As filed with the Securities and Exchange Commission on August 10, 2015.7, 2018.
===============================================================================
1933 Act File No. 333-113978
1940 Act File No. 811-21539
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 registrantRegistrant [X]
Filed by a party other than the registrantRegistrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement.Proxy Statement
[ ] Confidential, for useUse of the Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.Proxy Statement
[ ] Definitive additional materials.Additional Materials
[ ] Soliciting material pursuant toMaterial under Section 240.14a-12
FIRST TRUST SENIOR FLOATING RATE INCOME FUND II
FIRST TRUST SENIOR FLOATING RATE 2022 TARGET TERM 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:
FIRST TRUST SENIOR FLOATING RATE INCOME FUND II
FIRST TRUST SENIOR FLOATING RATE 2022 TARGET TERM FUND
120 EAST LIBERTY DRIVE, SUITEEast Liberty Drive, Suite 400
WHEATON, ILLINOISWheaton, Illinois 60187
August 7, 20156, 2018
Dear Shareholder:
The accompanying materials relate to the Joint Annual MeetingMeetings of
Shareholders (the(collectively, the "Meeting") of First Trust Senior Floating Rate Income Fund II (theeach fund listed above (each a
"Fund" and collectively the "Funds"). The Meeting will be held at the offices of
the Fund,First Trust Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton, Illinois
60187, on Monday, September 14, 2015,10, 2018, at 4:15 p.m.12:00 noon Central Time.
At the Meeting, you will be asked to vote on a proposal to elect one (for
shareholders of First Trust Senior Floating Rate Income Fund II) or two (for
shareholders of First Trust Senior Floating Rate 2022 Target Term Fund) of the
Trustees of theyour 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
MeetingMeetings 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 full share of thea 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 BoardBoards
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 theyour 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
FIRST TRUST SENIOR FLOATING RATE INCOME FUND II
FIRST TRUST SENIOR FLOATING RATE 2022 TARGET TERM FUND
120 EAST LIBERTY DRIVE, SUITE 400
WHEATON, ILLINOIS 60187
NOTICE OF JOINT ANNUAL MEETINGMEETINGS OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 14, 201510, 2018
August 7, 20156, 2018
To the Shareholders of First Trust Senior Floating Rate Income Fund II:the above Funds:
Notice is hereby given that the Joint Annual MeetingMeetings of Shareholders
(the(collectively, the "Meeting") of First Trust Senior Floating Rate Income Fund II (thethe funds listed above (each a "Fund" and
collectively the "Funds"), each a Massachusetts business trust, will be held at
the offices of the Fund,First Trust Advisors L.P., 120 East Liberty Drive, Suite 400,
Wheaton, Illinois 60187, on Monday, September 14,
2015,10, 2018, at 4:15 p.m.12:00 noon Central
Time, for the following purposes:
1. To(a) For First Trust Senior Floating Rate Income Fund II, to elect one
Trustee (the Class II Trustee). to the Board of Trustees of such Fund; and
1. (b) For First Trust Senior Floating Rate 2022 Target Term Fund, to
elect two Trustees (the Class I Trustees) to the Board of Trustees of such Fund.
2. To transact such other business as may properly come before the Meeting
or any adjournments or postponements thereof.
The Board of Trustees of each Fund has fixed the close of business on July
24, 201525, 2018 as the record date for the determination of shareholders of such Fund
entitled to notice of and to vote at the Meeting and any adjournments or
postponements thereof.
By Order of the BoardBoards 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 PROXIESSIGNING PROXY CARDS ARE SET FORTH
ONFOLLOWING THE INSIDE COVER OF THIS PROXY STATEMENT.LETTER TO SHAREHOLDERS.
--------------------------------------------------------------------------------
This page intentionally left blank.
FIRST TRUST SENIOR FLOATING RATE INCOME FUND II
FIRST TRUST SENIOR FLOATING RATE 2022 TARGET TERM FUND
120 EAST LIBERTY DRIVE, SUITE 400
WHEATON, ILLINOIS 60187
JOINT ANNUAL MEETINGMEETINGS OF SHAREHOLDERS
September 14, 2015
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187TO BE HELD ON SEPTEMBER 10, 2018
JOINT PROXY STATEMENT
August 7, 2015AUGUST 6, 2018
THIS JOINT PROXY STATEMENT AND THE ENCLOSED PROXY CARD WILL FIRST BE
MAILED TO SHAREHOLDERS ON OR ABOUT AUGUST 14, 2015.13, 2018.
This Joint Proxy Statement is furnished in connection with the
solicitation of proxies by the BoardBoards of Trustees of First Trust Senior Floating Rate Income Fund
II (thethe funds listed above
(each a "Fund" and collectively the "Funds"), each a Massachusetts business
trust, for use at the Joint Annual MeetingMeetings of Shareholders of the FundFunds to be
held on Monday, September 14, 2015,10, 2018, at 4:15
p.m.12:00 noon Central Time, at the offices
of First Trust Advisors L.P., the investment advisor to each Fund, located at
120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, and at any
adjournments or postponements thereof (the(collectively, the "Meeting"). A Notice of
Joint Annual MeetingMeetings of Shareholders and a proxy card accompany this Joint
Proxy Statement. The Board of Trustees of each Fund has determined that the use
of this Joint Proxy Statement is in the best interests of the Fund in light of
the similar matters being considered and voted on by shareholders of each Fund.
The following table indicates which Fund's shareholders are solicited with
respect to each matter comprising Proposal 1 (the "Proposal"):
--------------------------------------------------------------------------
1.(a) For First Trust Senior Floating Rate Income Fund II (the "Floating
Rate Income Fund"), the election of one (1) Class II Trustee.
--------------------------------------------------------------------------
1.(b) For First Trust Senior Floating Rate 2022 Target Term Fund (the
"Target Term Fund"), the election of two (2) Class I Trustees.
--------------------------------------------------------------------------
The principal offices of each of the Funds are located at 120 East Liberty
Drive, Suite 400, Wheaton, Illinois 60187.
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 proxy
solicitation material to the person(s) for whom they hold Fund shares.
The close of business on July 24, 201525, 2018 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. TheMeeting and any adjournments or postponements thereof.
Each Fund has one class of shares of beneficial interest, par value $0.01
per share, known as common shares ("Shares").
The expense of preparing, printing and mailing the enclosed proxy,
accompanying notice and this Proxy Statement, and all other costs in connection
with the solicitation by the Fund of proxies to be voted at the Meeting, will be
borne by the Fund. The Fund will also reimburse brokerage firms and others for
their expenses in forwarding the Fund's proxy solicitation materials to the
person(s) for whom they hold Shares. The solicitation of proxies will be largely
by mail, but may include telephonic, electronic or oral communication by
officers and service providers of the Fund, as well as agents and affiliates of
such service providers.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SHARE-
HOLDERSHAREHOLDER MEETING TO BE HELD ON SEPTEMBER 14, 2015.10, 2018. THIS JOINT PROXY
STATEMENT IS AVAILA-
BLEAVAILABLE ON THE INTERNET AT
HTTP:HTTPS://WWW.FTPORTFOLIOS.COM/LOADCONTENT/GRAUECJWGHHO. THEGE3DYCT1GOAY. EACH FUND'S MOST
RECENT ANNUAL AND SEMI-ANNUAL REPORTS ARE ALSO AVAILABLE ON THE INTERNET AT
HTTP:HTTPS://WWW.FTPORTFOLIOS.COM/RETAIL/CEF/CEFFUNDNEWS.ASPX?TICKER=FCT.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 FUNDFUNDS WILL
FURNISH, WITHOUT CHARGE, COPIES OF ITSTHEIR 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 TOLL-FREE
(800) 988-5891.
YOU MAY CALL TOLL-FREE (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 4:15 P.M.12:00 NOON
CENTRAL TIME, on MONDAY, SEPTEMBER 14, 2015.10, 2018. (However, proxies
received after this date may still be voted in the event the Meeting
is adjourned or postponed to a later date.)
- 2 --2-
VOTING
As described further in the proposal,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 the specified nominee asnominee(s) to the Class II TrusteeBoard of theTrustees of that Fund
provided a quorum is present. Abstentions and broker non-votes (i.e., Shares
held by brokers or nominees as to which (i) instructions have not been received
from the beneficial owners or the persons entitled to vote and (ii) the broker
or nominee does not have discretionary voting power on a particular matter) will
have no effect on the approval of the proposal.Proposal.
If the enclosed proxy card is properly executed and returned in time to be
voted at the Meeting, the 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, for each Fund, unless instructions to the contrary are marked
thereon, a properly executed and returned proxy will be voted FOR the election
of the specified nominee as the Class II Trusteenominee(s) 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 Fund,First Trust Advisors, 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 Fund's 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 with
respect to a Fund, 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 a time and place announced at the
meeting 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.notice if the
time and place of the adjourned meeting are announced at the meeting. 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 --3-
OUTSTANDING SHARES
On the Record Date, theeach Fund had the following number of Shares
outstanding:
------------------------------------------------ -------------- ---------------
TICKER SHARES
FUND SYMBOL(1) OUTSTANDING
------------------------------------------------ -------------- ---------------
FLOATING RATE INCOME FUND FCT 26,696,982
Shares outstanding.------------------------------------------------ -------------- ---------------
TARGET TERM FUND FIV 35,831,569
------------------------------------------------ -------------- ---------------
(1) The Shares of each of the FundFunds are listed on the New York Stock Exchange
("NYSE") under the ticker
symbol FCT..
Shareholders of record on the Record Date are entitled to one vote for
each full 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 of each Fund, 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 the 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 thea Fund or otherwise acknowledges the
existence of control. A party that controls thea 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.Date and reports filed with the Securities and Exchange
Commission ("SEC") by shareholders. The Fund doesFunds 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
----------------------------------------------------- --------------------------------- --------------------------------------------------------------------------------------- -------------------------- -----------------------------
FLOATING RATE INCOME FUND:
------------------------------------------------------- -------------------------- -----------------------------
The Bank of New York Mellon 1,813,331 6.79%
525 William Penn Place
Pittsburgh, PA 15259
----------------------------------------------------- --------------------------------- --------------------------------
First Clearing, LLC
2801 Market Street 2,304,986 8.63%
St. Louis, MO 63103
----------------------------------------------------- --------------------------------- --------------------------------
Merrill Lynch, Pierce, Fenner & Smith SafekeepingIncorporated
4804 Deer Lake DriveDr. E. 9,632,625 36.08%10,359,996 Shares 38.81%
Jacksonville, FL 32246
----------------------------------------------------- --------------------------------- --------------------------------
Raymond James & Associates, Inc.
880 Carillon Parkway 1,484,698 5.56%
St. Petersburg, FL 33716
----------------------------------------------------- --------------------------------- --------------------------------------------------------------------------------------- -------------------------- -----------------------------
Bank of America Corporation*
Bank of America Corporate Center
100 N. Tryon Street 2,690,599 Shares 10.08%
Charlotte, NC 28255
------------------------------------------------------- -------------------------- -----------------------------
National Financial Services LLC
499 Washington Blvd 2,284,259 Shares 8.56%
Jersey City, NJ 07310
------------------------------------------------------- -------------------------- -----------------------------
Stifel, Nicolaus & Company, Incorporated
501 N. Broadway 2,402,910 9.00%c/o Mediant Communications
200 Regency Forest Drive 1,968,802 Shares 7.37%
Cary, NC 27518
------------------------------------------------------- -------------------------- -----------------------------
Charles Schwab & Co., Inc.
2423 E. Lincoln Drive
Phoenix, AZ 85016 1,622,512 Shares 6.08%
------------------------------------------------------- -------------------------- -----------------------------
Wells Fargo Clearing Services LLC
2801 Market Street
H0006-09B 1,537,172 Shares 5.76%
St. Louis, MO 63102
----------------------------------------------------- --------------------------------- --------------------------------63103
------------------------------------------------------- -------------------------- -----------------------------
TARGET TERM FUND:
------------------------------------------------------- -------------------------- -----------------------------
Morgan Stanley Smith Barney LLC
1300 Thames St
6th Floor
Baltimore, MD 21231 13,778,241 Shares 38.45%
------------------------------------------------------- -------------------------- -----------------------------
Wells Fargo Clearing Services LLC
2801 Market Street
H0006-09B
St. Louis, MO 63103 5,406,755 Shares 15.09%
------------------------------------------------------- -------------------------- -----------------------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4804 Deer Lake Dr. E.
Jacksonville, FL 32246 2,536,903 Shares 7.08%
------------------------------------------------------- -------------------------- -----------------------------
UBS Financial Services Inc.
1000 Harbor Blvd
Weehawken, NJ 07086 2,268,808 Shares 6.33%
------------------------------------------------------- -------------------------- -----------------------------
American Enterprise Investment Services Inc.
682 AMP Financial Center
Minneapolis, MN 55474 1,982,794 Shares 5.53%
------------------------------------------------------- -------------------------- -----------------------------
Stifel, Nicolaus & Company, Incorporated
c/o Mediant Communications
200 Regency Forest Drive 1,899,173 Shares 5.30%
Cary, NC 27518
------------------------------------------------------- -------------------------- -----------------------------
RiverNorth Capital Management, LLC**
325 N. LaSalle Street
Suite 645 1,873,238 Shares 5.23%
Chicago, IL 60654-7030
------------------------------------------------------- -------------------------- -----------------------------
* Information is according to Amendment No. 9 to Schedule 13G filed on February 12, 2018.
** Information is according to Schedule 13G filed on February 14, 2018.
- 4 --5-
PROPOSAL:PROPOSAL 1: ELECTION OF ONE (1) CLASS II TRUSTEE
ONE (1) CLASS II TRUSTEE IS TO BE ELECTED BY HOLDERS OF SHARES OF THE FUND.
CURRENT TRUSTEE NIEL B. NIELSON IS THE NOMINEE FOR ELECTION AS THE CLASS II
TRUSTEE BY SHAREHOLDERS OF THE FUND FOR A THREE-YEAR TERM.
TheTRUSTEE(S)
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. 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. Currently, for each Fund: (1)
Richard E. Erickson and Thomas R. Kadlec are the Class I Trustees; (2) Niel B.
Nielson is the Class II Trustee; and (3) James A. Bowen and Robert F. Keith are
the Class III Trustees.
(a) FOR SHAREHOLDERS OF THE FLOATING RATE INCOME FUND -- Election of the
Class II Trustee to the Board of Trustees of the Floating Rate Income Fund:
Mr. Nielson is currently the Class II Trustee of the Floating Rate Income
Fund for a term expiring at the Meeting or until his successor is elected and
qualified. If elected, heMr. Nielson will hold office for a three-year term
expiring at the Floating Rate Income Fund's 20182021 annual meeting of shareholders.
James A. Bowen,
Robert F. Keith, Thomas R. Kadlec and Richard E. Erickson are current and
continuing Trustees. Messrs.Mr. Bowen and Mr. Keith are currently the Class III Trustees of the Fund for a term expiring at the
Floating Rate Income Fund's 20162019 annual meeting of shareholders. Messrs.Dr. Erickson
and Mr. Kadlec are the Class I Trustees for a term expiring at the Floating Rate
Income Fund's 2020 annual meeting of shareholders. Each Trustee serves until his
successor is elected and qualified, or until he earlier resigns or is otherwise
removed.
(b) FOR SHAREHOLDERS OF THE TARGET TERM FUND -- Election of the Class I
Trustees to the Board Of Trustees of the Target Term Fund:
Dr. Erickson and Mr. Kadlec are currently the Class I Trustees of the
Target Term Fund for a term expiring at the Meeting or until their respective
successors are elected and qualified. If elected, Dr. Erickson and Mr. Kadlec
will hold office for a three-year term expiring at the Target Term Fund's 20172021
annual meeting of shareholders. Mr. Nielson is the Class II Trustee for a term
expiring at the Target Term Fund's 2019 annual meeting of shareholders. Mr.
Bowen and Mr. Keith are the Class III Trustees for a term expiring at the Target
Term Fund's 2020 annual meeting of shareholders. Each Trustee serves until his
successor is elected and qualified, or until he earlier resigns or is otherwise
removed.
REQUIRED VOTE: The nomineeFor each Fund, the nominee(s) for election asto the Class II TrusteeFund's
Board of Trustees 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.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 the nomineenominee(s) listed if your proxy card has been
properly executed and timely received by the applicable Fund. If thea 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 recommended by thea Fund's Board of Trusteees of the FundTrustees in accordance with the Fund's
procedures.
THE BOARD OF TRUSTEES OF THEEACH FUND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE ELECTION OF THEEACH APPLICABLE NOMINEE.
- 5 --6-
MANAGEMENT
MANAGEMENT OF THE FUNDFUNDS
The general supervision of the duties performed for theeach Fund under its
respective investment management agreement with the Advisor is the
responsibility of thethat Fund's Board of Trustees. The Trustees set broad policies
for the FundFunds and choose the Fund'sFunds' officers. The following is a list of the
Trustees and executive officers of theeach 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 trusteeships or directorships
each Trustee holds, if applicable. As noted above, theeach Fund has established a
staggered Board of Trustees 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 FundFunds
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 FundFunds 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."
[TheThe remainder of this page is intentionally left blank.]
- 6 -
-7-
The following tables identify the Trustees and executive officers of the
Funds. Unless otherwise indicated, the address of all persons is c/o First Trust
Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton, IL 60187.
INTERESTED TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------INDEPENDENT TRUSTEES
-----------------------------------------------------------------------------------------------------------------------------
OTHER
NUMBER OF TRUSTEESHIPS
PORTFOLIOS IN OTHER
POSITION(S)OR
TERM OF OFFICE(2)OFFICE(1) PRINCIPAL OCCUPATION(S)THE FIRST TRUST DIRECTORSHIPS
POSITION(S) AND YEAR FIRST OCCUPATION(S) FUND DIRECTORSHIPSCOMPLEX HELD BY TRUSTEE
NAME ADDRESS, AND HELD WITH AND LENGTH OFELECTED OR DURING PAST FIVE COMPLEX OVERSEEN HELD BY DATEDURING PAST 5
YEAR OF BIRTH FUND TIME SERVED(3)FUNDS APPOINTED(2) 5 YEARS BY TRUSTEE TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------YEARS
-----------------------------------------------------------------------------------------------------------------------------
James A. Bowen(1) Chairman of Class III Chief Executive Officer 115 Portfolios None
120 East Liberty Drive the Board (December 2010 to Present),
Suite 400 and Trustee Since Fund President (until December
Wheaton, IL 60187 Inception 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 OTHER
POSITION(S) TERM OF OFFICE(2) PRINCIPAL OCCUPATION(S) FIRST TRUST FUND DIRECTORSHIPS
NAME, ADDRESS, AND HELD WITH AND LENGTH OF DURING PAST FIVE COMPLEX OVERSEEN HELD BY
DATE OF BIRTH FUND TIME SERVED(3) YEARS BY TRUSTEE TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
Richard E. Erickson Trustee Class I Physician; President, 115 PortfoliosPhysician and Officer, 155 None
c/o First Trust1951 Wheaton Orthopedics;
Advisors L.P. Since Fund Co-owner and Co-Director
120 East Liberty Drive Inception (January 1996 to May 2007),
Suite 400 Sports Med Center for
Wheaton, IL 60187 Fitness; Limited Partner, DOB: 4/51 Gundersen
Inception Real Estate Limited
Partnership;Partnership (June 1992 to
December 2016); Member,
Sportsmed LLC ------------------------------------------------------------------------------------------------------------------------------------(April 2007
to November 2015)
-----------------------------------------------------------------------------------------------------------------------------
Thomas R. Kadlec Trustee Class I President, (March 2010 to 115 PortfoliosADM Investor 155 Director of c/o First Trust Present), Senior Vice ADM
Investor
Advisors L.P. Since Fund President and Chief Services,
120 East Liberty Drive Inception Financial Officer (May 2007 Inc., ADM
Suite 400 to March 2010), Vice Investor
Wheaton, IL 60187 President and Chief Services
DOB: 11/57 Financial Officer (1990 to International
May 2007), ADM Investor and Futures1957 Services, Inc. (Futures IndustryInvestor
Since Fund Commission Merchant) Services, Inc.,
Inception ADM Investor
Services
International,
Futures Industry
Association ------------------------------------------------------------------------------------------------------------------------------------and
National Futures
Association
-----------------------------------------------------------------------------------------------------------------------------
Robert F. Keith Trustee Class III President, (2003 to Present), 115 PortfoliosHibs Enterprises 155 Director of c/o First Trust
Hibs Enterprises1956 (Financial Trustand Management Company Advisors L.P.of
Since June 2006 and Management Consulting) of Illinois
120 East Liberty Drive
Suite 400
Wheaton, IL 60187
DOB: 11/56
------------------------------------------------------------------------------------------------------------------------------------(Floating Rate
Income Fund)
Since Fund
Inception
(Target Term
Fund)
-----------------------------------------------------------------------------------------------------------------------------
Niel B. Nielson Trustee Class II Managing Director and Chief 115 Portfolios155 Director of
c/o First Trust Nominee1954 Operating Officer (January Covenant
Advisors L.P.Since Fund 2015 to present), Pelita Transport 120 East Liberty Drive Since FundInc.
Inception Harapan EducationEducational (May 2003 to
Foundation Inc.
Suite 400 Inception (Educational May 2014)
Products and (2003-2014)
Wheaton, IL 60187 Services);
President and
DOB: 3/54 Chief
Executive Officer (June 2012
to September 2014), Servant
Interactive LLC (Educational
Products and Services);
President and Chief
Executive Officer (June 2012
to September 2014), Dew
Learning LLC (Educational
Products and Services);
President (June 2002 to June
2012), Covenant College
------------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
- 7 --8-
-----------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
-----------------------------------------------------------------------------------------------------------------------------
OTHER
NUMBER OF TRUSTEESHIPS
PORTFOLIOS IN OR
TERM OF OFFICE(1) PRINCIPAL THE FIRST TRUST DIRECTORSHIPS
POSITION(S) AND YEAR FIRST OCCUPATION(S) FUND COMPLEX HELD BY TRUSTEE
NAME AND HELD WITH ELECTED OR DURING PAST OVERSEEN BY DURING PAST 5
YEAR OF BIRTH FUNDS APPOINTED(2) 5 YEARS TRUSTEE YEARS
-----------------------------------------------------------------------------------------------------------------------------
James A. Bowen(3) Trustee and Class III Chief Executive Officer, 155 None
1955 Chairman of First Trust Advisors L.P.
the Board Since Fund and First Trust Portfolios
Inception L.P.; Chairman of the Board
of Directors, BondWave LLC
(Software Development
Company) and Stonebridge
Advisors LLC (Investment
Advisor)
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
TERM OF OFFICE(2)OFFICE(1)
NAME ADDRESS, AND POSITION(S)POSITIONS AND AND LENGTH OF PRINCIPAL OCCUPATION(S)
DATEYEAR OF BIRTH HELDOFFICES WITH FUND TIME SERVED(3)FUNDS SERVICE(2) DURING PAST FIVE5 YEARS
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Mark R. BradleyJames M. Dykas President and Chief Indefinite Term Managing Director and Chief Financial Officer
and1966 Chief Operating
120 East Liberty Drive, Suite 400 Executive (January 2016 to present), Controller
Officer Officer (December 2010Since 2012 (January 2012 to Present)January 2016), Senior Vice
President (April 2007 to January 2016), First
Wheaton, IL 60187 Since Fund
Trust Advisors L.P. and First Trust
DOB: 11/57 Inception Portfolios
L.P.; Chief Financial Officer, BondWave LLC
(Software Development Company/Investment Advisor)Company) (January 2016
to present) and Stonebridge Advisors LLC
(Investment Advisor) -----------------------------------------------------------------------------------------------------------------------------------
James M. Dykas(January 2016 to present)
-----------------------------------------------------------------------------------------------------------------------------
Donald P. Swade Treasurer, Chief Indefinite Controller (January 2011Term Senior Vice President (July 2016 to Present)present),
Senior
120 East Liberty Drive, Suite 4001972 Financial Officer Vice President (April 20072012 to Present)July 2016), First
Wheaton, IL 60187
and Chief Since December2016 First Trust Advisors L.P. and First Trust
DOB: 1/66 Accounting Officer 2005 Portfolios L.P.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
W. Scott Jardine Secretary and Chief Indefinite Term General Counsel, First Trust Advisors L.P.,
120 East Liberty Drive, Suite 400 and
1960 Chief Legal Officer First Trust Portfolios L.P.; Secretary and
Officer Since Fund General Counsel, BondWave LLC Wheaton, IL 60187 Since Fund (August 2009 to Present) (Software
DOB: 5/60
Inception Development Company/Investment Advisor)Company); Secretary, of Stonebridge
Advisors LLC (Investment Advisor)
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Daniel J. Lindquist Vice President Indefinite Term Managing Director, (July 2012 to Present),
120 East Liberty Drive, Suite 400 Senior Vice President (September 2005 to July
Wheaton, IL 60187 Since December 2012), First Trust Advisors L.P.
1970 and First
DOB: 2/70 2005 Trust Portfolios L.P.
-----------------------------------------------------------------------------------------------------------------------------------Since 2005
-----------------------------------------------------------------------------------------------------------------------------
Kristi A. Maher Assistant SecretaryChief Compliance Indefinite Term Deputy General Counsel, First Trust Advisors 120 East Liberty Drive, Suite 400L.P.
1966 Officer and Chief L.P. and First Trust Portfolios L.P.
Wheaton, IL 60187 Compliance Officer Assistant
DOB: 12/66 Secretary since
July 2004 and Chief
Compliance
Officer since
2011 and
Assistant
Secretary since
2004
-----------------------------------------------------------------------------------------------------------------------------
(1) Currently, Richard E. Erickson and Thomas R. Kadlec, as the Class I
Trustees, are each serving a term (a) for the Floating Rate Income Fund
until such Fund's 2020 annual meeting of shareholders or until their
respective successors are elected and qualified and (b) for the Target
Term Fund until the Meeting or until their respective successors are
elected and qualified. Currently, Niel B. Nielson, as the Class II
Trustee, is serving a term (a) for the Floating Rate Income Fund until the
Meeting or until his successor is elected and qualified and (b) for the
Target Term Fund until such Fund's 2019 annual meeting or until his
successor is elected and qualified. Currently, James A. Bowen and Robert
F. Keith, as the Class III Trustees, are each serving a term (a) for the
Floating Rate Income Fund until such Fund's 2019 annual meeting of
shareholders or until their respective successors are elected and
qualified and (b) for the Target Term Fund until such Fund's 2020 annual
meeting of shareholders or until their respective successors are elected
and qualified. Executive officers of the Funds have an indefinite term.
(2) For executive officers, unless otherwise specified, length of service
represents the year the person first became an executive officer of a
Fund. Except as otherwise provided below, all Trustees and executive
officers were elected or appointed in connection with a Fund's inception.
Robert F. Keith was appointed Trustee of all then-existing funds in the
First Trust Fund Complex in June 2006. James M. Dykas was elected (a)
Treasurer, Chief Financial Officer and Chief Accounting Officer of all
then-existing funds in the First Trust Fund Complex in January 2011
-----------------------------------------------------------------------------------------------------------------------------------
1 Mr. Bowen is deemed an "interested person" of the Fund due to his position
as Chief Executive Officer of First Trust Advisors L.P., investment advisor
of the Fund.
2 Currently, Niel B. Nielson, as the Class II Trustee, is serving a term until
the Meeting or until his successor is elected and qualified. James A. Bowen
and Robert F. Keith, as the Class III Trustees, are each serving a term
until the Fund's 2016 annual meeting of shareholders or until their
respective successors are elected and qualified. Thomas R. Kadlec and
Richard E. Erickson, as the Class I Trustees, are each serving a term until
the Fund's 2017 annual meeting of shareholders or until their respective
successors are elected and qualified. Officers of the Fund have an
indefinite term.
3 For officers, length of time served represents when the person first became
an officer of the Fund. James A. Bowen resigned as President and Chief
Executive Officer of the Fund 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
the Fund, 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. Kristi A. Maher was appointed
to serve as Chief Compliance Officer of the Fund, effective January 1, 2011.
Before2012,
effective January 23, 2012 and (b) President and Chief Executive Officer
of all then-existing funds in the First Trust Fund Complex in December
2015, effective January 2016. Donald P. Swade was elected Treasurer, Chief
Financial Officer and Chief Accounting Officer of all then-existing funds
in the First Trust Fund Complex in December 2015, effective January 2016.
Daniel J. Lindquist was elected Vice President of all then-existing funds
in the First Trust Fund Complex on December 12, 2005. Kristi A. Maher was
elected Chief Compliance Officer of all then-existing funds in the First
Trust Fund Complex in December 2010, effective January 1, 2011; before
January 1, 2011, W. Scott Jardine served as Chief Compliance Officer.
(3) 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.
-9-
UNITARY BOARD LEADERSHIP STRUCTURE
The same five persons serve as Trustees on theeach Fund's Board of Trustees
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, except for one First Trust Closed-endIntermediate Duration Preferred &
Income Fund and First Trust Dynamic Europe Equity Income Fund, they 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.
- 8 -
Because of the similar and often overlapping issues facing the First Trust
Funds, including among the First Trust Closed-end Funds, the Board of Trustees
of each of the First Trust Funds (such Boards of Trustees referred to herein
collectively as the "Board") 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 Fund'sFunds' 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 theeach Fund. An individual who is
not a Trustee serves as President and Chief Executive Officer of theeach 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 Fund'sFunds' 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 serves a three-year term or
until his successor is selected. Thomas R. KadlecRichard E. Erickson currently serves as the
Lead Independent Trustee.
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 Fund'sFunds'
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 other(other than meetings of the
Executive Committee.Committee). Generally, the Board acts by majority vote of all the
Trustees, except where a different vote is required by applicable law.
-10-
The three committee chairmenCommittee Chairmen and the Lead Independent Trustee currently
rotate every three years in serving as Chairman of the Audit Committee, the
Nominating and Governance Committee or the Valuation Committee, or as Lead
Independent Trustee. The Lead Independent Trustee and the immediate past Lead
Independent Trustee also serve on the Executive Committee with the Interested
Trustee.
In addition toIncluding the Fund,Funds, the First Trust Fund Complex includes: 14 other15 closed-end
funds advised by First Trust Advisors; First Trust Series Fund, an open-end
management investment company with threefour portfolios advised by First Trust
Advisors; First Trust Variable Insurance Trust, an open-end management
investment company with twothree portfolios 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 V, First Trust Exchange-Traded Fund VI, First Trust
- 9 -
Exchange-Traded Fund VII, First Trust Exchange-Traded Fund VIII, First Trust
Exchange-Traded AlphaDEX(R) Fund and First Trust Exchange-Traded AlphaDEX(R)
Fund II, each an exchange-traded fundfunds with, 19,
14, 4, 6, 1, 10, 1, 21 and 19 operatingin the aggregate, 133 portfolios (each such
portfolio, an "ETF" and each such exchange-traded fund, an "ETF Trust"), respectively, advised
by First Trust Advisors.
The four standing committees of the Board are: the Executive Committee
(and Dividend and Pricing 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 theeach Fund's
Declaration of Trust and By-Laws. The members of the Executive Committee of a
Fund also serve as a special committee of the Board known as the Dividend and
Pricing 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 the 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.
Kadlec, Mr. KeithBowen and Mr. BowenDr. Erickson are members of the Executive Committee. The
number of meetings of the Executive Committee held 12 meetingsfor each Fund during the Fund'sits last
fiscal year.year is shown on Schedule 1 hereto.
The Nominating and Governance Committee of each Fund is responsible for
appointing and nominating persons to the Board of Trustees.Trustees of that Fund. 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 standardsrules of the NYSE.primary national
securities exchanges on which the Funds' shares are listed for trading. The
Nominating and Governance Committee operates under a written charter adopted and
approved by the Board, a copy of which is available on the Fund'sFunds' website at
http:https://www.ftportfolios.com.www.ftportfolios.com (go to News & Literature on the applicable Fund's
webpage). If there is no vacancy on the Board of Trustees of a Fund, the Board
will not actively seek recommendations from other parties, including
shareholders. In 2014, the Board of Trustees adopted a mandatory retirement age
of 75 for Trustees, beyond which age Trustees are ineligible to serve. The
Nominating and Governance Committee Charter provides that the Committee will not
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 of a
Fund 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 of a Fund, 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
-11-
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 - 10 -
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 thea 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 four meetingsfor each Fund during the Fund'sits last fiscal year.year is shown
on Schedule 1 hereto.
The Valuation Committee of each Fund is responsible for the oversight of
the valuation procedures of thethat Fund (the "Valuation Procedures"), for
determining the fair value of thethat Fund's securities or other assets under
certain circumstances as described in the Valuation Procedures, and for
evaluating the performance of any pricing service for thethat Fund. Messrs.
Erickson, Kadlec, Keith and Nielson are members of the Valuation Committee. The
number of meetings of the Valuation Committee held four meetingsfor each Fund during the Fund'sits last
fiscal year.year is shown on Schedule 1 hereto.
The Audit Committee of each Fund is responsible for overseeing thethat 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). The Audit Committee operates under a written charter adopted
and approved by the Board, a copy of which is attached as Exhibit A hereto, and
is available on the Funds' website at https://www.ftportfolios.com (go to News &
Literature on the applicable Fund's webpage). Messrs. Erickson, Kadlec, Keith
and Nielson, all of whom are "independent directors" within the meaning of the
listing standardsrules of the NYSE,primary national securities exchange on which the Funds'
shares are listed for trading, serve on the Audit Committee. Messrs. Kadlec and
Keith have each 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 ten meetingsfor each Fund during the Fund'sits last fiscal year.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 theeach Fund (including the
fees and terms thereof) and non-audit services to be performed for the Advisor
by Deloitte & Touche LLP ("Deloitte & Touche"), the Fund'sFunds' independent
registered public accounting firm ("independent auditors"), if the engagement
relates directly to the operations and financial reporting of the Fund.Funds.
-12-
RISK OVERSIGHT
As part of the general oversight of theeach Fund, the Board is involved in
the risk oversight of the Fund.Funds. The Board has adopted and periodically reviews
policies and procedures designed to address the Fund'sFunds' risks. Oversight of
investment and compliance risk, including oversight of sub-advisors, if any, is
performed primarily at the Board level in conjunction with the Advisor's
investmentadvisory oversight group and the Fund'sFunds' Chief Compliance Officer ("CCO").
Oversight of other risks also occurs at the Committee level. The Advisor's
investmentadvisory oversight group reports to the Board at quarterly meetings regarding,
among other things, Fund performance and the various drivers of such performance.performance
as well as information related to sub-advisors and their operations and
processes. The Board reviews reports on the Fund'sFunds' 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 Fund'sFunds' 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 Fund'sFunds' major financial risk exposures and the steps the Advisor has
taken to monitor and control these exposures, including the Fund'sFunds' 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
- 11 -
corporate governance of the Fund.Funds. The Valuation Committee monitors valuation
risk and compliance with the Fund'sFunds' 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 FundFunds 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
FundFunds or the Advisor or other service providers. For instance, as the use of
Internet technology has become more prevalent, the FundFunds and itstheir service
providers have become more susceptible to potential operational risks through
breaches in cyber security (generally, intentional and unintentional events that
may cause thea Fund or a service provider to lose proprietary information, suffer
data corruption or lose operational capacity). There can be no guarantee that
any risk management systems established by the Fund, itsFunds, their service providers,
or issuers of the securities in which the Fund investsFunds invest to reduce cyber security
risks will succeed, and the FundFunds cannot control such systems put in place by
service providers, issuers or other third parties whose operations may affect
the FundFunds and/or itstheir shareholders. Moreover, it is necessary to bear certain
risks (such as investment related risks) to achieve thea Fund's goals. As a result
of the foregoing and other factors, the Fund'sFunds' 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 the 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 the nominee should serve as a trustee.
-13-
Independent Trustees
Richard E. Erickson, M.D., is an orthopedic surgeon andsurgeon. He also has been
President of Wheaton Orthopedics. He also has beenOrthopedics, 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 theeach Fund since its inception and of the First Trust Funds since
1999. Dr. Erickson has also served as the Lead Independent Trustee and on the
Executive Committee (2008 - 2009), Chairman of the Nominating and Governance
Committee (2003 - 2007)2007 and 2014 - 2016), Chairman of the Valuation Committee
(June 2006 - 2007 and 2010 - 2011) and Chairman of the Audit Committee
(2012 - 2013) of the First Trust Funds. He currently serves as Chairman ofLead
Independent Trustee and on the NominatingExecutive Committee and Governancethe Dividend and Pricing
Committee (since January 1, 2014)2017) 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
- 12 -
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. In 2014, Mr. Kadlec was elected to the board of the Futures Industry
Association. In 2017, Mr. Kadlec was elected to the board of the National
Futures Association. Mr. Kadlec has served as a Trustee of theeach Fund since its
inception.inception and of the First Trust Funds since 2003. 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 2007.2007 and 2014 - 2016. He also served as
Chairman of the Valuation Committee (2008 - 2009), Chairman of the Audit
Committee (2010 - 2011) and Chairman of the Nominating and Governance Committee
(2012 - 2013) of the First Trust Funds. He currently serves as Lead
Independent TrusteeChairman of the
Valuation Committee (since January 1, 2017) and as a member of the Executive
Committee and the Dividend and Pricing Committee (since January 1, 2014) 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 Fund
and of the First
Trust Funds since June 2006. Mr. Keith has also served as Chairman of the Audit
Committee (2008 - 2009), Chairman of the Nominating and Governance Committee
(2010 - 2011), and Chairman of the Valuation Committee (2014 - 2016) of the
First Trust Funds. He also served as Lead Independent Trustee (2012 - 2013) and
on the Executive Committee and the Dividend and Pricing Committee (2012 - 2016)
of the First Trust Funds. He currently serves as Chairman of the ValuationAudit Committee
(since January 1, 2014) and as a member of the Executive Committee and
the Dividend and Pricing Committee (since January 22, 2014)2017) of the First Trust Funds.
Niel B. Nielson, Ph.D., has served asbeen the Managing Director and Chief Operating
Officer of Pelita Harapan EducationEducational Foundation, (providinga global provider of
educational products and services)services, since January 2015. Mr. Nielson formerly
served as President and Chief Executive Officer of Servant Interactive LLC
(providing educational products and services) from June 2012 to September 2014,
and he served as President and Chief Executive Officer of Dew Learning LLC (a global
provider of digital and on-line educational products and services) from
June 2012 to September 2014. Mr. Nielson formerly served as President of
Covenant College (2002 - 2012), and as a partner and trader (of options and
-14-
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 theeach 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)2007 and 2014 - 2016), Chairman of the Valuation Committee (2012 - 2013),
Chairman of the Nominating and Governance Committee (2008 - 2009), and Lead
Independent Trustee and a member of the Executive Committee (2010 - 2011) and Chairman of the Valuation Committee (2012
- 2013) of the
First Trust Funds. He currently serves as Chairman of the AuditNominating and
Governance Committee (since January 1, 2014)2017) of the First Trust Funds.
- 13 -
Interested Trustee
James A. Bowen is the ChaimanChairman of the Board of the Fund and of the First Trust Funds and
Chief Executive Officer of First Trust Advisors and First Trust Portfolios L.P.
Until January 23, 2012, he served as President and Chief Executive Officer of
the Fund.First Trust Funds. Mr. Bowen also serves on the Executive Committee. He has
over 3134 years of experience in the investment company business in sales, sales
management and executive management. Mr. Bowen has served as a Trustee of theeach
Fund since its inception and of the First Trust Funds since 1999. On
September 5, 2014, Mr. Bowen transferred to Susan R. Bowen 13 Units of Grace
Partners of DuPage L.P., an Illinois limited partnership and the limited partner
of First Trust Advisors, pursuant to a court order.
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.
Executive Officers
The executive officers of theeach Fund hold the same positions with each fund
in the First Trust Fund Complex (representing 115155 portfolios) as they hold with
the Fund.Funds.
-15-
BENEFICIAL OWNERSHIP OF SHARES HELD IN THE FUNDFUNDS BY TRUSTEES AND EXECUTIVE
OFFICERS
The following table sets forth the dollar range and number of equity
securities beneficially owned by the Trustees in theeach Fund and the dollar range
of equity securities beneficially owned by the Trustees in all funds in the
First Trust Fund Complex, including the Fund,Funds, as of December 31, 2014:
- 14 -
2017:
DOLLAR RANGE OF EQUITY SECURITIES IN THE FUND AND FIRST TRUST FUND
COMPLEX (NUMBER OF SHARES HELD)
--------------------------------------------------------------------------------------------------------------------------------------------------- ------------------ ---------------------------------------------------------------------------
INTERESTED INDEPENDENT
TRUSTEE TRUSTEES
-------------------------------------------------- ------------------ ------------------------------------ -------------------- ------------------- ------------------------------------ ---------------
Richard E. Niel B.
FUND James A. Bowen Erickson Thomas R. Kadlec Robert F. Keith Niel B. Nielson
-------------------------------------------------- ------------------ ------------------------------------ -------------------- ------------------- ------------------------------------ ---------------
DOLLAR RANGE OF EQUITY $10,001-FLOATING RATE INCOME $50,001-$50,000100,000 $1-$10,000 $1-$10,000 $0 $1-$10,000
SECURITIES IN THE FUND (1,000(4,955 Shares) (313(344 Shares) (600 Shares) (0 Shares) (307(344 Shares)
-------------------------------------------------- ------------------ ------------------------------------ -------------------- ------------------- ------------------------------------ ---------------
TARGET TERM FUND $0 $0 $0 $0 $0
(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 Over $100,000
OF EQUITY SECURITIES IN
ALL REGISTERED
INVESTMENT COMPANIES IN
THE FIRST (2,498 Shares) (10,082 Shares) (12,678 Shares) (13,712 Shares) (6,816 Shares) TRUST FUND
COMPLEX OVERSEEN BY
TRUSTEE
-------------------------------------------------- ------------------ ------------------------------------ -------------------- ------------------- ------------------------------------ ---------------
The Independent Trustees have adopted a policy that establishes the
expectation that each Independent Trustee will have invested an amount in the
funds in the First Trust FundsFund Complex he oversees in the aggregate of at least
one year's total
Trustee fees,annual retainer for Board service, with investments allocated among
the funds in the First Trust FundsFund Complex depending on what is suitable for the
Trustee's personal investment needs.
As of December 31, 2014,2017, 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 theany 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 theany Fund, nor, since the
beginning of the most recently completed fiscal year of theany 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.
As of December 31, 2014,2017, the Trustees and executive officers of theeach Fund
as a group beneficially owned approximately 55,036 sharesthe following number of the funds in the
First TrustShares of each Fund, Complex (less than 1% of the shares outstanding). As of
December 31, 2014, the Trustees and executive officers of the Fund as a group
beneficially owned 2,420 of the Fund's Shares, which
is less than 1% of theeach Fund's Shares outstanding.outstanding:
---------------------------------------------------- ----------------------
FUND SHARES OWNED
---------------------------------------------------- ----------------------
FLOATING RATE INCOME FUND 6,443
---------------------------------------------------- ----------------------
TARGET TERM FUND 0
---------------------------------------------------- ----------------------
COMPENSATION
Each Independent Trustee is paid aSince January 1, 2016, the fixed annual retainer of $125,000paid to the Independent
Trustees has been $230,000 per year and an annual per fund fee of $4,000$2,500 for
each closed-end fund or otherand actively managed fund and $1,000$250 for each index fund in the First Trust Fund
Complex.fund. The
fixed annual retainer is allocated pro rataequally among each fund in the First Trust
Fund Complex based on net assets.Complex. Additionally, the Lead Independent Trustee is paid $15,000$30,000
annually, the ChairmanChairmen of the Audit Committee is paid
$10,000 annually, the Chairman of theor Valuation Committee isare each
paid $10,000$20,000 annually and the Chairman of the Nominating and Governance
-16-
Committee is paid $5,000$10,000 annually to serve in such capacities with such compensation
allocated pro rata among each fund in the First Trust Fund Complex based on its 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
rotate every three years.
The number of Board meetings held five meetingsby each Fund during the Fund'sits last fiscal year.
- 15 -
year
is shown in Schedule 1 hereto.
The aggregate fees and expenses paid to all Trustees by theeach Fund for theits
last fiscal year ended May 31, 2015 (including reimbursement for travel and out-of-pocket expenses)
amounted to $21,723.the following:
---------------------------------------------------- ---------------------------
AGGREGATE FEES AND
FUND EXPENSES PAID
---------------------------------------------------- ---------------------------
FLOATING RATE INCOME FUND $16,732
---------------------------------------------------- ---------------------------
TARGET TERM FUND $16,695
---------------------------------------------------- ---------------------------
The following table sets forth certain information regarding the
compensation of theeach Fund's Trustees (including reimbursement for travel and
out-of-pocket expenses) for theeach Fund's most recently completed fiscal year. The
Fund hasFunds have no retirement or pension plans. The executive officers and the
Interested Trustee of theeach Fund receive no compensation from the FundFunds for
serving in such capacities.
-17-
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
------------------------------------------- ---------------- --------------- --------------- --------------- ---------------
COMPENSATION FOR SERVING THE------------------------------------------------------- ------------- ------------- ------------- -------------- -------------
FLOATING RATE INCOME FUND $0 $5,384 $5,471 $5,412 $5,456
------------------------------------------- ---------------- --------------- --------------- --------------- ---------------$4,252 $4,182 $4,181 $4,118
------------------------------------------------------- ------------- --------------------------------------------------------
TARGET TERM FUND $0 $4,237 $4,173 $4,172 $4,113
------------------------------------------------------- ------------- --------------------------------------------------------
TOTAL COMPENSATION FOR SERVING THE FIRST TRUST $0 $331,237 $339,500 $332,800 $340,356
TRUST$414,011 $403,267 $403,163 $392,987
FUND COMPLEX(1)
------------------------------------------- ---------------- --------------- --------------- --------------- ---------------
1 For the calendar year ended December 31, 2014 for services to eight
portfolios of First Defined Portfolio Fund, LLC (which terminated in
April 2014), three portfolios of First Trust Series Fund and two
portfolios of First Trust Variable Insurance Trust, open-end funds;
15 closed-end funds (including the Fund); and 94------------------------------------------------------- ------------- --------------------------------------------------------
(1) For the calendar year ended December 31, 2017 for services to four
portfolios of First Trust Series Fund and three portfolios of First Trust
Variable Insurance Trust, open-end funds; 16 closed-end funds; and 128
series of the ETF Trusts. 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 applicable ETF
Trust and the Advisor.
ATTENDANCE AT ANNUAL MEETINGS OF SHAREHOLDERS
The Board of Trustees seeks 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 Fund'sFunds' Nominating and Governance Committee
Charter, which is available on theeach Fund's website located at
http:https://www.ftportfolios.com.www.ftportfolios.com (go to News & Literature on the applicable Fund's
webpage). In addition, for the Board'sFloating Rate Income Fund, the attendance of the
Board of Trustees at last year's annual shareholder meeting is available on thesuch
Fund's website located at http:https://www.ftportfolios.com. To find the Board'sBoard of
Trustees' attendance, select the Fund under the "Closed-End Funds" tab, select
the "News & Literature" link, and go to the "Shareholder Updates and
Information" heading. This is the first annual meeting of shareholders for the
Target Term Fund.
AUDIT COMMITTEE REPORT
The role of the Audit Committee is to assist the Board of Trustees in its
oversight of the Fund'sFunds' 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 8, 2014,11, 2017, a copy of which is
attached as Exhibit A hereto, and is available on the Fund'sFunds' website located at
http:https://www.ftportfolios.com.www.ftportfolios.com (go to News & Literature on the applicable Fund's
webpage). As set forth in the Charter, Fund management ofhas the Fund is responsibleprimary
responsibility for establishing and maintaining appropriate systems for accounting,
reporting, disclosure and internal controls and the audit process.controls. The Fund'sFunds' independent auditors
are
responsible for planninghave the primary responsibility to plan and carrying outimplement an audit, with proper
audits ofconsideration given to the Fund's financial
statementsaccounting, reporting and expressing an opinion as to their conformity with accounting
principles generally accepted in the United States of America.internal controls.
In performing its oversight function, the Audit Committee reviewed and
discussed with Fund management and the independent auditors, Deloitte & Touche
LLP, the audited financial statements of the FundFunds for the fiscal year ended May
31, - 16 -
20152018 at a meeting held on July 21, 2015,19, 2018, and discussed the auditaudits of such
financial statements with the independent auditors and Fund management.
In addition, the Audit Committee discussed with the independent auditors
the accounting principles applied by the FundFunds and such other matters brought to
the attention of the Audit Committee by the independent auditors as required by
-18-
the Public Company Accounting Oversight Board ("PCAOB") Auditing Standard No.
16,1301,
Communications 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
FundFunds, and discussed the impact that any such relationships may have on the
objectivity and independence of the independent auditors.
The members of the Fund'sFunds' Audit Committee are not full-time employees of
the FundFunds 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 Fund'sFunds' 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 above do not assure that the audit of
the Fund'sFunds' financial statements havehas 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 Fund'sFunds' 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 theeach Fund's audited
financial statements in theeach Fund's Annual Report to Shareholders for the fiscal
year ended May 31, 2015.2018.
Submitted by the Audit Committee of theeach Fund:
Robert F. Keith
Richard E. Erickson
Niel B. Nielson
Richard E. Erickson
Thomas R. Kadlec
Robert F. Keith
INDEPENDENT AUDITORS' FEES
Deloitte & Touche has been selected to serve as the independent auditors
for theeach Fund for its current fiscal year, and acted as the independent auditors
for theeach Fund for its most recently completed fiscal year. Deloitte & Touche has
advised the FundFunds that, to the best of its knowledge and belief, Deloitte &
Touche professionals did not have any direct or material indirect ownership
interest in the FundFunds 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, theeach Fund is not seeking shareholder ratification of
the selection of Deloitte & Touche as independent auditors.
- 17 --19-
Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees
During each of the last two fiscal years of the Fund,Funds, Deloitte & Touche
has billed theeach Fund and the Advisor for the following fees:fees set forth below.
-------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- ---------------------- --------------------
AUDIT-RELATED TAX ALL OTHER
AUDIT FEES(2) FEES (1)FEES(5) FEES
FEES (2) FEES
------------------------------------------------------------------- ---------- --------- ----------- -------- ----------- ---------- ---------- ---------
---------- ----------- -------- --------
FEES BILLED TO: 2014 2015 2014 2015 2014 2015 2014 2015
----------------------------------2017 2018 2017 2018 2017 2018 2017 2018
--------------------------------- ---------- --------- ----------- -------- ----------- ---------- ---------- ---------- --------- ---------- ----------- -------- --------
FLOATING RATE INCOME FUND
Fund $89,000 $70,000 $0$57,000 $92(3) $0 $5,200 $5,200$4,450 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
------------------------------------------------------------------- ---------- --------- ----------- -------- ----------- ---------- ---------- ---------
TARGET TERM FUND(1)
Fund $81,500 $57,000 $0 $0 $0 $5,200 $0 $0
Advisor N/A N/A $7,000(4) $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----------- ---------- ---------- ---------
(1) For 2017, these fees were for the period from inception on December 21,
2016 through May 31, 2017.
(2) 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. With respect to the Target Term Fund, for 2017, these fees
were for the audits and issuance of consents related to the initial
offering of such Fund.
(3) These fees relate to the review of pricing committee procedures.
(4) These fees were for the audits and issuance of consents related to the
initial offering of the Fund.
(5) These fees were for tax consultation and/or tax return preparation.
Non-Audit Fees
During each of the last two fiscal years of the Fund,Funds, Deloitte & Touche
has billed theeach Fund and the Advisor for the non-audit fees listed below for
services provided to the entities indicated.
AGGREGATE NON-AUDIT FEES
--------------------------------------- -------------------- -------------------
2014 2015
--------------------------------------- -------------------- ---------------------------------------------------------------- ----------------- ----------------
FUND 2017 2018
--------------------------------------------- ----------------- ----------------
FLOATING RATE INCOME FUND
Fund $5,200 $4,450
Advisor $44,400(2) $12,000(3)
--------------------------------------------- ----------------- ----------------
TARGET TERM FUND(1)
Fund $0 $5,200
Advisor $36,800(1) $12,700(2)
--------------------------------------- -------------------- -------------------
1$39,200(2) $12,000(3)
--------------------------------------------- ----------------- ----------------
(1) For 2017, these fees were for the period from inception on December 21,
2016 through May 31, 2017.
(2) These fees were for federal/state tax returns and Global Investment
Performance Standards (GIPSa) compliance.
2Foreign Account Tax
Compliance Act (FATCA).
(3) These fees were for federal/2016 and 2017 federal and state tax returns.matters.
Pre-Approval
Pursuant to its Charter and its Audit and Non-Audit Services Pre-Approval
Policy, the Fund's 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 theeach 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.
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
-20-
directly to the operations and financial reporting of the Fund,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.
- 18 -
Because the Audit Committee has not been informed of any such services,
the Fund's 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 thea Fund's Proxy Statement. To be
considered for presentation at the 20162019 annual meeting of shareholders of thea Fund
and included in the Fund's proxy statement relating to such meeting, a
shareholder proposal must be submitted pursuant to Rule 14a-8 under the 1934 Act
("Rule 14a-8") and must be received at the principal executive offices of the
applicable Fund at 120 East Liberty Drive, Suite 400,
Wheaton, Illinois 60187, not later than April 18, 2016.15, 2019. Such a proposal will be included
in thea 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 thea
Fund's proxy statement.
Other Shareholder Proposals. UnderIn addition to any requirements of law,
including the Fund'sproxy rules under the 1934 Act, 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 thea 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 Fund'sFunds'
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,principal executive offices, 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.
-21-
Any shareholder submitting a nomination of any person or persons (as the
case may be) for election as a Trustee or Trustees of thea 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
- 19 -
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 thea 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
-22-
indicates, it will be sent only to that Trustee. If a communication does not
indicate a specific Trustee, it will be sent to the Chairman of the Nominating
and Governance Committee of the Board of Trustees and the independent legal
counsel to the Independent Trustees for further distribution as deemed
appropriate by such persons.
INVESTMENT ADVISOR, ADMINISTRATOR AND TRANSFER AGENT
First Trust Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton,
Illinois 60187, serves as theeach Fund's investment advisor. First Trust Advisors
is also responsible for providing certain clerical, bookkeeping and other
administrative services to theeach Fund and in addition,also provides fund reporting services
to theeach Fund for a flat annual fee.
The Bank of New York Mellon, 101 Barclay Street, 20th Floor, New York, New
York 10286, acts as the administrator, fund accountant and custodian, and BNY
Mellon Investment Servicing (US) Inc., 301 Bellevue Parkway, Wilmington,
Delaware 19809, acts as the administrator, accounting agent and
transfer agent, to theeach Fund.
- 20 -
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 Fund'sFunds' Trustees, the Fund'sFunds' officers subject to such provisions, certain
persons affiliated with First Trust Advisors, and any sub-advisor, and persons who beneficially own
more than 10% of thea Fund's Shares to file reports of ownership and changes of
ownership with the Securities and Exchange Commission
and the NYSE,SEC and to furnish the FundFunds with copies of all Section 16(a)
forms they file. Based solely upon a review of copies of such forms received by
the FundFunds and certain written representations, theeach Fund believes that during
the Fund's last fiscal year ended May 31, 2018, all such filing requirements applicable to
such persons were met except as follows: The May 6, 2015 purchase of 2,000 of the Fund's
Shares by David McGarel, an officer of the Advisor, necessitated the filing of
one late Form 4 (which was filed on July 28, 2015).met.
FISCAL YEAR
The Fund's last fiscal year end for each Fund was May 31, 2015.2018.
DELIVERY OF CERTAIN DOCUMENTS
Annual reports will be sent to shareholders of record of theeach Fund
following the Fund's fiscal year end. TheEach 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 made by writing to the FundAdvisor at 120
East Liberty Drive, Suite 400, Wheaton, Illinois 60187 or by calling toll-free
(800) 988-5891.
Please note that only one annual or semi-annual report or proxy statement or
Notice of Internet Availability of Proxy Materials (as applicable)
may be delivered to two or more shareholders of thea 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 or 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 Advisor at the address and phone number set forth above.
Pursuant to a request, a separate copy will be delivered promptly.
-23-
STANDSTILL AGREEMENTS RELATING TO
CERTAIN OTHER FIRST TRUST CLOSED-END FUNDS
First Trust High Income Long/Short Fund
First Trust Strategic High Income Fund II
In 2017, each of First Trust High Income Long/Short Fund ("FSD") and the
Advisor, and First Trust Strategic High Income Fund II ("FHY") (which is no
longer a fund in the First Trust Fund Complex as the result of a merger
transaction with FSD) and the Advisor, respectively, entered into a standstill
agreement (together, the "Saba Standstill Agreement") with Saba Capital
Management, L.P. and certain associated parties (collectively referred to as
"Saba"). Under the Saba Standstill Agreement, Saba agreed, among other things,
as to certain voting-related matters and standstill covenants with respect to
FSD, FHY and other investment companies advised by the Advisor until January 20,
2020.
First Trust/Aberdeen Global Opportunity Income Fund
In 2017, First Trust/Aberdeen Global Opportunity Income Fund ("FAM") and
the Advisor entered into a standstill agreement (the "Karpus Standstill
Agreement") with Karpus Management, Inc. (doing business as Karpus Investment
Management) and any present or future entities or accounts it manages or
controls or to which it is related (collectively referred to as "Karpus"). Under
the Karpus Standstill Agreement, Karpus agreed, among other things, as to
certain voting-related matters and standstill covenants with respect to FAM and
other investment companies advised by the Advisor other than First Trust
Enhanced Equity Income Fund until the earlier of the conclusion of the 2019
annual meeting of shareholders of FAM and April 30, 2019.
OTHER MATTERS TO COME BEFORE THE MEETING
No business other than the matterProposal 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 Fund.Funds.
August 7, 20156, 2018
--------------------------------------------------------------------------------
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 RETURN ENVELOPE.
--------------------------------------------------------------------------------
-24-
This page intentionally left blank.
- 22 -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
--------------------------------- ---------------- ----------------- ----------------- ----------------- -----------------
FLOATING RATE INCOME FUND 4 6 12 4 4
--------------------------------- ---------------- ----------------- ----------------- ----------------- -----------------
TARGET TERM FUND 4 6 12 4 4
--------------------------------- ---------------- ----------------- ----------------- ----------------- -----------------
EXHIBIT A
AUDIT COMMITTEE CHARTER
I. PURPOSE
The Audit Committee (the "Committee") is appointed by the Boardseach Board of
Trustees (the "Boards""Board") of the 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 Funds
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 orlisting rules of the NASDAQ Stock Marketprimary national
securities exchange on which a Fund's shares are listed for trading (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, or any subsidiary thereof, (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 LLCAmerican Stock Market 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 LLCAmerican Stock Market or the NASDAQ Stock Market (as
applicable). Any member whom the Board determines to be an "audit
committee financial expert" shall be presumed to qualify as financially
sophisticated. With respect to Funds that are closed-end funds or ETFs
whose shares are listed and trade primarily on any other national
securities exchange, the Committee will comply with any applicable
requirements of such exchange relating to the financial backgrounds of the
Committee members.
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 four times 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
Auditors' evaluation of each Fund's financial and internal controls, any
comments or recommendations of the External Auditors, any audit problems
A-2
or difficulties and Fund Management's response, including any restrictions
A-2
on the scope of the External Auditors' 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 each 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 Auditors'
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 Funds, 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. 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.
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 Funds
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 Auditors' 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 Funds
consistent with PCAOB Ethics and Independence Rule 3526) regarding (a) the
External Auditors' 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 Auditors' independence,
including all relationships between the External Auditors and the Funds
and their 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 a Fund's financial statements), in accordance with and
as required by Section 10A(b)(1) of the Exchange Act.
9. The Committee shall ensureoversee 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 consider 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 that relate to
the Fund's accounting and financial reporting, internal controls and
independent audits, 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, and any 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."Analysis" or any similar discussion of the Fund's performance, if any.
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 Fund 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 Fund 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 the applicable PCAOB Auditing Standard
that arise during the External Auditor's review of the Funds' financial
statements.
5. The Committee shall review and discuss with Fund 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 Fund 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 or any member of
the Committee also serving on the Dividend and Pricing Committee shall be
authorized to have these discussions with Fund Management on behalf of the
Committee, and shall report any material matters to the Committee regarding any such
discussions.Committee.
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, by e-mail at
sjardine@ftportfolios.com or at the address of the principal office
of the Funds, which currently is 120 East Liberty Drive, Suite 400,
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 Material Violation, the
Committee shall do the following if it deems an investigation
necessary:
(1) Notify the 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:
(4) Recommend, by majority vote, that the Fund implement
an appropriate response to evidence of a material violation;
and
(5) 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,
including anonymous submissions, regarding questionable accounting or
auditing matters by officers of the Funds and employees of Fund
Management, any administrator, fund accountant, 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 a
Fund's financial statements or compliance policies and the findings of any
examination by a regulatory agency as they relate to financial statement
matters.
A-6
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.
A-7
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 AUDITORS' 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 8, 201410, 2017
A-8
FORM OFThis page intentionally left blank.
This page intentionally left blank.
[BACK COVER]
PROXY CARD -------------------- FCT
-----------------
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
EASY VOTING OPTIONS:
VOTE BY MAIL
VOTE, SIGN AND DATE THIS PROXY
CARD AND RETURN IN THE
POSTAGE-PAID ENVELOPEVote, sign and date this Proxy
Card and return in the
postage-paid envelope
VOTE IN PERSON
ATTEND SHAREHOLDER MEETINGAttend Shareholder Meeting
120 EAST LIBERTY DRIVE, SUITEEast Liberty Drive, Suite 400
WHEATON, ILLINOISWheaton, Illinois 60187
ON SEPTEMBER 14, 2015on September 10, 2018
Please detach at perforation before mailing.
PROXY
FIRST TRUST SENIOR FLOATING RATE INCOME FUND II
PROXY
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 14, 201510, 2018
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the First Trust Senior Floating Rate Income
Fund II, a Massachusetts business trust (the "Fund"), hereby appoints W. Scott
Jardine, Mark R. Bradley, Kristi A. Maher, Erin E. Klassman, Donald P. Swade and 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 the Fund,First Trust Advisors L.P., 120 East Liberty Drive, Suite 400,
Wheaton, Illinois 60187, at 4:15 p.m.12:00 noon Central Time on the date indicated above,
and any adjournments or postponements thereof.
The undersigned hereby acknowledges receipt of the Notice of Joint Annual
MeetingMeetings of Shareholders and Joint Proxy Statement dated August 7, 2015,6, 2018, 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
adjournment or postponement 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 NOMINEE SET FORTH.
----------------------- -------------------
----------------------- -------------------
Please sign exactly as your name appears at left.
Joint owners each should sign. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign in full corporate name by
president or authorized officer. If a partnership,
please sign in partnership name by authorized person.
Please sign, date and return.
____________________________________________________
Signature
____________________________________________________
Signature (if held jointly)
____________________________________________________
Date FCT_26914_080415PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
FCT_30095_072418
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON SEPTEMBER 14, 201510, 2018
THE JOINT PROXY STATEMENT AND PROXY CARD FOR THIS MEETING ARE AVAILABLE AT:
HTTPS:https://WWW.PROXY-DIRECT.COM/FCT-26914www.proxy-direct.com/fir-30095
Please detach at perforation before mailing.
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" THE ELECTION OF THE NOMINEE SET FORTH.
TO VOTE, MARK ONE BLOCK BELOW IN BLUE OR BLACK INK.INK AS SHOWN IN THIS EXAMPLE: [X]
A PROPOSAL
1. ELECTION OF ONE CLASSElection of One Class II TRUSTEE.Trustee.
The Board of Trustees recommends that you vote FOR the election of onethe
Class II Nominee for a three-year term.
FOR WITHHOLD
01. Niel B. Nielson [ ] [ ]
B AUTHORIZED SIGNATURES -- THIS SECTION MUST BE COMPLETED FOR YOUR VOTE TO BE
COUNTED. -- SIGN AND DATE BELOW
Note: Please sign exactly as your name(s) appear(s) on this proxy card, and date
it. When shares are held jointly, each holder should sign. When signing as
attorney, executor, administrator, trustee, officer of corporation or
other entity or in another representative capacity, please give the full
title under the signature.
DATE (mm/dd/yyyy)-- SIGNATURE 1--Please keep SIGNATURE 2--Please keep
Please print date below signature within the box signature within the box
----------------------- ------------------------ ------------------------
/ /
----------------------- ------------------------ ------------------------
Scanner bar code
xxxxxxxxxxxxxx FCT 30095 M xxxxxxxx
PROXY CARD -- FIV
-----------------
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
EASY VOTING OPTIONS:
VOTE BY MAIL
Vote, sign and date this Proxy
Card and return in the
postage-paid envelope
VOTE IN PERSON
Attend Shareholder Meeting
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
on September 10, 2018
Please detach at perforation before mailing.
PROXY
FIRST TRUST SENIOR FLOATING RATE 2022 TARGET TERM FUND
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 10, 2018
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the First Trust Senior Floating Rate 2022
Target Term Fund, a Massachusetts business trust (the "Fund"), hereby appoints
W. Scott Jardine, Kristi A. Maher, Erin E. Klassman, Donald P. Swade and James
M. Dykas 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 12:00 noon 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 August 6, 2018, 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
adjournment 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 MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
26914_080415FIV_30095_072418
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON SEPTEMBER 10, 2018
THE JOINT PROXY STATEMENT AND PROXY CARD FOR THIS MEETING ARE AVAILABLE AT:
https://www.proxy-direct.com/fir-30095
Please detach at perforation before mailing.
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" THE ELECTION OF THE NOMINEES SET FORTH.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS SHOWN IN THIS EXAMPLE: [X]
A PROPOSAL
1. Election of Two Class I Trustees.
The Board of Trustees recommends that you vote FOR the election of two
Class I Nominees for a three-year term.
FOR WITHHOLD
01. Richard E. Erickson [ ] [ ]
02. Thomas R. Kadlec [ ] [ ]
B AUTHORIZED SIGNATURES -- THIS SECTION MUST BE COMPLETED FOR YOUR VOTE TO BE
COUNTED. -- SIGN AND DATE BELOW
Note: Please sign exactly as your name(s) appear(s) on this proxy card, and date
it. When shares are held jointly, each holder should sign. When signing as
attorney, executor, administrator, trustee, officer of corporation or
other entity or in another representative capacity, please give the full
title under the signature.
DATE (mm/dd/yyyy)-- SIGNATURE 1--Please keep SIGNATURE 2--Please keep
Please print date below signature within the box signature within the box
----------------------- ------------------------ ------------------------
/ /
----------------------- ------------------------ ------------------------
Scanner bar code
xxxxxxxxxxxxxx FIV 30095 M xxxxxxxx