UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811- 22005
Wells Fargo Advantage Global Dividend Opportunity Fund
(Exact name of registrant as specified in charter)
525 Market St., San Francisco, CA 94105
(Address of principal executive offices) (Zip code)
(Address of principal executive offices) (Zip code)
C. David Messman
Wells Fargo Funds Management, LLC
525 Market St., San Francisco, CA 94105
(Name and address of agent for service)
Wells Fargo Funds Management, LLC
525 Market St., San Francisco, CA 94105
(Name and address of agent for service)
Registrant’s telephone number, including area code: 800-643-9691
Date of fiscal year end: October 31, 2010
Date of reporting period: October 31, 2010
ITEM 1. REPORT TO SHAREHOLDERS
| Annual Report October 31, 2010 WELLS FARGO ADVANTAGE GLOBAL DIVIDEND OPPORTUNITY FUND (formerly Evergreen Global Dividend Opportunity Fund) This closed-end fund is no longer offered as an initial public offering and is only offered through broker/dealers on the secondary market. A closed-end fund is not required to buy its shares back from investors upon request. |
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Contents
Letter to Shareholders |
2 | |||
Portfolio of Investments |
5 | |||
Financial Statements |
||||
Statement of Assets and Liabilities |
9 | |||
Statement of Operations |
10 | |||
Statements of Changes in Net Assets |
11 | |||
Financial Highlights |
12 | |||
Notes to Financial Statements |
13 | |||
Report of Independent Registered Public Accounting Firm |
19 | |||
Other Information |
20 | |||
Automatic Dividend Reinvestment Plan |
27 | |||
List of Abbreviations |
28 |
The views expressed are as of October 31, 2010. Any
reference to a specific security in this report is not a
recommendation to purchase or sell any specific security or adopt
any investment strategy. The views are subject to change at any
time in response to changing circumstances in the market and are
not intended to predict or guarantee the future performance of any
individual security, market sector or the markets generally, or the
Wells Fargo Advantage Global Dividend Opportunity Fund.
NOT
FDIC INSURED ■ NO BANK GUARANTEE ■ MAY LOSE VALUE
| 2 Wells Fargo Advantage Global Dividend Opportunity Fund | Letter to Shareholders |
Karla M. Rabusch,
President
Wells Fargo Advantage Funds
During the period, investors had to weigh positive earnings from companies against more questionable macroeconomic news.
However, the markets ended the period with a strong rally in September and October that sent most indexes higher than when the period began.
Dear Valued Shareholder,
We are pleased to provide you with this annual report for the Wells Fargo Advantage Global
Dividend Opportunity Fund for the 12-month period that ended October 31, 2010. Leading up to the
beginning of the period, a series of extraordinary financial and economic events affected markets
in the United States and throughout the world. During the period, investors had to weigh positive
earnings from companies against more questionable macroeconomic news. High unemployment in
developed nations and rising sovereign debt in many countries created concerns that economies could
once again slip into recession. However, the markets ended the period with a strong rally in
September and October that sent most indexes higher than when the period began.
Concerns shifted from corporate to sovereign debt.
After hitting their lows in March 2009 due to the continued effects of the financial crisis, stock
markets around the world staged a recovery. In the fourth quarter of 2009, however, developments in
the sovereign debt sector threatened to bring the rally to a halt, as the credit crisis spread from
financial institutions to countries. In the United States and parts of Europe and Asia, governments
were able to bail out companies that overextended themselves, providing a necessary backstop that
staved off default and, even worse, financial collapse. A few countries, however, found themselves
overextended, and questions surfaced regarding their solvency. The government of Dubai was rescued
by a $10 billion infusion from Abu Dhabi, while speculation attended every bond offering from
Greece, Ireland, Spain, and even Great Britain showed signs of financial stress, with investors
concerned about whether those countries would be able to repay their debts. Beyond solvency, the
question was about what effects this sovereign debt overhang would have on future growth, given
that economic recovery in many parts of the world was strongly dependent on continued government
backing. While the overall amount of potentially affected debt was small, it does show that
investors were becoming concerned about the potential shortfall between government spending and tax
receipts.
After a setback in January, the market recovery resumed, only to falter again in April.
In spite of the sovereign debt troubles, the markets still continued the general upward swing that
began with the rally in March 2009. That rally was partially spurred on by the promise of continued
government support of world economies in a time of crisis. With the crisis largely over by the end
of 2009, the question became about whether or not economies could achieve a sustainable growth rate
in the absence of government stimulus. This question was made all the more tangible by China’s
withdrawal of several stimulus measures in the first quarter of 2010, especially in its automobile
and housing markets. The markets reacted negatively to the prospect of China tightening up on its
potentially overheating economy. Combined with the sovereign debt problems and weakened currencies,
especially the euro, stock markets fell throughout January, with the MSCI EAFE® Index1
down more than 8% by the first week of February 2010.
| 1. | The Morgan Stanley Capital International Europe, Australasia, and Far East (“MSCI EAFE”) Index is an unmanaged group of securities widely regarded by investors to be representations of the stock markets of Europe, Australasia, and the Far East. You cannot invest directly in an index. |
| Letter to Shareholders | Wells Fargo Advantage Global Dividend Opportunity Fund 3 |
In what would become a pattern, growing optimism at the corporate level was repeatedly
displaced by unease over the macroeconomic picture. Investors became more optimistic on
expectations of corporate earnings growth and improving economic indicators. Increased merger and
acquisition activity, as well as the recovery of financing for complex deals, also spoke to a
growing optimism at the corporate level. Countering the more positive, company-specific news,
unemployment remained high in the United States and in European countries, and sovereign debt
problems escalated in the spring of 2010. Because of the heightened focus on fiscal deficits, many
eurozone countries announced austerity programs to begin to address their long-term issues.
However, the immediate effect eroded economic growth expectations, causing investors to price in a
probability of a “double-dip” recession and leading to a market correction in the second quarter of
2010. Sovereign debt markets finally stabilized in May 2010 after long and difficult negotiations
between the International Monetary Fund (IMF) and the healthy central banks within the eurozone led
to a $1 trillion backstop fund for Greece and the region.
The equity markets rallied to close the period.
After a volatile summer, the markets broke out of a narrow trading range in September and finished
the 12-month period on a strong note. In effect, the worst-case scenario of a double-dip recession
failed to happen, as corporate earnings reports continued to show strength and the global economy
maintained a modest growth rate. It seemed investors became resigned to a prolonged period of slow
growth, and many regained a risk appetite for equities. The September rally brought most indexes
into positive territory for the 12 months, but there were notable differences between countries.
The Russell 3000® Index, a broad index of U.S.-based companies, returned 18.3% for the period,
compared with the Europe-and Asia-oriented MSCI EAFE Index, which returned only 8.4%. Leading the
way were the emerging markets, as has often been the case since the financial crisis began in 2008.
The MSCI EM (Emerging Markets) Index2 returned 23.6% during the period. Generally
speaking, smaller countries that had less exposure to the United States and other developed nations
performed better than those, such as China, that were more closely tied to the global economic
infrastructure.
Economies will likely continue to grow, with clear differences between developed nations and the
faster-growing emerging markets.
The market recovery was welcome news, but questions remain about whether the recovery will continue
if unemployment remains high and if governments withdraw their fiscal and monetary stimulus
programs. Unemployment is still stubbornly high in the United States and the euro area, at 9.6% and
10.1%, respectively, putting burdens on consumers and governments. The slower growth rate of
developed nations, meanwhile, may make it difficult to establish solid employment gains.
Additionally, some economies—especially the more overheated Asian economies of China and
India—are showing signs of increasing inflation. China has already signaled that government
stimulus programs supporting its economy will need to be withdrawn or at least scaled back, which
will be a test of whether the recovery has reached a sustainable footing.
| 2. | The Morgan Stanley Capital International Emerging Markets (MSCI Emerging Markets) Index is a free float-adjusted market capitalization index designed to measure the equity market performance in the global emerging markets. The index is currently comprised of 25 emerging market country indices. You cannot invest directly in an index. |
After a volatile summer, the markets broke out of a narrow trading range in September and
finished the 12-month period on a strong note. In effect, the worst-case scenario of a double-dip
recession failed to happen, as corporate earnings reports continued to show strength and the global
economy maintained a modest growth rate.
| 4 Wells Fargo Advantage Global Dividend Opportunity Fund | Letter to Shareholders |
By the end of the reporting period, the consensus shifted from
expectations of a double-dip recession to resignation that several
of the major world economies are likely in for a prolonged period
of slow growth. The IMF projected that advanced economies will grow
only 2.2% in 2011, due to tight fiscal constraints and high
unemployment. Emerging markets, by contrast, are expected to grow at
a more robust rate of 7.1% in 2011. All in all, investors should be
prepared for more subdued economic growth, given the headwinds
faced by many countries and consumers. Balancing that, many
companies are holding up well, with solid earnings that we feel can
support their valuations.
Individual security selection is key to maximizing value and driving performance.
As always, the management team of the Wells Fargo Advantage Global
Dividend Opportunity Fund remains focused on the pursuit of a high
level of current income and moderate capital growth for investors.
Since European equity dividend distributions are seasonal, with
many dividends paid on an annual basis during the second quarter,
the Fund typically generates a substantial portion of its annual
income during the second quarter of each calendar year through our
European stock positions. However, substantial weakness in the euro
and in European equities due to concerns over potential sovereign
debt defaults made this approach challenging during 2010.
Fortunately, the Fund was able to generate income in a short period
of time in domestic equities in July. As we approached fiscal
year-end, the Fund was about equally invested in foreign, mostly
European, equities and in domestic preferred stocks and some U.S.
common stocks.
Looking ahead to 2011, it appears that the potential increase in
U.S. dividend tax rates is leading to an uptick in special
dividends as overcapitalized corporations move to pay excess cash
out to shareholders before the tax rate increases. As a result, we
think that we may be able to increase the amount of income
generated by our domestic equities to complement the income
typically provided by our European equities during the second
quarter of each year.
Don’t let short-term volatility derail long-term investment goals.
The period saw renewed volatility and a correction across the
global financial markets. However, we believe that the significant
rebound experienced over the past 18 months underscores the
importance of maintaining a focus on long-term investment goals
through periods of volatility so investors don’t miss potential
periods of strong recovery.
Thank you for choosing Wells Fargo Advantage Funds. We appreciate
your confidence in us. Through each market cycle, we are committed
to helping you meet your financial needs. Please visit us at
wellsfargo.com/advantagefunds for more information about
our funds and other investment products available to you. Thank you
for your continued support of Wells Fargo Advantage Funds.
Sincerely,
Karla M. Rabusch
President
Wells Fargo Advantage Funds
President
Wells Fargo Advantage Funds
| Portfolio of Investments—October 31, 2010 | Wells Fargo Advantage Global Dividend Opportunity Fund 5 |
| Shares | Security Name | Value | ||||||
| Common Stocks: 66.66% | ||||||||
| Australia: 2.19% | ||||||||
| 500,000 | Westpac Banking Corporation (Financials, Commercial Banks) |
$ | 11,117,892 | |||||
| Brazil: 0.14% | ||||||||
| 25,000 | Vivo Participacoes SA ADR (Telecommunication Services, Wireless Telecommunication Services) |
716,000 | ||||||
| Finland: 2.65% | ||||||||
| 475,004 | Fortum Oyj (Utilities, Electric Utilities) |
13,466,823 | ||||||
| France: 8.90% | ||||||||
| 225,000 | Bouygues SA (Industrials, Construction & Engineering) |
9,916,054 | ||||||
| 1,280,000 | France Telecom SA (Telecommunication Services, Diversified Telecommunication Services) |
30,757,668 | ||||||
| 230,000 | Suez Environnement SA (Utilities, Multi-Utilities) |
4,496,001 | ||||||
| 45,169,723 | ||||||||
| Germany: 2.95% | ||||||||
| 706,274 | Deutsche Post AG (Industrials, Air Freight & Logistics) |
13,172,096 | ||||||
| 25,000 | RWE AG (Utilities, Multi-Utilities) |
1,791,943 | ||||||
| 14,964,039 | ||||||||
| Italy: 18.66% | ||||||||
| 5,450,000 | Enel SpA (Utilities, Electric Utilities) |
31,118,736 | ||||||
| 1,000,000 | ENI SpA (Energy, Oil, Gas & Consumable Fuels) |
22,533,243 | ||||||
| 5,975,000 | Hera SpA (Utilities, Multi-Utilities) |
12,640,328 | ||||||
| 2,500,000 | Mediaset SpA (Consumer Discretionary, Media) |
18,441,351 | ||||||
| 2,175,000 | TERNA SpA (Utilities, Electric Utilities) |
10,035,052 | ||||||
| 94,768,710 | ||||||||
| Spain: 3.01% | ||||||||
| 500,000 | Iberdrola SA (Utilities, Electric Utilities) |
4,217,154 | ||||||
| 220,000 | Red Electrica de Espana (Utilities, Electric Utilities) |
11,052,145 | ||||||
| 15,269,299 | ||||||||
| Sweden: 4.77% | ||||||||
| 1,099,986 | Tele2 AB Series B (Telecommunication Services, Diversified Telecommunication Services) |
24,207,547 | ||||||
| United Kingdom: 5.24% | ||||||||
| 250,000 | National Grid plc (Utilities, Multi-Utilities) |
2,363,468 | ||||||
| 300,000 | Pennon Group plc (Utilities, Water Utilities) |
2,994,794 | ||||||
| 190,000 | Scottish & Southern Energy plc (Utilities, Electric Utilities) |
3,510,270 | ||||||
| 500,000 | Severn Trent plc (Utilities, Water Utilities) |
11,176,398 | ||||||
| 390,223 | United Utilities Group plc (Utilities, Multi-Utilities) |
3,820,425 | ||||||
| 100,000 | Vodafone Group plc ADR (Telecommunication Services, Wireless Telecommunication Services) |
2,767,040 | ||||||
| 26,632,395 | ||||||||
| United States: 18.15% | ||||||||
| 131,000 | Ameresco Incorporated Class A (Industrials, Building Products) |
1,718,720 | ||||||
| 100,000 | American Water Works Company Incorporated (Utilities, Water Utilities) |
2,388,000 | ||||||
| 200,000 | CenterPoint Energy Incorporated (Utilities, Multi-Utilities) |
3,312,000 | ||||||
| 500,000 | Chatham Lodging Trust (Financials, REITs)† |
9,220,000 | ||||||
| 100,000 | Colony Financial Incorporated (Financials, REITs) |
1,896,000 | ||||||
| 250,000 | Comcast Corporation Class A (Consumer Discretionary, Media)(p) |
5,145,000 | ||||||
| 50,000 | Constellation Energy Group Incorporated (Utilities, Independent Power Producers & Energy Traders) |
1,512,000 | ||||||
| 25,000 | Convergys Corporation (Information Technology, IT Services) |
283,000 | ||||||
| 6 Wells Fargo Advantage Global Dividend Opportunity Fund | Portfolio of Investments—October 31, 2010 |
| Shares | Security Name | Value | ||||||
| United States (continued) | ||||||||
| 66,400 | EQT Corporation (Energy, Oil, Gas & Consumable Fuels) |
$ | 2,486,016 | |||||
| 1,275,000 | Excel Trust Incorporated (Financials, REITs) |
14,624,250 | ||||||
| 25,000 | FirstEnergy Corporation (Utilities, Electric Utilities)(p) |
908,000 | ||||||
| 125,000 | Hawaiian Electric Industries Incorporated (Utilities, Electric Utilities) |
2,817,500 | ||||||
| 65,000 | Hicks Acquisition Company Incorporated (Financials, Consumer Finance) |
652,600 | ||||||
| 200,000 | Invesco Mortgage Capital (Financials, REITs) |
4,318,000 | ||||||
| 150,000 | Kayne Anderson MLP Investment Company (Energy, Oil, Gas & Consumable Fuels) |
3,975,000 | ||||||
| 70,000 | Middlesex Water Company (Utilities, Water Utilities) |
1,250,200 | ||||||
| 100,000 | National Fuel Gas Company (Utilities, Gas Utilities) |
5,518,000 | ||||||
| 75,000 | NII Holdings Incorporated (Telecommunication Services, Wireless Telecommunication Services) |
3,116,033 | ||||||
| 340,000 | Niska Gas Storage Partners LLC (Energy, Oil, Gas & Consumable Fuels) |
6,779,600 | ||||||
| 300,000 | NV Energy Incorporated (Utilities, Electric Utilities) |
4,098,000 | ||||||
| 40,000 | Pennichuck Corporation (Utilities, Water Utilities)(i) |
960,800 | ||||||
| 55,000 | PG&E Corporation (Utilities, Multi-Utilities) |
2,630,100 | ||||||
| 50,000 | SCANA Corporation (Utilities, Multi-Utilities)(p) |
2,042,000 | ||||||
| 299,999 | Shenandoah Telecommunications Company (Telecommunication Services,
Wireless Telecommunication Services)(i) |
5,474,982 | ||||||
| 250,000 | Starwood Property Trust Incorporated (Financials, REITs) |
5,052,500 | ||||||
| 92,178,301 | ||||||||
| Total Common Stocks (Cost $309,720,313) | 338,490,729 | |||||||
| Principal | Interest Rate | Maturity Date | ||||||||||||||
| Corporate Bonds & Notes: 1.19% | ||||||||||||||||
| United States: 1.19% | ||||||||||||||||
| $ | 100,000 | Ares Capital Corporation (Financials, Capital Markets) |
7.75 | % | 10/15/2040 | 2,530,000 | ||||||||||
| 4,000,000 | Regions Financing Trust II (Financials, Consumer Finance) |
6.63 | 5/15/2047 | 3,494,852 | ||||||||||||
| Total Corporate Bonds & Notes (Cost $6,004,514) | 6,024,852 | |||||||||||||||
| Shares | Yield | |||||||||||||||
| Preferred Stocks: 28.02% | ||||||||||||||||
| Canada: 0.29% | ||||||||||||||||
| 59,058 | Nexen Incorporated (Energy, Oil, Gas & Consumable Fuels) |
7.35 | 1,485,899 | |||||||||||||
| Germany: 0.63% | ||||||||||||||||
| 120,000 | Allianz SE (Financials, Insurance) |
8.38 | 3,213,756 | |||||||||||||
| United Kingdom: 0.96% | ||||||||||||||||
| 100,000 | Barclays Bank plc (Financials, Commercial Banks) |
7.10 | 2,493,000 | |||||||||||||
| 90,000 | Lloyds Banking Group plc (Financials, Commercial Banks) |
7.75 | 2,362,500 | |||||||||||||
| 4,855,500 | ||||||||||||||||
| United States: 26.14% | ||||||||||||||||
| 20,000 | ATP Oil & Gas Corporation (Energy, Oil, Gas & Consumable Fuels) |
8.00 | 1,546,486 | |||||||||||||
| 50,000 | Bank of America Corporation (Financials, Diversified Financial Services) |
8.63 | 1,285,000 | |||||||||||||
| 200,000 | Bank of America Corporation Series 5 (Financials, Diversified Financial
Services) |
6.37 | 3,584,000 | |||||||||||||
| 140,000 | BB&T Capital Trust VII (Financials, Commercial Banks) |
8.10 | 3,757,600 | |||||||||||||
| 66,124 | Connecticut Light & Power Company Series 1963 (Utilities, Electric
Utilities) |
4.50 | 2,518,914 | |||||||||||||
| 53,850 | Consolidated Edison Incorporated Series A (Utilities, Electric Utilities) |
5.00 | 4,994,588 | |||||||||||||
| 30,214 | Constellation Energy Group Incorporated Series A (Utilities, Independent
Power Producers & Energy Traders) |
8.63 | 797,650 | |||||||||||||
| 5,120 | Dayton Power & Light Company Series B (Utilities, Electric Utilities) |
3.75 | 376,197 | |||||||||||||
| 9,416 | Dayton Power & Light Company Series C (Utilities, Electric Utilities) |
3.75 | 650,881 | |||||||||||||
| Portfolio of Investments—October 31, 2010 | Wells Fargo Advantage Global Dividend Opportunity Fund 7 |
| Shares | Security Name | Yield | Value | |||||||||||||
| United States (continued) | ||||||||||||||||
| 17,500 | Dayton Power & Light Company Series C (Utilities, Electric Utilities) |
3.90 | % | $ | 1,235,938 | |||||||||||
| 125,648 | Delphi Financial Group (Financials, Diversified Financial Services) |
7.38 | 2,907,495 | |||||||||||||
| 105,000 | Duquesne Light Company (Utilities, Electric Utilities) |
6.50 | 5,224,484 | |||||||||||||
| 22,210 | E.I. DuPont de Nemours & Company (Materials, Chemicals) |
4.50 | 2,076,635 | |||||||||||||
| 4,000 | El Paso Corporation (Energy, Oil, Gas & Consumable Fuels)†† |
4.99 | 4,725,000 | |||||||||||||
| 7,565 | Entergy Arkansas Incorporated (Utilities, Electric Utilities) |
4.32 | 623,873 | |||||||||||||
| 2,732 | Entergy Arkansas Incorporated (Utilities, Electric Utilities) |
4.56 | 208,950 | |||||||||||||
| 25,000 | Entergy Arkansas Incorporated (Utilities, Electric Utilities) |
5.75 | 621,250 | |||||||||||||
| 8,444 | Entergy Arkansas Incorporated (Utilities, Electric Utilities) |
6.08 | 781,436 | |||||||||||||
| 400,000 | Entergy Arkansas Incorporated (Utilities, Electric Utilities) |
6.45 | 9,750,000 | |||||||||||||
| 13,578 | Entergy Arkansas Incorporated Series 1965 (Utilities, Electric Utilities) |
4.56 | 1,077,330 | |||||||||||||
| 200,000 | Entergy Louisiana LLC (Utilities, Electric Utilities) |
6.95 | 19,575,000 | |||||||||||||
| 3,248 | Entergy Mississippi Incorporated (Utilities, Electric Utilities) |
4.36 | 249,081 | |||||||||||||
| 10,679 | Entergy Mississippi Incorporated (Utilities, Electric Utilities) |
4.92 | 972,436 | |||||||||||||
| 11,893 | Entergy New Orleans Incorporated (Utilities, Electric Utilities) |
5.56 | 1,128,641 | |||||||||||||
| 89,600 | Fifth Third Capital Trust VII (Financials, Commercial Banks) |
8.88 | 2,352,896 | |||||||||||||
| 9,000 | Florida Power Company (Utilities, Electric Utilities)(a) |
4.58 | 749,700 | |||||||||||||
| 12,500 | FPC Capital Trust I Series A (Utilities, Multi-Utilities) |
7.10 | 320,000 | |||||||||||||
| 25,900 | Gulf Power Company (Utilities, Multi-Utilities) |
6.00 | 2,538,459 | |||||||||||||
| 46,090 | Hawaiian Electric Company (Utilities, Electric Utilities) |
4.75 | 747,524 | |||||||||||||
| 40,000 | Hawaiian Electric Company (Utilities, Electric Utilities) |
5.25 | 652,000 | |||||||||||||
| 40,000 | Heller Financial Incorporated (Financials, Diversified Financial Services) |
6.69 | 3,885,000 | |||||||||||||
| 9,000 | Heller Financial Incorporated (Financials, Diversified Financial Services) |
6.95 | 889,032 | |||||||||||||
| 45,100 | Interstate Power & Light Company (Utilities, Electric Utilities) |
8.38 | 1,310,155 | |||||||||||||
| 172,100 | Metlife Incorporated (Financials, Insurance) |
6.50 | 4,302,500 | |||||||||||||
| 1,900 | New York State Electric & Gas Corporation (Utilities, Electric Utilities) |
3.75 | 133,900 | |||||||||||||
| 19,840 | Pacific Enterprises Incorporated (Utilities, Gas Utilities) |
4.40 | 1,678,341 | |||||||||||||
| 130,000 | Pacific Gas & Electric Company (Utilities, Electric Utilities) |
4.80 | 2,853,500 | |||||||||||||
| 126,000 | Pacific Gas & Electric Company Series D (Utilities, Electric Utilities) |
5.00 | 2,885,400 | |||||||||||||
| 39,900 | Pacific Gas & Electric Company Series I (Utilities, Electric Utilities) |
4.36 | 826,329 | |||||||||||||
| 250,000 | PNC Capital Trust E (Financials, Commercial Banks) |
7.75 | 6,642,500 | |||||||||||||
| 100,000 | Protective Life Corporation (Financials, Insurance) |
8.00 | 2,250,000 | |||||||||||||
| 80,000 | Red Lion Hotels Capital Trust (Consumer Discretionary,
Hotels, Restaurants & Leisure) |
9.50 | 2,065,600 | |||||||||||||
| 30,000 | Royal Bank of Scotland Group plc ADR (Financials, Commercial Banks) |
5.75 | 571,500 | |||||||||||||
| 12,000 | SCANA Corporation Series A (Utilities, Multi-Utilities) |
7.70 | 340,080 | |||||||||||||
| 85,000 | Southern
California Edison Company Series D (Utilities, Electric Utilities) |
4.32 | 1,708,500 | |||||||||||||
| 65,000 | SunTrust Capital IX (Financials, Commercial Banks) |
7.88 | 1,677,000 | |||||||||||||
| 14,600 | Union Electric Company (Utilities, Electric Utilities) |
4.50 | 1,105,625 | |||||||||||||
| 1,300 | Union Electric Company Series 1969 (Utilities, Electric Utilities) |
4.00 | 90,577 | |||||||||||||
| 120,000 | Vornado Realty LP (Financials, REITs) |
7.88 | 3,225,600 | |||||||||||||
| 6,023 | Wisconsin Power & Light Company (Utilities, Electric Utilities) |
4.76 | 541,167 | |||||||||||||
| 13,341 | Wisconsin Power & Light Company (Utilities, Electric Utilities) |
4.80 | 1,207,361 | |||||||||||||
| 1,748 | Xcel Energy Incorporated (Utilities, Multi-Utilities) |
3.60 | 122,273 | |||||||||||||
| 52,320 | Xcel Energy Incorporated (Utilities, Multi-Utilities) |
4.10 | 3,937,080 | |||||||||||||
| 30,030 | Xcel Energy Incorporated (Utilities, Multi-Utilities) |
4.16 | 2,597,595 | |||||||||||||
| 19,880 | Xcel Energy Incorporated (Utilities, Multi-Utilities) |
4.56 | 1,758,386 | |||||||||||||
| 240,000 | Zions Bancorp (Financials, Commercial Banks) |
9.50 | 6,096,000 | |||||||||||||
| 132,730,445 | ||||||||||||||||
| Total Preferred Stocks (Cost $130,556,513) | 142,285,600 | |||||||||||||||
| Investment Companies: 0.84% | ||||||||||||||||
| United States: 0.84% | ||||||||||||||||
| 175,000 | Tortoise Energy Capital Corporation |
4,275,250 | ||||||||||||||
| Total Investment Companies (Cost $4,375,000) | 4,275,250 | |||||||||||||||
| 8 Wells Fargo Advantage Global Dividend Opportunity Fund | Portfolio of Investments—October 31, 2010 |
| Shares | Security Name | Yield | Value | |||||||||||||||||
| Short-Term Investments: 5.43% | ||||||||||||||||||||
| Investment Companies: 5.43% | ||||||||||||||||||||
| 27,574,502 | Wells Fargo Advantage Money Market Trust(l)(u) |
0.19 | % | $ | 27,574,502 | |||||||||||||||
| Total Short-Term Investments (Cost $27,574,502) | 27,574,502 | |||||||||||||||||||
| Total Investments in Securities (Cost $478,230,842)* |
102.14 | % | 518,650,933 | |||||||||||||||||
| Other Assets and Liabilities, Net | (2.14 | ) | (10,885,781 | ) | ||||||||||||||||
| Total Net Assets | 100.00 | % | $ | 507,765,152 | ||||||||||||||||
| † | Non-income earning securities. | |
| (p) | All or a portion of this security is pledged as collateral for written options. | |
| †† | Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended. | |
| (a) | Security is fair valued by the Management Valuation Team, and in certain instances by the Board of Trustees, in accordance with procedures approved by the Board of Trustees. | |
| (i) | Illiquid security for which the designation as illiquid is unaudited. | |
| (l) | Investment in an affiliate. | |
| (u) | Rate shown is the 7-day annualized yield at period end. | |
| * | Cost for federal income tax purposes is $483,942,580 and net unrealized appreciation (depreciation) consists of: |
Gross unrealized appreciation |
$ | 51,338,144 | ||
Gross unrealized depreciation |
(16,629,791 | ) | ||
Net unrealized appreciation |
$ | 34,708,353 | ||
The following table shows the percent of total long-term investments by geographic location as of
October 31, 2010:
United States |
48.0 | % | ||
Italy |
19.3 | % | ||
France |
9.2 | % | ||
United Kingdom |
6.4 | % | ||
Sweden |
4.9 | % | ||
Germany |
3.7 | % | ||
Spain |
3.1 | % | ||
Finland |
2.7 | % | ||
Australia |
2.3 | % | ||
Canada |
0.3 | % | ||
Brazil |
0.1 | % | ||
| 100.0 | % | |||
The following table shows the percent of total long-term investments by industry as of October 31,
2010:
Electric Utilities |
29.7 | % | ||
Diversified Telecommunication Services |
11.2 | % | ||
Multi-Utilities |
9.1 | % | ||
Oil, Gas & Consumable Fuels |
8.9 | % | ||
Real Estate Investment Trusts (REITs) |
7.8 | % | ||
Commercial Banks |
7.5 | % | ||
Media |
4.8 | % | ||
Water Utilities |
3.8 | % | ||
Air Freight & Logistics |
2.7 | % | ||
Diversified Financial Services |
2.6 | % | ||
Wireless Telecommunication Services |
2.5 | % | ||
Construction & Engineering |
2.0 | % | ||
Insurance |
2.0 | % | ||
Gas Utilities |
1.5 | % | ||
Investment Companies |
0.9 | % | ||
Consumer Finance |
0.8 | % | ||
Capital Markets |
0.5 | % | ||
Independent Power Producers & Energy Traders |
0.5 | % | ||
Hotels, Restaurants & Leisure |
0.4 | % | ||
Chemicals |
0.4 | % | ||
Building Products |
0.3 | % | ||
IT Services |
0.1 | % | ||
| 100.0 | % |
The accompanying notes are an integral part of these financial statements.
| Statement of Assets and Liabilities—October 31, 2010 | Wells Fargo Advantage Global Dividend Opportunity Fund 9 |
Assets |
||||
Investments |
||||
In unaffiliated securities, at value |
$ | 491,076,431 | ||
In affiliated securities, at value |
27,574,502 | |||
Total investments, at value (see cost below) |
518,650,933 | |||
Foreign currency, at value (see cost below) |
1,504,824 | |||
Segregated cash |
6,777,281 | |||
Receivable for securities sold |
20,917,689 | |||
Receivable for dividends and interest |
2,941,499 | |||
Prepaid expenses and other assets |
101,769 | |||
Total assets |
550,893,995 | |||
Liabilities |
||||
Payable for investments purchased |
40,757,264 | |||
Written options, at value (premiums received $1,404,145) |
1,659,757 | |||
Investment advisory fee payable |
428,407 | |||
Due to other related parties |
22,548 | |||
Accrued expenses and other liabilities |
260,867 | |||
Total liabilities |
43,128,843 | |||
Total net assets |
$ | 507,765,152 | ||
NET ASSETS CONSIST OF |
||||
Paid-in capital |
$ | 877,048,782 | ||
Overdistributed net investment income |
(494 | ) | ||
Accumulated net realized losses on investments |
(409,490,316 | ) | ||
Net unrealized gains on investments |
40,207,180 | |||
Total net assets |
$ | 507,765,152 | ||
NET ASSET VALUE PER SHARE |
||||
Based on $507,765,152 divided by 49,007,941 shares issued and outstanding
(unlimited shares authorized) |
$ | 10.36 | ||
Total investments, at cost |
$ | 478,230,842 | ||
Foreign currency, at cost |
$ | 1,416,954 |
The accompanying notes are an integral part of these financial statements.
| 10 Wells Fargo Advantage Global Dividend Opportunity Fund | Statement of Operations—For the Year Ended October 31, 2010 |
Investment income |
||||
Dividends* |
$ | 53,826,380 | ||
Interest |
46,255 | |||
Income from affiliated securities |
112,433 | |||
Total investment income |
53,985,068 | |||
Expenses |
||||
Investment advisory fee |
4,729,876 | |||
Administration fees |
248,941 | |||
Custody and accounting fees |
241,438 | |||
Transfer agent fees |
36,076 | |||
Professional fees |
112,501 | |||
Shareholder report expenses |
124,835 | |||
Trustees’ fees and expenses |
33,171 | |||
Dividends on securities sold short |
45,000 | |||
Other fees and expenses |
68,703 | |||
Total expenses |
5,640,541 | |||
Net investment income |
48,344,527 | |||
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS |
||||
Net realized gains (losses) on: |
||||
Unaffiliated securities |
(21,918,095 | ) | ||
Affiliated securities |
139,935 | |||
Written options |
5,832,625 | |||
Securities sold short |
(411,598 | ) | ||
Net realized losses on investments |
(16,357,133 | ) | ||
Net change in unrealized gains (losses) on: |
||||
Unaffiliated securities |
23,680,233 | |||
Affiliated securities |
(2,000 | ) | ||
Written options |
(1,907,245 | ) | ||
Securities sold short |
(28,095 | ) | ||
Net change in unrealized gains (losses) on investments |
21,742,893 | |||
Net realized and unrealized gains on investments |
5,385,760 | |||
Net increase in net assets resulting from operations |
$ | 53,730,287 | ||
* Net of foreign withholding taxes of |
$ | 1,646,598 |
The accompanying notes are an integral part of these financial statements.
Statements of Changes in Net Assets
Wells Fargo Advantage Global Dividend Opportunity Fund 11
| Year Ended | Year Ended | |||||||
| October 31, 2010 | October 31, 2009 | |||||||
Operations |
||||||||
Net investment income
|
$ | 48,344,527 | $ | 42,815,642 | ||||
Net realized losses on investments
|
(16,357,133 | ) | (205,482,801 | ) | ||||
Net change in unrealized gains (losses) on investments
|
21,742,893 | 182,551,480 | ||||||
Net increase in net assets resulting from operations
|
53,730,287 | 19,884,321 | ||||||
Distributions to shareholders from |
||||||||
Net investment income
|
(47,916,503 | ) | (38,312,219 | ) | ||||
Tax basis return of capital
|
(6,857,102 | ) | (48,631,603 | ) | ||||
Total distributions to shareholders
|
(54,773,605 | ) | (86,943,822 | ) | ||||
Capital share transactions |
||||||||
Net asset value of shares issued under the Automatic Dividend Reinvestment Plan
|
1,711,131 | 0 | ||||||
Total increase (decrease) in net assets
|
667,813 | (67,059,501 | ) | |||||
Net assets |
||||||||
Beginning of period
|
507,097,339 | 574,156,840 | ||||||
End of period
|
$ | 507,765,152 | $ | 507,097,339 | ||||
Overdistributed net investment income
|
$ | (494 | ) | $ | (2,222 | ) | ||
The accompanying notes are an integral part of these financial statements.
12 Wells Fargo Advantage Global Dividend Opportunity Fund
|
Financial Highlights |
(For a share outstanding throughout each period)
| Year Ended October 31, | ||||||||||||||||
| 2010 | 2009 | 2008 | 20071 | |||||||||||||
Net asset value, beginning of period |
$ | 10.38 | $ | 11.75 | $ | 19.83 | $ | 19.10 | 2 | |||||||
Income from investment operations |
||||||||||||||||
Net investment income |
0.99 | 0.88 | 1.88 | 1.31 | ||||||||||||
Net realized and unrealized gains (losses) on
investments |
0.11 | (0.47 | ) | (7.96 | ) | 0.46 | ||||||||||
Total from investment operations |
1.10 | 0.41 | (6.08 | ) | 1.77 | |||||||||||
Distributions to shareholders from |
||||||||||||||||
Net investment income |
(0.98 | )3 | (0.78 | ) | (2.00 | ) | (1.00 | ) | ||||||||
Tax basis return of capital |
(0.14 | )3 | (1.00 | ) | 0.00 | 0.00 | ||||||||||
Total distributions to shareholders |
(1.12 | ) | (1.78 | ) | (2.00 | ) | (1.00 | ) | ||||||||
Offering costs charged to capital |
0.00 | 0.00 | 0.00 | (0.04 | ) | |||||||||||
Net asset value, end of period |
$ | 10.36 | $ | 10.38 | $ | 11.75 | $ | 19.83 | ||||||||
Market value, end of period |
$ | 10.39 | $ | 9.89 | $ | 10.99 | $ | 17.29 | ||||||||
Total return based on market value4 |
17.35 | % | 8.36 | % | (27.19 | )% | (8.66 | )% | ||||||||
Ratios and supplemental data |
||||||||||||||||
Net assets, end of period (thousands) |
$ | 507,765 | $ | 507,097 | $ | 574,157 | $ | 968,376 | ||||||||
Ratios to average net assets (annualized) |
||||||||||||||||
Gross expenses |
1.14 | % | 1.11 | % | 1.13 | % | 1.22 | % | ||||||||
Net expenses |
1.14 | % | 1.11 | % | 1.13 | % | 1.22 | % | ||||||||
Net investment income |
9.73 | % | 8.48 | % | 11.07 | % | 11.79 | % | ||||||||
Portfolio turnover rate5 |
90 | % | 160 | % | 218 | % | 102 | % | ||||||||
| 1. | For the period from March 28, 2007 (commencement of operations) to October 31, 2007. | |
| 2. | Initial public offering price of $20.00 per share less underwriting discount of $0.90 per share. | |
| 3. | Calculated based on average shares outstanding during the period. | |
| 4. | Total return is calculated assuming a purchase of common stock on the first day and a sale on the last day of the period reported. Dividends and distributions, if any, are assumed for purposes of these calculations to be reinvested at prices obtained under the Fund’s Automatic Dividend Reinvestment Plan. Total return does not reflect brokerage commissions or sales charges. | |
| 5. | Portfolio turnover rates presented for periods of less than one year are not annualized. |
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
|
Wells Fargo Advantage Global Dividend Opportunity Fund 13 |
1. ORGANIZATION
Wells Fargo Advantage Global Dividend Opportunity Fund (the “Fund”) (formerly, Evergreen Global
Dividend Opportunity Fund) was organized as a statutory trust under the laws of the state of
Delaware on December 21, 2006 and is registered as a diversified closed-end management investment
company under the Investment Company Act of 1940, as amended. The primary investment objective of
the Fund is to seek a high level of current income. The Fund’s secondary objective is long-term
growth of capital.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the
preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted
accounting principles which require management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Management has considered the
circumstances under which the Fund should recognize or make disclosures regarding events or
transactions occurring subsequent to the balance sheet date through the date the financial
statements are issued. Adjustments or additional disclosures, if any, have been included in these
financial statements.
Securities valuation
Investments in securities are valued each business day as of the close of regular trading on
the New York Stock Exchange, which is usually 4:00 p.m. (Eastern Time). Securities which are traded
on a national or foreign securities exchange are generally valued at the last reported sales price,
except that securities listed on the Nasdaq Stock Market, Inc. (“Nasdaq”) are valued at the Nasdaq
Official Closing Price (“NOCP”), and if no NOCP is available, then at the last reported sales
price. If no sales price is shown on the Nasdaq, the bid price will be used. In the absence of any
sale of securities listed on the Nasdaq, and in the case of other securities, including U.S.
Government obligations, but excluding debt securities maturing in 60 days or less, the price will
be deemed “stale” and the valuations will be determined in accordance with the Fund’s Fair
Valuation Procedures.
Securities denominated in foreign currencies are translated into U.S. dollars using the closing
rates of exchange in effect on the day of valuation.
Many securities markets and exchanges outside the U.S. close prior to the close of the New York
Stock Exchange and therefore may not fully reflect trading or events that occur after the close of
the principal exchange in which the foreign investments are traded but before the close of the New
York Stock Exchange. If such trading or events are expected to materially affect the value of the
investments, then those investments are fair valued following procedures approved by the Board of
Trustees. These procedures take into account multiple factors including movements in U.S.
securities markets after foreign exchanges close. Depending on market activity, such fair
valuations may be frequent. Such fair value pricing may result in NAVs that are higher or lower
than NAVs based on the closing price or latest quoted bid price.
Certain fixed income securities with maturities exceeding 60 days are valued based on available
market quotations received from an independent pricing service approved by the Fund’s Board of
Trustees which may utilize both transaction data and market information such as yield, prices of
securities of comparable quality, coupon rate, maturity, type of issue, trading characteristics and
other market data. If valuations are not available from the pricing service or values received are
deemed not representative of market value, values will be obtained from a third party broker-dealer
or determined based on the Fund’s Fair Value Procedures.
Debt securities of sufficient credit quality with original maturities of 60 days or less generally
are valued at amortized cost which approximates fair value. The amortized cost method involves
valuing a security at its cost, plus accretion of discount or minus amortization of premium over
the period until maturity.
Investments in open-end mutual funds and non-registered investment companies are generally valued
at net asset value.
14 Wells Fargo Advantage Global Dividend Opportunity Fund
|
Notes to Financial Statements |
Certain investments which are not valued using any of the methods discussed above, are valued
at their fair value, as determined by procedures established in good faith and approved by the
Board of Trustees.
The valuation techniques used by the Fund to measure fair value are consistent with the market
approach, income approach and/or cost approach, where applicable, for each security type.
Foreign currency translation
The accounting records of the Fund are maintained in U.S. dollars. Assets, including investment
securities, and liabilities denominated in foreign currency are translated into U.S. dollars at the
prevailing rates of exchange at the date of valuation. Purchases and sales of securities, and
income and expenses are translated at the prevailing rate of exchange on the respective dates of
such transactions. Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and settlement dates on
securities transactions, and the difference between the amounts of dividends, interest and foreign
withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received.
Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and
liabilities other than investments in securities resulting in changes in exchange rates.
The changes in net assets arising from changes in exchange rates and the changes in net assets
resulting from changes in market prices of securities are not separately presented. Such changes
are recorded with net realized and unrealized gains or losses from investments. Gains and losses
from certain foreign currency transactions are treated as ordinary income for U.S. federal income
tax purposes.
Options
The Fund is subject to equity price risk in the normal course of pursuing its investment
objectives. The Fund may write covered put or call options. When a Fund writes an option, an amount
equal to the premium received is recorded as a liability and is subsequently adjusted to the
current market value of the written option. Premiums received from written options, which expire
unexercised, are recognized as realized gains from investments on the expiration date. The
difference between the premium received and the amount paid on effecting a closing purchase
transaction, including brokerage commissions, is treated as a realized gain or loss. If a call
option is exercised, the premium is added to the proceeds from the sale of the underlying security
in calculating the realized gain or loss on the sale. If a put option is exercised, the premium
reduces the cost of the security purchased. The Fund, as a writer of an option, bears the market
risk of an unfavorable change in the price of the security underlying the written option.
The Fund may also purchase call or put options. The premium is included in the Statement of Assets
and Liabilities as an investment which is subsequently adjusted to the current market value of the
option. Premiums paid for purchased options which expire are recognized as realized losses from
investments on the expiration date. Premiums paid for purchased options which are exercised or
closed are added to the amount paid or offset against the proceeds on the underlying security to
determine the realized gain or loss. The risk of loss associated with purchased options is limited
to the premium paid.
Options traded on an exchange are regulated and terms of the options are standardized. Options
traded over the counter expose the Fund to counterparty risk in the event the counterparty does not
perform. This risk is mitigated by having a master netting arrangement between the Fund and the
counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the
counterparty.
Short sales
The Fund may sell a security it does not own in anticipation of a decline in the market value
of that security (short sale). When the Fund makes a short sale, it must borrow the security sold
short and deliver it to the buyer. The Fund is then obligated to replace the security borrowed by
purchasing the security at the market price at the time of replacement.
The Fund records the proceeds as a liability which is marked-to-market daily based upon quotations
from an independent pricing service or from brokers which use prices provided by market makers and
any change in value is recorded as an unrealized gain or loss. Any interest or dividends accrued on
such borrowed securities during the period of the loan are
Notes to Financial Statements
|
Wells Fargo Advantage Global Dividend Opportunity Fund 15 |
recorded as an expense on the Statement of Operations. To borrow the security, the Fund may be
required to pay a premium, which would decrease the proceeds of the security sold. A gain, limited
to the price at which the Fund sold the security short, or a loss, unlimited in size, will be
recognized upon the closing of a short sale if the market price at the closing is less than or
greater than, respectively, the proceeds originally received. Until the short sale is closed or the
borrowed security is replaced, the Fund maintains a segregated account of cash or liquid
securities, the dollar value of which is at least equal to the market value of the security at the
time of the short sale.
Security transactions and income recognition
Securities transactions are recorded on a trade date basis. Realized gains or losses are
reported on the basis of identified cost of securities delivered.
Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily
based on the effective interest method. To the extent debt obligations are placed on non-accrual
status, any related interest income may be reduced by writing off interest receivables when the
collection of all or a portion of interest has become doubtful based on consistently applied
procedures. If the issuer subsequently resumes interest payments or when the collectability of
interest is reasonably assured, the debt obligation is removed from non accrual status.
Dividend income is recognized on the ex-dividend date, except for certain dividends from foreign
securities, which are recorded as soon as the Fund is informed of the ex-dividend date.
Dividend and interest income from foreign securities is recorded net of foreign taxes withheld
where recovery of such taxes is not assured.
Distributions to shareholders
Distributions to shareholders from net investment income and net realized gains, if any, are
recorded on the ex-dividend date. Such distributions are determined in conformity with income tax
regulations, which may differ from generally accepted accounting principles.
The timing and character of distributions made during the period from net investment income or net
realized gains may differ from their ultimate characterization for federal income tax purposes. To
the extent that these differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment. Temporary differences do not require
reclassifications. At October 31, 2010, as a result of permanent book-to-tax differences, the
following reclassification adjustments were made on the Statement of Assets and Liabilities:
| Accumulated Net | ||||||||||||
| Overdistributed Net | Realized Losses | |||||||||||
| Investment Income | on Investments | Paid-in Capital | ||||||||||
| $ | (426,296 | ) | $ | 431,202 | $ | (4,906 | ) | |||||
Federal and other taxes
The Fund intends to continue to qualify as a regulated investment company by distributing
substantially all of its investment company taxable income and any net realized capital gains
(after reduction for capital loss carryforwards) sufficient to relieve it from all, or
substantially all, federal income taxes. Accordingly, no provision for federal income taxes was
required.
The Fund’s income and federal excise tax returns and all financial records supporting those returns
for the prior three fiscal years are subject to examination by the federal and Delaware revenue
authorities.
At October 31, 2010, estimated net capital loss carryforwards, which are available to offset future
net realized capital gains, were as follows:
| Expiration | ||||||||||||||||
| 2015 | 2016 | 2017 | 2018 | |||||||||||||
| $ | 9,081,249 | $ | 184,503,126 | $ | 193,644,982 | $ | 17,121,810 | |||||||||
16 Wells Fargo Advantage Global Dividend Opportunity Fund
|
Notes to Financial Statements |
3. FAIR VALUATION MEASUREMENTS
Fair value measurements of investments are determined within a framework that has established
a fair value hierarchy based upon the various data inputs utilized in determining the value of the
Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted
prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to
unobservable inputs (Level 3). The Fund’s investments are classified within the fair value
hierarchy based on the lowest level of input that is significant to the fair value measurement. The
inputs are summarized into three broad levels as follows:
| ▪ | Level 1 – quoted prices in active markets for identical securities | |
| ▪ | Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | |
| ▪ | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
The inputs or methodologies used for valuing securities are not necessarily an indication of the
risk associated with investing in those securities.
As of October 31, 2010, the inputs used in valuing the Fund’s assets, which are carried at fair
value, were as follows:
| Significant Other | Significant | |||||||||||||||
| Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||||||||||
| Investments in Securities | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Equity securities |
||||||||||||||||
Common stocks |
$ | 338,490,729 | * | $ | 0 | $ | 0 | $ | 338,490,729 | |||||||
Preferred stocks |
75,210,418 | 66,325,482 | 749,700 | 142,285,600 | ||||||||||||
Investment companies |
4,275,250 | 0 | 0 | 4,275,250 | ||||||||||||
Corporate bonds & notes |
0 | 6,024,852 | 0 | 6,024,852 | ||||||||||||
Short-term investments |
||||||||||||||||
Investment companies |
27,574,502 | 0 | 0 | 27,574,502 | ||||||||||||
| $ | 445,550,899 | $ | 72,350,334 | $ | 749,700 | $ | 518,650,933 | |||||||||
| * | Transfers in and transfers out are recognized at the end of the reporting period. Foreign securities valued in the amount of $230,140,431 was transferred out of Level 2 and into Level 1 since adjustments to prices of foreign securities due to movements against a specified benchmark were not necessary at October 31, 2010. |
Further details on the major security types listed above can be found in the Fund’s Portfolio
of Investments.
As of October 31, 2010, the inputs used in valuing the Fund’s other financial instruments, which
are carried at fair value, were as follows:
| Significant Other | Significant | |||||||||||||||
| Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||||||||||
| Other financial instruments | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Written options |
$ | 0 | $ | (1,659,757 | ) | $ | 0 | $ | (1,659,757 | ) | ||||||
The following is a reconciliation of investments in which significant unobservable inputs
(Level 3) were used in determining value:
| Preferred | Written | |||||||
| stocks | Options | |||||||
Balance as of October 31, 2009 |
$ | 701,424 | $ | (49,648 | ) | |||
Realized gains or losses |
(45,867 | ) | 186,115 | |||||
Change in unrealized gains or losses |
125,627 | (136,467 | ) | |||||
Net purchases (sales) |
(31,484 | ) | 0 | |||||
Transfers in and/or out of Level 3 |
0 | 0 | ||||||
Balance as of October 31, 2010 |
$ | 749,700 | $ | 0 | ||||
Change in unrealized gains or losses included in earnings relating to securities still held at October 31, 2010 |
$ | 0 | $ | 0 | ||||
Notes to Financial Statements
|
Wells Fargo Advantage Global Dividend Opportunity Fund 17 |
4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES
Investment advisory fees
Wells Fargo Funds Management, LLC (“Funds Management”), an indirect wholly owned subsidiary of
Wells Fargo & Company (“Wells Fargo”), is the investment adviser to the Fund and is paid a fee at
an annual rate of 0.95% of the Fund’s average daily total assets. Total assets consist of the net
assets of the Fund plus borrowings, reverse repurchase agreements, dollar rolls or the issuance of
debt securities. Prior to July 12, 2010, Evergreen Investment Management Company, LLC (“EIMC”), an
affiliate of Funds Management, was the investment adviser to the Fund and was paid an annual fee at
the same rate that is currently paid to Funds Management.
Funds Management may retain the services of certain investment sub-advisers to provide daily
portfolio management. The fees related to investment sub-advisory services are borne directly by
the investment adviser and do not increase the overall fees paid by the Fund to the investment
adviser. Effective July 12, 2010, Wells Capital Management Incorporated, an affiliate of Funds
Management and indirect wholly owned subsidiary of Wells Fargo, became an investment sub-adviser to
the Fund and is paid a fee at an annual rate of 0.10% of the Fund’s average daily total assets.
Crow Point Partners, LLC is also an investment sub-adviser to the Fund and is paid a fee at an
annual rate of 0.20% of the Fund’s average daily total assets by the investment adviser for its
services to the Fund.
Administration fees
Funds Management also serves as the administrator to the Fund providing the Fund with
facilities, equipment and personnel. Funds Management is paid an annual administrative fee of 0.05%
of the Fund’s average daily total assets. Prior to August 25, 2010, EIMC was the administrator to
the Fund and was paid an annual fee at the same rate that is currently paid to Funds Management.
5. CAPITAL SHARE TRANSACTIONS
The Fund has authorized an unlimited number of shares with no par value. For the year ended
October 31, 2010, the Fund issued 163,097 shares. For the year ended October 31, 2009, the Fund did
not issue any new shares.
6. INVESTMENT PORTFOLIO TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (excluding short-term
securities) were $426,565,513 and $457,778,230, respectively, for the year ended October 31, 2010.
Due to the timing of closing short sale transactions, as of October 31, 2010, the Fund held
segregated cash in the amount of $6,497,281.
7. DERIVATIVE TRANSACTIONS
During the year ended October 31, 2010, the Fund entered into written options contracts for
hedging purposes, in order to reduce market exposure.
During the year ended October 31, 2010, the Fund had written option contract activities as follows:
| Number of | Premiums | |||||||
| Contracts | Received | |||||||
Options outstanding at October 31, 2009 |
6,493 | $ | 1,836,862 | |||||
Options written |
103,082 | 13,804,148 | ||||||
Options expired |
(74,594 | ) | (10,960,446 | ) | ||||
Options terminated in closing purchase transactions |
(23,535 | ) | (3,276,419 | ) | ||||
Options outstanding at October 31, 2010 |
11,446 | $ | 1,404,145 | |||||
The Fund had average premiums received on written options in the amount of $982,985 during the
year ended October 31, 2010. As of October 31, 2010, the Fund had segregated $280,000 as cash
collateral for outstanding written options.
18 Wells Fargo Advantage Global Dividend Opportunity Fund
|
Notes to Financial Statements |
Open call options written at October 31, 2010 were as follows:
| Expiration Date | Index | Number of Contracts | Strike Price | Market Value | Premiums Received | |||||||||||||||
11/19/2010 |
Amsterdam Exchange Index | 436 | 359 EUR | $ | 19,503 | $ | 87,597 | |||||||||||||
11/19/2010 |
CAC 40 Index | 389 | 4,016 EUR | 62,504 | 97,730 | |||||||||||||||
11/19/2010 |
Dow Jones Euro Stoxx 50 Index | 524 | 2,990 EUR | 54,822 | 114,673 | |||||||||||||||
11/19/2010 |
IBEX 35 Index | 1,376 | 11,407 EUR | 81,929 | 154,581 | |||||||||||||||
11/19/2010 |
NASDAQ 100 Index | 102 | 2,175 USD | 186,951 | 105,672 | |||||||||||||||
11/19/2010 |
NYSE ARCA Airline Index | 4,637 | 49 USD | 846,670 | 150,703 | |||||||||||||||
11/19/2010 |
OMX Index | 1,255 | 1,152 SEK | 27,095 | 108,250 | |||||||||||||||
11/19/2010 |
PHLX Housing Sector Index | 2,174 | 103 USD | 80,894 | 180,442 | |||||||||||||||
11/19/2010 |
Russell 2000 Index | 297 | 736 USD | 145,996 | 243,611 | |||||||||||||||
11/19/2010 |
S&P 400 Mid Cap Index | 256 | 857 USD | 153,393 | 160,886 | |||||||||||||||
The fair value, realized gains or losses and change in unrealized gains or losses on
derivative instruments are reflected in the appropriate financial statements.
8. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid was as follows:
| Year ended October 31, | ||||||||||
| 2010 | 2009 | |||||||||
Ordinary Income |
47,916,503 | $ | 38,312,219 | |||||||
Return of Capital |
6,857,102 | 48,631,603 | ||||||||
As of October 31, 2010, the components of distributable earnings on a tax basis are shown on
the table below.
| Unrealized | Capital Loss | |||||||
| Gains | Carryforward | |||||||
| $ | 35,068,030 | $ | (404,351,167 | ) | ||||
9. CONCENTRATION RISK
The Fund invests a substantial portion of its assets in the electric utilities industry and,
therefore, may be more affected by changes in that industry than would be a comparable fund whose
investment are not heavily weighted in any industry.
10. INDEMNIFICATION
Under the Fund’s organizational documents, the officers and trustees are indemnified against
certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in
the normal course of business, the Fund may enter into contracts with service providers that
contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements
is dependent on future claims that may be made against the Fund and, therefore, cannot be
estimated.
11. SUBSEQUENT DISTRIBUTION
On November 19, 2010, the Fund declared distributions from net investment income of $0.28 per
share payable on January 3, 2011 to shareholders of record on December 15, 2010. This distribution
is not reflected in the accompanying financial statements.
Report of Independent Registered Public Accounting Firm
|
Wells Fargo Advantage Global Dividend Opportunity Fund 19 |
BOARD OF TRUSTEES AND SHAREHOLDERS
WELLS FARGO ADVANTAGE GLOBAL DIVIDEND OPPORTUNITY FUND:
We have audited the accompanying statement of assets and liabilities, including the portfolio
of investments, of the Wells Fargo Advantage Global Dividend Opportunity Fund (the Fund) as of
October 31, 2010, and the related statement of operations for the year then ended, statements of
changes in net assets for each of the years in the two-year period then ended, and the financial
highlights for the periods presented. These financial statements and financial highlights are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2010 by correspondence with the custodian and brokers, or by
other appropriate auditing procedures where replies from brokers were not received. An audit also
includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly,
in all material respects, the financial position of the Wells Fargo Advantage Global Dividend
Opportunity Fund as of October 31, 2010, the results of its operations for the year then ended,
changes in its net assets for each of the years in the two-year period then ended, and the
financial highlights for the periods presented, in conformity with U.S. generally accepted
accounting principles.
Boston, Massachusetts
December 23, 2010
December 23, 2010
20 Wells Fargo Advantage Global Dividend Opportunity Fund
|
Other Information (Unaudited) |
PROXY VOTING INFORMATION
A description of the policies and procedures that the Fund uses to determine how to vote
proxies relating to portfolio securities is available without charge, upon request, by calling
1-800-222-8222, visiting our Web site at www.wellsfargo.com/advantagefunds, or visiting the SEC Web
site at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is available without charge on the
Fund’s Web site at www.wellsfargo.com/advantagefunds or by visiting the SEC Web site at
www.sec.gov.
SPECIAL MEETING OF SHAREHOLDERS
On July 9, 2010, a Special Meeting of Shareholders was held to consider a number of proposals.
The results of the proposals are indicated below.
Proposal 1 — Election of Trustees:
Net Assets Voted “For” |
Leroy Keith, Jr. | $ | 295,911,405 | |||||
Net Assets Voted “Withheld” |
$ | 9,556,607 | ||||||
Net Assets Voted “For” |
Peter G. Gordon | $ | 295,953,699 | |||||
Net Assets Voted “Withheld” |
$ | 9,514,313 | ||||||
Net Assets Voted “For” |
Isaiah Harris, Jr. | $ | 295,941,302 | |||||
Net Assets Voted “Withheld” |
$ | 9,526,710 | ||||||
Net Assets Voted “For” |
Judith M. Johnson | $ | 296,043,177 | |||||
Net Assets Voted “Withheld” |
$ | 9,424,835 | ||||||
Net Assets Voted “For” |
David F. Larcker | $ | 295,985,008 | |||||
Net Assets Voted “Withheld” |
$ | 9,483,004 | ||||||
Net Assets Voted “For” |
Olivia S. Mitchell | $ | 295,973,659 | |||||
Net Assets Voted “Withheld” |
$ | 9,494,353 | ||||||
Net Assets Voted “For” |
Timothy J. Penny | $ | 295,854,965 | |||||
Net Assets Voted “Withheld” |
$ | 9,613,047 | ||||||
Net Assets Voted “For” |
Michael S. Scofield | $ | 295,925,810 | |||||
Net Assets Voted “Withheld” |
$ | 9,542,202 | ||||||
Net Assets Voted “For” |
Donald C. Willeke | $ | 295,811,192 | |||||
Net Assets Voted “Withheld” |
$ | 9,656,820 | ||||||
Proposal 2a — To approve an investment advisory agreement with Wells Fargo Funds Management, LLC.
Net Assets Voted “For” |
$ | 238,124,342 | ||||||
Net Assets Voted “Against” |
$ | 7,794,825 | ||||||
Net Assets Voted “Abstain” |
$ | 5,137,371 | ||||||
Proposal 2b — To approve a sub-advisory agreement with Crow Point Partners, LLC.
Net Assets Voted “For” |
$ | 235,765,183 | ||||||
Net Assets Voted “Against” |
$ | 9,142,396 | ||||||
Net Assets Voted “Abstain” |
$ | 6,148,959 | ||||||
Proposal 2c — To approve a sub-advisory agreement with Wells Capital Management Incorporated.
Net Assets Voted “For” |
$ | 236,569,143 | ||||||
Net Assets Voted “Against” |
$ | 8,766,953 | ||||||
Net Assets Voted “Abstain” |
$ | 5,720,442 | ||||||
Other Information (Unaudited)
|
Wells Fargo Advantage Global Dividend Opportunity Fund 21 |
FEDERAL TAX DISTRIBUTIONS
For corporate shareholders, 26.16% of ordinary income dividends paid during the fiscal year
ended October 31, 2010 qualified for the dividends received deduction.
With respect to dividends paid from investment company taxable income during the fiscal year ended
October 31, 2010, the Fund designates 52.12% of ordinary income and any short-term capital gain
distributions as Qualified Dividend Income in accordance with the Internal Revenue Code. Complete
2010 year-end tax information will be reported on your 2010 Form 1099-DIV, which shall be provided
to you in early 2011.
The Fund paid total distributions of $54,773,605 during the year ended October 31, 2010 of which
87.48% was from ordinary taxable income and 12.52% was from a non-taxable return of capital.
Shareholders of the Fund will receive in early 2011 a Form 1099-DIV that will inform them of the
tax character of their distributions as made by the Fund in calendar year 2010.
Pursuant to Section 853 of the Internal Revenue Code, the Fund elects to pass through foreign taxes
that have been withheld at the fund level to its shareholders so that they may take a foreign tax
credit. For the year ended October 31, 2010, the total amount of foreign taxes expected to be
passed through to shareholders was $1,645,734 on foreign source income of $14,365,090. Complete
information regarding the Fund’s foreign tax credit pass through to shareholders for 2010 will be
reported in conjunction with Form 1099-DIV.
22 Wells Fargo Advantage Global Dividend Opportunity Fund
|
Other Information (Unaudited) |
PORTFOLIO HOLDINGS INFORMATION
The complete portfolio holdings for the Fund is publicly available on the Fund’s Web site
(www.wellsfargo.com/advantagefunds) on a monthly, 30-day or more delayed basis. The Fund files its
complete schedule of portfolio holdings with the SEC for the first and third quarters of each
fiscal year on Form N-Q, which is available without charge by visiting the SEC Web site at
www.sec.gov. In addition, the Fund’s Form N-Q may be reviewed and copied at the SEC’s Public
Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in
Chicago, at 175 West Jackson Boulevard, Suite 900. Information about the Public Reference Room may
be obtained by calling 1-800-SEC-0330.
BOARD OF TRUSTEES
The following table provides basic information about the Board of Trustees (the “Trustees”)
and Officers of the Fund. Each of the Trustees and Officers listed below acts in identical
capacities for the Wells Fargo Advantage family of funds, which consists of 152 funds comprising
the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust, and four
closed-end funds, including the Fund (collectively the “Fund Complex”). All of the Trustees are
also Members of the Audit and Governance Committees of each Trust in the Fund Complex. The mailing
address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. The
Board of Trustees is classified into three classes of which one is elected annually. Each Trustee
serves a three-year term concurrent with the class from which the Trustee is elected. Each Officer
serves an indefinite term.
Independent Trustees
| Name and | Position Held and | |||||
| Year of Birth | Length of Service | Principal Occupations During Past Five Years | Other Directorships | |||
Peter G. Gordon (Born 1942) |
Trustee, since 2010; Chairman, since 2010 |
Co-Founder, Chairman, President and CEO of Crystal Geyser.
Water Company. |
Asset Allocation Trust |
|||
Isaiah Harris, Jr. (Born 1952) |
Trustee, since 2010 | Retired. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corporation from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Currently a member of the Iowa State University Foundation Board of Governors and a member of the Advisory Board of Iowa State University School of Business. | CIGNA Corporation;
Deluxe Corporation;
Asset Allocation Trust |
|||
Judith M. Johnson (Born 1949) |
Trustee, since 2010 | Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant. | Asset Allocation Trust |
|||
Leroy Keith, Jr. (Born 1939) |
Trustee, since 2004 | Chairman, Bloc Global Services (development and construction). Trustee of the Evergreen Funds from 1983 to 2010. Former Managing Director, Almanac Capital Management (commodities firm), former Partner, Stonington Partners, Inc. (private equity fund), former Director, Obagi Medical Products Co. and former Director, Lincoln Educational Services. | Trustee, Virtus Fund
Complex (consisting
of 46 portfolios as
of 12/31/09);
Director, Diversapack
Co. (packaging
company); Asset
Allocation Trust |
|||
David F. Larcker (Born 1951) |
Trustee, since 2010 | James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of Corporate Governance Research Program and Co-Director of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | Asset Allocation Trust |
|||
Other Information (Unaudited)
|
Wells Fargo Advantage Global Dividend Opportunity Fund 23 |
| Name and | Position Held and | |||||
| Year of Birth | Length of Service | Principal Occupations During Past Five Years | Other Directorships | |||
Olivia S. Mitchell (Born 1953) |
Trustee, since 2010 | International Foundation of Employee Benefit Plans Professor and Chair of the Department of Insurance and Risk Management, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993. | Asset Allocation Trust |
|||
Timothy J. Penny (Born 1951) |
Trustee, since 2010 | President and CEO of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007 and Senior Fellow at the Humphrey Institute Policy Forum at the University of Minnesota since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007. | Asset Allocation Trust |
|||
Michael S. Scofield (Born 1943) |
Trustee, since 2004 | Currently serves on the Investment Company Institute’s Board of Governors and Executive Committee. Former Chairman of the Independent Directors Counsel. Trustee of the Evergreen Funds from 1984 to 2010. Retired Attorney, Law Offices of Michael S. Scofield and former Director and Chairman, Branded Media Corporation (multi-media branding company). | Asset Allocation Trust |
|||
Donald C. Willeke (Born 1940) |
Trustee, since 2010 | Principal of the law firm of Willeke & Daniels. General Counsel of the Minneapolis Employees Retirement Fund from 1984 until its consolidation into the Minnesota Public Employees Retirement Association on June 30, 2010. | Asset Allocation Trust |
|||
Officers
| Name and | Position Held and | |||||
| Year of Birth | Length of Service | Principal Occupations During Past Five Years | ||||
Karla M. Rabusch (Born 1959) |
President, since 2010 | Executive Vice President of Wells Fargo Bank, N.A. and President of Wells Fargo Funds Management, LLC since 2003. Senior Vice President and Chief Administrative Officer of Wells Fargo Funds Management, LLC from 2001 to 2003. | ||||
C. David Messman (Born 1960) |
Secretary, since 2010; Chief Legal Counsel, since 2010 | Senior Vice President and Secretary of Wells Fargo Funds Management, LLC since 2001. Vice President and Managing Counsel of Wells Fargo Bank, N.A. since 1996. | ||||
Kasey Phillips (Born 1970) |
Treasurer, since 2005 | Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2006 to 2010. Treasurer of the Evergreen Funds from 2005 to 2010. Vice President and Assistant Vice President of Evergreen Investment Services, Inc. from 1999 to 2006. | ||||
David Berardi (Born 1975) |
Assistant Treasurer, since 2009 |
Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Assistant Vice President of Evergreen Investment Services, Inc. from 2004 to 2008. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010. | ||||
Jeremy DePalma (Born 1974) |
Assistant Treasurer, since 2005 |
Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Vice President, Evergreen Investment Services, Inc. from 2004 to 2007. Assistant Vice President, Evergreen Investment Services, Inc. from 2000 to 2004 and the head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010. | ||||
24 Wells Fargo Advantage Global Dividend Opportunity Fund
|
Other Information (Unaudited) |
| Name and | Position Held and | |||
| Year of Birth | Length of Service | Principal Occupations During Past Five Years | ||
Debra Ann Early (Born 1964) |
Chief Compliance Officer, since 2010 |
Chief Compliance Officer of Wells Fargo Funds Management, LLC since 2007. Chief Compliance Officer of Parnassus Investments from 2005 to 2007. Chief Financial Officer of Parnassus Investments from 2004 to 2007 and Senior Audit Manager of PricewaterhouseCoopers LLP from 1998 to 2004. | ||
Other Information (Unaudited)
|
Wells Fargo Advantage Global Dividend Opportunity Fund 25 |
BOARD CONSIDERATION OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS:
At a telephonic meeting on May 11, 2010, the Trustees of the Fund, including each Trustee who
is not an “interested person” of the Fund (the “Independent Trustees”), as such term is defined by
the Investment Company Act of 1940, as amended (the “1940 Act”), approved an advisory agreement for
the Fund with Wells Fargo Funds Management, LLC (“Funds Management”) as well as sub-advisory
agreements with Crow Point Partners, LLC (“Crow Point”) and Wells Capital Management Incorporated
(“Wells Capital”). Because the 1940 Act requires trustee approval of definitive advisory agreements
to occur at an in-person meeting, the Trustees, including the Independent Trustees, considered and
approved each of these agreements again at their in-person meeting held on June 9-10, 2010
(together with the May 11, 2010 telephonic meeting, the “Meetings”).
In considering at the Meetings whether to approve the advisory agreement with Funds Management and
the sub-advisory agreements with Crow Point and Wells Capital, the Trustees took into account that
they had most recently approved the annual continuation of the Fund’s prior investment advisory
agreement with Evergreen Investment Management Company, LLC (“EIMC”) and sub-advisory agreement
with Crow Point in September 2009. That approval followed a lengthy process during which the
Trustees considered a variety of factors, including, for example, the nature and quality of
services that the Fund receives, the fees that the Fund pays under the agreements, and the Fund’s
investment performance, as well as a wide range of other matters that the Trustees considered to
have a bearing upon the agreements.
The Trustees also considered that the advisory agreement with Funds Management and the sub-advisory
agreements with Crow Point and Wells Capital were proposed in the context of the combination of the
Evergreen and Wells Fargo mutual fund families. After the December 31, 2008 merger of the Wells
Fargo and Wachovia organizations, representatives of the combined Wells Fargo asset management
organization approached the Trustees of the Evergreen funds with a proposal to combine the
Evergreen and Wells Fargo Advantage Fund families. Funds Management’s representatives cited a
number of important considerations favoring an eventual combination of the fund families,
including, among others, the integration of the Evergreen and Wells Fargo investment management
organizations; possible economies of scale through the increased size of the combined fund family;
contractual savings from service providers to the combined funds; the ability to select the best
funds from each family to continue as part of the combined fund family; and more seamless
integration of the Evergreen funds into the combined Wells Fargo investment and shareholder
servicing platforms and programs.
Over the course of 2009 and early 2010, the Board of Trustees of the Evergreen funds met repeatedly
with the management teams of Funds Management and EIMC and worked to refine the proposed
combination of the fund families. For the closed-end Evergreen funds, the proposed combination
involved the approval of new investment advisory and sub-advisory agreements with Funds Management
and affiliated (and un-affiliated) entities, name changes, and the election of new trustees.
Throughout their consideration of the proposed combination of the fund families, the Trustees
requested additional information from representatives of EIMC and Funds Management as they
considered appropriate. The Trustees retained an independent industry consultant to assist them in
evaluating the combination of the fund families and related information. They also met separately
on numerous occasions with independent legal counsel to the Independent Trustees.
The Trustees’ determinations to approve the advisory agreement with Funds Management and the
sub-advisory agreements with Crow Point and Wells Capital were based on a comprehensive
evaluation of the information provided to them. During their review, the Trustees did not identify
any particular information or consideration that was all-important or controlling, and each Trustee
attributed different weights to various factors. In their discussions, the Board made clear that,
although the Fund’s new agreements were proposed as part of a combination of the fund families that
may well benefit the shareholders of the Evergreen funds as a whole, the Board would consider
carefully the impact of the proposed combination on each Evergreen fund and its shareholders
individually, and would thus evaluate the proposed advisory agreement with Funds Management and
sub-advisory agreements with Crow Point and Wells Capital for the Fund independently.
26 Wells Fargo Advantage Global Dividend Opportunity Fund
|
Other Information (Unaudited) |
The Trustees reviewed differences in the terms of the prior advisory agreement with EIMC and
the proposed advisory agreement with Funds Management, and between the prior sub-advisory agreement
with Crow Point and the proposed sub-advisory agreements with Crow Point and Wells Capital. The
Trustees considered whether any change to the nature and quality of the comprehensive investment
management services provided to the Fund would reasonably be expected as a result of adopting the
proposed advisory agreement with Funds Management and sub-advisory agreements with Crow Point and
Wells Capital. In this regard, they noted that the same investment management personnel presently
responsible for providing investment advisory and sub-advisory services to the Fund would continue
to do so under the new agreements, with the exception that Wells Capital would take over providing
certain of the investment advisory services currently being performed by EIMC. The Trustees
considered the research and other capabilities and resources available to the proposed portfolio
managers, as well as the investment performance record of these portfolio managers in managing the
Fund.
The Trustees observed that the proposed fee rate under the advisory agreement with Funds Management
was identical to the fee rate under the prior advisory agreement with EIMC, and that the fee rate
for Crow Point would not change. They noted that there were certain changes proposed to the fee
rates under the sub-advisory agreement with Wells Capital, which would have no impact on the
aggregate fees paid by the Fund for advisory services. Funds Management asserted, and the Trustees
took into account, that these changes were not expected to have any impact on the quality of
services provided to the Funds or on the profitability of the advisory and sub-advisory
arrangements to Funds Management and its affiliates (which includes Wells Capital). The Trustees
reviewed information prepared by an independent data provider regarding the Fund’s management fee
and other expenses relative to the fees and expenses of other peer funds. They noted that the
Fund’s management fees were higher than the fees of many of its peer funds, but determined on the
basis of the information presented that the Fund’s fees did not appear excessive. During the course
of their consideration of fees, the Trustees noted that in certain cases, Funds Management and/or
its affiliates provide to other clients (including principally other existing Evergreen funds)
advisory services that are comparable in some degree to the advisory services that they would
provide to the Fund, and considered comparative fee information, as well as information regarding
similarities and differences in the services provided, in this regard. In light, in part, of the
fact that there were material differences between the Fund’s investment program and the investment
programs of these other clients, the Trustees did not consider the comparative fee information to
be particularly useful in their consideration of the Fund’s proposed agreements.
The Trustees considered that, although the Fund was not making a continuous offering of its shares
so that the likelihood of achieving economies of scale following the Fund’s initial offering was
relatively low, the Fund may potentially benefit to the extent that contractual arrangements with
service providers to the combined fund family could be negotiated on a more favorable basis as a
result of the increased scale of the combined fund family. They also considered information
provided to them regarding the profitability of the advisory fees paid under the prior advisory
agreement to EIMC, and regarding the anticipated profitability of such fees to Funds Management
under the proposed advisory agreement, and determined that the profitability of these arrangements
was not so high as to prevent their approving the new agreements.
| Wells Fargo Advantage Global Dividend Opportunity Fund 27 |
AUTOMATIC DIVIDEND REINVESTMENT PLAN
All common shareholders are eligible to participate in the Automatic Dividend Reinvestment
Plan (“the Plan”). Pursuant to the Plan, unless a common shareholder is ineligible or elects
otherwise, all cash dividends and capital gains distributions are automatically reinvested by
Computershare Trust Company, N.A., as agent for shareholders in administering the Plan (“Plan
Agent”), in additional common shares of the Fund. Whenever the Fund declares an ordinary income
dividend or a capital gain dividend (collectively referred to as “dividends”) payable either in
shares or in cash, nonparticipants in the Plan will receive cash, and participants in the Plan will
receive the equivalent in shares of common shares. The shares are acquired by the Plan Agent for
the participant’s account, depending upon the circumstances described below, either (i) through
receipt of additional unissued but authorized common shares from the Fund (“newly issued common
shares”) or (ii) by purchase of outstanding common shares on the open-market (open-market
purchases) on the NYSE Amex or elsewhere. If, on the payment date for any dividend or distribution,
the net asset value per share of the common shares is equal to or less than the market price per
common share plus estimated brokerage commissions (“market premium”), the Plan Agent will invest
the amount of such dividend or distribution in newly issued shares on behalf of the participant.
The number of newly issued common shares to be credited to the participant’s account will be
determined by dividing the dollar amount of the dividend by the net asset value per share on the
date the shares are issued, provided that the maximum discount from the then current market price
per share on the date of issuance may not exceed 5%. If on the dividend payment date the net asset
value per share is greater than the market value or market premium (“market discount”), the Plan
Agent will invest the dividend amount in shares acquired on behalf of the participant in
open-market purchases. There will be no brokerage charges with respect to shares issued directly by
the Fund as a result of dividends or capital gains distributions payable either in shares or in
cash. However, each participant will pay a pro rata share of brokerage commissions incurred with
respect to the Plan Agent’s open-market purchases in connection with the reinvestment of dividends.
The automatic reinvestment of dividends and distributions will not relieve participants of any
federal, state or local income tax that may be payable (or required to be withheld) on such
dividends. All correspondence concerning the Plan should be directed to the Plan Agent at P.O. Box
43010, Providence, Rhode Island 02940-3010 or by calling 1-800-730-6001.
28 Wells Fargo Advantage Global Dividend Opportunity Fund
|
List of Abbreviations |
The following is a list of common abbreviations for terms and entities which may have appeared
in this report.
ABAG
|
— | Association of Bay Area Governments | ||
ADR
|
— | American Depositary Receipt | ||
ADS
|
— | American Depository Shares | ||
AMBAC
|
— | American Municipal Bond Assurance Corporation | ||
AMT
|
— | Alternative Minimum Tax | ||
ARM
|
— | Adjustable Rate Mortgages | ||
AUD
|
— | Australian Dollar | ||
BART
|
— | Bay Area Rapid Transit | ||
BRL
|
— | Brazil Real | ||
CAD
|
— | Canadian Dollar | ||
CDA
|
— | Community Development Authority | ||
CDO
|
— | Collateralized Debt Obligation | ||
CDSC
|
— | Contingent Deferred Sales Charge | ||
CGIC
|
— | Capital Guaranty Insurance Company | ||
CGY
|
— | Capital Guaranty Corporation | ||
CHF
|
— | Swiss Franc | ||
CIFG
|
— | CDC (Caisse des Dépôts et Consignations) IXIS Financial Guarantee | ||
COP
|
— | Certificate of Participation | ||
CP
|
— | Commercial Paper | ||
CTF
|
— | Common Trust Fund | ||
DEM
|
— | Deutsche Mark | ||
DKK
|
— | Danish Krone | ||
DW&P
|
— | Department of Water & Power | ||
DWR
|
— | Department of Water Resources | ||
ECFA
|
— | Educational & Cultural Facilities Authority | ||
EDFA
|
— | Economic Development Finance Authority | ||
ETET
|
— | Eagle Tax-Exempt Trust | ||
ETF
|
— | Exchange-Traded Fund | ||
EUR
|
— | Euro | ||
FFCB
|
— | Federal Farm Credit Bank | ||
FGIC
|
— | Financial Guaranty Insurance Corporation | ||
FHA
|
— | Federal Housing Authority | ||
FHAG
|
— | Federal Housing Agency | ||
FHLB
|
— | Federal Home Loan Bank | ||
FHLMC
|
— | Federal Home Loan Mortgage Corporation | ||
FNMA
|
— | Federal National Mortgage Association | ||
FRF
|
— | French Franc | ||
FSA
|
— | Farm Service Agency | ||
GBP
|
— | Great British Pound | ||
GDR
|
— | Global Depositary Receipt | ||
GNMA
|
— | Government National Mortgage Association | ||
GO
|
— | General Obligation | ||
HCFR
|
— | Healthcare Facilities Revenue | ||
HEFA
|
— | Health & Educational Facilities Authority | ||
HEFAR
|
— | Higher Education Facilities Authority Revenue | ||
HFA
|
— | Housing Finance Authority | ||
HFFA
|
— | Health Facilities Financing Authority | ||
HKD
|
— | Hong Kong Dollar | ||
HUD
|
— | Housing & Urban Development | ||
HUF
|
— | Hungarian Forint | ||
IDA
|
— | Industrial Development Authority | ||
IDAG
|
— | Industrial Development Agency | ||
IDR
|
— | Industrial Development Revenue | ||
IEP
|
— | Irish Pound | ||
JPY
|
— | Japanese Yen | ||
KRW
|
— | Republic of Korea Won | ||
LIBOR
|
— | London Interbank Offered Rate | ||
LLC
|
— | Limited Liability Company | ||
LOC
|
— | Letter of Credit | ||
LP
|
— | Limited Partnership | ||
MBIA
|
— | Municipal Bond Insurance Association | ||
MFHR
|
— | Multi-Family Housing Revenue | ||
MFMR
|
— | Multi-Family Mortgage Revenue | ||
MMD
|
— | Municipal Market Data | ||
MTN
|
— | Medium Term Note | ||
MUD
|
— | Municipal Utility District | ||
MXN
|
— | Mexican Peso | ||
MYR
|
— | Malaysian Ringgit | ||
NATL-RE
|
— | National Public Finance Guarantee Corporation | ||
NLG
|
— | Netherlands Guilder | ||
NOK
|
— | Norwegian Krone | ||
NZD
|
— | New Zealand Dollar | ||
PCFA
|
— | Pollution Control Finance Authority | ||
PCR
|
— | Pollution Control Revenue | ||
PFA
|
— | Public Finance Authority | ||
PFFA
|
— | Public Facilities Financing Authority | ||
plc
|
— | Public Limited Company | ||
PLN
|
— | Polish Zloty | ||
PSFG
|
— | Public School Fund Guaranty | ||
R&D
|
— | Research & Development | ||
RDA
|
— | Redevelopment Authority | ||
RDFA
|
— | Redevelopment Finance Authority | ||
REITS
|
— | Real Estate Investment Trusts | ||
SEK
|
— | Swedish Krona | ||
SFHR
|
— | Single Family Housing Revenue | ||
SFMR
|
— | Single Family Mortgage Revenue | ||
SGD
|
— | Singapore Dollar | ||
SKK
|
— | Slovakian Koruna | ||
SLMA
|
— | Student Loan Marketing Association | ||
SPDR
|
— | Standard & Poor’s Depositary Receipts | ||
STIT
|
— | Short-Term Investment Trust | ||
TBA
|
— | To Be Announced | ||
TRAN
|
— | Tax Revenue Anticipation Notes | ||
TRY
|
— | Turkish Lira | ||
USD
|
— | United States Dollar | ||
XLCA
|
— | XL Capital Assurance | ||
ZAR
|
— | South African Rand |
Transfer Agent, Registrar,
Shareholder Servicing Agent & Dividend Disbursing Agent: |
Computershare Trust Company, N.A. |
P.O. Box 43010 Providence, RI 02940-3010 1-800-730-6001 |
| Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. | |
| Wells Fargo Funds Management, LLC, is a subsidiary of Wells Fargo & Company and is an affiliate of Wells Fargo & Company’s broker/dealer subsidiaries. | |
NOT FDIC INSURED § NO BANK GUARANTEE § MAY LOSE VALUE
|
 |
© 2009 Wells Fargo Funds Management, LLC. All rights reserved.
|
| www.wellsfargo.com/advantagefunds | | 127200 12-10 AGDO/AR142 10-10 |
ITEM 2. CODE OF ETHICS
As of the end of the period, October 31, 2010, Wells Fargo Advantage Global Dividend Opportunity
Fund has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its
President and Treasurer. A copy of the code of ethics is filed as an exhibit to this Form
N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of Wells Fargo Advantage Global Dividend Opportunity Fund has determined that
Judith Johnson is an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mrs.
Johnson is independent for purposes of Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(a) Audit Fees — Provided below are the aggregate fees billed for the fiscal years ended
October 31, 2009 and October 31, 2010 for professional services rendered by the principal
accountant for the audit of the Registrant’s annual financial statements or services that are
normally provided by the accountant in connection with statutory and regulatory filings or
engagements.
For the fiscal years ended October 31, 2009 and October 31, 2010, the Audit Fees
were $39,600 and $40,600, respectively.
(b) Audit-Related Fees — There were no audit-related fees incurred for the fiscal years ended
October 31, 2009 and October 31, 2010 for assurance and related services by the principal
accountant for the Registrant.
(c) Tax Fees — Provided below are the aggregate fees billed for the fiscal years ended October
31, 2009 and October 31, 2010 for professional services rendered by the principal accountant for
the Registrant for tax compliance, tax advice, and tax planning.
For the fiscal years ended October 31, 2009 and October 31, 2010, the Tax Fees were $0 and
$1,620, respectively. The incurred Tax Fees are comprised of excise tax review services.
For the fiscal years ended October 31, 2009 and October 31, 2010, the Tax Fees were $0 and
$2,420, respectively. The incurred Tax Fees are comprised of tax preparation and consulting
services.
(d) All Other Fees — There were no other fees incurred for the fiscal years ended October 31,
2009 and October 31, 2010.
(e)(1) The Chairman of the Audit Committees is authorized to pre-approve: (1) audit services to Wells
Fargo Advantage Global Dividend Opportunity Fund; (2) non-audit tax or compliance consulting or
training services provided to the Fund by the independent auditors (“Auditors”) if the fees for any
particular engagement are not anticipated to exceed $50,000; and (3) non-audit tax or compliance
consulting or training services provided by the Auditors to the Fund’s investment adviser and its
controlling entities (where pre-approval is required because the engagement relates directly to the
operations and financial reporting of the Fund) if the fee to the Auditors for any particular
engagement is not anticipated to exceed $50,000. For any such pre-approval sought from the
Chairman, Management shall prepare a brief description of the proposed services. If the Chairman
approves of such service, he or she shall sign the statement prepared by Management. Such written
statement shall be presented to the full Committees at their next regularly scheduled meetings.
(e)(2) Not Applicable.
(f) Not Applicable.
(g) Provided below are the aggregate non-audit fees billed for the fiscal years ended October 31, 2009
and October 31, 2010, by the principal accountant for services rendered to the Registrant, and
rendered to the Registrant’s investment adviser, and any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the Registrant.
For the fiscal year ended October 31, 2009, the Registrant’s investment adviser incurred
non-audit fees in the amount of $480,000. The non-audit fees for the year ended October 31,
2009 consisted of the aggregate fees for non-audit services rendered to the Fund and the
investment advisor.
(h) The Registrant’s audit committee of the board of directors has determined that non-audit services
rendered to the registrant’s investment adviser, that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of the Regulation S-X, does not compromise the independence of the
principal accountant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEMS 6. SCHEDULE OF INVESTMENTS
The Schedule of Investments is included as part of the report to shareholders filed under Item 1 of
this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
PROXY VOTING POLICIES AND PROCEDURES
REVISED AS OF AUGUST 25, 2010
REVISED AS OF AUGUST 25, 2010
1. Scope of Policies and Procedures. These Policies and Procedures (“Procedures”) are used to
determine how to vote proxies relating to portfolio securities held by the series of Wells Fargo
Funds Trust, Wells Fargo Master Trust, Wells Fargo Variable Trust, Asset Allocation Trust, Wells
Fargo Advantage Global Dividend Opportunity Fund, Wells Fargo Advantage Income Opportunities Fund,
Wells Fargo Advantage Multi-Sector Income Fund, and Wells Fargo Advantage Utilities & High Income
Fund (the “Trusts”) except for those series that exclusively hold non-voting securities (hereafter,
all such series, and all such Trusts not having separate series, holding voting securities are
referred to as the “Funds”).
2. Voting Philosophy. The Funds and Wells Fargo Funds Management, LLC (“Funds Management”) have
adopted these Procedures to ensure that proxies are voted in the best interests of Fund
shareholders, without regard to any relationship that any affiliated person of the Fund (or an
affiliated person of such affiliated person) may have with the issuer. Funds Management exercises
its voting responsibility, as a fiduciary, with the goal of maximizing value to shareholders
consistent with governing laws and the investment policies of each Fund. While securities are not
purchased to exercise control or to seek to effect corporate change through share ownership, the
Funds support sound corporate governance practices within companies in which they invest.
3. Responsibilities
(a) Board of Trustees. The Board of Trustees of each Trust (the “Board”) has delegated the
responsibility for voting proxies relating to the Funds’ portfolio securities to Funds Management.
The Board retains the authority to make or ratify any voting decisions or approve any changes to
these Procedures as the Board deems appropriate. Funds Management will provide reports to the Board
regarding voting matters when and as reasonably requested by the Board. The Board shall review
these Procedures as often as it deems appropriate to consider whether any revisions are warranted.
On an annual basis, the Board shall receive and review a report from Funds Management on the proxy
voting process.
(b) Funds Management Proxy Committee
(i) Responsibilities. The Funds Management Proxy Voting Committee (the “Proxy Committee”) shall be
responsible for overseeing the proxy voting process to ensure its implementation in conformance
with these Procedures. The Proxy Committee shall monitor Risk Metrics Group (“Risk Metrics”), the
proxy voting agent for Funds Management, to determine that Risk Metrics is accurately applying the
Procedures as set forth herein. The Proxy Committee shall review the continuing appropriateness of
the Procedures set forth herein, recommend revisions to the Board as necessary and provide an
annual update to the Board on the proxy voting process.
(ii) Voting Guidelines. Appendix A hereto sets forth guidelines regarding how proxies will be voted
on the issues specified. Risk Metrics will vote proxies for or against as directed by the
guidelines. Where the guidelines specify a “case by case” determination for a particular issue,
Risk Metrics will forward the proxy to the Proxy Committee for a vote determination by the Proxy
Committee. Finally, with respect to issues for which a vote for or against is specified by the
Procedures, the Proxy Committee shall have the authority to direct Risk Metrics to forward the
proxy to the Proxy Committee for a discretionary vote by the Proxy Committee if the Proxy Committee
determines that a case-by-case review of such matter is warranted. The Proxy Committee may also
consult Fund sub-advisers on certain proxy voting issues on a case-by-case basis as the Proxy
Committee deems appropriate or to the extent that a sub-adviser of a Fund makes a recommendation
regarding a proxy voting issue. As a general matter, however, proxies are voted consistently on the
same matter when securities of an issuer are held by multiple Funds.
(iii) Proxy Committee. In all cases, the Proxy Committee will exercise its voting discretion in
accordance with the voting philosophy of the Funds. In cases where a proxy is forwarded by Risk
Metrics to the Proxy Committee, the Proxy Committee may be assisted in its voting decision through
receipt of: (i) independent research and voting recommendations provided by Risk Metrics or other
independent sources; (ii) input from the investment sub-adviser responsible for purchasing the
security; and (iii) information provided by company management and shareholder groups.
Voting decisions made by the Proxy Committee will be reported to Risk Metrics to ensure that the
vote is registered in a timely manner and included in Form N-PX reporting.
(iv) Securities on Loan. As a general matter, securities on loan will not be recalled to facilitate
proxy voting (in which case the borrower of the security shall be entitled to vote the proxy).
However, if the Proxy Committee is aware of an item in time to recall the security and has
determined in good faith that the importance of the matter to be voted upon outweighs the loss in
lending revenue that would result from recalling the security (i.e., if there is a controversial
upcoming merger or acquisition, or some other significant matter), the security will be recalled
for voting.
(v) Practical Limitations to Proxy Voting. While Funds Management uses its best efforts to vote
proxies, in certain circumstances it may be impractical or impossible for Funds Management to vote
proxies (e.g., limited value or unjustifiable costs). For example, in accordance with local law or
business practices, many foreign companies prevent the sales of shares that have been voted for a
certain period beginning prior to the shareholder meeting and ending on the day following the
meeting (“share blocking”). Due to these restrictions, Funds Management must balance the benefits
to its clients of voting proxies against the potentially serious portfolio management consequences
of a reduced flexibility to sell the underlying shares at the most advantageous time. As a result,
Funds Management will generally not vote those proxies in the absence of an unusual, significant
vote or compelling economic importance. Additionally, Funds Management may not be able to vote
proxies for certain foreign securities if Funds Management does not receive the proxy statement in time to vote the proxies due
to custodial processing delays.
(vi) Conflicts of Interest. Funds Management may have a conflict of interest regarding a proxy to
be voted upon if, for example, Funds Management or its affiliates have other relationships with the
issuer of the proxy. In most instances, conflicts of interest are avoided through a strict and
objective application of the voting guidelines attached hereto. However, when the Proxy Committee
is aware of a material conflict of interest regarding a matter that would otherwise require a vote
by the Proxy Committee, the Proxy Committee shall address the material conflict by using any of the
following methods: (1) instructing Risk Metrics to vote in accordance with the recommendation Risk
Metrics makes to its clients; (2) disclosing the conflict to the Board and obtaining their consent
before voting; (3) submitting the matter to the Board to exercise its authority to vote on such
matter; (4) engaging an independent fiduciary who will direct the Proxy Committee on voting
instructions for the proxy; (5) consulting with outside legal counsel for guidance on resolution of
the conflict of interest; (6) erecting information barriers around the person or persons making
voting decisions; (7) voting in proportion to other shareholders (“mirror voting”); or (8) voting
in other ways that are consistent with each Fund’s obligation to vote in the best interests of its
shareholders. Additionally, the Proxy Committee will not permit its votes to be influenced by any
conflict of interest that exists for any other affiliated person of the Fund (such as a sub-adviser
or principal underwriter) or any affiliated persons of such affiliated persons and the Proxy
Committee will vote all such matters without regard to the conflict.
(vii) Meetings. The Proxy Committee shall convene as needed and when discretionary voting
determinations need to be considered, and shall have the authority to act by vote of a majority of
the Proxy Committee members available at that time. The Proxy Committee shall also meet at least
semi-annually to review the Procedures and the performance of Risk Metrics in exercising its proxy
voting responsibilities.
(viii) Membership. The voting members of the Proxy Committee shall be Tom Biwer, Travis Keshemberg,
Patrick McGuinnis and Erik Sens. Andrew Owen shall be a non-voting member and serve in an advisory
capacity on the Proxy Committee. Changes to the membership of the Proxy Committee will be made only
with Board approval. Upon departure from Funds Management, a member’s position on the Proxy
Committee will automatically terminate.
4. Disclosure of Policies and Procedures. Each Fund shall disclose in its statement of additional
information a description of the policies and procedures it uses to determine how to vote proxies
relating to securities held in its portfolio. In addition, each Fund shall disclose in its semi-
and annual reports that a description of its proxy voting policies and procedures is available
without charge, upon request, by calling 1-800-222-8222, on the Fund’s web site at
www.wellsfargo.com/advantagefunds and on the Securities and Exchange Commission’s website at
http://www.sec.gov.
5. Disclosure of Proxy Voting Record. Each Trust shall file with the Commission an annual report on
Form N-PX not later than October 31 of each year (beginning October 31, 2004), containing the
Trust’s proxy voting record for the most recent twelve-month period ended June 30.
Each Fund shall disclose in its statement of additional information and semi- and annual reports
that information regarding how the Fund voted proxies relating to portfolio securities during the
most recent 12-month period ended June 30 is available without charge on the Funds’ web site at
www.wellsfargo.com/advantagefunds or by accessing the Commission’s web site at www.sec.gov.
Each Fund shall disclose the following information on Form N-PX for each matter relating to a
portfolio security considered at any shareholder meeting held during the period covered by the
report and with respect to which the Fund was entitled to vote:
• The name of the issuer of the portfolio security;
• The exchange ticker symbol of the portfolio security;
• The Council of Uniform Securities Identification Procedures (“CUSIP”) number for the portfolio
security (unless the CUSIP is not available through reasonably practicable means, in which case it
will be omitted);
• The shareholder meeting date;
• A brief identification of the matter voted on;
• Whether the matter was proposed by the issuer or by a security holder;
• Whether the Fund cast its vote on the matter;
• How the Fund cast its vote (e.g. for or against a proposal, or abstain; for or withhold regarding
election of directors); and
• Whether the Fund cast its vote for or against management.
Form N-PX shall be made available to Fund shareholders through the SEC web site.
APPENDIX A
TO
PROXY VOTING POLICIES AND PROCEDURES
TO
PROXY VOTING POLICIES AND PROCEDURES
Funds Management will vote proxies relating to portfolio securities held by the Trusts in
accordance with the following proxy voting guidelines. To the extent the specific guidelines below
do not address a proxy voting proposal, Funds Management will vote pursuant to Risk Metrics’
current U.S. and International proxy voting guidelines. Proxies for securities held by the Wells
Fargo Advantage Social Awareness Fund related to social and environmental proposals will be voted
pursuant to Risk Metrics’ current SRI Proxy Voting Guidelines. In addition,
proxies related to
issues not addressed by the specific guidelines below or by Risk Metrics’ current U.S. and
International proxy voting guidelines will be forwarded to the Proxy Committee for a vote
determination by the Proxy Committee.
Uncontested Election of Directors or Trustees |
||
THE FUNDS will generally vote for all uncontested director or trustee nominees. The
Nominating Committee is in the best position to select nominees who are available and
capable of working well together to oversee management of the company. THE FUNDS will
not require a performance test for directors.
|
FOR | |
THE FUNDS will generally vote for reasonably crafted shareholder proposals calling
for directors to be elected with an affirmative majority of votes cast and/or the
elimination of the plurality standard for electing directors, unless the company has
adopted formal corporate governance principles that present a meaningful alternative
to the majority voting standard.
|
FOR | |
THE FUNDS will withhold votes for a director if the nominee fails to attend at least
75% of the board and committee meetings without a valid excuse.
|
WITHHOLD | |
THE FUNDS will vote against routine election of directors if any of the following
apply: company fails to disclose adequate information in a timely manner, serious
issues with the finances, questionable transactions, conflicts of interest, record of
abuses against minority shareholder interests, bundling of director elections, and/or
egregious governance practices.
|
AGAINST | |
THE FUNDS will withhold votes from the entire board (except for new nominees) where
the director(s) receive more than 50% withhold votes out of those cast and the issue
that was the underlying cause of the high level of withhold votes has not been
addressed.
|
WITHHOLD | |
THE FUNDS will withhold votes from members of the Audit Committee and/or the full
board if poor accounting practices, which rise to a level of serious concern, such
as: fraud; misapplication of GAAP; and material weaknesses identified in Section 404
disclosures, are identified.
|
WITHHOLD | |
THE FUNDS will withhold votes from members of the Audit Committee if the company
receives an adverse opinion on the company’s financial statements from its auditor.
|
WITHHOLD | |
THE FUNDS will withhold votes from members of the Audit Committee if there is
persuasive evidence that the audit committee entered into an inappropriate
indemnification agreement with its auditor that limits the ability of the company, or
its shareholders, to pursue legitimate legal recourse against the audit firm.
|
WITHHOLD | |
Ratification of Auditors |
||
THE FUNDS will vote against auditors and withhold votes from audit committee members
if non-audit fees are greater than audit fees, audit-related fees, and permitted tax
fees, combined. THE FUNDS will follow the disclosure categories being proposed by the
SEC in applying the above formula.
|
AGAINST/ WITHHOLD | |
With the above exception, THE FUNDS will generally vote for proposals to ratify
auditors unless:
|
FOR | |
• an auditor has a financial interest in or association with the company, and is
therefore not independent, or
|
AGAINST | |
• there is reason to believe that the independent auditor has rendered an opinion
that is neither accurate nor indicative of the company’s financial position.
|
AGAINST | |
THE FUNDS will vote against proposals that require auditors to attend annual meetings
as auditors are regularly reviewed by the board audit committee, and such attendance
is unnecessary.
|
AGAINST | |
THE FUNDS will consider shareholder proposals requiring companies to prohibit their
auditors from engaging in non-audit services on a case-by-case basis (or cap level of
non-audit services).
|
CASE-BY-CASE |
THE FUNDS will vote for shareholder proposals requesting a shareholder vote for audit
firm ratification.
|
FOR | |
THE FUNDS will vote against shareholder proposals asking for audit firm rotation.
This practice is viewed as too disruptive and too costly to implement for the benefit
achieved.
|
AGAINST | |
Company Name Change/Purpose |
||
THE FUNDS will vote for proposals to change the company name as management and the
board is best suited to determine if such change in company name is necessary.
|
FOR | |
However, where the name change is requested in connection with a reorganization of
the company, the vote will be based on the merits of the reorganization.
|
CASE-BY-CASE | |
In addition, THE FUNDS will generally vote for proposals to amend the purpose of the
company. Management is in the best position to know whether the description of what
the company does is accurate, or whether it needs to be updated by deleting, adding
or revising language.
|
FOR | |
Employee Stock Purchase Plans/401(k) Employee Benefit Plans |
||
THE FUNDS will vote for proposals to adopt, amend or increase authorized shares for
employee stock purchase plans and 401(k) plans for employees as properly structured
plans enable employees to purchase common stock at a slight discount and thus own a
beneficial interest in the company, provided that the total cost of the company’s
plan is not above the allowable cap for the company.
|
FOR | |
Similarly, THE FUNDS will generally vote for proposals to adopt or amend thrift and
savings plans, retirement plans, pension plans and profit plans.
|
FOR | |
Approve Other Business |
||
THE FUNDS will generally vote for proposals to approve other business. This transfer
of authority allows the corporation to take certain ministerial steps that may arise
at the annual or special meeting.
|
FOR | |
However, THE FUNDS retains the discretion to vote against such proposals if adequate
information is not provided in the proxy statement, or the measures are significant
and no further approval from shareholders is sought.
|
AGAINST | |
Independent Board of Directors/Board Committees |
||
THE FUNDS will vote for proposals requiring that two-thirds of the board be
independent directors. An independent board faces fewer conflicts and is best
prepared to protect stockholders’ interests.
|
FOR | |
THE FUNDS will withhold votes from insiders and affiliated outsiders on boards that
are not at least majority independent.
|
WITHHOLD | |
THE FUNDS will withhold votes from compensation committee members where there is a
pay-for-performance disconnect (for Russell 3000 companies).
|
WITHHOLD | |
THE FUNDS will vote for proposals requesting that the board audit, compensation
and/or nominating committees be composed of independent directors, only. Committees
should be composed entirely of independent directors in order to avoid conflicts of
interest.
|
FOR | |
THE FUNDS will withhold votes from any insiders or affiliated outsiders on audit,
compensation or nominating committees. THE FUNDS will withhold votes from any
insiders or affiliated outsiders on the board if any of these key committees has not
been established.
|
WITHHOLD | |
THE FUNDS will vote against proposals from shareholders requesting an independent
compensation consultant.
|
AGAINST | |
Minimum Stock Requirements by Directors |
||
THE FUNDS will vote against proposals requiring directors to own a minimum number of
shares of company stock in order to qualify as a director, or to remain on the board.
Minimum stock ownership requirements can impose an across-the-board requirement that
could prevent qualified individuals from serving as directors.
|
AGAINST |
Indemnification and Liability Provisions for Directors and Officers |
||
THE FUNDS will vote for proposals to allow indemnification of directors and officers,
when the actions taken were on behalf of the company and no criminal violations
occurred. THE FUNDS will also vote in favor of proposals to purchase liability
insurance covering liability in connection with those actions. Not allowing companies
to indemnify directors and officers to the degree possible under the law would limit
the ability of the company to attract qualified individuals.
|
FOR | |
Alternatively, THE FUNDS will vote against indemnity proposals that are overly broad.
For example, THE FUNDS will oppose proposals to indemnify directors for acts going
beyond mere carelessness, such as gross negligence, acts taken in bad faith, acts not
otherwise allowed by state law or more serious violations of fiduciary obligations.
|
AGAINST | |
Nominee Statement in the Proxy |
||
THE FUNDS will vote against proposals that require board nominees to have a statement
of candidacy in the proxy, since the proxy statement already provides adequate
information pertaining to the election of directors.
|
AGAINST | |
Limitation on Number of Boards a Director May Sit On |
||
THE FUNDS will withhold votes from directors who sit on more than six boards.
|
WITHHOLD | |
THE FUNDS will withhold votes from CEO directors who sit on more than two outside
boards besides their own.
|
WITHHOLD | |
Director Tenure/Retirement Age |
||
THE FUNDS will vote against proposals to limit the tenure of directors as such
limitations based on an arbitrary number could prevent qualified individuals from
serving as directors. However, THE FUNDS is in favor of inserting cautionary language
when the average director tenure on the board exceeds 15 years for the entire board.
|
AGAINST | |
The Funds will vote for proposals to establish a mandatory retirement age for
directors provided that such retirement age is not less than 65.
|
FOR | |
Board Powers/Procedures/Qualifications |
||
THE FUNDS will consider on a case-by-case basis proposals to amend the corporation’s
By-laws so that the Board of Directors shall have the power, without the assent or
vote of the shareholders, to make, alter, amend, or rescind the By-laws, fix the
amount to be reserved as working capital, and fix the number of directors and what
number shall constitute a quorum of the Board. In determining these issues, THE FUNDS
will rely on the proxy voting Guidelines.
|
CASE-BY-CASE | |
Loans to Officers |
||
THE FUNDS will consider on a case-by-case basis proposals to authorize the
corporation to make loans or to guarantee the obligations of officers of the
corporation or any of its affiliates.
|
CASE-BY-CASE | |
Adjourn Meeting to Solicit Additional Votes |
||
THE FUNDS will examine proposals to adjourn the meeting to solicit additional votes
on a case-by-case basis. As additional solicitation may be costly and could result in
coercive pressure on shareholders, THE FUNDS will consider the nature of the proposal
and its vote recommendations for the scheduled meeting.
|
CASE-BY-CASE | |
THE FUNDS will vote for this item when: |
||
THE FUNDS is supportive of the underlying merger proposal; the company provides a
sufficient, compelling reason to support the adjournment proposal; and the authority
is limited to adjournment proposals requesting the authority to adjourn solely to
solicit proxies to approve a transaction THE FUNDS supports.
|
FOR | |
Contested Election of Directors or Trustees Reimbursement of Solicitation Expenses |
THE FUNDS will consider contested elections on a case-by-case basis, considering the
following factors: long-term financial performance of the target company relative to
its industry; management’s track record; background of the proxy contest;
qualifications of director or trustee nominees (both slates); evaluation of what each
side is offering shareholders as well as the likelihood that the proposed objectives
and goals can be met; and stock ownership positions.
|
CASE-BY-CASE | |
In addition, decisions to provide reimbursement for dissidents waging a proxy contest
are made on a case-by-case basis as proxy contests are governed by a mix of federal
regulation, state law, and corporate charter and bylaw provisions.
|
CASE-BY-CASE | |
Board Structure: Staggered vs. Annual Elections |
||
THE FUNDS will consider the issue of classified boards on a case-by-case basis. In
some cases, the division of the board into classes, elected for staggered terms, can
entrench the incumbent management and make them less responsive to shareholder
concerns. On the other hand, in some cases, staggered elections may provide for the
continuity of experienced directors on the Board.
|
CASE-BY-CASE | |
Removal of Directors |
||
THE FUNDS will consider on a case-by-case basis proposals to eliminate shareholders’
rights to remove directors with or without cause or only with approval of two-thirds
or more of the shares entitled to vote.
|
CASE-BY-CASE | |
However, a requirement that a 75% or greater vote be obtained for removal of
directors is abusive and will warrant a vote against the proposal.
|
AGAINST | |
Board Vacancies |
||
THE FUNDS will vote against proposals that allow the board to fill vacancies without
shareholder approval as these authorizations run contrary to basic shareholders’
rights.
|
AGAINST | |
Alternatively, THE FUNDS will vote for proposals that permit shareholders to elect
directors to fill board vacancies.
|
FOR | |
Cumulative Voting |
||
THE FUNDS will vote on proposals to permit or eliminate cumulative voting on a
case-by-case basis based upon the existence of a counter balancing governance
structure and company performance, in accordance with its proxy voting guideline
philosophy. However, if the board is elected annually we will not support cumulative
voting.
|
CASE-BY-CASE | |
Shareholders’ Right To Call A Special Meeting |
||
Shareholder Ability to Act by Written Consent |
||
Proposals providing that stockholder action may be taken only at an annual or special
meeting of stockholder and not by written consent, or increasing the shareholder vote
necessary to call a special meeting, will be voted on a case by case basis in
accordance with the proxy voting guidelines.
|
CASE-BY-CASE | |
Board Size |
||
THE FUNDS will vote for proposals that seek to fix the size of the board, as the
ability for management to increase or decrease the size of the board in the face of a
proxy contest may be used as a takeover defense.
|
FOR | |
However, if the company has cumulative voting, downsizing the board may decrease a
minority shareholder’s chances of electing a director. |
||
By increasing the size of the board, management can make it more difficult for
dissidents to gain control of the board. Fixing the size of the board also prevents a
reduction in the board size as a means to oust independent directors or those who
cause friction within an otherwise homogenous board. |
||
Shareholder Rights Plan (Poison Pills) |
THE FUNDS will generally vote for proposals that request a company to submit its
poison pill for shareholder ratification.
|
FOR | |
THE FUNDS will withhold votes from all directors (except for new nominees) if the
company has adopted or renewed a poison pill without shareholder approval since the
company’s last annual meeting, does not put the pill to a vote at the current annual
meeting, and does not have a requirement or does not commit to put the pill to
shareholder vote within 12 months. In addition, THE FUNDS will withhold votes on all
directors at any company that responds to the majority of the shareholders voting by
putting the poison pill to a shareholder vote with a recommendation other than to
eliminate the pill.
|
WITHHOLD | |
Alternatively, THE FUNDS will analyze proposals to redeem a company’s poison pill, or
requesting the ratification of a poison pill on a case-by-case basis.
|
CASE-BY-CASE | |
Poison pills are one of the most potent anti-takeover measures and are generally
adopted by boards without shareholder approval. These plans harm shareholder value
and entrench management by deterring stock acquisition offers that are not favored by
the board. |
||
Fair Price Provisions |
||
THE FUNDS will consider fair price provisions on a case-by-case basis, evaluating
factors such as the vote required to approve the proposed mechanism, the vote
required to approve the proposed acquisition, the vote required to repeal the fair
price provision, and the mechanism for determining the fair price.
|
CASE-BY-CASE | |
THE FUNDS will vote against fair price provisions with shareholder vote requirements
of 75% or more of disinterested shares.
|
AGAINST | |
Greenmail |
||
THE FUNDS will generally vote in favor of proposals limiting the corporation’s
authority to purchase shares of common stock (or other outstanding securities) from a
holder of a stated interest (5% or more) at a premium unless the same offer is made
to all shareholders. These are known as “anti-greenmail” provisions. Greenmail
discriminates against rank-and-file shareholders and may have an adverse effect on
corporate image.
|
FOR | |
If the proposal is bundled with other charter or bylaw amendments, THE FUNDS will
analyze such proposals on a case-by-case basis. In addition, THE FUNDS will analyze
restructurings that involve the payment of pale greenmail on a case-by-case basis.
|
CASE-BY-CASE | |
Voting Rights |
||
THE FUNDS will vote for proposals that seek to maintain or convert to a one-share,
one-vote capital structure as such a principle ensures that management is accountable
to all the company’s owners.
|
FOR | |
Alternatively, THE FUNDS will vote against any proposals to cap the number of votes a
shareholder is entitled to. Any measure that places a ceiling on voting may entrench
management and lessen its interest in maximizing shareholder value.
|
AGAINST | |
Dual Class/Multiple-Voting Stock |
||
THE FUNDS will vote against proposals that authorize, amend or increase dual class or
multiple-voting stock which may be used in exchanges or recapitalizations. Dual class
or multiple-voting stock carry unequal voting rights, which differ from those of the
broadly traded class of common stock.
|
AGAINST | |
Alternatively, THE FUNDS will vote for the elimination of dual class or
multiple-voting stock, which carry different rights than the common stock.
|
FOR | |
Supermajority Vote Provisions |
||
THE FUNDS will generally consider on a case-by-case basis proposals to increase the
shareholder vote necessary to approve mergers, acquisitions, sales of assets etc. and
to amend the corporation’s charter or by-laws. The factors considered are those
specified in the proxy guidelines.
|
CASE-BY-CASE |
However, a supermajority requirement of 75% or more is abusive and THE FUNDS will
vote against proposals that provide for them.
|
AGAINST | |
Supermajority vote provisions require voting approval in excess of a simple majority
of the outstanding shares for a proposal. Companies may include supermajority lock-in
provisions, which occur when changes are made to a corporation’s governing documents,
and once approved, a supermajority vote is required to amend or repeal the changes. |
||
Confidential Voting |
||
THE FUNDS will vote for proposals to adopt confidential voting.
|
FOR | |
Vote Tabulations |
||
THE FUNDS will vote against proposals asking corporations to refrain from counting
abstentions and broker non-votes in their vote tabulations and to eliminate the
company’s discretion to vote unmarked proxy ballots. Vote counting procedures are
determined by a number of different standards, including state law, the federal proxy
rules, internal corporate policies, and mandates of the various stock exchanges.
|
AGAINST | |
Equal Access to the Proxy |
||
THE FUNDS will evaluate Shareholder proposals requiring companies to give
shareholders access to the proxy ballot for the purpose of nominating board members,
on a case-by-case basis taking into account the ownership threshold proposed in the
resolution and the proponent’s rationale for the proposal at the targeted company in
terms of board and director conduct.
|
CASE-BY-CASE | |
Disclosure of Information |
||
THE FUNDS will vote against shareholder proposals requesting fuller disclosure of
company policies, plans, or business practices. Such proposals rarely enhance
shareholder return and in many cases would require disclosure of confidential
business information.
|
AGAINST | |
Annual Meetings |
||
THE FUNDS will vote for proposals to amend procedures or change date or location of
the annual meeting. Decisions as to procedures, dates or locations of meetings are
best placed with management.
|
FOR | |
Alternatively, THE FUNDS will vote against proposals from shareholders calling for a
change in the location or date of annual meetings as no date or location proposed
will be acceptable to all shareholders.
|
AGAINST | |
THE FUNDS will generally vote in favor of proposals to reduce the quorum necessary
for shareholders’ meetings, subject to a minimum of a simple majority of the
company’s outstanding voting shares.
|
FOR | |
Shareholder Advisory Committees/Independent Inspectors |
||
THE FUNDS will vote against proposals seeking to establish shareholder advisory
committees or independent inspectors. The existence of such bodies dilutes the
responsibility of the board for managing the affairs of the corporation.
|
AGAINST | |
Technical Amendments to the Charter of Bylaws |
||
THE FUNDS will generally vote in favor of charter and bylaw amendments proposed
solely to conform to modern business practices, for simplification, or to comply with
what management’s counsel interprets as applicable law.
|
FOR | |
However, amendments that have a material effect on shareholder’s rights will be
considered on a case-by-case basis.
|
CASE-BY-CASE | |
Bundled Proposals |
||
THE FUNDS will vote for bundled or “conditional” proxy proposals on a case-by-case
basis, as THE FUNDS will examine the benefits and costs of the packaged items, and
determine if the effect of the conditioned items are in the best interests of
shareholders.
|
CASE-BY-CASE | |
Common Stock Authorizations/Reverse Stock Splits/Forward Stock Splits |
THE FUNDS will follow the Risk Metrics capital structure model in evaluating
requested increases in authorized common stock. In addition, even if capital requests
of less than or equal to 300% of outstanding shares fail the calculated allowable
cap, THE FUNDS will evaluate the request on a case-by-case basis, potentially voting
for the proposal based on the company’s performance and whether the company’s ongoing
use of shares has shown prudence. Further, the company should identify what the stock
increases are to be used for, i.e. a proposed stock split, issuance of shares for
acquisitions, or for general business purposes.
|
CASE-BY-CASE | |
Also to be considered is whether the purpose of the proposed increase is to
strengthen takeover defenses, in which case THE FUNDS will vote against the proposal.
Such increases give management too much power and are beyond what a company would
normally need during the course of a year. They may also allow management to freely
place the shares with an allied institution or set the terms and prices of the new
shares.
|
AGAINST | |
For reverse stock splits, THE FUNDS will generally vote for proposals to implement
the split provided the number of authorized common shares is reduced to a level that
does not represent an unreasonably large increase in authorized but unissued shares.
The failure to reduce authorized shares proportionally to any reverse split has
potential adverse anti-takeover consequences. However, such circumstances may be
warranted if delisting of the company’s stock is imminent and would result in greater
harm to shareholders than the excessive share authorization.
|
FOR | |
THE FUNDS will evaluate “Going Dark” transactions, which allow listed companies to
de-list and terminate the registration of their common stock on a case-by-case basis,
determining whether the transaction enhances shareholder value.
|
CASE-BY-CASE | |
THE FUNDS will generally vote in favor of forward stock splits.
|
FOR | |
Dividends |
||
THE FUNDS will vote for proposals to allocate income and set dividends.
|
FOR | |
THE FUNDS will also vote for proposals that authorize a dividend reinvestment program
as it allows investors to receive additional stock in lieu of a cash dividend.
|
FOR | |
However, if a proposal for a special bonus dividend is made that specifically rewards
a certain class of shareholders over another, THE FUNDS will vote against the
proposal.
|
AGAINST | |
THE FUNDS will also vote against proposals from shareholders requesting management to
redistribute profits or restructure investments. Management is best placed to
determine how to allocate corporate earnings or set dividends.
|
AGAINST | |
In addition, THE FUNDS will vote for proposals to set director fees.
|
FOR | |
Reduce the Par Value of the Common Stock |
||
THE FUNDS will vote for proposals to reduce the par value of common stock.
|
FOR | |
Preferred Stock Authorization |
||
THE FUNDS will generally vote for proposals to create preferred stock in cases where
the company expressly states that the stock will not be used as a takeover defense or
carry superior voting rights, or where the stock may be used to consummate beneficial
acquisitions, combinations or financings.
|
FOR | |
Alternatively, THE FUNDS will vote against proposals to authorize or issue preferred
stock if the board has asked for the unlimited right to set the terms and conditions
for the stock and may issue it for anti-takeover purposes without shareholder
approval (blank check preferred stock).
|
AGAINST | |
In addition, THE FUNDS will vote against proposals to issue preferred stock if the
shares to be used have voting rights greater than those available to other
shareholders.
|
AGAINST | |
THE FUNDS will vote for proposals to require shareholder approval of blank check
preferred stock issues for other than general corporate purposes (white squire
placements).
|
FOR |
Finally, THE FUNDS will consider on a case-by-case basis proposals to modify the
rights of preferred shareholders and to increase or decrease the dividend rate of
preferred stock.
|
CASE-BY-CASE | |
Reclassification of Shares |
||
THE FUNDS will consider proposals to reclassify a specified class or series of shares
on a case-by-case basis.
|
CASE-BY-CASE | |
Preemptive Rights |
||
THE FUNDS will generally vote for proposals to eliminate preemptive rights.
Preemptive rights are unnecessary to protect shareholder interests due to the size of
most modern companies, the number of investors and the liquidity of trading.
|
FOR | |
Share Repurchase Plans |
||
THE FUNDS will vote for share repurchase plans, unless:
|
FOR | |
• there is clear evidence of past abuse of the authority; or
|
AGAINST | |
• the plan contains no safeguards against selective buy-backs.
|
AGAINST | |
Corporate stock repurchases are a legitimate use of corporate funds and can add to
long-term shareholder returns. |
||
Executive and Director Compensation Plans |
||
THE FUNDS will analyze on a case-by-case basis proposals on executive or director
compensation plans, with the view that viable compensation programs reward the
creation of stockholder wealth by having high payout sensitivity to increases in
shareholder value. Such proposals may seek shareholder approval to adopt a new plan,
or to increase shares reserved for an existing plan.
|
CASE-BY-CASE | |
THE FUNDS will review the potential cost and dilutive effect of the plan. After
determining how much the plan will cost, Risk Metrics evaluates whether the cost is
reasonable by comparing the cost to an allowable cap. The allowable cap is
industry-specific, market cap-base, and pegged to the average amount paid by
companies performing in the top quartile of their peer groups. If the proposed cost
is below the allowable cap, THE FUNDS will vote for the plan. Risk Metrics will also
apply a pay for performance overlay in assessing equity-based compensation plans for
Russell 3000 companies.
|
FOR | |
If the proposed cost is above the allowable cap, THE FUNDS will vote against the plan.
|
AGAINST | |
Among the plan features that may result in a vote against the plan are:
|
AGAINST | |
• plan administrators are given the authority to reprice or replace underwater
options; repricing guidelines will conform to changes in the NYSE and NASDAQ listing
rules. |
||
THE FUNDS will vote against equity plans that have high average three-year burn rate.
(The burn rate is calculated as the total number of stock awards and stock options
granted any given year divided by the number of common shares outstanding.) THE FUNDS
will define a high average three-year burn rate as the following: The company’s most
recent three-year burn rate exceeds one standard deviation of its four-digit GICS
peer group segmented by Russell 3000 index and non-Russell 3000 index; and the
company’s most recent three-year burn rate exceeds 2% of common shares outstanding.
For companies that grant both full value awards and stock options to their employees,
THE FUNDS shall apply a premium on full value awards for the past three fiscal years.
|
AGAINST | |
Even if the equity plan fails the above burn rate, THE FUNDS will vote for the plan
if the company commits in a public filing to a three-year average burn rate equal to
its GICS group burn rate mean plus one standard deviation. If the company fails to
fulfill its burn rate commitment, THE FUNDS will consider withholding from the
members of the compensation committee.
|
FOR | |
THE FUNDS will calculate a higher award value for awards that have Dividend
Equivalent Rights (DER’s) associated with them.
|
CASE-BY-CASE |
THE FUNDS will generally vote for shareholder proposals requiring performance-based
stock options unless the proposal is overly restrictive or the company demonstrates
that it is using a substantial portion of performance-based awards for its top
executives.
|
FOR | |
THE FUNDS will vote for shareholder proposals asking the company to expense stock
options, as a result of the FASB final rule on expensing stock options.
|
FOR | |
THE FUNDS will generally vote for shareholder proposals to exclude pension fund
income in the calculation of earnings used in determining executive
bonuses/compensation.
|
FOR | |
THE FUNDS will withhold votes from compensation committee members if they fail to
submit one-time transferable stock options (TSO’s) to shareholders for approval.
|
WITHHOLD | |
THE FUNDS will generally vote for TSO awards within a new equity plan if the total
cost of the equity plan is less than the company’s allowable cap.
|
FOR | |
THE FUNDS will generally vote against shareholder proposals to ban future stock
option grants to executives. This may be supportable in extreme cases where a company
is a serial repricer, has a huge overhang, or has highly dilutive, broad-based
(non-approved) plans and is not acting to correct the situation.
|
AGAINST | |
THE FUNDS will evaluate shareholder proposals asking companies to adopt holding
periods for their executives on a case-by-case basis taking into consideration the
company’s current holding period or officer share ownership requirements, as well as
actual officer stock ownership in the company.
|
CASE-BY-CASE | |
For certain OBRA-related proposals, THE FUNDS will vote for plan provisions that (a)
place a cap on annual grants or amend administrative features, and (b) add
performance criteria to existing compensation plans to comply with the provisions of
Section 162(m) of the Internal Revenue Code.
|
FOR | |
In addition, director compensation plans may also include stock plans that provide
directors with the option of taking all or a portion of their cash compensation in
the form of stock. THE FUNDS will consider these plans based on their voting power
dilution.
|
CASE-BY-CASE | |
THE FUNDS will generally vote for retirement plans for directors.
|
FOR | |
THE FUNDS will evaluate compensation proposals (Tax Havens) requesting share option
schemes or amending an existing share option scheme on a case-by-case basis.
|
CASE-BY-CASE | |
Stock options align management interests with those of shareholders by motivating
executives to maintain stock price appreciation. Stock options, however, may harm
shareholders by diluting each owner’s interest. In addition, exercising options can
shift the balance of voting power by increasing executive ownership. |
||
Bonus Plans |
||
THE FUNDS will vote for proposals to adopt annual or long-term cash or cash-and-stock
bonus plans on a case-by-case basis. These plans enable companies qualify for a tax
deduction under the provisions of Section 162(m) of the IRC. Payouts under these
plans may either be in cash or stock and are usually tied to the attainment of
certain financial or other performance goals. THE FUNDS will consider whether the
plan is comparable to plans adopted by companies of similar size in the company’s
industry and whether it is justified by the company’s performance.
|
CASE-BY-CASE | |
Deferred Compensation Plans |
||
THE FUNDS will generally vote for proposals to adopt or amend deferred compensation
plans as they allow the compensation committee to tailor the plan to the needs of the
executives or board of directors, unless
|
FOR | |
• the proposal is embedded in an executive or director compensation plan that is
contrary to guidelines
|
AGAINST | |
Disclosure on Executive or Director Compensation |
||
Cap or Restrict Executive or Director Compensation |
THE FUNDS will generally vote for shareholder proposals requiring companies to report
on their executive retirement benefits (deferred compensation, split-dollar life
insurance, SERPs, and pension benefits.
|
FOR | |
THE FUNDS will generally vote for shareholder proposals requesting to put
extraordinary benefits contained in SERP agreements to a shareholder vote, unless the
company’s executive pension plans do not contain excessive benefits beyond what is
offered under employee-wide plans.
|
FOR | |
THE FUNDS will generally vote against proposals that seek to limit executive and
director pay.
|
AGAINST | |
Golden and Tin Parachutes |
||
THE FUNDS will vote for proposals that seek shareholder ratification of golden or tin
parachutes as shareholders should have the opportunity to approve or disapprove of
these severance agreements.
|
FOR | |
Alternatively, THE FUNDS will examine on a case-by-case basis proposals that seek to
ratify or cancel golden or tin parachutes. Effective parachutes may encourage
management to consider takeover bids more fully and may also enhance employee morale
and productivity. Among the arrangements that will be considered on their merits are:
|
CASE-BY-CASE | |
• arrangements guaranteeing key employees continuation of base salary for more than
three years or lump sum payment of more than three times base salary plus retirement
benefits; |
||
• guarantees of benefits if a key employee voluntarily terminates; |
||
• guarantees of benefits to employees lower than very senior management; and |
||
• indemnification of liability for excise taxes. |
||
By contrast, THE FUNDS will vote against proposals that would guarantee benefits in a
management-led buyout.
|
AGAINST | |
Reincorporation |
||
THE FUNDS will evaluate a change in a company’s state of incorporation on a
case-by-case basis. THE FUNDS will analyze the valid reasons for the proposed move,
including restructuring efforts, merger agreements, and tax or incorporation fee
savings. THE FUNDS will also analyze proposed changes to the company charter and
differences between the states’ corporate governance laws.
|
CASE-BY-CASE | |
States have adopted various statutes intended to encourage companies to incorporate
in the state. These may include state takeover statutes, control share acquisition
statutes, control share cash-out statutes, freezeout provisions, fair price
provisions, and disgorgement provisions. THE FUNDS will examine reincorporations on a
case-by-case in light of these statutes and in light of the corporate governance
features the company has adopted to determine whether the reincorporation is in
shareholders’ best interests.
|
CASE-BY-CASE | |
In addition, THE FUNDS will also examine poison pill endorsements, severance pay and
labor contract provisions, and anti-greenmail provisions in the context of a state’s
corporate governance laws on a case-by-case basis.
|
CASE-BY-CASE | |
THE FUNDS will evaluate shareholder proposals requiring offshore companies to
reincorporate into the United States on a case-by-case basis.
|
CASE-BY-CASE | |
Reincorporation proposals may have considerable implications for shareholders,
affecting the company’s takeover defenses and possibly its corporate structure and
rules of governance. |
||
Stakeholder Laws |
||
THE FUNDS will vote against resolutions that would allow the Board to consider
stakeholder interests (local communities, employees, suppliers, creditors, etc.) when
faced with a takeover offer.
|
AGAINST |
Similarly, THE FUNDS will vote for proposals to opt out of stakeholder laws, which
permit directors, when taking action, to weight the interests of constituencies other
than shareholders in the process of corporate decision-making. Such laws allow
directors to consider nearly any factor they deem relevant in discharging their
duties.
|
FOR | |
Mergers/Acquisitions and Corporate Restructurings |
||
THE FUNDS will consider proposals on mergers and acquisitions on a case-by-case
basis. THE FUNDS will determine if the transaction is in the best economic interests
of the shareholders. THE FUNDS will take into account the following factors:
|
CASE-BY-CASE | |
• anticipated financial and operating benefits; |
||
• offer price (cost versus premium); |
||
• prospects for the combined companies; |
||
• how the deal was negotiated; |
||
• changes in corporate governance and their impact on shareholder rights. |
||
In addition, THE FUNDS will also consider whether current shareholders would control
a minority of the combined company’s outstanding voting power, and whether a
reputable financial advisor was retained in order to ensure the protection of
shareholders’ interests.
|
CASE-BY-CASE | |
On all other business transactions, i.e. corporate restructuring, spin-offs, asset
sales, liquidations, and restructurings, THE FUNDS will analyze such proposals on a
case-by-case basis and utilize the majority of the above factors in determining what
is in the best interests of shareholders. Specifically, for liquidations, the cost
versus premium factor may not be applicable, but THE FUNDS may also review the
compensation plan for executives managing the liquidation,
|
CASE-BY-CASE | |
Appraisal Rights |
||
THE FUNDS will vote for proposals to restore, or provide shareholders with rights of
appraisal.
|
FOR | |
Rights of appraisal provide shareholders who are not satisfied with the terms of
certain corporate transactions (such as mergers) the right to demand a judicial
review in order to determine the fair value of their shares. |
||
Mutual Fund Proxies |
||
THE FUNDS will vote mutual fund proxies on a case-by-case basis.
|
CASE-BY-CASE | |
Proposals may include, and are not limited to, the following issues: |
||
• eliminating the need for annual meetings of mutual fund shareholders; |
||
• entering into or extending investment advisory agreements and management contracts; |
||
• permitting securities lending and participation in repurchase agreements; |
||
• changing fees and expenses; and |
||
• changing investment policies. |
||
An investment advisory agreement is an agreement between a mutual fund and its
financial advisor under which the financial advisor provides investment advice to the
fund in return for a fee based on the fund’s net asset size. Most agreements require
that the particular fund pay the advisor a fee constituting a small percentage of the
fund’s average net daily assets. In exchange for this consideration, the investment
advisor manages the fund’s account, furnishes investment advice, and provides office
space and facilities to the fund. A new investment advisory agreement may be
necessitated by the merger of the advisor or the advisor’s corporate parent. |
||
Fundamental investment restrictions are limitations within a fund’s articles of
incorporation that limit the investment practices of the particular fund. As
fundamental, such restrictions may only be amended or eliminated with shareholder
approval. Non-fundamental investment restrictions may be altered by action of the
board of trustees. |
||
Distribution agreements are agreements authorized by guidelines established under the
Investment Company Act of 1940 and, in particular, Rule 12b-1 thereunder, between a
fund and its distributor, which provide that the distributor is paid a monthly fee to
promote the sale of the fund’s shares. |
||
Reorganizations of funds may include the issuance of shares for an acquisition of a
fund, or the merger of one fund into another for purposes of consolidation. |
||
The mutual fund industry is one of the most highly regulated industries, as it is
subject to: individual state law under which the company is formed; the federal
Securities Act of 1933; the federal Securities Exchange Act of 1934; and the federal
Investment Company Act of 1940. |
||
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
PORTFOLIO MANAGERS
PORTFOLIO MANAGERS
Timothy O’Brien, CFA is a co-founder and principal at Crow Point Partners, LLC (“Crow Point”) since
2006. Prior to founding Crow Point, he was a Senior Portfolio Manager and Managing Director at
EIMC.
Timothy M. Stevenson, CFA, CMT Mr. Stevenson has been with Wells Capital Management or one of its
predecessor firms since 1994.
OTHER FUNDS AND ACCOUNTS MANAGED
There were no other registered investment companies and other pooled investment vehicles and
accounts managed by the portfolio manager of the Fund as of the Fund’s most recent period ended
October 31, 2010.
MATERIAL CONFLICTS OF INTEREST
The Portfolio Managers face inherent conflicts of interest in their day-to-day management of the
Funds and other accounts because the Funds may have different investment objectives, strategies and
risk profiles than the other accounts managed by the Portfolio Managers. For instance, to the
extent that the Portfolio Managers manage accounts with different investment strategies than the
Funds, they may from time to time be inclined to purchase securities, including initial public
offerings, for one account but not for a Fund. Additionally, some of the accounts managed by the
Portfolio Managers may have different fee structures, including performance fees, which are or have
the potential to be higher or lower, in some cases significantly higher or lower, than the fees
paid by the Funds. The differences in fee structures may provide an incentive to the Portfolio
Managers to allocate more favorable trades to the higher-paying accounts.
To minimize the effects of these inherent conflicts of interest, the Sub-Adviser has adopted and
implemented policies and procedures, including brokerage and trade allocation policies and
procedures, that it believes address the potential conflicts associated with managing portfolios
for multiple clients and ensure that all clients are treated fairly and equitably. Additionally,
the Sub-Adviser minimizes inherent conflicts of interest by assigning the Portfolio Managers to
accounts having similar objectives. Accordingly, security block purchases are allocated to all
accounts with similar objectives in proportionate weightings. Furthermore, the Sub-Adviser has
adopted a Code of Ethics under Rule 17j-1 of the 1940 Act and Rule 204A-1 under the Investment
Advisers Act of 1940 (the “Advisers Act”) to address potential conflicts associated with managing
the Funds and any personal accounts the Portfolio Managers may maintain.
Wells Capital Management
Wells Capital Management’s Portfolio Managers often provide investment management for separate
accounts advised in the same or similar investment style as that provided to mutual funds. While
management of multiple accounts could potentially lead to conflicts of interest over various issues
such as trade allocation, fee disparities and research acquisition, Wells Capital Management has
implemented policies and procedures for the express purpose of ensuring that clients are treated
fairly and that potential conflicts of interest are minimized.
Crow Point.
Crow Point manages other investment vehicles, including some that may have investment objectives
and strategies similar to the Fund’s. The management of multiple funds and other accounts may
require the portfolio manager to devote less than all of his or her time to the Fund, particularly
if the other funds and accounts have different objectives, benchmarks and time horizons. The
portfolio manager may also be required to allocate his or her investment ideas across multiple
funds and accounts. In addition, if a portfolio manager identifies a limited investment
opportunity, such as an initial public offering, that may be suitable for more
than one fund or
other account, the Fund may not be able to take full advantage of that opportunity due to, for
example, an allocation of that investment across all eligible funds and accounts. Further, security
purchase and sale orders for multiple accounts often are aggregated for purpose of execution.
Although such aggregation generally benefits clients, it may cause the price or brokerage costs to
be less favorable to a particular client than if similar transactions were not being executed
concurrently for other accounts. It may also happen that the Fund’s advisor or subadvisor will
determine that it would be in the best interest, and consistent with the investment policies, of
another account to sell a security (including by means of a short sale) that the Fund
holds long, potentially resulting in a decrease in the market value of the security held by the
Fund.
The structure of a portfolio manager’s or an investment advisor’s compensation may create an
incentive for the portfolio manager or investment advisor to favor accounts whose performance has a
greater impact on such compensation. The portfolio manager may, for example, have an incentive to
allocate favorable or limited opportunity investments or structure the timing of investments to
favor such accounts. Similarly, if a portfolio manager holds a larger personal investment in one
fund than he or she does in another, the portfolio manager may have an incentive to favor the fund
in which he or she holds a larger stake.
In general, Crow Point has policies and procedures that attempt to address the various potential
conflicts of interest described above. However, there is no guarantee that such procedures will
detect or address each and every situation where a conflict arises.
All employees of Crow Point are bound by the company’s Code of Ethics and compliance policies and
procedures. Crow Point’s chief compliance officer monitors and reviews compliance regularly. Crow
Point’s Code of Ethics and compliance procedures
have been reviewed and accepted by EIMC. In addition, side-by-side trading rules have been agreed
between EIMC and Crow Point as part of existing sub-advisory arrangements which are intended to
ensure that shareholders of the sub-advised Evergreen funds are treated equitably by Crow Point
with respect to investments, trading and allocations.
COMPENSATION
The Portfolio Managers were compensated by their employing sub-adviser from the fees the Adviser
paid the Sub-Adviser using the following compensation structure:
Wells Capital Management Compensation. The compensation structure for Wells Capital Management’s
Portfolio Managers includes a competitive fixed base salary plus variable incentives (Wells Capital
Management utilizes investment management compensation surveys as confirmation). Incentive bonuses
are typically tied to pretax relative investment performance of all accounts under his or her
management within acceptable risk parameters. Relative investment performance is generally
evaluated for 1, 3, and 5 year performance results, with a predominant weighting on the 3- and 5-
year time periods, versus the relevant benchmarks and/or peer groups consistent with the investment
style. This evaluation takes into account relative performance of the accounts to each account’s
individual benchmark and/or the relative composite performance of all accounts to one or more
relevant benchmarks consistent with the overall investment style. In the case of each Fund, the
benchmark(s) against which the performance of the Fund’s portfolio may be compared for these
purposes generally are indicated in the Performance” sections of the Prospectuses.
Crow Point. Portfolio managers at Crow Point are paid a fixed salary and participate in the profits
of the firm in proportion to their equity ownership in the firm.
BENEFICIAL OWNERSHIP OF THE FUND
The following table shows for each Portfolio Manager the dollar value of the Fund beneficially
owned by the Portfolio Manager as of October 31, 2010:
| Wells Fargo Advantage Global Dividend Opportunity Fund | ||
Timothy O’Brien
|
$50,001 — $100,000 | |
Timothy Stevenson
|
none | |
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASES
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Governance Committee (the “Committee”) of the Board of Trustees of the registrant (the “Trust”)
has adopted procedures by which a shareholder of any series of the Trust may submit properly a
nominee recommendation for the Committee’s consideration.
The shareholder must submit any such recommendation (a “Shareholder Recommendation”) in writing to
the Trust, to the attention of the Trust’s Secretary, at the address of the principal executive
offices of the Trust.
The Shareholder Recommendation must be delivered to, or mailed and received at, the principal
executive offices of the Trust not less than forty-five (45) calendar days nor more than
seventy-five (75) calendar days prior to the date of the Committee meeting at which the nominee
would be considered.
The Shareholder Recommendation must include: (i) a statement in writing setting forth (A) the name,
age, date of birth, business address, residence address and nationality of the person recommended
by the shareholder (the “candidate”); (B) the series (and, if applicable, class) and number of all
shares of the Trust 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) and (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 Trust); (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 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 Trust (as defined in the Investment Company Act of 1940, as amended)
and, if not an “interested person,” information regarding the candidate that will be sufficient for
the Trust 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 Trust’s books; (iv) the series (and, if applicable, class) and number of all
shares of the Trust 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 person or 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 interview in person and furnish such other information as it may
reasonably require or deem necessary to determine the eligibility of such candidate to serve as a
Trustee of the Trust.
ITEM 11. CONTROLS AND PROCEDURES
(a) The President and Treasurer have concluded that the Wells Fargo Advantage Global Dividend
Opportunity Fund (the “Trust”) disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940) provide reasonable assurances that material information
relating to the Trust is made known to them by the appropriate persons based on their evaluation of
these controls and procedures as of a date within 90 days of the filing of this report.
(b) There were no significant changes in the Trust’s internal controls over financial reporting (as
defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second
quarter of the period covered by this report that materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial reporting.
ITEM 12. EXHIBITS
(a)(1) Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as Exhibit 10a.
(a)(2) Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR
270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR
270.30a-2(b)) is filed and attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company
Act of 1940, the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
| Wells Fargo Advantage Global Dividend Opportunity Fund | ||||
| By: | ||||
| /s/ Karla M. Rabusch | ||||
| Karla M. Rabusch | ||||
| President | ||||
| Date: December 27, 2010 | ||||
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company
Act of 1940, this report has been signed below by the following persons on behalf of the registrant
and in the capacities and on the date indicated.
| By: | ||||
| /s/ Karla M. Rabusch | ||||
| Karla M. Rabusch | ||||
| President | ||||
| Date: December 27, 2010 | ||||
| By: | ||||
| /s/ Kasey L. Phillips | ||||
| Kasey L. Phillips | ||||
| Treasurer | ||||
| Date: December 27, 2010 |