The Board of Trustees of the Reserve Fund announced Wednesday the adoption of a plan of liquidation for its Primary Fund. The Reserve Fund announced the liquidation of the Primary Fund after it became the first money market fund in a decade to “break the buck” earlier this year. Implementation of the plan would be supervised by the Securities and Exchange Commission as required under the conditions of the exemptive order issued by the Commission on September 22. The Reserve Fund stated that its plan for liquidation would involve “interim distributions” on a pro rata basis to (i) investors that owned shares of the Primary Fund as of 8:00 a.m., Eastern time, on September 15, 2008 (other than those already redeemed) and (ii) investors that purchased Primary Fund shares on and after September 15, 2008. The Reserve Fund specified that such distributions are considered “interim” because many potential liabilities remain outstanding in connection with pending and potential litigation and related claims and indemnities. As such, the Fund will be unable to distribute the full amount of the Primary Fund’s assets until such liabilities have been resolved to the satisfaction of the Board of Trustees. However, in the interest in making interim distributions, the Reserve Fund will establish a “special reserve” which will include amounts that would be required to satisfy disputed claims, while leaving the remaining assets of the Primary Fund available for liquidation and distribution on a periodic basis.

RMCI, as investment adviser, shall accumulate assets of the Primary Fund for distribution through (i) the proceeds upon maturity of Primary Fund holdings and (ii) the sale of Primary Fund assets. In addition, the Board of Trustees believes that it is in the best interest of the shareholders for the Primary Fund to accumulate cash in order to maximize the amount received by the Primary Fund upon disposition of its assets. To that end, RMCI (in consultation with the Board of Trustees) will have discretion whether to dispose of or retain assets based on the best interests of the Primary Fund in terms of maximizing value. In the meantime, all cash held by the Primary Fund will be invested in short term, liquid investments.

The Primary Fund distributed approximately $14.4 billion to shareholders on Wednesday, which follows a $26 billion distribution on October 30 and 31 of this year. Future interim distributions will be made in increments of $5 billion as the Primary Fund accumulates cash sufficient to make such distributions. These distributions will continue to be made until all of the Primary Fund’s assets (net of the special reserve and income generated since September 15, 2008), have been distributed.