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
ADVENT/CLAYMORE ENHANCED GROWTH & INCOME FUND
ADVENT/CLAYMORE GLOBAL CONVERTIBLE SECURITIES & INCOME 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
[ADVENT LOGO] [CLAYMORE LOGO]
ADVENT/CLAYMORE FUNDS
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 Claymore Advisors, LLC ("Claymore" or the
"Adviser"), are now indirect subsidiaries of Guggenheim Partners, LLC. The
Adviser is the investment adviser to Advent/Claymore Enhanced Growth & Income
Fund and Advent/Claymore Global Convertible Securities & Income Fund (each, a
"Fund" and, together, the "Funds"). Upon the closing of the Transaction, the
existing investment advisory agreement between the Adviser and each Fund
automatically terminated pursuant to its terms.
The Adviser continues to provide services to the Funds on an interim
basis, as permitted by the Investment Company Act of 1940. However, in order for
the Adviser to continue to provide services to the Funds beyond the interim
period, shareholders of each Fund are being asked to approve a new investment
advisory agreement between Claymore and each 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, Claymore will continue to provide
investment advisory services to the Funds.
o Your Fund's contractual advisory fee rate will not increase.
o There are no material differences between the terms of each Fund's
proposed new investment advisory agreement and the terms of such
Fund's prior investment advisory agreement except as otherwise noted
in the Proxy Statement.
The enclosed Notice of Joint Special Meeting of Shareholders and Proxy
Statement set forth information relating to the Proposal to be addressed at the
joint special meeting of shareholders of the Funds. The Board of Trustees of
each Fund believes that the Proposal set forth in the Notice of Joint Special
Meeting of Shareholders is important and recommends that you read the enclosed
materials carefully. AFTER CAREFUL CONSIDERATION, THE BOARD OF TRUSTEES OF EACH
FUND HAS APPROVED THE PROPOSAL AND RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL
APPLICABLE TO YOUR FUND.
Your vote is important. I encourage all shareholders to participate in
the governance of their Funds. 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.
[ADVENT LOGO] [CLAYMORE LOGO]
ADVENT/CLAYMORE FUNDS
2455 CORPORATE WEST DRIVE
LISLE, ILLINOIS 60532
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 12, 2010
Notice is hereby given to shareholders of:
Advent/Claymore Enhanced Growth & Income Fund ("LCM")
Advent/Claymore Global Convertible Securities & Income Fund ("AGC")
(each a "Fund" and, collectively, the "Funds")
that a joint special meeting of shareholders of the Funds (the "Meeting") will
be held at the offices of Claymore Securities, Inc., 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. For shareholders of each Fund, to approve a new investment advisory
agreement between each Fund and Claymore Advisors, LLC (the
"Adviser").
2. To transact such other business as may properly come before the
Meeting or any adjournments or postponements thereof.
THE BOARD OF TRUSTEES OF EACH FUND (EACH A "BOARD" AND, COLLECTIVELY,
THE "BOARDS"), INCLUDING THE INDEPENDENT TRUSTEES, RECOMMENDS THAT YOU VOTE FOR
APPROVAL OF EACH FUND'S NEW INVESTMENT ADVISORY AGREEMENT.
The Board of each Fund has fixed the close of business on November 13,
2009 as the record date for the determination of shareholders entitled to notice
of, and to vote at, the Meeting and any adjournment or postponement thereof. 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/ [o]
[o]
on behalf of the Board of Trustees
of each Fund
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.
ADVENT/CLAYMORE FUNDS
----------------------
PROXY STATEMENT
----------------------
FOR THE JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 12, 2010
This joint proxy statement (the "Proxy Statement") is furnished to
shareholders of each of the funds listed below.
Advent/Claymore Enhanced Growth & Income Fund ("LCM")
Advent/Claymore Global Convertible Securities & Income Fund ("AGC")
(each a "Fund," and collectively the "Funds")
Each share of common stock (for LCM) and each share of common stock and
share of auction market preferred stock (for AGC) (collectively, the "Shares")
of each Fund is entitled to vote on the Proposal pertaining to that Fund.
Holders of Shares of the Funds are referred to herein as "Shareholders" and
auction market preferred shares are referred to herein as "preferred shares."
The Proxy Statement is furnished in connection with the solicitation by the
Board of Trustees of each Fund (each a "Board" and, collectively, the "Boards")
of proxies to be voted at the joint special meeting of Shareholders of the Funds
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.
This Proxy Statement gives you information you need to vote on the
matters listed on the accompanying Notice of Joint Special 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) - - .
EACH 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
cards are first being sent to Shareholders on or about November [o], 2009.
1
INFORMATION TO HELP YOU UNDERSTAND
AND VOTE ON THE PROPOSAL
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
proposal addressed in this Proxy Statement (the "Proposal"), in a Question and
Answer format, to help you understand and vote on the Proposal. 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 ARE YOU SENDING ME THIS INFORMATION?
You are receiving these materials because on November 13, 2009
(the "Record Date") you owned Shares of one or both of the Funds
and, as a result, have a right to vote on the Proposal
applicable to each Fund and are entitled to be present and to vote
at the Meeting or any adjournments or postponements thereof. Each
Share of each Fund is entitled to one vote on the Proposal
pertaining to that Fund.
o WHY IS A SPECIAL MEETING OF SHAREHOLDERS BEING HELD?
Claymore Group Inc. ("Claymore Group") is the parent of Claymore
Advisors, LLC ("Claymore" or the "Adviser"). The Adviser is the
investment adviser to each of the Funds.
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"). 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 each investment
advisory agreement between the Adviser and each respective Fund
(each, a "Prior Advisory Agreement"), which resulted in the
automatic termination of each Prior Advisory Agreement pursuant to
its terms.
As permitted pursuant to Rule 15a-4 under the 1940 Act, each 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 each
respective Fund (each, an "Interim Advisory Agreement"). Each
Interim Advisory Agreement became effective on the Closing Date.
Pursuant to such agreements, the Adviser may continue to serve
each Fund in such capacities on an interim basis for up to 150
days following the Closing Date, pending receipt of Shareholder
approval of a new agreement for each Fund.
Therefore, in order for the Adviser to continue serving
as a Fund's investment adviser following the expiration
of the 150 day interim period, Shareholders must approve
with respect to each Fund, a new investment advisory
agreement between the Adviser and the respective Fund
(each, a "New Advisory Agreement").
o HOW DOES THE TRANSACTION AFFECT YOUR FUND?
Your investment in each 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 each Fund's investment objectives or principal
investment strategies.
o HOW DOES YOUR FUND'S NEW ADVISORY AGREEMENT COMPARE WITH ITS PRIOR
ADVISORY AGREEMENT?
2
Each Fund's New Advisory Agreement, if approved by Shareholders of
each Fund, will still be with the Adviser and there will be no
material differences between the terms of each Fund's New Advisory
Agreement and the terms of each Fund's Prior Advisory Agreement,
except as noted herein.
o WILL EACH FUND'S FEES FOR INVESTMENT ADVISORY SERVICES INCREASE?
No. The advisory fee rate currently payable by each Fund to the
Adviser will not change.
o WILL YOUR VOTE MAKE A DIFFERENCE?
YES! Your vote is important to ensure that the Proposal(s) can be
acted upon with respect to the Funds. 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 their Funds.
o WHO IS ASKING FOR YOUR VOTE?
The enclosed proxy is solicited by the Board of your Fund 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 EACH FUND'S BOARD RECOMMEND THAT SHAREHOLDERS VOTE ON THE
PROPOSAL(S)?
Each Fund's Board, including the Independent Trustees of each
Fund, recommends that you vote "FOR" approval of the New Advisory
Agreement for your Fund.
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
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.
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
3
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 the 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 the 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.
Preferred shares held in "street name" as to which voting
instructions have not been received from the beneficial owners or
persons entitled to vote as of one business day before the
Meeting, or, if adjourned, one business day before the day to
which the Meeting is adjourned, and that would otherwise be
treated as "broker non-votes" may, pursuant to NYSE Rule 452, be
voted by the broker on the Proposal in the same proportion as the
votes cast by all preferred Shareholders of such Fund who have
voted on that item. NYSE Rule 452 permits proportionate voting of
preferred shares with respect to a particular Proposal if, among
other things, (i) a minimum of 30% of the preferred shares
outstanding has been voted by the holders of such preferred shares
with respect to such Proposal and (ii) less than 10% of the
preferred shares outstanding has been voted by the holders of such
preferred shares against such item. For the purpose of meeting the
30% test, abstentions will be treated as Shares voted and for the
purpose of meeting the 10% test, abstentions will not be treated
as Shares voted against the item.
o WHAT VOTE IS REQUIRED TO APPROVE THE PROPOSAL?
To be approved with respect to each Fund, the New Advisory
Agreement must be approved by a vote of a majority of the
outstanding voting securities of each 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 a 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. With
respect to AGC, holders of common Shares and preferred Shares will
vote together as a single class.
o WHY IS A JOINT MEETING BEING HELD?
The Proposal is the same for each Fund and management of the Funds
has concluded that it is cost-effective to hold a joint special
meeting and to have a joint proxy statement. Shareholders of each
Fund will vote separately on the Proposal with respect to their
Fund. An unfavorable vote on a Proposal by the Shareholders of one
Fund will not affect the implementation of such Proposal by the
other Fund if such Proposal is approved by Shareholders of that
Fund.
4
PROPOSAL 1: APPROVAL OF NEW ADVISORY AGREEMENTS
BACKGROUND AND THE TRANSACTION
The Adviser serves as the investment adviser for each Fund and is
responsible for each 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 as of [______],[_], 2009.
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.
PRIOR ADVISORY AGREEMENTS
The Adviser served as the investment adviser for each Fund pursuant to
each Fund's respective Prior Advisory Agreement. The date of each Fund's Prior
Advisory Agreement, the date such agreement was last approved by Shareholders of
such Fund, the date the continuation of such agreement was last approved by the
Board of such
5
Fund and the advisory fee rate payable thereunder is set forth in Appendix C
hereto.
Each 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 each 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 Funds or in the operations of the Funds or in any changes in
the investment approach of the Funds.
INTERIM ADVISORY AGREEMENTS
Rule 15a-4 under the 1940 Act permits each 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 Fund's New Advisory Agreement.
Based upon the considerations described below under "--Board
Considerations," each Board, including the Independent Trustees, approved the
Interim Advisory Agreement for the respective Fund on the date set forth in
Appendix C. In approving the Interim Advisory Agreement, each Board, including a
majority of the Independent Trustees, determined that the scope and quality of
services to be provided to each respective 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 each Fund's Interim Advisory Agreement is not greater than the
compensation the Adviser would have received under such Fund's Prior Advisory
Agreement.
Each Fund's Interim Advisory Agreement became effective upon the
Closing Date. There are no material differences between the terms of each Fund's
Interim Advisory Agreement and the terms of such Fund's Prior Advisory Agreement
and 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 each 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 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 AGREEMENTS
It is proposed that the Adviser and each respective Fund enter into a
New Advisory Agreement, to become effective upon the date of Shareholder
approval. Under Section 15(a) of the 1940 Act, each New Advisory Agreement
requires the approval of (i) the Board, including a majority of the Independent
Trustees, of the respective Fund and (ii) "a majority of the outstanding voting
securities" (as such term is defined in the 1940 Act) of the respective Fund. It
6
was a condition of the Merger Agreement that the Boards, including a majority of
the Independent Trustees, approve the New Advisory Agreements, on terms no less
favorable to the Adviser, taken as a whole, than the Prior Advisory Agreements.
In the event that the Shareholders of a Fund do not approve the respective New
Advisory Agreement, the Adviser may continue to act as the investment adviser
for such Fund pursuant to the Interim Advisory Agreement for a period of up to
150 days following the Closing Date. In such event, the respective Board will
determine a course of action believed by such Board to be in the best interests
of such Fund and its Shareholders.
Based upon the considerations described below under "--Board
Considerations," each Board, including the Independent Trustees, approved the
New Advisory Agreement on the date set forth in Appendix C.
There are no material differences between the terms of each Fund's New
Advisory Agreement and the terms of such Fund's Prior Advisory Agreement. Forms
of the New Advisory Agreements are attached in Appendix G hereto and the
description of the New Advisory Agreements is qualified in its entirety by
reference to Appendix G hereto.
Duties and Obligations. Each Fund's 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. Each Fund's New Advisory Agreement provides that the
Advisor may delegate some or all of its duties and obligations under the
Agreement to one or more sub-investment advisers or investment managers,
including, without limitation, Advent Capital Management, LLC ("Advent"), and
the Adviser has delegated the services in (i), (ii) and (iii) above to Advent.
In addition, each Fund's 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 each Fund's New Advisory Agreement are identical to the duties and
obligations of the Adviser under such Fund's Prior Advisory Agreement.
Compensation. Each Fund's New Advisory Agreement does not result in any
change in the advisory fee rate paid by such Fund. Pursuant to each Fund's New
Advisory Agreement, each 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 a specified percentage of the Fund's assets, as set forth in the
respective agreement. 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 certain
officers or trustees of the Fund affiliated with the Adviser. These provisions
of each Fund's New Advisory Agreement are identical to provisions of such Fund's
Prior Advisory Agreement. The advisory fee rate and the asset base on which such
fee is payable is the same between each Fund's Prior Advisory Agreement, Interim
Advisory Agreement and New Advisory Agreement. Each Fund's advisory fee rate
under such Fund's Prior Advisory Agreement, Interim Advisory Agreement and New
Advisory Agreement is set forth in Appendix C hereto. The amount of advisory
fees paid by each Fund to the Adviser during the Fund's last fiscal year is set
forth in Appendix D hereto.
Term and Termination. Assuming approval by Shareholders, each Fund's
New Advisory Agreement shall continue for an initial term of two-years,
provided, however, that each Board may consider the continuation of the New
Advisory Agreement during such two year term. Thereafter, each Fund's 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 (as such term is defined in the 1940 Act)
of the Fund and (ii) by a majority of the Trustees who are not "interested
persons" of any party to the Fund's New Advisory Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. Each
Fund's 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. Each Fund's New
Advisory Agreement will also immediately terminate in the event of its
assignment, as defined in the 1940 Act. These provisions of each Fund's New
Advisory Agreement are identical to provisions of such Fund's Prior Advisory
Agreement.
Limitation of Liability. Each Fund's New Advisory Agreement provides
that the Adviser will not be liable
7
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 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
or a loss resulting from a breach of fiduciary duty with respect to the receipt
of compensation for services. These provisions of each Fund's New Advisory
Agreement are identical to provisions of such Fund's Prior Advisory Agreement.
Use of the Name "Claymore." Each Fund's 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, any successor thereto or any affiliate
thereof as investment adviser of the Fund. These provisions of each Fund's New
Advisory Agreement are identical to provisions of such Fund's 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 Funds 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 each 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 each Fund will not be "interested
persons" (as defined in the 1940 Act) of the Adviser or Guggenheim. The Funds
currently meet this condition. Therefore, the Adviser and the Acquisition
Subsidiaries represented to each Board that that no unfair burden would be
imposed on the respective Fund as a result of the Transaction.
BOARD CONSIDERATIONS
Prior Advisory Agreements. The date of each Fund's Prior Advisory
Agreement and the date on which it was last approved for continuance by its
Board, including the Independent Trustees, is provided in Appendix C. As part of
its review process, the Independent Trustees were represented by independent
legal counsel. Each Board reviewed materials received from the Adviser and
independent legal counsel. Each Board also had previously received, throughout
the year, Board meeting information regarding Claymore's services for each Fund.
In preparation for its review of the Prior Advisory Agreements, the
Independent Trustees communicated with independent legal counsel regarding the
nature of information to be provided, and independent legal counsel, on behalf
of the Independent Trustees, sent a formal request for information. The Adviser
provided extensive information in response to each request. Among other
information, the Adviser provided general information to assist the Independent
Trustees in assessing the nature and quality of services provided by the Adviser
and information comparing the investment performance, advisory fees and total
expenses of each Fund to other funds, information about the profitability of
each Prior Advisory Agreement to the Adviser and the compliance program of the
Adviser.
8
Based upon its review, the Independent Trustees and each Board
concluded that it was in the best interest of the respective Fund to renew such
Fund's Prior Advisory Agreement. In reaching this conclusion for each Fund, no
single factor was determinative in the Board's analysis, but rather each 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. In approving each Fund's
Prior Advisory Agreement, each respective Board considered separately the best
interests of each Fund overseen by such Board. The specific factors considered
by each Board are described in further detail in each respective Fund's annual
report or semi-annual report to Shareholders. Each Fund will furnish, without
charge, a copy of such 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)
___-____.
Interim Advisory Agreements and New Advisory Agreements. Provided below
is an overview of the primary factors the Boards considered in connection with
the review of the respective Interim Advisory Agreements and the New Advisory
Agreements. In determining whether to approve the Interim Advisory Agreement and
the New Advisory Agreement for a Fund, each Board considered separately the best
interests of each Fund overseen by such Board.
Each Board, including the Independent Trustees, approved the respective
Fund's Interim Advisory Agreement and New Advisory Agreement. Each Board
reviewed materials received from the Adviser, Guggenheim and independent legal
counsel. Each Board also had previously received, throughout the year, Board
meeting information regarding Claymore's services for the respective Fund.
Earlier this year, the Adviser informed the Boards 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 each 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 Boards 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 the certain members of each 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 Boards requested additional
information regarding the Transaction, Guggenheim and the impact of the
Transaction on the Shareholders of the Funds.
During the third quarter of 2009, the Boards 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 Independent
Trustees of each Fund were represented by independent legal counsel. Each Board
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 Independent Trustees 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 Board.
Subsequent to these meetings, the Boards met in person to consider the
Interim Advisory Agreement and the New Advisory Agreement at a joint meeting
held on September 29, 2009. At the meeting representatives from the Adviser and
Guggenheim discussed the Transaction with, and answered questions from the
Boards. The Independent Trustees met in executive session to discuss the
Transaction and the information provided at the Board meetings. The
9
Independent Trustees of each Fund concluded that it was in the best interest of
such Fund to approve the Fund's Interim Advisory Agreement and New Advisory
Agreement and, accordingly, recommended to the respective Board the approval of
such Fund's Interim Advisory Agreement and New Advisory Agreement. The
respective Boards subsequently approved each Fund's Interim Advisory Agreement
and approved each Fund's New Advisory Agreement for a two-year term at such
Board meeting held on September 29, 2009. Each Board also determined that it may
consider the continuation of the agreement during the course of the two-year
term by conducting a thorough review of the various information that would be
part of each Board's regular annual consideration of the continuation of each
Fund's advisory agreements. In reaching the conclusion to approve the Interim
Advisory Agreement and New Advisory Agreement for each Fund, no single factor
was determinative in its Board's analysis, but rather each Board considered a
variety of factors. Provided below is an overview of the primary factors the
Boards considered in connection with the review of the Interim Advisory
Agreements and the New Advisory Agreements.
In connection with each Board's consideration of the Interim Advisory
Agreement and the New Advisory Agreement, the respective 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 scope and
quality of services, that are part of the decision whether to
continue the Prior Advisory Agreement;
o Board approval of each Fund's 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
Funds' assets are managed will not change as a result of the
Transaction;
o the aggregate advisory fee rate payable by each Fund will not
change under such Fund's Interim Advisory Agreement or New
Advisory Agreement;
o there are no material differences between the terms of each
Fund's Interim Advisory Agreement and New Advisory Agreement
and the terms of such Fund's Prior Advisory Agreement;
o the capabilities of the Adviser's personnel who will provide
management and administrative services to the Funds are not
expected to change, and the key personnel who currently
provide management and administrative services to the Funds
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 Funds;
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 Funds will not bear any costs in
connection with the Transaction, inasmuch as the Adviser will
bear the costs, fees and expenses incurred by the Funds in
connection with this Proxy Statement and any other costs of
the Funds associated with the Transaction; and
10
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 Funds.
Nature, Extent and Quality of Services Provided by the Adviser. Each
Board noted that key management personnel servicing the Funds are expected to
remain with the Adviser following the Transaction and that the services provided
to the Funds by the Adviser are not expected to change. Each Board also
considered the Adviser's and Guggenheim's representations to the Boards 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. Each 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, each Board
concluded that the range and quality of services provided by the Adviser to the
Funds were expected to continue under the Interim Advisory Agreement and the New
Advisory Agreement at the same or improved levels.
Advisory Fees. Each Board also considered the fact that the fee rates
payable to the Adviser would be the same under each Fund's Interim Advisory
Agreement and New Advisory Agreement as they are under such Fund's Prior
Advisory Agreement, which had within the last year been determined to be
reasonable. The Boards concluded that these factors supported approval of each
Fund's Interim Advisory Agreement and New Advisory Agreement.
Performance. With respect to the performance of the Funds, the Boards
considered that the Adviser has delegated responsibility for the management of
the Funds' portfolios to Advent Capital Management, LLC, which would continue to
manage the portfolios following the closing of the Transaction. The Boards were
aware that the Advent portfolio management personnel currently responsible for
the day-to-day management of the portfolios would continue to manage the
portfolios following the closing of the Transaction. The Boards concluded that
these factors supported approval of each Interim Advisory Agreement and New
Advisory Agreement.
Profitability. Each Board noted that it was too early to predict how
the Transaction may affect the Adviser's future profitability from its
relationship with the Funds, but concluded that this matter would be given
further consideration on an annual basis going forward. Each Board also noted
that the Adviser's fee rates under each Fund's Interim Advisory Agreement and
New Advisory Agreement are the same as those assessed under such Fund's Prior
Advisory Agreement.
Economies of Scale. Each Board considered any potential economies of
scale that may result from the Transaction. Each 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. Each Board noted its prior determination that the fees
under the Prior Advisory Agreements were reasonable, taking into consideration
other benefits to the Adviser. Each Board also considered other benefits to the
Adviser, Guggenheim and their affiliates expected to be derived from their
relationships with the Funds 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 Boards concluded that the fees payable to the
Adviser 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.
11
No other Trustee of either Fund is an officer, employee, director,
general partner or shareholder of the Adviser or has any material direct or
indirect interest in the Adviser or any other person controlling, controlled by
or under common control with the Adviser.
Certain officers of the Funds, as identified on Appendix E, are
employees or officers of the Adviser.
The Adviser also serves as administrator to the Funds, as described
under "Additional Information--Administrator." It is expected that the Adviser
will continue to provide administrative services to the Funds following
consummation of the Transaction.
SHAREHOLDER APPROVAL
To be approved with respect to a particular Fund, a New Advisory
Agreement must be approved by a vote of a majority of the outstanding voting
securities of such 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 a 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 holders of the Shares of each Fund will have equal voting rights
(i.e. one vote per Share). With respect to AGC, holders of common Shares and
preferred Shares will vote together as a single class.
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 the Proposal.
BOARD RECOMMENDATION
The Board of your Fund, including the Independent Trustees of your
Board, recommends that you vote "FOR" approval of each Fund's New Advisory
Agreement.
12
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 The Altman Group, the Fund's proxy solicitor, at (800)
___-____. to obtain directions to the site of the Meeting.
Fifty percent (50%) of the shares of each Fund entitled to vote on the
proposal must be present in person or by proxy to have a quorum for that Fund to
conduct business 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 PROPOSAL APPLICABLE TO YOUR FUND.
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 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 the 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 the 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.
Preferred Shares held in "street name" as to which voting instructions
have not been received from the beneficial owners or persons entitled to vote as
of one business day before the Meeting, or, if adjourned, one business day
before the day to which the Meeting is adjourned, and that would otherwise be
treated as "broker non-votes" may, pursuant to NYSE Rule 452, be voted by the
broker on a Proposal in the same proportion as the votes cast by all preferred
Shareholders of such Fund who have voted on that item. NYSE Rule 452 permits
proportionate voting of preferred Shares with respect to a particular Proposal
if, among other things, (i) a minimum of 30% of the preferred Shares outstanding
has been voted by the holders of such Shares with respect to such Proposal and
(ii) less than 10% of the preferred Shares outstanding has been voted by the
holders of such Shares against such item. For the purpose of meeting the 30%
test, abstentions will be treated as Shares voted and for the purpose of meeting
the 10% test, abstentions will not be treated as Shares voted against the item.
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.
13
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
Funds' 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 13, 2009 as the
Record Date for the determination of Shareholders of each Fund entitled to
notice of, and to vote at, the Meeting. Shareholders of each 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 such Fund for each Share of the Fund held and a fractional
vote with respect to fractional Shares, with no cumulative voting rights.
ADVISER
Claymore Advisors, LLC a wholly-owned subsidiary of Claymore Group and
indirect Subsidiary of Guggenheim acts as each 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 the
Claymore Group are located at 2455 Corporate West Drive, Lisle, Illinois 60532.
ADMINISTRATOR
Claymore Advisors, LLC, located at 2455 Corporate West Drive, Lisle,
Illinois 60532, serves as administrator to each Fund. It is expected that
Claymore Advisors, LLC will continue to provide administrative services to such
Funds following consummation of the Transaction. The administrative fees paid by
each Fund to Claymore Advisors, LLC during the Fund's last fiscal year are set
forth on Appendix D.
AFFILIATED BROKERS
Commissions, if any, paid to affiliated brokers of each Fund during the
Fund's last fiscal year are set forth on Appendix D.
OUTSTANDING SHARES
The number of outstanding Shares of each Fund, as of the Record Date,
are set forth in Appendix A.
PRINCIPAL SHAREHOLDERS
As of the Record Date, to the knowledge of the Funds, no person
beneficially owned more than 5% of the voting securities of any class of
securities of either Fund, except as set forth in Appendix B.
SECURITY OWNERSHIP OF MANAGEMENT
As of the Record Date, the Trustees and officers of each Fund owned, in
the aggregate, less than 1% of such Fund's outstanding Shares.
DEADLINE FOR SHAREHOLDER PROPOSALS
Information regarding the deadline for timely submission of proposals
intended to be presented at a Fund's next scheduled annual meeting of
Shareholders was provided in the proxy statement relating to each Fund's
previous annual meeting of Shareholders. The applicable deadlines are set forth
in Appendix F.
EXPENSES OF PROXY SOLICITATION
The cost of soliciting proxies 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
14
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 Adviser for such
out-of-pocket expenses. The Funds have retained The Altman Group, Inc. ("The
Altman Group") as its proxy solicitor. The Altman Group will receive a project
management fee as well as fees charged on a per call basis and certain other
expenses. The Altman Group has advised management of the Funds that
approximately 110 of its employees will be involved in the solicitation of
proxies by The Altman Group on behalf of the Funds and certain funds not part of
this Proxy Statement. The Adviser estimates that the total fees payable to The
Altman Group with respect to solicitation on behalf of all funds in the fund
complex, including the Funds and certain funds not part of this Proxy Statement,
will be approximately $700,000.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SHAREHOLDER MEETING TO BE HELD ON JANUARY 12, 2010
This Proxy Statement is available on the Internet at [o].
OTHER MATTERS
The management of the Funds 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 with respect to a Fund
will necessitate adjournment of the meeting for such Fund. In the event that a
quorum is present at the Meeting with respect to a Fund but sufficient votes to
approve the Proposal by such Fund 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 such Fund 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 of a
Fund 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 applicable 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/ [o]
[o]
on behalf of the Board of Trustees
of each Fund
November [o], 2009
15
APPENDIX A
OUTSTANDING SHARES
The table below sets forth the number of shares outstanding of each Fund, as of
the close of business on the Record Date.
-------------------------------- ------------------- --------------------
Fund Common Shares Preferred Shares
-------------------------------- ------------------- --------------------
AGC..............................[ ] [ ]
-------------------------------- ------------------- --------------------
LCM .............................[ ] N/A
-------------------------------- ------------------- --------------------
A-1
APPENDIX B
PRINCIPAL SHAREHOLDERS
As of the Record Date, to the knowledge of the Funds, no person beneficially
owned more than 5% of the voting securities of any class of securities of either
Fund, except as set forth below.
------------------------- ------------------------------------- -------------------- ------------------ ----------------
FUND SHAREHOLDER NAME AND ADDRESS CLASS OF SHARES SHARE HOLDINGS PERCENTAGE
---- ---------------------------- --------------- -------------- -----------
OWNED
------------------------- ------------------------------------- -------------------- ------------------ ----------------
AGC.................. [ ] [ ] [ ] [ ]
------------------------- ------------------------------------- -------------------- ------------------ ----------------
LCM.................. [ ] [ ] [ ] [ ]
------------------------- ------------------------------------- -------------------- ------------------ ----------------
B-1
APPENDIX C
ADVISORY AGREEMENTS
Dates, Approvals and Fee Rates
------------------------- -------------- --------------- --------------- --------------- -------------- ------------- ------------
DATE PRIOR
ADVISORY
DATE PRIOR AGREEMENT DATE INTERIM DATE NEW
DATE OF ADVISORY LAST ADVISORY ADVISORY
PRIOR AGREEMENT SUBMITTED FOR AGREEMENT AGREEMENT
ADVISORY LAST APPROVED SHAREHOLDER APPROVED BY APPROVED BY ADVISORY FEE CAP OR
AGREEMENT BY THE BOARD APPROVAL THE BOARD THE BOARD FEE RATE(1) WAIVER
FUND --------- --------- -------- --------- --------- -------- ------
------------------------- -------------- --------------- --------------- --------------- -------------- ------------- ------------
AGC................... 5/24/07 3/31/09 5/20/07 9/29/09 9/29/09 0.40% N/A
------------------------- -------------- --------------- --------------- --------------- -------------- ------------- ------------
LCM .................. 1/12/05 3/31/09 1/12/05 9/29/09 9/29/09 0.49% N/A
------------------------- -------------- --------------- --------------- --------------- -------------- ------------- ------------
(1) The Advisory Fee Rate set forth in the table above is the advisory fee
rate paid by each Fund pursuant to such Fund's Prior Advisory
Agreement, Interim Advisory Agreement and New Advisory Agreement. For
each Fund, the advisory fee rate is applied to the same asset base
pursuant to such Fund's Prior Advisory Agreement, Interim Advisory
Agreement and New Advisory Agreement.
C-1
APPENDIX D
FEES PAID TO THE ADVISER AND AFFILIATES
The following table indicates amounts paid by each Fund to its Adviser
or an affiliate of the Adviser and commission paid to Affiliated Brokers during
the Fund's last fiscal year.
------------------------- ----------------- ----------------- ------------------ -------------------------
PERCENTAGE OF FUND'S
ADVISORY FEE AGGREGATE AGGREGATE BROKERAGE
(AFTER WAIVERS BROKERAGE COMMISSION PAID TO
AND COMMISSIONS PAID AFFILIATED BROKERS
REIMBURSEMENTS, ADMINISTRATION TO AFFILIATED (IDENTIFY BROKER AND
FUND IF ANY) ($) FEE ($)(1) BROKERS ($) RELATIONSHIP)
----------- ---------- ----------- -------------
------------------------- ----------------- ----------------- ------------------ -------------------------
AGC................. 2,558,038 143,032 0 0.00%
------------------------- ----------------- ----------------- ------------------ -------------------------
LCM................. 1,081,183 66,260 0 0.00%
------------------------- ----------------- ----------------- ------------------ -------------------------
(1) Paid to Claymore Advisors, LLC, unless otherwise noted.
D-1
APPENDIX E
AFFILIATED OFFICERS
The following table identifies each person who serves as an officer of
the Funds who is a officer, employee or equity owner of the Adviser and lists
the Funds for which such person serves as an officer.
----------------------------- ------------------------ ------------
AFFILIATED ENTITY NAME FUND(S)
----------------------------- ------------------------ ------------
Adviser Steven M. Hill AGC, LCM
----------------------------- ------------------------ ------------
E-1
APPENDIX F
FUND DEADLINES FOR SHAREHOLDER PROPOSALS
The following table shows the dates by which (i) shareholder proposals
intended for inclusion in a Fund's proxy statement in connection with each
Fund's next scheduled annual meeting of shareholders pursuant to Rule 14a-8
under the Exchange Act must be received by such Fund at each Fund's principal
executive offices and (ii) shareholder proposals made outside of Rule 14a-8
under the Exchange Act must be received by such Fund at each Fund's principal
executive offices, including the deadline to be considered "timely" within the
meaning of Rule 14a-4(c).
--------------------------------------- --------------------------- ----------------------------------------------------
DEADLINE FOR PROPOSALS OUTSIDE 14A-8
FUND RULE 14A-8 PROPOSALS NOT EARLIER THAN NOR LATER THAN(1)
--------------------------------------- --------------------------- ---------------------------- -----------------------
AGC.............................. April 30, 2010 June 11, 2010 July 14, 2010
--------------------------------------- --------------------------- ---------------------------- -----------------------
LCM.............................. April 30, 2010 June 11, 2010 July 14, 2010
--------------------------------------- --------------------------- ---------------------------- -----------------------
(1) Deadline by which shareholder proposals made outside of Rule 14a-8
under the Exchange Act must be received by each Fund at such Fund's
principal executive offices in order to be considered "timely" within
the meaning of Rule 14a-4(c).
The proper submission of a shareholder proposal does not guarantee that
it will be included in the Fund's proxy materials or presented at a shareholder
meeting. Shareholder proposals are subject to the requirements of applicable law
and the applicable Fund's Declaration of Trust and Bylaws.
F-1
APPENDIX G
FORMS OF NEW ADVISORY AGREEMENTS
INDEX
PAGE
LCM Form of New Advisory Agreement ................................... G-2
AGC Form of New Advisory Agreement ................................... G-12
G-1
ADVENT/CLAYMORE ENHANCED GROWTH & INCOME FUND FORM OF NEW ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement"), dated as of [ ],
2010, between Advent/Claymore Enhanced Growth & Income Fund, a Delaware
statutory trust (the "Trust"), and Claymore Advisors, LLC, a Delaware limited
liability company (the "Advisor").
WHEREAS, the Advisor has agreed to furnish investment advisory services
and certain administrative services to the Trust, a closed-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, the Advisor is registered as a registered investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act");
WHEREAS, this Agreement has been approved in accordance with the
provisions of the 1940 Act, and the Advisor is willing to furnish such services
upon the terms and conditions herein set forth;
WHEREAS, the Advisor will delegate its duties and obligations under
Section 2 hereof to Advent Capital Management, LLC, the Trust's Investment
Manager ("Advent"), pursuant to an investment management agreement among the
Advisor, Advent and the Trust, dated the date hereof;
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 Advisor 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 ADVISOR 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
"Board"), the Advisor is hereby appointed as the Trust's agent and
attorney-in-fact with authority to negotiate, execute and deliver all documents
and agreements on behalf of the Trust and to do or take all related acts, with
the power of substitution, and 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
G-2
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 Advisor may delegate some or all of its rights, powers, duties and
obligations under this Agreement to one or more sub-investment advisers or
investment managers, including, without limitation, Advent; 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 Advisor 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 ADVISOR WITH RESPECT TO THE ADMINISTRATION
OF THE TRUST. The Advisor 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 Advisor agrees to provide the following
administrative services:
(a) Reply to requests for information concerning the Trust from
shareholders or prospective shareholders, brokers or the public;
(b) Aid in the secondary market support of the Trust through regular
written and oral communications with the Trust's New York Stock
Exchange specialist, the closed-end fund analyst community and
various information providers specializing in the dissemination of
closed-end fund information;
(c) Prepare all reports required to be sent to the Trust's
shareholders under the 1940 Act, and assist in the printing and
dissemination of such reports to such shareholders, each with the
assistance of the Trust;
(d) Prepare all reports required to be filed with the Securities and
Exchange Commission (the "SEC") on Form N-SAR or Form N-CSR, or
such other forms as the SEC may substitute for Form N-SAR or Form
N-CSR, and file such completed forms with the SEC, each with the
assistance of the Trust;
(e) Disseminate to shareholders of the Trust the Trust's proxy
materials and assist in the filing of such materials with the
Trust's regulators, and oversee the tabulation of proxies by the
Trust's transfer agent, each with the assistance of the Trust;
(f) Analyze the amounts available for distribution as dividends and
distributions to be paid by the Trust to its shareholders and
prepare materials relevant to the Trust's Automatic Dividend
Reinvestment Plan, each with the assistance of the Trust;
(g) Establish and maintain a toll-free number for sales support and
marketing requests on an ongoing basis;
(h) Produce (with the assistance of the Trust) marketing and road-show
materials for the offerings of the Trust's common shares and
preferred shares of beneficial interest;
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(i) Develop and maintain a website for the Trust which will provide
quarterly updates, daily and month-end net asset value and monthly
distribution notifications, as well as hyperlinks to the websites
of the Advisor and Advent, as applicable, for added information;
(j) Assist Advent in devising trading strategies that might by used by
the Trust and communicate to the investment community any changes
made to the Trust's trading strategies;
(k) Assist in the provision of materials regarding the Trust to the
investment community and current and prospective investors;
(l) Assist in the review of materials made available to shareholders
and prospective investors to assure compliance with applicable
laws, rules and regulations;
(m) Assist in the filing of advertisements and sales materials,
including information on the Trust's website, as necessary, with
the SEC, the New York Stock Exchange, the National Association of
Securities Dealers and any regulatory bodies having jurisdiction
over the Trust and its operations;
(n) Assist in the dissemination of the Trust's net asset value, market
price and discount;
(o) Host analyst meetings as appropriate;
(p) Provide persons to serve as officers and trustees of the Trust, as
the Trust may request;
(q) Maintain ongoing contact with brokers in branch offices whose
clients hold Trust shares or whose clients may have an interest in
acquiring Trust shares, including providing, among other things,
progress reports on the Trust, dividend announcements and
performance updates;
(r) Assist in the drafting of press releases to the public;
(s) Make such reports and recommendations to the Board as the Board
reasonably requests or deems appropriate; and
(t) Provide such other services as the Trust, Advent and the Advisor
may mutually agree upon from time to time.
All services are to be furnished through the medium of any directors, officers
or employees of the Advisor or its affiliates as the Advisor deems appropriate
in order to fulfill its obligations hereunder. The Trust will reimburse the
Advisor 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 Advisor:
G-4
(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 Advisers Act and all applicable Rules and Regulations of the
SEC; (ii) any other applicable provision of law; (iii) the
provisions of the Amended and Restated Agreement and Declaration
of Trust of the Trust and Amended and Restated By-Laws of the
Trust, as such documents may be amended from time to time; (iv)
the investment objectives, policies and restrictions of the Trust
as set forth in the Trust's Registration Statement on Form N-2 (as
currently in effect and as they may be amended or supplemented
from time to time); and (v) any policies and determinations of the
Board;
(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 Advisor
will attempt to obtain the best price and the most favorable
execution of its orders. In placing orders, the Advisor 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 Advisor may
select brokers on the basis of the research, statistical and
pricing services they provide to the Trust and other clients of
the Advisor. 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 Advisor 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 Advisor determines in good faith that such
commission is reasonable in terms either of the transaction or the
overall responsibility of the Advisor 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 Advisor, 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,
Advent, 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 or Advent, as applicable, which approval
shall not be unreasonably withheld and may not be withheld where
the Advisor 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 or Advent, as applicable.
5. SERVICES NOT EXCLUSIVE. Nothing in this Agreement shall prevent the
Advisor 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
Advisor 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
G-5
it or they may be acting; provided, however, that the Advisor 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 Advisor 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 or Advent any such records upon the Trust's or
Advent's request. The Advisor further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
7. AGENCY CROSS TRANSACTIONS. From time to time, the Advisor 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
Advisor'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 Advisor 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 Advisor is making the investment decision (as
opposed to a brokerage client who makes his own investment decisions), and the
Advisor or an affiliate is receiving commissions from both sides of the
transaction, there is a potential conflicting division of loyalties and
responsibilities on the Advisor's part regarding the advisory client. The SEC
has adopted a rule under the Advisers Act, which permits the Advisor 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 Advisor 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 Advisor and Advent.
8. EXPENSES. During the term of this Agreement, the Advisor 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 Advisor.
9. COMPENSATION OF THE ADVISOR.
(a) The Trust agrees to pay to the Advisor and the Advisor agrees to
accept as full compensation for all services rendered by the
Advisor as such, a monthly fee (the "Investment Advisory Fee"),
payable in arrears, at an annual rate equal to 0.49% of the
average daily value of the Trust's Managed Assets. "Managed
Assets" means the total assets of the Trust (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). 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
G-6
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 Board of the Trust for calculating the value of
the Trust's assets or delegating such calculations to third
parties. The Advisor will monitor the net asset calculation of any
third party making such calculation.
10. INDEMNITY.
(a) The Trust hereby agrees to indemnify the Advisor, and each of the
Advisor's directors, officers, employees, agents, associates and
controlling persons and the directors, partners, members,
officers, employees and agents thereof (including any individual
who serves at the Advisor's request as director, officer, partner,
member, trustee or the like of another entity) (each such person
being an "Indemnitee") against any liabilities and expenses,
including amounts paid in satisfaction of judgments, in compromise
or as fines and penalties, and counsel fees (all as provided in
accordance with applicable state law) reasonably incurred by such
Indemnitee in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal,
before any court or administrative or investigative body in which
such Indemnitee may be or may have been involved as a party or
otherwise or with which such Indemnitee may be or may have been
threatened, while acting in any capacity set forth herein or
thereafter by reason of such Indemnitee having acted in any such
capacity, except with respect to any matter as to which such
Indemnitee shall have been adjudicated not to have acted in good
faith in the reasonable belief that such Indemnitee's action was
in the best interest of the Trust and furthermore, in the case of
any criminal proceeding, so long as such Indemnitee had no
reasonable cause to believe that the conduct was unlawful;
provided, however, that (1) no Indemnitee shall be indemnified
hereunder against any liability to the Trust or its shareholders
or any expense of such Indemnitee arising by reason of (i) willful
misfeasance, (ii) bad faith, (iii) gross negligence or (iv)
reckless disregard of the duties involved in the conduct of such
Indemnitee's position (the conduct referred to in such clauses (i)
through (iv) being sometimes referred to herein as "disabling
conduct"), (2) as to any matter disposed of by settlement or a
compromise payment by such Indemnitee, pursuant to a consent
decree or otherwise, no indemnification either for said payment or
for any other expenses shall be provided unless there has been a
determination that such settlement or compromise is in the best
interests of the Trust and that such Indemnitee appears to have
acted in good faith in the reasonable belief that such
Indemnitee's action was in the best interest of the Trust and did
not involve disabling conduct by such Indemnitee and (3) with
respect to any action, suit or other proceeding voluntarily
prosecuted by any Indemnitee as plaintiff, indemnification shall
be mandatory only if the prosecution of such action, suit or other
proceeding by such Indemnitee was authorized by a majority of the
full Board.
G-7
(b) The Trust shall make advance payments in connection with the
expenses of defending any action with respect to which
indemnification might be sought hereunder if the Trust receives a
written affirmation of the Indemnitee's good faith belief that the
standard of conduct necessary for indemnification has been met and
a written undertaking to reimburse the Trust unless it is
subsequently determined that such Indemnitee is entitled to such
indemnification and if the trustees of the Trust determine that
the facts then known to them would not preclude indemnification.
In addition, at least one of the following conditions must be met:
(i) the Indemnitee shall provide a security for such
Indemnitee-undertaking; (ii) the Trust shall be insured against
losses arising by reason of any lawful advance; or (iii) a
majority 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") 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 Indemnitee
ultimately will be found entitled to indemnification.
(c) All determinations with respect to indemnification hereunder shall
be made: (i) by a final decision on the merits by a court or other
body before whom the proceeding was brought that such Indemnitee
is not liable or is not liable by reason of disabling conduct; or
(ii) in the absence of such a decision, by (A) a majority vote of
a quorum of the Disinterested Non-Party Trustees of the Trust, or
(B) if such a quorum is not obtainable or, even if obtainable, if
a majority vote of such quorum so directs, independent legal
counsel in a written opinion. All determinations that advance
payments in connection with the expense of defending any
proceeding shall be authorized shall be made in accordance with
the immediately preceding clause (ii) above.
(d) The rights accruing to any Indemnitee under these provisions shall
not exclude any other right to which such Indemnitee may be
lawfully entitled.
11. LIMITATION ON LIABILITY.
(a) The Advisor will not be liable for any error of judgment or
mistake of law or for any loss suffered by Advent 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) Notwithstanding anything to the contrary contained in this
Agreement, the parties hereto acknowledge and agree that, as
provided in Section 5.1 of Article V of the Amended and Restated
Agreement and Declaration of Trust of the Trust, this Agreement is
executed by the Trustees and/or officers of the Trust, not
individually but as such Trustees and/or officers of the Trust,
and the obligations hereunder are not binding upon any of the
Trustees or shareholders individually but bind only the estate of
the Trust.
G-8
12. DURATION AND TERMINATION. This Agreement shall become effective as
of the date hereof and, unless sooner terminated by the Trust or Advisor as
provided herein, shall continue in effect for a period of two years. 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 Board 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 Advisor 60 days' notice (which notice may be waived by
the Advisor), 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 Advisor 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.
13. 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; all notices sent by the Advisor to
the Trust shall also be sent to Advent at the address that it may designate from
time to time.
14. 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.
15. 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.
16. USE OF THE NAME CLAYMORE. The Advisor 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 Advisor, any successor
thereto or any affiliate thereof as the investment advisor 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 Advisor and any of its affiliates. The
Advisor may require the Trust to cease using "Claymore" in the name of the Trust
if the Trust ceases to employ, for any reason, the Advisor, any successor
thereto or any affiliate thereof as investment advisor of the Trust.
17. 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
G-9
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.
18. 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.
G-10
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.
ADVENT/CLAYMORE ENHANCED GROWTH & INCOME FUND
By:
-----------------------------------------
Name: Rodd Baxter
Title: Secretary
CLAYMORE ADVISORS, LLC
By:
-----------------------------------------
Name:
Title:
G-11
ADVENT/CLAYMORE GLOBAL CONVERTIBLE SECURITIES & INCOME FUND
FORM OF NEW ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement"), dated as of [ ],
2010, between Advent/Claymore Global Convertible Securities & Income Fund, a
Delaware statutory trust (the "Trust"), and Claymore Advisors, LLC, a Delaware
limited liability company (the "Advisor").
WHEREAS, the Advisor has agreed to furnish investment advisory services
and certain administrative services to the Trust, a closed-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, the Advisor is registered as a registered investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act");
WHEREAS, this Agreement has been approved in accordance with the
provisions of the 1940 Act, and the Advisor is willing to furnish such services
upon the terms and conditions herein set forth;
WHEREAS, the Advisor will delegate its duties and obligations under
Section 2 hereof to Advent Capital Management, LLC, the Trust's Investment
Manager ("Advent"), pursuant to an investment management agreement among the
Advisor, Advent and the Trust, dated the date hereof;
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 Advisor 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 ADVISOR 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
"Board"), the Advisor is hereby appointed as the Trust's agent and
attorney-in-fact with authority to negotiate, execute and deliver all documents
and agreements on behalf of the Trust and to do or take all related acts, with
the power of substitution, and 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
G-12
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 Advisor may delegate some or all of its rights, powers, duties and
obligations under this Agreement to one or more sub-investment advisers or
investment managers, including, without limitation, Advent; 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 Advisor 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 ADVISOR WITH RESPECT TO THE ADMINISTRATION
OF THE TRUST. The Advisor 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 Advisor agrees to provide the following
administrative services:
(a) Reply to requests for information concerning the Trust from
shareholders or prospective shareholders, brokers or the public;
(b) Aid in the secondary market support of the Trust through regular
written and oral communications with the Trust's New York Stock
Exchange specialist, the closed-end fund analyst community and
various information providers specializing in the dissemination of
closed-end fund information;
(c) Prepare all reports required to be sent to the Trust's
shareholders under the 1940 Act, and assist in the printing and
dissemination of such reports to such shareholders, each with the
assistance of the Trust;
(d) Prepare all reports required to be filed with the Securities and
Exchange Commission (the "SEC") on Form N-SAR or Form N-CSR, or
such other forms as the SEC may substitute for Form N-SAR or Form
N-CSR, and file such completed forms with the SEC, each with the
assistance of the Trust;
(e) Disseminate to shareholders of the Trust the Trust's proxy
materials and assist in the filing of such materials with the
Trust's regulators, and oversee the tabulation of proxies by the
Trust's transfer agent, each with the assistance of the Trust;
(f) Analyze the amounts available for distribution as dividends and
distributions to be paid by the Trust to its shareholders and
prepare materials relevant to the Trust's Automatic Dividend
Reinvestment Plan, each with the assistance of the Trust;
(g) Establish and maintain a toll-free number for sales support and
marketing requests on an ongoing basis;
(h) Produce (with the assistance of the Trust) marketing and road-show
materials for the offerings of the Trust's common shares and
preferred shares of beneficial interest;
G-13
(i) Develop and maintain a website for the Trust which will provide
quarterly updates, daily and month-end net asset value and monthly
distribution notifications, as well as hyperlinks to the websites
of the Advisor and Advent, as applicable, for added information;
(j) Assist Advent in devising trading strategies that might by used by
the Trust and communicate to the investment community any changes
made to the Trust's trading strategies;
(k) Assist in the provision of materials regarding the Trust to the
investment community and current and prospective investors;
(l) Assist in the review of materials made available to shareholders
and prospective investors to assure compliance with applicable
laws, rules and regulations;
(m) Assist in the filing of advertisements and sales materials,
including information on the Trust's website, as necessary, with
the SEC, the New York Stock Exchange, the National Association of
Securities Dealers and any regulatory bodies having jurisdiction
over the Trust and its operations;
(n) Assist in the dissemination of the Trust's net asset value, market
price and discount;
(o) Host analyst meetings as appropriate;
(p) Provide persons to serve as officers and trustees of the Trust, as
the Trust may request;
(q) Maintain ongoing contact with brokers in branch offices whose
clients hold Trust shares or whose clients may have an interest in
acquiring Trust shares, including providing, among other things,
progress reports on the Trust, dividend announcements and
performance updates;
(r) Assist in the drafting of press releases to the public;
(s) Make such reports and recommendations to the Board as the Board
reasonably requests or deems appropriate; and
(t) Provide such other services as the Trust, Advent and the Advisor
may mutually agree upon from time to time.
All services are to be furnished through the medium of any directors, officers
or employees of the Advisor or its affiliates as the Advisor deems appropriate
in order to fulfill its obligations hereunder. The Trust will reimburse the
Advisor 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 Advisor:
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(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 Advisers Act 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 of the Trust
and By-Laws of the Trust, as such documents may be amended from
time to time; (iv) the investment objectives, policies and
restrictions of the Trust as set forth in the Trust's Registration
Statement on Form N-2 (as currently in effect and as they may be
amended or supplemented from time to time); and (v) any policies
and determinations of the Board;
(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 Advisor
will attempt to obtain the best price and the most favorable
execution of its orders. In placing orders, the Advisor 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 Advisor may
select brokers on the basis of the research, statistical and
pricing services they provide to the Trust and other clients of
the Advisor. 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 Advisor 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 Advisor determines in good faith that such
commission is reasonable in terms either of the transaction or the
overall responsibility of the Advisor 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 Advisor, 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,
Advent, 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 or Advent, as applicable, which approval
shall not be unreasonably withheld and may not be withheld where
the Advisor 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 or Advent, as applicable.
5. SERVICES NOT EXCLUSIVE. Nothing in this Agreement shall prevent the
Advisor 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
Advisor 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
G-15
it or they may be acting; provided, however, that the Advisor 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 Advisor 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 or Advent any such records upon the Trust's or
Advent's request. The Advisor further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
7. AGENCY CROSS TRANSACTIONS. From time to time, the Advisor 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
Advisor'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 Advisor 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 Advisor is making the investment decision (as
opposed to a brokerage client who makes his own investment decisions), and the
Advisor or an affiliate is receiving commissions from both sides of the
transaction, there is a potential conflicting division of loyalties and
responsibilities on the Advisor's part regarding the advisory client. The SEC
has adopted a rule under the Advisers Act, which permits the Advisor 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 Advisor 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 Advisor and Advent.
8. EXPENSES. During the term of this Agreement, the Advisor 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 Advisor.
9. COMPENSATION OF THE ADVISOR.
(a) The Trust agrees to pay to the Advisor and the Advisor agrees to
accept as full compensation for all services rendered by the
Advisor as such, a monthly fee (the "Investment Advisory Fee"),
payable in arrears, at an annual rate equal to 0.40% of the
average daily value of the Trust's Managed Assets. "Managed
Assets" means the total assets of the Trust (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). 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
G-16
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 Board of the Trust for calculating the value of
the Trust's assets or delegating such calculations to third
parties. The Advisor will monitor the net asset calculation of any
third party making such calculation.
10. INDEMNITY.
(a) The Trust hereby agrees to indemnify the Advisor, and each of the
Advisor's directors, officers, employees, agents, associates and
controlling persons and the directors, partners, members,
officers, employees and agents thereof (including any individual
who serves at the Advisor's request as director, officer, partner,
member, trustee or the like of another entity) (each such person
being an "Indemnitee") against any liabilities and expenses,
including amounts paid in satisfaction of judgments, in compromise
or as fines and penalties, and counsel fees (all as provided in
accordance with applicable state law) reasonably incurred by such
Indemnitee in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal,
before any court or administrative or investigative body in which
such Indemnitee may be or may have been involved as a party or
otherwise or with which such Indemnitee may be or may have been
threatened, while acting in any capacity set forth herein or
thereafter by reason of such Indemnitee having acted in any such
capacity, except with respect to any matter as to which such
Indemnitee shall have been adjudicated not to have acted in good
faith in the reasonable belief that such Indemnitee's action was
in the best interest of the Trust and furthermore, in the case of
any criminal proceeding, so long as such Indemnitee had no
reasonable cause to believe that the conduct was unlawful;
provided, however, that (1) no Indemnitee shall be indemnified
hereunder against any liability to the Trust or its shareholders
or any expense of such Indemnitee arising by reason of (i) willful
misfeasance, (ii) bad faith, (iii) gross negligence or (iv)
reckless disregard of the duties involved in the conduct of such
Indemnitee's position (the conduct referred to in such clauses (i)
through (iv) being sometimes referred to herein as "disabling
conduct"), (2) as to any matter disposed of by settlement or a
compromise payment by such Indemnitee, pursuant to a consent
decree or otherwise, no indemnification either for said payment or
for any other expenses shall be provided unless there has been a
determination that such settlement or compromise is in the best
interests of the Trust and that such Indemnitee appears to have
acted in good faith in the reasonable belief that such
Indemnitee's action was in the best interest of the Trust and did
not involve disabling conduct by such Indemnitee and (3) with
respect to any action, suit or other proceeding voluntarily
prosecuted by any Indemnitee as plaintiff, indemnification shall
be mandatory only if the prosecution of such action, suit or other
proceeding by such Indemnitee was authorized by a majority of the
full Board.
G-17
(b) The Trust shall make advance payments in connection with the
expenses of defending any action with respect to which
indemnification might be sought hereunder if the Trust receives a
written affirmation of the Indemnitee's good faith belief that the
standard of conduct necessary for indemnification has been met and
a written undertaking to reimburse the Trust unless it is
subsequently determined that such Indemnitee is entitled to such
indemnification and if the trustees of the Trust determine that
the facts then known to them would not preclude indemnification.
In addition, at least one of the following conditions must be met:
(i) the Indemnitee shall provide a security for such
Indemnitee-undertaking; (ii) the Trust shall be insured against
losses arising by reason of any lawful advance; or (iii) a
majority 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") 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 Indemnitee
ultimately will be found entitled to indemnification.
(c) All determinations with respect to indemnification hereunder shall
be made: (i) by a final decision on the merits by a court or other
body before whom the proceeding was brought that such Indemnitee
is not liable or is not liable by reason of disabling conduct; or
(ii) in the absence of such a decision, by (A) a majority vote of
a quorum of the Disinterested Non-Party Trustees of the Trust, or
(B) if such a quorum is not obtainable or, even if obtainable, if
a majority vote of such quorum so directs, independent legal
counsel in a written opinion. All determinations that advance
payments in connection with the expense of defending any
proceeding shall be authorized shall be made in accordance with
the immediately preceding clause (ii) above.
(d) The rights accruing to any Indemnitee under these provisions shall
not exclude any other right to which such Indemnitee may be
lawfully entitled.
11. LIMITATION ON LIABILITY.
(a) The Advisor will not be liable for any error of judgment or
mistake of law or for any loss suffered by Advent 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) Notwithstanding anything to the contrary contained in this
Agreement, the parties hereto acknowledge and agree that, as
provided in Section 5.1 of Article V of the Agreement and
Declaration of Trust of the Trust, this Agreement is executed by
the Trustees and/or officers of the Trust, not individually but as
such Trustees and/or officers of the Trust, and the obligations
hereunder are not binding upon any of the Trustees or shareholders
individually but bind only the estate of the Trust.
G-18
12. DURATION AND TERMINATION. This Agreement shall become effective as
of the date hereof and, unless sooner terminated by the Trust or Advisor as
provided herein, shall continue in effect for a period of two years. 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 Board 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 Advisor 60 days' notice (which notice may be waived by
the Advisor), 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 Advisor 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.
13. 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; all notices sent by the Advisor to
the Trust shall also be sent to Advent at the address that it may designate from
time to time.
14. 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.
15. 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.
16. USE OF THE NAME CLAYMORE. The Advisor 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 Advisor, any successor
thereto or any affiliate thereof as the investment advisor 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 Advisor and any of its affiliates. The
Advisor may require the Trust to cease using "Claymore" in the name of the Trust
if the Trust ceases to employ, for any reason, the Advisor, any successor
thereto or any affiliate thereof as investment advisor of the Trust.
17. 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
G-19
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.
18. 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.
G-20
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.
ADVENT/CLAYMORE GLOBAL CONVERTIBLE SECURITIES
& INCOME FUND
By:
-----------------------------------------
Name: Rodd Baxter
Title: Secretary
CLAYMORE ADVISORS, LLC
By:
-----------------------------------------
Name:
Title:
G-21
Logo
CLAYMORE(SM)
PROXY CARD FOR
ADVENT/CLAYMORE ENHANCED GROWTH & INCOME FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS - JANUARY 12, 2010
SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
A special meeting of shareholders of Advent/Claymore Enhanced Growth & Income
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 [o], Central Time
(the "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 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
ADVENT/CLAYMORE ENHANCED GROWTH & INCOME FUND SHAREHOLDER MEETING 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
ADVENT/CLAYMORE ENHANCED GROWTH & INCOME FUND
Proxy for Special 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.
ADVENT/CLAYMORE ENHANCED GROWTH & INCOME FUND
CONTROL NUMBER
123456789123
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 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.
THANK YOU FOR VOTING
Logo
CLAYMORE(SM)
PROXY CARD FOR
ADVENT/CLAYMORE GLOBAL CONVERTIBLE SECURITIES & INCOME FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS - JANUARY 12, 2010
SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
A special meeting of shareholders of Advent/Claymore Global Convertible
Securities & Income 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 [o], Central Time (the "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 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
ADVENT/CLAYMORE GLOBAL CONVERTIBLE SECURITIES & INCOME FUND SHAREHOLDER MEETING
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
ADVENT/CLAYMORE GLOBAL CONVERTIBLE SECURITIES & INCOME FUND
Proxy for Special 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.
ADVENT/CLAYMORE GLOBAL CONVERTIBLE SECURITIES & INCOME FUND
CONTROL NUMBER
123456789123
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 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.
THANK YOU FOR VOTING