0001445546-18-001403.txt : 20180315
0001445546-18-001403.hdr.sgml : 20180315
20180315145837
ACCESSION NUMBER: 0001445546-18-001403
CONFORMED SUBMISSION TYPE: DEF 14A
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 20171231
FILED AS OF DATE: 20180315
DATE AS OF CHANGE: 20180315
EFFECTIVENESS DATE: 20180315
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND
CENTRAL INDEX KEY: 0001646109
IRS NUMBER: 000000000
STATE OF INCORPORATION: MA
FILING VALUES:
FORM TYPE: DEF 14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 811-23072
FILM NUMBER: 18692145
BUSINESS ADDRESS:
STREET 1: 120 EAST LIBERTY DRIVE, SUITE 400
CITY: WHEATON
STATE: IL
ZIP: 60187
BUSINESS PHONE: 630-765-8000
MAIL ADDRESS:
STREET 1: 120 EAST LIBERTY DRIVE, SUITE 400
CITY: WHEATON
STATE: IL
ZIP: 60187
DEF 14A
1
fdeu_def14a.txt
DEFINITIVE PROXY STATEMENT
As filed with the Securities and Exchange Commission on March 15, 2018.
===============================================================================
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under ss. 240.14a-12
First Trust Dynamic Europe Equity Income Fund
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:(1)
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
March 15, 2018
Dear Shareholders:
I am writing to notify you of an important special meeting (referred to as
the "Meeting") of the shareholders of First Trust Dynamic Europe Equity Income
Fund (the "Fund"). The Meeting will be held at the Austin, Texas offices of
First Trust Advisors L.P., 500 W. 5th Street, Suite 9202, Austin, Texas 78701,
on Monday, April 23, 2018, at 11:45 a.m. Central Time.
At the Meeting, you will be asked (1) to consider and vote on a proposal
to approve a new investment sub-advisory agreement (the "New Agreement") among
the Fund, First Trust Advisors L.P. and Janus Capital Management LLC ("JCM"),
and (2) to transact such other business as may properly come before the Meeting
and any adjournments or postponements thereof.
Currently, Henderson Global Investors (North America) Inc. ("HGINA"), an
affiliate of JCM, serves as the Fund's investment sub-adviser. As described in
the accompanying Proxy Statement, the May 2017 merger of Henderson Group plc,
the parent company of HGINA, with Janus Capital Group Inc., the parent company
of JCM, resulted in the formation of Janus Henderson Group plc, doing business
as Janus Henderson Investors. As a result of various organizational changes
being effected in conjunction with this merger, the transition from HGINA to JCM
as the Fund's sub-adviser is being proposed. The change in sub-adviser from
HGINA to JCM may be deemed to be an "assignment" (as defined in the Investment
Company Act of 1940, as amended) of the current investment sub-advisory
agreement with HGINA, which may result in the automatic termination of that
investment sub-advisory agreement. Accordingly, the Board of Trustees of the
Fund has approved the New Agreement, which will take effect upon shareholder
approval. It is important to note that the management, operations, governance
and investment functions of HGINA and JCM are substantially the same. Further,
the same portfolio management team currently providing sub-advisory services to
the Fund will continue to do so. In addition, there will be no change to the
sub-advisory fee rate. The Board of Trustees of the Fund is recommending that
shareholders of the Fund approve the New Agreement.
YOUR VOTE IS IMPORTANT. Please take a moment now to vote, either by
completing and returning your proxy card in the enclosed postage-paid envelope,
by telephone or through the Internet. Your prompt response will be much
appreciated.
We appreciate your participation in this important Meeting.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Board
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IF YOU NEED ANY ASSISTANCE, OR HAVE ANY QUESTIONS REGARDING THE PROPOSAL OR HOW
TO VOTE YOUR SHARES, PLEASE CALL THE FUND'S PROXY SOLICITOR, AST FUND SOLUTIONS,
LLC, AT (800) 284-1755 WEEKDAYS FROM 9:00 A.M. TO 10:00 P.M. EASTERN TIME.
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FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND
120 EAST LIBERTY DRIVE, SUITE 400
WHEATON, ILLINOIS 60187
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 23, 2018
AT
500 W. 5TH STREET
SUITE 9202
AUSTIN, TEXAS 78701
March 15, 2018
To the Shareholders of First Trust Dynamic Europe Equity Income Fund:
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of First Trust Dynamic Europe Equity Income Fund (the "Fund"), a
Massachusetts business trust, will be held at the Austin, Texas offices of First
Trust Advisors L.P., 500 W. 5th Street, Suite 9202, Austin, Texas 78701, on
Monday, April 23, 2018, at 11:45 a.m. Central Time, for the following purposes:
1. To approve a new investment sub-advisory agreement among the Fund,
First Trust Advisors L.P., as investment adviser, and Janus Capital Management
LLC, as investment sub-adviser.
2. To transact such other business as may properly come before the Meeting
or any adjournments or postponements thereof.
The Board of Trustees of the Fund has fixed the close of business on
February 2, 2018 as the record date for the determination of shareholders of the
Fund 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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IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. IN ORDER TO
AVOID DELAY AND TO ENSURE THAT YOUR SHARES ARE REPRESENTED, PLEASE VOTE AS
PROMPTLY AS POSSIBLE. YOU MAY VOTE EASILY AND QUICKLY BY MAIL, TELEPHONE OR
THROUGH THE INTERNET. TO VOTE BY MAIL, PLEASE COMPLETE AND MAIL YOUR PROXY CARD
IN THE ENCLOSED POSTAGE-PAID RETURN ENVELOPE. ALTERNATIVELY, SHAREHOLDERS MAY
VOTE BY TELEPHONE OR THROUGH THE INTERNET BY FOLLOWING THE INSTRUCTIONS ON THE
PROXY CARD. IF YOU NEED ANY ASSISTANCE, OR HAVE ANY QUESTIONS REGARDING THE
PROPOSAL OR HOW TO VOTE YOUR SHARES, PLEASE CALL THE FUND'S PROXY SOLICITOR, AST
FUND SOLUTIONS, LLC, AT (800) 284-1755 WEEKDAYS FROM 9:00 A.M. TO 10:00 P.M.
EASTERN TIME.
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FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND
120 EAST LIBERTY DRIVE, SUITE 400
WHEATON, ILLINOIS 60187
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 23, 2018
AT
500 W. 5TH STREET
SUITE 9202
AUSTIN, TEXAS 78701
PROXY STATEMENT
MARCH 15, 2018
THIS PROXY STATEMENT AND THE ENCLOSED PROXY CARD WILL FIRST BE MAILED TO
SHAREHOLDERS ON OR ABOUT MARCH 22, 2018.
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees (the "Board of Trustees" or the "Board") of
First Trust Dynamic Europe Equity Income Fund (the "Fund"), a Massachusetts
business trust, for use at a Special Meeting of Shareholders of the Fund to be
held on Monday, April 23, 2018, at 11:45 a.m. Central Time, at the Austin, Texas
offices of First Trust Advisors L.P. ("First Trust Advisors" or the "Advisor"),
the investment adviser to the Fund, located at 500 W. 5th Street, Suite 9202,
Austin, Texas 78701, and at any adjournments or postponements thereof
(collectively, the "Meeting"). A Notice of Special Meeting of Shareholders and a
proxy card accompany this Proxy Statement.
The close of business on February 2, 2018 has been fixed as the record
date (the "Record Date") for the determination of shareholders entitled to
notice of and to vote at the Meeting and any adjournments or postponements
thereof.
As discussed more fully below, shareholders of the Fund are being asked:
1. To approve a new investment sub-advisory agreement (the "New
Sub-Advisory Agreement") among the Fund, First Trust Advisors L.P., as
investment adviser, and Janus Capital Management LLC, as investment
sub-adviser.
2. To transact such other business as may properly come before the
Meeting or any adjournments or postponements thereof.
GENERAL INFORMATION
The Fund has one class of shares of beneficial interest, par value $0.01
per share, known as common shares ("Shares"). On the Record Date, the Fund had
17,231,908 Shares outstanding. Shares of the Fund are listed on the New York
Stock Exchange ("NYSE") under the ticker symbol FDEU. Shareholders of record on
the Record Date are entitled to one vote for each full Share the shareholder
owns and a proportionate fractional vote for any fraction of a Share the
shareholder owns.
For shareholders voting by mail, if the enclosed proxy card is properly
executed and returned in time to be voted at the Meeting, the Shares represented
thereby will be voted in accordance with the instructions marked thereon, or, if
no instructions are marked thereon, will be voted in the discretion of the
persons named on the proxy card. Accordingly, unless instructions to the
contrary are marked thereon, a properly executed and returned proxy will be
voted FOR the Proposal, and at the discretion of the named proxies on any other
matters that may properly come before the Meeting, as deemed appropriate. Any
shareholder who has given a proxy has the right to revoke it at any time prior
to its exercise either by attending the Meeting and voting his or her Shares in
person, or by timely submitting a letter of revocation or a later-dated proxy to
the Fund at its address above. A list of shareholders entitled to notice of and
to be present and to vote at the Meeting will be available at the Advisor's
Austin, Texas offices, located at 500 W. 5th Street, Austin, Texas 78701, for
inspection by any shareholder during regular business hours prior to the
Meeting. Shareholders will need to show valid identification and proof of Share
ownership to be admitted to the Meeting or to inspect the list of shareholders.
Under the By-Laws of the Fund, a quorum is constituted by the presence in
person or by proxy of the holders of thirty-three and one-third percent
(33-1/3%) of the voting power of the outstanding Shares entitled to vote on a
matter. For the purposes of establishing whether a quorum is present with
respect to the Fund, all Shares present and entitled to vote, including
abstentions and broker non-votes, shall be counted. Any meeting of shareholders
may be postponed prior to the meeting with notice to the shareholders entitled
to vote at that meeting. Any meeting of shareholders may, by action of the
chairman of the meeting, be adjourned to a time and place announced at the
meeting to permit further solicitation of proxies without further notice with
respect to one or more matters to be considered at such meeting, whether or not
a quorum is present with respect to such matter. In addition, upon motion of the
chairman of the meeting, the question of adjournment may be submitted to a vote
of the shareholders, and in that case, any adjournment must be approved by the
vote of holders of a majority of the Shares present and entitled to vote with
respect to the matter or matters adjourned, and without further notice if the
time and place of the adjourned meeting are announced at the meeting. Unless a
proxy is otherwise limited in this regard, any Shares present and entitled to
vote at a meeting, including broker non-votes, may, at the discretion of the
proxies named therein, be voted in favor of such an adjournment.
Broker-dealers holding Shares in "street name" for the benefit of their
customers and clients may request voting instructions from such customers and
clients. Pursuant to certain rules promulgated by the NYSE that govern voting by
such broker-dealers, a broker-dealer holding shares of record for a beneficial
owner may not exercise discretionary voting power with respect to certain
non-routine matters, including the approval of a new investment management
agreement.
The solicitation of proxies will be largely by mail, but may include
telephonic, electronic or oral communication by officers and service providers
of the Fund, as well as affiliates of such service providers. A proxy
solicitation firm, AST Fund Solutions, LLC, has also been engaged to provide
proxy solicitation services, including mail and tabulation services, as well as
services to facilitate mail, telephone and Internet voting, at a cost which is
expected to be approximately $58,500. This cost, as well as the cost of
preparing, printing and mailing the enclosed proxy, accompanying notice and this
Proxy Statement, and all other costs in connection with the solicitation of
proxies to be voted at the Meeting will be borne by Janus Capital Management LLC
("JCM"). JCM will also reimburse brokerage firms and others for their expenses
in forwarding proxy solicitation materials to the person(s) for whom they hold
Shares of the Fund.
-2-
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SHAREHOLDER MEETING TO BE HELD ON APRIL 23, 2018. THIS PROXY STATEMENT IS
AVAILABLE ON THE INTERNET AT
HTTPS://WWW.FTPORTFOLIOS.COM/LOADCONTENT/GEADRCTZGHAY. THE FUND'S MOST RECENT
ANNUAL AND SEMI-ANNUAL REPORTS ARE ALSO AVAILABLE ON THE INTERNET AT
HTTPS://WWW.FTPORTFOLIOS.COM. TO FIND A REPORT, SELECT THE FUND UNDER THE
"CLOSED-END FUNDS" TAB, SELECT THE "NEWS & LITERATURE" LINK, AND GO TO THE
"QUARTERLY/SEMI-ANNUAL OR ANNUAL REPORTS" HEADING. IN ADDITION, THE FUND WILL
FURNISH, WITHOUT CHARGE, COPIES OF ITS MOST RECENT ANNUAL AND SEMI-ANNUAL
REPORTS TO ANY SHAREHOLDER UPON REQUEST. TO REQUEST A COPY, PLEASE WRITE TO
FIRST TRUST ADVISORS L.P., AT 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON,
ILLINOIS 60187, OR CALL TOLL-FREE (800) 988-5891.
YOU MAY CALL TOLL-FREE (800) 988-5891 FOR INFORMATION ON HOW TO OBTAIN
DIRECTIONS TO BE ABLE TO ATTEND THE MEETING AND VOTE IN PERSON.
-3-
PROPOSAL: APPROVAL OF A NEW INVESTMENT SUB-ADVISORY AGREEMENT FOR THE FUND
BACKGROUND AND REASON FOR VOTE
At the Meeting, shareholders will be asked to approve the New Sub-Advisory
Agreement for the Fund with Janus Capital Management LLC (previously defined
as"JCM"). Currently, Henderson Global Investors (North America) Inc. ("HGINA"),
an indirect wholly-owned subsidiary of Janus Henderson Group plc ("Janus
Henderson") and affiliate of JCM located at 311 S. Wacker Drive, Suite 6000,
Chicago, Illinois 60606, serves as the investment sub-adviser to the Fund
pursuant to an investment sub-advisory agreement among the Advisor, HGINA and
the Fund (the "Current Sub-Advisory Agreement"). In May 2017, the merger of
Henderson Group plc, the parent company of HGINA, with Janus Capital Group Inc.,
the parent company of JCM, resulted in the formation of Janus Henderson Group
plc, doing business as Janus Henderson Investors. As a result of various
organizational changes being effected in conjunction with this merger, the
transition from HGINA to JCM as the Fund's sub-adviser is being proposed. The
change in sub-adviser from HGINA to JCM may be deemed to be an "assignment" (as
defined in the Investment Company Act of 1940, as amended (the "1940 Act")) of
the Current Sub-Advisory Agreement. Section 15 of the 1940 Act requires, among
other things, that any investment advisory agreement, which includes an
investment sub-advisory agreement, provide for its automatic termination in the
event of its "assignment." Accordingly, because the Current Sub-Advisory
Agreement may automatically terminate as a result of the transition to JCM,
shareholders are being asked to approve a new investment sub-advisory agreement
among the Fund, the Advisor and JCM.
In anticipation of the transition of sub-advisory services from HGINA to
JCM, the Board held a meeting on January 18, 2018 (the "Board Meeting"), at
which, after careful consideration, including of presentations from
representatives of JCM (see "BOARD CONSIDERATIONS" below), the Trustees
determined that it would be in the best interests of the Fund for JCM to act as
the investment sub-adviser to the Fund. Accordingly, at the Board Meeting, the
Board, including a majority of the Trustees who are not "interested persons" (as
defined in the 1940 Act) (the "Independent Trustees") approved, subject to
shareholder approval, the New Sub-Advisory Agreement. It is important to note
that the management, operations, governance and investment functions of HGINA
and JCM are substantially the same. Further, the same portfolio management team
currently providing sub-advisory services to the Fund will continue to do so. In
addition, there will be no change to the sub-advisory fee rate.
INFORMATION ABOUT JCM
JCM is an investment adviser registered with the Securities and Exchange
Commission. JCM offers U.S. equity, global and international equity, fixed
income, asset allocation and alternative investment strategies. As of September
19, 2017, JCM had approximately $149 billion in assets under management on a
discretionary basis. JCM, through its predecessors, has provided investment
management services since 1969 and has been registered with the Securities and
Exchange Commission since 1978.
Janus Capital Group Inc. holds 95% of the membership interests of JCM; the
remaining 5% are held by Janus Management Holdings Corporation, a wholly-owned
subsidiary of Janus Capital Group Inc. Janus Capital Group Inc. is a
wholly-owned subsidiary of Janus Henderson, a publicly-traded company that is
listed on the NYSE and the Australian Securities Exchange. The address of each
of JCM, Janus Capital Group Inc., Janus Management Holdings Corporation and
Janus Henderson is 151 Detroit Street, Denver, Colorado 80206.
-4-
The names, positions with JCM and principal occupations of the persons who
are principal executive officers and directors of JCM are listed below:
--------------------------------- -----------------------------------------------------------------
NAME POSITION(S) WITH JCM AND PRINCIPAL OCCUPATION
--------------------------------- -----------------------------------------------------------------
Enrique Chang Chief Investment Officer
--------------------------------- -----------------------------------------------------------------
Michael Drew Elder Senior Vice President; Head of North American Distribution
--------------------------------- -----------------------------------------------------------------
Brennan A. Hughes Chief Financial Officer
--------------------------------- -----------------------------------------------------------------
Bruce L. Koepfgen President
--------------------------------- -----------------------------------------------------------------
Kristin B. Mariani Chief Compliance Officer
--------------------------------- -----------------------------------------------------------------
Michelle R. Rosenberg Deputy General Counsel
--------------------------------- -----------------------------------------------------------------
Richard M. Weil Chief Executive Officer
--------------------------------- -----------------------------------------------------------------
The business address for each of the above is 151 Detroit Street, Denver,
Colorado 80206.
Similar Funds Advised or Sub-Advised by JCM
JCM manages the following two mutual funds which have investment
objectives and policies that are broadly similar to those of the Fund.
Information about the size of each such mutual fund and the contractual annual
rate of compensation to which JCM is entitled for its services as investment
adviser is set forth below:
------------------------------------------- ------------------------------------ ---------------------------------
TOTAL MANAGED ASSETS AS OF
FUND DECEMBER 31, 2017 ANNUAL RATE OF COMPENSATION
------------------------------------------- ------------------------------------ ---------------------------------
Janus Henderson Dividend & Income Builder $159,340,000 0.75% for the first $1 billion;
Fund* 0.65% for the next $1 billion;
0.55% for the balance thereafter
------------------------------------------- ------------------------------------ ---------------------------------
Janus Henderson Global Equity Income $5,570,000,000 0.85% for the first $1 billion;
Fund** 0.65% for the next $1 billion;
0.60% for the balance thereafter
------------------------------------------- ------------------------------------ ---------------------------------
*For the fiscal year ended June 30, 2017, the actual investment advisory
fee rate was 0.00%. JCM has contractually agreed to waive its investment
advisory fee and/or reimburse operating expenses to the extent that the fund's
total annual fund operating expenses (excluding administrative services fees
(including out-of-pocket costs), brokerage commissions, interest, dividends,
taxes, acquired fund fees and expenses, and extraordinary expenses) exceed 0.84%
until at least November 1, 2018.
**For the year ended December 31, 2017, the actual investment advisory fee
rate was 0.66%. JCM has contractually agreed to waive its investment advisory
fee and/or reimburse operating expenses to the extent that the fund's total
annual fund operating expenses (excluding administrative services fees
(including out-of-pocket costs), brokerage commissions, interest, dividends,
taxes, acquired fund fees and expenses, and extraordinary expenses) exceed 0.84%
until at least February 1, 2019.
PORTFOLIO MANAGEMENT
The transition to JCM is not expected to result in any changes to the
portfolio managers serving the Fund. The portfolio managers identified below are
currently responsible for providing day-to-day portfolio management services to
the Fund under the Current Sub-Advisory Agreement. It is expected that they will
continue to serve as portfolio managers to the Fund if shareholders approve the
New Sub-Advisory Agreement.
-5-
ALEX CROOKE
CO-HEAD OF EQUITIES - EMEA AND ASIA PACIFIC; PORTFOLIO MANAGER
Alex Crooke is Co-Head of Equities - Europe, the Middle East and Africa
(EMEA) and Asia Pacific (APAC) at Janus Henderson, a position he has held since
2018. Mr. Crooke is responsible for equities in the EMEA and APAC regions and is
a Portfolio Manager for the Global Equity Income and Global Dividend & Income
strategies. In addition, Mr. Crooke is a member of the Janus Henderson Investors
Executive Committee. Previously, he was head of Global Equity Income and
Specialist Equities from 2013. Mr. Crooke was recruited by Janus Henderson to
co-manage the UK assets of an investment trust in 1994 as an associate director.
He later became the fund manager responsible for a number of UK and Global
income orientated equity products. Mr. Crooke began his investment career with
Equitable Life Assurance Society in 1990 as a U.S. investment analyst. Mr.
Crooke holds a BSc (Hons) in physics and astrophysics from Manchester University
and is an associate member of the Society of Investment Professionals. He has 28
years of financial industry experience.
BEN LOFTHOUSE, CFA
HEAD OF GLOBAL EQUITY INCOME; PORTFOLIO MANAGER
Ben Lofthouse is Head of Global Equity Income at Janus Henderson, a
position he has held since 2018. Prior to this, he was a director, Global Equity
Income, and has been part of the Global Equity Income Team since joining the
company in 2004. Additionally, he is a Portfolio Manager and has managed a range
of equity income mandates since 2008. Prior to Janus Henderson, Mr. Lofthouse
worked as an accountant at PricewaterhouseCoopers where he started his career in
1998. Mr. Lofthouse graduated with a BA (Hons) in business economics from Exeter
University. He is a Chartered Accountant (ACA) and holds the Chartered Financial
Analyst designation. He has 20 years of financial industry experience.
THE CURRENT SUB-ADVISORY AGREEMENT
HGINA has served as the investment sub-adviser to the Fund since its
inception. Set forth below is information pertaining to the Current Sub-Advisory
Agreement.
----------------------------- --------------------------------------- ---------------------------------------
DATE OF CURRENT DATE/PURPOSE OF LAST SUBMISSION TO DATE/PURPOSE OF ACTION(S) BY BOARD
SUB-ADVISORY AGREEMENT SHAREHOLDERS SINCE BEGINNING OF LAST FISCAL YEAR
----------------------------- --------------------------------------- ---------------------------------------
September 24, 2015 The Current Sub-Advisory Agreement was September 11, 2017; Continuation of
approved by the initial shareholder of Current Sub-Advisory Agreement.
the Fund on July 27, 2015 in
connection with the launch of the
Fund.
----------------------------- --------------------------------------- ---------------------------------------
COMPARISON OF CERTAIN TERMS OF THE NEW SUB-ADVISORY AGREEMENT AND CURRENT
SUB-ADVISORY AGREEMENT
Below is a brief comparison of certain terms of the Current Sub-Advisory
Agreement to the corresponding terms of the New Sub-Advisory Agreement. Many of
the terms of the New Sub-Advisory Agreement and the Current Sub-Advisory
Agreement are substantially similar. However, the sub-adviser will be JCM rather
than HGINA, and various provisions have been updated to reflect this change. The
New Sub-Advisory Agreement will have a new effective date and initial term. If
approved by shareholders, the New Sub-Advisory Agreement will be effective upon
approval by shareholders and will remain in effect for two years (unless sooner
terminated in accordance with its terms); thereafter, it may be continued for
successive one-year periods as described below under "Continuance." In addition,
-6-
because they are no longer applicable, an expense reimbursement provision
pursuant to which HGINA agreed to pay the Advisor a portion of the Fund's
"organization costs" and certain "offering costs" and a reference to the Prior
Sub-Sub-Adviser (as defined below) have not been included in the New
Sub-Advisory Agreement, while, to provide clarification, provisions relating to
JCM's ability to retain certain affiliates to provide services through
participating affiliate arrangements have been added. The form of New
Sub-Advisory Agreement is attached to this Proxy Statement as Exhibit A.
Sub-Advisory Services. As HGINA does under the Current Sub-Advisory
Agreement, under the New Sub-Advisory Agreement, JCM will act as sub-adviser
for, and manage on a discretionary basis the investment and reinvestment of the
assets of the Fund's portfolio allocated to the sub-adviser by the Advisor from
time to time (the "Sub-Adviser's Strategy"), furnish an investment program in
respect of, make investment decisions for, and place orders for the purchase and
sale of securities or other assets for the Fund's investment portfolio in the
Sub-Adviser's Strategy, all on behalf of the Fund and subject to the supervision
of the Board and the Advisor. In addition, consistent with the Current
Sub-Advisory Agreement, JCM will provide U.S. regulatory and compliance
oversight with respect to the Fund's investment portfolio in the Sub-Adviser's
Strategy. Further, as is the case with HGINA under the Current Sub-Advisory
Agreement, under the New Sub-Advisory Agreement, JCM is required to monitor the
Fund's investments in the Sub-Adviser's Strategy and to comply with the
provisions of the Fund's Declaration of Trust and By-Laws and the stated
investment objective, policies and restrictions of the Fund.
Brokers, Dealers, Futures Commission Merchants, Banks and Other Agents and
Counterparties. As is the case under the Current Sub-Advisory Agreement with
respect to HGINA, the New Sub-Advisory Agreement provides that, unless otherwise
provided by the Advisor in writing, JCM is authorized to select the brokers,
dealers, futures commission merchants, banks or any other agents or
counterparties that will execute the purchases and sales of portfolio
investments for the Fund in the Sub-Adviser's Strategy, and directs JCM to use
its commercially reasonable efforts to obtain best execution in such a manner
that the Fund's total cost or proceeds in each transaction is the most favorable
under the circumstances, taking into account all appropriate factors, including,
among other things, price, dealer spread or commission, size and difficulty of
the transaction and research or other services provided.
Fees. The New Sub-Advisory Agreement will not result in changes to the
Fund's investment sub-advisory fees, nor will it result in changes to any of the
Fund's other fees. As is the case under the Current Sub-Advisory Agreement with
respect to HGINA, under the New Sub-Advisory Agreement, the Advisor will pay JCM
a portfolio management fee on a monthly basis that is equal to the annual rate
of 0.50% of the Fund's "Managed Assets" (i.e., the average daily gross asset
value of the Fund (which includes assets attributable to the Fund's leverage, if
any), minus the sum of the Fund's accrued and unpaid dividends on any
outstanding preferred shares, if any, and accrued liabilities (other than
liabilities representing leverage)). For purposes of determining Managed Assets,
the liquidation preference of any outstanding preferred shares of the Fund is
not treated as a liability. (Currently, the Fund has no outstanding preferred
shares.) A reference to the expense reimbursement provision that, as described
below is no longer applicable and not included in the New Sub-Advisory
Agreement, has been omitted.
For the Fund's last fiscal year, the aggregate amount of the sub-advisory
fee paid by the Advisor to HGINA was $2,162,308. In accordance with the terms of
an investment sub-sub-advisory agreement among the Fund, the Advisor, HGINA and
Henderson Investment Management Limited (the "Prior Sub-Sub-Adviser"), which, as
of September 11, 2017 is no longer in effect, during the Fund's last fiscal
year, HGINA paid the Prior Sub-Sub-Adviser, in the aggregate, sub-sub-advisory
fees equal to $0.
-7-
Additional Sub-Advisers; Participating Affiliate Arrangements. As is the
case under the Current Sub-Advisory Agreement with respect to HGINA, under the
New Sub-Advisory Agreement, subject to applicable requirements, JCM may retain
one or more additional sub-advisers at its own cost and expense for the purpose
of furnishing sub-advisory services with respect to the Fund. The Current
Sub-Advisory Agreement refers to the appointment of the Prior Sub-Sub-Adviser;
however, since no agreement with the Prior Sub-Sub-Adviser (or any other
additional sub-adviser) is currently in place, that reference has been omitted
from the New Sub-Advisory Agreement. In addition, to provide clarification, the
New Sub-Advisory Agreement includes provisions relating to JCM's ability, at its
own cost and expense, to retain affiliated investment managers through
participating affiliate arrangements to provide services to the Fund. Such
arrangements will in no way reduce the responsibilities or obligations of JCM
under the New Sub-Advisory Agreement and JCM will be responsible to the Fund for
all acts or omissions of any of its participating affiliates in connection with
the performance of JCM's duties thereunder. As described below under "Memorandum
of Understanding," HGINA currently utilizes, and JCM will continue to utilize,
the services of their affiliated investment manager, Henderson Global Investors
Limited ("HGIL"), through a participating affiliate arrangement.
Payment of Expenses. As is the case under the Current Sub-Advisory
Agreement with respect to HGINA, under the New Sub-Advisory Agreement, JCM
agrees to pay all its expenses incurred in connection with its activities under
such Agreement other than the cost of securities and other assets (including,
but not limited to, brokerage commissions, stamp duties, currency conversion
costs, and other transaction charges, if any) purchased or otherwise acquired,
or sold or disposed of, for the Fund, which will be paid by the Fund.
Expense Reimbursement. The Current Sub-Advisory Agreement (which was
entered into in conjunction with the launch of the Fund), includes a provision
pursuant to which HGINA agreed to pay the Advisor a portion of the Fund's
"organization costs" and certain "offering costs." However, that provision is no
longer relevant and has not been included in the New Sub-Advisory Agreement.
Sub-Adviser Marks. Under the Current Sub-Advisory Agreement, the Fund and
the Advisor acknowledge that associates of HGINA own the names "Henderson Global
Investors" and "Henderson", and all related names, marks, and trade dress
(collectively, the foregoing are referred to as the "Henderson Marks") and all
associated goodwill. Further, the Current Sub-Advisory Agreement sets forth
parameters relating to the Fund's and the Advisor's use of the Henderson Marks.
The New Sub-Advisory Agreement includes substantially similar provisions;
however, to reflect the change in sub-adviser, the Fund and the Advisor
acknowledge that associates of JCM own the names "Janus Henderson Group", "Janus
Henderson Investors", and "Janus Henderson" and all related names, marks, and
trade dress (collectively, the foregoing are referred to as the "Janus Henderson
Marks"), and the parameters set forth relate to the Fund's and the Advisor's use
of the Janus Henderson Marks.
Limitation of Liability. As is the case under the Current Sub-Advisory
Agreement with respect to HGINA, the New Sub-Advisory Agreement provides that
JCM will not be liable for, and the Fund and the Advisor will not take any
action against JCM to hold JCM liable for (a) any error of judgment or mistake
of law or for any loss suffered by the Fund or the Advisor (including, without
limitation, by reason of the purchase, sale or retention of any security) in
connection with the performance of JCM's duties under the Agreement or (b) any
loss, liability, expenses, or damages suffered or incurred by the Fund or the
Advisor in relation to the portfolio investment decisions for purchases and
sales of securities and other assets of the Fund with respect to investment
strategies not assigned to JCM (the "Advisor's Strategy"), including, without
limitation, by reason of any failure to follow investment policies or
restrictions of the Advisor's Strategy; however, with respect to (a) and (b),
-8-
JCM will be liable for a loss resulting from willful misfeasance, bad faith or
gross negligence on the part of JCM in the performance of its duties under such
Agreement, or by reason of its reckless disregard of its obligations and duties
under such Agreement.
Continuance. The Current Sub-Advisory Agreement was originally in effect
for an initial term of two years and may be continued thereafter for successive
one-year periods if such continuance is specifically approved at least annually
in the manner required by the 1940 Act and the rules and regulations thereunder
(after taking into effect any exemptive order, no-action assurances or other
relief, rule or regulation upon which the Fund may rely). If the shareholders of
the Fund approve the New Sub-Advisory Agreement, the New Sub-Advisory Agreement
will become effective on the date of such approval and will remain in effect for
two years (unless sooner terminated in accordance with such Agreement).
Thereafter, the New Sub-Advisory Agreement may be continued for successive
one-year periods if such continuance is specifically approved at least annually
in the manner required by the 1940 Act and the rules and regulations thereunder
(after taking into effect any exemptive order, no-action assurances or other
relief, rule or regulation upon which the Fund may rely).
Termination. As is the case under the Current Sub-Advisory Agreement with
respect to HGINA, the New Sub-Advisory Agreement provides for termination: (1)
automatically in the event of its assignment (as defined in the 1940 Act and
rules and regulations thereunder); (2) at any time without the payment of any
penalty by the Advisor or JCM upon 60 days' written notice to the other parties;
and (3) by action of the Board or by a vote of a majority of the outstanding
voting securities (as defined in the 1940 Act and rules and regulations
thereunder) of the Fund upon 60 days' written notice to JCM without the payment
of any penalty. In addition, consistent with the corresponding provisions of the
Current Sub-Advisory Agreement, the New Sub-Advisory Agreement will be
terminable at any time without the payment of any penalty by the Advisor, the
Board or by vote of a majority of the outstanding voting securities (as defined
in the 1940 Act and rules and regulations thereunder) of the Fund in the event
that it is established by a court of competent jurisdiction that JCM or any of
its officers or directors have taken any action that results in a breach of the
material covenants of JCM set forth in the Agreement.
MEMORANDUM OF UNDERSTANDING
Pursuant to a memorandum of understanding ("MOU") by and between JCM and
HGIL, JCM will utilize the services of HGIL through a participating affiliate
arrangement to provide sub-advisory services to the Fund. This MOU is the same
arrangement currently utilized by HGINA and HGIL in connection with sub-advisory
services provided by HGINA under the Current Sub-Advisory Agreement. As is the
case with HGINA, JCM has a personnel-sharing arrangement with HGIL pursuant to
which JCM's portfolio managers will be responsible for the day-to-day management
of the Fund. Under this arrangement, HGIL and the portfolio managers are
considered "associated persons" of JCM (within the meaning set forth in the
Investment Advisers Act of 1940, as amended) and the portfolio managers will
render portfolio management, research, and other services to the Fund, subject
to the supervision of JCM. HGIL is a London-based, United Kingdom registered
global asset investment adviser that provides services to institutional, retail
clients, and high net-worth individuals. It launches and manages equity, fixed
income, balanced, and multi-asset mutual funds. HGIL invests in public equity,
fixed income, multi-asset and real estate markets across the globe and manages
pension funds. The firm utilizes a strong in-house research team to make its
investments. HGIL was founded in 1934 and, in addition to its London base of
operations, has additional offices in Boston, Edinburgh, U.K., Frankfurt,
Germany, and Gasperich, Luxembourg. There are no additional fees or expenses to
the Fund or its shareholders associated with the MOU.
-9-
BOARD CONSIDERATIONS
The Board of Trustees of the Fund, including the Independent Trustees,
unanimously approved the New Sub-Advisory Agreement. The Board approved the New
Sub-Advisory Agreement at a meeting held on January 18, 2018. The Board
determined that the New Sub-Advisory Agreement is in the best interests of the
Fund in light of the extent and quality of the services expected to be provided
and such other matters as the Board considered to be relevant in the exercise of
its reasonable business judgment.
HGINA currently serves as investment sub-adviser to the Fund pursuant to
the Current Sub-Advisory Agreement. In June and September 2017, Janus Henderson
Group plc, the parent company of both HGINA and JCM, informed the Board of its
intention to wind down the business of HGINA in 2018 and to transfer the Fund's
investment sub-advisory relationship from HGINA to JCM (the "Transfer"). The New
Sub-Advisory Agreement is proposed to effectuate the Transfer. In this regard,
the Board noted JCM's representation that the Transfer is not expected to result
in any material changes to the services provided to the Fund because the
management, operations, governance and investment management functions of HGINA
and JCM are substantially the same.
To reach its determination in approving the New Sub-Advisory Agreement,
the Board considered its duties under the 1940 Act, as well as under the general
principles of state law in reviewing and approving advisory contracts; the
requirements of the 1940 Act in such matters; the fiduciary duty of investment
advisors with respect to advisory agreements and compensation; the standards
used by courts in determining whether investment company boards have fulfilled
their duties; and the factors to be considered by the Board in voting on such
agreements. On December 27, 2017, counsel to the Independent Trustees provided
JCM with a request for information regarding JCM and the Transfer. At an
executive session held on January 18, 2018, as well as at the meeting held that
day, the Board, including the Independent Trustees, reviewed materials provided
by JCM in response to the request that, among other things, outlined the
services to be provided by JCM (including the relevant personnel responsible for
these services and their experience); the sub-advisory fee rate as compared to
fees charged to other clients of JCM; performance information for the Fund; the
nature of expenses to be incurred in providing services to the Fund and the
potential for economies of scale, if any; financial data on JCM; any fall-out
benefits to JCM; and information on JCM's compliance program. The Board applied
its business judgment to determine whether the arrangement among the Fund, the
Advisor and JCM would be a reasonable business arrangement from the Fund's
perspective as well as from the perspective of shareholders. The Board
determined that, given the totality of the information provided with respect to
the New Sub-Advisory Agreement, the Board had received sufficient information to
approve the New Sub-Advisory Agreement.
In reviewing the New Sub-Advisory Agreement, the Board considered the
nature, extent and quality of the services to be provided by JCM under the New
Sub-Advisory Agreement. With respect to the New Sub-Advisory Agreement, the
Board reviewed the materials provided by JCM and considered the services that
JCM would provide to the Fund, including JCM's day-to-day management of the
Fund's investments. In addition, at the January 18, 2018 meeting, the Board
received a presentation from representatives of JCM. In considering JCM's
management of the Fund, the Board noted that the same portfolio management team
currently providing sub-advisory services to the Fund under the Current
Sub-Advisory Agreement would continue to provide services to the Fund under the
New Sub-Advisory Agreement. The Board also noted JCM's statements that the
Transfer will not result in any diminution in the nature, quality and extent of
the services provided to the Fund, and that the principal purpose of the
Transfer is to maintain in all material aspects the same core investment
management team and functional and support operations as currently provided to
the Fund and its shareholders. In light of the information presented and
-10-
the considerations made, the Board concluded that the nature, extent and quality
of the services to be provided to the Fund by JCM under the New Sub-Advisory
Agreement are expected to be satisfactory.
The Board considered the sub-advisory fee rate to be payable under the New
Sub-Advisory Agreement for the services provided, noting that it would be the
same as the sub-advisory fee rate paid under the Current Sub-Advisory Agreement.
The Board noted that the sub-advisory fee would be paid by the Advisor from its
advisory fee. The Board considered information provided by JCM as to the fees it
charges to other funds with investment objectives and policies broadly similar
to those of the Fund, noting that the sub-advisory fee rate for the Fund was
lower than the fee rates charged to these other funds. The Board also noted
JCM's statement that JCM does not currently charge a lower advisory or
sub-advisory fee to any other client for which it provides comparable services.
Because the same portfolio management team that currently manages the
Fund's investment portfolio under the Current Sub-Advisory Agreement will
continue to manage the Fund's investment portfolio under the New Sub-Advisory
Agreement, the Board considered performance information for the Fund. The Board
noted the process it has established for monitoring the Fund's performance and
portfolio risk on an ongoing basis, which includes quarterly performance
reporting from the Advisor and the investment sub-advisor for the Fund. The
Board determined that this process continues to be effective for reviewing the
Fund's performance. The Board received and reviewed information comparing the
Fund's performance for the one-year period ended June 30, 2017 to the
performance of a peer group of funds (including open-end funds and
exchange-traded funds, in addition to a closed-end fund) compiled by Management
Practice, Inc. ("MPI"), an independent source (the "MPI Peer Group"), and to
that of a benchmark index. In reviewing the Fund's performance as compared to
the performance of the MPI Peer Group, the Board took into account certain
limitations with respect to creating a relevant peer group for the Fund,
including that (i) the Fund is unique in its composition, which makes assembling
peers with similar strategies and asset mix difficult; (ii) the peer group
includes open-end funds and index-based exchange-traded funds; and (iii) peer
funds may use different amounts and types of leverage with different costs
associated with them or may use no leverage. Based on the information provided
on net asset value performance, the Board noted that the Fund outperformed the
MPI Peer Group average for the one-year period ended June 30, 2017 and
underperformed the MSCI Europe Index for the one-year period ended June 30,
2017. The Board also received information on the Fund's historical trading
discount through June 30, 2017 and comparable information for the peer group.
On the basis of all the information provided on the fees and performance
of the Fund and the ongoing oversight by the Board, the Board concluded that the
sub-advisory fee rate was reasonable and appropriate in light of the nature,
extent and quality of the services to be provided by JCM under the New
Sub-Advisory Agreement.
The Board considered that the expenses to be incurred by JCM are primarily
fixed, and that JCM believes that expenses will remain approximately the same
for the next twelve months. The Board did not review the expected profitability
of JCM with respect to the Fund. The Board noted that the Advisor will pay JCM
from its advisory fee and its understanding that the Fund's sub-advisory fee
rate was the product of an arm's length negotiation. The Board considered
fall-out benefits that may be realized by JCM from its relationship with the
Fund, noting JCM's statement that, in respect of the Fund, JCM will pay for
investment research from its own resources and will not use soft dollars in
managing the Fund. The Board concluded that the character and amount of
potential fall-out benefits to JCM were not unreasonable.
Based on all of the information considered and the conclusions reached,
the Board, including the Independent Trustees, unanimously determined that the
-11-
terms of the New Sub-Advisory Agreement were fair and reasonable and that the
approval of the New Sub-Advisory Agreement is in the best interests of the Fund.
No single factor was determinative in the Board's analysis.
SHAREHOLDER APPROVAL AND REQUIRED VOTE
To become effective for the Fund, the New Sub-Advisory Agreement must be
approved by a vote of a majority of the outstanding voting securities of the
Fund. The "vote of a majority of the outstanding voting securities" of the Fund
is defined in the 1940 Act as the vote of the lesser of (i) 67% or more of the
Shares of the Fund present at the Meeting if the holders of more than 50% of the
outstanding Shares of the Fund are present in person or represented by proxy; or
(ii) more than 50% of the outstanding Shares of the Fund. For purposes of
determining the approval of the New Sub-Advisory Agreement, abstentions and
broker non-votes will have the effect of a vote against the Proposal.
IF YOU NEED ANY ASSISTANCE, OR HAVE ANY QUESTIONS REGARDING THE PROPOSAL
OR HOW TO VOTE YOUR SHARES, PLEASE CALL THE FUND'S PROXY SOLICITOR, AST FUND
SOLUTIONS, LLC AT (800) 284-1755 WEEKDAYS FROM 9:00 A.M. TO 10:00 P.M. EASTERN
TIME.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS OF THE FUND
VOTE TO APPROVE THE NEW SUB-ADVISORY AGREEMENT.
-12-
ADDITIONAL INFORMATION
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
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 the Fund's outstanding Shares, except as described in the following table.
A control person is one who owns, either directly or indirectly, more than 25%
of the voting securities of the Fund or otherwise acknowledges the existence of
control. A party that controls the Fund may be able to significantly affect the
outcome of any item presented to shareholders for approval. Information as to
beneficial ownership of Shares, including percentage of outstanding Shares
beneficially owned, is based on securities position listing reports as of the
Record Date and reports filed with the Securities and Exchange Commission
("SEC") by shareholders. The Fund does not have any knowledge of the identity of
the ultimate beneficiaries of the Shares listed below.
----------------------------------------------------- ------------------------------ ----------------------------------
NAME AND ADDRESS SHARES BENEFICIALLY % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
----------------------------------------------------- ------------------------------ ----------------------------------
Morgan Stanley Smith Barney LLC 3,869,335 Shares 22.45%
1300 Thames Street
Baltimore, MD 21231
----------------------------------------------------- ------------------------------ ----------------------------------
Wells Fargo Clearing Services LLC
2801 Market Street 3,264,188 Shares 18.94%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------ ----------------------------------
UBS Financial Services Inc.
1000 Harbor Blvd 1,957,769 Shares 11.36%
Weehawken, NJ 07086
----------------------------------------------------- ------------------------------ ----------------------------------
Raymond James & Associates, Inc.
880 S. Carillon Parkway 1,355,451 Shares 7.87%
St. Petersburg, FL 33716
----------------------------------------------------- ------------------------------ ----------------------------------
RBC Capital Markets, LLC
60 S. 6th Street - P09 978,345 Shares 5.68%
Minneapolis, MN 55402
----------------------------------------------------- ------------------------------ ----------------------------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4804 Deer Lake Drive E. 872,203 Shares 5.06%
Jacksonville, FL 32246
----------------------------------------------------- ------------------------------ ----------------------------------
-13-
SHARE OWNERSHIP OF TRUSTEES AND EXECUTIVE OFFICERS
The number of shares of the Fund beneficially owned as of December 31,
2017 by (a) the Trustees (including the Independent Trustees) and the Trustee
who is not an Independent Trustee (the "Interested Trustee") and (b) the
Trustees and executive officers of the Fund as a group, is set forth below.
-------------------------------------------------------- ---------------------------
NAME NUMBER OF SHARES
-------------------------------------------------------- ---------------------------
-------------------------------------------------------- ---------------------------
INTERESTED TRUSTEE
-------------------------------------------------------- ---------------------------
James A. Bowen None
-------------------------------------------------------- ---------------------------
INDEPENDENT TRUSTEES
-------------------------------------------------------- ---------------------------
Richard E. Erickson None
-------------------------------------------------------- ---------------------------
Thomas R. Kadlec None
-------------------------------------------------------- ---------------------------
Robert F. Keith None
-------------------------------------------------------- ---------------------------
Niel B. Nielson None
-------------------------------------------------------- ---------------------------
TRUSTEES AND EXECUTIVE OFFICERS AS A GROUP None
-------------------------------------------------------- ---------------------------
As of December 31, 2017, (a) the Trustees and (b) the Trustees and
executive officers of the Fund as a group, beneficially owned none of the total
shares outstanding of the Fund. The information as to beneficial ownership is
based on statements furnished by each Trustee and executive officer.
SHAREHOLDER PROPOSALS
Shareholder Proposals for Inclusion in a Fund's Proxy Statement. To be
considered for presentation at the 2019 annual meeting of shareholders of the
Fund and included in the Fund's proxy statement relating to such meeting, a
shareholder proposal must be submitted pursuant to Rule 14a-8 under the 1934 Act
("Rule 14a-8") and must be received at the principal executive offices of the
Fund not later than November 15, 2018. Such a proposal will be included in the
Fund's proxy statement if it meets the requirements of Rule 14a-8. Timely
submission of a proposal does not mean that such proposal be included in the
Fund's proxy statement.
Other Shareholder Proposals. In addition to any requirements of law,
including the proxy rules under the 1934 Act, under the Fund's By-Laws, any
proposal to elect any person nominated by shareholders for election as Trustee
and any other proposals by shareholders may only be brought before an annual
meeting of the Fund if timely written notice (the "Shareholder Notice") is
provided to the Secretary of the Fund and the other conditions summarized below
are met. In accordance with the advance notice provisions included in the Fund's
By-Laws, unless a greater or lesser period is required under applicable law, to
be timely, the Shareholder Notice must be delivered to or mailed and received at
the Fund's principal executive offices, Attn: W. Scott Jardine, Secretary, not
less than 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
-14-
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 the Fund is required to
deliver, as part of such Shareholder Notice: (i) a statement in writing setting
forth: (A) the name, age, date of birth, business address, residence address and
nationality of the person or persons to be nominated; (B) the class or series
and number of all Shares of the Fund owned of record or beneficially by each
such person or persons, as reported to such shareholder by such nominee(s); (C)
any other information regarding each such person required by paragraphs (a),
(d), (e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of
Rule 14a-101 (Schedule 14A) under the 1934 Act (or any successor provision
thereto); (D) any other information regarding the person or persons to be
nominated that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitation of proxies for
election of trustees or directors pursuant to Section 14 of the 1934 Act and the
rules and regulations promulgated thereunder; and (E) whether such shareholder
believes any nominee is or will be an "interested person" of the Fund (as
defined in the 1940 Act) and, if not an "interested person," information
regarding each nominee that will be sufficient for the Fund to make such
determination; and (ii) the written and signed consent of any person nominated
to be named as a nominee and to serve as a Trustee if elected. In addition, the
Trustees may require any proposed nominee to furnish such other information as
they may reasonably require or deem necessary to determine the eligibility of
such proposed nominee to serve as a Trustee.
Without limiting the foregoing, any shareholder who gives a Shareholder
Notice of any matter proposed to be brought before a shareholder meeting
(whether or not involving nominees for Trustees) is required to deliver, as part
of such Shareholder Notice: (i) the description of and text of the proposal to
be presented; (ii) a brief written statement of the reasons why such shareholder
favors the proposal; (iii) such shareholder's name and address as they appear on
the Fund's books; (iv) any other information relating to the shareholder that
would be required to be disclosed in a proxy statement or other filings required
to be made in connection with the solicitation of proxies with respect to the
matter(s) proposed pursuant to Section 14 of the 1934 Act and the rules and
regulations promulgated thereunder; (v) the class or series and number of all
Shares of the Fund owned beneficially and of record by such shareholder; (vi)
any material interest of such shareholder in the matter proposed (other than as
a shareholder); (vii) a representation that the shareholder intends to appear in
person or by proxy at the shareholder meeting to act on the matter(s) proposed;
(viii) if the proposal involves nominee(s) for Trustees, a description of all
arrangements or understandings between the shareholder and each proposed nominee
and any other person or persons (including their names) pursuant to which the
nomination(s) are to be made by the shareholder; and (ix) in the case of a
shareholder (a "Beneficial Owner") that holds Shares entitled to vote at the
meeting through a nominee or "street name" holder of record, evidence
establishing such Beneficial Owner's indirect ownership of, and entitlement to
vote, Shares at the meeting of shareholders. Shares "beneficially owned" means
all Shares which such person is deemed to beneficially own pursuant to Rules
13d-3 and 13d-5 under the 1934 Act.
In addition, the By-Laws provide that, unless required by federal law, no
matters shall be considered at or brought before any annual or special meeting
unless such matter has been deemed a proper matter for shareholder action by at
least sixty-six and two-thirds percent (66-2/3%) of the Trustees. Timely
submission of a proposal does not mean that such proposal will be brought before
the meeting.
-15-
SHAREHOLDER COMMUNICATIONS
Shareholders of the Fund who want to communicate with the Board of
Trustees or any individual Trustee should write the Fund to the attention of the
Fund Secretary, W. Scott Jardine. The letter should indicate that you are a Fund
shareholder. If the communication is intended for a specific Trustee and so
indicates, it will be sent only to that Trustee. If a communication does not
indicate a specific Trustee, it will be sent to the Chairman of the Nominating
and Governance Committee of the Board and the independent legal counsel to the
Independent Trustees for further distribution as deemed appropriate by such
persons.
INVESTMENT ADVISOR, ADMINISTRATOR AND TRANSFER AGENT
First Trust Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton,
Illinois 60187, serves as the Fund's investment advisor. First Trust Advisors is
also responsible for providing certain clerical, bookkeeping and other
administrative services to the Fund and also provides fund reporting services to
the Fund for a flat annual fee.
Brown Brothers Harriman & Co., 50 Post Office Square, Boston,
Massachusetts 02110, acts as the administrator, fund accountant and custodian,
and Computershare, Inc., P.O. Box 505000, Louisville, Kentucky 40233-5000, acts
as the transfer agent, to the Fund.
FISCAL YEAR
The fiscal year end for the Fund was December 31, 2017.
DELIVERY OF CERTAIN DOCUMENTS
Annual reports will be sent to shareholders of record of the Fund
following the Fund's fiscal year end. The Fund will furnish, without charge, a
copy of its annual report and/or semi-annual report as available upon request.
Such written or oral requests should be made by writing to the Advisor at 120
East Liberty Drive, Suite 400, Wheaton, Illinois 60187 or by calling toll-free
(800) 988-5891.
Please note that only one annual or semi-annual report or proxy statement
may be delivered to two or more shareholders of the Fund who share an address,
unless the Fund has received instructions to the contrary. To request a separate
copy of an annual 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 Advisor at the address and phone number set forth above.
Pursuant to a request, a separate copy will be delivered promptly.
CERTAIN PROVISIONS OF STANDSTILL AGREEMENTS FOR THREE OTHER FIRST TRUST
CLOSED-END FUNDS
In 2017, First Trust/Aberdeen Global Opportunity Income Fund ("FAM") and
the Advisor entered into a standstill agreement (the "Karpus Standstill
Agreement") with Karpus Management, Inc. (doing business as Karpus Investment
Management) and any present or future entities or accounts it manages or
controls or to which it is related (collectively referred to as "Karpus"). Under
the Karpus Standstill Agreement, Karpus agreed, among other things, as to
certain voting-related matters and standstill covenants with respect to FAM and
other investment companies advised by the Advisor (including the
-16-
Fund) other than First Trust Enhanced Equity Income Fund until the earlier of
the conclusion of the 2019 annual meeting of shareholders of FAM and April 30,
2019.
In 2017, each of First Trust High Income Long/Short Fund ("FSD") and the
Advisor, and First Trust Strategic High Income Fund II ("FHY") and the Advisor,
respectively, entered into a standstill agreement (together, the "Saba
Standstill Agreement") with Saba Capital Management, L.P. and certain associated
parties (collectively referred to as "Saba"). Under the Saba Standstill
Agreement, Saba agreed, among other things, as to certain voting-related matters
and standstill covenants with respect to FSD, FHY and other investment companies
advised by the Advisor (including the Fund) until January 20, 2020.
OTHER MATTERS TO COME BEFORE THE MEETING
No business other than the Proposal, as described above, is expected to
come before the Meeting, but should any other matter requiring a vote of
shareholders arise, including any question as to an adjournment of the Meeting,
the persons named on the enclosed proxy card will vote thereon according to
their best judgment in the interests of the Fund.
March 15, 2018
--------------------------------------------------------------------------------
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. IN ORDER TO
AVOID DELAY AND TO ENSURE THAT YOUR SHARES ARE REPRESENTED, PLEASE VOTE AS
PROMPTLY AS POSSIBLE. YOU MAY VOTE EASILY AND QUICKLY BY MAIL, TELEPHONE OR
THROUGH THE INTERNET. TO VOTE BY MAIL, PLEASE COMPLETE AND MAIL YOUR PROXY CARD
IN THE ENCLOSED POSTAGE-PAID RETURN ENVELOPE. ALTERNATIVELY, SHAREHOLDERS MAY
VOTE BY TELEPHONE OR THROUGH THE INTERNET BY FOLLOWING THE INSTRUCTIONS ON THE
PROXY CARD. IF YOU NEED ANY ASSISTANCE, OR HAVE ANY QUESTIONS REGARDING THE
PROPOSAL OR HOW TO VOTE YOUR SHARES, PLEASE CALL THE FUND'S PROXY SOLICITOR, AST
FUND SOLUTIONS, LLC, AT (800) 284-1755 WEEKDAYS FROM 9:00 A.M. TO 10:00 P.M.
EASTERN TIME.
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EXHIBIT A
FORM OF NEW INVESTMENT SUB-ADVISORY AGREEMENT
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made as of this __ day of __________, 2018 by and among First
Trust Dynamic Europe Equity Income Fund, a Massachusetts business trust (the
"Fund"), First Trust Advisors L.P., an Illinois limited partnership (the
"Manager") and a registered investment adviser with the Securities and Exchange
Commission ("SEC"), and Janus Capital Management LLC, a Delaware limited
liability company and a registered investment adviser with the SEC (the
"Sub-Adviser").
WHEREAS, the Fund is a closed-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Fund has retained the Manager to serve as the investment
manager for the Fund pursuant to an Investment Management Agreement between the
Manager and the Fund (the "Management Agreement") to manage the investment and
reinvestment of assets of the Fund in accordance with the Fund's investment
objective and policies and limitations, as the same may be amended from time to
time;
WHEREAS, the Management Agreement provides that the Manager may, subject
to certain requirements, appoint a sub-adviser at its own cost and expense for
the purpose of furnishing certain services required under the Management
Agreement;
WHEREAS, the Fund and the Manager desire to retain the Sub-Adviser to
furnish investment advisory services in accordance with the Fund's investment
objective and policies and limitations assigned to the Sub-Adviser and described
in the Fund's most recent effective registration statement and as such
objective, policies and limitations may be amended from time to time for the
assets of the Fund's investment portfolio the Manager allocates to the
Sub-Adviser from time to time (the "Sub-Adviser's Strategy"), upon the terms and
conditions hereafter set forth;
WHEREAS, the Fund will also apply a strategy of writing call options on
portfolio equity securities, custom baskets of individual securities and certain
broad-based securities indices in accordance with the Fund's investment
objective and policies and limitations (the "Call Writing Strategy") assigned to
the Manager and described in the Fund's most recent effective registration
statement and as such objective, policies and limitations may be amended from
time;
WHEREAS, the Manager may make portfolio investment decisions for purchases
and sales of securities and other assets of the Fund with respect to investment
strategies not assigned to the Sub-Adviser, including the Call Writing Strategy
(the "Manager's Strategy");
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Appointments. The Fund and the Manager hereby appoint the Sub-Adviser
to provide certain investment sub-advisory services to the Fund solely with
respect to the Sub-Adviser's Strategy for the period and on the terms set forth
in this Agreement. The Sub-Adviser accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided. The
Sub-Adviser shall, for all purposes herein provided, be deemed an independent
contractor and, unless otherwise expressly provided or authorized, shall have no
authority to act for nor represent the Fund or the Manager in any way, nor
otherwise be deemed an agent of the Fund or the Manager. Without limiting the
generality of the foregoing, the Sub-Adviser shall have no duty to (a) implement
the Manager's Strategy, (b) review, monitor or advise upon the performance of
the Manager or its delegates in implementing the Manager's Strategy, (c) assist
with the selection of brokers or other counterparties for the Manager's
Strategy, or (d) determine the amount of Fund assets devoted to the Manager's
Strategy and the levels of risk assumed by the Fund in the Manager's Strategy.
This appointment shall be non-exclusive and nothing in this Agreement
shall affect or limit the right of the Sub-Adviser to undertake any other
business or venture whatsoever or provide the Fund or the Manager with any right
or claim on the income or revenues of any such other business or venture,
subject to exception for any liabilities the Sub-Adviser may have under Section
7 below.
2. Services to Be Performed. Subject always to the supervision of the
Fund's Board of Trustees (the "Board of Trustees" or the "Board") and the
Manager, the Sub-Adviser will act as sub-adviser for, and manage on a
discretionary basis the investment and reinvestment of the assets of the Fund
assigned to the Sub-Adviser by the Manager from time to time in the
Sub-Adviser's Strategy, furnish an investment program in respect of, make
investment decisions for, and place all orders for the purchase and sale of
securities or other assets for the Fund's investment portfolio in the
Sub-Adviser's Strategy, all on behalf of the Fund and as described in the Fund's
most recent effective registration statement on Form N-2 and as the same and
such investment policies described therein may thereafter be amended from time
to time and communicated by the Fund or the Manager in writing the Sub-Adviser.
The Sub-Adviser shall also provide U.S. regulatory and compliance oversight with
respect to the Fund's investment portfolio in the Sub-Adviser's Strategy and any
sub-adviser appointed pursuant to Section 3 hereof. In the performance of its
duties, the Sub-Adviser will (a) satisfy any applicable fiduciary duties it may
have to the Fund; (b) monitor the Fund's investments in the Sub-Adviser's
Strategy; (c) comply with the provisions of the Fund's Declaration of Trust and
By-laws, as amended from time to time and communicated by the Fund or the
Manager to the Sub-Adviser; (d) comply with (i) the investment objective,
policies and restrictions of the Fund stated in the Fund's most recent effective
prospectus and statement of additional information, (ii) such other investment
objective, policies, restrictions or instructions as the Manager or the Fund's
Board of Trustees may communicate to the Sub-Adviser in writing, and (iii) any
changes to the objective, policies, restrictions or instructions required under
the foregoing (i) and (ii) as communicated to the Sub-Adviser in writing; (e)
assist in the valuation of portfolio assets held by the Fund in the
Sub-Adviser's Strategy as reasonably requested by the Manager; and (f)
communicate as necessary with the Manager to coordinate the implementation of
the Manager's Strategy. The Sub-Adviser and the Manager will also each make its
officers and employees available to the other from time to time at reasonable
times to review the investment objective, policies and restrictions of the Fund
and to consult with each other regarding the investment affairs of the Fund. The
Fund or the Manager shall provide the Sub-Adviser with current copies of the
Fund's Declaration of Trust, By-laws, prospectus, statement of additional
information and any amendments thereto, and any objective, policies or
limitations not appearing therein as they may be relevant to the Sub-Adviser's
performance under this Agreement.
Unless otherwise provided by the Manager in writing, the Sub-Adviser is
authorized to select the brokers, dealers, futures commission merchants, banks
or any other agent or counterparty that will execute the purchases and sales of
portfolio investments for the Fund in the Sub-Adviser's Strategy, and is
directed to use its commercially reasonable efforts to obtain best execution in
such a manner that the Fund's total cost or proceeds in each transaction is the
most favorable under the circumstances, taking into account all
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appropriate factors, including, among other things, price, dealer spread or
commission, size and difficulty of the transaction and research or other
services provided. Subject to approval by the Fund's Board of Trustees and
compliance with the policies and procedures adopted by the Board of Trustees for
the Fund and communicated by the Fund or the Manager in writing to the
Sub-Adviser and to the extent permitted by and in conformance with applicable
law (including Rule 17e-1 under the 1940 Act), the Sub-Adviser may select
brokers or dealers affiliated with the Sub-Adviser. It is understood that the
Sub-Adviser will not be deemed to have acted unlawfully, or to have breached a
fiduciary duty to the Fund or the Manager, or be in breach of any obligation
owing to the Fund under this Agreement, or otherwise, solely by reason of its
having caused the Fund to pay a member of a securities exchange, a broker or a
dealer a commission for effecting a securities transaction for the Fund in
excess of the amount of commission another member of an exchange, broker or
dealer would have charged if the Sub-Adviser determined in good faith that the
commission paid was reasonable in relation to the value of brokerage or research
services provided by such member, broker or dealer, viewed in terms of that
particular transaction or the Sub-Adviser's overall responsibilities with
respect to its accounts, including the Fund, as to which it exercises investment
discretion. The Fund and the Manager shall instruct the custodian for the Fund
to accept and act upon instructions for purchases and sales of portfolio
securities and other investment transactions for the account of the Fund issued
by the Sub-Adviser pursuant to this Agreement.
In addition, the Sub-Adviser may, to the extent permitted by applicable
law, aggregate purchase and sale orders of securities or other instruments
placed with respect to the assets of the Fund with similar orders being made
simultaneously for other accounts managed by the Sub-Adviser or its affiliates
to attempt to obtain more favorable price or lower brokerage commissions and
efficient execution, if in the Sub-Adviser's reasonable judgment such
aggregation is in the best interest of the Fund as well as such other accounts.
In the event that a purchase or sale of an asset of the Fund occurs as part of
any aggregate sale or purchase orders, the objective of the Sub-Adviser and any
of its affiliates involved in such transaction shall be to allocate the assets
so purchased or sold, as well as expenses incurred in the transaction, among the
Fund and other accounts in a fair and equitable manner. Nevertheless, the Fund
and the Manager acknowledge that under some circumstances, such allocation may
adversely affect the Fund with respect to, among other things, the price or size
of the assets obtainable or salable. Whenever the Fund and one or more other
investment advisory clients of the Sub-Adviser have available funds for
investment, investments suitable and appropriate for each will be allocated in a
manner believed by the Sub-Adviser to be equitable to each, although such
allocation may result in a delay in one or more client accounts being fully
invested that would not occur if such an allocation were not made. Moreover, it
is possible that due to differing investment objective or for other reasons, the
Sub-Adviser and its affiliates may purchase securities or other instruments of
an issuer for one client and at approximately the same time recommend selling or
sell the same or similar types of securities, assets or instruments for another
client.
The Sub-Adviser will not arrange purchases or sales of securities or other
assets between the Fund and other accounts advised by the Sub-Adviser or its
affiliates unless (a) such purchases or sales are in accordance with applicable
law (including Rule 17a-7 under the 1940 Act) and the Fund's policies and
procedures that have been communicated by the Fund or the Manager in writing to
the Sub-Adviser, (b) the Sub-Adviser determines the purchase or sale is in the
best interests of the Fund, and (c) the Fund's Board of Trustees has approved
these types of transactions.
The Fund may adopt policies and procedures that modify or restrict the
Sub-Adviser's authority regarding the execution of the Fund's portfolio
transactions provided herein, provided that no such policy or procedure shall
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bind the Sub-Adviser until it has been communicated by the Fund or the Manager
in writing to the Sub-Adviser.
The Sub-Adviser acknowledges that the Fund intends to rely on with Rule
10f-3, Rule 12d3-1, Rule 17a-10 and Rule 17e-1 under the 1940 Act, and the
Sub-Adviser hereby agrees that it will not consult with any other sub-adviser of
an investment company or a series of an investment company that is advised by
the Manager (the "First Trust Fund complex") or consult with an affiliated
person of any such sub-adviser (including any sub-adviser that is a principal
underwriter or an affiliated person of such principal underwriter), in each case
concerning transactions for the Fund or any fund in the First Trust Fund complex
in securities or other fund assets. A list of each sub-adviser to the First
Trust Fund Complex and each affiliated person of any such sub-adviser is
provided by the Manager, and the Manager will promptly notify Sub-Adviser of any
amendments to such list. In addition, with respect to a fund in the First Trust
Fund complex with multiple sub-advisers, the Sub-Adviser shall be limited to
providing investment advice with respect to only the discrete portion of the
fund's portfolio as may be determined from time-to-time by the Board of Trustees
or the Manager, and shall not consult with the sub-adviser (including any
sub-adviser that is a principal underwriter or an affiliated person of such
principal underwriter) as to any other portion of the fund's portfolio
concerning transactions for the fund in securities or other assets.
Notwithstanding the foregoing, the provisions in this paragraph do not apply to
the consultations between the Sub-Adviser and any sub-adviser retained by the
Sub-Adviser, pursuant to Section 3 hereunder.
The Sub-Adviser will communicate to the officers and Trustees of the Fund
such information relating to transactions for the Fund in the Sub-Adviser's
Strategy as they may reasonably request. In no instance will the Fund's
portfolio assets be purchased from or sold to the Manager, the Sub-Adviser or
any affiliated person of any of the Fund, the Manager, or the Sub-Adviser,
except as may be permitted under the 1940 Act and under no circumstances will
the Sub-Adviser select brokers or dealers for Fund transactions on the basis of
Fund share sales by such brokers or dealers.
The Sub-Adviser is hereby authorized to vote proxies at its sole
discretion in accordance with its Proxy Voting Policy, a copy of which will be
provided to the Fund at the Fund's request.
The Sub-Adviser shall not be required to render any legal advice or
initiate litigation with respect to portfolio assets, including, but not limited
to, class action and bankruptcy claims.
The Sub-Adviser further agrees that it:
(a) will use the same degree of skill and care in providing such
services as it uses in providing services to other fiduciary accounts for
which it has investment responsibilities;
(b) will (i) in the performance of its duties under this Agreement
conform in all material respects to all applicable rules and regulations
of the SEC, Commodity Futures Trading Commission and any other applicable
regulatory authority, (ii) in the performance of its duties under this
Agreement comply in all material respects with all policies and procedures
adopted by the Board of Trustees for the Fund and communicated to the
Sub-Adviser in writing and (iii) conduct its activities under this
Agreement in all material respects in accordance with any applicable law
and regulations of any governmental authority pertaining to its investment
advisory, commodity pool operator and commodity trading advisory
activities;
A-4
(c) will report to the Manager and to the Board of Trustees of the
Fund on a quarterly basis and will make appropriate persons available for
the purpose of reviewing with representatives of the Manager and the Board
of Trustees on a regular basis at such times as the Manager or the Board
of Trustees may reasonably request in writing regarding the management of
the Fund, including, without limitation, review of the general investment
strategies of the Fund in the Sub-Adviser's Strategy, the performance of
the Fund's investment portfolio in the Sub-Adviser's Strategy in relation
to relevant standard industry indices and general conditions affecting the
marketplace and will provide various other reports from time to time as
reasonably requested by the Manager or the Board of Trustees of the Fund
in relation to the Sub-Adviser's Strategy; and
(d) will prepare and maintain such books and records with respect to
the Fund's securities and other transactions for the Fund's investment
portfolio, in each case, relating solely to the Sub-Adviser's Strategy as
required for registered investment advisers under applicable law, the
Fund's policies and procedures or as otherwise reasonably requested by the
Manager or the Board and will prepare and furnish the Manager and the
Fund's Board of Trustees such periodic and special reports as the Board or
the Manager may reasonably request. Such records prepared and maintained
by the Sub-Adviser as required hereunder shall be open to inspection at
all reasonable times by the Manager, the Fund and any appropriate
regulatory authorities. The Sub-Adviser further agrees that all records
that it maintains for the Fund are the property of the Fund and the
Sub-Adviser will surrender promptly to the Fund any such records upon the
request of the Manager or the Fund (provided, however, that the
Sub-Adviser shall be permitted to retain copies thereof); and shall be
permitted to retain originals (with copies to the Fund) to the extent
required under Rule 204-2 under the Investment Advisers Act of 1940, as
amended (the "Advisers Act") or other applicable law; and
(e) will monitor the pricing of portfolio assets in the
Sub-Adviser's Strategy, and events relating to the issuers of those assets
and the markets in which the securities or other assets trade in the
ordinary course of managing the portfolio investments of the Fund, and
will notify Manager promptly of any issuer-specific or market events or
other situations that occur (particularly those that may occur after the
close of a foreign market in which the investments may primarily trade but
before the time at which the Fund's investments are priced on a given day)
that may materially impact the pricing of one or more securities or other
assets in Sub-Adviser's portion of the portfolio. In addition, Sub-Adviser
will at the Manager's reasonable request assist Manager in evaluating the
impact that such an event may have on the net asset value of the Fund and
in determining a recommended fair value of the affected investment or
investments.
3. Additional Sub-Advisers; Participating Affiliated Investment Managers.
Subject to obtaining the initial and periodic approvals required under Section
15 of the 1940 Act (after taking into effect any exemptive order, no-action
assurances or other relief, rule or regulation upon which the Fund may rely) and
the approval of the Manager, the Sub-Adviser may retain one or more additional
sub-advisers at the Sub-Adviser's own cost and expense for the purpose of
furnishing one or more of the services described in Section 2 hereof with
respect to the Fund. Retention of a sub-adviser hereunder shall in no way reduce
the responsibilities or obligations of the Sub-Adviser under this Agreement and
the Sub-Adviser shall be responsible to the Fund for all acts or omissions of
any sub-adviser in connection with the performance of the Sub-Adviser's duties
hereunder.
Subject to applicable law, including the 1940 Act and the Advisers Act,
the rules thereunder, and relevant positions of the SEC and its staff, the
Sub-Adviser, through a participating affiliate arrangement, may retain one or
A-5
more affiliated investment managers at the Sub-Adviser's own cost and expense
for the purpose of furnishing one or more of the services described in Section 2
hereof with respect to the Fund. Any portfolio managers or associated persons of
the Sub-Adviser (within the meaning set forth in the Advisers Act) shall be
subject to the supervision of the Sub-Adviser. A participating affiliate
arrangement shall in no way reduce the responsibilities or obligations of the
Sub-Adviser under this Agreement and the Sub-Adviser shall be responsible to the
Fund for all acts or omissions of any of its participating affiliates in
connection with the performance of the Sub-Adviser's duties hereunder. To the
extent the Sub-Adviser utilizes the services of a participating affiliate, it
will provide the Manager and the Fund with 30 days' prior written notice, which
will include the identity of the participating affiliate, and such other
information as may be requested by the Manager or the Fund.
4. Expenses. During the term of this Agreement, the Sub-Adviser will pay
all its expenses incurred in connection with its activities under this Agreement
other than the cost of securities and other assets (including, but not limited
to, brokerage commissions, stamp duties, currency conversion costs, and other
transaction charges, if any) purchased or otherwise acquired, or sold or
otherwise disposed of, for the Fund, which will be paid by the Fund.
5. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the Manager will pay the Sub-Adviser, and the
Sub-Adviser agrees to accept as full compensation therefor, a portfolio
management fee (the "Management Fee") equal to the annual rate of 0.50% of the
Fund's Managed Assets (as defined below). For purposes of calculating the
Management Fee, Managed Assets means the average daily gross asset value of the
Fund (which includes assets attributable to the Fund's leverage, if any), minus
the sum of the Fund's accrued and unpaid dividends on any outstanding Preferred
Shares (as such term is defined in the Fund's prospectus), if any, and accrued
liabilities (other than liabilities representing leverage). For purposes of
determining Managed Assets, the liquidation preference of any outstanding
Preferred Shares of the Fund is not treated as a liability. The Management Fee
shall be payable in arrears on or about the first day of each month during the
term of this Agreement.
For the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration on the basis of the number
of days that the Agreement is in effect during the month and year, respectively.
6. Services to Others. The Fund and the Manager acknowledge that the
Sub-Adviser now acts, or may in the future act, as an investment adviser to
other managed accounts and as investment adviser or investment sub-adviser to
one or more other investment companies. In addition, the Fund and the Manager
acknowledge that the persons employed by the Sub-Adviser to assist in its
respective duties under this Agreement will not devote their full time to such
efforts. It is also agreed that the Sub-Adviser may use any supplemental
research obtained for the benefit of the Fund in providing investment advice to
its other investment advisory accounts and for managing its own accounts.
7. Limitation of Liability. The duties of the Sub-Adviser under this
Agreement are limited to those expressly set forth herein and as may be imposed
under applicable law, and no duties of the Sub-Adviser shall be implied under
this Agreement. The Sub-Adviser shall not be liable for, and the Fund and the
Manager will not take any action against the Sub-Adviser to hold the Sub-Adviser
liable for, (a) any error of judgment or mistake of law or for any loss suffered
by the Fund or the Manager (including, without limitation, by reason of the
purchase, sale or retention of any security) in connection with the performance
of the Sub-Adviser's duties under this Agreement or (b) any loss, liability,
A-6
expenses, or damages suffered or incurred by the Fund or the Manager in relation
to the Manager's Strategy, including, without limitation, by reason of any
failure to follow investment policies or restrictions of the Manager's Strategy,
except in either (a) or (b) of this Section, the Sub-Adviser shall be liable for
a loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Sub-Adviser in the performance of its duties under this Agreement,
or by reason of the Sub-Adviser's reckless disregard of its obligations and
duties under this Agreement.
8. Term; Termination. This Agreement shall become effective with respect
to the Fund on the date first set forth above (the "Effective Date"), provided
that it has been approved in the manner required by the 1940 Act (after taking
into effect any exemptive order, no-action assurances or other relief, rule or
regulation upon which the Fund may rely), and shall remain in full force until
the two-year anniversary of the Effective Date unless sooner terminated as
hereinafter provided. This Agreement shall continue in force from year to year
thereafter, but only as long as such continuance is specifically approved for
the Fund at least annually in the manner required by the 1940 Act and the rules
and regulations thereunder (after taking into effect any exemptive order,
no-action assurances or other relief, rule or regulation upon which the Fund may
rely); provided, however, that if the continuation of this Agreement is not
approved for the Fund, the Sub-Adviser may continue to serve in its respective
capacity for the Fund in the manner and to the extent permitted by the 1940 Act
and the rules and regulations thereunder.
This Agreement shall automatically terminate in the event of its
assignment and may be terminated at any time without the payment of any penalty
by the Manager or the Sub-Adviser upon sixty (60) days' written notice to the
other parties. This Agreement may also be terminated by the Fund by action of
the Board of Trustees or by a vote of a majority of the outstanding voting
securities of the Fund upon sixty (60) days' written notice to the Sub-Adviser
by the Fund without payment of any penalty.
This Agreement may be terminated at any time without the payment of any
penalty by the Manager, the Board of Trustees or by vote of a majority of the
outstanding voting securities of the Fund in the event that it shall have been
established by a court of competent jurisdiction that the Sub-Adviser or any
officer or director of the Sub-Adviser has taken any action that results in a
breach of the material covenants of the Sub-Adviser set forth herein.
The terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the 1940 Act and the rules and
regulations thereunder.
This Agreement shall automatically terminate in the event the Management
Agreement between the Manager and the Fund is terminated, assigned or not
renewed.
Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of the compensation
described in Section 5 earned prior to such termination and for any additional
period during which the Sub-Adviser serves as such for the Fund, subject to
applicable law. Sections 7, 10 and 11 shall survive termination or the end of
the term of this Agreement. Termination of this Agreement shall not affect any
rights or claims accrued under this Agreement prior to its termination.
9. Compliance Certification. From time to time the Sub-Adviser shall
provide such certifications with respect to Rule 38a-1 under the 1940 Act as are
reasonably requested by the Fund or the Manager. In addition, the Sub-Adviser
will, from time to time, provide a written assessment of its compliance program
A-7
in conformity with current industry standards that is reasonably acceptable to
the Fund to enable the Fund to fulfill its obligations under Rule 38a-1 under
the 1940 Act.
10. Confidentiality. The Sub-Adviser shall treat as confidential and use
only in connection with the Fund in accordance with this Agreement all
non-public information of the Fund and the Manager delivered to the Sub-Adviser
in the course of the Sub-Adviser's performances under this Agreement. The
Manager and the Fund shall treat as confidential and use only in connection with
the Fund in accordance with this Agreement all non-public information of the
Sub-Adviser delivered to the Fund or the Manager in the course of the
Sub-Adviser's performances under this Agreement, including for avoidance of
doubt investment decisions, trading strategies, and investment advice for the
Fund provided by or on behalf of the Sub-Adviser or any other sub-advisers
appointed by the Sub-Adviser under Section 3 ("Recommendations"). The
undertakings in the first two sentences of this paragraph shall not (a) limit
disclosures that are required to be made under applicable laws and regulations;
(b) apply to information that becomes public without a breach of this paragraph
or the next two following paragraphs; or (c) prohibit disclosures on a
confidential basis to lawyers, accountants, bankers, securities brokers, other
sub-advisers appointed by the Sub-Adviser under Section 3, or other service
providers to any of the parties to this Agreement related to the performances
contemplated by this Agreement. The parties acknowledge that any breach of the
undertakings in the first two sentences of this paragraph might result in
immediate, irreparable injury to another party and that, accordingly, equitable
remedies, including ex parte remedies, are appropriate in the event of any
actual, apparent, or threatened breach of any such undertaking. The undertakings
in this paragraph shall apply to derivative works.
The Fund and the Manager shall not use, or permit any of their affiliates
to use, any Recommendations for any purpose other than the management of the
Fund.
11. Sub-Adviser Marks. The Fund and the Manager acknowledge that
associates of the Sub-Adviser own the names "Janus Henderson Group", "Janus
Henderson Investors", and "Janus Henderson", and all related names, marks, and
trade dress (collectively, the foregoing are the "Janus Henderson Marks") and
all associated goodwill. The Fund and the Manager shall not take any action
inconsistent with such ownership, including, without limitation, contesting the
ownership of or validity of the Janus Henderson Marks. All use of the Janus
Henderson Marks under this Agreement inures to the sole benefit of the
Sub-Adviser for and on behalf of the owners of the Janus Henderson Marks. The
Fund and the Manager shall upon request execute and deliver such documents as
the Sub-Adviser may reasonably require to further evidence, assure, and confirm
the foregoing.
It is understood that the Fund and the Manager have the right to use the
Janus Henderson Marks in offering materials or promotional or sales-related
materials of the Fund, only with the prior written approval of the Sub-Adviser,
such approval not to be unreasonably withheld, and for so long as the
Sub-Adviser is Sub-Adviser of the Fund, except to the extent required by law.
Notwithstanding the foregoing, the Sub-Adviser's approval is not required when
(i) previously approved materials are re-issued with minor modifications, (ii)
the Manager and Sub-Adviser identify materials which they jointly determine do
not require the Sub-Adviser's approval and (iii) used as required to be
disclosed in the registration statement of the Fund. Upon termination of this
Agreement, the Fund and the Fund shall forthwith cease to use such name (or
derivative or logo) except to the extent required by law.
12. Notice. Any notice under this Agreement shall be sufficient in all
respects if given in writing and delivered by commercial courier providing proof
of delivery and addressed as follows or addressed to such other person or
address as such party may designate for receipt of such notice.
A-8
If to the Manager or the Fund: If to the Sub-Adviser:
First Trust Dynamic Europe Equity Income Fund Janus Capital Management LLC
First Trust Advisors L.P. _________________________________
120 E. Liberty Drive, Suite 400 _________________________________
Wheaton, Illinois 60187 Attention: U.S. Legal Department
Attention: Secretary
13. Limitations on Liability. All parties hereto are expressly put on
notice of the Fund's Declaration of Trust and all amendments thereto, a copy of
which is on file with the Secretary of the Commonwealth of Massachusetts, and
the limitation of shareholder and trustee liability contained therein and a copy
of which has been provided to the Sub-Adviser prior to the date hereof. This
Agreement is executed on behalf of the Fund by the Fund's officers in their
capacity as officers and not individually and is not binding upon any of the
Trustees, officers or shareholders of the Fund individually but the obligations
imposed upon the Fund by this Agreement are binding only upon the assets and
property of the Fund, and persons dealing with the Fund must look solely to the
assets of the Fund for the enforcement of any claims.
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement will be binding upon and shall inure to the benefit of the parties
hereto and their respective successors.
15. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and (except as to Section 13 hereof, which shall be
construed in accordance with the laws of the Commonwealth of Massachusetts) the
laws of the State of Illinois.
16. Amendment, Etc. This Agreement may only be amended, or its provisions
modified or waived, in a writing signed by the party against which such
amendment, modification or waiver is sought to be enforced.
17. Authority. Each party represents to the others that it is duly
authorized and fully empowered to execute, deliver and perform this Agreement.
The Fund represents that engagement of the Sub-Adviser has been duly authorized
by the Fund and is in accordance with the Fund's Declaration of Trust and other
governing documents of the Fund.
18. Severability. Each provision of this Agreement is intended to be
severable from the others so that if any provision or term hereof is illegal or
invalid for any reason whatsoever, such illegality or invalidity shall not
affect the validity of the remaining provisions and terms hereof; provided,
however, that the provisions governing payment of the Management Fee described
in Section 5 are not severable.
19. Third Party Beneficiaries. None of the provisions of this Agreement
shall be for the benefit of, or enforceable by, any person or entity that is not
a party hereto.
20. Forum Selection. Any action brought on or with respect to this
Agreement or any other document executed in connection herewith or therewith by
a party to this Agreement against another party to this Agreement shall be
brought only in a court of competent jurisdiction in Chicago, Cook County,
A-9
Illinois, or if venue does not lie in any such court only in a court of
competent jurisdiction within the State of Illinois (the "Chosen Courts"). Each
party to this Agreement (a) consents to jurisdiction in the Chosen Courts; (b)
waives any objection to venue in any of the Chosen Courts; and (c) waives any
objection that any of the Chosen Courts is an inconvenient forum. In any action
commenced by a party hereto against another party to the Agreement, there shall
be no right to a jury trial. THE RIGHT TO A TRIAL BY JURY IS EXPRESSLY WAIVED TO
THE FULLEST EXTENT PERMITTED BY LAW.
21. Entire Agreement. This Agreement constitutes the sole and entire
agreement of the parties hereto with respect to the subject matter expressly set
forth herein.
IN WITNESS WHEREOF, the Fund, the Manager and the Sub-Adviser have caused
this Agreement to be executed as of the day and year first above written.
FIRST TRUST ADVISORS L.P. JANUS CAPITAL MANAGEMENT LLC
By By
---------------------------------- ----------------------------------
Title: Title:
---------------------------- ----------------------------
FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND
By
----------------------------------
Title:
----------------------------
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FORM OF PROXY CARD
------------------
FIRST TRUST
PROXY CARD
SIGN, DATE AND VOTE ON THE REVERSE SIDE
YOUR VOTE IS IMPORTANT NO MATTER PROXY VOTING OPTIONS
HOW MANY SHARES YOU OWN. PLEASE
CAST YOUR PROXY VOTE TODAY! 1. MAIL your signed and voted proxy back in
the postage paid envelope provided
2. ONLINE at PROXYONLINE.COM using your
proxy control number found below
SHAREHOLDER NAME
AND ADDRESS HERE 3. By PHONE when you dial toll-free 1-888-
227-9349 to reach an automated touchtone
voting line
4. By PHONE with a live operator when you
call toll-free 1-800-284-1755 Monday
through Friday 9 a.m. to 10 p.m. Eastern
time
CONTROL
PLEASE CAST YOUR PROXY VOTE TODAY! NUMBER
FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND (FDEU)
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 23, 2018
The undersigned holder of shares of the First Trust Dynamic Europe Equity Income
Fund (the "Fund"), a Massachusetts business trust, hereby appoints W. Scott
Jardine, Kristi A. Maher, James M. Dykas, Donald P. Swade and Erin E. Klassman
as attorneys and proxies for the undersigned, with full powers of substitution
and revocation, to represent the undersigned and to vote on behalf of the
undersigned all shares of the Fund that the undersigned is entitled to vote at
the Special Meeting of Shareholders (the "Meeting") to be held at the Austin,
Texas offices of First Trust Advisors L.P., 500 W. 5th Street, Suite 9202,
Austin, TX 78701, on April 23, 2018, at 11:45 a.m. Central time, and any
adjournments or postponements thereof.
The undersigned hereby acknowledges receipt of the Notice of Special Meeting of
Shareholders and Proxy Statement dated March 15, 2018, and hereby instructs said
attorneys and proxies to vote said shares as indicated hereon. In their
discretion, the proxies are authorized to vote upon such other business as may
properly come before the Meeting and any adjournments or postponements thereof
(including, but not limited to, any questions as to adjournments or
postponements of the Meeting). A majority of the proxies present and acting at
the Meeting in person or by substitute (or, if only one shall be so present,
then that one) shall have and may exercise all of the power and authority of
said proxies hereunder. The undersigned hereby revokes any proxy previously
given. THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE FUND'S PROPOSAL SET FORTH ON THE REVERSE SIDE OF THIS PROXY CARD.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, AND THE PROPOSAL
FOR THE FUND (SET FORTH ON THE REVERSE SIDE OF THIS PROXY CARD) HAS BEEN
APPROVED BY THE BOARD OF TRUSTEES AND RECOMMENDED FOR APPROVAL BY SHAREHOLDERS.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO SUCH DIRECTION IS MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
BOARD OF TRUSTEES' RECOMMENDATION.
DO YOU HAVE QUESTIONS? If you have any questions about how to vote your proxy or
about the Meeting in general, please call toll-free 1-800-284-1755.
REPRESENTATIVES ARE AVAILABLE TO ASSIST YOU Monday through Friday 9 a.m. to 10
p.m. Eastern Time. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 23, 2018.
The proxy statement of the Fund is available at:
www.proxyonline.com/docs/firsttrustdynamiceuropeequityincomefund2018.pdf
--------------------------------------------------------------------------------
[PROXY ID NUMBER HERE] [BAR CODE HERE] [CUSIP HERE]
FIRST TRUST DYNAMIC EUROPE EQUITY INCOME FUND
PROXY CARD
YOUR SIGNATURE IS REQUIRED FOR YOUR VOTE TO BE
COUNTED. The signer(s) acknowledges receipt of
the Proxy Statement of the Fund. Your _____________________________
signature(s) on this Proxy should be exactly SIGNATURE (AND TITLE DATE
as your name(s) appear on this Proxy (reverse IF APPLICABLE)
side). If the shares are held jointly, each
holder should sign this Proxy.
Attorneys-in-fact, executors, administrators, ______________________________
trustees or guardians should indicate the full SIGNATURE (IF DATE
title and capacity in which they are signing. HELD JOINTLY)
--------------------------------------------------------------------------------
IF YOU VOTE ONLINE OR BY PHONE, YOU NEED NOT RETURN THIS PROXY CARD.
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
WILL BE VOTED "FOR" THE PROPOSAL SET FORTH BELOW.
TO VOTE, MARK ONE CIRCLE BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [X]
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR"
THE FUND'S PROPOSAL SET FORTH BELOW.
FOR AGAINST ABSTAIN
1 To approve, a new investment sub-advisory
agreement among the Fund, First Trust [ ] [ ] [ ]
Advisors L.P. and Janus Capital Management LLC.
THANK YOU FOR VOTING
[PROXY ID NUMBER HERE] [BAR CODE HERE] [CUSIP HERE]