EXHIBIT 5(e)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of May 16, 1997 by and among EXCELSIOR FUNDS, INC.,
a Maryland corporation (herein called the "Company"), U.S. TRUST COMPANY OF
CONNECTICUT ("USTCT"), a Connecticut state bank and trust company, and UNITED
STATES TRUST COMPANY OF NEW YORK ("USTNY"), a New York state-chartered bank and
trust company (together with USTCT, the "Investment Adviser").
WHEREAS, the Company is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940;
WHEREAS, the Company desires to retain the Investment Adviser to
render investment advisory and other services to the Company for its Treasury
Money Fund ("the Fund"), and the Investment Adviser is willing to so render such
services;
NOW, THEREFORE, this Agreement
WITNESSETH:
In consideration of the premises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints the Investment Adviser to
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act as investment adviser to the Company for the Fund for the period and on the
terms set forth in this Agreement. The Investment Adviser accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. Delivery of Documents. The Company has furnished the Investment
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Adviser with copies properly certified or authenticated of each of the
following:
(a) Articles of Incorporation of the Company;
(b) By-Laws of the Company;
(c) Resolutions of the Board of Directors of the Company
authorizing the appointment of the Investment Adviser and the execution and
delivery of this Agreement;
(d) Registration Statement under the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, on Form N-IA (No.
2-92665) relating to shares of the Company's Class G Common Stock (including
shares of any special series of such class now or hereafter designated), $.001
par
value, representing interests in the Treasury Fund, and all amendments thereto;
(e) Notification of Registration of the Company under the Investment
Company Act of 1940, as amended, on Form N-8A as filed with the Securities and
Exchange Commission on August 8, 1984, and all amendments thereto; and
(f) Prospectus and Statement of Additional Information relating to the
Company's Class G Common Stock in effect under the Securities Act of 1933 (such
Prospectus and Statement of Additional Information and all supplements thereto,
as presently in effect and as from time to time amended and supplemented, herein
called the "Prospectus").
The Company will furnish the Investment Adviser from time to time with
copies of all amendments of or supplements to the foregoing, if any.
3. Management. Subject to the supervision of the Board of Directors
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of the Company, the Investment Adviser will provide a continuous investment
program for the Fund, including investment research and management with respect
to all securities, investments, cash and cash equivalents in the Fund. The
Investment Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by the Company for the Fund.
The Investment Adviser will provide the services rendered by it hereunder in
accordance with the Fund's investment objectives and policies as stated in the
Prospectus. The Investment Adviser further agrees that it:
(a) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission (herein called the "Rules"), and will in
addition conduct its activities under this Agreement in accordance with
applicable laws, including but not limited to applicable banking laws;
(b) will not make loans for the purpose of purchasing or carrying Fund
shares, or make loans to the Company;
(c) will place orders pursuant to its investment determinations for
the Fund either directly with the issuer or with any broker or dealer selected
by it. In placing orders with brokers and dealers, the Investment Adviser will
use its reasonable 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
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 Investment Adviser may, to the extent permitted
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by law, purchase and sell portfolio securities to and from brokers and dealers
who provide brokerage and research services (within the meaning of Section 28(e)
of the Securities Exchange Act of 1934)to or for the benefit of the Fund and/or
other accounts over which the Investment Adviser or any of its affiliates
exercises investment discretion. Subject to the review of the Company's Board of
Directors from time to time with respect to the extent and continuation of the
policy, the Investment Adviser is authorized to pay to a broker or dealer who
provides such brokerage and research services a commission for effecting a
securities transaction for the Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Investment Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the overall responsibilities of the Investment Adviser
with respect to the accounts as to which it exercises investment discretion. In
no instance will portfolio securities be purchased from or sold to the Fund's
principal underwriter, the Investment Adviser or any affiliated person thereof
except as permitted by the Securities and Exchange Commission;
(d) will maintain books and records with respect to the Fund's
securities transactions and will render to the Company's Board of Directors such
periodic and special reports as the Board may request;
(e) will maintain a policy and practice of conducting its Asset
Management Group independently of its Banking Group. When the Investment
Adviser makes investment recommendations for the Fund, its Asset Management
Group personnel will not inquire or take into consideration whether the issuer
of securities proposed for purchase or sale for the Fund's account are customers
of the Banking Group. In dealing with commercial customers, the Banking Group
will not inquire or take into consideration whether securities of those
customers are held by the Fund;
(f) will treat confidentially and as proprietary information of the
Company all records and other information relative to the Fund and prior,
present or potential shareholders, and will not use such records and information
for any purpose other than performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing by the
Company, which approval shall not be unreasonably withheld and may not be
withheld where the Investment Adviser may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the
Company. Nothing contained herein, however, shall
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prohibit the Investment Adviser from advertising or soliciting the public
generally with respect to other products or services, regardless of whether such
advertisement or solicitation may include prior, present or potential
shareholders of the Company.
4. Services Not Exclusive. The investment management services
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rendered by the Investment Adviser hereunder are not to be deemed exclusive, and
the Investment Adviser shall be free to render similar services to others so
long as its services under this Agreement are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule
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31a-3 under the Investment Company Act of 1940, the Investment Adviser hereby
agrees that all records which it maintains for the Fund are the property of the
Company and further agrees to surrender promptly to the Company any of such
records upon the Company's request. The Investment Adviser further agrees to
preserve for the periods prescribed by Rule 31a-2 the records required to be
maintained by such Rule.
6. Expenses. During the term of this Agreement,the Investment
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Adviser will pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Fund.
In addition, if the expenses borne by the Fund in any fiscal year
exceed the applicable expense limitations imposed by the securities regulations
of any state in which its shares are registered or qualified for sale to the
public, the Investment Adviser shall reimburse the Fund for a portion of any
such excess in an amount equal to the proportion that the fees otherwise payable
to the Investment Adviser bear to the total amount of investment advisory and
administration fees otherwise payable by the Fund up to the amount of the fees
payable to the Investment Adviser during such fiscal year pursuant to paragraph
7 hereof; provided, however, that notwithstanding the foregoing, the Investment
Adviser shall reimburse the Fund for a portion of such excess expenses in an
amount equal to the proportion that the fees otherwise payable to the Investment
Adviser bear to the total amount of investment advisory and administration fees
otherwise payable by the Fund regardless of the amount of fees paid to the
Investment Adviser during such fiscal year to the extent that the securities
regulations of any state in which Fund shares are registered or qualified for
sale so require.
7. Compensation. For the services provided and the expenses assumed
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pursuant to this Agreement, the Company will pay the Investment Adviser and the
Investment Adviser will accept as full compensation therefor a fee, computed
daily and payable monthly, at the annual rate of .30% of the average daily net
assets of the Fund.
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8. Limitation of Liability of the Investment Adviser. The Investment
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Adviser shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Company in connection with the matters to which this
Agreement relates, except the Investment Adviser shall be jointly, but not
severally, liable for a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the Investment
Adviser in the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
9. Duration and Termination. This Agreement shall be effective as of
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the date of the commencement of the public sale of Fund shares and unless sooner
terminated as provided herein, shall continue until July 31, 1997. Thereafter,
if not terminated, this Agreement shall continue in effect for successive
periods of 12 months each, provided such continuance is specifically approved at
least annually (a) by the vote of a majority of those members of the Board of
Directors of the Company 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 approval, and (b) by the Board of Directors of the Company or by
vote of a majority of the outstanding voting securities of the Fund; provided,
however, that this Agreement may be terminated by the Company at any time,
without the payment of any penalty, by the Board of Directors of the Company or
by vote of a majority of the outstanding voting securities of the Fund on 60
days' written notice to the Investment Adviser, or by the Investment Adviser at
any time, without payment of any penalty, on 90 days' written notice to the
Company. This Agreement will immediately terminate in the event of its
assignment. (As used in this Agreement the terms "majority of the outstanding
voting securities," "interested person" and "assignment" shall have the same
meanings as such terms have in the Investment Company Act of 1940.)
10. Amendment of this Agreement. No provision of this Agreement may
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be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall be
effective with respect to the Fund until approved by vote of a majority of the
Fund's outstanding voting securities.
11. Miscellaneous. The captions in this Agreement are included for
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convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to
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the benefit of the parties hereto and their respective successors and shall be
governed by New York law.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
Attest: EXCELSIOR FUNDS, INC.
/s/W. Xxxxx XxXxxxxx, III By:/s/F.S. Wonham
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Secretary President
[Seal]
Attest: U.S. TRUST COMPANY OF
CONNECTICUT
/s/Xxxxxxx X. Xxxxx, Xx. By:/s/W. Xxxxxxx Xxxxx
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President & CEO
Attest: UNITED STATES TRUST COMPANY OF
NEW YORK
/s/Xxxxxxx X. Xxxxx, Xx. By:/s/Xxxxxxx X. Xxxxx
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Executive Vice President
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