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:
[X] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(E)(2))
[ ] 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.
PRELIMINARY PROXY STATEMENT - SUBJECT TO COMPLETION
[CLAYMORE LOGO]
CLAYMORE GROUP
2455 CORPORATE WEST DRIVE
LISLE, ILLINOIS 60532
November [o], 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, Inc. ("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 and 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 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 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.
Claymore has retained The Altman Group, a professional proxy
solicitation firm, 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
call (800) - .
Respectfully,
David C. Hooten
Chairman
Claymore Group, Inc.
[GPAM LOGO] [CLAYMORE LOGO]
CLAYMORE/GUGGENHEIM STRATEGIC OPPORTUNITIES FUND
2455 CORPORATE WEST DRIVE
LISLE, ILLINOIS 60532
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 12, 2010
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 [o]
[a.m./p.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, Inc.;
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
November [o], 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.
(This page has been left blank intentionally)
CLAYMORE/GUGGENHEIM STRATEGIC OPPORTUNITIES FUND
----------------------
PROXY STATEMENT
----------------------
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 [o]
[a.m./p.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 us at our toll-free number:
(800) - - .
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) - - .
The Notice of Meeting, this Proxy Statement and the enclosed proxy card
are first being sent to Shareholders on or about November [o], 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.
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. Randal 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.
1
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, Inc. ("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 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.
2
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.
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 [o] at (800) - - to obtain directions to the
site of the Meeting.
Shares represented by duly executed proxies will be voted in accordance
with your instructions. If you sign the proxy, but do not fill in a
vote, your Shares will be voted in accordance with the Board's
recommendations. 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
3
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. A signed
proxy card or other authorization by a beneficial owner of Shares that
does not specify how the beneficial owner's Shares are to be voted on a
proposal will be deemed to be an instruction to vote such Shares in
favor of such Proposal. If any other business is brought before the
Meeting, your Shares will be voted at your proxy holder's discretion.
Therefore, if you beneficially own Shares that are held in "street
name" through a broker-dealer or that are held of record by a service
organization, 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.
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.
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 [o] Shares
outstanding.
4
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
and/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.
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.
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.
5
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."
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;
(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
6
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 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.
7
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 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 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.
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 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
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
8
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) ___-____.
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.
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
9
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.
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;
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 and administrative services to the Fund are not
expected to change, and the key personnel who currently
provide management 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, 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
10
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 portfolios 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
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
11
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).
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.
12
PROPOSAL 2: APPROVAL OF 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.
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;
13
(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
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,
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
14
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.
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) ___-____.
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
15
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 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).
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.
16
BOARD RECOMMENDATION
The Board, including the Independent Trustees, recommends that you vote
"FOR" approval of the New Sub-Advisory Agreement.
17
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 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.
18
POSITION NUMBER OF
HELD PORTFOLIOS
WITH THE FUND, IN FUND
TERM OF OFFICE COMPLEX
NAME, AND LENGTH OF PRINCIPAL OCCUPATION OVERSEEN OTHER DIRECTORSHIPS
ADDRESS(1) AND AGE TIME SERVED(2) DURING THE PAST FIVE YEARS BY TRUSTEE HELD BY TRUSTEE
INDEPENDENT TRUSTEES:
Randall C. Barnes Trustee since Private Investor (2001-present). [o] None.
Year of birth: 1951 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(3) Trustee since Partner of Nyberg & Cassioppi, [o] None.
Year of birth: 1953 2006 LLC, 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. Toupin, Trustee since Retired. Formerly Vice President, [o] None.
Jr.(3) 2006 Manager and Portfolio Manager of
Year of birth: 1958 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).
INTERESTED TRUSTEE:
Kevin M. Trustee since Senior Managing Director, General [o] None.
Robinson(3)(4)+ 2009; Chief Counsel and Corporate Secretary
Year of birth: 1959 Legal Officer (2007-present) of Claymore
since 2008 Advisors, LLC and Claymore
Securities, Inc.; Chief Legal
Officer of certain funds in the
Fund Complex. Formerly, Associate
General Counsel (2000- 2007) of
NYSE Euronext, Inc. (formerly,
Archipelago Holdings, Inc.).
19
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.
TERM OF OFFICE(2)
OFFICERS: AND LENGTH OF TIME PRINCIPAL OCCUPATION
NAME, ADDRESS(1) AND AGE POSITION SERVED DURING THE PAST FIVE YEARS
--------------------------- --------------------- -------------------- ----------------------------------------------
J. Thomas Futrell Chief Executive Officer since 2008
Year of birth: 1955 Officer Senior Managing Director, Chief Investment
Officer (2008-present) of Claymore Advisors,
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.
20
TERM OF OFFICE(2)
OFFICERS: AND LENGTH OF TIME PRINCIPAL OCCUPATION
NAME, ADDRESS(1) AND AGE POSITION SERVED DURING THE PAST FIVE YEARS
--------------------------- --------------------- -------------------- ----------------------------------------------
Steven M. Hill Chief Financial Officer since 2006 Senior Managing Director (2005-present) and
Year of birth: 1964 Officer , Chief Chief Financial Officer (2005-2006),
Accounting Officer Managing Director (2003-2005) of Claymore
and Treasurer Advisors, LLC and Claymore Securities, Inc.;
Chief Financial Officer, Chief Accounting
Officer and Treasurer of certain funds in
the Fund Complex. Formerly, 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 since 2008 Vice President, Assistant General Counsel of
Year of birth: 1978 Claymore Group Inc. (2007-present).
Secretary of certain funds in the Fund
Complex. Previously, Law Clerk, Idaho State
Courts (2003-2006).
Bruce Saxon Chief Compliance Officer since 2006 Vice President - Fund Compliance Officer of
Year of birth: 1957 Officer Claymore Securities, Inc. (2006-present).
Chief 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 President Officer since 2008 Senior Managing Director, Chief Operating
Year of Birth: 1964 Officer for Guggenheim Partners Asset
Management, Inc. (2002-present)
James Howley Assistant Treasurer Officer since 2007 Vice President, Fund Administration
Year of birth: 1972 (2004-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 Treasurer Officer since 2008 Vice President, Fund Administration-Tax
Year of birth: 1959 (2005-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.
21
TERM OF OFFICE(2)
OFFICERS: AND LENGTH OF TIME PRINCIPAL OCCUPATION
NAME, ADDRESS(1) AND AGE POSITION SERVED DURING THE PAST FIVE YEARS
--------------------------- --------------------- -------------------- ----------------------------------------------
Donald P. Swade Assistant Treasurer Officer since 2008 Vice President, Fund Administration
Year of birth: 1972 (2006-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 Secretary Officer since 2008 Vice President, Assistant General Counsel of
Year of birth: 1978 Claymore Group Inc. (2005-present).
Secretary of certain funds in the Fund
Complex. Previously, Associate, Vedder
Price P.C. (2003-2005).
(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 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
22
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.
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
23
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.
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 COMPANIES OVERSEEN BY TRUSTEE IN THE
NAME OF TRUSTEE EQUITY SECURITIES IN THE FUND 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 FROM THE
NAME OF TRUSTEE(1) FROM THE FUND 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.
SHAREHOLDER APPROVAL
With respect to Proposal 3, the affirmative vote of a majority of the
Shares present in person or represented by
24
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.
25
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 [o] at (800) ___-____. 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 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.
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. A signed proxy
card or other authorization by a beneficial owner of Shares that does not
specify how the beneficial owner's Shares are to be voted on a Proposal will be
deemed to be an instruction to vote such Shares in favor of such Proposal. If
any other business is brought before the Meeting, your Shares will be voted at
your proxy holder's discretion.
Therefore, if you beneficially own Shares that are held in "street
name" through a broker-dealer or that are held of record by a service
organization, 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 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.
26
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 and/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, Inc., 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 $[o] billion of assets under
supervision, as of [o], 2009. 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.
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 [o] 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.
27
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 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
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-
28
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, except as listed below:
[Insert if any]
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).
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
29
or proposal is made (i) the name and address of such Shareholder, as they appear
on the Fund's books, and of such beneficial owner, (ii) the class or series and
number of Shares which are owned beneficially and of record by such Shareholder
and such beneficial owner, (iii) a description of any agreement, arrangement or
understanding with respect to the nomination or proposal between or among such
Shareholder and such beneficial owner, any of their respective affiliates or
associates, and any others acting in concert with any of the foregoing, (iv) a
description of any agreement, arrangement or understanding (including any
derivative or short positions, profit interests, options, warrants, stock
appreciation or similar rights, hedging transactions, and borrowed or loaned
Shares) that has been entered into as of the date of the Shareholder's notice
by, or on behalf of, such Shareholder and such beneficial owners, the effect or
intent of which is to mitigate loss to, manage risk or benefit of share price
changes for, or increase or decrease the voting power of, such Shareholder or
such beneficial owner, with respect to Shares of the Fund, (v) a representation
that the Shareholder is a holder of record of Shares of the Fund entitled to
vote at such meeting and intends to appear in person or by proxy at the meeting
to propose such business or nomination, and (vi) a representation whether the
Shareholder or the beneficial owner, if any, intends or is part of a group which
intends (a) to deliver a proxy statement and/or form of proxy to holders of at
least the percentage of the Fund's outstanding Shares required to approve or
adopt the proposal or elect the nominee and/or (b) otherwise to solicit proxies
from Shareholders in support of such proposal or nomination. The Fund may
require any proposed nominee to furnish such other information as it may
reasonably require to determine the eligibility of such proposed nominee to
serve as a Trustee of the Fund.
To be timely, the notice must be delivered to the Secretary of the Fund
at the Fund's principal executive offices not later than the close of business
on the ninetieth (90th) day, nor earlier than the close of business on the one
hundred twentieth (120th) day, prior to the first anniversary of the preceding
year's annual meeting (provided, however, that in the event that the date of the
annual meeting is more than thirty (30) days before or more than seventy (70)
days after such anniversary date, notice by the Shareholder must be so delivered
not earlier than the close of business on the one hundred twentieth (120th) day
prior to such annual meeting and not later than the close of business on the
later of the ninetieth (90th) 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 [o], 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 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 Fund has retained The Altman Group, Inc. ("The
Altman Group") as proxy solicitor. The Altman Group will receive a project
management fee as well as fees charged
30
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 [o].
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.
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
November [o], 2009
31
APPENDIX A
FORMS OF NEW ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement"), dated as of ,
2009, 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.
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;
A-1
(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;
(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;
A-2
(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 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 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.
A-3
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.
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, Inc., 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 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
A-4
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.
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.
A-5
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:
A-6
APPENDIX B
FORMS OF NEW SUB-ADVISORY AGREEMENT
INVESTMENT SUB-ADVISORY AGREEMENT
THIS INVESTMENT SUB-ADVISORY AGREEMENT (the "Agreement"), dated as of ,
2009, 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, Inc., 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 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
B-1
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.
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, or from
engaging in any other lawful activity, and shall not in any way limit or
restrict the
B-2
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 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-3
(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 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 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.)
B-4
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.
B-5
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, INC.
By:
-----------------------------------
Name:
Title:
CLAYMORE/GUGGENHEIM STRATEGIC OPPORTUNITIES FUND
By:
-----------------------------------
Name:
Title:
B-6
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.
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
----------------------
(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.
C-1
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
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-4
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 the Fund, 2455
Corporate West Drive, Lisle, Illinois, 60532, on Tuesday, January 12, 2010 at [
], Central Time (the "Annual Meeting"). The undersigned hereby appoints each of
Mark E. Mathiasen and Kevin M. Robinson, or their respective designees, with
full power of substitution and revocation, as proxies to represent and to vote
all shares of the undersigned at the Annual Meeting and all adjournments
thereof, with all powers the undersigned would possess if personally present,
upon the matters specified on the reverse side.
---------------- 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 TO BE HELD ON JANUARY 12, 2010
THE PROXY STATEMENT FOR THIS MEETING IS AVAILABLE AT:
WWW.PROXYONLINE.COM/DOCS____.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 DIRECTION IS
INDICATED AS TO THE PROPOSAL, THE PROXIES SHALL VOTE FOR SUCH PROPOSAL. THE
PROXIES MAY VOTE AT THEIR DISCRETION ON ANY OTHER MATTER 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, Inc.
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