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UNITED STATES
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 (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 Section240.14a-12
TS&W / CLAYMORE TAX-ADVANTAGED BALANCED FUND
(Name of Registrant As Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[x] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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[Thompson, Siegel & Walmsley, Inc. INVESTMENT COUNSEL LOGO]
[CLAYMORE LOGO]
TS&W / CLAYMORE TAX-ADVANTAGED BALANCED FUND
2455 CORPORATE WEST DRIVE
LISLE, ILLINOIS 60532
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 17, 2005
Notice is hereby given to the holders of common shares of beneficial
interest, par value $0.01 per share ("Common Shares"), and holders of Auction
Market Preferred Shares, par value $0.01 per share, liquidation preference
$25,000 per share ("Preferred Shares"), of TS&W / Claymore Tax-Advantaged
Balanced 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 Wednesday, August 17, 2005, at 11:30 a.m.
(Central time). The Annual Meeting is being held for the following purposes:
1. To elect Trustees in the following manner:
(a) to elect two Trustees as Class I Trustees by holders of Common
Shares and Preferred Shares voting together as a single class, to
serve until the Fund's 2008 annual meeting of shareholders or
until a successor shall have been elected and qualified;
(b) to elect one Trustee as Class I Trustee by holders of Preferred
Shares voting as a separate class, to serve until the Fund's 2008
annual meeting of shareholders or until a successor shall have
been elected and qualified;
(c) to elect two Trustees as Class III Trustees by holders of Common
Shares and Preferred Shares voting together as a single class, to
serve until the Fund's 2007 annual meeting of shareholders or
until a successor 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" THE PROPOSAL.
The Board has fixed the close of business on June 17, 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 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 Trustees
/s/ Heidemarie Gregoriev
Heidemarie Gregoriev, Secretary of the Fund
Lisle, Illinois
July 25, 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 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
OR THROUGH THE INTERNET PURSUANT TO THE INSTRUCTIONS CONTAINED ON THE PROXY
CARD) TODAY.
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TS&W / CLAYMORE TAX-ADVANTAGED BALANCED FUND
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 17, 2005
This document will give you the 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, 866-882-0688.
This Proxy Statement is furnished to the holders of common shares of
beneficial interest, par value $0.01 per share ("Common Shares"), and holders of
Auction Market Preferred Shares, par value $0.01 per share, liquidation
preference $25,000 per share ("Preferred Shares"), of TS&W / Claymore
Tax-Advantaged Balanced 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 Wednesday, August 17,
2005, 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, 2005, 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 27, 2005.
- WHY IS A SHAREHOLDER MEETING BEING HELD?
Because the Common Shares of the Fund are listed on the New York Stock
Exchange (the "NYSE"), which requires the Fund to hold an annual
meeting of shareholders.
- WHAT PROPOSAL WILL BE VOTED ON?
Shareholders of the Fund are being asked to elect Trustees to the
Board (the "Proposal") in the following manner:
(a) to elect two trustees as Class I Trustees by holders of
Common Shares and Preferred Shares voting together as a
single class, to serve until the Fund's 2008 annual meeting
of shareholders or until a successor shall have been elected
and qualified;
(b) to elect one trustee as Class I Trustee by holders of
Preferred Shares voting as a separate class, to serve until
the Fund's 2008 annual meeting of shareholders or until a
successor shall have been elected and qualified;
(c) to elect two trustees as Class III Trustees by holders of
Common Shares and Preferred Shares voting together as a
single class, to serve until the Fund's 2007 annual meeting
of shareholders or until a successor 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 Wednesday, August 17, 2005, 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 27, 2005.
- 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 June
17, 2005 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
1
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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.
- HOW MANY SHARES OF THE FUND WERE OUTSTANDING AS OF THE RECORD DATE?
At the close of business on June 17, 2005, the Fund had 15,407,000
Common Shares outstanding and 4,800 Preferred Shares outstanding.
THE PROPOSAL: TO ELECT TRUSTEES
- WHO ARE THE NOMINEES FOR TRUSTEE?
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 Barnes+, Mr. Nicholas Dalmaso* and Mr. Robert M. Hamje
are the Class I Trustees. They are standing for election at the Annual
Meeting. 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. L. Kent Moore* and Mr. Ronald A. Nyberg are the Class II
Trustees. It is currently anticipated that the Class II Trustees will
stand for election at the Fund's 2006 annual meeting of shareholders.
CLASS III TRUSTEES
-Mr. Matthew Appelstein, Mr. Steven D. Cosler+ and Mr. Ronald E.
Toupin, Jr. are the Class III Trustees. Mr. Appelstein and Mr. Cosler
are standing for election at the Annual Meeting. It is currently
anticipated that the Class III Trustees will stand for election at the
Fund's 2007 annual meeting of shareholders.
- ----------
* Designated as Trustees representing holders of the Fund's
Preferred Shares.
+ Trustee nominee.
As indicated above, shareholders are being asked to elect the following
three Class I Trustees at the Annual Meeting: Mr. Randall C. Barnes, Mr.
Nicholas Dalmaso and Mr. Robert M. Hamje and the following two Class III
Trustees: Mr. Matthew Appelstein and Mr. Steven D. Cosler. The holders of the
Fund's Common Shares and the holders of the Fund's 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. Barnes and Mr. Hamje and each
of the Class III Trustee nominees. The holders of the Fund's Preferred Shares
will have equal voting rights (i.e. one vote per share) and will vote as a
separate class with respect to the election of Mr. Dalmaso.
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. You are being asked to approve a Trustee selected by the Board to
fill an existing vacancy and to elect additional Trustees at the Annual Meeting
in order to fill two vacancies created by the Board. Each Class I Trustee will
hold office for three years or until his successor shall have been elected and
qualified. Each Class III Trustee elected at the Annual Meeting will hold
office for a term concurrent with the class of Trustees for which he serves
or until his successor shall have been elected and qualified. The other Trustees
of the Fund will continue to serve under their current terms. Unless authority
is withheld, it is the intention of the persons named in the proxy to vote the
proxy "FOR" the election of the Trustees named above. Each 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 "Investment Adviser") or the Fund's investment manager, Thompson, Siegel
& Walmsley, Inc. ("TS&W" 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")
2
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comprised of twelve closed-end funds, including the Fund. The business address
of each Trustee and officer of the Fund is c/o Claymore Advisors, LLC, 2455
Corporate West Drive, Lisle, Illinois 60532.
TRUSTEES AND TRUSTEE NOMINEES
<Table>
<Caption>
NUMBER OF
TERM OF PORTFOLIOS
OFFICE AND IN FUND
POSITION(S) LENGTH COMPLEX
HELD TIME OF PRINCIPAL OCCUPATION OVERSEEN OTHER DIRECTORSHIPS
NAME AND AGE WITH FUND SERVED DURING THE PAST FIVE YEARS BY TRUSTEE HELD BY TRUSTEE
- ----------------------- ----------- ------------- --------------------------- ----------- ----------------------------
INDEPENDENT TRUSTEES:
Randall C. Barnes(1) Formerly, Senior Vice 3 None.
Age: 53 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).
Steven D. Cosler(1) President, Chief None None.
Age: 50 Executive Officer and
Director (2002-present)
and formerly President
(2001-2002), Chief
Operating Officer (2000-
2002) and Executive Vice
President (2000-2001) of
Priority Healthcare
Corporation.
Robert M. Hamje(1) Trustee Trustee since Formerly, Advisor to the 1 Trustee, Old Mutual Advisor
Age: 63 2004(2) Cleveland Foundation Funds.
Investment Committee.
Formerly, President and
Chief Investment Officer
of TRW Investment
Management Company
(1990-2003).
L. Kent Moore* Trustee Trustee since Managing Director High 1 Trustee, Old Mutual Advisor
Age: 49 2004(2) Sierra Energy L.P., Funds.
(2004-Present).
Formerly, Portfolio
Manager and Vice
President of Janus
Capital Corp. (2000-2002)
and Senior Analyst /
Portfolio Manager of
Marsico Capital
Management (1997-1999).
Ronald A. Nyberg Trustee Trustee since Principal of Ronald A. 10 None.
Age: 51 2004(2) 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). Director,
Juvenile Diabetes
Research Foundation,
Chicago Chapter, and
Edward Hospital
Foundation, Naperville,
IL. Trustee, North Park
University, Chicago.
</Table>
3
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<Table>
<Caption>
NUMBER OF
TERM OF PORTFOLIOS
OFFICE AND IN FUND
POSITION(S) LENGTH COMPLEX
HELD TIME OF PRINCIPAL OCCUPATION OVERSEEN OTHER DIRECTORSHIPS
NAME AND AGE WITH FUND SERVED DURING THE PAST FIVE YEARS BY TRUSTEE HELD BY TRUSTEE
- ----------------------- ----------- ------------- --------------------------- ----------- ----------------------------
Ronald E. Toupin, Jr. Trustee Trustee since Formerly Vice President, 8 None.
Age: 47 2004(2) 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).
INTERESTED TRUSTEES:
Matthew Appelstein+(1) Trustee Trustee since CPA, CFA, Director of None Trustee, Old Mutual Advisor
Age: 44 2005(2) Investment Services, Old Funds.
Mutual Asset Management
(2003-present). Formerly,
Senior Vice President of
Consulting Relationship
and Director of
Investment Services,
Fidelity Management and
Trust Company
(1990-2003).
Nicholas Dalmaso+*(1) Trustee, Trustee since Senior Managing Director 10 None.
Age: 40 Chief 2004(2) and General Counsel of
Legal Claymore Advisors, LLC
and and Claymore Securities,
Executive Inc. (2001-present).
Officer; Officer of certain funds
Chief in the Fund Complex.
Compliance Formerly, Assistant
Officer General Counsel, John
Nuveen and Company Inc.
(1999-2000). Formerly,
Vice President and
Associate General Counsel
of Van Kampen Investments,
Inc. (1992-1999).
</Table>
- ----------
+ "Interested person" of the Fund as defined in the 1940 Act. Mr.
Dalmaso is an interested person of the Fund because he is an officer
of the Investment Adviser and certain of its affiliates. Mr.
Appelstein is an interested person of the Fund because he is an
officer of an affiliate of the Investment Manager.
* Designated as Trustee representing holders of the Fund's Preferred
Shares.
(1) Nominee for election as Trustee at the Annual Meeting.
(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.
4
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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 Investment Adviser, the Investment Manager or affiliates of the Investment
Adviser or Investment Manager and may receive compensation in such capacities.
OFFICERS:
<Table>
<Caption>
PRINCIPAL OCCUPATION DURING
NAME AND AGE TITLE THE PAST FIVE YEARS
- ---------------------------- ------------------------------- ------------------------------------------------------------
Steven M. Hill Chief Financial Officer, Senior Managing Director and Chief Financial Officer of
Age: 40 Chief Accounting Officer and Claymore Advisors, LLC and Claymore Securities, Inc.; Chief
Treasurer 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).
Heidemarie Gregoriev Secretary Vice President and Assistant General Counsel of Claymore
Age: 34 Advisors, LLC and Claymore Securities, Inc.; Secretary of
certain funds in the Fund Complex. Previously, Legal Counsel
for Henderson Global Investors (NA) (2001-2004), Associate
of Gardner, Carton & Douglas (1997-2001).
Jim Howley Assistant Treasurer Vice President, Fund Administration of Claymore Securities,
Age: 33 Inc. (2004-present). Previously, Manager, Mutual Fund
Administration of Van Kampen Investments, Inc.
Vincent R. Giordano Vice President Senior Managing Director of Claymore Advisors, LLC.
Age: 60 Previously, Senior Vice President and Portfolio Manager of
Merrill Lynch Asset Management, Inc. (1985-2001).
George Gregorio Vice President Managing Director of Claymore Advisors, LLC. Previously,
Age: 57 Sell Side Analyst for JB Hanauer & Co.
Anne S. Kochevar Vice President Managing Director, Compliance of Claymore Advisors, LLC and
Age: 42 Claymore Securities, Inc. (2002-present). Previously,
Advertising Principal, Allstate Financial Services, LLC
(2001-2002). Compliance Coordinator for Nuveen Investments
(2000-2001) and Vice President and Director of Compliance
of Van Kampen Management, Inc. (1992-2000), Van Kampen
Investments (1992-2000), Van Kampen Advisors Corp.
(1999-2000), Van Kampen Funds, Inc. (1999-2000), Van Kampen
Asset Management (1999-2000), and Van Kampen Advisors Inc.
(1999-2000).
Robert W. Roffo Vice President Managing Director of Claymore Advisors, LLC. Previously,
Age: 39 Director and Vice President of Merrill Lynch Investment
Managers.
Richard C. Sarhaddi Assistant Secretary Assistant Vice President of Claymore Advisors, LLC and
Age: 31 Claymore Securities, Inc.; Assistant Secretary of certain
funds in the Fund Complex. Previously, Editor, CCH
Incorporated.
</Table>
- DOES THE BOARD HAVE ANY COMMITTEES?
Yes. The Trustees have determined that the efficient conduct of the
Board's affairs makes it desirable to delegate responsibility for
certain specific matters to committees of the Board. The committees
meet as often as necessary, either in conjunction with regular
meetings of the Board or otherwise. 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, composed of Robert M. Hamje, L. Kent
Moore, Ronald A. Nyberg and Ronald E. Toupin, Jr. In addition to being
Independent Trustees as defined above, each of these Trustees also
meets the additional independence requirements for audit committee
members as defined by the NYSE. The Audit Committee is charged with
selecting a firm of independent accountants for the Fund and reviewing
accounting matters with the accountants.
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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 independent auditors 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 auditors required by Indendence Standards Board
Standard No. 1 and has discussed with the auditors the auditors'
independence and (iv) the Audit Committee recommended to the Board of
Trustees of the Fund that the financial statements be included in the
Fund's Annual Report for the past fiscal year.
The Audit Committee is governed by a written charter, the most recent
version of which was approved by the Board on April 14, 2005 and is
attached hereto as Appendix A.
NOMINATING COMMITTEE
The Board has a Nominating and Governance Committee, which performs
the functions set forth in the Fund's Nominating and Governance
Committee Charter. The Nominating and Governance Committee is composed
of Robert M. Hamje, L. Kent Moore, Ronald A. Nyberg and Ronald E.
Toupin, Jr, all of whom are Independent Trustees.
As part of its duties, the Nominating and Governance Committee makes
recommendations to the full Board with respect to candidates for the
Board. The Nominating and Governance Committee will consider trustee
candidates recommended by shareholders. In considering candidates
submitted by shareholders, the Nominating and Governance Committee
will take into consideration the needs of the Board and the
qualifications of the candidate. 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 Nominating and Governance Committee
Charter.
The shareholder recommendation must be sent to the Fund's Secretary,
c/o Claymore Advisors, LLC, 2455 Corporate West Drive, Lisle, Illinois
60532.
The Nominating and Governance Committee Charter of the Fund is
attached hereto as Appendix B.
- DOES THE FUND HAVE A POLICY WITH RESPECT TO THE ATTENDANCE OF TRUSTEES
AT THE ANNUAL MEETING?
It is the Fund's policy to encourage Trustees to attend annual
meetings.
- HOW CAN THE FUND'S SHAREHOLDERS SEND COMMUNICATIONS TO THE TRUSTEES?
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.
- HOW LARGE A STAKE DO THE TRUSTEES HAVE IN THE FUND?
As of June 17, 2005, each Trustees and Trustee nominee beneficially
owned equity securities of the Fund and other funds in the Fund
Complex overseen by the Trustee in the dollar range amounts as
specified below:
<Table>
<Caption>
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 0 over $100,000
Steven D. Cosler 0 0
Robert M. Hamje $50,001 - $100,000 $50,001 - $100,000
L. Kent Moore over $100,000 over $100,000
Ronald A. Nyberg $1 - $10,000 $50,001 - $100,000
Ronald E. Toupin, Jr. 0 0
INTERESTED TRUSTEES:
Matthew Appelstein 0 0
Nicholas Dalmaso 0 0
</Table>
As of June 17, 2005, each Trustee and the Trustees and officers of the
Fund as a group owned less than 1% of the outstanding shares of the
Fund.
6
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- HOW OFTEN DO THE TRUSTEES MEET?
Six meetings of the Board were held during the Fund's initial fiscal
period ended December 31, 2004. One meeting of the Audit Committee of
the Fund was held during the Fund's initial fiscal period ended
December 31, 2004. One meeting of the Nominating and Governance
Committee of the Fund was held during the Fund's initial fiscal period
ended December 31, 2004. 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 initial fiscal period ended December 31, 2004.
- WHAT ARE THE TRUSTEES PAID FOR THEIR SERVICES?
The Fund pays an annual retainer and fee per meeting attended to each
Trustee who is not affiliated with the Investment Adviser, 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, if
any. The following table provides information regarding the
compensation of the Fund's Trustees. This table assumes that the Fund
had a full fiscal year of operations:
<Table>
<Caption>
ESTIMATED COMPENSATION ESTIMATED TOTAL COMPENSATION
NAME OF BOARD MEMBER(1) FROM THE FUND(2) FROM THE FUND COMPLEX(2)
----------------------- -------------------------- --------------------------------
Randall C. Barnes None $ 63,000
Steven D. Cosler None None
Robert M. Hamje $ 21,000 $ 21,000
L. Kent Moore $ 21,000 $ 21,000
Ronald A. Nyberg $ 22,500 $ 214,500
Ronald E. Toupin, Jr. $ 22,500 $ 173,500
</Table>
- ----------
(1) Trustees not eligible for compensation are not included in the
above table.
(2) Assumes the Fund had a full fiscal year of operations.
THE BOARD OF THE FUND, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL.
FURTHER INFORMATION ABOUT VOTING AND THE ANNUAL MEETING
The cost of soliciting proxies will be borne by the Fund. In addition,
certain officers, directors and employees of the Fund and the Investment Adviser
(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 at the Annual
Meeting at which a quorum (i.e., a majority of the shares entitled to vote on
the Proposal) is present is necessary to approve the Proposal.
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 Annual Meeting for quorum purposes. However, abstentions 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. 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 June 17, 2005 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.
INVESTMENT ADVISER AND INVESTMENT MANAGER
Claymore Advisors, LLC, a wholly owned subsidiary of Claymore Group, LLC,
acts as the Fund's investment adviser and is responsible for making investment
decisions with respect to the investment of the portion of the Fund's assets
allocated for investment in municipal securities. As of July 21, 2005, Claymore
managed approximately $4.2 billion in total assets. Claymore is located at 2455
Corporate West Drive, Lisle, Illinois 60532.
7
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Thompson, Siegel & Walmsley, Inc. acts as the Fund's investment manager and
is responsible for making investment decisions with respect to the investment of
the portion of the Fund's assets allocated for investment in equity securities
and other income-producing securities. As of June 30, 2005, TS&W managed
approximately $5.8 billion in total assets. TS&W is wholly owned by Old Mutual
(US) Holdings Inc., a wholly owned subsidiary of Old Mutual plc, a London-based,
multi-national financial services firm. As of December 31, 2004, 2005, Old
Mutual plc and its affiliates had approximately $270 billion of assets under
management. Old Mutual plc is among the top 50 global financial services firms,
based on assets under management. TS&W is located at PO Box 6883, 5000 Monument
Avenue, Richmond, Virginia 23230.
INDEPENDENT AUDITOR
Ernst & Young LLP ("E&Y") has been selected as the independent auditor 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 initial fiscal period ended in 2004 and fiscal
year ending in 2005. 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.
ADMINISTRATOR
The Bank of New York, located at 101 Barclay Street, New York, New York
10286, serves as the Fund's administrator.
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
initial fiscal period ended December 31, 2004 were $32,500.
AUDIT-RELATED FEES
The aggregate fees billed by E&Y and approved by the Audit Committee of the
Fund for the Fund's initial fiscal period ended December 31, 2004 for assurance
and related services reasonably related to the performance of the audit of the
Fund's annual financial statements were $10,200 (such fees relate to services
rendered, and out of pocket expenses incurred, in connection with Fund
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 period.
TAX FEES
The aggregate fees billed by E&Y and approved by the Audit Committee of the
Fund for the Fund's initial fiscal period ended December 31, 2004 for
professional services rendered for tax compliance, tax advice, and tax planning
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 period.
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 initial fiscal period ended
December 31, 2004.
AGGREGATE NON-AUDIT FEES
The aggregate non-audit fees billed by E&Y for the Fund's initial fiscal
period ended December 31, 2004 for services rendered to the Fund were $0.
In addition, the aggregate non-audit fees billed by E&Y for the Fund's
initial fiscal period ended December 31, 2004 for services rendered to the
Investment Adviser, or any entity controlling, controlled by, or under common
control with the Adviser that provides ongoing services to the Fund were $0.
AUDIT COMMITTEE'S PRE-APPROVAL POLICIES AND PROCEDURES
As noted above, on April 14, 2005, the Audit Committee and the Board
adopted a revised Audit Committee Charter, which includes Pre-Approval Policies
and Procedures in Section IV of such Charter. The revised Audit Committee
Charter appears in Appendix A hereto. The Audit Committee of the Fund has
approved all audit and
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non-audit services provided by E&Y to the Fund, and all non-audit services
provided by E&Y to the Investment Adviser, or any entity controlling, controlled
by, or under common control with the Investment Adviser that provides ongoing
services to the Fund that are related to the operations of the Fund.
PRINCIPAL SHAREHOLDERS
As of June 17, 2005, 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 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 initial fiscal period ended December 31, 2004, all filings applicable to
such persons were completed and filed in a timely manner, except as follows:
Form 3 submissions, disclosing that certain persons became reporting persons of
the Fund during the fiscal period ended December 31, 2004, inadvertently were
not filed in a timely manner; one Form 4 submission, disclosing a change in
share ownership by Robert M. Hamje relating to a transaction in Common Shares,
was inadvertently filed late; and three Form 4 submissions, disclosing changes
in share ownership by L. Kent Moore relating to transactions in Common Shares,
were inadvertently filed late.
PRIVACY PRINCIPLES OF THE FUND
The Fund is committed to maintaining the privacy of shareholders and to
safeguarding their non-public personal information. The following information is
provided to help you understand what personal information the Fund collects, how
the Fund protects that information and why, in certain cases, the Fund may share
information with select other parties.
Generally, the Fund does not receive any non-public personal information
relating to its shareholders, although certain non-public personal information
of its shareholders may become available to the Fund. The Fund does not disclose
any non-public personal information about its shareholders or former
shareholders to anyone, except as permitted by law or as is necessary in order
to service shareholder accounts (for example, to a transfer agent or third party
administrator).
The Fund restricts access to non-public personal information about the
shareholders to employees of the Investment 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 2006 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 27,
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 the Fund at the Fund's principal
executive offices not later than June 12, 2006.
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/ Heidemarie Gregoriev
HEIDEMARIE GREGORIEV
SECRETARY OF THE FUND
July 25, 2005
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APPENDIX A
TS&W/CLAYMORE TAX-ADVANTAGED BALANCED FUND
AUDIT COMMITTEE CHARTER
APPROVED APRIL 14, 2005
I. PURPOSE
The Audit Committee is a committee of the Board of the Fund. Its primary
function is to assist the Board(1) 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 Fund'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 Fund's financial statements; (2) the
Fund's compliance with legal and regulatory requirements;(2) (3) the independent
auditors' qualifications and independence; and (4) the performance of the Fund's
independent auditors. The Audit Committee also serves to provide an open avenue
of communication among the independent auditors, the Adviser's internal audit
department, Fund management, and the Board.(3)
- Fund 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
Fund'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.(4)
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 Fund'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 Fund 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 Fund
(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
- ----------
(1) Any references to "directors" or "board members" shall be deemed to mean
"trustees."
(2) The Board has delegated to other committees oversight of various legal and
regulatory requirements. The Audit Committee's function is limited to the
activities set out in Section IV.
(3) The New York Stock Exchange's Corporate Governance Standards require the
Audit Committee's charter to address, as one of the Committee's purposes,
that it assist Board oversight of "the performance of the company's
internal audit function." Since the Fund has no internal audit function,
this has not been included as one of the purposes of the Committee.
(4) As the Fund is a listed closed-end investment company, the Audit Committee
also has as a purpose the preparation of an audit committee report to be
included in the annual proxy statement. This report is described in
footnote 11.
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determine whether any of its members qualify as an "audit committee financial
expert"(5) as defined in Form N-CSR.(6) 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 Fund (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.
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 Fund 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 Fund management and the independent
auditors:
(a) the organizational structure, reporting relationship,
adequacy of resources and qualifications of the senior Fund
management personnel responsible for accounting and
financial reporting; and
(b) their separate evaluation of the adequacy and effectiveness
of the Fund's system of internal controls, including those
of the Fund's service providers.
2. Review, with Fund management and the independent auditors:
(a) the Fund's plan related to the Fund'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 Fund's systems for accounting, reporting and internal
controls and Fund management's response.
- ----------
(5) 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.
(6) 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.
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3. Establish procedures for the receipt, retention and treatment of
complaints received by the Fund and/or the Audit Committee
regarding accounting, internal accounting controls or auditing
matters and the confidential, anonymous submission by officers
and directors of the Fund or employees of the Adviser,
underwriter and any provider of accounting-related services to
the Fund of concerns regarding questionable accounting or
auditing matters.
4. Review, annually, with Fund management and the independent
auditors, policies for valuation of Fund 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 services to the Fund, including the fees and other
compensation to be paid to the independent auditors.
Notwithstanding the above, the independent auditors shall not
perform any of the following non-audit services for the Fund
("prohibited non-audit services"):
(a) bookkeeping or other services related to the accounting
records or financial statements of the Fund;
(b) financial information systems design and implementation;
(c) appraisal or valuation services, fairness opinions, or
contribution-in-kind reports;
(d) actuarial services;
(e) internal audit outsourcing services;
(f) management functions or human resources;
(g) broker or dealer, investment adviser, or investment banking
services;
(h) legal services and expert services unrelated to the audit;
and
(i) any other services that the Public Company Accounting
Oversight Board determines are impermissible.
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"(7) of the Adviser providing ongoing
services to the Fund), if the engagement relates directly to the
operations and financial reporting of the Fund.
- The Chairman of the Audit Committee (or, in his absence, any
member of the Audit Committee) may grant the pre-approval
referenced in Sections IV.C. 2 and 3 above for
non-prohibited services for engagements of less than
$10,000. All such delegated pre-approvals shall be presented
to the Audit Committee no later than the next Audit
Committee meeting.
- Pre-approval of non-audit services for the Fund pursuant to
Section IV.C. 2 above is not required, if:
(a) the aggregate amount of all non-audit services provided
to the Fund is less than 5% of the total fees paid by
the Fund to the independent auditors during the fiscal
year in which the non-audit services are provided; and
(b) the services were not recognized by Fund 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 Fund management and the Audit
Committee approves them (which may be by delegation)
prior to the completion of the audit.
- ----------
(7) "Control affiliate" means any entity controlling, controlled by, or under
common control with the Adviser.
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- Pre-approval of non-audit services for the Adviser (or any
affiliate of the Adviser providing ongoing services to the
Fund) pursuant to Section IV.C.3 above is not required, if:
(i) the aggregate amount of all non-audit services
provided is less than 5% of the total fees paid by
the Fund, the Adviser and any "control affiliate" of
the Adviser providing ongoing services to the Fund
to the independent auditors during the fiscal year
in which the non-audit services are provided;
(ii) the services were not recognized by Fund management
at the time of the engagement as non-audit services;
and
(iii) such services are promptly brought to the attention
of the Audit Committee by Fund management and the
Audit Committee approves them (which may be by
delegation) prior to the completion of the audit.
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
Fund, so as to assess the auditors' independence, including
identification of all relationships the independent auditors
have with the Fund 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 Fund (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 Fund 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 Fund
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 Fund management's response.
D. FINANCIAL REPORTING PROCESSES
1. Review with Fund management and the independent auditors, the
Fund's audited financial statements and recommend to the Board,
if appropriate, that the audited financial statements be included
in the Fund's annual report to shareholders required by Section
30(e) of the Investment Company Act of 1940 and Rule 30d-1
thereunder.
2. Review with Fund management and the independent auditors the
Fund's semi-annual financial statements.
3. Review the Fund's policy and procedures with respect to declaring
dividends and issuing dividend announcements and related press
releases, as well as financial information and dividend guidance
provided to analysts and rating agencies.
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4. Review with Fund 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 Fund's accounting
principles as applied in its financial reporting;
- the process used by Fund 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 Fund;
- when the independent auditors are aware that Fund 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 Fund 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.
5. The independent auditors shall report, within 90 days prior to
the filing of the Fund'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 Fund 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 Fund 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"(8) as defined in paragraph
(f)(14) of Rule 2-01 of Regulation S-X that were not
pre-approved by the Audit Committee.
6. Review, annually, with Fund management and the independent
auditors, the Fund's "disclosure controls and procedures"(9) and
the Fund's "internal control over financial reporting"(10) as
defined in Rule 30a-3(c) and (d) under the Investment Company Act
of 1940.
- ----------
(8) "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.
(9) "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.
(10) "Internal control over financial reporting" is a process designed by, or
under the supervision of, the Fund's principal executive and principal
financial officers, or persons performing similar functions, and effected
by
(continued...)
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7. Review with Fund management and the independent auditors a report
by Fund management covering any Form N-CSR and Form N-Q filed,
and any required certification of such filing, along with the
results of Fund management's most recent evaluation of the Fund's
"disclosure controls and procedures" and "internal control over
financial reporting."
E. PROCESS IMPROVEMENTS
Review with the independent auditors and Fund 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 Fund's financial statements.
2. Review policies and procedures with respect to financial
statement risk assessment and risk management, including the
steps Fund management has taken to monitor and control such risk
exposures.
3. Establish clear hiring policies for the Fund 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.(11)
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 Fund, if, in
the Committee's judgment, that is appropriate.
4. Perform any other activities consistent with this Charter, the
Fund'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 Fund; (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.
- ----------
(...continued)
the Fund'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:
1. Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the
assets of the Fund;
2. 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 Fund are being
made only in accordance with authorization of management and directors
of the Fund; and
3. Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the Fund's assets
that could have a material effect on the financial statements.
(11) Item 306 of Regulation S-K 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 Fund's annual report to
shareholders required by Section 30(e) of the Investment Company Act of
1940 and Rule 30d-1 thereunder.
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APPENDIX B
TS&W / CLAYMORE TAX-ADVANTAGED BALANCED FUND
NOMINATING AND GOVERNANCE COMMITTEE CHARTER
PURPOSES AND ORGANIZATION
The purpose of the Governance and Nominating Committee of the Board of
Trustees (the "Board") of the TS&W / Claymore Tax-Advantaged Balanced Fund (the
"Fund") is to review matters pertaining to the composition, committees, and
operations of the Board. Members of the Committee may not be "interested
persons" of the Fund, as such term is defined in the Investment Company Act of
1940, as amended ("Interested Persons").(1) The Committee shall have the
following duties and powers:
1. To evaluate and recommend all candidates for election or appointment
as members of the Board and recommend the appointment of members and
chairs of each Board Committee.
2. To review policy matters affecting the operation of the Board and
Board committees and make such recommendations to the Board as deemed
appropriate by the Committee.
3. To evaluate periodically the effectiveness of the Board and Board
Committees and make such recommendations to the Board as deemed
appropriate by the Committee.
The Committee shall have the resources and authority appropriate to
discharge its responsibilities.
The Committee shall meet annually (or more frequently, if needed) and be
empowered to hold special meetings, as circumstances require. Any action of the
Committee shall be taken by the affirmative vote of a majority of the members.
Any action of the Committee may be taken without a meeting if at least a
majority of the members of the Committee consent thereto in writing.
QUALIFICATIONS FOR TRUSTEE NOMINEES
The Committee requires that Trustee candidates have a college degree or
equivalent business experience. The Committee may take into account a wide
variety of factors in considering Trustee candidates, including (but not limited
to): (i) availability and commitment of a candidate to attend meetings and
perform his or her responsibilities on the Board, (ii) relevant industry and
related experience, (iii) educational background, (iv) financial expertise, (v)
an assessment of the candidate's ability, judgment and expertise and (v) overall
diversity of the Board's composition.
IDENTIFICATION OF NOMINEES
In identifying potential nominees for the Board, the Committee may consider
candidates recommended by one or more of the following sources: (i) the Fund's
current Trustees, (ii) the Fund's officers, (iii) the Fund's investment
adviser(s), (iv) the Fund's shareholders (see below) and (v) any other source
the Committee deems to be appropriate. The Committee may, but is not required
to, retain a third party search firm at the expense of the Fund's to identify
potential candidates.
CONSIDERATION OF CANDIDATES RECOMMENDED BY SHAREHOLDERS
The Committee will consider and evaluate nominee candidates properly
submitted by shareholders on the same basis as it considers and evaluates
candidates recommended by other sources. Appendix A to this Charter, as it may
be amended from time to time by the Committee, sets forth procedures that must
be followed by shareholders to properly submit a nominee candidate to the
Committee (recommendations not properly submitted in accordance with Appendix A
will not be considered by the Committee).
- ----------
(1) As contemplated by certain rules under the Investment Company Act of 1940,
as amended, the selection and nomination of candidates for election as
members of the Board who are not Interested Persons shall be made by the
incumbent members of the Board who are not Interested Persons.
B-1
<Page>
PROCEDURES FOR SHAREHOLDERS TO SUBMIT NOMINEE CANDIDATES
(As of September, 2004 )
A Fund shareholder must follow the following procedures in order to
properly submit a nominee recommendation for the Committee's consideration.
1. The shareholder must submit any such recommendation (a "Shareholder
Recommendation") in writing to the Fund, to the attention of the
Secretary, at the Address of the principal executive offices of the
Fund.
2. The Shareholder Recommendation must be delivered to or mailed and
received at the principal executive offices of the Fund not less than
one hundred and twenty (120) calendar days nor more than one hundred
and fifty (150) calendar days prior to the date of the Board or
shareholder meeting at which the nominee would be elected.
3. The Shareholder Recommendation must include: (i) a statement in
writing setting forth (A) the name, age, date of birth, business
address, residence address and citizenship of the person recommended
by the shareholder (the "candidate"); (B) the class or series and
number of all shares of the Fund owned of record or beneficially by
the candidate, as reported to such shareholder by the candidate; (C)
any other information regarding the candidate called for with respect
to director nominees by paragraphs (a), (d), (e), (f) of Item 401 of
Regulation S-K or paragraph (b) of Item 22 of Rule 14a-101 (Schedule
14A) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), adopted by the Securities and Exchange Commission (or
the corresponding provisions of any regulation or rule subsequently
adopted by the Securities and Exchange Commission or any successor
agency applicable to the Fund); (D) any other information regarding
the candidate that would be required to be disclosed if the candidate
were a nominee in a proxy statement or other filing required to be
made in connection with solicitation of proxies for election of
Trustees or directors pursuant to Section 14 of the Exchange Act and
the rules and regulations promulgated thereunder; and (E) whether the
recommending shareholder believes that the candidate is or will be an
"interested person" of the Fund (as defined in the Investment Company
Act of 1940, as amended) and, it not an "interested person,"
information regarding the candidate that will be sufficient for the
Fund to make such determination; (ii) the written and signed consent
of the candidate to be named as a nominee and to serve as a Trustee if
elected; (iii) the recommending shareholder's name as it appears on
the Fund's books; (iv) the class or series and number of all shares of
the Fund owned beneficially and of record by the recommending
shareholder; and (v) a description of all arrangements or
understandings between the recommending shareholder and the candidate
and any other persons (including their names) pursuant to which the
recommendation is being made by the recommending shareholder. In
addition, the Committee may require the candidate to furnish such
other information as it may reasonably require or deem necessary to
determine the eligibility of such candidate to serve on the Board.
B-2
<Page>
PROXY TABULATOR
P.O. BOX 9132
HINGHAM, MA 02043-9132
SOLICITED BY THE BOARD OF TRUSTEES
TS&W / CLAYMORE TAX-ADVANTAGED BALANCED FUND
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 17, 2005
COMMON
The annual meeting of TS&W / Claymore Tax-Advantaged Balanced Fund (the "Fund")
will be held at the offices of the Fund, 2455 Corporate West Drive, Lisle,
Illinois, 60532, on Wednesday, August 17, 2005, at 11:30 A.M. CDT. The
undersigned hereby appoints Heidemarie Gregoriev and Richard C. Sarhaddi as
proxies to represent and to vote all shares of the undersigned at the annual
meeting of shareholders 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 __________________, 2005
Signature (SIGN IN THE BOX)
For joint registrations, both parties should sign.
ctsw-jh-cmn
<Page>
PLEASE FILL IN A BOX AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. /X/
PLEASE DO NOT USE FINE POINT PENS.
<Table>
1. Election of Trustees: FOR ALL WITHHOLD
nominees AUTHORITY
Class I Nominees: except as to vote
marked to the for all
(01) Randall C. Barnes, (03) Robert M. Hamje contrary at nominees.
left.
Class III Nominees: / /
/ /
(04) Matthew Appelstein, (05) Steven D. Cosler
</Table>
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.
ctsw-jh-cmn
<Page>
PROXY TABULATOR
P.O. BOX 9132
HINGHAM, MA 02043-9132
SOLICITED BY THE BOARD OF TRUSTEES
TS&W / CLAYMORE TAX-ADVANTAGED BALANCED FUND
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 17, 2005
PREFERRED
The annual meeting of TS&W / Claymore Tax-Advantaged Balanced Fund (the "Fund")
will be held at the offices of the Fund, 2455 Corporate West Drive, Lisle,
Illinois, 60532, on Wednesday, August 17, 2005, at 11:30 A.M. CDT. The
undersigned hereby appoints Heidemarie Gregoriev and Richard C. Sarhaddi as
proxies to represent and to vote all shares of the undersigned at the annual
meeting of shareholders 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 __________________, 2005
Signature (SIGN IN THE BOX)
For joint registrations, both parties should sign.
ctsw-jh-aps
<Page>
PLEASE FILL IN A BOX AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. /X/
PLEASE DO NOT USE FINE POINT PENS.
<Table>
1. Election of Trustees: FOR ALL
nominees WITHHOLD
Class I Nominees: except as AUTHORITY
marked to the to vote
(01) Randall C. Barnes, (02) Nicholas Dalmaso, (03) Robert M. Hamje contrary at for all
left. nominees.
Class III Nominees:
/ / / /
(04) Matthew Appelstein, (05) Steven D. Cosler
</Table>
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.
ctsw-jh-aps