SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES ACT OF 1934 (AMENDMENT NO. 1)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of
Commission only (as permitted
Rule 14a-6 (e) (2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
VANGUARD STAR FUND
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(Name of Registrant as Specified in its Declaration of Trust)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11 (a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date
of its filing.
(1) Amount of previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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IMPORTANT PROXY NEWS FOR SHAREHOLDERS
VANGUARD(R) STAR(TM) FUND
PROXY INFORMATION
YOUR VANGUARD FUND WILL HOST A SPECIAL MEETING OF SHAREHOLDERS ON MAY 22, 2001,
AT VANGUARD'S HEADQUARTERS IN MALVERN, PENNSYLVANIA. THE PURPOSE IS FOR
SHAREHOLDERS TO VOTE ON A PROPOSAL TO CHANGE YOUR FUND'S CURRENT POLICY
CONCERNING INVESTMENTS IN UNDERLYING VANGUARD FUNDS.
THE FIRST TWO PAGES OF THIS BOOKLET HIGHLIGHT KEY POINTS ABOUT OUR PROPOSAL
AND EXPLAIN THE PROXY PROCESS--INCLUDING HOW TO CAST YOUR VOTES. BEFORE YOU
VOTE, PLEASE READ THE FULL TEXT OF THE PROXY STATEMENT FOR A COMPLETE
UNDERSTANDING OF THE PROPOSAL.
PLEASE VOTE IMMEDIATELY!
You can vote by mail, by telephone, or over the Internet . . .
details can be found in the enclosed proxy insert.
[THE VANGUARD GROUP LOGO]
THE PROPOSAL
We want to give Vanguard STAR Fund the flexibility to invest in additional
Vanguard funds without obtaining future shareholder approval.
PURPOSE
The reason for the change is to enhance STAR Fund's flexibility in pursuing its
existing investment objective and "fund-of-funds" strategy. Under its current
policies, your Fund may invest in certain Vanguard funds only, and must obtain
shareholder approval before investing in any other funds. Obtaining shareholder
approval to invest in additional underlying funds is both costly and
time-consuming for your Fund. We believe that it is in shareholders' best
interest to build greater flexibility into your Fund's investment program by
allowing the board of trustees to add new underlying funds as they see fit.
KEY POINTS
The new policy will not alter STAR Fund's balanced investment approach. Your
Fund will continue to place 60%-70% of its assets in stock funds, 20%-30% of its
assets in bond funds, and 10%-20% of its assets in funds oriented towards
short-term cash investments.
If shareholders approve the new policy, the trustees plan to add two
international funds to the stock segment of STAR Fund's investment program.
Although your Fund is intended to function as an "all-in-one" investment
vehicle, to date it has had no direct international exposure. It is expected
that the new funds--Vanguard International Value Fund and Vanguard International
Growth Fund--eventually would make up about 12% of STAR Fund's holdings. No
other additions to STAR Fund are planned at this time.
Q&A
Q. I'M A RELATIVELY SMALL INVESTOR. WHY SHOULD I BOTHER TO VOTE?
A. Your vote makes a difference. If numerous shareholders fail to vote their
proxies, your Fund may not receive enough votes to go forward with its meeting.
If this happens, we'll need to mail proxies again--a costly proposition for your
Fund and all of its shareholders!
Q. WHO GETS TO VOTE?
A. Any person who owned shares of your Fund on the "record date," February 27,
2001, gets to vote--even if the investor later sold the shares.
Q. HOW CAN I VOTE?
A. You can vote in one of four ways:
o Through the Internet by going to WWW.VANGUARD.COM if you invest
directly with Vanguard or by going to WWW.PROXYVOTE.COM if you invest
with Vanguard through a financial intermediary.
o By telephone, with a toll-free call to the number listed on your proxy
card.
o By mail, with the enclosed ballot.
o In person at the meeting.
We encourage you to vote by Internet or telephone, using the voting control
number that appears on your proxy card. These voting methods will save your fund
a substantial amount of money (no return-mail postage!). Whichever method you
choose, please take the time to read the full text of our proxy statement before
you vote.
Q. IS IT HARD TO VOTE OVER THE INTERNET?
A. Not at all! If you have not yet visited Vanguard's website--at
www.vanguard.com--this is a great opportunity to check it out. Scan our website
and, when you're ready, click on "Proxy Voting."
Q. I PLAN TO VOTE BY MAIL. HOW SHOULD I SIGN MY PROXY CARD?
A. If you are an individual account owner, please sign exactly as your name
appears on the proxy card. Either owner of a joint account may sign the proxy
card, but the signer's name must exactly match one that appears on the card. You
should sign proxy cards for other types of accounts in a way that indicates your
authority (for instance, "John Brown, Custodian").
Q. WHOM SHOULD I CALL WITH QUESTIONS?
A. Please call Vanguard's Investor Information Department at 1-800-662-7447 with
any additional questions about your Fund's proposal or the upcoming shareholder
meeting. Clients of Vanguard's Institutional Investor Group or our Voyager or
Flagship Services may call their Vanguard representatives with any questions.
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VANGUARD STAR(TM) FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
Your Fund will host a Special Meeting of Shareholders on TUESDAY, MAY 22, 2001,
AT 9:30 A.M. EASTERN TIME. The meeting will be held at Vanguard's Malvern,
Pennsylvania, headquarters, at 100 Vanguard Boulevard, in Room 118A of the
Morgan Building. At the meeting, we'll ask shareholders to vote on:
1. A proposal to change your Fund's current policy concerning investments
in underlying Vanguard funds; and
2. Any other business properly brought before the meeting.
By Order of the Board of Trustees
Raymond J. Klapinsky, Secretary
March 5, 2001
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YOUR VOTE IS IMPORTANT!
YOU CAN VOTE EASILY AND QUICKLY OVER THE INTERNET, BY TOLL-FREE TELEPHONE CALL,
OR BY MAIL. JUST FOLLOW THE SIMPLE INSTRUCTIONS THAT APPEAR ON YOUR ENCLOSED
PROXY CARD. PLEASE HELP YOUR FUND AVOID THE EXPENSE OF A FOLLOW-UP MAILING BY
VOTING TODAY!
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VANGUARD STAR FUND
SPECIAL MEETING OF SHAREHOLDERS
MAY 22, 2001
PROXY STATEMENT
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INTRODUCTION
This proxy statement is being provided to you on behalf of the board of trustees
of Vanguard STAR Fund. Please be sure to read the entire proxy statement before
casting your vote on the proposal described below. Questions? Call us at
1-800-662-7447 (individual investors) or 1-800-523-1036 (participants in
company-sponsored retirement plans administered by Vanguard. This proxy
statement was first mailed to shareholders the week of March 5, 2001.
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ANNUAL/SEMIANNUAL REPORTS. Your Fund's most recent annual and semiannual reports
to shareholders are available at no cost. To request a report, please call us
toll-free at 1-800-662-7447, or write to us at P.O. Box 2600, Valley Forge, PA
19482-2600.
OUR PROPOSAL
We want to give STAR Fund the flexibility to invest in additional Vanguard funds
without obtaining future shareholder approval. As a "fund-of-funds," your Fund
invests its assets exclusively in other Vanguard Funds. Your Fund's current
investment policies permit it to allocate its assets among different categories
of underlying funds as follows:
o 60% to70% in certain Vanguard stock funds--Windsor(TM) Fund,
Windsor(TM) II Fund, PRIMECAP Fund, Morgan(TM) Growth Fund,
Explorer(TM) Fund, U.S. Growth Fund, and the 500 Index Fund.
o 20% to 30% in certain Vanguard bond funds--Long-Term Corporate
Fund and GNMA Fund.
o 10% to 20% in Vanguard funds oriented toward short-term cash
investments, the Prime Money Market Fund and Short-Term Corporate
Fund.
Under its current policies, your Fund is required to obtain shareholder approval
before adding funds to its investment program. (Longer-term shareholders may
recall the Fund's 1998 proxy to add Short-Term Corporate Fund.) If shareholders
approve this proposal, your Fund's board of trustees will be authorized to add
new underlying funds to STAR Fund as they see fit, without additional
shareholder votes.
OUR PURPOSE
The reason for the change is to enhance STAR Fund's flexibility in pursuing
its existing investment objective and fund-of-funds strategy. Obtaining
shareholder approval to invest in additional underlying funds is both costly and
time-consuming
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for your Fund. We believe that it is in shareholders' best interest to build
greater flexibility into your Fund's investment program by allowing the board of
trustees to add new underlying funds as they see fit.
The new policy will not alter STAR Fund's balanced investment approach.
Your Fund will continue to place 60%-70% of its assets in stock funds, 20%-30%
of its assets in bond funds, and 10%-20% of its assets in funds oriented towards
short-term cash investments.
If shareholders approve the new policy, trustees plan to add two international
funds to the stock segment of STAR Fund's investment program. Although your Fund
is intended to function as an "all-in-one" investment vehicle, to date it has
had no direct international exposure. It is expected that the new
funds--Vanguard International Value Fund and Vanguard International Growth
Fund--eventually would make up about 12% of STAR Fund's holdings. The Fund will
allocate assets to the new underlying funds through its regular cash flows--that
is, as shareholders invest new money in the Fund--not through sales of its
existing holdings. Consequently, the addition of the new funds should not cause
shareholders of STAR Fund to incur capital gains.
No other additions to STAR Fund's underlying investments are planned at this
time.
RISKS
Shareholders of STAR Fund are subject to the risks of the underlying Vanguard
funds in which the Fund invests. The Fund's planned addition of International
Growth Fund and International Value Fund would, for the first time, give
shareholders limited exposure to the risks associated with international
investments. These risks include country risk--the chance that a country's
securities markets will be hurt by political upheavals, financial troubles, or
natural disaster--and currency risk--the chance that a foreign investment will
decrease in value because of unfavorable changes in currency exchange rates.
Keep in mind, however, that only 12% of the Fund's assets are expected to be
eventually invested in international funds.
As previously noted, the new policy would not alter STAR Fund's balanced
investment approach. The new policy has the potential to increase the Fund's
risks, depending on the particular risks of any underlying funds that the board
of trustees adds in the future with shareholder approval. Overall, however, the
new policy is expected to reduce the Fund's risk by further diversifying its
holdings within the established asset categories.
CONCLUSION
The trustees believe that the proposed change to your Fund's policy on
investments in underlying Vanguard funds is in the best interest of shareholders
and the Fund.
YOUR FUND'S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL
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FUND INFORMATION
As of January 31, 2001, your Fund's trustees and officers owned less than 1% of
its outstanding shares. The following information also applied to your Fund as
of that date:
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FUND NET ASSETS OUTSTANDING SHARES 5% OWNERS
(000) (000)
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STAR Fund $8,347,908 457,847,916 None
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GENERAL INFORMATION
This section of the proxy statement provides information on a number of topics
relating to proxy voting and shareholder meetings.
PROXY SOLICITATION METHODS. Your Fund will solicit shareholder proxies in a
variety of ways. All shareholders who are entitled to vote will receive these
proxy materials by mail (or electronically, assuming that applicable
requirements are met). In addition, Vanguard employees and officers may solicit
shareholder proxies in person, by telephone, or over the Internet.
PROXY SOLICITATION COSTS. Your Fund will pay all costs of soliciting proxies
from its own shareholders, including costs relating to the printing, mailing,
and tabulation of proxies. By voting immediately, you can help your Fund avoid
the considerable expense of a second solicitation.
QUORUM. In order for the shareholder meeting to go forward, your Fund must
achieve a quorum. This means that a majority of your Fund's shares must be
represented at the meeting--either in person or by proxy. All returned proxies
count toward a quorum, regardless of how they are voted ("For," "Against,"
"Abstain"). Your Fund will count broker non-votes and abstentions toward a
quorum, but not toward the approval of any proposals. Accordingly, a proposal
will pass only if a sufficient number of votes are cast "FOR" the proposal.
(Broker non-votes are shares for which (i) the underlying owner has not voted
and (ii) the broker holding the shares does not have discretionary authority to
vote on the particular matter.)
REQUIRED VOTE. Passage of the proposal will require approval by the lesser of
(i) a majority of the Fund's outstanding shares on February 27, 2001; or (ii)
67% or more of the Fund's shares that are voted, so long as more than 50% of the
shares actually have been voted.
REVOKING YOUR PROXY. Your latest vote is the one that counts. Therefore, you can
revoke a prior proxy simply by voting again--at our website, by using your
original proxy card, or by toll-free telephone call. You can also revoke a prior
proxy by writing to your Fund's secretary, Raymond J. Klapinsky, at The Vanguard
Group, 100 Vanguard Boulevard, Malvern, PA 19355, or by voting in person at the
meeting. You may revoke your proxy at any time up until voting results are
announced at the shareholder meeting.
5
SHAREHOLDER PROPOSALS. Any shareholder proposals to be included in the proxy
statement for your Fund's next annual or special meeting must be received by the
Fund within a reasonable period of time prior to that meeting. Your Fund has no
current plans to hold an annual or special meeting in 2002.
NOMINEE ACCOUNTS. Upon request, the Fund will reimburse nominees for their
reasonable expenses in forwarding proxy materials to beneficial owners of the
Fund's shares. Please submit invoices for our review to: Vanguard Legal
Department, P.O. Box 2600, Valley Forge, PA 19482-2600.
LITIGATION. Your Fund is not involved in any litigation.
OTHER MATTERS. At this point, we know of no other business to be brought before
the shareholder meeting. However, if any other matters do come up, we will use
our best judgment to vote on your behalf. If you object to our voting other
matters on your behalf, please tell us so in writing before the meeting.
YOUR FUND AND THE VANGUARD GROUP, INC. Your Fund is a member of The Vanguard
Group, Inc., the only mutual mutual fund company. Vanguard is owned jointly by
the funds it oversees (and, therefore, indirectly by the shareholders of those
funds). Vanguard provides the funds--more than 100 distinct investment
portfolios--with their corporate management, administrative, and distribution
services on an at-cost basis. The Fund does not employ an investment adviser or
underwriter.
Standard & Poor's(R), S&P(R), S&P 500(R), Standard & Poor's 500, and 500 are
trademarks of The McGraw-Hill Companies, Inc., and have been licensed for use by
The Vanguard Group, Inc. Vanguard mutual funds are not sponsored, endorsed, sold
or promoted by Standard & Poor's, and Standard & Poor's makes no representation
regarding the advisability of investing in the funds.
[SHIP]
[THE VANGUARD GROUP LOGO]
Post Office Box 2600
Valley Forge, PA 19482-2600
(c) 2001 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing
Corporation, Distributor.
PROX2 022001
VOTE BY TOUCH-TONE PHONE OR THE INTERNET [THE VANGUARD GROUP(R) LOGO]
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CALL TOLL-FREE: 1-800-221-0689
OR VISIT OUR WEBSITE WWW.VANGUARD.COM
(SEE ENCLOSED INSERT FOR FURTHER INSTRUCTIONS Please detach at perforation
TO VOTE BY INTERNET OR TELEPHONE) before mailing
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PROXY SOLICITATION BY THE BOARD OF TRUSTEES
By my signature below, I appoint John J. Brennan, J. Lawrence Wilson and Raymond
J. Klapinsky as my attorneys to vote all Fund shares that I am entitled to vote
at the Special Meeting of Shareholders to be held in the Morgan Building, Room
118A, Vanguard Financial Center, 100 Vanguard Boulevard, Malvern, PA on May 22,
2001 at 9:30 A.M., E.T. and at any adjournments of the meeting. Any one or more
Messers. Brennan, Wilson and Klapinsky may vote my shares, and they may appoint
substitutes to vote my shares on their behalf. I instruct Messrs. Brennan,
Wilson and Klapinsky to vote this proxy as specified on the reverse side, and I
revoke previous proxies that I have executed. I acknowledge receipt of the
Fund's Notice of Special Meeting of Shareholders and proxy statement.
Date________________________2001
PLEASE SIGN, DATE AND RETURN PROMPTLY
IN ENCLOSED ENVELOPE IF YOU ARE NOT
VOTING BY PHONE OR INTERNET
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Signature(s) (and Title(s), if applicable)
NOTE: Please sign exactly as your name
appears on this proxy. When signing in a
fiduciary capacity, such as executor,
administrator, trustee, attorney, guardian,
etc., please so indicate. Corporate and
partnership proxies should be signed by an
authorized person indicating the persons
title.
CONTINUED ON REVERSE SIDE
Please refer to the Proxy Statement discussion on the proposal. THE PROXY WILL
BE VOTED FOR THE PROPOSAL IF YOU DO NOT SPECIFY OTHERWISE. Your appointed
attorneys will vote any other matters that arise at the meeting in accordance
with their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSAL:
Please detach at perforation before mailing.
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PLEASE VOTE BY CHECKING THE APPROPRIATE BOX BELOW.
FOR AGAINST ABSTAIN
VANGUARD STAR FUND
1. The proposal to change Vanguard STAR Fund's policy concerning investments in
underlying Vanguard funds. [ ] [ ] [ ]
PLEASE SIGN ON REVERSE SIDE
Registered
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Your Proxy Vote Is Important!
Two Low-Cost Ways to Vote Your Proxy
VOTE--IT'S FAST AND CONVENIENT.
The accompanying Proxy Statement outlines an important proposal affecting your
Vanguard fund. Help us save on costs--savings we pass along to you in the form
of lower fund expenses--by voting online or by telephone. Each method is
available 24 hours a day, and each ensures that your vote is confirmed and
posted immediately.
You only need to return the Voting Instruction Form if you choose to submit your
voting instructions by paper ballot.
TO VOTE ONLINE:
1. Read the Proxy Statement.
2. Go to either WWW.VANGUARD.COM and click on "PROXY VOTING"
3. Enter the CONTROL NUMBER found on your Proxy Card.
4. Follow the simple instructions.
TO VOTE BY TELEPHONE:
1. Read the Proxy Statement.
2. Call toll-free 1-888-221-0689.
3. Enter the CONTROL NUMBER found on your Proxy Card.
4. Follow the simple instructions.
(c) 2001 The Vanguard Group, Inc. All rights reserved.
Vanguard Marketing Corporation, Distributor.
[THE VANGUARD GROUP LOGO]
Beneficial
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Your Proxy Vote Is Important!
Two Low-Cost Ways to Vote Your Proxy
VOTE--IT'S FAST AND CONVENIENT.
The accompanying Proxy Statement outlines an important proposal affecting your
Vanguard fund. Help us save on costs--savings we pass along to you in the form
of lower fund expenses--by voting online or by telephone. Each method is
available 24 hours a day, and each ensures that your vote is confirmed and
posted immediately.
You only need to return the Voting Instruction Form if you choose to submit your
voting instructions by paper ballot.
TO VOTE ONLINE:
1. Read the Proxy Statement.
2. Go to WWW.PROXYWEB.COM.
3. Enter the CONTROL NUMBER found on your Voting Instruction Form.
4. Follow the simple instructions.
TO VOTE BY TELEPHONE:
1. Read the Proxy Statement.
2. Call 1-800-454-8683.
3. Enter the CONTROL NUMBER found on your Voting Instruction Form.
4. Follow the simple instructions.
(c) 2001 The Vanguard Group, Inc. All rights reserved.
Vanguard Marketing Corporation, Distributor.
[THE VANGUARD GROUP LOGO]