INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this 1st day of April, 2007, between Vanguard
Variable Insurance Fund, a Delaware statutory trust (the "Trust"), and ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ Company, a California corporation (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");
WHEREAS, the Trust offers a series of shares known as the Capital
Growth Portfolio (the "Fund");
WHEREAS, the Trust retained the Advisor to render investment advisory
services to the Fund under an Investment Advisory Agreement dated as of October
4, 2002 (the "Prior Agreement"), and the Advisor has been rendering such
services to the Fund pursuant to the terms and conditions set forth in the Prior
Agreement; and
WHEREAS, the Trust desires to amend and restate such Prior Agreement,
in certain respects, and the Advisor is willing to render investment advisory
services to the Fund in accordance with such amendments.
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, to manage assets of the
Fund at the discretion of the Trust's Board of Trustees (the "Board of
Trustees"). 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 Fund; to continuously review, supervise, and
administer an investment program for the Fund; 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 the 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 objective,
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.
3. Securities Transactions. The Advisor is authorized to select the brokers or
dealers that will execute 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 for such transactions, except
as otherwise permitted by the Board of Trustees pursuant to written policies
and procedures provided to the Advisor. The Advisor will promptly communicate
to the Trust's officers and the Board of Trustees such information relating to
portfolio transactions as they 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 daily net assets of the Fund and
will be paid to the Advisor quarterly in arrears.
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.
6. Compliance. The Advisor agrees to comply with all Applicable Law and all
policies, procedures, or reporting requirements that the Board of Trustees
reasonably adopts and communicates to the Advisor in writing, including, without
limitation, any such policies, procedures, or reporting requirements relating to
soft dollar or other brokerage arrangements. "Applicable Law" means (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 the investment management operations of the Advisor.
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 with respect to the Advisor's management of the
Fund under this Agreement.
9. Duration; Termination; Notices; Amendment. This Agreement will become
effective on the date hereof and will continue in effect for successive
twelve-month periods, only so long as this Agreement is approved at least
annually by votes of the 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 affected 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 or by vote of a majority of the outstanding voting securities of the
Fund, on thirty days' written notice to the Advisor, (ii) this
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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 Variable Insurance Fund
Capital Growth Portfolio
▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to the Advisor, at: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Company ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇▇ Telephone: ▇▇▇-▇▇▇-▇▇▇▇ Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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.
10. 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.
11. Confidentiality. The Advisor shall keep confidential any and all information
obtained in connection with the services rendered hereunder and relating
directly or indirectly to the Fund, the Trust, or Vanguard and shall not
disclose any such information to any person other than the Trust, the Board of
Trustees, Vanguard, and any director, officer, or employee of the Trust or
Vanguard, except (i) with the prior written consent of the Trust, (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 Advisor, or (iii) for information that is publicly available other than
due to disclosure by the Advisor or its affiliates or becomes known to the
Advisor from a source other than the Trust, the Board of Trustees, or Vanguard.
12. Proxy Policy. The Advisor acknowledges that Vanguard, at the direction of
the Fund, will vote the shares of all securities that are held by the Fund.
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13. 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 Agreement to be
executed as of the date first written above.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Company Vanguard Variable Insurance Fund
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 3/13/2007 /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 3/27/2007
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Signature Date Signature Date
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