As filed with the Securities and Exchange Commission on May 15,
1995
File Nos. 33-36556
811-6154
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 10
AND
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 12
LANDMARK INTERNATIONAL FUNDS*
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
6 ST. JAMES AVENUE, BOSTON, MASSACHUSETTS 02116
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 617-423-1679
PHILIP W. COOLIDGE, 6 ST. JAMES AVENUE, BOSTON, MASSACHUSETTS
02116
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO:
ROGER P. JOSEPH, BINGHAM, DANA & GOULD, 150 FEDERAL STREET,
BOSTON, MASSACHUSETTS 02110
It is proposed that this filing will become effective on July 14, 1995
pursuant to paragraph (a) of Rule 485, or such earlier date on which the
Commission may declare this filing effective pursuant to subparagraph (3) of
Rule 485(a).
The Premium Portfolios has also executed this Registration
Statement.
Pursuant to Rule 24f-2, Registrant has registered an indefinite number of
its Shares of Beneficial Interest (par value $0.00001 per share) under the
Securities Act of 1933 and file a Rule 24f-2 Notice on February 27, 1955 for
Registrant's fiscal year ended December 31, 1994.
- ----------------------------------------------------------------
*Formerly Landmark International Equity Fund; relates only to
Landmark Emerging Asian Markets Equity Fund.
<PAGE>
LANDMARK INTERNATIONAL FUNDS
REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET
N-1A
ITEM N-1A ITEM LOCATION
NO.
PROSPECTUS
PART A
Item 1. Cover Page...................... Cover Page
Item 2. Synopsis........................ Expense Summary
Item 3. Condensed Financial Information. Not Applicable
Item 4. General Description of Registrant Investment Information;
General Information;
Appendix
Item 5. Management of the Fund.......... Management; Expenses
Item 5A. Management's Discussion of Fund Not Applicable
Performance.....................
Item 6. Capital Stock and Other Securities General Information;
Classes of Shares;
Voting and Other Rights;
Purchases; Exchanges;
Redemptions; Dividends
and Distributions; Tax
Matters
Item 7. Purchase of Securities Being Purchases; Exchanges;
Offered......................... Redemptions
Item 8. Redemption or Repurchase........ Purchases; Exchanges;
Redemptions
Item 9. Pending Legal Proceedings....... Not Applicable
STATEMENT OF
ADDITIONAL
PART B INFORMATION
Item 10. Cover Page...................... Cover Page
Item 11. Table of Contents............... Cover Page
Item 12. General Information and History. The Fund
Item 13. Investment Objectives and Policies Investment Objective,
Policies and Restrictions
Item 14. Management of the Fund.......... Management
Item 15. Control Persons and Principal Management
Holders of Securities...........
Item 16. Investment Advisory and Other Management
Services........................
Item 17. Brokerage Allocation and Other Portfolio Transactions
Practices.......................
Item 18. Capital Stock and Other Securities Description of Shares,
Voting Rights and
Liabilities
Item 19. Purchase, Redemption and Pricing
of Securities Description of Shares,
Being Offered................... Voting Rights and
Liabilities;
Determination of Net
Asset Value; Valuation
of Securities;
Additional Purchase and
Redemption Information
Item 20. Tax Status...................... Certain Additional Tax
Matters
Item 21. Underwriters.................... Management
Item 22. Calculation of Performance Data. Performance Information
Item 23. Financial Statements............ Not Applicable
PART C Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration
Statement.
<PAGE>
...... ..... Prospectus
June , 1995
---
LANDMARK EMERGING ASIAN MARKETS EQUITY FUND
(A member of the LandmarkSM Family of Funds)
CLASS A AND B SHARES
......This Prospectus describes Landmark Emerging Asian Markets Equity Fund, a
diversified mutual fund in the Landmark Family of Funds. The Fund is designed
for investors who are willing to commit a portion of their assets to non-U.S.
investment and for whom current income is not a primary consideration. The Fund
is also designed for investors who, while seeking above-average growth, are
willing to accept greater risks and volatility. Citibank, N.A. is the investment
adviser.
......UNLIKE OTHER MUTUAL FUNDS WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN
PORTFOLIOS OF SECURITIES, THE FUND SEEKS ITS INVESTMENT OBJECTIVE BY INVESTING
ALL OF ITS INVESTABLE ASSETS IN EMERGING ASIAN MARKETS EQUITY PORTFOLIO. THE
PORTFOLIO HAS THE SAME INVESTMENT OBJECTIVE AND POLICIES AS THE FUND. SEE
"SPECIAL INFORMATION CONCERNING INVESTMENT STRUCTURE" ON PAGE 11.
......PROSPECTIVE INVESTORS SHOULD BE AWARE THAT SHARES OF THE FUND ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, CITIBANK, N.A. OR ANY
OF ITS AFFILIATES, ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER AGENCY, AND INVOLVE INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL
AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
......This Prospectus concisely sets forth information about the Fund that a
prospective investor should know before investing. A Statement of Additional
Information dated June , 1995 (and incorporated by reference in this Prospectus)
has been filed with the Securities and Exchange Commission. Copies of the
Statement of Additional Information may be obtained without charge, and further
inquiries about the Fund may be made, by contacting the investor's shareholder
servicing agent (see inside back cover for address and phone number).
INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.
<PAGE>
PROSPECTUS SUMMARY
See the body of the Prospectus for more information on the topics
discussed in this summary.
The Fund: This Prospectus describes Landmark Emerging Asian
Markets Equity Fund, a diversified mutual fund.
Investment The investment objective of the Fund is long-term
Objective and capital growth; dividend income, if any, is
Policies: incidental to this investment objective. There
can be no assurance that the Fund will achieve its objective.
Through the Portfolio, the Fund invests primarily in equity
securities of companies in Asian countries with emerging markets
and developing economies, including South Korea, Taiwan, the
People's Republic of China, India, Indonesia, Malaysia,
Pakistan, the Philippines, Sri Lanka, Thailand and Vietnam.
Because the Fund invests through the Portfolio, all references
in this Prospectus to the Fund include the Portfolio, except as
otherwise noted.
Investment Citibank, N.A., a wholly-owned subsidiary of
Adviser Citicorp, is the investment adviser. Citibank
and Distributor:and its affiliates manage more than $73 billion
in assets worldwide. The Landmark Funds
Broker-Dealer Services, Inc. is the distributor
of shares of the Fund. See "Management."
Purchases and Customers of Shareholder Servicing Agents may
Redemptions: purchase and redeem shares of the Fund on any
Business Day. See "Purchases" and "Redemptions."
Pricing: Investors may select Class A or Class B shares, with
different expense levels and sales charges (if
available through the investors' Shareholder
Servicing Agent). See "Classes of Shares,"
"Purchases" and "Management - Distribution
Arrangements."
Class A Shares Offered at net asset value plus any applicable initial
sales charge (maximum of 4.75% of the public offering price) and
subject to a distribution fee at the annual rate of 0.10% of the
average daily net assets represented by the Class A shares.
Purchases of $1 million or more are not subject to an initial
sales charge, but are subject to a 1.00% contingent deferred
sales charge in the event of certain redemptions within 12
months following purchase.
The sales charge on Class A shares may be reduced or eliminated
through the following programs:
<PAGE>
Letter of Intent
Right of Accumulation
Reinstatement Privilege
See "Purchases" and "Redemptions."
Class B Shares Offered at net asset value (a maximum contingent
deferred sales charge of 5.00% of the lesser of the shares' net
asset value at redemption or their original purchase price is
imposed on certain redemptions made within six years of the date
of purchase) and subject to a distribution fee at the annual
rate of 0.75% of the average daily net assets represented by the
Class B shares and a service fee at the annual rate of 0.10% of
the average daily net assets represented by the Class B shares.
Class B shares automatically convert into Class A shares (which
have a lower distribution fee) approximately eight years after
purchase.
Exchanges: Shares may be exchanged for shares of the
corresponding class of most other Landmark Funds.
See "Exchanges."
Dividends: Dividends, if any, are declared and paid
semi-annually. Net capital gains are distributed
annually. See "Dividends and Distributions."
Reinvestment: All dividends and capital gains distributions may be
received either in cash or in Fund shares of the same
class at net asset value, subject to the policies of
a shareholder's Shareholder Servicing Agent. See
"Dividends and Distributions."
Who Should The Fund has its own suitability considerations
Invest: and risk factors, as summarized below and
described in more detail in "Investment Information." The Fund
is designed for investors seeking long-term capital growth who
are willing to commit a portion of their assets to non-U.S.
investment and for whom current income is not a primary
consideration. The Fund is not intended to provide a complete
investment program.
THE FUND IS DESIGNED FOR INVESTORS WHO, WHILE SEEKING
ABOVE-AVERAGE GROWTH, ARE WILLING TO ACCEPT THE RISKS OF
POTENTIAL LOSS AND VOLATILITY ASSOCIATED WITH INVESTMENT IN
ISSUERS WITHIN A SPECIFIC REGION AND RELATIVELY FEW COUNTRIES,
AND THE HEIGHTENED RISKS AND VOLATILITY ASSOCIATED WITH
INVESTMENT IN ISSUERS IN COUNTRIES WITH EMERGING MARKETS AND
DEVELOPING ECONOMIES.
Risk Factors: There can be no assurance that the Fund will achieve
its investment objective, and the Fund's net asset
value will fluctuate
<PAGE>
based on changes in the values of the underlying portfolio
securities. Equity securities fluctuate in value based on many
factors, including actual and anticipated earnings, changes in
management, political and economic developments and the
potential for takeovers and acquisitions. The value of debt
securities generally fluctuates based on changes in the actual
and perceived creditworthiness of issuers. Also, the value of
debt securities generally goes down when interest rates go up,
and vice versa. As a result, an investor's shares may be worth
more or less at redemption than at the time of purchase.
Investors in the Fund should be able to assume the
special risks of investing in non-U.S. securities,
which include possible adverse political, social and
economic developments abroad, differing regulations
to which non-U.S. issuers are subject and different
characteristics of non-U.S. economies and markets.
The Fund's non-U.S. securities often will trade in
non-U.S. currencies, which can be volatile and may be
subject to governmental controls or intervention.
Changes in non-U.S. currency values will affect the
Fund's earnings and gains and losses realized on
sales of securities, as well as the Fund's net asset
value. In addition, securities of non-U.S. issuers
may be less liquid and their prices more volatile
than those of comparable U.S. issuers.
Investors in the Fund should be able to assume the heightened
risks and volatility associated with investment in developing
countries, including greater risks of expropriation,
confiscatory taxation and nationalization and less social,
political and economic stability; smaller (and, in many cases,
new) markets resulting in price volatility and illiquidity;
national policies which may restrict investment opportunities;
and the absence of developed legal structures. An investment in
the Fund will be more susceptible to political and economic
factors affecting issuers in its region and the particular
countries in which it invests.
Certain investment practices, such as the use of forward
non-U.S. currency exchange contracts, also may entail special
risks. Prospective investors should read "Investment Information
- Risk Considerations" for more information about risk
factors.
<PAGE>
EXPENSE SUMMARY
The following table summarizes estimated shareholder transaction and
annual operating expenses for Class A and B shares of the Fund. The Fund invests
all of its investable assets in the Portfolio. The Trustees of the Fund believe
that the aggregate per share expenses of the Fund and the Portfolio 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 the
Portfolio. For more information on costs and expenses, see "Management" -- page
22 and "General Information-Expenses" -- page 30.*
Class A Class B
SHAREHOLDER TRANSACTION
EXPENSES:
Maximum Sales Load 4.75% None
Imposed on Purchases
(as a percentage of
offering price)
Maximum Contingent See 5.00%
Deferred Sales Charges Below(1)
(as a percentage of
original purchase price
or redemption proceeds,
whichever is less)
ANNUAL FUND OPERATING
EXPENSES (AS A PERCENT-
AGE OF AVERAGE NET
ASSETS):
Investment Management 1.00% 1.00%
Fee
12b-1 Fees (including 0.10% 0.85%
service fees for Class B
shares) (2)
Other Expenses
Administrative
Services Fees 0.20% 0.20%
Shareholder Servicing
Agent Fees 0.25% 0.25%
Other Operating
Expenses 0.30% 0.30%
Total Fund Operating
Expenses 1.85% 2.60%
- ---------------------------
(1) Purchases of $1 million or more are not subject to an
initial sales charge; however, a contingent deferred
sales charge of 1.00% will be imposed on these purchases
in the event of certain redemptions within 12 months
following purchase. See "Classes of Shares" and
"Purchases."
<PAGE>
(2) 12b-1 distribution fees are asset-based sales charges. Long-term
shareholders in the Fund could pay more in sales charges than the economic
equivalent of the maximum front-end sales charges permitted by the National
Association of Securities Dealers, Inc. The figure for Class B shares
includes service fees, which are payable at the annual rate of 0.10% of the
average daily net assets represented by Class B shares.
*This table is intended to assist investors in understanding the various
costs and expenses that a shareholder of the Fund will bear, either directly or
indirectly. Because the Fund is newly organized, figures in the table are based
on estimated amounts for the current fiscal year.
More complete descriptions of the following expenses are set forth on the
following pages: (i) investment management fee -- page 23, (ii) distribution
fees -- pages 25-26, (iii) administrative services fees -- page 24, and (iv)
shareholder servicing agent fees -- page 25.
EXAMPLE:
A shareholder would pay the following expenses on a $1,000 investment,
assuming, except as otherwise noted, redemption at the end of each period
indicated below:
..... One Three
..... Year Years
Class A shares (1). $65 $103
Class B shares
Assuming complete redemption $76 $111
at end of period (2)
Assuming no redemption $26 $81
- --------------------------
(1) Assumes deduction at the time of purchase of the maximum 4.75%
sales load.
(2) Assumes deduction at the time of redemption of the maximum
applicable contingent deferred sales charge.
The Example assumes that all dividends are reinvested. Fund expenses are
estimated since the Fund is newly organized. The assumption of a 5% annual
return is required by the Securities and Exchange Commission for all mutual
funds, and is not a prediction of the Fund's future performance. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OF THE
FUND. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
INVESTMENT INFORMATION
INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term capital growth. Dividend
income, if any, is incidental to this investment objective.
The investment objective of the Fund may be changed without approval by
the Fund's shareholders, but shareholders will be given written notice at least
30 days before any change is implemented. Of course, there can be no assurance
that the Fund will achieve its investment objective.
INVESTMENT POLICIES
The Fund seeks its objective by investing mainly in equity securities of
issuers located in Asian countries with emerging markets and developing
economies. These countries include South Korea, Taiwan, the People's Republic of
China, India, Indonesia, Malaysia, Pakistan, the Philippines, Sri Lanka,
Thailand and Vietnam. These countries are called, collectively, "Emerging Asia
Countries." Under normal circumstance, at least sixty-five percent of the Fund's
total assets is invested in equity securities of issuers in at least three
Emerging Asia Countries. For purposes of this policy, equity securities are
defined as common stock, securities convertible into common stock, and trust or
limited partnership interests, and include securities purchased directly or in
the form of sponsored American Depositary Receipts ("ADRs"), European Depositary
Receipts ("EDTs") or other similar securities representing common stock of
non-U.S. issuers.
An issuer is deemed to be "located in" or "in" a particular country if it
meets at least one of the following tests: (i) the issuer's securities are
principally traded in the country's markets; (ii) the issuer's principal offices
or operations are located in the country; or (iii) the issuer derives at least
50% of its revenues from goods or services sold or manufactured in the country.
In selecting common stocks for the Fund the Adviser emphasizes equity
securities of companies that, in the opinion of the Adviser, offer the potential
for long-sustainable growth in earnings. The Fund may invest in companies with
small, medium and large market capitalizations. The Adviser may also select
other securities which it believes provide an opportunity for appreciation, such
as fixed income securities, convertible and non-convertible bonds, preferred
stock and warrants. The Fund's assets usually consist of issues listed on
securities exchanges.
Appendix B and the Statement of Additional Information include additional
information concerning Emerging Asia Countries. All of these countries are
considered developing and, in general, have new and limited or restricted
securities markets.
The Adviser believes that, over time, it may be possible to obtain
investment returns from investing in companies in Emerging Asia Countries that
are higher than the expected returns from investing in companies in economically
more mature countries, such as the United States, Japan and the countries of
western Europe. In general, the economies of Emerging Asia Countries are
characterized by large, hard-working labor pools, a growing middle class and
high savings rates. They are benefiting from rapid growth of intra-regional
trade and a high level of infrastructure development. In addition, governments
within the region are generally opening capital markets to foreign investors. As
a result, these countries have recently enjoyed more rapid economic growth than
more mature economies, and the Adviser believes this trend is likely to
continue. However, investing in Emerging Asia Countries involves greater risk
and volatility.
ADDITIONAL INVESTMENT POLICIES
Temporary Investments. For temporary defensive purposes, the
Fund may invest without limit in cash and in U.S. dollar-denominated
high quality money market and short-term instruments. These
investments may
<PAGE>
result in a lower yield than would be available from investments with a lower
quality or longer term.
Other Permitted Investments. For more information regarding the Fund's
permitted investments and investment practices, see Appendix A. The Fund will
not necessarily invest or engage in each of the investments and investment
practices in Appendix A but reserves the right to do so.
Investment Restrictions. The Statement of Additional Information contains
a list of specific investment restrictions which govern the investment policies
of the Fund, including a limitation that the Fund may borrow money from banks in
an amount not to exceed 33 1/3% of its net assets for extraordinary or emergency
purposes (e.g., to meet redemption requests). Certain of these specific
restrictions may not be changed without shareholder approval. Except as
otherwise indicated, the Fund's investment objectives and policies may be
changed without shareholder approval.
Portfolio Turnover. Securities of the Fund will be sold whenever the
Adviser believes it is appropriate to do so in light of the Fund's investment
objectives, without regard to the length of time a particular security may have
been held. The turnover rate for the Fund is not expected to exceed 150%
annually. The amount of the Fund's brokerage commissions and realization of
taxable capital gains will tend to increase as the level of portfolio activity
increases.
Brokerage Transactions. The primary consideration in placing the Fund's
security transactions with broker-dealers for execution is to obtain and
maintain the availability of execution at the most favorable prices and in the
most effective manner possible.
RISK CONSIDERATIONS
The risks of investing in the Fund vary depending upon the nature of the
securities held, and the investment practices employed, on its behalf. Certain
of these risks are described below.
Changes in Net Asset Value. The Fund's net asset value will fluctuate
based on changes in the values of the underlying portfolio securities. This
means that an investor's shares may be worth more or less at redemption than at
the time of purchase. Equity securities fluctuate in response to general market
and economic conditions and other factors, including actual and anticipated
earnings, changes in management, political developments and the potential for
takeovers and acquisitions. During periods of rising interest rates the value of
debt securities generally declines, and during periods of falling rates the
value of these securities generally increases. Changes by recognized rating
agencies in the rating of any debt security, and actual or perceived changes in
an issuer's ability to make principal or interest payments, also affect the
value of these investments.
Credit Risk of Debt Securities. Investors should be aware that securities
offering above average yields may at times involve above average risks. Adverse
economic or changing circumstances are more likely to lead to a weakened
capacity to make principal and interest payments than is the case for higher
grade obligations.
<PAGE>
Non-U.S. Securities. Investments in non-U.S. securities
involve risks relating to political, social and economic
developments abroad, as well as risks resulting from the differences
between the regulations to which U.S. and non-U.S. issuers and
markets are subject. These risks may include expropriation,
confiscatory taxation, withholding taxes on dividends and interest,
limitations on the use or transfer of portfolio assets and political
or social instability. Enforcing legal rights may be difficult,
costly and slow in non-U.S. countries, and there may be special
problems enforcing claims against non-U.S. governments. In addition,
non-U.S. companies may not be subject to accounting standards or
governmental supervision comparable to U.S. companies, and there may
be less public information about their operations. Non-U.S. markets
may be less liquid and more volatile than U.S. markets, and may
offer less protection to investors such as the Fund. Prices at
which the Fund may acquire securities may be affected by trading by
persons with material non-public information and by securities
transactions by brokers in anticipation of transactions by the Fund.
Because non-U.S. securities often are denominated in currencies other than
the U.S. dollar, changes in currency exchange rates will affect the Fund's net
asset value, the value of dividends and interest earned and gains and losses
realized on the sale of securities. In addition, some non-U.S. currency values
may be volatile and there is the possibility of governmental controls on
currency exchanges or governmental intervention in currency markets.
The Fund will invest in issuers located in developing countries.
Developing countries are generally defined as countries in the initial stages of
their industrialization cycles with low per capita income. All of the risks of
investing in non-U.S. securities are heightened by investing in issuers in
developing countries. Shareholders should be aware that investing in the equity
and fixed income markets of developing countries involves exposure to economic
structures that are generally less diverse and mature, and to political systems
which can be expected to have less stability, than those of developed countries.
Historical experience indicates that the markets of developing countries have
been more volatile than the markets of developed countries with more mature
economies; such markets often have provided higher rates of return, and greater
risks, to investors. These heightened risks include (i) greater risks of
expropriation, confiscatory taxation and nationalization, and less social,
political and economic stability; (ii) the small current size of markets for
securities of issuers based in developing countries and the currently low or
non-existent volume of trading, resulting in a lack of liquidity and in price
volatility; (iii) certain national policies which may restrict the Fund's
investment opportunities including restrictions on investing in issuers or
industries deemed sensitive to relevant national interests; and (iv) the absence
of developed legal structures. Such characteristics can be expected to continue
in the future.
Equity securities traded in certain foreign countries, including Emerging
Asia Countries, may trade at price-earnings multiples higher than those of
comparable companies trading on securities markets in the United States, which
may not be sustainable. Rapid increases in money supply in certain countries may
result in speculative investment in equity securities which may contribute to
volatility of trading markets.
<PAGE>
The costs attributable to non-U.S. investing, such as the costs
of maintaining custody of securities in non-U.S. countries,
frequently are higher than those attributable to U.S. investing. As
a result, the operating expense ratio of the Fund is expected to be
higher than those of investment companies investing exclusively in
U.S. securities.
Smaller Companies. Investors in the Fund should be aware that the
securities of companies with small market capitalizations and securities of
certain growth companies may have more risks than the securities of other
companies. Small capitalization companies and certain growth companies may be
more susceptible to market downturns or setbacks because such companies may have
limited product lines, markets, distribution channels, and financial and
management resources. Further, there is often less publicly available
information about small capitalization companies and many growth companies than
about more established companies. As a result of these and other factors, the
prices of securities issued by small capitalization companies and some growth
companies may be volatile.
Regional Concentration. The Fund will invest primarily in issuers located
in Emerging Asia Countries. Investors in the Fund may therefore be subject to
greater risk and volatility than investors in funds with more geographically
diverse portfolios. In addition, the Fund will be susceptible to political and
economic factors affecting issuers in countries within the Asia-Pacific region
and in the specific countries in which it invests. See Appendix B for additional
information about Emerging Asia Countries.
Investment Practices. Certain of the investment practices
employed for the Portfolio may entail certain risks. See Appendix
A.
SPECIAL INFORMATION CONCERNING INVESTMENT STRUCTURE
Unlike other mutual funds which directly acquire and manage their own
portfolio securities, the Fund seeks its investment objective by investing all
of its investable assets in the Portfolio, a registered investment company. The
Portfolio has the same investment objective and policies as the Fund. In
addition to selling a beneficial interest to the Fund, the Portfolio may sell
beneficial interests to other mutual funds, collective investment vehicles, or
institutional investors. Such investors will invest in the Portfolio on the same
terms and conditions and will pay a proportionate share of the Portfolio's
expenses. However, the other investors investing in the Portfolio are not
required to sell their shares at the same public offering price as the Fund due
to variations in sales commissions and other operating expenses. Therefore,
investors in the Fund should be aware that these differences may result in
differences in returns
<PAGE>
experienced by investors in the different funds that invest in the Portfolio.
Such differences in returns are also present in other mutual fund structures.
Information concerning other holders of interests in the Portfolio is available
from the Fund's distributor, The Landmark Funds Broker-Dealer Services, Inc.
("LFBDS" or the "Distributor"), at the address and telephone number indicated on
the back cover of this Prospectus.
The investment objective of the Fund may be changed without the approval
of the Fund's shareholders, but not without written notice thereof to
shareholders at least 30 days prior to implementing the change. If there is a
change in the Fund's investment objective, shareholders should consider whether
the Fund remains an appropriate investment in light of their then current
financial positions and needs. The investment objective of the Portfolio may
also be changed without the approval of the investors in the Portfolio, but not
without written notice thereof to the investors in the Portfolio (and, if the
Fund is then invested in the Portfolio, notice to Fund shareholders) at least 30
days prior to implementing the change. There can, of course, be no assurance
that the investment objective of the Fund or the Portfolio will be achieved. See
"Investment Objective, Policies and Restrictions - Investment Restrictions" in
the Statement of Additional Information for a description of the fundamental
policies of the Fund and the Portfolio that cannot be changed without approval
by the holders of a "majority of the outstanding voting securities" (as defined
in the 1940 Act) of the Fund or Portfolio. Except as stated otherwise, all
investment guidelines, policies and restrictions described herein and in the
Statement of Additional Information are non-fundamental.
Changes in the Portfolio's investment objective, policies or restrictions
or a failure by the Fund's shareholders to approve a change in the Portfolio's
investment objective or restrictions, may require the Fund to withdraw its
interest in the Portfolio. Any such withdrawal could result in a distribution
"in kind" of securities (as opposed to a cash distribution) from the Portfolio
which may or may not be readily marketable. If securities are distributed, the
Fund could incur brokerage, tax or other charges in converting the securities to
cash. The distribution in kind may result in the Fund having a less diversified
portfolio of investments or adversely affect the liquidity of the Fund.
Notwithstanding the above, there are other means for meeting shareholder
redemption requests, such as borrowing. The absence of substantial experience
with this investment structure could have an adverse effect on an investment in
the Fund.
Smaller funds investing in the Portfolio may be materially affected by the
actions of larger funds investing in the Portfolio. For example, if a large fund
withdraws from the Portfolio, the remaining funds may subsequently experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, because the Portfolio would become smaller, it may become less
diversified, resulting in increased portfolio risk; however, these possibilities
exist for traditionally structured funds which have large or institutional
investors who may withdraw from a fund. Also, funds with
<PAGE>
a greater pro rata ownership in the Portfolio could have effective voting
control of the operations of the Portfolio. If the Fund is requested to vote on
matters pertaining to the Portfolio (other than a vote by the Fund to continue
the operation of the Portfolio upon the withdrawal of another investor in the
Portfolio), the Fund will hold a meeting of its shareholders and will cast all
of its votes proportionately as instructed by its shareholders who vote at the
meeting. Shareholders of the Fund who do not vote will have no effect on the
outcome of such matters.
The Fund may withdraw its investment from the Portfolio at any time, if
the Fund's Board of Trustees determines that it is in the best interests of the
Fund to do so. Upon any such withdrawal, the Board of Trustees would consider
what action might be taken, including the investment of all of the investable
assets of the Fund in another pooled investment entity having the same
investment objective as the Fund or the retaining of an investment adviser to
manage the Fund's assets in accordance with the investment policies described
above. In the event the Fund's Trustees were unable to find a substitute
investment company in which to invest the Fund's assets or were unable to secure
directly the services of an investment adviser and investment manager, the
Trustees would determine the best course of action.
For description of the management of the Portfolio, see "Management." For
descriptions of the expenses of the Portfolio, see "Management" and "General
Information - Expenses."
VALUATION OF SHARES
Net asset value per share of each class of shares of the Fund is
determined each day the New York Stock Exchange is open for trading (a "Business
Day"). This determination is made once each day as of the close of regular
trading on the Exchange (currently 4:00 p.m. Eastern time) by adding the market
value of all securities and other assets attributable to a class of the Fund
(including its interest in the Portfolio), then subtracting the liabilities
charged to the class, and then dividing the result by the number of outstanding
shares of the class. Per share net asset value of each class of the Fund's
shares may differ because Class B shares bear higher expenses than Class A
shares. The net asset value per share of each class of shares is effective for
orders received and accepted by the Distributor prior to its calculation.
Portfolio securities and other assets are valued primarily on the basis of
market quotations, or if quotations are not available, by a method believed to
accurately reflect fair value. Non-U.S. securities are valued based on
quotations from the primary market in which they are traded and are translated
from the local currency into U.S. dollars using current exchange rates. In light
of the non-U.S. nature of the Fund's investments, trading may take place in
securities held by the Fund on days which are not "Business Days" and on which
it will not be possible to purchase or redeem shares of the Fund.
<PAGE>
CLASSES OF SHARES
DIFFERENCES AMONG THE CLASSES
Class A and B shares of the Fund represent interests in the same mutual
fund. The primary distinctions among the classes of the Fund's shares are their
initial and contingent deferred sales charge structures and their ongoing
expenses, including asset-based sales charges in the form of distribution fees.
These differences are summarized in the table below. Each class has distinct
advantages and disadvantages for different investors, and investors may choose
the class that best suits their circumstances and objectives.
Annual 12b-1 Fees
(as a percentage
of average daily
Sales Charge net assets) Other Information
Class A Maximum initial salesDistribution fee Initial sales
charge of 4.75% of of 0.10% charge waived or
the public offering reduced for
price certain
purchases; a
contingent
deferred sales
charge may apply
in certain
instances where
the initial
sales charge is
waived
Class B Maximum contingent Distribution fee Shares convert
deferred sales of 0.75% to Class A
charge of 5.00% of shares
the lesser of Service fee of approximately
redemption proceeds 0.10% eight years
or original purchase after issuance
price; declines to
zero after six years
FACTORS TO CONSIDER IN CHOOSING A CLASS OF SHARES
In deciding which class of shares to purchase, investors should consider
the cost of sales charges together with the cost of the ongoing annual expenses
described below, as well as any other relevant facts and circumstances.
Sales Charges. Class A shares are sold at net asset value plus an initial
sales charge of up to 4.75% of the public offering price (except that for
purchases of $1 million or more, no initial sales charge is imposed and a
contingent deferred sales charge may be imposed instead). Because of this
initial sales charge, not all of a Class A shareholder's purchase price is
invested in the Fund. Class B shares are sold with no initial sales charge, but
a contingent deferred sales charge (up to 5.00%
<PAGE>
of the lesser of the shares' net asset value at redemption or their original
purchase price) applies to redemptions made within six years of purchase. Thus,
the entire amount of a Class B shareholder's purchase price is immediately
invested in the Fund.
Waivers and Reductions of Sales Charges. Class A share purchases over
$25,000 and Class A share purchases made under the Fund's reduced sales charge
plan may be made at a reduced sales charge. In considering the combined cost of
sales charges and ongoing annual expenses, investors should take into account
any reduced sales charges on Class A shares for which they may be eligible.
The entire initial sales charge on Class A shares is waived for certain
eligible purchasers. However, a 1.00% contingent deferred sales charge is
imposed on certain redemptions of Class A shares on which no initial sales
charge was assessed. Because Class A shares bear lower ongoing annual expenses
than Class B shares, in most cases investors eligible for reduced initial sales
charges should purchase Class A shares.
The contingent deferred sales charge may be waived upon
redemption of certain Class B shares. See "Purchases."
Ongoing Annual Expenses. Class A shares pay an annual 12b-1 distribution
fee of 0.10% of average daily net assets. Class B shares pay an annual 12b-1
distribution fee of 0.75% of average daily net assets and an annual service fee
of 0.10% of average daily net assets represented by Class B shares. Annual 12b-1
distribution fees are a form of asset-based sales charge. An investor should
consider both ongoing annual expenses and initial or contingent deferred sales
charges in estimating the costs of investing in the different classes of Fund
shares over various time periods.
CONVERSION OF CLASS B SHARES
A shareholder's Class B shares will automatically convert to Class A
shares in the Fund approximately eight years after the date of issuance,
together with a pro rata portion of all Class B shares representing dividends
and other distributions paid in additional Class B shares. The conversion will
be effected at the relative net asset values per share of the two classes on the
first Business Day of the month in which the eighth anniversary of the issuance
of the Class B shares occurs. If a shareholder effects one or more exchanges
among Class B shares of the Landmark Funds during the eight-year period, the
holding periods for the shares so exchanged will be counted toward the
eight-year period. Because the per share net asset value of the Class A shares
may be higher than that of the Class B shares at the time of conversion, a
shareholder may receive fewer Class A shares than the number of Class B shares
converted, although the dollar value will be the same. See "Valuation of
Shares." The conversion of Class B shares to Class A shares is subject to the
continuing availability of a ruling from the Internal Revenue Service or an
opinion of counsel that the conversion will not constitute a taxable event for
federal tax purposes. There can be no assurance that such a ruling or opinion
will be available, and the conversion of Class B shares
<PAGE>
to Class A shares will not occur if such ruling or opinion is not available. In
that event, Class B shares would continue to be subject to higher expenses than
Class A shares for an indefinite period.
OTHER INFORMATION
See "Purchases," "Redemptions" and "Management - Distribution
Arrangements" for a more complete description of the initial and contingent
deferred sales charges and distribution fees of each class of shares of the
Fund.
PURCHASES
The Fund offers two classes of shares, Class A and B shares, with
different expense levels and sales charges. See "Classes of Shares" for more
information. WHEN PLACING PURCHASE ORDERS, INVESTORS SHOULD SPECIFY WHETHER THE
ORDER IS FOR CLASS A OR CLASS B SHARES. ALL SHARE PURCHASE ORDERS THAT FAIL TO
SPECIFY A CLASS AUTOMATICALLY WILL BE INVESTED IN CLASS A SHARES.
Shares of the Fund are offered continuously and may be purchased on any
Business Day at the public offering price either through a securities broker
which has a sales agreement with the Distributor or through a bank or other
financial institution which has an agency agreement with the Distributor. Such a
bank or financial institution will receive transaction fees that are equal to
the commissions paid to securities brokers. Shares of the Fund are being offered
exclusively to customers of a Shareholder Servicing Agent (i.e., 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 concerning the Fund). An investor's
Shareholder Servicing Agent may not make available shares of both classes of
shares. The public offering price is the net asset value next determined after
an order is transmitted to and accepted by the Distributor, plus any applicable
sales charge for Class A shares. The Fund and the Distributor reserve the right
to reject any purchase order and to suspend the offering of Fund shares for a
period of time.
Each shareholder's account is established and maintained by his or her
Shareholder Servicing Agent, which will be the shareholder of record of the
Fund. Each Shareholder Servicing Agent may establish its own terms, conditions
and charges with respect to services it offers to its customers. Charges for
these services may include fixed annual fees and account maintenance fees. The
effect of any such fees will be to reduce the net return on the investment of
customers of that Shareholder Servicing Agent.
PURCHASING CLASS A SHARES
Initial Sales Charge - Class A Shares. The Fund's public offering price of
Class A shares is the next determined net asset value, plus any applicable sales
charge, which will vary with the size of the purchase as shown in the following
table:
SALES CHARGE AS
PERCENTAGE OF THE
PUBLIC NET BROKER COMMISSION AS
AMOUNT OF PURCHASE AT THE OFFERING AMOUNT PERCENTAGE OF THE
PUBLIC OFFERING PRICE PRICE INVESTED PUBLIC OFFERING
PRICE
Less than 4.75% 4.99% 4.23%
$25,000...................
$25,000 to less than 4.50% 4.71% 4.01%
$50,000........
$50,000 to less than 4.00% 4.17% 3.56%
$100,000.......
$100,000 to less than 3.50% 3.63% 3.12%
$250,000......
$250,000 to less than 2.50% 2.56% 2.23%
$500,000......
$500,000 to less than 2.00% 2.04% l.78%
$l,000,000....
$l,000,000 or none* none* none
more..................
* A contingent deferred sales charge may apply in certain
instances.
Sales Charge Elimination - Class A Shares. Class A shares of the Fund are
available without a sales charge through exchanges for Class A shares of most
other Landmark Funds. See "Exchanges." Also, the sales charge does not apply to
Class A shares acquired through the reinvestment of dividends and capital gains
distributions. Class A shares may be purchased without a sales charge by:
(i) tax exempt organizations under Section 501(c)(3-13) of the
Internal Revenue Code (the "Code"),
(ii) trust accounts for which Citibank or any subsidiary or affiliate of
Citibank (a "Citibank Affiliate") acts as trustee and exercises discretionary
investment management authority,
(iii)accounts purchasing shares through the Private Client Division of
Citicorp Investment Services or through other programs accessed through the
Private Client Division of Citicorp Investment Services, or the private banking
division of either Citibank, N.A., Citibank FSB or Citicorp Trust, N.A.,
(iv) accounts for which Citibank or any Citibank Affiliate
performs investment advisory services,
(v) accounts for which Citibank or any Citibank Affiliate
charges fees for acting as custodian,
(vi) trustees of any investment company for which Citibank or any Citibank
Affiliate serves as the investment adviser or as a shareholder servicing agent,
(vii)any affiliated person of the Fund, the Adviser, the
Distributor, the Administrator or any Shareholder Servicing Agent,
(viii) shareholder accounts established through a reorganization or
similar form of business combination approved by the Fund's Board of Trustees or
by the Board of Trustees of any other Landmark Fund the terms
<PAGE>
of which entitle those shareholders to purchase shares of the Fund or any other
Landmark Fund at net asset value without a sales charge,
(ix) employee benefit plans qualified under Section 401 of the Code,
including salary reduction plans qualified under Section 401(k) of the Code,
subject to such minimum requirements as may be established by the Distributor
with respect to the number of employees or amount of purchase; currently, these
criteria require that (a) the employer establishing the qualified plan have at
least 50 eligible employees or (b) the amount invested by such qualified plan in
the Fund or in any combination of Landmark Funds totals a minimum of $500,000,
(x) investors purchasing $1 million or more of Class A shares. However, a
contingent deferred sales charge will be imposed on such investments in the
event of certain share redemptions within 12 months following the share
purchase, at the rate of 1.00% of the lesser of the value of the shares redeemed
(exclusive of reinvested dividends and capital gains distributions) or the total
cost of such shares. In determining whether a contingent deferred sales charge
on Class A shares is payable, and if so, the amount of the charge, it is assumed
that shares not subject to the contingent deferred sales charge are the first
redeemed followed by other shares held for the longest period of time. All
investments made during a calendar month will age one month on the last day of
the month and each subsequent month. Any applicable contingent deferred sales
charge will be deferred upon an exchange of Class A shares for Class A shares of
another Landmark Fund and deducted from the redemption proceeds when such
exchanged shares are subsequently redeemed (assuming the contingent deferred
sales charge is then payable). The holding period of Class A shares so acquired
through an exchange will be aggregated with the period during which the original
Class A shares were held. The contingent deferred sales charge on Class A shares
will be waived under the same circumstances as the contingent deferred sales
charge on Class B shares will be waived. See "Sales Charge Waivers--Class B
Shares." Any applicable contingent deferred sales charges will be paid to the
Distributor,
(xi) subject to appropriate documentation, investors where the amount
invested represents redemption proceeds from a mutual fund (other than a
Landmark Fund) if: (i) the redeemed shares were subject to an initial sales
charge or a deferred sales charge (whether or not actually imposed); and (ii)
such redemption has occurred no more than 90 days prior to the purchase of Class
A shares of the Fund, or
(xii)an investor who has a business relationship with an investment
consultant or other registered representative who joined a broker-dealer which
has a sales agreement with the Distributor from another investment firm within
six months prior to the date of purchase by such investor, if (a) the investor
redeems shares of another mutual fund sold through the investment firm that
previously employed that investment consultant or other registered
representative, and either paid an initial sales charge or was at some time
subject to, but did not actually pay, a deferred sales charge or redemption fee
with respect to the redemption proceeds, (b) the redemption is made within 60
days prior to the investment in the Fund, and
<PAGE>
(c) the net asset value of the shares of the Fund sold to that investor without
a sales charge does not exceed the proceeds of such redemption.
Reduced Sales Charge Plans - Class A Shares. An individual who is a member
of a qualified group may purchase Class A shares of the Fund at the reduced
sales charge applicable to the group as a whole. The sales charge is based upon
the aggregate dollar value of Class A shares previously purchased and still
owned by the group, plus the amount of the purchase. A "qualified group" is one
which (i) has been in existence for more than six months, (ii) has a purpose
other than acquiring Fund shares at a discount, and (iii) satisfies uniform
criteria which enable the Distributor to realize economies of scale in its costs
of distributing shares. A qualified group must have more than ten members, must
be available to arrange for group meetings between representatives of the Fund
and the members, must agree to include sales and other materials related to the
Fund in its publications and mailings to members at reduced or no cost to the
Distributor, and must seek to arrange for payroll deduction or other bulk
transmission of investments to the Fund.
Reduced initial sales charges on Class A shares also may be achieved
through a RIGHT OF ACCUMULATION or a LETTER OF INTENT. Under a RIGHT OF
ACCUMULATION eligible investors are permitted to purchase Class A shares of the
Fund at the public offering price applicable to the total of (a) the dollar
amount then being purchased, plus (b) an amount equal to the then-current net
asset value or cost (whichever is higher) of the purchaser's combined holdings
in the Landmark Funds. The Right of Accumulation may be amended or terminated at
any time.
If an investor anticipates purchasing $25,000 or more of Class A shares of
the Fund alone or in combination with Class B shares of the Fund or any of the
classes of other Landmark Funds within a 13-month period, the investor may
obtain such shares at the same reduced sales charge as though the total quantity
were invested in one lump sum, subject to the appointment of an attorney for
redemptions of shares if the intended purchases are not completed, by completing
a LETTER OF INTENT. Investors should consult "Determination of Net Asset Value;
Valuation of Securities; Additional Purchase and Redemption Information" in the
Statement of Additional Information and their Shareholder Servicing Agents for
more information about Rights of Accumulation and Letters of Intent.
PURCHASING CLASS B SHARES
Contingent Deferred Sales Charge - Class B Shares. The Fund's public
offering price of Class B shares is the next determined net asset value, and no
initial sales charge is imposed. A contingent deferred sales charge, however, is
imposed upon certain redemptions of Class B shares.
Class B shares of the Fund that are redeemed will not be subject to a
contingent deferred sales charge to the extent that the value of such shares
represents (i) capital appreciation of Fund assets, (ii) reinvestment of
dividends or capital gain distributions or (iii) shares redeemed more than six
years after their purchase. Otherwise, redemptions of Class B shares will be
subject to a contingent deferred sales charge.
<PAGE>
The amount of any applicable contingent deferred sales charge will be calculated
by multiplying the lesser of net asset value of such shares at the time of
redemption or their original purchase price by the applicable percentage shown
in the following table.
CONTINGENT DEFERRED
REDEMPTION DURING SALES CHARGE
1st Year Since 5%
Purchase...............
2nd Year Since 4%
Purchase...............
3rd Year Since 3%
Purchase...............
4th Year Since 3%
Purchase...............
5th Year Since 2%
Purchase...............
6th Year Since 1%
Purchase...............
7th Year (or Later) Since
Purchase....................... None
In determining the applicability and rate of any contingent deferred sales
charge, it will be assumed that a redemption is made first of Class B shares
representing capital appreciation, next of shares representing the reinvestment
of dividends and capital gains distributions and finally of other shares held by
the shareholder for the longest period of time. The holding period of Class B
shares of the Fund acquired through an exchange with another Landmark Fund will
be calculated from the date that the Class B shares were initially acquired in
one of the other Landmark Funds, and Class B shares being redeemed will be
considered to represent, as applicable, capital appreciation or dividend and
capital gain distribution reinvestments in such other funds. This will result in
any contingent deferred sales charge being imposed at the lowest possible rate.
For federal income tax purposes, the amount of the contingent deferred sales
charge will reduce the gain or increase the loss, as the case may be, on the
amount realized on redemption. Any contingent deferred sales charges will be
paid to the Distributor.
Sales Charge Waivers - Class B Shares. The contingent deferred sales
charge will be waived for exchanges. In addition, the contingent deferred sales
charge will be waived for a total or partial redemption made within one year of
the death of the shareholder. This waiver is available where the deceased
shareholder is either the sole shareholder or owns the shares with his or her
spouse as a joint tenant with right of survivorship, and applies only to
redemption of shares held at the time of death. The contingent deferred sales
charge also will be waived in connection with:
(i) a lump sum or other distribution in the case of an Individual
Retirement Account ("IRA"), a self-employed individual retirement plan
(so-called "Keogh Plan") or a custodian account under Section 403(b) of the
Code, in each case following attainment of age 59 1/2,
(ii) a total or partial redemption resulting from any
distribution following retirement in the case of a tax-qualified
retirement plan, and
<PAGE>
(iii)a redemption resulting from a tax-free return of an excess
contribution to an IRA.
Contingent deferred sales charge waivers will be granted subject to
confirmation by a shareholder's Shareholder Servicing Agent of the shareholder's
status or holdings, as the case may be.
Securities dealers and other financial institutions may receive different
compensation with respect to sales of Class A and Class B shares. The
Distributor, at its expense, may from time to time provide additional
promotional incentives to brokers who sell shares of the Fund. In some
instances, these incentives may be offered to certain brokers who have sold or
may sell significant numbers of shares of the Fund.
EXCHANGES
Shares of the Fund may be exchanged for shares of the same class of other
Landmark Funds that are made available by a shareholder's Shareholder Servicing
Agent, or may be acquired through an exchange of shares of the same class of
those funds. No initial sales charge is imposed on shares being acquired through
an exchange unless Class A shares are being acquired and the sales charge of the
fund being exchanged into is greater than the current sales charge of the Fund
(in which case an initial sales charge will be imposed at a rate equal to the
difference). No contingent deferred sales charge is imposed on shares being
disposed of though an exchange; however, contingent deferred sales charges may
apply to redemptions of Class B shares acquired through an exchange.
Shareholders must place exchange orders through their Shareholder
Servicing Agents, and may do so by telephone if their account applications so
permit. For more information on telephone transactions see "Redemptions." All
exchanges will be effected based on the relative net asset values per share next
determined after the exchange order is received by the Distributor. See
"Valuation of Shares."
This exchange privilege may be modified or terminated at any time, upon at
least 60 days' notice when such notice is required by SEC rules, and is
available only in those jurisdictions where such exchanges legally may be made.
See the Statement of Additional Information for further details. Before making
any exchange, shareholders should contact their Shareholder Servicing Agents to
obtain more information and prospectuses of the Landmark Funds to be acquired
through the exchange.
For federal and (generally) state income tax purposes, an exchange is
treated as a sale of the shares exchanged and could result in gain or loss to
the shareholder making the exchange.
REDEMPTIONS
Fund shares may be redeemed at their net asset value next determined after
a redemption request in proper form is received by a shareholder's
<PAGE>
Shareholder Servicing Agent (subject to any applicable contingent deferred sales
charge). Shareholders may redeem shares of the Fund only by authorizing their
Shareholder Servicing Agents to redeem such shares on their behalf through the
Distributor. If a redeeming shareholder owns shares of more than one class,
Class A shares will be redeemed first unless the shareholder specifically
requests otherwise.
Redemptions by Mail. 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 received in proper
form.
Redemptions by Telephone. 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 Fund 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
his or her 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 shareholder will
bear all risk of loss relating to a redemption or exchange by telephone.
Payment of Redemptions. The proceeds of a redemption are paid in federal
funds normally on the next Business Day, but in any event within seven days. If
a shareholder requests redemption of shares which were purchased recently, the
Fund may delay payment until it is assured that good payment has been received.
In the case of purchases by check, this can take up to ten days. See
"Determination of Net Asset Value; Valuation of Securities; Additional Purchase
and Redemption Information" in the Statement of Additional Information regarding
the Fund's right to pay the redemption price in kind with securities (instead of
cash).
Reinstatement Privilege. Shareholders who have redeemed Class A shares may
reinstate their Fund account without a sales charge up to the dollar amount
redeemed (with a credit for any contingent deferred sales charge paid) by
purchasing Class A shares of the Fund within 30 days after the redemption. To
take advantage of this reinstatement privilege, shareholders must notify their
Shareholder Servicing Agents in writing at the time the privilege is exercised.
Questions about redemption requirements should be referred to the
shareholder's Shareholder Servicing Agent. The right of any shareholder to
receive payment with respect to any redemption may be suspended or the payment
of the redemption price postponed during any period in which the
<PAGE>
New York Stock Exchange is closed (other than weekends or holidays) or trading
on the Exchange is restricted or if an emergency exists.
DIVIDENDS AND DISTRIBUTIONS
Substantially all of the Fund's net income, if any, from dividends and
interest is paid to its shareholders of record as a dividend SEMIANNUALLY on or
about the last day of JUNE and December. The Fund's share of net realized
short-term and long-term capital gains, if any, will be distributed to the
Fund's shareholders at least annually, in December. The Fund may also make
additional distributions to its shareholders to the extent necessary to avoid
the application of the 4% non-deductible excise tax on certain undistributed
income and net capital gains of mutual funds.
Subject to the policies of the shareholder's Shareholder Servicing Agent,
a shareholder may elect to receive dividends and capital gains distributions in
either cash or additional shares of the same class issued at net asset value
without a sales charge. Distributions paid by the Fund with respect to Class A
shares generally will be higher than those paid with respect to Class B shares
because expenses attributable to Class B shares generally will be higher.
MANAGEMENT
TRUSTEES AND OFFICERS
The Fund is supervised by its Board of Trustees. The Portfolio is also
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 Fund are different from a majority of the disinterested Trustees
of the Portfolio. More information on the Trustees and officers of the Fund and
the Portfolio appears under "Management" in the Statement of Additional
Information.
INVESTMENT ADVISER
Citibank. The Fund draws on the strength and experience of Citibank.
Citibank offers a wide range of banking and investment services to customers
across the United States and throughout the world, and has been managing money
since 1822. Its portfolio managers are responsible for investing in money
market, equity and fixed income securities. Citibank and its affiliates manage
more than $73 billion in assets worldwide. Citibank is a wholly-owned subsidiary
of Citicorp. Citibank also serves as investment adviser to fifteen other
Landmark Funds or portfolios.
Citibank manages the Fund's assets pursuant to an investment advisory
agreement ("Advisory Agreement"). Citibank makes investment decisions subject to
policies set by the Trustees.
Pansy Phua and Shern Liang Tan, who are based in Citibank's
Singapore office, are the managers of the Fund. Ms. Phua is a
senior portfolio manager with responsibility for managing over
$850,000,000 in Asian equities. She joined Citibank in 1990. She
has a total of eighteen
<PAGE>
years of financial services experience. Prior to joining Citibank
she worked for Jardine-Fleming as an investment manager. Mr. Tan is
a portfolio manager in Citibank's Singapore office, whose
responsibilities include managing accounts invested in Asia-Pacific
equities. He joined Citibank in 1992.
Advisory Fees. For its services under the Advisory Agreement, the Adviser
receives investment advisory fees, which are accrued daily and paid monthly, of
1.00% of the Fund's average daily net assets on an annualized basis for the
Fund's then-current fiscal year. Although this investment advisory fee is
similar to those paid by other investment companies which also invest primarily
in non-U.S. issuers, it is higher than the investment advisory fee currently
being paid by most investment companies in general. The Trustees of the Fund
have determined that the Fund's investment advisory fee is reasonable in light
of the Fund's investment policy of investing primarily in non-U.S. issuers.
Banking Relationships. Citibank and its affiliates may have deposit, loan
and other relationships with the issuers of securities purchased on behalf of
the Fund, including outstanding loans to such issuers which may be repaid in
whole or in part with the proceeds of securities so purchased. Citibank has
informed the Fund that, in making its investment decisions, it does not obtain
or use material inside information in the possession of any division or
department of Citibank or in the possession of any affiliate of Citibank.
Bank Regulatory Matters. The Glass-Steagall Act prohibits certain
financial institutions, such as Citibank, from underwriting securities of
open-end investment companies, such as the Fund. Citibank believes that its
services under the Advisory Agreement 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 for the
Fund. If Citibank or its affiliates were to be prevented from acting as the
Adviser, sub-administrator or a Shareholder Servicing Agent, the Fund would seek
alternative means for obtaining these services. The Fund does not expect that
shareholders would suffer any adverse financial consequences as a result of any
such occurrence.
ADMINISTRATIVE SERVICES PLANS
The Fund and the Portfolio have administrative services plans
("Administrative Services Plans") which provide that the Fund and the Portfolio
may obtain the services of an administrator, a transfer agent, a custodian, a
fund accountant, and, in the case of the Fund, one or more Shareholder Servicing
Agents, and may enter into agreements providing for the payment of fees for such
services. Under the Fund's Administrative
<PAGE>
Services Plan, the total of the fees paid to the Fund's Administrator and
Shareholder Servicing Agents may not exceed 0.65% of the Fund's average daily
net assets on an annualized basis for the Fund's then-current fiscal year. This
limitation does not include any amounts payable under the Distribution Plans.
Within this overall limitation, individual fees may vary. Under the Portfolio's
Administrative Services Plan, fees paid to the Portfolio's Administrator may not
exceed 0.05% of the Portfolio's average daily net assets on an annualized basis
for the Portfolio's then-current fiscal year. See "Administrators," "Shareholder
Servicing Agents" and "Transfer Agent, Custodian and Fund Accountant."
ADMINISTRATORS
LFBDS and Signature Financial Group (Cayman), Ltd., either directly or
through a wholly-owned subsidiary ("SFG"), provide certain administrative
services to the Fund and the Portfolio under administrative services agreements.
These administrative services include providing general office facilities,
supervising the overall administration of the Fund and the Portfolio, and
providing persons satisfactory to the Boards of Trustees to serve as Trustees
and officers of the Fund and the Portfolio. Such Trustees and officers may be
directors, officers or employees of LFBDS, SFG or their affiliates.
For these services, the Administrators receive fees accrued daily and paid
monthly of 0.15% of the average daily net assets of the Fund and 0.05% of the
assets of the 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
has voluntarily agreed to waive a portion of the fees payable to it as necessary
to maintain the projected rate of total operating expenses. LFBDS has agreed to
pay certain expenses of the Fund. SFG has agreed to pay certain expenses of the
Portfolio. See "General Information - Expenses."
LFBDS and SFG are wholly-owned subsidiaries of Signature
Financial Group, Inc. "Landmark" is a service mark of LFBDS.
SUB-ADMINISTRATOR
Pursuant to sub-administrative services agreements, Citibank performs such
sub-administrative duties for the Fund and the Portfolio as from time to time
are agreed upon by Citibank and LFBDS. Citibank's compensation as
sub-administrator is paid by LFBDS.
SHAREHOLDER SERVICING AGENTS
The Fund had entered into separate shareholder servicing agreements with
each Shareholder Servicing Agent pursuant to which that Shareholder Servicing
Agent provides shareholder services, including answering customer inquiries,
assisting in processing purchase exchange and redemption transactions and
furnishing Fund communications to shareholders. For these services, each
Shareholder Servicing Agent receives a fee from the Fund of 0.25% per annum of
the average daily net assets of the Fund represented by shares owned by
investors for whom such Shareholder Servicing Agent
<PAGE>
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 Fund, 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 the 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.
TRANSFER AGENT, CUSTODIAN AND FUND ACCOUNTANT
State Street Bank and Trust Company ("State Street") acts as transfer
agent and dividend disbursing agent for the Fund. Investors Bank & Trust Company
acts as the custodian of the Fund's and the Portfolio's assets. Securities held
for the Fund or the Portfolio may be held by a sub-custodian bank approved by
Trustees. Signature Financial Services, Inc. provides fund accounting services
to the Fund and the Portfolio and calculates the daily net asset value for the
Fund and the Portfolio.
DISTRIBUTION ARRANGEMENTS
LFBDS is the distributor of shares of the Fund and also serves as
distributor for each of the other Landmark Funds and as a Shareholder Servicing
Agent for certain investors. LFBDS receives distribution fees from the Fund
pursuant to Distribution Plans adopted in accordance with Rule 12b-1 under the
Investment Company Act of 1940, as amended ("1940 Act"). As distributor, LFBDS
also collects the sales charges imposed on purchases of Class A shares and
collects any contingent deferred sales charges imposed on redemptions of Class A
and Class B shares. In those states where LFBDS is not a registered
broker-dealer, shares of the Fund are sold through Signature Broker-Dealer
Services, Inc., as dealer.
The Fund maintains two separate plans of distribution pertaining to Class
A shares and Class B shares (collectively "Plans"). The Class A Plan provides
that the Fund will pay the Distributor a monthly distribution fee at an annual
rate not to exceed 0.10% of the average daily net assets of the Class A shares.
In addition, the Class A Plan provides that the Fund may pay the Distributor a
monthly service fee at an annual rate not to exceed 0.25% of the average daily
net assets of the Class A shares. However, the Fund has not entered into any
agreement to pay this service fee to the Distributor. The Class A Plan also
permits the Fund to pay the Distributor an additional fee (not to exceed 0.05%
of the average daily net assets of the Class A shares) in anticipation of or as
reimbursement for print or electronic media advertising expenses incurred in
connection with the sale of Class A shares. The Fund does not anticipate paying
anything under this provision during the current fiscal year.
The Class B Plan provides that the Fund may pay the Distributor a monthly
distribution fee and a monthly service fee at annual rates not to exceed,
respectively, 0.75% and 0.25% of the average daily net assets
<PAGE>
represented by the Class B shares. Currently, the service fee for Class B shares
is 0.10% per annum of the average daily net assets represented by Class B
shares.
The Distributor uses the distribution fees under the Plans to offset the
Fund's marketing costs attributable to such classes, such as preparation of
sales literature, advertising, and printing and distributing prospectuses and
other shareholder materials to prospective investors. In addition, the
Distributor may use the distribution fees to pay costs related to distribution
activities, including employee salaries, bonuses and other overhead expenses.
The Distributor also uses the distribution fees under the Class B Plan to offset
the commissions it pays to brokers and other institutions for selling the Fund's
Class B shares. The Fund and the Distributor provide to the Trustees quarterly a
written report of amounts expended pursuant to the Plans and the purposes for
which the expenditures were made.
During the period they are in effect, the Plans and related distribution
agreements pertaining to each class of shares ("Distribution Agreements")
obligate the Fund to pay distribution fees to LFBDS as compensation for its
distribution activities, not as reimbursement for specific expenses incurred.
Thus, even if LFBDS's expenses exceed its distribution fees for the Fund, the
Fund will not be obligated to pay more than those fees and, if LFBDS's expenses
are less than such fees, it will retain its full fees and realize a profit. The
Fund will pay the distribution fees to LFBDS until either the applicable Plan or
Distribution Agreement is terminated or not renewed. In that event, LFBDS's
expenses in excess of distribution fees received or accrued through the
termination date will be LFBDS's sole responsibility and not obligations of the
Fund. In their annual consideration of the continuation of the Fund's Plans, the
Trustees will review each Plan and LFBDS's expenses for each class separately.
Each class of shares of the Fund has exclusive voting rights with respect
to the Plan for that class.
TAX MATTERS
This discussion of taxes is for general information only. Investors should
consult their own tax advisers about their particular situations.
The Fund intends to meet requirements of the Internal Revenue Code
applicable to regulated investment companies in order not to be liable for any
federal income taxes on income and gains distributed to Fund shareholders. The
Fund will distribute all of its net investment income and realized gains at
least annually.
Unless otherwise exempt, shareholders are required to pay federal income
tax on any dividends and other distributions received. This applies whether
dividends and distributions are received in cash or as additional shares.
Generally, distributions from the Fund's net investment income and short-term
capital gains will be taxed as ordinary income. A portion of distributions from
net investment income may be eligible for the dividends-received deduction
available to corporations.
<PAGE>
Distributions of net long-term capital gains will be taxed as such regardless of
how long the shares of the Fund have been held.
Early each year, the Fund will notify its shareholders of the amount and
tax status of distributions paid to shareholders for the preceding year.
Shareholders should consult their own tax advisers regarding the status of
their accounts under state and local laws.
PERFORMANCE INFORMATION
Fund performance may be quoted in advertising, shareholder reports and
other communications in terms of yield, effective yield or 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, and the value of the Fund's shares when redeemed
may be more or less than their original cost.
The Fund may provide its period and average annualized "total rates of
return." The "total rate of return" refers to the change in the value of an
investment in the Fund over a stated period which was made at the maximum public
offering price and reflects any change in net asset value per share and is
compounded to include the value of any shares purchased with any dividends or
capital gains declared during such period. Period total rates of return may be
"annualized." An "annualized" total rate of return assumes that the period total
rate of return is generated over a one-year period. These total rate of return
quotations may be accompanied by quotations which do not reflect the reduction
in value of the investment due to the initial or contingent deferred sales
charges, and which are thus higher.
The Fund may provide annualized "yield" and "effective yield" quotations.
The "yield" of the Fund refers to the income generated by an investment in the
Fund over a 30-day or one-month period (which period is stated in any such
advertisement or communication). This income is then annualized; that is, the
amount of income generated by the investment over that period is assumed to be
generated each month over a one-year period and is shown as a percentage of the
maximum public offering price on the last day of that period. The "effective
yield" is calculated similarly, but when annualized the income earned by the
investment during that 30-day or one-month period is assumed to be reinvested.
The effective yield is slightly higher than the yield because of the compounding
effect of this assumed reinvestment. A "yield" quotation, unlike a total rate of
return quotation, does not reflect changes in net asset value.
The Fund will include performance data for each class of Fund shares in
any advertisements, reports or communications including Fund performance data.
Of course, any fees charged by a shareholder's Shareholder Servicing Agent will
reduce that shareholder's net return on his or her investment. See the Statement
of Additional Information for more information concerning the calculation of
yield and total rate of return quotations for the Fund.
<PAGE>
GENERAL INFORMATION
ORGANIZATION
The Fund is a series of Landmark International Funds (the "Trust"). The
Trust is a Massachusetts business trust which was organized on August 7, 1990
and was known as Landmark International Equity Fund until its name was changed
effective May 5, 1995. The Trust is an open-end management investment company
registered under the 1940 Act.
The Fund is a diversified mutual fund. Under the 1940 Act, a diversified
mutual fund must invest at least 75% of its assets in cash and cash items, U.S.
Government securities, investment company securities and other securities
limited as to any one issuer to not more than 5% of the total assets of the
investment company and not more than 10% of the voting securities of the issuer.
Under Massachusetts law, shareholders of a business trust may, under
certain circumstances, be held personally liable as partners for the trust's
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the trust itself was unable to meet its
obligations.
The Portfolio is a series of The Premium Portfolios, a trust organized
under the laws of the State of New York. The Declaration of Trust of The Premium
Portfolios provides that the Fund and other entities investing in the Portfolio
are each liable for all obligations of the Portfolio. It is not expected that
the liabilities of the Portfolio would ever exceed its assets.
VOTING AND OTHER RIGHTS
The Trust may issue an unlimited number of shares, may create new series
of shares and may divide shares in each series into classes. Each share of the
Fund gives the shareholder one vote in Trustee elections and other matters
submitted to shareholders for vote. All shares of each series of the Trust have
equal voting rights except that, in matters affecting only a particular series
or class, only shares of that particular series or class are entitled to vote.
The Trust's Declaration of Trust provides that, at any meeting of
shareholders of the Fund, a Shareholder Servicing Agent may vote any shares as
to which it is the holder of record and which are otherwise not represented in
person or by proxy at the meeting proportionately in accordance with the votes
cast by holders of all shares otherwise represented at the meeting in person or
by proxy as to which that Shareholder Servicing Agent is the holder of record.
Any shares so voted by a Shareholder Servicing Agent are deemed represented at
the meeting for purposes of quorum requirements.
<PAGE>
The Fund's activities are supervised by the Trust's Board of Trustees. As
a Massachusetts business trust, the Trust is not required to hold annual
shareholder meetings. Shareholder approval will usually be sought only for
changes in the Fund's or the Portfolio's fundamental investment restrictions and
for the election of Trustees under certain circumstances. Trustees may be
removed by shareholders under certain circumstances. Each share of the Fund is
entitled to participate equally in dividends and other distributions and the
proceeds of any liquidation of the Fund except that, due to the differing
expenses borne by each class, dividends and proceeds generally will be lower for
Class B shares than for Class A shares.
CERTIFICATES
The Fund's Transfer Agent maintains a share register for
shareholders of record, i.e., Shareholder Servicing Agents. Share
certificates are not issued.
RETIREMENT PLANS
Investors may be able to establish new accounts in the Fund under one of
several tax-sheltered plans. Such plans include IRAs, Keogh or Corporate
Profit-Sharing and Money-Purchase Plans, 403(b) Custodian Accounts, and certain
other qualified pension and profit-sharing plans. Investors should consult with
their Shareholder Servicing Agents and tax and retirement advisers.
EXPENSES
LFBDS has agreed to pay the Fund's expenses (except for the fees paid
under the Fund's Administrative Services Agreement, Distribution Agreement and
Shareholder Servicing Agreements). LFBDS receives a fee from the Fund, in
addition to the administrative services and distribution fees, computed and paid
monthly at a percentage of the average daily net assets of the Fund for its
then-current fiscal year, such that immediately after any such payment the
aggregate expenses of the Fund (including the Fund's pro rata share of the
Portfolio's expenses) do not exceed an agreed upon rate, currently 1.85% for
Class A shares and 2.60% for Class B shares. This agreement may be terminated by
the Fund or LFBDS on not less than 30 days' nor more than 60 days' notice.
-------------------
The Statement of Additional Information dated the date hereof contains
more detailed information about the Fund, including information related to (i)
investment policies and restrictions, (ii) Trustees, officers, Adviser and
Administrators, (iii) securities transactions, (iv) the Fund's shares, including
rights and liabilities of shareholders, (v) the method used to calculate
performance information, (vi) programs for the purchase of shares, and (vii) the
determination of net asset value.
<PAGE>
APPENDIX A
PERMITTED INVESTMENTS AND INVESTMENT PRACTICES
Repurchase Agreements. The Fund may enter into repurchase agreements in
order to earn a return on temporarily available cash. Repurchase agreements are
transactions in which an institution sells the Fund a U.S. Government or other
security at one price, subject to the Fund's obligation to resell and the
selling institution's obligation to repurchase that security at a higher price
normally within a seven day period. There may be delays and risks of loss if the
seller is unable to meet its obligation to repurchase.
Reverse Repurchase Agreements. The Fund may enter into reverse repurchase
agreements. Reverse repurchase agreements involve the sale of securities held by
the Portfolio and the agreement by the Fund to repurchase the securities at an
agreed-upon price, date and interest payment. When the Fund enters into reverse
repurchase transactions, securities of a dollar amount equal in value to the
securities subject to the agreement will be maintained in a segregated account
with the Fund's custodian. The segregation of assets could impair the Fund's
ability to meet its current obligations or impede investment management if a
large portion of the Fund's assets are involved. Reverse repurchase agreements
are considered to be a form of borrowing.
Lending of Portfolio Securities. Consistent with applicable regulatory
requirements and in order to generate additional income, the Fund may lend its
portfolio securities to broker-dealers and other institutional borrowers. Such
loans must be callable at any time and continuously secured by collateral (cash
or U.S. Government securities) in an amount not less than the market value,
determined daily, of the securities loaned. It is intended that the value of
securities loaned by the Fund would not exceed 33-1/3% of the Fund's net assets.
In the event of the bankruptcy of the other party to a securities loan, a
repurchase agreement or a reverse repurchase agreement, the Fund could
experience delays in recovering either the securities lent or cash. To the
extent that, in the meantime, the value of the securities lent has increased or
the value of the securities purchased has decreased, the Fund could experience a
loss.
Restricted Securities. The Fund may purchase restricted securities that
are not registered for sale to the general public, but which can be resold to
institutional investors. Provided that a dealer or institutional trading market
in such securities exists, these restricted securities are not treated as
illiquid securities for purposes of the Fund's investment limitations.
Institutional trading in restricted securities is relatively new, and the
liquidity of the Portfolio's investments could be impaired if trading does not
develop or declines.
Private Placements and Illiquid Investments. The Fund may
invest up to 15% of its net assets in securities for which there is
no readily available market. These illiquid securities may include
privately placed
<PAGE>
restricted securities for which no institutional market exists. The absence of a
trading market can make it difficult to ascertain a market value for illiquid
investments. Disposing of illiquid investments may involve time-consuming
negotiation and legal expenses, and it may be difficult or impossible for the
Fund to sell them promptly at an acceptable price.
"When-Issued" Securities. In order to ensure the availability of suitable
securities, the Fund may purchase securities on a "when-issued" or on a "forward
delivery" basis, which means that the securities would be delivered to the Fund
at a future date beyond customary settlement time. Under normal circumstances,
the Fund takes delivery of the securities. In general, the Fund does not pay for
the securities until received and does not start earning interest until the
contractual settlement date. While awaiting delivery of the securities, the Fund
establishes a segregated account consisting of cash, cash equivalents or high
quality debt securities equal to the amount of the Fund's commitments to
purchase "when-issued" securities. An increase in the percentage of the Fund's
assets committed to the purchase of securities on a "when-issued" basis may
increase the volatility of its net asset value.
Currency Exchange Contracts. Forward currency exchange contracts may be
entered into for the Fund for the purchase or sale of non-U.S. currency for
hedging purposes against adverse rate changes or otherwise to achieve the Fund's
investment objective. A currency exchange contract allows a definite price in
dollars to be fixed for securities of non-U.S. issuers that have been purchased
or sold (but not settled) for the Fund. Entering into such exchange contracts
may result in the loss of all or a portion of the benefits which otherwise could
have been obtained from favorable movements in exchange rates. In addition,
entering into such contracts means incurring certain transaction costs and
bearing the risk of incurring losses if rates do not move in the direction
anticipated.
The Fund may write options on non-U.S. currencies for hedging purposes or
otherwise to achieve its investment objectives. For example, where the Fund
anticipates a decline in the value of the U.S. dollar value of a non-U.S.
security due to adverse fluctuations in exchange rates it could, instead of
purchasing a put option, write a call option on the relevant currency. If the
expected decline occurs, the option will most likely not be exercised, and the
diminution in value of the security held by the Fund will be offset by the
amount of the premium received.
APPENDIX B
CERTAIN INFORMATION ABOUT EMERGING ASIA COUNTRIES
(/R>
Under normal circumstances, at least 65% of the assets of the Fund will be
invested in securities of issuers located in Emerging Asia Countries. "Emerging
Asia Countries" include South Korea, Taiwan, the People's Republic of China,
India, Indonesia, Malaysia, Pakistan, the Philippines, Sri Lanka, Thailand and
Vietnam. Accordingly, investors
<PAGE>
in the Fund should be aware of the special factors affecting investment in
Emerging Asia Countries.
Political, Social and Economic Factors. Many of the Emerging Asia
Countries may be subject to a greater degree of economic, political and social
instability than is the case in the United States, Japan, and Western European
countries. Such instability may result from, among other things, the following:
(i) authoritarian governments or military involvement in political and economic
decision-making, including changes in government through extra-constitutional
means; (ii) popular unrest associated with demands for improved political,
economic and social conditions; (iii) internal insurgencies; (iv) hostile
relations with neighboring countries; and (v) ethnic, religious and racial
disaffection. Such social, political and economic instability could disrupt
financial markets in which the Fund invests and adversely affect the value of
the Fund's assets.
Few of the Emerging Asia Countries have western-style or fully democratic
governments. Often, the governments are authoritarian in nature and influenced
by security forces. Disparities of wealth, among other factors, have also led to
social unrest in some of the Emerging Asia Countries accompanied, in certain
cases, by violence and labor unrest. Ethnic, religious and racial disaffection,
as evidenced in India and Sri Lanka, have created social, economic and political
problems. Nevertheless, the region enjoys relative stability, while its rapid
economic development and other favorable conditions have helped ease these
tensions. In some countries new governments have been democratically elected and
are functioning effectively.
Several of the Emerging Asia Countries have or in the past have had
hostile relationships with neighboring nations or have experienced internal
insurgency. Thailand experienced border battles with Laos in 1988, and India is
engaged in border disputes with several of its neighbors, including the People's
Republic of China ("China") and Pakistan. An uneasy truce exists between North
Korea and South Korea. Unification of North Korea and South Korea could have a
detrimental effect on the economy of South Korea. China continues to claim
sovereignty over Taiwan. China assumes sovereignty over Hong Kong, currently a
British colony, in 1997. China has threatened that current and future commercial
contracts in Hong Kong will be invalidated unless certain proposals for limited
democracy are retracted.
Governments in certain of the Emerging Asia Countries participate to a
significant degree through ownership interests or regulation in their respective
economies. Action by these governments could have a significant adverse effect
on market prices of securities and payment of dividends.
The economies of most of the Emerging Asia Countries are heavily dependent
upon trade and require foreign investment for continued development. They are
accordingly affected by protective trade barriers and the economic conditions of
their trade and investment partners, principally the United States, Japan, China
and the European
<PAGE>
Economic Community. The enactment by the United States or other principal
trading partners of protectionist trade legislation, reduction of foreign
investment in the local economies and general declines in the international
securities markets could have a significant adverse effect upon the securities
markets of the Emerging Asia Countries. In addition, the economies of some of
the Emerging Asia Countries, Indonesia and Malaysia, for example, are vulnerable
to weakness in world prices for their commodity exports, including crude oil. In
the Emerging Asia Countries, there may be the possibility of expropriations,
confiscatory taxation, political, economic or social instability or diplomatic
developments which could adversely affect assets of the Fund held in those
countries.
Investment and Repatriation Restrictions. Foreign investment in the
securities markets of several of the Emerging Asia Countries is restricted or
controlled in varying degrees. These restrictions may limit or preclude
investment in certain of the Emerging Asia Countries and may increase expenses
of the Fund. In addition, the repatriation of both investment income and capital
from several of the Emerging Asia Countries is subject to restrictions such as
the need for certain government consents.
In India, Indonesia, Korea, Malaysia, Singapore and Thailand, the Fund may
be limited by government regulation or a company's charter to a maximum
percentage of equity ownership in any one company. In the Philippines, the Fund
may only invest in "B" shares of Philippine issuers, which are reserved for
foreigners, and the market prices, liquidity and rights of which may vary from
shares owned by nationals. Similarly, in China, the Fund may only invest in "B"
shares of securities traded on the Shanghai Securities Exchange and The Shenzhen
Stock Exchange, currently the two officially recognized securities exchanges in
China. "B" shares traded on the Shanghai Securities Exchange must be settled in
U.S. dollars and those traded on The Shenzhen Stock Exchange must be settled in
Hong Kong dollars.
All foreign investors, including the Fund, currently are limited in their
ability to invest directly in securities of Taiwanese companies. However, the
government of Taiwan has authorized the organization of investment funds, that
may or may not be listed on any securities exchange, to permit indirect foreign
investment in Taiwanese securities. Prior to 1992, foreign investment in South
Korea was limited to a few investment funds that had been granted a license from
the government of South Korea. Since 1992, direct foreign investment in
individual stocks in South Korea has been officially permitted within specified
limits. Investment in investment funds may involve the payment of management
expenses and payment of substantial premiums above the value of such companies'
portfolio and is subject to limitations under the 1940 Act and market
availability. The Fund does not intend to invest in such funds unless, in the
judgment of the Adviser, the potential benefits of such investment justify the
payment of any applicable premium and expenses.
<PAGE>
Other Factors. Investments in securities of issuers in the Emerging Asia
Countries are subject to other factors, including those described under "Risk
Factors." Additional information with respect to the Emerging Asia Countries is
included in the Statement of Additional Information.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR
ITS DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE
MADE.
<PAGE>
SHAREHOLDER SERVICING AGENTS
FOR CITIBANK NEW YORK RETAIL BANKING AND
BUSINESS AND PROFESSIONAL CUSTOMERS:
Citibank, N.A.
450 West 33rd Street, New York, NY 10001
(212) 564-3456 or (800) 846-5300
FOR CITIGOLD CUSTOMERS:
Citigold
666 Fifth Avenue, New York, NY 10150-5130
Call Your Account Officer or (212) 974-0900 or (800) 285-1701
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,
Investment Specialist or (212) 559-5959
FOR CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY l0043
(212) 559-7117
FOR NORTH AMERICAN INVESTOR SERVICES CLIENTS:
Citibank, N.A.
111 Wall Street, New York, NY l0094
Call Your Account Manager or (212) 657-9100
FOR CITICORP INVESTMENT SERVICES CUSTOMERS:
Citicorp Investment Services
One Court Square, Long Island City, NY 11120
Call Your Investment Consultant or (800) 846-5200
(212) 736-8170 in New York City
<PAGE>
LANDMARK EMERGING ASIAN MARKETS EQUITY FUND
TRUSTEES AND OFFICERS
Philip W. Coolidge
President*
H.B. Alvord
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
C. Oscar Morong, Jr.
Donald B. Otis
E. Kirby Warren
William S. Woods, Jr.
SECRETARY AND TREASURER
James B. Craver*
ASSISTANT TREASURER
Barbara M. O'Dette*
ASSISTANT SECRETARY
Molly S. Mugler*
*Affiliated Person of Administrator and Distributor
- -------------------------------------------------------------
INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043
ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679
TRANSFER AGENT
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
CUSTODIAN
Investors Bank & Trust Company
One Lincoln Plaza, Boston, MA 02111
AUDITORS
Price Waterhouse LLP
160 Federal Street, Boston, MA 02110
LEGAL COUNSEL
Bingham, Dana & Gould
150 Federal Street, Boston, MA 02110
- -------------------------------------------------------------
SHAREHOLDER SERVICING AGENTS
(See Inside of Cover)
<PAGE>
Statement of
Additional Information
June , 1995
LANDMARK EMERGING ASIAN MARKETS EQUITY FUND
(A member of the LandmarkSM Family of CLASS A AND B SHARES
Funds)
Landmark Emerging Asian Markets Equity Fund (the "Fund") is a series of
Landmark International Funds (the "Trust"). The Trust was known as Landmark
International Equity Fund until its name was changed effective May 5, 1995. The
address and telephone number of the Trust are 6 St. James Avenue, Boston,
Massachusetts 02116, (617) 423-1679. The Trust invests all of the investable
assets of the Fund in the Emerging Asian Markets Equity Portfolio (the
"Portfolio"), which is a series of The Premium Portfolios (the "Portfolio
Trust"). The address of the Portfolio Trust is Elizabethan Square, George Town,
Grand Cayman, British West Indies.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED 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 Fund 2
2. Investment Objective, Policies and Restrictions 3
3. Performance Information 15
4. Determination of Net Asset Value; Valuation of
Securities; Additional Purchase and Redemption Information 16
5. Management 19
6. Portfolio Transactions 28
7. Description of Shares, Voting Rights and Liabilities 29
8. Certain Additional Tax Matters 32
9. Independent Accountants 33
This Statement of Additional Information sets forth information which may
be of interest to investors but which is not necessarily included in the Fund's
Prospectus, dated June __, 1995 by which shares of the Fund are offered. This
Statement of Additional Information should be read in conjunction with the
Prospectus, a copy of which may be obtained by an investor without charge by
contacting the Fund's Distributor (see inside back cover for address and phone
number).
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.
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1. THE FUND
Landmark International Funds (the "Trust") is an open-end management
investment company that was organized as a business trust under the laws of the
Commonwealth of Massachusetts on August 7, 1990. This Statement of Additional
Information describes shares of the Landmark Emerging Asian Markets Equity Fund
(the "Fund"), which is a diversified series of the Trust. References in this
Statement of Additional Information to the "Prospectus" are to the Prospectus,
dated June __, 1995, of the Trust by which shares of the Fund are offered.
The Trust seeks the investment objective of the Fund by investing all of
its investable assets in the Emerging Asian Markets Equity Portfolio (the
"Portfolio"). The Portfolio is a series of The Premium Portfolios (the
"Portfolio Trust") and is an open-end, diversified management investment
company. The Portfolio has the same investment objective and policies as the
Fund.
Citibank, N.A. ("Citibank" or the "Adviser") is investment adviser to the
Portfolio. The Adviser manages the investments of the Portfolio from day to day
in accordance with the Portfolio's investment objectives and policies. The
selection of investments for the Portfolio and the way they are managed depend
on the conditions and trends in the economy and the financial marketplaces.
The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS" or the
"Administrator"), the administrator of the Fund (the "Administrator"), and
Signature Financial Group (Cayman), Ltd. ("SFG"), either directly or through a
wholly-owned subsidiary, the administrator of the Portfolio (the "Portfolio
Administrator"), supervise the overall administration of the Fund and the
Portfolio, respectively. The Boards of Trustees of the Trust and the Portfolio
Trust provide broad supervision over the affairs of the Fund and the Portfolio,
respectively. Shares of the Fund are continuously sold by LFBDS, the Fund's
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 (collectively,
"Shareholder Servicing Agents"). Shares of the Fund are sold at net asset value,
plus, in the case of Class A Shares, a sales charge that may be reduced on
purchases involving substantial amounts and that may be eliminated in certain
circumstances. LFBDS receives a distribution fee from the Fund pursuant to a
Distribution Plan adopted with respect to each class of shares of the Fund in
accordance with Rule 12b-1 under the U.S. Investment Company Act of 1940, as
amended (the "1940 Act"). LFBDS also receives a service fee from the assets of
the Fund represented by Class B shares pursuant to the Distribution Plan adopted
with respect to Class B shares of the Fund.
<PAGE>
2. INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term capital growth. Dividend
income, if any is incidental to this investment objective.
The investment objective of the Fund may be changed without approval by
the Fund's shareholders, but shareholders will be given written notice at least
30 days before any change is implemented. Of course, there can be no assurance
that the Fund will achieve its investment objective.
INVESTMENT POLICIES
The Fund seeks its investment objective by investing all of its investable
assets in the Portfolio, which has the same investment objective and policies as
the Fund. The Prospectus contains a discussion of the various types of
securities in which the Fund and the Portfolio may invest and the risks involved
in such investments. The following supplements the information contained in the
Prospectus concerning the investment objective, policies and techniques of the
Fund and the Portfolio. Since the investment characteristics of the Fund will
correspond directly to those of the Portfolio, the following is a supplementary
discussion with respect to the Portfolio.
The Portfolio's policy is to invest mainly in equity securities of issuers
located in Asian countries with emerging markets and developing economies. These
countries include South Korea, Taiwan, the People's Republic of China, India,
Indonesia, Malaysia, Pakistan, the Philippines, Sri Lanka, Thailand and Vietnam.
These countries are called, collectively, the "Emerging Asia Countries." Under
normal circumstances, at least sixty-five percent of the Portfolio's total
assets is invested in equity securities of issuers in at least three of the
Emerging Asia Countries.
The Portfolio Trust has adopted the following policies with respect to the
Portfolio's investments in (i) warrants and (ii) securities of issuers with less
than three years' continuous operation. The Portfolio Trust's purchases of
warrants for the Portfolio will not exceed 5% of the Portfolio's net assets.
Included within that amount, but not exceeding 2% of its net assets, may be
warrants which are not listed on the New York Stock Exchange or the American
Stock Exchange. Any such warrants will be valued at their market value except
that warrants which are attached to securities at the time such securities are
acquired for the Portfolio will be deemed to be without value for the purpose of
this restriction. The Portfolio Trust will not invest more than 5% of the
Portfolio's assets in companies which, including their respective predecessors,
have a record of less than three years' continuous operation.
<PAGE>
The Trust may withdraw the investment of the Fund from the 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, the Fund's assets
would be invested in accordance with the investment policies described herein
with respect to the Portfolio. The policies described above and those described
below are not fundamental and may be changed without shareholder approval.
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by
securities in which the Portfolio may otherwise invest. Repurchase agreements
are agreements by which the Portfolio purchases a security and simultaneously
commits to resell that security to the seller (which is usually a member bank of
the U.S. Federal Reserve System or a member firm of the New York Stock Exchange
(or a subsidiary thereof)) at an agreed-upon date within a number of days
(usually not more than seven) from the date of purchase. The resale price
reflects the purchase price plus an agreed-upon market rate of interest which is
unrelated to the coupon rate or maturity of the purchased security. A repurchase
agreement involves the obligation of the seller to pay the agreed upon price,
which obligation is in effect secured by the value of the underlying security,
usually U.S. Government or Government agency issues. Under the 1940 Act,
repurchase agreements may be considered to be loans by the buyer. The
Portfolio's risk is limited to the ability of the seller to pay the agreed-upon
amount on the delivery date. If the seller defaults, the underlying security
constitutes collateral for the seller's obligation to pay although the Portfolio
may incur certain costs in liquidating this collateral and in certain cases may
not be permitted to liquidate this collateral. All repurchase agreements entered
into by the Portfolio are fully collateralized, with such collateral being
marked to market daily.
RULE 144A SECURITIES
The Portfolio Trust may purchase securities for the Portfolio that are not
registered ("restricted securities") under the Securities Act of 1933 (the
"Securities Act"), but can be offered and sold to "qualified institutional
buyers" under Rule 144A under the Securities Act. However, the Portfolio Trust
does not invest more than 15% of the Portfolio's net assets in illiquid
investments, which include securities for which there is no readily available
market, securities subject to contractual restrictions on resale and restricted
securities, unless the Trustees determine, based on the trading markets for the
specific restricted security, that it is liquid. The Portfolio Trust's Trustees
may adopt guidelines and delegate to the Adviser the daily function of
determining and monitoring liquidity of restricted securities. The Portfolio
Trust's Trustees, however, retain oversight and are ultimately responsible for
the determinations.
<PAGE>
SECURITIES OF NON-U.S. ISSUERS
The Portfolio may invest in securities of non-U.S. issuers.
Investing in securities issued by companies whose principal
business activities are outside the United States may involve
significant risks not present in U.S. investments. For example,
the value of such securities fluctuates based on the relative
strength of the U.S. dollar. In addition, there is generally
less publicly available information about non-U.S. issuers,
particularly those not subject to the disclosure and reporting
requirements of the U.S. securities laws. Non-U.S. issuers are
generally not bound by uniform accounting, auditing and financial
reporting requirements comparable to those applicable to U.S.
issuers. Investments in securities of non-U.S. issuers also
involve the risk of possible adverse changes in investment or
exchange control regulations, expropriation or confiscatory
taxation, limitations on the removal of funds or other assets of
the Portfolio, political or financial instability or diplomatic
and other developments which would affect such investments.
Further, economies of other countries or areas of the world may
differ favorably or unfavorably from the economy of the U.S.
It is anticipated that in most cases the best available
market for securities of non-U.S. issuers would be on exchanges
or in over-the-counter markets located outside the U.S. Non-U.S.
securities markets, while growing in volume and sophistication,
are generally not as developed as those in the U.S., and
securities of some non-U.S. issuers (particularly those located
in developing countries) may be less liquid and more volatile
than securities of comparable U.S. companies. Non-U.S. security
trading practices, including those involving securities
settlement where the Portfolio's assets may be released prior to
receipt of payments, may expose the Portfolio to increased risk
in the event of a failed trade or the insolvency of a non-U.S.
broker-dealer. In addition, non-U.S. brokerage commissions are
generally higher than commissions on securities traded in the
U.S. and may be non-negotiable. In general, there is less
overall governmental supervision and regulation of non-U.S.
securities exchanges, brokers and listed companies than in the
U.S.
Investments in closed-end investment companies which primarily hold
securities of non-U.S. issuers may entail the risk that the market value of such
investments may be substantially less than their net asset value and that there
would be duplication of investment management and other fees and expenses.
American Depositary Receipts ("ADRs"), European Depositary
Receipts ("EDRs"), Global Depositary Receipts ("GDRs") and other
forms of depositary receipts for securities of non-U.S. issuers
provide an alternative method for the Portfolio to make non-U.S.
investments. These securities are not usually denominated in the
same currency as the securities into which they may be
converted. Generally, ADRs, in registered form, are designed for
use in U.S. securities markets and
<PAGE>
EDRs and GDRs, in bearer form, are designed for use in European and global
securities markets. ADRs are receipts typically issued by a U.S. bank or trust
company evidencing ownership of the underlying securities. EDRs and GDRs are
European and global receipts, respectively, evidencing a similar arrangement.
The Portfolio may invest in securities of non-U.S. issuers that impose
restrictions on transfer within the United States or to United States persons.
Although securities subject to such transfer restrictions may be marketable
abroad, they may be less liquid than securities of non-U.S. issuers of the same
class that are not subject to such restrictions.
CURRENCY EXCHANGE TRANSACTIONS
Because the Portfolio may buy and sell securities
denominated in currencies other than the U.S. dollar, and receive
interest, dividends and sale proceeds in currencies other than
the U.S. dollar, the Portfolio may enter into currency exchange
transactions to convert U.S. currency to non-U.S. currency and
non-U.S. currency to U.S. currency, as well as convert one
non-U.S. currency to another non-U.S. currency. The Portfolio
either enters into these transactions on a spot (i.e., cash) basis
at the spot rate prevailing in the currency exchange markets, or
uses forward contracts to purchase or sell non-U.S. currencies.
The Portfolio may also enter into currency hedging transactions
in an attempt to protect the value of its assets as measured in
U.S. dollars from unfavorable changes in currency exchange rates
and control regulations. (Although the Portfolio's assets are
valued daily in terms of U.S. dollars, the Portfolio Trust does
not intend to convert the Portfolio's holdings of non-U.S.
currencies into U.S. dollars on a daily basis.) The Portfolio
does not currently intend to speculate in currency exchange rates
or forward contracts.
The Portfolio may convert currency on a spot basis from time to time, and
investors should be aware of the costs of currency conversion. Although currency
exchange dealers do not charge a fee for conversion, they do realize a profit
based on the difference (the "spread") between the prices at which they are
buying and selling various currencies. Thus, a dealer may offer to sell a
currency at one rate, while offering a lesser rate of exchange should the
Portfolio desire to resell that currency to the dealer.
A forward contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days from the date
of the contract, agreed upon by the parties, at a price set at the time of the
contract. These contracts are traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their customers. A
forward
<PAGE>
contract generally has no deposit requirement, and no fees or
commissions are charged at any stage for trades.
When the Portfolio enters into a contract for the purchase
or sale of a security denominated in a non-U.S. currency, it may
desire to "lock in" the U.S. dollar price of the security. By
entering into a forward contract for the purchase or sale, for a
fixed amount of U.S. dollars, of the amount of non-U.S. currency
involved in the underlying security transaction, the Portfolio
will be able to protect against a possible loss resulting from an
adverse change in the relationship between the U.S. dollar and
the non-U.S. currency during the period between the date the
security is purchased or sold and the date on which payment is
made or received.
When the Adviser believes that the currency of a particular country may
suffer a substantial decline against the U.S. dollar, the Portfolio may enter
into a forward contract to sell, for a fixed amount of U.S. dollars, the amount
of non-U.S. currency approximating the value of some or all of the Portfolio's
securities denominated in such non-U.S. currency. The precise matching of the
forward contract amounts and the value of the securities involved is not
generally possible since the future value of such securities in non-U.S.
currencies changes as a consequence of market movements in the value of those
securities between the date the forward contract is entered into and the date it
matures. The projection of a short-term hedging strategy is highly uncertain.
The Portfolio does not enter into such forward contracts or maintain a net
exposure to such contracts where the consummation of the contracts obligates the
Portfolio to deliver an amount of non-U.S. currency in excess of the value of
the Portfolio's securities or other assets denominated in that currency. Under
normal circumstances, consideration of the prospect for currency parities will
be incorporated in the investment decisions made with regard to overall
diversification strategies. However, the Adviser believes that it is important
to have the flexibility to enter into such forward contracts when it determines
that the best interests of the Portfolio will be served.
The Portfolio generally would not enter into a forward contract with a
term greater than one year. At the maturity of a forward contract, the Portfolio
will either sell the security and make delivery of the non-U.S. currency, or
retain the security and terminate its contractual obligation to deliver the
non-U.S. currency by purchasing an "offsetting" contract with the same currency
trader obligating it to purchase, on the same maturity date, the same amount of
the non-U.S. currency. If the Portfolio retains the security and engages in an
offsetting transaction, the Portfolio will incur a gain or a loss (as described
below) to the extent that there has been movement in forward contract prices. If
the Portfolio engages in an offsetting transaction, it may subsequently enter
into a new forward contract to sell the non-U.S. currency. Should forward prices
decline during the
<PAGE>
period between the date the Portfolio enters into a forward contract for the
sale of the non-U.S. currency and the date it enters into an offsetting contract
for the purchase of such currency, the Portfolio will realize a gain to the
extent the selling price of the currency exceeds the purchase price of the
currency. Should forward prices increase, the Portfolio will suffer a loss to
the extent that the purchase price of the currency exceeds the selling price of
the currency.
It is impossible to forecast with precision the market value of the
Portfolio's securities at the expiration of a forward contract. Accordingly, it
may be necessary for the Portfolio to purchase additional non-U.S. currency on
the spot market if the market value of the security is less than the amount of
non-U.S. currency the Portfolio is obligated to deliver and if a decision is
made to sell the security and make delivery of such currency. Conversely, it may
be necessary to sell on the spot market some of the non-U.S. currency received
upon the sale of the security if its market value exceeds the amount of such
currency the Portfolio is obligated to deliver.
The Portfolio may also purchase put options on a non-U.S.
currency in order to protect against currency rate fluctuations.
If the Portfolio purchases a put option on a non-U.S. currency
and the value of the U.S. currency declines, the Portfolio will
have the right to sell the non-U.S. currency for a fixed amount
in U.S. dollars and will thereby offset, in whole or in part, the
adverse effect on the Portfolio which otherwise would have
resulted. Conversely, where a rise in the U.S. dollar value of
another currency is projected, and where the Portfolio
anticipates investing in securities traded in such currency, the
Portfolio may purchase call options on the non-U.S. currency.
The purchase of such options could offset, at least partially, the effects
of adverse movements in exchange rates. However, the benefit to the Portfolio
from purchases of non-U.S. currency options will be reduced by the amount of the
premium and related transaction costs. In addition, where currency exchange
rates do not move in the direction or to the extent anticipated, the Portfolio
could sustain losses on transactions in non-U.S. currency options which would
require it to forgo a portion or all of the benefits of advantageous changes in
such rates.
<PAGE>
Similarly, instead of purchasing a call option to hedge against an
anticipated increase in the cost of a non-U.S. security to be acquired because
of an increase in the U.S. dollar value of the currency in which the underlying
security is primarily traded, the Portfolio could write a put option on the
relevant currency which, if rates move in the manner projected, will expire
unexercised and allow the Portfolio to hedge such increased cost up to the
amount of the premium. However, the writing of a currency option will constitute
only a partial hedge up to the amount of the premium, and only if rates move in
the expected direction. If this does not occur, the option may be exercised and
the Portfolio would be required to purchase or sell the underlying currency at a
loss which may not be offset by the amount of the premium. Through the writing
of options on currencies, the Portfolio also may be required to forgo all or a
portion of the benefits which might otherwise have been obtained from favorable
movements in exchange rates.
Put and call options on non-U.S. currencies written by the Portfolio will
be covered by segregation of cash, short-term money market instruments or high
quality debt securities in an account with the custodian in an amount sufficient
to discharge the Portfolio's obligations with respect to the option, by
acquisition of the non-U.S. currency or of a right to acquire such currency (in
the case of a call option) or the acquisition of a right to dispose of the
currency (in the case of a put option), or in such other manner as may be in
accordance with the requirements of any exchange on which, or the counterparty
with which, the option is traded and applicable laws and regulations.
Investing in ADRs presents many of the same risks regarding currency
exchange rates as investing directly in securities denominated in currencies
other than the U.S. dollar. Because the securities underlying ADRs are traded
primarily in non-U.S. currencies, changes in currency exchange rates will affect
the value of ADRs. For example, a decline in the U.S. dollar value of another
currency in which securities are primarily traded will reduce the U.S. dollar
value of such securities, even if their value in the other currency remains
constant, and thus will reduce the value of the ADRs covering such securities.
The Portfolio may employ any of the above described non-U.S. currency hedging
techniques to protect the value of its assets invested in ADRs.
The Portfolio's dealings in non-U.S. currency contracts are limited to the
transactions described above. Of course, the Portfolio is not required to enter
into such transactions and does not do so unless deemed appropriate by the
Adviser. It should also be realized that these methods of protecting the value
of the Portfolio's securities against a decline in the value of a currency do
not eliminate fluctuations in the underlying prices of the securities.
Additionally, although such contracts tend to minimize the risk of loss due to a
decline in the value of the hedged currency, they also tend to limit any
potential gain which might result should the value of such currency increase.
<PAGE>
The Portfolio has established procedures consistent with policies of the
Securities and Exchange Commission (the "SEC") concerning forward contracts.
Since those policies currently recommend that an amount of the Portfolio's
assets equal to the amount of the purchase be held aside or segregated to be
used to pay for the commitment, the Portfolio expects always to have cash, cash
equivalents or high quality debt securities available sufficient to cover any
commitments under these contracts or to limit any potential risk.
SHORT SALES "AGAINST THE BOX"
In a short sale, the Portfolio sells a borrowed security and has a
corresponding obligation to the lender to return the identical security. The
Portfolio, in accordance with applicable investment restrictions, may engage in
short sales only if at the time of the short sale it owns or has the right to
obtain, at no additional cost, an equal amount of the security being sold short.
This investment technique is known as a short sale "against the box."
In a short sale, the seller does not immediately deliver the securities
sold and is said to have a short position in those securities until delivery
occurs. If the Portfolio engages in a short sale, the collateral for the short
position is maintained for the Portfolio by the custodian or qualified
sub-custodian. While the short sale is open, an amount of securities equal in
kind and amount to the securities sold short or securities convertible into or
exchangeable for such equivalent securities is maintained in a segregated
account for the Portfolio. These securities constitute the Portfolio's long
position.
The Portfolio does not engage in short sales against the box for
investment purposes. The Portfolio may, however, make a short sale against the
box as a hedge, when it believes that the price of a security may decline,
causing a decline in the value of a security owned by the Portfolio (or a
security convertible or exchangeable for such security), or when the Portfolio
wants to sell the security at an attractive current price, but also wishes to
defer recognition of gain or loss for federal income tax purposes or for
purposes of satisfying certain tests applicable to regulated investment
companies under the Internal Revenue Code. In such case, any future losses in
the Portfolio's long position should be reduced by a gain in the short position.
Conversely, any gain in the long position should be reduced by a loss in the
short position. The extent to which such gains or losses are reduced depends
upon the amount of the security sold short relative to the amount the Portfolio
owns. There are certain additional transaction costs associated with short sales
against the box, but the Portfolio endeavors to offset these costs with the
income from the investment of the cash proceeds of short sales.
<PAGE>
The Adviser does not expect that more than 40% of the Portfolio's total
assets would be involved in short sales against the box. The Adviser does not
currently intend to engage in such sales.
LENDING OF SECURITIES
Consistent with applicable regulatory requirements and in order to
generate income, the Portfolio may lend its securities to broker-dealers and
other institutional borrowers. Such loans will usually be made only to member
banks of the U.S. Federal Reserve System and to member firms of the New York
Stock Exchange (and subsidiaries thereof). Loans of securities would be secured
continuously by collateral in cash, cash equivalents, or U.S. Treasury
obligations maintained on a current basis at an amount at least equal to the
market value of the securities loaned. The cash collateral would be invested in
high quality short-term instruments. The Portfolio would have the right to call
a loan and obtain the securities loaned at any time on customary industry
settlement notice (which will not usually exceed five days). During the
existence of a loan, the Portfolio would continue to receive the equivalent of
the interest or dividends paid by the issuer on the securities loaned and would
also receive compensation based on investment of the collateral. The 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. If the
Adviser determines to make loans, it is not intended that the value of the
securities loaned by the Portfolio would exceed 33 1/3% of the value of its net
assets.
WHEN-ISSUED SECURITIES
The Portfolio may purchase securities on a "when-issued" or on a "forward
delivery" basis. It is expected that, under normal circumstances, the Portfolio
would take delivery of such securities. When the Portfolio commits to purchase a
security on a "when-issued" or on a "forward delivery" basis, it sets up
procedures consistent with SEC policies. Since those policies currently require
that an amount of the Portfolio's assets equal to the amount of the purchase be
held aside or segregated to be used to pay for the commitment, the Portfolio
will always have cash, cash equivalents or high quality debt securities
sufficient to cover any commitments or to limit any potential risk. However,
even though the Portfolio does not intend to make such purchases for speculative
purposes and intends to adhere to the
<PAGE>
provisions of SEC policies, purchases of securities on such bases may involve
more risk than other types of purchases. For example, the Portfolio may have to
sell assets which have been set aside in order to meet redemptions. Also, if the
Adviser determines it is advisable as a matter of investment strategy to sell
the "when-issued" or "forward delivery" securities, the Portfolio would be
required to meet its obligations from the then available cash flow or the sale
of securities, or, although it would not normally expect to do so, from the sale
of the "when-issued" or "forward delivery" securities themselves (which may have
a value greater or less than the Portfolio's payment obligation).
INVESTMENT RESTRICTIONS
FUNDAMENTAL RESTRICTIONS
The Trust, on behalf of the Fund, and the Portfolio Trust, on behalf of
the Portfolio, each have adopted the following policies which may not be changed
with respect to the Fund or the Portfolio, as the case may be, without approval
by holders of a majority of the outstanding voting securities of the Fund or the
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 at which 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 Portfolio. The term "voting securities" as used in this paragraph
has the same meaning as in the 1940 Act.
Neither the Portfolio nor the Fund may:
(1) Borrow money, except that as a temporary measure for extraordinary or
emergency purposes it may borrow from banks in an amount not to exceed 1/3 of
the current value of its respective net assets, including the amount borrowed
(and neither the Portfolio nor the Fund may purchase any securities at any time
at which borrowings exceed 5% of the total assets of the Portfolio or the Fund,
taken at market value). It is intended that the Fund or the Portfolio would
borrow money only from banks and only to accommodate requests for the repurchase
of shares of the Fund or beneficial interests in the Portfolio while effecting
an orderly liquidation of portfolio securities.
(2) Purchase any security or evidence of interest therein on margin,
except that 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 another registered investment company
having the same investment objectives and policies and substantially the same
investment restrictions as those with
<PAGE>
respect to the Fund (a "Qualifying Portfolio") and except insofar as the
Portfolio may technically be deemed an underwriter under the Securities Act in
selling a security.
(4) Make loans to other persons except (a) through the lending of its
portfolio securities, but not in excess of 33 1/3%, of the Fund's or the
Portfolio's net assets,(b) through the use of fixed time deposits or repurchase
agreements or the purchase of short-term obligations or (c) by purchasing all or
a portion of an issue of debt securities of types commonly distributed privately
to financial institutions; for purposes of this paragraph 4 the purchase of
short-term commercial paper or a portion of an issue of debt securities which
are part of an issue to the public 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 foregoing shall not be deemed to preclude the
Fund and the Portfolio from investing in futures contracts, and the 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 and the Portfolio).
(6) With respect to 75% of the Fund's or the Portfolio's total assets,
purchase securities of any issuer if such purchase at the time thereof would
cause more than 5% of the Fund's or the Portfolio's assets (taken at market
value) to be invested in the securities of such issuer (other than securities or
obligations issued or guaranteed by the United States or any agency or
instrumentality of the United States); provided that, for purposes of this
restriction the issuer of an option or futures contract shall not be deemed to
be the issuer of the security or securities underlying such contract; and
further provided that the Fund may invest all or substantially all of its assets
in a Qualifying Portfolio.
(7) With respect to 75% of the total assets of the Fund or the Portfolio,
purchase securities of any issuer if such purchase at the time thereof would
cause more than 10% of the voting securities of such issuer to be held by the
Fund, except that all the assets of the Fund may be invested in a Qualifying
Portfolio.
(8) Concentrate its investments in any particular industry, but the Fund
may invest all of its assets in a Qualifying Portfolio (except that positions in
futures or options contracts shall not be subject to this restriction).
(9) 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
<PAGE>
appropriate to evidence a debt incurred without violating Investment Restriction
(1) above.
STATE AND FEDERAL RESTRICTIONS
In order to comply with certain state and federal statutes and policies
neither the Fund nor the Portfolio does as a matter of operating policy:
(i) borrow money for any purpose in excess of 10% of the net assets of the
Fund or Portfolio (taken at cost) (the Fund and the Portfolio will not purchase
any securities for the Fund or Portfolio at any time at which borrowings exceed
5% of the total assets of the Fund or Portfolio (taken at market value)),
(ii) pledge, mortgage or hypothecate for any purpose in
excess of 10% of the net assets of the Fund or Portfolio (taken
at market value),
(iii) sell any security which the Fund or Portfolio does not own unless by
virtue of the ownership of other securities there is at the time of sale a right
to obtain securities, without payment of further consideration, equivalent in
kind and amount to the securities sold and provided that if such right is
conditional the sale is made upon the same conditions,
(iv) invest for the purpose of exercising control or
management, except that all of the assets of the Fund may be
invested in a Qualifying Portfolio,
(v) purchase securities issued by any registered investment company,
except that all of the assets of the Fund may be invested in a Qualifying
Portfolio and except by purchase in the open market where no commission or
profit to a sponsor or dealer results from such purchase other than the
customary broker's commission, or except when such purchase, though not made in
the open market, is part of a plan of merger or consolidation; provided,
however, that the Fund and the Portfolio will not purchase the securities of any
registered investment company if such purchase at the time thereof would cause
more than 10% of the total assets of the Fund or Portfolio (taken in each case
at the greater of cost or market value) to be invested in the securities of such
issuers or would cause more than 3% of the outstanding voting securities of any
such issuer to be held for the Fund or Portfolio,
(vi) taken together with any investments described in clause (ix) below,
invest more than 15% of the net assets of the Fund or Portfolio in securities
that are not readily marketable, including debt securities for which there is no
established market and fixed time deposits and repurchase agreements maturing in
more than seven days, except that all the assets of the Fund may be invested in
a Qualifying Portfolio,
<PAGE>
(vii) purchase or retain any securities issued by an issuer any of whose
officers, directors, trustees or security holders is an officer or Trustee of
the Trust or the Portfolio Trust, or is an officer or director of the Adviser,
if after the purchase of the securities of such issuer by the Fund or Portfolio,
one or more of such persons owns beneficially more than 1/2 of 1% of the shares
or securities, or both, all taken at market value, of such issuer, and such
persons owning more than 1/2 of 1% of such shares or securities together own
beneficially more than 5% of such shares or securities, or both, all taken at
market value,
(viii) write, purchase or sell any put or call option or any combination
thereof or enter into any futures contract, except that this restriction shall
not prevent the Fund or Portfolio from entering into transactions involving
non-U.S. currencies as described in the Prospectus and this Statement of
Additional Information,
(ix) taken together with any investments described in clause (vi) above,
invest in securities which are subject to legal or contractual restrictions on
resale (other than fixed time deposits, repurchase agreements maturing in not
more than seven days and securities which may be resold pursuant to Rule 144A
under the Securities Act if the Board of Trustees of the Trust or the Portfolio
Trust determines that a liquid market exists for such securities) if, as a
result thereof, more than 15% of the net assets of the Fund or Portfolio (in
each case taken at market value) would be so invested (including fixed time
deposits and repurchase agreements maturing in more than seven days), except
that all the assets of the Fund may be invested in a Qualifying Portfolio, or
(x) make short sales of securities or maintain a short position, unless at
all times when a short position is open it owns an equal amount of such
securities or securities convertible into or exchangeable, without payment of
any further consideration, for securities of the same issue as, and equal in
amount to, the securities sold short, and unless not more than 10% of the net
assets of the Fund or Portfolio (taken at market value) is held as collateral
for such sales at any one time (the Fund and the Portfolio do not presently
intend to make such short sales for investment purposes).
These policies are not fundamental and may be changed by the Fund without
the approval of its shareholders or the Portfolio without the approval of its
holders of beneficial interests in response to changes in the various state and
federal requirements.
PERCENTAGE AND RATING RESTRICTIONS
If a percentage or rating restriction 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
<PAGE>
value of the securities or a later change in the rating of the securities held
for the Fund or the Portfolio will not be considered a violation of policy.
3. PERFORMANCE INFORMATION
A total rate of return quotation for the Fund is calculated for any period
by (a) dividing (i) the sum of the net asset 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 per share on the first day of
such period, and (b) subtracting 1 from the result. Any annualized total rate of
return quotation is calculated by (x) adding 1 to the period total rate of
return quotation calculated above, (y) raising such sum to a power which is
equal to 365 divided by the number of days in such period, and (z) subtracting 1
from the result. Total rates of return may also be calculated on investments at
various sales charge levels or at net asset value. Any performance data which is
based on a reduced sales charge or net asset value per share would be reduced if
the maximum sales charge were taken into account.
Any current yield quotation for the Fund consists of an annualized
historical yield, carried at least to the nearest hundredth of one percent,
based on a 30 calendar day or one month period and is calculated by (a) raising
to the sixth power the sum of 1 plus the quotient obtained by dividing the
Fund's net investment income earned during the period by the product of the
average daily number of shares outstanding during the period that were entitled
to receive dividends and the maximum public offering price per share on the last
day of the period, (b) subtracting 1 from the result, and (c) multiplying the
result by 2.
4. DETERMINATION OF NET ASSET VALUE; VALUATION OF
SECURITIES; ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
The net asset value of each share of each class of the Fund is determined
each day during which the New York Stock Exchange is open for trading ("Business
Day"). As of the date of this Statement of Additional Information, the New York
Stock Exchange is open for trading every weekday except for the following
holidays (or the days on which they are observed): New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day. This determination of net asset value of shares of the Fund
is made once each day as of the close of regular trading on the Exchange by
dividing the value of the Fund's net assets (i.e., the value of its assets less
its liabilities, including expenses payable or accrued) by the number of shares
of the Fund outstanding at the time the determination is made. A share's net
asset value is effective for orders received by a Shareholder Servicing Agent
prior to its
<PAGE>
calculation and received by the Distributor prior to the close of the Business
Day on which such net asset value is determined.
The value of the 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 Fund is determined. The net asset value of the Fund's investment in
the Portfolio in which it invests is equal to the Fund's pro rata share of the
net assets of the Portfolio.
For purposes of calculating net asset value per share, all assets and
liabilities initially expressed in non-U.S. currencies will be converted into
U.S. dollars at the prevailing market rates at the time of valuation. Equity
securities are valued at the last sale price on the exchange on which they are
primarily traded or on the NASDAQ system for unlisted national market issues, or
at the last quoted bid price for securities in which there were no sales during
the day or for unlisted securities not reported on the NASDAQ system. Securities
listed on a non-U.S. exchange are valued at the last quoted sale price available
before the time when net assets are valued. Bonds and other fixed income
securities (other than short-term obligations) are valued on the basis of
valuations furnished by a pricing service, use of which has been approved by the
Board of Trustees of the Trust. In making such valuations, the pricing service
utilizes both dealer-supplied valuations and electronic data processing
techniques that take into account appropriate factors such as institutional-size
trading in similar groups of securities, yield, quality, coupon rate, maturity,
type of issue, trading characteristics and other market data, without exclusive
reliance upon quoted prices or exchange or over-the-counter prices, since such
valuations are believed to reflect more accurately the fair value of such
securities. Short-term obligations (maturing in 60 days or less) are valued at
amortized cost, which constitutes fair value as determined by the Board of
Trustees of the Trust. Futures contracts are normally valued at the settlement
price on the exchange on which they are traded. Securities for which there are
no such valuations are valued at fair value as determined in good faith by or at
the direction of the Board of Trustees of the Trust.
Trading in securities on most non-U.S. exchanges and over-the-counter
markets is normally completed before the close of regular trading on the New
York Stock Exchange and may also take place on days on which the New York Stock
Exchange is closed. If events materially affecting the value of non-U.S.
securities occur between the time when the exchange on which they are traded
closes and the time when the Fund's net asset value is calculated, such
securities will be valued at fair value in accordance with procedures
established by and under the general supervision of the Board of Trustees of the
Trust.
<PAGE>
Interest income on long-term obligations held for the Fund is determined
on the basis of interest accrued plus amortization of "original issue discount"
(generally, the difference between issue price and stated redemption price at
maturity) and premiums (generally, the excess of purchase price over stated
redemption price at maturity). Interest income on short-term obligations is
determined on the basis of interest accrued less amortization of any premium.
Subject to compliance with applicable regulations, the Trust and the
Portfolio Trust have each reserved the right to pay the redemption price of
shares of the Fund or beneficial interests in the Portfolio, either totally or
partially, by a distribution in kind of readily marketable securities (instead
of cash). The securities so distributed would be valued at the same amount as
that assigned to them in calculating the net asset value for the shares or
beneficial interests being sold. If a holder of shares or beneficial interests
received a distribution in kind, such holder could incur brokerage or other
charges in converting the securities to cash.
The Trust or the Portfolio Trust may suspend the right of redemption or
postpone the date of payment for shares of the Fund or beneficial interests in
the Portfolio more than seven days during any period when (a) trading in the
markets the Fund or the 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 the 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.
LETTER OF INTENT
If an investor anticipates purchasing $25,000 or more of Class A shares of
the Fund alone or in combination with Class B shares of the Fund or any of the
classes of other Landmark Funds within a 13-month period, the investor may
obtain such shares at the same reduced sales charge as though the total quantity
were invested in one lump sum by completing a Letter of Intent on the terms
described below. Subject to acceptance by the Distributor and the conditions
mentioned below, each purchase will be made at a public offering price
applicable to a single transaction of the dollar amount specified in the Letter
of Intent. The shareholder or his Shareholder Servicing Agent must inform the
Distributor that the Letter of Intent is in effect each time shares are
purchased. The shareholder makes no commitment to purchase additional shares,
but if his purchases within 13 months plus the value of shares credited toward
completion of the Letter of Intent do not total the sum specified, an increased
sales charge will apply as described below. A purchase not originally made
pursuant to a Letter of Intent may be included under a subsequent Letter of
Intent executed within 90 days of
<PAGE>
such purchase if the Distributor is informed in writing of this intent within
such 90-day period. The value of shares of the Fund presently held, at cost or
maximum offering price (whichever is higher), on the date of the first purchase
under the Letter of Intent, may be included as a credit toward the completion of
such Letter, but the reduced sales charge applicable to the amount covered by
such Letter is applied only to new purchases. Instructions for issuance of
shares in the name of a person other than the person signing the Letter of
Intent must be accompanied by a written statement from the Shareholder Servicing
Agent stating that the shares were paid for by the person signing such Letter.
Neither income dividends nor capital gain distributions taken in additional
shares will apply toward the completion of the Letter of Intent. The value of
any shares redeemed or otherwise disposed of by the purchaser prior to
termination or completion of the Letter of Intent is deducted from the total
purchases made under such Letter.
If the investment specified in the Letter of Intent is not completed
(either prior to or by the end of the 13-month period), the Shareholder
Servicing Agent will redeem, within 20 days of the expiration of the Letter of
Intent, an appropriate number of the shares in order to realize the difference
between the reduced sales charge that would apply if the investment under the
Letter of Intent had been completed and the sales charge that would normally
apply to the number of shares actually purchased. By completing and signing the
Letter of Intent, the shareholder irrevocably appoints the Shareholder Servicing
Agent his attorney to surrender for redemption any or all shares purchased under
the Letter of Intent with full power of substitution in the premises.
RIGHT OF ACCUMULATION
A shareholder qualifies for cumulative quantity discounts on the purchase
of Class A shares when his new investment, together with the current offering
price value of all holdings of that shareholder in the Landmark Funds reaches a
discount level. See "Purchases" in the Prospectus for the sales charges on
quantity discounts. For example, if a Fund shareholder owns shares valued at
$25,000 and purchases an additional $25,000 of Class A shares of the Fund, the
sales charge for the $25,000 purchase would be at the rate of 4.00% (the rate
applicable to single transactions of $50,000). A shareholder must provide the
Shareholder Servicing Agent with information to verify that the quantity sales
charge discount is applicable at the time the investment is made.
5. MANAGEMENT
The Trustees and officers of the Trust and the Portfolio
Trust and their principal occupations during the past five years
are set forth below. Their titles may have varied during that
period. Asterisks indicate that those Trustees and officers are
"interested persons" (as defined in the 1940 Act) of the Trust.
Unless otherwise indicated below, the address of each Trustee and
officer is 6 St. James
<PAGE>
Avenue, Boston, Massachusetts. The address of the Portfolio
Trust is Elizabethan Square, George Town, Grand Cayman, British
West Indies.
TRUSTEES OF THE TRUST
H.B. ALVORD -- Treasurer-Tax Collector, County of Los Angeles (retired, March,
1984); Chairman, certain registered investment companies in the 59 Wall Street
funds group. His address is P.O.
Box 1812, Pebble Beach, California.
PHILIP W. COOLIDGE* -- President of the Trust and the Portfolio
Trust; Chief Executive Officer, Signature Financial Group, Inc.
and The Landmark Funds Broker-Dealer Services, Inc. (since
December, 1988).
RILEY C. GILLEY -- Vice President and General Counsel, Corporate
Property Investors (November, 1988 to December, 1991); Partner,
Breed, Abbott & Morgan (Attorneys) (retired, December, 1987).
His address is 4041 Gulf Shore Boulevard North, Naples, Florida.
DIANA R. HARRINGTON -- Professor, Babson College (since September, 1993);
Visiting Professor, Kellogg Graduate School of Management, Northwestern
University (September, 1992 to September, 1993); Professor, Darden Graduate
School of Business, University of Virginia (September, 1978 to September, 1993);
Consultant to PanAgora Asset Management (since 1994). Her address is 120
Goulding Street, Holliston, Massachusetts.
SUSAN B. KERLEY -- President, Global Research Associates, Inc.
(Investment Research) (since August, 1990); Manager, Rockefeller
& Co. (March, 1988 to July, 1990); Trustee, Mainstay
Institutional Funds (since December, 1990). Her address is P.O.
Box 9572, New Haven, Connecticut.
C. OSCAR MORONG, JR. -- Managing Director, Morong Capital
Management (since February, 1993); Senior Vice President and
Investment Manager, CREF Investments, Teachers Insurance &
Annuity Association (retired January, 1993); Director, Indonesia
Fund; Director, MAS Funds. His address is 1385 Outlook Drive
West, Mountainside, New Jersey.
DONALD B. OTIS -- Director of Investor Relations, International
Business Machines Corporation (retired February, 1982). His
address is 6300 Midnight Pass Road, Sarasota, Florida.
E. KIRBY WARREN -- Professor of Management, Graduate School of
Business, Columbia University (since 1987); Samuel Bronfman
Professor of Democratic Business Enterprise (1978-1987). His
address is Columbia University, Graduate School of Business, 725
Uris Hall, New York, New York.
WILLIAM S. WOODS, JR. -- Vice President-Investments, Sun Company,
Inc. (retired, April, 1984). His address is 35 Colwick Road,
Cherry Hill, New Jersey.
<PAGE>
TRUSTEES OF THE PORTFOLIO TRUST
ELLIOTT J. BERV -- 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* -- President of the Trust and the Portfolio
Trust; Chief Executive Officer, Signature Financial Group, Inc.
and The Landmark Funds Broker-Dealer Services, Inc. (since
December, 1988).
MARK T. FINN -- 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.
WALTER E. ROBB, III -- President, Benchmark Consulting Group,
Inc. (since 1991); Principal, Robb Associates (corporate
financial advisers) (since 1978); President, Benchmark Advisors,
Inc. (Corporate Financial Advisors)(since 1989); Trustee of
certain registered investment companies in the MFS Family of
Funds. His address is 35 Farm Road, Sherborn, Massachusetts.
OFFICERS OF THE TRUST AND THE PORTFOLIO TRUST
PHILIP W. COOLIDGE* -- President of the Trust and the Portfolio
Trust; Chief Executive Officer, Signature Financial Group, Inc.
and The Landmark Funds Broker-Dealer Services, Inc. (since
December, 1988).
JAMES B. CRAVER* -- Secretary and Treasurer of the Trust and the
Portfolio Trust; Senior Vice President and General Counsel,
Signature Financial Group, Inc. and The Landmark Funds
Broker-Dealer Services, Inc. (since January, 1991); Partner,
Baker & Hostetler (Attorneys) (prior to January, 1991).
SUSAN JAKUBOSKI* -- Vice President, Assistant Treasurer and
Assistant Secretary of the Portfolio Trust (since August, 1994);
Manager, Signature Financial Group (Cayman) Ltd. (since August,
1994); Senior Fund Administrator, Signature Financial Group, Inc.
(since August, 1994); Assistant Treasurer, Signature
Broker-Dealer Services, Inc. (since September, 1994); Fund
Compliance Administrator, Concord Financial Group (November, 1990
to August, 1994); Senior Fund Accountant, Neuberger & Berman
Management, Inc. (from February, 1988 to November, 1990);
Customer Service Representative, I.B.J. Schroder
<PAGE>
(prior to 1988). Her address is Elizabethan Square, George Town,
Grand Cayman, Cayman Islands, BWI.
MOLLY S. MUGLER* -- Assistant Secretary of the Trust and the
Portfolio Trust; Legal Counsel and Assistant Secretary, Signature
Financial Group, Inc. (since December, 1988); Assistant
Secretary, The Landmark Funds Broker-Dealer Services, Inc. (since
December, 1988).
BARBARA M. O'DETTE* -- Assistant Treasurer of the Trust and the
Portfolio Trust; Assistant Treasurer, Signature Financial Group,
Inc. and The Landmark Funds Broker-Dealer Services, Inc. (since
December, 1988).
As of the date of this Statement of Additional Information, there are no
shareholders of the Fund.
The Trustees and officers of the Trust and the Portfolio Trust also hold
comparable positions with certain other funds for which LFBDS, SFG or their
affiliates serve as the distributor or administrator.
The Declaration of Trust of each of the Trust and the Portfolio Trust
provides that each of the Trust and the Portfolio Trust, respectively, 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 the Portfolio Trust, as the case may be, unless, as to
liability to the Trust, the Portfolio Trust or their 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 the Portfolio Trust, 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
the Portfolio Trust, or in a written opinion of independent counsel, that such
officers or Trustees have not engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties.
ADVISER
Citibank manages the assets of the Portfolio pursuant to an investment
advisory agreement (the "Advisory Agreement"). Subject to such policies as the
Board of Trustees of the Portfolio Trust 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 Portfolio's investments and effecting
<PAGE>
securities transactions for the Portfolio. The Advisory Agreement will continue
in effect until April 30, 1997 and thereafter as long as such continuance is
specifically approved at least annually by the Board of Trustees of the
Portfolio Trust or by a vote of a majority of the outstanding voting securities
of the Portfolio, and, in either case, by a majority of the Trustees of the
Portfolio Trust who are not parties to the Advisory Agreement or interested
persons of any such party, at a meeting called for the purpose of voting on the
Advisory Agreement.
The Advisory Agreement provides that the Adviser may render services to
others. The Advisory Agreement is terminable without penalty on not more than 60
days' nor less than 30 days' written notice by the Portfolio Trust when
authorized either by a vote of a majority of the outstanding voting securities
of the Portfolio or by a vote of a majority of the Board of Trustees of the
Portfolio Trust, 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. The 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 Portfolio, except for willful misfeasance, bad
faith or gross negligence or reckless disregard of its or their obligations and
duties under the Advisory Agreement.
The Prospectus contains a description of the fees payable to the Adviser
for services under the Advisory Agreement.
ADMINISTRATOR
Pursuant to administrative services agreements (the "Administrative
Services Agreements"), LFBDS and SFG provide the Trust and the Portfolio Trust,
respectively, with general office facilities and LFBDS and SFG supervise the
overall administration of the Trust or the Portfolio Trust, including, among
other responsibilities, the negotiation of contracts and fees with, and the
monitoring of performance and billings of, the Trust's or the Portfolio Trust's
independent contractors and agents; the preparation and filing of all documents
required for compliance by the Trust or the Portfolio Trust with applicable laws
and regulations; and arranging for the maintenance of books and records of the
Trust or the Portfolio Trust. The Administrator and the Portfolio Administrator
provide persons satisfactory to the Board of Trustees of the Trust or the
Portfolio Trust to serve as Trustees and officers of the Trust and the Portfolio
Trust, respectively. Such Trustees and officers, as well as certain other
employees and Trustees of the Trust and the Portfolio Trust, may be directors,
officers or employees of LFBDS, SFG or their affiliates.
<PAGE>
The Prospectus contains a description of the fees payable to the
Administrator and the Portfolio Administrator under the Administrative Services
Agreements.
The Administrative Services Agreement with the Trust acknowledges that the
names "Landmark" and "Landmark Funds" are the property of the Administrator and
provides that if LFBDS ceases to serve as the Administrator of the Trust, the
Trust would change its name and the name of the Fund so as to delete the word
"Landmark" or the words "Landmark Funds." The Administrative Services Agreement
with the Trust also provides that LFBDS may render administrative services to
others and may permit other investment companies to use the word "Landmark" or
the words "Landmark Funds" in their names.
The Administrative Services Agreement with the Trust continues in effect
with respect to the Fund if such continuance is specifically approved at least
annually by the Board of Trustees of the Trust or by a vote of a majority of the
outstanding voting securities of the Trust and, in either case, by a majority of
the Trustees who are not parties to the Administrative Services Agreement or
interested persons of any such party. The Administrative Services Agreement with
the Trust terminates automatically if it is assigned and may be terminated
without penalty by vote of a majority of the outstanding voting securities of
the Trust 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 LFBDS, as the Administrator, 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
Trust's Administrative Services Agreement.
The Administrative Services Agreement with the Portfolio Trust provides
that SFG may render administrative services to others. The Administrative
Services Agreement with the Portfolio Trust 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 Trust or by either party on not
more than 60 days' nor less than 30 days' written notice. The Administrative
Services Agreement with the Portfolio Trust also provides that neither SFG, as
the Portfolio Administrator, 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 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 Portfolio
Trust's Administrative Services Agreement.
<PAGE>
LFBDS and SFG are wholly-owned subsidiaries of Signature Financial Group,
Inc. SFG is a company organized under the laws of the Cayman Islands. Its
principal place of business is in George Town, Grand Cayman, British West
Indies.
Pursuant to sub-administrative services agreements, Citibank performs such
sub-administrative duties for the Trust and the Portfolio Trust as from time to
time are agreed upon by Citibank and, respectively, LFBDS and SFG. Citibank's
sub-administrative duties may include providing equipment and clerical personnel
necessary for maintaining the Trust's and the Portfolio Trust's organization,
participation in the preparation of documents required for compliance by the
Trust and the Portfolio Trust with applicable laws and regulations, the
preparation of certain documents in connection with meetings of Trustees and
shareholders, and other functions which would otherwise be performed by the
Administrator. For performing such sub-administrative services, Citibank
receives compensation as from time to time is agreed upon by LFBDS or SFG, not
in excess of the amount paid to LFBDS or SFG for its services under the
Administrative Services Agreements with the Trust and the Portfolio Trust. All
such compensation is paid by LFBDS or SFG.
DISTRIBUTOR
LFBDS serves as the Distributor of the Fund's shares pursuant to
Distribution Agreements with the Trust with respect to each class of shares of
the Fund. Unless otherwise terminated, the Distribution Agreements continue from
year to year upon annual approval by the Trust's Board of Trustees, or by the
vote of a majority of the outstanding voting securities of the Trust and by the
vote of a majority of the Board of Trustees of the Trust who are not parties to
the Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. Each Agreement will
terminate in the event of its assignment, as defined in the 1940 Act.
The Trust has adopted a Distribution Plan (the "Distribution Plan") in
accordance with Rule 12b-1 under the 1940 Act with respect to each class of
shares of the Fund constituting series of the Trust after concluding that there
is a reasonable likelihood that the Distribution Plans will benefit the Fund and
its shareholders. The Distribution Plan with respect to Class A shares provides
that the Fund shall pay a monthly distribution fee to the Distributor at an
annual rate not to exceed 0.10% of the Fund's average daily net assets
represented by the Class A shares. The Distribution Plan with respect to Class B
shares provides that the Fund will pay the Distributor a monthly distribution
fee at an annual rate not to exceed 0.75% of the average daily net assets
represented by the Class B shares. The Distributor receives the distribution
fees for its services under the Distribution Agreements in connection with the
distribution of Fund shares (exclusive of any advertising expenses incurred by
the Distributor in connection with the sale of shares of the Fund). The
Distributor may use all or any
<PAGE>
portion of such distribution fee to pay for expenses of printing prospectuses
and reports used for sales purposes, expenses of the preparation and printing of
sales literature and other such distribution-related expenses.
The Fund is also permitted to pay the Distributor an additional monthly
service fee with respect to the Class A shares at an annual rate not to exceed
0.25% of the Fund's average daily net assets represented by the Class A shares.
The Fund is permitted to pay the Distributor an additional monthly service fee
with respect to the Class B shares at an annual rate not to exceed 0.25% of the
Fund's average daily net assets represented by the Class B shares.
The Distribution Plan with respect to the Class A Shares also permits the
Fund to pay the Distributor an additional fee (not to exceed 0.05% of the
average daily net assets of the Class A shares) in anticipation of or as
reimbursement for print or electronic media advertising expenses incurred in
connection with the sale of Class A shares.
The Distribution Plans continue 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 Trustees who are not "interested persons"
of the Trust and who have no direct or indirect financial interest in the
operation of the Distribution Plans or in any agreement related to the Plans
(for purposes of this paragraph "Qualified Trustees"). Each Distribution Plan
requires that the Trust and the Distributor provide to the 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 Distribution Plan. Each
Distribution Plan further provides that the selection and nomination of the
Qualified Trustees is committed to the discretion of the disinterested Trustees
(as defined in the 1940 Act) then in office. The Distribution Plans may be
terminated with respect to the 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 the Fund. The Distribution Plans may not be amended to increase
materially the amount of the Fund's permitted expenses thereunder without the
approval of a majority of the outstanding securities of the Fund and may not be
materially amended in any case without a vote of a majority of both the Trustees
and Qualified Trustees. The Distributor will preserve copies of any plan,
agreement or report made pursuant to each Distribution Plan for a period of not
less than six years from the date of the Plan, and for the first two years the
Distributor will preserve such copies in an easily accessible place.
As contemplated by the Distribution Plans, LFBDS acts as the agent of the
Trust in connection with the offering of shares of the Fund pursuant to the
Distribution Agreements. After the prospectuses and periodic reports of the Fund
have been prepared, set in type and
<PAGE>
mailed to existing shareholders, the Distributor pays for the printing and
distribution of copies thereof which are used in connection with the offering of
shares of the Fund to prospective investors. The Prospectus contains a
description of fees payable to the Distributor under the Distribution Agreement.
SHAREHOLDER SERVICING AGENTS, TRANSFER AGENT AND CUSTODIAN
The Trust has adopted an administrative services plan (the "Administrative
Services Plan") after having concluded that there is a reasonable likelihood
that the Administrative Services Plan will benefit the Fund and its
shareholders. The Administrative Services Plan provides that the Trust may
obtain the services of an administrator, a transfer agent, a custodian, a fund
accountant and one or more Shareholder Servicing Agents, and may enter into
agreements providing for the payment of fees for such services. Under the
Trust's Administrative Services Plan, the total of the fees paid from the Fund
to the Trust's Administrator and Shareholder Servicing Agents may not exceed
0.65% of the Fund's average daily net assets on an annualized basis for the
Fund's then-current fiscal year. This limitation does not include any amounts
payable under the Distribution Plans. The Administrative Services Plan continues
in effect if such continuance is specifically approved at least annually by a
vote of both a majority of the Trustees and a majority of the Trustees who are
not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Administrative Services Plan or in
any agreement related to such Plan (for purposes of this paragraph "Qualified
Trustees"). The Administrative Services Plan requires that the Trust 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
Administrative Services Plan. The Administrative Services Plan may be terminated
at any time by a vote of a majority of the Qualified Trustees of the Trust or as
to the Fund by a vote of a majority of the outstanding voting securities of the
Fund. The Administrative Services Plan for the Fund may not be materially
amended in any case without a vote of the majority of both the Trustees and the
Qualified Trustees.
The Trust has entered into a shareholder servicing agreement (a "Servicing
Agreement") with each Shareholder Servicing Agent and a Transfer Agency and
Service 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 for each Fund. The Trust, on behalf of the Fund, has entered
into a Custodian Agreement with Investors Bank & Trust Company ("IBT") and a
Fund Accounting Agreement with Signature Financial Services, Inc. ("SFSI"),
pursuant to which custodial and fund accounting services, respectively, are
provided for the Fund. See "Shareholder Servicing Agents" and "Transfer Agent,
Custodian and Fund Accountant" in the Prospectus for additional information,
including a description of fees paid to the Shareholder Servicing Agents under
the Servicing Agreements.
<PAGE>
The Portfolio Trust has also adopted an administrative services plan (the
"Portfolio Administrative Plan"), which provides that the Portfolio Trust may
obtain the services of an administrator, a transfer agent, a custodian and a
fund accountant and may enter into agreements providing for the payment of fees
for such services. Under the Portfolio Administrative Plan, the administrative
services fee payable to the Portfolio Administrator from the Portfolio may not
exceed 0.05% of the Portfolio's average daily net assets on an annualized basis
for its then-current fiscal year.
The Portfolio Administrative Plan continues in effect if such continuance
is specifically approved at least annually by a vote of both a majority of the
Portfolio Trust's Trustees and a majority of the Portfolio Trust'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 (for purposes of this paragraph "Qualified
Trustees"). The Portfolio Administrative Plan requires that the Portfolio Trust
provide to the 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. The Portfolio 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 the Portfolio Trust and may not be materially amended in any case
without a vote of the majority of both the Portfolio Trust's Trustees and the
Portfolio Trust's Qualified Trustees.
The Portfolio Trust, on behalf of the Portfolio, has entered into a
Custodian Agreement with IBT and a Fund Accounting Agreement with SFSI, pursuant
to which custodial and fund accounting services, respectively, are provided for
the Portfolio. See "Shareholder Servicing Agents" and "Transfer Agent, Custodian
and Fund Accountant" in the Prospectus for additional information.
The principal business address of IBT is One Lincoln Plaza, Boston,
Massachusetts 02111. The principal business address of SFSI is 6 St. James
Avenue, Boston, Massachusetts 02116. The principal business address of State
Street is 225 Franklin Street, Boston, Massachusetts 02110.
AUDITORS
Price Waterhouse LLP is the independent public accountant for the Trust
and the Portfolio Trust, providing audit services and assistance and
consultation with respect to the preparation of filings with the SEC. The
address of Price Waterhouse is 160 Federal Street, Boston, Massachusetts 02110.
<PAGE>
6. PORTFOLIO TRANSACTIONS
The Trust trades securities for the Fund if it believes that a transaction
net of costs (including custodian charges) will help achieve the Fund's
investment objective. Changes in the Fund's investments are made without regard
to the length of time a security has been held, or whether a sale would result
in the recognition of a profit or loss. Therefore, the rate of turnover is not a
limiting factor when changes are appropriate. The turnover rate for the Fund is
not expected to exceed 150% annually. Specific decisions to purchase or sell
securities for the Fund are made by a portfolio manager who is an employee of
the Adviser and who is appointed and supervised by its senior officers. The
portfolio manager may serve other clients of the Adviser in a similar capacity.
The primary consideration in placing portfolio securities transactions
with broker-dealers for execution is to obtain and maintain the availability of
execution at the most favorable prices and in the most effective manner
possible. The Adviser attempts to achieve this result by selecting
broker-dealers to execute transactions on behalf of the Fund and other clients
of the Adviser on the basis of their professional capability, the value and
quality of their brokerage services, and the level of their brokerage
commissions. In the case of securities traded in the over-the-counter market
(where no stated commissions are paid but the prices include a dealer's markup
or markdown), the Adviser normally seeks to deal directly with the primary
market makers, unless in its opinion, best execution is available elsewhere. In
the case of securities purchased from underwriters, the cost of such securities
generally includes a fixed underwriting commission or concession. From time to
time, soliciting dealer fees are available to the Adviser on the tender of the
Fund's securities in so-called tender or exchange offers. Such soliciting dealer
fees are in effect recaptured for the Fund by the Adviser. At present no other
recapture arrangements are in effect.
Under the Advisory Agreement, in connection with the selection of such
brokers or dealers and the placing of such orders, the Adviser is directed to
seek for the Fund in its best judgment, prompt execution in an effective manner
at the most favorable price. Subject to this requirement of seeking the most
favorable price, securities may be bought from or sold to broker-dealers who
have furnished statistical, research and other information or services to the
Adviser or the Fund, subject to any applicable laws, rules and regulations.
The investment advisory fee that the Fund pays to the Adviser will not be
reduced as a consequence of the Adviser's receipt of brokerage and research
services. While such services are not expected to reduce the expenses of the
Adviser, the Adviser would, through the use of the services, avoid the
additional expenses which would be incurred if it should attempt to develop
comparable information through its own staff.
<PAGE>
In certain instances there may be securities that are suitable as an
investment for the Fund as well as for one or more of the Adviser's other
clients. Investment decisions for the Fund and for the Adviser's other clients
are made with a view to achieving their respective investment objectives. It may
develop that a particular security is bought or sold for only one client even
though it might be held by, or bought or sold for, other clients. Likewise, a
particular security may be bought for one or more clients when one or more
clients are selling the same security. Some simultaneous transactions are
inevitable when several clients receive investment advice from the same
investment adviser, particularly when the same security is suitable for the
investment objectives of more than one client. When two or more clients are
simultaneously engaged in the purchase or sale of the same security, the
securities are allocated among clients in a manner believed to be equitable to
each. It is recognized that in some cases this system could adversely affect the
price of or the size of the position obtainable in a security for the Fund. When
purchases or sales of the same security for the Fund and for other portfolios
managed by the Adviser occur contemporaneously, the purchase or sale orders may
be aggregated in order to obtain any price advantages available to large volume
purchases or sales.
7. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Trust's Declaration of Trust permits the Trustees to issue an
unlimited number of full and fractional Shares of Beneficial Interest (par value
$0.00001 per share) of each series and to divide or combine the shares of any
series into a greater or lesser number of shares of that series without thereby
changing the proportionate beneficial interests in that series. The Trust has
reserved the right to create and issue additional series and classes of shares.
Presently, there is one other series of the Trust. Each share of each class of
each Fund represents an equal proportionate interest in the Fund with each other
share of that class. Shares of each series participate equally in the earnings,
dividends and distribution of net assets of the particular series upon
liquidation or dissolution (except for any differences among classes of shares
in a 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 or class, only shares
of that particular series or class 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 to hold, and has no
present intention of
<PAGE>
holding, annual meetings of shareholders but the Trust will hold special
meetings of shareholders when in the judgment of the Trustees it is necessary or
desirable to submit matters for a shareholder vote. Shareholders have, under
certain circumstances (e.g., upon the application and submission of certain
specified documents to the Trustees by a specified number of shareholders), the
right to communicate with other shareholders in connection with requesting a
meeting of shareholders for the purpose of removing one or more Trustees.
Shareholders also have under certain circumstances the right to remove one or
more Trustees without a meeting by a declaration in writing by a specified
number of shareholders. No material amendment may be made to the Trust's
Declaration of Trust without the affirmative vote of the holders of a majority
of the outstanding shares of each series affected by the amendment. (See
"Investment Objectives, Policies and Restrictions--Investment Restrictions.")
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 as to which such Shareholder Servicing Agent is the agent of
record and that are otherwise not represented in person or by proxy at the
meeting, proportionately in accordance with the votes cast by holders of all
shares otherwise represented at the meeting in person or by proxy as to which
such Shareholder Servicing Agent is the agent of record. Any shares so voted by
a Shareholder Servicing Agent are deemed represented at the meeting for purposes
of quorum requirements. 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 a vote of the holders of
two-thirds of the Trust's outstanding shares, voting as a single class, or of
the affected series of the Trust, as the case may be, except that if the
Trustees of the Trust recommend such sale of assets, merger or consolidation,
the approval by vote of the holders of a majority of the Trust's outstanding
shares would be sufficient. The Trust or any series of the Trust, as the case
may be, may be terminated (i) by a vote of a majority of the outstanding voting
securities of the Trust or the affected series or (ii) by the Trustees by
written notice to the shareholders of the Trust or the affected series. If not
so terminated, the Trust will continue indefinitely.
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 of the Trust
contains an express disclaimer of shareholder liability for acts or obligations
of the
<PAGE>
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 of the 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 of the Trust protects a Trustee
against any liability to which he 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 office.
The Portfolio is a series of the Portfolio Trust, organized as a trust
under the laws of the State of New York. The Portfolio Trust's Declaration of
Trust provides that investors in the Portfolio (e.g., other investment companies
(including the Fund), insurance company separate accounts and common and
commingled trust funds) are each liable for all obligations of the Portfolio.
However, the risk of the Fund incurring financial loss on account of such
liability is limited to circumstances in which both inadequate insurance existed
and the Portfolio itself was unable to meet its obligations. Accordingly, the
Trustees of the Trust believe that neither the Fund nor its shareholders will be
adversely affected by reason of the Fund's investing in the Portfolio.
Each investor in the Portfolio, including the Fund, may add to or withdraw
from its investment in the Portfolio on each Business Day. As of the close of
regular trading on each Business Day, the value of each investor's beneficial
interest in the Portfolio is determined by multiplying the net asset value of
the Portfolio by the percentage, effective for that day, that represents that
investor's share of the aggregate beneficial interests in the Portfolio. Any
additions or withdrawals, that 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 the close of regular trading, 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 the close of regular trading,
on such day
<PAGE>
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 the close of regular
trading on the next following Business Day.
8. CERTAIN ADDITIONAL TAX MATTERS
The Fund 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 and holding peroid
of the Fund's portfolio assets. Provided all such requirements are met, no U.S.
federal income or excise taxes generally will be required to be paid by the
Fund, although non-U.S. source income earned by the Fund may be subject to
non-U.S. withholding taxes. If the 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 income to shareholders. The Portfolio believes
that it also will not be required to pay any U.S. federal income or excise taxes
on its income.
The portion of the Fund's ordinary income dividends attributable to
dividends received in respect of equity securities of U.S. issuers is normally
eligible for the dividends received deduction for corporations subject to U.S.
federal income taxes. Availability of the deduction for particular shareholders
is subject to certain limitations, and deducted amounts may be subject to the
alternative minimum tax and result in certain basis adjustments. Any Fund
dividend that is declared in October, November or December of any calendar year,
that is payable to shareholders of record in such a month, and that is paid the
following January will be treated as if received by the shareholders on December
31 of the year in which the dividend is declared.
Any Fund distribution will have the effect of reducing the per share net
asset value of shares in the Fund by the amount of the distribution.
Shareholders purchasing shares shortly before the record date of any
distribution may thus pay the full price for the shares and then effectively
receive a portion of the purchase price back as a taxable distribution.
In general, any gain or loss realized upon a taxable disposition of shares
of the Fund by a shareholder that holds such shares as a capital asset will be
treated as a long-term capital gain or loss if the shares have been held for
more than twelve months and otherwise as
<PAGE>
a short-term capital gain or loss. However, any loss realized upon a disposition
of shares in the Fund held for six months or less will be treated as a long-term
capital loss to the extent of any distributions of net capital gain made with
respect to those shares. Any loss realized upon a disposition of shares may also
be disallowed under rules relating to wash sales. Gain may by increased (or loss
reduced) upon a redemption of shares of the Fund within 90 days after their
purchase followed by any purchase (including purchases by exchange or by
reinvestment) of shares of the Fund or of another Landmark Fund without payment
of any additional sales charge.
The Fund's transactions in forward contracts will be subject to special
tax rules that may affect the amount, timing and character of Fund income and
distributions to shareholders. For example, certain positions held by the Fund
on the last business day of each taxable year will be marked to market (i.e.,
treated as if closed out) on that day, and any gain or loss associated with the
positions will be treated as 60% long-term and 40% short-term capital gain or
loss. Certain positions held by the Fund that substantially diminish its risk of
loss with respect to other positions in its portfolio may constitute
"straddles," and may be subject to special tax rules that would cause deferral
of Fund losses, adjustments in the holding periods of Fund securities, and
conversion of short-term into long-term capital losses. Certain tax elections
exist for straddles that may alter the effects of these rules. The Fund will
limit its activities in forward contracts to the extent necessary to meet the
requirements of Subchapter M of the Code.
Special tax considerations apply with respect to non-U.S. investments of
the Portfolio. Use of non-U.S. currencies for non-hedging purposes may be
limited in order to avoid a tax on the Portfolio. Investment by the Portfolio in
certain "passive foreign investment companies" may also be limited in order to
avoid a tax on the Portfolio. Investment income received by the Portfolio from
non-U.S. securities may be subject to non-U.S. income taxes withheld at the
source. The United States has entered into tax treaties with many other
countries that may entitle the Portfolio to a reduced rate of tax or an
exemption from tax on such income. The Portfolio intends to qualify for treaty
reduced rates where available. It is not possible, however, to determine the
Portfolio's effective rate of non-U.S. tax in advance since the amount of the
Portfolio's assets to be invested within various countries is not known.
If the Fund holds more than 50% of its assets in foreign stock and
securities at the close of its taxable year, the Fund may elect to "pass
through" to the Fund's shareholders foreign income taxes paid. If the Fund so
elects, shareholders will be required to treat their pro rata portion of the
foreign income taxes paid by the Fund as part of the amount distributed to them
by the Fund and thus includable in their gross income for federal income tax
purposes. Shareholders who itemize deductions would then be allowed to claim a
deduction or credit (but not both) on their federal income tax returns for such
amount, subject
<PAGE>
to certain limitations. Shareholders who do not itemize deductions would
(subject to such limitations) be able to claim a credit but not a deduction. No
deduction will be permitted to individuals in computing their alternative
minimum tax liability. If the Fund does not qualify to elect to "pass through"
to the Fund's shareholders foreign income taxes paid by it, shareholders will
not be able to claim any deduction or credit for any part of their foreign taxes
paid by the Fund. For purposes of the preceding discussion the Fund believes
that it will be treated as owning a pro rata share of the assets of the
Portfolio and as having paid a pro rata share of the foreign taxes paid by the
Portfolio.
9. INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP are the independent certified public accountants for
the Fund and the Portfolio Trust, providing audit services and assistance and
consultation with respect to the preparation of filings with the Securities and
Exchange Commission.
<PAGE>
SHAREHOLDER SERVICING AGENTS
FOR CITIBANK NEW YORK RETAIL BANKING AND
BUSINESS AND PROFESSIONAL CUSTOMERS:
Citibank, N.A.
450 West 33rd Street, New York, NY 10001
(212) 564-3456 or (800) 846-5300
FOR CITIGOLD CUSTOMERS:
Citigold
666 Fifth Avenue, New York, NY 10150-5130
Call Your Account Officer or (212) 974-0900 or (800) 285-1701
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,
Investment Specialist 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
FOR CITICORP INVESTMENT SERVICES CUSTOMERS:
Citicorp Investment Services
One Court Square, Long Island City, NY 11120
Call Your Investment Consultant or (800) 846-5200,
(212) 736-8170 in New York City
<PAGE>
LANDMARK EMERGING ASIAN MARKETS EQUITY FUND
TRUSTEES AND OFFICERS
Philip W. Coolidge
President*
H.B. Alvord
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
C. Oscar Morong, Jr.
Donald B. Otis
E. Kirby Warren
William S. Woods, Jr.
SECRETARY AND TREASURER
James B. Craver*
ASSISTANT TREASURER
Barbara M. O'Dette*
ASSISTANT SECRETARY
Molly S. Mugler*
*Affiliated Person of Administrator and Distributor
- ----------------------------------------------------------------------
INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043
ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679
TRANSFER AGENT
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
CUSTODIAN
Investors Bank & Trust Company
One Lincoln Plaza, Boston, MA 02111
AUDITORS
Price Waterhouse LLP
160 Federal Street, Boston, MA 02110
LEGAL COUNSEL
Bingham, Dana & Gould
150 Federal Street, Boston, MA 02110
- ----------------------------------------------------------------------
SHAREHOLDER SERVICING AGENTS
(See Inside of Cover)
<PAGE>
PART C
Item 24. Financial Statements and Exhibits.
(a) Not applicable.
(b) Exhibits
* 1(a) Declaration of Trust of Registrant
****** 1(b) Amendment to Declaration of Trust of
or Registrant
*******
* 2(a) Amended and Restated By-Laws of Registrant
***** 2(b) Amendment to Amended and Restated By-Laws of
Registrant
******* 5 Form of Investment Advisory Agreement
between The Premium Portfolios, on behalf of
Emerging Asian Markets Equity Portfolio, and
Citibank, N.A., as adviser
***** 6(a) Form of Amended and Restated Distribution
Agreement between the Registrant and The
Landmark Funds Broker-Dealer Services, Inc.
("LFBDS"), as distributor, with respect to
Class A Shares
***** 6(b) Form of Distribution Agreement between the
Registrant and LFBDS, as distributor, with
respect to Class B Shares
******* 8 Form of Custodian Agreement between the
Registrant and Investors Bank & Trust
Company, as custodian
***** 9(a) Form of Administrative Services Plan of the
Registrant
*** 9(b) Administrative Services Agreement between
the Registrant and LFBDS, as administrator
* 9(c) Sub-Administrative Services Agreement
between Citibank, N.A. and LFBDS
***** 9(d)(i) Form of Shareholder Servicing Agreement
between the Registrant and Citibank, N.A.,
as shareholder servicing agent
***** 9(d)(ii) Form of Shareholder Servicing Agreement between
the Registrant and a federal savings bank, as shareholder
servicing agent
***** 9(d)(iii) Form of Shareholder Servicing Agreement
between the Registrant and LFBDS, as
shareholder servicing agent
* 9(e) Transfer Agency and Servicing Agreement
between the Registrant and State Street Bank
and Trust Company, as transfer agent
* 9(f)(i) Expense Reimbursement Agreement between the
Registrant, on behalf of the Fund, and
LFBDS, as administrator
<PAGE>
****** 9(f)(ii) Form of Amended Expense Reimbursement
Agreement between the Registrant, on behalf
of the Fund, and LFBDS, as administrator
***** 9(g) Form of Amended and Restated Exchange Privilege
Agreement between each of the trusts in the Landmark
Family of Funds, including the Registrant, and LFBDS,
as distributor
***** 15(a) Form of Distribution Plan of the Registrant
with respect to Class A Shares of the Fund
***** 15(b) Form of Distribution Plan of the Registrant
with respect to Class B Shares of the Fund
18 Form of Multiple Class Plan of the
Registrant adopted pursuant to Rule 18f-3
*, ** or 25(a) Powers of Attorney for the Registrant
***
*** or 25(b) Powers of Attorney for The Premium Portfolios
*****
- ---------------------
* Incorporated herein by reference to Post-Effective
Amendment No. 2 to the Registrant's Registration Statement
on Form N-1A (File No. 33-36556) as filed with the
Securities and Exchange Commission on March 22, 1992.
** Incorporated herein by reference to Post-Effective
Amendment No. 3 to the Registrant's Registration Statement
on Form N-1A (File No. 33-36556) as filed with the
Securities and Exchange Commission on April 12, 1993.
*** Incorporated by reference to Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on form N-1A (File 33-36556) as filed
with the Securities and Exchange Commission on December 31, 1993.
**** Incorporated by reference to Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on form N-1A (File 33-36556) as filed
with the Securities and Exchange Commission on February 28, 1994.
***** Incorporated by reference to Post-Effective Amendment No. 6 to the
Registrant's Registration Statement on form N-1A (File 33-36556) as filed
with the Securities and Exchange Commission on October 26, 1994.
****** Incorporated by reference to Post-Effective Amendment No. 8 to the
Registrant's Registration Statement on form N-1A (File 33-36556) as filed
with the Securities and Exchange Commission on March 3, 1995.
*******Incorporated by reference to Post-Effective Amendment No. 9 to the
Registrant's Registration Statement on form N-1A (File 33-36556) as filed
with the Securities and Exchange Commission on April 7, 1995.
Item 25. Persons Controlled by or under Common Control with
Registrant.
Not applicable.
<PAGE>
Item 26. Number of Holders of Securities.
Title of Class Number of Record Holders
Shares of Beneficial Interest As of April 1, 1995
(par value $0.00001 per share)
Class A 0
Class B 0
Item 27. Indemnification.
Reference is hereby made to (a) Article V of the Registrant's Declaration
of Trust, filed as an Exhibit to Post-Effective Amendments No. 2 to its
Registration Statement on Form N-1A (the "Amendment"); (b) Section 4 of the
Distribution Agreement between the Registrant and LFBDS, filed as an Exhibit to
Post-Effective Amendment No. 6; and (c) the undertaking of the Registrant
regarding indemnification set forth in its Registration Statement on Form N-1A.
The Trustees and officers of the Registrant and the personnel of the
Registrant's administrator are insured under an errors and omissions liability
insurance policy. The Registrant and its officers are also insured under the
fidelity bond required by Rule 17g-1 under the Investment Company Act of 1940.
Item 28. Business and Other Connections of Investment 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 Citicorp, a registered bank
holding company. Citibank also serves as investment adviser to the following
registered investment companies (or series thereof): The Premium Portfolios
(Equity Portfolio, Balanced Portfolio, Government Income Portfolio,
International Equity Portfolio and Small Cap Equity Portfolio), Tax Free
Reserves Portfolio, U.S. Treasury Reserves Portfolio, Cash Reserves Portfolio,
Landmark Multi-State Tax Free Funds (Landmark New York Tax Free Reserves,
Landmark Connecticut Tax Free Reserves and Landmark California Tax Free
Reserves), Landmark Fixed Income Funds (Landmark Intermediate Income Fund),
Landmark Tax Free Income Funds (Landmark National Tax Free Income Fund and
Landmark New York Tax Free Income Fund) and Landmark VIP Funds (Landmark VIP
U.S. Government Portfolio, Landmark VIP Balanced Portfolio, Landmark VIP Equity
Portfolio and Landmark VIP International Equity Portfolio). As of December 31,
1994, Citibank and its affiliates managed assets in excess of $73 billion
worldwide. The principal place of business of Citibank is located at 399 Park
Avenue, New York, New York 10043.
The Chairman of the Board and a Director of Citibank is John
S. Reed. The following are Vice Chairmen of the Board and
Directors of Citibank: Paul J. Collins, Pei-yuan Chia, William
R. Rhodes and H. Onno Ruding.
<PAGE>
Christopher J. Steffen is a Senior Executive Vice-President of
Citicorp and Director of Citibank. Other Directors of Citibank
are D. Wayne Calloway, Chairman and Chief Executive Officer,
PepsiCo, Inc., Purchase, New York; Colby H. Chandler, Former
Chairman and Chief Executive Officer, Eastman Kodak Company;
Kenneth T. Derr, Chairman and Chief Executive Officer, Chevron
Corporation; H.J. Haynes, Senior Counselor, Bechtel Group, Inc.,
San Francisco, California; Rozanne L. Ridgway, President, The
Atlantic Council of the United States; Robert B. Shapiro,
President and Chief Operating Officer, Monsanto Company; Frank A.
Shrontz, Chairman and Chief Executive Officer, The Boeing
Company, Seattle, Washington; Mario Henrique Simonsen, Vice
Chairman, Brazilian Institute of Economics, The Getulio Vargas
Foundation; Roger B. Smith, Former Chairman and Chief Executive
Officer, General Motors Corporation; Franklin A. Thomas,
President, The Ford Foundation, New York, New York; and Edgar S.
Woolard, Jr., Chairman and Chief Executive Officer, E.I. du Pont
de Nemours & Company.
Each of the individuals named above is also a Director of Citicorp. In
addition, the following persons have the affiliations indicated:
D. Wayne Calloway Director, Exxon Corporation
Director, General Electric Company
Director, Pepsico, Inc.
Colby H. Chandler Director, Digital Equipment Corporation
Director, Ford Motor Company
Director, J.C. Penney Company, Inc.
Pei-yuan Chia none
Paul J. Collins Director, Kimberly-Clark Corporation
Kenneth T. Derr Director, Chevron Corporation
Director, Potlatch Corporation
H.J. Haynes Director, Bechtel Group, Inc.
Director, Boeing Company
Director, Fremont Group, Inc.
Director, Hewlett-Packard Company
Director, Paccar Inc.
Director, Saudi Arabian Oil Company
John S. Reed Director, Monsanto Company
Director, Philip Morris Companies
Incorporated
Stockholder, Tampa Tank & Welding,
Inc.
William R. Rhodes Director, Private Export Funding
Corporation
<PAGE>
Rozanne L. Ridgway Director, 3M
Director, Bell Atlantic Corporation
Director, Boeing Company
Director, Emerson Electric Company
Member-International Advisory Board,
New Perspective Fund, Inc.
Director, RJR Nabisco, Inc.
Director, Sara Lee Corporation
Director, Union Carbide Corporation
H. Onno Ruding Member, Board of Supervisory
Directors, Amsterdam Trustee's Kantoor
Advisor, Intercena (C&A) (Netherlands)
Member, Board of Supervisory
Directors, Pechiney Nederland N.V.
Member, Board of Advisers, Robeco N.V.
Advisory Director, Unilever N.V.
Advisory Director, Unilever PLC
Robert B. Shapiro Director, G.D. Searle & Co.
Director, Liposome Technology, Inc.
Director, Monsanto Company
Director, The Nutrasweet Company
Frank A. Shrontz Director, 3M
Director, Baseball of Seattle, Inc.
Director, Boeing Company
Director, Boise Cascade Corp.
Mario Henrique Simonsen Director, Companhia Bozano Simonsen
Comercioe E Industria
Director, Companhia Monteia & Aranha
President, Simposium Consultoria E
Servicos Tecnicos LTDA
Roger B. Smith Director, International Paper Company
Director, Johnson & Johnson
Director, Pepsico, Inc.
Director, Rubatex Corporation
Christopher J. Steffen none
Franklin A. Thomas Director, Aluminum Company of America
Director, American Telephone &
Telegraph, Co.
Director, CBS, Inc.
Director, Cummins Engine Company, Inc.
Director, Pepsico, Inc.
<PAGE>
Edgar S. Woolard, Jr. Director, E.I. DuPont De Nemours &
Company
Director, International Business Machines
Corp.
Director, Seagram Company, Ltd.
Item 29. Principal Underwriters.
(a) The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS"), the
Registrant's Distributor, is also the distributor for Landmark U.S. Treasury
Reserves, Landmark Cash Reserves, Premium U.S. Treasury Reserves, Premium Liquid
Reserves, Landmark Institutional U.S. Treasury Reserves, Landmark Institutional
Liquid Reserves, Landmark Tax Free Reserves, Landmark New York Tax Free
Reserves, Landmark California Tax Free Reserves, Landmark Connecticut Tax Free
Reserves, Landmark U.S. Government Income Fund, Landmark Intermediate Income
Fund, Landmark Balanced Fund, Landmark Equity Fund, Landmark International
Equity Fund, Landmark Small Cap Equity Fund, Landmark National Tax Free Income
Fund, Landmark New York Tax Free Income Fund, and Landmark VIP Funds (Landmark
VIP U.S. Government Portfolio, Landmark VIP Balanced Portfolio, Landmark VIP
Equity Portfolio and Landmark VIP International Equity Portfolio). LFBDS is also
the placement agent for Balanced Portfolio, Equity Portfolio, International
Equity Portfolio, Small Cap Equity Portfolio, Government Income Portfolio, Cash
Reserves Portfolio, U.S. Treasury Reserves Portfolio and Tax Free Reserves
Portfolio.
(b) The information required by this Item 29 with respect to each director
and officer of LFBDS is incorporated by reference to Schedule A of Form BD filed
by LFBDS pursuant to the Securities and Exchange Act of 1934 (File No. 8-32417).
(c) Not applicable.
Item 30. Location of Accounts and Records.
The accounts and records of the Registrant are located, in whole or in
part, at the office of the Registrant and the following locations:
NAME ADDRESS
The Landmark Funds Broker-Dealer 6 St. James Avenue
Services, Inc. Boston, MA 02116
(administrator and distributor)
State Street Bank and Trust Company 1776 Heritage Drive
(transfer agent) North Quincy, MA 02171
<PAGE>
Investors Bank & Trust Company One Lincoln Plaza
(custodian) Boston, MA 02111
Citibank, N.A. 153 East 53rd Street
(investment adviser) New York, NY 10043
SHAREHOLDER SERVICING AGENTS
Citibank, N.A. 450 West 33rd Street
New York, NY 10001
Citibank, N.A. -- Citigold 666 5th Avenue
New York, NY 10043
Citibank, N.A. -- The Citibank 153 East 53rd Street
Private Bank New York, NY 10022
Citibank, N.A. -- Citibank Global 153 East 53rd Street
Asset Management New York, NY 10043
Citibank, N.A. -- North American 111 Wall Street
Investor Services New York, NY 10043
Citicorp Investment Services One Court Square
Long Island City, NY 11120
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
The Registrant hereby undertakes to file a post-effective amendment to
this Registration Statement, containing reasonably current financial statements
that need not be certified, within four to six months following the effective
date of this amendment to the Registration Statement.
The Registrant hereby undertakes to comply with Section 16(c) of the
Investment Company Act of 1940.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston and Commonwealth of
Massachusetts on the 15th day of May, 1995.
LANDMARK INTERNATIONAL FUNDS
(Formerly, Landmark International Equity
Fund)
By: James B. Craver
James B. Craver
Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to this Registration Statement has been signed below by
the following persons in the capacities indicated below on May 15, 1995.
Signature Title
Philip W. Coolidge* President, Principal
Philip W. Coolidge Executive Officer and Trustee
James B. Craver Secretary, Treasurer,
James B. Craver Principal Financial Officer
and Principal Accounting
Officer
H.B. Alvord* Trustee
H.B. Alvord
Riley C. Gilley* Trustee
Riley C. Gilley
Diana R. Harrington* Trustee
Diana R. Harrington
Susan B. Kerley* Trustee
Susan B. Kerley
C. Oscar Morong, Jr.* Trustee
C. Oscar Morong, Jr.
Donald B. Otis* Trustee
Donald B. Otis
E. Kirby Warren* Trustee
E. Kirby Warren
William S. Woods, Jr.* Trustee
William S. Woods, Jr.
*By: James B. Craver
James B. Craver
Executed by James B. Craver
on behalf of those indicated
pursuant to Powers of
Attorney previously filed.
<PAGE>
SIGNATURES
The Premium Portfolios has duly caused this Post-Effective Amendment to
the Registration Statement on Form N-1A of Landmark International Funds
(formerly, Landmark International Equity Fund) to be signed on its behalf by the
undersigned, thereunto duly authorized, in George Town, Grand Cayman, Cayman
Islands, BWI, on the 15th day of May, 1995.
THE PREMIUM PORTFOLIOS
By: Susan Jakuboski
Susan Jakuboski, Assistant
Treasurer of
The Premium Portfolios
This Post-Effective Amendment to the Registration Statement on Form N-1A
of Landmark International Funds has been signed by the following persons in the
capacities indicated on May 15, 1995.
Signature Title
Philip W. Coolidge* President, Principal
Philip W. Coolidge Executive Officer and Trustee
James B.Craver* Secretary, Treasurer,
James B. Craver Principal Financial Officer
and Principal Accounting Officer
Elliott J. Berv* Trustee
Elliott J. Berv
Mark T. Finn* Trustee
Mark T. Finn
Walter E. Robb, III* Trustee
Walter E. Robb, III
*By: Susan Jakuboski
Susan Jakuboski
Executed by Susan Jakuboski
on behalf of those indicated
as attorney in fact.
<PAGE>
EXHIBIT INDEX
18 Form of Multiple Class Plan of the
Registrant adopted pursuant to
Rule 18f-3
LANDMARK INTERNATIONAL FUNDS
MULTIPLE CLASS PLAN
MULTIPLE CLASS PLAN, dated as of May 10, 1995, of Landmark International
Funds, a Massachusetts business trust
(the "Trust").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is registered under the Investment Company Act of 1940
(collectively with the rules and regulations promulgated thereunder, the "1940
Act"); and
WHEREAS, the shares of beneficial interest (par value $0.00001 per share)
of the Trust (the "Shares") are divided into separate series and may be divided
into one or more separate classes; and
WHEREAS, the Securities and Exchange Commission has issued an order, dated
October 19, 1994, under Section 6(c) of the 1940 Act, permitting the Trust to
issue multiple classes of Shares and granting the Trust an exemption from
Sections 2(a)(32), 2(a)(35), 18(f), 18(g), 18(i) and 22(d) of the 1940 Act and
Rule 22c-1 thereunder (the "Exemptive Order"); and
WHEREAS, the arrangements and expense allocations concerning multiple
classes of Shares which are contained in the Exemptive Order have been approved
by the Board of Trustees of the Trust, and such approval has not been revoked or
rescinded; and
WHEREAS, the Trust desires to adopt this Multiple Class Plan (the "Plan")
as a plan pursuant to Rule 18f-3 in order that it may issue multiple classes of
Shares;
NOW THEREFORE, the Trust hereby adopts this Plan pursuant to Rule 18f-3
under the 1940 Act, on the following terms and conditions:
1. The Trust may issue Shares in one or more classes (each, a "Class"
and collectively, the "Classes"). Shares so issued will have the
rights and preferences set forth in the Establishment and Designation
of Classes and the Trust's then current registration statement
relating thereto.
<PAGE>
2. Shares issued in Classes will be issued subject to and in accordance
with the terms and conditions set forth in the Exemptive Order.
3. Shares issued in Classes will be issued subject to and in accordance
with the terms of Rule 18f-3 under the 1940 Act, including, without
limitation:
(a) Each Class shall have a different arrangement for shareholder
services or the distribution of securities or both, and shall
pay all of the expenses of that arrangement;
(b) Each Class may pay a different share of other
expenses, not including advisory or custodial
fees or other expenses related to the
management of the Trust's assets, if these
expenses are actually incurred in a different
amount by that Class, or if the Class
receives services of a different kind or to a
different degree than other Classes;
(c) Each Class shall have exclusive voting rights on any matter
submitted to shareholders that relates solely to its
arrangement;
(d) Each Class shall have separate voting rights on any matter
submitted to shareholders in which the interests of one Class
differ from the interests of any other Class; and
(e) Except as otherwise permitted under Rule 18f-3 under the 1940
Act, each Class shall have the same rights and obligations of
any other Class.
4. This Plan shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the
1940 Act.
5. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan
shall not be affected thereby.
