Vanguard® Asset Management Services—For Employee Benefit Plans

Investment expertise to help you manageyour benefit plan assets

benefitC O N T R I B U T I O N

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Sharing our strengths: Benefits of a partnership with Vanguard

Managers of employee benefit plansface an ongoing series of challenges.Among them: keeping up withdemographic changes in theirworkforce, and instituting soundinvestment policies to meet fundingand withdrawal requirements arisingfrom those changes.

Vanguard can help. We’re one of the world’s largest investmentmanagement firms, responsible forsome $600 billion in assets. We’re alsoone of the most respected because ofour reputation for integrity and forputting clients first in everything wedo. As your partner, Vanguard canprovide investment expertise in

managing your plan assets—expertisethat will allow you to focus on theother important tasks involved withrunning your business.

Because of our extensive experience as a fiduciary, we’re thoroughlyfamiliar with the needs of plansponsors and the responsibilities youface. Indeed, Vanguard has earned the trust of hundreds of organizationsthroughout the country. Our client-first philosophy is reflected in acommitment to low costs, which helpsto ensure that the plan assets entrustedto your care are managed skillfully and efficiently.

partner

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How we work with plan sponsors

Vanguard provides a full rangeof investment management andadministrative services for employeebenefit plans. We can assist you by:

Developing a customized investment policy statement

We take the time to understand theneeds of plan sponsors and thechallenges they face in managing theplan’s cash flows. The result: a long-term investment plan tailored to your needs.

Managing your investmentsprudently

We take a disciplined, time-tested,and long-term approach to investing.Our more than 100 low-cost mutualfunds—which include both index andactively managed funds—are run byworld-class managers who are closelymonitored by Vanguard.

Responding to your concerns

You can count on an experienced andhighly trained investment manager tobe available to discuss your needs andto respond to your concerns. Yourdedicated investment professional willmanage your plan’s portfolio and helpyou understand how different marketconditions will affect your plan.

Expertise

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Vanguard’s services at a glance

By analyzing your investment philosophy and objectives, we tailor a program to yourneeds. We do all of the following:

Consult with you on an appropriate investment policy.

Determine your optimal asset allocation.

Recommend a customized, diversified portfolio of Vanguard® funds.

Test the effect of different market conditions on plan assets.

Manage your cash flow to meet expected funding and withdrawal requirements.

Reallocate investments as the composition of your workforce changes.

Provide quarterly updates of investment performance.

Investment services for plan sponsors

Types of plans we manage

Vanguard provides expert management for a variety of pooled asset-benefitplans, including:

Defined benefit plans.

Defined contribution plans, including profit-sharing and money purchase pension plans.

Taft-Hartley plans.

Health and welfare plans.

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Proven investment expertise

Vanguard is an experienced managerof managers. We oversee investmentsin more than 100 stock, bond,balanced, and money market funds.We also provide convenient, one-stopaccess to leading investmentmanagers, both at Vanguard and atfirms we hire from around the world.This blend of internal and externalinvestment managers provides yourorganization an unmatchablecombination of expertise and diversityof thought.

Leadership in indexing

Vanguard introduced index mutualfunds for individuals in 1976, and we remain a leader in the field:We provide the broadest selection of stock, bond, and balanced indexfunds. Our index offerings includefunds that span the entire stockmarket or the entire bond market,while others target specific segmentsof each market (such as by investmentstyle or market capitalization). Stillothers combine stocks and bonds inbalanced index funds. Importantly,our index funds—all of which aremanaged by Vanguard—feature someof the lowest expense ratios in theindustry,* which directly benefits ourshareholders’ bottom line.

Vanguard’s goal is to help you meet your fiduciary responsibility

by ensuring that the assets in your benefit plan consist of funds

managed by some of the world’s best advisors. You can be certain

that these funds will stay true to their investment objectives and

operate at the lowest reasonable cost.

fiduciary*Source: Lipper Inc.

*Source: Morningstar, Inc., November 30, 2003.

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A manager of world-class advisors

About 60% of the assets in Vanguard® funds are actively managed by our internal andexternal advisors. Our external advisors—all of whom are highly respected and wereselected only after undergoing a rigorous review process—bring a wide variety ofindependent thought. Moreover, these talented and seasoned managers bring acontinuity of investment approach not easily found elsewhere. Their relationships withVanguard, on average, are nearly twice the average industry tenure.*

Some of our external advisors are:

Barrow, Hanley, Mewhinney & Strauss, Inc. (Dallas, Texas)

Chartwell Investment Partners (Berwyn, Pennsylvania)

Grantham, Mayo, Van Otterloo & Co. LLC (Boston, Massachusetts)

Marathon Asset Management Limited (London, United Kingdom)

Mellon Capital Management Corporation (San Francisco, California)

PRIMECAP Management Company (Pasadena, California)

Sanford C. Bernstein & Co., LLC (New York, New York)

Schroder Investment Management North America Inc. (London, United Kingdom)

Wellington Management Company, LLP (Boston, Massachusetts)

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A major manager of fixed income funds

Vanguard is the nation’s largestmanager of bond mutual funds andone of the largest managers of moneymarket funds.* Our fixed incomefunds seek to outperform theircompetitors over the long run, and,almost without exception, they have.(For the ten years ended September 30,2003, all 29 of Vanguard’s activelymanaged money market and bond fundsoutperformed at least 80% of comparablemutual funds. Source: Lipper Inc. Fundswith at least a 10-year history as ofSeptember 30, 2003, were included. Pastperformance cannot be used to predictfuture returns. Investment returns andprincipal value will fluctuate, so thatinvestors’ shares, when sold, may be worthmore or less than their original cost. Forcurrent performance, which may be higheror lower than that cited, visit our websiteat www.vanguard.com.)

Our superior long-term performancecompared with other bond and moneymarket funds can be attributed largelyto our low-cost operating structure.Because of the cost advantage thisstructure provides, Vanguard’s fixedincome managers aren’t tempted totake risky, alternative strategies toboost yields.

Disciplined fund management

Whether managed internally orexternally, assets at Vanguard areinvested exactly as promised. You can count on our funds to stay true to their stated objectives year afteryear, whatever the market conditions,and to remain immune to the fadsthat come and go in the investmentbusiness. We make sure that our fundmanagers don’t take extra risks in adrive for performance.

Vanguard clearly specifies investmentmandates at the outset, hires advisorswhose style and expertise supportthose mandates, and then closelymonitors fund management andperformance.

Our asset management services are designed to manage the

growth of your plan assets with the objective of meeting your

required benefit payouts over the long term.

*As of September 30, 2003. Source: Lipper Inc.

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Vanguard funds span the asset class spectrum . . .

. . . reflecting strength in both active and passivemanagement . . .

. . . and diversity ofthought among fundmanagers.

Vanguard data as of September 30, 2003.

Vanguard’s diverse fund lineup underscores a commitment to prudent asset management

■ Stock funds ■ Actively managed funds

■ Bond funds ■ Index funds

■ Balanced funds

■ Money market funds

8%

39%

25%

16%51% 61%

■ Managed within Vanguard

■ Managed by external advisors

32%68%

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A time-tested approach to investing plan assets

Vanguard’s asset management servicesare based on sound, time-testedinvestment principles. We don’tpromote hot funds or follow trendystrategies. Instead, we apply aproprietary methodology to create aportfolio tailored to your long-terminvestment strategy, spending goals,and tolerance for risk.

Starting with a top-down strategicperspective, we allocate your fundsamong the major asset classes—stocks, bonds, and (possibly) cashinvestments. This asset allocationallows for adjustments based onchanging circumstances, includingimportant changes in the financialmarkets. Within each asset class, weemphasize broad diversification tofurther temper long-term portfoliovolatility. Only then do we recommendspecific Vanguard investments.

Creating your custom portfolio

The development of your portfolio isbased on a clear understanding of theage distribution of your workforce,expected future payouts, and your riskprofile. Our process includes thefollowing:

Investment policy consulting

We work with you to review yourcurrent investment policy or todevelop a policy that reflects yourinvestment objectives. This caninclude helping you define clearobjectives given expectedcontributions and withdrawals,and risk tolerance.

Strategic asset allocation analysis

We determine the best mix of assets consistent with your plan’sdemographics, goals, and risk profile.We consider your current holdings,contribution and withdrawalrequirements, asset-class returns, andinflation. We test and analyze theinteraction of these factors on yourobjectives over a broad range ofeconomic cycles. Finally, we confirmyour tolerance for risk through aseries of “what if ” analyses.

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Portfolio development

After determining a strategic assetallocation, we undertake furtheranalysis to choose an appropriatesubasset allocation. This involvesdiversifying within each asset class.With equities, for example, weconsider funds that invest in growthand value stocks; funds that invest in small-, medium-, and large-capitalization firms; and funds thatinvest in the United States andabroad. In bond funds, our subassetallocation process considers factorssuch as maturity and credit quality.As a final step, we select specificVanguard funds—both index andactively managed.

Ongoing portfolio management

We will continually monitor yourportfolio to ensure that your programremains suitable. This includesmanaging your cash flows andrebalancing assets when neededbecause of market developments or changes in objectives orcircumstances. We also provide the following:

Custom reporting

Our detailed quarterly performancereports make it easy for you tomonitor your portfolio. Each reportincludes a discussion of assetallocation, comprehensiveperformance and financial marketinformation, and (if you receive trustservices) a detailed account of trustactivity. These timely, concise reportsprovide an excellent basis forpresentations to plan trustees or your investment committee.

Comprehensive analysis

We also take a broader look at theprogress of your portfolio. Each yearwe perform a comprehensive reviewof your investment assets and verifythat investment objectives areconsistent with expected workforcedemographics and cash flows.

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Attentive, personalized service

Your personal day-to-day contact at Vanguard will be a dedicatedinvestment manager. The goal ofVanguard’s experienced investmentmanagers is to understand each plansponsor’s unique needs and to bereadily available to answer questionsand discuss concerns.

All our investment managers haveextensive education and training, andconsiderable experience in thefinancial services industry.

Underscoring the importance we placeon service is the unusually low ratio ofclients assigned to each client team.

Our investment managers are salariedand receive no commissions or extracompensation for making specificrecommendations. Their job, quitesimply, is to serve your organization’slong-term interests.

As a Vanguard client, you will draw not only on the full range of

resources we offer but also on our extensive expertise in managing

employee plan assets.

Client Focus

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Why Vanguard stands apart

The Vanguard Group has never beena typical investment managementcompany. We offer a uniquecombination of benefits, including:

Industry leadership

With some $600 billion in assetsinvested in more than 17 millionshareholder accounts, Vanguard isone of the largest investmentmanagement companies.

Diverse investment choices

We offer more than 100 activelymanaged and index funds—one of themost diverse fund selections available.

World-class expertise

Our investment management teamincludes some of the most experiencedasset managers in the industry.

Responsibility—and stability

Because of our unique corporatestructure, we have no obligation togenerate profits for outside owners.Vanguard is owned by its funds andexists only to serve their shareholders.This is what drives us to put ourclients first in everything we do,including returning all profits toshareholders by keeping expenses low.

Commitment to low costs

Vanguard is widely recognized for itsleadership in keeping operating costsat the lowest reasonable levelswithout sacrificing service quality.Keeping costs as low as possible isespecially important for plansponsors, which—as fiduciaries—must demonstrate prudence andefficiency in the management ofassets entrusted to them.

Plan sponsors can benefit from the unparalleled strengths

The Vanguard Group has to offer. We bring exceptional,

client-centered service, disciplined investment expertise, and

an unrivaled reputation for integrity and effective stewardship.

800.335.2412

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An invitation from Vanguard

Plan sponsors who choose Vanguardto manage their investment assetsexpect us to deliver competitivelong-term performance—based on aconsistent, risk-sensitive investmentapproach—and exceptional clientservice, all at the lowest possible cost.This extraordinary value we providefor investors stems naturally fromVanguard’s corporate structure, whichaligns our interests with yours.

Please call us if you have questions orwould like more information. We’reavailable at1-800-335-2412 on businessdays from 8:30 a.m. to 6 p.m., Easterntime. We look forward to helping yourorganization achieve its goals.

We invite you to learn more about the advantages of

Vanguard’s asset management services, and how we can

help you fulfill your fiduciary responsibility.

Vanguard Asset Management ServicesPost Office Box 709Valley Forge, PA 19482-0709

World Wide Webwww.vanguard.com

Toll-Free Information1-800-335-2412

Vanguard Asset Management Servicesare provided by Vanguard National TrustCompany, which is a federally charteredtrust company operated under thesupervision of the Office of theComptroller of the Currency.

© 2004 The Vanguard Group, Inc. All rights reserved ERISA 012004

For more complete information about Vanguard funds, contact us or visit www.vanguard.com to obtain a prospectus. Investment objectives, risks, charges, expenses, and other importantinformation about a fund are contained in the prospectus; read it carefully before investing.

Vanguard® AssetManagement Services

© 2004 The Vanguard Group, Inc. All rights reserved.EKPL 012004

Vanguard Asset Management ServicesPost Office Box 709, Valley Forge, Pennsylvania 19482-0709World Wide Web—www.vanguard.com

A message to sponsors of employee benefit plans

Organizations such as yours want their plan assets managed at the lowest reasonable cost and withthe lowest risk. The Vanguard Group—one of the world’s leading investment managementcompanies—can help your organization reach its goals through our unique combination ofcompetitive long-term performance, high-quality service, and low costs. Moreover, Vanguard iskeenly aware of the financial needs of organizations such as yours because of our extensiveexperience managing the assets of ERISA-qualified plans and other benefit plans.

We can manage your plan assets through Vanguard Asset Management Services, which providesinvestment policy consulting, asset allocation analysis, portfolio management, and customizedreporting. Our dedicated investment managers are sensitive to the funding needs of each client, sowe tailor our asset management services to your specific investment philosophy and risk tolerance,and to your plan’s expected contributions and withdrawals. Importantly, clients tell us that whatthey value most about Vanguard is that we are a partner they can trust.

I have enclosed a brochure that describes our services in detail. If you have questions, we welcomeyour call at 1-800-335-2412. Or, if you prefer, complete and return the enclosed questionnaire,and we’ll contact you—no obligation, of course.

I hope you’ll give the skilled professionals of Vanguard Asset Management Services an opportunityto help your organization achieve its goals.

Sincerely,

Jack BrodPrincipal

Vanguard Asset Management Services are provided by Vanguard National Trust Company, which is a federally chartered trust company operatedunder the supervision of the Office of the Comptroller of the Currency.

Vanguard® Asset Management Services

investment profileof your

organization

Completing this questionnaire will provide Vanguard

Asset Management Services with the information we

need to evaluate your needs effectively. (You will be

under no obligation by completing this questionnaire.)

If you have questions, call us at 1-800-335-2412.

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1. Type of organization: ■■ Endowment ■■ Foundation ■■ Corporation

■■ Association ■■ Qualified Retirement Plan ■■ Trust

■■ Other (please specify)

2. Name of organization:

Tax identification number

3. Does your organization have a website?

■■ Yes ■■ No

If yes, what is the address?

4. Your name:

5. Primary contact at organization:

Name

Telephone number (day)

Telephone number (evening)

Fax number

E-mail address

Address

City

State Zip

Core Data

1. What is the total value of your organization’s investable assets?

$

Provide a brief description of your organization’s purpose and the intended use of the assets. If you have an investment policy statement, please enclose a copy.

2. Which of the words below best describes the risk tolerance for these assets?

■■ Conservative ■■ Moderate ■■ Aggressive

3. Provide the following investment information, if known:

Return objective

Benchmark indexes

Time horizon

4. How much of the assets would you like Vanguard to manage?

$

5. Are any of the assets currently invested with Vanguard?

■■ Yes ■■ No

If yes, what is the value of those assets? $

6. Do you wish to transfer any outside assets to Vanguard?

■■ Yes ■■ No

If yes, please attach a current statement for these assets.

7. Are the assets subject to any income or capital gains taxes?

■■ Yes ■■ No

If yes, please specify.

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Investment Assets

1. Describe your organization’s historical and anticipated cash flows.

Contributions ($ or %) Withdrawals ($ or %)

Anticipated annual amount

Historical amount

Last year

Two years ago

Three years ago

2. Describe restrictions on spending from your portfolio.

3. Describe significant changes to contributions or withdrawal rates that you expect in the future.

4. Describe liquidity needs not mentioned above that we should know about.

5. If your organization has a qualified retirement plan, list the type of plan (e.g., profit-sharing plan, moneypurchase plan, defined benefit plan).

Number of participants

Average age of participants

Other Financial Information

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Thank you for taking the time to complete this questionnaire. The more accurate and complete theinformation you provide, the better we can tailor your investment program to your organization’s specificfinancial situation. Use the space below to provide any additional information not already captured in thisprofile, or to tell us about other issues or planning concerns you may have.

Signature Date

Additional Information

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World Wide Webwww.vanguard.com

Toll-Free Information1-800-335-2412

Vanguard Asset Management Services are provided by VanguardNational Trust Company, which is a federally chartered trust company operated under the supervision of the Office of the Comptroller of the Currency.

®

®

Vanguard Asset Management ServicesPost Office Box 709Valley Forge, PA 19482-0709

© 2004 The Vanguard Group, Inc. All rights reserved.

QAMT 032004