RESERVE PRIVATE EQUITY SERIES, DEFS14A, 1998-11-17

RESERVE PRIVATE EQUITY SERIES
DEFS14A, 1998-11-17

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<PAGE> 1

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>

RESERVE PRIVATE EQUITY SERIES
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.

(1) Title of each class of securities to which transaction applies:

------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

------------------------------------------------------------------------

(5) Total fee paid:

------------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

------------------------------------------------------------------------

(2) Form, Schedule or Registration Statement No.:

------------------------------------------------------------------------

(3) Filing Party:

------------------------------------------------------------------------

(4) Date Filed:

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<PAGE> 2

[Bruce Bents PHOTO]

[Reserve Fund LOGO]

November 18, 1998

Dear Reserve Private Equity Shareholder:

We are pleased to enclose the Notice and Proxy Statement for the Special
Meeting of Shareholders of Reserve Private Equity Series ("Trust") to be held at
3:00 p.m., Eastern Time, on December 17, 1998 at the offices of The Reserve
Funds. Formal notice of the Meeting appears on the next page, followed by the
Proxy Statement. Please take the time to read the Proxy Statement and cast your
vote, because it covers matters that are important to the Trust and to you as a
shareholder.

The meeting is being called because of the pending purchase of the Trust's
Adviser, Reserve Management Company, Inc. by incumbent management.

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:

S To provide for the election of Trustees

S To approve new Investment Management Agreements

S To approve new Sub-Advisory Agreements

S To approve amendments to the Declaration of Trust regarding certain
investment policies

S To allow for a Master Fund/Feeder Fund Structure

S 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

S To ratify the selection of PricewaterhouseCoopers LLP as independent public
accountants.

The Trustees, including a majority of the Independent Trustees of the Trust,
have reviewed the proposals and concluded they are in the best interests of the
Trust and its shareholders, and recommend that you vote FOR each of the
proposals, which are described in more detail in the enclosed Proxy Statement.

<TABLE>
<S> <C>
[Stop Sign ICON] PLEASE NOTE: Mutual funds are required by law to hold
special shareholder meetings on these types of issues and a
minimum of more than 50% of the outstanding shares must vote
in order to hold the meeting. Please take a moment now to
sign and return your ballot in the enclosed postage-paid
envelope or vote over the phone by calling 800-690-6903.
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 to act
on these important matter and in the opinion of the
Independent Trustees is not in your best interests.
</TABLE>

The Trust 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 800-690-6903, 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> 3

RESERVE PRIVATE EQUITY SERIES
810 Seventh Avenue
New York, New York 10019

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held December 17, 1998 at 3:00 p.m.

Notice is hereby given that a Special Meeting of Shareholders (the "Meeting")
of RESERVE PRIVATE EQUITY SERIES (the "Trust") (consisting of Reserve Blue Chip
Growth Fund, Reserve Convertible Securities Fund, Reserve Informed Investors
Growth Fund, Reserve International Equity Fund, Reserve Large-Cap Growth Fund
(formerly Large-Cap Value), Reserve Mid-Cap Equity Fund (formerly Mid-Cap
Growth), and Reserve Small-Cap Growth Fund) (collectively, the "Funds"), 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 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 Fund Vote
PROPOSAL 3
To approve new Sub-Advisory Agreements Fund Vote
PROPOSAL 4
To approve the following proposed amendments:
A. To amend the Trust's Declaration of Trust to provide Trust Vote
dollar-based voting rights;
B. To change the designation of the Funds' fundamental Fund Vote
investment policy on investing for control of portfolio
companies
PROPOSAL 5
To approve changes to the Funds' Fundamental Investment Fund Vote
Policies to Permit a Master Fund/Feeder Fund Structure
PROPOSAL 6
To approve the authorization of the Board of Trustees to Fund Vote
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 as Trust Vote
independent public accountants for the fiscal year ending
May 31, 1999 and
PROPOSAL 8
To transact such other business as may properly come before For approval by each Fund as
the Meeting Necessary
</TABLE>

VOTING

Shareholders of record of the Trust at the close of business on October 30,
1998 (the "Record Date") will be entitled to vote at the Meeting. Each share of
the Trust 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. Your
prompt return of your proxy or proxies may save

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<PAGE> 4

the Trust 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
Reserve Private Equity Series

New York, New York
November 18, 1998

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PAGE 2
<PAGE> 5

PROXY STATEMENT

RESERVE PRIVATE EQUITY SERIES
810 Seventh Avenue
New York, New York 10019

SPECIAL MEETING OF SHAREHOLDERS
To be held December 17, 1998 at 3:00 P.M.

This Proxy Statement and enclosed form of proxy are furnished in connection
with THE SOLICITATION OF PROXIES BY AND ON BEHALF OF THE TRUSTEES OF THE TRUST
to be used at a Special Meeting of Shareholders of the Trust 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.

This Proxy Statement and the form of proxy are being mailed to shareholders
on or about November 18, 1998. Any shareholder giving a proxy has the power to
revoke it by mail (addressed to the Secretary of the Trust at the principal
executive office of the Fund, 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 Trust. 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 THE TRUST'S MOST RECENT ANNUAL REPORT AND SEMI-ANNUAL REPORT IS
AVAILABLE UPON REQUEST AND WITHOUT CHARGE BY CALLING THE TRUST 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.

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PAGE 1
<PAGE> 6

<TABLE>
<CAPTION>
PROPOSAL WHO WILL VOTE
- -------- -------------
<S> <C>
PROPOSAL 6
To approve the authorization of the Board of Trustees to Fund Vote
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 as Trust Vote
independent public accountants for the fiscal year ending
May 31, 1999 and
PROPOSAL 8
To transact such other business as may properly come before For approval by each
the Meeting Fund as Necessary
</TABLE>

VOTING

Shareholders of record for the Trust as of the close of business on October
30, 1998 ("Record Date") are entitled to vote at the Meeting and at any
adjournment thereof on matters submitted to shareholders of the Trust.
Shareholders have one vote for each share held in the Trust. 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 the Trust or a Fund.

<TABLE>
<CAPTION>
NUMBER OF
SHARES
NAME OF FUND OUTSTANDING
- ------------ ----------------
<S> <C>
Reserve Blue Chip Growth Fund
Class R Shares 604,355.156
Class I Shares 100.000
Reserve Convertible Securities Fund
Class R Shares 1,896,725.722
Class I Shares 100.000
Reserve Informed Investors Growth Fund
Class R Shares 257,118.215
Class I Shares 100.000
Reserve International Equity Fund
Class R Shares 939,349.291
Class I Shares 100.000
Reserve Large-Cap Growth Fund
Class R Shares 1,081,419.989
Class I Shares 100.000
Reserve Mid-Cap Equity Fund
Class R Shares 207,781.769
Class I Shares 100.000
Reserve Small-Cap Growth Fund
Class R Shares 275,031.736
Class I Shares 100.000
</TABLE>

With respect to Proposal 1 (Election of Trustees) 4a 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.

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<PAGE> 7

Approval of Proposals 2, 3, 4b, 5 and 6 requires the affirmative vote of the
majority of the outstanding voting securities of each 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 the 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 the Trust's or Fund's
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.

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)

All Trustees are elected to serve indefinitely until his or her resignation
or removal or until his or her successor is duly elected and qualified.

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<PAGE> 8

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
810 Seventh Avenue Trustee (1970 to present) Trustee of The Reserve Fund ("RF"), Reserve
New York, NY 10019 Institutional Trust ("RIT"), Reserve
Age: 61 Tax-Exempt Trust ("RTET"), Reserve 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 Resrv Partners,
Inc. ("RESRV").

Edwin Ehlert, Jr. Trustee (1971 to present) Mr. Ehlert is retired. Until his
125 Elm Street retirement, he was President of Premier
Westfield, NJ 10019 Resources Inc. (a meeting and planning
Age: 66 company) from October 1989 to December 31,
1996 and CEO of Ehlert Travel Associates,
Inc. (a travel agency) from November 1978
to December 31, 1996. He is a trustee of
PF, RIT, RTET, RNYTET and RPES.

Henri W. Emmet Trustee (1978 to present) From January 1995 to December 1995, Mr.
1535 Presidential Drive Emmet served as a Principal of Global
Columbus, OH 43212 Interaction, which provides consulting
Age: 72 services to international banking
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.

Donald J. Harrington Trustee (1987 to present) The Reverend Harrington is President of St.
St. John's University John's University, NY, a Trustee of RF,
Grand Central and Utopia RIT, RTET, RNYTET and RPES and a Director
Parkways of Bear Stearns Companies, Inc. since 1993.
Jamaica, NY 11439
Age: 53

Bruce R. Bent II* Senior Vice President and Mr. Bent II joined The Reserve Funds in
810 Seventh Avenue Assistant Secretary, Nominee 1992 and is Senior Vice President and
New York, NY 10019 for election as Trustee Assistant Secretary of RF, RIT, RNYTET,
Age: 32 RTET and RPES.
</TABLE>

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<PAGE> 9

<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATIONS
NAME AND AGE THE TRUST DURING THE PAST FIVE YEARS
- ------------ ------------- --------------------------
<S> <C> <C>
William E. Viklund Trustee (1998 to present) Mr. Viklund is formerly President and COO
110 Grist Mill Lane of Bancorp and President and CEO of Long
Plandome Manor, NY 11030 Island Savings (1980-1996); Senior Vice
Age: 58 President/ Department Head of Bankers Trust
Corp. (1972-1980); and Vice President and
Mortgage Officer of Anchor Savings Bank
(1967-1972). He is currently Trustee of RF,
RIT, RTET, RNYTET and RPES.

Vincent J. Mattone Nominee for election as Mr. Mattone is former member of the
12 Deep Hollow Drive, Trustee of RF, RIT, RTET, Executive Committee and the Board of
Locust, NJ 07760 RNYTET and RPES Directors of the Bear Stearns Companies,
Age: 53 Inc. from 1985 to 1995. Prior to joining
Bear Stearns, he was at Salomon Brothers
from 1964 to 1979.

Diana P. Herrmann Nominee for election as Ms. Herrmann is President and COO of Aquila
380 Madison Avenue Trustee of RF, RIT, RTET, Management Corporation, sponsor of 14
Suite 2300 RNYTET and RPES mutual funds with over $3 billion in
New York, NY assets, as of October 5, 1998. Prior to
10017-2513 joining Aquila in 1986, Ms. Herrmann was
Age: 40 employed with European American Bank in New
York and was a board member and Secretary
of Bank Credit Association.

Richard Bassuk Nominee for election as From 1995 to present, Mr. Bassuk has been a
The Singer & Bassuk Trustee of RF, RIT, RTET, founding principal and President of The
Organization RNYTET and RPES Singer & Bassuk Organization. From 1994 to
767 Third Avenue present, Mr. Bassuk has served as Chairman
New York, NY 10017 of R.E. Bases Enterprises Corporation.
Age: 57 Previously, Mr. Bassuk joined Starrett
Housing Corporation in 1973 and was
President and COO from 1981 to 1993.
</TABLE>

- ---------------
* "Interested person" (as defined in the Investment Company Act of 1940) of the
Trust. Bruce R. Bent is the father of Bruce R. Bent II and each is considered
to be an "interested person."

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 $351 for the non-interested Trustees as a group. During the fiscal
year ended May 31, 1998, there were four 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.

The Trust 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 the Trust's
independent public accountants, submits a recommendation to the Trustees as to
the selection of independent public accountants, and reviews generally the
maintenance of the Trust's records and the safekeeping arrangements of the
Trust's custodian. The Review Committee of the Trust held its annual meeting
last fiscal year.

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<PAGE> 10

For the fiscal year ended May 31, 1998, the Current Trustees received the
following compensation from the Trust and other Trusts for which RMCI is
Adviser.

<TABLE>
<CAPTION>
TOTAL
AGGREGATE COMPENSATION
NAME OF TRUSTEE COMPENSATION FROM ALL FIVE TRUSTS
NOMINEE FROM THE TRUST* MANAGED BY RMCI
--------------- --------------- --------------------
<S> <C> <C>
Bruce R. Bent $ 0 $ 0
Edwin Ehlert, Jr. $128.95 $30,000.00
Henri W. Emmet $128.95 $30,000.00
Donald J. Harrington $128.95 $30,000.00
</TABLE>

- ---------------

* The Trust does not pay any pension or retirement benefits to Trustees.

The following are the officers of the Trust who are not Trustees:

<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATIONS
NAME AND AGE THE FUNDS DURING THE PAST FIVE YEARS
- ------------ ------------- --------------------------
<S> <C> <C>
MaryKathleen Foynes Counsel and Secretary Ms. Foynes is Counsel and Secretary of RF,
810 Seventh Avenue RIT, RNYTET, RTET, and RPES. Before joining
New York, NY 10019 The Reserve Funds in 1998, Ms. Foynes was a
Age: 29 staff attorney at PaineWebber, Inc. Prior
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 Assistant Mr. Bent is Vice President and Secretary of
810 Seventh Avenue Secretary RF, RIT, RTET, RNYTET and REPS. Before
New York, NY 10019 joining The Reserve Funds in 1997, Mr. Bent
Age: 30 was a private investor.
</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.

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PROPOSAL 2

TO APPROVE NEW INVESTMENT
MANAGEMENT AGREEMENTS (Fund Vote)

The Board of Trustees of the Trust is proposing that shareholders of each
Fund approve new Investment Management Agreements (the "New Agreements") to be
entered into between the Trust and Reserve Management Company, Inc. ("RMCI")
located at 810 Seventh Avenue, New York, NY 10019. The new Investment Advisory
Agreements are substantially similar to the current Investment Advisory
Agreements. 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, has assets in excess of $5.2 billion. RMCI currently serves as
investment manager to each Fund pursuant to the terms of an Investment
Management Agreement entered into with each Fund (the "Current Agreements"),
which is described more fully below. Sub-Advisers have been retained to manage
the portfolios of each of the Funds. The Adviser supervises a continuous
investment program for the Funds, evaluates and monitors each Sub-Adviser's
performance, investment programs, and compliance with applicable laws and
regulation, and recommends to the Board of Trustees whether the Sub-Adviser's
contract should be continued, terminated or modified. The Adviser is also
responsible for the day-to-day administration of each Fund's activities.

THE CHANGE IN CONTROL OF RESERVE MANAGEMENT COMPANY, INC.

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 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.B. Dickerson; 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
after shareholder approval of New Agreements. 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 do 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 the Funds. 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. The Trustees at this meeting approved this recommendation for the
adoption of the New Agreements and the Trustees are recommending that
shareholders approve the New Agreements.

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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 trustees 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

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 Blue Chip Growth Fund is
dated March 16, 1994 and was submitted to a vote of initial shareholders on
October 28, 1994; the Current Agreement for Reserve Convertible Securities Fund
is dated August 1, 1996 and was submitted to a vote of initial shareholders on
September 3, 1996; the Current Agreement for Reserve Informed Investors Growth
Fund is dated March 16, 1994 and was submitted to a vote of initial shareholders
on December 28, 1994; the Current Agreement for the Reserve International Equity
Fund is dated April 18, 1995 and was submitted to a vote of initial shareholders
on July 13, 1995; the Current Agreement for the Reserve Large-Cap Growth Fund is
dated January 1, 1996 and was submitted to a vote of initial shareholders on
January 2, 1996; the Current Agreement for Reserve Mid-Cap Equity Fund is dated
June 30, 1998 and approved on July 1, 1998; the Current Agreement for the
Reserve Small-Cap Growth Fund is dated March 16, 1994 and was submitted to a
vote of initial shareholders on November 14, 1994.

Under the Current Agreements, the Funds pay RMCI a "comprehensive" management
fee (as a percentage of the average daily net assets attributable to each Class)
at an annual rate of:

<TABLE>
<CAPTION>
CLASS R SHARES CLASS I SHARES
-------------- --------------
<S> <C> <C>
Reserve Blue Chip Growth: 1.20% 0.90%
Reserve Convertible Securities: 1.30% 1.00%
Reserve Informed Investors Growth: 1.30% 1.00%
Reserve International Equity: 1.55% 1.25%
Reserve Large-Cap Growth: 1.20% 0.90%
Reserve Mid-Cap Equity: 1.30% 1.00%
Reserve Small-Cap Growth: 1.30% 1.00%
</TABLE>

Under the Current Agreements, the aggregate amount of fees paid by the Funds
to RCMI during the last fiscal year were $795,252.

In accordance with these agreements, RMCI provides all investment advisory
services to the 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, 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 Funds'
Distribution Plans, and the fees of the Independent Trustees. The terms of the
proposed New Agreements for the Funds are substantially identical to the terms
of the Current Agreements for the Funds, including identical comprehensive fee
rates.

Management of the Funds has indicated, and the Boards of Trustees of the
Funds have concurred, that the comprehensive fee structure can be beneficial and
in the interests of shareholders because it

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<PAGE> 13

provides shareholders with a more easily understood fee structure that offers
greater certainty in determining the total operating expenses of the Fund on an
annual basis.

Class R shares of the Funds are subject to a Plan of Distribution, and
related agreements, in accordance with Rule 12b-1 of the 1940 Act. Under the
terms of the Plan of Distribution, the Funds may make payments to certain
brokers, financial institutions and others at an annual rate of .25% as a
percentage of average daily net assets. Such payments are designed to facilitate
the sale of the Funds' 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.

2. DIRECTORS AND EXECUTIVE OFFICERS OF RMCI

The Directors and Executive Officers of RMCI are:

Henry B.R. Brown, President and Treasurer
Bruce R. Bent, Vice President and Secretary
Bruce R. Bent II, Assistant Secretary

3. 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 the Funds under the New Agreements is fair and reasonable. In making
this determination, the Trustees considered various factors. The factors
considered most important by the Trustees included: (1) the efforts, experience
and profitability of RMCI in rendering its services to the Funds; (2) the
nature, quality and extent of the services as currently provided by RMCI to the
Funds and to be provided under the New Agreements; (3) the performance record of
RMCI in connection with its investment management of the Funds; (4) the fees
charged by investment managers operating funds with similar investments; and (5)
the substantial similarity between the Current and New Agreements.

REQUIRED VOTE

With respect to each Series, the approval of the New Agreements requires the
affirmative vote of a majority of the 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 the Fund are present or represented by proxy,
or (ii) of more than 50% of the outstanding voting securities of the 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 NEW SUB-ADVISORY AGREEMENTS (Fund Vote)

As discussed in Proposal 2, the termination of the Current Investment
Advisory Agreements, because of the change of control of RMCI will, as a matter
of law and contract, terminate the currently existing Sub-Advisory Agreements.
Thus, it is necessary to adopt new Sub-Advisory Agreements between the sub-
advisers and RMCI.

In addition, the Sub-Adviser to Reserve Blue Chip Growth Fund, Trainer,
Wortham & Company, Inc., also anticipates a change in control. Trainer, Wortham
& Company, Inc. has reached an agreement whereby First Republic Bank, a leading
California financial institution, will acquire the remaining 80.1% of Trainer,
Wortham & Company, Inc. that it does not currently own. Trainer, Wortham &
Company, Inc. has indicated to RMCI and the Board of Trustees that this
transaction will not result in a change in

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PAGE 9
<PAGE> 14

management structure, the investment process, the personnel who manage the
Fund's portfolio or in the level of service to the Fund. Accordingly,
shareholders of the Reserve Blue Chip Growth Fund will also have to approve a
new sub-advisory contract to go into effect after the change in control of
Trainer, Wortham & Company, Inc. Accordingly, in addition to proposing the
adoption of new Investment Management Agreements, RMCI proposed to the Trustees,
at a meeting held on October 7, 1998, the adoption of new Sub-Advisory
Agreements.

The new Sub-Advisory Agreements are substantially similar to the current
Sub-Advisory Agreements except for the effective dates and date of terminations.
A form of the new Sub-Advisory Agreement is attached hereto as Exhibit B.

1. THE CURRENT SUB-ADVISORY AGREEMENTS

The Current Agreements have been previously approved by initial shareholders
as required by applicable law. The Current Sub-Advisory Agreement for Reserve
Blue Chip Growth Fund is dated October 27, 1994 and was submitted to a vote of
initial shareholders on October 28, 1994; the Current Sub-Advisory Agreement for
Reserve Convertible Securities Fund is dated September 2, 1996 and was submitted
to a vote of initial shareholders on September 3, 1996; the Current Sub-Advisory
Agreement for Reserve Informed Investors Growth Fund is dated December 27, 1994
and was submitted to a vote of initial shareholders on December 28, 1994; the
Current Sub-Advisory Agreement for the Reserve International Equity Fund is
dated July 12, 1995 and was submitted to a vote of initial shareholders on July
13, 1995; the Current Sub-Advisory Agreement for the Reserve Large-Cap Growth
Fund is dated January 1, 1996 and was submitted to a vote of initial
shareholders on January 2, 1996; and the Current Sub-Advisory Agreement for
Reserve Mid-Cap Equity Fund is dated March 12, 1996 and was submitted to a vote
of initial shareholders on March 13, 1996; the Current Agreement Sub-Advisory
for the Reserve Small-Cap Growth Fund is dated November 13, 1994 and was
submitted to a vote of initial shareholders on November 14, 1994.

The Sub-Advisers of the Funds and sub-advisory fees paid for the last fiscal
year are listed below. For their services, the Sub-Adviser of each Fund receives
an annual fee of up to one-half of the net profit before taxes of the respective
Fund. Net profit is deemed to be the comprehensive fee less Fund expenses and
all applicable sales and marketing costs. The Adviser may also pay a Sub-Adviser
for marketing assistance. For the fiscal year ended May 31, 1998 none of the
Funds, with the exception of The Reserve International Equity Fund, paid any
subadvisory fees.

RESERVE BLUE CHIP GROWTH FUND -- Trainer, Wortham & Company, Inc., 845 Third
Avenue, New York, NY 10022. Robert J. Vile, 845 Third Avenue, New York, NY
10022, is the Fund's portfolio manager. Mr. Vile is a Managing Director of the
Sub-Adviser and is responsible for the day-to-day investment decisions of the
Reserve Blue Chip Growth Fund.

RESERVE CONVERTIBLE SECURITIES FUND -- New Vernon Advisers, Inc., 310 South
Street, P.O. Box 1913, Morristown, NJ 07962, an affiliate of William E. Simon &
Sons, L.L.C. J. Peter Simon, of 310 South Street, P.O. Box 1913, Morristown, NJ
07962, is an Executive Director and founder of William E. Simon & Sons, is
President of New Vernon Advisors, Inc., and serves as the firm's convertible
securities manager and is responsible for the day-to-day investment decisions of
the Reserve Convertible Securities Fund. New Vernon has indicated an intention
to resign as Sub-Adviser to the Convertible Securities Fund in the near future.
If New Vernon does resign, they are required to give the Fund 60 days notice and
the Board will consider appropriate courses of action, including selection of a
new Sub-Adviser for the Convertible Fund.

RESERVE INFORMED INVESTORS GROWTH FUND -- T.H. Fitzgerald & Co., 180 Church
Street, Naugatuck, CT 06770. Thomas H. Fitzgerald, Jr., CEO, of 180 Church
Street, Naugatuck, CT 06770, serves as the Fund's portfolio manager and is
responsible for the day-to-day investment decisions of the Reserve Informed
Investors Growth Fund.

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PAGE 10
<PAGE> 15

RESERVE INTERNATIONAL EQUITY FUND -- Pinnacle Associates, Ltd., 666 Fifth
Avenue, New York, NY 10103. Nicholas Reitenbach, of 666 Fifth Avenue, New York,
NY 10103, is Senior Vice President and Director of international investments and
partner of Pinnacle Associates, Ltd., and serves as the Reserve International
Equity Fund's primary portfolio manager.

RESERVE LARGE-CAP GROWTH FUND -- Siphron Capital Management, 280 S. Beverly
Drive, Beverly Hills, CA 90212. David C. Siphron and Peter D. Siphron, of 280 S.
Beverly Drive, Beverly Hills, CA 90212, both partners of the firm, serve as the
Reserve Large-Cap Growth Fund's portfolio managers, providing investment
recommendations based on a proprietary combination of fundamental and technical
analysis.

RESERVE MID-CAP EQUITY FUND* -- Pekin, Singer & Shapiro Asset Management, 311
South Wacker Drive, Chicago, IL 60606. JoAnne Pekin, a founder of the firm and
its President, and Martha Jo Doran, Vice President, of 311 South Wacker Drive,
Chicago, IL 60606, serve as the Fund's portfolio managers. Mrs. Pekin is
responsible for the day-to-day investment decisions of the Reserve Mid-Cap
Equity Fund.

RESERVE SMALL-CAP GROWTH FUND -- Roanoke Asset Management, 529 Fifth Avenue,
New York, NY 10017. Edwin G. Vroom, President, Brian J. O'Connor, Executive
President and Adele S. Weisman, Senior Vice-President, of 529 Fifth Avenue, New
York, NY, 10017, serve as the Fund's portfolio managers. They are responsible
for the day-to-day investment decisions of the Reserve Small-Cap Growth Fund.
- ---------------
* Until June 30, 1998 (when its resignation became effective), Southern Capital
Advisors, 50 Front Street, Memphis, TN 38103, served as the Sub-Adviser for
Reserve Mid-Cap Equity Fund (formerly Mid-Cap Growth Fund).

2. DIRECTORS AND EXECUTIVE OFFICERS OF EACH OF THE SUB-ADVISERS

The Directors and Executive Officers of each of the Sub-Advisers are as
follows:

RESERVE BLUE CHIP GROWTH FUND: Trainer, Wortham & Company, Inc.:

<TABLE>
<CAPTION>
DIRECTORS OFFICERS
- --------- --------
<S> <C>
None Charles V. Moore, President
David P. Como, Managing Director
A. Alexander Arnold, Managing Director
H. Williamson Ghriskey, Jr. Managing Director, Secretary
</TABLE>

RESERVE CONVERTIBLE SECURITIES FUND: New Vernon Advisers, Inc:

<TABLE>
<CAPTION>
DIRECTORS OFFICERS
- --------- --------
<S> <C>
Michael B. Lenard J. Peter Simon, President
William Edward Simon, Jr. Mark J. Butler, Vice President,
Chief Financial Officer, Treasurer
Christine W. Jenkins, Vice President, Secretary
John Siebel, Vice President
</TABLE>

RESERVE INFORMED INVESTORS GROWTH FUND: T.H. Fitzgerald & Co.:

<TABLE>
<CAPTION>
DIRECTORS OFFICERS
- --------- --------
<S> <C>
None Thomas H. Fitzgerald, CEO
</TABLE>

--------

PAGE 11
<PAGE> 16

RESERVE INTERNATIONAL EQUITY FUND: Pinnacle Associates Ltd.:

<TABLE>
<CAPTION>
DIRECTORS OFFICERS
- --------- --------
<S> <C>
None Thomas Passions, President and CIO
Nicholas Reitenbach, Senior Vice President
Peter Marron, Senior Vice President
Edmund Blake, Senior Vice President
King Harris, Senior Vice President
</TABLE>

RESERVE LARGE-CAP GROWTH FUND: Siphron Capital Management:

<TABLE>
<CAPTION>
DIRECTORS OFFICERS
- --------- --------
<S> <C>
None David C. Siphron, CFA-Partner and President
Peter Siphron, CFA-Partner
</TABLE>

RESERVE MID-CAP EQUITY FUND: Pekin, Singer & Shapiro Asset Management:

<TABLE>
<CAPTION>
DIRECTORS OFFICERS
- --------- --------
<S> <C>
None JoAnne Brawar Pekin, President
Sheldon Mark Pekin, Senior Vice President
Richard Allen Singer, Senior Vice President
Nathan Shapiro, Senior Vice President
David Scott Evans, Vice President
Steven Arthur Shapiro, Vice President
Martha Jo Doran, Vice President
</TABLE>

RESERVE SMALL-CAP GROWTH FUND: Roanoke Asset Management:

<TABLE>
<CAPTION>
DIRECTORS OFFICERS
- --------- --------
<S> <C>
Edwin G. Vroom Edwin G. Vroom, President
Adele S. Weisman Adele S. Weisman, Senior Vice President
Christopher Miller, Senior Vice President
</TABLE>

3. THE TRUSTEES' CONSIDERATIONS AND RECOMMENDATIONS

In approving the New Sub-Advisory Agreements and determining to submit them
to shareholders for approval, the Trustees concluded that the compensation to be
paid by the Funds under the New Sub-Advisory Agreements is fair and reasonable.
In making this determination, the Trustees considered several factors. The
factors considered by the Trustees included: (1) the efforts and expenses of the
Sub-Advisers in rendering their services to the Funds; (2) the nature, quality
and extent of the services as currently provided by the Sub-Advisers to the
Funds and to be provided under the New Sub-Advisory Agreements; (3) the
performance record of the Sub-Advisers in connection with their management of
the Funds; (4) the fees charged by Sub-Advisers operating funds with similar
investments; and (5) the substantial similarity between the Current and New
Agreements. In the case of Trainer, Wortham & Company, Inc., the Trustees also
considered that the proposed change in control would not result in a change in
personnel managing the Fund or in its investment process.

REQUIRED VOTE

With respect to the Funds, the approval of the New Sub-Advisory Agreements
requires the affirmative vote of a majority of the 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 the Funds are present or represented by
proxy, or (ii) of more than 50% of the outstanding voting securities of the
Funds, whichever is less.

--------

PAGE 12
<PAGE> 17

THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF THE NEW
SUB-ADVISORY AGREEMENTS, AND ANY SIGNED BUT UNMARKED PROXIES WILL BE SO VOTED.

PROPOSAL 4

TO APPROVE AMENDMENTS AND REVISIONS TO DECLARATION OF TRUST AND INVESTMENT
RESTRICTIONS

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 Trust and the Funds. These policies and
procedures are contained in the Declaration of Trust for the Trust or have been
adopted as fundamental polices by 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 THE TRUSTS' DECLARATION OF TRUST TO PROVIDE DOLLAR-BASED VOTING
RIGHTS FOR SHAREHOLDERS OF THE TRUST (TRUST VOTE)

It is recommended that Section 7.01 of the Declaration of Trust be amended to
provide voting rights based on a shareholder's total dollar interest in a Fund
("dollar-based voting"), rather than on the number of shares owned, for all
shareholder votes for a Fund. As a result, voting power would be allocated in
proportion to the value of each shareholder's investment.

Currently, shareholders of each Fund vote separately on matters concerning
only that Fund and vote on a trust-wide basis on matters that affect the Trust
as a whole, such as electing Trustees or amending the Declaration of Trust.
Currently, under the Declaration of Trust, each share is entitled to one vote,
with fractional votes for fractional shares, regardless of the relative value of
the shares of each Fund in the Trust.

The original intent of the one-share, one-vote provision was to provide
equitable voting rights as required by the Investment Company Act of 1940 ("1940
Act"). In the case where a Trust has several series or Funds, voting rights may
have become disproportionate since the net asset value per share ("NAV") of the
separate Funds diverge over time. Under the current voting provisions, an
investment in a Fund with a lower Net Asset Value ("NAV") may have significantly
greater voting power than the same dollar amount invested in a Fund with a
higher NAV.

If approved, the amendment would provide a more equitable distribution of
voting rights than the one-share, one-vote system currently in effect for
certain votes. The voting power of shareholders would be commensurate with the
value of the shareholder's dollar investment rather than with the number of
shares held.

On matters requiring trust-wide votes where all Funds are required to vote,
shareholders who own shares with a lower NAV than other Funds in the Trust would
be giving other shareholders in the Trust more voting "power" than they
currently have. On matters affecting only one Fund, only shareholders of that
Fund vote on the issue. In this instance, under both the current Declarations of
Trust and the amended Declaration of Trust, all shareholders of a Fund would
have the same voting rights, since the NAV is the same for all shares in a
single Fund.

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PAGE 13
<PAGE> 18

The current provision of the Declaration of Trust is as follows:

Section 7.01: "[e]ach whole share shall be entitled to one vote as to any
matter on which it is entitled to vote..."

If approved, the Declaration of the Trust will be amended as follows:

A shareholder of each series shall be entitled to one vote for each dollar of
net asset value (number of shares owned times net asset value per share) per
share of such series [or class thereof], on any matter on which such
shareholder is entitled to vote and each fractional dollar amount shall be
entitled to a proportionate fractional vote.

It is expected that the proposed amendment will benefit the Trust by bringing
greater equality in voting rights among all shareholders of the Trust.

B. TO CHANGE THE DESIGNATION OF THE TRUSTS' FUNDAMENTAL INVESTMENT POLICY ON
INVESTING FOR CONTROL OF PORTFOLIO COMPANIES (FUND VOTE)

It is recommended that each Fund's fundamental policy on investing for
control of portfolio companies be changed from a fundamental policy to a similar
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 may not 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 in companies for the
purpose of exercising control.

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 TRUSTS'
FUNDAMENTAL INVESTMENT POLICIES TO PERMIT A
MASTER FUND/FEEDER FUND STRUCTURE (Fund Vote)

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 investable 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 be as follows:

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/Feeder Fund structure. The proposed

--------

PAGE 14
<PAGE> 19

condition to each Fund's fundamental investment policies would permit the Fund
to adopt such a "Master Fund/Feeder Fund 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 the Trust's Declaration of Trust a shareholder vote is required to sell
or transfer substantially all of the assets of the 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 Fund/Feeder Fund
Structure through a sale or transfer of assets requires a shareholder vote.
Approval of this item 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
--------

PAGE 15
<PAGE> 20

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 would not
be expected to have any adverse tax effects on the Fund or its shareholders.

Each Feeder Fund would intend 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.
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PAGE 16
<PAGE> 21

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 (Fund Vote)

Section 15(a) of the 1940 Act requires that all contracts pursuant to which
persons serve as investment advisers 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 such an exemption. If this proposal is approved by the
shareholders, the Board of Trustees of the Trust would, without further
shareholder approval, be able to appoint additional or replacement sub-advisers,
terminate sub-advisers, rehire existing 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 the
multi-manager structure with respect to the Funds 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 performance is not
satisfactory). Under the multi-manager structure, the Adviser will 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 their investment objectives.

While there is no way of knowing exactly how often the Adviser may recommend,
and the Board may approve, the selection of an additional Sub-Adviser, or the
replacement or termination of an existing Sub-Adviser, each of which would
typically require a shareholder meeting, it is likely that the multi-manager
structure would result in more frequent shareholder meetings than would
otherwise be the case. However, 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.

--------

PAGE 17
<PAGE> 22

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 BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF
PROPOSAL 6.

PROPOSAL 7

TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR
ENDING MAY 31, 1999 (Trust Vote)

PricewaterhouseCoopers LLP, 1301 Avenue of the Americas, New York, NY 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 this proposal, 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
Proposal to be approved.

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.

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PAGE 18
<PAGE> 23

PROPOSAL 8

TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING
(for Approval by Each Fund as Necessary)

OTHER INFORMATION

SHARE OWNERSHIP OF EACH 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:

RESERVE BLUE CHIP GROWTH FUND

<TABLE>
<CAPTION>
AMOUNT &
NATURE OF
NAME & ADDRESS OF PERCENT OF BENEFICIAL NATURE OF
BENEFICIAL OWNER TITLE OF CLASS CLASS OWNERSHIP OWNERSHIP
----------------- -------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Bear Stearns Securities Corp. R 8.3% 814,135.90 Record
FBO 105-03292-24
1 Metrotech Center North
Brooklyn, NY 11201-3859
Trainer Wortham & Co. Inc. R 23.8% 2,321,559.89 Record
845 Third Ave.
New York, NY 10022
Bear Stearns Securities Corp. R 10.1% 986,244.14 Record
FBO 105-03293-23
1 Metrotech Center North
Brooklyn, NY 11201-3859
Reserve Management Corp. R 5.1% 500,989.10 Record
Defined Benefit Pension Plan
810 Seventh Avenue
New York, NY 10019
Reserve Management Co., Inc. I 100% 1,060.00 Beneficial
810 Seventh Avenue
New York, NY 10019
</TABLE>

--------

PAGE 19
<PAGE> 24

RESERVE CONVERTIBLE SECURITIES FUND

<TABLE>
<CAPTION>
AMOUNT &
NATURE OF
NAME & ADDRESS OF PERCENT OF BENEFICIAL NATURE OF
BENEFICIAL OWNER TITLE OF CLASS CLASS OWNERSHIP OWNERSHIP
----------------- -------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Bankers Trust Company as Pledgee R 23.2% 3,791,953.09 Record
280 Park Avenue
New York, NY 10017
William E. Simon Foundation Inc. R 9% 1,472,773.32 Record
310 South Street
Morristown, NJ 07962
New Vernon Advisors, Inc. R 9.3% 1,522,558.18 Record
310 South St. P.O. Box 191
Morristown, NJ 07962-1913
William E. Simon & Sons (IRA) R 5.5% 913,020.21 Record
310 South Street
Morristown, NJ 07962
William E. Simon & Sons (IRA) R 5.4% 889,134.26 Record
310 South St., P.O. Box 1913
Morristown, NJ 07962-1913
William E. Simon & Sons LLC, P.O.A R 5.8% 955,850.30 Record
310 South St. P.O. Box 19
Morristown, NJ 07962-1913
New Vernon Advisors, Inc. R 8.3% 1,364,941.98 Record
310 South St., P.O. Box 1913
Morristown, NJ 07962-1913
MCP Investment Associates, LLC R 7.4% 1,221,128 Beneficial
C/O Nations Bank
P.O. Box 888 South Service Rd.
Melville, NY 11747
Reserve Management Co., Inc. I 100% 997.00 Beneficial
810 Seventh Avenue
New York, NY 10019
</TABLE>

--------

PAGE 20
<PAGE> 25

RESERVE INFORMED INVESTORS GROWTH FUND

<TABLE>
<CAPTION>
AMOUNT &
NATURE OF
NAME & ADDRESS OF PERCENT OF BENEFICIAL NATURE OF
BENEFICIAL OWNER TITLE OF CLASS CLASS OWNERSHIP OWNERSHIP
----------------- -------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Bear Stearns Securities Corp. R 11.2% 303,268.62 Record
FBO 614-86111-29
1 Metrotech Center North
Brooklyn, NY 11201-3859
Bear Stearns Securities Corp. R 12.8% 346,094.60 Record
FBO 105-03292-24
1 Metrotech Center North
Brooklyn, NY 11201-3859
Bear Stearns Securities Corp. R 8.7% 235,490.11 Record
FBO 105-03293-23
1 Metrotech Center North
Brooklyn, NY 11201-3859
Anna T. Dolan MD PC R 5.9% 159,448.12 Beneficial
Pension Plan
22 Edgecliff Terrace
Yonkers, NY 10705
Reserve Management Corp. R 8.8% 236,706.64 Record
Defined Benefit Pension Plan
810 Seventh Avenue
New York, NY 10019
Reserve Management Co., Inc. I 100% 934.00 Beneficial
810 Seventh Avenue
New York, NY 10019
</TABLE>

--------

PAGE 21
<PAGE> 26

RESERVE INTERNATIONAL EQUITY FUND

<TABLE>
<CAPTION>
AMOUNT &
NATURE OF
NAME & ADDRESS OF PERCENT OF BENEFICIAL NATURE OF
BENEFICIAL OWNER TITLE OF CLASS CLASS OWNERSHIP OWNERSHIP
----------------- -------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Washington Trust Bank R 13.5% 1,514,964.04 Record
P.O. Box 2127
Spokane, WA 99210-2127
Washington Trust Bank R 24.9% 2,780,645.24 Record
Attn: Trust Operations
P.O. Box 2127
Spokane, WA 99210-2127
Charles Schwab & Co. Inc. R 19% 2,128,306.61 Record
Special Custody Account
F/B/O Customer
101 Montgomery St.
Attn: Mutual Funds
San Francisco, CA 94104
Wabanc & Co. R 16.4% 1,831,645.75 Record
C/O Washington Trust Co.
P.O. Box 2127 Trust Ops
Spokane, WA 99210-2121
Reserve Management Co., Inc. I 100% 1,042.00 Beneficial
810 Seventh Avenue
New York, NY 10019
</TABLE>

RESERVE LARGE-CAP GROWTH FUND

<TABLE>
<CAPTION>
AMOUNT &
NATURE OF
NAME & ADDRESS OF PERCENT OF BENEFICIAL NATURE OF
BENEFICIAL OWNER TITLE OF CLASS CLASS OWNERSHIP OWNERSHIP
----------------- -------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Charles Schwab & Co. Inc. R 67.1% 13,511,981.48 Record
101 Montgomery St.
San Francisco, CA 94104
Reserve Management Co., Inc. I 100% 1,069.00 Beneficial
810 Seventh Avenue
New York, NY 10019
</TABLE>

--------

PAGE 22
<PAGE> 27

RESERVE MID-CAP EQUITY FUND

<TABLE>
<CAPTION>
AMOUNT &
NATURE OF
NAME & ADDRESS OF PERCENT OF BENEFICIAL NATURE OF
BENEFICIAL OWNER TITLE OF CLASS CLASS OWNERSHIP OWNERSHIP
----------------- -------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Bear Stearns Securities Corp. R 5.9% 129,598.10 Record
FBO 614-86111-29
1 Metrotech Center North
Brooklyn, NY 11201-3859
Boise Valley Asthma & R 5% 110,307.48 Beneficial
Allergy Clinic
Pension & P/S Fixed Account
901 N. Curtis Suite 100
Boise, ID 83706-1339
Bear Stearns Securities Corp. R 17.4% 381,633.28 Record
FBO 105-03292-24
1 Metrotech Center North
Brooklyn, NY 11201-3859
Bear Stearns Securities Corp. R 20% 456,121.05 Record
FBO 105-03293-23
1 Metrotech Center North
Brooklyn, NY 11201-3859
Bear Stearns Securities Corp. R 7.6% 168,332.41 Record
FBO 105-03296-20
1 Metrotech Center North
Brooklyn, NY 11201-3859
Anna T. Dolan MD PC R 6.6% 146,121.57 Beneficial
Pension Plan
22 Edgecliff Terrace
Yonkers, NY 10705
Reserve Management Corp. R 6.6% 145,032.53 Beneficial
Defined Benefit Pension Plan
810 Seventh Avenue
New York, NY 10019
Reserve Management Co., Inc. I 100% 1,064.00 Beneficial
810 Seventh Avenue
New York, NY 10019
</TABLE>

--------

PAGE 23
<PAGE> 28

RESERVE SMALL-CAP GROWTH FUND

<TABLE>
<CAPTION>
AMOUNT &
NATURE OF
NAME & ADDRESS OF PERCENT OF BENEFICIAL NATURE OF
BENEFICIAL OWNER TITLE OF CLASS CLASS OWNERSHIP OWNERSHIP
----------------- -------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Bear Stearns Securities Corp. R 9.8% 454,791.60 Record
FBO 614-86111-29
1 Metrotech Center North
Brooklyn, NY 11201-3859
Bear Stearns Securities Corp. R 6.8% 316,929.03 Record
FBO 614-86189-18
1 Metrotech Center North
Brooklyn, NY 11201-3859
Bear Stearns Securities Corp. R 12.8% 591,374.73 Record
FBO 105-03292-24
1 Metrotech Center North
Brooklyn, NY 11201-3859
Bear Stearns Securities Corp. R 9.8% 454,785.47 Record
FBO 105-03293-23
1 Metrotech Center North
Brooklyn, NY 11201-3859
Reserve Management Corp R 6.5% 299,321.18 Beneficial
Defined Benefit Pension Plan
810 Seventh Avenue
New York, NY 10019-5818
Reserve Management Co., Inc. I 100% 1,064.00 Beneficial
810 Seventh Avenue
New York, NY 10019
</TABLE>

SECURITY OWNERSHIP OF MANAGEMENT

As of the Record Date, the records of the Trust do not reflect that the
Trustees and officers of the Trust owned more than 1% of the outstanding shares
of beneficial interest of each of the Funds.

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

--------

PAGE 24
<PAGE> 29

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 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 Communication Corporation ("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 the execution of
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 by the Investment Manager.

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 800-690-6903.

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, UNDERWRITER & ADMINISTRATOR

The Investment Adviser is Reserve Management Company, Inc., 810 Seventh
Avenue, New York NY 10019. Resrv Partners, Inc., is the Funds' principal
underwriter.

--------

PAGE 25
<PAGE> 30

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 Reserve Management Company, Inc., and the
Funds. 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.

IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY

RESERVE PRIVATE EQUITY SERIES

November 13, 1998

--------

PAGE 26
<PAGE> 31

EXHIBIT A

"COMPREHENSIVE FEE"
INVESTMENT MANAGEMENT AGREEMENT

THIS AGREEMENT, dated the ________________ day of ____________________, 1998,
made and entered into by and between Reserve Private Equity Series, (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 Reserve ______ 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 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

---------

PAGE A-1
<PAGE> 32

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

---------

PAGE A-2
<PAGE> 33

Manager to the Trust at 810 Seventh Avenue, New York, NY 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.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed on the day and year first above written.

<TABLE>
<S> <C>
RESERVE PRIVATE EQUITY SERIES

By
-------------------------------------------------
President
ATTEST:

- ---------------------------------------------------
Secretary
RESERVE MANAGEMENT COMPANY, INC.

By
-------------------------------------------------
President
ATTEST:

- ---------------------------------------------------
Secretary
</TABLE>

---------

PAGE A-3
<PAGE> 34

EXHIBIT B
SUB-INVESTMENT MANAGEMENT AGREEMENT
BY, BETWEEN AND AMONG
RESERVE PRIVATE EQUITY SERIES,
RESERVE MANAGEMENT COMPANY, INC.
AND
------------------------------------------

FOR THE
RESERVE __________ FUND

THIS AGREEMENT made this ____ day of ________, 199_, by, between and among
RESERVE PRIVATE EQUITY SERIES ("Trust"), RESERVE MANAGEMENT COMPANY, INC., a New
Jersey corporation having its principal place of business in New York (the
"Investment Manager") and ____________., a corporation having its principal
place of business in ____________ (the "Sub-Investment Manager");

WITNESSETH:

WHEREAS, the Trust is engaged in business as a non-diversified open-end
management investment company and is registered as such under the Investment
Company Act of 1940 (the "1940 Act");

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;

WHEREAS, the Trust has employed the Investment Manager to act as investment
manager of the Reserve ________ Fund ("Fund") as set forth in the Investment
Management Agreement between the Trust and the Investment Manager dated
__________, 199_, (the "Investment Management Agreement");

WHEREAS, the Sub-Investment Manager is engaged in the business of rendering
investment advisory services and is registered as an investment adviser under
the Investment Advisers Act of 1940; and

WHEREAS, the Trust and the Investment Manager desire to retain the
Sub-Investment Manager to render investment management services to the Fund in
the manner and on the terms hereinafter set forth;

The parties agree as follows:

1. DUTIES OF THE SUB-INVESTMENT MANAGER. The Sub-Investment Manager hereby
agrees subject to the supervision of the Investment Manager and the Trust (1) to
act as the investment adviser to, and investment manager of, the Reserve Fund
of the Trust, (2) to manage the investment and reinvestment of the assets of the
Fund for the period and on the terms and conditions set forth in this Agreement,
and (3) during the term hereof, at its own expense, to render the services and
to assume the obligations herein set forth for the compensation provided for
herein.

2. SUB-INVESTMENT MANAGEMENT SERVICES. In performing the duties stated in
Paragraph 1 above, the Sub-Investment Manager will regularly provide the
Investment Manager and the Trust with such investment research, advice and
management as the Investment Manager and the Trust may from time to time
consider necessary for the proper management of the Fund. The Sub-Investment
Manager will furnish continuously an investment program and will conduct a
continuous program of evaluation of assets in the Fund. In this connection the
Sub-Investment Manager will provide the Board of Trustees and officers of the
Trust with such statistical information with respect to investments of the Fund
and such periodic and special reports and information as the Investment Manager
or the Trust may reasonably request. In addition the Sub-Investment Manager will
determine which securities or other invest-

--------

PAGE B-1
<PAGE> 35

ments shall be purchased, sold or exchanged and what portion of the assets of
the Fund shall be held in securities or other assets in which it may invest. In
so acting, the Sub-Investment Manager shall always be subject to, and shall
follow at all times (i) any restrictions of the Trust's Declaration of Trust and
By-Laws, as amended from time to time, (ii) the applicable provisions of the
1940 Act, and any rules and regulations adopted thereunder, (iii) statements
relating to the Fund's investment objectives, policies and restrictions as the
same are set forth in the prospectus of the Fund and statement of additional
information then currently effective under the Securities Act of 1933, and (iv)
any other provision of state and federal law applicable to it in connection with
its duties hereunder. Should the Board of Trustees of the Trust or the
Investment Manager at any time, however, make any definite determination as to
investment policy of the Fund and notify the Sub-Investment Manager thereof, the
Sub-Investment Manager shall be bound by such determination for the period, if
any, specified in such notice or until similarly notified that such
determination has been revoked. The Sub-Investment Manager shall take, on behalf
of the Trust, all actions which it deems necessary to implement the investment
policies of the Fund, determined as provided above, and in particular shall
place orders for the purchase or sale of securities or other investments for the
Fund with brokers or dealers selected by the Sub-Investment Manager.

3. PURCHASE AND SALE OF ASSETS. Nothing in this Agreement shall preclude
the combining of orders for the sale or purchase of securities or other
investments with other accounts managed by the Sub-Investment Manager, provided
that the Sub-Investment Manager does not favor any account over any other
account and provided that any purchase or sale orders executed contemporaneously
shall be allocated in a manner the Sub-Investment Manager deems equitable among
the accounts involved and at a price which is approximately averaged. Neither
the Sub-Investment Manager, nor any of its principals, directors, officers or
employees, nor any person, firm or corporation controlling, controlled by or
under common control with it shall act as a principal or receive any commission
as agent in connection with the purchase or sale of assets of the Fund.

In placing orders for the purchase or sale of investments for the Fund, the
Sub-Investment Manager shall use its best efforts to obtain for the Fund the
most favorable price and execution available, considering all of the
circumstances, and shall maintain records adequate to demonstrate compliance
with this requirement.

Subject to prior authorization by the Trust's Board of Trustees of
appropriate policies and procedures, the Sub-Investment Manager may, to the
extent authorized by Section 28(e) of the Securities Exchange Act of 1934, cause
the Fund to pay a broker or dealer that provides research and other brokerage
services to the Sub-Investment Manager an amount of commission for effecting a
Fund investment transaction in excess of the amount of commission another broker
or dealer would have charged for effecting that transaction. In the event of
such authorization, and to the extent authorized by said section, the Sub-
Investment Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of
such action.

4. COMPENSATION OF THE SUB-INVESTMENT MANAGER. For the services rendered by
the Sub-Investment Manager, the Investment Manager shall pay to the
Sub-Investment Manager at the end of each calendar quarter a fee equal to
one-half of the net profit before taxes. Net profit is deemed to be the
comprehensive fee less fund expenses (as defined by the SEC and exemplified by
The Reserve Funds' accounting as audited by PricewaterhouseCoopers LLP or
successor auditors) and all applicable sales and marketing costs of both the
Investment Manager and Sub-Investment Manager. Expenses are allocated to a fund
on an identified cost basis or prorated by assets or number of accounts where
facilities, services or personnel are utilized by more than one fund. The Fund
will be audited annually and its books are open to inspection by the Investment
Manager and Sub-Investment Manager on any reasonable frequency with or without
notice. The Investment Manager shall provide an unaudited Statement of
Operations quarterly of the revenues received from and expenses incurred on
behalf of the Fund.

The payment of the advisory fees and the allocation of charges and expenses
between the Trust and the Investment Manager are set forth in the Investment
Management Agreement. Nothing in this Sub-

--------

PAGE B-2
<PAGE> 36

Investment Management Agreement shall change or affect that arrangement. The
payment of advisory fees and the apportionment of any expenses related to the
services of the Sub-Investment Manager shall be the sole concern of the
Investment Manager and the Sub-Investment Manager and shall not be the
responsibility of the Trust.

5. BOOKS AND RECORDS. The Sub-Investment Manager agrees that all books and
records which it maintains for the Trust are the Trust's property, and, in the
event of termination of this Agreement for any reason, the Sub-Investment
Manager agrees to return to the Trust, free from any claim or retention of
rights by the Sub-Investment Manager, all records relating to the Fund. The
Sub-Investment Manager also agrees upon request of the Investment Manager or the
Fund, promptly to surrender the books and records to the requester or make the
books and records available for inspection by representatives of regulatory
authorities and the Investment Manager or the Fund. In connection with its
duties hereunder the Sub-Investment Manager further agrees to maintain, prepare
and preserve books and records in accordance with the 1940 Act and rules
thereunder, including but not limited to, Rule 31a-1 and 31a-2.

The Sub-Investment Manager will use records or information obtained under
this Agreement only for the purposes contemplated hereby, and will not disclose
such records or information in any manner other than as expressly authorized by
the Trust, or if disclosure is expressly required by applicable Federal or state
regulatory authorities or by this Agreement.

6. LIABILITY AND INDEMNIFICATION. In performing its duties hereunder, the
Sub-Investment 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 Sub-Investment 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 Sub-Investment Manager's duties or by reason of reckless
disregard of the Sub-Investments Manager's obligations and duties under this
Agreement. The Sub-Investment Manager shall also comply with the Fund's Code of
Ethics, which has been provided to it.

Investment Manager and Trust agree to hold harmless and indemnify
Sub-Investment Manager from and against any loss, liability, damages or
expenses, including attorney fees, resulting from willful misfeasance, bad faith
or gross negligence by Investment Manager or Trust, or by any officer, director,
employee or agent of either. Further, Investment Manager and Trust agree to
indemnify Sub-Investment Manager for any loss, liability, damages or expenses,
including attorney fees, that may be incurred by Sub-Investment Manager as a
result of a breach, or allegations of a breach, of a fiduciary duty by
Investment Manager or Trust or as a result of a violation, or allegation of a
violation, by Investment Manager or Trust of the federal securities laws,
including but not limited to, the Investment advisers Act of 1940 and the
Investment Company Act of 1940, or of any other federal or state law(s), rule(s)
or regulation(s) applicable to Investment Manager or Trust.

7. RELIANCE ON DOCUMENTS. The Trust or its agent will provide timely
information to the Sub-Investment Manager regarding such matters as purchases
and redemptions of shares in the Fund, the cash requirements, and cash available
for investment in the Fund, and all other information as may be reasonably
necessary or appropriate in order for the Sub-Investment Manager to perform its
responsibilities hereunder.

The Investment Manager has herewith furnished the Sub-Investment Manager
copies of the Fund's prospectus and statement of additional information, the
Declaration of Trust and By-Laws as currently in effect and agrees during the
continuance of this agreement to furnish the Sub-Investment Manger copies of any
amendments or supplements thereto before or at the time the amendments or
supplements become effective. The Sub-Investment Manager will be entitled to
rely on all such documents furnished to it by the Investment Manager of the
Fund.

8. APPROVAL AND TERMINATION OF THIS AGREEMENT. This Agreement and any
amendments hereto shall be approved by vote of the holders of a majority (as
defined in the 1940 Act) of the outstanding

--------

PAGE B-3
<PAGE> 37

voting securities of the Fund, provided, however, that if the shareholders of
the Fund fail to approve the Agreement as provided herein, the Sub-Investment
Manager may continue to serve in such capacity in the manner and to the extent
permitted by the Act and the rules thereunder, and no amendment to this
Agreement shall become effective until so approved.

This Agreement shall become effective as of the date first above written.
Thereafter, it shall continue in effect from year to year, but only so long as
such continuance is specifically approved at least annually by (a) the Board of
Trustees of the Trust, or by the vote of a majority of the outstanding voting
securities of the Fund, and (b) a majority of those trustees who are not
interested persons of any party to this Agreement cast in person at a meeting
called for the purpose of voting on such approval. This Agreement may be
terminated without the payment of any penalty, by the Board of Trustees of the
Trust, by vote of a majority of the outstanding shares of the Fund, or by the
Investment Manager on sixty days' written notice to the Sub-Investment Manager,
or by the Sub-Investment Manager on sixty days' written notice to the Trust or
the Investment Manager. This Agreement shall automatically terminate in the
event of its assignment or in the event of termination of the Investment
Advisory Agreement.

9. DEFINITIONS. The terms "assignment," "interested person," and "majority
of the outstanding voting securities," when used in this Agreement, shall have
the respective meanings specified under the Investment Company Act and the rules
thereunder.

10. GOVERNING LAW. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of New York as at the time
in effect and the applicable provisions of the 1940 Act. To the extent that the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter shall
control.

11. SHAREHOLDER LIABILITY. The Sub-Investment 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 Sub-Investment 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 B-4
<PAGE> 38

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed on the day and year first above written.

<TABLE>
<S> <C>
RESERVE PRIVATE EQUITY SERIES
Attest:
- --------------------------------------------------- BY:
------------------------------------------------
Title:
---------------------------------------------- Title:
----------------------------------------------

[INSERT NAME OF SUB ADVISER]
Attest:
- --------------------------------------------------- BY:
------------------------------------------------
Title:
---------------------------------------------- Title:
----------------------------------------------

RESERVE MANAGEMENT COMPANY, INC.
Attest:
- --------------------------------------------------- BY:
------------------------------------------------
Title:
---------------------------------------------- Title:
----------------------------------------------
</TABLE>

--------

PAGE B-5
<PAGE> 39

PROXY

RESERVE PRIVATE EQUITY SERIES

RESERVE BLUE CHIP GROWTH 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 Reserve Blue Chip Growth 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 William E. Viklund
Edwin Ehlert, Jr. Henri W. Emmet Bruce R. Bent II
Vincent J. Mattone Diana P. Herrmann Richard Bassuk

[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT

I.
-----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)

II. To approve a new Investment Management Agreement.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

III. To approve a new Sub-Advisory Agreement.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

-1-
<PAGE> 40

IV. To approve the following proposed amendments:

A. To amend the Trust's Declaration of Trust to provide dollar-based
voting rights;

[ ] FOR [ ] AGAINST [ ] ABSTAIN

B. To change the designation of the Funds' fundamental investment
policy on investing for control of portfolio companies.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

V. To approve changes to the Funds' fundamental investment policy to
permit a Master/Feeder 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 Funds without
shareholder approval.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

VII. To ratify the 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)

-2-
<PAGE> 41

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.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
RESERVE PRIVATE EQUITY SERIES
NOVEMBER 18, 1998

-3-
<PAGE> 42

PROXY

RESERVE PRIVATE EQUITY SERIES

RESERVE CONVERTIBLE SECURITIES 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 Reserve Convertible Securities
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 William E. Viklund
Edwin Ehlert, Jr. Henri W. Emmet Bruce R. Bent II
Vincent J. Mattone Diana P. Herrmann Richard Bassuk

[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT

I.
-----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)

II. To approve a new Investment Management Agreement.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

III. To approve a new Sub-Advisory Agreement.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

-1-
<PAGE> 43

IV. To approve the following proposed amendments:

A. To amend the Trust's Declaration of Trust to provide dollar-based
voting rights;

[ ] FOR [ ] AGAINST [ ] ABSTAIN

B. To change the designation of the Funds' fundamental investment
policy on investing for control of portfolio companies.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

V. To approve changes to the Funds' fundamental investment policy to
permit a Master/Feeder Structure.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

VII. To ratify the 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)

-2-
<PAGE> 44

PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
RESERVE PRIVATE EQUITY SERIES
NOVEMBER 18, 1998

-3-
<PAGE> 45

PROXY

RESERVE PRIVATE EQUITY SERIES

RESERVE INFORMED INVESTORS GROWTH 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 Reserve Informed Investors
Growth 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 William E. Viklund
Edwin Ehlert, Jr. Henri W. Emmet Bruce R. Bent II
Vincent J. Mattone Diana P. Herrmann Richard Bassuk

[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT

I.
------------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)

II. To approve a new Investment Management Agreement.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

III. To approve a new Sub-Advisory Agreement.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

-1-
<PAGE> 46

IV. To approve the following proposed amendments:

A. To amend the Trust's Declaration of Trust to provide dollar-based
voting rights;

[ ] FOR [ ] AGAINST [ ] ABSTAIN

B. To change the designation of the Funds' fundamental investment
policy on investing for control of portfolio companies.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

V. To approve changes to the Funds' fundamental investment policy to
permit a Master/Feeder Structure.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

VII. To ratify the 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)

-2-
<PAGE> 47

PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
RESERVE PRIVATE EQUITY SERIES
NOVEMBER 18, 1998

-3-
<PAGE> 48

PROXY

RESERVE PRIVATE EQUITY SERIES

RESERVE INTERNATIONAL EQUITY 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 Reserve International Equity
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 William E. Viklund
Edwin Ehlert, Jr. Henri W. Emmet Bruce R. Bent II
Vincent J. Mattone Diana P. Herrmann Richard Bassuk

[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT

I.
-----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)

II. To approve a new Investment Management Agreement.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

III. To approve a new Sub-Advisory Agreement.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

-1-
<PAGE> 49

IV. To approve the following proposed amendments:

A. To amend the Trust's Declaration of Trust to provide dollar-based
voting rights;

[ ] FOR [ ] AGAINST [ ] ABSTAIN

B. To change the designation of the Funds' fundamental investment
policy on investing for control of portfolio companies.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

V. To approve changes to the Funds' fundamental investment policy to
permit a Master/Feeder Structure.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

VII. To ratify the 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)

-2-
<PAGE> 50

PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
RESERVE PRIVATE EQUITY SERIES
NOVEMBER 18, 1998

-3-
<PAGE> 51

PROXY

RESERVE PRIVATE EQUITY SERIES

RESERVE LARGE-CAP GROWTH 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 Reserve Large-Cap Growth 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 William E. Viklund
Edwin Ehlert, Jr. Henri W. Emmet Bruce R. Bent II
Vincent J. Mattone Diana P. Herrmann Richard Bassuk

[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT

I.
-----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)

II. To approve a new Investment Management Agreement.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

III. To approve a new Sub-Advisory Agreement.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

-1-
<PAGE> 52

IV. To approve the following proposed amendments:

A. To amend the Trust's Declaration of Trust to provide dollar-based
voting rights;

[ ] FOR [ ] AGAINST [ ] ABSTAIN

B. To change the designation of the Funds' fundamental investment
policy on investing for control of portfolio companies.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

V. To approve changes to the Funds' fundamental investment policy to
permit a Master/Feeder Structure.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

VII. To ratify the 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)

-2-
<PAGE> 53

PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
RESERVE PRIVATE EQUITY SERIES
________________, 1998

-3-
<PAGE> 54

PROXY

RESERVE PRIVATE EQUITY SERIES

RESERVE MID-CAP EQUITY 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 Reserve Mid-Cap Equity 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 William E. Viklund
Edwin Ehlert, Jr. Henri W. Emmet Bruce R. Bent II
Vincent J. Mattone Diana P. Herrmann Richard Bassuk

[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT

I.
-----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)

II. To approve a new Investment Management Agreement.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

III. To approve a new Sub-Advisory Agreement.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

-1-
<PAGE> 55

IV. To approve the following proposed amendments:

A. To amend the Trust's Declaration of Trust to provide dollar-based
voting rights;

[ ] FOR [ ] AGAINST [ ] ABSTAIN

B. To change the designation of the Funds' fundamental investment
policy on investing for control of portfolio companies.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

V. To approve changes to the Funds' fundamental investment policies to
permit a Master/Feeder Structure.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

VII. To ratify the 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)

-2-
<PAGE> 56

PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
RESERVE PRIVATE EQUITY SERIES
NOVEMBER 18, 1998

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<PAGE> 57

PROXY

RESERVE PRIVATE EQUITY SERIES

RESERVE SMALL-CAP GROWTH 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 Reserve Small-Cap Growth 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 William E. Viklund
Edwin Ehlert, Jr. Henri W. Emmet Bruce R. Bent II
Vincent J. Mattone Diana P. Herrmann Richard Bassuk

[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT

I.
-----------------------------------------------------------------------
(Only use to withhold authority to vote on individual Nominees)

II. To approve a new Investment Management Agreement.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

III. To approve a new Sub-Advisory Agreement.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

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<PAGE> 58

IV. To approve the following proposed amendments:

A. To amend the Trust's Declaration of Trust to provide dollar-based
voting rights;

[ ] FOR [ ] AGAINST [ ] ABSTAIN

B. To change the designation of the Funds' fundamental investment
policy on investing for control of portfolio companies.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

V. To approve changes to the Funds' fundamental investment policy to
Permit a Master/Feeder Structure.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

VII. To ratify the 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)

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<PAGE> 59

PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
RESERVE PRIVATE EQUITY SERIES
NOVEMBER 18, 1998

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