As filed with the Securities and Exchange Commission on March 21, 2008.
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1933 Act File No. 333-134540
1940 Act File No. 811-21905
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 theCommission 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/ABERDEEN EMERGING OPPORTUNITY FUND
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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 TAX-ADVANTAGED PREFERRED INCOME FUND
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST/GALLATIN SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST ACTIVE DIVIDEND INCOME FUND
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
March 18, 2008
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 Tax-Advantaged Preferred Income Fund, First
Trust/Aberdeen Emerging Opportunity Fund, First Trust/Gallatin 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., 1001
Warrenville Road, Suite 300, Lisle, Illinois 60532, on Monday, April 14,
2008, at 4:00 p.m. Central Time.
At the Meeting, Shareholders of each Fund entitled to vote will
be asked to vote on a proposal to elect one of the Trustees of their Fund
(the "Proposal"). Shareholders will also be asked to transact such other
business as may properly come before the Meeting and any adjournments
thereof. The Proposal is described in the accompanying Notice of Joint
Annual Meetings of Shareholders and Joint Proxy Statement.
HOLDERS OF COMMON SHARES OF THE FIRST TRUST TAX-ADVANTAGED
PREFERRED INCOME FUND ARE NOT ENTITLED TO VOTE ON THE ELECTION OF A
TRUSTEE AT THIS YEAR'S MEETING. THEREFORE, IF YOU OWN COMMON SHARES OF
THE FIRST TRUST TAX-ADVANTAGED PREFERRED INCOME FUND, YOUR PROXY IS NOT
BEING SOLICITED AND NO PROXY CARD IS ENCLOSED. Although holders of common
shares of the First Trust Tax-Advantaged Preferred Income Fund are not
entitled to vote on the Proposal, the Notice of Joint Annual Meetings of
Shareholders and Joint Proxy Statement are being provided for
informational purposes and such Shareholders may attend the Meeting if
they wish to do so. Holders of the preferred shares of the Fund are
entitled to vote on the Proposal.
IF YOU OWN FUND SHARES OTHER THAN COMMON SHARES OF THE FIRST
TRUST TAX-ADVANTAGED PREFERRED INCOME FUND, YOU ARE BEING ASKED TO VOTE
ON THE PROPOSAL AT THIS YEAR'S MEETING. IF YOU CANNOT ATTEND THE MEETING,
YOU MAY PARTICIPATE BY PROXY. YOUR PARTICIPATION AT THE MEETING IS VERY
IMPORTANT. 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 and each 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 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 TAX-ADVANTAGED PREFERRED INCOME FUND
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST/GALLATIN SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST ACTIVE DIVIDEND INCOME FUND
1001 Warrenville Road
Suite 300
Lisle, Illinois 60532
NOTICE OF JOINT ANNUAL MEETINGS OF SHAREHOLDERS
To be held on April 14, 2008
March 18, 2008
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 Tax-Advantaged Preferred
Income Fund, First Trust/Aberdeen Emerging Opportunity Fund, First
Trust/Gallatin 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., 1001 Warrenville Road, Suite 300,
Lisle, Illinois 60532, on Monday, April 14, 2008, at 4:00 p.m. Central
Time, for the following purposes:
1. To elect one Trustee (the Class I Trustee) of each Fund.
2. To transact such other business as may properly come before
the Meeting or any adjournments thereof.
The Board of Trustees has fixed the close of business on
February 11, 2008 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
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SHAREHOLDERS WHO ARE ENTITLED TO VOTE AT THE MEETING, BUT 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.
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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 TAX-ADVANTAGED PREFERRED INCOME FUND
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST/GALLATIN SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST ACTIVE DIVIDEND INCOME FUND
JOINT ANNUAL MEETINGS OF SHAREHOLDERS
April 14, 2008
1001 Warrenville Road
Suite 300
Lisle, Illinois 60532
JOINT PROXY STATEMENT
March 18, 2008
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 (formerly
known as First Trust/Fiduciary Asset Management Covered Call 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 Tax-Advantaged Preferred
Income Fund, First Trust/Aberdeen Emerging Opportunity Fund, First
Trust/Gallatin 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 Monday, April 14,
2008, at 4:00 p.m. Central Time, at the offices of First Trust Advisors
L.P., 1001 Warrenville Road, Suite 300, Lisle, Illinois 60532, and at any
adjournments or postponements thereof (collectively, the "Meeting"). A
Notice of Joint Annual Meetings of Shareholders and, if applicable, 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.
This Joint Proxy Statement and, if applicable, a proxy card will
first be mailed to shareholders on or about March 18, 2008.
Proxy solicitations will be made, beginning on or about March
18, 2008, 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
"Adviser"), the investment adviser of the Funds; (iii) with respect to
Funds other than First Trust Active Dividend Income Fund, PFPC Inc.
("PFPC"), the administrator, accounting agent and transfer agent of such
Funds and a subsidiary of The PNC Financial Services Group Inc.; (iv)
with respect to First Trust Active Dividend Income Fund, American Stock
Transfer & Trust Company ("AST"), the transfer agent of such Fund, agents
of AST or Broadridge Financial Solutions, Inc.; or (v) any 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 February 11, 2008 has been fixed as the
record date (the "Record Date") for the determination of shareholders
entitled to notice of and to vote at the Meeting and any adjournments or
postponements thereof.
Except for First Trust Tax-Advantaged Preferred Income Fund,
each Fund has one class of shares of beneficial interest, par value $0.01
per share, known as common shares ("Common Shares"). First Trust
Tax-Advantaged Preferred Income Fund has two classes of shares of
beneficial interest, par value $0.01 per share, known as Common Shares
and Series M Auction Preferred Shares ("Preferred Shares"). Common Shares
and Preferred Shares are referred to collectively as ("Shares").
The following table indicates which shareholders are solicited
with respect to the proposal to elect the Class I Trustee of each Fund:
MATTER COMMON PREFERRED
SHARES SHARES
a. Election of one (1) Class I Trustee for Macquarie/First X
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/Gallatin Specialty Finance and Financial
Opportunities Fund and First Trust Active Dividend
Income Fund
b. Election of one (1) Class I Trustee for First Trust X
Tax-Advantaged Preferred Income Fund
Holders of Common Shares of the First Trust Tax-Advantaged
Preferred Income Fund are NOT being solicited with respect to the
proposal to elect the Class I Trustee of such Fund. However, this Joint
Proxy Statement is being provided to such shareholders for informational
purposes.
THE FUNDS' MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS ARE
AVAILABLE UPON REQUEST, WITHOUT CHARGE, BY WRITING TO THE ADVISER AT 1001
WARRENVILLE ROAD, SUITE 300, LISLE, ILLINOIS 60532, BY CALLING (800)
988-5891 OR BY VISITING EACH FUND'S WEBSITE LOCATED AT
HTTP://WWW.FTPORTFOLIOS.COM.
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 FRIDAY, APRIL 11, 2008. (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 Class I Trustee of that
Fund provided a quorum is present. Abstentions and broker non-votes will
have no effect on the approval of the proposal.
The holders of Common Shares of the First Trust Tax-Advantaged
Preferred Income Fund are NOT being solicited with respect to the
proposal; although this Joint Proxy Statement is being sent to such
shareholders for informational purposes, no proxy card is enclosed. For
other shareholders, 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.
If no instructions are marked on the proxy card, Fund shares represented
thereby will be voted in the discretion of the persons named on the proxy
card. Accordingly, unless instructions to the contrary are marked
thereon, a proxy will be voted FOR the election of the nominee as a Class
I Trustee and, at the discretion of the named proxies, on any other
matters that may properly come before the Meeting and any adjournments or
postponements thereof 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 the above address. 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, 1001 Warrenville Road, Suite
300, Lisle, Illinois 60532, for inspection by any shareholder during
regular business hours beginning ten days prior to the date of the
Meeting. 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 class
of 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 with respect to one or more matters 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 or adjournments.
-3-
OUTSTANDING SHARES
On the Record Date, each Fund had the following number of Common
and Preferred Shares, if applicable, outstanding:
COMMON PREFERRED
SHARES SHARES
FUND OUTSTANDING OUTSTANDING
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund 9,010,915 N/A
Energy Income and Growth Fund 6,446,996 N/A
First Trust Enhanced Equity Income Fund 19,973,164 N/A
First Trust/Aberdeen Global Opportunity Income Fund 17,365,236 N/A
First Trust/FIDAC Mortgage Income Fund 4,045,236 N/A
First Trust Strategic High Income Fund 8,983,394 N/A
First Trust Strategic High Income Fund II 9,449,584 N/A
First Trust Tax-Advantaged Preferred Income Fund 2,978,820* 880
First Trust/Aberdeen Emerging Opportunity Fund 5,905,236 N/A
First Trust/Gallatin Specialty Finance and Financial Opportunities Fund 14,113,554 N/A
First Trust Active Dividend Income Fund 7,197,120 N/A
* Shareholders are not being solicited with respect to, and are not
entitled to vote on the proposal described below.
Common Shares of Energy Income and Growth Fund and First Trust
Tax-Advantaged Preferred Income Fund are listed on the American Stock
Exchange under the ticker symbols FEN and FPI, respectively. Common
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/Gallatin Specialty Finance and
Financial Opportunities Fund (FGB); and First Trust Active Dividend
Income Fund (FAV). The Preferred Shares of First Trust Tax-Advantaged
Preferred Income Fund are not listed on a national stock exchange.
Shareholders of record on the Record Date who are being
solicited with respect to the proposal described below (who do NOT
include holders of Common Shares of First Trust Tax-Advantaged Preferred
Income Fund) 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 class of any Fund's outstanding
Shares, except as described below. Information as to beneficial ownership
of Common Shares, including percentage of outstanding shares beneficially
owned, is based on reports filed with the Securities and Exchange
Commission ("SEC") by such holders. Information as to beneficial
ownership of Preferred Shares is based on the securities position listing
reports as of the Record Date. The Fund does not have any knowledge of
who the ultimate beneficiaries are 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 OF A CLASS % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER BENEFICIALLY OWNED OF A CLASS BENEFICIALLY
OWNED
RBC Dain Rauscher Inc. 878 Preferred 99.7%
510 Marquette Avenue South Shares FPI
Minneapolis, MN 55402
Claymore Securities Inc. 2,138,295 Common 10.70%
2455 Corporate West Drive Shares FFA
Lisle, IL 60532
Claymore Securities Inc. 1,809,959 Common 10.42%
2455 Corporate West Drive Shares FAM
Lisle, IL 60532
SIT Investment Associates Inc. 1,187,047 Common 29.34%
90 South Seventh Street Shares FMY
Minneapolis, MN 55402
Wachovia Corporation 573,536 Common 14.18%
One Wachovia Center Shares FMY
Charlotte, NC 28288-0137
Fixed Income Securities, Inc. 301,381 Common 5.10%
18925 Base Camp Road Shares FEO
Monument, CO 80132
Claymore Securities Inc. 845,859 Common 14.32%
2455 Corporate West Drive Shares FEO
Lisle, IL 60532
-5-
PROPOSAL: ELECTION OF CLASS I TRUSTEE OF EACH FUND
Each Fund has established a staggered board consisting of five
(5) Trustees and three (3) classes. As indicated on the chart set forth
below under "Management of the Funds," the term of each Trustee is in
accordance with the structure of the staggered Board of each Fund.
Current Trustee Robert F. Keith was designated and elected as a Class I
Trustee with a term expiring at this year's Meeting and will stand as the
nominee for election as Trustee at this year's Meeting. If elected, Mr.
Keith will hold office for a three-year 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. Bowen, Erickson, Kadlec and Nielson are current and continuing
Trustees. Messrs. Erickson and Kadlec were designated and elected as
Class II Trustees for a term expiring at the Funds' annual meeting of
shareholders in 2009 or until their successors are elected and qualified,
or until they resign, retire or are otherwise removed. Messrs. Bowen and
Nielson were designated and elected as Class III Trustees for a term
expiring at the Funds' annual meeting of shareholders in 2010 or until
their successors are elected and qualified, or until they resign, retire
or are otherwise removed.
Mr. Keith was elected to 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/FIDAC Mortgage Income Fund, First Trust/Aberdeen Global
Opportunity Income Fund, First Trust Strategic High Income Fund, First
Trust Strategic High Income Fund II and First Trust Tax-Advantaged
Preferred Income Fund at each Fund's previous Annual Meeting of
Shareholders held on April 16, 2007 and appointed to the Boards of
Trustees of these Funds by the other Trustees on June 12, 2006. Mr. Keith
was elected to the Board of Trustees of First Trust/Aberdeen Emerging
Opportunity Fund at such Fund's previous Annual Meeting of Shareholders
held on April 16, 2007 and by the initial shareholder of such Fund on its
organizational date in 2006. Mr. Keith was elected to the Boards of
Trustees of First Trust/Gallatin Specialty Finance and Financial
Opportunities Fund and First Trust Active Dividend Income Fund by the
initial shareholder of such Funds on their respective organizational
dates in 2007.
a. FOR 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/GALLATIN SPECIALTY FINANCE AND FINANCIAL
OPPORTUNITIES FUND AND FIRST TRUST ACTIVE DIVIDEND INCOME
FUND: One (1) Class I Trustee is to be elected by holders
of Common Shares of each of the foregoing Funds, voting as
a single class. Trustee Keith is the nominee for election
as a Class I Trustee by all shareholders of each of the
foregoing Funds for a three-year term.
b. FOR FIRST TRUST TAX-ADVANTAGED PREFERRED INCOME FUND:
One (1) Class I Trustee is to be elected by holders of
Preferred Shares of the foregoing Fund, voting as a
single class. Trustee Keith is the nominee for election
as a Class I Trustee by holders of Preferred Shares of
the foregoing Fund for a three-year term.
-6-
REQUIRED VOTE: For each Fund, the Class I Trustee, who is not an
"interested person" of the Funds as that term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act") (such
Trustee, one of the "Independent 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 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 the nominee listed if your proxy
card has been properly executed and timely received by the Fund. If the
nominee should withdraw or otherwise become unavailable for election,
your Shares will be voted FOR such other nominee as management may
recommend.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR THE PROPOSAL.
-7-
MANAGEMENT OF THE FUNDS
The management of each Fund, including general supervision of
the duties performed for each Fund under the investment management
agreement between each Fund and the Adviser, is the responsibility of the
Board of Trustees. There are five Trustees of each Fund, one of whom is
an "interested person" (as that term is defined in the 1940 Act) (such
Trustee, the "Interested Trustee") and four of whom are Independent
Trustees. The Trustees of a Fund set broad policies for that Fund, choose
the Fund's officers, and hire the Fund's investment adviser and
sub-adviser. The officers of a Fund manage the day-to-day operations and
are responsible to the Fund's Board of Trustees.
The Board of Trustees of each Fund is divided into three
classes: Class I, Class II and Class III. As set forth below, the term of
each Trustee is established in accordance with such Trustee's designated
class.
The following is a list of Trustees and officers of each Fund
and a statement of their present positions, principal occupations during
the past five years, the number of portfolios each Trustee oversees, and
the other directorships the Trustees hold, if applicable.
INTERESTED TRUSTEE
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PRINCIPAL OCCUPATION(S) NUMBER OF
TERM OF OFFICE DURING PORTFOLIOS IN
POSITION(S) AND PAST FIRST TRUST FUND OTHER
NAME, ADDRESS, AND HELD WITH LENGTH OF TIME FIVE COMPLEX OVERSEEN DIRECTORSHIPS
DATE OF BIRTH FUNDS SERVED(2,3) YEARS BY TRUSTEE HELD BY TRUSTEE
-------------------------------------------------------------------------------------------------------------------------------
James A. Bowen(1) President, Class III President, First 58 Trustee of
1001 Warrenville Chairman of Trust Advisors L.P. Wheaton
Road the Board, and First Trust College
Suite 300 Chief Executive Since 2004 Portfolios L.P.;
Lisle, IL 60532 Officer and Chairman of the
DOB: 9/55 Trustee Board of Directors,
BondWave LLC
(Software
Development
Company/Broker-Dealer)
and Stonebridge
Advisors LLC
(Investment Adviser)
-------------------------------------------------------------------------------------------------------------------------------
-8-
INDEPENDENT TRUSTEES
-------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
TERM OF OFFICE PRINCIPAL PORTFOLIOS IN
POSITION(S) AND OCCUPATION(S) FIRST TRUST FUND OTHER
NAME, ADDRESS, AND HELD WITH LENGTH OF TIME DURING PAST COMPLEX OVERSEEN DIRECTORSHIPS
DATE OF BIRTH FUNDS SERVED(2,3) FIVE YEARS BY TRUSTEE HELD BY TRUSTEE
-------------------------------------------------------------------------------------------------------------------------------
Richard E. Erickson Trustee Class II Physician; President, 58 NONE
c/o First Trust Wheaton Orthopedics;
Advisors L.P. Co-owner and Co-Director
1001 Warrenville Road Since 2004 (January 1996 to May
Suite 300 2007), Sports Med Center
Lisle, IL 60532 for Fitness; Limited
DOB: 4/51 Partner, Gundersen Real
Estate Partnership;
Limited Partner,
Sportsmed LLC
-------------------------------------------------------------------------------------------------------------------------------
Thomas R. Kadlec Trustee Class II Senior Vice President 58 NONE
c/o First Trust and Chief Financial
Advisors L.P. Officer (May 2007 to
1001 Warrenville Road Since 2004 Present), Vice President
Suite 300 and Chief Financial
Lisle, IL 60532 Officer (1990 to May
DOB: 11/57 2007), ADM Investor
Services, Inc. (Futures
Commission Merchant);
President (May 2005 to
Present), ADM Derivatives, Inc.;
Registered Representative (2000
to Present), Segerdahl &
Company, Inc., a FINRA
member (Broker-Dealer)
-------------------------------------------------------------------------------------------------------------------------------
Robert F. Keith Trustee Class I President (2003 to 58 NONE
c/o First Trust Present), Hibs
Advisors L.P. Since 2006 Enterprises
1001 Warrenville Road (Financial and
Suite 300 Management Consulting);
Lisle, IL 60532 President (2001 to
DOB: 11/56 2003), Aramark Service
Master Management;
President and Chief
Operating Officer (1998
to 2003), Service Master
Management Services
----------------------------------------------------------------------------------------------------------------------------
Niel B. Nielson Trustee Class III President (June 2002 Director of
c/o First Trust to Present), Covenant 58 Covenant
Advisors L.P. College Transport Inc.
1001 Warrenville Road Since 2004
Suite 300
DOB: 3/54
----------------------------------------------------------------------------------------------------------------------------
-9-
OFFICERS
----------------------------------------------------------------------------------------------------------------------------
TERM OF OFFICE PRINCIPAL OCCUPATION(S)
NAME, ADDRESS, AND POSITION(S) AND LENGTH OF DURING PAST FIVE
DATE OF BIRTH HELD WITH FUNDS TIME SERVED(2,3) YEARS
----------------------------------------------------------------------------------------------------------------------------
Mark R. Bradley Treasurer, Indefinite Chief Financial Officer, First Trust Advisors
1001 Warrenville Road Controller, L.P. and First Trust Portfolios L.P.; Chief
Suite 300 Chief Financial Financial Officer, BondWave LLC (Software
Lisle, IL 60532 Officer Since 2004 Development Company/Broker-Dealer) and
DOB: 11/57 Stonebridge Advisors LLC (Investment Adviser)
----------------------------------------------------------------------------------------------------------------------------
Kelley A. Christensen Vice President Indefinite Assistant Vice President, First Trust Advisors
1001 Warrenville Road L.P. and First Trust Portfolios L.P.
Suite 300
Lisle, IL 60532 Since 2006
DOB: 9/70
----------------------------------------------------------------------------------------------------------------------------
James M. Dykas Assistant Indefinite Senior Vice President (April 2007 to
1001 Warrenville Road Treasurer Present), Vice President (January 2005 to
Suite 300 April 2007), First Trust Advisors L.P. and
Lisle, IL 60532 Since 2005 First Trust Portfolios L.P.; Executive
DOB: 1/66 Director (December 2002 to January 2005),
Vice President (December 2000 to December
2002), Van Kampen Asset Management and
Morgan Stanley Investment Management
----------------------------------------------------------------------------------------------------------------------------
Christopher R. Fallow Assistant Vice Indefinite Assistant Vice President (August 2006 to
1001 Warrenville Road President Present), Associate (January 2005 to August
Suite 300 2006), First Trust Advisors L.P. and First
Lisle, IL 60532 Since 2006 Trust Portfolios L.P.; Municipal Bond Trader
DOB: 4/79 (July 2001 to January 2005), BondWave LLC
(Software Development Company/Broker-Dealer)
----------------------------------------------------------------------------------------------------------------------------
W. Scott Jardine Secretary and Indefinite General Counsel, First Trust Advisors L.P. and
1001 Warrenville Road Chief Compliance First Trust Portfolios L.P.; Secretary,
Suite 300 Officer ("CCO") Secretary BondWave LLC (Software Development
Lisle, IL 60532 and CCO Company/Broker-Dealer) and Stonebridge
DOB: 5/60 Since 2004 Advisors LLC (Investment Adviser)
----------------------------------------------------------------------------------------------------------------------------
Daniel J. Lindquist Vice President Indefinite Senior Vice President (September 2005 to
1001 Warrenville Road Present), Vice President (April 2004 to
Suite 300 September 2005), First Trust Advisors L.P. and
Lisle, IL 60532 Since 2005 First Trust Portfolios L.P.; Chief Operating
DOB: 2/70 Officer (January 2004 to April 2004), Mina
Capital Management, LLC; Chief Operating
Officer (April 2000 to January 2004), Samaritan
Asset Management Services, Inc.
----------------------------------------------------------------------------------------------------------------------------
Kristi A. Maher Assistant Indefinite Deputy General Counsel (May 2007 to
1001 Warrenville Road Secretary Present), Assistant General Counsel (March
Suite 300 2004 to May 2007), First Trust Advisors L.P.
Lisle, IL 60532 Since 2004 and First Trust Portfolios L.P.; Associate
DOB: 12/66 (December 1995 to March 2004), Chapman and
Cutler LLP
----------------------------------------------------------------------------------------------------------------------------
(1) Mr. Bowen is deemed an "interested person" of the Funds due to his
position as President of First Trust Advisors L.P., investment adviser
of the Funds.
(2) Currently, Robert F. Keith, as a Class I Trustee, is serving a term
for each of the Funds until the Meeting. Richard E. Erickson and
Thomas R. Kadlec, as Class II Trustees, are each serving a term for
each of the Funds until the Funds' 2009 annual meeting. James A. Bowen
and Niel B. Nielson, as Class III Trustees, are each serving a term
for each of the Funds until the Funds' 2010 annual meeting. Officers
of the Funds have an indefinite term.
(3) All Trustees and officers, except for Robert F. Keith, Daniel J.
Lindquist, James M. Dykas, Kelley A. Christensen and Christopher R.
Fallow, were elected in 2005 for First Trust/FIDAC Mortgage Income
Fund and First Trust Strategic High Income Fund and in 2004 for the
other then-existing Funds. All Trustees and officers, except for
Robert F. Keith, Kelley A. Christensen and Christopher R. Fallow, were
elected in 2006 for First Trust Strategic High Income Fund II, First
Trust Tax-Advantaged Preferred Income Fund and First Trust/Aberdeen
Emerging Opportunity Fund at each Fund's respective organizational
meeting. 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. Kelley A. Christensen was elected Vice President of
all funds in the First Trust Fund Complex, including the then-existing
Funds, on December 10, 2006. Christopher R. Fallow was elected
Assistant Vice President of the then-existing Funds on December 10,
2006. Robert F. Keith was appointed or elected, as applicable, Trustee
on June 12, 2006 or at the Fund's organizational meeting as described
in the proposal above. All Trustees and officers were elected in 2007
for First Trust/Gallatin Specialty Finance and Financial Opportunities
Fund and First Trust Active Dividend Income Fund at each Fund's
respective organizational meeting.
-10-
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, First Trust/Four
Corners Senior Floating Rate Income Fund II and First Trust Strategic
High Income Fund III, 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(TM) Fund, each an open-end
investment company and an exchange-traded index fund with 17, 3 and 16
operating portfolios, respectively, advised by First Trust Advisors.
Trustees. Messrs. Erickson, Kadlec, Keith and Nielson are
Independent Trustees, and Mr. Bowen is an Interested Trustee, of each of
the funds in the First Trust Fund Complex. During the past five years,
none of the Independent Trustees, nor any of their immediate family
members, has ever 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-adviser
or any of their affiliates.
Officers. 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 58 portfolios) as they hold
with the Funds, except for Christopher R. Fallow. Mr. Fallow is an
officer of 14 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(TM) Fund.
-11-
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, 2007:
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. Thomas R. Kadlec Robert F. Keith Niel B. Nielson
Erickson
--------------------------- -------------------- ------------------- --------------------- ---------------------- -----------------
MACQUARIE/FIRST TRUST $10,001-$50,000 $10,001-$50,000 $10,001-$50,000 $10,001-$50,000 $1-$10,000
GLOBAL
INFRASTRUCTURE/UTILITIES (1,000 Shares) (573 Shares) (800 Shares) (2,158 Shares) (247 Shares)
DIVIDEND & INCOME FUND
--------------------------- -------------------- ------------------- --------------------- ---------------------- -----------------
ENERGY INCOME AND GROWTH $0 $1-$10,000 $10,001-$50,000 $0 $1-$10,000
FUND
(0 Shares) (300 Shares) (700 Shares) (0 Shares) (315 Shares)
--------------------------- -------------------- ------------------- --------------------- ---------------------- -----------------
FIRST TRUST ENHANCED $0 $1-$10,000 $10,001-$50,000 $0 $1-$10,000
EQUITY INCOME FUND
(0 Shares) (251 Shares) (850 Shares) (0 Shares) (249 Shares)
--------------------------- -------------------- ------------------- --------------------- ---------------------- -----------------
FIRST TRUST/ABERDEEN $10,001-$50,000 $10,001-$50,000 $10,001-$50,000 $10,001-$50,000 $1-$10,000
GLOBAL
OPPORTUNITY INCOME FUND (750 Shares) (830 Shares) (850 Shares) (2,246 Shares) (237 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) (314 Shares)
--------------------------- -------------------- ------------------- --------------------- ---------------------- -----------------
FIRST TRUST STRATEGIC $10,001-$50,000 $0 $0 $0 $1-$10,000
HIGH INCOME FUND
(1,000 Shares) (0 Shares) (0 Shares) (0 Shares) (336 Shares)
--------------------------- -------------------- ------------------- --------------------- ---------------------- -----------------
FIRST TRUST STRATEGIC $50,001-$100,000 $0 $0 $0 $1-$10,000
HIGH INCOME FUND II
(3,750 Shares) (0 Shares) (0 Shares) (0 Shares) (335 Shares)
--------------------------- -------------------- ------------------- --------------------- ---------------------- -----------------
FIRST TRUST TAX-ADVANTAGED $0 $0 $0 $0 $0
PREFERRED INCOME FUND
(0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
--------------------------- -------------------- ------------------- --------------------- ---------------------- -----------------
FIRST TRUST/ABERDEEN $10,001-$50,000 $0 $10,001-$50,000 $0 $1-$10,000
EMERGING OPPORTUNITY FUND
(2,000 Shares) (0 Shares) (1,000 Shares) (0 Shares) (200 Shares)
--------------------------- -------------------- ------------------- --------------------- ---------------------- -----------------
FIRST TRUST/GALLATIN $0 $0 $0 $0 $0
SPECIALTY FINANCE AND
FINANCIAL OPPORTUNITIES (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
FUND
--------------------------- -------------------- ------------------- --------------------- ---------------------- -----------------
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 Over $100,000 Over $100,000 Over $100,000 Over $100,000 $50,001-$100,000
EQUITY SECURITIES IN ALL
REGISTERED INVESTMENT (18,500 Shares) (6,160 Shares) (10,249 Shares) (6,579 Shares) (4,025 Shares)
COMPANIES IN FIRST TRUST
FUND COMPLEX OVERSEEN BY
TRUSTEE
--------------------------- -------------------- ------------------- --------------------- ---------------------- -----------------
-12-
As of December 31, 2007, 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-adviser or
principal underwriter of the Funds 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-adviser or
principal underwriter of the Funds, 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-adviser,
their parents or any subsidiaries of any of the foregoing.
As of December 31, 2007, the Trustees and Fund officers as a
group beneficially owned approximately 49,000 shares of the funds in the
First Trust Fund Complex (less than 1% of the shares outstanding). As of
December 31, 2007, the Trustees and Fund officers as a group beneficially
owned the following number of Shares of each Fund, which is less than 1%
of each Fund's Shares outstanding:
COMMON PREFERRED
SHARES SHARES
FUND OWNED OWNED
Macquarie/First Trust Global Infrastructure/Utilities
Dividend & Income Fund 4,778 N/A
Energy Income and Growth Fund 1,315 N/A
First Trust Enhanced Equity Income Fund 1,350 N/A
First Trust/Aberdeen Global Opportunity Income Fund 4,913 N/A
First Trust/FIDAC Mortgage Income Fund 964 N/A
First Trust Strategic High Income Fund 1,336 N/A
First Trust Strategic High Income Fund II 4,085 N/A
First Trust Tax-Advantaged Preferred Income Fund 0 0
First Trust/Aberdeen Emerging Opportunity Fund 3,200 N/A
First Trust/Gallatin Specialty Finance and Financial
Opportunities Fund 0 N/A
First Trust Active Dividend Income Fund 0 N/A
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, for all the trusts in the First Trust Fund
Complex, effective January 1, 2008, Dr. Erickson is paid annual
compensation of $10,000 to serve as the Lead Trustee, Mr. Keith is paid
annual compensation of $5,000 to serve as the chairman of the Audit
Committee, Mr. Kadlec is paid annual compensation of $2,500 to serve as
chairman of the Valuation Committee and Mr. Nielson is paid annual
compensation of $2,500 to serve as the chairman of the Nominating and
Governance Committee. The chairmen and the Lead Trustee will serve two
years before rotating to serve as a chairman of another committee or as
Lead Trustee. The additional compensation is allocated equally among each
of the trusts in the First Trust Fund Complex.
-13-
During the calendar year ended December 31, 2007, for all the
trusts in the First Trust Fund Complex, Mr. Kadlec was paid $10,000 to
serve as the Lead Trustee, Mr. Nielson was paid $5,000 to serve as
chairman of the Audit Committee and no additional compensation was paid
to Dr. Erickson for his service as chairman of the Nominating and
Governance Committee and the Valuation Committee. The annual compensation
was allocated equally among each of the trusts in the First Trust Fund
Complex. Independent Trustees are also reimbursed by the funds in the
First Trust Fund Complex for travel and out-of-pocket expenses in
connection with all meetings.
The number of Board meetings held by each Fund during its last
fiscal year is shown in Schedule 1 hereto. Each of the Trustees attended
all of the meetings of the Boards of Trustees of the Funds.
The aggregate fees and expenses paid to the Trustees by each
Fund for their respective fiscal years (including reimbursement for
travel and out-of-pocket expenses) amounted to the following:
AGGREGATE FEES
FUND AND EXPENSES PAID
Macquarie/First Trust Global Infrastructure/Utilities
Dividend & Income Fund $40,163
Energy Income and Growth Fund $40,030
First Trust Enhanced Equity Income Fund $39,950
First Trust/Aberdeen Global Opportunity Income Fund $40,032
First Trust/FIDAC Mortgage Income Fund $39,823
First Trust Strategic High Income Fund $40,013
First Trust Strategic High Income Fund II $40,077
First Trust Tax-Advantaged Preferred Income Fund $39,814
First Trust/Aberdeen Emerging Opportunity Fund $39,559
First Trust/Gallatin Specialty Finance and
Financial Opportunities Fund(1) $38,961
First Trust Active Dividend Income Fund(1) $38,912
(1) Each Fund commenced operations during its respective fiscal
year, and, as a result, aggregate fees and expenses paid to the Trustees
have been estimated to reflect payments for the current fiscal year.
-14-
The following table sets forth certain information regarding the
compensation of each Fund's Trustees for their respective fiscal years.
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.
AGGREGATE COMPENSATION FOR EACH FUND'S FISCAL YEAR
-------------------------------------------------------------------------------------------------------------------------------
INTERESTED INDEPENDENT
TRUSTEE TRUSTEES
--------------------------------------------------------- -------------- -----------------------------------------------------
FUND
James A. Richard E. Thomas R. Niel B. Robert F.
Bowen Erickson Kadlec Nielson Keith
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
MACQUARIE/FIRST TRUST GLOBAL $0 $9,812 $10,290 $10,249 $9,812
INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND(1)
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
ENERGY INCOME AND GROWTH FUND(1) $0 $9,812 $10,241 $10,165 $9,812
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST ENHANCED EQUITY INCOME FUND(2) $0 $9,673 $10,323 $10,281 $9,673
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST/ABERDEEN GLOBAL $0 $9,673 $10,382 $10,304 $9,673
OPPORTUNITY INCOME FUND(2)
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST/FIDAC $0 $9,812 $10,159 $10,040 $9,812
MORTGAGE INCOME FUND(3)
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST STRATEGIC $0 $9,812 $10,241 $10,148 $9,812
HIGH INCOME FUND(3)
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST STRATEGIC $0 $9,812 $10,264 $10,189 $9,812
HIGH INCOME FUND II(3)
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST TAX-ADVANTAGED $0 $9,812 $10,159 $10,031 $9,812
PREFERRED INCOME FUND(3)
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST/ABERDEEN $0 $9,673 $10,186 $10,027 $9,673
EMERGING OPPORTUNITY FUND(2)
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST/GALLATIN SPECIALTY FINANCE AND FINANCIAL $0 $9,861 $9,687 $9,760 $9,653
OPPORTUNITIES FUND(1), (4)
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
FIRST TRUST ACTIVE DIVIDEND INCOME FUND(1), (4) $0 $9,861 $9,687 $9,711 $9,653
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
TOTAL COMPENSATION FROM THE FIRST TRUST $0 $156,875 $166,875 $166,500 $154,375
FUND COMPLEX (5)
--------------------------------------------------------- -------------- ------------ ------------- ------------- -------------
(1) For fiscal year ended November 30, 2007.
(2) For fiscal year ended December 31, 2007.
(3) For fiscal year ended October 31, 2007.
(4) Each Fund commenced operations during its respective fiscal year, and
as a result, aggregate fees and expenses paid to the Trustees have been
estimated to reflect payments for the current fiscal year.
(5) For calendar year ended December 31, 2007.
-15-
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 www.ftportfolios.com. All of the Trustees attended the
previous year's annual meeting of shareholders for Common Shares for each
of the Funds, if one was held. This is the first Annual Meeting of
Shareholders for First Trust/Gallatin Specialty Finance and Financial
Opportunities Fund and First Trust Active Dividend Income Fund.
COMMITTEES
AUDIT COMMITTEE
Each Board of Trustees has an Audit Committee, which consists of
Messrs. Erickson, Kadlec, Keith and Nielson, all of whom are
"independent" as defined in the listing standards of the American Stock
Exchange and the New York Stock Exchange. Messrs. Kadlec and Keith serve
as Audit Committee Financial Experts. 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 the independent registered public accounting firm (subject
also to Board approval). The number of meetings of the Audit Committee
held by each Fund during its last fiscal year is shown in Schedule 1
hereto. Each of the Trustees attended all of the meetings of the Audit
Committee of the Board of Trustees of each Fund.
In carrying out its responsibilities, 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 Adviser 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. The chairman of the Audit Committee is
authorized to give such pre-approvals on behalf of the Audit Committee
for engagements of less than $25,000. Any decisions by the chairman to
grant pre-approvals are reported to the full Audit Committee at the next
regularly scheduled meeting.
AUDIT COMMITTEE REPORT
The role of the Audit Committees is to assist the Boards of
Trustees in their 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
Boards of Trustees on December 10, 2007, 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 the Funds' financial statements and expressing an opinion as to
their conformity with accounting principles generally accepted in the
United States of America.
-16-
In performing its oversight function, the Audit Committees
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
Tax-Advantaged Preferred Income Fund for the fiscal years ended October
31, 2007 at a meeting held on December 17, 2007; the Macquarie/First
Trust Global Infrastructure/Utilities Dividend & Income Fund, the Energy
Income and Growth Fund, the First Trust/Gallatin Specialty Finance and
Financial Opportunities Fund and the First Trust Active Dividend Income
Fund for the fiscal years ended November 30, 2007 at a meeting held on
January 23, 2008; 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 years ended
December 31, 2007 at a meeting held on February 20, 2008, and discussed
the audit of such financial statements with the independent auditors and
management.
In addition, the Audit Committees discussed with the independent
auditors the accounting principles applied by each Fund and such other
matters brought to the attention of the Audit Committee by the
independent auditors required by Statement on Auditing Standards No. 114,
The Auditor's Communication With Those Charged With Governance, as
currently modified or supplemented. The Audit Committees also received
from the independent auditors the written disclosures and letter required
by Independent Standards Board Standard No. 1, Independence Discussions
with Audit Committees, delineating relationships between the independent
auditors and each Fund and discussed the impact that any such
relationships may have on the objectivity and independence of the
independent auditors.
The members of each Fund's Audit Committee are not full-time
employees of the Fund and are not performing the functions of auditors or
accountants. As such, it is not the duty or responsibility of the Audit
Committee or its members to conduct "field work" or other types of
auditing or accounting reviews or procedures or to set auditor
independence standards. Members of each Fund's 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 the Funds' audited financial
statements and the discussions referred to above with Fund management and
Deloitte & Touche, and subject to the limitations on the responsibilities
and role of the Audit Committee as set forth in the Charter and discussed
above, the Audit Committee recommended to the Board the inclusion of each
Fund's audited financial statements for the years ended October 31,
November 30, and December 31, 2007 in its Annual Report dated October 31,
November 30, and December 31, 2007, respectively.
Submitted by the Audit Committee of the Funds:
Richard E. Erickson
Thomas R. Kadlec
Robert F. Keith
Niel B. Nielson
-17-
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.
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 Adviser for the following fees:
------------------------------ ------------------------ ------------------------ ----------------------- ------------------------
AUDIT FEES AUDIT RELATED FEES(1) TAX FEES(2) ALL OTHER FEES(3)
------------------------------ ------------------------ ------------------------ ----------------------- ------------------------
FUND 2006 2007 2006 2007 2006 2007 2006 2007
------------------------------ ----------- ------------ ----------- ------------ ----------- ----------- ------------ -----------
MACQUARIE/FIRST TRUST GLOBAL
INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND(4)
Fund $45,000 $89,700 $0 $2,700 $0 $4,350 $1,636 $1,185
Adviser N/A N/A $0 $2,700 $0 $0 $23,303 $16,769
------------------------------ ----------- ------------ ----------- ------------ ----------- ----------- ------------ -----------
ENERGY INCOME AND GROWTH
Fund(4)
Fund $54,750 $96,500 $0 $3,000 $11,000 $79,500 $1,617 $878
Adviser N/A N/A $0 $3,000 $0 $0 $39,111 $16,769
------------------------------ ----------- ------------ ----------- ------------ ----------- ----------- ------------ -----------
FIRST TRUST ENHANCED EQUITY
INCOME FUND(5)
Fund $35,000 $35,500 $0 $2,300 $4,725 $4,850 $2,768 $1,261
Adviser N/A N/A $0 $2,300 $0 $0 $32,611 $16,769
------------------------------ ----------- ------------ ----------- ------------ ----------- ----------- ------------ -----------
FIRST TRUST/ABERDEEN GLOBAL
OPPORTUNITY INCOME FUND(5)
Fund $40,000 $41,000 $0 $2,600 $4,200 $4,350 $3,570 $1,600
Adviser N/A N/A $0 $2,600 $0 $0 $32,611 $16,769
------------------------------ ----------- ------------ ----------- ------------ ----------- ----------- ------------ -----------
FIRST TRUST/FIDAC MORTGAGE
INCOME FUND(6)
Fund $48,000 $27,400 $0 $2,400 $4,000 $4,125 $2,332 $311
Adviser N/A N/A $0 $2,400 $0 $0 $107,730 $16,769
------------------------------ ----------- ------------ ----------- ------------ ----------- ----------- ------------ -----------
FIRST TRUST STRATEGIC HIGH
INCOME FUND(6)
Fund $40,000 $25,000 $0 $2,400 $4,000 $4,125 $4,202 $792
Adviser N/A N/A $0 $2,400 $0 $0 $107,730 $16,769
------------------------------ ----------- ------------ ----------- ------------ ----------- ----------- ------------ -----------
-18-
------------------------------ ------------------------ ------------------------ ----------------------- ------------------------
AUDIT FEES AUDIT RELATED FEES(1) TAX FEES(2) ALL OTHER FEES(3)
------------------------------ ------------------------ ------------------------ ----------------------- ------------------------
FUND 2006 2007 2006 2007 2006 2007 2006 2007
------------------------------ ----------- ------------ ----------- ------------ ----------- ----------- ------------ -----------
FIRST TRUST STRATEGIC HIGH
INCOME FUND II(6)
Fund $27,000 $25,000 $0 $2,400 $0 $4,125 $1,745 $12,864
Adviser N/A N/A $0 $2,400 $0 $0 $107,730 $16,769
------------------------------ ----------- ------------ ----------- ------------ ----------- ----------- ------------ -----------
FIRST TRUST TAX-ADVANTAGED
PREFERRED INCOME FUND(6)
Fund $35,000 $17,500 $0 $1,800 $0 $4,000 $0 $8,666
Adviser N/A N/A $0 $1,800 $0 $0 $23,306 $16,769
------------------------------ ----------- ------------ ----------- ------------ ----------- ----------- ------------ -----------
FIRST TRUST/ABERDEEN EMERGING
OPPORTUNITY FUND(5)
Fund $15,500 $41,000 $0 $2,600 $0 $4,350 $657 $446
Adviser N/A N/A $0 $2,600 $0 $0 $23,303 $16,769
------------------------------ ----------- ------------ ----------- ------------ ----------- ----------- ------------ -----------
FIRST TRUST/GALLATIN SPECIALTY
FINANCE AND FINANCIAL
OPPORTUNITIES FUND(7)
Fund N/A $55,000 N/A $0 N/A $0 N/A $0
Adviser N/A N/A N/A $0 N/A $0 N/A $0
------------------------------ ----------- ------------ ----------- ------------ ----------- ----------- ------------ -----------
FIRST TRUST ACTIVE DIVIDEND
INCOME FUND(8)
Fund N/A $40,500 N/A $0 N/A $0 N/A $0
Adviser N/A N/A N/A $0 N/A $0 N/A $0
------------------------------ ----------- ------------ ----------- ------------ ----------- ----------- ------------ -----------
(1) These fees were for additional audit work for the Fund.
(2) These fees were for tax consultation and tax preparation.
(3) These fees were for compliance consulting services.
(4) These fees were for the fiscal years ended November 30.
(5) These fees were for the fiscal years ended December 31.
(6) These fees were for the fiscal years ended October 31.
(7) These fees were for the period since inception on May 25, 2007
through November 30, 2007.
(8) These fees were for the period since inception on September 20, 2007
through November 30, 2007.
Non-Audit Fees
During each of the last two fiscal years of the Funds, Deloitte
& Touche has billed each Fund and the Adviser for the fees listed on the
following page. No entities controlling, controlled by, or under common
control with the Adviser provide ongoing services to any Fund.
-19-
AGGREGATE NON-AUDIT FEES
----------------------------------------------------------------- ------------------ ------------------
FUND 2006 2007
----------------------------------------------------------------- ------------------ ------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND(1)
Fund $1,636 $5,535
Adviser $48,305 $26,469
----------------------------------------------------------------- ------------------ ------------------
ENERGY INCOME AND GROWTH FUND(1)
Fund $12,451 $83,378
Adviser $70,286 $23,769
----------------------------------------------------------------- ------------------ ------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND(2)
Fund $7,493 $6,111
Adviser $63,786 $23,769
----------------------------------------------------------------- ------------------ ------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND(2)
Fund $7,770 $5,950
Adviser $63,786 $23,769
----------------------------------------------------------------- ------------------ ------------------
FIRST TRUST/FIDAC MORTGAGE INCOME FUND(3)
Fund $6,332 $4,436
Adviser $138,905 $23,769
----------------------------------------------------------------- ------------------ ------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND(3)
Fund $8,202 $4,917
Adviser $138,905 $23,769
----------------------------------------------------------------- ------------------ ------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II(3)
Fund $1,745 $16,989
Adviser $138,905 $23,769
----------------------------------------------------------------- ------------------ ------------------
FIRST TRUST TAX-ADVANTAGED PREFERRED INCOME FUND(3)
Fund $0 $12,666
Adviser $48,303 $23,769
----------------------------------------------------------------- ------------------ ------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND(2)
Fund $657 $4,796
Adviser $48,303 $23,796
----------------------------------------------------------------- ------------------ ------------------
FIRST TRUST/GALLATIN SPECIALTY FINANCE AND FINANCIAL
OPPORTUNITIES FUND(4)
Fund N/A $0
Adviser N/A $7,000
----------------------------------------------------------------- ------------------ ------------------
FIRST TRUST ACTIVE DIVIDEND INCOME FUND(5)
Fund N/A $0
Adviser N/A $0
----------------------------------------------------------------- ------------------ ------------------
(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 ending October 31.
(4) These fees were for the period since inception on May 25, 2007
through November 30, 2007.
(5) These fees were for the period since inception on
September 20, 2007 through November 30, 2007.
-20-
Pursuant to its charter and its Audit and Non-Audit Services
Pre-Approval Policy, amended as of September 21, 2007, the Audit
Committee of each Fund is responsible for the pre-approval of all audit
services and permitted non-audit services (including the fees and terms
thereof) to be performed for each Fund by its independent auditors. The
chairman of the Audit Committee is authorized to give such pre-approvals
on behalf of the Audit Committee up to $25,000 and report any such
pre-approval to the full Audit Committee.
The Audit Committee is also responsible for the pre-approval of
the independent auditor's engagements for non-audit services for the
Funds' Adviser, 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 auditor has provided non-audit services to the Funds' Adviser
(other than any sub-adviser whose role is primarily portfolio management
and is sub-contracted with or overseen by another investment adviser)
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 auditor's independence.
None of the Audit Fees, Audit Related Fees, Tax Fees, and All
Other Fees and Aggregate Non-Audit Fees for the Funds and the Adviser
disclosed in the tables previously set forth 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 determined that the
provision of non-audit services that were rendered to the Funds' Adviser
(not including any sub-adviser whose role is primarily portfolio
management and is sub-contracted with or overseen by another investment
adviser) 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.
OTHER COMMITTEES
The Boards of Trustees of the Funds have three other standing
committees: the Executive Committee (also serving as the Dividend and
Pricing Committee), the Nominating and Governance Committee and the
Valuation Committee. The Executive Committee, which meets between Board
meetings, is authorized to exercise all powers of and to act in the place
of the Board of Trustees to the extent permitted by each Fund's
Declaration of Trust and By-Laws. The members of the Executive Committee
also serve as a special committee of the Board of Trustees known as the
Dividend and Pricing Committee which is authorized to exercise all of the
powers and authority of the Board in respect of the declaration and
setting of dividends and the issuance and sale, through an underwritten
public offering, of the Shares of each Fund and all other such matters
relating to such financing, including determining the price at which such
Shares are to be sold and approval of the final terms of the underwriting
agreement, including approval of the members of the underwriting
syndicate. Effective January 1, 2008, Mr. Bowen and Dr. Erickson are
members of the Executive Committee. Prior to January 1, 2008, Messrs.
Bowen and Kadlec were 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. Each Fund's Executive
Committee met to authorize the Funds' dividend declarations and to
authorize the initial public offering of the applicable Funds.
-21-
Each Fund's Nominating and Governance Committee (the
"Committee") is composed entirely of Independent Trustees who are also
"independent directors" within the meaning of the listing standards of
the American and New York Stock Exchanges. Messrs. Erickson, Kadlec,
Keith and Nielson are members of the Committee. The purpose of the
Committee is to oversee matters related to the nomination of trustees
and, as necessary, the corporate governance of each Fund. The Committee
is responsible for, among other things, seeking, identifying and
nominating qualified candidates for election or appointment as trustees
in the event of a vacancy, consistent with criteria approved by the
Board, for the next annual meeting of shareholders; evaluating Board
performance and processes; reviewing Board committee assignments; and, to
the extent necessary or desirable, establishing corporate governance
guidelines and procedures. The Committee operates under a written charter
adopted and approved by the Board, a copy of which is available on the
Funds' website at www.ftportfolios.com. Effective January 1, 2008, Mr.
Nielson serves as chairman of the Committee. Prior to January 1, 2008,
Dr. Erickson served as chairman of the Committee. The number of meetings
of the Committee held by each Fund during its last fiscal year is shown
on Schedule 1 hereto.
If there is no vacancy on the Board, the Board will not actively
seek recommendations from other parties, including shareholders of the
Funds. When a vacancy on the Board occurs, the Committee may seek
recommendations for candidates from those sources it deems appropriate in
its discretion, including shareholders of the Funds. The Committee may
retain a search firm to identify candidates.
If a recommendation is received with satisfactorily completed
information regarding a candidate during a time when a vacancy exists on
the Board or during such other time as the Committee is accepting
recommendations, the recommendation will be forwarded to the chairman of
the Committee and outside counsel to the Independent Trustees.
Recommendations received at any other time will be kept on file until
such time as the Committee is accepting recommendations at which point
they may be considered for nomination.
In recruiting new trustees, the Committee seeks to recruit and
retain qualified independent trustees of high integrity, whose skills and
experience will enhance the Board's ability to effectively represent the
interests of the Funds' shareholders and oversee the wide range of
regulatory and business issues affecting the Funds. A candidate for
trustee must meet certain basic requirements, including relevant skills
and experience, time availability and if qualifying as a non-"interested
person" candidate, independence from the Funds and their investment
adviser or other service providers. The qualifications of a particular
candidate, however, may vary depending on the current composition of the
Board and the mix of skills and backgrounds of the incumbent trustees
since the Committee seeks to establish an effective Board with an
appropriate range of skills and experience, in the aggregate. In addition
to relevant skills and experience, all candidates must possess high
standards of personal integrity that are assessed on the basis of
personal interviews, recommendations, or direct knowledge by Committee
members. The review process may include, without limitation, personal
interviews, background checks, written submissions by the candidates and
third party references. Under no circumstances shall the Committee
evaluate persons recommended by a shareholder of the Funds on a basis
substantially different than that used for other persons recommended for
the same election or appointment of trustees. Each Fund has a retirement
policy in place that prohibits consideration for election as a Trustee of
persons age 72 or older. The Committee reserves the right to make the
final selection regarding the nomination of any trustees.
The Valuation Committee is responsible for the oversight of
valuation procedures of the Funds. Messrs. Erickson, Kadlec, Keith and
Nielson are members of the Valuation Committee. Effective January 1,
2008, Mr. Kadlec serves as chairman of the Valuation Committee. Prior to
January 1, 2008, Dr. Erickson served as chairman 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.
-22-
ADDITIONAL INFORMATION
SHAREHOLDER PROPOSALS
To be considered for presentation at the Joint Annual Meetings
of Shareholders of the Funds to be held in 2009, a shareholder proposal
submitted pursuant to Rule 14a-8 of the 1934 Act must be received at the
offices of the applicable Fund at 1001 Warrenville Road, Suite 300,
Lisle, Illinois 60532, not later than November 19, 2008.
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, 1001 Warrenville Road, Suite 300,
Lisle, Illinois 60532, Attn: W. Scott Jardine, not less than forty-five
(45) days nor more than sixty (60) days prior to the first anniversary
date of the date of the proxy statement released to shareholders for the
preceding year's annual meeting. However, if and only if the annual
meeting is not scheduled to be held within a period that commences thirty
(30) days before the first anniversary date of the annual meeting for the
preceding year and ends thirty (30) days after such anniversary date (an
annual meeting date outside such period being referred to herein as an
"Other Annual Meeting Date"), such Shareholder Notice must be given as
described above by the later of the close of business on (i) the date
forty-five (45) days prior to such Other Annual Meeting Date or (ii) the
tenth (10th) business day following the date such Other Annual Meeting
Date is first publicly announced or disclosed.
Any shareholder submitting a nomination of any person or persons
(as the case may be) for election as a trustee or trustees of a Fund is
required to deliver, as part of such Shareholder Notice: (i) a statement
in writing setting forth: (A) the name, age, date of birth, business
address, residence address and nationality of the person or persons to be
nominated; (B) the class or series and number of all shares of the Fund
owned of record or beneficially by each such person or persons, as
reported to such shareholder by such nominee(s); (C) any other
information regarding each such person required by paragraphs (a), (d),
(e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of
Rule 14a-101 (Schedule 14A) under the 1934 Act (or any successor
provision thereto); (D) any other information regarding the person or
persons to be nominated that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with
solicitation of proxies for election of trustees or directors pursuant to
Section 14 of the 1934 Act and the rules and regulations promulgated
thereunder; and (E) whether such shareholder believes any nominee is or
will be an "interested person" of the Fund (as defined in the 1940 Act)
and, if not an "interested person," information regarding each nominee
that will be sufficient for the Fund to make such determination; and (ii)
the written and signed consent of any person nominated to be named as a
nominee and to serve as a trustee if elected. In addition, the Trustees
may require any proposed nominee to furnish such other information as
they may reasonably require or deem necessary to determine the
eligibility of such proposed nominee to serve as a trustee.
Without limiting the foregoing, any shareholder who gives a
Shareholder Notice of any matter proposed to be brought before a
shareholder meeting (whether or not involving nominees for trustees) is
required to deliver, as part 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
-23-
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 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 outside counsel to the Independent Trustees for further
distribution as deemed appropriate by such persons.
INVESTMENT ADVISER, SUB-ADVISERS, ADMINISTRATORS AND TRANSFER AGENTS
First Trust Advisors L.P., 1001 Warrenville Road, Suite 300,
Lisle, Illinois 60532, serves as the Funds' investment adviser. Four
Corners Capital Management, LLC, 515 South Flower Street, Suite 1600, Los
Angeles, California 90071, and Macquarie Capital Investment Management,
LLC, 125 West 55th Street, New York, New York 10019, serve as the
investment sub-advisers 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-adviser to Energy Income and Growth Fund. Chartwell
Investment Partners, L.P., 1235 Westlakes Drive, Berwyn, Pennsylvania
19312, serves as the investment sub-adviser to First Trust Enhanced
Equity Income Fund. Aberdeen Asset Management, Inc., 300 SE 2nd Street,
Suite 820, Fort Lauderdale, Florida 33301, serves as the investment
sub-adviser to First Trust/Aberdeen Global Opportunity Income Fund and
First Trust/Aberdeen Emerging Opportunity Fund. Fixed Income Discount
Advisory Company, Inc., 1211 Avenue of the Americas, 29th Floor, New
York, New York 10036, serves as the investment sub-adviser to First
Trust/FIDAC Mortgage Income Fund. Valhalla Capital Partners, LLC, 2527
Nelson Miller Parkway, Suite 207, Louisville, Kentucky 40223, serves as
the investment sub-adviser to First Trust Strategic High Income Fund and
First Trust Strategic High Income Fund II. First Trust Portfolios L.P.,
an affiliate of First Trust Advisors, owns a minority interest in
Valhalla Capital Partners, LLC. Stonebridge Advisors LLC, 187 Danbury
Road, Wilton, Connecticut 06897, serves as the investment sub-adviser to
First Trust Tax-Advantaged Preferred Income Fund and is an affiliate of
First Trust Advisors L.P. Gallatin Asset Management, Inc., One North
Jefferson Avenue, St. Louis, Missouri 63103, serves as the investment
sub-adviser to First Trust/Gallatin Specialty Finance and Financial
Opportunities Fund. Aviance Capital Management, LLC, 2080 Ringling
-24-
Boulevard, Sarasota, Florida 34237, serves as the investment sub-adviser
to First Trust Active Dividend Income Fund. First Trust Portfolios L.P.
owns a minority interest in Aviance Capital Management, LLC.
PFPC acts as the administrator, accounting agent and transfer
agent to the Funds (other than First Trust Active Dividend Income Fund)
and is located at 4400 Computer Drive, Westborough, Massachusetts 01581.
PFPC is a leading provider of full service mutual fund shareholder and
record keeping services. In addition to its mutual fund transfer agent
and record keeping service, PFPC provides other services through its own
subsidiary business units.
J.P. Morgan Investor Services Co., located at 73 Tremont Street,
Boston, Massachusetts 02108, serves as the administrator and accountant
to First Trust Active Dividend Income Fund. AST, located at 59 Maiden
Lane, New York, New York 10038, serves as the transfer agent to First
Trust Active Dividend Income Fund.
SECTION 30(h) AND SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 30(h) of the 1940 Act and Section 16(a) of the 1934 Act
require the Funds' officers and Trustees, certain persons affiliated with
First Trust Advisors and any sub-adviser and persons who beneficially own
more than 10% of a Fund's Shares to file reports of ownership and changes
of ownership with the SEC, the American Stock Exchange 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, 2007,
November 30, 2007 and December 31, 2007, all such filing requirements
applicable to such persons were met except as noted below. For
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income
Fund, late Form 3 filings were made on behalf of Douglas M. Holthaus,
Ketei Marakool, Kristi A. Maher and Joseph D. McDermott. For Energy
Income and Growth Fund, late Form 3 filings were made on behalf of Eva
Pao, James Murchie, Linda Longville, Saul Ballasteros, Energy Income
Partners, LLC, Kristi A. Maher and Joseph D. McDermott. For First Trust
Enhanced Equity Income Fund, late Form 3 filings were made on behalf of
Bernard P. Schaffer, Timothy J. Riddle, Kevin A. Melich, G. Gregory
Hagar, Chartwell Investment Partners, L.P. and Joseph D. McDermott. For
First Trust/Aberdeen Global Opportunity Income Fund, late Form 3 filings
were made on behalf of Joseph D. McDermott and Robert Sellar. For First
Trust/FIDAC Mortgage Income Fund, late Form 3 filings were made on behalf
of Joseph D. McDermott. For First Trust Strategic High Income Fund, late
Form 3 filings were made on behalf of Matthew Hardin and Joseph D.
McDermott. For First Trust Strategic High Income Fund II, late Form 3
filings were made on behalf of Matthew Hardin and Joseph D. McDermott.
For First Trust Tax-Advantaged Preferred Income Fund, late Form 3 filings
were made on behalf of Joseph D. McDermott. All of these late Form 3
filings were due to administrative oversight and were not made in
conjunction with any purchase of securities of Funds in the First Trust
Fund Complex.
For First Trust Strategic High Income Fund II, nine late Form 4
filings representing nine transactions were made on behalf of Ronald
McAlister, an officer of First Trust Advisors, and one late Form 4 filing
representing one transaction was made on behalf of Scott Hall, also an
officer of First Trust Advisors.
-25-
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 Tax-Advantaged Preferred Income Fund was October
31, 2007. The fiscal year end for Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund, Energy Income and Growth
Fund, First Trust/Gallatin Specialty Finance and Financial Opportunities
Fund and First Trust Active Dividend Income Fund was November 30, 2007.
The fiscal year end for First Trust Enhanced Equity Income Fund, First
Trust/Aberdeen Global Opportunity Income Fund and First Trust/Aberdeen
Emerging Opportunity Fund was December 31, 2007.
ANNUAL REPORT DELIVERY
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 1001 Warrenville Road, Suite 300, Lisle, Illinois 60532 or
by calling (800) 988-5891.
Please note that only one annual or semi-annual report or proxy
statement 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
or proxy statement, or for instructions as to how to request a separate
copy of such documents or as to how to request a single copy if multiple
copies of such documents are received, shareholders should contact the
Fund at the address and phone number set forth above. Pursuant to a
request, a separate copy will be delivered promptly.
OTHER MATTERS TO COME BEFORE THE MEETING
No business other than the matters 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, 2008
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
-26-
SCHEDULE 1
NUMBER OF BOARD AND COMMITTEE MEETINGS
HELD DURING EACH FUND'S LAST FISCAL YEAR
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
FUND BOARD MEETINGS AUDIT EXECUTIVE NOMINATING AND
COMMITTEE COMMITTEE GOVERNANCE VALUATION
MEETINGS MEETINGS COMMITTEE COMMITTEE
MEETINGS MEETINGS
--------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
Macquarie/First Trust Global 7 8 5 4 4
Infrastructure/Utilities
Dividend & Income Fund
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
Energy Income and Growth Fund 9 7 4 4 4
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
First Trust Enhanced Equity Income 8 7 5 4 4
Fund
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
First Trust/Aberdeen Global 7 7 14 4 4
Opportunity Income Fund
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
First Trust/FIDAC Mortgage Income 6 6 11 4 4
Fund
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
First Trust Strategic High Income 6 6 15 4 4
Fund
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
First Trust Strategic High Income 6 6 12 4 4
Fund II
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
First Trust Tax-Advantaged 6 6 4 4 4
Preferred Income Fund
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
First Trust/Aberdeen Emerging 7 7 4 4 4
Opportunity Fund
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
First Trust/Gallatin Specialty 3 2 4 2 2
Finance and Financial
Opportunities Fund
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
First Trust Active Dividend Income 2 1 2 1 1
Fund
---------------------------------- ------------------ ----------------- ------------------ ----------------- ------------------
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.
A. Size and Membership Requirements.
1. The Committee shall be composed of at least three
members, all of whom shall be trustees of the Funds. Each member
of the Committee, and a Committee chairperson, shall be
appointed by the Board on the recommendation of the Nominating
and Governance Committee.
2. Each member of the Committee shall be independent
of the Fund and must be free of any relationship that, in the
opinion of the Board, would interfere with the exercise of
independent judgment as a Committee member. With respect to the
Funds which are closed-end funds or open-end exchange-traded
funds ("ETFs"), each member must meet the independence and
experience requirements of the New York Stock Exchange, NYSE
Arca, or the American Stock Exchange or the NASDAQ Stock Market
(as applicable), and Section 10A of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and Rule 10A-3
thereunder, and other applicable rules and regulations of the
Securities and Exchange Commission ("SEC"). Included in the
foregoing is the requirement that no member of the Committee be
an "interested person" of the Funds within the meaning of
Section 2(a)(19) of the Investment Company Act of 1940, as
amended (the "1940 Act"), nor shall any Committee member accept,
directly or indirectly, any consulting, advisory or other
compensatory fee from the Funds (except in the capacity as a
Board or committee member).
3. At least one member of the Committee shall have
been determined by the Board, exercising its business judgment,
to qualify as an "audit committee financial expert" as defined
by the SEC.
4. With respect to Funds whose shares are listed on
NYSE Arca or on the New York Stock Exchange, each member of the
Committee shall have been determined by the Board, exercising
its business judgment, to be "financially literate" as required
by the New York Stock Exchange or NYSE Arca (as applicable). In
addition, at least one member of the Committee shall have been
determined by the Board, exercising its business judgment, to
have "accounting or 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
American Stock Exchange 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 American Stock Exchange 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.
5. 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.
B. Frequency of Meetings.
The Committee will ordinarily meet once for every regular
meeting of the Board. The Committee may meet more or less frequently as
appropriate, but no less than twice per year.
C. Term of Office.
Committee members shall serve until they resign or are removed
or replaced by the Board.
III. RESPONSIBILITIES.
A. With respect to Independent Auditors:
1. The Committee shall be responsible for the
appointment or replacement (subject if applicable, to Board
and/or shareholder ratification), compensation, retention and
oversight of the work of any registered public accounting firm
engaged (including resolution of disagreements between
management and the auditor regarding financial reporting) for
the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for the Funds
("External Auditors"). The External Auditors shall report
directly to the Committee.
A-2
2. The Committee shall meet with the External
Auditors and Fund Management to review the scope, fees, audit
plans and staffing of the proposed audits for each fiscal year.
At the conclusion of the audit, the Committee shall review such
audit results, including the External Auditor's evaluation of
the Fund's financial and internal controls, any comments or
recommendations of the External Auditors, any audit problems or
difficulties and Fund Management's response, including any
restrictions on the scope of the External Auditor's activities
or on access to requested information, any significant
disagreements with Fund Management, any accounting adjustments
noted or proposed by the auditor but not made by the Fund, any
communications between the audit team and the audit firm's
national office regarding auditing or accounting issues
presented by the engagement, any significant changes required
from the originally planned audit programs and any adjustments
to the financial statements recommended by the External
Auditors.
3. The Committee shall meet with the External
Auditors in the absence of Fund Management, as necessary.
4. The Committee shall pre-approve all audit services
and permitted non-audit services (including the fees and terms
thereof) to be performed for the Fund by its External Auditors.
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.
5. The Committee shall pre-approve the External
Auditor's engagements for non-audit services to Fund Management
and any entity controlling, controlled by or under common
control with Fund Management that provides ongoing services to
the Fund, if the engagement relates directly to the operations
and financial reporting of the Fund, subject to the de minimis
exceptions for non-audit services described in Rule 2-01 of
Regulation S-X. The Chairman of the Committee is authorized to
give such pre-approvals on behalf of the Committee, and shall
report any such pre-approval to the full Committee.
6. If the External Auditors have provided non-audit
services to Fund Management and any entity controlling,
controlled by or under common control with Fund Management that
provides ongoing services to the Fund that were not pre-approved
pursuant to the de minimis exception, the Committee shall
consider whether the provision of such non-audit services is
compatible with the External Auditor's independence.
7. The Committee shall obtain and review a report
from the External Auditors at least annually (including a formal
written statement delineating all relationships between the
auditors and the Fund consistent with Independence Standards
Board Standard No. 1 as may be amended, restated, modified or
replaced) regarding (a) the External Auditor's internal
quality-control procedures; (b) any material issues raised by
the most recent internal quality-control review, or peer review,
of the firm, or by an inquiry or investigation by governmental
or professional authorities within the preceding five years,
respecting one or more independent audits carried out by the
firm; (c) any steps taken to deal with any such issues; and (d)
the External Auditor's independence, including all relationships
between the External Auditors and the Fund and its affiliates;
and evaluating the qualifications, performance and independence of
A-3
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.
8. The Committee shall review reports and other
information provided to it by the External Auditors regarding
any illegal acts that the External Auditors should discover
(whether or not perceived to have a material effect on the
Fund's financial statements), in accordance with and as required
by Section 10A(b) of the Exchange Act.
9. The Committee shall ensure the rotation of the
lead (or concurring) audit partner having primary responsibility
for the audit and the audit partner responsible for reviewing
the audit as required by law, and further considering the
rotation of the independent auditor firm itself.
10. The Committee shall establish and recommend to the
Board for ratification a policy of the Funds with respect to the
hiring of employees or former employees of the External Auditors
who participated in the audits of the Funds' financial
statements.
11. The Committee shall take (and, where appropriate,
recommend that the Board take) appropriate action to oversee the
independence of the External Auditors.
12. The Committee shall report regularly to the Board
on the results of the activities of the Committee, including any
issues that arise with respect to the quality or integrity of
the Funds' financial statements, the Funds' compliance with
legal or regulatory requirements, the performance and
independence of the Funds' External Auditors, or the performance
of the internal audit function, if any.
B. With respect to Fund Financial Statements:
1. The Committee shall meet to review and discuss
with Fund Management and the External Auditors the annual
audited financial statements of the Funds, major issues
regarding accounting and auditing principles and practices, and
the Funds' disclosures under "Management's Discussion and
Analysis," and shall meet to review and discuss with Fund
Management the semi-annual financial statements of the Funds and
the Funds' disclosures under "Management's Discussion and
Analysis."
2. The Committee shall review and discuss reports,
both written and oral, from the External Auditors or Fund
Management regarding (a) all critical accounting policies and
practices to be used; (b) all alternative treatments of
financial information within generally accepted accounting
principles ("GAAP") for policies and practices that have been
discussed with management, including the ramifications of the
use of such alternative treatments and disclosures and the
treatment preferred by the External Auditors; (c) other material
written communications between the External Auditors and
management, such as any management letter or schedule of
unadjusted differences; and (d) all non-audit services provided
A-4
to any entity in the investment company complex (as defined in
Rule 2-01 of Regulation S-X) that were not pre-approved by the
Committee.
3. The Committee shall review disclosures made to the
Committee by the Funds' principal executive officer and
principal financial officer during their certification process
for the Funds' periodic reports about any significant
deficiencies in the design or operation of internal controls or
material weaknesses therein and any fraud involving management
or other employees who have a significant role in the Funds'
internal controls.
4. The Committee shall discuss with the External
Auditors the matters required to be discussed by Statement of
Auditing Standards ("SAS") No. 90, Audit Committee
Communications (which amended SAS No. 61, Communication with
Audit Committees), that arise during the External Auditor's
review of the Funds' financial statements.
5. The Committee shall review and discuss with
management and the External Auditors (a) significant financial
reporting issues and judgments made in connection with the
preparation and presentation of the Funds' financial statements,
including any significant changes in the Funds' selection or
application of accounting principles and any major issues as to
the adequacy of the Funds' internal controls and any special
audit steps adopted in light of material control deficiencies,
and (b) analyses prepared by Fund Management or the External
Auditors setting forth significant financial reporting issues
and judgments made in connection with the preparation of the
financial statements, including analyses of the effects of
alternative GAAP methods on the financial statements.
6. The Committee shall review and discuss with
management and the External Auditors the effect of regulatory
and accounting initiatives on the Funds' financial statements.
7. The Committee shall discuss with Fund Management
the Funds' press releases regarding financial results and
dividends, as well as financial information and earnings
guidance provided to analysts and rating agencies. This
discussion may be done generally, consisting of discussing the
types of information to be disclosed and the types of
presentations to be made. The Chairman of the Committee shall be
authorized to have these discussions with Fund Management on
behalf of the Committee, and shall report to the Committee
regarding any such discussions.
8. The Committee shall discuss with Fund Management
the Funds' major financial risk exposures and the steps Fund
Management has taken to monitor and control these exposures,
including the Funds' risk assessment and risk management
policies and guidelines. In fulfilling its obligations under
this paragraph, the Committee may, as applicable, review in a
general manner the processes other Board committees have in
place with respect to risk assessment and risk management.
C. With respect to serving as a Qualified Legal Compliance
Committee:
1. The Committee shall serve as the Funds' "qualified
legal compliance committee" ("QLCC") within the meaning of the
rules of the SEC and, in that regard, the following shall apply.
A-5
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 1001 Warrenville Road,
Suite 300, Lisle, Illinois 60532, 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:
o Notify the full Board;
o 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
o Retain such additional expert
personnel as the Committee deems necessary.
iv. At the conclusion of any such
investigation, the Committee shall:
o Recommend, by majority vote,
that the Fund implement an appropriate
response to evidence of a material violation;
and
o Inform the chief legal officer
and the chief executive officer (or the
equivalents thereof) and the Board of the
results of any such investigation and the
appropriate remedial measures to be adopted.
2. The Committee shall take all other action that it
deems appropriate in the event that the Fund fails in any
material respect to implement an appropriate response that the
Committee, as the QLCC, has recommended the Fund take.
D. Other Responsibilities:
1. The Committee shall receive, retain and handle
complaints received by the 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
A-6
other provider of accounting-related services for the Funds. All
such complaints and concerns shall be handled in accordance with
the Committee's procedures for operating as a QLCC, outlined in
III.C above.
2. The Committee shall review, with fund counsel and
independent legal counsel, any legal matters that could have
significant impact on the Fund's financial statements or
compliance policies and the findings of any examination by a
regulatory agency as they relate to financial statement matters.
3. The Committee shall review and reassess the
adequacy of this charter on an annual basis and provide a
recommendation to the Board for approval of any proposed changes
deemed necessary or advisable by the Committee.
4. The Committee shall evaluate on an annual basis
the performance of the Committee.
5. The Committee shall review with the External
Auditors and with Fund Management the adequacy and effectiveness
of the Funds' internal accounting and financial controls.
6. The Committee shall discuss with Fund Management
and the External Auditors any correspondence with regulators or
governmental agencies that raise material issues regarding the
Funds' financial statements or accounting policies.
7. The Committee shall obtain any reports from Fund
Management with respect to the Funds' policies and procedures
regarding compliance with applicable laws and regulations. The
Committee shall perform other special reviews, investigations or
oversight functions as requested by the Board and shall receive
and review periodic or special reports issued on
exposure/controls, irregularities and control failures related
to the Funds.
8. The Committee shall prepare any report of the
Committee required to be included in a proxy statement for a
Fund.
9. The Committee may request any officer or employee
of a Fund or Fund Management, independent legal counsel, fund
counsel and the External Auditors to attend a meeting of the
Committee or to meet with any members of, or consultants to, the
Committee.
10. The Committee shall maintain minutes of its
meetings.
11. The Committee shall perform such other functions
and have such powers as may be necessary or appropriate in the
efficient and lawful discharge of its responsibilities.
IV. AUTHORITY TO ENGAGE ADVISERS.
The Committee may engage independent counsel and other advisers,
as it determines necessary to carry out its duties. The Funds' External
Auditors shall have unrestricted accessibility at any time to Committee
members.
A-7
V. FUNDING PROVISIONS.
A. The Committee shall determine the:
1. Compensation to any independent registered public
accounting firm engaged for the purpose of preparing or issuing
an audit report or performing other audit, review or attest
services for a Fund; and
2. Compensation to any advisers employed by the
Committee.
B. The expenses enumerated in this Article V and all
necessary and appropriate administrative expenses of the
Committee shall be paid by the applicable Fund or Fund
Management.
VI. MANAGEMENT AND EXTERNAL AUDITOR'S RESPONSIBILITIES.
A. Fund Management has the primary responsibility for
establishing and maintaining systems for accounting, reporting,
disclosure and internal controls. The External Auditors have the primary
responsibility to plan and implement an audit, with proper consideration
given to the accounting, reporting and internal controls. All External
Auditors engaged for the purpose of preparing or issuing an audit report
or performing other audit, review or attest services for the Funds shall
report directly to the Committee. The External Auditors' ultimate
accountability is to the Board and the Committee, as representatives of
shareholders.
B. While the Committee has the responsibilities and powers set
forth in this Charter, it is not the duty of the Committee to plan or
conduct audits or to determine that the Funds' financial statements are
complete and accurate and are in accordance with GAAP, nor is it the duty
of the Committee to assure compliance with laws and regulations and/or
the Funds' Code of Ethics.
C. In discharging its responsibilities, the Committee and its
members are entitled to rely on information, opinions, reports, or
statements, including financial statements and other financial data, if
prepared or presented by: (1) one or more officers of a Fund; (2) legal
counsel, public accountants, or other persons as to matters the Committee
member reasonably believes are within the person's professional or expert
competence; or (3) a Board committee of which the Committee member is not
a member.
Amended: December 10, 2007
A-8
[BLANK BACK COVER]
PROXY CARD
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE
BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------
Proxy -- FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
--------------------------------------------------------------------------
PROXY SOLICITED BY THE BOARD OF TRUSTEES
ANNUAL MEETING ON APRIL 14, 2008
The undersigned holder of Commom Shares of the First Trust/Aberdeen Emerging
Opportunity 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., 1001
Warrenville Road, Suite 300, Lisle, IL 60532, at 4:00 p.m. Central time on the
date indicated above, and any adjournments or postponenments thereof. The
undersigned hereby acknowledges receipt of the Notice of Joint Annual Meetings
of Shareholders and Joint Proxy Statement dated March 18, 2008, and hereby
instructs said attorneys and proxies to vote said shares as indicated hereon. In
their discretion, the proxies are authorized to vote upon such other business as
may properly come before the Meeting. A majority of the proxies present and
acting at the Meeting in person or by substitute (or, if only one shall be so
present, then that one) shall have and may exercise all of the power and
authority of said proxies hereunder. The undersigned hereby revokes any proxy
previously given.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE NOMINEE SET FORTH.
PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
FIRST TRUST/ABERDEEN
EMERGING OPPORTUNITY FUND
--------------------------------------------------------------------------------
Annual Meeting Proxy Card
--------------------------------------------------------------------------------
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE
BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
--------------------------------------------------------------------------------
A. Election of Trustee -- The Board of Trustees recommends a vote FOR the
nominee listed.
1. Nominee: For Withhold
01 - Robert F. Keith* [ ] [ ]
Class I (Expiring 2011)
* To elect the Trustee for a three-year term, by holders of Common Shares,
voting as a single class.
B. Non-Voting Items
Change of Address -- Please print your new address below.
Comments -- Please print your comments below.
MEETING ATTENDANCE
Mark the box to the right
if you plan to attend the
Annual Meeting. [ ]
C. Authorized Signature(s) -- 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.
Date (mm/dd/yyyy) -- Please print date below.
____/____/____
Signature 1 -- Please keep signature within the box.
_______________________________________
Signature 2 -- Please keep signature within the box.
________________________________________