INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of this 19th day of April, 2004, between
VANGUARD TRUSTEES' EQUITY FUNDS, a Delaware statutory trust (the "Trust"), and
Xxxxxxx X. Xxxxxxxxx & Co., LLC, a Delaware limited liability company (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"); and
WHEREAS, the Trust offers a series of shares known as Vanguard
International Value Fund (the "Fund"); and
WHEREAS, the Trust desires to retain the Advisor to render investment
advisory services to the Fund, and the Advisor is willing to render such
services.
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 "Xxxxxxxxx
Portfolio"). As of the date of this Agreement, the Xxxxxxxxx
Portfolio will consist of the portion of the assets of the
Fund that the Board of Trustees has determined to assign to
the Advisor, 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 Xxxxxxxxx
Portfolio; to continuously review, supervise, and administer
an investment program for the Xxxxxxxxx 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 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 objectives, 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. The Advisor may utilize the services of the investment
professionals of Alliance Capital Management L.P.'s Xxxxxxxxx
value investment unit for purposes of performing the
responsibilities of the Advisor under this Agreement, subject
to the Advisor retaining overall responsibility for such
services and any and all obligations and liabilities in
connection therewith.
3. Securities Transactions. The Advisor is authorized to select
the brokers or dealers that will execute purchases and sales
of securities for the Xxxxxxxxx Portfolio, and is directed to
use its best efforts to obtain the best available price and
most favorable execution for such transactions. To the extent
expressly permitted by the written policies and procedures
established by the Board of Trustees, and subject to Section
28(e) of the Securities Exchange Act of 1934, as amended, any
interpretations thereof by the Securities and Exchange
Commission (the "SEC") or its staff, and other applicable law,
the Advisor is permitted to pay a broker or dealer an amount
of commission for effecting a securities transaction in excess
of the amount of commission another broker or dealer would
have charged for effecting that transaction if the Advisor
determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Advisor's
overall responsibilities to the accounts as to which it
exercises investment discretion. The execution of such
transactions in conformity with the authority expressly
referenced in the immediately preceding sentence shall not be
deemed to represent an unlawful act or breach of any duty
created by this Agreement or otherwise. The Advisor agrees to
use its best efforts to comply with any directed brokerage or
other brokerage arrangements that the Fund communicates to the
Advisor in writing. The Advisor will promptly communicate to
the Trust's officers and the Board of Trustees any information
relating to the portfolio transactions the Advisor has
directed on behalf of the Xxxxxxxxx Portfolio as such officers
or the Board 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. The fee will be calculated based
on annual percentage rates applied to the average month-end
net assets of the Xxxxxxxxx Portfolio and will be paid to the
Advisor quarterly.
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, including, but not limited to,
information about changes in partners of the Advisor.
6. Compliance.
6.1. Compliance with Applicable Laws and Board Requirements. The
Advisor agrees to comply with all Applicable Laws and all
policies, procedures or reporting requirements that the Board
of Trustees of the Trust reasonably adopts and communicates to
the Advisor in writing, including, without limitation, any
such policies, procedures or reporting requirements relating
to soft dollar or directed brokerage arrangements.
6.2. Disclosure of Compliance Matters. If the Advisor receives any
written or other communication concerning or constituting a
Compliance Matter, then the Advisor shall provide the Trust a
written summary of the material facts and circumstances
concerning such Compliance Matter within ten (10) calendar
days of the earlier of the date on which such Compliance
Matter was received by the Advisor, or the date on which the
general counsel's office of the Advisor obtained actual
knowledge of such Compliance Matter. The Advisor shall provide
the Trust with a written summary of any material changes in
the facts or circumstances concerning any Compliance Matter
within ten (10) calendar days of the occurrence of such
changes.
6.3. Certain Definitions. "Applicable Laws" means, with respect to
any party to this Agreement, (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 such party.
"Compliance Matter" means any written or other communication
sent to the Advisor by any United States federal or state
agency or regulatory authority or any self-regulatory
authority, in each case having jurisdiction over the Advisor,
in connection with the Advisor's compliance with, or failure
to comply with, Applicable Laws as they relate to the
Advisor's investment management operations. For the avoidance
of doubt, the term "Advisor" as used in this Section 6 shall
include both Xxxxxxx X. Xxxxxxxxx & Co., LLC and Alliance
Capital Management L.P.
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 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 a period of two years thereafter, and shall
continue in effect for successive twelve-month periods
thereafter, only so long as this Agreement is approved at
least annually by votes of the Trust's 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 effected 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 of the Trust or by vote of a majority of the outstanding voting
securities of the Fund, on thirty 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 Trustees' Equity Fund - Vanguard International Value Fund
X.X. Xxx 0000
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Advisor, at:
Xxxxxxx X. Xxxxxxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
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 of the Trust.
As used in this Section 9, 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. Each party to this Agreement may obtain (such party, a
"Receiving Party") from the other party to this Agreement or an affiliate
thereof (such party, a "Disclosing Party") information in connection with the
services rendered hereunder and relating directly or indirectly to the Advisor,
the Fund, the Trust, Vanguard or a Compliance Matter (collectively,
"Confidential Information"). Each party to this Agreement shall keep
confidential any and all Confidential Information and shall not disclose any
Confidential Information to any person other than the Advisor, the Fund, the
Trust, the Board of Directors of the Trust, Vanguard, and any director, officer,
or employee of the Advisor, the Fund, the Trust, or Vanguard, except (i) with
the prior written consent of a Disclosing Party, (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
Receiving Party, or (iii) for Confidential Information that is publicly
available other than due to disclosure by the Receiving Party or its affiliates
or becomes known to the Receiving Party from a source other than a Disclosing
Party. None of the parties may use or permit the use of Confidential Information
in violation of Applicable Laws.
13. Proxy Policy. The Advisor acknowledges that Vanguard will vote the shares of
all securities that are held by the Fund unless other mutually acceptable
arrangements are made with the Advisor with respect to the Xxxxxxxxx Portfolio.
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 Investment
Advisory Agreement to be executed as of the date first set forth herein.
XXXXXXX X. XXXXXXXXX & CO., LLC VANGUARD TRUSTEES' EQUITY FUNDS
/s/Xxxxx Xxxxxx 4-15-04 /s/R. Xxxxxxx Xxxxxx 4/14/04
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Signature Date Signature Date
Xxxxx Xxxxxx 4-15-04 R. Xxxxxxx Xxxxxx 4/14/04
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Print Name Date Print Name Date
VANGUARD INTERNATIONAL VALUE FUND
INVESTMENT ADVISORY AGREEMENT ADDENDUM
EFFECTIVE MAY 1, 2006
This Addendum amends Section 1.1 of Schedule A of the Investment Advisory
Agreement dated April 19, 2004, between Vanguard Trustees' Equity Funds (the
"Trust") and Xxxxxxx X. Xxxxxxxxx & Co., LLC ("Xxxxxxxxx," or the "Advisor") for
the management of Vanguard International Value Fund (the "Fund"), a series of
the Trust, as follows:
A. AMENDMENT
1.1. CALCULATION OF THE BASE FEE. The Base Fee for each fiscal quarter of the
Fund is calculated by multiplying an Annual Percentage Rate (shown below) to the
average daily net assets of the Xxxxxxxxx Portfolio during such fiscal quarter,
and dividing the result by four. The Fund's fiscal quarter ends are the months
ending October, January, April, and July.
Annual Percentage Rate Schedule
Average Annual
Net Assets Percentage Rate
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 Xxxxxxxxx Portfolio 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.
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be
executed as of the date first set forth herein.
XXXXXXX X. XXXXXXXXX & CO., LLC VANGUARD TRUSTEES EQUITY FUNDS
Xxxxx X. Xxxxxx 6/13/06 Xxxx X. Xxxxxxx 6/5/06
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Signature Date Signature Date
XXXXXX X. XXXXXX XXXX X. XXXXXXX
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