0001445546-11-001848.txt : 20120723
0001445546-11-001848.hdr.sgml : 20120723
20110512142535
ACCESSION NUMBER: 0001445546-11-001848
CONFORMED SUBMISSION TYPE: PRE 14A
PUBLIC DOCUMENT COUNT: 2
CONFORMED PERIOD OF REPORT: 20101031
FILED AS OF DATE: 20110512
DATE AS OF CHANGE: 20110526
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: FIRST TRUST MORTGAGE INCOME FUND
CENTRAL INDEX KEY: 0001319183
IRS NUMBER: 356758396
FILING VALUES:
FORM TYPE: PRE 14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 811-21727
FILM NUMBER: 11835248
BUSINESS ADDRESS:
STREET 1: 120 EAST LIBERTY DRIVE, SUITE 400
CITY: WHEATON
STATE: IL
ZIP: 60187
BUSINESS PHONE: 630765-8000
MAIL ADDRESS:
STREET 1: 120 EAST LIBERTY DRIVE, SUITE 400
CITY: WHEATON
STATE: IL
ZIP: 60187
FORMER COMPANY:
FORMER CONFORMED NAME: FIRST TRUST/FIDAC MORTGAGE INCOME FUND
DATE OF NAME CHANGE: 20050228
PRE 14A
1
fmy_pre14a.txt
PRELIMINARY PROXY STATEMENT
As filed with the Securities and Exchange Commission on May 12, 2011.
===============================================================================
1933 Act File No. 333-123262
1940 Act File No. 811-21727
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement.
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2)).
[ ] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-12
FIRST TRUST MORTGAGE INCOME FUND
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
PRELIMINARY COPY -- DRAFT OF MAY 12, 2011
FIRST TRUST MORTGAGE INCOME FUND
(FORMERLY KNOWN AS FIRST TRUST/FIDAC MORTGAGE INCOME FUND)
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
_____________, 2011
Dear Shareholder:
The accompanying materials relate to the Special Meeting of
Shareholders (referred to as the "Meeting") of First Trust Mortgage
Income Fund (formerly known as First Trust/FIDAC Mortgage Income Fund)
(the "Fund"). The Meeting will be held at the offices of First Trust
Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton, Illinois
60187, on _______, July __, 2011, at 4:00 p.m. Central Time.
At the Meeting, you will be asked to vote on a proposal to approve a
new investment sub-advisory agreement with a new sub-advisor for the Fund
and to transact such other business as may properly come before the
Meeting and any adjournments and postponements thereof. The Board of
Trustees of the Fund is recommending that shareholders approve the
proposal. The proposal is described in the accompanying Notice of Special
Meeting of Shareholders and Proxy Statement.
YOUR PARTICIPATION AT THE MEETING IS VERY IMPORTANT. If you cannot
attend the Meeting, you may participate by proxy. As a Shareholder, you
cast one vote for each share of the Fund that you own and a proportionate
fractional vote for any fraction of a share that you own. Please take a
few moments to read the enclosed materials and then cast your vote using
one of the methods indicated on the enclosed proxy card.
VOTING TAKES ONLY A FEW MINUTES. EACH SHAREHOLDER'S VOTE IS
IMPORTANT. YOUR PROMPT RESPONSE WILL BE MUCH APPRECIATED. PLEASE TAKE A
MOMENT TO VOTE, EITHER BY COMPLETING AND RETURNING YOUR PROXY CARD IN THE
ENCLOSED POSTAGE-PAID ENVELOPE, BY TELEPHONE OR THROUGH THE INTERNET.
We appreciate your participation in this important Meeting.
Thank you.
Sincerely,
James A. Bowen
Chairman of the Board
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IF YOU NEED ANY ASSISTANCE, OR HAVE ANY QUESTIONS REGARDING THE MEETING
OR HOW TO VOTE YOUR SHARES, PLEASE CALL THE FUND'S PROXY SOLICITOR, THE
ALTMAN GROUP, INC., AT [ ] WEEKDAYS FROM 9:00 A.M. TO 10:00 P.M. EASTERN
TIME.
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INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense involved in
validating your vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the
registration.
3. All Other Accounts: The capacity of the individual signing the
proxy should be indicated unless it is reflected in the form of
registration. For example:
Registration Valid Signature
Corporate Accounts
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
Trust Accounts
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr., UGMA John B. Smith
(2) John B. Smith John B. Smith, Jr., Executor
FIRST TRUST MORTGAGE INCOME FUND
(FORMERLY KNOWN AS FIRST TRUST/FIDAC MORTGAGE INCOME FUND)
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on July __, 2011
_____________, 2011
To the Shareholders of First Trust Mortgage Income Fund:
Notice is hereby given that the Special Meeting of Shareholders
(referred to as the "Meeting") of First Trust Mortgage Income Fund
(formerly known as First Trust/FIDAC Mortgage Income Fund), a
Massachusetts business trust (the "Fund"), will be held at the offices of
First Trust Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton,
Illinois 60187, on ________, July __, 2011, at 4:00 p.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 advisor, and Brookfield
Investment Management Inc., as investment sub-advisor.
2. To transact such other business as may properly come before the
Meeting (including any adjournments or postponements).
The close of business on May ___, 2011 has been fixed as the record
date for the determination of Shareholders entitled to notice of and to
vote at the Meeting and any adjournments or postponements thereof.
By order of the Board of Trustees,
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, by
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 Meeting or how to vote
your Shares, please call the Fund's Proxy Solicitor, The Altman Group,
Inc., at [ ] weekdays from 9:00 a.m. to 10:00 p.m. Eastern Time.
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This page intentionally left blank.
FIRST TRUST MORTGAGE INCOME FUND
(FORMERLY KNOWN AS FIRST TRUST/FIDAC MORTGAGE INCOME FUND)
SPECIAL MEETING OF SHAREHOLDERS
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
PROXY STATEMENT
_____________, 2011
THIS PROXY STATEMENT AND THE ENCLOSED PROXY CARD WILL FIRST BE
MAILED TO SHAREHOLDERS ON OR ABOUT _____________, 2011.
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Trustees (the "Board") of First
Trust Mortgage Income Fund, a Massachusetts business trust (the "Fund"),
for use at the Special Meeting of Shareholders of the Fund to be held on
_____, July __, 2011, at 4:00 p.m. Central Time, at the offices of First
Trust Advisors L.P. ("First Trust Advisors" or the "Advisor"), located at
120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, and at any
adjournments or postponements thereof (referred to collectively as the
"Meeting"). A Notice of Special Meeting of Shareholders and a proxy card
accompany this Proxy Statement.
As discussed more fully below, shareholders of the Fund are being
asked:
1. To vote to approve a new investment sub-advisory agreement among
the Fund, the Advisor and Brookfield Investment Management Inc., as
investment sub-advisor.
2. To transact such other business as may properly come before the
Meeting (including any adjournments or postponements).
The expense of preparing, printing and mailing the enclosed proxy,
accompanying notice and this Proxy Statement, and all other costs in
connection with the solicitation by the Fund of proxies to be voted at
the Meeting, will be borne by the Fund. The Fund will also reimburse
brokerage firms and others for their expenses in forwarding the Fund's
proxy solicitation materials to the person(s) for whom they hold shares
of the Fund. 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, The Altman Group, Inc., has also
been engaged to assist in the solicitation of proxies at a cost which is
expected to be approximately $____. As indicated above, this cost will be
borne by the Fund.
The close of business on May ____, 2011 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. The Fund has one class of shares
of beneficial interest with a par value of $0.01 per share, known as
common shares ("Shares"). Shareholders of record on the Record Date are
entitled to one vote for each Share the shareholder owns and a
proportionate fractional vote for any fraction of a Share the shareholder
owns.
On the Record Date, the Fund had _____ Shares outstanding. Shares of
the Fund are listed on the New York Stock Exchange under the ticker
symbol "FMY".
For shareholders voting by mail, if the enclosed proxy card is
properly executed and returned in time to be voted at the Meeting, the
Fund Shares represented thereby will be voted in accordance with the
instructions marked thereon, or, if no instructions are marked thereon,
will be voted at the discretion of the persons named on the proxy card.
In any event, unless instructions to the contrary are given, a properly
executed and returned proxy, whether returned via mail, telephone or
Internet, will be voted FOR the proposal to approve the new investment
sub-advisory agreement 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 or its Shares in person, or by timely submitting a letter of
revocation or a later-dated proxy to the Fund at the above address. A
list of shareholders entitled to notice of and to be present and to vote
at the Meeting will be available at the offices of the Fund, 120 East
Liberty Drive, Suite 400, Wheaton, Illinois 60187, for inspection by any
shareholder during regular business hours prior to the Meeting.
Shareholders will need to show valid identification and proof of Share
ownership to be admitted to the Meeting or to inspect the list of
shareholders.
Under the By-Laws of 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, all Shares present and entitled to vote, including
abstentions and broker non-votes (i.e., Shares held by brokers or
nominees as to which (i) instructions have not been received from the
beneficial owners or the persons entitled to vote and (ii) the broker or
nominee does not have discretionary voting power), shall be counted. Any
meeting of shareholders may be postponed prior to the meeting with notice
to the shareholders entitled to vote at that meeting. Any meeting of
shareholders may, by action of the chairman of the meeting, be adjourned
to permit further solicitation of proxies without further notice with
respect to one or more matters to be considered at such meeting to a
designated time and place, whether or not a quorum is present with
respect to such matter. In addition, upon motion of the chairman of the
meeting, the question of adjournment may be submitted to a vote of the
shareholders, and in that case, any adjournment must be approved by the
vote of holders of a majority of the Shares present and entitled to vote
with respect to the matter or matters adjourned, and without further
notice. Unless a proxy is otherwise limited in this regard, any Shares
present and entitled to vote at a meeting, including broker non-votes,
may, at the discretion of the proxies named therein, be voted in favor of
such an adjournment.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE SHAREHOLDER MEETING TO BE HELD ON JULY ___, 2011. THIS PROXY STATEMENT
IS AVAILABLE ON THE INTERNET AT: ______________________________________.
THE FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS ARE ALSO AVAILABLE
ON THE INTERNET AT:
HTTP://WWW.FTPORTFOLIOS.COM/RETAIL/CEF/CEFFUNDNEWS.ASPX?TICKER=FMY. 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 THE ADVISOR AT 120 EAST LIBERTY DRIVE, SUITE 400,
WHEATON, ILLINOIS 60187, OR CALL (800) 988-5891.
YOU MAY CALL (800) 988-5891 FOR INFORMATION ON HOW TO OBTAIN
DIRECTIONS TO BE ABLE TO ATTEND THE MEETING AND VOTE IN PERSON.
- 2 -
In order that your Shares may be represented at the Meeting, please vote
your proxy as soon as possible either by mail, by telephone or through the
Internet, as indicated on the enclosed proxy card. If voting by mail, you are
requested to:
- indicate your instructions on the proxy card;
- date and sign the proxy card;
- mail the proxy card promptly in the enclosed envelope which requires
no postage if mailed in the continental United States; and
- allow sufficient time for the proxy card to be received BY 4:00 P.M.
CENTRAL TIME, on ______, JULY ___, 2011. (However, proxies received
after this date may still be voted in the event of an adjournment or
postponement to a later date.)
Instructions for voting by telephone or through the Internet are set forth on
the enclosed proxy card.
The date of this Proxy Statement is _____________, 2011.
- 3 -
PROPOSAL: APPROVAL OF A NEW INVESTMENT SUB-ADVISORY AGREEMENT FOR THE FUND
Background and Reason for Vote
Pursuant to an investment sub-advisory agreement among Fixed Income
Discount Advisory Company ("FIDAC" or the "Prior Sub-Advisor"), the Advisor and
the Fund (the "Prior Sub-Advisory Agreement"), FIDAC acted as investment
sub-advisor to the Fund until April 29, 2011. On January 11, 2011, FIDAC
notified the Fund of its resignation as investment sub-advisor in accordance
with the terms of the Prior Sub-Advisory Agreement, effective April 30, 2011. In
anticipation of the effective date of FIDAC's resignation, the Advisor
considered various candidates to succeed FIDAC and recommended to the Board that
Brookfield Investment Management Inc. ("Brookfield" or the "Sub-Advisor"), an
investment advisor registered with the Securities and Exchange Commission (the
"SEC") pursuant to the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), be appointed as the new sub-advisor to the Fund. Accordingly,
at a special meeting of the Board of the Fund held on April 18, 2011 (the "Board
Meeting"), the Board of the Fund determined that the appointment of Brookfield
was in the best interests of the Fund. In addition, the Board authorized the
termination of the Prior Sub-Advisory Agreement, effective April 29, 2011 (the
"Termination Date").
As permitted under the Investment Company Act of 1940, as amended (the
"1940 Act"), at the Board Meeting, to ensure the continuation of investment
sub-advisory services to the Fund after the Termination Date, the Board of
Trustees of the Fund, including all of the Trustees who are not "interested
persons," as that term is defined in the 1940 Act, of the Fund (such Trustees,
the "Independent Trustees"), approved for the Fund an interim sub-advisory
agreement (the "Interim Sub-Advisory Agreement") among the Advisor, the Fund and
Brookfield. The Interim Sub-Advisory Agreement has been in effect since April
29, 2011. In addition, at the Board Meeting, the Board of Trustees of the Fund,
including all of the Independent Trustees, approved for the Fund, subject to
shareholder approval, a new sub-advisory agreement (such agreement, the "New
Sub-Advisory Agreement") among the Advisor, the Fund and Brookfield.
Section 15(a) of the 1940 Act generally requires that investment advisory
agreements (including investment sub-advisory agreements) be approved by
shareholders; however, Rule 15a-4 promulgated under the 1940 Act ("Rule 15a-4")
provides a temporary exemption from the shareholder approval requirement if a
previous advisory contract was terminated due to certain events. Pursuant to
Rule 15a-4, the Interim Sub-Advisory Agreement will be in effect no longer than
through September 26, 2011 (i.e., 150 days after the Termination Date). If
shareholders of the Fund do not approve the New Sub-Advisory Agreement by that
date, the Board will take such action as it deems to be in the best interests of
the Fund, which might include seeking approval of a new investment sub-advisory
agreement or taking any other steps deemed appropriate by the Board. The Interim
Sub-Advisory Agreement will terminate upon the approval by shareholders of the
New Sub-Advisory Agreement. In addition, the Interim Sub-Advisory Agreement may
be terminated by the Fund 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 promulgated thereunder) of the Fund upon 60 days' written notice to
Brookfield.
Certain Information Regarding the Prior Sub-Advisory Agreement
Set forth below, with respect to the Prior Sub-Advisory Agreement, are:
(1) the date of the Prior Sub-Advisory Agreement; (2) the date on which the
Prior Sub-Advisory Agreement was last submitted to a vote of the shareholders of
the Fund and the purpose of such submission; and (3) the actions taken by the
- 4 -
Fund's Board with respect to the Prior Sub-Advisory Agreement since the
beginning of the Fund's last fiscal year:
DATE OF PRIOR DATE AND PURPOSE OF LAST BOARD ACTION SINCE
SUB-ADVISORY SUBMISSION TO BEGINNING OF LAST
AGREEMENT SHAREHOLDERS FISCAL YEAR
December 6, 2010 December 6, 2010 Approval (September 20, 2010)
(Previous sub-advisory Termination (April 18, 2011)
agreement automatically
terminated as the result of
an "assignment" as defined in
the 1940 Act)
Brookfield Investment Management Inc.
General and Organizational Information
Brookfield, an indirect wholly-owned subsidiary of Brookfield Asset
Management Inc. (1) ("BAM"), is a Delaware corporation organized in 1989. The
business address of Brookfield and its officers and directors is Three World
Financial Center, 200 Vesey Street, 10th Floor, New York, New York 10281-1010.
As of March 31, 2011, Brookfield and its affiliates had over $23 billion in
assets under management. Brookfield's clients include pension plans, foundations
and endowments, insurance companies, financial institutions, mutual funds,
closed-end funds and structured products. Brookfield also provides portfolio
evaluation and consultation services. In its investment process, Brookfield
focuses on relative value opportunities. BAM, an Ontario, Canada corporation, is
a global asset manager focused on property, power and other infrastructure
assets and has its principal place of business at Brookfield Place, 181 Bay
Street, Suite 300, P.O. Box 762, Toronto, Ontario M5J 2T3.
________________
1 Brookfield is an indirect wholly owned subsidiary of BAM. HCM Holdings,
Inc. ("HCM") is the sole shareholder of Brookfield. HCM is a wholly owned
subsidiary of Brookfield Investment Management Holdings Inc. ("Brookfield
Holdings"). Brookfield Holdings is a wholly owned subsidiary of Brookfield
US Corporation, which is a wholly owned subsidiary of Brookfield US
Holdings Inc. Brookfield US Holdings Inc. is a wholly owned subsidiary of
BAM. Brookfield, HCM, Brookfield Holdings and Brookfield US Corporation
are each located at Three World Financial Center, 200 Vesey Street, 10th
Floor, New York, New York 10281 1010. BAM and Brookfield US Holdings Inc.
are each located at Brookfield Place, 181 Bay Street, Suite 300, P.O. Box
762, Toronto, Ontario M5J 2T3.
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A list of the directors and principal officers of the Sub-Advisor,
their positions with the Sub-Advisor and their principal occupations are
set forth below:
NAME POSITION WITH BROOKFIELD PRINCIPAL OCCUPATION
---- ------------------------ --------------------
Kim G. Redding Member of the Board of Directors, Chief Executive Officer
Chief Executive Officer, and Chief Investment Officer
Chief Investment Officer of Brookfield
President of several investment
companies advised by Brookfield
Jonathan C. Tyras Managing Director, Secretary, Managing Director, Secretary,
General Counsel and Chief Financial General Counsel and Chief
Officer Financial Officer of
Brookfield
Secretary of several investment
companies advised by Brookfield
Seth A. Gelman Director, Chief Compliance CCO of Brookfield
Officer ("CCO")
CCO of several investment
companies advised by Brookfield
Portfolio Manager Information
The co-portfolio managers identified below are currently responsible for
the day-to-day management of the Fund's portfolio pursuant to the Interim
Sub-Advisory Agreement. It is currently expected that they will continue to
manage the Fund's portfolio if shareholders approve the New Sub-Advisory
Agreement.
ANTHONY A. BREAKS, CFA - DIRECTOR. Mr. Breaks is a Portfolio Manager on
Brookfield's Structured Products Investments Team. He is one of four team
leaders in mortgage-backed securities ("MBS")/asset-backed securities ("ABS")
and is a member of the team's securities analysis committee. In his role, Mr.
Breaks is one of the team's portfolio managers. Mr. Breaks has also managed
structured product vehicles, such as structured investment vehicles ("SIVs"),
asset-backed commercial paper ("ABCP") and collateralized debt obligations
("CDOs") for Brookfield and has experience in insurance company asset
management. Mr. Breaks earned a Bachelor of Science degree in Electrical
Engineering from the Massachusetts Institute of Technology. He holds the
Chartered Financial Analyst designation.
CHRIS WU - DIRECTOR. Mr. Wu is a Portfolio Manager on Brookfield's
Structured Products Investment Team focusing on Agency MBS. He is responsible
for the firm's Agency MBS exposures. He develops quantitative tools to formulate
research and develop trading strategies for Agency MBS exposures. Mr. Wu holds
an MBA from New York University as well as a Master of Science degree in
Computer Science from the University of Saskatchewan. He also earned a Bachelor
of Economics degree from Huazhong University of Science and Technology in China.
- 6 -
Similar Investment Company Advised by Brookfield
Brookfield currently acts as investment advisor to one other investment
company, set forth in the table below, with investment objectives and policies
that are similar to, or that overlap with, those of the Fund:
FUND APPROXIMATE NET INVESTMENT ADVISORY
ASSETS AS OF ANNUAL FEE RATE
MARCH 31, 2011
Helios Strategic Mortgage 0.65% of average
Income Fund, Inc. (HSM)(1) $72 million weekly net assets
________________
(1) This fund is subject to an additional annual fee payable to
Brookfield of 0.20% of average weekly net assets for administrative
services.
Comparison of Certain Terms of the New Sub-Advisory Agreement and Prior
Sub-Advisory Agreement
Below is a brief comparison of certain terms of the Prior Sub-Advisory
Agreement to the corresponding terms of the New Sub-Advisory Agreement. Although
the terms of the New Sub-Advisory Agreement and the Prior Sub-Advisory Agreement
are similar in certain respects, there are some differences of which you should
be aware. For a more complete understanding of the New Sub-Advisory Agreement,
please refer to the form of the New Sub-Advisory Agreement, provided in Appendix
A hereto. The summary of the terms and provisions of the New Sub-Advisory
Agreement below is qualified in all respects by the terms and conditions of the
form of New Sub-Advisory Agreement.
Investment Advisory Services. Both the Prior Sub-Advisory Agreement and
the New Sub-Advisory Agreement provide that the sub-advisor will furnish an
investment program in respect of, make investment decisions for, and place all
orders for the purchase and sale of securities for the Fund's investment
portfolio, all on behalf of the Fund and subject to the supervision of the Board
and the Advisor. As was the case under the Prior Sub-Advisory Agreement, under
the New Sub-Advisory Agreement, the sub-advisor is required to monitor the
Fund's investments and to comply with the provisions of the Fund's Declaration
of Trust and By-Laws and the stated investment objectives, policies and
restrictions of the Fund; however, with respect to the obligation to monitor the
Fund's investments, the New Sub-Advisory Agreement states that except for the
sub-advisor's compliance responsibilities with respect to its portfolio
services, the Advisor will remain responsible for the oversight of compliance
with the Fund's policies and procedures and its Prospectus and Statement of
Additional Information. In addition, under the New Sub-Advisory Agreement, the
sub-advisor will assist in the valuation of portfolio securities held by the
Fund as requested by the Advisor or the Fund; the Prior Sub-Advisory Agreement
did not include a corresponding provision. Moreover, the New Sub-Advisory
Agreement provides that unless the Board determines otherwise, the sub-advisor
will vote all proxies solicited by or with respect to the issuers of securities
corresponding to assets of the Fund's investment portfolio allocated by the
Advisor to the sub-advisor; in contrast, the Prior Sub-Advisory Agreement did
not include a specific related provision.
Brokerage. As was the case under the Prior Sub-Advisory Agreement, the New
Sub-Advisory Agreement authorizes the sub-advisor to select the brokers or
dealers that will execute the purchases and sales of portfolio investments
- 7 -
for the Fund and directs the sub-advisor to use its commercially reasonable
efforts to obtain best execution.
Fees. Under both the Prior Sub-Advisory Agreement and the New Sub-Advisory
Agreement, for services provided and expenses assumed, the Advisor agrees to pay
the sub-advisor a portfolio management fee equal to the annual rate of 0.50% of
the Fund's "Managed Assets." For this purpose, the term "Managed Assets"
generally means the average daily gross asset value of the Fund (which includes
assets attributable to the Fund's preferred shares, if any, and the principal
amount of borrowings), minus the sum of the Fund's accrued and unpaid dividends
on any outstanding preferred shares and accrued liabilities (other than the
principal amount of any borrowings incurred, commercial paper or notes issued by
the Fund and the liquidation preference of any outstanding preferred shares of
the Fund).
During the Fund's last fiscal year, for its sub-advisory services to the
Fund, the Prior Sub-Advisor was paid aggregate fees of $__________.
Payment of Expenses. Under the Prior Sub-Advisory Agreement, the
sub-advisor agreed to pay all expenses incurred by it in connection with its
activities under such Agreement other than the "cost of securities and other
assets (including brokerage commissions, if any) purchased for the Fund and the
costs associated with financings the Fund enters into." The New Sub-Advisory
Agreement states that the sub-advisor will pay all expenses incurred by it in
connection with its activities under the Agreement other than the "cost of
securities and other assets (including brokerage commissions, transfer fees,
registration costs, taxes and other similar costs and transaction-related
expenses and fees arising out of transactions for the Fund, if any) purchased
for the Fund." The New Sub-Advisory Agreement also provides that the sub-advisor
is not responsible for payment of any taxes due on capital or income held or
collected for the Fund.
Limitation of Liability. As was the case under the Prior Sub-Advisory
Agreement, the New Sub-Advisory Agreement provides that the sub-advisor will not
be liable for, and the Fund and the Advisor will not take any action against the
sub-advisor to hold the sub-advisor liable for, any error of judgment or mistake
of law or for any loss suffered by the Fund or the Advisor in connection with
the performance of the sub-advisor's duties under the Agreement, except for a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the sub-advisor in the performance of its duties under such Agreement,
or by reason of its reckless disregard of its obligations and duties under such
Agreement.
Continuance. The Prior Sub-Advisory Agreement provided that it would be in
effect for an initial two-year term and could be continued thereafter for
successive one-year periods if such continuance was specifically approved at
least annually in the manner required by the 1940 Act and rules and regulations
thereunder. If the shareholders of the Fund approve the New Sub-Advisory
Agreement, the New Sub-Advisory Agreement will, unless continued, expire on
December 6, 2012 (the expiration date, unless continued, of the Fund's
investment management agreement with the Advisor). 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 rules and regulations thereunder.
Termination. As was the case under the Prior Sub-Advisory Agreement, the
New Sub-Advisory Agreement provides for termination (1) automatically in the
event of its assignment (as defined in the 1940 Act and rules and regulations
- 8 -
thereunder), (2) at any time without the payment of any penalty by the Advisor
or the sub-advisor upon 60 days' written notice to the other parties, and (3) by
the Fund by action of the Board or by a vote of a majority of the outstanding
voting securities of the Fund (as defined in the 1940 Act and rules and
regulations thereunder) upon 60 days' written notice to the sub-advisor without
the payment of any penalty. In addition, the Prior Sub-Advisory Agreement was,
and the New Sub-Advisory Agreement is, terminable at any time without the
payment of any penalty by the Advisor, by the Board or by vote of a majority of
the outstanding voting securities of the Fund (as defined in the 1940 Act and
rules and regulations thereunder) in the event that it is established by a court
of competent jurisdiction that the sub-advisor or any officer or director of the
sub-advisor has taken any action that results in a breach of the material
covenants of the sub-advisor set forth in the Agreement.
Certain Other Additional Provisions Included in New Sub-Advisory
Agreements. In addition to various miscellaneous updates and revisions, the New
Sub-Advisory Agreement contains certain provisions that were not included in the
Prior Sub-Advisory Agreement, including:
- a provision regarding maintenance by the Fund's custodian (or by a
central depository selected by the custodian) of the assets subject
to the New Sub-Advisory Agreement;
- certain representations and warranties made by the Fund, the Advisor
and the sub-advisor; and
- a provision regarding compliance with Rule 38a-1 under the 1940 Act
(which relates to investment companies' and their service providers'
(including sub-advisors) compliance procedures and practices) and
related certifications.
Interim Sub-Advisory Agreement
The Interim Sub-Advisory Agreement (including the compensation provisions)
is very similar to the New Sub-Advisory Agreement. The differences include: (1)
different dates; (2) a reference to Rule 15a-4 (described above) included in the
Interim Sub-Advisory Agreement; and (3) different term and termination
provisions.
Change in Investment Policy
At the Board Meeting, in addition to approving the Interim Sub-Advisory
Agreement and the New Sub-Advisory Agreement, the Board approved a change to one
of the Fund's non-fundamental investment policies (i.e., an investment policy
that may be changed by the Fund's Board without shareholder approval). The
change was proposed in order to enhance the Fund's trading flexibility and
investment opportunities. Currently, the Fund invests all of its managed assets
in securities that at the time of investment are investment grade quality and
rated within the three highest investment grades by at least one rating agency
or are unrated but judged to be of comparable quality by the Fund's sub-advisor.
Effective on or about July 5, 2011, under its revised investment policy, the
Fund may invest up to 25% of its managed assets in securities that at the time
of investment are rated below "A" by at least one rating agency or are unrated
but judged to be of comparable quality by the Fund's sub-advisor. This change to
the Fund's investment policy will become effective even if shareholders of the
Fund do not approve the New Sub-Advisory Agreement.
- 9 -
Board Considerations
The Board of Trustees of the Fund, including the Independent Trustees,
approved the Interim Sub-Advisory Agreement and the New Sub-Advisory Agreement
(collectively, the "Agreements") among the Fund, the Advisor and Brookfield at
the Board Meeting. The Board determined that the Agreements are in the best
interests of the Fund in light of the services, expenses and such other matters
as the Board considered to be relevant in the exercise of its reasonable
business judgment.
On January 11, 2011, FIDAC notified the Fund and the Advisor of its
resignation as sub-advisor to the Fund, effective April 30, 2011. The Advisor
immediately notified the Board and thereafter conducted a review of potential
sub-advisors to replace FIDAC and also reviewed its own internal capabilities to
provide day-to-day portfolio management services to the Fund. After reviewing
the potential options, the Advisor determined to recommend that Brookfield serve
as the new sub-advisor for the Fund. The Board considered that pursuant to the
1940 Act, any sub-advisory agreement with a replacement sub-advisor would
require shareholder approval prior to such sub-advisor assuming its duties. In
light of the short amount of time available to the Fund and the Advisor to find
a suitable replacement for FIDAC and to obtain shareholder approval of a new
sub-advisory agreement, the Advisor proposed and the Board approved at the Board
Meeting the termination of the Prior Sub-Advisory Agreement effective April 29,
2011. The termination of the Prior Sub-Advisory Agreement allowed the Fund to
rely on Rule 15a-4 under the 1940 Act to enter into an interim sub-advisory
agreement with a successor sub-advisor without first obtaining shareholder
approval during the period while shareholder approval of a new sub-advisory
agreement was sought.
Prior to the Board Meeting, Brookfield provided to the Board written
responses to questions posed by independent legal counsel on behalf of the
Independent Trustees. At the Board Meeting, representatives from Brookfield,
including two of the prospective portfolio managers for the Fund, made a
presentation to the Board and responded to questions. In their presentation, the
Brookfield representatives reviewed their investment process and stated that
while they generally concurred with the way the Fund had been managed by FIDAC,
in light of current market conditions and the Fund's holdings, they would intend
to make certain changes to the Fund's portfolio. The Brookfield representatives
also discussed a proposed change to the Fund's investment policy with respect to
securities rated below "A." The Board then discussed the presentation and the
materials provided. The Board noted its familiarity with Brookfield, and
considered that Brookfield had transitioned into the role of sub-advisor to
three other First Trust closed-end funds also overseen by the Board after the
resignation of the funds' sub-advisor in 2009. The Independent Trustees then met
separately with their independent legal counsel to discuss the information
provided by Brookfield and the Advisor. Based on their consideration of all the
information received, the Trustees appointed Brookfield as the interim
sub-advisor to the Fund, pursuant to the Interim Sub-Advisory Agreement,
effective April 29, 2011. Also at the Board Meeting, the Board approved the New
Sub-Advisory Agreement and determined to recommend it to shareholders of the
Fund for their approval.
To reach its determinations as to the Agreements, the Board considered its
duties under the 1940 Act, as well as under the general principles of state law
in reviewing and approving advisory contracts; the requirements of the 1940 Act
in such matters; the fiduciary duty of investment advisors with respect to
advisory agreements and compensation; the standards used by courts in
determining whether investment company boards have fulfilled their duties; and
the factors to be considered by the Board in voting on such agreements. In its
evaluation of the Agreements, the Board considered a report from Brookfield
responding to a request for information from counsel to the Independent
- 10 -
Trustees. The report, among other things, outlined the services to be provided
by Brookfield to the Fund (including the relevant personnel responsible for
these services and their experience); the proposed sub-advisory fee for the Fund
as compared to fees charged to other clients of Brookfield; the potential for
economies of scale, if any; financial data on Brookfield; fall-out benefits to
Brookfield; and a summary of Brookfield's compliance program. The Board applied
its business judgment to determine whether the proposed arrangements between the
Fund, the Advisor and Brookfield are reasonable business arrangements from the
Fund's perspective as well as from the perspective of shareholders.
In reviewing the Agreements, the Board considered the nature, quality and
extent of services to be provided by Brookfield under the Agreements. The Board
considered Brookfield's investment style and the backgrounds of the investment
personnel who would be responsible for the day-to-day management of the Fund.
The Board reviewed performance information provided by Brookfield for an
institutional separate account managed by Brookfield with a similar investment
strategy as will be used for the Fund. The Board also discussed with two of the
prospective portfolio managers the approach they planned to take in
transitioning the Fund's portfolio. In light of the information presented and
the considerations made, the Board concluded that the nature, quality and extent
of services to be provided to the Fund by Brookfield under the Agreements are
expected to be satisfactory.
The Board considered the sub-advisory fees to be paid under the
Agreements. The Board noted that the sub-advisory fee under the Agreements would
be the same as the fee paid under the Prior Sub-Advisory Agreement. The Board
considered that the sub-advisory fee was negotiated at arm's length between the
Advisor and Brookfield, an unaffiliated third party, and noted that the fees to
be paid to Brookfield would be paid by the Advisor from its advisory fee. The
Board also considered the advisory fees charged by Brookfield to other
exchange-traded closed-end funds it manages. The Board noted that the advisory
fees charged by Brookfield to these funds were higher than the sub-advisory fee
under the Agreements. On the basis of all the information provided, the Board
concluded that the sub-advisory fees to be paid under the Agreements were
reasonable and appropriate in light of the nature, quality and extent of
services expected to be provided by Brookfield under the Agreements.
The Board considered Brookfield's statement regarding its expected costs
in providing services to the Fund and the relation to the expected profitability
of the New Sub-Advisory Agreement to Brookfield. The Board noted that the
overall management fee structure reflects an appropriate level of sharing of any
economies of scale at current asset levels. The Board noted that Brookfield
currently does not intend to utilize soft dollars in connection with its
management of the Fund's portfolio, and did not anticipate any fall-out benefits
from its relationship with the Fund.
Based on all of the information considered and the conclusions reached,
the Board, including the Independent Trustees, determined that the terms of the
Agreements are fair and reasonable and that the approval of the Agreements is in
the best interests of the Fund. No single factor was determinative in the
Board's analysis.
Shareholder Approval and Required Vote
To become effective, the New Sub-Advisory Agreement must be approved by a
vote of a majority of the outstanding voting securities of the Fund. The "vote
of a majority of the outstanding voting securities" 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
- 11 -
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.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSAL.
IF YOU NEED ANY ASSISTANCE, OR HAVE ANY QUESTIONS REGARDING THE PROPOSAL OR THE
MEETING, PLEASE CALL THE FUND'S PROXY SOLICITOR, THE ALTMAN GROUP, INC., AT
[ ] WEEKDAYS FROM 9:00 A.M. TO 10:00 P.M. EASTERN TIME.
- 12 -
ADDITIONAL INFORMATION
Information about the Advisor
First Trust Advisors L.P., 120 East Liberty Drive, Suite 400,
Wheaton, Illinois 60187, serves as the Fund's investment advisor. The
Advisor is a limited partnership, with one limited partner, Grace
Partners of DuPage L.P., and one general partner, The Charger
Corporation. Grace Partners of DuPage L.P. is a limited partnership with
one general partner, The Charger Corporation, and a number of limited
partners. The Charger Corporation is an Illinois corporation controlled
by James A. Bowen, the Chief Executive Officer of the Advisor and the
Chairman of the Board of the Fund. On August 24, 2010, members of the
Robert Donald Van Kampen family entered into a stock purchase agreement
with Mr. Bowen to sell 100% of the common stock of The Charger
Corporation to him (he holds the interest through a limited liability
company of which he is the sole member) (the "Transaction") for
$3,000,000 payable at the Transaction closing. The Transaction was
completed in accordance with its terms on October 12, 2010. In addition,
in October 2010, Mr. Bowen sold three limited partnership units of Grace
Partners of DuPage L.P. to Grace Partners of DuPage L.P. for a price of
$1,000,000 per unit.
Information about the Administrator, Accounting Agent and Transfer Agent
BNY Mellon Investment Servicing (US) Inc., 301 Bellevue Parkway,
Wilmington, Delaware 19809, acts as the administrator, accounting agent and
transfer agent to the Fund.
Beneficial Ownership
As of December 31, 2010, the Independent Trustees of the Fund and James A.
Bowen, a Trustee and an "interested person" (as defined in the 1940 Act) of the
Fund (the "Interested Trustee"), beneficially owned the following numbers of
Shares of the Fund:
TRUSTEE
INTERESTED TRUSTEE
James A. Bowen 0
INDEPENDENT TRUSTEES
Richard E. Erickson 0
Thomas R. Kadlec 650
Robert F. Keith 0
Niel B. Nielson 386
As of December 31, 2010, each Trustee beneficially owned less than 1% of
the outstanding Shares of the Fund. As of December 31, 2010, the Trustees and
officers as a group beneficially owned 1,036 Shares of the Fund, which is less
than 1% of the Fund's Shares.
- 13 -
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, as amended (the "1934 Act")) beneficially owned
more than 5% of any class of the Fund's outstanding Shares, except as noted in
the following table. Information as to beneficial ownership of Shares, including
percentage of 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"). The Fund has no knowledge of the identity of the ultimate
beneficiaries of the respective Shares listed below.
NAME AND ADDRESS OF SHARES BENEFICIALLY % OUTSTANDING SHARES
BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
[ Shares] [ ]%
[ Shares] [ ]%
[ Shares] [ ]%
[ Shares] [ ]%
[ Shares] [ ]%
[ Shares] [ ]%
Shareholder Proposals
Shareholder Proposals for Inclusion in the Fund's Proxy Statement. To be
considered for presentation at the Annual Meeting of Shareholders of the Fund to
be held in 2012 and included in the Fund's proxy statement relating to such
meeting, a shareholder proposal submitted pursuant to Rule 14a-8 under the 1934
Act must be received at the offices of the Fund at 120 East Liberty Drive, Suite
400, Wheaton, Illinois 60187, not later than December 1, 2011. Such a proposal
will be included in the Fund's proxy statement if it meets the requirements of
Rule 14a-8. Timely submission of a proposal does not mean that such proposal
will be included in the Fund's proxy statement.
Other Shareholder Proposals. Under the Fund's By-Laws, any 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. 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 to and received
at the principal executive offices of the Fund not less than forty-five (45)
days nor more than sixty (60) days prior to the first anniversary date of the
date of the proxy statement released to shareholders for the preceding year's
annual meeting. However, if and only if the annual meeting is not scheduled to
be held within a period that commences thirty (30) days before the first
anniversary date of the annual meeting for the preceding year and ends thirty
(30) days after such anniversary date (an annual meeting date outside such
period being referred to herein as an "Other Annual Meeting Date"), such
Shareholder Notice must be given as described above by the later of the close of
business on (i) the date forty-five (45) days prior to such Other Annual Meeting
Date or (ii) the tenth (10th) business day following the date such Other Annual
Meeting Date is first publicly announced or disclosed. Shareholder Notices
should be sent to the Fund at 120 East Liberty Drive, Suite 400, Wheaton,
Illinois 60187, Attention: W. Scott Jardine, Secretary.
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
- 14 -
submission of a proposal does not mean that such proposal will be brought before
the meeting.
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.
Fiscal Year
The fiscal year end for the Fund is October 31.
Delivery of Certain Documents
Annual reports will be sent to shareholders of record of the Fund. 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 directed to the Fund at 120 East Liberty Drive, Suite 400, Wheaton,
Illinois 60187 or by calling (800) 988-5891.
Please note that only one annual or semi-annual report, proxy statement or
Notice of Availability of Proxy Materials, as applicable, 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, proxy statement or Notice of Availability of Proxy
Materials, as applicable, or for instructions as to how to request a separate
copy of such documents or as to how to request a single copy if multiple copies
of such documents are received, shareholders should contact the Fund at the
address and phone number set forth above. Pursuant to a request, a separate copy
will be delivered promptly.
- 15 -
OTHER MATTERS TO COME BEFORE THE MEETING
No business other than the matter described above is expected to
come before the Meeting, but should any other matter requiring a vote of
shareholders arise, including any question as to an adjournment or
postponement of the Meeting, the persons named on the enclosed proxy card
will vote thereon according to their best judgment in the interests of
the Fund.
_____________, 2011
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS ARE
THEREFORE URGED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD AS SOON
AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE OR ALTERNATIVELY, TO
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 MEETING
OR HOW TO VOTE YOUR SHARES, PLEASE CALL THE FUND'S PROXY SOLICITOR, THE
ALTMAN GROUP, INC., AT [ ] WEEKDAYS FROM 9:00 A.M. TO 10:00 P.M. EASTERN TIME.
--------------------------------------------------------------------------------
- 16 -
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APPENDIX A
FORM OF NEW INVESTMENT SUB-ADVISORY AGREEMENT
Agreement made as of this [ ] day of [ ] by and among First Trust Mortgage
Income Fund (formerly known as First Trust/FIDAC Mortgage Income Fund), a
Massachusetts business trust (the "Fund"), First Trust Advisors L.P., an
Illinois limited partnership (the "Manager") and an investment adviser
registered with the Securities and Exchange Commission ("SEC"), and Brookfield
Investment Management Inc., a Delaware corporation and an investment adviser
registered 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 (as such agreement may be modified from time to time, the
"Management Agreement");
Whereas, the Management Agreement provides that the Manager may, subject
to the initial and periodic approvals required under Section 15 of the 1940 Act,
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 for the Fund's investment portfolio, upon
the terms and conditions hereafter set forth;
Now, Therefore, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Appointment. The Fund and the Manager hereby appoint the Sub-Adviser to
provide certain sub-investment advisory services to the Fund 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.
2. Services to Be Performed. Subject always to the supervision of the
Fund's Board of Trustees 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, furnish an investment program in respect
of, make investment decisions for, and place all orders for the purchase and
sale of securities for the Fund's investment portfolio, all on behalf of the
Fund and as described in the Fund's most recent registration statement on Form
N-2 as declared effective by the SEC, and as the same may be amended from time
to time. In the performance of its duties, the Sub-Adviser will in all material
respects (a) satisfy any applicable fiduciary duties it may have to the Fund,
(b) monitor the Fund's investments (provided that except for the compliance
responsibilities of the Sub-Adviser with respect to the portfolio services
described in the first sentence of this Section 2, the Manager shall remain
responsible for the oversight of compliance with the Fund's policies and
procedures and its Prospectus and Statement of Additional Information), (c)
comply with the provisions of the Fund's Declaration of Trust and By-laws, as
A-1
amended from time to time and communicated by the Fund or the Manager to the
Sub-Adviser in writing, and the stated investment objectives, policies and
restrictions of the Fund as such objectives, policies and restrictions may
subsequently be changed by the Fund's Board of Trustees and communicated by the
Fund or the Manager to the Sub-Adviser in writing, and (d) assist in the
valuation of portfolio securities held by the Fund as requested by the Manager
or the Fund; provided that prices derived from third parties are the
responsibility of such third parties and do not reflect the professional opinion
of the Sub-Adviser, and information provided by the Sub-Adviser that may be used
to determine "fair value" prices are solely the reflection of the Sub-Adviser's
professional opinion and the Fund and the Manager are free to accept or reject
this information; the Sub-Adviser is not solely responsible for the pricing of
the Fund's securities. The Fund or the Manager has provided 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
objectives, policies or limitations not appearing therein as they may be
relevant to the Sub-Adviser's performance under this Agreement.
The Sub-Adviser is authorized to select the brokers or dealers that will
execute the purchases and sales of portfolio investments for the Fund, and is
directed to use its commercially reasonable efforts to obtain best execution,
which includes most favorable net results and execution of the Fund's orders,
taking into account all appropriate factors, including price, dealer spread or
commission, size and difficulty of the transaction and research or other
services provided. The Sub-Adviser is authorized to enter into repurchase
agreements on behalf of the Fund, subject to any applicable policies and
procedures adopted by the Board of Trustees for the Fund. 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 to the extent permitted by and
in conformance with applicable law (including Rule 17e-1 of the 1940 Act), the
Sub-Adviser may select brokers or dealers affiliated with the Sub-Adviser. It is
understood that the Sub-Adviser will not be deemed to have acted unlawfully, or
to have breached a fiduciary duty to the Fund, or be in breach of any obligation
owing to the Fund under this Agreement, or otherwise, solely by reason of its
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 brokerage or research services
provided by such member, broker or dealer, viewed in terms of that particular
transaction or the Sub-Adviser's overall responsibilities with respect to its
accounts, including the Fund, as to which it exercises investment discretion.
In addition, the Sub-Adviser may, to the extent permitted by applicable
law, aggregate purchase and sale orders of securities placed with respect to the
assets of the Fund with similar orders being made simultaneously for other
accounts managed by the Sub-Adviser or its affiliates, if in the Sub-Adviser's
reasonable judgment such aggregation shall result in an overall economic benefit
to the Fund, taking into consideration the selling or purchase price, brokerage
commissions and other expenses. 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 securities 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 the price or size of the securities positions obtainable or
salable, and neither the Fund nor the Manager shall object to any such fair and
equitable allocation. 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
A-2
may result in a delay in one or more client accounts being fully invested that
would not occur if such an allocation were not made. Moreover, it is possible
that due to differing investment objectives or for other reasons, the
Sub-Adviser and its affiliates may purchase securities of an issuer for one
client and at approximately the same time recommend selling or sell the same or
similar types of securities for another client.
Unless the Fund's Board of Trustees determines otherwise, the Sub-Adviser
will vote all proxies solicited by or with respect to the issuers of securities
which assets of the Fund's investment portfolio allocated by the Manager to the
Sub-Adviser are invested, consistent with the Sub-Adviser's written Proxy Voting
Policies and Procedures. The Sub-Adviser will maintain appropriate records in
accordance with applicable law detailing its voting of proxies on behalf of the
Fund and upon request will provide a report setting forth the proposals voted on
and how the Fund's shares were voted, including the name of the corresponding
issuers.
The Sub-Adviser will not arrange purchases or sales of securities between
the Fund and other accounts advised by the Sub-Adviser or its affiliates unless
(a) such purchases or sales are in accordance with applicable law (including
Rule 17a-7 under the 1940 Act) and the Fund's policies and procedures, (b) the
Sub-Adviser reasonably believes 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. However, no such policy or procedure shall be
binding on the Sub-Adviser unless it is communicated to the Sub-Adviser in
writing.
The Sub-Adviser will communicate to the officers and Trustees of the Fund
such information relating to transactions for the Fund as they may reasonably
request. In no instance will the Fund's portfolio securities be knowingly
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.
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 accounts for which it
has investment responsibilities under the Investment Advisers Act of 1940;
(b) will (i) conform in all material respects to all applicable rules
and regulations of the SEC, (ii) comply in all material respects with all
policies and procedures adopted by the Board 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 activities;
(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
A-3
Fund, including, without limitation, review of the general investment
strategies of the Fund, the performance of the Fund's investment portfolio
in relation to relevant standard industry indices and general conditions
affecting the marketplace and will provide various other reports from time
to time as reasonably requested by the Manager or the Board of Trustees of
the Fund; and
(d) will prepare and maintain such books and records with respect to
the Fund's securities and other transactions for the Fund's investment
portfolio as required for registered investment advisers under applicable
law or as otherwise reasonably agreed to by the parties 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. 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 of the Investment
Advisers Act of 1940 or other applicable law.
3. Expenses. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities and other assets (including
brokerage commissions, transfer fees, registration costs, taxes and other
similar costs and transaction-related expenses and fees arising out of
transactions for the Fund, if any) purchased for the Fund. Moreover, the
Sub-Adviser shall not be responsible for payment of any taxes due on capital or
income held or collected for the Fund.
4. Additional Sub-Advisers. Subject to obtaining the initial and periodic
approvals required under Section 15 of the 1940 Act 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.
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 Preferred Shares (as such
term is defined in the Fund's prospectus), if any, and the principal amount of
borrowings), minus the sum of the Fund's accrued and unpaid dividends on any
outstanding Preferred Shares and accrued liabilities (other than the principal
amount of any borrowings incurred, commercial paper or notes issued by the Fund
and the liquidation preference of any outstanding Preferred Shares of the Fund).
The Management Fee shall accrue on each calendar day and 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.
A-4
6. Custodian. The assets subject to this Agreement shall be held by the
Custodian of the Fund ("Custodian") or by a central depository selected by the
Custodian. In no event shall the Sub-Adviser have the power or authority to take
custody or possession of any assets of the Fund. The Sub-Adviser is authorized
to give instructions to the current or any successor Custodian with respect to
all investment decisions regarding such assets. The Sub-Adviser will promptly
notify the Custodian of all securities transactions for the Fund and will
cooperate with the Custodian in supplying all reasonable information required by
the Custodian. All transactions will be consummated by payment or delivery to
the Custodian of all cash or securities due to or from the Fund. In the event
that any cash or securities are delivered to the Sub-Adviser, the Sub-Adviser
will promptly deliver the same over to the Custodian. The Sub-Adviser will
instruct all brokers executing orders on behalf of the Fund to forward to the
Custodian copies of all brokerage confirmations promptly after execution of each
transaction. The Fund will not change the Custodian without giving the
Sub-Adviser reasonable prior notice of its intention to do so together with the
name of, and other relevant information with respect to, the new Custodian.
7. 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 as set forth in the Sub-Adviser's Form
ADV, Part 2. In addition, the Fund and the Manager acknowledge that the persons
employed by the Sub-Adviser to assist in the Sub-Adviser's duties under this
Agreement will not devote their full time to such efforts. It is also agreed
that the Sub-Adviser may use any supplemental research obtained for the benefit
of the Fund in providing investment advice to its other investment advisory
accounts and for managing its own accounts.
8. Representations and Warranties.
(i) Each of the Fund, the Manager and the Sub-Adviser represent and
warrant with respect to itself as follows:
(a) This Agreement has been duly authorized, executed and
delivered by such party and constitutes its valid and binding
obligation, enforceable in accordance with its terms;
(b) No governmental authorizations, approvals or consents
are required in connection with the execution, delivery or
performance of this Agreement by such party;
(c) To the best of such party's knowledge, there is
neither pending nor threatened in writing any action, suit,
proceeding or investigation before or by any court or
governmental, regulatory, self-regulatory, arbitration or
exchange body related to the Fund to which the Manager, the
Sub-Adviser and/or the Fund is a party or to which any of its
assets are subject; and
(d) The foregoing representations and warranties (other
than the representation and warranty in clause (b) above) shall
be continuing, and if any of them shall cease to be true and
accurate in any material respect, such party shall immediately
give notice of such to the other parties to this Agreement.
(ii) Each of the Manager and the Sub-Adviser represents and warrants to
each other that such party is registered with the SEC under the Investment
Advisers Act of 1940, as amended, as an "investment adviser".
A-5
9. Limitation of Liability. The Sub-Adviser shall not be liable for, and
the Fund and the Manager will not take any action against the Sub-Adviser to
hold the Sub-Adviser liable for, any error of judgment or mistake of law or for
any loss suffered by the Fund or the Manager (including, without limitation, by
reason of the purchase, sale or retention of any security) in connection with
the performance of the Sub-Adviser's duties under this Agreement, except 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 its reckless disregard of its obligations and duties under this
Agreement.
10. Term; Termination. This Agreement shall become effective on the date
provided above (the "Effective Date") provided that it has been approved in the
manner required by the 1940 Act, and shall remain in full force until December
6, 2012 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;
provided, however, that if the continuation of this Agreement is not approved
for the Fund, the Sub-Adviser may continue to serve in such capacity for the
Fund in the manner and to the extent permitted by the 1940 Act and the rules and
regulations thereunder.
This Agreement shall 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 of the Fund 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 of the Fund 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 promulgated thereunder.
Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of the compensation
described in Section 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.
11. 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 Manager. In addition, the Sub-Adviser will,
from time to time, provide a written assessment of its compliance program in
conformity with current industry standards that is reasonably acceptable to the
Fund to enable the Fund, the Board of Trustees and the Fund's Chief Compliance
Officer to fulfill their obligations under Rule 38a-1 under the 1940 Act.
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
A-6
address as such party may designate in writing for receipt of such notice.
If to the Manager or the Fund: If to the Sub-Adviser:
First Trust Mortgage Income Fund Brookfield Investment Management Inc.
First Trust Advisors L.P. Three World Financial Center
120 E. Liberty Drive, Suite 400 200 Vesey Street, 10th Floor
Wheaton, Illinois 60187 New York, New York 10281-1010
Attention: Secretary Attention: General Counsel
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, 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, without regard to its conflict of laws
principles.
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 its obligations
under 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. Entire Agreement. This Agreement constitutes the sole and entire
agreement of the parties hereto with respect to the subject matter expressly set
forth herein.
A-7
IN WITNESS WHEREOF, the Fund, the Manager and the Sub-Adviser each have
caused this Agreement to be executed as of the day and year first above written.
First Trust Advisors L.P. Brookfield Investment Management Inc.
By _____________________________ By _________________________________
Title: _________________________ Title: _____________________________
First Trust Mortgage Income Fund
By _____________________________
Title: _________________________
A-8
FORM OF PROXY CARD
------------------
FIRST TRUST MORTGAGE INCOME FUND
(FORMERLY KNOWN AS FIRST TRUST/FIDAC MORTGAGE INCOME FUND)
Proxy Card for the Special Meeting of Shareholders - July ___, 2011
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned holder of Common Shares of First Trust Mortgage Income Fund
(formerly known as First Trust/FIDAC Mortgage Income Fund), a Massachusetts
business trust (the "Fund"), hereby appoints W. Scott Jardine, Mark R. Bradley,
Kristi A. Maher, James M. Dykas and Erin E. Chapman as attorneys and proxies for
the undersigned, with full powers of substitution and revocation, to represent
the undersigned and to vote on behalf of the undersigned all shares of the Fund
that the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Fund (the "Meeting") to be held at the offices of First Trust Advisors
L.P., 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, at 4:00 p.m.
Central time on the date indicated above, and any adjournments or postponements
thereof. The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Shareholders and Proxy Statement dated ____, 2011, 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 adjournment or
postponement 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, WHEN 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 PROPOSAL SET FORTH.
PLEASE VOTE, DATE AND SIGN ON REVERSE
SIDE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
PLEASE FOLD HERE AND RETURN PROXY CARD - DO NOT DETACH
--------------------------------------------------------------------------------
[PICTURE OMITTED] BY INTERNET
To vote on the Internet, go to [ ] and enter the 12-digit
control number found on the reverse side of this Proxy
Card. Follow the instructions provided.
[PICTURE OMITTED] BY TELEPHONE
To cast your vote by phone with a proxy voting
representative, call toll-free [ ] and provide the
representative the control number found on the reverse
side of this Proxy Card. Representatives are available to
take your voting instructions Monday through Friday 9:00
a.m. to 10:00 p.m. Eastern Time.
[PICTURE OMITTED] BY MAIL
To vote by mail, mark the appropriate voting boxes on the
reverse side of this Proxy Card, sign and date the Proxy
Card and return it in the enclosed postage-paid envelope
or mail to: [ ].
PLEASE VOTE, SIGN AND DATE ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
FIRST TRUST MORTGAGE INCOME FUND
CONTROL NUMBER
-------------------------
-------------------------
PLEASE CAST YOUR VOTE PROMPTLY. EVERY SHAREHOLDER'S VOTE IS IMPORTANT.
THE PROXY CARD MUST BE SIGNED AND DATED FOR YOUR INSTRUCTIONS TO BE COUNTED AND
WILL BE VOTED IN THE MANNER INDICATED. IF NO INSTRUCTIONS HAVE BEEN INDICATED
BELOW, A VOTE WILL BE CAST "FOR" THE PROPOSAL. PLEASE COMPLETE AND RETURN THIS
PROXY CARD PROMPTLY.
TO VOTE, MARK A BOX BELOW IN BLUE OR BLACK INK AS FOLLOWS. EXAMPLE: [ ]
PROPOSAL - The Board of Trustees recommends a vote FOR the Proposal to approve
a new Investment Sub-Advisory Agreement with
Brookfield Investment Management Inc. for the Fund.
FOR AGAINST ABSTAIN
Approval of New Investment Sub-Advisory Agreement [_] [_] [_]
Please be sure to sign and date this Proxy Card. Please sign
exactly as your name(s) appear(s) on this Proxy Card. When
shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee, or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by an authorized officer.
If a partnership, please sign in partnership name by an
authorized person.
__________________________________________________________
Shareholder sign here
__________________________________________________________
Joint owner sign here
__________________________________________________________
Date:
NON-VOTING ITEMS
MEETING ATTENDANCE - Mark the box to the right if you plan to attend the
Special Meeting [_]
----------------------------------------------------
CHANGE OF ADDRESS - Please print new address below.
----------------------------------------------------
----------------------------------------------------
COMMENTS - Please print your comments below.
----------------------------------------------------
(BARCODE HERE) (TAGID HERE) (CUSIP HERE)
COVER
2
filename2.txt
CHAPMAN AND CUTLER LLP 111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
May 12, 2011
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: First Trust Mortgage Income Fund (the "Fund")
To the Commission:
On behalf of the above Fund, electronically transmitted herewith pursuant
to Rule 14a-6 under the Securities Exchange Act of 1934 are the preliminary
proxy statement, form of proxy and other soliciting materials for the Fund. It
is intended that the proxy materials will be mailed to shareholders of the Fund
on or about May 23, 2011. Please call the undersigned at (312) 845-3446
(fax (312) 701-2361) with any questions or comments regarding this filing.
Very truly yours,
CHAPMAN AND CUTLER LLP
By /s/ Suzanne M. Russell
-----------------------------
Suzanne M. Russell