VANGUARD EQUITY INCOME FUND INC, 485BPOS, 2000-03-01

VANGUARD EQUITY INCOME FUND INC
485BPOS, 2000-03-01

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT (NO. 33-19446) UNDER THE SECURITIES ACT OF 1933

PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 18

AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

AMENDMENT NO. 20

VANGUARD FENWAY FUNDS
(FORMERLY KNOWN AS VANGUARD EQUITY INCOME FUND)

(EXACT NAME OF REGISTRANT AS SPECIFIED IN DECLARATION OF TRUST)

P.O. BOX 2600, VALLEY FORGE, PA 19482
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)

REGISTRANT'S TELEPHONE NUMBER (610) 669-1000

R. GREGORY BARTON, ESQUIRE
P.O. BOX 876
VALLEY FORGE, PA 19482

IT IS PROPOSED THAT THIS FILING BECOME EFFECTIVE:
IMMEDIATELY, PURSUANT TO PARAGRAPH (B) OF RULE 485.

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.

<PAGE>
VANGUARD EQUITY INCOME FUND
SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION
MARCH 1, 2000

The Board of Trustees has renamed the legal entity through which Vanguard Equity
Income Fund is offered. Previously, this legal entity was known as Vanguard
Equity Income Fund, just like the investment portfolio. Going forward, the legal
entity will be known as Vanguard Fenway Funds. This name change will have no
effect on the investment objectives, policies or management of Vanguard Equity
Income Fund.
<PAGE>

The Vanguard Equity Income Fund Prospectus and Statement of Additional
Information from Post-Effective Amendment # 17, are incorporated by reference.
<PAGE>

PART C

VANGUARD FENWAY FUNDS
---------------------------
OTHER INFORMATION

ITEM 23. EXHIBITS

Exhibit Description
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(a) Declaration of Trust*
(b) By-Laws*
(c) Reference is made to Articles III and V of the Registrant's Declaration
of Trust
(d) Investment Advisory Contracts**
(e) Not applicable
(f) Reference is made to the section entitled "Management of the Funds" in
the Registrant's Statement of Additional Information
(g) Custodian Agreement**
(h) Amended and Restated Funds' Service Agreement**
(i) Legal Opinion**
(j) Consent of Independent Accountants**
(k) Not Applicable
(l) Not Applicable
(m) Not Applicable
(n) Not Applicable
(o) Not Applicable

*Filed herewith
**Filed previously

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Registrant is not controlled by or under common control with any person.

ITEM 25. INDEMNIFICATION

The Registrant's organizational documents contain provisions indemnifying
Trustees and officers against liability incurred in their official capacity.
Article VII, Section 2 of the Declaration of Trust provides that the Registrant
may indemnify and hold harmless each and every Trustee and officer from and
against any and all claims, demands, costs, losses, expenses, and damages
whatsoever arising out of or related to the performance of his or her duties as
a Trustee or officer. However, this provision does not cover any liability to
which a Trustee or officer would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his or her office. Article VI of the By-Laws
generally provides that the Registrant shall indemnify its Trustees and officers
from any liability arising out of their past or present service in that
capacity. Among other things, this provision excludes any liability arising by
reason of willful misfeasance, bad faith, gross negligence, or the reckless
disregard of the duties involved in the conduct of the Trustee's or officer's
office with the Registrant.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

Newell Associates (Newell) is an investment adviser registered under the
Investment Advisers Act of 1940, as amended (the Advisers Act). The list
required by this Item 26 of officers and directors of Newell, together with any
information as to any business profession, vocation, or employment of a
substantial nature engaged in by such officers and directors during the past two
years, is incorporated herein by reference from Schedules B and D of Form ADV
filed by Newell pursuant to the Advisers Act (SEC File No. 801-26949).

C-1
<PAGE>

Spare, Kaplan, Bischel & Associates (Spare Kaplan) is an investment adviser
registered under the Advisers Act. The list required by this Item 26 of officers
and directors of Spare Kaplan, together with any information as to any business
profession, vocation, or employment of a substantial nature engaged in by such
officers and directors during the past two years, is incorporated herein by
reference from Schedules B and D of Form ADV filed by Spare Kaplan pursuant to
the Advisers Act (SEC File No. 801-35258).

John A. Levin & Co., Inc. (Levin) is an investment adviser registered under the
Advisers Act. The list required by this Item 26 of officers and directors of
Levin, together with any information as to any business profession, vocation, or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated herein by reference from Schedules B
and D of Form ADV filed by Levin pursuant to the Advisers Act (SEC File No.
801-18010).

The Vanguard Group, Inc. (Vanguard) is an investment adviser registered under
the Advisers Act. The list required by this Item 26 of officers and directors of
Vanguard, together with any information as to any business profession, vocation,
or employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated herein by reference from Schedules B
and D of Form ADV filed by Vanguard pursuant to the Advisers Act (SEC File No.
801-11953).

Wellington Management Company, LLP (Wellington Management) is an investment
adviser registered under the Advisers Act. The list required by this Item 26 of
officers and partners of Wellington Management, together with any information as
to any business profession, vocation, or employment of substantial nature
engaged in by such officers and partners during the past two years, is
incorporated herein by reference from Schedules B and D of Form ADV filed by
Wellington Management pursuant to the Advisers Act (SEC File No. 801-15908).

ITEM 27. PRINCIPAL UNDERWRITERS

(a) Not Applicable
(b) Not Applicable
(c) Not Applicable

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

The books, accounts, and other documents required to be maintained by Section
31(a) under the 1940 Act and the rules promulgated thereunder will be maintained
at the offices of Registrant; Registrant's Transfer Agent, The Vanguard Group,
Inc., Valley Forge, Pennsylvania 19482; and the Registrant's Custodian, State
Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02105.

ITEM 29. MANAGEMENT SERVICES

Other than as set forth under the description of The Vanguard Group in Part B of
this Registration Statement, the Registrant is not a party to any
management-related service contract.

ITEM 30. UNDERTAKINGS

Not Applicable
C-2
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant hereby certifies that it meets all
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment to this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Valley Forge and the
Commonwealth of Pennsylvania, on the 1st day of March, 2000.

VANGUARD FENWAY FUNDS
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SIGNATURE TITLE DATE
By: ----------------------------President, Chairman, Chief March 1, 2000
/S/ JOHN J. BRENNAN Executive Officer, and
(Heidi Stam) Trustee
John J. Brennan*
By: ----------------------------Trustee March 1, 2000
/S/ JOANN HEFFERNAN HEISEN
(Heidi Stam)
JoAnn Heffernan Heisen*
By: ----------------------------Trustee March 1, 2000
/S/ BRUCE K. MACLAURY
(Heidi Stam)
Bruce K. MacLaury*
By: ----------------------------Trustee March 1, 2000
/S/ ALFRED M. RANKIN, JR.
(Heidi Stam)
Alfred M. Rankin, Jr.*
By: ----------------------------Trustee March 1, 2000
/S/ JOHN C. SAWHILL
(Heidi Stam)
John C. Sawhill*
By: ----------------------------Trustee March 1, 2000
/S/ JAMES O. WELCH, JR.
(Heidi Stam)
James O. Welch, Jr.*
By: ----------------------------Trustee March 1, 2000
/S/ J. LAWRENCE WILSON
(Heidi Stam)
J. Lawrence Wilson*
By: ----------------------------Treasurer and Principal March 1, 2000
/S/ THOMAS J. HIGGINS Financial Officer and
(Heidi Stam) Accounting Officer
Thomas J. Higgins*
</TABLE>

*By Power of Attorney. See File Number 33-4424, filed on January 25, 1999.
Incorporated by Reference.

<PAGE>

INDEX TO EXHIBITS

Declaration of Trust . . . . . . . . . . . . . . . . . .Ex-99.BA
- -------------------- --------

By-Laws . . . . . . . . . . . . . . . . . . . . . . . . Ex-99.BB
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CERTIFICATE OF AMENDMENT

CERTIFICATE OF TRUST

VANGUARD EQUITY INCOME FUND

a Delaware Business Trust

(CHANGING THE NAME OF THE TRUST TO
"VANGUARD FENWAY FUNDS")

THIS Certificate of Amendment to the Certificate of Trust of VANGUARD
EQUITY INCOME FUND (the "Trust"), dated as of this 21st day of February, 2000,
is being duly executed and filed, pursuant to the Delaware Business Trust Act
(the "Act"), Del. Code Ann. tit. 12, "3801-3819.

Paragraph 1 of the Certificate of Trust of VANGUARD EQUITY INCOME FUND,
dated as of January 23, 1998, is hereby amended in its entirety to read as
follows:

1. NAME. The name of the business trust formed hereby is "VANGUARD FENWAY
FUNDS."

IN WITNESS WHEREOF, the Trustee named below does hereby execute this
Certificate of Amendment as of the date first-above written.

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John J. Brennan
<PAGE>

Effective as of
February 22, 2000

AMENDED AND RESTATED

AGREEMENT AND DECLARATION OF TRUST

VANGUARD FENWAY FUNDS

(Formerly VANGUARD EQUITY INCOME FUND)

a Delaware Business Trust

Principal Place of Business:

100 Vanguard Boulevard
Malvern, Pennsylvania 19355

<PAGE>

AGREEMENT AND DECLARATION OF TRUST
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VANGUARD FENWAY FUNDS

WHEREAS, this AGREEMENT AND DECLARATION OF TRUST is made and entered into
as of the date set forth below by the Trustees named hereunder for the purpose
of forming a Delaware business trust in accordance with the provisions
hereinafter set forth,

NOW, THEREFORE, the Trustees hereby direct that a Certificate of Trust be
filed with the Office of the Secretary of State of the State of Delaware and do
hereby declare that the Trustees will hold IN TRUST all cash, securities and
other assets which the Trust now possesses or may hereafter acquire from time to
time in any manner and manage and dispose of the same upon the following terms
and conditions for the pro rata benefit of the holders of Shares in this Trust.

ARTICLE I.

Name and Definitions

Section 1. Name. This trust shall be known as "VANGUARD FENWAY FUNDS" and
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the Trustees shall conduct the business of the Trust under that name or any
other name as they may from time to time determine.

Section 2. Definitions. Whenever used herein, unless otherwise required by
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the context or specifically provided:

(a) The "Trust"(a) The "Trust" refers to the Delaware business trust
established by this Agreement and Declaration of Trust, as amended from time to
time;

(b) The "Trust Property"(b) The "Trust Property" means any and all
property, real or personal, tangible or intangible, which is owned or held by or
for the account of the Trust;

(c) "Trustees"(c) "Trustees" refers to the persons who have signed this
Agreement and Declaration of Trust, so long as they continue in office in
accordance with the terms hereof, and all other persons who may from time to
time be duly elected or appointed to serve on the Board of Trustees in
accordance with the provisions hereof, and reference herein to a Trustee or the
Trustees shall refer to such person or persons in their capacity as trustees
hereunder;

1
<PAGE>

(d) "Shares"(d) "Shares" means the shares of beneficial interest into which
the beneficial interest in the Trust shall be divided from time to time and
includes fractions of Shares as well as whole Shares;

(e) "Shareholder"(e) "Shareholder" means a record owner of outstanding
Shares;

(f) "Person"(f) "Person" means and includes individuals, corporations,
partnerships, trusts, foundations, plans, associations, joint ventures, estates
and other entities, whether or not legal entities, and governments and agencies
and political subdivisions thereof, whether domestic or
foreign;

(g) The "1940 Act"(g) The "1940 Act" refers to the Investment Company Act
of 1940 and the Rules and Regulations thereunder, all as amended from time to
time. References herein to specific sections of the 1940 Act shall be deemed to
include such Rules and Regulations as are applicable to such sections as
determined by the Trustees or their designees;

(h) The terms "Commission" and "Principal Underwriter"(h) The terms
"Commission" and "Principal Underwriter" shall have the respective meanings
given them in Section 2(a)(7) and Section (2)(a)(29) of the 1940 Act;

(i) "Declaration of Trust"(i) "Declaration of Trust" shall mean this
Agreement and Declaration of Trust, as amended or restated from time to time;

(j) "By-Laws"(j) "By-Laws" shall mean the By-Laws of the Trust as amended
from time to time;

(k) The term "Interested Person"(k) The term "Interested Person" has the
meaning given it in Section 2(a)(19) of the 1940 Act;

(l) "Investment Adviser"(l) "Investment Manager" or "Adviser" means a party
furnishing services to the Trust pursuant to any contract described in Article
IV, Section 7(a) hereof;

(m) "Series"(m) "Series" refers to each Series of Shares established and
designated under or in accordance with the provisions of Article III.

ARTICLE II.

Purpose of Trust

The purpose of the Trust is to conduct, operate and carry on the business
of a management investment company registered under the 1940 Act through one or
more Series

2
<PAGE>

investing primarily in securities.

ARTICLE III.

Section 1. Division of Beneficial Interest. The beneficial interest in the
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Trust shall at all times be divided into an unlimited number of Shares, with a
par value of $ .001 per Share. The Trustees may authorize the division of Shares
into separate Series and the division of Series into separate classes of Shares.
The different Series shall be established and designated, and the variations in
the relative rights and preferences as between the different Series shall be
fixed and determined, by the Trustees. If only one Series shall be established,
the Shares shall have the rights and preferences provided for herein and in
Article III, Section 6 hereof to the extent relevant and not otherwise provided
for herein.

Subject to the provisions of Section 6 of this Article III, each Share
shall have voting rights as provided in Article V hereof, and holders of the
Shares of any Series shall be entitled to receive dividends, when, if and as
declared with respect thereto in the manner provided in Article VI, Section 1
hereof. No Share shall have any priority or preference over any other Share of
the same Series with respect to dividends or distributions of the Trust or
otherwise. All dividends and distributions shall be made ratably among all
Shareholders of a Series (or class) from the assets held with respect to such
Series according to the number of Shares of such Series (or class) held of
record by such Shareholders on the record date for any dividend or distribution
or on the date of termination of the Trust, as the case may be. Shareholders
shall have no preemptive or other right to subscribe to any additional Shares or
other securities issued by the Trust or any Series. The Trustees may from time
to time divide or combine the Shares of a Series into a greater or lesser number
of Shares of such Series without thereby materially changing the proportionate
beneficial interest of such Shares in the assets held with respect to that
Series or materially affecting the rights of Shares of any other Series.

Section 2. Ownership of Shares. The ownership of Shares shall be recorded
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on the books of the Trust or a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of each Series. No
certificates evidencing the ownership of Shares shall be issued except as the
Board of Trustees may otherwise determine from time to time. The Trustees may
make such rules as they consider appropriate for the transfer of Shares of each
Series (or class) and similar matters. The record books of the Trust as kept by
the Trust or any transfer or similar agent, as the case may be, shall be

3
<PAGE>

conclusive as to the identity of the Shareholders of each Series and as to the
number of Shares of each Series held from time to time by each Shareholder.

Section 3. Investments in the Trust. Investments may be accepted by the
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Trust from such Persons, at such times, on such terms, and for such
consideration as the Trustees from time to time may authorize. Each investment
shall be credited to the Shareholder's account in the form of full and
fractional Shares of the Trust, in such Series (or class) as the purchaser shall
select, at the net asset value per Share next determined for such Series (or
class) after receipt of the investment; provided, however, that the Trustees
may, in their sole discretion, impose a sales charge or reimbursement fee upon
investments in the Trust.

Section 4. Status of Shares and Limitation of Personal Liability. Shares
---------- --------------------------------------------------------
shall be deemed to be personal property giving only the rights provided in this
instrument and the By-Laws of the Trust. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to the
terms hereof. The death of a Shareholder during the existence of the Trust shall
not operate to terminate the Trust, nor entitle the representative of any
deceased Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but shall entitle such
representative only to the rights of said deceased Shareholder under this
Declaration of Trust. Ownership of Shares shall not entitle a Shareholder to any
title in or to the whole or any part of the Trust Property or right to call for
a partition or division of the same or for an accounting, nor shall the
ownership of Shares constitute the Shareholders as partners or joint venturers.
Neither the Trust nor the Trustees, nor any officer, employee or agent of the
Trust shall have any power to bind personally any Shareholder, or to call upon
any Shareholder for the payment of any sum of money or assessment whatsoever
other than such as the Shareholder may at any time agree to pay.

Section 5. Power of Board of Trustees to Change Provisions
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Relating to Shares. Notwithstanding any other provision of this Declaration of
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Trust to the contrary, and without limiting the power of the Board of Trustees
to amend the Declaration of Trust as provided elsewhere herein, the Board of
Trustees shall have the power to amend this Declaration of Trust, at any time
and from time to time, in such manner as the Board of Trustees may determine in
their sole discretion, without the need for Shareholder action, so as to add to,
delete, replace or otherwise modify any provisions relating to the Shares
contained in this Declaration of Trust, provided that before adopting any such
amendment without Shareholder approval the Board of Trustees shall determine
that it is consistent with the fair and equitable

<PAGE>

treatment of all Shareholders and that Shareholder approval is not required by
the 1940 Act or other applicable law. If Shares have been issued, Shareholder
approval shall be required to adopt any amendments to this Declaration of Trust
which would adversely affect to a material degree the rights and preferences of
the Shares of any Series (or class) or to increase or decrease the par value of
the Shares of any Series (or class).

Section 6. Establishment and Designation of Shares. The establishment and
---------- ----------------------------------------
designation of any Series (or class) of Shares shall be effective upon the
adoption by a majority of the Trustees, of a resolution which sets forth such
establishment and designation and the relative rights and preferences of such
Series (or class). Each such resolution shall be incorporated herein by
reference upon adoption.

Shares of each Series (or class) established pursuant to this Section 6,
unless otherwise provided in the resolution establishing such Series, shall have
the following relative rights and preferences:

(a) Assets Held with Respect to a Particular Series. All consideration
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received by the Trust for the issue or sale of Shares of a Series, including
dividends and distributions paid by, and reinvested in, such Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof from whatever source derived,
including, without limitation, any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably be held with respect to that Series for all purposes, subject only
to the rights of creditors, and shall be so recorded upon the books of account
of the Trust. Such consideration, assets, income, earnings, profits and proceeds
thereof, from whatever source derived, including, without limitation, any
proceeds derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds, in whatever
form the same may be, are herein referred to as "assets held with respect to"
that Series. In the event that there are any assets, income, earnings, profits
and proceeds thereof, funds or payments which are not readily identifiable as
assets held with respect to any particular Series (collectively "General
Assets"), the Trustees shall allocate such General Assets to, between or among
any one or more of the Series in such manner and on such basis as the Trustees,
in their sole discretion, deem fair and equitable, and any General Asset so
allocated to a particular Series shall be held with respect to that Series. Each
such allocation by the Trustees shall be conclusive and binding upon the
Shareholders of all Series for all purposes in absence of manifest error.

<PAGE>

(b) Liabilities Held with Respect to a Particular Series. The assets of the
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Trust held with respect to each Series shall be charged with the liabilities of
the Trust with respect to such Series and all expenses, costs, charges and
reserves attributable to such Series, and any general liabilities of the Trust
which are not readily identifiable as being held in respect of a Series shall be
allocated and charged by the Trustees to and among any one or more Series in
such manner and on such basis as the Trustees in their sole discretion deem fair
and equitable. The liabilities, expenses, costs, charges, and reserves so
charged to a Series are herein referred to as "liabilities held with respect to"
that Series. Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon the holders of all
Series for all purposes in absence of manifest error. All Persons who have
extended credit which has been allocated to a particular Series, or who have a
claim or contract which has been allocated to a Series, shall look exclusively
to the assets held with respect to such Series for payment of such credit,
claim, or contract. In the absence of an express agreement so limiting the
claims of such creditors, claimants and contracting parties, each creditor,
claimant and contracting party shall be deemed nevertheless to have agreed to
such limitation unless an express provision to the contrary has been
incorporated in the written contract or other document establishing the
contractual relationship.

(c) Dividends, Distributions, Redemptions, and Repurchases. No dividend or
-------------------------------------------------------
distribution including, without limitation, any distribution paid upon
termination of the Trust or of any Series (or class) with respect to, or any
redemption or repurchase of, the Shares of any Series (or class) shall be
effected by the Trust other than from the assets held with respect to such
Series, nor shall any Shareholder of any Series otherwise have any right or
claim against the assets held with respect to any other Series except to the
extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series. The Trustees shall have full discretion to
determine which items shall be treated as income and which items as capital; and
each such determination and allocation shall be conclusive and binding upon the
Shareholders in absence of manifest error.

(d) Voting. All Shares of the Trust entitled to vote on a matter shall vote
-------
without differentiation between the separate Series on a one-vote-per-each
dollar (and a fractional vote for each fractional dollar) of the net asset value
of each share (including fractional shares) basis; provided however, if a matter
to be voted on affects only the interests of not all Series (or class of a
Series), then only the Shareholders of such affected Series (or class) shall be
entitled to vote on the

<PAGE>

matter.

(e) Equality. All the Shares of each Series shall represent an equal
---------
proportionate undivided interest in the assets held with respect to such Series
(subject to the liabilities of such Series and such rights and preferences as
may have been established and designated with respect to classes of Shares
within such Series), and each Share of a Series shall be equal to each other
Share of such Series.

(f) Fractions. Any fractional Share of a Series shall have proportionately
---------
all the rights and obligations of a whole share of such Series, including rights
with respect to voting, receipt of dividends and distributions and redemption of
Shares.

(g) Exchange Privilege. The Trustees shall have the authority to provide
-------------------
that the holders of Shares of any Series shall have the right to exchange such
Shares for Shares of one or more other Series in accordance with such
requirements and procedures as may be established by the Trustees.

(h) Combination of Series. The Trustees shall have the authority, without
---------------------
the approval of the Shareholders of any Series unless otherwise required by
applicable law, to combine the assets and liabilities held with respect to any
two or more Series into assets and liabilities held with respect to a single
Series.

(i) Elimination of Series. At any time that there are no Shares outstanding
---------------------
of a Series (or class), the Trustees may abolish such Series (or class).

ARTICLE IV.

The Board of Trustees

Section 1. Number, Election and Tenure. The number of Trustees constituting
--------- ----------------------------
the Board of Trustees shall be fixed from time to time by a written instrument
signed, or by resolution approved at a duly constituted meeting, by a majority
of the Board of Trustees, provided, however, that the number of Trustees shall
in no event be less than one (1) nor more than fifteen (15). Subject to the
requirements of Section 16(a) of the 1940 Act, the Board of Trustees, by action
of a majority of the then Trustees at a duly constituted meeting, may fill
vacancies in the Board of Trustees and remove Trustees with or without cause.
Each Trustee shall serve during the continued lifetime of the Trust until he or
she dies, resigns, is declared bankrupt or incompetent by a court of competent
jurisdiction, or is removed. Any Trustee may resign at any time by written
instrument signed by him and delivered to any officer of the Trust or to a
meeting

7
<PAGE>

of the Trustees. Such resignation shall be effective upon receipt unless
specified to be effective at some other time. Except to the extent expressly
provided in a written agreement with the Trust, no Trustee resigning and no
Trustee removed shall have any right to any compensation for any period
following his or her resignation or removal, or any right to damages or other
payment on account of such removal. Any Trustee may be removed at any meeting of
Shareholders by a vote of two-thirds of the total combined net asset value of
all Shares of the Trust issued and outstanding. A meeting of Shareholders for
the purpose of electing or removing one or more Trustees may be called (i) by
the Trustees upon their own vote, or (ii) upon the demand of Shareholders owning
10% or more of the Shares of the Trust in the aggregate.

Section 2. Effect of Death, Resignation, etc. of a Trustee. The death,
---------- ---------------------------------------------------
declination, resignation, retirement, removal, or incapacity of one or more
Trustees, or all of them, shall not operate to annul the Trust or to revoke any
existing agency created pursuant to the terms of this Declaration of Trust.
Whenever a vacancy in the Board of Trustees shall occur, until such vacancy is
filled as provided in Article IV, Section 1, the Trustees in office, regardless
of their number, shall have all the powers granted to the Trustees and shall
discharge all the duties imposed upon the Trustees by this Declaration of Trust.

Section 3. Powers. Subject to the provisions of this Declaration of Trust,
------------------
the business of the Trust shall be managed by the Board of Trustees, and such
Board shall have all powers necessary or convenient to carry out that
responsibility including the power to engage in transactions of all kinds on
behalf of the Trust. Trustees, in all instances, shall act as principals and are
and shall be free from the control of the Shareholders. The Trustees shall have
full power and authority to do any and all acts and to make and execute any and
all contracts, documents and instruments that they may consider desirable,
necessary or appropriate in connection with the administration of the Trust.
Without limiting the foregoing, the Trustees may: adopt, amend and repeal
By-Laws not inconsistent with this Declaration of Trust providing for the
regulation and management of the affairs of the Trust; elect and remove such
officers and appoint and terminate such agents as they consider appropriate;
appoint from their own number and establish and terminate one or more committees
consisting of two or more Trustees who may exercise the powers and authority of
the Board of Trustees to the extent that the Trustees determine; employ one or
more custodians of the assets of the Trust and may authorize such custodians to
employ subcustodians and to deposit all or any part of such assets in a system
or systems for the central handling of securities or with a Federal Reserve
Bank, retain a

8
<PAGE>

transfer agent or a shareholder servicing agent, or both; provide for the
issuance and distribution of Shares by the Trust directly or through one or more
Principal Underwriters or otherwise; redeem, repurchase and transfer Shares
pursuant to applicable law; set record dates for the determination of
Shareholders with respect to various matters; declare and pay dividends and
distributions to Shareholders of each Series from the assets of such Series;
establish from time to time, in accordance with the provisions of Article III,
Section 6 hereof, any Series of Shares, each such Series to operate as a
separate and distinct investment medium and with separately defined investment
objectives and policies and distinct investment purpose; and in general delegate
such authority as they consider desirable to any officer of the Trust, to any
committee of the Trustees and to any agent or employee of the Trust or to any
such custodian, transfer or shareholder servicing agent, Investment Manager or
Principal Underwriter. Any determination as to what is in the interests of the
Trust made by the Trustees in good faith shall be conclusive. In construing the
provisions of this Declaration of Trust, the presumption shall be in favor of a
grant of power to the Trustees and unless otherwise specified herein or required
by the 1940 Act or other applicable law, any action by the Board of Trustees
shall be deemed effective if approved or taken by a majority of the Trustees
then in office or a majority of any duly constituted committee of Trustees. Any
action required or permitted to be taken at any meeting of the Board of
Trustees, or any committee thereof, may be taken without a meeting if all
members of the Board of Trustees or committee (as the case may be) consent
thereto in writing, and the writing or writings are filed with the minutes of
the proceedings of the Board of Trustees, or committee, except as otherwise
provided in the 1940 Act.

Without limiting the foregoing, the Trust shall have power and authority:

(a) To invest and reinvest cash and cash items, to hold cash uninvested,
and to subscribe for, invest in, reinvest in, purchase or otherwise acquire,
own, hold, pledge, sell, assign, transfer, exchange, distribute, write options
on, lend or otherwise deal in or dispose of contracts for the future acquisition
or delivery of all types of securities, futures contracts and options thereon,
and forward currency contracts of every nature and kind, including, without
limitation, all types of bonds, debentures, stocks, preferred stocks, negotiable
or non-negotiable instruments, obligations, evidences of indebtedness,
certificates of deposit or indebtedness, commercial paper, repurchase
agreements, bankers' acceptances, and other securities of any kind, issued,
created, guaranteed, or sponsored by any and all Persons, including, without
limitation, states, territories, and possessions of the United States and the
District of Columbia and any political subdivision, agency, or

9
<PAGE>

instrumentality thereof, any foreign government or any political subdivision of
the U.S. Government or any foreign government, or any international
instrumentality or organization, or by any bank or savings institution, or by
any corporation or organization organized under the laws of the United States or
of any state, territory, or possession thereof, or by any corporation or
organization organized under any foreign law, or in "when issued" contracts for
any such securities, futures contracts and options thereon, and forward currency
contracts, to change the investments of the assets of the Trust; and to exercise
any and all rights, powers, and privileges of ownership or interest in respect
of any and all such investments of every kind and description, including,
without limitation, the right to consent and otherwise act with respect thereto,
with power to designate one or more Persons, to exercise any of said rights,
powers, and privileges in respect of any of said instruments;

(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, or write
options with respect to or otherwise deal in any property rights relating to any
or all of the assets of the Trust or any Series;

(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;

(d) To exercise powers and right of subscription or otherwise which in any
manner arise out of ownership of securities;

(e) To hold any security or property in a form not indicating that it is
trust property, whether in bearer, unregistered or other negotiable form, or in
its own name or in the name of a custodian or subcustodian or a nominee or
nominees or otherwise or to authorize the custodian or a subcustodian or a
nominee or nominees to deposit the same in a securities depository, subject in
each case to the applicable provisions of the 1940 Act;

(f) To consent to, or participate in, any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which is
held in the Trust; to consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or issuer; and to pay calls or subscriptions
with respect to any security held in the Trust;

(g) To join with other security holders in acting through a committee,
depository, voting trustee or otherwise, and

10
<PAGE>

in that connection to deposit any security with, or transfer any security to,
any such committee, depository or trustee, and to delegate to them such power
and authority with relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to pay,
such portion of the expenses and compensation of such committee, depository or
trustee as the Trustees shall deem proper;

(h) To litigate, compromise, arbitrate, settle or otherwise adjust claims
in favor of or against the Trust or a Series, or any matter in controversy,
including but not limited to claims for taxes;

(i) To enter into joint ventures, general or limited partnerships and any
other combinations or associations;

(j) To borrow funds or other property in the name of the Trust or Series
exclusively for Trust purposes;

(k) To endorse or guarantee the payment of any notes or other obligations
of any Person; to make contracts of guaranty or suretyship, or otherwise assume
liability for payment thereof;

(l) To purchase and pay for entirely out of Trust Property such insurance
as the Trustees may deem necessary, desirable or appropriate for the conduct of
the business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, Investment Manager, principal underwriters, or
independent contractors of the Trust, individually against all claims and
liabilities of every nature arising by reason of holding Shares, holding, being
or having held any such office or position, or by reason of any action alleged
to have been taken or omitted by any such Person as Trustee, officer, employee,
agent, Investment Manager, Principal Underwriter, or independent contractor,
including any action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to indemnify such
Person against liability; and

(m) To adopt, establish and carry out pension, profit-sharing, share bonus,
share purchase, savings, thrift and other retirement, incentive and benefit
plans, trusts and provisions, including the purchasing of life insurance and
annuity contracts as a means of providing such retirement and other benefits,
for any or all of the Trustees, officers, employees and agents of the Trust.

The Trust shall not be limited to investing in obligations maturing before
the possible termination of the Trust

<PAGE>

or one or more of its Series. The Trust shall not in any way be bound or limited
by any present or future law or custom in regard to investment by fiduciaries.
The Trust shall not be required to obtain any court order to deal with any
assets of the Trust or take any other action hereunder.

Section 4. Payment of Expenses by the Trust. Subject to the provisions of
--------- ---------------------------------
Article III, Section 6(b), the Trustees are authorized to pay or cause to be
paid out of the principal or income of the Trust or Series, or partly out of the
principal and partly out of income, and to charge or allocate the same to,
between or among such one or more of the Series that may be established or
designated pursuant to Article III, Section 6, all expenses, fees, charges,
taxes and liabilities incurred or arising in connection with the Trust or
Series, or in connection with the management thereof, including, but not limited
to, the Trustees' compensation and such expenses and charges for the services of
the Trust's officers, employees, Investment Manager^, Principal Underwriter,
auditors, counsel, custodian, transfer agent, Shareholder servicing agent, and
such other agents or independent contractors and such other expenses and charges
as the Trustees may deem necessary or proper to incur.

Section 5. Ownership of Assets of the Trust. Title to all of the assets of
--------- ---------------------------------
the Trust shall at all times be considered as vested in the Trust, except that
the Trustees shall have power to cause legal title to any Trust Property to be
held by or in the name of one or more of the Trustees, or in the name of the
Trust, or in the name of any other Person as nominee, on such terms as the
Trustees may determine. Upon the resignation, incompetency, bankruptcy, removal,
or death of a Trustee he or she shall automatically cease to have any such title
in any of the Trust Property, and the title of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered. The Trustees may determine that the Trust or the
Trustees, acting for and on behalf of the Trust, shall be deemed to hold
beneficial ownership of any income earned on the securities owned by the Trust,
whether domestic or foreign.

Section 6. Service Contracts. (a) The Trustees may, at any time and from
--------- -------------------
time to time, contract for exclusive or nonexclusive advisory, management and/or
administrative services for the Trust or for any Series with any Person; and any
such contract may contain such other terms as the Trustees may determine,
including without limitation, authority for the Investment Adviser to determine
from time to time without prior consultation with the Trustees what investments
shall be purchased, held, sold or exchanged and

12
<PAGE>

what portion, if any, of the assets of the Trust shall be held uninvested and to
make changes in the Trust's investments, and such other responsibilities as may
specifically be delegated to such Person.

(b) The Trustees may also, at any time and from time to time, contract with
any Persons, appointing such Persons exclusive or nonexclusive distributor or
Principal Underwriter for the Shares of one or more of the Series or other
securities to be issued by the Trust. Every such contract may contain such other
terms as the Trustees may determine.

(c) The Trustees are also empowered, at any time and from time to time, to
contract with any Persons, appointing such Person(s) to serve as custodian(s),
transfer agent and/or shareholder servicing agent for the Trust or one or more
of its Series. Every such contract shall comply with such terms as may be
required by the Trustees.

(d) The Trustees are further empowered, at any time and from time to time,
to contract with any Persons to provide such other services to the Trust or one
or more of the Series, as the Trustees determine to be in the best interests of
the Trust and the applicable Series.

(e) The fact that:

(i) any of the Shareholders, Trustees, or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, Manager,
adviser, Principal Underwriter, distributor, or affiliate or agent of or
for any Person with which an advisory, management or administration
contract, or Principal Underwriter's or distributor's contract, or
transfer, shareholder servicing or other type of service contract may be
made, or that

(ii) any Person with which an advisory, management or administration
contract or Principal Underwriter's or distributor's contract, or transfer,
shareholder servicing or other type of service contract may be made also
has an advisory, management or administration contract, or principal
underwriter's or distributor's contract, or transfer, shareholder servicing
or other service contract, or has other business or interests with any
other Person,

shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same, or create any liability or accountability to the Trust or its
Shareholders, provided approval of each such

13
<PAGE>

contract is made pursuant to the applicable requirements of the 1940 Act.

ARTICLE V.

Shareholders' Voting Powers and Meetings

Section 1. Voting Powers. Subject to the provisions of Article III,
---------- ---------------
Sections 5 and 6(d), the Shareholders shall have right to vote only (i) for the
election or removal of Trustees as provided in Article IV, Section 1, and (ii)
with respect to such additional matters relating to the Trust as may be required
by the applicable provisions of the 1940 Act, including Section 16(a) thereof,
and (iii) on such other matters as the Trustees may consider necessary or
desirable. Each shareholder shall have one vote for each dollar (and a
fractional vote for each fractional dollar) of the net asset value of each share
(including fractional shares) held by such shareholder on the record date on
each matter submitted to a vote at a meeting of shareholders. For purposes of
this section, net asset value shall be determined pursuant to Section 3 of
Article VIII of the Trustee's Bylaws as of the record date for such meeting set
pursuant to Section 5 of such Bylaws. There shall be no cumulative voting in the
election of Trustees. Votes may be made in person or by proxy. A proxy
purporting to be executed by or on behalf of a Shareholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving
invalidity shall rest on the challenger.

Section 2. Voting Power and Meetings. Meetings of the Shareholders may be
---------- -------------------------
called by the Trustees for the purposes described in Section 1 of this Article
V. A meeting of Shareholders may be held at any place designated by the
Trustees. Written notice of any meeting of Shareholders shall be given or caused
to be given by the Trustees by delivering personally or mailing such notice not
more than ninety (90), nor less than ten (10) days before such meeting, postage
prepaid, stating the time and place of the meeting, to each Shareholder at the
Shareholder's address as it appears on the records of the Trust. Whenever notice
of a meeting is required to be given to a Shareholder under this Declaration of
Trust, a written waiver thereof, executed before or after the meeting by such
Shareholder or his or her attorney thereunto authorized and filed with the
records of the meeting, or actual attendance at the meeting of Shareholders in
person or by proxy, shall be deemed equivalent to such notice.

Section 3. Quorum and Required Vote. Except as otherwise provided by the
---------- -------------------------
Investment Company Act of 1940 or in the Trust's Declaration of Trust, at any
meeting of shareholders, the presence in person or by proxy of the holders of
record of

<PAGE>

Shares issued and outstanding and entitled to vote representing more than fifty
percent of the total combined net asset value of all Shares issued and
outstanding and entitled to vote shall constitute a quorum for the transaction
of any business at the meeting. Any meeting of Shareholders may be adjourned
from time to time by a majority of the votes properly cast upon the question of
adjourning a meeting to another date and time, whether or not a quorum is
present, and the meeting may be held as adjourned within a reasonable time after
the date set for the original meeting without further notice. Subject to the
provisions of Article III, Section 6(d) and the applicable provisions of the
1940 Act, when a quorum is present at any meeting, a majority vote of the
combined net asset value of all shares issued outstanding and shall decide any
questions except only a plurality vote shall be necessary to elect Trustees.

Section 4. Action by Written Consent. Any action taken by Shareholders may
---------- --------------------------
be taken without a meeting if all the holders of Shares entitled to vote on the
matter are provided with not less than 7 days written notice thereof and written
consent to the action is filed with the records of the meetings of Shareholders
by the holders of the number of votes that would be required to approve the
matter as provided in Article V, Section 3. Such consent shall be treated for
all purposes as a vote taken at a meeting of Shareholders.

Section 5. Record Dates. For the purpose of determining the Shareholders
--------- -------------
who are entitled to vote or act at any meeting or any adjournment thereof, the
Trustees may fix a time, which shall be not more than ninety (90) nor less than
ten (10) days before the date of any meeting of Shareholders, as the record date
for determining the Shareholders having the right to notice of and to vote at
such meeting and any adjournment thereof, and in such case only Shareholders of
record on such record date shall have such right, notwithstanding any transfer
of shares on the books of the Trust after the record date. For the purpose of
determining the Shareholders who are entitled to receive payment of any dividend
or of any other distribution, the Trustees may fix a date, which shall be before
the date for the payment of such dividend or distribution, as the record date
for determining the Shareholders having the right to receive such dividend or
distribution. Nothing in this Section shall be construed as precluding the
Trustees from setting different record dates for different Series.

ARTICLE VI.

Net Asset Value, Distributions, and Redemptions

Section 1. Determination of Net Asset Value, Net Income, and Distributions.
---------- ----------------------------------------------------------------
Subject to Article III, Section 6

15
<PAGE>

hereof, the Trustees, in their absolute discretion, may prescribe and shall set
forth in the By-laws or in a duly adopted resolution of the Trustees such bases
and time for determining the per Share net asset value of the Shares of any
Series and the declaration and payment of dividends and distributions on the
Shares of any Series, as they may deem necessary or desirable.

Section 2. Redemptions and Repurchases. The Trust shall purchase such
---------- -----------------------------
Shares as are offered by any Shareholder for redemption, upon receipt by the
Trust or a Person designated by the Trust that the Trust redeem such Shares or
in accordance with such procedures for redemption as the Trustees may from time
to time authorize; and the Trust will pay therefor the net asset value thereof,
in accordance with the By-Laws and the applicable provisions of the 1940 Act.
Payment for said Shares shall be made by the Trust to the Shareholder within
seven days after the date on which the request for redemption is received in
proper form. The obligation set forth in this Section 2 is subject to the
provision that in the event that any time the New York Stock Exchange (the
"Exchange") is closed for other than weekends or holidays, or if permitted by
the Rules of the Commission during periods when trading on the Exchange is
restricted or during any emergency which makes it impracticable for the Trust to
dispose of the investments of the applicable Series or to determine fairly the
value of the net assets held with respect to such Series or during any other
period permitted by order of the Commission for the protection of investors,
such obligations may be suspended or postponed by the Trustees.

The redemption price may in any case or cases be paid in cash or wholly or
partly in kind in accordance with Rule 18f-1 under the 1940 Act if the Trustees
determine that such payment is advisable in the interest of the remaining
Shareholders of the Series of which the Shares are being redeemed. Subject to
the foregoing, the selection and quantity of securities or other property so
paid or delivered as all or part of the redemption price shall be determined by
or under authority of the Trustees. In no case shall the Trust be liable for any
delay of any corporation or other Person in transferring securities selected for
delivery as all or part of any payment in kind.

Section 3. Redemptions at the Option of the Trust. The Trust shall have the
---------- --------------------------------------
right, at its option, upon 30 days notice to the affected Shareholder at any
time to redeem Shares of any Shareholder at the net asset value thereof as
described in Section 1 of this Article VI: (i) if at such time such Shareholder
owns Shares of any Series having an aggregate net asset value of less than a
minimum value determined from time to time by the Trustees; or (ii) to the
extent that such Shareholder owns Shares of a Series equal to or in excess of a
maximum percentage of the outstanding Shares of such Series determined

<PAGE>

from time to time by the Trustees; or (iii) to the extent that such Shareholder
owns Shares equal to or in excess of a maximum percentage, determined from time
to time by the Trustees, of the outstanding Shares of the Trust.

Section 4. Transfer of Shares. The Trust shall transfer shares held of
---------- --------------------
record by any Person to any other Person upon receipt by the Trust or a Person
designated by the Trust of a written request therefore in such form and pursuant
to such procedures as may be approved by the Trustees.

ARTICLE VII.

Compensation and Limitation of Liability

Section 1. Compensation of Trustees. The Trustees as such shall be entitled
---------- -------------------------
to reasonable compensation from the Trust, and they may fix the amount of such
compensation from time to time. Nothing herein shall in any way prevent the
employment of any Trustee to provide advisory, management, legal, accounting,
investment banking or other services to the Trust and to be specially
compensated for such services by the Trust.

Section 2. Indemnification and Limitation of Liability. The Trustees shall
---------- --------------------------------------------
not be responsible or liable in any event for any neglect or wrong-doing 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,
and, subject to the provisions of the Bylaws, the Trust out of its assets may
indemnify and hold harmless each and every Trustee and officer of the Trust from
and against any and all claims, demands, costs, losses, expenses, and damages
whatsoever arising out of or related to such Trustee's performance of his or her
duties as a Trustee or officer of the Trust; provided that nothing herein
contained shall indemnify, hold harmless or protect any Trustee or officer from
or against any liability to the Trust or any Shareholder to which he or she
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office.

Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever issued, executed or done by or on behalf of
the Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been issued, executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon.

Section 3. Trustee's Good Faith Action, Expert Advice,
---------- -------------------------------------------

17
<PAGE>

No Bond or Surety. The exercise by the Trustees of their powers hereunder shall
- ------------------
be binding upon everyone interested in or dealing with the Trust. A Trustee
shall be liable to the Trust and to any Shareholder solely for his or her own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, and shall not be liable
for errors of judgment or mistakes of fact or law. The Trustees may take advice
of counsel or other experts with respect to the meaning and operation of this
Declaration of Trust, and shall be under no liability for any act or omission in
accordance with such advice nor for failing to follow such advice. The Trustees
shall not be required to give any bond as such, nor any surety if a bond is
required.

Section 4. Insurance. The Trustees shall be entitled and empowered to the
---------- ----------
fullest extent permitted by law to purchase with Trust assets insurance for
liability and for all expenses reasonably incurred or paid or expected to be
paid by a Trustee or officer in connection with any claim, action, suit or
proceeding in which he or she becomes involved by virtue of his or her capacity
or former capacity with the Trust, whether or not the Trust would have the power
to indemnify him or her against such liability under the provisions of this
Article.

ARTICLE VIII.

Miscellaneous

Section 1. Liability of Third Persons Dealing with Trustees. No Person
---------- ----------------------------------------------------
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.

Section 2. Termination of Trust or Series. Unless terminated as provided
---------- -------------------------------
herein, the Trust shall continue without limitation of time. The Trust may be
terminated at any time by the Trustees upon 60 days prior written notice to the
Shareholders. Any Series may be terminated at any time by the Trustees upon 60
days prior written notice to the Shareholders of that Series.

Upon termination of the Trust (or any Series, as the case may be), after
paying or otherwise providing for all charges, taxes, expenses and liabilities
held, severally, with respect to each Series (or the applicable Series, as the
case may be), whether due or accrued or anticipated as may be determined by the
Trustees, the Trust shall, in accordance with such procedures as the Trustees
consider appropriate, reduce the

18
<PAGE>

remaining assets held, severally, with respect to each Series (or the applicable
Series, as the case may be), to distributable form in cash or shares or other
securities, and any combination thereof, and distribute the proceeds held with
respect to each Series (or the applicable Series, as the case may be), to the
Shareholders of that Series, as a Series, ratably according to the number of
Shares of that Series held by the several Shareholders on the date of
termination.

Section 3. Merger and Consolidation. The Trustees may cause (i) the Trust
---------- --------------------------
or one or more of its Series to the extent consistent with applicable law to be
merged into or consolidated with another Trust, series or Person, (ii) the
Shares of the Trust or any Series to be converted into beneficial interests in
another business trust (or series thereof), (iii) the Shares to be exchanged for
assets or property under or pursuant to any state or federal statute to the
extent permitted by law or (iv) a sale of assets of the Trust or one or more of
its Series. Such merger or consolidation, Share conversion, Share exchange or
sale of assets must be authorized by vote as provided in Article V, Section 3
herein; provided that in all respects not governed by statute or applicable law,
the Trustees shall have power to prescribe the procedure necessary or
appropriate to accomplish a sale of assets, Share exchange, merger or
consolidation including the power to create one or more separate business trusts
to which all or any part of the assets, liabilities, profits or losses of the
Trust may be transferred and to provide for the conversion of Shares of the
Trust or any Series into beneficial interests in such separate business trust or
trusts (or series thereof).

Section 4. Amendments. This Declaration of Trust may be restated and/or
---------- -----------
amended at any time by an instrument in writing signed by a majority of the
Trustees then holding office. Any such restatement and/or amendment hereto shall
be effective immediately upon execution and approval. The Certificate of Trust
of the Trust may be restated and/or amended by a similar procedure, and any such
restatement and/or amendment shall be effective immediately upon filing with the
Office of the Secretary of State of the State of Delaware or upon such future
date as may be stated therein.

Section 5. Filing of Copies, References, Headings. The original or a copy
---------- -----------------------------------------
of this instrument and of each restatement and/or amendment hereto shall be kept
at the office of the Trust where it may be inspected by any Shareholder. Anyone
dealing with the Trust may rely on a certificate by an officer of the Trust as
to whether or not any such restatements and/or amendments have been made and as
to any matters in connection with the Trust hereunder; and, with the same effect
as if it were the original, may rely on a copy certified by an officer of the
Trust to be a copy of this instrument or of any such restatements

19
<PAGE>

and/or amendments. In this instrument and in any such restatements and/or
amendment, references to this instrument, and all expressions like "herein,"
"hereof" and "hereunder," shall be deemed to refer to this instrument as amended
or affected by any such restatements and/or amendments. Headings are placed
herein for convenience of reference only and shall not be taken as a part hereof
or control or affect the meaning, construction or effect of this instrument.
Whenever the singular number is used herein, the same shall include the plural;
and the neuter, masculine and feminine genders shall include each other, as
applicable. This instrument may be executed in any number of counterparts each
of which shall be deemed an original.

Section 6. Applicable Law. This Agreement and Declaration of Trust is
---------- ----------------
created under and is to be governed by and construed and administered according
to the laws of the State of Delaware and the Delaware Business Trust Act, as
amended from time to time (the "Act"). The Trust shall be a Delaware business
trust pursuant to such Act, and without limiting the provisions hereof, the
Trust may exercise all powers which are ordinarily exercised by such a business
trust.

Section 7. Provisions in Conflict with Law or Regulations.
---------- ----------------------------------------------

(a) The provisions of the Declaration of Trust are severable, and if the
Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of the Declaration of Trust; provided, however, that such determination
shall not affect any of the remaining provisions of the Declaration of Trust or
render invalid or improper any action taken or omitted prior to such
determination.

(b) If any provision of the Declaration of Trust shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of the
Declaration of Trust in any jurisdiction.

Section 8. Business Trust Only. It is the intention of the Trustees to
---------- ---------------------
create a business trust pursuant to the Act, and thereby to create only the
relationship of trustee and beneficial owners within the meaning of such Act
between the Trustees and each Shareholder. It is not the intention of the
Trustees to create a general partnership, limited partnership, joint stock
association, corporation, bailment, joint venture, or

20
<PAGE>

any form of legal relationship other than a business trust pursuant to such Act.
Nothing in this Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or members of
a joint stock association.

Section 9. Use of the Name "The Vanguard Group, Inc.". The name "The
------- -------------------------------------------------
Vanguard Group, Inc." and any variants thereof and all rights to the use of the
name "The Vanguard Group, Inc." or any variants thereof shall be the sole and
exclusive property of The Vanguard Group, Inc. ("VGI"). VGI has permitted the
use by the Trust of the identifying word "Vanguard" and the use of the name
"Vanguard" as part of the name of the Trust and the name of any Series of
Shares. Upon the Trust's withdrawal from the Amended and Restated Funds' Service
Agreement among the Trust, the other investment companies within the Vanguard
Group of Investment Companies and VGI, and upon the written request of VGI, the
Trust and any Series of Shares thereof shall cease to use or in any way to refer
to itself as related to "The Vanguard Group, Inc." or any variant thereof.

<PAGE>

IN WITNESS WHEREOF, the Trustees named below do hereby make
and enter into this Amended and Restated Declaration of Trust as of the 22nd day
of February, 2000.

/s/ John J. Brennan /s/ Alfred M. Rankin, Jr.
- ---------------------- -----------------------------
John J. Brennan Alfred M. Rankin, Jr.

/s/JoAnn Heffernan Heisen /s/ John C. Sawhill
- ------------------------- -------------------
JoAnn Heffernan Heisen John C. Sawhill

/s/ Bruce K. MacLaury /s/ James O. Welch, Jr.
- --------------------- -----------------------
Bruce K. MacLaury James O. Welch, Jr.

/s/ J. Lawrence Wilson
----------------------
J. Lawrence Wilson

THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS

100 Vanguard Boulevard
Malvern, PA 19355

<PAGE>

TABLE OF CONTENTS

Page

<S> <C>
ARTICLE I. Name and Definitions.....................................................................................1
Section 1. Name......................................................................................1
Section 2. Definitions...............................................................................1
(a) The Trust..........................................................................................1
(b) Trust Property.....................................................................................1
(c) Trustees...........................................................................................1
(d) Shares.............................................................................................2
(e) Shareholder........................................................................................2
(f) Person.............................................................................................2
(g) 1940 Act...........................................................................................2
(h) Commission and Principal Underwriter...............................................................2
(i) Declaration of Trust...............................................................................2
(j) By-Laws............................................................................................2
(k) Interested Person..................................................................................2
(l) Investment Adviser.................................................................................2
(m) Series.............................................................................................2

ARTICLE II. Purpose of Trust........................................................................................2

ARTICLE III. Shares.................................................................................................3
Section 1. Division of Beneficial Interest...........................................................3
Section 2. Ownership of Shares.......................................................................3
Section 3. Investments in the Trust..................................................................4
Section 4. Status of Shares and Limitation of Personal
Liability.................................................................................4
Section 5. Power of Board of Trustees to Change
Provisions Relating to Shares.............................................................4
Section 6. Establishment and Designation of Shares...................................................5
(a) Assets Held with Respect to a Particular Series....................................................5
(b) Liabilities Held with Respect to a
Particular Series..................................................................................6
(c) Dividends, Distributions, Redemptions, and
Repurchases........................................................................................6
(d) Voting.............................................................................................6
(e) Equality...........................................................................................7
(f) Fractions..........................................................................................7
(g) Exchange Privilege.................................................................................7
(h) Combination of Series..............................................................................7
(i) Elimination of Series..............................................................................7

ARTICLE IV. The Board of Trustees...................................................................................7
Section 1. Number, Election and Tenure...............................................................7
Section 2. Effect of Death, Resignation, etc.
of a Trustee..............................................................................8
Section 3. Powers....................................................................................8
Section 4. Payment of Expenses by the Trust.........................................................12
Section 5. Ownership of Assets of the Trust.........................................................12
</TABLE>
(i)

<S> <C>
Section 6. Service Contracts........................................................................12

ARTICLE V. Shareholders' Voting Powers and Meetings................................................................14
Section 1. Voting Powers............................................................................14
Section 2. Voting Power and Meetings................................................................14
Section 3. Quorum and Required Vote.................................................................14
Section 4. Action by Written Consent................................................................15
Section 5. Record Dates.............................................................................15

ARTICLE VI. Net Asset Value, Distributions, and Redemptions........................................................15
Section 1. Determination of Net Asset Value, Net
Income, and Distributions................................................................15
Section 2. Redemptions and Repurchases..............................................................16
Section 3. Redemptions at the Option of the Trust...................................................16
Section 4. Transfer of Shares.......................................................................17

ARTICLE VII. Compensation and Limitation of Liability..............................................................17
Section 1. Compensation of Trustees.................................................................17
Section 2. Indemnification and Limitation of Liability..............................................17
Section 3. Trustee's Good Faith Action, Expert
Advice, No Bond or Surety................................................................17
Section 4. Insurance................................................................................18

ARTICLE VIII. Miscellaneous........................................................................................18
Section 1. Liability of Third Persons Dealing
with Trustees............................................................................18
Section 2. Termination of Trust or Series...........................................................18
Section 3. Merger and Consolidation.................................................................19
Section 4. Amendments...............................................................................19
Section 5. Filing of Copies, References, Headings...................................................19
Section 6. Applicable Law...........................................................................20
Section 7. Provisions in Conflict with Law or Regulations...........................................20
Section 8. Business Trust Only......................................................................20
Section 9. Use of the Name "The Vanguard Group, Inc."...............................................21
</TABLE>
(ii)

EFFECTIVE AS OF
FEBRUARY 22, 2000

AMENDED AND RESTATED

BY-LAWS

VANGUARD FENWAY FUNDS
(FORMERLY VANGUARD EQUITY INCOME FUND)

ARTICLE I

FISCAL YEAR AND OFFICES

SECTION 1. FISCAL YEAR. Unless otherwise provided by resolution of the
Board of Trustees, the fiscal year of the Trust shall begin on the 1st day of
October and end on the last day of September.

SECTION 2. DELAWARE OFFICE. The Board of Trustees shall establish a
registered office in the State of Delaware and shall appoint as the Trust's
registered agent for service of process in the State of Delaware an individual
resident of the State of Delaware or a Delaware corporation or a foreign
corporation authorized to transact business in the State of Delaware; in each
case the business office of such registered agent for service of process shall
be identical with the registered Delaware office of the Trust.

SECTION 3. OTHER OFFICES. The Board of Trustees may at any time establish
branch or subordinate offices at any place or places where the Trust intends to
do business.

ARTICLE II

MEETINGS OF SHAREHOLDERS

SECTION 1. PLACE OF MEETING. Meetings of the shareholders for the election
of trustees shall be held in such place as shall be fixed by resolution of the
Board of Trustees and stated in the notice of the meeting.

SECTION 2. ANNUAL MEETINGS. An Annual Meeting of shareholders will not be
held unless the Investment Company Act of 1940 requires the election of trustees
to be acted upon.

SECTION 3. SPECIAL MEETINGS. Special Meetings of the shareholders may be
called at any time by the Chairman, or President, or by a majority of the Board
of Trustees, and shall be called by the Secretary upon written request of the
holders of shares entitled to cast not less than twenty percent of all the votes
entitled to be cast at such meeting provided that (a) such

<PAGE>

request shall state the purposes of such meeting and the matters proposed to be
acted on and (b) the shareholders requesting such meeting shall have paid to the
Trust the reasonable estimated cost of preparing and mailing the notice thereof,
which the Secretary shall determine and specify to such shareholders. No special
meeting need be called upon the request of shareholders entitled to cast less
than a majority of all votes entitled to be cast at such meeting to consider any
matter which is substantially the same as a matter voted on at any meeting of
the shareholders held during the preceding twelve months. The foregoing
provisions of this section 3 notwithstanding a special meeting of shareholders
shall be called upon the request of the holders of at least ten percent of the
votes entitled to be cast for the purpose of consideration removal of a trustee
from office as provided in section 16(c) of the Investment Company Act of 1940.

SECTION 4. NOTICE. Not less than ten, nor more than ninety days before the
date of every Annual or Special Shareholders Meeting, the Secretary shall cause
to be mailed to each shareholder entitled to vote at such meeting at his (her)
address (as it appears on the records of the Trust at the time of mailing)
written notice stating the time and place of the meeting and, in the case of a
Special Meeting of Shareholders, shall be limited to the purposes stated in the
notice. Notice of adjournment of a shareholders meeting to another time or place
need not be given, if such time and place are announced at the meeting.

SECTION 5. RECORD DATE FOR MEETINGS. Subject to the provisions of the
Declaration of Trust, the Board of Trustees may fix in advance a date not more
than ninety, nor less than ten days, prior to the date of any annual or special
meeting of the shareholders as a record date for the determination of the
shareholders entitled to receive notice of, and to vote at any meeting and any
adjournment thereof; and in such case such shareholders and only such
shareholders as shall be shareholders of record on the date so fixed shall be
entitled to receive notice of and to vote at such meeting and any adjournment
thereof as the case may be, notwithstanding any transfer of any stock on the
books of the Trust after any such record date fixed as aforesaid.

SECTION 6. QUORUM. Except as otherwise provided by the Investment Company
Act of 1940 or in the Trust's Declaration of Trust, at any meeting of
shareholders, the presence in person or by proxy of the holders of record of
Shares issued and outstanding and entitled to vote representing more than fifty
percent of the total combined net asset value of all Shares issued and
outstanding and entitled to vote shall constitute a quorum for the transaction
of any business at the meeting.

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<PAGE>

If, however, a quorum shall not be present or represented at any meeting of the
shareholders, the holders of a majority of the votes present or in person or by
proxy shall have the power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present
or represented to a date not more than 120 days after the original record date.
At such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.

SECTION 7. VOTING. Each shareholder shall have one vote for each dollar
(and a fractional vote for each fractional dollar) of the net asset value of
each share (including fractional shares) held by such shareholder on the record
date set pursuant to Section 5 on each matter submitted to a vote at a meeting
of shareholders. For purposes of this section and Section 6 of this Article II,
net asset value shall be determined pursuant to Section 3 Article VIII of these
Bylaws as of the record date for such meeting set pursuant to Section 5. There
shall be no cumulative voting in the election of trustees. Votes may be made in
person or by proxy.

At all meetings of the shareholders, a quorum being present, all matters shall
be decided by majority of the votes entitled to be cast held by shareholders
present in person or by proxy, unless the question is one for which by express
provision of the laws of the State of Delaware, the Investment Company Act of
1940, as from time to time amended, or the Declaration of Trust, a different
vote is required, in which case such express provision shall control the
decision of such question. At all meetings of shareholders, unless the voting is
conducted by inspectors, all questions relating to the qualification of voters
and the validity of proxies and the acceptance or rejection of votes shall be
decided by the Chairman of the meeting.

SECTION 8. INSPECTORS. At any election of trustees, the Board of Trustees
prior thereto may, or, if they have not so acted, the Chairman of the meeting
may appoint one or more inspectors of election who shall first subscribe an oath
of affirmation to execute faithfully the duties of inspectors at such election
with strict impartiality and according to the best of their ability, and shall
after the election make a certificate of the result of the vote taken.

SECTION 9. STOCK LEDGER AND LIST OF SHAREHOLDERS. It shall be the duty of
the Secretary or Assistant Secretary of the Trust to cause an original or
duplicate share ledger to be maintained at the office of the Trust's transfer
agent. Such share ledger may be in written form or any other form capable of
being converted into written form within a reasonable time for visual
inspection.

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<PAGE>

SECTION 10. ACTION WITHOUT MEETING. Any action to be taken by shareholders
may be taken without a meeting if (a) all shareholders entitled to vote on the
matter consent to the action in writing, and (b) all shareholders entitled to
notice of the meeting but not entitled to vote at it sign a written waiver of
any right to dissent, and (c) the written consents are filed with the records of
the meeting of shareholders. Such consent shall be treated for all purposes as a
vote at a meeting.

ARTICLE III

TRUSTEES

SECTION 1. GENERAL POWERS. The business of the Trust shall be managed under
the direction of its Board of Trustees, which may exercise all powers of the
Trust, except such as are by statute, or the Declaration of Trust, or by these
Bylaws conferred upon or reserved to the shareholders.

SECTION 2. NUMBER AND TERM OF OFFICE. The number of trustees which shall
constitute the whole Board shall be determined from time to time by the Board of
Trustees, but shall not be fewer than the minimum number permitted by applicable
laws, nor more than fifteen. Each trustee elected shall hold office until his
successor is elected and qualified. Trustees need not be shareholders.

SECTION 3. ELECTIONS. Provided a quorum is present, the trustees shall be
elected by the vote of a plurality of the votes present in person or by proxy,
except that any vacancy on the Board of Trustees may be filled by a majority
vote of the Board of Trustees, although less than a quorum, subject to the
requirements of Section 16(a) of the Investment Company Act of 1940.

SECTION 4. PLACE OF MEETING. Meetings of the Board of Trustees, regular or
special, may be held at any place as the Board may from time to time determine.

SECTION 5. QUORUM. At all meetings of the Board of Trustees, one-third of
the entire Board of Trustees shall constitute a quorum for the transaction of
business provided that in no case may a quorum be less than two persons. The
action of a majority of the trustees present at any meeting at which a quorum is
present shall be the action of the Board of Trustees unless the concurrence of a
greater proportion is required for such action by the Investment Company Act of
1940, these Bylaws

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<PAGE>

or the Declaration of Trust. If a quorum shall not be present at any meeting of
trustees, the trustees present thereat may by a majority vote adjourn the
meeting from time to time without notice other than announcement at the meeting,
until a quorum shall be present.

SECTION 6. REGULAR MEETINGS. Regular meetings of the Board of Trustees may
be held without additional notice at such time and place as shall from time to
time be determined by the Board of Trustees provided that notice of any change
in the time or place of such meetings shall be sent promptly to each trustee not
present at the meeting at which such change was made in the manner provided for
notice of special meetings.

SECTION 7. SPECIAL MEETINGS. Special meetings of the Board of Trustees may
be called by the Chairman or President on one day's notice to each trustee;
Special meetings shall be called by the Chairman or President or Secretary in
like manner and on like notice on the written request of two trustees.

SECTION 8. TELEPHONE MEETING. Members of the Board of Trustees or a
committee of the Board of Trustees may participate in a meeting by means of a
conference telephone or similar communications equipment if all persons
participating in the meeting can hear each other at the same time.

SECTION 9. INFORMAL ACTIONS. Any action required or permitted to be taken
at any meeting of the Board of Trustees or of any committee thereof may be taken
without a meeting, if a written consent to such action is signed by all members
of the Board or of such committee, as the case may be, and such written consent
is filed with the minutes of proceedings of the Board or committee.

SECTION 10. COMMITTEES. The Board of Trustees may by resolution passed by a
majority of the entire Board appoint from among its members an Executive
Committee and other committees composed of two or more trustees, and may
delegate to such committees, in the intervals between meetings of the Board of
Trustees, any or all of the powers of the Board of Trustees in the management of
the business and affairs of the Trust.

SECTION 11. ACTION OF COMMITTEES. In the absence of an appropriate
resolution of the Board of Trustees, each committee may adopt such rules and
regulations governing its proceedings, quorum and manner of acting as it shall
deem proper and desirable, provided that the quorum shall not be less than two
trustees. The committees shall keep minutes of their proceedings and shall
report the same to the Board of Trustees at the meeting next succeeding, and any
action by the committee

-5-
<PAGE>

shall be subject to revision and alteration by the Board of Trustees, provided
that no rights of third persons shall be affected by any such revision or
alteration. In the absence of any member of such committee, the members thereof
present at any meeting, whether or not they constitute a quorum, may appoint a
member of the Board of Trustees to act in the place of such absent member.

SECTION 12. COMPENSATION. Any trustee, whether or not he is a salaried
officer or employee of the Trust, may be compensated for his services as trustee
or as a member of a committee of trustees, or as chairman of a committee by
fixed periodic payments or by fees for attendance at meetings or by both, and in
addition may be reimbursed for transportation and other expenses, all in such
manner and amounts as the Board of Trustees may from time to time determine.

ARTICLE IV

NOTICES

SECTION 1. FORM. Notices to shareholders shall be in writing and delivered
personally or mailed to the shareholders at their addresses appearing on the
books of the Trust. Notices to trustees shall be oral or by telephone or
telegram or in writing delivered personally or mailed to the trustees at their
addresses appearing on the books of the Trust. Notice by mail shall be deemed to
be given at the time when the same shall be mailed. Subject to the provisions of
the Investment Company Act of 1940, notice to trustees need not state the
purpose of a regular or special meeting.

SECTION 2. WAIVER. Whenever any notice of the time, place or purpose of any
meeting of shareholders, trustees or a committee is required to be given under
the provisions of the Declaration of Trust or these Bylaws, a waiver thereof in
writing, signed by the person or persons entitled to such notice and filed with
the records of the meeting, whether before or after the holding thereof, or
actual attendance at the meeting of shareholders in person or by proxy, or at
the meeting of trustees or a committee in person, shall be deemed equivalent to
the giving of such notice to such persons.

ARTICLE V

OFFICERS

SECTION 1. EXECUTIVE OFFICERS. The officers of the Trust shall be chosen by
the Board of Trustees and shall include a Chairman, President, a Secretary and a
Treasurer. The Board of

-6-

<PAGE>

Trustees may, from time to time, elect or appoint a Controller, one or more Vice
Presidents, Assistant Secretaries and Assistant Treasurers. The Board of
Trustees, at its discretion, may also appoint a trustee as Senior Chairman of
the Board who shall perform and execute such executive and administrative duties
and powers as the Board of Trustees shall from time to time prescribe. The same
person may hold two or more offices, except that no person shall be both
President and Vice-President and no officer shall execute, acknowledge or verify
any instrument in more than one capacity, if such instrument is required by law,
the Declaration of Trust or these Bylaws to be executed, acknowledged or
verified by two or more officers.

SECTION 2. ELECTION. The Board of Trustees shall choose a Chairman,
President, a Secretary and a Treasurer.

SECTION 3. OTHER OFFICERS. The Board of Trustees from time to time may
appoint such other officers and agents as it shall deem advisable, who shall
hold their offices for such terms and shall exercise powers and perform such
duties as shall be determined from time to time by the Board. The Board of
Trustees from time to time may delegate to one or more officers or agents the
power to appoint any such subordinate officers or agents and to prescribe their
respective rights, terms of office, authorities and duties.

SECTION 4. COMPENSATION. The salaries or other compensation of all officers
and agents of the Trust shall be fixed by the Board of Trustees, except that the
Board of Trustees may delegate to any person or group of persons the power to
fix the salary or other compensation of any subordinate officers or agents
appointed pursuant to Section 3 of this Article V.

SECTION 5. TENURE. The officers of the Trust shall serve at the pleasure of
the Board of Trustees. Any officer or agent may be removed by the affirmative
vote of a majority of the Board of Trustees whenever, in its judgment, the best
interests of the Trust will be served thereby. In addition, any officer or agent
appointed pursuant to Section 3 may be removed, either with or without cause, by
any officer upon whom such power of removal shall have been conferred by the
Board of Trustees. Any vacancy occurring in any office of the Trust by death,
resignation, removal or otherwise shall be filled by the Board of Trustees,
unless pursuant to Section 3 the power of appointment has been conferred by the
Board of Trustees on any other officer.

SECTION 6. PRESIDENT AND CHIEF EXECUTIVE OFFICER. The President shall be
the Chief Executive Officer of the Trust, unless the Board of Trustees
designates the Chairman as Chief Executive Officer. The Chief Executive Officer
shall see that all orders and resolutions of the Board are carried into effect.
The Chief Executive Officer shall also be the Chief

-7-
<PAGE>

Administrative Officer of the Trust and shall perform such other duties and have
such other powers as the Board of Trustees may from time to time prescribe.

SECTION 7.CHAIRMAN. The Chairman of the Board shall perform and execute
such duties and administrative powers as the Board of Trustees shall from time
to time prescribe.

SECTION 8. SENIOR CHAIRMAN OF THE BOARD. The Senior Chairman of the Board,
if one shall be chosen, shall perform and execute such executive duties and
administrative powers as the Board of Trustees shall from time to time
prescribe.

SECTION 9. VICE-PRESIDENT. The Vice-Presidents, in order of their
seniority, shall, in the absence or disability of the Chief Executive Officer,
perform the duties and exercise the powers of the Chief Executive Officer and
shall perform such other duties as the Board of Trustees or the Chief Executive
Officer may from time to time prescribe.

SECTION 10. SECRETARY. The Secretary shall attend all meetings of the Board
of Trustees and all meetings of the shareholders and record all the proceedings
thereof and shall perform like duties for any committee when required. He shall
give, or cause to be given, notice of meetings of the shareholders and of the
Board of Trustees, shall have charge of the records of the Trust, including the
stock books, and shall perform such other duties as may be prescribed by the
Board of Trustees or Chief Executive Officer, under whose supervision he shall
be. He shall keep in safe custody the seal of the Trust and, when authorized by
the Board of Trustees, shall affix and attest the same to any instrument
requiring it. The Board of Trustees may give general authority to any other
officer to affix the seal of the Trust and to attest the affixing by his
signature.

SECTION 11. ASSISTANT SECRETARIES. The Assistant Secretaries in order of
their seniority, shall, in the absence or disability of the Secretary, perform
the duties and exercise the powers of the Secretary and shall perform such other
duties as the Board of Trustees shall prescribe.

SECTION 12. TREASURER. The Treasurer, unless another officer has been so
designated, shall be the Chief Financial Officer of the Trust. He shall have
general charge of the finances and books of account of the Trust. Except as
otherwise provided by the Board of Trustees, he shall have general supervision
of the funds and property of the Trust and of the performance by the custodian
of its duties with respect thereto. He shall render to the Board of Trustees,
whenever directed by the Board, an account of the financial condition of the
Trust and of all his transactions as Treasurer. He shall cause to be

-8-
<PAGE>

prepared annually a full and correct statement of the affairs of the Trust,
including a balance sheet and a statement of operations for the preceding fiscal
year. He shall perform all the acts incidental to the office of Treasurer,
subject to the control of the Board of Trustees.

SECTION 13. ASSISTANT TREASURER. The Assistant Treasurer shall in the
absence or disability of the Treasurer, perform the duties and exercise the
powers of the Treasurer and shall perform such other duties as the Board of
Trustees may from time to time prescribe.

ARTICLE VI

INDEMNIFICATION AND INSURANCE

SECTION 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of this
Article, "agent" means any person who is or was a trustee or officer of this
Trust and any person who, while a trustee or officer of this Trust, is or was
serving at the request of this Trust as a trustee, director, officer, partner,
employee, or agent of another foreign or domestic corporation, partnership,
joint venture, trust or other enterprise; "Trust" includes any domestic or
foreign predecessor entity of this Trust in a merger, consolidation, or other
transaction in which the predecessor's existence ceased upon consummation of the
transaction; "proceeding" means any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, or investigative;
and "expenses" includes without limitation attorney's fees and any expenses of
establishing a right to indemnification under this Article.

SECTION 2. ACTIONS OTHER THAN BY TRUST. This Trust shall indemnify any
person who was or is a party or is threatened to be made a party to any
proceeding (other than an action by or in the right of this Trust) by reason of
the fact that such person is or was an agent of this Trust, against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with such proceeding, if it is determined that person acted in
good faith and reasonably believed: (a) in the case of conduct in his official
capacity as an agent of the Trust, that his conduct was in the Trust's best
interests and (b) in all other cases, that his conduct was at least not opposed
to the Trust's best interests and (c) in the case of a criminal proceeding, that
he had no reasonable cause to believe the conduct of that person was unlawful.
The termination of any proceeding by judgment, order or settlement shall not of
itself create a presumption that the person did not meet the requisite standard
of conduct set forth in this Section. The termination of any proceeding by
conviction, or a plea of nolo contendere or its equivalent, or an entry of an
order of
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<PAGE>

probation prior to judgment, creates a rebuttable presumption that the person
did not meet the requisite standard of conduct set forth in this Section.

SECTION 3. ACTIONS BY THE TRUST. This Trust shall indemnify any person who
was or is a party or is threatened to be made a party to any proceeding by or in
the right of this Trust to procure a judgment in its favor by reason of the fact
that that person is or was an agent of this Trust, against expenses actually and
reasonably incurred by that person in connection with the defense or settlement
of that action if that person acted in good faith, in a manner that person
believed to be in the best interests of this Trust and with such care, including
reasonable inquiry, as an ordinarily prudent person in a like position would use
under similar circumstances.

SECTION 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision to
the contrary contained herein, there shall be no right to indemnification for
any liability arising by reason of willful misfeasance, bad faith, gross
negligence, or the reckless disregard of the duties involved in the conduct of
the agent's office with this Trust.

No indemnification shall be made under Sections 2 or 3 of this Article:

(a) In respect of any proceeding as to which that person shall have
been adjudged to be liable on the basis that personal benefit was
improperly received by him, whether or not the benefit resulted
from an action taken in the person's official capacity; or

(b) In respect of any proceeding as to which that person shall have
been adjudged to be liable in the performance of that person's
duty to this Trust, unless and only to the extent that the court
in which that action was brought shall determine upon application
that in view of all the relevant circumstances of the case, that
person is fairly and reasonably entitled to indemnity for the
expenses which the court shall determine; however, in such case,
indemnification with respect to any proceeding by or in the right
of the Trust or in which liability shall have been adjudged by
reason of the disabling conduct set forth in the preceding
paragraph shall be limited to expenses; or

<PAGE>

or of expenses incurred in defending a proceeding which is
settled or otherwise disposed of without court approval, unless
the required approval set forth in Section 6 of this Article is
obtained.

SECTION 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of this
Trust has been successful, on the merits or otherwise, in the defense of any
proceeding referred to in Sections 2 or 3 of this Article before the court or
other body before whom the proceeding was brought, the agent shall be
indemnified against expenses actually and reasonably incurred by the agent in
connection therewith, provided that the Board of Trustees, including a majority
who are disinterested, non-party trustees, also determines that based upon a
review of the facts, the agent was not liable by reason of the disabling conduct
referred to in Section 4 of this Article.

SECTION 6. REQUIRED APPROVAL. Except as provided in Section 5 of this
Article, any indemnification under this Article shall be made by this Trust only
if authorized in the specific case on a determination that indemnification of
the agent is proper in the circumstances because the agent has met the
applicable standard of conduct set forth in Sections 2 or 3 of this Article and
is not prohibited from indemnification because of the disabling conduct set
forth in Section 4 of this Article, by:

(a) A majority vote of a quorum consisting of trustees who are not
parties to the proceeding and are not interested persons of the
Trust (as defined in the Investment Company Act of 1940);

(b) A written opinion by an independent legal counsel; or

(c) The shareholders; however, shares held by agents who are parties
to the proceeding may not be voted on the subject matter under
this Sub-Section.

SECTION 7. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by this Trust before the final disposition of the
proceeding if (a) receipt of a written affirmation by the agent of his good
faith belief that he has met the standard of conduct necessary for
indemnification under this Article and a written undertaking by or on behalf of
the agent, such undertaking being an unlimited general obligation to repay the
amount of the advance if it is ultimately determined that he has not met those
requirements, and (b) a determination that the facts then known to those making
the determination would not preclude indemnification under this Article.
Determinations and authorizations of payments under this Section must be made in
the manner specified in Section 6 of this Article for determining

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<PAGE>

that the indemnification is permissible.

SECTION 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article
shall affect any right to indemnification to which persons other than Trustees
and officers of this Trust or any subsidiary hereof may be entitled by contract
or otherwise.

SECTION 9. LIMITATIONS. No indemnification or advance shall be made under
this Article, except as provided in Sections 5 or 6 in any circumstances where
it appears:

(a) That it would be inconsistent with a provision of the Agreement
and Declaration of Trust of the Trust, a resolution of the
shareholders, or an agreement in effect at the time of accrual of
the alleged cause of action asserted in the proceeding in which
the expenses were incurred or other amounts were paid which
prohibits or otherwise limits indemnification; or

(b) That it would be inconsistent with any condition expressly
imposed by a court in approving a settlement.

SECTION 10. INSURANCE. Upon and in the event of a determination by the
Board of Trustees of this Trust to purchase such insurance, this Trust shall
purchase and maintain insurance on behalf of any agent or employee of this Trust
against any liability asserted against or incurred by the agent or employee in
such capacity or arising out of the agent's or employee's status as such to the
fullest extent permitted by law.

SECTION 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article does not
apply to any proceeding against any trustee, investment manager or other
fiduciary of an employee benefit plan in that person's capacity as such, even
though that person may also be an agent of this Trust as defined in Section 1 of
this Article. Nothing contained in this Article shall limit any right to
indemnification to which such a trustee, investment manager, or other fiduciary
may be entitled by contract or otherwise which shall be enforceable to the
extent permitted by applicable law other than this Article.

ARTICLE VII

SHARES OF BENEFICIAL INTEREST

SECTION 1. CERTIFICATES. A certificate or certificates representing and
certifying the class and the full, but not fractional, number of shares of
beneficial interest owned

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<PAGE>

by each shareholder in the Trust shall not be issued except as the Board of
Trustees may otherwise determine from time to time. Any such certificate issued
shall be signed by facsimile signature or otherwise by the Chairman or President
or a Vice-President and counter-signed by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer.

SECTION 2. SIGNATURE. In case any officer who has signed any certificate
ceases to be an officer of the Trust before the certificate is issued, the
certificate may nevertheless be issued by the Trust with the same effect as if
the officer had not ceased to be such officer as of the date of its issue.

SECTION 3. RECORDING AND TRANSFER WITHOUT CERTIFICATES. The Trust shall
have the full power to participate in any program approved by the Board of
Trustees providing for the recording and transfer of ownership of the Trust's
shares by electronic or other means without the issuance of certificates.

SECTION 4. LOST CERTIFICATES. The Board of Trustees may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Trust alleged to have been stolen, lost
or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to have been stolen, lost or destroyed, or
upon other satisfactory evidence of such theft, loss or destruction and may in
its discretion and as a condition precedent to the issuance thereof, require the
owner of such stolen, lost or destroyed certificate or certificates, or his
legal representative, to give the Trust a bond with sufficient surety, to the
Trust to indemnify it against any loss or claim that may be made by reason of
the issuance of a new certificate.

SECTION 5. TRANSFER OF SHARES. Transfers of shares of beneficial interest
of the Trust shall be made on the books of the Trust by the holder of record
thereof (in person or by his attorney thereunto duly authorized by a power of
attorney duly executed in writing and filed with the Secretary of the Trust) (i)
if a certificate or certificates have been issued, upon the surrender of the
certificate or certificates, properly endorsed or accompanied by proper
instruments of transfer, representing such shares, or (ii) as otherwise
prescribed by the Board of Trustees. Every certificate exchanged, surrendered
for redemption or otherwise returned to the Trust shall be marked "Canceled"
with the date of cancellation.

SECTION 6. REGISTERED SHAREHOLDERS. The Trust shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the

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owner of shares, and shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by applicable law or the Declaration of Trust.

SECTION 7. TRANSFER AGENTS AND REGISTRARS. The Board of Trustees may, from
time to time, appoint or remove transfer agents and or registrars of the Trust,
and they may appoint the same person as both transfer agent and registrar. Upon
any such appointment being made, all certificates representing shares of
beneficial interest thereafter issued shall be countersigned by such transfer
agent and shall not be valid unless so countersigned.

SECTION 8. STOCK LEDGER. The Trust shall maintain an original stock ledger
containing the names and addresses of all shareholders and the number and class
of shares held by each shareholder. Such stock ledger may be in written form or
any other form capable of being converted into written form within reasonable
time for visual inspection.

ARTICLE VIII

GENERAL PROVISIONS

SECTION 1. CUSTODIANSHIP. Except as otherwise provided by resolution of the
Board of Trustees, the Trust shall place and at all times maintain in the
custody of a custodian (including any sub-custodian for the custodian) all
funds, securities and similar investments owned by the Trust. Subject to the
approval of the Board of Trustees, the custodian may enter into arrangements
with securities depositories, provided such arrangements comply with the
provisions of the Investment Company Act of 1940 and the rules and regulations
promulgated thereunder.

SECTION 2. EXECUTION OF INSTRUMENTS. All deeds, documents, transfers,
contracts, agreements and other instruments requiring execution by the Trust
shall be signed by the Chairman or President or a Vice President.

SECTION 3. NET ASSET VALUE. The net asset value per share shall be
determined separately as to each class of the Trust's shares, by dividing the
sum of the total market value of the class's investments and other assets, less
any liabilities, by the total outstanding shares of such class, subject to the
Investment Company Act of 1940 and any other applicable Federal securities law
or rule or regulation currently in effect.

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ARTICLE IX

AMENDMENTS

The Board of Trustees shall have the power to make, alter and repeal the
Bylaws of the Trust.

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