UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(E)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-12
MADISON/CLAYMORE COVERED CALL & EQUITY STRATEGY FUND
(Name of Registrant As Specified in its Declaration of Trust)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
MADISON GRAPHIC
INVESTMENT ADVISORS CLAYMORE (R)
Graphic A GUGGENHEIM PARTNERS COMPANY
MADISON/CLAYMORE COVERED CALL & EQUITY
STRATEGY FUND
2455 CORPORATE WEST DRIVE
LISLE, ILLINOIS 60532
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 20, 2010
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Notice is hereby given to the holders of common shares of beneficial
interest, par value $0.01 per share ("Shares"), of Madison/Claymore Covered Call
& Equity Strategy Fund (the "Fund") that the annual meeting of Shareholders of
the Fund (the "Annual Meeting") will be held at the offices of the Fund, 2455
Corporate West Drive, Lisle, Illinois 60532, on Tuesday, July 20, 2010, at 1:00
p.m. Central time. The Annual Meeting is being held for the following purposes:
1. To elect two Trustees as Class III Trustees to serve until the
Fund's 2013 annual meeting of Shareholders or until their
respective successors shall have been elected and qualified;
2. To transact such other business as may properly come before the
Annual Meeting or any adjournments or postponements thereof.
THE BOARD OF TRUSTEES (THE "BOARD") OF THE FUND, INCLUDING THE
INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL.
The Board has fixed the close of business on May 21, 2010, as the
record date for the determination of Shareholders entitled to notice of, and to
vote at, the Annual Meeting. We urge you to mark, sign, date, and mail the
enclosed proxy in the postage-paid envelope provided or record your voting
instructions via telephone or the Internet so you will be represented at the
Annual Meeting.
By order of the
Board of Trustees,
/S/J. Thomas Futrell
J. Thomas Futrell
Chief Executive Officer
Lisle, Illinois
June 24, 2010
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING
IN PERSON OR BY PROXY. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING,
PLEASE VOTE YOUR PROXY BY TELEPHONE, INTERNET OR MAIL. IF VOTING YOUR PROXY BY
MAIL, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING
POSTAGE-PAID ENVELOPE. IF YOU ATTEND THE ANNUAL MEETING AND WISH TO VOTE IN
PERSON, YOU WILL BE ABLE TO DO SO AND YOUR VOTE AT THE ANNUAL MEETING WILL
REVOKE ANY PROXY YOU MAY HAVE SUBMITTED. MERELY ATTENDING THE ANNUAL MEETING,
HOWEVER, WILL NOT REVOKE ANY PREVIOUSLY SUBMITTED PROXY. YOUR VOTE IS EXTREMELY
IMPORTANT. NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN, PLEASE SEND IN YOUR
PROXY CARD (OR VOTE YOUR PROXY BY TELEPHONE OR THROUGH THE INTERNET PURSUANT TO
THE INSTRUCTIONS CONTAINED ON THE PROXY CARD) TODAY.
MADISON/CLAYMORE COVERED CALL & EQUITY
STRATEGY FUND
--------------------------------------------------------------------------------
PROXY STATEMENT
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FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 20, 2010
This document gives you information you need to vote on the matters
listed on the accompanying Notice of Annual Meeting of Shareholders ("Notice of
Annual Meeting"). Much of the information in this proxy statement ("Proxy
Statement") is required under rules of the Securities and Exchange Commission
("SEC"). If there is anything you don't understand, please contact us at our
toll-free number, (800) 851-0264.
This Proxy Statement is furnished to the holders of common shares of
beneficial interest, par value $0.01 per share ("Shares"), of Madison/Claymore
Covered Call & Equity Strategy Fund (the "Fund") in connection with the
solicitation by the Board of Trustees of the Fund (the "Board") of proxies to
be voted at the annual meeting of Shareholders of the Fund to be held on
Tuesday, July 20, 2010, and any adjournment or postponement thereof (the
"Annual Meeting"). The Annual Meeting will be held at the offices of the Fund,
2455 Corporate West Drive, Lisle, Illinois 60532 on July 20, 2010, at 1:00 p.m.
Central time. The Notice of Annual Meeting, this Proxy Statement and the
enclosed proxy card are first being sent to the Fund's Shareholders on or about
June 28, 2010.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING TO BE HELD ON JULY 20, 2010: This proxy statement is
available on the Internet at www.proxyvote.com. On this site, you will be able
to access the proxy statement for the Annual Meeting and any amendments or
supplements to the foregoing material required to be furnished to
Shareholders.
o WHY IS A SHAREHOLDER MEETING BEING HELD?
The Fund's Shares are listed on the New York Stock Exchange (the
"NYSE") under the ticker symbol "MCN," which requires the Fund to
hold a meeting of Shareholders to elect Trustees each fiscal
year.
o WHAT PROPOSAL WILL BE VOTED ON AT THE ANNUAL MEETING?
Shareholders of the Fund are being asked to vote on the following
proposal at the Annual Meeting:
To elect two Trustees as Class III Trustees (Mr. Ronald E.
Toupin, Jr. and Mr. Lorence D. Wheeler) to serve until the
Fund's 2013 annual meeting of shareholders or until their
respective successors shall have been elected and qualified.
1
o WILL YOUR VOTE MAKE A DIFFERENCE?
YES! Your vote is important and could make a difference in the
governance of the Fund, no matter how many Shares you own.
o WHO IS ASKING FOR YOUR VOTE?
The enclosed proxy is solicited by the Board for use at the
Annual Meeting to be held on Tuesday, July 20, 2010, and, if the
Annual Meeting is adjourned or postponed, at any later meetings,
for the purposes stated in the Notice of Annual Meeting.
o HOW DOES THE BOARD RECOMMEND THAT SHAREHOLDERS VOTE ON THE
PROPOSAL?
The Board, including the Independent Trustees, unanimously
recommends that you vote "FOR ALL" of the nominees for the Board
of Trustees (Mr. Ronald E. Toupin, Jr., and Mr. Lorence D.
Wheeler).
o WHO IS ELIGIBLE TO VOTE?
Shareholders of record of the Fund at the close of business on
May 21, 2010 (the "Record Date") are entitled to be present and
to vote at the Annual Meeting or any adjournment or postponement
thereof. Shareholders will be entitled to one vote on each matter
to be voted for each Share of the Fund held and a fractional vote
with respect to fractional Shares, with no cumulative voting.
o HOW DO YOU VOTE YOUR SHARES?
Whether or not you plan to attend the Annual Meeting, we urge you
to complete, sign, date, and return the enclosed proxy card in
the postage-paid envelope provided or vote your proxy via
telephone or the Internet so your Shares will be represented at
the Annual Meeting. Information regarding how to vote your proxy
via telephone or the Internet is included on the enclosed proxy
card. The required control number for Internet and telephone
voting is printed on the enclosed proxy card. The control
number is used to match proxy cards with shareholders' respective
accounts and to ensure that, if multiple proxy cards are
executed, Shares are voted in accordance with the proxy card
bearing the latest date. If you wish to attend the Annual Meeting
and vote in person, you will be able to do so. You may contact
the Fund at (800) 851-0264 to obtain directions to the site of
the Annual Meeting.
All Shares represented by properly executed proxies received
prior to the Annual Meeting will be voted at the Annual Meeting
in accordance with the instructions marked thereon or otherwise
as provided therein. IF YOU SIGN THE PROXY CARD, BUT DON'T FILL
IN A VOTE, YOUR SHARES WILL BE VOTED IN ACCORDANCE WITH THE
BOARD'S
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RECOMMENDATION. If any other business is brought before the
Annual Meeting, your Shares will be voted at the proxies'
discretion.
Shareholders who execute proxies may revoke them at any time
before they are voted by filing with the Fund a written notice of
revocation, by delivering a duly executed proxy bearing a later
date or by attending the Annual Meeting and voting in person.
Merely attending the Annual Meeting, however, will not revoke any
previously submitted proxy.
o WHAT VOTE IS REQUIRED TO APPROVE THE PROPOSAL?
The affirmative vote of a majority of the Shares present in
person or represented by proxy and entitled to vote on the matter
at the Annual Meeting at which a quorum is present is necessary
to elect a Trustee nominee.
o HOW MANY SHARES OF THE FUND WERE OUTSTANDING AS OF THE RECORD
DATE?
At the close of business on May 21, 2010, the Fund had 19,268,423
Shares outstanding.
3
THE PROPOSAL: ELECTION OF TRUSTEES
The Fund's Shares are listed on the NYSE, which requires the Fund to
hold a meeting of Shareholders to elect Trustees each fiscal year. Therefore,
Shareholders of the Fund are being asked to elect two Trustees (Mr. Ronald E.
Toupin, Jr. and Mr. Lorence D. Wheeler are the nominees) as Class III Trustees
to serve until the Fund's 2013 annual meeting of Shareholders or until their
respective successors shall have been elected and qualified.
COMPOSITION OF THE BOARD OF TRUSTEES
The Trustees of the Fund are classified into three classes of
Trustees: Class I Trustees, Class II Trustees and Class III Trustees. Assuming
each of the nominees is elected at the Annual Meeting, the Board will be
constituted as follows:
CLASS I TRUSTEES
-Mr. Randall C. Barnes and Mr. Frank E. Burgess are the Class I
Trustees. It is currently anticipated that Class I Trustees will next
stand for election at the Fund's 2011 annual meeting of Shareholders.
CLASS II TRUSTEES
- Mr. James R. Imhoff, Jr. and Mr. Ronald A. Nyberg are the Class II
Trustees. It is currently anticipated that Class II Trustees will next
stand for election at the Fund's 2012 annual meeting of Shareholders.
CLASS III TRUSTEES
-Mr. Ronald E. Toupin, Jr. and Mr. Lorence D. Wheeler are the Class
III Trustees. Mr. Toupin and Mr. Wheeler are standing for election at
the Annual Meeting. It is currently anticipated that Class III
Trustees will next stand for election at the Fund's 2013 annual
meeting of Shareholders.
Generally, the Trustees of only one class are elected at each annual
meeting of Shareholders, so that the regular term of only one class of Trustees
will expire annually and any particular Trustee stands for election only once
in each three year period.
Each Class III Trustee nominee will hold office for three years or
until his successor shall have been elected and qualified. The other Trustees
of the Fund will continue to serve under their current terms as described
above. Unless authority is withheld, it is the intention of the persons named
in the proxy to vote the proxy "FOR" the election of each Class III Trustee
nominee named above. Each Class III Trustee nominee has indicated that he has
consented to serve as a Trustee if elected at the Annual Meeting. If a
designated nominee declines or otherwise becomes unavailable for election,
however, the proxy confers discretionary power on the persons named therein to
vote in favor of a substitute nominee or nominees.
4
TRUSTEES
Certain information concerning the Trustees and officers of the Fund
is set forth in the tables below. The "interested" Trustees (as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended (the "1940
Act")) are indicated below. Independent Trustees are those who are not
interested persons of the Fund, the Fund's investment adviser, Claymore
Advisors, LLC ("Claymore" or the "Adviser"), or the Fund's investment manager,
Madison Asset Management, LLC ("Madison" or the "Investment Manager"), and
comply with the definition of "independent" (as defined in Rule 10A-3 of the
Securities Exchange Act of 1934, as amended) (the "Independent Trustees").
The Fund is part of a fund complex (referred to herein as the "Fund
Complex") comprised of fourteen closed-end funds, including the Fund, and
forty-two exchange-traded funds. The Fund Complex is overseen by multiple
boards of trustees.
TERM OF
OFFICE(2) NUMBER OF
AND PORTFOLIOS IN OTHER
POSITION(S) LENGTH FUND COMPLEX DIRECTORSHIPS
NAME, ADDRESS(1) HELD WITH OF TIME PRINCIPAL OCCUPATION OVERSEEN BY HELD BY
AND YEAR OF BIRTH FUND SERVED DURING THE PAST FIVE YEARS TRUSTEE TRUSTEE
------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES:
Randall C. Barnes Trustee Trustee Private Investor. Formerly, Senior Vice 51 None.
Year of birth: 1951 since 2004 President & Treasurer (1993-1997),
President, Pizza Hut International
(1991-1993) and Senior Vice President,
Strategic Planning and New Business
Development (1987-1990) of PepsiCo, Inc.
James R. Trustee Trustee Chairman and CEO of First Weber Group. 1 Director, Park
Imhoff, Jr. since 2004 Bank. Trustee,
5250 East Terrace Drive Madison Strategic
Madison, WI 53718 Sector Premium
Year of Birth: 1944 Fund and funds in
the Mosaic fund
complex.
Ronald A. Nyberg Trustee Trustee Partner of Nyberg & Cassioppi, LLC, 54 None.
Year of birth: 1953 since 2004 a law firm specializing in Corporate Law,
Estate Planning and Business Transactions
(2000-present). Formerly, Executive Vice
President, General Counsel and Corporate
Secretary of Van Kampen Investments (1982-1999).
Ronald E. Trustee Trustee Formerly, Vice President, Manager and 51 None.
Toupin, Jr.(3) since 2004 Portfolio Manager of Nuveen Asset Management
Year of birth: 1958 (1998-1999), Vice President of Nuveen Investment
Advisor Corporation (1992-1999), Vice President
and Manager of Nuveen Unit Investment Trusts
(1991-1999) and Assistant Vice President and
Portfolio Manager of Nuveen Unit Investment
Trusts (1988-1999), each of John Nuveen &
Company, Inc. (1982-1999).
5
TERM OF
OFFICE(2) NUMBER OF
AND PORTFOLIOS IN OTHER
POSITION(S) LENGTH FUND COMPLEX DIRECTORSHIPS
NAME, ADDRESS(1) HELD WITH OF TIME PRINCIPAL OCCUPATION OVERSEEN BY HELD BY
AND YEAR OF BIRTH FUND SERVED DURING THE PAST FIVE YEARS TRUSTEE TRUSTEE
---------------------------------------------------------------------------------------------------------------------
Lorence D. Trustee Trustee Formerly, President of Credit Union 1 Director, Grand
Wheeler(3) since 2004 Benefits Services Inc.; Pension Specialist Mountain Bank
135 County Rd 8300 for CUNA Mutual Group. FSB and Grand
Tabernash, CO 80478 Mountain
Year of Birth: 1938 Bancshares Inc.
Trustee, Madison
Strategic Sector
Premium Fund
and funds in the
Mosaic fund
complex.
INTERESTED TRUSTEES:
Frank E. Burgess+ Trustee, Trustee Founder, President and CEO of Madison 1 Director, Capitol
550 Science Drive Senior since 2004 Investment Advisors, Inc. (1974-present) Bankshares, Inc.,
Madison, WI 53711 Vice and of Madison Asset Management, LLC. Outrider
Year of Birth: 1942 President Foundation, Inc.,
American Riviera
Bank of CA, and
Capitol
Bankshares of WI.
Trustee, Madison
Strategic Sector
Premium Fund
and funds in the
Mosaic fund
complex.
----------
+ "Interested person" of the Fund as defined in the 1940 Act. Mr. Burgess is
an interested person of the Fund because he is an officer of the Investment
Manager and certain of its affiliates.
(1) The business address of each Trustee of the Fund is 2455 Corporate West
Drive, Lisle, Illinois 60532, unless otherwise noted.
(2) Each Trustee is generally expected to serve a three year term concurrent
with the class of Trustees for which he serves.
(3) Nominee for election as a Trustee at the Annual Meeting.
QUALIFICATIONS AND EXPERIENCE OF TRUSTEES AND NOMINEES
The Trustees were selected to serve and continue on the Board based
upon their skills, experience, judgment, analytical ability, diligence, ability
to work effectively with other Trustees, availability and commitment to attend
meetings and perform the responsibilities of a Trustee and, for each
Independent Trustee, a demonstrated willingness to take an independent and
questioning view of management.
The following is a summary of the experience, qualifications,
attributes and skills of each Trustee that support the conclusion, as of the
date of this proxy statement, that each Trustee should serve as a Trustee in
light of the Fund's business and structure. References to the qualifications,
attributes and skills of Trustees are pursuant to requirements of the SEC, do
not constitute holding out of the Board or any Trustee as having any special
expertise and shall not impose any greater responsibility or liability on any
such person or on the Board by reason thereof.
6
Randall C. Barnes. Mr. Barnes has served as a Trustee of the Fund and
other funds in the Claymore fund complex since 2004. Mr. Barnes also serves on
the board of certain Claymore sponsored Canadian funds. Through his service as
a Trustee of the Fund and as chairman of the Audit Committee, employment
experience as President of Pizza Hut International and Treasurer of PepsiCo,
Inc. and his personal investment experience, Mr. Barnes is experienced in
financial, accounting, regulatory and investment matters.
Frank E. Burgess. Mr. Burgess has served as a Trustee of the Fund
since 2004. Through his service as a Trustee of the Fund, his service on other
public and private company boards, including on other investment company
boards, and his experience as founder, President and Chief Executive Officer of
the Manager and Madison Investment Advisors, Inc., each a registered investment
adviser, Mr. Burgess is experienced in financial, investment and regulatory
matters.
James Imhoff. Mr. Imhoff has served as a Trustee of the Fund since
2004. Through his service as a Trustee of the Fund, his service on other public
and private company boards, including on other investment company boards, his
experience as Chairman and Chief Executive Officer of First Weber Group, a real
estate services company, and his prior experience, including board membership
of charitable and community boards, Mr. Imhoff is experienced in financial,
investment, technology and regulatory matters.
Ronald A. Nyberg. Mr. Nyberg has served as a Trustee of the Fund and
other funds in the Claymore fund complex since 2003. Through his service as a
Trustee of the Fund and as chairman of the Nominating & Governance Committee,
his professional training and experience as an attorney and partner of a law
firm, Nyberg & Cassioppi LLC, and his prior employment experience, including
Executive Vice President and General Counsel of Van Kampen Investments, an
asset management firm, Mr. Nyberg is experienced in financial, regulatory and
governance matters.
Ronald E. Toupin, Jr. Mr. Toupin has served as a Trustee of the Fund
and other funds in the Claymore fund complex since 2003. Through his service as
a Trustee of the Fund and as chairman of the Board, and his professional
training and employment experience, including Vice President and Portfolio
Manager for Nuveen Asset Management, an asset management firm, Mr. Toupin is
experienced in financial, regulatory and investment matters.
Lorence D. Wheeler. Mr. Wheeler has served as a Trustee of the Fund
since 2004. Through his service as a Trustee of the Fund, his service on other
public and private company boards, including on other investment company
boards, his professional training and his prior experience, including President
of Credit Union Benefits Services Inc., Mr. Wheeler is experienced in
financial, investment and regulatory matters.
Each Trustee also now has considerable familiarity with the Fund, its
adviser, manager and other service providers, and their operations, as well as
the
7
special regulatory requirements governing regulated investment companies and
the special responsibilities of investment company trustees as a result of his
substantial prior service as a Trustee of the Fund.
EXECUTIVE OFFICERS
The following information relates to the executive officers of the
Fund who are not Trustees. The officers of the Fund are appointed by the Board
and serve until their respective successors are chosen and qualified. The
Fund's officers receive no compensation from the Fund but may also be officers
or employees of the Adviser, the Investment Manager or affiliates of the
Adviser or the Investment Manager and may receive compensation in such
capacities.
TERM OF
OFFICE(2) AND
LENGTH
NAME, ADDRESS(1) OF TIME PRINCIPAL OCCUPATION DURING
AND YEAR OF BIRTH TITLE SERVED THE PAST FIVE YEARS
----------------------------------------------------------------------------------------------
J. Thomas Futrell Chief Since 2008 Senior Managing Director, Chief Investment
Year of birth: 1955 Executive Officer (2008-present) of Claymore Advisors,
Officer LLC and Claymore Securities, Inc.; Chief
Executive Officer of certain funds in the Fund
Complex. Formerly, Managing Director in
charge of Research (2000-2007) for Nuveen
Asset Management.
Kevin M. Robinson Chief Since 2008 Senior Managing Director, General Counsel
Year of birth: 1959 Legal and Corporate Secretary (2007-present) of
Officer Claymore Advisors, LLC and Claymore
Securities, Inc.; Chief Legal Officer of certain
funds in the Fund Complex. Formerly,
Associate General Counsel (2000-2007) of
NYSE Euronext, Inc. Formerly, Archipelago
Holdings, Inc. Senior Managing Director and
Associate General Counsel (1997-2000) of
ABN Amro Inc. Formerly, Senior Counsel in
the Enforcement Division (1989-1997) of the
U.S. Securities and Exchange Commission.
Steven M. Hill Chief Since 2004 Senior Managing Director of Claymore
Year of birth: 1964 Financial Advisors, LLC and Claymore Securities, Inc.
Officer, (2005- present). Formerly, Chief Financial
Chief Officer (2005-2006) Claymore Group Inc.
Accounting Managing Director of Claymore Advisors,
Officer and LLC and Claymore Securities, Inc. (2003-
Treasurer 2005). Previously, Treasurer of Henderson
Global Funds and Operations Manager for
Henderson Global Investors (NA) Inc., (2002-
2003); Managing Director, FrontPoint Partners
LLC (2001- 2002); Vice President, Nuveen
Investments (1999-2001); Chief Financial
Officer, Skyline Asset Management LP,
(1999); Vice President, Van Kampen
Investments and Assistant Treasurer, Van
Kampen mutual funds (1989-1999).
8
TERM OF
OFFICE(2) AND
LENGTH
NAME, ADDRESS(1) OF TIME PRINCIPAL OCCUPATION DURING
AND YEAR OF BIRTH TITLE SERVED THE PAST FIVE YEARS
--------------------------------------------------------------------------------------------
Bruce Saxon Chief Since 2006 Vice President - Fund Compliance Officer of
Year of birth: 1957 Compliance Claymore Securities, Inc. (Feb. 2006-present).
Officer Chief Compliance Officer of certain funds in
the Fund Complex. Chief Compliance
Officer/Assistant Secretary of Harris
Investment Management, Inc. (2003-2006).
Director-Compliance of Harrisdirect LLC
(1999-2003).
Mark E. Mathiasen Secretary Since 2008 Vice President, Assistant General Counsel of
Year of birth: 1978 Claymore Group Inc. (2007-present). Secretary
of certain funds in the Fund Complex.
Previously, Law Clerk, Idaho State Courts
(2003-2006).
Jay Sekelsky Vice Since 2004 Managing Director of Madison Investment
Year of birth: 1959 President Advisors, Inc. and Vice President of Madison
Asset Management, LLC. Vice President of
Madison Strategic Sector Premium Fund and
funds in the Mosaic fund complex.
Katherine L. Frank Vice Since 2004 Managing Director of Madison Investment
Year of birth: 1960 President Advisors, Inc. Vice President of Madison Asset
Management. Trustee and President of
Madison Strategic Sector Premium Fund and
funds in the Mosaic fund complex. Trustee of
MEMBERS mutual fund family and Ultra
Series mutual funds, both of WI.
Greg Hoppe Vice Since 2008 Vice President of Madison Mosaic, LLC; Vice
Year of birth: 1969 President President of Madison Asset Management, LLC.
Ray DiBernardo Vice Since 2009 Vice President of Madison Investment
Year of birth: 1962 President Advisors, Inc.
James Howley Assistant Since 2007 Vice President, Fund Administration of
Year of birth: 1972 Treasurer Claymore Securities, Inc. (2004-present).
Assistant Treasurer of certain funds in the Fund
Complex. Previously, Manager, Mutual Fund
Administration of Van Kampen Investments,
Inc (1996-2004).
Donald P. Swade Assistant Since 2008 Vice President, Fund Administration (2006-
Year of birth: 1972 Treasurer present) of Claymore Advisors, LLC and
Claymore Securities, Inc.; Assistant Treasurer
of certain funds in the Fund Complex.
Formerly, Manager-Mutual Fund Financial
Administration for Morgan Stanley/Van Kampen
Investments (2003-2006).
Mark J. Furjanic Assistant Since 2008 Vice President, Fund Administration-Tax
Year of birth: 1959 Treasurer (2005-present) of Claymore Advisors, LLC and
Claymore Securities, Inc.; Assistant Treasurer
of certain funds in the Fund Complex.
Formerly, Senior Manager for Ernst & Young
LLP (1999-2005).
9
TERM OF
OFFICE(2) AND
LENGTH
NAME, ADDRESS(1) OF TIME PRINCIPAL OCCUPATION DURING
AND YEAR OF BIRTH TITLE SERVED THE PAST FIVE YEARS
------------------------------------------------------------------------------------------
Melissa J. Nguyen Assistant Since 2006 Vice President, Assistant General Counsel of
Year of birth: 1978 Secretary Claymore Group Inc. (2005-present). Secretary
of certain funds in the Fund Complex.
Formerly, Associate, Vedder Price, P.C.
(2003-2005).
Elizabeth H. Hudson Assistant Since 2009 Assistant General Counsel of Claymore Group
Year of birth: 1980 Secretary Inc. (2009-present). Assistant Secretary of
certain funds in the Fund Complex. Previously,
associate at Bell, Boyd & Lloyd LLP (nka
K&L Gates LLP) (2007-2008). J.D.,
Northwestern University (2004-2007).
----------
(1) The business address of each officer of the Fund is 2455 Corporate West
Drive, Lisle, Illinois 60532, unless otherwise noted.
(2) Officers serve at the pleasure of the Board and until his or her successor
is appointed and qualified or until his or her earlier resignation or
removal.
BOARD LEADERSHIP STRUCTURE
The primary responsibility of the Board of Trustees is to represent
the interests of the Fund and to provide oversight of the management of the
Fund. The Fund's day-to-day operations are managed by the Adviser, the
Investment Manager and other service providers who have been approved by the
Board. The Board is currently comprised of six Trustees, five of whom
(including the chairman) are classified under the 1940 Act as "non-interested"
persons of the Fund ("Independent Trustees") and one of whom is classified as
an interested person of the Fund ("Interested Trustee"). Generally, the Board
acts by majority vote of all the Trustees, including a majority vote of the
Independent Trustees if required by applicable law.
The Board has appointed an Independent Chairperson, who presides at
Board meetings and who is responsible for, among other things, participating in
the planning of Board meetings, setting the tone of Board meetings and seeking
to encourage open dialogue and independent inquiry among the trustees and
management. The Board has established two standing committees (as described
below and has delegated certain responsibilities to those committees, each of
which is comprised solely of Independent Trustees. The Board and its committees
meet periodically throughout the year to oversee the Fund's activities, review
contractual arrangements with service providers, review the Fund's financial
statements, oversee compliance with regulatory requirements, and review
performance. The Independent Trustees are represented by independent legal
counsel at Board and committee meetings. The Board has determined that this
leadership structure, including an Independent Chairperson, a supermajority of
Independent Trustees and committee membership limited to Independent Trustees,
is appropriate in light of the characteristics and circumstances of the Fund.
10
BOARD COMMITTEES
The Trustees have determined that the efficient conduct of the
Trustees' affairs makes it desirable to delegate responsibility for certain
specific matters to committees of the Board. The committees meet as often as
necessary, either in conjunction with regular meetings of the Trustees or
otherwise. Two of the committees of the Board are the Audit Committee and the
Nominating and Governance Committee.
Audit Committee. The Board has an Audit Committee, which is charged
with selecting an independent registered public accounting firm for the Fund
and reviewing accounting matters with the Fund's independent registered public
accounting firm. Each member of the Audit Committee is an Independent Trustee
as defined above and also meets the additional independence requirements for
audit committee members as defined by the NYSE.
The members of the Audit Committee are Randall C. Barnes, James R.
Imhoff, Jr., Ronald A. Nyberg, Ronald E. Toupin, Jr. and Lorence D. Wheeler.
Mr. Barnes serves as chairperson of the Audit Committee.
The Audit Committee is governed by a written charter, the most recent
version of which was approved by the Board on April 20, 2010 (the "Audit
Committee Charter"). In accordance with proxy rules promulgated by the SEC, a
fund's audit committee charter is required to be filed at least once every
three years as an exhibit to a fund's proxy statement. The Fund's Audit
Committee Charter is attached as Appendix A hereto.
The Audit Committee presents the following report on behalf of the
Fund:
The Audit Committee has performed the following functions: (i) the
Audit Committee reviewed and discussed the audited financial
statements of the Fund with management of the Fund, (ii) the Audit
Committee discussed with the Fund's independent registered public
accounting firm the matters required to be discussed by the Statement
on Auditing Standards No. 61, (iii) the Audit Committee received the
written disclosures and the letter from the Fund's independent
registered public accounting firm required by Independence Standards
Board Standard No. 1 and has discussed with the Fund's independent
registered public accounting firm the independence of the Fund's
independent registered public accounting firm and (iv) the Audit
Committee recommended to the Board of Trustees of the Fund that the
financial statements be included in the Fund's Annual Report for the
past fiscal period.
Nominating and Governance Committee The Board has a Nominating and
Governance Committee, which is composed of Randall C. Barnes, James R. Imhoff,
Jr., Ronald A. Nyberg, Ronald E. Toupin, Jr. and Lorence D. Wheeler, each of
whom is an Independent Trustee as defined above and is "independent" as defined
by NYSE listing standards. Mr. Nyberg serves as chairperson of the Nominating
and Governance Committee.
11
The Nominating and Governance Committee is governed by a written
charter (the "Nominating and Governance Committee Charter"), the most recent
version of which was approved by the Board on January 20, 2009. In accordance
with proxy rules promulgated by the SEC, a fund's nominating committee charter
is required to be filed at least once every three years as an exhibit to a
fund's proxy statement. The Fund's Nominating and Governance Committee Charter
was attached as Appendix A to the Fund's 2009 proxy statement.
The Nominating and Governance Committee (i) evaluates and recommends
all candidates for election or appointment as members of the Board and
recommends the appointment of members and chairs of each committee of the
Board, (ii) reviews policy matters affecting the operation of the Board and
committees of the Board, (iii) periodically evaluates the effectiveness of the
Board and committees of the Board and (iv) oversees the contract review
process, including review of the Fund's advisory agreements and other contracts
with affiliated service providers. In considering Trustee nominee candidates,
the Nominating and Governance Committee requires that Trustee candidates have a
college degree or equivalent business experience and may take into account a
wide variety of factors in considering Trustee candidates, including (but not
limited to) availability and commitment of a candidate to attend meetings and
perform the responsibilities of a Trustee, relevant experience, educational
background, financial expertise, the candidate's ability, judgment and
expertise and overall diversity of the Board's composition. The Nominating and
Governance Committee may consider candidates recommended by various sources,
including (but not limited to) such Fund's Trustees, officers, investment
advisers and shareholders. The Nominating and Governance Committee will not
nominate a person for election to the Board as a Trustee after such person has
reached the age of seventy-three (73), unless such person is an "interested
person" of such Fund as defined in the 1940 Act. The Nominating and Governance
Committee may, but is not required to, retain a third party search firm to
identify potential candidates.
A Trustee candidate must (i) be prepared to submit written answers to
a questionnaire seeking professional and personal information that will assist
the Nominating and Governance Committee to evaluate the candidate and to
determine, among other matters, whether the candidate would qualify as a
Trustee who is not an "interested person" of the Fund as such term is defined
under the 1940 Act; (ii) be prepared to submit character references and agree
to appropriate background checks; and (iii) be prepared to meet with one or
more members of the Nominating and Governance Committee at a time and location
convenient to those Nominating and Governance Committee members in order to
discuss the nominee's qualifications.
The Nominating and Governance Committee will consider Trustee
candidates recommended by the Fund's shareholders. The Nominating and
Governance Committee will consider and evaluate Trustee nominee candidates
properly submitted by shareholders on the same basis as it considers and
evaluates candidates recommended by other sources.
12
In considering Trustee nominee candidates, the Nominating and
Governance Committee takes into account a wide variety of factors, including
the overall diversity of the Board's composition. The Nominating and Governance
Committee believes the Board generally benefits from diversity of background,
experience and views among its members, and considers this a factor in
evaluating the composition of the Board, but has not adopted any specific
policy in this regard.
To have a candidate considered by the Nominating and Governance
Committee, a shareholder must submit the recommendation in writing and must
include the information required by the "Procedures for Shareholders to Submit
Nominee Candidates" that are set forth as Appendix B to the Nominating and
Governance Committee Charter, which was attached as Appendix A to the Fund's
2009 proxy statement. Shareholder recommendations must be sent to the Fund's
Secretary, c/o Claymore Advisors, LLC, 2455 Corporate West Drive, Lisle,
Illinois 60532.
The nominees for election at the Annual Meeting currently serve as
Trustees and were unanimously nominated by the Board of Trustees and the
Nominating and Governance Committee.
BOARD'S ROLE IN RISK OVERSIGHT
Consistent with its responsibility for oversight of the Fund, the
Board, among other things, oversees risk management of the Fund's investment
program and business affairs directly and through the committee structure it
has established. The Board has established the Audit Committee and the
Nominating and Governance Committee to assist in its oversight functions,
including its oversight of the risks the Fund faces. Each committee reports its
activities to the Board on a regular basis. Risks to the Fund include, among
others, investment risk, credit risk, liquidity risk, valuation risk and
operational risk, as well as the overall business risk relating to the Fund.
The Board has adopted, and periodically reviews, policies, procedures and
controls designed to address these different types of risks. Under the Board's
supervision, the officers of the Fund, the Adviser, the Manager and other
service providers to the Fund also have implemented a variety of processes,
procedures and controls to address various risks. In addition, as part of the
Board's periodic review of the Fund's advisory, subadvisory and other service
provider agreements, the Board may consider risk management aspects of the
service providers' operations and the functions for which they are responsible.
The Board requires officers of the Fund to report to the full Board
on a variety of matters at regular and special meetings of the Board and its
committees, as applicable, including matters relating to risk management. The
Audit Committee also receives reports from the Fund's independent registered
public accounting firm on internal control and financial reporting matters. On
at least a quarterly basis, the Board meets with the Fund's Chief Compliance
Officer, including separate meetings with the Independent Trustees in executive
session, to discuss compliance matters and, on at least an annual basis,
receives a report from the Chief Compliance Officer regarding the effectiveness
of the Fund's compliance program.
13
The Board, with the assistance of Fund management, reviews investment policies
and risks in connection with its review of the Fund's performance. In addition,
the Board receives reports from the Adviser and Manager on the investments and
securities trading of the Fund. With respect to valuation, the Board oversees a
pricing committee comprised of Fund officers and Adviser personnel and has
approved Fair Valuation procedures applicable to valuing the Fund's securities,
which the Board and the Audit Committee periodically review. The Board also
requires the Adviser to report to the Board on other matters relating to risk
management on a regular and as-needed basis.
SHAREHOLDER COMMUNICATIONS
Shareholders and other interested parties may contact the Board or
any member of the Board by mail. To communicate with the Board or any member of
the Board, correspondence should be addressed to the Board of Trustees or the
Board members with whom you wish to communicate by either name or title. All
such correspondence should be sent c/o the Fund's Secretary, c/o Claymore
Advisors, LLC, 2455 Corporate West Drive, Lisle, Illinois 60532.
TRUSTEE BENEFICIAL OWNERSHIP OF SECURITIES
As of May 21, 2010, each Trustee beneficially owned equity securities
of the Fund and other funds in the Fund Complex overseen by the Trustee in the
dollar range amounts as specified below:
AGGREGATE DOLLAR RANGE OF
DOLLAR RANGE OF EQUITY EQUITY SECURITIES OVERSEEN BY
NAME OF TRUSTEE SECURITIES IN THE FUND TRUSTEE IN THE FUND COMPLEX
--------------------------------------------------------------------------
Independent Trustees:
Randall C. Barnes None Over $100,000
James R. Imhoff, Jr. $1-$10,000 $1-$10,000
Ronald A. Nyberg $1-$10,000 Over $100,000
Ronald E. Toupin, Jr. None None
Lorence D. Wheeler $10,001-$50,000 $10,001-$50,000
Interested Trustees
Frank Burgess Over $100,000 Over $100,000
As of May 21, 2010, each Trustee and the Trustees and officers of the
Fund as a group owned less than 1% of the outstanding Shares of the Fund.
BOARD AND COMMITTEE MEETINGS
During the Fund's fiscal year ended December 31, 2009, the Board held
five meetings, the Fund's Audit Committee held three meetings and the Fund's
Nominating and Governance Committee held four meetings.
Each Trustee attended at least 75% of the meetings of the Board (and
any committee thereof on which he serves) held during the Fund's fiscal year
ended December 31, 2009. It is the Fund's policy to encourage Trustees to
attend annual Shareholders' meetings.
14
TRUSTEE COMPENSATION
The Fund pays an annual retainer and fee per meeting attended to each
Trustee who is not affiliated with the Adviser, the Investment Manager or their
respective affiliates and pays an additional annual fee to the chairman of the
Board and of any committee of the Board. The following table provides
information regarding the compensation of the Fund's Trustees for the Fund's
fiscal year ended December 31, 2009. The Fund does not accrue or pay retirement
or pension benefits to Trustees as of the date of this proxy statement.
COMPENSATION TOTAL COMPENSATION
NAME OF TRUSTEE(1) FROM THE FUND FROM THE FUND COMPLEX
----------------------------------------------------------------
Randall C. Barnes $23,000 $251,750
James R. Imhoff, Jr. $21,500 $21,500
Ronald A. Nyberg $23,000 $357,875
Ronald E. Toupin, Jr. $26,000 $301,375
Lorence D. Wheeler $21,500 $21,500
----------
1) Trustees not eligible for compensation are not included in the above table.
SHAREHOLDER APPROVAL
The affirmative vote of a majority of the Shares present in person or
represented by proxy and entitled to vote on the Proposal at the Annual Meeting
at which a quorum (i.e., a majority of the Shares entitled to vote on the
Proposal) is present in person or by proxy is necessary to approve the
Proposal. The holders of the Fund's Shares will have equal voting rights (i.e.,
one vote per Share).
Votes withheld will have the same effect as votes against the
proposal. "Broker non-votes" (i.e. Shares held by brokers or nominees as to
which (i) instructions have not been received from the beneficial owner or the
persons entitled to vote and (ii) the broker does not have discretionary voting
power on a particular matter) will have the same effect as votes against the
proposal.
BOARD RECOMMENDATION
The Board of the Fund, including all of the Independent Trustees,
unanimously recommends that you vote "FOR ALL" of the nominees for the Board of
Trustees (Mr. Ronald E. Toupin, Jr. and Mr. Lorence D. Wheeler).
15
ADDITIONAL INFORMATION
FURTHER INFORMATION ABOUT VOTING AND THE ANNUAL MEETING
The holders of a majority of the Shares entitled to vote on any
matter at a meeting present in person or by proxy shall constitute a quorum at
such meeting of the shareholders for purposes of conducting business on such
matter. Votes withheld and broker non-votes will be counted as Shares present
at the Annual Meeting for quorum purposes.
The Board has fixed the close of business on May 21, 2010 as the
Record Date for the determination of shareholders of the Fund entitled to
notice of, and to vote at, the Annual Meeting. Shareholders of the Fund as of
the close of business on the Record Date will be entitled to one vote on each
matter to be voted on by the Fund for each Share held and a fractional vote
with respect to fractional Shares with no cumulative voting rights.
Whether or not you plan to attend the Annual Meeting, we urge you to
complete, sign, date, and return the enclosed proxy card in the postage-paid
envelope provided or vote your proxy via telephone or the Internet so your
Shares will be represented at the Annual Meeting. Information regarding how to
vote your proxy via telephone or the Internet is included on the enclosed proxy
card. The required control number for Internet and telephone voting is printed
on the enclosed proxy card. The control number is used to match proxy cards
with shareholders' respective accounts and to ensure that, if multiple proxy
cards are executed, Shares are voted in accordance with the proxy card bearing
the latest date. If you wish to attend the Annual Meeting and vote in person,
you will be able to do so. You may contact the Fund at (800) 851-0264 to obtain
directions to the site of the Annual Meeting.
All Shares represented by properly executed proxies received prior to
the Annual Meeting will be voted at the Annual Meeting in accordance with the
instructions marked thereon or otherwise as provided therein. IF YOU SIGN THE
PROXY CARD, BUT DON'T FILL IN A VOTE, YOUR SHARES WILL BE VOTED IN ACCORDANCE
WITH THE BOARD'S RECOMMENDATION. If any other business is brought before the
Annual Meeting, your Shares will be voted at the proxies' discretion if your
properly executed proxy card has been received.
Shareholders who execute proxy cards or vote proxies via telephone or
the Internet may revoke them at any time before they are voted by filing with
the Secretary of the Fund a written notice of revocation, by delivering
(including via telephone or the Internet) a duly executed proxy bearing a later
date or by attending the Annual Meeting and voting in person. Merely attending
the Annual Meeting, however, will not revoke any previously submitted proxy.
ADVISER AND INVESTMENT MANAGER
Claymore Advisors, LLC, located at 2455 Corporate West Drive, Lisle,
Illinois 60532, acts as the Fund's investment adviser. As of March 31, 2010,
Claymore entities have provided supervision, management and servicing on
16
approximately $15.9 billion in assets through closed-end funds, unit investment
trusts and exchange-traded funds. Claymore Advisors, LLC is a wholly-owned
subsidiary of Guggenheim Partners, LLC, a global, diversified financial
services firm with more than $100 billion in assets under supervision.
Guggenheim, through its affiliates, provides investment management, investment
advisory, insurance, investment banking, and capital markets services. The firm
is headquartered in Chicago and New York with a global network of offices
throughout the United States, Europe, and Asia.
Madison Asset Management, LLC, a wholly-owned subsidiary of Madison
Investment Advisors, Inc., acts as the Fund's investment manager and is
responsible for the day-to-day management of the Fund's portfolio. Madison is
located at 550 Science Drive, Madison, Wisconsin 53711. Madison and its
affiliated entities act as investment adviser for individuals, corporations,
pension funds, endowments, insurance companies, mutual funds and closed-end
investment companies, with assets under management of approximately $15 billion
as of March 31, 2010.
ADMINISTRATOR
Claymore Advisors, LLC, located at 2455 Corporate West Drive, Lisle,
Illinois 60532, serves as the Fund's administrator.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP ("E&Y") has been selected as the independent
registered public accounting firm by the Audit Committee of the Fund and
approved by a majority of the Fund's Board, including a majority of the
Independent Trustees, to audit the accounts of the Fund for and during the
Fund's fiscal year ended in 2009 and fiscal year ending in 2010. The Fund does
not know of any direct or indirect financial interest of E&Y in the Fund.
Representatives of E&Y will be available to attend the Annual
Meeting, will have the opportunity to make a statement if they desire to do so
and will be available to answer questions.
AUDIT FEES
The aggregate fees billed to the Fund by E&Y for professional
services rendered for the audit of the Fund's annual financial statements for
the Fund's fiscal year ended December 31, 2009, were approximately $46,000 and
for the Fund's fiscal year ended December 31, 2008, were approximately
$46,000.
AUDIT-RELATED FEES
The aggregate fees billed by E&Y and approved by the Audit Committee
of the Fund for assurance and related services reasonably related to the
performance of the audit of the Fund's annual financial statements (such fees
relate to services rendered, and out of pocket expenses incurred, in connection
with the Fund's registration statements, comfort letters and consents) for the
Fund's fiscal year ended December 31, 2009, were $0 and for the Fund's fiscal
year ended December
17
31, 2008, were $0. E&Y did not perform any other assurance and related services
that were required to be approved by the Fund's Audit Committee for such
periods.
TAX FEES
The aggregate fees billed by E&Y and approved by the Audit Committee
of the Fund for professional services rendered for tax compliance, tax advice,
and tax planning (such fees relate to tax services provided by E&Y in
connection with the Fund's excise tax calculations and review of the Fund's tax
returns) for the Fund's fiscal year ended December 31, 2009, were approximately
$6,900 and for the Fund's fiscal year ended December 31, 2008, were
approximately $6,000. E&Y did not perform any other tax compliance or tax
planning services or render any tax advice that were required to be approved by
the Fund's Audit Committee for such periods.
ALL OTHER FEES
Other than those services described above, E&Y did not perform any
other services on behalf of the Fund for the Fund's fiscal year ended December
31, 2009, or for the Fund's fiscal year ended December 31, 2008.
AGGREGATE NON-AUDIT FEES
The aggregate non-audit fees billed by E&Y for services rendered to
the Fund, the Adviser and any entity controlling, controlled by or under common
control with the Adviser that provides ongoing services to the Fund (not
including a sub-adviser whose primary role is portfolio management and is
sub-contracted with or overseen by another investment adviser) that directly
related to the operations and financial reporting of the Fund for the Fund's
fiscal year ended December 31, 2009, were approximately $6,900 and for the
Fund's fiscal year ended December 31, 2008, were approximately $6,000.
AUDIT COMMITTEE'S PRE-APPROVAL POLICIES AND PROCEDURES
As noted above, the Audit Committee is governed by the Audit
Committee Charter, which is attached as Appendix A and which includes
Pre-Approval Policies and Procedures in Section IV of such Charter.
Specifically, sections IV.C.2 and IV.C.3 of the Audit Committee
Charter contain the Pre-Approval Policies and Procedures and such sections are
included below.
IV. To fulfill its responsibilities and duties the Audit Committee
shall:
C.2. Pre-approve any engagement of the independent auditors to
provide any non-prohibited services to the Trust, including the
fees and other compensation to be paid to the independent
auditors (unless an exception is available under Rule 2-01 of
Regulation S-X).
(a) The Chairman or any member of the Audit Committee may
grant the pre-approval of services to the Fund for
non-prohibited services up to $10,000. All such
18
delegated pre-approvals shall be presented to the Audit
Committee no later than the next Audit Committee
meeting.
C.3. Pre-approve any engagement of the independent auditors,
including the fees and other compensation to be paid to the
independent auditors, to provide any nonaudit services to the
Adviser (or any "control affiliate" of the Adviser providing
ongoing services to the Trust), if the engagement relates
directly to the operations and financial reporting of the Trust
(unless an exception is available under Rule 2-01 of Regulation
S-X).
(a) The Chairman or any member of the Audit Committee may
grant the pre-approval for non-audit services to the
Adviser up to $10,000. All such delegated pre-approvals
shall be presented to the Audit Committee no later than
the next Audit Committee meeting.
The Audit Committee of the Fund has pre-approved all audit and
non-audit services provided by E&Y to the Fund, and all non-audit services
provided by E&Y to the Adviser, or any entity controlling, controlled by, or
under common control with the Adviser that provides ongoing services to the
Fund that are related to the operations of the Fund for the fiscal years ended
December 31, 2009, and December 31, 2008.
None of the services described above for the Fund's fiscal years
ended December 31, 2009, and December 31, 2008, were approved by the Audit
Committee pursuant to the pre-approval exception under Rule 2-01(c)(7)(i)(C) of
Regulation S-X promulgated by the SEC.
PRINCIPAL SHAREHOLDERS
As of May 29, 2009 to the knowledge of the Fund, one person (shown in
the table below) beneficially owned more than 5% of the voting securities of
the Fund.
SHARE PERCENTAGE
SHAREHOLDER NAME AND ADDRESS HOLDINGS OWNED
------------------------------------------------------------
First Trust Portfolios L.P. (1)
120 East Liberty Drive, Suite 400
Wheaton, IL 60187 1,941,329 10.08%
----------
(1) Based on information obtained from a Schedule 13G filed with the U.S.
Securities and Exchange Commission on January 31, 2010. According to the
Schedule 13G filing, First Trust Portfolios L.P. is sponsor of several unit
investment trusts which hold shares of common stock of the Fund. No unit
investment trust sponsored by First Trust Portfolios L.P. holds 5% or more
of the Fund's common stock.
19
FINANCIAL STATEMENTS AND OTHER INFORMATION
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF THE FUND'S MOST
RECENT ANNUAL REPORT AND SEMI-ANNUAL REPORT TO ANY SHAREHOLDER UPON REQUEST.
REQUESTS SHOULD BE DIRECTED TO CLAYMORE SECURITIES, INC., 2455 CORPORATE WEST
DRIVE, LISLE, ILLINOIS 60532, (800) 851-0264.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and Section
30(h) of the 1940 Act require the Fund's officers and Trustees, certain
officers of the Fund's investment adviser, affiliated persons of the investment
adviser, and persons who beneficially own more than ten percent of the Fund's
Shares to file certain reports of ownership ("Section 16 filings") with the SEC
and the New York Stock Exchange. Based upon the Fund's review of the copies of
such forms effecting the Section 16 filings received by it, the Fund believes
that for Fund's fiscal year ended December 31, 2008, all filings applicable to
such persons were completed and filed in a timely manner.
PRIVACY PRINCIPLES OF THE FUND
The Fund is committed to maintaining the privacy of Shareholders and
to safeguarding their non-public personal information. The following
information is provided to help you understand what personal information the
Fund collects, how the Fund protects that information and why, in certain
cases, the Fund may share information with select other parties.
Generally, the Fund does not receive any non-public personal
information relating to its Shareholders, although certain non-public personal
information of its Shareholders may become available to the Fund. The Fund does
not disclose any non-public personal information about its Shareholders or
former shareholders to anyone, except as permitted by law or as is necessary in
order to service Shareholder accounts (for example, to a transfer agent or
third party administrator).
The Fund restricts access to non-public personal information about
the Shareholders to employees of the Adviser with a legitimate business need
for the information. The Fund maintains physical, electronic and procedural
safeguards designed to protect the non-public personal information of its
Shareholders.
DEADLINE FOR SHAREHOLDER PROPOSALS
The Fund's Amended and Restated By-Laws (the "By-Laws") require
compliance with certain procedures for a shareholder to properly make a
nomination for election as a Trustee or to propose other business for the Fund.
If a shareholder who is entitled to do so under the Fund's By-Laws wishes to
nominate a person or persons for election as a Trustee or propose other
business for the Fund, that shareholder must provide a written notice to the
Secretary of the Fund at the Fund's principal executive offices.
The notice must set forth: (a) as to each person whom the shareholder
proposes to nominate for election as a Trustee (i) all information relating to
such
20
person that is required to be disclosed in solicitations of proxies for
election of Trustees in an election contest, or is otherwise required, in each
case pursuant to and in accordance with Regulation 14A under the Exchange Act
and (ii) such person's written consent to being named as a nominee and to
serving as a Trustee if elected; (b) as to any other business that the
shareholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the text of the proposal or
business (including the text of any resolutions proposed for consideration),
the reasons for conducting such business at the meeting and any material
interest in such business of such shareholder and the beneficial owner, if any,
on whose behalf the proposal is made; and (c) as to the shareholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination or
proposal is made (i) the name and address of such shareholder, as they appear
on the Fund's books, and of such beneficial owner, (ii) the class or series and
number of Shares which are owned beneficially and of record by such shareholder
and such beneficial owner, (iii) a description of any agreement, arrangement or
understanding with respect to the nomination or proposal between or among such
shareholder and such beneficial owner, any of their respective affiliates or
associates, and any others acting in concert with any of the foregoing, (iv) a
description of any agreement, arrangement or understanding (including any
derivative or short positions, profit interests, options, warrants, stock
appreciation or similar rights, hedging transactions, and borrowed or loaned
Shares) that has been entered into as of the date of the shareholder's notice
by, or on behalf of, such shareholder and such beneficial owners, the effect or
intent of which is to mitigate loss to, manage risk or benefit of share price
changes for, or increase or decrease the voting power of, such shareholder or
such beneficial owner, with respect to Shares of the Fund, (v) a representation
that the shareholder is a holder of record of Shares of the Fund entitled to
vote at such meeting and intends to appear in person or by proxy at the meeting
to propose such business or nomination, and (vi) a representation whether the
shareholder or the beneficial owner, if any, intends or is part of a group
which intends (a) to deliver a proxy statement and/or form of proxy to holders
of at least the percentage of the Fund's outstanding Shares required to approve
or adopt the proposal or elect the nominee and/or (b) otherwise to solicit
proxies from shareholders in support of such proposal or nomination. The Fund
may require any proposed nominee to furnish such other information as it may
reasonably require to determine the eligibility of such proposed nominee to
serve as a Trustee of the Fund.
To be timely, the notice must be delivered to the Secretary of the
Fund at the Fund's principal executive offices not later than the close of
business on the ninetieth (90th) day, nor earlier than the close of business on
the one hundred twentieth (120th) day, prior to the first anniversary of the
preceding year's annual meeting (provided, however, that in the event that the
date of the annual meeting is more than thirty (30) days before or more than
seventy (70) days after such anniversary date, notice by the shareholder must
be so delivered not earlier than the close of business on the one hundred
twentieth (120th) day prior to such annual meeting and not later than the close
of business on the later of the ninetieth (90th)
21
day prior to such annual meeting or the tenth (10th) day following the day on
which public announcement of the date of such meeting is first made by the
Fund).
The foregoing description of the procedures for a shareholder
properly to make a nomination for election as a Trustee or to propose other
business for the Fund is only a summary and is not complete. A copy of the
Fund's By-Laws, which includes the provisions regarding the requirements for
shareholder nominations and proposals, may be obtained by writing to the
Secretary of the Fund at 2455 Corporate West Drive, Lisle, Illinois 60532. Any
shareholder considering making a nomination or other proposal should carefully
review and comply with those provisions of the Fund's By-Laws.
Shareholder proposals intended for inclusion in the Fund's proxy
statement in connection with such annual meeting of shareholders pursuant to
Rule 14a-8 under the Exchange Act must be received by the Fund at the Fund's
principal executive offices by February 28, 2011. Proposals made outside of
Rule 14a-8 under the Exchange Act must be submitted, in accordance with the
notice requirements of the Fund's By-Laws, not earlier than the close of
business on March 22, 2011 nor later than the close of business on April 21,
2011 (which is also the date after which shareholder nominations and proposals
made outside of Rule 14a-8 under the Exchange Act would not be considered
"timely" within the meaning of Rule 14a-4(c) under the Exchange Act).
EXPENSES OF PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Fund. Certain
officers of the Fund and certain officers and employees of Claymore or its
affiliates (none of whom will receive additional compensation therefore), may
solicit proxies by telephone, mail, e-mail and personal interviews. Brokerage
houses, banks and other fiduciaries may be requested to forward proxy
solicitation material to their principals to obtain authorization for the
execution of proxies, and will be reimbursed by the Fund for such out-of-pocket
expenses.
OTHER MATTERS
The management of the Fund knows of no other matters which are to be
brought before the Annual Meeting. However, if any other matters not now known
properly come before the Annual Meeting, it is the intention of the persons
named in the enclosed form of proxy to vote such proxy in accordance with their
judgment on such matters.
In the event a quorum is present at the Annual Meeting but sufficient
votes to approve the Proposal is not received, proxies (including broker
non-votes) would vote in favor of one or more adjournments of the Annual
Meeting with respect to the Proposal to permit further solicitation of proxies,
provided they determine that such an adjournment and additional solicitation is
reasonable and in the interest of shareholders based on a consideration of all
relevant factors, including the nature of the relevant proposal, the percentage
of votes then cast, the percentage of negative
22
votes then cast, the nature of the proposed solicitation activities and the
nature of the reasons for such further solicitation.
Very truly yours,
/S/J. THOMAS FUTRELL
J. THOMAS FUTRELL
CHIEF EXECUTIVE OFFICER
June 24, 2010
23
APPENDIX A
AUDIT COMMITTEE CHARTER
I. PURPOSE
The Audit Committee is a committee of the Board of the Trust (see
Appendix A for a list of funds that have approved this Audit Committee
Charter). Its primary function is to assist the Board in fulfilling certain of
its responsibilities. This Charter sets forth the duties and responsibilities
of the Audit Committee.
The Audit Committee serves as an independent and objective party to
monitor the Trust's accounting policies, financial reporting and internal
control system, as well as the work of the independent auditors. The Audit
Committee assists Board oversight of (1) the integrity of the Trust's financial
statements; (2) the Trust's compliance with legal and regulatory requirements;
(3) the independent auditors' qualifications and independence; and (4) the
performance of the Trust's independent auditors. The Audit Committee also
serves to provide an open avenue of communication among the independent
auditors, Trust management, the personnel responsible for internal audit
functions (if any) and the Board.
o Trust management has the primary responsibility to establish
and maintain systems for accounting, reporting and internal
control.
o The independent auditors have the primary responsibility to
plan and implement a proper audit, including consideration
of the Trust's accounting, reporting and internal control
practices.
The Audit Committee may have additional functions and
responsibilities as deemed appropriate by the Board and the Audit Committee.
Although the Audit Committee has the responsibilities and powers set
forth in this Charter, it is not the duty of the Audit Committee to plan or
conduct audits or to determine that the Trust's financial statements are
complete and accurate and have been prepared in accordance with generally
accepted accounting principles.
II. COMPOSITION
The Audit Committee shall be comprised of three or more board members
as determined by the Board, each of whom shall be an independent board member,
and free from any relationship that, in the opinion of the Board, would
interfere with the exercise of his or her independent judgment as a member of
the Audit Committee. For purposes of the Audit Committee, a board member is
independent if:
o he or she is not an "interested person" of the Trust as that
term is defined in the Investment Company Act of 1940; and
o he or she does not accept, directly or indirectly, any
consulting, advisory, or other compensatory fee from the
Trust (except in the capacity as a Board or committee
member).
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Each member of the Audit Committee shall be financially literate, as
such qualification is interpreted by the Board in its business judgment (or
must become financially literate within a reasonable time after his or her
appointment to the Audit Committee). The Audit Committee will review the
qualifications of its members and determine whether any of its members qualify
as an "audit committee financial expert" as defined in Form N-CSR. The Audit
Committee will submit such determination to the Board for its final
determination.
The members and Chairman of the Audit Committee shall be elected by
the Board annually and serve until their successors shall be duly elected and
qualified.
No member of the Audit Committee shall serve on the audit committee
of more than three public companies with shares registered under the Securities
Exchange Act of 1934, as amended, unless the Board determines that such
simultaneous service would not impair the ability of the Audit Committee member
to serve effectively on the Audit Committee. For purposes of counting an Audit
Committee member's audit committee service, service on the Trust's Audit
Committee, together with other audit committees within the Claymore fund
complex, shall count as one public company.
III. MEETINGS
The Audit Committee shall meet two times annually, or more frequently
as circumstances dictate. Special meetings (including telephone meetings) may
be called by the Chairman or a majority of the members of the Audit Committee
upon reasonable notice to the other members of the Audit Committee.
As part of its job to foster open communication, the Audit Committee
shall meet annually with senior Trust management responsible for accounting and
financial reporting and the independent auditors in separate executive sessions
to discuss any matters that the Audit Committee, or any of such other persons,
believes should be discussed privately.
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
A. Charter
Review this Charter, annually, and recommend changes, if any, to
the Board.
B. Internal Controls
1. Review, annually, with Trust management and the independent
auditors:
(a) the organizational structure, reporting
relationship,adequacy of resources and qualifications of the
senior Trust management personnel responsible for accounting
and financial reporting; and
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(b) their separate evaluation of the adequacy and
effectiveness of the Trust's system of internal controls,
including those of the Trust's service providers.
2. Review, with Trust management and the independent auditors:
(a) the Trust's plan related to the Trust's systems for
accounting, reporting and internal controls;
(b) the responsibilities, resources and staffing with
respect to the activities in IV.B.2.(a) above; and
(c) any significant audit findings or recommendations
related to the Trust's systems for accounting, reporting and
internal controls and Trust management's response.
3. Monitor procedures for the receipt, retention and treatment
of complaints received by the Trust and/or the Audit Committee
regarding accounting, internal accounting controls or auditing
matters and the confidential, anonymous submission by officers and
trustees of the Trust or employees of the Adviser, underwriter and
any provider of accounting-related services to the Trust of
concerns regarding questionable accounting or auditing matters.
4. Review, annually, with Trust management and the independent
auditors, policies for valuation of Trust portfolio securities, and
the frequency and magnitude of pricing errors.
C. Independent Auditors
1. Approve, and recommend to the Board, the appointment,
retention or termination of the independent auditors, and approve
the fees and other compensation to be paid to the independent
auditors. Such selection shall be pursuant to a written engagement
letter approved by the Audit Committee.
2. Pre-approve any engagement of the independent auditors to
provide any non-prohibited services to the Trust, including the
fees and other compensation to be paid to the independent auditors
(unless an exception is available under Rule 2-01 of Regulation
S-X).
(a) The Chairman or any member of the Audit Committee may
grant the pre-approval of services to the Fund for
non-prohibited services up to $10,000. All such delegated
pre-approvals shall be presented to the Audit Committee no
later than the next Audit Committee meeting.
3. Pre-approve any engagement of the independent auditors,
including the fees and other compensation to be paid to the
independent auditors, to provide any non-audit services to the
Adviser (or any "control affiliate" of the Adviser providing
ongoing services to the
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Trust), if the engagement relates directly to the operations
and financial reporting of the Trust (unless an exception is
available under Rule 2-01 of Regulation S-X).
(a) The Chairman or any member of the Audit Committee may
grant the pre-approval for non-audit services to the Adviser up
to $10,000. All such delegated pre-approvals shall be presented
to the Audit Committee no later than the next Audit Committee
meeting.
4. On an annual basis, request, receive in writing and review a
report by the independent auditors describing:
(a) the independent auditors' internal quality-control
procedures;
(b) any material issues raised by the most recent internal
quality-control review, or peer review, of the independent
auditors, or by any inquiry or investigations by governmental
or professional authorities, within the preceding five years,
respecting one or more independent audits carried out by the
independent auditors, and any steps taken to deal with any such
issues; and
(c) all relationships between the independent auditors and
the Trust, so as to assess the auditors' independence,
including identification of all relationships the independent
auditors have with the Trust and all significant relationships
the independent auditors have with the Adviser (and any
"control affiliate" of the Adviser) and any material service
provider to the Trust (including, but not limited to,
disclosures regarding the independent auditors' independence
required by Public Company Accounting Oversight Board Rule 3526
and compliance with the applicable independence provisions of
Rule 2-01 of Regulation S-X).
In assessing the auditors' independence, the Audit
Committee shall take into account the opinions of Trust
management. The Committee will present its conclusions
with respect to the independent auditors to the Board,
and recommend that the Board take appropriate action,
if any, in response to the independent auditors' report
to satisfy itself of the independent auditors'
independence.
5. On an annual basis, review and evaluate the lead audit
partner (such review to include consideration of whether, in
addition to the regular rotation of the lead audit partner as
required by law, in order to assure continuing auditor
independence, there should be regular consideration of rotation of
the firm serving as independent auditors).
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6. On an annual basis, meet with the independent auditors and
Trust management to review the arrangements for and scope of the
proposed audit for the current year and the audit procedures to be
utilized.
7. Review the management letter prepared by the independent
auditors and Trust management's response.
D. Financial Reporting Processes
1. If the Trust is a listed closed-end investment company,
(a) Review with Trust management and the independent
auditors, (i) the Trust's audited financial statements and
recommend to the Board, if appropriate, that the audited
financial statements be included in the Trust's annual report
to shareholders required by Section 30(e) of the Investment
Company Act of 1940 and Rule 30d-1 thereunder and (ii)
narrative disclosure analogous to the "Management's Discussion
of Fund Performance," if any is included in such annual report
to shareholders.
(b) Review with Trust management and the independent
auditors the Trust's semi-annual financial statements and
narrative disclosure analogous to the "Management's Discussion
of Fund Performance," if any is included in such semi-annual
report to shareholders.
(c) Review the Trust's policy and procedures with respect to
declaring dividends and issuing dividend announcements and
related press releases, as well as financial information and
dividend guidance provided to analysts and rating agencies.
2. Review with Trust management and the independent auditors the
matters that auditing professional standards require to be
communicated to the Audit Committee, including, but not limited to,
the matters required to be discussed by Statement on Auditing
Standards No. 114, including:
o the independent auditors' judgments about the quality,
and not just the acceptability, of the Trust's accounting
principles as applied in its financial reporting;
o the process used by Trust management in formulating
estimates and the independent auditors' conclusions
regarding the reasonableness of those estimates;
o all significant adjustments arising from the audit,
whether or not recorded by the Trust;
o when the independent auditors are aware that Trust
management has consulted with other accountants about
significant accounting and auditing matters, the independent
auditors' views about the subject of the consultation;
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o any disagreements with Trust management regarding
accounting or reporting matters;
o any difficulties encountered in the course of the
audit, including any restrictions on t he scope of the
independent auditors' activities or on access to requested
information; and
o significant deficiencies in the design or operation of
internal controls.
3. The independent auditors shall report, within 90 days prior
to the filing of the Trust's annual financial statements with the
SEC, to the Audit Committee:
(a) all critical accounting policies and practices to be
used;
(b) all alternative treatments of financial information
within GAAP for policies and practices related to material
items that have been discussed with Trust management, the
ramifications of the use of such alternative disclosures and
treatments, and the treatment preferred by the independent
auditor;
(c) other material written communications between the
independent auditors and Trust management including, but not
limited to, any management letter or schedule of unadjusted
differences; and
(d) all non-audit services provided to an entity in the
"investment company complex" as defined in paragraph (f)(14) of
Rule 2-01 of Regulation S-X that were not pre-approved by the
Audit Committee.
4. Review, annually, with Trust management and the independent
auditors, the Trust's "disclosure controls and procedures" and the
Trust's "internal control over financial reporting" as defined in
Rule 30a-3(c) and (d) under the Investment Company Act of 1940.
5. Review with Trust management and the independent auditors a
report by Trust management covering any Form N-CSR and Form N-Q
filed, and any required certification of such filing, along with
the results of Trust management's most recent evaluation of the
Trust's "disclosure controls and procedures" and "internal control
over financial reporting."
E. Process Improvements
Review with the independent auditors and Trust management
significant changes or improvements in accounting and auditing
processes that have been implemented.
F. Legal and Compliance
1. Review any legal or regulatory matters that arise that could
have a material impact on the Trust's financial statements.
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2. Review policies and procedures with respect to financial
statement risk assessment and risk management, including the steps
Trust management has taken to monitor and control such risk
exposures.
3. Establish clear hiring policies for the Trust with respect to
employees or former employees of the independent auditors.
G. Other Responsibilities
1. Review, annually, the performance of the Audit Committee.
2. If the Trust is a closed-end investment company, prepare the
report required by Item 407(d)(3)(i) of Regulation S-K for
inclusion in the Trust's proxy statement if the proxy statement
relates to the election of Board members of the Trust.
3. Investigate any other matter brought to its attention within
the scope of its duties, and have the authority in its discretion
to retain legal, accounting or other experts or consultants to
advise the Audit Committee, at the expense of the Trust, if, in the
Committee's judgment, that is appropriate.
4. Perform any other activities consistent with this Charter,
the Trust's Charter, By-Laws and governing law, as the Audit
Committee or the Board deems necessary or appropriate.
5. Maintain minutes of Committee meetings; report its
significant activities to the Board; and make such recommendations
to the Board as the Audit Committee may deem necessary or
appropriate.
V. FUNDING
The Audit Committee shall receive appropriate funding, as determined
by the Audit Committee, for payment of (i) compensation to the independent
auditors for approved audit or non-audit services for the Trust; (ii)
compensation to any legal, accounting or other experts or consultants retained
by the Audit Committee pursuant to Section IV.G.3 above and (iii) ordinary
administrative expenses of the Audit Committee that are necessary or
appropriate in carrying out its duties.
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BACKGROUND AND DEFINITIONS
FOR
AUDIT COMMITTEE CHARTER
The following is supplemental information regarding the Audit
Committee Charter designed to provide the Audit Committee background
information and definitions to assist the Committee in fulfilling its
responsibilities under the Charter.
I. COMPOSITION
An "audit committee financial expert" of a company is defined as a
person who has all of the following attributes: (1) an understanding of
generally accepted accounting principles ("GAAP") and financial statements; (2)
the ability to assess the general application of GAAP in connection with the
accounting for estimates, accruals and reserves; (3) experience preparing,
auditing, analyzing or evaluating financial statements that present a breadth
and level of complexity of accounting issues that are generally comparable to
the breadth and complexity of issues that can reasonably be expected to be
raised by the company's financial statements, or experience actively
supervising one or more persons engaged in such activities; (4) an
understanding of internal controls and procedures for financial reporting; and
(5) an understanding of audit committee functions. An audit committee financial
expert must have acquired such attributes through any one or more of the
following: (1) education and experience as a principal financial officer,
principal accounting officer, controller, public accountant or auditor or
experience in one or more positions that involve the performance of similar
functions (or active supervision of such persons); or (2) experience overseeing
or assessing the performance of companies or public accountants with respect to
the preparation, auditing or evaluation of financial statements; or (3) other
relevant experience.
If the Trust is listed on the New York Stock Exchange, at least one
member of the Audit Committee must have accounting or related financial
management expertise, as the Board interprets such qualification in its
business judgment.
II. RESPONSIBILITIES AND DUTIES
A. Pre-Approval Not Required
Under Section 10A(h)(i)(1)(B) of the Securities Exchange Act of 1934
and Rule 2-01 under Regulation S-X (Section (c)(7)), pre-approval of non-audit
services for the Trust pursuant to Section IV.C. 2 is not required, if:
1. the aggregate amount of all non-audit services provided to the
Trust is no more than 5% of the total fees paid by the Trust to the
independent auditors during the fiscal year in which the non-audit
services are provided;
2. the services were not recognized by Trust management at the
time of the engagement as non-audit services; and
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3. such services are promptly brought to the attention of the
Audit Committee by Trust management and the Audit Committee approves
them (which may be by delegation) prior to the completion of the
audit.
Under Section 10A(h)(i)(1)(B) of the Securities Exchange Act of 1934
and Rule 2-01 under Regulation S-X (Section (c)(7)), pre-approval of non-audit
services for the Adviser (or any affiliate of the Adviser providing ongoing
services to the Trust) pursuant to Section IV.C.3 is not required, if:
1. the aggregate amount of all non-audit services provided is no
more than 5% of the total fees paid to the Trust's independent
auditors by the Trust, the Adviser and any "control affiliate" of the
Adviser providing ongoing services to the Trust during the fiscal year
in which the non-audit services are provided;
2. the services were not recognized by Trust management at the
time of the engagement as non-audit services; and
3. such services are promptly brought to the attention of the
Audit Committee by Trust management and the Audit Committee approves
them (which may be by delegation) prior to the completion of the
audit.
B. Control Affiliate
As used in Section IV.C.3, "control affiliate" means any entity
controlling, controlled by, or under common control with the Adviser.
C. Prohibited Non-Audit Services
Under Section 10A(g) of the Securities Exchange Act of 1934 and Rule
2-01 under Regulation S-X (Section (c)(4)), an auditor is not independent if,
at any point during the audit and professional engagement period, the auditor
provides certain non-audit services to an audit client. As referred to in
Section IV.C.2, these prohibited non-audit services would include:
1. bookkeeping or other services related to the accounting
records or financial statements of the Trust;
2. financial information systems design and implementation;
3. appraisal or valuation services, fairness opinions, or
contribution-in-kind reports;
4. actuarial services;
5. internal audit outsourcing services;
6. anagement functions or human resources;
7. broker or dealer, investment adviser, or investment banking
services;
8. legal services and expert services unrelated to the audit;
and
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9. any other services that the Public Company Accounting
Oversight Board determines are impermissible.
D. Other Definitions
"Investment company complex" includes: (1) an investment company and
its investment adviser or sponsor; (2) any entity controlled by or controlling
an investment adviser or sponsor in (1) above, or any entity under common
control with any investment adviser or sponsor in (1) above if the entity: (A)
is an investment adviser or sponsor or (B) is engaged in the business of
providing administrative, custodian, underwriter, or transfer agent services to
any investment company, investment adviser, or sponsor; and (3) an investment
company or entity that would be an investment company but for the exclusions
provided by Section 3(c) of the 1940 Act that has an investment adviser or
sponsor included in (1) and (2) above. Investment adviser does not include a
subadviser whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser. Sponsor is an entity that
establishes a unit investment trust.
"Disclosure controls and procedures" means controls and other
procedures of a registered management investment company that are designed to
ensure that information required to be disclosed by the investment company on
Form N-CSR and Form N-Q is recorded, processed, summarized and reported, within
the time periods specified in the SEC's rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an investment company in
the reports that it files or submits on Form N-CSR and Form N-Q is accumulated
and communicated to the investment company's management, including its
principal executive officer or officers and principal financial officer or
officers, or person performing similar functions, as appropriate to allow
timely decisions regarding required disclosure.
"Internal control over financial reporting" is a process designed by,
or under the supervision of, the Trust's principal executive and principal
financial officers, or persons performing similar functions, and effected by
the Trust's Board, management and other personnel, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP and
includes those policies and procedures that:
1. Pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions
of the assets of the Trust;
2. Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with GAAP, and that receipts and expenditures of the Trust are being
made only in accordance with authorization of management and directors
of the Trust; and
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3. Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the
Trust's assets that could have a material effect on the financial
statements.
The report to be prepared by the Audit committee to be included in
the annual proxy statement is governed by Item 407(d)(3)(i) of Regulation S-K,
which requires each proxy statement relating to a shareholder meeting at which
directors are to be elected to include a report, followed by the name of each
Audit Committee member, stating whether: (1) the Committee has reviewed and
discussed the audited financial statements with management, (2) the Committee
has discussed with the independent auditors the matters required to be
discussed by SAS 114, (3) the Committee has received the written disclosures
and the letter from the independent auditors required by Public Company
Accounting Oversight Board Rule 3526, and has discussed with the independent
auditors their independence, and (4) based on the review and discussions
referred to in paragraphs (1) through (3), the Audit Committee recommended to
the Board that the audited financial statements be included in the Trust's
annual report to shareholders required by Section 30(e) of the Investment
Company Act of 1940 and Rule 30d-1 thereunder.
Revised Charter Approved at:
MCN Qtrly Mtg of the Board of Trustees 4-20-10
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APPENDIX A
FUNDS THAT HAVE APPROVED THIS
AUDIT COMMITTEE CHARTER
FUND
----
Claymore Dividend & Income Fund
Claymore Exchange-Traded Funds Trust
Claymore Exchange-Traded Funds Trust 2
Claymore/Guggenheim Strategic Opportunities Fund
Fiduciary/Claymore MLP Opportunity Fund
Guggenheim Enhanced Equity Income Fund
Madison/Claymore Covered Call & Equity Strategy Fund
TS&W/Claymore Tax-Advantaged Balanced Fund
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PROXY TABULATOR
P.O. BOX 9112
FARMINGDALE, NY 11735
TO VOTE BY MAIL
1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M25880-Z53399 KEEP THIS PORTION FOR YOUR RECORDS
--------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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MADISON/CLAYMORE COVERED CALL &
EQUITY STRATEGY FUND
FOR To withhold authority to vote for any
FOR WITHHOLD ALL individual nominee(s), mark "For All
ALL ALL EXCEPT Except" and write the name(s) of the
nominee(s) on the line below.
1. Election of Trustees [ ] [ ] [ ] ---------------------------------------
Class III Nominees
Nominees:
01) Ronald E. Toupin, Jr.
02) Lorence D. Wheeler
2. To transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
PLEASE MARK, DATE, SIGN & RETURN THE PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
Please sign here exactly as your name appears in the records of the Fund and
date. If the shares are held jointly, each holder should sign. When signing as
an attorney, executor, administrator, trustee, guardian, officer of a
corporation or other entity or in any other representative capacity, please give
the full title under signature(s).
---------------------------------- ----------- ------------------------ ----
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
--------------------------------------------------------------------------------
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING:
The Statement is available at www.proxyvote.com.
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M25881-Z53399
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SOLICITED BY THE BOARD OF TRUSTEES
MADISON/CLAYMORE COVERED CALL & EQUITY STRATEGY FUND
ANNUAL MEETING OF SHAREHOLDERS
JULY 20, 2010
MADISON/CLAYMORE COVERED CALL & EQUITY STRATEGY FUND
The annual meeting of shareholders of Madison/Claymore Covered Call & Equity
Strategy Fund (the "Fund") will be held at the offices of the Fund, 2455
Corporate West Drive, Lisle, Illinois, 60532, on Tuesday, July 20, 2010, at 1:00
p.m. Central time (the "Annual Meeting"). The undersigned hereby appoints
Elizabeth H. Hudson and Kevin M. Robinson, and each of them or their respective
designees, with full power of substitution and revocation, as proxies to
represent and to vote all shares of the undersigned at the Annual Meeting and
all adjournments thereof, with all powers the undersigned would possess if
personally present, upon the matters specified on the reverse side.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS
INDICATED AS TO THE PROPOSAL, THE PROXIES SHALL VOTE FOR SUCH PROPOSAL. THE
PROXIES MAY VOTE AT THEIR DISCRETION ON ANY OTHER MATTER WHICH MAY PROPERLY COME
BEFORE THE MEETING.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
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