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INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of this 18th day of April, 2006, between
Vanguard Horizon Funds, a Delaware statutory trust (the "Trust"), and
AllianceBernstein L.P. (the "Advisor"), a Delaware limited partnership.
W I T N E S S E T H
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust offers a series of shares known as Vanguard Global
Equity Fund (the "Fund"); and
WHEREAS, the Trust desires to retain the Advisor to render
investment advisory services to the Fund, and the Advisor is willing to
render such services.
NOW THEREFORE, in consideration of the mutual promises and undertakings
set forth in this "Agreement," the Trust and the Advisor hereby agree as
follows:
1. Appointment of Advisor. The Trust hereby employs the Advisor
as investment advisor, on the terms and conditions set forth herein, for the
portion of the assets of the Fund that the Trust's Board of Trustees (the
"Board of Trustees") determines in its sole discretion to assign to the
Advisor from time to time (referred to in this Agreement as the
"AllianceBernstein Portfolio"). As of the date of this Agreement, the
AllianceBernstein Portfolio will consist of the portion of the assets of the
Fund that the Board of Trustees has determined to assign to the Advisor, as
communicated to the Advisor on behalf of the Board of Trustees by The
Vanguard Group, Inc. ("Vanguard"). The Board of Trustees may, from time to
time, make additions to, and withdrawals from, the assets of the Fund assigned
to the Advisor. The Advisor accepts such employment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Duties of Advisor. The Trust employs the Advisor to manage
the investment and reinvestment of the assets of the AllianceBernstein
Portfolio; to continuously review, supervise, and administer an investment
program for the AllianceBernstein Portfolio; to determine in its discretion
the securities to be purchased or sold and the portion of such assets to
be held uninvested; to provide the Fund with all records concerning the
activities of the Advisor that the Fund is required to maintain; and to render
regular reports to the Trust's officers and Board of Trustees concerning the
discharge of the foregoing responsibilities. The Advisor will discharge the
foregoing responsibilities subject to the supervision and oversight of the
Trust's officers and the Board of Trustees, and in compliance with the
objectives, policies and limitations set forth in the Fund's prospectus and
Statement of Additional Information, any additional operating policies or
procedures that the Fund communicates to the Advisor in writing, and applicable
laws and regulations. The Advisor agrees to provide, at its own expense, the
office space, furnishings and equipment, and personnel required by it to
perform the services on the terms and for the compensation provided herein.
In fulfilling its duties hereunder, the Advisor may utilize the
services of the investment professionals and facilities of affiliates of the
Advisor provided that the Advisor's responsibilities and liabilities hereunder
shall not be affected thereby.
3. Securities Transactions. The Advisor is authorized to select
the brokers or dealers that will execute purchases and sales of securities for
the AllianceBernstein Portfolio, and is directed to use its best efforts to
obtain best execution for such transactions. In selecting brokers or dealers
to execute trades for the AllianceBernstein Portfolio, the Advisor will
comply with all applicable statutes, rules, interpretations by the Securities
and Exchange Commission or its staff, other applicable law, and the written
policies and procedures established by the Fund's Board of Trustees and
communicated to the Advisor in writing.
4. Compensation of Advisor. For services to be provided by the
Advisor pursuant to this Agreement, the Fund will pay to the Advisor, and the
Advisor agrees to accept as full compensation therefore, an investment advisory
fee at the rate specified in Schedule A to this Agreement. The fee will be
calculated based on annual percentage rates applied to the average daily net
assets of the AllianceBernstein Portfolio ("Base Fee") and will be paid to the
Advisor quarterly. Further, the investment advisory fee will be increased or
decreased by applying a performance adjustment ("Performance Adjustment"), as
specified in Schedule A.
5. Reports. The Fund and the Advisor agree to furnish to
each other current prospectuses, proxy statements, reports to
shareholders, certified copies of their financial statements, and such other
information with regard to their affairs as each may reasonably request,
including, but not limited to, information about changes in partners of the
Advisor. The Fund acknowledges receipt of Parts I and II of the Advisor's Form
ADV in compliance with Rule 204-3(b) under the Investment Advisers Act of
1940 (the "Advisors Act") more than forty eight (48) hours prior to the date of
execution of this Agreement.
6. Compliance. The Advisor agrees to comply with all
Applicable Law and all policies, procedures or reporting requirements that
the Board of Trustees of the Trust reasonably adopts and communicates to the
Advisor in writing, including, without limitation, any such policies,
procedures or reporting requirements relating to soft dollar or other
brokerage arrangements. "Applicable Law" means (i) the "federal securities
laws" as defined in Rule 38a-1(e)(1) under the 1940 Act, as amended from time
to time, and (ii) any and all other laws, rules, and regulations, whether
foreign or domestic, in each case applicable at any time and from time to time
to the investment management operations of the Advisor.
7. Status of Advisor. The services of the Advisor to the Fund
are not to be deemed exclusive, and the Advisor will be free to render similar
services to others so long as its services to the Fund are not impaired
thereby. The Advisor will be deemed to be an independent contractor and will,
unless otherwise expressly provided or authorized, have no authority to act
for or represent the Fund in any way or otherwise be deemed an agent of the Fund
or the Trust.
8. Liability of Advisor. No provision of this Agreement will be
deemed to protect the Advisor against any liability to the Fund or its
shareholders to which it might otherwise be subject by reason of any
willful misfeasance, bad faith or gross negligence in the performance of its
duties or the reckless disregard of its obligations with respect to the
Advisor's management of the AllianceBernstein Portfolio under this Agreement.
9. Limitations on Consultations. The Advisor is prohibited
from consulting with other advisors of the Fund, except Vanguard, concerning
transactions for the Fund in securities or other assets.
10. Duration; Termination; Notices; Amendment. This Agreement
will become effective on the date hereof and will continue in effect for a
period of two years thereafter, and shall continue in effect for successive
twelve-month periods thereafter, only so long as this Agreement is approved at
least annually by votes of the Trust's Board of Trustees who are not parties to
such Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. In addition, the
question of continuance of the Agreement may be presented to the shareholders
of the Fund; in such event, such continuance will be effected only if
approved by the affirmative vote of a majority of the outstanding voting
securities of the Fund.
Notwithstanding the foregoing, however, (i) this Agreement may at
any time be terminated without payment of any penalty either by vote of the
Board of Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Fund, on thirty days' written notice to the Advisor,
(ii) this Agreement will automatically terminate in the event of its
assignment, and (iii) this Agreement may be terminated by the Advisor on
ninety days' written notice to the Fund. Any notice under this Agreement
will be given in writing, addressed and delivered, or mailed postpaid, to the
other party as follows:
If to the Fund, at:
Vanguard Global Equity Fund
X.X. Xxx 0000
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Advisor, at:
AllianceBernstein L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
This Agreement may be amended by mutual consent, but the consent of the Trust
must be approved (i) by a majority of those members of the Board of Trustees
who are not parties to this Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
amendment, and (ii) to the extent required by the 1940 Act, by a vote of a
majority of the outstanding voting securities of the Fund of the Trust.
No assignment, as that term is defined in the Advisors Act, of this
Agreement shall be made by the Advisor without the written consent of the
Client. No assignment shall be deemed to result from changes in the
directors, officers or employees of the Advisor except as may be provided in
the Advisors Act.
As used in this Section 10, the terms "assignment," "interested
persons," and "vote of a majority of the outstanding voting securities" will
have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and
Section 2(a)(42) of the 1940 Act.
11. Severability. If any provision of this Agreement will be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement will not be affected thereby.
12. Confidentiality. The Advisor shall keep confidential any
and all information obtained in connection with the services rendered
hereunder and relating directly or indirectly to the Fund, the Trust, or
Vanguard and shall not disclose any such information to any person other than
the Trust, the Board of Trustees of the Trust, Vanguard, and any director,
officer, or employee of the Trust or Vanguard, except (i) with the prior
written consent of the Trust, (ii) as required by law, regulation, court order
or the rules or regulations of any self-regulatory organization, governmental
body or official having jurisdiction over the Advisor, or (iii) for information
that is publicly available other than due to disclosure by the Advisor or its
affiliates or becomes known to the Advisor from a source other than the Trust,
the Board of Trustees of the Trust, or Vanguard.
13. Proxy Policy. The Advisor acknowledges that Vanguard will
vote the shares of all securities that are held by the Fund unless other
mutually acceptable arrangements are made with the Advisor with respect to the
AllianceBernstein Portfolio.
14. Governing Law. All questions concerning the validity,
meaning, and effect of this Agreement shall be determined in accordance with
the laws (without giving effect to the conflict-of-law principles thereof)
of the State of Delaware applicable to contracts made and to be performed in
that state.
15. Miscellaneous. The Advisor agrees that it will notify the
Client of any changes in the membership of the general partners of the Advisor
within a reasonable time after such change.
IN WITNESS WHEREOF, the parties hereto have caused this Investment
Advisory Agreement to be executed as of the date first set forth herein.
AllianceBernstein L.P. Vanguard Horizon Funds
By AllianceBernstein Corporation,
Its General Partner
Xxxxx X. Xxxxx 04/11/2006 Xxxx X. Xxxxxxx 04/16/2006
_______________________________ _________ _______________________________ _________
Signature Date Signature Date
____________________________ ____________________________
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