As filed with the Securities and Exchange Commission on
April 7, 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. 9
AND
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 11
LANDMARK INTERNATIONAL EQUITY FUND*
(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 June 21, 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 filed a Rule 24f-2 Notice on
February 27, 1995 for Registrant's fiscal year ended
December 31, 1994.
___________________________________________________
* Relates only to Landmark Emerging Asian Markets
Equity Fund.
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 10.
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.
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 capital
Objective and growth; dividend income, if any, is incidental to this
Policies: 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
Adviser and
Distributor: Citibank, N.A., a wholly-owned
subsidiary of Citicorp, is the
investment adviser. Citibank 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
Redemptions: Customers of Shareholder Servicing
Agents may 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:
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
Invest: The Fund has its own suitability
considerations 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 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 -
Certain Risk Considerations" for more
information about risk factors.
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 29.*
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 Below(1)
Charges
(as a percentage of
original purchase
price
or redemption
proceeds,
whichever is less)
ANNUAL FUND OPERATING
EXPENSES AFTER FEE
WAIVERS AND
REIMBURSEMENTS (AS
A PERCENTAGE OF AVERAGE
NET ASSETS):
Investment 1.00% 1.00%
Management
Fee(2)
12b-1 Fees 0.10% 0.85%
(including
service fees for
Class B
shares) (2)(3)
Other Expenses
Administrative
Services Fees (2) 0.20% 0.20%
Shareholder Servicing
Agent Fees (2) 0.25% 0.25%
Other Operating
Expenses (2) 0.30% 0.30%
Total Fund
Operating
Expenses (4) 1.85% 2.60%
[FN]
___________________________
(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."
(2) After fee waivers and reimbursements.
(3) 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.
(4) Absent fee waivers and reimbursements, "Total Fund
Operating Expenses" would have been 2.50% for
Class A shares and 3.40% for Class B shares.
<PAGE> *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. There can be no assurance
that the fee waivers and reimbursements reflected in
the table will continue at their present levels.
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) $64 $100
Class B shares
Assuming complete redemption $75 $108
at end of period (2)
Assuming no redemption $25 $78
[FN]
__________________________
(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 and reflects certain voluntary fee waivers.
If waivers were not in place, the amounts in the
example would be $72 and $122 for Class A shares and
$84 and $134 for Class B shares (assuming complete
redemption at the end of each period). 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
and at least sixty-five percent of the Fund's total
assets is invested in securities of issuers in at least
three Emerging Asia Countries.
In determining whether an issuer is "located in"
or "in" a particular country, the Adviser will consider
a number of factors, including: (i) whether the
issuer's securities are principally traded in the
country's markets; (ii) where the issuer's principal
offices or operations are located; and (iii) the
percentage of the issuer's revenues derived from goods
or services sold or manufactured in the country. No
single factor will necessarily be determinative nor
must all be present.
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. During periods of unusual
economic or market conditions or for temporary
defensive purposes or liquidity, 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 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.
CERTAIN 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.
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 governing private or non-U.S. investment and
private property. 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.
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
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.
Certain 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
preclude the Fund from investing its investable assets
in the Portfolio or 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 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.
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
Sales Charge of average daily Other
net assets) Information
Class A Maximum initial Distribution fee Initial sales
sales of 0.10% charge waived
charge of 4.75% of or reduced for
the public offering certain
price 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 after issuance
purchase 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% 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 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.
Purchase orders will not be transmitted to the
Distributor until the investor's Shareholder Servicing
Agent has received the purchase price in Federal or
other immediately available funds. If Fund shares are
purchased by check, there will be a delay (usually not
longer than two business days) in transmitting the
purchase order until the check is converted into
Federal funds.
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:
<TABLE>
<CAPTION>
SALES CHARGE AS
PERCENTAGE OF THE
PUBLIC NET BROKER COMMISSION
AMOUNT OF PURCHASE AT THE OFFERING AMOUNT AS PERCENTAGE
OF THE
PUBLIC OFFERING PRICE PRICE INVESTED PUBLIC OFFERING PRICE
<S> <C> <C> <C>
Less than $25,000................... 4.75% 4.99% 4.23%
$25,000 to less than $50,000........ 4.50% 4.71% 4.01%
$50,000 to less than $100,000....... 4.00% 4.17% 3.56%
$100,000 to less than $250,000...... 3.50% 3.63% 3.12%
$250,000 to less than $500,000...... 2.50% 2.56% 2.23%
$500,000 to less than $l,000,000.... 2.00% 2.04% l.78%
$l,000,000 or more.................. none* none* none
* A contingent deferred sales charge may apply in
certain instances.
</TABLE>
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
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 (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.
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 Purchase............... 5%
2nd Year Since Purchase............... 4%
3rd Year Since Purchase............... 3%
4th Year Since Purchase............... 3%
5th Year Since Purchase............... 2%
6th Year Since Purchase............... 1%
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
(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." Shares of the
Fund may be exchanged only after payment in federal
funds for those shares has been made.
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 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 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 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. The Trustees of the Fund have determined that
the Fund's 1.00% investment advisory fee is reasonable
in light of the Fund's investment policy of investing
primarily in non-U.S. issuers. 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.
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
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 0.40% per annum of the
average daily net assets of the Fund represented by
shares owned by investors for whom such Shareholder
Servicing Agent maintains a servicing relationship.
However, each Shareholder Servicing Agent voluntarily
has agreed to waive a portion of its fee.
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 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.
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.
GENERAL INFORMATION
ORGANIZATION
The Fund is a series of Landmark International
Equity Fund (the "Trust"). The Trust is a
Massachusetts business trust which was organized on
August 7, 1990. 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.
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 1.75%. 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.
APPENDIX A
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 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.
APPENDIX B
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 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 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
counties.
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.
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.
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
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)
Statement of
Additional Information
June , 1995
LANDMARK EMERGING ASIAN MARKETS EQUITY FUND
(A member of the LandmarkSM Family of Funds) Class A and B Shares
Landmark Emerging Asian Markets Equity Fund (the
"Fund") is a series of Landmark International Equity
Fund (the "Trust"). 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
The Fund 2
Investment Objective, Policies and Restrictions 3
Performance Information 15
Determination of Net Asset Value; Valuation of
Securities; Additional Purchase and Redemption
Information 16
Management 19
Portfolio Transactions 28
Description of Shares, Voting Rights and Liabilities 29
Certain Additional Tax Matters 32
Independent Accountants and Financial Statements 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.
1. THE FUND
Landmark International Equity Fund (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. Because the Fund invests through
the Portfolio, all references in this Statement of
Additional Information to the Fund include the
Portfolio, except as otherwise noted. In addition,
references to the Trust, insofar as they relate to the
Fund, also include the Portfolio Trust, except as
otherwise noted.
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"). FBDS 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.
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 Prospectus contains a discussion of the
various types of securities in which the Fund 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.
The Fund'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 Fund's total assets is invested in
equity securities and at least sixty-five percent of the
Fund's total assets is invested in securities of issuers
in at least three of the Emerging Asia Countries.
The Trust has adopted the following policies with
respect to the Fund's investments in (i) warrants and
(ii) securities of issuers with less than three years'
continuous operation. The Trust's purchases of warrants
for the Fund will not exceed 5% of the Fund'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 Fund will
be deemed to be without value for the purpose of this
restriction. The Trust will not invest more than 5% of
the Fund's assets in companies which, including their
respective predecessors, have a record of less than three
years' continuous operation.
The policies described above and those described
below are not fundamental and may be changed without
shareholder approval.
REPURCHASE AGREEMENTS
The Fund may invest in repurchase agreements
collateralized by securities in which the Fund may
otherwise invest. Repurchase agreements are agreements
by which the Fund 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 Fund'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 Fund 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 Fund are fully collateralized, with
such collateral being marked to market daily.
RULE 144A SECURITIES
The Trust may purchase securities for the Fund
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 Trust does not invest more than 15% of the
Fund'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 Trust's Trustees may adopt guidelines
and delegate to the Adviser the daily function of
determining and monitoring liquidity of restricted
securities. The Trust's Trustees, however, retain
sufficient oversight and are ultimately responsible for
the determinations.
SECURITIES OF NON-U.S. ISSUERS
The Fund 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 Fund,
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 Fund's assets may be released prior to receipt of
payments, may expose the Fund 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 Fund 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 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 Fund 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 Fund 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 Fund 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 Fund
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 Fund may also enter
into currency hedging transactions in an attempt to
protect the value of their assets as measured in U.S.
dollars from unfavorable changes in currency exchange
rates and control regulations. (Although the Fund's
assets are valued daily in terms of U.S. dollars, the
Trust does not intend to convert the Fund's holdings of
non-U.S. currencies into U.S. dollars on a daily
basis.) The Fund does not currently intend to
speculate in currency exchange rates or forward
contracts.
The Fund 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 a Fund 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 contract
generally has no deposit requirement, and no fees or
commissions are charged at any stage for trades.
When the Fund 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 Fund 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 Fund 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 Fund'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 Fund does not enter
into such forward contracts or maintain a net exposure
to such contracts where the consummation of the
contracts obligates the Fund to deliver an amount of
non-U.S. currency in excess of the value of the Fund'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 a Fund will be served.
The Fund generally would not enter into a forward
contract with a term greater than one year. At the
maturity of a forward contract, the Fund 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 Fund retains the security and engages
in an offsetting transaction, the Fund will incur a
gain or a loss (as described below) to the extent that
there has been movement in forward contract prices. If
the Fund 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 period between the date the Fund 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 Fund
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 Fund
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 Fund's securities at the expiration
of a forward contract. Accordingly, it may be
necessary for the Fund 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 Fund 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 Fund is
obligated to deliver.
The Fund may also purchase put options on a non-
U.S. currency in order to protect against currency rate
fluctuations. If the Fund purchases a put option on a
non-U.S. currency and the value of the U.S. currency
declines, the Fund 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 Fund which otherwise would have resulted.
Conversely, where a rise in the U.S. dollar value of
another currency is projected, and where the Fund
anticipates investing in securities traded in such
currency, the Fund 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 Fund 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 Fund 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.
The Funds may write options on non-U.S. currencies
for hedging purposes or otherwise to achieve their
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.
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 Fund could
write a put option on the relevant currency which, if
rates move in the manner projected, will expire
unexercised and allow the Fund 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 Fund
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, a Fund 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 Fund 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
Fund'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 Fund may employ any
of the above described non-U.S. currency hedging
techniques to protect the value of its assets invested
in ADRs.
The Fund's dealings in non-U.S. currency contracts
are limited to the transactions described above. Of
course, the Fund 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 this method of protecting the value of the Fund's
securities against a decline in the value of a currency
does 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.
The Fund 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
Fund's assets equal to the amount of the purchase be
held aside or segregated to be used to pay for the
commitment, the Fund 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 Fund sells a borrowed
security and has a corresponding obligation to the
lender to return the identical security. The Fund, 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 Fund engages in a short sale, the collateral for
the short position is maintained for the Fund 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 Fund. These securities constitute the Fund's long
position.
The Fund does not engage in short sales against
the box for investment purposes. The Fund 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 Fund (or a security convertible or
exchangeable for such security), or when the Fund 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 Fund'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 Fund owns. There are
certain additional transaction costs associated with
short sales against the box, but the Fund endeavors to
offset these costs with the income from the investment
of the cash proceeds of short sales.
The Adviser does not expect that more than 40% of
the Fund'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 Fund 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 Fund 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 Fund 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 Fund 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 Fund would exceed 33 1/3% of
the value of its net assets.
WHEN-ISSUED SECURITIES
The Fund may purchase securities on a "when-
issued" or on a "forward delivery" basis. It is
expected that, under normal circumstances, the Fund
would take delivery of such securities. When the Fund
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 Fund's assets
equal to the amount of the purchase be held aside or
segregated to be used to pay for the commitment, the
Fund 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 Fund does not intend to make such
purchases for speculative purposes and intend to adhere
to the provisions of SEC policies, purchases of
securities on such bases may involve more risk than
other types of purchases. For example, the Fund 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 Fund 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 Fund's payment
obligation).
INVESTMENT RESTRICTIONS
FUNDAMENTAL RESTRICTIONS
The Trust, on behalf of the Fund, has adopted the
following policies which may not be changed with
respect to the Fund without approval by holders of a
majority of the outstanding voting securities of the
Fund, 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
respective Fund present at a meeting at which the
holders of more than 50% of the outstanding voting
securities of the Fund are present or represented by
proxy, or (ii) more than 50% of the outstanding voting
securities of the Fund. The term "voting securities"
as used in this paragraph has the same meaning as in
the 1940 Act. Corresponding restrictions have also
been adopted by the Portfolio Trust with respect to the
Portfolio.
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 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 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
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 the Fund does not as a matter of
operating policy: (i) borrow money for any purpose in
excess of 10% of the net assets of the Fund (taken at
cost) (the Fund will not purchase any securities for
the Fund at any time at which borrowings exceed 5% of
the total assets of the Fund (taken at market value)),
(ii) pledge, mortgage or hypothecate for any purpose in
excess of 10% of the net assets of the Fund (taken at
market value), (iii) sell any security which the Fund
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, 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 (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 (for purposes of this clause (v) securities of
non-U.S. banks shall be treated as investment company
securities, except that debt securities and non-voting
preferred stock of non-U.S. banks are not subject to
the 10% limitation described herein), (vi) taken
together with any investments described in clause (ix)
below, invest more than 15% of the net assets of the
Fund 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, (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 is an officer or director
of the Adviser, if after the purchase of the securities
of such issuer by the Fund, 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 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 determines that a liquid market
exists for such securities) if, as a result thereof,
more than 15% of the net assets of the Fund (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
(taken at market value) is held as collateral for such
sales at any one time (the Fund does 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 in response to changes in the various
state and federal requirements. The Portfolio Trust
has adopted corresponding policies for the Portfolio.
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 value of the securities or a later change in the
rating of the securities held for the Fund 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
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.
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 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 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.
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 (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
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.
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.
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 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 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.
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.
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.
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
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 are issued only upon the
written request of a shareholder, subject to the
policies of the shareholder's Shareholder Servicing
Agent, but the Trust will not issue a share certificate
with respect to shares that may be redeemed through
expedited or automated procedures established by a
Shareholder Servicing Agent.
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 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 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 Trust has elected that the Fund be treated,
and intends to qualify the Fund each year, as a
"regulated investment company" under Subchapter M of
the U.S. Internal Revenue Code of 1986, as amended (the
"Code"), by meeting certain income, distribution and
diversification requirements. Provided all such
requirements are met, no U.S. federal income or excise
taxes generally would be required to be paid from 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 Trust believes the Portfolio also will not be
required to pay any U.S. federal income or excise taxes
on the Portfolio's 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 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.
Special tax considerations apply with respect to
non-U.S. investments of the Fund. Use of non-U.S.
currencies for non-hedging purposes may be limited in
order to avoid a tax on the Funds. Investment by the
Fund in certain "passive foreign investment companies"
may also be limited in order to avoid a tax on the
Fund. Investment income received by the Fund 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 Fund to a reduced rate of tax or an
exemption from tax on such income. The Fund intends to
qualify for treaty reduced rates where available. It
is not possible, however, to determine the Fund's
effective rate of non-U.S. tax in advance since the
amount of the Fund's respective assets to be invested
within various countries is not known.
9. INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS
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.
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
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)
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
filed
herewi
th
* 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
****** 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
*, ** 25(a) Powers of Attorney for the Registrant
or
***
*** or 25(b) Powers of Attorney for The Premium
***** Portfolios
[FN]
_____________________
* 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.
Item 25. Persons Controlled by or under Common Control
with Registrant.
Not applicable.
Item 26. Number of Holders of Securities.
Title of Class Number of Record Holders
Shares of Beneficial Interest
(par value $0.00001 per share) As of April 1, 1995
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. 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
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 Endustria
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.
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, Earnings Growth 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 1776 Heritage Drive
Company (transfer agent) North Quincy, MA 02171
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 Stree
Private Bankt 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 commencement of operations of the Fund.
The Registrant hereby undertakes to comply
with Section 16(c) of the Investment Company
Act of 1940.
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 6th day
of April, 1995.
LANDMARK INTERNATIONAL
EQUITY FUND
By: Philip W. Coolidge
Philip W. Coolidge
President
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
April 6, 1995.
Signature Title
Philip W. Coolidge
Philip W. Coolidge President, Principal
Executive Officer and
Trustee
James B. Craver*
James B. Craver Secretary, Treasurer, Principal Financial
Officer and Principal Accounting Officer
H.B. Alvord*
H.B. Alvord Trustee
Riley C. Gilley*
Riley C. Gilley Trustee
Diana R. Harrington*
Diana R. Harrington Trustee
Susan B. Kerley*
Susan B. Kerley Trustee
C. Oscar Morong, Jr.*
C. Oscar Morong, Jr. Trustee
Donald B. Otis*
Donald B. Otis Trustee
E. Kirby Warren*
E. Kirby Warren Trustee
William S. Woods, Jr.*
William S. Woods, Jr. Trustee
*By: Philip W. Coolidge
Philip W. Coolidge
Executed by Philip W. Coolidge on behalf of those
indicated pursuant to Powers of Attorney previously
filed.
SIGNATURES
The Premium Portfolios has duly caused this Post-
Effective Amendment to the Registration Statement on Form
N-1A of 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 6th day of April, 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 Equity
Fund has been signed by the following persons in the
capacities indicated on April 6, 1995.
Signature Title
Philip W. Coolidge President, Principal Executive Officer and
Philip W. Coolidge Trustee
James B. Craver* Secretary, Treasurer, Principal Financial
James B. Craver 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.
EXHIBIT INDEX
1(b) Form of Amendment to Declaration of
Trust 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
8 Form of Custodian Agreement between the
Registrant and Investors Bank & Trust
Company, as custodian
Exhibit 1(b)
LANDMARK INTERNATIONAL EQUITY FUND
ESTABLISHMENT AND
DESIGNATION OF SERIES OF SHARES OF
BENEFICIAL INTEREST (PAR VALUE $0.00001)
Pursuant to Section 6.9 of the Declaration of
Trust, as amended (the "Declaration of Trust") of
Landmark International Equity Fund (the "Trust"), the
Trustees of the Trust hereby establish and designate
the following series of Shares (as defined in the
Declaration of Trust) (each, a "Fund"), such series to
have the following special and relative rights:
1. The Funds shall be designated as follows:
Landmark International Equity Fund
Landmark Emerging Asian Markets Equity Fund
2. Each Fund shall be authorized to hold cash,
invest in securities, instruments and other property
and use investment techniques as from time to time
described in the Trust's then currently effective
registration statement under the Securities Act of 1933
to the extent pertaining to the offering of Shares of
that Fund. Each share of each Fund shall be
redeemable, shall be entitled to one vote (or a
fraction thereof in respect of a fractional share) on
matters on which Shares of that Fund shall be entitled
to vote, shall represent a pro rata beneficial interest
in the assets allocated or belonging to that Fund, and
shall be entitled to receive its pro rata share of the
net assets of that Fund upon liquidation of that Fund,
all as provided in Section 6.9 of the Declaration of
Trust. The proceeds of sales of Shares of each Fund,
together with any income and gain thereon, less any
diminution or expenses thereof, shall irrevocably
belong to that Fund, unless otherwise required by law.
3. Shareholders of each Fund shall vote
separately as a class on any matter to the extent
required by, and any matter shall have been deemed
effectively acted upon with respect to that Fund as
provided in, Rule 18f-2, as from time to time in
effect, under the Investment Company Act of 1940, as
amended, or any successor rule, and the Declaration of
Trust.
4. The assets and liabilities of the Trust shall
be allocated among the Funds as set forth in Section
6.9 of the Declaration of Trust, except that all
existing assets and liabilities of the Trust as of the
date of this Designation of Series shall be deemed to
be assets and liabilities of the Landmark International
Equity Fund and all Shares of the Trust outstanding as
of the date of this Designation of Series shall be
deemed to be outstanding Shares of the Landmark
International Equity Fund.
5. Subject to the provisions of Section 6.9 and
Article IX of the Declaration of Trust, the Trustees
(including any successor Trustees) shall have the right
at any time and from time to time to change the
designation of any Fund now or hereafter created, or to
otherwise change the special and relative rights of any
Fund.
IN WITNESS WHEREOF, the undersigned have executed
this instrument as of the ____ day of March, 1995.
H.B. ALVORD DIANA R. HARRINGTON
PHILIP W. COOLIDGE SUSAN B. KERLEY
RILEY C. GILLEY C. OSCAR MORONG, JR.
DONALD B. OTIS E. KIRBY WARREN
WILLIAM S. WOODS, JR.
Exhibit 5
INVESTMENT ADVISORY AGREEMENT
THE PREMIUM PORTFOLIOS
EMERGING ASIAN MARKETS EQUITY PORTFOLIO
INVESTMENT ADVISORY AGREEMENT, dated as of May 5,
1995, by and between The Premium Portfolios, a New York
trust (the "Trust"), and CITIBANK, N.A., a national
banking association ("Citibank" or the "Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an
open-end investment company registered under the
Investment Company Act of 1940 (collectively with the
rules and regulations promulgated thereunder, the "1940
Act"), and
WHEREAS, the Trust wishes to engage the Adviser to
provide certain investment advisory services for the
series of the Trust designated as Emerging Asian
Markets Equity Portfolio (the "Portfolio"), and the
Adviser is willing to provide such investment advisory
services for the Portfolio on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements of the parties hereto as
herein set forth, the parties covenant and agree as
follows:
1. Duties of the Adviser. The Adviser shall
provide the Portfolio with such investment advice
and supervision as the Trust may from time to time
consider necessary for the proper supervision of
the Portfolio's investment assets. Citibank shall
act as the Adviser for the Portfolio and as such
shall furnish continuously an investment program
and shall determine from time to time what
securities shall be purchased, sold or exchanged
and what portion of the assets of the Portfolio
shall be held uninvested, subject always to the
restrictions of the Trust's Declaration of Trust,
dated September 13, 1993, and By-laws, as each may
be amended from time to time (respectively, the
"Declaration" and the "By-Laws"), to the
provisions of the 1940 Act, and to the then-
current Registration Statement of the Trust with
respect to the Portfolio. The Adviser shall also
make recommendations as to the manner in which
voting rights, rights to consent to corporate
action and any other rights pertaining to the
Portfolio's securities shall be exercised. Should
the Board of Trustees of the Trust at any time,
however, make any definite determination as to
investment policy applicable to the Portfolio and
notify the Adviser thereof in writing, the Adviser
shall be bound by such determination for the
period, if any, specified in such notice or until
similarly notified that such determination has
been revoked. The Adviser shall take, on behalf
of the Portfolio, all actions which it deems
necessary to implement the investment policies
determined as provided above, and in particular to
place all orders for the purchase or sale of
securities for the Portfolio's account with the
brokers or dealers selected by it, and to that end
the Adviser is authorized as the agent of the
Trust to give instructions to the custodian of the
Portfolio as to deliveries of securities and
payments of cash for the account of the Portfolio.
In connection with the selection of such brokers
or dealers and the placing of such orders, the
Adviser is directed to seek for the Portfolio, 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 Portfolio, subject
to any applicable laws, rules and regulations. In
making purchases or sales of securities or other
property for the account of the Portfolio, the
Adviser may deal with itself or with the Trustees
of the Trust or the Trust's exclusive placing
agent, to the extent such actions are permitted by
the 1940 Act.
2. Allocation of Charges and Expenses. The
Adviser shall furnish at its own expense all
necessary services, facilities and personnel in
connection with its responsibilities under Section
1 above. It is understood that the Trust will pay
from the assets of the Portfolio all of its own
expenses allocable to the Portfolio including,
without limitation, compensation of Trustees not
"affiliated" with the Adviser; governmental fees;
interest charges; taxes; membership dues in the
Investment Company Institute allocable to the
Trust; fees and expenses of independent auditors,
of legal counsel and of any transfer agent,
administrator, distributor, shareholder servicing
agent, registrar or dividend disbursing agent of
the Trust; expenses of issuing and redeeming
interests and servicing investor accounts;
expenses of preparing, printing and mailing
notices, proxy statements and reports to
governmental officers and commissions and to
investors in the Portfolio; expenses connected
with the execution, recording and settlement of
security transactions; insurance premiums; fees
and expenses of the custodian for all services to
the Portfolio, including safekeeping of funds and
securities and maintaining required books and
accounts; expenses of calculating the net asset
value of the Portfolio; and expenses of meetings
of the Portfolio's investors.
3. Compensation of the Adviser. For the
services to be rendered, the Trust shall pay to
the Adviser from the assets of the Portfolio an
investment advisory fee computed and paid monthly
at an annual rate equal to 1.00% of the
Portfolio's average daily net assets for the
Portfolio's then-current fiscal year. If Citibank
serves as Adviser for less than the whole of any
period specified in this Section 3, the
compensation to Citibank, as Adviser, shall be
prorated.
4. Covenants of the Adviser. The Adviser agrees
that it will not deal with itself, or with the
Trustees of the Trust or the Trust's principal
underwriter or distributor, as principals in
making purchases or sales of securities or other
property for the account of the Portfolio, except
as permitted by the 1940 Act, will not take a long
or short position in beneficial interests of the
Portfolio except as permitted by the Declaration,
and will comply with all other provisions of the
Declaration and By-Laws and the then-current
Registration Statement applicable to the Portfolio
relative to the Adviser and its Directors and
officers.
5. Limitation of Liability of the Adviser. The
Adviser shall not be liable for any error of
judgment or mistake of law or for any loss arising
out of any investment or for any act or omission
in the execution of securities transactions for
the Portfolio, except for willful misfeasance, bad
faith or gross negligence in the performance of
its duties, or by reason of reckless disregard of
its obligations and duties hereunder. As used in
this Section 5, the term "Adviser" shall include
Directors, officers and employees of the Adviser
as well as Citibank itself.
6. Activities of the Adviser. The services of
the Adviser to the Portfolio are not to be deemed
to be exclusive, Citibank being free to render
investment advisory and/or other services to
others. It is understood that Trustees, officers,
and investors of the Trust are or may be or may
become interested in the Adviser, as Directors,
officers, employees, or otherwise and that
Directors, officers and employees of the Adviser
are or may become similarly interested in the
Trust and that the Adviser may be or may become
interested in the Trust as an investor or
otherwise.
7. Duration, Termination and Amendments of this
Agreement. This Agreement shall become effective
as of the day and year first above written and
shall govern the relations between the parties
hereto thereafter, and shall remain in force until
April 30, 1997 on which date it will terminate
unless its continuance after April 30, 1997 is
"specifically approved at least annually" (a) by
the vote of a majority of the Trustees of the
Trust who are not "interested persons" of the
Trust or of the Adviser at a meeting specifically
called for the purpose of voting on such approval,
and (b) by the Board of Trustees of the Trust or
by "vote of a majority of the outstanding voting
securities" of the Portfolio.
This Agreement may be terminated at any time
without the payment of any penalty by the Trustees or
by the "vote of a majority of the outstanding voting
securities" of the Portfolio, or by the Adviser, in
each case on not more than 60 days' nor less than 30
days' written notice to the other party. This
Agreement shall automatically terminate in the event of
its "assignment".
This Agreement may be amended only if such
amendment is approved by the "vote of a majority of the
outstanding voting securities" of the Portfolio.
The terms "specifically approved at least
annually", "vote of a majority of the outstanding
voting securities", "assignment", "affiliated person",
and "interested persons", when used in this Agreement,
shall have the respective meanings specified in, and
shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may
be granted by the Securities and Exchange Commission
under said Act.
Each party acknowledges and agrees that all
obligations of the Trust under this Agreement are
binding only with respect to the Portfolio; that any
liability of the Trust under this Agreement with
respect to the Portfolio, or in connection with the
transactions contemplated herein with respect to the
Portfolio, shall be discharged only out of the assets
of the Portfolio; and that no other series of the Trust
shall be liable with respect to this Agreement or in
connection with the transactions contemplated herein.
The undersigned Trustee or officer of the Trust
has executed this Agreement not individually, but as
Trustee or officer under the Trust's Declaration of
Trust, dated September 13, 1993, as amended, and the
obligations of this Agreement are not binding upon any
of the Trustees or officers of the Trust individually.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed and delivered in their
names and on their behalf by the undersigned, thereunto
duly authorized, all as of the day and year first above
written.
THE PREMIUM PORTFOLIOS CITIBANK, N.A.
By: By:
Title: Title:
Exhibit 8
CUSTODIAN AGREEMENT
BETWEEN
LANDMARK INTERNATIONAL EQUITY FUND, ON BEHALF OF
LANDMARK EMERGING ASIAN MARKETS EQUITY FUND
AND
INVESTORS BANK & TRUST COMPANY
TABLE OF CONTENTS
PAGE
1. Bank Appointed Custodian
2. Definitions .......................................
2.1 Authorized Person ............................
2.2 Security .....................................
2.3 Portfolio Security ...........................
2.4 Officers' Certificate ........................
2.5 Book Entry System ............................
2.6 Depository ...................................
2.7 Proper Instructions ..........................
3. Separate Accounts .................................
4. Certification as to Authorized Persons ............
5. Custody of Cash....................................
5.1 Purchase of Securities ......................
5.2 Redemptions .................................
5.3 Distributions and Expenses of Fund ..........
5.4 Payment in Respect of Securities.. ..........
5.5 Repayment of Loans ..........................
5.6 Repayment of Cash ...........................
5.7 Foreign Exchange Transactions ...............
5.8 Other Authorized Payments ...................
5.9 Termination .................................
6. Securities ........................................
6.1 Segregation and Registration ................
6.2 Voting and Proxies ..........................
6.3 Book-Entry System ...........................
6.4 Use of a Depository .........................
6.5 Use of a Book-Entry System for
Commercial Paper ..........................
6.6 Use of Immobilization Programs ..............
6.7 Eurodollar CDs ..............................
6.8 Options and Futures Transactions ............
(a) Puts and Calls Traded on
Securities Exchanges, NASDAQ
or Over-the-Counter ..................
(b) Puts, Calls and Futures Traded
on Commodities Exchanges .............
6.9 Segregated Account ..........................
6.10Interest Bearing Call or
Time Deposits .............................
6.11Transfer of Securities ......................
7. Redemptions .......................................
8. Merger, Dissolution, etc. of Fund .................
9. Actions of Bank Without Prior Authorization .......
10. Collection; Defaults ..............................
11. Maintenance of Records.............................
12. Opinion of Fund's Independent Accountant ..........
13. Reports to Fund by Independent Public Accountants..
14. RESERVED....... ...................................
15. Concerning the Bank ...............................
15.1Performance of Duties;
Standard of Care ..........................
15.3Insurance ...................................
15.4Fees and Expenses of Bank ...................
15.5Advances by Bank ............................
16. Termination .......................................
17. Notices ...........................................
18. Amendments ........................................
19. Parties... ........................................
20. Governing Law .....................................
21. Limitations of Liability ..........................
<PAGE> CUSTODIAN AGREEMENT
AGREEMENT made as of this day of , 1995
between Landmark International Equity Fund, a
Massachusetts business trust, on behalf of its series
designated as Landmark Emerging Asian Markets Equity
Fund (the "Fund") and INVESTORS BANK & TRUST COMPANY,
(the "Bank").
The Fund, an open-end management investment
company, desires to place and maintain all of its
portfolio securities and cash in the custody of the
Bank. The Bank has at least the minimum qualifications
required by Section 17(f)(1) of the Investment Company
Act of 1940 (the "Act") to act as custodian of the
portfolio securities and cash of the Fund, and has
indicated its willingness to so act, subject to the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements contained herein, the parties
hereto agree as follows:
1. Bank Appointed Custodian. The Fund hereby
appoints the Bank as custodian of its portfolio
securities and cash delivered to the Bank as
hereinafter described and the Bank agrees to act as
such upon the terms and conditions hereinafter set
forth.
2. Definitions. Whenever used herein, the
terms listed below will have the following meaning:
2.1 Authorized Person. Authorized Person
will mean any of the persons duly authorized to
give Proper Instructions or otherwise act on
behalf of the Fund by appropriate resolution of
its Board of Directors (the "Board"), and set
forth in a certificate as required by Section 4
hereof.
2.2 Security. The term security as used
herein will have the same meaning as when such
term is used in the Securities Act of 1933, as
amended, including, without limitation, any note,
stock, treasury stock, bond, debenture, evidence
of indebtedness, certificate of interest or
participation in any profit sharing agreement,
collateral-trust certificate, preorganization
certificate or subscription, transferable share,
investment contract, voting-trust certificate,
certificate of deposit for a security, fractional
undivided interest in oil, gas, or other mineral
rights, any put, call, straddle, option, or
privilege on any security, certificate of deposit,
or group or index of securities (including any
interest therein or based on the value thereof),
or any put, call, straddle, option, or privilege
entered into on a national securities exchange
relating to a foreign currency, or, in general,
any interest or instrument commonly known as a
"security", or any certificate of interest or
participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or
right to subscribe to, or option contract to
purchase or sell any of the foregoing and futures,
forward contracts and options thereon.
2.3 Portfolio Security. Portfolio Security
will mean any Security owned by the Fund.
2.4 Officers' Certificate. Officers'
Certificate will mean, unless otherwise indicated,
any request, direction, instruction, or
certification in writing signed by any two
Authorized Persons of the Fund.
2.5 Book-Entry System. Book-Entry System
shall mean the Federal Reserve-Treasury Department
Book Entry System for United States government,
instrumentality and agency securities operated by
the Federal Reserve Bank, its successor or
successors and its nominee or nominees.
2.6 Depository. Depository shall mean The
Depository Trust Company ("DTC"), a clearing
agency registered with the Securities and Exchange
Commission under Section 17A of the Securities
Exchange Act of 1934, as amended (the "Exchange
Act"), its successor or successors and its nominee
or nominees. The term "Depository" shall further
mean and include any other person authorized to
act as a depository under the Act, its successor
or successors and its nominee or nominees,
specifically identified in a certified copy of a
resolution of the Board.
2.7. Proper Instructions. Proper
Instructions shall mean (i) instructions (which
may be continuing instructions) regarding the
purchase or sale of Portfolio Securities, and
payments and deliveries in connection therewith,
given by an Authorized Person as shall have been
designated in an Officers' Certificate, such
instructions to be given in such form and manner
as the Bank and the Fund shall agree upon from
time to time, and (ii) instructions (which may be
continuing instructions) regarding other matters
signed or initialed by such one or more persons
from time to time designated in an Officers'
Certificate as having been authorized by the
Board. Oral instructions will be considered
Proper Instructions if the Bank reasonably
believes them to have been given by a person
authorized to give such instructions with respect
to the transaction involved. The Fund shall cause
all oral instructions to be promptly confirmed in
writing. The Bank shall act upon and comply with
any subsequent Proper Instruction which modifies a
prior instruction and the sole obligation of the
Bank with respect to any follow-up or confirmatory
instruction shall be to make reasonable efforts to
detect any discrepancy between the original
instruction and such confirmation and to report
such discrepancy to the Fund. The Fund shall be
responsible, at the Fund's expense, for taking any
action, including any reprocessing, necessary to
correct any such discrepancy or error, and to the
extent such action requires the Bank to act the
Fund shall give the Bank specific Proper
Instructions as to the action required. Upon
receipt of an Officers' Certificate as to the
authorization by the Board accompanied by a
detailed description of procedures approved by the
Fund, Proper Instructions may include
communication effected directly between electro-
mechanical or electronic devices provided that the
Board and the Bank are satisfied that such
procedures afford adequate safeguards for the
Fund's assets.
3. Separate Accounts. If the Fund has more
than one series or portfolio, the Bank will
segregate the assets of each series or portfolio to
which this Agreement relates into a separate account
for each such series or portfolio containing the
assets of such series or portfolio (and all
investment earnings thereon).
4. Certification as to Authorized Persons.
The Secretary or Assistant Secretary of the Fund
will at all times maintain on file with the Bank his
certification to the Bank, in such form as may be
acceptable to the Bank, of (i) the names and
signatures of the Authorized Persons and (ii) the
names of the members of the Board, it being
understood that upon the occurrence of any change in
the information set forth in the most recent
certification on file (including without limitation
any person named in the most recent certification
who is no longer an Authorized Person as designated
therein), the Secretary or Assistant Secretary of
the Fund will sign a new or amended certification
setting forth the change and the new, additional or
omitted names or signatures. The Bank will be
entitled to rely and act upon any Officers'
Certificate given to it by the Fund which has been
signed by Authorized Persons named in the most
recent certification.
5. Custody of Cash. As custodian for the
Fund, the Bank will open and maintain a separate
account or accounts in the name of the Fund or in
the name of the Bank, as Custodian of the Fund, and
will deposit to the account of the Fund all of the
cash of the Fund, except for cash held by a
subcustodian appointed pursuant to Section 15.2
hereof, including borrowed funds, delivered to the
Bank, subject only to draft or order by the Bank
acting pursuant to the terms of this Agreement.
Upon receipt by the Bank of Proper Instructions
(which may be continuing instructions) or in the
case of payments for redemptions and repurchases of
outstanding beneficial interests in the Fund,
notification from the Fund's transfer agent as
provided in Section 7, requesting such payment,
designating the payee or the account or accounts to
which the Bank will release funds for deposit, and
stating that it is for a purpose permitted under the
terms of this Section 5, specifying the applicable
subsection, or describing such purpose with
sufficient particularity to permit the Bank to
ascertain the applicable subsection, the Bank will
make payments of cash held for the accounts of the
Fund, insofar as funds are available for that
purpose, only as permitted in subsections 5.1 - 5.9
below.
5.1 Purchase of Securities: upon the
purchase of securities for the Fund, against
contemporaneous receipt of such securities by the
Bank or, for transactions outside the U.S.,
against delivery of such securities to the Bank in
accordance with generally accepted settlement
practices and customs in the jurisdiction or
market in which the transaction occurs, registered
in the name of the Fund or in the name of, or
properly endorsed and in form for transfer to, the
Bank, or a nominee of the Bank, or receipt for the
account of the Bank pursuant to the provisions of
Section 6 below, each payment to be made at the
purchase price shown on a broker's confirmation
(or transaction report in the case of Book Entry
Paper (as defined in Section 6.5)) of purchase of
the securities received by the Bank before such
payment is made, as confirmed in the Proper
Instructions received by the Bank before such
payment is made. In any and every case where
payment for purchases of securities for the
account of the Fund is made by the Bank in advance
of receipt of the securities purchased in the
absence of Proper Instructions to so pay in
advance, except as expressly permitted by the
first sentence of this paragraph, the Bank shall
be absolutely liable to the Fund for such
securities to the same extent as if the securities
had been received by the Bank except that in the
case of repurchase agreements entered into by the
Fund with a bank which is a member of the Federal
Reserve System, the Bank may transfer funds to the
account of such bank prior to the receipt of
written evidence that the securities subject to
such repurchase agreement have been transferred by
book-entry into a segregated non-proprietary
account of the Bank maintained with the Federal
Reserve Bank of Boston or of the safekeeping
receipt, provided that such securities have in
fact been so transferred by book-entry;
5.2 Redemptions: in such amount as may be
necessary for the repurchase or redemption of
beneficial interests in the Fund offered for
repurchase or redemption in accordance with
Section 7 of this Agreement;
5.3 Distributions and Expenses of Fund: for
the payment on the account of the Fund of
dividends or other distributions to investors as
may from time to time be declared by the Board,
interest, taxes, management or supervisory fees,
distribution fees, fees of the Bank for its
services hereunder and reimbursement of the
expenses and liabilities of the Bank as provided
hereunder, fees of any transfer agent, fees for
legal, accounting, and auditing services, or other
operating expenses of the Fund;
5.4 Payment in Respect of Securities: for
payments in connection with the conversion,
exchange or surrender of Portfolio Securities or
securities subscribed to by the Fund held by or to
be delivered to the Bank;
5.5 Repayment of Loans: to repay loans of
money made to the Fund, but, in the case of final
payment, only upon redelivery to the Bank of any
Portfolio Securities pledged or hypothecated
therefor and upon surrender of documents
evidencing the loan;
5.6 Repayment of Cash: to repay the cash
delivered to the Fund for the purpose of
collateralizing the obligation to return to the
Fund certificates borrowed from the Fund
representing Portfolio Securities, but only upon
redelivery to the Bank of such borrowed
certificates;
5.7 Foreign Exchange Transactions: for
payments in connection with foreign exchange
contracts or options to purchase and sell foreign
currencies for spot and future delivery which may
be entered into by the Bank on behalf of the Fund
upon the receipt of Proper Instructions, such
Proper Instructions to specify the currency broker
or banking institution (which may be the Bank, or
any other subcustodian or agent hereunder, acting
as principal) with which the contract or option is
made, and the Bank shall have no duty with respect
to the selection of such currency brokers or
banking institutions with which the Fund deals or
for their failure to comply with the terms of any
contract or option;
5.8 Other Authorized Payments: for other
authorized transactions of the Fund, or other
obligations of the Fund incurred for proper Fund
purposes; provided that before making any such
payment the Bank will also receive a certified
copy of a resolution of the Board signed by an
Authorized Person (other than the Person
certifying such resolution) and certified by its
Secretary or Assistant Secretary, naming the
person or persons to whom such payment is to be
made, and either describing the transaction for
which payment is to be made and declaring it to be
an authorized transaction of the Fund, or
specifying the amount of the obligation for which
payment is to be made, setting forth the purpose
for which such obligation was incurred and
declaring such purpose to be a proper corporate
purpose; and
5.9 Termination: upon the termination of
this Agreement as hereinafter set forth pursuant
to Section 8 and Section 16 of this Agreement.
6. Securities
6.1 Segregation and Registration. Except as
otherwise provided herein, and except for
securities to be delivered to any subcustodian
appointed pursuant to Section 15.2 hereof, the
Bank as custodian, will receive and hold pursuant
to the provisions hereof, in a separate account or
accounts and physically segregated at all times
from those of other persons, any and all Portfolio
Securities which may now or hereafter be delivered
to it by or for the account of the Fund. All such
Portfolio Securities will be held or disposed of
by the Bank for, and subject at all times to, the
instructions of the Fund pursuant to the terms of
this Agreement. Subject to the specific
provisions herein relating to Portfolio Securities
that are not physically held by the Bank, the Bank
will register all Portfolio Securities (unless
otherwise directed by Proper Instructions or an
Officers' Certificate), in the name of a
registered nominee of the Bank as defined in the
Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, and will
execute and deliver all such certificates in
connection therewith as may be required by such
laws or regulations or under the laws of any
State. The Bank will use its best efforts to the
end that the specific Portfolio Securities held by
it hereunder will be at all times identifiable.
The Fund will from time to time furnish to
the Bank appropriate instruments to enable it to
hold or deliver in proper form for transfer, or to
register in the name of its registered nominee,
any Portfolio Securities which may from time to
time be registered in the name of the Fund.
6.2 Voting and Proxies. Neither the Bank
nor any nominee of the Bank will vote any of the
Portfolio Securities held hereunder, except in
accordance with Proper Instructions or an
Officers' Certificate. The Bank will promptly
execute and deliver, or cause to be executed and
delivered, to the Fund all notices, proxies and
proxy soliciting materials with respect to
Portfolio Securities, such proxies to be executed
by the registered holder of such Securities, (if
registered otherwise than in the name of the
Fund), but without indicating the manner in which
such proxies are to be voted.
6.3 Book-Entry System. Provided (i) the
Bank has received a certified copy of a resolution
of the Board specifically approving deposits of
Fund assets in the Book-Entry System, and (ii) for
each year following such approval, the Board has
reviewed and approved the arrangement and has not
delivered an Officers' Certificate to the Bank
indicating that the Board has withdrawn its
approval:
(a) The Bank may keep Portfolio
Securities in the Book-Entry System provided
that such Portfolio Securities are represented
in an account ("Account") of the Bank (or its
agent) in such System which shall not include
any assets of the Bank (or such agent) other
than assets held as a fiduciary, custodian, or
otherwise for customers.
(b) The records of the Bank (and any such
agent) with respect to the Fund's participation
in the Book-Entry System through the Bank (or
any such agent) will identify by book entry
Portfolio Securities which are included with
other securities deposited in the Account and
shall at all times during the regular business
hours of the Bank (or such agent) be open for
inspection by duly authorized officers,
employees or agents of the Fund's account.
Where securities are transferred to the Fund's
account, the Bank shall also, by book entry or
otherwise, identify as belonging to the Fund a
quantity of securities in fungible bulk of
securities (i) registered in the name of the
Bank or its nominee, or (ii) shown on the
Bank's account on the books of the Federal
Reserve Bank.
(c) The Bank (or its agent) shall pay for
Portfolio Securities purchased for the account
of the Fund or shall pay cash collateral
against the return of securities loaned by the
Fund upon (i) receipt of advice from the Book-
Entry System that such Securities have been
transferred to the Account, and (ii) the making
of an entry on the records of the Bank (or its
agent) to reflect such payment and transfer for
the account of the Fund. The Bank (or its
agent) shall transfer securities sold or loaned
for the account of the Fund upon:
(i) receipt of advice from the Book-
Entry System that payment for securities sold
or payment of the initial cash collateral
against the delivery of securities loaned by
the Fund has been transferred to the Account,
and
(ii) the making of an entry on the
records of the Bank (or its agent) to reflect
such transfer and payment for the account of
the Fund. Copies of all advises from the
Book-Entry System of transfers of Securities
for the account of the Fund shall identify
the Fund, be maintained for the Fund by the
Bank and shall be provided to the Fund at its
request. The Bank shall send the Fund a
confirmation, as defined by Rule 17f-4 under
the Act, of any transfers to or from the
account of the Fund.
(d) The Bank will promptly provide the
Fund with any report obtained by the Bank or
its agent on the Book-Entry System's accounting
system, internal accounting control and
procedures for safeguarding securities
deposited in the Book-Entry System.
(e) The Bank shall be liable to the Fund
for any loss or damage to the Fund resulting
from use of the Book-Entry System by reason of
any negligence, misfeasance or misconduct of
the Bank or any of its agents or of any of its
or their employees or from failure of the Bank
or any such agent to enforce effectively such
rights as it may have against the Book-Entry
System; at the election of the Fund, it shall
be entitled to be subrogated to the Bank in any
claim against the Book-Entry System or any
other person which the Bank or its agent may
have as a consequence of any such loss or
damage if and to the extent that the Fund has
not been made whole for any loss or damage.
6.4 Use of a Depository. Provided (i) the
Bank has received a certified copy of a resolution
of the Board specifically approving deposits in
DTC or other such Depository and (ii) for each
year following such approval, the Board has
reviewed and approved the arrangement and has not
delivered an Officers' Certificate to the Bank
indicating that the Board has withdrawn its
approval:
(a) The Bank may use a Depository to
hold, receive, exchange, release, lend, deliver
and otherwise deal with the Portfolio
Securities including stock dividends, rights
and other items of like nature, and to receive
and remit to the Bank on behalf of the Fund all
income and other payments thereon and to take
all steps necessary and proper in connection
with the collection thereof.
(b) Registration of the Portfolio
Securities may be made in the name of any
nominee or nominees used by such Depository.
(c) Payment for securities purchased and
sold may be made through the clearing medium
employed by such Depository for transactions of
participants acting through it. Upon any
purchase of Portfolio Securities, payment will
be made only upon delivery of the securities to
or for the account of the Fund and the Fund
shall pay cash collateral against the return of
Securities loaned by the Fund only upon
delivery of the Portfolio Securities to or for
the account of the Fund; and upon any sale of
Portfolio Securities, delivery of the Portfolio
Securities will be made only against payment
therefor, or, in the event Securities are
loaned, delivery of Securities will be made
only against receipt of the initial cash
collateral to or for the account of the Fund.
(d) The Bank shall be liable to the Fund
for any loss or damage to the Fund resulting
from use of a Depository by reason of any
negligence, misfeasance or misconduct of the
Bank or its employees or from failure of the
Bank to enforce effectively such rights as it
may have against a Depository. In this
connection, the Bank shall use its best efforts
to ensure that:
(i) The Depository obtains replacement
of any certificated Portfolio Security
deposited with it in the event such Security
is lost, destroyed, wrongfully taken or
otherwise not available to be returned to the
Bank upon its request;
(ii) Any proxy materials received by a
Depository with respect to Portfolio
Securities deposited with such Depository are
forwarded immediately to the Bank for prompt
transmittal to the Fund;
(iii) Such Depository immediately
forwards to the Bank confirmation of any
purchase or sale of Portfolio Securities and
of the appropriate book entry made by such
Depository to the Fund's account;
(iv) Such Depository prepares and
delivers to the Bank such records with
respect to the performance of the Bank's
obligations and duties hereunder as may be
necessary for the Fund to comply with the
record keeping requirements of Section 31(a)
of the Act and Rule 31a-1 thereunder; and
(v) Such Depository delivers to the Bank
and the Fund all internal accounting control
reports, whether or not audited by an
independent public accountant, as well as such
other reports as the Fund may reasonably
request in order to verify the Portfolio
Securities held by such Depository.
6.5 Use of Book-Entry System for Commercial
Paper. Provided (i) the Bank has received a
certified copy of a resolution of the Board
specifically approving participation in a system
maintained by the Bank for the holding of
commercial paper in book-entry form ("Book Entry
Paper") and (ii) for each year following such
approval the Board has received and approved the
arrangements, upon receipt of Proper Instructions
and upon receipt of confirmation from an Issuer
(as defined below) that the Fund has purchased
such Issuer's Book Entry Paper, the Bank shall
issue and hold in book-entry form, on behalf of
the Fund, commercial paper issued by issuers with
whom the Bank has entered into a book-entry
agreement (the "Issuers"). In maintaining its
Book Entry Paper System, the Bank agrees that:
(a) The Bank will maintain all Book Entry
Paper held by the Fund in an account of the
Bank that includes only assets held by it for
customers;
(b) The records of the Bank with respect
to the Fund's purchase of Book Entry Paper
through the Bank will identify, by book entry,
Commercial Paper belonging to the Fund which is
included in the Book Entry Paper System and
shall at all times during the regular business
hours of the Bank be open for inspection by
duly authorized officers, employees or agents
of the Fund;
(c) The Bank shall pay for Book Entry
Paper purchased for the account of the Fund
upon contemporaneous (i) receipt of advice from
the Issuer that such sale of Book Entry Paper
has been effected, and (ii) the making of an
entry on the records of the Bank to reflect
such payment and transfer for the account of
the Fund;
(d) The Bank shall cancel such Book Entry
Paper obligation upon the maturity thereof upon
contemporaneous (i) receipt of advice that
payment for such Book Entry Paper has been
transferred to the Fund, and (ii) the making of
an entry on the records of the Bank to reflect
such payment for the account of the Fund;
(e) The Bank shall transmit to the Fund a
transaction journal confirming each transaction
in Book Entry Paper for the account of the Fund
on the next business day following the
transactions; and
(f) The Bank will send to the Fund such
reports on its system of internal accounting
control with respect to the Book Entry Paper
System as the Fund may reasonably request from
time to time.
6.6 Use of Immobilization Programs.
Provided (i) the Bank has received a certified
copy of a resolution of the Board specifically
approving the maintenance of Portfolio Securities
in an immobilization program operated by a bank
which meets the requirements of Section 26(a)(1)
of the Act, and (ii) for each year following such
approval the Board has reviewed and approved the
arrangement and has not delivered an Officers'
Certificate to the Bank indicating that the Board
has withdrawn its approval, the Bank shall enter
into such immobilization program with such bank
acting as a subcustodian hereunder.
6.7 Eurodollar CDs. Any Portfolio
Securities which are Eurodollar CDs may be
physically held by the European branch of the U.S.
banking institution that is the issuer of such
Eurodollar CD (a "European Branch"), provided that
such Securities are identified on the books of the
Bank as belonging to the Fund and that the books
of the Bank identify the European Branch holding
such Securities. Notwithstanding any other
provision of this Agreement to the contrary,
except as stated in the first sentence of this
subsection 6.7, the Bank shall be under no other
duty with respect to such Eurodollar CDs belonging
to the Fund, and shall have no liability to the
Fund or its investors with respect to the actions,
inactions, whether negligent or otherwise of such
European Branch in connection with such Eurodollar
CDs, except for any loss or damage to the Fund
resulting from the Bank's own negligence, willful
misfeasance or misconduct in the performance of
its duties hereunder.
6.8 Options and Futures Transactions.
(a) Puts and Calls Traded on Securities
Exchanges, NASDAQ or Over-the-Counter.
1. The Bank shall take action as to put
options ("puts") and call options ("calls")
purchased or sold (written) by the Fund
regarding escrow or other arrangements (i) in
accordance with the provisions of any agreement
entered into upon receipt of Proper
Instructions between the Bank, any broker-
dealer registered under the Exchange Act and a
member of the National Association of
Securities Dealers, Inc. (the "NASD"), and, if
necessary, the Fund relating to the compliance
with the rules of the Options Clearing
Corporation and of any registered national
securities exchange, or of any similar
organization or organizations.
2. Unless another agreement requires it
to do so, the Bank shall be under no duty or
obligation to see that the Fund has deposited
or is maintaining adequate margin, if required,
with any broker in connection with any option,
nor shall the Bank be under duty or obligation
to present such option to the broker for
exercise unless it receives Proper Instructions
from the Fund. The Bank shall have no
responsibility for the legality of any put or
call purchased or sold on behalf of the Fund,
the propriety of any such purchase or sale, or
the adequacy of any collateral delivered to a
broker in connection with an option or
deposited to or withdrawn from a Segregated
Account (as defined in subsection 6.9 below).
The Bank specifically, but not by way of
limitation, shall not be under any duty or
obligation to: (i) periodically check or notify
the Fund that the amount of such collateral
held by a broker or held in a Segregated
Account is sufficient to protect such broker or
the Fund against any loss; (ii) effect the
return of any collateral delivered to a broker;
or (iii) advise the Fund that any option it
holds, has or is about to expire. Such duties
or obligations shall be the sole responsibility
of the Fund.
(b) Puts, Calls and Futures Traded on
Commodities Exchanges.
1. The Bank shall take action as to
puts, calls and futures contracts ("Futures")
purchased or sold by the Fund in accordance
with the provisions of any agreement among the
Fund, the Bank and a Futures Commission
Merchant registered under the Commodity
Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading
Commission and/or any Contract Market, or any
similar organization or organizations,
regarding account deposits in connection with
transactions by the Fund.
2. The responsibilities and liabilities
of the Bank as to Futures, puts and calls
traded on commodities exchanges, any Futures
Commission Merchant account and the Segregated
Account shall be limited as set forth in
subparagraph (a)(2) of this Section 6.8 as if
such subparagraph referred to Futures
Commission Merchants rather than brokers, and
Futures and puts and calls thereon instead of
options.
6.9 Segregated Account. The Bank shall upon
receipt of Proper Instructions establish and
maintain a Segregated Account or Accounts for and
on behalf of the Fund, into which Account or
Accounts may be transferred upon receipt of Proper
Instructions cash and/or Portfolio Securities:
(a) in accordance with the provisions of
any agreement among the Fund, the Bank and a
broker-dealer registered under the Exchange Act
and a member of the NASD or any Futures
Commission Merchant registered under the
Commodity Exchange Act, relating to compliance
with the rules of the Options Clearing
Corporation and of any registered national
securities exchange or the Commodity Futures
Trading Commission or any registered Contract
Market, or of any similar organization or
organizations regarding escrow or other
arrangements in connection with transactions by
the Fund;
(b) for the purpose of segregating cash
or securities in connection with options
purchased, or written by the Fund or commodity
futures purchased or written by the Fund;
(c) for the deposit of liquid assets,
such as cash, U.S. Government securities or
other high grade debt obligations, having a
market value (marked to the market on a daily
basis) at all times equal to not less than the
aggregate purchase price due on the settlement
dates of all the Fund's then outstanding
forward commitment or "when-issued" agreements
relating to the purchase of Portfolio
Securities and all the Fund's then outstanding
commitments under reverse repurchase agreements
entered into with broker-dealer firms;
(d) for the deposit of any Portfolio
Securities which the Fund has agreed to sell on
a forward commitment basis, all in accordance
with Investment Company Act Release No. 10666;
(e) for the purposes of compliance by the
Fund with the procedures required by Investment
Company Act Release No. 10666, or any
subsequent release or releases of the
Securities and Exchange Commission relating to
the maintenance of Segregated Accounts by
registered investment companies;
(f) for other proper corporate purposes,
but only, in the case of this clause (f), upon
receipt of, in addition to Proper Instructions,
a certified copy of a resolution of the Board
signed by an officer of the Fund and certified
by the Secretary or an Assistant Secretary,
setting forth the purpose or purposes of such
Segregated Account and declaring such purposes
to be proper corporate purposes.
(g) Assets may be withdrawn from the
Segregated Account pursuant to Proper
Instructions only:
(i) in accordance with the provisions
of any agreements referenced in (a) or (b)
above;
(ii) for sale or delivery to meet the
Fund's obligations under outstanding firm
commitment or when-issued agreements for the
purchase of Portfolio Securities and under
reverse repurchase agreements;
(iii) for exchange for other liquid
assets of equal or greater value deposited in
the Segregated Account;
(iv) to the extent that the Fund's
outstanding forward commitment or when-issued
agreements for the purchase of portfolio
securities or reverse repurchase agreements
are sold to other parties or the Fund's
obligations thereunder are met from assets of
the Fund other than those in the Segregated
Account; or
(v) for delivery upon settlement of a
forward commitment agreement for the sale of
Portfolio Securities.
6.10 Interest Bearing Call or Time Deposits.
The Bank shall, upon receipt of Proper
Instructions relating to the purchase by the Fund
of interest bearing fixed term and call deposits,
transfer cash, by wire or otherwise, in such
amounts and to such bank or banks as shall be
indicated in such Proper Instructions. The Bank
shall include in its records with respect to the
assets of the Fund appropriate notation as to the
amount of each such deposit, the banking
institution with which such deposit is made (the
"Deposit Bank"), and shall retain such forms of
advice or receipt evidencing the deposit, if any,
as may be forwarded to the Bank by the Deposit
Bank. Such deposits shall be deemed Portfolio
Securities of the Fund and the responsibility of
the Bank therefore shall be the same as and no
greater than the Bank's responsibility in respect
of other Portfolio Securities of the Fund.
6.11. Transfer of Securities. The Bank
will transfer, exchange, deliver or release
Portfolio Securities held by it hereunder, insofar
as such Securities are available for such purpose,
provided that before making any transfer,
exchange, delivery or release under this Section
the Bank will receive Proper Instructions
requesting such transfer, exchange or delivery
stating that it is for a purpose permitted under
the terms of this Section 6.11, specifying the
applicable subsection, or describing the purpose
of the transaction with sufficient particularity
to permit the Bank to ascertain the applicable
subsection, only:
(a) upon sales of Portfolio Securities
for the account of the Fund, against
contemporaneous receipt by the Bank of payment
therefor in full or, for transactions outside
the U.S., against payment to the Bank in
accordance with generally accepted settlement
practices and customs in the jurisdiction or
market in which the transaction occurs, each
such payment to be in the amount of the sale
price shown in a broker's confirmation of sale
of the Portfolio Securities received by the
Bank before such transfer is made, as confirmed
in the Proper Instructions received by the Bank
before such transfer is made;
(b) in exchange for or upon conversion
into other securities alone or other securities
and cash pursuant to any plan of merger,
consolidation, reorganization, share split-up,
change in par value, recapitalization or
readjustment or otherwise, upon exercise of
subscription, purchase or sale or other similar
rights represented by such Portfolio
Securities, or for the purpose of tendering
shares in the event of a tender offer therefor,
provided however that in the event of an offer
of exchange, tender offer, or other exercise of
rights requiring the physical tender or
delivery of Portfolio Securities, the Bank
shall have no liability for failure to so
tender in a timely manner unless such Proper
Instructions are received by the Bank at least
two business days prior to the date required
for tender, and unless the Bank (or its agent
or subcustodian hereunder) has actual
possession of such Security at least two
business days prior to the date of tender;
(c) upon conversion of Portfolio
Securities pursuant to their terms into other
securities;
(d) for the purpose of redeeming in kind
shares of the Fund upon authorization from the
Fund;
(e) in the case of option contracts owned
by the Fund, for presentation to the endorsing
broker;
(f) when such Portfolio Securities are
called, redeemed or retired or otherwise become
payable;
(g) for the purpose of effectuating the
pledge of Portfolio Securities held by the Bank
in order to collateralize loans made to the
Fund by any bank, including the Bank; provided,
however, that such Portfolio Securities will be
released only upon payment to the Bank for the
account of the Fund of the moneys borrowed,
except that in cases where additional
collateral is required to secure a borrowing
already made, and such fact is made to appear
in the Proper Instructions, further Portfolio
Securities may be released for that purpose
without any such payment. In the event that
any such pledged Portfolio Securities are held
by the Bank, they will be so held for the
account of the lender, and after notice to the
Fund from the lender in accordance with the
normal procedures of the lender, that an event
of deficiency or default on the loan has
occurred, the Bank may deliver such pledged
Portfolio Securities to or for the account of
the lender;
(h) for the purpose of releasing
certificates representing Portfolio Securities,
against contemporaneous receipt by the Bank of
the fair market value of such security, as set
forth in Proper Instructions received by the
Bank before such payment is made;
(i) for the purpose of delivering
securities lent by the Fund to a bank or broker
dealer, but only against receipt in accordance
with street delivery custom except as otherwise
provided herein, of adequate collateral as
agreed upon from time to time by the Fund and
the Bank, and upon receipt of payment in
connection with any repurchase agreement
relating to such securities entered into by the
Fund;
(j) upon sales of Portfolio Securities
for the account of the Fund, to the broker or
its clearing agent, against a receipt, for
examination in accordance with "street
delivery" custom; provided that in any such
case, the Bank shall have no responsibility or
liability for any loss arising from the
delivery of such securities prior to receiving
payment for such securities except as may arise
from the Bank's own negligence or willful
misconduct;
(k) for other authorized transactions of
the Fund or for other proper corporate
purposes; provided that before making such
transfer, the Bank will also receive a
certified copy of resolutions of the Board,
signed by an authorized officer of the Fund
(other than the officer certifying such
resolution) and certified by its Secretary or
Assistant Secretary, specifying the Portfolio
Securities to be delivered, setting forth the
transaction in or purpose for which such
delivery is to be made, declaring such
transaction to be an authorized transaction of
the Fund or such purpose to be a proper
corporate purpose, and naming the person or
persons to whom delivery of such securities
shall be made; and
(l) upon termination of this Agreement as
hereinafter set forth pursuant to Section 8 and
Section 16 of this Agreement.
As to any deliveries made by the Bank pursuant to
subsections (a), (b), (c), (e), (f), (g), (h) and (i)
securities or cash receivable in exchange therefor
shall be delivered to the Bank.
7. Redemptions. In the case of payment of
assets of the Fund held by the Bank in connection with
redemptions and repurchases by the Fund of outstanding
beneficial interests, the Bank will rely on
notification by the Fund's transfer agent of receipt of
a request for redemption and certificates, if issued,
in proper form for redemption before such payment is
made. Payment shall be made in accordance with the
Declaration of Trust and By-laws of the Fund, from
assets available for said purpose.
8. Merger, Dissolution, etc. of Fund. In the
case of the following transactions, not in the ordinary
course of business, namely, the merger of the Fund into
or the consolidation of the Fund with another
investment company, the sale by the Fund of all, or
substantially all, of its assets to another investment
company, or the liquidation or dissolution of the Fund
and distribution of its assets, the Bank will deliver
the Portfolio Securities held by it under this
Agreement and disburse cash only upon the order of the
Fund set forth in an Officers' Certificate, accompanied
by a certified copy of a resolution of the Board
authorizing any of the foregoing transactions. Upon
completion of such delivery and disbursement and the
payment of the fees, disbursements and expenses of the
Bank, this Agreement will terminate.
9. Actions of Bank Without Prior Authorization.
Notwithstanding anything herein to the contrary, unless
and until the Bank receives an Officers' Certificate to
the contrary, it will without prior authorization or
instruction of the Fund or the transfer agent:
9.1 Endorse for collection and collect on
behalf of and in the name of the Fund all checks,
drafts, or other negotiable or transferable
instruments or other orders for the payment of
money received by it for the account of the Fund
and hold for the account of the Fund all income,
dividends, interest and other payments or
distribution of cash with respect to the Portfolio
Securities held thereunder;
9.2 Present for payment all coupons and
other income items held by it for the account of
the Fund which call for payment upon presentation
and hold the cash received by it upon such payment
for the account of the Fund;
9.3 Receive and hold for the account of the
Fund all securities received as a distribution on
Portfolio Securities as a result of a stock
dividend, share split-up, reorganization,
recapitalization, merger, consolidation,
readjustment, distribution of rights and similar
securities issued with respect to any Portfolio
Securities held by it hereunder;
9.4 Execute as agent on behalf of the Fund
all necessary ownership and other certificates and
affidavits required by the Internal Revenue Code
or the regulations of the Treasury Department
issued thereunder, or by the laws of any state,
now or hereafter in effect, inserting the Fund's
name on such certificates as the owner of the
securities covered thereby, to the extent it may
lawfully do so and as may be required to obtain
payment in respect thereof. The Bank will execute
and deliver such certificates in connection with
Portfolio Securities delivered to it or by it
under this Agreement as may be required under the
provisions of the Internal Revenue Code and any
Regulations of the Treasury Department issued
thereunder, or under the laws of any state;
9.5 Present for payment all Portfolio
Securities which are called, redeemed, retired or
otherwise become payable, and hold cash received
by it upon payment for the account of the Fund;
and
9.6 Exchange interim receipts or temporary
securities for definitive securities.
10. Collection; Defaults. The Bank will use all
reasonable efforts to collect any funds which may to
its knowledge become collectible arising from Portfolio
Securities, including dividends, interest and other
income, and to transmit promptly to the Fund any notice
actually received by it of any call for redemption,
offer of exchange, right of subscription,
reorganization or other proceedings affecting such
Securities.
If Portfolio Securities upon which such income is
payable are in default or payment is refused after due
demand or presentation, the Bank will notify the Fund
in writing of any default or refusal to pay within two
business days from the day on which it receives
knowledge of such default or refusal. In addition, the
Bank will send the Fund a written report once each
month showing any income on any Portfolio Security held
by it which is more than ten days overdue on the date
of such report and which has not previously been
reported.
11. Maintenance of Records. The Bank will
maintain records with respect to transactions for which
the Bank is responsible pursuant to the terms and
conditions of this Agreement, and in compliance with
the applicable rules and regulations of the Act and
applicable federal and state tax laws, and will furnish
the Fund daily with a statement of condition of the
Fund. The Bank will furnish to the Fund at the end of
every month, and at the close of each quarter of the
Fund's fiscal year, a list of the Portfolio Securities
and the aggregate amount of cash held by it for the
Fund. The books and records of the Bank pertaining to
its actions under this Agreement and reports by the
Bank or its independent accountants concerning its
accounting system, procedures for safeguarding
securities and internal accounting controls will be
open to inspection and audit at reasonable times by
officers of or auditors employed by the Fund and will
be preserved by the Bank in the manner and in
accordance with the applicable rules and regulations
under the Act.
12. Opinion of Fund's Independent Accountant.
The Bank shall take all reasonable action, as the Fund
may from time to time request, to obtain from year to
year favorable opinions from the Fund's independent
accountants with respect to its activities hereunder in
connection with the preparation of the Fund's Form N-
1A, and Form N-SAR or other annual reports to the
Securities and Exchange Commission and with respect to
any other requirements of such Commission.
13. Reports to Fund by Independent Accountants.
The Bank shall provide the Fund, at such times as the
Fund may reasonably require, with reports by
independent public accountants on the accounting
system, internal accounting control and procedures for
safeguarding Securities, including Securities deposited
and/or maintained in the Book-Entry System or the
Depository, relating to the services provided by the
Bank under this Agreement; such reports, shall be of
sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide
reasonable assurance that any material inadequacies
would be disclosed by such examination, and, if there
are no such inadequacies, the reports shall so state.
14. [RESERVED]
15. Concerning the Bank.
15.1 Performance of Duties; Standard of Care.
In performing its duties hereunder and any other
duties listed on any Schedule hereto, if any, the
Bank will be entitled to receive and act upon the
advice of independent counsel of its own
selection, which may be counsel for the Fund, and
will be without liability for any action taken or
thing done or omitted to be done in accordance
with this Agreement in good faith in conformity
with such advice. In the performance of its
duties hereunder, the Bank will be protected and
not be liable, and will be indemnified and saved
harmless for any action taken or omitted to be
taken by it in good faith reliance upon the terms
of this Agreement, any Officers' Certificate,
Proper Instructions, resolution of the Board,
telegram, notice, request, certificate or other
instrument reasonably believed by the Bank to be
genuine and for any other loss to the Fund except
such as may arise from its or its nominee's own
negligent action, negligent failure to act, or
willful misconduct.
The Bank will be under no duty or obligation to
inquire into and will not be liable for:
(a) the validity of the issue of any
Portfolio Securities purchased by or for the
Fund, the legality of the purchases thereof or
the propriety of the price incurred therefor;
(b) the legality of any sale of any
Portfolio Securities by or for the Fund or the
propriety of the amount for which the same are
sold;
(c) the legality of an issue or sale of
any beneficial interests in the Fund or the
sufficiency of the amount to be received
therefor;
(d) the legality of the repurchase of any
beneficial interests in the Fund or the
propriety of the amount to be paid therefor;
(e) the legality of the declaration of
any dividend by the Fund or the legality of the
distribution of any Portfolio Securities as
payment in kind of such dividend; or
(f) any property or moneys of the Fund
unless and until received by it, and any such
property or moneys delivered or paid by it
pursuant to the terms hereof.
Moreover, the Bank will not be under any duty
or obligation to ascertain whether any Portfolio
Securities at any time delivered to or held by it
for the account of the Fund are such as may
properly be held by the Fund under the provisions
of its Declaration of Trust, By-laws, any federal
or state statutes or any rule or regulation of any
governmental agency.
Notwithstanding anything in this Agreement to
the contrary, in no event shall the Bank be liable
hereunder or to any third party for any losses or
damages of any kind resulting from acts of God,
earthquakes, fires, floods, storms or other
disturbances of nature, epidemics, strikes, riots,
nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism,
insurrection, nuclear fusion, fission or
radiation, the interruption, loss or malfunction
of utilities, transportation, or computers
(hardware or software) and computers facilities,
the unavailability of energy sources and other
similar happenings or events except as results
from the Bank's own negligence.
15.2 Agents and Subcustodians. The Bank may
employ agents in the performance of its duties
hereunder and shall be responsible for the acts
and omissions of such agents as if performed by
the Bank hereunder.
Upon receipt of Proper Instructions, the Bank
may employ subcustodians, provided that any such
subcustodian meets at least the minimum
qualifications required by Section 17(f) of the
Act to act as a custodian of the Fund's assets,
and provided further that the Bank shall have no
more or less responsibility to the Fund on account
of any actions or omissions of any subcustodian so
employed than any such subcustodian has to the
Bank. Each agreement pursuant to which the Bank
employs a subcustodian shall require, unless
otherwise agreed by the Fund, the subcustodian to
exercise reasonable care in the performance of its
duties and to indemnify, and hold harmless, the
Bank and the Fund from and against any loss,
damage, cost, expense, liability or claim arising
out of or in connection with the subcustodian's
performance of such obligations. At the election
of the Fund, it shall be entitled to be subrogated
to the rights of the Bank with respect to any
claims against a subcustodian as a consequence of
any such loss, damage, cost, expense, liability or
claim if and to the extent that the Fund has not
been made whole for any such loss, damage, cost,
expense, liability or claim.
The Fund shall pay all fees and expenses of
any subcustodian.
15.3 Insurance. The Bank shall use the same
care with respect to the safekeeping of Portfolio
Securities and cash of the Fund held by it as it
uses in respect of its own similar property but it
need not maintain any special insurance for the
benefit of the Fund.
15.4 Fees and Expenses of Bank. The Fund
will pay or reimburse the Bank from time to time
for any transfer taxes payable upon transfer of
Portfolio Securities made hereunder, and for all
necessary proper disbursements, expenses and
charges made or incurred by the Bank in the
performance of this Agreement (including any
duties listed on any Schedule hereto, if any)
including any indemnities for any loss,
liabilities or expense to the Bank as provided
above. For the services rendered by the Bank
hereunder, the Fund will pay to the Bank such
compensation or fees at such rate and at such
times as shall be agreed upon in writing by the
parties from time to time. The Bank will also be
entitled to reimbursement by the Fund for all
reasonable expenses incurred in conjunction with
termination of this Agreement by the Fund.
15.5 Advances by Bank. The Bank may, in its
sole discretion, advance funds on behalf of the
Fund to make any payment permitted by this
Agreement upon receipt of any proper authorization
required by this Agreement for such payments by
the Fund. Should such a payment or payments, with
advanced funds, result in an overdraft (due to
insufficiencies of the Fund's account with the
Bank, or for any other reason) this Agreement
deems any such overdraft or related indebtedness,
a loan made by the Bank to the Fund payable on
demand and bearing interest at the current rate
charged by the Bank for such loans unless the Fund
shall provide the Bank with agreed upon
compensating balances. The Fund agrees that the
Bank shall have a continuing lien and security
interest to the extent of any overdraft or
indebtedness, in and to any property at any time
held by it for the Fund's benefit or in which the
Fund has an interest and which is then in the
Bank's possession or control (or in the possession
or control of any third party acting on the Bank's
behalf), in an amount not to exceed 5% of the
Fund's gross assets. The Fund authorizes the
Bank, in its sole discretion, at any time to
charge any overdraft of indebtedness, together
with interest due thereon against any balance of
account standing to the credit of the Fund on the
Bank's books.
16. Termination.
16.1 This Agreement may be terminated at any
time without penalty upon thirty days written
notice delivered by either party to the other by
means of registered mail, and upon the expiration
of such thirty days this Agreement will terminate;
provided, however, that the Fund may immediately
terminate this Agreement in the event of the
appointment of a conservator or receiver for the
Bank or upon the happening of a like event at the
direction of an appropriate regulatory agency or
court of competent jurisdiction. The effective
date of such termination may be postponed upon
mutual agreement. At any time after the
termination of this Agreement, the Fund will, at
its request, have access to the records of the
Bank relating to the performance of its duties as
custodian.
16.2 In the event of the termination of this
Agreement, the Bank will immediately upon receipt
or transmittal, as the case may be, of notice of
termination, commence and prosecute diligently to
completion the transfer of all cash and the
delivery of all Portfolio Securities duly endorsed
and all records maintained under Section 11 to the
successor custodian when appointed by the Fund.
The obligation of the Bank to deliver and transfer
over the assets of the Fund held by it directly to
such successor custodian will commence as soon as
such successor is appointed and will continue
until completed as aforesaid. If the Fund does
not select a successor custodian within ninety
(90) days from the date of delivery of notice of
termination the Bank may, subject to the
provisions of subsection 16.3, deliver the
Portfolio Securities and cash of the Fund held by
the Bank to a bank or trust company of its own
selection which meets the requirements of Section
17(f)(1) of the Act and has a reported capital,
surplus and undivided profits aggregating not less
than $2,000,000, to be held as the property of the
Fund under terms similar to those on which they
were held by the Bank, whereupon such bank or
trust company so selected by the Bank will become
the successor custodian of such assets of the Fund
with the same effect as though selected by the
Board.
16.3 Prior to the expiration of ninety (90)
days after notice of termination has been given,
the Fund may furnish the Bank with an order of the
Fund advising that a successor custodian cannot be
found willing and able to act upon reasonable and
customary terms and that there has been submitted
to the investors of the Fund the question of
whether the Fund will be liquidated or will
function without a custodian for the assets of the
Fund held by the Bank. In that event the Bank
will deliver the Portfolio Securities and cash of
the Fund held by it, subject as aforesaid, in
accordance with one of such alternatives which may
be approved by the requisite vote of investors,
upon receipt by the Bank of a copy of the minutes
of the meeting of investors at which action was
taken, certified by the Fund's Secretary and an
opinion of counsel to the Fund in form and content
satisfactory to the Bank.
17. Notices. Any notice or other instrument in
writing authorized or required by this Agreement to be
given to either party hereto will be sufficiently given
if addressed to such party and mailed or delivered to
it at its office at the address set forth below;
namely:
(a) In the case of notices sent to the Fund to:
Landmark International Equity Fund
c/o Signature Financial Services, Inc.
6 St. James Avenue
Boston, Massachusetts 02116
(b) In the case of notices sent to the Bank to:
Investors Bank & Trust Company
One Lincoln Plaza
P.O. Box 1537
Boston, Massachusetts 02205-1537
or at such other place as such party may from time
to time designate in writing.
18. Amendments. This Agreement may not be
altered or amended, except by an instrument in writing,
executed by both parties, and in the case of the Fund,
such alteration or amendment will be authorized and
approved by its Board.
19. Parties. This Agreement will be binding upon
and shall inure to the benefit of the parties hereto
and their respective successors and assigns; provided,
however, that this Agreement will not be assignable by
the Fund without the written consent of the Bank or by
the Bank without the written consent of the Fund,
authorized and approved by its Board; and provided
further that termination proceedings pursuant to
Section 16 hereof will not be deemed to be an
assignment within the meaning of this provision.
20. Governing Law. This Agreement and all
performances hereunder will be governed by the laws of
the Commonwealth of Massachusetts.
21. Limitations of Liability. A copy of the
Declaration of Trust of Landmark International Equity
Fund is on file with the Secretary of Landmark
International Equity Fund, and notice is hereby given
that this instrument is executed on behalf of the
Trustees of Landmark International Equity Fund as
Trustees and not individually and that the obligations
of this instrument are not binding upon any of the
Trustees or Officers of Landmark International Equity
Fund individually or upon the assets, property or
holders of interests of any series of Landmark
International Equity Fund other than Landmark Emerging
Asian Markets Equity Fund.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed in duplicate and their
respective corporate seals to be affixed hereto as of
the date first above written by their respective
officers thereto duly authorized.
LANDMARK INTERNATIONAL EQUITY
FUND, on behalf of
Landmark Emerging Asian
Markets Equity Fund
By:
ATTEST:
INVESTORS BANK & TRUST COMPANY
By:
Kevin J. Sheehan, President
ATTEST:
