SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
[ ] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
240.14a-11(c) or 240.14a-12
WESTERN ASSET/CLAYMORE U.S. TREASURY INFLATION PROTECTED SECURITIES FUND
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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
previously paid. 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:
WESTERN ASSET/CLAYMORE U.S. TREASURY
INFLATION PROTECTED SECURITIES FUND
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 9, 2005
------------------------
To the Shareholders of
WESTERN ASSET/CLAYMORE U.S. TREASURY
INFLATION PROTECTED SECURITIES FUND
The Annual Meeting of Shareholders of Western Asset/Claymore U.S. Treasury
Inflation Protected Securities Fund (the "Fund") will be held at 2455 Corporate
West Drive, Lisle, Illinois, on Monday, May 9, 2005 at 11:30 a.m., Central time,
for the following purposes:
(1) Electing two Trustees, each to hold office for the term indicated;
(2) Approving an amendment to the Fund's Second Amended and Restated
Bylaws relating to the election of Trustees by the holders of the Fund's
outstanding preferred shares; and
(3) Transacting such other business as may properly come before the
Annual Meeting and any adjournment thereof.
The Board of Trustees has fixed the close of business on March 15, 2005 as
the record date for the determination of shareholders entitled to receive notice
of and to vote at the Annual Meeting and any adjournment thereof.
By Order of the Board of Trustees
Heidemarie Gregoriev, Secretary
Pasadena, California
March [ ], 2005
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON ARE
URGED TO DATE, FILL IN, SIGN AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
WESTERN ASSET/CLAYMORE U.S. TREASURY
INFLATION PROTECTED SECURITIES FUND
385 EAST COLORADO BOULEVARD
PASADENA, CALIFORNIA 91101
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Trustees of the Fund
for use at the second annual meeting of shareholders of the Fund, to be held on
May 9, 2005 at 11:30 a.m., Central time (the "Annual Meeting"), and at any
adjournment thereof. At the Annual Meeting, shareholders will be asked to
consider (1) the election of Peter C. Erichsen and Ronald A. Nyberg to the Board
of Trustees of the Fund and (2) the approval of an amendment to the Fund's
Second Amended and Restated Bylaws (the "Bylaws") relating to the election of
Trustees by the holders of the Fund's outstanding preferred shares. This Proxy
Statement and the form of proxy were first mailed to shareholders on or about
[ ], 2005.
The Board of Trustees has fixed the close of business on March 15, 2005 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting and any adjournment thereof. As of the close of
business on that date, the Fund had issued and outstanding [ ] common
shares of beneficial interest, no par value ("Common Shares"), and 8,200
preferred shares of beneficial interest, no par value ("Preferred Shares" and,
together with the Common Shares, the "Shares"). The Common Shares and Preferred
Shares are the only classes of shares currently authorized by the Fund. As of
the close of business on March 15, 2005, no person owned of record or, to the
knowledge of the Fund, owned beneficially more than five percent (5%) of the
outstanding Shares of either class, except that Cede & Co., as nominee for
participants in The Depository Trust Company, held of record [ ] Common
Shares (representing approximately [ ]% of the outstanding Common
Shares) and all 8,200 outstanding Preferred Shares. Cede & Co.'s address is 55
Water Street, 25th Floor, New York, New York 10041-0001.
Shareholders of the Fund as of the close of business on March 15, 2005 will
be entitled to one vote for each Share held, and a fractional vote with respect
to fractional Shares, with no cumulative voting rights. Holders of the Preferred
Shares ("Preferred Shareholders") and holders of Common Shares ("Common
Shareholders") will vote separately by class at the Annual Meeting on the
election of Peter C. Erichsen. Pursuant to the Investment Company Act of 1940,
as amended (the "1940 Act"), Preferred Shareholders, voting as a single class,
will have the right to elect two Trustees of the Fund. These Trustees are
currently Ronald E. Toupin, Jr. (whose term of office will expire at the 2006
annual meeting) and Ronald A. Nyberg, who will stand for re-election at the
Annual Meeting. The Preferred Shareholders, voting as a
1
single class, have the right to vote on the election of Mr. Nyberg. Pursuant to
the 1940 Act, the Common Shareholders do not have the right to vote with respect
to the election of Mr. Nyberg. Pursuant to the Bylaws, only the Preferred
Shareholders, voting as a single class, will vote on the proposed amendment to
the Bylaws. Common Shareholders and Preferred Shareholders will vote as a single
class on any other matter properly brought before the Annual Meeting (except as
otherwise required by the Fund's Amended and Restated Agreement and Declaration
of Trust (the "Declaration of Trust") and Bylaws and applicable law). The table
below summarizes the right of the Common Shareholders and Preferred Shareholders
to vote with respect to the matters to come before the Annual Meeting.
PROPOSAL COMMON SHAREHOLDERS PREFERRED SHAREHOLDERS
-------- ------------------- ----------------------
- Proposal 1: Election of Peter C. Erichsen X X
- Proposal 1: Election of Ronald A. Nyberg X
- Proposal 2: Approval of an amendment to the Bylaws X
relating to the election of Trustees by the
Preferred Shareholders
Thirty percent (30%) of the Common Shares of the Fund entitled to vote at
the Annual Meeting and thirty percent (30%) of the Preferred Shares of the Fund
entitled to vote at the Annual Meeting must be represented in person or by proxy
to constitute a quorum with respect to the election of Mr. Erichsen. Thirty
percent (30%) of the Preferred Shares of the Fund entitled to vote at the Annual
Meeting must be represented in person or by proxy to constitute a quorum with
respect to the election of Mr. Nyberg and Proposal 2. Each shareholder has the
right to revoke his or her proxy at any time before it is voted. A proxy may be
revoked by filing with the Secretary of the Fund a written revocation or a
properly executed proxy bearing a later date or by voting in person at the
Annual Meeting. Any shareholder may attend the Annual Meeting, whether or not he
or she has previously given a proxy.
The solicitation of proxies for the Annual Meeting will be made primarily
by mail. However, if necessary to ensure satisfactory representation at the
Annual Meeting, additional solicitation may take place in writing or by
telephone or personal interview by officers of the Fund, who will not receive
compensation from the Fund for such services. As the date of the meeting
approaches, if we have not received your proxies, you may receive a telephone
call from our proxy solicitor, Computershare Fund Services (formerly, Georgeson
Shareholder Communications, Inc.) ("CFS"), which has been retained to assist
shareholders in the voting process. For these services, the Fund will pay CFS a
fee that is not expected to exceed $2,000. The Fund will reimburse brokers and
other nominees, in accordance with New York Stock Exchange approved
reimbursement rates, for their expenses in forwarding solicitation material to
the beneficial owners of shares of the Fund. All expenses incurred in connection
with the solicitation of proxies, including the services of CFS, will be borne
by the Fund.
2
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
owners or the persons entitled to vote and (ii) the broker or nominee does not
have discretionary voting power on a particular matter) will be counted as
shares present for purposes of determining whether a quorum is present, but will
not be counted as having been voted on the matter in question. Assuming that a
quorum would otherwise be present, abstentions and broker non-votes will
accordingly have no effect for the purpose of determining whether a Trustee has
been elected, but will have the effect of a negative vote on Proposal 2.
Randolph L. Kohn, Gregory B. McShea, Heidemarie Gregoriev and Richard C.
Sarhaddi, the persons named as proxies on the proxy card accompanying this Proxy
Statement, were selected by the Board of Trustees to serve in such capacity.
Messrs. Kohn, McShea and Sarhaddi and Ms. Gregoriev are each officers of the
Fund, and Mr. Kohn is also a Trustee of the Fund. Each executed and returned
proxy will be voted in accordance with the directions indicated thereon or, if
no direction is indicated, such proxy will be voted for the election as Trustees
of the Board of Trustees' nominees listed in this Proxy Statement and, if
applicable, for approval of an amendment to the Fund's Bylaws relating to the
election of Trustees by the holders of the Fund's outstanding preferred shares.
Discretionary authority is provided in the proxy as to any matters not
specifically referred to therein. The Board of Trustees is not aware of any
other matters which are likely to be brought before the Annual Meeting. However,
if any such matters properly come before the Annual Meeting, the persons named
in the proxy are fully authorized to vote thereon in accordance with their
judgment and discretion. In matters other than the election of Trustees and
approval of an amendment to the Fund's Bylaws, except where a different vote is
required by any provision of law or the Fund's Declaration of Trust or Bylaws, a
plurality of a quorum of the Shares necessary for the transaction of business at
a shareholders' meeting shall decide any question.
PROPOSAL 1
ELECTION OF TRUSTEES
The Annual Meeting will constitute the second annual meeting of
shareholders of the Fund. In accordance with the Declaration of Trust, the
Trustees were divided into the following three classes (each a "Class") prior to
the initial public offering of the Common Shares: Class I, whose term will
expire at the Fund's 2007 annual meeting of shareholders; Class II, whose
initial term will expire at the Annual Meeting; and Class III, whose initial
term will expire at the Fund's 2006 annual meeting of shareholders. At each
annual meeting beginning with the Annual Meeting, successors to the Class of
Trustees whose term expires at that annual meeting shall be elected for a
three-year term.
3
The following table sets forth the nominees who will stand for election at
the Annual Meeting, the Class of Trustees to which they have been designated and
the expiration of their terms if elected:
NOMINEE CLASS EXPIRATION OF TERM IF ELECTED*
------- -------- ------------------------------
Peter C. Erichsen............................... Class II 2008 Annual Meeting
Ronald A. Nyberg................................ Class II 2008 Annual Meeting
---------------
* A Trustee shall hold office until the annual meeting for the year in which his
or her term expires and until his or her successor shall be elected and shall
qualify, subject, however, to prior death, resignation, retirement,
disqualification or removal from office.
Under the Fund's classified Board structure, ordinarily only those Trustees
in a single Class may be replaced in any one year, and it would require a
minimum of two years to change a majority of the Board of the Fund under normal
circumstances. This structure, which may be regarded as an "anti-takeover"
measure, may make it more difficult for the Fund's shareholders to change the
majority of Trustees of the Fund and, thus, promotes the continuity of
management.
It is the intention of the persons designated as proxies in the proxy card,
unless otherwise directed therein, to vote at the Annual Meeting for the
election of Messrs. Erichsen and Nyberg. Each of the nominees has agreed to
serve if elected at the Annual Meeting. If either nominee is unable or
unavailable to serve, the persons named in the proxies will vote the proxies for
such other person as the Board of Trustees may recommend.
Information Regarding the Trustees. Information about the Trustees and
nominees is set forth below. The address of each Trustee and nominee is c/o the
Fund at its principal business address (385 East
4
Colorado Boulevard, Pasadena, California 91101). Of the individuals listed
below, only Messrs. Erichsen and Nyberg are nominees for election at the Annual
Meeting.
NUMBER OF
PORTFOLIOS SHARES OF
IN FUND THE FUND
COMPLEX* OTHER BENEFICIALLY
TERM OF OFFICE OVERSEEN DIRECTORSHIPS OWNED ON
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATIONS DURING BY TRUSTEE HELD BY TRUSTEE MARCH 1,
NAME AND AGE HELD WITH FUND TIME SERVED THE PAST 5 YEARS OR NOMINEE OR NOMINEE 2005
------------ -------------- -------------- ---------------------------- ---------- --------------- ------------
Peter Erichsen Nominee, Term expires Vice President, General 2 [ ]
Born in 1956 Trustee and at the Annual Counsel and Secretary of the
Chairman of Meeting; J. Paul Getty Trust (2001-
the served since present); Governor of the
Trustees(1)(2) August 2003 Philadelphia Stock Exchange
(1999-present); Chairman of
the Philadelphia Stock
Exchange's Audit Committee
(1999-present). Formerly:
Vice President and General
Counsel of the University of
Pennsylvania (1997-2001).
Michael Larson Trustee(1)(2) Term expires Chief Investment Officer for 2 Pan American [ ]
Born in 1959 in 2007; William H. Gates III (1994- Silver Corp.
served since present); Director of Extend (silver mining,
May 2004 America, Inc. development and
(telecommunications firm) exploration
(2002-present). Formerly: company)
Senior Partner, Fixed Income (1999-present)
of Harris Investment
Management (1993); Chief
Fixed Income Officer of
Commonwealth Investment
Counsel (1992); Senior
Portfolio Manager of Putnam
Management Company (1989-
1992); Director of ARCO
Investment Management
Company (1980-1989).
5
NUMBER OF
PORTFOLIOS SHARES OF
IN FUND THE FUND
COMPLEX* OTHER BENEFICIALLY
TERM OF OFFICE OVERSEEN DIRECTORSHIPS OWNED ON
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATIONS DURING BY TRUSTEE HELD BY TRUSTEE MARCH 1,
NAME AND AGE HELD WITH FUND TIME SERVED THE PAST 5 YEARS OR NOMINEE OR NOMINEE 2005
------------ -------------- -------------- ---------------------------- ---------- --------------- ------------
Ronald A. Nyberg Nominee and Term expires Principal of Ronald A. 2 Trustee of MBIA [ ]
Born in 1953 Trustee (1)(2) at the Annual Nyberg, Ltd., a law firm Capital/Claymore
Meeting; specializing in corporate Managed
served since law, estate planning and Duration
August 2003 business transactions Investment
(2000-present). Formerly: Grade Municipal
Executive Vice President, Fund (2003-
General Counsel and present);
Corporate Secretary of Van Trustee of
Kampen Investments, an Advent Claymore
investment advisory firm Convertible
(1982-1999). Securities &
Income Fund
(2003-present);
Trustee of
Dreman/Claymore
Dividend &
Income Fund
(2003-present);
Trustee of
TS&W/Claymore
Tax-Advantaged
Balanced Fund
(2004-present);
Trustee of
Madison/Claymore
Covered Call
Fund (2004-
present);
Trustee of
Fiduciary/Claymore
MLP Opportunity
Fund (2004-
present);
Trustee of
Advent/Claymore
Enhanced Growth
& Income Fund
(2005-present).
6
NUMBER OF
PORTFOLIOS SHARES OF
IN FUND THE FUND
COMPLEX* OTHER BENEFICIALLY
TERM OF OFFICE OVERSEEN DIRECTORSHIPS OWNED ON
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATIONS DURING BY TRUSTEE HELD BY TRUSTEE MARCH 1,
NAME AND AGE HELD WITH FUND TIME SERVED THE PAST 5 YEARS OR NOMINEE OR NOMINEE 2005
------------ -------------- -------------- ---------------------------- ---------- --------------- ------------
7
NUMBER OF
PORTFOLIOS SHARES OF
IN FUND THE FUND
COMPLEX* OTHER BENEFICIALLY
TERM OF OFFICE OVERSEEN DIRECTORSHIPS OWNED ON
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATIONS DURING BY TRUSTEE HELD BY TRUSTEE MARCH 1,
NAME AND AGE HELD WITH FUND TIME SERVED THE PAST 5 YEARS OR NOMINEE OR NOMINEE 2005
------------ -------------- -------------- ---------------------------- ---------- --------------- ------------
Ronald E. Toupin, Jr. Trustee (1) Term expires Formerly: Vice President, 2 Trustee of MBIA 0
Born in 1958 (2) in 2006; Manager and Portfolio Capital
served since Manager of Nuveen Asset /Claymore
August 2003 Management, an investment Managed
advisory firm (1998-1999); Duration
Vice President and Portfolio Investment
Manager of Nuveen Investment Grade Municipal
Advisory Corporation, an Fund (2003-
investment advisory firm present);
(1992-1999); Vice President Trustee of
and Manager of Nuveen Unit Advent Claymore
Investment Trusts Convertible
(1991-1998); Assistant Vice Securities &
President and Portfolio Income Fund
Manager of Nuveen Unit (2003-present);
Trusts (1988-1990) and John Trustee of
Nuveen & Company, Inc. Dreman/
(1982-1999). Claymore
Dividend &
Income Fund
(2003-present);
Trustee of
TS&W/Claymore
Tax-Advantaged
Balanced Fund
(2004-present);
Trustee of
Madison/Claymore
Covered Call
Fund (2004-
present);
Trustee of
Fiduciary/Claymore
MLP Opportunity
Fund (2004-
present);
Trustee of
Advent/Claymore
Enhanced Growth
& Income Fund
(2005-present).
8
NUMBER OF
PORTFOLIOS SHARES OF
IN FUND THE FUND
COMPLEX* OTHER BENEFICIALLY
TERM OF OFFICE OVERSEEN DIRECTORSHIPS OWNED ON
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATIONS DURING BY TRUSTEE HELD BY TRUSTEE MARCH 1,
NAME AND AGE HELD WITH FUND TIME SERVED THE PAST 5 YEARS OR NOMINEE OR NOMINEE 2005
------------ -------------- -------------- ---------------------------- ---------- --------------- ------------
9
NUMBER OF
PORTFOLIOS SHARES OF
IN FUND THE FUND
COMPLEX* OTHER BENEFICIALLY
TERM OF OFFICE OVERSEEN DIRECTORSHIPS OWNED ON
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATIONS DURING BY TRUSTEE HELD BY TRUSTEE MARCH 1,
NAME AND AGE HELD WITH FUND TIME SERVED THE PAST 5 YEARS OR NOMINEE OR NOMINEE 2005
------------ -------------- -------------- ---------------------------- ---------- --------------- ------------
Interested Trustees
Nicholas Dalmaso Trustee and Term expires Senior Managing Director and 2 Trustee of MBIA 0
Born in 1965(3) Nominee in 2007; General Counsel of Claymore Capital/Claymore
served since Securities, Inc. Fund (2000- Managed
August 2003 present) and Claymore Duration
Advisors, LLC Investment
(2003-present); Manager of Grade Municipal
Claymore Fund Management Fund (2003-
Company LLC (2002-present); present);
Chief Executive Officer, Director of
Chief Legal Officer and Flaherty &
Chief Compliance Officer to Crumrine/Claymore
funds in the Claymore Preferred
Advisors, LLC fund complex. Securities
Formerly: Assistant General Income Fund
Counsel of John Nuveen and (2002-present);
Company, Inc. (1999-2001); Trustee of
Vice President and Associate Advent Claymore
General Counsel of Van Convertible
Kampen Investments Securities &
(1992-1999). Income (2003-
present);
Trustee of
Flaherty &
Crumrine/Claymore
Total Return
Fund, Inc.
(2003-present);
Trustee of
Dreman/Claymore
Dividend &
Income Fund
(2003-present);
Trustee of
TS&W/Claymore
Tax-Advantaged
Balanced Fund
(2004-present);
Trustee of
Madison/Claymore
Covered Call
Fund (2004-
present);
Trustee of
Fiduciary/Claymore
MLP Opportunity
Fund (2004-
present).
10
NUMBER OF
PORTFOLIOS SHARES OF
IN FUND THE FUND
COMPLEX* OTHER BENEFICIALLY
TERM OF OFFICE OVERSEEN DIRECTORSHIPS OWNED ON
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATIONS DURING BY TRUSTEE HELD BY TRUSTEE MARCH 1,
NAME AND AGE HELD WITH FUND TIME SERVED THE PAST 5 YEARS OR NOMINEE OR NOMINEE 2005
------------ -------------- -------------- ---------------------------- ---------- --------------- ------------
Randolph L. Kohn Trustee and Term expires President of Western 2 0
Born in 1947(4) President in 2006; Asset/Claymore U.S. Treasury
served since Inflation Protected
August 2003 Securities Fund 2
(2004-present), a closed-end
fund. Formerly: Director,
Global Client Services and
Marketing of Western Asset
Management Company
(1984-2002); Director
(1996-2001) and Chairman
(2000-2001) of Arroyo Seco,
Inc.; Director of Marketing
of American Express Asset
Management(1982- 1984);
Director of Marketing of
First Asset Management
(1979-1982); Marketing
Executive of Kemper
Financial Services
(1975-1979).
11
---------------
(1) Member of the Audit Committee of the Board of Trustees.
(2) Member of the Governance and Nominating Committee of the Board of Trustees.
(3) Mr. Dalmaso may be deemed to be an "interested person" (as defined in
section 2(a)(19) of the Investment Company Act of 1940, as amended (the
"1940 Act")) of the Fund because of his position as an officer of Claymore
Securities, Inc., the Fund's shareholder servicing agent, and his ownership
interest in Claymore Group, LLC, the parent company of that entity.
(4) Mr. Kohn is an "interested person" (as defined above) of the Fund because of
his position as President of the Fund and his ownership of shares of common
stock of Legg Mason, Inc., the parent company of the Fund's investment
adviser, Western Asset Management Company (the "Investment Adviser").
* Each Trustee also serves as a Trustee of Western Asset/Claymore U.S.
Treasury Inflation Protected Securities Fund 2, a closed-end investment
company, which is considered part of the same Fund Complex as the Fund. The
Investment Adviser serves as subadviser to Western Asset/Claymore U.S.
Treasury Inflation Protected Securities Fund 2.
The following table states the dollar range of equity securities
beneficially owned as of March 1, 2005 by each Trustee and nominee in the Fund
and, on an aggregate basis, in any registered investment companies overseen or
to be overseen by the Trustee or nominee in the same "family of investment
companies."
AGGREGATE DOLLAR RANGE
OF EQUITY SECURITIES IN
ALL FUNDS OVERSEEN OR TO
BE OVERSEEN BY TRUSTEE
OR NOMINEE IN FAMILY
DOLLAR RANGE OF EQUITY OF INVESTMENT
NAME OF NOMINEE SECURITIES IN THE FUND COMPANIES
--------------- ---------------------- ------------------------
Peter C. Erichsen..................................
Michael Larson.....................................
Ronald A. Nyberg...................................
Ronald E. Toupin................................... $0 $0
Interested Trustees
Nicholas Dalmaso...................................
Randolph L. Kohn................................... $0 $10,001 - 50,000
12
As of March 1, 2005, all Trustees, nominees for Trustees and officers of
the Fund as a group beneficially owned less than 1% of the outstanding Common
Shares or Preferred Shares of the Fund on such date.
Audit Committee. The Board of Trustees has established an Audit Committee
composed solely of Trustees who are not "interested persons" (as defined in the
1940 Act) of the Fund or the Investment Adviser, consisting of Messrs. Erichsen,
Larson, Nyberg and Toupin. Each member of the Audit Committee is "independent,"
as independence for audit committee members is defined in the currently
applicable listing standards of the New York Stock Exchange, on which the Common
Shares of the Fund are listed and traded. The Audit Committee provides oversight
with respect to the accounting and financial reporting policies and procedures
of the Fund and, among other things, considers the selection of independent
public accountants for the Fund and the scope of the audit and approves services
proposed to be performed by those accountants on behalf of the Fund and, under
certain circumstances, the Investment Adviser and certain affiliates. The
Trustees have adopted a written charter for the Audit Committee, a copy of which
was attached as Appendix A to the Fund's proxy statement dated March 31, 2004.
The Audit Committee of the Fund has submitted the following report:
The Audit Committee has reviewed and discussed with management of the Fund
the audited financial statements for the last fiscal year. The Audit Committee
has discussed with the Fund's independent accountants the matters required to be
discussed by Statements on Auditing Standards No. 61 (SAS 61). SAS 61 requires
independent accountants to communicate to the Audit Committee matters including,
if applicable: (1) methods used to account for significant unusual transactions;
(2) the effect of significant accounting policies in controversial or emerging
areas for which there is a lack of authoritative guidance or consensus; (3) the
process used by management in formulating particularly sensitive accounting
estimates and the basis for the accountant's conclusions regarding the
reasonableness of those estimates; and (4) disagreements with management over
the application of accounting principles and certain other matters. The Audit
Committee has received the written disclosures and the letter from the Fund's
independent accountants required by Independence Standards Board Standard No. 1
(requiring accountants to make written disclosures to and discuss with the Audit
Committee various matters relating to the accountants' independence), and has
discussed with such accountants the independence of such accountants. Based on
the foregoing review and discussions, the Audit Committee recommended to the
Trustees
13
the inclusion of the audited financial statements for the last fiscal year in
the Fund's annual report to shareholders.
Ronald E. Toupin (Chairman)
Peter C. Erichsen
Michael Larson
Ronald A. Nyberg
Governance and Nominating Committee. The Board of Trustees has established
a Governance and Nominating Committee composed solely of Trustees who are not
"interested persons" (as defined in the 1940 Act) of the Fund or the Investment
Adviser, consisting of Messrs. Erichsen, Larson, Nyberg (Chairman) and Toupin.
The Governance and Nominating Committee meets to select nominees for election as
Trustees of the Fund and consider other matters of Board policy. The Trustees
have adopted a written charter for the Governance and Nominating Committee, a
copy of which was included as Appendix B to the Fund's proxy statement dated
March 31, 2004. The Fund does not currently maintain a website on which the
charter is made available.
The Governance and Nominating Committee requires that Trustee candidates
have a college degree or equivalent business experience, but has not otherwise
established specific, minimum qualifications that must be met by an individual
to be considered by the Committee for nomination as a Trustee. The Governance
and Nominating 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 to the Board of Trustees, (ii) relevant industry and related
experience, (iii) educational background, (iv) financial expertise, (v) an
assessment of the candidate's ability, judgment and expertise and (vi) overall
diversity of the Board's composition. The Governance and Nominating Committee
may consider candidates for Trustee recommended by the Fund's current Trustees,
officers, Investment Adviser, shareholders or any other source deemed to be
appropriate by the Governance and Nominating Committee. Candidates properly
submitted by shareholders (as described below) will be considered and evaluated
on the same basis as candidates recommended by other sources.
The policy of the Governance and Nominating Committee is to consider
nominees recommended by shareholders to serve as Trustee, provided that any such
recommendation is submitted in writing to the Fund, to the attention of the
Secretary, at the address of the principal executive offices of the Fund, not
less than one hundred and twenty calendar days nor more than one hundred and
thirty-five calendar days prior to the date of the meeting at which the nominee
would be elected and that such shareholder recommendation contains the
information about such nominee required by the Fund's procedures for
shareholders to submit nominee candidates, which are a part of the Governance
and Nominating Committee's Charter.
14
The Governance and Nominating Committee has full discretion to reject nominees
recommended by shareholders, and there is no assurance that any such person so
recommended and considered by the Governance and Nominating Committee will be
nominated for election to the Fund's Board of Trustees.
Meetings. During 2004, the Board of Trustees held six meetings, the Audit
Committee held five meetings and the Governance and Nominating Committee held
three meetings. Each Trustee attended each of the meetings of the Board of
Trustees and the Committees of the Board of Trustees on which he served. The
Fund's policies require the Trustees to attend the Fund's annual shareholder
meetings, and annual meetings are generally expected to be held in connection
with regularly scheduled meetings of the Board of Trustees in order to
facilitate attendance. Each Trustee attended the Fund's annual shareholder
meeting in May 2004.
Shareholder Communications. The Board of Trustees provides a process for
shareholders to send communications to the Board of Trustees. Shareholders may
mail written communications to the attention of the Board of Trustees, care of
the Fund's Secretary, at the Fund's shareholder servicing agent, Claymore
Securities, Inc., 2455 Corporate West Drive, Lisle, Illinois 60532. The written
communication must include the shareholder's name, be signed by the shareholder,
refer to the Fund, and include the class and number of shares held by the
shareholder as of a recent date.
Trustee Compensation. Trustees of the Fund who are affiliated persons of
the Fund, the Investment Adviser, or Claymore Securities, Inc. receive no salary
or fees from the Fund. Effective February 2005, each other Trustee of the Fund
receives a fee of $15,000 annually for serving as a Trustee of the Fund, and a
fee of $1,000 and related expenses for each meeting of the Board of Trustees
attended. The Chairman of the Board of Trustees receives an additional $2,000
per year for serving in that capacity. Audit Committee members receive $500 for
each meeting, and the Audit Committee Chairman receives an additional $1,500
annually. Other committee members receive $500 per meeting.
15
For the fiscal year ended December 31, 2004, the Trustees received the
compensation set forth in the following table for serving as Trustees of the
Fund and as Trustees of the other fund in the same "Fund Complex."
PENSION OR TOTAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL FROM THE FUND AND
COMPENSATION FROM ACCRUED AS PART OF BENEFITS UPON ITS FUND COMPLEX
NAME OF PERSON THE FUND FUND'S EXPENSES RETIREMENT PAID TO TRUSTEES(1)
-------------- ----------------- ------------------- ---------------- -------------------
Peter C. Erichsen........ $19,500 0 0 $37,500
Michael Larson........... $16,000 0 0 $23,000
Ronald A. Nyberg......... $18,000 0 0 $34,500
Ronald E. Toupin......... $19,500 0 0 $37,500
Interested Trustees
Nicholas Dalmaso......... 0 0 0 0
Randolph Kohn............ 0 0 0 0
---------------
(1) Includes amounts received in 2004 from the Fund and from Western
Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2, which is
considered part of the same Fund Complex as the Fund.
During 2004, the Fund paid no remuneration to its officers, all of whom
were also officers or employees of the Investment Adviser, Claymore Securities,
Inc. or their respective affiliates.
Required Vote. Election of Mr. Erichsen to the Board of Trustees of the
Fund requires the affirmative vote of a plurality of the Common Shares entitled
to vote on the election of Mr. Erichsen and present in person or represented by
proxy at the Annual Meeting and the affirmative vote of a plurality of the
Preferred Shares entitled to vote on the election of Mr. Erichsen and present in
person or represented by proxy at the Annual Meeting. Election of Mr. Nyberg to
the Board of Trustees of the Fund requires the affirmative vote of a plurality
of the Preferred Shares (voting as a separate class) entitled to vote on the
election of Mr. Nyberg and present in person or represented by proxy at the
Annual Meeting. The Trustees unanimously recommend that shareholders vote to
elect Messrs. Erichsen and Nyberg to the Board of Trustees.
16
PROPOSAL 2
PROPOSAL TO AMEND THE FUND'S BYLAWS
The Trustees of the Fund are proposing to amend a provision of the Fund's
Bylaws regarding the election of Trustees by Preferred Shareholders. The 1940
Act requires that at least two Trustees of the Fund be elected by Preferred
Shareholders (the "Preferred Share Trustees"). The remainder of the Trustees
must be elected by the Common Shareholders and Preferred Shareholders voting
together as a class. The Bylaws currently provide that the Preferred
Shareholders shall be entitled, as a class, and to the exclusion of the Common
Shareholders, to elect two Trustees of the Fund at any meeting of shareholders
of the Fund held for the election of Trustees. This provision of the Bylaws was
intended to comply with the 1940 Act's requirements regarding the election of
Preferred Share Trustees. However, because of the Fund's classified board
structure, not all Trustees of the Fund stand for re-election at each annual
meeting. Accordingly, there is a potential ambiguity in the Bylaws as to whether
(i) Preferred Shareholders, as a class and to the exclusion of the Common
Shareholders, elect only the Preferred Share Trustees or (ii) the Preferred
Shareholders elect two Trustees standing for election at each meeting, as a
class and to the exclusion of the Common Shareholders, regardless of whether or
not such Trustees have been designated as Preferred Share Trustees. The proposed
amendment to the Bylaws would clarify that the Preferred Shareholders are
entitled, as a class and to the exclusion of the Common Shareholders, to elect
only the two Preferred Share Trustees. A Trustee not designated as a Preferred
Share Trustee would be elected by the Common Shareholders and Preferred
Shareholders voting together as a class, which is consistent with applicable law
and the intent of the Bylaws.
A copy of the proposed amendment to the Bylaws is attached to this Proxy
Statement as Appendix A. For a more complete understanding of Proposal 2,
Preferred Shareholders should review Appendix A.
Required Vote. Approval of Proposal 2 will require the affirmative vote of
a majority of the Fund's Preferred Shares, which means the affirmative vote of
the lesser of (1) 67% of the Preferred Shares that are present at the Annual
Meeting, if the holders of more than 50% of the Preferred Shares outstanding as
of the Record Date are present or represented by proxy at the Annual Meeting, or
(2) more than 50% of the Preferred Shares outstanding on the Record Date. If the
vote required to approve Proposal 2 is not obtained, the Fund's Bylaws will not
be changed and Trustees will consider what other actions to take in the best
interests of the Fund. The Trustees unanimously recommend that shareholders vote
for Proposal 2.
17
INFORMATION CONCERNING THE INVESTMENT
ADVISER AND THE FUND'S OFFICERS
The Investment Adviser is a subsidiary of Legg Mason, Inc., a holding
company which, through its subsidiaries, is engaged in providing securities
brokerage, investment advisory, corporate and public finance, and mortgage
banking services to individuals, institutions, corporations and municipalities,
and the provision of other financial services. The address of Legg Mason, Inc.
is 100 Light Street, Baltimore, Maryland 21202. The Investment Adviser's address
is 385 East Colorado Boulevard, Pasadena, California 91101. An affiliate of the
Investment Adviser, Legg Mason Fund Adviser, Inc., 100 Light Street, Baltimore,
Maryland 21202, serves as the Fund's administrator.
Information regarding the executive officers of the Fund and their
ownership of Shares of the Fund is set forth below. Unless otherwise noted, the
address of each officer is c/o the Fund at the address listed above.
SHARES OF THE
FUND
TERM OF OFFICE BENEFICIALLY
POSITION(S) HELD AND LENGTH PRINCIPAL OCCUPATION(S) OWNED ON
NAME AND AGE WITH FUND OF TIME SERVED(1) DURING THE PAST 5 YEARS MARCH 1, 2005
------------ ----------------- ------------------- ----------------------- --------------
Randolph L. Kohn Trustee and Served since August See "Election of 0
Born in 1947 President 2003 Trustees" on page 9
above.
Gregory B. McShea Vice President Served since August General Counsel of 0
Born in [1965] 2003 Western Asset
Management Company
(2003-present); Vice
President of Western
Asset/ Claymore U.S.
Treasury Inflation
Protected Securities
Fund 2 (2004-present).
Formerly: Associate
General Counsel and
Compliance Director,
Private Client Group of
Legg Mason Wood
18
SHARES OF THE
FUND
TERM OF OFFICE BENEFICIALLY
POSITION(S) HELD AND LENGTH PRINCIPAL OCCUPATION(S) OWNED ON
NAME AND AGE WITH FUND OF TIME SERVED(1) DURING THE PAST 5 YEARS MARCH 1, 2005
------------ ----------------- ------------------- ----------------------- --------------
Walker, Incorporated, a
brokerage firm ("LMWW")
(1997-2003).
Marie K. Karpinski Treasurer and Served since August Vice President of LMWW 0
Born in 1949 Principal 2003 (1992- present); Vice
Financial and President and Treasurer
100 Light Street Accounting of all Legg Mason
Baltimore, MD 21202 Officer retail funds, open-end
investment companies
(1986-present); Vice
President and Treasurer
of Legg Mason Charles
Street Trust, Inc., an
open-end investment
company (1998-
present); Treasurer and
Principal Financial and
Accounting Officer of
Pacific American Income
Shares, Inc.
(closed-end investment
company) (2001-
present), Western Asset
Funds, Inc.
(1990-present), Western
Asset Premier Bond Fund
19
SHARES OF THE
FUND
TERM OF OFFICE BENEFICIALLY
POSITION(S) HELD AND LENGTH PRINCIPAL OCCUPATION(S) OWNED ON
NAME AND AGE WITH FUND OF TIME SERVED(1) DURING THE PAST 5 YEARS MARCH 1, 2005
------------ ----------------- ------------------- ----------------------- --------------
(2001-present), and
Western Asset/Claymore
U.S. Treasury Inflation
Protected Securities
Fund 2 (2004-present).
Formerly: Assistant
Treasurer of Pacific
American Income Shares,
Inc. (1988-2001).
Steven M. Hill Assistant Served since May Managing Director of 0
Born in 1964 Treasurer 2004 Claymore Advisors, LLC
and Claymore
2455 Corporate Securities, Inc.
West Drive (2003-present); Chief
Lisle, IL 60532 Financial Officer and
Treasurer or Assistant
Treasurer of all
closed-end investment
companies in the
Claymore Advisors, LLC
fund complex
(2004-present).
Formerly, Treasurer of
Henderson Global Funds
and Operations Manager
for Henderson Global
Investors (North
America) Inc.
20
SHARES OF THE
FUND
TERM OF OFFICE BENEFICIALLY
POSITION(S) HELD AND LENGTH PRINCIPAL OCCUPATION(S) OWNED ON
NAME AND AGE WITH FUND OF TIME SERVED(1) DURING THE PAST 5 YEARS MARCH 1, 2005
------------ ----------------- ------------------- ----------------------- --------------
(2002-2003); Managing
Director of FrontPoint
Partners LLC
(2001-2002); Vice
President of Nuveen
Investments (1999-
2001); Chief Financial
Officer of Skyline
Asset Management LP
(1999); Vice President
of Van Kampen
Investments and
Assistant Treasurer of
Van Kampen mutual funds
(1989-1999).
Erin K. Morris Assistant Served since August Assistant Vice 0
Born in 1966 Treasurer 2003 President of LMWW
(2002- present);
100 Light Street Assistant Treasurer of
Baltimore, MD 21202 Legg Mason Income
Trust, Inc., Legg Mason
Cash Reserve Trust,
Legg Mason Tax Exempt
Trust, Inc. (open-end
investment companies),
Legg Mason Tax-Free
Income Fund,
21
SHARES OF THE
FUND
TERM OF OFFICE BENEFICIALLY
POSITION(S) HELD AND LENGTH PRINCIPAL OCCUPATION(S) OWNED ON
NAME AND AGE WITH FUND OF TIME SERVED(1) DURING THE PAST 5 YEARS MARCH 1, 2005
------------ ----------------- ------------------- ----------------------- --------------
Pacific American Income
Shares, Inc., Western
Asset Funds, Inc.,
Western Asset Premier
Bond Fund
(2001-present), and
Western Asset/Claymore
U.S. Treasury Inflation
Protected Securities
Fund 2 (2004-present);
Manager, Fund
Accounting of LMWW
(2000-present).
Formerly: Assistant
Manager, Fund
Accounting of LMWW
(1993-2000).
Amy M. Olmert Chief Compliance Served since Senior Vice President 0
Born in 1963 Officer September 2004 of Legg Mason, Inc.
(2004- present); Vice
100 Light Street President and Chief
Baltimore, MD 21202 Compliance Officer of
all Legg Mason retail
open-end investment
companies (2004-
present); Vice
President and Chief
Compliance Officer of
Legg Mason Charles
Street
22
SHARES OF THE
FUND
TERM OF OFFICE BENEFICIALLY
POSITION(S) HELD AND LENGTH PRINCIPAL OCCUPATION(S) OWNED ON
NAME AND AGE WITH FUND OF TIME SERVED(1) DURING THE PAST 5 YEARS MARCH 1, 2005
------------ ----------------- ------------------- ----------------------- --------------
Trust, Inc., an
open-end investment
company (2004-
present); Chief
Compliance Officer of
Western Asset Funds,
Inc., Western Asset
Premier Bond Fund,
Pacific American Income
Shares, Inc. and
Western Asset/ Claymore
U.S. Treasury Inflation
Protected Securities
Fund 2 (2004-present).
Formerly, Director
(2000-2003) and
Managing Director
(2003-2004) of Deutsche
Asset Management.
Heidemarie Gregoriev Secretary Served since May Vice President and 0
Born in 1971 2004 Assistant General
Counsel of Claymore
2455 Corporate Advisors, LLC and
West Drive Claymore Securities,
Lisle, IL 60532 Inc. (2004-present);
Secretary of all
closed-end investment
companies in the
23
SHARES OF THE
FUND
TERM OF OFFICE BENEFICIALLY
POSITION(S) HELD AND LENGTH PRINCIPAL OCCUPATION(S) OWNED ON
NAME AND AGE WITH FUND OF TIME SERVED(1) DURING THE PAST 5 YEARS MARCH 1, 2005
------------ ----------------- ------------------- ----------------------- --------------
Claymore Advisors, LLC
fund complex
(2004-present).
Previously, Legal
Counsel of Henderson
Global Investors (North
America) Inc. and
Assistant Secretary
(2001-2004) and Chief
Legal Officer
(2003-2004) of
Henderson Global Funds;
Attorney at Gardner,
Carton & Douglas (1997-
2001).
Richard C. Sarhaddi Assistant Served since May Assistant Vice 0
Born in 1974 Secretary 2004 President and Attorney,
Claymore Advisors, LLC
2455 Corporate and Claymore
West Drive Securities, Inc., and
Lisle, IL 60532 Assistant Secretary of
all closed-end
investment companies in
the Claymore Advisors,
LLC fund complex
(2004-present).
Formerly, Editor at CCH
Incorporated
(2003-2004).
---------------
(1) Each officer holds office until his or her respective successor is chosen
and qualified, or in each case until he or she sooner dies, resigns, is
removed with or without cause or becomes disqualified.
24
SHAREHOLDER PROPOSALS FOR 2006 ANNUAL MEETING
Proposals that shareholders wish to present to the 2006 Annual Meeting and
to have included in the Fund's proxy materials relating to such meeting must be
delivered to the Secretary of the Fund not less than 120 days prior to
[ ], 2006.
Shareholders who wish to make a proposal at the 2006 Annual
Meeting -- other than one that will be included in the Fund's proxy
materials -- should notify the Fund not less than 45 days prior to [ ],
2006.
Shareholders who wish to propose one or more nominees for election as
Trustees, or to make another proposal, at the 2006 annual meeting must provide
written notice to the Fund (including all required information) so that such
notice is received in good order by the Fund no earlier than 45 days prior to
[ ], 2006 and no later than 60 days prior to [ ], 2006.
The proper submission of a shareholder proposal does not guarantee that it
will be included in the Fund's proxy materials or presented at a shareholder
meeting. Shareholder proposals are subject to the requirements of applicable law
and the Fund's Declaration of Trust and Bylaws.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 30(h) of the 1940 Act and Section 16(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), require the Fund's officers and
Trustees, the Investment Adviser, certain affiliates of the Investment Adviser,
and persons who beneficially own more than ten percent of a registered class of
the Fund's equity securities, among others, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC") and the
New York Stock Exchange. These persons are required by SEC regulation to furnish
the Fund with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Fund believes that,
during 2004, all such filing requirements were met, with the exception that, due
to an administrative oversight, Mr. Erichsen made one late filing on Form 4 with
respect to a previously unreported purchase of Common Shares.
ANNUAL REPORT TO SHAREHOLDERS
The Fund's Annual Report to Shareholders for the fiscal year ended December
31, 2004 contains financial and other information pertaining to the Fund. The
Fund will furnish without charge to each person whose proxy is being solicited,
upon request of such person, a copy of the Annual Report to Shareholders.
Requests for copies of the Annual Report to Shareholders should be directed to
Western Asset/Claymore
25
U.S. Treasury Inflation Protected Securities Fund, c/o Claymore Securities,
Inc., 2455 Corporate West Drive, Lisle, Illinois 60532 or you may call
866-233-4001.
INDEPENDENT ACCOUNTANTS
The Audit Committee of the Board of Trustees has selected
PricewaterhouseCoopers LLP as the independent public accountants of the Fund for
the fiscal year ending December 31, 2005, and the Board of Trustees, including a
majority of the Trustees who are not "interested persons" (as defined in the
1940 Act) of the Fund, has unanimously ratified such selection.
PricewaterhouseCoopers LLP's service is subject to termination by a majority of
the outstanding Shares of the Fund. Representatives of PricewaterhouseCoopers
LLP are currently expected to attend the meeting, and may, as they see fit, make
a statement and/or respond to appropriate questions.
The following table presents fees billed in each of the Fund's last two
fiscal years for services rendered to the Fund by PricewaterhouseCoopers LLP:
FISCAL YEAR ENDED AUDIT FEES AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
----------------- ---------- ------------------ -------- --------------
December 31, 2003* $59,000 $14,000 $4,200 $0
December 31, 2004 $25,100 $ 6,400 $ 900 $0
---------------
* The Fund's initial fiscal year was from September 30, 2003 through December
31, 2003.
"Audit Fees" represents fees billed for each of the last two fiscal years
for professional services rendered for the audit of the Fund's financial
statements for those fiscal years (the Fund's seed financial statements during
the initial fiscal year) or services that are normally provided by the
accountant in connection with statutory or regulatory filings or engagements for
that fiscal year.
"Audit Related Fees" represents fees billed for each of the last two fiscal
years for assurance and related services reasonably related to the performance
of the audit of the Fund's annual financial statements for that year, including
a review of rating agency compliance testing for the Fund's Preferred Shares.
"Tax Fees" represents fees billed for the each of the last two fiscal years
for professional services related to tax compliance, tax advice and tax
planning, including preparation of federal and state income tax returns and
preparation of excise tax returns.
"All Other Fees" represents fees, if any, billed for other products and
services rendered by PricewaterhouseCoopers LLP to the Fund for the last two
fiscal years.
For the Fund's fiscal years ended December 31, 2003 and December 31, 2004,
PricewaterhouseCoopers LLP billed aggregate non-audit fees in the amounts of
$883,350 and $372,631, respectively, to the
26
Fund, the Investment Adviser and any entity controlling, controlled by or under
common control with the Investment Adviser that provides ongoing services to the
Fund.
Pre-Approval Policies of the Audit Committee. The Audit Committee has
determined that all work performed for the Fund by PricewaterhouseCoopers LLP
will be pre-approved by the full Audit Committee and, therefore, has not adopted
pre-approval procedures. Since the Fund's inception in August 2003, all audit
and non-audit services performed by PricewaterhouseCoopers LLP for the Fund, and
all non-audit services performed by PricewaterhouseCoopers LLP for the
Investment Adviser and any entity controlling, controlled by or under common
control with the Investment Adviser that provides ongoing services to the Fund
(a "Service Affiliate"), to the extent that such services related directly to
the operations and financial reporting of the Fund, have been pre-approved by
the Audit Committee. No "Audit-Related Fees," "Tax-Fees" and "Other Fees" set
forth in the table above were waived pursuant to 17 CFR 210.2-01(c)(7)(i)(c).
PricewaterhouseCoopers LLP did not bill any fees for non-audit services
that required pre-approval by the Audit Committee pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X during the Fund's fiscal years ended
December 31, 2003 and December 31, 2004.
The Audit Committee has considered whether the provision of the non-audit
services rendered by PricewaterhouseCoopers LLP since the Fund's inception to
the Investment Adviser and any Service Affiliate that were not required to be
pre-approved by the Audit Committee pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the independence of
PricewaterhouseCoopers LLP.
ADJOURNMENT
In the absence of a quorum at the Annual Meeting, or (even if a quorum is
present) if sufficient votes in favor of a proposal set forth in the Notice of
Annual Meeting are not received by the time scheduled for the Annual Meeting,
the persons named as proxies may propose one or more adjournments of the Annual
Meeting after the date set for the original Annual Meeting, with no other notice
than announcement at the Annual Meeting, to permit further solicitation of
proxies with respect to such proposal. In addition, if, in the judgment of the
persons named as proxies, it is advisable to defer action on a proposal, the
persons named as proxies may propose one or more adjournments of the Annual
Meeting with respect to such proposal for a reasonable time. Any adjournments
with respect to a proposal will require the affirmative vote of a plurality of
the Shares of the Fund entitled to vote thereon present in person or represented
by proxy at the session of the Annual Meeting to be adjourned. The persons named
as proxies will vote in favor of such adjournment those proxies which they are
entitled to vote in favor of the proposal in question. They will vote against
any such adjournment those proxies required to be voted against such proposal.
The costs
27
of any additional solicitation and of any adjourned session will be borne by the
Fund. Any proposals for which sufficient favorable votes have been received by
the time of the Annual Meeting may be acted upon and, if so, such action will be
final regardless of whether the Annual Meeting is adjourned to permit additional
solicitation with respect to any other proposal.
OTHER BUSINESS
The Fund is not aware of any other matters to be presented for action at
the Annual Meeting. However, if any such other matters are properly presented,
it is the intention of the persons designated in the enclosed proxy to vote in
accordance with their best judgment.
By Order of the Board of Trustees
Heidemarie Gregoriev, Secretary
March [ ], 2005
28
APPENDIX A
WESTERN ASSET/CLAYMORE U.S. TREASURY INFLATION
PROTECTED SECURITIES FUND
PROPOSED AMENDMENT TO THE FUND'S SECOND AMENDED AND RESTATED BYLAWS
Article 12, Part I, Section 4(a) of the Bylaws currently provides:
"One Vote Per Share of Preferred Shares. Except as otherwise provided
herein or in the Declaration of Trust or as otherwise required by law, (i)
each Holder of Preferred Shares shall be entitled to one vote for each
share of Preferred Shares held by such Holder on each matter submitted to a
vote of shareholders of the Trust, and (ii) the holders of outstanding
preferred shares, including each share of the Preferred Shares, and of
Common Shares shall vote together as a single class; provided, however,
that, at any meeting of the shareholders of the Trust held for the election
of Trustees, the holders of outstanding preferred shares, including the
Preferred Shares, represented in person or by proxy at said meeting shall
be entitled, as a class, to the exclusion of the holders of all other
securities and classes of shares of beneficial interest of the Trust, to
elect two Trustees of the Trust, each Preferred Share entitling the holder
thereof to one vote. Subject to paragraph 4(b) of this Part I, the holders
of outstanding Common Shares and preferred shares, voting together as a
single class, shall elect the balance of the Trustees."
If Proposal 2 is approved by the affirmative vote of the lesser of (1) 67%
of the Preferred Shares that are present at the Annual Meeting, if the holders
of more than 50% of the Preferred Shares outstanding as of the Record Date are
present or represented by proxy at the Annual Meeting, or (2) more than 50% of
the Preferred Shares outstanding on the Record Date, Article 12, Part I, Section
4(a) of the Bylaws will be amended to read as follows:
"One Vote Per Share of Preferred Shares. Except as otherwise provided
herein or in the Declaration of Trust or as otherwise required by law, (i)
each Holder of Preferred Shares shall be entitled to one vote for each
share of Preferred Shares held by such Holder on each matter submitted to a
vote of shareholders of the Trust, and (ii) the holders of outstanding
preferred shares, including each share of the Preferred Shares, and of
Common Shares shall vote together as a single class; provided, however,
that, at any meeting of the shareholders of the Trust held for the election
of Trustees, the holders of outstanding preferred shares, including the
Preferred Shares, represented in person or by proxy at said meeting shall
be entitled, as a class, to the exclusion of the holders of all other
securities and classes of shares of beneficial interest of the Trust, to
elect a number of Trustees (which number may be zero) such that,
immediately following such meeting, two Trustees of the Trust shall have
been elected
A-1
exclusively by holders of outstanding preferred shares, including the
Preferred Shares (whether at such meeting, at a prior meeting of the
shareholders, or at such meeting or a prior meeting of the shareholders
with respect to one such Trustee and at a separate prior meeting of the
shareholders with respect to the other such Trustee), each Preferred Share
entitling the holder thereof to one vote. Subject to paragraph 4(b) of this
Part I, the holders of outstanding Common Shares and preferred shares,
voting together as a single class, shall elect the balance of the
Trustees."
A-2
WESTERN ASSET/CLAYMORE U.S. TREASURY INFLATION PROTECTED SECURITIES FUND
Dear Shareholder,
Please take note of the important information enclosed with this Proxy Ballot.
There are several issues related to the management and operation of your Fund
that require your immediate attention and approval. These matters are discussed
in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope. Your vote must be received prior to the Annual Meeting of
Shareholders, May 9, 2005.
Thank you in advance for your prompt consideration of this matter.
Sincerely,
Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund
DETACH HERE
--------------------------------------------------------------------------------
WESTERN ASSET/CLAYMORE U.S. TREASURY INFLATION PROTECTED SECURITIES FUND
COMMON SHARES
ANNUAL MEETING OF SHAREHOLDERS - MAY 9, 2005
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES OF WESTERN ASSET/CLAYMORE U.S. TREASURY INFLATION PROTECTED
SECURITIES FUND
The undersigned, revoking all prior proxies, hereby appoints Randolph L. Kohn,
Gregory B. McShea, Heidemarie Gregoriev and Richard C. Sarhaddi and each of
them, attorneys and proxies of the undersigned, each with full power of
substitution, to attend the Annual Meeting of the Shareholders of Western
Asset/Claymore U.S. Treasury Inflation Protected Securities Fund, a
Massachusetts business trust (the "Fund"), to be held at 2455 Corporate West
Drive, Lisle, Illinois, on May 9, 2005, at 11:30 a.m., Central time, and at any
adjournments thereof, and thereat to vote as indicated all common shares of
beneficial interest of the Fund which the undersigned would be entitled to vote
if personally present with respect to the matters listed on the reverse, which
are more fully described in the Notice of Meeting and Proxy Statement of the
Fund, receipt of which is acknowledged by the undersigned.
PLEASE VOTE, DATE, SIGN ON REVERSE AND RETURN PROMPTLY
USING THE ENCLOSED ENVELOPE.
Please sign this Proxy exactly as your name(s) appear(s) on the reverse side.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign. If a corporation, this signature
should be that of an authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WESTERN ASSET/CLAYMORE U.S. TREASURY INFLATION PROTECTED SECURITIES FUND
C/O EQUISERVE TRUST COMPANY, N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
[X] Please mark
vote as in
this example
WESTERN ASSET/CLAYMORE U.S. TREASURY INFLATION PROTECTED SECURITIES FUND
1. Election of Class II Trustee.
(01) PETER C. ERICHSEN
FOR [ ] [ ] WITHHELD
With discretionary power upon such other matters as may properly come before the
meeting or any adjournment thereof.
Mark box at right if an address change or comment has been noted on the reverse
side of this card. [ ]
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION AS CLASS II TRUSTEE OF THE NOMINEE OF THE BOARD
OF TRUSTEES.
Please be sure to sign and date this Proxy.
Signature: _________________________________ Date: ___________
Signature: _________________________________ Date: ___________
WESTERN ASSET/CLAYMORE U.S. TREASURY INFLATION PROTECTED SECURITIES FUND
Dear Shareholder,
Please take note of the important information enclosed with this Proxy Ballot.
There are several issues related to the management and operation of your Fund
that require your immediate attention and approval. These matters are discussed
in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted. Then sign the card, detached it and return your proxy vote in the
enclosed postage paid envelope. Your vote must be received prior to the Annual
Meeting of Shareholders, May 9, 2005.
Thank you in advance for your prompt consideration of this matter.
Sincerely,
Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund
DETACH HERE
WESTERN ASSET/CLAYMORE U.S. TREASURY INFLATION PROTECTED SECURITIES FUND
PREFERRED SHARES
ANNUAL MEETING OF SHAREHOLDERS - MAY 9, 2005
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES OF WESTERN ASSET/CLAYMORE U.S. TREASURY INFLATION PROTECTED
SECURITIES FUND
The undersigned, revoking all prior proxies, hereby appoints Randolph L. Kohn,
Gregory B. McShea, Heidemarie Gregoriev and Richard C. Sarhaddi, and each of
them, attorneys and proxies of the undersigned, each with full power of
substitution, to attend the Annual Meeting of the Shareholders of Western
Asset/Claymore U.S. Treasury Inflation Protected Securities Fund, a
Massachusetts business trust (the "Fund"), to be held at 2455 Corporate West
Drive, Lisle, Illinois, on May 9, 2005, at 11:30 a.m., Central time, and at any
adjournments thereof, and thereat to vote as indicated all preferred shares of
beneficial interest of the Fund which the undersigned would be entitled to vote
if personally present with respect to the matters listed on the reverse, which
are more fully described in the Notice of Meeting and Proxy Statement of the
Fund, receipt of which is acknowledged by the undersigned.
PLEASE VOTE, DATE, SIGN ON REVERSE AND RETURN PROMPTLY
USING THE ENCLOSED ENVELOPE.
Please sign this Proxy exactly as your name(s) appear(s) on the reverse side.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign. If a corporation, this signature
should be that of an authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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WESTERN ASSET/CLAYMORE U.S. TREASURY INFLATION PROTECTED SECURITIES FUND
C/O EQUISERVE TRUST COMPANY, N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
[X] Please mark
vote as in
this example
WESTERN ASSET/CLAYMORE U.S. TREASURY INFLATION PROTECTED SECURITIES FUND
1. Election of Class II Trustees.
(01) PETER C. ERICHSEN
(02) RONALD A. NYBERG
FOR [ ] [ ] WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
[ ] For both nominees except as noted above (strike out the name of a
nominee you do not wish to vote for)
2. Amendment to the Fund's Second Amended and Restated Bylaws relating to the
election of Trustees by the holders of the Fund's outstanding preferred shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
With discretionary power upon such other matters as may properly come before the
meeting or any adjournment thereof.
Mark box at right if an address change or comment has been noted on the reverse
side of this card. [ ]
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION AS CLASS II TRUSTEES OF THE NOMINEES OF THE BOARD
OF TRUSTEES AND FOR THE AMENDMENT TO THE FUND'S SECOND AMENDED AND RESTATED
BYLAWS.
Please be sure to sign and date this Proxy.
Signature: _________________________________ Date: ___________
Signature: _________________________________ Date: ___________