<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:
/X/ Preliminary Proxy Statement / / Confidential,
for Use of the Commission Only
/ / Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
VANGUARD TREASURY FUND
- - - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- - - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- - - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
- - - --------------------------------------------------------------------------------
(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:
- - - --------------------------------------------------------------------------------
- - - ---------------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE> 2
[VANGUARD MONEY MARKET RESERVES LOGO]
U.S. TREASURY PORTFOLIO
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF
VANGUARD MONEY MARKET RESERVES, INC.
U.S. TREASURY PORTFOLIO
Notice is hereby given that a Special Meeting of Shareholders of the U.S.
Treasury Portfolio (the "U.S. Treasury Portfolio") of Vanguard Money Market
Reserves, Inc. (the "Fund") will be held in the Majestic Building, Room 118A, at
100 Vanguard Boulevard, Malvern, Pennsylvania 19355, on Tuesday, November 19,
1996, at 9:30 A.M., E.T., for the following purposes:
I. To approve or disapprove a proposed reorganization of the U.S.
Treasury Portfolio into a Portfolio (the "Treasury Money Market
Portfolio") of a Delaware business trust named Vanguard Treasury Fund
(the "Trust").
II. To consider and act upon any other matters which may properly come
before this meeting.
By Order of the Board of Directors
RAYMOND J. KLAPINSKY, Secretary
September , 1996
- - - --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE
AND SIGN IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR
CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATIONS, WE ASK YOUR
COOPERATION IN MAILING YOUR PROXY PROMPTLY.
- - - --------------------------------------------------------------------------------
<PAGE> 3
[VANGUARD MONEY MARKET RESERVES LOGO]
U.S. TREASURY PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS
NOVEMBER 19, 1996
PROXY STATEMENT
The enclosed proxy is solicited by and on behalf of the Board of Directors
of Vanguard Money Market Reserves, Inc. (the "Fund"). All costs of solicitation
(including printing and mailing this proxy statement, meeting notice and form of
proxy) will be paid by the U.S. Treasury Portfolio. In addition to the
solicitation of proxies by mail, officers and employees of the Fund and The
Vanguard Group, Inc. ("Vanguard") may solicit proxies in person or by telephone.
Persons holding shares as nominees will, upon request, be reimbursed for their
reasonable expenses in sending soliciting materials to their principals.
Holders of record of the U.S. Treasury Portfolio at the close of business
on September 12, 1996, are entitled to vote at the meeting or at any adjourned
session. Each share is entitled to one vote. As of the record date, there were
issued and outstanding approximately shares of common stock of the U.S.
Treasury Portfolio.
Shares represented by a properly executed proxy will be voted in accordance
with the instructions thereon or, if no specification is made, the persons named
as proxies will vote in favor of each proposal as recommended by the Board of
Directors. Proxies may be revoked at any time before they are exercised by the
subsequent execution and submission of a revised proxy, by written notice of
revocation to the Secretary of the Fund, or by voting in person at the meeting.
The mailing address of the Fund's principal executive offices is Vanguard
Financial Center, 100 Vanguard Boulevard, P.O. Box 2600, Valley Forge, PA 19482.
This proxy statement was first mailed to shareholders on or about September ,
1996.
Under Maryland law, abstentions and broker non-votes will be included for
purposes of determining whether a quorum is present at the meeting, but will be
treated as votes not cast and, therefore, will not be counted for purposes of
determining whether the proposals have been approved.
SHAREHOLDERS WHO NEED DIRECTIONS TO THE LOCATION OF THE SPECIAL MEETING
SHOULD CALL 1-800-852-6999, BETWEEN THE HOURS OF 8:00 A.M. AND 9:00 P.M.,
EASTERN TIME, ON ANY BUSINESS DAY.
1
<PAGE> 4
PROPOSAL TO REORGANIZE THE U.S. TREASURY
PORTFOLIO INTO A DELAWARE BUSINESS TRUST
On July 19, 1996, the Board of Directors of the Fund approved an Agreement
and Plan of Reorganization (the "Plan") substantially in the form attached
hereto as Exhibit A. The Plan provides for a reorganization (the
"Reorganization") of the U.S. Treasury Portfolio of the Fund pursuant to which
its domicile and form of organization will be changed from a series of shares
(Portfolio) of a Maryland corporation to a series of shares of a Delaware
business trust named "Vanguard Treasury Fund" (the "Trust"). The series of
shares of the Trust is named the "Treasury Money Market Portfolio" (the
"Treasury Money Market Portfolio"). As further described below, the proposed
Reorganization is expected to reduce state and local taxes paid by the U.S.
Treasury Portfolio. In addition, as a series of a trust, the Treasury Money
Market Portfolio's assets should be exempt from state intangibles taxes to the
extent its assets are direct U.S. Government obligations.
BACKGROUND AND REASONS FOR THE REORGANIZATION
The Fund was incorporated in Maryland on November 19, 1985. Because the
Fund's headquarters are located in Pennsylvania, the U.S. Treasury Portfolio
pays the Pennsylvania foreign franchise tax. For the most recent tax year, this
tax amounted to approximately $175,000. If the U.S. Treasury Portfolio were
organized as a series of a Delaware business trust, it would be exempt from this
tax, although it would be subject to the Pennsylvania county personal property
tax in the county where Vanguard is located. However, it is expected that the
county personal property tax liability will be much lower than the foreign
franchise tax since a large percentage of the securities in the U.S. Treasury
Portfolio consist of U.S. Treasury securities, which are exempt from the county
personal property tax. If the U.S. Treasury Portfolio had been organized as a
series of a business trust for its most recent tax year, the total Pennsylvania
tax liability would have been $0 , which represents savings of $175,000. It is
expected that similar savings will be realized in future years if this proposal
is approved by shareholders.
The cost of reorganizing the U.S. Treasury Portfolio as a series of a
Delaware business trust is estimated at $ ?? . This is a one-time cost which is
primarily comprised of the expenses associated with printing and mailing this
proxy statement.
For these reasons, the Directors of the Fund believe it is in the best
interest of shareholders to reorganize the U.S. Treasury Portfolio into a series
of a Delaware business trust. At present, it appears that the most advantageous
time to consummate the Reorganization is on or before December 1, 1996. However,
if the Reorganization is approved by shareholders, the Reorganization will be
consummated on such date as the Directors deem advisable and in the best
interest of shareholders.
2
<PAGE> 5
CONSEQUENCES AND PROCEDURES OF THE REORGANIZATION
Upon consummation of the Reorganization, the Treasury Money Market
Portfolio of the Vanguard Treasury Fund (the "Trust") will continue the U.S.
Treasury Portfolio's business with the same investment objectives and policies.
The Trust has been organized specifically for the purpose of effecting the
Reorganization. Immediately prior to the effective date of the Reorganization
(as defined in the Plan), the Treasury Money Market Portfolio of the Trust will
have outstanding only one share of beneficial interest corresponding to the U.S.
Treasury Portfolio and bearing the name "Treasury Money Market Portfolio." The
U.S. Treasury Portfolio will be the sole holder of such share of beneficial
interest. The Plan contemplates that the Directors of the Fund serving at the
time of the Reorganization will become trustees of the Trust, with comparable
responsibilities, if the shareholders give the requisite approval at the
meeting. The Fund's officers will become officers of the Trust with comparable
responsibilities. The Reorganization will not result in the recognition of
income, gain or loss for Federal income tax purposes to the Trust, the U.S.
Treasury Portfolio or the holders of shares of the U.S. Treasury Portfolio. (See
"Federal Income Tax Consequences of the Plan.")
To accomplish the Reorganization, the Plan provides that the Fund will
transfer all of the assets of the U.S. Treasury Portfolio, subject to its
related liabilities, to the Trust and the Treasury Money Market Portfolio. The
Trust will establish an open account for each shareholder and will credit to
that account the exact number of full and fractional shares such shareholder
held in the U.S. Treasury Portfolio of the Fund on the effective date of the
Reorganization. Each shareholder will retain the right to any declared but
undistributed dividends or other distributions payable on the shares of the U.S.
Treasury Portfolio he or she owned. On the date of the Reorganization, the net
asset value per share of the U.S. Treasury Portfolio will be the same as the net
asset value per share of the Treasury Money Market Portfolio of the Trust. The
Trust will assume all liabilities and obligations of the U.S. Treasury
Portfolio. As soon as practicable after the effective date of the
Reorganization, shares of the U.S. Treasury Portfolio will be reclassified as
authorized, unissued and unallocated shares of common stock of the Fund.
On the effective date of the Reorganization, the number of outstanding
shares of the U.S. Treasury Portfolio of the Fund will be identical to the
number of outstanding shares of the Treasury Money Market Portfolio of the
Trust. Shareholders will have the right to exchange their shares of the U.S.
Treasury Portfolio for shares of the Treasury Money Market Portfolio of the
Trust. A shareholder, however, is not required to make this exchange of shares.
The Plan provides that the effective date of the Reorganization will be (i)
the next business day after the later of the receipt of all necessary regulatory
approvals or the final adjournment of the meeting of shareholders of the U.S.
Treasury Portfolio at which the Plan will be considered or (ii) such later date
as
3
<PAGE> 6
the parties may mutually agree. It is expected that this will be on December 1,
1996, or such sooner time as the Directors deem advisable and in the best
interest of the U.S. Treasury Portfolio and its shareholders. The Plan may be
terminated and the Reorganization abandoned at any time prior to the effective
date of the Reorganization by the Board of Directors of the Fund. If the
Reorganization is not so approved or if the Directors determine to terminate or
abandon the Reorganization, the U.S. Treasury Portfolio will continue to operate
as a series of the Fund, a Maryland corporation.
CAPITALIZATION AND STRUCTURE
The Fund was incorporated under the General Corporation Law of Maryland
("Maryland Code") on November 19, 1985. It has authorized capitalization of
37,000,000,000 shares of common stock with a par value of $.001 per share. The
Fund currently offers three series of shares authorized and registered with the
Securities and Exchange Commission, the Prime Portfolio, the Federal Portfolio
and the U.S. Treasury Portfolio. The Prime Portfolio of the Fund offers two
classes of shares.
The Trust was created on August 20, 1996, pursuant to the Delaware Business
Trust Act ("Delaware Act"). The Trust has an unlimited number of shares of
beneficial interest authorized, all of which have a par value of $.001 per
share. Currently, the Trust has one series of shares, the Treasury Money Market
Portfolio, authorized, and that Portfolio of the Trust has been allocated an
unlimited number of shares. Shares of the Trust may be divided into sub-classes
or sub-series.
Shares of both the Fund and the Trust have equal dividend rights, are fully
paid, non-assessable, and freely transferable and have no conversion, preemptive
or subscription rights. Shares of both the Fund and the Trust have equal voting
and liquidation rights and have one vote per share. Fractional shares have the
same rights, pro rata, as full shares.
Prior to the Reorganization, the Trust will have nominal assets and no
liabilities. The sole shareholder of the Treasury Money Market Portfolio of the
Trust will be the U.S. Treasury Portfolio. The Treasury Money Market Portfolio
of the Trust will have the same investment objective and policies as the U.S.
Treasury Portfolio. Vanguard will provide investment advisory services to the
Treasury Money Market Portfolio of the Trust as it does to the U.S. Treasury
Portfolio on an at-cost basis from an investment management staff employed
directly by Vanguard. The compensation and other expenses of this staff are paid
by the Vanguard Funds utilizing this staff. The Trust will have the same fiscal
year as the Fund.
Subsequent to the closing of the Reorganization, each share of the U.S.
Treasury Portfolio will be exchanged for an identical number of shares of the
Treasury Money Market Portfolio of the Trust. Thereafter, shares of the
4
<PAGE> 7
Treasury Money Market Portfolio of the Trust will be available for issuance at
its net asset value, applicable at the time of sale.
EFFECT OF SHAREHOLDER APPROVAL OF THE REORGANIZATION
An investment company registered under the 1940 Act of 1940 (the "1940
Act") is required by the 1940 Act to (1) submit the selection of the company's
independent auditors to the shareholders for their ratification; and (2) call a
special meeting to elect directors (trustees) within sixty days if, at any time,
less than one half of the directors (trustees) holding office have been elected
by the shareholders.
The Directors of the Fund believe that it is in the interest of the U.S.
Treasury Portfolio's shareholders (who will become the Trust's shareholders if
the Reorganization is approved) to avoid the considerable expense of another
shareholders' meeting to take these actions shortly after the Reorganization.
The Directors also believe that it is not in the interest of the shareholders to
carry out the Reorganization if the surviving Trust would not have a board of
trustees or independent auditors complying with the 1940 Act.
The Directors will, therefore, consider that approval by the requisite vote
of the shareholders of the Reorganization will also constitute, for the purposes
of the 1940 Act: (1) election of the Directors of the Fund in office at the time
of the Reorganization as Trustees of the Trust after the Reorganization; and (2)
ratification by the shareholders of the selection of Price Waterhouse as the
Fund's independent auditors. (See "Information Concerning the Nominees to the
Board of Trustees of the Trust" and "Information Concerning the Independent
Auditors of the Trust.")
Assuming shareholder approval of the Reorganization, the Fund, as the sole
shareholder of the Trust prior to the Reorganization, will effect these actions
by voting its share in the U.S. Treasury Portfolio "FOR" the matters specified
above on behalf of its shareholders prior to the Reorganization. The Fund will
then consider the requirements of the 1940 Act referred to above to have been
satisfied.
FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
It is anticipated that the transaction contemplated by the Plan will be tax
free for federal income tax purposes. Consummation of the Reorganization is
subject to receipt of a ruling from the Internal Revenue Service or an opinion
of Messrs. Stradley, Ronon, Stevens & Young, LLP, counsel to the Trust and the
Fund, that under the Internal Revenue Code of 1986, as amended, the exchange of
assets of the U.S. Treasury Portfolio for the shares of the Treasury Money
Market Portfolio of the Trust, the transfer of such shares to the holders of
shares of the U.S. Treasury Portfolio and the reclassification of the shares of
the U.S. Treasury Portfolio as authorized, unissued and unallocated shares of
common
5
<PAGE> 8
stock of the Fund pursuant to the Plan will not give rise to the recognition of
a gain or loss for Federal income tax purposes to the Fund, the Trust or
shareholders of the U. S. Treasury Portfolio or the Treasury Money Market
Portfolio. A shareholder's adjusted basis for tax purposes in the shares of the
Treasury Money Market Portfolio of the Trust after the exchange and transfer
will be the same as his adjusted basis for tax purposes in the shares of the
U.S. Treasury Portfolio of the Fund immediately before the exchange. Each
shareholder should consult his own tax adviser with respect to the details of
these tax consequences and with respect to state and local tax consequences of
the proposed transaction.
TEMPORARY WAIVER OF CERTAIN INVESTMENT RESTRICTIONS
Certain of the U.S. Treasury Portfolio's present investment restrictions
would preclude the Portfolio from carrying out the Reorganization. Specifically,
such investment restrictions prohibit the U.S. Treasury Portfolio from acquiring
control of any company or purchasing more than a certain percentage of ownership
of another investment company or other company. Approval of the Reorganization
would be deemed to be a waiver of these restrictions for the specific purpose of
engaging in the Reorganization.
DIFFERENCES BETWEEN LEGAL STRUCTURES
The following discussion summarizes the material differences between the
legal structure of a Delaware business trust, created pursuant to the Delaware
Act, and a corporation organized under the Maryland Code, by comparing the
provisions of the proposed governing instruments of the Trust, the Agreement and
Declaration of Trust ("Declaration of Trust") and By-Laws, with the provisions
of the Fund's corporate charter and By-Laws, the Fund's current governing
instruments.
A Declaration of Trust is the instrument which provides for the governance
of the business and affairs of the Trust. The Trust's By-Laws also contain
provisions governing the operations of the Trust. Under the Maryland Code, the
business and affairs of a Maryland corporation are governed by its charter and
By-Laws.
1. SHAREHOLDER LIABILITY. The Delaware Act provides that, except to the
extent otherwise provided in the governing instrument, the shareholders of a
Delaware business trust shall be entitled to the same limitation of personal
liability extended to stockholders of a private corporation organized for profit
under the general corporation law of Delaware. There is no specific provision in
the Declaration of Trust or By-Laws of the Trust varying this provision. As a
general matter, shareholders of a Maryland corporation are not personally liable
for the obligations of the corporation.
6
<PAGE> 9
2. LIABILITY OF DIRECTORS/TRUSTEES. The Delaware Act provides that a
trustee shall not be personally liable to any person other than the business
trust or a beneficial owner for any act, omission or obligation of the business
trust or any trustee. The Delaware Act also states that the trustee's duties and
liabilities to the trust and its shareholders may be expanded or restricted by
provisions in the governing instrument. In this regard, the Trust's Declaration
of Trust provides that the trustees shall not be responsible or liable in any
event for any neglect or wrongdoing of any officer, agent, employee, manager or
principal underwriter of the Trust, nor shall any trustee be responsible for the
act or omission of any other trustee. In addition, the Declaration of Trust also
states that the trustees, acting in their capacity as trustees, shall not be
personally liable for acts done by or on behalf of the Trust.
The Maryland Code requires a director to perform his or her duties in good
faith, in a manner he or she reasonably believes to be in the best interest of
the corporation and with the care that an ordinarily prudent person in a like
position would use under similar circumstances. A director who performs his or
her duties in accordance with this standard has no liability by reason of being
or having been a director. If it is established that a director did not meet the
foregoing standard, the director, for example, may be personally liable to the
corporation for voting or assenting to a distribution of assets to stockholders
which is in violation of its charter or the Maryland Code.
3. INDEMNIFICATION. The Declaration of Trust, consistent with the Delaware
Act, provides that the Trust, subject to its By-Laws, may indemnify, out of its
assets, and hold harmless each and every trustee and officer from and against
any and all claims, demands, costs, losses, expenses, and damages, arising out
of, or related to, such trustee's performance of his or her duties as a trustee
or officer. Pursuant to the Declaration of Trust, the Trust will not indemnify
any trustee or officer from or against any liability to the Trust or any
shareholder by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office.
The Fund's charter provides for indemnification of directors and officers
to the fullest extent that indemnification of directors is permitted by the
Maryland Code. Pursuant to the Maryland Code, indemnification is permitted if:
(i) the act or omission of the director was immaterial to the matter giving rise
to the proceeding and was committed in good faith or was not the result of
active and deliberate dishonesty; or (ii) the director did not receive an
improper personal benefit in money, property or services; or (iii) in the case
of a criminal proceeding, the director had no reasonable cause to believe that
the act or omission was unlawful. Similar to the Trust's By-Laws, under the
Maryland Code, indemnification against reasonable expenses incurred by a
director is required for a director who is successful, on the merits or
otherwise, in the defense of a proceeding.
7
<PAGE> 10
Similar to the Declaration of Trust, the Fund's charter provides that the
Fund shall not protect any officer or director for any liability arising from
the willful misfeasance, bad faith, gross negligence, or the reckless disregard
of the duties involved in the conduct of such person's duties to the Fund.
4. SHAREHOLDER VOTING RIGHTS AND MEETINGS. Following the Reorganization,
shareholders of the Trust will generally have the same voting rights as
shareholders of the Fund, and the Trust will continue to be subject to the
voting requirements of the 1940 Act. Under both the Delaware Act and the
Maryland Code, annual meetings of a registered investment company's shareholders
are not required to be held. Pursuant to the Maryland Code, however, an annual
meeting is required to be held when the 1940 Act requires the election of
directors to be acted upon by shareholders. The Delaware Act does not require an
annual meeting to be held in any case; however, the By-Laws of the Trust provide
that an annual meeting of shareholders will be held if the 1940 Act requires the
election of trustees to be acted upon.
The following voting requirements with respect to the calling of special
meetings by shareholders will change. The Fund's By-Laws and the Maryland Code
provide that a special meeting of shareholders shall be called upon the written
request of shareholders entitled to cast at least 25% of all votes entitled to
be cast upon the payment of certain estimated costs. The By-Laws of the Trust
provide that special meetings of shareholders shall be called upon the written
request of holders of shares entitled to cast at least 10% of all votes entitled
to be cast at the meeting upon payment of certain estimated costs.
5. PAYMENT OF DIVIDENDS. The Maryland Code imposes certain limitations on
distributions including a restriction against distributions if, after giving
effect to the distribution, the corporation would not be able to pay
indebtedness of the corporation as the indebtedness becomes due, or the
corporation's total assets would be less than the sum of the corporation's
liabilities plus amounts due holders of preferential rights if the corporation
were to be dissolved. No such limitations are contained in the Trust's
Declaration of Trust or By-Laws, although appropriate provisions of the 1940 Act
and the Tax Reform Act of 1986 do apply.
The foregoing is only a summary of the material differences between the
Fund's charter, its By-Laws and the Maryland Code and the Trust's Declaration of
Trust, its By-Laws and the Delaware Act. It is not a complete list of
differences. Shareholders should refer to the provisions of such charter,
By-Laws, the Maryland Code, the Declaration of Trust, the Trust's By-Laws and
the Delaware Act directly for a more thorough comparison.
REQUESTS FOR REDEMPTION
Any request to redeem shares of the U.S. Treasury Portfolio received and
processed prior to the Reorganization will be treated as a redemption of shares
of
8
<PAGE> 11
the U.S. Treasury Portfolio. Any request to redeem shares received or processed
after the Reorganization will be treated as a request for the redemption of a
like number of shares of the Treasury Money Market Portfolio of the Trust.
INFORMATION CONCERNING THE NOMINEES
TO THE BOARD OF TRUSTEES OF THE TRUST
If you vote "yes" to approve the Reorganization, your vote will also have
the effect of electing the current Directors of the Fund as the Trustees of the
Trust. All of the nominees are currently members of the Board of Directors of
the Fund. The mailing address of the Directors and officers of the Fund is P.O.
Box 876, Valley Forge, PA 19482.
If the Reorganization is approved, the Fund will vote the share of
beneficial interest it holds in the Trust for the election of the nominees set
forth below as trustees. Each trustee shall serve as such until the next
election or until his or her term is terminated as provided in the Trust's
governing instrument. On September 12, 1996, the following Directors owned
shares of the Fund: Mr. Brennan (3,746 shares); Mrs. Hauptfuher (356,436
shares); and Mr. Sawhill (6,297 shares). On that date all Directors and Officers
of the Fund owned less than 1% of the outstanding shares of the Fund. The
nominees and their principal occupations for the past five years are listed
below.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND OTHER
NAME AGE DIRECTORSHIPS
- - - --------------------------- --- ------------------------------------
<S> <C> <C>
John C. Bogle(1)(2)........ 67 Chairman of the Fund and Director of
Vanguard and each of the Vanguard
Funds; Director of The Mead
Corporation and General Accident
Insurance.
John J. Brennan(1)(2)...... 42 President, Chief Executive Officer
of the Fund, Vanguard and each of
the Vanguard Funds.
Robert E. Cawthorn(3)...... 60 Chairman Emeritus of Rhone-Poulenc
Rorer, Inc.; Director of Sun
Company, Inc.; Director of
Westinghouse Electric Corporation.
Barbara B.
Hauptfuhrer(2)........... 67 Director of The Great Atlantic and
Pacific Tea Company, Raytheon
Company, Knight-Ridder, Inc.,
Massachusetts Mutual Life Insurance
Co., and ALCO Standard Corp.;
Trustee Emerita of Wellesley
College.
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND OTHER
NAME AGE DIRECTORSHIPS
- - - --------------------------- --- ------------------------------------
<S> <C> <C>
Bruce K. MacLaury(4)....... 65 President Emeritus of The Brookings
Institution; Director of American
Express Bank, Ltd., The St. Paul
Companies, Inc. and National Steel
Corporation.
Burton G. Malkiel(3)....... 64 Chemical Bank Chairman's Professor
of Economics, Princeton University;
Director of Prudential Insurance Co.
of America, Amdahl Corporation,
Baker Fentress & Co., The Jeffrey
Co., and Southern New England
Communications Company.
Alfred M. Rankin, Jr.(2)... 53? Chairman, President and Chief
Executive Officer of NACCO
Industries; Director of The BF
Goodrich Company and The Standard
Products Company.
John C. Sawhill(2)......... 60 President and Chief Executive
Officer, The Nature Conservancy;
formerly, Director and Senior
Partner, McKinsey & Co., an
President, New York University;
Director of Pacific Gas and Electric
Company and NACCO Industries.
James O. Welch, Jr.(5)..... 65 Retired Chairman of Nabisco Brands,
Inc.; retired Vice Chairman and
Director of RJR Nabisco; Director of
TECO Energy, Inc.
J. Lawrence Wilson(2)...... 60 Chairman and Chief Executive Officer
of Rohm & Haas Company; Director of
Cummins Engine Company and Trustee
of Vanderbilt University.
</TABLE>
- - - ---------------
(1) An officer is considered an "interested person" of the Fund as defined in
the 1940 Act.
(2) A Director (Trustee) of Vanguard and each of the Vanguard Funds.
(3) A Director (Trustee) of Vanguard and each of the Vanguard Funds, except
Vanguard Equity Income Fund.
(4) A Director (Trustee) of each of the Vanguard Funds, except Vanguard
Municipal Bond Fund and the six Vanguard State Tax-Free Funds.
(5) A Director (Trustee) of Vanguard and each of the Vanguard Funds, except
Gemini II.
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<PAGE> 13
BOARD MEETINGS AND COMMITTEES
During the fiscal year ended November 30, 1995, the Fund's Board of
Directors held 10 meetings.
The Board of Directors of the Fund has a standing Compensation, Nomination
and Audit Committee, which is composed of the Directors who are not "interested
persons" of the Fund. During the fiscal year ended November 30, 1995, the
Committee held -- meetings. The Board of Trustees of the Trust will have a
similar Committee. The Committee is responsible principally for: (1) selecting
the Fund's independent accountants, and reviewing their fees; (2) meeting with
the Fund's independent accountants for the purpose of reviewing the adequacy of
the Fund's internal accounting controls; (3) evaluating the performance of the
Fund's officers and employees, and developing and approving the overall
compensation plan (including basic salary, customary insurance and other
benefits and incentives) for such officers and employees (who are paid through
Vanguard); and (4) interviewing, evaluating and recommending to shareholders
candidates for election to the Fund's Board of Directors (Trustees).
The Committee for the Fund will consider Director nominations recommended
by shareholders. Such nominations can be made by submitting a written request
for consideration of a candidate, including a resume, to Mr. J. Lawrence Wilson,
the Chairman of the Committee.
PRINCIPAL EXECUTIVE OFFICERS
The following individuals are officers of the Fund and have held their
positions with the Fund since its inception. The following individuals also
serve as Principal officers of the Trust. The officers also hold identical
positions with the other Vanguard Funds and are officers of Vanguard. The
officers have held such positions for the past five years.
<TABLE>
<CAPTION>
NAME AGE OFFICE
- - - --------------------- ---- ----------------------------------
<S> <C> <C>
John C. Bogle 67 Chairman (since August , 1996
for the Trust)
John J. Brennan 42 President and Chief Executive
Officer (since August , 1996 for
the Trust)
Raymond J. Klapinsky 57 Secretary (since August , 1996
for the Trust)
Richard F. Hyland 59 Treasurer (since August , 1996
for the Trust)
Karen E. West 49 Controller (since August , 1996
for the Trust)
</TABLE>
11
<PAGE> 14
REMUNERATION OF DIRECTORS, TRUSTEES AND OFFICERS
Each Trustee of the Trust, who is not also an officer, will be paid as they
are paid currently for serving on the Board of Directors of the Fund. Each
Trustee will receive an annual fee plus a proportionate share of travel and
other expenses incurred in attending Board meetings. Directors or Trustees who
are also officers receive no remuneration for their service as Directors or
Trustees. The Fund's officers and employees are, and the Trust's officers will
be, paid by Vanguard which, in turn, is reimbursed by the Fund, the Trust, and
each other Fund in The Vanguard Group of Investment Companies, for its
proportionate share of officers' and employees' salaries and retirement
benefits. The Fund's proportionate share of remuneration paid by Vanguard (and
reimbursed by the Fund) during the 1995 fiscal year to all officers of the Fund,
as a group, was approximately $745,000.
Upon retirement, Directors (Trustees) who are not officers are paid an
annual fee based upon the number of years of service on the Board. The fee is
equal to $1,000 for each year of service on the Board up to a maximum of fifteen
years and each investment company member of Vanguard contributes a proportionate
amount of this fee based on its relative net assets. Under its retirement plan,
Vanguard contributes annually an amount equal to 10% of each eligible officer's
annual compensation plus 5.7% of that part of the eligible officer's
compensation during the year, if any, that exceeds the Social Security Taxable
Wage Base then in effect. Under its thrift plan, all eligible officers are
permitted to make pre-tax contributions in an amount equal to 4% of total
compensation which are matched by Vanguard on a 100% basis. The Fund's
proportionate share of retirement contributions made by Vanguard under its
retirement and thrift plans on behalf of all eligible officers of the Fund, as a
group, during the 1995 fiscal year was approximately $426,000.
The table below provides detailed information with respect to the amounts
paid or accrued for the Directors of the Fund for the fiscal year ended November
30, 1995.
<TABLE>
<CAPTION>
PENSION OR TOTAL
RETIREMENT COMPENSATION
BENEFITS FROM ALL
AGGREGATE ACCRUED ESTIMATED VANGUARD FUNDS
COMPENSATION AS PART OF ANNUAL BENEFITS PAID TO
NAME OF DIRECTOR FROM FUND FUND EXPENSES UPON RETIREMENT DIRECTORS(2)
- - - ------------------ ----------- ------------- --------------- --------------
<S> <C> <C> <C> <C>
John C.
Bogle(1)........ 408,820 4,320 -- --
John J.
Brennan(1)...... 205,080 4,320 -- --
Barbara B.
Hauptfuhrer..... $ 9,344 $ 1,571 $15,000 $ 60,000
Robert E.
Cawthorn........ $ 9,344 $ 1,309 $13,000 $ 60,000
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
PENSION OR TOTAL
RETIREMENT COMPENSATION
BENEFITS FROM ALL
AGGREGATE ACCRUED ESTIMATED VANGUARD FUNDS
COMPENSATION AS PART OF ANNUAL BENEFITS PAID TO
NAME OF DIRECTOR FROM FUND FUND EXPENSES UPON RETIREMENT DIRECTORS(2)
- - - ------------------ ----------- ------------- --------------- --------------
<S> <C> <C> <C> <C>
Bruce K.
MacLaury........ $10,131 $ 1,549 $12,000 $ 55,000
Burton G.
Malkiel......... $ 9,344 $ 1,047 $15,000 $ 60,000
Alfred M.
Rankin, Jr...... $ 9,344 $ 827 $15,000 $ 60,000
John C. Sawhill... $ 9,344 $ 982 $15,000 $ 60,000
James O.
Welch, Jr....... $ 9,344 $ 1,209 $15,000 $ 60,000
J. Lawrence
Wilson.......... $ 9,344 $ 873 $15,000 $ 60,000
</TABLE>
(1) As "interested directors," Messrs. Bogle and Brennan receive no compensation
for their service.
(2) The amounts reported in this column reflect the total compensation paid to
each Director for their service as Director or Trustee of 34 Vanguard Funds
(26 in the case of Mr. MacLaury and 33 in the case of Messrs. Malkiel and
Welch).
III. INFORMATION CONCERNING THE
INDEPENDENT AUDITORS OF THE TRUST
If you vote to approve the proposed Reorganization, your vote will also
have the same effect as a vote ratifying the selection of Price Waterhouse as
the independent auditors for the Trust for the current fiscal year ending
November 30, 1997. The Board of Trustees for the Trust has selected Price
Waterhouse as independent accountants to audit and certify financial statements
of the Trust for the fiscal year ending November 30, 1997. Price Waterhouse
serves all of the Funds in The Vanguard Group of Investment Companies in this
capacity. In connection with the audit function, Price Waterhouse will also
review the Trust's Annual Report to shareholders and the Trust's filings with
the Securities and Exchange Commission. Neither Price Waterhouse nor any of its
partners has any direct or material indirect financial interest in the Trust.
A representative of Price Waterhouse will be present at the meeting if
requested by a shareholder (either by telephone or in writing) in advance of the
meeting. Such requests should be directed to the Secretary of the Fund.
13
<PAGE> 16
If the Reorganization is approved, the Fund will vote its share of
beneficial interest in the Trust for the ratification of Price Waterhouse as
auditors of the Trust.
REQUIRED VOTE
Approval of the Plan and the transactions contemplated thereby, requires
the affirmative vote of a majority of all the U.S. Treasury Portfolio's shares
entitled to vote at the meeting provided a quorum is present. THE BOARD OF
DIRECTORS RECOMMENDS APPROVAL OF THE REORGANIZATION.
OTHER INFORMATION
The Fund is member of The Vanguard Group of Investment Companies. Through
their jointly owned subsidiary, Vanguard, the Fund and the other Funds in the
group obtain at cost virtually all of their corporate management, administrative
and distribution services. Vanguard is located at 100 Vanguard Boulevard,
Malvern, PA 19355.
LITIGATION
The Fund is not involved in any litigation.
SHAREHOLDER PROPOSALS
The Fund does not currently intend to hold an annual meeting in 1997.
Shareholder proposals for inclusion in the proxy statement for any subsequent
meeting must be received by the Fund within a reasonable period of time prior to
its next annual meeting.
OTHER MATTERS
The Board of Directors knows of no other business to be brought before the
meeting. However, if any other matters come before the meeting, proxies which do
not contain specific restrictions to the contrary will be voted on such matters
in accordance with the judgment of the persons named in the enclosed form of
proxy.
SHAREHOLDER REPORTS
The most recent Annual and Semi-Annual Reports for the Fund are available
at no cost to Fund shareholders upon written or oral request by contacting the
Fund at (address), or by calling 1-800- .
14
<PAGE> 17
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("Agreement") is made as of this
1st day of December, 1996 by and between Vanguard Money Market Reserves, Inc., a
Maryland corporation (the "Fund"), and Vanguard Treasury Fund, a business trust
created under the laws of the State of Delaware (the "Trust").
In consideration of the mutual promises contained herein, and intending to
be legally bound, the parties hereto agree as follows:
1. PLAN OF REORGANIZATION.
(a) Upon satisfaction of the conditions precedent described in Section
3 hereof, the Fund will convey, transfer and deliver to the Trust at
the closing provided for in Section 2 (hereinafter referred to as the
"Closing") all of the then-existing assets belonging to the U.S.
Treasury Portfolio to be conveyed, transferred and delivered to the
Trust. In consideration thereof, the Trust agrees at the Closing (i) to
assume and pay, to the extent that they exist on or after the Effective
Date of the Reorganization (as defined in Section 2 hereof), all of the
U.S. Treasury Portfolio's obligations and liabilities, whether
absolute, accrued, contingent or otherwise, including all fees and
expenses in connection with the Agreement, including without limitation
costs of legal advice, accounting, printing, mailing, proxy
solicitation and transfer taxes, if any, the obligations and
liabilities allocated to the U.S. Treasury Portfolio to become the
obligations and liabilities of the Treasury Money Portfolio of the
Trust, and (ii) to deliver to the Fund full and fractional shares of
beneficial interest of the Treasury Money Market Portfolio of the
Trust, par value $0.001, equal in number to the number of full and
fractional shares of common stock, with $0.001 par value, of the U.S.
Treasury Portfolio of the Fund. The transactions contemplated hereby
are intended to qualify as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended
("Code").
(b) The Trust will effect such delivery by establishing an open account
for each shareholder of the U.S. Treasury Portfolio of the Fund and by
crediting to such account, the exact number of full and fractional
shares of the Treasury Money Market Portfolio of the Trust such
shareholder held in the U.S. Treasury Portfolio of the Fund on the
Effective Date of the Reorganization. Fractional shares of the Treasury
Money Market Portfolio of the Trust will be carried to the third
decimal place. On the Effective Date of the Reorganization, the net
asset value per share of beneficial interest of the Treasury Money
Market Portfolio of the Trust shall be deemed to be the same as the net
asset value per share of the
15
<PAGE> 18
U.S. Treasury Portfolio of the Fund. On such date, each certificate
representing shares of the U.S. Treasury Portfolio of the Fund will
represent the same number of shares of the Treasury Money Market
Portfolio of the Trust. Each shareholder of the U.S. Treasury Portfolio
of the Fund will have the right to exchange his (her) share
certificates for share certificates of the Treasury Money Market
Portfolio of the Trust.
However, a shareholder need not make this exchange of certificates
unless he (she) so desires. Simultaneously with the crediting of the
shares of the Treasury Money Market Portfolio of the Trust to the
shareholders of record, the shares of the U.S. Treasury Portfolio held
by such shareholder shall be canceled.
(c) As soon as practicable after the Effective Date of the
Reorganization, the Fund shall take all necessary steps to effect a
complete dissolution of the U.S. Treasury Portfolio and to reclassify
the shares of common stock of the U.S. Treasury Portfolio as
authorized, unissued and unallocated shares of common stock of the Fund
under Maryland law.
2. CLOSING AND EFFECTIVE DATE OF THE REORGANIZATION. The Closing shall
occur either on (i) the business day immediately following the later of
receipt of all necessary regulatory approvals or the final adjournment of
the meeting of shareholders of the U.S. Treasury Portfolio of the Fund at
which this Agreement will be considered, or (ii) such later date as the
parties may mutually agree (the "Effective Date of the Reorganization").
3. CONDITIONS PRECEDENT. The obligations of the Fund and the Trust to
effectuate the Reorganization hereunder shall be subject to the satisfaction
of each of the following conditions:
(a) Such authority and orders from the Securities and Exchange
Commission (the "Commission") and state securities commissions as may
be necessary to permit the parties to carry out the transactions
contemplated by this Agreement shall have been received;
(b)(i) one or more post-effective amendments to the Fund's Registration
Statement on Form N-1A under the Securities Act of 1933 and the
Investment Company Act of 1940, containing appropriate revisions as a
result of the Agreement shall have been filed and become effective with
the Commission; and (ii) an initial Registration Statement for the
Trust on Form N-1A, which has been filed with the Commission; and (iii)
no stop order suspending the effectiveness of each of the forgoing
Registration Statements shall have been issued, and no proceeding for
that purpose shall have been initiated or threatened by the Commission
(other than any such stop order, proceeding or threatened proceeding
which shall have been withdrawn or terminated);
16
<PAGE> 19
(c) Confirmation shall have been received from the Commission or the
Staff thereof that the Trust shall, effective upon or before the
Effective Date of the Reorganization, be duly registered as an openend
management investment company under the Investment Company Act of 1940,
as amended;
(d) Each party shall have received a ruling from the Internal Revenue
Service or an opinion from Messrs. Stradley, Ronon, Stevens & Young,
LLP, Philadelphia, Pennsylvania, to the effect that the reorganization
contemplated by this Agreement qualifies as a "reorganization" under
Section 368(a) of the Code, and, thus, will not give rise to the
recognition of income, gain or loss for federal income tax purposes to
the Fund, the Trust or shareholders of the U.S. Treasury Portfolio of
the Fund or the Treasury Money Market Portfolio of the Trust;
(e) Each party shall have received an opinion from Messrs. Stradley,
Ronon, Stevens & Young, LLP, dated the Effective Date of the
Reorganization, addressed to and in form and substance satisfactory to
it, to the effect that (i) this Agreement and the reorganization
provided for herein, and the execution of this Agreement, has been duly
authorized and approved by the Fund and the Trust and constitutes a
legal, valid and binding agreement of each such party in accordance
with its terms; (ii) the shares of the Trust to be issued pursuant to
the terms of this Agreement have been duly authorized and, when issued
and delivered as provided in this Agreement, will have been validly
issued and fully paid and will be non-assessable by the Trust; and
(iii) the Trust is duly organized and validly existing under the laws
of the State of Delaware;
(f) The shares of the Treasury Money Market Portfolio of the Trust
shall have been duly qualified for offering to the public in all states
of the United States, the Commonwealth of Puerto Rico and the District
of Columbia so as to permit the transfers contemplated by this
Agreement to be consummated;
(g) This Agreement and the reorganization contemplated hereby shall
have been adopted by an affirmative vote of a majority of all votes
entitled to be cast at a meeting of the shareholders of the U.S.
Treasury Portfolio of the Fund, with the shares of such Portfolio
voting as a single class;
(h) The Fund shall have voted, as sole shareholder of the Trust, to:
(1) Elect as Trustees of the Trust (the "Trustees") the following
individuals: Messrs. John C. Bogle, John J. Brennan, Robert E.
Cawthorn, Bruce K. MacLaury, Burton G. Malkiel, Alfred M.
17
<PAGE> 20
Rankin, Jr., John C. Sawhill, James O. Welch, Jr., J. Lawrence
Wilson and Ms. Barbara B. Hauptfuhrer; and
(2) Select Price Waterhouse as the independent public accountants
for the Trust for the fiscal year ending November 30, 1997.
(i) The Trustees shall have taken the following action at a meeting
duly called for such purposes:
(1) Approval of the Trust's Custodian Agreement;
(2) Selection of Price Waterhouse as the Trust's independent
public accountants for the fiscal year ending November 30, 1997;
(3) Approval of the Amended and Restated Funds' Service Agreement
between The Vanguard Group, Inc. and the member Funds of the
Vanguard Group of Investment Companies;
(4) Authorization of the issuance by the Trust, prior to the
Effective Date of the Reorganization, of one share of the
Treasury Money Market Portfolio of the Trust, to the Fund in
consideration for the payment of $1.00 per share for the purpose
of enabling the Fund to vote on matters referred to in paragraph
(h) of this Section 3;
(5) Submission of the matters referred to in paragraph (h) of
this Section 3 to the U.S. Treasury Portfolio as sole shareholder
of the Trust; and
(6) Authorization of the issuance by the Trust of shares of the
Treasury Money Market Portfolio of the Trust on the Effective
Date of the Reorganization in exchange for the assets of the U.S.
Treasury Portfolio of the Fund pursuant to the terms and
provisions of this Agreement.
At any time prior to the Closing, any of the foregoing conditions may
be waived by the Board of Directors of the Fund if, in the judgment of
the Directors, such waiver will not have a material adverse effect on
the benefits intended under this Agreement to the shareholders of the
U.S. Treasury Portfolio of the Fund.
4. TERMINATION. The Board of Directors of the Fund may terminate this
Agreement and abandon the reorganization contemplated hereby,
notwithstanding approval thereof by the shareholders of the U.S. Treasury
Portfolio of the Fund, at any time prior to the Effective Date of the
Reorganization if, in the judgment of the Directors, the facts and
circumstances make proceeding with the Agreement inadvisable.
5. ENTIRE AGREEMENT. This Agreement embodies the entire agreement between
the parties and there are no agreements, understandings, restric-
18
<PAGE> 21
tions or warranties among the parties other than those set forth herein or
herein provided for.
6. FURTHER ASSURANCES. The Fund and the Trust shall take such further
action as may be necessary or desirable and proper to consummate the
transactions contemplated hereby.
7. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
8. GOVERNING LAW. This Agreement and the transactions contemplated hereby
shall be governed by and construed and enforced in accordance with the laws
of the State of Delaware.
IN WITNESS WHEREOF, the Trust and the Fund have each caused this Agreement
and Plan of Reorganization to be executed on its behalf by its Chairman and
Chief Executive Officer and its seal to be affixed hereto and attested by its
Secretary, all as of the day and year first-above written.
Attest:
By: /s/ Raymond J. Klapinsky VANGUARD MONEY MARKET
---------------------------- RESERVES, INC.
Raymond J. Klapinsky Secretary
By: /s/ John C. Bogle
Attest:
----------------------------
By: /s/ Raymond J. Klapinsky John C. Bogle
Chairman and
---------------------------- Chief Executive Officer
Raymond J. Klapinsky
Secretary VANGUARD TREASURY FUND
By: /s/ John C. Bogle
----------------------------
John C. Bogle
Chairman and
Chief Executive Officer
19
<PAGE> 22
[PRINTED ON RECYCLED PAPER LOGO] X30-9/96
<PAGE> 23
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND
THE EXPENSE OF ADDITIONAL MAILINGS
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned, revoking previous proxies, hereby appoints John C. Bogle,
J. Lawrence Wilson and Raymond J. Klapinsky, or any one or more of them,
attorneys, with full power of substitution, to vote all shares of the Fund
which the undersigned is entitled to vote at the Special Meeting of
Shareholders to be held in the Majestic Building, Room 118A. Vanguard Financial
Center, 100 Vanguard Boulevard, Malvern, PA on November 19, 1996 at 9:30 A.M.,
E.T., and at any adjournments thereof. All powers may be exercised by a
majority of said proxy holders or substitutes voting or acting or, if only one
votes and acts, then by that one. This Proxy shall be voted on the proposal
described in the Proxy Statement as specified on the reverse side. Receipt of
the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
NOTE: Please sign exactly as your name appears on this
Proxy. When signing in a fiduciary capacity, such as
executor, administrator, trustee, attorney, guardian,
etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person
indicating the person's title.
Date________________________________________________
____________________________________________________
____________________________________________________
Signature(s) (and Title(s), if applicable) 030.033.050
Please refer to the Proxy Statement discussion of this matter.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSAL.
As to any other matter, said attorneys shall vote in accordance with their
best judgment. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING
PROPOSAL:
Please indicate your vote by filling in the appropriate
box below, as shown. Using blue or black ink or dark
pencil.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
1. To approve a plan of reorganization of the U.S. Treasury Portfolio of
Vanguard Money Market Reserves, Inc. into a Portfolio (the "Treasury Money
Market Portfolio") of a Delaware trust named Vanguard Treasury Fund.
