate beneficial interests in that series. Currently, the
Funds are the only two series of shares of the Trust. Each share represents an
equal proportionate interest in a Fund with each other share. Upon liquidation
or dissolution of a Fund, the Fund's shareholders are entitled to share pro rata
in the Fund's net assets available for distribution to its shareholders. The
Trust reserves the right to create and issue additional series of shares. Shares
of each series participate equally in the earnings, dividends and distribution
of net assets of the particular series upon the liquidation or dissolution of
the series. Shares of each series are entitled to vote separately to approve
advisory agreements or changes in investment policy, but shares of all series
may vote together in the election or selection of Trustees and accountants for
the Trust. In matters affecting only a particular series, only shares of that
series are entitled to vote.
Shareholders are entitled to one vote for each share held on matters on
which they are entitled to vote. Shareholders in the Trust do not have
cumulative voting rights, and shareholders owning more than 50% of the
outstanding shares of the Trust may elect all of the Trustees of the Trust if
they choose to do so and in such event the other shareholders in the Trust would
not be able to elect any Trustee. The Trust is not required and has no present
intention of holding annual meetings of shareholders but the Trust will hold
special meetings of a Fund's shareholders when in the judgment of the Trust's
Trustees it is necessary or desirable to submit matters for a shareholder vote.
Shareholders have under certain circumstances (e.g., upon application and
submission of certain specified documents to the Trustees by a specified number
of shareholders) the right to communicate with other shareholders in connection
with requesting a meeting of shareholders for the purpose of removing one or
more Trustees. Shareholders also have the right to remove one or more Trustees
without a meeting by a declaration in writing by a specified number of
shareholders. No material amendment may be made to the Trust's Declaration of
Trust without the affirmative vote of the holders of a majority of its
outstanding shares.
The Trust's Declaration of Trust provides that, at any meeting of
shareholders of the Trust or of any series of the Trust, 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 it is the holder of
record. Shares have no preference, pre-emptive, conversion or similar rights.
Shares, when issued, are fully paid and non-assessable, except as set forth
below.
The Trust may enter into a merger or consolidation, or sell all or
substantially all of its assets (or all or substantially all of the assets
belonging to any series of the Trust), if approved by the vote of the holders of
two-thirds of the Trust's outstanding shares voting as a single class, or of the
affected series of the Trust, as the case may be, except that if the Trustees of
the Trust recommend such sale of assets, merger or consolidation, the approval
by vote of the holders of a majority of the Trust's or the affected series'
outstanding shares would be sufficient. The Trust or any series of the Trust, as
the case may be, may be terminated (i) by a vote of a majority of the
outstanding voting securities of the Trust or the affected series or (ii) by the
Trustees by written notice to the shareholders of the Trust or the affected
series. If not so terminated, the Trust will continue indefinitely.
Share certificates will not be issued.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations and liabilities. However, the Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the Trust
and provides for indemnification and reimbursement of expenses out of Trust
property for any shareholder held personally liable for the obligations of the
Trust. The Declaration of Trust also provides that the Trust may maintain
appropriate insurance (e.g., fidelity bonding and errors and omissions
insurance) for the protection of the Trust, its shareholders, Trustees,
officers, employees and agents covering possible tort and other liabilities.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which both inadequate
insurance existed and the Trust itself was unable to meet its obligations.
The Trust's Declaration of Trust further provides that obligations of the
Trust are not binding upon the Trustees individually but only upon the property
of the Trust and that the Trustees will not be liable for any action or failure
to act, but nothing in the Declaration of Trust protects a Trustee against any
liability to which he or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his or her office.
Each Portfolio is organized as a trust under the laws of the State of New
York. Each Portfolio's Declaration of Trust provides that investors in the
Portfolio (e.g., other investment companies (including the corresponding Fund),
insurance company separate accounts and common and commingled trust funds) are
each liable for all obligations of the Portfolio. However, the risk of a Fund
incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance existed and the applicable
Portfolio itself was unable to meet its obligations. It is not expected that the
liabilities of either Portfolio would ever exceed its assets.
Each investor in a Portfolio, including the corresponding Fund, may add to
or reduce its investment in the Portfolio on each business day. At 3:00 p.m.,
Eastern time, in the case of Cash Reserves Portfolio, and 12:00 noon, Eastern
time, in the case of U.S. Treasury Reserves Portfolio, on each such business
day, the value of each investor's interest in the Portfolio is determined by
multiplying the net asset value of the Portfolio by the percentage representing
that investor's share of the aggregate beneficial interests in the Portfolio
effective for that day. Any additions or withdrawals, which are to be effected
on that day, are then effected. The investor's percentage of the aggregate
beneficial interests in the Portfolio is then re-computed as the percentage
equal to the fraction (i) the numerator of which is the value of such investor's
investment in the Portfolio as of 3:00 p.m., Eastern time, for Cash Reserves
Portfolio or 12:00 noon, Eastern time, for U.S. Treasury Reserves Portfolio, on
such day plus or minus, as the case may be, the amount of any additions to or
withdrawals from the investor's investment in the Portfolio effected on such
day, and (ii) the denominator of which is the aggregate net asset value of the
Portfolio as of 3:00 p.m., Eastern time, for Cash Reserves Portfolio or 12:00
noon, Eastern time, for U.S. Treasury Reserves Portfolio, on such day plus or
minus, as the case may be, the amount of the net additions to or withdrawals
from the aggregate investments in the Portfolio by all investors in the
Portfolio. The percentage so determined is then applied to determine the value
of the investor's interest in the Portfolio as of 3:00 p.m., Eastern time, for
Cash Reserves Portfolio or 12:00 noon, Eastern time, for U.S. Treasury Reserves
Portfolio, on the following business day of the Portfolio.
8. CERTAIN ADDITIONAL TAX MATTERS
Each of the Funds has elected to be treated and intends to qualify each
year as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), by meeting all applicable
requirements of Subchapter M, including requirements as to the nature of the
Fund's gross income, the amount of Fund distributions and the composition of the
Fund's portfolio assets. Provided all such requirements are met and all of a
Fund's net investment income and realized capital gains are distributed to
shareholders in accordance with the timing requirements imposed by the Code, no
federal income or excise taxes generally will be required to be paid by the
Fund. If a Fund should fail to qualify as a regulated investment company for any
year, the Fund would incur a regular corporate federal income tax upon its
taxable income and Fund distributions would generally be taxable as ordinary
dividend income to shareholders. Each of the Portfolios believes that it will
not be required to pay any federal income or excise taxes.
Investment income received by Liquid Reserves from non-U.S. investments
may be subject to foreign income taxes withheld at the source; Liquid Reserves
does not expect to be able to pass through to shareholders any foreign tax
credits or deductions with respect to those foreign taxes. The United States has
entered into tax treaties with many foreign countries that may entitle Liquid
Reserves to a reduced rate of tax or an exemption from tax on these investments.
It is not possible to determine Liquid Reserves' effective rate of foreign tax
in advance since that rate depends upon the proportion of the Cash Reserves
Portfolio's assets ultimately invested within various countries.
Because each Fund expects to earn primarily interest income, it is
expected that no Fund distributions will qualify for the dividends received
deduction for corporations.
9. INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS
PricewaterhouseCoopers LLP and PricewaterhouseCoopers are the independent
and chartered accountants for Liquid Reserves and Cash Reserves Portfolio,
providing audit services and assistance and consultation with respect to the
preparation of filings with the SEC. Deloitte & Touche LLP are the independent
accountants for U.S. Treasury Reserves and U.S. Treasury Reserves Portfolio,
providing audit services and assistance and consultation with respect to the
preparation of filings with the SEC.
Financial statements to be added by amendment.
<PAGE>
SHAREHOLDER SERVICING AGENTS
FOR PRIVATE BANKING CLIENTS:
Citibank, N.A.
The Citibank Private Bank
153 East 53rd Street, New York, NY 10043
Call Your Citibank Private Banking Account Officer,
Registered Representative or (212) 559-5959
FOR CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY 10043
(212) 559-7117
FOR NORTH AMERICAN INVESTOR SERVICES CLIENTS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
Call Your Account Manager or (212) 657-9100
<PAGE>
CITIFUNDS(SM) PREMIUM LIQUID RESERVES
CITIFUNDS(SM) PREMIUM U.S. TREASURY RESERVES
TRUSTEES AND OFFICERS
Philip W. Coolidge, President*
Mark T. Finn
Riley C. Gilley
William S. Woods, Jr.
SECRETARY
Linda T. Gibson*
TREASURER
John R. Elder*
*Affiliated Person of Administrator and Distributor
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043
ADMINISTRATOR AND DISTRIBUTOR
CFBDS, Inc.
21 Milk Street, Boston, MA 02109 (617) 423-1679
TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
AUDITORS
(CITIFUNDS PREMIUM LIQUID RESERVES)
PricewaterhouseCoopers LLP
160 Federal Street,
Boston, MA 02110
(CITIFUNDS PREMIUM U.S. TREASURY RESERVES)
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110
LEGAL COUNSEL
Bingham Dana LLP
150 Federal Street, Boston, MA 02110
- -------------------------------------------------------------------------------
SHAREHOLDER SERVICING AGENTS
(See Inside of Cover)
<PAGE>
PART C
Item 23. Exhibits.
* 1(a) Declaration of Trust of the Registrant
* and filed 1(b) Amendments to Declaration of Trust of the Registrant
herewith
* 2(a) Amended and Restated By-Laws of the Registrant
*, ** 2(b) Amendments to Amended and Restated By-Laws of the
Registrant
* 5 Distribution Agreement between the Registrant and
CFBDS, Inc. ("CFBDS"), as distributor
* 7 Custodian Contract between the Registrant and State
Street Bank and Trust Company ("State Street"), as
custodian
* 8(a) Amended and Restated Administrative Services Plan of
the Registrant
* 8(b) Administrative Services Agreement between the
Registrant and CFBDS, as administrator
* 8(c) Sub-Administrative Services Agreement between
Citibank, N.A. and CFBDS
* 8(d)(i) Form of Shareholder Servicing Agreement between the
Registrant and Citibank, N.A., as shareholder
servicing agent
* 8(d)(ii) Form of Shareholder Servicing Agreement between the
Registrant and a federal savings bank, as shareholder
servicing agent
* 8(d)(iii) Form of Shareholder Servicing Agreement between the
Registrant and CFBDS, as shareholder servicing agent
* 8(e) Transfer Agency and Service Agreement between the
Registrant and State Street, as transfer agent
* 8(f) Amended and Restated Exchange Privilege Agreement
between the Registrant, certain other investment
companies and CFBDS, as distributor
* 9 Opinion and consent of counsel
* 13 Amended and Restated Distribution Plan of the
Registrant
25(a) Powers of Attorney for the Registrant
25(b) Powers of Attorney for U.S. Treasury Reserves
Portfolio
25(c) Powers of Attorney for Cash Reserves Portfolio
- ---------------------
* Incorporated herein by reference to Post-Effective Amendment No. 8 to the
Registrant's Registration Statement on Form N-1A (File No. 33-38848) as
filed with the Securities and Exchange Commission on August 29, 1996 and
Post-Effective Amendment No. 7 to the Registrant's Registration Statement
on Form N-1A (File No. 33-28844) as filed with the Securities and
Exchange Commission on August 29, 1996.
** Incorporated herein by reference to Post-Effective Amendment No. 10 to
the Registrant's Registration Statement on Form N-1A (File No. 33-38848)
as filed with the Securities and Exchange Commission on December 23, 1997
and Post-Effective Amendment No. 9 to the Registrant's Registration
Statement on Form N-1A (File No. 33-28844) as filed with the Securities
and Exchange Commission on December 23, 1997.
Item 24. Persons Controlled by or under Common Control with Registrant.
Not applicable.
Item 25. Indemnification.
Reference is hereby made to (a) Article V of the Registrant's
Declaration of Trust, incorporated by reference herein as an Exhibit to the
Registrant's Registration Statement on Form N-1A; (b) Section 4 of the
Distribution Agreement between the Registrant and CFBDS, incorporated by
reference herein as an Exhibit to the Registrant's Registration Statement on
Form N-1A; and (c) the undertaking of the Registrant regarding indemnification
set forth in its Registration Statement on Form N-1A.
The Trustees and officers of the Registrant and the personnel of the
Registrant's administrator are insured under an errors and omissions liability
insurance policy. The Registrant and its officers are also insured under the
fidelity bond required by Rule 17g-1 under the Investment Company Act of 1940.
Item 26. Business and Other Connections of Investment Adviser.
Citibank, N.A. ("Citibank") is a commercial bank offering a wide range
of banking and investment services to customers across the United States and
around the world. Citibank is a wholly-owned subsidiary of Citigroup Inc., a
registered bank holding company. Citibank also serves as investment adviser to
the following registered investment companies (or series thereof): Asset
Allocation Portfolios (Large Cap Value Portfolio, Small Cap Value Portfolio,
International Portfolio, Foreign Bond Portfolio, Intermediate Income Portfolio
and Short-Term Portfolio), The Premium Portfolios (Growth & Income Portfolio,
Balanced Portfolio, Large Cap Growth Portfolio, International Equity Portfolio,
Government Income Portfolio and Small Cap Growth Portfolio), Tax Free Reserves
Portfolio, U.S. Treasury Reserves Portfolio, Cash Reserves Portfolio,
CitiFunds(SM) Multi-State Tax Free Trust (CitiFunds(SM) New York Tax Free
Reserves, CitiFunds(SM) Connecticut Tax Free Reserves and CitiFunds(SM)
California Tax Free Reserves), CitiFunds(SM) Tax Free Income Trust
(CitiFunds(SM) National Tax Free Income Portfolio, CitiFunds(SM) New York Tax
Free Income Portfolio and CitiFundsSM California Tax Free Income Portfolio),
CitiFunds(SM) Institutional Trust (CitiFunds(SM) Institutional Cash Reserves)
and Variable Annuity Portfolios (CitiSelect(R) VIP Folio 200, CitiSelect(R) VIP
Folio 300, CitiSelect(R) VIP Folio 400, CitiSelect(R) VIP Folio 500 and
CitiFunds(SM) Small Cap Growth VIP Portfolio). Citibank and its affiliates
manage assets in excess of $88 billion worldwide. The principal place of
business of Citibank is located at 399 Park Avenue, New York, New York 10043.
John S. Reed is the Chairman and a Director of Citibank. Victor J.
Menezes is the President and a Director of Citibank. William R. Rhodes and H.
Onno Ruding are Vice Chairmen and Directors of Citibank. The other Directors of
Citibank are Paul J. Collins, Vice Chairman of Citigroup Inc. and Robert I.
Lipp, Chairman and Chief Executive Officer of The Travelers Insurance Group Inc.
and of Travelers Property Casualty Corp.
Each of the individuals named above is also a Director of Citigroup
Inc. In addition, the following persons have the affiliations indicated:
Paul J. Collins Director, Kimberly-Clark Corporation
Robert I. Lipp Chairman, Chief Executive Officer and President, TAP
John S. Reed Director, Monsanto Company
Director, Philip Morris CompaniesIncorporated
Stockholder, Tampa Tank & Welding, Inc.
William R. Rhodes Director, Private Export Funding Corporation
H. Onno Ruding Supervisory Director, Amsterdamsch Trustees Cantoor B.V.
Director, Pechiney S.A.
Advisory Director, Unilever NV and Unilever PLC
Director, Corning Incorporated
Item 27. Principal Underwriters.
(a) CFBDS, the Registrant's Distributor, is also the distributor for
CitiFunds(SM) International Growth & Income Portfolio, CitiFunds(SM)
International Growth Portfolio, CitiFunds(SM) Intermediate Income Portfolio,
CitiFunds(SM) Short-Term U.S. Government Income Portfolio, CitiFunds(SM) Large
Cap Growth Portfolio, CitiFunds(SM) Cash Reserves, CitiFunds(SM) U.S. Treasury
Reserves, CitiFunds(SM) Institutional U.S. Treasury Reserves, CitiFunds(SM)
Institutional Liquid Reserves, CitiFunds(SM) Institutional Cash Reserves,
CitiFunds(SM) Tax Free Reserves, CitiFunds(SM) Institutional Tax Free Reserves,
CitiFunds(SM) California Tax Free Reserves, CitiFunds(SM) Connecticut Tax Free
Reserves, CitiFunds(SM) New York Tax Free Reserves, CitiFunds(SM) Balanced
Portfolio, CitiFunds(SM) Small Cap Value Portfolio, CitiFunds(SM) Growth &
Income Portfolio, CitiFunds(SM) Small Cap Growth Portfolio, CitiFunds(SM)
National Tax Free Income Portfolio, CitiFunds(SM) New York Tax Free Income
Portfolio, CitiFunds(SM) California Tax Free Income Portfolio, CitiSelect(R) VIP
Folio 200, CitiSelect(R) VIP Folio 300, CitiSelect(R) VIP Folio 400,
CitiSelect(R) VIP Folio 500, CitiFunds(SM) Small Cap Growth VIP Portfolio,
CitiSelect(R) Folio 200, CitiSelect(R) Folio 300, CitiSelect(R) Folio 400, and
CitiSelect(R) Folio 500. CFBDS is also the placement agent for Large Cap Value
Portfolio, Small Cap Value Portfolio, International Portfolio, Foreign Bond
Portfolio, Intermediate Income Portfolio, Short-Term Portfolio, Growth & Income
Portfolio, Large Cap Growth Portfolio, Small Cap Growth Portfolio, International
Equity Portfolio, Balanced Portfolio, Government Income Portfolio, Tax Free
Reserves Portfolio, Cash Reserves Portfolio and U.S. Treasury Reserves
Portfolio.
(b) The information required by this Item 29 with respect to each
director and officer of CFBDS is incorporated by reference to Schedule A of Form
BD filed by CFBDS pursuant to the Securities and Exchange Act of 1934 (File No.
8-32417).
(c) Not applicable.
Item 28. Location of Accounts and Records.
The accounts and records of the Registrant are located, in whole or in
part, at the office of the Registrant and the following locations:
NAME ADDRESS
CFBDS, Inc. 21 Milk Street, 5th Floor
(administrator and distributor) Boston, MA 02109
State Street Bank and Trust Company 1776 Heritage Drive
(transfer agent and custodian) North Quincy, MA 02171
Citibank, N.A. 153 East 53rd Street
(investment adviser) New York, NY 10043
SHAREHOLDER SERVICING AGENTS
Citibank, N.A. - The Citibank Private Bank 153 East 53rd Street
New York, NY 10043
Citibank, N.A. - Citibank
Global Asset Management 153 East 53rd Street
New York, NY 10043
Citibank, N.A. - North American
Investor Services 111 Wall Street
New York, NY 10094
CFBDS, Inc. 21 Milk Street, 5th Floor
Boston, MA 02109
Item 29. Management Services.
Not applicable.
Item 30. Undertakings.
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment
Company Act, the Registrant has duly caused this Post-Effective Amendment to the
Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston and Commonwealth
of Massachusetts on the 14th day of October, 1998.
CITIFUNDS PREMIUM TRUST
By: Philip W. Coolidge
----------------------
Philip W. Coolidge
President
Pursuant to the requirements of the Securities Act, this Post-Effective
Amendment to the Registration Statement on Form N-1A has been signed below by
the following persons in the capacities indicated below on October 14, 1998.
Signature Title
Philip W. Coolidge President, Principal Executive Officer
---------------------- and Trustee
Philip W. Coolidge
John R. Elder Principal Financial Officer and Principal
---------------------- Accounting Officer
John R. Elder
Mark T. Finn* Trustee
----------------------
Mark T. Finn
Riley C. Gilley* Trustee
----------------------
Riley C. Gilley
William S. Woods, Jr.* Trustee
----------------------
William S. Woods, Jr.
*By: Philip W. Coolidge
----------------------
Philip W. Coolidge
Executed by Philip W. Coolidge
on behalf of those indicated
pursuant to Powers of Attorney.
<PAGE>
SIGNATURES
Cash Reserves Portfolio has duly caused this Post-Effective Amendment
to the Registration Statement on Form N-1A of CitiFunds Premium Trust to be
signed on its behalf by the undersigned, thereunto duly authorized, in Grand
Cayman, Cayman Islands on the 14th day of October, 1998.
CASH RESERVES PORTFOLIO
By: Tamie Ebanks-Cunningham
----------------------
Tamie Ebanks-Cunningham
Assistant Secretary
This Post-Effective Amendment to the Registration Statement on Form
N-1A of CitiFunds Premium Trust has been signed below by the following persons
in the capacities indicated below on October 14, 1998.
Signature Title
Philip W. Coolidge* President, Principal Executive Officer
---------------------- and Trustee
Philip W. Coolidge
John R. Elder* Principal Financial Officer and Principal
---------------------- Accounting Officer
John R. Elder
Elliott J. Berv* Trustee
----------------------
Elliott J. Berv
Walter E. Robb, III* Trustee
----------------------
Walter E. Robb, III
*By: Tamie Ebanks-Cunningham
----------------------
Tamie Ebanks-Cunningham
Executed by Tamie Ebanks-Cunningham
on behalf of those indicated pursuant
to Powers of Attorney.
<PAGE>
SIGNATURES
U.S. Treasury Reserves Portfolio has duly caused this Post-Effective
Amendment to the Registration Statement on Form N-1A of CitiFunds Premium Trust
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Boston and Commonwealth of Massachusetts on the 14th day of October,
1998.
U.S. TREASURY RESERVES PORTFOLIO
By: Philip W. Coolidge
----------------------
Philip W. Coolidge
President
This Post-Effective Amendment to the Registration Statement on Form
N-1A of CitiFunds Premium Trust has been signed below by the following persons
in the capacities indicated below on October 14, 1998.
Signature Title
Philip W. Coolidge President, Principal Executive Officer
---------------------- and Trustee
Philip W. Coolidge
John R. Elder Principal Financial Officer and Principal
---------------------- Accounting Officer
John R. Elder
Elliott J. Berv* Trustee
----------------------
Elliott J. Berv
Riley C. Gilley* Trustee
----------------------
Riley C. Gilley
Walter E. Robb, III* Trustee
----------------------
Walter E. Robb, III
*By: Philip W. Coolidge
----------------------
Philip W. Coolidge
Executed by Philip W. Coolidg
on behalf of those indicated
pursuant to Powers of Attorney.
<PAGE>
EXHIBIT INDEX
Exhibit
No.: Description:
------- -------------
1(b) Amendments to Declaration of Trust of the Registrant
25(a) Powers of Attorney for the Registrant
25(b) Powers of Attorney for U.S. Treasury Reserves Portfolio
25(c) Powers of Attorney for Cash Reserves Portfolio
<PAGE>
Exhibit 1(b)
LANDMARK PREMIUM FUNDS
AMENDMENT TO
DECLARATION OF TRUST
The undersigned, constituting a majority of the Trustees of Landmark
Premium Funds (the "Trust"), a business trust organized under the laws of the
Commonwealth of Massachusetts, pursuant to an Amended and Restated Declaration
of Trust dated December 12, 1989, as further amended (the "Declaration"), do
hereby amend Section 1.1 of the Declaration by deleting Section 1.1 in its
entirety and replacing it with the following, effective on such date as any
officer of the Trust may select by written notice to the Trust:
Section 1.1. Name. The name of the trust created hereby is
"CitiFunds Premium Trust."
IN WITNESS WHEREOF, the undersigned have executed this Amendment this
14th day of November, 1997.
Philip W. Coolidge Mark T. Finn
- ------------------------------- -------------------------------
PHILIP W. COOLIDGE MARK T. FINN
As Trustee and Not Individually As Trustee and Not Individually
Riley C. Gilley William S. Woods, Jr.
- ------------------------------- -------------------------------
RILEY C. GILLEY WILLIAM S. WOODS, JR.
As Trustee and Not Individually As Trustee and Not Individually
<PAGE>
Philip W. Coolidge
President
Landmark Premium Funds
c/o Signature Financial Group Inc.
6 St. James Avenue, 9th Floor
Boston, MA 02116
I, Philip W. Coolidge, hereby certify that I am the duly elected,
qualified and acting President of Landmark Premium Funds, a Massachusetts
business trust (the "Trust"), and, pursuant to authority granted by the Board of
Trustees of the Trust at a meeting held on November 14, 1997, do hereby give
notice that the Amendment to Declaration of Trust of the Trust, as executed by
the Trustees of the Trust on November 14, 1997, shall become effective as of
January 2, 1998.
IN WITNESS WHEREOF, I have hereunto signed my name at Boston,
Massachusetts this 15th day of December, 1997.
Philip Coolidge
-----------------------------
Philip W. Coolidge, President
<PAGE>
CITIFUNDS PREMIUM TRUST
AMENDED AND RESTATED
ESTABLISHMENT AND DESIGNATION OF SERIES OF
SHARES OF BENEFICIAL INTEREST (PAR VALUE $0.00001 PER SHARE)
Pursuant to Section 6.9 of the Amended and Restated Declaration of Trust,
dated as of December 12, 1989, as further amended (the "Declaration of Trust"),
of CitiFunds Premium Trust (formerly, Landmark Premium Funds) (the "Trust"), the
undersigned, being a majority of the Trustees of the Trust, do hereby amend and
restate the Trust's existing Establishment and Designation of Series of Shares
of Beneficial Interest (par value $0.00001 per share) in order to change the
names of two series of Shares (as defined in the Declaration of Trust) which
were previously established and designated and to eliminate the establishment
and designation of three series of Shares which were previously established and
designated. No other changes to the special and relative rights of the existing
series are intended by this amendment and restatement. This amendment and
restatement shall become effective on such date as any officer of the Trust may
select by written notice to the Trust.
1. The series shall be as follows:
The series previously designated as Premium Liquid Reserves shall
be redesignated as "CitiFunds Premium Liquid Reserves."
The series previously designated as Premium U.S. Treasury Reserves
shall be redesignated as "CitiFunds Premium U.S. Treasury Reserves."
The series previously designated as Landmark Premium Tax Free
Reserves, no Shares thereof being outstanding, is hereby
eliminated.
The series previously designated as Premium Small Cap Equity Fund,
no Shares thereof being outstanding, is hereby eliminated.
The series previously designated as Premium Earnings Growth Equity
Fund, no Shares thereof being outstanding, is hereby eliminated.
2. Each series shall be authorized to invest in cash, securities,
instruments and other property as from time to time described in the Trust's
then currently effective registration statement under the Securities Act of 1933
to the extent pertaining to the offering of Shares of each series. Each Share of
each series shall be redeemable, shall be entitled to one vote or fraction
thereof in respect of a fractional share on matters on which shares of that
series shall be entitled to vote, shall represent a pro rata beneficial interest
in the assets allocated or belonging to such series, and shall be entitled to
receive its pro rata share of the net assets of such series upon liquidation of
the series, all as provided in Section 6.9 of the Declaration of Trust.
3. Shareholders of each series shall vote separately as a class on any
matter to the extent required by, and any matter shall be deemed to have been
effectively acted upon with respect to each series as provided in, Rule 18f-2,
as from time to time in effect, under the Investment Company Act of 1940, as
amended, or any successor rule, and by the Declaration of Trust.
4. The assets and liabilities of the Trust shall be allocated to each
series as set forth in Section 6.9 of the Declaration of Trust.
5. Subject to the provisions of Section 6.9 and Article IX of the
Declaration of Trust, the Trustees (including any successor Trustees) shall have
the right at any time and from time to time to reallocate assets and expenses or
to change the designation of any series now or hereafter created or otherwise to
change the special and relative rights of any such series.
IN WITNESS WHEREOF, the undersigned have executed this Establishment and
Designation of Series on separate counterparts this 14th day of November, 1997.
Philip W. Coolidge Mark T. Finn
- ------------------------------- -------------------------------
PHILIP W. COOLIDGE MARK T. FINN
As Trustee and Not Individually As Trustee and Not Individually
Riley C. Gilley William S. Woods, Jr.
- ------------------------------- -------------------------------
RILEY C. GILLEY WILLIAM S. WOODS, JR.
As Trustee and Not Individually As Trustee and Not Individually
<PAGE>
Philip W. Coolidge
President
CitiFunds Premium Trust
c/o Signature Financial Group Inc.
6 St. James Avenue, 9th Floor
Boston, MA 02116
I, Philip W. Coolidge, hereby certify that I am the duly elected, qualified
and acting President of CitiFunds Premium Trust, a Massachusetts business trust
(the "Trust"), and, pursuant to authority granted by the Board of Trustees of
the Trust at a meeting held on November 14, 1997, do hereby give notice that the
Amended and Restated Establishment and Designation of Series of Shares of
Beneficial Interest (par value $0.00001 per share) of the Trust, as executed by
the Trustees of the Trust on November 14, 1997, shall become effective as of
January 2, 1998.
IN WITNESS WHEREOF, I have hereunto signed my name at Boston, Massachusetts
this 15th day of December, 1997.
Philip Coolidge
-----------------------------
Philip W. Coolidge, President
<PAGE>
Exhibit 25(a)
CITIFUNDS PREMIUM TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by CitiFunds
Premium Trust (on behalf of each of its series now or hereinafter created) (the
"Registrant") with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and under the Investment Company Act of 1940, as
amended, and any and all other instruments which such attorneys and agents, or
any of them, deem necessary or advisable to enable the Registrant to comply with
the Securities Act of 1933, as amended, and the Investment Company Act of 1940,
as amended, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents shall
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 6th day of
February, 1998.
Riley C. Gilley
- ----------------
Riley C. Gilley
<PAGE>
CITIFUNDS PREMIUM TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by CitiFunds
Premium Trust (on behalf of each of its series now or hereinafter created) (the
"Registrant") with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and under the Investment Company Act of 1940, as
amended, and any and all other instruments which such attorneys and agents, or
any of them, deem necessary or advisable to enable the Registrant to comply with
the Securities Act of 1933, as amended, and the Investment Company Act of 1940,
as amended, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents shall
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 6th day of
February, 1998.
William S. Woods, Jr.
- ---------------------
William S. Woods, Jr.
<PAGE>
CITIFUNDS PREMIUM TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, Susan
Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them, with full
powers of substitution as his true and lawful attorneys and agents to execute in
his name and on his behalf in any and all capacities the Registration Statements
on Form N-1A, and any and all amendments thereto, filed by CitiFunds Premium
Trust (on behalf of each of its series now or hereinafter created) (the
"Registrant") with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and under the Investment Company Act of 1940, as
amended, and any and all other instruments which such attorneys and agents, or
any of them, deem necessary or advisable to enable the Registrant to comply with
the Securities Act of 1933, as amended, and the Investment Company Act of 1940,
as amended, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents shall
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 7th day of
October, 1998.
John R. Elder
- ---------------------
John R. Elder
<PAGE>
CITIFUNDS PREMIUM TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by CitiFunds
Premium Trust (on behalf of each of its series now or hereinafter created) (the
"Registrant") with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and under the Investment Company Act of 1940, as
amended, and any and all other instruments which such attorneys and agents, or
any of them, deem necessary or advisable to enable the Registrant to comply with
the Securities Act of 1933, as amended, and the Investment Company Act of 1940,
as amended, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents shall
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 6th day of
February, 1998.
Mark T. Finn
- ---------------------
Mark T. Finn
<PAGE>
CITIFUNDS PREMIUM TRUST
The undersigned hereby constitutes and appoints John R. Elder, Susan Jakuboski,
Molly S. Mugler and Linda T. Gibson, and each of them, with full powers of
substitution as his true and lawful attorneys and agents to execute in his name
and on his behalf in any and all capacities the Registration Statements on Form
N-1A, and any and all amendments thereto, filed by CitiFunds Premium Trust (on
behalf of each of its series now or hereinafter created) (the "Registrant") with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, and under the Investment Company Act of 1940, as amended, and any and
all other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrant to comply with the Securities
Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the
rules, regulations and requirements of the Securities and Exchange Commission,
and the securities or Blue Sky laws of any state or other jurisdiction; and the
undersigned hereby ratifies and confirms as his own act and deed any and all
that such attorneys and agents, or any of them, shall do or cause to be done by
virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 6th day of
February, 1998.
Philip W. Coolidge
- ---------------------
Philip W. Coolidge
<PAGE>
Exhibit 25(b)
U.S. TREASURY RESERVES PORTFOLIO
The undersigned hereby constitutes and appoints Philip W. Coolidge, Susan
Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them, with full
powers of substitution as his true and lawful attorneys and agents to execute in
his name and on his behalf in any and all capacities the Registration Statements
on Form N-1A, and any and all amendments thereto, filed by U.S. Treasury
Reserves Portfolio (the "Registrant") with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended, the
Registration Statements on Form N-1A, and any and all amendments thereto, to be
executed by the Registrant and filed by another registrant with the Securities
and Exchange Commission under the Investment Company Act of 1940, as amended, or
under the Securities Act of 1933, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Investment Company Act of 1940, as
amended, the rules, regulations and requirements of the Securities and Exchange
Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents shall
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 6th day of
February, 1998.
John R. Elder
- ------------------------
John R. Elder
At Southampton, Bermuda
<PAGE>
U.S. TREASURY RESERVES PORTFOLIO
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by U.S.
Treasury Reserves Portfolio (the "Registrant") with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended, the
Registration Statements on Form N-1A, and any and all amendments thereto, to be
executed by the Registrant and filed by another registrant with the Securities
and Exchange Commission under the Investment Company Act of 1940, as amended, or
under the Securities Act of 1933, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Investment Company Act of 1940, as
amended, the rules, regulations and requirements of the Securities and Exchange
Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents shall
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 6th day of
February, 1998.
Walter E. Robb, III
- ------------------------
Walter E. Robb, III
At Southampton, Bermuda
<PAGE>
U.S. TREASURY RESERVES PORTFOLIO
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by U.S.
Treasury Reserves Portfolio (the "Registrant") with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended, the
Registration Statements on Form N-1A, and any and all amendments thereto, to be
executed by the Registrant and filed by another registrant with the Securities
and Exchange Commission under the Investment Company Act of 1940, as amended, or
under the Securities Act of 1933, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Investment Company Act of 1940, as
amended, the rules, regulations and requirements of the Securities and Exchange
Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents shall
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 6th day of
February, 1998.
Elliott J. Berv
- ------------------------
Elliott J. Berv
At Southampton, Bermuda
<PAGE>
U.S. TREASURY RESERVES PORTFOLIO
The undersigned hereby constitutes and appoints John R. Elder, Susan Jakuboski,
Molly S. Mugler and Linda T. Gibson, and each of them, with full powers of
substitution as his true and lawful attorneys and agents to execute in his name
and on his behalf in any and all capacities the Registration Statements on Form
N-1A, and any and all amendments thereto, filed by U.S. Treasury Reserves
Portfolio (the "Registrant") with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended, the Registration Statements on
Form N-1A, and any and all amendments thereto, to be executed by the Registrant
and filed by another registrant with the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended, or under the Securities
Act of 1933, as amended, and any and all other instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Registrant
to comply with the Investment Company Act of 1940, as amended, the rules,
regulations and requirements of the Securities and Exchange Commission, and the
securities or Blue Sky laws of any state or other jurisdiction; and the
undersigned hereby ratifies and confirms as his own act and deed any and all
that such attorneys and agents, or any of them, shall do or cause to be done by
virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 6th day of
February, 1998.
Philip W. Coolidge
- ------------------------
Philip W. Coolidge
At Southampton, Bermuda
<PAGE>
U.S. TREASURY RESERVES PORTFOLIO
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by U.S.
Treasury Reserves Portfolio (the "Registrant") with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended, the
Registration Statements on Form N-1A, and any and all amendments thereto, to be
executed by the Registrant and filed by another registrant with the Securities
and Exchange Commission under the Investment Company Act of 1940, as amended, or
under the Securities Act of 1933, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Investment Company Act of 1940, as
amended, the rules, regulations and requirements of the Securities and Exchange
Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents shall
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 1st day
of September, 1998.
Riley C. Gilley
- ------------------------
Riley C. Gilley
<PAGE>
Exhibit 25(c)
CASH RESERVES PORTFOLIO
The undersigned hereby constitutes and appoints Philip W. Coolidge, Susan
Jakuboski, Tamie Ebanks-Cunningham, Molly S. Mugler and Linda T. Gibson, and
each of them, with full powers of substitution as his true and lawful attorneys
and agents to execute in his name and on his behalf in any and all capacities
the Registration Statements on Form N-1A, and any and all amendments thereto,
filed by Cash Reserves Portfolio (the "Registrant") with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended, the
Registration Statements on Form N-1A, and any and all amendments thereto, to be
executed by the Registrant and filed by another registrant with the Securities
and Exchange Commission under the Investment Company Act of 1940, as amended, or
under the Securities Act of 1933, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Investment Company Act of 1940, as
amended, the rules, regulations and requirements of the Securities and Exchange
Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents shall
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 7th day of
August, 1998.
John R. Elder
- ------------------
John R. Elder
At Paget, Bermuda
<PAGE>
CASH RESERVES PORTFOLIO
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Tamie Ebanks-Cunningham, Molly S. Mugler and Linda T.
Gibson, and each of them, with full powers of substitution as his true and
lawful attorneys and agents to execute in his name and on his behalf in any and
all capacities the Registration Statements on Form N-1A, and any and all
amendments thereto, filed by Cash Reserves Portfolio (the "Registrant") with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended, the Registration Statements on Form N-1A, and any and all amendments
thereto, to be executed by the Registrant and filed by another registrant with
the Securities and Exchange Commission under the Investment Company Act of 1940,
as amended, or under the Securities Act of 1933, as amended, and any and all
other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrant to comply with the Investment
Company Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities or Blue Sky laws of any
state or other jurisdiction; and the undersigned hereby ratifies and confirms as
his own act and deed any and all that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 7th day of
August, 1998.
Walter E. Robb, III
- ------------------
Walter E. Robb, III
At Paget, Bermuda
<PAGE>
CASH RESERVES PORTFOLIO
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Tamie Ebanks-Cunningham, Molly S. Mugler and Linda T.
Gibson, and each of them, with full powers of substitution as his true and
lawful attorneys and agents to execute in his name and on his behalf in any and
all capacities the Registration Statements on Form N-1A, and any and all
amendments thereto, filed by Cash Reserves Portfolio (the "Registrant") with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended, the Registration Statements on Form N-1A, and any and all amendments
thereto, to be executed by the Registrant and filed by another registrant with
the Securities and Exchange Commission under the Investment Company Act of 1940,
as amended, or under the Securities Act of 1933, as amended, and any and all
other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrant to comply with the Investment
Company Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities or Blue Sky laws of any
state or other jurisdiction; and the undersigned hereby ratifies and confirms as
his own act and deed any and all that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 7th day of
August, 1998.
Elliott J. Berv
- ------------------
Elliott J. Berv
At Paget, Bermuda
<PAGE>
CASH RESERVES PORTFOLIO
The undersigned hereby constitutes and appoints John R. Elder, Susan Jakuboski,
Tamie Ebanks-Cunningham, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Cash
Reserves Portfolio (the "Registrant") with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended, the
Registration Statements on Form N-1A, and any and all amendments thereto, to be
executed by the Registrant and filed by another registrant with the Securities
and Exchange Commission under the Investment Company Act of 1940, as amended, or
under the Securities Act of 1933, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Investment Company Act of 1940, as
amended, the rules, regulations and requirements of the Securities and Exchange
Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents shall
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 7th day of
August, 1998.
Philip W. Coolidge
- ------------------
Philip W. Coolidge
At Paget, Bermuda
