MERRILL LYNCH FUNDS FOR INSTITUTIONS SERIES, DEFS14A, 1998-05-05

MERRILL LYNCH FUNDS FOR INSTITUTIONS SERIES
DEFS14A, 1998-05-05

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<PAGE> 1

SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

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>
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(c)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>

MERRILL LYNCH FUNDS FOR INSTITUTIONS SERIES
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charters)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(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:

------------------------------------------------------------------------
<PAGE> 2

MERRILL LYNCH FUNDS FOR INSTITUTIONS SERIES

ONE FINANCIAL CENTER
BOSTON, MA 02111
------------------------

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
JUNE 8, 1998
------------------------

TO THE SHAREHOLDERS OF
MERRILL LYNCH FUNDS FOR INSTITUTIONS SERIES:

NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of Merrill Lynch Funds For Institutions Series (the "Trust") will be
held at the offices of Merrill Lynch, One Financial Center, 2nd Floor, Boston,
MA 02111 on June 8, 1998 at 8:00 A.M. for the following purposes:

(1) To elect a Board of Trustees to serve until their successors are
duly elected and qualified;

(2) To consider and act upon a proposal to ratify the selection of
Deloitte & Touche LLP to serve as independent auditors of the Trust for the
current fiscal year;

(3) For the shareholders of each of the Merrill Lynch Premier
Institutional Fund, Merrill Lynch Institutional Fund and Merrill Lynch
Government Fund, to consider and act upon a proposal to amend the
investment restrictions of the Fund; and

(4) To transact such other business as may properly come before the
Meeting or any adjournment thereof.

The Board of Trustees has fixed the close of business on April 20, 1998 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Meeting or any adjournment thereof.

A complete list of the shareholders of the Trust entitled to vote at the
Meeting will be available and open to the examination of any shareholder of the
Trust for any purpose germane to the Meeting during ordinary business hours from
and after April 21, 1998, at One Financial Center, 23rd Floor Boston, MA 02111.
Shareholders are cordially invited to attend the Meeting. SHAREHOLDERS WHO DO
NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE REQUESTED TO COMPLETE, DATE AND
SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED
FOR THIS PURPOSE. The enclosed proxy is being solicited on behalf of the Board
of Trustees of the Trust.

By Order of the Board of Trustees
IRA SHAPIRO
Secretary

Dated: April 30, 1998
<PAGE> 3

PROXY STATEMENT

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

MERRILL LYNCH FUNDS FOR INSTITUTIONS SERIES
ONE FINANCIAL CENTER
BOSTON, MA 02111
---------------------------

SPECIAL MEETING OF SHAREHOLDERS
JUNE 8, 1998

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Trustees (the "Board") of Merrill Lynch Funds
For Institutions Series (the "Trust"), to be voted at the Special Meeting of
Shareholders of the Trust (the 'Meeting'), to be held at the offices of Merrill
Lynch, One Financial Center, 2nd Floor, Boston, MA 02111, on June 8, 1998 at
8:00 a.m. The approximate mailing date of this Proxy Statement is May 4, 1998.

All properly executed proxies received prior to the Meeting will be voted
at the Meeting in accordance with the instructions marked thereon or otherwise
as provided therein. The special meeting of shareholders is being called to
elect a Board of Trustees; to consider and act upon a proposal to ratify the
selection of Deloitte & Touche LLP to serve as independent auditors of the Trust
for the Trust's current fiscal year; and to consider and act upon a proposal to
amend the investment restrictions of the Merrill Lynch Premier Institutional
Fund (the "Premier Fund"), the Merrill Lynch Institutional Fund (the
"Institutional Fund"), and the Merrill Lynch Government Fund (the "Government
Fund"). Unless instructions to the contrary are marked, proxies will be voted
'FOR' the election of the Board, 'FOR' the ratification of the selection of
independent auditors to serve for the Trust's current fiscal year, and 'FOR' the
proposal to amend the investment restrictions of the above-referenced Funds. Any
proxy may be revoked at any time prior to the exercise thereof by giving written
notice to the Secretary of the Fund.

The table below indicates the items on which the vote of the shareholders
of each of the Trust's Funds is being solicited:

<TABLE>
<CAPTION>
RATIFICATION OF
ELECTION SELECTION OF AMENDMENT TO
OF INDEPENDENT INVESTMENT RESTRICTIONS
DIRECTORS AUDITORS OF THE FUND
--------- --------------- -----------------------
<S> <C> <C> <C>
Premier Fund............................. X X X
Institutional Fund....................... X X X
Government Fund.......................... X X X
Treasury Fund............................ X X
Tax-Exempt Fund.......................... X X
</TABLE>

The Board has fixed the close of business on April 20, 1998 (the 'Record
Date') for the determination of shareholders entitled to notice of and to vote
at the Meetings and at any adjournment thereof. Shareholders on
<PAGE> 4

the Record Date will be entitled to one vote for each share held and fractional
votes for fractional shares held, with no shares having cumulative voting
rights. As of April 20, 1998, the Trust had outstanding 18,604,163,984.20 shares
of beneficial interest in the Trust, par value $.10 per share for the Merrill
Lynch Institutional Tax-Exempt Fund, and par value $.01 per share for the other
Funds, consisting of 6,471,084,576.96 shares of the Premier Fund,
7,480,969,318.07 shares of the Institutional Fund, 2,021,283,987.69 shares of
the Government Fund, 746,834,400.68 shares of the Merrill Lynch Treasury Fund,
and 1,883,991,701.01 shares of the Merrill Lynch Tax-Exempt Fund. To the
knowledge of the Trust, as of April 20, 1998, no entities owned beneficially
more than five percent of the outstanding shares of any Fund of the Trust at
such date other than: .

Trust Company of America, Attn Bank Recon, 7103 South Revere Parkway,
Englewood, Co. 80112-3936, owning 46,327,083.76 shares of beneficial interest of
Merrill Lynch Treasury Fund representing 6.2% of the Fund

Ely R. Callaway Jr. Co-TTees, Donald H. Dye Co-TTee, U/A DTD 07/23/86, Attn
Ely Callaway Personal, 2285 Ruthersford Road, Carlsbad, CA. 92008-8815, owning
40,695,985.90 shares of beneficial interest of Merrill Lynch Treasury Fund
representing 5.5% of the Fund.

Schwan's Financial Service LLC Attn Donald D. Miller, 115 W. College Dr.,
Marshall, Mn. 56258-1747, owning 40,475,280.63 shares of beneficial interest of
Merrill Lynch Treasury Fund representing 5.4% of the Fund.

Thomas D. Arthur, PO Box 1261, Tampa, FL 33601-1261, owning 107,209,084.79
shares of beneficial interest of Merrill Lynch Institutional Tax-Exempt Fund
representing 5.7% of the Fund.

Diva Systems Corporation, Attn William M. Scharninghausen, 333 Ravenswood
Ave, Menlo Park, CA 94025-3453 owning 115,151,550.49 shares of beneficial
interest of Merrill Lynch Government Fund representing 5.7% of the Fund.

PROPOSAL NO. 1 -- ELECTION OF TRUSTEES

It is proposed that each of the Trust's existing Trustees be reelected as a
Trustee and that Todd Goodwin also be elected as a Trustee. Todd Goodwin was a
Trustee of the Trust, and its predecessor Funds, from their organization in 1974
until his resignation in 1995. If elected at the Meeting, each Trustee and
nominee will be elected to serve for an indefinite term until his or her
successor is elected and qualified, until his death, or until he resigns or is
otherwise removed under the Trust's Declaration of Trust. It is the intention of
the persons named in the enclosed proxy to nominate and vote in favor of the
election of the persons listed below.

The Board knows of no reason why any of these nominees will be unable to
serve, but in the event of any such unavailability, the proxies received will be
voted for such substitute nominee or nominees as the Board may recommend.

2
<PAGE> 5

Certain information concerning the Trustees and nominee is set forth as
follows:

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
PRINCIPAL OCCUPATIONS OWNED AS OF
NAME AND ADDRESS POSITIONS AND TRUSTEE DURING PAST FIVE YEARS APRIL 30,
OF TRUSTEE AGE OFFICES HELD SINCE(4) AND PUBLIC DIRECTORSHIPS 1998(3)[(5)])
- ------------------------- --- -------------- -------- --------------------------------- --------------
<S> <C> <C> <C> <C> <C>
Robert W. Crook.......... 62 President and 1974 Senior Vice President of Merrill 95,513(5)
One Financial Center Trustee(1)(2) Lynch Asset Management, L.P.
Boston, MA 02111 ("MLAM") and of Merrill Lynch
Funds Distributor, Inc. ("MLFD")
since 1990; and Vice President of
MLAM and MLFD prior thereto.
A. Bruce Brackenridge.... 67 Trustee(2) 1992 Group Executive of J.P. Morgan & 0
9 Elm Lane Co., Inc. (banking) and Morgan
Bronxville, NY 10708 Guaranty Trust Company from 1979
to 1991; and an employee of J.P.
Morgan in various capacities from
1952 to 1991.
Charles C. Cabot, Jr..... 67 Trustee(2) 1974 Partner of the law firm Sullivan 0
One Post Office Square & Worcester and associated with
Boston, MA 02109 that firm since 1966.
James T. Flynn........... 58 Trustee(2) 1996 Chief Financial Officer of J.P. 0
340 East 72nd Street Morgan & Co., Inc. from 1990 to
New York, NY 10021 1995; and employee of J.P. Morgan
in various capacities from 1967
to 1995.
Terry K. Glenn........... 57 Trustee(1)(2) 1983 Executive Vice President of Fund 29,837(5)
P.O. Box 9011, Asset Management, L.P. ("FAM")
Princeton, NJ and MLAM since 1983; Executive
08543-9011 Vice President and Director of
Princeton Services, Inc. since
1993; President of MLFD since
1986; Director of MLFD since
1991; and President of Princeton
Administration since 1988.
George W. Holbrook, 66 Trustee(2) 1974 Managing Partner of Bradley 0
Jr..................... Resources Company (private
107 John Street investment company) and
Southport, CT 06490 associated with that firm and its
predecessors; Director of Canyon
Resources Corporation (mineral
exploration company), and
Thoratec Laboratories Corporation
(medical device manufacturer)
since 1953.
W. Carl Kester........... 46 Trustee(2) 1995 James R. Williston Professor of 0
Harvard Business School Business Administration of
Morgan Hall 393 Harvard University Graduate
Soldiers Field School of Business since 1997;
Boston, MA 02163 MBA Class of 1958 Professor of
Business Administration of
Harvard University Graduate
School of Business Administration
since 1981; Independent
Consultant since 1978.
</TABLE>

3
<PAGE> 6

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
PRINCIPAL OCCUPATIONS OWNED AS OF
NAME AND ADDRESS DURING PAST FIVE YEARS APRIL 30,
OF NOMINEE AGE AND PUBLIC DIRECTORSHIPS 1998(3)(4)
- ------------------------- --- --------------------------------- --------------
<S> <C> <C> <C> <C> <C>
Todd Goodwin............. 66 General Partner of Gibbons, 0
600 Madison Avenue Goodwin, van Amerongen
New York, NY 10022 (investment banking firm) since
1984; Director of Wells Aluminum
Co. (aluminum extrusions). The
Rival Company (electrical
appliance manufacturer), U.S.
Energy Systems (independent power
producer) and Johns Manville
Corporation (building materials).
</TABLE>

- ---------------
(1) Interested person, as defined in the Investment Company Act of 1940.
(2) The Trustees of the Trust are also trustees of Merrill Lynch Intermediate
Government Bond Fund.
(3) Share holdings represent less than one percent of the shares outstanding of
the Funds indicated.
(4) Including predecessor Funds that became part of the Trust in 1990.

(5) At April 30, 1998, Mr. Crook owned 50,311 shares of Merrill Lynch
Institutional Tax-Exempt Fund and 45,202 shares of Merrill Lynch
Institutional Fund. At April 30, 1998, Mr. Glenn owned 29,837 shares of
Merrill Lynch Institutional Tax-Exempt Fund

Committees and Board Meetings. The Board has an Audit and Nominating
Committee (the "Committee"), which consists of the Trustees who are not
"interested persons" of the Trust within the meaning of the Investment Company
Act of 1940. The principal purpose of the Committee is to review the scope of
the annual audit conducted by the Trust's independent auditors and the
evaluation by such auditors of the accounting procedures followed by the Trust.
The Committee held four meetings during the Trust's last fiscal year. The
Committee will also select and nominate the Trustees who are not "interested
persons" of the Trust within the meaning of the Investment Company Act of 1940.
The Committee generally will not consider nominees recommended by shareholders
of the Trust. The non-interested Trustees have retained independent legal
counsel to assist them in connection with these duties.

The total number of meetings of the Board of Trustees (including regularly
scheduled and special meetings) which were held during the Trust's last fiscal
year were five. Each of the current Trustees, other than Terry K. Glenn,
attended at least 75% of the aggregate of (i) the total number of meetings of
the Board held during the last fiscal year and (ii) if a member, the total
number of meetings of the Committee held during the last fiscal year while he
was a Trustee.

Interested Persons. The Trust considers Messrs. Crook and Glenn to be
"interested persons" of the Trust within the meaning of Section 2(a)(19) of the
Investment Company Act of 1940 as a result of the positions they hold with MLAM
and its affiliates.

4
<PAGE> 7

Compensation of Trustees. The Investment Adviser pays all compensation of
all officers of the Trust and all Trustees who are affiliated with ML & Co. or
its subsidiaries. The Trust pays each Trustee not affiliated with the Investment
Adviser an annual fee of $30,000 and pays each Trustee's out-of-pocket expenses
incurred in attending meetings of the Trust's Board of Trustees or any committee
thereof. These fees and expenses aggregated $123,323 for the fiscal year ended
April 30, 1997.

The following table sets forth, for the fiscal year ended April 30, 1997,
compensation paid by the Trust to the non-affiliated Trustees and, for the
calendar year ended December 31 1997, the aggregate compensation paid by all
investment companies advised by MLAM and its affiliate, Fund Asset Management,
L.P. ("FAM"); ("MLAM-advised Funds"), to the non-affiliated Trustees.

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
PENSION OR FROM TRUST AND
RETIREMENT BENEFITS MLAM-ADVISED
COMPENSATION ACCRUED AS PART FUNDS PAID TO
NAME OF TRUSTEE FROM THE TRUST OF TRUST EXPENSE TRUSTEES(1)
- -------------------------------------------------- -------------- ------------------- --------------
<S> <C> <C> <C>
A. Bruce Brackenridge(1).......................... $25,500 None $36,000
Charles C. Cabot, Jr.(1).......................... $25,500 None $36,000
James T. Flynn(1)................................. $19,500 None $36,000
George W. Holbrook, Jr.(1)........................ $25,500 None $36,000
W. Carl Kester(1)................................. $25,500 None $36,000
</TABLE>

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

(1) Including the Trust, the Trustees serve on MLAM-Advised Funds as follows:
Mr. Brackenridge (2) registered investment companies consisting of (6)
portfolios; Mr. Cabot (2) registered investment companies consisting of (6)
portfolios; Mr. Flynn (2) registered investment companies consisting of (6)
portfolios; Mr. Holbrook (2) registered investment companies consisting of
(6) portfolios; Mr. Kester (2) registered investment companies consisting of
(6) portfolios.

Officers of the Trust. The Board of Trustees has elected 25 officers of
the Trust, each of whom is elected annually. The following sets forth
information concerning each of these officers (unless otherwise noted, the
address for each officer is One Financial Center, Boston, Massachusetts 02111):

5
<PAGE> 8

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
POSITIONS AND DURING PAST FIVE YEARS
NAME OF OFFICER AGE OFFICES HELD(2) AND PUBLIC DIRECTORSHIPS
- ------------------------------------- --- ----------------- -----------------------------------------------
<S> <C> <C> <C>
James J. Fatseas..................... 42 Senior Vice Vice President of MLAM since 1993; Vice
President President of MLFD since 1990; Assistant Vice
President of MLFD prior thereto.
Vincent R. Giordano(1)............... 53 Senior Vice Senior Vice President of FAM and MLAM since
President 1984; Vice President since 1980; Portfolio
Manager of FAM since 1977.
Mark E. Maguire...................... 38 Senior Vice Assistant Vice President of MLFD since 1990.
President
Kevin McKenna(1)..................... 41 Senior Vice First Vice President of MLAM since 1997 and
President associated therewith since 1982.
Joseph T. Monagle, Jr.(1)............ 49 Senior Vice Senior Vice President and Department Head of
President the Global Fixed Income Division of the
Investment Adviser and associated therewith
since 1977; Senior Vice President of Princeton
Services since 1993.
Barry F.X. Smith..................... 32 Senior Vice Employee of MLFD since 1987.
President
William Wasel........................ 39 Senior Vice Vice President of MLAM since 1993; Vice
President President of MLFD since 1990; Assistant Vice
President of MLFD prior thereto.
P. Michael Walsh(1).................. 30 Vice President Vice President of MLAM since 1993 and
associated therewith since 1991.
Karen D. Young....................... 33 Vice President Employee of MLFD since 1982.
Donald C. Burke(1)................... 37 Vice President Vice President and Director of Taxation of MLAM
since 1990.
Diana Frankland...................... 62 Vice President Employee of MLFD since 1979.
Peter Hayes(1)....................... 38 Vice President Vice President of MLAM since 1988; Portfolio
Manager of FAM since 1987; Vice President of
Shawmut Bank, N.A. from 1984 to 1987.
Kevin Schiatta(1).................... 43 Vice President Vice President of MLAM since 1985.
Gerald M. Richard(1)................. 48 Vice President Senior Vice President and Treasurer of MLAM and
FAM since 1984; Vice President of MLFD since
1981; Treasurer of MLFD since 1989; Senior Vice
President and Treasurer of Princeton
Administrators, Inc. since 1988.
John Ng(1)........................... 43 Vice President Vice President of MLAM since 1984; Assistant
Vice President of MLAM from 1981 to 1984.
Dianne McDonough..................... 36 Vice President Employee of MLFD since 1983.
Eric P. Lareau....................... 28 Vice President Employee of MLFD since 1992.
Peter Thompson....................... 31 Vice President Employee of MLFD since 1996; Employee of
Colonial Investment Services from 1993 to 1996.
Patricia A. Schena................... 40 Vice President Assistant Vice President of MLFD since 1990 and
and Assistant an employee of MLFD since 1980.
Secretary
Ira P. Shapiro(1).................... 35 Secretary Director (Legal Advisory) of MLAM since 1997;
Attorney associated with the FAM and MLAM since
1993; an attorney in private practice prior to
1993.
</TABLE>

- ------------------------
(1) P.O. Box 9011, Princeton, NJ 08543-9011

(2) Certain officers of the Funds are officers of certain other investment
companies for which FAM or MLAM acts as investment adviser.

6
<PAGE> 9

Share Ownership. At April 20, 1998, the Trustees and Officers of the Trust
as a group 30 persons owned an aggregate of less than 1/4 of 1% of the shares of
common stock of ML & Co. and owned an aggregate of less than 1% of the
outstanding shares of each Fund of the Trust.

THE BOARD OF TRUSTEES OF THE TRUST, UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" THIS PROPOSAL.

PROPOSAL NO. 2 -- SELECTION OF INDEPENDENT AUDITORS

The Board, including a majority of the Trustees who are not interested
persons of the Trust, has selected independent auditors to examine the financial
statements of the Trust for the current fiscal year ending April 30, 1998. The
Trust knows of no direct or indirect financial interest of such auditors in the
Trust. Such appointment is subject to ratification or rejection by the
shareholders of the Trust. Unless a contrary specification is made, the
accompanying proxy will be voted in favor of ratifying the selection of such
auditors.

Deloitte & Touche LLP ("D&T") acts as independent auditors for ML & Co. and
all of its subsidiaries and for most other investment companies for which MLAM
or FAM acts as investment adviser. The fees received by D&T from these other
entities are substantially greater, in the aggregate, than the total fees
received by it from the Trust. The Board considered the fact that D&T has been
retained as the independent auditors for ML & Co. and the other entities
described above in its evaluation of the independence of D&T with respect to the
Trust.

Representatives of the Trust's independent auditors are expected to be
present at the Meeting and will have the opportunity to make a statement if they
so desire and to respond to questions from shareholders.

THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THE TRUSTEES WHO ARE NOT
INTERESTED PERSONS (AS SUCH TERM IS DEFINED UNDER THE INVESTMENT COMPANY ACT),
UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.

PROPOSAL NO. 3 -- AMENDMENT TO THE INVESTMENT RESTRICTIONS
OF THE MERRILL LYNCH PREMIER INSTITUTIONAL FUND,
MERRILL LYNCH INSTITUTIONAL FUND AND MERRILL LYNCH GOVERNMENT FUND

The Trust has adopted investment restrictions for each of its Funds that
govern generally the operations of the Fund. Investment restrictions of a Fund
that are deemed fundamental may not be changed without a vote of the outstanding
shares of the Fund, while non-fundamental investment restrictions may be changed
by the Trust's Board if it deems it in the best interest of the Trust and its
shareholders to do so. In addition to investment restrictions, each Fund
operates pursuant to investment objectives and policies, described in the
Trust's Prospectus and Statement of Additional Information, each dated July 29,
1997, that govern the investment activities of the Fund and further limit its
ability to invest in certain types of securities or engage in certain types of
transactions. These investment objectives and policies will be unaffected by the
adoption of the proposed investment restrictions. The investment policies of a
Fund are non-fundamental and may not be changed unless and until (i) the Board
of Trustees of the Trust explicitly authorizes, by resolution, a change in the
investment policy of the Trust and (ii) the Prospectus of the Trust is amended
to reflect the change in policy and, if appropriate, to include additional
disclosure. Shareholders should note that certain of the proposed fundamental
investment restrictions are stated in terms of "to the extent permitted by
applicable
7
<PAGE> 10

law." Applicable law can change over time and may become more or less
restrictive as a result. The restrictions have been drafted in this manner so
that a change in law would not require the Trust to seek a shareholder vote to
amend the restriction to conform to applicable law, as revised.

A. AMENDMENT TO THE INVESTMENT RESTRICTIONS OF THE PREMIER FUND

It is proposed that fundamental investment restriction (1) of the Premier
Fund be amended. Under the proposed amended fundamental investment restriction,
the Premier Institutional Fund may not:

1. INVEST MORE THAN 25% OF ITS ASSETS, TAKEN AT MARKET VALUE, IN THE
SECURITIES OF ISSUERS IN ANY PARTICULAR INDUSTRY (EXCLUDING SECURITIES
ISSUED BY THE U.S. GOVERNMENT AND ITS AGENCIES AND INSTRUMENTALITIES;
SECURITIES ISSUED BY ANY STATE OF THE U.S. OR ANY POLITICAL SUBDIVISION
THEREOF; INSTRUMENTS ISSUED BY DOMESTIC BANKS; AND FOR PURPOSES OF THIS
RESTRICTION, ISSUERS OF ASSET-BACKED AND MORTGAGE-BACKED SECURITIES WILL
NOT BE CONSIDERED TO BE IN ANY PARTICULAR INDUSTRY).

Commentary: The proposed amendment would add the underscored language.
The restriction addresses concentration in a particular industry.
Under the amended restriction, instruments issued by domestic banks
would not be subject to this restriction and issuers of asset-backed
and mortgage-backed securities would not be considered to be part of
any particular industry for purposes of this restriction.

If approved by the shareholders of the Premier Fund the above-listed
restriction will replace fundamental investment restriction (1) as set forth in
the Premier Fund's current Statement of Additional Information dated July 29,
1997. Unless the Board of Trustees determines otherwise, it is anticipated that
this proposal, if approved by the shareholders of the Premier Fund, will be
implemented on June 9, 1998.

THE BOARD OF TRUSTEES OF THE TRUST, UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE PREMIER FUND VOTE "FOR" THIS PROPOSAL.

B. AMENDMENT TO THE INVESTMENT RESTRICTIONS OF THE INSTITUTIONAL FUND

It is proposed that the investment restrictions of the Institutional Fund
be modified so that they will conform to those of the Premier Fund. The proposed
uniform restrictions are designed to provide the Institutional Fund with as much
investment flexibility as possible under the Investment Company Act of 1940 and
applicable state securities regulations, and to help promote operational
efficiencies and facilitate monitoring of compliance.

The proposed restrictions restate many of the fundamental restrictions
currently in effect for the Institutional Fund. In some instances, certain
fundamental restrictions have been modified or eliminated in accordance with
developments in Federal regulations or in the securities markets since the
inception of the Trust. In other instances, certain restrictions previously
deemed fundamental have been redesignated non-fundamental. Fundamental
investment restrictions may not be changed without a vote of the shareholders of
the Fund, and the costs of shareholder meetings for these purposes generally are
borne by the Trust and its shareholders. By making certain restrictions
non-fundamental, the Board may amend a restriction as it deems appropriate and
in the best interest of the Fund and its shareholders, without incurring the
costs of seeking a shareholder vote.

8
<PAGE> 11

The Institutional Fund's current investment restrictions are set forth in
Appendix A. Set forth below is each proposed restriction for the Institutional
Fund, followed by a commentary describing the proposed restriction and detailing
the significance, if any, of the proposed changes for the Institutional Fund.

Proposed Fundamental Investment Restrictions. The fundamental investment
restrictions discussed below are proposed for the Institutional Fund. Under the
proposed fundamental investment restrictions, the Institutional Fund may not:

1. INVEST MORE THAN 25% OF ITS ASSETS, TAKEN AT MARKET VALUE, IN THE
SECURITIES OF ISSUERS IN ANY PARTICULAR INDUSTRY (EXCLUDING SECURITIES ISSUED BY
THE U.S. GOVERNMENT AND ITS AGENCIES AND INSTRUMENTALITIES; SECURITIES ISSUED BY
ANY STATE OF THE U.S. OR ANY POLITICAL SUBDIVISION THEREOF; INSTRUMENTS ISSUED
BY DOMESTIC BANKS; AND FOR PURPOSES OF THIS RESTRICTION, ISSUERS OF ASSET-BACKED
AND MORTGAGE-BACKED SECURITIES WILL NOT BE CONSIDERED TO BE IN ANY PARTICULAR
INDUSTRY).

Commentary: The proposed restriction addresses concentration in a
particular industry. The restriction does not apply to the U.S.
Government, its agencies and instrumentalities, states, municipalities
and their political subdivisions and instruments issued by domestic
banks, and issuers of asset-backed and mortgage-backed securities are
not considered to be part of any particular industry for purposes of
this restriction.

2. MAKE INVESTMENTS FOR THE PURPOSE OF EXERCISING CONTROL OR MANAGEMENT.

Commentary: The Institutional Fund is not currently subject to a
restriction similar to the proposed restriction; however, the proposed
restriction is not expected to have any material effect on the
Institutional Fund.

3. UNDERWRITE SECURITIES OF OTHER ISSUERS EXCEPT INSOFAR AS THE
INSTITUTIONAL FUND TECHNICALLY MAY BE DEEMED AN UNDERWRITER UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, IN SELLING PORTFOLIO SECURITIES.

4. PURCHASE OR SELL REAL ESTATE, EXCEPT THAT TO THE EXTENT PERMITTED BY
APPLICABLE LAW. THE INSTITUTIONAL FUND MAY INVEST IN SECURITIES DIRECTLY OR
INDIRECTLY SECURED BY REAL ESTATE OR INTERESTS THEREIN OR ISSUED BY COMPANIES
WHICH INVEST IN REAL ESTATE OR INTERESTS THEREIN.

Commentary: The proposed restriction is substantially similar to the
applicable restriction in effect for the Institutional Fund. The
Institutional Fund's current investment restrictions prohibit
investments in real estate and real estate investment trusts. The
proposed restriction would increase the Institutional Fund's
flexibility by allowing it to invest in real estate investment trusts
and making it clear that the Institutional Fund may invest in
securities directly or indirectly secured by real estate or interests
therein or issued by companies which invest in real estate or interests
therein.

5. BORROW MONEY, EXCEPT THAT (I) THE INSTITUTIONAL FUND MAY BORROW FROM
BANKS (AS DEFINED IN THE INVESTMENT COMPANY ACT) IN AMOUNTS UP TO 33 1/3% OF ITS
TOTAL ASSETS (INCLUDING THE AMOUNT BORROWED) LESS ALL LIABILITIES AND
INDEBTEDNESS NOT REPRESENTED BY THE BORROWING, (II) THE INSTITUTIONAL FUND MAY
BORROW UP TO AN ADDITIONAL 5% OF ITS TOTAL ASSETS FOR TEMPORARY PURPOSES, (III)
THE INSTITUTIONAL FUND MAY OBTAIN SUCH SHORT-TERM CREDIT AS MAY BE NECESSARY FOR
THE CLEARANCE OF PURCHASES AND SALES OF PORTFOLIO SECURITIES AND

9
<PAGE> 12

(IV) THE INSTITUTIONAL FUND MAY PURCHASE SECURITIES ON MARGIN TO THE EXTENT
PERMITTED BY APPLICABLE LAW. THESE BORROWER PROVISIONS SHALL NOT APPLY TO
REVERSE REPURCHASE AGREEMENTS AS DESCRIBED IN THE PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION. THE INSTITUTIONAL FUND MAY NOT PLEDGE ITS ASSETS OTHER
THAN TO SECURE SUCH BORROWINGS OR, TO THE EXTENT PERMITTED BY THE INSTITUTIONAL
FUND'S INVESTMENT POLICIES AS SET FORTH IN ITS PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION, AS THEY MAY BE AMENDED FROM TIME TO TIME, IN CONNECTION
WITH HEDGING TRANSACTIONS, SHORT SALES, WHEN-ISSUED AND FORWARD COMMITMENT
TRANSACTIONS AND SIMILAR INVESTMENT STRATEGIES.

Commentary: The Institutional Fund's investment policies, as stated in
its Statement of Additional Information, include a limitation on
borrowing, and on the pledging of assets to secure borrowings, that
limits such borrowing to 10% of total assets and is more restrictive
than the restrictions in proposed restriction (5). As indicated in
proposed non-fundamental investment policy (c) below, the Institutional
Fund will be limited to borrowing amounts up to 5% of its total assets.
Borrowings constitute leverage, which involves risk. Leveraging will
magnify declines as well as increases in the value of the Institutional
Fund's assets and in the yield on the Fund's portfolio.

With regard to purchases on margin, under current applicable law, the
Institutional Fund may not establish or use a margin account with a
broker for the purpose of effecting securities transactions on margin,
except that the Institutional Fund may obtain such short term credit as
necessary for the clearance of transactions. However, the Institutional
Fund may pay initial or variation margin in connection with futures and
related options transactions, as set forth in investment restriction
(8) below, without regard to this prohibition.

6. MAKE LOANS TO OTHER PERSONS, EXCEPT THAT THE ACQUISITION OF BONDS,
DEBENTURES OR OTHER CORPORATE DEBT SECURITIES AND INVESTMENT IN GOVERNMENT
OBLIGATIONS, COMMERCIAL PAPER, PASS-THROUGH INSTRUMENTS, CERTIFICATES OF
DEPOSIT, BANKERS ACCEPTANCES, REPURCHASE AGREEMENTS OR ANY SIMILAR INSTRUMENTS
SHALL NOT BE DEEMED TO BE THE MAKING OF A LOAN, AND EXCEPT FURTHER THAT THE
INSTITUTIONAL FUND MAY LEND ITS PORTFOLIO SECURITIES, PROVIDED THAT THE LENDING
OF PORTFOLIO SECURITIES MAY BE MADE ONLY IN ACCORDANCE WITH APPLICABLE LAW AND
THE GUIDELINES SET FORTH IN THE INSTITUTIONAL FUND'S PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION, AS THEY MAY BE AMENDED FROM TIME TO TIME.

Commentary: The proposed restriction, with respect to the making of
loans, is in substance similar to the applicable restrictions in effect
for the Institutional Fund. The Institutional Fund addresses loans to
other persons and securities lending in two separate restrictions. The
Institutional Fund may, as a non-fundamental investment policy,
restrict investment in the instruments specifically permitted in the
exception beyond the limitations set forth in the proposed restriction.

The Institutional Fund is permitted to engage in securities lending,
but has restrictions in this regard. [In particular, the Institutional
Fund has a fundamental investment restriction limiting securities
lending to less than 33 1/3% of total assets.] In addition to
investment restrictions, the Institutional Fund has imposed limitations
on securities lending as an investment policy.

Applicable law generally permits the lending of a fund's portfolio
securities in an amount up to 33 1/3% of the fund's total assets less
all liabilities and indebtedness not represented by the lending,
provided that such loans are made in accordance with prescribed
guidelines which are set forth in the fund's Statement of Additional
Information. The Institutional Fund will continue to be subject to the
lending limitations set forth as an investment policy in the Prospectus
and Statement of

10
<PAGE> 13

Additional Information following approval of the proposed uniform
investment restrictions, unless and until the Board determines that an
amendment to such investment policy is in the best interest of the
Institutional Fund and its shareholders and the Prospectus of the
Institutional Fund is amended.

7. ISSUE SENIOR SECURITIES TO THE EXTENT SUCH ISSUANCE WOULD VIOLATE
APPLICABLE LAW.

Commentary: The Institutional Fund currently is not limited by an
investment restriction in the extent to which it may issue senior
securities, but it is so limited under applicable law. The proposed
restriction, therefore, imposes a limitation on the issuance of senior
securities based upon applicable law.

Applicable law currently prohibits the issuance of senior securities,
defined as any bond, debenture, note or similar obligation or
instrument evidencing indebtedness, and any stock of any class having
priority as to any other class as to distribution of assets or payment
of dividends, but not including (i) bank borrowings provided that
immediately thereafter the Institutional Fund has 300% asset coverage
for all borrowings, or (ii) any note or other evidence of indebtedness
representing a loan made to the Institutional Fund for temporary
purposes (i.e., to be repaid in 60 days without extension or renewal)
in an amount not exceeding 5% of the Institutional Fund's total assets
when the loan is made.

Certain other investment techniques, which involve leverage or
establish a prior claim to the Institutional Fund's assets, may be
considered senior securities, absent appropriate segregation of assets
or exemptive relief. These techniques include standby commitment
agreements, contracts for the purchase of securities on a delayed
delivery basis (i.e., firm commitment agreements), reverse repurchase
agreements, engaging in financial futures and options thereon, forward
foreign currency contracts, put and call options, the purchase of
securities on a when-issued basis and short sales. The manner and
extent to which the Institutional Fund can engage in any of these
practices, which may constitute the issuance of senior securities, is
governed by applicable law. Accordingly, adoption of this fundamental
investment restriction will not change the Institutional Fund's
existing practices with respect to senior securities.

Investments in swaps, to the extent permitted, are not treated as
senior securities so long as the Institutional Fund segregates
high-grade liquid debt securities with the Institutional Fund's
custodian in an amount equal to any net payments required to be made on
the swaps.

8. PURCHASE OR SELL COMMODITIES OR CONTRACTS ON COMMODITIES, EXCEPT TO THE
EXTENT THE INSTITUTIONAL FUND MAY DO SO IN ACCORDANCE WITH APPLICABLE LAW AND
THE INSTITUTIONAL FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION, AS
THEY MAY BE AMENDED FROM TIME TO TIME, AND WITHOUT REGISTERING AS A COMMODITY
POOL OPERATOR UNDER THE COMMODITY EXCHANGE ACT.

Commentary: The Institutional Fund prohibits investment in commodities.
Under the Investment Company Act, a fund must state its policy relating
to the purchase and sale of commodities. The Institutional Fund
currently does not anticipate investment in tangible commodities and
would be greatly restricted from making such direct investments by the
current provisions of the Federal tax laws and securities regulations.
In addition, although the Institutional Fund may be permitted under
Federal tax laws and securities regulations to invest in futures linked
to financial instruments,

11
<PAGE> 14

the Fund currently does not anticipate making such investments.
Adoption of the proposed uniform restrictions will enable the
Institutional Fund to invest in commodities only in accordance with
applicable law and with the Institutional Fund's investment policies as
stated in its Prospectus and Statement of Additional Information.
- ---------------

If approved by the shareholders of the Institutional Fund the above-listed
restrictions will replace the fundamental investment restrictions for the
Institutional Fund and, accordingly, will become the only fundamental investment
restrictions under which the Institutional Fund will operate. If approved, the
above restrictions may not be changed without the approval of the holders of a
majority of the Institutional Fund's outstanding shares (which for this purpose
and under the Investment Company Act means the lesser of (i) 67% of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented or (ii) more than 50% of the outstanding shares). Persons who are
shareholders of the Institutional Fund on the Record Date will be eligible to
vote on amending the investment restrictions, as described herein. Unless the
Board of Trustees determines otherwise, it is anticipated that this proposal, if
approved by the shareholders of the Institutional Fund, will be implemented on
June 9, 1998.

Proposed Non-Fundamental Investment Restrictions. The Board of Trustees
has adopted the following non-fundamental investment restrictions for the
Institutional Fund, subject to approval of the fundamental investment
restrictions described above for the Institutional Fund. Certain of the proposed
non-fundamental restrictions are in substance similar or identical to current
fundamental investment restrictions. Redesignating a restriction as
non-fundamental allows the Board the flexibility to modify the restriction in
response to changes in the securities markets or applicable law if the Board
deems it in the best interest of the Fund and its shareholders to do so.
Although future modification of a non-fundamental investment restriction would
not require a shareholder vote, modification of these restrictions would require
both (i) authorization by resolution by the Board and (ii) amendment of the
Fund's Prospectus.

Under the proposed non-fundamental investment restrictions, the
Institutional Fund may not:

a. PURCHASE SECURITIES OF OTHER INVESTMENT COMPANIES, EXCEPT TO THE EXTENT
SUCH PURCHASES ARE PERMITTED BY APPLICABLE LAW.

Commentary: The Institutional Fund currently has a restriction which
prohibits the Fund from acquiring securities of other investment
companies as a fundamental, rather than a non-fundamental, restriction.
Applicable law currently allows the Institutional Fund to purchase the
securities of other investment companies if immediately thereafter not
more than (i) 3% of the total outstanding voting stock of such company
is owned by the Institutional Fund, (ii) 5% of the Institutional Fund's
total assets, taken at market value, would be invested in any one such
company, (iii) 10% of the Institutional Fund's total assets, taken at
market value, would be invested in such securities, and (iv) the
Institutional Fund, together with other investment companies having the
same investment adviser and companies controlled by such companies,
owns not more than 10% of the total outstanding stock of any one
closed-end investment company.

b. INVEST IN SECURITIES WHICH CANNOT BE READILY RESOLD BECAUSE OF LEGAL OR
CONTRACTUAL RESTRICTIONS OR WHICH CANNOT OTHERWISE BE MARKETED, REDEEMED OR PUT
TO THE ISSUER OR A THIRD PARTY, IF AT THE TIME OF ACQUISITION MORE THAN 10% OF
ITS TOTAL ASSETS WOULD BE INVESTED IN SUCH SECURITIES. THIS RESTRICTION SHALL
NOT

12
<PAGE> 15

APPLY TO SECURITIES WHICH MATURE WITHIN SEVEN DAYS OR SECURITIES WHICH THE BOARD
OF TRUSTEES HAS OTHERWISE DETERMINED TO BE LIQUID PURSUANT TO APPLICABLE LAW.

Commentary: Under the Investment Company Act, open-end investment
companies are required to determine net asset value and offer
redemption on a daily basis with payment to follow within seven days.
In order to ensure that adequate cash is available at all times to
cover redemptions, a money market fund is required to limit its
investments in securities deemed illiquid to 10% of the fund's net
assets.

Under current applicable law, an illiquid asset is any asset which may
not be sold or disposed of in the ordinary course of business within
seven days at approximately the value at which a fund has valued the
investment. The types of securities that will be considered liquid will
vary over time based on changing market conditions and regulatory
interpretations.

Under current Commission interpretations, a fund may purchase, without
regard to the foregoing limitation, securities which are not registered
under the Securities Act of 1933, as amended (the "Securities Act"),
provided that they are determined to be liquid pursuant to guidelines
and procedures established by the Board. Included among such securities
are foreign securities traded in a foreign securities market and
securities which can be offered and sold to "qualified institutional
buyers," as defined in Rule 144A under the Securities Act ("Rule 144A
Securities"). The Board of Trustees has determined that Rule 144A
Securities in which the Institutional Fund may invest may be deemed
liquid provided that one or more significant dealers in such securities
will provide bids on such securities at which such dealers are prepared
to purchase or sell such securities at current market levels.

The Institutional Fund currently has a fundamental investment
restriction which prohibits investment in any securities with legal or
contractual restrictions on resale. The proposed non-fundamental
restriction would allow the Institutional Fund to invest up to 10% of
its total assets in such securities, and would give the Fund the
flexibility to invest in securities with legal or contractual
restrictions on resale, if the Board determines that these securities
are nevertheless liquid.

Current applicable law does not require a fund to state its limitation
on investment in illiquid securities as a fundamental policy; however,
the Institutional Fund currently states its limitation on certain
illiquid securities as a fundamental, rather than a non-fundamental,
restriction.

c. NOTWITHSTANDING FUNDAMENTAL RESTRICTION (5) BORROW AMOUNTS IN EXCESS OF
5% OF ITS TOTAL ASSETS, TAKEN AT ACQUISITION COST OR MARKET VALUE, WHICHEVER IS
LOWER, AND THEN ONLY FROM BANKS AS A TEMPORARY MEASURE FOR EXTRAORDINARY OR
EMERGENCY PURPOSES. THESE BORROWING PROVISIONS SHALL NOT APPLY TO REVERSE
REPURCHASE AGREEMENTS AS DESCRIBED IN THE PROSPECTUS AND STATEMENT OF ADDITIONAL
INFORMATION. AS A MATTER OF OPERATING POLICY, THE INSTITUTIONAL FUND WILL NOT
PURCHASE SECURITIES WHEN OUTSTANDING BORROWINGS EXCEED 5% OF THE INSTITUTIONAL
FUND'S ASSET VALUE.

Commentary: This non-fundamental restriction on borrowing is
substantially the same as the fundamental restriction on borrowing
currently applicable to the Institutional Fund. Current applicable law
does not require a fund to state its limitation on borrowing as a
fundamental policy;

13
<PAGE> 16

however, the Institutional Fund currently states its limitation on
borrowing as a fundamental, rather than a non-fundamental, restriction.

Lending of Portfolio Securities. Subject to investment restriction (6)
above, the Institutional Fund may from time to time lend securities from its
portfolio to brokers, dealers and financial institutions and receive collateral
in cash or securities issued or guaranteed by the U.S. Government which will be
maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities. Such cash collateral will be invested in
short-term securities, the income from which will increase the return to the
Institutional Fund. Such loans will be terminable at any time. The Institutional
Fund will have the right to regain record ownership of loaned securities to
exercise beneficial rights. The Institutional Fund may pay reasonable fees in
connection with the arranging of such loans.

As a matter of operating policy, the Trustees of the Trust have determined
that the Institutional Fund will not write put or call options.

For purposes of the 25% limitation on investment in securities of issuers
in a particular industry, neither all utility companies (including telephone
companies) as a group nor all finance companies as a group will be considered a
single industry.

THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
OF THE INSTITUTIONAL FUND VOTE "FOR" THIS PROPOSAL.

C. AMENDMENT TO THE INVESTMENT RESTRICTIONS OF THE GOVERNMENT FUND

It is proposed that fundamental investment restrictions of the Government
Fund be amended to delete the restriction that provides that "the Fund may not
enter into repurchase agreements with any one counterparty if immediately
thereafter more than 5% of the value of its total assets would be invested in
repurchase agreements with such counterparty."

Commentary: The effect of the proposed amendment would be to provide
the Government Fund with greater flexibility by permitting it to invest
greater than 5% of the value of its total assets in repurchase
agreements with any one counterparty. The Fund will nevertheless remain
subject to guidelines established by the Trustees of the Trust for
entering into repurchase agreements that include a requirement that
repurchase agreements be fully collateralized and be entered into only
with dealers considered to be of high credit quality. In addition, as a
money market fund, the Government Fund is subject to the requirements
of Rule 2a-7 under the Investment Company Act of 1940, including the
requirement that any issuer of a security purchased by the Fund,
including a repurchase agreement, have a high rating or be determined
by the Trustees to be of similar credit quality if unrated.

THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
OF THE GOVERNMENT FUND VOTE "FOR" THIS PROPOSAL.

ADDITIONAL INFORMATION

The expenses of preparation, printing and mailing by the Trust of the proxy
materials in connection with the matters to be considered at the meeting will be
borne by the Trust. The Trust will reimburse banks,

14
<PAGE> 17

brokers and others for their reasonable expenses in forwarding proxy
solicitation material to the beneficial owners of the shares of the Trust. The
Trust also may hire proxy solicitors at the expense of the Trust.

The proposal to elect the Trust's Board of Trustees (Proposal 1) may be
approved by a plurality of the votes cast by the Trust's shareholders, voting in
person or by proxy, at a meeting at which a quorum is duly constituted.

The proposal to ratify the selection of the Trust's independent auditors
(Proposal 2) may be approved by the affirmative vote of a majority of the
Trust's shares represented at a meeting at which a quorum is duly constituted.

ONLY THE SHAREHOLDERS OF THE PREMIER FUND WILL VOTE ON THE PROPOSAL TO
AMEND THE FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE PREMIER FUND (PROPOSAL 3A).
That proposal requires the affirmative vote of the lesser of (i) 67% of the
shares of the Premier Fund represented at the Meeting at which more than 50% of
the outstanding shares of the Premier Fund are represented or (ii) more than 50%
of the outstanding shares of the Premier Fund.

ONLY THE SHAREHOLDERS OF THE INSTITUTIONAL FUND WILL VOTE ON THE PROPOSAL
TO AMEND THE FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE INSTITUTIONAL FUND
(PROPOSAL 3B). That proposal requires the affirmative vote of the lesser of (i)
67% of the shares of the Institutional Fund represented at the Meeting at which
more than 50% of the outstanding shares of the Institutional Fund are
represented or (ii) more than 50% of the outstanding shares of the Institutional
Fund.

ONLY THE SHAREHOLDERS OF THE GOVERNMENT FUND WILL VOTE ON THE PROPOSAL TO
AMEND THE FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE GOVERNMENT FUND (PROPOSAL
3C). That proposal requires the affirmative vote of the lesser of (i) 67% of the
shares of the Government Fund represented at the Meeting at which more than 50%
of the outstanding shares of the Government Fund are represented or (ii) more
than 50% of the outstanding shares of the Government Fund.

In order to obtain the necessary quorum at the Meeting, supplementary
solicitation may be made by mail, telephone, telegraph or personal interview by
officers of the Trust. It is anticipated that the cost of such supplementary
solicitation, if any, will be nominal. A quorum consists of 33 1/3% of the
shares entitled to vote at the Meeting, present in person or by proxy.

All shares represented by properly executed proxies, unless such proxies
have previously been revoked, will be voted at the Meeting in accordance with
the directions on the proxies; if no direction is indicated, the shares will be
voted "FOR" the Board nominees, "FOR" the ratification of the independent
auditors, and "FOR" the amendments to the fundamental investment restrictions of
the respective Funds.

Broker-dealer firms, including Merrill Lynch, holding Trust shares in
"street name" for the benefit of their customers and clients will request the
instructions of such customers and clients on how to vote their shares on each
Proposal before the Meeting. The Trust understands that, under the rules of the
New York Stock Exchange, such broker-dealer firms may, without instructions from
their customers and clients, grant authority to the proxies designated to vote
on the election of Trustees (Proposal 1), and the ratification of the selection
of independent auditors (Proposal 2) if no instructions have been received prior
to the date specified in the broker-dealer firm's request for voting
instructions. Broker-dealer firms, including Merrill Lynch, will not be
permitted to grant voting authority without instructions with respect to the
amendments to the fundamental investment restrictions (Proposal 3). The Fund
will include shares held of record by broker-
15
<PAGE> 18

dealers as to which such authority has been granted in its tabulation of the
total number of votes present for purposes of determining whether the necessary
quorum of shareholders exists. Proxies which are returned but which are marked
"abstain" or on which a broker-dealer has declined to vote on any proposal
('broker non-votes') will be counted as present for the purposes of a quorum.
Merrill Lynch has advised the Trust that it intends to exercise discretion over
shares held in its name for which no instructions have been received by voting
such shares on Proposals 1, 2 and 3 in the same proportion as it has voted
shares for which it has received instructions. However, abstentions and broker
non-votes will be included in the determination of the number of shares present
at the Meeting and will have the same effect as a vote against Proposals 2 and
3.

The Declaration of Trust establishing the Trust, dated May 7, 1987, a copy
of which, together with all amendments thereto (the "Declaration"), is on file
in the office of the Secretary of the Commonwealth of Massachusetts, provides
that the name "Merrill Lynch Funds For Institutions Series" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of the
Series may be held to any personal liability, nor may resort be had to their
private property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of said Series but the Trust Property only shall be
liable.

ADDRESS OF INVESTMENT ADVISER

The principal office of MLAM is located at P.O. Box 9011, Princeton, New
Jersey 08543-9011.

ANNUAL REPORT DELIVERY

The Fund will furnish, without charge, a copy of its annual report for the
fiscal year ended April 30, 1997 and its semi-annual report for the six months
ended October 31, 1997 to any shareholder upon request. Such requests should be
directed in writing to State Street Bank and Trust Company, P.O. Box 8500,
Boston, Massachusetts 02266-8500.

MEETINGS OF SHAREHOLDERS

The Fund's Declaration of Trust does not require that the Trust hold an
annual meeting of shareholders. The Fund will be required, however, to call
special meetings of shareholders in accordance with the requirements of the
Investment Company Act of 1940 to seek approval of new management and advisory
arrangements or of a change in the fundamental policies, objectives or
restrictions of the Trust. The Trust also would be required to hold a special
shareholders' meeting to elect new Trustees at such time as less than a majority
of the Trustees holding office have been elected by shareholders. The
Declaration of Trust of the Trust provides for the calling of shareholders'
meetings at the request of 10% of the outstanding shares or by a majority of the
Trustees.

By Order of the Board
IRA SHAPIRO
Secretary

Dated: April 30, 1998

16
<PAGE> 19

APPENDIX A

CURRENT INVESTMENT RESTRICTIONS FOR THE MERRILL LYNCH INSTITUTIONAL FUND

The Institutional Fund may not:

(1) Invest more than 25% of its total assets in the securities of issuers in
any particular industry (other than U.S. Government securities, Government
agency securities or domestic bank money instruments);

(2) Purchase the securities of any one issuer, other than the U.S. Government,
if immediately after such purchase more than 5% of the value of its total
assets would be invested in such issuer, except that up to 25% of the value
of the Institutional Fund's total assets may be invested without regard to
this limitation;

(3) Enter into repurchase agreements with more than seven days to maturity if
it would result in the investment of more than 10% of the value of the
Institutional Fund's assets in such repurchase agreements;

(4) Purchase common stocks or other voting securities, preferred stocks,
warrants, other equity securities, securities with legal or contractual
restrictions on resale, state bonds or municipal bonds (for purposes of
this restriction, instruments, such as variable amount master notes or
funding agreements, which permit the Fund to resell the instrument to the
issuer (or another creditworthy party) or to require repayment of the
instrument by the issuer upon notice will not be considered to have legal
or contractual restrictions on resale);

(5) Make loans, except through the purchase of debt obligations in accordance
with the Institutional Fund's investment objective and policies;

(6) Borrow money, except from banks for extraordinary or emergency purposes and
then only in amounts of up to 10% of the value of the Institutional Fund's
net assets, taken at cost, at the time the borrowing is made. This
borrowing provision is included solely to facilitate the orderly sale of
portfolio securities to accommodate abnormally heavy redemption requests if
they should occur and is not for investment purposes. (As a matter of
operating policy, the Institutional Fund will not purchase securities when
outstanding borrowings exceed 5% of the Institutional Fund's asset value);

(7) Mortgage, pledge or hypothecate any assets except in an amount of up to 15%
of the value of the Institutional Fund's net assets, taken at cost, but
only to secure borrowings for extraordinary or emergency purposes;

(8) Purchase or sell real estate, real estate investment trust securities,
commodities, commodity contracts or oil and gas interests;

(9) Acquire securities of other investment companies;

(10) Act as an underwriter of securities;

(11) Purchase securities on margin, make short sales of securities or maintain a
short position;

As a matter of operating policy, the Trustees of the Trust have determined
that the Institutional Fund will not write put or call options.

For purposes of the 25% limitation on investment or securities of issuers
in a particular industry, neither all utility companies (including telephone
companies) as a group nor all finance companies as a group will be considered a
single industry.
<PAGE> 20
PROXY

MERRILL LYNCH PREMIER INSTITUTIONAL FUND

Merrill Lynch Funds For Institutions Series
One Financial Center
Boston, MA 02111

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.

The undersigned hereby appoints each of Robert W. Crook, William M.
Breen and Ira P. Shapiro as proxies, each with the power to appoint his
substitute, and authorizes each of them to represent and to vote, as designated
below, all shares of beneficial interest of Merrill Lynch Funds For Institutions
Series (the "Trust") held of record by the undersigned on April 20, 1998 at a
special meeting of shareholders of the Trust to be held on June 8, 1998 or any
adjournment thereof. This proxy when properly executed will be voted in the
manner directed herein by the undersigned shareholder. If no direction is made,
this proxy will be voted for Proposals 1, 2, and, if applicable, 3.

1. To consider and act upon a proposal to elect the following persons as
Trustees of the Trust:

[ ] For all nominees [ ] Withhold [ ] For All Except

Robert W. Crook Charles C. Cabot, Jr. Todd Goodwin
A. Bruce Brackenridge James T. Flynn George W. Holbrook, Jr.
Terry K. Glenn W. Carl Kester

NOTE: If you do not wish your shares voted "FOR" a particular nominee, mark the
"For All Except" box and strike a line through the name(s) of any such
nominee(s).

2. To consider and act upon a proposal to ratify the selection of Deloitte
& Touche LLP as the independent auditors of the Trust to serve for the
current fiscal year.

/ / FOR / / AGAINST / / ABSTAIN

3A. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH PREMIER INSTITUTIONAL FUND.

/ / FOR / / AGAINST / / ABSTAIN

3B. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH INSTITUTIONAL FUND.

/ / FOR / / AGAINST / / ABSTAIN

3C. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH GOVERNMENT FUND.

/ / FOR / / AGAINST / / ABSTAIN
<PAGE> 21
4. In the discretion of such proxies, upon such other business as may
properly come before the meeting or any adjournment thereof.

RECORD DATE SHARES:
Please sign this proxy in the space provided
below. Execution by shareholders who are not
individuals must be made by an authorized
signatory.

Dated:______________________________________

____________________________________________
Shareholder sign here

____________________________________________
co-owner sign here
[x] PLEASE MARK VOTES
AS IN THIS EXAMPLE

Please sign, date and return this Proxy
promptly using the enclosed envelope.

2
<PAGE> 22
PROXY

MERRILL LYNCH INSTITUTIONAL FUND

Merrill Lynch Funds For Institutions Series
One Financial Center
Boston, MA 02111

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.

1. To consider and act upon a proposal to elect the following persons as
Trustees of the Trust:

[ ] For all nominees [ ] Withhold [ ] For All Except

Robert W. Crook Charles C. Cabot, Jr. Todd Goodwin
A. Bruce Brackenridge James T. Flynn George W. Holbrook, Jr.
Terry K. Glenn W. Carl Kester

NOTE: If you do not wish your shares voted "FOR" a particular nominee, mark the
"For All Except" box and strike a line through the name(s) of any such
nominee(s).

2. To consider and act upon a proposal to ratify the selection of Deloitte
& Touche LLP as the independent auditors of the Trust to serve for the
current fiscal year.

/ / FOR / / AGAINST / / ABSTAIN

3A. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH PREMIER INSTITUTIONAL FUND.

/ / FOR / / AGAINST / / ABSTAIN

3B. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH INSTITUTIONAL FUND.

/ / FOR / / AGAINST / / ABSTAIN

3C. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH GOVERNMENT FUND.

/ / FOR / / AGAINST / / ABSTAIN
<PAGE> 23
4. In the discretion of such proxies, upon such other business as may
properly come before the meeting or any adjournment thereof.

RECORD DATE SHARES:
Please sign this proxy in the space provided
below. Execution by shareholders who are not
individuals must be made by an authorized
signatory.

Dated:______________________________________

____________________________________________
Shareholder sign here

____________________________________________
co-owner sign here
[x] PLEASE MARK VOTES
AS IN THIS EXAMPLE

Please sign, date and return this Proxy
promptly using the enclosed envelope.

2
<PAGE> 24
PROXY

MERRILL LYNCH GOVERNMENT FUND

Merrill Lynch Funds For Institutions Series
One Financial Center
Boston, MA 02111

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.

1. To consider and act upon a proposal to elect the following persons as
Trustees of the Trust:

[ ] For all nominees [ ] Withhold [ ] For All Except

Robert W. Crook Charles C. Cabot, Jr. Todd Goodwin
A. Bruce Brackenridge James T. Flynn George W. Holbrook, Jr.
Terry K. Glenn W. Carl Kester

NOTE: If you do not wish your shares voted "FOR" a particular nominee, mark the
"For All Except" box and strike a line through the name(s) of any such
nominee(s).

2. To consider and act upon a proposal to ratify the selection of Deloitte
& Touche LLP as the independent auditors of the Trust to serve for the
current fiscal year.

/ / FOR / / AGAINST / / ABSTAIN

3A. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH PREMIER INSTITUTIONAL FUND.

/ / FOR / / AGAINST / / ABSTAIN

3B. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH INSTITUTIONAL FUND.

/ / FOR / / AGAINST / / ABSTAIN

3C. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH GOVERNMENT FUND.

/ / FOR / / AGAINST / / ABSTAIN
<PAGE> 25
4. In the discretion of such proxies, upon such other business as may
properly come before the meeting or any adjournment thereof.

RECORD DATE SHARES:
Please sign this proxy in the space provided
below. Execution by shareholders who are not
individuals must be made by an authorized
signatory.

Dated:______________________________________

____________________________________________
Shareholder sign here

____________________________________________
co-owner sign here
[x] PLEASE MARK VOTES
AS IN THIS EXAMPLE

Please sign, date and return this Proxy
promptly using the enclosed envelope.

2
<PAGE> 26
PROXY

MERRILL LYNCH TREASURY FUND

Merrill Lynch Funds For Institutions Series
One Financial Center
Boston, MA 02111

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.

1. To consider and act upon a proposal to elect the following persons as
Trustees of the Trust:

[ ] For all nominees [ ] Withhold [ ] For All Except

Robert W. Crook Charles C. Cabot, Jr. Todd Goodwin
A. Bruce Brackenridge James T. Flynn George W. Holbrook, Jr.
Terry K. Glenn W. Carl Kester

NOTE: If you do not wish your shares voted "FOR" a particular nominee, mark the
"For All Except" box and strike a line through the name(s) of any such
nominee(s).

2. To consider and act upon a proposal to ratify the selection of Deloitte
& Touche LLP as the independent auditors of the Trust to serve for the
current fiscal year.

/ / FOR / / AGAINST / / ABSTAIN

3A. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH PREMIER INSTITUTIONAL FUND.

/ / FOR / / AGAINST / / ABSTAIN

3B. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH INSTITUTIONAL FUND.

/ / FOR / / AGAINST / / ABSTAIN

3C. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH GOVERNMENT FUND.

/ / FOR / / AGAINST / / ABSTAIN
<PAGE> 27
4. In the discretion of such proxies, upon such other business as may
properly come before the meeting or any adjournment thereof.

RECORD DATE SHARES:
Please sign this proxy in the space provided
below. Execution by shareholders who are not
individuals must be made by an authorized
signatory.

Dated:______________________________________

____________________________________________
Shareholder sign here

____________________________________________
co-owner sign here
[x] PLEASE MARK VOTES
AS IN THIS EXAMPLE

Please sign, date and return this Proxy
promptly using the enclosed envelope.

2
<PAGE> 28
PROXY

MERRILL LYNCH INSTITUTIONAL TAX-EXEMPT FUND

Merrill Lynch Funds For Institutions Series
One Financial Center
Boston, MA 02111

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.

1. To consider and act upon a proposal to elect the following persons as
Trustees of the Trust:

[ ] For all nominees [ ] Withhold [ ] For All Except

Robert W. Crook Charles C. Cabot, Jr. Todd Goodwin
A. Bruce Brackenridge James T. Flynn George W. Holbrook, Jr.
Terry K. Glenn W. Carl Kester

NOTE: If you do not wish your shares voted "FOR" a particular nominee, mark the
"For All Except" box and strike a line through the name(s) of any such
nominee(s).

2. To consider and act upon a proposal to ratify the selection of Deloitte
& Touche LLP as the independent auditors of the Trust to serve for the
current fiscal year.

/ / FOR / / AGAINST / / ABSTAIN

3A. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH PREMIER INSTITUTIONAL FUND.

/ / FOR / / AGAINST / / ABSTAIN

3B. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH INSTITUTIONAL FUND.

/ / FOR / / AGAINST / / ABSTAIN

3C. To consider and act upon a proposal to amend the investment
restrictions of MERRILL LYNCH GOVERNMENT FUND.

/ / FOR / / AGAINST / / ABSTAIN
<PAGE> 29
4. In the discretion of such proxies, upon such other business as may
properly come before the meeting or any adjournment thereof.

RECORD DATE SHARES:
Please sign this proxy in the space provided
below. Execution by shareholders who are not
individuals must be made by an authorized
signatory.

Dated:______________________________________

____________________________________________
Shareholder sign here

____________________________________________
co-owner sign here
[x] PLEASE MARK VOTES
AS IN THIS EXAMPLE

Please sign, date and return this Proxy
promptly using the enclosed envelope.