SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]
Check the appropriate box:

[_] Preliminary Proxy Statement [_] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Under Rule 14a-12

EXCELSIOR FUNDS, INC.
EXCELSIOR TAX-EXEMPT FUNDS, INC.
EXCELSIOR FUNDS TRUST
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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

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[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1) Amount previously paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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[LOGO OF EXCELSIOR FUNDS]

EXCELSIOR FUNDS, INC.
EXCELSIOR TAX-EXEMPT FUNDS, INC.
EXCELSIOR FUNDS TRUST
73 Tremont Street
Boston, Massachusetts 02108-3913

Dear Shareholder:

You are cordially invited to attend the Special Meetings ("Meetings") of
Shareholders of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and
Excelsior Funds Trust, formerly known as Excelsior Institutional Trust, (each
a "Company" and, together, the "Companies") to be held on Friday, September 7,
2001 at 10:00 a.m., Eastern time, at the offices of U.S. Trust Company, 225
High Ridge Road, Stamford, Connecticut 06905.

At the Meetings, shareholders will be asked to vote on the following
matters: (1) the election of Boards of Directors of Excelsior Funds, Inc. and
Excelsior Tax-Exempt Funds, Inc. by each Company's respective shareholders and
the election of the Board of Trustees of Excelsior Funds Trust by its
shareholders; and (2) the ratification of the selection of Ernst & Young LLP
as the Companies' independent auditors.

Whether or not you plan to be present at a Meeting, your vote is needed. If
you do not plan to be present at the relevant Meeting, please complete, sign
and return the enclosed proxy card(s) promptly. A postage paid envelope is
enclosed for this purpose. You may also vote by Internet or telephone
according to the instructions on your Proxy.

We look forward to seeing you at the Meetings or receiving your proxy
card(s) or your vote by Internet or telephone, so your shares may be voted at
the Meetings.

Sincerely yours,

/s/ Frederick S. Wonham
Frederick S. Wonham
President

SHAREHOLDERS ARE URGED TO SIGN AND RETURN THE ENCLOSED PROXY
CARD(S) IN THE ENCLOSED ENVELOPE.

[LOGO OF EXCELSIOR FUNDS]

EXCELSIOR FUNDS, INC.
EXCELSIOR TAX-EXEMPT FUNDS, INC.
EXCELSIOR FUNDS TRUST

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

July 13, 2001

To the Shareholders of Excelsior Funds, Inc.,
Excelsior Tax-Exempt Funds, Inc. and
Excelsior Funds Trust:

Special Meetings of Shareholders (the "Meetings") of Excelsior Funds, Inc.,
Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust, formerly known as
Excelsior Institutional Trust, (each a "Company" and, together, the
"Companies") will be held on Friday, September 7, 2001 at 10:00 a.m., Eastern
time, at the offices of U.S. Trust Company, 225 High Ridge Road, Stamford,
Connecticut 06905.

The Funds ("Funds") of each Company are as follows:

Company Fund
------- ----

Excelsior Funds, Inc. Blended Equity Fund
Large Cap Growth Fund
Small Cap Fund
Technology Fund
Biotechnology Fund
Value and Restructuring Fund
Energy and Natural Resources Fund
Real Estate Fund
International Fund
Latin America Fund
Pacific/Asia Fund
Pan European Fund
Emerging Markets Fund
Intermediate-Term Managed Income Fund
Short-Term Government Securities Fund
Managed Income Fund
Money Fund
Government Money Fund
Treasury Money Fund

Excelsior Tax-Exempt Funds, Tax-Exempt Money Fund
Inc. New York Tax-Exempt Money Fund
Long-Term Tax-Exempt Fund
Intermediate-Term Tax-Exempt Fund
Short-Term Tax-Exempt Securities Fund
New York Intermediate-Term Tax-Exempt Fund
California Tax-Exempt Income Fund

Excelsior Funds Trust Mid Cap Value Fund (formerly known as the Value
Equity Fund)
Optimum Growth Fund
Equity Fund
Income Fund
Total Return Bond Fund
International Equity Fund
High Yield Fund

The Meetings will be held for the following purposes:

(1) To elect Messrs. Drake, Gomory, Hall, Lynch, Piel and Wonham, to the
Boards of Directors of Excelsior Funds, Inc. and Excelsior Tax-Exempt
Funds, Inc. and to the Board of Trustees of Excelsior Funds Trust;

(2) To ratify the selection of Ernst & Young LLP as the Companies'
independent auditors; and

(3) The transaction of such other business as may properly come before the
Meetings or any adjournments thereof.

The proposals referred to above are discussed in the Joint Proxy Statement
attached to this Notice. Each shareholder is invited to attend the relevant
Meeting in person. Shareholders of record at the close of business on July 2,
2001 have the right to vote at the Meetings. If you cannot be present at a
Meeting, we urge you to fill in, sign and promptly return the enclosed proxy
or you may vote by Internet or telephone according to the instructions on your
proxy card in order that the Meetings can be held and a maximum of shares may
be voted.

By Order of the Boards of Directors
of Excelsior Funds, Inc. and
Excelsior Tax-Exempt Funds, Inc.
and the Board of Trustees of
Excelsior Funds Trust

W. Bruce McConnel
Secretary

WE NEED YOUR PROXY VOTE IMMEDIATELY

A SHAREHOLDER MAY THINK HIS OR HER VOTE IS NOT IMPORTANT, BUT IT IS VITAL.
BY LAW, A SPECIAL MEETING OF SHAREHOLDERS SCHEDULED FOR SEPTEMBER 7, 2001 WILL
HAVE TO BE ADJOURNED WITHOUT CONDUCTING ANY BUSINESS IF LESS THAN A MAJORITY
(ONE-THIRD IN THE CASE OF EXCELSIOR FUNDS TRUST) OF THE SHARES ELIGIBLE TO
VOTE ARE REPRESENTED AT A MEETING. IN THAT EVENT, A COMPANY WOULD CONTINUE TO
SOLICIT VOTES IN AN ATTEMPT TO ACHIEVE A QUORUM. CLEARLY, YOUR VOTE COULD BE
CRITICAL IN ALLOWING A COMPANY TO HOLD THE MEETING AS SCHEDULED, SO PLEASE
RETURN YOUR PROXY CARD OR VOTE BY INTERNET OR TELEPHONE IMMEDIATELY.

EXCELSIOR FUNDS, INC.
EXCELSIOR TAX-EXEMPT FUNDS, INC.
EXCELSIOR FUNDS TRUST
73 Tremont Street
Boston, Massachusetts 02108-3913

JOINT PROXY STATEMENT

This Joint Proxy Statement is furnished in connection with the solicitation
of proxies by the Boards of Directors of Excelsior Funds, Inc. and Excelsior
Tax-Exempt Funds, Inc. and the Board of Trustees of Excelsior Funds Trust,
formerly known as Excelsior Institutional Trust, (together with Excelsior
Funds, Inc. and Excelsior Tax-Exempt Funds, Inc., the "Companies" and each
individually, a "Company"). The Special Meetings will be held at the offices
of U.S. Trust Company ("U.S. Trust Co."), 225 High Ridge Road, Stamford,
Connecticut on Friday, September 7, 2001 at 10:00 a.m., Eastern time (such
meetings and any adjournments thereof are referred to collectively as the
"Meetings" and individually as a "Meeting"). This Joint Proxy Statement and
the enclosed Proxy are expected to be distributed to shareholders on or about
July 13, 2001. The Funds ("Funds") of each Company are as follows:

Company Fund
------- ----

Excelsior Funds Trust Mid Cap Value Fund (formerly known as the Value
Equity Fund)
Optimum Growth Fund
Equity Fund
Income Fund
Total Return Bond Fund
International Equity Fund
High Yield Fund

- 1 -

It is expected that the solicitation of proxies will be primarily by mail.
The Companies' officers and investment advisers and administrators may also
solicit proxies by telephone, telegraph, facsimile, personal interview or the
Internet. The Companies have retained D.F. King & Co., Inc. to assist in the
solicitation of proxies at a cost of approximately $35,000. The Companies
intend to record votes by telephone or by Internet. Accordingly, they will use
procedures designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance with their
instructions, and to confirm that their instructions have been properly
recorded. The Companies will bear the proxy solicitation costs. Any
shareholder giving a proxy may revoke it at any time before it is exercised by
submitting to the relevant Company a written notice of revocation or a
subsequently executed proxy or by attending the relevant Meeting and electing
to vote in person. Proxies voted by telephone or by Internet may be revoked at
any time before they are voted in the same manner that proxies by mail may be
revoked. This Joint Proxy Statement is being used in order to reduce the
preparation, printing, handling and postage expenses that would result from
the use of a separate proxy statement for each Company.

The following table summarizes the proposals to be voted on at the Meetings
and indicates those shareholders who are being solicited with respect to each
proposal.

Proposal Shareholders Solicited
-------- ----------------------

1. To elect Messrs. Rodman L. Drake, The shareholders of each Company will
Ralph E. Gomory, Mel Hall, Roger vote together as a single class.
M. Lynch, Jonathan Piel and
Frederick S. Wonham to the Board
of Directors of Excelsior Funds,
Inc. and Excelsior Tax-Exempt
Funds, Inc. and to the Board of
Trustees of Excelsior Funds Trust.

2. To ratify the selection of Ernst & The shareholders of each Company will
Young LLP as the Companies' vote together as a single class.
independent auditors.

A Proxy is enclosed with respect to the shares you own in a Company. If the
Proxy is executed properly and returned, the shares represented by it will be
voted at the Meetings in accordance with the instructions thereon. Each full
share is entitled to one vote and each fractional share to a proportionate
fractional vote. If you do not expect to be present at a Meeting and wish your
shares to be voted, please complete the enclosed Proxy and mail it in the
enclosed reply envelope.

Shareholders who do not expect to be present at a Meeting and who wish to
have their shares voted are requested to complete the enclosed Proxy(ies) and
return it in the enclosed envelope. No postage is required if mailed in the
United States. Shareholders may also vote by telephone or the Internet as
described on the Proxy.

Each Company will furnish, without charge, copies of such Company's most
recent semi-annual and annual reports to shareholders to any shareholder upon
request. Each Company's semi-annual and annual reports to shareholders may be
obtained from such Company by writing to that Company at 73 Tremont Street,
Boston, Massachusetts 02108-3913, by calling (800) 446-1012 (from overseas,
call (617) 557-8280) or by the Internet: http://www.excelsiorfunds.com

THE BOARDS OF EXCELSIOR FUNDS, INC., EXCELSIOR
TAX-EXEMPT FUNDS, INC. AND EXCELSIOR FUNDS TRUST
RECOMMEND A VOTE FOR THE APPROVAL OF EACH PROPOSAL
DESCRIBED IN THIS JOINT PROXY STATEMENT FOR THEIR RESPECTIVE COMPANY.

- 2 -

PROPOSAL 1: ELECTION OF BOARD OF DIRECTORS/TRUSTEES

The first proposal to be considered at the Meetings of the Companies is the
election of six Board members who will constitute the entire Board of
Directors of Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. and
the entire Board of Trustees of Excelsior Funds Trust (collectively, the
"Directors"). The Boards of each of the Companies currently consists of
Messrs. Rodman L. Drake, Joseph H. Dugan, Wolfe J. Frankl, Mel Hall, Jonathan
Piel, Robert A. Robinson, Alfred Tannachion and Frederick S. Wonham. Messrs.
Dugan, Frankl, Robinson and Tannachion will be retiring from the Boards as of
July 27, 2001 and are not being considered for election to the Boards. The
other current Directors (the "Current Directors") are proposed for election to
each of the Boards.

Two new Directors have been nominated for election to the Boards of each
Company. They are Ralph E. Gomory and Roger M. Lynch (together the "New
Directors"). Neither Mr. Gomory nor Mr. Lynch is an "interested person" of the
Companies' investment advisers, as that term is defined in the Investment
Company Act of 1940 (the "1940 Act").

At a meeting held on May 18, 2001, the Boards of each of the Companies
approved a reduction in the size of each of the Boards to four Directors
immediately following the retirement of Messrs. Dugan, Frankl, Robinson and
Tannachion. The Boards also approved an increase in the size of each Board to
six Directors immediately after the approval by shareholders of Proposal 1 in
order to accommodate the two new Directors.

Messrs. Wonham, Drake and Piel were most recently elected to the Boards of
Directors of Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. at
Special Meetings of Shareholders held on December 9, 1996 and to the Board of
Trustees of Excelsior Funds Trust at a Special Meeting of Shareholders held on
May 3, 2000. Mr. Hall was elected to serve as a Director at a regular meeting
of the Companies' Boards held on July 28, 2000, but has not been elected by
shareholders. Messrs. Gomory and Lynch were nominated to serve as Directors at
a meeting of the Companies' Boards held on May 18, 2001, but have not been
elected by shareholders.

When Charles Schwab & Co. acquired the parent company of U.S. Trust Co. and
United States Trust Company of New York ("U.S. Trust NY and collectively with
U.S. Trust Co., "U.S. Trust") in May 2000, the Companies agreed to comply with
Section 15(f) of the 1940 Act. Under Section 15(f), for a period of at least
three years following a change of control involving an investment company's
adviser, at least 75% of each Company's Board must not be "interested" persons
of the investment adviser within the meaning of the 1940 Act. The Companies
currently meet this requirement and will continue to meet this requirement if
shareholders approve Proposal No. 1.

Each Director so elected will hold office until his successor is elected and
qualifies, or until his term as a Director is terminated as provided in the
Companies' By-Laws. The persons named as proxies in the accompanying
Proxy(ies) have been designated by each Company's Board and intend to vote for
the nominees named below.

Although the persons nominated have consented to serve as Directors if
elected and the Boards have no reason to believe that any nominee will be
unable to serve, if any nominee withdraws or otherwise becomes unable to serve
prior to the Meetings the persons named as proxies will vote for any
substitute nominee selected by the Boards.

All shares represented by valid Proxies will be voted in the election of
Directors for each nominee named below unless authority to vote for a
particular nominee is withheld. With respect to each Company, the six nominees
who receive the highest number of votes cast at the Meeting will be elected as
Directors. Cumulative voting is not permitted. Should any nominee withdraw
from the election or otherwise be unable to serve, the named proxies will vote
for the election of such substitute nominee as the Companies' Boards may
recommend unless a decision is made to reduce the number of Directors. The
following table sets forth certain information about each of the nominees:

- 3 -

Director/
Trustee Principal Occupation During
Name Age Since Past 5 Years and Other Affiliations
- ---- --- --------- -----------------------------------

Rodman L. Drake 57 6/94 Director, Excelsior Funds, Inc. and Excelsior Tax-Exempt
Funds, Inc. (since 1996); Trustee, Excelsior Funds
Trust; Director, Parsons Brinkerhoff, Inc. (engineering
firm) (since 1995); President, Continuation Investments
Group, Inc. (since 1997); President, Mandrake Group
(investment and consulting firm) (1994-1997); Chairman,
MetroCashcard International, Inc. (since 1999);
Director, Hotelvision, Inc. (since 1999); Director,
Alliance Group Services, Inc. (since 1998); Director,
Clean Fuels Technology Corp. (since 1998); Director,
Absolute Quality, Inc. (since 2000); Director, Hyperion
Total Return Fund, Inc. and three other funds for which
Hyperion Capital Management, Inc. serves as investment
adviser (since 1991); Co-Chairman, KMR Power Corporation
(power plants) (from 1993 to 1996); Director, The Latin
America Smaller Companies Fund, Inc. (from 1993 to
1998); Member of Advisory Board, Argentina Private
Equity Fund L.P. (from 1992 to 1996) and Garantia L.P.
(Brazil) (from 1993 to 1996); and Director, Mueller
Industries, Inc. (from 1992 to 1994).

Ralph E. Gomory 72 N/A President, Alfred P. Sloan Foundation (since 1989);
Director, Ashland, Inc. (refining, distribution, road
construction) (since 1989); Director, Lexmark
International, Inc. (printer manufacturing) (since
1991); Director, Washington Post Company (media) (since
1989); Director, Polaroid Company (cameras and film)
(since 1993).

Mel Hall 55 7/00 Director, Excelsior Funds, Inc. and Excelsior Tax-Exempt
Funds, Inc. (since July 30, 2000); Trustee, Excelsior
Funds Trust (since July 30, 2000); Chief Executive
Officer, Comprehensive Health Services, Inc. (health
care management and administration).

Roger M. Lynch 61 N/A Retired; Chairman of the Board of Trustees of Fairfield
University (since 1996); Director, SLD Commodities, Inc.
(importer of nuts) (since 1991); President, Corporate
Asset Funding Co., Inc. (asset securitization) (from
1987 to 1999); General Partner (from 1980 to 1986) and
Limited Partner (from 1986 to 1999), Goldman Sachs &
Co.; Chairman, Goldman Sachs Money Markets, Inc. (from
1982 to 1986).

Jonathan Piel 62 6/94 Director, Excelsior Funds, Inc. and Excelsior Tax-Exempt
Funds, Inc. (since 1996); Trustee, Excelsior Funds Trust
(since 1994); Vice President and Editor, Scientific
American, Inc. (from 1986 to 1994); Director, Group for
The South Fork, Bridgehampton, New York (since 1993);
and Member, Advisory Committee, Knight Journalism
Fellowships, Massachusetts Institute of Technology
(since 1984).

Frederick S. Wonham/1/ 69 12/95 Retired; Chairman of the Boards (since 1997), and
President, Treasurer and Director (since 1995) of
Excelsior Funds, Inc. and Excelsior Tax-Exempt Fund;
Chairman of the Board (since 1997), President, Treasurer
and Trustee (since 1995) of Excelsior Funds Trust; Vice
Chairman of U.S. Trust Corporation and U.S. Trust NY
(from February 1990 until September 1995); and Chairman,
U.S. Trust Company (from March 1993 to May 1997).

- --------
1 This Director/Trustee is considered to be an "interested person" of the
Company as defined in the 1940 Act. As of June 30, 2001, Mr. Wonham owned
or possessed voting control of 41,188 shares of common stock of The Charles
Schwab Corporation, the ultimate parent company of the Companies'
investment adviser.

- 4 -

During the Companies' fiscal year ended March 31, 2001, the Directors met
seven times. None of the Directors attended fewer than 75% of the meetings of
the Board for which they were eligible to attend.

The Companies' Boards have a Nominating Committee consisting of Messrs.
Drake, Piel and Robinson. Following his retirement from the Boards as of July
27, 2001, Mr. Robinson will no longer serve on the Nominating Committee. The
Nominating Committee is responsible for considering candidates for election to
the Companies' Boards in the event a position is vacated or created. The
Nominating Committee met once during the Companies' fiscal year ended March
31, 2001. At that meeting, held on July 28, 2000, the Nominating Committee
nominated Mr. Hall for election to the Companies' Boards. The Nominating
Committee also met on May 10, 2001 to nominate Messrs. Gomory and Lynch to the
Boards of the Companies. The Nominating Committee will consider nominees
recommended by the Company's shareholders. Shareholders who wish to recommend
a nominee should send nominations to the Secretary of the Company.

The Companies do not have audit or compensation committees.

Each member of the Board of Trustees of Excelsior Funds Trust receives an
annual fee of $4,000 plus a meeting fee of $250 for each meeting attended and
is reimbursed for expenses incurred in connection with service as a Trustee.
Each member of the Boards of Directors of Excelsior Funds, Inc. and Excelsior
Tax-Exempt Funds, Inc. receives an annual fee of $9,000 per Company plus a per
Company meeting fee of $1,500 for each meeting attended and is reimbursed for
expenses for attending meetings. The Chairman of the Board of each of the
Companies receives an additional $5,000 per annum with respect to each Company
for services in this capacity. The members of the Nominating Committee each
receive $2,000 per Company for services with respect to Excelsior Funds, Inc.
and Excelsior Tax-Exempt Funds, Inc. and $1,000 per annum with respect to
Excelsior Funds Trust.

The following chart provides certain information about the fees received by
the Companies' Directors in the fiscal year ended March 31, 2001.

Aggregate Pension or Total Compensation
Compensation Retirement Benefits from the Companies
Name of from the Accrued as Part of and Fund Complex*
Person/Position Companies Fund Expenses Paid to Directors
- --------------- ------------ ------------------- ------------------

Donald L. Campbell** $ 4,500 None $ 4,500(3)***
Director
Rodman L. Drake $46,500 None $46,500(3)***
Director
Joseph H. Dugan $44,750 None $44,750(3)***
Director
Wolfe J. Frankl $41,500 None $41,500(3)***
Director
Mel Hall $24,000 None $24,000(3)***
Director
Jonathan Piel $49,750 None $49,750(3)***
Director
Robert A. Robinson $49,750 None $49,750(3)***
Director
Alfred C. Tannachion $44,750 None $44,750(3)***
Director
Frederick S. Wonham $59,750 None $59,750(3)***
Chairman of the Boards,
President and Treasurer

- --------
* The "Fund Complex" consists of Excelsior Funds, Inc., Excelsior Tax-Exempt
Funds, Inc. and Excelsior Funds Trust.

** Mr. Campbell resigned from the Companies on July 30, 2000.

*** Number of investment companies in the Fund Complex for which each
individual served as Director.

As of July 2, 2001, the Board members and officers of the Companies as a
group owned beneficially less than 1% of the outstanding shares of each Fund
of each Company, and less than 1% of the outstanding shares of all Funds of
each Company in the aggregate.

THE BOARD OF EACH COMPANY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" EACH OF THE NOMINEES

- 5 -

PROPOSAL 2: RATIFICATION OF INDEPENDENT AUDITORS

As directed by the Companies' Boards, the ratification of the selection of
the independent auditors for the Companies' fiscal year ending March 31, 2002
is to be voted upon at the Meetings. It is intended that the persons named in
the accompanying Proxy(ies) will vote for Ernst & Young LLP, unless contrary
instructions are given. If the selection of the Companies' independent
auditors is not ratified by the shareholders at the Meetings, the Board will
reconsider such selection.

The Companies' financial statements for the fiscal year ended March 31, 2001
were audited by Ernst & Young LLP. In connection with its audit, Ernst & Young
reviewed the Companies' annual reports to shareholders and its filings with
the Securities & Exchange Commission. In addition to audit services, Ernst &
Young LLP reviews the Companies' federal and state tax returns, and provides
consultation and assistance on accounting, internal controls and related
matters.

At a meeting held on February 16, 2001, the Companies' Boards met with
representatives of Ernst & Young LLP to review the services Ernst & Young LLP
provides to the Companies. At the same meeting, the Companies' Boards
unanimously selected Ernst & Young LLP as the Companies' independent auditors
for its fiscal year ending March 31, 2002. A representative of Ernst & Young
LLP is expected to be available at the Meetings by telephone should any matter
arise requiring consultation with the auditors, and the auditors have been
given the opportunity to make a statement if they so desire.

Audit Fees. For the fiscal year ended March 31, 2001, the approximate
aggregate fee for professional services rendered for the audit of the
Companies' annual financial statements was $470,000.

Financial Information Systems Design and Implementation Fees. For the fiscal
year ended March 31, 2001, the Companies did not pay Ernst & Young LLP any
fees related to the design or implementation of hardware or software systems.

All Other Fees. For the fiscal year ended March 31, 2001, Ernst & Young LLP
was paid approximately $75,000 for all other non-audit services rendered on
behalf of the Companies.

THE BOARD OF EACH COMPANY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE RATIFICATION OF THE SELECTION OF
ERNST & YOUNG LLP AS THE COMPANIES' INDEPENDENT AUDITORS

- 6 -

VOTING INFORMATION

Record Date. Only shareholders of record at the close of business on July 2,
2001 will be entitled to vote at the Meetings. On that date, there were
3,959,233,021.06 shares of Excelsior Funds, Inc. outstanding, 2,980,784,809.27
shares of Excelsior Tax-Exempt Funds, Inc. outstanding and 105,792,419.11
shares of Excelsior Funds Trust outstanding.

All shares of each Company will vote in the aggregate on each of Proposals 1
and 2 and not by class or Fund at the Meetings. Each share of common stock in
the case of Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. and
each share of beneficial interest of Excelsior Funds Trust entitles the holder
of record to one vote, exercisable in person or by properly executed Proxy, on
all matters that properly come before the Meetings and any adjournments or
postponements thereof.

If you do not plan to be present at a Meeting, you should send your vote in
by one of the following methods:

1. Complete, sign and return the enclosed Proxy promptly in the postage-
paid envelope; or

2. Vote by phone by calling 1-800-690-6903. Enter the 12-digit control
number on your Proxy and follow the telephone instructions.

3. Vote through the Internet at www.proxyvote.com. Enter the 12-digit
control number on your Proxy and follow the instructions on the
website.

Voting Procedures. The affirmative vote of the holders of at least a
plurality of the shares of each Company, in person or by proxy, at the
Meetings and entitled to vote is required for the election of Directors of
each Company. Cumulative voting in the election of Directors is not permitted.
The approval of Proposal 2 requires the affirmative vote of the holders of a
majority of the outstanding shares of each Company.

U.S. Trust has informed the Companies that it intends to vote the shares of
the Companies over which it has discretion in favor of Proposals 1 and 2.

Quorum. With respect to both Proposals 1 and 2, a quorum is constituted with
respect to Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. by the
presence in person or by Proxy of the holders of more than 50% of the
outstanding shares of such Company entitled to vote.

With respect to Excelsior Funds Trust, a quorum on these Proposals is
constituted by the presence in person or by Proxy of the holders of more than
one-third of the outstanding shares of the Company entitled to vote. If a
Proxy is marked as "Withhold Authority" or "Abstain" on any matter, or if
specific instructions are given that no vote be cast on any specific matter (a
"Specified Non-Vote"), the shares represented by such proxy will not be voted
on such matter. Abstentions will be included within the number of shares
present at the Meeting of Excelsior Funds Trust and entitled to vote for
purposes of determining whether such matter has been authorized. However,
nominee and other Specified Non-Votes will not be so included.

With respect to Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc.,
all shares represented by a Proxy will be counted for purposes of determining
whether a quorum is present for purposes of transacting business of the
Companies. Shares represented by Proxies marked as "Withhold Authority" or
"Abstain" or Specified Non-Votes with respect to a particular matter will not
be voted on the specific matter.

In the event that a quorum is not present at a Meeting or at any adjournment
thereof, or in the event that a quorum is present at a Meeting but sufficient
votes to approve any of the proposals are not received, the persons named as
Proxies, or their substitutes, may propose and vote for one or more
adjournments of a Meeting to permit the further solicitation of Proxies. Any
such adjournment will require the affirmative vote of a majority of those
shares that are represented at a Meeting in person or by Proxy. If a quorum is
present, the persons named as Proxies will vote those proxies which they are
entitled to vote FOR any of the proposals in favor of such adjournments.
Proxies required to be voted AGAINST all proposals will not be used to adjourn
the Meeting to obtain additional Proxies or votes with respect to such
proposal. A shareholder vote may be taken with respect to a Company on any of
the Proposals prior to any such adjournment as to which sufficient votes have
been received for approval.

- 7 -

Other Shareholder Information. At the record date for the Meeting, U.S.
Trust and its affiliates held of record approximately the following
percentages of the outstanding shares of the Funds, as agent or custodian for
their customers:

Company and Fund % Held as Agent or Custodian
- ---------------- ----------------------------

Excelsior Funds, Inc.
Blended Equity Fund 72.26%
Large Cap Growth Fund 76.98%
Small Cap Fund 86.34%
Value and Restructuring Fund 26.47%
Energy and Natural Resources Fund 37.05%
Real Estate Fund 95.36%
International Fund 88.43%
Latin America Fund 73.91%
Pacific/Asia Fund 81.28%
Pan European Fund 87.88%
Emerging Markets Fund 97.37%
Short-Term Government Securities Fund 85.99%
Intermediate-Term Managed Income Fund 95.83%
Managed Income Fund 83.58%
Money Fund 90.56%
Government Money Fund 92.01%
Treasury Money Fund 64.09%
Technology Fund 94.02%
Biotechnology Fund 96.73%

Excelsior Tax-Exempt Funds, Inc.
Tax-Exempt Money Fund 99.88%
New York Tax-Exempt Money Fund 87.56%
Long-Term Tax-Exempt Fund 83.36%
Intermediate-Term Tax-Exempt Fund 92.64%
Short-Term Tax-Exempt Securities Fund 94.13%
New York Intermediate-Term Tax-Exempt Fund 92.11%
California Tax-Exempt Income Fund 97.76%

Excelsior Funds Trust
Mid Cap Value Fund 95.88%
Optimum Growth Fund 60.08%
Equity Fund 98.97%
Income Fund 97.93%
Total Return Bond Fund 95.59%
International Equity Fund 98.82%
High Yield Fund 93.55%

- 8 -

The name, address and share ownership of each person who may have possessed
sole or shared voting or investment power with respect to more than 5% of each
Fund's outstanding shares at the record date were:

Number of Percent
Outstanding Shares of Fund
------------------ -------

Excelsior Funds, Inc.
Blended Equity Fund
UST Co. Retirement Fund 1,673,294 8.30%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Small Cap Fund
UST Co. Retirement Fund 921,706 10.49%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Real Estate Fund
Higgins Residuary Trust 494,065 5.76%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

UST Co. Retirement Fund 916,147 10.68%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

International Fund
UST Co. Retirement Fund 1,916,718 7.71%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Latin America Fund
UST Co. Retirement Fund 180,433 5.15%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Emerging Markets Fund
The Carson Family Charitable Trust 165,463 5.73%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

UST Co. Retirement Fund 285,714 9.89%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Short-Term Government Securities Fund
D. & S. Johnson 705,000 5.78%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

- 9 -

Number of Percent
Outstanding Shares of Fund
------------------ -------

Managed Income Fund
UST Co. Retirement Fund 11,654,423 41.95%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Technology Fund
Norcross Wildlife FDN 1,048,332 10.32%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036
The Carson Family Charitable Trust 571,719 5.63%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Biotechnology Fund
UST Co. Retirement Fund 369,326 7.68%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Excelsior Tax-Exempt Funds, Inc.
Long-Term Tax-Exempt Fund
Alchemy LP 821,036 6.08%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Intermediate-Term Tax-Exempt Fund
Alchemy LP 1,918,510 5.15%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Excelsior Funds Trust
Optimum Growth Fund
UST Co. Retirement Fund 1,392,593 36.09%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Income Fund
Planned Parenthood NY INC MAIN 1,446,106 9.55%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Persimmon Char Rem Unitr. 2,151,605 14.20%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

- 10 -

Number of Percent
Outstanding Shares of Fund
------------------ -------

Higgins Residuary Trust 8,398,988 55.44%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Total Return Bond Fund
The Library Fund 3,792,915 9.03%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

The Gould Foundation 5,225,005 12.44%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

International Equity Fund
The Liberty Fund 1,512,849 14.95%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

The Gould Foundation 1,433,766 14.17%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Planned Parenthood NY INC MAIN 574,723 5.68%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

Mid Cap Value Fund
UST Co. Retirement Fund 2,511,923 57.61%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

High Yield Fund
UST Co. Retirement Fund 1,405,406 8.47%
c/o United States Trust Company of NY
114 West 47th Street
New York, NY 10036

For purposes of the 1940 Act, any person who owns directly or through one or
more controlled companies more than 25% of the voting securities of a company
is presumed to "control" such company.

- 11 -

ADDITIONAL INFORMATION

Officers. Officers of the Companies are elected by the Directors and hold
office until they resign, are removed or are otherwise disqualified to serve.
The following table sets forth information about certain of the Companies'
officers:

Principal Occupation
Position with During Past 5 Years and
Name and Address Each Company Other Affiliations
- ---------------- ------------- -----------------------

Frederick S. Wonham President and Retired; President, Treasurer and
c/o United States Trust Treasurer Director of Excelsior Funds, Inc. and
Company of NY Excelsior Tax-Exempt Fund (since
114 West 47th Street 1995); President, Treasurer and
New York, NY 10036 Trustee of Excelsior Funds Trust
Age: 66 (since 1995); Vice Chairman of U.S.
Trust Corporation and U.S. Trust NY
(from February 1990 until September
1995); and Chairman, U.S. Trust
Company (from March 1993 to May 1997).

Brian F. Schmidt Vice President and Senior Vice President, U.S. Trust Co.
U.S. Trust Company Chief Financial (since 1998); Vice President, U.S.
225 High Ridge Road Officer Trust Co. (from 1994 to 1998); Vice
Stamford, CT 06905 President and Chief Financial Officer,
Age: 42 Excelsior Funds, Inc., Excelsior Tax-
Exempt Funds, Inc. and Excelsior Funds
Trust (since February 2001); Chief
Financial Officer, Excelsior Venture
Investors III, LLC and Excelsior
Venture Partners III, LLC (since
2001); Chief Financial Officer,
Excelsior Private Equity Fund II, Inc.
(since 1997) and UST Private Equity
Fund, Inc. (since 1995).

Frank Bruno Vice President and Vice President, U.S. Trust Co. (since
U.S. Trust Company Assistant Treasurer 1994); Vice President and Assistant
225 High Ridge Road Treasurer, Excelsior Funds, Inc.,
Stamford, CT 06905 Excelsior Tax-Exempt Funds, Inc. and
Age: 41 Excelsior Funds Trust (since February
2001); Treasurer, Excelsior Venture
Investors III, LLC and Excelsior
Venture Partners III, LLC (since
2001); Treasurer, Excelsior Private
Equity Fund II, Inc. (since 1997) and
UST Private Equity Fund, Inc. (since
1995).

W. Bruce McConnel Secretary Partner of the law firm of Drinker
Drinker Biddle & Reath Biddle & Reath LLP.
LLP
One Logan Square
18th and Cherry Streets
Philadelphia, PA 19103-
6996
Age: 58

Michael P. Malloy Assistant Secretary Partner of the law firm of Drinker
Drinker Biddle & Reath Biddle & Reath LLP.
LLP
One Logan Square
18th and Cherry Streets
Philadelphia, PA 19103-
6996
Age: 41

- 12 -

Principal Occupation
Position with During Past 5 Years and
Name and Address Each Company Other Affiliations
- ---------------- ------------- -----------------------

Julia Babik Assistant Treasurer Mutual Fund Accounting Manager, SEI
SEI Investments Mutual Investments Mutual Funds Services.
Funds Services
One Freedom Valley
Drive
Oaks, PA 19456
Age: 32

Timothy Barto Assistant Treasurer Attorney, SEI Investments Mutual Funds
SEI Investments Mutual Services (1999-present); Associate,
Funds Services Dechert Price & Rhoads (law firm)
One Freedom Valley (1997-1999); Associate, Richter,
Drive Miller & Finn (law firm) (1994-1997).
Oaks, PA 19456
Age: 33

None of the officers receives any compensation from the Companies for acting
as officers of the Companies.

Investment Adviser, Principal Underwriter and Administrators. U.S. Trust NY,
which is located at 114 West 47th Street, New York, New York 10036, and U.S.
Trust Co., which is located at 225 High Ridge Road, Stamford, Connecticut
06905, serve as the Companies' investment advisers. Edgewood Services, Inc.,
which is located at 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-5829,
is the principal underwriter for the shares of the Companies' Funds. Edgewood
Services, Inc. is a wholly-owned subsidiary of Federated Investors, Inc. The
Companies' administrators are: U.S. Trust Co.; SEI Investments Mutual Fund
Services, One Freedom Valley Drive, Oaks, Pennsylvania 19456; and Federated
Services Company, Federated Investors Tower, Pittsburgh, Pennsylvania 15222-
3779.

OTHER MATTERS

The Companies do not intend to hold meetings of shareholders except to the
extent that such meetings may be required under the 1940 Act or state law.
Shareholders who wish to submit proposals for inclusion in the Proxy Statement
for a subsequent shareholder meeting should send their written proposals to
the Companies at their principal office within a reasonable time before such
meeting.

No business other than the matters described above is expected to come
before the Meetings, but should any other matter requiring a vote of
shareholders arise, including any question as to an adjournment of the
Meetings, the persons named in the enclosed Proxy(ies) will vote thereon
according to their best judgment in the interests of each Company.

Dated: July 13, 2001

- 13 -

APPENDIX A
FORM OF PROXY CARDS
[LOGO]
Excelsior Funds, Inc.
73 Tremont Street
Boston, MA 02108

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
EXCELSIOR FUNDS, INC.
(THE "COMPANY")

This proxy is solicited by the Board of the Company for use at a special
meeting of shareholders to be held on Friday, September 7, 2001, at 10:00 a.m.
(Eastern time), at the offices of U.S. Trust Company, 225 High Ridge Road,
Stamford, CT 06905.

The undersigned hereby appoints Frank Bruno, Ralph Pastore, Michael Malloy
and Diana McCarthy, and each of them, with full power of substitution, as
proxies of the undersigned to vote at the above-stated special meeting, and at
all adjournments or postponements thereof, all shares representing interests in
the Funds of the Company held of record by the undersigned on July 2, 2001, the
record date for the meeting, upon the following matters and upon any other
matter that may come before the meeting, in their discretion.

Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney or executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.

Every properly signed proxy will be voted in the manner specified thereon and,
in the absence of specification, will be treated as GRANTING authority to vote
FOR Proposals 1 and 2.

PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED.

To vote by Telephone

1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903.
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.

To vote by Internet

1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS
KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

The proxies are authorized to vote in their discretion upon any other
business which may properly come before the Meeting and any adjournments
thereof.

(1) Vote on Directors

[ ] For All

[ ] Withhold All

[ ] For All except:

To withhold authority to vote, mark "For All Except" and write the
nominee's number on the line below.

1) Rodman L. Drake
2) Ralph E. Gomory
3) Morrill Melton Hall, Jr.
4) Roger M. Lynch
5) Jonathan Piel
6) Frederick S. Wonham

-------------------------
(2) Proposal to ratify the selection of Ernst & Young LLP as the Company's
independent auditors.

[_] For [_] Against [_] Abstain

- ---------------------------------- --------
Signature (Please Sign Within Box) Date

- ---------------------------------- --------
Signature (Joint Owners) Date

[LOGO]
Excelsior Tax-Exempt Funds, Inc.
73 Tremont Street
Boston, MA 02108

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
EXCELSIOR TAX-EXEMPT FUNDS, INC.
(THE "COMPANY")

Every properly signed proxy will be voted in the manner specified thereon and,
in the absence of specification, will be treated as GRANTING authority to vote
FOR Proposals 1 and 2.

PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED.

To vote by Telephone

1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903.
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.

To vote by Internet

The proxies are authorized to vote in their discretion upon any other
business which may properly come before the Meeting and any adjournments
thereof.

(1) Vote on Directors

[ ] For All

[ ] Withhold All

[ ] For All except:

To withhold authority to vote, mark "For All Except" and write the
nominee's number on the line below.

1) Rodman L. Drake
2) Ralph E. Gomory
3) Morrill Melton Hall, Jr.
4) Roger M. Lynch
5) Jonathan Piel
6) Frederick S. Wonham

-------------------------
(2) Proposal to ratify the selection of Ernst & Young LLP as the Company's
independent auditors.

[_] For [_] Against [_] Abstain

- ---------------------------------- --------
Signature (Please Sign Within Box) Date

- ---------------------------------- --------
Signature (Joint Owners) Date

[LOGO]
Excelsior Funds Trust
73 Tremont Street
Boston, MA 02108

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
EXCELSIOR FUNDS TRUST
(THE "COMPANY")

Every properly signed proxy will be voted in the manner specified thereon
and, in the absence of specification, will be treated as GRANTING authority to
vote FOR Proposals 1 and 2.

PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED.

To vote by Telephone

1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903.
3) Enter the 12-digit control number set forth on the Proxy card and follow the
simple instructions.

To vote by Internet

The proxies are authorized to vote in their discretion upon any other
business which may properly come before the Meeting and any adjournments
thereof.

(1) Vote on Trustees

[ ] For All

[ ] Withhold All

[ ] For All except:

To withhold authority to vote, mark "For All Except" and write the
nominee's number on the line below.

1) Rodman L. Drake
2) Ralph E. Gomory
3) Morrill Melton Hall, Jr.
4) Roger M. Lynch
5) Jonathan Piel
6) Frederick S. Wonham

-------------------------
(2) Proposal to ratify the selection of Ernst & Young LLP as the Company's
independent auditors.

[_] For [_] Against [_] Abstain

- ---------------------------------- --------
Signature (Please Sign Within Box) Date

- ---------------------------------- --------
Signature (Joint Owners) Date