SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Section 240.14a-12
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MADISON/CLAYMORE COVERED CALL FUND
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(Names of Registrant As Specified in its Charters)
Payment of Filing Fee (Check the appropriate box):
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(1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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|_| 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
1
[MADISON INVESTMENT ADVISORS LOGO]
[CLAYMORE LOGO]
MADISON/CLAYMORE COVERED CALL FUND
2455 CORPORATE WEST DRIVE
LISLE, ILLINOIS 60532
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 17, 2006
Notice is hereby given to the holders of common shares of beneficial
interest, par value $0.01 per share ("Shares") of Madison/Claymore Covered Call
Fund (the "Fund") that the annual meeting of Shareholders of the Fund (the
"Annual Meeting") will be held at the offices of the Fund, 2455 Corporate West
Drive, Lisle, Illinois 60532, on Thursday, August 17, 2006, at 11:30 a.m.
Central time. The Annual Meeting is being held for the following purposes:
1. To elect three Trustees as Class II Trustees to serve until the Fund's
2009 annual meeting of Shareholders or until successors shall have
been elected and qualified;
2. To transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
THE BOARD OF TRUSTEES (THE "BOARD") OF THE FUND, INCLUDING THE INDEPENDENT
TRUSTEES, UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" EACH PROPOSAL.
The Board has fixed the close of business on July 3, 2006 as the record
date for the determination of Shareholders entitled to notice of, and to vote
at, the Annual Meeting. WE URGE YOU TO MARK, SIGN, DATE, AND MAIL THE ENCLOSED
PROXY IN THE POSTAGE-PAID ENVELOPE PROVIDED OR RECORD YOUR VOTING INSTRUCTIONS
VIA TELEPHONE SO YOU WILL BE REPRESENTED AT THE ANNUAL MEETING.
By order of the
Board of Trustees
/s/ Nicholas Dalmaso
Nicholas Dalmaso, Chief Legal and Executive Officer
Lisle, Illinois
July 19, 2006
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 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 ANNUAL MEETING, HOWEVER, WILL NOT REVOKE ANY
PREVIOUSLY SUBMITTED PROXY. YOUR VOTE IS EXTREMELY IMPORTANT. NO MATTER HOW
MANY OR HOW FEW SHARES YOU OWN, PLEASE SEND IN YOUR PROXY CARD (OR VOTE BY
TELEPHONE PURSUANT TO THE INSTRUCTIONS CONTAINED ON THE PROXY CARD) TODAY.
MADISON/CLAYMORE COVERED CALL FUND
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 17, 2006
This document gives you information you need to vote on the matters listed
on the accompanying Notice of Annual Meeting of Shareholders ("Notice of Annual
Meeting"). Much of the information in this proxy statement ("Proxy Statement")
is required under rules of the Securities and Exchange Commission ("SEC"); some
of it is technical. If there is anything you don't understand, please contact us
at our toll-free number, (866) 345-7999.
This Proxy Statement is furnished to the holders of common shares of
beneficial interest, par value $0.01 per share ("Shares"), of Madison/Claymore
Covered Call Fund (the "Fund") in connection with the solicitation by the Board
of Trustees of the Fund (the "Board") of proxies to be voted at the annual
meeting of Shareholders of the Fund to be held on Thursday, August 17, 2006, and
any adjournment or postponement thereof (the "Annual Meeting"). The Annual
Meeting will be held at the offices of the Fund, 2455 Corporate West Drive,
Lisle, Illinois 60532 on August 17, 2006, at 11:30 a.m. Central time. This Proxy
Statement and the enclosed proxy card are first being sent to the Fund's
Shareholders on or about July 21, 2006.
- WHY IS A SHAREHOLDER MEETING BEING HELD?
The Fund's Shares are listed on the New York Stock Exchange (the
"NYSE"), which requires the Fund to hold a meeting of Shareholders to
elect Trustees each fiscal year.
- WHAT PROPOSAL WILL BE VOTED ON AT THE ANNUAL MEETING?
Shareholders of the Fund are being asked to vote on the following
proposal at the Annual Meeting:
To elect three Trustees as Class II Trustees to serve until the
Fund's 2009 annual meeting of Shareholders or until successors
shall have been elected and qualified.
- WILL YOUR VOTE MAKE A DIFFERENCE?
YES! Your vote is important and could make a difference in the
governance of the Fund, no matter how many Shares you own.
- WHO IS ASKING FOR YOUR VOTE?
The enclosed proxy is solicited by the Board for use at the Annual
Meeting to be held on Thursday, August 17, 2006, and, if the Annual
Meeting is adjourned or postponed, at any later meetings, for the
purposes stated in the Notice of Annual Meeting (see previous page).
The Notice of Annual Meeting, the proxy and this Proxy Statement are
being mailed on or about July 21, 2006.
- HOW DOES THE BOARD RECOMMEND THAT SHAREHOLDERS VOTE ON THE PROPOSAL?
The Board recommends that you vote "FOR" the proposal.
- WHO IS ELIGIBLE TO VOTE?
Shareholders of record of the Fund at the close of business on July 3,
2006 are entitled to be present and to vote at the Annual Meeting or
any adjournment or postponement thereof. Each Share is entitled to one
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 the
Board's recommendation. If any other business is brought before the
Annual Meeting, your Shares will be voted at the proxies' discretion
unless you specify otherwise in your proxy.
- Shareholders who execute proxies may revoke them at any time before
they are voted by filing with the Fund a written notice of
revocation, by delivering a duly executed proxy bearing a later date
or by attending the Meeting and voting in person. Merely attending
the Annual Meeting, however, will not revoke any previously submitted
proxy.
- HOW MANY SHARES OF THE FUND WERE OUTSTANDING AS OF THE RECORD DATE?
At the close of business on July 3, 2006, the Fund had 18,973,609
Shares outstanding.
1
THE PROPOSAL: ELECTION OF TRUSTEES
The Fund's Shares are listed on the NYSE, which requires the Fund to hold a
meeting of Shareholders to elect Trustees each fiscal year. Therefore,
Shareholders of the Fund are being asked to elect three Trustees (Philip E.
Blake, Nicholas Dalmaso and James R. Imhoff, Jr.) as Class II Trustees to serve
until the Fund's 2009 annual meeting of Shareholders or until respective
successors shall have been elected and qualified.
COMPOSITION OF THE BOARD OF TRUSTEES
The Trustees of the Fund are classified into three classes of Trustees:
Class I Trustees, Class II Trustees and Class III Trustees. Assuming each of the
nominees is elected at the Annual Meeting, the Board will be constituted as
follows:
CLASS I TRUSTEES
-Mr. Randall C. Barnes and Mr. Frank E. Burgess are the Class I Trustees.
It is currently anticipated that the Class I Trustees will next stand for
election at the Fund's 2008 annual meeting of Shareholders.
CLASS II TRUSTEES
-Mr. Philip E. Blake, Mr. Nicholas Dalmaso and Mr. James R. Imhoff, Jr. are
the Class II Trustees. Mr. Blake, Mr. Dalmaso and Mr. Imhoff are standing
for election at the Annual Meeting. It is currently anticipated that the
Class II Trustees will next stand for election at the Fund's 2009 annual
meeting of Shareholders.
CLASS III TRUSTEES
-Mr. Ronald A. Nyberg, Mr. Ronald E. Toupin, Jr. and Mr. Lorence D. Wheeler
are the Class III Trustees. It is currently anticipated that the Class III
Trustees will stand for election at the Fund's 2007 annual meeting of
Shareholders.
Generally, the Trustees of only one class are elected at each annual
meeting, so that the regular term of only one class of Trustees will expire
annually and any particular Trustee stands for election only once in each three
year period. Each Class II Trustee will hold office for three years or until his
successor shall have been elected and qualified. The other Trustees of the Fund
will continue to serve under their current terms as described above. Unless
authority is withheld, it is the intention of the persons named in the proxy to
vote the proxy "FOR" the election of the Class II Trustees named above. Each
Class II Trustee nominee has indicated that he has consented to serve as a
Trustee if elected at the Annual Meeting. If a designated nominee declines or
otherwise becomes unavailable for election, however, the proxy confers
discretionary power on the persons named therein to vote in favor of a
substitute nominee or nominees.
Certain information concerning the Trustees and officers of the Fund is set
forth in the tables below. The "interested" Trustees (as defined in Section
2(a)(19) of the Investment Company Act of 1940, as amended (the "1940 Act")) are
indicated below. Independent Trustees are those who are not interested persons
of the Fund, the Fund's investment adviser, Claymore Advisors, LLC ("Claymore"
or the "Adviser"), or the Fund's investment manager, Madison Asset Management,
LLC ("Madison" or the "Investment Manager"), and comply with the definition of
"independent" (as defined in Rule 10A-3 of the Securities Exchange Act of 1934)
(the "Independent Trustees").
The Fund is part of a fund complex (referred to herein as the "Fund
Complex") comprised of fourteen closed-end funds, including the Fund, and five
open-end funds.
2
TRUSTEES
NUMBER OF
TERM OF PORTFOLIOS
OFFICE AND IN FUND
POSITION(S) LENGTH COMPLEX
HELD TIME OF PRINCIPAL OCCUPATION OVERSEEN OTHER DIRECTORSHIPS
NAME, ADDRESS(1) AND AGE WITH FUND SERVED(2) DURING THE PAST FIVE YEARS BY TRUSTEE HELD BY TRUSTEE
------------------------ ----------- ------------- ---------------------------- ------------ -----------------------------
INDEPENDENT TRUSTEES:
Randall C. Barnes Trustee Trustee since Formerly, Senior Vice 14 None.
Year of birth: 1951 2004 President, Treasurer
(1993-1997), President,
Pizza Hut International
(1991-1993) and Senior Vice
President, Strategic
Planning and New Business
Development (1987-1990) of
PepsiCo, Inc. (1987-1997).
Philip E. Blake(3) Trustee Trustee since Private Investor. 1 Director, Madison
Year of Birth: 1944 2004 Newspapers, Inc., Nerites,
Inc. Trustee, Madison
1 South Pinckney Street Strategic Sector Premium
Suite 501 Fund and funds in the
Madison, WI 53703 Mosaic fund complex.
James R. Imhoff, Jr.(3) Trustee Trustee since Chairman and CEO of First 1 Director, Park Bank. Trustee,
Year of Birth: 1944 2004 Weber Group. Madison Strategic Sector
Premium Fund and funds in
5250 East Terrace Drive the Mosaic fund complex.
Madison, WI 53718
Ronald A. Nyberg Trustee Trustee since Principal of Ronald A. 17 None.
Year of birth: 1953 2004 Nyberg, Ltd., a law firm
specializing in corporate
law, estate planning and
business transactions
(2000-present). Formerly,
Executive Vice President,
General Counsel and
Corporate Secretary of Van
Kampen Investments
(1982-1999).
Ronald E. Toupin, Jr. Trustee Trustee since Formerly Vice President, 15 None.
Year of birth: 1958 2004 Manager and Portfolio
Manager of Nuveen Asset
Management (1998-1999), Vice
President of Nuveen
Investment Advisory
Corporation (1992-1999),
Vice President and Manager
of Nuveen Unit Investment
Trusts (1991-1999), and
Assistant Vice President and
Portfolio Manager of Nuveen
Unit Trusts (1988-1999),
each of John Nuveen &
Company, Inc. (asset
manager) (1982-1999).
Lorence Wheeler Trustee Trustee since Formerly, President of 1 Director, Grand Mountain
Year of Birth: 1938 2004 Credit Union Benefits Bank FSB. Trustee, Madison
Strategic Sector Premium
135 Grand County Road Services Inc.; Pension Fund and funds in the
Tabernash, CO 80478 Specialist for CUNA Mutual Mosaic fund complex.
Group.
3
NUMBER OF
TERM OF PORTFOLIOS
OFFICE AND IN FUND
POSITION(S) LENGTH COMPLEX
HELD TIME OF PRINCIPAL OCCUPATION OVERSEEN OTHER DIRECTORSHIPS
NAME, ADDRESS(1) AND AGE WITH FUND SERVED(2) DURING THE PAST FIVE YEARS BY TRUSTEE HELD BY TRUSTEE
------------------------ ----------- ------------- ---------------------------- ------------ -----------------------------
INTERESTED TRUSTEES:
Frank E. Burgess Trustee, Trustee since Founder, President and CEO 1 Director, Capital Bankshares,
Year of Birth: 1942 Senior Vice 2004 of Madison Investment Inc., Outrider Foundation,
550 Science Drive President Advisors, Inc. Inc., Santa Barbara
Madison, WI 53711 (1974-present) and of Community Bankcorp.
Madison Asset Management, Trustee, Madison Strategic
LLC. Sector Premium Fund and
funds in the Mosaic fund
complex.
Nicholas Dalmaso+(3) Trustee, Trustee since Senior Managing Director and 17 None.
Year of birth: 1965 Chief Legal 2004 General Counsel of Claymore
and Advisors, LLC and Claymore
Executive Securities, Inc.
Officer (2001-present). Formerly,
Assistant General Counsel,
John Nuveen and Company Inc.
(1999-2001). Formerly, Vice
President and Associate
General Counsel of Van
Kampen Investments, Inc.
(1992-1999).
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+ "Interested person" of the Fund as defined in the 1940 Act. Mr. Burgess is
an interested person of the Fund because he is an officer of the
Investment Manager and certain of its affiliates. Mr. Dalmaso is an
interested person of the Fund because he is an officer of the Adviser and
certain of its affiliates.
(1) The business address of each Trustee of the Fund is 2455 Corporate West
Drive, Lisle, Illinois 60532, unless otherwise noted.
(2) 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.
(3) Nominee for election as a Trustee at the Annual Meeting.
4
EXECUTIVE OFFICERS
The following information relates to the executive officers of the Fund who
are not Trustees. The officers are appointed by the Trustees and serve until
their respective successors are chosen and qualified. The Fund's officers
receive no compensation from the Fund but may also be officers or employees of
the Adviser, the Investment Manager or affiliates of the Adviser or the
Investment Manager and may receive compensation in such capacities.
OFFICERS:
PRINCIPAL OCCUPATION DURING
NAME, ADDRESS(1) AND AGE TITLE THE PAST FIVE YEARS
------------------------ -------------------------- ------------------------------------------------------------
Steven M. Hill Chief Financial Officer, Senior Managing Director and Chief Financial Officer (2005-
Year of birth: 1964 Chief Accounting Officer present), Managing Director (2003-2005) of Claymore
and Treasurer Advisors, LLC and Claymore Securities, Inc.; Chief Financial
Officer, Chief Accounting Officer and Treasurer of certain
funds in the Fund Complex. Previously, Treasurer of
Henderson Global Funds and Operations Manager for Henderson
Global Investors (NA) Inc. (2002-2003); Managing Director,
FrontPoint Partners LLC (2001-2002); Vice President, Nuveen
Investments (1999-2001); Chief Financial Officer, Skyline
Asset Management LP, (1999); Vice President, Van Kampen
Investments and Assistant Treasurer, Van Kampen mutual funds
(1989-1999).
Melissa Nguyen Secretary Vice President of Claymore Securities, Inc. (2005-present).
Year of birth: 1978 Secretary of certain funds in the Fund Complex. Formerly,
Associate, Vedder, Price, Kaufman & Kammholz, P.C.
(2003-2005).
Jay Sekelsky Vice President Managing Director of Madison Investment Advisors, Inc. and
Year of Birth: 1959 Vice President of Madison Asset Management, LLC. Vice
President of Madison Strategic Sector Premium Fund and funds
550 Science Drive in the Mosaic fund complex.
Madison, WI 53711
Kay Frank Vice President Managing Director of Madison Investment Advisors, Inc. Vice
Year of Birth: 1960 President of Madison Asset Management. Trustee and President
of Madison Strategic Sector Premium Fund and funds in the
550 Science Drive Mosaic fund complex.
Madison, WI 53711
Rita Bauer Vice President Vice President of Madison Investment Advisors, Inc. and
Year of birth: 1959 Madison Asset Management, LLC.
550 Science Drive
Madison, WI 53711
Ray DiBernardo Vice President Vice President of Madison Investment Advisors, Inc.
Year of Birth: 1962 Formerly, Vice President and Portfolio Manager of Concord
Investment Company.
550 Science Drive
Madison, WI 53711
Deborah Pines Vice President Director of Alternative Funds of Madison Investment
Year of Birth: 1973 Advisors, Inc. Formerly, Senior Investigator, Chicago Board
of Trade.
550 Science Drive
Madison, WI 53711
Bruce Saxon Chief Compliance Officer Vice President - Fund Compliance Officer of Claymore
Year of birth: 1957 Securities, Inc. (Feb. 2006-present). Chief Compliance
Officer of certain funds in the Fund Complex. Chief
Compliance Officer/Assistant Secretary of Harris Investment
Management, Inc. (2003-2006). Director-Compliance of
Harrisdirect LLC (1999-2003).
Jim Howley Assistant Treasurer Vice President, Fund Administration of Claymore Securities,
Year of birth: 1972 Inc. (2004-present). Assistant Treasurer of certain funds in
the Fund Complex. Previously, Manager, Mutual Fund
Administration of Van Kampen Investments, Inc.
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(1) The business address of each officer of the Fund is 2455 Corporate West
Drive, Lisle, Illinois 60532, unless otherwise noted.
5
BOARD COMMITTEES
The Trustees have determined that the efficient conduct of the Trustees'
affairs makes it desirable to delegate responsibility for certain specific
matters to committees of the Board. The committees meet as often as necessary,
either in conjunction with regular meetings of the Trustees or otherwise. Two of
the committees of the Board are the Audit Committee and the Nominating and
Governance Committee.
AUDIT COMMITTEE The Board has an Audit Committee, which is charged with
selecting an independent registered public accounting firm for the Fund and
reviewing accounting matters with the Fund's independent registered public
accounting firm. Each member of the Audit Committee is an Independent Trustee
as defined above and also meets the additional independence requirements for
audit committee members as defined by the NYSE.
The Audit Committee presents the following report:
The Audit Committee has performed the following functions: (i) the Audit
Committee reviewed and discussed the audited financial statements of the Fund
with management of the Fund, (ii) the Audit Committee discussed with the
Fund's independent registered public accounting firm the matters required to
be discussed by the Statement on Auditing Standards No. 61, (iii) the Audit
Committee received the written disclosures and the letter from the Fund's
independent registered public accounting firm required by Indendence
Standards Board Standard No. 1 and has discussed with the Fund's independent
registered public accounting firm the independence of the Fund's independent
registered public accounting firm and (iv) the Audit Committee recommended to
the Board of Trustees of the Fund that the financial statements be included
in the Fund's Annual Report for the past fiscal period.
The members of the Audit Committee are Randall C. Barnes, Philip E.
Blake, James R. Imhoff, Jr., Ronald A. Nyberg, Ronald E. Toupin, Jr. and
Lorence D. Wheeler.
The Audit Committee is governed by a written charter, the most recent
version of which was approved by the Board on August 18, 2005 (the "Audit
Committee Charter"). In accordance with proxy rules promulgated by the SEC, a
fund's audit committee charter is required to be filed at least once every three
years as an exhibit to a fund's proxy statement. The Fund's Audit Committee
Charter is attached hereto as Appendix A.
NOMINATING AND GOVERNANCE COMMITTEE The Board has a Nominating and
Governance Committee, which is composed of Randall C. Barnes, Philip E.
Blake, James R. Imhoff, Jr., Ronald A. Nyberg, Ronald E. Toupin, Jr. and
Lorence D. Wheeler, each of whom is an Independent Trustee as defined above
and is "independent" as defined by NYSE listing standards.
The Nominating and Governance Committee is governed by a written charter
(the "Nominating and Governance Committee Charter"). In accordance with proxy
rules promulgated by the SEC, a fund's nominating committee charter is required
to be filed at least once every three years as an exhibit to a fund's proxy
statement. The Fund's Nominating and Governance Committee Charter was filed as
Appendix B to the Fund's 2005 Proxy Statement.
The Nominating and Governance Committee (i) evaluates and recommends all
candidates for election or appointment as members of the Board and recommends
the appointment of members and chairs of each committee of the Board, (ii)
reviews policy matters affecting the operation of the Board and committees of
the Board, and (iii) periodically evaluates the effectiveness of the Board
and committees of the Board. In considering Trustee nominee candidates, the
Nominating and Governance Committee requires that Trustee candidates have a
college degree or equivalent business experience and may take into account a
wide variety of factors in considering Trustee candidates, including (but not
limited to): availability and commitment of a candidate to attend meetings
and perform the responsibilities of a Trustee, relevant experience,
educational background, financial expertise, the candidate's ability,
judgment and expertise and overall diversity of the Board's composition. The
Nominating and Governance Committee may consider candidates recommended by
various sources, including (but not limited to): the Fund's Trustees,
officers, investment advisers and shareholders. The Nominating and
Governance Committee may, but is not required to, retain a third party
search firm to identify potential candidates.
The Nominating and Governance Committee will consider Trustee candidates
recommended by the Fund's Shareholders. The Committee will consider and
evaluate Trustee nominee candidates properly submitted by Shareholders on the
same basis as it considers and evaluates candidates recommended by other
sources. To have a candidate considered by the Nominating and Governance
Committee, a Shareholder must submit the recommendation in writing and must
include the information required by the "Procedures for Shareholders to
Submit Nominee Candidates," which are set forth as Appendix A to the Fund's
Nominating and Governance Committee Charter which was filed as Appendix B to
the Fund's 2005 Proxy Statement. Shareholder
6
recommendations must be sent to the Fund's Secretary, c/o Claymore Advisors,
LLC, 2455 Corporate West Drive, Lisle, Illinois 60532.
The nominees for election at the Annual Meeting currently serve as
Trustees and were unanimously nominated by the Board of Trustees and the
Nominating and Governance Committee.
SHAREHOLDER COMMUNICATIONS
Shareholders and other interested parties may contact the Board or any
member of the Board by mail. To communicate with the Board or any member of the
Board, correspondence should be addressed to the Board of Trustees or the Board
members with whom you wish to communicate by either name or title. All such
correspondence should be sent c/o the Fund's Secretary, c/o Claymore Advisors,
LLC, 2455 Corporate West Drive, Lisle, Illinois 60532.
TRUSTEE BENEFICIAL OWNERSHIP OF SECURITIES
As of July 3, 2006, each Trustee beneficially owned equity securities of
the Fund and other funds in the Fund Complex overseen by the Trustee in the
dollar range amounts as specified below:
DOLLAR RANGE OF EQUITY AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES
NAME OF TRUSTEE SECURITIES IN THE FUND OVERSEEN BY TRUSTEES IN THE FUND COMPLEX
--------------- ---------------------------- -----------------------------------------------
INDEPENDENT TRUSTEES:
Randall C. Barnes over $100,000 over $100,000
Philip E. Blake $10,001-$50,000 $10,001-$50,000
James R. Imhoff, Jr. $50,001-$100,000 $50,001-$100,000
Ronald A. Nyberg $1-$10,000 over $100,000
Ronald E. Toupin, Jr. 0 0
Lorence D. Wheeler 0 0
INTERESTED TRUSTEES:
Frank E. Burgess over $100,000 over $100,000
Nicholas Dalmaso 0 0
As of July 3, 2006, each Trustee and the Trustees and officers of the Fund
as a group owned less than 1% of the outstanding Shares of the Fund.
BOARD MEETINGS
During the Fund's fiscal year ended December 31, 2005, the Board held 5
meetings, the Fund's Audit Committee held 2 meetings and the Fund's Nominating
and Governance Committee held 3 meetings.
Each Trustee attended at least 75% of the meetings of the Board (and any
committee thereof on which he serves) held during the Fund's fiscal year ended
December 31, 2005. It is the Fund's policy to encourage Trustees to attend
annual Shareholders' meetings.
TRUSTEE COMPENSATION
The Fund pays an annual retainer and fee per meeting attended to each
Trustee who is not affiliated with the Adviser, the Investment Manager or their
respective affiliates and pays an additional annual fee to the chairman of the
Board and of any committee of the Board. The following table provides
information regarding the compensation of the Fund's Trustees for the Fund's
fiscal year ended December 31, 2005. The Fund does not accrue or pay retirement
or pension benefits to Trustees as of the date of this proxy statement.
COMPENSATION TOTAL COMPENSATION
NAME OF BOARD MEMBER(1) FROM THE FUND FROM THE FUND COMPLEX
----------------------- ----------------- ------------------------
Randall C. Barnes $ 22,500 $ 86,750
Philip E. Blake $ 21,000 $ 21,000
James R. Imhoff, Jr. $ 22,500 $ 22,500
Ronald A. Nyberg $ 22,500 $ 231,875
Ronald E. Toupin, Jr. $ 24,000 $ 205,375
Lorence D. Wheeler $ 22,500 $ 22,500
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(1) Trustees not eligible for compensation are not included in the above
table.
7
SHAREHOLDER APPROVAL
The affirmative vote of a majority of the Shares present in person or
represented by proxy and entitled to vote on the Proposal at the Annual Meeting
at which a quorum (i.e., a majority of the Shares entitled to vote on the
Proposal) is present in person or by proxy is necessary to approve the Proposal.
The holders of the Fund's Shares will have equal voting rights (i.e. one vote
per Share).
The Board of the Fund, including the Independent Trustees, unanimously
recommends that you for "FOR ALL" of the nominees for the Board of Trustees
listed in the Proxy Statement.
ADDITIONAL INFORMATION
FURTHER INFORMATION ABOUT VOTING AND THE ANNUAL MEETING
Information regarding how to vote via telephone is included on the
enclosed proxy card.
The Fund's Agreement and Declaration of Trust requires the presence of a
quorum for each matter to be acted upon at the Annual Meeting. Votes withheld
and abstentions will be counted as present for quorum purposes. "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 not be counted as Shares present for quorum purposes
with respect to such matters. Assuming the presence of a quorum, votes withheld
and abstentions will have the same effect as votes against the Proposal and
broker non-votes will have no effect on the outcome 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. IF NO SPECIFICATION IS MADE ON A PROXY CARD,
IT WILL BE VOTED FOR THE PROPOSAL SPECIFIED ON THE PROXY CARD. Shareholders may
revoke their proxies at any time prior to the time they are voted by giving
written notice to the Secretary of the Fund, 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 has fixed the close of business on July 3, 2006 as the record
date for the determination of Shareholders of the Fund entitled to notice of,
and to vote at, the Annual Meeting. Shareholders of the Fund on that date will
be entitled to one vote on each matter to be voted on by the Fund for each Share
held and a fractional vote with respect to fractional Shares with no cumulative
voting rights.
ADVISER AND INVESTMENT MANAGER
Claymore Advisors, LLC, a wholly-owned subsidiary of Claymore Group Inc.,
acts as the Fund's investment adviser. As of May 31, 2006, Claymore managed
approximately $13.5 billion in total assets. Claymore is located at 2455
Corporate West Drive, Lisle, Illinois 60532.
Madison Asset Management, LLC, a wholly owned subsidiary of Madison
Investment Advisors, Inc., acts as the Fund's investment manager and is
responsible for the day-to-day management of the Fund's portfolio. Madison is
located at 550 Science Drive, Madison, Wisconsin 53711. Madison and its
affiliated entities act as investment adviser for individuals, corporations,
pension funds, endowments, insurance companies, mutual funds and closed-end
investment companies, with assets under management exceeding $10.3 billion as
of June 30, 2006.
ADMINISTRATOR
Claymore Advisors, LLC, located at 2455 Corporate West Drive, Lisle,
Illionis 60532, serves as the Fund's administrator.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP ("E&Y") has been selected as the independent registered
public accounting firm by the Audit Committee of the Fund and approved by a
majority of the Fund's Board, including a majority of the Independent Trustees,
to audit the accounts of the Fund for and during the Fund's fiscal year ended in
2005 and fiscal year ending in 2006. The Fund does not know of any direct or
indirect financial interest of E&Y in the Fund.
Representatives of E&Y will attend the Annual Meeting, will have the
opportunity to make a statement if they desire to do so and will be available to
answer questions.
8
AUDIT FEES
The aggregate fees billed to the Fund by E&Y for professional services
rendered for the audit of the Fund's annual financial statements for the
Fund's fiscal year ended December 31, 2005 were approximately $50,000 and for
the Fund's initial fiscal period ended December 31, 2004 were approximately
$37,500.
AUDIT-RELATED FEES
The aggregate fees billed by E&Y and approved by the Audit Committee of
the Fund for assurance and related services reasonably related to the
performance of the audit of the Fund's annual financial statements for the
Fund's fiscal year ended December 31, 2005 were $0 and for the Fund's initial
fiscal period ended December 31, 2004 were $10,000 (such fees relate to
services rendered, and out of pocket expenses incurred, in connection with
the Fund's registration statements, comfort letters and consents). E&Y did
not perform any other assurance and related services that were required to be
approved by the Fund's Audit Committee for such periods.
TAX FEES
The aggregate fees billed by E&Y and approved by the Audit Committee of
the Fund for professional services rendered for tax compliance, tax advice,
and tax planning for the Fund's fiscal year ended December 31, 2005 were
$5,000 and for the Fund's initial fiscal period ended December 31, 2004 were
$2,000 (such fees relate to tax services provided by E&Y in connection with
the Fund's excise tax calculations and review of the Fund's tax returns). E&Y
did not perform any other tax compliance or tax planning services or render
any tax advice that were required to be approved by the Fund's Audit
Committee for such periods.
ALL OTHER FEES
Other than those services described above, E&Y did not perform any other
services on behalf of the Fund for the Fund's fiscal year ended December 31,
2005 and for the Fund's initial fiscal period ended December 31, 2004.
AGGREGATE NON-AUDIT FEES
The aggregate non-audit fees billed by E&Y for services rendered to the
Fund, the Adviser and any entity controlling, controlled by or under common
control with the Adviser that provides ongoing services to the Fund (not
including a sub-adviser whose primary role is portfolio management and is
sub-contracted with or overseen by another investment adviser) that directly
related to the operations and financial reporting of the Fund for the Fund's
fiscal year ended December 31, 2005 were $0 and for the Fund's initial fiscal
period ended December 31, 2004 were $0.
AUDIT COMMITTEE'S PRE-APPROVAL POLICIES AND PROCEDURES
As noted above, the Audit Committee is governed by the Audit Committee
Charter, which includes Pre-Approval Policies and Procedures in Section IV of
such Charter. The Fund's Audit Committee Charter is attached hereto as
Appendix A. The Audit Committee of the Fund has pre-approved all audit and
non-audit services provided by E&Y to the Fund, and all non-audit services
provided by E&Y to the Adviser, or any entity controlling, controlled by, or
under common control with the Adviser that provides ongoing services to the
Fund that are related to the operations of the Fund.
None of the services described above for the Fund's fiscal year ended
December 31, 2005 and the Fund's initial fiscal period ended December 31,
2004 were approved by the Audit Committee pursuant to the pre-approval
exception under Rule 2-01(c)(7)(i)(C) of Regulation S-X promulgated by the
SEC.
PRINCIPAL SHAREHOLDERS
As of July 3, 2006, to the knowledge of the Fund, no person beneficially
owned more than 5% of the voting securities of any class of securities of the
Fund.
FINANCIAL STATEMENTS AND OTHER INFORMATION
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF THE FUND'S MOST RECENT
ANNUAL REPORT AND SEMI-ANNUAL REPORT TO ANY SHAREHOLDER UPON REQUEST. REQUESTS
SHOULD BE DIRECTED TO CLAYMORE SECURITIES, INC., 2455 CORPORATE WEST DRIVE,
LISLE, ILLINOIS 60532, (866) 882-0688.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and Section 30(h)
of the 1940 Act require the Fund's officers and Trustees, certain officers of
the Fund's investment adviser, affiliated persons of the investment
9
adviser, and persons who beneficially own more than ten percent of the Fund's
Shares to file certain reports of ownership ("Section 16 filings") with the
SEC and the New York Stock Exchange. Based upon the Fund's review of the
copies of such forms effecting the Section 16 filings received by it, the
Fund believes that for Fund's fiscal year ended December 31, 2005, all
filings applicable to such persons were completed and filed in a timely
manner.
PRIVACY PRINCIPLES OF THE FUND
The Fund is committed to maintaining the privacy of Shareholders and to
safeguarding their non-public personal information. The following information is
provided to help you understand what personal information the Fund collects, how
the Fund protects that information and why, in certain cases, the Fund may share
information with select other parties.
Generally, the Fund does not receive any non-public personal information
relating to its Shareholders, although certain non-public personal information
of its Shareholders may become available to the Fund. The Fund does not disclose
any non-public personal information about its Shareholders or former
shareholders to anyone, except as permitted by law or as is necessary in order
to service Shareholder accounts (for example, to a transfer agent or third party
administrator).
The Fund restricts access to non-public personal information about the
Shareholders to employees of the Adviser with a legitimate business need for the
information. The Fund maintains physical, electronic and procedural safeguards
designed to protect the non-public personal information of its Shareholders.
DEADLINE FOR SHAREHOLDER PROPOSALS
Shareholder proposals intended for inclusion in the Fund's proxy
statement in connection with the Fund's 2007 annual meeting of Shareholders
pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 (the
"Exchange Act") must be received by the Fund at the Fund's principal
executive offices by March 21, 2007. 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 the Fund at the Fund's principal executive offices not later than
June 6, 2007.
EXPENSES OF PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Fund. Certain officers
of the Fund and certain officers and employees of Claymore or its affiliates
(none of whom will receive additional compensation therefore), may solicit
proxies by telephone, mail, e-mail and personal interviews. Brokerage houses,
banks and other fiduciaries may be requested to forward proxy solicitation
material to their principals to obtain authorization for the execution of
proxies, and will be reimbursed by the Fund for such out-of-pocket expenses.
OTHER MATTERS
The management of the Fund knows of no other matters which are to be
brought before the Annual Meeting. However, if any other matters not now known
properly come before the Annual Meeting, it is the intention of the persons
named in the enclosed form of proxy to vote such proxy in accordance with their
judgment on such matters.
Very truly yours,
/s/ Nicholas Dalmaso
NICHOLAS DALMASO
CHIEF LEGAL AND EXECUTIVE OFFICER
July 19, 2006
10
APPENDIX A
MADISON/CLAYMORE COVERED CALL FUND
AUDIT COMMITTEE CHARTER
APPROVED AUGUST 18, 2005
I. PURPOSE
The Audit Committee is a committee of the Board of the Trust. Its primary
function is to assist the Board in fulfilling certain of its responsibilities.
This Charter sets forth the duties and responsibilities of the Audit Committee.
The Audit Committee serves as an independent and objective party to monitor
the Trust's accounting policies, financial reporting and internal control
system, as well as the work of the independent auditors. The Audit Committee
assists Board oversight of (1) the integrity of the Trust's financial
statements; (2) the Trust's compliance with legal and regulatory requirements;
(3) the independent auditors' qualifications and independence; and (4) the
performance of the Trust's independent auditors. The Audit Committee also serves
to provide an open avenue of communication among the independent auditors, Trust
management, the personnel responsible for internal audit functions and the
Board.
- Trust management has the primary responsibility to establish and
maintain systems for accounting, reporting and internal control.
- The independent auditors have the primary responsibility to plan and
implement a proper audit, including consideration of the Trust's
accounting, reporting and internal control practices.
The Audit Committee may have additional functions and responsibilities as
deemed appropriate by the Board and the Audit Committee.
Although the Audit Committee has the responsibilities and powers set forth
in this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Trust's financial statements are complete and
accurate and have been prepared in accordance with generally accepted accounting
principles.
II. COMPOSITION
The Audit Committee shall be comprised of three or more board members as
determined by the Board, each of whom shall be an independent board member, and
free from any relationship that, in the opinion of the Board, would interfere
with the exercise of his or her independent judgment as a member of the Audit
Committee. For purposes of the Audit Committee, a board member is independent
if:
- he or she is not an "interested person" of the Trust as that term is
defined in the Investment Company Act of 1940; and
- he or she does not accept, directly or indirectly, any consulting,
advisory, or other compensatory fee from the Trust (except in the
capacity as a Board or committee member).
Each member of the Audit Committee shall be financially literate, as such
qualification is interpreted by the Board in its business judgment (or must
become financially literate within a reasonable time after his or her
appointment to the Audit Committee). The Audit Committee will review the
qualifications of its members and determine whether any of its members qualify
as an "audit committee financial expert" as defined in Form N-CSR. The Audit
Committee will submit such determination to the Board for its final
determination.
The members and Chairman of the Audit Committee shall be elected by the
Board annually and serve until their successors shall be duly elected and
qualified.
No member of the Audit Committee shall serve on the audit committee of
three or more public companies (or three or more investment company complexes)
in addition to his or her service on the Audit Committee of the Trust (excluding
service on the audit committees of other funds in the fund complex), unless the
Board determines that such simultaneous service would not impair the ability of
the Audit Committee member to serve effectively on the Audit Committee.
A-1
III. MEETINGS
The Audit Committee shall meet two times annually, or more frequently as
circumstances dictate. Special meetings (including telephone meetings) may be
called by the Chairman or a majority of the members of the Audit Committee upon
reasonable notice to the other members of the Audit Committee.
As part of its job to foster open communication, the Audit Committee shall
meet annually with senior Trust management responsible for accounting and
financial reporting and the independent auditors in separate executive sessions
to discuss any matters that the Audit Committee, or any of such other persons,
believes should be discussed privately.
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
A. CHARTER
Review this Charter, annually, and recommend changes, if any, to
the Board.
B. INTERNAL CONTROLS
1. Review, annually, with Trust management and the independent
auditors:
(a) the organizational structure, reporting relationship,
adequacy of resources and qualifications of the senior Trust
management personnel responsible for accounting and financial
reporting; and
(b) their separate evaluation of the adequacy and effectiveness
of the Trust's system of internal controls, including those
of the Trust's service providers.
2. Review, with Trust management and the independent auditors:
(a) the Trust's plan related to the Trust's systems for
accounting, reporting and internal controls;
(b) the responsibilities, resources and staffing with respect to
the activities in IV.B.2.(a) above; and
(c) any significant audit findings or recommendations related to
the Trust's systems for accounting, reporting and internal
controls and Trust management's response.
3. Monitor procedures for the receipt, retention and treatment of
complaints received by the Trust and/or the Audit Committee
regarding accounting, internal accounting controls or auditing
matters and the confidential, anonymous submission by officers and
trustees of the Trust or employees of the Adviser, underwriter and
any provider of accounting-related services to the Trust of
concerns regarding questionable accounting or auditing matters.
4. Review, annually, with Trust management and the independent
auditors, policies for valuation of Trust portfolio securities, and
the frequency and magnitude of pricing errors.
C. INDEPENDENT AUDITORS
1. Approve, and recommend to the Board, the appointment, retention or
termination of the independent auditors, and approve the fees and
other compensation to be paid to the independent auditors. Such
selection shall be pursuant to a written engagement letter approved
by the Audit Committee.
2. Pre-approve any engagement of the independent auditors to provide
any non-prohibited services to the Trust, including the fees and
other compensation to be paid to the independent auditors (unless
an exception is available under Rule 2-01 of Regulation S-X).
(a) The Chairman or any member of the Audit Committee may grant
the pre-approval of services to the Fund for non-prohibited
services up to $10,000. All such delegated pre-approvals
shall be presented to the Audit Committee no later than the
next Audit Committee meeting.
3. Pre-approve any engagement of the independent auditors, including
the fees and other compensation to be paid to the independent
auditors, to provide any non-audit services to the Adviser (or any
"control affiliate" of the Adviser providing ongoing services to
the Trust), if the engagement relates directly to the operations
and financial reporting of the Trust (unless an exception is
available under Rule 2-01 of Regulation S-X).
A-2
(a) The Chairman or any member of the Audit Committee may grant
the pre-approval for non-prohibited services to the Adviser
up to $10,000. All such delegated pre-approvals shall be
presented to the Audit Committee no later than the next Audit
Committee meeting.
4. On an annual basis, request, receive in writing and review a report
by the independent auditors describing:
(a) the independent auditors' internal quality-control
procedures;
(b) any material issues raised by the most recent internal
quality-control review, or peer review, of the independent
auditors, or by any inquiry or investigations by governmental
or professional authorities, within the preceding five years,
respecting one or more independent audits carried out by the
independent auditors, and any steps taken to deal with any
such issues; and
(c) all relationships between the independent auditors and the
Trust, so as to assess the auditors' independence, including
identification of all relationships the independent auditors
have with the Trust and all significant relationships the
independent auditors have with the Adviser (and any "control
affiliate" of the Adviser) and any material service provider
to the Trust (including, but not limited to, disclosures
regarding the independent auditors' independence required by
Independence Standards Board Standard No. 1 and compliance
with the applicable independence provisions of Rule 2-01 of
Regulation S-X).
In assessing the auditors' independence, the Audit Committee shall
take into account the opinions of Trust management. The Committee
will present its conclusions with respect to the independent
auditors to the Board, and recommend that the Board take
appropriate action, if any, in response to the independent
auditors' report to satisfy itself of the independent auditors'
independence.
5. On an annual basis, review and evaluate the lead audit partner
(such review to include consideration of whether, in addition to
the regular rotation of the lead audit partner as required by law,
in order to assure continuing auditor independence, there should be
regular consideration of rotation of the firm serving as
independent auditors).
6. On an annual basis, meet with the independent auditors and Trust
management to review the arrangements for and scope of the proposed
audit for the current year and the audit procedures to be utilized.
7. Review the management letter prepared by the independent auditors
and Trust management's response.
D. FINANCIAL REPORTING PROCESSES
1. Review with Trust management and the independent auditors the
Trust's semi-annual financial statements.
2. Review with Trust management and the independent auditors the
matters that auditing professional standards require to be
communicated to the Audit Committee, including, but not limited to,
the matters required to be discussed by Statements on Auditing
Standards No. 61, including:
- the independent auditors' judgments about the quality, and
not just the acceptability, of the Trust's accounting
principles as applied in its financial reporting;
- the process used by Trust management in formulating estimates
and the independent auditors' conclusions regarding the
reasonableness of those estimates;
- all significant adjustments arising from the audit, whether
or not recorded by the Trust;
- when the independent auditors are aware that Trust management
has consulted with other accountants about significant
accounting and auditing matters, the independent auditors'
views about the subject of the consultation;
- any disagreements with Trust management regarding accounting
or reporting matters;
- any difficulties encountered in the course of the audit,
including any restrictions on the scope of the independent
auditors' activities or on access to requested information;
and
- significant deficiencies in the design or operation of
internal controls.
A-3
3. The independent auditors shall report, within 90 days prior to the
filing of the Trust's annual financial statements with the SEC, to
the Audit Committee:
(a) all critical accounting policies and practices to be used;
(b) all alternative treatments of financial information within
GAAP for policies and practices related to material items
that have been discussed with Trust management, the
ramifications of the use of such alternative disclosures and
treatments, and the treatment preferred by the independent
auditor;
(c) other material written communications between the independent
auditors and Trust management including, but not limited to,
any management letter or schedule of unadjusted differences;
and
(d) all non-audit services provided to an entity in the
"investment company complex" as defined in paragraph (f)(14)
of Rule 2-01 of Regulation S-X that were not pre-approved by
the Audit Committee.
4. Review, annually, with Trust management and the independent
auditors, the Trust's "disclosure controls and procedures" and the
Trust's "internal control over financial reporting" as defined in
Rule 30a-3(c) and (d) under the Investment Company Act of 1940.
5. Review with Trust management and the independent auditors a report
by Trust management covering any Form N-CSR and Form N-Q filed, and
any required certification of such filing, along with the results
of Trust management's most recent evaluation of the Trust's
"disclosure controls and procedures" and "internal control over
financial reporting."
E. PROCESS IMPROVEMENTS
Review with the independent auditors and Trust management significant
changes or improvements in accounting and auditing processes that have been
implemented.
F. LEGAL AND COMPLIANCE
1. Review any legal or regulatory matters that arise that could have a
material impact on the Trust's financial statements.
2. Review policies and procedures with respect to financial statement
risk assessment and risk management, including the steps Trust
management has taken to monitor and control such risk exposures.
3. Establish clear hiring policies for the Trust with respect to
employees or former employees of the independent auditors.
G. OTHER RESPONSIBILITIES
1. Review, annually, the performance of the Audit Committee.
2. Prepare a report of the Audit Committee as required to be included
in the annual proxy statement.
3. Investigate any other matter brought to its attention within the
scope of its duties, and have the authority in its discretion to
retain legal, accounting or other experts or consultants to advise
the Audit Committee, at the expense of the Trust, if, in the
Committee's judgment, that is appropriate.
4. Perform any other activities consistent with this Charter, the
Trust's Charter, By-Laws and governing law, as the Audit Committee
or the Board deems necessary or appropriate.
5. Maintain minutes of Committee meetings; report its significant
activities to the Board; and make such recommendations to the Board
as the Audit Committee may deem necessary or appropriate.
V. FUNDING
The Audit Committee shall receive appropriate funding, as determined by the
Audit Committee, for payment of (i) compensation to the independent auditors for
approved audit or non-audit services for the Trust; (ii) compensation to any
legal, accounting or other experts or consultants retained by the Audit
Committee pursuant to Section IV.G.3 above and (iii) ordinary administrative
expenses of the Audit Committee that are necessary or appropriate in carrying
out its duties.
A-4
MADISON/CLAYMORE COVERED CALL FUND
BACKGROUND AND DEFINITIONS
FOR
AUDIT COMMITTEE CHARTER
APPROVED AUGUST 18, 2005
The following is supplemental information regarding the Audit Committee
Charter designed to provide the Audit Committee background information and
definitions to assist the Committee in fulfilling its responsibilities under the
Charter.
I. COMPOSITION
An "audit committee financial expert" of a company is defined as a person
who has all of the following attributes: (1) an understanding of generally
accepted accounting principles ("GAAP") and financial statements; (2) the
ability to assess the general application of GAAP in connection with the
accounting for estimates, accruals and reserves; (3) experience preparing,
auditing, analyzing or evaluating financial statements that present a breadth
and level of complexity of accounting issues that are generally comparable to
the breadth and complexity of issues that can reasonably be expected to be
raised by the company's financial statements, or experience actively supervising
one or more persons engaged in such activities; (4) an understanding of internal
controls and procedures for financial reporting; and (5) an understanding of
audit committee functions. An audit committee financial expert must have
acquired such attributes through any one or more of the following: (1) education
and experience as a principal financial officer, principal accounting officer,
controller, public accountant or auditor or experience in one or more positions
that involve the performance of similar functions (or active supervision of such
persons); or (2) experience overseeing or assessing the performance of companies
or public accountants with respect to the preparation, auditing or evaluation of
financial statements; or (3) other relevant experience.
Because the Trust is listed on the New York Stock Exchange, at least one
member of the Audit Committee must have accounting or related financial
management expertise, as the Board interprets such qualification in its business
judgment.
II. RESPONSIBILITIES AND DUTIES
Under Section 10A(h)(i)(1)(B) of the Securities Exchange Act of 1934 and
Rule 2-01 under Regulation S-X (Section (c)(7)), pre-approval of non-audit
services for the Trust pursuant to Section IV.C. 2 is not required, if:
A. the aggregate amount of all non-audit services provided to the
Trust is no more than 5% of the total fees paid by the Trust to the
independent auditors during the fiscal year in which the non-audit
services are provided;
B. the services were not recognized by Trust management at the time of
the engagement as non-audit services; and
C. such services are promptly brought to the attention of the Audit
Committee by Trust management and the Audit Committee approves them
(which may be by delegation) prior to the completion of the audit.
Under Section 10A(h)(i)(1)(B) of the Securities Exchange Act of 1934 and
Rule 2-01 under Regulation S-X (Section (c)(7)), pre-approval of non-audit
services for the Adviser (or any affiliate of the Adviser providing ongoing
services to the Trust) pursuant to Section IV.C.3 is not required, if:
A. the aggregate amount of all non-audit services provided is no more
than 5% of the total fees paid to the Trust's independent auditors
by the Trust, the Adviser and any "control affiliate" of the
Adviser providing ongoing services to the Trust during the fiscal
year in which the non-audit services are provided;
B. the services were not recognized by Trust management at the time of
the engagement as non-audit services; and
C. such services are promptly brought to the attention of the Audit
Committee by Trust management and the Audit Committee approves them
(which may be by delegation) prior to the completion of the audit.
A-5
As used in Section IV.C.3, "control affiliate" means any entity
controlling, controlled by, or under common control with the Adviser.
"Investment company complex" includes: (1) an investment company and its
investment adviser or sponsor; (2) any entity controlled by or controlling an
investment adviser or sponsor in (1) above, or any entity under common control
with any investment adviser or sponsor in (1) above if the entity: (A) is an
investment adviser or sponsor or (B) is engaged in the business of providing
administrative, custodian, underwriter, or transfer agent services to any
investment company, investment adviser, or sponsor; and (3) an investment
company or entity that would be an investment company but for the exclusions
provided by Section 3(c) of the 1940 Act that has an investment adviser or
sponsor included in (1) and (2) above. Investment adviser does not include a
subadviser whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser. Sponsor is an entity that
establishes a unit investment trust.
"Disclosure controls and procedures" means controls and other procedures of
a registered management investment company that are designed to ensure that
information required to be disclosed by the investment company on Form N-CSR and
Form N-Q is recorded, processed, summarized and reported, within the time
periods specified in the SEC's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an investment company in the
reports that it files or submits on Form N-CSR and Form N-Q is accumulated and
communicated to the investment company's management, including its principal
executive officer or officers and principal financial officer or officers, or
person performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.
"Internal control over financial reporting" is a process designed by, or
under the supervision of, the Trust's principal executive and principal
financial officers, or persons performing similar functions, and effected by the
Trust's Board, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP and includes
those policies and procedures that:
A. Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of
the assets of the Trust;
B. Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with GAAP, and that receipts and expenditures of the
Trust are being made only in accordance with authorization of
management and directors of the Trust; and
C. Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the
Trust's assets that could have a material effect on the financial
statements.
The report to be prepared by the Audit committee to be included in the
annual proxy statement is governed by Item 306 of Regulation S-K, which requires
each proxy statement relating to a shareholder meeting at which directors are to
be elected to include a report, followed by the name of each Audit Committee
member, stating whether: (1) the Committee has reviewed and discussed the
audited financial statements with management, (2) the Committee has discussed
with the independent auditors the matters required to be discussed by SAS 61,
(3) the Committee has received the written disclosures and the letter from the
independent auditors required by Independence Standards Board Standard No. 1,
and has discussed with the independent auditors their independence, and (4)
based on the review and discussions referred to in paragraphs (1) through (3),
the Audit Committee recommended to the Board that the audited financial
statements be included in the Trust's annual report to shareholders required by
Section 30(e) of the Investment Company Act of 1940 and Rule 30d-1 thereunder.
A-6
PROXY TABULATOR
P.O. BOX 9112
FARMINGDALE, NY 11735
SOLICITED BY THE BOARD OF TRUSTEES
MADISON/CLAYMORE COVERED CALL FUND
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 17, 2006
MADISON/CLAYMORE COVERED CALL FUND
The annual meeting of shareholders of Madison/Claymore Covered Call Fund (the
"Fund") will be held at the offices of the Fund, 2455 Corporate West Drive,
Lisle, Illinois, 60532, on Thursday, August 17, 2006, at 11:30 A.M. Central Time
(the "Annual Meeting"). The undersigned hereby appoints Nicholas Dalmaso and
Melissa Nguyen, and each of them or their respective designees, with full power
of substitution and revocation, as proxies to represent and to vote all shares
of the undersigned at the Annual Meeting and all adjournments thereof, with all
powers the undersigned would possess if personally present, upon the matters
specified on the reverse side.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED: IF NO DIRECTION IS
INDICATED AS TO THE PROPOSAL, THE PROXY SHALL VOTE FOR SUCH PROPOSAL. THE PROXY
MAY VOTE AT THEIR DISCRETION ON ANY OTHER MATTER WHICH MAY PROPERLY COME BEFORE
THE MEETING.
PLEASE MARK, DATE, SIGN & RETURN THE PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE.
Date _________________, 2006
--------------------------------------------------
Signature (SIGN IN THE BOX)
For joint registrations, both parties should sign.
PLEASE FILL IN A BOX AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. |X|
PLEASE DO NOT USE FINE POINT PENS.
FOR ALL
nominees WITHHOLD
except as AUTHORITY
marked to the to vote
contrary at for all
left. nominees.
------------- ---------
1. Election of Trustees
Class II Trustees:
(01) Philip E. Blake, (02) Nicholas Dalmaso,
(03) James R. Imhoff, Jr. |_| |_|
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S), WRITE THE
NUMBER OF THE NOMINEE(S) ON THE LINE BELOW.
--------------------------------------------------------------------------------
PLEASE SIGN AND DATE ON THE REVERSE SIDE.