As filed with the Securities and Exchange Commission on August 23, 2004
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1933 Act File No. 333-105251
1940 Act File No. 811-21344
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement.
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-12
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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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 of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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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:
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FIRST TRUST VALUE LINE(R) DIVIDEND FUND
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/
UTILITIES DIVIDEND & INCOME FUND
FIRST TRUST/VALUE LINE(R) & IBBOTSON EQUITY ALLOCATION FUND
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
1001 Warrenville Road
Suite 300
Lisle, Illinois 60532
August 13, 2004
Dear Shareholder:
The accompanying materials relate to the Joint Annual Meetings of
Shareholders (each a "Meeting" and collectively, the "Meetings") of First Trust
Value Line(R) Dividend Fund, First Trust/Four Corners Senior Floating Rate
Income Fund, Macquarie/First Trust Global Infrastructure/Utilities Dividend &
Income Fund, First Trust/Value Line(R) & Ibbotson Equity Allocation Fund, and
First Trust/Four Corners Senior Floating Rate Income Fund II (each a "Fund" and
collectively, the "Funds"). The Meetings will be held at the offices of First
Trust Advisors L.P., 1001 Warrenville Road, Suite 300, Lisle, Illinois 60532 on
September 13, 2004 at 10:00 a.m. Central time.
At the Meetings, you will be asked to vote on a proposal to elect
Trustees of each Fund and to transact such other business as may properly come
before the Meeting and any adjournments thereof. The proposal is described in
the accompanying Notice of Joint Annual Meeting of Shareholders and Joint Proxy
Statement.
Your participation at the Meeting is very important. If you cannot
attend the Meeting, you may participate by proxy. As a shareholder, you cast one
vote for each share 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,
James A. Bowen
Chairman of the Board
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance
to you and avoid the time and expense to the Fund involved in validating your
vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears
in the registration on-the-proxy card.
2. Joint Accounts: Either party may sign, but the name of the
party signing should conform exactly to the name shown in the
registration.
3. All Other Accounts: The capacity of the individual signing
the proxy should be indicated unless it is reflected in the form of
registration. For example:
REGISTRATION VALID SIGNATURE
CORPORATE ACCOUNTS
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA John B. Smith
(2) John B. Smith John B. Smith, Jr., Executor
FIRST TRUST VALUE LINE(R) DIVIDEND FUND
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/
UTILITIES DIVIDEND & INCOME FUND
FIRST TRUST/VALUE LINE(R) & IBBOTSON EQUITY ALLOCATION FUND
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
1001 Warrenville Road
Suite 300
Lisle, Illinois 60532
NOTICE OF JOINT ANNUAL MEETING OF SHAREHOLDERS
To be held on September 13, 2004
August 13, 2004
To the Shareholders of the above Funds:
Notice is hereby given that the Joint Annual Meetings of Shareholders
(each a "Meeting" and collectively the "Meetings") of First Trust Value Line(R)
Dividend Fund, First Trust/Four Corners Senior Floating Rate Income Fund,
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund,
First Trust/Value Line(R) & Ibbotson Equity Allocation Fund, and First
Trust/Four Corners Senior Floating Rate Income Fund II (each a "Fund" and
collectively, the "Funds"), each a Massachusetts business trust, will be held at
the offices of First Trust Advisors L.P., 1001 Warrenville Road, Suite 300,
Lisle, Illinois 60532 on September 13, 2004, at 10:00 a.m. Central time, for the
following purposes:
1. To elect five Trustees of each Fund as outlined below:
a. For First Trust Value Line(R) Dividend Fund, Macquarie/
First Trust Global Infrastructure/Utilities Dividend &
Income Fund, First Trust/Value Line(R) & Ibbotson Equity
Allocation Fund, and First Trust/Four Corners Senior
Floating Rate Income Fund II:
i. Five (5) Trustees are to be elected by holders of
Common Shares of each Fund, voting together as a
single class. Trustees Bowen, Erickson, Nielson,
Kadlec and Oster are nominees for election by all
shareholders of each Fund.
b. For First Trust/Four Corners Senior Floating Rate Income
Fund:
i. Three (3) Trustees are to be elected by holders of
Common and Preferred Shares, voting together as a
single class. Trustees Bowen, Erickson, and Nielson
are nominees for election by holders of Common and
Preferred Shares; and
ii. Two (2) Trustees are to be elected by holders of
Preferred Shares, voting together as a single
class. Trustees Kadlec and Oster are nominees for
election by holders of Preferred Shares.
2. To transact such other business as may properly come before the
Meetings or any adjournment thereof.
The Board of Trustees has fixed the close of business on July 12, 2004
as the record date for the determination of shareholders entitled to notice of
and to vote at the Meetings.
By order of the Board of Trustees,
W. Scott Jardine
Secretary
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SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE REQUESTED TO PROMPTLY
COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE WHICH
NEEDS NO POSTAGE IF MAILED IN THE CONTINENTAL UNITED STATES. INSTRUCTIONS FOR
THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON THE INSIDE COVER.
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FIRST TRUST VALUE LINE(R) DIVIDEND FUND
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/ UTILITIES DIVIDEND & INCOME FUND
FIRST TRUST/VALUE LINE(R) & IBBOTSON EQUITY ALLOCATION FUND
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
1001 Warrenville Road
Suite 300
Lisle, Illinois 60532
JOINT ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 13, 2004
JOINT PROXY STATEMENT
AUGUST 13, 2004
This Joint Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Trustees of First Trust Value Line(R)
Dividend Fund, First Trust/Four Corners Senior Floating Rate Income Fund,
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund,
First Trust/Value Line(R) & Ibbotson Equity Allocation Fund, and First
Trust/Four Corners Senior Floating Rate Income Fund II (each a "Fund" and
collectively, the "Funds"), each a Massachusetts business trust, for use at the
Annual Meetings of Shareholders of the Funds to be held on September 13, 2004,
at 10:00 a.m. Central time, at the offices of First Trust Advisors L.P., 1001
Warrenville Road, Suite 300, Lisle, Illinois 60532, and at any adjournments
thereof (each a "Meeting" and collectively, the "Meetings"). A Notice of the
Annual Meetings of Shareholders and a proxy card accompany this Joint Proxy
Statement. The Board of Trustees of the Funds has determined that the use of
this Joint Proxy Statement is in the best interests of each Fund and its
shareholders in light of the same matters being considered and voted on by
shareholders.
Proxy solicitations will be made, beginning on or about August 13, 2004,
primarily by mail, but such solicitations may also be made by telephone or
personal interviews conducted by officers or employees of each Fund; First Trust
Advisors L.P. ("First Trust Advisors" or the "Adviser"), the investment adviser
of the Funds; and PFPC Inc. ("PFPC"), the administrator, accounting agent and
transfer agent of the Funds and a subsidiary of The PNC Financial Services Group
Inc., or any of their affiliates. The costs of proxy solicitation and expenses
incurred in connection with the preparation of this Joint Proxy Statement and
its enclosures will be paid by the Funds. The Funds will also reimburse
brokerage firms and others for their expenses in forwarding solicitation
material to the beneficial owners of Fund shares.
The Funds' most recent annual and semi-annual reports are available upon
request, without charge, by writing to the Adviser at 1001 Warrenville Road,
Suite 300, Lisle, Illinois 60532 or by calling 1-800-988-5891. This Joint Proxy
Statement and the enclosed proxy card will first be mailed to shareholders on or
about August 13, 2004.
Page 1
If the enclosed proxy card is properly executed and returned in time to
be voted at the Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. If no instructions are marked
on the enclosed proxy card, shares represented thereby will be voted in the
discretion of the persons named on the proxy card. Accordingly, unless
instructions to the contrary are marked thereon, a proxy will be voted FOR the
election of the nominees as Trustees, and FOR any other matters deemed
appropriate. Any shareholder who has given a proxy has the right to revoke it at
any time prior to its exercise either by attending the Meeting and voting his or
her shares in person, or by submitting a letter of revocation or a later-dated
proxy to the Fund at the above address prior to the date of the Meeting.
Under the By-Laws of each Fund, a quorum is constituted by the presence
in person or by proxy of the holders of thirty-three and one-third percent
(33-1/3%) of the voting power of the outstanding shares of the Fund. In the
absence of a quorum, any lesser number of outstanding shares entitled to vote
present in person or by proxy may adjourn the meeting from time to time until a
quorum shall be present. For the purposes of establishing whether a quorum is
present, all shares present and entitled to vote, including abstentions and
broker non-votes (i.e., shares held by brokers or nominees as to which (i)
instructions have not been received from the beneficial owners or the persons
entitled to vote and (ii) the broker or nominee does not have discretionary
voting power on a particular matter), shall be counted.
The close of business on July 12, 2004 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 all adjournments thereof.
Each Fund, except First Trust/Four Corners Senior Floating Rate Income
Fund, has one class of shares of beneficial interest, par value $0.01 per share,
known as Common Shares. First Trust/Four Corners Senior Floating Rate Income
Fund has two classes of shares of beneficial interest, par value $0.01 per
share, Common Shares and par value $0.01 per share, Money Market Cumulative
Preferred (MMP(R)) Shares (the "Preferred Shares"). On the Record Date, each
Fund had the following number of shares (the "Shares") outstanding:
COMMON PREFERRED
SHARES SHARES
FUND OUTSTANDING OUTSTANDING
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First Trust Value Line(R)Dividend Fund 32,400,000 N/A
First Trust/Four Corners Senior Floating Rate Income Fund 4,916,013 2,280
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund 8,980,236 N/A
First Trust/Value Line(R)& Ibbotson Equity Allocation Fund 6,505,236 N/A
First Trust/Four Corners Senior Floating Rate Income Fund II 24,005,236 N/A
Common Shares of First Trust Value Line(R) Dividend Fund, First Trust/
Four Corners Senior Floating Rate Income Fund, and First Trust/Value Line(R) &
Ibbotson Equity Allocation Fund are listed on the American Stock Exchange under
the ticker symbols FVD, FCM and FVI, respectively. Common Shares of
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund and
First Trust/Four Corners Senior Floating Rate Income Fund II are listed on the
New York Stock Exchange under the ticker symbols MFD and FCT, respectively. The
Page 2
Preferred Shares of First Trust/Four Corners Senior Floating Rate Income Fund
are not listed on a national stock exchange.
Shareholders of record on the Record Date are entitled to one vote for
each share the shareholder owns and a proportionate fractional vote for any
fraction of a share the shareholder owns. To the knowledge of the Board of
Trustees, as of August 4, 2004, no single shareholder or "group" (as that term
is used in Section 13(d) of the Securities Exchange Act of 1934 (the "1934
Act")) beneficially owned more than 5% of each Fund's outstanding Shares.
Information as to beneficial ownership is based on reports filed with the
Securities and Exchange Commission ("SEC") by such holders.
In order that your Shares may be represented at the Meeting, you are
requested to:
o indicate your instructions on the proxy card;
o date and sign the proxy card;
o mail the proxy card promptly in the enclosed envelope which requires
no postage if mailed in the continental United States; and
o allow sufficient time for the proxy to be received (by 5:00 p.m., on
September 10, 2004).
Page 3
PROPOSAL 1: ELECTION OF TRUSTEES
Proposal 1 relates to the election of Trustees of each Fund. Management
proposes the election of five Trustees: James A. Bowen, Richard E. Erickson,
Niel B. Nielson, Thomas R. Kadlec and David M. Oster. Each Trustee has indicated
his willingness to continue to serve if elected. If elected, each nominee will
hold office until the next annual meetings of shareholders or until his
successor is elected and qualified, or until he resigns, retires, or is
otherwise removed. Each of the nominees was elected to each Fund's Board by the
Fund's initial shareholder on the Fund's respective organizational date.
a. For First Trust Value Line(R) Dividend Fund, Macquarie/First
Trust Global Infrastructure/Utilities Dividend & Income Fund, First Trust/Value
Line(R) & Ibbotson Equity Allocation Fund, and First Trust/Four Corners Senior
Floating Rate Income Fund II:
i. Five (5) Trustees are to be elected by holders of Common
Shares of each Fund, voting together as a single class.
Trustees Bowen, Erickson, Nielson, Kadlec and Oster are
nominees for election by all shareholders of each Fund.
b. For First Trust/Four Corners Senior Floating Rate Income Fund:
i. Three (3) Trustees are to be elected by holders of Common
and Preferred Shares, voting together as a single class.
Trustees Bowen, Erickson, and Nielson are nominees for
election by holders of Common and Preferred Shares; and
ii. Two (2) Trustees are to be elected by holders of Preferred
Shares, voting together as a single class. Trustees Kadlec
and Oster are nominees for election by holders of
Preferred Shares.
The Trustees, including those who are not "interested persons" of the
Fund ("Independent Trustees") as that term is defined in the Investment Company
Act of 1940, as amended (the "1940 Act"), shall be elected by the affirmative
vote of the holders of a plurality of the shares of each Fund cast in person or
by proxy 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
nominees named.
Unless you give contrary instructions on the enclosed proxy card, your
shares will be voted FOR the election of the nominees listed if your proxy card
has been properly executed and timely received by the Fund. If any of the
nominees should withdraw or otherwise become unavailable for election, your
shares will be voted FOR such other nominee or nominees as management may
recommend.
The Board of Trustees Unanimously Recommends that Shareholders Vote FOR
Proposal 1.
Page 4
ADDITIONAL INFORMATION
MANAGEMENT OF THE FUNDS
The management of each Fund, including general supervision of the duties
performed for each Fund under the investment management agreement between each
Fund and the Adviser, is the responsibility of the Board of Trustees. There are
five Trustees of each Fund, one of whom is an "interested person" (as the term
"interested person" is defined in the 1940 Act) and four of whom are Independent
Trustees. No Independent Trustee has ever been a trustee, director or employee
of, or consultant to the Adviser, any sub-adviser described below under
"INVESTMENT ADVISER AND ADMINISTRATOR," or any of their affiliates. The Trustees
of the Funds set broad policies for each Fund, choose each Fund's officers, and
hire each Fund's investment adviser and, if applicable, sub-adviser. The
officers of the Funds manage the day-to-day operations and are responsible to
the Funds' Board of Trustees. The following is a list of Trustees and officers
of the Funds and a statement of their present positions, principal occupations
during the past five years, the number of portfolios each oversees and the other
directorships they hold, if applicable.
Board Nominees
--------------
Interested Trustees
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NUMBER OF
TERM OF PORTFOLIOS
OFFICE(2) PRINCIPAL IN FUND
POSITION(S) AND LENGTH OCCUPATION(S) COMPLEX OTHER
NAME, ADDRESS, AND HELD WITH OF TIME DURING PAST FIVE OVERSEEN DIRECTORSHIPS
DATE OF BIRTH THE FUNDS SERVED(3) YEARS BY TRUSTEE HELD BY TRUSTEE
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James A. Bowen(1) President, 1 Year President, First Trust 19 NONE
1001 Warrenville Road Chairman of Portfolios, L.P. and
Suite 300 the Board, First Trust Advisors;
Lisle, IL 60532 Chief Since 2003 Chairman of the
DOB: 9/55 Executive Board of Directors,
Officer and Bond Wave, LLC
Trustee
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Interested Trustees
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Richard E. Erickson Trustee 1 Year Physician, 19 NONE
c/o First Trust Advisors L.P. Sportsmed/Wheaton
1001 Warrenville Road Orthopedics
Suite 300 Since 2003
Lisle, IL 60532
DOB: 4/51
Niel B. Nielson Trustee
c/o First Trust Advisors L.P. 1 Year President (2002 to 19 Director of Good
1001 Warrenville Road Present), Covenant News Publishers-
Suite 300 College; Pastor (1997 Crossway Books;
Lisle, IL 60532 Since 2003 to 2002), College Covenant
DOB: 3/54 Church in Wheaton Transport Inc.
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Page 5
NUMBER OF
TERM OF PORTFOLIOS
OFFICE(2) PRINCIPAL IN FUND
POSITION(S) AND LENGTH OCCUPATION(S) COMPLEX OTHER
NAME, ADDRESS, AND HELD WITH OF TIME DURING PAST FIVE OVERSEEN DIRECTORSHIPS
DATE OF BIRTH THE FUNDS SERVED(3) YEARS BY TRUSTEE HELD BY TRUSTEE
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Thomas R. Kadlec Trustee 1 Year Vice-President, Chief 19 NONE
c/o First Trust Advisors L.P. Financial Officer
1001 Warrenville Road (1990 to Present), ADM
Suite 300 Since 2003 Investor Services, Inc.
Lisle, IL 60532 (Futures Commission
DOB: 11/57 Merchant); Registered
Representative (2000 to
Present), Segerdahl &
Company, Inc., an NASD
member (Broker-Dealer)
David M. Oster Trustee 1 Year Trader (Self- . 8 NONE
c/o First Trust Advisors L.P. Employed) (1987 to
1001 Warrenville Road Present) (Options
Suite 300 Since 2003 Trading and Market
Lisle, IL 60532 Making)
DOB: 3/64
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Officers
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TERM OF OFFICE(2) NUMBER OF PORTFOLIOS
NAME, ADDRESS, AND POSITION(S) HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
DATE OF BIRTH WITH THE FUNDS TIME SERVED(3) DURING PAST FIVE YEARS SERVED BY OFFICER
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Mark R. Bradley Treasurer, Indefinite Chief Financial 19
1001 Warrenville Road Controller, Chief Officer, Managing
Suite 300 Financial Officer Director, First Trust
Lisle, IL 60532 and Chief Since 2003 Portfolios, L.P. and
DOB: 11/57 Accounting Officer First Trust Advisors;
Chief Financial Officer,
Bond Wave, LLC
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Susan M. Brix Assistant Vice Indefinite Representative, First 19
1001 Warrenville Road President Trust Portfolios, L.P.;
Suite 300 Assistant Portfolio
Lisle, IL 60532 Since 2003 Manager, First Trust
DOB: 1/60 Advisors
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Robert F. Carey Vice President Indefinite Senior Vice President, 19
1001 Warrenville Road First Trust Portfolios,
Suite 300 L.P. and First Trust
Lisle, IL 60532 Since 2003 Advisors
DOB: 7/63
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W. Scott Jardine Secretary and Indefinite General Counsel, 19
1001 Warrenville Road Chief Compliance First Trust Portfolios,
Suite 300 Officer L.P. and First Trust
Lisle, IL 60532 Since 2003 Advisors; Secretary, Bond
DOB: 5/60 Wave, LLC
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Kristi A. Maher
1001 Warrenville Road Assistant Secretary Indefinite Assistant General Counsel 19
Suite 300 (March 2004 to Present),
Lisle, IL 60532 First Trust Portfolios,
DOB: 12/66 Since 2004 L.P.; Associate (1995 to
March 2004), Chapman and
Cutler LLP
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Page 6
TERM OF OFFICE(2) NUMBER OF PORTFOLIOS
NAME, ADDRESS, AND POSITION(S) HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
DATE OF BIRTH WITH THE FUNDS TIME SERVED(3) DURING PAST FIVE YEARS SERVED BY OFFICER
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Roger Testin Vice President Indefinite Vice President 19
1001 Warrenville Road (August 2001 to Present),
Suite 300 First Trust Advisors;
Lisle, IL 60532 Since 2003 Analyst (1998 to 2001),
DOB: 6/66 Dolan Capital Management
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<FN>
1 Mr. Bowen is deemed an "interested person" of the Funds due to his position as President of First
Trust Advisors L.P., investment adviser of the Funds.
2 Trustees are elected each year by shareholders and serve a one-year term until their successors are
elected. Officers of the Funds have an indefinite term.
3 Trustees and Officers were elected in 2003 for First Trust Value Line(R) Dividend Fund and First
Trust/Four Corners Senior Floating Rate Income Fund. Trustees and Officers were elected in 2004 for the
other Funds. Kristi A. Maher was elected Assistant Secretary of all Funds on June 7, 2004. W. Scott
Jardine was appointed Chief Compliance Officer of all Funds on July 26, 2004.
</FN>
In addition to the Funds, the First Trust Fund Complex includes First
Defined Portfolio Fund, LLC, an open-end management investment company advised
by First Trust Advisors with 11 portfolios, First Trust Value Line(R) 100 Fund,
and Energy Income and Growth Fund, closed-end funds also advised by First Trust
Advisors.
Messrs. Erickson, Nielson, Kadlec and Bowen are trustees of First
Defined Portfolio Fund, LLC. Mr. Kadlec was appointed to the Board of Trustees
of First Defined Portfolio Fund, LLC on March 8, 2004. Messrs. Bowen, Erickson,
Nielson, Kadlec and Oster are Trustees of First Trust Value Line(R) 100 Fund,
and Energy Income and Growth Fund(1). None of the Independent Trustees, nor any
of their immediate family members, has ever been a director, officer or employee
of, or consultant to, First Trust Advisors, First Trust Portfolios, L.P., any
sub-adviser or any of their affiliates. In addition, Mr. Bowen, executive
officer of each Fund, and the other officers of the Funds, hold the same
positions with First Defined Portfolio Fund, LLC, First Trust Value Line(R) 100
Fund, and Energy Income and Growth Fund, as they hold with the Funds.
BENEFICIAL OWNERSHIP OF SHARES HELD IN THE FUNDS BY EACH NOMINEE FOR ELECTION AS
TRUSTEE
The following table sets forth the dollar range and number of equity
securities beneficially owned by the Trustees in each Fund and in other funds in
the First Trust Fund Complex as of July 31, 2004:
___________________________
(1) Messrs. Bowen, Erickson, Nielson, Kadlec and Oster are also Trustees of
First Trust/Fiduciary Asset Management Covered Call Fund, a closed-end fund
advised by First Trust Advisors that has been organized but is not yet
operating.
Page 7
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Dollar Range of Equity Securities in the Fund/(Number of Shares Held)
====================================================================================================================================
Aggregate Dollar Range
First Macquarie/First First of Equity Securities
Trust/Four Trust Global/ First Trust/Four in All Registered
Corners Infrastructure Trust/Value Corners Investment Companies
First Trust Senior Floating Utilities Line(R) & Ibbotson Senior Floating Overseen by Trustee in
Value Line(R) Rate Income Dividend & Equity Rate Income Fund Complex/
Name of Trustee Dividend Fund Fund Income Fund Allocation Fund Fund II (Number of Shares Held)
===================================================================================================================================
James A. Bowen $10,001- 0 0 $10,001- Over $100,000
$50,000 $50,000
(3,000 shares) (1,250 shares) (6,750 shares)
- -----------------------------------------------------------------------------------------------------------------------------------
Richard E. Erickson 0 0 0 0 0 $1-$10,000
(301 shares)
- -----------------------------------------------------------------------------------------------------------------------------------
Thomas R. Kadlec $10,000- 0 0 0 $50,001-$100,000
$50,000 $1-$10,000
(1,822 Shares) (515 shares) (3,937 shares)
- ------------------------------------------------------------------------------------------------------------------------------------
Niel B. Nielson $1-$10,000 $1-$10,000 0 0 0 $10,000-$50,000
(201 shares) (200 shares) (601 shares)
- ------------------------------------------------------------------------------------------------------------------------------------
David M. Oster $10,000- 0 $10,000- $10,000- 0 $50,001-$100,000
$50,000 $50,000 $50,000
(1,006 shares) (1,017 shares) (1,000 shares) (4,023 shares)
- ------------------------------------------------------------------------------------------------------------------------------------
As of July 31, 2004, the Independent Trustees of each Fund and
immediate family members do not own beneficially or of record any class of
securities of an investment adviser, sub-adviser or principal underwriter of the
Funds or any person directly or indirectly controlling, controlled by, or under
common control with an investment adviser, sub-adviser or principal underwriter
of the Funds, nor did any Independent Trustee purchase or sell securities of
First Trust Advisors, any sub-adviser or their parents, or subsidiaries.
James A. Bowen purchased four limited partnership units of Grace
Partners of DuPage L.P., the limited partner of First Trust Advisors L.P., from
Kimberly Boyer on or about May 17, 2004 for a purchase price of $500,000 per
unit. The units were purchased pursuant to exercise of an option previously
granted.
As of July 31, 2004, each Fund knows of no person who owns beneficially
or of record 5% or more of each Fund's Shares. As of July 31, 2004, the Trustees
and executive officers as a group beneficially owned the following number of
shares of each Fund, which is less than 1% of each Fund's Shares outstanding.
COMMON PREFERRED
SHARES SHARES
FUND OWNED OWNED
- --------------------------------------------------------------------------------------------------------
First Trust Value Line(R)Dividend Fund 6,029 N/A
First Trust/Four Corners Senior Floating Rate Income Fund 715 0
Macquarie/First Trust Global Infrastructure/ & Utilities Dividend & Income Fund 1,017 N/A
First Trust/Value Line(R)& Ibbotson Equity Allocation Fund 2,250 N/A
First Trust/Four Corners Senior Floating Rate Income Fund II 0 N/A
- --------------------------------------------------------------------------------------------------------
Page 8
As of July 31, 2004, the Trustees and executive officer as a group
beneficially owned 15,612 shares of funds in the First Trust Fund Complex (less
than 1% of the shares outstanding).
COMPENSATION
Effective June 7, 2004, the Trustees approved a revised compensation
plan. Under the revised plan, each Fund pays each Trustee who is not an officer
or employee of First Trust Advisors, any sub-adviser or any of their affiliates
an annual retainer of $10,000 which includes compensation for all regular
quarterly board meetings and regular committee meetings. No additional meeting
fees are paid in connection with regular quarterly board meetings or regular
committee meetings. Additional fees of $1,000 and $500 are paid to
non-interested Trustees for special board meetings and non-regular committee
meetings, respectively. These additional fees are shared by the Funds in the
First Trust Fund complex that participate in the particular meeting and are not
per Fund fees. Trustees are also reimbursed for travel and out-of-pocket
expenses in connection with all meetings. The Trustees adopted the revised plan
because the increase in the number of Funds in the First Trust complex had the
effect of rapidly increasing their compensation under the previous arrangements.
Prior to June 7, 2004, each Fund paid each Trustee not affiliated with First
Trust Advisors, any sub-adviser or any of their affiliates an annual fee of
$10,000 plus $1,000 as compensation for each board meeting (in-person or by
electronic means) and $500 per committee meeting (in-person or by electronic
means) attended. The Board of Trustees held five meetings of First Trust Value
Line(R) Dividend Fund, six meetings of the First Trust/Four Corners Senior
Floating Rate Income Fund, three meetings of the Macquarie/First Trust Global
Infrastructure/ Utilities Dividend & Income, Fund, and one meeting each of the
First Trust/Value Line(R) & Ibbotson Equity Allocation Fund and First Trust/Four
Corners Senior Floating Rate Income Fund II during the fiscal year ended May 31,
2004. Each of the Trustees attended all of the meetings of the Funds. The
aggregate fees and expenses paid to the Trustees by each Fund for the fiscal
year ended May 31, 2004 (including reimbursement for travel and out-of-pocket
expenses) amounted to the following:
AGGREGATE FEES AND
FUND EXPENSES PAID
- --------------------------------------------------------------------------------------------------
First Trust Value Line(R) Dividend Fund $62,870
First Trust/Four Corners Senior Floating Rate Income Fund $54,648
Macquarie/First Trust Global Infrastructure/ & Utilities Dividend & Income Fund $ 6,101
First Trust/Value Line(R) & Ibbotson Equity Allocation Fund $ 4,000
First Trust/Four Corners Senior Floating Rate Income Fund II $ 4,000
- --------------------------------------------------------------------------------------------------
The following table sets forth certain information regarding the
compensation of each Fund's Trustees for the fiscal year ended May 31, 2004. The
Funds have no retirement or pension plans.
Page 9
====================================================================================================================================
Estimated
Estimated Aggregate
Aggregate Compensation Estimated Estimated
Estimated Compensation From Aggregate Aggregate
Aggregate From First Macquarie/First Compensation Compensation
Compensation Trust/Four Trust Global From First From First
From First Corners Infrastructure/ Trust Value Trust/Four Total
Trust Value Senior Utilities Line(R) & Corners Senior Compensation
Line(R) Dividend Floating Rate Dividend & Ibbotson Equity Floating Rate from the Fund
Name of Trustee Fund Income Fund Income Fund Allocation Fund Income Fund II Complex
====================================================================================================================================
James A. Bowen 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Richard E. Erickson $19,000 $20,500 $16,500 $16,000 $16,000 $117,875
- -----------------------------------------------------------------------------------------------------------------------------------
Thomas R. Kadlec $19,000 $20,500 $16,500 $16,000 $16,000 $101,000
- -----------------------------------------------------------------------------------------------------------------------------------
Niel B. Nielson $19,000 $20,500 $16,500 $16,000 $16,000 $117,875
- -----------------------------------------------------------------------------------------------------------------------------------
David M. Oster $19,000 $20,500 $16,500 $16,000 $16,000 $101,000
- -----------------------------------------------------------------------------------------------------------------------------------
The total compensation paid to Messrs. Erickson and Nielson, Independent
Trustees of each Fund and Fund Complex for the fiscal year ended May 31, 2004
includes compensation for their services as Trustees to First Defined Portfolio
Fund, LLC, First Trust Value Line(R) 100 Fund, Energy Income and Growth Fund and
the Funds. For the fiscal year ended May 31, 2004, Mr. Oster was not a Trustee
of First Defined Portfolio Fund, LLC and accordingly, his total compensation was
based on compensation paid by First Trust Value Line(R) 100 Fund, Energy Income
and Growth Fund and the Funds. On March 8, 2004, Mr. Kadlec was appointed as a
Trustee of First Defined Portfolio Fund, LLC and accordingly, his total
compensation for fiscal year ended May 31, 2004 was based on compensation paid
by First Defined Portfolio Fund, LLC, First Trust Value Line(R) 100 Fund, Energy
Income and Growth Fund and the Funds. The compensation for the Funds has been
annualized to reflect compensation payable for a full fiscal year.
The officers and the interested Trustee of each Fund receive no
compensation from the Funds for serving in such capacity.
COMMITTEES
AUDIT COMMITTEE
The Board of Trustees has an Audit Committee, which consists of Messrs.
Erickson, Kadlec, Nielson and Oster, all of whom are "independent" as defined in
the listing standards of the American Stock Exchange and New York Stock
Exchange. The Audit Committee is responsible for overseeing each Fund's
accounting and financial reporting process, the system of internal controls,
audit process and evaluating and appointing independent auditors (subject also
to Board approval). The Audit Committee met four times during the fiscal year
ended May 31, 2004, with all members present.
In carrying out its responsibilities, the Audit Committee pre-approves
all audit services for each Fund and permitted non-audit services (including the
fees and terms thereof) to be performed for each Fund and the Adviser by
Deloitte & Touche LLP, the Funds' independent registered public accounting firm
("independent auditors"), subject to the de minimis exceptions for non-audit
Page 10
services described in Section 10A of the 1934 Act and Rule 2-01 of Regulation
S-X that the Audit Committee approves prior to the completion of the audit. The
Chairman of the Audit Committee is authorized to give such pre-approvals on
behalf of the Audit Committee. Any decisions by the Chairman to grant
pre-approvals shall be presented to the full Audit Committee at the next
regularly scheduled meeting.
AUDIT COMMITTEE REPORT
The role of the Audit Committee is to assist the Board of Trustees in
its oversight of each Fund's accounting and financial reporting process. The
Audit Committee operates pursuant to a Charter that was most recently reviewed
and approved by the Board of Trustees on March 8, 2004, a copy of which is
attached as Exhibit A hereto. As set forth in the Charter, management of each
Fund is responsible for maintaining appropriate systems for accounting and
internal controls and the audit process. The Funds' independent auditors are
responsible for planning and carrying out proper audits of the Funds' financial
statements and expressing an opinion as to their conformity with accounting
principles generally accepted in the United States of America.
In performing its oversight function, at a meeting held on July 26,
2004, the Audit Committee reviewed and discussed with management and the
independent auditors, Deloitte & Touche LLP ("Deloitte & Touche"), the audited
financial statements of each Fund for the fiscal periods from the commencement
of each Fund's operations through May 31, 2004, and discussed the audit 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 each Fund and such other matters brought to
the attention of the Audit Committee by the independent auditors required by
Statement on Auditing Standards No. 61, Communications with Audit Committees, as
currently modified or supplemented. The Audit Committee also received from the
independent auditors the written disclosures and letter required by Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committees,
delineating relationships between the independent auditors and each Fund and
discussed the impact that any such relationships may have on the objectivity and
independence of the independent auditors.
Members of each Fund's Audit Committee are not professionally engaged in
the practice of auditing or accounting and are not employed by the Funds for
purposes of accounting, financial management or internal control functions.
Moreover, the Audit Committee relies on, and makes no independent verification
of, the facts presented and the representations made to it by Fund management
and Deloitte & Touche. Accordingly, the Audit Committee's oversight does not
provide an independent basis to determine that management has maintained
appropriate accounting and/or financial reporting principles and policies, or
internal controls and procedures, designed to assure compliance with accounting
standards and applicable laws and regulations. Furthermore, the Audit
Committee's considerations and discussions referred to above do not provide
assurance that the audit of the Funds' financial statements has been carried out
in accordance with generally accepted auditing standards or that the financial
statements are presented in accordance with generally accepted accounting
principles.
At the organizational meetings of each Fund, the Fund's Audit Committee
Page 11
selected Deloitte & Touche as independent auditors for the Funds for the fiscal
period ending May 31, 2004. Such selection was ratified by each Fund's sole
shareholder. Deloitte & Touche has advised the Funds that, to the best of its
knowledge and belief, as of July 26, 2004, Deloitte & Touche professionals did
not have any direct or material indirect ownership interest in the Funds
inconsistent with independent professional standards pertaining to auditors. It
is expected that representatives of Deloitte & Touche will be present at the
Meeting to answer any questions that may arise. The Funds' Audit Committee has
selected Deloitte & Touche as independent auditors for the Funds for the fiscal
period ending May 31, 2005. 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.
Based on its consideration of the Funds' audited financial statements
and the discussions referred to above with Fund management and Deloitte &
Touche, 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 the inclusion of the Funds' audited financial statements
for the period ended May 31, 2004 in each Fund's Annual Report dated May 31,
2004.
Submitted by the Audit Committee of the Fund:
Richard E. Erickson
Thomas R. Kadlec
Niel B. Nielson
David M. Oster
INDEPENDENT AUDITORS' FEES
Set forth in the table below are fees billed by Deloitte & Touche to
each Fund and its Adviser for each Fund's fiscal period ended May 31, 2004:
Audit Related All Other
Audit Fees Fees Tax Fees Fees
===============================================================================================================
First Trust Value Line(R) Dividend Fund $23,500 $0 $0 $0
- ---------------------------------------------------------------------------------------------------------------
First Trust/Four Corners Senior Floating Rate
Income Fund $47,000 $2,500(1) $0 $0
- ---------------------------------------------------------------------------------------------------------------
Macquarie/First Trust Global Infrastructure/
Utilities Dividend & Income Fund $15,500 $0 $0 $0
- ---------------------------------------------------------------------------------------------------------------
First Trust/Value Line(R) & Ibbotson Equity
Allocation Fund $13,500 $0 $0 $0
- ---------------------------------------------------------------------------------------------------------------
First Trust/Four Corners Senior Floating Rate
Income Fund II $14,500 $0 $0 $0
- ---------------------------------------------------------------------------------------------------------------
First Trust Advisors N/A $20,400(2) $6,000(3) N/A
- ---------------------------------------------------------------------------------------------------------------
<FN>
1 These fees were for agreed upon procedures with respect to rating on the Preferred Shares.
2 These fees were for AIMR-PPS Verification services.
3 These fees were for tax return preparation.
</FN>
All of the services in the table above were pre-approved by the Audit Committee.
Page 12
OTHER COMMITTEES
The Board of Trustees of the Funds has three other standing committees:
the Executive Committee (and Dividend and Pricing Committee), the Nominating and
Governance Committee and the Valuation Committee. The Executive Committee, which
meets between Board meetings, is authorized to exercise all powers of and to act
in the place of the Board of Trustees to the extent permitted by each Fund's
Declaration of Trust and By-Laws. The members of the Executive Committee also
serve as a special committee of the Board of Trustees 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 declaration and setting of dividends
and the issuance and sale, through an underwritten public offering, of the
shares of each Fund and all other such matters relating to such financing,
including determining the price at which such shares are to be sold and approval
of the final terms of the underwriting agreement, including approval of the
members of the underwriting syndicate. Messrs. Bowen and Kadlec are members of
the Executive Committee. The Executive Committee serving as the Dividend and
Pricing Committee met a total of sixteen times during the fiscal year ended May
31, 2004. Each Fund's Executive Committee met to authorize the Fund's initial
public offering of shares as well as for each dividend declaration.
Each Fund's Nominating and Governance Committee (formerly the Nominating
Committee) (the "Committee") is composed entirely of Trustees who are not
"interested persons" (as that term is defined in the 1940 Act) of each Fund and
who are "Independent Trustees" within the meaning of the listing standards of
the American and New York Stock Exchanges. Messrs. Erickson, Kadlec, Nielson and
Oster are members of the Committee. The purpose of the Committee is to oversee
matters related to the nomination of trustees and as necessary, the corporate
governance of each Fund. The Committee is responsible for, among other things,
seeking, identifying and nominating qualified candidates for election or
appointment as trustees in the event of a vacancy, consistent with criteria
approved by the Board, for the next annual meeting of shareholders; evaluating
Board performance and processes; reviewing Board committee assignments; and, to
the extent necessary or desirable, establishing corporate governance guidelines
and procedures. The committee operates under a written charter adopted and
approved by the Board, a copy of which is available on the Funds' website at
www.ftportfolios.com. The Committee did not meet during the fiscal year ended
May 31, 2004.
If there is no vacancy on the Board, the Board will not actively seek
recommendations from other parties, including shareholders. When a vacancy on
the Board occurs, the committee may seek recommendations for candidates from
those sources it deems appropriate in its discretion, including shareholders of
the Funds. The Committee may retain a search firm to identify candidates.
Shareholders of the Funds who wish to recommend a person for nomination as a
candidate for a position on the Funds' Board should mail such recommendation to
the Funds, attention W. Scott Jardine, 1001 Warrenville Road, Suite 300, Lisle,
Illinois 60532. Recommendations must include (a) evidence of Fund ownership of
the person or entity recommending the candidate (if a Fund shareholder); (b) a
full description of the proposed candidate's background, including their
education, experience, current employment and date of birth; (c) names and
addresses of at least three professional references for the candidate; (d)
information as to whether the candidate is an "interested person" (as such term
is defined in the 1940 Act) and such other information that may be considered to
impair the candidate's independence; and (e) any other information that may be
Page 13
helpful to the Committee in evaluating the candidate. 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
Committee is accepting recommendations, the recommendation will be forwarded to
the Chairperson of the Committee and outside counsel to the Independent
Trustees. Recommendations received at any other time will be kept on file until
such time as the Committee is accepting recommendations at which point they may
be considered for nomination.
In recruiting new trustees, the Committee seeks to recruit and retain
qualified independent trustees of high integrity, whose skills and experience
will enhance the Board's ability to effectively represent the interests of the
Funds' shareholders and oversee the wide range of regulatory and business issues
affecting the Funds. A candidate for trustee must meet certain basic
requirements, including relevant skills and experience, time availability and if
qualifying as a non- "interested person" candidate, independence from the Funds,
investment adviser or other service providers. The qualifications of a
particular candidate, however, may vary depending on the current composition of
the Board and the mix of skills and backgrounds of the incumbent trustees since
the Committee seeks to establish an effective Board with an appropriate range of
skills and experience, in the aggregate. In addition to relevant skills and
experience, all candidates must possess high standards of personal integrity
that are assessed on the basis of personal interviews, recommendations, or
direct knowledge by Committee members. 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
Committee evaluate persons recommended by a shareholder of the Funds on a basis
substantially different than that used for other persons recommended for the
same election or appointment of trustees. The Committee reserves the right to
make the final selection regarding the nomination of any trustees.
The Valuation Committee is responsible for the oversightof thepricing
procedures of the Funds. Messrs. Erickson, Kadlec and Oster are members of the
Valuation Committee. The Valuation Committee did not meet during the fiscal year
ended May 31, 2004.
ATTENDANCE AT ANNUAL SHAREHOLDER MEETINGS
The policy of the Board relating to attendance by Trustees at annual
meetings of the Funds is contained in the Funds' Nominating and Governance
Committee Charter, which is posted on the Funds' website at
www.ftportfolios.com.
INVESTMENT ADVISER AND ADMINISTRATOR
First Trust Advisors L.P., 1001 Warrenville Road, Suite 300, Lisle,
Illinois 60532, serves as the Funds' investment adviser. Four Corners Capital
Management, LLC, 633 W. Fifth Street, 49th Floor, Los Angeles, CA 90071, serves
as the investment sub-adviser to the First Trust/Four Corners Senior Floating
Rate Income Fund, Macquarie/First Trust Global Infrastructure/Utilities Dividend
& Income Fund, and First Trust/Four Corners Senior Floating Rate Income Fund II.
Macquarie Infrastructure Fund Adviser, LLC, 600 5th Avenue, 21st Floor, New
York, NY 10020, serves as the investment sub-adviser to the Macquarie/First
Trust Global Infrastructure/Utilities Dividend & Income Fund.
Page 14
PFPC acts as the Funds' administrator and accounting agent and is
located at 101 Federal Street, 6th Floor, Boston, Massachusetts 02110. PFPC is a
leading provider of full service mutual fund shareholder and record keeping
services. In addition to its mutual fund transfer agent and record keeping
service, PFPC provides complimentary services through its own subsidiary
business units.
SECTION 30(h) AND SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 30(h) of the 1940 Act and Section 16(a) of the 1934 Act require
the Funds' officers and Trustees, certain persons affiliated with First Trust
Advisors, and any sub-adviser and persons who beneficially own more than 10% of
each Fund's Shares to file reports of ownership and changes of ownership with
the SEC, the American Stock Exchange and the New York Stock Exchange and to
furnish the Funds with copies of all Section 16(a) forms they file. Except as
disclosed below, based solely upon its review of the copies of such forms
received by it and written representations from certain of such persons, the
Funds believe that during the fiscal year ended May 31, 2004, all such filing
requirements applicable to such persons were met. With respect to First Trust
Value Line(R) Dividend Fund, David McGarel, Senior Vice President of First Trust
Advisors, filed one Form 4 seven days late in connection with one transaction of
common shares of First Trust Value Line(R) Dividend Fund, on April 20, 2004. In
addition, with respect to Macquarie/First Trust Global Infrastructure/Utilities
Dividend & Income Fund, Ronald G. Palmer, Jr., Chief Operations Officer of
Macquarie Infrastructure Fund Adviser, LLC, filed Form 3 late on May 5, 2004.
SHAREHOLDER PROPOSALS
To be considered for presentation at the annual meetings of shareholders
of the Funds to be held in 2005, a shareholder proposal submitted pursuant to
Rule 14a-8 of the 1934 Act must be received at the offices of the Fund at 1001
Warrenville Road, Suite 300, Lisle, Illinois 60532, not later than May 12, 2005.
A shareholder wishing to provide notice in the manner prescribed by Rule
14a-4(c)(1) of a proposal submitted outside of the process of Rule 14a-8 must
submit such written notice to the Fund not later than July 15, 2005. Timely
submission of a proposal does not mean that such proposal will be included in a
proxy statement.
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 chair of the Nominating and
Governance Committee and the outside counsel to the Independent Trustees for
further distribution as deemed appropriate by such persons.
FISCAL YEAR
Each Fund's first fiscal year end was May 31, 2004.
Page 15
ANNUAL REPORT DELIVERY
Annual reports will be sent to shareholders of record of each Fund
following the Funds' fiscal year end. Each Fund will furnish, without charge, a
copy of its annual report and/or semi-annual report as available upon request.
Such written or oral requests should be directed to the Fund at 1001 Warrenville
Road, Suite 300, Lisle, Illinois 60532 or by calling 1-800-988-5891.
Please note that only one annual report or proxy statement may be
delivered to two or more shareholders of the Fund who share an address, unless
the Fund has received instructions to the contrary. To request a separate copy
of an 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
Fund at the address and phone number set forth above.
GENERAL
A list of shareholders entitled to be present and to vote at the Meeting
will be available at the offices of the Funds, 1001 Warrenville Road, Suite 300,
Lisle, Illinois 60532, for inspection by any shareholder during regular business
hours beginning ten days prior to the date of the Meeting.
Failure of a quorum to be present at the Meeting will necessitate
adjournment and will subject the Funds to additional expense. The persons named
in the enclosed proxy may also move for an adjournment of the Meeting to permit
further solicitation of proxies with respect to the proposal if they determine
that adjournment and further solicitation is reasonable and in the best
interests of the shareholders. Under the Funds' By-Laws, an adjournment of a
meeting requires the affirmative vote of a majority of the shares present in
person or represented by proxy at the Meeting.
OTHER MATTERS TO COME BEFORE THE MEETING
No business other than the matters described above is expected to come
before the Meetings, but should any other matter requiring a vote of
shareholders arise, including any question as to an adjournment or postponement
of a Meeting, the persons named on the enclosed proxy card will vote thereon
according to their best judgment in the interests of the Funds.
August 13, 2004
- --------------------------------------------------------------------------------
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED TO COMPLETE, SIGN, DATE AND
RETURN THE PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
- --------------------------------------------------------------------------------
Page 16
EXHIBIT A
AUDIT COMMITTEE CHARTER
I. PURPOSE.
The Audit Committee (the "Committee ") is appointed by the Boards of
Trustees (the "Boards ") of investment companies (the "Funds ") advised by First
Trust Advisors L.P. ("Fund Management") for the following purposes:
A. to oversee the accounting and financial reporting processes of the
Fund and its internal controls and, as the Audit Committee deems appropriate, to
inquire into the internal controls of certain third-party service providers;
B. to oversee the quality and integrity of the Fund's financial
statements and the independent audit thereof;
C. to oversee, or, as appropriate, assist Board oversight of, the Fund's
compliance with legal and regulatory requirements that relate to the Fund's
accounting and financial reporting, internal controls and independent audits;
and
D. to approve, prior to the appointment, the engagement of the 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 (applicable to closed-end funds
advised by First Trust Advisors L.P.).
1. The Committee shall be composed of at least three members, all
of whom shall be trustees of the Funds. Each member of the Committee, and a
Committee chairperson, shall be appointed by the Board on the recommendation of
the Nominating and Governance Committee.
2. Each member of the Committee shall be independent of the Fund
and must be free of any relationship that, in the opinion of the Board, would
interfere with the exercise of independent judgment as a Committee member. In
particular, each member must meet the independence and experience requirements
of the New York Stock Exchange, the American Stock Exchange, Section I OA of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 1
OA-3 thereunder, and other applicable rules and regulations of the Securities
and Exchange Commission ("SEC"). Included in the foregoing is the requirement
that no member of the Committee be an "interested person" of the Fund within the
meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended
(the "1940 Act").
3. At least one member of the Committee shall have been determined
by the Board, exercising its business judgment, to qualify as an "audit
committee financial expert" as defined by the SEC.
A-1
4. 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. In addition, at least one member of the
Committee shall have been determined by the Board, exercising its business
judgment, to have "accounting or financial management expertise," as required by
the New York Stock Exchange. Such member may, but need not be, the same person
as the Committee's "audit committee financial expert."
B. Frequency of Meetings.
The Committee will ordinarily meet once for every regular meeting of the
Board. The Committee may meet more or less frequently as appropriate, but no
less than twice per year.
C. Term of Office.
Committee members shall serve until they resign or are removed or
replaced by the Board.
III. RESPONSIBILITIES.
A. With respect to Independent Auditors:
1. The Committee shall be responsible for the appointment or
replacement (subject if applicable, to Board and/or shareholder ratification),
compensation, retention and oversight of the work of any registered public
accounting firm engaged (including resolution of disagreements between
management and the auditor regarding financial reporting) for the purpose of
preparing or issuing an audit report or performing other audit, review or attest
services for the Funds ("External Auditors "). The External Auditors shall
report directly to the Committee.
2. The Committee shall meet with the External Auditors and Fund
Management to review the scope, fees, audit plans and staffing of the proposed
audits for each fiscal year. At the conclusion of the audit, the Committee shall
review such audit results, including the External Auditor's evaluation of the
Fund's financial and internal controls, any comments or recommendations of the
External Auditors, any audit problems or difficulties and Fund Management's
response, including any restrictions on the scope of the External Auditor's
activities or on access to requested information, any significant disagreements
with Fund Management, any accounting adjustments noted or proposed by the
auditor but not made by the Fund, any communications between the audit team and
the audit firm's national office regarding auditing or accounting issues
presented by the engagement, any significant changes required from the
originally planned audit programs and any adjustments to the financial
statements recommended by the auditors.
3. The Committee shall meet with the External Auditors in the
absence of Fund Management, as necessary.
4. The Committee shall pre-approve all audit services and permitted
non-audit services (including the fees and terms thereof) to be performed for
the Fund by its External Auditors. The Chairman of the Committee is authorized
A-2
to give such pre-approvals on behalf of the Committee, and shall report any such
pre-approval to the full Committee.
5. The Committee shall approve the External Auditor's engagements
for non-audit services with the Fund Management (not including a sub-adviser
whose role is primarily portfolio management and is sub-contracted or overseen
by another investment adviser) and any entity controlling, controlled by or
under common control with the investment adviser that provides ongoing services
to the Fund, if the engagement relates directly to the operations and financial
reporting of the Fund, subject to the de minimis exceptions for non-audit
services described in Rule 2-01 of Regulation S-X.
6. If the External Auditor has provided non-audit services to Fund
Management (other than any sub-adviser whose role is primarily portfolio
management and is sub-contracted with or overseen by another investment adviser)
and any entity controlling, controlled by or under common control with the
investment adviser that provides ongoing services to the Fund that were not
pre-approved pursuant to the de minimis exception, the Committee shall consider
whether the provision of such non-audit services is compatible with the External
Auditor's independence.
7. The Committee shall obtain and review a report from the External
Auditors at least annually (including a formal written statement delineating all
relationships between the auditors and the Fund consistent with Independent
Standards Board Standard I as may be amended, restated, modified or replaced)
regarding (a) the External Auditor's internal quality-control procedures; (b)
any material issues raised by the most recent internal quality-control review,
or peer review, of the firm, or by an inquiry or investigation by governmental
or professional authorities within the preceding five years, respecting one or
more independent audits carried out by the firm; (c) any steps taken to deal
with any such issues; and (d) the External Auditor's independence, including all
relationships between the External Auditors and the Fund and its affiliates; and
evaluating the qualifications, performance and independence of the External
Auditor, including their membership in the SEC practice section of the AICPA and
their compliance with all applicable requirements for independence and peer
review, and a review and evaluation of the lead partner, taking into account the
opinions of management and discussing such reports with the External Auditors.
The Committee shall present its conclusions with respect to the External Auditor
to the Board.
8. The Committee shall review reports and other information provided
to it by the External Auditors regarding any illegal acts that they should
discover (whether or not perceived to have a material effect on the Fund's
financial statements), in accordance with and as required by Section I OA(b) of
the Exchange Act.
9. The Committee shall ensure the rotation of the lead (or
concurring) audit partner having primary responsibility for the audit and the
audit partner responsible for reviewing the audit as required by law, and
further considering the rotation of the independent auditor firm itself.
10. The Committee shall establish and recommend to the Board for
ratification a policy of the Fund the hiring of employees or former employees of
the External Auditor who participated in the audits of the Funds' financial
statements by the Fund or Fund Management.
A-3
11. The Committee shall take (and, where appropriate, recommend that
the Board take) appropriate action to oversee the independence of the External
Auditor.
12. The Committee shall report regularly to the Board on the results
of the activities of the Committee, including any issues that arise with respect
to the quality or integrity of the Funds' financial statements, the Funds'
compliance with legal or regulatory requirements, the performance and
independence of the Funds' External Auditors, or the performance of the internal
audit function, if any.
B. With respect to Fund Financial Statements:
1. The Committee shall review and discuss with Fund Management and
the External Auditors the annual audited financial statements and periodic
financial statements of the Fund, major issues regarding accounting and auditing
principles and. practices, and the Fund's disclosures in its periodic reports
under "Management's Discussion and Analysis."
2. The Committee shall review and discuss reports, both written and
oral, from the External Auditors or Fund Management regarding (a) all critical
accounting policies and practices to be used; (b) all alternative treatments of
financial information within generally accepted accounting principles for
policies and practices that have been discussed with management, including the
ramifications of the use of such alternative treatments and disclosures and the
treatment preferred by the External Auditors; (c) other material written
communications between the External Auditors and management, such as any
management letter or schedule of unadjusted differences; and (d) all non-audit
services provided to any entity in the investment company complex (as defined in
Rule 2-01 of Regulation S-X) that were not pre-approved by the Committee.
3. The Committee shall review disclosures made to the Committee by
the Fund's principal executive officer and principal financial officer during
their certification process for the Fund's periodic reports about any
significant deficiencies in the design or operation of internal controls or
material weaknesses therein and any fraud involving management or other
employees who have a significant role in the Fund's internal controls.
4. The Committee shall discuss with the External Auditors the
matters required to be discussed by Statement of Auditing Standards (SAS) No.
90, Audit Committee Communications (which amended SAS 61, Communication with
Audit Committees), that arise during the auditor's review of the Fund's
financial statements.
5. The Committee shall review and discuss with management and the
External Auditors (a) significant financial reporting issues and judgments made
in connection with the preparation and presentation of the Funds' financial
statements, including any significant changes in the Funds' selection or
application of accounting principles and any major issues as to the adequacy of
the Funds' internal controls and any special audit steps adopted in light of
material control deficiencies, and (b) analyses prepared by Fund Management or
the External Auditor 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.
A-4
6. The Committee shall review and discuss with management and the
External Auditors the effect of regulatory and accounting initiatives on the
Funds' financial statements.
7. The Committee shall receive and review periodic reports
(including a formal written statement delineating all relationships between the
auditors and the Funds, consistent with the Independence Standards Board
Standard 1) from the firms of External Auditors regarding their independence,
their membership in the SEC practice section of the AICPA and their compliance
with all applicable requirements for independence and peer review.
8. The Committee shall discuss with Fund Management the Fund's press
releases regarding financial results and dividends, as well as financial
information and earnings guidance provided to analysts and rating agencies. This
discussion may be done generally, consisting of discussing the types of
information to be disclosed and the types of presentations to be made. The
Chairman of the Committee shall be authorized to have these discussions with
management on behalf of the Committee.
9. The Committee shall discuss with Fund Management the Funds' major
financial risk exposures and the steps Fund Management has taken to monitor and
control these exposures, including the Funds' risk assessment and risk
management policies and guidelines. In fulfilling its obligations under this
paragraph, the Committee may, as applicable, review in a general manner the
processes other Board committees have in place with respect to risk assessment
and risk management.
C. With respect to serving as a Qualified Legal Compliance
Committee:
I. The Committee shall serve as the Fund's "qualified legal
compliance committee" ("QLCC ") within the meaning of the rules of the SEC and,
in that regard, the following shall apply.
i. The Committee shall receive and retain, in confidence, reports of
evidence of a (a) material violation of any federal or state securities laws,
(b) a material breach of a fiduciary duty arising under any federal or state
laws or (c) a similar material violation of any federal or state law by the Fund
or any of its officers, trustees, employees or agents (a "Report of Material
Violation "). Reports of Material Violation may be addressed to the Funds,
attention W. Scott Jardine, at the address of the principal offices of the
Funds, which currently is 1001 Warrenville Road, Suite 300, Lisle, Illinois
60532.
ii. Upon receipt of a report of a Report of Material Violation, the
Committee shall (a) inform the Fund's chief legal officer and chief executive
officer (or the equivalents thereof) of the report (unless the Committee
determines it would be futile to do so), and (b) determine whether an
investigation is necessary.
iii. After considering the Report of a Material Violation, the
Committee shall do the following if it deems an investigation necessary:
o Notify the full Board;
o Initiate an investigation, which may be conducted either
by the chief legal officer (or the equivalent thereof)
A-5
of the Fund or by outside attorneys; and
o Retain such additional expert personnel as the Committee
deem necessary.
iv. At the conclusion of any such investigation, the Committee shall:
o Recommend, by majority vote, that the Fund implement an
appropriate response to evidence of a material violation;
and
o Inform the chief legal officer and the chief executive
officer (or the equivalents thereof) and the Board of
the results of any such investigation and the appropriate
remedial measures to be adopted.
2. The Committee shall take all other action that it deems
appropriate in the event that the Fund fails in any material respect to
implement an appropriate response that the Committee, as the QLCC, has
recommended the Fund take.
D. Other Responsibilities:
1. The Committee shall receive, retain and handle complaints
received by the Fund regarding accounting, internal accounting controls, or
auditing matters from any person, whether or not an employee of the Fund or Fund
Management, and shall receive submissions of concerns regarding questionable
accounting or auditing matters by employees of the Fund and Fund Management,
administrator, principal underwriter, or any other provider of
accounting-related services for the Funds. All such complaints and concerns
shall be handled in accordance with the Committee's procedures for operating as
a QLCC, outlined in III.C above.
2. The Committee shall review, with fund counsel and independent
counsel to the Board, any legal matters that could have significant impact on
the Fund's financial statements or compliance policies and the findings of any
examination by a regulatory agency as they relate to financial statement
matters.
3. The Committee shall review and reassess the adequacy of this
charter on an annual basis, if necessary, and provide a recommendation to the
Board for approval of any proposed changes deemed necessary or advisable by the
Committee.
4. The Committee shall evaluate on an annual basis the performance
of the Committee.
5. The Committee shall review with the External auditors and with
Fund Management the adequacy and effectiveness of the Fund's internal accounting
and financial controls.
6. The Committee shall discuss with Fund Management and the External
Auditor any correspondence with regulators or governmental agencies that raise
material issues regarding the Funds' financial statements or accounting
policies.
A-6
7. The Committee shall obtain any reports from Fund Management with
respect to the funds' policies and procedures regarding compliance with
applicable laws and regulations. The Committee shall perform other special
reviews, investigations or oversight functions as requested by the Board and
shall receive and review periodic or special reports issued on
exposure/controls, irregularities and control failures related to the Funds.
8. The Committee shall prepare any report of the Committee required
to be included in a proxy statement for the Fund.
9. The Committee may request any officer or employee of the Fund or
Fund Management, counsel to the independent trustees, the Fund's outside counsel
and External Auditor to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee.
10. The Committee shall perform such other functions and to have such
powers as may be necessary or appropriate in the efficient and lawful discharge
of the powers.
IV. AUTHORITY TO ENGAGE ADVISERS.
The Committee may engage independent counsel and other advisers, as it
determines necessary to carry out its duties. The Committee may request any
officer or employee of the Fund, First Trust Advisors, the Fund's External
Auditors or outside counsel to attend a meeting of the Committee or to meet with
any members of, or, consultants to, the Committee. The Fund's External Auditors
and internal auditors shall have unrestricted accessibility at any time to
Committee members.
V. FUNDING PROVISIONS.
A. The Committee shall determine the:
1. Compensation to any registered public accounting firm engaged for
the purpose of preparing or issuing an audit report or performing other audit,
review or attest services for the 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 Fund
or Fund Management.
VI. MANAGEMENT AND EXTERNAL AUDITOR'S RESPONSIBILITIES.
A. Fund Management has the primary responsibility for establishing
and maintaining systems for accounting, reporting, disclosure and internal
controls. The External Auditor has the primary responsibility to plan and
implement an audit, with proper consideration given to the accounting, reporting
and internal controls. Each External Auditor 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
Auditor's ultimate accountability is to the Board and the Committee, as
representatives of shareholders.
A-7
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 generally accepted accounting principles. Nor is it
the duty of the Committee to assure compliance with laws and regulations and/or
the Funds' Code of Ethics.
C. In discharging its responsibilities, the Committee and its
members are entitled to rely on information, opinions, reports, or statements,
including financial statements and other financial data, if prepared or
presented by: (1) one or more officers of the Fund; (2) legal counsel, public
accountants, or other persons as to matters the trustee reasonably believes are
within the person's professional or expert competence; or (3) a Board committee
of which the trustee is not a member.
A-8
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DETACH HERE ZFTIF2
PROXY
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND
PROXY SOLICITED BY THE BOARD OF TRUSTEES
ANNUAL MEETING ON SEPTEMBER 13, 2004
The undersigned holder of shares of the First Trust/Four Corners Senior
Floating Rate Income Fund (the "Fund"), a Massachusetts business trust, hereby
appoints W. Scott Jardine, Mark R. Bradley and James A. Bowen as attorneys and
proxies for the undersigned, with full powers of substitution and revocation, to
represent the undersigned and to vote on behalf of the undersigned all shares of
the Fund that the undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Fund (the "Meeting") to be held at the offices of First
Trust Advisors L.P., 1001 Warrenville Road, Suite 300, Lisle, IL 60532, at 10:00
a.m. Central time on the date indicated above, and any adjournment or
adjournments thereof. The undersigned hereby acknowledges receipt of the Notice
of Annual Meeting and Proxy Statement dated August 13, 2004, 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. 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.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
___________________________________ ________________________________
___________________________________ ________________________________
___________________________________ ________________________________
FIRST TRUST/FOUR CORNERS SENIOR
FLOATING RATE INCOME FUND
C/O PFPC INC.
P.O. BOX 8586
EDISON, NJ 08818-8586
DETACH HERE ZFTIF1
[X] Please mark | 3642
votes as in |
this example. --------
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 EACH NOMINEE SET FORTH.
1. To elect three Trustees by holders of Common and Preferred Shares, voting
together as a single class.
(01) James A. Bowen, (02) Richard E. Erickson, (03) Neil B. Nielson
FOR WITHHOLD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES
[ ] __________________________________________
INSTRUCTION: To withhold authority to vote
for any individual nominee, write the nominee's
name in the space provided above.
Mark box at right if an address change or comment
has been noted on the reverse side of this card. [ ]
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
NOTE: Please sign exactly as your name appears on this
Proxy. If joint owners, EITHER may sign this Proxy. When
signing as attorney, executor, administrator, trustee,
guardian or corporate officer, please give full title.
Signature:_______________ Date:_______ Signature:_______________ Date:_______