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 Co-Registrants [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
CLAYMORE/GUGGENHEIM STRATEGIC OPPORTUNITIES FUND
(Names of Co-Registrants As Specified in their Charters)
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.
CLAYMORE LOGO (R)
CLAYMORE GROUP
2455 CORPORATE WEST DRIVE
LISLE, ILLINOIS 60532
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December 4, 2009
Dear Shareholder:
I am writing to inform you that Claymore Group Inc. ("Claymore
Group") has merged with an indirect subsidiary of Guggenheim Partners, LLC (the
"Transaction"). As a result of the Transaction, Claymore Group, and its
associated entities, including your fund's investment adviser, Claymore
Advisors, LLC (the "Adviser"), are now indirect subsidiaries of Guggenheim
Partners, LLC ("Guggenheim"). Guggenheim is also the parent of your fund's
investment sub-adviser, Guggenheim Partners Asset Management, LLC ("GPAM").
Upon the closing of the Transaction, the investment advisory
agreement between the Adviser and your fund automatically terminated pursuant
to its terms. In addition, although the Transaction did not directly involve
GPAM, which has been and continues to be a subsidiary of Guggenheim,
consummation of the Transaction and the termination of the advisory agreement
resulted in the termination of the investment sub-advisory agreement between
your fund, the Adviser and GPAM pursuant to its terms.
The Adviser and GPAM continue to provide services to your fund on an
interim basis, as permitted by the Investment Company Act of 1940. However, in
order for the Adviser and GPAM to continue to provide services to your fund
beyond the interim period, Shareholders are being asked to approve a new
investment advisory agreement between the Adviser and your fund and a new
investment sub-advisory agreement between the Adviser, GPAM and your fund.
Important facts about the Transaction are:
o The Transaction has no effect on the number of fund shares
you own or the value of those shares.
o Subject to Shareholder approval, the Adviser will continue
to provide investment advisory services to your fund, and
GPAM will continue to provide investment sub-advisory
services to your fund.
o Your fund's contractual advisory fee rate and sub-advisory
fee rate will not increase.
o There are no material differences between the terms of the
proposed new investment advisory agreement and the terms of
the prior investment advisory agreement or between the
terms of the proposed new investment sub-advisory agreement
and the terms the prior investment sub-advisory agreement.
The enclosed Notice of Annual Meeting of Shareholders and Proxy
Statement set forth information relating to the proposals to be addressed at the
annual meeting of Shareholders of your fund. The Board of Trustees of your fund
believes that the proposals set forth in the Notice of Annual Meeting of
Shareholders are important and recommends that you read the enclosed materials
carefully. AFTER CAREFUL CONSIDERATION, THE BOARD OF TRUSTEES OF YOUR FUND HAS
APPROVED EACH PROPOSAL AND RECOMMENDS THAT YOU VOTE "FOR" EACH PROPOSAL.
Your vote is important. I encourage all Shareholders to participate
in the governance of your fund. Please take a moment now to vote--either by
completing and returning the enclosed proxy card(s) in the enclosed
postage-paid return envelope, by telephone or through the Internet.
The Adviser has retained The Altman Group, a professional proxy
solicitation firm, on behalf of the Fund, to assist in the solicitation of
proxies. As the meeting date approaches, if you do NOT vote, you may receive a
phone call from them asking you to vote. If you have any questions concerning
the proxy, please feel free to contact our proxy information line at (866)
796-1290.
Respectfully,
/s/ David C. Hooten
David C. Hooten
Chairman
Claymore Group, Inc.
GUGGENHEIM LOGO (R) CLAYMORE LOGO (R)
CLAYMORE/GUGGENHEIM STRATEGIC OPPORTUNITIES FUND
2455 CORPORATE WEST DRIVE
LISLE, ILLINOIS 60532
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 12, 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 Claymore/Guggenheim
Strategic Opportunities Fund (the "Fund") that the annual meeting of
shareholders of the Fund (the "Meeting") will be held at the offices of
Claymore Advisors, LLC, 2455 Corporate West Drive, Lisle, Illinois 60532 on
January 12, 2010, at 10:30 a.m., Central time. The Meeting is being held for
the following purposes:
1. To approve a new investment advisory agreement between the
Fund and Claymore Advisors, LLC;
2. To approve a new investment sub-advisory agreement between
the Fund, Claymore Advisors, LLC and Guggenheim Partners
Asset Management, LLC;
3. To elect two Trustees as Class I Trustees to serve until the
Fund's annual meeting of Shareholders for the Fund's fiscal
year ending May 31, 2012, or until his successor shall have
been elected and qualified; and
4. To transact such other business as may properly come before
the Meeting or any adjournments or postponements thereof.
THE BOARD OF TRUSTEES OF THE FUND (THE "BOARD"), INCLUDING THE
INDEPENDENT TRUSTEES, RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE NEW
INVESTMENT ADVISORY AGREEMENT, FOR APPROVAL OF THE NEW INVESTMENT SUB-ADVISORY
AGREEMENT AND FOR THE ELECTION OF EACH TRUSTEE NOMINEE NOMINATED BY THE BOARD
AS SET FORTH IN THE ACCOMPANYING PROXY STATEMENT.
The Board has fixed the close of business on November 12, 2009 as the
record date for the determination of Shareholders entitled to notice of, and to
vote at, the Meeting. We urge you to complete, 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 Meeting.
/s/ J. Thomas Futrell
J. Thomas Futrell
on behalf of the Board of Trustees
Lisle, Illinois
December 4, 2009
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING IN
PERSON OR BY PROXY. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE
BY TELEPHONE, INTERNET OR MAIL. IF YOU ARE VOTING BY MAIL PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE. IF
YOU WISH TO ATTEND THE MEETING AND VOTE IN PERSON, YOU WILL BE ABLE TO DO SO
AND YOUR VOTE AT THE MEETING WILL REVOKE ANY PROXY YOU MAY HAVE SUBMITTED.
MERELY ATTENDING THE 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 BY TELEPHONE OR THROUGH THE
INTERNET PURSUANT TO THE INSTRUCTIONS CONTAINED ON THE PROXY CARD) TODAY.
CLAYMORE/GUGGENHEIM STRATEGIC OPPORTUNITIES FUND
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PROXY STATEMENT
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FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 12, 2010
This proxy statement (the "Proxy Statement") is furnished to holders
of common shares of beneficial interest, par value $0.01 per share ("Shares"),
of Claymore/Guggenheim Strategic Opportunities 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 January 12, 2010, and any adjournments or postponements thereof (the
"Meeting"). The Meeting will be held at the offices of Claymore Advisors, LLC,
2455 Corporate West Drive, Lisle, Illinois 60532, on January 12, 2010 at 10:30
a.m., Central time. Holders of Shares are referred to herein as
"Shareholders."
This Proxy Statement gives you information you need to vote on the
matters listed on the accompanying Notice of Annual Meeting of Shareholders
("Notice of Meeting"). Much of the information in this Proxy Statement is
required under rules of the Securities and Exchange Commission ("SEC"). If
there is anything you don't understand, please contact our proxy information
line at (866) 796-1290.
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF THE FUND'S MOST
RECENT ANNUAL REPORT AND SEMI-ANNUAL REPORT TO SHAREHOLDERS TO ANY SHAREHOLDER
UPON REQUEST. REQUESTS SHOULD BE DIRECTED TO CLAYMORE SECURITIES, INC., 2455
CORPORATE WEST DRIVE, LISLE, ILLINOIS 60532, (800) 345-7999.
The Notice of Meeting, this Proxy Statement and the enclosed proxy
card are first being sent to Shareholders on or about December 4, 2009.
While we strongly encourage you to read the full text of this Proxy
Statement, we are also providing you the following brief overview of the
proposals addressed in this Proxy Statement (the "Proposals"), in a Question and
Answer format, to help you understand and vote on the Proposals. Your vote is
important. Please vote--either by completing and returning the enclosed proxy
card(s) in the enclosed postage-paid return envelope, by telephone or through
the Internet.
o WHY IS THE FUND SENDING ME THIS INFORMATION?
You are receiving these materials because on November 12, 2009 (the
"Record Date") you owned Shares of the Fund and, as a result, have a
right to vote on the Proposals and are entitled to be present and to
vote at the Meeting or any adjournments or postponements thereof. Each
Share is entitled to one vote on each Proposal.
1
o WHY IS THE MEETING OF SHAREHOLDERS BEING HELD?
The Fund's Shares are listed on the New York Stock Exchange (the
"NYSE"), which requires the Fund to hold an annual meeting of
Shareholders to elect Trustees each fiscal year. Shareholders of the
Fund are being asked to vote at the Meeting to elect two Trustees as
Class I Trustees (Mr. Randall C. Barnes and Mr. Kevin M. Robinson are
the nominees) to serve until the Fund's 2012 annual meeting of
Shareholders or until their respective successors shall have been
elected and qualified.
o WHY ARE SHAREHOLDERS BEING ASKED TO APPROVE A NEW ADVISORY AGREEMENT
AND NEW SUB-ADVISORY AGREEMENT?
Claymore Group Inc. ("Claymore Group") is the parent of the Fund's
investment adviser, Claymore Advisors, LLC ("Claymore" or the
"Adviser"). The Adviser and the Fund have retained Guggenheim Partners
Asset Management, LLC ("GPAM" or the "Sub-Adviser") as investment
sub-adviser.
Claymore Group entered into an agreement and plan of merger pursuant
to which Claymore Group would merge with an indirect wholly-owned
subsidiary of Guggenheim Partners, LLC ("Guggenheim"), with Claymore
Group being the surviving company and becoming an indirect subsidiary
of Guggenheim (the "Transaction"). Guggenheim is also the parent of
GPAM, however, the Transaction did not directly involve GPAM, which
has been and continues to be a subsidiary of Guggenheim.
The Transaction was completed on October 14, 2009 (the "Closing
Date"), at which time Claymore Group and its associated entities,
including the Adviser, became indirect wholly-owned subsidiaries of
Guggenheim. The Transaction constituted an "assignment," as defined in
the Investment Company Act of 1940, as amended (the "1940 Act"), of
the investment advisory agreement between the Adviser and the Fund
(the "Prior Advisory Agreement"), which resulted in the automatic
termination of the Prior Advisory Agreement pursuant to its terms. The
Transaction and the termination of the Prior Advisory Agreement also
resulted in the termination of the sub-advisory agreement among the
Adviser, GPAM and the Fund (the "Prior Sub-Advisory Agreement.") As
permitted pursuant to Rule 15a-4 under the 1940 Act, the Board
(including, with respect to each agreement, a majority of the trustees
who are not parties to such agreement or interested persons of any
such party (with respect to each respective agreement, the
"Independent Trustees")) has approved an interim investment advisory
agreement between the Adviser and the Fund (the "Interim
2
Advisory Agreement") and an interim investment sub-advisory agreement
among the Adviser, the Sub-Adviser and the Fund (the "Interim
Sub-Advisory Agreement"). The Interim Advisory Agreement and Interim
Sub-Advisory Agreement became effective on the Closing Date. Pursuant
to such agreements, the Adviser and the Sub-Adviser may continue to
serve the Fund in such capacities on an interim basis for up to 150
days following the Closing Date, pending receipt of Shareholder
approval of new agreements.
Therefore, in order for the Adviser to continue serving as the Fund's
investment adviser and the Sub-Adviser to continue serving as the
Fund's investment sub-adviser following the expiration of the 150 day
interim period, Shareholders must approve:
(i) a new investment advisory agreement between the Adviser and
the Fund (the "New Advisory Agreement"); and
(ii) a new investment sub-advisory agreement among the Adviser,
the Sub-Adviser and the Fund (the "New Sub- Advisory
Agreement").
o HOW DOES THE TRANSACTION AFFECT THE FUND?
Your investment in the Fund does not change as a result of the
Transaction. You still own the same Shares in the Fund, and the net
asset value of your investment does not change as a result of the
Transaction. Further, the Transaction does not result in any change in
the Fund's investment objectives or principal investment strategies.
o HOW DOES THE NEW ADVISORY AGREEMENT COMPARE WITH THE PRIOR ADVISORY
AGREEMENT?
The New Advisory Agreement, if approved by Shareholders of the Fund,
will still be with the Adviser and there will be no material
differences between the terms of the New Advisory Agreement and the
terms of the Prior Advisory Agreement.
o HOW DOES THE NEW SUB-ADVISORY AGREEMENT COMPARE WITH THE PRIOR
SUB-ADVISORY AGREEMENT?
The New Sub-Advisory Agreement, if approved by Shareholders of the
Fund, will still be with the same Sub-Adviser and there will be no
material differences between the terms of the New Sub-Advisory
Agreement and the terms of the Prior Sub-Advisory Agreement.
Guggenheim is also the parent of GPAM, however, the Transaction did
not directly involve GPAM, which has been and continues to be a
subsidiary of Guggenheim. The Transaction does not affect the
management or control of GPAM.
3
o WILL THE FUND'S FEES FOR INVESTMENT ADVISORY SERVICES INCREASE?
No. The advisory fee rate currently payable by the Fund to the Adviser
and the sub-advisory fee rates payable to the Sub-Adviser will not
change.
o WILL YOUR VOTE MAKE A DIFFERENCE?
YES! Your vote is important to ensure that the Proposals can be acted
upon at the Meeting. Additionally, your immediate response will help
save on the costs of any future solicitations of Shareholder votes for
the Meeting. We encourage all Shareholders to participate in the
governance of the Fund.
o WHO IS ASKING FOR YOUR VOTE?
The enclosed proxy is solicited by the Board for use at the Meeting to
be held on January 12, 2010, and, if the Meeting is adjourned or
postponed, at any later meetings, for the purposes stated in the
Notice of Meeting.
o HOW DOES THE BOARD RECOMMEND THAT SHAREHOLDERS VOTE ON THE PROPOSAL?
The Board, including the Independent Trustees, recommends that you
vote "FOR" approval of the New Advisory Agreement, "FOR" approval of
the New Sub-Advisory Agreement and "FOR" the election of each of the
Trustee nominees of the Board (Mr. Randall C. Barnes and Mr. Kevin M.
Robinson).
o HOW DO YOU CAST YOUR VOTE?
Whether or not you plan to attend the Meeting, we urge you to
complete, sign, date, and return the enclosed proxy card in the
postage-paid envelope provided or record your voting instructions via
telephone or the Internet so your Shares will be represented at the
Meeting. Information regarding how to vote 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 Meeting and vote in person, you will be able
to do so. You may contact our proxy information line at (866) 796-1290
to obtain directions to the site of the Meeting.
All Shares represented by properly executed proxies received prior to
the Meeting will be voted at the Meeting in accordance with the
instructions marked thereon or otherwise as provided therein. IF NO
4
SPECIFICATION IS MADE ON A PROPERLY EXECUTED PROXY CARD, IT WILL BE
VOTED FOR THE PROPOSALS. If any other business is brought before the
Meeting, your Shares will be voted at the proxies' discretion.
Shareholders who execute proxies or record their voting instructions
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 Meeting
and voting in person. Merely attending the Meeting, however, will not
revoke any previously submitted proxy.
Broker-dealer firms holding Shares in "street name" for the benefit of
their customers and clients will request the instructions of such
customers and clients on how to vote their Shares on the Proposal.
Under current interpretations of the NYSE, broker-dealers that are
members of the NYSE and that have not received instructions from a
customer may not vote such customer's Shares on a Proposal.
Broker-dealers who are not members of the NYSE may be subject to other
rules, which may or may not permit them to vote your Shares without
instruction. Therefore, you are encouraged to contact your broker and
record your voting instructions.
Therefore, if you beneficially own Shares that are held in "street
name" through a broker-dealer and if you have not given or do not give
voting instructions for your Shares, your Shares may not be voted at
all or may be voted in a manner that you may not intend. You are
strongly encouraged to be sure your broker-dealer or service
organization has instructions as to how your Shares are to be voted.
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 of the Fund held and a fractional vote with
respect to fractional Shares, with no cumulative voting.
o WHAT VOTE IS REQUIRED TO APPROVE THE PROPOSALS?
The New Advisory Agreement and the New Sub-Advisory Agreement must be
approved by a vote of a majority of the outstanding voting securities
of the Fund. The "vote of the majority of the outstanding voting
securities" is defined in the 1940 Act as the lesser of the vote of
(i) 67% or more of the voting securities of the Fund entitled to vote
thereon present at the Meeting or represented by proxy if holders of
more than 50% of the Fund's outstanding voting securities are present
or represented by proxy; or (ii) more than 50% of the outstanding
voting securities of the Fund entitled to vote thereon.
5
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 Meeting
at which a quorum is present is necessary to elect each Trustee
nominee.
o HOW MANY SHARES OF THE FUND WERE OUTSTANDING AS OF THE RECORD DATE?
At the close of business on the Record Date, the Fund had 9,156,530
Shares outstanding.
6
PROPOSAL 1: APPROVAL OF THE NEW ADVISORY AGREEMENT
BACKGROUND AND THE TRANSACTION
The Adviser serves as the investment adviser for the Fund and is
responsible for the Fund's management. The Adviser is a wholly-owned subsidiary
of Claymore Group, a privately-held financial services company offering unique
investment solutions for financial advisors and their valued clients. Based in
Lisle, Illinois, Claymore Group entities have provided supervision, management
or servicing on approximately $13.3 billion in assets, as of September 30,
2009.
On July 17, 2009, Claymore Group entered into an agreement and plan
of merger which governs the Transaction (the "Merger Agreement"), subsequently
amended on August 18, 2009, with two newly formed, wholly-owned subsidiaries of
Guggenheim, GuggClay Acquisition, Inc. ("Acquisition Corporation") and an
intermediate holding company ("Holdings," Holdings and Acquisition Corporation
being collectively referred to as the "Acquisition Subsidiaries"). On August
18, 2009, Guggenheim also agreed to arrange for substantial additional equity
and debt financing to Claymore Group, in an aggregate of up to approximately
$37 million, which was intended to be available prior to and regardless of
whether the Transaction was consummated. The equity financing, which closed in
September 2009, consisted of approximately $11.7 million for newly-issued
common stock of Claymore Group representing, on a fully diluted basis, 24.9% of
the outstanding common stock of Claymore Group. The debt financing consisted of
up to $25 million of subordinated loans, which was in addition to the up to $20
million of subordinated loans to Claymore Group previously arranged by
affiliates of Guggenheim as interim financing for working capital and for
inventory purchases in connection with Claymore Group's investment supervisory
business (all such subordinated loans being collectively referred to as the
"Debt Financing"). The Debt Financing could be drawn upon by Claymore Group
pursuant to its terms and is due three years from the issuance date, provided,
however, that any such Debt Financing drawn upon by Claymore Group shall become
immediately due upon certain breaches of covenants and upon any change of
control of Claymore Group.
On the Closing Date, October 14, 2009, the Transaction was
consummated and Claymore Group and its associated entities, including the
Adviser, became indirect subsidiaries of Guggenheim. Acquisition Corporation
merged with and into Claymore Group, with Claymore Group being the surviving
corporation. All shares of Claymore Group common stock issued and outstanding
immediately prior to the Transaction (except those held by the Acquisition
Subsidiaries or dissenting stockholders or held in treasury) were cancelled and
converted into the right to receive an aggregate cash payment of approximately
$39 million. All shares of Claymore Group common stock held prior to the
Transaction by the Acquisition Subsidiaries or held in treasury immediately
prior to the Transaction were cancelled without payment. All shares of
Acquisition Corporation were converted into common stock of Claymore Group.
7
GUGGENHEIM
Guggenheim is a global, independent, privately held, diversified
financial services firm with more than $100 billion in assets under supervision
and 800 dedicated professionals. Headquartered in Chicago and New York, the
firm operates through offices in 20 cities in the U.S., Europe and Asia.
Guggenheim operates businesses in investment management, capital markets,
wealth management and merchant banking. Within the investment and wealth
management businesses, Guggenheim specializes in fixed income and alternative
investments, and in providing sophisticated wealth advisory and family office
services. Within capital markets, it specializes in providing debt financing
and structured finance solutions to clients. Merchant banking activities
include its portfolio of investments in funds managed by it, joint venture
business investments, and new business launch activities not integrated into
other primary operating businesses. Guggenheim is also the parent of GPAM,
however, the Transaction did not directly involve GPAM, which has been and
continues to be a subsidiary of Guggenheim. Guggenheim is a wholly-owned
subsidiary of Guggenheim Capital, LLC, 227 West Monroe Street, 48th Floor,
Chicago, Illinois 60606. Sage Assets, Inc., 5949 Sherry Lane, Suite 1900,
Dallas, Texas 75225, a wholly-owned subsidiary of Sammons Enterprises, Inc.,
5949 Sherry Lane, Suite 1900, Dallas, Texas 75225, is a control person of
Guggenheim as a result of its equity ownership in excess of 25% (but less than
50%) of Guggenheim Capital, LLC.
PRIOR ADVISORY AGREEMENT
The Adviser served as the investment adviser for the Fund pursuant to
the Prior Advisory Agreement. The Prior Advisory Agreement was dated July 26,
2007, and was approved by the sole Shareholder of the Fund on July 9, 2007. The
continuation of the Prior Advisory Agreement was last approved by the Board on
May 4, 2009.
Pursuant to the Prior Advisory Agreement, the Fund paid to the
Adviser as full compensation for all services rendered by the Adviser as such,
a monthly fee in arrears at an annual rate equal to 1.00% of the Fund's average
daily Managed Assets. As used in each of the Prior Advisory Agreement, Interim
Advisory Agreement and New Advisory Agreement, "Managed Assets" of the Fund is
defined as the total assets of the Fund (including the assets attributable to
the proceeds from any financial leverage) minus the sum of the accrued
liabilities (other than the aggregate indebtedness constituting financial
leverage). Managed Assets shall include assets attributable to financial
leverage of any kind, including, without limitation, borrowing (including
through a credit facility, the issuance of debt securities or the purchase of
residual interest bonds), the issuance of preferred securities, the
reinvestment of collateral received for securities loaned in accordance with
the Fund's investment objectives and policies, and/or any other means. The Fund
paid advisory fees equal to $1,690,591 to the Adviser during the Fund's fiscal
year ended May 31, 2009. Out of the advisory fees received by the Adviser, the
Adviser pays sub-advisory fees to the Sub-Adviser as discussed under "Proposal
2: Approval of the New Sub-Advisory Agreement."
8
The Prior Advisory Agreement provided for its automatic termination
in the event of an "assignment," as defined in the 1940 Act. The closing of the
Transaction resulted in a change in control of Claymore Group and, ultimately,
its subsidiary the Adviser, which was deemed an "assignment" of the Prior
Advisory Agreement resulting in its termination. The Transaction is not,
however, expected to result in a change in the persons responsible for the
management of the Fund or in the operations of the Fund or in any changes in
the investment approach of the Fund.
INTERIM ADVISORY AGREEMENT
Rule 15a-4 under the 1940 Act permits the Board (including a majority
of the Independent Trustees) to approve and enter into an Interim Advisory
Agreement pursuant to which the Adviser may serve as investment adviser to the
Fund for up to 150 days following the Closing Date, pending receipt of
Shareholder approval of the New Advisory Agreement.
Based upon the considerations described below under "--Board
Considerations," the Board, including the Independent Trustees, approved the
Interim Advisory Agreement on September 28, 2009. In approving the Interim
Advisory Agreement, the Board, including a majority of the Independent
Trustees, determined that the scope and quality of services to be provided to
the Fund under the Interim Advisory Agreement would be at least equivalent to
the scope and quality of services provided under the Prior Advisory Agreement.
The compensation to be received by the Adviser under the Interim Advisory
Agreement is not greater than the compensation the Adviser would have received
under the Prior Advisory Agreement.
The Interim Advisory Agreement became effective upon the Closing
Date. There are no material differences between the terms of the Interim
Advisory Agreement and the terms of the Prior Advisory Agreement and the New
Advisory Agreement, except for those provisions in the Interim Advisory
Agreement which are necessary to comply with the requirements of Rule 15a-4
under the 1940 Act. The provisions of the Interim Advisory Agreement required
by Rule 15a-4 under the 1940 Act include:
(i) the Interim Advisory Agreement terminates upon the earlier
of the 150th day following the Closing Date or the
effectiveness of the New Advisory Agreement;
(ii) the Board or a majority of the Fund's outstanding voting
securities may terminate the Interim Advisory Agreement at
any time, without the payment of any penalty, on not more
than 10 calendar days' written notice to the Adviser;
(iii) the compensation earned by the Adviser under the Interim
Advisory Agreement will be held in an interest-bearing
escrow account with the Fund's custodian or a bank;
9
(iv) if a majority of the Fund's outstanding voting securities
approve the Fund's New Advisory Agreement by the end of the
150-day period, the amount in the escrow account (including
interest earned) will be paid to the Adviser; and
(v) if a majority of the Fund's outstanding voting securities do
not approve the Fund's New Advisory Agreement, the Adviser
will be paid, out of the escrow account, the lesser of (a)
any costs incurred in performing the Interim Advisory
Agreement (plus interest earned on that amount while in
escrow), or (b) the total amount in the escrow account (plus
interest earned).
NEW ADVISORY AGREEMENT
It is proposed that the Adviser and the Fund enter into the New
Advisory Agreement, to become effective upon the date of Shareholder approval.
Under Section 15(a) of the 1940 Act, the New Advisory Agreement requires the
approval of (i) the Board, including a majority of the Independent Trustees,
and (ii) the Shareholders of the Fund. It was a condition of the Merger
Agreement that the Board, including a majority of the Independent Trustees,
approve the New Advisory Agreement, on terms no less favorable to the Adviser,
taken as a whole, than the Prior Advisory Agreement. In the event that the
Shareholders of the Fund do not approve the New Advisory Agreement, the Adviser
may continue to act as the investment adviser pursuant to the Interim Advisory
Agreement for a period of up to 150 days following the Closing Date. In such
event, the Board will determine a course of action believed by the Board to be
in the best interests of the Fund and its Shareholders.
Based upon the considerations described below under "--Board
Considerations," the Board, including the Independent Trustees, approved the
New Advisory Agreement on September 28, 2009.
There are no material differences between the terms of the New
Advisory Agreement and the terms of the Prior Advisory Agreement. A form of the
New Advisory Agreement is attached as Appendix A hereto and the description of
the New Advisory Agreement is qualified in its entirety by reference to
Appendix A hereto.
Duties and Obligations. The New Advisory Agreement provides that
subject to the direction and control of the Fund's Board, the Adviser shall (i)
act as investment adviser for and supervise and manage the investment and
reinvestment of the Fund's assets, (ii) supervise the investment program of the
Fund and the composition of its investment portfolio, and (iii) arrange for the
purchase and sale of securities and other assets held in the investment
portfolio of the Fund. The New Advisory Agreement provides that in performing
its duties, the Adviser may delegate some or all of its duties and obligations
under the New Advisory Agreement to one or more investment sub-advisers or
investment managers. In addition, the New Advisory Agreement provides that the
Adviser shall furnish office facilities and equipment and clerical, bookkeeping
and administrative
10
services (other than such services, if any, provided by the Fund's other
service providers), as described in the New Advisory Agreement, to the extent
requested by the Fund. The duties and obligations of the Adviser under the New
Advisory Agreement are identical to the duties and obligations of the Adviser
under the Prior Advisory Agreement.
Compensation. The New Advisory Agreement does not result in any
change in the advisory fee rate paid by the Fund. Pursuant to the New Advisory
Agreement, the Fund pays to the Adviser as full compensation for all services
rendered by the Adviser as such, a monthly fee in arrears at an annual rate
equal to 1.00% of the Fund's average daily Managed Assets. The Adviser bears
all costs and expenses of its employees and any overhead incurred in connection
with its duties under the New Advisory Agreement and bears the costs of any
salaries or trustees fees of any officers or trustees of the Fund who are
affiliated persons (as defined in the 1940 Act) of the Adviser. These
provisions of the New Advisory Agreement, including the advisory fee rates, are
identical to provisions of the Prior Advisory Agreement.
Term and Termination. Assuming approval by Shareholders, the New
Advisory Agreement shall continue for an initial term of one year, provided,
however, that each Board intends to consider the continuation of the New
Advisory Agreement during such one year term. Thereafter, the New Advisory
Agreement shall continue in effect from year to year after the initial term if
approved annually (i) by the Fund's Board or the holders of a majority of the
outstanding voting securities of the Fund and (ii) by a majority of the
Trustees who are not "interested persons" of any party to the New Advisory
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. The New Advisory Agreement may be terminated (i) by the Fund
at any time, without the payment of any penalty, upon giving the Adviser 60
days' written notice, or (ii) by the Adviser on 60 days' written notice. The
New Advisory Agreement will also immediately terminate in the event of its
assignment, as defined in the 1940 Act. The length of the initial term of the
Prior Advisory Agreement was two years. Except with respect to the length of
the initial term, these provisions of the New Advisory Agreement are identical
to provisions of the Prior Advisory Agreement.
Limitation of Liability. The New Advisory Agreement provides that the
Adviser will not be liable for any error of judgment or mistake of law or for
any loss suffered by the Adviser or by the Fund in connection with the
performance of the New Advisory Agreement, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
reckless disregard by the Adviser of its duties under the New Advisory
Agreement. These provisions of the New Advisory Agreement are identical to
provisions of the Prior Advisory Agreement.
Use of the Name "Claymore." The New Advisory Agreement provides that
the Adviser has consented to the use by the Fund of the name or identifying
11
word "Claymore" in the name of the Fund and that the Adviser may require the
Fund to cease using "Claymore" in the name of the Fund if the Fund ceases to
employ, for any reason, the Adviser. These provisions of the New Advisory
Agreement are identical to provisions of the Prior Advisory Agreement.
SECTION 15(F) OF THE 1940 ACT
Section 15(f) of the 1940 Act is a safe harbor that provides that,
when a change in control of an investment adviser occurs, the investment
adviser or any of its affiliated persons may receive any amount or benefit in
connection with the change in control as long as two conditions are met. The
first condition specifies that no "unfair burden" may be imposed on the
investment company as a result of a transaction relating to the change in
control, or any express or implied terms, conditions or understandings. The
term "unfair burden," as defined in the 1940 Act, includes any arrangement
during the two-year period after the change in control transaction whereby the
investment adviser (or predecessor or successor adviser), or any interested
person of any such investment adviser, receives or is entitled to receive any
compensation, directly or indirectly, from the investment company or its
security holders (other than fees for bona fide investment advisory or other
services) or from any person in connection with the purchase or sale of
securities or other property to, from, or on behalf of the investment company
(other than fees for bona fide principal underwriting services). The second
condition specifies that, during the three-year period immediately following
consummation of the change of control transaction, at least 75% of the
investment company's board of directors or trustees must not be "interested
persons" (as defined in the 1940 Act) of the investment adviser or predecessor
adviser. If either condition of Section 15(f) is not met, the safe harbor in
not available.
The Adviser is relying on the safe harbor of Section 15(f).
Consistent with the first condition of Section 15(f), the Adviser and the
Acquisition Subsidiaries have agreed that they will use their reasonable best
efforts to ensure that there is no "unfair burden" imposed on the Fund as a
result of the Transaction. With respect to the second condition of Section
15(f), the Adviser and the Acquisition Subsidiaries have agreed that they will
use their reasonable best efforts to comply with and cause the Fund to conduct
its business to ensure that for a period of three years after the closing of
the Transaction at least 75% of the trustees of the Fund will not be
"interested persons" (as defined in the 1940 Act) of the Adviser or Guggenheim.
The Fund currently meets this condition. Therefore, the Adviser and the
Acquisition Subsidiaries represented to the Board that no unfair burden
would be imposed on the Fund as a result of the Transaction.
BOARD CONSIDERATIONS
Prior Advisory Agreement. On May 4, 2009, the Board, including
Independent Trustees, met to consider the renewal of the Prior Advisory
Agreement. As part of its review process, a Committee of the Board, consisting
solely of the Independent Trustees (each sometimes referred to in this Section
as the "Committee"), was represented by independent legal counsel. The Board
12
reviewed materials received from the Adviser and independent legal counsel. The
Board also had previously received, throughout the year, Board meeting
information regarding performance and operating results of the Fund.
In preparation for its review of the Prior Advisory Agreement, the
Committee communicated with independent legal counsel regarding the nature of
information to be provided, and independent legal counsel, on behalf of the
Committee, sent a formal request for information. The Adviser provided
extensive information in response to the request. Among other information, the
Adviser provided general information to assist the Committee in assessing the
nature and quality of services provided by the Adviser and information
comparing the investment performance, advisory fees and total expenses of the
Fund to other funds, information about the profitability of Prior Advisory
Agreement to the Adviser and the compliance program of the Adviser.
Based upon its review, the Committee and the Board concluded that it
was in the best interest of the Fund to renew the Prior Advisory Agreement. In
reaching this conclusion, no single factor was determinative in the Board's
analysis, but rather the Board considered a variety of factors, including the
nature, extent and quality of services provided by the Adviser, advisory fees,
performance, profitability, economies of scale and other benefits to the
Adviser. The specific factors considered by the Board will be described in
further detail in the Fund's semi-annual report to Shareholders for the period
ending November 30, 2009. The Fund will furnish, without charge, a copy of such
semi-annual report to Shareholders, when available, to any Shareholder upon
request. Requests should be directed to Claymore Securities, Inc., 2455
Corporate West Drive, Lisle, Illinois 60532, (800) 345-7999.
Interim Advisory Agreement and New Advisory Agreement. Provided below
is an overview of the primary factors the Board considered in connection with
the review of the Interim Advisory Agreement and the New Advisory Agreement.
The Board, including the Independent Trustees, approved the Interim Advisory
Agreement and the New Advisory Agreement.
The Board reviewed materials received from the Adviser, Guggenheim
and independent legal counsel. The Board also had previously received,
throughout the year, Board meeting information regarding performance and
operating results of the Fund. Earlier this year, the Adviser informed the
Board that it was in discussions with Guggenheim concerning a strategic
transaction, including a potential sale of a controlling interest in the
Adviser. The Adviser provided periodic reports to representatives of the Board
as to the status and nature of such discussions with Guggenheim and the
Adviser's operating and financial results. In the spring of 2009, the Adviser
informed the Board that Guggenheim had arranged up to $20 million of
subordinated loans to Claymore Group as interim financing for working capital
and for inventory purchases in connection with its business of creating,
distributing and supervising unit investment trusts and other investment
products.
13
Following the execution of the Merger Agreement, a telephonic meeting
was held on July 28, 2009, and attended by certain members of the Board, the
chief executive officer of Claymore Group and the chief executive officer of
Guggenheim. Such executive officers summarized the principal terms of the
Merger Agreement, and described the Transaction, the business plans for the
Adviser following the consummation of the Transaction and answered such
questions as were raised at the meeting. Representatives of the Board requested
additional information regarding the Transaction, Guggenheim and the impact of
the Transaction on the Shareholders of the Fund.
During the third quarter of 2009, the Committee received reports on
the progress of the Transaction, including the Debt Financing and additional
equity financing arranged by Guggenheim. As part of its review process, the
Committee was represented by independent legal counsel. The Committee reviewed
materials received from the Adviser, Guggenheim and independent legal counsel.
The Adviser and Guggenheim provided, among other information, information
regarding the terms of the Transaction and potential benefits to the Adviser
from the Transaction. The information provided regarding Guggenheim included
(i) financial information, (ii) information regarding senior executives of the
firm, (iii) information regarding other Guggenheim affiliated investment
managers, (iv) information regarding litigation and regulatory matters and (v)
potential conflicts of interest. The Adviser and Guggenheim also provided
information regarding Guggenheim's and the Adviser's intentions for the
business, operations and personnel of the Adviser following the closing of the
Transaction. The Committee met and discussed the Transaction and the Interim
Advisory Agreement and the New Advisory Agreement in September 2009. Additional
supplemental information regarding the Transaction and Guggenheim was provided
by the Adviser and Guggenheim and reviewed by the Committee.
Subsequent to these meetings, the Board met in person to consider the
Interim Advisory Agreement and the New Advisory Agreement at a meeting held on
September 28, 2009. At such meeting, representatives from the Adviser and
Guggenheim discussed the Transaction with, and answered questions from, the
Board. The Committee met in executive session to discuss the Transaction and
the information provided at the Board meetings. The Committee concluded that it
was in the best interest of the Fund to approve the Interim Advisory Agreement
and the New Advisory Agreement and, accordingly, recommended to the Board the
approval of the Interim Advisory Agreement and the New Advisory Agreement. The
Board subsequently approved the Interim Advisory Agreement and approved the New
Advisory Agreement for a one-year term. The Board also determined to consider
the continuation of the agreement during the course of the one-year term by
conducting a thorough review of the various information that is part of the
Board's regular annual consideration of the continuation of the Fund's advisory
agreement. In reaching the conclusion to approve the Interim Advisory Agreement
and the New Advisory Agreement, no single factor was determinative in the
Board's analysis, but rather the Board considered a variety of factors.
Provided below is an
14
overview of the primary factors the Board considered in connection with the
review of the Interim Advisory Agreement and the New Advisory Agreement.
In connection with the Board's consideration of the Interim Advisory
Agreement and the New Advisory Agreement, the Trustees considered, among other
information, the following factors, in addition to other factors noted in this
Proxy Statement:
o within the last year, the Board had engaged in a thorough
review of the various factors, including fees and
performance, that are part of the decision whether to
continue an advisory agreement;
o Board approval of the New and Interim Advisory Agreement was
a condition to the closing of the Transaction;
o Claymore's statement to the Board that the manner in which
the Fund's assets are managed will not change as a result of
the Transaction;
o the aggregate advisory fee rate payable by the Fund will not
change under the Interim Advisory Agreement or the New
Advisory Agreement, except for those provisions in the
Interim Advisory Agreement which are necessary to comply
with Rule 15a-4 under the 1940 Act;
o there are no material differences between the terms of the
Interim Advisory Agreement and the New Advisory Agreement
and the terms of the Prior Advisory Agreement;
o the capabilities of the Adviser's personnel who will provide
management, shareholder servicing and administrative
services to the Fund are not expected to change, and the key
personnel who currently provide management, shareholder
servicing and administrative services to the Fund are
expected to continue to do so after the Transaction;
o the assurance from the Adviser and Guggenheim that following
the Transaction there will not be any diminution in the
nature, quality and extent of services provided to the Fund;
o the Adviser's current financial condition;
o the impact of the Transaction on the Adviser's day-to-day
operations;
o the reputation, capabilities, experience, organizational
structure and financial resources of Guggenheim;
o the long-term business goals of Guggenheim and the Adviser
with regard to the business and operations of the Adviser;
o that Shareholders of the Fund will not bear any costs in
connection with the Transaction, inasmuch as the Adviser
will bear the costs,
15
fees and expenses incurred by the Fund in connection with
this Proxy Statement and any other costs of the Fund
associated with the Transaction; and
o that the Adviser and the Acquisition Subsidiaries have
agreed to refrain from imposing or seeking to impose, for a
period of two years after the Closing, any "unfair burden"
(within the meaning of Section 15(f) of 1940 Act) on the
Fund.
Nature, Extent and Quality of Services Provided by the Adviser. The
Board noted that key management personnel servicing the Fund are expected to
remain with the Adviser following the Transaction and that the services
provided to the Fund by the Adviser are not expected to change. The Board also
considered the Adviser's and Guggenheim's representations to the Board that
Guggenheim intends for the Adviser to continue to operate following the closing
of the Transaction in much the same manner as it operates today, and that the
impact of the Transaction on the day-to-day operations of the Adviser would be
neutral or positive. The Board also considered Guggenheim's statement that the
Adviser's compliance policies and procedures, disaster recovery plans,
information security controls and insurance program would not change materially
following consummation of the Transaction. Based on this review, the Board
concluded that the range and quality of services provided by the Adviser to the
Fund were expected to continue under the Interim Advisory Agreement and the New
Advisory Agreement at the same or improved levels.
Advisory Fees. The Board also considered the fact that the advisory
fee rates payable to the Adviser would be the same under the Interim Advisory
Agreement and the New Advisory Agreement as they are under the Prior Advisory
Agreement, which had within the last year been determined to be reasonable. The
Board concluded that these factors supported approval of the Interim Advisory
Agreement and the New Advisory Agreement.
Performance. With respect to the performance of the Fund, the Board
considered that, subject to Shareholder approval of the New Sub-Advisory
Agreement, the Sub-Adviser would continue to manage the portfolio following
the closing of the Transaction. The Board concluded that this factor supported
approval of the Interim Advisory Agreement and the New Advisory Agreement.
Profitability. The Board noted that it was too early to predict how
the Transaction may affect the Adviser's future profitability from its
relationship with the Fund, but concluded that this matter would be given
further consideration on an annual basis going forward. The Board also noted
that Adviser's fee rates under the Interim Advisory Agreement and the New
Advisory Agreement are the same as those assessed under the Prior Advisory
Agreement.
Economies of Scale. The Board considered any potential economies of
scale that may result from the Transaction. The Board further noted
Guggenheim's
16
statement that such economies of scale could not be predicted in advance of the
closing of the Transaction.
Other Benefits. The Board noted its prior determination that the
advisory fees were reasonable, taking into consideration other benefits to the
Adviser (including the receipt by Claymore of an administrative fee). The Board
also considered other benefits to the Adviser, Guggenheim and their affiliates
expected to be derived from their relationships with the Fund as a result of
the Transaction and noted that no additional benefits were reported by the
Adviser or Guggenheim as a result of the Transaction. Therefore, the Board
concluded that the advisory fees continued to be reasonable, taking into
consideration other benefits.
ADDITIONAL INFORMATION ABOUT THE ADVISER
Principal Executive Officer and Board of Directors. The Chairman and
Chief Executive Officer of Claymore Group is David C. Hooten. The Board of
Directors of Claymore Group consists of David C. Hooten, Michael J. Rigert,
Vice Chairman of Claymore Group, Anthony J. DiLeonardi, Vice Chairman of
Claymore Group, and Bruce R. Albelda, Chief Financial Officer of Claymore Group
and Scott Minerd, Chief Investment Officer of Guggenheim.
Relationships with the Fund. Nicholas Dalmaso, a former equity owner
of Claymore Group, resigned as a Trustee of the Fund following the closing of
the Transaction. The Board appointed Kevin M. Robinson, an officer and employee
of the Adviser and certain of its affiliates, to fill the vacancy resulting
from Mr. Dalmaso's resignation. Mr. Robinson is standing for election as a
Trustee at the Meeting.
No other Trustee of the Fund is an officer, employee, director,
general partner or shareholder of the Adviser or has any material direct or
indirect interest in the Adviser any other person controlling, controlled by or
under common control with the Adviser.
Certain officers of the Fund, as identified herein under "Proposal
3--Election of Trustees--Executive Officers," are employees or officers of the
Adviser.
The Adviser also serves as administrator to the Fund, as described
under "Additional Information--Administrator." It is expected that the Adviser
will continue to provide administrative services to the Fund following
consummation of the Transaction.
SHAREHOLDER APPROVAL
The New Advisory Agreement must be approved by a vote of a majority
of the outstanding voting securities of the Fund. The "vote of the majority of
the outstanding voting securities" is defined in the 1940 Act as the lesser of
the vote of (i) 67% or more of the voting securities of the Fund entitled to
vote thereon present at the Meeting or represented by proxy if holders of more
than 50% of the Fund's outstanding voting securities are present or represented
by proxy; or (ii) more than
17
50% of the outstanding voting securities of the Fund entitled to vote thereon.
Shareholders will have equal voting rights (i.e. one vote per Share).
Abstentions and "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 Proposal 1.
BOARD RECOMMENDATION
The Board, including the Independent Trustees, recommends that you
vote "FOR" approval of the New Advisory Agreement.
18
PROPOSAL 2: APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT
BACKGROUND
GPAM serves as the investment sub-adviser for the Fund and is
responsible for the day-to-day management of the Fund's investment portfolio.
Guggenheim is also the parent of GPAM, however, the Transaction did not
directly involve GPAM, which has been and continues to be a subsidiary of
Guggenheim. The Transaction will not result in any change of the management or
control of GPAM or any change in the personnel of GPAM responsible for
providing portfolio management services to the Fund. GPAM is located at 100
Wilshire Boulevard, Suite 500, Santa Monica, California 90401.
PRIOR SUB-ADVISORY AGREEMENT
The Sub-Adviser served as the investment sub-adviser for the Fund
pursuant to the Prior Sub-Advisory Agreement. The Prior Sub-Advisory Agreement
was dated July 26, 2007, and was approved by the sole Shareholder of the Fund
on July 9, 2007. The continuation of the Prior Advisory Agreement was last
approved by the Board on May 4, 2009.
Pursuant to the Prior Sub-Advisory Agreement, the Adviser paid to the
Sub-Adviser as full compensation for all services rendered by the Sub-Adviser
as such, a monthly fee in arrears at an annual rate equal to 0.50% of the
Fund's average daily Managed Assets. As used in each of the Prior Sub-Advisory
Agreement, Interim Sub-Advisory Agreement and New Sub-Advisory Agreement,
"Managed Assets" of the Fund is defined as the total assets of the Fund
(including the assets attributable to the proceeds from any financial leverage)
minus the sum of the accrued liabilities (other than the aggregate indebtedness
constituting financial leverage). Managed Assets shall include assets
attributable to financial leverage of any kind, including, without limitation,
borrowing (including through a credit facility, the issuance of debt securities
or the purchase of residual interest bonds), the issuance of preferred
securities, the reinvestment of collateral received for securities loaned in
accordance with the Fund's investment objectives and policies, and/or any other
means. The Adviser paid sub-advisory fees equal to $845,296 to the Sub-Adviser
during the Fund's fiscal year ended May 31, 2009.
The consummation of the Transaction and the automatic termination of
the Prior Advisory Agreement resulted in the termination of the Prior
Sub-Advisory Agreement pursuant to its terms.
INTERIM SUB-ADVISORY AGREEMENT
Rule 15a-4 under the 1940 Act permits the Board (including a majority
of the Independent Trustees) to approve and enter into an Interim Sub-Advisory
Agreement pursuant to which the Sub-Adviser may serve as investment sub-adviser
to the Fund for up to 150 days following the Closing Date, pending receipt of
Shareholder approval of the New Sub-Advisory Agreement.
19
Based upon the considerations described below under "--Board
Considerations," the Board, including the Independent Trustees, approved the
Interim Sub-Advisory Agreement on September 28, 2009. In approving the Interim
Sub-Advisory Agreement, the Board, including a majority of the Independent
Trustees, determined that the scope and quality of services to be provided to
the Fund under the Interim Sub-Advisory Agreement would be at least equivalent
to the scope and quality of services provided under the Prior Sub-Advisory
Agreement. The compensation to be received by the Sub-Adviser under the Interim
Sub-Advisory Agreement is not greater than the compensation the Sub-Adviser
would have received under the Prior Sub-Advisory Agreement.
The Interim Sub-Advisory Agreement became effective upon the Closing
Date. There are no material differences between the terms of the Interim
Sub-Advisory Agreement and the terms of the Prior Sub-Advisory Agreement or the
New Sub-Advisory Agreement, except for those provisions in the Interim
Sub-Advisory Agreement which are necessary to comply with the requirements of
Rule 15a-4 under the 1940 Act. The provisions of the Interim Sub-Advisory
Agreement required by Rule 15a-4 under the 1940 Act include:
(i) the Interim Sub-Advisory Agreement terminates upon the
earlier of the 150th day following the Closing Date or the
effectiveness of the New Sub-Advisory Agreement;
(ii) the Board or a majority of the Fund's outstanding voting
securities may terminate the Interim Sub-Advisory Agreement
at any time, without the payment of any penalty, on not more
than 10 calendar days' written notice to the Sub-Adviser;
(iii) the compensation earned by the Sub-Adviser under the Interim
Sub- Advisory Agreement will be held in an interest-bearing
escrow account with the Fund's custodian or a bank;
(iv) if a majority of the Fund's outstanding voting securities
approve the Fund's New Sub-Advisory Agreement by the end of
the 150-day period, the amount in the escrow account
(including interest earned) will be paid to the Sub-Adviser;
and
(v) if a majority of the Fund's outstanding voting securities do
not approve the Fund's New Sub-Advisory Agreement, the
Sub-Adviser will be paid, out of the escrow account, the
lesser of (a) any costs incurred in performing the Interim
Sub-Advisory Agreement (plus interest earned on that amount
while in escrow), or (b) the total amount in the escrow
account (plus interest earned).
NEW SUB-ADVISORY AGREEMENT
It is proposed that the Adviser, the Sub-Adviser and the Fund enter
into the New Sub-Advisory Agreement, to become effective upon the date of
Shareholder approval. Under Section 15(a) of the 1940 Act, the New Sub-Advisory
Agreement requires the approval of (i) the Board, including a majority of the
20
Independent Trustees, and (ii) the Shareholders of the Fund. In the event that
the Shareholders of the Fund do not approve the New Sub-Advisory Agreement, the
Sub-Adviser may continue to act as the investment sub-adviser pursuant to the
Interim Sub-Advisory Agreement for a period of up to 150 days following the
Closing Date. In such event, the Board will determine a course of action
believed by the Board to be in the best interests of the Fund and its
Shareholders.
Based upon the considerations described below under "--Board
Considerations," the Board, including the Independent Trustees, approved the
New Sub-Advisory Agreement on September 28, 2009.
There are no material differences between the terms of the New
Sub-Advisory Agreement and the terms of the Prior Sub-Advisory Agreement. A
form of the New Sub-Advisory Agreement is attached as Appendix B hereto and the
description of the New Sub-Advisory Agreement is qualified in its entirety by
reference to Appendix B hereto.
Duties and Obligations. Under the New Sub-Advisory Agreement, the
Sub-Adviser is retained to provide investment sub-advisory services with
respect to the Fund's investment portfolio. The services to be provided by the
Sub-Adviser include certain of the day-to-day operations of the Fund subject to
the oversight and supervision of the Adviser and the direction and control of
the Board. Such services may include (i) managing the investment and
reinvestment of the Fund's assets in accordance with the Fund's investment
objective and policies, (ii) arranging for the purchase and sale of securities
and other assets, (iii) providing investment research and credit analysis
concerning the Fund's assets, (iv) maintaining books and records required to
support the Fund's investment operations, (v) monitoring on a daily basis the
investment activities and portfolio holdings of the Fund and (vi) voting
proxies relating to the Fund's portfolio securities in accordance with the
Sub-Adviser's proxy voting policies and procedures. The services provided by
the Sub-Adviser pursuant to the New Sub-Advisory Agreement are identical to the
services provided by the Sub-Adviser pursuant to the Sub-Advisory Agreement.
Compensation. The New Sub-Advisory Agreement does not result in any
change in the sub-advisory fee rate paid to the Sub-Adviser. Pursuant to the
New Sub-Advisory Agreement, the Adviser pays to the Sub-Adviser as full
compensation for all services rendered by the Sub-Adviser as such, a monthly
fee in arrears at an annual rate equal to 0.50% of the Fund's average daily
Managed Assets. The Sub-Adviser bears all costs and expenses of its employees
and any overhead incurred in connection with its duties under the New
Sub-Advisory Agreement and bears the costs of any salaries or trustees fees of
any officers or trustees of the Fund who are affiliated persons (as defined in
the 1940 Act) of the Sub-Adviser. These provisions of the New Sub-Advisory
Agreement, including the advisory fee rates, are identical to provisions of the
Prior Sub-Advisory Agreement.
Term and Termination. Assuming approval by Shareholders, the New
Sub-Advisory Agreement shall continue for an initial term of one year,
provided,
21
however, that the Board intends to consider the continuation of the New
Sub-Advisory Agreement during such one year term. Thereafter, the New
Sub-Advisory Agreement shall continue in effect from year to year after the
initial term if approved annually (i) by the Fund's Board or the holders of a
majority of the outstanding voting securities of the Fund and (ii) by a
majority of the Trustees who are not "interested persons" of any party to the
New Sub-Advisory Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. The New Sub-Advisory Agreement may be
terminated (i) by the Fund at any time, without the payment of any penalty,
upon giving the Sub-Adviser 60 days' written notice, or (ii) by the Sub-Adviser
on 60 days' written notice. Each New Sub-Advisory Agreement will also
immediately terminate in the event of its assignment, as defined in the 1940
Act. The New Sub-Advisory Agreement also terminates upon the termination of the
Fund's Advisory Agreement. The length of the initial term of the Prior
Sub-Advisory Agreement was two years. Except with respect to the length of the
initial term, these provisions of each New Sub-Advisory Agreement are identical
to provisions of the corresponding Prior Sub-Advisory Agreement.
Limitation of Liability. The New Sub-Advisory Agreement provides that
the Sub-Adviser will not be liable for any error of judgment or mistake of law
or for any loss suffered by the Adviser or by the Fund in connection with the
performance of the New Sub-Advisory Agreement, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Sub-Adviser in the performance of its duties or
from reckless disregard by the Sub-Adviser of its duties under the New
Sub-Advisory Agreement. These provisions of the New Sub-Advisory Agreement are
identical to provisions of the Prior Sub-Advisory Agreement.
Use of the Sub-Adviser's Name. The New Sub-Advisory Agreement
provides that the Sub-Adviser has consented to the use by the Fund of the name
of the Sub-Adviser or other identifying words subject to certain conditions and
that the Sub-Adviser may require the Fund to cease using such name or words if
the Fund ceases to employ, for any reason, the Sub-Adviser. These provisions of
the New Sub-Advisory Agreement are identical to provisions of the Prior
Sub-Advisory Agreement.
BOARD CONSIDERATIONS
Prior Sub-Advisory Agreement. On May 4, 2009, the Board, including
Independent Trustees, met to consider the renewal of the Prior Sub-Advisory
Agreement. As part of its review process, a Committee of the Board, consisting
solely of the Independent Trustees (sometimes referred to in this Section as
the "Committee"), was represented by independent legal counsel. The Board
reviewed materials regarding the Sub-Adviser. With respect to the approval of
the continuance of the Sub-Advisory Agreement, the Board also had previously
received, throughout the year, Board meeting information regarding performance
and operating results of the Fund.
22
In preparation for its review of the Prior Sub-Advisory Agreement,
the Committee communicated with independent legal counsel regarding the nature
of information to be provided, and independent legal counsel, on behalf of the
Committee, sent a formal request for information. The Sub-Adviser provided
extensive information in response to the request. Among other information, the
Committee received general information to assist the Committee in assessing the
nature and quality of services provided by the Sub-Adviser and information
comparing the investment performance, advisory fees and total expenses of the
Fund to other funds, information about the profitability from the Prior
Sub-Advisory Agreement to the Sub-Adviser and the compliance program of the
Sub-Adviser.
Based upon its review of the Prior Sub-Advisory Agreement, the
Committee and the Board concluded that it was in the best interest of the Fund
to renew the Prior Sub-Advisory Agreement. In reaching this conclusion, no
single factor was determinative in the Board's analysis, but rather the Board
considered a variety of factors, including the nature, extent and quality of
services provided by the Sub-Adviser, advisory fees, performance,
profitability, economies of scale and other benefits to the Sub-Adviser. The
specific factors considered by the Board will be described in further detail in
the Fund's semi-annual report to Shareholders for the period ending November
30, 2009. The Fund will furnish, without charge, a copy of such semi-annual
report to Shareholders, when available, to any Shareholder upon request.
Requests should be directed to Claymore Securities, Inc., 2455 Corporate West
Drive, Lisle, Illinois 60532, (800) 345-7999.
New Sub-Advisory Agreement and Interim Sub-Advisory Agreement. In
conjunction with the consideration of the Transaction and the approval of the
New Advisory Agreement and the Interim Advisory Agreement, the Board, including
the Independent Trustees, also considered the New Sub-Advisory Agreement and
the Interim Sub-Advisory Agreement. The Board noted that while the closing of
the Transaction would result in the termination of the Prior Sub-Advisory
Agreement pursuant to its terms, the Sub-Adviser was not directly involved in
the Transaction and the operations of the Sub-Adviser and the services to be
provided by the Sub-Adviser would be unaffected by the Transaction. The Board
considered the information about Guggenheim provided in connection with the
review of the Transaction. The Board determined that there were no material
differences between the terms of the Interim Sub-Advisory Agreement and the
Prior Sub-Advisory Agreement, except with respect to those provisions required
to comply with Rule 15a-4 under the 1940 Act, and that there were no material
differences between the terms of the New Sub-Advisory Agreement and the Prior
Sub-Advisory Agreement. The Board noted that the compensation to be received by
the Sub-Adviser under the Interim Sub-Advisory Agreement and the New
Sub-Advisory Agreement is not greater than to the compensation the Sub-Adviser
would have received under the Prior Sub-Advisory Agreement. The Board noted
that the scope and quality of services to be provided to the Fund under the
Interim Sub-Advisory Agreement and the New Sub-Advisory Agreement would be at
least
23
equivalent to the scope and quality of services provided under the Prior
Sub-Advisory Agreement. The Board noted that, within the last year, it had
engaged in a thorough review of the various factors, including fees and
performance, that are part of the evaluation of the renewal of a sub-advisory
agreement. The Board noted that the factors previously considered with respect
to approval of the Prior Sub-Advisory Agreement continued to support the
approval of the New Sub-Advisory Agreement and the Interim Sub-Advisory
Agreement. The Board also determined to consider such factors again within one
year of the execution of the New Sub-Advisory Agreement. Based upon its review,
the Board concluded that it was in the best interest of the Fund to approve the
New Sub-Advisory Agreement and the Interim Sub-Advisory Agreement.
ADDITIONAL INFORMATION ABOUT THE SUB-ADVISER
Principal Executive Officer and Board of Directors. The Chief
Executive Officer of GPAM is Scott Minerd, 100 Wilshire Boulevard, Suite 500,
Santa Monica, California 90401. The Board of Directors of GPAM consists of
Scott Minerd, Brian Sir, 227 W. Monroe St., 48th Floor, Chicago, Illinois
60606, Roy Corr, 100 Wilshire Boulevard, Suite 500, Santa Monica, California
90401, and Anne Walsh, 100 Wilshire Boulevard, Suite 500, Santa Monica,
California 90401.
Other Funds Advised by GPAM. GPAM does not act as investment adviser
with respect to any other registered investment companies having similar
investment objectives as GOF.
Relationships with the Fund. Nicholas Dalmaso, a former equity owner
of Claymore Group, resigned as a Trustee of the Fund following the closing of
the Transaction. The Board appointed Kevin M. Robinson, an officer and employee
of the Adviser and certain of its affiliates, which are indirect subsidiaries
of Guggenheim, the parent of GPAM, to fill the vacancy resulting from Mr.
Dalmaso's resignation. Mr. Robinson is standing for election as a Trustee at
the Meeting.
No other Trustee of the Fund is an officer, employee, director,
general partner or shareholder of GPAM or has any material direct or indirect
interest in GPAM or any other person controlling, controlled by or under common
control with GPAM.
Certain officers of the Fund, as identified herein under "Proposal
3--Election of Trustees--Executive Officers," are employees or officers of
GPAM.
SHAREHOLDER APPROVAL
The New Sub-Advisory Agreement must be approved by a vote of a
majority of the outstanding voting securities of the Fund. The "vote of the
majority of the outstanding voting securities" is defined in the 1940 Act as
the lesser of the vote of (i) 67% or more of the voting securities of the Fund
entitled to vote thereon present at the Meeting or represented by proxy if
holders of more than 50% of the Fund's outstanding voting securities are
present or represented by proxy; or (ii) more than 50% of the outstanding
voting securities of the Fund entitled to vote thereon. Shareholders will have
equal voting rights (i.e. one vote per Share).
24
Abstentions and "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 Proposal 2.
BOARD RECOMMENDATION
The Board, including the Independent Trustees, recommends that you
vote "FOR" approval of the New Sub-Advisory Agreement.
25
PROPOSAL 3: ELECTION OF TRUSTEES
The Fund's Common Shares are listed on the NYSE, which requires the
Fund to hold an annual meeting of Shareholders to elect Trustees each fiscal
year. Shareholders of the Fund are being asked to elect two Trustees as Class I
Trustees (Mr. Randall C. Barnes and Mr. Kevin M. Robinson are the nominees) to
serve until the Fund's annual meeting of Shareholders for the fiscal year
ending May 31, 2012, or until their respective successors shall have been
elected and qualified.
COMPOSITION OF THE BOARD
The Trustees of the Fund are classified into two classes of Trustees:
Class I Trustees and Class II Trustees. Assuming each of the nominees is
elected at the Meeting, the Board of the Fund will be constituted as follows:
CLASS I TRUSTEES
--Randall C. Barnes and Kevin M. Robinson will be the Class I Trustees
of the Fund. Messrs. Barnes and Robinson are standing for election at
the Meeting. It is currently anticipated that the Class I Trustees
will next stand for election at the Fund's annual meeting of
Shareholders for the Fund's fiscal year ending May 31, 2012.
CLASS II TRUSTEES
--Ronald A. Nyberg and Ronald E. Toupin, Jr. are the Class II Trustees
of the Fund. It is currently anticipated that the Class II Trustees
will next stand for election at the Fund's annual meeting of
Shareholders for the Fund's fiscal year ending May 31, 2011.
Nicholas Dalmaso, who previously served as a Class I Trustee and was
an interested person of the Fund because he was a former employee of the
Adviser and equity owner of Claymore Group, resigned as a Trustee of the Fund
following the closing of the Transaction. In order to fill the vacancy
resulting from Mr. Dalmaso's resignation, the Board appointed Kevin M.
Robinson, General Counsel of the Adviser and Chief Legal Officer of the Fund,
as a Class I Trustee of the Fund to serve the remainder of Mr. Dalmaso's term.
Mr. Robinson has been nominated by the Board to stand for election at the
Annual Meeting.
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 two year period. Each trustee nominee elected at the Meeting as a Class
I Trustee of the Fund will hold office until the Fund's annual meeting of
Shareholders for the Fund's fiscal year ending May 31, 2012 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 the trustee nominees named above. Each
trustee nominee nominated by the Board has indicated that he has consented to
serve as a Trustee if elected at the
26
Meeting. If a designated trustee 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.
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 1940 Act) are indicated below. Independent Trustees, as
used in this Section, are those who are not interested persons of the Fund, the
Adviser or the Sub-Adviser and comply with the definition of "independent."
The Fund is part of a fund complex (referred to herein as the "Fund
Complex") that consists of U.S. registered investment companies advised or
serviced by the Adviser or its affiliates. The Fund Complex is comprised of
fourteen closed-end funds, including the Fund, and thirty-four exchange-traded
funds. The Fund Complex is overseen by multiple boards of trustees.
POSITION
HELD NUMBER OF
WITH THE PORTFOLIOS
FUND, TERM IN FUND OTHER
OF OFFICE AND COMPLEX DIRECTORSHIPS
NAME, ADDRESS(1) LENGTH OF PRINCIPAL OCCUPATION OVERSEEN HELD
AND AGE TIME SERVED(2) DURING THE PAST FIVE YEARS BY TRUSTEE BY TRUSTEE
--------------------- ---------------- ------------------------------------------ ---------- -------------
INDEPENDENT TRUSTEES:
Randall C. Barnes(3) Trustee Private Investor (2001-present). 44 None.
Year of birth: 1951 since 2006 Formerly, Senior Vice 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. (1987-1997).
Ronald A. Nyberg Trustee Partner of Nyberg & Cassioppi, LLC, 47 None.
Year of birth: 1953 since 2006 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 Retired. Formerly Vice President, 44 None.
Toupin, Jr. since Manager and Portfolio Manager of
Year of birth: 1958 2006 Nuveen Asset Management (1998-1999),
Vice President of Nuveen Investment
Advisory Corporation (1992-1999), Vice
President and Manager of Nuveen Unit
Investment Trusts (1991-1999), and
Assistant Vice President and Portfolio
Manager of Nuveen Unit Trusts
(1988-1999), each of John Nuveen &
Company, Inc. (asset manager) (1982-1999).
27
POSITION
HELD NUMBER OF
WITH THE PORTFOLIOS
FUND, TERM IN FUND OTHER
OF OFFICE AND COMPLEX DIRECTORSHIPS
NAME, ADDRESS(1) LENGTH OF PRINCIPAL OCCUPATION OVERSEEN HELD
AND AGE TIME SERVED(2) DURING THE PAST FIVE YEARS BY TRUSTEE BY TRUSTEE
--------------------- ---------------- ------------------------------------------ ---------- -------------
INTERESTED TRUSTEE:
Kevin M. Trustee Senior Managing Director, General 2 None.
Robinson(3)(4)+ since Counsel and Corporate Secretary
Year of birth: 1959 2009; (2007-present) of Claymore
Chief Advisors, LLC and Claymore
Legal Securities, Inc.; Chief Legal
Officer Officer of certain funds in the
since 2008 Fund Complex. Formerly,
Associate General Counsel
(2000- 2007) of NYSE Euronext,
Inc. (formerly, Archipelago
Holdings, Inc.). Formerly, 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.
+ "Interested person" of the Fund as defined in the 1940 Act. Mr.
Robinson is an interested person of the Fund as a result of his
position as an officer of the Adviser 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 two year term concurrent
with the class of Trustees for which he serves.
(3) Nominee for election as a Trustee at the Meeting.
(4) Mr. Robinson was appointed by the Board as a Trustee to fill the
vacancy resulting from the resignation of Nicholas Dalmaso as a
Trustee of the Fund.
EXECUTIVE OFFICERS
The following information relates to the executive officers of the
Fund who are not Trustees or Trustee nominees. The officers are appointed by
the Trustees 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 Investment Adviser, the Sub-Adviser or
affiliates of the Investment Adviser or Sub-Adviser and may receive
compensation in such capacities.
28
OFFICERS:
TERM OF
OFFICE(2) AND
LENGTH
NAME, ADDRESS(1) OF TIME PRINCIPAL OCCUPATION DURING
AND AGE POSITION SERVED THE PAST FIVE YEARS
-------------------- ------------ --------------- -------------------------------------------------
J. Thomas Futrell Chief Officer Senior Managing Director, Chief Investment
Year of birth: 1955 Executive since Officer (2008-present) of Claymore Advisors,
Officer 2008 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.
Steven M. Hill Chief Officer Senior Managing Director (2005-present) and
Year of birth: 1964 Financial since Chief Financial Officer (2005-2006), Managing
Officer, 2006 Director (2003-2005) of Claymore Advisors, LLC
Chief and Claymore Securities, Inc.; Chief Financial
Accounting Officer, Chief Accounting Officer and Treasurer
Officer and of certain funds in the Fund Complex. Formerly,
Treasurer 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).
Mark E. Mathiasen Secretary Officer Vice President, Assistant General Counsel of
Year of birth: 1978 since 2008 Claymore Group Inc. (2007-present). Secretary of
certain funds in the Fund Complex. Previously,
Law Clerk, Idaho State Courts (2003-2006).
Bruce Saxon Chief Officer Vice President - Fund Compliance Officer of
Year of birth: 1957 Compliance since Claymore Securities, Inc. (2006-present). Chief
Officer 2006 Compliance Officer of certain funds in the Fund
Complex. Previously, Chief Compliance
Officer/Assistant Secretary of Harris Investment
Management, Inc. (2003-2006). Director-
Compliance of Harrisdirect LLC (1999-2003).
Roy Corr Vice Officer Senior Managing Director, Chief Operating Officer
Year of Birth: 1964 President since 2008 for Guggenheim Partners Asset Management, LLC
(2002-present).
James Howley Assistant Officer Vice President, Fund Administration (2004-
Year of birth: 1972 Treasurer since 2007 present) of Claymore Advisors, LLC and Claymore
Securities, Inc.; Assistant Treasurer of certain
funds in the Fund Complex. Previously, Manager,
Mutual Fund Administration of Van Kampen
Investments, Inc. (2000-2004).
Mark J. Furjanic Assistant Officer Vice President, Fund Administration-Tax (2005-
Year of birth: 1959 Treasurer since 2008 present) of Claymore Advisors, LLC and Claymore
Securities, Inc.; Assistant Treasurer of certain
funds in the Fund Complex. Formerly, Senior
Manager (1999-2005) for Ernst & Young LLP.
29
OFFICERS:
TERM OF
OFFICE(2) AND
LENGTH
NAME, ADDRESS(1) OF TIME PRINCIPAL OCCUPATION DURING
AND AGE POSITION SERVED THE PAST FIVE YEARS
-------------------- ------------ --------------- -------------------------------------------------
Donald P. Swade Assistant Officer Vice President, Fund Administration (2006-
Year of birth: 1972 Treasurer since 2008 present) of Claymore Advisors, LLC and Claymore
Securities, Inc.; Assistant Treasurer of certain
funds in the Fund Complex. Formerly, Manager-
Mutual Fund Financial Administration (2003-
2006) for Morgan Stanley/Van Kampen
Investments.
Melissa J. Nguyen Assistant Officer Vice President, Assistant General Counsel of
Year of birth: 1978 Secretary since 2008 Claymore Group Inc. (2005-present). Secretary of
certain funds in the Fund Complex. Previously,
Associate, Vedder Price P.C. (2003-2005).
Elizabeth H. Hudson Assistant Officer Assistant General Counsel of Claymore
Year of birth: 1980 Secretary since 2009 Advisors, LLC (2009 - present). Assistant
Secretary of certain funds in the Fund Complex.
Previously, associate at Bell, Boyd & Lloyd
LLP (2007-2008).
(1) The business address of each officer of the Fund is 2455 Corporate
West Drive, Lisle, Illinois 60532.
(2) Officers serve at the pleasure of the Board and until his or her
successor is appointed and qualified or until his or her resignation
or removal.
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 Board or
otherwise. 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 composed
of Randall C. Barnes, Ronald A. Nyberg and Ronald E. Toupin, Jr., each of whom
is an Independent Trustee as defined above and is "independent" as defined by
NYSE listing standards.
The Audit Committee 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 Audit Committee is governed by a written charter, the most recent
version of which was approved by the Board on December 15, 2006 (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 was attached as Appendix A to the Fund's proxy statement
dated September 19, 2008.
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
30
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 year.
Nominating and Governance Committee. The Board has a Nominating and
Governance Committee, which is composed of Randall C. Barnes, Ronald A. Nyberg
and Ronald E. Toupin, Jr., each of whom is an Independent Trustee as defined
above and is "independent" as defined by NYSE listing standards.
The Nominating and Governance Committee is governed by a written
charter, the most recent version of which was approved by the Board on October
22, 2008 (the "Nominating and Governance Committee Charter"). 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
is attached as Appendix C hereto.
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): the 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-two (72), unless such person is an "interested
person" of the 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.
31
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 registrant 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. 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
is attached as Appendix C hereto. 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 Meeting were unanimously nominated
by the Board of Trustees and the Nominating and Governance Committee. Randall
C. Barnes currently serves as a Trustee and Kevin M. Robinson currently serves
as the Fund's Chief Legal Officer.
SHAREHOLDER COMMUNICATIONS
Shareholders and other interested parties may contact the Board or
any Trustee by mail. To communicate with the Board or any Trustee,
correspondence should be addressed to the Board of Trustees or the Trustee 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.
32
TRUSTEE BENEFICIAL OWNERSHIP OF SECURITIES
As of November 12, 2009, each Trustee and Trustee nominee
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 EQUITY
SECURITIES IN ALL REGISTERED INVESTMENT
DOLLAR RANGE OF EQUITY COMPANIES OVERSEEN BY TRUSTEE
NAME OF TRUSTEE SECURITIES IN THE FUND IN THE FUND COMPLEX
--------------------- ---------------------- ---------------------------------------
INDEPENDENT TRUSTEES:
Randall C. Barnes $50,000-$100,000 Over $100,000
Ronald A. Nyberg $1-$10,000 Over $100,000
Ronald E. Toupin, Jr. none none
INTERESTED TRUSTEES:
Kevin M. Robinson none none
As of November 12, 2009, each Trustee and Trustee nominee and the
Trustees and officers of the Fund as a group owned less than 1% of the
outstanding Shares of the Fund.
BOARD MEETINGS
During the Fund's fiscal year ended May 31, 2009, the Board held 5
meetings, the Audit Committee held 2 meetings and the Nominating and Governance
Committee held 3 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 May 31, 2009. It is the Fund's policy to encourage
Trustees to attend annual Shareholders' meetings.
TRUSTEE COMPENSATION
The Fund pays an annual retainer and fee per meeting attended to each
Trustee who is not affiliated with the Investment Adviser, Sub-Adviser or their
respective affiliates and pays an additional annual fee to the chairman of the
Board and of any committee of the Board, if any. The following table provides
information regarding the compensation of the Fund's Trustees for the Fund's
fiscal year ended May 31, 2009. The Fund does not accrue or pay retirement or
pension benefits to the Trustees as of the date of this Proxy Statement.
ESTIMATED COMPENSATION ESTIMATED TOTAL COMPENSATION
NAME OF TRUSTEE(1) FROM THE FUND FROM THE FUND COMPLEX
--------------------- ---------------------- ----------------------------
Randall C. Barnes $22,375 $247,791
Ronald A. Nyberg $22,375 $341,176
Ronald E. Toupin, Jr. $24,625 $291,946
-------------
(1) Trustees not eligible for compensation are not included in the table.
33
SHAREHOLDER APPROVAL
With respect to Proposal 3, 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 Meeting at which a quorum is present is necessary to elect each
Trustee nominee. Votes withheld will have the same effect as votes against
Proposal 3. "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 no effect on the outcome of the vote on
Proposal 3. Shareholders will have equal voting rights (i.e. one vote per
Share).
BOARD RECOMMENDATION
The Board, including the Independent Trustees, recommends that you
vote "FOR" each of the nominees for the Board of Trustees listed in the Proxy
Statement.
34
ADDITIONAL INFORMATION
FURTHER INFORMATION ABOUT VOTING AND THE MEETING
Whether or not you plan to attend the Meeting, we urge you to
complete, sign, date, and return the enclosed proxy card in the postage-paid
envelope provided or record your voting instructions via telephone or the
Internet so your Shares will be represented at the Meeting. Information
regarding how to vote 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 Meeting and vote in person, you will be
able to do so. You may contact our proxy information line at (866) 796-1290 to
obtain directions to the site of the Meeting.
A majority of the Shares of the Fund entitled to vote on a Proposal
must be present in person or by proxy to have a quorum for that Fund to conduct
business with respect to such Proposal at the meeting. Abstentions and broker
non-votes will be counted as Shares present at the Meeting for quorum
purposes.
All Shares represented by properly executed proxies received prior to
the Meeting will be voted at the Meeting in accordance with the instructions
marked thereon or otherwise as provided therein. IF NO SPECIFICATION IS MADE ON
A PROPERLY EXECUTED PROXY CARD, IT WILL BE VOTED FOR THE PROPOSALS. If any
other business is brought before the Meeting, your Shares will be voted at the
proxies' discretion.
Broker-dealer firms holding Shares in "street name" for the benefit
of their customers and clients will request the instructions of such customers
and clients on how to vote their Shares on the Proposals. Under current
interpretations of the New York Stock Exchange (the "NYSE"), broker-dealers
that are members of the NYSE and that have not received instructions from a
customer may not vote such customer's Shares on Proposal 1 and Proposal 2.
Broker-dealers who are not members of the NYSE may be subject to other rules,
which may or may not permit them to vote your shares without instruction.
Therefore, you are encouraged to contact your broker and record your voting
instructions.
Therefore, if you beneficially own Shares that are held in "street
name" through a broker-dealer and if you have not given or do not give voting
instructions for your Shares, your Shares may not be voted at all or may be
voted in a manner that you may not intend. You are strongly encouraged to be
sure your broker-dealer or service organization has instructions as to how your
Shares are to be voted.
Shareholders who execute proxies or record their voting instructions
via telephone or the Internet may revoke them at any time before they are voted
by filing with the Secretary of the appropriate Fund a written notice of
revocation, by delivering (including via telephone or the Internet) a duly
executed proxy bearing a
35
later date or by attending the Meeting and voting in person. Merely attending
the Meeting, however, will not revoke any previously submitted proxy.
If you hold Shares in more than one account, you will receive a proxy
card for each account. To ensure that all of your Shares are voted, please
sign, date and return the proxy card for each account. To ensure Shareholders
have the Fund's latest proxy information and material to vote, the Board may
conduct additional mailings prior to the date of the Meeting, each of which
will include a proxy card regardless of whether you have previously voted. Only
your latest dated proxy card will be counted.
The Board has fixed the close of business on November 12, 2009, as
the Record Date for the determination of Shareholders of the Fund entitled to
notice of, and to vote at, the 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 of the Fund held and a
fractional vote with respect to fractional Shares, with no cumulative voting
rights.
ADVISER AND SUB-ADVISER
Adviser. Claymore Advisors, LLC, a wholly-owned subsidiary of
Claymore Group and indirect subsidiary of Guggenheim, acts as the Fund's
investment adviser. As of September 30, 2009, Claymore entities have provided
supervision, management or servicing on approximately $13.3 billion in
assets through closed-end funds, unit investment trusts and exchange-traded
funds. The Adviser and Claymore Group are located at 2455 Corporate West Drive,
Lisle, Illinois 60532. Guggenheim is located at 227 West Monroe Street,
Chicago, Illinois 60606.
Sub-Adviser. Guggenheim Partners Asset Management, LLC, an indirect
wholly-owned subsidiary of Guggenheim, serves as the Fund's investment
sub-adviser. Guggenheim is a diversified financial services firm whose primary
business lines include asset management, investment advisory, fixed income
brokerage, institutional finance, and merchant banking. Through its affiliates,
including GPAM, Guggenheim has more than $100 billion of assets under
supervision. GPAM is located at 100 Wilshire Boulevard, Suite 500, Santa Monica,
California 90401 and Guggenheim is located at 227 West Monroe Street, Chicago,
Illinois 60606.
ADMINISTRATOR
Claymore Advisors, LLC, located at 2455 Corporate West Drive, Lisle,
Illinois 60532, serves as the Fund's administrator. During the fiscal year
ended May 31, 2009, the Fund paid to Claymore Advisors, LLC administration fees
equal to approximately $45,980. It is expected that Claymore Advisors, LLC
will continue to provide administrative services to the Fund following
consummation of the Transaction.
36
AFFILIATED BROKERS
During the fiscal year ended May 31, 2009, the Fund paid no
commissions to affiliated brokers.
OUTSTANDING SHARES
At the close of business on the Record Date, the Fund had 9,156,530
Shares outstanding.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP ("E&Y") has been selected as the independent
registered public accounting firm for the Fund 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 current fiscal year. 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 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 May 31, 2009 were approximately $55,000 and for
the Fund's initial fiscal period ended May 31, 2008 were approximately
$53,000.
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 May 31, 2009 were approximately $0 and for the Fund's
initial fiscal period ended May 31, 2008 were approximately $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 May 31, 2009 were approximately
$6,000 and for the Fund's initial fiscal period ended May 31, 2008 were
approximately $6,000. E&Y did not perform any other tax compliance or tax
planning services or render any
37
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 May 31,
2009 and for the Fund's initial fiscal period ended May 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 May 31, 2009 were approximately $6,000 and for the Fund's
initial fiscal period ended May 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 was attached as Appendix A to the Fund's proxy
statement dated September 19, 2008, 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.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 delegated pre- approvals shall be presented
to the Audit Committee no later than the next
Audit Committee meeting.
IV.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 non-audit 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-prohibited
services to the
38
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 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.
None of the services described above for the Fund's fiscal year ended
May 31, 2009 and initial fiscal period ended May 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 the Record Date, to the knowledge of the Fund, no person
beneficially owned more than 5% of the voting securities of any class of
securities of the Fund.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), 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 the Fund's fiscal year ended May 31,
2009, all filings applicable to such persons were completed and filed in a
timely manner, except as follows: a Form 4 relating to the acquisition and
disposition of seed capital Shares held by Claymore Securities, Inc. was
inadvertently filed late.
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).
39
The Fund restricts access to non-public personal information about
its 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 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
40
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) 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.
The Fund's annual meeting of Shareholders for the fiscal year ending
May 31, 2011 is currently expected to be held on or about December 1, 2010.
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 July 2, 2010. 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
August 3, 2010 nor later than the close of business on September 2, 2010 (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, except that
the costs associated with Proposal 1 and Proposal 2 will be borne by the
Adviser. Certain officers of the Fund and certain officers and employees of the
Adviser or its affiliates (none of whom will receive additional compensation
therefore), may solicit proxies by telephone, mail, e-mail and personal
interviews. Brokerage
41
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. The Adiser has retained The Altman Group, Inc. ("The Altman Group"),
on behalf of the Fund, as proxy solicitor. The Altman Group will receive a
project management fee as well as fees charged on a per call basis and certain
other expenses. The Adviser estimates that the total fees payable to The Altman
Group with respect to solicitation on behalf of the Fund and all other funds in
the fund complex, will be approximately $700,000.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE MEETING
TO BE HELD ON JANUARY 12, 2010
This Proxy Statement is available on the Internet at
www.proxyonline.com/docs/ClaymoreGOF.pdf.
OTHER MATTERS
The management of the Fund knows of no other matters which are to be
brought before the Meeting. However, if any other matters not now known
properly come before the 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.
Failure of a quorum to be present at the Meeting will necessitate
adjournment of the Meeting. In the event that a quorum is present at the
Meeting but sufficient votes to approve the Proposal are not received, proxies
may vote Shares (including abstentions and broker non-votes) in favor of one or
more adjournments of the 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 votes then cast, the nature of the proposed solicitation activities
and the nature of the reasons for such further solicitation.
One Proxy Statement may be delivered to two or more Shareholders who
share an address, unless the Fund has received instructions to the contrary. To
request a separate copy of the Proxy Statement, which will be delivered
promptly upon written or oral request, or for instructions as to how to request
a single copy if multiple copies are received, Shareholders should contact the
Fund at the address or telephone number set forth above.
42
WE URGE YOU TO VOTE PROMPTLY BY COMPLETING, SIGNING, DATING AND
MAILING THE ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE PROVIDED OR RECORDING
YOUR VOTING INSTRUCTIONS VIA TELEPHONE OR THE INTERNET SO YOU WILL BE
REPRESENTED AT THE MEETING.
Very truly yours,
/s/ J. Thomas Futrell
J. Thomas Futrell
Chief Executive Officer
on behalf of the Board of Trustees
December 4, 2009
43
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APPENDIX A
FORMS OF NEW ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement"), dated as of
______, 2010, between Claymore/Guggenheim Strategic Opportunities Fund, a
Delaware statutory trust (the "Trust"), and Claymore Advisors, LLC, a Delaware
limited liability company (the "Adviser").
WHEREAS, the Adviser has agreed to furnish investment advisory
services to the Trust, a closed-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, this Agreement has been approved in accordance with the
provisions of the 1940 Act, and the Adviser is willing to furnish such services
upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein contained and other good and valuable consideration, the receipt of
which is hereby acknowledged, it is agreed by and between the parties hereto as
follows:
1. IN GENERAL. The Adviser agrees, all as more fully set forth
herein, to act as investment adviser to the Trust with respect to the
investment of the Trust's assets and to supervise and arrange for the
day-to-day operations of the Trust and the purchase of securities for and the
sale of securities held in the investment portfolio of the Trust.
2. DUTIES AND OBLIGATIONS OF THE ADVISER WITH RESPECT TO INVESTMENT OF
ASSETS OF THE TRUST. Subject to the succeeding provisions of this section and
subject to the direction and control of the Trust's Board of Trustees, the
Adviser shall (i) act as investment adviser for and supervise and manage the
investment and reinvestment of the Trust's assets and, in connection therewith,
have complete discretion in purchasing and selling securities and other assets
for the Trust and in voting, exercising consents and exercising all other rights
appertaining to such securities and other assets on behalf of the Trust; (ii)
supervise the investment program of the Trust and the composition of its
investment portfolio; and (iii) arrange, subject to the provisions of paragraph
4 hereof, for the purchase and sale of securities and other assets held in the
investment portfolio of the Trust. In performing its duties under this Section
2, the Adviser may delegate some or all of its duties and obligations under this
Agreement to one or more sub-investment advisers; provided, however, that any
such delegation shall be pursuant to an agreement with terms agreed upon by the
Trust and approved in a manner consistent with the 1940 Act and provided,
further, that no such delegation shall relieve the Adviser from its duties and
obligations of management and supervision of the management of the Trust's
assets pursuant to this Agreement and to applicable law.
A-1
3. DUTIES AND OBLIGATIONS OF ADVISER WITH RESPECT TO THE
ADMINISTRATION OF THE TRUST. The Adviser also agrees to furnish office
facilities and equipment and clerical, bookkeeping and administrative services
(other than such services, if any, provided by the Trust's Custodian, Transfer
Agent, Administrator and Dividend Disbursing Agent and other service providers)
for the Trust. To the extent requested by the Trust, the Adviser agrees to
provide the following administrative services:
(a) Oversee the determination and publication of the Trust's net
asset value in accordance with the Trust's policy as adopted
from time to time by the Board of Trustees;
(b) Oversee the maintenance by the Trust's Custodian and
Transfer Agent and Dividend Disbursing Agent of certain
books and records of the Trust as required under Rule
31a-1(b)(4) of the 1940 Act and maintain (or oversee
maintenance by the Trust's Administrator or such other
persons as approved by the Board of Trustees) such other
books and records required by law or for the proper
operation of the Trust;
(c) Oversee the preparation and filing of the Trust's federal,
state and local income tax returns and any other required
tax returns;
(d) Review the appropriateness of and arrange for payment of the
Trust's expenses;
(e) Prepare (or oversee the preparation) for review and approval
by officers of the Trust financial information for the
Trust's semi-annual and annual reports, proxy statements and
other communications with shareholders required or otherwise
to be sent to Trust shareholders, and arrange for the
printing and dissemination of such reports and
communications to shareholders;
(f) Prepare (or oversee the preparation) for review by an
officer of the Trust the Trust's periodic financial reports
required to be filed with the Securities and Exchange
Commission ("SEC") on Form N-SAR, N-CSR and such other
reports, forms and filings, as may be mutually agreed upon;
(g) Prepare reports relating to the business and affairs of the
Trust as may be mutually agreed upon and not otherwise
appropriately prepared by the Trust's Custodian, counsel or
auditors;
(h) Prepare (or oversee the preparation of) such information and
reports as may be required by any stock exchange or
exchanges on which the Trust's shares are listed;
(i) Make such reports and recommendations to the Board of
Trustees concerning the performance of the independent
accountants as the Board of Trustees may reasonably request
or deems appropriate;
A-2
(j) Make such reports and recommendations to the Board of
Trustees concerning the performance and fees of the Trust's
Custodian, Transfer Agent, Administrator and Dividend
Disbursing Agent as the Board of Trustees may reasonably
request or deems appropriate;
(k) Oversee and review calculations of fees paid to the Trust's
service providers;
(l) Oversee the Trust's portfolio and perform necessary
calculations as required under Section 18 of the 1940 Act;
(m) Consult with the Trust's officers, independent accountants,
legal counsel, Custodian, Administrator or other accounting
agent, Transfer Agent and Dividend Disbursing Agent in
establishing the accounting policies of the Trust and
monitor financial and shareholder accounting services;
(n) Review implementation of any share purchase programs
authorized by the Board of Trustees;
(o) Determine the amounts available for distribution as
dividends and distributions to be paid by the Trust to its
shareholders; prepare and arrange for the printing of
dividend notices to shareholders; and provide the Trust's
Dividend Disbursing Agent and Custodian with such
information as is required for such parties to effect the
payment of dividends and distributions and to implement the
Trust's dividend reinvestment plan;
(p) Prepare such information and reports as may be required by
any banks from which the Trust borrows funds;
(q) Provide such assistance to the Custodian and the Trust's
counsel and auditors as generally may be required to
properly carry on the business and operations of the Trust;
(r) Assist in the preparation and filing of Forms 3, 4, and 5
pursuant to Section 16 of the Securities Exchange Act of
1934, as amended, and Section 30(f) of the 1940 Act for the
officers and trustees of the Trust, such filings to be based
on information provided by those persons;
(s) Respond to or refer to the Trust's officers or Transfer
Agent, shareholder (including any potential shareholder)
inquiries relating to the Trust; and
(t) Supervise any other aspects of the Trust's administration as
may be agreed to by the Trust and the Adviser.
All services are to be furnished through the medium of any directors, officers
or employees of the Adviser or its affiliates as the Adviser deems appropriate
in order to fulfill its obligations hereunder. The Trust will reimburse the
Adviser or its
A-3
affiliates for all out-of- pocket expenses incurred by them in connection with
the performance of the administrative services described in this paragraph 3.
4. COVENANTS. In the performance of its duties under this Agreement,
the Adviser:
(a) shall at all times conform to, and act in accordance with,
any requirements imposed by: (i) the provisions of the 1940
Act and the Investment Advisers Act of 1940, as amended, and
all applicable Rules and Regulations of the SEC; (ii) any
other applicable provision of law; (iii) the provisions of
the Agreement and Declaration of Trust and By-Laws of the
Trust, as such documents are amended from time to time; (iv)
the investment objective and policies of the Trust as set
forth in its Registration Statement on Form N-2; and (v) any
policies and determinations of the Board of Trustees of the
Trust;
(b) will place orders either directly with the issuer or with
any broker or dealer. Subject to the other provisions of
this paragraph, in placing orders with brokers and dealers,
the Adviser will attempt to obtain the best price and the
most favorable execution of its orders. In placing orders,
the Adviser will consider the experience and skill of the
firm's securities traders as well as the firm's financial
responsibility and administrative efficiency. Consistent
with this obligation, the Adviser may select brokers on the
basis of the research, statistical and pricing services they
provide to the Trust and other clients of the Adviser.
Information and research received from such brokers will be
in addition to, and not in lieu of, the services required to
be performed by the Adviser hereunder. A commission paid to
such brokers may be higher than that which another qualified
broker would have charged for effecting the same
transaction, provided that the Adviser determines in good
faith that such commission is reasonable in terms either of
the transaction or the overall responsibility of the Adviser
to the Trust and its other clients and that the total
commissions paid by the Trust will be reasonable in relation
to the benefits to the Trust over the long-term. In no
instance, however, will the Trust's securities be purchased
from or sold to the Adviser, or any affiliated person
thereof, except to the extent permitted by the SEC or by
applicable law; and
(c) will treat confidentially and as proprietary information of
the Trust all records and other information relative to the
Trust, and the Trust's prior, current or potential
shareholders, and will not use such records and information
for any purpose other than performance of its
responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Trust, which
approval shall not be unreasonably withheld and may not be
withheld where the Adviser may be exposed to civil or
criminal contempt proceedings for failure
A-4
to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the
Trust.
5. SERVICES NOT EXCLUSIVE. Nothing in this Agreement shall prevent
the Adviser or any officer, employee or other affiliate thereof from acting as
investment adviser for any other person, firm or corporation, or from engaging
in any other lawful activity, and shall not in any way limit or restrict the
Adviser or any of its officers, employees or agents from buying, selling or
trading any securities for its or their own accounts or for the accounts of
others for whom it or they may be acting; provided, however, that the Adviser
will undertake no activities which, in its judgment, will adversely affect the
performance of its obligations under this Agreement.
6. BOOKS AND RECORDS. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any such records upon the Trust's request. The
Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under
the 1940 Act.
7. AGENCY CROSS TRANSACTIONS. From time to time, the Adviser or
brokers or dealers affiliated with it may find themselves in a position to buy
for certain of their brokerage clients (each an "Account") securities which the
Adviser's investment advisory clients wish to sell, and to sell for certain of
their brokerage clients securities which advisory clients wish to buy. Where
one of the parties is an advisory client, the Adviser or the affiliated broker
or dealer cannot participate in this type of transaction (known as a cross
transaction) on behalf of an advisory client and retain commissions from one or
both parties to the transaction without the advisory client's consent. This is
because in a situation where the Adviser is making the investment decision (as
opposed to a brokerage client who makes his own investment decisions), and the
Adviser or an affiliate is receiving commissions from both sides of the
transaction, there is a potential conflicting division of loyalties and
responsibilities on the Adviser's part regarding the advisory client. The SEC
has adopted a rule under the Investment Advisers Act of 1940, as amended, which
permits the Adviser or its affiliates to participate on behalf of an Account in
agency cross transactions if the advisory client has given written consent in
advance. By execution of this Agreement, the Trust authorizes the Adviser or
its affiliates to participate in agency cross transactions involving an
Account. The Trust may revoke its consent at any time by written notice to the
Adviser.
8. EXPENSES. During the term of this Agreement, the Adviser will bear
all costs and expenses of its employees and any overhead incurred in connection
with its duties hereunder and shall bear the costs of any salaries or trustees
fees of any officers or trustees of the Trust who are affiliated persons (as
defined in the 1940 Act) of the Adviser.
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9. COMPENSATION OF THE ADVISER.
(a) The Trust agrees to pay to the Adviser and the Adviser
agrees to accept as full compensation for all services
rendered by the Adviser as such, a monthly fee in arrears at
an annual rate equal to 1.00% of the Trust's average daily
Managed Assets. "Managed Assets" means the total assets of
the Trust (other than assets attributable to any investments
by the Trust in Affiliated Investment Funds), including the
assets attributable to the proceeds from any borrowings or
other forms of financial leverage, minus liabilities, other
than liabilities related to any financial leverage.
"Affiliated Investment Funds" means investment companies,
including registered investment companies, private
investment funds and/or other pooled investment vehicles,
advised or managed by Guggenheim Partners Asset Management,
LLC, the Trust's investment sub-adviser, or any of its
affiliates. For any period less than a month during which
this Agreement is in effect, the fee shall be prorated
according to the proportion which such period bears to a
full month of 28, 29, 30 or 31 days, as the case may be.
(b) For purposes of this Agreement, the total assets of the
Trust shall be calculated pursuant to the procedures adopted
by resolutions of the Trustees of the Trust for calculating
the value of the Trust's assets or delegating such
calculations to third parties.
10. LIMITATION ON LIABILITY.
(a) The Adviser will not be liable for any error of judgment or
mistake of law or for any loss suffered by Adviser or by the
Trust in connection with the performance of this Agreement,
except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a
loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or
from reckless disregard by it of its duties under this
Agreement.
(b) The Trust may, but shall not be required to, make advance
payments to the Adviser in connection with the expenses of
the Adviser in defending any action with respect to which
damages or equitable relief might be sought against the
Adviser under this Section (which payments shall be
reimbursed to the Trust by the Adviser as provided below) if
the Trust receives (i) a written affirmation of the
Adviser's good faith belief that the standard of conduct
necessary for the limitation of liability in this Section
has been met and (ii) a written undertaking to reimburse the
Trust whether or not the Adviser shall be deemed to have
liability under this Section, such reimbursement to be due
upon (1) a final decision on the merits by a court or other
body before whom the proceeding was brought as to whether or
not the Adviser is liable under this Section or (2) in the
absence of such a
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decision, upon the request of the Adviser for reimbursement
by a majority vote of a quorum consisting of trustees of the
Trust who are neither "interested persons" of the Trust (as
defined in Section 2(a)(19) of the 1940 Act) nor parties to
the proceeding ("Disinterested Non-Party Trustees"). In
addition, at least one of the following conditions must be
met: (A) the Adviser shall provide a security for such
Adviser undertaking, (B) the Trust shall be insured against
losses arising by reason of any lawful advance, or (C) a
majority of a quorum of the Disinterested Non-Party Trustees
of the Trust or an independent legal counsel in a written
opinion, shall determine, based on a review of readily
available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the Adviser ultimately
will be found not to be liable under this Section.
11. DURATION AND TERMINATION. This Agreement shall become effective
as of the date hereof and, unless sooner terminated with respect to the Trust
as provided herein, shall continue in effect for a period of one year.
Thereafter, if not terminated, this Agreement shall continue in effect with
respect to the Trust for successive periods of 12 months, provided such
continuance is specifically approved at least annually by both (a) the vote of
a majority of the Trust's Board of Trustees or the vote of a majority of the
outstanding voting securities of the Trust at the time outstanding and entitled
to vote, and (b) by the vote of a majority of the Trustees who are not parties
to this Agreement or interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval.
Notwithstanding the foregoing, this Agreement may be terminated by the Trust at
any time, without the payment of any penalty, upon giving the Adviser 60 days'
notice (which notice may be waived by the Adviser), provided that such
termination by the Trust shall be directed or approved by the vote of a
majority of the Trustees of the Trust in office at the time or by the vote of
the holders of a majority of the voting securities of the Trust at the time
outstanding and entitled to vote, or by the Adviser on 60 days' written notice
(which notice may be waived by the Trust). This Agreement will also immediately
terminate in the event of its assignment. (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meanings of such terms in the 1940 Act.)
12. NOTICES. Any notice under this Agreement shall be in writing to
the other party at such address as the other party may designate from time to
time for the receipt of such notice and shall be deemed to be received on the
earlier of the date actually received or on the fourth day after the postmark
if such notice is mailed first class postage prepaid.
13. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. Any amendment of this Agreement shall be
subject to the 1940 Act.
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14. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware for contracts to be per
formed entirely therein without reference to choice of law principles thereof
and in accordance with the applicable provisions of the 1940 Act.
15. USE OF THE NAME "CLAYMORE." The Adviser has consented to the use
by the Trust of the name or identifying word "Claymore" in the name of the
Trust. Such consent is conditioned upon the employment of the Adviser as the
investment adviser to the Trust. The name or identifying word "Claymore" may be
used from time to time in other connections and for other purposes by the
Adviser and any of its affiliates. The Adviser may require the Trust to cease
using "Claymore" in the name of the Trust if the Trust ceases to employ, for
any reason, the Adviser, any successor thereto or any affiliate thereof as
investment adviser of the Trust.
16. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding on, and shall inure to the
benefit of the parties hereto and their respective successors.
17. COUNTERPARTS. This Agreement may be executed in counterparts by
the parties hereto, each of which shall constitute an original counterpart, and
all of which, together, shall constitute one Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers, all as of the day
and the year first above written.
CLAYMORE/GUGGENHEIM STRATEGIC
OPPORTUNITIES FUND
By: _________________________________
Name:
Title:
CLAYMORE ADVISORS, LLC
By: _________________________________
Name:
Title:
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APPENDIX B
FORMS OF NEW SUB-ADVISORY AGREEMENT
INVESTMENT SUB-ADVISORY AGREEMENT
THIS INVESTMENT SUB-ADVISORY AGREEMENT (the "Agreement"), dated as of
______, 2010, among Claymore/Guggenheim Strategic Opportunities Fund, a
Delaware statutory trust (the "Trust"), Claymore Advisors, LLC, a Delaware
limited liability company (the "Investment Adviser"), and Guggenheim Partners
Asset Management, LLC, a Delaware corporation (the "Investment Sub-Adviser").
WHEREAS, the Investment Adviser has agreed to furnish investment
management and advisory services to the Trust, a closed-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act") with respect to the Trust Assets (defined below);
WHEREAS, the investment advisory agreement between the Investment
Adviser and the Trust (such agreement or the most recent successor agreement
between such parties relating to advisory services to the Trust is referred to
herein as the "Investment Advisory Agreement") contemplates that the Investment
Adviser may sub-contract investment advisory services with respect to the Trust
to a sub-adviser(s) pursuant to a sub-advisory agreement(s) agreeable to the
Trust and approved in accordance with the provisions of the 1940 Act;
WHEREAS, the Investment Adviser wishes to retain the Investment
Sub-Adviser to provide certain sub-advisory services;
WHEREAS, the Investment Sub-Adviser is a registered investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"); and
WHEREAS, this Agreement has been approved in accordance with the
provisions of the 1940 Act, and the Investment Sub-Adviser is willing to
furnish such services upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein contained and other good and valuable consideration, the receipt of
which is hereby acknowledged, it is agreed by and between the parties hereto as
follows:
1. APPOINTMENT. The Investment Adviser hereby appoints the Investment
Sub-Adviser to act as a sub-adviser with respect to the Trust as set forth in
this Agreement and the Investment Sub-Adviser accepts such appointment and
agrees to render the services herein set forth for the compensation herein
provided.
2. SERVICES OF THE INVESTMENT SUB-ADVISER. Subject to the succeeding
provisions of this section, the oversight and supervision of the Investment
Adviser and the direction and control of the Trust's Board of Trustees, the
Investment Sub-Adviser will perform certain of the day-to-day operations of
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the Trust which may include one or more of the following services at the
request of the Investment Adviser: (i) managing the investment and reinvestment
of the Trust Assets in accordance with the investment policies of the Trust;
(ii) arranging, subject to the provisions of paragraph 3 hereof, for the
purchase and sale of securities and other assets for the Trust; (iii) providing
investment research and credit analysis concerning the Trust Assets; (iv)
placing orders for purchases and sales of Trust Assets; (v) maintaining the
books and records as are required to support Trust investment operations; (vi)
monitoring on a daily basis the investment activities and portfolio holdings
relating to the Trust; and (vii) voting proxies relating to the Trust's
portfolio securities in accordance with the proxy voting policies and
procedures of the Investment Sub-Adviser. At the request of the Investment
Adviser, the Investment Sub-Adviser will also, subject to the oversight and
supervision of the Investment Adviser and the direction and control of the
Trust's Board of Trustees, consult with the Investment Adviser as to the
overall management of the Trust Assets and the investment policies and
practices of the Trust, including (but not limited to) the use by the Trust of
financial leverage and elements (e.g., form, amount and costs) relating to such
financial leverage and the utilization by the Trust of any interest rate or
other hedging or risk management transactions in connection therewith, and will
perform any of the services described in the Investment Advisory Agreement. In
addition, the Investment Sub-Adviser will keep the Trust and the Investment
Adviser informed of developments materially affecting the Trust and shall, upon
request, furnish to the Trust all information relevant to such developments.
The Investment Sub-Adviser will periodically communicate to the Investment
Adviser, at such times as the Investment Adviser may direct, information
concerning the purchase and sale of securities for the Trust, including: (i)
the name of the issuer, (ii) the amount of the purchase or sale, (iii) the name
of the broker or dealer, if any, through which the purchase or sale is
effected, (iv) the CUSIP number of the instrument, if any, and (v) such other
information as the Investment Adviser may reasonably require for purposes of
fulfilling its obligations to the Trust under the Investment Advisory
Agreement. The Investment Sub-Adviser will provide the services rendered by it
under this Agreement in accordance with the Trust's investment objective,
policies and restrictions (as currently in effect and as they may be amended or
supplemented from time to time) as stated in the Trust's Prospectus filed with
the Securities and Exchange Commission (the "SEC") as part of the Trust's
Registration Statement on Form N-2 and the resolutions of the Trust's Board of
Trustees. The Trust shall maintain its books and records, and the Investment
Sub-Adviser shall have no responsibility with respect thereto, other than its
obligations under the 1940 Act, the Advisers Act or other applicable law. In
addition, the Investment Sub-Adviser may, to the extent permitted by the 1940
Act, the Advisers Act and other applicable law, aggregate purchase and sale
orders being made simultaneously for other accounts managed by the Investment
Sub-Adviser or its affiliates and allocate the securities so purchased or sold,
as well as expenses incurred in the transaction, among the Trust and other
accounts in an equitable manner.
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3. COVENANTS. In the performance of its duties under this Agreement,
the Investment Sub-Adviser:
(a) shall at all times comply and act in accordance with: (i) the
provisions of the 1940 Act and the Advisers Act and all applicable Rules and
Regulations of the SEC thereunder; (ii) any other applicable provision of law;
(iii) the provisions of the Agreement and Declaration of Trust and By-Laws of
the Trust, as such documents are amended from time to time; (iv) the investment
objectives, policies and restrictions of the Trust as set forth in the Trust's
Prospectus filed with the SEC as part of the Trust's Registration Statement on
Form N-2; and (v) any policies, determinations and/or resolutions of the Board
of Trustees of the Trust or the Investment Adviser;
(b) will place orders either directly with the issuer or with any
broker or dealer. Subject to the other provisions of this paragraph, in placing
orders with brokers and dealers, the Investment Sub-Adviser will obtain the
best price and the most favorable execution of its orders. In placing orders,
the Investment Sub-Adviser will consider the experience and skill of the firm's
securities traders as well as the firm's financial responsibility and
administrative efficiency. Consistent with this obligation, the Investment
Sub-Adviser may select brokers on the basis of the research, statistical and
pricing services they provide to the Trust and other clients of the Investment
Adviser or the Investment Sub-Adviser, as the case may be. Information and
research received from such brokers will be in addition to, and not in lieu of,
the services required to be performed by the Investment Sub-Adviser hereunder.
A commission paid to such brokers may be higher than that which another
qualified broker would have charged for effecting the same transaction,
provided that the Investment Sub-Adviser determines in good faith that such
commission is reasonable in terms either of the transaction or the overall
responsibility of the Investment Adviser and the Investment Sub-Adviser to the
Trust and their other clients and that the total commissions paid by the Trust
will be reasonable in relation to the benefits to the Trust over the long-term.
In no instance, however, will the Trust's securities be purchased from or sold
to the Investment Adviser, the Investment Sub-Adviser or any affiliated person
thereof, except to the extent permitted by the SEC or by applicable law;
(c) maintain books and records with respect to the Trust's securities
transactions and render to the Investment Adviser and the Trust's Board of
Trustees such periodic and special reports as they may reasonably request; and
(d) treat confidentially and as proprietary information of the Trust
all non-public records and other information relative to the Trust, and the
Trust's prior, current or potential shareholders, and will not use such records
and information for any purpose other than performance of its responsibilities
and duties hereunder.
4. SERVICES NOT EXCLUSIVE. Nothing in this Agreement shall prevent
the Investment Sub-Adviser or any officer, employee or other affiliate thereof
from acting as investment adviser for any other person, firm or corporation,
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or from engaging in any other lawful activity, and shall not in any way limit
or restrict the Investment Sub-Adviser or any of its officers, employees or
agents from buying, selling or trading any securities for their own accounts or
for the accounts of others for whom it or they may be acting; provided,
however, that any of the foregoing activities are consistent with applicable
law and the Investment Sub-Adviser's fiduciary obligations to the Trust.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Investment Sub-Adviser hereby agrees that all
records which it maintains for the Trust are the property of the Trust and
further agrees to surrender promptly to the Trust any such records upon the
Trust's request. The Investment Sub-Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
6. AGENCY CROSS TRANSACTIONS. From time to time, the Investment
Sub-Adviser or brokers or dealers affiliated with the Investment Sub-Adviser
may find themselves in a position to buy for certain of their brokerage clients
(each an "Account") securities which the Investment Sub-Adviser's investment
advisory clients wish to sell, and to sell for certain of their brokerage
clients securities which advisory clients wish to buy. Where one of the parties
is an advisory client, the Investment Sub-Adviser or the affiliated broker or
dealer cannot participate in this type of transaction (known as a cross
transaction) on behalf of an advisory client and retain commissions from both
parties to the transaction without the advisory client's consent. This is
because in a situation where a Investment Sub-Adviser is making the investment
decision (as opposed to a brokerage client who makes his own investment
decisions), and the Investment Sub-Adviser or an affiliate is receiving
commissions from one or both sides of the transaction, there is a potential
conflicting division of loyalties and responsibilities on the Investment
Sub-Adviser's part regarding the advisory client. The SEC has adopted a rule
under the Advisers Act which permits an Investment Sub-Adviser or its
affiliates to participate on behalf of an Account in agency cross transactions
if the advisory client has given written consent in advance. By execution of
this Agreement, the Trust authorizes the Investment Sub-Adviser or its
affiliates to participate in agency cross transactions involving an Account,
consistent with any policies and procedures that may be adopted by the Board of
Trustees of the Trust, and this Agreement shall constitute executed, written
consent of the Trust for the Investment Sub-Adviser engaging in agency cross
transactions. The Trust may revoke its consent at any time by written notice to
the Investment Sub-Adviser.
7. EXPENSES. During the term of this Agreement, the Investment
Sub-Adviser will bear all costs and expenses of its employees and any overhead
incurred by the Investment Sub-Adviser in connection with their duties
hereunder and shall bear the costs of any salaries or trustees, fees of any
officers or trustees of the Trust who are affiliated persons (as defined in the
1940 Act) of the Investment Sub-Adviser. The Investment Sub-Adviser shall not
be responsible for any expenses of the Investment Adviser or the Trust not
specifically set forth in this
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Section 8 or otherwise in any written agreement between the Investment
Sub-Adviser and the Trust or the Investment Adviser, as the case may be.
8. COMPENSATION.
(a) The Investment Adviser agrees to pay to the Investment Sub-Adviser
and the Investment Sub-Adviser agrees to accept as full compensation for all
services rendered by the Investment Sub-Adviser as such, a monthly fee payable
in arrears at an annual rate equal to 0.50% of the Trust's average daily Managed
Assets, less 0.50% of the Trust's average daily assets attributable to any
investments by the Trust in Affiliated Investment Funds. "Managed Assets" means
the total assets of the Trust (other than assets attributable to any investments
by the Trust in Affiliated Investment Funds), including the assets attributable
to the proceeds from any borrowings or other forms of financial leverage, minus
liabilities, other than liabilities related to any financial leverage.
"Affiliated Investment Funds" means investment companies, including registered
investment companies, private investment funds and/or other pooled investment
vehicles, advised or managed by the Investment Sub-Adviser or any of its
affiliates. The liquidation preference of any preferred shares of the Trust, if
any, constituting financial leverage shall not be considered a liability of the
Trust. For any period less than a month during which this Agreement is in
effect, the fee shall be prorated according to the proportion which such period
bears to a full month of 28, 29, 30 or 31 days, as the case may be.
(b) For purposes of this Agreement, the total assets of the Trust
shall be calculated pursuant to the procedures adopted by resolutions of the
Trustees of the Trust for calculating the value of the Trust's assets or
delegating such calculations to third parties.
9. CERTAIN INFORMATION. The Investment Sub-Adviser shall promptly
notify the Investment Adviser in writing of the occurrence of any of the
following events: (a) the Investment Sub-Adviser failing to be registered as an
investment adviser under the Advisers Act, (b) the Investment Sub-Adviser
having been served or otherwise have notice of any action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by any court, public
board or body, involving the affairs of the Trust, (c) the occurrence of any
change in control of the Investment Sub-Adviser or any parent of the Investment
Sub-Adviser within the meaning of the 1940 Act, or (d) the occurrence of any
material adverse change in the business or financial position of the Investment
Sub-Adviser.
10. LIMITATION ON LIABILITY.
(a) The Investment Sub-Adviser will not be liable for any error of
judgment or mistake of law or for any loss suffered by the Investment Adviser or
by the Trust (or their respective agents) in connection with the performance of
this Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting from
willful
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misfeasance, bad faith or gross negligence on its part in the performance of
its duties or from reckless disregard by it of its duties under this
Agreement.
(b) The Trust may, but shall not be required to, make advance
payments to the Investment Sub-Adviser in connection with the expenses of the
Investment Sub-Adviser in defending any action with respect to which damages or
equitable relief might be sought against the Investment Sub-Adviser under this
Section (which payments shall be reimbursed to the Trust by the Investment
Sub-Adviser as provided below) if the Trust receives (i) a written affirmation
of the Investment Sub-Adviser's good faith belief that the standard of conduct
necessary for the limitation of liability in this Section has been met and (ii)
a written undertaking to reimburse the Trust whether or not the Investment
Sub-Adviser shall be deemed to have liability under this Section, such
reimbursement to be due upon (1) a final decision on the merits by a court or
other body before whom the proceeding was brought as to whether or not the
Investment Sub-Adviser is liable under this Section or (2) in the absence of
such a decision, upon the request of the Investment Sub-Adviser for
reimbursement by a majority vote of a quorum consisting of trustees of the
Trust who are neither "interested persons" of the Trust (as defined in Section
2(a)(19) of the 1940 Act) nor parties to the proceeding ("Disinterested
Non-Party Trustees"). In addition, at least one of the following conditions
must be met: (A) the Investment Sub-Adviser shall provide a security for such
Investment Sub-Adviser undertaking, (B) the Trust shall be insured against
losses arising by reason of any lawful advance, or (C) a majority of a quorum
of the Disinterested Non-Party Trustees of the Trust or an independent legal
counsel in a written opinion, shall determine, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there is a
reasonable belief that the Investment Sub-Adviser ultimately will be found not
to be liable under this Section.
11. DURATION AND TERMINATION. This Agreement shall become effective
as of the date hereof and shall continue (unless terminated automatically as
set forth below) in effect for a period of one year. Thereafter, if not
terminated, this Agreement shall continue in effect with respect to the Trust
for successive periods of 12 months, provided such continuance is specifically
approved at least annually by both (a) the vote of a majority of the Trust's
Board of Trustees or a vote of a majority of the outstanding voting securities
of the Trust at the time outstanding and entitled to vote and (b) by the vote
of a majority of the Trustees, who are not parties to this Agreement or
interested persons (as such term is defined in the 1940 Act) of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
Notwithstanding the foregoing, this Agreement may be terminated by the Trust,
without the payment of any penalty, upon giving the Investment Sub-Adviser 60
days' notice (which notice may be waived by the Investment Sub-Adviser),
provided that such termination by the Trust shall be directed or approved by
the vote of a majority of the Trustees of the Trust in office at the time or by
the vote of the holders of a majority of the voting securities of the Trust at
the time outstanding and entitled to vote, or by the Investment Sub-Adviser on
60 days' written notice (which notice may be waived
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by the Trust), and will terminate automatically upon any termination of the
Investment Advisory Agreement between the Trust and the Investment Adviser.
This Agreement will also immediately terminate in the event of its assignment.
(As used in this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the same meanings
of such terms in the 1940 Act.)
12. NOTICES. Any notice under this Agreement shall be in writing to
the other party at such address as the other party may designate from time to
time for the receipt of such notice and shall be deemed to be received on the
earlier of the date actually received or on the fourth day after the postmark
if such notice is mailed first class postage prepaid.
13. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. Any amendment of this Agreement shall be
subject to the 1940 Act.
14. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware for contracts to be
performed entirely therein without reference to choice of law principles thereof
and in accordance with the applicable provisions of the 1940 Act.
15. USE OF THE NAME "GUGGENHEIM." Pursuant to a Trademark Sublicense
Agreement dated July 26, 2007 between the Investment Adviser and the Investment
Sub-Adviser, the Investment Sub-Adviser has consented to the use by the Trust of
the name or identifying word "Guggenheim" in the name of the Trust.
16. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or other wise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding on, and shall inure to the
benefit of the parties hereto and their respective successors.
17. COUNTERPARTS. This Agreement may be executed in counterparts by
the parties hereto, each of which shall constitute an original counterpart, and
all of which, together, shall constitute one Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers designated below as of the day
and year first above written.
CLAYMORE ADVISORS, LLC
By: _________________________________
Name:
Title:
GUGGENHEIM PARTNERS ASSET
MANAGEMENT, LLC
By: _________________________________
Name:
Title:
CLAYMORE/GUGGENHEIM STRATEGIC
OPPORTUNITIES FUND
By: _________________________________
Name:
Title:
B-8
APPENDIX C
CLAYMORE FUNDS
NOMINATING AND GOVERNANCE COMMITTEE CHARTER
PURPOSES AND ORGANIZATION
The purpose of Nominating and Governance Committee (the "Committee")
of the Board of Trustees (the "Board") of each of the registered investment
companies listed in Appendix A hereto (the "Trust(s)") is to review matters
pertaining to the composition, committees, and operations of the Board. Members
of the Committee may not be "interested persons" of the Trust, as such term is
defined in the Investment Company Act of 1940, as amended ("Interested
Persons").(1) The Committee shall have the following duties and powers:
(1) To evaluate and recommend all candidates for election or
appointment as members of the Board and recommend the
appointment of members and chairs of each Board Committee.
(2) To review policy matters affecting the operation of the
Board and Board committees and make such recommendations to
the Board as deemed appropriate by the Committee.
(3) To evaluate periodically the effectiveness of the Board and
Board Committees and make such recommendations to the Board
as deemed appropriate by the Committee.
(4) To oversee the contract review process, including the review
of the Trust's investment advisory agreements and contracts
with other affiliated service providers.
The Committee shall receive appropriate funding as determined by the
Committee to carry out its responsibilities and shall have the authority to
retain experts, consultants or legal counsel as the Committee deems
appropriate.
The Committee shall meet annually (or more frequently, if needed) and
be empowered to hold special meetings, as circumstances require. Any action of
the Committee shall be taken by the affirmative vote of a majority of the
members. Any action of the Committee may be taken without a meeting if at least
a majority of the members of the Committee consent thereto in writing.
------------------
1 As contemplated by certain rules under the Investment Company Act of
1940, as amended, the selection and nomination of candidates for
election as members of the Board who are not Interested Persons shall
be made by the incumbent members of the Board who are not Interested
Persons
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QUALIFICATIONS FOR TRUSTEE NOMINEES
The Committee requires that Trustee candidates have a college degree
or equivalent business experience. The Committee may take into account a wide
variety of factors in considering Trustee candidates, including (but not
limited to): (i) availability and commitment of a candidate to attend meetings
and perform his or her responsibilities on the Board, (ii) relevant industry
and related experience, (iii) educational background, (iv) financial expertise,
(v) an assessment of the candidate's ability, judgment and expertise and (v)
overall diversity of the Board's composition.
Following an initial evaluation by the Committee, a nominee must: (i)
be prepared to submit written answers to a questionnaire seeking professional
and personal information that will assist the Committee to evaluate the
candidate and to determine, among other matters, whether the candidate would be
an Independent Trustee under the 1940 Act or otherwise have material
relationships with key service providers to the Fund; (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 Committee at a time
and location convenient to those Committee members in order to discuss the
nominee's qualifications.
IDENTIFICATION OF NOMINEES
In identifying potential nominees for the Board, the Committee may
consider candidates recommended by one or more of the following sources: (i)
the Trust's current Trustees, (ii) the Trust's officers, (iii) the Trust's
investment adviser(s), (iv) the Trust's shareholders (see below) and (v) any
other source the Committee deems to be appropriate. The Committee may, but is
not required to, retain a third party search firm at the expense of the Trust
to identify potential candidates. The Committee will not nominate a person for
election to the Board as a Trustee (unless such person is an "interested
person," as defined by the Investment Company Act of 1940) after such person
has reached the age of seventy-two (72).
CONSIDERATION OF CANDIDATES RECOMMENDED BY SHAREHOLDERS
The Committee will consider and evaluate nominee candidates properly
submitted by shareholders on the same basis as it considers and evaluates
candidates recommended by other sources. Appendix B to this Charter, as it may
be amended from time to time by the Committee, sets forth procedures that must
be followed by shareholders to properly submit a nominee candidate to the
Committee (recommendations not properly submitted in accordance with Appendix B
will not be considered by the Committee).
C-2
APPENDIX A
Claymore Dividend & Income Fund
Fiduciary/Claymore MLP Opportunity Fund
Old Mutual/Claymore Long-Short Fund
TS&W / Claymore Tax-Advantaged Balanced Fund
Claymore/Guggenheim Strategic Opportunities Fund
Claymore Exchange-Traded Fund Trust
Claymore Exchange-Traded Fund Trust 2
Claymore Exchange-Traded Fund Trust 3
C-3
APPENDIX B
PROCEDURES FOR SHAREHOLDERS TO SUBMIT NOMINEE CANDIDATES
A Trust shareholder must follow the following procedures in order to properly
submit a nominee recommendation for the Committee's consideration.
1. The shareholder must submit any such recommendation (a "Shareholder
Recommendation") in writing to the Trust, to the attention of the
Secretary, at the Address of the principal executive offices of the
Trust.
2. The Shareholder Recommendation must be delivered to or mailed and
received at the principal executive offices of the Trust not less than
one hundred and twenty (120) calendar days nor more than one hundred
and fifty (150) calendar days prior to the date of the Board or
shareholder meeting at which the nominee would be elected.
3. The Shareholder Recommendation must include: (i) a statement in
writing setting forth (A) the name, age, date of birth, business
address, residence address and citizenship of the person recommended
by the shareholder (the "candidate"); (B) the class or series and
number of all shares of the Trust owned of record or beneficially by
the candidate, as reported to such shareholder by the candidate; (C)
any other information regarding the candidate called for with respect
to director nominees by paragraphs (a), (d), (e), (f) of Item 401 of
Regulation S-K or paragraph (b) of Item 22 of Rule 14a-101 (Schedule
14A) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), adopted by the Securities and Exchange Commission (or
the corresponding provisions of any regulation or rule subsequently
adopted by the Securities and Exchange Commission or any successor
agency applicable to the Trust); (D) any other information regarding
the candidate that would be required to be disclosed if the candidate
were a nominee in a proxy statement or other filing required to be
made in connection with solicitation of proxies for election of
Trustees or directors pursuant to Section 14 of the Exchange Act and
the rules and regulations promulgated thereunder; and (E) whether the
recommending shareholder believes that the candidate is or will be an
"interested person" of the Trust (as defined in the Investment Company
Act of 1940, as amended) and, if not an "interested person,"
information regarding the candidate that will be sufficient for the
Trust to make such determination; (ii) the written and signed consent
of the candidate to be named as a nominee and to serve as a Trustee if
elected; (iii) the recommending shareholder's name as it appears on
the Trust's books; (iv) the class or series and number of all shares
of the Trust owned beneficially and of record by the recommending
shareholder; and (v) a description of all arrangements or
understandings between the recommending shareholder and the candidate
and any other persons (including their names) pursuant to which the
recommendation is being
C-4
made by the recommending shareholder. In addition, the Committee may
require the candidate to furnish such other information as it may
reasonably require or deem necessary to determine the eligibility of
such candidate to serve on the Board.
C-5
CLAYMORE(R) LOGO PROXY CARD FOR
CLAYMORE/GUGGENHEIM STRATEGIC OPPORTUNITIES FUND
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS - JANUARY 12, 2010
SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The annual meeting of shareholders of Claymore/Guggenheim Strategic
Opportunities Fund (the "Fund") will be held at the offices of Claymore
Securities, Inc., 2455 Corporate West Drive, Lisle, Illinois, 60532, on Tuesday,
January 12, 2010 at 10:30 A.M., Central Time (the "Annual Meeting"). The
undersigned hereby appoints each of Mark E. Mathiasen and Kevin M. Robinson, or
their respective designees, each 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 or postponements thereof, with all powers the
undersigned would possess if personally present, upon the matters specified on
the reverse side.
---------------- QUESTIONS ABOUT THIS PROXY? Should you have any questions
| | about the proxy materials or regarding how to vote your
| | shares, please contact our proxy information line TOLL-FREE
| | AT 1-866-796-1290. Representatives are available Monday
| | through Friday 9:00 a.m. to 10:00 p.m. Eastern Time.
----------------
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
CLAYMORE/GUGGENHEIM STRATEGIC OPPORTUNITIES FUND SHAREHOLDER MEETING TO BE HELD
ON JANUARY 12, 2010
THE PROXY STATEMENT FOR THIS MEETING IS AVAILABLE AT:
WWW.PROXYONLINE.COM/DOCS/CLAYMOREGOF.PDF
--------------------------------------------------------------------------------
PLEASE FOLD HERE AND RETURN THE ENTIRE BALLOT - DO NOT DETACH
CLAYMORE/GUGGENHEIM STRATEGIC OPPORTUNITIES FUND
Proxy for Annual Meeting of Shareholders -- January 12, 2010
PLEASE SEE THE INSTRUCTIONS BELOW IF YOU WISH TO VOTE BY PHONE, MAIL OR VIA THE
INTERNET.
CALL: To vote your proxy by phone, call toll-free 1-866-796-1290 and
provide the representative with the control number found on the
reverse side of this proxy card. Representatives are available
to take your voting instructions Monday through Friday 9:00 a.m.
to 10:00 p.m. Eastern Time.
LOG-ON: To vote via the Internet, go to WWW.PROXYONLINE.COM and enter
the control number found on the reverse side of this proxy card.
MAIL: To vote your proxy by mail, check the appropriate voting box on
the reverse side of this proxy card, sign and date the card and
return it in the enclosed postage-paid envelope. IF CONVENIENT,
PLEASE UTILIZE ONE OF THE TWO VOTING OPTIONS ABOVE SO THAT YOUR
VOTE WILL BE RECEIVED BEFORE JANUARY 12TH.
NOTE: 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).
--------------------------------------------------------
Shareholder sign here Date
--------------------------------------------------------
Joint owner sign here Date
IT IS IMPORTANT THAT PROXIES BE VOTED PROMPTLY. EVERY
SHAREHOLDER'S VOTE IS IMPORTANT.
CLAYMORE/GUGGENHEIM STRATEGIC OPPORTUNITIES FUND
CONTROL NUMBER
WE NEED YOUR PROXY VOTE AS SOON AS POSSIBLE. YOUR PROMPT ATTENTION WILL
HELP TO AVOID THE EXPENSE OF FURTHER SOLICITATION.
Remember to SIGN AND DATE THE REVERSE SIDE before mailing in your vote. This
proxy card is valid only when signed and dated.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO INSTRUCTIONS
ARE INDICATED ON THIS PROXY WITH RESPECT TO ONE OR MORE PROPOSALS AND THIS PROXY
IS PROPERLY EXECUTED THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN FAVOR
OF SUCH PROPOSAL(S). THE PROXIES MAY VOTE AT THEIR DISCRETION ON ANY OTHER
MATTER THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
--------------------------------------------------------------------------------
PLEASE FOLD HERE AND RETURN THE ENTIRE BALLOT - DO NOT DETACH
TO VOTE, MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: |X|
FOR AGAINST ABSTAIN
1. To approve a new investment advisory agreement between the Fund and | | | | | |
Claymore Advisors, LLC.
2. To approve an investment sub-advisory agreement among the Fund, Claymore | | | | | |
Advisors, LLC and Guggenheim Partners Asset Management, LLC.
3. To elect two Trustees as Class II Trustees to serve until the Fund's annual
meeting of Shareholders for the Fund's fiscal year ending May 31, 2012,
or until their respective successors shall have been elected and qualified. FOR WITHHOLD
Randall C. Barnes | | | |
Kevin M. Robinson | | | |
THANK YOU FOR VOTING