Execution Copy
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this 1st day of May, 2005, by and between
VANGUARD FIXED INCOME SECURITIES FUNDS, a Delaware Statutory Trust (the "Trust")
and WELLINGTON MANAGEMENT COMPANY, LLP, a Massachusetts Partnership (the
"Advisor").
WHEREAS, the Fund is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended,
offering several diversified investment portfolios, each having its own
objectives and policies; and
WHEREAS, the Trust desires to retain the Advisor to render
investment advisory services to the Vanguard Long-Term Investment-Grade Fund, a
series of the Trust (the "Fund"), and the Advisor is willing to render such
services;
NOW THEREFORE, in consideration of mutual covenants herein
contained, the parties hereto agree as follows:
1. APPOINTMENT OF ADVISOR. The Trust hereby appoints the Advisor to
act as investment advisor to the Fund, for the period and on the terms set forth
in this Agreement. The Advisor accepts such appointment 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 Fund and to continuously
review, supervise and administer the investment program of the Fund, to
determine in its discretion the securities to be purchased or sold and the
portion of the Fund's assets to be held uninvested, to provide the Fund with
records concerning the Advisor's activities which the Fund is required to
maintain, and to render regular reports to the Fund's officers and Board of
Trustees concerning the Advisor's discharge of the foregoing responsibilities.
The Advisor shall discharge the foregoing responsibilities subject to the
control of the officers and the Board of Trustees of the Fund, and in compliance
with the objectives, policies and limitations for the Fund set forth in the
Fund's prospectus and applicable laws and regulations. The Advisor accepts such
employment and agrees to render the services and to provide, at its own expense,
the office space, furnishings and equipment and the personnel required by it to
perform the services on the terms and for the compensation provided herein.
3. PORTFOLIO TRANSACTIONS. The Advisor is authorized to select the
brokers or dealers that will execute the purchases and sales of securities for
the Fund and is directed to use its best efforts to obtain the best available
price and most favorable execution, except as prescribed herein. Subject to
policies established by the Board of Trustees, the Advisor may also be
authorized to effect individual securities transactions at commission rates in
excess of the minimum commission rates available, if the Advisor determines in
good faith that such amount of commission is reasonable in relation to the value
of the brokerage or research services provided by such broker or dealer, viewed
in terms of either that particular transaction or the Advisor's overall
responsibilities with respect to the Fund and the other funds in the same fund
group. The execution of such transactions shall not be deemed to represent an
unlawful act or breach of any duty created by this Agreement or otherwise. The
Advisor will promptly communicate to the officers and Trustees of the Fund such
information relating to portfolio transactions as they may reasonably request.
4. COMPENSATION OF THE ADVISOR. For the services to be rendered by
the Advisor as provided in this Agreement, the Fund shall pay to the Advisor at
the end of the Fund's fiscal quarters, a fee calculated by applying a quarterly
rate, based on the following annual percentage rates, to the total average
month-end net assets of the Fund for the quarter:
0.040% on the first $1 billion of net assets of the Fund 0.030% on the next $1
billion of net assets of the Fund 0.020% on the next $1 billion of net assets of
the Fund 0.015% on the net assets of the Fund over $3 billion
In the event of termination of this Agreement, the fee provided in
this paragraph shall be computed on the basis of the period ending on the last
business day on which this Agreement is in effect subject to a pro rata
adjustment based on the number of days elapsed in the current fiscal quarter as
a percentage of the total number of days in such quarter.
5. OTHER SERVICES. At the request of the Fund, the Advisor in its
discretion may make available to the Fund (or to The Vanguard Group, Inc. its
Service Company) office facilities, equipment, personnel and other services.
Such office facilities, equipment, personnel and services shall be provided for
or rendered by the Advisor and billed to the Fund at the Advisor's cost.
6. 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, including
changes in Partners of the Advisor, with regard to their affairs as each may
reasonably request.
7. STATUS OF ADVISOR. The services of the Advisor to the Fund are
not to be deemed exclusive, and the Advisor shall be free to render similar
services to others so long as its services to the Fund are not impaired thereby.
The Advisor shall be deemed to be an independent contractor and shall, 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.
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8. LIABILITY OF ADVISER. No provision of this Agreement shall 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 under this Agreement.
9. PERMISSIBLE INTERESTS. Subject to and in accordance with the
charters of the Fund and the Advisor, respectively, directors, agents and
shareholders of the Fund are or may be interested in the Advisor (or any
successor thereof) as directors, officers or partners, or otherwise; directors,
officers, agents and partners of the Advisor are or may be interested in the
Fund as directors, officers, shareholders or otherwise; and the Advisor (or any
successor) is or may be interested in the Fund as a shareholder or otherwise;
and that the effect of any such interrelationships shall be governed by said
charters and provisions of the Investment Company Act of 1940.
10. DURATION AND TERMINATION. This Agreement, unless sooner
terminated as provided herein, shall continue until April 30, 2006, and
thereafter, for periods of one year so long as such continuance is specifically
approved at least annually by vote of the Fund's Board of Trustees, including
the vote of a majority of the 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 approval. In addition, the question of continuance of
the Agreement may be presented to the shareholders of the Fund; in such event,
such continuance shall be effected only if approved by the affirmative vote of a
majority of the outstanding voting securities of the Fund.
This Agreement may be terminated by any Fund at any time, without
the payment of any penalty, by vote of a majority of the entire Board of
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Fund on 60 days' written notice to the Advisor, or by the
Advisor at any time, without the payment of any penalty, on 90 day's written
notice to the Fund. This Agreement will automatically and immediately terminate
in the event of its assignment. Any notice under this Agreement shall be given
in writing, addressed and delivered, or mailed postpaid, to the other party at
any office of such party.
As used in this Section 10, the terms "assignment", "interested
persons", a "vote of a majority of the outstanding voting securities" shall have
the respective meanings set forth in Section 2(a)(4), Section 2(a)(l9) and
Section 2(a)(42) of the Investment Company Act of 1940.
11. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
12. PROXY POLICY. With regard to the solicitation of shareholder
votes, the Fund shall vote the shares of all portfolio securities held by the
Fund.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of this 1st day of May, 2005.
Wellington Management Company, LLP Vanguard Fixed IncomeSecurities Funds
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Signature Date Signature Date
/s/Xxxxxxxx Xxxxxx 4/29/05 /s/R. Xxxxxxx Xxxxxx 04/27/2006
Print Name Date Print Name Date
Xxxxxxxx Xxxxxx 4/29/05 R. Xxxxxxx Xxxxxx 04/27/2006
VANGUARD LONG-TERM INVESTMENT-GRADE FUND
INVESTMENT ADVISORY AGREEMENT ADDENDUM
EFFECTIVE MAY 1, 2006
This Addendum amends section 4 of the Investment Advisory Agreement dated May 1,
2005 between Vanguard Fixed Income Securities Funds (the "Trust") and Wellington
Management Company, LLP ("Wellington Management," or the "Advisor") for the
management of Vanguard Long-Term Investment-Grade Fund (the "Fund"), a series of
the Trust, as follows:
A. AMENDMENT
4. COMPENSATION OF ADVISOR. For the services to be rendered by the Advisor as
provided in this Agreement, the Fund shall pay to the Advisor at the end of the
Fund's fiscal quarters, a fee calculated by applying a quarterly rate, based on
the following annual percentage rates, to the total average daily net assets of
the Fund for the quarter:
In the event of termination of this Agreement, the fee provided in this Section
for the period beginning on the first day of the then-current fiscal quarter and
ending on the last business day on which this Agreement is in effect (the "Short
Quarter") shall be calculated by applying the foregoing annual percentage rates
to the average daily net assets of the Fund during the Short Quarter, dividing
the result by four, and multiplying that figure by a ratio equal to the number
of days in the Short Quarter divided by the total number of days in the full
quarter.
B. MISCELLANEOUS
Except as specifically amended hereby, all of the terms and conditions of the
Investment Advisory Agreement are unaffected and shall continue to be in full
force and effect and shall be binding upon the parties in accordance with its
terms.
WELLINGTON MANAGEMENT COMPANY, LLP VANGUARD FIXED INCOME SECURITIES FUNDS
Xxxxxx Xxxxxx 6/14/06 Xxxx X. Xxxxxxx 6/5/06
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Signature Date Signature Date
XXXXXX XXXXXX XXXX X. XXXXXXX
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Print Name Print Name
