As filed with the Securities and Exchange Commission on March 19, 2013.
===============================================================================
1933 Act File No. 333-141457
1940 Act File No. 811-22039
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement.
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-12
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------------------------
(4) Date Filed:
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
FIRST TRUST ENERGY INCOME AND GROWTH FUND
FIRST TRUST ENHANCED EQUITY INCOME FUND
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
FIRST TRUST MORTGAGE INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND II
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST ACTIVE DIVIDEND INCOME FUND
FIRST TRUST HIGH INCOME LONG/SHORT FUND
FIRST TRUST ENERGY INFRASTRUCTURE FUND
120 EAST LIBERTY DRIVE, SUITE 400
WHEATON, ILLINOIS 60187
March 15, 2013
Dear Shareholder:
The accompanying materials relate to the Joint Annual Meetings of
Shareholders (collectively, the "Meeting") of Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund, First Trust Energy Income and
Growth Fund, First Trust Enhanced Equity Income Fund, First Trust/Aberdeen
Global Opportunity Income Fund, First Trust Mortgage Income Fund, First Trust
Strategic High Income Fund II, First Trust/Aberdeen Emerging Opportunity Fund,
First Trust Specialty Finance and Financial Opportunities Fund, First Trust
Active Dividend Income Fund, First Trust High Income Long/Short Fund and First
Trust Energy Infrastructure Fund (each a "Fund" and collectively the "Funds").
The Meeting will be held at the offices of First Trust Advisors L.P., 120 East
Liberty Drive, Suite 400, Wheaton, Illinois 60187, on Wednesday, April 17, 2013,
at 4:00 p.m. Central Time.
At the Meeting, you will be asked to vote on a proposal to elect two of
the Trustees of your Fund (the "Proposal") and to transact such other business
as may properly come before the Meeting and any adjournments or postponements
thereof. The Proposal is described in the accompanying Notice of Joint Annual
Meetings of Shareholders and Joint Proxy Statement.
YOUR PARTICIPATION AT THE MEETING IS VERY IMPORTANT. If you cannot attend
the Meeting, you may participate by proxy. As a Shareholder, you cast one vote
for each share of a Fund that you own and a proportionate fractional vote for
any fraction of a share that you own. Please take a few moments to read the
enclosed materials and then cast your vote on the enclosed proxy card.
VOTING TAKES ONLY A FEW MINUTES. EACH SHAREHOLDER'S VOTE IS IMPORTANT.
YOUR PROMPT RESPONSE WILL BE MUCH APPRECIATED.
After you have voted on the Proposal, please be sure to sign your proxy
card and return it in the enclosed postage-paid envelope.
We appreciate your participation in this important Meeting.
Thank you.
Sincerely,
/s/ James A. Bowen
--------------------------------
James A. Bowen
Chairman of the Board
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance
to you and will avoid the time and expense to your Fund involved in validating
your vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration.
3. All Other Accounts: The capacity of the individual signing the proxy
should be indicated unless it is reflected in the form of registration. For
example:
REGISTRATION VALID SIGNATURE
CORPORATE ACCOUNTS
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr., UGMA John B. Smith
(2) John B. Smith John B. Smith, Jr., Executor
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
FIRST TRUST ENERGY INCOME AND GROWTH FUND
FIRST TRUST ENHANCED EQUITY INCOME FUND
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
FIRST TRUST MORTGAGE INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND II
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST ACTIVE DIVIDEND INCOME FUND
FIRST TRUST HIGH INCOME LONG/SHORT FUND
FIRST TRUST ENERGY INFRASTRUCTURE FUND
120 EAST LIBERTY DRIVE, SUITE 400
WHEATON, ILLINOIS 60187
NOTICE OF JOINT ANNUAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON APRIL 17, 2013
March 15, 2013
To the Shareholders of the above Funds:
Notice is hereby given that the Joint Annual Meetings of Shareholders
(collectively, the "Meeting") of Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund, First Trust Energy Income and
Growth Fund, First Trust Enhanced Equity Income Fund, First Trust/Aberdeen
Global Opportunity Income Fund, First Trust Mortgage Income Fund, First Trust
Strategic High Income Fund II, First Trust/Aberdeen Emerging Opportunity Fund,
First Trust Specialty Finance and Financial Opportunities Fund, First Trust
Active Dividend Income Fund, First Trust High Income Long/Short Fund and First
Trust Energy Infrastructure Fund (each a "Fund" and collectively the "Funds"),
each a Massachusetts business trust, will be held at the offices of First Trust
Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, on
Wednesday, April 17, 2013, at 4:00 p.m. Central Time, for the following
purposes:
1. To elect two Trustees (the Class III Trustees) of each Fund.
2. To transact such other business as may properly come before the Meeting
or any adjournments or postponements thereof.
The Board of Trustees has fixed the close of business on January 31, 2013
as the record date for the determination of shareholders entitled to notice of
and to vote at the Meeting and any adjournments or postponements thereof.
By Order of the Board of Trustees,
/s/ W. Scott Jardine
----------------------------------------
W. Scott Jardine
Secretary
--------------------------------------------------------------------------------
SHAREHOLDERS ARE REQUESTED TO PROMPTLY COMPLETE, SIGN, DATE AND RETURN THE PROXY
CARD IN THE ENCLOSED ENVELOPE WHICH DOES NOT REQUIRE POSTAGE IF MAILED IN THE
CONTINENTAL UNITED STATES. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE
SET FORTH ON THE INSIDE COVER OF THIS PROXY STATEMENT.
--------------------------------------------------------------------------------
This page intentionally left blank.
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
FIRST TRUST ENERGY INCOME AND GROWTH FUND
FIRST TRUST ENHANCED EQUITY INCOME FUND
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
FIRST TRUST MORTGAGE INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND II
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST ACTIVE DIVIDEND INCOME FUND
FIRST TRUST HIGH INCOME LONG/SHORT FUND
FIRST TRUST ENERGY INFRASTRUCTURE FUND
JOINT ANNUAL MEETINGS OF SHAREHOLDERS
APRIL 17, 2013
120 EAST LIBERTY DRIVE, SUITE 400
WHEATON, ILLINOIS 60187
JOINT PROXY STATEMENT
MARCH 15, 2013
THIS JOINT PROXY STATEMENT AND THE ENCLOSED PROXY CARD WILL FIRST BE
MAILED TO SHAREHOLDERS ON OR ABOUT MARCH 22, 2013.
This Joint Proxy Statement is furnished in connection with the
solicitation of proxies by the Boards of Trustees of Macquarie/First Trust
Global Infrastructure/Utilities Dividend & Income Fund, First Trust Energy
Income and Growth Fund, First Trust Enhanced Equity Income Fund, First
Trust/Aberdeen Global Opportunity Income Fund, First Trust Mortgage Income Fund,
First Trust Strategic High Income Fund II, First Trust/Aberdeen Emerging
Opportunity Fund, First Trust Specialty Finance and Financial Opportunities
Fund, First Trust Active Dividend Income Fund, First Trust High Income
Long/Short Fund and First Trust Energy Infrastructure Fund (each a "Fund" and
collectively the "Funds"), each a Massachusetts business trust, for use at the
Annual Meetings of Shareholders of the Funds to be held on Wednesday, April 17,
2013, at 4:00 p.m. Central Time, at the offices of First Trust Advisors L.P.,
120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, and at any
adjournments or postponements thereof (collectively, the "Meeting"). A Notice of
Joint Annual Meetings of Shareholders and a proxy card accompany this Joint
Proxy Statement. The Boards of Trustees of the Funds have determined that the
use of this Joint Proxy Statement is in the best interests of each Fund in light
of the same matter being considered and voted on by shareholders.
Proxy solicitations will be made primarily by mail. However, proxy
solicitations may also be made by telephone or personal interviews conducted by
officers and service providers of the Funds, including any agents or affiliates
of such service providers.
The costs incurred in connection with the preparation of this Joint Proxy
Statement and its enclosures will be paid by the Funds. The Funds will also
reimburse brokerage firms and others for their expenses in forwarding
solicitation material to the beneficial owners of Fund shares.
The close of business on January 31, 2013 has been fixed as the record
date (the "Record Date") for the determination of shareholders entitled to
notice of and to vote at the Meeting.
Each Fund has one class of shares of beneficial interest, par value $0.01
per share, known as common shares ("Shares").
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SHAREHOLDER MEETING TO BE HELD ON APRIL 17, 2013. THIS JOINT PROXY STATEMENT IS
AVAILABLE ON THE INTERNET AT HTTP://WWW.FTPORTFOLIOS.COM/LOADCONTENT/GW3DYPJZGC.
EACH FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS ARE ALSO AVAILABLE ON THE
INTERNET AT HTTP://WWW.FTPORTFOLIOS.COM. TO FIND A REPORT, SELECT YOUR FUND
UNDER THE "CLOSED-END FUNDS" TAB, SELECT THE "NEWS & LITERATURE" LINK, AND GO TO
THE "QUARTERLY/SEMI-ANNUAL OR ANNUAL REPORTS" HEADING. IN ADDITION, THE FUNDS
WILL FURNISH, WITHOUT CHARGE, COPIES OF THEIR MOST RECENT ANNUAL AND SEMI-ANNUAL
REPORTS TO ANY SHAREHOLDER UPON REQUEST. TO REQUEST A COPY, PLEASE WRITE TO
FIRST TRUST ADVISORS L.P. ("FIRST TRUST ADVISORS" OR THE "ADVISOR") AT 120 EAST
LIBERTY DRIVE, SUITE 400, WHEATON, ILLINOIS 60187, OR CALL (800) 988-5891.
YOU MAY CALL (800) 988-5891 FOR INFORMATION ON HOW TO OBTAIN DIRECTIONS TO
BE ABLE TO ATTEND THE MEETING AND VOTE IN PERSON.
In order that your Shares may be represented at the Meeting, you are
requested to:
o indicate your instructions on the proxy card;
o date and sign the proxy card;
o mail the proxy card promptly in the enclosed envelope which requires
no postage if mailed in the continental United States; and
o allow sufficient time for the proxy card to be received BY 4:00 P.M.
CENTRAL TIME, on WEDNESDAY, APRIL 17, 2013. (However, proxies
received after this date may still be voted in the event the Meeting
is adjourned or postponed to a later date.)
-2-
VOTING
As described further in the proposal, for each Fund, the affirmative vote
of a plurality of the Shares present and entitled to vote at the Meeting will be
required to elect each specified nominee as a Class III Trustee of that Fund
provided a quorum is present. Abstentions and broker non-votes will have no
effect on the approval of the proposal.
If the enclosed proxy card is properly executed and returned in time to be
voted at the Meeting, the Fund Shares represented thereby will be voted in
accordance with the instructions marked thereon, or, if no instructions are
marked thereon, will be voted in the discretion of the persons named on the
proxy card. Accordingly, unless instructions to the contrary are marked thereon,
a properly executed and returned proxy will be voted FOR the election of each of
the specified nominees as a Class III Trustee and at the discretion of the named
proxies on any other matters that may properly come before the Meeting, as
deemed appropriate. Any shareholder who has given a proxy has the right to
revoke it at any time prior to its exercise either by attending the Meeting and
voting his or her Shares in person, or by timely submitting a letter of
revocation or a later-dated proxy to the applicable Fund at its address above. A
list of shareholders entitled to notice of and to be present and to vote at the
Meeting will be available at the offices of the Funds, 120 East Liberty Drive,
Suite 400, Wheaton, Illinois 60187, for inspection by any shareholder during
regular business hours prior to the Meeting. Shareholders will need to show
valid identification and proof of Share ownership to be admitted to the Meeting
or to inspect the list of shareholders.
Under the By-Laws of each Fund, a quorum is constituted by the presence in
person or by proxy of the holders of thirty-three and one-third percent
(33-1/3%) of the voting power of the outstanding Shares entitled to vote on a
matter. For the purposes of establishing whether a quorum is present, all Shares
present and entitled to vote, including abstentions and broker non-votes (i.e.,
Shares held by brokers or nominees as to which (i) instructions have not been
received from the beneficial owners or the persons entitled to vote and (ii) the
broker or nominee does not have discretionary voting power on a particular
matter), shall be counted. Any meeting of shareholders may be postponed prior to
the meeting with notice to the shareholders entitled to vote at that meeting.
Any meeting of shareholders may, by action of the chairman of the meeting, be
adjourned to permit further solicitation of proxies without further notice with
respect to one or more matters to be considered at such meeting to a designated
time and place, whether or not a quorum is present with respect to such matter.
In addition, upon motion of the chairman of the meeting, the question of
adjournment may be submitted to a vote of the shareholders, and in that case,
any adjournment must be approved by the vote of holders of a majority of the
Shares present and entitled to vote with respect to the matter or matters
adjourned, and without further notice. Unless a proxy is otherwise limited in
this regard, any Shares present and entitled to vote at a meeting, including
broker non-votes, may, at the discretion of the proxies named therein, be voted
in favor of such an adjournment.
-3-
OUTSTANDING SHARES
On the Record Date, each Fund had the following number of Shares
outstanding:
---------------------------------------------------------------------------------------------------------------------------
TICKER SHARES
FUND SYMBOL (1) OUTSTANDING
------------------------------------------------------------------------------------------- -------------- ----------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND MFD 8,533,285
------------------------------------------------------------------------------------------- -------------- ----------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND FEN 16,539,829
------------------------------------------------------------------------------------------- -------------- ----------------
FIRST TRUST ENHANCED EQUITY INCOME FUND FFA 19,973,164
------------------------------------------------------------------------------------------- -------------- ----------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND FAM 17,400,622
------------------------------------------------------------------------------------------- -------------- ----------------
FIRST TRUST MORTGAGE INCOME FUND FMY 4,213,115
------------------------------------------------------------------------------------------- -------------- ----------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II FHY 8,458,869
------------------------------------------------------------------------------------------- -------------- ----------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND FEO 5,905,236
------------------------------------------------------------------------------------------- -------------- ----------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND FGB 14,283,015
------------------------------------------------------------------------------------------- -------------- ----------------
FIRST TRUST ACTIVE DIVIDEND INCOME FUND FAV 8,259,517
------------------------------------------------------------------------------------------- -------------- ----------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND FSD 36,056,159
------------------------------------------------------------------------------------------- -------------- ----------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND FIF 17,550,236
------------------------------------------------------------------------------------------- -------------- ----------------
1 The Shares of each of the Funds are listed on the New York Stock Exchange
("NYSE") except for the Shares of First Trust Energy Income and Growth
Fund, which are listed on the NYSE MKT LLC.
Shareholders of record on the Record Date are entitled to one vote for
each Share the shareholder owns and a proportionate fractional vote for any
fraction of a Share the shareholder owns.
To the knowledge of the Board of Trustees, as of the Record Date, no
single shareholder or "group" (as that term is used in Section 13(d) of the
Securities Exchange Act of 1934 (the "1934 Act")) beneficially owned more than
5% of any Fund's outstanding Shares, except as described in the following table.
A control person is one who owns, either directly or indirectly, more than 25%
of the voting securities of a Fund or acknowledges the existence of control. A
party that controls a Fund may be able to significantly affect the outcome of
any item presented to shareholders for approval. Information as to beneficial
ownership of Shares, including percentage of outstanding Shares beneficially
owned, is based on securities position listing reports as of the Record Date and
reports filed with the Securities and Exchange Commission ("SEC") by
shareholders. The Funds do not have any knowledge of the identity of the
ultimate beneficiaries of the Shares listed below.
-4-
BENEFICIAL OWNERSHIP OF SHARES
--------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS SHARES BENEFICIALLY % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
--------------------------------------------------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND:
--------------------------------------------------------------------------------------------------------------------------
The Bank of New York Mellon 753,396 Shares 8.83%
525 William Penn Place
Pittsburgh, PA 15259
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC
One North Jefferson Street 570,285 Shares 6.68%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
101 Hudson Street, 8th Floor 988,201 Shares 11.58%
Jersey City, NJ 07302
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
2000 Westchester Avenue 715,836 Shares 8.39%
Purchase, NY 10577
----------------------------------------------------- ------------------------------- ----------------------------------
National Financial Services, LLC
200 Liberty Street 501,313 Shares 5.87%
New York, NY 10281
----------------------------------------------------- ------------------------------- ----------------------------------
Pershing LLC
1 Pershing Plaza 607,034 Shares 7.11%
Jersey City, NJ 07399
----------------------------------------------------- ------------------------------- ----------------------------------
Robert W. Baird & Co., Inc.
777 E. Wisconsin Avenue
9th Floor 616,746 Shares 7.23%
Milwaukee, WI 53202
----------------------------------------------------- ------------------------------- ----------------------------------
Raymond James & Associates, Inc.
P.O. Box 14407 602,267 Shares 7.06%
St. Petersburg, FL 33733
----------------------------------------------------- ------------------------------- ----------------------------------
RBC Capital Markets Corporation
510 Marquette Ave. South 559,126 Shares 6.55%
Minneapolis, MN 55402
----------------------------------------------------- ------------------------------- ----------------------------------
State Street Bank and Trust Co.
1776 Heritage Drive 456,824 Shares 5.35%
North Quincy, MA 02171
--------------------------------------------------------------------------------------------------------------------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND:
------------------------------------------------------------------------------------------------------------------------
The Bank of New York Mellon 1,202,801 Shares 7.27%
525 William Penn Place
Pittsburgh, PA 15259
----------------------------------------------------- ------------------------------- ----------------------------------
Charles Schwab & Co., Inc.
2423 E. Lincoln Drive 1,090,986 Shares 6.60%
Phoenix, AZ 85016
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC
One North Jefferson Street 2,649,896 Shares 16.02%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
2000 Westchester Avenue 2,137,416 Shares 12.92%
Purchase, NY 10577
----------------------------------------------------- ------------------------------- ----------------------------------
National Financial Services, LLC
200 Liberty Street 898,860 Shares 5.43%
New York, NY 10281
----------------------------------------------------- ------------------------------- ----------------------------------
Pershing LLC
1 Pershing Plaza 937,783 Shares 5.67%
Jersey City, NJ 07399
----------------------------------------------------- ------------------------------- ----------------------------------
Robert W. Baird & Co., Inc.
777 E. Wisconsin Avenue
9th Floor 1,275,540 Shares 7.71%
Milwaukee, WI 53202
--------------------------------------------------------------------------------------------------------------------------
-5-
--------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS SHARES BENEFICIALLY % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
--------------------------------------------------------------------------------------------------------------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND:
--------------------------------------------------------------------------------------------------------------------------
The Bank of New York Mellon 1,002,789 Shares 5.02%
525 William Penn Place
Pittsburgh, PA 15259
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC
One North Jefferson Street 7,426,228 Shares 37.18%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
2000 Westchester Avenue 2,460,825 Shares 12.32%
Purchase, NY 10577
----------------------------------------------------- ------------------------------- ----------------------------------
National Financial Services LLC
200 Liberty Street 1,043,665 Shares 5.23%
New York, NY 10281
----------------------------------------------------- ------------------------------- ----------------------------------
Raymond James & Associates, Inc.
P.O. Box 14407 1,680,218 Shares 8.41%
St. Petersburg, FL 33733
--------------------------------------------------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND:
--------------------------------------------------------------------------------------------------------------------------
The Bank of New York Mellon 1,071,282 Shares 6.16%
525 William Penn Place
Pittsburgh, PA 15259
----------------------------------------------------- ------------------------------- ----------------------------------
Charles Schwab & Co., Inc.
2423 E. Lincoln Drive 990,904 Shares 5.69%
Phoenix, AZ 85016
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC
One North Jefferson Street 2,159,426 Shares 12.41%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
101 Hudson Street, 8th Floor 1,224,581 Shares 7.04%
Jersey City, NJ 07302
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
2000 Westchester Avenue 1,685,057 Shares 9.68%
Purchase, NY 10577
----------------------------------------------------- ------------------------------- ----------------------------------
National Financial Services LLC
200 Liberty Street 1,791,991 Shares 10.30%
New York, NY 10281
----------------------------------------------------- ------------------------------- ----------------------------------
Pershing LLC
1 Pershing Plaza 896,058 Shares 5.15%
Jersey City, NJ 07399
----------------------------------------------------- ------------------------------- ----------------------------------
Robert W. Baird & Co., Inc.
777 E. Wisconsin Avenue
9th Floor 1,088,633 Shares 6.26%
Milwaukee, WI 53202
----------------------------------------------------- ------------------------------- ----------------------------------
RBC Capital Markets Corporation
510 Marquette Ave. South 1,364,881 Shares 7.84%
Minneapolis, MN 55402
--------------------------------------------------------------------------------------------------------------------------
FIRST TRUST MORTGAGE INCOME FUND:
--------------------------------------------------------------------------------------------------------------------------
Charles Schwab & Co., Inc. 233,184 Shares 5.53%
2423 E. Lincoln Drive
Phoenix, AZ 85016
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC
One North Jefferson Street 268,071 Shares 6.36%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
101 Hudson Street, 8th Floor 217,929 Shares 5.17%
Jersey City, NJ 07302
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
2000 Westchester Avenue 243,471 Shares 5.78%
Purchase, NY 10577
--------------------------------------------------------------------------------------------------------------------------
-6-
--------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS SHARES BENEFICIALLY % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
--------------------------------------------------------------------------------------------------------------------------
National Financial Services LLC
200 Liberty Street 722,616 Shares 17.15%
New York, NY 10281
----------------------------------------------------- ------------------------------- ----------------------------------
Pershing LLC
1 Pershing Plaza 448,186 Shares 10.64%
Jersey City, NJ 07399
----------------------------------------------------- ------------------------------- ----------------------------------
TD Ameritrade Clearing, Inc.
1005 N. Ameritrade Place 236,363 Shares 5.61%
Bellevue, NE 68005
----------------------------------------------------- ------------------------------- ----------------------------------
Sit Investment Associates, Inc. (1)
3300 IDS Center
80 South Eighth Street 440,534 Shares 10.79%
Minneapolis, MN 55402
--------------------------------------------------------------------------------------------------------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II:
--------------------------------------------------------------------------------------------------------------------------
The Bank of New York Mellon
525 William Penn Place 916,919 Shares 10.84%
Pittsburgh, PA 15259
----------------------------------------------------- ------------------------------- ----------------------------------
Charles Schwab & Co., Inc.
2423 E. Lincoln Drive 561,910 Shares 6.64%
Phoenix, AZ 85016
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC
One North Jefferson Street 800,763 Shares 9.47%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
2000 Westchester Avenue 456,071 Shares 5.39%
Purchase, NY 10577
----------------------------------------------------- ------------------------------- ----------------------------------
National Financial Services LLC
200 Liberty Street 883,963 Shares 10.45%
New York, NY 10281
----------------------------------------------------- ------------------------------- ----------------------------------
Pershing LLC
1 Pershing Plaza 581,945 Shares 6.88%
Jersey City, NJ 07399
----------------------------------------------------- ------------------------------- ----------------------------------
RBC Capital Markets Corporation
510 Marquette Ave. South 596,487 Shares 7.05%
Minneapolis, MN 55402
----------------------------------------------------- ------------------------------- ----------------------------------
TD Ameritrade Clearing, Inc.
1005 N. Ameritrade Place 516,908 Shares 6.11%
Bellevue, NE 68005
----------------------------------------------------- ------------------------------- ----------------------------------
Advisors Asset Management, Inc. (2)
18925 Base Camp Road 303,084 Shares 7.424%
Monument, CO 80132
----------------------------------------------------- ------------------------------- ----------------------------------
Guggenheim Capital, LLC (3)
227 West Monroe Street 483,757 Shares 5.97%
Chicago, IL 60606
--------------------------------------------------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND:
--------------------------------------------------------------------------------------------------------------------------
The Bank of New York Mellon
525 William Penn Place 310,838 Shares 5.26%
Pittsburgh, PA 15259
--------------------------------------------------------------------------------------------------------------------------
1 Information is according to Amendment No. 10 to Schedule 13G filed with
the SEC on February 13, 2013.
2 Information is according to Schedule 13G filed with the SEC on February 7,
2013.
3 Information is according to Schedule 13G filed with the SEC on behalf of
various Guggenheim entities on February 14, 2013.
-7-
--------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS SHARES BENEFICIALLY % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
--------------------------------------------------------------------------------------------------------------------------
First Clearing, LLC
One North Jefferson Street 983,285 Shares 16.65%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
101 Hudson Street, 8th Floor 309,720 Shares 5.24%
Jersey City, NJ 07302
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
2000 Westchester Avenue 522,993 Shares 8.86%
Purchase, NY 10577
----------------------------------------------------- ------------------------------- ----------------------------------
Raymond James & Associates, Inc.
880 Carillon Parkway
P.O. Box 12749 381,221 Shares 6.46%
St. Petersburg, FL 33716
----------------------------------------------------- ------------------------------- ----------------------------------
State Street Bank and Trust Co.
1776 Heritage Drive 644,575 Shares 10.92%
North Quincy, MA 02171
----------------------------------------------------- ------------------------------- ----------------------------------
Lazard Asset Management LLC (1)
30 Rockefeller Plaza 1,812,685 Shares 22.90%
New York, NY 10112
--------------------------------------------------------------------------------------------------------------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND:
--------------------------------------------------------------------------------------------------------------------------
First Clearing, LLC 7,954,272 Shares 55.69%
One North Jefferson Street
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
2000 Westchester Avenue 775,590 Shares 5.43%
Purchase, NY 10577
----------------------------------------------------- ------------------------------- ----------------------------------
Stifel, Nicolaus & Company, Incorporated
501 N. Broadway, 7th Floor 920,705 Shares 6.45%
St. Louis, MO 63102
--------------------------------------------------------------------------------------------------------------------------
FIRST TRUST ACTIVE DIVIDEND INCOME FUND:
--------------------------------------------------------------------------------------------------------------------------
Charles Schwab & Co., Inc.
2423 E. Lincoln Drive 547,660 Shares 6.63%
Phoenix, AZ 85016
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC
One North Jefferson Street 1,068,818 Shares 12.94%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
2000 Westchester Avenue 950,239 Shares 11.50%
Purchase, NY 10577
----------------------------------------------------- ------------------------------- ----------------------------------
National Financial Services LLC
200 Liberty Street 498,245 Shares 6.03%
New York, NY 10281
----------------------------------------------------- ------------------------------- ----------------------------------
Pershing LLC
1 Pershing Plaza 415,562 Shares 5.03%
Jersey City, NJ 07399
----------------------------------------------------- ------------------------------- ----------------------------------
Raymond James & Associates, Inc.
880 Carillon Parkway
P.O. Box 12749 1,610,645 Shares 19.50%
St. Petersburg, FL 33716
----------------------------------------------------- ------------------------------- ----------------------------------
TD Ameritrade Clearing, Inc.
1005 N. Ameritrade Place 454,632 Shares 5.50%
Bellevue, NE 68005
--------------------------------------------------------------------------------------------------------------------------
1 Information is according to Schedule 13D/A filed with the SEC on January
10, 2013.
-8-
--------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS SHARES BENEFICIALLY % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
--------------------------------------------------------------------------------------------------------------------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND:
--------------------------------------------------------------------------------------------------------------------------
First Clearing, LLC
One North Jefferson Street 5,190,674 Shares 14.40%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
101 Hudson Street, 8th Floor 3,523,200 Shares 9.77%
Jersey City, NJ 07302
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
2000 Westchester Avenue 10,821,540 Shares 30.01%
Purchase, NY 10577
----------------------------------------------------- ------------------------------- ----------------------------------
Raymond James & Associates, Inc.
880 Carillon Parkway
P.O. Box 12749 2,152,060 Shares 5.97%
St. Petersburg, FL 33716
--------------------------------------------------------------------------------------------------------------------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND:
--------------------------------------------------------------------------------------------------------------------------
First Clearing, LLC
One North Jefferson Street 1,892,628 Shares 10.78%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
101 Hudson Street, 8th Floor 2,107,778 Shares 12.01%
Jersey City, NJ 07302
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
2000 Westchester Avenue 7,049,434 Shares 40.17%
Purchase, NY 10577
----------------------------------------------------- ------------------------------- ----------------------------------
RBC Capital Markets Corporation
510 Marquette Ave. South 1,061,258 Shares 6.05%
Minneapolis, MN 55402
--------------------------------------------------------------------------------------------------------------------------
-9-
PROPOSAL: ELECTION OF TWO (2) CLASS III TRUSTEES OF EACH FUND
TWO (2) CLASS III TRUSTEES ARE TO BE ELECTED BY HOLDERS OF SHARES OF EACH FUND.
CURRENT TRUSTEES JAMES A. BOWEN AND NIEL B. NIELSON ARE THE NOMINEES FOR
ELECTION AS THE CLASS III TRUSTEES BY SHAREHOLDERS OF EACH FUND FOR A THREE-YEAR
TERM.
Each Fund has established a staggered Board of Trustees pursuant to its
By-Laws, and, accordingly, Trustees are divided into the following three (3)
classes: Class I, Class II and Class III. James A. Bowen and Niel B. Nielson are
currently the Class III Trustees of each Fund, with a term expiring at the
Meeting or until their respective successors are elected and qualified. If
elected, Mr. Bowen and Mr. Nielson will hold office for a three-year term
expiring at the Funds' annual meetings of shareholders in 2016. Robert F. Keith,
Richard E. Erickson and Thomas R. Kadlec are current and continuing Trustees.
Mr. Keith is the Class I Trustee for a term expiring at the Funds' annual
meetings of shareholders in 2014. Dr. Erickson and Mr. Kadlec are Class II
Trustees for a term expiring at the Funds' annual meetings of shareholders in
2015. Each Trustee serves until his successor is elected and qualified, or until
he earlier resigns, retires or is otherwise removed.
REQUIRED VOTE: For each Fund, each nominee for election as a Class III
Trustee must be elected by the affirmative vote of the holders of a plurality of
the Shares of the Fund, cast in person or by proxy at the Meeting and entitled
to vote thereon, provided a quorum is present. Abstentions and broker non-votes
will have no effect on the approval of the proposal. Proxies cannot be voted for
a greater number of persons than the number of seats open for election.
Unless you give contrary instructions on your proxy card, your Shares will
be voted FOR the election of each nominee listed if your proxy card has been
properly executed and timely received by the applicable Fund. If a nominee
should withdraw or otherwise become unavailable for election prior to the
Meeting, the proxies named on your proxy card intend to vote FOR any substitute
nominee or nominees recommended by the Funds in accordance with the Funds'
procedures.
THE BOARD OF TRUSTEES OF EACH FUND UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE ELECTION OF EACH NOMINEE.
-10-
MANAGEMENT
MANAGEMENT OF THE FUNDS
The general supervision of the duties performed for the Funds under their
respective investment management agreement with the Advisor is the
responsibility of the Board. The Trustees set broad policies for the Funds and
choose the Funds' officers. The following is a list of the Trustees and officers
of each Fund and a statement of their present positions and principal
occupations during the past five years, the number of portfolios each Trustee
oversees and the other directorships each Trustee holds, if applicable. As noted
above, each Fund has established a staggered Board consisting of five (5)
Trustees divided into three (3) classes: Class I, Class II and Class III. The
length of the term of office of each Trustee is generally three years, and when
each Trustee's term begins and ends depends on the Trustee's designated class.
The officers of the Funds serve indefinite terms. James A. Bowen is deemed an
"interested person" (as that term is defined in the Investment Company Act of
1940, as amended ("1940 Act")) ("Interested Trustee") of the Funds due to his
position as Chief Executive Officer of the Advisor. Except for Mr. Bowen, each
Trustee is not an "interested person" (as that term is defined in the 1940 Act)
and is therefore referred to as an "Independent Trustee."
The remainder of this page is intentionally left blank.
-11-
INTERESTED TRUSTEE
-----------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FIRST TRUST OTHER
POSITION(S) TERM OF OFFICE(2) PRINCIPAL OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS
NAME, ADDRESS, AND HELD WITH AND LENGTH OF DURING PAST FIVE OVERSEEN BY HELD BY
DATE OF BIRTH FUNDS TIME SERVED(3) YEARS BY TRUSTEE TRUSTEE
-----------------------------------------------------------------------------------------------------------------------
James A. Bowen(1) Chairman of Class III Chief Executive Officer 100 Portfolios None
120 East Liberty Drive the Board Nominee (December 2010 to Present),
Suite 400 and Trustee President (until December
Wheaton, IL 60187 Since 2004 2010), First Trust Advisors
DOB: 9/55 L.P. and First Trust
Portfolios L.P.; Chairman
of the Board of Directors,
BondWave LLC (Software
Development
Company/Investment Advisor)
and Stonebridge Advisors
LLC (Investment Advisor)
-----------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
-----------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FIRST TRUST OTHER
POSITION(S) TERM OF OFFICE(2) PRINCIPAL OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS
NAME, ADDRESS, AND HELD WITH AND LENGTH OF DURING PAST FIVE OVERSEEN BY HELD BY
DATE OF BIRTH FUNDS TIME SERVED(3) YEARS BY TRUSTEE TRUSTEE
-----------------------------------------------------------------------------------------------------------------------
Richard E. Erickson Trustee Class II Physician; President, 100 Portfolios None
c/o First Trust Wheaton Orthopedics;
Advisors L.P. Since 2004 Co-owner and Co-Director
120 East Liberty Drive (January 1996 to May 2007),
Suite 400 Sports Med Center for
Wheaton, IL 60187 Fitness; Limited Partner,
DOB: 4/51 Gundersen Real Estate
Limited Partnership;
Member, Sportsmed LLC
-----------------------------------------------------------------------------------------------------------------------
Thomas R. Kadlec Trustee Class II President (March 2010 to 100 Portfolios Director of ADM
c/o First Trust Present), Senior Vice Investor
Advisors L.P. Since 2004 President and Chief Services, Inc.;
120 East Liberty Drive Financial Officer (May 2007 ADM Investor
Suite 400 to March 2010), Vice Services
Wheaton, IL 60187 President and Chief International;
DOB: 11/57 Financial Officer (1990 to and ADM Investor
May 2007), ADM Investor Services Hong
Services, Inc. (Futures Kong Ltd.
Commission Merchant)
-----------------------------------------------------------------------------------------------------------------------
Robert F. Keith Trustee Class I President (2003 to Present), 100 Portfolios Director of Trust
c/o First Trust Hibs Enterprises (Financial Company of
Advisors L.P. Since 2006 and Management Consulting) Illinois
120 East Liberty Drive
Suite 400
Wheaton, IL 60187
DOB: 11/56
-----------------------------------------------------------------------------------------------------------------------
Niel B. Nielson Trustee Class III President and Chief 100 Portfolios Director of
c/o First Trust Nominee Executive Officer (July 2012 Covenant
Advisors L.P. to Present), Dew Learning Transport Inc.
120 East Liberty Drive Since 2004 LLC (Educational Products
Suite 400 and Services); President
Wheaton, IL 60187 (June 2002 to June 2012),
DOB: 3/54 Covenant College
-----------------------------------------------------------------------------------------------------------------------
-12-
OFFICERS
------------------------------------------------------------------------------------------------------------------------
TERM OF
OFFICE(2) PRINCIPAL OCCUPATION(S)
NAME, ADDRESS, AND POSITION(S) AND LENGTH OF DURING PAST FIVE
DATE OF BIRTH HELD WITH FUNDS TIME SERVED(3) YEARS
------------------------------------------------------------------------------------------------------------------------
Mark R. Bradley President and Indefinite Chief Financial Officer and Chief Operating
120 East Liberty Drive, Suite 400 Chief Executive Officer (December 2010 to Present), First Trust
Wheaton, IL 60187 Officer Since 2004 Advisors L.P. and First Trust Portfolios L.P.;
DOB: 11/57 Chief Financial Officer, BondWave LLC (Software
Development Company/Investment Advisor) and
Stonebridge Advisors LLC (Investment Advisor)
------------------------------------------------------------------------------------------------------------------------
James M. Dykas Treasurer, Chief Indefinite Controller (January 2011 to Present), Senior
120 East Liberty Drive, Suite 400 Financial Officer Vice President (April 2007 to Present), Vice
Wheaton, IL 60187 and Chief Since 2005 President (January 2005 to April 2007), First
DOB: 1/66 Accounting Officer Trust Advisors L.P. and First Trust Portfolios
L.P.
------------------------------------------------------------------------------------------------------------------------
Christopher R. Fallow Assistant Vice Indefinite Assistant Vice President (August 2006 to
120 East Liberty Drive, Suite 400 President Present), Associate (January 2005 to August
Wheaton, IL 60187 Since 2006 2006), First Trust Advisors L.P. and First
DOB: 4/79 Trust Portfolios L.P.
------------------------------------------------------------------------------------------------------------------------
Rosanne Gatta Assistant Indefinite Board Liaison Associate (July 2010 to Present),
120 East Liberty Drive, Suite 400 Secretary First Trust Advisors L.P. and First Trust
Wheaton, IL 60187 Since March Portfolios L.P.; Assistant Vice President
DOB: 7/55 2011 (February 2001 to July 2010), PNC Global
Investment Servicing
------------------------------------------------------------------------------------------------------------------------
W. Scott Jardine Secretary and Indefinite General Counsel, First Trust Advisors L.P.,
120 East Liberty Drive, Suite 400 Chief Legal First Trust Portfolios L.P. and BondWave LLC
Wheaton, IL 60187 Officer Since 2004 (August 2009 to Present) (Software Development
DOB: 5/60 Company/Investment Advisor); Secretary of
Stonebridge Advisors LLC (Investment Advisor)
------------------------------------------------------------------------------------------------------------------------
Erin E. Klassman Assistant Indefinite Assistant General Counsel (October 2007 to
120 East Liberty Drive, Suite 400 Secretary Present), Associate Counsel (March 2006 to
Wheaton, IL 60187 Since June October 2007), First Trust Advisors L.P. and
DOB: 8/76 2009 First Trust Portfolios L.P.
------------------------------------------------------------------------------------------------------------------------
Daniel J. Lindquist Vice President Indefinite Senior Vice President (September 2005 to
120 East Liberty Drive, Suite 400 Present), First Trust Advisors L.P. and First
Wheaton, IL 60187 Since 2005 Trust Portfolios L.P.
DOB: 2/70
------------------------------------------------------------------------------------------------------------------------
Coleen D. Lynch Assistant Vice Indefinite Assistant Vice President (January 2008 to
120 East Liberty Drive, Suite 400 President Present), First Trust Advisors L.P. and First
Wheaton, IL 60187 Since July Trust Portfolios L.P.; Vice President (May 1998
DOB: 7/58 2008 to January 2008), Van Kampen Asset Management
and Morgan Stanley Investment Management
(Investment Advisor)
------------------------------------------------------------------------------------------------------------------------
Kristi A. Maher Assistant Indefinite Deputy General Counsel (May 2007 to Present),
120 East Liberty Drive, Suite 400 Secretary and First Trust Advisors L.P. and First Trust
Wheaton, IL 60187 Chief Compliance Assistant Portfolios L.P.
DOB: 12/66 Officer Secretary
since July
2004 and Chief
Compliance
Officer since
January 2011
------------------------------------------------------------------------------------------------------------------------
Donald Swade Assistant Indefinite Vice President (April 2012 to Present), First
120 East Liberty Drive, Suite 400 Treasurer Trust Advisors L.P. and First Trust Portfolios
Wheaton, IL 60187 Since L.P.; Vice President (September 2006 to April
DOB: 8/72 September 2012 2012), Guggenheim Funds Investment Advisors,
LLC and Claymore Securities, Inc. (Investment
Advisor)
------------------------------------------------------------------------------------------------------------------------
Katherine Urevig Assistant Indefinite Vice President (June 2007 to Present), First
120 East Liberty Drive, Suite 400 Treasurer Trust Advisors L.P. and First Trust Portfolios
Wheaton, IL 60187 Since L.P.; Vice President (December 2002 to May
DOB: 5/65 September 2012 2007), Van Kampen Asset Management and Morgan
Stanley Investment Management (Investment
Advisor)
------------------------------------------------------------------------------------------------------------------------
1 Mr. Bowen is deemed an "interested person" of the Funds due to his
position as Chief Executive Officer of First Trust Advisors L.P.,
investment advisor of the Funds.
2 Currently, James A. Bowen and Niel B. Nielson, as Class III Trustees, are
each serving a term for each of the Funds until the Meeting or until their
successors are elected and qualified. Robert F. Keith, as the Class I
Trustee, is serving a term for each of the Funds until the Funds' 2014
annual meetings of shareholders or until his successor is elected and
qualified. Richard E. Erickson and Thomas R. Kadlec, as Class II Trustees,
are each serving a term for each of the Funds until the Funds' 2015 annual
meetings of shareholders or until their successors are elected and
qualified. Officers of the Funds have an indefinite term.
-13-
3 For officers, length of time served represents the month and year the
person first became an officer of a Fund. Except as otherwise provided
below, all Trustees and officers were elected or appointed (i) in 2004 for
the then-existing Funds, (ii) in 2005 for First Trust Mortgage Income
Fund, (iii) in 2006 for First Trust Strategic High Income Fund II and
First Trust/Aberdeen Emerging Opportunity Fund, (iv) in 2007 for First
Trust Specialty Finance and Financial Opportunities Fund and First Trust
Active Dividend Income Fund, (v) in 2010 for First Trust High Income
Long/Short Fund and (vi) in 2011 for First Trust Energy Infrastructure
Fund. Daniel J. Lindquist and James M. Dykas were elected Vice President
and Treasurer, respectively, of all funds in the First Trust Fund Complex,
including the then-existing Funds, on December 12, 2005. Christopher R.
Fallow was elected Assistant Vice President of the then-existing Funds on
December 10, 2006. Robert F. Keith was appointed Trustee of the
then-existing Funds on June 12, 2006. Coleen D. Lynch was elected
Assistant Vice President of all funds in the First Trust Fund Complex,
including the then-existing Funds, on July 29, 2008. Erin E. Klassman was
elected Assistant Secretary of all funds in the First Trust Fund Complex,
including the then-existing Funds, on June 1, 2009. Kristi A. Maher was
elected Chief Compliance Officer of all funds in the First Trust Fund
Complex, including the then-existing Funds, in December 2010, effective
January 1, 2011. James A. Bowen resigned as President and Chief Executive
Officer of the funds in the First Trust Fund Complex on January 23, 2012.
Mark R. Bradley was elected President and Chief Executive Officer, and
James M. Dykas was elected Treasurer, Chief Financial Officer and Chief
Accounting Officer, of all funds in the First Trust Fund Complex,
including the Funds, in January 2012, effective January 23, 2012. Before
January 23, 2012, Mr. Bradley served as Treasurer, Chief Financial Officer
and Chief Accounting Officer and Mr. Dykas served as Assistant Treasurer.
Donald Swade and Katherine Urevig were elected Assistant Treasurers of all
funds in the First Trust Fund Complex, including the Funds, on September
17, 2012.
UNITARY BOARD LEADERSHIP STRUCTURE
The same five persons serve as Trustees on each Fund's Board and on the
boards of all other funds in the First Trust Fund Complex (the "First Trust
Funds"), which is known as a "unitary" board leadership structure. The unitary
board structure was adopted for the First Trust Funds because of the
efficiencies it achieves with respect to the governance and oversight of the
First Trust Funds. Each First Trust Fund is subject to the rules and regulations
of the 1940 Act (and other applicable securities laws), which means that many of
the First Trust Funds face similar issues with respect to certain of their
fundamental activities, including risk management, portfolio liquidity,
portfolio valuation and financial reporting. In addition, all of the First Trust
Funds that are closed-end funds (the "First Trust Closed-end Funds") are managed
by the Advisor and employ common service providers for custody, fund accounting,
administration and transfer agency that provide substantially similar services
to the First Trust Closed-end Funds pursuant to substantially similar
contractual arrangements. Because of the similar and often overlapping issues
facing the First Trust Funds, including among the First Trust Closed-end Funds,
the Board of the First Trust Funds believes that maintaining a unitary board
structure promotes efficiency and consistency in the governance and oversight of
all First Trust Funds and reduces the costs, administrative burdens and possible
conflicts that may result from having multiple boards. In adopting a unitary
board structure, the Trustees seek to provide effective governance through
establishing a board the overall composition of which will, as a body, possess
the appropriate skills, diversity, independence and experience to oversee the
business of the First Trust Funds.
Annually, the Board reviews its governance structure and the committee
structures, their performance and functions and reviews any processes that would
enhance Board governance over the Funds' business. The Board has determined that
its leadership structure, including the unitary board and committee structure,
is appropriate based on the characteristics of the funds it serves and the
characteristics of the First Trust Fund Complex as a whole. The Board is
composed of four Independent Trustees and one Interested Trustee. The Interested
Trustee serves as the Chairman of the Board of each Fund and, prior to January
23, 2012, also served as the Chief Executive Officer and President of each Fund.
In order to streamline communication between the Advisor and the
Independent Trustees and create certain efficiencies, the Board has a Lead
Independent Trustee who is responsible for: (i) coordinating activities of the
Independent Trustees; (ii) working with the Advisor, Fund counsel and the
independent legal counsel to the Independent Trustees to determine the agenda
for Board meetings; (iii) serving as the principal contact for and facilitating
communication between the Independent Trustees and the Funds' service providers,
particularly the Advisor; and (iv) any other duties that the Independent
Trustees may delegate to the Lead Independent Trustee. The Lead Independent
Trustee is selected by the Independent Trustees and currently serves a two-year
term or until his successor is selected. Robert F. Keith currently serves as the
Lead Independent Trustee.
-14-
The Board has established four standing committees (as described below)
and has delegated certain of its responsibilities to those committees. The Board
and its committees meet frequently throughout the year to oversee the Funds'
activities, review contractual arrangements with and performance of service
providers, oversee compliance with regulatory requirements, and review Fund
performance. The Independent Trustees are represented by independent legal
counsel at all Board and committee meetings. Generally, the Board acts by
majority vote of all the Trustees, except where a different vote is required by
applicable law.
The three Committee Chairmen and the Lead Independent Trustee currently
rotate every two years in serving as Chairman of the Audit Committee, the
Nominating and Governance Committee or the Valuation Committee, or as Lead
Independent Trustee. Effective January 1, 2014, each Committee Chairman and the
Lead Independent Trustee will rotate every three years. The Lead Independent
Trustee also serves on the Executive Committee with the Interested Trustee.
In addition to the Funds, the First Trust Fund Complex includes: two
closed-end funds advised by First Trust Advisors; First Defined Portfolio Fund,
LLC, an open-end management investment company with eight portfolios advised by
First Trust Advisors; First Trust Series Fund, an open-end management investment
company with three portfolios advised by First Trust Advisors; First Trust
Variable Insurance Trust, an open-end management investment company with one
portfolio advised by First Trust Advisors; and First Trust Exchange-Traded Fund,
First Trust Exchange-Traded Fund II, First Trust Exchange-Traded Fund III, First
Trust Exchange-Traded Fund IV, First Trust Exchange-Traded Fund VI, First Trust
Exchange-Traded AlphaDEX(R) Fund and First Trust Exchange-Traded AlphaDEX(R)
Fund II, each an exchange-traded fund with 19, 12, 1, 2, 2, 21, and 18 operating
portfolios (each such portfolio, an "ETF"), respectively, advised by First Trust
Advisors.
The four standing committees of the Board are: the Executive Committee
(and Pricing and Dividend Committee), the Nominating and Governance Committee,
the Valuation Committee and the Audit Committee. The Executive Committee, which
meets between Board meetings, is authorized to exercise all powers of and to act
in the place of the Board of Trustees to the extent permitted by each Fund's
Declaration of Trust and By-Laws. The members of the Executive Committee also
serve as a special committee of the Board known as the Pricing and Dividend
Committee which is authorized to exercise all of the powers and authority of the
Board in respect of the issuance and sale, through an underwritten public
offering, of the Shares of each Fund and all other such matters relating to such
financing, including determining the price at which such Shares are to be sold,
approval of the final terms of the underwriting agreement, and approval of the
members of the underwriting syndicate. Such Committee is also responsible for
the declaration and setting of dividends. Mr. Keith and Mr. Bowen are members of
the Executive Committee. The number of meetings of the Executive Committee held
by each Fund during its last fiscal year is shown on Schedule 1 hereto.
The Nominating and Governance Committee is responsible for appointing and
nominating non-interested persons to the Board of Trustees. Messrs. Erickson,
Kadlec, Keith and Nielson are members of the Nominating and Governance
Committee, and each is an Independent Trustee who is also an "independent
director" within the meaning of the listing standards of the NYSE or NYSE MKT
LLC, as applicable. The Nominating and Governance Committee operates under a
written charter adopted and approved by the Board, a copy of which is available
on the Funds' website at http://www.ftportfolios.com. If there is no vacancy on
the Board of Trustees, the Board will not actively seek recommendations from
other parties, including shareholders. In 2005, the Board of Trustees adopted a
mandatory retirement age of 72 for Trustees, beyond which age Trustees are
ineligible to serve. The Nominating and Governance Committee Charter provides
that the Committee will not
-15-
consider new trustee candidates who are 72 years of age or older or will turn 72
years old during the initial term. When a vacancy on the Board of Trustees
occurs and nominations are sought to fill such vacancy, the Nominating and
Governance Committee may seek nominations from those sources it deems
appropriate in its discretion, including shareholders of the applicable Fund.
The Nominating and Governance Committee may retain a search firm to identify
candidates. To submit a recommendation for nomination as a candidate for a
position on the Board of Trustees, shareholders of the applicable Fund shall
mail such recommendation to W. Scott Jardine, Secretary, at the Fund's address,
120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187. Such recommendation
shall include the following information: (i) evidence of Fund ownership of the
person or entity recommending the candidate (if a Fund shareholder); (ii) a full
description of the proposed candidate's background, including their education,
experience, current employment and date of birth; (iii) names and addresses of
at least three professional references for the candidate; (iv) information as to
whether the candidate is an "interested person" in relation to the Fund, as such
term is defined in the 1940 Act, and such other information that may be
considered to impair the candidate's independence; and (v) any other information
that may be helpful to the Committee in evaluating the candidate (see also
"ADDITIONAL INFORMATION--SHAREHOLDER PROPOSALS" below). If a recommendation is
received with satisfactorily completed information regarding a candidate during
a time when a vacancy exists on the Board or during such other time as the
Nominating and Governance Committee is accepting recommendations, the
recommendation will be forwarded to the Chairman of the Nominating and
Governance Committee and the counsel to the Independent Trustees.
Recommendations received at any other time will be kept on file until such time
as the Nominating and Governance Committee is accepting recommendations, at
which point they may be considered for nomination. In connection with the
evaluation of candidates, the review process may include, without limitation,
personal interviews, background checks, written submissions by the candidates
and third party references. Under no circumstances shall the Nominating and
Governance Committee evaluate nominees recommended by a shareholder of a Fund on
a basis substantially different than that used for other nominees for the same
election or appointment of Trustees. The number of meetings of the Nominating
and Governance Committee held by each Fund during its last fiscal year is shown
on Schedule 1 hereto.
The Valuation Committee is responsible for the oversight of the pricing
procedures of each Fund. Messrs. Erickson, Kadlec, Keith and Nielson are members
of the Valuation Committee. The number of meetings of the Valuation Committee
held by each Fund during its last fiscal year is shown on Schedule 1 hereto.
The Audit Committee is responsible for overseeing each Fund's accounting
and financial reporting process, the system of internal controls, audit process
and evaluating and appointing independent auditors (subject also to Board
approval). Messrs. Erickson, Kadlec, Keith and Nielson, all of whom are
"independent" as defined in the listing standards of the NYSE or NYSE MKT LLC,
as applicable, serve on the Audit Committee. Messrs. Kadlec and Keith have been
determined to qualify as an "Audit Committee Financial Expert" as such term is
defined in Form N-CSR. The number of meetings of the Audit Committee held by
each Fund during its last fiscal year is shown in Schedule 1 hereto.
In carrying out its responsibilities, as described below under
"INDEPENDENT AUDITORS' FEES--Pre-Approval," the Audit Committee pre-approves all
audit services and permitted non-audit services for each Fund (including the
fees and terms thereof) and non-audit services to be performed for the Advisor
by Deloitte & Touche LLP ("Deloitte & Touche"), the Funds' independent
registered public accounting firm ("independent auditors") if the engagement
relates directly to the operations and financial reporting of the Funds.
-16-
RISK OVERSIGHT
As part of the general oversight of each Fund, the Board is involved in
the risk oversight of the Funds. The Board has adopted and periodically reviews
policies and procedures designed to address the Funds' risks. Oversight of
investment and compliance risk, including oversight of sub-advisors, is
performed primarily at the Board level in conjunction with the Advisor's
investment oversight group and the Funds' Chief Compliance Officer ("CCO").
Oversight of other risks also occurs at the Committee level. The Advisor's
investment oversight group reports to the Board at quarterly meetings regarding,
among other things, Fund performance and the various drivers of such performance
as well as information related to sub-advisors and their operations and
processes. The Board reviews reports on the Funds' and the service providers'
compliance policies and procedures at each quarterly Board meeting and receives
an annual report from the CCO regarding the operations of the Funds' and the
service providers' compliance program. In addition, the Independent Trustees
meet privately each quarter with the CCO. The Audit Committee reviews with the
Advisor the Funds' major financial risk exposures and the steps the Advisor has
taken to monitor and control these exposures, including the Funds' risk
assessment and risk management policies and guidelines. The Audit Committee
also, as appropriate, reviews in a general manner the processes other Board
committees have in place with respect to risk assessment and risk management.
The Nominating and Governance Committee monitors all matters related to the
corporate governance of the Funds. The Valuation Committee monitors valuation
risk and compliance with the Funds' Valuation Procedures and oversees the
pricing services and actions by the Advisor's Pricing Committee with respect to
the valuation of portfolio securities.
Not all risks that may affect the Funds can be identified nor can controls
be developed to eliminate or mitigate their occurrence or effects. It may not be
practical or cost-effective to eliminate or mitigate certain risks, the
processes and controls employed to address certain risks may be limited in their
effectiveness, and some risks are simply beyond the reasonable control of the
Funds or the Advisor or other service providers. Moreover, it is necessary to
bear certain risks (such as investment related risks) to achieve a Fund's goals.
As a result of the foregoing and other factors, the Funds' ability to manage
risk is subject to substantial limitations.
BOARD DIVERSIFICATION AND TRUSTEE QUALIFICATIONS
As described above, the Nominating and Governance Committee of the Board
oversees matters related to the nomination of Trustees. The Nominating and
Governance Committee seeks to establish an effective Board with an appropriate
range of skills and diversity, including, as appropriate, differences in
background, professional experience, education, vocations, and other individual
characteristics and traits in the aggregate. Each Trustee must meet certain
basic requirements, including relevant skills and experience, time availability,
and if qualifying as an Independent Trustee, independence from the Advisor,
sub-advisors, underwriters or other service providers, including any affiliates
of these entities.
Listed below for each current Trustee and nominee are the experiences,
qualifications and attributes that led to the conclusion, as of the date of this
Joint Proxy Statement, that each current Trustee and nominee should serve as a
trustee.
Independent Trustees
Richard E. Erickson, M.D., is an orthopedic surgeon and President of
Wheaton Orthopedics. He also has been a co-owner and director of a fitness
center and a limited partner of two real estate companies. Dr. Erickson has
served as a Trustee of each Fund since its inception and of the First Trust
-17-
Funds since 1999. Dr. Erickson has also served as the Lead Independent Trustee
(2008 - 2009), Chairman of the Nominating and Governance Committee (2003 - 2007)
and Chairman of the Valuation Committee (June 2006 - 2007 and 2010 - 2011) of
the First Trust Funds. He currently serves as Chairman of the Audit Committee
(since January 1, 2012) of the First Trust Funds.
Thomas R. Kadlec is President of ADM Investor Services Inc. ("ADMIS"), a
futures commission merchant and wholly-owned subsidiary of the Archer Daniels
Midland Company ("ADM"). Mr. Kadlec has been employed by ADMIS and its
affiliates since 1990 in various accounting, financial, operations and risk
management capacities. Mr. Kadlec serves on the boards of several international
affiliates of ADMIS and is a member of ADM's Integrated Risk Committee, which is
tasked with the duty of implementing and communicating enterprise-wide risk
management. Mr. Kadlec has served as a Trustee of each Fund since its inception.
Mr. Kadlec also served on the Executive Committee from the organization of the
first First Trust Closed-end Fund in 2003 until he was elected as the first Lead
Independent Trustee in December 2005, serving as such through 2007. He also
served as Chairman of the Valuation Committee (2008 - 2009) and Chairman of the
Audit Committee (2010 - 2011), and he currently serves as Chairman of the
Nominating and Governance Committee (since January 1, 2012) of the First Trust
Funds.
Robert F. Keith is President of Hibs Enterprises, a financial and
management consulting firm. Mr. Keith has been with Hibs Enterprises since 2003.
Prior thereto, Mr. Keith spent 18 years with ServiceMaster and Aramark,
including three years as President and COO of ServiceMaster Consumer Services,
where he led the initial expansion of certain products overseas, five years as
President and COO of ServiceMaster Management Services Company and two years as
President of Aramark ServiceMaster Management Services. Mr. Keith is a certified
public accountant and also has held the positions of Treasurer and Chief
Financial Officer of ServiceMaster, at which time he oversaw the financial
aspects of ServiceMaster's expansion of its Management Services division into
Europe, the Middle East and Asia. Mr. Keith has served as a Trustee of the First
Trust Funds since June 2006. Mr. Keith has also served as Chairman of the Audit
Committee (2008 - 2009) and as Chairman of the Nominating and Governance
Committee (2010 - 2011) of the First Trust Funds. He currently serves as Lead
Independent Trustee and on the Executive Committee (since January 1, 2012) of
the First Trust Funds.
Niel B. Nielson, Ph.D., has served as the President and Chief Executive
Officer of Dew Learning LLC (a global provider of digital and on-line
educational products and services) since 2012. Mr. Nielson formerly served as
President of Covenant College (2002 - 2012), and as a partner and trader (of
options and futures contracts for hedging options) for Ritchie Capital Markets
Group (1996 - 1997), where he held an administrative management position at this
proprietary derivatives trading company. He also held prior positions in new
business development for ServiceMaster Management Services Company, and in
personnel and human resources for NationsBank of North Carolina, N.A. and
Chicago Research and Trading Group, Ltd. ("CRT"). His international experience
includes serving as a director of CRT Europe, Inc. for two years, directing out
of London all aspects of business conducted by the U.K. and European subsidiary
of CRT. Prior to that, Mr. Nielson was a trader and manager at CRT in Chicago.
Mr. Nielson has served as a Trustee of each Fund since its inception and of the
First Trust Funds since 1999. Mr. Nielson has also served as Chairman of the
Audit Committee (2003 - 2007), Chairman of the Nominating and Governance
Committee (2008 - 2009) and Lead Independent Trustee (2010 - 2011), and
currently serves as Chairman of the Valuation Committee (since January 1, 2012)
of the First Trust Funds.
-18-
Interested Trustee
James A. Bowen is Chief Executive Officer of First Trust Advisors and
First Trust Portfolios L.P. and, until January 23, 2012, also served as
President and Chief Executive Officer of the First Trust Funds. Mr. Bowen is
involved in the day-to-day management of the First Trust Funds and serves on the
Executive Committee. He has over 29 years of experience in the investment
company business in sales, sales management and executive management. Mr. Bowen
has served as a Trustee of each Fund since its inception and of the First Trust
Funds since 1999.
OTHER INFORMATION
Independent Trustees
During the past five years, none of the Independent Trustees, nor any of
their immediate family members, has been a director, trustee, officer, general
partner or employee of, or consultant to, First Trust Advisors, First Trust
Portfolios L.P. (an affiliate of First Trust Advisors), any sub-advisor to any
fund in the First Trust Fund Complex, or any of their affiliates.
Officers
The officers of each Fund hold the same positions with each fund in the
First Trust Fund Complex (representing 100 portfolios) as they hold with the
Funds, except for Christopher R. Fallow Mr. Fallow is an officer of 13 First
Trust Closed-end Funds and an officer of First Trust Series Fund, but is not an
officer of First Defined Portfolio Fund, LLC, First Trust Variable Insurance
Trust, First Trust Exchange-Traded Fund, First Trust Exchange-Traded Fund II,
First Trust Exchange-Traded Fund III, First Trust Exchange-Traded Fund IV, First
Trust Exchange-Traded Fund VI, First Trust Exchange-Traded AlphaDEX(R) Fund or
First Trust Exchange-Traded AlphaDEX(R) Fund II.
-19-
BENEFICIAL OWNERSHIP OF SHARES HELD IN THE FUNDS BY TRUSTEES AND OFFICERS
The following table sets forth the dollar range and number of equity
securities beneficially owned by the Trustees in each Fund and all funds in the
First Trust Fund Complex, including the Funds, as of December 31, 2012:
DOLLAR RANGE OF EQUITY SECURITIES IN THE FUNDS AND FIRST TRUST FUND COMPLEX (NUMBER OF SHARES HELD)
------------------------------------------------------------------------------------------------------------------------------------
INTERESTED INDEPENDENT
TRUSTEE TRUSTEES
------------------------- ------------------ -------------------------------------------------------------------------------------
FUND James A. Bowen Richard E. Erickson Thomas R. Kadlec Robert F. Keith Niel B. Nielson
------------------------- ------------------ --------------------- -------------------- ------------------- -------------------
MACQUARIE/FIRST TRUST
GLOBAL INFRASTRUCTURE/ $0 $10,001-$50,000 $10,001-$50,000 $10,001-$50,000 $10,001-$50,000
UTILITIES DIVIDEND & (0 Shares) (802 Shares) (850 Shares) (1,817 Shares) (922 Shares)
INCOME FUND
------------------------- ------------------ --------------------- -------------------- ------------------- -------------------
FIRST TRUST ENERGY INCOME $0 $10,001-$50,000 $10,001-$50,000 $0 $10,001-$50,000
AND GROWTH FUND (0 Shares) (390 Shares) (700 Shares) (0 Shares) (455 Shares)
------------------------- ------------------ --------------------- -------------------- ------------------- -------------------
FIRST TRUST ENHANCED $0 $1-$10,000 $10,001-$50,000 $0 $1-$10,000
EQUITY INCOME FUND (0 Shares) (327 Shares) (850 Shares) (0 Shares) (392 Shares)
------------------------- ------------------ --------------------- -------------------- ------------------- -------------------
FIRST TRUST/ABERDEEN $0 $10,001-$50,000 $10,001-$50,000 $10,001-$50,000 $10,001-$50,000
GLOBAL OPPORTUNITY INCOME (0 Shares) (1,234 Shares) (850 Shares) (2,495 Shares) (729 Shares)
FUND
------------------------- ------------------ --------------------- -------------------- ------------------- -------------------
FIRST TRUST MORTGAGE $0 $0 $10,001-$50,000 $0 $1-$10,000
INCOME FUND (0 Shares) (0 Shares) (650 Shares) (0 Shares) (468 Shares)
------------------------- ------------------ --------------------- -------------------- ------------------- -------------------
FIRST TRUST STRATEGIC $10,001-$50,000 $0 $0 $0 $1-$10,000
HIGH INCOME FUND II (1,498 Shares) (0 Shares) (0 Shares) (0 Shares) (335 Shares)
------------------------- ------------------ --------------------- -------------------- ------------------- -------------------
FIRST TRUST/ABERDEEN $0 $0 $10,001-$50,000 $10,001-$50,000 $10,001-$50,000
EMERGING OPPORTUNITY FUND (0 Shares) (0 Shares) (1,000 Shares) (600 Shares) (454 Shares)
------------------------- ------------------ --------------------- -------------------- ------------------- -------------------
FIRST TRUST SPECIALTY $0 $0 $0 $0 $0
FINANCE AND FINANCIAL (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
OPPORTUNITIES FUND
------------------------- ------------------ --------------------- -------------------- ------------------- -------------------
FIRST TRUST ACTIVE $0 $0 $0 $0 $0
DIVIDEND INCOME FUND (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
------------------------- ------------------ --------------------- -------------------- ------------------- -------------------
FIRST TRUST HIGH INCOME $0 $0 $0 $0 $0
LONG/SHORT FUND (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
------------------------- ------------------ --------------------- -------------------- ------------------- -------------------
FIRST TRUST ENERGY $0 $0 $0 $0 $0
INFRASTRUCTURE FUND (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
------------------------- ------------------ --------------------- -------------------- ------------------- -------------------
AGGREGATE DOLLAR RANGE OF
EQUITY SECURITIES IN ALL
REGISTERED INVESTMENT $10,001-$50,000 Over $100,000 Over $100,000 Over $100,000 Over $100,000
COMPANIES IN THE FIRST (2,498 Shares) (10,194 Shares) (9,727 Shares) (11,437 Shares) (6,351 Shares)
TRUST FUND COMPLEX
OVERSEEN BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
As of December 31, 2012, the Independent Trustees and their immediate
family members did not own, beneficially or of record, any class of securities
of First Trust Advisors or any sub-advisor or principal underwriter of any Fund
or any person, other than a registered investment company, directly or
indirectly controlling, controlled by, or under common control with First Trust
Advisors or any sub-advisor or principal underwriter of any Fund, nor, since the
beginning of the most recently completed fiscal year of any Fund, did any
Independent Trustee purchase or sell securities of First Trust Advisors, or any
sub-advisor to any fund in the First Trust Fund Complex, their parents or any
subsidiaries of any of the foregoing.
-20-
As of December 31, 2012, the Trustees and officers of the Funds as a group
beneficially owned approximately 40,210 shares of the funds in the First Trust
Fund Complex (less than 1% of the shares outstanding). As of December 31, 2012,
the Trustees and officers of each Fund as a group beneficially owned the
following number of Shares of each Fund, which is less than 1% of each Fund's
Shares outstanding:
---------------------------------------------------------------------------------------------------------------------------
FUND SHARES OWNED
--------------------------------------------------------------------------------------------------- -----------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND 4,391
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND 1,545
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND 1,569
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND 5,308
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST MORTGAGE INCOME FUND 1,118
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II 1,833
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND 2,054
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND 0
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST ACTIVE DIVIDEND INCOME FUND 0
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND 0
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND 0
---------------------------------------------------------------------------------------------------------------------------
COMPENSATION
Until January 1, 2012, each trust in the First Trust Fund Complex paid
each Independent Trustee an annual retainer of $10,000 per trust for the first
14 trusts in the First Trust Fund Complex and an annual retainer of $7,500 per
trust for each subsequent trust added to the First Trust Fund Complex. The
annual retainer was allocated equally among each of the trusts. In addition, for
all the trusts in the First Trust Fund Complex, Mr. Nielson was paid annual
compensation of $10,000 to serve as the Lead Independent Trustee, Mr. Kadlec was
paid annual compensation of $5,000 to serve as Chairman of the Audit Committee,
Dr. Erickson was paid annual compensation of $2,500 to serve as Chairman of the
Valuation Committee and Mr. Keith was paid annual compensation of $2,500 to
serve as Chairman of the Nominating and Governance Committee. This annual
compensation was allocated equally among each of the trusts in the First Trust
Fund Complex.
Effective January 1, 2012, each Independent Trustee is paid a fixed annual
retainer of $125,000 per year and an annual per fund fee of $4,000 for each
closed-end fund or other actively managed fund and $1,000 for each index fund in
the First Trust Fund Complex. The fixed annual retainer is allocated pro rata
among each fund in the First Trust Fund Complex based on net assets.
Additionally, the Lead Independent Trustee is paid $15,000 annually, the
Chairman of the Audit Committee is paid $10,000 annually, and each of the
Chairmen of the Nominating and Governance Committee and the Valuation Committee
is paid $5,000 annually to serve in such capacities, with such compensation
allocated pro rata among each fund in the First Trust Fund Complex based on net
assets. Trustees are also reimbursed by the investment companies in the First
Trust Fund Complex for travel and out-of-pocket expenses incurred in connection
with all meetings. Each Committee Chairman and the Lead Independent Trustee
currently serve a two-year term expiring December 31, 2013 before rotating to
serve as a Chairman of another Committee or as Lead Independent Trustee.
Effective January 1, 2014, each Committee Chairman and the Lead Independent
Trustee will rotate every three years.
-21-
The number of Board meetings held by each Fund during its last fiscal year
is shown in Schedule 1 hereto.
The aggregate fees and expenses paid to all Trustees by each Fund for its
last fiscal year (including reimbursement for travel and out-of-pocket expenses)
amounted to the following:
---------------------------------------------------------------------------------------------------------------------------
AGGREGATE FEES AND
FUND EXPENSES PAID
---------------------------------------------------------------------------------------------- ----------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND $26,760
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND $37,854
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND $28,891
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND $30,858
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST MORTGAGE INCOME FUND $24,492
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II $26,144
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND $22,673
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND $25,781
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST ACTIVE DIVIDEND INCOME FUND $24,562
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND $46,393
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND $36,626
---------------------------------------------------------------------------------------------- ----------------------------
The following table sets forth certain information regarding the
compensation of each Fund's Trustees (including reimbursement for travel and
out-of-pocket expenses) for each Fund's most recently completed fiscal year. The
Funds have no retirement or pension plans. The officers and the Interested
Trustee of each Fund receive no compensation from the Funds for serving in such
capacities.
-22-
AGGREGATE COMPENSATION FOR EACH FUND'S FISCAL YEAR
-----------------------------------------------------------------------------------------------------------------------------
INTERESTED INDEPENDENT
TRUSTEE TRUSTEES
------------------------------------------------------- ------------ ------------------------------------------------------
James A. Richard E. Thomas R. Robert F. Niel B.
FUND Bowen Erickson Kadlec Keith Nielson
------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES $0 $6,646 $6,635 $6,702 $6,777
DIVIDEND & INCOME FUND (1)
------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND (1) $0 $9,422 $9,308 $9,600 $9,524
------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
FIRST TRUST ENHANCED EQUITY INCOME FUND (2) $0 $7,224 $7,105 $7,363 $7,199
------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (2) $0 $7,717 $7,579 $7,876 $7,686
------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
FIRST TRUST MORTGAGE INCOME FUND (3) $0 $6,073 $6,083 $6,103 $6,233
------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II (3) $0 $6,485 $6,480 $6,536 $6,643
------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (2) $0 $5,669 $5,608 $5,739 $5,657
------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL
OPPORTUNITIES FUND (1) $0 $6,401 $6,399 $6,447 $6,534
------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
FIRST TRUST ACTIVE DIVIDEND INCOME FUND (1) $0 $6,096 $6,105 $6,128 $6,233
------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND (3) $0 $11,552 $11,358 $11,826 $11,657
------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND $0 $9,114 $9,011 $9,280 $9,221
------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
TOTAL COMPENSATION FOR SERVING THE FIRST TRUST $0 $276,500 $271,500 $282,250 $275,249
FUND COMPLEX (4)
-----------------------------------------------------------------------------------------------------------------------------
1 For fiscal year ended November 30, 2012.
2 For fiscal year ended December 31, 2012.
3 For fiscal year ended October 31, 2012.
4 For the calendar year ended December 31, 2012. Compensation includes, with
respect to certain ETFs, compensation paid by the Advisor rather than by
the ETF directly pursuant to the terms of the advisory agreement between
the ETF and the Advisor.
-23-
ATTENDANCE AT ANNUAL MEETINGS OF SHAREHOLDERS
The policy of the Board is to have as many Trustees as possible in
attendance at annual meetings of shareholders. The policy of the Nominating and
Governance Committee relating to attendance by Trustees at annual meetings of
shareholders is contained in the Funds' Nominating and Governance Committee
Charter, which is available on each Fund's website located at
http://www.ftportfolios.com. In addition, the Board's attendance at last year's
annual shareholder meeting is available on each Fund's website located at
http://www.ftportfolios.com. To find the Board's attendance, select your Fund
under the "Closed-End Funds" tab, select the "News & Literature" link, and go to
the "Shareholder Updates and Information" heading.
AUDIT COMMITTEE REPORT
The role of the Audit Committee is to assist the Board of Trustees in its
oversight of the Funds' accounting and financial reporting process. The Audit
Committee operates pursuant to a charter (the "Charter") that was most recently
reviewed and approved by the Board of Trustees on December 10, 2012, a copy of
which is attached as Exhibit A hereto, and is available on the Funds' website
located at http://www.ftportfolios.com. As set forth in the Charter, management
of the Funds is responsible for maintaining appropriate systems for accounting
and internal controls and the audit process. The Funds' independent auditors are
responsible for planning and carrying out proper audits of the Funds' financial
statements and expressing an opinion as to their conformity with accounting
principles generally accepted in the United States of America.
In performing its oversight function, the Audit Committee reviewed and
discussed with management and the independent auditors, Deloitte & Touche LLP,
the audited financial statements of the First Trust Mortgage Income Fund, the
First Trust Strategic High Income Fund II and the First Trust High Income
Long/Short Fund for the fiscal year ended October 31, 2012 at a meeting held on
December 10, 2012; the Macquarie/First Trust Global Infrastructure/Utilities
Dividend & Income Fund, the First Trust Energy Income and Growth Fund, the First
Trust Specialty Finance and Financial Opportunities Fund, the First Trust Active
Dividend Income Fund and the First Trust Energy Infrastructure Fund for the
fiscal year ended November 30, 2012 at a meeting held on January 22, 2013; and
the First Trust Enhanced Equity Income Fund, the First Trust/Aberdeen Global
Opportunity Income Fund and the First Trust/Aberdeen Emerging Opportunity Fund
for the fiscal year ended December 31, 2012 at a meeting held on February 20,
2013, and discussed the audits of such financial statements with the independent
auditors and management.
In addition, the Audit Committee discussed with the independent auditors
the accounting principles applied by the Funds and such other matters brought to
the attention of the Audit Committee by the independent auditors as required by
the Public Company Accounting Oversight Board ("PCAOB") AU 380, Communication
with Audit Committees. The Audit Committee also received from the independent
auditors the written disclosures and letter required by PCAOB Ethics and
Independence Rule 3526, Communication with Audit Committees Concerning
Independence, delineating relationships between the independent auditors and the
Funds and discussed the impact that any such relationships may have on the
objectivity and independence of the independent auditors.
The members of the Funds' Audit Committee are not full-time employees of
the Funds and are not performing the functions of auditors or accountants. As
such, it is not the duty or responsibility of the Audit Committee or its members
to conduct "field work" or other types of auditing or accounting reviews or
procedures or to set auditor independence standards. Members of the Funds' Audit
Committee necessarily rely on the information provided to them by Fund
management and the independent auditors. Accordingly, the Audit Committee's
considerations and discussions referred to
-24-
above do not assure that the audits of the Funds' financial statements have been
carried out in accordance with generally accepted auditing standards, that the
financial statements are presented in accordance with generally accepted
accounting principles or that the independent auditors are in fact
"independent."
Based on its consideration of the Funds' audited financial statements and
the discussions referred to above with Fund management and Deloitte & Touche
LLP, and subject to the limitations on the responsibilities and role of the
Audit Committee as set forth in the Charter and discussed above, the Audit
Committee recommended to the Board the inclusion of each Fund's audited
financial statements in each Fund's Annual Report to Shareholders for the years
ended October 31, November 30 and December 31, 2012, respectively.
Submitted by the Audit Committee of the Funds:
Richard E. Erickson
Thomas R. Kadlec
Robert F. Keith
Niel B. Nielson
INDEPENDENT AUDITORS' FEES
Deloitte & Touche has been selected to serve as the independent auditors
for each Fund for its current fiscal year, and acted as the independent auditors
for each Fund for its most recently completed fiscal year. Deloitte & Touche has
advised the Funds that, to the best of its knowledge and belief, Deloitte &
Touche professionals did not have any direct or material indirect ownership
interest in the Funds inconsistent with independent professional standards
pertaining to independent registered public accounting firms. Representatives of
Deloitte & Touche are not expected to be present at the Meeting, but will have
the opportunity to make a statement if they desire to do so and will be
available should any matter arise requiring their presence. In reliance on Rule
32a-4 under the 1940 Act, each Fund is not seeking shareholder ratification of
the selection of Deloitte & Touche as independent auditors.
-25-
Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees
During each of the last two fiscal years of the Funds, Deloitte & Touche
has billed each Fund and the Advisor for the following fees:
--------------------------------------------------------------------------------------------------------------------------
AUDIT FEES (1) AUDIT-RELATED TAX ALL OTHER
FEES FEES (3) FEES
---------------------------------- -------------------- -------------------- -------------------- --------------------
FEES BILLED TO: 2011 2012 2011 (2) 2012 2011 2012 2011 2012
---------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
MACQUARIE/FIRST TRUST GLOBAL
INFRASTRUCTURE/ UTILITIES
DIVIDEND & INCOME FUND (4)
Fund $48,000 $49,000 $0 $0 $5,200 $0 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
---------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
FIRST TRUST ENERGY INCOME AND
GROWTH FUND (4)
Fund $81,000 $91,500 $0 $0 $41,610 $38,400 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
---------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
FIRST TRUST ENHANCED EQUITY
INCOME FUND (5)
Fund $39,000 $38,000 $0 $0 $5,200 $0 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
---------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
FIRST TRUST/ABERDEEN GLOBAL
OPPORTUNITY INCOME FUND (5)
Fund $49,000 $53,000 $0 $0 $5,200 $0 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
---------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
FIRST TRUST MORTGAGE INCOME
FUND (6)
Fund $40,000 $67,000 $0 $0 $5,200 $0 $0 $0
Advisor N/A N/A $3,000 $0 $0 $0 $0 $0
---------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
FIRST TRUST STRATEGIC HIGH
INCOME FUND II (6)
Fund $64,479 $90,500 $0 $0 $5,200 $0 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
---------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
FIRST TRUST/ABERDEEN EMERGING
OPPORTUNITY FUND (5)
Fund $49,000 $53,000 $0 $0 $6,570 $4,090 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
---------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
FIRST TRUST SPECIALTY FINANCE
AND FINANCIAL OPPORTUNITIES
FUND (4)
Fund $44,000 $42,000 $0 $0 $5,200 $0 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
---------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
FIRST TRUST ACTIVE DIVIDEND
INCOME FUND (4)
Fund $29,800 $28,000 $0 $0 $4,500 $0 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
---------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
FIRST TRUST HIGH INCOME
LONG/SHORT FUND (6)
Fund $51,000 $52,000 $0 $0 $5,200 $0 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
---------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
FIRST TRUST ENERGY
INFRASTRUCTURE FUND (4), (7)
Fund $46,000 $44,000 $0 $0 $0 $0 $0 $0
Advisor N/A N/A $21,000 $0 $0 $0 $0 $0
---------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
1 These fees were the aggregate fees billed for professional services for
the audit of the Fund's annual financial statements and services that are
normally provided in connection with statutory and regulatory filings or
engagements.
2 With respect to First Trust Energy Infrastructure Fund, these fees were
for audits and issuance of consents related to the organization and
initial offering of such Fund. With respect to First Trust Mortgage Income
Fund, these fees were for a consent related to a shelf offering.
3 These fees were for tax consultation or tax return preparation.
4 These fees were for the fiscal years ended November 30.
5 These fees were for the fiscal years ended December 31.
6 These fees were for the fiscal years ended October 31.
7 For the 2011 fiscal period, these fees were for the period from inception
on September 27, 2011 through November 30, 2011.
-26-
Non-Audit Fees
During each of the last two fiscal years of the Funds, Deloitte & Touche
has billed the Fund and the Advisor for the non-audit fees listed below for
services provided to the entities indicated.
AGGREGATE NON-AUDIT FEES
----------------------------------------------------------------------------------------------------------------
FUND 2011 2012
-------------------------------------------------------------------------------- -------------- --------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND (1)
Fund $5,200 $0
Advisor $6,200 (5) $4,120 (6)
-------------------------------------------------------------------------------- -------------- --------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND (1)
Fund $41,610 $38,400
Advisor $6,200 (5) $4,120 (6)
-------------------------------------------------------------------------------- -------------- --------------
FIRST TRUST ENHANCED EQUITY INCOME FUND (2)
Fund $5,200 $0
Advisor $6,200 (5) $4,120 (6)
-------------------------------------------------------------------------------- -------------- --------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (2)
Fund $5,200 $0
Advisor $6,200 (5) $4,120 (6)
-------------------------------------------------------------------------------- -------------- --------------
FIRST TRUST MORTGAGE INCOME FUND (3)
Fund $5,200 $0
Advisor $3,720 (5) $6,600 (6)
-------------------------------------------------------------------------------- -------------- --------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II (3)
Fund $5,200 $0
Advisor $3,720 (5) $6,600 (6)
-------------------------------------------------------------------------------- -------------- --------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (2)
Fund $6,570 $4,090
Advisor $6,200 (5) $4,120 (6)
-------------------------------------------------------------------------------- -------------- --------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND (1)
Fund $5,200 $0
Advisor $6,200 (5) $4,120 (6)
-------------------------------------------------------------------------------- -------------- --------------
FIRST TRUST ACTIVE DIVIDEND INCOME FUND (1)
Fund $4,500 $0
Advisor $6,200 (5) $4,120 (6)
-------------------------------------------------------------------------------- -------------- --------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND (3)
Fund $5,200 $0
Advisor $3,720 (5) $6,600 (6)
-------------------------------------------------------------------------------- -------------- --------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND (1), (4)
Fund $0 $0
Advisor $2,480 (5) $4,120 (6)
----------------------------------------------------------------------------------------------------------------
1 These fees were for the fiscal years ended November 30.
2 These fees were for the fiscal years ended December 31.
3 These fees were for the fiscal years ended October 31.
4 For the 2011 fiscal period, these fees were for the period from inception
on September 27, 2011 through November 30, 2011.
5 These fees relate to partnership tax compliance matters.
6 These fees relate to partnership tax compliance matters and 2011 federal
and state tax matters.
Pre-Approval
Pursuant to its Charter and its Audit and Non-Audit Services Pre-Approval
Policy, the Audit Committee of each Fund is responsible for the pre-approval of
all audit services and permitted non-audit services (including the fees and
terms thereof) to be performed for each Fund by its independent auditors. The
Chairman of the Audit Committee is authorized to give such pre-approvals on
behalf of the Audit Committee up to $25,000 and report any such pre-approval to
the full Audit Committee.
-27-
The Audit Committee is also responsible for the pre-approval of the
independent auditors' engagements for non-audit services with the Advisor and
any entity controlling, controlled by or under common control with the Advisor
that provides ongoing services to the respective Fund, if the engagement relates
directly to the operations and financial reporting of the Funds, subject to the
de minimis exceptions for non-audit services described in Rule 2-01 of
Regulation S-X. If the independent auditors have provided non-audit services to
the Advisor or any entity controlling, controlled by or under common control
with the Advisor that provides ongoing services to the respective Fund that were
not pre-approved pursuant to its policies, the Audit Committee will consider
whether the provision of such non-audit services is compatible with the
auditors' independence.
None of the Audit Fees, Audit-Related Fees, Tax Fees, or All Other Fees,
if any, or the Aggregate Non-Audit Fees disclosed above that were required to be
pre-approved by the Audit Committee pursuant to its Pre-Approval Policy were
pre-approved by the Audit Committee pursuant to the pre-approval exceptions
included in Regulation S-X.
Because the Audit Committee has not been informed of any such services,
the Audit Committee of each Fund has not considered whether the provision of
non-audit services that were rendered to the Advisor and any entity controlling,
controlled by, or under common control with the Advisor that provides ongoing
services to the respective Fund that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the
principal accountant's independence.
ADDITIONAL INFORMATION
SHAREHOLDER PROPOSALS
Shareholder Proposals for Inclusion in the Funds' Proxy Statement. To be
considered for presentation at the Joint Annual Meetings of Shareholders of the
Funds to be held in 2014 and included in a Fund's proxy statement relating to
such meeting, a shareholder proposal submitted pursuant to Rule 14a-8 of the
1934 Act must be received at the offices of the applicable Fund at 120 East
Liberty Drive, Suite 400, Wheaton, Illinois 60187, not later than November 22,
2013. Such a proposal will be included in the Fund's proxy statement if it meets
the requirements of Rule 14a-8. Timely submission of a proposal does not mean
that such proposal will be included in a Fund's proxy statement.
Other Shareholder Proposals. Under the Funds' By-Laws, any proposal to
elect any person nominated by shareholders for election as Trustee and any other
proposals by shareholders may only be brought before an annual meeting of a Fund
if timely written notice (the "Shareholder Notice") is provided to the Secretary
of the Fund and the other conditions summarized below are met. In accordance
with the advance notice provisions included in the Funds' By-Laws, unless a
greater or lesser period is required under applicable law, to be timely, the
Shareholder Notice must be delivered to or mailed and received at the Fund's
address, 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, Attn: W.
Scott Jardine, Secretary, not less than forty-five (45) days nor more than sixty
(60) days prior to the first anniversary date of the date of the proxy statement
released to shareholders for the preceding year's annual meeting. However, if
and only if the annual meeting is not scheduled to be held within a period that
commences thirty (30) days before the first anniversary date of the annual
meeting for the preceding year and ends thirty (30) days after such anniversary
date (an annual meeting date outside such period being referred to herein as an
"Other Annual Meeting Date"), such Shareholder Notice must be given as described
above by the later of the close of business on (i) the date forty-five (45) days
prior to such Other Annual Meeting Date or (ii) the tenth (10th) business day
following the date such Other Annual Meeting Date is first publicly announced or
disclosed.
-28-
Any shareholder submitting a nomination of any person or persons (as the
case may be) for election as a Trustee or Trustees of a Fund is required to
deliver, as part of such Shareholder Notice: (i) a statement in writing setting
forth: (A) the name, age, date of birth, business address, residence address and
nationality of the person or persons to be nominated; (B) the class or series
and number of all Shares of the Fund owned of record or beneficially by each
such person or persons, as reported to such shareholder by such nominee(s); (C)
any other information regarding each such person required 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 1934 Act (or any successor provision
thereto); (D) any other information regarding the person or persons to be
nominated that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitation of proxies for
election of trustees or directors pursuant to Section 14 of the 1934 Act and the
rules and regulations promulgated thereunder; and (E) whether such shareholder
believes any nominee is or will be an "interested person" of the Fund (as
defined in the 1940 Act) and, if not an "interested person," information
regarding each nominee that will be sufficient for the Fund to make such
determination; and (ii) the written and signed consent of any person nominated
to be named as a nominee and to serve as a Trustee if elected. In addition, the
Trustees may require any proposed nominee to furnish such other information as
they may reasonably require or deem necessary to determine the eligibility of
such proposed nominee to serve as a Trustee.
Without limiting the foregoing, any shareholder who gives a Shareholder
Notice of any matter proposed to be brought before a shareholder meeting
(whether or not involving nominees for Trustees) is required to deliver, as part
of such Shareholder Notice: (i) the description of and text of the proposal to
be presented; (ii) a brief written statement of the reasons why such shareholder
favors the proposal; (iii) such shareholder's name and address as they appear on
the Fund's books; (iv) any other information relating to the shareholder that
would be required to be disclosed in a proxy statement or other filings required
to be made in connection with the solicitation of proxies with respect to the
matter(s) proposed pursuant to Section 14 of the 1934 Act and the rules and
regulations promulgated thereunder; (v) the class or series and number of all
Shares of the Fund owned beneficially and of record by such shareholder; (vi)
any material interest of such shareholder in the matter proposed (other than as
a shareholder); (vii) a representation that the shareholder intends to appear in
person or by proxy at the shareholder meeting to act on the matter(s) proposed;
(viii) if the proposal involves nominee(s) for Trustees, a description of all
arrangements or understandings between the shareholder and each proposed nominee
and any other person or persons (including their names) pursuant to which the
nomination(s) are to be made by the shareholder; and (ix) in the case of a
shareholder (a "Beneficial Owner") that holds Shares entitled to vote at the
meeting through a nominee or "street name" holder of record, evidence
establishing such Beneficial Owner's indirect ownership of, and entitlement to
vote, Shares at the meeting of shareholders. Shares "beneficially owned" means
all Shares which such person is deemed to beneficially own pursuant to Rules
13d-3 and 13d-5 under the 1934 Act.
In addition, the By-Laws provide that, unless required by federal law, no
matters shall be considered at or brought before any annual or special meeting
unless such matter has been deemed a proper matter for shareholder action by at
least sixty-six and two-thirds percent (66-2/3%) of the Trustees. Timely
submission of a proposal does not mean that such proposal will be brought before
the meeting.
SHAREHOLDER COMMUNICATIONS
Shareholders of a Fund who want to communicate with the Board of Trustees
or any individual Trustee should write the Fund to the attention of the Fund
Secretary, W. Scott Jardine. The letter should indicate that you are a Fund
shareholder. If the communication is intended for a specific Trustee and so
indicates, it will be sent only to that Trustee. If a communication does not
indicate a specific Trustee, it
-29-
will be sent to the Chairman of the Nominating and Governance Committee of the
Board and the independent legal counsel to the Independent Trustees for further
distribution as deemed appropriate by such persons.
INVESTMENT ADVISOR, SUB-ADVISORS, ADMINISTRATOR AND TRANSFER AGENT
First Trust Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton,
Illinois 60187, serves as the Funds' investment advisor. First Trust Advisors is
also responsible for providing certain clerical, bookkeeping and other
administrative services to each Fund and also provides fund reporting services
to each Fund for a flat annual fee. Four Corners Capital Management, LLC, 2005
Market Street, Philadelphia, Pennsylvania 19103, and Macquarie Capital
Investment Management LLC, 125 West 55th Street, New York, New York 10019, serve
as the investment sub-advisors to Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund. Energy Income Partners, LLC, 49
Riverside Avenue, Westport, Connecticut 06880, serves as the investment
sub-advisor to First Trust Energy Income and Growth Fund and First Trust Energy
Infrastructure Fund. An affiliate of the Advisor owns an interest in Energy
Income Partners, LLC. Chartwell Investment Partners, L.P., 1235 Westlakes Drive,
Berwyn, Pennsylvania 19312, serves as the investment sub-advisor to First Trust
Enhanced Equity Income Fund. Aberdeen Asset Management Inc., 1735 Market Street,
32nd Floor, Philadelphia, Pennsylvania 19103, serves as the investment
sub-advisor to First Trust/Aberdeen Global Opportunity Income Fund and First
Trust/Aberdeen Emerging Opportunity Fund. Brookfield Investment Management Inc.,
Three World Financial Center, 200 Vesey Street, 10th Floor, New York, New York
10281, serves as the investment sub-advisor to First Trust Strategic High Income
Fund II and First Trust Mortgage Income Fund. Confluence Investment Management
LLC, 349 Marshall Avenue, Suite 302, St. Louis, Missouri 63119, serves as the
investment sub-advisor to First Trust Specialty Finance and Financial
Opportunities Fund. Aviance Capital Management, LLC, 2080 Ringling Boulevard,
Sarasota, Florida 34237, serves as the investment sub-advisor to First Trust
Active Dividend Income Fund. An affiliate of the Advisor owns an interest in
Aviance Capital Management, LLC. MacKay Shields LLC, 1345 Avenue of the
Americas, 43rd Floor, New York, New York 10105, serves as the investment
sub-advisor to First Trust High Income Long/Short Fund.
BNY Mellon Investment Servicing (US) Inc., 301 Bellevue Parkway,
Wilmington, Delaware 19809, acts as the administrator, accounting agent and
transfer agent to the Funds.
SECTION 30(h) AND SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 30(h) of the 1940 Act and Section 16(a) of the 1934 Act require
the Funds' officers and Trustees, certain persons affiliated with First Trust
Advisors and any sub-advisor and persons who beneficially own more than 10% of a
Fund's Shares to file reports of ownership and changes of ownership with the SEC
and the NYSE or NYSE MKT LLC, as applicable, and to furnish the Funds with
copies of all Section 16(a) forms they file. Based solely upon a review of
copies of such forms received by the Funds and certain written representations,
the Funds believe that during the fiscal years ended October 31, 2012, November
30, 2012 and December 31, 2012, all such filing requirements applicable to such
persons were met.
FISCAL YEAR
The fiscal year end for First Trust Mortgage Income Fund, First Trust
Strategic High Income Fund II and First Trust High Income Long/Short Fund was
October 31, 2012. The fiscal year end for Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund, First Trust Energy Income and
Growth Fund, First Trust Specialty Finance and Financial Opportunities Fund,
First Trust Active Dividend Income Fund and First Trust Energy Infrastructure
Fund was November 30, 2012. The
-30-
fiscal year end for First Trust Enhanced Equity Income Fund, First
Trust/Aberdeen Global Opportunity Income Fund and First Trust/Aberdeen Emerging
Opportunity Fund was December 31, 2012.
DELIVERY OF CERTAIN DOCUMENTS
Annual reports will be sent to shareholders of record of each Fund
following the Fund's fiscal year end. Each Fund will furnish, without charge, a
copy of its annual report and/or semi-annual report as available upon request.
Such written or oral requests should be directed to the Fund at 120 East Liberty
Drive, Suite 400, Wheaton, Illinois 60187 or by calling (800) 988-5891.
Please note that only one annual or semi-annual report, proxy statement or
Notice of Internet Availability of Proxy Materials (as applicable) may be
delivered to two or more shareholders of a Fund who share an address, unless the
Fund has received instructions to the contrary. To request a separate copy of an
annual or semi-annual report, proxy statement or Notice of Internet Availability
of Proxy Materials (as applicable), or for instructions as to how to request a
separate copy of such documents or as to how to request a single copy if
multiple copies of such documents are received, shareholders should contact the
applicable Fund at the address and phone number set forth above. Pursuant to a
request, a separate copy will be delivered promptly.
OTHER MATTERS TO COME BEFORE THE MEETING
No business other than the matter described above is expected to come
before the Meeting, but should any other matter requiring a vote of shareholders
arise, including any question as to an adjournment or postponement of the
Meeting, the persons named on the enclosed proxy card will vote thereon
according to their best judgment in the interests of the Funds.
March 15, 2013
--------------------------------------------------------------------------------
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS ARE THEREFORE
URGED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD AS SOON AS POSSIBLE IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
--------------------------------------------------------------------------------
-31-
This page intentionally left blank.
SCHEDULE 1
NUMBER OF BOARD AND COMMITTEE MEETINGS
HELD DURING EACH FUND'S LAST FISCAL YEAR
--------------------------------------------------------------------------------------------------------------------------
NOMINATING
AND
AUDIT EXECUTIVE GOVERNANCE VALUATION
BOARD COMMITTEE COMMITTEE COMMITTEE COMMITTEE
FUND MEETINGS MEETINGS MEETINGS MEETINGS MEETINGS
--------------------------------- --------------- ---------------- ---------------- ---------------- ----------------
MACQUARIE/FIRST TRUST GLOBAL 6 8 4 4 4
INFRASTRUCTURE/ UTILITIES
DIVIDEND & INCOME FUND (1)
--------------------------------- --------------- ---------------- ---------------- ---------------- ----------------
FIRST TRUST ENERGY INCOME AND 8 8 5 4 4
GROWTH FUND (1)
--------------------------------- --------------- ---------------- ---------------- ---------------- ----------------
FIRST TRUST ENHANCED EQUITY 6 8 4 4 4
INCOME FUND (2)
--------------------------------- --------------- ---------------- ---------------- ---------------- ----------------
FIRST TRUST/ABERDEEN GLOBAL 6 8 12 4 4
OPPORTUNITY INCOME FUND (2)
--------------------------------- --------------- ---------------- ---------------- ---------------- ----------------
FIRST TRUST MORTGAGE INCOME 6 8 12 4 4
FUND (3)
--------------------------------- --------------- ---------------- ---------------- ---------------- ----------------
FIRST TRUST STRATEGIC HIGH 7 8 12 4 4
INCOME FUND II (3)
--------------------------------- --------------- ---------------- ---------------- ---------------- ----------------
FIRST TRUST/ABERDEEN EMERGING 6 8 4 4 4
OPPORTUNITY FUND (2)
--------------------------------- --------------- ---------------- ---------------- ---------------- ----------------
FIRST TRUST SPECIALTY FINANCE
AND FINANCIAL OPPORTUNITIES 6 8 4 4 4
FUND (1)
--------------------------------- --------------- ---------------- ---------------- ---------------- ----------------
FIRST TRUST ACTIVE DIVIDEND 7 8 4 4 4
INCOME FUND (1)
--------------------------------- --------------- ---------------- ---------------- ---------------- ----------------
FIRST TRUST HIGH INCOME 6 8 12 4 4
LONG/SHORT FUND (3)
--------------------------------- --------------- ---------------- ---------------- ---------------- ----------------
FIRST TRUST ENERGY 6 8 12 4 4
INFRASTRUCTURE FUND (1)
--------------------------------------------------------------------------------------------------------------------------
1 For fiscal year ended November 30, 2012.
2 For fiscal year ended December 31, 2012.
3 For fiscal year ended October 31, 2012.
This page intentionally left blank.
EXHIBIT A
AUDIT COMMITTEE CHARTER
I. PURPOSE
The Audit Committee (the "Committee") is appointed by the Boards of
Trustees (the "Boards") of investment companies (the "Funds") advised by First
Trust Advisors L.P. ("Fund Management") for the following purposes:
1. to oversee the accounting and financial reporting processes of
each Fund and its internal controls and, as the Audit Committee deems
appropriate, to inquire into the internal controls of certain third-party
service providers;
2. to oversee the quality and integrity of each Fund's financial
statements and the independent audit thereof;
3. to oversee, or, as appropriate, assist Board oversight of, each
Fund's compliance with legal and regulatory requirements that relate to
the Fund's accounting and financial reporting, internal controls and
independent audits; and
4. to approve, prior to the appointment, the engagement of each
Fund's independent auditor and, in connection therewith, to review and
evaluate the qualifications, independence and performance of the Fund's
independent auditor.
II. COMMITTEE ORGANIZATION AND COMPOSITION
A. Size and Membership Requirements.
1. The Committee shall be composed of at least three members, all of
whom shall be trustees of the Funds. Each member of the Committee, and a
Committee chairperson, shall be appointed by the Board on the
recommendation of the Nominating and Governance Committee.
2. Each member of the Committee shall be independent of the Fund and
must be free of any relationship that, in the opinion of the Board, would
interfere with the exercise of independent judgment as a Committee member.
With respect to the Funds which are closed-end funds or open-end
exchange-traded funds ("ETFs"), each member must meet the independence and
experience requirements of the New York Stock Exchange, NYSE Arca, NYSE
MKT LLC or the NASDAQ Stock Market (as applicable), and Section 10A of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule
10A-3 thereunder, and other applicable rules and regulations of the
Securities and Exchange Commission ("SEC"). Included in the foregoing is
the requirement that no member of the Committee be an "interested person"
of the Funds within the meaning of Section 2(a)(19) of the Investment
Company Act of 1940, as amended (the "1940 Act"), nor shall any Committee
member accept, directly or indirectly, any consulting, advisory or other
compensatory fee from the Funds (except in the capacity as a Board or
committee member).
3. At least one member of the Committee shall have been determined
by the Board, exercising its business judgment, to qualify as an "audit
committee financial expert" as defined by the SEC.
4. With respect to Funds whose shares are listed on NYSE Arca or on
the New York Stock Exchange, each member of the Committee shall have been
determined by the Board, exercising its business judgment, to be
"financially literate" as required by the New York Stock Exchange or NYSE
Arca (as applicable). In addition, at least one member of the Committee
shall have been determined by the Board, exercising its business judgment,
to have "accounting or related financial management expertise," as
required by the New York Stock Exchange or NYSE Arca (as applicable). Such
member may, but need not be, the same person as the Funds' "audit
committee financial expert." With respect to Funds that are closed-end
funds or ETFs whose shares are listed on the NYSE MKT LLC or the NASDAQ
Stock Market, each member of the Committee shall be able to read and
understand fundamental financial statements, including a Fund's balance
sheet, income statement and cash flow statement. In addition, at least one
member of the Committee shall have been determined by the Board,
exercising its business judgment, to be "financially sophisticated," as
required by the NYSE MKT LLC or the NASDAQ Stock Market (as applicable). A
member whom the Board determines to be the Funds' "audit committee
financial expert" shall be presumed to qualify as financially
sophisticated.
5. With respect to Funds that are closed-end funds or ETFs,
Committee members shall not serve simultaneously on the audit committee of
more than two public companies, in addition to their service on the
Committee.
B. Frequency of Meetings.
The Committee will ordinarily meet once for every regular meeting of the
Board. The Committee may meet more or less frequently as appropriate, but no
less than twice per year.
C. Term of Office.
Committee members shall serve until they resign or are removed or replaced
by the Board.
III. RESPONSIBILITIES
A. With respect to Independent Auditors:
1. The Committee shall be responsible for the appointment or
replacement (subject, if applicable, to Board and/or shareholder
ratification), compensation, retention and oversight of the work of any
registered public accounting firm engaged (including resolution of
disagreements between management and the auditor regarding financial
reporting) for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for the Funds ("External
Auditors"). The External Auditors shall report directly to the Committee.
2. The Committee shall meet with the External Auditors and Fund
Management to review the scope, fees, audit plans and staffing of the
proposed audits for each fiscal year. At the conclusion of the audit, the
Committee shall review such audit results, including the External
Auditor's evaluation of the Fund's financial and internal controls, any
comments or recommendations of the External Auditors, any audit problems
or difficulties and Fund Management's response, including any restrictions
on the scope of the External Auditor's
A-2
activities or on access to requested information, any significant
disagreements with Fund Management, any accounting adjustments noted or
proposed by the auditor but not made by the Fund, any communications
between the audit team and the audit firm's national office regarding
auditing or accounting issues presented by the engagement, any significant
changes required from the originally planned audit programs and any
adjustments to the financial statements recommended by the External
Auditors.
3. The Committee shall meet with the External Auditors in the
absence of Fund Management, as necessary.
4. The Committee shall pre-approve all audit services and permitted
non-audit services (including the fees and terms thereof) to be performed
for the Fund by its External Auditors in accordance with the Audit and
Non-Audit Services Pre-Approval Policy. The Chairman of the Committee is
authorized to give such pre-approvals on behalf of the Committee where the
fee for such engagement does not exceed the amount specified in the Audit
and Non-Audit Services Pre-Approval Policy, and shall report any such
pre-approval to the full Committee.
5. The Committee shall pre-approve the External Auditor's
engagements for non-audit services to Fund Management and any entity
controlling, controlled by or under common control with Fund Management
that provides ongoing services to the Fund, if the engagement relates
directly to the operations and financial reporting of the Fund, subject to
the de minimis exceptions for non-audit services described in Rule 2-01 of
Regulation S-X. The Chairman of the Committee is authorized to give such
pre-approvals on behalf of the Committee, and shall report any such
pre-approval to the full Committee.
6. If the External Auditors have provided non-audit services to Fund
Management and any entity controlling, controlled by or under common
control with Fund Management that provides ongoing services to the Fund
that were not pre-approved pursuant to the de minimis exception, the
Committee shall consider whether the provision of such non-audit services
is compatible with the External Auditor's independence.
7. The Committee shall obtain and review a report from the External
Auditors at least annually (including a formal written statement
delineating all relationships between the auditors and the Fund consistent
with PCAOB Ethics and Independence Rule 3526) regarding (a) the External
Auditor's internal quality-control procedures; (b) any material issues
raised by the most recent internal quality-control review, or peer review,
of the firm, or by an inquiry or investigation by governmental or
professional authorities within the preceding five years, respecting one
or more independent audits carried out by the firm; (c) any steps taken to
deal with any such issues; and (d) the External Auditor's independence,
including all relationships between the External Auditors and the Fund and
its affiliates; and evaluating the qualifications, performance and
independence of the External Auditors, including their membership in the
SEC practice section of the AICPA and their compliance with all applicable
requirements for independence and peer review, and a review and evaluation
of the lead partner, taking into account the opinions of management and
discussing such reports with the External Auditors. The Committee shall
present its conclusions with respect to the External Auditors to the
Board.
A-3
8. The Committee shall review reports and other information provided
to it by the External Auditors regarding any illegal acts that the
External Auditors should discover (whether or not perceived to have a
material effect on the Fund' s financial statements), in accordance with
and as required by Section 10A(b) of the Exchange Act.
9. The Committee shall ensure the rotation of the lead (or
concurring) audit partner having primary responsibility for the audit and
the audit partner responsible for reviewing the audit as required by law,
and further considering the rotation of the independent auditor firm
itself.
10. The Committee shall establish and recommend to the Board for
ratification a policy of the Funds with respect to the hiring of employees
or former employees of the External Auditors who participated in the
audits of the Funds' financial statements.
11. The Committee shall take (and, where appropriate, recommend that
the Board take) appropriate action to oversee the independence of the
External Auditors.
12. The Committee shall report regularly to the Board on the results
of the activities of the Committee, including any issues that arise with
respect to the quality or integrity of the Funds' financial statements,
the Funds' compliance with legal or regulatory requirements, the
performance and independence of the Funds' External Auditors, or the
performance of the internal audit function, if any.
B. With respect to Fund Financial Statements:
1. The Committee shall meet to review and discuss with Fund
Management and the External Auditors the annual audited financial
statements of the Funds, major issues regarding accounting and auditing
principles and practices, and the Funds' disclosures under "Management's
Discussion and Analysis," and shall meet to review and discuss with Fund
Management the semi-annual financial statements of the Funds and the
Funds' disclosures under "Management's Discussion and Analysis."
2. The Committee shall review and discuss reports, both written and
oral, from the External Auditors or Fund Management regarding (a) all
critical accounting policies and practices to be used; (b) all alternative
treatments of financial information within generally accepted accounting
principles ("GAAP") for policies and practices that have been discussed
with management, including the ramifications of the use of such
alternative treatments and disclosures and the treatment preferred by the
External Auditors; (c) other material written communications between the
External Auditors and management, such as any management letter or
schedule of unadjusted differences; and (d) all non-audit services
provided to any entity in the investment company complex (as defined in
Rule 2-01 of Regulation S-X) that were not pre-approved by the Committee.
3. The Committee shall review disclosures made to the Committee by
the Funds' principal executive officer and principal financial officer
during their certification process for the Funds' periodic reports about
any significant deficiencies in the design or operation of internal
controls or material weaknesses therein and any fraud involving management
or other employees who have a significant role in the Funds' internal
controls.
A-4
4. The Committee shall discuss with the External Auditors the
matters required to be discussed by PCAOB AU Section 380 that arise during
the External Auditor's review of the Funds' financial statements.
5. The Committee shall review and discuss with management and the
External Auditors (a) significant financial reporting issues and judgments
made in connection with the preparation and presentation of the Funds'
financial statements, including any significant changes in the Funds'
selection or application of accounting principles and any major issues as
to the adequacy of the Funds' internal controls and any special audit
steps adopted in light of material control deficiencies, and (b) analyses
prepared by Fund Management or the External Auditors setting forth
significant financial reporting issues and judgments made in connection
with the preparation of the financial statements, including analyses of
the effects of alternative GAAP methods on the financial statements.
6. The Committee shall review and discuss with management and the
External Auditors the effect of regulatory and accounting initiatives on
the Funds' financial statements.
7. The Committee shall discuss with Fund Management the Funds' press
releases regarding financial results and dividends, as well as financial
information and earnings guidance provided to analysts and rating
agencies. This discussion may be done generally, consisting of discussing
the types of information to be disclosed and the types of presentations to
be made. The Chairman of the Committee shall be authorized to have these
discussions with Fund Management on behalf of the Committee, and shall
report to the Committee regarding any such discussions.
8. The Committee shall discuss with Fund Management the Funds' major
financial risk exposures and the steps Fund Management has taken to
monitor and control these exposures, including the Funds' risk assessment
and risk management policies and guidelines. In fulfilling its obligations
under this paragraph, the Committee may, as applicable, review in a
general manner the processes other Board committees have in place with
respect to risk assessment and risk management.
C. With respect to serving as a Qualified Legal Compliance Committee:
1. The Committee shall serve as the Funds' "qualified legal
compliance committee" ("QLCC") within the meaning of the rules of the SEC
and, in that regard, the following shall apply.
(i) The Committee shall receive and retain, in confidence,
reports of evidence of (a) a material violation of any federal or
state securities laws, (b) a material breach of a fiduciary duty
arising under any federal or state laws or (c) a similar material
violation of any federal or state law by a Fund or any of its
officers, trustees, employees or agents (a "Report of Material
Violation"). Reports of Material Violation may be addressed to the
Funds, attention W. Scott Jardine, at the address of the principal
offices of the Funds, which currently is 120 East Liberty Drive,
Wheaton, Illinois 60187, who shall forward the Report of Material
Violation to the Committee.
A-5
(ii) Upon receipt of a Report of Material Violation, the
Committee shall (a) inform the Fund's chief legal officer and chief
executive officer (or the equivalents thereof) of the report (unless
the Committee determines it would be futile to do so), and (b)
determine whether an investigation is necessary.
(iii) After considering the Report of a Material Violation,
the Committee shall do the following if it deems an investigation
necessary:
(1) Notify the full Board;
(2) Initiate an investigation, which may be conducted
either by the chief legal officer (or the equivalent thereof)
of the Fund or by outside attorneys; and
(3) Retain such additional expert personnel as the
Committee deems necessary.
(iv) At the conclusion of any such investigation, the
Committee shall:
(1) Recommend, by majority vote, that the Fund implement
an appropriate response to evidence of a material violation;
and
(2) Inform the chief legal officer and the chief
executive officer (or the equivalents thereof) and the Board
of the results of any such investigation and the appropriate
remedial measures to be adopted.
2. The Committee shall take all other action that it deems
appropriate in the event that the Fund fails in any material respect to
implement an appropriate response that the Committee, as the QLCC, has
recommended the Fund take.
D. Other Responsibilities:
1. The Committee shall receive, retain and handle complaints
received by the Funds regarding accounting, internal accounting controls,
or auditing matters from any person, whether or not an employee of the
Funds or Fund Management, and shall receive submissions of concerns
regarding questionable accounting or auditing matters by employees of the
Funds and Fund Management, administrator, principal underwriter, or any
other provider of accounting-related services for the Funds. All such
complaints and concerns shall be handled in accordance with the
Committee's procedures for operating as a QLCC, outlined in III.C above.
2. The Committee shall review, with fund counsel and independent
legal counsel, any legal matters that could have significant impact on the
Fund's financial statements or compliance policies and the findings of any
examination by a regulatory agency as they relate to financial statement
matters.
3. The Committee shall review and reassess the adequacy of this
charter on an annual basis and provide a recommendation to the Board for
approval of any proposed changes deemed necessary or advisable by the
Committee.
A-6
4. The Committee shall evaluate on an annual basis the performance
of the Committee.
5. The Committee shall review with the External Auditors and with
Fund Management the adequacy and effectiveness of the Funds' internal
accounting and financial controls.
6. The Committee shall discuss with Fund Management and the External
Auditors any correspondence with regulators or governmental agencies that
raise material issues regarding the Funds' financial statements or
accounting policies.
7. The Committee shall obtain any reports from Fund Management with
respect to the Funds' policies and procedures regarding compliance with
applicable laws and regulations. The Committee shall perform other special
reviews, investigations or oversight functions as requested by the Board
and shall receive and review periodic or special reports issued on
exposure/controls, irregularities and control failures related to the
Funds.
8. The Committee shall prepare any report of the Committee required
to be included in a proxy statement for a Fund.
9. The Committee may request any officer or employee of a Fund or
Fund Management, independent legal counsel, fund counsel and the External
Auditors to attend a meeting of the Committee or to meet with any members
of, or consultants to, the Committee.
10. The Committee shall maintain minutes of its meetings.
11. The Committee shall perform such other functions and have such
powers as may be necessary or appropriate in the efficient and lawful
discharge of its responsibilities.
IV. AUTHORITY TO ENGAGE ADVISERS
The Committee may engage independent counsel and other advisers, as it
determines necessary to carry out its duties. The Funds' External Auditors shall
have unrestricted accessibility at any time to Committee members.
V. FUNDING PROVISIONS
A. The Committee shall determine the:
1. Compensation to any independent registered public accounting firm
engaged for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for a Fund; and
2. Compensation to any advisers employed by the Committee.
B. The expenses enumerated in this Article V and all necessary and
appropriate administrative expenses of the Committee shall be paid by the
applicable Fund or Fund Management.
A-7
VI. MANAGEMENT AND EXTERNAL AUDITOR'S RESPONSIBILITIES
A. Fund Management has the primary responsibility for establishing and
maintaining systems for accounting, reporting, disclosure and internal controls.
The External Auditors have the primary responsibility to plan and implement an
audit, with proper consideration given to the accounting, reporting and internal
controls. All External Auditors engaged for the purpose of preparing or issuing
an audit report or performing other audit, review or attest services for the
Funds shall report directly to the Committee. The External Auditors' ultimate
accountability is to the Board and the Committee, as representatives of
shareholders.
B. While the Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Committee to plan or conduct audits or
to determine that the Funds' financial statements are complete and accurate and
are in accordance with GAAP, nor is it the duty of the Committee to assure
compliance with laws and regulations and/or the Funds' Code of Ethics.
C. In discharging its responsibilities, the Committee and its members are
entitled to rely on information, opinions, reports, or statements, including
financial statements and other financial data, if prepared or presented by: (1)
one or more officers of a Fund; (2) legal counsel, public accountants, or other
persons as to matters the Committee member reasonably believes are within the
person's professional or expert competence; or (3) a Board committee of which
the Committee member is not a member.
Amended: December 10, 2012
A-8
FORM OF PROXY CARD
------------------
PROXY
[ FUND NAME ]
Annual Meeting of Shareholders - April 17, 2013
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the [ FUND NAME ] (the "Fund"), a
Massachusetts business trust, hereby appoints W. Scott Jardine, Mark R. Bradley,
Kristi A. Maher, James M. Dykas and Erin E. Klassman as attorneys and proxies
for the undersigned, with full powers of substitution and revocation, to
represent the undersigned and to vote on behalf of the undersigned all shares of
the Fund that the undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Fund (the "Meeting") to be held at the offices of First
Trust Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187,
at 4:00 p.m. Central time on the date indicated above, and any adjournments or
postponements thereof. The undersigned hereby acknowledges receipt of the Notice
of Joint Annual Meetings of Shareholders and Joint Proxy Statement dated
[____________], and hereby instructs said attorneys and proxies to vote said
shares as indicated hereon. In their discretion, the proxies are authorized to
vote upon such other business as may properly come before the Meeting and any
adjournments or postponements thereof (including, but not limited to, any
questions as to adjournments or postponements of the Meeting). A majority of the
proxies present and acting at the Meeting in person or by substitute (or, if
only one shall be so present, then that one) shall have and may exercise all of
the power and authority of said proxies hereunder. The undersigned hereby
revokes any proxy previously given. This proxy, if properly executed, will be
voted in the manner directed by the undersigned shareholder.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES SET FORTH. PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE.
ADDRESS CHANGE/COMMENTS
(Mark the corresponding box on the reverse side)
------------------------------------------------
BNY MELLON SHAREOWNER SERVICES
P.O. BOX 3550
SOUTH HACKENSACK, NJ 07606-9250
------------------------------------------------
RESTRICTED AREA - SCAN LINE
(Continued and to be marked, dated and signed, on the other side)
RESTRICTED AREA - SIGNATURE LINE
[ FUND NAME ]
FOLD AND DETACH HERE
--------------------------------------------------------------------------------
Please mark your votes as
indicated in this example [X]
ANNUAL MEETING PROXY CARD
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" THE ELECTION OF THE NOMINEES SET FORTH.
Election of Two Class III Trustees - The Board of Trustees recommends that you
vote FOR the election of two Class III Nominees, each for a three-year term.
NOMINEES FOR WITHHOLD
01 James A. Bowen [ ] [ ]
(Class III)
02 Niel B. Nielson [ ] [ ]
(Class III)
Mark Here for
RESTRICTED AREA - SCAN LINE Address Change
or Comments
SEE REVERSE [ ]
NOTE: Please sign exactly as your name appears on this Proxy. If joint owners,
EITHER may sign this proxy. When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give full title.
Signature _________________ Signature _________________ Date___________________