INVESTMENT ADVISORY AGREEMENT
This AGREEMENT, is made as of this 1st day of December, 2006, between
Vanguard World Funds, a Delaware business trust (the "Trust"), and
AllianceBernstein L.P., a Delaware limited partnership ("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 U.S.
Growth Fund (the "Fund"); and
WHEREAS, the Trust retained the Advisor to render investment advisory
services to the Fund under an Investment Advisory Agreement dated as of June 22,
2001 (the "Effective Date"); and
WHEREAS, the Trust desires to amend and restate such Investment
Advisory 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, 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 "AllianceBernstein
Portfolio"), 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 AllianceBernstein Portfolio; to
continuously review, supervise and administer an investment program for the
AllianceBernstein 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 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 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 the 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
AllianceBernstein Portfolio, and is directed to use its best efforts to obtain
the best available price and most favorable execution for such transactions
consistent with Section 28(e) of the Securities Exchange Act of 1934, and
subject to written policies and procedures provided to the Advisor. The Advisor
will promptly communicate to the Trust's officers and the Board of Trustees any
information relating to portfolio transactions 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 therefor, an investment advisory fee
consisting of a base fee plus a performance adjustment at the rates specified in
Schedule A to this Agreement, payable 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 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 in
relation to the AllianceBernstein Portfolio.
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; Certain Notices. The Advisor is
prohibited from consulting with other advisors of the Fund concerning
transactions for the Fund in securities or other assets. The Advisor agrees that
it will notify the Trust of any changes in the members of the general partners
of the Advisor within a reasonable time after such change.
10. Duration and Termination. This Agreement will become effective on
the Effective Date 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 such continuance specifically is approved at least
annually by the Board of Trustees, including a majority of those 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 or by vote of a majority of the outstanding voting securities of the
Fund, on thirty days' written notice to 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 at any office of such party as follows:
If to the Fund, at:
Vanguard U.S. Growth Fund
X.X. Xxx 0000
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Advisor, at:
AllianceBernstein L.P.
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 vote of a majority of the
outstanding voting securities of the Fund.
As used in this Section 10, 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. The Advisor shall keep confidential any and all
information obtained in connection with the services rendered hereunder 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.
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
AllianceBernstein 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 StateplaceDelaware 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 set forth herein.
AllianceBernstein, L.P. Vanguard World Funds
By AllianceBernstein Corporation,
Its General Partner
/s/Xxxxx X. Xxxxxx 19 Dec 2006 /s/Xxxx X. Xxxxxxx 20 Dec 2006
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Signature Date Signature Date
Xxxxx X. Xxxxxx Xxxx X. Xxxxxxx
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