VVIF FUND of FUNDS SERVICE AGREEMENT
AGREEMENT, made as of this 11th day of November, 2002, between VANGUARD
VARIABLE INSURANCE FUND, a Delaware statutory trust (the "Trust"), and THE
VANGUARD GROUP, INC., a Pennsylvania corporation ("Vanguard").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940;
WHEREAS, the Trust offers many different portfolios, including Vanguard
Variable Insurance Fund-Total Stock Market Index Portfolio (the "Portfolio");
WHEREAS, the Portfolio employs a "fund of funds" investment strategy by
investing in other registered investment companies managed or administered by
Vanguard;
WHEREAS, Vanguard provides management, administrative, transfer agency,
dividend disbursing, investment advisory and other services to the Trust and
certain other registered investment companies pursuant to a written agreement,
which agreement may be amended from time to time, the current version being the
Fourth Amended and Restated Funds' Service Agreement, dated June 15, 2001 (the
"Funds' Service Agreement");
WHEREAS, the Trust wishes to retain Vanguard to render to the Portfolio
the services described in the preceding paragraph on slightly different terms
than provided for in the Funds' Service Agreement, and Vanguard is willing to
render such services on those terms; and
WHEREAS, more than two-thirds of the registered investment companies
that are parties to the Funds' Service Agreement have agreed that Vanguard may
enter this Agreement with the Portfolio;
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. In consideration for the services provided to the Portfolio by
Vanguard pursuant to the Funds' Service Agreement, Vanguard shall be entitled to
receive from the Portfolio the out-of-pocket, incremental costs Vanguard incurs
in providing such services.
2. Notwithstanding anything in the Funds' Service Agreement to the
contrary, the Portfolio:
(a) shall not be obligated or permitted to make a capital
contribution or to acquire shares of Vanguard pursuant to Part
I of the Funds' Service Agreement, except to the extent that
the Portfolio's assets are not invested in shares of other
Vanguard funds;
(b) shall not be allocated, or obligated to pay, any portion of
the expenses of Vanguard pursuant to Section 3.2 of the Funds'
Service Agreement, except as set forth in Section 1 of this
Agreement or as otherwise determined by the Board of Directors
of Vanguard pursuant to Section 3.2(A)(4) of the Fund
Services' Agreement; and
(c) may have the expenses the Portfolio would otherwise bear
pursuant to Section 1 of this Agreement and Section 2.1 of the
Funds' Service Agreement reduced or eliminated by the savings
that accrue to the benefit of the Vanguard funds by virtue of
the operation of the Portfolio.
3. Except as provided above, the parties agree that the Portfolio shall
be subject to all the provisions of the Funds' Service Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed this 11th day of November, 2002
VANGUARD VARIABLE INSURANCE FUND
By __________________________________
Chairman and Chief Executive Officer
THE VANGUARD GROUP, INC.
By __________________________________
Chairman and Chief Executive Officer
