FORM OF EXPENSE REIMBURSEMENT AGREEMENT
EXPENSE REIMBURSEMENT AGREEMENT (the "Agreement"), dated as of ______, 2006
by and among Claymore Trust (the "Trust"), on behalf of the Claymore/Zacks
Multi-Cap Opportunities Fund series of the Trust (the "Fund"), Claymore
Advisors, LLC, a Delaware limited liability company (the "Advisor") and Zacks
Investment Management, Inc. (the "Sub-Advisor").
WHEREAS, the Trust is a Delaware statutory trust, and is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management company of the series type, and the Fund is a series of the Trust;
WHEREAS, the Trust and the Advisor have entered into an Investment Advisory
Agreement dated September 29, 2005 ("Advisory Agreement"), pursuant to which the
Advisor provides investment management and advisory services to the Fund for
compensation based on the value of the average daily net assets of the Fund;
WHEREAS, the Trust, the Advisor and the Sub-Advisor have entered into an
Investment Sub-Advisory Agreement dated September 29, 2005 ("Sub-Advisory
Agreement"), pursuant to which the Sub-Advisor provides certain investment
management and advisory services to the Fund for compensation based on the value
of the average daily net assets of the Fund; and
WHEREAS, the Trust, the Advisor and the Sub-Advisor have determined that it
is appropriate and in the best interests of the Fund and its shareholders to
maintain the expenses of the Fund at a level below the level to which the Fund
may otherwise be subject;
NOW THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMITATION.
1.1 Applicable Expense Limit. To the extent that the ordinary operating
expenses incurred by the Fund in any fiscal year, including but not limited to
investment advisory fees of the Advisor and investment sub-advisory fees of the
Sub-Advisor, but excluding interest, taxes, brokerage commissions, other
investment-related costs and extraordinary expenses, such as litigation and
other expenses not incurred in the ordinary course of the Fund's business ("Fund
Operating Expenses"), exceed the Operating Expense Limit, as defined in Section
1.2 below, the Advisor and the Sub-Advisor shall each be liable for such excess
amount (the "Excess Amount") to the extent set forth in this Agreement.
1.2 Operating Expense Limit. The Operating Expense Limit in any year with
respect to the Fund shall be 1.65% (annualized) of the average daily net assets
of the Fund for its Class A shares and 2.40% (annualized) for its Class C
shares.
1.3 Duration of Operating Expense Limit. The Operating Expense Limit with
respect to the Fund shall remain in effect during the term of this Agreement.
1.4 Method of Computation. To determine each of the Advisor's and the
Sub-Advisor's obligation with respect to the Excess Amount, each day the Fund
Operating Expenses for the Fund shall be annualized. If the annualized Fund
Operating Expenses for any day of the Fund exceed the Operating Expense Limit of
the Fund, the Advisor shall waive or reduce its investment advisory fee or
absorb the other Fund expenses in an amount sufficient to pay 50% of that day's
Excess Amount and the Sub-Advisor shall waive or reduce its investment
sub-advisory fee or absorb the other Fund expenses in an amount sufficient to
pay 50% of that day's Excess Amount. The Trust may offset amounts owed to the
Fund pursuant to this Agreement against the advisory fee payable to the Advisor
and the Advisor may offset the sub-advisory fee owed to the Sub-Advisor pursuant
to the Sub-Advisory Agreement. Furthermore, to the extent that 50% of the Excess
Amount exceeds such waived or reduced investment advisory fees, the Advisor
shall reimburse the Fund for any operating expenses. Likewise, to the extent
that 50% of the Excess Amount exceeds such waived or reduced investment
sub-advisory fees, the Sub-Advisor shall reimburse the Advisor for any operating
expenses.
2. REIMBURSEMENT OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS TO ADVISOR.
If on any day during which the Advisory Agreement is in effect, the
estimated annualized Fund Operating Expenses of the Fund for that day are less
than the Operating Expense Limit, the Advisor shall be entitled to reimbursement
by the Fund of the investment advisory fees waived or reduced and any other
expense reimbursements or similar payments remitted by the Advisor to the Fund
pursuant to Section 1 hereof (an "Advisor Reimbursement Amount") during any of
the first five years subsequent to the Fund's commencement of operations for a
period of up to three years from the date such amount was waived or reduced, to
the extent that the Fund's annualized Operating Expenses plus the amount so
reimbursed equals, for such day, the Operating Expense Limit, provided that such
amount paid to the Advisor will in no event exceed the Advisor Reimbursement
Amount and will not include any amounts previously reimbursed. Furthermore, as
between the Advisor and the Sub-Advisor, each party's respective Reimbursement
Amount will be equal to 50% of the total amount reimbursed by the Fund (the
"Total Reimbursement Amount"). The Advisor Reimbursement Amount will be accrued
daily and paid monthly in arrears.
3. REIMBURSEMENT OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS TO SUB-ADVISOR.
If on any day during which the Sub-Advisory Agreement is in effect, the
estimated annualized Fund Operating Expenses of the Fund for that day are less
than the Operating Expense Limit and the Advisor has been reimbursed by the Fund
for any Fund Operating Expenses paid or waived by the Advisor (excluding the
waiver of investment advisory fees) that are eligible for reimbursement pursuant
to Section 2 hereof, the Sub-Advisor shall be entitled to reimbursement by the
Advisor of the investment sub-advisory fees waived or reduced and any other
expense reimbursements or similar payments remitted by the Sub-Advisor to the
Advisor pursuant to Section 1 hereof (a "Sub-Advisory Reimbursement Amount")
during any of the first five years subsequent to the Fund's commencement of
operations for a period of up to three years from the date such amount was
waived or reduced, to the extent that the Fund's annualized Operating Expenses
plus the amount so reimbursed equals, for such day, the Operating Expense
2
Limit, provided that such amount paid to the Sub-Advisor will in no event exceed
the Sub-Advisor Reimbursement Amount and will not include any amounts previously
reimbursed. Furthermore, as between the Advisor and the Sub-Advisor, each
party's respective Reimbursement Amount will be equal to 50% of the Total
Reimbursement Amount. The Sub-Advisor Reimbursement Amount will be accrued daily
and paid monthly in arrears.
4. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall terminate upon the earlier of termination of the
Advisory Agreement or on April 1, 2009, or with respect to the Sub-Advisor, upon
termination of the Sub-Advisory Agreement. The obligations of the Advisor and
the Sub-Advisor under Section 1 of this Agreement and of the Fund under Section
2 of this Agreement shall survive the termination of this Agreement solely as to
expenses and obligations incurred prior to the date of such termination.
5. MISCELLANEOUS.
5.1 Captions. The captions in this Agreement are included for convenience
of reference only and in no other way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
5.2 Interpretation. Nothing herein contained shall be deemed to require the
Trust or the Fund to take any action contrary to the Trust's Agreement and
Declaration of Trust or By-Laws, or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trust's Board of Trustees of its responsibility for and control of
the conduct of the affairs of the Trust or the Fund.
5.3 Definitions. Any question of interpretation of any term or provision of
this Agreement, including but not limited to the investment advisory fee, the
investment sub-advisory fee, the computations of net asset values, and the
allocation of expenses, having a counterpart in or otherwise derived from the
terms and provisions of the Advisory Agreement, the Sub-Advisory Agreement or
the 1940 Act, shall have the same meaning as and be resolved by reference to
such Advisory Agreement, the Sub-Advisory Agreement or the 1940 Act.
5.4 Amendments. This Agreement may be amended only by a written agreement
signed by each of the parties hereto.
5.5 Limitation of Liability. This Agreement is executed by or on behalf of
the Trust, and Advisor is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Agreement and Declaration of Trust of
the Trust and agrees that the obligations assumed by the Trust pursuant to this
Agreement shall be limited in all cases to the Trust and its assets, and Advisor
shall not seek satisfaction of any such obligations from the trustees, officers
or shareholders of the Trust.
3
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
CLAYMORE TRUST
By:
-----------------------
Name:
Title:
CLAYMORE ADVISORS, LLC
By:
-----------------------
Name:
Title:
ZACKS INVESTMENT MANAGEMENT, INC.
By:
-----------------------
Name:
Title:
4
