EXCELSIOR INSTITUTIONAL TRUST, PRES14A, 1995-09-29

EXCELSIOR INSTITUTIONAL TRUST
PRES14A, 1995-09-29

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PROXY BALLOT
PROXY PROXY
EXCELSIOR INSTITUTIONAL EQUITY FUND
a series of
PROXY EXCELSIOR INSTITUTIONAL TRUST PROXY
- --------------------------------------------------------------------------------
The undersigned, revoking any prior proxy or proxies, hereby appoints
_____________, _____________, and _____________, or any of them individually,
proxies, with full powers of substitution, to vote for the undersigned at the
Special Meeting of Shareholders of Excelsior Institutional Equity Fund (the
"Fund"), a series of Excelsior Institutional Trust (the "Trust"), to be held at
the offices of U. S. Trust located at 114 West 47th Street, New York, New York,
on Wednesday, November 15, 1995, at 10:00 a.m., Eastern Time, notice of which
meeting and the Proxy Statement accompanying the same have been received by the
undersigned, or at any adjournment thereof, upon the following matters as
described in the Notice of Special Meeting and accompanying Proxy Statement:

1. TO APPROVE OR DISAPPROVE OF THE WITHDRAWAL BY THE FUND OF ITS
INVESTMENT IN THE EQUITY PORTFOLIO OF THE ST. JAMES PORTFOLIOS.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

2(a). TO APPROVE OR DISAPPROVE OF A NEW INVESTMENT ADVISORY AGREEMENT
BETWEEN THE TRUST, ON BEHALF OF THE FUND, AND
U.S. TRUST AS INVESTMENT ADVISER.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

4. ELECTION OF RODMAN L. DRAKE, W. WALLACE MCDOWELL, JONATHAN PIEL, ALFRED
C. TANNACHION, DONALD L. CAMPBELL, JOSEPH H. DUGAN, WOLFE J. FRANKL
AND ROBERT A. ROBINSON TRUSTEES OF THE TRUST.

<F138> FOR ALL <F138> AGAINST ALL <F138> FOR ALL EXCEPT:

-----------------------
(List any exceptions)

5. TO APPROVE OR DISAPPROVE OF THE SELECTION OF ERNST & YOUNG LLP AS THE
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF THE FUND.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

6. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES

SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
FOR ITEMS 1, 2(a), 4, 5 AND 6 UNLESS AUTHORITY TO DO SO IS SPECIFICALLY WITHHELD
IN THE MANNER PROVIDED.

Dated_____________________, 1995
(Please date this proxy)

--------------------------------

--------------------------------
Please sign exactly as your name
or names appear at left. Corporate
proxies should be signed by an
authorized officer.

PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY
BALLOT PROMPTLY, USING THE ENCLOSED ENVELOPE.

<PAGE>

PROXY BALLOT
PROXY PROXY
EXCELSIOR INSTITUTIONAL INCOME FUND
a series of
PROXY EXCELSIOR INSTITUTIONAL TRUST PROXY
- --------------------------------------------------------------------------------
The undersigned, revoking any prior proxy or proxies, hereby appoints
_____________, _____________, and _____________, or any of them individually,
proxies, with full powers of substitution, to vote for the undersigned at the
Special Meeting of Shareholders of Excelsior Institutional Income Fund (the
"Fund"), a series of Excelsior Institutional Trust (the "Trust"), to be held at
the offices of U. S. Trust located at 114 West 47th Street, New York, New York,
on Wednesday, November 15, 1995, at 10:00 a.m., Eastern Time, notice of which
meeting and the Proxy Statement accompanying the same have been received by the
undersigned, or at any adjournment thereof, upon the following matters as
described in the Notice of Special Meeting and accompanying Proxy Statement:

1. TO APPROVE OR DISAPPROVE OF THE WITHDRAWAL BY THE FUND OF ITS
INVESTMENT IN THE INCOME PORTFOLIO OF THE ST. JAMES PORTFOLIOS.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

2(a). TO APPROVE OR DISAPPROVE OF A NEW INVESTMENT ADVISORY AGREEMENT
BETWEEN THE TRUST, ON BEHALF OF THE FUND, AND U.S. TRUST AS INVESTMENT
ADVISER.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

4. ELECTION OF RODMAN L. DRAKE, W. WALLACE MCDOWELL, JONATHAN PIEL, ALFRED
C. TANNACHION, DONALD L. CAMPBELL, JOSEPH H. DUGAN, WOLFE J. FRANKL AND
ROBERT A. ROBINSON TRUSTEES OF THE TRUST.

<F138> FOR ALL <F138> AGAINST ALL <F138> FOR ALL EXCEPT:

-----------------------
(List any exceptions)

5. TO APPROVE OR DISAPPROVE OF THE SELECTION OF ERNST & YOUNG LLP AS THE
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF THE FUND.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

6. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES

<PAGE>

SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
FOR ITEMS 1, 2(a), 4, 5 AND 6 UNLESS AUTHORITY TO DO SO IS SPECIFICALLY WITHHELD
IN THE MANNER PROVIDED.

Dated_____________________, 1995
(Please date this proxy)

--------------------------------

--------------------------------
Please sign exactly as your name
or names appear at left.
Corporate proxies should be
signed by an authorized officer.

PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY
BALLOT PROMPTLY, USING THE ENCLOSED ENVELOPE.

<PAGE>

PROXY BALLOT
PROXY PROXY
EXCELSIOR INSTITUTIONAL TOTAL RETURN BOND FUND
a series of
PROXY EXCELSIOR INSTITUTIONAL TRUST PROXY
- --------------------------------------------------------------------------------
The undersigned, revoking any prior proxy or proxies, hereby appoints
_____________, _____________, and _____________, or any of them individually,
proxies, with full powers of substitution, to vote for the undersigned at the
Special Meeting of Shareholders of Excelsior Institutional Total Return Bond
Fund (the "Fund"), a series of Excelsior Institutional Trust (the "Trust"), to
be held at the offices of U. S. Trust located at 114 West 47th Street, New York,
New York, on Wednesday, November 15, 1995, at 10:00 a.m., Eastern Time, notice
of which meeting and the Proxy Statement accompanying the same have been
received by the undersigned, or at any adjournment thereof, upon the following
matters as described in the Notice of Special Meeting and accompanying Proxy
Statement:

1. TO APPROVE OR DISAPPROVE OF THE WITHDRAWAL BY THE FUND OF ITS
INVESTMENT IN THE TOTAL RETURN BOND PORTFOLIO OF THE ST. JAMES
PORTFOLIOS.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

2(a). TO APPROVE OR DISAPPROVE OF A NEW INVESTMENT ADVISORY AGREEMENT
BETWEEN THE TRUST, ON BEHALF OF THE FUND, AND U.S. TRUST AS INVESTMENT
ADVISER.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

4. ELECTION OF RODMAN L. DRAKE, W. WALLACE MCDOWELL, JONATHAN PIEL, ALFRED
C. TANNACHION, DONALD L. CAMPBELL, JOSEPH H. DUGAN, WOLFE J. FRANKL AND
ROBERT A. ROBINSON TRUSTEES OF THE TRUST.

<F138> FOR ALL <F138> AGAINST ALL <F138> FOR ALL EXCEPT:

--------------------
(List any exceptions)

5. TO APPROVE OR DISAPPROVE OF THE SELECTION OF ERNST & YOUNG LLP AS THE
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF THE FUND.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

6. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES

SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
FOR ITEMS 1, 2(a), 4, 5 AND 6 UNLESS AUTHORITY TO DO SO IS SPECIFICALLY WITHHELD
IN THE MANNER PROVIDED.

Dated_____________________, 1995
(Please date this proxy)

--------------------------------

--------------------------------
Please sign exactly as your name or
names appear at left. Corporate
proxies should be signed by an
authorized officer.

PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY
BALLOT PROMPTLY, USING THE ENCLOSED ENVELOPE.

<PAGE>

PROXY BALLOT
PROXY PROXY
EXCELSIOR INSTITUTIONAL EQUITY INDEX FUND
a series of
PROXY EXCELSIOR INSTITUTIONAL TRUST PROXY
- --------------------------------------------------------------------------------
The undersigned, revoking any prior proxy or proxies, hereby appoints
_____________, _____________, and _____________, or any of them individually,
proxies, with full powers of substitution, to vote for the undersigned at the
Special Meeting of Shareholders of Excelsior Institutional Equity Index Fund
(the "Fund"), a series of Excelsior Institutional Trust (the "Trust"), to be
held at the offices of U. S. Trust located at 114 West 47th Street, New York,
New York, on Wednesday, November 15, 1995, at 10:00 a.m., Eastern Time, notice
of which meeting and the Proxy Statement accompanying the same have been
received by the undersigned, or at any adjournment thereof, upon the following
matters as described in the Notice of Special Meeting and accompanying Proxy
Statement:

4. ELECTION OF RODMAN L. DRAKE, W. WALLACE MCDOWELL, JONATHAN PIEL, ALFRED
C. TANNACHION, DONALD L. CAMPBELL, JOSEPH H. DUGAN, WOLFE J. FRANKL
AND ROBERT A. ROBINSON TRUSTEES OF THE TRUST.

<F138> FOR ALL <F138> AGAINST ALL <F138> FOR ALL EXCEPT:

--------------------
(List any exceptions)

5. TO APPROVE OR DISAPPROVE OF THE SELECTION OF ERNST & YOUNG LLP AS THE
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF THE FUND.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

6. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES

<PAGE>

SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
FOR ITEMS 4, 5 AND 6 UNLESS AUTHORITY TO DO SO IS SPECIFICALLY WITHHELD IN THE
MANNER PROVIDED.

Dated_____________________, 1995
(Please date this proxy)

--------------------------------

--------------------------------
Please sign exactly as your name or
names appear at left. Corporate
proxies should be signed by an
authorized officer.

PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY
BALLOT PROMPTLY, USING THE ENCLOSED ENVELOPE.

<PAGE>

PROXY BALLOT
PROXY PROXY
EXCELSIOR INSTITUTIONAL BOND INDEX FUND
a series of
PROXY EXCELSIOR INSTITUTIONAL TRUST PROXY
- --------------------------------------------------------------------------------
The undersigned, revoking any prior proxy or proxies, hereby appoints
_____________, _____________, and _____________, or any of them individually,
proxies, with full powers of substitution, to vote for the undersigned at the
Special Meeting of Shareholders of Excelsior Institutional Bond Index Fund (the
"Fund"), a series of Excelsior Institutional Trust (the "Trust"), to be held at
the offices of U. S. Trust located at 114 West 47th Street, New York, New York,
on Wednesday, November 15, 1995, at 10:00 a.m., Eastern Time, notice of which
meeting and the Proxy Statement accompanying the same have been received by the
undersigned, or at any adjournment thereof, upon the following matters as
described in the Notice of Special Meeting and accompanying Proxy Statement:

1. TO APPROVE OR DISAPPROVE OF THE WITHDRAWAL BY THE FUND OF ITS
INVESTMENT IN THE BOND MARKET PORTFOLIO OF THE ST. JAMES PORTFOLIOS.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

2(b). TO APPROVE OR DISAPPROVE OF A NEW INVESTMENT ADVISORY AGREEMENT
BETWEEN THE TRUST, ON BEHALF OF THE FUND, AND U.S. TRUST PACIFIC AS
INVESTMENT ADVISER.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

2(f). TO APPROVE OR DISAPPROVE OF A NEW INVESTMENT SUBADVISORY AGREEMENT
BETWEEN U.S. TRUST PACIFIC AND U.S. TRUST AS INVESTMENT SUBADVISER.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

3. TO APPROVE OR DISAPPROVE OF THE INVESTMENT BY THE FUND OF ITS
INVESTABLE ASSETS IN THE BOND INDEX PORTFOLIO OF FEDERATED
INVESTMENT PORTFOLIOS.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

3(a). TO AUTHORIZE THE TRUST TO VOTE TO APPROVE OR DISAPPROVE OF A NEW
INVESTMENT ADVISORY AGREEMENT BETWEEN FEDERATED TRUST AND FEDERATED
MANAGEMENT AS INVESTMENT ADVISER WITH RESPECT TO THE BOND INDEX PORTFOLIO.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

<PAGE>

3(b). TO AUTHORIZE THE TRUST TO VOTE TO APPROVE OR DISAPPROVE OF
AN INVESTMENT SUBADVISORY AGREEMENT BETWEEN FEDERATED
MANAGEMENT AND U.S. TRUST AS INVESTMENT SUBADVISER WITH
RESPECT TO THE BOND INDEX PORTFOLIO.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

3(c). TO AUTHORIZE THE TRUST TO VOTE TO ELECT JOHN F. DONAHUE,
THOMAS G. BIGLEY, JOHN T. CONROY, JR., WILLIAM J.
COPELAND, JAMES E. DOWD, LAWRENCE D. ELLIS, M.D., EDWARD
L. FLAHERTY, JR., PETER E. MADDEN, GREGOR F. MEYER, JOHN
E. MURRAY, JR., WESLEY W. POSVAR AND MARJORIE P. SMUTS
TRUSTEES OF FEDERATED TRUST.

<F138> FOR ALL <F138> AGAINST ALL <F138> FOR ALL EXCEPT:

--------------------
(List any exceptions)

3(d). TO AUTHORIZE THE TRUST TO VOTE TO APPROVE OR DISAPPROVE OF THE SELECTION
OF ERNST & YOUNG LLP AS THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF
FEDERATED TRUST.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

4. ELECTION OF RODMAN L. DRAKE, W. WALLACE MCDOWELL, JONATHAN
PIEL, ALFRED C. TANNACHION, DONALD L. CAMPBELL, JOSEPH H.
DUGAN, WOLFE J. FRANKL AND ROBERT A. ROBINSON TRUSTEES OF
THE TRUST.

<F138> FOR ALL <F138> AGAINST ALL <F138> FOR ALL EXCEPT:

--------------------
(List any exceptions)

5. TO APPROVE OR DISAPPROVE OF THE SELECTION OF ERNST & YOUNG
LLP AS THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF THE
FUND.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

6. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES

<PAGE>

SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
FOR ITEMS 1, 2(b), 2(f), 3, 3(a), 3(b), 3(c), 3(d), 4, 5 AND 6 UNLESS AUTHORITY
TO DO SO IS SPECIFICALLY WITHHELD IN THE MANNER PROVIDED.

Dated_____________________, 1995
(Please date this proxy)

--------------------------------

--------------------------------
Please sign exactly as your name
or names appear at left. Corporate
proxies should be signed by an
authorized officer.

PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY
BALLOT PROMPTLY, USING THE ENCLOSED ENVELOPE.

<PAGE>

PROXY BALLOT
PROXY PROXY
EXCELSIOR INSTITUTIONAL SMALL CAPITALIZATION FUND
a series of
PROXY EXCELSIOR INSTITUTIONAL TRUST PROXY
- --------------------------------------------------------------------------------

The undersigned, revoking any prior proxy or proxies, hereby appoints
_____________, _____________, and _____________, or any of them individually,
proxies, with full powers of substitution, to vote for the undersigned at the
Special Meeting of Shareholders of Excelsior Institutional Small Capitalization
Fund (the "Fund"), a series of Excelsior Institutional Trust (the "Trust"), to
be held at the offices of U. S. Trust located at 114 West 47th Street, New York,
New York, on Wednesday, November 15, 1995, at 10:00 a.m., Eastern Time, notice
of which meeting and the Proxy Statement accompanying the same have been
received by the undersigned, or at any adjournment thereof, upon the following
matters as described in the Notice of Special Meeting and accompanying Proxy
Statement:

4. ELECTION OF RODMAN L. DRAKE, W. WALLACE MCDOWELL, JONATHAN
PIEL, ALFRED C. TANNACHION, DONALD L. CAMPBELL, JOSEPH H.
DUGAN, WOLFE J. FRANKL AND ROBERT A. ROBINSON TRUSTEES OF
THE TRUST.

<F138> FOR ALL <F138> AGAINST ALL <F138> FOR ALL EXCEPT:

--------------------
(List any exceptions)

5. TO APPROVE OR DISAPPROVE OF THE SELECTION OF ERNST & YOUNG
LLP AS THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF THE
FUND.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

6. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES

<PAGE>

SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
FOR ITEMS 4, 5 AND 6 UNLESS AUTHORITY TO DO SO IS SPECIFICALLY WITHHELD IN THE
MANNER PROVIDED.

Dated_____________________, 1995
(Please date this proxy)

--------------------------------

--------------------------------
Please sign exactly as your name
or names appear at left.
Corporate proxies should be
signed by an authorized officer.

PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY
BALLOT PROMPTLY, USING THE ENCLOSED ENVELOPE.

<PAGE>

PROXY BALLOT
PROXY PROXY
EXCELSIOR INSTITUTIONAL BALANCED FUND
a series of
PROXY EXCELSIOR INSTITUTIONAL TRUST PROXY
- --------------------------------------------------------------------------------

The undersigned, revoking any prior proxy or proxies, hereby appoints
_____________, _____________, and _____________, or any of them individually,
proxies, with full powers of substitution, to vote for the undersigned at the
Special Meeting of Shareholders of Excelsior Institutional Balanced Fund (the
"Fund"), a series of Excelsior Institutional Trust (the "Trust"), to be held at
the offices of U. S. Trust located at 114 West 47th Street, New York, New York,
on Wednesday, November 15, 1995, at 10:00 a.m., Eastern Time, notice of which
meeting and the Proxy Statement accompanying the same have been received by the
undersigned, or at any adjournment thereof, upon the following matters as
described in the Notice of Special Meeting and accompanying Proxy Statement:

1. TO APPROVE OR DISAPPROVE OF THE WITHDRAWAL BY THE FUND OF
ITS INVESTMENT IN THE BALANCED PORTFOLIO OF THE ST. JAMES
PORTFOLIOS.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

2(b). TO APPROVE OR DISAPPROVE OF A NEW INVESTMENT ADVISORY
AGREEMENT BETWEEN THE TRUST, ON BEHALF OF THE FUND, AND
U.S. TRUST PACIFIC AS INVESTMENT ADVISER.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

2(c). TO APPROVE OR DISAPPROVE OF A NEW INVESTMENT SUBADVISORY
AGREEMENT BETWEEN U.S. TRUST PACIFIC AND BECKER CAPITAL
MANAGEMENT, INC. AS INVESTMENT SUBADVISER.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

4. ELECTION OF RODMAN L. DRAKE, W. WALLACE MCDOWELL, JONATHAN
PIEL, ALFRED C. TANNACHION, DONALD L. CAMPBELL, JOSEPH H.
DUGAN, WOLFE J. FRANKL AND ROBERT A. ROBINSON TRUSTEES OF
THE TRUST.

<F138> FOR ALL <F138> AGAINST ALL <F138> FOR ALL EXCEPT:

--------------------
(List any exceptions)

5. TO APPROVE OR DISAPPROVE OF THE SELECTION OF ERNST & YOUNG
LLP AS THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF THE
FUND.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

6. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES

SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
FOR ITEMS 1, 2(b), 2(c), 4, 5 AND 6 UNLESS AUTHORITY TO DO SO IS SPECIFICALLY
WITHHELD IN THE MANNER PROVIDED.

Dated_____________________, 1995
(Please date this proxy)

--------------------------------

--------------------------------
Please sign exactly as your name
or names appear at left.
Corporate proxies should be
signed by an authorized officer.

PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY
BALLOT PROMPTLY, USING THE ENCLOSED ENVELOPE.

<PAGE>

PROXY BALLOT
PROXY PROXY
EXCELSIOR INSTITUTIONAL EQUITY GROWTH FUND
a series of
PROXY EXCELSIOR INSTITUTIONAL TRUST PROXY
- --------------------------------------------------------------------------------

The undersigned, revoking any prior proxy or proxies, hereby appoints
_____________, _____________, and _____________, or any of them individually,
proxies, with full powers of substitution, to vote for the undersigned at the
Special Meeting of Shareholders of Excelsior Institutional Equity Growth Fund
(the "Fund"), a series of Excelsior Institutional Trust (the "Trust"), to be
held at the offices of U. S. Trust located at 114 West 47th Street, New York,
New York, on Wednesday, November 15, 1995, at 10:00 a.m., Eastern Time, notice
of which meeting and the Proxy Statement accompanying the same have been
received by the undersigned, or at any adjournment thereof, upon the following
matters as described in the Notice of Special Meeting and accompanying Proxy
Statement:

1. TO APPROVE OR DISAPPROVE OF THE WITHDRAWAL BY THE FUND OF
ITS INVESTMENT IN THE EQUITY GROWTH PORTFOLIO OF THE ST.
JAMES PORTFOLIOS.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

2(b). TO APPROVE OR DISAPPROVE OF A NEW INVESTMENT ADVISORY
AGREEMENT BETWEEN THE TRUST, ON BEHALF OF THE FUND, AND
U.S. TRUST PACIFIC AS INVESTMENT ADVISER.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

2(d). TO APPROVE OR DISAPPROVE OF A NEW INVESTMENT SUBADVISORY
AGREEMENT BETWEEN U.S. TRUST PACIFIC AND LUTHER KING
CAPITAL MANAGEMENT CORPORATION AS INVESTMENT SUBADVISER.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

4. ELECTION OF RODMAN L. DRAKE, W. WALLACE MCDOWELL, JONATHAN
PIEL, ALFRED C. TANNACHION, DONALD L. CAMPBELL, JOSEPH H.
DUGAN, WOLFE J. FRANKL AND ROBERT A. ROBINSON TRUSTEES OF
THE TRUST.

<F138> FOR ALL <F138> AGAINST ALL <F138> FOR ALL EXCEPT:

--------------------
(List any exceptions)

5. TO APPROVE OR DISAPPROVE OF THE SELECTION OF ERNST & YOUNG
LLP AS THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF THE
FUND.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

6. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES

SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
FOR ITEMS 1, 2(b), 2(d), 4, 5 AND 6 UNLESS AUTHORITY TO DO SO IS SPECIFICALLY
WITHHELD IN THE MANNER PROVIDED.

Dated_____________________, 1995
(Please date this proxy)

--------------------------------

--------------------------------
Please sign exactly as your name
or names appear at left.
Corporate proxies should be
signed by an authorized officer.

PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY
BALLOT PROMPTLY, USING THE ENCLOSED ENVELOPE.

<PAGE>

PROXY BALLOT
PROXY PROXY
EXCELSIOR INSTITUTIONAL VALUE EQUITY INCOME FUND
a series of
PROXY EXCELSIOR INSTITUTIONAL TRUST PROXY
- --------------------------------------------------------------------------------

The undersigned, revoking any prior proxy or proxies, hereby appoints
_____________, _____________, and _____________, or any of them individually,
proxies, with full powers of substitution, to vote for the undersigned at the
Special Meeting of Shareholders of Excelsior Institutional Value Equity Income
Fund (the "Fund"), a series of Excelsior Institutional Trust (the "Trust"), to
be held at the offices of U. S. Trust located at 114 West 47th Street, New York,
New York, on Wednesday, November 15, 1995, at 10:00 a.m., Eastern Time, notice
of which meeting and the Proxy Statement accompanying the same have been
received by the undersigned, or at any adjournment thereof, upon the following
matters as described in the Notice of Special Meeting and accompanying Proxy
Statement:

4. ELECTION OF RODMAN L. DRAKE, W. WALLACE MCDOWELL, JONATHAN
PIEL, ALFRED C. TANNACHION, DONALD L. CAMPBELL, JOSEPH H.
DUGAN, WOLFE J. FRANKL AND ROBERT A. ROBINSON TRUSTEES OF
THE TRUST.

<F138> FOR ALL <F138> AGAINST ALL <F138> FOR ALL EXCEPT:

--------------------
(List any exceptions)

5. TO APPROVE OR DISAPPROVE OF THE SELECTION OF ERNST & YOUNG
LLP AS THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF THE
FUND.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

6. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES

<PAGE>

SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
FOR ITEMS 4, 5 AND 6 UNLESS AUTHORITY TO DO SO IS SPECIFICALLY WITHHELD IN THE
MANNER PROVIDED.

Dated_____________________, 1995
(Please date this proxy)

--------------------------------

--------------------------------
Please sign exactly as your name
or names appear at left.
Corporate proxies should be
signed by an authorized officer.

PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY
BALLOT PROMPTLY, USING THE ENCLOSED ENVELOPE.

<PAGE>

PROXY BALLOT
PROXY PROXY
EXCELSIOR INSTITUTIONAL INTERNATIONAL EQUITY FUND
a series of
PROXY EXCELSIOR INSTITUTIONAL TRUST PROXY
- --------------------------------------------------------------------------------
The undersigned, revoking any prior proxy or proxies, hereby appoints
_____________, _____________, and _____________, or any of them individually,
proxies, with full powers of substitution, to vote for the undersigned at the
Special Meeting of Shareholders of Excelsior Institutional International Equity
Fund (the "Fund"), a series of Excelsior Institutional Trust (the "Trust"), to
be held at the offices of U. S. Trust located at 114 West 47th Street, New York,
New York, on Wednesday, November 15, 1995, at 10:00 a.m., Eastern Time, notice
of which meeting and the Proxy Statement accompanying the same have been
received by the undersigned, or at any adjournment thereof, upon the following
matters as described in the Notice of Special Meeting and accompanying Proxy
Statement:

1. TO APPROVE OR DISAPPROVE OF THE WITHDRAWAL BY THE FUND OF
ITS INVESTMENT IN THE INTERNATIONAL EQUITY PORTFOLIO OF
THE ST. JAMES PORTFOLIOS.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

2(b). TO APPROVE OR DISAPPROVE OF A NEW INVESTMENT ADVISORY
AGREEMENT BETWEEN THE TRUST, ON BEHALF OF THE FUND, AND
U.S. TRUST PACIFIC AS INVESTMENT ADVISER.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

2(e). TO APPROVE OR DISAPPROVE OF A NEW INVESTMENT SUBADVISORY
AGREEMENT BETWEEN U.S. TRUST PACIFIC AND HARDING LOEVNER
MANAGEMENT, L.P. AS INVESTMENT SUBADVISER.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

4. ELECTION OF RODMAN L. DRAKE, W. WALLACE MCDOWELL, JONATHAN
PIEL, ALFRED C. TANNACHION, DONALD L. CAMPBELL, JOSEPH H.
DUGAN, WOLFE J. FRANKL AND ROBERT A. ROBINSON TRUSTEES OF
THE TRUST.

<F138> FOR ALL <F138> AGAINST ALL <F138> FOR ALL EXCEPT:

--------------------
(List any exceptions)

5. TO APPROVE OR DISAPPROVE OF THE SELECTION OF ERNST & YOUNG
LLP AS THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF THE
FUND.

<F138> FOR <F138> AGAINST <F138> ABSTAIN

6. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES

SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
FOR ITEMS 1, 2(b), 2(e), 4, 5 AND 6 UNLESS AUTHORITY TO DO SO IS SPECIFICALLY
WITHHELD IN THE MANNER PROVIDED.

Dated_____________________, 1995
(Please date this proxy)

--------------------------------

--------------------------------
Please sign exactly as your name
or names appear at left.
Corporate proxies should be
signed by an authorized officer.

PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY
BALLOT PROMPTLY, USING THE ENCLOSED ENVELOPE.

EXHIBIT A

FORM OF
INVESTMENT ADVISORY AGREEMENT

AGREEMENT made as of ___________, 19__ by and between [EXCELSIOR
INSTITUTIONAL TRUST, a Delaware business trust] or [FEDERATED INVESTMENT
PORTFOLIOS, a Massachusetts business trust] (the "Trust") registered as an
open-end diversified management investment company under the Investment Company
Act of 1940, as amended (the "Investment Company Act"), and [NAME OF ADVISER],
an [ADVISER ENTITY] (the "Adviser").

In consideration of the promises and the mutual covenants herein
contained, the Trust and the Adviser agree as follows:

1. Appointment. The Trust appoints the Adviser to act as investment
adviser to the Trust with respect to the series of the Trust listed on Exhibit A
hereto (the "Series") for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to provide an
investment program for the compensation provided by this Agreement. In providing
the services and assuming the obligations set forth herein, the Adviser may, at
its own expense, employ one or more subadvisers; provided that the Adviser
understands and agrees that it shall remain fully responsible for the
performance of all the duties set forth in this Agreement and that it shall
supervise the activities of each subadviser. Any agreement between the Adviser
and a subadviser shall be subject to the renewal, termination and amendment
provisions applicable to this Agreement.

2. Duties of the Adviser. Subject to the direction and control of the Board
of Trustees of the Trust, the Adviser shall:

(a) prepare (or otherwise obtain) and evaluate on both a macroeconomic and
microeconomic level any pertinent research; statistical, financial and economic
data; and other information necessary or appropriate for the performance of its
duties under this Agreement;

(b) formulate and continuously review, supervise, and administer an
investment program for the Series;

(c) determine the securities to be purchased by the Series, and
continuously monitor such securities and the issuers thereof to determine
whether and when to sell, exchange, or take any other action concerning such
securities;

(d) determine whether and how to exercise warrants, voting rights, or other
rights with respect to the Series' securities;

(e) provide valuations with respect to the securities held by the Series
[if so requested by the Trustees of the Trust];

(f) render regular reports to the Trust's officers and the Board of
Trustees concerning the investment performance of the Trust, the Adviser's
discharge of its responsibilities under this Agreement, and any other subject as
the Trust's officers or Board of Trustees reasonably may request; and

(g) assist the Trust's officers in connection with the operation of the
Trust and perform any further acts that may be necessary to effectuate the
purposes of this Agreement.

3. Supervision and compliance. The activities of the Adviser shall be
subject at all times to the direction and control of the Board of Trustees of
the Trust and shall comply with: (a) the [Trust Instrument] or [Declaration of
Trust] and By-Laws of the Trust; (b) the Registration Statement of the Trust, as
it may be amended from time to time, including the investment objectives and
policies set forth therein; (d) the Investment Company Act and the regulations
thereunder; (e) the Internal Revenue Code of 1986 and the regulations thereunder
applicable to regulated investment companies; (f) any other applicable laws or
regulations; and (g) such other limitations as the Board of Trustees may adopt.

4. Purchase and Sale of Securities. The Adviser shall, at its own expense,
place orders for the purchase, sale or loan of securities by the Trust either
directly with the issuer or with any broker and/or dealer who deals in such
securities.

(a) In placing orders with brokers and/or dealers, the Adviser shall use
its best efforts to obtain the best net price and the most favorable execution
of its orders, after taking into account all factors it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker and/or dealer,
and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis.

Consistent with this obligation, the Adviser may, to the extent permitted by
law, purchase and sell portfolio securities to and from brokers who provide
brokerage and research services (within the meaning of Section 28(e) of the
Securities and Exchange Act of 1934) to or for the benefit of the Trust and/or
other accounts over which the Adviser exercises investment discretion. The
Adviser is authorized to pay a broker who provides such brokerage and research
services a commission for effecting a securities transaction which is in excess
of the amount of commission another broker would have charged for effecting that
transaction, if the Adviser determines in good faith that such commission was
reasonable in relation to the value of brokerage and research services provided
by such broker. This determination may be viewed in terms of either that
particular transaction or of the overall responsibilities of the Adviser with
respect to the accounts as to which it exercises investment discretion.

(b) The Adviser may execute transactions through itself and its affiliates
on a securities exchange provided that the commissions paid by the Trust are
"reasonable and fair" compared to commissions received by other brokers having
comparable execution capability and provided that the transactions are effected
pursuant to procedures established by the Board of Trustees of the Trust. An
affiliated broker may transmit, clear and settle transactions for the Trust that
are executed on a securities exchange provided that the affiliated broker
arranges for unaffiliated brokers to execute the transactions.

(c) Notwithstanding the foregoing, the Board of Trustees periodically
shall review the commissions paid by the Trust and determine whether those
commissions were reasonable in relation to the brokerage and research services
received. In addition, the Board of Trustees of the Trust, in its discretion,
may instruct the Adviser to effect all or a portion of its securities
transactions with one or more brokers and/or dealers selected by the Board of
Trustees, if it determines that the use of such brokers and/or dealers is in the
best interest of the Trust.

(d) When the Adviser deems the purchase or sale of a security to be in the
best interest of the Trust as well as other customers, the Adviser, to the
extent permitted by applicable law, may aggregate the securities to be so sold
or purchased in order to obtain the best execution or lower brokerage
commissions. The Adviser also may purchase or sell a particular security for one
or more customers in different amounts. Allocation of the securities purchased
or sold in either manner, as well as the expenses incurred in the transactions,
will be made by the Adviser in a manner that is equitable and consistent with
applicable law and regulations and with its fiduciary obligations to the Trust
and to such other customers.

5. Expenses.

(a) The Adviser shall furnish at its own expense all office space, office
facilities, equipment and personnel necessary or appropriate to the performance
of its duties under this Agreement. The Adviser also shall pay the salaries and
fees of all personnel of the Trust or the Adviser performing services related to
the Adviser's duties under this Agreement.

(b) It is understood that the Trust will pay all of its expenses and
liabilities, including compensation of its independent Trustees; taxes and
governmental fees; interest charges; fees and expenses of the Trust's
independent auditors and legal counsel; trade association membership dues; fees
and expenses of any custodian (including safekeeping of funds and securities,
maintenance of books and accounts and calculation of the net asset value of
beneficial interests of the Series), transfer agent and registrar and dividend
disbursing agent of the Trust; expenses of preparing and mailing reports to
investors and regulatory agencies; expenses relating to the issuance,
registration and qualification of shares of the Series, and the preparation,
printing and mailing of prospectuses for such purposes; insurance premiums;
brokerage and other expenses of executing portfolio transactions; expenses of
investors' and Trustees' meetings; organization expenses; and extraordinary
expenses.

6. Compensation of the Adviser. In consideration of the services to be
rendered by the Adviser under this Agreement, the Trust shall pay the Adviser a
fee accrued daily and paid monthly from the Series at an annual rate equal to
that specified in Exhibit A to this Agreement for the Series' average daily net
assets. The fee for any period in which the Adviser serves as investment adviser
pursuant to this Agreement for less than one full month shall be paid for that
portion of the month accrued. For purposes of calculating fees, the value of the
net assets of the Series shall be computed in the manner specified in its
Registration Statement on Form N-1A.

7. Services to Others. The services of the Adviser to the Trust are not to
be deemed exclusive, and the Adviser is free to render services to others and to
engage in other activities, provided, however, that those services and
activities do not adversely affect the Adviser's ability to perform its
obligations under this Agreement.

8. Books, Records, and Information. The Adviser shall provide the Trust
with all records concerning the Adviser's activities that the Trust is required
by law to maintain. Any records required to be maintained and preserved pursuant
to the provisions of Rule 31a-l and Rule 31a-2 under the Investment Company Act
which are prepared or maintained by the Adviser on behalf of the Trust are the
property of the Trust and will be surrendered promptly to the Trust on request.
The Trust also shall comply with all reasonable requests for information by the
Trust's officers or Board of Trustees, including information required for the
Trust's filings with the securities and Exchange Commission and state securities
commissions.

9. Limitations on Liability.

(a) The Adviser hereby is notified expressly of the limitation of
shareholder liability as set forth in the Declaration of Trust and agrees that
any obligation of the Trust or the Series arising in connection with this
Agreement shall be limited in all cases to the Series and its assets, and the
Adviser shall not seek satisfaction of any such obligation from any Trustee or
shareholder of the Series.

(b) The Adviser shall give the Trust the benefit of its best judgment and
efforts in rendering services under this Agreement. In the absence of willful
malfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Adviser, the Adviser shall not be liable to
the Trust or to any shareholder of the Series for any act or omission in the
course of, or connected with, rendering services under this Agreement or for any
losses that may be sustained in the purchase, holding or sale of any security.

10. Effective Date; Termination; Amendments.

(a) This Agreement shall be effective as to the Series on the date the
Series commences investment operations, and, unless terminated sooner as
provided herein, shall continue until the second anniversary of the execution of
this Agreement. Thereafter, unless terminated sooner as provided herein, this
Agreement shall continue in effect as to the Series for successive annual
periods, provided that such continuance is specifically approved at least
annually by the vote of a majority of the Board of Trustees of the Trust who are
not parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such continuance, and
either: (i) the vote of a majority of the outstanding voting securities of the
Series; or (ii) the vote of a majority of the full Board of Trustees.

(b) This Agreement may be terminated at any time, without the payment of
any penalty, either by: (i) the Trust, by action of the Board of Trustees or by
vote of a majority of the outstanding voting securities of the Series, on 60
days' written notice to the Adviser; or (ii) the Adviser, on 90 days' written
notice to the Trust. This Agreement shall terminate immediately in the event of
its assignment.

(c) This Agreement may be amended only if such amendment is approved by
the vote of a majority of the outstanding voting securities of the Series or by
vote of a majority of the Board of Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such amendment.

(d) As used in this Agreement, the terms "specifically approved at least
annually," "majority of the outstanding voting securities," "interested persons"
and "assignment" shall have the same meanings as such terms have in the
Investment Company Act and the regulations thereunder.

11. Governing Law. This Agreement shall be construed in accordance with
the laws of the Commonwealth of Massachusetts without giving effect to the
choice of law provisions thereof, to the extent that such laws are consistent
with provisions of the Investment Company Act and the regulations thereunder.

12. Miscellaneous. The captions in this Agreement are included for the
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. Should any
part of this Agreement be held or made invalid by a court decision, statute,
regulation, or otherwise, the remainder of this Agreement shall not be affected
thereby. This Agreement shall be binding and shall inure to the benefit of the
parties hereto and their respective successors, to the extent permitted by law.

<PAGE>

IN WITNESS WHEREOF, the Trust and the Adviser have caused this Agreement
to be executed and delivered in their names and on their behalf by the
undersigned, duly authorized officers, all as of the day and year first above
written.

Attest: [EXCELSIOR INSTITUTIONAL
TRUST] or [FEDERATED INVESTMENT
PORTFOLIOS]

By:
Name:
Title:

Attest: [NAME OF ADVISER]

By:
Name:
Title:

<PAGE>

Exhibit A

SCHEDULE OF SERIES AND FEES UNDER INVESTMENT
ADVISORY AGREEMENT

Annual Fee (as a percentage of the
average daily net assets of the
Series Name series)

EXHIBIT B

FORM OF
INVESTMENT SUBADVISORY AGREEMENT

AGREEMENT made as of ______, 19__ by and between [NAME OF ADVISER], an
[ADVISER ENTITY] (the "Adviser"), and [NAME OF SUBADVISER], a [SUBADVISER
ENTITY] (the "Subadviser").

In consideration of the promises and the mutual covenants herein contained,
the Adviser and the Subadviser agree as follows:

1. Appointment. The Adviser has been retained by [Excelsior Institutional
Trust, a Delaware business trust] or [Federated Investment Portfolios, a
Massachusetts business trust] (the "Trust") to act as investment adviser to the
Trust with respect to the series of the Trust listed on Exhibit A hereto (the
"Series"). In accordance with and subject to the Investment Advisory Agreement
between the Trust and the Adviser, attached hereto as Exhibit B (the "Advisory
Agreement"), the Adviser appoints the Subadviser to act as subadviser with
respect to the Series for the period and on the terms set forth in this
Agreement. The Subadviser accepts such appointment and agrees to provide an
investment program for the compensation provided by this Agreement.

2. Duties of the Subadviser. Subject to the direction and control of the
Adviser and the Board of Trustees of the Trust, the Subadviser shall:

(b) formulate and continuously review, supervise, and administer an
investment program for each Series;

(c) determine the securities to be purchased by each Series, and
continuously monitor such securities and the issuers thereof to determine
whether and when to sell, exchange, or take any other action concerning such
securities;

(d) determine whether and how to exercise warrants, voting rights, or other
rights with respect to the Series' securities;

(e) provide valuations with respect to the securities held by each Series
[if so requested by the Trustees of the Trust];

(f) render regular reports to the Trust's officers and the Board of
Trustees concerning the investment performance of the Trust, the subadviser's
discharge of its responsibilities under this Agreement, and any other subject as
the Trust's officers or Board of Trustees reasonably may request; and

(g) assist the Adviser and the Trust's officers in connection with the
operation of the Trust and perform any further acts that may be necessary to
effectuate the purposes of this Agreement.

3. Supervision and Compliance. Notwithstanding any provision of this
Agreement, the Adviser shall retain all rights and ultimate responsibilities to
supervise, and, in its discretion, conduct investment advisory activities
relating to the Trust. The activities of the Subadviser shall be subject at all
times to the direction and control of the Board of Trustees of the Trust and the
Adviser and shall comply with: (a) the [Trust Instrument] or [Declaration of
Trust] and By-Laws of the Trust; (b) the Registration Statement of the Trust, as
it may be amended from time to time, including the investment objectives and
policies set forth therein; (d) the Investment Company Act and the regulations
thereunder; (e) the Internal Revenue Code of 1986 and the regulations thereunder
applicable to regulated investment companies; (f) any other applicable laws or
regulations; and (g) such other limitations as the Adviser or the Board of
Trustees of the Trust may adopt.

4. Purchase and Sale of Securities. The Subadviser shall, at its own
expense, place orders for the purchase, sale or loan of securities by the Trust
either directly with the issuer or with any broker and/or dealer who deals in
such securities.

(a) In placing orders with brokers and/or dealers, the Subadviser shall use
its best efforts to obtain the best net price and the most favorable execution
of its orders, after taking into account all factors it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker and/or dealer,
and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. Consistent with this obligation, the
Subadviser may, to the extent permitted by law, purchase and sell portfolio
securities to and from brokers who provide brokerage and research services
(within the meaning of Section 28(e) of the Securities and Exchange Act of 1934)
to or for the benefit of the Trust and/or other accounts over which the
Subadviser or the Adviser exercises investment discretion. The Subadviser is
authorized to pay a broker who provides such brokerage and research services a
commission for effecting a securities transaction which is in excess of the
amount of commission another broker would have charged for effecting that
transaction, if the Subadviser determines in good faith that such commission was
reasonable in relation to the value of brokerage and research services provided
by such broker. This determination may be viewed in terms of either that
particular transaction or of the overall responsibilities of the Subadviser with
respect to the accounts as to which it exercises investment discretion.

(b) The Subadviser may execute transactions through itself and its
affiliates on a securities exchange provided that the commissions paid by the
Trust are "reasonable and fair" compared to commissions received by other
brokers having comparable execution capability and provided that the
transactions are effected pursuant to procedures established by the Board of
Trustees of the Trust. An affiliated broker may transmit, clear and settle
transactions for the Trust that are executed on a securities exchange provided
that the affiliated broker arranges for unaffiliated brokers to execute the
transactions.

(c) Notwithstanding the foregoing, the Board of Trustees and the Adviser
periodically shall review the commissions paid by the Trust and determine
whether those commissions were reasonable in relation to the brokerage and
research services received. In addition, the Board of Trustees of the Trust, in
its discretion, may instruct the Subadviser to effect all or a portion of its
securities transactions with one or more brokers and/or dealers selected by the
Board of Trustees, if it determines that the use of such brokers and/or dealers
is in the best interest of the Trust.

(d) When the Subadviser deems the purchase or sale of a security to be in
the best interest of the Trust as well as other customers, the Subadviser, to
the extent permitted by applicable law, may aggregate the securities to be so
sold or purchased in order to obtain the best execution or lower brokerage
commissions. The Subadviser also may purchase or sell a particular security for
one or more customers in different amounts. Allocation of the securities
purchased or sold in either manner, as well as the expenses incurred in the
transactions, will be made by the Subadviser in a manner that is equitable and
consistent with applicable law and regulations and with its fiduciary
obligations to the Trust and to such other customers.

5. Expenses.

(a) The subadviser shall furnish at its own expense all office space,
office facilities, equipment and personnel necessary or appropriate to the
performance of its duties under this Agreement. The Subadviser also shall pay
the salaries of all personnel performing services related to the Subadviser's
duties under this Agreement.

(b) It is understood that the Trust will pay all of its expenses and
liabilities, including compensation of its independent Trustees; taxes and
governmental fees; interest charges; fees and expenses of the Trust's
independent auditors and legal counsel; trade association membership dues; fees
and expenses of any custodian (including safekeeping of funds and securities,
maintenance of books and accounts and calculation of the net asset value of
beneficial interests of each Series), transfer agent and registrar and dividend
disbursing agent of the Trust; expenses of preparing and mailing reports to
investors and regulatory agencies; expenses relating to the issuance,
registration and qualification of shares of each Series, and the preparation,
printing and mailing of prospectuses for such purposes; insurance premiums;
brokerage and other expenses of executing portfolio transactions; expenses of
investors' and Trustees' meetings; organization expenses; and extraordinary
expenses.

6. Compensation of the Subadviser. In consideration of the services to be
rendered by the Subadviser under this Agreement, the Adviser shall pay the
Subadviser a fee accrued daily and paid monthly at an annual rate equal to that
specified in Exhibit A to this Agreement for that Series' average daily net
assets. The fee for any period in which the Subadviser serves as investment
adviser pursuant to this Agreement for less than one full month shall be paid
for that portion of the month accrued. For purposes of calculating fees, the
value of the net assets of each Series of the Trust shall be computed in the
manner specified in its Registration Statement on Form N-1A.

7. Services to Others. The services of the Subadviser to the Adviser and
the Trust are not to be deemed exclusive, and the Subadviser is free to render
services to others and to engage in other activities, provided, however, that
those services and activities do not adversely affect the Subadviser's ability
to perform its obligations under this Agreement.

8. Books, Records, and Information. The Subadviser shall provide the
Adviser and the Trust with all records concerning the Subadviser's activities
that the Trust is required by law to maintain. Any records required to be
maintained and preserved pursuant to the provisions of Rule 31a-l and Rule 31a-2
under the Investment Company Act which are prepared or maintained by the
Subadviser on behalf of the Trust are the property of the Trust and will be
surrendered promptly to the Trust on request.

The Subadviser also shall comply with all reasonable requests for information by
the Adviser or the Trust's officers or Board of Trustees, including information
required for the Trust's filings with the Securities and Exchange Commission and
state securities commissions.

9. Limitations on Liability.

(a) The Subadviser hereby is notified expressly of the limitation of
shareholder liability as set forth in the Declaration of Trust and agrees that
any obligation of the Trust or the Series arising in connection with this
Agreement shall be limited in all cases to the Series and their assets, and the
Subadviser shall not seek satisfaction of any such obligation from any Trustee
or shareholder of the Series.

(b) The Subadviser shall give the Adviser and the Trust the benefit of its
best judgment and efforts in rendering services under this Agreement. In the
absence of willful malfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Subadviser, the
Subadviser shall not be liable to the Trust, to any shareholder of the Series or
to the Adviser for any act or omission in the course of, or connected with,
rendering services under this Agreement or for any losses that may be sustained
in the purchase, holding or sale of any security. The Adviser agrees that the
Subadviser shall not be liable for, and shall be indemnified and held harmless
by the Adviser for, any losses, liabilities, or expenses that the Subadviser may
incur due to errors of judgment, mistakes, acts or omission of the Adviser.

10. Effective Date; Termination; Amendments.

(a) This Agreement shall be effective as to each Series on the date the
Series commences investment operations, and, unless terminated sooner as
provided herein, shall continue until the second anniversary of the execution of
this Agreement. Thereafter, unless terminated sooner as provided herein, this
Agreement shall continue in effect as to each Series for successive annual
periods, provided that such continuance is specifically approved at least
annually by the vote of a majority of the Board of Trustees of the Trust who are
not parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such continuance, and
either: (i) the vote of a majority of the outstanding voting securities of such
Series; or (ii) the vote of a majority of the full Board of Trustees.

(b) This Agreement may be terminated at any time and as to any one or more
Series, without the payment of any penalty, either by: (i) the Trust, by action
of the Board of Trustees or by vote of a majority of the outstanding voting
securities of such Series, on 60 days' written notice to the Subadviser; (ii)
the Adviser, on 60 days' written notice to the Subadviser; or (iii) the
Subadviser, on 90 days' written notice to the Adviser and the Trust. This
Agreement shall terminate immediately in the event of its assignment.

<PAGE>
IN WITNESS WHEREOF, the Adviser and the Subadviser have caused this
Agreement to be executed and delivered in their names and on their behalf by the
undersigned, duly authorized officers, all as of the day and year first above
written.

Attest: [NAME OF ADVISER]

By:
Name:
Title:

Attest: [NAME OF SUBADVISER]

By:
Name:
Title:

<PAGE>

Exhibit A

SCHEDULE OF SERIES AND FEES UNDER INVESTMENT
SUBADVISORY AGREEMENT

Annual
Fee (as a percentage of the average
Series Names daily net assets of a series)

EXHIBIT C

Mutual funds with similar investment objectives to any of the Funds for
which U.S. Trust provides investment advisory services:

Contractual Advisory Fee Rate
Net Assets as Expressed as a Percentage of
Name of Fund of March 31, 1995 Net Assets
($ millions)

UST Master Funds:

Equity Fund 137 .75%*

Managed Income Fund 86 .75%*#

* U.S. Trust has voluntarily agreed to waive a portion of these advisory
fees.

# Advisory Fee is currently being voluntarily limited to .65%.

<PAGE>

EXHIBIT D

Mutual funds with similar investment objectives to Excelsior
Institutional Equity Growth Fund for which Luther King provides investment
advisory services:

Contractual Advisory Fee
Net Assets as of Rate Expressed as a
Name of Fund September 14, 1995 Percentage of Net Assets
- ------------ ------------------ ---------------------------
($ millions)

LKCM Small $100 0.75%*
Cap. Equity
Portfolio

* Fee waived as necessary to keep total operating expenses under 1.00%.

<PAGE>

Exhibit E

Mutual funds with similar investment objectives to Excelsior
Institutional International Equity Fund for which Harding Loevner provides
investment advisory services:

Contractual Advisory Fee
Net Assets as of Rate Expressed as a
Name of Fund July 31, 1995 Percentage of Net Assets
($ millions)

AMT $43.4 0.75%*
International
Equity Fund

TIFF $44.7 Determined in accordance
International with the following formula:
Equity Fund Fee= 30 + (.185 x Excess
Return - 130) where Excess
Return = Harding Loevner
Return - a benchmark return.
Fee has a floor of 0.10% and
a cap of 1.50%

Stalwart $4.4 0.60%
International
Equity Fund

* Fee waived as necessary to keep total operating expenses under 1.00%.

PRELIMINARY PROXY MATERIALS

EXCELSIOR INSTITUTIONAL EQUITY FUND
EXCELSIOR INSTITUTIONAL INCOME FUND
EXCELSIOR INSTITUTIONAL TOTAL RETURN BOND FUND
EXCELSIOR INSTITUTIONAL EQUITY INDEX FUND
EXCELSIOR INSTITUTIONAL BOND INDEX FUND
EXCELSIOR INSTITUTIONAL SMALL CAPITALIZATION FUND
EXCELSIOR INSTITUTIONAL BALANCED FUND
EXCELSIOR INSTITUTIONAL EQUITY GROWTH FUND
EXCELSIOR INSTITUTIONAL VALUE EQUITY INCOME FUND
EXCELSIOR INSTITUTIONAL INTERNATIONAL EQUITY FUND
EACH A SERIES OF EXCELSIOR INSTITUTIONAL TRUST
6 ST. JAMES AVENUE
BOSTON, MASSACHUSETTS 02116
TELEPHONE: (617) 423-0800

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON NOVEMBER 15, 1995

A Special Meeting of Shareholders (the "Meeting") of Excelsior
Institutional Equity Fund, Excelsior Institutional Income Fund, Excelsior
Institutional Total Return Bond Fund, Excelsior Institutional Equity Index Fund,
Excelsior Institutional Bond Index Fund, Excelsior Institutional Small
Capitalization Fund, Excelsior Institutional Balanced Fund, Excelsior
Institutional Equity Growth Fund, Excelsior Institutional Value Equity Income
Fund and Excelsior Institutional International Equity Fund (each, a "Fund";
collectively, the "Funds"), each a separate series of Excelsior Institutional
Trust (the "Trust"), will be held at the offices of U.S. Trust located at 114
West 47th Street, New York, New York 10036, at 10:00 a.m., Eastern time, on
Wednesday, November 15, 1995 for the following purposes:

PROPOSAL 1.EXCELSIOR INSTITUTIONAL EQUITY FUND
EXCELSIOR INSTITUTIONAL INCOME FUND
EXCELSIOR INSTITUTIONAL TOTAL RETURN BOND FUND
EXCELSIOR INSTITUTIONAL BALANCED FUND
EXCELSIOR INSTITUTIONAL EQUITY GROWTH FUND
EXCELSIOR INSTITUTIONAL INTERNATIONAL EQUITY FUND
EXCELSIOR INSTITUTIONAL BOND INDEX FUND

For each of the above Funds, to approve or disapprove of the
withdrawal by such Fund of its investment in the series of the St.
James Portfolios corresponding to such Fund, in order to allow the
current operating structure of such Fund to be replaced (temporarily,
in the case of the Excelsior Institutional Bond Index Fund) by a
traditional one-tier operating structure common to most mutual funds.
(Shareholders of each of the above Funds will vote separately with
respect to the withdrawal of such investment by such Fund.)

PROPOSAL 2. EXCELSIOR INSTITUTIONAL EQUITY FUND
EXCELSIOR INSTITUTIONAL INCOME FUND
EXCELSIOR INSTITUTIONAL TOTAL RETURN BOND FUND
EXCELSIOR INSTITUTIONAL BALANCED FUND
EXCELSIOR INSTITUTIONAL EQUITY GROWTH FUND
EXCELSIOR INSTITUTIONAL INTERNATIONAL EQUITY FUND
EXCELSIOR INSTITUTIONAL BOND INDEX FUND

For each of the above Funds, to approve or disapprove of investment
advisory agreements and, with respect to certain of the Funds,
investment subadvisory agreements, as more specifically described in
parts (a), (b), (c), (d), (e) and (f) below of this Proposal 2. In
each case upon the changes in operating structure described in
Proposal 1 above the existing agreements would no longer apply to the
Funds and therefor approval of agreements applicable to the Funds
would be required. The agreements to be approved will provide the
same advisory services to the Funds as the existing agreements. The
specific proposals with regard to each Fund are as follows:

(a). EXCELSIOR INSTITUTIONAL EQUITY FUND
EXCELSIOR INSTITUTIONAL INCOME FUND
EXCELSIOR INSTITUTIONAL TOTAL RETURN BOND FUND

For each of the above Funds, to approve or disapprove of a new
investment advisory agreement between the Trust, on behalf of each
such Fund, and United States Trust Company of New York ("U.S. Trust")
as investment adviser, identical in material terms to the existing
agreement between the St. James Portfolios and U.S. Trust.
(Shareholders of each of the above Funds will vote separately with
respect to the investment advisory agreement for such Fund.)

(b). EXCELSIOR INSTITUTIONAL BALANCED FUND
EXCELSIOR INSTITUTIONAL EQUITY GROWTH FUND
EXCELSIOR INSTITUTIONAL INTERNATIONAL
EQUITY FUND
EXCELSIOR INSTITUTIONAL BOND INDEX FUND

For each of the above Funds, to approve or disapprove of a new
investment advisory agreement between the Trust, on behalf of each
such Fund, and United States Trust Company of the Pacific Northwest
("U.S. Trust Pacific") as investment adviser, identical in material
terms to the existing agreement between the St. James Portfolios and
U.S. Trust Pacific. (Shareholders of each of the above Funds will
vote separately with respect to the investment advisory agreement for
such Fund.)

(c). EXCELSIOR INSTITUTIONAL BALANCED FUND

For the above Fund, to approve or disapprove of a
new investment subadvisory agreement between U.S.
Trust Pacific and Becker Capital Management, Inc.
("Becker") as investment subadviser, identical in
material terms to the existing agreement with
Becker.

(d). EXCELSIOR INSTITUTIONAL EQUITY GROWTH FUND

For the above Fund, to approve or disapprove of a new investment
subadvisory agreement between U.S. Trust Pacific and Luther King
Capital Management Corporation ("Luther King") as investment
subadviser, identical in material terms to the existing agreement
with Luther King.

(e). EXCELSIOR INSTITUTIONAL INTERNATIONAL EQUITY FUND

For the above Fund, to approve or disapprove of a new investment
subadvisory agreement between U.S. Trust Pacific and Harding, Loevner
Management, L.P. ("Harding Loevner") as investment subadviser,
identical in material terms to the existing agreement with Harding
Loevner.

(f). EXCELSIOR INSTITUTIONAL BOND INDEX FUND

For the above Fund, to approve or disapprove of a
new investment subadvisory agreement between U.S.
Trust Pacific and U.S. Trust as investment
subadviser, identical in material terms to the
existing agreement with U.S. Trust.

PROPOSAL 3. EXCELSIOR INSTITUTIONAL BOND INDEX FUND

For the above Fund, to approve or disapprove of the investment of all
of its investable assets in the Bond Index Portfolio, a series of
Federated Investment Portfolios ("Federated Portfolios"), and in
connection therewith:

(a). For the Bond Index Fund, as an investor in the Bond Index Portfolio,
to approve or disapprove of a new investment advisory agreement
between Federated Portfolios and Federated Management with respect to
the Bond Index Portfolio.

(b). For the Bond Index Fund, as an investor in the Bond Index Portfolio,
to approve or disapprove of a new investment subadvisory agreement
between Federated Management and U.S. Trust with respect to the Bond
Index Portfolio.

(c). For the Bond Index Fund, as an investor in
Federated Portfolios, to authorize the election of
the Trustees of Federated Portfolios.

(d). For the Bond Index Fund, as an investor in Federated Portfolios, to
authorize the approval or disapproval of the selection of Ernst &
Young LLP as the independent certified public accountants of
Federated Portfolios.

PROPOSAL 4. ALL FUNDS

To elect a Board of Trustees of the Trust.

PROPOSAL 5. ALL FUNDS

To approve or disapprove of the selection of Ernst & Young LLP as the
independent certified public accountants of the Trust.

PROPOSAL 6. ALL FUNDS

To transact such other business as may properly come before the
Meeting and any adjournments thereof.

The Board of Trustees of the Trust recommends that you vote in favor of all
items.

Only shareholders of record of the Funds as of the close of business on
September 15, 1995 will be entitled to vote at the Meeting or any adjournment of
the Meeting.

Thomas M. Lenz, Secretary

October ___, 1995

YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOUR PROMPTLY VOTING, SIGNING AND
RETURNING THE ENCLOSED PROXY, WHICH WILL HELP AVOID THE ADDITIONAL EXPENSE OF A
SECOND SOLICITATION. THE ENCLOSED ADDRESSED ENVELOPE REQUIRES NO POSTAGE AND IS
PROVIDED FOR YOUR CONVENIENCE.

<PAGE>

PRELIMINARY PROXY MATERIALS

PROXY STATEMENT

GENERAL

This Proxy Statement and Notice of Special Meeting with accompanying form
of proxy are being mailed by the Board of Trustees of Excelsior Institutional
Trust (the "Trust") on behalf of Excelsior Institutional Equity Fund (the
"Equity Fund"), Excelsior Institutional Income Fund (the "Income Fund"),
Excelsior Institutional Total Return Bond Fund (the "Total Return Bond Fund"),
Excelsior Institutional Equity Index Fund (the "Equity Index Fund"), Excelsior
Institutional Bond Index Fund (the "Bond Index Fund"), Excelsior Institutional
Small Capitalization Fund (the "Small Cap Fund"), Excelsior Institutional
Balanced Fund (the "Balanced Fund"), Excelsior Institutional Equity Growth Fund
(the "Equity Growth Fund"), Excelsior Institutional Value Equity Income Fund
(the "Value Equity Income Fund") and Excelsior Institutional International
Equity Fund (the "International Equity Fund") (each, a "Fund"; collectively, the
"Funds"), each a series of the Trust, on or about October __, 1995. They are
being furnished in connection with the solicitation of proxies by the Board of
Trustees of the Trust for use at a special meeting (the "Meeting") of the
shareholders of the Funds to be held at the offices of U.S. Trust located at 114
West 47th Street, New York, New York 10036, on Wednesday, November 15, 1995 at
10:00 a.m., Eastern time for the purposes set forth in the accompanying Notice
of Special Meeting.

The table below sets forth the proposals on which shareholders of each
Fund will vote:

Fund Proposals to be Considered

Equity Fund Proposals 1, 2(a), 4, 5, 6
Income Fund Proposals 1, 2(a), 4, 5, 6
Total Return Bond Fund Proposals 1, 2(a), 4, 5, 6
Equity Index Fund Proposals 4, 5, 6
Bond Index Fund Proposals 1, 2(b), 2(f), 3, 3(a),
3(b), 3(c), 3(d), 4, 5, 6
Small Cap Fund Proposals 4, 5, 6
Balanced Fund Proposals 1, 2(b), 2(c), 4, 5, 6
Equity Growth Fund Proposals 1, 2(b), 2(d), 4, 5, 6
Value Equity Income Fund Proposals 4, 5, 6
International Equity Fund Proposals 1, 2(b), 2(e), 4, 5, 6

Each of the Funds is one of the twelve series of the Trust, which is an
open-end diversified management company organized as a Delaware business trust
established under a Trust Instrument dated April 27, 1994 (the "Trust
Instrument"). Each of the Funds was designated as a separate series of the Trust
on April 27, 1994. There are currently two inactive series of the Trust, and
additional series may be established from time to time.

Each of the Funds currently seeks to achieve its investment objective by
investing all of its investable assets in a corresponding portfolio, as follows:

Fund Name Corresponding Portfolios

Equity Fund Equity Portfolio
Income Fund Income Portfolio
Total Return Bond Fund Total Return Bond Portfolio
Equity Index Fund Equity Market Portfolio
Bond Index Fund Bond Market Portfolio
Small Cap Fund Small Cap Portfolio
Balanced Fund Balanced Portfolio
Equity Growth Fund Equity Growth Portfolio
Value Equity Income Fund Value Equity Income Portfolio
International Equity Fund International Equity Portfolio

Each of the portfolios described above (each a "Portfolio," collectively,
the "Portfolios") is a series of St. James Portfolios (the "Portfolio Series"),
an open-end management investment company. Each Portfolio has the same
investment objective and policies as its corresponding Fund.

The mailing address of the Trust is 6 St. James Avenue, Boston,
Massachusetts 02116. This Proxy Statement and proxy card are being mailed to
shareholders on or about October ___, 1995. Each Fund's annual report for the
fiscal year ending May 31, 1995 was mailed to the shareholders of such Fund on
or about July 28, 1995. A copy may be obtained free of charge by writing to the
Trust at the address stated above or by calling the Trust toll-free at (800)
909-1989.

MANNER OF VOTING PROXIES AND VOTE REQUIRED

If the accompanying form of proxy is executed properly and returned,
shares represented by it will be voted at the Meeting in accordance with the
instructions on the proxy. If no instructions are specified, shares will be
voted "for" the proposed items. If the enclosed form of proxy is executed and
returned, it may nevertheless be revoked prior to its exercise by a signed
writing delivered at the Meeting or filed with the Secretary of the Trust.

Under the Trust Instrument of the Trust, with respect to any Proposal to
be considered at the Meeting, a quorum is considered the presence in person or
by proxy of the holders of one-third of the outstanding shares of the Fund
entitled to vote at the Meeting with respect to such Proposal. For purposes of
determining the presence of a quorum for transacting business at the Meeting,
abstentions and broker "non-votes" (that is, 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 but which have not been voted. For this
reason, abstentions and broker "non-votes" will have the effect of a "no" vote
for purposes of obtaining the requisite approval of the proposals.

In the event that a quorum is not present at the Meeting with respect to a
Fund, the persons named as proxies will vote those proxies which they are
entitled to vote in favor of one or more adjournments of the Meeting with
respect to that Fund to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of a majority of those shares of
that Fund represented at the meeting in person or by proxy. In the event that a
quorum is present at the Meeting with respect to a Fund but sufficient votes to
approve one or more of the proposed items with respect to that Fund are not
received, the persons named as proxies may propose one or more adjournments of
the Meeting with respect to that Fund to permit further solicitation of proxies.
Any such adjournment with respect to a Fund will require the affirmative vote of
a majority of the shares of such Fund voted at the Meeting. When voting on a
proposed adjournment, the persons named as proxies will vote all shares that
they are entitled to vote with respect to each item for the proposed
adjournment, unless directed to disapprove the item, in which case such shares
will be voted against the proposed adjournment. A shareholder vote may be taken
on one or more of the proposals in this Proxy Statement prior to any such
adjournment if sufficient votes have been received for approval.

The cost of soliciting proxies on the accompanying form, including the
fees of a proxy soliciting agent, will be borne by United States Trust Company
of New York ("U.S. Trust"). In addition to solicitation by mail, proxies may be
solicited by the Board of Trustees of the Trust, officers, and regular employees
and agents of the Trust without compensation therefor. The Trust will reimburse
brokerage firms and others for their expenses in forwarding proxy materials to
the beneficial owners and soliciting them to execute the proxies.

The Board of Trustees of the Trust has fixed the close of business on
September 15, 1995 as the record date (the "Record Date") for determination of
shareholders of the Funds entitled to notice of and to vote at the Meeting.
Shareholders of record of the Funds on the Record Date are entitled to one vote
per share of their respective Fund(s) at the Meeting or any adjournment of the
Meeting. On the Record Date, there were (i) 2,636,205.590 outstanding shares of
the Equity Fund, held by 3 shareholders of record, (ii) 4,617,170.046
outstanding shares of the Income Fund, held by 2 shareholders of record, (iii)
4,309,651.939 outstanding shares of the Total Return Bond Fund, held by 3
shareholders of record, (iv) 1,915,592.706 outstanding shares of the Equity
Index Fund, held by 2 shareholders of record, (v) 2,183,102.711 outstanding
shares of the Bond Index Fund, held by 2 shareholders of record, (vi)
2,211,311.830 outstanding shares of the Small Cap Fund, held by 2 shareholders
of record, (vii) 10,448,913.657 outstanding shares of the Balanced Fund, held by
2 shareholders of record, (viii) 6,954,798.462 outstanding shares of the Equity
Growth Fund, held by 2 shareholders of record, (ix) 2,081,399.211 outstanding
shares of the Value Equity Income Fund, held by 2 shareholders of record, and
(x) 1,995,381.000 outstanding shares of the International Equity Fund, held by 2
shareholders of record.

INTERESTS OF CERTAIN PERSONS

As of the Record Date, to the knowledge of the Trust, the following
persons benefically owned 5% or more of the outstanding shares of the Equity
Fund:

Name and Address Amount of Beneficial Percent
of Beneficial Owner Ownership of Shares

Saint Domenic Church 207,001 8.2%
Centennial Endowment Fund
c/o U.S. Trust
114 W. 47th Street
New York, NY 10014

The Children's Aid 251,648 10.0%
Society
Bequest Account
c/o U.S. Trust

Albany Law School 139,004 5.5%
Restricted
c/o U.S. Trust

Dow Jones Foundation 131,293 5.2%
c/o U.S. Trust

As of the Record Date, to the knowledge of the Trust, the following
persons benefically owned 5% or more of the outstanding shares of the Income
Fund:

Name and Address Amount of Beneficial Percent
of Beneficial Owner Ownership of Shares

Santa Fe Opera Foundation 339,840 7.3%
c/o U.S. Trust

U/W Eugene Higgins 1,522,827 32.9%
Residuary Trust for
Columbia Harvard Princeton
and Yale Universities
c/o U.S. Trust

U/W Martin S. Paine 765,536 16.5%
for the Martin S. Paine
Foundation
c/o U.S. Trust

The Fund for American 242,566 5.2%
Studies
c/o U.S. Trust

The Liberty Fund 525,979 11.3%
c/o U.S.Trust

As of the Record Date, to the knowledge of the Trust, the following
persons benefically owned 5% or more of the outstanding shares of the Total
Return Bond Fund:

Name and Address Amount of Beneficial Percent
of Beneficial Owner Ownership of Shares

The Chamber Music Society 313,546 7.4%
of Lincoln Center Inc.
c/o U.S. Trust

U/W Eugene Higgins 1,917,451 45.4%
Residuary Trust for
Columbia Harvard Princeton
and Yale Universities
c/o U.S. Trust

The Liberty Fund 490,672 11.6%
c/o U.S. Trust

As of the Record Date, to the knowledge of the Trust, the following
persons benefically owned 5% or more of the outstanding shares of the Equity
Index Fund:

Name and Address Amount of Beneficial Percent
of Beneficial Owner Ownership of Shares

Stevedoring Services of 529,186 27.6%
America
Retirement Trust
c/o U.S. Trust Pacific
4380 S.W. Macadam Ave.
Suite 450
Portland, Oregon 97201

Washington Education Association 245,255 12.8%
Pension Plan
c/o U.S. Trust Pacific

USTPN Equity Index Fund 807,028 42.1%
c/o U.S. Trust Pacific

As of the Record Date, to the knowledge of the Trust, the following
persons benefically owned 5% or more of the outstanding shares of the Bond Index
Fund:

Name and Address Amount of Beneficial Percent
of Beneficial Owner Ownership of Shares

Columbia Helicopters Profit 120,525 5.5%
Sharing Plan - UST Account
c/o U.S. Trust Pacific

Stevedoring Services of America 248,043 11.3%
Retirement Trust
c/o U.S. Trust Pacific

Sun Studs Inc. Profit 280,821 12.8%
Sharing Plan
c/o U.S. Trust Pacific

Washington Education 270,108 12.3%
Association
Pension Plan
c/o U.S. Trust Pacific

USTPN Bond Index Fund 920,009 42.1%
c/o U.S. Trust Pacific

As of the Record Date, to the knowledge of the Trust, the following
persons benefically owned 5% or more of the outstanding shares of the Small Cap
Fund:

Name and Address Amount of Beneficial Percent
of Beneficial Owner Ownership of Shares

Stevedoring Services of 737,384 33.3%
America
Retirement Trust
c/o U.S. Trust Pacific

Sun Studs Inc. Profit 138,938 6.2%
Sharing Plan
c/o U.S. Trust Pacific

Washington Education 374,659 16.9%
Association
Pension Plan
c/o U.S. Trust Pacific

USTPN Small Cap Equity Fund 661,021 29.9%
c/o U.S. Trust Pacific

As of the Record Date, to the knowledge of the Trust, the following
persons benefically owned 5% or more of the outstanding shares of the Balanced
Fund:

Name and Address Amount of Beneficial Percent
of Beneficial Owner Ownership of Shares

Columbia Helicopters 401(k) 608,746 5.8%
Plan
c/o U.S. Trust Pacific

United Grocers Special 578,248 5.5%
401(k) Plan
c/o U.S. Trust Pacific

Washington Water Power 1,637,921 15.7%
Company Investment Plan
and Trust
c/o U.S. Trust Pacific

USTPN Balanced Fund 4,412,489 42.4%
c/o U.S. Trust Pacific

As of the Record Date, to the knowledge of the Trust, the following
persons benefically owned 5% or more of the outstanding shares of the Equity
Growth Fund:

Name and Address Amount of Beneficial Percent
of Beneficial Owner Ownership of Shares

Washington Water Power 1,245,500 17.9%
Company Investment Plan
and Trust
c/o U.S. Trust Pacific

USTPN Equity Growth Fund 2,715,031 39.1%
c/o U.S. Trust Pacific

As of the Record Date, to the knowledge of the Trust, the following
persons benefically owned 5% or more of the outstanding shares of the Value
Equity Income Fund:

Name and Address Amount of Beneficial Percent
of Beneficial Owner Ownership of Shares

Cascade General Inc. 139,926 6.7%
Retirement Plan
c/o U.S. Trust Pacific

Sun Studs Inc. 151,016 7.2%
Profit Sharing Plan
c/o U.S. Trust Pacific

Washington Education 179,019 8.6%
Association
Pension Plan
c/o U.S. Trust Pacific

USTPN Value Equity 1,211,648 58.3%
Income Fund
c/o U.S. Trust Pacific

As of the Record Date, to the knowledge of the Trust, the following
persons benefically owned 5% or more of the outstanding shares of the
International Equity Fund:

Name and Address Amount of Beneficial Percent
of Beneficial Owner Ownership of Shares

Columbia Helicopters Profit 156,279 7.8%
Sharing Plan - UST Account
c/o U.S. Trust Pacific

Columbia Helicopters 401(k) 148,887 7.4%
Plan
World Stock Fund
c/o U.S. Trust Pacific

Stevedoring Services of 564,159 28.2%
America
Retirement Trust
c/o U.S. Trust Pacific

Washington Education 148,770 7.4%
Association
Pension Plan
c/o U.S. Trust Pacific

United Grocers Pension Trust 239,938 12.0%
c/o U.S. Trust Pacific

Norris Beggs & Simpson NW 106,265 5.3%
Tax Deferred Investment Plan
c/o U.S. Trust Pacific

Prudence Miller Agency 173,581 8.6%
c/o U.S. Trust Pacific

SUBMISSION OF CERTAIN PROPOSALS

The Trust is a Delaware business trust, and as such is not required to
hold annual meetings of shareholders, although special meetings may be called
for a Fund, or for the Trust as a whole, for purposes such as electing Trustees
or removing Trustees, changing fundamental policies, or approving an advisory
contract. Shareholder proposals to be presented at any subsequent meeting of
shareholders must be received by the Trust at the Trust's office within a
reasonable time before the proxy solicitation is made.

PROPOSAL 1. EXCELSIOR INSTITUTIONAL EQUITY FUND
EXCELSIOR INSTITUTIONAL INCOME FUND
EXCELSIOR INSTITUTIONAL TOTAL RETURN BOND FUND
EXCELSIOR INSTITUTIONAL BALANCED FUND
EXCELSIOR INSTITUTIONAL EQUITY GROWTH FUND
EXCELSIOR INSTITUTIONAL INTERNATIONAL EQUITY FUND
EXCELSIOR INSTITUTIONAL BOND INDEX FUND

FOR EACH OF THE ABOVE FUNDS, TO APPROVE OR
DISAPPROVE OF THE WITHDRAWAL BY SUCH FUND OF ITS
INVESTMENT IN THE CORRESPONDING PORTFOLIO OF THE
PORTFOLIO SERIES.

GENERAL

Unlike other mutual funds which directly acquire and manage their own
portfolios of securities, the Trust currently seeks to achieve each Fund's
investment objective by investing all of that Fund's investable assets in a
corresponding portfolio or series of St. James Portfolios (the "Portfolio
Series"), an open-end management investment company (each such series is
referred to herein as a "Portfolio"; collectively the "Portfolios"). Each
Portfolio has the same investment objective and policies as its corresponding
Fund. The Funds invest in the Portfolios through Signature Financial Group,
Inc.'s two-tier structure known as the Hub and Spoke(R) financial services
method. Hub and Spoke(R) employs a two-tier master/feeder fund structure and is
a registered service mark of Signature Financial Group, Inc. This structure
allows several funds (each, a "Spoke" or "feeder fund") with different
distribution features, but with the same investment objective, restrictions and
policies, to combine their investments in a single fund (the "Hub" or "master
fund") instead of managing them separately. The Hub and Spoke(R) structure may
produce measurable benefits to shareholders of a feeder fund if other feeder
funds invest in the master fund, thereby increasing the master fund's assets and
producing economies of scale that result in reduced fund expenses indirectly
borne by shareholders of each feeder fund.

Because the Funds are currently the only feeder funds investing in the
Portfolio Series, it is not deriving the special advantages of the Hub and
Spoke(R) structure. As the Trustees have been informed that it is unlikely that
there will be additional feeder funds investing in the Portfolio Series in the
near future, and as the expected benefits of the Hub and Spoke(R) structure are
therefore not likely to materialize in the near future, the Trustees have
decided that it would be in the best interests of the shareholders of each Fund
to withdraw such Fund from its corresponding Portfolio and to thereafter operate
such Fund (temporarily, in the case of the Bond Index Fund) in a more
traditional one-tier mutual fund structure. As more fully described in Proposal
3 below, the Trustees have decided that it would be in the best interests of the
shareholders of the Bond Index Fund if the investable assets of such Fund were
then reinvested in the Bond Index Portfolio, a series of Federated Investment
Portfolios ("Federated Portfolios"). Therefore, if Proposals 1, 2 and 3 are
approved by the shareholders of the Bond Index Fund, it is contemplated that
such Fund will temporarily operate in a traditional one-tier mutual fund
structure which will be replaced almost immediately thereafter by a new two-tier
master/feeder structure.

Operating in a more traditional one-tier mutual fund structure will also
enable each of the above Funds to be more closely aligned to other mutual funds
also advised by U.S. Trust, the UST Master Funds, Inc., the UST Master
Tax-Exempt Funds, Inc. [and UST Master Variable Series, Inc.] (collectively, the
"Master Funds"). Closer alignment with the Master Funds, with 25 separate
investment series and approximately $3.2 billion in assets, is anticipated to
lead to a more focused and therefore successful marketing effort of shares of
all funds in the combined fund complex. In addition, the closer alignment has
the potential to produce some of the benefits of economies of scale which would
have occurred if there had been additional feeder funds in the St. James
Portfolios, because of the ability of the combined fund complex to negotiate
fees with service providers and other third parties on a more advantageous
basis. To further achieve this alignment, the Trustees of the Trust have
proposed for nomination as additional Trustees of the Trust, effective upon the
restructuring, the current Directors of the Master Funds, as more fully
described below in Proposal 4. Additionally, the Master Funds has agreed to
change its name to Excelsior Funds. Both the Funds and the Master Funds
currently employ the same distributor, the same independent public accountants,
[the same custodian, and the same transfer agent.] It is also anticipated that
if Proposal 1 is approved, effective upon the restructuring the Funds will
employ, as administrators, those entities which serve as administrators for the
Master Funds, and will appoint, as officers of the Trust, certain individuals
who also serve as officers of the Master Funds.

As a feeder fund in a Hub and Spoke(R) structure, each Fund indirectly
pays its share of the expenses of its corresponding Portfolio. Because in each
case a Fund is the only feeder fund investing in its corresponding Portfolio,
each Fund has borne both its own expenses and, indirectly, the entire amount of
the Portfolio's advisory, custody and other expenses. The actual expenses paid
by the Funds have been very low due to the fee waivers and expense
reimbursements by U.S. Trust, U.S. Trust Pacific, and Mutual Funds Services
Company, which had been an affiliate of U.S. Trust and U.S. Trust Pacific. As
these fee waivers and expense reimbursements are voluntary, they may be
discontinued at any time. U.S. Trust and U.S. Trust Pacific have informed the
Trustees of the Trust that they intend, as of [December 1, 1995], to modify
their voluntary fee waivers and reimbursements whether or not the restructuring
is approved by shareholders. Thus, although the restructuring will not result in
any increases in the contractual fees payable directly or indirectly by any Fund
for advisory, transfer agency, custody or distribution services, and it is
anticipated that certain savings may be achieved because of reduced
administration and other operating fees after the restructuring, expenses of the
Funds will increase due to the modification of the current voluntary fee waivers
and expense reimbursements.

Therefore, whether or not the restructuring is approved, the ordinary
operating expenses for each of the Funds, currently set at 0.12% of net asset
value as a result of voluntary fee waivers and expense reimbursements, will
increase. The table below sets forth, in column (1), the annual ordinary
operating expenses of each Fund, expressed as a percentage of average net assets
for the fiscal year ending May 31, 1995, or pro rata portion of such year,
without giving effect to voluntary fee waivers and expense reimbursements in
effect during the period, in column (2) the annual ordinary operating expenses
of each Fund, expressed as a percentage of average net assets for the fiscal
year ending May 31, 1995, or pro rata portion of such year, after giving effect
to voluntary fee waivers and expense reimbursements in effect during the period,
and in column (3), the estimated annual ordinary operating expenses of each
Fund, expressed as a percentage of estimated average net assets for the annual
period beginning [December 1, 1995], after giving effect to the modification of
such voluntary fee waivers and expense reimbursements.

1 2 3
ACTUAL EXPENSES FOR ESTIMATED
EXPENSES FOR PERIOD EXPENSES
FUND PERIOD ENDING ENDING AFTER
MAY 31, 1995 MAY 31, 1995 MODIFICATION
PRIOR TO WITH OF
WAIVERS FEE WAIVERS FEE WAIVERS

Equity Fund 1.23% 0.12% 0.70%
Income Fund 1.23% 0.12% 0.50%
Total Return Bond Fund 1.23% 0.12% 0.50%
Bond Index Fund 0.83% 0.12% 0.31%*
Balanced Fund 1.23% 0.12% 0.70%
Equity Growth Fund 1.23% 0.12% 0.70%
International 1.75% 0.12% 0.90%
Equity Fund

*For further information about the estimated expenses of the Bond Index Fund
following the proposed restructuring, see Proposal 3, below.

The expense ratios set forth in Column (3) above will be supported by
voluntary fee waivers and expense reimbursements that may be discontinued by
U.S. Trust and its affiliates at any time.

As part of the overall restructuring of the Funds, three of the series of
the Trust, Excelsior Institutional Equity Index Fund, Excelsior Institutional
Small Capitalization Fund, and Excelsior Institutional Value Equity Fund will be
terminated.

At meetings of the Trust's Board of Trustees on August 29, 1995, September
13, 1995 and [October 6, 1995] the Trustees considered alternatives available to
the Funds and determined that the proposed withdrawal from the Portfolio and
modification of the structure of each Fund to a more traditional operating
structure (temporarily, in the case of the Bond Index Fund) was in the best
interests of the shareholders of each Fund. The Trustees' decision was based
upon several factors including: (i) the offer of each investment adviser and
each subadviser to the Portfolio to manage the assets of the Funds pursuant to
new investment advisory agreements on substantially identical terms as the
current agreements pursuant to which the Portfolios receive investment advisory
services (see Proposal 2 below); (ii) the expected benefits resulting from the
simplified structure; and (iii) the expected benefits resulting from a closer
alignment with the Master Funds.

After consideration of the relevant factors, the Trustees, including the
Trustees who are not "interested persons" of the Trust, as that term is defined
(the "Independent Trustees") in the Investment Company Act of 1940, as amended
(the "1940 Act"), voted to approve, and voted to recommend that the shareholders
of each Fund approve the withdrawal of the assets from each Portfolio. The
withdrawal with respect to each Fund is subject to approval by that Fund of the
new advisory and, in certain cases, subadvisory agreement, with respect to such
Fund by the requisite vote of the shareholders of such Fund. If such new
advisory and subadvisory agreements are not approved by the shareholders of a
Fund, that Fund will not withdraw from the corresponding Portfolio, even if the
shareholders of the Fund approve the withdrawal.

The conversion to a traditional, one-tier investment company structure
would be accomplished by having the applicable Portfolio distribute to the
corresponding Fund such Fund's pro rata portion of the Portfolio's securities
and other assets, net of any liabilities in a redemption in-kind of all of the
Fund's interest in the Portfolio. The Fund may elect either to retain or sell
all or any portion of these securities.

The restructuring is subject to the receipt of an opinion of Bingham, Dana
& Gould, counsel to the Trust, substantially to the effect that the withdrawal
from the Portfolios will not cause either a Fund or its shareholders to
recognize any gain or loss under the Internal Revenue Code of 1986, as amended
(the "Code"), that the Fund's basis in each security distributed to it in
redemption will be the same as the corresponding Portfolio's basis for that
security, and that the Fund's holding period for each security will include the
Portfolio's holding period for that security.

Approval by the shareholders of a Fund of Proposal 1 will be deemed an
authorization to the Trustees and officers of the Trust to take any steps
necessary or appropriate to withdraw such Fund from its corresponding Portfolio,
including authorization to vote, as an investor in such Portfolio, on such
matters as are consistent with this Proposal 1.

TRUSTEES' RECOMMENDATION

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF
EACH FUND APPROVE THE PROPOSAL TO WITHDRAW THE FUND'S ASSETS
FROM THE PORTFOLIO.

If the shareholders of a Fund do not approve this Proposal and Proposal 2
(and, in the case of the Bond Index Fund, Proposal 3), such Fund will continue
to operate in its existing structure and the Trustees will consider what future
action to take, including resubmission of the Proposal to shareholders at a
future date.

VOTE REQUIRED

The Trust Instrument of the Trust would permit the withdrawal of a Fund's
assets from a Portfolio without a shareholder vote. However, the Trustees have
decided to seek shareholder approval of the withdrawal. Approval of Proposal 1
with respect to a Fund requires the affirmative vote of a majority of the
outstanding shares of the Fund represented in person or by proxy and entitled to
vote at the Meeting if a quorum is present.

FOR EACH OF THE ABOVE FUNDS, TO APPROVE OR DISAPPROVE OF NEW
INVESTMENT ADVISORY AGREEMENTS AND/OR SUBADVISORY AGREEMENTS WITH
RESPECT TO SUCH FUND, AS MORE SPECIFICALLY DESCRIBED IN PARTS (A),
(B), (C), (D), (E) AND (F) OF THIS PROPOSAL 2.

GENERAL

As noted above, each of the above Funds is currently a Spokesm fund within
a two-tier, master/feeder mutual fund structure, also referred to as a Hub and
Spoke(R) structure. In such structure, each Fund, unlike other mutual funds
which directly acquire and manage their own portfolios of securities, seeks to
achieve its investment objective by investing all of its investable assets in
the corresponding Portfolio of the Portfolio Series having the same investment
objective as such Fund.

Under this structure, the Portfolio Series has entered into investment
advisory agreements (the "Current Advisory Agreements") on behalf of the
Portfolios corresponding to the above Funds with the investment advisers
described in the table set forth below, whereby each of the investment advisers
provides such Portfolio with investment, research and portfolio management
services. The dates on which the Current Advisory Agreements were established
are also set forth in the table.

DATE CURRENT
ADVISORY AGREEMENT
PORTFOLIO INVESTMENT ADVISER ESTABLISHED

Equity Portfolio U.S. Trust September 13, 1994
Income Portfolio U.S. Trust September 13, 1994
Total Return Bond Portfolio U.S. Trust September 13, 1994
Balanced Portfolio U.S. Trust Pacific June 30, 1994
Equity Growth Portfolio U.S. Trust Pacific June 30, 1994
International Equity Portfolio U.S. Trust Pacific September 13, 1994
Bond Market Portfolio U.S. Trust Pacific June 30, 1994

U.S. Trust Pacific, as investment adviser to the Balanced Portfolio, the
Equity Growth Portfolio, the International Equity Portfolio and the Bond Market
Portfolio, has delegated the daily management of the security holdings of such
Portfolios to certain investment subadvisers pursuant to the investment
subadvisory agreements (the "Current Subadvisory Agreements") described in the
table set forth below. The dates on which the Current Subadvisory Agreements
were established are also set forth in the table.

DATE CURRENT
INVESTMENT SUBADVISORY AGREEMENT
PORTFOLIO SUBADVISER ESTABLISHED

Balanced Portfolio Becker Capital June 30, 1994
Management, Inc.
("Becker")
Equity Growth Portfolio Luther King June 30, 1994
Capital
Management
Corporation
("Luther King")
International Equity Portfolio Harding, Loevner September 13, 1994
Management, L.P.
("Harding
Loevner")
Bond Market Portfolio U.S. Trust June 30, 1994

Under each Fund's current structure, the Fund is not required to engage
the services of an investment adviser, because such Fund holds only a redeemable
interest in the corresponding Portfolio. Each Fund's shareholders, however,
indirectly bear the payment of the corresponding Portfolio's expenses, including
the payment of the corresponding Portfolio's advisory fee. If each Fund's
shareholders approve the plan to withdraw such Fund's investment from the
corresponding Portfolio, as described in Proposal 1, and such Fund's existing
structure is replaced by a traditional one-tier operating structure, such Fund
will be required to engage an investment adviser and, if applicable, investment
subadviser to manage such Fund's portfolio of investments. As more fully
described in Proposal 3 below, the structure of the Bond Index Fund would only
temporarily be replaced by a traditional one-tier operating structure, since it
is contemplated that the investable assets of such Fund would almost immediately
be reinvested in the Bond Index Portfolio, a series of Federated Portfolios, in
a two-tier, master-feeder operating structure.

At a meeting of the Board of Trustees of the Trust on August 29, 1995, the
Trustees, including the Independent Trustees, voted to approve, and recommend
that the shareholders of each of the above Funds approve, investment advisory
agreements (each a "New Advisory Agreement") between the Trust on behalf of such
Fund and the investment adviser currently providing advisory services to the
Portfolio corresponding to such Fund. The Trustees also voted to approve, and
recommend that the shareholders of each of the Balanced Fund, the Equity Growth
Fund, the International Equity Fund and the Bond Index Fund approve, investment
subadvisory agreements (each a "New Subadvisory Agreement") between such Fund's
investment adviser and the investment subadviser currently providing investment
advisory services with respect to the Portfolio corresponding to such Fund. The
rates of the advisory fees in each of the New Advisory Agreements and the New
Subadvisory Agreements, as approved by the Trustees and recommended for approval
by the shareholders of the appropriate Funds, are identical to the rates of the
advisory fees in the corresponding Current Advisory Agreement or Current
Subadvisory Agreement, as the case may be. If a Fund's shareholders do not
approve Proposal 1 with respect to such Fund, the withdrawal of such Fund's
investment from the corresponding Portfolio will not occur and the Current
Advisory Agreement with respect to the Portfolio corresponding to such Fund and
the Current Subadvisory Agreement with respect to the Portfolio corresponding to
such Fund, if any, will continue in effect.

THE NEW AND CURRENT ADVISORY AND SUBADVISORY AGREEMENTS

The terms and conditions of the New Advisory Agreements and New
Subadvisory Agreements with respect to the above Funds are identical in all
material respects to those of the Current Advisory Agreements or, as the case
may be, Current Subadvisory Agreements with respect to the Portfolios
corresponding to such Funds, with the exception of the identity of the party
contracting with the investment adviser and their effective dates and
termination dates. A form of New Advisory Agreement with respect to the above
Funds is attached hereto as Exhibit A, and the discussion of the terms of each
New Advisory Agreement is qualified in its entirety by reference to Exhibit A. A
form of New Subadvisory Agreement with respect to the above Funds having
investment subadvisers is attached hereto as Exhibit B, and the discussion of
the terms of each New Subadvisory Agreement is qualified in its entirety by
reference to Exhibit B.

Subject to the supervision and approval of the Board of Trustees of the
Trust, under the New Advisory Agreement or New Subadvisory Agreement with
respect to each of the above Funds, as under the Current Advisory Agreement or
Current Subadvisory Agreement corresponding to such Fund, the investment adviser
or, as the case may be, investment subadviser, is required to: (a) prepare and
evaluate statistical, financial and economic data and other information; (b)
formulate, review and administer an investment program for such Fund; (c)
determine the securities to be purchased by such Fund and monitor such
securities to determine when to take action with respect to such securities; (d)
determine whether and how to exercise rights with respect to such securities
such as voting rights and warrants; (e) determine the value of such securities;
(f) report to the officers of the Trust and its Board of Trustees as to
investment performance and such adviser's performance under the applicable New
Advisory Agreement or New Subadvisory Agreement; (g) assist the officers of the
Trust and the investment adviser, if applicable, in connection with the
operation of the Trust; (h) place orders for the purchase, sale or loan of
securities by the Trust; (i) provide office space, office facilities, equipment
and personnel; and (j) maintain all records concerning activities of such
investment adviser or investment subadviser that it is required by law to
maintain. Under each New Advisory Agreement (but not under the New Subadvisory
Agreements), the investment adviser may appoint and employ one or more
subadvisers that are satisfactory to such Fund.

Each New Advisory Agreement and each New Subadvisory Agreement with
respect to a Fund will, as does the corresponding Current Advisory Agreement or
Current Subadvisory Agreement, provide that the investment adviser or investment
subadviser thereunder is not liable for any act or omission connected with the
rendering of services under the New Advisory Agreement or New Subadvisory
Agreement, as the case may be, or any losses that may be sustained in the
purchase, holding or sale of any security. However, the investment adviser or
investment subadviser will be liable for a loss resulting from willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties under such Agreement. Furthermore, each New Subadvisory
Agreement will, as does each Current Subadvisory Agreement, provide that the
investment subadviser thereunder is not liable for errors of judgment, mistakes,
acts or omissions of the applicable adviser.

By its terms, each New Advisory Agreement and each New Subadvisory
Agreement will continue in effect for an initial term of two years from the date
of execution and for successive annual periods thereafter, provided that the
continuance is specifically approved at least annually by a majority of the
Independent Trustees and either (i) a vote of a 1940 Act Majority (as defined in
part (a) below) of the Fund's outstanding voting securities, or (ii) the vote of
a majority of the full Board of Trustees. Each such New Advisory Agreement is
terminable without penalty, (x) by the Trust on not less than 60 days' written
notice by the Trustees to the investment adviser, by action of the Board of
Trustees or the vote of a majority of the Fund's outstanding voting securities,
or (y) by the investment adviser on not less than 90 days' written notice by the
investment advisor to the Trust. Each New Subadvisory Agreement is terminable
without penalty (a) by the Trust on not less than 60 days' written notice by the
Trustees to the investment subadviser, by action of the Board of Trustees or the
vote of a majority of the Fund's outstanding voting securities, (b) by the
investment adviser on not less than 60 days' written notice from the investment
adviser to the investment subadviser, or (c) by the investment subadviser on not
less than 90 days' written notice from the investment subadviser to the
investment adviser and the Trust. Each New Advisory Agreement and New
Subadvisory Agreement terminates automatically in the event of its "assignment"
(as defined in the 1940 Act).

Each New Advisory Agreement and each New Subadvisory Agreement with
respect to each of the above Funds provides that the services of the investment
adviser or investment subadviser thereunder are not exclusive and that the
investment adviser or investment subadviser is free to render services to others
so long as such person's ability to perform its obligations under such agreement
is not adversely effected.

Each New Advisory Agreement and New Subadvisory Agreement with respect to
the above Funds states that it will be governed in accordance with the laws of
The Commonwealth of Massachusetts and that each provision of such Agreement is
independent of all other provisions.

The foregoing descriptions of the terms of the New Advisory Agreements and
New Subadvisory Agreements are subject to the provisions of parts (a), (b), (c),
(d), (e) and (f) set forth below of this Proposal 2. Shareholders should also
refer to Exhibit A for the specific terms of the New Advisory Agreements and
Exhibit B for the specific terms of the New Subadvisory Agreements.

MATERIAL PAYMENTS BY THE FUNDS TO U.S. TRUST OR U.S. TRUST
PACIFIC AND THEIR AFFILIATES

During the past fiscal year, U.S. Trust and its affiliates provided
transfer agency, shareholder servicing and custodial services to each Fund and
in the case of custodial services, each Fund's corresponding Portfolio. With
respect to each of the Funds, U.S. Trust and its affiliates waived all transfer
agency and shareholder servicing fees during the past fiscal year. During the
period beginning with each of the above Funds' inception and ending on the last
day of the Trust's fiscal year on May 31, 1995, the payments to U.S. Trust and
its affiliates by such Funds and their corresponding Portfolios (other than for
investment advisory services or brokerage commissions) are set forth in the
following table:

Transfer Agency Shareholder Custodial
Fund Services Services Services*

Equity Fund $ 0 $ 0 $ 0
-------------- -------------- -------------
Income Fund $ 0 $ 0 $ 0
-------------- -------------- -------------
Total Return
Bond Fund $ 0 $ 0 $ 0
-------------- -------------- -------------
Balanced Fund $ 0 $ 0 $ 0
-------------- -------------- -------------
Equity Growth Fund $ 0 $ 0 $ 0
-------------- -------------- -------------
International
Equity Fund $ 0 $ 0 $ 0
-------------- -------------- -------------
Bond Index Fund $ 0 $ 0 $ 0
-------------- -------------- -------------

Total $ 0 $ 0 $ 0
-------------- -------------- -------------

* The custodial services referred to above were provided by U.S. Trust,
which entered into sub-custody arrangements with respect to the Portfolios
corresponding to the above Funds. Although U.S. Trust did not receive any fees
for its services as custodian to the Portfolios, it did receive fees totaling
$53,230 which U.S. Trust paid to the Portfolios' sub-custodian. As The Chase
Manhattan Bank, N.A. ("Chase") became the Trust's custodian as of September 1,
1995, U.S. Trust will no longer serve as custodian.

The transfer agency services referred to above were provided by Mutual
Fund Services Company, which was an affiliate of U.S. Trust and U.S. Trust
Pacific until September 1, 1995, when it was acquired by Chase and is now doing
business under the name Chase Global Funds Services Company ("CGFSC"). In
connection with the restructuring, it is expected that U.S. Trust will provide
transfer agency services to the above Funds, but that CGFSC will provide
sub-transfer services to U.S. Trust with respect to such Funds.

The shareholder services referred to above were provided by U.S. Trust,
which voluntarily agreed to waive all of the shareholder servicing fees set
forth in the table above for the fiscal year ending May 31, 1995. It is expected
that U.S. Trust will provide shareholder services to the above Funds in the
future.

OTHER GENERAL MATTERS

The Glass-Steagall Act and applicable banking laws and regulations
generally prohibit certain financial institutions such as U.S. Trust or U.S.
Trust Pacific from engaging in the business of underwriting securities of
open-end investment companies such as the Trust. Based on advice of its counsel,
it is the position of U.S. Trust and U.S. Trust Pacific that the investment
advisory services to be performed by U.S. Trust Pacific or U.S. Trust under the
New Advisory Agreements with the Trust and the activities performed by U.S.
Trust as shareholder servicing agent for the Funds, do not constitute
underwriting activities and are consistent with the requirements of the
Glass-Steagall Act. In addition, counsel have advised that this combination of
individually permissible activities is consistent with the Glass-Steagall Act
and other federal or state and regulatory precedent. There is presently no
controlling precedent regarding the performance of a combination of investment
advisory and shareholder servicing activities by banks. State laws on this issue
may differ from the interpretations of relevant federal law and banks and
financial institutions may be required to register as dealers pursuant to state
securities law. Future changes in either federal statutes or regulations
relating to the permissible activities of banks, as well as future judicial or
administrative decisions and interpretations of present and future statutes and
regulations, could prevent a bank from continuing to perform all or part of its
servicing or investment management activities. If a bank were prohibited from so
acting, its shareholder customers would be permitted to remain Fund shareholders
and alternative means for continuing the servicing of such shareholders would be
sought. In such event changes in the operation of the Fund might occur and
shareholders serviced by such bank might no longer be able to avail himself of
any automatic investment or other services then being provided by such bank. The
Trustees of the Trust do not expect that shareholders of the Funds would suffer
any adverse financial consequences as a result of these occurrences.

U.S. Trust, U.S. Trust Pacific and their affiliates may have deposit, loan
and other commercial banking relationships with the issuers of securities that
may be purchased on behalf of the Funds, including outstanding loans to such
issuers which could be repaid in whole or in part with the proceeds of
securities so purchased. U.S. Trust, U.S. Trust Pacific and their affiliates
deal, trade and invest for their own accounts in such obligations and are among
the leading dealers of various types of such obligations. U.S. Trust and U.S.
Trust Pacific have informed the Trust that, in making investment decisions, they
do not obtain or use material inside information or in their possession or in
the possession of any of their affiliates. In making investment recommendations
for the Funds, U.S. Trust and U.S. Trust Pacific will not inquire or take into
consideration whether an issuer of securities proposed for purchase or sale by a
Fund is a customer of U.S. Trust or U.S. Trust Pacific, their parents or their
subsidiaries or affiliates. When dealing with its customers, U.S. Trust, U.S.
Trust Pacific, their parents, subsidiaries, and affiliates will not inquire or
take into consideration whether securities of such customers are held by any
fund managed by U.S. Trust, U.S. Trust Pacific or any such affiliate.

(a). EXCELSIOR INSTITUTIONAL EQUITY FUND
EXCELSIOR INSTITUTIONAL INCOME FUND
EXCELSIOR INSTITUTIONAL TOTAL RETURN BOND FUND

FOR EACH OF THE ABOVE FUNDS, TO APPROVE OR DISAPPROVE OF A NEW
INVESTMENT ADVISORY AGREEMENT BETWEEN THE TRUST, ON BEHALF OF THE
FUND, AND U.S. TRUST AS INVESTMENT ADVISER.

GENERAL

As noted above, the Board of Trustees of the Trust has voted to approve,
and recommended that shareholders of each of the above Funds approve, that the
Trust on behalf of those funds enter into as New Advisory Agreement with U.S.
Trust.

COMPARISON OF NEW AND CURRENT ADVISORY AGREEMENT

For a description and comparison of the terms of the New Advisory
Agreement and Current Advisory Agreement with respect to the above Funds, see
"The New and Current Advisory and Subadvisory Agreements" above. The Current
Advisory Agreement with respect to the Portfolios corresponding to the above
Funds was approved by the Board of Trustees of the Portfolio Series on September
13, 1994.

THE ADVISORY FEE AND OTHER EXPENSES

Under the New Advisory Agreement, each of the above Funds will directly
pay to U.S. Trust, as investment adviser, a monthly fee that is equal on an
annual basis to 0.65% of such Fund's average daily net assets. THIS IS THE SAME
RATE OF COMPENSATION AS IS PAYABLE INDIRECTLY BY SUCH FUND TO U.S. TRUST UNDER
THE CURRENT INVESTMENT ADVISORY AGREEMENT. Approval of the New Advisory
Agreement with respect to such Fund will not result in an increase, either
directly or indirectly, to any other fees borne by the Fund.

During the Trust's fiscal year ended May 31, 1995, (i) the Equity Fund,
through its corresponding Portfolio, indirectly paid advisory fees to U.S. Trust
of $0, (ii) the Income Fund, through its corresponding Portfolio, indirectly
paid advisory fees to U.S. Trust of $0, and (iii) the Total Return Bond Fund,
through its corresponding Portfolio, paid advisory fees to U.S. Trust of $0. The
payment represented a waiver of advisory fees by U.S. Trust of $23,905, $67,732,
and $43,478 with respect to the Equity Fund, the Income Fund and the Total
Return Bond Fund respectively.

CONCERNING U.S. TRUST AS INVESTMENT ADVISER

U.S. Trust is a state-chartered bank and trust
company. U.S. Trust provides trust and banking services to
individuals, corporations and institutions, both nationally
and internationally, including investment management, estate
and trust administration, financial planning, corporate
trust and agency, and personal and corporate banking. U.S.
Trust is a member bank of the Federal Reserve System and the
Federal Deposit Insurance Corporation and is one of the
twelve members of the New York Clearing House Association.
On September 1, 1995, U.S. Trust's Asset Management Group
had approximately $36 billion in assets under management.
U.S. Trust, which has its principal offices at 114 West 47th
Street, New York, NY 10036, is a wholly-owned subsidiary of
U.S. Trust Corporation, a registered bank holding company.
Other than U.S. Trust Corporation, no person owns more than
10% of the voting securities of U.S. Trust.

U.S. Trust provides investment advisory services to other mutual funds
with a similar investment objective to that of the above Funds. See Exhibit C
for a list of those funds, the size of those funds, the rate of the advisory
fees paid by those funds and whether any of such fees have been waived or
otherwise reduced.

BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS AND OTHER
FEES

During the Trust's fiscal year ended May 31, 1995, none of the above Funds
paid brokerage commissions to affiliated brokers. For a description of other
fees paid by the Funds to U.S. Trust, see "Material Payments by the Funds to
U.S. Trust or U.S. Trust Pacific and their Affiliates" above.

THE DIRECTORS OF U.S. TRUST

The table below sets forth the name, address and
principal occupation of each of the Directors of U.S. Trust
and the principal executive officer of U.S. Trust:
<TABLE>
<CAPTION>
Name Address Principal Occupation
- ---- ------- --------------------
<S> <C> <C>
SAMUEL C. BUTLER Cravath, Swaine & Moore Partner in Cravath,
Worldwide Plaza Swaine & Moore
825 Eighth Avenue
New York, NY 10019

PETER O. CRISP Venrock Associates General Partner in
Room 560 Venrock Associates
30 Rockefeller Plaza
New York, NY 10019

ANTONIA M. GRUMBACH Patterson, Belknap, Partner in Patterson,
Webb & Tyler Belknap, Webb & Tyler
30 Rockefeller Plaza
New York, NY 10112

H. MARSHALL SCHWARZ United States Trust Company Chairman of the Board
of New York & Chief Executive
114 West 47th Street Officer of U.S. Trust
New York, NY 10036 Corporation and United States
Trust Company of New York

PHILIPPE DE MONTEBELLO Metropolitan Museum of Art Director of the
1000 Fifth Avenue Metropolitan Museum
New York, NY 10029-0198 of Art

PAUL W. DOUGLAS 250 Park Avenue
Room 1900
New York, NY 10177

FREDERIC C. HAMILTON Hamilton Oil Corp. Chairman of the Board
1560 Broadway of Hamilton Oil Corp.
Suite 2000
Denver, CO 80202

JOHN H. STOOKEY Hanson Industries
410 Park Avenue
New York, NY 10028

ROBERT N. WILSON Johnson & Johnson Vice Chairman of the
One Johnson & Johnson Plaza Board of Johnson & Johnson
New Brunswick, NJ 08933

PETER L. MALKIN Wein, Malkin & Bettex Chairman of Wein, Malkin
Lincoln Building & Bettex
60 East 42nd Street
New York, NY 10165

RICHARD F. TUCKER 11 Over Rock Lane Retired
Westport, CT 06880

CARROLL L. WAINRIGHT, JR. Milbank,Tweed, Hadley Consulting Partner
& McCloy of Milbank, Tweed,
One Chase Manhattan Plaza Hadley & McCloy
New York, NY 10005

FREDERICK B. TAYLOR United States Trust Vice Chairman and
Company of New York Chief Investment Officer
114 West 47th Street of U.S. Trust Corporation
New York, NY 10036 and United States Trust
Company of New York

JEFFREY S. MAURER United States Trust President of U.S. Trust
Company of New York Corporation and
114 West 47th Street United States Trust
New York, NY 10036 Company of New York

DANIEL P. DAVISON Christie, Manson & Woods Chairman, Christie,
International, Inc. Manson & Woods
502 Park Avenue International, Inc.
New York, NY 10021

ORSON D. MUNN Munn, Bernhard & Chairman and Director
Associates, Inc. of Munn, Bernhard &
6 East 43rd Street Associates, Inc.
28th Floor
New York, NY 10017

PHILIP L. SMITH P.O. Box 386 Corporate Director and
Ponte Verde Beach, FL 32004 Trustee

EDWIN D. ETHERINGTON P.O. Box 100 President Emeritus,
Old Lyme, CT 06371 Wesleyan University
and Former President of
American Stock Exchange
</TABLE>

<PAGE>

TRUSTEES' EVALUATION AND RECOMMENDATION

At the meeting of the Board of Trustees on August 29, 1995, the Trustees,
including the Independent Trustees, approved the New Advisory Agreements with
respect to the above Funds and the amount of the advisory fee to be paid by such
Funds. In making this determination, the Trustees considered several factors,
including the nature, quality and scope of the services to be provided to each
Fund and the investment record of U.S. Trust in managing the Portfolios
corresponding to such Funds and the other mutual funds managed by U.S. Trust.
The Trustees also considered that U.S. Trust's relationship with each Fund will
provide continuity of portfolio management services to each Fund. The Trustees
believe the New Advisory Agreements with respect to the above Funds and the
proposed advisory fees to be reasonable, fair and in the best interests of each
Fund's shareholders.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT EACH FUND'S
SHAREHOLDERS APPROVE THE NEW INVESTMENT ADVISORY AGREEMENT
WITH RESPECT TO SUCH FUND.

If the New Advisory Agreement with respect to any of the above Funds is
not approved, the Trustees will not authorize the withdrawal by such Fund of its
investment in the corresponding Portfolio as described in Proposal 1, regardless
of the fact that Proposal 1 may have been approved by the shareholders of such
Fund.

VOTE REQUIRED

Approval of this part (a) of Proposal 2 with respect to a Fund requires
the affirmative vote of a majority of the outstanding voting securities of that
Fund, as defined in the 1940 Act, which means the lesser of (1) 67 percent or
more of the shares of the Fund represented at the Meeting if at least 50 percent
of all outstanding shares of such Fund are represented at the Meeting or (2) 50
percent or more of the outstanding shares of such Fund entitled to vote at the
meeting (the "1940 Act Majority").

(b). EXCELSIOR INSTITUTIONAL BALANCED FUND
EXCELSIOR INSTITUTIONAL EQUITY GROWTH FUND
EXCELSIOR INSTITUTIONAL INTERNATIONAL EQUITY FUND
EXCELSIOR INSTITUTIONAL BOND INDEX FUND

FOR EACH OF THE ABOVE FUNDS, TO APPROVE OR
DISAPPROVE OF A NEW INVESTMENT ADVISORY AGREEMENT
BETWEEN THE TRUST, ON BEHALF OF THE FUND, AND U.S.
TRUST PACIFIC AS INVESTMENT ADVISER.

GENERAL

As noted above, the Board of Trustees of the Trust has voted to approve,
and recommended that shareholders of each of the above Funds approve, that the
Trust, on behalf of those Funds, enter into a New Advisory Agreement with U.S.
Trust Pacific.

COMPARISON OF NEW AND CURRENT ADVISORY AGREEMENTS

For a description and comparison of the terms of the New Advisory
Agreements and Current Advisory Agreements with respect to the above Funds, see
"The New and Current Advisory and Subadvisory Agreements" in Proposal 2 above.
The Current Advisory Agreements with respect to the Portfolios corresponding to
the above Funds were approved by the Board of Trustees of the Portfolio Series
on June 30, 1994 (September 13, 1994 in the case of the International Equity
Fund).

THE ADVISORY FEE AND OTHER EXPENSES

Under the respective New Advisory Agreements, the Balanced Fund and the
Equity Growth Fund will directly pay to U.S. Trust Pacific, as investment
adviser, a monthly fee that is equal on an annual basis to 0.65% of such Fund's
average daily net assets, the Bond Index Fund will pay to U.S. Trust Pacific, as
investment adviser, a monthly fee that is equal on an annual basis to 0.25% of
such Fund's average daily net assets, and the International Equity Fund will pay
to U.S. Trust Pacific, as investment adviser, a monthly fee that is equal on an
annual basis to 1.00% of such Fund's average daily net assets. IN EACH CASE THIS
IS THE SAME RATE OF COMPENSATION AS IS PAYABLE INDIRECTLY BY SUCH FUND TO THE
ADVISER UNDER THE CURRENT INVESTMENT ADVISORY AGREEMENT. Approval of the New
Advisory Agreement with respect to such Fund will not result in an increase,
either directly or indirectly, to any other fees borne by any of the above
Funds.

During the Trust's fiscal year ended May 31, 1995, (i) the Balanced Fund,
through its corresponding Portfolio, indirectly paid advisory fees to U.S. Trust
Pacific of $0, (ii) the Equity Growth Fund, through its corresponding Portfolio
indirectly paid advisory fees to U.S. Trust Pacific of $0, (iii) the
International Equity Fund, through its corresponding Portfolio, indirectly paid
advisory fees to U.S. Trust Pacific of $0, and (iv) the Bond Index Fund, through
its corresponding Portfolio, indirectly paid advisory fees to U.S. Trust Pacific
of $0. The payment represented a waiver of advisory fees of $365,664, $285,384,
$26,275 and $47,955 with respect to the Balanced Fund, the Equity Growth Fund,
the International Equity Fund and the Bond Index Fund respectively.

<PAGE>

CONCERNING U.S. TRUST PACIFIC AS INVESTMENT ADVISER

U.S. Trust Pacific is a wholly-owned subsidiary of U.
S. Trust. For information about U.S. Trust, see "Concerning
U.S. Trust as Investment Adviser" in part (a) above of this
Proposal 2. U.S. Trust Pacific is a full-service state
chartered bank which maintains its principal offices at 4380
S.W. Macadam Avenue, Suite 450, Portland, Oregon 97201.

U.S. Trust Pacific does not currently provide
investment advisory services to other mutual funds.

BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS AND OTHER
FEES

During the Trust's fiscal year ended May 31, 1995, none of the above Funds
paid brokerage commissions to brokers affiliated with U.S. Trust Pacific. For a
description of other fees paid by the Funds to U.S. Trust Pacific, see "Material
Payments by the Funds to U.S. Trust or U.S. Trust Pacific and their Affiliates"
above.

THE DIRECTORS OF U.S. TRUST PACIFIC

The table below sets forth the name, address and
principal occupation of each of the Trustee/Directors of
U.S. Trust Pacific and the principal executive officer of
U.S. Trust Pacific:
<TABLE>
<CAPTION>
Position with U.S. Trust Pacific;
Name Address Principal Occupation

<S> <C> <C>
Ralph C. Rittenour, Jr. 4380 S.W. Macadam Avenue Trustee/Director; Chairman of the
Suite 450 Board and Chief Executive Officer
Portland, Oregon 97201

Charles J. Swindells 4380 S.W. Macadam Avenue Trustee/Director; President
Suite 450
Portland, Oregon 97201

Nancy L. Jacob, Ph.D. 4380 S.W. Macadam Avenue Trustee/Director; Executive Vice
Suite 450 President
Portland, Oregon 97201

Douglas Adams 4380 S.W. Macadam Avenue Trustee/Director
Suite 450
Portland, Oregon 97201

Stephen Brink 4380 S.W. Macadam Avenue Trustee/Director;
Suite 450 Senior Vice President
Portland, Oregon 97201 and Chief Investment Officer

Marcia Bennett 4380 S.W. Macadam Avenue Trustee/Director;
Suite 450 Senior Vice President,
Portland, Oregon 97201 Trust Officer and
Operations Officer

Marv Vukovich 4380 S.W. Macadam Avenue Trustee/Director;
Suite 450 Vice President and
Portland, Oregon 97201 Chief Financial Officer

Carol Hibbs Tonkon Torp, Galen, Trustee/Director; Attorney of
Marmaduke & Booth Tonkon Torp, Galen,
1600 Pioneer Tower Marmaduke & Booth
888 SW Fifth Avenue
Portland, OR 97204
</TABLE>

TRUSTEES' EVALUATION AND RECOMMENDATION

At the meeting of the Board of Trustees on August 29, 1995, the Trustees,
including the Independent Trustees, approved the New Advisory Agreements with
respect to the above Funds and the amount of the advisory fee to be paid by such
Funds. In making this determination, the Trustees considered several factors,
including the nature, quality and scope of the services to be provided to each
Fund and the investment record of U.S. Trust Pacific in managing the Portfolios
corresponding to such Funds and the other mutual funds managed by U.S. Trust
Pacific. The Trustees also considered that U.S. Trust Pacific's relationship
with each Fund will provide continuity of portfolio management services to each
Fund. The Trustees believe the New Advisory Agreements with respect to the above
Funds and the proposed advisory fees to be reasonable, fair and in the best
interests of each Fund's shareholders.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT EACH FUND'S SHAREHOLDERS APPROVE
THE NEW INVESTMENT ADVISORY AGREEMENT WITH RESPECT TO SUCH FUND.

VOTE REQUIRED

Approval of this part (b) of Proposal 2 with respect to a Fund requires
the affirmative vote of a 1940 Act Majority (as defined in part (a) above) of
outstanding voting securities of that Fund.

(c). EXCELSIOR INSTITUTIONAL BALANCED FUND

FOR THE ABOVE FUND, TO APPROVE OR DISAPPROVE OF A
NEW INVESTMENT SUBADVISORY AGREEMENT BETWEEN U.S.
TRUST PACIFIC AND BECKER CAPITAL MANAGEMENT, INC.
AS INVESTMENT SUBADVISER.

GENERAL

As noted above, the Board of Trustees of the Trust has voted to approve,
and recommended that shareholders of the above Fund approve, that the Trust on
behalf of such Fund enter into a New Subadvisory Agreement between U.S. Trust
Pacific as investment adviser to such Fund and Becker as investment subadviser.

COMPARISON OF NEW AND CURRENT SUBADVISORY AGREEMENTS

For a description and comparison of the terms of the New Subadvisory
Agreement and Current Subadvisory Agreement with respect to the above Fund, see
"the New and Current Advisory and Subadvisory Agreements" in Proposal 2 above.
The Current Subadvisory Agreement with respect to the Portfolio corresponding to
the above Fund were approved by the Board of Trustees of the Portfolio Series on
June 30, 1994.

THE ADVISORY FEE AND OTHER EXPENSES

Under the New Subadvisory Agreement with respect to the above Fund U.S.
Trust Pacific will directly pay to Becker, as investment subadviser, a monthly
fee that is equal on an annual basis to 0.425% of the first $20,000,000 of such
Fund's average daily net assets and 0.20% of such Fund's average daily net
assets in excess of $20,000,000. THIS IS THE SAME RATE OF COMPENSATION AS IS
PAYABLE BY U.S. TRUST PACIFIC TO BECKER UNDER THE CURRENT INVESTMENT SUBADVISORY
AGREEMENT. Approval of the New Subadvisory Agreement with respect to such Fund
will not result in an increase, either directly or indirectly, to any other fees
borne by the above Fund.

During the Trust's fiscal year ended May 31, 1995, U.S. Trust Pacific paid
advisory fees to Becker of $239,088 with respect to the Portfolio corresponding
to the above Fund.

CONCERNING BECKER AS INVESTMENT SUBADVISER

Becker is a registered investment adviser. It maintains its principal
offices at 2185 Pacwest Center, Portland, Oregon 97204. As of September 30,
1994, Becker had $900 million in assets under management. The person primarily
responsible for the day-to-day management of the Balanced Portfolio is Donald L.
Wolcott, C.F.A., Vice President and Portfolio Manager of Becker. Mr. Wolcott
joined Becker in 1987 and brings 19 years of experience in investment management
to his position.

Patrick E. Becker, the President of Becker, owns more than 10% of the
voting securities of Becker. His address is 23661 Stafford Hill Drive, West
Linn, Oregon 97068.

Becker does not currently provide investment advisory services to other
mutual funds.

BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS

During the Trust's fiscal year ended May 31, 1995, the above Fund paid no
brokerage commissions to brokers affiliated with Becker.

OTHER MATERIAL PAYMENTS BY THE FUND TO BECKER AND AFFILIATES
OF BECKER

During the Trust's fiscal year ended May 31, 1995, neither the Fund nor
the Portfolio corresponding to the Fund made any payments to Becker or any
affiliate of Becker for services provided to such Fund or its corresponding
Portfolio (other than investment advisory services).

THE DIRECTORS OF BECKER

The table below sets forth the name, address and principal occupation of
each of the Directors of Becker and of the principal executive officer of
Becker:

Position with Becker;
Name Address Principal Occupation

Patrick E. Becker 1211 SW Fifth Avenue, #2185 Director; President
Portland, Oregon 97204

Janeen S. McAninch 1211 SW Fifth Avenue, #2185 Director; Executive
Portland, Oregon 97204 Vice President

TRUSTEES' EVALUATION AND RECOMMENDATION

At the meeting of the Board of Trustees on August 29, 1995, the Trustees,
including the Independent Trustees, approved the New Subadvisory Agreement with
respect to the above Fund and the amount of the advisory fee to be paid by U.S.
Trust Pacific to Becker with respect to such Fund. In making this determination,
the Trustees considered several factors, including the nature, quality and scope
of the services to be provided to the Fund and the investment record of Becker
in managing the Portfolio corresponding to the Fund. The Trustees also
considered that Becker's relationship with the Fund will provide continuity of
portfolio management services to the Fund. The Trustees believe the New
Subadvisory Agreement with respect to the above Fund and the proposed advisory
fees to be reasonable, fair and in the best interests of the Fund's
shareholders.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE FUND'S SHAREHOLDERS APPROVE THE
NEW INVESTMENT SUBADVISORY AGREEMENT WITH RESPECT TO THE FUND.

If the New Subadvisory Agreement with respect to the above Fund is not
approved, the Trustees will not authorize the withdrawal by the Fund of its
investment in the corresponding Portfolio as described in Proposal 1, regardless
of the fact that Proposal 1 may have been approved by the shareholders of the
Fund.

VOTE REQUIRED

Approval of this part (c) of Proposal 2 requires the affirmative vote of a
1940 Act Majority (as defined in part (a) above) of outstanding voting
securities of the above Fund.

(d). EXCELSIOR INSTITUTIONAL EQUITY GROWTH FUND

FOR THE ABOVE FUND, TO APPROVE OR DISAPPROVE OF A
NEW INVESTMENT SUBADVISORY AGREEMENT BETWEEN U.S.
TRUST PACIFIC AND LUTHER KING CAPITAL MANAGEMENT
CORPORATION AS INVESTMENT SUBADVISER.

GENERAL

COMPARISON OF NEW AND CURRENT SUBADVISORY AGREEMENTS

For a description and comparison of the terms of the New Subadvisory
Agreement and Current Subadvisory Agreement with respect to the above Fund, see
"The New and Current Advisory and Subadvisory Agreements" in Proposal 2 above.
The Current Subadvisory Agreement with respect to the Portfolios corresponding
to the above Fund was approved by the Board of Trustees of the Portfolio Series
on June 30, 1994.

THE ADVISORY FEE AND OTHER EXPENSES

Under the New Subadvisory Agreement, with respect to the above Fund, U.S.
Trust Pacific will directly pay to Luther King, as investment subadviser, a
monthly fee that is equal on an annual basis to 0.40% of the first $20,000,000
of such Fund's average daily net assets, 0.30% of the next $30,000,00 of such
Fund's average daily net assets, and a percentage to be negotiated of such
Fund's average daily net assets in excess of $50,000,000. THIS IS THE SAME RATE
OF COMPENSATION AS IS PAYABLE BY U.S. TRUST PACIFIC TO LUTHER KING WITH RESPECT
TO SUCH FUND UNDER THE CURRENT INVESTMENT ADVISORY AGREEMENT. Approval of the
New Subadvisory Agreement with respect to such Fund will not result in an
increase, either directly or indirectly, to any other fees borne by the above
Fund.

During the Trust's fiscal year ended May 31, 1995, U.S. Trust Pacific paid
advisory fees to Luther King of $175,621 with respect to the Portfolio
corresponding to the above Fund.

CONCERNING LUTHER KING AS INVESTMENT SUBADVISER

Luther King is a registered investment adviser. It maintains its principal
offices at 301 Commerce Street, Suite 1600, Fort Worth, TX 76102. As of
September 30, 1994, Luther King had $4.5 billion in assets under management.
Emmett M. Murphy is primarily responsible for the day-to-day management of
Equity Growth Portfolio. Mr. Murphy has been an investment manager with Luther
King since 1981. He is also a Chartered Financial Analyst.

Southwest JLK Corporation owns more than 10% of the voting securities of
Luther King. Southwest JLK Corporation is owned by the President of Luther King,
John Luther King, Jr., and Teresa King. Their address is 4224 Versailles,
Dallas, Texas 75205.

Luther King provides investment advisory services to other mutual funds
with similar investment objectives to that of the above Fund. See Exhibit D for
a list of those funds, the size of those funds, the rate of the advisory fees
paid by those funds, and whether any of such fees have been waived or otherwise
reduced.

BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS

During the Trust's fiscal year ended May 31, 1995, the above Fund paid no
brokerage commissions to brokers affiliated with Luther King.

OTHER MATERIAL PAYMENTS BY THE FUNDS TO LUTHER KING AND
AFFILIATES OF LUTHER KING

During the Trust's fiscal year ended May 31, 1995, neither the Fund nor
the Portfolio corresponding to the Fund made any payments to Luther King or any
affiliate of Luther King for services provided to the Fund or its corresponding
Portfolio (other than investment advisory services).

THE DIRECTORS OF LUTHER KING

The table below sets forth the name, address and principal occupation of
each of the Directors of Luther King and the principal executive officer of
Luther King:

Position with Luther King;
Name Address Principal Occupation

John Luther King, Jr. 301 Commerce Street, Director; President
Suite 1600
Fort Worth, Texas 76102

TRUSTEES' EVALUATION AND RECOMMENDATION

At the meeting of the Board of Trustees on August 29, 1995, the Trustees,
including the Independent Trustees, approved the New Subadvisory Agreement with
respect to the above Fund and the amount of the advisory fee to be paid by U.S.
Trust Pacific to Luther King with respect to such Fund. In making this
determination, the Trustees considered several factors, including the nature,
quality and scope of the services to be provided to the Fund and the investment
record of Luther King in managing the Portfolio corresponding to such Fund and
the other mutual funds managed by Luther King. The Trustees also considered that
Luther King's relationship with the Fund will provide continuity of portfolio
management services to the Fund. The Trustees believe the New Subadvisory
Agreement with respect to the above Fund and the proposed advisory fees to be
reasonable, fair and in the best interests of the Fund's shareholders.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE FUND'S
SHAREHOLDERS APPROVE THE NEW INVESTMENT SUBADVISORY
AGREEMENT WITH RESPECT TO THE FUND.

VOTE REQUIRED

Approval of this part (d) of Proposal 2 requires the affirmative vote of a
1940 Act Majority (as defined in part (a) above) of outstanding voting
securities of the above Fund.

(e). EXCELSIOR INSTITUTIONAL INTERNATIONAL EQUITY FUND

FOR THE ABOVE FUND, TO APPROVE OR DISAPPROVE OF A
NEW INVESTMENT SUBADVISORY AGREEMENT BETWEEN U.S.
TRUST PACIFIC AND HARDING, LOEVNER MANAGEMENT,
L.P. AS INVESTMENT SUBADVISER.

GENERAL

As noted above, the Board of Trustees of the Trust has voted to approve,
and recommended that shareholders of the above Fund approve, that the Trust, on
behalf of such Fund, enter into a New Subadvisory Agreement between U.S. Trust
Pacific, as investment adviser to such Fund, and Harding Loevner.

COMPARISON OF NEW AND CURRENT ADVISORY AGREEMENTS

For a description and comparison of the terms of the New Subadvisory
Agreement and the Current Subadvisory Agreement with respect to the above Fund,
see "The New and Current Advisory and Subadvisory Agreements" in Proposal 2
above. The Current Subadvisory Agreement with respect to the Portfolio
corresponding to the above Fund was approved by the Board of Trustees of the
Portfolio Series on September 13, 1994.

THE ADVISORY FEE AND OTHER EXPENSES

Under the New Subadvisory Agreement with respect to the above Fund, U.S.
Trust Pacific will directly pay to Harding Loevner, as investment adviser, a
monthly fee that is equal on an annual basis to 0.50% of such Fund's average
daily net assets. THIS IS THE SAME RATE OF COMPENSATION AS IS PAYABLE BY U.S.
TRUST PACIFIC TO HARDING LOEVNER UNDER THE CURRENT INVESTMENT SUBADVISORY
AGREEMENT. Approval of the New Subadvisory Agreement with respect to the Fund
will not result in an increase, either directly or indirectly, to any other fees
borne by the Fund.

During the Trust's fiscal year ended May 31, 1995, U.S. Trust Pacific paid
advisory fees to Harding Loevner of $11,824 with respect to the Portfolio
corresponding to the above Fund.

CONCERNING HARDING LOEVNER AS INVESTMENT SUBADVISER

Harding Loevner is a New Jersey limited partnership and a registered
investment adviser. It maintains its principal offices at 50 Division Street,
Suite 401, Somerville, New Jersey 08876. Harding Loevner's only general partner
is HLM Holdings, Inc., which has approximately a 96% interest in Harding
Loevner. Approximately 87% of the stock of HLM Holdings, Inc. is owned by the
principals of Harding Loevner, David D. Harding (Chief Investment Officer),
David R. Loevner (Chief Executive Officer) and Simon Hallett (Senior Portfolio
Manager). The remaining stock of HLM Holdings, Inc. is owned by other Harding
Loevner employees. As of September 30, 1994, Harding Loevner had $350 million in
assets under management. All investment management decisions of Harding Loevner
are made by an investment group and not by portfolio managers individually.

Harding Loevner provides investment advisory services to other mutual
funds with similar investment objectives to that of the above Fund. See Exhibit
E for a list of those funds, the size of those funds, the rate of the advisory
fees paid by those funds, and whether any of such fees have been waived or
otherwise reduced.

BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS

During the Trust's fiscal year ended May 31, 1995, none of the above Funds
paid brokerage commissions to brokers affiliated with Harding Loevner.

OTHER MATERIAL PAYMENTS BY THE FUND TO HARDING LOEVNER AND
AFFILIATES OF HARDING LOEVNER

During the Trust's fiscal year ended May 31, 1995, neither the Fund nor
the Portfolio corresponding to the Fund paid any fees to Harding Loevner or any
affiliate of Harding Loevner for services provided to such Fund or its
corresponding Portfolio (other than investment advisory services).

TRUSTEES' EVALUATION AND RECOMMENDATION

At the meeting of the Board of Trustees on August 29, 1995, the Trustees,
including the Independent Trustees, approved the New Subadvisory Agreement with
respect to the above Fund and the amount of the advisory fee to be paid by U.S.
Trust Pacific to Harding Loevner with respect to such Fund. In making this
determination, the Trustees considered several factors, including the nature,
quality and scope of the services to be provided to the Fund and the investment
record of Harding Loevner in managing the Portfolio corresponding to the Fund
and the other mutual funds managed by Harding Loevner. The Trustees also
considered that Harding Loevner's relationship with the Fund will provide
continuity of portfolio management services to the Fund. The Trustees believe
the New Subadvisory Agreement with respect to the above Fund and the proposed
advisory fees to be reasonable, fair and in the best interests of the Fund's
shareholders.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE FUND'S SHAREHOLDERS APPROVE THE
NEW INVESTMENT SUBADVISORY AGREEMENT WITH RESPECT TO SUCH FUND.

If the New Subadvisory Agreement with respect to the above Fund is not
approved, the Trustees will not authorize the withdrawal by such Fund of its
investment in the corresponding Portfolio as described in Proposal 1, regardless
of the fact that Proposal 1 may have been approved by the shareholders of such
Fund.

VOTE REQUIRED

Approval of this part (e) of Proposal 2 requires the affirmative vote of a
1940 Act Majority (as defined in part (a) above) of outstanding voting
securities of the above Fund.

(f). EXCELSIOR INSTITUTIONAL BOND INDEX FUND

FOR THE ABOVE FUND, TO APPROVE OR DISAPPROVE OF A
NEW INVESTMENT SUBADVISORY AGREEMENT BETWEEN U.S.
TRUST PACIFIC AND U.S. TRUST AS INVESTMENT
SUBADVISER.

GENERAL

COMPARISON OF NEW AND CURRENT SUBADVISORY AGREEMENTS

For a description and comparison of the terms of the New Subadvisory
Agreement and Current Subadvisory Agreement with respect to the above Fund, see
"The New and Current Advisory and Subadvisory Agreements" in Proposal 2 above.
The Current Subadvisory Agreement with respect to the Portfolio corresponding to
the above Fund was approved by the Board of Trustees of the Portfolio Series on
June 30, 1994.

THE ADVISORY FEE AND OTHER EXPENSES

Under the New Subadvisory Agreement, with respect to the above Fund, U.S.
Trust Pacific will directly pay to U.S. Trust, as investment subadviser, a
monthly fee that is equal on an annual basis to 0.25% of such Fund's average
daily net assets. THIS IS THE SAME RATE OF COMPENSATION AS IS PAYABLE BY U.S.
TRUST PACIFIC TO U.S. TRUST UNDER THE CURRENT INVESTMENT SUBADVISORY AGREEMENT.
Approval of the New Subadvisory Agreement with respect to such Fund will not
result in an increase, either directly or indirectly, to any other fees borne by
the above Fund.

During the Trust's fiscal year ended May 31, 1995, advisory fees payable
by U.S. Trust Pacific to U.S. Trust were $47,955 with respect to the Portfolio
corresponding to the Bond Index Fund, all of which were waived by U.S. Trust.

CONCERNING U.S. TRUST AS INVESTMENT SUBADVISER

See "Concerning U.S. Trust as Investment Adviser" above.

BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS

During the Trust's fiscal year ended May 31, 1995, the above Fund did not
pay brokerage commissions to brokers affiliated with U.S. Trust. For a
description of other fees paid by the Fund to U.S. Trust, see "Material Payments
by the Funds to U.S. Trust or U.S. Trust Pacific and their Affiliates" above.

THE DIRECTORS OF U. S. TRUST

See "The Directors of U.S. Trust" above.

TRUSTEES' EVALUATION AND RECOMMENDATION

At the meeting of the Board of Trustees on August 29, 1995, the Trustees,
including the Independent Trustees, approved the New Subadvisory Agreement with
respect to the above Fund and the amount of the advisory fee to be paid by U.S.
Trust Pacific to U.S. Trust with respect to such Fund. In making this
determination, the Trustees considered several factors, including the nature,
quality and scope of the services to be provided to the Fund and the investment
record of U.S. Trust in managing the Portfolio corresponding to such Fund and
the other mutual funds managed by U.S. Trust. The Trustees also considered that
U.S. Trust's relationship with the Fund will provide continuity of portfolio
management services to the Fund. The Trustees believe the New Subadvisory
Agreement with respect to the above Fund and the proposed advisory fees to be
reasonable, fair and in the best interests of the Fund's shareholders.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE FUND'S
SHAREHOLDERS APPROVE THE NEW INVESTMENT SUBADVISORY
AGREEMENT WITH RESPECT TO THE FUND.

VOTE REQUIRED

Approval of this part (f) of Proposal 2 requires the affirmative vote of a
1940 Act Majority (as defined in part (a) above) of outstanding voting
securities of the above Fund.

PROPOSAL 3. EXCELSIOR INSTITUTIONAL BOND INDEX FUND

FOR THE ABOVE FUND, TO APPROVE OR DISAPPROVE OF
THE INVESTMENT BY SUCH FUND OF ITS INVESTABLE
ASSETS IN THE BOND INDEX PORTFOLIO, A SERIES OF
FEDERATED PORTFOLIOS.

GENERAL

As more fully described under Proposal 1 above, the Trust currently
invests all of the Bond Index Fund's investable assets in the Bond Market
Portfolio, which has the same investment objective and policies as the Fund. As
part of the restructuring referred to in Proposal 1, the Trustees of the Trust
have recommended that the Fund withdraw its investment in the Bond Market
Portfolio. Unlike the other Funds that would also be withdrawn from the
corresponding Portfolio of the Portfolio Series if Proposal 1 is approved, the
Trustees have determined that in the case of the Bond Index Fund, the benefits
of a two-tier structure could potentially be realized by reinvesting the assets
of the Fund in a series (the "Bond Index Portfolio") of Federated Investment
Portfolios (the "Federated Portfolios") and operating in a two-tier,
master/feeder structure. Since it is expected that there will be one or more
additional feeder funds investing in the Bond Index Portfolio, it is anticipated
that many of the expected benefits of the two-tier structure will be realized.
Therefore, the Trustees have determined that it would be in the best interests
of the shareholders of the Fund to replace the temporary one-tier operating
structure contemplated by Proposal 1 as soon as practicable following the
withdrawal from the Bond Market Portfolio, with a two-tier, master/feeder
structure by investing all of the investable assets of the Fund in the Bond
Index Portfolio, which has adopted the same investment objective, restrictions
and policies as the Fund.

As a feeder fund, the Fund will remain a series of Excelsior Institutional
Trust and thus will continue to have the Trust's Board of Trustees and other
service providers.

The master fund corresponding to the Fund will be the Bond Index
Portfolio, a series of Federated Portfolios. Federated Portfolios is an open-end
management investment company that was established as a Massachusetts business
trust under a Declaration of Trust dated as of September 25, 1995. Federated
Portfolios' business address is Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. Federated Portfolios is managed by a Board of Trustees.
The Trustees are responsible for managing Federated Portfolios' business affairs
and for exercising all Federated Portfolio's powers except those reserved for
the shareholders. An Executive Committee of the Board of Trustees handles the
Board's responsibilities between meetings of the Board. The Declaration of Trust
permits Federated Portfolios to offer separate series representing interests in
separate portfolios of securities. The Bond Index Portfolio, which was
established as a separate series of Federated Portfolios as of September 25,
1995, is the first and currently the only series of Federated Portfolios,
although additional series of Federated Portfolios may be established in the
future from time to time. Federated Portfolios' fiscal year, and therefore the
fiscal year of the Bond Index Portfolio, will end on May 31 of each year, the
same fiscal year as corresponds to the Fund.

Federated Administrative Services, a Delaware business trust whose address
is Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, provides
administrative personnel and services (including certain legal and financial
reporting services) necessary to operate Federated Portfolios. Federated
Administrative Services provides these at an annual rate which relates to the
average aggregate daily net assets of the Federated Portfolios as specified
below:

Maximum Average Aggregate
Administrative Daily Net Assets of the
Fee Federated Portfolios

0.15% first $250 million
0.125% next $250 million
0.10% next $250 million
0.075% assets in excess of $750 million

The administrative fee received during any fiscal year shall be at least
$150,000 per series of Federated Portfolios. Federated Administrative Services
may choose voluntarily to waive a portion of its fee. Federated Administrative
Services is a subsidiary of Federated Investors.

Federated Services Company, a Delaware business trust whose address is
P.O. Box 8600, Boston, Massachusetts 02266-8600, serves as transfer agent,
dividend disbursing agent and custody procurement agent for Federated
Portfolios. The fee paid to the transfer agent is based upon the size, type, and
number of accounts and transactions made by shareholders. Federated Services
Company also maintains Federated Portfolios' accounting records. The fee paid
for this service is based upon the level of Federated Portfolios' average net
assets for the period plus out-of-pocket expenses.

Federated Securities Corp. is the placement agent for investments in the
Bond Index Portfolio. Federated Securities Corp. is located at Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779. It is a Pennsylvania
corporation organized on November 14, 1969, and is the principal distributor for
a number of investment companies. Federated Securities Corp. receives no fee for
its services as placement agent for the Bond Index Portfolio. Federated
Securities Corp. is a subsidiary of Federated Investors.

Federated Portfolios' custodian is Investor's Bank & Trust Company, 89
South Street, Boston, Massachusetts.

Information regarding the proposed independent auditors for Federated
Portfolios is provided in part (d) of this Proposal 3, below.

Information regarding the proposed investment adviser and investment
subadviser to the Bond Index Portfolio is provided in parts (a) and (b) of this
Proposal 3, below.

TRUSTEES AND OFFICERS OF FEDERATED PORTFOLIOS

Information concerning the Trustees and Officers of Federated Portfolios
is provided in part (d) of this Proposal 3 below.

EXPENSE INFORMATION

The following table provides (i) a summary of estimated expenses relating
to purchases and sales of shares of the Fund, and the aggregate annual operating
expenses for the Fund and the corresponding Bond Index Portfolio, as a
percentage of average net assets of the Fund, and (ii) an example illustrating
the dollar cost of such estimated expenses on a $1,000 investment in the Fund,
in each case after giving effect to the transactions contemplated by this
Proposal 3. The Trustees of the Trust believe that the aggregate per share
expenses of the Fund and the corresponding Bond Index Portfolio will be less
than or approximately equal to the expenses which the Fund would incur if the
Trust retained the services of an investment adviser and the assets of the Fund
were invested directly in the type of securities held by the Bond Index
Portfolio.

Shareholder Transaction Expenses
Sales Load Imposed on Purchases.................... None
Sales Load Imposed on Reinvested Dividends......... None
Deferred Sales Load................................ None
Redemption Fees.................................... None
Exchange Fees...................................... None

Expense Table - Annual Operating Expenses
Advisory Fees (after reimbursement)................ 0.07%
12b-1 Fees......................................... None
Other Expenses
Administrative Fees (after waiver).............. 0.13%
Shareholder Servicing Fees (after waiver)....... 0%
Other Operating Expenses (after reimbursement).. 0.11%
0.24%
Total Fund Operating Expenses
(after waivers and reimbursement)............... 0.31%

Example

Investors would pay the following expenses on a $1,000 investment,
assuming (a) 5% annual return and (b) redemption of the investment at the end of
the following periods:

1 Year 3 Years
------ -------
$3 $9

The example above should not be considered a representation of past or
future expenses or performance. Actual expenses and returns may be greater than
or less than those shown. The purposes of the table is to assist investors in
understanding the various costs and expenses that shareholders of the Fund will
bear directly or indirectly via the Bond Index Portfolio.

The expense table and the example reflect the fact that the Bond Index
Portfolio's investment adviser and administrator both voluntarily waive a
portion of their fees and both are voluntarily reimbursing certain operating
expenses of the Bond Index Portfolio. Without such waivers and reimbursements,
the advisory fees paid would equal 0.25% of the average daily net assets of the
Bond Index Portfolio, the administrative fees would equal 0.15% of the average
daily net assets of the Fund, the shareholder servicing fees would equal 0.25%
of the average daily net assets of the Fund, and other expenses would equal
0.24% of the average daily net assets of the Fund and the Bond Index Portfolio.
In aggregate, the total operating expenses of the Fund and the Bond Index
Portfolio would equal 1.62% of the average daily net assets of the Fund. Fee
waivers and expense reimbursements are terminable at any time in the sole
discretion of the service providers waiving fees or reimbursing expenses.

Federated Portfolios and the Bond Index Portfolio were newly formed at the
time this Proxy Statement was sent to shareholders of the Fund and therefore
historical information regarding the results of the Bond Index Portfolio's
operations has not been included in this Proxy Statement.

INVESTMENT OBJECTIVES AND POLICIES OF THE BOND INDEX FUND.

The Bond Index Portfolio has investment objectives and policies identical
to those of the Fund. The investment objective of the Bond Index Portfolio is to
provide investment results that correspond to the investment performance of the
Lehman Brothers Aggregate Bond Index (the "Aggregate Bond Index"), a broad
market-weighted index more fully described below. The Bond Index Portfolio's
investment policy is to invest at least 80% of its assets in a portfolio of
securities consisting of a representative selection of fixed income securities
included in the Aggregate Bond Index. The Bond Index Portfolio intends to remain
fully invested, to the extent practicable, in a pool of securities that match
the yield and total return of the Index.

The investment philosophy behind the Bond Index Portfolio is that the
Portfolio is not managed pursuant to traditional methods of active investment
management, which involves the buying and selling of securities based upon
economic, financial and market analyses and investment judgment. Instead, the
Bond Index Portfolio, utilizing a passive or indexing investment approach, will
attempt to replicate the investment performance of the Aggregate Bond Index.

The Bond Index Portfolio seeks to achieve its investment objective of
duplicating the investment performance of the Aggregate Bond Index through
statistical sampling procedures by investing in a selected group -- not the
entire universe -- of securities in the Aggregate Bond Index. This group of
securities, when taken together, is expected to perform similarly to the index
as a whole. This sampling technique is expected to enable the Bond Index
Portfolio to track the price movements and performance of its index, while
minimizing brokerage, custodial and accounting costs.

The Trust expects that there will be a close correlation between the Bond
Index Portfolio's performance and that of the Aggregate Bond Index in both
rising and falling markets. The Bond Index Portfolio will attempt to maximize
the correlation between its performance and that of the Aggregate Bond Index.
Over the long term, the investment managers of the Bond Index Portfolio seek a
correlation of 0.95 or better. In the [unlikely] event that a correlation of
0.95 or better is not achieved, the Board of Trustees of Federated Portfolios
will review with the investment managers methods for increasing such
correlation, such as through adjustments in securities holdings of the Bond
Index Portfolio. Factors such as the size of the Portfolio's securities
holdings, transaction costs, management fees and expenses, brokerage commissions
and fees, the extent and timing of cash flows into and out of the Portfolio, and
changes in the securities markets and the indexes themselves, are expected to
account for any differences between the Portfolio's performance and that of the
Index.

LEHMAN BROTHERS AGGREGATE BOND INDEX. The Aggregate Bond Index is a broad
market-weighted index which encompasses three major classes of United States
investment grade fixed income securities with maturities greater than one year:
U.S. Treasury and agency securities, corporate bonds, and mortgage-backed
securities. The Index measures the total investment return (capital change plus
income) provided by a universe of fixed income securities, weighted by the
market value outstanding of each security. The securities included in the Index
generally meet the following criteria, as defined by Lehman Brothers: an
outstanding market value of at least $100 million of U.S. Government and agency
issues and $100 million for all other securities issuers; and investment grade
quality, rated a minimum of Baa by Moody's or BBB by S&P. The Bond Market
Portfolio is managed without regard to tax ramifications.

U.S. GOVERNMENT AND AGENCY SECURITIES. The Bond Index Portfolio may invest
in U.S. Government securities and securities issued or guaranteed by agencies or
instrumentalities of the U.S. Government. Securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities include U.S. Treasury
securities (Treasury Bills, Treasury Notes and Treasury Bonds); securities such
as Government National Mortgage Association pass-through certificates, which are
supported by the full faith and credit of the U.S. Treasury; securities, such as
those of the Federal Home Loan Banks, which are supported by the right of the
issuer to borrow from the U.S. Treasury; securities, such as those issued by the
Federal National Mortgage Association, which are supported by discretionary
authority of the U.S. Government to purchase certain obligations of the agency
or instrumentality; and other securities, such as those issued by the Student
Loan Marketing Association, which are supported only by the credit of the agency
or instrumentality. While the U.S. Government provides financial support to such
U.S. Government-sponsored agencies or instrumentalities, no assurance can be
given that it will always do so, since it is not so obligated by law. The Bond
Index Fund and Bond Index Portfolio, and their respective net asset values and
yields, are not guaranteed by the U.S. Government or any federal agency or
instrumentality.

The Bond Index Portfolio may, from time and time, substitute one type of
investment grade bond for another. For instance, the Bond Index Portfolio may
hold more short-term corporate bonds (and fewer short U.S. Treasury bonds) than
represented in the Aggregate Bond Index so as to increase income.

CORPORATE BONDS. The Bond Index Portfolio may purchase debt securities of
United States corporations only if they are deemed investment grade, that is,
carry a rating of at least Baa from Moody's or BBB from S&P or, if not rated by
these rating agencies, are judged by the investment managers of the Portfolio to
be of comparable quality. The Portfolio intends to dispose in an orderly manner
of any security which is downgraded below investment grade subsequent to its
purchase.

Corporate bonds are subject to call risk during periods of falling
interest rates. Securities with high stated interest rates may be prepaid (or
called) prior to maturity, requiring the Bond Index Portfolio to invest the
proceeds at generally lower interest rates. If interest rates fall and bond
issuers exercise call provisions, the result would be that bonds with high
interest rates are called and must be replaced with lower-yielding instruments.
In these circumstances, the income of the Bond Index Portfolio would decline.

MORTGAGE PASS-THROUGH AND COLLATERALIZED MORTGAGE OBLIGATIONS. The Bond
Index Portfolio may purchase mortgage and mortgage-related securities such as
pass-throughs and collateralized mortgage obligations that meet the Bond Index
Portfolio's selection criteria (collectively, "Mortgage Securities"). As a
result of its investment in Mortgage Securities, the mortgage-backed securities
in the Bond Index Portfolio may be subject to a greater degree of market
volatility as a result of unanticipated prepayments of principal. When interest
rates fall, the principal invested in mortgage-backed securities with high
interest rates may be repaid earlier than scheduled, causing principal
prepayments to be reinvested at lower interest rates and reducing the income
that the Bond Index Portfolio derives from mortgage-backed securities. In
addition, like other fixed income securities, Mortgage Securities generally
decline in price when interest rates rise.

SAMPLING AND TRADING IN THE INDEX PORTFOLIOS. The Bond Index Portfolio
[does not anticipate holding] all of the individual issues which comprise the
Aggregate Bond Index because of the large number of securities involved.
Instead, the Portfolio will hold a representative sample of securities,
selecting one or two issues to represent entire classes or types of securities
in the index. This sampling technique is expected to be an effective means of
substantially duplicating the income and capital returns provided by the index.

To reduce transaction costs, the Bond Index Portfolio's securities
holdings will not be automatically traded or re-balanced to reflect changes in
the Aggregate Bond Index or in the market values of securities held by the Bond
Index Portfolio. The Bond Index Portfolio may trade large blocks of securities.
These policies may cause a particular security to be over- or under-represented
in the Portfolio relative to its index weighting or result in its continued
ownership by the Portfolio after its deletion from the Index, thereby reducing
the correlation between the Portfolio and the Index. In addition, the Bond Index
Portfolio may omit or remove Index securities from its portfolio if the
investment managers believe the security to be insufficiently liquid or believe
the merit of the investment has been substantially impaired by extraordinary
events or financial conditions.

GENERAL MATTERS. Because the Bond Index Portfolio will seek to represent
all major sectors of the investment grade fixed income securities market, the
Bond Index Fund may be a suitable vehicle for those investors seeking ownership
in the "bond market" as a whole, without regard to particular sectors. The Bond
Index Fund is intended to be a long-term investment vehicle and is not designed
to provide investors with a means of speculating on short-term bond market
movements. Because of potential share price fluctuations, the Fund may be
inappropriate for investors who have short-term objectives or who require
stability of principal. Investors should not consider the Fund a complete
investment program.

Unless otherwise stated, all of the investment objectives, policies and
strategies discussed herein are deemed "non-fundamental", i.e., the approval of
the Fund's shareholders is not required to change its investment objective or
any of its investment policies and strategies. Likewise, the approval of the
Fund and other investors in the Bond Index Portfolio is not required to change
the Portfolio's investment objective or any of the Portfolio's investment
policies and strategies. Any changes in the Fund's or the Portfolio's investment
objective, policies or strategies could result in the Fund having investment
objectives, policies and strategies different from those applicable at the time
of a shareholder's investment in the Fund.

TRUSTEES EVALUATION AND RECOMMENDATION

At meetings of Excelsior Institutional Trust's Board of Trustees on August
29, September 13, and [October 6, 1995], the Trustees considered alternatives
available to the Bond Index Fund and determined that the proposed investment by
the Bond Index Fund of all of its investable assets in the Bond Index Portfolio,
and operating in a two-tier, master/feeder structure, was in the best interests
of the shareholders of the Fund. The Trustees' decision was based on several
factors including: (i) the expectation that the estimated expense ratios of the
Fund would be no greater than they would otherwise be if the Fund did not invest
in the Bond Index Portfolio; (ii) the expectation that other feeder funds would
invest in the Bond Index Portfolio, resulting in the cost savings associated
with a two-tier, master/feeder structure, (iii) the expectation that the Bond
Index Portfolio will have the same investment objectives, policies and
restrictions as the Fund, (iv) the expectation that the Fund would be able to
contribute all its assets, in kind, to the Bond Index Portfolio, in a tax-free
transaction, so that the Fund would not be required to recognize any gain (or
loss) on the transaction; and (v) the expected continuity of Portfolio
management resulting from the continued subadvisory services of U.S. Trust to
the Bond Index Portfolio (see parts (a) and (b) of this Proposal 3 below).

After consideration of the relevant factors, the Trustees, including the
Independent Trustees, voted to approve, and voted to recommend that the
shareholders of the Bond Index Fund approve the investment by the Fund of all of
its investable assets in the Bond Index Portfolio. Such investment is subject to
approval by the Fund of the new advisory and subadvisory agreements by the
requisite vote of the shareholders of the Fund, as more fully described in parts
(a) and (b) of this Proposal 3. If such new advisory and subadvisory agreements
are not approved by the shareholders of the Fund, the Fund will not invest its
investable assets in the Bond Index Portfolio, even if the shareholders of the
Fund approve such investment.

The conversion to a two-tier, master/feeder structure would be
accomplished by having the Fund invest in-kind its securities and other assets
in the Bond Index Portfolio.

The conversion to a two-tier, master/feeder structure is subject to the
receipt of an opinion of Bingham, Dana & Gould, counsel to the Trust,
substantially to the effect that the investment in-kind of its securities and
other assets in the Bond Index Portfolio will not cause either the Fund or its
shareholders to recognize any gain or loss under the Code, that the Bond Index
Portfolio's basis in each security invested in it will be the same as the Fund's
basis for that security, and that the Bond Index Portfolio's holding period for
each security will include the Fund's holding period for that security.

Approval by the shareholders of the Fund of this Proposal 3 will be deemed
an authorization to the Trustees and officers of the Trust to take any steps
necessary or appropriate to invest all investable assets of the Fund in the Bond
Index Portfolio.

TRUSTEE'S RECOMMENDATION

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS OF THE BOND INDEX
FUND APPROVE THE PROPOSAL TO INVEST THE FUND'S ASSETS IN THE BOND INDEX
PORTFOLIO.

If the shareholders of the Fund do not approve this Proposal 3 and each of
subparts (a), (b), (c) and (d) hereof, the Fund will continue to operate in its
existing structure and the Trustees will consider what future action to take,
including resubmission of the Proposal to shareholders at a future date.

VOTE REQUIRED

The Declaration of Trust of the Trust would permit the investment of the
Fund's assets in the Bond Index Portfolio without a shareholder vote. However,
the Trustees have decided to seek shareholder approval of the investment.
Approval of this Proposal 3 requires the affirmative vote of a majority of the
outstanding shares of the Fund represented in person or by proxy and entitled to
vote at the Meeting if a quorum is present.

(a). FOR THE BOND INDEX FUND, TO APPROVE OR DISAPPROVE
OF AN INVESTMENT ADVISORY AGREEMENT BETWEEN
FEDERATED PORTFOLIOS AND FEDERATED MANAGEMENT AS
INVESTMENT ADVISER WITH RESPECT TO THE BOND INDEX
PORTFOLIO.

GENERAL

If Proposal 3 is approved by the shareholders of the Fund, all of the
investable assets of the Fund will be invested in the Bond Index Portfolio of
the Federated Portfolios. Federated Portfolios has engaged Federated Management
as its investment adviser, pursuant to the terms of an investment advisory
agreement (the "Federated Advisory Agreement") which is substantially the
same as the Current Advisory Agreement and the temporary New Advisory Agreement
corresponding to the Bond Index Fund. Since Federated Portfolios is expected to
seek the approval by the investors in the Bond Index Portfolio (including the
Fund) of the Federated Advisory Agreement, the shareholders of the Fund are
being asked to vote on the Federated Advisory Agreement. The Trust on behalf of
the Fund will cast its votes as an investor in the Bond Index Portfolio in the
same proportions as the votes cast by the Fund's shareholders.

At a meeting of the Board of Trustees of the Trust on [October 6, 1995],
the Trustees, including the Independent Trustees, voted to recommend that the
shareholders of the Fund approve the Federated Advisory Agreement between the
Federated Portfolios on behalf of the Bond Index Portfolio and Federated
Management. The rate of the advisory fee payable pursuant to the Federated
Advisory Agreement, as recommended for approval by the shareholders of the Fund,
is identical to the rate of the advisory fees payable pursuant to each of the
Current Advisory Agreement and the New Advisory Agreement corresponding to the
Fund. See "The Advisory Fee and Other Expenses" below.

COMPARISON OF THE FEDERATED ADVISORY AGREEMENT AND THE NEW
AND CURRENT ADVISORY AGREEMENTS.

The terms and conditions of the New Advisory Agreement and Current
Advisory Agreement with respect to the above Fund are substantially the same in
all material respects to those of the Federated Advisory Agreement, with the
exception of the identity of the party contracting with the investment adviser,
which will be Federated Portfolios, the identity of the Investment Adviser,
which will be Federated Management and their effective dates and termination
dates. The terms of the form of New Advisory Agreement attached hereto as
Exhibit A are substantially the same in all material respects, with the
exceptions noted above, to the terms of the Federated Advisory Agreement, and
the discussion of the terms of the Federated Advisory Agreement is qualified in
its entirety by reference to Exhibit A.

Subject to the supervision and approval of the Board of Trustees of
Federated Portfolios, under the Federated Advisory Agreement the investment
adviser is required to: (a) prepare and evaluate statistical, financial and
economic data and other information; (b) formulate, review and administer an
investment program for the Bond Index Portfolio; (c) determine the securities to
be purchased by such Portfolio and monitor such securities to determine when to
take action with respect to such securities; (d) determine whether and how to
exercise rights with respect to such securities such as voting rights and
warrants; (e) determine the value of such securities if so requested by the
Board of Trustees of Federated Portfolios; (f) report to the officers of
Federated Portfolios and its Board of Trustees as to investment performance and
such adviser's performance under the Federated Advisory Agreement; (g) assist
the officers of Federated Portfolios in connection with the operation of
Federated Portfolios; (h) place orders for the purchase, sale or loan of
securities by Federated Portfolios; (i) provide office space, office facilities,
equipment and personnel; and (j) maintain all records concerning activities of
such investment adviser that it is required by law to maintain. Under the
Federated Advisory Agreement, the investment adviser may appoint and employ one
or more subadvisers that are satisfactory to Federated Portfolios.

The Federated Advisory Agreement will, as do the Current Advisory
Agreement and the New Advisory Agreement, provide that the investment adviser
thereunder is not liable for any act or omission connected with the rendering of
services under the Federated Advisory Agreement, or any losses that may be
sustained in the purchase, holding or sale of any security. However, the
investment adviser will be liable for a loss resulting from willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and duties
under such Agreement.

By its terms, the Federated Advisory Agreement will continue in effect for
an initial term of two years from the date of execution and for successive
annual periods thereafter, provided that the continuance is specifically
approved at least annually by a majority of the Independent Trustees of
Federated Portfolios and either (i) a vote of a 1940 Act Majority of the
Federated Portfolios' outstanding voting securities, or (ii) the vote of a
majority of the full Board of Trustees. The Federated Advisory Agreement is
terminable without penalty, (x) by Federated Portfolios on not less than 60
days' written notice by the Trustees to the investment adviser, by action of the
Board of Trustees or the vote of a majority of the Bond Index Portfolios'
outstanding voting securities, or (y) by the investment adviser on not less than
90 days' written notice by the investment advisor to Federated Portfolios. The
Federated Advisory Agreement terminates automatically in the event of its
"assignment" (as defined in the 1940 Act).

The Federated Advisory Agreement provides that the services of the
investment adviser thereunder are not exclusive and that the investment adviser
is free to render services to others so long as such person's ability to perform
its obligations under such agreement is not adversely effected.

The Federated Advisory Agreement states that it will be governed in
accordance with the laws of the Commonwealth of Massachusetts and that each
provision of such Agreement is independent of all other provisions.

Shareholders should also refer to Exhibit A for the specific terms of the
Federated Advisory Agreement.

THE ADVISORY FEE AND OTHER EXPENSES

Under the Federated Advisory Agreement, the Bond Index Fund will
indirectly pay to Federated Management, as investment adviser, a monthly fee
that is equal on an annual basis to 0.25% of the Bond Index Portfolio's average
daily net assets. THIS IS THE SAME RATE OF COMPENSATION AS IS PAYABLE INDIRECTLY
BY SUCH FUND TO THE ADVISER UNDER THE CURRENT INVESTMENT ADVISORY AGREEMENT AND
AS WILL BE PAYABLE TO THE ADVISER UNDER THE TEMPORARY NEW ADVISORY AGREEMENT.
Federated Management may voluntarily waive some or all its fee, and may
terminate any voluntary waiver at any time in its sole discretion.

During the Trust's fiscal year ended May 31, 1995, the Bond Index Fund,
through its corresponding Portfolio, indirectly paid advisory fees to U.S. Trust
Pacific of $0. The payment represented a waiver of advisory fees of $47,955 with
respect to the Bond Index Fund.

CONCERNING FEDERATED MANAGEMENT AS INVESTMENT ADVISER

Federated Management, a Delaware business trust organized on April 11,
1989, is a registered investment adviser under the Investment Advisers Act of
1940. Federated Management is an indirect, wholly owned subsidiary of Federated
Investors, a Delaware business trust which, together with its affiliates, has
approximately $70 billion in assets under management. All of the Class A shares
(voting) of Federated Investors are owned by a trust, the trustees of which are
John F. Donahue, his wife, and his son, J. Christopher Donahue; officers and
Trustees of Federated Portfolios who own Class B shares (non-voting) of
Federated Investors, their positions with Federated Investors, and the number of
shares beneficially owned by such persons are: John F. Donahue, Trustee,
Chairman and Chief Executive Officer (1,823,547); J. Christopher Donahue,
Trustee, President and Chief Operating Officer (1,051,483); Richard B. Fisher,
Trustee, Executive Vice President and Assistant Secretary (800,000); Edward C.
Gonzales, Trustee, Vice Chairman and Treasurer (400,000); John W. McGonigle,
Trustee, Executive Vice President, General Counsel and Secretary (1,000,000) and
David M. Taylor, Trustee and Senior Vice President (140,000). Federated
Management's address is Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, Pennsylvania 15222-3779.

Federated Management acts as investment adviser to 25 investment companies
with multiple portfolios or series. Federated Management currently provides
investment advisory services to no other mutual funds with similar investment
objectives to those of the Bond Index Portfolio.

Dr. Henry J. Gailliot, an officer of Federated Management and a Trustee of
Federated Investors holds approximately 20% of the outstanding common stock and
serves as a director of Commercial Data Services, Inc., a company which provides
computer data processing services to Federated Administrative Services, which is
Federated Portfolios' administrator.

BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS

During the Trust's fiscal year ended May 31, 1995, the above Fund paid no
brokerage commissions to brokers affiliated with Federated Management.

OTHER MATERIAL PAYMENTS BY THE FUND TO FEDERATED
MANAGEMENT AND AFFILIATES OF FEDERATED MANAGEMENT.

During the Trust's fiscal year ended May 31, 1995, neither the Fund nor
the Bond Market Portfolio nor the Bond Index Portfolio made any payments to
Federated Management or any affiliate of Federated Management for services
provided to the Fund, the Bond Market Portfolio or the Bond Index Portfolio.

THE DIRECTORS OF FEDERATED MANAGEMENT

The following table lists the name, current position with Federated
Management, addresses and principal occupation of each Trustee and of the
principal executive officers of Federated Management.

Position with Federated
Name Address Management; Principal Occupation

John F. Donahue Federated Investors Trustee and Chairman;
Tower Chairman and Trustee,
Pittsburgh, PA Federated Investors.

J. Christopher Federated Investors Trustee; President and
Donahue Tower Trustee, Federated Investors.
Pittsburgh, PA

John W. McGonigle Federated Investors Tower Trustee; Executive Vice
Pittsburgh, PA President, Secretary,
General Counsel, and
Trustee, Federated Investors.

Mark D. Olson Wilson, Halbrook & Bayard Trustee; Partner, Wilson
107 W. Market Street Halbrook & Bayard (law firm).
Georgetown, Delaware 19947

TRUSTEES' EVALUATION AND RECOMMENDATION

At the meeting of the Board of Trustees on [October 6, 1995], the
Trustees, including the Independent Trustees, voted to recommend that the
shareholders of the Fund approve the Federated Advisory Agreement. In making
this recommendation, the Trustees considered several factors, including the
nature, quality and scope of the services to be provided to the Bond Index
Portfolio and the investment record of Federated Management and the other mutual
funds managed by Federated Management.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE FUND'S SHAREHOLDERS APPROVE THE
FEDERATED ADVISORY AGREEMENT.

If the Federated Advisory Agreement with respect to Bond Index Portfolio
is not approved by the shareholders of the Bond Index Fund, the Trustees will
not authorize the investment by the Fund of its investable assets in the Bond
Index Portfolio as described in Proposal 3, regardless of the fact that Proposal
3 may have been approved by the shareholders of such Fund.

VOTE REQUIRED

Approval of this subpart (a) of Proposal 3 with respect to the Bond Index
Fund requires the affirmative vote of a 1940 Act Majority (as defined in part
(a) of Proposal 2 above) of outstanding voting securities of the Fund.

(b). FOR THE BOND INDEX FUND, TO APPROVE OR DISAPPROVE
OF AN INVESTMENT SUBADVISORY AGREEMENT BETWEEN
FEDERATED MANAGEMENT AND U.S. TRUST AS INVESTMENT
SUBADVISER WITH RESPECT TO THE BOND INDEX
PORTFOLIO.

GENERAL

Federated Management has proposed delegating certain of its investment
advisory duties to U.S. Trust as investment subadviser pursuant to the terms of
an investment subadvisory agreement with U.S. Trust (the "UST Subadvisory
Agreement") which currently serves as subadviser to the Bond Market Portfolio
pursuant to the Current Subadvisory Agreement. It is anticipated that the person
at U.S. Trust primarily responsible for the day-to-day provision of subadvisory
services to the Bond Index Portfolio will be _______________________, who
currently fills such role with respect to the Bond Market Portfolio. Since
Federated Portfolios is expected to seek the approval by the investors in the
Bond Index Portfolio (including the Fund) of the UST Subadvisory Agreement, the
shareholders of the Fund are being asked to vote on the UST Subadvisory
Agreement. The Trust on behalf of the Fund will cast its votes as an investor in
the Bond Index Portfolio in the same proportions as the votes cast by the Fund's
shareholders.

At a meeting of the Board of Trustees of the Trust on [October 6, 1995],
the Trustees, including the Independent Trustees, voted to recommend that the
shareholders of the Fund approve the UST Subadvisory Agreement between Federated
Management and U.S. Trust. The rate of the advisory fee in the UST Subadvisory
Agreement, as approved by the Trustees and recommended for approval by the
shareholders of the Fund, is identical to the rate of the advisory fees charged
in each of the Current Subadvisory Agreement and the temporary New Subadvisory
Agreement corresponding to the Fund. See "The Advisory Fee and Other Expenses"
below.

COMPARISON OF THE UST SUBADVISORY AGREEMENT AND THE NEW AND
CURRENT SUBADVISORY AGREEMENTS.

The terms and conditions of the New Subadvisory Agreement and Current
Subadvisory Agreement corresponding to the above Fund are substantially the same
in all material respects as those of the UST Subadvisory Agreement, with the
exception of the advisory fee (as more fully discussed below), the identity of
the investment adviser, which will be Federated Management, and the effective
dates and termination dates. The terms of the form of New Subadvisory Agreement
attached hereto as Exhibit B are substantially the same in all material
respects, with the exception noted above, to the terms of the UST Subadvisory
Agreement, and the discussion of the terms of the UST Subadvisory Agreement is
qualified in its entirety by reference to Exhibit B.

Subject to the supervision and approval of the Board of Trustees of
Federated Portfolios, under the UST Subadvisory Agreement the investment
subadviser is required to: (a) prepare and evaluate statistical, financial and
economic data and other information; (b) formulate, review and administer an
investment program for the Bond Index Portfolio; (c) determine the securities to
be purchased by such Portfolio and monitor such securities to determine when to
take action with respect to such securities; (d) determine whether and how to
exercise rights with respect to such securities such as voting rights and
warrants; (e) determine the value of such securities if so requested by the
Board of Trustees of Federated Portfolios; (f) report to the officers of
Federated Portfolios and its Board of Trustees as to investment performance and
such subadviser's performance under the UST Subadvisory Agreement; (g) assist
the officers of Federated Portfolios in connection with the operation of
Federated Portfolios; (h) place orders for the purchase, sale or loan of
securities by Federated Portfolios; (i) provide office space, office facilities,
equipment and personnel; and (j) maintain all records concerning activities of
such investment subadviser that it is required by law to maintain.

The UST Subadvisory Agreement will, as do the Current Subadvisory
Agreement and the New Subadvisory Agreement, provide that the investment
subadviser thereunder is not liable for any act or omission connected with the
rendering of services under the UST Subadvisory Agreement, or any losses that
may be sustained in the purchase, holding or sale of any security. However, the
investment subadviser will be liable for a loss resulting from willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties under such Agreement. Furthermore, the UST Subadvisory
Agreement will, as do the Current Subadvisory Agreement and the New Subadvisory
Agreement, provide that the investment subadviser thereunder is not liable for
errors of judgment, mistakes, acts or omissions of the investment adviser.

By its terms, the UST Subadvisory Agreement will continue in effect for an
initial term of two years from the date of execution and for successive annual
periods thereafter, provided that the continuance is specifically approved at
least annually by a majority of the Independent Trustees of Federated Portfolios
and either (i) a vote of a 1940 Act Majority of the Bond Index Portfolios'
outstanding voting securities, or (ii) the vote of a majority of the full Board
of Trustees. The UST Subadvisory Agreement is terminable without penalty, (x) by
Federated Portfolios on not less than 60 days' written notice by the Trustees to
the investment subadviser, by action of the Board of Trustees or the vote of a
majority of the Bond Index Portfolios' outstanding voting securities, (y) by the
investment adviser on not less than 60 days' written notice from the investment
adviser to the investment subadviser, or (z) by the investment subadviser on not
less than 90 days' written notice by the investment subadviser to the investment
adviser and Federated Portfolios. The UST Subadvisory Agreement terminates
automatically in the event of its "assignment" (as defined in the 1940 Act).

The UST Subadvisory Agreement provides that the services of the investment
subadviser thereunder are not exclusive and that the investment subadviser is
free to render services to others so long as such person's ability to perform
its obligations under such agreement is not adversely effected.

The UST Subadvisory Agreement states that it will be governed in
accordance with the laws of the Commonwealth of Massachusetts and that each
provision of such Agreement is independent of all other provisions.

Shareholders should also refer to Exhibit B for the specific terms of the
UST Subadvisory Agreement.

THE ADVISORY FEE AND OTHER EXPENSES

Under the UST Subadvisory Agreement, Federated Management will directly pay
to U.S. Trust, as investment subadviser, a monthly fee that is equal on an
annual basis to 0.25% of the Bond Index Portfolio's average daily net assets.
THIS IS THE SAME RATE OF COMPENSATION AS IS PAYABLE BY U.S. TRUST PACIFIC TO
U.S. TRUST UNDER THE CURRENT SUBADVISORY AGREEMENT AND AS WILL BE PAYABLE BY
U.S. TRUST PACIFIC TO U.S. TRUST UNDER THE TEMPORARY NEW SUBADVISORY AGREEMENT
CORRESPONDING TO THE FUND.

CONCERNING U.S. TRUST AS INVESTMENT SUBADVISER

See "Concerning U.S. Trust as Investment Adviser" in
part (a) of Proposal 2 above.

U.S. Trust provides investment advisory services to other mutual funds
with a similar investment objective to that of the above Fund. See Exhibit C for
a list of those funds, the size of those funds, the rate of the advisory fees
paid by those funds and whether any of such fees have been waived or otherwise
reduced.

Please refer to "Other General Matters" in Proposal 2 above for
information concerning the Glass-Steagall Act and U.S. Trust's deposit, loan and
other commercial banking relationships and how such matters may effect U.S.
Trust in its capacity as investment subadviser.

BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS AND OTHER
FEES.

During the Trust's fiscal year ended May 31, 1995, the above Fund did not
pay brokerage commissions to brokers affiliated with U. S. Trust. For a
description of other fees paid by the Fund to U.S. Trust, see "Material Payments
by the Funds to U.S. Trust or U.S. Trust Pacific and their Affiliates" in
Proposal 2 above.

THE DIRECTORS OF U.S. TRUST

See "The Directors of U.S. Trust" in part (a) of Proposal 2 above.

TRUSTEES' EVALUATION AND RECOMMENDATION

At the meeting of the Board of Trustees on [October 6, 1995], the
Trustees, including the Independent Trustees, recommended that the shareholders
of the Fund approve the UST Subadvisory Agreement with respect to the Bond Index
Portfolio. In making this recommendation, the Trustees considered several
factors, including the nature, quality and scope of the services to be provided
to the Bond Index Portfolio and the investment record of U.S. Trust in managing
the Bond Market Portfolio and the other mutual funds managed by U.S. Trust. The
Trustees also considered that U.S. Trust's relationship with the Bond Index
Portfolio will provide continuity of portfolio management services to the Fund.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE FUND'S SHAREHOLDERS APPROVE THE
UST SUBADVISORY AGREEMENT WITH RESPECT TO THE BOND INDEX PORTFOLIO.

If the UST Subadvisory Agreement with respect to the Bond Index Portfolio
is not approved, the Trustees will not authorize the investment by the Fund of
its investable assets in the Bond Index Portfolio as described in Proposal 3,
regardless of the fact that Proposal 3 and subpart (a) of Proposal 3 may have
been approved by the shareholders of the Fund.

VOTE REQUIRED

Approval of this part (b) of Proposal 3 requires the affirmative vote of a
1940 Act Majority (as defined in part (a) of Proposal 2 above) of outstanding
voting securities of the Bond Index Fund.

(c). FOR THE BOND INDEX FUND TO AUTHORIZE THE ELECTION
OF TRUSTEES OF FEDERATED PORTFOLIOS

Since Federated Portfolios is expected to seek the approval of its
investors (including the Fund) to elect a Board of Trustees of Federated
Portfolios, the shareholders of the Fund are being asked to vote on the proposed
Board of Trustees. The Trust on behalf of the Fund will cast its votes as an
investor in Federated Portfolios in the same proportions as the votes cast by
the Funds' shareholders. It is intended that proxies submitted by shareholders
of the above Fund not limited to the contrary will be used for the purpose of
authorizing the Trust to vote for the election of the twelve nominees named
below as Trustees of Federated Portfolios.

Each nominee has consented to serve as a trustee if elected. If a
designated nominee declines or otherwise becomes unavailable for election,
however, the proxy confers discretionary power on the persons named therein to
authorize the Trust to vote in favor of a substitute nominee or nominees.

If elected, a Trustee will hold office without limit in time, subject to
resignation, retirement or removal. In case a vacancy shall exist for any
reason, the remaining Trustees may fill the vacancy by appointing another
Trustee, provided that after filling the vacancy at least two-thirds of the
Trustees have been elected by shareholders. If at any time less than a majority
of the Trustees holding office have been elected by shareholders, the Trustees
then in office will call a shareholders' meeting for the purpose of electing
Trustees.

The following table lists the name, age, current position with Federated
Portfolios, if any, and principal occupation during the past five years of each
nominee and of the executive officers of Federated Portfolios. Nominees who are
"interested persons" (as defined in the 1940 Act) of Federated Portfolios are
indicated by an asterisk. As the Federated Portfolios is a newly created
investment company, each nominee for election has not served before as a Trustee
of the Federated Portfolios. However, each nominee currently serves as a Trustee
of one or more other investment companies within the Federated Fund Complex
(as defined below). The table also lists the number of shares of the Fund or
the Bond Index Portfolio owned beneficially by such Trustee and by the executive
officers of Federated Portfolios, and the percentage of total outstanding shares
of the Fund or the Bond Index Portfolio owned by such Trustee and by the
executive officers of Federated Portfolios.

<PAGE>

<TABLE>
<CAPTION>
Position with Federated Shares of Fund or the
Portfolios; Principal Bond Index Portfolio
Occupation During Owned; Percentage of
Name and Age Address: Past Five Years Outstanding Shares

NOMINEES TO
BECOME TRUSTEES
OF FEDERATED
PORTFOLIOS
<S> <C> <C> <C>
John F. Donahue* Federated Trustee (Pending); None
Age 71 Investors Tower Chairman of the
Pittsburgh, PA Board of Federated
Portfolios; Chairman
and Trustee,
Federated Investors,
Federated Advisers,
Federated
Management; Chairman
and Director,
Federated Research
Corp. and Federated
Global Research
Corp.; Chairman,
Passport Research,
Ltd.; Chief
Executive Officer
and Director,
Trustee or Managing
General Partner of
74 investment
companies for which
subsidiaries of
Federated Investors
serve as investment
adviser,
administrator and/or
distributor (the
"Federated Fund
Complex"). Mr.
Donahue is the
father of J.
Christopher Donahue,
President of
Federated Portfolios.

Thomas G. Bigley 28th Floor, One Trustee (Pending); None
Age 61 Oxford Centre Director, Ober
Pittsburgh, PA Manufacturing Co.;
Chairman of the
Board, Children's
Hospital of
Pittsburgh;
Director, Trustee,
or Managing General
Partner of 74
investment companies
within the Federated
Fund Complex;
formerly, Senior
Partner, Ernst &
Young LLP.

John T. Conroy, Wood/IPC Trustee (Pending); None
Jr. Commercial President,
Age 58 Department Investment
John R. Wood Properties
and Associates Corporation; Senior
Inc., Realtors Vice President, John
3255 Tamiami R. Wood and
Trail North Associates, Inc.,
Naples, FL Realtors; President,
Northgate Village
Development Corporation;
Partner or Trustee in
private real estate
ventures in Southwest
Florida; Director,
Trustee, or Managing
General Partner of 74
investment companies
within the Federated
Fund Complex; formerly,
President, Naples
Property Management, Inc.

William J. One PNC Plaza Trustee (Pending); None
Copeland - 23rd Floor Director and member
Age 77 Pittsburgh, PA of the Executive
Committee, Michael
Baker, Inc.; Director,
Trustee or Managing
General Partner of 74
investment companies
within the Federated
Fund Complex; formerly,
Vice Chairman and
Director, PNC Bank, N.A.,
and PNC Bank Corp.
and Director, Ryan Homes, Inc.

James E. Dowd 571 Hayward Trustee (Pending); None
Age 73 Mill Road Attorney-at-law;
Concord, Ma Director, The
Emerging Germany
Fund, Inc.,
Director, Trustee,
or Managing General
Partner of 74
investment companies
within the Federated
Fund Complex.

Lawrence D. 3471 Fifth Trustee (Pending); None
Ellis, M.D.* Avenue, Suite Professor of
Age 62 1111 Medicine and Member,
Pittsburgh, Pa Board of Trustees,
University of
Pittsburgh Medical
Center - Downtown;
Member, Board of
Directors,
University of
Pittsburgh Medical
Center; formerly
Hematologist,
Oncologist, and
Internist,
Presbyterian and
Montefore Hospitals;
Director, Trustee,
or Managing General
Partner of 74
investment companies
within the Federated
Fund Complex.

Edward L. Henny, Trustee (Pending); None
Flaherty, Jr. Kochuba, Meyer Attorney-at-law;
Age 71 and Flaherty Shareholder, Henny,
Two Gateway Kochuba, Meyer and
Center - Suite Flaherty; Director,
674 Eat'N Park
Pittsburgh, PA Restaurants, Inc.,
and Statewide Settlement
Agency, Inc.;
Director, Trustee, or
Managing General
Partner of 74 investment
companies within the
Federated Fund Complex;
formerly, Counsel,
Horizon Financial, F.A.,
Western Region.

Peter E. Madden 70 Westcliff Trustee (Pending); None
Age 53 Road Consultant; State
Weston, MA Representative,
Commonwealth of
Massachusetts;
Director, Trustee,
or Managing General
Partner of 74
investment companies
within the Federated
Fund Complex;
formerly President,
State Street Bank
and Trust Company
and State Street
Boston Corporation.

Gregor F. Meyer Henny, Trustee (Pending); None
Age 68 Kochuba, Meyer Attorney-at-law;
and Flaherty Shareholder, Henny,
Two Gateway Kochuba, Meyer and
Center Suite Flaherty; Chairman,
674 Meritcar, Inc.;
Pittsburgh, PA Director, Eat'N Park
Restaurants, Inc.;
Director, Trustee or
Managing General Partner
of 74 investment companies
within the
Federated Fund Complex.

John E. Murray, President Trustee (Pending); None
Jr., J.D., S.J.D. Duquesne President, Law
Age 62 University Professor, Duquesne
Pittsburgh, PA University;
Consulting Partner,
Molica, Murray and
Hogue; Director,
Trustee or Managing
General Partner of
74 investment
companies within the
Federated Fund
Complex.

Wesley W. Posvar 1202 Cathedral Trustee (Pending); None
Age 70 of Learning Professor,
University of International
Pittsburgh Politics and
Pittsburgh, PA Management
Consultant; Trustee,
Carneige Endowment for
International Peace,
RAND Corporation, Online
Computer Library
Center, Inc., and U.S.
Space Foundation;
Chairman, Czecho Management
Center; Director,
Trustee or Managing
General Partner of 74
investment companies within
the Federated
Fund Complex; President
Emeritus, University
of Pittsburgh, founding
Chairman, National
Advisory Council for
Environmental Policy and
Technology and Federal
Emergency Management
Advisory Board.

Marjorie P. Smuts 4905 Bayard Trustee (Pending); None
Age 60 Street Public
Pittsburgh, PA relations/marketing
consultant;
Conference
Coordinator,
Non-profit entities;
Director, Trustee,
or Managing General
Partner of 74
investment companies
within the Federated
Fund Complex.

EXECUTIVE
OFFICERS OF
FEDERATED
PORTFOLIOS

J. Christopher Federated President; President None
Donahue Investors Tower and Trustee,
Age 46 Pittsburgh, PA Federated Investors,
Federated Advisers,
Federated Management
and Federated
Research; President
and Director,
Federated Research
Corp. and Federated
Global Research
Corp.; President,
Passport Research,
Ltd.; Trustee,
Federated
Administrative
Services, Federated
Services Company,
and Federated
Shareholder
Services; President
or Executive Vice
President of the
Funds; Director,
Trustee, or Managing
General Partner of
certain investment
companies within the
Federated Fund
Complex. Mr.
Donahue is the son
of John F. Donahue,
Chairman of
Federated Portfolios

Richard B. Fisher Federated Vice President; None
Age 72 Investors Tower Executive Vice
Pittsburgh, PA President and
Trustee, Federated
Investors; Chairman
and Director,
Federated Securities
Corp.; President or
Vice President of
some of the Funds;
Director or Trustee
of certain
investment companies
within the Federated
Fund Complex.

Edward C. Gonzalez Federated Executive Vice None
Age 64 Investors Tower President; Vice
Pittsburgh, PA Chairman, Treasurer,
and Trustee,
Federated Investors;
Vice President,
Federated Advisers,
Federated
Management,
Federated Research,
Federated Research
Corp., Federal
Global Research
Corp. and Passport
Research Ltd.;
Executive Vice
President and
Director, Federated
Securities Corp.;
Trustee, Federated
Services Company,
Chairman, Treasurer,
and Trustee,
Federated
Administrative
Services; Trustee or
Director of certain
investment companies
within the Federated
Fund Complex;
Executive Vice
President and
Treasurer of 74
investment companies
within the Federated
Fund Complex.

John W. McGonigle Federated Executive Vice None
Age 56 Investors Tower President and
Pittsburgh, PA Secretary; Executive
Vice President,
Secretary, General
Counsel, and
Trustee, Federated
Investors; Trustee,
Federated Advisers,
Federated
Management,
Research, Director,
Federated Research
Corp., Federal
Global Research
Corp. Trustee,
Federated Services
Company; Executive
Vice President,
Secretary, and
Trustee, Federated
Administrative
Services; President
and Trustee
Federated
Shareholder
Services; Director,
Federated Securities
Corp.; Executive
Vice President and
Secretary of 74
investment companies
within the Federated
Fund Complex.

David M. Taylor Federated Treasurer; Senior None
Age 48 Investors Tower Vice President,
Pittsburgh, PA Controller, and
Trustee, Federated
Investors;
Controller,
Federated Advisers,
Federated
Management,
Federated Research,
Federated Research
Corp., and Passport
Research Ltd.; Vice
President, Federated
Shareholder Service;
Senior Vice
President, Federated
Administrative
Services; Treasurer
of certain
investment companies
within the Federated
Fund Complex.
</TABLE>
*These Trustees are deemed to be "interested persons" as defined in the
1940 Act since Mr. Donahue is a trustee of Federated Portfolio's investment
adviser, Federated Management, and Mr. Ellis' son-in-law is an employee of
Federated Securities Corp., which is the placement agent for
Federated Portfolios.

Certain Trustees and Officers of Federated Portfolios own Class B shares
(non-voting) of Federated Investors, in the amounts set forth under "Concerning
Federated Management as Investment Advisor" in subpart (a) of this Proposal 3
above.

Federated Portfolios has a standing Audit Committee which is expected to
consist of Messrs. Conroy, Copeland, Dowd and Flaherty, all of whom are Trustees
and are not Interested Persons. The functions of the Audit Committee are to
assist the Board in fulfilling its duties relating to Federated Portfolios'
accounting and financial reporting practices and to serve as a direct line of
communication between the Board and the independent auditors. The specific
functions of the Audit Committee include recommending the engagement or
retention of the independent auditors, reviewing with the independent auditors
the plan and the results of the auditing engagement, approving professional
services provided by the independent auditors prior to the performance of such
services, considering the range of audit and non-audit fees, reviewing the
independence of the independent auditors, reviewing the scope and results of
Federated Portfolios' procedures for internal auditing, and reviewing Federated
Portfolios' system of internal accounting controls.

Federated Portfolios also has an Executive Committee,
which is expected to consist of Messrs. John F. Donahue and
Flaherty. The Executive Committee handles the
responsibilities of the Board of Trustees between meetings
of the Board.

[Describe any purchase or sale by any Trustee, nominee or executive
officer of Federated Portfolios of securities of any investment adviser or
subadviser to the Fund or the Bond Index Portfolio since the beginning of
Federated Portfolios' fiscal year ending May 31, 1995] [Item 22(a)(3)(v)]

The Declaration of Trust of Federated Portfolios provides that Federated
Portfolios will indemnify its trustees and officers against liabilities and
expenses incurred in connection with litigation in which they may be involved
because of the their offices with Federated Portfolios unless it is finally
adjudicated that they engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in their offices, or
unless it is finally adjudicated that they did not act in good faith in the
reasonable believe that their actions were in the best interests of Federated
Portfolios. In the case of settlement, such indemnification will not be provided
unless it has been determined by a court or other body approving the settlement
or other disposition, or by a reasonable determination, based upon a review of
readily available facts, by vote of a majority of disinterested trustees, or in
a written opinion of independent counsel, that such officers or trustees have
not engaged in willful misfeasance, bad faith, gross negligence or reckless
disregard of their duties.

The following table describes the compensation paid during the year ending
August 31, 1995 to each nominee to the Board of Trustees of Federated
Portfolios.
<TABLE>
COMPENSATION TABLE
<CAPTION>
Pension or
Retirement Total Compensation
Aggregate Benefits Accrued Estimated Annual from Trust and
Compensation as Part of Trust Benefits Upon Fund Complex Paid
Name of Person from Trust Expenses Retirement to Trustees

<S> <C> <C> <C> <C>
John F. Donahue None None None $0
Thomas G. Bigley None None None $20,688
John T. Conroy, Jr. None None None $117,202
William J. Copeland None None None $117,202
James E. Dowd None None None $117,202
Lawrence D. Ellis, M.D. None None None $106,460
Edward L. Flaherty, Jr. None None None $117,202
Peter E. Madden None None None $90,563
Gregor F. Meyer None None None $106,460
John E. Murray, Jr. None None None $0
Wesley W. Posvar None None None $106,460
Marjorie P. Smuts None None None $106,460

</TABLE>
As used in the above compensation table, the term "Fund Complex" shall
collectively refer to Federated Portfolios and certain other mutual funds for
which subsidiaries of Federated Investors serve as investment adviser,
administrator and/or distributor. Federated Portfolios has no pension plan. It
is expected that each of the Trustees who is not an "interested person" will not
receive compensation from the Federated Portfolios for service as Trustees
during the first fiscal year of the Federated Portfolios, and thereafter shall
be paid such amounts as shall be fixed by the Board of Trustees of Federated
Portfolios.

REQUIRED VOTE

The election of each nominee as a Trustee of Federated Portfolios will
require the vote of a plurality of the aggregate votes cast by all of the
investors in Federated Portfolios.

THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT THE SHAREHOLDERS OF THE
FUND VOTE TO AUTHORIZE THE TRUST TO VOTE FOR EACH OF THE NOMINEES FOR TRUSTEE OF
FEDERATED PORTFOLIOS.

(e). FOR THE BOND INDEX FUND, TO AUTHORIZE THE TRUST TO
VOTE TO APPROVE OR DISAPPROVE THE SELECTION OF
ERNST & YOUNG LLP AS THE INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS OF FEDERATED PORTFOLIOS

Since Federated Portfolios is expected to ask investors (including the above
Fund) to ratify the selection of Ernst & Young LLP as the independent certified
public accountants of Federated Portfolios, the shareholders of the Fund are
being asked to vote on the proposed accountants. The Trust on behalf of the Fund
will cast its votes as an investor in Federated Portfolios in the same
proportion as the votes cast by the Fund's shareholders. It is intended that
proxies submitted by shareholders of the Bond Index Fund not limited to the
contrary will be used for the purpose of authorizing the Trust to vote in favor
of ratifying the selection, under Section 32(a) of the 1940 Act, by a majority
of the Independent Trustees of Federated Portfolios, of Ernst & Young LLP as
independent public accountants, to certify every financial statement of each
series of Federated Portfolios (including the Bond Index Portfolio) required by
any law or regulation to be certified by independent public accountants and
filed with the SEC in respect of all or any part of the fiscal year of such
series ending May 31, 1996. Ernst & Young LLP has no direct or material indirect
interest in any of the series of Federated Portfolios.

Representatives of Ernst & Young LLP are not expected to be present at the
Meeting.

REQUIRED VOTE

Ratification of the selection of Ernst & Young LLP as the independent
certified public accountants of Federated Portfolios will require a majority of
the aggregate votes cast by all investors in Federated Portfolios.

THE BOARD OF TRUSTEE OF THE TRUST RECOMMENDS THAT THE SHAREHOLDERS OF THE
FUND VOTE TO AUTHORIZE THE TRUST TO VOTE FOR RATIFICATION OF THE SELECTION OF
ERNST & YOUNG LLP FOR FEDERATED PORTFOLIOS AT THE MEETING OF THE INVESTORS IN
FEDERATED PORTFOLIOS.

PROPOSAL 4. ALL FUNDS

ELECTION OF TRUSTEES OF THE TRUST

It is intended that proxies submitted by shareholders of the Funds not
limited to the contrary will be voted in favor of the election of the nominees
named below as Trustees of the Trust, to be effective upon the consummation of
the restructuring described more fully under Proposal 2 above.

Rodman L. Drake, W. Wallace McDowell, and Jonathan Piel are currently
Trustees of the Trust. Each of the other nominees currently serves as a Director
of the Master Funds. As explained more fully under Proposal 1, as part of the
closer alignment of the Funds with the Master Funds, the Trustees of the Trust
have nominated for election those individuals that serve as Directors of the
Master Funds, and it is anticipated that the current Trustees of the Trust will
likewise be nominated for election to the Board of Directors of the Master
Funds. Each nominee has consented to serve as a trustee if elected. If a
designated nominee declines or otherwise becomes unavailable for election,
however, the proxy confers discretionary power on the persons named therein to
vote in favor of a substitute nominee or nominees.

The following table lists the name, age, current position with the Trust,
if any, and principal occupation during the past five years of each nominee and
of the executive officers of the Trust. Nominees who are "interested persons"
(as defined in the 1940 Act) of the Funds are indicated by an asterisk. The
table also lists the year in which each nominee first became a Trustee, the
number of shares of each Fund owned beneficially by such Trustee and by the
executive officers of the Trust, and the percentage of total outstanding shares
of such Fund owned by such Trustee and by the executive officers of the Trust.

<PAGE>

<TABLE>
<CAPTION>
Shares of Each Fund
Owned Beneficially
and Percentage of
Name, Age and Year Position with Trust; Principal Occupation Total Outstanding
First Became a Trustee During Past Five Years; Address Shares of Such Fund

NOMINEES TO BECOME TRUSTEES OF THE TRUST
<S> <C> <C>
RODMAN L. DRAKE Trustee; Director, Parsons None
Age 52 Brinkerhoff, Inc., (engineering
1994 firm) (since 1995); President,
R.L. Drake & Co. Inc.
(investment and consulting firm)
(since 1991); Trustee, Hyperion
Total Return Fund, Inc., and
three other closed-end funds for
which Hyperion Capital
Management, Inc. is the
investment adviser; Co-Chairman,
KMR Power Corporation (power
plants) (since 1993); Chairman,
Car Rental Systems do Brasil
S.A. (Hertz licensee for Brazil)
(since 1994); Managing Director
and Chief Executive Officer,
Cresap, McCormick & Paget, Inc.
(subsequently, Cresap, a Towers
Perrin Company) (from 1980 to
1990); Director, Alex, Brown &
Sons Inc. (1989 to 1991);
Director, Mueller Industries,
Inc. (1992 to 1994). His
address is c/o KMR Power Corp.,
30 Rockefeller Plaza, Suite
5425, New York, NY 10112.

W. WALLACE MCDOWELL, Jr. Trustee; Private Investor (since None
Age 59 1993); Managing Director, Morgan
1994 Lewis Githens & Ahn (1991 to
1993); Chairman and Chief
Executive Officer, The Prospect
Group, Inc. (1983 to 1990) and
Director, U.S. Homecare
Corporation (since 1992),
Grossmans, Inc. (since 1993),
Children's Discovery Centers
(since 1994), Interactive
Technologies, Inc. (since 1992)
and Jack Morton Productions
(since 1987). His address is c/o
Prospect Capital Corporation, 43
Arch Street, Greenwich,
Connecticut 06830.

JONATHAN PIEL Trustee; President and Editor, None
Age 57 Scientific American, Inc. (1969
1994 to 1994); Director, Group for The
South Fork, Bridgehampton, New York
(since October 1993); Member,
Advisory Committee, Knight
Journalism Fellowships, MIT. His
address is 558 East 87th Street,
New York, NY 10128.

ALFRED C. TANNACHION* Retired; Chairman of the Board, None
Age 69 President, Treasurer and
Director, UST Master Funds, Inc.
(since 1985), UST Master Tax
Exempt Funds, Inc. (since 1985)
and UST Master Variable Series,
Inc. (since 1994). His address
is 1135 Hyde Park Court, Mahwah,
NJ 07430.

DONALD L. CAMPBELL Retired; Director, UST Master None
Age 69 Funds, Inc. (since 1990); UST
Master Tax Exempt Funds, Inc.
(since 1990); Master Variable
Series Inc. (since 1994); Senior
Vice President, Royal Insurance
Company, Inc., until August,
1989; Director, Royal Life
Insurance Co. of N.Y. (since
1990). His address is 333 E.
69th Street #10-M, New York, NY
10021-5559

JOSEPH H. DUGAN Retired; Director, UST Master None
Age 70 Funds, Inc. (since 1984); UST
Master Tax Exempt Funds, Inc.
(since 1984); UST Master Variable
Series, Inc. (since 1994);
President, CEO and Director, L.B.
Foster Company (tubular
products), (1987 to 1990). His
address is 913 Franklin Lake
Road, Franklin Lakes, NJ 07417.

WOLFE J. FRANKL Director, UST Master Funds, Inc. None
Age 74 (since 1986); UST Master Tax
Exempt Funds, Inc. (since 1986);
UST Master Variable Series, Inc.
(since 1994); Director, Deutsche
Bank Financial, Inc. (since
1989); Director, The Harbus
Corporation (since 1951);
Trustee, Mariner Funds Trust
(since 1988). His address is 40
Gooseneck Lane, Charlottesville,
VA 22903.

ROBERT A. ROBINSON President Emeritus, The Church None
Age 70 Pension Fund and its affiliated
companies, since 1991, President
and Director, 1989-91; Trustee,
The Mariner Funds and The Mariner
Tax-Exempt Funds since 1989;
Director, UST Master Funds, Inc.
and UST Tax-Exempt Master Funds,
Inc. (since 1989); Trustee, UST
Master Variable Series, Inc.
since 1994; Trustee, H.B. and
F.H. Bugher Foundation; Director,
Morehouse Publishing Co. since
1989; Director, Fenrir, Inc.
since 1993. His address is 2
Hathaway Common, 117 South
Avenue, New Canaan, CT 06840.

CURRENT EXECUTIVE OFFICERS OF THE TRUST

PHILIP W. COOLIDGE President of the Trust and
Age 44 Trustee; Chairman, Chief
Executive Officer and President,
Signature Financial Group, Inc.
(since December 1988); Chairman,
Chief Executive Officer and
President, Signature Financial
Services, Inc. (since May 1993).

JOHN ELDER Treasurer; Vice President,
Age 47 Signature Financial Group, Inc.
(since April 1995); Treasurer,
Phoenix Family of Mutual Funds
(1983 to 1995).

LINDA T. GIBSON Assistant Secretary; Legal
Age 30 Counsel, Signature Financial
Group, Inc. (since June 1991);
Assistant Secretary, Signature
Financial Services, Inc. (since
May 1993); law student, Boston
University School of Law (from
September 1989 to May 1992);
Product Manager, SFG
(January 1989 to September 1989).

THOMAS M. LENZ Secretary; Vice President and
Age 37 Associate General Counsel,
Signature Financial Group, Inc.
(since November 1989); Assistant
Secretary, Signature Financial
Services, Inc. (since May 1993);
Attorney, Ropes & Gray (September
1984 to November 1989).

MOLLY S. MUGLER Assistant Secretary; Legal
Age 44 Counsel, Signature Financial
Group, Inc. (since December
1988); Assistant Secretary,
Signature Financial Services,
Inc. (since May 1993).

BARBARA M. O'DETTE Assistant Treasurer; Assistant
Age 36 Treasurer, Signature Financial
Group, Inc. (since December 1988)
and Signature Financial Services,
Inc. (since May 1993).

ANDRES E. SALDANA Assistant Secretary; Legal
Age 32 Counsel, Signature Financial
Group, Inc. (since November
1992); Assistant Secretary,
Signature Financial Services,
Inc. (since May 1993); Attorney,
Ropes & Gray (law firm)
(September 1990 to November
1992); law student, Yale Law
School (September 1987 to May
1990).

The Trust has a standing Audit Committee presently consisting of Messrs.
Drake, McDowell and Piel, all of whom are Trustees and are not Interested
Persons. The Audit Committee reviews the scope and results of each Fund's annual
audit with such Fund's independent accountants and recommends the engagement of
accountants. The trust also has a Nominating Committee presently consisting of
Messrs. Drake, McDowell and Piel. The Nominating Committee selects and nominates
persons to serve as Trustees (other than Trustees who are "interested persons").
The Nominating Committee is prepared to review nominations from shareholders, to
fill vacancies on the Board of Trustees in written communications addressed to
the Nominating Committee at the Trust's offices, although the Nominating
Committee expects to be able to identify from its own resources an ample number
of qualified candidates.

All of the incumbent Trustees of the Trust attended 75% or more of the
Board and committee meetings of the Trust that were held during the Trust's last
fiscal year. During the Trust's last fiscal year, there were 6 meetings of the
Board of Trustees.

The Trust Instrument of the Trust provides that the Trust will indemnify
its trustees and officers against liabilities and expenses incurred in
connection with litigation in which they may be involved because of the their
offices with the Trust unless it is finally adjudicated that they engaged in
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in their offices, or unless it is finally adjudicated that they
did not act in good faith in the reasonable believe that their actions were in
the best interests of the Trust. In the case of settlement, such indemnification
will not be provided unless it has been determined by a court or other body
approving the settlement or other disposition, or by a reasonable determination,
based upon a review of readily available facts, by vote of a majority of
disinterested trustees, or in a written opinion of independent counsel, that
such officers or trustees have not engaged in willful misfeasance, bad faith,
gross negligence or reckless disregard of their duties.

The following table describes the compensation paid during the last fiscal
year to each Trustee or nominee.

</TABLE>
<TABLE>

COMPENSATION TABLE
<CAPTION>
Pension or
Retirement Total Compensation
Aggregate Benefits Accrued Estimated Annual from Trust and
Compensation as Part of Trust Benefits Upon Fund Complex Paid
Name of Person from Trust Expenses Retirement to Trustees

<S> <C> <C> <C> <C>
Rodman L. Drake $5,000 None None $5,000
W. Wallace McDowell $5,250 None None $5,250
Jonathan Piel $5,250 None None $5,250
Alfred Tannachion None None None $40,000
Donald L. Campbell None None None $30,000
Joseph C. Dugan None None None $30,000
Wolfe J. Frankl None None None $30,000
Robert A. Robinson None None None $30,000
</TABLE>

As used in the above compensation table, the term "Fund Complex" shall
collectively refer to the Trust and the Master Funds. The Trust has no pension
plan.

REQUIRED VOTE

The election of each nominee as a Trustee of the Trust will require the
vote of a plurality of the aggregate votes cast by all of the shareholders of
all of the Funds, present in person or represented by proxy at the Meeting.

THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT THE SHAREHOLDERS OF EACH
FUND VOTE FOR EACH OF THE NOMINEES FOR TRUSTEE.

PROPOSAL 5. ALL FUNDS

TO APPROVE OR DISAPPROVE OF THE SELECTION OF ERNST
& YOUNG LLP AS THE INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS OF EACH OF THE FUNDS.

It is intended that proxies submitted by shareholders of the Funds not
limited to the contrary will be voted in favor of ratifying the selection, under
Section 32(a) of the 1940 Act, by a majority of the Independent Trustees of the
Trust, of Ernst & Young LLP as independent public accountants, to certify every
financial statement of each of the Funds required by any law or regulation to be
certified by independent public accountants and filed with the Securities and
Exchange Commission (the "SEC") in respect of all or any part of the fiscal year
of the Fund ending May 31, 1996. Ernst & Young LLP has no direct or material
indirect interest in any of the Funds.

Ernst & Young LLP has served as the independent certified public accountants,
providing audit services and consultation with respect to the preparation of
filings with the SEC, for the Equity Fund since the commencement of its
operations on January 16, 1995, for the Income Fund since the commencement of
its operation on January 16, 1995, for the Total Return Bond Fund since the
commencement of its operations on January 19, 1995, for the Equity Index Fund
since the commencement of its operations on July 11, 1994, for the Bond Index
Fund since the commencement of its operations on July 11, 1994, for the Small
Cap Fund since the commencement of its operations on July 11, 1994, for the
Balanced Fund since the commencement of its operations on July 11, 1994, for the
Equity Growth Fund since the commencement of its operations on July 11, 1994,
for the Value Equity Fund since the commencement of its operations on July 11,
1994, and for the International Equity Fund since the commencement of its
operations on January 24, 1995.

Representatives of Ernst & Young LLP are not expected to be present at the
Meeting.

REQUIRED VOTE

Ratification of the selection of Ernst & Young LLP as the independent
certified public accountants of the Trust will require a majority of the
aggregate votes cast by all shareholders of all of the Funds, present in person
or represented by proxy at the Meeting.

THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT THE SHAREHOLDERS OF
EACH FUND VOTE FOR RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR SUCH FUND.

PROPOSAL 6. ALL FUNDS

OTHER BUSINESS

The Trust's management knows of no business to be brought before the
Meeting except as described above. However, if any other matters property come
before the Meeting, the persons named in the enclosed form of proxy intend to
vote on these matters in accordance with their best judgment. If shareholders
would like additional information about the matters proposed for action, the
Trust's management will be glad to hear from them and to provide further
information.

YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.

By the order of the Board of Trustees,

EXCELSIOR INSTITUTIONAL TRUST

Thomas M. Lenz, Secretary

____________ ___, 1995