As filed with the Securities and Exchange Commission on
March 12, 2018. =============================================================================== U.S.May 6, 2022UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTIONProxy Statement Pursuant to Section 14(a)
OF THE SECURITIES EXCHANGE ACT OFofthe Securities Exchange Act of 1934
(AMENDMENT NO.(Amendment No. )Filed by the Registrant
[X]☒Filed by a
partyParty other than the Registrant[ ]☐Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material under Section 240.14a-12 MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND FIRST TRUST ENERGY INCOME AND GROWTH FUND FIRST TRUST ENHANCED EQUITY INCOME FUND FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND FIRST TRUST STRATEGIC HIGH INCOME FUND II FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND FIRST TRUST HIGH INCOME LONG/SHORT FUND FIRST TRUST ENERGY INFRASTRUCTURE FUND FIRST TRUST MLP AND ENERGY INCOME FUND FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND -------------------------------------------------------------------------------- (Name
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material under §240.14a-12 |
First Trust Enhanced Equity Income Fund
(Name of Registrant as Specified inIn Its Charter)
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(Name
(Name of Person(s) Filing Proxy Statement, if Other Thanother than the Registrant)
Payment of filing fee (checkFiling Fee (Check all boxes that apply):
☒ | No fee required. |
☐ | Fee paid previously with preliminary materials. |
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
First Trust Enhanced Equity Income Fund (FFA)
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
May 6, 2022
Dear Shareholders:
I am writing to notify you of an important special meeting (referred to as 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part“Meeting”) of the feeshareholders of First Trust Enhanced Equity Income Fund (the “Fund”). The Meeting is offset as provided by Exchange
Act Rule 0-11(a)(2) and identifyscheduled to be held at the filing for whichoffices of 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
FIRST TRUST ENERGY INCOME AND GROWTH FUND
FIRST TRUST ENHANCED EQUITY INCOME FUND
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND II
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST HIGH INCOME LONG/SHORT FUND
FIRST TRUST ENERGY INFRASTRUCTURE FUND
FIRST TRUST MLP AND ENERGY INCOME FUND
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND
FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUNDFund’s investment advisor, First Trust Advisors L.P. (the “Advisor”), located at 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, March 8, 2018
Dear Shareholder:
The accompanying materials relate to the Joint Annual Meetings of
Shareholders (collectively, the "Meeting") of each fund listed above (each a
"Fund" and collectively the "Funds"). The Meeting will be held at the Austin,
Texas offices of First Trust Advisors L.P., 500 W. 5th Street, Suite 9202,
Austin, Texas 78701, on Monday, April 23, 2018,June 13, 2022, at 12:00 noon Central Time.
At the Meeting, you will be asked to consider and vote on a proposal to elect two ofapprove a new investment sub-advisory agreement among the Trustees of your Fund, (the "Proposal") and to transact such other business
as may properly come before the Meeting and any adjournments or postponements
thereof. The Proposal is described in the accompanying Notice of Joint Annual
Meetings of Shareholders and Joint Proxy Statement.
YOUR PARTICIPATION AT THE MEETING IS VERY IMPORTANT. If you cannot attend
the Meeting, you may participate by proxy. As a Shareholder, you cast one vote
for each full share of a Fund that you own and a proportionate fractional vote
for any fraction of a share that you own. Please take a few moments to read the
enclosed materials and then cast your vote on the enclosed proxy card.
VOTING TAKES ONLY A FEW MINUTES. EACH SHAREHOLDER'S VOTE IS IMPORTANT.
YOUR PROMPT RESPONSE WILL BE MUCH APPRECIATED.
After you have voted on the Proposal, please be sure to sign your proxy
card and return it in the enclosed postage-paid envelope.
We appreciate your participation in this important Meeting.
Thank you.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Boards
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance
to you and will avoid the time and expense to your Fund involved in validating
your vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration.
3. All Other Accounts: The capacity of the individual signing the proxy
should be indicated unless it is reflected in the form of registration. For
example:
REGISTRATION VALID SIGNATURE
CORPORATE ACCOUNTS
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr., UGMA John B. Smith
(2) John B. Smith John B. Smith, Jr., Executor
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
FIRST TRUST ENERGY INCOME AND GROWTH FUND
FIRST TRUST ENHANCED EQUITY INCOME FUND
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND II
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST HIGH INCOME LONG/SHORT FUND
FIRST TRUST ENERGY INFRASTRUCTURE FUND
FIRST TRUST MLP AND ENERGY INCOME FUND
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND
FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND
120 EAST LIBERTY DRIVE, SUITE 400
WHEATON, ILLINOIS 60187
NOTICE OF JOINT ANNUAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON APRIL 23, 2018
AT
500 W. 5TH STREET
SUITE 9202
AUSTIN, TEXAS 78701
March 8, 2018
To the Shareholders of the above Funds:
Notice is hereby given that the Joint Annual Meetings of Shareholders
(collectively, the "Meeting") of the funds listed above (each a "Fund" and
collectively the "Funds"), each a Massachusetts business trust, will be held at
the Austin, Texas offices of First Trust Advisors L.P., 500 W. 5th Street, Suite
9202, Austin, Texas 78701, on Monday, April 23, 2018, at 12:00 noon Central
Time, for the following purposes:
1. To elect two Trusteesas investment advisor, and Chartwell Investment Partners, LLC (“Chartwell”), as investment sub-advisor (the Class II Trustees) of each Fund.
2. To“New Agreement”). You will also be asked to transact such other business as may properly come before the Meeting or any adjournments or postponements thereof.
TriState Capital Holdings, Inc. (NASDAQ: TSC) (“TriState”), which is Chartwell’s parent company, has entered into a definitive agreement with Raymond James Financial, Inc. (NYSE: RJF) (“Raymond James”), under which Raymond James will acquire TriState (the “Transaction”), subject to applicable regulatory approvals, approval by TriState’s shareholders and other customary closing conditions. As part of the Transaction, Chartwell, a wholly-owned subsidiary of TriState, will become a wholly-owned subsidiary of Carillon Tower Advisers, Inc., which is Raymond James’ asset management subsidiary. The Transaction is currently expected to close some time in the second quarter of 2022.
The closing of the Transaction will operate as an “assignment” (as defined in the Investment Company Act of 1940, as amended (the “1940 Act”)), resulting in the automatic termination of the Fund’s existing investment sub-advisory agreement with Chartwell. In anticipation of the closing of the Transaction and the termination of the Fund’s existing sub-advisory agreement with Chartwell, the Board of Trustees of the Fund (the “Board”) considered and approved the New Agreement, subject to shareholder approval. In addition, to avoid any interruption of services in the event the Transaction closes prior to receipt of shareholder approval of the New Agreement, the Board also approved an interim sub-advisory agreement with Chartwell.
It is important to note that the day-to-day operations of the Fund are not expected to change as a result of the Transaction and the portfolio managers of the Fund are expected to remain the same. Additionally, the New Agreement will not result in changes to the Fund’s investment sub-advisory fee rate. The Board of Trustees of eachthe Fund has fixedrecommends that shareholders of the Fund approve the New Agreement.
Your vote is important. Please take a moment now to vote, either by completing and returning your proxy card in the enclosed postage-paid return envelope, by telephone or via the Internet. Your prompt response will be much appreciated.
Sincerely,
James A. Bowen
Chairman of the Board
If You Need Any Assistance Or Have Any Questions Regarding The Proposal Or How To Vote Your Shares, Please Call The Fund’s Proxy Solicitor, AST Fund Solutions, LLC, At (888) 567-1626 Weekdays From 9:00 a.m. To 10:00 p.m. Eastern Time.
First Trust Enhanced Equity Income Fund (FFA)
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
Notice of Special Meeting of Shareholders
To be held on June 13, 2022
May 6, 2022
To the Shareholders of First Trust Enhanced Equity Income Fund:
Notice is hereby given that a Special Meeting of Shareholders (the “Meeting”) of First Trust Enhanced Equity Income Fund (the “Fund”), a Massachusetts business trust, is scheduled to be held at the Wheaton, Illinois offices of First Trust Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, on Monday, June 13, 2022, at 12:00 noon Central Time. At the Meeting, shareholders will be asked to consider and vote on Proposal 1 set forth below and to transact such other business as may properly come before the Meeting (including any adjournments or postponements):
Proposal 1. To approve a new investment sub-advisory agreement among the Fund, First Trust Advisors L.P., as investment advisor, and Chartwell Investment Partners, LLC, as investment sub-advisor.
The close of business on January 31, 2018March 14, 2022 has been fixed as the record date for the determination of shareholders of suchthe Fund entitled to notice of and to vote at the Meeting and any adjournments or postponements thereof.
By Order of the BoardsBoard of Trustees,
/s/
W. Scott Jardine
W. Scott Jardine
Secretary
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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 SIGNING PROXY CARDS ARE SET FORTH
FOLLOWING THE LETTER TO SHAREHOLDERS.
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It is important that your shares be represented at the Meeting. In order to avoid delay and to ensure that your shares are represented, please vote as promptly as possible. You may vote easily and quickly by mail, by telephone or through the internet. You may also vote in person by attending the Meeting. To vote by mail, please complete and mail your proxy card in the enclosed postage-paid return envelope. To vote by telephone or through the internet, please follow the instructions on the proxy card. If you need any assistance or have any questions regarding Proposal 1 or how to vote your shares, please call the Fund’s Proxy Solicitor, AST Fund Solutions, LLC, at (888) 567-1626 weekdays from 9:00 a.m. to 10:00 p.m. Eastern Time.
First Trust Enhanced Equity Income Fund (FFA)
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
Special Meeting of Shareholders
To be held on June 13, 2022
Proxy Statement
May 6, 2022
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
FIRST TRUST ENERGY INCOME AND GROWTH FUND
FIRST TRUST ENHANCED EQUITY INCOME FUND
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND II
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST HIGH INCOME LONG/SHORT FUND
FIRST TRUST ENERGY INFRASTRUCTURE FUND
FIRST TRUST MLP AND ENERGY INCOME FUND
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND
FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND
120 EAST LIBERTY DRIVE, SUITE 400
WHEATON, ILLINOIS 60187
JOINT ANNUAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON APRIL 23, 2018
AT
500 W. 5TH STREET
SUITE 9202
AUSTIN, TEXAS 78701
JOINT PROXY STATEMENT
MARCH 8, 2018
THIS JOINT PROXY STATEMENT AND THE ENCLOSED PROXY CARD WILL FIRST BE
MAILED TO SHAREHOLDERS ON OR ABOUT MARCH 15, 2018.
Proxy Statement and the enclosed proxy card will first be mailed to shareholders on or about May 13, 2022.
This Joint Proxy Statement is being furnished by the Board of Trustees (the “Board of Trustees” or the “Board”) of First Trust Enhanced Equity Income Fund (the “Fund”) in connection with the solicitation by the Board of proxies by the Boards of Trusteesto be voted at a special meeting of the funds listed above
(each a "Fund" and collectively the "Funds"), each a Massachusetts business
trust, for use at the Annual Meetings of Shareholdersshareholders of the FundsFund scheduled to be held on Monday, April 23, 2018,June 13, 2022, at 12:00 noon Central Time, at the Austin, Texas offices of the Fund’s investment advisor, First Trust Advisors L.P., (“First Trust” or the investment advisor to each Fund, located at
500 W. 5th Street, Suite 9202, Austin, Texas 78701, and at any adjournments or
postponements thereof (collectively, the "Meeting"“Advisor”). A Notice of Joint Annual
Meetings 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 same matter
being considered and voted on by shareholders.
The principal offices of First Trust Energy Income and Growth Fund, First
Trust MLP and Energy Income Fund and First Trust New Opportunities MLP & Energy
Fund are located at 10 Westport Road, Suite C101A, Wilton, Connecticut 06897.
The principal offices of each of the other Funds are, located at 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187.60187, and at any and all adjournments or postponements thereof (referred to collectively as the “Meeting”). A Notice of Special Meeting of Shareholders and a proxy card accompany this Proxy solicitations will be made primarily by mail. However, proxy
solicitationsStatement.
As discussed more fully below, shareholders of the Fund are being asked to consider and vote on the proposal set forth below and to transact such other business as may also be madeproperly come before the Meeting (including any adjournments or postponements):
• To approve a new investment sub-advisory agreement among the Fund, First Trust Advisors L.P., as investment advisor, and Chartwell Investment Partners, LLC, as investment sub-advisor (“Proposal 1” or the “Proposal”).
Shareholders may vote by telephone or personal interviews conductedvia the Internet by following the instructions on the enclosed proxy card. Shareholders may also vote by mail by returning the enclosed proxy card or in person by attending the Meeting. Please note that shareholders who intend to attend the Meeting will need to provide valid identification and, if they hold shares through a bank, broker or other nominee, satisfactory proof of ownership of shares, such as a voting instruction form (or a copy thereof) or a letter from their bank, broker or other nominee or broker’s statement indicating ownership as of the Record Date (as defined below), to be admitted to the Meeting.
The Board recommends that shareholders vote “FOR” the Proposal.
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of Shareholders Scheduled to Be Held on June 13, 2022. This Proxy Statement is available on the Internet at https://www.ftportfolios.com/LoadContent/goaucpjwgo3y. The Fund’s most recent annual and semi-annual reports are also available on the Internet at https://www.ftportfolios.com/Retail/Cef/CEFFundNews.aspx?Ticker=FFA. The Fund will furnish, without charge, copies of its most recent annual and semi-annual reports to any shareholder upon request. To request a copy, please write to First Trust Advisors L.P. 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.
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Proposal 1: Approval of a New Investment Sub-Advisory Agreement for the Fund
Background and Reason for Meeting
Chartwell Investment Partners, LLC currently serves as investment sub-advisor to the Fund. Chartwell Investment Partners, LLC or a predecessor entity (the terms “Chartwell” and the “Sub-Advisor” may refer to Chartwell Investment Partners, LLC or one of its predecessor entities) has served as investment sub-advisor to the Fund since 2007. As investment sub-advisor, Chartwell is responsible for, among other things, the selection and ongoing monitoring of the securities in the Fund’s investment portfolio pursuant to an investment sub-advisory agreement dated as of July 2, 2014 among the Fund, the Advisor and Chartwell (the “Current Sub-Advisory Agreement”).
Currently, Chartwell is a wholly-owned subsidiary of TriState Capital Holdings, Inc. (NASDAQ: TSC) (“TriState”), a publicly traded company. TriState has entered into a definitive agreement with Raymond James Financial, Inc. (NYSE: RJF) (“Raymond James”), a publicly traded company, under which Raymond James will acquire TriState (the “Transaction”), subject to applicable regulatory approvals, approval by TriState’s shareholders and other customary closing conditions. As part of the Transaction, Chartwell will become a wholly-owned subsidiary of Carillon Tower Advisers, Inc. (“Carillon”), a wholly-owned subsidiary of Raymond James that is registered with the Securities and Exchange Commission (“SEC”) as an investment advisor. The Transaction is currently expected to close some time in the second quarter of 2022 (the “Closing”). After the Closing, it is anticipated that Chartwell, operating as a subsidiary of Carillon, will maintain its independent brand and management.
Section 15 of the Investment Company Act of 1940, as amended (the “1940 Act”), requires, among other things, that any investment advisory agreement, including any investment sub-advisory agreement, provide for its automatic termination in the event of its “assignment.” The closing of the Transaction will operate as an “assignment” (as defined in the 1940 Act) of the Current Sub-Advisory Agreement that will result in its automatic termination. Accordingly, shareholders of the Fund are being asked to approve a new investment sub-advisory agreement among the Fund, the Advisor and Chartwell (the “New Sub-Advisory Agreement”).
In anticipation of the Transaction, at a meeting held on December 5-6, 2021 (the “Board Meeting”), the Board of Trustees of the Fund, after careful consideration, determined that it would be in the best interests of the Fund for Chartwell to continue to act as the investment sub-advisor to the Fund following the Closing. Accordingly, at the Board Meeting, the Board, including a majority of the Trustees who are not “interested persons” of the Fund (as defined in the 1940 Act) (the “Independent Trustees”), approved, subject to shareholder approval, the New Sub-Advisory Agreement. In addition, to avoid any interruption of investment sub-advisory services for the Fund in the event the Closing occurs prior to the receipt of shareholder approval of the New Sub-Advisory Agreement, the Board, including a majority of the Independent Trustees, also approved an interim sub-advisory agreement with Chartwell (the “Interim Sub-Advisory Agreement”). If the Closing occurs prior to the receipt of shareholder approval of the New Sub-Advisory Agreement, the Interim Sub-Advisory Agreement would be effective upon the Closing and would remain in effect (a) for 150 days following the Closing, (b) until shareholders of the Fund approve the New Sub-Advisory Agreement, or (c) until sooner terminated as provided by the terms of the Interim Sub-Advisory Agreement, whichever occurs first. (See “BOARD CONSIDERATIONS” below.)
It is important to note that the Transaction is not expected to impact the day-to-day operations of the Fund and the portfolio managers of the Fund (identified below under “PORTFOLIO MANAGEMENT”) are expected to remain the same. Additionally, the New Sub-Advisory Agreement will not result in changes to the Fund’s investment sub-advisory fee rate.
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Additional Information
Chartwell, located at 1205 Westlakes Drive, Berwyn, Pennsylvania 19312, is an investment advisor registered with the SEC. The firm focuses on institutional, sub-advisory and private client relationships, and is a research-based equity and fixed-income manager with a disciplined, team-oriented investment process. As of February 28, 2022, Chartwell had approximately $11.4 billion in assets under management.
The names, positions with Chartwell and principal occupations of the persons who are principal executive officers and service providersdirectors of Chartwell are listed below:
Name | Position(s) with Chartwell and Principal Occupation |
Timothy J. Riddle | Managing Partner and Chief Executive Officer (“CEO”) of Chartwell |
Michael P. Magee | Chief Operating Officer of Chartwell |
G. Gregory Hagar | Managing Partner and Chief Financial Officer of Chartwell |
LuAnn M. Molino | Chief Compliance Officer of Chartwell |
Michael J. McCloskey | Managing Partner and Director of Client Services of Chartwell |
James F. Getz | Director and Chairman of Chartwell Board; Executive Chairman of the Board of TriState Capital Holdings, Inc. |
Brian S. Fetterolf | Director and Vice Chairman of Chartwell Board; President, CEO and Director of TriState Capital Holdings, Inc., TriState Capital Bank and Chartwell TSC Securities |
David L. Bonvenuto | Director of Chartwell Board; President and Chief Operating Officer of Ibis Tek, Inc. (now XPER USA), a privately held contract manufacturer with a primary focus on transparent and opaque armor solutions for both private and military applications |
James Dolan | Director of Chartwell Board; Managing Partner of Voyager Group L.P., a diversified company that invests in businesses involving technology, financial services, aviation and natural resources |
Karla Villatoro de Friedman | Secretary of Chartwell Board; General Counsel of TriState Capital Bank; Chief Compliance Officer of Chartwell TSC Securities |
The business address for Ms. Molino and Messrs. Riddle, Magee, Hagar and McCloskey is 1205 Westlakes Drive, Suite 100, Berwyn, Pennsylvania 19312. The business address for Ms. Villatoro de Friedman and Messrs. Getz, Fetterolf, Bonvenuto and Dolan is One Oxford Centre, 301 Grant Street, Suite 2700, Pittsburgh, Pennsylvania 15219.
Currently, Chartwell is a wholly-owned subsidiary of TriState. TriState is a diversified financial services firm providing banking and asset management services to individuals, corporations and municipalities. TriState’s principal executive offices are located at One Oxford Centre, 301 Grant Street, Suite 2700, Pittsburgh, Pennsylvania 15219. Following the Closing, it is anticipated that TriState will operate as a separately branded firm and as a stand-alone division and independently chartered bank subsidiary of Raymond James, but TriState will not retain an ownership interest in Chartwell.
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As noted above, as a result of the Funds, includingClosing, Chartwell will become a wholly-owned subsidiary of Carillon, which is a wholly-owned subsidiary of Raymond James. As of February 28, 2022, Carillon and its investment management affiliates collectively had approximately $72 billion in assets under management. Raymond James is a diversified financial services company providing private client group, capital markets, asset management, banking and other services to individuals, corporations and municipalities. Carillon and Raymond James are each located at 880 Carillon Parkway, Saint Petersburg, Florida 33716.
Portfolio Management
The Closing is not expected to result in any agentschanges to the portfolio managers serving the Fund, identified below.
Douglas W. Kugler, CFA
Senior Portfolio Manager
Mr. Kugler joined Chartwell in 2003, is a Senior Portfolio Manager on Chartwell’s large-cap equity portfolio management team and has 25 years of investment industry experience. From 1993 to 2003, he held several positions at Morgan Stanley Investment Management (Miller Anderson & Sherrerd), the last of which was Senior Associate and Analyst for the Large Cap Value team. Mr. Kugler is a member of the CFA (Chartered Financial Analysts) Institute and the CFA Society of Philadelphia. He holds the Chartered Financial Analyst designation. Mr. Kugler earned a Bachelor’s degree in Accounting from the University of Delaware.
Peter M. Schofield, CFA
Senior Portfolio Manager
Mr. Schofield joined Chartwell in 2010, is a Senior Portfolio Manager on Chartwell’s large-cap equity portfolio management team and has 38 years of investment industry experience. From 2005 to 2010, he was a Co-Chief Investment Officer at Knott Capital. From 1996 to 2005, he was a Portfolio Manager at Sovereign Asset Management. Prior to Sovereign Asset Management, he was a portfolio manager at Geewax, Terker & Company. Mr. Schofield holds the Chartered Financial Analyst designation and is a member of the CFA (Chartered Financial Analysts) Institute and the CFA Society of Philadelphia. Mr. Schofield earned a Bachelor’s degree in History from the University of Pennsylvania.
Section 15(f) of the 1940 Act
Section 15(f) of the 1940 Act is a safe harbor that provides in substance that, when a sale of a controlling interest in an investment advisor occurs, the investment advisor or affiliatesany of such service providers.
The costs incurredits affiliated persons may receive any amount or benefit in connection with the preparationsale as long as two conditions are met. If either condition of Section 15(f) is not met, the safe harbor is not available. The first condition specifies that, during the three-year period immediately following consummation of the transaction, at least 75% of the investment company’s board of directors/trustees must not be “interested persons” (as defined in the 1940 Act) of the investment advisor or predecessor advisor. During the three-year period immediately following the consummation of the Transaction, it is anticipated that at least 75% of the Trustees will not be “interested persons” (as defined in the 1940 Act) of Chartwell. The second condition specifies that no “unfair burden” may be imposed on the investment company as a result of the transaction relating to the sale of the controlling interest in the investment advisor, or any express or implied terms, conditions or understandings applicable thereto. The term “unfair burden,” as defined in the 1940 Act, includes any arrangement, during the two-year period after the transaction occurs, whereby the investment advisor (or predecessor or successor advisor), or any interested person of any such investment advisor, receives or is entitled to receive any compensation, directly or indirectly (i) from any person in connection with the purchase or sale of securities or other property, to, from or on behalf of the investment company (other than bona fide ordinary compensation as principal underwriter for the investment company) or (ii) from the investment company or its security holders for other than bona fide investment advisory or other services. Chartwell will not impose or seek to impose any “unfair burden” on the Fund as a result of the Transaction.
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The Current Sub-Advisory Agreement
Set forth below is information pertaining to the Current Sub-Advisory Agreement.
Date of Current Sub-Advisory Agreement | Date/Purpose of Last Submission to Shareholders | Date/Purpose of Action(s) by Board Since Beginning of Last Fiscal Year |
July 2, 2014 | The Current Sub-Advisory Agreement was approved by the shareholders of the Fund on July 2, 2014 in connection with a change in control of Chartwell. | June 7, 2021; Continuation of Current Sub-Advisory Agreement. |
Comparison of Certain Terms of the New Sub-Advisory Agreement and Current Sub-Advisory Agreement
Below is a comparison of the material terms of the Current Sub-Advisory Agreement to the corresponding terms of the New Sub-Advisory Agreement. As described below, many of the terms of the New Sub-Advisory Agreement and the Current Sub-Advisory Agreement are the same, including, among others, those relating to fees. The New Sub-Advisory Agreement will have a new effective date and initial term. In addition, the New Sub-Advisory Agreement will include a new provision that specifically precludes third-party beneficiaries and a new provision relating to forum selection. If approved by shareholders, the New Sub-Advisory Agreement will become effective upon or following such approval (but not before the Closing) and will remain in effect for two years (unless sooner terminated in accordance with its terms); thereafter, it may be continued for successive one-year periods as described below under “Continuance.” The summary set forth below is qualified by reference to the form of the New Sub-Advisory Agreement attached to this Joint Proxy Statement as Exhibit A. You should refer to Exhibit A for the complete terms of the New Sub-Advisory Agreement.
Sub-Advisory Services. Both the Current Sub-Advisory Agreement and the New Sub-Advisory Agreement provide that the Sub-Advisor will manage on a discretionary basis the investment and reinvestment of the assets of the Fund, furnish an investment program in respect of, make investment decisions for, and place all orders for the purchase and sale of securities for the Fund’s investment portfolio, all on behalf of the Fund and subject to the supervision of the Fund’s Board and the Advisor. As is the case under the Current Sub-Advisory Agreement, under the New Sub-Advisory Agreement, the Sub-Advisor is required to monitor the Fund’s investments and to comply with the provisions of the Fund’s Declaration of Trust and By-Laws and the stated investment objectives, policies and restrictions of the Fund.
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Brokerage/Purchases and Sales of Portfolio Investments. As is the case under the Current Sub-Advisory Agreement, the New Sub-Advisory Agreement authorizes the Sub-Advisor to select the brokers or dealers that will execute the purchases and sales of portfolio investments for the Fund, and directs the Sub-Advisor to use its enclosurescommercially reasonable efforts to obtain best execution, which includes most favorable net results and execution of the Fund’s orders, taking into account all appropriate factors, including price, dealer spread or commission, size and difficulty of the transaction and research or other services provided. In addition, under both the Current Sub-Advisory Agreement and the New Sub-Advisory Agreement, the Sub-Advisor agrees to communicate to the officers and Trustees of the Fund such information relating to transactions for the Fund as they may reasonably request. Further, both the Current Sub-Advisory Agreement and the New Sub-Advisory Agreement provide that in no instance will the Fund’s portfolio securities be purchased from or sold to the Advisor, the Sub-Advisor or any affiliated person of either the Fund, the Advisor or the Sub-Advisor, except as may be permitted under the 1940 Act. In addition, the New Sub-Advisory Agreement provides that under no circumstances will the Sub-Advisor select brokers or dealers for Fund transactions on the basis of Fund share sales by such brokers or dealers.
Fees. The New Sub-Advisory Agreement will not result in changes to the Fund’s investment sub-advisory fee rate. As is the case under the Current Sub-Advisory Agreement, under the New Sub-Advisory Agreement, the Advisor will pay the Sub-Advisor a portfolio management fee on a monthly basis. Both the Current Sub-Advisory Agreement and the New Sub-Advisory Agreement provide that for services provided and expenses assumed, the Advisor will pay the Sub-Advisor a fee equal to the annual rate of 0.50% of the Fund’s “Managed Assets” (i.e., average daily gross assets of the Fund, minus the sum of the Fund’s accrued and unpaid dividends on any outstanding common shares and accrued liabilities (including the value of call options written (sold))).
For the Fund’s last fiscal year, the aggregate amount of the sub-advisory fees paid by the Funds. The Funds will also
reimburse brokerage firms and others for their expenses in forwarding proxy
solicitation materialAdvisor to the person(s) for whom they hold Fund shares.
The closeSub-Advisor was $1,944,843.
Payment of business on January 31, 2018 has been fixed asExpenses. As is the record
date (the "Record Date")case under the Current Sub-Advisory Agreement, under the New Sub-Advisory Agreement, the Sub-Advisor agrees to pay all expenses it incurs in connection with its activities under such Agreement other than (i) the cost of securities and other assets purchased for the determinationFund and (ii) the costs directly associated with purchasing and selling securities and other assets for the Fund, if any, including, but not limited to, brokerage commissions, stamps, duties, taxes and custody fees related to transfers.
Limitation of Liability. As is the case under the Current Sub-Advisory Agreement, the New Sub-Advisory Agreement provides that the Sub-Advisor will not be liable for, and the Fund and the Advisor will not take any action against the Sub-Advisor to hold the Sub-Advisor liable for, any error of judgment or mistake of law or for any loss suffered by the Fund or the Advisor in connection with the performance of the Sub-Advisor’s duties under the Agreement, except for a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Sub-Advisor in the performance of its duties under such Agreement, or by reason of its reckless disregard of its obligations and duties under such Agreement.
Continuance. The Current Sub-Advisory Agreement was originally in effect for a specified initial term and states that it may be continued thereafter for successive one-year periods if such continuance is specifically approved at least annually in the manner required by the 1940 Act and the rules and regulations thereunder. If the shareholders entitledof the Fund approve the New Sub-Advisory Agreement, the New Sub-Advisory Agreement will remain in effect for two years (unless sooner terminated in accordance with such Agreement). Thereafter, the New Sub-Advisory Agreement may be continued for successive one-year periods if such continuance is specifically approved at least annually in the manner required by the 1940 Act and the rules and regulations thereunder.
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Termination. As is the case under the Current Sub-Advisory Agreement, the New Sub-Advisory Agreement provides for termination: (1) automatically in the event of its assignment (as defined in the 1940 Act and rules and regulations thereunder); (2) at any time without the payment of any penalty by the Advisor or the Sub-Advisor upon 60 days’ written notice to the other parties; and (3) by action of the Board or by a vote of a majority of the outstanding voting securities (as defined in the 1940 Act and rules and regulations thereunder) of the Fund upon 60 days’ written notice to the Sub-Advisor without the payment of any penalty. In addition, both the Current Sub-Advisory Agreement and the New Sub-Advisory Agreement are terminable at any time without the payment of any penalty by the Advisor, by the Board or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act and rules and regulations thereunder) of the Fund in the event that it is established by a court of competent jurisdiction that the Sub-Advisor or any of its officers or directors have taken any action that results in a breach of the material covenants of the Sub-Advisor set forth in the Agreement.
Applicable Law. As is the case under the Current Sub-Advisory Agreement, the New Sub-Advisory Agreement states that such Agreement shall be construed in accordance with applicable federal law and (except as to votecertain limitation of liability provisions, which shall be construed in accordance with the laws of Massachusetts) the laws of the State of Illinois. Further, the New Sub-Advisory Agreement (but not the Current Sub-Advisory Agreement) provides that for the avoidance of doubt, where the effect of a requirement of the 1940 Act reflected in any provision of such Agreement is relaxed by a rule, regulation, no-action assurance, order (including any amendment thereto) or other relief of the SEC, whether of special or of general application, such provision shall be deemed to incorporate the effect of such rule, regulation, no-action assurance, order (including any amendment thereto) or other relief.
Third Party Beneficiaries. The New Sub-Advisory Agreement (but not the Current Sub-Advisory Agreement) includes a provision stating that none of the provisions of the Agreement shall be for the benefit of, or enforceable by, any person or entity that is not a party thereto.
Forum Selection. The New Sub-Advisory Agreement (but not the Current Sub-Advisory Agreement) includes a provision stating, among other things, that any action brought on or with respect to the New Sub-Advisory Agreement or any other document executed in connection therewith by a party to such Agreement against another party to the Agreement shall be brought only in a court of competent jurisdiction in Chicago, Cook County, Illinois, or if venue does not lie in any such court only in a court of competent jurisdiction within the State of Illinois. Further, the right to a trial by jury is expressly waived to the fullest extent permitted by law.
Related Agreement
On September 14, 2007 (the date on which Chartwell first began acting as investment sub-advisor to the Fund), Chartwell and the Advisor entered into an agreement to address certain matters pertaining to the Fund (such agreement, the “Related Agreement”). Among other things, under the Related Agreement, Chartwell is obligated to reimburse the Advisor for a portion of certain “incentive fee” payments payable by the Advisor to certain underwriters of the Fund’s initial public offering up to specified limits. These underwriters include Raymond James & Associates, Inc. (“RJ&A”), which is a wholly-owned subsidiary of Raymond James. In conjunction with the Fund’s initial public offering in 2004, the Advisor agreed, in general terms, to pay RJ&A a quarterly “incentive fee” at an annual rate of up to 0.10% of the Meeting and any adjournments or postponements
thereof.
Each Fund has one class ofFund’s average weekly “total assets” attributable to common shares of beneficial interest, par value $0.01
per share, known as common shares ("Shares").
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SHAREHOLDER MEETING TO BE HELD ON APRIL 23, 2018. THIS JOINT PROXY
STATEMENT IS AVAILABLE ON THE INTERNET AT
HTTPS://WWW.FTPORTFOLIOS.COM/LOADCONTENT/GEADRCTIGEHY. EACH FUND'S MOST RECENT
ANNUAL AND SEMI-ANNUAL REPORTS ARE ALSO AVAILABLE ON THE INTERNET AT
HTTPS://WWW.FTPORTFOLIOS.COM. TO FIND A REPORT, SELECT YOUR FUND UNDER THE
"CLOSED-END FUNDS" TAB, SELECT THE "NEWS & LITERATURE" LINK, AND GO TO THE
"QUARTERLY/SEMI-ANNUAL OR ANNUAL REPORTS" HEADING. IN ADDITION, THE FUNDS WILL
FURNISH, WITHOUT CHARGE, COPIES OF THEIR MOST RECENT ANNUAL AND SEMI-ANNUAL
REPORTS TO ANY SHAREHOLDER UPON REQUEST. TO REQUEST A COPY, PLEASE WRITE TO
FIRST TRUST ADVISORS L.P. ("FIRST TRUST ADVISORS" OR THE "ADVISOR"), AT 120 EAST
LIBERTY DRIVE, SUITE 400, WHEATON, ILLINOIS 60187, OR CALL 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 maythe Fund sold in such offering by RJ&A, subject to specified limits. The Related Agreement will continue to be in effect following the Closing.
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Brokerage Commissions Paid to RJ&A
For the Fund’s last fiscal year, brokerage commissions in an amount equal to $11,137 were paid to RJ&A and represented atapproximately 19% of 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 timeFund’s aggregate brokerage commissions (not including certain commissions relating to options transactions).
Interim Sub-Advisory Agreement
As indicated above, to avoid any interruption of investment sub-advisory services for the proxy card to be received BY 12:00
NOON CENTRAL TIME, on MONDAY, APRIL 23, 2018. (However, proxies
received after this date may still be votedFund in the event the Meeting
is adjournedClosing occurs prior to the receipt of shareholder approval of the New Sub-Advisory Agreement, the Board has also approved the Interim Sub-Advisory Agreement. Except for the addition of certain introductory recitals, updates regarding Chartwell’s name and form of organization, and differences in provisions relating to the effective date, termination, and compensation arrangements described below, the provisions of the Interim Sub-Advisory Agreement are substantially the same as those of the Current Sub-Advisory Agreement.
If the Closing occurs before shareholders of the Fund approve the New Sub-Advisory Agreement, the Interim Sub-Advisory Agreement will become effective upon the Closing and, unless terminated sooner in accordance with its terms, will continue to be in effect through the earlier of (a) 150 days following the Closing or postponed to(b) the date on which shareholders of the Fund approve the New Sub-Advisory Agreement. The Interim Sub-Advisory Agreement may be terminated by the Fund by action of the Board or by a later date.)
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VOTING
As described further in the proposal, for each Fund, the affirmative vote of a pluralitymajority of the Sharesoutstanding voting securities (as defined in the 1940 Act and the rules and regulations thereunder) of the Fund upon 10 calendar days’ written notice. (The Current Sub-Advisory Agreement requires 60 days’ written notice.)
If the Interim Sub-Advisory Agreement were to become effective, the rate of compensation that would be paid to Chartwell under the Interim Sub-Advisory Agreement would be the same as that paid to Chartwell under the Current Sub-Advisory Agreement. However, the compensation accrued under the Interim Sub-Advisory Agreement would be held in an interest-bearing escrow account with the Fund’s custodian or another bank designated by the Fund. If the New Sub-Advisory Agreement were approved by shareholders of the Fund by the end of the 150-day term of the Interim Sub-Advisory Agreement, the amount in the escrow account (including interest earned) would be paid to Chartwell. However, if shareholders of the Fund did not approve the New Sub-Advisory Agreement by such date, Chartwell would be paid, out of the escrow account, the lesser of: (i) any costs incurred by Chartwell in performing the Interim Sub-Advisory Agreement (plus interest earned on that amount while in escrow) for the Fund; or (ii) the total amount in the escrow account (plus interest earned) held on behalf of the Fund.
Board Considerations
The Board of Trustees, including the Independent Trustees, unanimously approved (1) the Interim Sub-Advisory Agreement and (2) the New Sub-Advisory Agreement. The Interim Sub-Advisory Agreement and the New Sub-Advisory Agreement are collectively referred to as the “Agreements.” The Board approved the Agreements at a meeting held on December 5-6, 2021. The Board determined that the approval of the Agreements is in the best interests of the Fund in light of the nature, extent and quality of the services expected to be provided and such other matters as the Board considered to be relevant in the exercise of its business judgment.
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The Sub-Advisor currently serves as investment sub-advisor to the Fund pursuant to the Current Sub-Advisory Agreement. Prior to the December 2021 meeting, the Board was informed that TriState Capital Holdings, Inc. (previously defined as “TriState”), the Sub-Advisor’s parent company, had entered into a definitive agreement under which Raymond James Financial, Inc. would acquire TriState (previously referred to as the “Transaction”). The Board was informed that the consummation of the Transaction, which is expected to occur in the second quarter of 2022, would operate as an “assignment” of the Current Sub-Advisory Agreement under the 1940 Act, and as a result the Current Sub-Advisory Agreement would terminate pursuant to its terms and the requirements of the 1940 Act. The Agreements were proposed to the Board in connection with the Transaction to provide for the continuous management of the Fund by the Sub-Advisor following the consummation of the Transaction. The Board noted that the New Sub-Advisory Agreement will be submitted to shareholders of the Fund for their approval and that the Interim Sub-Advisory Agreement would become effective only if shareholders of the Fund do not approve the New Sub-Advisory Agreement prior to the consummation of the Transaction and would remain in effect until the earlier of 150 days from the consummation of the Transaction or shareholder approval of the New Sub-Advisory Agreement.
On October 28, 2021, counsel to the Independent Trustees provided the Sub-Advisor with a request for information regarding the Transaction and its expected impact on the Sub-Advisor. At an executive session held on December 2, 2021, as well as at the meeting held on December 5-6, 2021, the Board, including the Independent Trustees, discussed the Transaction and reviewed the materials provided by the Sub-Advisor in response to the request that, among other things, outlined the structure and details of the Transaction and the Transaction’s expected impact on the Sub-Advisor’s management of the Fund under the Agreements.
To reach its determination in approving the Agreements for the Fund, the Board considered its duties under the 1940 Act, as well as under the general principles of state law, in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; the fiduciary duty of investment advisors with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards have fulfilled their duties; and the factors to be considered by the Board in voting on such agreements. In connection with its deliberations regarding the Agreements, the Board noted that, based on the information provided by the Advisor and the Sub-Advisor, any differences in the terms and conditions of each Agreement, including the effective and termination dates and any provisions of the Interim Sub-Advisory Agreement required by Rule 15a-4 under the 1940 Act, and the terms and conditions of the Current Sub-Advisory Agreement were immaterial to the Sub-Advisor’s management of the Fund. The Board considered that the information provided by the Sub-Advisor in response to the Independent Trustees’ request for information included representations that the Sub-Advisor anticipates no changes to key personnel who work on matters relating to the Fund, including the portfolio management team, senior management and compliance personnel, as a result of the Transaction; that the sub-advisory fee rate for the Fund would remain the same; and that the Transaction would not result in any diminution in the nature, quality and extent of the services provided to the Fund by the Sub-Advisor. In addition, representatives of the Sub-Advisor joined the December 2021 Board meeting and discussed the Transaction with the Board.
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The Board also considered that it had last approved the Current Sub-Advisory Agreement for the Fund during the annual contract renewal process that concluded at the Board’s June 6-7, 2021 meeting. Given the Sub-Advisor’s representations that there would be no changes in the services provided to the Fund as a result of the Transaction, that any differences in the terms of the Current Sub-Advisory Agreement and the New Sub-Advisory Agreement were immaterial to the Sub-Advisor’s management of the Fund and that, except as discussed in the response to the Independent Trustees’ October 28, 2021 request to the Sub-Advisor relating to the Transaction, the Board could continue to rely on the materials provided by the Sub-Advisor in connection with the June 2021 renewal of the Current Sub-Advisory Agreement, the Board determined that its prior considerations in approving the renewal of the Current Sub-Advisory Agreement remained relevant. The Board noted that, in reviewing and renewing the Current Sub-Advisory Agreement:
· | The Board considered the nature, extent and quality of the services provided by the Sub-Advisor and that the Sub-Advisor actively manages the Fund’s investments. In considering the Sub-Advisor’s management of the Fund, the Board noted the background and experience of the Sub-Advisor’s portfolio management team, including the Board’s prior meetings with members of the portfolio management team. In light of the information presented and the considerations made, the Board concluded that the nature, extent and quality of the services provided to the Fund by the Sub-Advisor were satisfactory and that the Sub-Advisor, under the oversight of the Advisor, has managed the Fund consistent with the Fund’s investment objective, policies and restrictions. |
· | The Board noted that the sub-advisory fee for the Fund is paid by the Advisor from the advisory fee payable under the Fund’s investment advisory agreement and its understanding that the Fund’s sub-advisory fee rate was the product of an arm’s length negotiation. The Board received and reviewed information showing the sub-advisory fee rate for the Fund as compared to fees charged to other clients of the Sub-Advisor. |
· | The Board considered performance information for the Fund. The Board noted the process that it has established for monitoring the Fund’s performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Sub-Advisor for the Fund. The Board determined that this process continues to be effective for reviewing the Fund’s performance. The Board received and reviewed information comparing the Fund’s performance for periods ended December 31, 2020 to that of two benchmark indexes and to that of a performance group of funds and a broad performance universe of funds (the “Performance Universe”), each assembled by Broadridge Financial Solutions, Inc., an independent source. Based on the information provided on net asset value performance, the Board noted that the Fund outperformed the Performance Universe median and one of the benchmark indexes for the one-, three-, five- and ten-year periods ended December 31, 2020. The Board also noted that the Fund underperformed the other benchmark index for the one-, three-, five- and ten-year periods ended December 31, 2020. |
· | On the basis of all the information provided on the fees, expenses and performance of the Fund and the ongoing oversight by the Board, the Board concluded that the sub-advisory fee continues to be reasonable and appropriate in light of the nature, extent and quality of the services provided by the Sub-Advisor to the Fund under the Current Sub-Advisory Agreement. |
· | The Board considered the Sub-Advisor’s statement that since the Sub-Advisor’s inception as sub-advisor, assets in the Fund have not grown considerably, so further economies of scale have not been achieved. The Board did not review the profitability of the Sub-Advisor with respect to the Fund. The Board noted that the Advisor pays the Sub-Advisor for the Fund from its advisory fee and its understanding that the Fund’s sub-advisory fee rate was the product of an arm’s length negotiation. The Board considered indirect benefits that may be realized by the Sub-Advisor from its relationship with the Fund, including that the Sub-Advisor enters into soft-dollar arrangements in connection with the Fund, and considered a summary of such arrangements. The Board concluded that the character and amount of potential indirect benefits to the Sub-Advisor were not unreasonable. |
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Based on all of the information considered and the conclusions reached, including the information considered and conclusions reached in connection with the June 2021 renewal of the Current Sub-Advisory Agreement, the Board, including the Independent Trustees, unanimously determined that the terms of the Agreements were fair and reasonable and that the approval of the Agreements is in the best interests of the Fund. No single factor was determinative in the Board’s analysis.
Shareholder Approval and Required Vote
To become effective, the New Sub-Advisory Agreement must be approved by a vote of a majority of the outstanding voting securities of the Fund. The “vote of a majority of the outstanding voting securities” of the Fund is defined in the 1940 Act as the vote of the lesser of (i) 67% or more of the voting securities of the Fund present and entitled to vote at the Meeting if the holders of more than 50% of the outstanding voting securities of the Fund are present in person or represented by proxy; or (ii) more than 50% of the outstanding voting securities of the Fund. All voting securities of the Fund represented by properly submitted proxies will be requiredcounted as present for purposes of determining a quorum. For purposes of determining the approval of the New Sub-Advisory Agreement, abstentions will have the effect of a vote against the Proposal. It is expected that broker-dealer firms holding shares of the Fund in “street name” for the benefit of their customers will request the instructions of such customers before the Meeting on how to electvote their shares on the specified nominees asProposal. Under applicable rules of the Class II Trustees of that Fund
provided a quorum is present. Abstentions and brokerNew York Stock Exchange, broker-dealer firms are not permitted to vote on the Proposal with respect to shares for which no instructions have been received from customers. Broker non-votes (i.e., Sharesare 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)matter. Broker non-votes typically occur when both routine and non-routine proposals are being considered at a meeting. Because the Proposal is a “non-routine” matter for which a broker or nominee does not have discretionary voting power under applicable rules of the New York Stock Exchange, the Fund does not expect there to be any broker non-votes at the Meeting.
If you need any assistance or have any questions regarding the Proposal or how to vote your shares, please call the Fund’s proxy solicitor, AST Fund Solutions, LLC, at (888) 567-1626 weekdays from 9:00 a.m. to 10:00 p.m. Eastern Time.
The Board of Trustees recommends that shareholders of the Fund
vote to approve the New Sub-Advisory Agreement.
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Additional Information
General Information—Solicitation of Proxies
This Proxy Statement is being furnished in connection with the solicitation of proxies by the Board. The solicitation of proxies will have no effect onbe largely by mail, but may include telephonic, electronic or oral communications by officers and service providers of the Fund, as well as affiliates of such service providers. A proxy solicitation firm, AST Fund Solutions, LLC, has also been engaged to provide proxy solicitation and tabulation services for the Fund, as well as certain related services, at an expected total cost of approximately $62,600. 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 of proxies to be voted at the Meeting, will be borne by Chartwell. Chartwell will also reimburse brokerage firms and others for their expenses in forwarding proxy solicitation materials to the person(s) for whom they hold shares of the Fund. Chartwell will bear the foregoing costs and expenses regardless of whether the Closing occurs or shareholder approval of the proposal.
IfNew Sub-Advisory Agreement is obtained.
The Meeting and Voting Rights
The Meeting is scheduled to be held on Monday, June 13, 2022, at 12:00 noon Central Time at the offices of First Trust Advisors L.P., located at 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187. You may vote in any one of four ways:
· | by mail, by sending the enclosed proxy card, signed and dated, in the enclosed postage-paid envelope; |
· | by phone, by following the instructions set forth on your proxy card; |
· | via the Internet, by following the instructions set forth on your proxy card; or |
· | in person, by attending the Meeting. Please note that shareholders who intend to attend the Meeting will need to provide valid identification and, if they hold shares through a bank, broker or other nominee, satisfactory proof of ownership of shares, such as a voting instruction form (or a copy thereof) or a letter from their bank, broker or other nominee or broker’s statement indicating ownership as of the Record Date (as defined below), to be admitted to the Meeting. 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. |
Broker-dealer firms holding shares in “street name” for the benefit of their customers and clients may request voting instructions from such customers and clients. You are encouraged to contact your broker-dealer and record your voting instructions.
The close of business on March 14, 2022 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 and any adjournments or postponements thereof. To the extent they are entitled to exercise voting rights with respect to shares owned, 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. The Fund’s By-Laws include provisions (referred to as the “Control Share Provisions”) pursuant to which, in summary, a shareholder who obtains beneficial ownership of the Fund’s shares in a “Control Share Acquisition” (as defined in the By-Laws) may exercise voting rights with respect to such shares only to the extent the authorization of such voting rights is approved by other shareholders of the Fund. Subject to various exceptions and conditions, the By-Laws define a “Control Share Acquisition” generally to include an acquisition of shares that, but for the Control Share Provisions, would give the beneficial owner upon the acquisition of such shares the ability to exercise voting power within certain ranges of percentages in the election of Trustees of the Fund. Based on available information as of the date of this Proxy Statement, the Fund expects that all shares of the Fund outstanding as of the Record Date will be entitled to vote on the Proposal and deemed to be voting securities for purposes of determining whether the Proposal is approved, and no shares of the Fund will be subject to the Control Share Provisions.
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A list of shareholders of record of the Fund entitled to notice of and to be present and to vote at the Meeting will be available at the offices of the Advisor, 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, for inspection by any shareholder of the Fund during regular business hours beginning on the second business day after notice is given of the Meeting, subject to restrictions that may be imposed on a requesting shareholder on the copying, use or distribution of the information contained in the list. Shareholders will need to provide advance written notice to the Fund to inspect the list of shareholders and will also need to show valid identification and proof of share ownership to be admitted to the Meeting or to inspect the list of shareholders.
Use and Revocation of Proxies
For shareholders voting by mail, if the enclosed proxy card is properly executed and returned in time to be voted at the Meeting, the Sharesshares represented thereby will be voted in accordance with the instructions marked thereon, or, if no instructions are marked thereon, will be voted inat the discretion of the persons named on the proxy card. Accordingly, unless instructions to the contrary are marked thereon, a properly executed and returned proxy will be voted FOR the election of each specified
nominee as a Class II TrusteeProposal, 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 (i) attending the Meeting and voting his or her Sharesor its shares in person, or byperson; (ii) timely submitting a letterrevocation of revocationa prior proxy to (a) the Fund’s Secretary, W. Scott Jardine, at 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187 or a
later-dated proxy(b) if his, her or its shares are held in “street name,” to the applicable broker-dealer; or (iii) timely submitting a later-dated proxy.
Quorum Requirements, Postponements and Adjournments
Under the Fund’s By-Laws, the holders of shares representing thirty-three and a third percent (33⅓%) of the outstanding shares of the 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 Advisor's Austin, Texas offices located at 500 W. 5th
Street, Austin, Texas 78701, for inspection by any shareholder during regular
business hours prior to the Meeting. Shareholders will need to show valid
identification and proof of Share ownership to be admitted to the Meeting or to
inspect the list of shareholders.
Under the By-Laws of each Fund, a quorum is constituted by the presencepresent in person or by proxy, will be necessary to constitute a quorum for the transaction of business by the holders of thirty-three and one-third percent
(33-1/3%) ofFund. Under the voting power of the outstanding Shares entitled to vote on a
matter. For theFund’s By-Laws, in general, for purposes of establishing whether a quorum is present with
respect toat a Fund,meeting of shareholders, all Sharesshares present in person or by properly submitted proxy and entitled to vote, including abstentions and broker non-votes, shallare counted. Broker non-votes are 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. Broker non-votes typically occur when both routine and non-routine proposals are being considered at a meeting. Because the Proposal is a “non-routine” matter for which a broker or nominee does not have discretionary voting power under applicable rules of the New York Stock Exchange, the Fund does not expect there to be counted. Any meeting of shareholdersany broker non-votes at the Meeting.
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The Meeting may be postponed prior to the meetingMeeting with notice to the shareholders entitled to vote at that meeting. Any meeting of shareholdersthe Meeting. In addition, the Meeting may, by action of the chairmanchair of the meeting,Meeting, be adjourned from time 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, whether or not a quorum is present with respect to such matter. In addition,present. Further, upon motion of the chairmanchair of the meeting,Meeting, the question of adjournment may be submitted to a vote of the shareholders, and in that case, any adjournment with respect to one or more matters must be approved by the vote of holders of a majority of the Sharesshares present and entitled to vote with respect to the matter or matters adjourned, and without further notice if the
time and place of the adjourned meeting are announced at the meeting.notice. Unless a proxy is otherwise limited in this regard, any Sharesshares present and entitled to vote at a meeting, including broker non-votes,the Meeting may, at the discretion of the proxies named therein, be voted in favor of such an adjournment.
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OUTSTANDING SHARES
On the Record Date, each Fund had the following number of adjournment or adjournments.
Shares outstanding:
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TICKER SHARES
FUND SYMBOL(1) OUTSTANDING
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND MFD 8,537,266
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FIRST TRUST ENERGY INCOME AND GROWTH FUND FEN 19,786,706
--------------------------------------------------------------------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND FFA 19,973,164
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND FAM 12,950,337
--------------------------------------------------------------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II FHY 6,970,226
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND FEO 5,167,040
--------------------------------------------------------------------------------
FIRST TRUST SPECIALTY FINANCE AND
FINANCIAL OPPORTUNITIES FUND FGB 14,344,765
--------------------------------------------------------------------------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND FSD 29,947,157
--------------------------------------------------------------------------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND FIF 17,550,236
--------------------------------------------------------------------------------
FIRST TRUST MLP AND ENERGY INCOME FUND FEI 46,779,490
--------------------------------------------------------------------------------
FIRST TRUST INTERMEDIATE DURATION
PREFERRED & INCOME FUND FPF 60,765,997
--------------------------------------------------------------------------------
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND FPL 25,211,278
--------------------------------------------------------------------------------
FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND FDEU 17,231,908
--------------------------------------------------------------------------------
1 The Shares of eachOutstanding; Share Ownership Over 5%
As of the Funds are listed on the New York Stock Exchange
("NYSE") except for the Sharesclose of First Trust Energy Income and Growth
Fund, which are listed on the NYSE American, LLC.
Shareholders of recordbusiness 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 knowledgethere were 19,977,449 shares outstanding of the Board of Trustees of each Fund, asFund.
As of the Record Date, no single shareholderperson is known by the Fund to have owned beneficially or "group" (as that term is used in Section 13(d) of the Securities Exchange Act of 1934 (the "1934 Act")) beneficially ownedrecord more than 5% of the Fund'sshares outstanding Shares,of the Fund except as describedset forth in the following
table.chart below. A control person is one who owns, either directly or indirectly,shareholder owning beneficially more than 25% of the Fund’s voting securities of a Fund or otherwise acknowledges the
existence of control. A party that controls a Fund may be abledeemed to significantly
affect“control” (as defined in the outcome1940 Act) the Fund. The vote of any itemsuch person could have a more significant effect on matters presented to shareholders for approval.at a shareholders’ meeting than votes of other shareholders. Information as to beneficial ownership of Shares, including percentage of
outstanding Shares beneficially owned, is based on (1) securities position listing reports as of the Record Date and (2) reports filed with the Securities and Exchange
Commission ("SEC")SEC by shareholders.shareholders on the date indicated in such filings. The Funds doFund does not have any knowledge of the
identity ofwho the ultimate beneficiaries are of the Shares listed below.
-4-
BENEFICIAL OWNERSHIP OF SHARES
Fund’s shares outstanding.
Name and Address | Shares Owned | % |
Wells Fargo Clearing Services, LLC 2801 Market Street St. Louis, MO 63103 | 3,580,897 Shares | 17.92% |
Raymond James & 880 Carillon Parkway St. Petersburg, FL 33716 | 3,486,400 Shares | 17.45% |
Morgan Stanley Smith Barney LLC (“MSSB”)* 1300 Thames Street, 6th Floor Baltimore, MD 21231 | 2,710,008 Shares* | 13.57%* |
National Financial Services LLC 499 Washington Jersey City, NJ 07310 | 1,366,297 Shares | 6.84% |
RBC Capital Markets, LLC 60 S. 6th Street – P09 Minneapolis, MN 55402 | 1,189,493 Shares | 5.95% |
Charles Schwab & Co., Inc. Phoenix, AZ 85016 | 1,107,978 Shares | 5.55% |
*Information is according tobased on a securities position listing report as of the Record Date. In addition, on February 9, 2022, Morgan Stanley and MSSB, 1585 Broadway, New York, NY 10036, jointly filed Amendment No. 15 to Schedule 13G filed with the SECSEC. In such filing, Morgan Stanley and MSSB each reported: (i) beneficial ownership of 1,379,870 shares, representing 6.9% of outstanding shares; (ii) sole voting power, shared voting power and sole dispositive power of 0 shares; and (iii) shared dispositive power of 1,379,870 shares. Further, based on February 14, 2018.
2 Information is accordingsuch filing, the securities being reported on by Morgan Stanley as a parent holding company are owned, or may be deemed to Schedule 13G filed with the SEC on February 1,
2018.
-6-
-----------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS SHARES BENEFICIALLY % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
-----------------------------------------------------------------------------------------------------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II:
-----------------------------------------------------------------------------------------------------------------------
National Financial Services, LLC 1,294,265 Shares 18.57%
499 Washington Blvd.
Jersey City, NJ 07310
-----------------------------------------------------------------------------------------------------------------------
Wells Fargo Clearing Services, LLC
2801 Market Street 854,042 Shares 12.25%
St. Louis, MO 63103
-----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Smith Barney LLC 656,657 Shares 9.42%
1300 Thames Street
Baltimore, MD 21231
-----------------------------------------------------------------------------------------------------------------------
Pershing LLC
One Pershing Plaza 637,221 Shares 9.14%
Jersey City, NJ 07399
-----------------------------------------------------------------------------------------------------------------------
TD Ameritrade Clearing, Inc. 557,544 Shares 8.00%
200 S. 108th Ave.
Omaha, NE 68154
-----------------------------------------------------------------------------------------------------------------------
Charles Schwab & Co., Inc.
2423 E. Lincoln Drive 526,658 Shares 7.56%
Phoenix, AZ 85016
-----------------------------------------------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND:
-----------------------------------------------------------------------------------------------------------------------
Wells Fargo Clearing Services, LLC 1,106,853 Shares 21.42%
2801 Market Street
St. Louis, MO 63103
-----------------------------------------------------------------------------------------------------------------------
Lazard Asset Management LLC(1)
30 Rockefeller Plaza 653,864 Shares 12.41%
New York, NY 10112
-----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Smith Barney LLC
1300 Thames Street 491,730 Shares 9.52%
Baltimore, MD 21231
-----------------------------------------------------------------------------------------------------------------------
National Financial Services
499 Washington Blvd. 352,453 Shares 6.82%
Jersey City, NJ 07310
-----------------------------------------------------------------------------------------------------------------------
The Northern Trust Company
801 S. Canal Street 345,588 Shares 6.69%
Chicago, IL 60607
-----------------------------------------------------------------------------------------------------------------------
Merrill Lynch, Pierce Fenner & Smith Incorporated
4804 Deer Lake Drive E. 318,897 Shares 6.17%
Jacksonville, FL 32246
-----------------------------------------------------------------------------------------------------------------------
Charles Schwab & Co., Inc.
2423 E. Lincoln Drive 266,077 Shares 5.15%
Phoenix, AZ 85016
-----------------------------------------------------------------------------------------------------------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND:
-----------------------------------------------------------------------------------------------------------------------
Wells Fargo Clearing Services, LLC 3,795,925 Shares 26.46%
2801 Market Street
St. Louis, MO 63103
-----------------------------------------------------------------------------------------------------------------------
National Financial Services, LLC 1,992,853 Shares 13.89%
499 Washington Blvd.
Jersey City, NJ 07310
-----------------------------------------------------------------------------------------------------------------------
Stifel, Nicolaus & Company, Incorporated
200 Regency Forest Drive 1,380,167 Shares 9.62%
Cary, NC 27518
-----------------------------------------------------------------------------------------------------------------------
Pershing LLC 979,883 Shares 6.83%
One Pershing Plaza
Jersey City, NJ 07399
-----------------------------------------------------------------------------------------------------------------------
1 Information is according to Schedule 13G/A filed with the SEC on February
8, 2018.
-7-
-----------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS SHARES BENEFICIALLY % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
-----------------------------------------------------------------------------------------------------------------------
Raymond James & Associates, Inc.
880 Carillon Parkway 972,831 Shares 6.78%
St. Petersburg, FL 33716
-----------------------------------------------------------------------------------------------------------------------
Nova R. Wealth, Inc.(1)
6711 West 121st Street 784,883.56 Shares 5.50%
Overland Park, KS 66209
-----------------------------------------------------------------------------------------------------------------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND:
-----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Smith Barney LLC 11,708,523 Shares 39.10%
1300 Thames Street
Baltimore, MD 21231
-----------------------------------------------------------------------------------------------------------------------
Wells Fargo Clearing Services, LLC
2801 Market Street 3,786,201 Shares 12.64%
St. Louis, MO 63103
-----------------------------------------------------------------------------------------------------------------------
Raymond James & Associates, Inc.
880 Carillon Parkway 1,686,480 Shares 5.63%
St. Petersburg, FL 33716
-----------------------------------------------------------------------------------------------------------------------
Merrill Lynch, Pierce Fenner & Smith Incorporated
4804 Deer Lake Drive E. 1,669,288 Shares 5.57%
Jacksonville, FL 32246
-----------------------------------------------------------------------------------------------------------------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND:
-----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Smith Barney LLC 4,663,929 Shares 26.57%
1300 Thames Street
Baltimore, MD 21231
-----------------------------------------------------------------------------------------------------------------------
Wells Fargo Clearing Services, LLC
2801 Market Street 2,462,925 Shares 14.03%
St. Louis, MO 63103
-----------------------------------------------------------------------------------------------------------------------
The Bank of New York Mellon
525 William Penn Place 1,219,641 Shares 6.95%
Pittsburgh, PA 15259
-----------------------------------------------------------------------------------------------------------------------
RBC Capital Markets LLC 1,105,716 Shares 6.30%
60 S. 6th Street - P09
Minneapolis, MN 55402
-----------------------------------------------------------------------------------------------------------------------
Merrill Lynch, Pierce Fenner & Smith Incorporated 1,079,596 Shares 6.15%
4804 Deer Lake Drive E.
Jacksonville, FL 32246
-----------------------------------------------------------------------------------------------------------------------
National Financial Services, LLC
499 Washington Blvd. 1,041,432 Shares 5.93%
Jersey City, NJ 07310
-----------------------------------------------------------------------------------------------------------------------
FIRST TRUST MLP AND ENERGY INCOME FUND:
-----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Smith Barney LLC 20,512,290 Shares 43.85%
1300 Thames Street
Baltimore, MD 21231
-----------------------------------------------------------------------------------------------------------------------
RBC Capital Markets LLC
60 S. 6th Street - P09 2,705,392 Shares 5.78%
Minneapolis, MN 55402
-----------------------------------------------------------------------------------------------------------------------
National Financial Services, LLC
499 Washington Blvd. 2,612,063 Shares 5.58%
Jersey City, NJ 07310
-----------------------------------------------------------------------------------------------------------------------
Wells Fargo Clearing Services, LLC
2801 Market Street 2,566,242 Shares 5.49%
St. Louis, MO 63103
-----------------------------------------------------------------------------------------------------------------------
1 Information is according to Schedule 13G filed with the SEC on
February 6, 2018.
-8-
-----------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS SHARES BENEFICIALLY % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
-----------------------------------------------------------------------------------------------------------------------
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND:
-----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Smith Barney LLC 22,679,993 Shares 37.32%
1300 Thames Street
Baltimore, MD 21231
-----------------------------------------------------------------------------------------------------------------------
Wells Fargo Clearing Services, LLC
2801 Market Street 5,647,576 Shares 9.29%
St. Louis, MO 63103
-----------------------------------------------------------------------------------------------------------------------
Merrill Lynch, Pierce Fenner & Smith Incorporated
4804 Deer Lake Drive E. 3,837,669 Shares 6.32%
Jacksonville, FL 32246
-----------------------------------------------------------------------------------------------------------------------
RBC Capital Markets LLC
60 S. 6th Street - P09 3,824,479 Shares 6.29%
Minneapolis, MN 55402
-----------------------------------------------------------------------------------------------------------------------
Pershing LLC
One Pershing Plaza 3,703,163 Shares 6.09%
Jersey City, NJ 07399
-----------------------------------------------------------------------------------------------------------------------
National Financial Services, LLC
499 Washington Blvd. 3,568,349 Shares 5.87%
Jersey City, NJ 07310
-----------------------------------------------------------------------------------------------------------------------
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND:
-----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Smith Barney LLC 9,589,357 Shares 38.04%
1300 Thames Street
Baltimore, MD 21231
-----------------------------------------------------------------------------------------------------------------------
American Enterprise Investment Services Inc.
682 AMP Financial Center 2,034,712 Shares 8.07%
Minneapolis, MN 55474
-----------------------------------------------------------------------------------------------------------------------
Wells Fargo Clearing Services, LLC
2801 Market Street 2,034,516 Shares 8.07%
St. Louis, MO 63103
-----------------------------------------------------------------------------------------------------------------------
National Financial Services, LLC
499 Washington Blvd. 1,701,875 Shares 6.75%
Jersey City, NJ 07310
-----------------------------------------------------------------------------------------------------------------------
The Bank of New York Mellon
525 William Penn Place 1,294,651 Shares 5.14%
Pittsburgh, PA 15259
-----------------------------------------------------------------------------------------------------------------------
FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND:
-----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Smith Barney LLC 3,842,884 Shares 22.30%
1300 Thames Street
Baltimore, MD 21231
-----------------------------------------------------------------------------------------------------------------------
Wells Fargo Clearing Services, LLC
2801 Market Street 3,268,046 Shares 18.97%
St. Louis, MO 63103
-----------------------------------------------------------------------------------------------------------------------
UBS Financial Services Inc.
1000 Harbor Blvd. 1,962,919 Shares 11.39%
Weehawken, NJ 07086
-----------------------------------------------------------------------------------------------------------------------
Raymond James & Associates, Inc.
880 Carillon Parkway 1,348,180 Shares 7.82%
St. Petersburg, FL 33716
-----------------------------------------------------------------------------------------------------------------------
RBC Capital Markets LLC
60 S. 6th Street - P09 977,773 Shares 5.67%
Minneapolis, MN 55402
-----------------------------------------------------------------------------------------------------------------------
Merrill Lynch, Pierce Fenner & Smith Incorporated
4804 Deer Lake Drive E. 869,378 Shares 5.05%
Jacksonville, FL 32246
-----------------------------------------------------------------------------------------------------------------------
-9-
PROPOSAL: ELECTION OF TWO (2) CLASS II TRUSTEES OF EACH FUND
TWO (2) CLASS II TRUSTEES ARE TO BE ELECTED TO THE BOARD OF EACH FUND BY HOLDERS
OF SHARES OF SUCH FUND. CURRENT TRUSTEES RICHARD E. ERICKSON AND THOMAS R.
KADLEC ARE THE NOMINEES FOR ELECTION AS THE CLASS II TRUSTEES BY SHAREHOLDERS OF
EACH FUND FOR A THREE-YEAR TERM.
Each Fund has establishedbe beneficially owned, by MSSB, a staggered Boardwholly-owned subsidiary of Morgan Stanley.
-15-
Share Ownership 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. Richard E. Erickson and Thomas R.
Kadlec are currently the Class II TrusteesExecutive Officers
The number of each 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 each Fund's 2021 annual meeting of shareholders. James A. Bowen,
Niel B. Nielson and Robert F. Keith are current and continuing Trustees. Mr.
Bowen and Mr. Nielson are Class III Trustees for a term expiring at each Fund's
2019 annual meeting of shareholders. Mr. Keith is the Class I Trustee for a term
expiring at each 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: For each Fund, the nominees for election as the Class II
Trustees must be elected by the affirmative vote of the holders of a plurality
of the Sharesshares of the Fund cast in person orbeneficially owned as of December 31, 2021 by proxy at the Meeting and
entitled to vote thereon, provided a quorum is present. Abstentions and broker
non-votes will have no effect on the approval of the proposal. Proxies cannot be
voted for a greater number of persons than the number of seats open for
election.
Unless you give contrary instructions on your proxy card, your Shares will
be voted FOR the election of each nominee listed if your proxy card has been
properly executed and timely received by the applicable Fund. If either 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 a Fund's Board of Trustees in accordance with the Fund's
procedures.
THE BOARD OF TRUSTEES OF EACH FUND UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE ELECTION OF EACH NOMINEE.
-10-
MANAGEMENT
MANAGEMENT OF THE FUNDS
The general supervision of the duties performed for each Fund under its
respective investment management agreement with the Advisor is the
responsibility of that Fund's Board of Trustees. The Trustees set broad policies
for the Funds and choose the Funds' officers. The following is a list of(a) the Trustees and executive officers of each Fund and a statement of their present
positions and principal occupations during(including the past five years, the number of
portfolios each Trustee overseesIndependent Trustees and the other trusteeships or directorships
each Trustee holds, if applicable. As noted above, each 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 Funds
serve indefinite terms. James A. Bowen is deemed an "interested person" (as that
term is defined in the Investment Company Act of 1940, as amended ("1940 Act"))
("Interested Trustee") of the Funds due to his position as Chief Executive
Officer of the Advisor. Except for Mr. Bowen, each Trusteewho is not an "interested
person" (as that term is defined in the 1940 Act)Independent Trustee (the “Interested Trustee”)) and is therefore referred to
as an "Independent Trustee."
The remainder of this page is intentionally left blank.
-11-
The following tables identify(b) the Trustees and executive officers of the Funds. Unless otherwise indicated, the address of all personsFund as a group, is c/o First Trust
Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton, IL 60187.
set forth below.
Name | Number of Shares |
Interested Trustee | |
James A. Bowen | 4,003 |
Independent Trustees | |
Richard E. Erickson | 513 |
Thomas R. Kadlec | 978 |
Denise M. Keefe* | 0 |
Robert F. Keith | 0 |
Niel B. Nielson | 708 |
Trustees and | 6,202 |
*Denise 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 2012, 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. 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. 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.
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.
UNITARY BOARD LEADERSHIP STRUCTURE
The same five persons serve as Trustees on each 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 First Trust Intermediate Duration Preferred &
-13-
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.
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 Funds' business. The BoardKeefe has determined that
its leadership structure, including the unitary board and committee structure,
is appropriate based on the characteristics of the funds it serves and the
characteristics of the First Trust Fund Complex as a whole. The Board is
composed of four Independent Trustees and one Interested Trustee. The Interested
Trustee serves as the Chairman of the Board of each Fund. An individual who is
not a Trustee serves as President and Chief Executive Officer of each Fund.
In order to streamline communication between the Advisor and the
Independent Trustees and create certain efficiencies, the Board has a Lead
Independent Trustee who is responsible for: (i) coordinating activities of the
Independent Trustees; (ii) working with the Advisor, Fund counsel and the
independent legal counsel to the Independent Trustees to determine the agenda
for Board meetings; (iii) serving as the principal contact for and facilitating
communication between the Independent Trustees and the Funds' service providers,
particularly the Advisor; and (iv) any other duties that the Independent
Trustees may delegate to the Lead Independent Trustee. The Lead Independent
Trustee is selected by the Independent Trustees and serves a three-year term or
until his successor is selected. Richard 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 Funds'
activities, review contractual arrangements with and performance of service
providers, oversee compliance with regulatory requirements, and review Fund
performance. The Independent Trustees are represented by independent legal
counsel at all Board and committee meetings (other than meetings of the
Executive Committee). Generally, the Board acts by majority vote of all the
Trustees, except where a different vote is required by applicable law.
The three Committee Chairmen and the Lead Independent Trustee currently
rotate every 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.
Including the Funds, the First Trust Fund Complex includes: 16 closed-end
funds advised by First Trust Advisors; First Trust Series Fund, an open-end
management investment company with four portfolios advised by First Trust
Advisors; First Trust Variable Insurance Trust, an open-end management
investment company with three 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
-14-
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, exchange-traded funds with, in the aggregate, 130 portfolios (each such
portfolio, an "ETF" and each such exchange-traded fund, an "ETF Trust") 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 each 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. Bowen and Dr. Erickson are members of the Executive Committee. The
number of meetings of the Executive Committee held for each Fund during its last
fiscal 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 of that Fund. Messrs.
Erickson, Kadlec, Keith and Nielson are members of the Nominating and Governance
Committee, and each isbeen an Independent Trustee who is also an "independent
director" within the meaning of the listing rules of the 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 Funds' website at
https://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 120 East
Liberty Drive, Suite 400, Wheaton, Illinois 60187. Such recommendation shall
include the following information: (i) evidence of Fund ownership of the person
or entity recommending the candidate (if a Fund shareholder); (ii) a full
description of the proposed candidate's background, including their education,
experience, current employment and date of birth; (iii) names and addresses of
at least three professional references for the candidate; (iv) information as to
whether the candidate is an "interested person" in relation to the Fund, as such
term is defined in the 1940 Act, and such other information that may be
considered to impair the candidate's independence; and (v) any other information
that may be helpful to the Committee in evaluating the candidate (see also
"ADDITIONAL INFORMATION - SHAREHOLDER PROPOSALS" below). If a recommendation is
received with satisfactorily completed information regarding a candidate during
a time when a vacancy exists on the Board or during such other time as the
Nominating and Governance Committee is accepting recommendations, the
recommendation will be forwarded to the Chairman of the Nominating and
Governance Committee and the counsel to the Independent Trustees.
Recommendations received at any other time will be kept on file until such time
-15-
as the Nominating and Governance Committee is accepting recommendations, at
which point they may be considered for nomination. In connection with the
evaluation of candidates, the review process may include, without limitation,
personal interviews, background checks, written submissions by the candidates
and third party references. Under no circumstances shall the Nominating and
Governance Committee evaluate nominees recommended by a shareholder of a Fund on
a basis substantially different than that used for other nominees for the same
election or appointment of Trustees. The number of meetings of the Nominating
and Governance Committee held for each Fund during its last fiscal year is shown
on Schedulesince November 1, hereto.
The Valuation Committee of each Fund is responsible for the oversight of
the valuation procedures of that Fund (the "Valuation Procedures"), for
determining the fair value of that 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 that Fund. Messrs.
Erickson, Kadlec, Keith and Nielson are members of the Valuation Committee. The
number of meetings of the Valuation Committee held for each Fund during its last
fiscal year is shown on Schedule 1 hereto.
The Audit Committee of each Fund is responsible for overseeing that 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 rules of the 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 for each Fund during its last fiscal year is shown in
Schedule 1 hereto.
In carrying out its responsibilities, as described below under
"INDEPENDENT AUDITORS' FEES--Pre-Approval," the Audit Committee pre-approves all
audit services and permitted non-audit services for each Fund (including the
fees and terms thereof) and non-audit services to be performed for the Advisor
by Deloitte & Touche LLP ("Deloitte & Touche"), the Funds' independent
registered public accounting firm ("independent auditors"), if the engagement
relates directly to the operations and financial reporting of the Funds.
RISK OVERSIGHT
As part of the general oversight of each Fund, the Board is involved in
the risk oversight of the Funds. The Board has adopted and periodically reviews
policies and procedures designed to address the Funds' risks. Oversight of
investment and compliance risk, including oversight of sub-advisors, is
performed primarily at the Board level in conjunction with the Advisor's
advisory oversight group and the Funds' Chief Compliance Officer ("CCO").
Oversight of other risks also occurs at the Committee level. The Advisor's
advisory oversight group reports to the Board at quarterly meetings regarding,
among other things, Fund performance and the various drivers of such performance
as well as information related to sub-advisors and their operations and
processes. The Board reviews reports on the Funds' and the service providers'
compliance policies and procedures at each quarterly Board meeting and receives
an annual report from the CCO regarding the operations of the Funds' and the
service providers' compliance program. In addition, the Independent Trustees
meet privately each quarter with the CCO. The Audit Committee reviews with the
Advisor the Funds' major financial risk exposures and the steps the Advisor has
-16-
taken to monitor and control these exposures, including the Funds' risk
assessment and risk management policies and guidelines. The Audit Committee
also, as appropriate, reviews in a general manner the processes other Board
committees have in place with respect to risk assessment and risk management.
The Nominating and Governance Committee monitors all matters related to the
corporate governance of the Funds. The Valuation Committee monitors valuation
risk and compliance with the Funds' Valuation Procedures and oversees the
pricing services and actions by the Advisor's Pricing Committee with respect to
the valuation of portfolio securities.
Not all risks that may affect the Funds can be identified nor can controls
be developed to eliminate or mitigate their occurrence or effects. It may not be
practical or cost-effective to eliminate or mitigate certain risks, the
processes and controls employed to address certain risks may be limited in their
effectiveness, and some risks are simply beyond the reasonable control of the
Funds or the Advisor or other service providers. For instance, as the use of
Internet technology has become more prevalent, the Funds and their service
providers have become more susceptible to potential operational risks through
breaches in cyber security (generally, intentional and unintentional events that
may cause a 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 Funds, their service providers,
or issuers of the securities in which the Funds invest to reduce cyber security
risks will succeed, and the Funds cannot control such systems put in place by
service providers, issuers or other third parties whose operations may affect
the Funds and/or their shareholders. Moreover, it is necessary to bear certain
risks (such as investment related risks) to achieve a Fund's goals. As a result
of the foregoing and other factors, the Funds' ability to manage risk is subject
to substantial limitations.
BOARD DIVERSIFICATION AND TRUSTEE QUALIFICATIONS
As described above, the Nominating and Governance Committee of the Board
oversees matters related to the nomination of Trustees. The Nominating and
Governance Committee seeks to establish an effective Board with an appropriate
range of skills and diversity, including, as appropriate, differences in
background, professional experience, education, vocations, and other individual
characteristics and traits in the aggregate. Each Trustee must meet certain
basic requirements, including relevant skills and experience, time availability,
and if qualifying as an Independent Trustee, independence from the Advisor,
sub-advisors, underwriters or other service providers, including any affiliates
of these entities.
Listed below for each nominee and each continuing Trustee are the
experiences, qualifications and attributes that led to the conclusion, as of the
date of this Joint Proxy Statement, that each nominee and each continuing
Trustee should serve as a trustee.
NOMINEES
Independent Trustees
Richard E. Erickson, M.D., is an orthopedic surgeon. He also has been
President of Wheaton Orthopedics, a co-owner and director of a fitness center
and a limited partner of two real estate companies. Dr. Erickson has served as a
Trustee of each Fund since its inception and of the First Trust 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 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 Lead Independent Trustee
-17-
and on the Executive Committee and the Dividend and Pricing Committee (since
January 1, 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
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 each Fund since its
inception. Mr. Kadlec also served on the Executive Committee from the
organization of the first First Trust Closed-end Fund in 2003 until he was
elected as the first Lead Independent Trustee in December 2005, serving as such
through 2007 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 Chairman 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.
CONTINUING TRUSTEES
Independent Trustees
Robert F. Keith is President of Hibs Enterprises, a financial and
management consulting firm. Mr. Keith has been with Hibs Enterprises since 2003.
Prior thereto, Mr. Keith spent 18 years with ServiceMaster and Aramark,
including three years as President and COO of ServiceMaster Consumer Services,
where he led the initial expansion of certain products overseas, five years as
President and COO of ServiceMaster Management Services Company, and two years as
President of Aramark ServiceMaster Management Services. Mr. Keith is a certified
public accountant and also has held the positions of Treasurer and Chief
Financial Officer of ServiceMaster, at which time he oversaw the financial
aspects of ServiceMaster's expansion of its Management Services division into
Europe, the Middle East and Asia. Mr. Keith has served as a Trustee of the First
Trust Funds since June 2006. Mr. Keith has also served as Chairman of the Audit
Committee (2008 - 2009), 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 Audit Committee
(since January 1, 2017) of the First Trust Funds.
Niel B. Nielson, Ph.D., has been the Managing Director and Chief Operating
Officer of Pelita Harapan Educational Foundation, a global provider of
educational products and 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 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
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
-18-
director of CRT Europe, Inc. for two years, directing out of London all aspects
of business conducted by the U.K. and European subsidiary of CRT. Prior to that,
Mr. Nielson was a trader and manager at CRT in Chicago. Mr. Nielson has served
as a Trustee of each Fund since its inception and of the First Trust Funds since
1999. Mr. Nielson has also served as Chairman of the Audit Committee (2003 -
2007 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) of the
First Trust Funds. He currently serves as Chairman of the Nominating and
Governance Committee (since January 1, 2017) of the First Trust Funds.
Interested Trustee
James A. Bowen is the Chairman of the Board 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 First Trust Funds. Mr. Bowen also serves on the Executive Committee. He has
over 34 years of experience in the investment company business in sales, sales
management and executive management. Mr. Bowen has served as a Trustee of each
Fund since its inception and of the First Trust Funds since 1999.
OTHER INFORMATION
Independent Trustees
During the past five years, none of the Independent Trustees, nor any of
their immediate family members, has been a director, trustee, officer, general
partner or employee of, or consultant to, First Trust Advisors, First Trust
Portfolios L.P. (an affiliate of First Trust Advisors), any sub-advisor to any
fund in the First Trust Fund Complex, or any of their affiliates.
Executive Officers
The executive officers of each Fund hold the same positions with each fund
in the First Trust Fund Complex (representing 153 portfolios) as they hold with
the Funds.
-19-
BENEFICIAL OWNERSHIP OF SHARES HELD IN THE FUNDS BY TRUSTEES
AND EXECUTIVE OFFICERS
The following table sets forth the dollar range and number of equity
securities beneficially owned by the Trustees in each Fund and the dollar range
of equity securities beneficially owned by the Trustees in all funds in the
First Trust Fund Complex, including the Funds, as of December 31, 2017:
------------------------- ---------------- ----------------------------------------------------------------------------
INTERESTED INDEPENDENT
TRUSTEE TRUSTEES
------------------------- ---------------- ----------------------------------------------------------------------------
FUND James A. Bowen Richard E. Erickson Thomas R. Kadlec Robert F. Keith Niel B.Nielson
------------------------- ---------------- --------------------- ------------------ ----------------- -----------------
MACQUARIE/FIRST TRUST $0 $10,001-$50,000 $1-$10,000 $10,001-$50,000 $10,001-$50,000
GLOBAL INFRASTRUCTURE/ (0 Shares) (988 Shares) (800 Shares) (2,198 Shares) (1,402 Shares)
UTILITIES DIVIDEND &
INCOME FUND
------------------------- ---------------- --------------------- ------------------ ----------------- -----------------
FIRST TRUST ENERGY $0 $10,001-$50,000 $10,001-$50,000 $0 $10,001-$50,000
INCOME AND GROWTH FUND (0 Shares) (524 Shares) (700 Shares) (0 Shares) (644 Shares)
------------------------- ---------------- --------------------- ------------------ ----------------- -----------------
FIRST TRUST ENHANCED $50,001-$100,000 $1-$10,000 $10,001-$50,000 $0 $1-$10,000
EQUITY INCOME FUND (4,003 Shares) (427 Shares) (850 Shares) (0 Shares) (540 Shares)
------------------------- ---------------- --------------------- ------------------ ----------------- -----------------
FIRST TRUST/ABERDEEN $0 $10,001-$50,000 $1-$10,000 $0 $10,001-$50,000
GLOBAL OPPORTUNITY (0 Shares) (1,836 Shares) (850 Shares) (0 Shares) (1,080 Shares)
INCOME FUND
------------------------- ---------------- --------------------- ------------------ ----------------- -----------------
FIRST TRUST STRATEGIC $10,001-$50,000 $0 $0 $0 $1-$10,000
HIGH INCOME FUND II (1,498 Shares) (0 Shares) (0 Shares) (0 Shares) (335 Shares)
------------------------- ---------------- --------------------- ------------------ ----------------- -----------------
FIRST TRUST/ABERDEEN $0 $0 $10,001-$50,000 $1-$10,000 $1-$10,000
EMERGING OPPORTUNITY (0 Shares) (0 Shares) (1,000 Shares) (600 Shares) (454 Shares)
FUND
------------------------- ---------------- --------------------- ------------------ ----------------- -----------------
FIRST TRUST SPECIALTY $0 $0 $0 $0 $0
FINANCE AND FINANCIAL (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
OPPORTUNITIES FUND
------------------------- ---------------- --------------------- ------------------ ----------------- -----------------
FIRST TRUST HIGH INCOME Over $100,000 $0 $10,001-$50,000 $0 $0
LONG/SHORT FUND (7,025 Shares) (0 Shares) (1,000 Shares) (0 Shares) (0 Shares)
------------------------- ---------------- --------------------- ------------------ ----------------- -----------------
FIRST TRUST ENERGY $0 $0 $0 $0 $0
INFRASTRUCTURE FUND (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
------------------------- ---------------- --------------------- ------------------ ----------------- -----------------
FIRST TRUST MLP AND $0 $0 $0 $0 $0
ENERGY INCOME FUND (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
------------------------- ---------------- --------------------- ------------------ ----------------- -----------------
FIRST TRUST $0 $0 $10,001-$50,000 $10,001-$50,000 $0
INTERMEDIATE DURATION (0 Shares) (0 Shares) (1,000 Shares) (512 Shares) (0 Shares)
PREFERRED & INCOME FUND
------------------------- ---------------- --------------------- ------------------ ----------------- -----------------
FIRST TRUST NEW $0 $0 $0 $0 $0
OPPORTUNITIES MLP & (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
ENERGY FUND
------------------------- ---------------- --------------------- ------------------ ----------------- -----------------
FIRST TRUST DYNAMIC $0 $0 $0 $0 $0
EUROPE EQUITY INCOME (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
FUND
------------------------- ---------------- --------------------- ------------------ ----------------- -----------------
AGGREGATE DOLLAR RANGE 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 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 Fund Complex he oversees in the aggregate of at least
one year's annual retainer for Board service, with investments allocated among
the funds in the First Trust Fund Complex depending on what is suitable for the
Trustee's personal investment needs.
-20-
As of December 31, 2017,2021, (a) the Independent Trustees and their immediate
family members did not own, beneficially or of record, any class of securities
of First Trust Advisors or any sub-advisor or principal underwriter of any Fund
or any person, other than a registered investment company, directly or
indirectly controlling, controlled by, or under common control with First Trust
Advisors or any sub-advisor or principal underwriter of any Fund, nor, since the
beginning of the most recently completed fiscal year of any Fund, did any
Independent Trustee purchase or sell securities of First Trust Advisors, or any
sub-advisor to any fund in the First Trust Fund Complex, their parents or any
subsidiaries of any of the foregoing.
As of December 31, 2017,(b) the Trustees and executive officers of eachthe Fund as a group, beneficially owned the following number of Shares of each Fund, which
is less than 1% of each Fund's Shares outstanding:
---------------------------------------------------------- --------------------
FUND SHARES OWNED
---------------------------------------------------------- --------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND 5,388
---------------------------------------------------------- --------------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND 1,868
---------------------------------------------------------- --------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND 5,820
---------------------------------------------------------- --------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND 3,766
---------------------------------------------------------- --------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II 2,188
---------------------------------------------------------- --------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND 2,054
---------------------------------------------------------- --------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL
OPPORTUNITIES FUND 0
---------------------------------------------------------- --------------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND 12,725
---------------------------------------------------------- --------------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND 0
---------------------------------------------------------- --------------------
FIRST TRUST MLP AND ENERGY INCOME FUND 0
---------------------------------------------------------- --------------------
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND 1,512
---------------------------------------------------------- --------------------
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND 0
---------------------------------------------------------- --------------------
FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND 0
---------------------------------------------------------- --------------------
COMPENSATION
Since January 1, 2016, the fixed annual retainer paid to the Independent
Trustees has been $230,000 per year and an annual per fund fee of $2,500 for
each closed-end fund and actively managed fund and $250 for each index fund. The
fixed annual retainer is allocated equally among each fund in the First Trust
Fund Complex. Additionally, the Lead Independent Trustee is paid $30,000
annually, the Chairmentotal shares outstanding of the Audit Committee or Valuation Committee are each
paid $20,000 annually and the Chairman of the Nominating and Governance
Committee is paid $10,000 annually to serve in such capacities with compensation
allocated pro rata among each fund in the First Trust 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 by each Fund during its last fiscal year
is shown in Schedule 1 hereto.
-21-
The aggregate fees and expenses paid to all Trustees by each Fund for its
last fiscal year (including reimbursement for travel and out-of-pocket expenses)
amounted to the following:
---------------------------------------------------------- --------------------
AGGREGATE FEES AND
FUND EXPENSES PAID
---------------------------------------------------------- --------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND $16,724
---------------------------------------------------------- --------------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND $17,312
---------------------------------------------------------- --------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND $16,854
---------------------------------------------------------- --------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND $16,661
---------------------------------------------------------- --------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II $16,729
---------------------------------------------------------- --------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND $16,515
---------------------------------------------------------- --------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL
OPPORTUNITIES FUND $16,702
---------------------------------------------------------- --------------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND $17,509
---------------------------------------------------------- --------------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND $17,082
---------------------------------------------------------- --------------------
FIRST TRUST MLP AND ENERGY INCOME FUND $17,646
---------------------------------------------------------- --------------------
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND $18,859
---------------------------------------------------------- --------------------
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND $17,039
---------------------------------------------------------- --------------------
FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND $16,863
---------------------------------------------------------- --------------------
The following table sets forth certain information regarding the
compensation of each Fund's Trustees (including reimbursement for travel and
out-of-pocket expenses) for each Fund's most recently completed fiscal year. The
Funds have no retirement or pension plans. The executive officers and the
Interested Trustee of each Fund receive no compensation from the Funds for
serving in such capacities.
-22-
AGGREGATE COMPENSATION FOR EACH FUND'S FISCAL YEAR
------------------------------------------------------ -------------- -----------------------------------------------------------
INTERESTED INDEPENDENT
TRUSTEE TRUSTEES
------------------------------------------------------ -------------- -----------------------------------------------------------
James A. Richard E. Thomas R. Robert F. Niel B.
FUND Bowen Erickson Kadlec Keith Nielson
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES $0 $4,192 $4,187 $4,181 $4,164
DIVIDEND & INCOME FUND(1)
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND(1) $0 $4,374 $4,353 $4,326 $4,258
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
FIRST TRUST ENHANCED EQUITY INCOME FUND(2) $0 $4,275 $4,213 $4,212 $4,154
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY
INCOME FUND(2) $0 $4,201 $4,165 $4,165 $4,130
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II(3) $0 $4,193 $4,188 $4,182 $4,165
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND(2) $0 $4,147 $4,129 $4,128 $4,112
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL $0 $4,185 $4,181 $4,175 $4,161
OPPORTUNITIES FUND(1)
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND(3) $0 $4,433 $4,410 $4,375 $4,290
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND(1) $0 $4,303 $4,288 $4,269 $4,222
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
FIRST TRUST MLP AND ENERGY INCOME FUND(3) $0 $4,477 $4,448 $4,409 $4,312
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
FIRST TRUST INTERMEDIATE DURATION PREFERRED & $0 $4,860 $4,788 $4,710 $4,502
INCOME FUND(3)
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND(3) $0 $4,290 $4,275 $4,259 $4,214
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND(2) $0 $4,278 $4,215 $4,215 $4,155
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
TOTAL COMPENSATION FOR SERVING THE FIRST TRUST $0 $414,011 $403,267 $403,163 $392,987
FUND COMPLEX(4)
------------------------------------------------------ -------------- -------------- -------------- -------------- --------------
1 For fiscal year ended November 30, 2017.
2 For fiscal year ended December 31, 2017.
3 For fiscal year ended October 31, 2017.
4 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.
-23-
ATTENDANCE AT ANNUAL MEETINGS OF SHAREHOLDERS
The Board 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 Funds' Nominating and Governance Committee Charter, which is
available on each Fund's website located at https://www.ftportfolios.com (go to
News & Literature on the applicable Fund's webpage). In addition, the Board's
attendance at last year's annual shareholder meeting is available on each Fund's
website located at https://www.ftportfolios.com. To find the Board's attendance,
select your Fund under the "Closed-End Funds" tab, select the "News &
Literature" link, and go to the "Shareholder Updates and Information" heading.
AUDIT COMMITTEE REPORT
The role of the Audit Committee is to assist the Board of Trustees in its
oversight of the Funds' accounting and financial reporting process. The Audit
Committee operates pursuant to a charter (the "Charter") that was most recently
reviewed by the Board of Trustees on December 11, 2017, a copy of which is
attached as Exhibit A hereto, and is available on the Fund's website located at
https://www.ftportfolios.com (go to News & Literature on the Fund's webpage). As
set forth in the Charter, management of the Funds has the primary responsibility
for establishing and maintaining systems for accounting, reporting, disclosure
and internal controls. The Funds' independent auditors have the primary
responsibility to plan and implement an audit, with proper consideration given
to the accounting, reporting and internal controls.
In performing its oversight function, the Audit Committee reviewed and
discussed with management and the independent auditors, Deloitte & Touche LLP,
the audited financial statements of the First Trust Strategic High Income Fund
II, the First Trust High Income Long/Short Fund, the First Trust MLP and Energy
Income Fund, the First Trust Intermediate Duration Preferred & Income Fund and
the First Trust New Opportunities MLP & Energy Fund for the fiscal year ended
October 31, 2017 at a meeting held on December 20, 2017; the Macquarie/First
Trust Global Infrastructure/Utilities Dividend & Income Fund, the First Trust
Energy Income and Growth Fund, the First Trust Specialty Finance and Financial
Opportunities Fund and the First Trust Energy Infrastructure Fund for the fiscal
year ended November 30, 2017 at a meeting held on January 18, 2018; and the
First Trust Enhanced Equity Income Fund, the First Trust/Aberdeen Global
Opportunity Income Fund, the First Trust/Aberdeen Emerging Opportunity Fund and
the First Trust Dynamic Europe Equity Income Fund for the fiscal year ended
December 31, 2017 at a meeting held on February 20, 2018, and discussed the
audits of such financial statements with the independent auditors and
management.
In addition, the Audit Committee discussed with the independent auditors
the accounting principles applied by the Funds and such other matters brought to
the attention of the Audit Committee by the independent auditors as required by
the Public Company Accounting Oversight Board ("PCAOB") Auditing Standard 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
Funds, and discussed the impact that any such relationships may have on the
objectivity and independence of the independent auditors.
The members of the Funds' Audit Committee are not full-time employees of
the Funds and are not performing the functions of auditors or accountants. As
such, it is not the duty or responsibility of the Audit Committee or its members
-24-
to conduct "field work" or other types of auditing or accounting reviews or
procedures or to set auditor independence standards. Members of the Funds' Audit
Committee necessarily rely on the information provided to them by Fund
management and the independent auditors. Accordingly, the Audit Committee's
considerations and discussions referred to above do not assure that the audit of
the Funds' financial statements has been carried out in accordance with
generally accepted auditing standards, that the financial statements are
presented in accordance with generally accepted accounting principles or that
the independent auditors are in fact "independent."
Based on its consideration of the Funds' audited financial statements and
the discussions referred to above with Fund management and Deloitte & Touche
LLP, and subject to the limitations on the responsibilities and role of the
Audit Committee as set forth in the Charter and discussed above, the Audit
Committee recommended to the Board the inclusion of each Fund's audited
financial statements in each Fund's Annual Report to Shareholders for the years
ended October 31, November 30 and December 31, 2017, respectively.
Submitted by the Audit Committee of the Funds:
Robert F. Keith
Richard E. Erickson
Niel B. Nielson
Thomas R. Kadlec
INDEPENDENT AUDITORS' FEES
Deloitte & Touche has been selected to serve as the independent auditors
for each Fund for its current fiscal year, and acted as the independent auditors
for each Fund for its most recently completed fiscal year. Deloitte & Touche has
advised the Funds that, to the best of its knowledge and belief, Deloitte &
Touche professionals did not have any direct or material indirect ownership
interest in the Funds inconsistent with independent professional standards
pertaining to independent registered public accounting firms. Representatives of
Deloitte & Touche are not expected to be present at the Meeting, but will have
the opportunity to make a statement if they desire to do so and will be
available should any matter arise requiring their presence. In reliance on Rule
32a-4 under the 1940 Act, each Fund is not seeking shareholder ratification of
the selection of Deloitte & Touche as independent auditors.
-25-
Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees
During each of the last two fiscal years of the Funds, Deloitte & Touche
has billed each Fund and the Advisor for the fees set forth below. With respect
to First Trust Intermediate Duration Preferred & Income Fund, fees billed for
services to Stonebridge Advisors LLC ("Stonebridge"), such Fund's sub-advisor,
are also listed below; an affiliate of the Advisor owns a majority interest in
Stonebridge.
--------------------------------- --------------------- ------------------- ---------------------- --------------------
AUDIT FEES(1) AUDIT-RELATED TAX ALL OTHER
FEES FEES(4) FEES
--------------------------------- --------------------- ------------------- ---------------------- --------------------
FEES BILLED TO: 2016 2017 2016 2017 2016 2017 2016 2017
--------------------------------- ---------- ---------- ---------- -------- ---------- ----------- ---------- ---------
MACQUARIE/FIRST TRUST GLOBAL
INFRASTRUCTURE/ UTILITIES
DIVIDEND & INCOME FUND(5)
Fund $49,000 $49,000 $91.91(2) $0 $5,200 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
--------------------------------- ---------- ---------- ---------- -------- ---------- ----------- ---------- ---------
FIRST TRUST ENERGY INCOME AND
GROWTH FUND(5)
Fund $57,000 $89,000 $91.91(2) $0 $42,000 $42,000 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
--------------------------------- ---------- ---------- ---------- -------- ---------- ----------- ---------- ---------
FIRST TRUST ENHANCED EQUITY
INCOME FUND(6)
Fund $38,000 $38,000 $91.91(2) $0 $5,200 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
--------------------------------- ---------- ---------- ---------- -------- ---------- ----------- ---------- ---------
FIRST TRUST/ABERDEEN GLOBAL
OPPORTUNITY INCOME FUND(6)
Fund $53,000 $53,000 $91.91(2) $0 $5,200 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
--------------------------------- ---------- ---------- ---------- -------- ---------- ----------- ---------- ---------
FIRST TRUST STRATEGIC HIGH
INCOME FUND II(7)
Fund $65,000 $60,000 $3,000(3) $0 $5,200 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
--------------------------------- ---------- ---------- ---------- -------- ---------- ----------- ---------- ---------
FIRST TRUST/ABERDEEN EMERGING
OPPORTUNITY FUND(6)
Fund $53,000 $53,000 $91.91(2) $0 $9,335 $11,770 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
--------------------------------- ---------- ---------- ---------- -------- ---------- ----------- ---------- ---------
FIRST TRUST SPECIALTY FINANCE
AND FINANCIAL OPPORTUNITIES
FUND(5)
Fund $42,000 $42,000 $91.91(2) $0 $5,200 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
--------------------------------- ---------- ---------- ---------- -------- ---------- ----------- ---------- ---------
FIRST TRUST HIGH INCOME
LONG/SHORT FUND(7)
Fund $52,000 $52,000 $3,000(3) $0 $5,200 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
--------------------------------- ---------- ---------- ---------- -------- ---------- ----------- ---------- ---------
FIRST TRUST ENERGY
INFRASTRUCTURE FUND(5)
Fund $44,000 $44,000 $91.91(2) $0 $6,300 $6,300 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
--------------------------------- ---------- ---------- ---------- -------- ---------- ----------- ---------- ---------
FIRST TRUST MLP AND ENERGY
INCOME FUND(7)
Fund $57,000 $89,000 $3,000(3) $0 $42,000 $42,000 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
--------------------------------- ---------- ---------- ---------- -------- ---------- ----------- ---------- ---------
FIRST TRUST INTERMEDIATE
DURATION PREFERRED & INCOME
FUND(7)
Fund $28,000 $28,000 $0 $0 $5,200 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
Sub-Advisor N/A N/A $0 $0 $0 $0 $0 $0
--------------------------------- ---------- ---------- ---------- -------- ---------- ----------- ---------- ---------
-26-
--------------------------------- --------------------- ------------------- ---------------------- --------------------
AUDIT FEES(1) AUDIT-RELATED TAX ALL OTHER
FEES FEES(4) FEES
--------------------------------- --------------------- ------------------- ---------------------- --------------------
FEES BILLED TO: 2016 2017 2016 2017 2016 2017 2016 2017
--------------------------------- ---------- ---------- ---------- -------- ---------- ----------- ---------- ---------
FIRST TRUST NEW
OPPORTUNITIES MLP & ENERGY
FUND(7)
Fund $88,500 $89,000 $3,000(3) $0 $42,000 $42,000 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
--------------------------------- ---------- ---------- ---------- -------- ---------- ----------- ---------- ---------
FIRST TRUST DYNAMIC EUROPE
EQUITY INCOME FUND(6)
Fund $39,500 $39,500 $91.91(2) $0 $5,200 $5,200 $0 $0
Advisor N/A N/A $0 $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. For 2016, a portion of the amount shown for First Trust New
Opportunities MLP & Energy Fund included fees attributable to a shelf
offering. For 2017, a portion of the amounts shown for First Trust Energy
Income and Growth Fund, First Trust MLP and Energy Income Fund and First
Trust New Opportunities MLP & Energy Fund included fees attributable to a
shelf offering.
2 These fees relate to the review of pricing committee procedures.
3 These fees relate to a 2015 Fund accounting system conversion.
4 These fees were for tax consultation or tax return preparation.
5 These fees were for the fiscal years ended November 30.
6 These fees were for the fiscal years ended December 31.
7 These fees were for the fiscal years ended October 31.
Non-Audit Fees
During each of the last two fiscal years of the Funds, Deloitte & Touche
has billed each Fund and the Advisor for the non-audit fees listed below for
services provided to the entities indicated. With respect to First Trust
Intermediate Duration Preferred & Income Fund, non-audit fees billed for
services provided to Stonebridge, such Fund's sub-advisor, are also listed
below; an affiliate of the Advisor owns a majority interest in Stonebridge.
AGGREGATE NON-AUDIT FEES
------------------------------------------------------------------- -------------------- -------------------
FUND 2016 2017
------------------------------------------------------------------- -------------------- -------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND(1)
Fund $5,200 $5,200
Advisor $13,000(4) $44,000(5)
------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND(1)
Fund $42,000 $42,000
Advisor $13,000(4) $44,000(5)
------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND(2)
Fund $5,200 $5,200
Advisor $13,000(4) $44,000(5)
------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND(2)
Fund $5,200 $5,200
Advisor $13,000(4) $44,000(5)
------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II(3)
Fund $5,200 $5,200
Advisor $13,000(4) $44,000(5)
------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND(2)
Fund $9,335 $11,770
Advisor $13,000(4) $44,000(5)
------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND(1)
Fund $5,200 $5,200
Advisor $13,000(4) $44,000(5)
------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND(3)
Fund $5,200 $5,200
Advisor $13,000(4) $44,000(5)
------------------------------------------------------------------- -------------------- -------------------
-27-
------------------------------------------------------------------- -------------------- -------------------
FUND 2016 2017
------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND(1)
Fund $6,300 $6,300
Advisor $13,000(4) $44,000(5)
------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST MLP AND ENERGY INCOME FUND(3)
Fund $42,000 $42,000
Advisor $13,000(4) $44,000(5)
------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND(3)
Fund $5,200 $5,200
Advisor $13,000(4) $44,000(5)
Sub-Advisor $3,000(4) $3,000(5)
------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND(3)
Fund $42,000 $42,000
Advisor $13,000(4) $44,000(5)
------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND(2)
Fund $5,200 $5,200
Advisor $13,000(4) $44,000(5)
------------------------------------------------------------------- -------------------- -------------------
1 These fees were for the fiscal years ended November 30.
2 These fees were for the fiscal years ended December 31.
3 These fees were for the fiscal years ended October 31.
4 These fees relate to 2015 federal and state tax matters.
5 These fees relate to 2016 federal and state tax matters, tax compliance
and Foreign Account Tax Compliance Act (FATCA).
Pre-Approval
Pursuant to its Charter and its Audit and Non-Audit Services Pre-Approval
Policy, the Audit Committee of each Fund is responsible for the pre-approval of
all audit services and permitted non-audit services (including the fees and
terms thereof) to be performed for each Fund by its independent auditors. The
Chairman of the Audit Committee is authorized to give such pre-approvals on
behalf of the Audit Committee up to $25,000 and report any such pre-approval to
the full Audit Committee.
The Audit Committee is also responsible for the pre-approval of the
independent auditors' engagements for non-audit services with theFund.
Investment Advisor and any entity controlling, controlled by or under common control with the Advisor
that provides ongoing services to the respective Fund, if the engagement relates
directly to the operations and financial reporting of the Funds, subject to the
de minimis exceptions for non-audit services described in Rule 2-01 of
Regulation S-X. If the independent auditors have provided non-audit services to
the Advisor or any entity controlling, controlled by or under common control
with the Advisor that provides ongoing services to the respective Fund that were
not pre-approved pursuant to its policies, the Audit Committee will consider
whether the provision of such non-audit services is compatible with the
auditors' independence.
None of the Audit Fees, Audit-Related Fees, Tax Fees, or AllCertain Other Fees,
if any, or the Aggregate Non-Audit Fees disclosed above that were required to be
pre-approved by the Audit Committee pursuant to its Pre-Approval Policy were
pre-approved by the Audit Committee pursuant to the pre-approval exceptions
included in Regulation S-X.
Because the Audit Committee has not been informed of any such services,
the Audit Committee of each Fund has not considered whether the provision of
non-audit services that were rendered to the Advisor and any entity controlling,
controlled by, or under common control with the Advisor that provides ongoing
services to the respective Fund that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the
principal accountant's independence.
-28-
ADDITIONAL INFORMATION
SHAREHOLDER PROPOSALS
Shareholder Proposals for Inclusion in a Fund's Proxy Statement. To be
considered for presentation at the 2019 annual meeting of shareholders of a 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 not later than November 15, 2018. Such a proposal will be
included in the Fund's proxy statement if it meets the requirements of Rule
14a-8. Timely submission of a proposal does not mean that such proposal will be
included in a Fund's proxy statement.
Other Shareholder Proposals. In addition to any requirements of law,
including the proxy 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 a Fund if timely written notice (the "Shareholder Notice") is
provided to the Secretary of the Fund and the other conditions summarized below
are met. In accordance with the advance notice provisions included in the Funds'
By-Laws, unless a greater or lesser period is required under applicable law, to
be timely, the Shareholder Notice must be delivered to or mailed and received at
the Fund's 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.
Any shareholder submitting a nomination of any person or persons (as the
case may be) for election as a Trustee or Trustees of a Fund is required to
deliver, as part of such Shareholder Notice: (i) a statement in writing setting
forth: (A) the name, age, date of birth, business address, residence address and
nationality of the person or persons to be nominated; (B) the class or series
and number of all Shares of the Fund owned of record or beneficially by each
such person or persons, as reported to such shareholder by such nominee(s); (C)
any other information regarding each such person required by paragraphs (a),
(d), (e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of
Rule 14a-101 (Schedule 14A) under the 1934 Act (or any successor provision
thereto); (D) any other information regarding the person or persons to be
nominated that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitation of proxies for
election of trustees or directors pursuant to Section 14 of the 1934 Act and the
rules and regulations promulgated thereunder; and (E) whether such shareholder
believes any nominee is or will be an "interested person" of the Fund (as
defined in the 1940 Act) and, if not an "interested person," information
regarding each nominee that will be sufficient for the Fund to make such
determination; and (ii) the written and signed consent of any person nominated
to be named as a nominee and to serve as a Trustee if elected. In addition, the
Trustees may require any proposed nominee to furnish such other information as
they may reasonably require or deem necessary to determine the eligibility of
such proposed nominee to serve as a Trustee.
Without limiting the foregoing, any shareholder who gives a Shareholder
Notice of any matter proposed to be brought before a shareholder meeting
(whether or not involving nominees for Trustees) is required to deliver, as part
-29-
of such Shareholder Notice: (i) the description of and text of the proposal to
be presented; (ii) a brief written statement of the reasons why such shareholder
favors the proposal; (iii) such shareholder's name and address as they appear on
the Fund's books; (iv) any other information relating to the shareholder that
would be required to be disclosed in a proxy statement or other filings required
to be made in connection with the solicitation of proxies with respect to the
matter(s) proposed pursuant to Section 14 of the 1934 Act and the rules and
regulations promulgated thereunder; (v) the class or series and number of all
Shares of the Fund owned beneficially and of record by such shareholder; (vi)
any material interest of such shareholder in the matter proposed (other than as
a shareholder); (vii) a representation that the shareholder intends to appear in
person or by proxy at the shareholder meeting to act on the matter(s) proposed;
(viii) if the proposal involves nominee(s) for Trustees, a description of all
arrangements or understandings between the shareholder and each proposed nominee
and any other person or persons (including their names) pursuant to which the
nomination(s) are to be made by the shareholder; and (ix) in the case of a
shareholder (a "Beneficial Owner") that holds Shares entitled to vote at the
meeting through a nominee or "street name" holder of record, evidence
establishing such Beneficial Owner's indirect ownership of, and entitlement to
vote, Shares at the meeting of shareholders. Shares "beneficially owned" means
all Shares which such person is deemed to beneficially own pursuant to Rules
13d-3 and 13d-5 under the 1934 Act.
In addition, the By-Laws provide that, unless required by federal law, no
matters shall be considered at or brought before any annual or special meeting
unless such matter has been deemed a proper matter for shareholder action by at
least sixty-six and two-thirds percent (66-2/3%) of the Trustees. Timely
submission of a proposal does not mean that such proposal will be brought before
the meeting.
SHAREHOLDER COMMUNICATIONS
Shareholders of a Fund who want to communicate with the Board of Trustees
or any individual Trustee should write the Fund to the attention of the Fund
Secretary, W. Scott Jardine. The letter should indicate that you are a Fund
shareholder. If the communication is intended for a specific Trustee and so
indicates, it will be sent only to that Trustee. If a communication does not
indicate a specific Trustee, it will be sent to the Chairman of the Nominating
and Governance Committee of the Board and the independent legal counsel to the
Independent Trustees for further distribution as deemed appropriate by such
persons.
INVESTMENT ADVISOR, SUB-ADVISORS, ADMINISTRATORS AND TRANSFER AGENTS
Service Providers
First Trust Advisors L.P. (previously defined as “First Trust”), 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, serves as each Fund'sthe Fund’s investment advisor. Additionally, First Trust Advisors
is also responsible for providing certain clerical, bookkeeping and other administrative services to eachthe Fund and also provides fund reporting services to eachthe Fund for a flat annual fee. Four Corners Capital Management, LLC, 2005
Market Street, Philadelphia, Pennsylvania 19103, and Macquarie Capital
Investment Management LLC, 125 West 55th Street, New York, New York 10019, serve
as the investment sub-advisors to Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund. Energy Incomeis an Illinois limited partnership with one limited partner, Grace Partners LLC, 10
Wright Street, Westport, Connecticut 06880, serves asof DuPage L.P. (“Grace Partners”), and one general partner, The Charger Corporation. Grace Partners is a limited partnership with one general partner, The Charger Corporation, and a number of limited partners. The Charger Corporation is an Illinois corporation controlled by James A. Bowen, the investment sub-advisor
toChief Executive Officer of First Trust, Energy Incomethe Chairman of the Board of the Fund and Growth Fund,the sole Interested Trustee. Mr. Bowen holds his interest in The Charger Corporation through a limited liability company of which he is the sole member. First Trust, Energy Infrastructure
Fund,Grace Partners and The Charger Corporation are each located at 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187. In light of his interest in and role with First Trust, MLP and Energy Income Fund andgiven that First Trust is a party to the New Opportunities
MLP & Energy Fund. An affiliate ofSub-Advisory Agreement and the Advisor ownsRelated Agreement, Mr. Bowen may be deemed to have an interest in Energy Income
Partners, LLC. Chartwell Investment Partners, Inc., 1205 Westlakes Drive,
Berwyn, Pennsylvania 19312, serves as the investment sub-advisor to First Trust
Enhanced Equity Income Fund. Aberdeen Asset Management Inc., 1735 Market Street,
32nd Floor, Philadelphia, Pennsylvania 19103, serves as the investment
-30-
sub-advisor to First Trust/Aberdeen Global Opportunity Income Fund and First
Trust/Aberdeen Emerging Opportunity Fund. Brookfield Investment Management Inc.,
250 Vesey Street, 15th Floor, New York, New York 10281, serves as the investment
sub-advisor to First Trust Strategic High Income Fund II. Confluence Investment
Management LLC, 20 Allen Avenue, Suite 300, St. Louis, Missouri 63119, serves as
the investment sub-advisor to First Trust Specialty Finance and Financial
Opportunities Fund. MacKay Shields LLC, 1345 Avenue of the Americas, 43rd Floor,
New York, New York 10105, serves as the investment sub-advisor to First Trust
High Income Long/Short Fund. Stonebridge Advisors LLC, 10 Westport Road, Suite
C101, Wilton, Connecticut 06897, serves as the investment sub-advisor to First
Trust Intermediate Duration Preferred & Income Fund. An affiliate of the Advisor
owns a majority interest in Stonebridge Advisors LLC. Henderson Global Investors
(North America) Inc., 311 S. Wacker Drive, Suite 6000, Chicago, Illinois 60606,
serves as the investment sub-advisor to First Trust Dynamic Europe Equity Income
Fund.
Proposal. The Bank of New York Mellon, 101 Barclay240 Greenwich 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 transfer agent, to each Fund except for First Trust
Intermediate Duration Preferred & Income Fund and First Trust Dynamic Europe
Equity Income Fund. Brown Brothers Harriman & Co., 50 Post Office Square,
Boston, Massachusetts 02110, acts as theFund’s administrator, fund accountant and custodian, and Computershare, Inc., P.O. Box 505000, Louisville, Kentucky 40233-5000, acts as the Fund’s transfer agent, to First Trust Intermediate Duration
Preferred & Income Fund and First Trust Dynamic Europe Equity Income Fund.
SECTION 30(h) AND SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 30(h)agent.
Delivery of the 1940 Act and Section 16(a) of the 1934 Act require
the Funds' Trustees, the Funds' 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 a Fund's Shares to file reports of
ownership and changes of ownership with the SEC and to furnish the Funds with
copies of all Section 16(a) forms they file. Based solely upon a review of
copies of such forms received by the Funds and certain written representations,
the Funds believe that during the fiscal years ended October 31, 2017, November
30, 2017 and December 31, 2017, all such filing requirements applicable to such
persons were met, except as follows:
--------------------------- --------------------------------------------------
First Trust Dynamic o On July 24, 2017, (a) one late Form 5 was filed
Europe Equity Income Fund for Charles S. Thompson, an officer of
Henderson Global Investors (North America) Inc.
(investment sub-advisor) and (b) one late Form 5
was filed for Yinka Osindero, an officer of
Henderson Investment Management Limited (former
investment sub-sub-advisor).
o On August 4, 2017, one late Form 3 was filed
for Donald P. Swade, an officer of the Fund.
--------------------------- --------------------------------------------------
FISCAL YEAR
Certain Documents
The fiscal year end for First Trust Strategic High Income Fund II, First
Trust High Income Long/Short Fund, First Trust MLP and Energy Income Fund, First
Trust Intermediate Duration Preferred & Income Fund and First Trust New
Opportunities MLP & Energy Fund was October 31, 2017. The fiscal year end for
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund,
First Trust Energy Income and Growth Fund, First Trust Specialty Finance and
Financial Opportunities Fund and First Trust Energy Infrastructure Fund was
November 30, 2017. The fiscal year end for First Trust Enhanced Equity Income
-31-
Fund, First Trust/Aberdeen Global Opportunity Income Fund, First Trust/Aberdeen
Emerging Opportunity Fund and First Trust Dynamic Europe Equity Income Fund was
December 31, 2017.
DELIVERY OF CERTAIN DOCUMENTS
Annual reports will be sent to shareholders of record of each Fund
following the Fund's fiscal year end. Each Fund will furnish, without charge, a copy of its annual report and/or semi-annual report as available upon request. Such written or oral requests should be made by writing to the AdvisorFund at 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187 or by calling toll-free (800) 988-5891.
-16-
Please note that only one annual or semi-annual report or proxy statement may be delivered to two or more shareholders of athe 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 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 AdvisorFund at the address and phone number set forth above. Pursuant to a request, a separate copy will be delivered promptly.
STANDSTILL AGREEMENTS RELATING TO
FIRST TRUST HIGH INCOME LONG/SHORT FUND,
FIRST TRUST STRATEGIC HIGH INCOME FUND II AND FIRST
TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
First Trust High Income Long/Short Fund
First Trust Strategic High Income Fund II
In 2017, each
Submission of First Trust High Income Long/Short Fund ("FSD") andShareholder Proposals
Shareholder Proposals for Inclusion in the Advisor, and First Trust Strategic High Income Fund II ("FHY") andFund’s Proxy Statement. To be considered for presentation at 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 20192023 annual meeting of shareholders of FAMthe Fund and April 30, 2019.
-32-
OTHER MATTERS TO COME BEFORE THE MEETING
included in the Fund’s proxy statement relating to such meeting, a shareholder proposal must be submitted pursuant to Rule 14a-8 (“Rule 14a-8”) under the Securities Exchange Act of 1934 (the “1934 Act”) and must be received at the principal executive offices of the Fund not later than November 21, 2022. However, timely submission of a proposal does not mean that such proposal will be included in the Fund’s proxy statement.
Other Shareholder Proposals. In addition to any requirements under applicable law (including without limitation the proxy rules under the 1934 Act) and the Fund’s Declaration of Trust, under the Fund’s By-Laws, any proposal to elect any person nominated by a shareholder for election as Trustee and any other proposal by a shareholder may only be brought before an annual meeting of the Fund if, among other requirements, the proposing shareholder would be entitled to vote on the proposal and timely written notice (the “Shareholder Notice”) is provided to the Secretary of the Fund. In accordance with the advance notice provisions included in the Fund’s 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 principal executive offices, Attn: W. Scott Jardine, Secretary, not less than one hundred and five (105) days nor more than one hundred and twenty (120) days prior to the first anniversary date of the date the Fund’s proxy statement was released to shareholders for the preceding year’s annual meeting. However, if and only if an 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 not more than one hundred and twenty (120) days prior to such Other Annual Meeting Date and not less than the close of business on the later of (i) the date one hundred and five (105) 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.
In order for a shareholder to properly propose a nominee for election to the Board of Trustees of the Fund or to propose business outside of Rule 14a-8, in addition to complying with the advance notice provisions (described in the preceding paragraph), the shareholder must also comply with all other relevant provisions set forth in the By-Laws. Copies of the By-Laws can be found in the Current Report on Form 8-K filed by the Fund with the SEC on October 20, 2020, which is available at www.sec.gov, and may also be obtained by writing to the Secretary of the Fund at the Fund’s principal executive offices. Any shareholder of the Fund considering making a nomination or submitting any other proposal should carefully review the By-Laws.
In addition, the By-Laws provide that, unless required by applicable law, no matter 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.
-17-
Other Matters to Come Before the Meeting
No business other than the proposal to elect Dr. Erickson and Mr. Kadlec
as the Class II Trustees of each Fund,Proposal, as 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 of the Meeting, the persons named on the enclosed proxy card will vote thereon according to their best judgment in the interests of the Funds.
March 8, 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 ENVELOPE.
-------------------------------------------------------------------------------
-33-
SCHEDULE 1
Fund.
May 6, 2022
It is important that your shares be represented at the Meeting. In order to avoid delay and to ensure that your shares are represented, please vote as promptly as possible. You may vote easily and quickly by mail, telephone or through the internet. You may also vote in person by attending the Meeting. If you need any assistance or have any questions regarding the Proposal or how to vote your shares, please call the Fund’s Proxy Solicitor, AST Fund Solutions, LLC, at (888) 567-1626 weekdays from 9:00 a.m. to 10:00 p.m. Eastern Time. |
-18-
Exhibit A AUDIT COMMITTEE CHARTER
I. PURPOSE
The Audit Committee-- Form of New Sub-Advisory Agreement
Investment Sub-Advisory Agreement
Agreement made as of this ___ day of ____, 2022 by and among First Trust Enhanced Equity Income Fund, a Massachusetts business trust (the "Committee"“Fund”) is appointed by each Board of
Trustees (the "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,, an Illinois limited partnership 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 interfereregistered investment adviser 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 listing rules of the primary 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"(“SEC”) (the “Manager”), and Chartwell Investment Partners, LLC, a Pennsylvania limited liability company and a registered investment adviser with the SEC (the “Sub-Adviser”). Included in
Whereas, the foregoingFund is the requirement that no member of
the Committee be an "interested person" of the Funds within the meaning of
Section 2(a)(19) ofa closed-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"“1940 Act”);
Whereas, nor shall any Committee member accept, directly or
indirectly, any consulting, advisory or other compensatory feethe Fund has retained the Manager to serve as the investment manager for the Fund pursuant to an Investment Management Agreement between the Manager and the Fund (as such agreement may be modified from time to time, the Funds, or any subsidiary thereof, (except in“Management Agreement”);
Whereas, the capacity as a Board or
committee member).
3. At least one memberManagement Agreement provides that the Manager may, subject to the initial and periodic approvals required under Section 15 of the Committee shall have been determined
by the Board, exercising1940 Act, appoint a sub-adviser at 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 American Stock Market or
the NASDAQ Stock Market, each member of the Committee shall be able to
readown cost 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 American 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)expense for the purpose of preparing or issuing an audit report or
performing other audit, review or attestfurnishing certain services required under the Management Agreement;
Whereas, the Fund and the Manager desire to retain the Sub-Adviser to furnish investment advisory services for the Funds ("External
Auditors")Fund’s investment portfolio, upon the terms and conditions hereafter set forth;
Now, Therefore, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:
1. Appointment. The External Auditors shall report directlyFund and the Manager hereby appoint the Sub-Adviser to provide certain sub-investment advisory services to the Committee.
2.Fund for the period and on the terms set forth in this Agreement. The CommitteeSub-Adviser accepts such appointment and agrees to furnish the services herein set forth for the compensation herein provided. The Sub-Adviser shall, meet withfor all purposes herein provided, be deemed an independent contractor and, unless otherwise expressly provided or authorized, shall have no authority to act for nor represent the External Auditors and Fund Management to review the scope, fees, audit plans and staffingor Manager in any way, nor otherwise be deemed an agent of the proposed audits for each fiscal year. AtFund or the conclusionManager.
2. Services to Be Performed. Subject always to the supervision of the audit,Fund’s Board of Trustees and the Committee shall review such audit results, includingManager, the External
Auditors' evaluation of each Fund's financialSub-Adviser will act as sub-adviser for, and internal controls, any
comments or recommendationsmanage on a discretionary basis the investment and reinvestment of the External Auditors, any audit problems
or difficulties and Fund Management's response, including any restrictions
on the scopeassets of the External Auditors' activities or on access to
requested information, any significant disagreements with Fund, Management,
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any accounting adjustments noted or proposed byfurnish an investment program in respect of, make investment decisions for, and place all orders for the auditor but not made
bypurchase and sale of securities for 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-approveFund’s investment portfolio, 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 specifiedFund and as described in the AuditFund’s most recent registration statement on Form N-2 as declared effective by the SEC, and Non-Audit Services Pre-Approval Policy, and shall reportas the same may thereafter be amended from time to time. In the performance of its duties, the Sub-Adviser will in all material respects (a) satisfy any such
pre-approvalapplicable fiduciary duties it may have to the full Committee.
5.Fund, (b) monitor the Fund’s investments, and (c) comply with the provisions of the Fund’s Declaration of Trust and By-laws, as amended from time to time and communicated by the Fund or the Manager to the Sub-Adviser in writing, and the stated investment objectives, policies and restrictions of the Fund as such objectives, policies and restrictions may subsequently be changed by the Fund’s Board of Trustees and communicated by the Fund or the Manager to the Sub-Adviser in writing. The Committee shall pre-approveFund or the External Auditors'
engagements for non-audit services to Fund ManagementManager has provided the Sub-Adviser with current copies of the Fund’s Declaration of Trust, By-laws, prospectus, statement of additional information and any entity
controlling, controlled byamendments thereto, and any objectives, policies or under common control with Fund Management
that provides ongoing serviceslimitations not appearing therein as they may be relevant 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. Sub-Adviser’s performance under this Agreement.
The Chairman of the CommitteeSub-Adviser is authorized to give
such pre-approvals on behalfselect the brokers or dealers that will execute the purchases and sales of portfolio investments for the Fund, and is directed to use its commercially reasonable efforts to obtain best execution, which includes most favorable net results and execution 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,Fund’s orders, taking into account all appropriate factors, including price, dealer spread or commission, size and difficulty of the opinionstransaction and research or other services provided. Subject to approval by the Fund’s Board of managementTrustees and discussing such reportscompliance with the External Auditors. The Committee shall
presentpolicies and procedures adopted by the Board of Trustees for the Fund and to the extent permitted by and in conformance with applicable law (including Rule 17e-1 of the 1940 Act), the Sub-Adviser may select brokers or dealers affiliated with the Sub-Adviser. It is understood that the Sub-Adviser will not be deemed to have acted unlawfully, or to have breached a fiduciary duty to the Fund, or be in breach of any obligation owing to the Fund under this Agreement, or otherwise, solely by reason of its conclusionshaving caused the Fund to pay a member of a securities exchange, a broker or a dealer a commission for effecting a securities transaction for the Fund in excess of the amount of commission another member of an exchange, broker or dealer would have charged if the Sub-Adviser determined in good faith that the commission paid was reasonable in relation to the brokerage or research services provided by such member, broker or dealer, viewed in terms of that particular transaction or the Sub-Adviser’s overall responsibilities with respect to its accounts, including the Fund, as to which it exercises investment discretion.
In addition, the Sub-Adviser may, to the extent permitted by applicable law, aggregate purchase and sale orders of securities placed with respect to the External Auditorsassets of the Fund with similar orders being made simultaneously for other accounts managed by the Sub-Adviser or its affiliates, if in the Sub-Adviser’s reasonable judgment such aggregation shall result in an overall economic benefit to the Board.
8. The Committee shall review reportsFund, taking into consideration the selling or purchase price, brokerage commissions and other information
provided to it byexpenses. In the External Auditors regarding any illegal actsevent that the External Auditors should discover (whethera purchase or not perceived to have a
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material effect on a Fund's financial statements), in accordance with and
as required by Section 10A(b)(1)sale of an asset of the Exchange Act.
9. The Committee shall overseeFund occurs as part of any aggregate sale or purchase orders, the rotationobjective of the lead (or
concurring) audit partner having primary responsibility forSub-Adviser and any of its affiliates involved in such transaction shall be to allocate the auditsecurities so purchased or sold, as well as expenses incurred in the transaction, among the Fund and other accounts in a fair and equitable manner. Nevertheless, the Fund and the audit partner responsible for reviewingManager acknowledge that under some circumstances, such allocation may adversely affect 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 FundsFund with respect to the hiring of employeesprice or former employeessize of the External Auditors who participatedsecurities positions obtainable or salable. Whenever the Fund and one or more other investment advisory clients of the Sub-Adviser have available funds for investment, investments suitable and appropriate for each will be allocated in a manner believed by the Sub-Adviser to be equitable to each, although such allocation may result in a delay in one or more client accounts being fully invested that would not occur if such an allocation were not made. Moreover, it is possible that due to differing investment objectives or for other reasons, the Sub-Adviser and its affiliates may purchase securities of an issuer for one client and at approximately the same time recommend selling or sell the same or similar types of securities for another client.
The Sub-Adviser will not arrange purchases or sales of securities between the Fund and other accounts advised by the Sub-Adviser or its affiliates unless (a) such purchases or sales are in accordance with applicable law (including Rule 17a-7 of the 1940 Act) and the Fund’s policies and procedures, (b) the Sub-Adviser determines the purchase or sale is in the auditsbest interests of the Funds' financial statements.
11. Fund, and (c) the Fund’s Board of Trustees has approved these types of transactions.
The Committee shall take (and, where appropriate, recommendFund may adopt policies and procedures that modify or restrict the Sub-Adviser’s authority regarding the execution of the Fund’s portfolio transactions provided herein. Such policies and procedures and any amendments thereto will be communicated by the Manager to the Sub-Adviser.
The Sub-Adviser will communicate to the officers and Trustees of the Fund such information relating to transactions for the Fund as they may reasonably request. In no instance will the Fund’s portfolio securities be purchased from or sold to the Manager, the Sub-Adviser or any affiliated person of either the Fund, the Manager, or the Sub-Adviser, except as may be permitted under the 1940 Act and under no circumstances will the Sub-Adviser select brokers or dealers for Fund transactions on the basis of Fund share sales by such brokers or dealers.
The Sub-Adviser further agrees that it:
(a) will use the same degree of skill and care in providing such services as it uses in providing services to other fiduciary accounts for which it has investment responsibilities;
(b) will (i) conform in all material respects to all applicable rules and regulations of the SEC, (ii) comply in all material respects with all policies and procedures adopted by the Board take) appropriate actionof Trustees for the Fund and communicated to oversee the independenceSub-Adviser in writing and, (iii) conduct its activities under this Agreement in all material respects in accordance with any applicable law and regulations of any governmental authority pertaining to its investment advisory activities;
(c) will report to the External Auditors.
12. The Committee shall report regularlyManager and to the Board on the resultsof Trustees of the activitiesFund on a quarterly basis and will make appropriate persons available for the purpose of reviewing with representatives of the Committee,Manager and the Board of Trustees on a regular basis at such times as the Manager or the Board of Trustees may reasonably request in writing regarding the management of the Fund, including, any issues that arisewithout limitation, review of the general investment strategies of the Fund, the performance of the Fund’s investment portfolio in relation to relevant standard industry indices and general conditions affecting the marketplace and will provide various other reports from time to time as reasonably requested by the Manager or the Board of Trustees of the Fund; and
(d) will prepare and maintain such books and records with respect to the qualityFund’s securities and other transactions for the Fund’s investment portfolio as required for registered investment advisers under applicable law or integrityas otherwise requested by the Manager and will prepare and furnish the Manager and Fund’s Board of Trustees such periodic and special reports as the Board or the Manager may reasonably request. The Sub-Adviser further agrees that all records that it maintains for the Fund are the property of the Funds' financial statements,Fund and the Funds' compliance with legal or regulatory requirements that relateSub-Adviser will surrender promptly to the Fund's accounting and financial reporting, internal controls and
independent audits,Fund any such records upon the performance and independencerequest of the Funds'
External Auditors,Manager or the Fund (provided, however, that the Sub-Adviser shall be permitted to retain copies thereof); and shall be permitted to retain originals (with copies to the Fund) to the extent required under Rule 204-2 of the Investment Advisers Act of 1940 or other applicable law.
3. Expenses. During the term of this Agreement, the Sub-Adviser will pay all expenses incurred by it in connection with its activities under this Agreement other than (i) the cost of securities and other assets purchased for the Fund, and (ii) the costs directly associated with purchasing and selling securities and other assets for the Fund, if any, including, but not limited to, brokerage commissions, stamps, duties, taxes and custody fees related to transfers.
4. Compensation. For the services provided and the expenses assumed pursuant to this Agreement, the Manager will pay the Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation therefor, a portfolio management fee (the “Management Fee”) equal to the annual rate of 0.50% of the Fund’s Managed Assets (as defined below). For purposes of calculating the Management Fee, Managed Assets means the average daily gross assets of the Fund, minus the sum of the Fund’s accrued and unpaid dividends on any outstanding common shares and accrued liabilities (including the value of call options written (sold)). The Management Fee shall be payable in arrears on or about the first day of each month during the term of this Agreement.
For the month and year in which this Agreement becomes effective or terminates, there shall be an appropriate proration on the basis of the number of days that the Agreement is in effect during the month and year, respectively.
5. Services to Others. The Fund and the Manager acknowledge that the Sub-Adviser now acts, or may in the future act, as an investment adviser to other managed accounts and as investment adviser or investment sub-adviser to one or more other investment companies. In addition, the Fund and the Manager acknowledge that the persons employed by the Sub-Adviser to assist in the Sub-Adviser’s duties under this Agreement will not devote their full time to such efforts. It is also agreed that the Sub-Adviser may use any supplemental research obtained for the benefit of the Fund in providing investment advice to its other investment advisory accounts and for managing its own accounts.
6. Limitation of Liability. The Sub-Adviser shall not be liable for, and the Fund and the Manager will not take any action against the Sub-Adviser to hold the Sub-Adviser liable for, any error of judgment or mistake of law or for any loss suffered by the Fund or the Manager (including, without limitation, by reason of the purchase, sale or retention of any security) in connection with 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 andSub-Adviser’s duties under this Agreement, except for a loss resulting from willful misfeasance, bad faith or gross negligence on the External Auditors the annual audited financial
statementspart 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" 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 entitySub-Adviser in the investment company complex (as defined in
Rule 2-01performance of Regulation S-X) that were not pre-approvedits duties under this Agreement, or 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 operationreason 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.
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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 reviewits reckless disregard 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.
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 and duties under this paragraph, the Committee may, as applicable, review in a
general manner the processes other Board committees have in placeAgreement.
7. Term; Termination. This Agreement shall become effective with respect to risk assessmentthe Fund on the date provided above (the “Effective Date”) provided that it has been approved in the manner required by the 1940 Act, and risk management.
C. With respectshall remain in full force until the two-year anniversary of its Effective Date unless sooner terminated as hereinafter provided. This Agreement, however, shall continue in force from year to servingyear thereafter, but only as a Qualified Legal Compliance Committee:
1. The Committeelong as such continuance is specifically approved for the Fund at least annually in the manner required by the 1940 Act and the rules and regulations thereunder; provided, however, that if the continuation of this Agreement is not approved for the Fund, the Sub-Adviser may continue to serve in such capacity for the Fund in the manner and to the extent permitted by the 1940 Act and the rules and regulations thereunder.
This Agreement shall serve asautomatically terminate in the Funds' "qualified legal
compliance committee" ("QLCC") withinevent of its assignment and may be terminated at any time without the meaningpayment of any penalty by the Manager or the Sub-Adviser upon sixty (60) days’ written notice to the other parties. This Agreement may also be terminated by the Fund by action of the rulesBoard 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.
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(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)Trustees of the Fund or by outside attorneys; and
(3) Retain such additional expert personnel asa vote of a majority of the Committee deems necessary.
(iv) Atoutstanding voting securities of the conclusionFund upon sixty (60) days’ written notice to the Sub-Adviser by the Fund without payment of any such investigation,penalty.
This Agreement may be terminated at any time without the Committee
shall:
(4) Recommend,payment of any penalty 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) andManager, the Board of Trustees of the resultsFund or by vote of any such investigation anda majority of the appropriate
remedial measures to be adopted.
2. The Committee shall take all other action that it deems
appropriateoutstanding voting securities of the Fund in the event that it shall have been established by a court of competent jurisdiction that the Sub-Adviser or any officer or director of the Sub-Adviser has taken any action that results in a breach of the material covenants of the Sub-Adviser set forth herein.
The terms “assignment” and “vote of a majority of the outstanding voting securities” shall have the meanings set forth in the 1940 Act and the rules and regulations thereunder.
Termination of this Agreement shall not affect the right of the Sub-Adviser to receive payments on any unpaid balance of the compensation described in Section 4 earned prior to such termination and for any additional period during which Sub-Adviser serves as such for the Fund, fails in any materialsubject to applicable law.
8. Compliance Certification. From time to time the Sub-Adviser shall provide such certifications with respect to implement an appropriate response thatRule 38a-1 under the Committee,1940 Act as the QLCC, has
recommendedare reasonably requested by the Fund take.
D. Other Responsibilities:
1. The Committeeor the Manager. In addition, the Sub-Adviser will, from time to time, provide a written assessment of its compliance program in conformity with current industry standards that is reasonably acceptable to the Fund to enable the Fund to fulfill its obligations under Rule 38a-1 under the 1940 Act.
9. Notice. Any notice under this Agreement shall receive, retainbe sufficient in all respects if given in writing and handle complaints
receiveddelivered by commercial courier providing proof of delivery and addressed as follows or addressed to such other person or address as such party may designate for receipt of such notice.
If to the Manager or the Fund: | If to the Sub-Adviser: |
First Trust Enhanced Equity Income Fund First Trust Advisors L.P. 120 E. Liberty Drive, Suite 400 Wheaton, Illinois 60187 Attention: Secretary | Chartwell Investment Partners, LLC 1205 Westlakes Drive, Suite 100 Berwyn, Pennsylvania 19312 Attention: Melissa L. Haupt If by Facsimile: (610) 722-5644 |
10. Limitations on Liability. All parties hereto are expressly put on notice of the Fund’s Declaration of Trust and all amendments thereto, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts, and the limitation of shareholder and trustee liability contained therein and a copy of which has been provided to the Sub-Adviser prior to the date hereof. This Agreement is executed on behalf of the Fund by the Funds regarding accounting, internal accounting controls,
or auditing matters fromFund’s officers in their capacity as officers and not individually and is not binding upon any person, whether or not an employee of the FundsTrustees, officers or shareholders of the Fund Management,individually but the obligations imposed upon the Fund by this Agreement are binding only upon the assets and property of the Fund, and persons dealing with the Fund must look solely to the assets of the Fund for the enforcement of any claims.
11. Miscellaneous. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement will be binding upon and shall receive submissions of concerns,
including anonymous submissions, regarding questionable accounting or
auditing matters by officersinure to the benefit of the Fundsparties hereto 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 concernstheir respective successors.
12. Applicable Law. This Agreement shall be handledconstrued in accordance with applicable federal law and (except as to Section 10 hereof, which shall be construed in accordance with the Committee's procedures for operating aslaws of Massachusetts) the laws of the State of Illinois. For the avoidance of doubt, where the effect of a QLCC, outlinedrequirement of the 1940 Act reflected 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 findingsprovision of any
examinationthis Agreement is relaxed by a regulatory agency as they relaterule, regulation, no-action assurance, order (including any amendment thereto) or other relief of the SEC, whether of special or of general application, such provision shall be deemed to financial statement
matters.
3. The Committee shall review and reassessincorporate the adequacyeffect of this
charter on an annual basis and providesuch rule, regulation, no-action assurance, order (including any amendment thereto) or other relief.
13. Amendment, Etc. This Agreement may only be amended, or its provisions modified or waived, in a recommendationwriting signed by the party against which such amendment, modification or waiver is sought to be enforced.
14. Authority. Each party represents to the Board for
approvalothers that it is duly authorized and fully empowered to execute, deliver and perform this Agreement. The Fund represents that engagement of any proposed changes deemed necessary or advisablethe Sub-Adviser has been duly authorized by the Committee.
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4. The Committee shall evaluate on an annual basis the performance
of the Committee.
5. The Committee shall review with the External AuditorsFund 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 perform other special reviews,
investigations or oversight functions as requested by the Board and shall
receive and review periodic or special reports issued on
exposure/controls, irregularities and control failures related to the
Funds.
8. The Committee shall prepare any report of the Committee required
to be included in a proxy statement for a Fund.
9. The Committee may request any officer or employee of a Fund or
Fund Management, independent legal counsel, fund counsel and the External
Auditors to attend a meeting of the Committee or to meet with any members
of, or consultants to, the Committee.
10. The Committee shall maintain minutes of its meetings.
11. The Committee shall perform such other functions and have such
powers as may be necessary or appropriate in the efficient and lawful
discharge of its responsibilities.
IV. AUTHORITY TO ENGAGE ADVISERS
The Committee may engage independent counsel and other advisers, as it
determines necessary to carry out its duties. The Funds' External Auditors shall
have unrestricted accessibility at any time to Committee members.
V. FUNDING PROVISIONS
A. The Committee shall determine the:
1. Compensation to any independent registered public accounting
firm engaged for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for a Fund; and
2. Compensation to any advisers employed by the Committee.
B. The expenses enumerated in this Article V and all necessary and
appropriate administrative expenses of the Committee shall be paid by the
applicable Fund or Fund Management.
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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 dutyFund’s Declaration of Trust and other governing documents of the Committee to assure
compliance with laws and regulations and/Fund.
15. Third Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of, or the Funds' Code of Ethics.
C. In discharging its responsibilities, the Committee and its members are
entitled to rely on information, opinions, reports,enforceable by, any person 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 memberentity that is not a member.
Amended: December 10, 2017
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FORM OF PROXY CARD
------------------
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
EASY VOTING OPTIONS:
VOTE BY MAIL
Vote, sign and dateparty hereto.
16. Forum Selection. Any action brought on or with respect to this Proxy
Card and returnAgreement or any other document executed in connection herewith or therewith by a party to this Agreement against another party to this Agreement shall be brought only in a court of competent jurisdiction in Chicago, Cook County, Illinois, or if venue does not lie in any such court only in a court of competent jurisdiction within the State of Illinois (the “Chosen Courts”). Each party to this Agreement (a) consents to jurisdiction in the postage-paid envelope
VOTE IN PERSON
Attend Shareholder Meeting
500 W. 5th Street, Suite 9202
Austin, Texas 78701
on April 23, 2018
Please detach at perforation before mailing.
PROXY
[NAME OF FUND]
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 23, 2018
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of sharesChosen Courts; (b) waives any objection to venue in any of the [NAME OF FUND], a Massachusetts business
trust, hereby appoints W. Scott Jardine, Kristi A. Maher, James M. Dykas, Donald
P. SwadeChosen Courts; 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(c) waives any objection that any of the undersigned all sharesChosen Courts is an inconvenient forum. In any action commenced by a party hereto against another party to the Agreement, there shall be no right to a jury trial. THE RIGHT TO A TRIAL BY JURY IS EXPRESSLY WAIVED TO THE FULLEST EXTENT PERMITTED BY LAW.
17. Severability. Each provision of this Agreement is intended to be severable from the others so that if any provision or term hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the Fundremaining provisions and terms hereof; provided, however, that the undersigned is
entitled to vote at the Annual Meeting of Shareholdersprovisions governing payment of the Management Fee described in Section 4 are not severable.
18. Entire Agreement. This Agreement constitutes the sole and entire agreement of the parties hereto with respect to the subject matter expressly set forth herein.
In Witness Whereof, the Fund, (the
"Meeting")the Manager and the Sub-Adviser have caused this Agreement to be held atexecuted as of the Austin, Texas offices of day and year first above written.
First Trust Advisors L.P. | Chartwell Investment Partners, LLC | |
By | By | |
Title: | Title: |
First Trust Advisors L.P.,
500 W. 5th Street, Suite 9202, Austin, Texas 78701, 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 March 8, 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
adjournments or postponements of the Meeting). A majority of the proxies present
and acting at the Meeting in person or by substitute (or, if only one shall be
so present, then that one) shall have and may exercise all of the power and
authority of said proxies hereunder. The undersigned hereby revokes any proxy
previously given. This proxy, if properly executed, will be voted in the manner
directed by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES SET FORTH.
----------------------- -------------------
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XXXX_29628_020118
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 23, 2018
THE PROXY STATEMENT AND PROXY CARD FOR THIS MEETING ARE AVAILABLE AT:
https://www.proxy-direct.com/fir-29628
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 II Trustees.
The Board of Trustees recommends that you vote FOR the election of the
two Class II 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
----------------------- ------------------------ ------------------------
/ /
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608999900109999999999
xxxxxxxxxxxxxx xxxx-29628 M xxxxxxxx
Enhanced Equity Income Fund
By: ___________________________________
Title: ______________________________
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