XX-00.XX
VANGUARD QUANTITATIVE PORTFOLIOS, INC.
INVESTMENT ADVISORY AGREEMENT ADDENDUM
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Effective May 1, 1998
This Addendum amends Section 4 of the Investment Advisory Agreement dated
April 1, 1996 between Vanguard QUANTITATIVE PORTFOLIOS, Inc. (the "Fund") and
Franklin Portfolio Associates ("FPA").
1. New Fee Schedules. The Fund will compensate FPA according to the
following fee schedules:
BASIC FEE
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Assets Managed Annual Rate
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First $100 million 0.30%
Next $650 million 0.15%
Next $1.25 billion 0.10%
Next $3 billion 0.08%
Over $5 billion 0.06%
INCENTIVE /PENALTY FEE vs. S&P 500 COMPOSITE STOCK PRICE INDEX*
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Performance Fee Adjustment
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+6% or more +60% of Basic Fee
+3% to +6% +30% of Basic Fee
-3% to +3% 0
-3% to -6% -30% of Basic Fee
Less than -6% -60% of Basic Fee
*Incentive/penalty fees will be calculated based on performance of the Fund
relative to the performance of the S&P 500 Composite Stock Price Index for the
thirty-six months preceding the end of the fiscal quarter for which advisory
fees are due.
2. Transition Schedule for Incentive/Penalty Fees. The new
incentive/penalty fee schedule will not be fully operable until April 30, 2001.
Until that date, a transition schedule consisting of varying percentages of the
old and new incentive/penalty fees will be used. For each fiscal quarter
included in the 36 months beginning May 1, 1998, the incentive/penalty fee will
be calculated as the sum of a and b, whereby:
a = # of months elapsed since 5/1/1998 X the fee adjustment calculated under the new schedule
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36 months
b = # of months remaining until 4/30/2001 X the fee adjustment calculated under the old schedule
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36 months
3. No Effect on Other Provisions. Except with respect to these fee
schedules, all other provisions of the Investment Advisory Agreement dated April
1, 1996 remain in full force and effect.
ATTEST: VANGUARD QUANTITATIVE PORTFOLIOS, INC.
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Secretary President, Chief Executive Officer Date
& Chairman of the Board
ATTEST: FRANKLIN PORTFOLIO ASSOCIATES
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President Date
