EXHIBIT (d)(5)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of ___________, 2000 by and among EXCELSIOR FUNDS, INC.,
a Maryland corporation (herein called the "Company"), U.S. TRUST COMPANY
("UST"), 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 UST, the "Investment Adviser").
WHEREAS, the Company is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Company desires to retain the Investment Adviser to render
investment advisory and other services to the Company for its Technology Fund
portfolio (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
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to 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. The Investment Adviser may, in its discretion,
provide such services through its own employees or the employees of one or more
affiliated companies that are qualified to act as investment adviser to the
Company under applicable law provided (i) that all persons, when providing
services hereunder, are functioning as part of an organized group of persons,
(ii) the use of an affiliate's employees does not result in a change of actual
control or management of the Investment Adviser under the 1940 Act; and (iii)
the use of an affiliate's employees has been approved by the Board of Directors
of the Company.
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-1A (No.
2-92665) relating to shares ("Shares") of the Fund covered by this Agreement,
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) Prospectuses of the Company relating to the Shares in effect under
the Securities Act of 1933 (such prospectuses and 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 objective 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 law, including but not limited to applicable banking law;
(b) will not make loans for the purpose of purchasing or carrying
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 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 any 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
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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 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 of the Rules 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 Rule 31a-1 of the Rules.
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 Funds.
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 the
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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 the 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 following annual rate: 1.00% of the average
daily net assets of the Technology Fund.
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 hereof and unless sooner terminated as provided herein, shall continue
until July 31, 2001. Thereafter, if not terminated, this Agreement shall
continue in effect as to a particular Fund 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, with respect to
the Fund, by vote of a majority of the outstanding voting securities of the
Fund; provided, however, that this Agreement may be terminated by the Company as
to the Fund at any time, without the payment of any penalty, by the Board of
Directors of the Company or, with respect to the Fund, by vote of a majority of
the outstanding voting securities of such Fund on 60 days' written notice to the
Investment Adviser, or by the Investment Adviser as to the Fund 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.) An affiliate of the Investment
Adviser may assume the Investment Adviser's obligations under this Agreement
provided that (i) the affiliate is qualified to act as an investment adviser to
the Company under applicable law; (ii) the assumption will not result in a
change of actual control or management of the Investment
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Adviser; and (iii) the assumption of the Investment Adviser's obligations by the
affiliate is approved by the Board of Directors of the Company.
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, if such vote is required by the 1940 Act,
or by the vote of a majority 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 amendment.
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 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.
EXCELSIOR FUNDS, INC.
Attest:
By:
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Secretary President
Attest: U.S. TRUST COMPANY
By:
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UNITED STATES TRUST COMPANY
Attest: OF NEW YORK
By:
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