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 Pursuant to Rule 14a-11(c) or Rule 14a-12
Excelsior Funds, Inc.
-------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
-------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
__________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
__________________________________________________________________
(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):
__________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
__________________________________________________________________
(5) Total fee paid:
__________________________________________________________________
[x] Fee paid previously with preliminary materials.
[_] 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:
__________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
__________________________________________________________________
(3) Filing Party:
__________________________________________________________________
(4) Date filed:
__________________________________________________________________
EXCELSIOR FUNDS, INC. EXCELSIOR TAX-EXEMPT FUNDS, INC.
----------------
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
----------------
September 9, 1996
To the Shareholders of Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds,
Inc.:
Special Meetings of Shareholders of Excelsior Funds, Inc. ("Excelsior") and
Excelsior Tax-Exempt Funds, Inc. ("Excelsior Tax-Exempt" and, collectively
with Excelsior, the "Companies") will be held concurrently on October 29, 1996
at 9:30 A.M. in the offices of U.S. Trust Company of New York at 114 West 47th
Street, New York, New York for the following purposes:
(1)to elect nine (9) directors;
(2) to consider and vote on the ratification of the selection of Ernst
& Young LLP as each Company's independent auditors for the fiscal
year ending March 31, 1997;
(3) to consider and vote on a revised fundamental issuer
diversification policy for the Money, Government Money and Treasury
Money Funds of Excelsior and the Tax-Exempt Money Fund of Excelsior
Tax-Exempt; and
(4) to transact such other business as may properly come before the
Special Meetings or any adjournment thereof.
The subjects referred to above are discussed in the Proxy Statement attached
to this Notice. Each shareholder is invited to attend the Special Meetings of
Shareholders in person. Shareholders of record at the close of business on
August 28, 1996 have the right to vote at the Special Meetings. If you cannot
be present at the Special Meetings, we urge you to fill in, sign and promptly
return the enclosed Proxy in order that the Special Meetings can be held and a
maximum number of shares may be voted.
W. Bruce McConnel, III
Secretary
EXCELSIOR FUNDS, INC.
EXCELSIOR TAX-EXEMPT FUNDS, INC.
73 TREMONT STREET
BOSTON, MASSACHUSETTS 02108 (800) 446-1012
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Boards of Directors of Excelsior Funds, Inc. ("Excelsior") and
Excelsior Tax-Exempt Funds, Inc. ("Excelsior Tax-Exempt" and, collectively
with Excelsior, the "Companies") for use at the Companies' Special Meetings of
Shareholders to be held concurrently in the offices of United States Trust
Company of New York ("U.S. Trust") at 114 West 47th Street, New York, New
York, on October 29, 1996 at 9:30 A.M. Such Special Meetings and any
adjournment thereof are hereinafter collectively referred to as the "Meeting."
Each Company's investment portfolios are hereinafter referred to as "Funds,"
and the Funds' shares are hereinafter referred to as "Shares."
It is expected that the solicitation of proxies will be primarily by mail.
The Companies' officers and service contractors may also solicit proxies by
telephone, telegraph or personal interview. The Companies will bear all proxy
solicitation costs. Any shareholder giving a proxy may revoke it at any time
before it is exercised by submitting to the particular Company a written
notice of revocation or a subsequently executed proxy or by attending the
Meeting and electing to vote in person. This Proxy Statement and the enclosed
form of proxy (the "Proxy") are expected to be distributed to shareholders on
or about September 9, 1996.
The following table summarizes the proposals to be voted on at the Meeting
by the shareholders of each Company and indicates those shareholders who are
being solicited with respect to each proposal:
PROPOSAL SHAREHOLDERS SOLICITED
-------- ----------------------
All Funds voting together in the
1. Election of Directors. aggregate.
2. Ratification of the selection of Ernst All Funds voting together in the
& Young LLP as the Company's aggregate.
independent auditors for the fiscal
year ending March 31, 1997.
3. Each Money Market Fund (as defined
Approval of revised fundamental issuer below) voting separately on a Fund-by-
diversification policy. Fund basis.
A Proxy is enclosed with respect to the Shares owned by you. The Proxy
should be completed in full. Each full Share is entitled to one vote, and each
fractional Share to a proportionate fractional vote. Cumulative voting in the
election of directors is not permitted.
If a Proxy is executed properly and returned, the Shares represented by it
will be voted at the Meeting in accordance with the instructions thereon. If
you do not expect to be present at the Meeting and wish your Shares to be
voted, please date and sign the enclosed Proxy and mail it in the enclosed
reply envelope.
2
(1) ELECTION OF DIRECTORS (ALL FUNDS)
At the Meeting shareholders will be asked to consider the election of nine
directors, who will constitute the entire Board of Directors of each Company.
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
particular Company's By-Laws. The persons named as proxies in the accompanying
Proxy have been designated by the Boards of Directors and intend to vote for
the nominees named below. Messrs. Campbell, Dugan, Frankl, Tannachion,
Robinson and Wonham are incumbent directors who are standing for re-election.
Messrs. Campbell, Dugan, Frankl, Tannachion and Robinson were most recently
elected as directors at a Special Meeting of Shareholders held on November 20,
1991. Mr. Wonham was elected to the Boards of Directors at regular meetings of
such Boards held on November 17, 1995. The directors of the Companies who are
not "interested persons" of the Companies as defined in the Investment Company
Act of 1940 (the "Non-Interested Directors") have nominated Messrs. Drake,
McDowell and Piel as new directors to be voted on by the respective Companies'
shareholders.
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 nine
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 Boards of
Directors may recommend unless a decision is made to reduce the number of
directors serving on the Boards. The following table sets forth certain
information about each of the nominees:
DIRECTOR BUSINESS EXPERIENCE
NAME AGE SINCE SINCE DURING PAST FIVE YEARS
---- --- ----------- --------------------------------------------
Donald L. Campbell1 70 August 1984 Retired; Director of Excelsior and Excelsior
Tax-Exempt; Director of UST Master Variable
Series, Inc. (since 1994); Trustee of
Excelsior Institutional Trust (since 1995);
Director, Royal Life Insurance Co. of New
York (since 1991).
Rodman L. Drake 53 N/A Trustee, Excelsior Institutional Trust and
Excelsior Funds (since 1994); Director,
Parsons Brinkerhoff, Inc. (engineering firm)
(since 1995); President, Mandrake Group
(investment and consulting firm) (since
1994); Director, Hyperion Total Return Fund,
Inc. and four other funds for which Hyperion
Capital Management, Inc. serves as
investment adviser (since 1991); Co-
Chairman, KMR Power Corporation (power
plants) (since 1993); Director, The Latin
American Growth Fund (since 1993); Member of
Advisory Board, Argentina Private Equity
- --------
1. At August 28, 1996, Mr. Campbell owned approximately 18,830 shares of the
New York Intermediate-Term Tax-Exempt Fund of Excelsior Tax-Exempt.
3
DIRECTOR BUSINESS EXPERIENCE
NAME AGE SINCE SINCE DURING PAST FIVE YEARS
---- --- ------------ --------------------------------------
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).
Joseph H. Dugan 71 August 1984 Retired; Director of Excelsior and
Excelsior Tax-Exempt; Director of UST
Master Variable Series, Inc. (since
1994); Trustee of Excelsior
Institutional Trust (since 1995).
Wolfe J. Frankl/2/ 75 April 1986 Retired; Director of Excelsior and
Excelsior Tax-Exempt; Director of UST
Master Variable Series, Inc. (since
1994); Trustee of Excelsior
Institutional Trust (since 1995);
Director, Deutsche Bank Financial,
Inc. (since 1989); Director, The
Harbus Corporation (since 1951);
Trustee, HSBC Funds Trust and HSBC
Mutual Funds Trust (since 1988).
W. Wallace McDowell, Jr. 59 N/A Trustee, Excelsior Institutional Trust
and Excelsior Funds (since 1994);
Private Investor (since 1994);
Managing Director, Morgan Lewis
Githens & Ahn (from 1991 to 1994); and
Director, U.S. Homecare Corporation
(since 1992), Grossmans, Inc. (from
1993 to 1996), Children's Discovery
Centers (since 1984), ITI
Technologies, Inc. (since 1992) and
Jack Morton Productions (since 1987).
Jonathan Piel 57 N/A Trustee, Excelsior Institutional Trust
and Excelsior Funds (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).
Robert A. Robinson/3/ 70 October 1987 Director of Excelsior and Excelsior
Tax-Exempt; Director of UST Master
Variable Series, Inc. (since 1994);
Trustee of Excelsior Institutional
Trust (since 1995); President
Emeritus, The Church Pension Fund and
its affiliated companies (since
- --------
2. At August 28, 1996, Mr. Frankl owned approximately 2,611 shares of the
Equity Fund, 4,085 shares of the Income and Growth Fund and 2,145 shares of
the Early Life Cycle Fund of Excelsior.
3. At August 28, 1996, Mr. Robinson owned approximately 16,181 shares of the
Short-Term Tax-Exempt Securities Fund, 11,391 shares of the Long-Term Tax-
Exempt Fund, 39,268 shares of the Intermediate-Term Tax-Exempt Fund and
44,700 shares of the Tax-Exempt Money Fund of Excelsior Tax-Exempt.
4
DIRECTOR BUSINESS EXPERIENCE
NAME AGE SINCE SINCE DURING PAST FIVE YEARS
---- --- ------------- ------------------------------------
1966); Trustee, H.B. and F.H. Bugher
Foundation and Director of its
wholly owned subsidiaries--Rosiclear
Lead and Flourspar Mining Co. and
The Pigmy Corporation (since 1984);
Director, Morehouse Publishing Co.
(since 1974); Trustee, HSBC Funds
Trust and HSBC Mutual Funds Trust
(since 1982); Director, Infinity
Funds, Inc. (since 1995).
Alfred C. Tannachion*,/3/ 70 July 1985 Retired; Chairman of the Boards,
President and Treasurer of Excelsior
and Excelsior Tax-Exempt; Chairman
of the Board, President and
Treasurer of UST Master Variable
Series, Inc. (since 1994); Chairman
of the Board, President and
Treasurer of Excelsior Institutional
Trust (since 1995).
Frederick S. Wonham*,/4/ 65 November 1995 Retired; Director of Excelsior and
Excelsior Tax-Exempt; Trustee of
Excelsior Funds and Excelsior
Institutional Trust (since 1995);
Vice Chairman of U.S. Trust
Corporation and U.S. Trust Company
of New York (until September 1995);
Chairman, U.S. Trust of Connecticut.
- --------
* This director is considered to be an "interested person" of the Companies
as defined in the Investment Company Act of 1940 (the "1940 Act").
3. At July 31, 1996 Mr. Tannachion owned approximately 1,000 shares of common
stock of U.S. Trust Corporation, the parent corporation of U.S. Trust, and
approximately 707 shares of common stock of The Chase Manhattan
Corporation, the parent corporation of Chase Global Funds Services Company,
the Companies' co-administrator.
4. At September 6, 1996 Mr. Wonham owned approximately 35,842 shares of common
stock of U.S. Trust Corporation, the parent corporation of U.S. Trust, and
approximately 20,800 shares of common stock of The Chase Manhattan
Corporation, the parent corporation of Chase Global Funds Services Company,
the Companies' co-administrator. At August 28, 1996, Mr. Wonham owned
approximately 3,097 shares of the International Fund, 1,030 shares of the
Business and Industrial Restructuring Fund, 1,295 shares of the Early Life
Cycle Fund and 1,282 shares of the Communication and Entertainment Fund of
Excelsior, and 175,462 shares of the Tax-Exempt Money Fund and 14,144
shares of the Short-Term Tax-Exempt Securities Fund of Excelsior Tax-
Exempt.
Each director receives an annual fee of $9,000 with respect to each Company
plus a per-Company meeting fee of $1,500 for each meeting attended and is
reimbursed for expenses incurred in attending meetings. The Chairman of the
Board is entitled to receive an additional $5,000 per annum with respect to
each Company for services in such capacity.
As of August 28, 1996, the directors and officers of each Company as a group
owned beneficially less than 1% of the outstanding Shares of each Fund of the
Company, and less than 1% of the outstanding Shares of all Funds of the
Company in the aggregate.
5
The following chart provides certain information about the fees received by
the Companies' directors in the most recently completed fiscal year.
PENSION OR
RETIREMENT TOTAL
BENEFITS COMPENSATION
ACCRUED AS FROM THE COMPANIES
AGGREGATE PART OF AND FUND
NAME OF COMPENSATION FROM FUND COMPLEX* PAID
PERSON/POSITION EACH COMPANY EXPENSES TO DIRECTORS
--------------- ----------------- ---------- ------------------
Donald L. Campbell $16,500 None (4)**$39,500
Director
Joseph H. Dugan $16,500 None (4)**$39,500
Director
Wolfe J. Frankl $16,500 None (4)**$39,500
Director
Robert A. Robinson $16,500 None (4)**$39,500
Director
Alfred C. Tannachion $21,500 None (4)**$51,500
Chairman of the Boards,
President and Treasurer
Frederick S. Wonham $6,375 None (4)**$14,424
Director
- --------
* The "Fund Complex" consists of Excelsior, Excelsior Tax-Exempt, UST Master
Variable Series, Inc., Excelsior Funds and Excelsior Institutional Trust.
** Number of investment companies in the Fund Complex for which director
serves as director or trustee.
Each Board of Directors met 5 times during the Companies' fiscal year ended
March 31, 1996. Each director attended all of the Board meetings held during
the period he served as a director. Neither Company currently has any standing
committees. However, pursuant to the plan adopted by Excelsior in accordance
with Rule 12b-1 under the 1940 Act with respect to the Trust Shares of
Excelsior, the Non-Interested Directors of Excelsior are responsible for the
selection and nomination of candidates to serve as Non-Interested Directors.
THE BOARD OF DIRECTORS OF EACH COMPANY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
EACH NOMINEE FOR DIRECTOR OF THE COMPANY.
(2) RATIFICATION OF INDEPENDENT AUDITORS (ALL FUNDS)
At their meeting on May 17, 1996, each Company's Board of Directors,
including a majority of the directors who were Non-Interested Directors of the
Company, selected Ernst & Young LLP as the Company's independent auditors for
the fiscal year ending March 31, 1997. The ratification or rejection of the
selection of the independent
6
auditors for each Company's fiscal year ending March 31, 1997 is to be voted
upon at the Meeting, and the persons named as proxies in the accompanying
Proxy intend to vote for the ratification of the selection of Ernst & Young
LLP as each Company's independent auditors, unless contrary instructions are
given. The selection of independent auditors is being submitted for
ratification at the Meeting as required by the 1940 Act. Ernst & Young LLP has
been each Company's independent auditor since its organization, and has
informed each Company that it has no material direct or indirect financial
interest in either Company. A representative of Ernst & Young LLP is expected
to be present at the Meeting to make a statement if desired and to be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS OF EACH COMPANY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS THE INDEPENDENT
AUDITORS OF THE COMPANY.
(3) APPROVAL OF REVISED FUNDAMENTAL ISSUER DIVERSIFICATION POLICY (MONEY
MARKET FUNDS ONLY)
At the Meeting, shareholders of the Money, Government Money and Treasury
Money Funds of Excelsior and the Tax-Exempt Money Fund of Excelsior Tax-Exempt
(collectively, the "Money Market Funds") will be asked to approve revisions to
the fundamental issuer diversification policy of these Funds. As revised, the
fundamental issuer diversification policy would read as follows:
No Money Market Fund may purchase securities of any one issuer if
immediately after such purchase more than 5% of the value of its total
assets would be invested in the securities of such issuer, provided that up
to 25% of the value of each Money Market Fund's total assets may be
invested without regard to this 5% limitation; notwithstanding the
foregoing restriction, each Money Market Fund may invest without regard to
the 5% limitation in Government Securities (as defined in the 1940 Act) and
as otherwise permitted in accordance with Rule 2a-7 under the 1940 Act or
any successor rule.
For purposes of this policy, "Government Security" currently means: (i) any
security issued or guaranteed as to principal or interest by the United
States, or by a person controlled or supervised by and acting as an
instrumentality of the U.S. Government pursuant to authority granted by the
Congress of the United States, or any certificate of deposit for any of the
foregoing; and (ii) any other security as may be deemed to be a "Government
Security" by the Securities and Exchange Commission for these purposes. A
security would be considered to be issued by the governmental entity or
entities whose assets and revenues back the security, or, with respect to a
private activity bond that is backed only by the assets and revenues of a non-
governmental user, such non-governmental user. In addition, under certain
circumstances, the guarantor of a guaranteed security would also be considered
to be an issuer in connection with such guarantee.
The proposed revised fundamental policy is consistent with the new
flexibility with respect to issuer diversification requirements provided by
pending amendments to Rule 2a-7 under the 1940 Act. Each Money Market Fund
currently may not invest more than 5% of its total assets in the securities of
any one issuer, other than U.S. Government obligations, except that up to 25%
of the value of its total assets may be invested without regard to this 5%
limitation. The pending amendments to Rule 2a-7 and the proposed revised
issuer
7
diversification policy would permit the Money Market Funds to exclude from
this issuer diversification requirement securities that are subject to an
unconditional demand feature from a party that does not control, is not
controlled by and is not under common control with the issuer of the security
subject to the demand feature.
As an operating policy, each Money Market Fund will be managed in accordance
with Rule 2a-7, as amended from time to time. Under Rule 2a-7, a taxable money
market fund like the Money, Government Money and Treasury Money Funds
currently may invest up to 5% of its total assets in the securities of a
single issuer (other than government securities), except that the money market
fund may invest up to 25% of its total assets in securities of a single issuer
for a period of up to three business days after purchase thereof. The pending
amendments to Rule 2a-7 extend this 5% issuer diversification requirement and
the exceptions discussed above to national tax-exempt money market funds like
the Tax-Exempt Money Fund.
The approval of the revised fundamental issuer diversification policy with
respect to a Money Market Fund requires the affirmative vote of the holders of
a "majority of the outstanding Shares" of the Money Market Fund (as defined in
the 1940 Act), which means the lesser of (a) the holders of 67% or more of the
Shares of the Money Market Fund present at the Meeting if the holders of more
than 50% of the outstanding Shares of the Money Market Fund are present in
person or by proxy or (b) more than 50% of the outstanding shares of the Money
Market Fund.
THE BOARD OF DIRECTORS OF EACH COMPANY RECOMMENDS THAT SHAREHOLDERS OF EACH
MONEY MARKET FUND VOTE "FOR" THE REVISED FUNDAMENTAL ISSUER DIVERSIFICATION
POLICY.
VOTING INFORMATION
RECORD DATE. Only shareholders of record at the close of business on August
28, 1996 will be entitled to vote at the Meeting. On that date the outstanding
Shares of each Fund of Excelsior and Excelsior Tax-Exempt were as follows:
NUMBER OF
EXCELSIOR FUND SHARES OUTSTANDING
- -------------- ------------------
Money Fund 403,640,189.090
Government Money Fund 506,743,396.970
Treasury Money Fund 309,153,761.660
Equity Fund* 11,268,679.264
Income and Growth Fund 8,725,753.051
Long-Term Supply of Energy Fund 2,580,934.516
Productivity Enhancers Fund 3,282,072.000
Environmentally-Related Products and Services Fund 693,711.413
Aging of America Fund* 4,964,367.141
Communication and Entertainment Fund* 4,795,128.150
8
NUMBER OF
EXCELSIOR FUND SHARES OUTSTANDING
- -------------- ------------------
Business and Industrial Restructuring Fund* 6,117,476.848
Global Competitors Fund* 7,631,549.148
Early Life Cycle Fund* 8,399,292.545
International Fund 10,050,210.597
Emerging Americas Fund 6,453,421.226
Pacific/Asia Fund 9,032,993.510
Pan European Fund 5,786,928.970
Managed Income Fund 21,106,591.007
Intermediate-Term Managed Income Fund 10,052,401.076
Short-Term Government Securities Fund 4,117,328.285
NUMBER OF
EXCELSIOR TAX-EXEMPT SHARES OUTSTANDING
- -------------------- ------------------
Tax-Exempt Money Fund 966,928,687.190
Intermediate-Term Tax-Exempt Fund 28,071,275.219
Long-Term Tax-Exempt Fund 11,162,554.177
New York Intermediate-Term Tax-Exempt Fund 11,228,576.243
Short-Term Tax-Exempt Securities Fund 6,147,157.817
- --------
* These Funds offer a separate series of Shares designated as Trust Shares
which had not commenced operations as of the record date for the Meeting.
QUORUM. With respect to both the election of directors and the ratification
of the independent auditors, a quorum is constituted by the presence in person
or by proxy of the holders of more than 50% of the outstanding Shares of each
Company's Funds on an aggregate basis. With respect to the proposal to approve
the revised fundamental issuer diversification policy for the Money Market
Funds, a quorum is constituted with respect to a Money Market Fund by the
presence in person or by proxy of the holders of more than 50% of the
outstanding Shares of such Money Market Fund entitled to vote at the Meeting.
For purposes of determining the presence of a quorum for transacting business
at the Meeting and calculating votes, abstentions and broker "non-votes"
(i.e., proxies from brokers or nominees indicating that such persons have not
received instructions from the beneficial owner or other persons entitled to
vote Shares on a particular matter with respect to which the brokers or
nominees do not have discretionary power) will be treated as Shares that are
present at the Meeting but which have not been voted. Therefore, abstentions
and broker "non-votes" will be treated as having no effect on the votes with
respect to the election of directors and the ratification of the independent
auditors, but will be treated as having the same effect as a vote against the
proposal to approve the revised fundamental issuer diversification policy for
the Money Market Funds. In the event that a quorum is not present at the
Meeting, or in the event that a quorum is present but sufficient votes to
approve a particular Proposal are not received, the persons named as proxies,
or their substitutes, may propose one or more adjournments of the Meeting to
permit the further
9
solicitation of Proxies. Any such adjournment will require the affirmative
vote of a majority of those Shares affected by the adjournment that are
represented at the 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 the Proposal in favor of such adjournments, and will vote those
proxies required to be voted AGAINST such Proposal against any adjournment.
ANNUAL MEETINGS. Neither Company intends to hold annual meetings of
shareholders for the election of directors and other business unless and until
such time as less than a majority of the directors holding office have been
elected by the shareholders, at which time the directors then in office will
call a special shareholder meeting for the election of directors. The
directors of each Company will also call a special shareholder meeting upon
the written request of shareholders owning at least 25% or more of the
Company's Shares entitled to vote.
OTHER SHAREHOLDER INFORMATION. At the record date for the Meeting, U.S.
Trust and its affiliates held of record approximately 89% and 90% of the
outstanding Shares of Excelsior and Excelsior Tax-Exempt, respectively, as
agent or custodian for their customers. In addition, at that date U.S. Trust
and its affiliates held investment and/or voting power with respect to a
majority of each Company's outstanding Shares on behalf of their customers.
The name, address and share ownership of each other person who may have
possessed sole or shared voting or investment power with respect to more than
5% of the outstanding Shares of any Fund at that date were as follows:
PERCENTAGE
OF FUND
AMOUNT SHARES
FUND NAME AND ADDRESS OF SHARES OWNED OWNED
---- --------------------------------- --------------- ----------
Treasury Money.............. French Holding Escrow Account 23,093,112 7.5%
c/o U.S. Trust Company
114 W. 47th Street
New York, N.Y. 10036
W.H. Reaves & Co. Proprietary 15,725,399 5.1%
Account c/o U.S. Trust Company
114 W. 47th Street
New York, N.Y. 10036
Government Money............ H.P. Dooney 25,945,273 5.1%
c/o U.S. Trust Company
114 W. 47th Street
New York, N.Y. 10036
Equity...................... U.S. Trust Corporation Retirement 2,088,703 18.5%
Fund 114 W. 47th Street
New York, N.Y. 10036
Environmentally-Related
Products and Services...... V. Camuto Equity Account 62,344 9.0%
c/o U.S. Trust Company
114 W. 47th Street
New York, N.Y. 10036
International............... U.S. Trust Corporation Retirement 1,328,395 13.2%
Fund 114 W. 47th Street
New York, N.Y. 10036
Managed Income.............. U.S. Trust Corporation Retirement 9,185,644 43.5%
Fund 114 W. 47th Street
New York, N.Y. 10036
10
ADDITIONAL INFORMATION
OFFICERS OF THE COMPANIES
Officers of each Company are elected by and serve at the pleasure of the
Company's Board of Directors. The following table sets forth certain
information about each Company's officers, except Mr. Tannachion who is the
President and Treasurer of each Company and about whom information is provided
under "Election of Directors." The same officers serve each Company.
POSITION BUSINESS
OFFICER WITH THE EXPERIENCE DURING
NAME AGE SINCE FUND PAST FIVE YEARS
---- --- ----------- ------------------- ------------------------
John M. Corcoran 31 July 1994 Assistant Treasurer Vice President, Director
Chase Global Funds of Administration,
Services Company Client Group, Chase
73 Tremont Street Global Funds Services
Boston, MA 02108-3913 Company (since July
1996); Second Vice
President, Manager of
Administration, Chase
Global Funds Services
Company (from October
1993 to July 1996);
Audit Manager, Ernst &
Young LLP (from August
1987 to September 1993).
Sherry Aramini 32 July 1996 Assistant Secretary Second Vice President,
Chase Global Funds Blue Sky Compliance
Services Company Manager, Chase Global
73 Tremont Street Funds Services Company
Boston, MA 02108-3913 (since May 1996);
Technical Resource
Manager, Chase Global
Funds Services Company
(from April 1995 to May
1996); Financial
Reporting Supervisor,
Chase Global Funds
Services Company (from
September 1993 to April
1995); Audit Supervisor,
Coopers & Lybrand L.L.P.
(from July 1990 to
August 1993).
W. Bruce McConnel, III 53 August 1984 Secretary Partner of the law firm
Philadelphia National of Drinker Biddle &
Bank Building Reath.
1345 Chestnut Street
Philadelphia, PA
19107-3496
----------------
Drinker Biddle & Reath, of which Mr. McConnel is a partner, receives legal
fees from each Company in connection with general corporate services.
11
INFORMATION ABOUT INVESTMENT ADVISER, SUB-ADVISERS,
ADMINISTRATORS AND DISTRIBUTOR
U.S. Trust serves as each Company's investment adviser. U.S. Trust's
principal offices are at 114 West 47th Street, New York, New York 10036.
Foreign and Colonial Asset Management ("FACAM") serves as sub-adviser to the
International and Pan European Funds of Excelsior and Foreign and Colonial
Emerging Markets Limited ("FCEML") serves as sub-adviser to the Emerging
Americas and Pacific/Asia Funds of Excelsior. FACAM and FCEML each have
principal offices at Exchange House, Primrose Street, London EC2A2NY.
U.S. Trust, Chase Global Funds Services Company ("CGFSC") and Federated
Administrative Services ("Federated") serve as each Company's administrators.
CGFSC's principal business address is 73 Tremont Street, Boston, Massachusetts
02108-3913 and Federated's principal business address is Federated Investors
Tower, 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779.
Edgewood Services, Inc. (the "Distributor") serves as each Company's
distributor. The Distributor's address is P.O. Box 897, Pittsburgh, PA 15230-
0897.
OTHER MATTERS
No business other than the matters described above is expected to come
before the Meeting, but should any other matter requiring a vote of
shareholders arise, including any question as to an adjournment of the
Meeting, the persons named in the enclosed Proxy will vote thereon according
to their best judgment in the interests of each Company.
Dated: September 9, 1996
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO
HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
EACH COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS RESPECTIVE ANNUAL
REPORTS TO SHAREHOLDERS DATED MARCH 31, 1996 TO ANY SHAREHOLDER UPON REQUEST.
EACH COMPANY'S ANNUAL REPORTS TO SHAREHOLDERS MAY BE OBTAINED FROM THE COMPANY
BY SENDING A WRITTEN REQUEST TO THE COMPANY AT THE ADDRESS PROVIDED ON PAGE 1,
OR BY CALLING TOLL-FREE AT (800) 446-1012.
12
PROXY CARD
THIS PROXY IS SOLICITED BY THE BOARDS OF DIRECTORS OF EXCELSIOR
FUNDS, INC. AND EXCELSIOR TAX-EXEMPT FUNDS, INC. (the "Companies")
Special Meetings of Shareholders (collectively, the "Meeting")
October 29, 1996
The undersigned, revoking previous proxies, hereby appoints Frances R. Cagney,
David F. Connor and Michael P. Malloy, and each of them, the proxies of the
undersigned, with full power of substitution to each of them, to vote all shares
of Common Stock evidencing interests in all Funds of each Company that are held
of record by the undersigned on the record date for the Meeting to be held at
the offices of United States Trust Company of New York, 114 W. 47th Street, New
York, NY 10036 on October 29, 1996 at 9:30 A.M. (Eastern Time) and at any
adjournments thereof.
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 the election of all nominees to serve as director and FOR Proposals 2 and 3.
[Name and address ___________ Shares of Excelsior Fund
of Shareholder] ___________ Shares of Excelsior Tax-
Exempt Fund
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED.
_____________________________
(Signature(s) of Shareholder(s))
Please sign exactly as your name or names appear
hereon. When signing as attorney, executor,
administrator, trustee or guardian, please give
your fill 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.
Date: ___________, 1996
(VOTING ON REVERSE SIDE)
Please vote by filling in the appropriate box below, as shown, using blue or
black ink or dark pencil. Do not use red ink.
FOR SHAREHOLDERS OF ALL FUNDS OF EACH COMPANY:
1. Election of Directors for each Company.
FOR all nominees WITHOLD AUTHORITY
listed at left to vote for all nominees
(except as indicated listed
to the contrary at left at left
Nominees: [ ] [ ]
- --------
Donald L. Campbell
Rodman L. Drake
Joseph H. Dugan
Wolfe J. Frankl
W. Wallace McDowell, Jr.
Jonathan Piel
Robert A. Robinson
Alfred C. Tannachion
Frederick S. Wonham
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
________________________________________________
2. Proposal to ratify the selection of Ernst & Young LLP as independent
auditors for the fiscal year ending March 31, 1997.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
FOR SHAREHOLDERS OF MONEY, GOVERNMENT MONEY AND TREASURY MONEY FUNDS OF
EXCELSIOR FUNDS, INC. AND SHAREHOLDERS OF TAX-EXEMPT MONEY FUND OF EXCELSIOR
TAX-EXEMPT FUNDS, INC.:
3. Proposal to approve a modification to the current fundamental issuer
diversification policy.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
The proxies are authorized to vote in their discretion on any other business
which may properly come before the Meeting and any adjournment thereof.
(PLEASE DATE AND SIGN ON REVERSE SIDE)