The RESET pin on the device is active-low, and setting the pin low externally will result in a Reset of the device.
AVR devices feature an internal pull-up resistor on the RESET pin, and an external pull-up resistor is usually not required.
The following figure shows the recommendation for connecting an external Reset switch to the device.
Figure 1. Recommended External Reset Circuit
Schematic
A resistor in series with the switch can safely discharge the filtering capacitor. This prevents a current surge when shorting the filtering capacitor, as this may cause a noise spike that can harm the system.