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MULTIPLE CLASS PLAN
PURSUANT TO RULE 18f-3
for
RESERVE PRIVATE EQUITY SERIES
Reserve Blue Chip Growth Fund
Reserve Informed Investors Growth Fund
Reserve International Equity Fund
Reserve International Small-Cap Fund
Reserve Large-Cap Growth Fund
Reserve Small-Cap Growth Fund
Reserve Strategic Growth Fund
WHEREAS, Reserve Private Equity Series (the "Trust") engages in
business as an open-end management investment company and is registered as such
under the Investment Company Act of 1940, as amended (the "Act");
WHEREAS, shares of beneficial interest of the Trust are currently
divided into seven series: Reserve Blue Chip Growth Fund; Reserve Informed
Investors Growth Fund; Reserve International Equity Fund; Reserve International
Small-Cap Fund, Reserve Large-Cap Growth Fund; Reserve Small-Cap Growth Fund;
and Reserve Strategic Growth Fund (the "Funds");
WHEREAS, the Trust desires to adopt, on behalf of each of the Funds, a
Multiple Class Plan pursuant to Rule 18f-3 under the Act (the "Plan") with
respect to each of the Funds; and
WHEREAS, the Trust employs Reserve Management Company, Inc. (the
"Adviser") as its investment manager and adviser and Resrv Partners, Inc., a
wholly-owned subsidiary of the Adviser ("Distributor"), as distributor of the
securities of which it is the issuer.
NOW, THEREFORE, the Trust hereby adopts, on behalf of the Funds, the
Plan, in accordance with Rule 18f-3 under the Act on the following terms and
conditions:
1. Features of the Classes. Each of the Funds issues its shares of
beneficial interest in two classes: "Class R Shares" and "Class I Shares".
Shares of each class of a Fund shall represent an equal pro rata interest in
such Fund and, generally, shall have identical voting, dividend, liquidation,
and other rights, preferences, powers, restrictions, limitations,
qualifications, and terms and conditions, except that: (a) each class shall have
a different designation; (b) each class of shares shall bear any Class Expenses,
as defined
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in Section 3 below; and (c) each class shall have exclusive voting rights on any
matter submitted to shareholders that relates solely to its distribution
arrangement and each class shall have separate voting rights on any matter
submitted to shareholders in which the interests of one class differ from the
interests of any other class. In addition, shares of each class of a Fund shall
have the features described in Sections 2, 3, 4 and 5 below.
2. Distribution Plan. The Trust has adopted a Distribution Plan with
respect to the Class R shares of each Fund pursuant to Rule 12b-1 promulgated
under the Securities Exchange Act of 1934. The Distribution Plan authorizes the
Trust to make assistance payments to the Distributor for distribution services
at an annual rate of up to 0.25% of the average daily net asset value
attributable to the Class R shares of each Fund and further authorizes the
Distributor to make assistance payments to brokers, financial institutions and
other financial intermediaries for shareholder accounts as to which a payee has
rendered distribution services to the Trust. Class I shares of each Fund do not
participate in the Distribution Plan.
As used herein, the term "distribution services" shall include services
rendered by Distributor as distributor of the shares of a Fund in connection
with any activities or expense primarily intended to result in the sale of
shares of a Fund, including, but not limited to, compensation to registered
representatives or other employees of Distributor or to other broker-dealers
that have entered into an agreement with Distributor, compensation to and
expenses of employees of Distributor who engage in or support distribution of
the Funds' shares; printing of prospectuses and reports for other than existing
shareholders; preparation, printing and distribution of sales literature and
advertising materials; and profit and overhead on the foregoing.
3. Allocation of Income and Expenses. (a) The gross income of each Fund
shall, generally, be allocated to each class on the basis of net assets. To the
extent practicable, certain expenses (other than Class Expenses as defined below
which shall be allocated more specifically) shall be subtracted from the gross
income on the basis of the net asset value of each class of the Fund. These
expenses include:
(1) Expenses incurred by the Trust (for example, fees of
Trustees, auditors and legal counsel) not attributable to a particular
Fund or to a particular class of shares of a Fund ("Trust Level
Expenses"); and
(2) Expenses incurred by a Fund not attributable to any
particular class of the Fund's shares (for example, advisory fees,
custodial fees, or other expenses relating to the management of the
Fund's assets) ("Fund Expenses").
(b) Expenses attributable to a particular class ("Class
Expenses") shall be limited to: (i) payments made pursuant to a Distribution
Plan; (ii) transfer agent fees attributable to a specific class; (iii) printing
and postage expenses related to preparing and distributing materials such as
shareholder reports, prospectuses and proxies to current shareholders of a
specific class; (iv) Blue Sky registration fees incurred by a class; (v) SEC
registration fees incurred by a class; (vi) the expense of administrative
personnel and
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services to support the shareholders of a specific class; (vii) litigation or
other legal expenses relating solely to one class; and (viii) Trustees' fees
incurred as a result of issues relating to one class. Expenses in category (i)
above must be allocated to the class for which such expenses are incurred. All
other "Class Expenses" listed in categories (ii)-(viii) above may be allocated
to a class but only if the President and Chief Financial Officer have
determined, subject to Board approval or ratification, which of such categories
of expenses will be treated as Class Expenses consistent with applicable legal
principles under the Act and the Internal Revenue Code of 1986, as amended (the
"Code").
Therefore, expenses of a Fund shall be apportioned to each class of
shares depending on the nature of the expense item. Trust Level Expenses and
Fund Expenses will be allocated among the classes of shares based on their
relative net asset values. Approved Class Expenses shall be allocated to the
particular class to which they are attributable. In addition, certain expenses
may be allocated differently if their method of imposition changes. Thus, if a
Class Expense can no longer be attributed to a class, it shall be charged to a
Fund for allocation among classes, as determined by the Board of Trustees. Any
additional Class Expenses not specifically identified above which are
subsequently identified and determined to be properly allocated to one class of
shares shall not be so allocated until approved by the Board of Trustees of the
Trust in light of the requirements of the Act and the Code.
4. Exchange Privileges. Shares of each Fund may be exchanged for shares
in the Reserve money-market funds or for shares of the same class of any other
Fund. The exchange privileges may be modified or terminated at any time, or from
time to time, upon 60 days' notice to shareholders.
5. Conversion Features. There shall be no conversion features
associated with any of the classes of shares of any Fund.
6. Quarterly and Annual Reports. The Trustees shall receive quarterly
and annual statements concerning all allocated Class Expenses and distribution
and servicing expenditures complying with paragraph (b)(3)(ii) of Rule 12b-1, as
it may be amended from time to time. In the statements, only expenditures
properly attributable to the sale or servicing of a particular class of shares
will be used to justify any distribution or servicing fee or other expenses
charged to that class. Expenditures not related to the sale or servicing of a
particular class shall not be presented to the Trustees to justify any fee
attributable to that class. The statements, including the allocations upon which
they are based, shall be subject to the review and approval of the independent
Trustees in the exercise of their fiduciary duties.
7. Waiver or Reimbursement of Expenses. Expenses may be waived or
reimbursed by any adviser to the Trust or any other provider of services to the
Trust without the prior approval of the Trust's Board of Trustees.
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8. Effectiveness of Plan. The Plan shall not take effect until it has
been approved by votes of a majority of both (a) the Trustees of the Trust and
(b) those Trustees of the Trust who are not "interested persons" of the Trust
(as defined in the Act) and who have no direct or indirect financial interest in
the operation of this Plan, cast in person at a meeting (or meetings) called for
the purpose of voting on this Plan.
9. Material Modifications. This Plan may not be amended to modify
materially its terms unless such amendment is approved in the manner provided
for initial approval in Paragraph 8 hereof.
10. Limitation of Liability. The Trustees of the Trust and the
shareholders of each Fund shall not be liable for any obligations of the Trust
or any Fund under this Plan, and Distributor or any other person, in asserting
any rights or claims under this Plan, shall look only to the assets and property
of the Trust or such Funds in settlement of such right or claim, and not to such
Funds in settlement of such right or claim, and not to such Trustees or
shareholders.
IN WITNESS WHEREOF, the Trust, on behalf of the Funds, has adopted this
Multiple Class Plan as of the ____ day of __________, 2000, to be effective June
30, 2000.
RESERVE PRIVATE EQUITY SERIES
By:___________________________
Name: Bruce R. Bent II
Title: President
