VANGUARD DIVERSIFIED EQUITY FUND SPECIAL SERVICE AGREEMENT
AGREEMENT, made as of this 18th day of March, 2005, between VANGUARD
TRUSTEES' EQUITY FUNDS, 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 several series, including the following:
o Vanguard Diversified Equity Fund (the "Fund");
WHEREAS, the Fund 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 Fund 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 Fund 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 Fund;
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 Fund by Vanguard
pursuant to the Funds' Service Agreement, Vanguard shall be entitled to receive
from the Fund the out-of-pocket, incremental costs Vanguard incurs in providing
such services.
2. Notwithstanding anything in the Funds' Service Agreement to the
contrary, the Fund:
(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 Fund'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
Funds' Service Agreement; and
(c) may have the expenses the Fund 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 Fund.
3. Except as provided above, the parties agree that the Fund 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 18th day of March, 2005.
VANGUARD TRUSTEES' EQUITY FUNDS
By __/s/_John J. Brennan_______________
Xxxx X. Xxxxxxx
Chairman and Chief Executive Officer
THE VANGUARD GROUP, INC.
By __/s/_John J. Brennan_______________
Xxxx X. Xxxxxxx
Chairman and Chief Executive Officer
