<PAGE> 1
As filed with the Securities and Exchange Commission on December 18, 1996
File Nos. 33-49554
811-6740
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE
AMENDMENT NO. 8+
AND
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 14
LANDMARK INSTITUTIONAL TRUST
(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 LLP,
150 FEDERAL STREET,
BOSTON, MASSACHUSETTS 02110
It is proposed that this filing will become effective on January 2, 1997
pursuant to paragraph (b) of Rule 485.
Cash Reserves Portfolio, U.S. Treasury Reserves Portfolio and Tax Free
Reserves Portfolio have executed this Registration Statement.
Pursuant to Rule 24f-2, Registrant has registered an indefinite number of
its Shares of Beneficial Interest ($0.00001 par value) under
the Securities Act of 1933 and has filed a Rule 24f-2 Notice on October 17,
1996 for Registrant's fiscal year ended August 31, 1996.
CALCULATION OF REGISTRATION FEE - INSTITUTIONAL LIQUID RESERVES
<TABLE>
<CAPTION>
===============================================================================================================
AMOUNT OF SHARES
BEING REGISTERED PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES UNDER OFFERING PRICE AGGREGATE AMOUNT OF
BEING REGISTERED RULE 24E-2 PER SHARE* OFFERING PRICE** REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Beneficial
Interest $0.00001
par value per
share................ 223,293,517.57 $1.00 $330,000 $100
===============================================================================================================
</TABLE>
* Pursuant to Rule 457(c), this was the maximum offering price per share of
the Registrant's shares at the close of business on December 16, 1996.
** Computed under 17 CFR 270.24e; 15,181,288,932.02 shares were redeemed or
repurchased during the fiscal year ended August 31, 1996;
14,958,325,414.45 of which are being used for reductions in previous
filings during the current year under Rule 24f-2 and 222,963,517.57 of
which are being used for reduction in this Post-Effective Amendment No. 8.
+ Pursuant to Rule 429 under the Securities Act of 1933, this Post-Effective
Amendment also serves as Post-Effective Amendment No. 8 to Registrant's
Registration Statement under the Securities Act of 1933 at File No.
33-49552.
<PAGE> 2
LANDMARK INSTITUTIONAL TRUST
(LANDMARK INSTITUTIONAL LIQUID RESERVES, LANDMARK INSTITUTIONAL U.S. TREASURY
RESERVES AND LANDMARK INSTITUTIONAL TAX FREE RESERVES)
REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A
----
ITEM NO. N-1A ITEM LOCATION
--------- --------- --------
PART A PROSPECTUS
------ ----------
<S> <C> <C>
Item 1. Cover Page............................................. Cover Page
Item 2. Synopsis............................................... Expense Summary
Item 3. Condensed Financial Information........................ Condensed Financial Information
Item 4. General Description of Registrant...................... Investment Information; General
Information; Appendix
Item 5. Management of the Fund................................. Management; Expenses
Item 5A. Management's Discussion of Fund Performance............ Not Applicable
Item 6. Capital Stock and Other Securities..................... General Information; Voting and Other
Rights; Purchases; Exchanges;
Redemptions; Net Income and
Distributions; Tax Matters
Item 7. Purchase of Securities Being Offered................... Purchases; Exchanges; Redemptions
Item 8. Redemption or Repurchase............................... Purchases; Exchanges; Redemptions
Item 9. Pending Legal Proceedings.............................. Not Applicable
STATEMENT OF
ADDITIONAL
PART B INFORMATION
------ -----------
Item 10. Cover Page............................................. Cover Page
Item 11. Table of Contents...................................... Cover Page
Item 12. General Information and History........................ The Funds
Item 13. Investment Objectives and Policies..................... Investment Objectives, Policies and
Restrictions
Item 14. Management of the Fund................................. Management
Item 15. Control Persons and Principal Holders of Securities.... Management
Item 16. Investment Advisory and Other Services................. Management
Item 17. Brokerage Allocation and Other Practices............... Portfolio Transactions
Item 18. Capital Stock and Other Securities..................... Description of Shares, Voting Rights
and Liabilities
Item 19. Purchase, Redemption and Pricing of Securities
Being Offered.......................................... Description of Shares, Voting Rights
and Liabilities; Determination of Net
Asset Value
Item 20. Tax Status............................................. Certain Additional Tax Matters
Item 21. Underwriters........................................... Management
Item 22. Calculation of Performance Data........................ Performance Information
Item 23. Financial Statements................................... Independent Accountants and Financial
Statements
</TABLE>
<PAGE> 3
PART C Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration
Statement.
<PAGE> 4
------------------------------
- --------------------------------------------------------------------------------
------------------------------
PROSPECTUS
January 2, 1997
LANDMARK INSTITUTIONAL LIQUID RESERVES
LANDMARK INSTITUTIONAL U.S. TREASURY RESERVES
LANDMARK INSTITUTIONAL TAX FREE RESERVES
(Members of the Landmark(SM)Family of Funds)
This Prospectus describes three money market mutual funds in the Landmark
Family of Funds: Landmark Institutional Liquid Reserves, Landmark Institutional
U.S. Treasury Reserves and Landmark Institutional Tax Free Reserves. Each Fund
has its own investment objectives and policies. Shares of the Funds are sold
primarily to institutional investors. Citibank, N.A. is the investment adviser.
- ------------------------------------------------------
UNLIKE OTHER MUTUAL FUNDS WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN
PORTFOLIOS OF SECURITIES, EACH FUND SEEKS ITS INVESTMENT OBJECTIVES BY INVESTING
ALL OF ITS INVESTABLE ASSETS IN A PORTFOLIO WITH THE SAME INVESTMENT OBJECTIVES
AND POLICIES. SEE "SPECIAL INFORMATION CONCERNING INVESTMENT STRUCTURE" ON PAGE
8.
- ------------------------------------------------------
REMEMBER THAT SHARES OF THE FUNDS:
M ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY
M ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, CITIBANK OR
ANY OF ITS AFFILIATES
M ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL
AMOUNT INVESTED
- ------------------------------------------------------
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. EACH FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE; HOWEVER, THERE CAN BE NO ASSURANCE THAT ANY FUND WILL BE ABLE TO DO SO.
This Prospectus concisely sets forth information about the Funds that a
prospective investor should know before investing. A Statement of Additional
Information dated January 2, 1997 (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 Funds may be made, by contacting the investor's
shareholder servicing agent (see inside back cover for address and phone
number).
----------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Prospectus Summary.................. 2
Expense Summary..................... 3
Condensed Financial Information..... 4
Investment Information.............. 6
Risk Considerations................. 7
Valuation of Shares................. 9
Purchases........................... 9
Exchanges........................... 10
Redemptions......................... 10
Net Income and Distributions........ 11
Management.......................... 11
Tax Matters......................... 14
Performance Information............. 14
General Information................. 15
Appendix A -- Permitted Investments
and
Investment Practices... 16
Appendix B -- Ratings of Municipal
Obligations........... 18
Appendix C -- Taxable Equivalent
Yield Table........... 22
</TABLE>
- --------------------------------------------------------------------------------
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.
INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.
<PAGE> 5
- ------------------------------------------------------
------------------------------------------------------
PROSPECTUS SUMMARY
See the body of the Prospectus for more information on the topics
discussed in this summary.
THE FUNDS: This Prospectus describes three money market mutual funds: Landmark
Institutional Liquid Reserves, Landmark Institutional U.S. Treasury Reserves and
Landmark Institutional Tax Free Reserves. Each Fund has its own investment
objectives and policies. Each Fund seeks its objectives by investing its
investable assets in a Portfolio having the same investment objectives and
policies as that Fund. There can be no assurance that any Fund will achieve its
objectives.
INVESTMENT OBJECTIVES AND POLICIES:
INSTITUTIONAL LIQUID RESERVES. To provide its shareholders with liquidity and as
high a level of current income as is consistent with the preservation of
capital. Through Cash Reserves Portfolio, the Fund invests in U.S.
dollar-denominated money market obligations with maturities of 397 days or less
issued by U.S. and non-U.S. issuers.
INSTITUTIONAL U.S. TREASURY RESERVES. To provide its shareholders with liquidity
and as high a level of current income from U.S. Government obligations as is
consistent with the preservation of capital. Through U.S. Treasury Reserves
Portfolio, the Fund invests in obligations issued by the U.S. Government with
maturities of 397 days or less.
INSTITUTIONAL TAX FREE RESERVES. To provide its shareholders with high levels of
current income exempt from federal income taxes, preservation of capital and
liquidity. Through Tax Free Reserves Portfolio, the Fund invests primarily in
short-term, high quality obligations issued by state and municipal governments
and by other qualifying issuers, the interest on which is exempt from federal
income taxes ("Municipal Obligations"). The Fund is a tax-exempt money market
mutual fund.
INVESTMENT ADVISER AND DISTRIBUTOR: Citibank, N.A. ("Citibank" or the
"Adviser"), a wholly-owned subsidiary of Citicorp, is the investment adviser of
each Portfolio. Citibank and its affiliates manage more than $83 billion in
assets worldwide. The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS" or
the "Distributor") is the distributor of shares of each Fund. See "Management."
PURCHASES AND REDEMPTIONS: Customers of Shareholder Servicing Agents may
purchase and redeem shares of the Funds on any Business Day. See "Purchases" and
"Redemptions."
PRICING: Shares of the Funds are purchased and redeemed at net asset value
(normally $1.00 per share), without a sales load or redemption fees. While there
are no sales loads, shares of each Fund are subject to a distribution fee.
EXCHANGES: Shares may be exchanged for shares of most other Landmark Funds. See
"Exchanges."
DIVIDENDS: Declared daily and distributed monthly. Shares begin accruing
dividends on the day they are purchased. See "Net Income and Distributions."
REINVESTMENT: Dividends may be received either in cash or in Fund shares at net
asset value, subject to the policies of a shareholder's Shareholder Servicing
Agent. See "Net Income and Distributions."
WHO SHOULD INVEST: Each Fund is designed for investors seeking liquidity,
preservation of capital and current income, and for whom growth of capital is
not a consideration. Institutional Liquid Reserves is designed for investors
seeking a convenient means of accumulating an interest in a professionally
managed, diversified portfolio consisting of short-term, U.S. dollar-denominated
money market obligations issued by U.S. and non-U.S. issuers. Institutional U.S.
Treasury Reserves is designed for investors seeking a convenient means of
accumulating an interest in a professionally managed, diversified portfolio
consisting of short-term U.S. Government obligations. Institutional Tax Free
Reserves is designed for investors seeking income which is exempt from federal
income taxes. See "Investment Information."
RISK FACTORS: There can be no assurance that any Fund or its corresponding
Portfolio will achieve its investment objectives. In addition, while each Fund
intends to maintain a stable net asset value of $1.00 per share, there can be no
assurance that any Fund will be able to do so. Investments in high quality,
short-term instruments may, in many circumstances, result in a lower yield than
would be available from investments with a lower quality or a longer term.
Investors in Institutional Liquid Reserves 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. In addition, the prices of securities of
non-U.S. issuers may be more volatile than those of comparable U.S. issuers.
Institutional Tax Free Reserves is a non-diversified mutual fund, which
means that it is not subject to any statutory restrictions under the Investment
Company Act of 1940 limiting the investment of its assets in one or relatively
few issuers. The Fund may therefore invest a relatively high percentage of its
assets in the obligations of a limited number of issuers. Also, the Fund may
invest 25% or more of its assets in securities of issuers in similar or related
industries or issuers located in the same state. As a result, the Fund is more
susceptible to any single economic, political or regulatory occurrence.
Certain investment practices also may entail special risks. Prospective
investors should read "Risk Considerations" for more information about risk
factors.
---
---
2
<PAGE> 6
- ------------------------------------------------------
------------------------------------------------------
EXPENSE SUMMARY
The following table summarizes estimated shareholder transaction and annual
operating expenses for each Fund and for its corresponding Portfolio.* For more
information on costs and expenses, see "Management" and "General Information --
Expenses."
<TABLE>
<CAPTION>
----
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
LIQUID U.S. TREASURY TAX FREE
RESERVES RESERVES RESERVES(1)
------------------------------------------------------------------------------------------------------------
<S> <C> <S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES................................. None None None
ANNUAL FUND OPERATING EXPENSES, AFTER FEE WAIVERS AND
REIMBURSEMENTS
(AS A PERCENTAGE OF AVERAGE NET ASSETS):
12b-1 Fees(2)(3)................................................. .00% .00% .00%
Investment Management Fee(2)..................................... .06% .05% .10%
Administrative Services Fees(2).................................. .09% .05% .05%
Shareholder Servicing Agent Fees(2).............................. .00% .00% .00%
Other Operating Expenses......................................... .05% .15% .10%
--- --- ---
Total Fund Operating Expenses(2)................................. .20% .25% .25%
=================== =================== ===================
</TABLE>
* This table is intended to assist investors in understanding the various costs
and expenses that a shareholder of a Fund will bear, either directly or
indirectly. The table shows the fees paid to various service providers after
giving effect to expected voluntary partial fee waivers. There can be no
assurance that the fee waivers and reimbursements reflected in the table will
continue at their present levels.
(1) Because this Fund is newly organized, all amounts in the table and the
example are estimated for the current fiscal year.
(2) Absent fee waivers and reimbursements, investment management fees, 12b-1
fees, administrative services fees, shareholder servicing agent fees and
total fund operating expenses would be .15%, .10%, .40%, .10% and .80% for
Institutional Liquid Reserves, .15%, .10%, .40%, .10% and .90% for
Institutional U.S. Treasury Reserves and .20%, .10%, .40%, .10% and .90% for
Institutional Tax Free Reserves.
(3) Fees under the 12b-1 distribution plan are asset-based sales charges.
Long-term shareholders in a 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.
EXAMPLE: A shareholder would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and redemption at the end of each period indicated
below:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
- ------------------------------------------------------------------------------------------------------------
INSTITUTIONAL LIQUID RESERVES................................. $2 $6 $11 $26
INSTITUTIONAL U.S. TREASURY RESERVES.......................... $3 $8 $14 $32
INSTITUTIONAL TAX FREE RESERVES(1)............................ $3 $8 $14 $32
</TABLE>
The Example assumes that all dividends are reinvested, and except as noted
expenses are based on each Fund's fiscal year ended August 31, 1996, after
waivers and reimbursements. If waivers and reimbursements were not in place, the
amounts in the Example would be $8, $26, $44, and $99 for Institutional Liquid
Reserves, $9, $28, $48, and $107 for Institutional U.S. Treasury Reserves and
$11, $33, $57, and $127 for Institutional Tax Free Reserves. 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 any Fund's future performance. THE
EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OF
ANY FUND. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
---
---
3
<PAGE> 7
- ------------------------------------------------------
------------------------------------------------------
CONDENSED FINANCIAL INFORMATION
The following tables provide condensed financial information about Institutional
Liquid Reserves and Institutional U.S. Treasury Reserves for the periods
indicated. This information should be read in conjunction with the financial
statements appearing in each Fund's Annual Report to Shareholders, which are
incorporated by reference in the Statement of Additional Information. The
financial statements and notes, as well as the tables below, covering periods
through August 31, 1996 have been audited by Price Waterhouse LLP, independent
accountants, on behalf of Institutional Liquid Reserves, and by Deloitte &
Touche LLP, independent accountants, on behalf of Institutional U.S. Treasury
Reserves. The accountants' reports are included in the applicable Fund's Annual
Report. Copies of the Annual Reports may be obtained without charge from an
investor's Shareholder Servicing Agent (see inside of back cover for address and
phone number). Institutional Tax Free Reserves is newly organized and has not
yet issued financial statements.
<TABLE>
<CAPTION>
-------------------------------------------------------------
<S> <C> <C> <C> <C>
LANDMARK INSTITUTIONAL LIQUID RESERVES
FINANCIAL HIGHLIGHTS
YEAR ENDED AUGUST 31,
<CAPTION>
1996 1995 1994 1993*
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period...... $1.00000 $1.00000 $1.00000 $1.00000
Net Investment Income..................... 0.05521 0.05698 0.03603 0.02871
Less dividends from net investment
income................................... (0.05521) (0.05698) (0.03603) (0.02871)
------ ------- ------- -------
Net Asset Value, end of period............ $1.00000 $1.00000 $1.00000 $1.00000
------ ------- ------- -------
------ ------- ------- -------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's
omitted)................................. $1,257,134 $1,480,097 $470,041 $83,519
Ratio of expenses to average net
assets**................................. 0.20% 0.17% 0.23% 0.23%+
Ratio of net investment income to average
net assets............................... 5.52% 5.70% 3.62% 3.13%+
Total return.............................. 5.66% 5.85% 3.66% 3.21%
</TABLE>
Note: If agents of the Fund and agents of Cash Reserves Portfolio had not waived
all or a portion of their fees during the periods indicated, the net investment
income per share and the ratios would have been as follows:
<TABLE>
<S> <C> <C> <C> <C>
Net investment income per share........... $0.04921 $0.0505 $0.03094 $0.02339
RATIOS:
Expenses to average net assets**.......... 0.80% 0.84% 0.86% 0.81%+
Net investment income to average net
assets................................... 4.92% 5.03% 2.98% 2.55%+
</TABLE>
* For the period from the start of business, October 2, 1992, to August 31,
1993.
** Includes the Fund's share of Cash Reserves Portfolio's allocated expenses.
+ Annualized.
---
---
4
<PAGE> 8
<TABLE>
<CAPTION>
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LANDMARK INSTITUTIONAL U.S. TREASURY RESERVES
FINANCIAL HIGHLIGHTS
<CAPTION>
YEAR ENDED AUGUST 31, EIGHT MONTHS
--------------------------- ENDED YEAR ENDED
1996 1995 1994 AUGUST 31, 1993** DECEMBER 31, 1992***
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Net Asset Value, beginning of period.... $1.00000 $1.00000 $1.00000 $1.00000 $1.00000
Net Investment Income................... 0.05051 0.05200 0.03312 0.01974 0.00736
Less dividends from net investment
income................................. (0.05051 ) (0.05200 ) (0.03312 ) (0.01974) (0.00736)
------ ------ ------ --------- -----------
Net Asset Value, end of period.......... $1.00000 $1.00000 $1.00000 $1.00000 $1.00000
------ ------ ------ --------- -----------
------ ------ ------ --------- -----------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's
omitted)............................... $213,395 $120,731 $150,911 $48,475 $13,594
Ratio of expenses to average net
assets*................................ 0.25% 0.25% 0.23% 0.20%+ 0.20%+
Ratio of net investment income to
average net assets..................... 5.03% 5.23% 3.40% 2.99%+ 3.20%+
Total return............................ 5.17% 5.33% 3.36% 3.01%+ 3.19%+
</TABLE>
Note: If agents of the Fund and agents of U.S. Treasury Reserves Portfolio had
not waived all or a portion of their fees during the periods indicated, the net
investment income per share and the ratios would have been as follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
Net investment income per share......... $0.04428 $0.04593 $0.02679 $0.01208 $0.00359
RATIOS
Expenses to average net assets*......... 0.87% 0.85% 0.88% 1.36%+ 1.85%+
Net investment income to average net
assets................................. 4.41% 4.62% 2.75% 1.83%+ 1.56%+
</TABLE>
* Includes the Fund's share of U.S. Treasury Reserves Portfolio's allocated
expenses.
** On April 15, 1993, the Fund changed its fiscal year end from December 31 to
August 31.
*** For the period from the start of business, October 2, 1992, to December 31,
1992.
+ Annualized.
---
---
5
<PAGE> 9
- ------------------------------------------------------
------------------------------------------------------
INVESTMENT INFORMATION
INVESTMENT OBJECTIVES: The investment objective of INSTITUTIONAL LIQUID RESERVES
is to provide its shareholders with liquidity and as high a level of current
income as is consistent with the preservation of capital.
The investment objective of INSTITUTIONAL U.S. TREASURY RESERVES is to
provide its shareholders with liquidity and as high a level of current income
from U.S. Government obligations as is consistent with the preservation of
capital.
The investment objectives of INSTITUTIONAL TAX FREE RESERVES are to
provide its shareholders with high levels of current income exempt from federal
income taxes, preservation of capital and liquidity.
The investment objective of each Fund may be changed by its Trustees
without approval by that 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 any Fund will achieve its investment objective.
INVESTMENT POLICIES: INSTITUTIONAL LIQUID RESERVES seeks its objective by
investing all of its investable assets in Cash Reserves Portfolio. Cash Reserves
Portfolio seeks the same objective as the Fund by investing in high quality U.S.
dollar denominated money market instruments. These instruments include
short-term obligations of the U.S. Government and repurchase agreements covering
these obligations, bank obligations (such as certificates of deposit, bankers'
acceptances and fixed time deposits) of U.S. and non-U.S banks and obligations
issued or guaranteed by the governments of Western Europe, Scandinavia,
Australia, Japan and Canada. The U.S. Government obligations in which the
Portfolio invests include U.S. Treasury bills, notes and bonds, and instruments
issued by U.S. Government agencies or instrumentalities. Some obligations of
U.S. Government agencies and instrumentalities are supported by the "full faith
and credit" of the United States, others by the right of the issuer to borrow
from the U.S. Treasury and others only by the credit of the agency or
instrumentality. For more information regarding the Portfolio's permitted
investments and investment practices, see Appendix A -- Permitted Investments
and Investment Practices on page 16.
INSTITUTIONAL U.S. TREASURY RESERVES seeks its objective by investing all of
its investable assets in U.S. Treasury Reserves Portfolio. U.S. Treasury
Reserves Portfolio seeks the same objective as the Fund by investing in U.S.
Treasury bills, notes and bonds, and instruments issued by U.S. Government
agencies or instrumentalities, which are supported by the "full faith and
credit" of the United States. U.S. Treasury Reserves Portfolio will not enter
into repurchase agreements. For more information regarding the Portfolio's
permitted investments and investment practices, see Appendix A -- Permitted
Investments and Investment Practices on page 16. ALTHOUGH THE PORTFOLIO INVESTS
IN U.S. GOVERNMENT OBLIGATIONS, NEITHER AN INVESTMENT IN THE FUND NOR AN
INVESTMENT IN THE PORTFOLIO IS INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
INSTITUTIONAL TAX FREE RESERVES seeks its investment objectives by investing
all of its investable assets in Tax Free Reserves Portfolio. Tax Free Reserves
Portfolio seeks the same objectives as the Fund by investing primarily in
short-term, high quality fixed rate and variable rate obligations issued by or
on behalf of states and municipal governments and their authorities, agencies,
instrumentalities and political subdivisions and other qualifying issuers, the
interest on which is exempt from federal income taxes (these securities are
referred to as "Municipal Obligations"). As a fundamental policy, the Portfolio
invests at least 80% of its assets, under normal circumstances, in the following
types of Municipal Obligations and in participation interests in these
obligations issued by banks, insurance companies or other financial institutions
("Participation Interests"):
(1) Municipal bonds that at the date of purchase are rated Aa or better by
Moody's Investors Service, Inc. ("Moody's") or AA or better by
Standard & Poor's Rating Group ("S&P") or Fitch Investors Service,
Inc. ("Fitch"), or are unrated but are of comparable quality as
determined by the Adviser, on the basis of a credit evaluation of the
obligor, or of the bank issuing the Participation Interest or
guarantee of the bonds, or of any insurance issued in support of the
bonds or the Participation Interest;
---
---
6
<PAGE> 10
(2) Municipal notes that at the date of purchase are rated MIG 2/VMIG 2 or
better by Moody's, SP-2 or better by S&P or F-2 or better by Fitch, or
are unrated but are of comparable quality as determined by the
Adviser; and
(3) Municipal commercial paper that at the date of purchase is rated
Prime-2 or better by Moody's, A-2 or better by S&P or F-2 or better by
Fitch, or is unrated but is of comparable quality as determined by the
Adviser.
See Appendix A for an explanation of Municipal Obligations and Appendix B
for an explanation of ratings of Municipal Obligations. For a comparison of
yields on Municipal Obligations and taxable securities see Appendix C on page
22.
Although Tax Free Reserves Portfolio attempts to invest all of its assets
in Municipal Obligations, the Portfolio may invest up to 20% of its assets in
taxable securities (such as U.S. Government obligations or certificates of
deposit of domestic banks). Any taxable securities in which the Portfolio
invests are of comparable quality to the Municipal Obligations in which the
Portfolio invests.
In determining the tax status of interest on Municipal Obligations, the
Adviser relies on opinions of bond counsel who may be counsel to the issuer.
CERTAIN ADDITIONAL INVESTMENT POLICIES:
$1.00 NET ASSET VALUE. Each Fund employs specific investment policies and
procedures designed to maintain a constant net asset value of $1.00 per share.
There can be no assurance, however, that a constant net asset value will be
maintained on a continuing basis. See "Net Income and Distributions."
MATURITY AND QUALITY. All of the Portfolios' investments mature or are
deemed to mature within 397 days from the date of acquisition, and the average
maturity of the investments held by each Portfolio (on a dollar-weighted basis)
is 90 days or less. All of the Portfolios' investments are in high quality
securities which have been determined by the Adviser to present minimal credit
risks. To meet a Portfolio's high quality standards a security must be rated in
the highest rating category (one of the two highest rating categories for Tax
Free Reserves Portfolio) for short-term obligations by at least two nationally
recognized statistical rating organizations (each, an "NRSRO") assigning a
rating to the security or issuer or, if only one NRSRO assigns a rating, that
NRSRO or, in the case of an investment which is not rated, of comparable quality
as determined by the Adviser. Investments in high quality, short-term
instruments may, in many circumstances, result in a lower yield than would be
available from investments in instruments with a lower quality or a longer term.
PERMITTED INVESTMENTS. Uninvested cash reserves may be held temporarily
for a Fund pending investment. Each Fund may borrow from banks up to 10% of its
total assets for temporary or emergency purposes. For more information regarding
permitted investments and investment practices, see Appendix A -- Permitted
Investments and Investment Practices on page 16. The Funds will not necessarily
invest or engage in each of the investments and investment practices in Appendix
A but reserve 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 Funds and the Portfolios. Except as otherwise indicated, the Funds' and
Portfolios' investment objectives and policies may be changed without
shareholder approval. If a percentage or rating restriction (other than a
restriction as to borrowing) is adhered to at the time an investment is made, a
later change in percentage or rating resulting from changes in the Portfolios'
securities will not be a violation of policy.
BROKERAGE TRANSACTIONS. The primary consideration in placing the
Portfolios' security transactions with broker-dealers for execution is to obtain
and maintain the availability of execution at the most favorable prices and in
the most effective manner possible.
------------------------------------------------------
------------------------------------------------------
RISK CONSIDERATIONS
The risks of investing in each 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.
---
---
7
<PAGE> 11
"CONCENTRATION" IN BANK OBLIGATIONS. Cash Reserves Portfolio invests more
than 25% of its assets, and may invest up to 100% of its assets, in bank
obligations. This concentration policy is fundamental, and may not be changed
without the consent of the Portfolio's investors. Banks are subject to extensive
governmental regulation which may limit both the amounts and types of loans and
other financial commitments which may be made and interest rates and fees which
may be charged. The profitability of this industry is largely dependent upon the
availability and cost of capital funds for the purpose of financing lending
operations under prevailing money market conditions. Also, general economic
conditions play an important part in the operation of this industry and exposure
to credit losses arising from possible financial difficulties of borrowers might
affect a bank's ability to meet its obligations under a letter of credit or
guarantee.
NON-U.S. SECURITIES. Investors in Institutional Liquid Reserves should be
aware that investments in non-U.S. securities involve risks relating to
political, social and economic developments abroad, as well as risks resulting
from the differences between the regulations to which U.S. and non-U.S. issuers
and markets are subject. These risks may include expropriation, confiscatory
taxation, withholding taxes on dividends and interest, limitations on the use or
transfer of Portfolio assets and political or social instability. In addition,
non-U.S. companies may not be subject to accounting standards or governmental
supervision comparable to U.S. companies, and there may be less public
information about their operations. Non-U.S. markets may be less liquid and more
volatile than U.S. markets, and may offer less protection to investors such as
Cash Reserves Portfolio.
NON-DIVERSIFIED STATUS. Institutional Tax Free Reserves and Tax Free
Reserves Portfolio are non-diversified mutual funds. This means that they are
not subject to any statutory restrictions under the 1940 Act limiting the
investment of their assets in one or relatively few issuers (although certain
diversification requirements are imposed by the Internal Revenue Code). Since
Tax Free Reserves Portfolio may invest a relatively high percentage of its
assets in the obligations of a limited number of issuers, the value of shares of
Institutional Tax Free Reserves may be more susceptible to any single economic,
political or regulatory occurrence than the value of shares of a diversified
mutual fund would be. Tax Free Reserves Portfolio also may invest 25% or more of
its assets in securities the issuers of which are located in the same state or
the interest on which is paid from revenues of similar type projects or that are
otherwise related in such a way that a single economic, business or political
development or change affecting one of the securities would also affect other
securities. Investors should consider the greater risk inherent in these
policies when compared with a more diversified mutual fund.
"CONCENTRATION" IN PARTICIPATION INTERESTS. Tax Free Reserves Portfolio
invests more than 25% of its assets in Participation Interests in Municipal
Obligations which are secured by bank letters of credit or guarantees. See
"Concentration" in Bank Obligations above for information about banks and the
banking industry. For additional information concerning variable rate
instruments and Participation Interests, see Appendix A.
INVESTMENT PRACTICES. Certain of the investment practices employed for the
Portfolios may entail certain risks. See Appendix A -- Permitted Investments and
Investment Practices on page 16.
SPECIAL INFORMATION CONCERNING INVESTMENT STRUCTURE: The Funds do not invest
directly in securities. Instead, the Funds invest all of their investable assets
in their corresponding Portfolios, which are mutual funds having the same
investment objectives and policies as the Funds. The Portfolios, in turn, buy,
hold and sell securities in accordance with these objectives and policies. Of
course, there can be no assurance that the Funds or the Portfolios will achieve
their objectives. The Trustees of each Fund believe that the aggregate per share
expenses of that Fund and its corresponding 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 its
Portfolio. Each Fund may withdraw its investment in its Portfolio at any time,
and will do so if the Fund's Trustees believe it to be in the best interest of
the Fund's shareholders. If a Fund were to withdraw its investment in its
Portfolio, the Fund could either invest directly in securities in accordance
with the investment policies described above or invest in another mutual fund or
pooled investment vehicle having the same investment objectives and policies. If
a Fund were to withdraw, the Fund could receive securities from the Portfolio
instead of cash, causing the Fund to incur brokerage, tax and other charges or
leaving it
---
---
8
<PAGE> 12
with securities which may or may not be readily marketable or widely
diversified.
Each Portfolio may change its investment objective and certain of its
investment policies and restrictions without approval by its investors, but the
Portfolio will notify its corresponding Fund (which in turn will notify its
shareholders) and its other investors at least 30 days before implementing any
change in its investment objective. A change in investment objective, policies
or restrictions may cause a Fund to withdraw its investment in its Portfolio.
Certain investment restrictions of each Portfolio cannot be changed
without approval by the investors in that Portfolio. These policies are
described in the Statement of Additional Information. When a Fund is asked to
vote on matters concerning its Portfolio (other than a vote to continue the
Portfolio following the withdrawal of an investor), the Fund will hold a
shareholder meeting and vote in accordance with shareholder instructions. Of
course, the Fund could be outvoted, or otherwise adversely affected, by other
investors in its Portfolio.
The Portfolios may sell interests to investors in addition to the Funds.
These investors may be mutual funds which offer shares to their shareholders
with different costs and expenses than the Funds. Therefore, the investment
returns for all investors in funds investing in a Portfolio may not be the same.
These differences in returns are also present in other mutual fund structures.
Information about other holders of interests in the Portfolios is available from
the Funds' distributor, LFBDS (see back cover for address and phone number).
------------------------------------------------------
------------------------------------------------------
VALUATION OF SHARES
Net asset value per share of each 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 3:00 p.m., Eastern time, for Institutional Liquid
Reserves and as of 12:00 noon, Eastern time, for Institutional U.S. Treasury
Reserves and Institutional Tax Free Reserves, by adding the market value of all
securities and other assets of a Fund (including its interest in its Portfolio),
then subtracting the liabilities charged to the Fund, and then dividing the
result by the number of outstanding shares of the Fund. The amortized cost
method of valuing Portfolio securities is used in order to attempt to stabilize
the net asset value of shares of each Fund at $1.00; however, there can be no
assurance that a Fund's net asset value will always remain at $1.00 per share.
The net asset value per share is effective for orders received and accepted by
the Distributor prior to its calculation.
The amortized cost method involves valuing a security at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium. Although the amortized cost method provides certainty in valuation, it
may result in periods during which the stated value of a security is higher or
lower than the price a Portfolio would receive if the security were sold.
------------------------------------------------------
------------------------------------------------------
PURCHASES
Shares of the Funds are offered continuously and may be purchased on any
Business Day without a sales load at the shares' net asset value (normally $1.00
per share) next determined after an order is transmitted to and accepted by the
Distributor. Shares may be purchased 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. Shares of the
Funds 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 a
Fund). Each 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.
While there is no sales load imposed on shares of the Funds, the
Distributor receives fees from each Fund pursuant to a Distribution Plan. See
"Management -- Distribution Arrangements."
Each shareholder's account is established and maintained by the
shareholder's 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
---
---
9
<PAGE> 13
fees. The effect of any such fees will be to reduce the net return on the
investment of customers of that Shareholder Servicing Agent.
Shareholder Servicing Agents will not transmit purchase orders to the
Distributor until they have 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.
From time to time LFBDS may make payments for distribution and/or
shareholder servicing activities out of its past profits or any other sources
available to it. The Distributor also may make payments for marketing,
promotional or related expenses to dealers who engage in marketing efforts on
behalf of the Funds. The amounts of these payments will be determined by the
Distributor in its sole discretion and may vary among different dealers.
------------------------------------------------------
------------------------------------------------------
EXCHANGES
Shares of each Fund may be exchanged for shares 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 those funds. No initial sales
charge is imposed on shares being acquired through an exchange unless the shares
being acquired are subject to a sales charge that 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). Contingent deferred sales charges may apply
to redemptions of some shares of other Landmark Funds disposed of or 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 Funds may be exchanged only after payment
in federal funds for the 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.
------------------------------------------------------
------------------------------------------------------
REDEMPTIONS
Fund shares may be redeemed at their net asset value (normally $1.00 per
share) next determined after a redemption request in proper form is received by
a shareholder's Shareholder Servicing Agent. Shareholders may redeem shares of a
Fund only by authorizing their Shareholder Servicing Agents to redeem such
shares on their behalf through the Distributor.
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 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 Funds and each Shareholder Servicing
Agent will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. These procedures may include recording of
the telephone instructions and verification of a caller's identity by asking for
the shareholder's name, address, telephone number, Social Security or taxpayer
identification 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.
---
---
10
<PAGE> 14
PAYMENT OF REDEMPTIONS. The proceeds of a redemption are paid in federal
funds normally on the Business Day the redemption is effected, but in any event
within seven days. If a shareholder requests redemption of shares which were
purchased recently, a 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" in the Statement of
Additional Information regarding the Funds' right to pay the redemption price in
kind with securities (instead of cash).
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.
------------------------------------------------------
------------------------------------------------------
NET INCOME AND DISTRIBUTIONS
The net income of each Fund is determined each Business Day (and on such
other days as is necessary in order to comply with the 1940 Act). This
determination is made once during each such day as of 3:00 p.m., Eastern time,
for Institutional Liquid Reserves and 12:00 noon, Eastern time, for
Institutional U.S. Treasury Reserves and Institutional Tax Free Reserves. All
the net income of each Fund is declared as a dividend to shareholders of record
at the time of such determination. Shares begin accruing dividends on the day
they are purchased, and accrue dividends up to and including the day prior to
redemption. Dividends are distributed monthly on or prior to the last Business
Day of each month. Unless a shareholder elects to receive dividends in cash
(subject to the policies of the shareholder's Shareholder Servicing Agent),
dividends are distributed in the form of full and fractional additional shares
of the applicable Fund at the rate of one share of the Fund for each one dollar
of dividend income.
Since the net income of each Fund is declared as a dividend each time the
net income of the Fund is determined, the net asset value per share of each Fund
is expected to remain at $1.00 per share immediately after each such
determination and dividend declaration. Any increase in the value of a
shareholder's investment in a Fund, representing the reinvestment of dividend
income, is reflected by an increase in the number of shares of the Fund in the
shareholder's account.
Because of the short-term maturities of the portfolio investments of the
Funds, the Funds do not expect to realize long-term capital gains or losses. Any
net realized short-term capital gains will be declared and distributed to the
applicable Fund's shareholders annually after the close of the Fund's fiscal
year. Distributions of short-term capital gains are taxable to shareholders as
described in "Tax Matters." Any realized short-term capital losses will be
offset against short-term capital gains or, to the extent possible, utilized as
capital loss carryover. Each Fund may distribute short-term capital gains more
frequently than annually, reduce shares to reflect capital losses or make
distributions of capital if necessary in order to maintain the Fund's net asset
value of $1.00 per share.
It is expected that each Fund will have a positive net income at the time
of each determination thereof. If for any reason a Fund's net income is a
negative amount, which could occur, for instance, upon default by an issuer of a
portfolio security, the Fund would first offset the negative amount with respect
to each shareholder account from the dividends declared during the month with
respect to those accounts. If and to the extent that negative net income exceeds
declared dividends at the end of the month, the Fund would reduce the number of
outstanding Fund shares by treating each shareholder as having contributed to
the capital of the Fund that number of full and fractional shares in the
shareholder's account which represents the shareholder's share of the amount of
such excess. Each shareholder would be deemed to have agreed to such
contribution in these circumstances by investment in a Fund.
------------------------------------------------------
------------------------------------------------------
MANAGEMENT
TRUSTEES AND OFFICERS: Each Fund is supervised by the Board of Trustees of
Landmark Institutional Trust. Each Portfolio is supervised by its own Board of
Trustees. In each case, a majority of the Trustees are not affiliated with the
Adviser. In addition, a majority of the disinterested Trustees of the Funds are
different
---
---
11
<PAGE> 15
from a majority of the disinterested trustees of their corresponding Portfolios.
More information on the Trustees and officers of the Funds and the Portfolios
appears under "Management" in the Statement of Additional Information.
INVESTMENT ADVISER: CITIBANK. Each 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 $83 billion in assets worldwide. Citibank is a wholly-owned
subsidiary of Citicorp.
Citibank manages the assets of each Portfolio pursuant to separate
Investment Advisory Agreements. Subject to policies set by the Portfolios'
Trustees, Citibank makes investment decisions for the Portfolios.
ADVISORY FEES. For its services under the Investment Advisory Agreements,
the Adviser receives investment advisory fees, which are accrued daily and paid
monthly, of 0.15% (0.20% for Tax Free Reserves Portfolio) of each Portfolio's
average daily net assets on an annualized basis for the Portfolio's then-current
fiscal year. The Adviser has voluntarily agreed to waive a portion of its
investment advisory fee.
For the fiscal year ended August 31, 1996, the investment advisory fees
paid to Citibank from Cash Reserves Portfolio were, after waiver, 0.06% of the
Portfolio's average daily net assets for that fiscal year, and from U.S.
Treasury Reserves Portfolio were, after waiver, 0.05% of the Portfolio's average
daily net assets for that fiscal year. Institutional Tax Free Reserves is newly
organized and had no operations during the fiscal year ended August 31, 1996.
BANKING RELATIONSHIPS. Citibank and its affiliates may have deposit, loan
and other relationships with the issuers of securities purchased on behalf of
the Portfolios, including outstanding loans to such issuers which may be repaid
in whole or in part with the proceeds of securities so purchased. Citibank has
informed the Funds and the Portfolios that, in making its investment decisions,
it does not obtain or use material inside information in the possession of any
division or department of Citibank or in the possession of any affiliate of
Citibank.
BANK REGULATORY MATTERS. The Glass-Steagall Act prohibits certain
financial institutions, such as Citibank, from underwriting securities of
open-end investment companies, such as the Funds or the Portfolios. Citibank
believes that its services under the Investment Advisory Agreements and the
activities performed by it or its affiliates as Shareholder Servicing Agents and
sub-administrator are not underwriting and are consistent with the Glass-
Steagall Act and other relevant federal and state laws. However, there is no
controlling precedent regarding the performance of the combination of investment
advisory, shareholder servicing and sub-administrative activities by banks.
State laws on this issue may differ from applicable federal law and banks and
financial institutions may be required to register as dealers pursuant to state
securities laws. Changes in either federal or state statutes or regulations, or
in their interpretations, could prevent Citibank or its affiliates from
continuing to perform these services. If Citibank or its affiliates were to be
prevented from acting as the Adviser, sub-administrator or a Shareholder
Servicing Agent, the Funds or Portfolios would seek alternative means for
obtaining these services. The Funds do not expect that shareholders would suffer
any adverse financial consequences as a result of any such occurrence.
ADMINISTRATIVE SERVICES PLANS: The Funds and Portfolios have Administrative
Services Plans which provide that the applicable Fund or Portfolio may obtain
the services of an administrator, a transfer agent, a custodian, a fund
accountant, and, in the case of the Funds, one or more Shareholder Servicing
Agents, and may enter into agreements providing for the payment of fees for such
services. Under the Funds' Administrative Services Plan, the total of the fees
paid to each Fund's Administrator and Shareholder Servicing Agents may not
exceed 0.45% of the Fund's average daily net assets on an annualized basis for
the Fund's then-current fiscal year. Within this overall limitation, individual
fees may vary. Under each 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."
---
---
12
<PAGE> 16
ADMINISTRATORS: LFBDS provides certain administrative services to the Funds,
U.S. Treasury Reserves Portfolio and Tax Free Reserves Portfolio, and Signature
Financial Group (Cayman), Ltd. ("SFG") provides certain administrative services
to Cash Reserves Portfolio, in each case under administrative services
agreements. These administrative services include providing general office
facilities, supervising the overall administration of the Funds and the
Portfolios, and providing persons satisfactory to the Boards of Trustees to
serve as Trustees and officers of the Funds and Portfolios. These 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 0.35% of the average daily net assets of each Fund and 0.05% of the
assets of each Portfolio, in each case on an annualized basis for the Fund's or
the Portfolio's then-current fiscal year. However, each of the Administrators
has voluntarily agreed to waive a portion of the fees payable to it.
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 Funds and Portfolios as from
time to time are agreed upon by Citibank and LFBDS or SFG. Citibank's
compensation as sub-administrator is paid by LFBDS or SFG.
SHAREHOLDER SERVICING AGENTS: The Funds have entered into separate shareholder
servicing agreements with each Shareholder Servicing Agent pursuant to which
that Shareholder Servicing Agent provides shareholder services, including
answering customer inquiries, assisting in processing purchase, exchange and
redemption transactions and furnishing Fund communications to shareholders. For
these services, each Shareholder Servicing Agent receives a fee from each Fund
at an annual rate of 0.10% of the average daily net assets of the Fund
represented by shares owned by investors for whom such Shareholder Servicing
Agent maintains a servicing relationship.
Some Shareholder Servicing Agents may impose certain conditions on their
customers in addition to or different from those imposed by the Funds, such as
requiring a minimum initial investment or charging their customers a direct fee
for their services. Each Shareholder Servicing Agent has agreed to transmit to
its customers who are shareholders of a Fund appropriate prior written
disclosure of any fees that it may charge them directly and to provide written
notice at least 30 days prior to imposition of any transaction fees.
TRANSFER AGENT, CUSTODIAN AND FUND ACCOUNTANT: State Street Bank and Trust
Company (or its affiliate State Street Canada, Inc.) acts as transfer agent and
dividend disbursing agent for each Fund. State Street (or State Street Canada)
acts as the custodian of each Fund's and each Portfolio's assets. Securities
held for a Portfolio may be held by a sub-custodian bank approved by the
Portfolio's Trustees. State Street also provides fund accounting services to the
Funds and the Portfolios and calculates the daily net asset value for the Funds
and the Portfolios.
DISTRIBUTION ARRANGEMENTS: LFBDS is the Distributor of each Fund's shares and
also serves as distributor for each of the other Landmark Funds and as a
Shareholder Servicing Agent for certain investors. As Distributor, LFBDS bears
the cost of compensating personnel involved in the sale of shares of the Funds
and bears all costs of travel, office expenses (including rent and overhead) and
equipment. In those states where LFBDS is not a registered broker-dealer, shares
of the Funds are sold through Signature Broker-Dealer Services, Inc., as dealer.
Under a Plan of Distribution adopted in accordance with Rule 12b-1 under
the 1940 Act, each Fund pays the Distributor a fee at an annual rate not to
exceed 0.10% of the average daily net assets of the Fund in anticipation of, or
as reimbursement for, expenses incurred by the Distributor in connection with
the sale of shares, such as advertising expenses and the expenses of printing
(excluding typesetting) and distributing prospectuses and reports used for sales
purposes, expenses of preparing and printing sales literature and other
distribution-related expenses. However, the Distributor has agreed to waive a
portion of these fees for each Fund.
The Funds and the Distributor provide to the Trustees quarterly a written
report of amounts expended pursuant to the Plan and the purposes for which the
expenditures were made.
---
---
13
<PAGE> 17
------------------------------------------------------
------------------------------------------------------
TAX MATTERS
This discussion of taxes is for general information only. Investors should
consult their own tax advisers about their particular situations.
FEDERAL INCOME TAXES. Each Fund intends to meet requirements of the
Internal Revenue Code applicable to regulated investment companies so that it
will not be liable for any federal income or excise taxes.
Shareholders of Institutional Liquid Reserves and Institutional U.S.
Treasury Reserves are required to pay federal income tax on any dividends and
other distributions received. Institutional Tax Free Reserves expects that most
of its net income will be attributable to interest on Municipal Obligations and
as a result most of the Fund's dividends to shareholders will be excludable from
shareholders' gross income. However, the Fund may invest from time to time in
taxable securities, and certain Fund dividends may be subject to the federal
alternative minimum tax. It is also possible, but not intended, that a Fund may
realize short-term and long-term capital gains or losses. Generally,
distributions from a Fund's net investment income which are subject to tax and
short-term capital gains will be taxed as ordinary income. Distributions from
long-term net capital gains will be taxed as such regardless of how long the
shares of a Fund have been held. Dividends and distributions are treated in the
same manner for federal tax purposes whether they are paid in cash or as
additional shares.
Fund dividends of tax-exempt income are taken into account in determining
the amount of a shareholder's social security and railroad retirement benefits
that may be subject to federal income tax. No deduction may be claimed for
interest on indebtedness incurred or extended for the purpose of purchasing or
carrying Fund shares. Investors who are, or who are related to, "substantial
users" of facilities financed by private activity bonds should consult their tax
advisers before buying shares of Institutional Tax Free Reserves.
The account application asks each new shareholder to certify that the
shareholder's Social Security or taxpayer identification number is correct and
that the shareholder is not subject to 31% backup withholding for failing to
report income to the IRS. A Fund may be required to withhold (and pay over to
the IRS for the shareholder's credit) 31% of certain distributions paid to
shareholders who fail to provide this information or otherwise violate IRS
regulations.
Early each year, each Fund will notify its shareholders of the amount and
tax status of distributions paid to shareholders for the preceding year.
STATE AND LOCAL TAXES. Distributions derived from interest on U.S.
Government obligations may be exempt from certain state and local taxes. Fund
dividends which are excluded from shareholders' gross income for federal income
tax purposes may not necessarily be exempt from the income or other tax laws of
any state or local taxing authority. Investors should consult their own tax
advisers in this regard.
FOREIGN SHAREHOLDERS. The Fund will withhold U.S. federal income tax
payments at a rate of 30% (or any lower applicable treaty rate) on taxable
dividends and other payments subject to withholding taxes that are made to
persons who are not citizens or residents of the United States. Distributions
received from the Fund by non-U.S. persons also may be subject to tax under the
laws of their own jurisdiction.
------------------------------------------------------
------------------------------------------------------
PERFORMANCE INFORMATION
Fund performance may be quoted in advertising, shareholder reports and
other communications in terms of yield, effective yield, tax equivalent yield,
total rate of return or tax equivalent total rate of return. All performance
information is historical and is not intended to indicate future performance.
Yields and total rates of return fluctuate in response to market conditions and
other factors.
Each Fund may provide its period and average annualized "total rates of
return" and Institutional U.S. Treasury Reserves and Institutional Tax Free
Reserves may also provide "tax equivalent 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 and is compounded to include the value of any shares
purchased with any dividends or capital gains declared during
---
---
14
<PAGE> 18
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. The "tax equivalent total rate of return" refers to the
total rate of return that a fully taxable money market fund would have to
generate in order to produce an after-tax total rate of return equivalent to
that of the applicable Fund. The use of a tax equivalent total rate of return
allows investors to compare the total rates of return of Institutional U.S.
Treasury Reserves and Institutional Tax Free Reserves, the dividends from which
may be exempt from federal and state personal income taxes, respectively, with
the total rates of return of funds the dividends from which are not so tax
exempt.
Each Fund may provide annualized "yield" and "effective yield" quotations,
and Institutional U.S. Treasury Reserves and Institutional Tax Free Reserves may
also provide "tax equivalent yield" quotations. The "yield" of a Fund refers to
the income generated by an investment in the Fund over a seven-day period (which
period is stated in any such advertisement or communication). This income is
then annualized; that is, the amount of income generated by the investment over
that period is assumed to be generated each week over a 365-day period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly, but when annualized the income earned by the investment during that
seven-day period is assumed to be reinvested. The effective yield is slightly
higher than the yield because of the compounding effect of this assumed
reinvestment. The "tax equivalent yield" refers to the yield that a fully
taxable money market fund would have to generate in order to produce an after-
tax yield equivalent to that of the applicable Fund. The use of a tax equivalent
yield allows investors to compare the yield of Institutional Tax Free Reserves
and Institutional U.S. Treasury Reserves, the dividends from which may be exempt
from federal and state personal income tax, respectively, with yields of funds
the dividends from which are not so tax exempt. A Fund may also provide yield,
effective yield and tax equivalent yield quotations for longer periods.
Of course, any fees charged by a shareholder's Shareholder Servicing Agent
will reduce that shareholder's net return on its investment. See the Statement
of Additional Information for more information concerning the calculation of
yield and total rate of return quotations for the Funds.
------------------------------------------------------
------------------------------------------------------
GENERAL INFORMATION
ORGANIZATION: Institutional Liquid Reserves and Institutional U.S. Treasury
Reserves are diversified series, and Institutional Tax Free Reserves is a
non-diversified series, of Landmark Institutional Trust, which is a
Massachusetts business trust which was organized on July 8, 1992. Each Fund also
is an open-end management investment company registered under the 1940 Act.
Under the 1940 Act, a diversified series or diversified investment company
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. See "Risk
Considerations" for information about non-diversified series and investment
companies.
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.
Each Portfolio is a separate trust organized under the laws of the State
of New York. The Declaration of Trust of each Portfolio provides that a Fund and
other entities investing in a Portfolio are each liable for all obligations of
that Portfolio. However, it is not expected that the liabilities of a Portfolio
would ever exceed its assets.
VOTING AND OTHER RIGHTS: Landmark Institutional Trust (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 each 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 Fund or class, only
shares of that particular Fund or class are entitled to vote.
---
---
15
<PAGE> 19
Institutional Liquid Reserves currently offers three classes of shares.
Class A shares are described in this Prospectus. Class C and F shares have
different expenses, which will affect performance. Shareholder Servicing Agents
have information on the other classes (see inside back cover for telephone
numbers).
At any meeting of shareholders of a Fund, a Shareholder Servicing Agent
may vote any shares of which it is the holder of record and for which it does
not receive voting instructions proportionately in accordance with instructions
it receives for all other shares of which that Shareholder Servicing Agent is
the holder of record.
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 a Fund's or 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 each Fund is
entitled to participate equally in dividends and other distributions and the
proceeds of any liquidation of that Fund.
CERTIFICATES: The Funds' Transfer Agent maintains a share register for
shareholders of record, i.e., Shareholder Servicing Agents. Share certificates
are not issued.
RETIREMENT PLANS: Investors in Institutional Liquid Reserves and Institutional
U.S. Treasury Reserves may be able to establish new accounts in a 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: For the fiscal year ended August 31, 1996, total operating expenses of
Institutional Liquid Reserves and Institutional U.S. Treasury Reserves, after
allocating to each Fund its share of its Portfolio's expenses and after giving
effect to fee waivers or reimbursements, were as follows: for Institutional
Liquid Reserves, 0.20% of the Fund's average daily net assets for that fiscal
year; and for Institutional U.S. Treasury Reserves, 0.25% of the Fund's average
daily net assets for that fiscal year. All fee waivers are voluntary and may be
reduced or terminated at any time. Institutional Tax Free Reserves is newly
organized and had no operations during the fiscal year ended August 31, 1996.
---------------------------------------------
The Statement of Additional Information dated the date hereof contains
more detailed information about the Funds and the Portfolios, including
information related to (i) investment policies and restrictions, (ii) the
Trustees, officers, Adviser and Administrators, (iii) securities transactions,
(iv) the Funds' 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.
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 Funds
or their distributor. This Prospectus does not constitute an offering by the
Funds or their distributor in any jurisdiction in which such offering may not
lawfully be made.
------------------------------------------------------
------------------------------------------------------
APPENDIX A
PERMITTED INVESTMENTS
AND INVESTMENT PRACTICES
TREASURY RECEIPTS. Each Portfolio may invest in Treasury Receipts, which
are unmatured interest coupons of U.S. Treasury bonds and notes which have been
separated and resold in a custodial receipt program administered by the U.S.
Treasury.
COMMERCIAL PAPER. Cash Reserves Portfolio may invest in commercial paper,
which is unsecured debt of corporations usually maturing in 270 days or less
from its date of issuance.
ASSET-BACKED SECURITIES. Cash Reserves Portfolio may invest in
asset-backed securities, which represent fractional interests in underlying
pools of assets, such as car installment loans or credit card receivables. The
rate of return on asset-backed securities may be affected by prepayment of the
underlying loans or receivables. Reinvestment of principal may occur at higher
or lower rates than the original yield.
---
---
16
<PAGE> 20
REPURCHASE AGREEMENTS. Cash Reserves Portfolio may enter into repurchase
agreements. Repurchase agreements are transactions in which an institution sells
the Portfolio a security at one price, subject to the Portfolio'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.
LENDING OF PORTFOLIO SECURITIES. Consistent with applicable regulatory
requirements and in order to generate additional income, each Portfolio 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 a Portfolio would not exceed 33 1/3% of the Portfolio's
net assets.
In the event of the bankruptcy of the other party to a securities loan or
a repurchase agreement, the Portfolio could experience delays in recovering
either the securities lent or cash. To the extent that, in the meantime, the
value of the securities lent have increased or the value of the securities
purchased have decreased, the Portfolio could experience a loss.
PRIVATE PLACEMENTS AND ILLIQUID INVESTMENTS. Each Portfolio may invest up
to 10% of its net assets in securities for which there is no readily available
market. These illiquid securities may include privately placed restricted
securities for which no institutional market exists. The absence of a trading
market can make it difficult to ascertain a market value for illiquid
investments. Disposing of illiquid investments may involve time-consuming
negotiation and legal expenses, and it may be difficult or impossible for the
Portfolio to sell them promptly at an acceptable price.
RESTRICTED SECURITIES. Tax Free Reserves Portfolio may purchase restricted
securities that are not registered for sale to the general public. 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
Portfolio'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.
MUNICIPAL BONDS. Tax Free Reserves Portfolio may invest in municipal
bonds, which are debt obligations of states, cities, municipalities and
municipal agencies and authorities which generally have a maturity at the time
of issue of one year or more and which are issued to raise funds for various
public purposes, such as construction of a wide range of public facilities,
refunding outstanding obligations or obtaining funds for institutions and
facilities. The two principal classifications of municipal bonds are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith, credit and taxing power for the payment of
principal and interest. The principal of and interest on revenue bonds are
payable from the income of specific projects or authorities and generally are
not supported by the issuer's general power to levy taxes. In some cases,
revenues derived from specific taxes are pledged to support payments on a
revenue bond.
In addition, certain kinds of industrial development bonds ("IDBs") are
issued by or on behalf of public authorities to provide funding for various
privately operated industrial facilities, such as warehouse, office, plant and
store facilities and environmental and pollution control facilities. IDBs are,
in most cases, revenue bonds. The payment of the principal and interest on IDBs
usually depends solely on the ability of the user of the facilities financed by
the bonds or other guarantor to meet its financial obligations and, in certain
instances, the pledge of real and personal property as security for payment.
Many IDBs may not be readily marketable; however, the IDBs or the participation
certificates in IDBs purchased by the Portfolio will have liquidity because they
generally will be supported by demand features to "high quality" banks,
insurance companies or other financial institutions.
MUNICIPAL NOTES. Tax Free Reserves Portfolio may invest in municipal
notes. There are four major varieties of state and municipal notes: Tax and
Revenue Anticipation Notes ("TRANs"); Tax Anticipation Notes ("TANs"); Revenue
Anticipation Notes ("RANs"); and Bond Anticipation Notes ("BANs"). TRANs, TANs
and RANs are issued by states, municipalities and other tax-exempt issuers to
finance short-term cash needs or, occasionally,
---
---
17
<PAGE> 21
to finance construction. Most TRANs, TANs and RANs are general obligations of
the issuing entity payable from taxes or designated revenues, respectively,
expected to be received within the related fiscal period. BANs are issued with
the expectation that principal and interest of the maturing notes will be paid
out of proceeds from notes or bonds to be issued concurrently or at a later
date. BANs are issued most frequently by both general obligation and revenue
bond issuers usually to finance such items as land acquisition, facility
acquisition and/or construction and capital improvement projects.
VARIABLE RATE INSTRUMENTS AND PARTICIPATION INTERESTS. Variable rate
instruments provide for a periodic adjustment in the interest rate paid on the
instrument and usually permit the holder to receive payment of principal and
accrued interest upon a specified number of days' notice. Variable rate
instruments in which Tax Free Reserves Portfolio may invest include
participation interests in Municipal Obligations owned by a bank, insurance
company or other financial institution or affiliated organization
("Participation Interests"). A variable rate instrument or a Participation
Interest may be backed by an irrevocable letter of credit or guarantee of, or a
right to put to, a bank, or an insurance policy of an insurance company. See
"Stand-by Commitments." Purchase of a Participation Interest may involve the
risk that the Portfolio will not be deemed to be the owner of the underlying
Municipal Obligation for purposes of the ability to claim tax exemption of
interest paid on that Municipal Obligation. If interest rates rise or fall, the
rates payable on variable rate instruments will generally be readjusted. As a
result variable rate instruments do not offer the same opportunity for capital
appreciation or loss as fixed rate instruments.
STAND-BY COMMITMENTS. When Tax Free Reserves Portfolio purchases Municipal
Obligations it may also acquire stand-by commitments from banks with respect to
such Municipal Obligations. The Portfolio also may acquire stand-by commitments
from broker-dealers. Under a stand-by commitment, a bank or broker-dealer agrees
to purchase at the Portfolio's option a specified Municipal Obligation at a
specified price. A stand-by commitment is the equivalent of a "put" option with
respect to a particular Municipal Obligation. The Portfolio intends to acquire
stand-by commitments solely to facilitate liquidity. Stand-by commitments are
subject to certain risks, which include the ability of the issuer of the
commitment to pay for the Municipal Obligations at the time the commitment is
exercised, the fact that the commitment is not marketable, and that the maturity
of the underlying security will generally be different from that of the
commitment.
"WHEN-ISSUED" SECURITIES. In order to ensure the availability of suitable
securities, Tax Free Reserves Portfolio may purchase securities on a
"when-issued" or on a "forward delivery" basis, which means that the securities
would be delivered to the Portfolio at a future date beyond customary settlement
time. Under normal circumstances, the Portfolio takes delivery of the
securities. In general, the purchaser 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 Portfolio establishes a
segregated account consisting of cash, cash equivalents or high quality debt
securities equal to the amount of the Portfolio's commitments to purchase
"when-issued" securities. An increase in the percentage of the Portfolio's
assets committed to the purchase of securities on a "when-issued" basis may
increase the volatility of its net asset value.
------------------------------------------------------
------------------------------------------------------
APPENDIX B
RATINGS OF MUNICIPAL OBLIGATIONS*
The ratings of Moody's Investors Service, Inc., Standard & Poor's Ratings
Group, and Fitch Investors Service, Inc. represent their opinions as to the
quality of various debt obligations. It should be emphasized, however, that
ratings are not absolute standards of quality. Consequently, Municipal
Obligations with the same maturity, coupon and rating may have different yields
while Municipal Obligations of the same maturity and coupon with different
ratings may have the same yield.
- ---------------
* As described by the rating agencies, Ratings are generally given to securities
at the time of issuance. While the rating agencies may from time to time
revise such ratings, they undertake no obligation to do so.
---
---
18
<PAGE> 22
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S
TWO HIGHEST LONG-TERM DEBT RATINGS
AAA -- Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and generally are referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
AA -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower then the best bonds because margins of
protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
Note: Those bonds in the Aa group which Moody's believes possess the
strongest investment attributes are designated by the symbols Aa1.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S
TWO HIGHEST RATINGS OF STATE AND MUNICIPAL NOTES
Moody's ratings for state and municipal short-term obligations are
designated Moody's Investment Grade ("MIG"). Such ratings recognize the
differences between short-term credit risk and long-term risk. A short-term
rating ("VMIG") may also be assigned to variable rate demand obligations.
Factors affecting the liquidity of the borrower and short-term cyclical elements
are critical in short-term ratings, while other factors of major importance in
bond risk, long-term secular trends, for example, may be less important over the
short run. Symbols are used as follows:
MIG 1/VMIG 1 -- This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2 -- This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S
TWO HIGHEST COMMERCIAL PAPER RATINGS
Moody's commercial paper ratings are opinions of the ability of issuers to
repay punctually senior debt obligations. These obligations have an original
maturity not exceeding one year.
Issuers rated PRIME-1 (or supporting institutions) have a superior ability
for repayment of senior short-term debt obligations. Prime-1 repayment ability
will often be evidenced by many of the following characteristics: (1) leading
market positions in well-established industries; (2) high rates of return on
funds employed; (3) conservative capitalization structure with moderate reliance
on debt and ample asset protection; (4) broad margins in earnings coverage of
fixed financial charges and high internal cash generation; and (5) well
established access to a range of financial markets and assured sources of
alternate liquidity.
Issuers rated PRIME-2 (or supporting institutions) have a strong ability
for repayment of senior short-term debt obligations. This will normally be
evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S
TWO HIGHEST LONG-TERM DEBT RATINGS
AAA -- An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
AA -- An obligation rated "AA" differs from the highest rated obligations only
in a small degree. The obligor's capacity to meet its financial commitment on
the obligation is very strong.
Plus (+) or minus (-): The "AA" rating may be modified by the addition of
a plus or minus sign to show relative standing within the "AA" rating category.
---
---
19
<PAGE> 23
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S
TWO HIGHEST RATINGS OF STATE AND MUNICIPAL NOTES
A Standard & Poor's note rating reflects the liquidity factors and market
access risks unique to notes. Notes maturing in three years or less will likely
receive a note rating. Notes maturing beyond three years most likely receive a
long-term debt rating. The following criteria will be used in making that
assessment:
Amortization schedule -- the larger the final maturity relative to other
maturities, the more likely the issue is to be treated as a note.
Source of payment -- the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note.
Note rating symbols and definitions are as follows:
SP-1 -- Strong capacity to pay principal and interest. Issues determined to
possess very strong characteristics are given a plus (+) designation.
SP-2 -- Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S
TWO HIGHEST COMMERCIAL PAPER RATINGS
A Standard & Poor's issue credit rating is a current opinion of the
creditworthiness of an obligor with respect to a specific financial obligation
(including commercial paper programs). It takes into consideration the
creditworthiness of guarantors, insurers or other forms of credit enhancement on
the obligation and takes into account the currency in which the obligation is
denominated.
A-1 -- A short-term obligation rated "A-1" is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.
A-2 -- A short-term obligation rated "A-2" is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.
DESCRIPTION OF STANDARD & POOR'S
RATINGS GROUP'S DUAL RATINGS
Standard & Poor's assigns "dual" ratings to all debt issues that have a
put option or demand feature as part of their structure.
The first rating addresses the likelihood of repayment of principal and
interest as due, and the second rating addresses only the demand feature. The
long-term debt rating symbols are used for bonds to denote the long-term
maturity and the commercial paper rating symbols for the put option (for
example, "AAA/A-1+"). With short-term demand debt, Standard & Poor's note rating
symbols are used with the commercial paper rating symbols (for example,
"SP-1+/A-1+").
DESCRIPTION OF FITCH INVESTORS SERVICES, INC.'S
TWO HIGHEST BOND RATINGS
The rating takes into consideration special features of the issue, its
relationship to other obligations of the issuer, the current and prospective
financial condition and operating performance of the issuer and any guarantor,
as well as the economic and political environment that might affect the issuer's
future financial strength and credit quality.
AAA -- Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA -- Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated "AAA". Because bonds rated in the
"AAA" and "AA" categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated "F-1+".
---
---
20
<PAGE> 24
Plus (+) Minus (-): The "AA" rating may be modified by the addition of a
plus or minus sign to show relative standing within the "AA" rating category.
DESCRIPTION OF FITCH INVESTORS SERVICE, INC.'S
THREE HIGHEST RATINGS OF STATE AND MUNICIPAL NOTES
The short-term rating places greater emphasis than a long-term rating on
the existence of liquidity necessary to meet the issuer's obligations in timely
manner.
F-1+ -- Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1 -- Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
"F-1+".
F-2 -- Good Credit Quality. Issues assigned this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as great
as for issues assigned "F-1+" and "F-1" ratings.
DESCRIPTION OF FITCH INVESTORS SERVICE, INC.'S
THREE HIGHEST COMMERCIAL PAPER RATINGS
The short-term rating places greater emphasis than a long-term rating on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.
F-1+ -- Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1 -- Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
"F-1+".
F-2 -- Good Credit Quality. Issues assigned this rating have a satisfactory
degree of assurances for timely payment, but the margin of safety is not as
great as for issues assigned "F-1+" and "F-1" ratings.
---
---
21
<PAGE> 25
- ------------------------------------------------------
------------------------------------------------------
APPENDIX C
TAXABLE EQUIVALENT YIELD TABLE
(RATES FOR 1996 UNDER FEDERAL PERSONAL INCOME TAX LAW)
The table below shows the approximate taxable yields which are equivalent
to tax-exempt bond yields under 1996 federal personal income tax laws. SUCH
YIELDS MAY DIFFER UNDER THE LAWS APPLICABLE TO SUBSEQUENT YEARS IF THE EFFECT OF
ANY SUCH LAW IS TO CHANGE ANY TAX BRACKET OR THE AMOUNT OF TAXABLE INCOME WHICH
IS APPLICABLE TO A TAX BRACKET. Separate calculations, showing the applicable
taxable income brackets, are provided for investors who file joint returns and
for investors who file individual returns. While it is expected that a
substantial portion of the dividends paid to shareholders of the Fund will be
exempt from federal personal income taxes, portions of such dividends from time
to time may be subject to federal income taxes.
<TABLE>
<CAPTION>
FEDERAL TABLE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
<CAPTION>
TAXABLE INCOME* TAX-EXEMPT YIELD
-------------------------------------------------------------------------------------------------------------
INCOME
TAX
SINGLE RETURN JOINT RETURN BRACKET** 2.00% 2.50% 3.00% 3.50%
BUT BUT
OVER NOT OVER OVER NOT OVER EQUIVALENT TAXABLE YIELD
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 $24,000 $ 0 $40,100 15.00% 2.35% 2.94% 3.53% 4.12%
$ 24,000 $58,150 $ 40,100 $96,900 28.00% 2.78% 3.47% 4.17% 4.86%
$ 58,150 $121,300 $ 96,900 $147,700 31.00% 2.90% 3.62% 4.35% 5.07%
$121,300 $263,750 $147,700 $263,750 36.00% 3.13% 3.91% 4.69% 5.47%
$263,150 $263,750 39.60% 3.31% 4.14% 4.97% 5.79%
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
-
----
SING 4.00% 4.50% 5.00% 5.50% 6.00% 6.50%
OVER
<S> <C> <C> <C> <C> <C> <C>
$ 0 4.71% 5.29% 5.88% 6.47% 7.06% 7.65%
$ 24,000 5.56% 6.25% 6.94% 7.64% 8.33% 9.03%
$ 58,150 5.80% 6.52% 7.25% 7.97% 8.70% 9.42%
$121,300 6.25% 7.03% 7.81% 8.59% 9.38% 10.16%
$263,150 6.62% 7.45% 8.28% 9.11% 9.93% 10.76%
</TABLE>
* Net amount subject to Federal income tax after deductions and exemptions.
** Effective Federal tax bracket for 1996. 1997 information is not available as
of the date of this Prospectus.
---
---
22
<PAGE> 26
- ------------------------------------------------------
------------------------------------------------------
SHAREHOLDER
SERVICING AGENTS
FOR CITIBANK PRIVATE BANKING CLIENTS:
Citibank, N.A.
The Citibank Private Bank
153 East 53rd Street, New York, NY 10043
Call Your Citibank Private Banking Account Officer,
Registered Representative or (212) 559-5959
FOR CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY 10043
(212) 559-7117
FOR CITIBANK NORTH AMERICAN INVESTOR
SERVICES CLIENTS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
Call Your Account Manager or (212) 657-9100
--------------------------------------------------
LANDMARK FUNDS (LOGO)
MONEY MARKET FUNDS:
Cash Reserves
Premium Liquid Reserves
Institutional Liquid Reserves
U.S. Treasury Reserves
Premium U.S. Treasury Reserves
Institutional U.S. Treasury Reserves
Tax Free Reserves
Institutional Tax Free Reserves
California Tax Free Reserves
Connecticut Tax Free Reserves
New York Tax Free Reserves
STOCK & BOND FUNDS:
U.S. Government Income Fund
Intermediate Income Fund
National Tax Free Income Fund
New York Tax Free Income Fund
Balanced Fund
Equity Fund
Small Cap Equity Fund
International Equity Fund
Emerging Asian Markets Equity Fund
<PAGE> 27
TRUSTEES AND OFFICERS
Philip W. Coolidge*,
President
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
SECRETARY
Linda T. Gibson*
TREASURER
John R. Elder*
*Affiliated Person of
Administrator and Distributor
-----------------------------
-----------------------------------------------------
-----------------------------------------------------
INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New
York, NY 10043
ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds
Broker-Dealer Services, Inc.
6 St. James Avenue, Boston,
MA 02116
(617) 423-1679
TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust
Company
225 Franklin Street, Boston,
MA 02110
AUDITORS
(FOR LANDMARK INSTITUTIONAL
LIQUID RESERVES)
Price Waterhouse LLP
160 Federal Street, Boston,
MA 02110
(FOR LANDMARK INSTITUTIONAL
U.S. TREASURY RESERVES AND
LANDMARK INSTITUTIONAL
TAX FREE RESERVES)
Deloitte & Touche LLP
125 Summer Street, Boston, MA
02110
LEGAL COUNSEL
Bingham, Dana & Gould LLP
150 Federal Street, Boston,
MA 02110
-----------------------------
-----------------------------------------------------
-----------------------------------------------------
SHAREHOLDER SERVICING AGENTS
(See Inside of Cover)
IM/P/97/RB Printed on
Recycled Paper(LOGO)
INSTITUTIONAL (LOGO)
LANDMARK FUNDS (LOGO)
LANDMARK
INSTITUTIONAL
LIQUID RESERVES
LANDMARK
INSTITUTIONAL
U.S. TREASURY
RESERVES
LANDMARK
INSTITUTIONAL
TAX FREE RESERVES
PROSPECTUS
January 2, 1997
<PAGE> 28
Prospectus
January 2, 1997
Landmark Institutional Liquid Reserves
(A member of the Landmark(SM) Family of Funds)
Class C Shares
This Prospectus describes Class C shares of Landmark Institutional
Liquid Reserves, a diversified money market mutual fund in the Landmark Family
of Funds. Shares of the Fund are sold primarily to institutional investors.
Citibank, N.A. is the investment adviser.
- ------------------------------------------------------------------------------
UNLIKE OTHER MUTUAL FUNDS WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN
PORTFOLIOS OF SECURITIES, INSTITUTIONAL LIQUID RESERVES SEEKS ITS INVESTMENT
OBJECTIVE BY INVESTING ALL OF ITS INVESTABLE ASSETS IN CASH RESERVES PORTFOLIO.
THE PORTFOLIO HAS THE SAME INVESTMENT OBJECTIVE AND POLICIES AS THE FUND. SEE
"SPECIAL INFORMATION CONCERNING INVESTMENT STRUCTURE" ON PAGE __.
- ------------------------------------------------------------------------------
INVESTMENTS IN THE FUND ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THE FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE; HOWEVER, THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
PROSPECTIVE INVESTORS SHOULD ALSO 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.
- ------------------------------------------------------------------------------
This Prospectus concisely sets forth information about the Fund that a
prospective investor should know before investing. A Statement of Additional
Information dated January 2, 1997 (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 calling 1-212-559-7119.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
<PAGE> 29
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.
INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.
-2-
<PAGE> 30
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expense Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment Information . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Income and Distributions . . . . . . . . . . . . . . . . . . . . . . . . .
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . . .
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appendix -- Permitted Investments and
Investment Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
-3-
<PAGE> 31
PROSPECTUS SUMMARY
See the body of the Prospectus for more information on the topics
discussed in this summary.
THE FUND: This Prospectus describes Class C shares of Landmark Institutional
Liquid Reserves, a money market mutual fund. The Fund seeks its objective by
investing its investable assets in Cash Reserves Portfolio, which has the same
investment objective and policies as the Fund. There can be no assurance that
the Fund will achieve its objective.
INVESTMENT OBJECTIVE AND POLICIES: The Fund's investment objective is to
provide its shareholders with liquidity and as high a level of current income
as is consistent with the preservation of capital. Through Cash Reserves
Portfolio, the Fund invests in U.S. dollar-denominated money market obligations
with maturities of 397 days or less issued by U.S. and non-U.S. issuers.
INVESTMENT ADVISER AND DISTRIBUTOR: Citibank, N.A. ("Citibank" or the
"Adviser"), a wholly-owned subsidiary of Citicorp, is the investment adviser.
Citibank and its affiliates manage more than $83 billion in assets worldwide.
The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS" or the "Distributor")
is the distributor of shares of the Fund. See "Management."
PURCHASES AND REDEMPTIONS: Investors may purchase and redeem shares of the Fund
through a Service Agent on any Business Day. See "Purchases" and "Redemptions."
PRICING: Class C shares of the Fund are purchased and redeemed at net asset
value (normally $1.00 per share), without a sales load or redemption fees.
While there are no sales loads, shares are subject to a distribution fee.
DIVIDENDS: Dividends are declared daily and distributed monthly. Shares begin
accruing dividends on the day they are purchased. See "Net Income and
Distributions."
REINVESTMENT: Dividends may be received either in cash or in Fund shares of the
same class at net asset value. See "Net Income and Distributions."
WHO SHOULD INVEST: The Fund is designed for investors seeking liquidity,
preservation of capital and current income, and for whom growth of capital is
not a consideration. The Fund is also designed for
-4-
<PAGE> 32
investors seeking a convenient means of accumulating an interest in a
professionally managed, diversified portfolio consisting of short-term, U.S.
dollar-denominated money market obligations issued by U.S. and non-U.S.
issuers. See "Investment Information."
RISK FACTORS: There can be no assurance that the Fund will achieve its
investment objective. In addition, while the Fund intends to maintain a stable
net asset value of $1.00 per share, there can be no assurance that it will be
able to do so. Investments in high quality, short-term instruments may, in many
circumstances, result in a lower yield than would be available from investments
with a lower quality or a longer term.
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. In addition, the prices of securities of non-U.S.
issuers may be more volatile than those of comparable U.S. issuers.
Certain investment practices also may entail special risks.
Prospective investors should read "Risk Considerations" for more information
about risk factors.
EXPENSE SUMMARY
The following table summarizes estimated shareholder transaction and annual
operating expenses for Class C shares of the Fund and for the Portfolio.* 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 __ and "General Information -- Expenses" --
page __.
-5-
<PAGE> 33
<TABLE>
<CAPTION>
Institutional
Liquid
Reserves
Class C Shares
- -------------------------------------------------------------------------------
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES . . . . . . . . . . . . . . . . . . . None
ANNUAL FUND OPERATING EXPENSES,
AFTER FEE WAIVERS AND REIMBURSEMENTS
(AS A PERCENTAGE OF AVERAGE NET ASSETS):
Investment Management Fee(1) . . . . . . . . . . . . . . . . . . . . . .06%
12b-1 Fees (including service fees)(1)(2) . . . . . . . . . . . . . . . .10%
Administrative Services Fees (1) . . . . . . . . . . . . . . . . . . . .05%
Other Expenses(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .09%
Total Fund Operating Expenses(1) . . . . . . . . . . . . . . . . . . . .30%
</TABLE>
* 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. The table shows the fees paid to
various service providers after giving effect to expected voluntary
partial fee waivers.
(1) Absent fee waivers and reimbursements, investment management fees,
12b-1 fees, administrative services fees, other expenses and total
fund operating expenses would be .15%, .10%, .40%, .09% and .74%.
There can be no assurance that the fee waivers and reimbursements
reflected in the table will continue at their present levels.
(2) Fees under the 12b-1 service plan are asset-based sales charges.
Long-term shareholders in Class C shares of 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.
EXAMPLE: A shareholder would pay the following expenses on a $1,000 investment
in Class C shares, assuming redemption at the end of each period indicated
below:
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
$3 $10 $17 $38
The Example assumes a 5% annual return and that all dividends are reinvested,
and expenses are based on the Fund's fiscal year ended August 31, 1996, after
waivers and reimbursements and adjusted to reflect the expenses of Class C
shares. No Class C shares were outstanding during
-6-
<PAGE> 34
the Fund's fiscal year ended August 31, 1996. If waivers and reimbursements
were not in place, the amounts in the Example would be $8, $24, $41 and $92.
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 to provide its
shareholders with liquidity and as high a level of current income as is
consistent with the preservation of capital.
The investment objective of the Fund may be changed by its Trustees
without approval by 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 all of its
investable assets in Cash Reserves Portfolio. Cash Reserves Portfolio seeks the
same objective as the Fund by investing in high quality U.S. dollar-denominated
money market instruments. These instruments include short-term obligations of
the U.S. Government and repurchase agreements covering these obligations, bank
obligations (such as certificates of deposit, bankers' acceptances and fixed
time deposits) of U.S. and non-U.S banks and obligations issued or guaranteed
by the governments of Western Europe, Scandinavia, Australia, Japan and Canada.
The U.S. Government obligations in which the Portfolio invests include U.S.
Treasury bills, notes and bonds, and instruments issued by U.S. Government
agencies or instrumentalities. Some obligations of U.S. Government agencies and
instrumentalities are supported by the "full faith and credit" of the United
States, others by the right of the issuer to borrow from the U.S. Treasury and
others only by the credit of the agency or instrumentality. For more
information regarding the Portfolio's permitted investments and investment
practices, see the Appendix -- Permitted Investments and Investment Practices
on page __.
CERTAIN ADDITIONAL INVESTMENT POLICIES:
$1.00 NET ASSET VALUE. The Fund employs specific investment policies
and procedures designed to maintain a constant net asset value of $1.00 per
share. There can be no assurance, however, that a constant net
-7-
<PAGE> 35
asset value will be maintained on a continuing basis. See "Net Income and
Distributions."
MATURITY AND QUALITY. All of the Portfolio's investments mature or are
deemed to mature within 397 days from the date of acquisition, and the average
maturity of the investments held by the Portfolio (on a dollar-weighted basis)
is 90 days or less. All of the Portfolio's investments are in high quality
securities which have been determined by the Adviser to present minimal credit
risks. To meet the Portfolio's high quality standards a security must be rated
in the highest rating category for short-term obligations by at least two
nationally recognized statistical rating organizations (each, an "NRSRO")
assigning a rating to the security or issuer or, if only one NRSRO assigns a
rating, that NRSRO or, in the case of an investment which is not rated, of
comparable quality as determined by the Adviser. Investments in high quality,
short-term instruments may, in many circumstances, result in a lower yield than
would be available from investments in instruments with a lower quality or a
longer term.
PERMITTED INVESTMENTS. For more information regarding permitted
investments and investment practices, see the Appendix -- Permitted Investments
and Investment Practices on page __. The Fund will not necessarily invest or
engage in each of the investments and investment practices in the Appendix 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 and the Portfolio. Certain of these specific restrictions
may not be changed without shareholder approval. If a percentage or rating
restriction (other than a restriction as to borrowing) is adhered to at the
time an investment is made, a later change in percentage or rating resulting
from changes in the Portfolio's securities will not be a violation of policy.
BROKERAGE TRANSACTIONS. The primary consideration in placing the
Portfolio's security transactions with broker-dealers for execution is to
obtain and maintain the availability of execution at the most favorable prices
and in the most effective manner possible.
RISK CONSIDERATIONS
The risks of investing in the Fund vary depending upon the nature of the
securities held, and the investment practices employed, on its behalf. Certain
of these risks are described below.
-8-
<PAGE> 36
"CONCENTRATION" IN BANK OBLIGATIONS. The Portfolio invests more than
25% of its assets, and may invest up to 100% of its assets, in bank
obligations. This concentration policy is fundamental, and may not be changed
without the consent of the Portfolio's investors. Banks are subject to
extensive governmental regulation which may limit both the amounts and types of
loans and other financial commitments which may be made and interest rates and
fees which may be charged. The profitability of this industry is largely
dependent upon the availability and cost of capital funds for the purpose of
financing lending operations under prevailing money market conditions. Also,
general economic conditions play an important part in the operation of this
industry and exposure to credit losses arising from possible financial
difficulties of borrowers might affect a bank's ability to meet its obligations
under a letter of credit or guarantee.
NON-U.S. SECURITIES. Investors in the Fund should be aware that
investments in non-U.S. securities involve risks relating to political, social
and economic developments abroad, as well as risks resulting from the
differences between the regulations to which U.S. and non-U.S. issuers and
markets are subject. These risks may include expropriation, confiscatory
taxation, withholding taxes on dividends and interest, limitations on the use
or transfer of Portfolio assets and political or social instability. In
addition, non-U.S. companies may not be subject to accounting standards or
governmental supervision comparable to U.S. companies, and there may be less
public information about their operations. Non-U.S. markets may be less liquid
and more volatile than U.S. markets, and may offer less protection to investors
such as the Portfolio.
INVESTMENT PRACTICES. Certain of the investment practices employed for
the Portfolio may entail certain risks. See the Appendix -- Permitted
Investments and Investment Practices on page __.
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
beneficial interests 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
-9-
<PAGE> 37
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, LFBDS.
The investment objective of the Fund may be changed by its Trustees
without the approval of 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 either 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 Investment Company Act of 1940 (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 an
"in kind" distribution 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 in kind distribution 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.
-10-
<PAGE> 38
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 such shareholders. The Fund will
vote the shares held by Fund shareholders who do not give voting instructions
in the same proportion as the shares of Fund shareholders who do give voting
instructions. 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 interest 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, the Trustees
would determine the best course of action.
For a description of the management of the Portfolio, see "Management"
- -- page __. For descriptions of the expenses of the Portfolio, see "Management"
and "General Information -- Expenses" -- page __. For a description of the
investment objective, policies and restrictions of the Portfolio, see
"Investment Information" -- page __.
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 3:00
-11-
<PAGE> 39
p.m., Eastern time, by adding the market value of all securities and other
assets attributable to the class of shares of the Fund (including its interest
in the Portfolio), then subtracting the liabilities charged to that class, and
then dividing the result by the number of outstanding shares of that class. The
amortized cost method of valuing Portfolio securities is used in order to
stabilize the net asset value of shares of each class of the Fund at $1.00;
however, there can be no assurance that the Fund's net asset value will always
remain at $1.00 per share. The net asset value per share is effective for
orders received and accepted by the Distributor prior to its calculation.
The amortized cost method involves valuing a security at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium. Although the amortized cost method provides certainty in valuation, it
may result in periods during which the stated value of a security is higher or
lower than the price the Portfolio would receive if the security were sold.
PURCHASES
Class C shares are offered continuously and may be purchased on any
Business Day at the public offering price. Shares may be purchased through
certain financial institutions (which may include banks), securities dealers
and other industry professionals (called Service Agents) that have entered into
service agreements with the Distributor. Customers of Citicorp Investment
Services (CIS), a Service Agent, will purchase shares through an account with
CIS and should contact CIS at 1-800-846-5200 (customers in New York City may
call 212-820-2380) for details. Customers of other Service Agents should
contact those Service Agents for information on purchases. Each Service 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 Service Agent.
Each Service 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.
The public offering price of Class C shares is the net asset value
(normally $1.00 per share) next determined after an order in proper form is
received and accepted by the Transfer Agent. The Fund and the Transfer Agent
reserve the right to reject any purchase order and to suspend the offering of
Fund shares for a period of time. Each Service Agent is responsible for
transmitting promptly orders of its customers.
-12-
<PAGE> 40
Service Agents will not transmit purchase orders to the Distributor
until they have 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.
REDEMPTIONS
Fund shares may be redeemed at their net asset value (normally $1.00
per share) next determined after a redemption request in proper form is
received by the Transfer Agent. Each Service Agent is responsible for the
prompt transmission of redemption orders to the Fund on behalf of its
customers. A Service Agent may establish requirements or procedures regarding
submission of redemption requests by its customers that are different from
those described below. Investors should consult their Service Agents for
details. If a redeeming shareholder owns shares of more than one class, shares
will be redeemed by order of shares of the class with the highest total expense
ratio first and then in descending order by expense ratio, unless the
shareholder specifically requests otherwise.
REDEMPTIONS BY MAIL. Shareholders may redeem Fund shares by sending
written instructions in proper form (as determined by the Transfer Agent or a
shareholder's Service Agent) to the Transfer Agent or, if shareholders are
customers of a Service Agent, their Service Agent. Shareholders are
responsible for ensuring that a request for redemption is in proper form.
REDEMPTIONS BY TELEPHONE. Shareholders may redeem or exchange Fund
shares by telephone, if their account applications so permit, by calling the
Transfer Agent or, if they are customers of a Service Agent, their Service
Agent. 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 Service 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, the Transfer Agent or the
Service
-13-
<PAGE> 41
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 Business Day the redemption is effected, 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" in the
Statement of Additional Information regarding the Fund's right to pay the
redemption price in kind with securities (instead of cash).
Questions about redemption requirements should be referred to the
Transfer Agent or, for customers of a Service Agent, their Service 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.
NET INCOME AND DISTRIBUTIONS
The net income of the Fund is determined each Business Day (and on
such other days as is necessary in order to comply with the 1940 Act). This
determination is made once during each such day as of 3:00 p.m., Eastern time.
All the net income of the Fund is declared as a dividend to shareholders of
record at the time of such determination. Shares begin accruing dividends on
the day they are purchased, and accrue dividends up to and including the day
prior to redemption. Dividends are distributed monthly on or prior to the last
Business Day of each month. Unless a shareholder elects to receive dividends in
cash, dividends are distributed in the form of full and fractional additional
Class C shares at the rate of one Class C share for each one dollar of dividend
income.
Since the net income of the Fund is declared as a dividend each time
the net income of the Fund is determined, the net asset value per share of each
class of shares of the Fund is expected to remain at $1.00 per share
immediately after each such determination and dividend declaration. Any
increase in the value of a shareholder's investment in the Fund, representing
the reinvestment of dividend income, is reflected by an increase in the number
of shares of the Fund in the shareholder's account.
-14-
<PAGE> 42
It is expected that the Fund will have a positive net income at the
time of each determination thereof. If for any reason the Fund's net income is
a negative amount, which could occur, for instance, upon default by an issuer
of a portfolio security, the Fund would first offset the negative amount with
respect to each shareholder account from the dividends declared during the
month with respect to those accounts. If and to the extent that negative net
income exceeds declared dividends at the end of the month, the Fund would
reduce the number of outstanding Fund shares by treating each shareholder as
having contributed to the capital of the Fund that number of full and
fractional shares in the shareholder's account which represents the
shareholder's share of the amount of such excess. Each shareholder would be
deemed to have agreed to such contribution in these circumstances by investment
in the Fund.
MANAGEMENT
TRUSTEES AND OFFICERS: The Fund is supervised by the Board of Trustees of
Landmark Institutional Trust. The Portfolio is supervised by its own 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 $83 billion in assets worldwide. Citibank is a
wholly-owned subsidiary of Citicorp.
Citibank manages the assets of the Portfolio pursuant to an Investment
Advisory Agreement. Subject to policies set by the Portfolio's Trustees,
Citibank makes investment decisions for the Portfolio.
ADVISORY FEES. For its services under the Investment Advisory
Agreement, the Adviser receives investment advisory fees, which are accrued
daily and paid monthly, of 0.15% of the Portfolio's average daily net assets on
an annualized basis for the Portfolio's then-current fiscal year. The Adviser
has voluntarily agreed to waive a portion of its investment advisory fee.
-15-
<PAGE> 43
For the fiscal year ended August 31, 1996, the investment advisory
fees paid to Citibank from Cash Reserves Portfolio were, after waiver, 0.06%
of the Portfolio's average daily net assets for that fiscal year.
BANKING RELATIONSHIPS. Citibank and its affiliates may have deposit,
loan and other relationships with the issuers of securities purchased on behalf
of the Portfolio, 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 and the Portfolio 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 or the Portfolio. Citibank
believes that its services under the Investment Advisory Agreement and the
activities performed by it or its affiliates as Service Agents and
sub-administrator are not underwriting and are consistent with the
Glass-Steagall Act and other relevant federal and state laws. However, there is
no controlling precedent regarding the performance of the combination of
investment advisory, shareholder servicing and sub-administrative activities by
banks. State laws on this issue may differ from applicable federal law and
banks and financial institutions may be required to register as dealers
pursuant to state securities laws. Changes in either federal or state statutes
or regulations, or in their interpretations, could prevent Citibank or its
affiliates from continuing to perform these services. If Citibank or its
affiliates were to be prevented from acting as the Adviser, sub- administrator
or a Service Agent, the Fund or Portfolio 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.
ADMINISTRATORS: LFBDS provides certain administrative services to the Fund and
Signature Financial Group (Cayman), Ltd. ("SFG") provides certain
administrative services to the Portfolio, in each case 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 Portfolio. These Trustees and
officers may be directors, officers or employees of LFBDS, SFG or their
affiliates.
-16-
<PAGE> 44
For these services, the Administrators receive fees accrued daily and
paid monthly of 0.35% 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.
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 or SFG. Citibank's
compensation as sub-administrator is paid by LFBDS or SFG.
TRANSFER AGENT, CUSTODIAN AND FUND ACCOUNTANT: State Street Bank and Trust
Company (or its affiliate State Street Canada, Inc.) acts as transfer agent and
dividend disbursing agent for the Fund. State Street (or its affiliate State
Street Canada, Inc.) acts as the custodian of the Fund's and the Portfolio's
assets. Securities held for the Portfolio may be held by a sub-custodian bank
approved by the Portfolio's Trustees. State Street also 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 the Fund's shares. Under
a Service Plan which has been adopted in accordance with Rule 12b-1 under the
1940 Act, the Fund may pay monthly fees at an annual rate not to exceed 0.10%
of the average daily net assets attributable to Class C shares of the Fund.
These fees may be used to make payments to the Distributor for distribution
services, and to Service Agents and others in respect of the sale of shares of
the Fund, and to make payments for advertising, marketing or other promotional
activity, and payments for preparation, printing and distribution of
prospectuses, statements of additional information and reports for recipients
other than regulators and existing shareholders. The Fund also may make
payments to the Distributor, Service Agents and others for providing personal
service or the maintenance of shareholder accounts. The Fund and the
Distributor provide to the Trustees quarterly a written report of amounts
expended pursuant to the Service Plan and the purposes for which the
expenditures were made.
During the period they are in effect, the Service Plan and related
Distribution Agreement obligate the Fund to pay fees to the Distributor,
-17-
<PAGE> 45
Service Agents and others as compensation for their services, not as
reimbursement for specific expenses incurred. Thus, even if their expenses
exceed the fees provided for under the Service Plan, the Fund will not be
obligated to pay more than those fees and, if their expenses are less than the
fees paid to them, they will realize a profit. The Fund will pay the fees to
the Distributor, Service Agents and others until the Service Plan or
Distribution Agreement is terminated or not renewed. In that event, the
Distributor's or Service Agent's expenses in excess of fees received or accrued
through the termination date will be the Distributor's or Service Agent's sole
responsibility and not obligations of the Fund.
Class C shares have exclusive voting rights with respect to the
Service Plan.
Securities dealers and other financial institutions may receive
different compensation with respect to sales of different classes of Fund
shares. Service Agents which are banks or financial institutions will receive
transaction fees that are equal to the commissions paid to securities brokers.
The Distributor, at its expense, may from time to time make payments for
marketing, promotional or related expenses to brokers and/or dealers who engage
in marketing efforts on behalf of the Fund. The amounts of such payments will
be determined by LFBDS in its sole discretion and may vary among different
brokers and/or dealers. In some instances, these incentives may be offered to
certain brokers who have sold or may sell significant number of shares of the
Fund. From time to time the Distributor may make payments for distribution
and/or shareholder servicing activities out of its past profits and any other
sources available to it.
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 so that it will not be liable for
any federal income or excise taxes.
Shareholders are required to pay federal income tax on any dividends
and other distributions received. Generally, distributions from the Fund's net
investment income and short-term capital gains will be taxed as ordinary
income. Distributions from long-term net capital gains will be taxed as such
regardless of how long the shares of the Fund have been held. Dividends and
distributions are treated in the same manner for
-18-
<PAGE> 46
federal tax purposes whether they are paid in cash or as additional shares.
Distributions derived from interest on U.S. Government obligations may
be exempt from state and local taxes in certain states. Early each year, the
Fund will notify its shareholders of the amount and tax status of distributions
paid to shareholders for the preceding year.
The account application asks each new shareholder to certify that the
shareholder's Social Security or taxpayer identification number is correct and
that the shareholder is not subject to 31% backup withholding for failing to
report income to the IRS. The Fund may be required to withhold (and pay over to
the IRS for the shareholder's credit) 31% of certain distributions paid to
shareholders who fail to provide this information or otherwise violate IRS
regulations.
Investors 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 and 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.
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 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.
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 seven-day period (which period is stated in any
such advertisement or communication). This income is then annualized; that is,
the amount of income generated by the investment over that period is assumed to
be generated each week over a 365-day period and is shown as a percentage of
the investment. The "effective yield" is calculated similarly, but when
annualized the income earned by
-19-
<PAGE> 47
the investment during that seven-day period is assumed to be reinvested. The
effective yield is slightly higher than the yield because of the compounding
effect of this assumed reinvestment. The Fund may also provide yield and
effective yield quotations for longer periods.
Of course, any fees charged by a shareholder's Service Agent will
reduce that shareholder's net return on 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 diversified series of Landmark Institutional
Trust, which is a Massachusetts business trust which was organized on July 8,
1992. The Fund also is an open-end management investment company registered
under the 1940 Act.
Under the 1940 Act, a diversified series or diversified investment
company 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 trust organized under the laws of the State of New
York. The Declaration of Trust of the Portfolio provides that the Fund and
other entities investing in the Portfolio are each liable for all obligations
of the Portfolio. However, it is not expected that the liabilities of the
Portfolio would ever exceed its assets.
VOTING AND OTHER RIGHTS: Landmark Institutional 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 Fund or
-20-
<PAGE> 48
class, only shares of that particular Fund or class are entitled to vote. The
Trust currently has two series.
The Fund has authority to issue multiple classes of shares, including
the Class C shares described in this Prospectus. All classes are sold without
sales charges or redemption fees. The other classes of shares may be subject to
different distribution fees from Class C shares; this may affect performance.
For more information about the other classes of shares investors may call
1-212-559-7119 or consult their Service Agents. All classes of shares may not
be available through an investor's Service Agent. Only Class A shares were
outstanding during the Fund's fiscal year ended August 31, 1996.
At any meeting of shareholders of the Fund, a Service Agent may vote
any shares of which it is the holder of record and for which it does not
receive voting instructions proportionately in accordance with instructions it
receives for all other shares of which that Service Agent is the holder of
record.
The Trust'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 C shares than for Class A shares and higher than for
Class F shares.
CERTIFICATES: The Fund's Transfer Agent maintains a share register for
shareholders of record. 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 Service Agents and tax and retirement advisers.
EXPENSES: For the fiscal year ended August 31, 1996, total operating expenses
of the Fund, after allocating to the Fund its share of the Portfolio's expenses
and after giving effect to fee waivers or reimbursements, were .17% of
the Fund's average daily net assets for that
-21-
<PAGE> 49
fiscal year. No Class C shares were outstanding during that fiscal year.
Expenses of Class C shares will generally be higher than those of Class A
shares and lower than those of Class F shares. All fee waivers are voluntary
and may be reduced or terminated at any time.
COUNSEL AND INDEPENDENT AUDITORS: Bingham, Dana & Gould LLP, Boston,
Massachusetts, is counsel for the Fund. Price Waterhouse LLP, Boston,
Massachusetts, serves as independent auditor for the Fund.
------------------------
The Statement of Additional Information dated the date hereof contains
more detailed information about the Fund and the Portfolio, including
information related to (i) investment policies and restrictions, (ii) the
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.
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.
-22-
<PAGE> 50
APPENDIX
PERMITTED INVESTMENTS AND
INVESTMENT PRACTICES
TREASURY RECEIPTS. The Portfolio may invest in Treasury Receipts,
which are unmatured interest coupons of U.S. Treasury bonds and notes which
have been separated and resold in a custodial receipt program administered by
the U.S. Treasury.
COMMERCIAL PAPER. The Portfolio may invest in commercial paper, which
is unsecured debt of corporations usually maturing in 270 days or less from its
date of issuance.
ASSET-BACKED SECURITIES. The Portfolio may invest in asset-backed
securities, which represent fractional interests in underlying pools of assets,
such as car installment loans or credit card receivables. The rate of return on
asset-backed securities may be affected by prepayment of the underlying loans
or receivables. Reinvestment of principal may occur at higher or lower rates
than the original yield.
REPURCHASE AGREEMENTS. The Portfolio may enter into repurchase
agreements. Repurchase agreements are transactions in which an institution
sells the Portfolio a security at one price, subject to the Portfolio'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.
LENDING OF PORTFOLIO SECURITIES. Consistent with applicable regulatory
requirements and in order to generate additional income, the Portfolio 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 Portfolio would not exceed 33 1/3% of the
Portfolio's net assets.
In the event of the bankruptcy of the other party to a securities loan
or a repurchase agreement, the Portfolio could experience delays in recovering
either the securities lent or cash. To the extent that, in the meantime, the
value of the securities lent have increased or the value of the securities
purchased have decreased, the Portfolio could experience a loss.
-23-
<PAGE> 51
PRIVATE PLACEMENTS AND ILLIQUID INVESTMENTS. The Portfolio may invest
up to 10% of its net assets in securities for which there is no readily
available market. These illiquid securities may include privately placed
restricted securities for which no institutional market exists. The absence of
a trading market can make it difficult to ascertain a market value for illiquid
investments. Disposing of illiquid investments may involve time-consuming
negotiation and legal expenses, and it may be difficult or impossible for the
Portfolio to sell them promptly at an acceptable price.
-24-
<PAGE> 52
LANDMARK FUNDS
MONEY MARKET FUNDS:
Cash Reserves
Premium Liquid Reserves
Institutional Liquid Reserves
U.S. Treasury Reserves
Premium U.S. Treasury Reserves
Institutional U.S. Treasury Reserves
Tax Free Reserves
Institutional Tax Free Reserves
California Tax Free Reserves
Connecticut Tax Free Reserves
New York Tax Free Reserves
STOCK & BOND FUNDS:
U.S. Government Income Fund
Intermediate Income Fund
National Tax Free Income Fund
New York Tax Free Income Fund
Balanced Fund
Equity Fund
Small Cap Equity Fund
International Equity Fund
Emerging Asian Markets Equity Fund
-25-
<PAGE> 53
TRUSTEES AND OFFICERS
Philip W. Coolidge*, President
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
SECRETARY
Linda T. Gibson*
TREASURER
John R. Elder*
*Affiliated Person of Administrator and Distributor
INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043
ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679
TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
AUDITORS
Price Waterhouse LLP
160 Federal Street, Boston, MA 02110
LEGAL COUNSEL
Bingham, Dana & Gould LLP
150 Federal Street, Boston, MA 02110
LANDMARK
INSTITUTIONAL
LIQUID RESERVES
CLASS C SHARES
PROSPECTUS
JANUARY 2, 1997
-26-
<PAGE> 54
Prospectus
January, 1997
Landmark Institutional Liquid Reserves
(A member of the Landmark(SM) Family of Funds)
Class F Shares
This Prospectus describes Class F shares of Landmark Institutional
Liquid Reserves, a diversified money market mutual fund in the Landmark Family
of Funds. Shares of the Fund are sold primarily to institutional investors.
Citibank, N.A. is the investment adviser.
- ------------------------------------------------------------------------------
UNLIKE OTHER MUTUAL FUNDS WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN
PORTFOLIOS OF SECURITIES, INSTITUTIONAL LIQUID RESERVES SEEKS ITS INVESTMENT
OBJECTIVE BY INVESTING ALL OF ITS INVESTABLE ASSETS IN CASH RESERVES PORTFOLIO.
THE PORTFOLIO HAS THE SAME INVESTMENT OBJECTIVE AND POLICIES AS THE FUND. SEE
"SPECIAL INFORMATION CONCERNING INVESTMENT STRUCTURE" ON PAGE __.
- ------------------------------------------------------------------------------
INVESTMENTS IN THE FUND ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THE FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE; HOWEVER, THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
PROSPECTIVE INVESTORS SHOULD ALSO 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.
- ------------------------------------------------------------------------------
This Prospectus concisely sets forth information about the Fund that a
prospective investor should know before investing. A Statement of Additional
Information dated January 2, 1997 (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 calling 1-212-559-7119.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
<PAGE> 55
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.
INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE
REFERENCE.
-2-
<PAGE> 56
TABLE OF CONTENTS
Prospectus Summary.........................
Expense Summary............................
Investment Information.....................
Risk Considerations........................
Valuation of Shares........................
Purchases..................................
Redemptions................................
Net Income and Distributions...............
Management.................................
Tax Matters................................
Performance Information....................
General Information........................
Appendix -- Permitted Investments and
Investment Practices.................
-3-
<PAGE> 57
PROSPECTUS SUMMARY
See the body of the Prospectus for more information on the topics
discussed in this summary.
THE FUND: This Prospectus describes Class F shares of Landmark Institutional
Liquid Reserves, a money market mutual fund. The Fund seeks its objective by
investing its investable assets in Cash Reserves Portfolio, which has the same
investment objective and policies as the Fund. There can be no assurance that
the Fund will achieve its objective.
INVESTMENT OBJECTIVE AND POLICIES: The Fund's investment objective is to
provide its shareholders with liquidity and as high a level of current income
as is consistent with the preservation of capital. Through Cash Reserves
Portfolio, the Fund invests in U.S. dollar-denominated money market obligations
with maturities of 397 days or less issued by U.S. and non-U.S. issuers.
INVESTMENT ADVISER AND DISTRIBUTOR: Citibank, N.A. ("Citibank" or the
"Adviser"), a wholly-owned subsidiary of Citicorp, is the investment adviser.
Citibank and its affiliates manage more than $83 billion in assets worldwide.
The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS" or the "Distributor")
is the distributor of shares of the Fund. See "Management."
PURCHASES AND REDEMPTIONS: Investors may purchase and redeem shares of the Fund
through a Service Agent on any Business Day. See "Purchases" and "Redemptions."
PRICING: Class F shares of the Fund are purchased and redeemed at net asset
value (normally $1.00 per share), without a sales load or redemption fees.
While there are no sales loads, shares are subject to a distribution fee.
DIVIDENDS: Dividends are declared daily and distributed monthly. Shares begin
accruing dividends on the day they are purchased. See "Net Income and
Distributions."
REINVESTMENT: Dividends may be received either in cash or in Fund shares of the
same class at net asset value. See "Net Income and Distributions."
WHO SHOULD INVEST: The Fund is designed for investors seeking liquidity,
preservation of capital and current income, and for whom
-4-
<PAGE> 58
growth of capital is not a consideration. The Fund is also designed for
investors seeking a convenient means of accumulating an interest in a
professionally managed, diversified portfolio consisting of short-term, U.S.
dollar-denominated money market obligations issued by U.S. and non-U.S.
issuers. See "Investment Information."
RISK FACTORS: There can be no assurance that the Fund will achieve its
investment objective. In addition, while the Fund intends to maintain a stable
net asset value of $1.00 per share, there can be no assurance that it will be
able to do so. Investments in high quality, short-term instruments may, in many
circumstances, result in a lower yield than would be available from investments
with a lower quality or a longer term.
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. In addition, the prices of securities of non-U.S.
issuers may be more volatile than those of comparable U.S. issuers.
Certain investment practices also may entail special risks.
Prospective investors should read "Risk Considerations" for more information
about risk factors.
EXPENSE SUMMARY
The following table summarizes estimated shareholder transaction and annual
operating expenses for Class F shares of the Fund and for the Portfolio.* 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 __ and "General Information -- Expenses" --
page __.
-5-
<PAGE> 59
<TABLE>
<CAPTION>
Institutional
Liquid Reserves
Class F Shares
- --------------------------------------------------------------------------------
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES.................... None
ANNUAL FUND OPERATING EXPENSES,
AFTER FEE WAIVERS AND REIMBURSEMENTS
(AS A PERCENTAGE OF AVERAGE NET ASSETS):
Investment Management Fee(1)........................ .06%
12b-1 Fees (including service fees)(1)(2)........... .80%
Administrative Services Fees(1)..................... .05%
Other Expenses(1)................................... .09%
Total Fund Operating Expenses(1).................... 1.00%
</TABLE>
* 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. The table shows the fees paid to
various service providers after giving effect to expected voluntary
partial fee waivers.
(1) Absent fee waivers and reimbursements, investment management fees,
12b-1 fees, administrative services fees, other expenses and total
fund operating expenses would be .15%, .80%, .40%, .09% and 1.44%.
There can be no assurance that the fee waivers and reimbursements
reflected in the table will continue at their present levels.
(2) Fees under the 12b-1 service plan are asset-based sales charges.
Long-term shareholders in Class F shares of 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.
EXAMPLE: A shareholder would pay the following expenses on a $1,000 investment
in Class F shares, assuming redemption at the end of each period indicated
below:
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
$10 $32 $55 $122
The Example assumes a 5% annual return and that all dividends are reinvested,
and expenses are based on the Fund's fiscal year ended August 31, 1996, after
waivers and reimbursements and adjusted to reflect the
-6-
<PAGE> 60
expenses of Class F shares. No Class F shares were outstanding during the
Fund's fiscal year ended August 31, 1996. If waivers and reimbursements were
not in place, the amounts in the Example would be $15, $46, $79 and $142. 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 to provide its
shareholders with liquidity and as high a level of current income as is
consistent with the preservation of capital.
The investment objective of the Fund may be changed by its Trustees
without approval by 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 all of its
investable assets in Cash Reserves Portfolio. Cash Reserves Portfolio seeks the
same objective as the Fund by investing in high quality U.S. dollar-denominated
money market instruments. These instruments include short-term obligations of
the U.S. Government and repurchase agreements covering these obligations, bank
obligations (such as certificates of deposit, bankers' acceptances and fixed
time deposits) of U.S. and non-U.S banks and obligations issued or guaranteed
by the governments of Western Europe, Scandinavia, Australia, Japan and Canada.
The U.S. Government obligations in which the Portfolio invests include U.S.
Treasury bills, notes and bonds, and instruments issued by U.S. Government
agencies or instrumentalities. Some obligations of U.S. Government agencies and
instrumentalities are supported by the "full faith and credit" of the United
States, others by the right of the issuer to borrow from the U.S. Treasury and
others only by the credit of the agency or instrumentality. For more
information regarding the Portfolio's permitted investments and investment
practices, see the Appendix -- Permitted Investments and Investment Practices
on page __.
-7-
<PAGE> 61
CERTAIN ADDITIONAL INVESTMENT POLICIES
$1.00 NET ASSET VALUE. The Fund employs specific investment policies
and procedures designed to maintain a constant net asset value of $1.00 per
share. There can be no assurance, however, that a constant net asset value will
be maintained on a continuing basis. See "Net Income and Distributions."
MATURITY AND QUALITY. All of the Portfolio's investments mature or are
deemed to mature within 397 days from the date of acquisition, and the average
maturity of the investments held by the Portfolio (on a dollar-weighted basis)
is 90 days or less. All of the Portfolio's investments are in high quality
securities which have been determined by the Adviser to present minimal credit
risks. To meet the Portfolio's high quality standards a security must be rated
in the highest rating category for short-term obligations by at least two
nationally recognized statistical rating organizations (each, an "NRSRO")
assigning a rating to the security or issuer or, if only one NRSRO assigns a
rating, that NRSRO or, in the case of an investment which is not rated, of
comparable quality as determined by the Adviser. Investments in high quality,
short-term instruments may, in many circumstances, result in a lower yield than
would be available from investments in instruments with a lower quality or a
longer term.
PERMITTED INVESTMENTS. For more information regarding permitted
investments and investment practices, see the Appendix -- Permitted Investments
and Investment Practices on page __. The Fund will not necessarily invest or
engage in each of the investments and investment practices in the Appendix 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 and the Portfolio. Certain of these specific restrictions
may not be changed without shareholder approval. If a percentage or rating
restriction (other than a restriction as to borrowing) is adhered to at the
time an investment is made, a later change in percentage or rating resulting
from changes in the Portfolio's securities will not be a violation of policy.
BROKERAGE TRANSACTIONS. The primary consideration in placing the
Portfolio'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.
-8-
<PAGE> 62
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.
"CONCENTRATION" IN BANK OBLIGATIONS. The Portfolio invests more than
25% of its assets, and may invest up to 100% of its assets, in bank
obligations. This concentration policy is fundamental, and may not be changed
without the consent of the Portfolio's investors. Banks are subject to
extensive governmental regulation which may limit both the amounts and types of
loans and other financial commitments which may be made and interest rates and
fees which may be charged. The profitability of this industry is largely
dependent upon the availability and cost of capital funds for the purpose of
financing lending operations under prevailing money market conditions. Also,
general economic conditions play an important part in the operation of this
industry and exposure to credit losses arising from possible financial
difficulties of borrowers might affect a bank's ability to meet its obligations
under a letter of credit or guarantee.
NON-U.S. SECURITIES. Investors in the Fund should be aware that
investments in non-U.S. securities involve risks relating to political, social
and economic developments abroad, as well as risks resulting from the
differences between the regulations to which U.S. and non-U.S. issuers and
markets are subject. These risks may include expropriation, confiscatory
taxation, withholding taxes on dividends and interest, limitations on the use
or transfer of Portfolio assets and political or social instability. In
addition, non-U.S. companies may not be subject to accounting standards or
governmental supervision comparable to U.S. companies, and there may be less
public information about their operations. Non-U.S. markets may be less liquid
and more volatile than U.S. markets, and may offer less protection to investors
such as the Portfolio.
INVESTMENT PRACTICES. Certain of the investment practices employed for
the Portfolio may entail certain risks. See the Appendix -- Permitted
Investments and Investment Practices on page __.
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
-9-
<PAGE> 63
the Fund. In addition to selling beneficial interests 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,
LFBDS.
The investment objective of the Fund may be changed by its Trustees
without the approval of 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 either 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 Investment Company Act of 1940 (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 an
"in kind" distribution 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 in kind distribution may
-10-
<PAGE> 64
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 such shareholders. The Fund will
vote the shares held by Fund shareholders who do not give voting instructions
in the same proportion as the shares of Fund shareholders who do give voting
instructions. 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 interest 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, the Trustees
would determine the best course of action.
For a description of the management of the Portfolio, see "Management"
- -- page __. For descriptions of the expenses of the Portfolio, see "Management"
and "General Information -- Expenses" -- page __. For a description of the
investment objective, policies and restrictions of the Portfolio, see
"Investment Information" -- page __.
-11-
<PAGE> 65
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 3:00 p.m.,
Eastern time, by adding the market value of all securities and other assets
attributable to the class of shares of the Fund (including its interest in the
Portfolio), then subtracting the liabilities charged to that class, and then
dividing the result by the number of outstanding shares of that class. The
amortized cost method of valuing Portfolio securities is used in order to
stabilize the net asset value of shares of each class of the Fund at $1.00;
however, there can be no assurance that the Fund's net asset value will always
remain at $1.00 per share. The net asset value per share is effective for
orders received and accepted by the Distributor prior to its calculation.
The amortized cost method involves valuing a security at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium. Although the amortized cost method provides certainty in valuation, it
may result in periods during which the stated value of a security is higher or
lower than the price the Portfolio would receive if the security were sold.
PURCHASES
Class F shares are offered continuously and may be purchased on any
Business Day at the public offering price. Shares may be purchased through
certain financial institutions (which may include banks), securities dealers
and other industry professionals (called Service Agents) that have entered into
service agreements with the Distributor. Customers of Citicorp Investment
Services (CIS), a Service Agent, will purchase shares through an account with
CIS and should contact CIS at 1-800-846-5200 (customers in New York City may
call 212-820-2380) for details. Customers of other Service Agents should
contact those Service Agents for information on purchases. Each Service 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 Service Agent.
Each Service Agent has agreed to transmit to its customers who are
-12-
<PAGE> 66
shareholders of the Fund appropriate prior written disclosure of any fees that
it may charge them directly.
The public offering price of Class F shares is the net asset value
(normally $1.00 per share) next determined after an order in proper form is
received and accepted by the Transfer Agent. The Fund and the Transfer Agent
reserve the right to reject any purchase order and to suspend the offering of
Fund shares for a period of time. Each Service Agent is responsible for
transmitting promptly orders of its customers.
Service Agents will not transmit purchase orders to the Distributor
until they have 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.
REDEMPTIONS
Fund shares may be redeemed at their net asset value (normally $1.00
per share) next determined after a redemption request in proper form is
received by the Transfer Agent. Each Service Agent is responsible for the
prompt transmission of redemption orders to the Fund on behalf of its
customers. A Service Agent may establish requirements or procedures regarding
submission of redemption requests by its customers that are different from
those described below. Investors should consult their Service Agents for
details. If a redeeming shareholder owns shares of more than one class, shares
will be redeemed by order of shares of the class with the highest total expense
ratio first and then in descending order by expense ratio, unless the
shareholder specifically requests otherwise.
REDEMPTIONS BY MAIL. Shareholders may redeem Fund shares by sending
written instructions in proper form (as determined by the Transfer Agent or a
shareholder's Service Agent) to the Transfer Agent or, if shareholders are
customers of a Service Agent, their Service Agent. Shareholders are
responsible for ensuring that a request for redemption is in proper form.
REDEMPTIONS BY TELEPHONE. Shareholders may redeem or exchange Fund
shares by telephone, if their account applications so permit, by calling the
Transfer Agent or, if they are customers of a Service Agent, their Service
Agent. During periods of drastic economic or market
-13-
<PAGE> 67
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 Service 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, the Transfer
Agent or the Service 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 Business Day the redemption is effected, 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" in the
Statement of Additional Information regarding the Fund's right to pay the
redemption price in kind with securities (instead of cash).
Questions about redemption requirements should be referred to the
Transfer Agent or, for customers of a Service Agent, their Service 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.
NET INCOME AND DISTRIBUTIONS
The net income of the Fund is determined each Business Day (and on
such other days as is necessary in order to comply with the 1940 Act). This
determination is made once during each such day as of 3:00 p.m., Eastern time.
All the net income of the Fund is declared as a dividend to shareholders of
record at the time of such determination. Shares begin accruing dividends on
the day they are purchased, and accrue dividends up to and including the day
prior to redemption. Dividends are distributed monthly on or prior to the last
Business Day of each month. Unless a shareholder elects to receive dividends in
cash, dividends are distributed
-14-
<PAGE> 68
in the form of full and fractional additional Class F shares at the rate of one
Class F share for each one dollar of dividend income.
Since the net income of the Fund is declared as a dividend each time
the net income of the Fund is determined, the net asset value per share of each
class of shares of the Fund is expected to remain at $1.00 per share
immediately after each such determination and dividend declaration. Any
increase in the value of a shareholder's investment in the Fund, representing
the reinvestment of dividend income, is reflected by an increase in the number
of shares of the Fund in the shareholder's account.
It is expected that the Fund will have a positive net income at the
time of each determination thereof. If for any reason the Fund's net income is
a negative amount, which could occur, for instance, upon default by an issuer
of a portfolio security, the Fund would first offset the negative amount with
respect to each shareholder account from the dividends declared during the
month with respect to those accounts. If and to the extent that negative net
income exceeds declared dividends at the end of the month, the Fund would
reduce the number of outstanding Fund shares by treating each shareholder as
having contributed to the capital of the Fund that number of full and
fractional shares in the shareholder's account which represents the
shareholder's share of the amount of such excess. Each shareholder would be
deemed to have agreed to such contribution in these circumstances by investment
in the Fund.
MANAGEMENT
TRUSTEES AND OFFICERS: The Fund is supervised by the Board of Trustees of
Landmark Institutional Trust. The Portfolio is supervised by its own 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 $83
-15-
<PAGE> 69
billion in assets worldwide. Citibank is a wholly-owned subsidiary of Citicorp.
Citibank manages the assets of the Portfolio pursuant to an Investment
Advisory Agreement. Subject to policies set by the Portfolio's Trustees,
Citibank makes investment decisions for the Portfolio.
ADVISORY FEES. For its services under the Investment Advisory
Agreement, the Adviser receives investment advisory fees, which are accrued
daily and paid monthly, of 0.15% of the Portfolio's average daily net assets on
an annualized basis for the Portfolio's then-current fiscal year. The Adviser
has voluntarily agreed to waive a portion of its investment advisory fee.
For the fiscal year ended August 31, 1996, the investment advisory
fees paid to Citibank from Cash Reserves Portfolio were, after waiver, 0.06% of
the Portfolio's average daily net assets for that fiscal year.
BANKING RELATIONSHIPS. Citibank and its affiliates may have deposit,
loan and other relationships with the issuers of securities purchased on behalf
of the Portfolio, 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 and the Portfolio 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 or the Portfolio. Citibank
believes that its services under the Investment Advisory Agreement and the
activities performed by it or its affiliates as Service Agents and
sub-administrator are not underwriting and are consistent with the
Glass-Steagall Act and other relevant federal and state laws. However, there is
no controlling precedent regarding the performance of the combination of
investment advisory, shareholder servicing and sub-administrative activities by
banks. State laws on this issue may differ from applicable federal law and
banks and financial institutions may be required to register as dealers
pursuant to state securities laws. Changes in either federal or state statutes
or regulations, or in their interpretations, could prevent Citibank or its
affiliates from continuing to perform these services. If Citibank or its
affiliates were to be prevented from acting as the Adviser, sub-administrator
or a Service
-16-
<PAGE> 70
Agent, the Fund or Portfolio 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.
ADMINISTRATORS: LFBDS provides certain administrative services to the Fund and
Signature Financial Group (Cayman), Ltd. ("SFG") provides certain
administrative services to the Portfolio, in each case 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 Portfolio. These 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 0.35% 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.
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 or SFG. Citibank's
compensation as sub-administrator is paid by LFBDS or SFG.
TRANSFER AGENT, CUSTODIAN AND FUND ACCOUNTANT: State Street Bank and Trust
Company (or its affiliate State Street Canada, Inc.) acts as transfer agent and
dividend disbursing agent for the Fund. State Street (or its affiliate State
Street Canada, Inc.) acts as the custodian of the Fund's and the Portfolio's
assets. Securities held for the Portfolio may be held by a sub-custodian bank
approved by the Portfolio's Trustees. State Street also 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 the Fund's shares.
Under a Service Plan which has been adopted in accordance with Rule 12b-1 under
the 1940 Act, the Fund may pay monthly fees at an annual rate not to exceed
0.80% of the average daily net assets
-17-
<PAGE> 71
attributable to Class F shares of the Fund. These fees may be used to make
payments to the Distributor for distribution services, and to Service Agents
and others in respect of the sale of shares of the Fund, and to make payments
for advertising, marketing or other promotional activity, and payments for
preparation, printing and distribution of prospectuses, statements of
additional information and reports for recipients other than regulators and
existing shareholders. The Fund also may make payments to the Distributor,
Service Agents and others for providing personal service or the maintenance of
shareholder accounts. The Fund and the Distributor provide to the Trustees
quarterly a written report of amounts expended pursuant to the Service Plan and
the purposes for which the expenditures were made.
During the period they are in effect, the Service Plan and related
Distribution Agreement obligate the Fund to pay fees to the Distributor,
Service Agents and others as compensation for their services, not as
reimbursement for specific expenses incurred. Thus, even if their expenses
exceed the fees provided for under the Service Plan, the Fund will not be
obligated to pay more than those fees and, if their expenses are less than the
fees paid to them, they will realize a profit. The Fund will pay the fees to
the Distributor, Service Agents and others until the Service Plan or
Distribution Agreement is terminated or not renewed. In that event, the
Distributor's or Service Agent's expenses in excess of fees received or accrued
through the termination date will be the Distributor's or Service Agent's sole
responsibility and not obligations of the Fund.
Class F shares have exclusive voting rights with respect to the
Service Plan.
Securities dealers and other financial institutions may receive
different compensation with respect to sales of different classes of Fund
shares. Service Agents which are banks or financial institutions will receive
transaction fees that are equal to the commissions paid to securities brokers.
The Distributor, at its expense, may from time to time make payments for
marketing, promotional or related expenses to brokers and/or dealers who engage
in marketing efforts on behalf of the Fund. The amounts of such payments will
be determined by LFBDS in its sole discretion and may vary among different
brokers and/or dealers. In some instances, these incentives may be offered to
certain brokers who have sold or may sell significant number of shares of the
Fund. From time to time the Distributor may make payments for distribution
and/or shareholder servicing activities out of its past profits and any other
sources available to it.
-18-
<PAGE> 72
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 so that it will not be liable for
any federal income or excise taxes.
Shareholders are required to pay federal income tax on any dividends
and other distributions received. Generally, distributions from the Fund's net
investment income and short-term capital gains will be taxed as ordinary
income. Distributions from long-term net capital gains will be taxed as such
regardless of how long the shares of the Fund have been held. Dividends and
distributions are treated in the same manner for federal tax purposes whether
they are paid in cash or as additional shares.
Distributions derived from interest on U.S. Government obligations may
be exempt from state and local taxes in certain states. Early each year, the
Fund will notify its shareholders of the amount and tax status of distributions
paid to shareholders for the preceding year.
The account application asks each new shareholder to certify that the
shareholder's Social Security or taxpayer identification number is correct and
that the shareholder is not subject to 31% backup withholding for failing to
report income to the IRS. The Fund may be required to withhold (and pay over to
the IRS for the shareholder's credit) 31% of certain distributions paid to
shareholders who fail to provide this information or otherwise violate IRS
regulations.
Investors 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 and 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.
-19-
<PAGE> 73
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 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.
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 seven-day period (which period is stated in any
such advertisement or communication). This income is then annualized; that is,
the amount of income generated by the investment over that period is assumed to
be generated each week over a 365-day period and is shown as a percentage of
the investment. The "effective yield" is calculated similarly, but when
annualized the income earned by the investment during that seven-day period is
assumed to be reinvested. The effective yield is slightly higher than the yield
because of the compounding effect of this assumed reinvestment. The Fund may
also provide yield and effective yield quotations for longer periods.
Of course, any fees charged by a shareholder's Service Agent will
reduce that shareholder's net return on 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 diversified series of Landmark Institutional Trust,
which is a Massachusetts business trust which was organized on July 8, 1992.
The Fund also is an open-end management investment company registered under the
1940 Act.
Under the 1940 Act, a diversified series or diversified investment
company 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
-20-
<PAGE> 74
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 trust organized under the laws of the State of New
York. The Declaration of Trust of the Portfolio provides that the Fund and
other entities investing in the Portfolio are each liable for all obligations
of the Portfolio. However, it is not expected that the liabilities of the
Portfolio would ever exceed its assets.
VOTING AND OTHER RIGHTS: Landmark Institutional 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 Fund or class, only shares of that
particular Fund or class are entitled to vote. The Trust currently has two
series.
The Fund has authority to issue multiple classes of shares, including
the Class F shares described in this Prospectus. All classes are sold without
sales charges or redemption fees. The other classes of shares may be subject to
lower distribution fees than Class F shares; this may affect performance. For
more information about the other classes of shares investors may call
1-212-559-7119 or consult their Service Agents. All classes of shares may not
be available through an investor's Service Agent. Only Class A shares were
outstanding during the Fund's fiscal year ended August 31, 1996.
At any meeting of shareholders of the Fund, a Service Agent may vote
any shares of which it is the holder of record and for which it does not
receive voting instructions proportionately in accordance with instructions it
receives for all other shares of which that Service Agent is the holder of
record.
The Trust'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
-21-
<PAGE> 75
the Fund except that, due to the differing expenses borne by each class,
dividends and proceeds generally will be lower for Class F shares than for
Class A and Class C shares.
CERTIFICATES: The Fund's Transfer Agent maintains a share register for
shareholders of record. 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 Service Agents and tax and retirement advisers.
EXPENSES: For the fiscal year ended August 31, 1996, total operating expenses
of the Fund, after allocating to the Fund its share of the Portfolio's expenses
and after giving effect to fee waivers or reimbursements, were .17% of the
Fund's average daily net assets for that fiscal year. No Class F shares were
outstanding during that fiscal year. Expenses of Class F shares will generally
be higher than those of Class A and Class C shares. All fee waivers are
voluntary and may be reduced or terminated at any time.
COUNSEL AND INDEPENDENT AUDITORS: Bingham, Dana & Gould LLP, Boston,
Massachusetts, is counsel for the Fund. Price Waterhouse LLP, Boston,
Massachusetts, serves as independent auditor for the Fund.
------------------------------
The Statement of Additional Information dated the date hereof contains
more detailed information about the Fund and the Portfolio, including
information related to (i) investment policies and restrictions, (ii) the
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.
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
-22-
<PAGE> 76
the Fund or its distributor in any jurisdiction in which such offering may not
lawfully be made.
-23-
<PAGE> 77
APPENDIX
PERMITTED INVESTMENTS AND
INVESTMENT PRACTICES
TREASURY RECEIPTS. The Portfolio may invest in Treasury Receipts,
which are unmatured interest coupons of U.S. Treasury bonds and notes which
have been separated and resold in a custodial receipt program administered by
the U.S. Treasury.
COMMERCIAL PAPER. The Portfolio may invest in commercial paper, which
is unsecured debt of corporations usually maturing in 270 days or less from its
date of issuance.
ASSET-BACKED SECURITIES. The Portfolio may invest in asset-backed
securities, which represent fractional interests in underlying pools of assets,
such as car installment loans or credit card receivables. The rate of return on
asset-backed securities may be affected by prepayment of the underlying loans
or receivables. Reinvestment of principal may occur at higher or lower rates
than the original yield.
REPURCHASE AGREEMENTS. The Portfolio may enter into repurchase
agreements. Repurchase agreements are transactions in which an institution
sells the Portfolio a security at one price, subject to the Portfolio'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.
LENDING OF PORTFOLIO SECURITIES. Consistent with applicable regulatory
requirements and in order to generate additional income, the Portfolio 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 Portfolio would not exceed 33 1/3% of the
Portfolio's net assets.
In the event of the bankruptcy of the other party to a securities loan
or a repurchase agreement, the Portfolio could experience delays in recovering
either the securities lent or cash. To the extent that, in the meantime, the
value of the securities lent have increased or the value of the securities
purchased have decreased, the Portfolio could experience a loss.
-24-
<PAGE> 78
PRIVATE PLACEMENTS AND ILLIQUID INVESTMENTS. The Portfolio may invest
up to 10% of its net assets in securities for which there is no readily
available market. These illiquid securities may include privately placed
restricted securities for which no institutional market exists. The absence of
a trading market can make it difficult to ascertain a market value for illiquid
investments. Disposing of illiquid investments may involve time-consuming
negotiation and legal expenses, and it may be difficult or impossible for the
Portfolio to sell them promptly at an acceptable price.
-25-
<PAGE> 79
LANDMARK FUNDS
MONEY MARKET FUNDS:
Cash Reserves
Premium Liquid Reserves
Institutional Liquid Reserves
U.S. Treasury Reserves
Premium U.S. Treasury Reserves
Institutional U.S. Treasury Reserves
Tax Free Reserves
Institutional Tax Free Reserves
California Tax Free Reserves
Connecticut Tax Free Reserves
New York Tax Free Reserves
STOCK & BOND FUNDS:
U.S. Government Income Fund
Intermediate Income Fund
National Tax Free Income Fund
New York Tax Free Income Fund
Balanced Fund
Equity Fund
Small Cap Equity Fund
International Equity Fund
Emerging Asian Markets Equity Fund
-26-
<PAGE> 80
TRUSTEES AND OFFICERS
Philip W. Coolidge*, President
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
SECRETARY
Linda T. Gibson*
TREASURER
John R. Elder*
*Affiliated Person of Administrator and Distributor
INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043
ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679
TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
AUDITORS
Price Waterhouse LLP
160 Federal Street, Boston, MA 02110
LEGAL COUNSEL
Bingham, Dana & Gould LLP
150 Federal Street, Boston, MA 02110
LANDMARK
INSTITUTIONAL
LIQUID RESERVES
CLASS F SHARES
PROSPECTUS
JANUARY 2, 1997
-27-
<PAGE> 81
STATEMENT OF
ADDITIONAL INFORMATION
LANDMARK INSTITUTIONAL LIQUID RESERVES January 2, 1997
LANDMARK INSTITUTIONAL U.S. TREASURY RESERVES
LANDMARK INSTITUTIONAL TAX FREE RESERVES
(Members of the Landmark(SM) Family of Funds)
Landmark Institutional Liquid Reserves ("Liquid Reserves"), Landmark
Institutional U.S. Treasury Reserves ("U.S. Treasury Reserves") and Landmark
Institutional Tax Free Reserves ("Tax Free Reserves" and together with Liquid
Reserves and U.S. Treasury Reserves, the "Funds") are each separate series of
Landmark Institutional Trust (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 Liquid Reserves, U.S.
Treasury Reserves and Tax Free Reserves in, respectively, Cash Reserves
Portfolio, U.S. Treasury Reserves Portfolio and Tax Free Reserves Portfolio
(the "Portfolios"). The address of Cash Reserves Portfolio is Elizabethan
Square, George Town, Grand Cayman, British West Indies. The address and
telephone number of U.S. Treasury Reserves Portfolio and Tax Free Reserves
Portfolio are 6 St. James Avenue, Boston, Massachusetts 02116, (617) 423-1679.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, CITIBANK, N.A. OR ANY OF ITS AFFILIATES, ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER AGENCY, AND INVOLVE
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
<TABLE>
<CAPTION>
Table of Contents Page
- ----------------- ----
<S> <C>
The Funds
Investment Objectives, Policies and Restrictions
Performance Information
Determination of Net Asset Value
Management
Portfolio Transactions
Description of Shares, Voting Rights and Liabilities
Certain Additional Tax Matters
Independent Accountants and Financial Statements
</TABLE>
This Statement of Additional Information sets forth information which
may be of interest to investors but which is not necessarily included in the
Funds' Prospectus, dated January 2, 1997, by which shares of the Funds 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 Funds' Distributor (see 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.
<PAGE> 82
-2-
1. THE FUNDS
The Trust is a no-load, open-end management investment company which
was organized as a business trust under the laws of the Commonwealth of
Massachusetts on July 8, 1992. Shares of the Trust are divided into three
separate series, Landmark Institutional Liquid Reserves, Landmark Institutional
U.S. Treasury Reserves and Landmark Institutional Tax Free Reserves, which are
described in this Statement of Additional Information. References in this
Statement of Additional Information to the Prospectus are to the Prospectus,
dated January 2, 1997, of the Funds by which shares of the Funds are offered.
Each of the Funds is a type of mutual fund commonly referred to as a
"money market fund." Tax Free Reserves is a "tax-exempt money market fund."
The net asset value of each of the Funds' shares is expected to remain constant
at $1.00, although there can be no assurance that this will be so on a
continuing basis. (See "Determination of Net Asset Value.")
The Trust seeks the investment objectives of the Funds by investing
all the investable assets of Liquid Reserves, U.S. Treasury Reserves and Tax
Free Reserves in, respectively, Cash Reserves Portfolio, U.S. Treasury Reserves
Portfolio and Tax Free Reserves Portfolio. Each of the Portfolios is an
open-end management investment company. Each Portfolio has the same investment
objectives and policies as its corresponding Fund. Cash Reserves Portfolio and
U.S. Treasury Reserve Portfolio are diversified; Tax Free Reserves Portfolio is
non-diversified.
Citibank, N.A. ("Citibank" or the "Adviser") is the investment adviser
to each of the Portfolios. The Adviser manages the investments of each
Portfolio from day to day in accordance with the investment objectives and
policies of that Portfolio. The selection of investments for each Portfolio,
and the way they are managed, depend on the conditions and trends in the
economy and the financial marketplaces.
The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS" or the
"Administrator") supervises the overall administration of the Trust, U.S.
Treasury Reserves Portfolio and Tax Free Reserves Portfolio. Signature
Financial Group (Cayman), Ltd. ("SFG") supervises the overall administration of
Cash Reserves Portfolio. The Boards of Trustees of the Trust and the Portfolios
provide broad supervision over the affairs of the Trust and of the Portfolios,
respectively. Shares of each Fund are continuously sold by LFBDS, the Funds'
distributor (the "Distributor"), only to investors who are customers of a
financial institution, such as a federal or state-chartered bank, trust
company, savings and loan association or savings bank, or a securities broker,
that has entered into a shareholder servicing agreement with the Trust with
respect to that Fund (collectively, "Shareholder Servicing Agents"). Although
shares of the Funds are sold without a sales load, LFBDS may receive fees from
the Funds pursuant to a Distribution Plan adopted in accordance with Rule 12b-1
under the Investment Company Act of 1940, as amended (the "1940 Act").
2. INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVES
<PAGE> 83
-3-
The investment objectives of LANDMARK INSTITUTIONAL LIQUID RESERVES
are to provide shareholders of the Fund with liquidity and as high a level of
current income as is consistent with the preservation of capital.
The investment objectives of LANDMARK INSTITUTIONAL U.S. TREASURY
RESERVES are to provide shareholders of the Fund with liquidity and as high a
level of current income from U.S. Government obligations as is consistent with
the preservation of capital.
The investment objectives of LANDMARK INSTITUTIONAL TAX FREE RESERVES
are to provide its shareholders with high levels of current income exempt from
federal income taxes, preservation of capital and liquidity.
The investment objectives of each Fund may be changed without approval
by that Fund's shareholders. Of course, there can be no assurance that any Fund
will achieve its investment objective.
INVESTMENT POLICIES
The Trust seeks the investment objectives of the Funds by investing
all of the investable assets of Liquid Reserves, U.S. Treasury Reserves and
Tax Free Reserves in, respectively, Cash Reserves Portfolio, U.S. Treasury
Reserves Portfolio and Tax Free Reserves Portfolio, each of which has the same
investment objectives and policies as its corresponding Fund. The Prospectus
contains a discussion of the various types of securities in which each
Portfolio may invest and the risks involved in such investments. The following
supplements the information contained in the Prospectus concerning the
investment objectives, policies and techniques of each Fund and each Portfolio.
Since the investment characteristics of each Fund will correspond directly to
those of the Portfolio in which it invests, the following is a supplementary
discussion with respect to each Portfolio.
<PAGE> 84
-4-
The Trust may withdraw the investment of any Fund from its
corresponding Portfolio at any time, if the Board of Trustees of the Trust
determines that it is in the best interests of the Fund to do so. Upon any such
withdrawal, a Fund's assets would be invested in accordance with the investment
policies described below with respect to its corresponding Portfolio. Except
for the concentration policy of Liquid Reserves with respect to bank
obligations described in paragraph (1) below for Cash Reserves Portfolio, which
is fundamental and may not be changed without the approval of Liquid Reserves'
shareholders, and except for the policy of Tax Free Reserves with respect to
municipal obligations described in paragraph (1) below for Tax Free Reserves
Portfolio, which is fundamental and may not be changed without the approval of
Tax Free Reserves' shareholders, the approval of a Fund's shareholders would
not be required to change any of that Fund's investment policies. Likewise,
except for the concentration policy of Cash Reserves Portfolio with respect to
bank obligations described in paragraph (1) below for Cash Reserves Portfolio,
which is fundamental and may not be changed without the approval of Cash
Reserves Portfolio's investors, and except for the policy of Tax Free Reserves
Portfolio with respect to municipal obligations described in paragraph (1)
below for Tax Free Reserve Portfolio, which is fundamental and may not be
changed without the approval of Tax Free Reserves' investors, the approval of
the investors in a Portfolio would not be required to change that Portfolio's
investment objectives or any of that Portfolio's investment policies discussed
below, including those concerning securities transactions.
Cash Reserves Portfolio
Cash Reserves Portfolio seeks its investment objective through
investments limited to the following types of high quality U.S.
dollar-denominated money market instruments. All investments by Cash Reserves
Portfolio mature or are deemed to mature within 397 days from the date of
acquisition and the average maturity of the investments held by the Portfolio
(on a dollar-weighted basis) is 90 days or less. All investments by the
Portfolio are in "high quality" securities (i.e., securities rated in the
highest rating category for short-term obligations by at least two nationally
recognized statistical rating organizations (each, an "NRSRO") assigning a
rating to the security or issuer or, if only one NRSRO assigns a rating, that
NRSRO or, in the case of an investment which is not rated, of comparable
quality as determined by the Adviser) and are determined by the Adviser to
present minimal credit risks. Investments in high quality, short-term
instruments may, in many circumstances, result in a lower yield than would be
available from investments in instruments with a lower quality or a longer
term. Under the 1940 Act, Liquid Reserves and Cash Reserves Portfolio are each
classified as "diversified," although in the case of Liquid Reserves, all of
its investable assets are invested in the Portfolio. A "diversified investment
company" must invest at least 75% of its assets in cash and cash items, U.S.
Government securities, investment company securities (e.g., interests in the
Portfolio) and other securities limited as to any one issuer to not more than
5% of the total assets of the investment company and not more than 10% of the
voting securities of the issuer.
(1) Bank obligations -- Cash Reserves Portfolio invests
at least 25% of its investable assets, and may invest up to
100% of its assets, in bank obligations. These obligations
include, but are not limited to, negotiable certificates of
deposit, bankers' acceptances and fixed time deposits. Cash
Reserves Portfolio limits its investments in U.S. bank
obligations (including their non-U.S. branches) to banks
having total assets in excess of $1 billion and which are
subject to regulation by an agency of the U.S. Government. The
Portfolio may also invest in certificates of deposit issued by
banks the deposits in which are insured by the
<PAGE> 85
-5-
Federal Deposit Insurance Corporation ("FDIC"), through either
the Bank Insurance Fund or the Savings Association Insurance
Fund, having total assets of less than $1 billion, provided
that the Portfolio at no time owns more than $100,000
principal amount of certificates of deposit (or any higher
principal amount which in the future may be fully insured by
FDIC insurance) of any one of those issuers. Fixed time
deposits are obligations which are payable at a stated
maturity date and bear a fixed rate of interest. Generally,
fixed time deposits may be withdrawn on demand by the
Portfolio, but they may be subject to early withdrawal
penalties which vary depending upon market conditions and the
remaining maturity of the obligation. Although fixed time
deposits do not have a market, there are no contractual
restrictions on the Portfolio's right to transfer a beneficial
interest in the deposit to a third party. This concentration
policy is fundamental and may not be changed without the
approval of the investors in Cash Reserves Portfolio.
U.S. banks organized under federal law are supervised
and examined by the Comptroller of the Currency and are
required to be members of the Federal Reserve System and to be
insured by the FDIC. U.S. banks organized under state law are
supervised and examined by state banking authorities and are
members of the Federal Reserve System only if they elect to
join. However, state banks which are insured by the FDIC are
subject to federal examination and to a substantial body of
federal law and regulation. As a result of federal and state
laws and regulations, U.S. branches of U.S. banks, among other
things, are generally required to maintain specified levels of
reserves, and are subject to other supervision and regulation
designed to promote financial soundness.
Cash Reserves Portfolio limits its investments in
non-U.S. bank obligations (i.e., obligations of non-U.S.
branches and subsidiaries of U.S. banks, and U.S. and non-U.S.
branches of non-U.S. banks) to U.S. dollar-denominated
obligations of banks which at the time of investment are
branches or subsidiaries of U.S. banks which meet the criteria
in the preceding paragraphs or are branches of non-U.S. banks
which (i) have more than $10 billion, or the equivalent in
other currencies, in total assets; (ii) in terms of assets are
among the 75 largest non-U.S. banks in the world; (iii) have
branches or agencies in the United States; and (iv) in the
opinion of the Adviser, are of an investment quality
comparable with obligations of U.S. banks which may be
purchased by the Portfolio. These obligations may be general
obligations of the parent bank, in addition to the issuing
branch or subsidiary, but the parent bank's obligations may be
limited by the terms of the specific obligation or by
governmental regulation. The Portfolio also limits its
investments in non-U.S. bank obligations to banks, branches
and subsidiaries located in Western Europe (United Kingdom,
France, Germany, Belgium, the Netherlands, Italy,
Switzerland), Scandinavia (Denmark, Norway, Sweden),
Australia, Japan, the Cayman Islands, the Bahamas and Canada.
Cash Reserves Portfolio does not purchase any bank obligation
of the Adviser or an affiliate of the Adviser.
Since Cash Reserves Portfolio may hold obligations of
non-U.S. branches and subsidiaries of U.S. banks, and U.S. and
non-U.S. branches of non-U.S. banks, an investment in Liquid
Reserves involves certain additional risks. Such investment
risks include future political and economic developments, the
possible imposition of non-U.S. withholding taxes on interest
income payable on such obligations held by the Portfolio, the
possible seizure or nationalization of non-U.S. deposits and
the possible establishment of exchange controls or other
non-U.S. governmental laws or restrictions applicable to the
<PAGE> 86
-6-
payment of the principal of and interest on certificates of
deposit or time deposits that might affect adversely such
payment on such obligations held by the Portfolio. In
addition, there may be less publicly-available information
about a non-U.S. branch or subsidiary of a U.S. bank or a U.S.
or non-U.S. branch of a non-U.S. bank than about a U.S. bank
and such branches and subsidiaries may not be subject to the
same or similar regulatory requirements that apply to U.S.
banks, such as mandatory reserve requirements, loan
limitations and accounting, auditing and financial
record-keeping standards and requirements.
The provisions of federal law governing the
establishment and operation of U.S. branches do not apply to
non-U.S. branches of U.S. banks. However, Cash Reserves
Portfolio may purchase obligations only of those non-U.S.
branches of U.S. banks which were established with the
approval of the Board of Governors of the Federal Reserve
System (the "Board of Governors"). As a result of such
approval, these branches are subject to examination by the
Board of Governors and the Comptroller of the Currency. In
addition, such non-U.S. branches of U.S. banks are subject to
the supervision of the U.S. bank and creditors of the non-U.S.
branch are considered general creditors of the U.S. bank
subject to whatever defenses may be available under the
governing non-U.S. law and to the terms of the specific
obligation. Nonetheless, Cash Reserves Portfolio generally
will be subject to whatever risk may exist that the non-U.S.
country may impose restrictions on payment of certificates of
deposit or time deposits.
U.S. branches of non-U.S. banks are subject to the
laws of the state in which the branch is located or to the
laws of the United States. Such branches are therefore subject
to many of the regulations, including reserve requirements, to
which U.S. banks are subject. In addition, Cash Reserves
Portfolio may purchase obligations only of those U.S. branches
of non-U.S. banks which are located in states which impose the
additional requirement that the branch pledge to a designated
bank within the state an amount of its assets equal to 5% of
its total liabilities.
Non-U.S. banks in whose obligations Cash Reserves
Portfolio may invest may not be subject to the laws and
regulations referred to in the preceding two paragraphs.
(2) Obligations of, or guaranteed by, non-U.S.
governments. Cash Reserves Portfolio limits its investments in
non-U.S. government obligations to obligations issued or
guaranteed by the governments of Western Europe (United
Kingdom, France, Germany, Belgium, the Netherlands, Italy,
Switzerland), Scandinavia (Denmark, Norway, Sweden),
Australia, Japan and Canada. Generally, such obligations may
be subject to the additional risks described in paragraph 1
above in connection with the purchase of non-U.S. bank
obligations.
(3) Commercial paper rated Prime-1 by Moody's Investors
Service, Inc. or A-1 by Standard & Poor's Ratings Group or, if
not rated, determined to be of comparable quality by the
Adviser, such as unrated commercial paper issued by
corporations having an outstanding unsecured debt issue
currently rated Aaa by Moody's or AAA by Standard & Poor's.
(4) Obligations of, or guaranteed by, the U.S.
Government, its agencies or instrumentalities. These include
issues of the U.S. Treasury, such as bills, certificates of
<PAGE> 87
-7-
indebtedness, notes and bonds, and issues of agencies and
instrumentalities established under the authority of an Act of
Congress. Some of the latter category of obligations are
supported by the full faith and credit of the United States,
others are supported by the right of the issuer to borrow from
the U.S. Treasury, and still others are supported only by the
credit of the agency or instrumentality. Examples of each of
the three types of obligations described in the preceding
sentence are (i) obligations guaranteed by the Export-Import
Bank of the United States, (ii) obligations of the Federal
Home Loan Mortgage Corporation, and (iii) obligations of the
Student Loan Marketing Association, respectively.
(5) Repurchase agreements, providing for resale within
397 days or less, covering obligations of, or guaranteed by,
the U.S. Government, its agencies or instrumentalities which
may have maturities in excess of 397 days. A repurchase
agreement arises when a buyer purchases an obligation and
simultaneously agrees with the vendor to resell the obligation
to the vendor at an agreed-upon price and time, which is
usually not more than seven days from the date of purchase.
The resale price of a repurchase agreement is greater than the
purchase price, reflecting an agreed-upon market rate which is
effective for the period of time the buyer's funds are
invested in the obligation and which is not related to the
coupon rate on the purchased obligation. Obligations serving
as collateral for each repurchase agreement are delivered to
the Portfolio's custodian either physically or in book entry
form and the collateral is marked to the market daily to
ensure that each repurchase agreement is fully collateralized
at all times. A buyer of a repurchase agreement runs a risk of
loss if, at the time of default by the issuer, the value of
the collateral securing the agreement is less than the price
paid for the repurchase agreement. If the vendor of a
repurchase agreement becomes bankrupt, Cash Reserves Portfolio
might be delayed, or may incur costs or possible losses of
principal and income, in selling the collateral. The Portfolio
may enter into repurchase agreements only with a vendor which
is a member bank of the Federal Reserve System or which is a
"primary dealer" (as designated by the Federal Reserve Bank of
New York) in U.S. Government obligations. The Portfolio will
not enter into any repurchase agreements with the Adviser or
an affiliate of the Adviser. The restrictions and procedures
described above which govern the Portfolio's investment in
repurchase agreements are designed to minimize the Portfolio's
risk of losses in making those investments.
(6) Asset-backed securities, which may include securities
such as Certificates for Automobile Receivables ("CARS") and
Credit Card Receivable Securities ("CARDS"), as well as other
asset-backed securities that may be developed in the future.
CARS represent fractional interests in pools of car
installment loans, and CARDS represent fractional interests in
pools of revolving credit card receivables. The rate of return
on asset-backed securities may be affected by early prepayment
of principal on the underlying loans or receivables.
Prepayment rates vary widely and may be affected by changes in
market interest rates. It is not possible to accurately
predict the average life of a particular pool of loans or
receivables. Reinvestment of principal may occur at higher or
lower rates than the original yield. Therefore, the actual
maturity and realized yield on asset-backed securities will
vary based upon the prepayment experience of the underlying
pool of loans or receivables. (See "Asset-Backed Securities.")
Cash Reserves Portfolio does not purchase securities which the Portfolio
believes, at the time of purchase, will be subject to exchange controls or
non-U.S. withholding taxes;
<PAGE> 88
-8-
however, there can be no assurance that such laws may not become applicable to
certain of the Portfolio's investments. In the event exchange controls or
non-U.S. withholding taxes are imposed with respect to any of the Portfolio's
investments, the effect may be to reduce the income received by the Portfolio
on such investments.
ASSET-BACKED SECURITIES
As set forth above, Cash Reserves Portfolio may purchase
asset-backed securities that represent fractional interests in pools of retail
installment loans, both secured (such as Certificates for Automobile
Receivables) and unsecured, leases or revolving credit receivables, both
secured and unsecured (such as Credit Card Receivable Securities). These assets
are generally held by a trust and payments of principal and interest or
interest only are passed through monthly or quarterly to certificate holders
and may be guaranteed up to certain amounts by letters of credit issued by a
financial institution affiliated or unaffiliated with the trustee or originator
of the trust.
Underlying automobile sales contracts, leases or credit card
receivables are subject to prepayment, which may reduce the overall return to
certificate holders. Nevertheless, principal repayment rates tend not to vary
much with interest rates and the short-term nature of the underlying loans,
leases or receivables tends to dampen the impact of any change in the
prepayment level. Certificate holders may also experience delays in payment on
the certificates if the full amounts due on underlying loans, leases or
receivables are not realized by the Portfolio because of unanticipated legal or
administrative costs of enforcing the contracts or because of depreciation or
damage to the collateral (usually automobiles) securing certain contracts, or
other factors. If consistent with its investment objectives and policies, Cash
Reserves Portfolio may invest in other asset-backed securities that may be
developed in the future.
U.S. Treasury Reserves Portfolio
U.S. Treasury Reserves Portfolio seeks its investment
objective by investing in obligations of, or guaranteed by, the U.S.
Government, its agencies or instrumentalities including issues of the U.S.
Treasury, such as bills, certificates of indebtedness, notes and bonds, and
issues of agencies and instrumentalities established under the authority of an
Act of Congress which are supported by the full faith and credit of the United
States. U.S. Treasury Reserves Portfolio will not enter into repurchase
agreements.
Tax Free Reserves Portfolio
Tax Free Reserves Portfolio seeks its investment objectives by
investing primarily in short-term, high quality fixed rate and variable rate
obligations issued by or on behalf of states and municipal governments and
their authorities, agencies, instrumentalities and political subdivisions and
by other qualifying issuers, the interest on which is exempt from federal
income taxes, including participation interests in such obligations issued by
banks, insurance companies or other financial institutions. (These securities,
whether or not the interest thereon is subject to the federal alternative
minimum tax, are referred to herein as "Municipal Obligations.") In
determining the tax status of interest on Municipal Obligations, the Adviser
relies on opinions of bond counsel who may be counsel to the issuer. Although
the Portfolio will attempt to invest 100% of its assets in Municipal
Obligations, the Portfolio reserves the right to invest up to 20% of the value
of its total assets in securities, the interest income on which is subject to
federal, state and local income tax or
<PAGE> 89
-9-
the federal alternative minimum tax. The Portfolio invests more than 25% of
its assets in participation certificates issued by banks in industrial
development bonds and other Municipal Obligations. In view of this
"concentration" in these bank participation certificates, an investment in Fund
shares should be made with an understanding of the characteristics of the
banking industry and the risks which such an investment may entail. (See
"Variable Rate Instruments and Participation Interests" below.) The Portfolio
may hold uninvested cash reserves pending investment. The Portfolio's
investments may include "when-issued" or "forward delivery" Municipal
Obligations, stand-by commitments and taxable repurchase agreements.
For a general discussion of Municipal Obligations and an explanation
of the ratings of Municipal Obligations by Moody's Investors Service, Inc.,
Standard & Poor's Rating Group and Fitch Investors Service, Inc., see Appendix
B to the Prospectus. For a comparison of yields on such Municipal Obligations
and taxable securities, see Appendix C to the Prospectus.
All investments by Tax Free Reserves Portfolio mature or are deemed to
mature within 397 days from the date of acquisition and the average maturity of
the Portfolio's securities (on a dollar-weighted basis) is 90 days or less.
The maturities of variable rate instruments held by the Portfolio are deemed to
be the longer of the notice period, or the period remaining until the next
interest rate adjustment, although the stated maturities may be in excess of
397 days. (See "Variable Rate Instruments and Participation Interests" below.)
All investments by the Portfolio are "eligible securities" (rated in one of the
two highest rating categories for short-term obligations by at least two
nationally recognized statistical rating organizations (each a "NRSRO")
assigning a rating to the security or issuer or, if only one NRSRO assigned a
rating, that NRSRO, or, in the case of an investment which is not rated, of
comparable quality as determined by or on behalf of the Portfolio's Board of
Trustees on the basis of its credit evaluation of the obligor or of the bank
issuing a participation interest, letter of credit or guarantee, or insurance
issued in support of the Municipal Obligations or participation interests).
(See "Variable Rate Instruments and Participation Interests" below.) Such
instruments may produce a lower yield than would be available from less highly
rated instruments. The Portfolio's Board of Trustees has determined that
Municipal Obligations which are backed by the full faith and credit of the U.S.
Government are considered to have a rating equivalent to Moody's Aaa. (See
Appendix B to the Prospectus.)
As a fundamental policy, the investments of the Portfolio will be made
primarily (i.e., at least 80% of its assets under normal circumstances) in:
(1) Municipal bonds with remaining maturities of one year or less
that are rated within the Aaa or Aa categories at the date of purchase by
Moody's Investors Service, Inc. ("Moody's") or within the AAA or AA categories
by Standard & Poor's Ratings Group ("Standard & Poor's") or Fitch Investors
Service, Inc.("Fitch") or, if not rated by these rating agencies, are of
comparable quality as determined by the Adviser on the basis of the credit
evaluation of the obligor on the bonds or of the bank issuing a participation
interest or guarantee or of any insurance issued in support of the bonds or the
participation interests.
(2) Municipal notes with remaining maturities of one year or less
that at the date of purchase are rated MIG-1/VMIG 1 or MIG-2/VMIG 2 by Moody's,
SP-1+, SP-1 or SP-2 by Standard & Poor's or F-1+,F-1 or F-2 by Fitch or, if not
rated by these rating agencies, are of comparable quality as determined by the
Adviser. The principal kinds of municipal notes are tax and revenue
anticipation notes, tax anticipation notes, bond anticipation notes and revenue
<PAGE> 90
-10-
anticipation notes. Notes sold in anticipation of collection of taxes, a bond
sale or receipt of other revenues are usually general obligations of the
issuing municipality or agency.
(3) Municipal commercial paper that is rated Prime-1 or Prime-2 by
Moody's, A-1+, A-1 or A-2 by Standard & Poor's or F-1+, F-1 or F-2 by Fitch or,
if not rated by these rating agencies, is of comparable quality as determined
by the Adviser. Issues of municipal commercial paper typically represent very
short-term, unsecured, negotiable promissory notes. These obligations are
often issued to meet seasonal working capital needs of municipalities or to
provide interim construction financing and are paid from general revenues of
municipalities or are refinanced with long-term debt. In most cases municipal
commercial paper is backed by letters of credit, lending agreements, note
repurchase agreements or other credit facility agreements offered by banks or
other institutions which may be called upon in the event of default by the
issuer of the commercial paper.
Subsequent to its purchase by Tax Free Reserves Portfolio, a rated
Municipal Obligation may cease to be rated or its rating may be reduced below
the minimum required for purchase by the Portfolio. Neither event requires
sale of such Municipal Obligation by the Portfolio (other than variable rate
instruments which must be sold if they are not "high quality"), but the Adviser
considers such event in determining whether the Portfolio should continue to
hold the Municipal Obligation. To the extent that the ratings given to the
Municipal Obligations or other securities held by the Portfolio are altered due
to changes in any of the Moody's, Standard & Poor's or Fitch ratings systems,
the Adviser adopts such changed ratings as standards for its future investments
in accordance with the investment policies contained herein. Certain Municipal
Obligations issued by instrumentalities of the U.S. Government are not backed
by the full faith and credit of the U.S. Treasury but only by the
creditworthiness of the instrumentality. The Portfolio's Board of Trustees has
determined that any Municipal Obligation that depends directly, or indirectly
through a government insurance program or other guarantee, on the full faith
and credit of the U.S. Government is considered to have a rating in the highest
category. Where necessary to ensure that the Municipal Obligations are
"eligible securities" (i.e., within the two highest ratings assigned by
Moody's, Standard & Poor's or Fitch), or where the obligations are not freely
transferable, the Portfolio will require that the obligation to pay the
principal and accrued interest be backed by an unconditional irrevocable bank
letter of credit, a guarantee, insurance policy or other comparable undertaking
of an approved financial institution.
The Portfolio may invest 25% or more of its assets in securities that
are related in such a way that an economic, business or political development
or change affecting one of the securities would also affect the other
securities including, for example, securities the interest upon which is paid
from revenues of similar type projects, or securities the issuers of which are
located in the same state.
VARIABLE RATE INSTRUMENTS AND PARTICIPATION INTERESTS
Variable rate instruments that Tax Free Reserves Portfolio may
purchase are tax-exempt Municipal Obligations (including municipal notes and
municipal commercial paper) that provide for a periodic adjustment in the
interest rate paid on the instrument and permit the holder to receive payment
upon a specified number of days' notice of the unpaid principal balance plus
accrued interest either from the issuer or by drawing on a bank letter of
credit, a guarantee or an insurance
<PAGE> 91
-11-
policy issued with respect to such instrument or by tendering or "putting" such
instrument to a third party.
The variable rate instruments in which Tax Free Reserves Portfolio's
assets may be invested are payable upon a specified period of notice which may
range from one day up to one year. The terms of the instruments provide that
interest rates are adjustable at intervals ranging from daily to up to one year
and the adjustments are based upon the prime rate of a bank or other
appropriate interest rate adjustment index as provided in the respective
instruments. The Portfolio will decide which variable rate instruments it will
purchase in accordance with procedures prescribed by its Board of Trustees to
minimize credit risks. An unrated variable rate instrument may be determined
to meet the Portfolio's high quality criteria if it is backed by a letter of
credit or guarantee or a right to tender or put the instrument to a third party
or is insured by an insurer that meets the high quality criteria for the
Portfolio discussed above or on the basis of a credit evaluation of the
underlying obligor. If the credit of the obligor is of "high quality," no
credit support from a bank or other financial institution will be necessary.
Each unrated variable rate instrument will be evaluated on a quarterly basis to
determine that it continues to meet the Portfolio's high quality criteria. If
an instrument is ever deemed to be of less than high quality, the Portfolio
either will sell it in the market or exercise the liquidity feature described
below.
Variable rate instruments in which Tax Free Reserves Portfolio's
assets may be invested include participation interests in variable rate,
tax-exempt Municipal Obligations owned by a bank, insurance company or other
financial institution or affiliated organizations. Although the rate of the
underlying Municipal Obligations may be fixed, the terms of the participation
interest may result in the Portfolio receiving a variable rate on its
investment. A participation interest gives the Portfolio an undivided interest
in the Municipal Obligation in the proportion that the Portfolio's
participation bears to the total principal amount of the Municipal Obligation
and provides the liquidity feature. Each participation may be backed by an
irrevocable letter of credit or guarantee of, or a right to put to, a bank
(which may be the bank issuing the participation interest, a bank issuing a
confirming letter of credit to that of the issuing bank, or a bank serving as
agent of the issuing bank with respect to the possible repurchase of the
participation interest) or insurance policy of an insurance company that has
been determined by or on behalf of the Board of Trustees of the Portfolio to
meet the prescribed quality standards of the Portfolio. The Portfolio has the
right to sell the participation interest back to the institution or draw on the
letter of credit or insurance after a specified period of notice, for all or
any part of the full principal amount of the Portfolio's participation in the
security, plus accrued interest. The Portfolio intends to exercise the
liquidity feature only (1) upon a default under the terms of the bond
documents, (2) as needed to provide liquidity to the Portfolio in order to
facilitate withdrawals from the Portfolio, or (3) to maintain a high quality
investment portfolio. In some cases, this liquidity feature may not be
exercisable in the event of a default on the underlying Municipal Obligations;
in these cases, the underlying Municipal Obligations must meet the Portfolio's
high quality credit standards at the time of purchase of the participation
interest. Issuers of participation interests will retain a service and letter
of credit fee and a fee for providing the liquidity feature, in an amount equal
to the excess of the interest paid on the instruments over the negotiated yield
at which the participations were purchased on behalf of the Portfolio. The
total fees generally range from 5% to 15% of the applicable prime rate or other
interest rate index. With respect to insurance, the Portfolio will attempt to
have the issuer of the participation interest bear the cost of the insurance,
although the Portfolio retains the option to purchase insurance if necessary,
in which case the cost of insurance will be an expense of the Portfolio subject
to the expense limitation of 2 1/2% of the first $30
<PAGE> 92
-12-
million of the Portfolio's average net assets, 2% of the next $70 million and 1
1/2% of the Portfolio's average net assets in excess of $100 million. The
Adviser has been instructed by the Portfolio's Board of Trustees to monitor
continually the pricing, quality and liquidity of the variable rate instruments
held by the Portfolio, including the participation interests, on the basis of
published financial information and reports of the rating agencies and other
bank analytical services to which the Portfolio may subscribe. Although
participation interests may be sold, the Portfolio intends to hold them until
maturity, except under the circumstances stated above.
In view of the "concentration" of Tax Free Reserves Portfolio in bank
participation interests in Municipal Obligations secured by bank letters of
credit or guarantees, an investment in the Portfolio should be made with an
understanding of the characteristics of the banking industry and the risks
which such an investment may entail. Banks are subject to extensive
governmental regulations which may limit both the amounts and types of loans
and other financial commitments which may be made and interest rates and fees
which may be charged. The profitability of this industry is largely dependent
upon the availability and cost of capital funds for the purpose of financing
lending operations under prevailing money market conditions. Also, general
economic conditions play an important part in the operations of this industry
and exposure to credit losses arising from possible financial difficulties of
borrowers might affect a bank's ability to meet its obligations under a letter
of credit.
Periods of high inflation and periods of economic slowdown, together
with the fiscal measures adopted to attempt to deal with them, have brought
wide fluctuations in interest rates. When interest rates rise, the value of
fixed income securities generally falls; and vice versa. While this is true
for variable rate instruments generally, the variable rate nature of the
underlying instruments should minimize these changes in value. Accordingly, as
interest rates decrease or increase, the potential for capital appreciation and
the risk of potential capital depreciation is less than would be the case with
a portfolio of fixed income securities. Because the adjustment of interest
rates on the variable rate instruments is made in relation to movements of
various interest rate adjustment indices, the variable rate instruments are not
comparable to long-term fixed rate securities. Accordingly, interest rates on
the variable rate instruments may be higher or lower than current market rates
for fixed rate obligations of comparable quality with similar maturities.
Because of the variable rate nature of the instruments, when
prevailing interest rates decline the Portfolio's yield will decline and its
shareholders will forgo the opportunity for capital appreciation. On the other
hand, during periods when prevailing interest rates increase, the Portfolio's
yield will increase and its shareholders will have reduced risk of capital
depreciation.
For purposes of determining whether a variable rate instrument held by
the Portfolio matures within 397 days from the date of its acquisition, the
maturity of the instrument will be deemed to be the longer of (1) the period
required before the Portfolio is entitled to receive payment of the principal
amount of the instrument after notice or (2) the period remaining until the
instrument's next interest rate adjustment. The maturity of a variable rate
instrument will be determined in the same manner for purposes of computing the
Portfolio's dollar-weighted average portfolio maturity.
<PAGE> 93
-13-
"WHEN-ISSUED" SECURITIES
New issues of certain Municipal Obligations frequently are offered on
a "when-issued" or "forward delivery" basis. The payment obligation and the
interest rate that will be received on the Municipal Obligations are each fixed
at the time the buyer enters into the commitment although settlement, i.e.,
delivery of and payment for the Municipal Obligations, takes place beyond
customary settlement time (but normally within 45 days after the date of Tax
Free Reserves Portfolio's commitment to purchase). Although the Portfolio will
only make commitments to purchase "when-issued" or "forward delivery" Municipal
Obligations with the intention of actually acquiring them, the Portfolio may
sell these securities before the settlement date if deemed advisable by the
Adviser.
Municipal Obligations purchased on a "when-issued" or "forward
delivery" basis and the securities held by the Portfolio are subject to changes
in value (both generally changing in the same way, that is, both experiencing
appreciation when interest rates decline and depreciation when interest rates
rise) based upon the public's perception of the creditworthiness of the issuer
and changes, real or anticipated, in the level of interest rates. Purchasing
Municipal Obligations on a "when-issued" or "forward delivery" basis can
involve a risk that the yields available in the market on the settlement date
may actually be higher or lower than those obtained in the transaction itself.
A separate account of the Portfolio consisting of cash or liquid debt
securities equal to the amount of the "when-issued" or "forward delivery"
commitments will be established at the Portfolio's custodian bank. For the
purpose of determining the adequacy of the securities in the account, the
deposited securities will be valued at market value. If the market value of
such securities declines, additional cash or highly liquid securities will be
placed in the account daily so that the value of the account will equal the
amount of the Portfolio's commitments. On the settlement date of the
"when-issued" or "forward delivery" securities, the Portfolio's obligations
will be met from then-available cash flow, sale of securities held in the
separate account, sale of other securities or, although not normally expected,
from sale of the "when-issued" or "forward delivery" securities themselves
(which may have a value greater or lesser than the Portfolio's payment
obligations). Sale of securities to meet such obligations may result in the
realization of capital gains or losses, which are not exempt from federal
income tax.
STAND-BY COMMITMENTS
When Tax Free Reserves Portfolio purchases Municipal Obligations it
may also acquire stand-by commitments from banks with respect to such Municipal
Obligations. The Portfolio also may acquire stand-by commitments from
broker-dealers. Under the stand-by commitment, a bank or broker-dealer agrees
to purchase at the Portfolio's option a specified Municipal Obligation at a
specified price. A stand-by commitment is the equivalent of a "put" option
acquired by the Portfolio with respect to a particular Municipal Obligation
held in the Portfolio's portfolio.
The amount payable to Tax Free Reserves Portfolio upon the exercise of
a stand-by commitment normally would be (1) the acquisition cost of the
Municipal Obligation (excluding any accrued interest paid on the acquisition),
less any amortized market premium or plus any amortized market or original
issue discount during the period the Portfolio owned the security, plus (2) all
interest accrued on the security since the last interest payment date during
the period the security was owned by the Portfolio. Absent unusual
circumstances relating to a change in market value, the Portfolio would value
the underlying Municipal Obligation at amortized cost. Accordingly, the
<PAGE> 94
-14-
amount payable by a bank or dealer during the time a stand-by commitment is
exercisable would be substantially the same as the market value of the
underlying Municipal Obligation. The Portfolio values stand-by commitments at
zero for purposes of computing the value of its net assets.
The stand-by commitments that Tax Free Reserves Portfolio may enter
into are subject to certain risks, which include the ability of the issuer of
the commitment to pay for the securities at the time the commitment is
exercised and the fact that the commitment is not marketable by the Portfolio
and the maturity of the underlying security will generally be different from
that of the commitment.
TAXABLE SECURITIES
Although Tax Free Reserves Portfolio attempts to invest 100% of its
net assets in tax-exempt Municipal Obligations, the Portfolio may invest up to
20% of the value of the Portfolio's net assets in securities of the kind
described below, the interest income on which is subject to federal income tax.
Circumstances in which the Portfolio may invest in taxable securities include
the following: (a) pending investment in the type of securities described
above; (b) to maintain liquidity for the purpose of meeting anticipated
withdrawals; and (c) when, in the opinion of the Adviser, it is advisable to do
so because of adverse market conditions affecting the market for Municipal
Obligations. The kinds of taxable securities in which the Portfolio's assets
may be invested are limited to the following short-term, fixed-income
securities (maturing in 397 days or less from the time of purchase): (1)
obligations of the U.S. Government or its agencies, instrumentalities or
authorities; (2) commercial paper rated Prime-1 or Prime-2 by Moody's, A-1+,
A-1 or A-2 by Standard & Poor's or F-1+, F-1 or F-2 by Fitch; (3) certificates
of deposit of U.S. banks with assets of $1 billion or more; and (4) repurchase
agreements with respect to any Municipal Obligations or other securities which
the Portfolio is permitted to own. The Portfolio's assets may also be invested
in Municipal Obligations which are subject to an alternative minimum tax.
REPURCHASE AGREEMENTS
Tax Free Reserves Portfolio may invest assets in instruments subject
to repurchase agreements only with member banks of the Federal Reserve System
or "primary dealers" (as designated by the Federal Reserve Bank of New York) in
U.S. Government securities. Under the terms of a typical repurchase agreement,
the Portfolio would acquire an underlying debt instrument for a relatively
short period (usually not more than one week) subject to an obligation of the
seller to repurchase and the Portfolio to resell the instrument at a fixed
price and time, thereby determining the yield during the Portfolio's holding
period. This results in a fixed rate of return insulated from market
fluctuations during such period. A repurchase agreement is subject to the risk
that the seller may fail to repurchase the security. Repurchase agreements may
be deemed to be loans under the 1940 Act. All repurchase agreements entered
into by the Portfolio shall be fully collateralized at all times during the
period of the agreement in that the value of the underlying security shall be
at least equal to the amount of the loan, including the accrued interest
thereon, and the Portfolio or its custodian or sub-custodian shall have
possession of the collateral, which the Portfolio's Board of Trustees believes
will give it a valid, perfected security interest in the collateral. Whether a
repurchase agreement is the purchase and sale of a security or a collateralized
loan has not been definitively established. This might become an issue in the
event of the bankruptcy of the other party to the transaction. In the event of
default by the seller under a
<PAGE> 95
-15-
repurchase agreement construed to be a collateralized loan, the underlying
securities are not owned by the Portfolio but only constitute collateral for
the seller's obligation to pay the repurchase price. Therefore, the Portfolio
may suffer time delays and incur costs in connection with the disposition of
the collateral. The Portfolio's Board of Trustees believes that the collateral
underlying repurchase agreements may be more susceptible to claims of the
seller's creditors than would be the case with securities owned by the
Portfolio. Repurchase agreements will give rise to income which will not
qualify as tax-exempt income when distributed by the Portfolio. The Portfolio
will not invest in a repurchase agreement maturing in more than seven days if
any such investment together with illiquid securities held by the Portfolio
exceed 10% of the Portfolio's total net assets. Repurchase agreements are also
subject to the same risks described herein with respect to stand-by
commitments.
<PAGE> 96
-16-
LENDING OF SECURITIES
Consistent with applicable regulatory requirements and in order to
generate income, each of the Portfolios may lend its securities to
broker-dealers and other institutional borrowers. Such loans will usually be
made only to member banks of the U.S. Federal Reserve System and to member
firms of the New York Stock Exchange ("NYSE") (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. A
Portfolio would have the right to call a loan and obtain the securities loaned
at any time on customary industry settlement notice (which will not usually
exceed five days). During the existence of a loan, a Portfolio would continue
to receive the equivalent of the interest or dividends paid by the issuer on
the securities loaned and would also receive compensation based on investment
of the collateral. The Portfolio would not, however, have the right to vote any
securities having voting rights during the existence of the loan, but would
call the loan in anticipation of an important vote to be taken among holders of
the securities or of the giving or withholding of their consent on a material
matter affecting the investment. As with other extensions of credit, there are
risks of delay in recovery or even loss of rights in the collateral should the
borrower fail financially. However, the loans would be made only to entities
deemed by the Adviser to be of good standing, and when, in the judgment of the
Adviser, the consideration which can be earned currently from loans of this
type justifies the attendant risk. If the Adviser determines to make loans, it
is not intended that the value of the securities loaned by a Portfolio would
exceed 33 1/3% of the value of its net assets.
INVESTMENT RESTRICTIONS
The Trust, on behalf of the Funds, and the Portfolios have each
adopted the following policies which may not be changed without approval by
holders of a "majority of the outstanding shares" of the applicable Fund or
Portfolio, which as used in this Statement of Additional Information means the
vote of the lesser of (i) 67% or more of the outstanding voting securities of
the Fund or Portfolio present at a meeting, if the holders of more than 50% of
the outstanding "voting securities" of the Fund or Portfolio are present or
represented by proxy, or (ii) more than 50% of the outstanding "voting
securities" of the Fund or the Portfolio. The term "voting securities" as used
in this paragraph has the same meaning as in the 1940 Act. Whenever the Trust
is requested to vote on a change in the investment restrictions of a Portfolio
(or, in the case of Cash Reserves Portfolio, its concentration policy described
in paragraph (1) under "Investment Policies-Cash Reserves Portfolio" or, in the
case of Tax Free Reserves Portfolio, its policy with respect to municipal
obligations described in paragraph (1) under "Investment Policies-Tax Free
Reserves Portfolio"), the Trust will hold a meeting of the corresponding
Fund's shareholders and will cast its vote as instructed by the shareholders.
Each Fund will vote the shares held by its shareholders who do not give voting
instructions in the same proportion as the shares of that Fund's shareholders
who do give voting instructions. Shareholders of the Funds who do not vote will
have no effect on the outcome of these matters.
Neither the Trust, on behalf of a Fund, nor a Portfolio may:
(1) borrow money, except that as a temporary measure for extraordinary
or emergency purposes either the Trust or the Portfolio may borrow from banks
in an amount not to exceed 1/3 of the value of the net assets of the Fund or
the Portfolio, respectively, including the amount borrowed (moreover, neither
the Trust (on behalf of the Fund) nor the Portfolio may purchase any securities
<PAGE> 97
-17-
at any time at which borrowings exceed 5% of the total assets of the Fund or
the Portfolio, respectively (taken in each case at market value)) (it is
intended that the Fund and the Portfolio would borrow money only from banks and
only to accommodate requests for the repurchase of shares of the Fund or the
withdrawal of all or a portion of a beneficial interest in the Portfolio while
effecting an orderly liquidation of securities); for additional related
restrictions, see clause (i) under the caption "Operating Restrictions" below;
(2) purchase any security or evidence of interest therein on margin,
except that either the Trust, on behalf of the Fund, or the Portfolio may
obtain such short term credit as may be necessary for the clearance of
purchases and sales of securities;
(3) underwrite securities issued by other persons, except that all the
assets of the Fund may be invested in the Portfolio and except insofar as
either the Trust or the Portfolio may technically be deemed an underwriter
under the Securities Act of 1933 in selling a security;
(4) make loans to other persons except (a) through the lending of
securities held by either the Fund or the Portfolio, but not in excess of 33
1/3% of the Fund's or the Portfolio's net assets, as the case may be, (b)
through the use of repurchase agreements (or, in the case of Liquid Reserves
and Cash Reserves Portfolio, fixed time deposits) or the purchase of short term
obligations, or (c) by purchasing all or a portion of an issue of debt
securities of types commonly distributed privately to financial institutions;
for purposes of this paragraph 4 the purchase of a portion of an issue of debt
securities which is part of an issue to the public (and in the case of Tax Free
Reserves, Tax Free Reserves Portfolio, Liquid Reserves and Cash Reserves
Portfolio, short term commercial paper) shall not be considered the making of a
loan; for additional related restrictions, see clause (x) under the caption
"Operating Restrictions" below;
(5) purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests
therein), interests in oil, gas or mineral leases, commodities or commodity
contracts in the ordinary course of business (the Trust on behalf of each Fund
and the Portfolio reserve the freedom of action to hold and to sell real estate
acquired as a result of the ownership of securities by the Fund or the
Portfolio);
(6) in the case of Liquid Reserves and Cash Reserves Portfolio,
purchase securities of any one issuer (other than obligations of the U.S.
Government, its agencies or instrumentalities, which may be purchased without
limitation) if immediately after such purchase more than 5% of the value of its
assets would be invested in the securities of such issuer (provided, however,
that the Trust may invest, on behalf of Liquid Reserves, all of its assets in a
diversified, open-end management investment company with substantially the same
investment objectives, policies and restrictions as the Fund);
(7) in the case of U.S. Treasury Reserves and U.S. Treasury Reserves
Portfolio, concentrate its investment in any particular industry; provided that
nothing in this Investment Restriction is intended to affect the ability to
invest 100% of U.S. Treasury Reserves' assets in U.S. Treasury Reserves
Portfolio;
(8) in the case of Tax Free Reserves, Tax Free Reserves Portfolio,
Liquid Reserves and Cash Reserves Portfolio, concentrate its investments in any
particular industry, but, if it is deemed appropriate for the achievement of
its investment objective, up to 25% of the assets of Tax Free
<PAGE> 98
-18-
Reserves, Tax Free Reserves Portfolio, Liquid Reserves or Cash Reserves
Portfolio, respectively (taken at market value at the time of each investment)
may be invested in any one industry, except that each of Tax Free Reserves
Portfolio and Cash Reserves Portfolio will invest at least 25% of its assets
and may invest up to 100% of its assets in bank obligations; provided that, if
the Trust withdraws the investment of Tax Free Reserves from Tax Free Reserves
Portfolio or Liquid Reserves from Cash Reserves Portfolio, the Trust will
invest the assets of the applicable Fund in bank obligations to the same extent
and with the same reservation as its corresponding Portfolio; and provided,
further that nothing in this Investment Restriction is intended to affect Tax
Free Reserves' ability to invest 100% of its assets in Tax Free Reserves
Portfolio or Liquid Reserves' ability to invest 100% of its assets in Cash
Reserves Portfolio; or
(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.
For purposes of Investment Restriction (8) above, "bank obligations,"
when used with respect to Tax Free Reserves and Tax Free Reserve Portfolio,
shall include bank participation interests in Municipal Obligations.
NON-FUNDAMENTAL RESTRICTIONS
Neither the Trust, on behalf of any of the Funds, nor the
corresponding Portfolio will as a matter of operating policy:
(i) borrow money for any purpose in excess of 10% of the total assets
of the Fund or Portfolio (taken in each case at cost),
(ii) pledge, mortgage or hypothecate for any purpose in excess of 10%
of the net assets of the Fund or Portfolio (taken in each case at market
value),
(iii) sell any security which it does not own unless by virtue of its
ownership of other securities it has 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 the corresponding
Portfolio,
(v) purchase securities issued by any registered investment company,
except that all of the assets of the Fund may be invested in the corresponding
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, and except when such purchase, though not made
in the open market, is part of a plan of merger or consolidation; provided,
however, that the Trust (on behalf of the Fund) and the Portfolio will not
purchase the securities of any registered investment company if such purchase
at the time thereof would cause more than 10% of the total assets of the Fund
or the Portfolio, respectively (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
by the Fund or Portfolio; and provided, further, that neither the Fund nor the
Portfolio shall purchase securities issued by any open-end investment company,
<PAGE> 99
-19-
(vi) taken together with any investments described in clause (x)
below, invest more than 10% of the net assets of the Fund or the Portfolio in
securities that are not readily marketable, including debt securities for which
there is no established market (and, in the case of Liquid Reserves and Cash
Reserves Portfolio, fixed time deposits) and repurchase agreements maturing in
more than seven days, except that all the assets of the Fund may be invested in
the corresponding Portfolio,
(vii) purchase securities of any issuer if such purchase at the time
thereof would cause it to hold more than 10% of any class of securities of such
issuer, for which purposes all indebtedness of an issuer shall be deemed a
single class, except that all the assets of the Fund may be invested in the
corresponding Portfolio,
(viii) purchase or retain any securities issued by an issuer any of
whose officers, directors, trustees or security holders is an officer or
Trustee of the Trust or the Portfolio, or is an officer or director of the
Adviser, if after the purchase of the securities of such issuer by the Trust,
on behalf of the Fund, or the Portfolio, one or more of such persons owns
beneficially more than 1/2 of 1% of the shares or securities, or both, all
taken at market value, of such issuer, and such persons owning more than 1/2 of
1% of such shares or securities together own beneficially more than 5% of such
shares or securities, or both, all taken at market value,
(ix) write, purchase or sell any put or call option or any combination
thereof,
(x) 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, in the case of Liquid Reserves and Cash
Reserves Portfolio, repurchase agreements and fixed time deposits maturing in
not more than seven days) if, as a result thereof, more than 10% of the net
assets of the Fund or the Portfolio, respectively, (in each case taken at
market value) would be so invested (including, in the case of Liquid Reserves
and Cash Reserves Portfolio, repurchase agreements maturing in more than seven
days), except that all the assets of the Fund may be invested in the Portfolio,
(xi) 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 or the Portfolio, respectively, except that all the assets of
the Fund may be invested in the Portfolio, or
(xii) make short sales of securities or maintain a short position,
unless at all times when a short position is open it owns an equal amount of
such securities or securities convertible into or exchangeable, without payment
of any further consideration, for securities of the same issue as, and equal in
amount to, the securities sold short, and unless not more than 10% of the net
assets of the Fund or the Portfolio respectively (in each case taken at market
value) is held as collateral for such sales at any one time (the Funds and the
Portfolios do not presently intend to make such sales).
These policies are not fundamental and may be changed by the Trust
with respect to a Fund without approval by the Fund's shareholders, or by a
Portfolio without approval by the corresponding Fund or its other investors.
<PAGE> 100
-20-
DESIGNATION OF ISSUER OF SECURITIES
For purposes of the investment restrictions described above for Tax
Free Reserves and Tax Free Reserves Portfolio, the issuer of a tax-exempt
security is deemed to be the entity (public or private) ultimately responsible
for the payment of principal of and interest on the security. When the assets
and revenues of an agency, authority, instrumentality or other political
subdivision are separate from those of the government creating the issuing
entity and a security is backed only by the assets and revenues of the entity.
would be deemed to be the sole issuer of the security. Similarly, in the case
of an industrial development bond, if that bond is backed only by the assets
and revenues of the non-governmental user, then such non-governmental user
would be deemed to be the sole issuer. If, however, in either case, the
creating government or some other entity, such as an insurance company or other
corporate obligor, guarantees a security or a bank issues a letter of credit,
such a guarantee or letter of credit may, in accordance with applicable SEC
rules, be considered a separate security and could be treated as an issue of
such government, other entity or bank.
PERCENTAGE AND RATING RESTRICTIONS
If a percentage restriction or a rating restriction (other than a
restriction as to borrowing) on investment or utilization of assets set forth
above or referred to in the Prospectus is adhered to at the time an investment
is made or assets are so utilized, a later change in percentage resulting from
changes in the value of the securities held by a Fund or a Portfolio or a later
change in the rating of a security held by the Fund or the Portfolio is not
considered a violation of policy.
3. PERFORMANCE INFORMATION
Any current yield quotation of a Fund which is used in such a manner
as to be subject to the provisions of Rule 482(d) under the Securities Act of
1933, as amended, consists of an annualized historical yield, carried at least
to the nearest hundredth of one percent, based on a specific seven calendar day
period and is calculated by dividing the net change in the value of an account
having a balance of one share at the beginning of the period by the value of
the account at the beginning of the period and multiplying the quotient by
365/7. For this purpose the net change in account value would reflect the value
of additional shares purchased with dividends declared on the original share
and dividends declared on both the original share and any such additional
shares, but would not reflect any realized gains or losses as a result of the
Fund's investment in the Portfolio or any unrealized appreciation or
depreciation on portfolio securities. In addition, any effective yield
quotation of a Fund so used shall be calculated by compounding the current
yield quotation for such period by multiplying such quotation by 7/365, adding
1 to the product, raising the sum to a power equal to 365/7, and subtracting 1
from the result.
Any tax equivalent yield quotation of a Fund is calculated as follows:
If the entire current yield quotation for such period is tax-exempt, the tax
equivalent yield will be the current yield quotation divided by 1 minus a
stated income tax rate or rates. If a portion of the current yield quotation is
not tax-exempt, the tax equivalent yield will be the sum of (a) that portion of
the yield which is tax-exempt divided by 1 minus a stated income tax rate or
rates and (b) the portion of the yield which is not tax-exempt.
A total rate of return quotation for a Fund is calculated for any
period by (a) dividing (i) the sum of the net asset value per share on the last
day of the period and the net asset value per share on the last day of the
period of shares purchasable with dividends and capital gains distributions
<PAGE> 101
-21-
declared during such period with respect to a share held at the beginning of
such period and with respect to shares purchased with such dividends and
capital gains distributions, by (ii) the public offering price on the first day
of such period, and (b) subtracting 1 from the result. 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.
Any tax equivalent total rate of return quotation of a Fund is
calculated as follows: If the entire current total rate of return quotation for
such period is tax-exempt, the tax equivalent total rate of return will be the
current total rate of return quotation divided by 1 minus a stated income tax
rate or rates. If a portion of the current total rate of return quotation is
not tax-exempt, the tax equivalent total rate of return will be the sum of (a)
that portion of the total rate of return which is tax-exempt divided by 1 minus
a stated income tax rate or rates and (b) the portion of the total rate of
return which is not tax-exempt.
Set forth below is total rate of return information, assuming that
dividends and capital gains distributions, if any, were reinvested, for Liquid
Reserves and U.S. Treasury Reserves for the periods indicated, at the beginning
of which periods no sales charges were applicable to purchases of shares of the
Funds. No shares of Tax Free Reserves were outstanding during the fiscal year
ended August 31, 1996.
<TABLE>
<CAPTION>
REDEEMABLE VALUE OF A
HYPOTHETICAL $1,000
ANNUALIZED TOTAL INVESTMENT AT THE END
PERIOD RATE OF RETURN OF THE PERIOD
<S> <C> <C>
LIQUID RESERVES
October 2, 1992 (commencement of operations)
to August 31, 1996 4.61% $1,193.13
One year ended August 31, 1996 5.66% $1,056.60
U.S. TREASURY RESERVES
October 2, 1992 (commencement of operations)
to August 31, 1996 4.24% $1,176.36
One year ended August 31, 1996 5.17% $1,051.70
</TABLE>
The annualized yield of Liquid Reserves for the seven-day period ended
August 31, 1996 was 5.30%. The effective compound annualized yield of Liquid
Reserves for such period was 5.44%. The annualized yield of U.S. Treasury
Reserves for the seven-day period ended August 31, 1996 was 4.93%, the
effective compound annualized yield of U.S. Treasury Reserves for such period
was 5.05%.
4. DETERMINATION OF NET ASSET VALUE
The net asset value of each of the shares of each Fund is determined
on each day on which the NYSE is open for trading. This determination is made
once during each such day as of 3:00 p.m., Eastern time, for Liquid Reserves,
and 12:00 noon, Eastern time, for U.S. Treasury Reserves
<PAGE> 102
-22-
and Tax Free Reserves, by dividing the value of the Fund's net assets (i.e.,
the value of its investment in its Portfolio and other 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. As of the date of
this Statement of Additional Information, the NYSE 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. It is
anticipated that the net asset value of each share of each Fund will remain
constant at $1.00 and, although no assurance can be given that they will be
able to do so on a continuing basis, as described below, the Funds and
Portfolios employ specific investment policies and procedures to accomplish
this result.
The value of a Portfolio's net assets (i.e., the value of its
securities and other assets less its liabilities, including expenses payable or
accrued) is determined at the same time and on the same days as the net asset
value per share of the corresponding Fund is determined. The net asset value of
a Fund's investment in the corresponding Portfolio is equal to the Fund's pro
rata share of the total investment of the Fund and of other investors in the
Portfolio less the Fund's pro rata share of the Portfolio's liabilities.
The securities held by a Fund or Portfolio are valued at their
amortized cost. Amortized cost valuation involves valuing an instrument at its
cost and thereafter assuming a constant amortization to maturity of any
discount or premium. If fluctuating interest rates cause the market value of
the securities held by the Fund or Portfolio to deviate more than 1/2 of 1%
from their value determined on the basis of amortized cost, the Fund's or
Portfolio's Board of Trustees will consider whether any action should be
initiated, as described in the following paragraph. Although the amortized cost
method provides certainty in valuation, it may result in periods during which
the stated value of an instrument is higher or lower than the price the Fund or
Portfolio would receive if the instrument were sold.
Pursuant to the rules of the Securities and Exchange Commission
("SEC"), the Trust's and the Portfolios' Boards of Trustees have established
procedures to stabilize the value of the Funds' and Portfolios' net assets
within 1/2 of 1% of the value determined on the basis of amortized cost. These
procedures include a review of the extent of any such deviation of net asset
value, based on available market rates. Should that deviation exceed 1/2 of 1%
for a Fund or a Portfolio, the Trust's or Portfolio's Board of Trustees of the
applicable Fund or Portfolio will consider whether any action should be
initiated to eliminate or reduce material dilution or other unfair results to
the investors in the Fund or Portfolio. Such action may include withdrawal in
kind, selling securities prior to maturity and utilizing a net asset value as
determined by using available market quotations. The Funds and Portfolios
maintain a dollar-weighted average maturity of 90 days or less, do not purchase
any instrument with a remaining maturity greater than 397 days or (in the case
of Liquid Reserves and Cash Reserves Portfolio) subject to a repurchase
agreement having a duration of greater than 397 days, limit their investments,
including repurchase agreements, to those U.S. dollar-denominated instruments
that are determined by the Adviser to present minimal credit risks and comply
with certain reporting and recordkeeping procedures. The Trust and Portfolios
also have established procedures to ensure that securities purchased by the
Funds and Portfolios meet high quality criteria. (See "Investment Objectives,
Policies and Restrictions -- Investment Policies.")
<PAGE> 103
-23-
Subject to compliance with applicable regulations, the Trust and the
Portfolios have each reserved the right to pay the redemption price of shares
of the Funds or beneficial interests in the Portfolios, either totally or
partially, by a distribution in kind of readily marketable securities (instead
of cash). The securities so distributed would be valued at the same amount as
that assigned to them in calculating the net asset value for the shares or
beneficial interests being sold. If a holder of shares or beneficial interests
received a distribution in kind, such holder could incur brokerage or other
charges in converting the securities to cash.
The Trust or the Portfolios may suspend the right of redemption or
postpone the date of payment for shares of a Fund or beneficial interests in a
Portfolio more than seven days during any period when (a) trading in the
markets the Fund or Portfolio normally utilizes is restricted, or an emergency,
as defined by the rules and regulations of the SEC, exists making disposal of
the Fund's or Portfolio's investments or determination of its net asset value
not reasonably practicable; (b) the NYSE is closed (other than customary
weekend and holiday closings); or (c) the SEC has by order permitted such
suspension.
5. MANAGEMENT
The Trustees and officers of the Trust and the Portfolios, their ages
and their principal occupations during the past five years are set forth below.
Their titles may have varied during that period. Asterisks indicate that those
Trustees and officers are "interested persons" (as defined in the 1940 Act) of
the Trust or a Portfolio. Unless otherwise indicated below, the address of each
Trustee and officer is 6 St. James Avenue, Boston, Massachusetts. The address
of Cash Reserves Portfolio is Elizabethan Square, George Town, Grand Cayman,
British West Indies. The address of U.S. Treasury Reserves Portfolio and Tax
Free Reserves Portfolio is 6 St. James Avenue, Boston, Massachusetts.
TRUSTEES OF THE TRUST
PHILIP W. COOLIDGE; aged 45* -- President of the Trust and the Portfolios;
Chairman, Chief Executive Officer and President, Signature Financial Group,
Inc. and The Landmark Funds Broker-Dealer Services, Inc. (since December,
1988).
RILEY C. GILLEY; aged 70 -- Vice President and General Counsel, Corporate
Property Investors (December, 1988 to September, 1991); Partner, Breed, Abbott
& Morgan (Attorneys) (retired, December, 1987). His address is 4041 Gulf Shore
Boulevard North, Naples, Florida.
DIANA R. HARRINGTON; aged 56 -- 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 Kidder, Peabody & Co. Incorporated (since January, 1990).
Her address is 120 Goulding Street, Holliston, Massachusetts.
SUSAN B. KERLEY; aged 45 -- 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.
TRUSTEES OF THE PORTFOLIOS
<PAGE> 104
-24-
ELLIOTT J. BERV; aged 53 -- Chairman and Director, Catalyst, Inc. (Management
Consultants) (since August, 1992); President, Chief Operating Officer and
Director, Deven International, Inc. (International Consultants) (June, 1991 to
July, 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; aged 45* -- President of the Trust and the Portfolios;
Chairman, Chief Executive Officer and President, Signature Financial Group,
Inc. and The Landmark Funds Broker-Dealer Services, Inc. (since December,
1988).
MARK T. FINN; aged 53 -- 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 (since October, 1988). His address is 3500 Pacific Avenue,
P.O. Box 539, Virginia Beach, Virginia.
WALTER E. ROBB, III; aged 70-- 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 PORTFOLIOS
PHILIP W. COOLIDGE; aged 45* -- President of the Trust and the Portfolios;
Chairman, Chief Executive Officer and President, Signature Financial Group,
Inc. and The Landmark Funds Broker-Dealer Services, Inc. (since December,
1988).
SAMANTHA M. BURGESS; 27* -- Assistant Secretary and Assistant Treasurer;
Assistant Vice President, Signature Financial Group, Inc. (since November
1995); Graduate Student, Loyola University (prior to August 1995).
CHRISTINE A. DRAPEAU; 26* -- Assistant Secretary and Assistant Treasurer;
Assistant Vice President, Signature Financial Group, Inc. (since January
1996); Paralegal and Compliance Officer, various financial companies (July 1992
to January 1996); Graduate Student, Bentley College (prior to December 1994).
JOHN R. ELDER; aged 48* -- Treasurer of the Trust and the Portfolios; Vice
President, Signature Financial Group, Inc. (since April 1995); Treasurer,
Phoenix Family of Mutual Funds (Phoenix Home Life Mutual Insurance Company)
(from 1983 to March 1995).
LINDA T. GIBSON; aged 31* -- Secretary of the Trust and the Portfolios; Vice
President, Signature Financial Group, Inc. (since June 1991); law student,
Boston University School of Law (from September 1989 to May 1992).
JOAN A. GULINELLO; 41* -- Assistant Secretary and Assistant Treasurer; Vice
President, Signature Financial Group, Inc. (since October 1993); Secretary, The
Landmark Funds Broker-Dealer Services, Inc. (since October 1995); Vice
President and Assistant General Counsel, Massachusetts Financial Services
Company (prior to October 1993).
<PAGE> 105
-25-
SUSAN JAKUBOSKI; aged 32* -- Vice President, Assistant Treasurer and Assistant
Secretary of Cash Reserves Portfolio and Assistant Secretary of the 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; aged 45* -- Assistant Secretary of the Trust and the
Portfolios; Vice President, Signature Financial Group, Inc. (since December,
1988); Assistant Secretary, The Landmark Funds Broker-Dealer Services, Inc.
(since December, 1988).
KARYN A. NOKE; 25* -- Vice President, Assistant Secretary and Assistant
Treasurer; Vice President, Signature Financial Group (Cayman) Limited (since
September 1996); Assistant Vice President, Signature Financial Group, Inc. (May
1993 to August 1996); Student, University of Massachusetts (prior to May 1993).
SHARON M. WHITSON; 48* -- Assistant Secretary and Assistant Treasurer;
Assistant Vice President, Signature Financial Group, Inc. (since November
1992); Associate Trader Massachusetts Financial Services Company (prior to
November 1992).
JULIE J. WYETZNER; 37* -- Vice President, Assistant Secretary and Assistant
Treasurer; Vice President, Signature Financial Group, Inc.
The Trustees and officers of the Trust and the Portfolios also hold
comparable positions with certain other funds for which LFBDS or an affiliate
serves as the distributor or administrator.
TRUSTEES COMPENSATION TABLE
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE TOTAL
COMPENSATION FROM COMPENSATION FROM COMPENSATION
INSTITUTIONAL LIQUID INSTITUTIONAL U.S. FROM THE TRUST
TRUSTEE RESERVES(1) TREASURY RESERVES(1) AND COMPLEX(2)
<S> <C> <C> <C>
Philip W. Coolidge 0 0 0
Riley C. Gilley $11,910 $2,597 $46,000
Diana R. Harrington $11,038 $2,526 $44,000
Susan B. Kerley $10,275 $2,422 $42,000
</TABLE>
(1) For the fiscal year ended August 31, 1996.
(2) Information relates to the fiscal year ended August 31, 1996. Messrs.
Coolidge and Gilley and Mses. Harrington and Kerley are trustees of 33, 16, 16
and 16 Funds, respectively, of the Landmark Family of Funds.
<PAGE> 106
-26-
As of December 16, 1996, all Trustees and officers as a group owned
less than 1% of each Fund's outstanding shares. As of the same date, more than
95% of the outstanding shares of Liquid Reserves and more than 95% of the
outstanding shares of U.S. Treasury Reserves were held of record by Citibank,
N.A. or an affiliate, as a Shareholder Servicing Agent of the Funds, for the
accounts of their respective clients, and no shares of Tax Free Reserves were
outstanding.
The Declaration of Trust of each of the Trust and the Portfolios
provides that the Trust or such Portfolio, as the case may be, will indemnify
its Trustees and officers against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
offices with the Trust or such Portfolio, as the case may be, unless, as to
liability to the Trust or such Portfolio or its respective investors, it is
finally adjudicated that they engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in their offices, or
unless with respect to any other matter it is finally adjudicated that they did
not act in good faith in the reasonable belief that their actions were in the
best interests of the Trust or such Portfolio, as the case may be. In the case
of settlement, such indemnification will not be provided unless it has been
determined by a court or other body approving the settlement or other
disposition, or by a reasonable determination, based upon a review of readily
available facts, by vote of a majority of disinterested Trustees of the Trust
or such Portfolio, or in a written opinion of independent counsel, that such
officers or Trustees have not engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties.
ADVISER
Citibank manages the assets of each Portfolio pursuant to separate
investment advisory agreements (the "Advisory Agreements"). Subject to such
policies as the Board of Trustees of a Portfolio may determine, the Adviser
manages the securities of the Portfolio and makes investment decisions for the
Portfolio. The Adviser furnishes at its own expense all services, facilities
and personnel necessary in connection with managing the Portfolios' investments
and effecting securities transactions for each Portfolio. Each of the Advisory
Agreements will continue in effect as long as such continuance is specifically
approved at least annually by the Board of Trustees of the applicable Portfolio
or by a vote of a majority of the outstanding voting securities of the
applicable Portfolio, and, in either case, by a majority of the Trustees of the
applicable Portfolio who are not parties to such Advisory Agreement or
interested persons of any such party, at a meeting called for the purpose of
voting on the Advisory Agreement.
Each of the Advisory Agreements provides that the Adviser may render
services to others. Each Advisory Agreement is terminable without penalty on
not more than 60 days' nor less than 30 days' written notice by the applicable
Portfolio when authorized either by a vote of a majority of the outstanding
voting securities of the applicable Portfolio or by a vote of a majority of the
Board of Trustees of the applicable Portfolio, or by the Adviser on not more
than 60 days' nor less than 30 days' written notice, and will automatically
terminate in the event of its assignment. Each Advisory Agreement provides that
neither the Adviser nor its personnel shall be liable for any error of judgment
or mistake of law or for any loss arising out of any investment or for any act
or omission in the execution of security transactions for the applicable
Portfolio, except for willful misfeasance, bad faith or gross negligence or
reckless disregard of its or their obligations and duties under the Advisory
Agreement.
<PAGE> 107
-27-
The Prospectus contains a description of the fees payable to the
Adviser for services under the Advisory Agreements. Cash Reserves Portfolio:
For the fiscal years ended August 31, 1994, 1995 and 1996, the fees payable
from Cash Reserves Portfolio to Citibank under the Advisory Agreement were
$1,806,314, $4,097,854 and $6,140,512 (of which $943,419, $2,306,161 and
$3,426,821, respectively, were voluntarily waived).
U.S. Treasury Reserves Portfolio: For the fiscal years ended August 31, 1994,
1995 and 1996, the fees payable from U.S. Treasury Reserves Portfolio to
Citibank under the Advisory Agreement were $850,924, $1,148,418 and $1,101,345
(of which $506,109, $753,105 and $727,401, respectively, were voluntarily
waived).
ADMINISTRATORS
Pursuant to Administrative Services Agreements (the "Administrative
Services Agreements"), LFBDS provides the Trust, Tax Free Reserves Portfolio
and U.S. Treasury Reserves Portfolio, and SFG provides Cash Reserves Portfolio,
with general office facilities, and LFBDS supervises the overall administration
of the Trust, Tax Free Reserves Portfolio and U.S. Treasury Reserves Portfolio
and SFG supervises the overall administration of Cash Reserves Portfolio,
including, among other responsibilities, the negotiation of contracts and fees
with, and the monitoring of performance and billings of, the independent
contractors and agents of the Trust and the Portfolios; the preparation and
filing of all documents required for compliance by the Trust and the Portfolios
with applicable laws and regulations; and arranging for the maintenance of
books and records of the Trust and the Portfolios. LFBDS and SFG provide
persons satisfactory to the Board of Trustees of the Trust and the Portfolios
to serve as Trustees and officers of the Trust and the Portfolios. Such
Trustees and officers may be directors, officers or employees of LFBDS, SFG or
their affiliates.
The Prospectus contains a description of the fees payable to LFBDS and
SFG under the Administrative Services Agreements.
Liquid Reserves: For the fiscal years ended August 31, 1994, 1995 and 1996, the
fees payable to LFBDS from Liquid Reserves under the Administrative Services
Agreement were $468,172, $1,014,974 and $4,118,565 (of which $231,690, $914,591
and $3,142,409, respectively, were voluntarily waived). For Cash Reserves
Portfolio's fiscal years ended August 31, 1994, 1995 and 1996, the fees payable
to SFG under the Administrative Services Agreement were $602,105, $1,365,951
and $2,046,838 (all of which were voluntarily waived).
U.S. Treasury Reserves: For the fiscal years ended August 31, 1994, 1995 and
1996, the fees payable from U.S. Treasury Reserves to LFBDS under the
Administrative Services Agreement were $140,961, $214,600 and $573,577 (of
which $119,704, $80,255 and $451,888, respectively, were voluntarily waived).
For the fiscal years ended August 31, 1994, 1995 and 1996, the fees payable to
LFBDS under the Administrative Services Agreement with U.S. Treasury Reserves
Portfolio were $283,642, $382,806 and $367,115 (all of which were voluntarily
waived).
The Administrative Services Agreement with the Trust acknowledges that
the names "Landmark" and "Landmark Funds" are the property of LFBDS and
provides that if LFBDS ceases to serve as the administrator of the Trust, the
Trust and the Funds will change their respective names so as to delete the word
"Landmark" or the words "Landmark Funds." The Administrative
<PAGE> 108
-28-
Services Agreement with the Trust also provides that LFBDS may render
administrative services to others and may permit other investment companies in
addition to the Trust to use the word "Landmark" or the words "Landmark Funds"
in their names.
The Administrative Services Agreement with the Trust continues in
effect as to a Fund if such continuance is specifically approved at least
annually by the Trust's Board of Trustees or by a vote of a majority of the
outstanding voting securities of such Fund and, in either case, by a majority
of the Trustees of the Trust who are not interested parties of the Trust or
LFBDS. The Administrative Services Agreement with the Trust terminates
automatically if it is assigned and may be terminated as to a Fund by the Trust
without penalty by vote of a majority of the outstanding voting securities of
the Fund or by either party on not more than 60 days' nor less than 30 days'
written notice. The Administrative Services Agreement with the Trust also
provides that neither LFBDS nor its personnel shall be liable for any error of
judgment or mistake of law or for any act or omission in the administration or
management of the Trust, except for willful misfeasance, bad faith or gross
negligence in the performance of its or their duties or by reason of reckless
disregard of its or their obligations and duties under the Administrative
Services Agreement.
LFBDS has agreed to reimburse the Funds for their operating expenses
(exclusive of interest, taxes, brokerage, and extraordinary expenses) which in
any year exceed the limits prescribed by any state in which the Funds' shares
are qualified for sale. The expenses incurred by the Funds for distribution
purposes pursuant to the Trust's Distribution Plans are included within such
operating expenses only to the extent required by any state in which the Funds'
shares are qualified for sale. The Trust may elect not to qualify the Funds'
shares for sale in every state. The Trust believes that currently the most
restrictive expense ratio limitation imposed by any state is 2 1/2 % of the
first $30 million of a Fund's average net assets for its then-current fiscal
year, 2% of the next $70 million of such assets, and 1 1/2 % of such assets in
excess of $100 million. For the purpose of this obligation to reimburse
expenses, the Funds' annual expenses are estimated and accrued daily, and any
appropriate estimated payments will be made by LFBDS. Subject to the obligation
of LFBDS to reimburse the Funds for their excess expenses as described above,
the Trust has, under its Administrative Services Agreement, confirmed its
obligation for payment of all other expenses of the Funds.
The Administrative Services Agreements with the Portfolios provide
that LFBDS or SFG, as the case may be, may render administrative services to
others. The Administrative Services Agreement with each of the Portfolios
terminates automatically if it is assigned and may be terminated without
penalty by a vote of a majority of the outstanding voting securities of the
Portfolio or by either party on not more than 60 days' nor less than 30 days'
written notice. The Administrative Services Agreement with each of the
Portfolios also provides that neither LFBDS or SFG, as the case may be, nor its
personnel shall be liable for any error of judgment or mistake of law or for
any act or omission in the administration or management of the Portfolio,
except for willful misfeasance, bad faith or gross negligence in the
performance of its or their duties or by reason of reckless disregard of its or
their obligations and duties under the Administrative Services Agreement.
LFBDS and SFG are wholly-owned subsidiaries of Signature Financial
Group, Inc.
<PAGE> 109
-29-
Pursuant to Sub-Administrative Services Agreements (the
"Sub-Administrative Agreements"), Citibank performs such sub-administrative
duties for the Trust and the Portfolios as are from time to time agreed upon by
Citibank and, as the case may be, LFBDS or SFG. Citibank's sub-administrative
duties may include providing equipment and clerical personnel necessary for
maintaining the organization of the Trust and the Portfolios, participation in
preparation of documents required for compliance by the Trust and the
Portfolios with applicable laws and regulations, preparation of certain
documents in connection with meetings of Trustees and shareholders of the Trust
and Portfolios, and other functions which would otherwise be performed by LFBDS
as set forth above. For performing such sub-administrative services, Citibank
receives such compensation as is from time to time agreed upon by Citibank and,
as the case may be, LFBDS or SFG not in excess of the amount paid to LFBDS or
SFG for its services under the applicable Administrative Services Agreement.
All such compensation is paid by LFBDS or SFG, as the case may be.
DISTRIBUTOR
The Trust has adopted a Distribution Plan (the "Distribution Plan") in
accordance with Rule 12b-1 under the 1940 Act after having concluded that there
is a reasonable likelihood that the Distribution Plan will benefit the Funds
and their shareholders. The Distribution Plan provides that the Distributor
receives a fee from each Fund at an annual rate not to exceed 0.10% of the
Fund's average daily net assets in anticipation of, or as reimbursement for,
expenses incurred in connection with the sale of shares of the Fund, such as
advertising expenses and the expenses of printing (excluding typesetting) and
distributing prospectuses and reports used for sales purposes, expenses of
preparing and printing sales literature and other distribution related
expenses.
The Distribution Plan continues in effect if such continuance is
specifically approved at least annually by a vote of both a majority of the
Trust's Trustees and a majority of the Trust's Trustees who are not "interested
persons" of the Trust and who have no direct or indirect financial interest in
the operation of the Distribution Plan or in any agreement related to such Plan
("Qualified Trustees"). The Distribution Plan requires that at least quarterly
the Trust and the Distributor provide to the Board of Trustees and the Board of
Trustees review a written report of the amounts expended (and the purposes
therefor) under the Distribution Plan. The Distribution Plan further provides
that the selection and nomination of the Trust's Qualified Trustees is
committed to the discretion of the Trust's disinterested Trustees then in
office. The Distribution Plan may be terminated with respect to the applicable
Fund at any time by a vote of a majority of the Trust's Qualified Trustees or
by a vote of a majority of the outstanding voting securities of that Fund. The
Distribution Plan may not be amended to increase materially the amount of the
Funds' permitted expenses thereunder without the approval of a majority of the
outstanding voting securities of the applicable Fund and may not be materially
amended in any case without a vote of the majority of both the Trust's Trustees
and the Trust's Qualified Trustees. The Distributor will preserve copies of any
plan, agreement or report made pursuant to the Distribution Plan for a period
of not less than six years from the date of the Distribution Plan, and for the
first two years the Distributor will preserve such copies in an easily
accessible place.
As contemplated by the Distribution Plan, LFBDS acts as the agent of
the Funds in connection with the offering of shares of the Funds pursuant to
Distribution Agreement (the "Distribution Agreement"). After the prospectus and
periodic reports have been prepared, set in type and mailed to existing
shareholders, the Distributor pays for the printing and distribution of
<PAGE> 110
-30-
copies of the prospectuses and periodic reports which are used in connection
with the offering of shares of the Funds to prospective investors. The
Prospectus contains a description of fees payable to the Distributor under the
Distribution Agreement.
Liquid Reserves: For the fiscal years ended August 31, 1994, 1995 and 1996, the
fees payable from Liquid Reserves to the Distributor under the Distribution
Agreement were $312,115, $676,649 and $1,176,733 (of which $296,822, $676,649
and $1,176,733 were voluntarily waived), respectively.
U.S. Treasury Reserves: For the the fiscal years ended August 31, 1994, 1995
and 1996, the fees payable from U.S. Treasury Reserves to the Distributor under
the Distribution Agreement were $93,974, $143,067 and $163,879 (of which
$82,858, $141,847 and $159,656 were voluntarily waived), respectively.
SHAREHOLDER SERVICING AGENTS, TRANSFER AGENT AND CUSTODIAN
The Trust has adopted an Administrative Services Plan (the
"Administrative Plan") which provides that the Trust may obtain the services of
an administrator, a transfer agent, a custodian and one or more Shareholder
Servicing Agents, and may enter into agreements providing for the payment of
fees for such services. Under the Administrative Plan, the aggregate of the fee
paid to the Administrator from each Fund and the fees paid to the Shareholder
Servicing Agents from each Fund may not exceed 0.45% of the applicable Fund's
average daily net assets on an annualized basis for the Fund's then-current
fiscal year. The Administrative Plan continues in effect if such continuance is
specifically approved at least annually by a vote of both a majority of the
Trust's Trustees and a majority of the Trust's Trustees who are not "interested
persons" of the Trust and who have no direct or indirect financial interest in
the operation of the Administrative Plan or in any agreement related to such
Plan ("Qualified Trustees"). The Administrative Plan requires that the Trust
provide to the Trust's Board of Trustees and the Trust's Board of Trustees
review, at least quarterly, a written report of the amounts expended (and the
purposes therefor) under the Administrative Plan. The Administrative Plan may
be terminated at any time with respect to a Fund by a vote of a majority of the
Trust's Qualified Trustees or by a vote of a majority of the outstanding voting
securities of the Fund. The Administrative Plan may not be amended to increase
materially the amount of permitted expenses thereunder without the approval of
a majority of the outstanding voting securities of a Fund and may not be
materially amended in any case without a vote of the majority of both the
Trust's Trustees and the Trust's Qualified Trustees.
The Trust has entered into a shareholder servicing agreement (a
"Servicing Agreement") with each Shareholder Servicing Agent and a Transfer
Agency and Service Agreement and a Custodian Agreement with State Street Bank
and Trust Company ("State Street") pursuant to which State Street (or its
affiliate State Street Canada, Inc.) acts as transfer agent and custodian for
the Trust. For additional information, including a description of fees paid to
the Shareholder Servicing Agents under the Servicing Agreements, see
"Management-Shareholder Servicing Agents" in the Prospectus. For the fiscal
years ended August 31, 1994 1995 and 1996, the aggregate fees payable from
Liquid Reserves to Shareholder Servicing Agents under the Servicing Agreement
were $936,344, $2,029,949 and $1,176,733 (all of which were voluntarily waived).
For the fiscal years ended August 31, 1994, 1995 and 1996, the aggregate fees
payable from U.S. Treasury Reserves to Shareholder Servicing Agents under the
Servicing Agreements were $281,921, $429,200 and $163,879 (all of which were
voluntarily waived).
<PAGE> 111
-31-
The Portfolios have also adopted Administrative Services Plans (the
"Portfolio Administrative Plans") which provide that the Portfolios may obtain
the services of an administrator, a transfer agent and a custodian, and may
enter into agreements providing for the payment of fees for such services.
Under the Portfolio Administrative Plans, the administrative services fee
payable to either LFBDS or SFG, as the case may be, may not exceed 0.05% of a
Portfolio's average daily net assets on an annualized basis for its
then-current fiscal year. Each Portfolio Administrative Plan continues in
effect if such continuance is specifically approved at least annually by a vote
of both a majority of the applicable Portfolio's Trustees and a majority of the
Portfolio's Trustees who are not "interested persons" of the Portfolio and who
have no direct or indirect financial interest in the operation of the Portfolio
Administrative Plan or in any agreement related to such Plan ("Qualified
Trustees"). Each Portfolio Administrative Plan requires that the applicable
Portfolio provide to its Board of Trustees and the Board of Trustees review, at
least quarterly, a written report of the amounts expended (and the purposes
therefor) under the Portfolio Administrative Plan. Each Portfolio
Administrative Plan may be terminated at any time by a vote of a majority of
the Portfolio's Qualified Trustees or by a vote of a majority of the
outstanding voting securities of the applicable Portfolio. Neither Portfolio
Administrative Plan may be amended to increase materially the amount of
permitted expenses thereunder without the approval of a majority of the
outstanding voting securities of the applicable Portfolio and may not be
materially amended in any case without a vote of the majority of both the
Portfolio's Trustees and the Portfolio's Qualified Trustees.
Each Portfolio has entered into a Transfer Agency and Service
Agreement and a Custodian Agreement with State Street pursuant to which State
Street (or its affiliate State Street Canada, Inc.) acts as transfer agent and
custodian and performs fund accounting services for the Portfolios.
6. PORTFOLIO TRANSACTIONS
The Portfolios' purchases and sales of portfolio securities usually
are principal transactions. Portfolio securities are normally purchased
directly from the issuer or from an underwriter or market maker for the
securities. There usually are no brokerage commissions paid for such purchases.
The Portfolios do not anticipate paying brokerage commissions. Any transaction
for which a Portfolio pays a brokerage commission will be effected at the best
price and execution available. Purchases from underwriters of portfolio
securities include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers serving as market makers include the
spread between the bid and asked price.
Allocation of transactions, including their frequency, to various
dealers is determined by the Adviser in its best judgment and in a manner
deemed to be in the best interest of investors in the applicable Portfolio
rather than by any formula. The primary consideration is prompt execution of
orders in an effective manner at the most favorable price.
Investment decisions for each Portfolio will be made independently
from those for any other account, series or investment company that is or may
in the future become managed by the Adviser or its affiliates. If, however, a
Portfolio and other investment companies, series or accounts managed by the
Adviser are contemporaneously engaged in the purchase or sale of the same
security, the transactions may be averaged as to price and allocated equitably
to each account. In some cases, this policy might adversely affect the price
paid or received by the Portfolio or the size of the position obtainable for
the Portfolio. In addition, when purchases or sales of the same
<PAGE> 112
-32-
security for a Fund, Portfolio and for other investment companies or series
managed by the Adviser occur contemporaneously, the purchase or sale orders may
be aggregated in order to obtain any price advantages available to large
denomination purchases or sales.
Portfolio transactions may be executed with the Adviser, or with any
affiliate of the Adviser, acting either as principal or as broker, subject to
applicable law. No commissions on portfolio transactions were paid by any
Portfolio during the fiscal year ended August 31, 1996 to the Adviser or any
affiliate of the Adviser.
7. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Trust's Declaration of Trust permits the Trust's Board of Trustees
to issue an unlimited number of full and fractional Shares of Beneficial
Interest ($0.00001 par value) of each series and to divide or combine the
shares of any series into a greater or lesser number of shares of that series
without thereby changing the proportionate beneficial interests in that series.
Currently, the Funds are the only three series of shares of the Trust. Each
share represents an equal proportionate interest in a Fund with each other
share. Upon liquidation or dissolution of a Fund, the Fund's shareholders are
entitled to share pro rata in the Fund's net assets available for distribution
to its shareholders. The Trust reserves the right to create and issue
additional series of shares. Shares of each series participate equally in the
earnings, dividends and distribution of net assets of the particular series
upon the liquidation or dissolution of the series. Shares of each series are
entitled to vote separately to approve advisory agreements or changes in
investment policy, but shares of all series may vote together in the election
or selection of Trustees and accountants for the Trust. In matters affecting
only a particular Fund, only shares of that Fund are entitled to vote.
Shareholders are entitled to one vote for each share held on matters
on which they are entitled to vote. Shareholders in the Trust do not have
cumulative voting rights, and shareholders owning more than 50% of the
outstanding shares of the Trust may elect all of the Trustees of the Trust if
they choose to do so and in such event the other shareholders in the Trust
would not be able to elect any Trustee. The Trust is not required and has no
present intention of holding annual meetings of shareholders but the Trust will
hold special meetings of a Fund's shareholders when in the judgment of the
Trust's Trustees it is necessary or desirable to submit matters for a
shareholder vote. Shareholders have under certain circumstances (e.g., upon
application and submission of certain specified documents to the Trustees by a
specified number of shareholders) the right to communicate with other
shareholders in connection with requesting a meeting of shareholders for the
purpose of removing one or more Trustees. Shareholders also have the right to
remove one or more Trustees without a meeting by a declaration in writing by a
specified number of shareholders. No material amendment may be made to the
Trust's Declaration of Trust without the affirmative vote of the holders of a
majority of its outstanding shares.
The Trust's Declaration of Trust provides that, at any meeting of
shareholders of the Trust or of any series of the Trust, a Shareholder
Servicing Agent may vote any shares of which it is the holder of record and for
which it does not receive voting instructions proportionately in accordance
with the instructions it receives for all other shares of which it is the
holder of record. Shares have no preference, pre-emptive, conversion or similar
rights. Shares, when issued, are fully paid and non-assessable, except as set
forth below.
<PAGE> 113
-33-
The Trust may enter into a merger or consolidation, or sell all or
substantially all of its assets (or all or substantially all of the assets
belonging to any series of the Trust), if approved by the vote of the holders
of two-thirds of the Trust's outstanding shares voting as a single class, or of
the affected series of the Trust, as the case may be, except that if the
Trustees of the Trust recommend such sale of assets, merger or consolidation,
the approval by vote of the holders of a majority of the Trust's or the
affected series' outstanding shares would be sufficient. The Trust or any
series of the Trust, as the case may be, may be terminated (i) by a vote of a
majority of the outstanding voting securities of the Trust or the affected
series or (ii) by the Trustees by written notice to the shareholders of the
Trust or the affected series. If not so terminated, the Trust will continue
indefinitely.
Share certificates will not be issued.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations and liabilities. However, the Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the
Trust and provides for indemnification and reimbursement of expenses out of
Trust property for any shareholder held personally liable for the obligations
of the Trust. The Declaration of Trust also provides that the Trust may
maintain appropriate insurance (e.g., fidelity bonding and errors and omissions
insurance) for the protection of the Trust, its shareholders, Trustees,
officers, employees and agents covering possible tort and other liabilities.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which both inadequate
insurance existed and the Trust itself was unable to meet its obligations.
The Trust's Declaration of Trust further provides that obligations of
the Trust are not binding upon the Trustees individually but only upon the
property of the Trust and that the Trustees will not be liable for any action
or failure to act, but nothing in the Declaration of Trust protects a Trustee
against any liability to which he or she would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of his or her office.
Each Portfolio is organized as a trust under the laws of the State of
New York. Each Portfolio's Declaration of Trust provides that investors in the
Portfolio (e.g., other investment companies (including the corresponding Fund),
insurance company separate accounts and common and commingled trust funds) are
each liable for all obligations of the Portfolio. However, the risk of a Fund
incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance existed and the applicable
Portfolio itself was unable to meet its obligations. It is not expected that
the liabilities of either Portfolio would ever exceed its assets.
Each investor in a Portfolio, including the corresponding Fund, may
add to or reduce its investment in the Portfolio on each business day. At 12:00
noon, Eastern time, in the case of Tax Free Reserves Portfolio and U.S.
Treasury Reserves Portfolio, and 3:00 p.m., Eastern time, in the case of Cash
Reserves Portfolio, on each such business day, the value of each investor's
interest in the Portfolio is determined by multiplying the net asset value of
the Portfolio by the percentage representing that investor's share of the
aggregate beneficial interests in the Portfolio effective for that day. Any
additions or withdrawals, which are to be effected on that day, are then
effected. The investor's percentage of the aggregate beneficial interests in
the Portfolio is then re-computed as
<PAGE> 114
-34-
the percentage equal to the fraction (i) the numerator of which is the value of
such investor's investment in the Portfolio as of 12:00 noon, Eastern time, for
Tax Free Reserves Portfolio and U.S. Treasury Reserves Portfolio, and 3:00
p.m., Eastern time, for Cash Reserves Portfolio, on such day plus or minus, as
the case may be, the amount of any additions to or withdrawals from the
investor's investment in the Portfolio effected on such day, and (ii) the
denominator of which is the aggregate net asset value of the Portfolio as of
12:00 noon, Eastern time, for Tax Free Reserves Portfolio and U.S. Treasury
Reserves Portfolio, and 3:00 p.m., Eastern time, for Cash Reserves Portfolio,
on such day plus or minus, as the case may be, the amount of the net additions
to or withdrawals from the aggregate investments in the Portfolio by all
investors in the Portfolio. The percentage so determined is then applied to
determine the value of the investor's interest in the Portfolio as of 12:00
noon, Eastern time, for Tax Free Reserves Portfolio and U.S. Treasury Reserves
Portfolio, and 3:00 p.m., Eastern time, for Cash Reserves Portfolio, on the
following business day of the Portfolio.
8. CERTAIN ADDITIONAL TAX MATTERS
Each of the Funds has elected to be treated and intends to qualify
each year as a "regulated investment company" under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), by meeting all
applicable requirements of Subchapter M, including requirements as to the
nature of the Fund's gross income, the amount of Fund distributions, and the
composition and holding period of the Fund's portfolio assets. Provided all
such requirements are met and all of a Fund's net investment income and
realized capital gains are distributed to shareholders in accordance with the
timing requirements imposed by the Code, no federal income or excise taxes will
be required to be paid by the Fund. If a Fund should fail to qualify as a
regulated investment company for any year, the Fund would incur a regular
corporate federal income tax upon its taxable income and Fund distributions
would generally be taxable as ordinary dividend income to shareholders. Each of
the Portfolios believes that it will not be required to pay any federal income
or excise taxes.
The portion of Tax Free Reserves' distributions of net investment
income that is attributable to interest from tax-exempt securities will be
designated by the Fund as an "exempt-interest dividend" under the Code and will
generally be exempt form federal income tax in the hands of shareholders so
long as at least 50% of the total value of the Fund's assets consists of
tax-exempt securities at the close of each quarter of the Fund's taxable year.
Distributions of tax-exempt interest earned from certain securities may,
however, be treated as an item of tax preference for shareholders under the
federal alternative minimum tax, and all exempt-interest dividends may increase
a corporate shareholder's alternative minimum tax. Unless the Fund provides
shareholders with actual monthly percentage breakdowns, the percentage of
income designated as tax-exempt will be applied uniformly to all distributions
by the Fund of net investment income made during each fiscal year of the Fund
and may differ from the percentage of distributions consisting of tax-exempt
interest in any particular month. Shareholders are required to report
exempt-interest dividends received from the Fund on their federal income tax
returns.
Investment income received by Liquid Reserves from non-U.S.
investments may be subject to foreign income taxes withheld at the source;
Liquid Reserves does not expect to be able to pass through to shareholders any
foreign tax credits with respect to those foreign taxes. The United States has
entered into tax treaties with many foreign countries that may entitle Liquid
Reserves to a reduced rate of tax or an exemption from tax on these
investments. It is not possible to determine
<PAGE> 115
-35-
Liquid Reserves' effective rate of foreign tax in advance since that rate
depends upon the proportion of the Cash Reserves Portfolio's assets ultimately
invested within various countries.
Because each Fund expects to earn primarily interest income, it is
expected that no Fund distributions will qualify for the dividends-received
deduction for corporations.
9. INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS
Price Waterhouse LLP and Price Waterhouse are the independent and
chartered accountants for Liquid Reserves and Cash Reserves Portfolio,
respectively, providing audit services and assistance and consultation with
respect to the preparation of filings with the SEC. Deloitte & Touche LLP are
the independent certified public accountants for Tax Free Reserves, Tax Free
Reserves Portfolio, U.S. Treasury Reserves and U.S. Treasury Reserves
Portfolio, providing audit services and assistance and consultation with
respect to the preparation of filings with the SEC.
The audited financial statements of Liquid Reserves (Statement of
Assets and Liabilities at August 31, 1996, Statement of Operations for the year
ended August 31, 1996, Statement of Changes in Net Assets for the years ended
August 31, 1996 and 1995, Financial Highlights for the years ended August 31,
1996, 1995 and 1994 and the period from October 2, 1992 (commencement of
operations) to August 31, 1993, Notes to Financial Statements and Independent
Auditors' Report) and of Cash Reserves Portfolio (Portfolio of Investments at
August 31, 1996, Statement of Assets and Liabilities at August 31, 1996,
Statement of Operations for the year ended August 31, 1996, Statement of
Changes in Net Assets for each of the years ended August 31, 1996 and 1995,
Financial Highlights for each of the years in the five-year period ended August
31, 1996, Notes to Financial Statements and Independent Auditors' Report), each
of which is included in the Annual Report to Shareholders of Liquid Reserves,
are incorporated by reference into this Statement of Additional Information and
have been so incorporated in reliance upon the report of Price Waterhouse LLP
and Price Waterhouse as experts in accounting and auditing.
The audited financial statements of U.S. Treasury Reserves (Statement
of Assets and Liabilities at August 31, 1996, Statement of Operations for the
year ended August 31, 1996, Statement of Changes in Net Assets for the years
ended August 31, 1996, and 1995, Financial Highlights for the years ended
August 31, 1996, 1995 and 1994, the eight months ended August 31, 1993 and the
period October 2, 1992 (commencement of operations) to December 31, 1992, the
Notes to Financial Statements and the Independent Auditors' Report) and of U.S.
Treasury Reserves Portfolio (Portfolio of Investments at August 31, 1996,
Statement of Assets and Liabilities at August 31, 1996, Statement of Operations
for the year ended August 31, 1996, Statement of Changes in Net Assets for the
years ended August 31, 1996 and 1995, Financial Highlights for the years ended
August 31, 1996, 1995 and 1994, the eight-month period ended August 31, 1993,
the year ended December 31, 1992 and the period March 1, 1991 (commencement of
operations) to December 31, 1991, the Notes to Financial Statements and the
Independent Auditors' Report), each
<PAGE> 116
-36-
of which is included in the Annual Report to Shareholders of U.S. Treasury
Reserves, are incorporated by reference into this Statement of Additional
Information and have been so incorporated in reliance upon the report of
Deloitte & Touche LLP, independent certified public accountants, as experts in
accounting and auditing.
A copy of each of the Annual Reports accompanies this Statement of
Additional Information.
<PAGE> 117
-37-
SHAREHOLDER SERVICING AGENTS
FOR PRIVATE BANKING CLIENTS:
Citibank, N.A.
The Citibank Private Bank
153 East 53rd Street, New York, NY 10043
Call Your Citibank Private Banking Account Officer, Registered Representative
or (212) 559-5959
FOR CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY l0043
(212) 559-7117
FOR NORTH AMERICAN INVESTOR SERVICES CLIENTS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
Call Your Account Manager or (212) 657-9100
<PAGE> 118
-38-
LANDMARK INSTITUTIONAL LIQUID RESERVES
LANDMARK INSTITUTIONAL U.S. TREASURY RESERVES
LANDMARK INSTITUTIONAL TAX FREE RESERVES
TRUSTEES AND OFFICERS
Philip W. Coolidge, President*
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
SECRETARY
Linda T. Gibson*
TREASURER
John R. Elder*
*Affiliated Person of Administrator and Distributor
INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043
ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679
TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
AUDITORS
(For Landmark Institutional Liquid Reserves)
Price Waterhouse LLP
160 Federal Street, Boston, MA 02110
(For Landmark Institutional U.S. Treasury Reserves and Landmark Institutional
Tax Free Reserves
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110
LEGAL COUNSEL
Bingham, Dana & Gould LLP
150 Federal Street, Boston, MA 02110
<PAGE> 119
-39-
SHAREHOLDER SERVICING AGENTS
(See Inside of Cover)
<PAGE> 120
PART C
Item 24. Financial Statements and Exhibits.
(a) FINANCIAL STATEMENTS INCLUDED IN PART A:
(i) Landmark Institutional Liquid Reserves
Condensed Financial Information - Financial
Highlights for the period from October 2, 1992
(commencement of operations) to August 31, 1993 and
for the years ended August 31, 1994, August 31, 1995
and August 31, 1996.
(ii) Landmark Institutional U.S. Treasury Reserves
Condensed Financial Information - Financial
Highlights for the period from October 2, 1992
(commencement of operations) to December 31, 1992,
for the eight-month period ended August 31, 1993 and
for the years ended August 31, 1994, August 31, 1995
and August 31, 1996.
FINANCIAL STATEMENTS INCLUDED IN PART B:
(i) Landmark Institutional Liquid Reserves
Statement of Assets and Liabilities at August
31, 1996*
Statement of Operations for the year ended August 31,
1996*
Statement of Changes in Net Assets for the years
ended August 31, 1996 and August 31, 1995*
Financial Highlights for the period from October 2,
1992 (commencement of operations) to August 31, 1993
and for the years ended August 31, 1994, August 31,
1995 and August 31, 1996*
(ii) Cash Reserves Portfolio
Portfolio of Investments at August 31, 1996*
Statement of Assets and Liabilities at August 31,
1996*
Statement of Operations for the year ended August 31,
1996*
Statement of Changes in Net Assets for the years ended
August 31, 1996 and August 31, 1995*
Financial Highlights for each of the years in the
five-year period ended August 31, 1996*
(iii) Landmark Institutional U.S. Treasury Reserves
Statement of Assets and Liabilities at August 31,
1996**
Statement of Operations for the year ended August 13,
1996**
Statement of Changes in Net Assets for the years ended
August 31, 1996 and August 31, 1995**
Financial Highlights for the years ended August 31,
1996, August 31, 1995 and August 31, 1994, the eight
months ended August 31, 1993 and the period from
October 2, 1992 (commencement of operations) to
December 31, 1992**
(iv) U.S. Treasury Reserves Portfolio
Portfolio of Investments at August 31, 1996**
Statement of Assets and Liabilities at August 31,
1996**
Statement of Operations for the year ended August 31,
1996**
Statement of Changes in Net Assets for the years ended
August 31, 1996 and August 31, 1995**
Financial Highlights for the years ended August 31,
1996, August 31, 1995 and August 31, 1994, for the
eight-month period ended August 31, 1993, for
<PAGE> 121
the year ended December 31, 1992 and for the period
from March 1, 1991 (commencement of operations) to
December 31, 1991**
- --------------
* Incorporated by reference to the Registrant's Annual Report to
Shareholders of Landmark Institutional Liquid Reserves for the fiscal
year ended August 31, 1996, filed with the Securities and Exchange
Commission on the EDGAR system on October 29, 1996 (Accession
Number 0000950156-96-000850).
** Incorporated by reference to the Registrant's Annual Report to
Shareholders of Landmark Institutional U.S. Treasury Reserves for the
fiscal year ended August 31, 1996, filed with the Securities and
Exchange Commission on the EDGAR system on October 29, 1996 (Accession
Number 0000950156-96-000850).
(b) Exhibits.
**** 1(a) Declaration of Trust of the Registrant
**** and 1(b) Amendments to Declaration of Trust of the
***** Registrant
**** 2(a) Amended and Restated By-Laws of the
Registrant
**** 2(b) Amendments to Amended and Restated By-Laws
of the Registrant
* 4 Form of Certificate representing ownership
of a share of beneficial interest in the
Registrant
**** 6(a) Distribution Agreement between the
Registrant and The Landmark Funds
Broker-Dealer Services, Inc. ("LFBDS")
*** 6(b) Form of Amended and Restated Distribution
Agreement, with respect to Class A Shares
of Landmark Institutional Liquid Reserves,
between the Registrant and LFBDS, as
distributor
*** 6(c) Form of Distribution Agreement, with
respect to Class C Shares of Landmark
Institutional Liquid Reserves, between the
Registrant and LFBDS, as distributor
*** 6(d) Form of Distribution Agreement, with
respect to Class D Shares of Landmark
Institutional Liquid Reserves, between the
Registrant and LFBDS, as distributor
**** 7 Custodian Contract between the Registrant
and State Street Bank and Trust Company
("State Street"), as custodian
**** 9(a) Amended and Restated Administrative
Services Plan of the Registrant with
respect to Landmark Institutional U.S.
Treasury Reserves and Landmark
Institutional Tax Free Reserves
*** 9(b) Form of Amended and Restated
Administrative Services Plan of the
Registrant, with respect to Class A Shares
of Landmark Institutional Liquid Reserves
**** 9(c) Administrative Services Agreement between
the Registrant and LFBDS, as administrator
**** 9(d) Form of Sub-Administrative Services
Agreement between Citibank, N.A. and LFBDS
*** 9(e)(i) Form of Amendment to Shareholder Servicing
Agreement
**** 9(e)(ii) Form of Shareholder Servicing Agreement
between the Registrant and Citibank, N.A.,
as shareholder servicing agent
C-2
<PAGE> 122
**** 9(e)(iii) Form of Shareholder Servicing Agreement
between the Registrant and a federal
savings bank, as shareholder servicing
agent
**** 9(e)(iv) Form of Shareholder Servicing Agreement
between the Registrant and LFBDS, as
shareholder servicing agent
**** 9(f) Transfer Agency and Servicing Agreement
between the Registrant and State Street,
as transfer agent
**** 9(g) Amended and Restated Exchange Privilege
Agreement between the Registrant, certain
other investment companies and LFBDS, as
distributor
**** and 10 Opinion and Consent of Counsel
*****
11 Consent of Deloitte & Touche LLP,
independent auditors of Landmark
Institutional U.S. Treasury Reserves and
U.S. Treasury Reserves Portfolio,
Price Waterhouse LLP, independent auditors
of Landmark Institutional Liquid Reserves,
and Price Waterhouse, independent auditors
of Cash Reserves Portfolio
**** 15(a) Amended and Restated Distribution Plan of
the Registrant with respect to Landmark
Institutional U.S. Treasury Reserves and
Landmark Institutional Tax Free Reserves
*** 15(b) Form of Amended and Restated Distribution
Plan of the Registrant, with respect to
Class A Shares of Landmark Institutional
Liquid Reserves
*** 15(c) Form of Service Plan of the Registrant,
with respect to Class C Shares of Landmark
Institutional Liquid Reserves
*** 15(d) Form of Service Plan of the Registrant,
with respect to Class D Shares of Landmark
Institutional Liquid Reserves
*** 18 Multiple Class Plan with respect to
Landmark Institutional Liquid Reserves
25(a) Powers of Attorney for the Registrant
25(b) Powers of Attorney for U.S. Treasury
Reserves Portfolio
**, **** and 25(c) Powers of Attorney for Cash Reserves
filed herewith Portfolio filed herewith
25(d) Powers of Attorney for Tax Free Reserves
Portfolio
27 Financial data schedule
- ------------------
* Information defining the rights of shareholders is contained in the
Registrant's Declaration of Trust, as amended, incorporated herein by
reference.
** Incorporated herein by reference to Post-Effective Amendment No. 4 to
the Registrant's Registration Statement on Form N-1A (File No.
33-49554) as filed with the Securities and Exchange Commission on
November 3, 1994 and Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form N-1A (File No. 33-49552)
as filed with the Securities and Exchange Commission on December 28,
1995.
*** Incorporated herein by reference to Post-Effective Amendment No. 5 to
the Registrant's Registration Statement on Form N-1A (File No.
33-49552) as filed with the Securities and Exchange Commission on June
17, 1996.
**** Incorporated herein by reference to Post-Effective Amendment No. 6 to
the Registrant's Registration Statement on Form N-1A (File No.
33-49552) as filed with the Securities and Exchange Commission on
August 28, 1996.
C-3
<PAGE> 123
***** Incorporated herein by reference to Post-Effective Amendment No. 7 to
the Registrant's Registration Statement on Form N-1A (File No.
33-49552) as filed with the Securities and Exchange Commission on
October 1, 1996.
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 As of December 16, 1996
($0.00001 par value)
Landmark Institutional Liquid Reserves 4
Landmark Institutional U.S. Treasury Reserves 3
Landmark Institutional Tax Free Reserves 0
Item 27. Indemnification.
Reference is hereby made to (a) Article V of the Registrant's
Declaration of Trust, filed as an Exhibit to the Registrant's Registration
Statement on Form N-1A; (b) Section 4 of the Distribution Agreement between the
Registrant and The Landmark Funds Broker-Dealer Services, Inc., filed as an
Exhibit to the Registrant's Registration Statement on Form N-1A; and (c) the
undertaking of the Registrant regarding indemnification set forth in its
Registration Statement on Form N-1A.
The Trustees and officers of the Registrant and the personnel of the
Registrant's administrator are insured under an errors and omissions liability
insurance policy. The Registrant and its officers are also insured under the
fidelity bond required by Rule 17g-1 under the Investment Company Act of 1940.
Item 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 (Balanced Portfolio, Equity Portfolio, Government Income Portfolio,
International Equity Portfolio, Emerging Asian Markets Equity Portfolio and
Small Cap Equity 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 New York
Tax Free Income Fund and Landmark National Tax Free Income Fund), Asset
Allocation Portfolios (Asset Allocation Portfolio 200, Asset Allocation
Portfolio 300, Asset Allocation Portfolio 400 and Asset Allocation Portfolio
500), Landmark VIP Funds (Landmark VIP U.S. Government Fund, Landmark VIP
Balanced Fund, Landmark VIP Equity Fund and Landmark VIP International Equity
Fund), and Variable Annuity Portfolios (CitiSelect(SM) VIP Folio 200,
CitiSelect(SM) VIP Folio 300, CitiSelect(SM) VIP Folio 400, CitiSelect(SM) VIP
Folio 500 and Landmark Small Cap Equity VIP Fund). As of
C-4
<PAGE> 124
December 31, 1995, Citibank and its affiliates managed assets in excess of $83
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, William R. Rhodes and H. Onno Ruding. 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, 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.
DuPont De Nemours & Company.
Each of the individuals named above is also a Director of Citicorp. In
addition, the following persons have the affiliations indicated:
D. Wayne Calloway Director, Exxon Corporation
Director, General Electric Company
Director, PepsiCo., Inc.
Colby H. Chandler Director, Digital Equipment Corporation
Director, Ford Motor Company
Director, J.C. Penney Company, Inc.
Paul J. Collins Director, Kimberly-Clark Corporation
Kenneth T. Derr Director, American Telephone and Telegraph, Co.
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
Tampa Tank & Welding, Inc.
C-5
<PAGE> 125
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
Board Member, Corning, Incorporated
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, Silicon Graphics
Director, Monsanto Company
Director, The Nutrasweet Company
Frank A. Shrontz Director, 3M
Director, Baseball of Seattle, Inc.
Director, Boeing Company
Director, Boise Cascade Corp.
Roger B. Smith Director, International Paper Company
Director, Johnson & Johnson
Director, Pepsico, Inc.
Franklin A. Thomas Director, Aluminum Company of America
Director, American Telephone and Telegraph, Co.
Director, Cummins Engine Company, Inc.
Director, Pepsico, Inc.
Edgar S. Woolard, Jr. Director, E.I. DuPont De Nemours & Company
Item 29. Principal Underwriters.
(a) The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS"), the
Registrant's Distributor, is also the distributor for Landmark International
Equity Fund, Landmark Emerging Asian Markets Equity Fund, Premium U.S. Treasury
Reserves, Premium Liquid Reserves, Landmark Tax Free Reserves, Landmark Cash
Reserves, Landmark U.S. Treasury 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 Small Cap Equity
C-6
<PAGE> 126
Fund, Landmark National Tax Free Income Fund, Landmark New York Tax Free Income
Fund, Landmark VIP Funds (Landmark VIP U.S. Government Fund, Landmark VIP
Balanced Fund, Landmark VIP Equity Fund and Landmark VIP International
Equity Fund),CitiSelect (SM) Folio 200, CitiSelect(SM) Folio 300,
CitiSelect(SM) Folio 400, CitiSelect(SM) Folio 500, and Variable Annuity
Portfolios (CitiSelect(SM) VIP Folio 200, CitiSelect(SM) VIP Folio 300,
CitiSelect(SM) VIP Folio 400, CitiSelect(SM) VIP Folio 500 and Landmark Small
Cap Equity VIP Fund). LFBDS is also the placement agent for International
Equity Portfolio, Balanced Portfolio, Equity Portfolio, Small Cap Equity
Portfolio, Government Income Portfolio, Emerging Asian Markets Equity
Portfolio, Asset Allocation Portfolio 200, Asset Allocation Portfolio 300,
Asset Allocation Portfolio 400 and Asset Allocation Portfolio 500.
(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 Services, Inc. 6 St. James Avenue
(administrator and distributor) Boston, MA 02116
State Street Bank and Trust Company 1776 Heritage Drive
(custodian and transfer agent) North Quincy, MA 02171
Citibank, N.A. 153 East 53rd Street
(investment adviser) New York, NY 10043
SHAREHOLDER SERVICING AGENTS
Citibank, N.A. -- The Citibank 153 East 53rd Street
Private Bank New York, NY 10043
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 10094
The Landmark Funds Broker-Dealer Services, Inc. 6 St. James Avenue
Boston, MA 02116
C-7
<PAGE> 127
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
(a) 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 Landmark Institutional Tax Free
Reserves.
(b) The Registrant hereby undertakes to call a meeting of
shareholders for the purpose of voting upon the question of
removal of one or more of the Trust's Trustees when requested
in writing to do so by the holders of at least 10% of the
Registrant's outstanding shares, and in connection therewith
to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder
communication.
(c) The Registrant undertakes to furnish to each person to whom a
prospectus of Landmark Institutional Liquid Reserves, Landmark
Institutional U.S. Treasury Reserves and Landmark
Institutional Tax Free Reserves is delivered with a copy of
the Funds' latest Annual Report to Shareholders, upon request
without charge.
C-8
<PAGE> 128
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 the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boston and
Commonwealth of Massachusetts on the 16th day of December, 1996.
LANDMARK INSTITUTIONAL TRUST
By: Philip W. Coolidge
Philip W. Coolidge, President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities indicated below on December 16, 1996.
Signature Title
--------- -----
Philip W. Coolidge President, Principal Executive
--------------------------- Officer and Trustee
Philip W. Coolidge
John R. Elder Principal Accounting and
--------------------------- Financial Officer
John R. Elder
Riley C. Gilley* Trustee
---------------------------
Riley C. Gilley
Diana R. Harrington* Trustee
---------------------------
Diana R. Harrington
Susan B. Kerley* Trustee
---------------------------
Susan B. Kerley
*By: Philip W. Coolidge
---------------------------
Philip W. Coolidge
Executed by Philip W. Coolidge on behalf of
those indicated pursuant to Powers of
Attorney.
<PAGE> 129
SIGNATURES
U.S. Treasury Reserves Portfolio has duly caused this Post-Effective
Amendment to the Registration Statement on Form N-1A of Landmark Institutional
Trust to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston and Commonwealth of Massachusetts on the 16th day of
December, 1996.
U.S. TREASURY RESERVES PORTFOLIO
By: Philip W. Coolidge
-----------------------------
Philip W. Coolidge, President
This Post-Effective Amendment to the Registration Statement on Form
N-1A of Landmark Institutional Trust has been signed by the following persons
in the capacities indicated on December 16, 1996.
Signature Title
--------- -----
Philip W. Coolidge President, Principal Executive
----------------------------- Officer and Trustee
Philip W. Coolidge
John R. Elder Principal Accounting and
----------------------------- Financial Officer
John R. Elder
Elliott J. Berv* Trustee
-----------------------------
Elliott J. Berv
Mark T. Finn* Trustee
-----------------------------
Mark T. Finn
Walter E. Robb, III* Trustee
-----------------------------
Walter E. Robb, III
*By: Philip W. Coolidge
-----------------------------
Philip W. Coolidge
Executed by Philip W. Coolidge on behalf of
those indicated pursuant to Powers of
Attorney.
<PAGE> 130
SIGNATURES
Cash Reserves Portfolio has duly caused this Post-Effective Amendment
to the Registration Statement on Form N-1A of Landmark Institutional Trust to
be signed on its behalf by the undersigned, thereunto duly authorized, in George
Town, Grand Cayman, British West Indies on the 16th day of December, 1996.
CASH RESERVES PORTFOLIO
By: Susan Jakuboski
-----------------------------
Susan Jakuboski, Assistant Treasurer
This Post-Effective Amendment to the Registration Statement on Form
N-1A of Landmark Institutional Trust has been signed by the following persons
in the capacities indicated on December 16, 1996.
Signature Title
--------- -----
Philip W. Coolidge* President, Principal
--------------------------- Executive Officer and Trustee
Philip W. Coolidge
John R. Elder* Principal Accounting and
--------------------------- Financial Officer John R. Elder
John R. Elder
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 pursuant to Powers of Attorney.
<PAGE> 131
SIGNATURES
Tax Free Reserves Portfolio has duly caused this Post-Effective
Amendment to the Registration Statement on Form N-1A of Landmark Institutional
Trust to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston and Commonwealth of Massachusetts on the 16th day of
December, 1996.
TAX FREE RESERVES PORTFOLIO
By: Philip W. Coolidge
---------------------------
Philip W. Coolidge, President
This Post-Effective Amendment to the Registration Statement on Form
N-1A of Landmark Institutional Trust has been signed by the following persons
in the capacities indicated on December 16, 1996.
Signature Title
--------- -----
Philip W. Coolidge President, Principal Executive
---------------------------- Officer and Trustee
Philip W. Coolidge
John R. Elder Principal Accounting and Financial
---------------------------- Officer
John R. Elder
Elliott J. Berv* Trustee
----------------------------
Elliott J. Berv
Mark T. Finn* Trustee
----------------------------
Mark T. Finn
Walter E. Robb, III* Trustee
----------------------------
Walter E. Robb, III
*By: Philip W. Coolidge
----------------------------
Philip W. Coolidge
Executed by Philip W. Coolidge on behalf of
those indicated pursuant to Powers of
Attorney.
<PAGE> 132
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No.: Description:
------- -------------------
<S> <C>
11 Consent of Deloitte & Touche LLP, independent
auditors of Landmark Institutional U.S.
Treasury Reserves and U.S. Treasury Reserves
Portfolio, Price Waterhouse LLP, independent
auditors of Landmark Institutional Liquid
Reserves, and Price Waterhouse, independent
auditor of Cash Reserves Portfolio
25(a) Powers of Attorney for the Registrant
25(b) Powers of Attorney for U.S. Treasury Reserves Portfolio
25(c) Powers of Attorney for Cash Reserves Portfolio
25(d) Powers of Attorney for Tax Free Reserves Portfolio
27 Financial data schedule
</TABLE>
<PAGE> 1
Exhibit 11
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post Effective Amendment
No. 8 to Registration Statement No. 33-49554 of Landmark Institutional Trust of
our reports each dated October 4, 1996 appearing in the annual report to
shareholders for the year ended August 31, 1996 of Landmark Institutional U.S.
Treasury Reserves (a series of Landmark Institutional Trust) and U.S. Treasury
Reserves Portfolio, and to the references to us under the headings "Condensed
Financial Information" in the Prospectus and "Independent Accountants and
Financial Statements" in the Statement of Additional Information, both of which
are part of such Registration Statement.
DELOITTE & TOUCHE LLP
- -------------------------
Deloitte & Touche LLP
Boston, Massachusetts
December 17, 1996
<PAGE> 2
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Statement of
Additional Information constituting parts of this Post-Effective Amendment
No.8 to the registration statement on Form N-1A (the "Registration Statement")
of Landmark Institutional Trust of our report dated October 9, 1996, relating
to the financial statements and financial highlights of the Cash Reserves
Portfolio appearing in the August 31, 1996 Annual Report of Landmark
Institutional Liquid Reserves, which are also incorporated by reference into
the Registration Statement. We also consent to the reference to us under the
heading "Independent Accountants and Financial Statement" in the Statement of
Additional Information.
Price Waterhouse
Chartered Accountants
Toronto, Ontario
December 17, 1996
<PAGE> 3
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 8 to the registration statement on Form N-1A (the "Registration
Statement") of Landmark Institutional Trust of our report dated October 9,
1996, relating to the financial statements and financial highlights of Landmark
Institutional Liquid Reserves, appearing in the August 31, 1996 Annual Report
of Landmark Institutional Liquid Reserves, which are also incorporated by
reference into the Registration Statement. We also consent to the references to
us under the heading "Condensed Financial Information" in the Prospectus and
under the heading "Independent Accountants and Financial Statements" in the
Statement of Additional Information.
Price Waterhouse LLP
Price Waterhouse LLP
Boston, Massachusetts
December 17, 1996
<PAGE> 1
Exhibit 25(a)
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as her true and lawful attorneys and agents to
execute in her name and on her behalf in any and all capacities the
Registration Statements on Form N-1A, and any and all amendments thereto, filed
by Landmark Institutional Trust (on behalf of its series, Landmark
Institutional Liquid Reserves, Landmark Institutional U.S. Treasury Reserves,
and Landmark Institutional Tax Free Reserves) (the "Registrant") with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, and under the Investment Company Act of 1940, as amended, and any and
all other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrant to comply with the Securities
Act of 1933, as amended and the Investment Company Act of 1940, as amended, the
rules, regulations and requirements of the Securities and Exchange Commission,
and the securities or Blue Sky laws of any state or other jurisdiction; and the
undersigned hereby ratifies and confirms as her own act and deed any and all
that such attorneys and agents, or any of them, shall do or cause to be done by
virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 8th day of
November, 1996.
Susan B. Kerley
- ----------------------------
Susan B. Kerley
<PAGE> 2
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as her true and lawful attorneys and agents to
execute in her name and on her behalf in any and all capacities the
Registration Statements on Form N-1A, and any and all amendments thereto, filed
by Landmark Institutional Trust (on behalf of its series, Landmark
Institutional Liquid Reserves, Landmark Institutional U.S. Treasury Reserves,
and Landmark Institutional Tax Free Reserves) (the "Registrant") with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, and under the Investment Company Act of 1940, as amended, and any and
all other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrant to comply with the Securities
Act of 1933, as amended and the Investment Company Act of 1940, as amended, the
rules, regulations and requirements of the Securities and Exchange Commission,
and the securities or Blue Sky laws of any state or other jurisdiction; and the
undersigned hereby ratifies and confirms as her own act and deed any and all
that such attorneys and agents, or any of them, shall do or cause to be done by
virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 8th day of
November, 1996.
Diana R. Harrington
- ----------------------------
Diana R. Harrington
<PAGE> 3
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints John R. Elder, Susan Jakuboski,
Molly S. Mugler and Linda T. Gibson, and each of them, with full powers of
substitution as his true and lawful attorneys and agents to execute in his name
and on his behalf in any and all capacities the Registration Statements on Form
N-1A, and any and all amendments thereto, filed by Landmark Institutional Trust
(on behalf of its series, Landmark Institutional Liquid Reserves, Landmark
Institutional U.S. Treasury Reserves, and Landmark Institutional Tax Free
Reserves) (the "Registrant") with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, and under the Investment Company Act of
1940, as amended, and any and all other instruments which such attorneys and
agents, or any of them, deem necessary or advisable to enable the Registrant to
comply with the Securities Act of 1933, as amended and the Investment Company
Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities or Blue Sky laws of any
state or other jurisdiction; and the undersigned hereby ratifies and confirms
as his own act and deed any and all that such attorneys and agents, or any of
them, shall do or cause to be done by virtue hereof. Any one of such attorneys
and agents shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.
Philip W. Coolidge
- ----------------------------
Philip W. Coolidge
<PAGE> 4
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the
Registration Statements on Form N-1A, and any and all amendments thereto, filed
by Landmark Institutional Trust (on behalf of its series, Landmark
Institutional Liquid Reserves, Landmark Institutional U.S. Treasury Reserves,
and Landmark Institutional Tax Free Reserves) (the "Registrant") with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, and under the Investment Company Act of 1940, as amended, and any and
all other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrant to comply with the Securities
Act of 1933, as amended and the Investment Company Act of 1940, as amended, the
rules, regulations and requirements of the Securities and Exchange Commission,
and the securities or Blue Sky laws of any state or other jurisdiction; and the
undersigned hereby ratifies and confirms as his own act and deed any and all
that such attorneys and agents, or any of them, shall do or cause to be done by
virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.
Riley C. Gilley
- ----------------------------
Riley C. Gilley
<PAGE> 1
Exhibit 25(b)
U.S. TREASURY RESERVES PORTFOLIO for
LANDMARK FUNDS III
LANDMARK PREMIUM FUNDS
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints John R. Elder, Susan Jakuboski,
Molly S. Mugler and Linda T. Gibson, and each of them, with full powers of
substitution as his true and lawful attorneys and agents to execute in his name
and on his behalf in any and all capacities the Registration Statements on Form
N-1A, and any and all amendments thereto, filed by Landmark Funds III (on
behalf of its series, Landmark U.S. Treasury Reserves), Landmark Premium Funds
(on behalf of its series, Premium U.S. Treasury Reserves), and Landmark
Institutional Trust (on behalf of its series, Landmark Institutional U.S.
Treasury Reserves) (the "Registrants") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrants to comply with the Securities Act of 1933, as amended
and the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities or
Blue Sky laws of any state or other jurisdiction; and the undersigned hereby
ratifies and confirms as his own act and deed any and all that such attorneys
and agents, or any of them, shall do or cause to be done by virtue hereof. Any
one of such attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.
Philip W. Coolidge
- ----------------------------
Philip W. Coolidge
At Southampton, Bermuda
<PAGE> 2
U.S. TREASURY RESERVES PORTFOLIO for
LANDMARK FUNDS III
LANDMARK PREMIUM FUNDS
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the
Registration Statements on Form N-1A, and any and all amendments thereto, filed
by Landmark Funds III (on behalf of its series, Landmark U.S. Treasury
Reserves), Landmark Premium Funds (on behalf of its series, Premium U.S.
Treasury Reserves), and Landmark Institutional Trust (on behalf of its series,
Landmark Institutional U.S. Treasury Reserves) (the "Registrants") with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, and under the Investment Company Act of 1940, as amended, and any and
all other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrants to comply with the Securities
Act of 1933, as amended and the Investment Company Act of 1940, as amended, the
rules, regulations and requirements of the Securities and Exchange Commission,
and the securities or Blue Sky laws of any state or other jurisdiction; and the
undersigned hereby ratifies and confirms as his own act and deed any and all
that such attorneys and agents, or any of them, shall do or cause to be done by
virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.
Elliot J. Berv
- ----------------------------
Elliot J. Berv
At Southampton, Bermuda
<PAGE> 3
U.S. TREASURY RESERVES PORTFOLIO for
LANDMARK FUNDS III
LANDMARK PREMIUM FUNDS
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the
Registration Statements on Form N-1A, and any and all amendments thereto, filed
by Landmark Funds III (on behalf of its series, Landmark U.S. Treasury
Reserves), Landmark Premium Funds (on behalf of its series, Premium U.S.
Treasury Reserves), and Landmark Institutional Trust (on behalf of its series,
Landmark Institutional U.S. Treasury Reserves) (the "Registrants") with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, and under the Investment Company Act of 1940, as amended, and any and
all other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrants to comply with the Securities
Act of 1933, as amended and the Investment Company Act of 1940, as amended, the
rules, regulations and requirements of the Securities and Exchange Commission,
and the securities or Blue Sky laws of any state or other jurisdiction; and the
undersigned hereby ratifies and confirms as his own act and deed any and all
that such attorneys and agents, or any of them, shall do or cause to be done by
virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.
Mark T. Finn
- ----------------------------
Mark T. Finn
At Southampton, Bermuda
<PAGE> 4
U.S. TREASURY RESERVES PORTFOLIO for
LANDMARK FUNDS III
LANDMARK PREMIUM FUNDS
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the
Registration Statements on Form N-1A, and any and all amendments thereto, filed
by Landmark Funds III (on behalf of its series, Landmark U.S. Treasury
Reserves), Landmark Premium Funds (on behalf of its series, Premium U.S.
Treasury Reserves), and Landmark Institutional Trust (on behalf of its series,
Landmark Institutional U.S. Treasury Reserves) (the "Registrants") with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, and under the Investment Company Act of 1940, as amended, and any and
all other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrants to comply with the Securities
Act of 1933, as amended and the Investment Company Act of 1940, as amended, the
rules, regulations and requirements of the Securities and Exchange Commission,
and the securities or Blue Sky laws of any state or other jurisdiction; and the
undersigned hereby ratifies and confirms as his own act and deed any and all
that such attorneys and agents, or any of them, shall do or cause to be done by
virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.
Walter E. Robb, III
- ----------------------------
Walter E. Robb, III
At Southampton, Bermuda
<PAGE> 5
U.S. TREASURY RESERVES PORTFOLIO for
LANDMARK FUNDS III
LANDMARK PREMIUM FUNDS
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, Susan
Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them, with full
powers of substitution as his true and lawful attorneys and agents to execute
in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Funds III (on behalf of its series, Landmark U.S. Treasury Reserves), Landmark
Premium Funds (on behalf of its series, Premium U.S. Treasury Reserves), and
Landmark Institutional Trust (on behalf of its series, Landmark Institutional
U.S. Treasury Reserves) (the "Registrants") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrants to comply with the Securities Act of 1933, as amended
and the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities or
Blue Sky laws of any state or other jurisdiction; and the undersigned hereby
ratifies and confirms as his own act and deed any and all that such attorneys
and agents, or any of them, shall do or cause to be done by virtue hereof. Any
one of such attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 21st day of
November, 1996.
John R. Elder
- ----------------------------
John R. Elder
<PAGE> 1
Exhibit 25(c)
CASH RESERVES PORTFOLIO for
LANDMARK FUNDS III
LANDMARK PREMIUM FUNDS
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the
Registration Statements on Form N-1A, and any and all amendments thereto, filed
by Landmark Funds III (on behalf of its series, Landmark Cash Reserves),
Landmark Premium Funds (on behalf of its series, Premium Liquid Reserves), and
Landmark Institutional Trust (on behalf of its series, Landmark Institutional
Liquid Reserves) (the "Registrants") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrants to comply with the Securities Act of 1933, as amended
and the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities or
Blue Sky laws of any state or other jurisdiction; and the undersigned hereby
ratifies and confirms as his own act and deed any and all that such attorneys
and agents, or any of them, shall do or cause to be done by virtue hereof. Any
one of such attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.
Elliott J. Berv
- ----------------------------
Elliott J. Berv
At Southampton, Bermuda
<PAGE> 2
CASH RESERVES PORTFOLIO for
LANDMARK FUNDS III
LANDMARK PREMIUM FUNDS
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the
Registration Statements on Form N-1A, and any and all amendments thereto, filed
by Landmark Funds III (on behalf of its series, Landmark Cash Reserves),
Landmark Premium Funds (on behalf of its series, Premium Liquid Reserves), and
Landmark Institutional Trust (on behalf of its series, Landmark Institutional
Liquid Reserves) (the "Registrants") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrants to comply with the Securities Act of 1933, as amended
and the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities or
Blue Sky laws of any state or other jurisdiction; and the undersigned hereby
ratifies and confirms as his own act and deed any and all that such attorneys
and agents, or any of them, shall do or cause to be done by virtue hereof. Any
one of such attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.
Mark T. Finn
- ----------------------------
Mark T. Finn
At Southampton, Bermuda
<PAGE> 3
CASH RESERVES PORTFOLIO for
LANDMARK FUNDS III
LANDMARK PREMIUM FUNDS
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the
Registration Statements on Form N-1A, and any and all amendments thereto, filed
by Landmark Funds III (on behalf of its series, Landmark Cash Reserves),
Landmark Premium Funds (on behalf of its series, Premium Liquid Reserves), and
Landmark Institutional Trust (on behalf of its series, Landmark Institutional
Liquid Reserves) (the "Registrants") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrants to comply with the Securities Act of 1933, as amended
and the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities or
Blue Sky laws of any state or other jurisdiction; and the undersigned hereby
ratifies and confirms as his own act and deed any and all that such attorneys
and agents, or any of them, shall do or cause to be done by virtue hereof. Any
one of such attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.
Walter E. Robb, III
- ----------------------------
Walter E. Robb, III
At Southampton, Bermuda
<PAGE> 4
CASH RESERVES PORTFOLIO for
LANDMARK FUNDS III
LANDMARK PREMIUM FUNDS
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints John R. Elder, Susan Jakuboski,
Molly S. Mugler and Linda T. Gibson, and each of them, with full powers of
substitution as his true and lawful attorneys and agents to execute in his name
and on his behalf in any and all capacities the Registration Statements on Form
N-1A, and any and all amendments thereto, filed by Landmark Funds III (on
behalf of its series, Landmark Cash Reserves), Landmark Premium Funds (on
behalf of its series, Premium Liquid Reserves), and Landmark Institutional
Trust (on behalf of its series, Landmark Institutional Liquid Reserves) (the
"Registrants") with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and under the Investment Company Act of 1940, as
amended, and any and all other instruments which such attorneys and agents, or
any of them, deem necessary or advisable to enable the Registrants to comply
with the Securities Act of 1933, as amended and the Investment Company Act of
1940, as amended, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys and agents, or any of them, shall do
or cause to be done by virtue hereof. Any one of such attorneys and agents
shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.
Philip W. Coolidge
- ----------------------------
Philip W. Coolidge
At Southampton, Bermuda
<PAGE> 1
Exhibit 25(d)
TAX-FREE RESERVES PORTFOLIO for
LANDMARK TAX FREE RESERVES
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the
Registration Statements on Form N-1A, and any and all amendments thereto, filed
by Landmark Tax Free Reserves and Landmark Institutional Trust (on behalf of
its series, Landmark Institutional Tax Free Reserves) (the "Registrants") with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, and under the Investment Company Act of 1940, as amended, and any and
all other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrants to comply with the Securities
Act of 1933, as amended and the Investment Company Act of 1940, as amended, the
rules, regulations and requirements of the Securities and Exchange Commission,
and the securities or Blue Sky laws of any state or other jurisdiction; and the
undersigned hereby ratifies and confirms as his own act and deed any and all
that such attorneys and agents, or any of them, shall do or cause to be done by
virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.
Elliott J. Berv
- ----------------------------
Elliott J. Berv
At Southampton, Bermuda
<PAGE> 2
TAX-FREE RESERVES PORTFOLIO for
LANDMARK TAX FREE RESERVES
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the
Registration Statements on Form N-1A, and any and all amendments thereto, filed
by Landmark Tax Free Reserves and Landmark Institutional Trust (on behalf of
its series, Landmark Institutional Tax Free Reserves) (the "Registrants") with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, and under the Investment Company Act of 1940, as amended, and any and
all other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrants to comply with the Securities
Act of 1933, as amended and the Investment Company Act of 1940, as amended, the
rules, regulations and requirements of the Securities and Exchange Commission,
and the securities or Blue Sky laws of any state or other jurisdiction; and the
undersigned hereby ratifies and confirms as his own act and deed any and all
that such attorneys and agents, or any of them, shall do or cause to be done by
virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.
Mark T. Finn
- ----------------------------
Mark T. Finn
At Southampton, Bermuda
<PAGE> 3
TAX-FREE RESERVES PORTFOLIO for
LANDMARK TAX FREE RESERVES
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the
Registration Statements on Form N-1A, and any and all amendments thereto, filed
by Landmark Tax Free Reserves and Landmark Institutional Trust (on behalf of
its series, Landmark Institutional Tax Free Reserves) (the "Registrants") with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, and under the Investment Company Act of 1940, as amended, and any and
all other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrants to comply with the Securities
Act of 1933, as amended and the Investment Company Act of 1940, as amended, the
rules, regulations and requirements of the Securities and Exchange Commission,
and the securities or Blue Sky laws of any state or other jurisdiction; and the
undersigned hereby ratifies and confirms as his own act and deed any and all
that such attorneys and agents, or any of them, shall do or cause to be done by
virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.
Walter E. Robb, III
- ----------------------------
Walter E. Robb, III
At Southampton, Bermuda
<PAGE> 4
TAX-FREE RESERVES PORTFOLIO for
LANDMARK TAX FREE RESERVES
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints John R. Elder, Susan Jakuboski,
Molly S. Mugler and Linda T. Gibson, and each of them, with full powers of
substitution as his true and lawful attorneys and agents to execute in his name
and on his behalf in any and all capacities the Registration Statements on Form
N-1A, and any and all amendments thereto, filed by Landmark Tax Free Reserves
and Landmark Institutional Trust (on behalf of its series, Landmark
Institutional Tax Free Reserves) (the "Registrants") with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrants to comply with the Securities Act of 1933, as amended
and the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities or
Blue Sky laws of any state or other jurisdiction; and the undersigned hereby
ratifies and confirms as his own act and deed any and all that such attorneys
and agents, or any of them, shall do or cause to be done by virtue hereof. Any
one of such attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.
Philip W. Coolidge
- ----------------------------
Philip W. Coolidge
At Southampton, Bermuda
<PAGE> 5
TAX-FREE RESERVES PORTFOLIO for
LANDMARK TAX FREE RESERVES
LANDMARK INSTITUTIONAL TRUST
The undersigned hereby constitutes and appoints Philip W. Coolidge, Susan
Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them, with full
powers of substitution as his true and lawful attorneys and agents to execute
in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Tax Free Reserves and Landmark Institutional Trust (on behalf of its series,
Landmark Institutional Tax Free Reserves) (the "Registrants") with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, and under the Investment Company Act of 1940, as amended, and any and
all other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrants to comply with the Securities
Act of 1933, as amended and the Investment Company Act of 1940, as amended, the
rules, regulations and requirements of the Securities and Exchange Commission,
and the securities or Blue Sky laws of any state or other jurisdiction; and the
undersigned hereby ratifies and confirms as his own act and deed any and all
that such attorneys and agents, or any of them, shall do or cause to be done by
virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 21st day of
November, 1996.
John R. Elder
- ----------------------------
John R. Elder
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000889512
<NAME> LANDMARK INSTITUTIONAL LIQUID RESERVES
<SERIES>
<NUMBER> 001
<NAME> LANDMARK INSTITUTIONAL TRUST
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
<INVESTMENTS-AT-COST> 1,258,263,673
<INVESTMENTS-AT-VALUE> 1,258,263,673
<RECEIVABLES> 70,000
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,258,333,673
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,199,992
<TOTAL-LIABILITIES> 1,199,992
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,257,133,681
<SHARES-COMMON-STOCK> 1,257,133,681
<SHARES-COMMON-PRIOR> 1,480,097,198
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,257,133,681
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 66,104,451
<OTHER-INCOME> 0
<EXPENSES-NET> 1,178,726
<NET-INVESTMENT-INCOME> 64,925,725
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 64,925,725
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (64,925,725)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,911,997,762
<NUMBER-OF-SHARES-REDEEMED> (15,181,288,932)
<SHARES-REINVESTED> 46,327,653
<NET-CHANGE-IN-ASSETS> (222,963,517)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,674,601
<AVERAGE-NET-ASSETS> 1,293,174
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.06)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000889512
<NAME> LANDMARK INSTITUTIONAL TREASURY RESERVES
<SERIES>
<NUMBER> 002
<NAME> LANDMARK INSTITUTIONAL TRUST
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
<INVESTMENTS-AT-COST> 213,628,648
<INVESTMENTS-AT-VALUE> 213,628,648
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 213,628,648
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 233,996
<TOTAL-LIABILITIES> 233,996
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 213,394,652
<SHARES-COMMON-STOCK> 213,394,652
<SHARES-COMMON-PRIOR> 120,731,322
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 213,394,652
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8,494,598
<OTHER-INCOME> 0
<EXPENSES-NET> 246,780
<NET-INVESTMENT-INCOME> 8,247,818
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 8,247,818
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (8,247,818)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 495,311,082
<NUMBER-OF-SHARES-REDEEMED> (410,017,345)
<SHARES-REINVESTED> 7,369,593
<NET-CHANGE-IN-ASSETS> 92,663,330
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,022,203
<AVERAGE-NET-ASSETS> 163,879
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
