<PAGE>
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:
x Preliminary Proxy Statement Confidential, for Use of the
Commission Only (as permitted by Rule
14a-6(e)(2)
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Excelsior Funds, Inc.
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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):
No fee required.
x
Fee computed on table below per Exchange Act Rules 14c-5(g) 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:
- --------------------------------------------------------------------------------
(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:
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(5) Total fee paid:
- --------------------------------------------------------------------------------
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:
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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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[Preliminary Copy]
EXCELSIOR FUNDS, INC.
---------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
---------------------------------
____________, 1997
To the Shareholders of the
Long-Term Supply of Energy Fund:
A Special Meeting of Shareholders of the Long-Term Supply of Energy Fund
(the "Fund") of Excelsior Funds, Inc. ("Excelsior") will be held on August 18,
1997 at 10:00 a.m. (local time) in the offices of United States Trust Company of
New York at 114 West 47th Street, New York, New York for the following purposes:
(1) to approve a change to the Fund's sub-classification from
diversified to non-diversified, and to eliminate a related
investment limitation;
(2) to approve a change to the Fund's fundamental investment policies
to permit the Fund to invest in precious metal bullion and coins
and futures contracts on commodities;
(3) to adopt a fundamental investment policy that will allow the Fund
to invest more than 25% of the value of its total assets in
companies in the energy and other natural resources industries;
and
(4) to transact such other business as may properly come before the
Special Meeting or any adjournment thereof.
The proposals referred to above are discussed in the Proxy Statement
attached to this Notice. Each shareholder is invited to attend the Special
Meeting of Shareholders in person. Shareholders of record at the close of
business on June 2, 1997 have the right to vote at the Special Meeting. IF YOU
CANNOT BE PRESENT AT THE SPECIAL MEETING, WE URGE YOU TO FILL IN, SIGN AND
PROMPTLY RETURN THE ENCLOSED PROXY IN ORDER THAT THE SPECIAL MEETING CAN BE HELD
AND A MAXIMUM NUMBER OF SHARES MAY BE VOTED.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF
PROPOSALS 1, 2, AND 3.
W. Bruce McConnel, III
Secretary
<PAGE>
EXCELSIOR 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 Board of Directors of Excelsior Funds, Inc. ("Excelsior" or
the "Company") for use at Excelsior's Special Meeting of Shareholders of the
Long-Term Supply of Energy Fund (the "Fund") to be held in the offices of United
States Trust Company of New York ("U.S. Trust") at 114 West 47th Street, New
York, New York, on August 18, 1997 at 10:00 a.m. (local time). Such Special
Meeting and any adjourn ment thereof are hereinafter collectively referred to as
the "Meeting." The Fund's shares are hereinafter referred to as "Shares."
It is expected that the solicitation of proxies will be primarily by
mail. Excelsior's officers and service contractors may also solicit proxies by
telephone, telegraph, facsimile or personal interview. U.S. Trust will bear all
proxy solicitation costs. Any shareholder giving a proxy may revoke it at any
time before it is exercised by submitting to Excelsior 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 June
__, 1997.
A Proxy is enclosed with respect to your Shares. The Proxy should be
completed in full. Each full Share is entitled to one vote, and each fractional
Share to a proportionate fractional vote.
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.
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT
ANNUAL REPORT TO SHAREHOLDERS TO ANY SHAREHOLDER UPON REQUEST. THE COMPANY'S
ANNUAL REPORT TO SHAREHOLDERS MAY BE OBTAINED FROM THE COMPANY BY SENDING A
WRITTEN REQUEST TO THE COMPANY AT THE ADDRESS PROVIDED ABOVE, OR BY CALLING
TOLL-FREE AT (800)446-1012.
<PAGE>
PROPOSAL 1
APPROVAL OF CHANGE OF SUB-CLASSIFICATION
TO NON-DIVERSIFIED AND ELIMINATION OF
RELATED INVESTMENT LIMITATION
The Fund is classified as a management investment company under the
Investment Company Act of 1940 (the "1940 Act"), and is sub-classified as an
open-end company and a diversified company. At the Meeting, shareholders will
be asked to approve a change to the Fund's latter sub-classification from a
diversified company to a non-diversified company. This change is sought to
increase investment flexibility. As a diversified investment company, at least
75% of the value of the Fund's total assets must be represented by securities of
issuers which do not constitute more than 5% of the value of the total assets of
the Fund or more than 10% of the voting securities of the issuer, cash and cash
items, U.S. government securities and securities of other investment companies.
These categories do not include investments in gold and other precious metals.
A non-diversified investment company is not subject to this 75% asset
requirement, but as a regulated investment company the Fund would remain subject
to a more limited diversification requirement that is imposed by the Internal
Revenue Code of 1986. The Internal Revenue Code test applies at the end of each
fiscal quarter, and generally requires that at least 50% of the value of the
Fund's total assets be represented by the types of assets which satisfy the 75%
asset diversification requirement imposed by the 1940 Act. In addition, no more
than 25% of the value of the investment company's assets may be invested in the
securities of any one issuer.
Investment return of a non-diversified fund typically is dependent
upon the performance of a smaller number of securities than is the investment
return of a diversified fund of comparable size. Consequently, if the Fund were
to utilize its authority to assume larger positions in the obligations of a
smaller number of issuers, then changes in value of any one security would
affect the overall value of the Fund more than it would a diversified fund, and
thereby subject the Fund's net asset value per share to greater fluctuations and
risk.
Approval of this proposal will also eliminate the following
fundamental investment limitation of the Fund:
The Fund may not purchase securities of any one issuer, other than
U.S. Government obligations, if immediately after such purchase more
than 5% of the value of its total assets would be invested in the
securities of such issuer, except that up to 25% of the value of its
total assets may be
-2-
<PAGE>
invested without regard to this 5% limitation.
Approval of Proposal 1 would allow the Fund to invest in securities of
fewer issuers at any one time. Approval of Proposal 1 and Proposal 2 would
permit the Fund to invest a significant portion of its assets in precious
metals. Specifically, the Fund could comply with a proposed investment policy
recommended by the Fund's investment advisers and favored by the Board of
Directors of the Fund that would permit the Fund to invest up to 35% of its
assets in precious metals.
PROPOSAL 2
APPROVAL OF INVESTMENTS IN
PRECIOUS METAL BULLION AND COINS
AND FUTURES CONTRACTS ON COMMODITIES
At the Meeting, shareholders of the Fund will be asked to approve a
change to one of the Fund's fundamental investment limitations to permit the
Fund to invest in gold and other precious metal bullion and coins and related
contracts. This change is also being proposed to provide the Fund with a
broader range of potential investments. The investment limitation reads as
follows:
The Fund may not purchase or sell commodities or commodities
futures contracts or invest in oil, gas, or other mineral
exploration or development programs; provided, however, that i)
this shall not prohibit the Fund from purchasing publicly traded
securities of companies engaging in whole or in part in such
activities or from investing in liquidating trust receipts,
certificates of beneficial ownership or other instruments in
accordance with its investment objective and policies, and ii)
the Fund may enter into futures contracts and futures options.
This investment limitation prohibits investments in "commodities,"
which includes precious metal bullion and coins. If this proposal is approved,
the limitation will be revised as follows to permit the Fund to invest in
precious metal bullion and coins and futures contracts on commodities, and to
clarify that the Fund may invest in options on commodities and futures
contracts, and forward contracts on foreign currencies and precious metals:
The Fund may not purchase or sell commodities or invest in
oil, gas, or other mineral exploration or development programs;
provided, however, that the Fund may, in accordance with its
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investment objective and policies, (i) purchase publicly traded
securities of companies engaging in whole or in part in such
activities or invest in liquidating trust receipts, certificates
of beneficial ownership or other instruments, (ii) enter into
commodity futures contracts and other futures contracts, (iii)
enter into options on commodities and futures contracts, (iv)
invest in gold and other precious metal bullion and coins, and
(v) enter into forward contracts on foreign currencies and
precious metals.
Subject to approval of the proposal by shareholders of the Fund, the
Board of Directors of Excelsior has voted to revise the investment policies of
the Fund to permit the Fund to invest up to 35% of its total assets in precious
metals. Precious metal bullion will not be purchased in any form that is not
readily marketable. Coins will not be purchased for their numismatic value and
will not be considered for the Fund if they cannot be bought or sold in an
active market. Any bullion or coins purchased by the Fund will be stored with a
qualified custodian bank in the United States. Shareholders should be aware
that precious metals do not generate income, offering only the potential for
capital appreciation and depreciation, and may subject the Fund to higher
custody and transaction costs than those normally associated with the ownership
of securities. Investments relating to precious metals are considered
speculative.
While the Fund will be able to enter into options on commodities, the
Fund's proposed investment policies do not presently contemplate such
investments. The Fund will also be able to enter into precious metals futures
contracts and related options in addition to the futures contracts it can enter
into already. With respect to forward contracts, the Fund may enter into
contracts for the purchase or sale of precious metals or specific currencies at
a future date, at a price set at the time of the contract. The Fund presently
expects to enter into forward contracts only for hedging purposes. The Fund
will also be able to enter into forward contracts for "cross hedging" purposes.
By entering into such transactions, however, the Fund may be required to forego
the benefits of advantageous changes in exchange rates or prices of precious
metals. Forward contracts are traded over-the-counter, and the Fund may also
trade other types of over-the-counter instruments based on precious metals which
are or may become available for trading.
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<PAGE>
PROPOSAL 3
ADOPTION OF A FUNDAMENTAL INVESTMENT POLICY
THAT WILL ALLOW THE FUND TO INVEST MORE THAN 25%
OF THE VALUE OF ITS TOTAL ASSETS IN COMPANIES IN THE
ENERGY AND OTHER NATURAL RESOURCES INDUSTRIES
The Fund proposes to adopt the following fundamental investment
policy:
The Fund may not purchase any securities which would cause more
than 25% of the value of its total assets at the time of purchase to
be invested in the securities of one or more issuers conducting their
principal business activities in the same industry, provided, however,
that there is no limitation with respect to securities of companies in
the energy and other natural resources industries or securities issued
or guaranteed by the U.S. Government, its agencies or
instrumentalities.
Upon the recommendation of the Fund's investment advisers, the Board
of Directors recommends that the shareholders adopt this fundamental investment
policy in order that the Fund may pursue its investment objective to provide
long-term capital appreciation by investing primarily in domestic and foreign
companies that are in the energy and other natural resources industries ("energy
and other natural resource companies"). These companies include those that the
investment advisers consider to be principally engaged in the discovery,
development, production or distribution of energy or other natural resources,
the development of technologies for the production or efficient use of energy
and other natural resources, or the furnishing of related supplies or services.
A company is "principally engaged" in the energy and other natural resources
industries if at the time of investment the investment advisers determine that
at least 50% of the company's assets, revenues or profits are derived from these
industries. In addition to energy resources such as coal, oil, natural gases
and other hydrocarbons, natural resources also include precious and other
metals, chemicals, timberland, undeveloped real property and agricultural
commodities.
If the shareholders approve this proposal, under normal market
conditions, at least 65% of the Fund's assets will be invested in the securities
of energy and other natural resource companies. It is expected that investments
in companies in the energy industry will constitute a substantial portion of
these investments. Included in such companies are oil and gas produc tion and
pipeline companies; drilling and drilling service companies; and other energy
resource companies such as coal producers and newer resources such as geothermal
and solar energy
-5-
<PAGE>
producers. Normally, at least 25% of the Fund's assets will be invested in
crude oil, petroleum and natural gas companies.
Subject to approval by the stockholders of proposal 3, the Board of
Directors has voted to change the name of the Fund. The new name of the Fund
would be the "Energy and Natural Resources Fund."
* * *
The Fund is not proposing to change its investment objective of
seeking long-term capital appreciation. There is no assurance that the Fund
will achieve its investment objective. The investment advisers believe,
however, with the support of Excelsior's Board of Directors, that the proposals
in this Proxy Statement will provide the Fund with additional opportunities in
seeking to achieve its objective.
REQUIRED VOTE
The approval of each of Proposals 1, 2 and 3 requires the affirmative vote
of the holders of a "majority of the outstanding Shares" of the Fund (as defined
in the 1940 Act), which means the lesser of (a) the holders of 67% or more of
the Shares of the Fund present at the Meeting if the holders of more than 50% of
the outstanding Shares of the Fund are present in person or by proxy or (b) more
than 50% of the outstanding shares of the Fund.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
OF THE FUND VOTE "FOR" PROPOSALS 1, 2 AND 3.
VOTING INFORMATION
RECORD DATE. Only shareholders of record at the close of business on June
2, 1997 will be entitled to vote at the Meeting. On that date there were
________________ outstanding Shares of the Fund.
QUORUM. In the event that a quorum is not present at the Meeting, or in
the event that a quorum is present at the Meeting 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
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. If a quorum is not present, the persons named as proxies
will vote those proxies FOR adjournment. If a quorum is present, the persons
named as proxies will vote those proxies which they are entitled to vote FOR the
particular Proposal in favor of such adjournments, and will vote those
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<PAGE>
proxies required to be voted AGAINST such Proposal against any adjournment. A
quorum is constituted with respect to the Fund by the presence in person or by
proxy of the holders of more than 50% of the outstanding shares of the Fund
entitled to vote at the Meeting. Shares represented by broker non-votes are
treated as being present for purposes of determining a quorum. A vote cast does
not include an abstention or the failure to vote for or against a proposal.
Therefore, for purposes of determining the affirmative vote of a "majority of
the outstanding shares," an abstention or the failure to vote, including a
broker non-vote, will be the equivalent of voting against the particular
Proposal.
ANNUAL MEETINGS. Excelsior does not presently intend to hold annual
meetings of shareholders except as required by the 1940 Act or other applicable
law. Excelsior will call a meeting of shareholders for the purpose of voting
upon the question of removal of a member of the Board of Directors upon written
request of shareholders owning at least 25% of the outstanding shares of the
Excelsior entitled to vote.
OTHER SHAREHOLDER INFORMATION. On June 2, 1997, U.S. Trust and its
affiliates held of record ___% of the outstanding Shares of the Fund 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 the
Fund's outstanding Shares on behalf of their customers.
At June 2, 1997, the name, address and share ownership of each person who
owned of record 5% or more of the outstanding shares of the Fund are listed in
the following table.
Amount of Percentage of
Name and Address Shares Owned Fund Shares Owned
------------------------------- ------------ -----------------
_____ _____%
_____ _____%
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. Under this definition, U.S. Trust and
its affiliates may be deemed to be controlling persons of Excelsior.
As of the record date for the Meeting, the Directors and officers of the
Company as a group owned beneficially less than 1% of the outstanding shares of
the Fund.
-7-
<PAGE>
INFORMATION ABOUT ADVISERS,
ADMINISTRATORS AND DISTRIBUTOR
U.S. Trust and U.S. Trust Company of Connecticut ("U.S. Trust Connecticut")
serve as Excelsior's investment advisers. U.S. Trust's principal offices are at
114 West 47th Street, New York, New York 10036. U.S. Trust Company of
Connecticut's principal offices are located at 225 High Ridge Road, East Tower,
Stamford, Connecticut 06905.
U.S. Trust Connecticut, Chase Global Funds Services Company ("CGFSC") and
Federated Administrative Services ("Federated") serve as Excelsior'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 Excelsior'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 with respect to the Long-Term Supply of Energy Fund. In
addition, at the Meeting, the shareholders of Excelsior's Productivity Enhancers
Fund, Environmentally-Related Products and Services Fund, Aging of America Fund,
Communication and Entertainment Fund and Global Competitors Fund will vote on
reorganization matters which are discussed in the separate proxy statement
relating to such funds. 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: __________, 1997
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.
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<PAGE>
EXCELSIOR FUNDS, INC.
This proxy is solicited by the Board of Directors of Excelsior Funds,
Inc. ("Excelsior") for use at a special meeting of shareholders to be held at
the offices of United States Trust Company of New York, 114 West 47th Street,
New York, New York 10036, on August 18, 1997 at 10:00 a.m. (Eastern Time).
The undersigned hereby appoints Frank Bruno, Michael P. Malloy, Daniel
A. Moonay and Rose Ann Munoz, 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 of common stock in the
below referenced fund held of record by the undersigned on June 2, 1997, the
record date for the meeting, upon the following matters and upon any other
matter that may come before the meeting, in their discretion.
Every properly signed proxy will be voted in the manner specified
hereon (except that if you vote on a proposal regarding a fund or share class of
which you are not a shareholder, such vote will not be counted) and, in the
absence of specification, will be treated as granting authority to vote "FOR"
the Proposals.
To vote mark an X in blue or black ink on the proxy card below. Keep this
portion for your records.
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(Detach here and return this portion only)
Proposals to approve the plan of reorganization and the transactions
contemplated thereby, including the transfer of all of the assets and
liabilities of the Fund specified below ("Transferor Fund") to Excelsior's
Equity Fund ("Surviving Fund") in exchange for retail shares of the Surviving
Fund, and a liquidating distribution of such shares to holders of retail shares
of the Transferor Fund:
1. Vote on Proposal for AGING OF AMERICA FUND (RETAIL SHARES) ONLY
------------------------------------------
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Vote on Proposal for PRODUCTIVITY ENHANCERS FUND (RETAIL SHARES) ONLY
------------------------------------------------
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Vote on Proposal for COMMUNICATION AND ENTERTAINMENT FUND (RETAIL SHARES)
----------------------------------------------------
ONLY
----
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Vote on Proposal for GLOBAL COMPETITORS FUND (RETAIL SHARES) ONLY
--------------------------------------------
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. Vote on Proposal for ENVIRONMENTALLY-RELATED PRODUCTS AND SERVICES
---------------------------------------------
FUND (RETAIL SHARES) ONLY
-------------------------
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
6. Vote on Proposal for AGING OF AMERICA FUND (TRUST SHARES) ONLY
-----------------------------------------
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
7. Vote on Proposal for COMMUNICATION AND ENTERTAINMENT FUND (TRUST SHARES)
----------------------------------------------------
ONLY
----
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
8. Vote on Proposal for GLOBAL COMPETITORS FUND (TRUST SHARES) ONLY
-------------------------------------------
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
LONG-TERM SUPPLY OF ENERGY FUND (ONLY)
--------------------------------------
9(a). Vote on Proposal
FOR AGAINST ABSTAIN
[ ] [ ] [ ] Proposal to approve a change to the Fund's
sub-classification from diversified to
non-diversified and to eliminate a related
investment limitation.
(b). Vote on Proposal
FOR AGAINST ABSTAIN
[ ] [ ] [ ] Proposal to approve a change to the Fund's
fundamental investment policies to permit
the Fund to invest in precious metal
bullion and coins and futures contracts on
commodities.
(c). Vote on Proposal
FOR AGAINST ABSTAIN
[ ] [ ] [ ] Proposal to adopt a fundamental investment
policy that will allow the Fund to invest
more than 25% of the value of its total
assets in companies in the energy and other
natural resources industries.
10. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
Please sign, date and return the proxy card promptly using the enclosed
envelope.
Please sign exactly as name appears hereon. 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.
________________________________________
Signature Date
