<PAGE>
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THE RESERVE FUNDS
Reserve Tax-Exempt Trust and Reserve New York Tax-Exempt Trust:
New York Tax-Exempt, California II Tax-Exempt, Connecticut Tax-Exempt, Florida
Tax-Exempt, Massachusetts Tax-Exempt, Michigan Tax-Exempt, New Jersey
Tax-Exempt, Ohio Tax-Exempt and Pennsylvania Tax-Exempt Funds
Supplement dated August 18, 1999
to the Prospectus dated July 31, 1999
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Performance History
The Performance History on page 5 through page 8 of the Prospectus contains
typographical errors. The correct figures are as follows:
New York Tax-Exempt Fund
Most Recent Calendar Quarter 2nd Q 1999 0.56%
Connecticut Tax-Exempt Fund
Best Quarter 2nd Q 1989 1.45%
Worst Quarter 2nd Q 1993 0.38%
Most Recent Calendar Quarter 2nd Q 1999 0.54%
Florida Tax-Exempt Fund
Best Quarter 2nd Q 1997 0.73%
Most Recent Calendar Quarter 2nd Q 1999 0.59%
Massachusetts Tax-Exempt Fund
Worse Quarter 1st Q 1994 0.42%
Most Recent Calendar Quarter 2nd Q 1999 0.54%
New Jersey Tax-Exempt Fund
Best Quarter 2nd Q 1995 0.75%
Worst Quarter 3rd Q 1994 0.49%
Most Recent Calendar Quarter 2nd Q 1999 0.55%
Pennsylvania Tax-Exempt Fund
Most Recent Calendar Quarter 2nd Q 1999 0.59%
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THE RESERVE FUNDS
Reserve Tax-Exempt Trust:
Interstate Tax-Exempt Fund
Supplement dated August 18, 1999
to the Prospectus dated July 31, 1999
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Performance History
The Performance History on page 4 of the Prospectus contains typographical
errors. The correct figures are as follows:
Interstate Tax-Exempt Fund
Best Quarter 2nd Q 1989 1.60%
Worst Quarter 1st Q 1994 0.38%
Most Recent Calendar Quarter 2nd Q 1999 0.60%
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THE RESERVE FUNDS
The Reserve Fund
Reserve Tax-Exempt Trust
Reserve New York Tax-Exempt Trust
Supplement dated August 18, 1999
to the Prospectus dated July 31, 1999
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Performance History
The Performance History on page 7 through page 11 of the American Express Money
Market Accounts Prospectus dated July 31, 1999 for the Primary, U.S. Government
and U.S. Treasury Funds of The Reserve Fund and the New York Tax-Exempt Fund of
Reserve New York Tax-Exempt Trust and the California II Tax-Exempt, Connecticut
Tax-Exempt, Florida Tax-Exempt, Massachusetts Tax-Exempt, Michigan Tax-Exempt,
New Jersey Tax-Exempt, Ohio Tax-Exempt, Pennsylvania Tax-Exempt and Interstate
Tax-Exempt Funds of Reserve Tax-Exempt Trust, contains typographical errors. The
correct figures are as follows:
Primary Fund
Best Quarter 2nd Q 1989 2.30%
Worst Quarter 2nd Q 1993 0.53%
Most Recent Calendar Quarter 2nd Q 1999 0.97%
U.S. Government
Best Quarter 2nd Q 1989 2.27%
Worst Quarter 2nd Q 1993 0.56%
Most Recent Calendar Quarter 2nd Q 1999 0.95%
U.S. Treasury
Best Quarter 2nd Q 1995 1.25%
Worst Quarter 1st Q 1993 0.52%
Most Recent Calendar Quarter 2nd Q 1999 0.94%
New York Tax-Exempt Fund
Most Recent Calendar Quarter 2nd Q 1999 0.56%
Connecticut Tax-Exempt Fund
Best Quarter 2nd Q 1989 1.45%
Worst Quarter 2nd Q 1993 0.38%
Most Recent Calendar Quarter 2nd Q 1999 0.54%
Florida Tax-Exempt Fund
Best Quarter 2nd Q 1997 0.73%
Most Recent Calendar Quarter 2nd Q 1999 0.59%
Massachusetts Tax-Exempt Fund
Worse Quarter 1st Q 1994 0.42%
Most Recent Calendar Quarter 2nd Q 1999 0.54%
New Jersey Tax-Exempt Fund
Best Quarter 2nd Q 1995 0.75%
Worst Quarter 3rd Q 1994 0.49%
Most Recent Calendar Quarter 2nd Q 1999 0.55%
Pennsylvania Tax-Exempt Fund
Most Recent Calendar Quarter 2nd Q 1999 0.59%
Interstate Tax-Exempt Fund
Best Quarter 2nd Q 1989 1.60%
Worst Quarter 1st Q 1994 0.38%
Most Recent Calendar Quarter 2nd Q 1999 0.60%
