<PAGE>
[LOGO] THE RESERVE FUNDS
Founders of "America's First Money Fund" Est. 1970
1250 Broadway, New York, NY 10001-3701
(212) 401-5500
GENERAL INFORMATION AND 24-HOUR YIELD AND BALANCE INFORMATION
800-637-1700
This literature is not authorized for distribution to prospective investors
unless preceded or accompanied by an appropriate current prospectus.
Distributor--Resrv Partners, Inc.
RF/ANNUAL 07/99
[LOGO] THE RESERVE FUNDS
Founders of "America's First Money Fund" Est. 1970
ANNUAL REPORT
RESERVE INSTITUTIONAL TRUST
PRIMARY INSTITUTIONAL FUND
U.S. GOVERNMENT INSTITUTIONAL FUND
U.S. TREASURY INSTITUTIONAL FUND
INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
MAY 31, 1999
<PAGE>
RESERVE INSTITUTIONAL TRUST--PRIMARY INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--MAY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT NEGOTIABLE BANK CERTIFICATES OF DEPOSIT--55.7% (NOTE 1)
- ------------ ---------------------------------------------- ------------
<S> <C> <C>
DOMESTIC--15.0%
$ 13,000,000 BankBoston, NA, 4.88%, 7/27/99................................................................. $ 13,000,000
9,000,000 Bankers Trust Co. N.Y., 4.92%, 6/30/99......................................................... 9,000,054
9,000,000 Morgan Guaranty Trust Co. N.Y., 4.88%, 7/12/99................................................. 9,000,000
13,000,000 South Trust Bank of Alabama NA, 4.885%, 7/26/99................................................ 13,000,000
------------
44,000,054
------------
EURO--20.2%
9,000,000 Abbey National PLC, 4.90%, 7/7/99.............................................................. 9,000,059
9,000,000 Credit Agricole Indosuez, 4.89%, 7/12/99....................................................... 9,000,000
9,000,000 Dresdner Bank, 4.85%, 6/21/99.................................................................. 9,000,000
13,000,000 National Westminster Bank PLC, 4.98%, 9/2/99*.................................................. 13,000,000
10,000,000 Norddeutsche Landesbank Girozentrale, 4.88%, 8/16/99........................................... 10,000,104
9,000,000 Svenska Handelsbanken, 4.875%, 6/8/99.......................................................... 9,000,009
------------
59,000,172
------------
YANKEE--20.5%
13,000,000 Banque Nationale de Paris, 4.95%, 8/27/99...................................................... 13,000,000
12,000,000 BHF Bank AG, 4.86%, 6/18/99.................................................................... 12,000,000
13,000,000 Canadian Imperial Bank of Commerce, 4.82%, 6/28/99............................................. 13,000,000
13,000,000 Lloyds Bank PLC, 4.90%, 7/26/99................................................................ 13,000,000
9,000,000 Westdeutsche Landesbank Girozentrale, 4.88%, 6/16/99........................................... 9,000,000
------------
60,000,000
------------
Total Negotiable Bank Certificates of Deposit (Cost $163,000,226).............................. 163,000,226
------------
COLLATERALIZED PROMISSORY NOTES--6.1% (B)
9,000,000 ABN/AMRO, 4.82%, 7/19/99....................................................................... 8,942,100
9,000,000 Societe Generale, North America, Inc., 4.83%, 6/9/99........................................... 8,990,330
------------
Total Collateralized Promissory Notes (Cost $17,932,430)....................................... 17,932,430
------------
REPURCHASE AGREEMENTS--42.4%
59,000,000 Bear, Stearns & Co. Inc., 4.90%, 6/1/99 (collateralized by GNMA 6.50%-7.00% due from 7/15/27 to
5/15/29 valued at $61,117,008)................................................................ 59,000,000
65,000,000 Salomon Smith Barney, 4.90%, 6/1/99 (collateralized by FNMA 5.50%-10.00% due from 11/1/99 to
6/1/29 valued at 54,688,000, and FMAC 5.50%-8.50% due from 9/1/09 to 5/1/29 valued at
$13,693,239).................................................................................. 65,000,000
------------
Total Repurchase Agreements (Cost $124,000,000)................................................ 124,000,000
------------
TOTAL INVESTMENTS (COST $304,932,656)................................................. 104.2% 304,932,656
LIABILITIES, LESS OTHER ASSETS........................................................ (4.2) (12,387,483)
------ ------------
NET ASSETS............................................................................ 100.0% $292,545,173
------ ------------
------ ------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE OF EACH CLASS BASED ON
SHARES OF BENEFICIAL INTEREST $.001 PAR VALUE OUTSTANDING AND EQUIVALENT TO
THE NET ASSETS OF EACH CLASS:
75,801,361 SHARES CLASS A..................................................... $1.00
=====
4,223,363 SHARES CLASS B...................................................... $1.00
=====
58,440,601 SHARES CLASS C..................................................... $1.00
=====
154,079,848 SHARES TREASURER'S TRUST.......................................... $1.00
=====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE>
RESERVE INSTITUTIONAL TRUST--U.S. GOVERNMENT INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--MAY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT REPURCHASE AGREEMENTS-98.1% (NOTE 1)
- ------------ --------------------------- ------------
<S> <C> <C>
$ 14,000,000 Bear, Stearns & Co. Inc., 4.88%, 6/1/99 (collateralized by GNMA, 6.375%-8.00%, due from 5/15/14
to 10/15/27, valued at $15,802,826)........................................................... $ 14,000,000
11,000,000 Prudential Securities Inc., 4.85%, 6/1/99 (collateralized by GNMA, 6.50%-9.75%, due from
4/15/14 to 5/15/29, valued at $11,330,000).................................................... 11,000,000
11,000,000 Goldman Sachs, 4.75%, 6/1/99 (collateralized by GNMA, 6.00%-7.00%, due from 12/15/28 to
2/15/29, valued at $11,330,000)............................................................... 11,000,000
11,000,000 Salomon Smith Barney, 4.90%, 6/1/99 (collateralized by GNMA, 7.00%, due 6/20/28, valued at
$11,330,000).................................................................................. 11,000,000
------------
TOTAL INVESTMENTS (COST $47,000,000).................................................. 98.1% 47,000,000
OTHER ASSETS, LESS LIABILITIES........................................................ 1.9 900,877
------ ------------
NET ASSETS............................................................................ 100.0% $ 47,900,877
------ ------------
------ ------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE OF EACH CLASS BASED ON SHARES
OF BENEFICIAL INTEREST $.001 PAR VALUE OUTSTANDING AND EQUIVALENT TO THE NET ASSETS
OF EACH CLASS:
36,526,992 SHARES CLASS A..................................................... $1.00
=====
6,438,967 SHARES CLASS B...................................................... $1.00
=====
4,934,918 SHARES TREASURER'S TRUST............................................ $1.00
=====
</TABLE>
RESERVE INSTITUTIONAL TRUST--U.S. TREASURY INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--MAY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT U.S. TREASURY BILLS--99.5% (NOTE 1)
- ------------ -------------------------- ------------
<S> <C> <C>
$ 1,200,000 4.39%, 6/10/99................................................................................. $ 1,198,683
500,000 4.48%, 6/24/99................................................................................. 498,569
1,500,000 4.465%, 8/5/99................................................................................. 1,487,907
2,800,000 4.475%, 8/12/99................................................................................ 2,774,940
3,500,000 4.42%-4.485%, 8/19/99.......................................................................... 3,465,909
2,200,000 4.515%, 8/26/99................................................................................ 2,176,291
2,700,000 4.315%-4.36%, 9/2/99........................................................................... 2,669,729
300,000 4.48%, 9/16/99................................................................................. 296,005
1,100,000 4.57%, 10/14/99................................................................................ 1,081,150
------------
TOTAL INVESTMENTS (COST $15,649,183).................................................. 99.5% 15,649,183
OTHER ASSETS, LESS LIABILITIES........................................................ .5 74,911
------ ------------
NET ASSETS............................................................................ 100.0% $ 15,724,094
------ ------------
------ ------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE BASED ON 15,724,094 SHARES OF
TREASURER'S TRUST BENEFICIAL INTEREST $.001 PAR VALUE OUTSTANDING:............................ $1.00
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
RESERVE INSTITUTIONAL TRUST--INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--MAY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--97.7% (NOTE 1)
- ------------ ----------------------------- ------------
<S> <C> <C>
ARIZONA--10.6%
$ 700,000 Apache County IDA for Tucson Electric Power Company Series 83A, 3.25%, 12/15/18 (a)............ $ 700,000
1,500,000 Apache County IDA for Tucson Electric Power Company Series 83B, 3.40%, 12/15/18 (a) 1,500,000
1,500,000 Pima County IDA PCR for Tucson Electric Project, 3.40%, 10/1/22 (a)............................ 1,500,000
------------
3,700,000
------------
COLORADO--1.4%
500,000 Smith Creek Metropolitan District Eagle County, 3.30%, 10/1/35 (a)............................. 500,000
------------
DISTRICT OF COLUMBIA--1.4%
500,000 Washington, DC George Washington University, 3.35%, 3/1/06 (a)................................. 500,000
------------
FLORIDA--5.2%
500,000 Florida Local Gov't Financial Authority for Lake Wales Medical Centers, Series A, 3.25%,
3/1/15 (a).................................................................................... 500,000
1,000,000 Manatee County PCR for Florida Power and Light, 3.30%, 9/1/24 (a).............................. 1,000,000
300,000 Martin County PCR for Florida Power and Light Co., Series 94, 3.30%, 9/1/24 (a)................ 300,000
------------
1,800,000
------------
GEORGIA--4.3%
1,000,000 Clayton County Housing Authority for Rainwood Development, Ser. 85A, 3.47%, 5/1/06 (a)......... 1,000,000
500,000 Hapeville IDA for Hapeville Hotel Partnership Project, 3.30%, 11/1/05 (a)...................... 500,000
------------
1,500,000
------------
ILLINOIS--4.4%
500,000 Chicago Emergency Telephone System GOB, 4.50%, 1/1/00.......................................... 503,408
1,000,000 Illinois Health Facility Authority Revolving Fund Pooled Series 1985 F, 3.20%, 8/1/15 (a)...... 1,000,000
------------
1,503,408
------------
IOWA--1.4%
500,000 Iowa Finance Authority Bonds for Health Care Systems Series 98 B, 3.25%, 7/1/20 (a)............ 500,000
------------
LOUISIANA--5.7%
500,000 Calcasieu Parish, Sales Tax District 4A, 3.25%, 9/1/99......................................... 500,000
1,500,000 Lake Charles Harbor & Terminal District--CITGO Peter Corp. Series 84, 3.30%, 8/1/07 (a)........ 1,500,000
------------
2,000,000
------------
MARYLAND--3.7%
1,300,000 Baltimore IDA for Mayor and City Council Project, 3.20%, 8/1/16 (a)............................ 1,300,000
------------
MASSACHUSETTS--6.9%
400,000 Massachusetts GOB Series 97, 3.25%, 8/1/15 (a)................................................. 400,000
500,000 Massachusetts IFA for Governor Dummer Academy, 3.15%, 7/1/26 (a)............................... 500,000
1,000,000 Massachusetts Water Resource Authority Series 97 A, 3.05%, 4/1/28 (a).......................... 1,000,000
500,000 Triton Regional School District BAN, 3.50%, 4/12/00............................................ 501,462
------------
2,401,462
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
RESERVE INSTITUTIONAL TRUST--INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--MAY 31, 1999 (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--(CONTINUED) (NOTE 1)
- ------------ ----------------------------------- ------------
<S> <C> <C>
MICHIGAN--8.7%
$ 1,000,000 Garden City Hospital Finance Authority, 3.30%, 9/1/26 (a)...................................... $ 1,000,000
1,000,000 Michigan Housing Development Authority for Laurel Valley, 3.25%, 12/1/07 (a)................... 1,000,000
500,000 Michigan Job Development Authority for Gordon Food Service, 3.25%, 8/1/15 (a).................. 500,000
500,000 Michigan Job Development Authority for Hitachi Metals, 4.15%, 1/1/04 (a)....................... 500,000
------------
3,000,000
------------
NEW JERSEY--1.4%
500,000 New Jersey EDA for Volvo of America Corp., 3.79%, 12/1/04 (a).................................. 500,000
------------
NEW YORK--9.2%
500,000 New York City GOB Series A4, 3.30%, 8/1/23 (a)................................................. 500,000
700,000 New York City GOB Series A7, 3.40%, 8/1/20 (a)................................................. 700,000
1,000,000 New York City GOB Series E3, 3.40%, 8/1/23 (a)................................................. 1,000,000
1,000,000 New York City GOB Series E6, 3.40%. 8/1/19 (a)................................................. 1,000,000
------------
3,200,000
------------
OHIO--1.4%
500,000 Sharonville IDA for Edgecomb Metals Inc., 3.25%, 11/1/09 (a)................................... 500,000
------------
OKLAHOMA--1.4%
500,000 Oklahoma IDA for Christian College, 4.62%, 7/1/15 (a).......................................... 500,000
------------
PENNSYLVANIA--13.7%
1,000,000 Allegheny Hospital Dev. Auth. for Allegheny Hospital Series B, 4.30%, 9/1/20 (a)............... 1,000,000
500,000 Allegheny Hospital Dev. Auth. for Children's Hospital Series B, 3.30%, 12/1/15 (a)............. 500,000
475,000 Clarion County IDA Special Development Revenue Bonds for Meritcare Project, Series A, 3.30%,
12/1/12 (a)................................................................................... 475,000
800,000 Delaware Valley Finance Authority Rev. Bonds Series 85A, 3.20%, 12/1/20 (a).................... 800,000
500,000 Emmaus GOB Local Government Revenue Bonds, 3.25%, 12/1/28 (a).................................. 500,000
1,000,000 Lehigh IDA for Allentown Airport, 3.30%, 12/1/05 (a)........................................... 1,000,000
500,000 York County General Authority Pooled Financing, 3.25%, 9/1/26 (a).............................. 500,000
------------
4,775,000
------------
TENNESSEE--1.3%
455,000 Chattanooga IDA for Baylor School Project, 3.30%, 11/1/16 (a).................................. 455,000
------------
TEXAS--5.6%
500,000 Harris County HFDC for Greater Houston Project, 3.40%, 11/1/25 (a)............................. 500,000
1,000,000 Midlothian IDC for Holnam Inc., 3.30%, 12/1/09 (a)............................................. 1,000,000
465,000 Port Arthur IDC for American Petrofina, 3.35%, 5/1/03 (a)...................................... 465,000
------------
1,965,000
------------
VIRGINIA--4.3%
1,500,000 Hampton MFHRB Avalon at Hampton I-A Project, 3.15%, 6/15/26 (a)................................ 1,500,000
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
RESERVE INSTITUTIONAL TRUST--INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
STATEMENT OF NET ASSETS--MAY 31, 1999 (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--(CONTINUED) (NOTE 1)
- ------------ ----------------------------------- ------------
<S> <C> <C>
WASHINGTON--4.3%
$ 1,500,000 Port of Seattle IDC for Douglas Management Corp., 4.20%, 12/1/05 (a)........................... $ 1,500,000
------------
WISCONSIN--1.4%
500,000 Green Bay IDA for St. Mary Cement Company Ltd., 3.60%, 11/1/00 (a)............................. 500,000
------------
34,099,870
TOTAL INVESTMENTS (COST $34,099,870)............................................. 97.7%
OTHER ASSETS, LESS LIABILITIES................................................... 2.3 813,421
----- ------------
NET ASSETS....................................................................... 100.0% $ 34,913,291
----- ------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE BASED ON SHARES OF
EACH CLASS OF BENEFICIAL INTEREST $.001 PAR VALUE OUTSTANDING AND EQUIVALENT
TO THE NET ASSETS OF EACH CLASS:
11,185,912 SHARES CLASS A..................................................... $1.00
23,727,379 SHARES TREASURER'S TRUST........................................... $1.00
</TABLE>
- ---------------
(a) The interest rates, as reported May 31, 1999, are subject to change
periodically. The securities are payable on demand and are collateralized by
letters of credit, other bank credit agreements or financial guaranty
assurance agencies.
(b) Collateralized by bank letters of credit.
* Represents a when-issued security.
GLOSSARY
BAN = Bond Anticipation Note
EDA = Economic Development Authority
IFA = Industrial Finance Authority
FMAC = FHLMC Adjustable Rate Mortgage-Backed Pass-Through
Participation Certificates
GNMA = Government National Mortgage Association Mortgage-Backed
Pass-Through Securities
GOB = General Obligation Bonds
HFDC = Housing Finance Development Corp.
IDA = Industrial Development Authority Revenue Bonds
IDC = Industrial Development Corp Revenue Bonds
MFHRB = Multi-Family Housing Revenue Bonds
PCR = Pollution Control Revenue Bonds
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
RESERVE INSTITUTIONAL TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MAY 31, 1999
<TABLE>
<CAPTION>
U.S. U.S. INTERSTATE
PRIMARY GOVERNMENT TREASURY TAX-EXEMPT
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
FUND FUND FUND FUND
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INTEREST INCOME (Note 1)................................ $ 9,718,458 $ 2,137,540 $ 319,321 $ 567,078
----------- ----------- --------- ---------
EXPENSES (Note 2)
Comprehensive fees:................................... 471,714 109,902 18,824 41,856
12b-1 fees (Class C).................................. 8,367 -- -- --
Shareholder services fees:
Class B............................................. 8,623 9,173 -- 320
Class C............................................. 8,367 -- -- --
Treasurer's Trust................................... 355,497 14,807 18,824 37,241
Other operating expenses--
Treasurer's Trust................................... 141,928 5,855 7,520 14,891
----------- ----------- --------- ---------
Total Expenses before waivers......................... 994,496 139,737 45,168 94,308
Less: expenses waived................................. -- -- (27,253) --
----------- ----------- --------- ---------
Net Expenses.......................................... 994,496 139,737 17,915 94,308
----------- ----------- --------- ---------
NET INVESTMENT INCOME, representing Net Increase in Net
Assets from Investment Operations..................... $ 8,723,962 $ 1,997,803 $ 301,406 $ 472,770
----------- ----------- --------- ---------
----------- ----------- --------- ---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENT.
7
<PAGE>
RESERVE INSTITUTIONAL TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PRIMARY U.S. GOVERNMENT U.S. TREASURY
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
--------------------------------- ------------------------------- --------------
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED PERIOD ENDED
MAY 31, MAY 31, MAY 31, MAY 31, MAY 31,
1999 1998 1999 1998(A) 1999(C)
--------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS FROM
INVESTMENT OPERATIONS:
Net investment income... $ 8,723,962 $ 6,104,300 $ 1,997,803 $ 129,906 $ 301,406
--------------- ------------- ------------- ----------- ------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM NET
INVESTMENT INCOME
(Note 1):
Class A................. (1,858,597) (562,364) (1,520,574) -- --
Class B................. (206,486) (748,323) (215,653) (119,221) --
Class C................. (137,927) -- -- (10,685) --
Treasurer's Trust....... (6,520,952) (4,793,613) (261,576) -- (301,406)
--------------- ------------- ------------- ----------- ------------
Total Dividends to
Shareholders............ (8,723,962) (6,104,300) (1,997,803) (129,906) (301,406)
--------------- ------------- ------------- ----------- ------------
FROM CAPITAL SHARE
TRANSACTIONS (at net
asset value of $1.00 per
share):
Net proceeds from sale
of shares............. 1,544,713,374 930,964,321 185,966,100 17,950,641 48,349,768
Dividends reinvested.... 8,723,962 6,104,300 1,997,803 129,906 301,406
Cost of shares
redeemed.............. (1,447,380,639) (752,587,782) (149,132,456) (9,011,117) (32,927,080)
--------------- ------------- ------------- ----------- ------------
Net increase derived
from capital share
transactions and from
Investment
operations............ 106,056,697 184,480,839 38,831,447 9,069,430 15,724,094
NET ASSETS:
Beginning of period...... 186,488,476 2,007,637 9,069,430 -- --
--------------- ------------- ------------- ----------- ------------
End of period............ $ 292,545,173 $ 186,488,476 $ 47,900,877 $ 9,069,430 $ 15,724,094
--------------- ------------- ------------- ----------- ------------
--------------- ------------- ------------- ----------- ------------
<CAPTION>
INTERSTATE
TAX-EXEMPT
INSTITUTIONAL
------------------------------
YEAR ENDED PERIOD ENDED
MAY 31, MAY 31,
1999 1998(B)
------------ -------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS FROM
INVESTMENT OPERATIONS:
Net investment income... $ 472,770 $ 24,600
------------ -------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM NET
INVESTMENT INCOME
(Note 1):
Class A................. (52,593) --
Class B................. (4,840) --
Class C................. -- (24,600)
Treasurer's Trust....... (415,337) --
------------ -------------
Total Dividends to
Shareholders............ (472,770) (24,600)
------------ -------------
FROM CAPITAL SHARE
TRANSACTIONS (at net
asset value of $1.00 per
share):
Net proceeds from sale
of shares............. 102,124,017 14,845,121
Dividends reinvested.... 472,770 24,600
Cost of shares
redeemed.............. (81,714,432) (838,785)
------------ -------------
Net increase derived
from capital share
transactions and from
Investment
operations............ 20,882,355 14,030,936
NET ASSETS:
Beginning of period...... 14,030,936 --
------------ -------------
End of period............ $ 34,913,291 $ 14,030,936
------------ -------------
------------ -------------
</TABLE>
- ---------------
(a) For the period from September 15, 1997 (Commencement of Operations) to
May 31, 1998.
(b) For the period from May 13, 1998 (Commencement of Operations) to
May 31, 1998.
(c) For the period October 21, 1998 (Commencement of Operations) to May 31,
1999.
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES:
Reserve Institutional Trust (the "Trust") is registered under the
Investment Company Act of 1940 as a non-diversified, open-end investment
company. The policies summarized below are consistently followed in the
preparation of its financial statements in conformity with generally
accepted accounting principles.
A. The Trust's authorized shares of beneficial interest are unlimited, and
currently are divided into four series: Primary Institutional, U.S.
Government Institutional, U.S. Treasury Institutional and Interstate
Tax-Exempt Institutional (collectively the "Funds"). Additionally, each
Fund is divided into five classes of shares with similar investment
objectives, but with different expense ratios.
B. Securities are valued at amortized cost, which approximates market
value. The amortized cost method values a security at cost at the time of
purchase, and thereafter assumes a constant amortization to maturity of
any discount or premium, irrespective of intervening changes in interest
rates or market values. The maturity of floating or variable rate
instruments in which the Fund may invest will be deemed to be, for
floating rate instruments (1) the notice period required before the Fund
is entitled to receive payment of the principal amount of the instrument;
and for variable rate instruments the longer of (1) above or (2) the
period remaining until the instrument's next rate adjustment, for purpose
of Rule 2a-7 and for computing the portfolio's average weighted life to
maturity.
C. It is the Trust's policy to comply with Subchapter M of the Internal
Revenue Code and to distribute all of its taxable income to its
shareholders. Accordingly, no Federal income tax provision is required.
D. Security transactions are recorded on a trade date basis; interest
income is accrued daily and security premium or discount is amortized or
accreted daily. Net investment income is distributed to shareholders daily
and automatically reinvested in additional Fund shares.
E. Expenses are allocated based on a Fund's net assets and/or number of
shareholder accounts. Those expenses recognized as directly attributable
to a specific Fund are charged to that Fund directly.
F. The Trusts may enter into repurchase agreements with financial
institutions and securities dealers who are deemed credit-worthy pursuant
to guidelines established by the Funds' Board of Trustees. The Funds'
Investment Adviser will follow procedures intended to provide that all
repurchase agreements are at least 100% collateralized as to principal and
interest. However, in the event of default or bankruptcy by the seller,
realization and/or retention of the collateral may be subject to legal
proceedings. The Trust's custodian holds the underlying securities subject
to repurchase agreements.
(2) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
Pursuant to an Investment Management Agreement (the "Agreement") between
Reserve Management Company, Inc. ("RMCI") and the Funds, RMCI serves as
the Funds' Investment Adviser subject to the direction of the Board of
Trustees. Under the Agreement, RMCI is responsible for the supervision of
the day-to-day operations of each Fund. RMCI manages the Fund's
investments, effects purchases and sales thereof, and absorbs certain
promotional expenses. For its services as Investment Adviser, RMCI charges
each Class a comprehensive management fee of .25% of the average daily net
assets.
Each Fund's operating expenses are limited to an annual rate of .25% for
Class A, .45% for Class B and .60% for Treasurer's Trust of each Class'
average daily net assets. The operating expense limitation does not
include brokerage fees and commissions, interest charges, taxes and
extraordinary legal fees and expenses. During the year ended May 31, 1999,
RMCI voluntarily waived $27,253 of U.S. Treasury Institutional Fund's
total expenses.
DISTRIBUTION ASSISTANCE AND SHAREHOLDER SERVICE:
Pursuant to a Plan of Distribution, each Fund makes payments to firms for
distribution assistance and administrative services provided to
shareholders of Class C and D at an annual rate of .25% and .50%,
respectively. To date, no payments have been made by Class D since it has
yet to begin operations. In addition, under the Plan, shareholders of
Class B, C, D and Treasurer's Trust may make payments to firms (including
RMCI) providing shareholder services, including maintaining shareholder
accounts, responding to shareholder inquiries and providing certain other
services, at an annual rate of .20%, .25%, .25% and .25%, respectively.
(3) MANAGEMENT'S USE OF ESTIMATES:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the dates of the financial statements and the reported amounts of income
and expenses during the reporting periods. Actual results could differ
from those estimates.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(4) COMPOSITION OF NET ASSETS:
At May 31, 1999, the composition of each Fund's net assets was as follows:
<TABLE>
<CAPTION>
INTERSTATE
PRIMARY U.S. GOVERNMENT U.S. TREASURY TAX-EXEMPT
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
FUND FUND FUND FUND
------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Par Value............................................. $ 292,545 $ 47,900 $ 15,724 $ 34,913
Paid-in-Capital....................................... 292,252,628 47,852,977 15,708,370 34,878,378
------------- ------------- ----------- -----------
Net Assets............................................ $ 292,545,173 $ 47,900,877 $15,724,094 $34,913,291
------------- ------------- ----------- -----------
------------- ------------- ----------- -----------
</TABLE>
(5) CAPITAL SHARE TRANSACTIONS
For the years ended May 31, 1999 and 1998, the capital share transactions
with each share representing $1 of net assets of each Fund was as follows:
<TABLE>
<CAPTION>
YEAR ENDED MAY 31, 1999:
PRIMARY INSTITUTIONAL
TREASURER'S
CLASS A CLASS B TRUST CLASS C
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Sold............................................... 591,162,085 10,331,062 876,047,357 67,172,870
Reinvested......................................... 1,858,597 206,486 6,520,952 137,928
Redeemed........................................... (521,631,338) (16,690,430) (900,188,675) (8,870,196)
-------------- ------------- ------------- -------------
Net Increase (Decrease)............................ 71,389,344 (6,152,882) (17,620,366) 58,440,602
-------------- ------------- ------------- -------------
-------------- ------------- ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT INSTITUTIONAL
TREASURER'S
CLASS A CLASS B TRUST
------------ ------------ ------------
<S> <C> <C> <C> <C>
Sold................................................................... 122,168,766 32,646,145 31,151,190
Reinvested............................................................. 1,520,574 215,653 261,577
Redeemed............................................................... (87,162,348) (32,230,911) (29,739,198)
------------ ------------ ------------
Net Increase (Decrease)................................................ 36,526,992 630,887 1,673,569
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
U.S. TREASURY INSTITUTIONAL
TREASURER'S
TRUST
-----------
<S> <C> <C>
Sold................................................................................................. 48,349,768
Reinvested........................................................................................... 301,406
Redeemed............................................................................................. (32,927,080)
-----------
Net Increase (Decrease).............................................................................. 15,724,094
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
INTERSTATE TAX-EXEMPT INSTITUTIONAL
TREASURER'S
CLASS A CLASS B TRUST
------------ ------------ ------------
<S> <C> <C> <C> <C>
Sold................................................................... 13,573,613 572,192 87,978,212
Reinvested............................................................. 52,593 4,840 415,337
Redeemed............................................................... (2,440,294) (577,032) (78,697,106)
------------ ------------ ------------
Net Increase (Decrease)................................................ 11,185,912 -- 9,696,443
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED MAY 31, 1998:
PRIMARY INSTITUTIONAL
TREASURER'S
CLASS A CLASS B TRUST
------------ ------------ -------------
<S> <C> <C> <C> <C>
Sold.................................................................. 80,769,940 46,220,750 803,973,631
Reinvested............................................................ 562,364 748,323 4,793,613
Redeemed.............................................................. (76,920,287) (38,600,465) (637,067,030)
------------ ------------ -------------
Net Increase (Decrease)............................................... 4,412,017 8,368,608 171,700,214
------------ ------------ -------------
------------ ------------ -------------
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT INSTITUTIONAL
CLASS B CLASS C
------------ ------------
<S> <C> <C> <C>
Sold................................................................................. 14,076,079 3,874,562
Reinvested........................................................................... 119,221 10,685
Redeemed............................................................................. (8,387,219) (623,898)
------------ ------------
Net Increase (Decrease).............................................................. 5,808,081 3,261,349
------------ ------------
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
INTERSTATE TAX-EXEMPT INSTITUTIONAL
CLASS C
-----------
<S> <C> <C>
Sold................................................................................................. 14,845,121
Reinvested........................................................................................... 24,600
Redeemed............................................................................................. (838,785)
-----------
Net Increase (Decrease).............................................................................. 14,030,936
-----------
-----------
</TABLE>
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(6) FINANCIAL HIGHLIGHTS:
Contained below is per share operating performance data for a share of
beneficial interest outstanding for the periods as indicated.
<TABLE>
<CAPTION>
PRIMARY INSTITUTIONAL FUND
CLASS A CLASS B TREASURER'S TRUST CLASS C
------------------ ----------------------------- ------------------ ------------
FISCAL FISCAL
YEAR PERIOD FISCAL YEAR PERIOD YEAR PERIOD PERIOD ENDED
ENDED ENDED ENDED MAY 31, ENDED ENDED ENDED MAY 31,
MAY 31, MAY 31, ------------------ MAY 31, MAY 31, MAY 31, ------------
1999 1998(A) 1999 1998 1997(B) 1999 1998(C) 1999(F)
------- ------- ------- ------- ------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period.... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $ 1.0000
------- ------- ------- ------- ------- ------- ------- --------
Net investment income
from investment
operations............. .0509 .0332 .0488 .0529 .0179 .0470 .0322 .0036
Less dividends from net
investment income...... (.0509) (.0332) (.0488) (.0529) (.0179) (.0470) (.0322) (.0036)
------- ------- ------- ------- ------- ------- ------- --------
Net asset value at end of
period................. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $ 1.0000
------- ------- ------- ------- ------- ------- ------- --------
------- ------- ------- ------- ------- ------- ------- --------
Total Return............. 5.09% 5.49%(d) 4.88% 5.29% 4.95%(d) 4.70% 5.13%(d) 4.11%(d)
RATIOS/SUPPLEMENTAL DATA
Net assets end of period
(millions)............. $ 75.8 $ 4.4 $ 4.2 $ 10.4 $ 2.0 $ 154.1 $ 171.7 $ 58.4
Ratio of expenses to
average net assets..... .25% .25%(d) .45% .45% .50%(d)(e) .60% .60%(d) .75%(d)
Ratio of net investment
income to average net
assets................. 4.79% 5.35%(d) 4.79% 5.16% 4.81%(d)(e) 4.59% 5.00%(d) 4.12%(d)
</TABLE>
---------------
(a) From October 23, 1997 (Commencement of Operations) to May 31, 1998.
(b) From January 21, 1997 (Commencement of Operations) to May 31, 1997.
(c) From October 15, 1997 (Commencement of Operations) to May 31, 1998.
(d) Annualized.
(e) Due to the voluntary waiver of certain expenses by RMCI, the net
expense ratio and net investment income amounted to .48% and 4.83%,
respectively, for the period ended May 31, 1997.
(f) From April 30, 1999 (Commencement of Operations) to May 31, 1999.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
U.S. GOVERNMENT INSTITUTIONAL FUND
CLASS A CLASS B TREASURER'S TRUST
------------ ----------------------------- -----------------------------
PERIOD ENDED FISCAL YEAR PERIOD ENDED FISCAL YEAR PERIOD ENDED
MAY 31, ENDED MAY 31, MAY 31, ENDED MAY 31,
1999(A) 1999 1998(B) MAY 31, 1999 1998(C)
------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period.... $ 1.0000 $1.0000 $ 1.0000 $1.0000 $ 1.0000
-------- ------- -------- ------- --------
Net investment income from investment
operations.............................. .0228 .0471 .0364 .0455 .0036
Less dividends from net investment
income.................................. (.0228) (.0471) (.0364) (.0455) (.0036)
-------- ------- -------- ------- --------
Net asset value at end of period.......... $ 1.0000 $1.0000 $ 1.0000 $1.0000 $ 1.0000
-------- ------- -------- ------- --------
-------- ------- -------- ------- --------
Total Return.............................. 4.60%(d) 4.71% 5.13%(d) 4.55% 4.85%(d)
RATIOS/SUPPLEMENTAL DATA
Net assets end of period (millions)....... $ 36.5 $ 6.4 $ 5.8 $ 4.9 $ 3.3
Ratio of expenses to average net assets... .25%(d) .45% .45%(d) .60% .60%(d)
Ratio of net investment income to average
net assets.............................. 4.55%(d) 4.70% 5.00%(d) 4.42% 4.73%(d)
</TABLE>
---------------
(a) From December 2, 1998 (Commencement of Operations) to
May 31, 1999.
(b) From September 15, 1997 (Commencement of Operations) to
May 31, 1998.
(c) From May 5, 1998 (Commencement of Operations) to May 31, 1998.
(d) Annualized.
<TABLE>
<CAPTION>
U.S. TREASURY INSTITUTIONAL FUND--TREASURER'S TRUST
FISCAL YEAR
ENDED MAY 31,
1999(A)
-------------
<S> <C> <C>
Net asset value beginning of period................................................................ $1.0000
-------
Net investment income from investment operations................................................... .0245
Less dividends from net investment income.......................................................... (.0245)
-------
Net asset value at end of period................................................................... $1.0000
-------
-------
Total Return....................................................................................... 4.03%(b)
RATIOS/SUPPLEMENTAL DATA
Net assets end of period (millions)................................................................ $ 15.7
Ratio of expenses to average net assets............................................................ .60%(b,c)
Ratio of net investment income to average net assets............................................... 3.66%(b,c)
</TABLE>
---------------
(a) From October 21, 1998 (Commencement of Operations) to May 31, 1999.
(b) Annualized.
(c) During this period ended May 31, 1999, RMCI voluntarily waived a
portion of its fee. Due to the voluntary waiver of certain expenses
by RMCI, the net expense ratio and net investment income amounted
to .24% and 4.02%, respectively.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
INTERSTATE TAX-EXEMPT INSTITUTIONAL FUND
CLASS A CLASS B TREASURER'S TRUST
------------ ------------ -----------------------------
PERIOD ENDED PERIOD ENDED FISCAL YEAR PERIOD ENDED
MAY 31, MAY 31, ENDED MAY 31, MAY 31,
1999(A) 1999(D) 1999 1998(B)
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value at Beginning of period................... $ 1.0000 $ 1.0000 $1.0000 $ 1.0000
-------- -------- ------- --------
Net investment income From investment Operations......... .0175 .0101 .0284 .0018
-------- -------- ------- --------
Less dividends from net investment Income (.0175) (.0101) (.0284) (.0018)
-------- -------- ------- --------
Net asset value at end of period......................... $ 1.0000 $ 1.0000 $1.0000 $ 1.0000
-------- -------- ------- --------
-------- -------- ------- --------
Total Return............................................. 3.06%(c) 3.12%(c) 2.84% 3.39%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets end of period (millions)...................... $ 11.2 -- $ 23.7 $ 14.0
Ratio of expenses to average net assets.................. .25%(c) .45%(c) .60% .60%(c)
Ratio of net investment income to average net assets..... 3.13%(c) 3.04%(c) 2.79% 3.33%(c)
</TABLE>
---------------
(a) From November 3, 1998 (Commencement of Operations) to May 31, 1999.
(b) From May 13, 1998 (Commencement of Operations) to May 31, 1998.
(c) Annualized.
(d) From August 4, 1998 (Commencement of Operations) to December 31,
1998. (the final redemption of all outstanding shares)
14
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and the Board of Trustees of The Reserve Institutional
Trust:
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and financial highlights
present fairly, in all material respects, the financial position of The Reserve
Institutional Trust (comprising, respectively, the Primary Institutional, U.S.
Government Institutional, U.S. Treasury Institutional and Interstate Tax-Exempt
Institutional Funds) (the "Funds") at May 31, 1999, and the results of their
operations for the year then ended, the changes in their net assets for the
periods presented, and the financial highlights for the periods presented, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Funds' management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at May 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
July 23, 1999
15
<PAGE>
SUPPLEMENTAL PROXY INFORMATION (UNAUDITED)
The Special Meeting of Shareholders of the 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) was held on January 15, 1999 at the offices of The Reserve
Funds, 810 Seventh Avenue, New York, NY. The Meeting was held 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 4
To approve the following proposed amendments:
A. To amend the Declaration of Trust to eliminate the policy on pricing securities; Trust Vote
B. To amend the Declaration of Trust to permit non-material amendments; Trust Vote
C. To amend the Declaration of Trust concerning the right to vote portfolio securities; Trust Vote
D. To amend the Declaration of Trust concerning termination or reorganization of the Trust; Trust Vote
E. To amend the Trusts' fundamental investment policy on the issuance of senior securities; All Funds
F. To amend the Trusts' fundamental investment policy regarding underwriting; All Funds
G. To change the designation of the Trusts' fundamental investment policy on investing for control of
portfolio companies; All Funds
H. To eliminate the Trusts' fundamental investment policies regarding certain portfolio transactions; All Funds
I. To eliminate the Trusts' fundamental investment policy on investing in the securities of other
investment companies; All Funds
J. To amend the Trusts' By-Laws concerning amendments thereto Trust Vote
PROPOSAL 5
To approve changes to the Trusts' Fundamental Investment Policies to Permit a Master Fund/Feeder Fund
Structure All Funds
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
PROPOSAL 7
To ratify the selection of PricewaterhouseCoopers LLP as independent public accountants for the fiscal
year ending May 31, 1999; and Trust Vote
PROPOSAL 8
To transact such other business as may properly come before the Meeting Such Funds
as Necessary
</TABLE>
16
<PAGE>
SUPPLEMENTAL PROXY INFORMATION (UNAUDITED) (CONTINUED)
A Quorum of the shares of the Trust and the Funds, with exception of the
Reserve U.S. Treasury and Primary Institutional Fund, was not present at the
Meeting.
The results of the proxy solicitation on the above matters with respect to
the U.S. Treasury and Primary Institutional Funds were as follows:
<TABLE>
<CAPTION>
(2) Investment Management VOTES WITHHELD/
Agreement VOTES FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
------------- ------------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Primary Institutional 140,944,156 670,182 -- 1,280,665
US Treasury Institutional 5,764,680 -- -- 67,102
<CAPTION>
VOTES WITHHELD/
(4) VOTES FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
(E) Senior securities ------------- ------------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Primary Institutional 140,323,376 1,084,194 -- 1,487,433
US Treasury Institutional 5,764,680 -- -- 67,102
<CAPTION>
(F) Underwriting
<S> <C> <C> <C> <C> <C>
Primary Institutional 140,411,933 1,057,762 -- 1,425,307
US Treasury Institutional 5,764,680 -- -- 67,102
<CAPTION>
(G) Control of portfolio companies
<S> <C> <C> <C> <C> <C>
Primary Institutional 140,382,198 1,011,469 -- 1,501,336
US Treasury Institutional 5,764,680 -- -- 67,102
<CAPTION>
(H) Portfolio transactions
<S> <C> <C> <C> <C> <C>
Primary Institutional 140,519,340 959,972 -- 1,415,689
US Treasury Institutional 5,764,680 -- -- 67,102
<CAPTION>
(I) Investing in investment
companies
<S> <C> <C> <C> <C> <C>
Primary Institutional 140,533,814 967,265 -- 1,393,923
US Treasury Institutional 5,764,680 -- -- 67,102
<CAPTION>
VOTES WITHHELD/
(5) Master Fund/Feeder Fund VOTES FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
------------- ------------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Primary Institutional 140,665,275 894,369 -- 1,335,359
US Treasury Institutional 5,764,680 -- -- 67,102
<CAPTION>
VOTES WITHHELD/
(6) Trustee Authorization VOTES FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
------------- ------------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Primary Institutional 140,837,874 705,022 -- 1,352,108
US Treasury Institutional 5,764,680 -- -- 67,102
</TABLE>
Due to the absence of a quorum for the Trust and the U.S. Government and
Interstate Tax-Exempt Institutional Funds, the Chairman adjourned the Meeting
with respect to the Trust and these Funds until February 17, 1999.
The Special Meeting of Shareholders of the 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) was held on February 17, 1999 at the offices of The Reserve
Funds, 810 Seventh Avenue, New York, NY. A quorum of the Trust and the U.S.
Government Institutional Fund was present at the Meeting. The results of the
proxy solicitation as to the Trust and the U.S. Government Institutional Fund
were as follows:
<TABLE>
<CAPTION>
VOTES WITHHELD/
(1) Board of Trustees VOTES FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
------------- ------------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Bruce R. Bent 220,424,891 -- 4,125,284 --
Edwin Ehlert, Jr. 220,405,880 -- 4,144,295 --
Henri Emmet 220,462,969 -- 4,087,206 --
Donald Harrington 219,945,776 -- 4,604,399 --
Bruce R. Bent II 220,463,032 -- 4,087,143 --
William Viklund 220,463,032 -- 4,087,143 --
Vincent Mattone 220,463,032 -- 4,087,143 --
Diana Herrmann 220,463,032 -- 4,087,143 --
Richard Bassuk 220,463,032 -- 4,087,143 --
</TABLE>
17
<PAGE>
SUPPLEMENTAL PROXY INFORMATION (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
(2) Investment Management VOTES WITHHELD/
Agreement VOTES FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
------------- ------------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
US Government Institutional 7,916,507 -- -- 2,005,872
<CAPTION>
VOTES WITHHELD/
(4) VOTES FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
(A) Pricing Securities 219,225,096 988,620 -- 4,336,457
(B) Non-material amendments 219,192,045 1,005,754 -- 4,352,372
(C) Non-material amendments 219,111,838 1,140,317 -- 4,298,017
(D) Termination or Reorganization 219,178,864 937,047 -- 4,434,262
(E) Senior securities US
Government Institutional 7,820,582 95,924 -- 2,005,862
(F) Underwriting US Government
Institutional 7,820,582 95,924 -- 2,005,862
(G) US Government Institutional 7,820,582 50,358 -- 2,051,428
(H) Portfolio transactions
US Government Institutional 7,870,984 45,523 -- 2,005,862
(I) Investing in investment
companies US Government
Institutional 7,870,984 -- -- 2,051,385
(J) By-Law Amendments
US Government Institutional 7,866,149 50,358 -- 2,005,862
<CAPTION>
VOTES WITHHELD/
(5) Master Feeder/Feeder Fund VOTES FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
US Government Institutional 7,866,106 50,358 -- 2,005,905
<CAPTION>
VOTES WITHHELD/
(6) Trustee Authorization VOTES FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
US Government Institutional 7,820,582 95,924 -- 2,005,862
<CAPTION>
VOTES WITHHELD/
(7) PricewaterhouseCoopers LLP VOTES FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
214,116,319 1,270,201 -- 4,163,653
</TABLE>
Due to the absence of a quorum for the Reserve Interstate Tax-Exempt
Institutional Fund, the Chairman adjourned the Meeting with respect to that Fund
until March 1, 1999.
The Special Meeting of Shareholders of the Reserve Interstate Tax-Exempt
Institutional Fund was held on March 1, 1999 at the offices of The Reserve
Funds, 810 Seventh Avenue, New York, NY. The meeting was adjourned until
March 5, 1999 at which time it was held. A quorum of the shares of the Reserve
Interstate Tax-Exempt Institutional Fund were present at the Meeting.
The results of the proxy solicitation for the Interstate Tax-Exempt
Institutional Fund were as follows:
<TABLE>
<CAPTION>
(2) Investment Management
Agreement 11,027,400 -- -- --
<CAPTION>
VOTES WITHHELD/
(4) VOTES FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
(E) Senior securities 11,027,400 -- -- --
(F) Underwriting 11,027,400 -- -- --
(G) Control of portfolio companies 11,027,400 -- -- --
(H) Portfolio transactions
Investing in investment 11,027,400 -- -- --
(I) companies 11,027,400 -- -- --
VOTES WITHHELD/
(5) Master Fund/Feeder Fund VOTES FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
11,027,400 -- -- --
<CAPTION>
VOTES WITHHELD/
(6) Trustee Authorization VOTES FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
11,027,400 -- -- --
</TABLE>
18
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