LONGLEAF PARTNERS FUNDS TRUST (Form: 485BPOS, Received: 04/27/2007 17:23:39)

Net Assets

Net Asset Value Per Share

Shares Outstanding

As filed with the Securities and Exchange Commission on April 27, 2007

Registration No. 33-10472

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 (X)

Pre-Effective Amendment No. ( )

Post-Effective Amendment No. 30 (X)
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940

Amendment No. 30 (X)

(Check appropriate box or boxes)

LONGLEAF PARTNERS FUNDS TRUST
(Exact name of registrant as specified in charter)

c/o Southeastern Asset Management, Inc.
6410 Poplar Avenue; Suite 900
Memphis, TN 38119
(Address of principal executive offices)

Registrant’s Telephone Number, Including Area Code - (901) 761-2474

ANDREW R. McCARROLL, ESQ

Southeastern Asset Mgmt., Inc.

6410 Poplar Ave., Ste. 900

Memphis, TN 38119

(Name and address of agent for service)

Approximate Date of Proposed Public Offering May 1, 2007

It is proposed that this filing will become effective (check appropriate box)

þ on May 1, 2007 pursuant to paragraph (b) of Rule 485

o 60 days after filing pursuant to paragraph (a)(1) of Rule 485

o on (date) pursuant to paragraph (a)(1) of Rule 485

o 75 days after filing pursuant to paragraph (a)(2) of Rule 485

o on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

o this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

LONGLEAF PARTNERS FUNDS TRUST

PART A

INFORMATION REQUIRED IN THE PROSPECTUS

P R O S P E C T U S

M a y 1 ,, 2 0 0 7

L ONGLEAF P ARTNERS F UNDS ^®

M ANAGED B Y S OUTHEASTERN A &n bsp; SSET M ANAGEMENT, I NC. ^™

Prospectus

May 1, 2007

Longleaf Partners Funds ^®

Managed By:
SOUTHEASTERN ASSET MANAGEMENT, INC. ^™

6410 Poplar Avenue, Suite 900
Memphis, TN 38119
(800) 445-9469
www.longleafpartners.com

Longleaf Partners Fund

Invests primarily in mid and large-cap U.S. companies believed to be significantly undervalued.
(Closed to new investors)

Longleaf Partners Small-Cap Fund

Invests primarily in small-cap U.S. companies believed to be significantly undervalued.
(Closed to new investors)

Longleaf Partners International Fund

Invests primarily in foreign companies believed to be significantly undervalued.

The Longleaf Partners Funds are registered with the Securities and Exchange Commission (SEC). That registration does not imply that the SEC endorses the Funds.

The SEC has not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

TABLE OF CONTENTS


4 Risk/Return Summary
PRINCIPAL INVESTMENT STRATEGY
Governing Principles			4
Philosophy			4
Process			5
PRIMARY INVESTMENT RISKS THAT APPLY TO ALL LONGLEAF FUNDS
Market Fluctuation Risks			5
Business Ownership Risks			5
Non-Diversification Risks			6
Liquidity Risks			6
Foreign Investment Risks			6
Currency Hedging Risks			7

INVESTMENT OBJECTIVES, PERFORMANCE, FEES, AND EXPENSE INFORMATION
Longleaf Partners Fund			8
Longleaf Partners Small-Cap Fund			10
Longleaf Partners International Fund			12
METHOD OF CALCULATION OF RETURNS AFTER TAXES			14

15 Discussion Of Principal Investment Strategies And Related Risks
ADDITIONAL INFORMATION ON TYPES OF INVESTMENTS
Our Definition of International			15
International Fund			15
HOW WE ACHIEVE OUR INVESTMENT OBJECTIVES
Determining Business or Intrinsic Value			15
Other Investment Criteria			16
Allocation of Investment Ideas			16
How Companies Reach Intrinsic Value			16
Portfolio Turnover			17
Other Investments			17
Cash Reserves			17


OTHER RISKS OF INVESTING WHICH APPLY TO ALL FUNDS
Puts, Calls, Options, Short Sales, and Financial Futures			18
Restricted and Illiquid Securities			18
Bonds and Fixed Income Securities			18

19 Portfolio Management And Fund Operations
Investment Adviser			19
Code of Ethics			19
Disclosure of Portfolio Holdings			19
Management Services			19
Advisory and Administration Fees			20
Portfolio Managers			21
Team Approach			21
Fund Operations			22
Audit Committee			22
Board of Trustees			23

25 Shareholder Manual
General Information			25
Privacy of Personal Information			28
How To Open a New Account			28
Additional Investments			29
Exceptions to Investment Minimum and Closed Funds			30
How To Redeem Shares			31
How Fund Shares Are Priced			35
Dividends and Distributions			36
Taxes			36
Financial Highlights			38

This Prospectus contains important information about the investment strategies, risks, and fees of the Longleaf Partners Funds and should be be read carefully before making an investment. Please read it and keep it on hand for future reference.

You should be aware that the Funds:

	•		Are not bank deposits;

	•		Are not guaranteed, endorsed, or insured by any financial institution or governmental entity such as the Federal Deposit Insurance Corporation (FDIC);

	•		May not achieve their stated goals.

RISK/RETURN SUMMARY

Principal Investment Strategy

Governing Principles. The Longleaf Partners Funds represent an investment partnership between all Fund shareholders and the employees and affiliates of the Funds’ manager, Southeastern Asset Management, Inc. (“Southeastern”), who together are among the Funds’ largest owners. The following principles govern this investment partnership:

	•		We will treat your investment in Longleaf as if it were our own.

	•		We will remain significant investors with you in Longleaf.

	•		We will invest for the long term, while striving to maximize returns and to minimize business, financial, purchasing power, regulatory, and market risks.

	•		We will choose our investments based on their discounts from our appraisals of their corporate intrinsic values, their financial strengths, their managements, their competitive positions, and our assessments of their future earnings potential.

	•		We will concentrate our assets in our best ideas.

	•		We will not impose loads, exit fees or 12b-1 charges on our investment partners. ¹

	•		We will consider closing the Funds to new investors if closing would benefit existing shareholders.

	•		We will discourage short-term speculators and market timers from joining us, the long-term investors in Longleaf.

	•		We will continue our efforts to enhance shareholder services.

	•		We will communicate with our investment partners as candidly as possible.

Philosophy. We are value investors. We view equity investments as ownership in a business enterprise. The Funds seek to achieve superior long-term performance by acquiring equity securities of growing, financially sound companies managed by capable, honorable individuals at market prices significantly below our assessment of their business values. We sell stocks when they approach our appraisals. We determine business or intrinsic value through financial analysis and


1		This principle does not preclude a redemption fee (payable to the Funds) for short term trades if the Funds’ Trustees determine a fee would be necessary or appropriate to discourage short-term speculators and market timers.

established disciplines which we have consistently applied over 31 years. Equities purchased at prices substantially less than their intrinsic worth should protect capital from significant permanent loss and also should appreciate substantially if the market recognizes the company’s economic value.

Process. All of the Longleaf Partners Funds follow the same investment disciplines and appraisal methods. Our analysts, working as a team, seek competitively entrenched companies which can enhance their advantages and are operated by trustworthy, capable, shareholder-oriented managers. Generally, when the common stock is available at 60% or less of our conservative appraisals, and when the investment has been qualified, both quantitatively and qualitatively, we purchase a position for the Fund or Funds whose universe most closely fits the company.

Primary Investment Risks That Apply To All Longleaf Funds

Market Fluctuation Risks. The Funds invest primarily in common stocks or securities convertible to common stocks. Equity investments are subject to declines in a company’s share price or in the overall stock market. The value of your investment in a Fund fluctuates daily with stock price movements, and upon redemption may be worth more or less than what you paid. Loss of money is, therefore, a risk of investing in the Funds.

We attempt to mitigate the risk of permanent capital loss by buying businesses only when they are selling at substantially less than our appraisals of their values and by having long holding periods for these securities. While the ability to hold shares through periods of volatility may protect long-term investors from permanent loss, there is a risk that investments may never reach what we believe are their true values, either because the market fails to recognize the value or because we misjudged it.

Business Ownership Risks. As partial owners of the companies in Longleaf’s portfolios, we face four main risks inherent in owning a business. First, the company’s operations must be successful. To minimize business risk, we look for companies with competitive advantages, which could include dominant market share, lowest cost structure, entrenched brand name, or similar qualities.

The second risk of owning a company is financial risk. To help ensure that a company can weather economic downturns and take advantage of opportunities, a company’s assets and cash flows should amply cover liabilities, annual working capital needs, and necessary capital expenditures.

A company’s third risk is whether it can control and mitigate cost increases. We prefer to own businesses with strong purchasing power and the ability to pass cost increases on to customers.

A company faces a fourth risk to its long-term success if a regulatory agency can dictate its markets and profits. Longleaf limits its ownership of businesses with regulatory risk.

Non-Diversification Risks. The Funds are non-diversified under federal securities laws and each Fund generally invests in 15 to 25 companies. As a result, each holding will have a greater impact on a Fund’s total return, and a Fund’s share value could fluctuate more than if a greater number of securities were held in the portfolios.

We believe that limiting the number of our holdings lowers the risk of losing capital and improves the long-term return opportunity, because the portfolios contain our most qualified ideas. We strive to know the companies and their managements extremely well. Owning fewer companies also enables each company to have a meaningful impact on our investment results.

The Funds plan to comply with the diversification standards for mutual funds set forth in the Internal Revenue Code. Under these standards, each Fund could own as few as twelve securities, but generally will have 15 to 25 companies in its portfolio. At the end of each quarter, at least half of each Fund’s portfolio must be diversified so that within the diversified basket less than 5% of a Fund’s total assets are invested in any company and a Fund owns less than 10% of any company’s voting securities. The remaining half of a Fund’s portfolio may contain positions which are over 5% of assets and are greater than 10% of a company’s voting securities.

Liquidity Risks. We take relatively large ownership positions in some companies, and may purchase the same security for more than one Fund as well as Southeastern’s private account clients. A single Fund, or more than one Fund in combination with Southeastern’s private account clients, may own more than 5% of a company’s equity securities and may own up to 15% or more of some companies. Depending on market conditions and trading volume, disposing of such holdings could be more difficult than if the Funds and Southeastern’s other clients owned a smaller amount. Because selling a large position may take longer, a Fund may be more susceptible to price fluctuations.

Foreign Investment Risks. The Partners and Small-Cap Funds may invest up to 30% of assets in foreign securities, and the International Fund may invest all of its assets in foreign securities. Foreign investment risks sometimes include political and economic changes, foreign withholding taxes, exchange controls, confiscation, foreign governmental restrictions, differences in accounting standards, more limited availability of public information, and currency fluctuations. We try to mitigate these risks through careful analysis of the economic and regulatory conditions in each country where we own an investment.

Currency Hedging Risks. We focus on absolute returns generated by the local market performance of the equities we purchase. We often hedge our economic exposure to foreign currency to reduce the impact of foreign currency movements on these returns. This policy impacts our relative performance versus a similar unhedged portfolio. The relative returns of hedged positions improve when the dollar strengthens and decline when the dollar weakens.

Effective currency hedging can offset fluctuations caused by differences between foreign and U.S. currencies, and can isolate the portion of a security’s price fluctuation attributed to capital appreciation or depreciation. Not all foreign currencies can be effectively hedged, and the costs of hedging may outweigh the benefits. If our hedging strategy does not correlate well with market and currency movements, price volatility of the portfolio could increase. Currency hedging, considered separately, can result in losses, but these losses should be offset to an extent by gains in the U.S. dollar equivalent prices of the securities hedged.

Investment Objectives, Performance, Fees, And Expense Information

The following sections include specific information on each Fund’s investment objectives and policies, historical performance, and expenses of ownership.

The bar charts illustrate volatility by showing the variability of Fund returns from year to year over the last decade. The total returns for the best and worst quarters indicate the historic short-term risks and rewards of investing in each Fund.

The average annual returns for the cumulative periods ended December 31, 2006 compared with several unmanaged and unhedged market indices highlight the benefits of compounding through longer term investing, and illustrate the effects of averaging negative returns in some periods with positive returns in others. The “Inflation Plus 10%” calculation for the relevant time periods has been included with the comparative index to encourage investors to consider absolute as well as relative returns.

Each Fund’s particular investment objective and policies and the corresponding market conditions have affected performance during the reported periods. Historical returns illustrate how the Funds met the challenges of changing market conditions during prior periods. Past investment performance (before and after taxes) does not predict future performance and there is no assurance that we will achieve our investment objectives. See page 14 for an explanation of the after-tax calculations in the Fund performance sections which follow.

LONGLEAF PARTNERS FUND

Initial Public Offering —April 8, 1987
(Closed to new investors since July 16, 2004)

Investment Objective —Long-term capital growth.

Investment Policy —The Partners Fund normally invests in the equity securities of a limited number of mid and large-cap companies. Most of these securities are listed on the major securities exchanges. Current income is not an objective.

The Fund may invest up to 30% of assets in foreign securities and up to 15% of assets in non-registered or illiquid securities.

Past Fund Performance

Longleaf Partners Fund
Average Annual Total Returns
(for the periods ended December 31, 2006)


	1 Year			5 Years			10 Years
Return Before Taxes		21.63	%		10.78	%		12.77	%

Return After Taxes on Distributions		20.27			10.24			11.03

Return After Taxes on Distributions and Sale of Fund Shares		15.86			9.33			10.49

Comparative Index (reflects no deductions for fees, expenses, or taxes)

S&P500 Index		15.79			6.19			8.42
Inflation Plus 10%		112.54			12.69			12.44

Fund Fees and Expenses

The following table shows the fees and expenses you may pay to buy and hold shares of the Partners Fund. We do not impose any front-end or deferred sales charges, and the Fund does not have a 12b-1 Plan.


Shareholder Transaction Fees and Expenses (fees paid directly from your investment)	None

Annual Fund Operating Expenses (expenses that are deducted from Fund assets)

Management Fees		0.76	%
12b-1 Fees	None
Other Expenses		0.14
Administration		0.10
Other Operating Expenses		0.04

Total Annual Fund Operating Expenses		0.90	%

Example of Fund Expenses. This example helps compare the cost of investing in the Partners Fund with other mutual funds. The table shows what you would pay in expenses over time, whether or not you sold your shares at the end of each period. The example assumes a $10,000 investment, a 5% total return each year, and no changes in expenses. This information is for comparison purposes only and does not represent the Fund’s actual returns or expenses, which may be higher or lower.


1 Year	3 Years	5 Years	10 Years
$92	$287	$498	$1,108

Longleaf Partners Small-Cap Fund

Initial Public Offering —February 21, 1989
(Closed to new investors since July 31, 1997)

Investment Objective —Long-term capital growth.

Investment Policy —The Small-Cap Fund normally invests at least 80% of net assets plus any borrowings for investment purposes in the equity securities, including convertible securities, of a limited number of companies whose market capitalizations at the time of purchase are considered small cap.

Generally, portfolio companies will have a market capitalization greater than $300 million. Current income is not an objective.

The Fund may also invest up to 30% of assets in foreign securities and up to 15% of assets in non-registered or illiquid securities.

Shareholders of the Small-Cap Fund will be provided with at least 60 days prior written notice of any change to the Investment Policy set forth above. The Board of Trustees may, however, change the definition of small cap without prior notice if it concludes such a change is appropriate. Currently, a company will be considered small cap if its market capitalization at the time of purchase is within the range of companies in the Russell 2000 Index, the S&P Small-Cap 600 Index, or the Wilshire Small-Cap 1750 Index during the most recent 12-month period (based on month-end data). This capitalization range will change over time. At March 31, 2007, the top of this range was $9.7 billion. If investments meeting the Fund’s criteria are not available, we may invest temporarily in obligations of the U.S. government and its instrumentalities, or in other money market instruments.

Specific Risks of Investing in this Fund

Smaller companies may have more limited product lines, markets, and financial resources than larger companies. In addition, their securities may trade less frequently and in more limited volume than those of larger companies. Small-cap stocks may be more volatile than those of larger companies and, where trading volume is thin, our ability to dispose of such securities may be more limited.

Past Fund Performance

Longleaf Partners Small-Cap Fund
Average Annual Total Returns
(for the periods ended December 31, 2006)


	1 year			5 years			10 years
Return Before Taxes		22.33	%		16.58	%		14.51	%

Return After Taxes on Distributions		20.45			14.81			12.63
Return After Taxes on Distributions and Sale of Fund Shares		16.42			14.05			12.13
Comparative Index (reflects no deductions for fees, expenses, or taxes)
Russell 2000 Index		18.37			11.39			9.44
Inflation Plus 10%		12.54			12.69			12.44

Fund Fees and Expenses

The following table shows the fees and expenses you may pay to buy and hold shares of the Small-Cap Fund. We do not impose any front-end or deferred sales charges and the Fund does not have a 12b-1 Plan.


Shareholder Transaction Fees and Expenses (fees paid directly from your investment)	None

Annual Fund Operating Expenses (expenses that are deducted from Fund assets)

Management Fees		0.78	%
12b-1 Fees	None
Other Expenses		0.14
Administration		0.10
Other Operating Expenses		0.04

Total Annual Fund Operating Expenses		0.92	%

Example of Fund Expenses. This example helps compare the cost of investing in the Small-Cap Fund with other mutual funds. The table shows what you would pay in expenses over time, whether or not you sold your shares at the end of each period. The example assumes a $10,000 investment, a 5% total return each year, and no changes in expenses. This information is for comparison purposes only and does not represent the Fund’s actual returns or expenses, which may be higher or lower.


1 Year	3 Years	5 Years	10 Years
$94	$293	$509	$1,131

Longleaf Partners International Fund

Initial Public Offering —October 26, 1998

Investment Objective —Long-term capital growth through investment primarily in the equity securities of international or foreign issuers.

Investment Policy —The International Fund normally invests at least 65% of total assets in the equity securities of international issuers domiciled or operating primarily in at least three countries other than the United States.

The Fund does not limit the percentage of assets invested in any particular geographic region or country. We may invest a significant portion of assets in a single country, and may invest in both developed and emerging market countries. The Fund may also invest up to 15% of assets in non-registered or illiquid securities. If investments meeting the Fund’s criteria are not available, we may invest the Fund’s assets temporarily in obligations of the U.S. government and its instrumentalities, or in other money market instruments.

Specific Risks of Investing in this Fund

The International Fund is designed for long-term investors who can accept international investment risk. Although world economies are increasingly integrated, market valuations vary with each country’s economic and political conditions. Movements in foreign securities markets and, to the extent not hedged, movements in foreign currencies where the Fund has exposure will affect the Fund’s price per share and returns. Because the Fund hedges portions of its portfolio against foreign currency exposure, its relative performance may differ from that of unhedged portfolios or indices.

Past Fund Performance

Longleaf Partners International Fund
Average Annual Total Returns
(for the periods ended December 31, 2006)


							Since Initial
							Public Offering
	1 year			5 years			10/26/98
Return Before Taxes		17.07	%		11.47	%		15.47	%
Return After Taxes on Distributions		15.96			11.01			13.74
Return After Taxes on Distributions and Sale of Fund Shares		12.75			9.88			12.76

Comparative Index (reflects no deductions for fees, expenses, or taxes)
EAFE Index		26.34			14.98			8.01
Inflation Plus 10%		12.54			12.69			12.69

Fund Fees and Expenses

The following table shows the fees and expenses you may pay to buy and hold shares of the International Fund. We do not impose any front-end or deferred sales charges, and the Fund does not have a 12b-1 Plan.


Shareholder Transaction Fees and Expenses (fees paid directly from your investment)	None

Annual Fund Operating Expenses (expenses that are deducted from Fund assets)

Management Fees		1.45	%
12b-1 Fees	None
Other Expenses		0.16
Administration		0.10
Other Operating Expenses		0.06

Total Annual Fund Operating Expenses		1.61	%

Example of Fund Expenses. This example helps compare the cost of investing in the International Fund with other mutual funds. The table shows what you would pay in expenses over time, whether or not you sold your shares at the end of each period. The example assumes a $10,000 investment, a 5% total return each year, and no changes in expenses. This information is for comparison purposes only and does not represent the Fund’s actual returns or expenses, which may be higher or lower.


1 Year	3 Years	5 Years	10 Years
$164	$508	$876	$1,911

Method of Calculation of Returns After Taxes

The after-tax returns shown in the tables depicting Past Fund Performance on pages 9, 11 and 13, were calculated under Securities and Exchange Commission rules using the following assumptions:

	•		Distributions were reinvested after deducting the taxes due on the distributions.

	•		Taxes due on distributions were calculated at the highest historical individual federal income tax rate for each taxable component of the distribution.

	•		Holding periods were determined based on the actual purchase and distribution dates.

	•		Short-term capital gain rates were applied to the sale of shares held for one year or less.

	•		“Return After Taxes on Distributions” assumes you continue to hold your shares at the end of the period.

	•		“Return After Taxes on Distributions and Sale of Fund Shares” assumes you sell your shares at the end of the period and pay applicable federal taxes.

	•		The calculations do not include state or local taxes, the effects of phaseouts of certain exemptions, deductions, and credits at various income levels, and the effects of alternative minimum tax. As a result, actual after-tax returns depend on an investor’s tax situation and may differ from those shown.

	•		After-tax returns shown are not relevant to investors who are tax exempt or who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

Discussion of Principal Investment Strategies and Related Risks

Additional Information on Types of Investments

Our Definition of International. A company will generally be considered international if organized or headquartered outside the United States. A business organized or headquartered in the U.S. may also qualify as international if at least 50% of its assets are outside the U.S. or 50% of its gross income is from non-U.S. sources. Similarly, a company organized or headquartered outside the United States may still be considered U.S. if its operations are primarily in the United States.

International Fund. At December 31, 2006, approximately 28% of the International Fund’s stocks were Japanese. This weighting in Japan is a result of individual stock selection, not a policy of concentrating in Japan. The Fund does not limit the percentage of assets invested in any particular geographic region or country. The International Fund’s current concentration in Japanese issuers may expose it to the risks of adverse social, political and economic events that occur in Japan or affect the Japanese markets, and could cause the Fund’s performance to be more volatile than that of more geographically diversified funds. Special risks associated with investments in Japanese companies could include exposure to currency fluctuations, less liquidity, less developed or less efficient trading markets, the effect of company cross-ownership on trading markets, a lack of comprehensive company information, political instability, differing auditing or legal standards, and laws or regulations which may create restrictions on investments by non-Japanese owners.

The Fund may also invest in U.S. or foreign closed-end investment companies which invest in particular countries or regions when direct investments in those areas would be difficult or less liquid. When appropriate, the Fund may invest in foreign governmental and commercial bonds, and in other foreign money market instruments. The majority of investments will generally be in companies located in Canada, Australia, or the developed countries of Europe, the Far East, or South America.

How We Achieve Our Investment Objectives

Determining Business or Intrinsic Value. A company’s market price generally must be 60% or less of our appraisal to qualify for investment. Our research team appraises businesses by studying financial statements, regulatory information, trade publications, and other industry and corporate data, and by talking with corporate management, competitors, and suppliers.

We use two primary methods of appraisal. The first assesses the company’s liquidation value based on the current economic worth of corporate assets and liabilities. The second method determines the company’s ongoing value based on its ability to generate free cash flow after required capital expenditures and working capital needs. We calculate the present value of the projected free cash flows plus a terminal value, using a conservative discount rate. Our appraisal should represent the price that rational, independent buyers and sellers would negotiate in an arms length sale. We then check our appraisals against our data base of comparable historic transactions.

Other Investment Criteria. In addition to significant undervaluation, we also look for the following when selecting investments:

	•		Good Business. A number of qualities characterize an attractive business. First, we must be able to understand both the fundamentals and the economics of a business. Second, a strong balance sheet helps protect a company during slow economic times and enables a business to seize opportunities when they arise. Third, a sustainable competitive advantage in market share, dominant brands, cost structure, or other areas, helps ensure the strength and growth of a company. Fourth, a business must be able to generate and grow free cash flow from operations. Finally, pricing power enables a company to pass cost increases to consumers rather than absorbing them in lower margins.

	•		Good People. Managements of the businesses we own should have four primary qualities. They should be capable operators who can run the business profitably. They should be capable capital allocators who will build shareholder value through wisely reinvesting the free cash flow that the business generates. They should be shareholder oriented in their actions and decisions. They should have the proper incentives with much of their net worth tied to the company’s results.

Although a company may not meet all the investment criteria above, we must be convinced that significant unrealized value is present before making an investment.

Allocation of Investment Ideas. When a company qualifies for purchase, we generally allocate small-cap stocks to the Small-Cap Fund, foreign names to the International Fund, and mid and large-cap stocks to the Partners Fund, although more than one Fund may own a single security. For example, an overseas company might be in both the International Fund and Partners Fund. If the Fund most closely aligned with a security is fully invested or otherwise unable to buy a position, another Fund might purchase that security.

How Companies Reach Intrinsic Value. We generally sell a holding when its market price reaches our appraisal. Undervalued businesses may reach their intrinsic worth in several ways.

	•		Market Realization. Over time the market may recognize the business’s true value. As companies with strong management and true earnings power report better earnings, the price of the stock generally rises.

	•		Mergers and Acquisitions. Undervalued companies often attract acquirors, or large owners may seek a buyer.

	•		Management Buy-Outs. Corporate management may obtain funding to buy out shareholders and take the company private.

	•		Liquidations. A company may partially or fully liquidate its assets or operations through spin-offs of subsidiaries or sales of a portion of the business.

	•		Share Repurchase Programs. When a company’s stock is undervalued, repurchasing outstanding shares increases value per share. If repurchasing shares is the capital allocation choice with the highest return, management can grow the value of the business and shrink the number of owners sharing the returns.

Portfolio Turnover. We are long-term owners, not traders or speculators. Generally, our time horizon when purchasing a company is three to five years. We will hold the stock as long as a margin of safety exists between price and value, and we remain confident in management’s ability to create additional value.

Annual portfolio turnover for the past three years has ranged from approximately 7% to approximately 34% across the Funds, and is usually well below 50%. There are no limits on portfolio turnover, however, and we sell portfolio holdings whenever we believe that sales would benefit Fund shareholders.

Other Investments. All Funds may invest a portion of assets in cash equivalents and a wide variety of securities other than common stock, including preferred stock, debt securities, warrants, puts, calls, options, financial futures, and combinations of these instruments. Current income is not an objective.

Cash Reserves. Normally, cash reserves and money market instruments do not exceed 15% of net assets. If, however, we have difficulty finding qualifying investments, all or any portion of Fund assets may be held in cash reserves until we can find securities that meet our investment criteria. As a result, there may be periods when the percentage of securities qualifying as “small cap” or “international” fall below the normal levels described in the investment policies of the Small-Cap and International Funds. Holding cash reserves can penalize short-term performance in rising markets, but during market declines cash allows us to purchase securities at discounted prices. Previously when cash has risen to over 20% for a prolonged period and inflows have continued to increase, we generally have closed the affected Funds. While we may hold any portion of assets in cash reserves for temporary defensive purposes during adverse market, economic or political conditions, such conditions generally create opportunities for us to put excess cash to work.

Other Risks of Investing Which Apply To All Funds

The primary risks of investing in the Longleaf Partners Funds appear on pages 5-7 of this Prospectus. Those risks include general market conditions, business ownership, non-diversification, possible limited liquidity, foreign market, and foreign currency hedging risks. Other risks include the following:

Puts, Calls, Options, Short Sales and Financial Futures. The Funds may invest selectively in a wide variety of put and call options, financial futures, swaps, combinations of these techniques, and in other similar financial instruments and may engage in short sales. Generally, these investments or techniques are used for hedging purposes or as an alternative to owning the underlying security. When used in conjunction with each other, these techniques can reduce market risks. If used separately, these instruments or techniques have risks. Gains on investments in options and futures and on short sales depend on correctly predicting the direction of stock prices, interest rates, and other economic factors. If a Fund were not able to close out its position, a significant loss could occur.

Restricted and Illiquid Securities. Each Fund may invest up to 15% of its net assets in unregistered and not readily marketable securities. Restricted or non-registered securities may be sold only in privately negotiated transactions or in limited amounts under other exemptions. A Fund might have to pay the registration expenses to sell such a position. When the securities are not saleable, adverse market conditions could lower the eventual sale price.

Bonds and Fixed Income Securities. The Funds may invest up to 15% of assets (at the time of purchase) in both investment and non-investment grade corporate and governmental bonds. High yield or non-investment grade bonds are more risky than investment grade securities. They may be less sensitive to interest rate changes, but may be more sensitive to economic downturns or adverse corporate developments.

More detailed information on investments and investment techniques appears in the Statement of Additional Information.

Portfolio Management and Fund Operations

Investment Adviser. Southeastern Asset Management, Inc. (“Southeastern”) is the Funds’ investment adviser. Formed in 1975, the firm has over 31 years of experience managing securities portfolios for institutional investors and individuals. Located in Memphis, Tennessee, Southeastern managed more than $39 billion in private account and mutual fund assets at December 31, 2006.

Code of Ethics. To align our interests with those of shareholders and prevent conflicts of interest, our Code of Ethics requires all employees and their spouses to limit their investments in publicly offered equity securities to shares of the Longleaf Partners Funds, unless granted prior clearance for other securities transactions. Employees must report their personal securities transactions quarterly. Any material violation of the Code of Ethics is reported to the Boards of the Funds. The Boards also review the administration of the Code of Ethics annually, and Trustees must obtain clearance before making purchases of publicly offered equity securities to avoid conflicts of interest. The Code of Ethics also prohibits market timing and selective disclosure of portfolio holdings.

Disclosure of Portfolio Holdings. The Funds’ policies and procedures related to disclosing Fund portfolio securities is included in the Statement of Additional Information, which is available without charge upon request by calling (800) 445-9469, option 1, or by visiting our website, www.longleafpartners.com.

Management Services. Southeastern manages the securities portfolios of the three Longleaf Partners Funds under an Investment Counsel Agreement initially effective in 1987. Southeastern also serves as Fund Administrator, providing administrative, business, legal and compliance services. The Funds are responsible for payment of all direct operating expenses, such as custodian and transfer agent fees, Trustees’ fees, professional fees of outside lawyers and accounting firms, registration fees, trade association dues, printing, postage, insurance premiums, costs of outside pricing vendors, and the costs of computer programs dedicated to Fund operations.

Advisory and Administration Fees. The Funds pay Southeastern the following annual fees as a percentage of average net assets for the services rendered:


	*Investment Counsel*		*Administration*
	*Fee*		*Fee*
		Actual	Actual
	Stated Fee	2006 Fee	2006 Fee
*Partners Fund*	1.00% on first
	$400 million in
	average net assets;
	0.75% on balance	0.76%	0.10%
*Small-Cap Fund*	1.00% on first
	$400 million in
	average net assets;
	0.75% on balance	0.78%	0.10%
*International Fund*	1.50% on first
	$2.5 billion in
	average net assets;
	1.25% on balance	1.45%	0.10%

All of the Funds have a contractual expense limitation included in their investment counsel agreements with Southeastern, requiring Southeastern to reduce its fees to the extent necessary to limit normal annual operating expenses to a stated percentage of average net assets per annum, excluding interest, taxes, brokerage commissions, and extraordinary expenses. The investment counsel and fund administration fees are included in normal operating expenses. Shareholder approval is required to amend or remove these expense limitations. The expense limitation for the Partners and Small-Cap Funds is 1.50% of average net assets annually; the expense limitation for the International Fund is 1.75% of average net assets annually. A discussion of factors considered by the Boards of Trustees in electing to renew the Investment Counsel and Fund Administration Agreements with Southeastern is contained in Longleaf’s Annual Report, which is available without charge upon request by calling (800) 445-9469, option 1, or by visiting our website, www.longleafpartners.com.

Portfolio Managers. The individuals identified as portfolio managers are senior members of the Southeastern’s research team, which is responsible for stock selection. Portfolio managers oversee the structuring of portfolios for consistency with Fund guidelines and regulatory requirements. The Statement of Additional Information provides additional information about portfolio manager compensation, other accounts managed by the portfolio manager, and each portfolio manager’s ownership of Fund securities.

Name, Title, and Years

Fund Portfolio

with Southeastern

Responsibility

Funds

O. Mason Hawkins
Chairman of the Board and

Co-Portfolio Manager

All

C.E.O.
Since 1975

G. Staley Cates
President

Co-Portfolio Manager

All

Since 1986

E. Andrew
McDermott, III
Vice President — Investments

Co-Portfolio Manager

International Fund

Since 1998

Team Approach. Day-to-day management of portfolios is a team effort, requiring the involvement of Southeastern’s full research staff as well as administrative support. Regarding research, Southeastern believes that each of its clients, including the Longleaf Partners Funds, should have the full benefit of Southeastern’s skill and experience. Each analyst is a generalist, charged with producing ideas for any portfolio in any industry or country. Once an idea is generated, it faces the scrutiny of the full research team, and must qualify under Southeastern’s strict investment criteria. No investment is approved unless the concerns of each analyst on the team have been addressed. This team approach reinforces Southeastern’s disciplines, as it requires each team member to participate in the analysis and evaluation of every analyst’s ideas. Once an idea has qualified for investment, the research team decides the mandates for which an investment is appropriate.

To monitor individual client guidelines, regulatory requirements, cash movements, and progress regarding purchases and sales of securities, portfolio managers work closely with Southeastern’s trading, legal, accounting, compliance, and client service functions. Portfolio managers receive routine reports from each of these departments to facilitate day-to-day management of portfolios, and to ensure that investment decisions are consistent with client mandates and regulatory requirements.

Fund Operations. Each Fund has a separate Board of Trustees which oversees all operations of the particular Fund. The same Trustees serve all three Funds. 75% of the Trustees are independent of and not affiliated with Southeastern. The investment and administrative functions for each Fund are performed or supervised by the officers and employees of Southeastern under investment advisory and fund administration agreements with each of the Funds. Information on employment experience and educational backgrounds of the Funds’ Trustees appears on the following pages.

Audit Committee. Mr. Deloach serves as Chairman of the Audit Committee, which is composed of Messrs. Carpenter, Connell, Deloach, Melnyk, Ray, and Steger. All members of the Audit Committee are classified as independent or “non-interested” Trustees. The Audit Committee has adopted a Charter, and holds private meetings each year with representatives of the audit firm.

Board of Trustees

O. Mason Hawkins, CFA*, Trustee and Co-Portfolio Manager.
Founder, Chairman and CEO, Southeastern Asset Management, Inc. (since 1975).
Education: B.S.B.A., Finance, University of Florida, 1970;
M.B.A., University of Georgia, 1971.

Margaret H. Child*, Trustee.
Marketing Consultant since 2005. Chief Marketing Officer,
Bingham McCutchen, LLP (1999-2004) (an international law firm);
Director of Marketing, Arthur Andersen L.L.P. (accounting firm),
Atlanta, GA office (1998-1999), Memphis, TN office (1991-1998).
Education: B.A., Harvard College of Harvard University, 1978.

Chadwick H. Carpenter, Trustee.
Private investor and consultant since 1998. Previously, Senior Executive Officer at Progress
Software Corporation (software development for commercial applications), Bedford, MA (1983-1998).
Education: B.S., Electrical Engineering, Massachusetts Institute of Technology, 1971; M.S., Electrical Engineering, Massachusetts Institute of Technology, 1972.

Daniel W. Connell, Jr., Trustee.
Private Investor since 2005. President and CEO, Twilight Ventures, LLC (investment holding company) (2004-2005); Senior Vice President—Marketing, Jacksonville Jaguars, Ltd. (National Football League franchise), Jacksonville, FL (1994-2004); Chairman, Jacksonville Chamber of
Commerce (1997); Commissioner, Jacksonville Economic Development Commission; Advisory Director, First Union National Bank of Florida.
Education: B.S.B.A., University of Florida, 1970.


*		Mr. Hawkins is a director and officer of Southeastern, which pays his compensation, and is deemed to be a Trustee who is an “interested” person as defined in Section 2(a)(19) of the Investment Company Act of 1940. Ms. Child is not affiliated with and receives no compensation from Southeastern. She performs certain administrative and operational functions for the Funds in Massachusetts, their state of organization, and accordingly could be deemed to be “interested.”

Rex M. Deloach, Trustee.

President, Financial Insights, Inc. (financial consulting and litigation support), Oxford, MS (since 2002); Vice President, The Oxford Company (private land and timber investments), Oxford, MS (since 1994).

Education: B.B.A., University of Memphis, 1963.

Steven N. Melnyk, Trustee.

Real Estate Development, The Sea Island Company, since 2005; Private investor and consultant (since 1997). President, Riverside Golf Group, Inc. (design, construction and operation of golf courses), Jacksonville, FL (1987-Present); Golf commentator and sports marketing executive, ABC Sports (1991-2004); Founding director and former Chairman, First Coast Community Bank, Fernandina Beach, FL.

Education: B.S.B.A., Industrial Management, University of Florida, 1969.

C. Barham Ray, Trustee.

Partner, SSM Corporation (venture capital firm), Memphis, TN (since 1974); Director, Financial Federal Savings Bank, Memphis, TN.

Education: B.A., Vanderbilt University, 1968; M.B.A., University of Virginia, 1973.

Perry C. Steger, Chairman of the Board.

President, Steger & Bizzell Engineering, Inc. (consulting civil engineering firm) Austin, TX (since 2003; project manager 1984-1990); Director of Product Strategy, National Instruments, Inc. (measurement and automation products), Austin, Texas (1996-2003). Founded Georgetown Systems, Inc. to develop and market industrial automation software, which was acquired by National Instruments, Inc. in April 1996.

Education: B.S., Civil Engineering, University of Texas, 1984.


		Supplemental information about the members of the Boards of Trustees appears in the Statement of Additional Information, a separate document, which can be obtained without charge by calling (800) 445-9469, option 1, or on our website at www.longleafpartners.com.

Shareholder Manual

General Information

Funds Closed to New Investors . The Partners Fund and Small-Cap Fund are closed to new shareholders unless you meet one of the exceptions outlined on page 30. The Funds are not for offer or sale in jurisdictions where such offer or sale would not be lawful.

Minimum Initial Investment. The minimum initial investment for each account is $10,000. Exceptions to the investment minimum are outlined on page 30. Other than our $100 minimum for automatic monthly investment plans, there is no minimum amount required for subsequent investments. All purchases are subject to acceptance, and we may reject purchases to protect other shareholders.

Transfer Agent. PFPC of Westborough, Massachusetts, handles all shareholder purchases, redemptions and account changes. Please direct your requests and questions about your account to PFPC at (800) 445-9469, option 0. Southeastern Asset Management, Inc. (“Southeastern”) does not process transactions and will forward any account maintenance correspondence and transaction instructions received in Memphis to PFPC. These items will be processed when they are received by PFPC.

Account Access Information. You may obtain personal account information on the Funds’ website, www.longleafpartners.com, by calling our automated information line, (800) 445-9469, option 3, or by calling our shareholder services associates at (800) 445-9469, option 0.

Short-term Trading. The Funds do not permit short-term trading or market-timing. The Funds are intended for long-term investors. Short-term trading into or out of a Fund may harm the Fund’s performance by disrupting portfolio management strategies, by increasing expenses or by diluting the value of fund shares held by long-term shareholders. Accordingly, if you engage in short-term trading of Fund shares (whether you hold Longleaf directly or through an intermediary) a Fund may suspend or terminate your ability to make further purchases. Generally, Longleaf deems a substantial redemption or exchange within six months of purchase a violation of its short-term trading policies. A Fund may consider a shareholder’s history in any Fund, including trading history in other accounts under common ownership or control, in determining whether to stop purchases on an account.

It is one of the Funds’ governing principles that we will discourage short-term speculators and market timers. In implementing this principle, the time period we monitor is six months, which may be

longer than many funds whose focus is simply eliminating opportunities for dilution. Thus, even if you are not a literal “market timer” trying to take advantage of time zone differences and potential pricing inefficiencies, if your investment horizon is not long term (at least 6 months), then you should not buy Longleaf . Earlier sections of this Prospectus discuss the importance of patience and a long-term view for Longleaf’s strategies to be successful, and we insist that our investment partners share this approach.

The Funds’ Trustees have established policies and procedures designed to reduce the impact of short-term trading and market timing on the Funds, including fair value pricing and trade activity monitoring. The Trustees may alter policies and procedures without prior notice to shareholders.

Fair Value Pricing. The Board of Trustees has adopted procedures to fair value each Fund’s securities when market prices are not “readily available” or are unreliable (see How Fund Shares are Priced). For example, a Fund may fair value a security when a security is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; when a security’s primary trading market is closed during regular market hours; or when a security’s value is materially affected by company news or any other events occurring after the close of the security’s primary trading market.

By fair valuing securities whose prices may have been affected by events occurring after the close of trading, each Fund seeks to establish prices that investors might expect to realize upon the current sales of these securities. This methodology is designed to deter “arbitrage” market timers, who seek to exploit delays between the change in the value of a Fund’s portfolio holdings and the net asset value of the fund’s shares, and seeks to ensure that the prices at which the Fund’s shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders. Each Fund makes fair value determinations in good faith in accordance with the Fund’s valuation procedures, but there is a risk that the fair value may be higher or lower than the value a Fund would have received if it had sold the security.

Trade Activity Monitoring. The Funds monitor trading activity on a daily basis for transactions that violate our short-term trading policies. We may restrict any account whose pattern of trading activity appears to be inconsistent with long-term shareholder interests, and a single transaction that violates our policies, if detected, will result in placement of a restriction on your account. Certain non-discretionary transactions (such as routine monthly investment or withdrawal) and exceptional circumstances (such as medical emergency, other hardship) may fall outside Longleaf’s short-term trading prohibitions, but Longleaf will make such determinations in its sole discretion, and reserves the right to reject any purchase to protect long-term shareholders.

Intermediaries. While Longleaf monitors for frequent trading activity and will not knowingly permit such activity in the Funds, certain accounts sometimes referred to as omnibus accounts include multiple investors whose transactions are netted against one another before an order is placed with the Funds. The netting effect in these accounts makes identifying and eliminating market-timers more difficult. Pursuant to SEC Rule 22c-2, the Funds have made contractual arrangements with intermediaries to require cooperation to help stop frequent trading, but it is possible frequent trading may still occur in these accounts. Where it appears that frequent trading activity may be occurring in an omnibus account, Longleaf will work with intermediaries to stop frequent trading, and reserves the right to impose restrictions on individual traders in omnibus accounts, or the entire account, if an intermediary is not effective in policing timing activity.

Redemption Fee . Despite our efforts to stop frequent trading, it may still occur. If deemed necessary or appropriate by the Funds’ Trustees, Longleaf may impose a redemption fee (payable to the Funds) to deter market timing. Shareholders will be provided advance notice and a supplement to this Prospectus if the Funds choose to impose a redemption fee.

Anti-Money Laundering Regulations. As part of the Funds’ legal responsibility for the prevention of money laundering, Southeastern and the Funds’ service providers require a detailed verification of the identity of shareholders, and individuals with authority or control over an account opened by entities such as corporations, partnerships, and trusts.

Prior to an account being opened, the Funds must have certain information such as name, street address, date of birth, and U.S. taxpayer identification number (the “Identifying Information”). In the case of an account opened by an entity, we also require copies of certain organizational documents.

A delay or failure to produce the Identifying Information or required documentation will render the application “not in good order,” and no purchase will be allowed until the requested information has been received. When the Identifying Information or documentation has been supplied and the application is in good order, the Funds will process the application and initiate procedures to verify the shareholder’s identity. If the Funds cannot verify a shareholder’s identity, further purchases will be disallowed and that account may be closed. If the account is closed, the shareholder will receive proceeds based on the next calculated net asset value of the Fund(s) in which the shareholder invested. The Funds, by written notice to a shareholder, may suspend the payment of withdrawal proceeds if necessary to comply with anti-money laundering regulations applicable to the Funds,

Southeastern or any of the Funds’ service providers. In addition, the Funds will share the identity of shareholders with federal regulators if required to do so by law and may report a failure to verify a shareholder’s identity with federal authorities in accordance with applicable law. The Funds, Southeastern, and the Funds’ service providers reserve the right to implement additional policies and procedures to detect and prevent money laundering.

Privacy Of Personal Information

The Longleaf Partners Funds collect nonpublic personal information about our shareholders from the following sources:

	•		Information on applications or other forms, such as name, address, age, and social security number; and

	•		Information about Longleaf transactions, such as purchase and redemption activity and account balances.

We restrict access to nonpublic personal information to service providers involved in administering and servicing Longleaf accounts. Otherwise, we do not disclose nonpublic personal information about our present or former shareholders to third parties, except as permitted by law. We and our service providers maintain physical, electronic and procedural safeguards in accord with federal regulations to protect the nonpublic personal information of Longleaf shareholders.

If you hold shares of the Funds through a financial intermediary, such as a broker-dealer, bank, or trust company, the privacy policy of your financial intermediary governs how your nonpublic personal information would be shared with non-affiliated third parties.

How To Open A New Account

Checks and wire transfers for investments received by the transfer agent in good order before the close of the New York Stock Exchange are processed at that day’s closing price. Investments received after the close of the Exchange are priced at the next business day’s closing price.

The Funds cannot accept post dated checks, third party checks, money orders, credit card convenience checks, or checks drawn on a foreign bank, nor can the Funds hold investments to be processed at a later date. Cashiers checks must include the shareholder’s name.

By Check:

	•		Complete and sign the application. Be sure to provide all data labeled “REQUIRED.”

	•		Make check payable to “Longleaf Partners Funds.”

	•		Indicate on account application and check the amount to be invested in each Fund.

	•		Send application and initial investment to:


By regular mail:		By express mail or overnight courier:
Longleaf Partners Funds		Longleaf Partners Funds
P. O. Box 9694		c/o PFPC Inc.
Providence, RI 02940-9694		101 Sabin Street
		Pawtucket, RI 02860
		(508) 871-8800

Items delivered to the P.O. Box are not deemed “received” until they arrive at PFPC for processing. Time critical items requiring proof of receipt should be sent to the Pawtucket, RI address.

By Wire Transfer:

	•		Call the Funds at (800) 445-9469 (option 0) to obtain information on establishing a new account.

	•		After providing the original application and all required documentation in good order, you will be provided with a new account number.

	•		Using your new account number, instruct your bank to wire funds as follows:

			PNC Bank Pittsburgh, PA ABA #031000053 Account Number: 8606905185 Specify Longleaf Partners Funds # #133 (Partners Fund) #136 (International Fund) #134 (Small-Cap Fund) For credit to: (your name as account is registered) Shareholder account #: (your account number)

	•		PFPC will not process wire transfers without a Fund and account number. If your instructions are not in good order, your purchase may be delayed or your wire may be returned.

Individual Retirement Accounts. Please request an IRA Application Kit to open a Traditional IRA, Roth IRA or SEP. The kit contains an explanation of tax considerations, information on the Trustee, and instructions for opening your retirement account. The minimum initial investment for an IRA account is $10,000. The minimum is usually satisfied primarily by transferring funds from an existing IRA or qualified retirement plan.

Additional Investments

There is no minimum required for subsequent investments, unless you have requested automatic monthly investment, for which the minimum is $100.

By Check. Send your check with the remittance stub from your account statement or with an instruction letter to our transfer agent, PFPC. Your communication must contain name, address, and account number. Designate on your check and remittance stub the particular Fund(s) in which you are investing. The Funds cannot accept post dated checks, third party checks, money orders, credit card convenience checks or checks drawn on a foreign bank.

By Wire Transfer. Follow the wire instructions shown previously. Be sure to include your Fund and Account number on your wire.

By Telephone and Electronic Transfer. You may establish electronic transfer capabilities on your account application or by sending written instructions to our transfer agent. You must include a voided check. You may purchase shares of the Funds by calling the transfer agent at (800)

445-9469, option 0, to initiate an electronic transfer from your bank account. Electronic transfers can only be made from bank checking accounts and not from Money Market Funds or other financial accounts. Your purchase price will be the net asset value computed on the next business day following your telephone purchase request. Your initial investment cannot be made by electronic transfer.

By Automatic Monthly Investment. You may establish an automatic monthly investment of $100 or more by completing the designated section on your account application or by sending written instructions with a Medallion Signature Guarantee to our transfer agent. You must include a voided check with your request. We do not charge a fee for this service. Consult your banking institution about any fees that it may charge. Electronic transfers can only be made from bank checking accounts and not from Money Market Funds or other financial accounts. Transfers will occur on the business day on or about the 21st of each month. You can stop or change the amount of your automatic monthly investment by calling us at (800) 445-9469, option 0. If stopped, you can restart your monthly investment by calling us at (800) 445-9469, option 0, within 6 months of the time your automatic investment was stopped. You must send written instructions to make other changes to your automatic investment or to restart your automatic investment if it has been stopped for more than 6 months.

Certificates. If you would like to receive Fund share certificates for your investments, you must send a written request with a Medallion Signature Guarantee to our transfer agent. Your certificates will not be issued until 15 days after your purchase unless the shares were purchased through a wire transfer. You cannot redeem certificated shares until the certificates have been returned to the transfer agent. If you lose your certificates, you will need to purchase a lost certificate surety bond.

Returned Checks or Rejected Transfers. You are responsible for any expenses or losses incurred by the Funds if your check is returned or your electronic transfer order is rejected by your bank for any reason, including insufficient funds or a stop payment request. These expenses and losses include additional custodial and transfer agent fees as well as any loss the Funds incur on the cancellation of the shares issued for your account. If you are an existing shareholder, the Funds may collect these losses by redeeming the necessary amount from your account and may reject future purchases.

Exceptions To Investment Minimum And Closed Funds

Prior Approval for Exceptions. Approval for exceptions must be obtained by calling Southeastern at (901) 761-2474 prior to making your investment. We reserve the right to make additional exceptions or otherwise modify these exceptions at any time and to reject any investment for any reason.

Exceptions to $10,000 Investment Minimum. The following investors may open a new account in any open Fund with an initial investment of less than $10,000:

•		Family members of shareholders who have at least $250,000 invested in one of the Longleaf Partners Funds may open one or more accounts in the same Fund for a $5,000 initial investment.

•		Employees of Southeastern and their family members and employees of Longleaf service providers may open new accounts with a $1,000 initial investment.

Closed Fund Exceptions. The Partners and Small-Cap Funds closed to new investors on July 16, 2004 and July 31, 1997, respectively. The following investors may open new accounts in a closed Fund for an initial investment of $10,000 if approved by Southeastern:

•		Existing shareholders in a closed Fund and their immediate family members may open accounts in the same Fund. For this purpose, an immediate family member is your spouse or minor child.

•		Individual financial advisors and consultants who have maintained accounts in a closed Fund since its closing date may add new clients to that Fund.

•		Institutions and affiliates of institutions having an investment advisory relationship with Southeastern of at least $25,000,000.

•		Employees of Southeastern and their family members and employees of Longleaf service providers may open new accounts.

If you redeem your account in a closed Fund below the minimum initial investment amount of $10,000, you will not be allowed to make further investments unless that Fund reopens.

How To Redeem Shares

You may withdraw any portion of your account in a share or dollar amount at any time. We will send your redemption proceeds within one week of receipt of your redemption request in good order. To allow the Fund to plan for large redemptions in an orderly manner, we request that you notify us of anticipated redemptions of $1,000,000 or more at least 5 business days before sending the formal redemption request. We must have received a completed and signed account application or W-9 form before releasing your redemption proceeds.

Redemption and Exchanges By Telephone. Investors who have established telephone redemption and exchange privileges may redeem or make exchanges of up to $100,000 over the telephone. Telephone redemptions may not be made from IRA accounts. Accounts with address change requests within the last 30 days must submit written redemption instructions with a Medallion Signature Guarantee. The following procedures are applicable:

•		You may establish telephone redemption and exchange privileges when completing the account application or you may request the service by sending a written request to our Transfer Agent.

•		Call (800) 445-9469, option 0, if you have established telephone redemption and exchange privileges on your account.

•		Exchanges into new accounts must meet the $10,000 minimum and any closed fund exceptions.

•		Proceeds of redemptions will be sent only to the address of record or in accordance with previously established bank instructions.

•		Calls received before the close of the New York Stock Exchange receive that day’s price.

•		Calls received after the close of the New York Stock Exchange receive the next day’s price.

•		The Funds may not hold a redemption request to be processed at a later date.

Please retain the confirmation number assigned to your telephone redemption or exchange as proof of your trade. You cannot change or cancel a telephone redemption or exchange request after the transaction has been placed. The transfer agent employs reasonable procedures to confirm that instructions received by telephone are genuine. When these procedures are followed, the Funds and the transfer agent are not liable for losses caused by such instructions. The Fund reserves the right to revise or terminate telephone redemption and exchange privileges at any time.

Redemptions By Letter. The following information must be included in a redemption request:

	•		Your account number;

	•		Fund name and number—Partners Fund (#133); Small-Cap Fund (#134); International Fund (#136);

	•		The amount of the redemption, specified in either dollars or shares;

	•		The signatures of all owners, exactly as they are registered on the account;

	•		Medallion Signature Guarantees for redemptions over $100,000, if the proceeds will be sent to a destination not previously established on the account, or you are requesting a certificate to be issued;

	•		Fund Certificates, if any have been issued for the shares being redeemed;

	•		Other supporting legal documents that may be required in cases of estates, corporations, trusts and certain other accounts.

Please call our transfer agent at (800) 445-9469, option 0, if you have questions about these requirements.

Redemption requests and required documentation should be sent as follows:


By regular mail:		By express mail or overnight courier:
Longleaf Partners Funds		Longleaf Partners Funds
P.O. Box 9694		c/o PFPC
Providence, RI 02940-9694		101 Sabin Street
		Pawtucket, RI 02860
		(508) 871-8800

Items delivered to the P.O. Box are not deemed “received” until they arrive at PFPC for processing. Time critical items requiring proof of receipt should be sent to the Pawtucket, RI address.

Distributions and transfers from IRA accounts are subject to additional requirements. Please obtain our “Retirement Account Distribution Form,” “IRA Transfer & Conversion Form,” or consult your tax advisor when redeeming from your retirement account.

Automatic Withdrawals. You may establish automatic withdrawals from your account by sending written instructions to the transfer agent. You may request withdrawals monthly, quarterly, semi-annually or annually. Withdrawals will be processed on or about the 21st day of the month they are scheduled to occur. You can stop or change the amount of your automatic withdrawal by calling us at (800) 445-9469, option 0. If stopped, you can restart your automatic withdrawal by calling us at (800) 445-9469, option 0, within 6 months of the time your systematic withdrawal was stopped. You must send written instructions to make other changes or to restart these withdrawals if they have been stopped for more than 6 months.

Collected Funds. Whether you are redeeming by telephone or in writing, the Funds must have received payment for the shares you are redeeming. The transfer agent will send payment for the amount of your redemption covered by collected funds. Any portion of a redemption request not covered by collected funds may be delayed for up to 15 days from the date of purchase, or until your check has cleared, to ensure that collected funds have been received.

Redemption Price and Fees. Your redemption price will be the net asset value per share at the next market close after the receipt of your redemption request in good order. The redemption price may be more or less than the shares’ original cost. The Funds may charge a redemption fee (payable to the Funds) if required by law or if the Funds’ Trustees determine a fee would discourage short-term speculators and market timers. Account Changes. You may change the address on your account by calling us at (800) 445-9469, option 0, or while accessing your account information on our website at www.longleafpartners.com, or by sending a written request to our transfer agent, PFPC. Other changes to your account registration or account privileges must be made in writing.

Medallion Signature Guarantee. A Medallion Signature Guarantee is required when:

	•		You are redeeming more than $100,000 or are requesting a transfer or exchange for more than $100,000.

	•		You are requesting that a redemption be sent to an address or bank instructions other than those already established for your account.

	•		You are requesting a redemption check to an alternate payee.

	•		You are requesting a transfer, rollover, or other distribution of more than $100,000 from your IRA account.

	•		You are requesting changes to the ownership of an account with a value greater than $100,000.

	•		Your partial redemption request is accompanied by a request to change your account registration or account privileges.

	•		You are requesting a redemption within 30 days of a change of address.

	•		You are adding or changing bank wire or electronic transfer instructions on your account.

	•		You are requesting a certificate.

There may be circumstances in addition to those listed above that require a Medallion Signature Guarantee. Please contact us at (800) 445-9469, option 0, if you have questions regarding these requirements.

Acceptable medallion guarantees may be obtained from banks, brokerage firms or other institutions that are members of either the Securities Transfer Association Medallion Signature Program (STAMP), the New York Stock Exchange Medallion Signature Program (MSP), or the Stock Exchange Medallion Program (SEMP). The guarantee must be in original form, as photocopies or fax copies are not accepted. The surety bond coverage of the Medallion Signature Guarantee on your request must be equal to, or greater than, the value of the requested transaction, and the guarantee must have unlimited effectiveness. Notarization is not an acceptable Medallion Signature Guarantee.

Confirmations and Reports. If you invest directly with the Funds, you will receive a confirmation statement after each account transaction and a balance statement at the end of each calendar quarter. Please review your statement for accuracy and report any discrepancies to our transfer agent promptly. You will also receive tax documentation as required by the IRS. We publish quarterly, semi-annual and audited annual reports containing information on each Fund’s portfolio of investments, generally 45 days after the end of each quarter. These reports are mailed to shareholders and are available on the Funds’ website at www.longleafpartners.com, or by calling us at (800) 445-9469, option 1.

Purchases and Redemptions Through Brokerage Firms and Other Authorized Intermediaries. You may purchase and redeem shares of the Funds through brokerage firms and other authorized institutions that have agreements with the Funds. Some firms charge transaction fees for their services. If you invest through an authorized firm, you must follow that firm’s procedures for buying and selling shares. If a particular firm allows you to invest below Longleaf’s minimum, and you subsequently decide to hold directly with Longleaf, you must bring your account up to Longleaf’s $10,000 minimum, or you will be forced to redeem your shares. The firm may designate other organizations to accept purchase and redemption orders on behalf of their clients. If the firm submits trades to the Fund in accordance with the Funds’ trading agreement, the Funds will use the time of day when the firm or its designee accepts the order to determine the time of purchase or redemption, and will process the order at the next closing price computed after acceptance. The brokerage firm or other authorized institution has the responsibility of sending prospectuses, financial reports, statements, and tax forms to its clients.

Broker/Dealer and Institutional Investments. Upon execution of formal trading agreements, the Funds will accept trade orders from members of the National Association of Securities Dealers (NASD) or other institutional investors. The Funds offer telephone and automated trading through our transfer agent. Institutional investors may also establish pre-authorized fax redemption privileges. Please contact Southeastern at (901)761-2474 to obtain more information about these trading options.

Full payment for all purchases must be received within one day of the trade date. The entity initiating the trade order will be responsible for any loss that results from non-settlement. All purchase minimums and other requirements outlined in the trade order agreements must be followed to remain in good standing. The Funds may withdraw trading privileges at any time if it is in their best interests.

Payment of Redemptions Exceeding $250,000. The Longleaf Partners Funds have made an election to pay in cash the first $250,000 of any shareholder’s redemptions during any 90 day period. For omnibus accounts of brokers, this commitment applies to each separate shareholder rather than to the omnibus account as a whole. As allowed by Rule 18f-1, we reserve the right to pay the balance of any redemptions exceeding $250,000 by distributing portfolio securities rather than cash. We may elect to exercise this right for any reason. If securities in lieu of cash are distributed to you, you will need a brokerage account in which to receive the securities, you will incur brokerage commissions when selling the securities, and the securities will be subject to prevailing market prices at the time of sale.

How Fund Shares Are Priced

The price at which you buy or sell your Fund shares is referred to as their net asset value or “NAV.” We calculate NAV by dividing the total value of a Fund’s assets less its liabilities by the number of shares outstanding. We determine the NAV once a day, at the close of regular trading on the New York Stock Exchange (usually at 4:00 p.m. Eastern time) on days the Exchange is open for business. The Exchange is closed for specified national holidays and on weekends.

The values of the Funds’ investments are based on their market values. Securities listed or traded on a securities exchange (U.S. or foreign), on the NASDAQ national market, or on any representative quotation system providing same day publication of actual prices are valued at the last sale price. If there are no transactions in the security that day, securities are valued at the midpoint between the closing bid and ask prices or, if there are no such prices, the prior day’s closing price. In the case of bonds and other fixed income securities, valuations may be furnished by a pricing service which takes into account factors in addition to quoted prices (such as trading characteristics, yield, quality, coupon rate, maturity, type of issue, and other market data relating to the priced security or other similar securities) where taking such factors into account would lead to a more accurate reflection of the fair market value of such securities. When market quotations are not readily available, portfolio securities are valued in good faith by and under the general supervision of the Funds’ Trustees.

In determining fair value, the Board considers all relevant qualitative and quantitative information available including news regarding significant market or security specific events. The Board may also utilize a service provided by an independent third party to assist in fair valuation of certain securities. These factors are subject to change over time and are reviewed periodically. Because the utilization of fair

value depends on market activity, the frequency with which fair valuation may be used cannot be predicted. Estimated values may differ from the values that would have been used had a ready market for the investment existed.

We usually price foreign securities at the latest market close in the foreign market, which may be at different times or days than the close of the New York Stock Exchange. If events occur which could materially affect the NAV between the close of the foreign market and normal pricing at the close of the New York Stock Exchange, we may price the foreign securities at fair value as determined by the Board of Trustees, consistent with any regulatory guidelines.

Because the Funds are closed on days that foreign markets may be open, the prices of foreign holdings may change on days when investors do not have access to the Funds.

The Statement of Additional Information, which is a separate document, contains more information on how we price portfolio securities.

Dividends and Distributions

We intend to qualify for favorable tax treatment under the federal Internal Revenue Code by satisfying the Internal Revenue Code diversification standards and by distributing to shareholders essentially all investment income and realized capital gains. The Funds’ investment income, comprised primarily of dividends on portfolio securities and interest from cash equivalents or bonds, is usually distributed in late December. Realized capital gains for the 12 months ended October 31 are usually distributed in November. Your income dividends and capital gains distributions will be reinvested in additional shares of the Funds unless you have chosen to receive them in cash. If you make an investment shortly before a dividend is declared, you will be taxed on the full dividend in the same manner as shareholders who have owned shares throughout the year.

We discourage redemptions to avoid taxable distributions. This practice can be disruptive to a Fund’s investment strategy and places a greater portion of a Fund’s tax burden on remaining shareholders. To the extent we identify this type of activity, we will place your account on “sell only” status and will disallow future purchases. The identification of such trading activity involves judgments that are inherently subjective and our efforts to discourage this behavior cannot eliminate the possibility that the trading activity will occur.

Dividends and Capital Gains paid in cash can only be sent to your address of record or to existing bank instructions on your account. You may choose to change your election to have your distributions paid in cash or reinvested by calling us at (800) 445-9469, option 0.

Taxes

This tax information is general and refers primarily to current federal income tax provisions. These provisions may change after publication

of this Prospectus. We urge you to consult your own tax adviser about the status of distributions and redemptions as applied to your personal situation.

Taxes on Income Dividends and Capital Gains Distributions. Generally, the Funds are not taxed on dividends and capital gains distributed to shareholders. Unless your account is a tax advantaged account such as an Individual Retirement Account or you are a tax exempt organization, you are responsible for paying federal and possibly state income taxes on any dividends and capital gains distributions you receive, even if you reinvest your distribution in additional shares of the Funds. Fund dividends from net investment income and short-term capital gains are taxed at your ordinary income tax rate, except that “qualified dividend income” of noncorporate investors who satisfy certain holding period requirements is taxed at long-term capital gain rates. Long-term capital gains from securities held by the Funds for one year or more are taxed at your applicable capital gains rate. IRS Form 1099-DIV, mailed to you after December 31, will report the federal tax category of these distributions.

Taxes on Sales of Fund Shares. If you redeem any Fund shares or if you exchange shares between Funds, the transaction is taxable and you may realize a capital gain or loss. The amount of the gain or loss is the difference between your tax basis and the amount received. The gain or loss is long-term for shares you have held for more than one year, and is short-term for shares held one year or less. You are responsible for reporting and paying any federal or state taxes which may be due. Withholding. Federal law requires the Funds to withhold a portion of distributions and proceeds from redemptions if you have failed to provide a correct tax identification number or to certify that you are not subject to withholding. These certifications must be made on your application or on Form W-9, which may be requested from our transfer agent.

The Statement of Additional Information contains more information about tax issues relating to the Funds.

Financial Highlights

The financial highlights table is intended to help you understand the Funds’ financial performance for the past five years. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund’s (assuming reinvestment of all dividends and distributions).

Longleaf Partners Funds FINANCIAL HIGHLIGHTS

The presentation is for a share outstanding throughout each period.


						Net
						Gains
	Net					(Losses) on									Distri-
	Asset		Net			Securities			Total			Dividends			butions
	Value		Investment			Realized			From			from Net			from
	Beginning		Income			and			Investment			Investment			Capital
	of Period		(Loss)			Unrealized			Operations			Income			Gains
*Partners Fund*
Year ended December 31,
2006	$	30.97	$	.14		$	6.53		$	6.67		$	(.14	)	$	(2.64	)
2005		31.32		.29			.83			1.12			(.29	)		(1.18	)
2004		29.98		.07			2.05			2.12			(.15	)		(.63	)
2003		22.24		.08			7.66			7.74			—			—
2002		24.51		.04			(2.08	)		(2.04	)		(.04	)		(.14	)
*Small-Cap Fund*
Year ended December 31,
2006		27.02		.50			5.49			5.99			(.56	)		(2.33	)
2005		29.85		.58			2.43			3.01			(.57	)		(5.27	)
2004		28.81		.42			3.75			4.17			(.43	)		(2.70	)
2003		20.33		.45			8.47			8.92			(.44	)		—
2002		21.68		.52			(1.32	)		(0.80	)		(.53	)		(.02	)
*International Fund*
Year ended December 31,
2006		17.36		.02			2.89			2.91			(.01	)		(1.35	)
2005		15.55		(.01	)		2.01			2.00			—			(.19	)
2004		14.11		(.08	)		1.52			1.44			—			—
2003		9.97		(.07	)		4.21			4.14			—			—
2002		12.34		(.06	)		(1.99	)		(2.05	)		—			(.32	)


^(a)		Total return reflects the rate that an investor would have earned on investment in the Fund during each period, assuming reinvestment of all distributions.

^(b)		Expenses presented include dividend expense and brokerage fees for short-sales. The operating expense ratio was 1.69%.

This information has been audited by PricewaterhouseCoopers LLP, whose report, along with the Funds’ financial statements, are included in the Statement of Additional Information and annual report, which are available upon request.


																Ratio of
													Ratio of			Net
						Net							Expenses			Investment
						Asset					Net Assets		to			Income
Return			Total			Value					End of		Average			(Loss) to			Portfolio
of			Distri-			End of		Total			Period		Net			Average			Turnover
Capital			butions			Period		Return ^(a)			(thousands)		Assets			Net Assets			Rate
$	—		$	(2.78	)	$	34.86		21.63	%	$	10,871,594		.90	%		.45	%		18.98	%
	—			(1.47	)		30.97		3.62			8,779,205		.91			.95			6.64
	—			(.78	)		31.32		7.14			8,999,465		.90			.28			13.38
	—			—			29.98		34.80			7,668,968		.91			.32			7.37
	(.05	)		(.23	)		22.24		(8.34	)		4,787,662		.91			.17			19.57

	—			(2.89	)		30.12		22.33			3,447,285		.92			1.87			34.45
	—			(5.84	)		27.02		10.75			2,812,543		.93			2.21			17.28
	—			(3.13	)		29.85		14.78			2,673,843		.93			1.52			31.04
	—			(.44	)		28.81		43.85			2,365,085		.95			1.89			4.44
	—			(.55	)		20.33		(3.74	)		1,677,194		.95			2.43			16.91

	—			(1.36	)		18.91		17.07			3,254,538		1.61			.09			24.30
	—			(.19	)		17.36		12.88			2,880,730		1.64			(.05	)		16.93
	—			—			15.55		10.21			2,579,635		1.66			(.57	)		18.86
	—			—			14.11		41.52			1,923,581		1.68			(.68	)		10.18
	—			(.32	)		9.97		(16.51	)		1,086,714		1.80	^(b)		(.68	)		15.86

Investment Counsel
Southeastern Asset Management, Inc.
6410 Poplar Avenue, Suite 900
Memphis, TN 38119

Transfer and Dividend Agent
PFPC Inc.
Westborough, MA

Custodian
State Street Bank & Trust Company
Boston, MA

Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
Baltimore, MD
Boston, MA

This Prospectus does not constitute an offering in any jurisdiction in which such offering would not be lawful.

You can find more information about the investment objectives and policies, the risks of investing, Fund operations and Longleaf’s Proxy Voting Policies and Procedures in the Statement of Additional Information (SAI). The SAI is incorporated by reference in this Prospectus, and you may request a free copy by visiting our website or calling (800) 445-9469, option 1.

You can also find more information about the Longleaf Partners Funds in our annual and semi-annual reports to shareholders. In the Fund’s annual report, you will find a discussion of market conditions and investment strategies that significantly affected the Funds’ performance during the last fiscal year. To obtain a free copy of the latest annual or semi-annual report, to request additional information, or to make shareholder inquiries, please visit our website or call (800) 445-9469, option 1.

The Securities and Exchange Commission maintains a website that contains the Funds’ periodic financial reports to shareholders, amendments to its registration statement which include the Prospectus and Statement of Additional Information, and other required filings. An investor may review these materials free of charge by accessing the SEC’s website at http://www.sec.gov.

These materials may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C., or after paying a duplicating fee, by written request to the SEC’s Public Reference Section, Washington D.C., 20549-0102, or electronic request to publicinfo@sec.gov. Please call the SEC at 1-202-942-8090 for more information.

The Securities and Exchange Commission Investment Company Act File Number for the Longleaf Partners Funds is 811-4923.

MANAGED BY:
SOUTHEASTERN ASSET MANAGEMENT, INC.
6410 POPLAR AVE.
SUITE 900
MEMPHIS, TN 38119
www.longleafpartners.com
(800) 445-9469

THIS PAGE IS INTENTIONALLY LEFT BLANK

PART B

INFORMATION REQUIRED IN THE
STATEMENT OF ADDITIONAL INFORMATION

LONGLEAF PARTNERS FUNDS ^®

STATEMENT OF ADDITIONAL INFORMATION

May 1, 2007

LONGLEAF PARTNERS FUND

LONGLEAF PARTNERS SMALL-CAP FUND

LONGLEAF PARTNERS INTERNATIONAL FUND

Series of

LONGLEAF PARTNERS FUNDS TRUST

TABLE OF CONTENTS


• Fund History		1
• Investment Objectives and Policies		1
• Classification of Investment Objectives and Restrictions		2
• Fundamental Investment Restrictions		2
• Non-Fundamental Investment Restrictions		5
• Additional Information About Types of Investments and Investment Techniques		6
	Repurchase Agreements	6
	Warrants	7
	Real Estate Investment Trusts	7
	Futures Contracts	7
	Options on Securities and Stock Indices	8
	Foreign Currency Contracts	9
	Lending of Portfolio Securities	10
	Swaps	10
	Short Sales	10
• Proxy Voting		11
• Portfolio Turnover		11
• Disclosure of Portfolio Holdings		11
• Boards of Trustees		13
• Compensation Table		15
• Ownership of Fund Shares by Trustees		16
• Other Information Concerning the Boards of Trustees		17
• Control Persons and Principal Holders of Securities		17
• Investment Advisory Services		17
• Fund Administration		18
• Additional Information about Portfolio Managers		19
• Other Service Providers		23
• Allocation of Brokerage Commissions		24
• Capital Stock and Indemnification Rights		25
• Purchase, Redemption, and Pricing of Shares		27
• Additional Tax Information		28
• Investment Performance and Total Return		30
• Table of Bond and Preferred Stock Ratings		32
• Financial Statements		34
	Report of Independent Registered Public Accounting Firm	34
• Appendix A — Proxy Voting Policies and Procedures		A-1

Managed by

Southeastern Asset Management, Inc.

6410 Poplar Avenue; Suite 900

Memphis, TN 38119

TELEPHONE (800) 445-9469; www.longleafpartners.com

THIS STATEMENT OF ADDITIONAL INFORMATION, DATED MAY 1, 2007, IS NOT A PROSPECTUS. IT SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS OF LONGLEAF PARTNERS FUNDS TRUST, DATED MAY 1, 2007, WHICH MAY BE OBTAINED WITHOUT CHARGE UPON REQUEST BY CALLING (800) 445-9469.

LONGLEAF PARTNERS FUNDS TRUST

STATEMENT OF ADDITIONAL INFORMATION

LONGLEAF PARTNERS FUND

LONGLEAF PARTNERS SMALL-CAP FUND

LONGLEAF PARTNERS INTERNATIONAL FUND

FUND HISTORY

Organization. Longleaf Partners Funds Trust was organized on November 26, 1986 as a Massachusetts business trust under the name Southeastern Asset Management Value Trust. Its name was changed to Longleaf Partners Funds Trust on August 2, 1994. Its existing series or Funds and the dates of their initial public offerings are as follows:


	Longleaf Partners Fund (known as Southeastern Asset Management Value Trust prior to August 2, 1994) — Initial public offering — April 8, 1987; closed to new investors, effective July 16, 2004.

	Longleaf Partners Small-Cap Fund (known as Southeastern Asset Management Small-Cap Fund prior to August 2, 1994) — Initial public offering — February 21, 1989; closed to new investors, effective July 31, 1997.

	Longleaf Partners International Fund — Initial public offering — October 26, 1998.

Significance of Fund Names. The name “Longleaf,” derived from the longleaf pine, a majestic, sturdy tree indigenous to the southeastern United States, represents the qualities of strength and endurance. A second element of the name is the word “Partners.” In selecting portfolio investments, Southeastern Asset Management, Inc. (“Southeastern”), the Funds’ Investment Counsel, seeks corporate managers who would make exemplary long-term business partners. They should be properly incented, ownership vested, honest, shareholder oriented, operationally competent individuals who are capable of allocating corporate resources intelligently. The Funds endeavor to be supportive long-term “partners” with management of the companies in the portfolios. Correspondingly, Southeastern’s own partners, other personnel, and relatives, are major investors in the Funds. Management considers itself a “partner” with Fund shareholders in seeking long-term capital growth. The Funds desire loyal, long-term investors as shareholders who view themselves as “partners” with Fund management.

INVESTMENT OBJECTIVES AND POLICIES

Longleaf Partners Funds Trust is an open-end, management investment company with three series or Funds. Each series is operated as a separate mutual fund with its own particular investment objective. The investment objectives and general investment policies of each Fund are as follows:

Longleaf Partners Fund

Investment Objective — Long-term capital growth.

Investment Policy — Invests primarily in equity securities of mid and large-cap companies.

Longleaf Partners Small-Cap Fund

Investment Objective — Long-term capital growth.

Investment Policy — The Small-Cap Fund normally invests at least 80% of net assets plus any borrowings for investment purposes in the equity securities, including convertible securities, of a limited number of companies whose market capitalizations at the time of purchase are considered small cap.

Longleaf Partners International Fund

Investment Objective — Long-term capital growth through investment primarily in equity securities of international or foreign issuers.

Investment Policy — Invests at least 65% of total assets in the equity securities of international or foreign issuers domiciled or operating primarily in at least three countries other than the United States.

CLASSIFICATION OF INVESTMENT OBJECTIVES AND RESTRICTIONS

The Funds have adopted certain investment objectives and restrictions as “fundamental.” Those investment objectives and restrictions cannot be changed without approval of a majority of the outstanding voting securities. Under the Investment Company Act of 1940, “approval of a majority of the outstanding voting securities” means the affirmative vote of the lesser of (1) more than 50% of the outstanding shares of the particular Fund or (2) 67% or more of the shares present at a shareholders’ meeting if more than 50% of the outstanding shares are represented at the meeting in person or by proxy.

The investment objectives of the Partners and Small-Cap Funds are fundamental. The investment objective of the International Fund is non-fundamental. The investment policies of all of the Funds, shown in the prior section, are not fundamental. In addition, as described in more detail in the following sections, certain investment restrictions are not fundamental. Non-fundamental investment objectives, policies, and restrictions may be changed by the respective Boards of Trustees without shareholder approval.

FUNDAMENTAL INVESTMENT RESTRICTIONS

Non-Diversification. The Funds are all classified as “non-diversified” under the federal securities laws. As a result, there are no diversification requirements under the Investment Company Act of 1940 or any other securities laws.

Internal Revenue Code Diversification Standards. The Partners Fund and the Small-Cap Fund have adopted as fundamental policy the diversification standards of the Internal Revenue Code which apply to regulated investment companies. The International Fund expects to apply these diversification standards but has not adopted them as fundamental policy.

Under the diversification standards of the Internal Revenue Code, a mutual fund has two “baskets” or groups of holdings — a diversified basket, which must comprise at least 50% of its total assets and a non-

diversified basket, which includes the remainder of its assets. Within the diversified basket, consisting of at least 50% of a Fund’s total assets, a Fund may not purchase more than 10% of the outstanding voting securities of any one issuer or invest more than 5% of the value of its total assets in the securities of any one issuer, except for securities issued by the U.S. Government, and its agencies or instrumentalities. With respect to the remainder of its assets, a Fund may not invest more than 25% of the value of its total assets in the securities of any one issuer (other than U.S. Government securities or the securities of other registered investment companies), or invest more than 25 percent of the value of its total assets in the securities of two or more issuers which the Fund controls (as defined by the Internal Revenue Code) and which are engaged in the same or similar trades or businesses or related trades or businesses.

Industry Concentration. The Partners Fund and Small-Cap Fund may not invest 25% or more of the value of their total assets in securities of issuers in any one industry. This restriction does not apply to obligations issued or guaranteed by the United States Government and its agencies or instrumentalities or to cash equivalents. Corporate commercial paper will not be used to concentrate investments in a single industry.

For purposes of defining what constitutes a single industry for purposes of the restriction applying to these Funds, each Fund will use the definitions for industries as set forth in the latest edition of the North American Industry Classification System (“NAICS”) or other publicly available information. Industry category groupings shown in the Funds’ printed financial reports sent to shareholders may contain more than one Industry Code, and these broader industry groupings are intended to be functionally descriptive presentations rather than being limited to a single NAICS industry category.

Other Investment Restrictions. The Funds have adopted other investment restrictions designated as fundamental, which cannot be changed without shareholder approval. The fundamental investment restrictions of the Partners and Small-Cap Funds are identical; the fundamental restrictions of the International Fund, formed in 1998, are phrased differently, and its fundamental restrictions are shown separately.

FUNDAMENTAL INVESTMENT RESTRICTIONS FOR PARTNERS AND

SMALL-CAP FUNDS

Except as specifically authorized, the Partners Fund and the Small-Cap Fund each may not:


•	Borrow money, except that it may borrow from banks to increase its holdings of portfolio securities in an amount not to exceed 30% of the value of its total assets and may borrow for temporary or emergency purposes from banks and entities other than banks in an amount not to exceed 5% of the value of its total assets; provided that aggregate borrowing at any time may not exceed 30% of the Fund’s total assets less all liabilities and indebtedness not represented by senior securities.

•	Issue any senior securities, except that collateral arrangements with respect to transactions such as forward contracts, futures contracts, short sales or options, including deposits of initial and variation margin, shall not be considered to be the issuance of a senior security for purposes of this restriction;

•	Act as an underwriter of securities issued by other persons, except insofar as the Fund may be deemed an underwriter in connection with the disposition of securities;

•	Purchase or sell real estate, except that the Fund may invest in securities of companies that deal in real estate or are engaged in the real estate business, including real estate investment trusts, and securities

secured by real estate or interests therein and the Fund may hold and sell real estate acquired through default, liquidation, or other distributions of an interest in real estate as a result of the Fund’s ownership of such securities;

• Purchase or sell commodities or commodity futures contracts, except that the Fund may invest in financial futures contracts, options thereon and similar instruments;

• Make loans to other persons except through the lending of securities held by it (but not to exceed a value of one-third of total assets), through the use of repurchase agreements, and by the purchase of debt securities, all in accordance with its investment policies.

FUNDAMENTAL INVESTMENT RESTRICTIONS FOR THE INTERNATIONAL FUND

The International Fund has adopted the following investment restrictions as fundamental. The text of the fundamental restriction is set forth in bold type; any comments following these fundamental restrictions are explanatory only and are not fundamental.


•	Industry Concentration. The Fund will not purchase any security which would cause the Fund to concentrate its investments in the securities of issuers primarily engaged in any one industry except as permitted by the Securities and Exchange Commission.

	Comment. The present position of the staff of the Division of Investment Management of the Securities and Exchange Commission is that a mutual fund will be deemed to have concentrated its investments in a particular industry if it invests 25% or more of its total assets in securities of companies in any single industry. This restriction does not apply to obligations issued or guaranteed by the United States Government and its agencies or instrumentalities or to cash equivalents. The Fund will comply with this position but will be able to use a different percentage of assets without seeking shareholder approval if the SEC should subsequently allow investment of a larger percentage of assets in a single industry. Such a change will not be made without providing prior notice to shareholders.

•	Senior Securities. The Fund may not issue senior securities, except as permitted under the Investment Company Act of 1940 or any rule, order or interpretation under the Act.

	Comment. Generally, a senior security is an obligation of a Fund which takes precedence over the claims of fund shareholders. The Investment Company Act generally prohibits a fund from issuing senior securities, with limited exceptions. Under SEC staff interpretations, funds may incur certain obligations (for example, to deliver a foreign currency at a future date under a forward foreign currency contract) which otherwise might be deemed to create a senior security, provided the fund maintains a segregated account containing liquid securities having a value at least equal to the future obligations.

•	*Borrowing.* The Fund may not borrow money, except as permitted by applicable law.

	Comment. In general, a fund may not borrow money, except that (i) a fund may borrow from banks (as defined in the Investment Company Act) in amounts up to 33 ¹ / 3 % of its total assets (including the amount borrowed) less liabilities (other than borrowings), (ii) a fund may borrow up to 5% of its total assets for temporary or emergency purposes, (iii) a fund may obtain such short-term credit as may be necessary for the clearance of purchases and sales of portfolio securities, and (iv) a fund may not pledge its assets other than to secure such borrowings or, to the extent permitted by the Fund’s investment policies as set forth in its current prospectus and statement of additional information, in connection with hedging transactions, short sales, when-issued and forward commitment transactions and similar investment strategies.


•	*Underwriting.* The Fund may not act as an underwriter of securities issued by others, except insofar as the Fund may be deemed an underwriter in connection with the disposition of portfolio securities.

	Comment. Generally, a mutual fund may not be an underwriter of securities issued by others. However, an exception to this restriction enables the Fund to sell securities held in its portfolio, usually securities which were acquired in unregistered or “restricted” form, even though it otherwise might technically be classified as an underwriter under the federal securities laws in making such sales.

•	*Commodities.* The Fund may not purchase or sell commodities or commodity contracts unless acquired as a result of ownership of securities or other instruments issued by persons that purchase or sell commodities or commodities contracts, but this restriction shall not prevent the Fund from purchasing, selling and entering into financial futures contracts (including futures contracts on indices of securities, interest rates and currencies), options on financial futures contracts, warrants, swaps, forward contracts, foreign currency spot and forward contracts, or other derivative instruments that are not related to physical commodities.

	Comment. The Fund has the ability to purchase and sell (write) put and call options and to enter into futures contracts and options on futures contracts for hedging and risk management and for other non-hedging purposes. Examples of non-hedging risk management strategies include increasing a Fund’s exposure to the equity markets of particular countries by purchasing futures contracts on the stock indices of those countries and effectively increasing the duration of a bond portfolio by purchasing futures contracts on fixed income securities. Hedging and risk management techniques, unlike other non-hedging derivative strategies, are not intended to be speculative but, like all leveraged transactions, involve the possibility of gains as well as losses that could be greater than the purchase and sale of the underlying securities.

•	*Lending.* The Fund may not make loans to other persons except through the lending of securities held by it as permitted by applicable law, through the use of repurchase agreements, and by the purchase of debt securities, all in accordance with its investment policies.

•	*Real Estate.* The Fund may not purchase or sell real estate, except that the Fund may invest in securities of companies that deal in real estate or are engaged in the real estate business, including real estate investment trusts, and securities secured by real estate or interests therein and the Fund may hold and sell real estate acquired through default, liquidation, or other distributions of an interest in real estate as a result of the Fund’s ownership of such securities.

NON-FUNDAMENTAL INVESTMENT RESTRICTIONS

All of the funds have also adopted the following non-fundamental investment restrictions which may be changed in the discretion of the Board of Trustees, without prior shareholder approval. Except as specifically authorized, the Funds may not:


•	Purchase restricted (non-registered) or “illiquid” securities, including repurchase agreements maturing in more than seven days, if as a result, more than 15% of the Fund’s net assets would then be invested in such securities (excluding securities which are eligible for resale pursuant to Rule 144A under the Securities Act of 1933).

•	Acquire or retain securities of any investment company, except that the Fund may (a) acquire securities of investment companies up to the limits permitted by Sec. 12(d)(l) of the Investment Company Act of

1940 (for each holding, 5% of the Fund’s total assets, 3% of the company’s voting stock, with not more than 10% of the Fund’s total assets invested in all such investment companies) provided such acquisitions are made in the open market and there is no commission or profit to a dealer or sponsor other than the customary broker’s commission, and (b) may acquire securities of any investment company as part of a merger, consolidation or similar transaction.

• Make short sales of equity portfolio securities whereby the dollar amount of short sales at any one time would exceed 25% of the net assets of the Fund, and the value of securities of any one issuer in which the Fund is short would exceed, at the time an order is placed, the lesser of 5% of the value of the Fund’s net assets or 5% of the securities of any class of any issuer; provided that the Fund maintains collateral in a segregated account consisting of cash or liquid securities with a value equal to the current market value of the shorted securities, which is marked to market daily. If the Fund owns an equal amount of such securities or securities convertible into or exchangeable for, without payment of any further consideration, securities of the same issuer as, and equal in amount to, the securities sold short (which sales are commonly referred to as “short sales against the box”), such restrictions shall not apply.

• Invest in puts, calls, straddles, spreads or any combination thereof, except that the Fund may (a) purchase and sell put and call options on securities and securities indexes, and (b) write covered put and call options on securities and securities indexes and combinations thereof; provided that the securities underlying such options are within the investment policies of the Fund and the value of the underlying securities on which options may be written at any one time does not exceed 25% of total assets.

• Invest in oil, gas or other mineral exploration programs, development programs or leases, except that the Fund may purchase securities of companies engaging in whole or in part in such activities.

• Pledge, mortgage or hypothecate its assets except in connection with borrowings which are otherwise permissible.

• Purchase securities on margin, except short-term credits as are necessary for the purchase and sale of securities, provided that the deposit or payment of initial or variation margin in connection with futures contracts or related options will not be deemed to be a purchase on margin.

ADDITIONAL INFORMATION ABOUT TYPES OF INVESTMENTS

AND INVESTMENT TECHNIQUES

Repurchase Agreements. An acceptable investment for cash reserves, a repurchase agreement is an instrument under which a Fund purchases securities issued by the U.S. Government or its agencies or other securities from a vendor or counterparty with an agreement by the counterparty to repurchase the security at the same price, plus interest, at a specified rate. The security is held by the Fund as collateral for the repurchase obligation. Repurchase agreements for Treasury securities may be entered into 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 or agency securities. Repurchase agreements usually have a short duration, often less than one week. In entering into the repurchase agreement for the Fund, Southeastern Asset Management, Inc. (“Southeastern”) as Investment Counsel will evaluate and monitor the credit worthiness of the counterparty. In the event that a counterparty should default on its repurchase obligation, the Fund might suffer a loss to the extent that the proceeds from the sale of the collateral were less than the repurchase price. If the counterparty becomes bankrupt, the Fund might be delayed, or may incur costs or possible losses of principal and income, in selling the collateral.

Warrants. Each of the Funds may invest in warrants for the purchase of equity securities at a specific price for a stated period of time. Warrants may be considered more speculative than other types of investments in that they do not entitle a holder to dividends or voting rights for the securities which may be purchased nor do they represent any rights in the assets of the issuing company. The value of a warrant does not necessarily change with the value of the underlying securities and a warrant ceases to have value if it is not exercised prior to the expiration date.

Real Estate Investment Trusts. REITs are sometimes described as equity REITs, mortgage REITs and hybrid REITs. An equity REIT invests primarily in the fee ownership or leasehold ownership of land and buildings and derives its income primarily from rental income. An equity REIT may also realize capital gains (or losses) by selling real estate properties in its portfolio that have appreciated (or depreciated) in value. A mortgage REIT invests primarily in mortgages on real estate, which may secure construction, development or long-term loans. A mortgage REIT generally derives its income primarily from interest payments on the credit it has extended. A hybrid REIT combines the characteristics of equity REITs and mortgage REITs, generally by holding both ownership interests and mortgage interests in real estate.

Equity REITs may be further characterized as operating companies or financing companies. To the extent that an equity REIT provides operational and management expertise to the properties held in its portfolio, the REIT generally exercises some degree of control over the number and identity of tenants, the terms of their tenancies, the acquisition, construction, repair and maintenance of properties and other operational issues. A mortgage REIT or an equity REIT that provides financing rather than operational and management expertise to the properties in its portfolio will generally not have control over the operations that are conducted on the real estate in which the REIT has an interest.

Futures Contracts. Primarily for hedging purposes, the Funds may purchase and sell financial futures contracts. Although some financial futures contracts call for making or taking delivery of the underlying securities, in most cases these obligations are closed out before the settlement date. The closing of a contractual obligation is accomplished by purchasing or selling an identical offsetting futures contract. Other financial futures contracts by their terms call for cash settlements.

The Funds may also buy and sell index futures contracts with respect to any stock or bond index traded on a recognized stock exchange or board of trade. An index futures contract is a contract to buy or sell units of an index at a specified future date at a price agreed upon when the contract is made. The stock index futures contract specifies that no delivery of the actual stocks making up the index will take place. Instead, settlement in cash must occur upon the termination of the contract, with the settlement being the difference between the contract price and the actual level of the stock index at the expiration of the contract.

At the time one of the Funds purchases a futures contract, an amount of cash, U.S. Government securities, or other liquid securities equal to the market value of the futures contract will be deposited in a segregated account with the Fund’s Custodian. When writing a futures contract, the Fund will maintain with the Custodian similar liquid assets that, when added to the amounts deposited with a futures commission merchant or broker as margin, are equal to the market value of the instruments underlying the contract. Alternatively, the Fund may “cover” the position by owning the instruments underlying the contract (or, in the case of an index futures contract, a portfolio with a volatility substantially similar to that of the index on which the futures contract is based), or holding a call option permitting the Fund to purchase the same futures contract at a price no higher than the price of the contract written by the Fund (or at a higher price if the difference is maintained in liquid assets with the Custodian).

Options on Securities and Stock Indices. The Funds may write covered put and call options and purchase put and call options on securities or stock indices. An option on a security is a contract that gives the purchaser of the option, in return for the premium paid, the right to buy a specified security (in the case of a call option) or to sell a specified security (in the case of a put option) from or to the writer of the option at a designated price during the term of the option. An option on a securities index gives the purchaser of the option, in return for the premium paid, the right to receive from the seller cash equal to the difference between the closing price of the index and the exercise price of the option.

The Funds may write a call or put option only if the option is “covered.” A call option on a security written by one of the Funds is covered if the Fund owns the underlying security subject to the call, has an absolute and immediate right to acquire that security without additional cash consideration (or for additional cash consideration held in a segregated account by its Custodian) upon conversion or exchange of other securities held in its portfolio, or the call is otherwise covered with assets held in a segregated account. A call option on a security is also covered if the Fund holds a call on the same security and in the same principal amount as the call written where the exercise price of the call held (a) is equal to or less than the exercise price of the call written or (b) is greater than the exercise price of the call written if the difference is maintained by the Fund in cash, liquid securities or money market instruments in a segregated account with its Custodian. A put option on a security written by the Fund is covered if the Fund maintains similar liquid assets with a value equal to the exercise price in a segregated account with its Custodian, or holds a put on the same security and in the same principal amount as the put written where the exercise price of the put held is equal to or greater than the exercise price of the put written.

A Fund may cover call options on stock indices through a segregated account or by owning securities whose price changes, in the opinion of Southeastern, are expected to be similar to those of the index, or in such other manner as may be in accordance with the rules of the exchange on which the option is traded and applicable laws and regulations. Nevertheless, where a Fund covers a call option on a stock index through ownership of securities, such securities may not match the composition of the index. In that event, the Fund will not be fully covered and could be subject to risk of loss in the event of adverse changes in the value of the index. A Fund may cover put options on stock indices by segregating assets equal to the option’s exercise price, or in such other manner as may be in accordance with the rules of the exchange on which the option is traded and applicable laws and regulations.

A Fund will receive a premium from writing a put or call option, which increases its gross income in the event the option expires unexercised or is closed out at a profit. If the value of a security or an index on which a Fund has written a call option falls or remains the same, the Fund will realize a profit in the form of the premium received (less transaction costs) that could offset all or a portion of any decline in the value of the portfolio securities being hedged. If the value of the underlying security or index rises, however, the Fund will realize a loss in its call option position, which will reduce the benefit of any unrealized appreciation in the Fund’s stock investments. By writing a put option, the Fund assumes the risk of a decline in the underlying security or index. To the extent that the price changes of the portfolio securities being hedged correlate with changes in the value of the underlying security or index, writing covered put options on securities or indices will increase the Fund’s losses in the event of a market decline, although such losses will be offset in part by the premium received for writing the option.

A Fund may also purchase put options to hedge its investments against a decline in value. By purchasing a put option, the Fund will seek to offset a decline in the value of the portfolio securities being hedged through appreciation of the put option. If the value of the Fund’s investments does not decline as anticipated, or if the value of the option does not increase, the Fund’s loss will be limited to the premium paid for the option

plus related transaction costs. The success of this strategy will depend, in part, on the accuracy of the correlation between the changes in value of the underlying security or index and the changes in value of the Fund’s security holdings being hedged.

A Fund may purchase call options on individual securities to hedge against an increase in the price of securities that the Fund anticipates purchasing in the future. Similarly, a Fund may purchase call options to attempt to reduce the risk of missing a broad market advance, or an advance in an industry or market segment, at a time when the Fund holds uninvested cash or short-term debt securities awaiting investment. When purchasing call options, the Fund will bear the risk of losing all or a portion of the premium paid if the value of the underlying security or index does not rise.

There can be no assurance that a liquid market will exist when a Fund seeks to close out an option position. Trading could be interrupted, for example, because of supply and demand imbalances arising from a lack of either buyers or sellers, or the options exchange could suspend trading after the price has risen or fallen more than the maximum specified by the exchange. Although the Fund may be able to offset to some extent any adverse effects of being unable to liquidate an option position, it may experience losses in some cases as a result of such inability.

Foreign Currency Contracts. As a method of hedging against foreign currency exchange rate risks, the Funds may enter into forward foreign currency exchange contracts and foreign currency futures contracts, as well as purchase put or call options on foreign currencies, as described below. The Funds may also conduct foreign currency exchange transactions on a spot ( i.e. , cash) basis at the spot rate prevailing in the foreign currency exchange market.

As part of the investment decision process, a Fund may enter into forward foreign currency exchange contracts (“forward contracts”) to seek to minimize the exposure from a change in the relationship between the U.S. dollar and foreign currencies. A forward contract is an obligation to purchase or sell a specific currency for an agreed price at a future date which is individually negotiated and privately traded by currency traders and their customers. A Fund may enter into a forward contract, for example, when it enters into a contract for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of the security. The Funds will segregate cash, cash equivalents or liquid securities sufficient to cover any commitments under these contracts. The segregated account will be marked-to-market daily. Each Fund may seek to hedge the foreign currency exposure risk to the full extent of its investment in foreign securities, but there is no requirement that all foreign securities be hedged against foreign currency exposure. Forward contracts may reduce the potential gain from a positive change in the relationship between the U.S. dollar and foreign currencies or, considered separately, may produce a loss.

A Fund may purchase and write put and call options on foreign currencies for the purpose of protecting against declines in the dollar value of foreign portfolio securities and against increases in the dollar cost of foreign securities to be acquired. As with other kinds of options, however, the writing of an option on foreign currency will constitute only a partial hedge, up to the amount of the premium received, and the Fund could be required to purchase or sell foreign currencies at disadvantageous exchange rates, thereby incurring losses. The purchase of an option on foreign currency may constitute an effective hedge against fluctuation in exchange rates although, in the event of rate movements adverse to the Fund’s position, the Fund may forfeit the entire amount of the premium plus related transaction costs.

A Fund may enter into exchange-traded contracts for the purchase or sale for future delivery of foreign currencies (“foreign currency futures”). This investment technique may be used to hedge against anticipated future changes in exchange rates which otherwise might adversely affect the value of the

particular Fund’s portfolio securities or adversely affect the prices of securities that the Fund intends to purchase at a later date. The successful use of currency futures will usually depend on the Investment Counsel’s ability to forecast currency exchange rate movements correctly. Should exchange rates move in an unexpected manner, the Fund may not achieve the anticipated benefits of foreign currency futures or may realize losses.

Lending of Portfolio Securities. The Funds may from time to time lend portfolio securities to brokers or dealers, banks and other institutional investors and receive collateral in the form of United States Government obligations or money market funds. Under current practices, the loan collateral must be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities, and will not be used to leverage the portfolio. In determining whether to lend securities to a particular broker/dealer or financial institution, Southeastern will consider all relevant facts and circumstances, including the credit-worthiness of the broker or financial institution. If the borrower should fail to return the loaned securities, the particular Fund could use the collateral to acquire replacement securities, but could be deprived of immediate access to such assets for the period prior to such replacement. The Funds may pay reasonable fees in connection with such a loan of securities. The Funds will not lend portfolio securities in excess of one-third of the value of total assets, nor will the Funds lend portfolio securities to any officer, director, trustee, employee of affiliate of the Funds or Southeastern.

Swaps. The Funds may enter into swaps involving interests in securities, indexes, currencies, and other market factors in amounts deemed appropriate by the Funds’ Trustees. A swap is an agreement to exchange streams of payments computed by reference to a notional amount based on the performance of a single security or a basket of securities. Index swaps involve the exchange by a Fund with another party of the respective amounts payable with respect to a notional principal amount related to one or more indices. Currency swaps involve the exchange of cash flows on a notional amount of two or more currencies based on their relative future values.

The Funds may enter into these transactions to preserve a return or spread on a particular investment or portion of its assets, to protect against currency fluctuations or volatility in other market factors, as a duration management technique, or to protect against any increase in the price of securities a Fund anticipates purchasing at a later date. These transactions may also be used to obtain the price performance of a security without actually purchasing the security in circumstances where, for example, the subject security is illiquid, is unavailable for direct investment or is available only on less attractive terms.

Swaps have risks associated with them, including possible default by the counterparty to the transaction, illiquidity and, where used for hedges, the risk that the use of a swap could result in losses greater than if the swap had not been employed.

Short Sales. The Funds may seek to realize additional gains through short sale transactions in securities listed on one or more national securities exchanges, or in unlisted securities. Short selling involves the sale of borrowed securities. At the time a short sale is effected, a Fund incurs an obligation to replace the security borrowed at whatever its price may be at the time the Fund purchases it for delivery to the lender. When a short sale transaction is closed out by delivery of the securities, any gain or loss on the transaction is taxable as short term capital gain or loss.

Since short selling can result in profits when stock prices generally decline, the Funds can, to a certain extent, hedge the market risk to the value of its other investments and protect its equity in a declining market. When a portfolio company has a subsidiary which is partially publicly held, a short sale of the subsidiary’s shares can be used as a partial hedge to protect the value of the portfolio holding. However, the

Funds could, at any given time, suffer both a loss on the purchase or retention of one security, if that security should decline in value, and a loss on a short sale of another security, if the security sold short should increase in value. When a short position is closed out, it may result in a short term capital gain or loss for federal income tax purposes. To the extent that in a generally rising market a Fund maintains short positions in securities rising with the market, the net asset value of the Fund would be expected to increase to a lesser extent than the net asset value of an investment company that does not engage in short sales.

PROXY VOTING

The Boards of Trustees have authorized Southeastern as the Funds’ investment manager to vote proxies relating to the Funds’ portfolio securities in accord with the Proxy Voting Policies and Procedures attached as Appendix A. Also the Funds make available information regarding how the Funds voted proxies for the most recent 12-month period ended June 30. The Funds make this information available on Form N-PX without charge by phone (1-800-445-9469, option 1), on the Funds’ website, and on the SEC’s website, www.sec.gov .

PORTFOLIO TURNOVER

The portfolio turnover rate is calculated by dividing the lesser of purchases or sales of a Fund’s portfolio securities for the year by the monthly average value of the portfolio securities. Securities with remaining maturities of one year or less at the date of acquisition are excluded from the calculation.

Portfolio turnover cannot be accurately predicted. The Funds’ investment philosophy contemplates holding portfolio securities for the long term, and portfolio turnover usually should be less than 50%. Portfolio turnover rates in excess of 50% (or material increases from one year to the next) generally occur because companies in the portfolio are acquired by other companies or reach their appraised or intrinsic value during the year and are sold. The proceeds of these sales may then be applied to purchase new positions having a lower price to value ratio. There are no specific limits on portfolio turnover, and investments will be sold without regard to the length of time held when investment considerations support such action. Increases in turnover will generally involve greater transaction costs.

The portfolio turnover rates of the Funds for the past three years are as follows:


	2006		2005		2004

Partners Fund		18.98%		6.64%		13.38%
Small-Cap Fund		34.45%		17.28%		31.04%
International Fund		24.30%		16.93%		18.86%

DISCLOSURE OF PORTFOLIO HOLDINGS

Disclosure of Portfolio Holdings. The portfolio holdings of the Funds are proprietary information and Southeastern’s Code of Ethics prohibits selective disclosure of portfolio holdings which have not been made public. Southeastern has adopted procedures designed to ensure that holdings are not released on a selective basis and to limit disclosure of the Funds’ holdings to routine regulatory filings and/or to service providers in the ordinary course of business as required to process transactions. The Funds’ Boards of Trustees have approved these procedures, and any material compliance matters arising under these procedures would be reported to the Boards by the Funds’ Chief Compliance Officer, who oversees their implementation.

Information regarding portfolio holdings of the Longleaf Partners Funds may be disclosed to outside parties in a number of situations, including: 1) disclosure to the Funds’ custodian, State Street Bank and Trust, but only in connection with processing and/or reconciling transactions for the Funds; 2) disclosure to ISS, the Funds’ proxy voting agent, but only in connection with voting proxies for the Funds; 3) disclosure to brokers selected and/or considered by Southeastern’s trading department to execute transactions, but only in connection with the trading process, and the settlement and processing of transactions; 4) disclosure in connection with required U.S. and foreign regulatory filings; 5) disclosure to accounting firms, law firms, or other professionals subject to a duty of confidentiality, and a duty not to trade on the non-public information; 6) information related to portfolio holdings may also be authorized for disclosure by the Funds’ Chief Compliance Officer only if permitted by law and if such disclosure is consistent with Southeastern’s fiduciary duty to Fund shareholders. Southeastern investment research (excluding portfolio holdings) may be shared by the analyst conducting that research as part of the investment due diligence process. Southeastern investment research may also be shared by Southeastern with existing and potential investors regarding holdings that have been publicly disclosed. In addition, Southeastern may provide other information to existing and potential investors and intermediaries working on behalf of such investors. Such information may consist of analytical information concerning a Fund’s portfolio as a whole, without naming specific holdings.

The Funds’ complete portfolio holdings are generally published with up to a 60 day lag following each fiscal quarter in the Funds’ quarterly reports sent to shareholders and posted on the Funds’ website. These holdings are also included in reports filed with the SEC on Form N-CSR or Form N-Q. The Funds’ top ten holdings as of the end of each fiscal quarter are also published on the Funds’ website, generally with up to a 30 day lag. Once a portfolio holding has been publicly disclosed in an approved regulatory filing, or on the Funds’ website, it is no longer subject to confidential treatment.

BOARDS OF TRUSTEES

Each of the Funds is operated by its Board of Trustees, which implements policies and Fund operations through officers or employees of Southeastern Asset Management, Inc. (“Southeastern”). Day to day portfolio management and fund administration are provided by Southeastern in its capacity as Investment Counsel and as Fund Administrator under contracts which must be renewed annually, as required by the Investment Company Act of 1940.


			Length of Service
Name, Age			as Trustee
And Address	Positions Held With Funds		(Year Began)

Affiliated or Interested Trustees*

O. Mason Hawkins, CFA, (58) 6410 Poplar Ave., Suite 900 Memphis, TN 38119	Trustee; Co-Portfolio Manager		Partners Fund Small-Cap Fund International Fund	1987 1989 1998

Margaret H. Child (51) 137 Marlborough St., #3 Boston, MA 02116		Trustee	Partners Fund Small-Cap Fund International Fund	2001 2001 2001

Independent or Non-Interested Trustees

Chadwick H. Carpenter, Jr. (56) 6410 Poplar Ave., Suite 900 Memphis, TN 38119		Trustee	Partners Fund Small-Cap International Fund	1993 1993 1998

Daniel W. Connell, Jr. (58) 9009 Regency Square Blvd. Jacksonville, FL 32202		Trustee	Partners Fund Small-Cap Fund International Fund	1997 1997 1998

Rex M. Deloach (69) 154 County Road 231 Oxford, MS 38655		Trustee	Partners Fund Small-Cap Fund International Fund	2003 2003 2003

Steven N. Melnyk (59) 1535 The Greens Way Jacksonville Beach FL 32250		Trustee	Partners Fund Small-Cap Fund International Fund	1991 1991 1998

C. Barham Ray (60) 6410 Poplar Ave., Suite 900 Memphis, TN 38119		Trustee	Partners Fund Small-Cap Fund International Fund	1992 1992 1998

Perry C. Steger (45) 1978 South Austin Avenue Georgetown, TX 78626	Chairman of the Board		Partners Fund Small-Cap Fund International Fund	2001 2001 2001

* Mr. Hawkins is a director and officer of Southeastern Asset Management, Inc. and as such is classified as an “interested” Trustee. Ms. Child is not affiliated with Southeastern, but performs certain administration and operational functions for the Funds in Massachusetts, their state of organization, and could be deemed to be an “interested” Trustee.

The membership of each Board of Trustees is the same. There is no stated term of service, and Trustees continue to serve after election until resignation. All Trustees presently serving except for Rex M. Deloach were elected or re-elected at a meeting of shareholders held on September 19, 2001 in Boston, Massachusetts.


	Number of
Principal Occupations	Portfolios	Other
During Past 5 Years	Overseen	Directorships

Affiliated or Interested Trustees*

Chairman of the Board and Chief Executive Officer, Southeastern Asset Management, Inc.	3

Marketing Consultant since 2005; Chief Marketing Officer, Bingham McCutchen, LLP (1999-2004) (an international law firm); Director of Marketing, Arthur Andersen LLP (accounting firm) Memphis office (1991-98), Atlanta office (1998-99).	3

Independent or Non-Interested Trustees

Private Investor and Consultant since 1998; Senior Executive Officer, Progress Software Corp. (1983-98)	3

Private Investor since 2006; President and CEO, Twilight Ventures, LLC (investment holding company) 2005-2006; Senior Vice President- Marketing, Jacksonville Jaguars (NFL franchise) (1994-2004)	3

President, Financial Insights, Inc. (financial consulting and litigation support) since 2002; Vice President, The Oxford Company (private land and timber investments) since 1994.	3

Real Estate Development, The Sea Island Company, since 2005; Private Investor and Consultant since 1997; Golf Commentator, ABC Sports since 1991; President, Riverside Golf Group, Inc. (since 1989)	3	Director, First Coast Community Bank Fernandina Beach, FL

Partner, SSM Corp. (venture capital firm) since 1974.	3

President, Steger and Bizzell Engineering, Inc. since 2003; Director of Product Strategy, National Instruments, Inc. (1996-2003)	3

2006 COMPENSATION TABLE

The following table provides information on fees paid to each Trustee for Board service during 2006:


	Aggregate Compensation from Each Fund
							Total
	Partners		Small-Cap		International		Compensation From
Name	Fund		Fund		Fund		All Funds ⁽²⁾⁽³⁾

O. Mason Hawkins*		None		None		None		None

Margaret H. Child* ⁽¹⁾	$	40,000	$	20,000	$	20,000	$	80,000

Chadwick H. Carpenter, Jr.		40,000		20,000		20,000		80,000

Daniel W. Connell, Jr.		40,000		20,000		20,000		80,000

Rex M. Deloach		40,000		20,000		20,000		80,000

Steven N. Melnyk		40,000		20,000		20,000		80,000

C. Barham Ray		40,000		20,000		20,000		80,000

Perry C. Steger		40,000		20,000		20,000		80,000

* Interested Trustee


⁽¹⁾	Ms. Child is classified as an “interested” Trustee because she performs certain operational and administrative functions for the Funds in Massachusetts, their state of organization. She is not employed by Southeastern Asset Management, Inc. and accordingly receives no compensation from Southeastern.

⁽²⁾	The Funds have no pension or retirement plan for Trustees.

⁽³⁾	The Funds also reimburse the outside Trustees for lodging and travel expenses incurred in attending Board meetings.

OWNERSHIP OF FUND SHARES BY TRUSTEES

The following table provides information on the range of ownership of Fund shares at December 31, 2006 by individual members of the Funds’ Boards of Trustees.


		Aggregate Dollar Range of
		Equity Securities in All
		Registered Investment
		Companies Overseen by Trustee
	Dollar Range of Equity	in Family of Investment
Name of Director	Securities in Each Fund	Companies

Affiliated or Interested Trustees

O. Mason Hawkins, CFA	Partners Fund – Over $100,000 Small-Cap Fund – Over $100,000 International Fund – Over $100,000	Over $100,000

Margaret H. Child	Partners Fund – Over $100,000 Small-Cap Fund – Over $100,000 International Fund – Over $100,000	Over $100,000

Independent or Non-Interested Trustees

Chadwick H. Carpenter, Jr.	Partners Fund – Over $100,000 Small-Cap – Over $100,000 International Fund – Over $100,000	Over $100,000

Daniel W. Connell, Jr.	Partners Fund – Over $100,000 Small-Cap Fund – Over $100,000 International Fund – Over $100,000	Over $100,000

Rex M. Deloach	Partners Fund – Over $100,000 Small-Cap Fund – $50,000–$100,000 International Fund – Over $100,000	Over $100,000

Steven N. Melnyk	Partners Fund – Over $100,000 Small-Cap Fund – $50,000–$100,000 International Fund – $50,000–$100,000	Over $100,000

C. Barham Ray	Partners Fund – Over $100,000 Small-Cap Fund – Over $100,000 International Fund – Over $100,000	Over $100,000

Perry C. Steger	Partners Fund – Over $100,000 Small-Cap Fund – Over $100,000 International Fund – Over $100,000	Over $100,000

OTHER INFORMATION CONCERNING THE BOARDS OF TRUSTEES

Board Committees. The Board has established an Audit Committee and has adopted a charter. Mr. Deloach serves as Chairman. The Audit Committee, composed of all independent or non “interested” Trustees, reviews the audit plan and results of audits, and monitors the performance of the independent certified public accountants. The Committee met with representatives of the accounting firm on December 8, 2006 and March 6, 2007, regarding the audit for the fiscal year ended December 31, 2006.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

The following table lists those shareholders owning directly or beneficially 5% or more of the outstanding shares of each Fund at March 31, 2007, and also shows the aggregate ownership of Fund and management company personnel, their relatives, and affiliated retirement plans and foundations:


Longleaf Partners Fund
Clients of Charles Schwab & Co., Inc., a brokerage firm	16.2	%
Clients of National Financial Services Corp., a brokerage firm	9.0
All Trustees of the Fund, all directors, officers and employees of Southeastern Asset Management, Inc., and relatives, affiliated retirement plans and foundations	2.3
Longleaf Partners Small-Cap Fund
Clients of Charles Schwab & Co., Inc., a brokerage firm	20.9
Clients of National Financial Services, Corp., a brokerage firm	8.1
All Trustees of the Fund, all directors, officers and employees of Southeastern Asset Management, Inc., and relatives, affiliated retirement plans and foundations	7.4
Longleaf Partners International Fund
Clients of Charles Schwab & Co., Inc., a brokerage firm	13.8
Clients of National Financial Services, Corp., a brokerage firm	7.6
All Trustees of the Fund, all directors, officers and employees of Southeastern Asset Management, Inc., and relatives, affiliated retirement plans and foundations	7.0

INVESTMENT ADVISORY SERVICES

Southeastern Asset Management, Inc. (“Southeastern”), an investment advisor registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940, is the Fund’s Investment Counsel. Southeastern is owned and controlled by its principal officers. Mr. O. Mason Hawkins, Chairman of the Board and Chief Executive Officer of Southeastern, owns a majority of its outstanding voting stock and is deemed to control the company.

Formed in 1975, Southeastern manages institutional and individual assets in private or separate accounts as well as mutual funds, and as of December 31, 2006, was responsible for managing more than $39 billion in client assets. It has served as investment adviser to each of the Longleaf Partners Funds since their respective inception dates. Additional information with respect to the investment advisory function is contained in the Prospectus on pages 19 through 21.

The annual Investment Counsel fee for the Partners Fund and the Small-Cap Fund, calculated daily and paid monthly, is 1% of average daily net assets on the first $400 million and 0.75% of average daily net assets above

$400 million. The annual Investment Counsel fee for the International Fund is 1.5% of average daily net assets on the first $2.5 billion and 1.25% of average daily net assets above $2.5 billion.

All of the Funds have a contractual expense limitation, which is included in the Investment Counsel Agreement and cannot be changed without approval of shareholders. The expense limitation includes the investment advisory and administration fees, all reimbursible expenses, and all normal operating expenses. For the Partners and Small-Cap Funds, the Investment Counsel has agreed to reduce its Investment Counsel fees to the extent that total operating expenses, excluding interest, taxes, brokerage commissions and extraordinary expenses, exceed a maximum of 1.50% of each Fund’s average net assets on an annualized basis. The International Fund has an expense limitation of 1.75% of average net assets per annum, applicable in the same manner to the same types of expenses.

Investment Counsel fees paid by each Fund for the last three fiscal years are as follows:


			2005		2004
	2006
Partners Fund	$	73,343,498	$	67,204,850	$	63,228,202
Small-Cap Fund		24,110,700		20,996,452		19,433,782
International Fund		44,680,393		38,922,078		34,679,191

FUND ADMINISTRATION

Southeastern serves as Fund Administrator under an agreement which is renewable annually, and in that capacity manages or performs all business and administrative operations of each Fund, including the following:


•	Preparation and maintenance of all accounting records;

•	Preparation or supervision of preparation and filing of required financial reports and tax returns;

•	Preparation or supervision of preparation of federal and state securities registrations and reports of sales of shares;

•	Calculation of daily net asset value per share;

•	Preparation and filing of prospectuses, proxy statements, and reports to shareholders;

•	General coordination and liaison among the Investment Counsel, the Custodian, the Transfer Agent, authorized dealers, other outside service providers, and regulatory authorities.

Each Fund pays an Administration Fee equal to 0.10% per annum of the average daily net assets for the services provided by Southeastern, which is accrued daily and paid monthly in arrears. Administration fees paid by each Fund for the last three fiscal years are as follows:


	2006		2005		2004

Partners Fund	$	9,645,800	$	8,827,313	$	8,297,094
Small-Cap Fund		3,081,427		2,666,194		2,457,838
International Fund		3,074,431		2,615,319		2,312,208

All direct operating expenses are paid by that particular Fund. Such expenses include but are not limited to the following: (i) fees of the Custodian and Transfer Agent; (ii) compensation of the independent public accountants, outside legal counsel, and fees and travel expenses of the Trustees who are not officers or employees of Southeastern; (iii) any franchise, income and other taxes relating to the Funds or their securities; (iv) all filing fees and legal expenses incurred in qualifying and continuing the registrations of the

shares for sale with the Securities and Exchange Commission and with any state regulatory agency; (v) insurance premiums and trade association dues; (vi) the costs of typesetting, printing and mailing to shareholders such documents as prospectuses, proxy statements, reports to shareholders, dividend notices and other communications; (vii) expenses of formal meetings of shareholders to vote on Fund or shareholder proposals and meetings of the Boards of Trustees; (viii) external expenses related to pricing the Funds’ portfolio securities; and (ix) any extraordinary expenses such as expenses of litigation. The Funds are also responsible for the expenses of stationery, appropriate forms, envelopes, checks, postage, overnight air courier charges, telephone and data line charges, and printing and mailing expenses for shareholder communications and similar items, and the costs of computer programs or software used solely to process Fund transactions.

Terms of Operating Agreements. Each Fund has entered into agreements with Southeastern as Investment Counsel and separately as Fund Administrator, initially effective for a period of two years. Each agreement must be renewed each year prior to November 1 by the affirmative vote of a majority of the outstanding voting securities of each Fund or by a majority of the members of the Board of Trustees, including a majority of the Trustees who are not “interested” Trustees. Such Agreements will automatically terminate in the event of assignment as defined in the Investment Company Act of 1940. The Funds may terminate such Agreements, without penalty, upon 60 days’ written notice by a majority vote of the Board of Trustees or by a majority of the outstanding voting securities of the particular Fund.

The Funds and Southeastern have adopted a code of ethics under rule 17j-1 of the Investment Company Act. This code requires all Southeastern employees and their spouses to limit their investments in publicly offered equity securities to shares of the Longleaf Partners Funds, unless granted prior clearance.

ADDITIONAL INFORMATION ABOUT PORTFOLIO MANAGERS

Information about portfolio managers for the Longleaf Partners Funds is contained on page 21 of the Prospectus. Set forth below is additional information regarding other accounts managed, portfolio manager compensation, and ownership of Fund securities. Compensation of portfolio managers is paid by Southeastern for services performed for Longleaf, as well as Southeastern’s other clients. Each Longleaf fund pays Southeastern an investment counsel and administration fee, and does not separately compensate portfolio managers.

Other Accounts Managed — O. Mason Hawkins


1.	O. Mason Hawkins, Co-Portfolio Manager, Longleaf Partners Fund, Longleaf Partners Small-Cap Fund, and Longleaf Partners International Fund

2. Other accounts managed:


	a.	Other registered investment companies: 4 accounts, assets = $1,041,116,651


	b.	Other pooled accounts: 18 accounts, assets = $1,676,141,432


	c.	Other accounts: 195 accounts, assets = $19,553,568,050


3.	Under 2(c), 5 accounts have performance fees, assets = $877,626,881

4.	Conflicts of interest could arise in connection with managing the Longleaf Partners Funds side by side with Southeastern’s other clients (the “Other Accounts”). Southeastern’s Other Accounts include

domestic, global, international, small-cap and balanced mandates, and investment opportunities may be appropriate for more than one category of account, as well as more than one of the Longleaf Partners Funds. Because of market conditions and client guidelines, not all investment opportunities will be available to all accounts at all times. Southeastern has developed allocation principles designed to ensure that no account or Fund is systematically given preferential treatment over time, and Southeastern’s compliance personnel, including the CCO-Mutual Funds, routinely monitor allocations for consistency with these principles, as well as any evidence of conflict of interest. Performance fee accounts referenced in #3 above are subject to the same allocation principles and the same compliance review. Regarding the potential conflict of interest presented by performance fee accounts, Southeastern does not view this potential conflict as material, since performance fee accounts were less than 3% of total assets at December 31, 2006. Much more material is the ownership Southeastern’s personnel have in each of the Longleaf Partners Funds (see page 17 of this SAI, as well as the table below). Longleaf’s portfolios are managed under the same allocation principles and compliance reviews as all other accounts. Investors in Longleaf should be aware that the interests of Southeastern’s personnel are aligned with other Longleaf shareholders. Southeastern personnel do not have personal or proprietary trading accounts competing for allocations with the Funds or Other Accounts.

Compensation

Portfolio manager compensation at 12/31/06 included the following:


	•	Competitive salary (comparable to investment firms elsewhere);

	•	Bonus based on contribution to the firm over the year. Contribution includes:


	a.	How investment ideas generated by the manager and his investment team performed both in price and value growth;


	b.	How the Longleaf Funds and other Southeastern accounts performed as measured against inflation plus 10%;


	c.	How the overall firm performed.

Ownership of Fund Securities

Longleaf Partners Fund — Over $1,000,000

Longleaf Partners International Fund — Over $1,000,000

Longleaf Partners Small-Cap Fund — Over $1,000,000

Other Accounts Managed — G. Staley Cates


1.	G. Staley Cates, Co-Portfolio Manager, Longleaf Partners Fund, Longleaf Partners Small-Cap Fund, and Longleaf Partners International Fund

2.	Other accounts managed:


	a.	Other registered investment companies: 4 accounts, assets = $1,041,116,651


	b.	Other pooled accounts: 18 accounts, assets = $1,676,141,432


	c.	Other accounts: 195 accounts, assets = $19,553,568,050


3.	Under 2(c), 5 accounts have performance fees, assets = $877,626,881

4.	Conflicts of interest could arise in connection with managing the Longleaf Partners Funds side by side with Southeastern’s other clients (the “Other Accounts”). Southeastern’s Other Accounts include domestic, global, international, small-cap and balanced mandates, and investment opportunities may be appropriate for more than one category of account, as well as more than one of the Longleaf Partners Funds. Because of market conditions and client guidelines, not all investment opportunities will be available to all accounts at all times. Southeastern has developed allocation principles designed to ensure that no account or Fund is systematically given preferential treatment over time, and Southeastern’s compliance personnel, including the CCO-Mutual Funds, routinely monitor allocations for consistency with these principles, as well as any evidence of conflict of interest. Performance fee accounts referenced in #3 above are subject to the same allocation principles and the same compliance review. Regarding the potential conflict of interest presented by performance fee accounts, Southeastern does not view this potential conflict as material, since performance fee accounts were less than 3% of total assets at December 31, 2006. Much more material is the ownership Southeastern’s personnel have in each of the Longleaf Partners Funds (see page 17 of this SAI, as well as the table below). Longleaf’s portfolios are managed under the same allocation principles and compliance reviews as all other accounts. Investors in Longleaf should be aware that the interests of Southeastern’s personnel are aligned with other Longleaf shareholders. Southeastern personnel do not have personal or proprietary trading accounts competing for allocations with the Funds or Other Accounts.

Compensation

Portfolio manager compensation at 12/31/06 included the following:


	•	Competitive salary (comparable to investment firms elsewhere);

	•	Bonus based on contribution to the firm over the year. Contribution includes:


	a.	How investment ideas generated by the manager performed both in price and value growth;


	b.	How the Longleaf Funds and other Southeastern accounts performed as measured against inflation plus 10%;


	c.	How the overall firm performed.

Ownership of Fund Securities

Longleaf Partners Fund — Over $1,000,000

Longleaf Partners International Fund — Over $1,000,000

Longleaf Partners Small-Cap Fund — Over $1,000,000

Other Accounts Managed — E. Andrew McDermott


1.	E. Andrew McDermott, Co-Portfolio Manager, Longleaf Partners International Fund

2.	Other accounts managed:


	a.	Other registered investment companies (including Longleaf Partners and Small-Cap Funds): 6 accounts, assets = $15,342,281,214


	b.	Other pooled accounts: 18 accounts, assets = $1,676,141,432


	c.	Other accounts: 195 accounts, assets = $19,553,568,050


3.	Under 2(c), 5 accounts have performance fees, assets = $877,626,881

4.	Conflicts of interest could arise in connection with managing the Longleaf Partners Funds side by side with Southeastern’s other clients (the “Other Accounts”). Southeastern’s Other Accounts include domestic, global, international, small-cap and balanced mandates, and investment opportunities may be appropriate for more than one category of account, as well as more than one of the Longleaf Partners Funds. Because of market conditions and client guidelines, not all investment opportunities will be available to all accounts at all times. Southeastern has developed allocation principles designed to ensure that no account or Fund is systematically given preferential treatment over time, and Southeastern’s compliance personnel, including the CCO-Mutual Funds, routinely monitor allocations for consistency with these principles, as well as any evidence of conflict of interest. Performance fee accounts referenced in #3 above are subject to the same allocation principles and the same compliance review. Regarding the potential conflict of interest presented by performance fee accounts, Southeastern does not view this potential conflict as material, since performance fee accounts were less than 3% of total assets at December 31, 2006. Much more material is the ownership Southeastern’s personnel have in each of the Longleaf Partners Funds (see page 17 of this SAI, as well as the table below). Longleaf’s portfolios are managed under the same allocation principles and compliance reviews as all other accounts. Investors in Longleaf should be aware that the interests of Southeastern’s personnel are aligned with other Longleaf shareholders’. Southeastern personnel do not have personal or proprietary trading accounts competing for allocations with the Funds or Other Accounts.

Compensation

Portfolio manager compensation at 12/31/06 included the following:


	•	Competitive salary (comparable to investment firms elsewhere);

	•	Bonus based on contribution to the firm over the year. Contribution includes:


	a.	How investment ideas generated by the manager performed both in price and value growth;


	b.	How the Longleaf Funds and other Southeastern accounts performed as measured against inflation plus 10%;


	c.	How the overall firm performed.

Ownership of Fund Securities

Longleaf Partners International Fund — Over $1,000,000

OTHER SERVICE PROVIDERS

Custodian of Fund Assets. State Street Bank and Trust Company, located at One Heritage Drive, North Quincy, MA 02171, serves as Custodian of the assets of each Fund. Where possible, the Custodian utilizes book entry records with securities depositories, which in turn may have book entry records with transfer agents of the issuers of the securities. With respect to U.S. Government issues the Custodian may utilize the book entry system of the Federal Reserve System. The Custodian is responsible for collecting the proceeds of securities sold and disbursement of the cost of securities purchased by the Funds. State Street Bank also serves as the foreign custody manager for the Funds with respect to foreign securities, using foreign sub-custodians which participate in its global custody network.

Transfer Agent. PFPC Inc. (“PFPC”), located at 4400 Computer Drive, Westborough, MA 01581-5120, an affiliate of The PNC Financial Services Group, Inc., is the transfer agent and dividend disbursing agent. PFPC maintains all shareholder accounts and records; processes all transactions including purchases, redemptions, transfers and exchanges; prepares and mails account confirmations, statements, tax forms, and correspondence; issues stock certificates; and handles all account inquiries.

Independent Registered Public Accounting Firm. PricewaterhouseCoopers LLP is the Fund’s independent registered public accounting firm. The Funds are served by the Baltimore office, located at 250 West Pratt Street, Suite 2100, Baltimore MD 21201, and by the Boston office, located at 125 High Street, Boston, MA 02110.

Legal Counsel. Dechert, a law firm with offices in major cities including Washington, Philadelphia, New York City, and Boston, is the Funds’ special legal counsel. The Funds are served by the Washington office, located at 1775 Eye Street, NW, Washington, DC 20006-2402, and the Boston office, located at Ten Post Office Square, South, Boston, MA 02109-4603. Andrew R. McCarroll, Vice President and General Counsel of Southeastern, and Michael J. Wittke, Vice President, Legal Counsel and CCO of Southeastern, perform legal services for the Funds under Southeastern’s contract as Fund Administrator, which includes responsibility for preparing registration statements and other regulatory filings for the Funds.

Service Awards. In order to promote quality service for the benefit of Fund shareholders, Southeastern may give special recognition or financial rewards to employees of service providers such as the Funds’ transfer agent and fulfillment agent. Such reward programs are designed to recognize employees of these Fund service providers who excel in meeting our shareholders’ needs. Costs associated with these reward programs are paid by Southeastern.

ALLOCATION OF BROKERAGE COMMISSIONS

Southeastern, in its capacity as Investment Counsel, is responsible under the supervision of the Board of Trustees for the selection of members of securities exchanges, brokers and dealers (referred to as “brokers”) for the execution of portfolio transactions and, when applicable, the negotiation of brokerage commissions. On behalf of each Fund, Southeastern is also responsible for investment decisions and for the placement and execution of purchase and sale orders through selected brokers. All investment decisions and placements of trades for the purchase and sale of portfolio securities are made in accordance with the following principles:


	1. Purchase and sale orders are usually placed with brokers who are recommended by Southeastern and/or selected by management of the Fund as able to achieve “best execution” of such orders. “Best execution” means prompt and reliable execution at the most favorable security price, taking into account the following provisions. The determination of what may constitute best execution and price in the execution of a securities transaction by a broker involves a number of considerations, including, among others, the overall direct net economic result to the Fund (involving both price paid or received and any commissions and other costs paid), the efficiency with which the transaction is effected, the ability to effect the transaction in the desired price range with a minimum of market impact, the financial strength and stability of the broker, and the ability of the broker to commit resources to the execution of the trade. Such considerations are judgemental and are weighed by Southeastern and the Board of Trustees in determining the overall reasonableness of brokerage commissions.

	2. In recommending or selecting brokers for portfolio transactions, Southeastern takes into account its past experience in determining those qualified to achieve “best execution.”

	3. Southeastern is authorized to recommend and the Fund is authorized to allocate brokerage and principal purchase and sales transactions to brokers who have provided brokerage and research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934 (the “1934 Act”), and for other services which benefit the Fund directly through reduction of the Fund’s expense obligations. Southeastern could cause the Fund to pay a commission for effecting a securities transaction in excess of the amount another broker would have charged for effecting that transaction, if Southeastern in making the recommendation in question determines in good faith that the commission is reasonable in relation to the value of the brokerage and research services or other benefits provided the Fund by such broker. In reaching such determination, neither Southeastern nor the officer of the Fund making the decision is required to place a specific dollar value on the research or execution services of a broker. In demonstrating that such determinations were made in good faith, Southeastern and the officer of the Fund shall be prepared to show that all commissions were allocated and paid for purposes contemplated by the Fund’s brokerage policy; that any other benefits or services provided the Fund were in furtherance of lawful and appropriate obligations of the Fund; and that the commissions paid were within a reasonable range. Such determination shall be based on available information as to the level of commissions known to be charged by other brokers on comparable transactions, but there shall be taken into account the Fund’s policies (i) that paying the lowest commission is deemed secondary to obtaining a favorable price and (ii) that the quality, comprehensiveness and frequency of research studies which are provided for the Fund and Southeastern may be useful to Southeastern in performing its services under its Agreement with the Fund but are not subject to precise evaluation. Research services provided by brokers to the Fund or to Southeastern are considered to be supplementary to, and not in lieu of services required to be performed by Southeastern. While Southeastern is authorized by its contract with the Funds to purchase research services with Fund commissions as permitted by Section 28(e) of the 1934 Act (as described above), Southeastern does not consider this

service in selecting firms to execute portfolio transactions for the Funds. Southeastern performs its own independent research in performing investment counsel services for the Funds. Southeastern may obtain supplemental investment research information from certain brokerage firms in the ordinary course of business, but Southeastern evaluates brokers based on the quality of their execution and brokerage services and does not make trading allocations to receive research.

4. Purchases and sales of portfolio securities within the United States other than on a securities exchange are executed with primary market makers acting as principal, except where, in the judgment of Southeastern, better prices and execution may be obtained on a commission basis or from other sources. Southeastern may also utilize electronic communication networks (ECN’s) when the requisite volume of securities can be purchased or sold in the desired price range.

Investment decisions for each Fund are made independently from those of the other Funds or accounts of other clients managed by Southeastern, but the same security may be held in the portfolios of more than one Fund or by a number of managed accounts. When several accounts and the Funds’ portfolios simultaneously purchase or sell the same security, the prices and amounts will be equitably allocated among all such accounts. In some situations this procedure could adversely affect the price or quantity of the security available to one or more of the Funds, but in other situations the ability to participate in larger volume transactions may enable a Fund to realize better executions, prices, and lower commissions.

Southeastern does not own an interest in any brokerage firm and places trades for the Funds through non-affiliated brokerage firms. Brokerage commissions paid by the Funds for the past three years are as follows:


	2006		2005		2004

Partners Fund	$	5,791,318	$	6,862,546	$	4,459,605
Small-Cap Fund		3,854,126		2,929,765		2,793,021
International Fund		2,191,226		2,040,884		1,948,301

CAPITAL STOCK AND INDEMNIFICATION RIGHTS

Longleaf Partners Funds Trust (the “Trust”) is a Massachusetts business trust which presently has three separate series or Funds. Each series issues its capital stock in the form of shares of beneficial interest having no par value. Each Fund may issue an unlimited number of shares of beneficial interest, all of which are of one class. Each share of each Fund has equal voting rights with all other shares of that Fund. Shares do not have cumulative voting rights, which means that holders of less than 50% of the outstanding shares cannot cumulate their total votes for all Trustees in order to elect a single Trustee, and the holders of more than 50% of the outstanding shares may elect 100% of the particular Fund’s Trustees.

A Massachusetts business trust is not required to hold annual meetings of shareholders. Annual meetings ordinarily will not be held unless so required by the provisions of the Investment Company Act of 1940, which would include such matters as amending the investment advisory agreement or electing new members of the Board of Trustees. The Board of Trustees may fill vacancies on the Board if at least two-thirds of the Trustees serving after the new appointment were elected by shareholders.

Each share of beneficial interest represents an equal proportionate interest in the assets of the particular Fund with every other share and each share is entitled to a proportionate share of dividends and distributions of net income and capital gains belonging to that Fund when declared by the Board of Trustees. There are no preemptive, subscription, or conversion rights.

When a Fund has received payment of the net asset value per share, each share issued is fully paid and non-assessable. Under Massachusetts law, shareholders of a mutual fund which is a series of a Massachusetts business trust could, in theory, be held personally liable for certain obligations of the particular series. Our Declaration of Trust contains an express disclaimer of shareholder liability for obligations of each series, and this disclaimer is included in contracts between the Funds and third parties. The Declaration of Trust also provides for indemnification from the assets of each series for shareholder liability for covered acts or obligations should any shareholder be held personally liable under these provisions.

The Declaration of Trust and By-Laws provide that no Trustee or agent of any Fund shall be subject to any personal liability to the Fund or its shareholders for any action or failure to act, except for such person’s willful misfeasance, bad faith, gross negligence, or reckless disregard of the person’s duties. The Trust indemnifies each such person against all such losses other than the excepted losses. The agreements between the Trust and, respectively, the Investment Counsel and the Fund Administrator provide for indemnification and relieve each such entity of liability for any act or omission in the course of its performance under the particular agreement, including any mistake of judgment, in the absence of willful misfeasance, bad faith or gross negligence.

PURCHASE, REDEMPTION, AND PRICING OF SHARES

The methods of purchasing and redeeming shares through the transfer agent, PFPC, are described on pages 25 through 34 of the Prospectus. Shares are offered and redeemed at the net asset value per share next computed after receiving a purchase order or a redemption request. Such calculations are made once a day, at the close of regular trading on the New York Stock Exchange, usually at 4:00 p.m. Eastern Time.

To compute net asset value per share, we value all Fund assets daily, including accruing dividends declared on portfolio securities and other rights to future income. Liabilities are accrued and subtracted from assets, and the resulting amount is divided by the number of shares of beneficial interest then outstanding. The following formula illustrates this calculation:

The net asset value per share for each of the Longleaf Partners Funds as shown in the Statements of Assets and Liabilities for the year ended December 31, 2006, shown on page 43, was calculated as follows:


Partners Fund		Small-Cap Fund		International Fund

$10,871,594,247		$3,447,284,625		$3,254,537,913
	= $34.86		= $30.12		= $18.91
311,836,665		114,450,547		172,081,690

In valuing Fund assets, we apply the following procedures:


(1)	Portfolio securities listed or traded on a securities exchange (U.S. or foreign), on the NASDAQ national market or any representative quotation system providing same day publication of actual prices, are valued at the last sale price. If there are no transactions in the security that day, securities are valued at the midpoint between the closing bid and ask prices or, if there are no such prices, the prior day’s closing price;

(2)	In the case of bonds and other fixed income securities, valuations may be furnished by a pricing service which takes into account factors in addition to quoted prices (such as trading characteristics, yield, quality, coupon rate, maturity, type of issue, and other market data relating to the priced security or other similar securities) where taking such factors into account would lead to a more accurate reflection of the fair market value of such securities;

(3)	When market quotations are not readily available, valuations of portfolio securities may be determined in accordance with procedures established by and under the general supervision of the Funds’ Trustees. In determining fair value, the Board considers all relevant qualitative and quantitative information available including news regarding significant market or security specific events. The Board may also utilize a service provided by an independent third party to assist in fair valuation of certain securities. These factors are subject to change over time and are reviewed periodically. Because the utilization of fair value pricing depends on market activity, the frequency with which fair valuation may be used cannot be predicted. Estimated values may differ from the values that would have been used had a ready market for the investment existed.

(4)	Repurchase agreements are valued at cost which, combined with accrued interest, approximates market;


(5)	Short-term United States Government obligations are valued at amortized cost which approximates current market value;

(6)	The value of other assets, including restricted and not readily marketable securities, will be determined in good faith at fair value under procedures established by and under the general supervision of the Trustees; and

(7)	Assets and liabilities initially expressed in foreign currencies will be converted into U.S. dollars using a method of determining a rate of exchange consistent with policies established by the Board of Trustees.

The Funds normally calculate net asset value as of the close of business of the New York Stock Exchange. Trading in securities on European and Far Eastern securities exchanges or in other foreign markets is normally completed at times when the New York Stock Exchange is not open for business. In addition, trading in such international markets may not take place on days when the New York Stock Exchange is open for business. Because of the different trading days or hours in the various foreign markets, the calculation of the Funds’ net asset value may not take place contemporaneously with the determination of the closing prices of some foreign securities on the particular foreign exchanges or in other foreign markets in which those securities are traded.

Should events occur which could materially or significantly affect the valuation of such securities between the time when their closing prices are determined in the usual manner and the time the net asset value is calculated, the Funds may, in the discretion of the Board of Trustees and consistent with any specific regulatory requirements, elect to value these securities at fair value as determined in good faith by the Board of Trustees.

ADDITIONAL TAX INFORMATION

Each Fund intends to qualify for favorable tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended. Qualification does not involve supervision of management or investment practices or policies by the Internal Revenue Service. In order to qualify as a regulated investment company, a Fund must, among other things, derive at least 90% of its gross income from dividends, interest, payments with respect to proceeds from securities loans, gains from the sale or other disposition of securities and other income (including gains from options, futures and forward foreign currency contracts) derived with respect to its business of investing in such securities. Each Fund must also diversify its holdings so that, at the end of each quarter of its taxable year, (i) at least 50% of the market value of total assets is represented by cash, U.S. Government securities and other securities limited in respect of any one issuer to an amount not greater than 5% of the Fund’s total assets and 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of its total assets is invested in the securities of any one issuer (other than U.S. Government securities and regulated investment companies). Further, a Fund may invest not more than 25% of the value of its total assets in the securities of two or more issuers which the Fund controls and which are engaged in the same or similar trades or businesses or related trades or businesses.

If a Fund qualifies under the Internal Revenue Code for favorable tax treatment, it is not subject to federal income tax or state taxation in the Commonwealth of Massachusetts on its investment company taxable income and any net realized capital gains which are distributed to shareholders. Instead, shareholders other than tax exempt organizations are taxable at their federal income tax rates on the distributions declared, even if the distributions are reinvested in additional shares of the Funds. If a Fund should fail to qualify for favorable tax treatment under the Internal Revenue Code, the Fund itself would be subject to federal income

tax and to taxation by the Commonwealth of Massachusetts on these amounts. To qualify again for favorable tax treatment under the Internal Revenue Code, the Fund must distribute all undistributed earnings and profits to shareholders, who then would be subject to taxation on the amounts distributed.

Investment income received by the Funds from sources within foreign countries may be subject to foreign income taxes withheld at the source. The United States has entered into tax treaties with many foreign countries which entitle the Funds to a reduced rate of tax or exemption from tax on such income. It is not possible to determine the effective rate of foreign tax in advance, because the amount of assets to be invested within various countries is not known.

If a Fund owns shares in a foreign corporation that constitutes a “passive foreign investment company” for U.S. federal income tax purposes and the Fund does not elect or is not able to treat the foreign corporation as a “qualified electing fund” within the meaning of the Code, the Fund may be subject to U.S. federal income tax on a portion of any “excess distribution” it receives from the foreign corporation or any gain it derives from the disposition of such shares, even if such income is distributed as a dividend by the Fund to its U.S. shareholders. A Fund may also be subject to additional tax in the nature of an interest charge with respect to deferred taxes arising from such distributions or gains. Any tax paid by a Fund as a result of its ownership of shares in a “passive foreign investment company” will not give rise to any deduction or credit to the Fund or any shareholder. If a Fund owns shares in a “passive foreign investment company” and the Fund is able to treat the foreign corporation as a “qualified electing fund” under the Code or under special rules applicable to registered investment companies, the Fund may be required to include in its income each year a portion of the ordinary income and net realized capital gains and unrealized appreciation of the foreign corporation, even if this income is not distributed to the Fund. Any such income may be treated as ordinary income and would be subject to the distribution requirements described above, even if the Fund does not receive any amounts to distribute. Alternatively, the Fund may elect to “mark to market” shares in a “passive foreign investment company.” If this election is made, the stock in a “passive foreign investment company” is marked to market (treated as if it were sold) at the close of the Fund’s taxable year. If the “passive foreign investment company” stock is in an unrealized gain position at that time, the Fund will recognize the gain as ordinary income which is subject to the Fund’s distribution requirements. If the “passive foreign investment company” stock is in an unrealized loss position, the losses are permitted to be recognized, but only to the extent of “mark to market” gains previously taken into account on that stock.

INVESTMENT PERFORMANCE AND TOTAL RETURN

Total Return Calculation. The average annual total return on an investment in shares of each of the Funds for a particular period is calculated using a specific formula required by the Securities & Exchange Commission. The formula takes into account any appreciation or depreciation in the portfolio, assumes reinvestment of all dividends and capital gains distributions, and then mathematically averages the return over the length of time covered by the calculation. The formula used for computing average annual total return, as specified by regulation, is as follows:


	“Average Annual Total Return” shall mean the average annual compounded rate of return, computed according to the following formula:

p(1+T) to the nth power = ERV


Where	P	=	a hypothetical initial investment of $1,000
	T	=	average annual total return
	n	=	number of years (or fractional portions thereof)
	ERV	=	ending value of a hypothetical $1,000 investment made at the beginning of the period (or fractional portion thereof).

The average annual total returns of each of the Funds for the years ended December 31 for the past ten years or since inception, if shorter, are as follows:


	Partners			Small-Cap			International
	Fund			Fund			Fund

2006		21.63	%		22.33	%		17.07	%
2005		3.62			10.75			12.88
2004		7.14			14.78			10.21
2003		34.80			43.85			41.52
2002		(8.34	)		(3.74	)		(16.51	)
2001		10.34			5.45			10.47
2000		20.60			12.80			25.93
1999		2.18			4.05			24.37
1998		14.28			12.71			9.02	*
1997		28.25			29.04			—

* Partial year

The average annual returns for each of the Funds for the cumulative periods shown, ending on December 31, 2006, are as follows:


Partners Fund
	Five years ended 12/31/06	10.78	%
	Ten years ended 12/31/06	12.77
Small-Cap Fund
	Five years ended 12/31/06	16.58
	Ten years ended 12/31/06	14.51
International Fund
	Five years ended 12/31/06	11.47
	From Initial Public offering on 10/26/98 through 12/31/06	15.47

Investment Performance Information. The Funds may publish their total returns in advertisements and communications to shareholders. Total return information will include the average annual compounded rate of return for the one, five, and ten year periods (or since initial public offering) ended at the close of the most recent calendar quarter. Each Fund may also advertise or provide aggregate and average total return information for different periods of time, such as the latest calendar quarter or for the calendar year-to-date.

Each Fund may also compare its performance to that of widely recognized unmanaged stock market indices as well as other more specialized indices. The Funds may also compare their performance with that of other mutual funds having similar investment objectives and with the industry as a whole, as determined by outside services such as Lipper Analytical Services, Inc., CDA Technologies, Morningstar, Inc., and The Value Line Mutual Fund Survey. The Funds may also provide information on their relative rankings as published in such newspapers and magazines as The Wall Street Journal, Barron’s, Forbes, Business Week, Money, Financial World , and other similar publications.

Use of Total Return Information. Average annual total return information may be useful to investors in considering each Fund’s past investment performance. However, certain factors should be taken into account before basing an investment decision on this information. First, in comparing the Fund’s total return with the total return of any market indices for the same period, the investor should be aware that market indices are unmanaged and unhedged and contain different and more numerous securities than the Funds’ portfolios. Some market indices are not adjusted for reinvested dividends, and no adjustment is made in market indices for taxes payable on distributions. After tax calculations applicable to the Funds’ total returns are shown in the Prospectus on pages 9, 11, and 13.

An investment in the Funds is an equity investment. As a result, total returns will fluctuate over time, and the total return for any past period is not an indication or representation as to future rates of total return. When comparing each Fund’s total returns with those of other alternatives such as fixed income investments, investors should understand that an equity fund may be subject to greater market risks than are money market or fixed income investments, and that the Funds are designed for investors who are willing to accept such greater market risks for the possibility of realizing greater long-term gains. There is no assurance that the Funds’ investment objectives will be achieved.

TABLE OF BOND AND PREFERRED STOCK RATINGS

Description of Moody’s Investors Service, Inc. corporate bond ratings:

Aaa — Bonds which are rated Aaa are judged to be the best quality. They carry the smallest degree of investment risk and are generally 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 than 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.

A — Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future.

Baa — Bonds which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.

Ba — Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.

B — Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.

Caa — Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.

Moody’s applies the numerical modifiers 1, 2 and 3 to each generic rating classification from Aa through B. The modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category.

Description of Moody’s Investors Service, Inc. preferred stock ratings:

aaa — An issue which is rated aaa is considered to be a top-quality preferred stock. This rating indicates good asset protection and the least risk of dividend impairment within the universe of convertible preferred stocks.

aa — An issue which is rated aa is considered a high-grade preferred stock. This rating indicates that there is reasonable assurance that earnings and asset protection will remain relatively well maintained in the foreseeable future.

a — An issue which is rated a is considered to be an upper-medium grade preferred stock. While risks are judged to be somewhat greater than the aaa and aa classifications, earnings and asset protection are, nevertheless, expected to be maintained at adequate levels.

baa — An issue which is rated baa is considered to be a medium-grade preferred stock, neither highly protected nor poorly secured. Earnings and asset protection appear adequate at present but may be questionable over any great length of time.

ba — An issue which is rated ba is considered to have speculative elements, and its future cannot be considered well assured. Earnings and asset protection may be very moderate and not well safeguarded during adverse periods. Uncertainty of position characterizes preferred stocks in this class.

b — An issue which is rated b generally lacks the characteristics of a desirable investment. Assurance of dividend payments and maintenance of other terms of the issue over any long period of time may be small.

caa — An issue which is rated caa is likely to be in arrears on dividend payments. This rating designation does not purport to indicate the future status of payments.

Description of Standard & Poor’s Corporation corporate bond and preferred stock ratings:

AAA — Securities rated AAA have the highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong.

AA — Securities rated AA have a very strong capacity to pay interest and repay principal and differ from the higher rated issues only in small degree.

A — Securities rated A have a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than securities in higher rated categories.

BBB — Securities rated BBB are regarded as having an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for securities in this category than for securities in higher rated categories.

BB, B and CCC — Securities rated BB, B and CCC are regarded, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. BB represents the lowest degree of speculation and CCC the highest degree of speculation. While such securities will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions.

BB — Securities rated BB have less near-term vulnerability to default than other speculative issues. However, they face major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. The BB rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BBB- rating.

B — Securities rated B have a greater vulnerability to default but currently have the capacity to meet interest payments and principal repayments. Adverse business, financial, or economic conditions will likely impair

capacity or willingness to pay interest and repay principal. The B rating category is also used for debt subordinated to senior debt that is assigned an actual or implied B or BB rating.

CCC — Securities rated CCC have a currently identifiable vulnerability to default, and are dependent upon favorable business, financial and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or economic conditions, they are not likely to have the capacity to pay interest and repay principal. The CCC rating category is also used for debt subordinated to senior debt that is assigned an actual or implied B or B- rating.

Plus (+) or Minus (–): The ratings from A to CCC may be modified by the addition of a plus or minus sign to show relative standing within major rating categories.

FINANCIAL STATEMENTS

The financial statements for the fiscal year ended December 31, 2006, audited by PricewaterhouseCoopers LLP, the Funds’ independent registered public accounting firm, are included in the printed Annual Report to Shareholders of the Funds. The Financial Statements contained in the printed Annual Report, together with the Report of Independent Registered Public Accounting Firm dated February 2, 2007, are included as a part of this Statement of Additional Information on the following pages.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholders of

Longleaf Partners Funds Trust:

In our opinion, the accompanying statements of assets and liabilities, including the portfolios of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Longleaf Partners Funds Trust (comprised of Longleaf Partners Fund, Longleaf Partners Small-Cap Fund, and Longleaf Partners International Fund, hereafter referred to as the “Funds”) at December 31, 2006, and the results of each of their operations for the year then ended, and the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States.) Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2006 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Baltimore, Maryland

February 2, 2007

Partners Fund - PORTFOLIO OF INVESTMENTS

at December 31, 2006


	Shares				Value

Common Stock 90.9%
				Automobiles 4.0%
		14,240,000		General Motors Corporation	$	437,452,800
				Broadcasting and Cable 9.4%
		10,055,996	*	Comcast Corporation – Class A Special		421,145,112
		24,070,500	*	The DIRECTV Group, Inc.		600,318,270

						1,021,463,382

				Construction Materials 4.8%
		157,540		Cemex S.A.B. de C.V. (Foreign)		533,883
		15,412,872		Cemex S.A.B. de C.V. ADS (Foreign)		521,417,460

						521,951,343

				Entertainment 9.1%
		4,335,344	*	Discovery Holding Company – Class A		69,755,685
		4,038,172	*	Liberty Media Holding Corporation – Capital Series A		395,660,093
		15,489,800		The Walt Disney Corporation		530,835,446

						996,251,224

				Insurance Brokerage 4.8%
		14,627,000		Aon Corporation		516,918,180
				Internet and Catalog Retail 4.5%
		22,584,666	*	Liberty Media Holding Corporation – Interactive Series A		487,151,246
				Internet Services 1.4%
		4,915,100	*	eBay, Inc.		147,797,057
				Multi-Industry 4.5%
		12,547,570		Vivendi Universal, S.A. (Foreign) ^(c)		490,408,590
				Natural Resources 7.0%
		14,315,500		Chesapeake Energy Corporation		415,865,275
		8,784,400		Pioneer Natural Resources Company ^(b)		348,652,836

						764,518,111

				Property & Casualty Insurance 4.8%
		63,701,000		The NipponKoa Insurance Company, Ltd. (Foreign) ^(b)(c)		516,545,229
				Restaurants 5.1%
		9,369,100		Yum! Brands, Inc.		550,903,080
				Software 1.2%
		6,314,800	*	Symantec Corporation		131,663,580
				Technology 14.1%
		40,882,816	*	Dell Inc.		1,025,749,853
		11,806,035		Koninklijke (Royal) Philips Electronics N.V. (Foreign)		445,219,667
		1,787,165		Koninklijke (Royal) Philips Electronics N.V. ADR (Foreign)		67,161,661

						1,538,131,181

See Notes to Financial Statements.

Partners Fund - PORTFOLIO OF INVESTMENTS

at December 31, 2006


Shares				Value

			Telecommunications 12.2%
	81,029,000	*	Level 3 Communications, Inc. ^(b)	$	453,762,400
	26,817,900		Sprint Nextel Corporation		506,590,131
	1,530,800		Telephone and Data Systems, Inc.		83,168,364
	5,666,200		Telephone and Data Systems, Inc. – Special		281,043,520

					1,324,564,415

			Transportation 4.0%
	3,998,600		FedEx Corporation ^(c)		434,327,932

			Total Common Stocks (Cost $6,855,986,859)		9,880,047,350


	Principal
	Amount

	Corporate Bonds 3.7%
			Telecommunications 3.7%
		222,079,000	Level 3 Communications, Inc. 10% Convertible Senior Notes due 5-1-11 (Cost $222,079,000) ^(b)				403,628,583
	Short-Term Obligations 4.5%
		342,253,000	Repurchase Agreement with State Street Bank, 4.65% due 1/2/07, Repurchase price $342,429,831 (Collateralized by U.S. government securities)				342,253,000
		150,000,000	U.S. Treasury Bill, 4.95% due 3-22-07				148,393,333

			Total Short-Term Obligations				490,646,333

Total Investments (Cost $7,568,712,192) ^(a)				99.1	%		10,774,322,266
Other Assets and Liabilities, Net				0.9			97,271,981

Net Assets				100.0	%	$	10,871,594,247

Net asset value per share							$34.86

* Non-income producing security.


^(a)	Aggregate cost for federal income tax purposes is $7,589,672,728. Net unrealized appreciation of $3,205,610,074 consists of unrealized appreciation and depreciation of $3,656,244,539 and $(450,634,465), respectively.
^(b)	Affiliated issuer. See Note 7.
^(c)	All or a portion designated as collateral. See Note 8.


Note:	Companies designated as “Foreign” are headquartered outside the U.S. and represent 19% of net assets.

See Notes to Financial Statements.

Partners Fund - PORTFOLIO OF INVESTMENTS

at December 31, 2006

OPEN FORWARD CURRENCY CONTRACTS


Currency		Currency Sold and	Currency		Unrealized
Units Sold		Settlement Date	Market Value		Gain (Loss)

	271,781,000	Euro 3-28-07	$	360,154,832	$	(661,950	)
	23,337,000,000	Japanese Yen 3-20-07		198,151,131		7,202,476
	13,738,000,000	Japanese Yen 3-28-07		116,771,017		3,346,845
	26,498,598,000	Japanese Yen 6-22-07		227,726,578		(212,214	)

			$	902,803,558	$	9,675,157

See Notes to Financial Statements.

Small-Cap Fund - PORTFOLIO OF INVESTMENTS

at December 31, 2006


	Shares				Value

Common Stock 87.6%
				Beverages 3.2%
		5,262,900		PepsiAmericas, Inc.	$	110,415,642
				Construction Materials 6.1%
		3,244,800		Texas Industries, Inc. ^(b)		208,413,504
				Entertainment 5.8%
		12,422,000	*	Discovery Holding Company – Class A		199,869,980
				Food 2.9%
		8,898,600		Del Monte Foods Company		98,151,558
				Funeral Services 5.0%
		16,719,400		Service Corporation International ^(b)		171,373,850
				Grocery – Retail 3.9%
		4,823,500		Ruddick Corporation ^(b)		133,852,125
				Information Technology 2.2%
		1,902,400		Fair Isaac Corporation		77,332,560
				Insurance Brokerage 7.2%
		3,526,400		Hilb Rogal & Hobbs Company ^(b)		148,531,968
		2,513,000		Willis Group Holdings Limited (Foreign)		99,791,230

						248,323,198

				Manufacturing 5.3%
		14,609,800	*	Jacuzzi Brands, Inc. ^(b)		181,599,814
				Medical and Photo Equipment 5.6%
		6,149,000		Olympus Corporation (Foreign)		193,246,166
				Natural Resources 9.3%
		4,004,300		Pioneer Natural Resources Company		158,930,667
		3,702,022		Potlatch Corporation ^(b)		162,222,604

						321,153,271

				Property & Casualty Insurance 10.0%
		1,421,800		Everest Re Group, Ltd. (Foreign)		139,492,798
		886,000		Fairfax Financial Holdings Limited (Foreign)		176,007,220
		843,800		Odyssey Re Holdings Corp.		31,473,740

						346,973,758

				Real Estate 1.6%
		1,211,917	*	Vail Resorts, Inc.		54,318,120

See Notes to Financial Statements.

Small-Cap Fund - PORTFOLIO OF INVESTMENTS

at December 31, 2006


Shares				Value

			Restaurants 8.0%
	2,978,100		IHOP Corp. ^(b)	$	156,945,870
	3,663,800		Wendy’s International, Inc.		121,235,142

					278,181,012

			Telecommunications 11.5%
	459,400	*	IDT Corporation		6,215,682
	9,288,162	*	IDT Corporation – Class B		121,489,159
	48,076,002	*	Level 3 Communications, Inc.		269,225,611

					396,930,452

			Total Common Stocks (Cost $2,281,800,783)		3,020,135,010


	Principal
	Amount

Short-Term Obligations 13.6%
		145,584,000	Repurchase Agreement with State Street Bank, 4.65% due 1-2-07, Repurchase price $145,659,218 (Collateralized by U.S. government securities)				145,584,000
		325,000,000	U.S. Treasury Bills, 4.93% - 4.99% due 2-22-07 to 3-22-07				321,952,479

			Total Short-Term Obligations				467,536,479

Total Investments (Cost $2,749,337,262) ^(a)				101.2	%		3,487,671,489
Other Assets and Liabilities, Net				(1.2	)		(40,386,864	)

Net Assets				100.0	%	$	3,447,284,625

Net asset value per share							$30.12

* Non-income producing security.


^(a)	Aggregate cost for federal tax purposes is $2,749,657,232. Net unrealized appreciation consists entirely of $738,334,227 unrealized appreciation.
^(b)	Affiliated issuer. See Note 7.


Note:	Companies designated as “Foreign” are headquartered outside the U.S. and represent 18% of net assets.

See Notes to Financial Statements.

International Fund - PORTFOLIO OF INVESTMENTS

at December 31, 2006


	Shares			Value

Common Stock 92.8%
			Automobiles 5.9%
		1,597,000	Renault S.A. (France) ^(b)	$	191,825,502
			Broadcasting and Cable 7.2%
		13,762,000	British Sky Broadcasting Group plc (United Kingdom) ^(b)		140,665,048
		4,255,140	The News Corporation (United States)		94,719,416

					235,384,464

			Construction Materials 5.4%
		5,186,000	Cemex S.A.B. de C.V. ADS (Mexico)		175,442,380
			Financial Services 2.5%
		6,974,000	Nikko Cordial Corporation (Japan)		79,992,521
			Food 5.0%
		454,000	Nestle S.A. (Switzerland)		161,331,145
			Gaming Machines 0.3%
		152,000	Sankyo Co., Ltd. (Japan)		8,417,125
			Industrial Machinery 4.7%
		3,931,000	Ingersoll-Rand Company Limited (Bermuda)		153,820,030
			Insurance Brokerage 4.4%
		3,586,000	Willis Group Holdings Limited (United Kingdom)		142,400,060
			Medical and Photo Equipment 6.2%
		6,405,000	Olympus Corporation (Japan) ^(b)		201,291,542
			Multi-Industry 10.1%
		13,723,000	Cheung Kong Holdings Limited (Hong Kong)		168,928,590
		4,122,000	Vivendi Universal, S.A. (France) ^(b)		161,104,039

					330,032,629

			Property & Casualty Insurance 17.2%
		910,000	Fairfax Financial Holdings Limited (Canada)		180,774,910
		4,198,000	Millea Holdings, Inc. (Japan)		148,158,481
		28,556,000	The NipponKoa Insurance Company, Ltd. (Japan) ^(b)		231,557,834

					560,491,225

			Restaurants 4.6%
		2,558,000	Yum! Brands, Inc. (United States)		150,410,400

See Notes to Financial Statements.

International Fund - PORTFOLIO OF INVESTMENTS

at December 31, 2006


Shares				Value

			Technology 13.7%
	11,382,751	*	Dell Inc. (United States)	$	285,593,223
	1,365,931		Koninklijke (Royal) Philips Electronics N.V. (Netherlands)		51,510,888
	2,889,269		Koninklijke (Royal) Philips Electronics N.V. ADR (Netherlands)		108,578,729

					445,682,840

			Telecommunications 5.6%
	17,163		KDDI Corporation (Japan)		116,386,211
	41,647		NTT DoCoMo, Inc. (Japan) ^(b)		65,792,496

			Total Common Stocks (Cost $2,013,659,676)		182,178,707

					3,018,700,570


	Principal
	Amount

Short-Term Obligations 7.6%
		149,808,000	Repurchase Agreement with State Street Bank, 4.65% due 1/2/07, Repurchase price $149,885,401 (Collateralized by U.S. government securities)				149,808,000
		100,000,000	U.S. Treasury Bills, 4.95%-4.99% due 2-22-07 to 3-22-07				99,112,722

			Total Short-Term Obligations				248,920,722

Total Investments (Cost $2,262,580,398) ^(a)				100.4	%		3,267,621,292
Other Assets and Liabilities, Net				(0.4	)		(13,083,379	)

Net Assets				100.0	%	$	3,254,537,913

Net asset value per share							$ 18.91

* Non-income producing security.


^(a)	Also represents aggregate cost for federal income tax purposes. Net unrealized appreciation of $1,005,040,894 consists of unrealized appreciation and depreciation of $1,043,781,171 and $(38,740,277), respectively.
^(b)	All or a portion designated as collateral. See Note 8.


Note:	Country listed in parenthesis after each company indicates location of headquarters.

See Notes to Financial Statements.

International Fund - PORTFOLIO OF INVESTMENTS

at December 31, 2006

OPEN FORWARD CURRENCY CONTRACTS


Currency		Currency Sold and	Currency		Unrealized
Units Sold		Settlement Date	Market Value		Gain(Loss)

	71,976,000	British Pound 3-23-07	$	140,968,664	$	(174,971	)
	91,254,000	Euro 3-28-07		120,926,662		(222,258	)
	5,557,000,000	Japanese Yen 3-20-07		47,183,693		1,715,052
	13,892,000,000	Japanese Yen 3-28-07		118,079,995		2,607,713
	23,318,901,000	Japanese Yen 5-23-07		199,614,149		4,814,131
	34,203,765,000	Japanese Yen 6-22-07		293,944,093		(273,921	)

			$	920,717,256	$	8,465,746

COUNTRY WEIGHTINGS


	Equity			Net
	Only			Assets

Japan		28.2	%		26.2	%
United States		17.6			16.3
France		11.7			10.8
United Kingdom		9.4			8.7
Canada		6.0			5.6
Mexico		5.8			5.4
Hong Kong		5.6			5.2
Switzerland		5.3			5.0
Netherlands		5.3			4.9
Bermuda		5.1			4.7

		100.0	%		92.8

Cash, other assets and liabilities, net					7.2

					100.0	%

See Notes to Financial Statements.

Longleaf Partners Funds

STATEMENTS OF ASSETS AND LIABILITIES

at December 31, 2006


			Partners		Small-Cap		International
			Fund		Fund		Fund

Assets:
Investments:
	Affiliated securities, at market value (cost $842,484,145, $841,845,310 and $0, respectively) (Note 2 and 7)		$	1,722,589,048	$	1,162,939,735	$	–
	Other securities, at market value (cost $6,726,228,047, $1,907,491,952 and $2,262,580,398, respectively) (Note 2)			9,051,733,218		2,324,731,754		3,267,621,292

		Total Investments		10,774,322,266		3,487,671,489		3,267,621,292
Cash				562		166		350
Receivable for:
	Fund shares sold			24,231,068		2,092,504		1,774,908
	Dividends and interest			9,854,582		2,182,728		1,487,197
	Securities sold			70,839,618		3,536,007		38,747,281
	Forward currency contracts (Note 2)			9,675,157		–		8,465,746
	Foreign tax reclaims			81,247		–		–
Prepaid assets				178,570		70,351		67,693

		Total Assets		10,889,183,070		3,495,553,245		3,318,164,467

Liabilities:
Payable for:
	Securities purchased			–		44,195,939		44,448,436
	Fund shares redeemed			8,869,613		1,259,098		14,647,907
	Investment counsel fee (Note 3)			7,055,398		2,297,856		3,998,314
	Administration fee (Note 4)			929,396		295,057		277,399
Other accrued expenses				734,416		220,670		254,498

		Total Liabilities		17,588,823		48,268,620		63,626,554

			$	10,871,594,247	$	3,447,284,625	$	3,254,537,913

Net Assets:
Net assets consist of:
	Paid-in capital		$	7,597,616,285	$	2,602,918,513	$	2,158,723,521
	Undistributed net investment income			390,177		–		137,704
	Accumulated net realized gain on investments and foreign currency			58,297,525		106,031,885		82,170,145
	Unrealized gain on investments and foreign currency			3,215,290,260		738,334,227		1,013,506,543

		Net Assets	$	10,871,594,247	$	3,447,284,625	$	3,254,537,913

Net asset value per share				$34.86		$30.12		$18.91

Fund shares issued and outstanding				311,836,665		114,450,547		172,081,690

See Notes to Financial Statements.

Longleaf Partners Funds

STATEMENTS OF OPERATIONS

for the year ended December 31, 2006


				Partners			Small-Cap			International
				Fund			Fund			Fund

Investment Income:
Income:
	Dividends from non-affiliates (net of foreign tax withheld of $4,734,894, $388,128 and $3,698,987, respectively)			$	90,861,473		$	16,537,847		$	42,243,326
	Dividends from affiliates (net of foreign tax withheld of $283,680, $0, and $0 respectively) (Note 7)				5,964,990			16,903,171			–
	Interest				33,558,586			52,604,048			9,869,122

			Total income		130,385,049			86,045,066			52,112,448

Expenses:
	Investment counsel fee (Note 3)				73,343,498			24,110,700			44,680,393
	Administration fee (Note 4)				9,645,800			3,081,427			3,074,431
	Transfer agent fees and expenses				1,983,849			586,658			633,667
	Custodian fees and expenses				561,001			55,797			502,994
	Prospectus and shareholder reports				641,522			141,983			153,921
	Trustees’ fees and expenses				292,665			152,665			152,665
	Registration fees				174,057			80,677			57,554
	Professional fees				72,103			86,978			76,103
	Other				248,864			104,281			99,888

			Total expenses		86,963,359			28,401,166			49,431,616

			Net investment income		43,421,690			57,643,900			2,680,832

Realized and unrealized gain:
Net realized gain(loss):
	Non-affiliated securities				722,586,329			323,099,595			244,459,947
	Affiliated securities (Note 7)				–			33,672,809			–
	Forward currency contracts				(1,943,058	)		(8,813,560	)		4,043,002
	Foreign currency transactions				14,035			29,957			147,482

		Net gain			720,657,306			347,988,801			248,650,431

Change in unrealized appreciation (depreciation):
	Securities				1,140,423,644			233,682,614			240,401,949
	Other assets, liabilities and forwards				(2,972,635	)		2,119,394			(5,667,124	)

		Change in net unrealized appreciation			1,137,451,009			235,802,008			234,734,825

		Net realized and unrealized gain			1,858,108,315			583,790,809			483,385,256

Net increase in net assets resulting from operations				$	1,901,530,005		$	641,434,709		$	486,066,088

See Notes to Financial Statements.

Longleaf Partners Funds

STATEMENTS OF CHANGES IN NET ASSETS


			Partners Fund

			Year ended December 31,

			2006			2005

Operations:
	Net investment income(loss)		$	43,421,690		$	84,075,903
	Net realized gain from investments and foreign currency transactions			720,657,306			243,340,209
	Net change in unrealized appreciation (depreciation) of securities, other assets, liabilities and forwards			1,137,451,009			(18,286,831	)

		Net increase in net assets resulting from operations		1,901,530,005			309,129,281

Distributions to shareholders:
	From net investment income			(44,536,241	)		(81,831,726	)
	From net realized gain on investments			(755,953,511	)		(325,057,284	)

		Net decrease in net assets resulting from distributions		(800,489,752	)		(406,889,010	)

Capital share transactions (Note 6):
	Net proceeds from sale of shares			1,396,022,350			928,952,979
	Net asset value of shares issued to shareholders for reinvestment of shareholder distributions			730,065,307			370,526,435
	Cost of shares redeemed			(1,134,738,762	)		(1,421,979,891	)

		Net increase(decrease) in net assets from fund share transactions		991,348,895			(122,500,477	)

		Total increase(decrease) in net assets		2,092,389,148			(220,260,206	)
Net assets:
	Beginning of year			8,779,205,099			8,999,465,305

	End of year		$	10,871,594,247		$	8,779,205,099

	Undistributed net investment income (loss) included in net assets at end of period			$390,177			$1,490,693

See Notes to Financial Statements.

Longleaf Partners Funds

STATEMENTS OF CHANGES IN NET ASSETS


Small-Cap Fund						International Fund

Year ended December 31,						Year ended December 31,

2006			2005			2006			2005

$	57,643,900		$	58,829,578		$	2,680,832		$	(1,317,734	)
	347,988,801			243,426,514			248,650,431			210,717,920
	235,802,008			(28,734,689	)		234,734,825			115,480,390

	641,434,709			273,521,403			486,066,088			324,880,576

	(58,705,003	)		(58,057,866	)		(2,515,258	)		–
	(251,956,686	)		(450,808,249	)		(221,996,422	)		(30,392,470	)

	(310,661,689	)		(508,866,115	)		(224,511,680	)		(30,392,470	)

	391,956,726			385,120,467			458,350,467			405,945,388
	283,662,236			467,477,965			206,854,594			27,692,238
	(371,649,902	)		(478,553,991	)		(552,951,103	)		(427,030,964	)

	303,969,060			374,044,441			112,253,958			6,606,662

	634,742,080			138,699,729			373,808,366			301,094,768
	2,812,542,545			2,673,842,816			2,880,729,547			2,579,634,779

$	3,447,284,625		$	2,812,542,545		$	3,254,537,913		$	2,880,729,547

	$ –			$1,031,145			$137,704			$(175,352	)

See Notes to Financial Statements.

Longleaf Partners Funds

STATEMENTS OF CHANGES IN NET ASSETS

Longleaf Partners Funds

NOTES TO FINANCIAL STATEMENTS

Note 1. Organization

The Longleaf Partners Fund, Longleaf Partners Small-Cap Fund, and Longleaf Partners International Fund (the “Funds”) are non-diversified and each is a series of Longleaf Partners Funds Trust, a Massachusetts business trust, which is registered as an open-end management investment company under the Investment Company Act of 1940, as amended.

Note 2. Significant Accounting Policies

Management Estimates

The accompanying financial statements are prepared in accordance with accounting principles generally accepted in the United States of America; these principles may require the use of estimates by Fund management. Actual results could differ from those estimates.

Security Valuation

Portfolio securities listed or traded on a securities exchange (U.S. or foreign), on the NASDAQ national market, or any representative quotation system providing same day publication of actual prices, are valued at the last sale price. If there are no transactions in the security that day, securities are valued at the midpoint between the closing bid and ask prices or, if there are no such prices, the prior day’s close.

In the case of bonds and other fixed income securities, valuations may be furnished by a pricing service which takes into account factors in addition to quoted prices (such as trading characteristics, yield, quality, coupon rate, maturity, type of issue, and other market data relating to the priced security or other similar securities) where taking such factors into account would lead to a more accurate reflection of the fair market value of such securities.

When market quotations are not readily available, valuations of portfolio securities may be determined in accordance with procedures established by and under the general supervision of the Funds’ Trustees. In determining fair value, the Board considers all relevant qualitative and quantitative information available including news regarding significant market or security specific events. The Board may also utilize a service provided by an independent third party to assist in fair valuation of certain securities. These factors are subject to change over time and are reviewed periodically. Because the utilization of fair value depends on market activity, the frequency with which fair valuation may be used cannot be predicted. Estimated values may differ from the values that would have been used had a ready market for the investment existed.

Repurchase agreements are valued at cost which, combined with accrued interest, approximates market value. Short-term U.S. Government obligations are valued at amortized cost which approximates current market value.

The Funds determine net asset values (“NAVs”) once a day, at the close of regular trading on the New York Stock Exchange (usually at 4:00 p.m. Eastern time) on days the Exchange is open for business. The Exchange is closed for specified national holidays and on weekends. Foreign securities are generally priced at the latest market close in the foreign market, which may be at different times or days than the close of the New York Stock Exchange. If events occur which could materially affect the NAV between the close of the foreign market and normal pricing at the close of the New York Stock Exchange, foreign securities may be fair valued as determined by the Board of Trustees, consistent with any regulatory guidelines.

Accounting for Investments

For financial reporting purposes, the Funds record security transactions on trade date. Realized gains and losses on security transactions are determined using the specific identification method. Dividend income is recognized on the ex-dividend date, except that certain dividends from foreign securities are recorded as soon after the ex-dividend date as the Fund is able to obtain information on the dividend. Interest income and Fund expenses are recognized on an accrual basis.

Distributions to Shareholders

Dividends and distributions to shareholders are recorded on the ex-dividend date.

Federal Income Taxes

The Funds’ policy is to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distribute substantially all taxable income to shareholders. Accordingly, no federal income tax provision is required. The Funds intend to make any required distributions to avoid the application of a 4% nondeductible excise tax. Distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. Reclassifications are made within the Funds’ capital accounts to reflect income and gains available for distribution under income tax regulations.

Foreign Currency Translations

The books and records of the Funds are maintained in U.S. dollars. Securities denominated in currencies other than U.S. dollars are subject to changes in value due to fluctuations in exchange rates. Purchases and sales of securities and income and expenses are translated into U.S. dollars at the prevailing exchange rate on the respective date of each transaction. The market values of investment securities, assets and liabilities are translated into U.S. dollars daily.

The Funds do not isolate the portion of net realized and unrealized gains or losses in equity security investments which are attributable to changes in foreign exchange rates. Accordingly, the impact of such changes is included in the realized and unrealized gains or losses on the underlying equity securities.

Forward Currency Contracts

Forward currency contracts are commitments to purchase or sell a foreign currency at a future maturity date. The resulting obligation is marked-to-market daily using foreign currency exchange rates supplied by an independent pricing service. An unrealized gain or loss is recorded for the difference between the contract opening value and its current value. When a contract is closed or delivery is taken, this gain or loss is realized. For federal tax purposes, gain or loss on open forward contracts are treated as realized and are subject to distribution at our excise tax year-end date.

Risk of Forward Currency Contracts

The Funds generally use forward currency contracts for hedging purposes to offset currency exposure in portfolio holdings. Each Fund may seek to hedge foreign currency exposure to the full extent of its investment in foreign securities, but there is no requirement that all foreign securities be hedged. Forward contracts may reduce the potential gain from a positive change in the relationship between the U.S. dollar and foreign currencies or, considered separately, may produce a loss. Where a liquid secondary market for forwards does not exist, the Funds may not be able to close their positions and in such an event, the loss is theoretically unlimited.

Repurchase Agreements

The Funds may engage in repurchase agreement transactions. The Funds’ custodian bank sells U.S. government or agency securities to each Fund under agreements to repurchase these securities at a stated repurchase price including interest for the term of the agreement, which is usually overnight or over a weekend. Each Fund, through its custodian, receives delivery of the underlying U.S. government or agency securities as collateral, whose market value is required to be at least equal to the repurchase price. If the custodian becomes bankrupt, the Fund might be delayed, or may incur costs or possible losses of principal and income, in selling the collateral.

New Accounting Pronouncements

On July 13, 2006, the Financial Accounting Standards Board (“FASB”) released FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely -than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely -than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the implications of FIN 48. The standard is not expected to materially impact the Funds’ financial statements.

On September 15, 2006, the FASB released Statement of Financial Accounting Standards No. 157 (“FAS 157”) Fair Value Measurements which provides enhanced guidance for using fair value to measure assets and liabilities. The standard requires companies to provide expanded information about the assets and liabilities measured at fair value and the potential effect of these fair valuations on an entity’s financial performance. The standard does not expand the use of fair value in any new circumstances, but provides clarification on acceptable fair valuation methods and applications. Adoption of FAS 157 is required for fiscal years beginning after November 15, 2007. The standard is not expected to materially impact the Funds’ financial statements.

Note 3. Investment Counsel Agreement

Southeastern Asset Management, Inc. (“Southeastern”) serves as Investment Counsel to the Funds and receives annual compensation, computed daily and paid monthly, in accordance with the following schedule for the Partners Fund and Small-Cap Fund:


First $400 million of average daily net assets	1.00	%
In excess of $400 million	.75	%

For the Partners and Small-Cap Funds, Southeastern has agreed to reduce its fees on a pro rata basis to the extent that each Fund’s normal annual operating expenses (excluding taxes, interest, brokerage fees, and extraordinary expenses) exceed 1.5% of average annual net assets. No such reductions were necessary for the current year.

The International Fund fee is calculated in accordance with the following schedule:


First $2.5 billion of average daily net assets	1.50	%
In excess of $2.5 billion	1.25	%

For this Fund, Southeastern has agreed to reduce its fees on a pro rata basis to the extent that the Fund’s normal annual operating expenses (excluding taxes, interest, brokerage fees, and extraordinary expenses) exceed 1.75% of average annual net assets. No reduction was necessary for the current year.

Note 4. Fund Administrator

Southeastern also serves as the Fund Administrator and in this capacity is responsible for managing, performing or supervising the administrative and business operations of the Funds. Functions include the preparation of all registration statements, prospectuses, proxy statements, daily valuation of the portfolios and calculation of daily net asset values per share. The Funds pay a fee as compensation for these services, accrued daily and paid monthly, of 0.10% per annum of average daily net assets.

Note 5. Investment Transactions

Purchases and sales of equity securities and corporate bonds for the period (excluding short-term obligations) are summarized below:


	Purchases		Sales

Partners Fund	$	1,795,961,775	$	2,133,584,917
Small-Cap Fund		965,712,410		1,011,234,931
International Fund		692,777,449		698,810,092

Note 6. Shares of Beneficial Interest

Each Fund is authorized to issue unlimited shares of beneficial interest with no par value. Transactions in shares of beneficial interest were as follows:


	Year ended December 31, 2006

	Partners			Small-Cap			International
	Fund			Fund			Fund

Shares sold		41,199,929			13,734,861			25,195,194
Reinvestment of shareholder distributions		21,037,467			9,437,163			11,336,092
Shares redeemed		(33,891,867	)		(12,797,782	)		(30,402,886	)

		28,345,529			10,374,242			6,128,400


	Year ended December 31, 2005

	Partners			Small-Cap			International
	Fund			Fund			Fund

Shares sold		29,716,877			13,109,002			25,083,276
Reinvestment of shareholder distributions		11,980,119			17,551,992			1,647,367
Shares redeemed		(45,564,127	)		(16,170,526	)		(26,645,660	)

		(3,867,131	)		14,490,468			84,983

Note 7. Affiliated Issuer

Under Section 2(a)(3) of the Investment Company Act of 1940, a portfolio company is defined as “affiliated” if a Fund owns five percent or more of its voting stock. Each Fund held at least five percent of the outstanding voting stock of the following companies during the year ended December 31, 2006:


					Market Value

		Shares ^(a) at			December 31,
		December 31,
		2006			2006		2005

Partners Fund
	Level 3 Communications, Inc.*		81,029,000		$	453,762,400	$	232,553,230
	Level 3 Communications, Inc. 10% Convertible Senior Notes due 5-1-11 (Note 8)		222,079,000	^(b)		403,628,583		235,102,601
	The NipponKoa Insurance Company, Ltd.		63,701,000			516,545,229		510,969,144
	Pioneer Natural Resources Company		8,784,400			348,652,836		450,376,188

						1,722,589,048		1,429,001,163

Small-Cap Fund
	Deltic Timber Corporation		–			–		55,075,320
	Hilb Rogal & Hobbs Company		3,526,400			148,531,968		135,801,664
	IHOP Corp.		2,978,100			156,945,870		139,702,671
	Jacuzzi Brands, Inc.*		14,609,800			181,599,814		122,722,320
	Potlatch Corporation		3,702,022			162,222,604		28,140,960
	Ruddick Corporation		4,823,500			133,852,125		86,603,216
	Service Corporation International		16,719,400			171,373,850		125,041,934
	Texas Industries, Inc.		3,244,800			208,413,504		–

					$	1,162,939,735	$	693,088,085

Purchases, sales and income for these affiliates for the year ended December 31, 2006 were as follows:


						Dividend
						or Interest
		Purchases		Sales		Income ^(c)

Partners Fund
	Level 3 Communications, Inc.*	$	–	$	–	$	–
	Level 3 Communications, Inc. 10% Convertible Senior Notes due 5-1-11 (Note 8)		–		–		22,207,900	^(d)
	The NipponKoa Insurance Company, Ltd.		–		–		3,768,890
	Pioneer Natural Resources Company		–		–		2,196,100

		$	–	$	–	$	28,172,890

Small-Cap Fund
	Deltic Timber Corporation	$	–	$	54,080,423	$	–
	Hilb Rogal & Hobbs Company		–		–		1,675,040
	IHOP Corp		–		–		2,978,100
	Jacuzzi Brands, Inc.*		–		–		–
	Potlatch Corporation		118,395,793		–		8,362,799
	Ruddick Corporation		16,966,411		–		1,974,874
	Service Corporation International		15,569,232		5,203,376		1,668,998
	Texas Industries, Inc.		149,945,938		–		243,360

		$	300,877,374	$	59,283,799	$	16,903,171

* Non-income producing


^(a)	Common stock unless otherwise noted.
^(b)	Principal amount.
^(c)	Dividend income unless otherwise noted.
^(d)	Interest income.

Note 8. Collateral

Securities with the following aggregate value were segregated to collateralize forward currency contracts at December 31, 2006:


Partners Fund	$	1,007,372,874
International Fund		948,384,270

Note 9. Related Ownership

At December 31, 2006, officers, employees of Southeastern and their families, Fund trustees, the Southeastern retirement plan and other affiliates owned more than 5% of the following Funds:


	Shares Owned		Percent of Fund

Small-Cap Fund		8,708,362		7.6	%
International Fund		12,250,598		7.1

Note 10. Federal Income Taxes

Required fund distributions are based on income and capital gain amounts determined in accordance with federal income tax regulations, which differ from net investment income and realized gains recognized for financial reporting purposes. Accordingly, the character of distributions and composition of net assets for tax purposes differ from those reflected in the accompanying financial statements.

Distributions were subject to tax as follows:


	Year ended December 31, 2006

	Partners		Small-Cap		International

Long-term capital gains	$	735,213,067	$	243,760,334	$	216,431,625
Ordinary income		65,276,685		66,901,355		8,080,055

	$	800,489,752	$	310,661,689	$	224,511,680


	Year ended December 31, 2005

	Partners		Small-Cap		International

Long-term capital gains	$	275,472,275	$	450,808,249	$	30,392,470
Ordinary income		131,416,735		58,057,866		–

	$	406,889,010	$	508,866,115	$	30,392,470

The tax-basis components of net assets at December 31, 2006 were as follows:


	Partners			Small-Cap			International

Unrealized appreciation	$	3,656,249,568		$	738,334,227		$	1,043,781,171
Unrealized depreciation		(471,595,001	)		(319,969	)		(38,740,374	)

Net unrealized appreciation		3,184,654,567			738,014,258			1,005,040,797
Undistributed long-term capital gains		87,438,107			105,777,223			86,966,387
Undistributed ordinary income		1,885,288			574,631			3,807,208
Paid-in capital		7,597,616,285			2,602,918,513			2,158,723,521

	$	10,871,594,247		$	3,447,284,625		$	3,254,537,913

The following permanent reclassifications were made between capital accounts to reflect the tax character of foreign currency transactions. These reclassifications did not affect results of operations or net assets.


	Partners			Small-Cap			International

Undistributed net investment income	$	14,035		$	29,958		$	147,482
Accumulated net realized gain on investments and foreign currency		(14,035	)		(29,958	)		(147,482	)

Longleaf Partners Funds

FINANCIAL HIGHLIGHTS

The presentation is for a share outstanding throughout each period.


							Net
							Gains
		Net					(Losses) on									Distri-
		Asset		Net			Securities			Total			Dividends			butions
		Value		Investment			Realized			From			from Net			from
		Beginning		Income			and			Investment			Investment			Capital
		of Period		(Loss)			Unrealized			Operations			Income			Gains

*Partners Fund*
Year ended December 31,
	2006	$	30.97	$	.14		$	6.53		$	6.67		$	(.14	)	$	(2.64	)
	2005		31.32		.29			.83			1.12			(.29	)		(1.18	)
	2004		29.98		.07			2.05			2.12			(.15	)		(.63	)
	2003		22.24		.08			7.66			7.74			–			–
	2002		24.51		.04			(2.08	)		(2.04	)		(.04	)		(.14	)
*Small-Cap Fund*
Year ended December 31,
	2006		27.02		.50			5.49			5.99			(.56	)		(2.33	)
	2005		29.85		.58			2.43			3.01			(.57	)		(5.27	)
	2004		28.81		.42			3.75			4.17			(.43	)		(2.70	)
	2003		20.33		.45			8.47			8.92			(.44	)		–
	2002		21.68		.52			(1.32	)		(0.80	)		(.53	)		(.02	)
*International Fund*
Year ended December 31,
	2006		17.36		.02			2.89			2.91			(.01	)		(1.35	)
	2005		15.55		(.01	)		2.01			2.00			–			(.19	)
	2004		14.11		(.08	)		1.52			1.44			–			–
	2003		9.97		(.07	)		4.21			4.14			–			–
	2002		12.34		(.06	)		(1.99	)		(2.05	)		–			(.32	)


^(a)	Total return reflects the rate that an investor would have earned on investment in the Fund during each period, assuming reinvestment of all distributions.


^(b)	Expenses presented include dividend expense and brokerage fees for short-sales. The operating expense ratio was 1.69% (Note 3).

Longleaf Partners Funds

FINANCIAL HIGHLIGHTS


																Ratio of
													Ratio of			Net
						Net							Expenses			Investment
						Asset					Net Assets		to			Income
Return			Total			Value					End of		Average			(Loss) to			Portfolio
of			Distri-			End of		Total			Period		Net			Average			Turnover
Capital			butions			Period		Return ^(a)			(thousands)		Assets			Net Assets			Rate

$	–		$	(2.78	)	$	34.86		21.63	%	$	10,871,594		.90	%		.45	%		18.98	%
	–			(1.47	)		30.97		3.62			8,779,205		.91			.95			6.64
	–			(.78	)		31.32		7.14			8,999,465		.90			.28			13.38
	–			–			29.98		34.80			7,668,968		.91			.32			7.37
	(.05	)		(.23	)		22.24		(8.34	)		4,787,662		.91			.17			19.57
	–			(2.89	)		30.12		22.33			3,447,285		.92			1.87			34.45
	–			(5.84	)		27.02		10.75			2,812,543		.93			2.21			17.28
	–			(3.13	)		29.85		14.78			2,673,843		.93			1.52			31.04
	–			(.44	)		28.81		43.85			2,365,085		.95			1.89			4.44
	–			(.55	)		20.33		(3.74	)		1,677,194		.95			2.43			16.91
	–			(1.36	)		18.91		17.07			3,254,538		1.61			.09			24.30
	–			(.19	)		17.36		12.88			2,880,730		1.64			(.05	)		16.93
	–			–			15.55		10.21			2,579,635		1.66			(.57	)		18.86
	–			–			14.11		41.52			1,923,581		1.68			(.68	)		10.18
	–			(.32	)		9.97		(16.51	)		1,086,714		1.80	^(b)		(.68	)		15.86

Appendix A

SOUTHEASTERN ASSET MANAGEMENT, INC.

LONGLEAF PARTNERS FUNDS

PROXY VOTING POLICIES AND PROCEDURES

INTRODUCTION

As an investment adviser registered with the Securities and Exchange Commission under Section 203 of the Investment Advisers Act of 1940 (the “Advisers Act”), Southeastern Asset Management, Inc. (“Southeastern”) must adopt and implement written policies and procedures that are reasonably designed to ensure that Southeastern votes client securities in the best interest of clients. The proxy voting policies and procedures set forth herein (the “Proxy Policy”) are an update to policies and procedures followed by Southeastern for many years and have been revised to comply with the terms of Rule 206(4)-6 under the Advisers Act. The Proxy Policy sets forth the general principles to be applied in voting proxies of companies held in client portfolios, and is intended for distribution to all clients for informational and disclosure purposes.

In addition, Southeastern has been granted discretionary authority to manage the assets of the separate series of Longleaf Partners Funds Trust (“Longleaf”), an open-end management investment company registered with the SEC under the Investment Company Act of 1940 (the “40 Act”). Pursuant to its discretionary authority to manage Longleaf’s assets, and under the supervision of the Longleaf Boards of Trustees, Southeastern votes proxies of companies held in Longleaf’s portfolios. Effective August 1, 2003, the Boards of Trustees of Longleaf’s three series have authorized Southeastern to vote securities in the Longleaf Partners Funds according to this updated Proxy Policy, and instructed Southeastern as Administrator of the Funds to implement for Longleaf the procedures necessary to comply with proxy rules applicable to investment companies under the 40 Act. Accordingly, Southeastern will make disclosure of Longleaf’s proxy voting record on Form N-PX, when and as required by Investment Company Act Rule 30b1-4, and will disclose in Longleaf’s public filings information regarding the proxy policies applicable to Longleaf, as required by Items 13(f), 22(b)7, and 22(c)5 of Form N-1A.

INFORMATION AVAILABLE TO CLIENTS AND

LONGLEAF SHAREHOLDERS

In order to comply with Adviser’s Act Rule 206(4)-6(c), Southeastern will describe these proxy voting policies and procedures in Part II of its Form ADV, an updated copy of which will be provided to all existing private account clients and all new clients prior to their conducting business with Southeastern. Upon request, Southeastern will provide any private account client with a copy of these proxy voting policies and procedures as well as complete information on how Southeastern voted proxies of companies in the client’s portfolio.

Beginning on September 15, 2003, shareholders of the Longleaf Partners Funds may find a description of this Proxy Policy in the Funds’ Statement of Additional Information (SAI). The SAI may be obtained free of charge from the Funds’ website, www.longleafpartners.com, by calling (800) 445-9469 or on the Securities and Exchange Commission website, www.sec.gov . Beginning August 31, 2004, information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 will be available on the Funds’ website, www.longleafpartners.com , by calling (800) 445-9469, or on the Funds’ Form N-PX available on the Securities and Exchange Commission website, www.sec.gov .

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II.

STATEMENT OF GENERAL POLICIES AFFECTING PROXY VOTING

Proposal Must Benefit Shareholders. One of the principles used by Southeastern in selecting stocks for investment is the presence of shareholder-oriented management. This is defined as management which takes actions and supports policies designed to increase the value of the company’s shares and thereby enhance shareholder wealth. As a result, all proposals submitted for shareholder approval are analyzed in light of their long-term benefit to current shareholders.

Management Must Be Responsive. Southeastern’s portfolio management group is active in meeting with top management of portfolio companies and in discussing its views on policies or actions which could enhance shareholder value. To facilitate such discussions, Southeastern may convert a Schedule 13G filing (which is used by passive institutional investors) to a Schedule 13D filing in order to be more active in encouraging management of a company to take particular steps which could further enhance shareholder value. Whether management of a company will consider reasonable shareholder suggestions is a factor to be taken into consideration in proxy voting.

General Policies With Respect to Routine Proposals. Under the statutes of its state of incorporation, a company usually must hold meetings of shareholders annually for the purpose of electing or re-electing directors. In addition, the Securities and Exchange Commission requires that publicly held corporations ratify the selection of the independent auditing firm each year if an annual meeting of shareholders is being held. In many situations, these two matters are the only matters submitted to shareholders for a vote at the company’s Annual Meeting of Shareholders and are therefore viewed by the investment community as being routine in nature. Southeastern’s general policy is to support the Board’s recommendations to vote in favor of these annually recurring matters, particularly where the Board has a record of supporting shareholder rights and is otherwise shareholder oriented.

Exceptions to General Policy. In some circumstances, Southeastern may oppose the routine re-election of a Board of Directors. As a technical matter, a shareholder opposed to re-election must express such opposition by voting the proxy for purposes of establishing the presence of a quorum, but “withholding” the vote for a particular director or the entire slate of directors. Using this procedure, Southeastern may withhold the vote for re-election of the Board in circumstances such as the following:


	•	A Board of Directors may have adopted policies or taken actions during the prior year which are within its discretionary authority and, as such, are not matters which must be submitted to shareholders for approval. If such policies or actions have the effect of limiting or diminishing shareholder value, Southeastern may voice its opposition to the Board’s positions by withholding the votes for re-election of the Board.

	•	There may be situations where top management of a company, after having discussions with Southeastern’s portfolio management group and perhaps with other institutional shareholders, may have failed or refused to adopt policies or take actions which would enhance shareholder value. Depending on the circumstances, Southeastern may also exercise its proxy voting authority by withholding an affirmative vote for re-election of the Board.

General Policies With Respect to Special Management Proposals. In addition to election or re-election of directors and ratification of the selection of auditors, there may be additional, specific management

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proposals submitted to shareholders for approval. Southeastern’s general policy is to vote in favor of specific or non-recurring proposals submitted where such proposals are reasonable and appear to be in the best interest of shareholders.

Exceptions to General Policy. There may be situations where a Board of Directors has submitted to shareholders for approval various amendments to the corporate charter or other specific proposals which have the effect of restricting shareholder rights or otherwise diminishing shareholder value. Southeastern may decide to oppose these specific proposals and, as an integral part of such opposition, may also oppose the re-election of the Board of Directors. In the alternative, Southeastern may vote against the special proposals but may vote in favor of re-election of the Board where the Board is otherwise shareholder-oriented and the special proposals do not materially harm shareholder rights.

General Policies With Respect to Shareholder Proposals. There may be situations when a company’s proxy statement contains minority shareholder proposals, which might include eliminating staggered terms for members of boards of directors, eliminating other anti-takeover defenses, adopting cumulative voting rights, or establishing operating rules or policies which are of primary interest to special interest groups. Southeastern votes these proposals on a case-by case basis. There may also be proposals which attempt to further the political or social views of its proponents. Southeastern’s primary objective in voting proxies is to support corporate operating policies which provide the maximum financial benefit to shareholders. Because Southeastern votes on behalf of numerous clients with varying viewpoints, Southeastern is not in a position to advance the social or political aims of others. In Southeastern’s opinion, if a company’s management has demonstrated that it is shareholder-oriented by adopting operating policies and procedures which are beneficial to shareholders, Southeastern may oppose minority shareholder proposals, particularly when the adoption of such proposals could inhibit normal operations or might be disruptive. Southeastern believes that supporting shareholder-oriented management in this manner is acting in the best interest of all Southeastern’s clients.

III.

DISCUSSION OF SPECIFIC CORPORATE POLICIES AND PROPOSALS

The determination as to whether a particular policy or shareholder proposal is likely to enhance or diminish shareholder wealth may be relatively clear or, in the alternative, could be subjective. Below is a list of specific issues which may be presented for a vote and how Southeastern is likely to treat such matters. Because proxy issues and the circumstances of individual companies are so varied, there may be instances when Southeastern does not vote in strict adherence to the guidelines set forth below. In addition, the discussion is not exhaustive and does not include all potential voting issues. To the extent issues are not covered by this Proxy Policy, or in situations where Southeastern does not vote as described below, Southeastern will be governed by what it considers to be in the best interests of its clients.


	•	“One share, one vote.”

Explanation. Southeastern believes that good corporate governance usually requires that all shareholders have an equal voice in electing a Board of Directors and in voting on other proposals submitted to shareholders. Southeastern generally would oppose proposals to create separate classes of shares with disproportionate voting rights which may be designed primarily to empower shareholders affiliated with existing management at the expense of non-management affiliated shareholders. Recognizing that certain corporate finance proposals may require that new shareholders receive stronger voting rights or more

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beneficial conversion rights in consideration for the price per share of a new offering, Southeastern would give consideration to supporting reasonable disproportionate voting or conversion rights in situations where the proposal would raise necessary capital without undue dilution of the voting or ownership rights of existing shareholders.


	•	Reasonable Stock Option Plans and Reasonable Cash Incentives.

Explanation. Southeastern believes that management of a portfolio company will tend to make decisions and support policies which enhance shareholder wealth if management is a significant owner of the company. In addition, management will tend to be shareholder oriented if a primary method of ongoing management compensation is through the granting of options for the purchase of additional shares rather than through the award of substantial cash bonuses. Recognizing that compensation derived solely from stock options could be dilutive over time, Southeastern believes that there should be an appropriate balance between stock option grants and cash compensation, and that both should be related to the achievement of overall corporate profitability. Southeastern will therefore favor the adoption or continuation of reasonable, non super-dilutive stock option plans and will support the election of directors who couple granting of stock options and annual cash compensation with improved corporate profitability.


	•	Super-dilutive Stock Option Plans.

Explanation. Stock option plans with excessively large authorizations to issue additional shares at the discretion of the Board of Directors can be harmful to existing shareholders in two respects. First, such plans may be used to increase the ownership position of current management on terms and conditions not available to non-management affiliated minority shareholders; second, such plans may be used to ward off a hostile takeover by issuing additional shares to current management on a basis which is more favorable than is available to other shareholders. The appropriate number of unissued shares allocated to a stock option plan as a percentage of outstanding shares may vary and can be discretionary, depending on the circumstances. Southeastern generally will oppose the adoption of stock option plans providing for unusually large share authorizations which appear to exceed the needs for reasonable executive compensation.


	•	Reasonable Employment Contracts and “Golden Parachutes.”

Explanation. To retain effective top management teams, a company needs to provide protection against the fear of preemptory dismissal should a hostile takeover attempt be successful. Although Southeastern generally opposes structural anti-takeover measurers, it will support a Board of Directors which enters into employment contracts for limited, rolling time periods (such as 3 years), and provides reasonable “parachutes” or termination compensation for an effective top management group.


	•	Share Repurchase Programs.

Explanation. During periods when a portfolio company’s shares are materially underpriced, the best allocation of capital may be the repurchase of shares rather than expansion of the company’s businesses or an increase in corporate dividends. Shrinkage of the company’s common capitalization can have the effect of substantially increasing shareholder wealth for those shareholders able to continue their investment. Southeastern will accordingly support Boards of Directors entering into share repurchase programs during periods when common shares are materially underpriced.

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	•	Cumulative Voting and Pre-emptive Rights.

Explanation. Cumulative voting enables minority shareholders, including an investment adviser casting votes for its clients, to aggregate the number of votes available for all directors and assign these votes to a single director. Thus, some minority shareholders might own sufficient shares to be able to elect a designated representative to the Board, and thereby achieve a larger voice in the corporate management process. The presence of pre-emptive rights preserves a right of first refusal for existing shareholders to acquire newly issued shares on the same terms as the shares might be offered to a majority or control group, thereby enabling minority shareholders to maintain the same pro-rata percentage of voting control.

The charters of most corporations formed in recent years do not contain provisions for cumulative voting or pre-emptive rights. Because these provisions protect the rights of minority shareholders, Southeastern would usually oppose a proposal for elimination of such rights in situations where they presently exist.


	•	“Blank Check” Preference Stock.

Explanation. “Blank Check” preference stock allows a Board of Directors, without subsequent shareholder approval, to issue unlimited series of preference stock under terms and conditions determined wholly by the Board. Such terms and conditions may include preferential voting rights, dividends, and conversion rights which could be substantially dilutive for common shareholders. Such preference shares could also be issued by the Board to support questionable corporate financing proposals or as an anti-takeover measure. Because of the potential for dilution of common shareholders, Southeastern will generally oppose the adoption of “blank check” preference stock provisions.


	•	“Greenmail” Share Repurchases.

Explanation. Unlike normal share repurchase programs which are implemented when a company’s shares are materially underpriced, “greenmail” repurchases of outstanding shares are usually made at inflated share prices for the purpose of eliminating a potential acquirer. As a result, such “greenmail” payments usually have both the immediate and long-term effect of limiting rather than enhancing shareholder value and may interfere with natural market forces. Southeastern will generally oppose the re-election of Boards of Directors which engage in “greenmail” repurchases in circumstances which would not enhance long-term shareholder value.


	•	Structural Anti-takeover Defenses.

Explanation. In most situations, the adoption of anti-takeover defenses which become part of the corporation’s organizational structure have the effect of limiting natural market forces on the trading price of a company’s stock. Such structural or permanent provisions include the following: staggered terms for the Board of Directors, under which Board terms run for more than one year and less than all directors are elected each year; supermajority shareholder approval for merger or acquisition proposals not approved by the Board of Directors; and adoption of “poison pills” designed to damage the capital structure of either the acquiring or the acquired corporation in a non Board approved merger or takeover.

Southeastern generally will oppose the adoption of these types of structural anti-takeover defenses, and would generally favor their removal in corporate charters where they presently exist. There may be exceptions to this policy, however, if management has demonstrated that it pursues policies to create shareholder value and is otherwise shareholder-oriented.

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	•	Right to Call Meetings

Explanation. Southeastern generally opposes proposals seeking to limit the ability of shareholders to call special meetings and vote on issues outside of the company’s annual meeting. Limiting the forum in which shareholders are able to vote on proposals could adversely affect shareholder value


	•	Mergers, Acquisitions, Reorganizations, and other Transactions

Explanation. Shareholders may be faced with a number of different types of transactions, including acquisitions, mergers, reorganizations involving business combinations, liquidations and sale of all or substantially all of a company’s assets, that may require shareholder consent. Voting on such proposals involves considerations unique to each transaction, so Southeastern votes such matters on a case-by-case basis.

IV.

SOUTHEASTERN’S PROXY VOTING PROCEDURES

Monitoring for Proxies and Corporate Actions. Southeastern has implemented procedures designed to ensure that it receives the proxies and corporate actions for which it is responsible, and that these proxies and corporate actions are reconciled with the reported holdings of its clients as of the record date for voting, and then voted prior to applicable deadlines.

Regarding proxies, Southeastern has hired a third-party service provider to assist in monitoring for record and meeting dates of the holdings in Southeastern’s client portfolios. On a regular basis, Southeastern sends an updated “holdings” file to this administrator, which has undertaken to notify Southeastern of all record and meeting dates for these holdings. In addition, Southeastern maintains its own list of record and meeting dates for client holdings, as a back-up and “check” on this service provider. Upon notification of record and meeting dates, Southeastern’s Proxy Coordinator identifies all clients who hold the security as of the record date, and the number of shares held. It is the Proxy Coordinator’s job to ensure that voting decisions are made with respect to each client account and that such decisions are transmitted prior to applicable deadlines. Southeastern uses a proxy voting service to assist with implementation of Southeastern’s voting decisions for each of its client accounts.

It should be noted that if Southeastern or its clients enter into a securities lending arrangement with respect to securities in a client’s portfolio, Southeastern may not be able to vote proxies on those particular shares. In addition, with respect to foreign holdings, record and meeting dates may be announced with very little time to respond. In such circumstances, Southeastern makes its best effort to respond in a timely manner. In some foreign markets, shareholders who vote proxies are not able to trade in the company’s stock within a given period of time surrounding the meeting date. Southeastern coordinates voting such proxies with its trading activity, and in some cases may not vote such proxies where doing so would impair its trading flexibility. Southeastern may also refrain from voting where shares of a particular holding have been sold out of all client accounts prior to the meeting date. In summary, Southeastern may refrain from voting in situations where the cost of voting exceeds the expected benefit.

Regarding corporate transactions, information is available from a number of sources. Information usually comes first to the Southeastern portfolio management group and specifically to the particular co-manager or analyst primarily responsible for the portfolio holding. This information generally comes through press releases reported on electronic media services or in financial media such as The Wall Street Journal. In

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addition, Southeastern personnel routinely monitor news and events relating to portfolio holdings of clients, and accordingly learn of corporate actions which may require a response. Similarly, custodian banks receiving notification of corporate actions from issuers in turn notify Southeastern. Not all corporate actions require a response (such as dividend payments or stock splits), and Southeastern will not normally respond where the default action is the desired outcome. Other corporate actions which do require a response are handled in the same manner proxies are handled.

Decisions on Proxy Voting. Proxy Statements issued by portfolio companies are reviewed by the investment analyst assigned responsibility for the particular portfolio company. Proxies are voted in accordance with the general policies as described in Part II above. Any internal recommendation to consider voting in a manner contrary to the recommendations of the company’s Board of Directors is presented to Southeastern’s CEO or President for final decision before implementation. In addition, a conflict of interest review is performed with respect to each vote (see “Conflicts of Interest” below).

Attendance at Shareholders’ Meetings. A representative of Southeastern may attend shareholders meetings where there are special or unusual issues to be presented to shareholders. If Southeastern has determined to oppose management’s position, the representative may vote the shares of its clients in person rather than using the normal proxy voting procedures to return proxies to management.

Conflicts of Interest. Occasions may arise where Southeastern or one of its personnel could have a conflict of interest with respect to a particular proxy vote. For example, there may be occasions where Southeastern has invested client assets in a company for which Southeastern also provides investment management services, or one of Southeastern’s clients may have a material interest in the outcome of a vote. It is also possible that Southeastern’s personnel may have a personal conflict of interest with respect to a vote, such as familial relationship with company management.

Southeastern considers potential conflicts of interest with respect to each voting decision. Any individual participating in a voting decision who has a personal conflict of interest shall disclose that conflict to the Proxy Coordinator and the Proxy Conflict Committee for review, and shall otherwise remove himself or herself from the proxy voting process. In addition, personnel involved in voting decisions must consider any Southeastern conflict of interest and report such conflicts to the Proxy Coordinator and the Proxy Conflict Committee, which also separately considers conflicts of interest which may be applicable to a vote. Before the Proxy Coordinator can submit voting decisions for execution, a representative of the portfolio management team and two representatives of the Proxy Conflict Committee must initial Southeastern’s internal proxy form indicating that they are not aware of a conflict of interest.

In cases where a conflict of interest has been identified, Southeastern’s Proxy Conflict Committee will prepare a report prior to execution of a voting decision which contains the following:


	•	the nature of the conflict;

	•	an evaluation of the materiality of the conflict; and

	•	if the conflict is material, the procedures used to address the conflict.

Three out of four members of the Proxy Conflict Committee must approve the report. Such reports will be kept pursuant to the policies set forth under “Record Retention” below.

If a conflict is material, Southeastern will attempt to disclose the conflict to affected clients, including private account clients and/or the Longleaf Partners Funds’ Boards of Trustees, and either obtain consent to vote on a given voting occasion or vote in accordance with instructions from the client and/or Longleaf Board of

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Trustees. Where consent has been given for Southeastern to vote, it will treat a proxy vote as it would any other and vote according to the principles stated herein, with the governing principle being what is in the best interest of the company’s shareholders. If Southeastern is not able to reach affected clients in time to obtain consent, or obtaining consent is not otherwise feasible, Southeastern may vote in accord with guidance provided by a proxy service provider independent of Southeastern.

In evaluating the materiality of a conflict, Southeastern will consider a number of factors, including:


	•	whether Southeastern has been solicited by the person or entity creating the conflict;

	•	whether the size of Southeastern’s business relationship with the source of the conflict is material in light of Southeastern’s total business;

	•	whether Southeastern’s voting power or voting decision is material from the perspective of the source of the conflict;

	•	other factors which indicate Southeastern’s voting decision has not been impaired or tainted by the conflict.

If Southeastern concludes that the conflict is not material, the conflict of interest report will state the basis for this determination, and Southeastern will vote in the manner it deems in its clients’ best interest.

Record Retention. As required by Adviser’s Act Rule 204-2(c)(2), Southeastern maintains with respect to its clients:


	•	copies of its proxy policies and procedures;

	•	copies of proxy statements received regarding client securities (Southeastern will either keep a copy, rely on a copy obtained from the SEC’s EDGAR system, or will hire a third-party service provider to retain copies and provide them promptly upon request);

	•	a record of each vote cast on behalf of a client (Southeastern will either retain this record itself or hire a third-party service provider to make and retain such records and provide them promptly upon request);

	•	copies of documents created by Southeastern that are material to a voting decision or that memorialize the basis for the decision (including conflict of interest reports);

	•	copies of each written client request for information on how Southeastern voted on behalf of a client, and a copy of Southeastern’s written response to any written or oral client request for information on how Southeastern voted its proxy.

Adopted August 1, 2003

Amended December 18, 2006

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Investment Counsel

Southeastern Asset Management, Inc.

6410 Poplar Avenue, Suite 900

Memphis, TN 38119

(901) 761-2474

Transfer and Dividend Agent

PFPC Inc.

4400 Computer Drive

Westborough, MA 01581

For Information about your account,

call (800) 445-9469

Custodian

State Street Bank & Trust Company, Boston, MA

(LONGLEAF PARTNERS FUNDS (SM) LOGO)

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP

Baltimore, MD and Boston, MA

No person has been authorized to give any further information or make any representations other than those contained in the Prospectus or this Statement of Additional Information. If given or made, such other information or representations must not be relied upon as having been authorized by the Fund, its Investment Counsel, or its Administrator. This Prospectus does not constitute an offering in any state where such an offering may not be lawfully made.


	Longleaf
	Partners
	Funds ^®




Managed By:
Southeastern Asset
Management, Inc.
6410 Poplar Ave.
Suite 900
Memphis, TN 38119
(800) 445-9469
www.longleafpartners.com


	L ONGLEAF
	P ARTNERS
	F UNDS ^®

STATEMENT OF


	ADDITIONAL INFORMATION
	May 1, 2007


	LONGLEAF PARTNERS FUND

	LONGLEAF PARTNERS
	SMALL-CAP FUND

	LONGLEAF PARTNERS
	INTERNATIONAL FUND


	Managed by
	Southeastern Asset Management, Inc.
	6410 Poplar Avenue, Suite 900
	Memphis, TN 38119


	*TELEPHONE (800) 445-9469*
	*www.longleafpartners.com*

PART C. OTHER INFORMATION

Item 23. Exhibits

(a). Articles of Incorporation. Registrant is a Massachusetts business trust. Re-Stated Declaration of Trust; incorporated by reference from Post Effective Amendment No. 26, filed February 28, 2003.

(b). Re-Stated By-Laws; incorporated by reference from Post Effective Amendment No. 28, filed February 28, 2005.

(c). Instruments Defining Rights of Security Holders. Stock Certificate; Incorporated by reference from Post Effective Amendment No. 23, filed August 1, 2000 (Accession Number 0000950144-00-009321).

(d). Investment Advisory Contracts (with Southeastern Asset Management, Inc.)

(1) Longleaf Partners Fund and Longleaf Partners Small-Cap Fund; incorporated by reference from Post Effective Amendment No. 21, filed February 26, 1999 (Accession Number 0000950144-99-002256).

(2) Longleaf Partners International Fund; incorporated by reference from Post-Effective Amendment No. 20, filed August 10, 1998 (Accession Number 0000950144-98-009323), and Post-Effective Amendment No. 27, filed February 27, 2004.

(e). Underwriting Contracts. None; not applicable.

(f). Bonus or Profit Sharing Contracts. None; not applicable.

(g). Custodian Agreements. Custodian Agreement with State Street Bank and Trust Company; incorporated by reference from Post Effective Amendment No. 21, filed February 26, 1999 (Accession Number 0000950144-99-002256).

(h). Other Material Contracts.

(1). Fund Administration Agreement between Southeastern Asset Management, Inc. and Longleaf Partners Fund and Longleaf Partners Small-Cap Fund; incorporated by reference from Post Effective Amendment No. 21, filed February 26, 1999 (Accession Number 0000950144-99-002256).

(2). Fund Administration Agreement between Southeastern Asset Management, Inc. and Longleaf Partners International Fund; incorporated by reference from Post Effective Amendment No. 20, filed August 10, 1998 (Accession Number 0000950144-98-009323).

(3). Transfer Agent Agreement with PFPC Inc.; Incorporated by reference from Post Effective Amendment No. 23, filed August 1, 2000 (Accession Number 0000950144-00-009321).

(4). Form of Shareholder Servicing Agent Agreement with National Financial Services Corp; incorporated by reference from Post Effective Amendment No. 21, filed February 26, 1999 (Accession Number 0000950144-99-002256).

(5). Traditional IRA Disclosure Statement and Custodial Agreement; Roth IRA Disclosure Statement and Custodial Agreement. Filed herewith.

(6). Simple IRA Disclosure Statement and Account Agreement. Filed herewith.

(i). Legal Opinion. Filed herewith.

(j). Other Opinions or Consents. Consent of PricewaterhouseCoopers LLP; filed herewith.

(k). Omitted Financial Statements. None.

(1). Initial Capital Agreements. None.

(m). Rule 12b-1 Plan. None.

(n). Financial Data Schedule; not applicable.

(o) Rule 18f-3 Plan. Not applicable; none.

(p). Code of Ethics; Filed herewith.

(q). Resolution Regarding Authorized Signature of Andrew R. McCarroll.

LONGLEAF PARTNERS FUNDS TRUST

Post-Effective Amendment No. 30

Item 24 Persons Under Common Control With Registrant

Longleaf Partners Funds Trust, a Massachusetts business trust registered under the Investment Company Act of 1940 as an open-end management investment company, now has three series — Longleaf Partners Fund, Longleaf Partners Small-Cap Fund, and Longleaf Partners International Fund, all of which are non-diversified open-end management investment companies. Each series has a separate Board of Trustees composed of the same individuals. Six of the eight Trustees are classified as Trustees who are not “interested” as defined by Sec. 2 (a)(19) of the Investment Company Act of 1940. Each series is controlled by its particular Board of Trustees, and each series has entered into an Investment Counsel Agreement and a Fund Administration Agreement with Southeastern Asset Management, Inc., an investment adviser registered under the Investment Advisers Act of 1940. Each series is treated for accounting purposes as a separate entity, and each series has separate financial statements.

Item 25 Indemnification

Section 4.8 of the By-Laws of the Registrant provides as follows:

“Section 4.8. Indemnification of Trustees, Officers, Employees and Agents. (a) The Trust shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Trust) by reason of the fact that he is or was a Trustee, officer, employee, or agent of the Trust. The indemnification shall be against expenses, including attorneys’ fees, judgements, fines, and amounts paid in settlement, actually and reasonably incurred by him in connection with the action, suit, or proceeding, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendre or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Trust, and with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

(b) The Trust shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or on behalf of the Trust to obtain a judgment or decree in its favor by reason of the fact that he is or was a Trustee, officer, employee, or agent of the Trust. The indemnification shall be against expenses, including attorneys’ fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust, except that no indemnification shall be made in respect of any claim, issue, or matter as to which the person has been adjudged to be

LONGLEAF PARTNERS FUNDS TRUST

Post-Effective Amendment No. 30

liable for negligence or misconduct in the performance of his duty to the Trust, except to the extent that the court in which the action or suit was brought, or a court of equity in the county in which the Trust has its principal office, determines upon application that, despite the adjudication of liability but in view of all circumstances of the case, the person is fairly and reasonably entitled to indemnity for these expenses which the court shall deem proper, provided such Trustee, officer, employee or agent is not adjudged to be liable by reason of his willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.

(c) To the extent that a Trustee, officer, employee, or agent of the Trust has been successful on the merits or otherwise in defense of any action suit or proceeding referred to in subsection (a) or (b) or in defense of any claim, issue, or matter therein, he shall be indemnified against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection therewith.

(d) (1) Unless a court orders otherwise, any indemnification under subsections (a) or (b) of this section may be made by the Trust only as authorized in the specific case after a determination that indemnification of the Trustee, officer, employee, or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in subsections (a) or (b).

(2) The determination shall be made:

(i) By the Trustees, by a majority vote of a quorum which consists of Trustees who were not parties to the action, suit or proceeding; or

(ii) If the required quorum is not obtainable, or if a quorum of disinterested Trustees so directs, by independent legal counsel in a written opinion; or

(iii) By the Shareholders.

(3) Notwithstanding any provision of this Section 4.8, no person shall be entitled to indemnification for any liability, whether or not there is an adjudication of liability, arising by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of duties as described in Section 17(h) and (i) of the Investment Company Act of 1940 (“disabling Conduct”). A person shall be deemed not liable by reason by disabling conduct if, either:

(i) A final decision on the merits is made by a court or other body before whom the proceeding

LONGLEAF PARTNERS FUNDS TRUST

Post-Effective Amendment No. 30

was brought that the person to be indemnified (“indemnitee”) was not liable by reason of disabling conduct; or

(ii) In the absence of such a decision, a reasonable determination, based upon a review of the facts, that the indemnitee was not liable by reason of disabling conduct, is made by either-

(A) A majority of a quorum of Trustees who are neither “interested persons” of the Trust, as defined in Section 2(a)(19) of the Investment Company Act of 1940, nor parties to the action, suit or proceeding, or

(B) an independent legal counsel in a written opinion.

(e) Expenses, including attorneys’ fees, incurred by a Trustee, officer, employee or agent of the Trust in defending a civil or criminal action, suit or proceeding may be paid by the Trust in advance of the final disposition thereof if:

(1) Authorized in the specific case by the Trustees; and

(2) The Trust receives an undertaking by or on behalf of the Trustee, officer, employee or agent of the Trust to repay the advance if it is not ultimately determined that such person is entitled to be indemnified by the Trust; and

(3) either,

(i) such person provides a security for his undertaking, or

(ii) the Trust is insured against losses by reason of any lawful advances, or

(iii) a determination, based on a review of readily available facts, that there is reason to believe that such person ultimately will be found entitled to indemnification, is made by either-

(A) a majority of a quorum which consists of Trustees who are neither “interested persons” of the Trust, as defined in Section 2(a)(19) of the Investment Company Act of 1940, nor parties to the action, suit or proceeding, or

(B) an independent legal counsel in a written opinion.

(f) The indemnification provided by this Section shall not

LONGLEAF PARTNERS FUNDS TRUST

Post-Effective Amendment No. 30

be deemed exclusive of any other rights to which a person may be entitled under any by-law, agreement, vote of Shareholders or disinterested trustees or otherwise, both as to action in his official capacity and as to action in another capacity while holding the office, and shall continue as to a person who has ceased to be a Trustee, officer, employee, or agent and inure to the benefit of the heirs, executors and administrators of such person; provided that no person may satisfy any right of indemnity or reimbursement granted herein or to which he may be otherwise entitled except out of the property of the Trust, and no Shareholder shall be personally liable with respect to any claim for indemnity or reimbursement or otherwise.

(g) The Trust may purchase and maintain insurance on behalf of any person who is or was a Trustee, officer, employee, or agent of the Trust, against any lability asserted against him and incurred by him in any such capacity, or arising out of his status as such. However, in no event will the Trust purchase insurance to indemnify any officer or Trustee against liability for any act for which the Trust itself is not permitted to indemnify him.

(h) Nothing contained in this Section shall be construed to protect any Trustee or officer of the Trust against any liability to the Trust or to its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.”

Paragraph 9 of the Investment Counsel Agreement, provides that, except as may otherwise be required by the Investment Company Act of 1940 or the rules thereunder, neither the Investment Counsel nor its stockholders, officers, directors, employees, or agents shall be subject to any liability incurred in connection with any act or omission connected with or arising out of any services rendered under the Agreement, including any mistake of judgment, except by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of reckless disregard of its obligations and duties under the Agreement. Similar provisions are contained in Paragraph 1.04(d) of the Fund Administration Agreement. Reference is made to such agreements for the full text.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Securities Act”) may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant

LONGLEAF PARTNERS FUNDS TRUST

Post-Effective Amendment No. 30

of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed by the Act and will be governed by the final adjudication of such issue.

The Registrant hereby undertakes that is will apply the indemnification provisions of its By-Laws in a manner consistent with Investment Company Act Release No. 11330 so long as the interpretation of Section 17(h) and 17(i) therein remains in effect.

Item 26 Business and Other Connections of Investment Counsel

Southeastern Asset Management, Inc., a corporation organized under the laws of the State of Tennessee, offers investment advisory services to corporations, endowment funds, retirement and pension plans and individual investors.

The following individuals are Trustees of the Registrant who are employed by Southeastern Asset Management, Inc.:


		Name of Company,
Name and position		Principal Business
With Registrant		and Address

O. Mason Hawkins, CFA		1975-Present;
Trustee and Co-Portfolio		Southeastern Asset
Manager		Management, Inc.;
		Chairman of the Board and CEO

The following individuals are officers of Southeastern Asset Management Inc. who have responsibilities for investment company operations:


Capacity with
Investment Counsel

G. Staley Cates		1994 — Present;
Co-Portfolio Manager of Partners, Small-Cap and International Funds, President		Vice President (1985-94) Southeastern Asset Management, Inc.

LONGLEAF PARTNERS FUNDS TRUST

Post-Effective Amendment No. 30


		Name of Company,
Capacity with		Principal Business
Investment Counsel		and Address

E. Andrew McDermott, III		1998 — Present;
Co-Portfolio Manager		Southeastern Asset Management, Inc.
of International Fund,
Vice President-Investments

Frank N. Stanley, CFA		1985 — Present;
Vice President — Investments		Southeastern Asset Management, Inc.

Jason E. Dunn		1997 — Present;
Vice President — Investments		Southeastern Asset Management, Inc.

Julie M. Douglas, CPA Vice President; Chief Financial Officer-Mutual Funds		1989 — Present; Southeastern Asset Management, Inc.

Lee B. Harper Vice President-Marketing		1993 — Present Southeastern Asset Management, Inc.

Deborah L. Craddock		1987 — Present;
Vice President and Head Trader		Southeastern Asset Management, Inc.

Andrew R. McCarroll,		2003 — Present; Vice President and Assistant
Vice President and General Counsel		General Counsel (1998-2002);
		Southeastern Asset Management, Inc.

John McFadden		2004 — Present;
Chief Compliance Officer-Mutual Funds		Southeastern Asset Management, Inc.

Randy D. Holt		1985 — Present;
Vice President and Secretary		Southeastern Asset Management, Inc.

Michael J. Wittke Vice President, Legal Counsel and CCO		2005 — Present; Associate Legal Counsel (2002-2004); Southeastern Asset Management, Inc. 1996-2002, PricewaterhouseCoopers, LLP

Richard Hussey		2006 — Present; Chief Information Officer (1999-2006)
Vice President and Chief Operating Officer		Southeastern Asset Management, Inc.

The address of Southeastern Asset Management, Inc. is 6410 Poplar Avenue Suite 900; Memphis, TN 38119.

LONGLEAF PARTNERS FUNDS TRUST

Post-Effective Amendment No. 30

Item 27 Principal Underwriters

(a) None. Each series is a no-load, open-end management investment company selling shares directly to the public.

(b) Not Applicable.

(c) Not Applicable.

ITEM 28 Location of Accounts and Records

All accounts, books and other documents required by Section 31(a) of the Investment Company Act of 1940 (other than those required to be maintained by the custodian and transfer agent) are maintained in the physical possession of Registrant’s Fund Administrator, Southeastern Asset Management, Inc., Suite 900, 6410 Poplar Avenue; Memphis, TN 38119. Transfer Agent records are maintained in the possession of PPPC Inc., 4400 Computer Drive, Westborough, MA 01581.

ITEM 29 Management Services

Not applicable. (See section in the Prospectus entitled “Fund Administrator”).

ITEM 30 Undertakings

(a) Subject to the terms and conditions of Section 15(d) of the Securities Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with the Securities and Exchange Commission such supplementary and periodic information, documents and reports as may be prescribed by any rule or regulation of the Commission heretofore or hereafter duly adopted pursuant to authority conferred in that section, including an annual updating of the registration statement within four months of the end of each fiscal year, containing audited financial statements for the most recent fiscal year.

SIGNATURES*

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, Longleaf Partners Funds Trust, a Massachusetts business trust (the Master Trust) now having three series or portfolios, Longleaf Partners Fund, Longleaf Partners Small-Cap Fund, and Longleaf Partners International Fund, hereby certifies that it meets all the requirements for effectiveness under Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective Amendment No. 30 to the Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the City of Memphis and State of Tennessee, on the 27th day of April, 2007.

LONGLEAF PARTNERS FUNDS TRUST (THE MASTER TRUST)

LONGLEAF PARTNERS FUND

LONGLEAF PARTNERS SMALL-CAP FUND

LONGLEAF PARTNERS INTERNATIONAL FUND


By		/s/ Andrew R. McCarroll Andrew R. McCarroll VP and General Counsel Southeastern Asset Management, Inc. Functioning as principal legal officer under agreements with Longleaf Partners Funds Trust and its separate series

LONGLEAF PARTNERS FUNDS TRUST

Post-Effective Amendment No. 30

SIGNATURES (Continued)*

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 30 to the Registration Statement of Longleaf Partners Funds Trust on Form N-1A has been signed below by the following persons in the capacities and on the dates indicated:


Signature	Title	Date

INTERESTED TRUSTEES

/s/ O. Mason Hawkins O. Mason Hawkins	Trustee	April 27, 2007

/s/ Margaret H. Child Margaret H. Child	Trustee	April 27, 2007

NON-INTERESTED TRUSTEES

/s/ Chadwick H. Carpenter, Jr. Chadwick H. Carpenter, Jr.	Trustee	April 27, 2007

/s/ Daniel W. Connell, Jr. Daniel W. Connell, Jr.	Trustee	April 27, 2007

/s/ Rex M. Deloach Rex M. Deloach	Trustee	April 27, 2007

/s/ Steven N. Melnyk Steven N. Melnyk	Trustee	April 27, 2007

/s/ C. Barham Ray C. Barham Ray	Trustee	April 27, 2007

/s/ Perry C. Steger Perry C. Steger	Chairman of the Board	April 27, 2007

(*) As of the date of execution of this Post-Effective Amendment No. 30, the Board of Trustees of each Series consists of eight individuals, as shown above. Each Trustee is a Trustee of each Series, and each is signing this Post-Effective Amendment on behalf of each such Series.

NOTICE

A Copy of the Declaration of Trust of Longleaf Partners Funds Trust (“the Registrant”) is on file with the Secretary of the Commonwealth of Massachusetts and notice is hereby given that this instrument is executed on behalf of the Registrant by the above Trustees or officers of the Registrant in their capacities as Trustees or as officers and not individually, and any obligations arising out of this instrument are not binding upon any of the Trustees, officers or shareholders individually, but instead are binding only upon the assets and property of the Registrant.

Exhibit 23(h)5

Longleaf Partners Funds ^®

Traditional IRA
Disclosure Statement and
Custodial Agreement

Roth IRA
Disclosure Statement and
Custodial Agreement

Investment Counsel:
Southeastern Asset Management, Inc.
Memphis, TN

Transfer Agent:
PFPC INC.
Westborough, MA

Custodian:
PFPC Trust Company
Wilmington, DE

Contents






Traditional Individual Retirement Account




	Traditional IRA Disclosure Statement	1




	Custodial Account Agreement	8





Simplified Employee Pension (SEP) IRA		15





Roth Individual Retirement Account




	Roth IRA Disclosure Statement	16




	Custodial Account Agreement	22





PFPC Trust Company Privacy Principles		28

Traditional Individual

Retirement Account

Disclosure Statement

The following information is the disclosure statement required by Federal tax regulations. You should read this disclosure statement, the Custodial Account Agreement, and the prospectus for the Longleaf Partners Funds in which your Individual Retirement Account (IRA) contributions will be invested.

REVOCATION OF YOUR IRA

You have the right to revoke your IRA and receive the entire amount of your initial contribution by notifying PFPC Trust Company, the Custodian of your IRA, in writing within seven (7) calendar days of establishment of your IRA. If you revoke your IRA within seven days, you are entitled to a return of the entire amount paid by you, without adjustment for such items as sales commissions, administrative expenses, or fluctuations in market value. If you decide to revoke your IRA, notice should be delivered or mailed to:


First Class Mail:		Overnight Express:
Longleaf Partners Funds		Longleaf Partners Funds
c/o PFPC Inc.		c/o PFPC Inc.
P.O. Box 9694		101 Sabin Street
Providence, RI 02940-9694		Pawtucket, RI 02860
		508-871-8800

This notice should be signed by you and include the following:

1. The date;

2. A statement that you elect to revoke your IRA;

3. Your IRA account number;

4. The date your IRA was established;

5. Your signature and your printed or typed name.

Mailed notice will be deemed given on the date that it is postmarked, if it is properly addressed and deposited either in the United States mail, first class postage prepaid, or with an Internal Revenue Service (IRS) approved overnight service. This means that if you mail your notice it must be postmarked on or before the seventh calendar day after your IRA was opened. A revoked IRA will be reported to the IRS and the Depositor on Forms 1099-R and 5498.

YOUR INDIVIDUAL
RETIREMENT ACCOUNT

You have opened an Individual Retirement Account which is a Traditional or SEP-IRA for the exclusive benefit of you and your beneficiaries, created by a written instrument (the Custodial Account Agreement). The following requirements apply to your IRA:

1. Contributions, transfers and rollovers may be made only in “cash” by check, draft, or other form acceptable to the Custodian;

2. The Custodian must be a bank or savings and loan association;

3. No part may be invested in life insurance contracts;

4. Your interest must be nonforfeitable;

5. The assets of the custodial account may not be mixed with other property except in a common investment fund; and

6. You must begin receiving distributions from your account no later than April 1 of the year following the year in which you become 70 1/2 years old; and distributions must be completed over a period that is not longer than the joint life expectancy of you and your beneficiary.

ELIGIBILITY

You are permitted to make a regular contribution to your Traditional IRA for any taxable year prior to the taxable year you attain age 70 1/2, if you receive compensation for such taxable year. Compensation includes, salaries, wages, tips, commissions, bonuses, alimony, royalties from creative efforts and “earned income” in the case of

self-employment. The amount which is deductible, depends upon whether or not you are an active participant in a retirement plan maintained by your employer, your modified adjusted gross income (Modified AGI), your marital status, and your tax filing status.

CONTRIBUTIONS

The maximum allowable contribution to your IRAs (deductible, non-deductible and Roth) for each tax year is the lesser of (a) $4,000* or (b) 100% of your compensation or earnings from self-employment (Please see Table I for contribution limits). If your spouse is not employed or earns less than you earn, you may also contribute to an IRA on behalf of your spouse. The maximum contribution to your spouse’s IRA for each tax year is the lesser of (a) $4,000* or (b) the combined compensation of you and your spouse, minus the dollar amount of the IRA contribution made by you. The total combined contribution to each individual’s IRA non-deductible and Roth IRAs cannot exceed these limits. Any contribution made to your IRA will be treated as a contribution for the year it is received, unless the contribution is made between January 1 and April 15, and you have identified the contribution as a prior year contribution. A contribution made pursuant to a payroll deduction or systematic contribution plan may only be characterized as a contribution for the year it is received by PFPC (not the date paid or sent from your account).

Table I



Traditional IRA Contribution Limits*

Tax Year	If Under Age 50	If Age 50 or Over

2005	$4,000	$4,500
2006-2007	$4,000	$5,000
2008	$5,000	$6,000

Note: For tax years after 2008, the above limits will be increased to reflect a cost-of-living adjustment, if any.

INCOME TAX DEDUCTION

Your contribution to a Traditional IRA may be deductible on your Federal income tax return. However, there is a phase-out of the IRA deduction if you are an active participant in an employer-sponsored retirement plan. The IRA deduction is reduced proportionately as adjusted gross income increases and is subject to change each year. Please see Table II below and consult IRS Publication 590 for calculating your deductible contribution as it pertains to individual income and employer sponsored plan circumstances. Your contributions in excess of the permitted deduction will be non-deductible contributions.

A deductible IRA contribution can be made to your spouse’s IRA even if you are an active participant in an employer-sponsored retirement plan, if your joint adjusted gross income for the tax year does not exceed $150,000. The IRA deduction is reduced proportionally as your joint adjusted gross income increases from $150,001 to $160,000.

Table II





Maximum income limits for deductible
contributions to a Traditional IRA*



	Single Filers				Joint Filers


	Full		Partial		Full		Partial
	deductibility		deductibility		deductibility		deductibility
Year	up to		up to		up to		up to

2005	$	50,000	$	60,000	$	70,000	$	80,000
2006	$	50,000	$	60,000	$	75,000	$	85,000
2007	$	50,000	$	60,000	$	80,000	$	100,000

* These limits assume the contributor is an active participant in an employer-sponsored retirement plan and are based on modified adjusted gross income (MAGI).

TAXATION OF DISTRIBUTIONS

The income of your Traditional IRA is not taxed until the money is distributed to you. Distributions are taxable as ordinary income when received except that the amount of any distribution representing non-deducted

contributions or the return of an excess contribution is not taxed.

In general, you may “rollover” a distribution from another IRA, an eligible rollover distribution from your employer’s qualified plan, or distributions from certain tax deferred annuities or accounts. If a distribution is rolled over, i.e., deposited to your IRA within 60 calendar days of receipt, the amount rolled over is not taxable. The IRS enforces the 60-day time limit strictly. You may rollover a portion of a distribution in which case the remainder will be subject to tax. The IRS requires 20% of any distribution from your employer’s qualified plan to be withheld for Federal income tax unless your distribution is transferred in a direct asset transfer to an eligible retirement plan such as another qualified plan or IRA. The rules regarding rollovers are complex and you should consult a competent tax advisor prior to rolling over all or part of a distribution.

If you make a tax-free rollover of any part of a distribution from a Traditional IRA, you cannot, within a 1-year period, make a tax-free rollover of any later distribution from that same Traditional IRA. You also cannot make a tax-free rollover of any amount distributed, within the same 1-year period, from the Traditional IRA into which you made the tax-free rollover. Please consult IRS Publication 590 for more information pertaining to rollover contributions.

Note: You may not roll over after tax contributions to a 403(b) program or 457 plan. You may want to roll over a distribution from an employer’s retirement plan to a separate IRA in order to preserve certain tax treatment. The rules regarding tax-free rollovers are complex and subject to frequent change; you should consult a professional tax adviser if you are considering such a rollover.

CONVERSIONS

You may also “convert” all or a portion of your Traditional IRA to a Roth IRA if your adjusted gross income (joint or individual) does not exceed $100,000 for the tax year unless you are married and file a separate return. (If you are a married individual, filing a separate return, and have lived apart from your spouse for the entire year, you may be eligible to be treated as a single payer.) A conversion is a type of distribution and is not tax-free. You may not convert any portion of a Required Minimum Distribution (RMD). Distributions are taxable as ordinary income when received except that the amount of any distribution representing the return of non-deducted contributions is not taxed. The 10% penalty tax on early distributions does not apply to conversion amounts unless an amount attributable to a conversion is distributed from the Roth IRA prior to five years from the date of the conversion.

A conversion is reported as a distribution from the Traditional IRA (IRS Form 1099-R) and a conversion contribution to the Roth IRA (IRS Form 5498). The rules regarding conversions to Roth IRAs are complex and you should consult a competent tax advisor prior to a conversion.

Recharacterization of a Conversion
(Correction Process)

You may correct a conversion made in error by recharacterizing the conversion. A conversion is recharacterized by transferring the conversion amount plus allocable earnings back to a Traditional IRA. The correction must take place prior to the due date, including extensions, for filing your Federal income tax return for the tax year in which the conversion was originally made. A recharacterized conversion may be converted back to a Roth IRA, however limitations may apply. Assets that have been recharacterized back to a Traditional IRA cannot be reconverted to a Roth IRA in the same tax year or within thirty days. A recharacterized conversion is reported as a distribution from the Roth IRA (IRS Form 1099-R) and a recharacterization contribution to the Traditional IRA (IRS Form 5498) for the tax year in which the recharacterization occurs. The rules regarding recharacterization are complex and you should consult a competent tax advisor prior to any recharacterization or reconversion.

Distributions under $10 will not be reported to you on IRS Form 1099-R, as allowed under IRS regulations. However, you must still report these distributions to the IRS on IRS Form 1040 as well as other forms which may be required to properly file your tax return.

RECHARACTERIZATION OF CONTRIBUTIONS

If you are eligible to contribute to a Roth IRA, all or part of a contribution you make to your Traditional IRA, along with allocable earnings or losses, may be recharacterized and treated as if made to your Roth IRA on the date the contribution was originally made to your Traditional IRA. Recharacterization of a contribution is irrevocable, and must be completed on or before the due date, including extensions, for filing your Federal income tax return for the tax year for which the contribution was originally made.

A recharacterized contribution is reported as a distribution from the first IRA (IRS Form 1099-R) and a recharacterization contribution to the second IRA (IRS Form 5498) for the tax year in which the recharacterization occurs. The rules regarding recharacterization are complex and you should consult a competent tax advisor prior to any recharacterization. Recharacterization forms are available from the Custodian and should be used for all recharacterization requests.

PENALTY TAX ON CERTAIN TRANSACTIONS

Excess Contributions

Amounts contributed to your Traditional IRA in excess of the allowable limit (including any over-contribution resulting from contributions through a payroll deduction or systematic investment plan) will be subject to a non-deductible excise tax of 6% for each year until the excess is used up as an allowable contribution (in a subsequent year) or returned to you. The 6% excise tax on excess contributions will not apply if the excess contribution and earnings allocable to it are distributed by the due date for your Federal income tax return, including extensions. If such a distribution is made, only the earnings are considered taxable income for the tax year in which the excess was contributed to the IRA. The return of earnings may also be subject to the 10% excise tax on early distributions discussed below. An IRS Form 1099-R will be issued for the year in which the distribution occurred, not the year in which the excess contribution was made. The 1099-R applies to amounts removed during the period January 1 through and including the due date of your Federal income tax return for the prior tax year. Consult IRS Publication 590 for more information pertaining to excess contributions. If you make an excess contribution to your IRA and it is not corrected on a timely basis, an excise tax of 6% is imposed on the excess amount. This tax will apply each year to any part or all of the excess that remains in your account. Earnings will be removed with the excess contribution if corrected before the Federal income tax-filing deadline (including extensions), pursuant to Internal Revenue Code Section 408(d)(4) and Internal Revenue Service (“IRS”) Publication 590. The IRS may impose a 10% early distribution penalty on the earnings if you are under age 59 1/2.

For the purpose of the excess contribution, we will calculate the net income attributable to that contribution (Net Income Attributable or “NIA”) using the method provided for in the IRS Final Regulations for Earnings Calculation for Returned or Recharacterized Contributions. This method calculates the NIA based on the actual earnings and losses of the IRA during the time it held the excess contribution. Please note that a negative NIA is permitted and, if applicable, will be deducted from the amount of the excess contribution. Excess contributions (plus or minus the NIA) that are distributed by your Federal income tax return due date (plus extensions) will be considered corrected, thus avoiding an excess contribution penalty.

Early Distributions

Your receipt or use of any portion of your account (excluding any amount representing a return of non-deducted contributions) before you attain age 59 1/2 is considered an early or premature distribution. The distribution is subject to a penalty tax equal to 10% of the distribution unless one of the following exceptions applies to the distribution:

1. due to your death, or

2. made because you became disabled, or

3. used specifically for deductible medical expenses which exceed 7.5% of your adjusted gross income, or

4. used for health insurance cost due to your unemployment, or

5. used for higher education expenses defined in section 529(e)(3) of the Internal Revenue Code, or

6. used toward the expenses of a first time home purchase up to a lifetime limit of $10,000, or

7. part of a scheduled series of substantially equal payments over your life, or over the joint life expectancy of you and a beneficiary. If you request a distribution in the form of a series of substantially equal payments, and you modify the payments before 5 years have elapsed and before attaining age 59 1/2, the penalty tax will apply retroactively to the year payments began through the year of such modification, or

8. required because of an IRS levy.

The 10% penalty tax is in addition to any Federal income tax that is owed at distribution. For more information on the 10% penalty tax and the exceptions listed above, consult IRS Publication 590.

REQUIRED DISTRIBUTIONS

You are required to begin receiving minimum distributions from your IRA by your required beginning date (the April 1 of the year following the year you attain age 70 1/2). The year you attain age 70 1/2 is referred to as your “first distribution calendar year”. Your minimum distribution for each year beginning with the calendar year you attain the age of 70 1/2 is generally based upon the value of your account at the end of the prior year divided by the factor for your age derived from the Uniform Lifetime Distribution Period Table regardless of who or what entity is your named beneficiary. This uniform table assumes you have a designated beneficiary exactly 10 years younger than you. However, if your spouse is your sole beneficiary and is more than 10 years younger than you, your required minimum distribution for each year may be based upon the joint life expectancies of you and your spouse. The account balance that is used to determine each year’s required minimum amount is the fair market value of each IRA you own as of the prior December 31st, adjusted for outstanding rollovers (or transfers) as of such prior December 31st and recharacterizations that relate to a conversion or failed conversion made in the prior year.

However, no payment will be made from this IRA until you provide the Custodian with a proper distribution request acceptable by the Custodian. Upon receipt of such distribution request, you may switch to a joint life expectancy in determining the required minimum distribution if your spouse was your sole beneficiary as of the January 1st of the calendar year that contains your required beginning date and such spouse is more than 10 years younger than you. The required minimum distribution for the second distribution calendar year and for each subsequent distribution calendar year must be made by December 31 of each such year.

DISTRIBUTIONS DUE TO DEATH

which you die, to take distributions over his/her life expectancy. These distributions must commence no later than December 31st of the calendar year following the calendar year of your death. However, if your spouse is your sole beneficiary, these distributions are not required to commence until the December 31st of the calendar year you would have attained the age of 70 1/2, if that date is later than the required commencement date in the previous sentence. If you die before your required beginning date and you do not have a designated beneficiary, the balance in your IRA must be distributed no later than the December 31st of the calendar year that contains the fifth anniversary of your death.

If you die on or after your required beginning date and you have a designated beneficiary, the balance in your IRA will be distributed to your beneficiary over the beneficiary’s single life expectancy. These distributions must commence no later than December 31st of the calendar year following the calendar year of your death. If you die on or after your required beginning date and you do not have a designated beneficiary, the balance in your IRA must be distributed over a period that does not exceed your remaining single life expectancy determined in the year of your death. However, the required minimum distribution for the calendar year that contains the date of your death is still required to be distributed. Such amount is determined as if you were still alive throughout that year. If your spouse is your sole beneficiary, your spouse may elect to treat your IRA as his or her own IRA, whether you die before or after your required beginning date. If you die after your required beginning date and your spouse elects to treat your IRA as his or her own IRA, any required minimum that has not been distributed for the year of your death must still be distributed to your surviving spouse and then the remaining balance can be treated as your spouse’s own IRA. After your death, your designated beneficiary may name a subsequent beneficiary. Any subsequent beneficiaries must take distributions at least as frequently as the original designated beneficiary. If you do not properly designate a beneficiary, or all designated beneficiaries have predeceased you, your spouse shall become the beneficiary or, if no surviving spouse or unmarried, the distribution will be made to your estate. Consult IRS Publication 590 or a competent estate-planning advisor for a complete discussion of rules governing distributions due to death.

In order to ensure the proper tax reporting of IRA distributions to the IRS, you are required to complete the appropriate distribution form for all distributions. Distribution forms are available from the Custodian and may be obtained by contacting PFPC or on our website at www.longleafpartners.com.

PROHIBITED TRANSACTIONS

If you or your beneficiary engage in any prohibited transaction (such as any sale, exchange, borrowing, or leasing of any property between you and your IRA; or any other interference with the independent status of the account), the account will lose its exemption from tax and be treated as having been distributed to you. The value of the entire account will be includible in your gross income. If you are under age 59 1/2, you would also be subject to the 10% penalty tax on early distributions.

If you or your beneficiary use (pledge) all or any part of your IRA as security for a loan, then the portion so pledged will be treated as if distributed to you, and will be taxable to you as ordinary income and subject to a 10% penalty tax if you have not attained age 59 1/2 during the year which you make such a pledge.

FEDERAL ESTATE AND GIFT TAXES

Amounts payable to your spouse as beneficiary of your IRA may qualify for estate tax marital deduction. An election under an IRA to have a distribution payable to your beneficiary upon your death will not be treated as a gift as long as you are able to name them as your beneficiary.

INCOME TAX WITHHOLDING

The Custodian is required to withhold Federal income tax from any distribution from your IRA to you at the rate of 10% unless you choose not to have tax withheld. You may elect out of withholding by advising the Custodian in writing, prior to the distribution, that you do not want tax withheld from the distribution. This election may be made on any form acceptable to the Custodian. If you do not elect out of tax withholding, you may direct the Custodian to withhold an additional amount of tax in excess of 10%, but not more than 90%.

ADDITIONAL INFORMATION

For more detailed information, you may obtain IRS Publication 590, Individual Retirement Arrangements (IRAs) from any district office of the Internal Revenue Service or by calling 1-800-TAX-FORM. Any IRA transaction may have tax consequences; consult your tax advisor to obtain information about the tax consequences in connection with your particular circumstances.

INFORMATION ABOUT YOUR INVESTMENTS

A mutual fund investment involves investment risks, including possible loss of principal. In addition, growth in the value of your account is neither guaranteed nor projected due to the characteristics of a mutual fund investment. Detailed information about the shares of each Longleaf Partners fund available for investment in your IRA must be furnished to you in the form of a prospectus. The method for computing and allocating annual earnings is set forth in the prospectus. (See prospectus section entitled “Dividends and Distributions.”) If you made an initial contribution of $1,000 on the first day of a calendar year and no further investment during that year, your contribution would also be subject to certain costs and expenses which would reduce any return you might obtain from your investment. (See the prospectus section entitled “Fund Fees and Expenses”, the “Expense Example” in the Annual Report and the sections referred to therein.)

Each Fund in which your Traditional IRA is invested pays fees for investment advisory, administrative, and other services. For further information regarding expenses, earnings, and distributions, see the Funds’ financial statements, prospectus and/or statement of additional information.

In the event that any Fund held in the Custodial Account is liquidated or is otherwise made unavailable by the Sponsor as a permissible investment for a Custodial Account hereunder, the liquidation or other proceeds of such Fund shall be invested in accordance with the instructions of the Depositor (as defined on p. 28); if the Depositor does not give such instructions, or if such instructions are unclear or incomplete in the opinion of the Service Company, the Service Company may invest such liquidation or other proceeds in such other Fund (including a money market fund if available) as the Sponsor designates, and neither the Service Company nor the Custodian will have any responsibility for such investment.

FEES AND CHARGES

The Longleaf Partners Funds charge no annual maintenance fees on IRA accounts.

FILING WITH THE IRS

Contributions to your IRA must be reported on your tax return (Form 1040 or 1040A, and Form 8606 for nondeductible IRA contributions) for the taxable year contributed. You or your beneficiary are subject to any of the Federal penalty taxes due to excess contributions, premature distributions, or missed Required Minimum Distributions.

IRS APPROVED FORM

Your Traditional IRA is the Internal Revenue Service’s model custodial account contained in IRS Form 5305-A. Certain additions have been made in Article VIII of the form. By following this form, your

Traditional IRA meets the requirements of the Internal Revenue Code. However, the IRS has not endorsed the merits of the investments allowed under the IRA. Form 5305-A may also be used by qualifying employers in conjunction with Form 5305-SEP to establish a Simplified Employee Pension plan (SEP) on behalf of employees. If your IRA is part of a SEP, details regarding SEPs should also be provided by your employer. This form cannot be used in connection with Coverdell Education Savings Accounts, Roth or SIMPLE IRAs.

Custodial Account Agreement

(Under section 408(a) of the Internal Revenue Code—Form 5305-A (Revised March 2002))

The Depositor whose name appears in the accompanying Application is establishing an individual retirement account (IRA) under section 408(a) to provide for his or her retirement and for the support of his or her beneficiaries after death. The Custodian, PFPC Trust Company, has given the Depositor the disclosure statement required under Regulations section 1.408-6.

The Depositor and the Custodian make the following agreement:

Article I

Except in the case of a rollover contribution described in section 408A(e), a recharacterized contribution described in section 408A(d)(6), or an IRA Conversion Contribution, the Custodian will accept only cash contributions and only up to a maximum amount of $3,000 per year for tax years 2002 through 2004. That contribution limit is increased to $4,000 for tax years 2005 through 2007 and $5,000 for 2008 and thereafter. For individuals who have reached the age of 50 before the close of the tax year, the contribution limit is increased to $3,500 per year for tax years 2002 through 2004, $4,500 for 2005, $5,000 for 2006 and 2007, and $6,000 for 2008 and thereafter. For tax years after 2008, the above limits will be increased to reflect a cost-of-living adjustment, if any.

Article II

The Depositor’s interest in the balance in the custodial account is nonforfeitable.

Article III

1. No part of the custodial account funds may be invested in life insurance contracts, nor may the assets of the custodial account be commingled with other property except in a common trust fund or common investment fund (within the meaning of section 408(a)(5)).

2. No part of the custodial account funds may be invested in collectibles (within the meaning of section 408(m)) except as otherwise permitted by section 408(m)(3), which provides an exception for certain gold, silver and platinum coins, coins issued under the laws of any state and certain bullion.

Article IV

1. Notwithstanding any provision of this agreement to the contrary, the distribution of the Depositor’s interest in the custodial account shall be made in accordance with the following requirements and shall otherwise comply with section 408(a)(6) and Proposed Regulations section 1.408-8, including the incidental death benefit provisions of Proposed Regulations section 1.401(a)
(9)-2, the provisions of which are incorporated by reference.

2. The Depositor’s entire interest in the custodial account must be, or begin to be, distributed not later than the Depositor’s required beginning date, April 1 following the calendar year in which the Depositor reaches age 70 1/2. By that date, the Depositor may elect, in a manner acceptable to the Custodian, to have the balance in the custodial account distributed in:

(a) A single sum or

(b) Payments over a period not longer than the life of the Depositor or the joint lives of the Depositor and his or her designated beneficiary.

3. If the Depositor dies before his or her entire interest is distributed to him or her, the remaining interest will be distributed as follows:

(a) If the Depositor dies on or after the required beginning date and:

(i) the designated beneficiary is the Depositor’s surviving spouse, the remaining interest will be distributed over the surviving spouse’s life expectancy as determined each year until such spouse’s death, or over the period in paragraph (a)(iii) below if longer. Any interest remaining after the spouse’s death will be distributed over such spouse’s remaining life expectancy as determined in the year of the spouse’s death and reduced by 1 for each subsequent year, or, if distributions are being made over the period in paragraph (a)(iii) below, over such period.

(ii) the designated beneficiary is not the Depositor’s surviving spouse, the remaining interest will be distributed over the beneficiary’s remaining life expectancy as determined in the year following the death of the Depositor and reduced by 1 for each subsequent year, or over the period in paragraph (a)(iii) below if longer.

(iii) there is no designated beneficiary, the remaining interest will be distributed over the remaining life expectancy of the Depositor as determined in the year of the Depositor’s death and reduced by 1 for each subsequent year.

(b) If the Depositor dies before the required beginning date, the remaining interest will be distributed in accordance with (i) below or, if elected or there is no designated beneficiary, in accordance with (ii) below:

(i) The remaining interest will be distributed in accordance with paragraphs (a)(i) and (a)(ii) above (but not over the period in paragraph (a)(iii), even if longer), starting by the end of the calendar year following the year of the Depositor’s death. If, however, the designated beneficiary is the Depositor’s surviving spouse, then this distribution is not required to begin before the end of the calendar year in which the Depositor would have reached age 70 1/2 but, in such case, if the Depositor’s surviving spouse dies before distributions are required to begin, then the remaining interest will be distributed in accordance with (a)(ii) above (but not over the period in paragraph (a)(iii), even if longer), over such spouse’s designated beneficiary’s life expectancy, or in accordance with (ii) below if there is no such designated beneficiary.

(ii) The remaining interest will be distributed by the end of the calendar year containing the fifth anniversary of the Depositor’s death.

4. If the Depositor dies before his or her entire interest has been distributed and if the designated beneficiary is not the Depositor’s surviving spouse, no additional contributions may be accepted in the account.

5. The minimum amount that must be distributed each year, beginning with the year containing the Depositor’s required beginning date, is know as the “required minimum distribution” and is determined as follows:

(a) The required minimum distribution under paragraph 2(b) for any year, beginning with the year the Depositor reaches age 70 1/2, is the Depositor’s account value at the close of business on December 31 of the preceding year divided by the distribution period in the uniform lifetime table in Regulations section

1.401(a)(9)-9. However, if the Depositor’s designated beneficiary is his or her surviving spouse, the required minimum distribution for a year shall not be more than the Depositor’s account value at the close of business on December 31 of the preceding year divided by the number in the joint and last survivor table in Regulations section 1.401(a)(9)-9. The required minimum distribution for a year under this paragraph (a) is determined using the Depositor’s (or, if applicable, the Depositor and spouse’s) attained age (or ages) in the year.

(b) The required minimum distribution under paragraphs 3(a) and 3(b)(i) for a year, beginning with the year following the year of the Depositor’s death (or the year the Depositor would have reached age 70 1/2, if applicable under paragraph 3(b)(i)) is the account value at the close of business on December 31 of the preceding year divided by the life expectancy (in the single life table in Regulations section 1.401(a)(9)-9) of the individual specified in such paragraphs 3(a) and 3(b)(i).

(c) The required minimum distribution for the year the Depositor reaches age 70 1/2 can be made as late as April 1 of the following year. The required minimum distribution for any other year must be made by the end of such year.

6. The owner of two or more traditional IRAs may satisfy the minimum distribution requirements described above by taking from one traditional IRA the amount required to satisfy the requirement for another in accordance with the regulations under section 408(a)(6).

Article V

1. The Depositor agrees to provide the Custodian with information necessary for the Custodian to prepare any reports required under sections 408(i) and Regulations sections 1.408-5 and 1.408-6.

2. The Custodian agrees to submit reports to the Internal Revenue Service and the Depositor prescribed by the Internal Revenue Service.

Article VI

Notwithstanding any other articles which may be added or incorporated, the provisions of Articles I through III and this sentence will be controlling. Any additional articles that are not consistent with section 408(a) and the related regulations will be invalid.

Article VII

This agreement will be amended from time to time to comply with the provisions of the Code and related regulations. Other amendments may be made with the consent of the persons whose signature appears on the IRA application.

Article VIII

1. All funds in the custodial account (including earnings) shall be invested in shares of any one or more of the registered investment companies (“mutual funds”), or portfolios thereof, which have been designated by the company listed on the account opening documents (“company”) as eligible for investment under this custodial account. The mutual funds, portfolios, and company shall be collectively referred to herein as “the Funds” and the shares of the Funds shall be collectively referred to as “Fund Shares.” Fund Shares shall be purchased at the public offering price for Fund Shares next to be determined after receipt of the contribution by the Custodian or its agent.

2. The shareholder of record of all Fund Shares shall be the Custodian or its nominee.

3. The Depositor shall, from time to time, direct the Custodian to invest the funds of his/her custodial account in Fund Shares. Any funds, which are not directed as to investment, shall, at the sole discretion of the Custodian, be held uninvested until such direction is received from the Depositor or be returned to the Depositor without being

deemed to have been contributed to his/her custodial account. The Depositor shall be the beneficial owner of all Fund Shares held in the custodial account, and the Custodian shall not vote any such shares except upon written direction of the Depositor.

4. The Custodian agrees to forward, or to cause to be forwarded, to every Depositor the then-current prospectus(es) of the Funds, as applicable, which have been designated by the company as eligible for investment under the custodial account and selected by the Depositor for such investment, and all notices, proxies and related proxy soliciting materials applicable to said Fund Shares received by it.

5. Each Depositor shall have the right by written notice to the Custodian to designate or to change a beneficiary to receive any benefit to which such Depositor may be entitled in the event of his/her death prior to the complete distribution of such benefit. A beneficiary designation will be deemed to be in effect when received in good order by the Custodian. If no such designation is in effect at the time of the Depositor’s death, or if the designated beneficiary has predeceased the Depositor, the spouse shall become the beneficiary or, if no surviving spouse or unmarried, the beneficiary shall be the Depositor’s estate.

6. (a) The Custodian shall have the right to receive rollover contributions. The Custodian reserves the right to refuse to accept any property, which is not in the form of cash.

(b) The Custodian, upon written direction of the Depositor and after submission to the Custodian of such documents as it may reasonably require, shall transfer the assets held under this Agreement (reduced by (1) any amounts referred to in paragraph 8 of this Article VIII and (2) any amounts required to be distributed during the calendar year of transfer) to a qualified retirement plan, to a successor individual retirement account, to an individual retirement annuity for the Depositor’s benefit, or directly to the Depositor.

Any amounts received or transferred by the Custodian under this paragraph 6 shall be accompanied by such records and other documents, as the Custodian deems necessary to establish the nature, value and extent of the assets and of the various interests therein.

7. Without in any way limiting the foregoing, the Depositor hereby irrevocably delegates to the Custodian the right and power to amend at any time and from time to time the terms and provisions of this Agreement and hereby consents to such amendments, provided they shall comply with all applicable provisions of the Code, the Treasury regulations there under and with any other governmental law, regulation or ruling. Any such amendments shall be effective when the notice of such amendments is mailed to the address of the Depositor indicated by the Custodian’s records.

8. Any income taxes or other taxes of any kind whatsoever levied or assessed upon or in respect of the assets of the custodial account or the income arising there from, any transfer taxes incurred, all other administrative expenses incurred, specifically including, but not limited to, administrative expenses incurred by the Custodian in the performance of its duties and fees for legal services rendered to the Custodian, and the Custodian’s compensation may be paid by the Depositor and, unless so paid within such time period as the Custodian may establish, shall be paid from the Depositor’s custodial account. The Custodian reserves the right to change or adjust its compensation upon 30 days advance notice to the Depositor.

9. The benefits provided there under shall not be subject to alienation, assignment, garnishment, attachment, execution, or levy of any kind, and any

attempt to cause such benefits to be so subjected shall not be recognized, except to such extent as may be required by law.

10. The Custodian may rely upon any statement by the Depositor (or the Depositor’s beneficiary if the Depositor is deceased) when taking any action or determining any fact or question which may arise under this Custodial Agreement. The Depositor hereby agrees that neither the Custodian nor the Funds will be liable for any loss or expense resulting from any action taken or determination made in reliance on such statement. The Depositor assumes sole responsibility for assuring that contributions to the custodial account satisfy the limits specified in the appropriate provisions of the Code.

11. The Custodian may resign at any time upon 30 days written notice to the Depositor and the Funds, and may be removed by the Depositor at any time upon 30 days written notice to the Custodian. Upon the resignation or removal of the Custodian, a successor Custodian shall be appointed within 30 days of such resignation notice and in the absence of such appointment, the Custodian shall appoint a successor unless the Agreement be sooner terminated. Any successor Custodian shall be a bank (as defined in section 408(n) of the Code) or such other person found qualified to act as a Custodian under an individual account plan by the Secretary of the Treasury or his delegate. The appointment of a successor Custodian shall be effective upon receipt by the Custodian of such successor’s written acceptance, which shall be submitted to the Custodian, the Funds, and the Depositor. Within 30 days of the effective date of the successor Custodian’s appointment, the Custodian shall transfer and deliver to the successor Custodian applicable account records and assets of the custodial account (reduced by any unpaid amounts referred to in paragraph 8 of this Article VIII). The successor Custodian (or any successor thereto) shall be subject to the provisions of this Agreement on the effective date of its appointment.

12. The Custodian shall, from time to time, in accordance with instructions in writing from the Depositor (or the Depositor’s beneficiary if the Depositor is deceased), make distributions out of the custodial account in the manner and amounts as may be specified in such instructions (reduced by any amounts referred to in Article VIII, paragraph 8). A retirement Account Distribution form is available from the Custodian, and should be obtained and used to request any distribution from your IRA. Notwithstanding the provisions of Article IV above, the Custodian assumes (and shall have) no responsibility to make any distribution from the custodial account unless and until such written instructions specify the occasion for such distribution and the elected manner of distribution, except as set forth in the second part of this paragraph (12) below, with respect to age 70 1/2 distributions. Prior to making any such distribution from the custodial account, the Custodian shall be furnished with any and all applications, certificates, tax waivers, signature guarantees, and other documents (including proof of any legal representative’s authority) deemed necessary or advisable by the Custodian, but the Custodian shall not be liable for complying with written instructions which appear on their face to be genuine, or for refusing to comply if not satisfied such instructions are genuine, and assumes no duty of further inquiry. Upon receipt of proper written instructions as required above, the Custodian shall cause the assets of the custodial account to be distributed in cash and/or in kind, as specified in such written instructions.

The Depositor may select as a method of distribution under Article IV, paragraph 2. If the Depositor requests age 70 1/2 distribution by timely written instruction but does not choose any of the methods of distribution described

above by the April 1st following the calendar year in which he or she reaches age 70 1/2, distribution to the Depositor will be made in accordance with Article IV, paragraph 2. If the Depositor does not request age 70 1/2 distribution from the custodial account by timely written instruction, or does not specify a method of calculating the amount of the age 70 1/2 distribution which the Depositor will be taking from another IRA(s), no distribution will be made; however calculation of the current year Required Minimum Distribution amount which cannot be rolled over to another IRA will be made in accordance with Article IV, paragraph 2, option (b).

13. Distribution of the assets of the custodial account shall be made in accordance with the provisions of Article IV as the Depositor (or the Depositor’s beneficiary if the Depositor is deceased) shall elect by written instructions to the Custodian; subject, however, to the provisions of sections 401(a)(9), 408(a)(6) and 403(b)(10) of the Code, the regulations promulgated there under, Article VIII, paragraph 12 of this Agreement, and the following:

(i) If the Depositor dies before his/her entire interest in the custodial account has been distributed, and if the designated beneficiary of the Depositor is the Depositor’s surviving spouse, the spouse may treat the custodial account as his/her own individual retirement arrangement. This election will be deemed to have been made if the surviving spouse makes a regular IRA contribution to the custodial account, makes a rollover to or from such custodial account, or fails to receive a payment from the custodial account within the appropriate time period applicable to the deceased Depositor under section 401(a(9)(B) of the Code.

The provisions of this paragraph (13) of Article VIII shall prevail over the provisions of Article IV to the extent the provisions of this paragraph (13) are permissible under proposed and/or final regulations promulgated by the Internal Revenue Service.

14. In the event any amounts remain in the custodial account after the death of the Depositor, the rights of the Depositor under this Agreement shall thereafter be exercised by his or her beneficiary.

15. The Custodian is authorized to hire agents (including any transfer agent for Fund Shares) to perform certain duties under this Agreement.

16. This Agreement shall terminate coincident with the complete distribution of the assets of the Depositor’s account.

17. All notices to be given by the Custodian to the Depositor shall be deemed to have been given when mailed to the address of the Depositor indicated by the Custodian’s records.

18. Neither the Custodian nor the Funds shall be responsible for any losses, penalties or other consequences to the Depositor or any other person arising out of the making of, or the failure to make, any contribution or withdrawal.

19. In addition to the reports required by paragraph (2) of Article V, the Custodian shall periodically cause to be mailed to the Depositor in respect of each such period an account of all transactions affecting the custodial account during such period and a statement showing the custodial account as of the end of such period. If, within 30 days after such mailing, the Depositor has not given the Custodian written notice of any exception or objection thereto, the periodic accounting shall be deemed to have been approved and, in such case or upon the written approval of the Depositor, the Custodian and the Funds shall be released, relieved and discharged with respect to all matters and statements set forth in such accounting as though the account had been settled by judgment or decree of a court of competent jurisdiction.

20. In performing the duties conferred upon the Custodian by the Depositor there under, the Custodian shall act as the agent of the Depositor. The parties do not intend to confer any fiduciary duties on the Custodian or the Funds, and none shall be implied. Neither the Custodian nor the Funds shall be liable (and neither assumes any responsibility) for the collection of contributions, the deductibility or the propriety of any contribution under this Agreement, the selection of any Fund Shares for this custodial account, or the purpose or propriety of any distribution made in accordance with Article IV and Paragraph 12 or 13 of Article VIII, which matters are the sole responsibility of the Depositor or the Depositor’s beneficiary, as the case may be.

The Depositor and the successors of the Depositor, including any designated beneficiary, executor or administrator of the Depositor, shall, to the extent permitted by law, indemnify and hold the Custodian and the Funds and their affiliates, successors and assigns harmless from any and all claims, actions or liabilities of the Custodian, except such as may arise from the Custodian’s own bad faith, negligence, nonfeasance, or willful misconduct.

21. The Custodian shall be responsible solely for the performance of those duties expressly assigned to it in this Agreement and by operation of law. Neither the Custodian nor the Funds shall have any duty to account for deductible contributions separately from nondeductible contributions, unless required to do so by applicable law. In determining the taxable amount of a distribution, the Depositor shall rely only on his or her federal tax records, and the Custodian shall withhold federal income tax from any distribution from the custodial account as if the total amount of the distribution is includible in the Depositor’s income.

22. Except to the extent superseded by federal law, this Agreement shall be governed by, and construed, administered and enforced according to, the laws of the State of Delaware, and all contributions shall be deemed made in Delaware.

23. Participant — As referenced in the Adoption Agreement/Application and in any forms associated with this Custodial Agreement, carries the same definition as the Depositor identified in Article I and the Definitions Section of this Custodial Agreement.

GENERAL INSTRUCTIONS

(Section references are to the Internal Revenue Code unless otherwise noted.)

Purpose of Form

Form 5305-A is a model custodial account agreement that meets the requirements of section 408(a) and has been automatically approved by the IRS. An individual retirement account (IRA) is established after the form is fully executed by both the individual (Depositor) and the Custodian and must be completed no later than the due date of the individual’s income tax return for the tax year (without regard to extensions). This account must be created in the United States for the exclusive benefit of the Depositor or his or her beneficiaries.

Do not file Form 5305-A with the IRS. Instead, keep it for record purposes.

For more information on IRAs, including the required disclosures the Custodian must give the Depositor, see Pub. 590, Individual Retirement Arrangements (IRAs).

Definitions

Custodian. The Custodian must be a bank or savings and loan association, as defined in section 408(n), or any person who has the approval of the IRS to act as Custodian.

Depositor. The Depositor is the person who establishes the custodial account.

Identifying Number

The Depositor’s social security number will serve as the identification number of his or her IRA. An employer identification number (EIN) is required only for an IRA for

which a return is filed to report unrelated business taxable income. An EIN is required for a common fund created for IRAs.

Traditional IRA for Nonworking Spouse

Form 5305-A may be used to establish the IRA custodial account for a nonworking spouse. Contributions to an IRA custodial account for a nonworking spouse must be made to a separate IRA custodial account established by the nonworking spouse.

SPECIFIC INSTRUCTIONS

Article IV. Distributions made under this article may be made in a single sum, periodic payment, or a combination of both. The distribution option should be reviewed in the year the Depositor reaches age 70 1/2 to ensure that the requirements of section 408(a)(6) have been met.

Article VIII. Article VIII and any that follow it may incorporate additional provisions that are agreed to by the Depositor and Custodian to complete the agreement. They may include, for example, definitions, investment powers, voting rights, exculpatory provisions, amendment and termination, removal of the Custodian, Custodian’s fees, state law requirements, Federal Law requirements, regulatory requirements, beginning date of distributions, accepting only cash, treatment of excess contributions, prohibited transactions with the Depositor, etc. Use additional pages if necessary and attach them to this form.

Note: Form 5305-A may be reproduced and reduced in size.

Simplified Employee
Pension (SEP) IRA

A SEP is a written arrangement (a plan) that allows your employer to make contributions toward your retirement. Contributions are made to a Traditional Individual Retirement Account (Traditional IRA). Your employer will provide you with a copy of the agreement containing participation rules and a description of how employer contributions may be made to your IRA. Your employer must also provide you with a copy of the completed Form 5305-SEP and a yearly statement showing any contributions to your IRA.

• If you are an employer who is establishing a SEP Plan, please refer to the IRS website at www.IRS.gov to obtain a copy of Form 5305-SEP.

• Your employer has adopted a SEP Plan for your retirement needs. Please read the information on Form 5305-SEP as it contains important information on how a SEP works and your rights.

• Your employer will determine the amount to be contributed to your IRA each year. The amount for any year is limited to the smaller of the annual 415(c) dollar limitation (adjusted for cost-of-living, if applicable) or 25% of your compensation. Please see Form 5305-SEP for current limitations on benefits and contributions (COLA) limits.

• All amounts contributed to your IRA by your employer belong to you even after you stop working for the employer.

• Employer contributions to your SEP-IRA are excluded from your income unless there are contributions in excess of the applicable limit.

• You may make regular IRA contributions to an IRA. However, the amount you can deduct may be reduced or eliminated because, as a participant of a SEP, you are covered by an employer retirement plan. Please consult IRS Publication 590 regarding IRA contributions.

Roth Individual
Retirement Account

Disclosure Statement

The following information is the disclosure statement required by Federal tax regulations. You should read this disclosure statement, the Custodial Account Agreement, and the prospectus for the Longleaf Partners Funds in which your Roth Individual Retirement Account (Roth IRA) contributions will be invested.

REVOCATION OF YOUR ROTH IRA

You have the right to revoke your Roth IRA and receive the entire amount of your initial contribution by notifying PFPC Trust Company, the Custodian of your Roth IRA, in writing within seven (7) calendar days of establishment of your Roth IRA. If you revoke your Roth IRA within seven days, you are entitled to a return of the entire amount paid by you, without adjustment for such items as sales commission, administrative expenses, or fluctuations in market value. If you decide to revoke your Roth IRA, notice should be delivered or mailed to:


First Class Mail:		Overnight Express:
Longleaf Partners Funds		Longleaf Partners Funds
c/o PFPC Inc.		c/o PFPC Inc.
P.O. Box 9694		101 Sabin Street
Providence, RI 02940-9694		Pawtucket, RI 02860
		(508) 871-8800

This notice should be signed by you and include the following:

1. The date;

2. A statement that you elect to revoke your Roth IRA;

3. Your Roth IRA account number;

4. The date your Roth IRA was established;

5. Your signature and your printed or typed name.

Mailed notice will be deemed given on the date that it is postmarked, if it is properly addressed and deposited either in the United States mail, first class postage prepaid, or with an Internal Revenue Service (IRS) approved overnight service. This means that if you mail your notice it must be postmarked on or before the seventh calendar day after your Roth IRA was opened. A revoked Roth IRA will be reported to the IRS and the Depositor on Forms 1099-R and 5498.

YOUR ROTH INDIVIDUAL
RETIREMENT ACCOUNT

You have opened a Roth Individual Retirement Account which is an account for the exclusive benefit of you and your beneficiaries, created by a written instrument (the Custodial Account Agreement). The following requirements apply to your Roth IRA:

1. Contributions, transfers and rollovers may be made only in “cash” by check, draft, or other form acceptable to the Custodian;

2. The Custodian must be a bank, trust company, savings and loan association, credit union or a person who is approved to act in such capacity by the Secretary of the Treasury;

3. No part may be invested in life insurance contracts;

4. Your interest must be nonforfeitable;

5. The assets of the custodial account may not be mixed with other property except in a common investment fund;

6. There is no age limit on contributions as long as you have earned income;

7. Your adjusted gross income must be within the eligibility limits (discussed under “Contributions” below); and

8. There are no mandatory withdrawals during your lifetime.

ELIGIBILITY

You are permitted to make a regular contribution to your Roth IRA for any taxable year if you receive compensation for such taxable year. Compensation includes salaries, wages, tips, commissions, bonuses, alimony, royalties from creative efforts and “earned income” in the case of self-employment.

CONTRIBUTIONS

Subject to the income eligibility limits described below, the maximum allowable contribution to your IRAs (Roth, deductible, and non-deductible) each tax year is the lesser of (a) $4,000* or (b) 100% of your compensation or earnings from self-employment. If your spouse is not employed or earns less than you earn, you may also contribute to a Roth IRA on behalf of your spouse. The maximum contribution to your spouse’s Roth IRA is the lesser of (a) $4,000* or (b) the combined compensation of both spouses, minus the dollar amount of the IRA contribution made by you. The total combined contribution to each individual’s IRAs (Roth, deductible, and non-deductible) cannot exceed these limits. Contributions made to SEP or SIMPLE IRAs are not taken into account for purposes of the $4,000 contribution limit. Additionally, Roth IRA contributions cannot be commingled with SEP or SIMPLE IRA contributions. Any contribution made to your Roth IRA will be treated as a contribution for the year it is received, unless the contribution is made between January 1 and April 15, and you have identified the contribution as a prior year contribution. A contribution made pursuant to a payroll deduction or systematic investment plan may only be characterized as a contribution for the year in which it is received by PFPC (not the date paid or sent from your account).



Roth IRA Contribution Limits*

	If Under	If Age 50
Tax Year	Age 50	or Over

2005	$4,000	$4,500
2006-2007	$4,000	$5,000
2008	$5,000	$6,000

Note: For tax years after 2008, the above limits will be increased to reflect a cost-of-living adjustment, if any.

Contributions can continue to be made to a Roth IRA after you attain age 70 1/2 as long as the requirements of earned income are met.

There is a phase-out of eligibility to make a Roth IRA contribution if your adjusted gross income (AGI) is between certain levels. For a single depositor, the $4,000 maximum annual contribution is phased out to zero between AGI of $95,000 and $110,000; for a married depositor who files jointly, between AGI of $150,000 and $160,000; and for a married depositor who files separately, between $0 and $10,000. Single filers with AGI above $110,000, joint filers with AGI above $160,000 and married separate filers with AGI above $10,000 may not contribute to a Roth IRA. These limits may be adjusted from time to time by the Internal Revenue Service. Please refer to IRS Publication 590 for more information.

ROTH CONVERSIONS

You may convert a Traditional or SEP IRA into a Roth IRA if your AGI (single or joint) does not exceed $100,000 for the tax year unless you are married and file separately. (If you are a married individual, filing a separate return, and have lived apart from your spouse for the entire year, you may be eligible to be treated as a single taxpayer.) For purposes of the conversion, neither the conversion amount nor the amount of any required minimum distribution from your Traditional IRA is included in the AGI limit of $100,000. If a distribution converted from a Traditional IRA is deposited to your Roth IRA within 60 calendar days of receipt,

the amount of the conversion distribution will be taxed as ordinary income, except that the amount of any distribution from the Traditional IRA which represents the return of non-deductible contributions is not taxed. The IRS enforces the 60-day time limit strictly. You may not convert any portion of a Required Minimum Distribution (RMD). The 10% penalty for distributions under age 59 1/2 will not apply to the amount converted if held in your Roth IRA for at least five years and certain other criteria are met. See the section on Taxation of Distributions below. Your Traditional IRA may also be converted to a Roth IRA by means of a direct transfer between the two financial institutions.

RECHARACTERIZATION OF CONTRIBUTIONS

All or part of a contribution you make to your Roth IRA, along with any allocable earnings or losses, may be recharacterized and treated as if made to your Traditional IRA on the date the contribution was originally made to your Roth IRA. All or part of a contribution you make to your Traditional IRA, may be recharacterized and treated as if made to your Roth IRA on the date the contribution was originally made to your Traditional IRA. Recharacterization of a contribution is irrevocable, and must be completed on or before the due date, including extensions, for filing your Federal income tax return for the tax year for which the contribution was originally made. Please refer to IRS Publication 590 for more information.

Recharacterization of a Conversion
(Correction Process)

You may correct a conversion made in error by recharacterizing the conversion. A conversion is recharacterized by moving the conversion amount, plus allocable earnings back to a Traditional IRA. The correction must take place prior to the due date, including extensions, for filing your Federal income tax return for the tax year in which the conversion was originally made. A recharacterized conversion may be converted back to a Roth IRA, however limitations may apply. Assets that have been recharacterized back to a Traditional IRA cannot be reconverted to a Roth IRA in the same tax year or within thirty days.

A recharacterized conversion is reported as a distribution from the Roth IRA (IRS Form 1099-R) and a recharacterization contribution to the Traditional IRA (IRS Form 5498) for the tax year in which the recharacterization occurs. The rules regarding recharacterization are complex and you should consult a competent tax advisor prior to any recharacterization or reconversion.

Recharacterization forms are available from the Custodian and should be used for all recharacterization requests.

INCOME TAX DEDUCTION

Your contribution to a Roth IRA is not deductible on your Federal income tax return.

TAXATION OF DISTRIBUTIONS

Any distribution, or portion of any distribution, which consists of the return of contributions you made to your Roth IRA is not subject to Federal income tax. For Federal income tax purposes, contributions are presumed to be withdrawn first, then conversion contributions, then earnings.

The earnings on your contributions will not be subject to Federal income tax when withdrawn if the assets being withdrawn have been in your Roth IRA for at least five (5) years from the first taxable year in which a contribution, including rollover and conversion contributions, was made to the Roth IRA. Additionally, any one of the following criteria must be met:

1. you are over the age of 59 1/2, or

2. used toward the expenses of a first time home purchase up to a lifetime limit of $10,000, or

3. made because you became disabled, or

4. due to your death.

The earnings portion of distributions made prior to the end of the five-year holding period, regardless of the reason, are subject to ordinary income tax plus a 10% penalty tax on early distributions. Distribution of conversion contributions prior to five years from the tax year of conversion are subject to the 10% penalty tax unless one of the exceptions listed below under Early Distributions applies, however, such distributions are not subject to ordinary income tax. Exceptions to the 10% additional tax on early distributions are described below in the section on Penalty Tax on Certain Transactions.

Rollovers from one Roth IRA to another Roth IRA are permitted within the 60 calendar day period after receipt. The amount rolled over within 60 days will not be taxable. The IRS enforces the 60-day time limit strictly. Rollovers from a Roth IRA to a Coverdell ESA, Traditional, SEP or SIMPLE IRA are not permitted.

If you make a tax-free rollover of any part of a distribution from a Roth IRA, you cannot, within a 1-year period, make a tax-free rollover of any later distribution from that same Roth IRA. You also cannot make a tax-free rollover of any amount distributed, within the same 1-year period, from the Roth IRA into which you made the tax-free rollover.

Distributions under $10 will not be reported to you on IRS Form 1099-R as allowed under IRS regulations. However, you must still report these distributions to the IRS on IRS Form 1040 as well as other forms that may be required to properly file your tax return.

PENALTY TAX ON CERTAIN TRANSACTIONS

Excess Contributions

Amounts contributed to your Roth IRA in excess of the allowable limit (including any over-contribution resulting from contributions through a payroll deduction or systematic investment plan) will be subject to a non-deductible excise tax of 6% for each year until the excess is used up as an allowable contribution (in a subsequent year) or returned to you. The 6% excise tax on excess contributions will not apply if the excess contribution and earnings allocable to it are distributed by the due date for your Federal income tax return, including extensions. If such a distribution is made, only the earnings are considered taxable income for the tax year in which the excess was contributed to the IRA. The return of earnings may also be subject to the 10% excise tax on early distributions discussed below. An IRS Form 1099-R will be issued for the year in which the distribution occurred, not the year in which the excess contribution was made. The 1099-R applies to amounts removed during the period January 1 through and including the due date of your Federal income tax return for the prior tax year. Consult IRS Publication 590 for more information pertaining to excess contributions. If you make an excess contribution to your IRA and it is not corrected on a timely basis, an excise tax of 6% is imposed on the excess amount. This tax will apply each year to any part or all of the excess that remains in your account.

Earnings will be removed with the excess contribution if corrected before the Federal income tax-filing deadline (including extensions), pursuant to Internal Revenue Code Section 408(d)(4) and Internal Revenue Service (“IRS”) Publication 590. The IRS may impose a 10% early distribution penalty on the earnings if you are under age 59 1/2.

Excess contributions (plus or minus the NIA) that are distributed by your Federal income tax return due date (plus extensions) will be considered corrected, thus avoiding an excess contribution penalty.

Early Distributions

The earnings portion of distributions made prior to the end of the five-year holding period or which fail to meet the criteria outlined above in Taxation on Distributions are subject to ordinary income taxes. The earnings portion of the distribution is also subject to the 10% penalty tax on early distributions unless one of the following exceptions applies to the distribution:

1. you are over age 59 1/2, or

2. due to your death, or

3. made because you became disabled, or

4. used specifically for deductible medical expenses which exceed 7.5% of your adjusted gross income, or

5. used for health insurance cost due to your unemployment, or

6. used for higher education expenses defined in section 529(e)(3) of the Internal Revenue Code, or

7. used toward the expenses of a first time home purchase up to a lifetime limit of $10,000, or

8. part of a scheduled series of substantially equal payments over your life, or over the joint life expectancy of you and a beneficiary. If you request a distribution in the form of a series of substantially equal payments, and you modify the payments before 5 years have elapsed and before attaining age 59 1/2, the penalty tax will apply retroactively to the year payments began through the year of such modification, or

9. required because of an IRS levy.

The 10% penalty tax is in addition to any Federal income tax that is owed at distribution. For more information on the 10% penalty tax and the exceptions listed above, consult IRS Publication 590.

REQUIRED DISTRIBUTIONS

You are not required to take distributions from your Roth IRA during your lifetime.

DISTRIBUTION DUE TO DEATH

If you have properly designated a beneficiary, the entire value of your IRA must be distributed to your beneficiaries within five years after your death, unless each designated beneficiary elects in writing, no later than September 30th of the year following the year in which you die, to take distributions over his/her life expectancy. These distributions must commence no later than December 31st of the calendar year following the calendar year of your death. Your designated beneficiary may name a subsequent beneficiary. Any subsequent beneficiaries must take distributions at least as frequently as the original designated beneficiary.

If you do not properly designate a beneficiary, or all designated beneficiaries have predeceased you, your spouse shall become the beneficiary or, if no surviving spouse or unmarried, the distribution will be made to your estate. Consult IRS Publication 590 or a competent estate-planning advisor for a complete discussion of rules governing distributions due to death.

If your designated beneficiary is your spouse, then he/she may elect to either treat the Roth IRA as his/her own or to rollover the funds into his/her own Roth IRA. Consult IRS Publication 590 for a complete discus-

sion of rules governing distributions due to death.

In order to ensure the proper tax reporting of Roth IRA distributions to the IRS, you are required to complete the appropriate distribution form for all distributions. Distribution forms are available from the Custodian and may be obtained by contacting PFPC or on our website www.longleafpartners.com.

PROHIBITED TRANSACTIONS

If you or your beneficiary engage in any prohibited transaction (such as any sale, exchange, borrowing, or leasing of any property between you and your Roth IRA; or any other interference with the independent status of the account), the account will lose its exemption from tax and be treated as having been distributed to you. The value of the earnings on your account will be includible in your gross income. If you are under age 59 1/2, you would also be subject to the 10% penalty tax on early distributions.

If you or your beneficiary use (pledge) all or any part of your Roth IRA as security for a loan, then the portion so pledged will be treated as if distributed to you, and will be taxable to you as a nonqualified distribution, and subject to a 10% penalty tax on the taxable portion of such distribution if you have not attained age 59 1/2 during the year in which you make such a pledge.

FEDERAL ESTATE AND GIFT TAXES

INCOME TAX WITHHOLDING

The Custodian is required to withhold Federal income tax from any distribution from your Roth IRA to you at the rate of 10% unless you choose not to have tax withheld. You may elect out of withholding by advising the Custodian in writing, prior to the distribution, that you do not want tax withheld from the distribution. This election may be made on any other form acceptable to the Custodian. If you do not elect out of tax withholding, you may direct the Custodian to withhold an additional amount of tax in excess of 10%, but not more than 90%.

ADDITIONAL INFORMATION

For more detailed information, you may obtain IRS Publication 590, Individual Retirement Arrangements (IRAs) from any district office of the Internal Revenue Service or by calling 1-800-TAX-FORM.

Any Roth IRA transaction may have tax consequences; consult your tax advisor to obtain information about the tax consequences in connection with your particular circumstances.

INFORMATION ABOUT YOUR INVESTMENTS

A mutual fund investment involves investment risks, including possible loss of principal. In addition, growth in the value of your account is neither guaranteed nor projected due to the characteristics of a mutual fund investment. Detailed information about the shares of each Longleaf Partners fund available for investment in your Roth IRA must be furnished to you in the form of a prospectus. The method for computing and allocating annual earnings is set forth in the prospectus. (See prospectus section entitled “Dividends and Distributions”). If you made an initial contribution of $1,000 on the first day of a calendar year and no further investment during that year, your contribution would also be subject to certain costs and expenses that would reduce any return you might obtain from your investment. (See the prospectus section entitled “Fund Fees and Expenses”, the “Expense Example” in the Annual Report and the sections referred to therein.)

Each Fund in which your Roth IRA is invested pays fees for investment advisory, administrative, and other services. For further information regarding expenses, earnings, and distributions, see the Funds’ financial statements, prospectus and/or statement of additional information.

In the event that any Fund held in the Custodial Account is liquidated or is otherwise made unavailable by the Sponsor as a permissible investment for a Custodial Account hereunder, the liquidation or other proceeds of such Fund shall be invested in accordance with the instructions of the Depositor; if the Depositor does not give such instructions, or if such instructions are unclear or incomplete in the opinion of the Service Company, the Service Company may invest such liquidation or other proceeds in such other Fund (including a money market fund if available) as the Sponsor designates, and neither the Service Company nor the Custodian will have any responsibility for such investment.

FEES AND CHARGES

The Longleaf Partners Funds charge no annual maintenance fees on IRA accounts.

IRS APPROVED FORM

Your Roth IRA is the Internal Revenue Service’s model custodial account contained in IRS Form 5305-RA. Certain additions have been made in Article IX of the form. By following this form, your Roth IRA meets the requirements of the Internal Revenue Code. However, the IRS has not endorsed the merits of the investments allowed under the Roth IRA. This form cannot be used in connection with Coverdell Education Savings Accounts, SEP, SIMPLE or Traditional IRAs.

Custodial Account Agreement

(Under section 408A of the Internal Revenue Code—Form 5305-RA (March 2002))

The Depositor whose name appears in the accompanying Application is establishing a Roth individual retirement account (Roth IRA) under section 408A to provide for his or her retirement and for the support of his or her beneficiaries after death. The Custodian, PFPC Trust Company, has given the Depositor the disclosure statement required under Regulations section 1.408-6.

The Depositor and the Custodian make the following agreement:

Article I

Except in the case of a rollover contribution described in section 408A(e), a recharacterized contribution described in

section 408A(d)(6), or an IRA Conversion Contribution, the Custodian will accept only cash contributions and only up to a maximum amount of $3,000 per year for tax years 2002 through 2004. That contribution limit is increased to $4,000 for tax years 2005 through 2007 and $5,000 for 2008 and thereafter. For individuals who have reached the age of 50 before the close of the tax year, the contribution limit is increased to $3,500 per year for tax years 2002 through 2004, $4,500 for 2005, $5,000 for 2006 and 2007, and $6,000 for 2008 and thereafter. For tax years after 2008, the above limits will be increased to reflect a cost-of-living adjustment, if any.

Article II

1. The annual contribution limit described in Article I is gradually reduced to $0 for higher income levels. For a single depositor, the annual contribution is phased out between adjusted gross income (AGI) of $95,000 and $110,000, for a married depositor filing jointly, between AGI of $150,000 and $160,000; and for a married depositor filing separately, between AGI of $0 and $10,000. In the case of a conversion, the Custodian will not accept IRA Conversion Contributions in a tax year if the depositor’s AGI for the tax year the funds were distributed from the other IRA exceeds $100,000 or if the depositor is married and files a separate return. Adjusted gross income is defined in section 408A(c)(3) and does not include IRA Conversion Contributions.

2. In the case of a joint return, the AGI limits in the preceding paragraph apply to the combined AGI of the Depositor and his or her spouse.

Article III

The Depositor’s interest in the balance in the custodial account is nonforfeitable.

Article IV

1. No part of the custodial account funds may be invested in life insurance contracts, nor may the assets of the custodial account be commingled with other property except in a common trust fund or common investment fund (within the meaning of section 408(a)(5)).

2. No part of the custodial account funds may be invested in collectibles (within the meaning of section 408(m)) except as otherwise permitted by section 408(m)(3), which provides an exception for certain gold, silver, and platinum coins, coins issued under the laws of any state and certain bullion.

Article V

1. If the Depositor dies before his or her entire interest is distributed to him or her and the grantor’s surviving spouse is not the sole beneficiary, the remaining interest will be distributed in accordance with (a) below or, if elected or there is no designated beneficiary, in accordance with (b) below:

(a) The remaining interest will be distributed, starting by the end of the calendar year following the year of the Depositor’s death, over the designated beneficiary’s remaining life expectancy as determined in the year following the death of the Depositor.

(b) The remaining interest will be distributed by the end of the calendar year containing the fifth anniversary of the Depositor’s death.

2. The minimum amount that must be distributed each year under paragraph 1(a) above is the account value at the close of business on December 31 of the preceding year divided by the life expectancy (in the single life table in Regulations section 1.401 (a)(9)-9) of the designated beneficiary using the attained age of the beneficiary in the year following the year of the Depositor’s death and subtracting 1 from the divisor for each subsequent year.

3. If the Depositor’s surviving spouse is the designated beneficiary, such spouse will then be treated as the Depositor.

Article VI

1. The Depositor agrees to provide the Custodian with information necessary for the Custodian to prepare any reports required under sections 408(i) and

408A(d)(3)(E), Regulations sections 1.408-5 and 1.408-6, and under guidance published by the Internal Revenue Service.

2. The Custodian agrees to submit reports to the Internal Revenue Service and the Depositor as prescribed by the Internal Revenue Service.

Article VII

Notwithstanding any other articles which may be added or incorporated, the provisions of Articles I through IV and this sentence will be controlling. Any additional articles that are not consistent with section 408A, the related regulations, and other published guidance will be invalid.

Article VIII

This agreement will be amended from time to time to comply with the provisions of the Code, related regulations, and other published guidance. Other amendments may be made with the consent of the persons whose signatures appear on the IRA application.

Article IX

1. All funds in the custodial account (including earnings) shall be invested in shares of any one or more of the registered investment companies (“mutual funds”), or portfolios thereof, which have been designated by the company listed on the account opening documents (“company”) as eligible for investment under this custodial account. The mutual funds, portfolios, and company shall

be collectively referred to herein as “the Funds” and the shares of the Funds shall be collectively referred to as “Fund Shares.” Fund Shares shall be purchased at the public offering price for Fund Shares next to be determined after receipt of the contribution by the Custodian or its agent.

2. The shareholder of record of all Fund Shares shall be the Custodian or its nominee.

3. The Depositor shall, from time to time, direct the Custodian to invest the funds of his/her Custodian account in Fund Shares. Any Funds, which are not directed as to investment, shall, at the sole discretion of the Custodian, be held uninvested until such direction is received from the Depositor or be returned to the Depositor without being deemed to have been contributed to his/her custodial account. The Depositor shall be the beneficial owner of all Fund Shares held in the custodial account, and the Custodian shall not vote any such shares except upon written direction of the Depositor.

4. The Custodian agrees to forward, or to cause to be forwarded, to every Depositor the then-current prospectus(es) of the Funds, as applicable, which have been designated by the company as eligible for investment under the custodial account and selected by the Depositor for such investment, and all notices, proxies and related proxy soliciting materials applicable to said Fund Shares received by it.

5. Each Depositor shall have the right by written notice to the Custodian to designate or to change a beneficiary to receive any benefit to which such Depositor may be entitled in the event of his/her death prior to the complete distribution of such benefit. A beneficiary designation will be deemed to be in effect when received in good order by the Custodian. If no such designation is in effect at the time of the Depositor’s death, or if the designated beneficiary has predeceased the Depositor, the spouse shall become the beneficiary or, if no surviving spouse or unmarried, the beneficiary shall be the Depositor’s estate.

6. (a) The Custodian shall have the right to receive rollover and conversion contributions as allowed under IRS Code Section 408A, however it is the Depositor’s responsibility to ensure that such rollovers and conversions are eligible to be contributed to this Roth IRA. The Custodian reserves the right to refuse to accept any property, which is not in the form of cash.

dial account or the income arising there from, any transfer taxes incurred, all other administrative expenses incurred, specifically including, but not limited to, administrative expenses incurred by the Custodian in the performance of its duties and fees for legal services rendered to the Custodian, and the Custodian’s compensation may be paid by the Depositor and, unless so paid within such time period as the Custodian may establish, shall be paid from the Depositor’s custodial account. The Custodian reserves the right to change or adjust its compensation upon 30 days advance notice to the Depositor.

9. The benefits provided hereunder shall not be subject to alienation, assignment, garnishment, attachment, execution or levy of any kind, and any attempt to cause such benefits to be so subjected shall not be recognized, except to such extent as may be required by law.

10. The Custodian may rely upon any statement by the Depositor (or the Depositor’s beneficiary if the Depositor is deceased) when taking any action or determining any fact or question which may arise under this Custodial Agreement. The Depositor hereby agrees that neither the Custodian nor the Funds will be liable for any loss or expense resulting from any action taken or determination made in reliance on such statement. The Depositor assumes sole responsibility for assuring that contributions to the custodial account satisfy the limits specified in the appropriate provisions of the Code.

11. The Custodian may resign at any time upon 30 days written notice to the Depositor and the Funds, and may be removed by the Depositor at any time upon 30 days written notice to the Custodian. Upon the resignation or removal of the Custodian, a successor Custodian shall be appointed within 30 days of such resignation notice and in the absence of such appointment, the Custodian shall appoint a successor unless the Agreement is sooner terminated. Any successor Custodian shall be a bank (as defined in section 408(n) of the Code) or such other person found qualified to act as a Custodian under an individual account plan by the Secretary of the Treasury or his delegate. The appointment of a successor Custodian shall be effective upon receipt by the Custodian of such successor’s written acceptance that shall be submitted to the Custodian, the Funds, and the Depositor. Within 30 days of the effective date of a successor Custodian’s appointment, the Custodian shall transfer and deliver to the successor Custodian applicable account records and assets of the custodial account (reduced by any unpaid amounts referred to in paragraph 8 of this Article IX). The successor Custodian shall be subject to the provisions of this Agreement (or any successor thereto) on the effective date of its appointment.

12. The Custodian shall, from time to time, in accordance with instructions in writing from the Depositor (or the Depositor’s beneficiary if the Depositor is deceased), make distributions out of the custodial account to the Depositor in the manner and amounts as may be specified in such instructions (reduced by any amounts referred to in Article IX, paragraph 8). A Roth IRA Withdrawal Authorization form is available from the Custodian, and should be obtained and used to request any distribution from your Roth IRA. The Custodian assumes (and shall have) no responsibility to make any distribution from the custodial account unless and until such written instructions specify the occasion for such distribution and the elected manner of distribution. Prior to making any such distribution from the custodial account, the Custodian shall be furnished with any and all applications, certificates, tax waivers, signature guarantees, and other documents (including proof of any legal representative’s authority) deemed necessary or advisable by the Custodian, but the Custodian shall not be liable for complying with written instructions which appear on their face to be genuine, or for refusing

to comply if not satisfied such instructions are genuine, and assumes no duty of further inquiry. Upon receipt of proper written instructions as required above, the Custodian shall cause the assets of the custodial account to be distributed in cash and/or in kind, as specified in such written instructions.

13. No distributions are required to be taken from the Roth IRA during the lifetime of the Depositor. If the Depositor desires to take distributions from the Roth IRA, such distributions shall be made, as the Depositor shall elect by written instructions to the Custodian.

14. In the event any amounts remain in the custodial account after the death of the Depositor, his or her beneficiary shall thereafter exercise the rights of the Depositor as described in Article V.

15. The Custodian is authorized to hire agents (including any transfer agent for Fund Shares) to perform certain duties under this Agreement.

16. This Agreement shall terminate coincident with the complete distribution of the assets of the Depositor’s account.

17. All notices to be given by the Custodian to the Depositor shall be deemed to have been given when mailed to the address of the Depositor indicated by the Custodian’s records.

18. Neither the Custodian nor the Funds shall be responsible for any losses, penalties or other consequences to the Depositor or any other person arising out of the making of, or the failure to make, any contribution or withdrawal.

19. In addition to the reports required by paragraph (2) of Article VI, the Custodian shall periodically cause to be mailed to the Depositor in respect of each such period an account of all transactions affecting the custodial account during such period and a statement showing the custodial account as of the end of such period. If, within 30 days after such mailing, the Depositor has not given the Custodian written notice of any exception or objection thereto, the periodic accounting shall be deemed to have been approved and, in such case or upon the written approval of the Depositor, the Custodian and the Funds shall be released, relieved and discharged with respect to all matters and statements set forth in such accounting as though the account had been settled by judgment or decree of a court of competent jurisdiction.

20. In performing the duties conferred upon the Custodian by the Depositor hereunder, the Custodian shall act as the agent of the Depositor. The parties do not intend to confer any fiduciary duties on the Custodian or the Funds, and none shall be implied. Neither the Custodian nor the Funds shall be liable (and neither assumes any responsibility) for the collection of contributions, the propriety of any contribution under this Agreement, the selection of any Fund Shares for this custodial account, or the purpose or propriety of any distribution made, which matters are the sole responsibility of the Depositor or the Depositor’s beneficiary, as the case may be.

21. The Custodian shall be responsible solely for the performance of those duties expressly assigned to it in this Agreement and by operation of law. In determining the taxable amount of a distribution, the Depositor shall rely only on his or her federal tax records, and the Custodian shall withhold federal income tax from any distribution from the custodial account as if the total amount of the distribution is includible in the Depositor’s income.

22. Except to the extent superseded by federal law, this Agreement shall be governed by, and construed, administered and enforced according to, the laws of the State of Delaware, and all contributions shall be deemed made in Delaware.

23. Notwithstanding any provisions of this Agreement to the contrary, specifically including but not limited to paragraph 3 of Article V and Article VII, a spouse beneficiary shall have available all death benefits options available under current IRA code section 408(a) even if the spouse is not the sole beneficiary.

24. Notwithstanding any provisions of this Agreement to the contrary, the Depositor is deemed to have elected not to designate this account as a Roth Conversion IRA. Any reference on the Application to conversion is simply to clarify instructions from the Depositor and does not in any way characterize the Roth IRA being established as a Roth Conversion IRA subject to Article I.

25. Participant—As referenced in the Adoption Agreement/Application and in any forms associated with this Custodial Agreement, carries the same definition as the Depositor identified in Article I and the Definitions Section of this Custodial Agreement.

GENERAL INSTRUCTIONS

(Section references are to the Internal Revenue Code unless otherwise noted.)

Purpose of Form

Form 5305-RA is a model custodial account agreement that meets the requirements of section 408A and has been automatically approved by the IRS. A Roth individual retirement account (Roth IRA) is established after the form is fully executed by both the individual (Depositor) and the Custodian. This account must be created in the United States for the exclusive benefit of the Depositor or his or her beneficiaries.

Do not file Form 5305-RA with the IRS. Instead, keep it for record purposes.

Unlike contributions to traditional individual retirement arrangements, contributions to a Roth IRA are not deductible from the grantor’s gross income; and distributions after 5 years that are made when the grantor is 591/2 years of age or older or on account of death, disability, or the purchase of a home by a first-time home buyer (limited to $10,000), are not includible in gross income. For more information on Roth IRAs, including the required disclosures the Custodian must give the Depositor, see Pub. 590, Individual Retirement Arrangements (IRAs).

Definitions

IRA Conversion Contributions. IRA Conversion Contributions are amounts rolled over, transferred, or considered transferred from a non-Roth IRA to a Roth IRA. A non-Roth IRA is an individual retirement account or annuity described in section 408(a) or 408(b), other than a Roth IRA.

Custodian. The custodian must be a bank or savings and loan association, as defined in section 408(n), or any person who has the approval of the IRS to act as custodian.

Depositor. The depositor is the person who establishes the custodial account.

SPECIFIC INSTRUCTIONS

Article I. The Depositor may be subject to a 6 percent tax on excess contributions if (1) contributions to other individual retirement arrangements of the Depositor have been made for the same tax year, (2) the Depositor’s adjusted gross income exceeds the applicable limits in Article II for the tax year, or (3) the Depositor’s and spouse’s compensation does not exceed the amount contributed for them for the tax year. The Depositor should see the disclosure statement or Pub. 590 for more information.

Article V. This article describes how distributions will be made from the Roth IRA after the Depositor’s death. Elections made pursuant to this article should be reviewed periodically to ensure they correspond to the Depositor’s intent. Under paragraph 3 of Article V, the Depositor’s spouse is treated

as the owner of the Roth IRA upon the death of the Depositor, rather than as the beneficiary. If the spouse is to be treated as the beneficiary, and not the owner, an overriding provision should be added to Article IX.

Article IX. Article IX and any that follow it may incorporate additional provisions that are agreed to by the Depositor and Custodian to complete the agreement. They may include, for example, definitions, investment powers, voting rights, exculpatory provisions, amendment and termination, removal of the custodian, custodian’s fees, state law requirements, beginning date of distributions, accepting only cash, treatment of excess contributions, prohibited transactions with the Depositor, etc. Attach additional pages if necessary.

PFPC Trust Company
Privacy Principles

PFPC Trust Company serves as Custodian to self-directed savings and retirement accounts, such as Individual Retirement Accounts, Qualified Plans, 403(b)(7) Plans (the “Accounts”) owned by shareholders of investment companies for whom our affiliated company, PFPC, Inc. serves as transfer and shareholder servicing agent (the “Funds”). You are receiving this notice because you own or are considering establishing an Account that contains an investment in shares of a Fund. PFPC Trust Company is committed to maintaining the privacy of Account owners and to safeguarding their nonpublic personal information. We collect nonpublic personal information from Account applications and other forms that Account owners send to establish and maintain an Account. PFPC Trust Company may also have access to specific information regarding an Account owner’s transactions with the Funds. We do not disclose any nonpublic personal information about any Account owner or former Account owner to anyone, except as permitted by law or as necessary in order to service the Account.

PFPC Trust Company restricts access to nonpublic personal information about the Account owners to our employees with a legitimate business need for the information. PFPC Trust Company maintains physical, electronic and procedural safeguards designed to protect the nonpublic personal information of Account owners.

Intentionally Left Blank

(LOGO)

Longleaf Partners Funds ^®

c/o PFPC

P.O. Box 9694

Providence, RI 02940-9694

(800) 445-9469

www.longleafpartners.com

Exhibit 23(h)6

Longleaf Partners Funds ^® .

simple ira
Disclosure Statement

Account Agreement

Investment Counsel:
Southeastern Asset Management, Inc.
Memphis, TN

Plan Administrative Agent:
PFPC INC.
Westborough, MA

Trustee:
State Street Bank And Trust Co
Boston, MA

CONTENTS






Application Instructions			1




SIMPLE Individual Retirement Account Disclosure Statement			2




SIMPLE Individual Retirement Custodial Account Agreement			7




PFPC Trust Company Privacy Principles			12




SIMPLE IRA Employee Application and Adoption Agreement			13




SIMPLE IRA Transfer of Assets			15




Withdrawal Authorization Form			17

APPLICATION INSTRUCTIONS

DO NOT USE THIS FORM TO ESTABLISH A COVERDELL ESA, ROTH, SEP, OR TRADITIONAL IRA.

HOW TO COMPLETE THE ENCLOSED FORMS

If you are opening a SIMPLE IRA that will not contain contributions that are being transferred from another SIMPLE IRA:

To establish a SIMPLE IRA, please complete the “SIMPLE IRA Employee Application and Adoption Agreement” (application). Please note that the Applicant’s name must be that of an individual, not a business, and we must have the complete name and address of your employer.

Please make sure a copy of your employer’s SIMPLE IRA plan document is attached. Your employer’s SIMPLE plan must permit each eligible employee to select a financial institution that will serve as the Custodian, Trustee, or issuer of the SIMPLE IRA.

• The maximum allowable contribution to your SIMPLE IRA for tax year 2006 is 100% of your salary up to $10,000 as deferred compensation. This limit is in addition to your employer’s matching or non-elective contributions. No other contributions are allowed to your SIMPLE IRA. In the case of an eligible employee who will be 50 or older before the end of the calendar year, the above limitation is $12,500 for 2006 and later years.

• Prospectuses for the Funds may be obtained from the fund at 1-800-445-9469. Please be sure to read the prospectus carefully before investing.

• Please be sure to read carefully the “Terms and Conditions” section of the SIMPLE IRA Application and Adoption Agreement.

• There is a no annual custodial maintenance fee on each account in the fund.

If you are opening a SIMPLE IRA that will contain contributions which have been transferred from another SIMPLE IRA:

• Please read and follow the general instructions above for establishing a SIMPLE IRA. Be sure to note on the application that your contribution is a transfer of another SIMPLE IRA.

• To transfer the distribution from your current SIMPLE IRA directly from the Custodian, Trustee, or issuer of that plan to your new Custodian for the SIMPLE IRA, please complete the “Transfer Authorization Form”. If you have questions or need to request and additional form please call 1-800-445-9469.

MAIL COMPLETED APPLICATIONS TO:

First Class Mail:
Longleaf Partners Funds
c/o PFPC Inc.
P.O. Box 9694
Providence, RI 02940-9694

Overnight Mail:
Longleaf Partners Funds
c/o PFPC Inc.
101 Sabin Street
Pawtucket, RI 02860
(508) 871-8800

SIMPLE INDIVIDUAL RETIREMENT ACCOUNT

DISCLOSURE STATEMENT

The following information is the disclosure statement required by federal tax regulations. You should read this disclosure statement, the Custodial Account Agreement, and the prospectus for the Funds in which your Longleaf Partners Funds SIMPLE Individual Retirement Account (IRA) contributions will be invested.

REVOCATION OF YOUR SIMPLE IRA

You have the right to revoke your Longleaf Partners Funds SIMPLE IRA and receive the entire amount of your initial contribution by notifying PFPC Trust Company, the Custodian of your Longleaf Partners Funds SIMPLE IRA, in writing within seven (7) days of establishment of your SIMPLE IRA. If you revoke your IRA within seven days, you are entitled to a return of the entire amount paid by you, without adjustment for such items as sales commission, administrative expenses, or fluctuations in market value. If you decide to revoke your IRA, notice should be delivered or mailed to:






First Class Mail: Longleaf Partners Funds c/o PFPC Inc. P.O. Box 9694 Providence, RI 02940-9694		Overnight Express: Longleaf Partners Funds c/o PFPC Inc. 101 Sabin Street Pawtucket, RI 02860 (508) 871-8800

This notice should be signed by you and include the following:

1. The date;

2. A statement that you elect to revoke your SIMPLE IRA;

3. Your SIMPLE IRA account number;

4. The date your SIMPLE IRA was established;

5. Your signature and your printed or typed name.

Mailed notice will be deemed given on the date that it is postmarked, if it is properly addressed and deposited either in the United States mail, first class postage prepaid, or with an Internal Revenue Service (IRS) approved overnight service. This means that if you mail your notice it must be postmarked on or before the seventh day after your SIMPLE IRA was opened. A revoked SIMPLE IRA will be reported to the IRS and the Participant on Forms 1099-R and 5498.

YOUR SIMPLE INDIVIDUAL RETIREMENT ACCOUNT

You have opened a SIMPLE Individual Retirement Account (SIMPLE IRA), which is an account for the exclusive benefit of you and your beneficiaries, created by a written instrument (the Custodial Account Agreement). The following requirements apply to your SIMPLE IRA:

1. Contributions, transfers and rollovers may be made only in “cash” by check, draft, or other form acceptable to the Custodian;

2. The Custodian must be a bank or savings and loan association;

3. No part may be invested in life insurance contracts;


4.	Your interest must be nonforfeitable;
5.	The assets of the custodial account may not be mixed with other property except in a common investment fund; and
6.	You must begin receiving distributions from your account no later than April 1 of the year following the year in which you become 70 1/2 years old; and distributions must be completed over a period that is not longer than the joint life expectancy of you and your beneficiary.

CONTRIBUTIONS

You may not contribute more than 100% of your salary up to $10,000 for 2006 and thereafter (indexed in 2007). In the case of an eligible employee who will be 50 or older before the end of the calendar year, the above limitation is $12,500 for 2006 and thereafter (indexed in 2007).

INCOME TAX CONSEQUENCES OF SALARY REDUCTION CONTRIBUTIONS

Salary reduction contributions to a SIMPLE IRA are excludable from federal income tax and not subject to federal income tax withholding. Salary reduction contributions to a SIMPLE IRA are subject to tax under the Federal Insurance Contributions Act (“FICA”), the Federal Unemployment Tax Act (“FUTA”), and the Railroad Retirement Tax Act (“RRTA”), and should be reported accordingly by your employer on Form W-2,

Wage and Tax Statement. Your employer’s matching and non-elective contributions to your SIMPLE IRA are not subject to FICA, FUTA, or RRTA taxes, and are not required to be reported on Form W-2. Check with your tax advisor for further information.

TAXATION OF DISTRIBUTIONS

GENERAL

The income of your SIMPLE IRA is not taxed until the money is distributed to you. Distributions are taxable as ordinary income when received. Distributions received before you attain age 59 1/2, or within 2 years of the date on which you first participated in any SIMPLE IRA maintained by your employer, may be subject to penalties up to 25%. See the Early Distributions section under PENALTY TAX ON CERTAIN TRANSACTIONS, below. Distributions under $10 will not be reported to you on IRS Form 1099-R, as allowed under IRS regulations. However, you must still report these distributions to the IRS on IRS Form 1040 as well as other forms, which may be required to properly file your tax return.

TRANSFERS AND ROLLOVERS TO ANOTHER SIMPLE IRA

In general, you may transfer the assets of your SIMPLE IRA to another SIMPLE IRA in a direct trustee-to-trustee transfer, or “rollover” a distribution from your SIMPLE IRA to another SIMPLE IRA, at any time. If a distribution is rolled over, i.e. deposited to another SIMPLE IRA within 60 calendar days of receipt, the amount rolled over is not taxable. The IRS enforces the 60-day time limit strictly. You may rollover a portion of a distribution in which case the remainder will be subject to tax. In addition, only one rollover of your SIMPLE IRA assets is permitted each 365 days.

TRANSFERS AND ROLLOVERS TO AN IRA WHICH IS NOT A SIMPLE IRA – 2 YEAR RULE

After you have participated in your employer’s SIMPLE PLAN for two years, you may also transfer or rollover the assets of your SIMPLE IRA to a Traditional IRA. Until this two-year period has expired, any amount that is paid from a SIMPLE IRA directly to the Trustee of a Traditional IRA, or is paid from a SIMPLE IRA to you and contributed to a Traditional IRA (even if within the 60-day time limit), is a distribution from your SIMPLE IRA which is subject to taxation, including the early distribution penalties.

TRANSFERS AND ROLLOVERS INTO YOUR SIMPLE IRA

Transfers and rollovers can be made into your SIMPLE IRA from another SIMPLE IRA. IRS regulations prohibit transfers and rollovers into a SIMPLE IRA from any source other than another SIMPLE IRA.

CONSULT YOUR TAX ADVISOR

The rules regarding SIMPLE IRA transfers and rollovers are complex. You should consult a competent tax advisor prior to any transfer or rollover of any assets either from or to a SIMPLE IRA.

PENALTY TAX ON CERTAIN TRANSACTIONS

EXCESS CONTRIBUTIONS

Amounts deferred to your SIMPLE IRA in excess of the allowable limit will be subject to a non-deductible excise tax of 6% for each year until the excess is used up as an allowable contribution (in a subsequent year) or returned to you. The 6% excise tax on excess contributions will not apply if the excess contribution and earnings allocable to it are distributed by the due date for your federal income tax return, including extensions. If such a distribution is made, only the earnings are considered taxable income for the tax year in which the excess was contributed to the IRA. The return of earnings may also be subject to the excise tax on early distributions. An IRS Form 1099-R will be issued for the year in which the distribution occurred, not the year in which the excess contribution was made. The 1099-R applies to amounts removed during the period January 1 through and including the due date of your federal income tax return for the prior tax year. Consult IRS Publication 590 for more information pertaining to excess contributions. If you make an excess contribution to your IRA and it is not corrected on a timely basis, an excise tax of 6% is imposed on the excess amount. This tax will apply each year to any part or all of the excess that remains in your account.

early distribution penalty on the earnings if you are under age 59 1/2. For the purpose of the excess contribution, we will calculate the net income attributable to that contribution (Net Income Attributable or “NIA”) using the method provided for in the IRS Final Regulations for Earnings Calculation for Returned or Recharacterized Contributions. This method calculates the NIA based on the actual earnings and losses of the IRA during the time it held the excess contribution. Please note that a negative NIA is permitted and, if applicable, will be deducted from the amount of the excess contribution. Excess contributions (plus or minus the NIA) that are distributed by your Federal income tax return due date (plus extensions) will be considered corrected, thus avoiding an excess contribution penalty.

EARLY DISTRIBUTIONS

Your receipt or use of any portion of your account before you attain age 59 1/2 is considered an early or premature distribution. The distribution is subject to a penalty tax equal to 10% or 25% if the distribution occurs within 2 years of the date on which you first participated in any SIMPLE IRA maintained by your employer unless one of the following exceptions applies to the distribution:

1. Due to your death, or

2. Made because you became disabled, or


3.	Used specifically for deductible medical expenses which exceed 7.5% of your adjusted gross income, or
4.	Used for health insurance cost due to your unemployment, or
5.	Used for higher education expenses defined in section 529(e)(3) of the Internal Revenue Code, or
6.	Used toward the expenses of a first time home purchase up to a lifetime limit of $10,000, or
7.	Part of a scheduled series of substantially equal payments over your life, or over the joint life expectancy of you and a beneficiary. If you request a distribution in the form of a series of substantially equal payments, and you modify the payments before 5 years have elapsed and before attaining age 59 1/2, the penalty tax will apply retroactively to the year payments began through the year of such modification, or

8. Required because of an IRS levy.

The penalty tax is in addition to any federal income tax that is owed at distribution. For more information on the penalty tax and the exceptions listed above, consult IRS Publication 590.

REQUIRED DISTRIBUTIONS

You are required to begin receiving minimum distributions from your IRA by your required beginning date (the April 1 of the year following the year you attain age 70 1/2. The year you attain age 70 1/2 is referred to as your “first distribution calendar year”. Your minimum distribution for each year beginning with the calendar year you attain the age of 70 1/2 is generally based upon the value of your account at the end of the prior year divided by the factor for your age derived from the Uniform Lifetime Distribution Period Table regardless of who or what entity is your named beneficiary. This Uniform Lifetime Distribution Period Table assumes you have a designated beneficiary exactly 10 years younger than you. However, if your spouse is your sole beneficiary and is more than 10 years younger than you, your required minimum distribution for each year is based upon the joint life expectancies of you and your spouse. The account balance that is used to determine each year’s required minimum amount is the fair market value of each IRA you own as of the prior December 31st, adjusted for outstanding rollovers (or transfers) as of such prior December 31st and recharacterizations that relate to a conversion or failed conversion made in the prior year.

If the amount distributed during a taxable year is less than the minimum amount required to be distributed, you will be subject to a penalty tax equal to 50% of the difference between the amount distributed and the amount required to be distributed. You are responsible for monitoring this schedule from year to year to make sure that you are withdrawing the required minimum amount.

A 70 1/2 Required Distribution Election form is available from the Custodian and should be obtained and

used to make your elections for your required minimum distribution request.

ADDITIONAL INFORMATION ON DISTRIBUTIONS

DISTRIBUTION DUE TO DEATH

If, prior to your death, you have not started to take your required distributions and you properly designated a beneficiary(ies), the entire value of your IRA must be distributed to your beneficiaries within five years after your death, unless the designated beneficiary elects in writing, no later than September 30th of the year following the year in which you die, to take distributions over their life expectancy. These distributions must commence no later than December 31st of the calendar year following the calendar year of your death. However, if your spouse is your sole beneficiary, these distributions are not required to commence until the December 31st of the calendar year you would have attained the age of 70 1/2, if that date is later than the required commencement date in the previous sentence. If you die before your required beginning date and you do not have a designated beneficiary, the balance in your IRA must be distributed no later than the December 31st of the calendar year that contains the fifth anniversary of your death.

PROHIBITED TRANSACTIONS

If you or your beneficiary engages in any prohibited transaction (such as any sale, exchange, borrowing, or leasing of any property between you and your SIMPLE IRA; or any other interference with the independent status of the account), the account will lose its exemption from tax and be treated as having been distributed to you. The value of the entire account will be includible in your gross income. If you are under age 59 1/2, you would also be subject to the penalty tax on early distributions.

If you or your beneficiary use (pledge) all or any part of your SIMPLE IRA as security for a loan, then the portion so pledged will be treated as if distributed to you, and will be taxable to you as ordinary income, and subject to a penalty tax if you have not attained age 59 1/2 during the year which you make such a pledge.

FEDERAL ESTATE and GIFT TAXES

a gift as long as you were able to name them as your beneficiary.

INCOME TAX WITHHOLDING

The Custodian is required to withhold federal income tax from any distribution from your SIMPLE IRA to you at the rate of 10% unless you choose not to have tax withheld. You may elect out of withholding by advising the Custodian in writing, prior to the distribution, that you do not want tax withheld from the distribution. This election may be made any form acceptable to the Custodian. If you do not elect out of tax withholding, you may direct the Custodian to withhold an additional amount of tax in excess of 10%, but not more than 90%.

ADDITIONAL INFORMATION

INFORMATION ABOUT YOUR INVESTMENTS

A mutual fund investment involves investment risks, including possible loss of principal. In addition, growth in the value of our account is neither guaranteed nor projected due to the characteristics of a mutual fund investment. Detailed information about the shares of each mutual fund available for investment by your SIMPLE IRA must be furnished to you in the form of a prospectus. The method for computing and allocating annual earnings is set forth in the prospectus. (See prospectus section entitled “Dividends.”) If you made an initial contribution of $1,000 on the first day of a calendar year and no further investment during that year, your contribution would also be subject to certain costs and expenses, which would reduce any yield you might obtain from your investment. (See the prospectus section entitled “Expense Table” and the sections referred to therein.). For further information regarding expenses, earnings, and distributions, see the mutual fund’s financial statements, prospectus and/or statement of additional information. Should the fund you are invested in close, and the prospectus for said fund does not specify a successor fund, your shares of said fund will be liquidated and the proceeds will be used to purchase shares of the Money Market Fund in the same Fund Family, if available.

FEES AND CHARGES

Longleaf Partners Funds charge no annual custodial maintenance fees.

IRS APPROVED FORM

Your SIMPLE IRA is the Internal Revenue Service’s model custodial account contained in IRS Form 5305-SA. Certain additions have been made in Article VIII of the form. By following this form, your Mutual Fund Name SIMPLE IRA meets the requirements of the Internal Revenue Code. However, the IRS has not endorsed the merits of the investments allowed under the SIMPLE IRA. This form cannot be used with Coverdell ESAs, Roth, SEP, or Traditional IRAs.

SIMPLE INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT AGREEMENT

(Form 5305-SA March 2002)

The participant is establishing a Savings Incentive Match Plan for employees of small employers Individual Retirement Account (SIMPLE IRA) under sections 408(a) and 408(p) of the Internal Revenue Code to provide for his or her retirement and for the support of his or her beneficiaries after death. PFPC Trust Company the Custodian has given the participant the disclosure statement required under Regulations section 1.408-6. The participant and PFPC Trust Company make the following agreement:

Article I.

The Custodian will accept cash contributions made on behalf of the participant by the participant’s employer under the terms of a SIMPLE plan described in section 408(p). In addition, the Custodian will accept transfers or rollovers from other SIMPLE IRAs of the participant. No other contributions will be accepted by the Custodian.

Article II.

The participant’s interest in the balance in the custodial account is nonforfeitable.

Article III.

2. No part of the custodial account funds may be invested in collectibles (within the meaning of section 408(m)) except as otherwise permitted by section 408(m)(3), which provides an exception for certain gold, silver and platinum coins and coins issued under the laws of any state, and certain bullion.

Article IV.

1. Notwithstanding any provision of this agreement to the contrary, the distribution of the participant’s interest in the custodial account shall be made in accordance with the following requirements and shall otherwise comply with section 408(a)(6) and the regulations thereunder, the provisions of which are incorporated by reference.

2. The participant’s entire interest in the custodial account must be, or begin to be, distributed not later than the participant’s required beginning date, April 1 following the calendar year in which the participant reaches age 70 1/2. By that date, the participant may elect, in a manner acceptable to the Custodian, to have the balance in the custodial account distributed in:

(a) A single sum or

(b) Payments over a period not longer than the life of the participant or the joint lives of the participant and his or her designated beneficiary.

3. If the participant dies before his or her entire interest is distributed to him or her, the remaining interest will be distributed as follows:

(a) If the participant dies on or after the required beginning date and:

(i) the designated beneficiary is the participant’s surviving spouse, the remaining interest will be distributed over the surviving spouse’s life expectancy as determined each year until such spouse’s death, or over the period in paragraph (a)(iii) below if longer. Any interest remaining after the spouse’s death will be distributed over such spouse’s remaining life expectancy as determined in the year of the spouse’s death and reduced by 1 for each subsequent year, or, if distributions are being made over the period in paragraph (a)(iii) below, over such period.

(ii) the designated beneficiary is not the participant’s surviving spouse, the remaining interest will be distributed over the beneficiary’s remaining life expectancy as determined in the year following the death of the participant and reduced by 1 for each subsequent year, or over the period in paragraph (a)(iii) below if longer.

(iii) there is no designated beneficiary; the remaining interest will be distributed over the remaining life expectancy of the participant as determined in the year of the participant’s

death and reduced by 1 for each subsequent year.

(b) If the participant dies before the required beginning date, the remaining interest will be distributed in accordance with (i) below or, if elected or there is no designated beneficiary, in accordance with (ii) below:

(i) The remaining interest will be distributed in accordance with paragraphs (a)(i) and (a)(ii) above (but not over the period in paragraph (a)(iii), even if longer), starting by the end of the calendar year following the year of the participant’s death. If, however, the designated beneficiary is the participant’s surviving spouse, then this distribution is not required to begin before the end of the calendar year in which the participant would have reached age 70 1/2. But, in such case, if the participant’s surviving spouse dies before distributions are required to begin, then the remaining interest will be distributed in accordance with (a)(ii) above (but not over the period in paragraph (a)(iii), even if longer), over such spouse’s designated beneficiary’s life expectancy, or in accordance with (ii) below if there is no such designated beneficiary.

(ii) The remaining interest will be distributed by the end of the calendar year containing the fifth anniversary of the participant’s death.

4. If the participant dies before his or her entire interest has been distributed and if the designated beneficiary is not the participant’s surviving spouse, no additional contributions may be accepted in the account.

5. The minimum amount that must be distributed each year, beginning with the year containing the participant’s required beginning date, is known as the “required minimum distribution” and is determined as follows:

(a) The required minimum distribution under paragraph 2(b) for any year, beginning with the year the participant reaches age 70 1/2, is the participant’s account value at the close of business on December 31 of the preceding year divided by the distribution period in the uniform lifetime table in Regulations section 1.401(a)(9)-9. However, if the participant’s designated beneficiary is his or her surviving spouse, the required minimum distribution for a year shall not be more than the participant’s account value at the close of business on December 31 of the preceding year divided by the number in the joint and last survivor table in Regulations section 1.401(a)(9)-9. The required minimum distribution for a year under this paragraph (a) is determined using the participant’s (or, if applicable, the participant and spouse’s) attained age (or ages) in the year.

(b) The required minimum distribution under paragraphs 3(a) and 3(b)(i) for a year, beginning with the year following the year of the participant’s death (or the year the participant would have reached age 70 1/2, if applicable under paragraph 3(b)(i)) is the account value at the close of business on December 31 of the preceding year divided by the life expectancy (in the single life table in Regulations section 1.401(a)(9)-9) of the individual specified in such paragraphs 3(a) and 3(b)(i).

(c) The required minimum distribution for the year the participant reaches age 70 1/2 can be made as late as April 1 of the following year. The required minimum distribution for any other year must be made by the end of such year.

6. The owner of two or more IRAs (other than Roth IRAs), may satisfy the minimum distribution requirement described above, by taking from one IRA the amount required to satisfy the requirement for another in accordance with the regulations under 408(a)(6).

Article V.

1. The participant agrees to provide the Custodian with information necessary for the Custodian to prepare any reports required under sections 1.408-5 and 1.408-6.

2. The Custodian agrees to submit reports to the Internal Revenue Service (IRS) and the participant as prescribed by the IRS.

3. The Custodian also agrees to provide the participant’s employer the summary description described in section 408(l)(2) unless this SIMPLE IRA is a transfer SIMPLE IRA.

Article VI.

Notwithstanding any other articles, which may be added or incorporated, the provisions of Articles I through III

and this sentence will be controlling. Any additional articles that are not consistent with sections 408(a) and 408(p) and the related regulations will be invalid.

Article VII.

Article VIII.

2. The shareholder of record of all Fund Shares shall be the Custodian or its nominee.

3. The participant shall, from time to time, direct the Custodian to invest the funds of his/her Custodian account in Fund Shares. Any funds, which are not directed as to investment, shall, at the sole discretion of the Custodian, be held uninvested until such direction is received from the participant or be returned to the participant without being deemed to have been contributed to his/her custodial account. The participant shall be the beneficial owner of all Fund Shares held in the custodial account, and the Custodian shall not vote any such shares except upon written direction of the participant.

4. The Custodian agrees to forward, or to cause to be forwarded, to every participant the then-current prospectus(es) of the Funds, as applicable, which have been designated by the company as eligible for investment under the custodial account and selected by the participant for such investment, and all notices, proxies and related proxy soliciting materials applicable to said Fund Shares received by it.

5. Each participant shall have the right by written notice to the Custodian to designate or to change a beneficiary to receive any benefit to which such participant may be entitled in the event of his/her death prior to the complete distribution of such benefit. A beneficiary designation will be deemed to be in effect when received in good order by the Custodian. If no such designation is in effect at the time of the participant’s death, or all designated beneficiaries have predeceased you, your spouse shall become the beneficiary or, if no surviving spouse or unmarried, the distribution will be made to your estate.

6. (a) The Custodian shall have the right to receive rollover contributions as described in Article I of this Agreement. The Custodian reserves the right to refuse to accept any property, which is not in the form of cash.

(b) The Custodian, upon written direction of the participant and after submission to the Custodian of such documents as it may reasonably require, shall transfer the assets held under this Agreement (reduced by (1) any amounts referred to in paragraph 8 of this Article VIII and (2) any amounts required to be distributed during the calendar year of transfer) to a successor individual retirement account, to an individual retirement annuity for the Participant’s benefit, or directly to the participant.

7. Without in any way limiting the foregoing, the participant hereby irrevocably delegates to the Custodian the right and power to amend at any time and from time to time the terms and provisions of this Agreement and hereby consents to such amendments, provided they shall comply with all applicable provisions of the Code, the Treasury regulations thereunder and with any other governmental law, regulation or ruling. Any such amendments shall be effective when the notice of such amendments is mailed to the address of the participant indicated by the Custodian’s records.

8. Any income taxes or other taxes of any kind whatsoever levied or assessed upon or in respect of the assets of the custodial account or the income arising therefrom, any transfer taxes incurred, all other administrative expenses incurred, specifically including but not limited to, administrative expenses incurred by the Custodian in the performance of its duties and fees for legal services rendered to the Custodian, and the Custodian’s compensation may be paid by the participant and, unless so paid within such time period as the Custodian may establish, shall be paid from the participant’s custodial account. The Custodian reserves the right to change or adjust its compensation upon 30 days advance notice to the participant.

9. The benefits provided hereunder shall not be subject to alienation, assignment, garnishment, attachment, execution or levy of any kind, and any attempt to cause such benefits to be so subjected shall not be recognized, except to such extent as may be required by law.

10. The Custodian may rely upon any statement by the participant (or the participant’s beneficiary if the participant is deceased) when taking any action or determining any fact or question which may arise under this Custodial Agreement. The participant hereby agrees that neither the Custodian nor the Funds will be liable for any loss or expense resulting from any action taken or determination made in reliance on such statement. The participant assumes sole responsibility for assuring that contributions to the custodial account satisfy the limits specified in the appropriate provisions of the Code.

11. The Custodian may resign at any time upon 30 days written notice to the participant and the Funds, and may be removed by the participant at any time upon 30 days written notice to the Custodian. Upon the resignation or removal of the Custodian, a successor Custodian shall be appointed within 30 days of such resignation notice and in the absence of such appointment, the Custodian shall appoint a successor unless the Agreement be sooner terminated. Any successor Custodian shall be a bank (as defined in section 408(n) of the Code) or such other person found qualified to act as a Custodian under an individual account plan by the Secretary of the Treasury or his delegate. The appointment of a successor Custodian shall be effective upon receipt by the Custodian of such successor’s written acceptance, which shall be submitted to the Custodian, the Funds, and the participant. Within 30 days of the effective date of a successor Custodian’s appointment, the Custodian shall transfer and deliver to the successor Custodian applicable account records and assets of the custodial account (reduced by any unpaid amounts referred to in paragraph 8 of this Article VIII). The successor Custodian shall be subject to the provisions of this Agreement (or any successor thereto) on the effective date of its appointment.

12. The Custodian shall, from time to time, in accordance with instructions in writing from the participant (or the participant’s beneficiary if the participant is deceased), make distributions out of the custodial account to the participant in the manner and amounts as may be specified in such instructions (reduced by any amounts referred to in Article VIII, paragraph 8). A SIMPLE IRA Withdrawal Authorization form is available from the Custodian, and should be obtained and used to request any distribution from your SIMPLE IRA. Notwithstanding the provisions of Article IV above, the Custodian assumes (and shall have) no responsibility to make any distribution from the custodial account unless and until such written instructions specify the occasion for such distribution and the elected manner of distribution, except as set forth in the second part of this paragraph (12) below, with respect to age 70 1/2 distributions. Prior to making any such distribution from the custodial account, the Custodian shall be furnished with any and all applications, certificates, tax waivers, signature guarantees, and other documents (including proof of any legal representative’s authority) deemed necessary or advisable by the Custodian, but the Custodian shall not be liable for complying with written instructions which appear on their face to be genuine, or for refusing to comply if not satisfied such instructions are genuine, and assumes no duty of further inquiry. Upon receipt of proper written instructions as required above, the Custodian shall cause the assets of the custodial account to be distributed in cash and/or in kind, as specified in such written instructions.

The participant may select as a method of distribution under Article IV, paragraph 3, option (a) or (b) above. If the participant requests age 70 1/2 distribution by timely written instruction but does not choose any of the methods of distribution described above by the April 1st following the calendar year in which he or she reaches age 70 1/2, distribution to the participant will be made in accordance with Article IV, paragraph 2, option (b). If the participant does not request age 70 1/2 distribution from the custodial account by timely written instruction, or does not specify the amount of the

age 70 1/2 distribution which the participant will be taking from another IRA(s), no distribution will be made; however calculation of the current year Required Minimum Distribution amount which cannot rolled over to another IRA will be made in accordance with Article IV, paragraph 2, option (b).

13. Distribution of the assets of the custodial account shall be made in accordance with the provisions of Article IV as the participant (or the participant’s beneficiary if the participant is deceased) shall elect by written instructions to the Custodian; subject, however, to the provisions of sections 401(a)(9), 408(a)(6) and 403(b)(10) of the Code, the regulations promulgated thereunder, Article VIII, paragraph 12 of this Agreement.

14. In the event any amounts remain in the custodial account after the death of the participant, the rights of the participant under this Agreement shall thereafter be exercised by his or her beneficiary.

15. The Custodian is authorized to hire agents (including any transfer agent for Fund Shares) to perform certain duties under this Agreement.

16. This Agreement shall terminate coincident with the complete distribution of the assets of the participant’s account.

17. All notices to be given by the Custodian to the participant shall be deemed to have been given when mailed to the address of the participant indicated by the Custodian’s records.

18. Neither the Custodian nor the Funds shall be responsible for any losses, penalties or other consequences to the participant or any other person arising out of the making of, or the failure to make, any contribution or withdrawal.

19. In addition to the reports required by paragraph (2) of Article V, the Custodian shall periodically cause to be mailed to the participant in respect of each such period an account of all transactions affecting the custodial account during such period and a statement showing the custodial account as of the end of such period. If, within 30 days after such mailing, the participant has not given the Custodian written notice of any exception or objection thereto, the periodic accounting shall be deemed to have been approved and, in such case or upon the written approval of the participant, the Custodian, and the Funds shall be released, relieved and discharged with respect to all matters and statements set forth in such accounting as though the account had been settled by judgment or decree of a court of competent jurisdiction.

20. In performing the duties conferred upon the Custodian by the participant hereunder, the Custodian shall act as the agent of the participant. The parties do not intend to confer any fiduciary duties on the Custodian and none shall be implied. Neither the Custodian nor the Funds shall be liable (and neither assumed any responsibility) for the collection of contributions, the deductibility or the propriety of any contribution under this Agreement, the selection of any Fund Shares for this custodial account, or the purpose or propriety of any distribution made in accordance with Article IV and Paragraph 12, 13 of Article VIII, which matters are the sole responsibility of the participant or the participant’s beneficiary, as the case may be. The participant and the successors of the participant, including any designated beneficiary, executor or administrator of the Depositor, shall, to the extent permitted by law, indemnify and hold the Custodian and the Funds and their affiliates, successors and assigns harmless for any and all claims, actions or liabilities of the Custodian, except such as may arise from the Custodian’s own bad faith, negligence, nonfeasance, or willful misconduct.

21. The Custodian shall be responsible solely for the performance of those duties expressly assigned to it in this Agreement and by operation of law. In determining the taxable amount of a distribution, the participant shall rely only on his or her federal tax records, and the Custodian shall withhold federal income tax from any distribution from the custodial account as if the total amount of the distribution is includible in the participant’s income.

GENERAL INSTRUCTIONS

Section references are to the Internal Revenue Code unless otherwise noted.

Purpose of Form

Form 5305-SA is a model custodial account agreement that meets the requirements of sections 408(a) and 408(p) and has been automatically approved by the IRS. An individual retirement account (IRA) is established after the form is fully executed by both the individual (participant) and the Custodian. This account must be created in the United States for the exclusive benefit of the participant or his or her beneficiaries.

Do not file Form 5305-SA with the IRS. Instead, keep it for your records.

For more information on IRAs, including the required disclosures the Custodian must give the participant, Pub. 590 Individual Retirement Arrangements (IRAs).

Definitions

Participant – The participant is the person who establishes the custodial account.

Custodian – The Custodian must be a bank or savings and loan association, as defined in section 408(n), or any person who has the approval of the IRS to act as Custodian.

Transfer SIMPLE IRA

This SIMPLE IRA is a “transfer SIMPLE IRA” if it is not the original recipient of contributions under any SIMPLE plan. The summary description requirements of section 408(l)(2) do not apply to transfer SIMPLE IRAs.

SPECIFIC INSTRUCTIONS

Article IV. – Distributions made under this article may be made in a single sum, periodic payment, or a combination of both. The distribution option should be reviewed in the year the participant reaches age 70 1/2 to ensure that the requirements of section 408(a)(6) have been met.

Article VIII. – Article VIII and any that follow it may incorporate additional provisions that are agreed to by the participant and Custodian to complete the agreement. They may include, for example, definitions, investment powers, voting rights, exculpatory provisions, amendment and termination, removal of the Custodian, Custodian’s fees, state law requirements, beginning date of distributions, accepting only cash, treatment of excess contributions, prohibited transactions with the participant, etc. Use additional pages if necessary and attach them to this form.

PRIVACY PRINCIPLES

PFPC Trust Company serves as Custodian to self-directed savings and retirement accounts, such as Individual Retirement Accounts, Qualified Plans, 403(b)(7) Plans (the “Accounts”) owned by shareholders of investment companies for whom our affiliated company. PFPC, Inc. serves as transfer and shareholder servicing agent (the “Funds”). You are receiving this notice because you own or are considering establishing an Account that contains an investment in shares of a Fund. PFPC Trust Company is committed to maintaining the privacy of Account owners and to safeguarding their nonpublic personal information. We collect nonpublic personal information from Account applications and other forms that Account owners send to establish and maintain an Account. PFPC Trust Company may also have access to specific information regarding an Account owner’s transactions with the Funds. We do not disclose any nonpublic personal information about any Account owner or former Account owner to anyone, except as permitted by law or as necessary in order to service the Account. PFPC Trust Company restricts access to nonpublic personal information about the Account owners to our employees with a legitimate business need for the information. PFPC Trust Company maintains physical, electronic and procedural safeguards designed to protect the nonpublic personal information of Account owners.

SIMPLE IRA EMPLOYEE APPLICATION

AND ADOPTION AGREEMENT


Longleaf Partners Funds, P.O. Box 9694, Providence, RI 02940-9694 For more information, call (800) 445-9469

EXCEPTION AUTHORIZATION REQUIRED FOR PARTNERS AND SMALL-CAP FUNDS

The Partners and Small-Cap Funds are closed to new investors. Exceptions to the close are listed in the Funds’ prospectus and must be authorized by calling Southeastern at (901) 761-2474 prior to making your investment. Please provide your exception authorization here:


EAN#	By:	Date:

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT

Federal law requires Longleaf to obtain, verify, and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, street address, date of birth, a U.S. Tax ID Number, and may ask for other information that will allow us to identify you. We may also ask to see a copy of identifying documents.

We can NOT open your account if you fail to complete relevant information marked as “REQUIRED”. We will not accept additional investments into your account if we are unable to verify your identity. We may also report a failure to verify your identity to federal authorities in accordance with applicable law.

PLEASE PRINT. Remember to complete the signature section on the last page.

o I am a U.S. resident with a U.S. Tax ID.

PARTICIPANT INFORMATION

*NAME

*STREET ADDRESS (P.O. BOX IS NOT SUFFICIENT)


( )	( )


EVENING PHONE #	DAYTIME PHONE #


*DATE OF BIRTH	*SSN/TIN

*Required Information


o Check if the account is being established by a Transfer from another SIMPLE IRA	Initial Participation Date:


o Check if the account is being established by a Rollover from another SIMPLE IRA	Initial Participation Date:

EMPLOYER INFORMATION – Please include a copy of your Employers SIMPLE Plan Adoption Agreement

*EMPLOYER NAME

*EMPLOYER ADDRESS

( )

DAYTIME PHONE #

INVESTMENT INSTRUCTIONS FOR SALARY REDUCTION AND/OR EMPLOYER CONTRIBUTIONS


FUND NAME	$ AMOUNT	or	%
FUND NAME	$ AMOUNT	or	%
FUND NAME	$ AMOUNT	or	%

ALL DIVIDENDS AND CAPITAL GAINS WILL BE REINVESTED

BENEFICIARY DESIGNATION


Primary o	Secondary o	NAME: ADDRESS:


		SSN: DATE OF BIRTH:

		RELATIONSHIP: SHARE: ------%

Primary o	Secondary o	NAME: ADDRESS:


		SSN: DATE OF BIRTH:

		RELATIONSHIP: SHARE: ------%

Primary o	Secondary o	NAME: ADDRESS:


		SSN: DATE OF BIRTH:

		RELATIONSHIP: SHARE: ------%

Note: the share percentage must equal 100% for all Primary or all Contingent Beneficiaries. If neither the Primary nor the Contingent Beneficiary box is checked, the beneficiary will be deemed to be a Primary Beneficiary. If a trust is designated as a Beneficiary, please provide both the date of the trust and the name(s) of the trustee(s).

In the event of my death, the balance in the account shall be paid to the Primary Beneficiaries who survive me in equal shares (or in the specified shares, if indicated). If none of the Primary Beneficiaries survive me, the balance in the account shall be paid to the Contingent Beneficiaries who survive me in equal shares (or in the specified shares, if indicated. You may change your beneficiaries at any time by giving written notice to the Custodian. If you do not designate a beneficiary, or the beneficiary(ies) you designate predecease you, your surviving spouse will become the beneficiary of your SIMPLE IRA, if no surviving spouse or unmarried, your estate will become the beneficiary of your IRA.

I consent to the Beneficiary Designation.


SIGNATURE OF SPOUSE	DATE

Note: Consent of the Participant’s Spouse may be required in a community property or marital property state to effectively designate a beneficiary other than, or in addition to, the Participant’s Spouse. Disclaimer for Community and Marital Property States: The Participant’s Spouse may have a property interest in the account and the right to dispose of the interest by will. Therefore, Longleaf Partners Funds and the IRA Custodian specifically disclaim any warranty as to the effectiveness of the Participant’s beneficiary designation or as to the ownership of the account after the death of the Participant’s Spouse. For additional information, please consult your legal advisor.

TERMS AND CONDITIONS

I, the Participant, acknowledge that I have received and read the current Prospectus for each Fund, which I have designated for investment.

All dividends and distributions from the Fund shares held in your account will be reinvested in shares of the Fund from which received. Each subsequent contribution will be invested based on the written instructions received with the contribution. The Custodian, upon written instructions from you, may exchange any Longleaf Partners Funds shares for any other Longleaf Partners Funds shares in accordance with the then current prospectus.

I hereby establish a SIMPLE Individual Retirement Account (“SIMPLE IRA”) under the terms and conditions contained in the accompanying Custodial Account Agreement, which is incorporated herein by reference. The combined instrument is hereinafter referred to as the “Agreement”. I acknowledge receipt of a copy of the Custodial Account Agreement, this Application and Adoption Agreement, and the Disclosure Statement with respect to this SIMPLE IRA. I direct that all benefits upon my death be paid as indicated on the beneficiary designation.

I understand and agree that this SIMPLE IRA becomes effective upon written acceptance by the Custodian, PFPC Trust Company, which written acceptance shall consist of a confirmation of transaction statement issued by the Custodian.

Under penalties of perjury, I certify that the information I have provided on this application (including my social security number) is correct. I hereby agree to participate in the SIMPLE Individual Retirement Custodial Account offered by the Custodian. I acknowledge receipt of a copy of the plan document under which this SIMPLE Individual Retirement Account is established, a copy of this Adoption Agreement, and a copy of the Disclosure Statement, Custodial Agreement and PFPC Trust Company Privacy Principles with respect to this SIMPLE Individual Retirement Account. I direct that all benefits upon my death be paid as indicated on the beneficiary designation. In the event that this is a rollover contribution, the undersigned hereby irrevocably elects, pursuant to the requirements of Section 1.402(a)(5)-1T of the IRS regulations, to treat this contribution as a rollover contribution. If I named a beneficiary that is a Trust, I understand I must provide certain information concerning such Trust to the Custodian.

I (the Participant) certify under penalties of perjury that I am a US person (including a US resident alien) and that my Social Security Number is true, correct and complete and that this number is my Taxpayer Identification Number.


PARTICIPANT’S SIGNATURE	DATE

SIMPLE IRA Custodian: PFPC Trust Company,
c/o PFPC Inc., P.O. Box 9694,
Providence, RI 02940-9694.

THIS FORM MUST BE RETURNED WITH AN INITIAL INVESTMENT OR A TRANSFER OF ASSETS FORM.

SEND COMPLETED APPLICATION FORM, TRANSFER FORM AND/OR CHECK TO:






By regular mail: Longleaf Partners Funds P.O. Box 9694 Providence, RI 02940-9694		By express mail or overnight courier: Longleaf Partners Funds c/o PFPC 101 Sabin Street Pawtucket, RI 02860 (508) 871-8800

Items delivered to the P.O. Box are not deemed “received” until they arrive at PFPC for processing. Time critical items requiring proof of receipt should be sent to the Pawtucket, RI address.

SIMPLE IRA Transfer of Assets


		Longleaf Partners Funds, P.O. Box 9694, Providence, RI 02940-9694 For more information, call (800) 445-9469

1. Account Owner

OWNER’S NAME

( )

OWNER’S U.S. TAX ID DAYTIME PHONE

STREET OR P.O. BOX

CITY, STATE, ZIP

2. Longleaf Account Information

o I have an existing Simple IRA account with Longleaf Partners Funds. My account # is ______________________________________________________.

o I am establishing a new Simple IRA account with Longleaf Partners Funds.

3. Transfer the assets indicated below:

o Liquidate all assets and send a check.

o Liquidate $ only and send a check.

o Transfer existing Longleaf shares in-kind:


		Shares

	Partners Fund
	International Fund
	Small-Cap Fund
ISSUE CHECK PAYABLE TO: PFPC Trust Company




Longleaf Partners Fund FBO:





Account No:





SSN:

4. Initiate Transfer

o At maturity date of / /

o Immediately. (I am aware of any penalties)

5. Funds

Our minimum initial investment for each Fund account is $10,000.






Partners Fund (133) Closed 7-16-04	$	or		%

International Fund (136)		or		%

Small-Cap Fund (134) Closed 7-31-97				%

Total Investment	$	or	100	%

6. The assets are being transferred from:

NAME OF PRESENT TRUSTEE


ACCOUNT NUMBER	MUTUAL FUND (IF APPLICABLE)

STREET ADDRESS OR P.O. BOX NUMBER

CITY, STATE, ZIP CODE

( )

PHONE NUMBER

Approximate value of the Simple IRA you are transferring:

$

(Must be at least $10,000 or you must include a check to bring the total to $10,000. The funds do not accept third-party checks or checks drawn on foreign banks.)

PLEASE INCLUDE A COPY OF YOUR

ACCOUNT STATEMENT FOR THE IRA

YOU ARE TRANSFERRING.

7. Signature

I certify that I have established Simple IRA Account with Longleaf Partners Funds meeting the requirements of the Internal Revenue Code and certify that the Simple IRA assets being transferred meet those same requirements.


SIGNATURE OF SIMPLE IRA PARTICIPANT	DATE

8. Signature Guarantee (if required by current trustee)

NAME OF INSTITUTION


SIGNATURE OF AUTHORIZED OFFICER	DATE

FOR NEW IRA ACCOUNTS, THIS FORM MUST BE RETURNED WITH A RETIREMENT ACCOUNT APPLICATION

INSTRUCTIONS TO THE SHAREHOLDER (PLEASE READ CAREFULLY):

This form will be used by PFPC Trust Company to initiate a Transfer of Assets on your behalf from an existing SIMPLE IRA Plan as designated on this form to your SIMPLE IRA at Longleaf Partners Funds. If you are over 70 1/2 please advise us if you wish to take required distributions from this account and what your distribution election is; otherwise no action will be taken on our part. Please remember this Transfer of Assets can only occur between SIMPLE IRA accounts. For certificate of deposits please indicate if you wish to have the funds transferred immediately, which may incur a redemption penalty if they have not matured, or at maturity. We cannot accept requests to transfer assets from certificates more than 60 days prior to their maturity. When completed, please return the signed form, a copy of your current account statement, and the appropriate new account application for your SIMPLE IRA if required to:






First Class Mail: Longleaf Partners Funds c/o PFPC Inc. P.O. Box 9694 Providence, RI 02940-9694		Overnight Mail: Longleaf Partners Funds c/o PFPC Inc. 101 Sabin Street Pawtucket, RI 02860 (508) 871-8800

Insufficient information or the use of incorrect forms will result in delays in processing your instructions. If you need assistance in completing this form please contact our Customer Service Representatives at 1-800-445-9469. We would be happy to help you.

INSTRUCTIONS TO RESIGNING CUSTODIAN OR TRANSFER AGENT:

Please liquidate the Participant’s account(s) as specified in Section 3.
Issue a check payable as indicated in Section 3 and mail to:






First Class Mail: Longleaf Partners Funds c/o PFPC Inc. P.O. Box 9694 Providence, RI 02940-9694		Overnight Mail: Longleaf Partners Funds c/o PFPC Inc. 101 Sabin Street Pawtucket, RI 02860 (508) 871-8800

ACCEPTANCE BY PFPC TRUST COMPANY AS CUSTODIAN:

PFPC Trust Company accepts its appointment as Custodian of the above referenced SIMPLE IRA and has established a SIMPLE IRA as indicated by the shareholder on the front of this form under the Internal Revenue Code section 408(p) for SIMPLE IRAs under the shareholder’s name in Longleaf Partners Funds. Longleaf Partners Funds and PFPC Trust Company, as Custodian, cannot accept assets other than cash. Upon receipt of the check, the proceeds will be credited to the named Participant’s account.

Accepted by PFPC Trust Company, as Custodian for
Longleaf Partners Funds SIMPLE IRAs.

AUTHORIZED REPRESENTATIVE OF PFPC TRUST COMPANY DATE

SIMPLE IRA Withdrawal Authorization Form


		c/o PFPC Inc., PO Box 9694, Providence, RI 02940-9694 For more information, call 1-800-445-9469

DO NOT USE THIS FORM FOR 70 1/2 REQUIRED DISTRIBUTIONS.

Participant Information (If you are a beneficiary, please
complete an application and attach)

OWNER

Initial

Participation Date:

(Please print the name exactly as it appears on the Simple IRA Account)

If you are the beneficiary of a decedents account please see #4 under Reason for Distribution.


SOCIAL SECURITY NUMBER	DATE OF BIRTH:


STREET ADDRESS	CITY STATE ZIP


FUND:	ACCOUNT NUMBER:

Reason for Distribution – Check the box that applies

If you have not participated in the SIMPLE 2 years and are under 59 1/2, an IRS Penalty may be imposed

o 1. Normal Distribution – If you are the participant and age 59 1/2 or older.

o 2. Early (premature) distribution – Participant is under age 59 1/2 or the distribution is due to medical expenses, health insurance premiums, higher education expenses, first time homebuyer expenses, or other reason.

o 3. Substantially equal periodic payments within the meaning of section 72(t) of the Internal Revenue Code.

o 4. Death – If you are a beneficiary contact Shareholder Services regarding additional document requirements. 5. Permanent Disability – You certify that you are disabled within the meaning of section 72(m)(7) of the Internal Revenue Code.

o 6. Transfer Incident to Divorce or Legal Separation – Contact Shareholder Services regarding additional document requirements.

o 7. Other

*Revocation – refer to the Disclosure Statement regarding your revocation rights.

All required documentation must be received in good order before the distribution request will be honored. All legal documents must be certified and a Medallion Signature Guarantee may be required for the IRA owner/beneficiary or spouse.

Payment Method (All checks will be made payable to the registered account owner)

o Partial Distribution

Amount $
or Mutual Fund Shares

o Total Distribution of Account Balance


o Fixed Amount $


Frequency:	o Monthly	o Quarterly
	o Semi-annually	o Annually


o Mail to my address currently on file.	Start Date

o Mail to the following address:

(*Medallion Signature Guarantee required.)



Mailing address		Check will be made payable to the registered account owner

o Mail to the following Financial Institution address:

(*Medallion Signature Guarantee required.)



		Check will be made payable to the registered account owner

Financial Institution		C/ O

Account Number

Mailing address

o Purchase funds into my existing non-retirement mutual fund account in the same fund family.

Account Number

Fund Name

o NEW ACCOUNT: Attach a completed application to purchase funds into a new non-retirement mutual fund account.

Withholding Election

Generally, IRA distributions are subject to 10% withholding unless you elect to have an additional amount withheld or elect to have no withholding. You may make a withholding election by selecting one of the options below. Your election will remain in effect for any subsequent distributions unless you change or revoke it by providing us with a new election.

Please select one of the following:

o Do not withhold Federal Income Tax

o Withhold 10% Federal Income Tax

o Withhold

--% Federal Income Tax (must be greater than 10%)

Caution: Even if you elect not to have Federal Income Tax withheld, you are liable for payment of Federal Income Tax on the taxable portion of your distribution. You also may be subject to tax penalties under the estimated tax payment ruled if your payments of estimated tax and withholding, if any, are not adequate.

When completed, please return the signed form to:


First Class Mail: Longleaf Partners Funds c/o PFPC Inc. P.O. Box 9694 Providence, RI 02940-9694		Overnight Mail: Longleaf Partners Funds c/o PFPC Inc. Sabin Street Pawtucket, RI 02860 (508) 871-8800

SIGNATURE

I certify that I am the participant authorized to make these elections and that all information provided is true and accurate. I further certify that no tax or legal advice has been given to me by the Custodian, Mutual Fund, or any agent of either of them, and that all decisions regarding the elections made on this form are my own. The Custodian is hereby authorized and directed to distribute funds from my account in the manner requested. The Custodian may conclusively rely on this certification and authorization without further investigation or inquiry. I expressly assume responsibility for any adverse consequences which may arise from the election(s) and agree that the Custodian, Mutual Fund, and their agents shall in no way be responsible, and shall be indemnified and held harmless, for any tax, legal or other consequences of the election(s) made on this form. This form may only be used for one account. If you have another account from which you wish to take distributions, please fill out a separate form.


X	DATE

PARTICIPANT’S SIGNATURE (or beneficiary’s signature if participant is deceased.)

MEDALLION SIGNATURE GUARANTEE – MEDALLION STAMP*

* (The Medallion Signature Guarantee may be executed by banks, broker dealers, credit unions, national securities exchanges and savings associations which participate in STAMP, SEMP or NYSE-MSP. A notary public is not a substitute for a Medallion Signature Guarantee. The Medallion Signature Guarantee stamp must include the words “SIGNATURE GUARANTEED, MEDALLION GUARANTEED” and otherwise comply with the medallion program requirements. Please check your fund prospectus or with your fund as to whether a signature guarantee is required.)

Exhibit 23(i)

LONGLEAF PARTNERS FUNDS TRUST
c/o Southeastern Asset Management, Inc.
6410 Poplar Avenue; Suite 900
Memphis, TN 38119

April 27, 2007

Securities and Exchange Commission
Boards of Trustees
     Longleaf Partners Funds Trust (the master trust)
          Longleaf Partners Fund (First Series)
          Longleaf Partners Small-Cap Fund (Second Series)
          Longleaf Partners International Fund (Third Series)

Ladies and Gentlemen:

This letter is written with respect to Post-Effective Amendment No. 30 to the Registration Statement on Form N-1A (File No. 33-10472), (the “Registration Statement”) of Longleaf Partners Funds Trust, a Massachusetts business trust (the “Trust”), as filed with the Securities and Exchange Commission registering under the Securities Act of 1933 an indefinite number of shares of beneficial interest of each Series having no par value (the “Shares”) of Longleaf Partners Fund, Longleaf Partners Small-Cap Fund, and Longleaf Partners International Fund, each a separate Series of the Trust.

I am familiar with and have examined such records, certificates and other documents and reviewed such questions of law as deemed necessary or appropriate for the purposes of this opinion. On the basis of such examination and review, you are advised that, in my opinion, proper trust proceedings have been taken by the Trust so that the Shares have been validly authorized and, when the shares have been issued and sold in accordance with the terms of the Prospectus included in the Registration Statement, (with the Trust receiving consideration for the net asset value per share prior to issuance of the shares), the Shares will be validly issued, fully paid and non-assessable when issued.

I hereby consent to the filing of this opinion as an exhibit to the said Post Effective Amendment No. 30 to the Registration Statement and the reference to my name in Part B of the Registration Statement under the heading “Other Service Providers; Legal Counsel.”

Very truly yours,


/s/ Andrew R. McCarroll Andrew R. McCarroll
VP and General Counsel Southeastern Asset Management, Inc. functioning as principal legal officer under agreements with Longleaf Partners Funds Trust and its separate Series

EXHIBIT 23(j)

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form N-1A of our report dated February 2, 2007, relating to the financial statements and financial highlights of Longleaf Partners Funds Trust, comprised of Longleaf Partners Fund, Longleaf Partners International Fund, and Longleaf Partners Small-Cap Fund, which appear in such Registration Statement. We also consent to the references to us under the headings “Financial Statements,” “Independent Registered Public Accounting Firm,” and “Financial Highlights” in such Registration Statement.

/s/ PricewaterhouseCoopers LLP
Baltimore, Maryland
April 27, 2007

EXHIBIT 23(p)

LONGLEAF PARTNERS FUNDS TRUST
SOUTHEASTERN ASSET MANAGEMENT, INC.
1996 SECURITIES TRADING POLICY AND PERSONAL CODE OF ETHICS
(AS AMENDED THROUGH DECEMBER 9, 2006)
TABLE OF CONTENTS


INTRODUCTION
	COMMITMENT TO INTEGRITY AND PROFESSIONALISM	2

PART A
SECTION I	PERSONNEL AND SECURITIES SUBJECT TO THE CODE
	PERSONNEL AND ACCOUNTS SUBJECT TO CODE	3
	SECURITIES SUBJECT TO CODE	3

SECTION II	SOUTHEASTERN’S POLICY ON PERSONAL EQUITY INVESTMENTS
	INVESTMENTS LIMITED TO LONGLEAF PARTNERS MUTUAL FUNDS	4
	EXCEPTIONS	4
	PROHIBITION ON MARKET TIMING	5

SECTION III	PRE-CLEARANCE RULES (PURCHASES/SALES)	6

SECTION IV	PRE-CLEARANCE / EXECUTION PROCEDURES	6

SECTION V	REPORTING, DISCLOSURE AND RECORD REQUIREMENTS	8

SECTION VI	INDEPENDENT TRUSTEES OF LONGLEAF PARTNERS MUTUAL FUNDS	10

SECTION VII	OTHER POTENTIAL CONFLICTS OF INTEREST
	BAN ON PRIVATE PLACEMENTS APPROPRIATE FOR CLIENTS	11
	BAN ON PURCHASES OF INITIAL PUBLIC OFFERINGS	11
	BAN ON SHORT-TERM TRADING	12
	LIMITATIONS ON RECEIPT OF GIFTS	12
	SERVICE AS A DIRECTOR OF PUBLIC COMPANY	12
	LIMITATIONS ON POLITICAL CONTRIBUTIONS TO CANDIDATES FOR STATE, COUNTY AND, MUNICIPAL OFFICES	12
	PROHIBITION ON SELECTIVE DISCLOSURE	13

SECTION VIII	DISCLOSURE IN PART II OF ADV	13

PART B
USE OF MATERIAL “INSIDE” OR NON-PUBLIC INFORMATION		13

PART C
PENALTIES FOR VIOLATIONS OF CODE		15

LONGLEAF PARTNERS FUNDS TRUST
SOUTHEASTERN ASSET MANAGEMENT, INC.

SECURITIES TRADING POLICY AND PERSONAL CODE OF ETHICS
(AS AMENDED THROUGH DECEMBER 9, 2006)

INTRODUCTION

COMMITMENT TO INTEGRITY AND PROFESSIONALISM

Southeastern Asset Management, Inc. (“Southeastern”) has made an ethical commitment to its clients to avoid conflicts of interest in securities being recommended for purchase or sale by its clients. The fundamental standard is the core belief that professional investment management personnel have a responsibility of professionalism and integrity which requires them to place clients’ interests in securities transactions before their own, and which prevents them from taking inappropriate advantage of their positions to achieve personal gain.

REGULATORY REQUIREMENTS

This Policy and Code of Ethics (referred to herein as the “Code”) is designed to assure the continuation of this ethical commitment and require compliance with applicable federal securities laws and industry standards:

1.		Rule 17j-1 under the Investment Company Act of 1940, as amended effective October 29, 1999, and again on March 6, 2000, which requires a written Code by mutual funds to regulate personal trading in securities which may be acquired by the mutual fund.

2.		Rule 204-2(12) under the Investment Advisers Act, which requires that an investment adviser maintain records on the personal trading transactions of certain personnel.

3.		Sec. 204A of the Investment Advisers Act of 1940, and Rule 204A-1 thereunder which mandates a written Code to reflect an adviser’s fiduciary obligations and prevent unauthorized use by investment advisory personnel of material “inside” or non- public information in their trading on behalf of clients or themselves.

4.		The Investment Company Institute’s “Report of the Advisory Group on Personal Investing”, dated May 9, 1994, and The Report by the Investment Company Institute to the Division of Investment Management of the U.S. Securities and Exchange Commission, dated April 21, 1995.

5.		Proposed Rule 206(4)-5 under the Investment Advisers Act of 1940, relating to political contributions.

REQUIREMENT TO ABIDE BY CODE OF ETHICS AND FEDERAL SECURITIES LAWS

All “access persons” as defined herein shall abide by this Code of Ethics and all securities laws applicable to Southeastern’s business.

PART A — PERSONAL SECURITIES TRADING

SECTION I
PERSONNEL AND SECURITIES SUBJECT TO THE CODE

RULE I(A). PERSONNEL AND ACCOUNTS SUBJECT TO CODE.

(1). SOUTHEASTERN PERSONNEL. All directors, officers and employees of Southeastern are classified as “access persons” as the result of knowledge about proposed and actual investments for the managed accounts and mutual funds. This Code of Ethics applies to all Southeastern personnel.

(2). RELATIVES AND AFFILIATED ACCOUNTS. Securities owned by immediate family members residing in the same household or for whom Southeastern personnel provide significant financial support (such as spouse and children) and securities held by trusts for the benefit of such dependents are attributed to the particular Southeastern personnel. Any trading on behalf of such dependents or entities maintained for their benefit must be treated as though the securities were owned by the related Southeastern personnel. In addition, securities owned by any investment partnerships in which a Southeastern employee or a dependent actively participates in the investment decision process would be attributable. All rules on permissible investments, pre-clearance, execution of trades, and reporting apply to securities transactions for these persons and related entities.

(3). INDEPENDENT TRUSTEES. Section VI applies to the independent or outside Trustees of Longleaf Partners Funds Trust.

(4). EXCEPTIONS. As allowed by Advisers Act Rule 204A-1 and Investment Company Act Rule 17j-1, access persons need not report holdings and transactions in accounts over which the person has no direct or indirect influence or control.

RULE I (B). SECURITIES SUBJECT TO CODE.

(1). COVERED SECURITIES. A “security” is defined as any instrument which enables a purchaser to share passively in a profit making venture and includes all equity and debt instruments, as well as derivatives of any securities, such as options, puts and calls, and futures.

(2). Exempt Securities. Regulations of the Securities & Exchange Commission (“SEC”) exempt certain securities from code of ethics requirements because their purchase or sale would not be in conflict with the market for client portfolio securities or because they are not subject to purchase by client accounts. Securities exempted by the SEC are:

	–		Direct obligations of the U.S. government

	–		High quality short-term debt instruments, including bankers acceptances, bank certificates of deposit, commercial paper, and high quality short-term debt instruments, including repurchase agreements.

	–		Shares issued by money market funds.

	–		Shares issued by open-end Funds (other than Longleaf, which is subject to reporting and pre-clearance for certain sales).

–

Commodities futures contracts which are not considered to be “securities” under SEC regulations.

LONGLEAF PARTNERS FUNDS. Southeastern has adopted a special internal policy limiting all equity mutual fund investments made by Southeastern personnel after the initial effective date of this Code solely to investments in the Longleaf Partners mutual funds and money market mutual funds, unless approval to invest in other equity mutual funds is granted. See Rules II(A) and II(B). Longleaf purchases and sales are subject to reporting and certain trading restrictions. See Rules II(c) and V(B).

SECTION II

SOUTHEASTERN’S POLICY ON PERSONAL EQUITY INVESTMENTS

RULE II(A). PERSONAL EQUITY INVESTMENTS LIMITED TO LONGLEAF PARTNERS MUTUAL FUNDS.

ALL SOUTHEASTERN PERSONNEL (INCLUDING IMMEDIATE FAMILY MEMBERS), SHALL HEREAFTER
USE THE LONGLEAF PARTNERS MUTUAL FUNDS AS THE SOLE MEDIUM FOR FUTURE INVESTING
IN PUBLICLY OFFERED EQUITY SECURITIES (AND DERIVATIVES OF SUCH SECURITIES),
UNLESS

	(I)		THE INVESTMENT IS EXCEPTED UNDER RULE II(B), BELOW, OR

	(II)		THE SOUTHEASTERN EMPLOYEE HAS RECEIVED AUTHORIZATION FOR THE PARTICULAR INVESTMENT FROM THE CODE COMPLIANCE COMMITTEE AS PROVIDED IN RULE IV(B).

Discussion. The mutual funds managed by Southeastern offer an attractive and appropriate equity investment medium through which its directors, officers, and employees can participate in the firm’s investment research and recommendations without making direct purchases of publicly offered equity securities of the types usually recommended for client accounts or the mutual funds. A policy limiting investments in publicly offered equities to the Longleaf Partners Funds and the other securities listed below assures that there can be no conflicts of interest in personal securities trading. As a matter of company policy, requiring Southeastern personnel to refrain from investing in mutual funds offered by competing mutual fund sponsors expresses confidence in and loyalty to company managed products.

AUTOMATIC DIVIDEND REINVESTMENT PLANS. Nothing in this Code of Ethics is intended to prevent any person covered by the Code from participating in or continuing to participate in an automatic reinvestment program under which dividends declared and paid by the issuer are reinvested in additional shares of the same issuer under a plan offered and administered by the issuer of any security owned at the time this Code became applicable to the covered person or which was later acquired in accordance with the provisions of this Code by any such covered person.

RULE II(B). EXCEPTIONS TO PURCHASES OF FUND SHARES

Until further notice, the Code Compliance Committee hereby exempts the following securities from the investment limitations of Rule II(A):

	1.		Any security classified by SEC regulation as an “exempt security” as set forth in Rule I(B)(2) (except registered investment companies other than the Longleaf Partners mutual funds), money market mutual funds, and bond funds.

	2.		Shares of registered investment companies, other than the Longleaf Partners mutual funds, purchased by a spouse of a Southeastern employee in connection with the spouse’s employer-provided retirement plan (401k, 403b, etc.). This exemption shall only be valid where the Longleaf Partners Funds are not an investment option in the spouse’s employer-provided retirement plan. This exemption does not apply to investment accounts, such as self-directed IRAs, which are outside of an employer-provided plan.

	3.		Securities of the employer of a spouse of a Southeastern employee, but only where purchased in connection with the spouse’s employer-provided retirement plan.

	4.		Subject to pre-clearance by the Compliance Officer or Alternate as provided in Rule IV(B)(i),

(i). Mid-America Apartment Communities, Inc., a NYSE listed real estate investment trust not appropriate as an investment for Southeastern’s client accounts or the mutual funds as the result of affiliations of certain Southeastern principals.

(ii). Private placements or limited offerings of a type which would not be appropriate as an investment for Southeastern’s client accounts or the mutual funds because of their local focus,

limited liquidity, or probable permanent non- registered or illiquid status, such as investments in local restaurants or local sports teams.

RULE II(C). PROHIBITION ON MARKET TIMING

(i) Prohibition. All Southeastern Personnel are prohibited from short-term trading or market timing in shares of the Longleaf mutual funds, Vantagepoint Equity Income Fund, Vantagepoint Aggressive Opportunities Fund, Litman Gregory Masters Select Equity Fund, and Litman Gregory Masters Select Value Fund. Short-term trading is defined as a redemption within 6 months of a purchase, except that exceptions may be granted where the purchase was made under an automatic dividend reinvestment, an automatic monthly investment, or in cases where the employee has held an equal amount of the shares to be redeemed for longer than 6 months. Even if a transaction meets an exception, however, if other indications of market timing exist, the transaction will not be allowed.

(ii) Monitoring. Any employee who wants to redeem Longleaf mutual fund shares within 6 months of a purchase must get pre-clearance. In addition, quarterly and annual holdings reports will contain detailed information on mutual fund transactions and holdings, and the Compliance Officer must review these reports for evidence of trading in violation of this section.

SECTION III
PRE-CLEARANCE RULES

RULE III(A). PERSONAL PURCHASES OF SECURITIES.

(i). General Exceptions. Southeastern personnel must obtain pre-clearance under Rule IV(B) to purchase shares of Mid-America Apartment Communities, Inc. and any private placements or limited offerings of securities. Pre-clearance is not required to purchase shares of the Longleaf Partners Funds, money market mutual funds, bond funds, or securities purchased in a spousal retirement plan under Rule II(B).

(ii). Special Exceptions. Southeastern personnel desiring a special exception to purchase a publicly offered security not exempted under Rule I(B)(2) or Rule II(B) must obtain authorization and pre-clearance by presenting a written request for approval to the Code Compliance Committee, with appropriate justification for the exception. The written request shall be presented to the Compliance Officer, who shall arrange a meeting of the Code Compliance Committee to act upon the request.

RULE III(B). PERSONAL SALES OF SECURITIES

Southeastern personnel must obtain pre-clearance before selling any security other than shares of the Longleaf Partners Funds, money market mutual funds, bond funds, or securities sold in a spousal retirement plan under Rule II(B). Pre-clearance applies to securities owned at the time this Code became effective and any other securities approved for purchase by the Code Compliance Committee. Pre-clearance shall be obtained by completing and signing a pre-clearance form supplied by Southeastern and submitting the form to the Compliance Officer. Note that sales of Longleaf within 6 months of a purchase require pre-clearance under Section II(C).

Discussion — Blackout Periods. Personal purchases or sales will not be authorized until at least 15 days have passed since the last client transaction. Authorization may be granted to sell a personally held security simultaneously with sales by client accounts where there is an outstanding public tender offer or similar comprehensive offer under which all of the securities held by the client accounts may be sold together with the personally held securities, provided that the simultaneous sale of securities held by Southeastern personnel would not adversely affect the price to be received by the client accounts.

SECTION IV
PRE-CLEARANCE AND EXECUTION PROCEDURES

RULE IV(A). CODE COMPLIANCE COMMITTEE AND COMPLIANCE OFFICER

CODE COMPLIANCE COMMITTEE. Has the authority to authorize purchases of publicly offered securities not otherwise allowed by Rule I(B)(2) or Rules II(A) and II(B). The Code Compliance Committee shall be composed of the Compliance Officer and the Southeastern Risk/Compliance Oversight Committee. A majority of the Committee shall constitute a quorum.

COMPLIANCE OFFICER OR ALTERNATE. Has the authority to authorize pre-clearance to purchase shares of Mid-America Apartment Communities, Inc. and sales of any non-exempt securities held by Southeastern personnel, and to authorize both purchases and sales of securities by the

independent Trustees of the mutual funds. The Compliance Officer is Jake McFadden, CCO-Mutual Funds; alternates to serve in his absence are first, Mike Wittke, CCO, then Andy McCarroll, VP and General Counsel, then Randy Holt, Vice President & Secretary, or Joe Ott, Vice President & Treasurer. Transactions and reporting of the Compliance Officer shall be reviewed by an alternate.

RULE IV(B). PROCEDURE FOR REQUESTING AUTHORIZATION TO PURCHASE NON-EXEMPT SECURITIES.

(i). Any Southeastern employee desiring to purchase or sell securities of Mid-America Apartment Communities, Inc. shall obtain pre-clearance for such transaction by presenting a written request for approval to the Compliance Officer on a form supplied by Southeastern.

(ii) Any Southeastern employee desiring a special exception to acquire a security not otherwise exempted by Rules I(B)(2), II(A) and II(B) must obtain authorization and pre-clearance for such purchase by presenting a written request for approval to the Code Compliance Committee on a form supplied by Southeastern, with acceptable justification for the exception. The written request shall be presented to the Compliance Officer, who shall arrange a meeting of the Code Compliance Committee to act upon the request.

RULE IV(C) PROCEDURE FOR REQUESTING AUTHORIZATION TO SELL NON- EXEMPT SECURITIES.

Without pre-clearance, Southeastern personnel shall not make a personal sale of any security or a derivative of any security unless it has been exempted by Rules I(B)(2), II(A) and II(B). If the security is under consideration for purchase or is presently held by any client account, authorization will not usually be granted until at least 15 days after completion of the last purchase or sale of the particular security by any such client account. The employee shall request advance written clearance from the Compliance Officer on a form supplied by Southeastern before any such security may be sold.

RULE IV(D) PROCESSING OF PRE-CLEARANCE FORMS.

The Compliance Officer or Alternate shall verify with the specified member of the portfolio management group other than the person who is seeking pre-clearance, that the subject security is not then being considered for either a purchase or sale by any managed account or the mutual funds. The member of the portfolio management group making the verification shall be the most senior portfolio manager by years of service who is available or, if none should be available, the most senior securities analyst by years of service who is available. Such person shall initial the Pre- Clearance Form to certify the verification, and the Compliance Officer or Alternate shall complete the balance of the Form.

RULE IV(E). LIMITED DURATION OF PRE-CLEARANCE AUTHORIZATION.

If the transaction cannot be executed within 7 business days after pre-clearance authorization approval has been granted, the approval expires and a new request for pre-clearance authorization must be submitted.

RULE IV(F). EXECUTION OF TRADES AND BROKER CONFIRMATION STATEMENTS

After the Southeastern employee has obtained pre-clearance authorization for a transaction, Southeastern’s most senior trader on duty shall place the trade for execution with a broker mutually acceptable to Southeastern and the particular employee, or the trade may be placed through the employee’s on-line trading account. A copy of the Southeastern trade ticket and/or a copy of the confirmation statement issued by the executing broker (including on-line trading account) shall be provided to Southeastern for the Compliance File.

SECTION V
REPORTING, DISCLOSURE AND RECORD REQUIREMENTS

RULE V(A). INITIAL AND ANNUAL REPORTING BY SOUTHEASTERN PERSONNEL.

Within ten (10) days after the initial date of employment, and annually thereafter when so requested by Southeastern, each director, officer and employee of Southeastern shall complete a report on a form supplied by Southeastern containing the following information (the report must be current as of a date no more than 45 days prior to employment for initial reports, and 45 days prior to the date the report was submitted for annual reports):

	(1).		The title and type of security, and as applicable the exchange ticker symbol or CUSIP number, number of shares (equity), and principal amount (debt) of all securities directly or indirectly beneficially owned by the Southeastern employee and members of his immediate family, including all mutual funds (affiliated and non-affiliated) and any private placement or limited offering investments, but excluding any other security classified as “exempt”, as shown in Rule I(B)(2).

	(2).		The name of any broker, dealer or bank with which each Southeastern employee maintains an account in which any securities are held for the employee’s direct or indirect benefit; the employee must instruct the broker, dealer, or bank to supply Southeastern with duplicate copies of all transaction and routine statements.

	(3).		A certification that the Code of Ethics has been received and read, and the employee understands the Code and recognizes that he or she is subject to it. Each amendment to the Code shall be promptly provided to employees, who shall acknowledge receipt in writing.

	(4).		A listing of all political contributions made to state or local candidates after September 30, 1999.

	(5).		After the first year, a certification that the employee has complied with the Code of Ethics during the preceding year, and has disclosed or reported all personal transactions required to be disclosed or reported. Any undisclosed or unreported transactions must then be disclosed.

	(6).		The date the employee submits the report.

RULE V(B). QUARTERLY TRANSACTION REPORTING BY SOUTHEASTERN PERSONNEL.

At the end of each calendar quarter, a questionnaire will be circulated to all personnel requesting information about personal purchases, sales, or any other type of acquisition or disposition of securities during the quarter. The form must be signed and returned by the 30th day of the month following the end of the calendar quarter, and will contain information on all “securities” owned by the employee which are not classified by the SEC as “exempt”, as set forth in Rule I(B)(2), and also including all shares owned by the Southeastern employee of the following: all open-end investment companies (affiliated and non- affiliated), Mid-America Apartment Communities, Inc., all private placements or limited offerings, securities in a spousal retirement plan covered under Rule II(B). The form must contain the following information about each reported transaction:

	(1).		The date of the transaction, the title and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares (equity), and principal amount (debt) of each reportable security involved;

	(2).		The nature of the transaction (i.e., purchase, sale, or any other type acquisition or disposition);

	(3).		The price of the security at which the transaction was effected;

	(4).		The name of the broker, dealer or bank with or through which the transaction was effected; and

	(5).		The date the employee submits the report.

RULE V(C). REPORTING OF VIOLATIONS.

Any employee who becomes aware of a violation of the Code shall report such violation to the Compliance Officer or Alternate. In addition, Southeastern’s Chief Compliance Officer must be notified of any reported violation.

RULE V(D). ANNUAL REPORT TO THE BOARDS OF LONGLEAF PARTNERS MUTUAL FUNDS.

Southeastern will prepare an annual report to the Boards of

Trustees of the mutual funds which shall contain the following and any other pertinent information on personal trading by Southeastern personnel:

(i). A summary of the existing personal trading rules and a discussion of any changes made during the year.

(ii). A report of any personal trading which has taken place in any securities which were recommended for purchase by client accounts or the mutual funds, any violations of this Code, and any remedial action taken.

(iii). A discussion of any recommended changes in existing procedures based upon experience, changes in applicable laws or regulations, or developments in industry practice.

(iv). An annual certification of procedures designed to comply with the Code.

RULE V(E). ESTABLISHMENT OF COMPLIANCE FILE. A Compliance File shall be maintained by the Compliance Officer which shall include the following:

	(1).		Code of Ethics, as amended from time to time.

	(2).		Acknowledgments by personnel of receipt of Code.

	(3).		Annual Reports of securities holdings and Certifications of Compliance by personnel.

	(4).		Executed pre-clearance forms.

	(5).		Trade tickets and confirmation statements for securities purchased and sold.

	(6).		Annual Report to Boards of Trustees of the Mutual Funds concerning personal trading activities.

	(7)		A record of any violations of the Code, and the resolution of the violation.

	(8).		Listing of access persons at the end of each quarter, and the names of compliance personnel having the responsibility of circulating and reviewing reports.

Information contained in the Compliance File shall be reviewed by the Compliance Officer or delegate within a reasonable time after receipt, and any questions shall be discussed with the person submitting the report.

SECTION VI
INDEPENDENT TRUSTEES OF LONGLEAF PARTNERS MUTUAL FUNDS

The independent Trustees of Longleaf Partners Funds Trust and its separate series or mutual funds are not classified as Southeastern personnel. In their official capacities, outside Trustees routinely receive information about current portfolio purchases and holdings of the mutual funds, but do not routinely receive information on proposed purchases or sales.

RULE VI(A). PRE-CLEARANCE APPROVAL

Independent trustees of the Longleaf Partners mutual funds who desire to purchase or sell any security other than those excepted in the following subparagraph shall telephone the Compliance Officer to determine whether the particular security is under consideration for purchase by any of the mutual funds before making a purchase.

EXCEPTIONS FOR OUTSIDE MUTUAL FUND TRUSTEES. Independent mutual fund Trustees are not required to obtain pre-clearance approval for purchases or sales of securities of issuers within the categories listed below, and transactions in such securities are not subject to any reporting requirement unless the particular security should subsequently be acquired by one of the mutual funds. Until further written notice, such categories of securities, none of which are expected to be purchased by the mutual funds, are:

(i). Securities issued by the particular Trustee’s employer or any affiliate, and by companies for which the particular Trustee’s employer or an affiliate may provide venture capital or financial consulting services.

(ii). Securities issued in initial public offerings, provided the opportunity to participate in the public offering has not been made available to the Trustee primarily because of his position as a Trustee of the Funds.

(iii). All municipal securities.

(iv). Securities exempted by SEC regulation, such as direct obligations of the U.S. government, high quality short-term debt instruments, including but not limited to bankers acceptances, bank certificates of deposit, commercial paper and repurchase agreements, shares of registered open-end investment companies and commodities futures contracts.

(vi). Securities in any other category after written notification has been given to the independent Trustees that the mutual funds are not expected to be investing in such issuers.

RULE VI(B). REPORTING BY INDEPENDENT TRUSTEES OF THE MUTUAL FUNDS.

Quarter-end reporting of securities transactions is not required unless the independent Trustee has purchased or sold a security held by one of the Longleaf Partners mutual funds during the quarter. Because prior approval of any such transaction is required under VI (A) above, the Compliance Officer will record such prior approval and request from the Trustee documentation of the completed transaction. Such documentation will be provided before the 10th day following the end of the calendar quarter in which a reportable transaction occurred, and will include the date and nature of the transaction, the title and number of securities, the price paid or received, the name of the broker, dealer or bank effecting the transaction, and the date such documentation is submitted.

As permitted by Paragraph (d)(2)(i) of Rule 17j-1, as amended, independent Trustees are not required to report on any securities transactions in any account over which the Trustee does not have direct or indirect influence or control, such as a fully discretionary account managed by another investment adviser.

SECTION VII
OTHER POTENTIAL CONFLICTS OF INTEREST

RULE VII(A). PRIVATE PLACEMENTS; BAN ON PURCHASES IN INITIAL PUBLIC OFFERINGS; BAN ON SHORT-TERM TRADING PROFITS

BAN ON PRIVATE PLACEMENTS OF SECURITIES WHICH WOULD BE APPROPRIATE FOR PURCHASE BY CLIENT ACCOUNTS OR MUTUAL FUNDS.

Southeastern personnel may not purchase private placements or limited offerings of securities of the types which could be recommended for purchase by a client account or the mutual funds (if the particular security were registered or offered publicly or if a client account or the mutual fund could purchase the security as a restricted security). Before authorization will be granted for a private placement of securities of a type which would not be appropriate for purchase by client accounts or the mutual funds, as allowed by Rule II(B) on pages 4 and 5, it must appear that the purchase would not result in any material conflict of interest which could presently or in the future adversely affect any Southeastern client accounts and that the opportunity for purchasing the private placement or limited offering was not created as a reward connected with the employee’s job function.

2. BAN ON PURCHASES IN INITIAL PUBLIC OFFERINGS (IPO’S). The industry consensus is that personnel of investment advisors should be flatly prohibited from acquiring shares in IPO’s, to preclude any possibility of profiting improperly from their positions with an investment company or on behalf of a managed account. Personnel of Southeastern are therefore prohibited from investing in securities offered through IPO’s.

3. BAN ON SHORT-TERM TRADING PROFITS. It is industry consensus that investment advisor personnel should not profit from “short- term” trading profits, defined as the purchase and sale, or the sale and purchase, of securities (other than registered investment companies) within a 60 day time frame which result in a profit. (A sale of a security at a loss within 60 days after its acquisition is not deemed to be a short-term trading transaction). All Southeastern personnel are therefore prohibited from engaging in short-term transactions which would result in a profit. Any profits made through short-term trading in violation of this Rule must be surrendered to Southeastern.

EXCEPTION TO 60 DAY HOLDING PERIOD. Upon application to the Compliance Officer and a showing of exceptional or unusual circumstances, an authorization for a sale in less than 60 days may be granted. Examples include but are not limited to the following:

(a). The security is not one which is contemplated for purchase by; is then held; or has been held by any managed accounts or the mutual funds; and there is a reasonable basis for the request to sell in less than 60 days.

(b). If the security was previously held by any managed account or the mutual funds, all such securities have been disposed of and at least 15 days have elapsed since the last transaction.

(c). The security being sold is an exchange traded option acquired to establish a bona fide hedge position on securities held or to be more than 60 days.

RULE VII(B). RECEIPT OF GIFTS. Southeastern personnel are prohibited from receiving gifts or any other thing of value (other than those having a value of not more than $100 per annum per entity) from any person or entity which does business with Southeastern or the Longleaf Partners mutual funds.

RULE VII(C). SERVICE AS A DIRECTOR OF A PUBLIC COMPANY. Southeastern personnel shall not serve as a director on the Board of a publicly traded company, absent a prior determination by the Boards of Trustees of the Longleaf Partners mutual funds and the Board of Directors of Southeastern that such Board service would not be inconsistent with the interests of the mutual funds, their shareholders, or other client accounts.

RULE VII(D). PAYMENT OR SOLICITATION OF POLITICAL CONTRIBUTIONS TO CANDIDATES FOR STATE, COUNTY, AND MUNICIPAL OFFICES. In accordance with proposed Rule 206(4)-5 under the Investment Advisers Act of 1940, payment or solicitation of political contributions to elected officials or candidates for election to offices or positions in any state or political subdivision of a state (county or city), including any agency, authority, or political subdivision, are limited as follows (unless prior approval has been granted by the Compliance Committee):

	(i).		Political contributions may not exceed $250 per candidate per election, unless approval for contributions exceeding $250 but not exceeding the maximum amount authorized by applicable law is granted by the Compliance Committee.

	(ii).		Political contributions may be made only to elected officials or candidates for whom the person making the contribution can vote, and shall not be made to political action committees or other intermediaries.

	(iii).		Southeastern personnel may not solicit contributions from other individuals or entities (such as political action committees or other intermediaries) for direct or indirect payment to or for the benefit of any elected officials or candidates for election to political office.

RULE VII (E). PROHIBITION ON SELECTIVE DISCLOSURE OF FUND PORTFOLIO HOLDINGS. Southeastern personnel shall not disclose holdings in the Longleaf Partners Funds which have not been released publicly on the Funds’ website or filed with the SEC on EDGAR, except in conformity with Southeastern’s and the Longleaf Partners Funds’ written privacy procedures.

SECTION VIII. DISCLOSURE IN PART II OF FORM ADV.

Southeastern shall describe this Code of Ethics in Part II of Form ADV, and state that a copy of the Code will be provided to any client or prospective client upon request.

PART B
RULE VIII — USE OF MATERIAL INSIDE OR NON-PUBLIC INFORMATION

Southeastern personnel shall not, while in the possession of material, non-public information (referred to as “inside” information) about a company (whether or not its securities are owned by client accounts) trade in the company’s securities or derivatives of such securities, either personally or on behalf of others (including managed accounts, the mutual funds, or relatives, friends or acquaintances), nor shall any such “inside” information be communicated to others.

Also, as stated in Rule II(C), Southeastern personnel are prohibited from market timing in Longleaf mutual fund shares. This prohibition is designed to prevent misuse by employees of non-public information regarding Fund portfolios. As a general matter, in addition to the restriction on market timing, if the CEO or General Counsel of Southeastern believe that non-public information regarding the Funds or one of its holdings presents an opportunity for Southeastern employees to improperly personally benefit, either may suspend purchases or redemptions by employees until further notice.

DEFINITION OF MATERIAL “INSIDE” INFORMATION. All non-public information is not necessarily prohibited inside information. The inside information about the company must be “material” before trading in the company’s securities is prohibited. To be material, the information must be significant enough so that it could presently affect the market price of the company’s stock or would be important to someone making an investment decision. Clearly specific information not yet public on matters such as earnings results, dividend increases or decreases, and decisions on changes of policy, product, or management composition should be considered to be material inside information. However, it is possible that management of a company may make general non-public statements to the portfolio selection group about the direction in which management may steer the company in the future, views on earnings estimates early in the period which are not yet definite, or other general observations, opinions or views which would be non-public but which also would not yet be definite or certain and could therefore be non-material.

POSSIBLE SOURCES OF “INSIDE” INFORMATION. In Southeastern’s situation, there are two primary sources of inside information:

(i) discussions by the portfolio selection group with management of companies owned or to be owned by client accounts and

(ii) discussions with outside brokers who execute portfolio trades. Because Southeastern is not engaged in the investment banking and retail brokerage businesses, there is no need to establish a “Chinese wall” to separate information received by some employees in the ordinary course of business about potential mergers, acquisitions and tender offers from disclosure to other employees who might misuse the information for their own accounts.

PROCEDURES TO LIMIT RECEIVING INSIDE INFORMATION.

(i). Meetings with Management of the Issuer. Any conversations with management of a portfolio company should be preceded by a statement to the effect that Southeastern’s

questions are not intended to evoke confidential or non-public information and that Southeastern seeks to avoid receipt of any such information so that its ability to trade on behalf of its clients will not be restricted.

(ii). Information Received by Southeastern Traders From Third Parties. It is possible that information from brokers about significant securities sales or purchases by an issuer’s management might constitute material inside information. Brokers may also supply Southeastern’s traders with other “rumors” which might be significant. Although such information may come indirectly from sources other than the issuer itself, the possibility that trading should be suspended should be discussed internally by the portfolio management group and the General Counsel.

PROCEDURE TO FOLLOW SHOULD A SOUTHEASTERN EMPLOYEE RECEIVE INFORMATION WHICH MAY BE MATERIAL, NON-PUBLIC INFORMATION.

(i). The nature of the information and its source must be reported immediately to the General Counsel. If the information is deemed “material”, the General Counsel will then notify the firm’s Trader to cease all transactions in that particular security. No further trading shall take place in the stock of the particular company, for managed accounts or for personal accounts, pending a determination on the nature of the information.

(ii). The General Counsel will discuss the matter with the Chairman of the Board and C.E.O. for determination of whether and under what circumstances further trading in the particular securities may take place.

PART C
PENALTIES FOR VIOLATIONS OF CODE
BY SOUTHEASTERN PERSONNEL

RULE IX(A). PENALTIES FOR IMPROPER PERSONAL TRADING IN SECURITIES BEING CONSIDERED FOR PURCHASE OR SALE OR BEING PURCHASED OR SOLD BY MANAGED ACCOUNTS OR THE MUTUAL FUNDS.

All material violations of the Policy and Code will be reported to and considered by the Board of Directors of Southeastern. In addition, all situations involving portfolio securities held or to be acquired by the mutual funds will be reported to the Board of Trustees of the mutual funds, which must also concur with any proposed sanctions.

The following sanctions apply to violations of the trading prohibitions as well as to the failure to comply with the transaction reporting requirements:

FIRST VIOLATION: Immediate sale by the employee of any improperly purchased security constituting a conflict of interest (if such sale would not damage the client accounts or the mutual funds), together with the surrender by the employee to Southeastern of any

profit realized in the transaction. Any profit realized on improper short- term trading transactions shall also be surrendered to Southeastern.

Discussion. Disgorgement of profits is similar to the penalty imposed on corporate directors and officers who violate the “short swing” selling prohibitions under Sec. 16(b) of the Securities Exchange Act of 1934 Act.

SECOND VIOLATION: A letter of censure and disgorgement of profits, in the same manner as the penalty for the first violation, together with a monetary penalty appropriate to the circumstance, to be assessed by the Board of Directors of Southeastern.

THIRD OR SUBSEQUENT VIOLATION: Disgorgement of profits, in the same manner as the penalty for the first violation, a substantial monetary penalty assessed by the Board of Directors of Southeastern and, in the discretion of the Board, suspension from employment (with or without pay) or termination of employment.

RULE IX(B). PENALTIES FOR IMPROPER USE OR COMMUNICATION OF INSIDE OR NON-PUBLIC INFORMATION

The Securities & Exchange Commission and/or the courts may levy the following civil and criminal penalties for the improper use of “inside” or non-public information, which are applicable to any person (including outside Trustees) misusing such information:

	1.		Recovery of the profit gained or loss avoided by the investment adviser personnel trading on such information or by any “tippee”, plus treble damages.

	2.		Expulsion from the securities industry.

	3.		Criminal penalties of up to $1 million in fines and up to 10 years imprisonment.

	4.		Penalties may also be assessed against Southeastern for failing to have in place procedures or failing to take steps to prevent the use or communication of “inside” information by its personnel.

Because there can be serious consequences for Southeastern itself should Southeastern personnel use material “inside” information improperly or communicate such information to others, Southeastern’s Board of Directors will determine appropriate sanctions in the event of a violation of this policy, taking into account the particular circumstances. Such sanctions may include monetary penalties or termination of employment.

Adopted August 19, 1996
Amended September 22, 1998
Amended September 20, 1999; effective September 30, 1999.

Amended December 14,2000
Amended June 17, 2002
Amended March 3, 2003
Amended December 8, 2003
Amended September 28, 2004
Amended December 9, 2004
Amended April 4, 2005
Amended December 9, 2005
Amended December 9, 2006

Exhibit 23(q)

RESOLUTION

WHEREAS, the Longleaf Partners Funds (the “Funds”) have hired Southeastern Asset Management, Inc. (“Southeastern”) to provide fund administration services; and

WHEREAS, the Fund Administration Agreement requires that Southeastern prepare or supervise the preparation of all registration statements and prospectuses, and file such registration statements with the appropriate regulatory authorities; and

WHEREAS, Andrew R. McCarroll, as Vice President and General Counsel of Southeastern, is responsible for overseeing the preparation and filing of registration statements for the Funds;

NOW, THEREFORE, THE BOARDS OF TRUSTEES OF THE FUNDS ADOPT THE FOLLOWING RESOLUTION:

RESOLVED, that Andrew R. McCarroll, as Vice President and General Counsel of Southeastern, be and he hereby is authorized to sign the Funds’ Registration Statement on Form N-1A on behalf of the Funds, and to file the Fund’s Registration Statement with the Securities and Exchange Commission, together with any exhibits or other documents required to be filed therewith.

Adopted by written consent, effective April 27, 2007.


	secured by real estate or interests therein and the Fund may hold and sell real estate acquired through default, liquidation, or other distributions of an interest in real estate as a result of the Fund’s ownership of such securities;

•	Purchase or sell commodities or commodity futures contracts, except that the Fund may invest in financial futures contracts, options thereon and similar instruments;

•	Make loans to other persons except through the lending of securities held by it (but not to exceed a value of one-third of total assets), through the use of repurchase agreements, and by the purchase of debt securities, all in accordance with its investment policies.


	1940 (for each holding, 5% of the Fund’s total assets, 3% of the company’s voting stock, with not more than 10% of the Fund’s total assets invested in all such investment companies) provided such acquisitions are made in the open market and there is no commission or profit to a dealer or sponsor other than the customary broker’s commission, and (b) may acquire securities of any investment company as part of a merger, consolidation or similar transaction.

•	Make short sales of equity portfolio securities whereby the dollar amount of short sales at any one time would exceed 25% of the net assets of the Fund, and the value of securities of any one issuer in which the Fund is short would exceed, at the time an order is placed, the lesser of 5% of the value of the Fund’s net assets or 5% of the securities of any class of any issuer; provided that the Fund maintains collateral in a segregated account consisting of cash or liquid securities with a value equal to the current market value of the shorted securities, which is marked to market daily. If the Fund owns an equal amount of such securities or securities convertible into or exchangeable for, without payment of any further consideration, securities of the same issuer as, and equal in amount to, the securities sold short (which sales are commonly referred to as “short sales against the box”), such restrictions shall not apply.

•	Invest in puts, calls, straddles, spreads or any combination thereof, except that the Fund may (a) purchase and sell put and call options on securities and securities indexes, and (b) write covered put and call options on securities and securities indexes and combinations thereof; provided that the securities underlying such options are within the investment policies of the Fund and the value of the underlying securities on which options may be written at any one time does not exceed 25% of total assets.

•	Invest in oil, gas or other mineral exploration programs, development programs or leases, except that the Fund may purchase securities of companies engaging in whole or in part in such activities.

•	Pledge, mortgage or hypothecate its assets except in connection with borrowings which are otherwise permissible.

•	Purchase securities on margin, except short-term credits as are necessary for the purchase and sale of securities, provided that the deposit or payment of initial or variation margin in connection with futures contracts or related options will not be deemed to be a purchase on margin.


	service in selecting firms to execute portfolio transactions for the Funds. Southeastern performs its own independent research in performing investment counsel services for the Funds. Southeastern may obtain supplemental investment research information from certain brokerage firms in the ordinary course of business, but Southeastern evaluates brokers based on the quality of their execution and brokerage services and does not make trading allocations to receive research.

	4. Purchases and sales of portfolio securities within the United States other than on a securities exchange are executed with primary market makers acting as principal, except where, in the judgment of Southeastern, better prices and execution may be obtained on a commission basis or from other sources. Southeastern may also utilize electronic communication networks (ECN’s) when the requisite volume of securities can be purchased or sold in the desired price range.


Investment Counsel
Southeastern Asset Management, Inc.
6410 Poplar Avenue, Suite 900
Memphis, TN 38119
(901) 761-2474

Transfer and Dividend Agent
PFPC Inc.
4400 Computer Drive
Westborough, MA 01581
For Information about your account,
call (800) 445-9469


Custodian
State Street Bank & Trust Company, Boston, MA




	Independent Registered Public Accounting Firm
	PricewaterhouseCoopers LLP
	Baltimore, MD and Boston, MA


	No person has been authorized to give any further information or make any representations other than those contained in the Prospectus or this Statement of Additional Information. If given or made, such other information or representations must not be relied upon as having been authorized by the Fund, its Investment Counsel, or its Administrator. This Prospectus does not constitute an offering in any state where such an offering may not be lawfully made.

(a).		Articles of Incorporation. Registrant is a Massachusetts business trust. Re-Stated Declaration of Trust; incorporated by reference from Post Effective Amendment No. 26, filed February 28, 2003.

(b).		Re-Stated By-Laws; incorporated by reference from Post Effective Amendment No. 28, filed February 28, 2005.

(c).		Instruments Defining Rights of Security Holders. Stock Certificate; Incorporated by reference from Post Effective Amendment No. 23, filed August 1, 2000 (Accession Number 0000950144-00-009321).

(d).		Investment Advisory Contracts (with Southeastern Asset Management, Inc.)

	(1)		Longleaf Partners Fund and Longleaf Partners Small-Cap Fund; incorporated by reference from Post Effective Amendment No. 21, filed February 26, 1999 (Accession Number 0000950144-99-002256).

	(2)		Longleaf Partners International Fund; incorporated by reference from Post-Effective Amendment No. 20, filed August 10, 1998 (Accession Number 0000950144-98-009323), and Post-Effective Amendment No. 27, filed February 27, 2004.

(e).		Underwriting Contracts. None; not applicable.

(f).		Bonus or Profit Sharing Contracts. None; not applicable.

(g).		Custodian Agreements. Custodian Agreement with State Street Bank and Trust Company; incorporated by reference from Post Effective Amendment No. 21, filed February 26, 1999 (Accession Number 0000950144-99-002256).

(h).		Other Material Contracts.

	(1).		Fund Administration Agreement between Southeastern Asset Management, Inc. and Longleaf Partners Fund and Longleaf Partners Small-Cap Fund; incorporated by reference from Post Effective Amendment No. 21, filed February 26, 1999 (Accession Number 0000950144-99-002256).

	(2).		Fund Administration Agreement between Southeastern Asset Management, Inc. and Longleaf Partners International Fund; incorporated by reference from Post Effective Amendment No. 20, filed August 10, 1998 (Accession Number 0000950144-98-009323).

	(3).		Transfer Agent Agreement with PFPC Inc.; Incorporated by reference from Post Effective Amendment No. 23, filed August 1, 2000 (Accession Number 0000950144-00-009321).

	(4).		Form of Shareholder Servicing Agent Agreement with National Financial Services Corp; incorporated by reference from Post Effective Amendment No. 21, filed February 26, 1999 (Accession Number 0000950144-99-002256).

	(5).		Traditional IRA Disclosure Statement and Custodial Agreement; Roth IRA Disclosure Statement and Custodial Agreement. Filed herewith.

	(6).		Simple IRA Disclosure Statement and Account Agreement. Filed herewith.

(i).		Legal Opinion. Filed herewith.

(j).		Other Opinions or Consents. Consent of PricewaterhouseCoopers LLP; filed herewith.

(k).		Omitted Financial Statements. None.

(1).		Initial Capital Agreements. None.

(m).		Rule 12b-1 Plan. None.

(n).		Financial Data Schedule; not applicable.

(o)		Rule 18f-3 Plan. Not applicable; none.

(p).		Code of Ethics; Filed herewith.

(q).		Resolution Regarding Authorized Signature of Andrew R. McCarroll.

	(i)		By the Trustees, by a majority vote of a quorum which consists of Trustees who were not parties to the action, suit or proceeding; or

	(ii)		If the required quorum is not obtainable, or if a quorum of disinterested Trustees so directs, by independent legal counsel in a written opinion; or

	(iii)		By the Shareholders.

	(A)		A majority of a quorum of Trustees who are neither “interested persons” of the Trust, as defined in Section 2(a)(19) of the Investment Company Act of 1940, nor parties to the action, suit or proceeding, or

	(B)		an independent legal counsel in a written opinion.

	(1)		Authorized in the specific case by the Trustees; and

	(2)		The Trust receives an undertaking by or on behalf of the Trustee, officer, employee or agent of the Trust to repay the advance if it is not ultimately determined that such person is entitled to be indemnified by the Trust; and

	(3)		either,

	(i)		such person provides a security for his undertaking, or

	(ii)		the Trust is insured against losses by reason of any lawful advances, or

	(iii)		a determination, based on a review of readily available facts, that there is reason to believe that such person ultimately will be found entitled to indemnification, is made by either-

	(A)		a majority of a quorum which consists of Trustees who are neither “interested persons” of the Trust, as defined in Section 2(a)(19) of the Investment Company Act of 1940, nor parties to the action, suit or proceeding, or

	(B)		an independent legal counsel in a written opinion.

	(a)		None. Each series is a no-load, open-end management investment company selling shares directly to the public.

	(b)		Not Applicable.

	(c)		Not Applicable.


	1.	The date;

	2.	A statement that you elect to revoke your IRA;

	3.	Your IRA account number;

	4.	The date your IRA was established;

	5.	Your signature and your printed or typed name.


	1.	Contributions, transfers and rollovers may be made only in “cash” by check, draft, or other form acceptable to the Custodian;

	2.	The Custodian must be a bank or savings and loan association;

	3.	No part may be invested in life insurance contracts;

	4.	Your interest must be nonforfeitable;

	5.	The assets of the custodial account may not be mixed with other property except in a common investment fund; and

	6.	You must begin receiving distributions from your account no later than April 1 of the year following the year in which you become 70 1/2 years old; and distributions must be completed over a period that is not longer than the joint life expectancy of you and your beneficiary.


*	These limits assume the contributor is an active participant in an employer-sponsored retirement plan and are based on modified adjusted gross income (MAGI).


	1.	due to your death, or

	2.	made because you became disabled, or

	3.	used specifically for deductible medical expenses which exceed 7.5% of your adjusted gross income, or

	4.	used for health insurance cost due to your unemployment, or

	5.	used for higher education expenses defined in section 529(e)(3) of the Internal Revenue Code, or

	6.	used toward the expenses of a first time home purchase up to a lifetime limit of $10,000, or

	7.	part of a scheduled series of substantially equal payments over your life, or over the joint life expectancy of you and a beneficiary. If you request a distribution in the form of a series of substantially equal payments, and you modify the payments before 5 years have elapsed and before attaining age 59 1/2, the penalty tax will apply retroactively to the year payments began through the year of such modification, or

	8.	required because of an IRS levy.


	1.	No part of the custodial account funds may be invested in life insurance contracts, nor may the assets of the custodial account be commingled with other property except in a common trust fund or common investment fund (within the meaning of section 408(a)(5)).

	2.	No part of the custodial account funds may be invested in collectibles (within the meaning of section 408(m)) except as otherwise permitted by section 408(m)(3), which provides an exception for certain gold, silver and platinum coins, coins issued under the laws of any state and certain bullion.


	1.	Notwithstanding any provision of this agreement to the contrary, the distribution of the Depositor’s interest in the custodial account shall be made in accordance with the following requirements and shall otherwise comply with section 408(a)(6) and Proposed Regulations section 1.408-8, including the incidental death benefit provisions of Proposed Regulations section 1.401(a) (9)-2, the provisions of which are incorporated by reference.

	2.	The Depositor’s entire interest in the custodial account must be, or begin to be, distributed not later than the Depositor’s required beginning date, April 1 following the calendar year in which the Depositor reaches age 70 1/2. By that date, the Depositor may elect, in a manner acceptable to the Custodian, to have the balance in the custodial account distributed in:


	(a)	A single sum or

	(b)	Payments over a period not longer than the life of the Depositor or the joint lives of the Depositor and his or her designated beneficiary.


	3.	If the Depositor dies before his or her entire interest is distributed to him or her, the remaining interest will be distributed as follows:


	(a)	If the Depositor dies on or after the required beginning date and:


	(i)	the designated beneficiary is the Depositor’s surviving spouse, the remaining interest will be distributed over the surviving spouse’s life expectancy as determined each year until such spouse’s death, or over the period in paragraph (a)(iii) below if longer. Any interest remaining after the spouse’s death will be distributed over such spouse’s remaining life expectancy as determined in the year of the spouse’s death and reduced by 1 for each subsequent year, or, if distributions are being made over the period in paragraph (a)(iii) below, over such period.


	(ii)	the designated beneficiary is not the Depositor’s surviving spouse, the remaining interest will be distributed over the beneficiary’s remaining life expectancy as determined in the year following the death of the Depositor and reduced by 1 for each subsequent year, or over the period in paragraph (a)(iii) below if longer.


	(iii)	there is no designated beneficiary, the remaining interest will be distributed over the remaining life expectancy of the Depositor as determined in the year of the Depositor’s death and reduced by 1 for each subsequent year.


	(b)	If the Depositor dies before the required beginning date, the remaining interest will be distributed in accordance with (i) below or, if elected or there is no designated beneficiary, in accordance with (ii) below: