SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant /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 Section 240.14a-12
Advent Claymore Convertible Securities and Income Fund
------------------------------------------------------
Advent/Claymore Enhanced Growth & Income Fund
-----------------------------------------------
(Name of Registrants as Specified in Their Charters)
-------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
/ / 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.
(1) Amount Previously Paid: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
2
[ADVENT AND CLAYMORE LOGOS]
ADVENT CLAYMORE CONVERTIBLE SECURITIES AND INCOME FUND (NYSE: AVK)
ADVENT/CLAYMORE ENHANCED GROWTH & INCOME FUND (NYSE: LCM)
1065 AVENUE OF THE AMERICAS, 31st FLOOR
NEW YORK, NEW YORK 10018
NOTICE OF JOINT ANNUAL MEETING OF
SHAREHOLDERS
TO BE HELD ON SEPTEMBER 20, 2005
Notice is hereby given to the shareholders of each of Advent Claymore
Convertible Securities and Income Fund ("AVK") and Advent/Claymore Enhanced
Growth & Income Fund ("LCM") (collectively, the "Trusts") that the Joint Annual
Meeting of Shareholders of the Trusts (the "Annual Meeting") will be held at the
offices of the Trusts' counsel, Skadden, Arps, Slate, Meagher & Flom LLP, 4
Times Square, New York, New York 10036 on Tuesday, September 20, 2005, at 12:30
p.m. (Eastern time). The Annual Meeting is being held for the following
purposes:
MATTERS TO BE VOTED UPON BY ALL SHAREHOLDERS
1. To amend the Declaration of Trust of each Trust to change the maximum
number of Trustees allowed on each Trust's Board of Trustees from
seven to nine;
2. For LCM, to elect four Trustees, each to hold office for the term
indicated in the attached Proxy Statement and until their successors
shall have been elected and qualified;
3. For AVK, to elect two Trustees, each to hold office for the term
indicated in the attached Proxy Statement and until their successors
shall have been elected and qualified;
4. To transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
MATTERS TO BE VOTED UPON ONLY BY HOLDERS OF AUCTION MARKET PREFERRED SHARES
OF AVK
1. To elect two Trustees representing holders of AVK's Auction Market
Preferred Shares, each to hold office for the term indicated in the
attached Proxy Statement and until their successors shall have been
elected and qualified; and
2. To transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
THE BOARD OF TRUSTEES (THE "BOARD") OF EACH TRUST, INCLUDING THE INDEPENDENT
TRUSTEES, UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE PROPOSALS.
The Board of Trustees of each Trust has fixed the close of business on
August 15, 2005 as the record date for the determination of shareholders
entitled to notice of, and to vote at, the Annual Meeting. We urge you to mark,
sign, date, and mail the enclosed proxy or proxies in the postage-paid envelope
provided or record your voting instructions via telephone or the internet so you
will be represented at the Annual Meeting.
By order of the
Board of each Trust
Rodd Baxter, Secretary of each Trust
New York, New York
September 2, 2005
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING IN PERSON
OR BY PROXY. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE VOTE
BY TELEPHONE, INTERNET OR MAIL. IF VOTING BY MAIL PLEASE SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE. IF YOU ATTEND
THE ANNUAL MEETING AND WISH TO VOTE IN PERSON, YOU WILL BE ABLE TO DO SO AND
YOUR VOTE AT THE ANNUAL MEETING WILL REVOKE ANY PROXY YOU MAY HAVE SUBMITTED.
MERELY ATTENDING THE MEETING, HOWEVER, WILL NOT REVOKE ANY PREVIOUSLY GIVEN
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.
2
The information in this Proxy Statement is not complete and may be changed.
Subject to Completion -- Dated August 15, 2005
ADVENT CLAYMORE CONVERTIBLE SECURITIES AND INCOME FUND (NYSE: AVK)
ADVENT/CLAYMORE ENHANCED GROWTH & INCOME FUND (NYSE: LCM)
PROXY STATEMENT
FOR
JOINT ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 20, 2005
This document will give you the information you need to vote on the matters
listed on the accompanying Notice of Joint Annual Meeting of Shareholders
("Notice of Joint Annual Meeting"). Much of the information in this joint proxy
statement ("Proxy Statement") is required under rules of the Securities and
Exchange Commission ("SEC"); some of it is technical. If there is anything you
don't understand, please contact us at our toll-free number, 866.274.2227.
This Proxy Statement is furnished in connection with the solicitation by
the Board of Trustees (the "Board") of each Trust of proxies to be voted at the
Joint Annual Meeting of Shareholders of the Trusts to be held on Tuesday,
September 20, 2005, and any adjournment or postponement thereof (the "Annual
Meeting"). The Annual Meeting will be held at the offices of the Trusts'
counsel, Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York, New
York 10036, on September 20, 2005, at 12:30 p.m. (Eastern time). This Proxy
Statement and the enclosed proxy card(s) ("proxy") are first being sent to the
Trusts' shareholders on or about September 2, 2005.
* WHY IS A SHAREHOLDER MEETING BEING HELD?
Because the common shares of each Trust are listed on the New York Stock
Exchange ("NYSE"), which requires each Trust to hold an annual meeting of
shareholders.
* WHAT PROPOSALS (EACH A "PROPOSAL," AND COLLECTIVELY THE "PROPOSALS") WILL
BE VOTED ON?
A. Shareholders of each Trust are being asked to approve an amendment to
the Declaration of Trust of each such Trust to change the maximum
number of Trustees on each Trust's Board from seven to nine ("Proposal
A").
B. Shareholders of LCM are being asked to elect four nominees to the
Board of LCM ("Proposal B").
C. Shareholders of AVK are being asked to elect two nominees to the Board
of AVK ("Proposal C").
D. Holders of AVK's Auction Market Preferred Shares are being asked to
elect two nominees to the Board of AVK ("Proposal D").
* WILL YOUR VOTE MAKE A DIFFERENCE?
YES! Your vote is important and could make a difference in the governance
of the Trust(s), no matter how many shares you own.
* WHO IS ASKING FOR YOUR VOTE?
The enclosed proxy is solicited by the Board of each Trust for use at the
Annual Meeting to be held on Tuesday, September 20, 2005, and, if the
Annual Meeting is adjourned or postponed, at any later meetings, for the
purposes stated in the Notice of Annual Meeting. The Notice of Annual
Meeting, the proxy and this Proxy Statement are being mailed on or about
September 2, 2005.
* HOW DOES THE BOARD RECOMMEND THAT SHAREHOLDERS VOTE ON THE PROPOSALS?
The Board unanimously recommends that you vote "for" each Proposal on which
you are entitled to vote.
* WHO IS ELIGIBLE TO VOTE?
Shareholders of record of LCM at the close of business on August 15, 2005,
are entitled to be present and to vote on Proposal A (as it relates to LCM)
and Proposal B at the Annual Meeting or any adjournment or postponement
thereof. Shareholders of record of AVK at the close of business on August
15, 2005, are entitled to be present and to vote on Proposal A (as it
relates to AVK) and Proposal C at the Annual Meeting or any adjournment or
postponement thereof. Holders of record of Auction Market Preferred Shares
of AVK at the close of business on August 15, 2005, are entitled to be
present and to vote on Proposal D at the Annual Meeting or any adjournment
or postponement thereof. Each share is entitled to one vote on those
Proposals on which holders of those shares are entitled to vote. Shares
represented by duly executed proxies will be voted in accordance with your
instructions. If you sign the proxy, but don't fill in a vote, your shares
will be voted in accordance with your Board's recommendation. If any other
business is brought before your Trust's Annual Meeting, your shares will be
voted at your proxy's discretion unless you specify otherwise in your
proxy.
* WHY DOES THIS PROXY STATEMENT LIST TWO CLOSED-END FUNDS?
The Trusts have at least one similar proposal and it is cost-efficient to
have a joint proxy statement and one annual meeting. In the event that any
shareholder present at the Annual Meeting objects to the holding of a joint
meeting and moves for the adjournment of his or her Trust's meeting to a
time immediately after the Annual Meeting so that each Trust's meeting may
be held separately, the persons named as proxies will vote in favor of such
adjournment. Shareholders of each Trust will vote separately on the
respective Proposals relating to their Trust. In any event, an unfavorable
vote on any Proposal by the shareholders of one Trust will not affect the
implementation of such Proposal by the other Trust if the Proposal is
approved by the shareholders of that Trust.
* HOW MANY SHARES OF EACH TRUST WERE OUTSTANDING AS OF THE RECORD DATE?
At the close of business on August 15, 2005, AVK had common shares
outstanding and 11,000 Auction Market Preferred Shares outstanding and LCM
had common shares outstanding.
THE PROPOSALS
* PROPOSAL A: TO INCREASE THE MAXIMUM NUMBER OF TRUSTEES
The Declaration of Trust of each Trust currently permits a maximum of seven
(7) Trustees to serve on the Board of such Trust. Under recently enacted
rules under the Investment Company Act of 1940, as amended (the "1940 Act")
which are scheduled to take effect on January 6, 2006, at least 75% of the
Trustees of the Board of a registered investment company, such as the
Trusts, must not be "interested persons" of such registered investment
company as that term is defined in Section 2(a)(19) of the 1940 Act in
order for such Trust to rely upon certain exemptive rules under the 1940
Act. These exemptive rules are important for each Trust's day to day
operations. In order for each Trust to meet the 75% threshold described
above, the Board of each Trust has recommended that the Declaration of
Trust of each Trust be amended to increase the maximum size of the Board
from seven (7) Trustees to nine (9) Trustees. Assuming shareholders approve
the Proposals, each Trust will have eight (8) Trustees on its Board and the
Trustees of each Trust will have the flexibility to appoint a ninth Trustee
in the future if such Trustees determine that the appointment of a ninth
Trustee to the Board of such Trust would be in the best interest of such
Trust. Proxies cannot be voted for persons other than those named herein.
THE BOARD OF EACH TRUST, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL A.
* PROPOSALS B, C AND D: TO ELECT TRUSTEES
* WHO ARE THE NOMINEES FOR TRUSTEE?
4
ADVENT CLAYMORE CONVERTIBLE SECURITIES AND INCOME FUND (AVK)
The Trustees of AVK are classified into three classes of Trustees. Set
forth below are the current Class I Trustees, Class II Trustees and Class
III Trustees and the proposed classification of the Trustee nominees:
CLASS I TRUSTEES OF AVK
-Mr. Gerald L. Seizert and Mr. Derek Medina are the Class I Trustees of
AVK. It is currently anticipated that they will stand for re-election at
the Trusts' 2007 joint annual meeting of shareholders. Mr. Randall C.
Barnes+ is a nominee for election as a Class I Trustee of AVK and is
standing for election at the Annual Meeting.
CLASS II TRUSTEES OF AVK
-Mr. Michael A. Smart* and Mr. Ronald A. Nyberg* are the Class II Trustees
of AVK. They are standing for re-election at the Annual Meeting. Mr. Daniel
Black is a nominee for election as a Class II Trustee of AVK and is
standing for election at the Annual Meeting.
CLASS III TRUSTEES OF AVK
-Mr. Tracy V. Maitland and Mr. Nicholas Dalmaso are the Class III Trustees
of AVK. It is currently anticipated that they will stand for re-election at
the Trusts' 2006 joint annual meeting of shareholders.
----------
* Designated as Trustees representing the Trust's preferred
shareholders.
+ The election of Mr. Randall C. Barnes to the Board of AVK is
contingent upon the shareholders of AVK approving Proposal A, the approval
of which would increase the maximum number of Trustees permitted on the
Board of AVK and permit Mr. Randall C. Barnes to join the Board of AVK as a
Class I Trustee.
As indicated above, shareholders of AVK are being asked to elect the
following two nominees as Trustees of AVK at the Annual Meeting: Mr.
Randall C. Barnes as a Class I Trustee and Mr. Daniel Black as a Class II
Trustee. Holders of AVK's Auction Market Preferred Shares are being asked
to elect the following two Class II Trustees of AVK at the Annual Meeting:
Mr. Michael A. Smart and Mr. Ronald A. Nyberg. The holders of AVK's Auction
Market Preferred Shares will have equal voting rights (i.e., one vote per
share) and will vote together as a single class with respect to the
election of each of Mr. Michael A. Smart and Mr. Ronald A. Nyberg. The
holders of AVK's common shares and Auction Market Preferred Shares will
have equal voting rights (i.e., one vote per share) and will vote together
as a single class with respect to the election of Mr. Randall C. Barnes as
a Class I Trustee of AVK and Mr. Daniel Black as Class II Trustee of AVK.
Each Class II Trustee and the Class II trustee nominee of AVK, if elected,
will hold office for three years or until his successor shall have been
elected and qualified. If elected as a Class I Trustee, Mr. Daniel Black
will hold office until the Trusts' 2007 joint annual meeting of
shareholders or until his successor shall have been elected and qualified.
The other Trustees of AVK will continue to serve under their current terms
and will be elected at subsequent annual meetings of shareholders as
indicated above. Mr. Michael A. Smart and Mr. Ronald A. Nyberg are
currently Class II Trustees of AVK. Unless authority is withheld, it is the
intention of the persons named in the proxy to vote the proxy "FOR" the
election of the Class II Trustees named above, and "FOR" the Class I and
Class II Trustee nominees named above. Each Class II Trustee of AVK and
each of the additional Class I and Class II Trustee nominees has indicated
that he has consented to serve as a Trustee of AVK if elected at the Annual
Meeting. If a designated nominee declines or otherwise becomes unavailable
for election, however, the proxy confers discretionary power on the persons
named therein to vote in favor of a substitute nominee or nominees.
5
ADVENT/CLAYMORE ENHANCED GROWTH & INCOME FUND (LCM)
The Trustees of LCM are classified into three classes of Trustees: Class I
Trustees, Class II Trustees and Class III Trustees as follows:
CLASS I TRUSTEES OF LCM
-Mr. Michael A. Smart and Mr. Ronald A. Nyberg are the Class I Trustees of
LCM. They are standing for re-election at the Annual Meeting. Mr. Daniel
Black is a nominee for election as a Class I Trustee of LCM and is standing
for election at the Annual Meeting.
CLASS II TRUSTEES OF LCM
-Mr. Tracy V. Maitland and Mr. Nicholas Dalmaso are the Class II Trustees
of LCM. It is currently anticipated that they will stand for re-election at
the Trusts' 2006 joint annual meeting of shareholders.
CLASS III TRUSTEES OF LCM
-Mr. Gerald L. Seizert and Mr. Derek Medina are the Class III Trustees of
LCM. It is currently anticipated that they will stand for re-election at
the Trusts' 2007 joint annual meeting of shareholders. Mr. Randall C.
Barnes+ is a nominee for election as a Class III Trustee of LCM and is
standing for election at the Annual Meeting.
----------
+ The election of Mr. Randall C. Barnes to the Board of LCM is
contingent upon the shareholders of LCM approving Proposal A with respect
to LCM, the approval of which would increase the maximum number of Trustees
permitted on the Board of LCM and permit Mr. Randall C. Barnes to join the
Board of LCM as a Class III Trustee.
As indicated in the above table, shareholders are being asked to elect the
following two Class I Trustees at the Annual Meeting: Mr. Michael A. Smart
and Mr. Ronald A. Nyberg. Shareholders are also being asked to elect the
following two nominees as Trustees at the Annual Meeting: Mr. Daniel Black
as a Class I Trustee and Mr. Randall C. Barnes as a Class III Trustee. The
holders of LCM's common shares will have equal voting rights (i.e., one
vote per share) and will vote together as a single class with respect to
the election of each Class I Trustee and with respect to the election of
Mr. Daniel Black as a Class I Trustee and Mr. Randall C. Barnes as a Class
III Trustee.
Each Class I Trustee and the Class I Trustee nominee of LCM, if elected,
will hold office for three years or until his successor shall have been
elected and qualified. If elected as a Class III Trustee, Mr. Randall C.
Barnes will hold office until the Trusts' 2007 Joint Annual Meeting of
Shareholders or until his successor shall have been elected and qualified.
The other Trustees of LCM will continue to serve under their current terms
and will be elected at subsequent annual meetings of shareholders as
indicated above. Mr. Michael A. Smart and Mr. Ronald A. Nyberg are
currently Class I Trustees of LCM. Unless authority is withheld, it is the
intention of the persons named in the proxy to vote the proxy "FOR" the
election of the Class I Trustees of LCM named above, as well as for the
Class I and Class III nominees named above. Each Class I Trustee of LCM and
each of the additional Class I and Class III nominees has indicated that he
has consented to serve as a Trustee of LCM if elected at the Annual
Meeting. If a designated nominee declines or otherwise becomes unavailable
for election, however, the proxy confers discretionary power on the persons
named therein to vote in favor of a substitute nominee or nominees.
Certain information concerning the current Trustees, the Trustee nominees
and the officers of each of the Trusts is set forth in the table below.
Except as indicated in the chart below, each individual has held the office
shown or other offices in the same company since each of the Trusts
commenced their respective operations. The "interested" Trustees (as
defined in Section 2(a)(19) of the Investment Company Act of 1940, as
amended (the "1940 Act")) are indicated by an asterisk(*). Independent
Trustees are those who are not interested persons of (i) the Trust, (ii)
AVK's investment advisor and LCM's investment manager,
6
Advent Capital Management, LLC ("Advent"), (iii) Claymore Securities, Inc.,
AVK's shareholder servicing agent or (iv) Claymore Advisors, LLC
("Claymore"), LCM's investment advisor, and who satisfy the requirements
contained in the definition of "independent" as defined in Rule 10A-3 of
the Securities Exchange Act of 1934 (the "Independent Trustees"). Each
Trustee of LCM has served in such capacity since March 30, 2004. Each
Trustee of AVK has served in such capacity since March 27, 2003. AVK and
LCM are the only registered funds in the Advent Claymore fund complex. The
business address of each current Trustee and officer is c/o Advent Capital
Management, LLC, 1065 Avenue of the Americas, 31st Floor, New York,
New York 10018.
TRUSTEES AND TRUSTEE NOMINEES
POSITION PRINCIPAL OCCUPATION NUMBER OF PORTFOLIOS
HELD WITH DURING THE PAST FIVE IN FUND COMPLEX OTHER DIRECTORSHIPS
NAME AND AGE TRUST YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
---------------------------- ------------ ---------------------- --------------------- --------------------
INTERESTED TRUSTEES:
Tracy V. Maitland* Trustee, President of Advent 2 None.
Age: 45 Chairman, Capital Management,
President LLC, which he founded
and Chief in June, 2001. Prior
Executive to June, 2001,
Officer(1) President of Advent
Capital Management, a
division of Utendahl
Capital.
Nicholas Dalmaso* Trustee(1) Senior Managing 2 Trustee, MBIA
Age: 40 Director and General Capital/Claymore
Counsel of Claymore Managed Duration
Advisors, LLC and Investment Grade
Claymore Securities, Municipal Fund; Western
Inc. (2001-present). Asset/Claymore U.S.
Manager, Claymore Fund Treasury Inflation
Management Company, Protected Securities
LLC. Formerly, Fund 1; Western
Assistant General Asset/Claymore U.S.
Counsel, John Nuveen Treasury Inflation
and Company Inc. Protected Securities
(asset manager) Fund 2; Dreman/Claymore
(1999-2001). Former Dividend & Income Fund;
Vice President and TS&W/Claymore
Associate General Tax-Advantaged Balanced
Counsel of Van Kampen Fund; Madison/Claymore
Investments, Inc. Covered Call Fund;
(1992-1999). Fiduciary/Claymore MLP
Opportunity Fund; and
Fiduciary/Claymore
Dynamic Equity Fund;
Claymore Peroni Equity
Opportunities Fund.
INDEPENDENT TRUSTEES:
Derek Medina Trustee(1) Vice President, 2 Director of Young
Age: 38 Business Affairs and Scholar's Institute.
News Planning at ABC Former Director of
News from 2003-present. Episcopal Social
Formerly, Executive Services.
Director, Office of
the President at ABC
News (2000-2003).
Former Associate at
Cleary Gottlieb Steen
& Hamilton (law firm)
(1995-1998). Former
associate in Corporate
Finance at J.P.
Morgan/Morgan
Guaranty (1988-1990).
7
POSITION PRINCIPAL OCCUPATION NUMBER OF PORTFOLIOS
HELD WITH DURING THE PAST FIVE IN FUND COMPLEX OTHER DIRECTORSHIPS
NAME AND AGE TRUST YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
---------------------------- ------------ ---------------------- --------------------- --------------------
Ronald A. Nyberg Trustee(1) Principal of Ronald A. 2 Trustee, MBIA
Age: 52 Nyberg, Ltd., a law Capital/Claymore
firm specializing in Managed Duration
corporate law, estate Investment Grade
planning and business Municipal Fund; Western
transactions from Asset/Claymore U.S.
2000-present. Treasury Inflation
Formerly, Executive Protected Securities
Vice President, Fund 1; Western
General Counsel and Asset/Claymore U.S.
Corporate Secretary of Treasury Inflation
Van Kampen Investments Protected Securities
(1982-1999). Fund 2; Dreman/Claymore
Dividend & Income Fund;
TS&W/Claymore
Tax-Advantaged Balanced
Fund; Madison/Claymore
Covered Call Fund;
Fiduciary/Claymore MLP
Opportunity Fund;
Fiduciary/Claymore
Dynamic Equity Fund;
and Claymore Peroni
Equity Opportunities
Fund.
Gerald L. Seizert Trustee(1) Chief Executive 2 Former Director of
Age: 52 Officer of Seizert Loomis, Sayles and
Capital Partners, LLC, Co., L.P.
where he directs the
equity disciplines of
the firm and serves as
a co-manager of the
firm's hedge fund,
Proper Associates, LLC
from 2000-present.
Formerly Co-Chief
Executive (1998-1999)
and a Managing Partner
and Chief Investment
Officer-Equities of
Munder Capital
Management, LLC
(1995-1999). Former
Vice President and
Portfolio Manager of
Loomis, Sayles & Co.,
L.P. (asset manager)
(1984-1995). Former
Vice President and
Portfolio Manager at
First of America Bank
(1978-1984).
Michael A. Smart Trustee(1) Managing Partner, 2 Director, Country
Age: 44 Williams Capital Pure Foods.
Partners, L.P.,
Advisor to First
Atlantic Capital Ltd.,
a private equity firm
(2001-present).
Formerly a Managing
Director in Investment
Banking-The Private
Equity Group
(1995-2001) and a Vice
President in Investment
Banking-Corporate
Finance (1992-1995) at
Merrill Lynch & Co.
Founding Partner of
The Carpediem Group, a
private placement firm
(1991-1992). Former
associate at Dillon,
Read and Co.
(investment bank)
(1988-1990).
8
POSITION PRINCIPAL OCCUPATION NUMBER OF PORTFOLIOS
HELD WITH DURING THE PAST FIVE IN FUND COMPLEX OTHER DIRECTORSHIPS
NAME AND AGE TRUST YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
---------------------------- ------------ ---------------------- --------------------- --------------------
Daniel Black(2) Trustee Principal, The Wicks 0 Trustee, Bank Street
Age: 45 Nominee Group of Companies, College of Education
LLC (2001-present).
Formerly, Managing
Director and Co-head
of the Merchant
Banking Group at BNY
Capital Markets, a
division of The Bank
of New York Company,
Inc. (1998-2003).
Randall C. Barnes(2) Trustee Investor 0 Trustee, Madison
Age: 53 Nominee (2001-present). Claymore Call Fund;
Formerly, Senior Vice Fiduciary/Claymore
President Treasurer MLP Opportunity Fund;
(1993-1997), Fiduciary/Claymore
President, Pizza Dynamic Equity Fund;
Hut International TS&W/Claymore
(1991-1993) and Senior Tax-Advantaged
Vice President, Balanced Fund.
Strategic Planning and Director, Lykes Bros.
New Business
Development (1987-1990)
of PepsiCo, Inc.
(1987-1997).
* "Interested person" of each Trust as defined in the 1940 Act. Mr. Maitland
is an interested person due to his relationship with Advent. Mr. Dalmaso in
an interested person due to his relationship with the Claymore entities
that serve as LCM's investment manager and AVK's shareholder servicing
agent.
(1) Trustee since commencement of operation of each Trust. After a Trustee's
initial term, each trustee is expected to serve a three year term
concurrent with the class of Trustees for which he serves.
(2) Mr. Black and Mr. Barnes will each become a Trustee of each Trust if
Proposals A, B and C are approved by the respective shareholders of that
Trust. If Proposal A is not approved by a Trust, Mr. Black will be
appointed by the Trustees of such Trust to fill the current vacancy on the
Board of Trustees of such Trust. Mr. Barnes will be appointed as a Trustee
of a Trust only if the shareholders of such Trust approve Proposal A
(increasing the number of Trustees) and the proposal to elect Mr. Barnes.
Mr. Black and Mr. Barnes, if elected as Trustees, would each be independent
Trustees of the Trusts.
EXECUTIVE OFFICERS
OFFICERS: PRINCIPAL OCCUPATION DURING
NAME AND AGE TITLE THE PAST FIVE YEARS
------------ ----- -------------------
F. Barry Nelson Vice President and Assistant Advent Capital Management, LLC:
Age: 62 Secretary of AVK Senior Vice President,
Co-Portfolio Manager and Research
Director, June 2001 to present.
Vice President of LCM Prior to June 2001, Mr. Nelson
held the same position at Advent
Capital Management, a division of
Utendahl Capital.
Rodd Baxter Secretary and Chief Advent Capital Management, LLC:
Age: 55 Compliance Officer of both General Counsel--Legal, 2002 to
AVK and LCM present; SG Cowen Securities
Corporation: Director and Senior
Counsel, 1998-2002.
Paul Latronica(2) Treasurer and Chief Financial Advent Capital Management, LLC:
Age: 33 Officer of both AVK and LCM Vice President and Senior Trader,
June 2000 - present. Prior to
June 2000, Mr. Latronica held the
9
OFFICERS: PRINCIPAL OCCUPATION DURING
NAME AND AGE TITLE THE PAST FIVE YEARS
------------ ----- -------------------
same position at Advent Capital
Management, a division of
Utendahl Capital.
Heidemarie Gregoriev Assistant Secretary of LCM Vice President and Assistant
Age: 34 General Counsel, Claymore
Advisors, LLC and Claymore
Securities, Inc. since 2004;
Legal Counsel, Henderson Global
Investors (North America) Inc.
and Assistant Secretary
(2001-2004) and Chief Legal
Officer (2003-2004) of Henderson
Global Funds; Attorney, Gardner,
Carton, & Douglas (1997-2001).
Steven M. Hill Assistant Treasurer of LCM Senior Managing Director and
Age: 40 Chief Financial Officer of
Claymore Advisors, LLC and
Claymore Securities, Inc.
Previously, Treasurer of
Henderson Global Funds and
Operations Manager for Henderson
Global Investors (North America)
Inc., from 2002-2003; Managing
Director, FrontPoint Partners LLC
(2001-2002); Vice President,
Nuveen Investments (1999-2001).
(2) Mr. Latronica has held his current position since June 29, 2005.
* DOES THE BOARD HAVE ANY COMMITTEES?
Yes. The Trustees have determined that the efficient conduct of the Trusts'
affairs makes it desirable to delegate responsibility for certain specific
matters to committees of the Boards. The committees meet as often as
necessary, either in conjunction with regular meetings of the Trustees or
otherwise. Two of the committees of the Board are the Audit Committee and
the Nominating Committee.
AUDIT COMMITTEE
AVK has an Audit Committee, composed of two of the Independent Trustees,
which is charged with selecting a firm of independent registered public
accountants for the Trust and reviewing accounting matters with the
accountants.
The Audit Committee of AVK presents the following report:
The Audit Committee of AVK has performed the following functions: (i) the
Audit Committee reviewed and discussed the audited financial statements of
AVK with management of AVK, (ii) the Audit Committee discussed with the
independent registered public accounting firm the matters required to be
discussed by the Statement on Auditing Standards No. 61, (iii) the Audit
Committee received the written disclosures and the letter from the
independent registered public accounting firm required by ISB Standard No.
1 and has discussed with the independent registered public accounting firm
the auditors' independence and (iv) the Audit Committee recommended to the
Board of Trustees of AVK that the financial statements be included in AVK's
Annual Report for the past fiscal year.
The Audit Committee of AVK is governed by a written charter, which was
approved by AVK's Board on March 27, 2003.
The members of the Audit Committee of AVK are Messrs. Seizert and Smart,
both of whom are Independent Trustees. The Board of AVK has determined that
AVK has two audit committee financial experts serving on its Audit
Committee, Messrs. Seizert and Smart, both of whom are independent for the
purpose of the definition of audit committee financial expert as applicable
to the AVK.
10
The Audit Committee of LCM is also governed by a written charter, which was
approved by LCM's board on March 30, 2004 and is attached hereto as
Appendix A.
NOMINATING COMMITTEE
The Board of each Trust has a Nominating Committee, which performs the
functions set forth in the Joint Nominating Committee Charter of the
Trusts. The Nominating Committee is composed of all of the Independent
Trustees. Each Trust's Independent Trustees meet regularly as a group in
executive session as the Nominating Committee.
As part of its duties, the Nominating Committee makes recommendations to
the full Board of each Trust with respect to candidates for the Board. The
Nominating Committee will consider trustee candidates recommended by
shareholders. In considering candidates submitted by shareholders, the
Nominating Committee will take into consideration the needs of each Board
and the qualifications of the candidate. The Nominating Committee may also
take into consideration the number of shares held by the recommending
shareholder and the length of time that such shares have been held. To have
a candidate considered by the Nominating Committee, a shareholder must
submit the recommendation in writing and must include:
- The name of the shareholder and evidence of the person's
ownership of shares of the applicable Trust(s), including the
number of shares owned and the length of time of ownership; and
- The name of the candidate, the candidate's resume or a listing of
his or her qualifications to be a Trustee of the Trust(s) and the
person's consent to be named as a Trustee if selected by the
Nominating Committee and nominated by the Board.
The shareholder recommendation and information described above must be
sent to the applicable Trust's Secretary, c/o Advent Capital Management,
LLC, 1065 Avenue of the Americas, 31st Floor, New York, New York 10018 and
must be received by the Secretary not less than 120 days prior to the
anniversary date of the Trust's most recent annual meeting of shareholders.
The Nominating Committee believes that the minimum qualifications for
serving as a Trustee of the Trust(s) are that a candidate demonstrate, by
significant accomplishment in his or her field, an ability to make a
meaningful contribution to the Board's oversight of the business and
affairs of the Trust(s) and have an impeccable record and reputation for
honest and ethical conduct in both his or her professional and personal
activities. In addition, the Nominating Committee examines a candidate's
specific experiences and skills, time availability in light of other
commitments, potential conflicts of interest and independence from
management and the Trust(s). The Nominating Committee also seeks to have
the Board represent a diversity of backgrounds and experience.
The Joint Nominating Committee Charter of the Trusts is attached hereto as
Appendix B.
* DO THE TRUSTS HAVE A POLICY WITH RESPECT TO THE ATTENDANCE OF TRUSTEES AT
THE ANNUAL MEETING?
It is the Trusts' policy to encourage Trustees to attend annual meetings.
At the annual meeting of AVK held on October 28, 2004, the following
Trustee was present: Nicholas Dalmaso. No annual meetings have been held
for LCM to date.
* HOW CAN THE TRUSTS' SHAREHOLDERS SEND COMMUNICATIONS TO THE TRUSTEES?
Shareholders and other interested parties may contact the Boards or any
member of the Boards by mail. To communicate with the Boards or any member
of the Boards, correspondence should be addressed to the Board or the Board
members with whom you wish to communicate by either name or title. All such
correspondence should be sent c/o the Secretary of the Trust or Trusts at
1065 Avenue of the Americas, 31st Floor, New York, New York 10018.
11
* HOW LARGE A STAKE DO THE TRUSTEES HAVE IN THE TRUSTS?
As of August 11, 2005, the Trustees owned shares of common stock of the
Trusts in the following amounts:
AGGREGATE DOLLAR RANGE OF
EQUITY SECURITIES
OVERSEEN BY TRUSTEES IN
FAMILY OF
NAME OF TRUSTEE OR DOLLAR RANGE OF EQUITY DOLLAR RANGE OF EQUITY REGISTERED INVESTMENT
TRUSTEE NOMINEE SECURITIES IN AVK SECURITIES IN LCM COMPANIES(*)
--------------- ----------------- ---------------------------- ------------
Tracy V. Maitland Over $100,000 $10,001 - $50,000 Over $100,000
Nicholas Dalmaso $0 $0 $0
Derek Medina $1 - $10,000 $1 - $10,000 $1 - $10,000
Ronald A. Nyberg $10,001 - $50,000 $1 - $10,000 $10,001 - $50,000
Gerald L. Seizert Over $100,000 $10,001 - $50,000 Over $100,000
Michael A. Smart $10,001 - $50,000 $0 $10,001 - $50,000
Daniel Black** Over $100,000 $0 Over $100,000
Randall C. Barnes** $0 $0 $0
----------
(*) The "family of registered investment companies" includes only the
Trusts.
(**) Nominee for election to the Board of Trustees.
As of August 11, 2005, each Trustee and the Trustees and officers of the
Trust as a group owned less than 1% of the outstanding shares of any class
of each Trust.
* HOW OFTEN DO THE TRUSTEES MEET?
One meeting of the Board of LCM was held during the period from LCM's
inception through October 31, 2004. Six meetings of the Board of AVK were
held during its last fiscal year between November 1, 2003 and October 31,
2004.
One meeting of the Audit Committee of LCM was held during the period from
LCM's inception through October 31, 2004. Three meetings of the Audit
Committee of AVK were held during its last fiscal year between November 1,
2003 and October 31, 2004.
Each Trustee of LCM attended at least 75% of the aggregate of: (i) all
regular meetings of the Board of LCM held during the period from LCM's
organization through October 31, 2004; and (ii) all meetings of all
committees of the Board of LCM on which the Trustee served held during the
period from LCM's inception through October 31, 2004.
Each Trustee of AVK attended at least 75% of the aggregate of: (i) all
regular meetings of the Board of AVK held during the period from November
1, 2003 through October 31, 2004; and (ii) all meetings of all committees
of the Board of AVK on which the Trustee served held during the period from
November 1, 2003 through October 31, 2004.
* WHAT ARE THE TRUSTEES PAID FOR THEIR SERVICES?
The following table provides information regarding the compensation of the
Trusts' Trustees. This table assumes that each Trust had a full fiscal year
of operations:
12
ESTIMATED TOTAL
COMPENSATION FROM AVK ESTIMATED COMPENSATION COMPENSATION FROM THE
NAME OF BOARD MEMBER FROM LCM(1) FUND COMPLEX(1)
--------------------------------------------------------------------------------------------------------
Tracy V. Maitland $ 0 $ 0 $ 0
Nicholas Dalmaso $ 0 $ 0 $ 0
Derek Medina $ 11,000 $ 18,000 $ 29,000
Ronald A. Nyberg $ 9,000 $ 18,000 $ 27,000
Gerald L. Seizert $ 10,750 $ 19,000 $ 29,750
Michael A. Smart $ 11,750 $ 19,000 $ 30,750
----------
(1) Assumes that LCM had a full fiscal year of operations.
THE BOARD OF THE TRUSTS, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL A, PROPOSAL B, PROPOSAL C AND
PROPOSAL D.
FURTHER INFORMATION ABOUT VOTING AND THE ANNUAL MEETING
The cost of soliciting proxies will be borne by each Trust in proportion to the
amount of proxies solicited on behalf of a Trust to the total proxies solicited
on behalf of both of the Trusts. In addition, certain officers, trustees,
directors and employees of the Trust, Advent and Claymore (none of whom will
receive additional compensation therefor) may solicit proxies by telephone or
mail.
Information regarding how to vote via telephone or internet is included on the
enclosed proxy card.
The affirmative vote of a majority of the shares present for each Trust at the
Annual Meeting at which a quorum (i.e., a majority of the shares entitled to
vote on the applicable Proposals (including a quorum of AVK's Auction Market
Preferred Shares with respect to Proposal D) is present is necessary to approve
the Proposal for each respective Trust.
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 be counted as shares present at the
Meeting and will not affect the result of the vote on the Proposal.
All properly executed proxies received prior to the Annual Meeting will be voted
at the Annual Meeting in accordance with the instructions marked thereon or
otherwise as provided therein. Shareholders may revoke their proxies at any time
prior to the time they are voted by giving written notice to the Secretary of
the Trust, by delivering a subsequently dated proxy prior to the date of the
Annual Meeting or by attending and voting at the Annual Meeting.
The Board of each Trust has fixed the close of business on August 15, 2005 as
the record date for the determination of shareholders of the Trust entitled to
notice of, and to vote at, the Annual Meeting. Shareholders of each Trust on
that date will be entitled to one vote on each matter to be voted on by that
Trust for each share held and a fractional vote with respect to each fractional
share with no cumulative voting rights.
INVESTMENT ADVISOR AND INVESTMENT MANAGER
Advent Capital Management, LLC acts as AVK's investment advisor and LCM's
investment manager. Advent is responsible for making investment decisions with
respect to the investment of the Trusts' assets. Advent is located at 1065
Avenue of the Americas, 31st Floor, New York, New York 10018. As of June 30,
2005, Advent had approximately $3.1 billion in assets under management.
Claymore Advisors, LLC acts as LCM's investment advisor. Claymore is responsible
for monitoring the investment decisions with respect to the investment of LCM's
assets by Advent. Claymore is located at 2455 Corporate West Drive, Lisle, IL
60532. As of June 30, 2005, Claymore had approximately $4.4 billion in assets
under management.
13
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP ("PWC") has been selected as the Trusts' independent
registered public accounting firm by the Audit Committee of each Trust and
ratified by a majority of each Trust's Board, including a majority of the
Independent Trustees, by vote cast in person, to audit the accounts of each
Trust for and during each Trust's fiscal years ending in 2004 and 2005. The
Trust does not know of any direct or indirect financial interest of PWC in the
Trusts.
Representatives of PWC will attend the Annual Meeting either in person or
telephonically, will have the opportunity to make a statement if they desire to
do so and will be available to answer questions.
ADMINISTRATOR
The Bank of New York, located at One Wall Street, New York, New York 10286,
serves as the Trusts' administrator.
AUDIT FEES
The aggregate fees billed to AVK by PWC for professional services rendered for
the audit of AVK's annual financial statements for the period from March 27,
2003 (inception of AVK) through October 31, 2003 were $65,000. The aggregate
fees billed to AVK by PWC for professional services rendered for the audit of
AVK's annual financial statements for the period from November 1, 2003 through
October 31, 2004 were $70,000.
The aggregate fees billed to LCM by PWC for professional services rendered for
the "seed capital" audit of LCM for the period from January 30, 2004 (inception
of LCM) through October 31, 2004 were $25,000.
AUDIT-RELATED FEES
The aggregate fees billed by PWC and approved by the Audit Committee of AVK for
the period from March 27, 2003 (inception of AVK) through October 31, 2003 for
assurance and related services reasonably related to the performance of the
audit of AVK's annual financial statements were $45,500 (such fees relate to the
performance by PWC of agreed-upon procedures in connection with AVK's Auction
Market Preferred Shares and for services rendered, and out of pocket expenses
incurred, in connection with AVK's registration statements, comfort letters and
consents). The aggregate fees billed by PWC and approved by the Audit Committee
of AVK for the period from November 1, 2003 through October 31, 2004 for
assurance and related services reasonably related to the performance of the
audit of AVK's annual financial statements were $37,500 (such fees relate to the
performance by PWC of agreed-upon procedures in connection with the Trust's
Auction Market Preferred Shares and for services rendered, and out of pocket
expenses incurred, in connection with Trust registration statements, comfort
letters and consents). The aggregate fees billed by PWC and approved by the
Audit Committee of LCM for the period from January 30, 2004 (inception of LCM)
through October 31, 2004 for assurance and related services reasonably related
to the performance of the audit of LCM's financial statements were $0 (such
fees relate to services rendered, and out of pocket expenses incurred, in
connection with Trust registration statements, comfort letters and consents).
PWC did not perform any other assurance and related services that were required
to be approved by either Trust's Audit Committee for such period.
TAX FEES
The aggregate fees billed by PWC and approved by the Audit Committee of AVK for
the period from March 27, 2003 (inception of AVK) through October 31, 2003 for
professional services rendered for tax compliance, tax advice, and tax planning
were $6,500 (such fees relate to tax services provided by PWC in connection with
AVK's excise tax calculations and review of AVK's tax returns). The aggregate
fees billed by PWC and approved by the Audit Committee of AVK for the period
from November 1, 2003 through October 31, 2004 for professional services
rendered for tax compliance, tax advice, and tax planning were $6,500 (such fees
relate to tax services provided by PWC in connection with AVK's excise tax
calculations and review of AVK's tax returns). The aggregate fees billed by PWC
and approved by the Audit Committee of LCM for the period from January 30, 2004
(inception of LCM) through October 31, 2004 for professional services rendered
for tax compliance, tax advice, and tax planning were
14
$0 (such fees relate to tax services provided by PWC in connection with LCM's
excise tax calculations and review of LCM's tax returns). PWC did not perform
any other tax compliance or tax planning services or render any tax advice that
were required to be approved by the Trusts' Audit Committee for such period.
ALL OTHER FEES
Neither Trust paid PWC for services other than those described above during the
last two fiscal years (or periods).
AGGREGATE NON-AUDIT FEES
The aggregate non-audit fees billed by PWC from March 27, 2003 to October 31,
2003 for services rendered to AVK were $51,500.
The aggregate non-audit fees billed by PWC from November 1, 2003 to October 31,
2004 for services rendered to AVK were $0.
The aggregate non-audit fees billed by PWC from January 30, 2004 (inception of
LCM) through October 31, 2004 for services rendered to LCM were $0.
In addition, the aggregate non-audit fees billed by PWC for the period from
March 27, 2003 through October 31, 2003 for services rendered to Advent, or any
entity controlling, controlled by, or under common control with Advent that
provides ongoing services to the Trust were $84,000.
The aggregate non-audit fees billed by PWC for the period from November 1, 2003
to October 31, 2004 for services rendered to Advent, or any entity controlling,
controlled by, or under common control with Advent that provides ongoing
services to the Trusts were $7,000.
The aggregate non-audit fees billed by PWC for the period from January 30, 2004
(inception of LCM) through October 31, 2004 for services rendered to Claymore,
or any entity controlling, controlled by, or under common control with Claymore
that provides ongoing services to LCM were $0.
AUDIT COMMITTEE'S PRE-APPROVAL POLICIES AND PROCEDURES
On June 19, 2003, the Audit Committee of AVK adopted Pre-Approval Policies
and Procedures. On March 30, 2004, the Audit Committee of LCM adopted
Pre-Approval Policies and Procedures, which are attached hereto as Annex B to
the Audit Committee Charter of LCM which appears in Appendix B hereto. Since
the adoption of such policies and procedures, the Audit Committee of the
Trusts has pre-approved all audit and non-audit services provided by PWC to
the Trusts, and all non-audit services provided by PWC to Advent and
Claymore, or any entity controlling, controlled by, or under common control
with Advent or Claymore, as applicable, that provides ongoing services to the
Trusts which are related to the operations of the Trusts. [The Audit Committee
of AVK has considered whether the provision of non-audit services that were
rendered by PWC from March 27, 2003 to October 31, 2004 to Advent or any
entity controlling, controlled by, or under common control with Advent that
were not pre-approved pursuant to 17 CFR 210.2-01(c)(7)(ii) is compatible
with maintaining PWC's independence. Pursuant to such consideration, the
Audit Committee of AVK has made a determination that such non-audit services
are compatible with maintaining PWC's independence. The Audit Committee of
LCM has also considered whether the provision of non-audit services that were
rendered by PWC from January 30, 2004 (inception of LCM) to October 31, 2004
to Advent or Claymore or any entity controlling, controlled by, or under
common control with Advent or Claymore that were not pre-approved pursuant to
17 CFR 210.2-01(c)(7)(ii) is compatible with maintaining PWC's independence.
Pursuant to such consideration, the Audit Committee of LCM has made a
determination that such non-audit services are compatible with maintaining
PWC's independence.]
Advent and affiliates of Advent performing services for one or both of the
Trusts paid no fees to PWC in either Trusts' most recent fiscal year for
services other than those described above or for any other services, including
for information systems design and implementation.
15
PRINCIPAL SHAREHOLDERS
As of August 15, 2005, to the knowledge of each Trust, no person beneficially
owned more than 5% of the voting securities of any class of securities of either
Trust.
FINANCIAL STATEMENTS AND OTHER INFORMATION
EACH TRUST WILL FURNISH, WITHOUT CHARGE, A COPY OF SUCH TRUST'S MOST RECENT
ANNUAL REPORT AND THE SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT, IF ANY,
TO ANY SHAREHOLDER UPON REQUEST. REQUESTS SHOULD BE DIRECTED TO CLAYMORE
SECURITIES, INC., 2455 CORPORATE WEST DRIVE, LISLE, ILLINOIS 60532, 866.274.2227
(TOLL FREE).
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and Section 30(h) of the
1940 Act require each Trust's officers and Trustees, certain officers of the
Trusts' investment advisor, affiliated persons of the investment advisor, and
persons who beneficially own more than ten percent of the Trust's shares to file
certain reports of ownership ("Section 16 filings") with the SEC and the New
York Stock Exchange. Based upon each Trust's review of the copies of such forms
effecting the Section 16 filings received by it, each Trust believes that for
its fiscal year ended in 2004, all filings applicable to such persons were
completed and filed.
PRIVACY PRINCIPLES OF THE TRUST
The Trusts are committed to maintaining the privacy of shareholders and to
safeguarding their non-public personal information. The following information is
provided to help you understand what personal information the Trust collects,
how the Trust protects that information and why, in certain cases, the Trust may
share information with select other parties.
Generally, the Trusts do not receive any non-public personal information
relating to their shareholders, although certain non-public personal information
of their shareholders may become available to the Trusts. The Trusts do not
disclose any non-public personal information about their shareholders or former
shareholders to anyone, except as permitted by law or as is necessary in order
to service shareholder accounts (for example, to a transfer agent or third party
administrator).
The Trusts restrict access to non-public personal information about their
shareholders to employees of Advent with a legitimate business need for the
information. The Trusts maintain physical, electronic and procedural safeguards
designed to protect the non-public personal information of their shareholders.
DEADLINE FOR SHAREHOLDER PROPOSALS
Shareholder proposals intended for inclusion in the Trusts' proxy statement in
connection with the Trusts' 2006 annual meeting of shareholders pursuant to Rule
14a-8 under the Securities Exchange Act of 1934 must be received by a Trust at
such Trust's principal executive offices by May 15, 2006. In order for proposals
made outside of Rule 14a-8 under the Exchange Act to be considered "timely"
within the meaning of Rule 14a-4(c) under the Exchange Act, such proposals must
be received by a Trust at the Trust's principal executive offices not later than
July 20, 2006.
16
OTHER MATTERS
The management of the Trusts knows of no other matters which are to be brought
before the Annual Meeting. However, if any other matters not now known properly
come before the Annual Meeting, it is the intention of the persons named in the
enclosed form of proxy to vote such proxy in accordance with their judgment on
such matters.
Very truly yours,
/s/Tracy V. Maitland
--------------------
TRACY V. MAITLAND
Chairman, Chief Executive Officer and President of the Trusts
17
APPENDIX A
AUDIT COMMITTEE CHARTER OF
ADVENT/CLAYMORE ENHANCED GROWTH & INCOME FUND
AS ADOPTED BY THE BOARD OF TRUSTEES MARCH 2004(1)
I. PURPOSE OF THE AUDIT COMMITTEE
The purpose of the Audit Committee (the "AUDIT COMMITTEE") of the Board of
Trustees (the "BOARD") of the Advent/Claymore Enhanced Growth & Income Fund (the
"TRUST") is to provide assistance to the Board in fulfilling its legal and
fiduciary obligations with respect to matters involving the accounting,
auditing, financial reporting and internal control functions of the Trust,
including, without limitation, (a) assisting the Board's oversight of (i) the
integrity of the Trust's financial statements, (ii) the Trust's compliance with
legal and regulatory requirements, and (iii) the qualifications and independence
of the Trust's independent auditor (the "INDEPENDENT AUDITOR"), and (b)
preparing the report required to be prepared by the Audit Committee pursuant to
the rules of the Securities and Exchange Commission (the "SEC") for inclusion in
the Trust's annual proxy statement, if any.
II. COMPOSITION OF THE AUDIT COMMITTEE
The Audit Committee shall be comprised of three or more trustees as
determined from time to time by resolution of the Board. Each member of the
Audit Committee shall be qualified to serve on the Audit Committee pursuant to
the requirements of the Sarbanes - Oxley Act of 2002 (the "ACT") and the rules
and regulations promulgated by the SEC pursuant to the Act and by the New York
Stock Exchange (the "NYSE"). Each member of the Audit Committee shall be
"independent" as defined by the rules promulgated by the SEC pursuant to the Act
and the NYSE listing standards.
According to the rules and regulations promulgated by the SEC pursuant to
the Act, a member is independent if he or she, other than in his or her capacity
as a member of the
----------
(1) This Audit Committee Charter, adopted in the month mentioned above,
supercedes and replaces all prior versions that may have been adopted from
time to time.
A-1
Board, the Audit Committee or any other board committee, (a) does not accept
directly or indirectly any consulting, advisory or other compensatory fee from
the Trust, other than receipt of pension or other forms of deferred compensation
from the Trust for prior service, so long as such compensation is not contingent
in any way on continued service, and (b) is not an "interested person" of the
Trust (an "INDEPENDENT TRUSTEE") as defined in Section 2(a)(19) of the
Investment Company Act of 1940 (the "1940 ACT").
According to the NYSE listing standards, a member is independent if he or
she has no relationship with the Trust that may interfere with the exercise of
his or her independence from the Trust, Claymore Advisors (the "ADVISOR") and
Advent Capital Management, LLC (the "INVESTMENT MANAGER") and (a) is not an
employee of the Trust, the Advisor or the Investment Manager, (b) is not a
partner, controlling shareholder or executive officer of an organization that
has a business relationship with the Trust or has a direct business relationship
with such Trust, (c) is not employed as an executive of another company for
which an executive of the Trust serves on that company's compensation committee,
and (d) does not have an immediate family member who is an executive officer of
any Trust, the Advisor or the Investment Manager.
No member of the Board may serve as a member of the Audit Committee if the
member serves on the audit committee of more than two other public companies,
unless the Board determines that such simultaneous service would not impair the
ability of the member to effectively serve on the Audit Committee.
Each member of the Audit Committee must be "financially literate" (as such
term is defined from time-to-time by the NYSE rules) as such qualification is
interpreted by the Board in its business judgment, or must become financially
literate within a reasonable period of time after his or her appointment to the
Audit Committee. In addition, at least one member of the Audit Committee must
have "accounting or related financial management expertise" (as such term is
defined by the NYSE rules) as the Board interprets such qualification in its
business judgment. Further, either (a) at least one member of the Audit
Committee must be determined to be an "audit committee financial expert" (as
such term is defined in the rules and regulations promulgated by the SEC
pursuant to the Act) by the Board, or (b) if no member of the Audit Committee is
an "audit committee financial expert," such fact must be disclosed in the
Trust's annual report filed with the SEC. The Audit Committee shall recommend to
the Board whether one or more of its members should be deemed to be an "audit
committee financial expert" or, if not, why not, and the Board shall make the
final determinations in this regard.
The chairperson of the Audit Committee shall be designated by the Board
upon recommendation from the Audit Committee, PROVIDED that if the Board does
not designate a chairperson, the members of the Audit Committee, by a majority
vote, may designate a chairperson.
A-2
Any vacancy on the Audit Committee shall be filled by the affirmative vote
of a majority of the members of the Board at the next meeting of the Board
following the occurrence of the vacancy. No member of the Audit Committee shall
be removed except by the affirmative vote of a majority of the members of the
Board.
III. MEETINGS OF THE AUDIT COMMITTEE
The Audit Committee shall fix its own rules of procedure, which shall be
consistent with the Declaration of Trust of the Trust, the By-Laws of the Trust
and this Audit Committee Charter. The Audit Committee shall meet on a regular
basis and special meetings shall be called as circumstances require. The Audit
Committee, in its discretion, may ask members of management or others to attend
its meetings (or portions thereof) and to provide pertinent information as
necessary. The Audit Committee shall meet separately on a periodic basis with
(a) the chief financial officer of the Trust, (b) management of Advent
responsible for the Trust's internal audit function and for assisting with the
preparation of the Trust's financial statements and (c) the Independent Auditor,
in each case to discuss any matters that the Audit Committee or any of the above
persons or firms believe should be discussed privately.
A majority of the members of the Audit Committee present in person or by
means of a conference telephone or other communication equipment by means of
which all persons participating in the meeting can communicate with each other
shall constitute a quorum, provided that, once annually, at the meeting for
selecting the Independent Auditor, a majority of the members of the Audit
Committee meeting in person shall constitute a quorum. The Audit Committee may
also take action by the written consent of a majority of its members, except to
the extent an in-person meeting is required by applicable law.
The Audit Committee shall cause to be maintained minutes of all meetings
and records relating to those meetings and provide copies of such minutes to the
Board and the Trust.
IV. AUTHORITY
The Audit Committee shall have the authority to carry out its duties and
responsibilities as set forth in this Audit Committee Charter, to institute
investigations of suspected improprieties and to retain independent counsel or
seek assistance from experts.
A-3
V. DUTIES AND RESPONSIBILITIES OF THE AUDIT COMMITTEE
In carrying out its duties and responsibilities, the Audit Committee's
policies and procedures will remain flexible, so that it may be in a position to
best react or respond to changing circumstances or conditions. The following are
the duties and responsibilities of the Audit Committee:
(a) OVERSIGHT OF THE AUDITOR'S ENGAGEMENT/INDEPENDENCE
(i) Approve the selection and retention (subject to ratification by a
majority of the Independent Trustees), termination and compensation of the
Independent Auditor to audit the books and accounts of the Trust and its
subsidiaries, if any, for each fiscal year;
(ii) Review and, in its sole discretion, approve in advance the
Independent Auditor's annual engagement letter, including the proposed fees
contained therein;
(iii) Pre-approve (A) all engagements for audit and non-audit services to
be provided by the Independent Auditor to the Trust and (B) all engagements for
non-audit services to be provided by the Independent Auditor (1) to the Advisor
and the Investment Manager or (2) to any entity controlling, controlled by or
under common control with the Advisor or the Investment Manager that provides
ongoing services to the Trust; but in the case of the services described in
subsection (B)(1) or (2), only if the engagement relates directly to the
operations and financial reporting of the Trust (clauses (A) and (B),
collectively, the "COVERED SERVICES" and the entities referred to in clause (B),
collectively, the "COVERED ENTITIES"); provided that pre-approval by the Audit
Committee of Covered Services may be effected pursuant to the procedures
described below in Section VI captioned "PRE-APPROVAL PROCEDURES"; provided that
this Audit Committee Charter shall not be violated if pre-approval of any
non-audit Covered Service is not obtained in circumstances in which the
pre-approval requirement is waived under rules promulgated by the SEC under the
Act or the NYSE listing standards;
(iv) Obtain at least annually from the Independent Auditor and review a
report describing:
(A) the Independent Auditor's internal quality-control procedures;
and
(B) any material issues raised by the most recent internal
quality-control review of the Independent Auditor, or by any
inquiry or investigation by any governmental or professional
authority, within the preceding five years, respecting one or
more independent audits carried out by
A-4
the Independent Auditor, and any steps taken to deal with any
such issues;
(v) Obtain quarterly "notice reports" for the Trust (and, if the
quarterly communication is not within 90 days prior to the filing of an audit
report with the SEC for the Trust, provide an update with any changes to the
previously reported information) from the Independent Auditor and review a
report notifying the Audit Committee of all audit and non-audit services that
were not pre-approved by the Trust's Audit Committee provided (A) to the Advisor
or the Investment Manager, (B) to any entity controlling, controlled by or under
common control with the Advisor or the Investment Manager, and (C) to any
registered or unregistered investment company advised by an investment advisor
included in subsection (A) or (B) of this paragraph. In the interval between
scheduled meetings of the Audit Committee, the Independent Auditor shall provide
such "notice reports" or updates to the Chairman of the Audit Committee. Such
disclosure shall include the fees associated with any services described in this
paragraph;
(vi) Review at least annually the qualifications, performance and
independence of the Independent Auditor, including the performance of the lead
partner of the Independent Auditor, and, in its discretion, make decisions
regarding the replacement or termination of the Independent Auditor when
circumstances warrant;
(vii) Oversee the independence of the Independent Auditor by, among other
things:
(A) actively engaging in a dialogue with the Independent Auditor
with respect to any disclosed relationships or services that
may impact the objectivity and independence of the Independent
Auditor, and taking appropriate action to satisfy itself of
the auditor's independence;
(B) monitoring compliance by the Independent Auditor with the
audit partner rotation requirements contained in the Act and
the rules and regulations promulgated by the SEC thereunder;
(C) monitoring compliance by the Trust, the Advisor, the
Investment Manager and the Independent Auditor with the
employee conflict of interest requirements contained in the
Act and the rules and regulations promulgated by the SEC
thereunder; and
(D) considering whether there should be a regular rotation of the
Independent Auditor; and
A-5
(viii) Instruct the Independent Auditor that it is ultimately accountable
to the Audit Committee, and that the Audit Committee is responsible for the
appointment (subject to ratification by the Independent Trustees), retention,
compensation, evaluation and termination of the Independent Auditor.
(b) OVERSIGHT OF THE AUDIT
(i) Review the annual audit plan of the Independent Auditor, including
the scope of audit activities, monitor such plan's progress, changes thereto and
results periodically during the year and review the results of the year-end
audit of the Trust, including any comments or recommendations of the Independent
Auditor;
(ii) Obtain at least annually for the Trust from the Independent Auditor
and review a report describing:
(A) all critical accounting policies and practices used;
(B) all alternative treatments within United States Generally
Accepted Accounting Principles for policies and practices
related to material items that have been discussed with
management of the Trust, including (1) ramifications of the
use of such alternative disclosures and treatments, and (2)
the treatment preferred by the Independent Auditor; and
(C) other material written communications between the Independent
Auditor and management of the Trust, such as any management
letter or schedule of unadjusted differences;
(iii) Review with the chief financial officer of the Trust and management
of the Advisor and the Investment Manager responsible for assisting with the
preparation of the Trust's financial statements and the Independent Auditor, the
following:
(A) the Trust's annual audited financial statements and interim
financial statements, and any major issues related thereto;
(B) critical accounting policies and such other accounting
policies of the Trust as are deemed appropriate for review by
the Audit Committee prior to any interim or year-end filings
with the SEC or other regulatory body, including any financial
reporting issues which could have a material impact on the
Trust's financial statements; and
A-6
(C) the effect of regulatory, accounting and financial reporting
initiatives on the financial statements of the Trust;
(iv) Review on a regular basis with the Independent Auditor any problems
or difficulties encountered by the Independent Auditor in the course of any
audit work, including management's response with respect thereto, any
restrictions on the scope of the Independent Auditor's activities or on access
to requested information, and any significant disagreements with management. In
connection therewith, the Audit Committee will review with the Independent
Auditor the following:
(A) any accounting adjustments that were noted or proposed by the
Independent Auditor but were rejected by management (as
immaterial or otherwise);
(B) any communications between the audit team and the Independent
Auditor's national office respecting auditing or accounting
issues presented by the engagement; and
(C) any "management" or "internal control" letter issued, or
proposed to be issued, by the Independent Auditor to the
Trust;
(v) Attempt to resolve all disagreements between the Independent Auditor
and management regarding financial reporting; and
(vi) Review information obtained from the Independent Auditor pursuant to
Section 10A of the Securities Exchange Act of 1934.
(c) OVERSIGHT OF CONTROLS AND PROCEDURES
(i) Review periodically a report from the Trust's chief executive
officer, chief financial officer and Independent Auditor, at least annually,
regarding the following:
(A) all significant deficiencies in the design or operation of
internal controls of the Trust, any entity in the investment
company complex (as such term is defined in Regulation S-X
promulgated by the SEC) that is responsible for the financial
reporting or operations of the Trust (the "RELATED ENTITIES"),
or, to the knowledge of such persons, other service providers,
which could adversely affect the Trust's ability to record,
process, summarize, and report financial data, including any
material weaknesses in internal controls identified by the
Independent Auditor;
A-7
(B) any fraud, whether or not material, that involves management
or other employees of the Trust, the Related Entities, or, to
the knowledge of such persons, other service providers to the
Trust who have a significant role in the Trust's internal
controls; and
(C) any significant changes in internal controls or in other
factors that could significantly affect internal controls,
including any corrective actions with regard to significant
deficiencies and material weaknesses related to the Trust, the
Related Entities, or, to the knowledge of such persons, other
service providers to the Trust.
(d) COMPLIANCE
(i) Establish and maintain free and open means of communication between
and among the Board, the Audit Committee, the Independent Auditor, the Trust's
management, including the chief financial officer, management of the Advisor and
the Investment Manager and management of those service providers of the Trust
deemed appropriate by the Audit Committee, including providing such parties with
appropriate opportunities to meet separately and privately with the Audit
Committee on a periodic basis as the Audit Committee may deem necessary or
appropriate;
(ii) Establish procedures for (A) the receipt, retention and treatment of
complaints received by the Trust regarding accounting, internal accounting
controls or auditing matters, and (B) the confidential, anonymous submission by
employees of the Related Entities, other service providers responsible for such
services, including the custodian and transfer agent or other persons of
concerns regarding questionable accounting or auditing matters; and
(iii) Secure independent expert advice to the extent the Audit Committee
determines it to be appropriate, including retaining, with or without approval
of the Board, independent counsel, accountants, consultants or others, to assist
the Audit Committee in fulfilling its duties and responsibilities, the cost of
such independent expert advisors to be borne by the Trust.
(e) MISCELLANEOUS
(i) Prepare an annual performance evaluation of the Audit Committee,
which evaluation must compare the performance of the Audit Committee with the
requirements of this Joint Audit Committee Charter, and set forth the goals and
objectives of the Audit Committee for the upcoming year. The evaluation will
include a review and assessment of the adequacy of this Audit Committee Joint
Charter. The performance evaluation by the
A-8
Audit Committee shall be conducted in such manner as the Audit Committee deems
appropriate;
(ii) Report regularly to the Board on its activities, as appropriate; and
(iii) Perform such additional activities, and consider such other matters,
within the scope of its duties and responsibilities, as the Audit Committee or
the Board deems necessary or appropriate.
VI. PRE-APPROVAL PROCEDURES
The Audit Committee shall prepare written pre-approval procedures pursuant
to which it may pre-approve Covered Services. The Audit Committee, in its
discretion, may elect to delegate to one or more of its members authority to
pre-approve Covered Services between regularly scheduled meetings of the Audit
Committee. The Audit Committee shall review and approve its pre-approval
procedures at least annually. The pre-approval procedures in effect from
time-to-time shall be attached to this Audit Committee Charter as Annex A.
VII. REPORTING
The Audit Committee shall report its activities to the Board on a regular
basis, so that the Board is kept informed of its activities on a current basis.
In connection therewith, the Audit Committee will review with the Board any
issues that arise with respect to the quality or integrity of the Trust's
financial statements, the Trust's compliance with legal or regulatory
requirements, the performance and independence of the Independent Auditors. In
particular, the Audit Committee will also report to the Board its conclusions
with respect to matters the Audit Committee considers to be of interest or the
Board requests. Reports to the Board may take the form of an oral report by the
chairperson of the Audit Committee or any other member of the Audit Committee
designed by the Audit Committee to make this report.
The Audit Committee shall prepare the report required by the rules of the
SEC to be included in the Trust's annual proxy statement and determine to its
satisfaction that the Audit Committee has: (a) reviewed and discussed the
audited financial statements with management of the Trust; (b) discussed with
the Independent Auditor the matters required to be discussed by the Statements
on Auditing Standards No. 61, as amended; (c) received the written disclosures
and the letter from the Independent Auditor required by ISB Standard No. 1 and
have discussed with the Independent Auditor the auditor's independence; and (d)
made a recommendation to the Board as to whether the financial statements be
included in the Trust's annual report for the past fiscal year, as filed with
the SEC.
A-9
VIII. RESOURCES
The Board shall ensure that the Audit Committee has adequate resources, as
determined by the Audit Committee, with which to discharge its responsibilities,
including for the payment of (a) compensation (i) to any firm of independent
auditors engaged for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for the Trust, and (ii) to any
advisors employed by the Audit Committee, including independent counsel,
consultants or other advisors, as the Audit Committee determines necessary to
carry out its duties, and (b) ordinary administrative expenses of the Audit
Committee that are necessary or appropriate in carrying out its duties.
IX. LIMITS ON ROLE OF AUDIT COMMITTEE
While the Audit Committee has the duties and responsibilities set forth in
this Joint Audit Committee Charter, the Audit Committee is not responsible for:
- planning or conducting the audit or for determining whether the
Trust's financial statements are complete and accurate and are in
accordance with generally accepted accounting principles;
- determining whether the Form N-CSR filed by the Trust with the SEC
contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by the report;
- determining whether the Trust's financial statements and other
financial information included in the Form N-CSR fairly present in
all material respects the financial condition, results of
operations, changes in net assets and cash flows of the Trust as of,
and for, the periods presented in the Form N-CSR; or
- establishing, designing or maintaining disclosure controls and
procedures for the Trust.
In fulfilling its responsibilities hereunder, it is recognized that members
of the Audit Committee are not full-time employees of the Trust, the Advisor or
the Investment Manager. The Audit Committee and its members do not have a duty
or responsibility to conduct "field work" or other types of auditing or
accounting reviews or procedures or to set auditor independence standards, and
each member of the Audit Committee shall be
A-10
entitled to rely on (a) the integrity of those persons and organizations within
and outside the Trust, the Advisor, the Investment Manager and service providers
to the Trust from which it receives information, (b) the accuracy of the
financial and other information provided to the Audit Committee absent actual
knowledge to the contrary (which shall be promptly reported to the Board) and
(c) statements made by management or third parties as to any information
technology, internal audit and other non-audit services provided by the
Independent Auditor to the Trust.
A-11
ANNEX A
AUDIT COMMITTEE PRE-APPROVAL POLICY
OF
ADVENT/CLAYMORE ENHANCED GROWTH & INCOME FUND
AS ADOPTED BY THE AUDIT COMMITTEE
MARCH 30, 2004
STATEMENT OF PRINCIPLES
The Audit Committee (the "AUDIT COMMITTEE") of the Board of Trustees (the
"BOARD") of Advent/Claymore Enhanced Growth & Income Fund (the "TRUST,") is
required to pre-approve all Covered Services (as defined in the Audit Committee
Charter) in order to assure that the provision of the Covered Services does not
impair the auditors' independence. Unless a type of service to be provided by
the Independent Auditor (as defined in the Audit Committee Charter) is
pre-approved in accordance with the terms of this Audit Committee Pre-Approval
Policy (the "POLICY"), it will require specific pre-approval by the Audit
Committee or by any member of the Audit Committee to which pre-approval
authority has been delegated.
This Policy and the appendices to this Policy describe the Audit,
Audit-Related, Tax and All Other services that are Covered Services and that
have been pre-approved under this Policy. The appendices hereto sometimes are
referred to herein as the "SERVICE PRE-APPROVAL DOCUMENTS". The term of any such
pre-approval is 12 months from the date of pre-approval, unless the Audit
Committee specifically provides for a different period. At its June meeting of
each calendar year, the Audit Committee will review and re-approve this Policy
and approve or re-approve the Service Pre-Approval Documents for that year,
together with any changes deemed necessary or desirable by the Audit Committee.
The Audit Committee may, from time to time, modify the nature of the services
pre-approved, the aggregate level of fees pre-approved or both. The Audit
Committee hereby directs that each version of this Policy and the Service
Pre-Approval Documents approved, re-approved or amended from time to time be
maintained with the books and records of the Trust.
A-1-1
DELEGATION
In the intervals between the scheduled meetings of the Audit Committee, the
Audit Committee delegates pre-approval authority under this Policy to the
Chairman of the Audit Committee (the "CHAIRMAN"). The Chairman shall report any
pre-approval decisions under this Policy to the Audit Committee at its next
scheduled meeting. At each scheduled meeting, the Audit Committee will review
with the Independent Auditor the Covered Services pre-approved by the Chairman
pursuant to delegated authority, if any, and the fees related thereto. Based on
these reviews, the Audit Committee can modify, at its discretion, the
pre-approval originally granted by the Chairman pursuant to delegated authority.
This modification can be to the nature of services pre-approved, the aggregate
level of fees approved, or both. The Audit Committee expects pre-approval of
Covered Services by the Chairman pursuant to this delegated authority to be the
exception rather than the rule and may modify or withdraw this delegated
authority at any time the Audit Committee determines that it is appropriate to
do so.
PRE-APPROVED FEE LEVELS
Fee levels for all Covered Services to be provided by the Independent
Auditor and pre-approved under this Policy will be established annually by the
Audit Committee and set forth in the Service Pre-Approval Documents. Any
increase in pre-approved fee levels will require specific pre-approval by the
Audit Committee (or the Chairman pursuant to delegated authority).
AUDIT SERVICES
The terms and fees of the annual Audit services engagement for the Trust
are subject to the specific pre-approval of the Audit Committee. The Audit
Committee will approve, if necessary, any changes in terms, conditions or fees
resulting from changes in audit scope, Trust structure or other matters.
In addition to the annual Audit services engagement specifically approved
by the Audit Committee, any other Audit services for the Trust not listed in the
Service Pre-Approval Document for the respective period must be specifically
pre-approved by the Audit Committee (or the Chairman pursuant to delegated
authority).
AUDIT-RELATED SERVICES
Audit-Related services are assurance and related services that are not
required for the audit, but are reasonably related to the performance of the
audit or review of the financial statements of the Trust and, to the extent they
are Covered Services, the other Covered Entities (as defined in the Audit
Committee Charter) or that are traditionally performed by the Independent
Auditor. Audit-Related services that are Covered Services and are not listed in
the Service Pre-Approval Document for the respective period must be specifically
pre-approved by the Audit Committee (or the Chairman pursuant to delegated
authority).
A-1-2
TAX SERVICES
The Audit Committee believes that the Independent Auditor can provide Tax
services to the Covered Entities such as tax compliance, tax planning and tax
advice without impairing the auditor's independence. However, the Audit
Committee will not permit the retention of the Independent Auditor in connection
with a transaction initially recommended by the Independent Auditor, the sole
business purpose of which may be tax avoidance and the tax treatment of which
may not be supported in the Internal Revenue Code and related regulations. Tax
services that are Covered Services and are not listed in the Service
Pre-Approval Document for the respective period must be specifically
pre-approved by the Audit Committee (or the Chairman pursuant to delegated
authority).
ALL OTHER SERVICES
All Other services that are Covered Services and are not listed in the
Service Pre-Approval Document for the respective period must be specifically
pre-approved by the Audit Committee (or the Chairman pursuant to delegated
authority).
PROCEDURES
Requests or applications to provide Covered Services that require approval
by the Audit Committee (or the Chairman pursuant to delegated authority) must be
submitted to the Audit Committee or the Chairman, as the case may be, by both
the Independent Auditor and the Chief Financial Officer of the respective
Covered Entity, and must include a joint statement as to whether, in their view,
(a) the request or application is consistent with the SEC's rules on auditor
independence and (b) the requested service is or is not a non-audit service
prohibited by the SEC. A request or application submitted to the Chairman
between scheduled meetings of the Audit Committee should include a discussion as
to why approval is being sought prior to the next regularly scheduled meeting of
the Audit Committee.
A-1-3
APPENDIX B
ADVENT CLAYMORE CLOSED END FUNDS
JOINT NOMINATING COMMITTEE CHARTER
There shall be a nominating committee of the Board of Trustees which shall
be composed of all of the Trustees (the "Independent Trustees") who are not
interested persons of any investment advisor to the investment companies in the
above-named fund complex (each, a "Fund").
The function of the nominating committee is to search for appropriate
candidates for nomination to the Board of Trustees when vacancies occur or the
Board is seeking to increase the size of the Board, to review the qualifications
of individuals recommended as potential nominees, to develop procedures and
policies regarding minimum qualifications of Trustees, sources of
recommendations and processes for considering recommendations, and to make
recommendations to the full Board with respect to candidates for the Board.
The nominating committee will consider Trustee candidates recommended by
shareholders. In considering candidates submitted by shareholders, the
nominating committee will take into consideration the needs of each Board and
the qualifications of the candidate. The nominating committee may also take into
consideration the number of shares held by the recommending shareholder and the
length of time that such shares have been held. To have a candidate considered
by the nominating committee, a shareholder must submit the recommendation in
writing and must include:
- The name of the shareholder and evidence of the person's ownership of
shares of the applicable Trust(s), including the number of shares owned and
the length of time of ownership; and
- The name of the candidate, the candidate's resume or a listing of his or
her qualifications to be a Trustee of the Trust(s) and the person's consent
to be named as a Trustee if selected by the nominating committee and
nominated by the Board.
The nominating committee believes that the minimum qualifications for
serving as a Trustee of the Fund(s) are that a candidate demonstrate, by
significant accomplishment in his or her field, an ability to make a meaningful
contribution to the Board's oversight of the business and affairs of the Fund(s)
and have an impeccable record and reputation for honest and ethical conduct in
both his or her professional and personal activities. In addition, the
nominating committee examines a candidate's specific experiences and skills,
time availability in light of other commitments, potential conflicts of interest
and independence from management and the Fund(s). The nominating committee also
seeks to have the Board represent a diversity of backgrounds and experience.
The nominating committee may, if it so chooses, also review periodically
the functioning of the Board and Trustees subject to re-election.
The nominating committee shall act by majority of its members present at a
meeting at which at least half of its members are present or by written consent
of a majority of its members.
The nominating committee is authorized to consult independent counsel and
other service providers and to subscribe for or otherwise obtain information it
considers useful in performing is responsibilities.
The nominating committee shall review and evaluate its own performance on
an annual basis.
The nominating committee shall review and reassess the adequacy of this
charter on an annual basis and propose any changes for approval by the
Independent Trustees.
B-1