As filed with the Securities and Exchange Commission on March 22, 2010.
1933 Act File No. 333-124146
1940 Act File No. 811-21756
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 STRATEGIC HIGH INCOME FUND
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
ENERGY INCOME AND GROWTH FUND
FIRST TRUST ENHANCED EQUITY INCOME FUND
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
FIRST TRUST/FIDAC MORTGAGE INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND II
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND III
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST ACTIVE DIVIDEND INCOME FUND
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
March 18, 2010
Dear Shareholder:
The accompanying materials relate to the Joint Annual Meetings of
Shareholders (collectively, the "Meeting") of Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund, Energy Income and Growth Fund,
First Trust Enhanced Equity Income Fund, First Trust/Aberdeen Global Opportunity
Income Fund, First Trust/FIDAC Mortgage Income Fund, First Trust Strategic High
Income Fund, First Trust Strategic High Income Fund II, First Trust/Aberdeen
Emerging Opportunity Fund, First Trust Strategic High Income Fund III, First
Trust Specialty Finance and Financial Opportunities Fund and First Trust Active
Dividend Income Fund (each a "Fund" and collectively, the "Funds"). The Meeting
will be held at the offices of First Trust Advisors L.P., 120 East Liberty
Drive, Suite 400, Wheaton, Illinois 60187, on Wednesday, April 14, 2010, at 4:00
p.m. Central Time.
At the Meeting, you will be asked to vote on a proposal to elect
certain of the Trustees of your Fund (the "Proposal") and to transact such other
business as may properly come before the Meeting and any adjournments or
postponements thereof. The Proposal is described in the accompanying Notice of
Joint Annual Meetings of Shareholders and Joint Proxy Statement.
Your participation at the Meeting is very important. If you cannot
attend the Meeting, you may participate by proxy. As a Shareholder, you cast one
vote for each share of a Fund that you own and a proportionate fractional vote
for any fraction of a share that you own. Please take a few moments to read the
enclosed materials and then cast your vote on the enclosed proxy card.
Voting takes only a few minutes. Each Shareholder's vote is important.
Your prompt response will be much appreciated.
After you have voted on the Proposal, please be sure to sign your proxy
card and return it in the enclosed postage-paid envelope.
We appreciate your participation in this important Meeting.
Thank you.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Board
|
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and will avoid the time and expense to 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
|
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
ENERGY INCOME AND GROWTH FUND
FIRST TRUST ENHANCED EQUITY INCOME FUND
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
FIRST TRUST/FIDAC MORTGAGE INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND II
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND III
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST ACTIVE DIVIDEND INCOME FUND
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
NOTICE OF JOINT ANNUAL MEETINGS OF SHAREHOLDERS
To be held on April 14, 2010
March 18, 2010
To the Shareholders of the above Funds:
Notice is hereby given that the Joint Annual Meetings of Shareholders
(collectively, the "Meeting") of Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund, Energy Income and Growth Fund,
First Trust Enhanced Equity Income Fund, First Trust/Aberdeen Global Opportunity
Income Fund, First Trust/FIDAC Mortgage Income Fund, First Trust Strategic High
Income Fund, First Trust Strategic High Income Fund II, First Trust/Aberdeen
Emerging Opportunity Fund, First Trust Strategic High Income Fund III, First
Trust Specialty Finance and Financial Opportunities Fund and First Trust Active
Dividend Income Fund (each a "Fund" and collectively, the "Funds"), each a
Massachusetts business trust, will be held at the offices of First Trust
Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, on
Wednesday, April 14, 2010, at 4:00 p.m. Central Time, for the following
purposes:
1. To elect two Trustees (the Class III Trustees) of each Fund.
2. To transact such other business as may properly come before the
Meeting or any adjournments or postponements thereof.
The Board of Trustees has fixed the close of business on January 25,
2010 as the record date for the determination of Shareholders entitled to notice
of and to vote at the Meeting and any adjournments or postponements thereof.
By order of the Board of Trustees,
/s/ W. Scott Jardine
W. Scott Jardine
Secretary
|
SHAREHOLDERS 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
DOES NOT REQUIRE POSTAGE IF MAILED IN THE CONTINENTAL UNITED STATES.
INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON THE INSIDE
COVER OF THIS PROXY STATEMENT.
This page intentionally left blank.
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
ENERGY INCOME AND GROWTH FUND
FIRST TRUST ENHANCED EQUITY INCOME FUND
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
FIRST TRUST/FIDAC MORTGAGE INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND II
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND III
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST ACTIVE DIVIDEND INCOME FUND
JOINT ANNUAL MEETINGS OF SHAREHOLDERS
April 14, 2010
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
JOINT PROXY STATEMENT
March 18, 2010
This Joint Proxy Statement and the enclosed proxy card will first be
mailed to shareholders on or about March 19, 2010.
This Joint Proxy Statement is furnished in connection with the
solicitation of proxies by the Boards of Trustees of Macquarie/First Trust
Global Infrastructure/Utilities Dividend & Income Fund, Energy Income and Growth
Fund, First Trust Enhanced Equity Income Fund, First Trust/Aberdeen Global
Opportunity Income Fund, First Trust/FIDAC Mortgage Income Fund, First Trust
Strategic High Income Fund, First Trust Strategic High Income Fund II, First
Trust/Aberdeen Emerging Opportunity Fund, First Trust Strategic High Income Fund
III, First Trust Specialty Finance and Financial Opportunities Fund and First
Trust Active Dividend Income Fund (each a "Fund" and collectively, the "Funds"),
each a Massachusetts business trust, for use at the Annual Meetings of
Shareholders of the Funds to be held on Wednesday, April 14, 2010, at 4:00 p.m.
Central Time, at the offices of First Trust Advisors L.P., 120 East Liberty
Drive, Suite 400, Wheaton, Illinois 60187, and at any adjournments or
postponements thereof (collectively, the "Meeting"). A Notice of Joint Annual
Meetings of Shareholders and a proxy card accompany this Joint Proxy Statement.
The Boards of Trustees of the Funds have determined that the use of this Joint
Proxy Statement is in the best interests of each Fund in light of the same
matter being considered and voted on by shareholders.
Proxy solicitations will be made, beginning on or about March 19, 2010,
primarily by mail. However, proxy solicitations may also be made by telephone or
personal interviews conducted by (i) officers of each Fund; (ii) First Trust
Advisors L.P. ("First Trust Advisors" or the "Advisor"), the investment advisor
of the Funds; (iii) PNC Global Investment Servicing (U.S.) Inc. ("PNC"), the
administrator, accounting agent and transfer agent of the Funds and a
majority-owned subsidiary of The PNC Financial Services Group, Inc.; or (iv) any
agents or affiliates of the foregoing entities.
The costs incurred in connection with the preparation of this Joint
Proxy Statement and its enclosures will be paid by the Funds. The Funds will
also reimburse brokerage firms and others for their expenses in forwarding
solicitation material to the beneficial owners of Fund shares.
The close of business on January 25, 2010 has been fixed as the record
date (the "Record Date") for the determination of shareholders entitled to
notice of and to vote at the Meeting.
Each Fund has one class of shares of beneficial interest, par value
$0.01 per share, known as common shares ("Shares").
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SHAREHOLDER MEETING TO BE HELD ON APRIL 14, 2010. This Joint Proxy Statement is
available on the Internet at http://www.ftportfolios.com/common/cef/productinfo/
common/ProxyVoting4.14.2010. Each Fund's most recent annual and semi-annual
reports are also available on the Internet at http://www.ftportfolios.com. To
find a report, select your Fund under the "Closed-End Funds" tab, select the
"News & Literature" link, and go to the "Monthly/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 the Advisor at 120 East Liberty
Drive, Suite 400, Wheaton, Illinois 60187, or call (800) 988-5891.
You may call (800) 988-5891 for information on how to obtain directions
to be able to attend the Meeting and vote in person.
In order that your Shares may be represented at the Meeting, you are
requested to:
o indicate your instructions on the proxy card;
o date and sign the proxy card;
o mail the proxy card promptly in the enclosed envelope which requires
no postage if mailed in the continental United States; and
o allow sufficient time for the proxy card to be received by 4:00 p.m.
Central Time, on Wednesday, April 14, 2010. (However, proxies
received after this date may still be voted in the event the Meeting
is adjourned or postponed to a later date.)
- 2 -
VOTING
As described further in the proposal, for each Fund, the affirmative
vote of a plurality of the Shares present and entitled to vote at the Meeting
will be required to elect the specified nominees as Class III Trustees of that
Fund provided a quorum is present. Abstentions and broker non-votes will have no
effect on the approval of the proposal.
If the enclosed proxy card is properly executed and returned in time to
be voted at the Meeting, the Fund Shares represented thereby will be voted in
accordance with the instructions marked thereon, or, if no instructions are
marked thereon, will be voted in the discretion of the persons named on the
proxy card. Accordingly, unless instructions to the contrary are marked thereon,
a properly executed and returned proxy will be voted FOR the election of the
nominees as Class III Trustees and at the discretion of the named proxies on any
other matters that may properly come before the Meeting, as deemed appropriate.
Any shareholder who has given a proxy has the right to revoke it at any time
prior to its exercise either by attending the Meeting and voting his or her
Shares in person, or by timely submitting a letter of revocation or a
later-dated proxy to the applicable Fund at its address above. A list of
shareholders entitled to notice of and to be present and to vote at the Meeting
will be available at the offices of the Funds, 120 East Liberty Drive, Suite
400, Wheaton, Illinois 60187, for inspection by any shareholder during regular
business hours prior to the Meeting. Shareholders will need to show valid
identification and proof of Share ownership to be admitted to the Meeting or to
inspect the list of shareholders.
Under the By-Laws of each Fund, a quorum is constituted by the presence
in person or by proxy of the holders of thirty-three and one-third percent
(33-1/3%) of the voting power of the outstanding Shares entitled to vote on a
matter. For the purposes of establishing whether a quorum is present, all Shares
present and entitled to vote, including abstentions and broker non-votes (i.e.,
Shares held by brokers or nominees as to which (i) instructions have not been
received from the beneficial owners or the persons entitled to vote and (ii) the
broker or nominee does not have discretionary voting power on a particular
matter), shall be counted. Any meeting of shareholders may be postponed prior to
the meeting with notice to the shareholders entitled to vote at that meeting.
Any meeting of shareholders may, by action of the chairman of the meeting, be
adjourned to permit further solicitation of proxies without further notice with
respect to one or more matters to be considered at such meeting to a designated
time and place, whether or not a quorum is present with respect to such matter.
In addition, upon motion of the chairman of the meeting, the question of
adjournment may be submitted to a vote of the shareholders, and in that case,
any adjournment must be approved by the vote of holders of a majority of the
Shares present and entitled to vote with respect to the matter or matters
adjourned, and without further notice. Unless a proxy is otherwise limited in
this regard, any Shares present and entitled to vote at a meeting, including
broker non-votes, may, at the discretion of the proxies named therein, be voted
in favor of such an adjournment.
- 3 -
OUTSTANDING SHARES
On the Record Date, each Fund had the following number of Shares
outstanding:
------------------------------------------------------------------------------------- ------------------------
SHARES
FUND OUTSTANDING
------------------------------------------------------------------------------------- ------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND 9,077,963
------------------------------------------------------------------------------------- ------------------------
ENERGY INCOME AND GROWTH FUND 6,790,596
------------------------------------------------------------------------------------- ------------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND 19,973,164
------------------------------------------------------------------------------------- ------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND 17,365,236
------------------------------------------------------------------------------------- ------------------------
FIRST TRUST/FIDAC MORTGAGE INCOME FUND 4,048,993
------------------------------------------------------------------------------------- ------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND 9,150,594
------------------------------------------------------------------------------------- ------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II 9,533,776
------------------------------------------------------------------------------------- ------------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND 5,382,069
------------------------------------------------------------------------------------- ------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND III 9,156,182
------------------------------------------------------------------------------------- ------------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND 14,231,133
------------------------------------------------------------------------------------- ------------------------
FIRST TRUST ACTIVE DIVIDEND INCOME FUND 7,555,457
------------------------------------------------------------------------------------- ------------------------
|
Shares of Energy Income and Growth Fund are listed on the NYSE Amex
under the ticker symbol FEN. Shares of the other Funds are listed on the New
York Stock Exchange under the following ticker symbols: Macquarie/First Trust
Global Infrastructure/Utilities Dividend & Income Fund (MFD); First Trust
Enhanced Equity Income Fund (FFA); First Trust/Aberdeen Global Opportunity
Income Fund (FAM); First Trust/FIDAC Mortgage Income Fund (FMY); First Trust
Strategic High Income Fund (FHI); First Trust Strategic High Income Fund II
(FHY); First Trust/Aberdeen Emerging Opportunity Fund (FEO); First Trust
Strategic High Income Fund III (FHO); First Trust Specialty Finance and
Financial Opportunities Fund (FGB); and First Trust Active Dividend Income Fund
(FAV).
Shareholders of record on the Record Date are entitled to one vote for
each Share the shareholder owns and a proportionate fractional vote for any
fraction of a Share the shareholder owns.
To the knowledge of the Board of Trustees, as of the Record Date, no
single shareholder or "group" (as that term is used in Section 13(d) of the
Securities Exchange Act of 1934 (the "1934 Act")) beneficially owned more than
5% of any Fund's outstanding Shares, except as described in the following table.
Information as to beneficial ownership of Shares, including percentage of
outstanding Shares beneficially owned, is based on reports filed with the
Securities and Exchange Commission ("SEC") by such holders and securities
position listing reports from The Depository Trust & Clearing Corporation as of
the Record Date. The Funds do not have any knowledge of the identity of the
ultimate beneficiaries of the Shares listed below. A control person is one who
owns, either directly or indirectly, more than 25% of the voting securities of a
Fund or acknowledges the existence of control.
- 4 -
BENEFICIAL OWNERSHIP OF SHARES
-------------------------------------------------------- -------------------------------- ------------------------------------
NAME AND ADDRESS SHARES BENEFICIALLY OWNED % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER BENEFICIALLY OWNED
------------------------------------------------------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND:
------------------------------------------------------------------------------------------------------------------------------
Charles Schwab & Co., Inc. 554,504 Shares 6.11%
2423 E. Lincoln Drive
Phoenix, AZ 85016
-------------------------------------------------------- -------------------------------- ------------------------------------
First Clearing, LLC
One North Jefferson Street 600,165 Shares 6.61%
St. Louis, MO 63103
-------------------------------------------------------- -------------------------------- ------------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
101 Hudson Street, 8th Floor 1,518,247 Shares 16.72%
Jersey City, NJ 07302
-------------------------------------------------------- -------------------------------- ------------------------------------
National Financial Services LLC
200 Liberty Street 632,547 Shares 6.97%
New York, NY 10281
-------------------------------------------------------- -------------------------------- ------------------------------------
Raymond James & Associates, Inc.
880 Carillon Parkway
P.O. Box 12749 600,783 Shares 6.62%
St. Petersburg, FL 33716
-------------------------------------------------------- -------------------------------- ------------------------------------
RBC Capital Markets Corporation
510 Marquette Ave. South 547,058 Shares 6.03%
Minneapolis, MN 55402
------------------------------------------------------------------------------------------------------------------------------
ENERGY INCOME AND GROWTH FUND:
-------------------------------------------------------- -------------------------------- ------------------------------------
Charles Schwab & Co., Inc. 487,939 Shares 7.19%
2423 E. Lincoln Drive
Phoenix, AZ 85016
-------------------------------------------------------- -------------------------------- ------------------------------------
First Clearing, LLC
One North Jefferson Street 1,893,026 Shares 27.87%
St. Louis, MO 63103
-------------------------------------------------------- -------------------------------- ------------------------------------
National Financial Services LLC
200 Liberty Street 497,307 Shares 7.32%
New York, NY 10281
-------------------------------------------------------- -------------------------------- ------------------------------------
Pershing LLC
1 Pershing Plaza 543,400 Shares 8.00%
Jersey City, NJ 07399
------------------------------------------------------------------------------------------------------------------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND:
-------------------------------------------------------- -------------------------------- ------------------------------------
Wells Fargo and Company * 1,041,351 Shares 5.21%
420 Montgomery Street
San Francisco, CA 94104
-------------------------------------------------------- -------------------------------- ------------------------------------
First Clearing, LLC
One North Jefferson Street 6,377,217 Shares 31.93%
St. Louis, MO 63103
-------------------------------------------------------- -------------------------------- ------------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
101 Hudson Street, 8th Floor 1,247,094 Shares 6.24%
Jersey City, NJ 07302
-------------------------------------------------------- -------------------------------- ------------------------------------
Raymond James & Associates, Inc.
P.O. Box 14407 1,481,112 Shares 7.42%
St. Petersburg, FL 33733
-------------------------------------------------------- -------------------------------- ------------------------------------
The Bank of New York Mellon
525 William Penn Place 1,661,895 Shares 8.32%
Pittsburgh, PA 15259
------------------------------------------------------------------------------------------------------------------------------
* According to Schedule 13G dated January 19, 2010, the reporting persons have
sole voting power of 1,012,223 Shares, shared voting power of 21,288 Shares,
sole dispositive power of 1,027,363 Shares and shared dispositive power of
13,988 Shares.
- 5 -
|
------------------------------------------------------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND:
-------------------------------------------------------- -------------------------------- ------------------------------------
Charles Schwab & Co., Inc. 1,022,537 Shares 5.89%
2423 E. Lincoln Drive
Phoenix, AZ 85016
-------------------------------------------------------- -------------------------------- ------------------------------------
First Clearing, LLC
One North Jefferson Street 2,716,200 Shares 15.64%
St. Louis, MO 63103
-------------------------------------------------------- -------------------------------- ------------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
101 Hudson Street, 8th Floor 2,344,641 Shares 13.50%
Jersey City, NJ 07302
-------------------------------------------------------- -------------------------------- ------------------------------------
National Financial Services LLC
200 Liberty Street 1,394,796 Shares 8.03%
New York, NY 10281
-------------------------------------------------------- -------------------------------- ------------------------------------
Pershing LLC
1 Pershing Plaza 1,609,066 Shares 9.27%
Jersey City, NJ 07399
-------------------------------------------------------- -------------------------------- ------------------------------------
RBC Capital Markets Corporation
510 Marquette Ave. South 1,265,527 Shares 7.29%
Minneapolis, MN 55402
------------------------------------------------------------------------------------------------------------------------------
FIRST TRUST/FIDAC MORTGAGE INCOME FUND:
-------------------------------------------------------- -------------------------------- ------------------------------------
Sit Investment Associates, Inc. ** 525,300 Shares 12.97%
3300 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
-------------------------------------------------------- -------------------------------- ------------------------------------
First Clearing, LLC
One North Jefferson Street 531,160 Shares 13.12%
St. Louis, MO 63103
-------------------------------------------------------- -------------------------------- ------------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
101 Hudson Street, 8th Floor 426,368 Shares 10.53%
Jersey City, NJ 07302
-------------------------------------------------------- -------------------------------- ------------------------------------
National Financial Services LLC
200 Liberty Street 491,744 Shares 12.15%
New York, NY 10281
-------------------------------------------------------- -------------------------------- ------------------------------------
The Northern Trust Company
810 S. Canal Street 281,453 Shares 6.95%
Chicago, IL 60607
------------------------------------------------------------------------------------------------------------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND:
-------------------------------------------------------- -------------------------------- ------------------------------------
Charles Schwab & Co., Inc. 503,337 Shares 5.50%
2423 E. Lincoln Drive
Phoenix, AZ 85016
-------------------------------------------------------- -------------------------------- ------------------------------------
First Clearing, LLC
One North Jefferson Street 1,083,026 Shares 11.84%
St. Louis, MO 63103
-------------------------------------------------------- -------------------------------- ------------------------------------
National Financial Services LLC
200 Liberty Street 1,314,662 Shares 14.37%
New York, NY 10281
-------------------------------------------------------- -------------------------------- ------------------------------------
Pershing LLC
1 Pershing Plaza 556,908 Shares 6.09%
Jersey City, NJ 07399
------------------------------------------------------------------------------------------------------------------------------
** This information is based on the most recent Schedule 13G filed with the SEC
and does not necessarily reflect ownership as of the Record Date.
- 6 -
|
------------------------------------------------------------------------------------------------------------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND (CONTINUED):
-------------------------------------------------------- -------------------------------- ------------------------------------
RBC Capital Markets Corporation
510 Marquette Ave. South
Minneapolis, MN 55402 1,047,656 Shares 11.45%
------------------------------------------------------------------------------------------------------------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II:
-------------------------------------------------------- -------------------------------- ------------------------------------
First Clearing, LLC 1,582,787 Shares 16.60%
One North Jefferson Street
St. Louis, MO 63103
-------------------------------------------------------- -------------------------------- ------------------------------------
National Financial Services LLC
200 Liberty Street 784,931 Shares 8.23%
New York, NY 10281
-------------------------------------------------------- -------------------------------- ------------------------------------
Oppenheimer & Co. Inc. 545,934 Shares 5.73%
125 Broad Street, 15th Floor
New York, NY 10004
-------------------------------------------------------- -------------------------------- ------------------------------------
Pershing LLC
1 Pershing Plaza 693,554 Shares 7.27%
Jersey City, NJ 07399
-------------------------------------------------------- -------------------------------- ------------------------------------
RBC Capital Markets Corporation 954,761 Shares 10.01%
510 Marquette Ave. South
Minneapolis, MN 55402
------------------------------------------------------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND:
-------------------------------------------------------- -------------------------------- ------------------------------------
Lazard Asset Management LLC ** 684,722 Shares 12.72%
30 Rockefeller Plaza
New York, NY 10112
-------------------------------------------------------- -------------------------------- ------------------------------------
Advisors Asset Management, Inc.
18925 Base Camp Road 438,695 Shares 8.15%
Monument, CO 80132
-------------------------------------------------------- -------------------------------- ------------------------------------
Citigroup Global Markets Inc.
700 Red Brook Blvd, Suite 300 361,996 Shares 6.72%
Owings Mills, MD 21117
-------------------------------------------------------- -------------------------------- ------------------------------------
First Clearing, LLC
One North Jefferson Street 907,499 Shares 16.86%
St. Louis, MO 63103
-------------------------------------------------------- -------------------------------- ------------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
101 Hudson Street, 8th Floor 595,094 Shares 11.06%
Jersey City, NJ 07302
-------------------------------------------------------- -------------------------------- ------------------------------------
Raymond James & Associates, Inc.
880 Carillon Parkway
P.O. Box 12749 335,989 Shares 6.24%
St. Petersburg, FL 33716
-------------------------------------------------------- -------------------------------- ------------------------------------
Wells Fargo Investments, LLC
625 Marquette Avenue, 13th Floor 318,667 Shares 5.92%
Minneapolis, MN 55402
------------------------------------------------------------------------------------------------------------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND III:
-------------------------------------------------------- -------------------------------- ------------------------------------
Charles Schwab & Co., Inc. 500,214 Shares 5.46%
2423 E. Lincoln Drive
Phoenix, AZ 85016
-------------------------------------------------------- -------------------------------- ------------------------------------
First Clearing, LLC
One North Jefferson Street 1,309,868 Shares 14.31%
St. Louis, MO 63103
------------------------------------------------------------------------------------------------------------------------------
** This information is based on the most recent Schedule 13G filed with the SEC
and does not necessarily reflect ownership as of the Record Date.
- 7 -
|
------------------------------------------------------------------------------------------------------------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND III (CONTINUED):
-------------------------------------------------------- -------------------------------- ------------------------------------
National Financial Services LLC
200 Liberty Street
New York, NY 10281 848,946 Shares 9.27%
-------------------------------------------------------- -------------------------------- ------------------------------------
Oppenheimer & Co. Inc. 604,291 Shares 6.60%
125 Broad Street, 15th Floor
New York, NY 10004
-------------------------------------------------------- -------------------------------- ------------------------------------
Pershing LLC 731,004 Shares 7.98%
1 Pershing Plaza
Jersey City, NJ 07399
-------------------------------------------------------- -------------------------------- ------------------------------------
RBC Capital Markets Corporation
510 Marquette Ave. South 1,412,574 Shares 15.43%
Minneapolis, MN 55402
------------------------------------------------------------------------------------------------------------------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND:
-------------------------------------------------------- -------------------------------- ------------------------------------
First Clearing, LLC 10,130,278 Shares 71.18%
One North Jefferson Street
St. Louis, MO 63103
-------------------------------------------------------- -------------------------------- ------------------------------------
Stifel, Nicolaus & Company, Incorporated
501 N. Broadway, 7th Floor 781,420 Shares 5.49%
St. Louis, MO 63102
------------------------------------------------------------------------------------------------------------------------------
FIRST TRUST ACTIVE DIVIDEND INCOME FUND:
-------------------------------------------------------- -------------------------------- ------------------------------------
First Clearing, LLC 619,130 Shares 8.19%
One North Jefferson Street
St. Louis, MO 63103
-------------------------------------------------------- -------------------------------- ------------------------------------
National Financial Services LLC
200 Liberty Street 880,180 Shares 11.65%
New York, NY 10281
-------------------------------------------------------- -------------------------------- ------------------------------------
Raymond James & Associates, Inc.
880 Carillon Parkway
P.O. Box 12749 3,322,706 Shares 43.98%
St. Petersburg, FL 33716
------------------------------------------------------------------------------------------------------------------------------
|
- 8 -
PROPOSAL: ELECTION OF CLASS III TRUSTEES OF EACH FUND
Two (2) Class III Trustees are to be elected by holders of Shares of each Fund.
Current Trustees James A. Bowen and Niel B. Nielson are the nominees for
election as Class III Trustees by shareholders of each Fund for a three-year
term.
Each Fund has established a staggered Board consisting of five (5)
Trustees divided into three (3) classes pursuant to its respective By-Laws (the
Boards of each Fund are herein referred to collectively as the "Board" or the
"Board of Trustees"). As indicated on the chart set forth below under
"Management--Management of the Funds," the term of each Trustee is set in
accordance with the structure of the staggered Board of each Fund. At the annual
meeting of shareholders of Macquarie/First Trust Global Infrastructure/Utilities
Dividend & Income Fund, Energy Income and Growth Fund, First Trust Enhanced
Equity Income Fund, First Trust/Aberdeen Global Opportunity Income Fund, First
Trust/FIDAC Mortgage Income Fund, First Trust Strategic High Income Fund, First
Trust Strategic High Income Fund II and First Trust/Aberdeen Emerging
Opportunity Fund held in 2007, current Trustees James A. Bowen and Niel B.
Nielson were designated and elected as Class III Trustees with a term expiring
at this year's Meeting and will stand as the nominees for election as Class III
Trustees of each such Fund at this year's Meeting. At the organizational
meetings of First Trust Strategic High Income Fund III, First Trust Specialty
Finance and Financial Opportunities Fund and First Trust Active Dividend Income
Fund, current Trustees James A. Bowen and Niel B. Nielson were designated as
Class III Trustees with a term expiring at this year's Meeting and will stand as
the nominees for election as Class III Trustees of each such Fund at this year's
Meeting. If elected, Messrs. Bowen and Nielson will hold office for a three-year
term expiring at the Funds' annual meeting of shareholders in 2013 in each case
until their successors are elected and qualified, or until they resign, retire
or are otherwise removed. Robert F. Keith, Richard E. Erickson and Thomas R.
Kadlec are current and continuing Trustees. Mr. Keith is the Class I Trustee for
a term expiring at the Funds' annual meeting of shareholders in 2011 or until
his successor is elected and qualified, or until he resigns, retires or is
otherwise removed. Messrs. Erickson and Kadlec are Class II Trustees for a term
expiring at the Funds' annual meeting of shareholders in 2012 in each case until
their successors are elected and qualified, or until they resign, retire or are
otherwise removed.
Required Vote: For each Fund, the Class III Trustees must be elected by
the affirmative vote of the holders of a plurality of the Shares of the Fund,
cast in person or by proxy at the Meeting and entitled to vote thereon, provided
a quorum is present. Abstentions and broker non-votes will have no effect on the
approval of the proposal. Proxies cannot be voted for a greater number of
persons than the number of nominees named.
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 Fund. If a nominee should
withdraw or otherwise become unavailable for election, your Shares will be voted
FOR, AGAINST or to WITHHOLD with respect to such substitute nominee as
management may recommend in accordance with the Fund's procedures.
The Board of Trustees Unanimously Recommends that Shareholders Vote
FOR the Proposal.
- 9 -
MANAGEMENT
MANAGEMENT OF THE FUNDS
The following is a list of the Trustees and officers of each Fund and a
statement of their present positions and principal occupations during the past
five years, the number of portfolios each Trustee oversees and the other
directorships they hold and have held during the past five years, if applicable.
As noted above, each Fund has established a staggered Board consisting of five
(5) Trustees divided into three (3) classes: Class I, Class II and Class III.
The length of the term of office of each Trustee is generally three years, and
when each Trustee's term begins and ends depends on the Trustee's designated
class. The officers of the Funds serve indefinite terms. James A. Bowen is
deemed an "interested person" (as that term is defined in the Investment Company
Act of 1940, as amended ("1940 Act")) ("Interested Trustee") of the Funds due to
his position as President of the Advisor. Each Trustee, except for Mr. Bowen, is
not an "interested person" (as that term is defined in the 1940 Act) and is
therefore referred to as an "Independent Trustee."
The remainder of this page is intentionally left blank.
- 10 -
INTERESTED TRUSTEE
-----------------------------------------------------------------------------------------------------------------------------
NUMBER OF OTHER
PORTFOLIOS IN DIRECTORSHIPS
POSITION(S) TERM OF OFFICE(2) PRINCIPAL OCCUPATION(S) FIRST TRUST FUND HELD BY TRUSTEE
NAME, ADDRESS, AND HELD WITH AND LENGTH OF DURING PAST FIVE COMPLEX OVERSEEN DURING PAST FIVE
DATE OF BIRTH FUNDS TIME SERVED(3) YEARS BY TRUSTEE YEARS
-----------------------------------------------------------------------------------------------------------------------------
James A. Bowen(1) President, Class III President, First Trust 63 Portfolios Trustee of
120 East Liberty Drive Chairman of Advisors L.P. and First Wheaton College
Suite 400 the Board, Since 2004 Trust Portfolios L.P.;
Wheaton, IL 60187 Chief Chairman of the Board of
DOB: 9/55 Executive Directors, BondWave LLC
Officer and (Software Development
Trustee Company/Investment Advisor)
and Stonebridge Advisors
LLC (Investment Advisor)
-----------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
-----------------------------------------------------------------------------------------------------------------------------
NUMBER OF OTHER
PORTFOLIOS IN DIRECTORSHIPS
POSITION(S) TERM OF OFFICE(2) PRINCIPAL OCCUPATION(S) FIRST TRUST FUND HELD BY TRUSTEE
NAME, ADDRESS, AND HELD WITH AND LENGTH OF DURING PAST FIVE COMPLEX OVERSEEN DURING PAST FIVE
DATE OF BIRTH FUNDS TIME SERVED(3) YEARS BY TRUSTEE YEARS
-----------------------------------------------------------------------------------------------------------------------------
Richard E. Erickson Trustee Class II Physician; President, 63 Portfolios NONE
c/o First Trust Wheaton Orthopedics;
Advisors L.P. Since 2004 Co-owner and Co-Director
120 East Liberty Drive (January 1996 to May 2007),
Suite 400 Sports Med Center for
Wheaton, IL 60187 Fitness; Limited Partner,
DOB: 4/51 Gundersen Real Estate
Limited Partnership;
Member, Sportsmed LLC
-----------------------------------------------------------------------------------------------------------------------------
Thomas R. Kadlec Trustee Class II President (March 2010 to 63 Portfolios Director of ADM
c/o First Trust Present), Senior Vice Investor
Advisors L.P. Since 2004 President and Chief Services, Inc.
120 East Liberty Drive Financial Officer (May 2007 and ADM Investor
Suite 400 to March 2010), Vice Services
Wheaton, IL 60187 President and Chief International
DOB: 11/57 Financial Officer (1990 to
May 2007), ADM Investor
Services, Inc. (Futures
Commission Merchant)
-----------------------------------------------------------------------------------------------------------------------------
Robert F. Keith Trustee Class I President (2003 to Present), 63 Portfolios NONE
c/o First Trust Hibs Enterprises (Financial
Advisors L.P. Since 2006 and Management Consulting)
120 East Liberty Drive
Suite 400
Wheaton, IL 60187
DOB: 11/56
-----------------------------------------------------------------------------------------------------------------------------
Niel B. Nielson Trustee Class III President (June 2002 to 63 Portfolios Director of
c/o First Trust Present), Covenant College Covenant
Advisors L.P. Since 2004 Transport Inc.
120 East Liberty Drive
Suite 400
Wheaton, IL 60187
DOB: 3/54
-----------------------------------------------------------------------------------------------------------------------------
|
- 11 -
OFFICERS
----------------------------------------------------------------------------------------------------------------------------
TERM OF OFFICE(2) PRINCIPAL OCCUPATION(S)
NAME, ADDRESS, AND POSITION(S) AND LENGTH OF DURING PAST FIVE
DATE OF BIRTH HELD WITH FUNDS TIME SERVED(3) YEARS
----------------------------------------------------------------------------------------------------------------------------
Mark R. Bradley Treasurer, Indefinite Chief Financial Officer, First Trust Advisors
120 East Liberty Drive, Suite 400 Controller, L.P. and First Trust Portfolios L.P.; Chief
Wheaton, IL 60187 Chief Financial Since 2004 Financial Officer, BondWave LLC (Software
DOB: 11/57 Officer and Development Company/Investment Advisor) and
Chief Accounting Stonebridge Advisors LLC (Investment Advisor)
Officer
----------------------------------------------------------------------------------------------------------------------------
Erin E. Chapman Assistant Indefinite Assistant General Counsel (October 2007 to
120 East Liberty Drive, Suite 400 Secretary Present), Associate Counsel (March 2006 to
Wheaton, IL 60187 Since June 2009 October 2007), First Trust Advisors L.P. and
DOB: 8/76 First Trust Portfolios L.P.; Associate
Attorney (November 2003 to March 2006), Doyle
& Bolotin, Ltd.
----------------------------------------------------------------------------------------------------------------------------
James M. Dykas Assistant Indefinite Senior Vice President (April 2007 to Present),
120 East Liberty Drive, Suite 400 Treasurer Vice President (January 2005 to April 2007),
Wheaton, IL 60187 Since 2005 First Trust Advisors L.P. and First Trust
DOB: 1/66 Portfolios L.P.
----------------------------------------------------------------------------------------------------------------------------
Christopher R. Fallow Assistant Vice Indefinite Assistant Vice President (August 2006 to
120 East Liberty Drive, Suite 400 President Present), Associate (January 2005 to August
Wheaton, IL 60187 Since 2006 2006), First Trust Advisors L.P. and First
DOB: 4/79 Trust Portfolios L.P.
----------------------------------------------------------------------------------------------------------------------------
W. Scott Jardine Secretary and Indefinite General Counsel, First Trust Advisors L.P.,
120 East Liberty Drive, Suite 400 Chief Compliance First Trust Portfolios L.P. and BondWave LLC
Wheaton, IL 60187 Officer Since 2004 (Software Development Company/Investment
DOB: 5/60 Advisor); Secretary of Stonebridge Advisors
LLC (Investment Advisor)
----------------------------------------------------------------------------------------------------------------------------
Daniel J. Lindquist Vice President Indefinite Senior Vice President (September 2005 to
120 East Liberty Drive, Suite 400 Present), Vice President (April 2004 to
Wheaton, IL 60187 Since 2005 September 2005), First Trust Advisors L.P. and
DOB: 2/70 First Trust Portfolios L.P.
----------------------------------------------------------------------------------------------------------------------------
Coleen D. Lynch Assistant Vice Indefinite Assistant Vice President (January 2008 to
120 East Liberty Drive, Suite 400 President Present), First Trust Advisors L.P. and First
Wheaton, IL 60187 Since July 2008 Trust Portfolios L.P.; Vice President (May
DOB: 7/58 1998 to January 2008), Van Kampen Asset
Management and Morgan Stanley Investment
Management
----------------------------------------------------------------------------------------------------------------------------
Kristi A. Maher Assistant Indefinite Deputy General Counsel (May 2007 to Present),
120 East Liberty Drive, Suite 400 Secretary and Assistant General Counsel (March 2004 to May
Wheaton, IL 60187 Deputy Chief Assistant 2007), First Trust Advisors L.P. and First
DOB: 12/66 Compliance Secretary since Trust Portfolios L.P.
Officer 2004
Deputy Chief
Compliance
Officer since
November 2009
----------------------------------------------------------------------------------------------------------------------------
(1) Mr. Bowen is deemed an "interested person" of the Funds due to his position
as President of First Trust Advisors L.P., investment advisor of the Funds.
(2) Currently, Robert F. Keith, as a Class I Trustee, is serving a term for each
of the Funds until the Funds' 2011 annual meeting of shareholders. Richard
E. Erickson and Thomas R. Kadlec, as Class II Trustees, are each serving a
term for each of the Funds until the Funds' 2012 annual meeting of
shareholders. James A. Bowen and Niel B. Nielson, as Class III Trustees, are
each serving a term for each of the Funds until the Meeting. Officers of the
Funds have an indefinite term.
(3) Except as otherwise provided below, all Trustees and officers were elected
or appointed (i) in 2004 for the then-existing Funds, (ii) in 2005 for First
Trust/FIDAC Mortgage Income Fund and First Trust Strategic High Income Fund,
(iii) in 2006 for First Trust Strategic High Income Fund II, First
Trust/Aberdeen Emerging Opportunity Fund and First Trust Strategic High
Income Fund III and (iv) in 2007 for First Trust Specialty Finance and
Financial Opportunities Fund and First Trust Active Dividend Income Fund.
Daniel J. Lindquist and James M. Dykas were elected Vice President and
Assistant Treasurer, respectively, of all funds in the First Trust Fund
Complex, including the then-existing Funds, on December 12, 2005.
Christopher R. Fallow was elected Assistant Vice President of the
then-existing Funds on December 10, 2006. Robert F. Keith was appointed
Trustee of the then-existing Funds on June 12, 2006. Coleen D. Lynch was
elected Assistant Vice President of all funds in the First Trust Fund
Complex, including the Funds, on July 29, 2008. Erin E. Chapman was elected
Assistant Secretary of all funds in the First Trust Fund Complex, including
the Funds, on June 1, 2009. Kristi A. Maher was elected Deputy Chief
Compliance Officer of all funds in the First Trust Fund Complex, including
the Funds, on November 2, 2009.
|
- 12 -
The same five persons serve as Trustees on each Fund's Board and on the
boards of all other funds in the First Trust Fund Complex (the "First Trust
Funds"). 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 closed-end Funds are managed by the Advisor and employ common
service providers for custody, fund accounting, administration and transfer
agency that provide substantially similar services to these Funds pursuant to
substantially similar contractual arrangements. Because of the similar and often
overlapping issues facing the First Trust Funds, including among the First Trust
closed-end Funds, the Board of the First Trust Funds believes that maintaining a
unitary board structure promotes efficiency and consistency in the governance
and oversight of all First Trust Funds and reduces the costs, administrative
burdens and possible conflicts that may result from having multiple boards. In
adopting a unitary board structure, the Trustees seek to provide effective
governance through establishing a Board the overall composition of which will,
as a body, possess the appropriate skills, diversity, independence and
experience to oversee the First Trust Funds' business.
Annually, the Board reviews its governance structure and the committee
structures, their performance and functions and reviews any processes that would
enhance Board governance over the Funds' business. The Board has determined that
its leadership structure, including the unitary board and committee structure,
is appropriate based on the characteristics of the Funds it serves and the
characteristics of the First Trust Fund Complex as a whole. The Board is
composed of four Independent Trustees and one Interested Trustee. The Interested
Trustee serves as the Chief Executive Officer, President, and Chairman of the
Board 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 two-year term until
his successor is selected. Effective January 1, 2010, Niel B. Nielson 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. Generally, the Board acts by
majority vote of all the Trustees, including a majority vote of the Independent
Trustees, except where a different vote is required by applicable law.
The three committee chairs and the Lead Independent Trustee rotate
every two years in serving as chair of the Audit Committee, the Nominating and
Governance Committee or the Valuation Committee, or as Lead Independent Trustee.
- 13 -
The Lead Independent Trustee also serves on the Executive Committee with the
Interested Trustee.
In addition to the Funds, the First Trust Fund Complex includes: First
Defined Portfolio Fund, LLC, an open-end management investment company with 8
portfolios advised by First Trust Advisors; First Trust/Four Corners Senior
Floating Rate Income Fund and First Trust/Four Corners Senior Floating Rate
Income Fund II, closed-end funds advised by First Trust Advisors; and First
Trust Exchange-Traded Fund, First Trust Exchange-Traded Fund II and First Trust
Exchange-Traded AlphaDEX(R) Fund, each an exchange-traded fund with 18, 8 and 16
operating portfolios, respectively, advised by First Trust Advisors.
The four standing committees of the Board are: the Executive Committee
(and Pricing and Dividend Committee), the Nominating and Governance Committee,
the Valuation Committee and the Audit Committee. The Executive Committee, which
meets between Board meetings, is authorized to exercise all powers of and to act
in the place of the Board of Trustees to the extent permitted by each Fund's
Declaration of Trust and By-Laws. The members of the Executive Committee also
serve as a special committee of the Board known as the Pricing and Dividend
Committee which is authorized to exercise all of the powers and authority of the
Board in respect of the issuance and sale, through an underwritten public
offering, of the Shares of each Fund and all other such matters relating to such
financing, including determining the price at which such Shares are to be sold,
approval of the final terms of the underwriting agreement, and approval of the
members of the underwriting syndicate. Such Committee is also responsible for
the declaration and setting of dividends. Mr. Nielson and Mr. Bowen are members
of the Executive Committee. The number of meetings of the Executive Committee
held by each Fund during its last fiscal year is shown on Schedule 1 hereto.
The Nominating and Governance Committee is responsible for appointing
and nominating non-interested persons to the Board of Trustees. Messrs.
Erickson, Kadlec, Keith and Nielson are members of the Nominating and Governance
Committee, and each is an Independent Trustee who is also an "independent
director" within the meaning of the listing standards of the NYSE Amex or the
New York Stock Exchange, as applicable. The Nominating and Governance Committee
operates under a written charter adopted and approved by the Board, a copy of
which is available on the Funds' website at http://www.ftportfolios.com. If
there is no vacancy on the Board of Trustees, the Board will not actively seek
recommendations from other parties, including shareholders. 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 occurs and nominations are sought to fill such vacancy, the Nominating
and Governance Committee may seek nominations from those sources it deems
appropriate in its discretion, including shareholders of the applicable Fund.
The Nominating and Governance Committee may retain a search firm to identify
candidates. To submit a recommendation for nomination as a candidate for a
position on the Board of Trustees, shareholders of the applicable Fund shall
mail such recommendation to W. Scott Jardine, Secretary, at the Fund's address,
120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187. Such recommendation
shall include the following information: (i) evidence of Fund ownership of the
person or entity recommending the candidate (if a Fund shareholder); (ii) a full
description of the proposed candidate's background, including their education,
experience, current employment and date of birth; (iii) names and addresses of
at least three professional references for the candidate; (iv) information as to
whether the candidate is an "interested person" in relation to the Fund, as such
term is defined in the 1940 Act, and such other information that may be
- 14 -
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
"Shareholder Proposals" under Additional Information). 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 Chair of the Nominating and Governance
Committee and the counsel to the Independent Trustees. Recommendations received
at any other time will be kept on file until such time as the Nominating and
Governance Committee is accepting recommendations, at which point they may be
considered for nomination. In connection with the evaluation of candidates, the
review process may include, without limitation, personal interviews, background
checks, written submissions by the candidates and third party references. Under
no circumstances shall the Nominating and Governance Committee evaluate nominees
recommended by a shareholder of the Funds on a basis substantially different
than that used for other nominees for the same election or appointment of
Trustees. The number of meetings of the Nominating and Governance Committee held
by each Fund during its last fiscal year is shown on Schedule 1 hereto.
The Valuation Committee is responsible for the oversight of the pricing
procedures of each Fund. Messrs. Erickson, Kadlec, Keith and Nielson are members
of the Valuation Committee. The number of meetings of the Valuation Committee
held by each Fund during its last fiscal year is shown on Schedule 1 hereto.
The Audit Committee is responsible for overseeing each Fund's
accounting and financial reporting process, the system of internal controls,
audit process and evaluating and appointing independent auditors (subject also
to Board approval). Messrs. Erickson, Kadlec, Keith and Nielson, all of whom are
"independent" as defined in the listing standards of the NYSE Amex and the New
York Stock Exchange, as applicable, serve on the Audit Committee. Messrs. Kadlec
and Keith serve as Audit Committee Financial Experts. The number of meetings of
the Audit Committee held by each Fund during its last fiscal year is shown in
Schedule 1 hereto.
In carrying out its responsibilities, as described below under
"Independent Auditors' Fees/Pre-Approval," the Audit Committee pre-approves all
audit services and permitted non-audit services for each Fund (including the
fees and terms thereof) and non-audit services to be performed for the Advisor
by Deloitte & Touche LLP ("Deloitte & Touche"), the Funds' independent
registered public accounting firm ("independent auditors") if the engagement
relates directly to the operations and financial reporting of the Funds.
RISK OVERSIGHT
As part of the general oversight of each Fund, the Board is involved in
the risk oversight of the Funds. The Board has adopted and periodically reviews
policies and procedures designed to address the Funds' risks. Oversight of
investment and compliance risk, including oversight of sub-advisors, is
performed primarily at the Board level in conjunction with the Advisor's
investment oversight group and the Funds' Chief Compliance Officer ("CCO") and
Deputy Chief Compliance Officer. Oversight of other risks also occurs at the
Committee level. The Advisor's investment oversight group reports to the Board
at quarterly meetings regarding, among other things, Fund performance and the
various drivers of such performance as well as information related to
sub-advisors and their operations and processes. The Board reviews reports on
- 15 -
the Funds' and the service providers' compliance policies and procedures at each
quarterly Board meeting and receives an annual report from the CCO regarding the
operations of the Funds' and the service providers' compliance program. In
addition, the Independent Trustees meet privately each quarter with the CCO. The
Audit Committee reviews with the Advisor the Funds' major financial risk
exposures and the steps the Advisor has taken to monitor and control these
exposures, including the Funds' risk assessment and risk management policies and
guidelines. The Audit Committee also, as appropriate, reviews in a general
manner the processes other Board committees have in place with respect to risk
assessment and risk management. The Nominating and Governance Committee monitors
all matters related to the corporate governance of the Funds. The Valuation
Committee monitors valuation risk and compliance with the Funds' Valuation
Procedures and oversees the pricing agents and actions by the Advisor's Pricing
Committee with respect to the valuation of portfolio securities.
BOARD DIVERSIFICATION AND TRUSTEE QUALIFICATIONS
As described above, the Nominating and Governance Committee of the
Board oversees matters related to the nomination of Trustees. The Nominating and
Governance Committee seeks to establish an effective Board with an appropriate
range of skills and diversity, including, as appropriate, differences in
background, professional experience, education, vocations, and other individual
characteristics and traits in the aggregate. Each Trustee must meet certain
basic requirements, including relevant skills and experience, time availability,
and if qualifying as an Independent Trustee, independence from the Advisor,
sub-advisors, underwriters or other service providers, including any affiliates
of these entities.
Listed below for each current Trustee and nominee are the experiences,
qualifications and attributes that led to the conclusion, as of the date of this
Joint Proxy Statement, that each current Trustee and nominee should serve as a
trustee.
Independent Trustees
Richard E. Erickson, M.D., is an orthopedic surgeon and President of
Wheaton Orthopedics. He also has been a co-owner and director of a fitness
center and a limited partner of two real estate companies. Dr. Erickson has
served as a Trustee of each Fund since its inception and of the First Trust
Funds since 1999. Dr. Erickson has also served as the Lead Independent Trustee
(2008 - 2009), Chairman of the Nominating and Governance Committee (2003 - 2007)
and Chairman of the Valuation Committee (June 2006 - 2007 and since 2010) of the
First Trust Funds.
Thomas R. Kadlec is President of ADM Investor Services Inc. ("ADMIS"),
a futures commission merchant and wholly-owned subsidiary of the Archer Daniels
Midland Company ("ADM"). Mr. Kadlec has been employed by ADMIS and its
affiliates since 1990 in various accounting, financial, operations and risk
management capacities. Mr. Kadlec serves on the boards of several international
affiliates of ADMIS and is a member of ADM's Integrated Risk Committee, which is
tasked with the duty of implementing and communicating enterprise-wide risk
management. Mr. Kadlec has served as a Trustee of each Fund since its inception.
Mr. Kadlec has also served on the Executive Committee since the organization of
the first First Trust closed-end Fund in 2003 until he was elected as the first
Lead Independent Trustee in December 2005, serving as such through 2007. He also
- 16 -
served as Chairman of the Valuation Committee (2008 - 2009) and currently serves
as Chairman of the Audit Committee (since 2010) of the First Trust Funds.
Robert F. Keith is President of Hibs Enterprises, a financial and
management consulting firm. Mr. Keith has been with Hibs Enterprises since 2004.
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 the Chairman of the
Audit Committee (2008 - 2009) of the First Trust Funds and currently serves as
Chairman of the Nominating and Governance Committee (since 2010) of the First
Trust Funds.
Niel B. Nielson, Ph.D., has served as the President of Covenant College
since 2002. Mr. Nielson formerly served as a partner and trader (of options and
futures contracts for hedging options) for Ritchie Capital Markets Group (1996 -
1997), where he held an administrative management position at this proprietary
derivatives trading company. He also held prior positions in new business
development for ServiceMaster Management Services Company, and in personnel and
human resources for NationsBank of North Carolina, N.A. and Chicago Research and
Trading Group, Ltd. ("CRT"). His international experience includes serving as a
director of CRT Europe, Inc. for two years, directing out of London all aspects
of business conducted by the U.K. and European subsidiary of CRT. Prior to that,
Mr. Nielson was a trader and manager at CRT in Chicago. Mr. Nielson has served
as a Trustee of each Fund since its inception and of the First Trust Funds since
1999. Mr. Nielson has also served as the Chairman of the Audit Committee (2003 -
2007), Chairman of the Nominating and Governance Committee (2008 - 2009) and
currently serves as Lead Independent Trustee (since 2010) of the First Trust
Funds.
Interested Trustee
James A. Bowen is President and Chief Executive Officer of the First
Trust Funds and President of First Trust Advisors L.P. and First Trust
Portfolios L.P. Mr. Bowen is involved in the day-to-day management of the First
Trust Funds and serves on the Executive Committee. He has over 26 years of
experience in the investment company business in sales, sales management and
executive management. Mr. Bowen has served on the Board of Trustees for Wheaton
College since October 2005. Mr. Bowen has served as a Trustee of each Fund since
its inception and of the First Trust Funds since 1999.
OTHER INFORMATION
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.
The officers of each Fund, including Mr. Bowen, Chief Executive Officer
of each Fund, hold the same positions with each fund in the First Trust Fund
Complex (representing 63 portfolios) as they hold with the Funds, except for
- 17 -
Christopher R. Fallow. Mr. Fallow is an officer of 13 closed-end funds in the
First Trust Fund Complex, but is not an officer of First Defined Portfolio Fund,
LLC, First Trust Exchange-Traded Fund, First Trust Exchange-Traded Fund II or
First Trust Exchange-Traded AlphaDEX(R) Fund.
BENEFICIAL OWNERSHIP OF SHARES HELD IN THE FUNDS BY TRUSTEES AND OFFICERS
The following table sets forth the dollar range and number of equity
securities beneficially owned by the Trustees in each Fund and all funds in the
First Trust Fund Complex, including the Funds, as of December 31, 2009:
DOLLAR RANGE OF EQUITY SECURITIES IN THE FUNDS AND FIRST TRUST FUND COMPLEX (NUMBER OF SHARES HELD)
-------------------------------------------------------------------------------------------------------------------------------
INTERESTED INDEPENDENT
TRUSTEE TRUSTEES
--------------------------- ------------------- ------------------- --------------------- --------------------- ----------------
FUND James A. Bowen Richard E. Erickson Thomas R. Kadlec Robert F. Keith Niel B. Nielson
--------------------------- ------------------- ------------------- --------------------- --------------------- ----------------
MACQUARIE/FIRST TRUST
GLOBAL $0 $1-$10,000 $1-$10,000 $10,001-$50,000 $1-$10,000
INFRASTRUCTURE/UTILITIES (0 Shares) (653 Shares) (800 Shares) (2,932 Shares) (350 Shares)
DIVIDEND & INCOME FUND
--------------------------- ------------------- ------------------ --------------------- --------------------- ----------------
ENERGY INCOME AND GROWTH $0 $1-$10,000 $10,001-$50,000 $0 $1-$10,000
FUND (0 Shares) (341 Shares) (750 Shares) (0 Shares) (370 Shares)
--------------------------- ------------------- ------------------ --------------------- --------------------- ----------------
FIRST TRUST ENHANCED $0 $1-$10,000 $1-$10,000 $0 $1-$10,000
EQUITY INCOME FUND (0 Shares) (287 Shares) (850 Shares) (0 Shares) (312 Shares)
--------------------------- ------------------- ------------------ --------------------- --------------------- ----------------
FIRST TRUST/ABERDEEN
GLOBAL OPPORTUNITY INCOME $0 $10,001-$50,000 $10,001-$50,000 $10,001-$50,000 $1-$10,000
FUND (0 Shares) (1001 Shares) (850 Shares) (2,495 Shares) (287 Shares)
--------------------------- ------------------- ------------------ --------------------- --------------------- ----------------
FIRST TRUST/FIDAC $0 $0 $10,001-$50,000 $0 $1-$10,000
MORTGAGE INCOME FUND (0 Shares) (0 Shares) (650 Shares) (0 Shares) (356 Shares)
--------------------------- ------------------- ------------------ --------------------- --------------------- ----------------
FIRST TRUST STRATEGIC $1-$10,000 $0 $0 $0 $1-$10,000
HIGH INCOME FUND (1,000 Shares) (0 Shares) (0 Shares) (0 Shares) (508 Shares)
--------------------------- ------------------- ------------------ --------------------- --------------------- ----------------
FIRST TRUST STRATEGIC $10,001-$50,000 $0 $0 $0 $1-$10,000
HIGH INCOME FUND II (3,750 Shares) (0 Shares) (0 Shares) (0 Shares) (500 Shares)
--------------------------- ------------------- ------------------ --------------------- --------------------- ----------------
FIRST TRUST/ABERDEEN $0 $0 $10,001-$50,000 $0 $1-$10,000
EMERGING OPPORTUNITY FUND (0 Shares) (0 Shares) (1,000 Shares) (0 Shares) (200 Shares)
--------------------------- ------------------- ------------------ --------------------- --------------------- ----------------
FIRST TRUST STRATEGIC $0 $0 $0 $0 $0
HIGH INCOME FUND III (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
--------------------------- ------------------- ------------------ --------------------- --------------------- ----------------
FIRST TRUST SPECIALTY
FINANCE AND FINANCIAL $0 $0 $0 $0 $0
OPPORTUNITIES FUND (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
--------------------------- ------------------- ------------------ --------------------- --------------------- ----------------
FIRST TRUST ACTIVE $0 $0 $0 $0 $0
DIVIDEND INCOME FUND (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
--------------------------- ------------------- ------------------ --------------------- --------------------- ----------------
AGGREGATE DOLLAR RANGE OF
EQUITY SECURITIES IN ALL
REGISTERED INVESTMENT $50,001-$100,000 Over $100,000 Over $100,000 Over $100,000 $50,001-$100,000
COMPANIES IN FIRST TRUST (7,250 Shares) (10,276 Shares) (10,298 Shares) (7,620 Shares) (4,716 Shares)
FUND COMPLEX OVERSEEN BY
TRUSTEE
-------------------------------------------------------------------------------------------------------------------------------
|
- 18 -
As of December 31, 2009, 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, 2009, the Trustees and officers of the Funds as a
group beneficially owned approximately 42,105 shares of the funds in the First
Trust Fund Complex (less than 1% of the shares outstanding). As of December 31,
2009, the Trustees and officers of the Funds as a group beneficially owned the
following number of Shares of each Fund, which is less than 1% of each Fund's
Shares outstanding:
------------------------------------------------------------------------------------- -----------------------
FUND SHARES OWNED
------------------------------------------------------------------------------------- -----------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND 4,735
------------------------------------------------------------------------------------- -----------------------
ENERGY INCOME AND GROWTH FUND 1,461
------------------------------------------------------------------------------------- -----------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND 1,449
------------------------------------------------------------------------------------- -----------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND 4,633
------------------------------------------------------------------------------------- -----------------------
FIRST TRUST/FIDAC MORTGAGE INCOME FUND 1,006
------------------------------------------------------------------------------------- -----------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND 1,508
------------------------------------------------------------------------------------- -----------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II 4,250
------------------------------------------------------------------------------------- -----------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND 1,200
------------------------------------------------------------------------------------- -----------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND III 0
------------------------------------------------------------------------------------- -----------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND 0
------------------------------------------------------------------------------------- -----------------------
FIRST TRUST ACTIVE DIVIDEND INCOME FUND 0
------------------------------------------------------------------------------------- -----------------------
|
COMPENSATION
Under the Trustees' compensation plan, each Independent Trustee is paid
an annual retainer of $10,000 per trust for the first 14 trusts in the First
Trust Fund Complex and an annual retainer of $7,500 per trust for each
subsequent trust added to the First Trust Fund Complex. The annual retainer is
allocated equally among each of the trusts. No additional meeting fees are paid
in connection with Board or committee meetings. Additionally, effective January
1, 2010, Mr. Nielson is paid annual compensation of $10,000 to serve as the Lead
Independent Trustee, Mr. Kadlec is paid annual compensation of $5,000 to serve
as the Chairman of the Audit Committee, Dr. Erickson is paid annual compensation
of $2,500 to serve as the Chairman of the Valuation Committee and Mr. Keith is
paid annual compensation of $2,500 to serve as the Chairman of the Nominating
and Governance Committee. Each Committee Chairman and the Lead Independent
Trustee will serve a two-year term expiring December 31, 2011 before rotating to
serve as a chairman of another committee or as Lead Independent Trustee. The
additional compensation is allocated equally among each of the trusts in the
First Trust Fund Complex. Trustees are also reimbursed by the trusts in the
First Trust Fund Complex for travel and out-of-pocket expenses in connection
with all meetings.
- 19 -
The number of Board meetings held by each Fund during its last fiscal
year is shown in Schedule 1 hereto.
The aggregate fees and expenses paid to all Trustees by each Fund for
its fiscal year (including reimbursement for travel and out-of-pocket expenses)
amounted to the following:
-------------------------------------------------------------------------------------- -----------------------------
AGGREGATE FEES AND EXPENSES
FUND PAID
-------------------------------------------------------------------------------------- -----------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND $39,182
-------------------------------------------------------------------------------------- -----------------------------
ENERGY INCOME AND GROWTH FUND $39,182
-------------------------------------------------------------------------------------- -----------------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND $39,339
-------------------------------------------------------------------------------------- -----------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND $39,339
-------------------------------------------------------------------------------------- -----------------------------
FIRST TRUST/FIDAC MORTGAGE INCOME FUND $39,182
-------------------------------------------------------------------------------------- -----------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND $39,182
-------------------------------------------------------------------------------------- -----------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II $39,182
-------------------------------------------------------------------------------------- -----------------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND $39,339
-------------------------------------------------------------------------------------- -----------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND III $39,182
-------------------------------------------------------------------------------------- -----------------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND $39,182
-------------------------------------------------------------------------------------- -----------------------------
FIRST TRUST ACTIVE DIVIDEND INCOME FUND $39,182
-------------------------------------------------------------------------------------- -----------------------------
|
The following table sets forth certain information regarding the
compensation of each Fund's Trustees (including reimbursement for travel and
out-of-pocket expenses) for each Fund's most recently completed fiscal year. The
Funds have no retirement or pension plans. The officers and the Interested
Trustee of each Fund receive no compensation from the Funds for serving in such
capacities.
- 20 -
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
DIVIDEND & INCOME FUND (1) $0 $10,064 $9,614 $9,755 $9,749
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
ENERGY INCOME AND GROWTH FUND (1) $0 $10,064 $9,614 $9,755 $9,749
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST ENHANCED EQUITY INCOME FUND (2) $0 $10,100 $9,645 $9,788 $9,806
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST/ABERDEEN GLOBAL
OPPORTUNITY INCOME FUND (2) $0 $10,100 $9,645 $9,788 $9,806
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST/FIDAC MORTGAGE INCOME FUND (3) $0 $10,064 $9,614 $9,755 $9,749
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST STRATEGIC HIGH INCOME FUND (3) $0 $10,064 $9,614 $9,755 $9,749
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II (3) $0 $10,064 $9,614 $9,755 $9,749
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (2) $0 $10,100 $9,645 $9,788 $9,806
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST STRATEGIC HIGH INCOME FUND III (3) $0 $10,064 $9,614 $9,755 $9,749
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL
OPPORTUNITIES FUND (1) $0 $10,064 $9,614 $9,755 $9,749
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST ACTIVE DIVIDEND INCOME FUND (1) $0 $10,064 $9,614 $9,755 $9,749
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
TOTAL COMPENSATION FROM THE FIRST TRUST
FUND COMPLEX (4) $0 $176,733 $168,750 $171,250 $171,591
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
(1) For fiscal year ended November 30, 2009.
(2) For fiscal year ended December 31, 2009.
(3) For fiscal year ended October 31, 2009.
(4) For calendar year ended December 31, 2009.
|
- 21 -
ATTENDANCE AT ANNUAL MEETINGS OF SHAREHOLDERS
The policy of the Board is to have as many Trustees as possible in
attendance at annual meetings of shareholders. The policy of the Nominating and
Governance Committee relating to attendance by Trustees at annual meetings of
shareholders is contained in the Funds' Nominating and Governance Committee
Charter, which is available on each Fund's website located at
http://www.ftportfolios.com. In addition, the Board's attendance at last year's
annual shareholder meeting is available on each Fund's website located at
http://www.ftportfolios.com. To find the Board's attendance, select your Fund
under the "Closed-End Funds" tab, select the "News & Literature" link, and go to
the "Shareholder Updates and Information" heading.
AUDIT COMMITTEE REPORT
The role of the Audit Committee is to assist the Board of Trustees in
its oversight of each Fund's accounting and financial reporting process. The
Audit Committee operates pursuant to a charter (the "Charter") that was most
recently reviewed and approved by the Board of Trustees on December 14, 2009, a
copy of which is attached as Exhibit A hereto, and is available on each Fund's
website located at http://www.ftportfolios.com. 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 each
Fund's financial statements and expressing an opinion as to their conformity
with accounting principles generally accepted in the United States of America.
In performing its oversight function, the Audit Committee reviewed and
discussed with management and the independent auditors, Deloitte & Touche, the
audited financial statements of the First Trust/FIDAC Mortgage Income Fund, the
First Trust Strategic High Income Fund, the First Trust Strategic High Income
Fund II and the First Trust Strategic High Income Fund III for the fiscal year
ended October 31, 2009 at a meeting held on December 14, 2009; the
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund,
the Energy Income and Growth Fund, the First Trust Specialty Finance and
Financial Opportunities Fund and the First Trust Active Dividend Income Fund for
the fiscal year ended November 30, 2009 at a meeting held on January 21, 2010;
and the First Trust Enhanced Equity Income Fund, the First Trust/Aberdeen Global
Opportunity Income Fund and the First Trust/Aberdeen Emerging Opportunity Fund
for the fiscal year ended December 31, 2009 at a meeting held on February 18,
2010, 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 each Fund and such other matters
brought to the attention of the Audit Committee by the independent auditors as
required by the Public Company Accounting Oversight Board ("PCAOB") AU 380,
Communication with Audit Committees. The Audit Committee also received from the
independent auditors the written disclosures and letter required by PCAOB Ethics
and Independence Rule 3526, Communication with Audit Committees Concerning
Independence, delineating relationships between the independent auditors and
each Fund 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
- 22 -
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
each Fund's 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 each Fund's 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 to the Board the inclusion of each Fund's audited
financial statements for the years ended October 31, November 30 and December
31, 2009, respectively.
Submitted by the Audit Committee of the Funds:
Richard E. Erickson
Thomas R. Kadlec
Robert F. Keith
Niel B. Nielson
INDEPENDENT AUDITORS' FEES
Deloitte & Touche has been selected to serve as the independent
auditors for each Fund for its current fiscal year, and acted as the independent
auditors for each Fund for its most recently completed fiscal year. Deloitte &
Touche has advised the Funds that, to the best of its knowledge and belief,
Deloitte & Touche professionals did not have any direct or material indirect
ownership interest in the Funds inconsistent with independent professional
standards pertaining to independent registered public accounting firms. It is
expected that representatives of Deloitte & Touche will be present at the
Meeting to answer any questions that may arise and will have the opportunity to
make a statement if they desire to do so. 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.
- 23 -
Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees
During each of the last two fiscal years of the Funds, Deloitte &
Touche has billed each Fund and the Advisor for the following fees:
-------------------------------------- --------------------- -------------------- ---------------------- ------------------
AUDIT FEES AUDIT-RELATED TAX ALL OTHER
Fees(1) FEES(2) FEES
-------------------------------------- ---------- ---------- ----------- -------- ----------- ---------- --------- --------
FEES BILLED TO: 2008 2009 2008 2009 2008 2009 2008 2009
-------------------------------------- ---------- ---------- ----------- -------- ----------- ---------- --------- --------
MACQUARIE/FIRST TRUST GLOBAL
INFRASTRUCTURE/ UTILITIES DIVIDEND &
INCOME FUND(3)
Fund $0 $48,000 $0 $0 $4,250 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
-------------------------------------- ---------- ---------- ----------- -------- ----------- ---------- --------- --------
ENERGY INCOME AND GROWTH FUND(3)
Fund $2,000 $72,000 $0 $0 $47,000 $42,400 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
-------------------------------------- ---------- ---------- ----------- -------- ----------- ---------- --------- --------
FIRST TRUST ENHANCED EQUITY INCOME
FUND(4)
Fund $37,000 $39,000 $0 $0 $5,000 $7,320 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
-------------------------------------- ---------- ---------- ----------- -------- ----------- ---------- --------- --------
FIRST TRUST/ABERDEEN GLOBAL
OPPORTUNITY INCOME FUND(4)
Fund $44,000 $46,800 $0 $0 $5,000 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
-------------------------------------- ---------- ---------- ----------- -------- ----------- ---------- --------- --------
FIRST TRUST/FIDAC MORTGAGE INCOME
FUND(5)
Fund $41,000 $45,000 $0 $0 $5,000 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
-------------------------------------- ---------- ---------- ----------- -------- ----------- ---------- --------- --------
FIRST TRUST STRATEGIC HIGH INCOME
FUND(5)
Fund $53,500 $45,800 $6,868 $0 $5,000 $5,200 $0 $0
Advisor N/A N/A $6,868 $0 $0 $0 $0 $0
-------------------------------------- ---------- ---------- ----------- -------- ----------- ---------- --------- --------
FIRST TRUST STRATEGIC HIGH INCOME
FUND II(5)
Fund $53,500 $45,800 $6,868 $0 $5,000 $5,200 $0 $0
Advisor N/A N/A $6,868 $0 $0 $0 $0 $0
-------------------------------------- ---------- ---------- ----------- -------- ----------- ---------- --------- --------
FIRST TRUST/ABERDEEN EMERGING
OPPORTUNITY FUND(4)
Fund $44,000 $46,800 $0 $0 $8,590 $8,090 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
-------------------------------------- ---------- ---------- ----------- -------- ----------- ---------- --------- --------
FIRST TRUST STRATEGIC HIGH INCOME
FUND III(6)
Fund $15,500 $45,800 $9,157 $0 $5,000 $0 $0 $0
Advisor N/A N/A $24,657 $0 $0 $0 $0 $0
-------------------------------------- ---------- ---------- ----------- -------- ----------- ---------- --------- --------
FIRST TRUST SPECIALTY FINANCE AND
FINANCIAL OPPORTUNITIES FUND(3)
Fund $0 $44,000 $0 $0 $5,000 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
-------------------------------------- ---------- ---------- ----------- -------- ----------- ---------- --------- --------
FIRST TRUST ACTIVE DIVIDEND INCOME
FUND(3)
Fund $0 $49,800 $0 $0 $4,250 $4,500 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
-------------------------------------- ---------- ---------- ----------- -------- ----------- ---------- --------- --------
(1) These fees were for additional audit work for the Fund.
(2) These fees were for tax consultation or tax return preparation.
(3) These fees were for the fiscal years ended November 30.
(4) These fees were for the fiscal years ended December 31.
(5) These fees were for the fiscal years ended October 31.
(6) These fees were for the fiscal years ended January 31, 2009 (set forth in
the 2008 column) and October 31, 2009 (set forth in the 2009 column). On
September 21, 2009, the Fund's Board of Trustees approved a change in the
Fund's fiscal year end from January 31 to October 31.
|
- 24 -
Non-Audit Fees
During each of the last two fiscal years of the Funds, Deloitte &
Touche has billed the non-audit fees listed below for services provided to the
entities indicated.
AGGREGATE NON-AUDIT FEES
---------------------------------------------------------------------------------- -------------------- --------------------
FUND 2008 2009
---------------------------------------------------------------------------------- -------------------- --------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND(1)
Fund $4,250 $5,200
Advisor $12,143 $36,000
---------------------------------------------------------------------------------- -------------------- --------------------
ENERGY INCOME AND GROWTH FUND(1)
Fund $47,000 $42,400
Advisor $12,143 $36,000
---------------------------------------------------------------------------------- -------------------- --------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND(2)
Fund $5,000 $7,326
Advisor 12,143 $36,000
---------------------------------------------------------------------------------- -------------------- --------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND(2)
Fund $5,000 $5,200
Advisor $12,143 $36,000
---------------------------------------------------------------------------------- -------------------- --------------------
FIRST TRUST/FIDAC MORTGAGE INCOME FUND(3)
Fund $5,000 $5,200
Advisor $12,143 $36,000
---------------------------------------------------------------------------------- -------------------- --------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND(3)
Fund $5,000 $5,200
Advisor $12,143 $36,000
---------------------------------------------------------------------------------- -------------------- --------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II(3)
Fund $5,000 $5,200
Advisor $12,143 $36,000
---------------------------------------------------------------------------------- -------------------- --------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND(2)
Fund $8,590 $8,090
Advisor $12,143 $36,000
---------------------------------------------------------------------------------- -------------------- --------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND III(4)
Fund $5,000 $0
Advisor $12,143 $36,000
---------------------------------------------------------------------------------- -------------------- --------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND(1)
Fund $5,000 $5,200
Advisor $12,143 $36,000
---------------------------------------------------------------------------------- -------------------- --------------------
FIRST TRUST ACTIVE DIVIDEND INCOME FUND(1)
Fund $4,250 $4,500
Advisor $12,143 $36,000
---------------------------------------------------------------------------------- -------------------- --------------------
(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 were for the fiscal years ended January 31, 2009 (set forth in
the 2008 column) and October 31, 2009 (set forth in the 2009 column). On
September 21, 2009, the Fund's Board of Trustees approved a change in the
Fund's fiscal year end from January 31 to October 31.
|
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
- 25 -
auditors. The chairman of the Audit Committee is authorized to give such
pre-approvals on behalf of the Audit Committee up to $25,000 and report any such
pre-approval to the full Audit Committee.
The Audit Committee is also responsible for the pre-approval of the
independent auditors' engagements for non-audit services with the Advisor and
any entity controlling, controlled by or under common control with the Advisor
that provides ongoing services to the respective Fund, if the engagement relates
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, and All Other
Fees and Aggregate Non-Audit Fees disclosed above that were required to be
pre-approved by the Audit Committee pursuant to its pre-approval policies were
pre-approved by the Audit Committee pursuant to the pre-approval exceptions
included in Regulation S-X.
The Audit Committee of each Fund has considered whether the provision
of non-audit services that were rendered to the Advisor and any entity
controlling, controlled by, or under common control with the Advisor that
provides ongoing services to the respective Fund that were not pre-approved
pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible
with maintaining the principal accountant's independence.
ADDITIONAL INFORMATION
SHAREHOLDER PROPOSALS
To be considered for presentation at the Joint Annual Meetings of
Shareholders of the Funds to be held in 2011, a shareholder proposal submitted
pursuant to Rule 14a-8 of the 1934 Act must be received at the offices of the
applicable Fund at 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187,
not later than November 22, 2010.
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. In accordance
with the advance notice provisions included in the Funds' By-Laws, unless a
greater or lesser period is required under applicable law, to be timely, the
Shareholder Notice must be delivered to or mailed and received at the Fund's
address, 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, Attn: W.
Scott Jardine, Secretary, not less than forty-five (45) days nor more than sixty
(60) days prior to the first anniversary date of the date of the proxy statement
released to shareholders for the preceding year's annual meeting. However, if
and only if the annual meeting is not scheduled to be held within a period that
commences thirty (30) days before the first anniversary date of the annual
meeting for the preceding year and ends thirty (30) days after such anniversary
date (an annual meeting date outside such period being referred to herein as an
"Other Annual Meeting Date"), such Shareholder Notice must be given as described
above by the later of the close of business on (i) the date forty-five (45) days
prior to such Other Annual Meeting Date or (ii) the tenth (10th) business day
following the date such Other Annual Meeting Date is first publicly announced or
disclosed.
- 26 -
Any shareholder submitting a nomination of any person or persons (as
the case may be) for election as a Trustee or Trustees of a Fund is required to
deliver, as part of such Shareholder Notice: (i) a statement in writing setting
forth: (A) the name, age, date of birth, business address, residence address and
nationality of the person or persons to be nominated; (B) the class or series
and number of all Shares of the Fund owned of record or beneficially by each
such person or persons, as reported to such shareholder by such nominee(s); (C)
any other information regarding each such person required by paragraphs (a),
(d), (e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of
Rule 14a-101 (Schedule 14A) under the 1934 Act (or any successor provision
thereto); (D) any other information regarding the person or persons to be
nominated that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitation of proxies for
election of trustees or directors pursuant to Section 14 of the 1934 Act and the
rules and regulations promulgated thereunder; and (E) whether such shareholder
believes any nominee is or will be an "interested person" of the Fund (as
defined in the 1940 Act) and, if not an "interested person," information
regarding each nominee that will be sufficient for the Fund to make such
determination; and (ii) the written and signed consent of any person nominated
to be named as a nominee and to serve as a Trustee if elected. In addition, the
Trustees may require any proposed nominee to furnish such other information as
they may reasonably require or deem necessary to determine the eligibility of
such proposed nominee to serve as a Trustee.
Without limiting the foregoing, any shareholder who gives a Shareholder
Notice of any matter proposed to be brought before a shareholder meeting
(whether or not involving nominees for Trustees) is required to deliver, as part
of such Shareholder Notice: (i) the description of and text of the proposal to
be presented; (ii) a brief written statement of the reasons why such shareholder
favors the proposal; (iii) such shareholder's name and address as they appear on
the Fund's books; (iv) any other information relating to the shareholder that
would be required to be disclosed in a proxy statement or other filings required
to be made in connection with the solicitation of proxies with respect to the
matter(s) proposed pursuant to Section 14 of the 1934 Act and the rules and
regulations promulgated thereunder; (v) the class or series and number of all
Shares of the Fund owned beneficially and of record by such shareholder; (vi)
any material interest of such shareholder in the matter proposed (other than as
a shareholder); (vii) a representation that the shareholder intends to appear in
person or by proxy at the shareholder meeting to act on the matter(s) proposed;
(viii) if the proposal involves nominee(s) for Trustees, a description of all
arrangements or understandings between the shareholder and each proposed nominee
and any other person or persons (including their names) pursuant to which the
nomination(s) are to be made by the shareholder; and (ix) in the case of a
shareholder (a "Beneficial Owner") that holds Shares entitled to vote at the
meeting through a nominee or "street name" holder of record, evidence
establishing such Beneficial Owner's indirect ownership of, and entitlement to
vote, Shares at the meeting of shareholders. Shares "beneficially owned" means
all Shares which such person is deemed to beneficially own pursuant to Rules
13d-3 and 13d-5 under the 1934 Act.
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
- 27 -
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, ADMINISTRATOR AND TRANSFER AGENT
First Trust Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton,
Illinois 60187, serves as the Funds' investment advisor. Four Corners Capital
Management, LLC, 555 South Flower Street, Suite 3300, Los Angeles, California
90071, and Macquarie Capital Investment Management, LLC, 125 West 55th Street,
New York, New York 10019, serve as the investment sub-advisors to
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund.
Energy Income Partners, LLC, 49 Riverside Avenue, Westport, Connecticut 06880,
serves as the investment sub-advisor to Energy Income and Growth Fund. Chartwell
Investment Partners, L.P., 1235 Westlakes Drive, Berwyn, Pennsylvania 19312,
serves as the investment sub-advisor to First Trust Enhanced Equity Income Fund.
Aberdeen Asset Management, Inc., 1735 Market Street, 32nd Floor, Philadelphia,
Pennsylvania 19103, serves as the investment sub-advisor to First Trust/Aberdeen
Global Opportunity Income Fund and First Trust/Aberdeen Emerging Opportunity
Fund. Fixed Income Discount Advisory Company, 1211 Avenue of the Americas, 29th
Floor, New York, New York 10036, serves as the investment sub-advisor to First
Trust/FIDAC Mortgage Income Fund. Brookfield Investment Management Inc., Three
World Financial Center, 200 Vesey Street, 10th Floor, New York, New York 10281,
serves as the investment sub-advisor to First Trust Strategic High Income Fund,
First Trust Strategic High Income Fund II and First Trust Strategic High Income
Fund III. Confluence Investment Management LLC, 349 Marshall Avenue, Suite 302,
St. Louis, Missouri 63119, serves as the investment sub-advisor to First Trust
Specialty Finance and Financial Opportunities Fund. Aviance Capital Management,
LLC, 2080 Ringling Boulevard, Sarasota, Florida 34237, serves as the investment
sub-advisor to First Trust Active Dividend Income Fund. An affiliate of the
Advisor owns an interest in Aviance Capital Management, LLC.
PNC acts as the administrator, accounting agent and transfer agent to
the Funds and its principal U.S. office is located at 4400 Computer Drive,
Westborough, Massachusetts 01581. PNC is a leading provider of processing,
technology and business intelligence services to asset managers, broker/dealers
and financial advisors.
SECTION 30(h) AND SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 30(h) of the 1940 Act and Section 16(a) of the 1934 Act require
the Funds' officers and Trustees, certain persons affiliated with First Trust
Advisors and any sub-advisor and persons who beneficially own more than 10% of a
Fund's Shares to file reports of ownership and changes of ownership with the SEC
and the NYSE Amex or the New York Stock Exchange, as applicable, and to furnish
the Funds with copies of all Section 16(a) forms they file. Based solely upon a
review of copies of such forms received by the Funds and certain written
representations, the Funds believe that during the fiscal years ended October
31, 2009, November 30, 2009 and December 31, 2009, all such filing requirements
applicable to such persons were met except as noted below. On behalf of James A.
Bowen, an officer and Trustee of the Funds and an officer of First Trust
Advisors, one late Form 4 filing will be required to be made with respect to two
transactions involving sales of Shares of Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund that occurred in March 2009, one
late Form 4 filing will be required to be made with respect to one transaction
involving a sale of Shares of First Trust/Aberdeen Global Opportunity Income
Fund that occurred in September 2009 and one late Form 4 filing will be required
- 28 -
to be made with respect to one transaction involving a sale of Shares of First
Trust/Aberdeen Emerging Opportunity Fund that occurred in September 2009. On
behalf of Michael Dixon, an officer of Aviance Capital Management, LLC,
investment sub-advisor to First Trust Active Dividend Income Fund, one late Form
5 filing will be required to be made with respect to two transactions involving
purchases of Shares of First Trust Active Dividend Income Fund that occurred in
December 2008.
FISCAL YEAR
The fiscal year end for First Trust/FIDAC Mortgage Income Fund, First
Trust Strategic High Income Fund, First Trust Strategic High Income Fund II and
First Trust Strategic High Income Fund III was October 31, 2009. The fiscal year
end for Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income
Fund, Energy Income and Growth Fund, First Trust Specialty Finance and Financial
Opportunities Fund and First Trust Active Dividend Income Fund was November 30,
2009. The fiscal year end for First Trust Enhanced Equity Income Fund, First
Trust/Aberdeen Global Opportunity Income Fund and First Fund/Aberdeen Emerging
Opportunity Fund was December 31, 2009.
DELIVERY OF CERTAIN DOCUMENTS
Annual reports will be sent to shareholders of record of each Fund
following the Fund's fiscal year end. Each Fund will furnish, without charge, a
copy of its annual report and/or semi-annual report as available upon request.
Such written or oral requests should be directed to the Fund at 120 East Liberty
Drive, Suite 400, Wheaton, Illinois 60187 or by calling (800) 988-5891.
Please note that only one annual or semi-annual report, proxy statement
or Notice of Internet Availability of Proxy Materials (as applicable) may be
delivered to two or more shareholders of a Fund who share an address, unless the
Fund has received instructions to the contrary. To request a separate copy of an
annual or semi-annual report, proxy statement or Notice of Internet Availability
of Proxy Materials (as applicable), or for instructions as to how to request a
separate copy of such documents or as to how to request a single copy if
multiple copies of such documents are received, shareholders should contact the
Fund at the address and phone number set forth above. Pursuant to a request, a
separate copy will be delivered promptly.
OTHER MATTERS TO COME BEFORE THE MEETING
No business other than the matter described above is expected to come
before the Meeting, but should any other matter requiring a vote of shareholders
arise, including any question as to an adjournment or postponement of the
Meeting, the persons named on the enclosed proxy card will vote thereon
according to their best judgment in the interests of the Funds.
March 18, 2010
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.
- 29 -
SCHEDULE 1
NUMBER OF BOARD AND COMMITTEE MEETINGS
HELD DURING EACH FUND'S LAST FISCAL YEAR
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
NOMINATING AND
EXECUTIVE GOVERNANCE VALUATION
AUDIT COMMITTEE COMMITTEE COMMITTEE COMMITTEE
FUND BOARD MEETINGS MEETINGS MEETINGS MEETINGS MEETINGS
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
MACQUARIE/FIRST TRUST GLOBAL 7 8 4 4 4
INFRASTRUCTURE/ UTILITIES
DIVIDEND & INCOME FUND (1)
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
ENERGY INCOME AND GROWTH FUND (1) 6 8 4 4 4
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
FIRST TRUST ENHANCED EQUITY 5 6 4 4 4
INCOME FUND (2)
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
FIRST TRUST/ABERDEEN GLOBAL 5 6 12 4 4
OPPORTUNITY INCOME FUND (2)
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
FIRST TRUST/FIDAC MORTGAGE 5 7 12 4 4
INCOME FUND (3)
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
FIRST TRUST STRATEGIC HIGH 7 7 12 4 4
INCOME FUND (3)
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
FIRST TRUST STRATEGIC HIGH 7 7 12 4 4
INCOME FUND II (3)
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
FIRST TRUST/ABERDEEN EMERGING 7 6 4 4 4
OPPORTUNITY FUND (2)
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
FIRST TRUST STRATEGIC HIGH 8 6 12 4 4
INCOME FUND III (3)
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
FIRST TRUST SPECIALTY FINANCE
AND FINANCIAL OPPORTUNITIES 5 8 4 4 4
FUND (1)
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
FIRST TRUST ACTIVE DIVIDEND 8 8 4 4 4
INCOME FUND (1)
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
(1) For fiscal year ended November 30, 2009.
(2) For fiscal year ended December 31, 2009.
(3) For fiscal year ended October 31, 2009.
|
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 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;
B. to oversee the quality and integrity of each Fund's
financial statements and the independent audit thereof;
C. 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
D. 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
1. Size and Membership Requirements.
A 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.
B. Each member of the Committee shall be independent of the
Fund and must be free of any relationship that, in the opinion of the
Board, would interfere with the exercise of independent judgment as a
Committee member. With respect to the Funds which are closed-end funds
or open-end exchange-traded funds ("ETFs"), each member must meet the
independence and experience requirements of the New York Stock
Exchange, NYSE Arca, NYSE AMEX or the NASDAQ Stock Market (as
applicable), and Section 10A of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and Rule 10A-3 thereunder, and other
applicable rules and regulations of the Securities and Exchange
Commission ("SEC"). Included in the foregoing is the requirement that
no member of the Committee be an "interested person" of the Funds
within the meaning of Section 2(a)(19) of the Investment Company Act of
1940, as amended (the "1940 Act"), nor shall any Committee member
accept, directly or indirectly, any consulting, advisory or other
compensatory fee from the Funds (except in the capacity as a Board or
committee member).
C. 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.
D. 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 AMEX or the NASDAQ Stock Market, each member of
the Committee shall be able to read and understand fundamental
financial statements, including a Fund's balance sheet, income
statement and cash flow statement. In addition, at least one member of
the Committee shall have been determined by the Board, exercising its
business judgment, to be "financially sophisticated," as required by
the NYSE AMEX or the NASDAQ Stock Market (as applicable). A member whom
the Board determines to be the Fund's "audit committee financial
expert" shall be presumed to qualify as financially sophisticated.
E. With respect to Funds that are closed-end funds,
Committee members shall not serve simultaneously on the audit committee
of more than two public companies, in addition to their service on the
Committee.
2. 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.
3. Term of Office.
Committee members shall serve until they resign or are removed or
replaced by the Board.
III. RESPONSIBILITIES
1. With respect to Independent Auditors:
A. 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.
A-2
B. 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
External Auditors.
C. The Committee shall meet with the External Auditors in
the absence of Fund Management, as necessary.
D. The Committee shall pre-approve all audit services and
permitted non-audit services (including the fees and terms thereof) to
be performed for the Fund by its External Auditors in accordance with
the Audit and Non-Audit Services Pre-Approval Policy. The Chairman of
the Committee is authorized to give such pre-approvals on behalf of the
Committee where the fee for such engagement does not exceed the amount
specified in the Audit and Non-Audit Services Pre-Approval Policy, and
shall report any such pre-approval to the full Committee.
E. The Committee shall pre-approve the External Auditor's
engagements for non-audit services to Fund Management and any entity
controlling, controlled by or under common control with Fund Management
that provides ongoing services to the Fund, if the engagement relates
directly to the operations and financial reporting of the Fund, subject
to the de minimis exceptions for non-audit services described in Rule
2-01 of Regulation S-X. The Chairman of the Committee is authorized to
give such pre-approvals on behalf of the Committee, and shall report
any such pre-approval to the full Committee.
F. If the External Auditors have provided non-audit services
to Fund Management and any entity controlling, controlled by or under
common control with Fund Management that provides ongoing services to
the Fund that were not pre-approved pursuant to the de minimis
exception, the Committee shall consider whether the provision of such
non-audit services is compatible with the External Auditor's
independence.
G. 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 Independence Standards Board Standard No. 1 as it
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
A-3
External Auditor's independence, including all relationships between
the External Auditors and the Fund and its affiliates; and evaluating
the qualifications, performance and independence of the External
Auditors, including their membership in the SEC practice section of the
AICPA and their compliance with all applicable requirements for
independence and peer review, and a review and evaluation of the lead
partner, taking into account the opinions of management and discussing
such reports with the External Auditors. The Committee shall present
its conclusions with respect to the External Auditors to the Board.
H. The Committee shall review reports and other information
provided to it by the External Auditors regarding any illegal acts that
the External Auditors should discover (whether or not perceived to have
a material effect on the Fund' s financial statements), in accordance
with and as required by Section 10A(b) of the Exchange Act.
I. 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.
J. The Committee shall establish and recommend to the Board
for ratification a policy of the Funds with respect to the hiring of
employees or former employees of the External Auditors who participated
in the audits of the Funds' financial statements.
K. The Committee shall take (and, where appropriate,
recommend that the Board take) appropriate action to oversee the
independence of the External Auditors.
L. 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.
2. With respect to Fund Financial Statements:
A. The Committee shall meet to review and discuss with Fund
Management and the External Auditors the annual audited financial
statements of the Funds, major issues regarding accounting and auditing
principles and practices, and the Funds' disclosures under
"Management's Discussion and Analysis," and shall meet to review and
discuss with Fund Management the semi-annual financial statements of
the Funds and the Funds' disclosures under "Management's Discussion and
Analysis."
B. The Committee shall review and discuss reports, both
written and oral, from the External Auditors or Fund Management
regarding (a) all critical accounting policies and practices to be
used; (b) all alternative treatments of financial information within
generally accepted accounting principles ("GAAP") for policies and
practices that have been discussed with management, including the
ramifications of the use of such alternative treatments and disclosures
and the treatment preferred by the External Auditors; (c) other
A-4
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.
C. The Committee shall review disclosures made to the
Committee by the Funds' principal executive officer and principal
financial officer during their certification process for the Funds'
periodic reports about any significant deficiencies in the design or
operation of internal controls or material weaknesses therein and any
fraud involving management or other employees who have a significant
role in the Funds' internal controls.
D. 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 No.
61, Communication with Audit Committees), that arise during the
External Auditor's review of the Funds' financial statements.
E. The Committee shall review and discuss with management
and the External Auditors (a) significant financial reporting issues
and judgments made in connection with the preparation and presentation
of the Funds' financial statements, including any significant changes
in the Funds' selection or application of accounting principles and any
major issues as to the adequacy of the Funds' internal controls and any
special audit steps adopted in light of material control deficiencies,
and (b) analyses prepared by Fund Management or the External Auditors
setting forth significant financial reporting issues and judgments made
in connection with the preparation of the financial statements,
including analyses of the effects of alternative GAAP methods on the
financial statements.
F. The Committee shall review and discuss with management
and the External Auditors the effect of regulatory and accounting
initiatives on the Funds' financial statements.
G. The Committee shall discuss with Fund Management the
Funds' press releases regarding financial results and dividends, as
well as financial information and earnings guidance provided to
analysts and rating agencies. This discussion may be done generally,
consisting of discussing the types of information to be disclosed and
the types of presentations to be made. The Chairman of the Committee
shall be authorized to have these discussions with Fund Management on
behalf of the Committee, and shall report to the Committee regarding
any such discussions.
H. 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.
A-5
3. With respect to serving as a Qualified Legal Compliance Committee:
A. The Committee shall serve as the Funds' "qualified legal
compliance committee" ("QLCC") within the meaning of the rules of the
SEC and, in that regard, the following shall apply.
(i) The Committee shall receive and retain, in
confidence, reports of evidence of (a) a material violation of
any federal or state securities laws, (b) a material breach of
a fiduciary duty arising under any federal or state laws or
(c) a similar material violation of any federal or state law
by a Fund or any of its officers, trustees, employees or
agents (a "Report of Material Violation"). Reports of Material
Violation may be addressed to the Funds, attention W. Scott
Jardine, at the address of the principal offices of the Funds,
which currently is 120 East Liberty Drive, Wheaton, Illinois
60187, who shall forward the Report of Material Violation to
the Committee.
(ii) Upon receipt of a Report of Material Violation,
the Committee shall (a) inform the Fund's chief legal officer
and chief executive officer (or the equivalents thereof) of
the report (unless the Committee determines it would be futile
to do so), and (b) determine whether an investigation is
necessary.
(iii) After considering the Report of a Material
Violation, the Committee shall do the following if it deems an
investigation necessary:
(1) Notify the full Board;
(2) Initiate an investigation, which may be
conducted either by the chief legal officer (or the
equivalent thereof) of the Fund or by outside
attorneys; and
(3) Retain such additional expert personnel
as the Committee deems necessary.
(iv) At the conclusion of any such investigation, the
Committee shall:
(4) Recommend, by majority vote, that the
Fund implement an appropriate response to evidence of
a material violation; and
(5) Inform the chief legal officer and the
chief executive officer (or the equivalents thereof)
and the Board of the results of any such
investigation and the appropriate remedial measures
to be adopted.
B. 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.
A-6
4. Other Responsibilities:
A. The Committee shall receive, retain and handle complaints
received by the Funds regarding accounting, internal accounting
controls, or auditing matters from any person, whether or not an
employee of the Funds or Fund Management, and shall receive submissions
of concerns regarding questionable accounting or auditing matters by
employees of the Funds and Fund Management, administrator, principal
underwriter, or any other provider of accounting-related services for
the Funds. All such complaints and concerns shall be handled in
accordance with the Committee's procedures for operating as a QLCC,
outlined in III.3 above.
B. The Committee shall review, with fund counsel and
independent legal counsel, any legal matters that could have
significant impact on the Fund's financial statements or compliance
policies and the findings of any examination by a regulatory agency as
they relate to financial statement matters.
C. The Committee shall review and reassess the adequacy of
this charter on an annual basis and provide a recommendation to the
Board for approval of any proposed changes deemed necessary or
advisable by the Committee.
D. The Committee shall evaluate on an annual basis the
performance of the Committee.
E. The Committee shall review with the External Auditors and
with Fund Management the adequacy and effectiveness of the Funds'
internal accounting and financial controls.
F. 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.
G. 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.
H. The Committee shall prepare any report of the Committee
required to be included in a proxy statement for a Fund.
I. 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.
J. The Committee shall maintain minutes of its meetings.
A-7
K. 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 ADVISORS
The Committee may engage independent counsel and other advisors, 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
1. The Committee shall determine the:
A. 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
B. Compensation to any advisors employed by the Committee.
2. 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.
VI. MANAGEMENT AND EXTERNAL AUDITOR'S RESPONSIBILITIES
1. 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.
2. While the Committee has the responsibilities and powers set forth
in this Charter, it is not the duty of the Committee to plan or conduct audits
or to determine that the Funds' financial statements are complete and accurate
and are in accordance with GAAP, nor is it the duty of the Committee to assure
compliance with laws and regulations and/or the Funds' Code of Ethics.
3. In discharging its responsibilities, the Committee and its members
are entitled to rely on information, opinions, reports, or statements, including
financial statements and other financial data, if prepared or presented by: (1)
one or more officers of a Fund; (2) legal counsel, public accountants, or other
persons as to matters the Committee member reasonably believes are within the
person's professional or expert competence; or (3) a Board committee of which
the Committee member is not a member.
A-8
[BLANK INSIDE BACK COVER]
[BLANK BACK COVER]
PROXY CARD
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Proxy - First Trust Strategic High Income Fund COMMON SHARES
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_________________
PROXY SOLICITED BY THE BOARD OF TRUSTEES
ANNUAL MEETING ON APRIL 14, 2010 _________________
|
The undersigned holder of shares of the First Trust Strategic High Income Fund
(the "Fund"), a Massachusetts business trust, hereby appoints W. Scott Jardine,
Mark R. Bradley, Kristi A. Maher, James M. Dykas and Erin E. Chapman as
attorneys and proxies for the undersigned, with full powers of substitution and
revocation, to represent the undersigned and to vote on behalf of the
undersigned all shares of the Fund that the undersigned is entitled to vote at
the Annual Meeting of Shareholders of the Fund (the "Meeting") to be held at the
offices of First Trust Advisors L.P., 120 East Liberty Drive, Suite 400,
Wheaton, Illinois 60187, at 4:00 p.m. Central time on the date indicated above,
and any adjournments or postponements thereof. The undersigned hereby
acknowledges receipt of the Notice of Joint Annual Meetings of Shareholders and
Joint Proxy Statement dated March 18, 2010, and hereby instructs said attorneys
and proxies to vote said shares as indicated hereon. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the Meeting and any adjournments or postponements thereof (including, but
not limited to, any questions as to adjournments or postponements of the
Meeting). A majority of the proxies present and acting at the Meeting in person
or by substitute (or, if only one shall be so present, then that one) shall have
and may exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
This proxy, if properly executed, will be voted in the manner directed by the
undersigned shareholder.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES SET FORTH.
PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Annual Meeting Proxy Card
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" THE ELECTION OF NOMINEES SET FORTH.
Election of Class III Trustees - The Board Please mark your votes as
of Trustees recommends that you vote "FOR" indicated in this example [X]
the election of all Nominees for three-year
terms.
Nominees: For Withhold For Withhold
01 - James A. Bowen [ ] [ ] 02 - Niel B. Nielson [ ] [ ]
(Class III) (Class III)
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Non-Voting Items
Change of Address -- Please print your new address below.
Comments -- Please print your comments below.
Authorized Signatures - This section must be completed for your vote to be
counted. - Date and Sign Below
NOTE: Please sign exactly as your name appears on this Proxy. If joint owners,
EITHER may sign this proxy. When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give full title.
Signature Signature (Joint Owners) Date (mm/dd/yyyy) - Please print date below
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