The Reserve Funds Insert Bruce R. Bent's picture.
Founders of
"America's First Money Fund"
November xx, 1998
Dear Reserve Shareholder:
We are pleased to enclose the Notice and Proxy Statement for the Special
Meeting of Shareholders of The Reserve Funds. You were an investor in the
Reserve Money-Market Funds on October 30, 1998, either in conjunction with your
brokerage account or through an investment held directly by you.
The meeting is being called because of the pending purchase of the Fund's
adviser, Reserve Management Company, Inc. by incumbent management.
Rest assured that the proposed changes will in no way impact the management
staff, operations or investment philosophy of The Reserve Funds: Dollar in,
dollar out plus a reasonable rate of return. This is why we created "America's
First Money Fund" in 1970 and is the same principle under which we intend to
continue to manage the Funds in the future.
At the Meeting, you will be asked to consider and vote on the following
matters none of which will change the investment objectives or goals of the
funds:
o To provide for the election of Trustees
o To approve new Investment Management Agreements
o To approve amendments to the Trust's Declaration of Trust to permit
the issuance of multiple classes of shares
o To approve amendments to the Declaration of Trust regarding certain
investment policies
o To allow for a Master Fund/Feeder Fund Structure
o To approve the authorization for the Board of Trustees to appoint,
replace, terminate or make changes to any of the sub-advisory
agreements of the Fund without additional shareholder approval
o To ratify the selection of PricewaterhouseCoopers LLP as independent
public accountants.
The Independent Trustees of the Funds have reviewed the proposals and
concluded they are in the best interests of the Trusts and its shareholders.
They recommend that you vote FOR each of the proposals, which are described in
more detail in the enclosed Proxy Statement.
Please Note: The Reserve Money-Market Funds are mutual funds and as such are
required by law to hold special shareholder meetings on these types of issues
and a minimum of 51% of the shares must vote. Please take a moment now to sign
and return your ballot in the enclosed postage-paid envelope or vote over the
phone by calling 800-xxx-xxxx. Your vote is important regardless of the number
of shares you own and will only take a brief moment of your time. Not completing
the proxy impedes the ability of the Funds in acting on these important matters,
which in the opinion of the Independent Trustees is not in your best interest.
The Fund has retained Shareholder Communications Corporation ("SCC"), a
professional proxy solicitation firm, to assist shareholders in the voting
process. As the date of the Meeting approaches, if we have not already heard
from you, you may receive a telephone call from SCC reminding you to exercise
your right to vote. However, if you have any questions about the proxy material
or need voting assistance, please call SCC at 800-xxx-xxxx, as soon as possible.
We appreciate your participation and prompt response in this matter and
thank you for your continued support.
Sincerely,
Bruce R. Bent
President
<PAGE>
PRELIMINARY PROXY MATERIALS -- FOR SEC USE ONLY
THE RESERVE FUND
RESERVE TAX-EXEMPT TRUST
RESERVE NEW YORK TAX-EXEMPT TRUST
RESERVE INSTITUTIONAL TRUST
810 Seventh Avenue
New York, New York 10019
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
To be held December 17, 1998 at 3:00 p.m.
Notice is hereby given that a Joint Special Meeting of Shareholders
("Meeting") of:
(1) The Reserve Fund (consisting of four Funds: Primary Fund, U.S. Government
Fund, U.S. Treasury Fund, and Strategist Money-Market Fund);
(2) Reserve Tax-Exempt Trust (consisting of eight Funds: California Tax-Exempt
Fund, Connecticut Tax-Exempt Fund, Florida Tax-Exempt Fund, Massachusetts
Tax-Exempt Fund, New Jersey Tax-Exempt Fund, Pennsylvania Tax-Exempt Fund and
Interstate Tax-Exempt Fund);
(3) Reserve New York Tax-Exempt Trust (consisting of one Fund: New York Tax-
Exempt Fund) and
(4) Reserve Institutional Trust (consisting of four Funds: Primary Institutional
Fund, U.S. Government Institutional Fund, U.S. Treasury Institutional Fund,
Interstate Tax-Exempt Institutional Fund)
will be held at The Reserve Funds, 810 Seventh Avenue, 17th Floor, New York, NY
10019, on December 17, 1998, at 3:00 p.m. Eastern Time, or at such adjourned
time as may be necessary to vote (the "Meeting") for the following purposes:
<TABLE>
<CAPTION>
Proposal Who Will Vote
<S> <C>
PROPOSAL 1
To provide for the election of Trustees Trust Vote
PROPOSAL 2
To approve new Investment Management Agreements All Funds
PROPOSAL 3
To approve amendments to the Trust's Declaration For approval by The
of Trust to permit the issuance of multiple Reserve Fund, Reserve
classes of shares Tax-Exempt Trust, Reserve
New York Tax-Exempt Trust
PROPOSAL 4
To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate Trust Vote
the policy on pricing securities;
B. To amend the Declaration of Trust to Trust Vote
permit non-material amendments;
C. To amend the Declaration of Trust concerning Trust Vote
the right to vote portfolio securities;
D. To amend the Declaration of Trust concerning Trust Vote
termination or reorganization of the Trust;
E. To amend the Trusts' fundamental investment policy All Funds
on the issuance of senior securities;
F. To amend the Trusts' fundamental investment policy All Funds
regarding underwriting;
G. To change the designation of the Trusts' fundamental All Funds
investment policy on investing for control of portfolio
companies;
H. To eliminate the Trusts' fundamental investment All Funds
policies regarding certain portfolio transactions;
I. To eliminate the Trusts' fundamental investment All Funds
policy on investing in the securities of other
investment companies;
J. To amend the By-Laws concerning amendments thereto Trust Vote
PROPOSAL 5
To approve changes to the Trusts' Fundamental All Funds
Investment Policies to Permit a Master Fund/Feeder
Fund Structure
PROPOSAL 6
To approve the authorization of the Board of Trustees All Funds
to appoint, replace or terminate sub-advisers
recommended by the adviser or amend the terms of
any sub-advisory agreement for the Funds without
shareholder approval
PROPOSAL 7
To ratify the selection of PricewaterhouseCoopers LLP All Funds
as independent public accountants for the fiscal year
ending May 31, 1999; and
PROPOSAL 8
To transact such other business as may properly Such Funds as Necessary
come before the Meeting.
</TABLE>
Voting
Shareholders of record of each of the Funds at the close of business on
October 30, 1998 (the "Record Date") will be entitled to vote at the Meeting.
Each share of a Fund is entitled to one vote.
We urge you to sign, date and return your proxy in the enclosed
addressed envelope, which requires no postage and is intended for your
convenience. If you held shares of more than one Fund on the record date, you
will receive separate proxy materials for each Fund. Your prompt return of your
proxy or proxies may save the Funds the necessity and expense of further
solicitations to ensure a quorum at the Meeting. You may vote your shares in
person at the Meeting.
By Order of the Board of Trustees
-----------------------------
MaryKathleen Foynes
Secretary
The Reserve Fund
Reserve Tax-Exempt Trust
Reserve New York Tax-Exempt Trust
Reserve Institutional Trust
New York, New York
November 1, 1998
<PAGE>
THE RESERVE FUND
RESERVE TAX-EXEMPT TRUST
RESERVE NEW YORK TAX-EXEMPT TRUST
RESERVE INSTITUTIONAL TRUST
810 Seventh Avenue
New York, New York 10019
PROXY STATEMENT
This Proxy Statement and enclosed form of proxy are being furnished in
connection with the solicitations of proxies by the Trustees of - Reserve Fund,
Reserve Tax-Exempt Trust, Reserve New York Tax-Exempt Trust, and Reserve
Institutional Trust (the "Trusts") for a joint special meeting of Shareholders,
to be held at The Reserve Funds, 810 Seventh Avenue, 17th Floor, New York, NY
10019, on December 17, 1998, at 3:00 p.m. Eastern Time or at any adjournment or
adjournments thereof (the "Meeting"), for the purposes set forth in the
accompanying Notice of Meeting.
This Proxy Statement and the form of proxy are being mailed to
shareholders on or about November, 1998. Any shareholder giving a proxy has the
power to revoke it by mail (addressed to the Secretary of each Fund at the
principal executive office of the Funds, 810 Seventh Avenue, New York, NY 10019)
or in person at the Meeting, by executing a superseding proxy or by submitting a
notice of revocation to the Funds. All properly executed and unrevoked proxies
received in time for the Meeting will be voted as specified in the proxy or, if
no specification is made, for each proposal referred to in the proxy statement.
A copy of each Fund's most recent annual report is available upon
request and without charge by calling the Funds at (800) 637-1700 at their
principal executive office, 810 Seventh Avenue, New York, NY 10019.
The following table describes each proposal that will be presented at
the Meeting and the Funds which will vote on them.
<TABLE>
<CAPTION>
Proposal Who Will Vote
<S> <C>
PROPOSAL 1 Trust Vote
To provide for the election of Trustees
PROPOSAL 2 All Funds
To approve new Investment Management Agreements
PROPOSAL 3
To approve amendments to the Trust's Declaration For approval by The
of Trust to permit the issuance of Reserve Fund, Reserve
multiple classes of shares Tax-Exempt Trust, and
Reserve New York
Tax-Exempt Trust
PROPOSAL 4
To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate Trust Vote
the policy on pricing securities;
B. To amend the Declaration of Trust to permit Trust Vote
non-material amendments;
C. To amend the Declaration of Trust concerning Trust Vote
the right to vote portfolio securities;
D. To amend the Declaration of Trust concerning Trust Vote
termination or reorganization of the Trust;
E. To amend the fundamental investment All Funds
policy on the issuance of senior securities;
F. To amend the fundamental investment All Funds
policy regarding underwriting;
G. To change the designation of the Trust's All Funds
fundamental investment policy on investing
for control of portfolio companies;
H. To amend the Trust's fundamental investment All Funds
policies regarding certain portfolio transactions;
I. To eliminate the Trust's fundamental investment All Funds
policy on investing in the securities of other
investment companies; and
J. To amend the By-Laws concerning amendments Trust Vote
thereto
PROPOSAL 5 All Funds
To approve changes to the Funds' Fundamental
Investment Policies to Permit a Master Fund/Feeder
Fund Structure
PROPOSAL 6 All Funds
To approve the authorization of the Board of
Trustees to appoint, replace or terminate
sub-advisers recommended by the adviser or
amend the terms of any sub-advisory agreement for
the Funds without shareholder approval
PROPOSAL 7 All Funds
To ratify the selection of PricewaterhouseCoopers LLP
as independent public accountants for the fiscal year
ending May 31, 1999; and
PROPOSAL 8 Such Funds as necessary
To transact such other business as may properly
come before the Meeting
</TABLE>
Voting
Shareholders of record for each Fund as of the close of business on
October 30, 1998 (the "Record Date") are entitled to vote at the Meeting and at
any adjournment thereof on matters submitted to shareholders of that Fund.
Shareholders have one vote for each share held in a Fund. The presence at the
Meeting, in person or by proxy, of the holders of one-third of the shares
outstanding and entitled to vote shall constitute a quorum, permitting action on
matters related to that Fund.
With respect to Proposal 1, (Election of Trustees) 4j and 7, a majority
of the votes cast at the Meeting at which a quorum is present, must be cast in
the affirmative in order for the Trustee to be elected or the proposal to be
approved.
With respect to Proposals 3, 4a, 4b, 4c, 4d, a majority of the
outstanding shares of a Fund entitled to vote must be cast in the affirmative in
order for the Proposal to be approved.
Approval of Proposals 2, 4e, 4f, 4g, 4h, 4i, 5 and 6 requires the
affirmative vote, as to each affected Fund, of a majority of the outstanding
voting securities of that Fund. For this purpose, under applicable law, "vote of
a majority of the outstanding voting securities" of the Fund means the vote of
(i) 67% or more of the voting securities of the Fund present at the Meeting, if
the holders of more than 50% of the outstanding voting securities of that Fund
are present or represented by proxy; or (ii) more than 50% of the outstanding
voting securities of the Fund whichever is less.
All shares represented by the enclosed form of proxy will be voted in
accordance with the instructions indicated on the proxy if it is completed,
dated, signed and returned in time to be voted at the Meeting and is not
subsequently revoked. If the proxy is returned properly signed and dated, but no
instructions are given, the shares represented will be voted in favor of each of
the proposals. As set forth under Other Information - Solicitation of Proxies,
proxies may be solicited in person or by telephone, telegraph, facsimile, oral
communication or electronic medium. Any proxy may be revoked by the timely
submission of a properly executed subsequent proxy, by a timely written
revocation, or by an oral revocation or vote at the Meeting prior to the
finalization of the vote on a particular proposal. Execution and submission of a
proxy does not affect a shareholder's right to attend the Meeting in person. Due
to applicable legal requirements that the proposals presented in this Proxy
Statement must be approved by specified percentages of a Fund's, or a Series',
outstanding shares in order to be adopted, an abstention by a shareholder from
voting on a particular proposal, either by proxy or in person at the Meeting,
will have the same effect as a negative vote as to that matter. Shares that are
held by a broker-dealer or other fiduciary as record owner for the account of a
beneficial owner will be counted for purposes of determining the presence of a
quorum and as votes on particular proposals if the beneficial owner has executed
and timely delivered the necessary instructions for the record owner to attend
the Meeting and vote the shares, or if the record owner has, and exercises,
discretionary voting power. If the record owner does not have discretionary
voting power as to a particular proposal, but grants a proxy for, or votes, the
shares, those shares will be counted toward the quorum but will have the effect
of a negative vote as to that proposal.
All costs associated with the Meeting, including the expenses of
preparing, printing and distributing the Proxy Statement, and legal expenses,
will be borne equally by Reserve Management Company, Inc. and the Funds, with
the exception of U.S. Treasury Fund and Strategist Money-Market Fund where costs
are paid by RMCI.
The Board of Trustees may seek one or more adjournments of the Meeting
if necessary to obtain a quorum or to obtain the vote required for approval of
one or more proposals. A vote may be taken at the Meeting, including any
adjournment, on any proposal for which there are sufficient votes even though
the Meeting is adjourned as to other proposals.
PROPOSAL 1
ELECTION OF TRUSTEES (Trust Vote)
The Trustees composing the Board of each Fund are elected to serve
indefinitely until his or her resignation or removal or until his or her
successor is duly elected and qualified. It is proposed, and the Board
recommends, that shareholders elect the nominees listed below some of whom are
currently Trustees of the Funds. The same group of individuals will serve as
Trustees for each of the Funds.
Proxies which do not contain specific instructions to the contrary will
be voted in favor of the election of the nominees shown below.
<TABLE>
<CAPTION>
Position with Principal Occupations
Name and Age the Trust During the Past Five Years
<S> <C> <C>
Bruce R. Bent* President, Treasurer and Mr. Bent is President, Treasurer and Trustee of The
810 Seventh Avenue Trustee Reserve Funds ("RF"), Reserve Institutional Trust
New York, NY 10019 (1970 to present) ("RIT"), Reserve Tax-Exempt Trust ("RTET"), Reserve
Age: 61 New York Tax-Exempt Trust ("RNYTET") and Reserve
Private Equity Series ("RPES"); Director, Vice
President and Secretary of Reserve Management
Company, Inc. ("RMCI") and Reserve Management
Corporation ("RMC"); and Chairman and Director of
Reserv Partners, Inc. ("RESRV").
Edwin Ehlert, Jr. Trustee Mr. Ehlert is retired. Until his retirement, he was
125 Elm Street (1971 to present) President of Premier Resources Inc. (a meeting and
Westfield, NJ 10019 planning company) from October 1989 to December 31,
Age: 66 1996 and CEO of Ehlert Travel Associates, Inc. (a
travel agency) rom November 1978 to December 31, 1996.
He is a trustee of RF, RIT, RTET, RNYTET and RPES.
Henri W. Emmet Trustee From January 1995 to December 1995, Mr. Emmet served
1535 Presidential Drive (1978 to present) as a Principal of Global Interaction, which provides
Columbus, OH 43212 consulting services to international banking
Age: 72 interests. Mr. Emmet retired as the Managing
Director of Servus Associates, Inc. in 1994, and
U.S.A. Representative of the First National Bank of
Southern Africa in 1996. He is currently Trustee of
RF, RIT, RTET, RNYTET, and RPES.
<PAGE>
Donald J. Harrington Trustee The Reverend Harrington is President of St. John's
Grand Central & Utopia Parkway (1987 to present) University, NY, a Trustee of RF, RIT, RTET, RNYTET
St. John's University and RPES and a Director of Bear Stearns Companies,
Jamaica, NY 11439 Inc. since 1993.
Age: 53
Bruce R. Bent II* Senior Vice President and Mr. Bent II joined The Reserve Funds in 1992 and is
810 Seventh Avenue Assistant Secretary, Senior Vice President and Assistant Secretary of RF,
New York, NY 10019 Nominee for election as RIT, RNYTET, RTET and RPES
Age: 32 Trustee
William E. Viklund Trustee Mr. Viklund is formerly President and COO of Bancorp
110 Grist Mill Lane 10/1998 - present and President and CEO of Long Island Savings
Plandome Manor, NY 11030 (1980-1996); Senior Vice President/Department Head
Age: 58 of Bankers Trust Corp. (1972-1980); and Vice
President and Mortgage Officer of Anchor Savings
Bank (1967-1972).
Vincent J. Mattone Nominee Mr. Mattone is former member of the Executive
12 Deep Hollow Drive, Locust , NJ Committee and the Board of Directors of the Bear
07760 Stearns Companies, Inc. from 1985 to 1995. Prior to
Age: 53 joining Bear Stearns, he was employed by Salomon
Brothers from 1964 to 1979.
Diana P. Herrmann Nominee Ms. Herrmann is President and CEO of Aquila
380 Madison Avenue Management Corporation, sponsor of 14 mutual funds
Suite 2300 with over $3 billion in assets, as of October 5,
New York, NY 10017-2513 1998. Prior to joining Aquila in 1986, Ms. Herrmann
Age: 40 was employed with European American Bank in New York
and was board member and Secretary of Bank Credit
Association.
Richard Bassuk Nominee From 1995 to present, Mr. Bassuk has been a founding
The Singer & Bassuk Organization principal and President of The Singer & Bassuk
767 Third Avenue Organization. From 1994 to present, Mr. Bassuk
28th floor served as Chairman of R.E. Bases Enterprises
New York, NY 10017 Corporation. Previously, Mr. Bassuk joined Starrett
Age:57 Housing Corporation in 1973 and was President and
COO from 1981 to 1993.
<FN>
- ---------------------------
* "Interested person" (as defined in the Investment Company Act of 1940) of the
Funds. Bruce R. Bent is the father of Bruce R. Bent II and each is considered to
be an "interested person."
</FN>
</TABLE>
Trustees other than those affiliated with Reserve Management Company,
Inc. ("RMCI") and Resrv Partners, Inc. ("RESRV"), the Funds Distributor, receive
an annual stipend of $3,500 for each joint Board meeting that they attend, and
an annual fee of $16,000 plus expenses for services to all of the Trusts in the
complex. For the fiscal year ended May 31, 1998 such fees and expenses
aggregated $75,811 for the unaffiliated Trustees as a group. During the fiscal
year ended May 31, 1998, there were 4 meetings of the Board. During this period
none of the incumbent Trustees attended less than 75% of the aggregate of the
total number of Board meetings and the total number of Committee meetings for
the Committees on which that Trustee serves.
Each Fund has a standing Review Committee, which functions similarly to
an Audit Committee, presently consisting of Messrs. Ehlert, Emmet, and
Harrington. The Review Committee reviews both the audit and non-audit work of
each Fund's independent public accountants, submits a recommendation to the
Trustees as to the selection of independent public accountants, and reviews
generally the maintenance of each Fund's records and the safekeeping
arrangements of the Funds' custodians. The Review Committee of each Fund held
its annual meeting last fiscal year.
For the fiscal year ended May 31, 1998, the current Trustees received
the following compensation from the Funds and from other funds for which RMCI is
Adviser:
I. The Reserve Fund
<TABLE>
<CAPTION>
Pension or Retirement
Benefits Accrued As
Aggregate Part of Fund Est. Annual Total Compensation From
Name of Trustee Compensation from Expenses* Benefits Upon All Funds Managed by RMCI
Nominee the Funds Retirement*
<S> <C> <C> <C> <C>
Bruce R. Bent $ 0 $ 0 $ 0 $ 0
Edwin Ehlert, Jr. $7,925.14 $ 0 $ 0 $ 30,000
Henri W. Emmet $7,925.14 $ 0 $ 0 $ 30,000
Donald J. Harrington $7,925.14 $ 0 $ 0 $ 30,000
</TABLE>
II. Reserve Tax-Exempt Trust
<TABLE>
<CAPTION>
Pension or Retirement
Benefits Accrued As
Aggregate Part of Fund Est. Annual Total Compensation From
Name of Compensation from Expenses* Benefits Upon All Funds Managed by RMCI
Nominee the Funds Retirement*
<S> <C> <C> <C> <C>
Bruce R. Bent $ 0 $0 $0 $ 0
Edwin Ehlert, Jr. $16,301.82 $0 $0 $ 30,000
Henri W. Emmet $16,301.82 $0 $0 $ 30,000
Donald J. Harrington $16,301.82 $0 $0 $ 30,000
</TABLE>
III. Reserve New York Tax-Exempt Trust
<TABLE>
<CAPTION>
Pension or Retirement
Benefits Accrued As
Aggregate Part of Fund Est. Annual Total Compensation From
Name of Nominee Compensation from Expenses* Benefits Upon All Funds Managed by RMCI
the Funds Retirement*
<S> <C> <C> <C> <C>
Bruce R. Bent $ 0 $0 $0 $ 0
Edwin Ehlert, Jr. $ 3,498.21 $0 $0 $ 30,000
Henri W. Emmet $ 3,498.21 $0 $0 $ 30,000
Donald J. Harrington $ 3,498.21 $0 $0 $ 30,000
</TABLE>
IV. Reserve Institutional Trust
<TABLE>
<CAPTION>
Pension or Retirement
Benefits Accrued As
Aggregate Part of Fund Est. Annual Total Compensation From
Name of Nominee Compensation from Expenses* Benefits Upon All Funds Managed by RMCI
the Funds Retirement*
<S> <C> <C> <C> <C>
Bruce R. Bent $ 0 $0 $0 $ 0
Edwin Ehlert, Jr. $ 2,274.83 $0 $0 $ 30,000
Henri W. Emmet $ 2,274.83 $0 $0 $ 30,000
Donald J. Harrington $ 2,274.83 $0 $0 $ 30,000
<FN>
- ---------------------------
* The Funds do not pay any pension or retirement benefits to Trustees.
</FN>
</TABLE>
As of the Record Date, the Trustees and officers of the Funds owned
less than 1% of the outstanding shares of beneficial interest of each of the
Funds.
The following are the officers of the Funds who are not Trustees. The
address of all such officers is 810 Seventh Avenue, New York, NY 10019.
<TABLE>
<CAPTION>
Position Principal Occupations
Name and Age with the Funds During the Past Five Years
<S> <C> <C>
MaryKathleen Foynes Counsel and Secretary Ms. Foynes is Counsel and Secretary of RF, RIT, RNYTET,
810 Seventh Avenue RTET, and RPES. Before joining The Reserve Funds in 1998,
New York, NY 10019 Ms. Foynes was a staff attorney at PaineWebber, Inc. Prior
Age: 29 to that, Ms. Foynes worked in the House of Representatives
as District Manager for a Member of Congress.
Arthur T. Bent III Vice President and Mr. Bent joined The Reserve Funds in 1997. Prior to joining
810 Seventh Avenue Assistant Secretary Reserve, Mr. Bent was a private investor.
New York, NY 10019
Age: 30
</TABLE>
Required Vote
The election of each of the above nominees requires the affirmative
vote of a majority of the votes cast at the Meeting at which a quorum is present
in order for the Trustee to be elected.
PROPOSAL 2
TO APPROVE NEW INVESTMENT
MANAGEMENT AGREEMENTS (ALL FUNDS)
The Board of Trustees of each Fund is proposing that shareholders of
each Fund approve new Investment Management Agreements (the "New Agreements") to
be entered into between each Fund and Reserve Management Company, Inc. ("RMCI) )
located at 810 Seventh Avenue, New York, New York 10019. The new Investment
Advisory Agreements are substantially similar to the current Investment Advisory
Agreements, except that for certain of the Funds a new "comprehensive management
fee" structure is proposed. A form of the New Agreement is attached hereto as
Exhibit A.
Since November 15, 1971, RMCI, a registered investment adviser, and its
affiliates have provided investment advice to The Reserve Funds which as of
October 29, 1998 have assets in excess of $5.2 billion. RMCI currently serves as
investment manager to each Fund pursuant to the terms of (i) an Investment
Management Agreement entered into with each Fund, and (ii) a Service Agreement
entered into with each Fund, (collectively, the "Current Agreements"), which are
described more fully below (except in the case of Reserve U.S. Treasury Fund,
Strategist Money-Market Fund and Reserve Institutional Trust which are currently
subject solely to an Investment Management Agreement with RMCI, which Investment
Management Agreement provides for the provision of both investment advisory and
administrative services by RMCI to the Funds under a single agreement.)
The Change in Control of Reserve Management Company, Inc. (RMCI)
Presently, the voting stock of RMCI is owned equally by members of two
families -- the Browns and the Bents. Bruce R. Bent, has been President and
Treasurer of the Funds, since their inception, as well as the Chief Executive
Officer of RMCI for the past fourteen years. Mr. Bent and certain of his
immediate family members, control 50% of the voting stock of RMCI. The remaining
50% of the voting stock of RMCI is under the control of Mr. Henry B.R. Brown and
certain of his immediate family members. Mr. Brown, together with Mr. Bent,
founded RMCI which is a successor of Reserve Management Company, which was
founded in 1970.
The following persons currently own beneficially or of record 10% or
more of the outstanding voting securities of RMCI: Henry B.R. Brown; Alexander
M.R. Brown; Harriet R. Brown; Elizabeth S.B. Devlin; Peter F. Brown; Bruce R.
Bent; Bruce R. Bent II; and Arthur T. Bent III. The address of each such person
is c/o Reserve Management Company, Inc., 810 Seventh Avenue, New York, NY 10019.
It is currently proposed that members of Mr. Bent's immediate family
will acquire the remaining 50% interest in RMCI that is held by Mr. Brown and
his immediate family members, and this transaction is anticipated to be
completed on or about August 31, 1998. While this transaction will result in the
assignment, and thus, termination of, the Current Agreements, there is no plan
or understanding on the part of the Bent family to change the operations of RMCI
after the change in control is completed.
Section 15(a) of the 1940 Act prohibits any person from serving as an
investment adviser to a registered investment company except pursuant to a
written contract that has been approved by the shareholders of the company.
Section 15(a) also provides, as to the Current Agreements, for the automatic
termination of such agreements upon their assignment. An assignment is deemed to
include any change of control of the investment adviser.
Because the Current Agreements will be terminated upon the completion
of the change in control of RMCI, it is necessary to adopt new investment
management agreements for each Fund. Management of the Funds made a proposal to
the Trustees at a meeting held on October 7, 1998, for the adoption of the New
Agreements. With respect to certain of the Funds, the New Agreements differ from
the Current Agreements because they reflect a new management fee structure for
each of the Funds providing for a "comprehensive fee" structure. The Trustees at
this meeting approved this recommendation for the adoption of the New Agreements
reflecting the new "comprehensive fee" structure, and the Trustees are
recommending that shareholders approve the New Agreements.
In addition, the Funds intend to conform with the provisions of Section
15(f) of the 1940 Act, which provides, in pertinent part, that an investment
adviser may receive any amount or benefit in connection with a sale of such
investment adviser which results in an assignment of an investment advisory
contract if (1) for a period of three years after the time of such event, 75% of
the members of the board of directions of the investment company which it
advises are not "interested persons" (as defined in the 1940 Act) of the new or
old investment adviser; and (2) there is no "unfair burden" imposed on the
investment company as a result of the transaction.
1. The Current Agreements
Each of the Current Agreements have been previously approved by
shareholders in the ordinary course of obtaining shareholder approval of such
agreements as required by applicable law. The Current Agreement for Reserve
Primary Fund is dated September 17, 1986 and was last submitted to a vote of
initial shareholders on October 28, 1986; the Current Agreement for Reserve U.S.
Treasury Fund is dated October 1, 1991 and was last submitted to a vote of
initial shareholders on December 1, 1993; the Current Agreement for Reserve U.S.
Government Fund is dated October 1, 1991 and was last submitted to a vote of
initial shareholders on December 1, 1993; the Current Agreement for Strategist
Money Market Fund is dated April 30, 1996, and was last submitted to a vote of
initial shareholders on May 14, 1996; the Current Agreement for Interstate
Tax-Exempt Fund is dated October 28, 1986 and was last submitted to a vote of
initial shareholders on October 28, 1986; the Current Agreement for California
Tax-Exempt Fund is dated October 16, 1994 and was last submitted to a vote of
initial shareholders on October 17, 1994; the Current Agreement for New Jersey
Tax-Exempt Fund is dated March 16, 1994 and was last submitted to a vote of
initial shareholders on November 14, 1994; the Current Agreement for Connecticut
Tax-Exempt Fund is dated October 28, 1986 and was last submitted to a vote of
initial shareholders on October 28, 1986; the Current Agreement for
Massachusetts Tax-Exempt Fund is dated October 30, 1989 and was last submitted
to a vote of initial shareholders on November 27, 1990; the Current Agreement
for Pennsylvania Tax-Exempt Fund is dated September 11, 1997 and was last
submitted to a vote of initial shareholders on September 12, 1997; the Current
Agreement for Florida Tax-Exempt Fund is dated May 14, 1996 and was last
submitted to a vote of initial shareholders on June 24, 1996; the Current
Agreement for Reserve New York Tax-Exempt Fund is dated September 17, 1986 and
was last submitted to a vote of initial shareholders on October 28, 1986; the
Current Agreement for Primary Institutional Fund is dated October 14, 1997 and
was last submitted to a vote of initial shareholders on October 15, 1997; the
Current Agreement for U.S. Government Institutional Fund is dated September 14,
1997 and was last submitted to a vote of initial shareholders on September 15,
1997; the Current Agreement for U.S. Treasury Institutional Fund is not yet
signed; and the Current Agreement for Interstate Tax-Exempt Institutional Fund
is dated May 12, 1998 and was last submitted to a vote of initial shareholders
on May 13, 1997.
Under the terms of the Current Agreements, RMCI manages each Fund's
investments and provides all administrative and operational services to the
Funds. Under the terms of each Investment Management Agreement between RMCI and
each Fund (with the exception of Reserve U.S. Treasury Fund, Strategist Money
Market Fund and Reserve Institutional Trust which have a separate fee schedule
set forth below), each Fund pays RMCI annual investment management fees based on
each Fund's average daily net assets. The fees are calculated for the various
funds as follows:
The Reserve Funds (with the exception of Reserve U.S. Treasury Fund and
Strategist Money-Market Fund):
(i) 0.50% per annum of the first $500 million of average daily net
assets; (ii) 0.475% per annum of the next $500 million of such assets; (iii)
0.45% per annum of the next $500 million of such assets; (iv) 0.425% per annum
of the next $500 million of such assets; and (v) 0.40% of such assets in excess
of $2 billion. For the fiscal year ended May 31, 1998, RMCI received a
management fee of 0.45% of the average daily net assets of the Primary Fund and
0.45% of the average daily net assets of the U.S. Government Fund.
Reserve Tax-Exempt Trust:
(i) 0.50% per annum of the first $500 million of average daily net
assets; (ii) 0.475% per annum of the next $500 million of such assets; (iii)
0.45% per annum of the next $500 million of such assets; (iv) 0.425% per annum
of the next $500 million of such assets; and (v) 0.40% of such assets in excess
of $2 billion. For the fiscal year ended May 31, 1998, RMCI received a
management fee of 0.50% of the average daily net assets of the Fund.
Reserve New York Tax-Exempt Trust:
(i) 0.50% per annum of the first $500 million of average daily net
assets; (ii) 0.475% per annum of the next $500 million of such assets; (iii)
0.45% per annum of the next $500 million of such assets; (iv) 0.425% per annum
of the next $500 million of such assets; and (v) 0.40% of such assets in excess
of $2 billion. For the fiscal year ended May 31, 1998, RMCI received 0.50% of
the average daily net assets from the Fund.
Under the terms of each Service Agreement between RMCI and each Fund
(with the exception of Reserve U.S. Treasury Fund, Strategist Money-Market Fund
and Reserve Institutional Trust which receive the following services under its
Investment Management Agreement with RMCI, as described more fully below), RMCI
provides, at cost, all personnel required by each Fund for all operations such
as executive, administrative, clerical, recordkeeping, bookkeeping, shareholder
accounting and servicing, as well as suitable office space and necessary
equipment and supplies used by such personnel in performing these functions.
Reserve U.S. Treasury Fund, Strategist Money-Market Fund and Reserve
Institutional Trust currently are subject only to an Investment Management
Agreement with RMCI pursuant to which U.S. Treasury pays RMCI a "comprehensive"
management fee at an annual rate of 0.60% of the Fund's average daily net assets
and Strategist Money-Market Fund pays RCMI a "comprehensive" management fee at
an annual rate of 0.80% plus 0.20% as a percentage of average net assets and
Reserve Institutional Trust pays an annual rate of 0.25% as a percentage of
average net assets. In accordance with these agreements, RMCI provides all
investment advisory services to these Funds and also provides all operating
services to the Funds including all personnel required for administrative,
clerical, recordkeeping, bookkeeping, shareholder accounting and shareholder
servicing functions. Accordingly, the terms of the proposed New Agreement for
those funds are essentially identical to the terms of the Current Agreement for
those funds since each such agreement provides for a "comprehensive fee" payable
to RMCI as outlined above.
Each of the Funds (but not all of the classes within a given Fund) is
subject to a Plan of Distribution and related agreements, in accordance with
Rule 12b-1 of the 1940 Act. Under the terms of each such Plan of Distribution,
the Funds may make payments to certain brokers, financial institutions and
others at an annual rate of up to 0.20% with the exception of:
Reserve Institutional, Class C-- 0.25% as a percentage of average net
assets; and
Reserve Institutional, Class D-- 0.50% as a percentage of average net
assets.
Such payments are designed to facilitate the sale of Fund shares. Each
Plan of Distribution will remain in full force and effect for each Fund and will
not be changed or affected as a result of the matters addressed herein. In
addition, Management from time to time may pay additional amounts from its own
resources.
2. Comparison of Current Agreements and the New Agreements
The New Agreements would provide for a "comprehensive fee" structure.
Under this fee structure, RMCI would provide all investment services and
administrative services to each Fund at a single established level of
compensation under the terms of a single agreement.
The services to be provided by RMCI under the New Agreements and in
accordance with the comprehensive fee would consist of the following: all
investment advisory services relating to the research of and purchase and sale
of portfolio securities for the Funds; all personnel required for executive,
administrative, clerical, recordkeeping, bookkeeping and accounting and
servicing; all office space, equipment and supplies used by the Funds and such
personnel, and all other ordinary operating expenses of the Funds except those
specifically identified as being the direct responsibility of the Funds. Those
expenses that are specifically identified as being attributable to the Funds
consist solely of: interest charges, taxes, brokerage fees and commissions,
extraordinary legal and accounting fees and expenses, payments made pursuant to
each Fund's Distribution Plan, and the fees of the Trustees not affiliated with
RMCI.
Management of the Funds has indicated, and the Boards of Trustees of
the Funds have concurred, that the adoption of a comprehensive fee structure may
be beneficial and in the interests of shareholders because it could provide
shareholders with a more easily understood fee structure that offers greater
certainty in determining the total operating expenses of the Funds on an annual
basis.
Set forth below is comparative information regarding the fees payable
under the Current Agreements and the New Agreements for each Fund that does not
have a comprehensive fee for the fiscal year ended May 31, 1998, assuming for
illustrative purposes only that the New Agreements had been in effect for the
full fiscal year.
<TABLE>
Fees for Fiscal Year Ended May 31, 1998
<CAPTION>
Fees Permitted
Under the Fees Under the
Current Agreements* New Agreements**
<S> <C> <C>
THE RESERVE FUND
Reserve Primary Fund
Management Fees.................................. .45 .80
12b-1 Fees....................................... .20 .20
Other Operating Expenses......................... .35 .00
--- ---
Total Operating Expenses......................... 1.00 1.00
==== ====
Reserve U.S. Government Fund
Management Fees.................................. .49 .80
12b-1 Fees....................................... .20 .20
Other Operating Expenses......................... .31 .00
--- ---
Total Operating Expenses......................... 1.00 1.00
==== ====
RESERVE TAX-EXEMPT TRUST
Interstate Tax-Exempt Fund
Management Fees.................................. .50 .80
12b-1 Fees....................................... .20 .20
Other Operating Expenses......................... .30 .00
--- ---
Total Operating Expenses......................... 1.00 1.00
==== ====
California Tax-Exempt Fund
Management Fees.................................. .50 .80
12b-1 Fees....................................... .20 .20
Other Operating Expenses......................... .30 .00
--- ---
Total Operating Expenses......................... 1.00 1.00
==== ====
Connecticut Tax-Exempt Fund
Management Fees.................................. .50 .80
12b-1 Fees....................................... .20 .20
Other Operating Expenses......................... .30 .00
--- ---
Total Operating Expenses......................... 1.00 1.00
==== ====
Florida Tax-Exempt Fund
Management Fees.................................. .50 .80
12b-1 Fees....................................... .20 .20
Other Operating Expenses......................... .30 .00
--- ---
Total Operating Expenses......................... 1.00 1.00
==== ====
Massachusetts Tax-Exempt Fund
Management Fees.................................. .50 .80
12b-1 Fees....................................... .20 .20
Other Operating Expenses......................... .30 .00
--- ---
Total Operating Expenses......................... 1.00 1.00
==== ====
New Jersey Tax-Exempt Fund
Management Fees.................................. .50 .80
12b-1 Fees....................................... .20 .20
Other Operating Expenses......................... .30 .00
--- ---
Total Operating Expenses......................... 1.00 1.00
==== ====
New York Tax-Exempt Fund
Management Fees.................................. .50 .80
12b-1 Fees....................................... .20 .20
Other Operating Expenses......................... .30 .00
--- ---
Total Operating Expenses......................... 1.00 1.00
==== ====
Pennsylvania Tax-Exempt Fund
Management Fees.................................. .50 .80
12b-1 Fees....................................... .20 .20
Other Operating Expenses......................... .30 .00
--- ---
Total Operating Expenses......................... 1.00 1.00
==== ====
<FN>
- ---------------------------
* Adviser may have waived some of its fees so that fees actually charged may
have been less than those permitted under the current agreements.
** Under the terms of the New Agreements, other expenses are expected to be de
minimis on a per share basis.
</FN>
</TABLE>
3. Directors and Executive Officers of RMCI
The Directors and Executive Officers of RMCI are as follows:
Henry B.R. Brown, President and Treasurer
Bruce R. Bent, Vice President and Secretary
Bruce R. Bent II, Assistant Secretary
4. The Trustees' Considerations and Recommendations
In approving the New Agreements and determining to submit them to
shareholders for approval, the Trustees concluded that the compensation to be
paid by each Fund to RMCI under the New Agreements is fair and reasonable. In
making this determination, the Trustees considered several factors. The factors
considered by the Trustees included: (1) the difference between the current
investment management fees payable under the Current Agreements and those
payable under the New Agreements; (2) the efforts and expenses of RMCI in
rendering its services to the Funds; (3) the nature, quality and extent of the
services as currently provided by RMCI to the Funds and to be provided under the
New Agreements; (4) the performance record of RMCI in connection with its
investment management of the Funds; (5) the fees charged by investment managers
operating funds with similar investment objectives; and (6) the likely benefits
to shareholders from the adoption of a "comprehensive fee" structure which may
provide shareholders with a more easily understood fee structure and with more
certainty in connection with the operating expenses for the Funds. The Trustees
also noted that RMCI presently manages many of the Funds investment companies
under a comprehensive fee structure and it was determined that it would be
practical and efficient if RMCI were to operate all of the investment companies
under its management pursuant to a single consistent fee structure.
The Trustees also considered the fact that a potential consequence of
the adoption of a comprehensive fee structure and the elimination of the current
system of breakpoints providing for lower management fees on larger amounts of
assets would be the loss of the possible ability to benefit from economies of
scale at higher asset levels. The Trustees concluded that such a possibility is
outweighed by the benefits that may result from a fee structure that offers
certainty and clarity in the establishment of operating expenses for the Funds.
Required Vote
With respect to each Fund, the approval of the New Investment
Management Agreement requires the affirmative vote of a majority of each
respective Fund's outstanding voting securities, which for these purposes means
the vote (i) of 67% or more of the voting securities present at the Meeting, if
the holders of more than 50% of the outstanding voting securities of each such
Fund are present or represented by proxy, or (ii) of more than 50% of the
outstanding voting securities of each Fund, whichever is less.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF THE
NEW INVESTMENT MANAGEMENT AGREEMENTS, AND ANY SIGNED BUT UNMARKED PROXIES WILL
BE SO VOTED.
PROPOSAL 3
TO APPROVE AMENDMENTS TO EACH DECLARATION OF TRUST
TO PERMIT THE ISSUANCE OF MULTIPLE CLASSES OF SHARES (The Reserve Fund,
Reserve Tax-exempt Trust, Reserve New York Tax-exempt Trust)
Introduction
At a meeting held on October 7, 1998, the Board of Trustees of each
Fund, including a majority of the Independent Trustees, considered and approved
amendments to the Declaration of Trust of each Fund. (As used, herein,
"Independent Trustees" means Trustees of each Fund who are not "interested
persons" of the Fund within the meaning of the 1940 Act.) The amendments would
authorize the Trustees to create two or more classes of shares of each Fund.
Shareholders are now being asked to approve the amendments to each Fund's
Declaration of Trust.
Multiple Classes of Shares
An increasing number of investment companies are now offering multiple
classes of shares. In such "multi-class funds," shares of each class represent
interests in the same underlying portfolio of securities. The classes differ in
terms of their distribution arrangements and/or services provided to each class.
The Securities and Exchange Commission (the "Commission") has adopted
Rule 18f-3 under the 1940 Act to allow investment companies to offer multiple
classes of shares without first obtaining an exemptive order from the
Commission, provided that the investment companies meet certain express
conditions set forth in the Rule. Rule 18f-3 requires certain differences in the
expenses, rights and obligations of different classes and permits certain other
differences. Furthermore, the Rule specifies certain matters on which class
voting is required. Income and expenses must be allocated among the different
classes according to the requirements of the Rule. Rule 18f-3 also imposes
responsibilities on the board of trustees of a multi-class fund to approve a
plan setting forth the distinct features of each class and providing for income
and expense allocation and other procedures in the best interests of each class
and of the fund as a whole. Finally, the Rule allows different classes to have
different exchange privileges and conversion rights.
Assuming that this Proposal is approved by the requisite vote of each
Fund's shareholders, it is expected that each Fund will adopt the requisite
plans under Rule 18f-3 to implement the multiple class structure as soon as
practicable thereafter.
Proposed Amendments to Each Declaration of Trust
In order for each Fund to establish multiple classes of shares, the
Declaration of Trust of each Fund must first be amended to authorize the Board
of Trustees to create separate classes of shares. The classes of shares created
would have the same rights, privileges and preferences, except that there may be
variations between different classes as to the allocation of expenses, right of
redemption, special and relative rights as to dividends and on liquidation,
conversion rights, and conditions under which the several classes shall have
separate voting rights.
The proposed amendments to each Trust's Declaration of Trust are
identical changes. Accordingly, set forth as Exhibit B is the proposed form of
amendment to each Trust's Declaration of Trust.
Reasons for the Trustees' Recommendation
At the meeting held on October 7, 1998, the Board of Trustees of each
Fund, including a majority of the Independent Trustees, considered and approved
a proposal to advise the shareholders of each Fund to approve amendments to the
Declarations of Trust to authorize the creation of multiple classes of shares.
In doing so, the Trustees considered several factors, including the following:
(1) the proposed amendments would enable the Boards of Trustees to respond to
the recent trend in the fund industry towards offering multiple classes of
shares; and (2) multiple classes of shares would enable investors to choose the
fee and service arrangements best suited to their individual preferences,
thereby potentially encouraging current shareholders to make additional
investments in the Funds and attracting new investors and assets to the Funds to
the benefit of the Funds and their shareholders.
Multi-class funds represent a distinct trend in the mutual fund
industry, as evidenced by the adoption of Rule 18f-3 and by the number of funds
that previously sought exemptive orders from the Commission to implement
multiple classes of shares prior to the adoption of Rule 18f-3. Amending the
charter documents of the Funds will enable the Boards to be prepared to respond
to this trend by adopting multiple classes of shares in the future, thereby
maintaining the competitive position of the Funds in relation to other funds
that have implemented or are seeking to implement similar arrangements.
The multiple class arrangement addresses the differing requirements and
preferences of potential investors and allows the investor to choose the option
that is most beneficial under the investor's circumstances. In addition, it
should enable the Funds to compete with other similar mutual funds that offer
multiple classes of shares.
Required Vote
With respect to each Fund, the approval of the amendments to each
Fund's Declaration of Trust requires the affirmative vote of more than 50% of
the outstanding voting securities of each Fund.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF THE
AMENDMENTS TO EACH DECLARATION OF TRUST, AND ANY SIGNED BUT UNMARKED PROXIES
WILL BE SO VOTED.
PROPOSAL 4
TO APPROVE AMENDMENTS AND REVISIONS TO INVESTMENT
RESTRICTIONS AND DECLARATIONS OF TRUST
The Trustees of each Fund are proposing that shareholders approve
various proposals that would provide for the "modernization" of certain of the
operating policies and procedures for the Funds. Most of these policies and
procedures are contained in the Declarations of Trust for the Funds and have
become outmoded due to changes in the mutual fund industry. Most new mutual
funds being created today operate with these more modern provisions.
Accordingly, to permit the Funds to operate with the greatest amount of
flexibility and to allow them to more adequately compete with competitor funds,
shareholders are being asked to approve the following recommendations. The
Trustees approved each of these items at a meeting held on October 7, 1998.
The proposals are as follows:
A. TO AMEND EACH DECLARATION OF TRUST TO ELIMINATE THE POLICY ON PRICING
SECURITIES (Trust Vote)
It is recommended that the Funds amend their Declarations of Trust by
deleting the policy on pricing securities in its portfolio that is set forth in
each Declaration of Trust. Article SEVENTH (13) of the Reserve Tax Exempt Trust
and Reserve New York Tax-Exempt Trust, Article SEVENTH (12) of The Reserve Fund
and Article SEVENTH (12) of the Reserve Institutional Trust set forth rules
governing the manner in which NAV is computed. The manner in which each Fund
prices its securities may be set forth in the Fund's Statement of Additional
Information and each Fund's policy on pricing securities is not required to be
included in its Declaration of Trust. The purpose of the proposed amendment is
to provide the Funds with greater flexibility to respond to regulatory and
market developments in pricing its securities, should the need arise. Although
there is no current intention to change the manner in which each Fund's
portfolio securities are priced, the proposal, if adopted, would allow the Board
of Trustees to make changes in each Fund's policy on pricing, in a manner
consistent with applicable law, without seeking further shareholder approval.
In addition, conforming amendments would be made in several other
sections of the Declarations of Trust. Article FOURTH (g) and (i), Article FIFTH
(3) reference NAV as determined in accordance with Article SEVENTH. If the
proposal is approved, these references will be amended to reference NAV as
determined in accordance with procedures set forth in each Fund's currently
effective Prospectus and Statement of Additional Information.
B. TO AMEND THE DECLARATION OF TRUST TO PERMIT NON-MATERIAL AMENDMENTS (Trust
Vote)
It is recommended that the Funds amend Article FIFTH (1) of each
Declaration of Trust. Currently all amendments to the Declaration must be
approved by shareholders, necessitating the costs of soliciting proxies and
holding a special meeting of shareholders. Each Declaration as amended would
require shareholder approval of amendments to the Declaration, except as may be
necessary to conform the Declaration to provisions of federal or state laws or
regulations, or to the provisions of the Internal Revenue Code. The amendment
also would permit the Trustees to amend the Declaration without shareholder
approval if the Trustees deem it necessary to change the name of the Trust or
make other changes that do not materially adversely affect the rights of
shareholders.
The proposed amendment would add the following sentence to the end of
Article FIFTH (1):
The Trustees may also amend this Declaration without the vote or
consent of shareholders if they deem it necessary or desirable to (i)
conform the Declaration to provisions of federal or state laws or
regulations, or to the provisions of the Internal Revenue Code; (ii)
change the name of the Trust; or (iii) make any other changes in the
Declaration which do not materially adversely affect the rights of
shareholders hereunder.
In addition, conforming amendments would be required in another section
of the Declarations. Article EIGHTH provides that in the event of the
termination of the advisory contract with Reserve Management Company, resulting
in the loss of the Trust's right to use the name "Reserve," the shareholders,
officers, and Trustees shall promptly take action to change the name of the
Trust. If the proposal is approved, the reference to shareholder action would be
deleted.
C. TO AMEND THE DECLARATION OF TRUST CONCERNING THE RIGHT TO VOTE PORTFOLIO
SECURITIES (Trust Vote)
It is recommended that the Funds approve an amendment to the
Declaration of Trust of the above Funds which would vest exclusive power to vote
the portfolio securities of the Trust in the Trustees or their delegates.
Article SEVENTH (10) of the Declarations of Trust for the Institutional
and Reserve Funds and SEVENTH (11) of the Reserve Tax-Exempt Funds and New York
Tax-Exempt Fund currently provide that:
Securities held by the Trust shall be voted in person or by proxy by
the Chairman, President, or Vice President, or such officer or officers
of the Trust as the Trustees shall designate for the purpose, or by a
proxy or proxies thereunto duly authorized by the Trustees, except as
otherwise ordered by vote of the holders of a majority of the Shares
outstanding and entitled to vote in respect thereto.
The provision permitting a majority of shareholders to order the Trust
how to vote such securities is not required by law, and runs contrary to the
principles set forth in Article SEVENTH (4) of each Declaration of Trust that
the Trustees shall be free from the control of shareholders in carrying on the
business of the Trust. Therefore, it is recommended that this provision be
deleted.
If approved, Article SEVENTH (10) in the case of the Reserve Fund and
Reserve Institutional and (11) in the case of Reserve Tax-Exempt Fund and New
York Tax-Exempt Fund would be amended as follows:
Securities held by the Trust shall be voted in person or by proxy by
the Chairman, President, or Vice President, or such officer or officers
of the Trust as the Trustees shall designate for the purpose, or by a
proxy or proxies thereunto duly authorized by the Trustees.
D. TO AMEND THE DECLARATION OF TRUST CONCERNING TERMINATION OR REORGANIZATION
OF THE TRUST (Trust Vote)
Article NINTH (4) of each Declaration of Trust provides that the
Trustees, with the approval of more than 50% of the outstanding shares, may sell
the assets of the Trust to another issuer, thus effecting a reorganization, or
may sell the assets of the Trust and distribute the cash to shareholders,
resulting in a termination of the Trust.
It is recommended that the Declarations be amended: (1) to clarify that
a series of the Trust, as well as the Trust as a whole, may be terminated or
reorganized; (2) to permit the Trustees to terminate a series or the Trust by an
instrument in writing signed by a majority of the Trustees; and (3) to provide
that the assets of the Trust or series may be merged, consolidated, leased, or
exchanged, as well as sold, to facilitate reorganizations structured in a manner
other than a sale of assets.
Article NINTH (4) of each Declaration of Trust currently provides:
This Trust shall continue without limitation of time but subject to the
provisions of sub-sections (a), (b), and (c) of this paragraph 4.
(a) The Trustees, with the favorable vote of the holders of
more than 50% of the outstanding Shares entitled to vote may sell and
convey the assets of the Trust (which sale may be subject to the
retention of assets for the payment of liabilities and expenses) to
another issuer. Upon making provision for the payment of liabilities,
by assumption by such issuer or otherwise, the Trustees shall
distribute the remaining proceeds ratably among the holders of the
Shares of the Trust then outstanding.
(b) The Trustees with the favorable vote of the holders of
more than 50% of the outstanding Shares entitled to vote, may at any
time sell and convert into money all the assets of the Trust. Upon
making provision for the payment of all outstanding obligations, taxes
and other liabilities, accrued or contingent, of the Trust, the
Trustees shall distribute the remaining assets of the Trust ratably
among the holders of the outstanding Shares.
(c) Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided in sub-sections (a) and
(b), the Trust shall terminate and the Trustees shall be discharged of
any and all further liabilities and duties hereunder and the right,
title and interest of all parties shall be canceled and discharged.
If approved, Article NINTH (4) would be amended as follows:
(a) The Trustees, with the favorable vote of the holders of
more than 50% of the outstanding Shares entitled to vote may merge,
consolidate, sell, lease, exchange, or convey all or substantially all
of the assets, including its goodwill, of the Trust, or any series
thereof, (which transaction may be subject to the retention of assets
for the payment of liabilities and expenses) to any other corporation,
association, trust, or other organization. Upon making provision for
the payment of liabilities, by assumption by such other organization or
otherwise, the Trustees shall distribute the remaining proceeds ratably
among the holders of the Shares of the Trust or series then
outstanding.
(b) The Trustees, by execution of an instrument in writing
signed by a majority of the Trustees, or by the favorable vote of the
holders of more than 50% of the outstanding Shares entitled to vote,
may at any time sell and convert into money all or substantially all of
the assets of the Trust, or any series thereof. Upon making provision
for the payment of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust, the Trustees shall
distribute the remaining assets of the Trust or series ratably among
the holders of the outstanding Shares.
(c) Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided in sub-sections (a) and
(b), the Trust or series shall terminate and the Trustees shall be
discharged of any and all further liabilities and duties hereunder with
respect to the Trust or such series, and the right, title and interest
of all parties shall be canceled and discharged.
E. TO AMEND THE TRUSTS' FUNDAMENTAL INVESTMENT POLICY ON THE ISSUANCE OF
SENIOR SECURITIES (All Funds)
It is recommended that the Funds amend each Fund's fundamental policy
on issuing senior securities, which would allow the Funds to issue senior
securities to the extent permitted under the 1940 Act. The new policy, if
adopted, would provide each Fund with greater flexibility in pursuing its
investment objective and program.
Each Fund's current fundamental policy on issuing senior securities is
as follows:
The Fund cannot issue securities senior to its capital stock.
As amended, each Fund's fundamental policy on issuing senior securities
would be as follows:
The Fund may not issue senior securities except in compliance with the
Investment Company Act of 1940.
The 1940 Act limits a Fund's ability to issue senior securities or
engage in investment techniques which could be deemed to create a senior
security. Although the definition of a "senior security" involves complex
statutory and regulatory concepts, a senior security is generally thought of as
a class of security preferred over shares of a Fund with respect to the Fund's
assets or earnings. It generally does not include temporary or emergency
borrowings by a Fund (which might occur to meet shareholder redemption requests)
in accordance with federal law and the Fund's investment limitations. Various
investment techniques that obligate a Fund to pay money at a future date (e.g.,
the purchase of securities for settlement on a date that is longer than required
under normal settlement practices) occasionally raise questions as to whether a
"senior security" is created. The Funds will utilize such techniques only in
accordance with applicable regulatory requirements under the 1940 Act. Although
the Funds have no current intention of issuing senior securities, the proposed
change will clarify the Funds' authority to issue senior securities in
accordance with the 1940 Act without the need to seek shareholder approval.
The new restriction would also conform the Funds' policies on issuing
senior securities to one which would become standard for all Reserve Funds.
Standardized policies will assist the Funds and the Adviser in monitoring
compliance with the various investment restrictions to which the Reserve Funds
are subject.
F. TO AMEND THE TRUSTS' FUNDAMENTAL INVESTMENT POLICY REGARDING UNDERWRITING
(All Funds)
It is recommended that the Funds amend their fundamental policies on
underwriting to conform such policy to one which would become standard for all
Reserve Funds. The proposed changes, if adopted, are not expected to lead to any
changes in the manner in which each Fund conducts its business.
Each of the above Funds' current fundamental policy on the underwriting
of the securities of others is as follows:
The Fund cannot act as an underwriter with respect to the securities of
others;
As amended, each Fund's fundamental policy on underwriting the
securities of others would be as follows:
The Fund may not act as an underwriter with respect to the securities
of others except to the extent that, in connection with the disposition
of portfolio securities, it may be deemed to be an underwriter under
certain federal securities laws.
The new restriction would conform the Funds' policies on underwriting
the securities of others to one which would become standard for all Reserve
Funds. Standardized policies will assist the Funds and the Adviser in monitoring
compliance with the various investment restrictions to which the Reserve Funds
are subject.
G. TO CHANGE THE DESIGNATION OF THE TRUSTS' FUNDAMENTAL INVESTMENT POLICY ON
INVESTING FOR CONTROL OF PORTFOLIO COMPANIES (All Funds)
It is recommended that each Fund's fundamental policy on investing for
control of portfolio companies be changed from a fundamental policy to an
identical operating policy. Fundamental policies may only be changed with
shareholder approval, while operating policies may be changed by vote of the
Board of Trustees without shareholder approval. While the Funds have no current
intention of investing in companies for the purpose of obtaining or exercising
control, the proposed change would allow the Funds to do so if the Board of
Trustees determined to change the new operating policy. No additional
shareholder vote would be necessary. The proposed amendment will provide the
Funds with greater flexibility to respond to market and regulatory developments.
Each Fund's current fundamental policy on investing for control of
portfolio companies is as follows:
The Fund cannot invest in voting securities or in companies for the
purpose of exercising control;
As redesignated, each Fund's operating policy on investing for control
of portfolio companies would be as follows:
As a matter of operating policy, the Fund may not invest for the
purpose of exercising control.
H. TO ELIMINATE THE TRUSTS' FUNDAMENTAL INVESTMENT POLICIES REGARDING CERTAIN
PORTFOLIO TRANSACTIONS (All Funds)
The fundamental policy of each of the Funds provides that a Fund may
not purchase or sell any securities (other than securities of the Fund) from or
to any officer or Trustee of a Fund, the investment adviser or affiliated person
except in compliance with the Investment Company Act of 1940. It is recommended
that the Funds eliminate the current fundamental policy of each Fund concerning
such transactions for the reasons set forth below.
This investment restriction imposes on the Funds restrictions that are
redundant to limitations imposed by Sections 17(a), 17(e), and 10(f) of the 1940
Act and the rules adopted by the SEC under these sections. These provisions of
the 1940 Act generally preclude the Funds from engaging in principal portfolio
transactions with, purchasing securities in underwritings from, or effecting
portfolio transactions through persons or entities that are "affiliated persons"
of the Fund, as such term is defined in the 1940 Act, unless certain conditions
are met. The provisions of these sections are intended to protect the Funds
against abuse or overreaching by, among others, an affiliated broker or dealer.
The restrictions imposed by the 1940 Act itself provide the Funds with
sufficient protection against potential abuse, especially when coupled with the
periodic review of portfolio transactions conducted by the Board in the exercise
of its supervisory responsibilities. The foregoing investment restriction simply
repeats what is already required of each Fund under law. No change of the
investment restrictions of the Funds will occur as a practical matter.
I. TO ELIMINATE THE TRUSTS' FUNDAMENTAL INVESTMENT POLICY ON INVESTING IN THE
SECURITIES OF OTHER INVESTMENT COMPANIES (All Funds)
It is recommended that the Funds eliminate each Fund's current
fundamental policy concerning investments in other investment companies.
The fundamental policy of each of the above Funds provides that:
The Fund cannot invest in the securities of other investment companies
except in compliance with the Investment Company Act of 1940;
The Investment Company Act of 1940, which regulates the Funds'
activities, contains the limitations applicable to the Funds' investment in
other investment companies.
This fundamental policy is thus redundant to the restrictions of the
1940 Act. For the purpose of simplifying the Funds' recital of investment
restrictions it is recommended this investment restriction be eliminated as a
fundamental policy of the Funds. The Funds will continue to be subject to the
restrictions imposed by the 1940 Act. See also Proposal 5.
J. TO AMEND THE TRUSTS' BY-LAWS CONCERNING AMENDMENTS THERETO (Trust Vote)
Article VIII of the Bylaws for each of the Funds provides that:
Except as set forth below, the Bylaws of the Trust may be altered,
amended, added to or replaced by the Shareholders or a majority vote of
the entire Board of Trustees; but any such alteration, amendment,
addition or repeal of the Bylaws by action of the Board may be altered
or repealed by the Shareholders. Article VII and Article VIII may be
altered, amended or repealed only by the vote of the holders of a
majority of the Shareholders present at a meeting of the Shareholders
provided that a quorum is present in person or by proxy at such
meeting.
Article VII, which as provided above may only be amended by shareholder
vote, concerns custodianship of the Fund's assets, and sets forth procedures for
retaining a successor in the event of the resignation of the custodian.
Custodial issues are governed by the 1940 Act and the Rules and interpretations
thereunder. The 1940 Act imposes sufficient regulation to safeguard the custody
of the Funds' assets, and accordingly, the requirement of obtaining shareholder
approval prior to amending the Bylaws regarding custody is unduly burdensome and
unnecessary. While the Funds have no current intention to change their custodial
arrangements, approval of the proposal would permit the Trustees to amend these
arrangements should future conditions warrant and applicable law allow.
If approved, Article VIII will be amended as follows:
The Bylaws of the Trust may be altered, amended, added to or replaced
by the Shareholders or a majority vote of the entire Board of Trustees.
This Article VIII may be altered, amended or repealed only by the vote
of the holders of a majority of the Shareholders present at a meeting
of the Shareholders provided that a quorum is present in person or by
proxy at such meeting.
The amendment would also delete the provision permitting shareholders
to alter or repeal amendments made by the Trustees. However, shareholders will
still retain the right to amend the Bylaws, and thus could effectively still
reverse the amendments of the Trustees if they so desired.
Required Vote
With respect to Proposals A through D, which provide for amendments to
each Fund's Declaration of Trust, the affirmative vote of more than 50% of the
outstanding voting securities of each respective Fund is required.
With respect to Proposals E through I, which provide for revisions to
various investment restrictions, the affirmative vote of a majority of each
Fund's outstanding voting securities is required, which for these purposes means
the vote (i) of 67% or more of the voting securities present at the Meeting, if
the holders of more than 50% of the outstanding voting securities are present or
represented by proxy, or (ii) of more than 50% of the outstanding voting
securities, whichever is less.
With respect to Proposal J, which provides for an amendment to each
Fund's Bylaws, the affirmative vote of a majority of the votes cast at the
Meeting by the shareholders of each respective Fund is required.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE FOR THE FOREGOING
PROPOSALS, AND ANY SIGNED BUT UNMARKED PROXIES WILL BE SO VOTED.
PROPOSAL 5
TO APPROVE CHANGES TO THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES TO PERMIT A
MASTER FUND/FEEDER FUND STRUCTURE (All Funds)
For greater investment flexibility, RCMI has recommended that each Fund
adopt a condition to its fundamental investment policies to permit each Fund to
invest all or substantially all of its investible assets, except to the extent
required to remain uninvested to satisfy near-term cash requirements, in another
open-end management investment company having the same investment objectives and
substantially similar policies and restrictions as the Fund (a "Master Fund").
The condition would provide that:
Notwithstanding the foregoing investment restrictions, the
Fund may invest substantially all of its assets in another
open-end investment company with substantially the same
investment objective as the Fund.
Certain of each Fund's fundamental policies such as the amount a Fund
may invest in a particular industry may preclude the ability of a Fund to adopt
a Master Fund/Feeder Fund Structure. The proposed condition to each Fund's
fundamental investment policies would permit the Fund to adopt such a structure.
Rather than investing directly in a portfolio of securities, a Fund would be
authorized to pool its assets with other mutual funds for investment in a Master
Fund, making it a "Feeder Fund." A purpose of such an arrangement is to achieve
operational efficiencies, assuming that the assets of the Master Fund are
greater than the assets of any individual Feeder Fund. While the Board has not
determined that the Fund should convert to a Master Fund/Feeder Fund Structure
at this time, the Board believes it could be in the best interests of the Fund
at some future date, and in that case the Board could do so without further
approval by shareholders.
If the proposed changes in the investment policies are approved by
shareholders of the Fund, the Fund's Board could vote at some time in the future
to convert the Fund into a Feeder Fund under which all or substantially all of
the investment assets of the Fund would be invested in a Master Fund. The Feeder
Fund would transfer its assets to a Master Fund in exchange for an interest in
the Master Fund having the same net asset value as the value of the assets
transferred. The ownership interests of the Fund's shareholders will not be
altered by this change.
Under each Trust's Declaration of Trust, the affirmative vote of the
shareholders entitled to vote more than fifty percent of the votes entitled to
be cast on the matter is required to sell or transfer substantially all of the
assets of a Fund. One way to convert a Fund to a Master Fund/Feeder Fund
Structure is through a sale or transfer of assets. Thus, approval to convert a
Fund into a Master/Feeder Fund Structure through a sale or transfer of assets
requires, under a conservative interpretation of each Trust's Declaration of
Trust, the affirmative vote of a majority of the shares of a Fund. Approval of
this proposal by shareholders of a Fund is also, therefore, deemed to constitute
approval of the Board's discretionary authority to convert that Fund into a
Master Fund/Feeder Fund Structure through a sale or transfer of assets.
Any Master Fund in which a Feeder Fund would invest would be required
to have the same investment objective and substantially similar policies and
restrictions as the Feeder Fund. Accordingly, by investing in a Master Fund, a
Feeder Fund would continue to pursue its present investment objectives and
policies in substantially the same manner as it does currently, except that it
would do so through its investment in the Master Fund rather than through direct
policies. The Master Fund, whose shares could be offered to institutional
investors in addition to a Feeder Fund, would invest in the same type of
securities in which a Fund would have invested directly, providing substantially
the same investment results to the Feeder Fund's shareholders. However, the
expense ratios, the yields and the total returns of other investors in the
Master Fund may be different from those of the Feeder Fund due to differences in
Feeder Fund expenses.
By investing substantially all of its assets in a Master Fund, a Feeder
Fund may be in a position to realize directly or indirectly certain economies of
scale, in that a larger investment portfolio resulting from multiple Feeder
Funds is expected to achieve a lower ratio of operation expenses to net assets.
A Master Fund may be offered to an undetermined number of institutional
investors. However, there can be no assurance that any such additional
investments in a Master Fund by other Feeder Funds will take place or that
economies of scale may be realized.
If a Fund invests substantially all of its assets in a Master Fund, the
Fund may no longer require active portfolio management services. In this event,
if the shareholders of a Fund approve the proposed policy changes and the Board
converts the Fund into a Feeder Fund, then the existing investment management
agreement may be terminated or no fee would be charged; in such case, the Fund's
Board would likely enter into an administration agreement for the provision of
certain administrative services to the Fund, likely including those currently
provided under the existing investment management agreement, with compensation
at such rates as may be approved by the trustees.
MASTER FUNDS
The investment objective of any Master Fund would be the same as the
investment objective of the applicable Feeder Fund that would invest in it. If
the Fund's Board votes to convert a Fund into a Feeder Fund, the Fund's assets
will no longer be directly invested in the securities of multiple issuers, but
rather will be invested in the securities of a single issuer, i.e., the Master
Fund, which would be registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"). A Master
Fund may have a different Board than the Feeder Fund.
A Feeder Fund may withdraw its investment in a Master Fund at any time
if the Board determines that it is in the best interest of the shareholders of
the Feeder Fund to do so or if the investment policies or restrictions of the
Master Fund were changed so that they were inconsistent with the policies and
restrictions of the Feeder Fund. Upon any such withdrawal, the Board of the
Feeder Fund would consider what action might be taken, including the investment
of all the assets of the Feeder Fund in another pooled investment entity having
substantially the same investment objective as the Feeder Fund or the retaining
of an investment adviser to directly invest the Fund's assets in accordance with
its investment objective and policies. If another pooled investment vehicle with
substantially the same investment objective could not be found, it might have a
significant impact on the investment of shareholders in the Feeder Fund.
Whenever a Feeder Fund is asked to vote on a proposal by the Master
Fund, the Feeder Fund will hold a meeting of shareholders if required by
applicable law or its policies, and cast its vote with respect to the Master
Fund in the same proportion as its shareholders vote on the proposal.
Once its assets are invested in a Master Fund, a Feeder Fund will value
its holdings (i.e., shares issued by the Master Fund) at their fair value, which
will be based upon the daily net asset value of the Master Fund. The net income
of the Feeder Fund will be determined at the same time and on the same days as
the net income of the Master Fund is determined, which are the same time and
days that the Feeder Fund uses for this purpose.
TAX CONSIDERATIONS
The possible implementation of a Master Fund/Feeder Fund structure is
not expected to have any adverse tax effects on the Fund or its shareholders.
Each Feeder Fund would be expected to continue to qualify and elect to
be treated as a "regulated investment company" under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"). To so qualify, a Feeder
Fund must meet certain income, distribution, and diversification requirements.
It is expected that any Feeder Fund's investment in a Master Fund will satisfy
these requirements. Provided each Feeder Fund meets these requirements and
distributes all of its net investment income and realized capital gains to its
shareholders in accordance with the timing requirements imposed by the Code, the
Feeder Fund will not pay any Federal income or excise taxes.
BOARD RECOMMENDATION
As a result of its consideration of the foregoing facts, the Board of
the Fund voted unanimously to approve the change in fundamental investment
policies to permit a Master/Feeder Fund structure conversion at the Board's
discretion and to submit them to the shareholders for their approval.
Required Vote
The affirmative vote of the majority of the outstanding voting
securities of the Funds is required for adoption of this proposal. For this
purpose, under applicable law, "vote of a majority of the outstanding voting
securities" of the Funds means the vote of (i) 67% or more of the voting
securities of the Funds present at the Meeting, if the holders of more than 50%
of the outstanding voting securities of the Funds are present or represented by
proxy; or, (ii) more than 50% of the outstanding voting securities of the Funds
whichever is less.
THE BOARD OF THE FUNDS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL
OF THE NEW FUNDAMENTAL INVESTMENT POLICY PERMITTING CONVERSION, AT THE BOARD'S
DISCRETION, INTO A MASTER FUND/FEEDER FUND STRUCTURE.
PROPOSAL 6
TO APPROVE THE AUTHORIZATION OF THE BOARD OF TRUSTEES TO APPOINT,
REPLACE OR TERMINATE SUB-ADVISERS RECOMMENDED BY THE ADVISER OR AMEND
THE TERMS OF ANY SUB-ADVISORY AGREEMENT FOR THE FUNDS WITHOUT
SHAREHOLDER APPROVAL (All Funds)
Section 15(a), of the 1940 Act requires that all contracts pursuant to
which persons serve as investment adviser to investment companies be approved by
shareholders. As interpreted, this requirement also applies to the appointment
of sub-advisers to The Funds. The SEC, however, has granted conditional
exemptions for the shareholder approval requirements for situations where a fund
utilizes a multi-manager approach to portfolio investing. The Adviser, and the
Trust have obtained an exemption. If this proposal is approved by the
shareholders, the Board of Trustees of the Trust would, with respect the Funds,
without further shareholder approval, be able to appoint sub-advisers, terminate
sub-advisers, rehire sub-advisers whose agreements have been assigned (and thus
automatically terminated) and enter into or modify sub-investment advisory
agreements.
This Proposal is intended to facilitate the efficient operation of a
multi-manager structure and afford the Funds increased management flexibility.
Under the multi-manager structure, the Adviser, with the approval of the Board
of Trustees, would have the same authority and flexibility with respect to
sub-advisers that it has for its own internal portfolio managers; namely that
the Adviser can continually monitor their performance and replace them if the
Adviser, with the approval of the Board of Trustees, believes such action is
appropriate (for example, if the performance is not satisfactory). Under the
multi-manager structure, the Adviser would continuously monitor the performance
of each sub-adviser and may from time to time recommend that the Board of
Trustees add, replace or terminate one or more sub-advisers or appoint
additional sub-advisers, depending on the Adviser's assessment of what
combination of sub-advisers it believes will optimize the Funds' chances of
achieving its investment objective.
If this proposal is approved by the shareholders, the Trustees will not
be required to call a shareholder meeting each time a new sub-adviser is
approved (or to reapprove a sub-adviser whose sub-advisory agreement is
automatically terminated because it has been purchased by another entity) and
accordingly, shareholders will forego their existing privilege of having a vote
on such matters.
Shareholder meetings entail substantial costs, and may entail
substantial delays, which could reduce the desired benefits of the multi-manager
structure. These costs and delays must be weighed against the benefits of
shareholder scrutiny of proposed contracts with additional or replacement
sub-advisers; however, even in the absence of shareholder approval, any proposal
to add or replace sub-advisers would receive careful review. First, the Adviser
would assess the Fund's needs and, if it believed additional or replacement
sub-advisers could benefit a Fund, it would systematically search the relevant
universe of available investment managers. Second, any recommendation made by
the Adviser would have to be approved by a majority of the Trustees, including a
majority of the Trustees who are not interested persons of the Adviser within
the meaning of the 1940 Act. Third, any selections or additional sub-advisers or
replacement sub-advisers would have to comply with conditions contained in the
SEC's exemptive order. Finally the Board of Trustees would not be able to
replace the Adviser as investment adviser for a Fund without obtaining
shareholder approval of the new investment adviser.
BOARD RECOMMENDATION
As a result of its consideration of the foregoing facts, the Board of
the Fund voted unanimously to approve this proposal and to submit such proposal
to the shareholders for their approval.
Required Vote
The affirmative vote of the majority of the outstanding voting
securities of the Funds is required for adoption of this proposal. For this
purpose, under applicable law, "vote of a majority of the outstanding voting
securities" of the Funds means the vote of (i) 67% or more of the voting
securities of the Funds present at the Meeting, if the holders of more than 50%
of the outstanding voting securities of the Funds are present or represented by
proxy; or (ii) more than 50% of the outstanding voting securities of the Funds
whichever is less.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF
PROPOSAL 6.
PROPOSAL 7
TO RATIFY THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE FISCAL YEAR ENDING MAY 31, 1999
(All Funds)
PricewaterhouseCoopers LLP 1301 Avenue of the Americas, New York, New
York 10019 currently serves as independent public accountants for each of the
Funds. The Trustees are now seeking shareholder ratification of the selection of
PricewaterhouseCoopers LLP as independent public accountants for the Funds for
the fiscal year ending May 31, 1999.
Neither PricewaterhouseCoopers LLP nor any of its members have any
material direct or indirect financial interest in the Funds. Representatives of
PricewaterhouseCoopers LLP are not expected to be present at the Meeting but
will be available by telephone to respond to questions.
Required Vote
With respect to The Reserve Fund, the ratification of the selection of
PricewaterhouseCoopers LLP requires the affirmative vote of a majority of The
Reserve Fund's outstanding voting securities, which for these purposes means the
vote (i) of 67% or more of the voting securities present at the meeting, if the
holders of more than 50% of the outstanding voting securities of such trust are
present or represented by proxy, or (ii) of more than 50% of the outstanding
voting securities of such trust, whichever is less.
With respect to Reserve Tax-Exempt Trust and Reserve Tax-Exempt New
York Trust, the ratification of the selection of PricewaterhouseCoopers LLP
requires the affirmative vote of a majority of the votes cast at the meeting by
shareholders of each respective trust.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE FUNDS FOR THE FISCAL YEAR ENDING MAY 31, 1999.
PROPOSAL 8
TO TRANSACT SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING (Such Funds As Necessary)
OTHER INFORMATION
Share Ownership of Each Fund
The total amount of shares of beneficial interest of each Fund
outstanding on the Record Date was as follows:
Shares Outstanding
The Reserve Fund
Reserve Primary Fund
Reserve U.S. Treasury Fund
Reserve U.S. Government Fund
Strategist Money-Market Fund
Reserve Tax-Exempt Trust
Interstate Tax-Exempt Fund
California Tax-Exempt Fund
Connecticut Tax-Exempt Fund
Florida Tax-Exempt Fund
Massachusetts Tax-Exempt Fund
New Jersey Tax-Exempt Fund
Pennsylvania Tax-Exempt Fund
Reserve New York Tax-Exempt Trust
New York Tax-Exempt Fund
Reserve Institutional Trust
Primary Institutional Fund
U.S. Government Institutional Fund
U.S. Treasury Institutional Fund
Interstate Tax-Exempt Institutional Fund
The following table sets forth the information concerning beneficial
ownership, as of the Record Date, of each Fund's shares by each person who
beneficially owns more than five percent of the voting securities of each Fund:
<TABLE>
<CAPTION>
Name and Address Shares Percentage of
of Shareholder Beneficially Outstanding
Owned1/ Shares Owned2/
<S> <C> <C> <C>
The Reserve Fund *
Reserve Primary Fund *
Reserve U.S. Treasury Fund *
Reserve U.S. Government Fund *
Strategist Money-Market Fund
Reserve Tax-Exempt Trust
Interstate Tax-Exempt Fund
California Tax-Exempt Fund
Connecticut Tax-Exempt Fund
Florida Tax-Exempt Fund
Massachusetts Tax-Exempt Fund
New Jersey Tax-Exempt Fund
Pennsylvania Tax-Exempt Fund
Reserve New York Tax-Exempt
New York Tax-Exempt Fund
Reserve Institutional Trust
Primary Institutional Fund
U.S. Government Institutional Fund
U.S. Treasury Institutional Fund
Interstate Tax-Exempt Institutional Fund
<FN>
- ---------------------------
* As of October 30, 1998, no person was known by the Fund to own of record or
beneficially 5% or more of the outstanding shares of the Fund.
1/ This information, not being within the knowledge of the Funds, has been
furnished by each of the above persons. Beneficial ownership is as defined under
Section 13(d) of the Securities Exchange Act of 1934. Fractional shares have
been omitted.
2/ Only the ownership of at least one-tenth of one percent is listed.
</FN>
</TABLE>
Manner of Voting Proxies
All proxies received by the management of the Funds will be voted on
all matters presented at the Meeting, and if not limited to the contrary, will
be voted FOR all Proposals.
Management knows of no other matters to be brought before the Meeting.
If, however, any other matters properly come before the Meeting, it is
Management's intention that proxies not limited to the contrary will be voted in
accordance with the judgment of the persons named in the enclosed form of proxy.
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
have the same effect as abstentions in determining whether an issue has received
the requisite approval. Where the broker or nominee has no discretion to vote
the shares as to one or more proposals before the Meeting, the non-voted shares
will be excluded from the pool of shares voted on such issues. Thus, abstentions
and non-votes will have the same effect as a negative vote on issues requiring
the affirmative vote of a specified portion of a Fund's outstanding shares, but
will not be considered votes cast and thus will have no effect on matters
requiring approval of a specified percentage of votes cast.
In the event that at the time any session of the Meeting is called to
order a quorum is not present in person or by proxy, the persons named as
proxies may vote those proxies which have been received to adjourn the Meeting
to a later date. In the event that a quorum is present but sufficient votes in
favor of any of the Proposals 1 through 4 set forth in the Notice of Meeting
have not been received, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitations of proxies with
respect to those items. Any such adjournment will require the affirmative vote
of a majority of the shares present in person or by proxy at the session of the
Meeting to be adjourned. The persons named as proxies will vote those proxies
which they are entitled to vote for any such item in favor of such an
adjournment, and will vote those proxies required to be voted against any such
item against any such adjournment. A shareholder vote may be taken on one or
more of the items in this Proxy Statement prior to such adjournment if
sufficient votes for its approval have been received and it is otherwise
appropriate.
Solicitation of Proxies
Solicitation of proxies is being made primarily by the mailing of this
Notice and Proxy Statement. Holders of this Trust whose shares of Common Stock
are held by nominees, such as brokers, can vote their proxies by contacting
their respective nominee. In addition to the solicitation of proxies by mail,
officers of the Trust and employees of The Reserve Funds and its affiliates,
without additional compensation, may solicit proxies in person or by telephone,
telegraph, facsimile, oral communication or electronic medium. The Trust has
retained Shareholder Communications Corp. ("SCC"), a professional proxy
solicitation firm, to assist with any necessary solicitation of proxies. As the
Meeting date approaches, certain shareholders of the Trust may receive a
telephone call from SCC asking the shareholder to vote if the Trust has not yet
received the shareholder's vote. Authorization to permit MaryKathleen Foynes and
Mary A. Belmonte to execute proxies may be obtained by telephonic or
electronically transmitted instructions from shareholders of the Trust. In
taking telephonic instructions, SCC will follow procedures designed to ensure
that the identity of the shareholder casting the vote is accurately determined
and that the voting instructions of the shareholder are accurately determined.
SCC is permitted to answer questions about the process, but is not permitted to
recommend to the shareholders how to vote, other than to read any recommendation
set forth in the proxy statement. SCC will record the shareholder's instructions
on the card. Within 72 hours, SCC will send the shareholder a letter or mailgram
to confirm the shareholder's vote and asking the shareholder to call SCC
immediately if the shareholder's instructions are not correctly reflected in the
confirmation. The costs associated with such solicitation will be paid equally
by The Funds and Investment Manager, with the exception of U.S. Treasury and
Strategist Money-Market Fund, whose costs will be paid by the Investment
Manager; however the Investment Manager or its affiliates shall bear the expense
of any solicitation activities by their employees.
If any shareholder wishes to participate in the meeting of
shareholders, but does not wish to give his or her proxy by telephone, the
shareholder may still submit the proxy card originally sent with the proxy
statement or attend in person. Should shareholders require additional
information regarding the proxy or replacement proxy cards, they may contact SCC
toll-free at 1-800-__________.
A shareholder may revoke a proxy at any time prior to its use by filing
with the Trust a written revocation or duly executed proxy bearing a later date.
In addition, any shareholder who attends the Meeting in person may vote by
ballot at the Meeting, thereby canceling any proxy previously given. The persons
named in the accompanying proxy will vote as directed by the proxy, but in the
absence of voting directions in any proxy that is signed and returned, they
intend to vote FOR each of the proposals and may vote at their discretion with
respect to other matters not now known to the Board of Trustees or the Trust
that may be presented at the Meeting.
Investment Adviser, Principal Underwriter & Administrator
The Funds' Investment Adviser is Reserve Management Company Inc., 810
Seventh Avenue, New York, NY 10019. Reserv Partners, Inc. is a principal
underwriter to The Reserve Fund, Reserve Tax-Exempt Trust, Reserve Institutional
Trust, and Reserve New York Tax-Exempt Trust. Pacific Global Fund Distributors,
Inc. ("Pacific Global") also acts as a principal underwriter of The Reserve Fund
and Reserve Tax-Exempt Trust. Mesirow Financial Inc. also acts as a principal
underwriter of Reserve Tax-Exempt Trust. NWN/Northstar Distributors, Inc.
("Northstar") also acts as a principal underwriter for The Reserve Fund.
Submission of Certain Proposals
Proposals of shareholders which are intended to be presented at a
future shareholders' meeting must be received by each Trust by a reasonable time
prior to the Trust's solicitation of proxies relating to such future meeting.
Shareholder proposals must meet certain requirements and there is no guarantee
that any proposal will be presented at a Shareholder meeting.
Additional Information
The expense of the preparation, printing and mailing of the enclosed
form of proxy, this Notice and Proxy Statement and other expenses relating to
the Meeting will be borne equally by the Funds and RMCI. To obtain the necessary
representation at the Meeting, supplementary solicitations may be made by mail,
telephone, or interview by officers of the Funds and/or employees of RMCI and
others.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
THE RESERVE FUND
RESERVE TAX-EXEMPT TRUST
RESERVE NEW YORK TAX-EXEMPT TRUST
RESERVE INSTITUTIONAL TRUST
________________, 1998
<PAGE>
PRELIMINARY PROXY MATERIALS -- FOR SEC USE ONLY
PROXY
THE RESERVE FUND
Primary Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A.
Belmonte and each of them, his/her attorneys and proxies with full power of
substitution to vote and act with respect to all shares of Primary Fund held by
the undersigned at the Special Meeting of Shareholders of the Fund to be held at
3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve Funds, 810 Seventh
Avenue, 17th Floor, New York, NY 10019, and at any adjournment thereof (the
"Meeting"), and instructs them to vote as indicated on the matters referred to
in the Proxy Statement for the Meeting, receipt of which is hereby acknowledged,
with discretionary power to vote upon such other business as may properly come
before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The
Board of Trustees recommends that you vote FOR each of the Nominees and FOR each
of the following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL
EXCEPT
- ----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve amendments to the Trust's Declaration of Trust to
permit the issuance of multiple classes of shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on pricing
securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote portfolio
securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the issuance of
senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment policy
on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies regarding
certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on investing in
the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or amend the terms
of any sub-advisory agreement for the Fund without shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To ratify selection of PricewaterhouseCoopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VIII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PROXY
THE RESERVE FUND
U.S. Government Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the U.S. Government Fund held by
the undersigned at the Special Meeting of Shareholders of the Fund to be held at
3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve Funds, 810 Seventh
Avenue, 17th Floor, New York, NY 10019, and at any adjournment thereof (the
"Meeting"), and instructs them to vote as indicated on the matters referred to
in the Proxy Statement for the Meeting, receipt of which is hereby acknowledged,
with discretionary power to vote upon such other business as may properly come
before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board of
Trustees recommends that you vote FOR each of the Nominees and FOR each of the
following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL
EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve amendments to the Trust's Declaration of Trust to
permit the issuance of multiple classes of shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on pricing
securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote portfolio
securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the issuance of
senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment policy
on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies regarding
certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on investing in
the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or amend the terms
of any sub-advisory agreement for the Fund without shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To ratify selection of PricewaterhouseCoopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VIII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
<PAGE>
PROXY
THE RESERVE FUND
U.S. Treasury Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the U.S. Treasury Fund held by the
undersigned at the Special Meeting of Shareholders of the Fund to be held at
3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve Funds, 810 Seventh
Avenue, 17th Floor, New York, NY 10019, and at any adjournment thereof (the
"Meeting"), and instructs them to vote as indicated on the matters referred to
in the Proxy Statement for the Meeting, receipt of which is hereby acknowledged,
with discretionary power to vote upon such other business as may properly come
before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board of
Trustees recommends that you vote FOR each of the Nominees and FOR each of the
following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL
EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve amendments to the Trust's Declaration of Trust to
permit the issuance of multiple classes of shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on pricing
securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote portfolio
securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the issuance of
senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment policy
on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies regarding
certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on investing in
the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or amend the terms
of any sub-advisory agreement for the Fund without shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To ratify selection of Pricewaterhouse Coopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VIII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
<PAGE>
PROXY
THE RESERVE FUND
Strategist Money-Market Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the Strategist Money-Market Fund
held by the undersigned at the Special Meeting of Shareholders of the Fund to be
held at 3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve Funds, 810
Seventh Avenue, 17th Floor, New York, NY 10019, and at any adjournment thereof
(the "Meeting"), and instructs them to vote as indicated on the matters referred
to in the Proxy Statement for the Meeting, receipt of which is hereby
acknowledged, with discretionary power to vote upon such other business as may
properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board
of Trustees recommends that you vote FOR each of the Nominees and FOR each of
the following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve amendments to the Trust's Declaration of Trust to permit
the issuance of multiple classes of shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on
pricing securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material
amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote
portfolio securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the
issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment
policy on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies
regarding certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on
investing in the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or
amend the terms of any sub-advisory agreement for the Fund without
shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To ratify selection of Pricewaterhouse Coopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VIII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or
type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PRELIMINARY PROXY MATERIALS -- FOR SEC USE ONLY
PROXY
RESERVE TAX-EXEMPT TRUST
California Tax-Exempt Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the California Tax-Exempt Fund
held by the undersigned at the Special Meeting of Shareholders of the Fund to be
held at 3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve Funds, 810
Seventh Avenue, 17th Floor, New York, NY 10019, and at any adjournment thereof
(the "Meeting"), and instructs them to vote as indicated on the matters referred
to in the Proxy Statement for the Meeting, receipt of which is hereby
acknowledged, with discretionary power to vote upon such other business as may
properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board
of Trustees recommends that you vote FOR each of the Nominees and FOR each of
the following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve amendments to the Trust's Declaration of Trust to permit
the issuance of multiple classes of shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on
pricing securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material
amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote
portfolio securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the
issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment
policy on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies
regarding certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on
investing in the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or
amend the terms of any sub-advisory agreement for the Fund without
shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To ratify selection of Pricewaterhouse Coopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VIII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or
type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PRELIMINARY PROXY MATERIALS -- FOR SEC USE ONLY
PROXY
RESERVE TAX-EXEMPT TRUST
Connecticut Tax-Exempt Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the Connecticut Tax-Exempt Fund
held by the undersigned at the Special Meeting of Shareholders of the Fund to be
held at 3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve Funds, 810
Seventh Avenue, 17th Floor, New York, NY 10019, and at any adjournment thereof
(the "Meeting"), and instructs them to vote as indicated on the matters referred
to in the Proxy Statement for the Meeting, receipt of which is hereby
acknowledged, with discretionary power to vote upon such other business as may
properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board
of Trustees recommends that you vote FOR each of the Nominees and FOR each of
the following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve amendments to the Trust's Declaration of Trust to permit
the issuance of multiple classes of shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on
pricing securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material
amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote
portfolio securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the
issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment
policy on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies
regarding certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on
investing in the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or
amend the terms of any sub-advisory agreement for the Fund without
shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To ratify selection of Pricewaterhouse Coopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VIII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or
type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PRELIMINARY PROXY MATERIALS -- FOR SEC USE ONLY
PROXY
RESERVE TAX-EXEMPT TRUST
Florida Tax-Exempt Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the Florida Tax-Exempt Fund held
by the undersigned at the Special Meeting of Shareholders of the Fund to be held
at 3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve Funds, 810
Seventh Avenue, 17th Floor, New York, NY 10019, and at any adjournment thereof
(the "Meeting"), and instructs them to vote as indicated on the matters referred
to in the Proxy Statement for the Meeting, receipt of which is hereby
acknowledged, with discretionary power to vote upon such other business as may
properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board
of Trustees recommends that you vote FOR each of the Nominees and FOR each of
the following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve amendments to the Trust's Declaration of Trust to permit
the issuance of multiple classes of shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on
pricing securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material
amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote
portfolio securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the
issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment
policy on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies
regarding certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on
investing in the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or
amend the terms of any sub-advisory agreement for the Fund without
shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To ratify selection of Pricewaterhouse Coopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VIII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or
type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PROXY
RESERVE TAX-EXEMPT TRUST
Massachusetts Tax-Exempt Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the Massachusetts Tax-Exempt Fund
held by the undersigned at the Special Meeting of Shareholders of the Fund to be
held at 3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve Funds, 810
Seventh Avenue, 17th Floor, New York, NY 10019, and at any adjournment thereof
(the "Meeting"), and instructs them to vote as indicated on the matters referred
to in the Proxy Statement for the Meeting, receipt of which is hereby
acknowledged, with discretionary power to vote upon such other business as may
properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board
of Trustees recommends that you vote FOR each of the Nominees and FOR each of
the following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve amendments to the Trust's Declaration of Trust to permit
the issuance of multiple classes of shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on
pricing securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material
amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote
portfolio securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the
issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment
policy on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies
regarding certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on
investing in the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or
amend the terms of any sub-advisory agreement for the Fund without
shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To ratify selection of Pricewaterhouse Coopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VIII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or
type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PROXY
RESERVE TAX-EXEMPT TRUST
New Jersey Tax-Exempt Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the New Jersey Tax-Exempt Fund
held by the undersigned at the Special Meeting of Shareholders of the Fund to be
held at 3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve Funds, 810
Seventh Avenue, 17th Floor, New York, NY 10019, and at any adjournment thereof
(the "Meeting"), and instructs them to vote as indicated on the matters referred
to in the Proxy Statement for the Meeting, receipt of which is hereby
acknowledged, with discretionary power to vote upon such other business as may
properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board
of Trustees recommends that you vote FOR each of the Nominees and FOR each of
the following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve amendments to the Trust's Declaration of Trust to
permit the issuance of multiple classes of shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on
pricing securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material
amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote
portfolio securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the
issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment
policy on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies
regarding certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on
investing in the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or
amend the terms of any sub-advisory agreement for the Fund without
shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To ratify selection of PricewaterhouseCoopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VIII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or
type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PROXY
RESERVE TAX-EXEMPT TRUST
Pennsylvania Tax-Exempt Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the Pennsylvania Tax-Exempt Fund
held by the undersigned at the Special Meeting of Shareholders of the Fund to be
held at 3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve Funds, 810
Seventh Avenue, 17th Floor, New York, NY 10019, and at any adjournment thereof
(the "Meeting"), and instructs them to vote as indicated on the matters referred
to in the Proxy Statement for the Meeting, receipt of which is hereby
acknowledged, with discretionary power to vote upon such other business as may
properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board
of Trustees recommends that you vote FOR each of the Nominees and FOR each of
the following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve amendments to the Trust's Declaration of Trust to permit
the issuance of multiple classes of shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on
pricing securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material
amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote
portfolio securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the
issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment
policy on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies
regarding certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on
investing in the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or
amend the terms of any sub-advisory agreement for the Fund without
shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To ratify selection of PricewaterhouseCoopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VIII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or
type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PROXY
RESERVE TAX-EXEMPT TRUST
Interstate Tax-Exempt Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the Interstate Tax-Exempt Fund
held by the undersigned at the Special Meeting of Shareholders of the Fund to be
held at 3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve Funds, 810
Seventh Avenue, 17th Floor, New York, NY 10019, and at any adjournment thereof
(the "Meeting"), and instructs them to vote as indicated on the matters referred
to in the Proxy Statement for the Meeting, receipt of which is hereby
acknowledged, with discretionary power to vote upon such other business as may
properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board
of Trustees recommends that you vote FOR each of the Nominees and FOR each of
the following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve amendments to the Trust's Declaration of Trust to
permit the issuance of multiple classes of shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on
pricing securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material
amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote
portfolio securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the
issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment
policy on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies
regarding certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on
investing in the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or
amend the terms of any sub-advisory agreement for the Fund without
shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To ratify selection of PricewaterhouseCoopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VIII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or
type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PROXY
RESERVE TAX-EXEMPT TRUST
New York Tax-Exempt Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the New York Tax-Exempt Fund held
by the undersigned at the Special Meeting of Shareholders of the Fund to be held
at 3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve Funds, 810
Seventh Avenue, 17th Floor, New York, NY 10019, and at any adjournment thereof
(the "Meeting"), and instructs them to vote as indicated on the matters referred
to in the Proxy Statement for the Meeting, receipt of which is hereby
acknowledged, with discretionary power to vote upon such other business as may
properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board
of Trustees recommends that you vote FOR each of the Nominees and FOR each of
the following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve amendments to the Trust's Declaration of Trust to
permit the issuance of multiple classes of shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on
pricing securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material
amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote
portfolio securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the
issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment
policy on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies
regarding certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on
investing in the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or
amend the terms of any sub-advisory agreement for the Fund without
shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To ratify selection of PricewaterhouseCoopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VIII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or
type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PROXY
RESERVE INSTITUTIONAL TRUST
Primary Institutional Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the Primary Institutional Fund
held by the undersigned at the Special Meeting of Shareholders of the Fund to be
held at 3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve Funds, 810
Seventh Avenue, 17th Floor, New York, NY 10019, and at any adjournment thereof
(the "Meeting"), and instructs them to vote as indicated on the matters referred
to in the Proxy Statement for the Meeting, receipt of which is hereby
acknowledged, with discretionary power to vote upon such other business as may
properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board
of Trustees recommends that you vote FOR each of the Nominees and FOR each of
the following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on
pricing securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material
amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote
portfolio securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the
issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment
policy on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies
regarding certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on
investing in the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or
amend the terms of any sub-advisory agreement for the Fund without
shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To ratify selection of PricewaterhouseCoopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or
type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PROXY
RESERVE INSTITUTIONAL TRUST
U.S. Treasury Institutional Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the U.S. Treasury Institutional
Fund held by the undersigned at the Special Meeting of Shareholders of the Fund
to be held at 3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve
Funds, 810 Seventh Avenue, 17th Floor, New York, NY 10019, and at any
adjournment thereof (the "Meeting"), and instructs them to vote as indicated on
the matters referred to in the Proxy Statement for the Meeting, receipt of which
is hereby acknowledged, with discretionary power to vote upon such other
business as may properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board
of Trustees recommends that you vote FOR each of the Nominees and FOR each of
the following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on
pricing securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material
amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote
portfolio securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the
issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment
policy on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies
regarding certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on
investing in the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or
amend the terms of any sub-advisory agreement for the Fund without
shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To ratify selection of PricewaterhouseCoopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or
type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PROXY
RESERVE INSTITUTIONAL TRUST
U.S. Government Institutional Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the U.S. Government Institutional
Fund held by the undersigned at the Special Meeting of Shareholders of the Fund
to be held at 3:00 p.m., Eastern Time, on December 17, 1998, at The Reserve
Funds, 810 Seventh Avenue, 17th Floor, New York, NY 10019, and at any
adjournment thereof (the "Meeting"), and instructs them to vote as indicated on
the matters referred to in the Proxy Statement for the Meeting, receipt of which
is hereby acknowledged, with discretionary power to vote upon such other
business as may properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board
of Trustees recommends that you vote FOR each of the Nominees and FOR each of
the following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on
pricing securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material
amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote
portfolio securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the
issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment
policy on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies
regarding certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on
investing in the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or
amend the terms of any sub-advisory agreement for the Fund without
shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To ratify selection of PricewaterhouseCoopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or
type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
PROXY
RESERVE INSTITUTIONAL TRUST
Institutional Interstate Tax-Exempt Fund
SPECIAL MEETING OF SHAREHOLDERS
December 17, 1998
The undersigned hereby appoints MaryKathleen Foynes and Mary A. Belmonte
and each of them, his/her attorneys and proxies with full power of substitution
to vote and act with respect to all shares of the Institutional Interstate
Tax-Exempt Fund held by the undersigned at the Special Meeting of Shareholders
of the Fund to be held at 3:00 p.m., Eastern Time, on December 17, 1998, at The
Reserve Funds, 810 Seventh Avenue, 17th Floor, New York, NY 10019, and at any
adjournment thereof (the "Meeting"), and instructs them to vote as indicated on
the matters referred to in the Proxy Statement for the Meeting, receipt of which
is hereby acknowledged, with discretionary power to vote upon such other
business as may properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board
of Trustees recommends that you vote FOR each of the Nominees and FOR each of
the following proposals:
I. Election of Trustees:
Bruce R. Bent Donald J. Harrington Vincent J. Mattone
Edwin Ehlert, Jr. Bruce R. Bent II Diana P. Herrmann
Henri W. Emmet William E. Viklund Richard Bassuk
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT
----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on
pricing securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
B. To amend the Declaration of Trust to permit non-material
amendments;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. To amend the Declaration of Trust concerning the right to vote
portfolio securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
D. To amend the Declaration of Trust concerning termination of or
reorganization of the Trust;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
E. To amend the Trust's fundamental investment policy on the
issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
F. To amend the Trust's fundamental investment policy regarding
underwriting;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
G. To change the designation of the Trust's fundamental investment
policy on investing for control of portfolio companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
H. To eliminate the Trust's fundamental investment policies
regarding certain portfolio transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I. To eliminate the Trust's fundamental investment policy on
investing in the securities of other investment companies;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
J. To amend the Trust's Bylaws concerning amendments thereto;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. To approve changes to the Trust's fundamental investment policies to
permit a master fund/feeder fund structure.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. To approve the authorization of the Board of Trustees to appoint,
replace or terminate sub-advisers recommended by the adviser or
amend the terms of any sub-advisory agreement for the Fund without
shareholder approval.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VI. To ratify selection of PricewaterhouseCoopers LLP as independent
public accountants of the Trust for the fiscal year ending May 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
VII. To transact such other business as may properly come before the
Meeting
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _________________________, 1998
-------------------------------------
Name of Shareholder(s) -- Please print or
type
-------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
EXHIBIT A
"COMPREHENSIVE FEE"
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT, dated the ____ day of _____________, 1998, made and
entered into by and between _______________ Trust, (the "Trust"), organized as
an unincorporated business trust under the laws of the Commonwealth of
Massachusetts, and RESERVE MANAGEMENT COMPANY, INC., (the "Manager"), a New
Jersey corporation having its principal place of business in 810 Seventh Avenue,
New York, NY 10019, on behalf of the _________________ Fund (the "Portfolio").
WHEREAS, the Trust is engaged as a non-diversified management
investment company and is registered as such under the Investment Company Act of
1940 (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue an unlimited number of shares
of beneficial interest, no par value, in separate series or classes of series,
with each such separate series representing an interest in a separate portfolio
of investment securities and other assets;
The parties agree as follows:
1. Investment Services. The Manager shall select and manage the
Portfolio's investments and shall determine what investments shall be made or
disposed of by the Portfolio and shall effect such acquisitions and
dispositions, all in furtherance of the Portfolio's investment objective and
policies, subject to the overall control and direction of the Trust's Board of
Trustees. The Manager shall report on such activities to the Board of Trustees
of the Trust and shall submit such reports and other information thereon as the
Board of Trustees shall from time to time request. Notwithstanding any other
provision hereof, the Manager, with the approval of the Trust, may contract with
one or more Sub-Investment Managers to perform any of the investment management
services; provided, however, any compensation paid will be the sole
responsibility of the Manager.
2. Other Services and Assumption of Certain Expenses. The Manager shall
furnish to the Trust, on behalf of the Portfolio: (i) the services of a
President and such other executive officers as may be requested by the
Portfolio, (ii) office space and customary office facilities to the extent that
the Portfolio's activities occur in New York, (iii) maintain Portfolio records
not otherwise maintained by the Portfolio's custodian, distributor or
sub-investment managers, and (iv) all accounting, administrative, clerical,
secretarial and statistical services as may be required by the Portfolio for the
operation of its business and compliance with applicable laws. The Manager shall
pay the compensation of all officers of the Trust on behalf of the Portfolio and
all operating and other expenses of the Portfolio except interest charges,
taxes, brokerage fees and commissions, extraordinary legal and accounting fees
and other extraordinary expenses including expenses incurred in connection with
litigation proceedings, other claims and the legal obligations of the Trust to
indemnify its trustees, officers, employees, shareholders, distributors and
other agents of the Trust, payments made pursuant to the Trust's Distribution
Plan, and the fees of the disinterested Trustees. The Manager may contract with
other parties to perform any of the ordinary administrative services required of
the Manager; provided, however any such compensation will be the responsibility
of the Manager.
3. Compensation of the Manager. The Portfolio shall pay to the Manager
as compensation for the services rendered hereunder and as for full
reimbursement for all officers compensation and ordinary operating expenses of
the Portfolio paid by the Manager under paragraph 2 hereof, a Management fee at
an annual rate of ___% of the average daily net asset value of the Portfolio.
The Management fee shall be computed and accrued daily and shall be
paid by the Portfolio to the Manager monthly.
4. Compliance with Applicable Requirements. This Agreement will be
performed in accordance with the requirements of the 1940 Act and the Investment
Advisers Act of 1940 and the rules and regulations under such acts, to the
extent that the subject matter of the Agreement is within the purview of such
acts and such rules and regulations. The Manager will assist the Trust on behalf
of the Portfolio in complying with the requirements of the 1940 Act, and the
Securities Act of 1933, and the rules and regulations under such acts and in
qualifying as a regulated investment company under the Internal Revenue Code of
1986 and applicable regulations of the Internal Revenue Service thereunder. In
carrying out its obligations under this Agreement the Manager shall at all times
conform to the provisions of the Declaration of Trust and By-Laws, the
provisions of the currently effective Registration Statement of the Trust under
the 1940 Act and the Securities Act of 1933, and any other applicable provisions
of state or Federal law.
5. Termination. This Agreement shall be in effect until the close of
business on _____________, 2000 and shall continue in effect from year to year
thereafter but only so long as such continuance is specifically approved at
least annually by (i) either the Board of Trustees of the Trust or a majority
vote of the outstanding voting securities of the Portfolio, provided, however,
that if the shareholders of the Portfolio fail to approve the Agreement, as
provided herein, the Manager may continue to serve in such capacity in the
manner and to the extent permitted by the 1940 Act, and the rules thereunder,
and (ii) the vote of a majority of the Trustees of the Trust who are not parties
to this Agreement or interested persons (as defined in the 1940 Act) of either
party of this Agreement, cast in person at a meeting called for the purpose of
voting on such approval.
Notwithstanding anything herein to the contrary, this Agreement may be
terminated at any time, without payment of any penalty, by the Board of Trustees
of the Trust or by vote of a majority of the outstanding voting securities of
the Portfolio, on 60 days' written notice to the Manager, or by the Manager on
like notice to the Trust.
The name Reserve ______________ shall be deemed to have been licensed
to the Trust by the Manager. In the event of termination of this Agreement, the
Manager may terminate or revoke such license on 90 days written notice to the
Trust. On or before the date of such revocation or termination, the Trust will
change its name to another name which does not include the word "Reserve."
6. Non-Assignability. This Agreement shall not be assignable by either
party hereto and shall automatically terminate forthwith in the event of such
assignment (within the meaning of the 1940 Act).
7. Approval of Agreement and Amendments. This Agreement and any
material amendments hereto shall be approved by vote of the holders of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
the Portfolio, provided, however, that if the shareholders of the Portfolio fail
to approve the Agreement as provided herein, the Manager may continue to serve
in such capacity in the manner and to the extent permitted by the 1940 Act and
the rules thereunder.
8. Non-Exclusivity. The services of the Manager to the Trust are not to
be deemed exclusive and the Trust agrees that the Manager is free to act as
investment manager to various investment companies and other managed accounts.
For purposes of this Agreement and the undertakings provided for herein, the
Manager shall at all times be considered as an independent contractor, and shall
not be considered as an agent of the Trust and shall have no authority to act
for or represent the Trust in any way.
9. Liability of the Manager. In performing its duties hereunder, the
Manager may rely on all documentation and information furnished it by the Trust.
Except as may otherwise be provided by the 1940 Act, neither the Manager nor its
officers, directors, employees or agents shall be subject to any liability for
any act or omission in the course of, connected with or arising out of any
services to be rendered hereunder, except by reason of willful misfeasance, bad
faith or gross negligence in the performance of the Manager's duties or by
reason of reckless disregard of the Manager's obligations and duties under this
Agreement.
10. Notices. Any notices and communications required hereunder shall be
in writing and shall be deemed given when delivered in person or when sent by
first-class, registered or certified mail to the Manager or to the Trust at 810
Seventh Avenue, New York, New York 10019, or at such addresses as either party
may from time to time specify by notice to the other.
11. Governing Law. The terms and provisions of this Agreement shall be
interpreted under and governed by the law of the State of New York.
12. Severability. 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 be deemed to be severable.
13. Shareholder Liability. The Manager understands and agrees that the
obligations of the Trust under this Agreement are not binding upon any
shareholder of the Trust personally, but bind only the Trust and the Trust's
property. The Manager represents that it has notice of the provisions of the
Declaration of Trust of the Trust disclaiming shareholder liability for acts or
obligations of the Trust.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed on the day and year first above written.
______________ TRUST
By ________________________________
President
ATTEST:
- -------------------------
Secretary
RESERVE MANAGEMENT COMPANY, INC.
By ________________________________
President
ATTEST:
- -------------------------
Secretary
EXHIBIT B
FORM OF AMENDMENTS TO IMPLEMENT
MULTIPLE CLASSES OF SHARES
The proposed amendments to each Fund's Declaration of Trust are as follows:
The text of Article Fourth is deleted, and the following text is inserted in its
place:
FOURTH: The following provisions shall apply with respect to the shares
of beneficial interest:
1. Beneficial Interest. The interest of the beneficiaries hereunder
shall be divided into transferable Shares of beneficial interest, all of one
class, except as provided in Sections 2 and 3 of this Article Fourth, par value
$.001 per share. The number of Shares of beneficial interest authorized
hereunder is unlimited. All Shares issued hereunder including, without
limitation, Shares issued in connection with a dividend in Shares or a split of
Shares, shall be fully paid and nonassessable. The Trustees may from time to
time divide or combine the Shares into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Trust.
Contributions to the Trust may be accepted for, and Shares shall be redeemed as,
whole Shares and/or 1/100ths of a Share or integral multiples thereof.
2. Series Designation. The Trustees, in their discretion, may authorize
the division of Shares into two or more Series, and the different Series shall
be established and designated, and the variations in the relative rights and
preferences as between the different Series shall be fixed and determined, by
the Trustees; provided, that all Shares shall be identical except that there may
be variations so fixed and determined between different Series as to investment
objective, purchase price, allocation of expenses, right of redemption, special
and relative rights as to dividends and on liquidation, conversion rights, and
conditions under which the several Series shall have separate voting rights. All
references to Shares in this Declaration shall be deemed to be Shares of any or
all series as the context may require.
If the Trustees shall divide the Shares of the Trust into two or more
Series, the following provisions shall be applicable:
(a) All provisions herein relating to the Trust shall apply equally to
each Series of the Trust except as the context requires otherwise.
(b) The number of authorized Shares and the number of Shares of each
Series that may be issued shall be unlimited. The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and reacquired of
any Series into one or more Series that may be established and designated from
time to time. The Trustees may hold as treasury Shares (of the same or some
other Series), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any Series reacquired by the Trust at their
discretion from time to time.
(c) All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors of such Series and except as may otherwise be required by
applicable laws, and shall be so recorded upon the books of account of the
Trust. In the event that there are any assets, income, earnings, profits, and
proceeds thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series, the Trustees shall allocate them among any
one or more of the Series established and designated from time to time in such
manner and on such basis as they, in their sole discretion, deem fair and
equitable. Each such allocation by the Trustees shall be conclusive and binding
upon the shareholders of all Series for all purposes.
(d) The assets belonging to each particular Series shall be charged
with the liabilities of the Trust in respect of that Series and all expenses,
costs, charges and reserves attributable to that Series, and any general
liabilities, expenses, costs, charges or reserves of the Trust which are not
readily identifiable as belonging to any particular Series shall be allocated
and charged by the Trustees to and among any one or more of the Series
established and designated from time to time in such manner and on such basis as
the Trustees in their sole discretion deem fair and equitable. Each allocation
of liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all Series for all purposes. The
Trustees shall have full discretion, to the extent not inconsistent with the
1940 Act, to determine which items are capital; and each such determination and
allocation shall be conclusive and binding upon the Shareholders. The assets of
a particular Series of the Trust shall, under no circumstances, be charged with
liabilities attributable to any other Series of the Trust. All persons extending
credit to, or contracting with or having any claim against a particular Series
of the Trust shall look only to the assets of that particular Series for payment
of such credit, contract or claim. No Shareholder or former Shareholder of any
Series shall have any claim on or right to any assets allocated or belonging to
any other series.
(e) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series
shall be entitled to receive his pro-rata share of distributions of income and
capital gains made with respect to such Series. Upon redemption of his Shares or
indemnification for liabilities incurred by reason of his being or having been a
Shareholder of a Series, such shareholder shall be paid solely out of the funds
and property of such Series of the Trust. Upon liquidation or termination of a
Series of the Trust, Shareholders of such Series shall be entitled to receive a
pro rata share of the net assets of such Series. A Shareholder of a particular
Series of the Trust shall not be entitled to participate in a derivative or
class action on behalf of any other Series or the Shareholders of any other
Series of the Trust.
(f) The establishment and designation of any Series of Shares shall be
effective upon the execution by a majority of the then Trustees of an instrument
setting forth such establishment and designation and the relative rights and
preferences of such Series, or as otherwise provided in such instrument. The
Trustees may by an instrument executed by a majority of their number abolish any
Series and the establishment and designation thereof. Except as otherwise
provided in this Article Fourth, the Trustees shall have the power to determine
the designations, preferences, privileges, limitations and rights, of each class
and Series of Shares. Each instrument referred to in this paragraph shall have
the status of an amendment to this Declaration.
3. Class Designation. The Trustees, in their discretion, may authorize the
division of the Shares of the Trust, or, if any Series be established, the
Shares of any Series, into two or more Classes, and the different Classes shall
be established and designated, and the variations in the relative rights and
preferences as between the different Classes shall be fixed and determined, by
the Trustees; provided, that all Shares of the Trust or of any Series shall be
identical to all other Shares of the Trust or the same Series, as the case may
be, except that there may be variations between different classes as to
allocation of expenses, right of redemption, special and relative rights as to
dividends and on liquidation, conversion rights, and conditions under which the
several Classes shall have separate voting rights. All references to Shares in
this Declaration shall be deemed to be Shares of any or all Classes as the
context may require.
If the Trustees shall divide the Shares of the Trust or any Series into two or
more Classes, the following provisions shall be applicable:
(a) All provisions herein relating to the Trust, or any Series of the Trust,
shall apply equally to each Class of Shares of the Trust or of any Series of the
Trust, except as the context requires otherwise.
(b) The number of Shares of each Class that may be issued shall be unlimited.
The Trustees may classify or reclassify any unissued Shares of the Trust or any
Series or any Shares previously issued and reacquired of any Class of the Trust
or of any Series into one or more Classes that may be established and designated
from time to time. The Trustees may hold as treasury Shares (of the same or some
other Class), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any Class reacquired by the Trust at their
discretion from time to time.
(c) Liabilities, expenses, costs, charges and reserves related to the
distribution of, and other identified expenses that should properly be allocated
to, the Shares of a particular Class may be charged to and borne solely by such
Class and the bearing of expenses solely by a Class of Shares may be
appropriately reflected (in a manner determined by the Trustees) and cause
differences in the net asset value attributable to, and the dividend, redemption
and liquidation rights of, the Shares of different Classes. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all Classes for all purposes.
(d) The establishment and designation of any Class of Shares shall be effective
upon the execution of a majority of the then Trustees of an instrument setting
forth such establishment and designation and the relative rights and preferences
of such Class, or as otherwise provided in such instrument. The Trustees may, by
an instrument executed by a majority of their number, abolish any Class and the
establishment and designation thereof. Each instrument referred to in this
paragraph shall have the status of an amendment to this Declaration.
4. The ownership of Shares shall be recorded in the books of the Trust or a
transfer agent. The Trustees may make such rules as they consider appropriate
for the transfer of Shares and similar matters. The record books of the Trust or
any transfer agent, as the case may be, shall be conclusive as to who are the
holders of Shares and as to the number of Shares held from time to time by each.
Anything in this Declaration of Trust to the contrary notwithstanding, when
Shares of the Trust are registered in the name of one Shareholder or another,
either Shareholder is entitled to act regarding the Shares so registered and
such Shareholders will indemnify and hold the Trust, its investment adviser,
principal underwriter, custodian or affiliates thereof, harmless for such
actions.
5. The Trustees shall accept investments in the Trust from such persons and on
such terms as they may from time to time authorize. After the date of the
initial contribution of capital (which shall occur prior to the initial public
offering of Shares of the Trust), the number of Shares to represent the initial
contribution shall be considered as outstanding and the amount received by the
Trustees on account of the contribution shall be treated as an asset of the
Trust. Subsequent to such initial contribution of capital, Shares (including
Shares which may have been redeemed or repurchased by the Trust) may be issued
or sold at a price which will net the Trust, before paying any taxes in
connection with such issue or sale, not less than the net asset value (as
defined in Article SEVENTH, Section 12) thereof; provided, however, that the
Trustees may in their discretion impose a sales charge upon investments in the
Trust.
6. Shareholders shall have no preemptive or other right to subscribe to any
additional Shares or other securities issued by the Trust or the Trustees.
In addition, Article Fifth, Section 2 is amended as follows (deleted text is
bracketed, added text is underlined):
2. [At] Except as provided herein, at all meetings of Shareholders each
Shareholder shall be entitled to one vote for each Share standing in his name on
the books of the Trust on the date, fixed in accordance with the By-Laws, for
determination of Shareholders entitled to vote at such meeting except for Shares
redeemed prior to the meeting[. Any], and any fractional Share shall carry
proportionately all the rights of a whole Share, including the right to vote and
the right to receive dividends. Notwithstanding the foregoing, the Trustees may,
in conjunction with the establishment of any Series or Class of Shares,
establish or reserve the right to establish conditions under which the several
Series or Classes shall have separate voting rights or, if a Series or Class
would not, in the sole judgment of the Trustees, be materially affected by a
proposal, no voting rights. The presence in person or by proxy of the holders of
one-third of the Shares outstanding and entitled to vote thereat shall
constitute a quorum at any meeting of the Shareholders. If at any meeting of the
Shareholders there shall be less than a quorum present, the Shareholders present
at such meeting may, without further notice, adjourn the same from time to time
until a quorum shall attend, but no business shall be transacted at any such
adjourned meeting except such as might have been lawfully transacted had the
meeting not been adjourned.
