INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this 1st day of April, 2007, between Vanguard
Variable Insurance Fund, a Delaware statutory trust (the "Trust"), and
Wellington Management Company, LLP, a Massachusetts limited liability
partnership (the "Advisor").
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");
WHEREAS, the Trust offers a series of shares known as the High Yield
Bond Portfolio (the "Fund");
WHEREAS, the Trust retained the Advisor to render investment advisory
services to the Fund under an Investment Advisory Agreement dated as of May 1,
1996 (the "Prior Agreement"), and the Advisor has been rendering such services
to the Fund pursuant to the terms and conditions set forth in the Prior
Agreement; and
WHEREAS, the Trust desires to amend and restate such Prior Agreement,
in certain respects, and the Advisor is willing to render investment advisory
services to the Fund in accordance with such amendments.
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 "Wellington Management Portfolio"), 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 Wellington Management Portfolio; to
continuously review, supervise, and administer an investment program for the
Wellington Management 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 the 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 objective, 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.
3. SECURITIES TRANSACTIONS. The Advisor is authorized to select the brokers or
dealers that will execute purchases and sales of securities for the Wellington
Management Portfolio, and is directed to use its best efforts to obtain the best
available price and most favorable execution for such transactions, except as
otherwise permitted by the Board of Trustees pursuant to written policies and
procedures provided to the Advisor. The Advisor will promptly communicate to the
Trust's officers and the Board of Trustees such information relating to
portfolio transactions as they may reasonably request.
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, payable quarterly in arrears.
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.
6. COMPLIANCE. The Advisor agrees to comply with all Applicable Law and all
policies, procedures, or reporting requirements that the Board of Trustees
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 in
relation to the Wellington Management Portfolio.
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
Wellington Management 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 successive
twelve-month periods, only
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so long as this Agreement is approved at least annually by votes of the 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 affected 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 or by vote of a majority of the outstanding voting securities of the
Fund, on sixth 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 Variable Insurance Fund
High Yield Bond Portfolio
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:
Wellington Management Company, LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxx
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.
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
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the Fund, the Trust, or Vanguard and shall not disclose any such information to
any person other than the Trust, the Board of Trustees, 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, or Vanguard.
13. PROXY POLICY. The Advisor acknowledges that Vanguard, at the direction of
the Fund, will vote the shares of all securities that are held by the Fund.
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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
Wellington Management Company, LLP Vanguard Variable Insurance Fund
/s/Xxxxxxxx X. Xxxxxx March 20, 2007 /s/Xxxx X. Xxxxxxx 04/04/2007
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Signature Date Signature Date
Xxxxxxxx X. Xxxxxx Xxxx X. Xxxxxxx
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