SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box:
|X| Preliminary proxy statement
|_| Definitive proxy statement
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
First Financial Fund, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Not Applicable
- --------------------------------------------------------------------------------
(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-(i)(4)
and 0-11.
|_| 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.
<PAGE>
FIRST FINANCIAL FUND, INC.
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
---------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------------
AUGUST 23, 1999
To our Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Annual
Meeting") of First Financial Fund, Inc. ("Fund") will be held on August 23, 1999
at 4:00 p.m., at the Plaza Building, 751 Broad Street, 20th Floor, Newark, New
Jersey 07102 for the following purposes:
(1) To elect one director to serve until 2002;
(2) To approve changes to certain fundamental investment restrictions of
the Fund and to amend the Bylaws of the Fund;
(3) To ratify the selection of PricewaterhouseCoopers LLP as independent
public accountants of the Fund for the fiscal year ending March 31,
2000; and
(4) To consider and act upon any other business as may properly come
before the Annual Meeting or any adjournment thereof.
Only holders of common stock of record at the close of business on June 11,
1999 are entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof.
By order of the Board of Directors,
/s/ ARTHUR J. BROWN
-------------------
ARTHUR J. BROWN
SECRETARY
Dated: June 25, 1999
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT - PLEASE RETURN YOUR PROXY CARD PROMPTLY
STOCKHOLDERS ARE INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. ANY
STOCKHOLDER WHO DOES NOT EXPECT TO ATTEND THE ANNUAL MEETING IS URGED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED FORM OF PROXY, DATE AND SIGN IT,
AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE
UNITED STATES. IN ORDER TO AVOID THE ADDITIONAL EXPENSE TO THE FUND OF FURTHER
SOLICITATION, WE ASK YOUR COOPERATION IN MAILING YOUR PROXY PROMPTLY, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
- --------------------------------------------------------------------------------
<PAGE>
FIRST FINANCIAL FUND, INC.
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
----------
PROXY STATEMENT
----------
ANNUAL MEETING OF STOCKHOLDERS
AUGUST 23, 1999
INTRODUCTION
This Proxy Statement is furnished to the stockholders of First Financial
Fund, Inc. ("Fund") by the Board of Directors of the Fund in connection with the
solicitation of stockholder votes by proxy ("Proxies") to be voted at the Annual
Meeting of Stockholders ("Meeting") to be held on August 23, 1999 at 4:00 p.m.
at the Plaza Building, 751 Broad Street, Newark, New Jersey 07102. The matters
to be acted upon at the Meeting are set forth in the accompanying Notice of
Annual Meeting.
If the enclosed form of Proxy is executed properly and returned, shares
represented by it will be voted at the Meeting in accordance with the
instructions on the Proxy. A Proxy may nevertheless be revoked at any time prior
to its use by written notification received by the Fund, by the execution of a
later dated Proxy or by attending the Meeting and voting in person. However, if
no instructions are specified on a Proxy, shares will be voted FOR the election
of the nominee for director and FOR the other proposals.
The close of business on June 11, 1999 has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
Meeting. On that date, the Fund had _____________ shares of common stock
outstanding and entitled to vote. Each share will be entitled to one vote at the
Meeting. It is expected that the Notice of Annual Meeting, Proxy Statement and
form of Proxy first will be mailed to stockholders on or about July 1, 1999.
The solicitation is made primarily by the mailing of this Proxy Statement
and the accompanying Proxy. Supplementary solicitations may be made, without
cost to the Fund, by mail, telephone, telegraph or in person by regular
employees of Prudential Investments Fund Management LLC, the Fund's
Administrator ("Administrator") or the Administrator's affiliate, Prudential
Securities Incorporated ("Prudential Securities"). All expenses in connection
with preparing this Proxy Statement and its enclosures, and additional
solicitation expenses including reimbursement of brokerage firms and others for
their expenses in forwarding proxy solicitation material to the beneficial
owners of shares, will be borne by the Fund. The presence at the Meeting, in
person or by proxy, of stockholders entitled to cast a majority of the shares
outstanding is required for a quorum. In the event that a quorum is present at
the Meeting but sufficient votes to approve one or more of the proposed items
are not received, the persons named as proxies may propose one or more
adjournments of such Meeting to permit further solicitation of Proxies with
respect to those items. Any such adjournments will require the affirmative vote
of a majority of those shares present at the Meeting or represented by proxy. In
such case, the persons named as proxies will vote those Proxies which they are
entitled to vote for any such item in favor of such an adjournment, and will
vote those Proxies required to be voted against any such item against any such
adjournment. A stockholder vote may be taken on one or more of the items in this
Proxy Statement prior to any such adjournment if sufficient votes have been
received and it is otherwise appropriate.
1
<PAGE>
Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and with respect to which the broker does not
have discretionary voting authority. Abstentions and broker non-votes will not
be counted as votes cast for purposes of determining whether sufficient votes
have been received to approve a proposal. Abstentions and broker non-votes will
be counted as shares present for purposes of determining whether a quorum is
present but will not be voted for or against any adjournment. Accordingly,
abstentions and broker non-votes effectively will be a vote against adjournment
or against any proposal where the required vote is a percentage of the shares
present.
[Management does not know of any person or group who owned beneficially 5%
or more of the Fund's outstanding common stock on the record date.]
ELECTION OF DIRECTORS
PROPOSAL NO. 1
The Board of Directors is divided into three classes with each class
serving for a term of three years and until their successors are elected and
qualified. The Class I director, Mr. Dorsey, has a term expiring in 1999. The
classification of the Fund's directors helps to promote the continuity and
stability of the Fund's management and policies because the majority of the
directors at any given time will have prior experience as directors of the Fund.
At least two stockholder meetings, instead of one, are required to effect a
change in a majority of the directors, except in the event of vacancies
resulting from removal for cause or other reasons, in which case the remaining
directors may fill the vacancies so created.
Accordingly, at the Meeting, one director will be elected to serve until
the Fund's 2002 annual meeting of stockholders and until his successor is
elected and qualified. It is the intention of the persons named in the enclosed
form of Proxy to vote in favor of the election of Mr. Dorsey as nominee for
director. The Board of Directors has no reason to believe that the nominee will
become unavailable for election as a director, but if that should occur before
the Meeting, the Proxies will be voted for such other nominee as the Board of
Directors may recommend.
None of the directors is related to one another. The following tables set
forth certain information regarding each of the directors of the Fund. Unless
otherwise noted, each of the directors has engaged in the principal occupation
listed in the following table for five years or more.
2
<PAGE>
INFORMATION REGARDING NOMINEE
FOR ELECTION AT 1999 ANNUAL MEETING
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
NAME, AGE, BUSINESS EXPERIENCE OWNED ON
DURING THE PAST FIVE YEARS AND OTHER DIRECTORSHIPS POSITION WITH THE FUND JUNE 11, 1999(A)
-------------------------------------------------- ---------------------- -----------------
<S> <C> <C>
CLASS I (TERM EXPIRING IN 2002, IF ELECTED)
+Eugene C. Dorsey (72), Retired President, Chief Executive Officer and Trustee, Director 633
Gannett Foundation (now Freedom Forum); former publisher, four Gannett
newspapers and Vice President of Gannett Co. Inc.; past Chairman, Independent
Sector, Washington, D.C. (largest national coalition of philanthropic
organizations); Former Director, Advisory Board of Chase Manhattan Bank of
Rochester; Director, Global Utility Fund, Inc., The High Yield Plus Fund,
Inc., Prudential Diversified Bond Fund, Inc., Prudential Government Income
Fund, Inc., Prudential High Yield Fund, Inc., Prudential High Yield Total
Return Fund, Inc., Prudential Mortgage Income Fund, Inc., Prudential
Municipal Series Fund, Inc., Prudential National Municipals Fund, Inc.,
Prudential Structured Maturity Fund, Inc.; Trustee, The Target Portfolio
Trust, Prudential Municipal Bond Fund, Prudential Diversified Funds,
Prudential Government Securities Trust, Prudential California Municipal Fund.
</TABLE>
INFORMATION REGARDING DIRECTORS
WHOSE CURRENT TERMS CONTINUE
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
NAME, AGE, BUSINESS EXPERIENCE OWNED ON
DURING THE PAST FIVE YEARS AND OTHER DIRECTORSHIPS POSITION WITH THE FUND JUNE 11, 1999(A)
-------------------------------------------------- ---------------------- -----------------
<S> <C> <C>
CLASS II (TERM EXPIRING IN 2000)
*Thomas T. Mooney (57), President of the Greater Rochester Metro Chamber of President, 3,233
Commerce; former Rochester City Manager; Trustee of Center for Governmental Treasurer and
Research, Inc.; Director of Blue Cross of Rochester, The Business Council of Director
New York State, Executive Service Corps of Rochester, Monroe County Water
Authority, Monroe County Industrial Development Corporation, Northeast
Midwest Institute, Rochester Jobs, Inc., Global Utility Fund, Inc.,
Prudential Distressed Securities Fund, Inc., Prudential Diversified Bond
Fund, Inc., Prudential Emerging Growth Fund, Inc. Prudential Equity Fund,
Inc., Prudential Global Limited Maturity Fund, Inc., Prudential Government
Income Fund, Inc., Prudential High Yield Fund, Inc., Prudential High Yield
Total Return Fund, Inc., Prudential Intermediate Global Income Fund, Inc.,
Prudential International Bond Fund, Inc., The Prudential Investment
Portfolios, Inc., Prudential Mortgage Income Fund, Inc., Prudential Municipal
Bond Fund, Inc.,
</TABLE>
3
<PAGE>
NAME, AGE, BUSINESS EXPERIENCE
DURING THE PAST FIVE YEARS AND OTHER DIRECTORSHIPS
--------------------------------------------------
CLASS II (TERM EXPIRING IN 2000) (CONTINUED)
Prudential National Municipals Fund, Inc., Prudential
Small-Cap Quantum Fund, Inc., Prudential Small Company Value Fund, Inc.,
Prudential Structured Maturity Fund, Inc., Prudential Utility Fund, Inc., The
Global Total Return Fund, Inc., The High Yield Income Fund, Inc.; President,
Director and Treasurer of The High Yield Plus Fund, Inc.; Trustee of
Prudential 20/20 Focus Fund, Prudential Balanced Fund, Prudential California
Municipal Fund, Prudential Diversified Funds, Prudential Equity Income Fund,
Prudential Government Securities Trust, Prudential Index Series Fund,
Prudential Mid-Cap Value Fund, Prudential Municipal Series Fund, Prudential
Real Estate Securities Fund, Prudential Tax-Managed Equity Fund and The
Target Portfolio Trust.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
NAME, AGE, BUSINESS EXPERIENCE OWNED ON
DURING THE PAST FIVE YEARS AND OTHER DIRECTORSHIPS POSITION WITH THE FUND JUNE 11, 1999(A)
-------------------------------------------------- ---------------------- -----------------
<S> <C> <C>
CLASS III (TERM EXPIRING IN 2001)
Douglas H. McCorkindale (60), Vice Chairman (since March 1984) and President Director 0
(since September 1997) of Gannett Co., Inc.; Director of Continental
Airlines, Inc., Gannett Co., Inc., Frontier Corporation, The High Yield Plus
Fund, Inc., Global Utility Fund, Inc., Prudential Distressed Securities Fund,
Inc., Prudential Emerging Growth Fund, Inc., Prudential Equity Fund, Inc.,
Prudential Global Limited Maturity Fund, Inc., Prudential Intermediate Global
Income Fund, Inc., Prudential International Bond Fund, Inc., The Prudential
Investment Portfolios, Inc., Prudential Small-Cap Quantum Fund, Inc.,
Prudential Small Company Value Fund, Inc., Prudential Utility Fund, Inc., The
Global Total Return Fund, Inc.; Trustee of Prudential 20/20 Focus Fund,
Prudential Balanced Fund, Prudential Equity Income Fund, Prudential
Diversified Funds, Prudential Index Series Fund, Prudential Mid-Cap Value
Fund, Prudential Real Estate Securities Fund, Prudential Tax- Managed Equity
Fund, and The Target Portfolio Trust.
</TABLE>
- ---------------------
+ It is anticipated that Mr. Dorsey will retire as a Director of the Fund
effective December 31, 1999. The remaining Directors will appoint a new
Director to replace Mr. Dorsey until his term expires.
* Indicates "interested person" of the Fund as defined in the Investment
Company Act of 1940, as amended ("1940 Act"). Mr. Mooney is deemed to be an
"interested person" by reason of his service as an officer of the Fund.
(A) For this purpose, "beneficial ownership" is defined in the regulations
under Section 13(d) of the Securities Exchange Act of 1934, as amended
("1934 Act"). The information is based on statements furnished by the
Administrator and the nominee.
The directors and officers of the Fund as a group (four persons) owned
beneficially less than 1% of the outstanding shares of the Fund as of June 11,
1999. This includes shares shown with respect to current directors in the tables
above.
4
<PAGE>
Under Section 16(a) of the 1934 Act, Section 30(f) of the 1940 Act and
Securities and Exchange Commission ("SEC") regulations thereunder, the Fund's
officers and directors, persons owning more than 10% of the Fund's common stock
and certain officers and partners of Wellington Management Company, LLP, the
Fund's investment adviser ("Investment Adviser"), are required to report their
transactions in the Fund's common stock to the SEC, New York Stock Exchange and
the Fund. Based solely on the Fund's review of the copies of such reports
received by it, the Fund believes that, during its fiscal year ended March 31,
1999, all filing requirements applicable to such persons were complied with.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS.
The Board of Directors met four times during the Fund's fiscal year ended
March 31, 1999, and each director during the time he served attended at least
75% of the total number of meetings of the Board and of any committee of which
he was a member. The Board of Directors has an Audit Committee currently
composed of Messrs. Dorsey, McCorkindale, and Mooney. Mr. Mooney is deemed to be
an "interested person" of the Fund because he is an officer of the Fund. The
Audit Committee also reviews with the independent public accountants the plan
and results of the audit engagement and matters having a material effect upon
the Fund's financial operations. The Audit Committee met twice during the fiscal
year ended March 31, 1999. The Board of Directors does not have a standing
nominating or compensation committee.
EXECUTIVE OFFICERS OF THE FUND.
The officers of the Fund, other than as shown above who also serve as
directors, are:
Arthur J. Brown (age 50)--Secretary; Partner, Kirkpatrick & Lockhart LLP
(law firm), Kirkpatrick & Lockhart serves as counsel to the Fund and to the
Investment Adviser on certain matters.
Mr. Brown has held office since May 1, 1986. The officers of the Fund are
elected annually by the Board of Directors at its next meeting following the
annual meeting of stockholders.
COMPENSATION OF DIRECTORS.
The table below includes certain information relating to the compensation
of the Fund's directors paid by the Fund for the fiscal year ended March 31,
1999 as well as information regarding compensation from the "Fund Complex," as
defined below, for the calendar year ended December 31, 1998. No additional
compensation is paid to Board members for serving on committees or for attending
meetings. Board members are reimbursed for any expenses incurred in attending
meetings and for other incidental expenses. Annual Board fees may be reviewed
periodically and changed by each Fund's Board.
5
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
COMPENSATION TABLE
- --------------------------------------------------------------------------------------------------------------
Pension or Total
Retirement Compensation
Benefits Estimated From the
Accrued as Annual Fund and
Aggregate Part of the Benefits the Fund
Compensation Fund's Upon Complex Paid
Name of Director From the Fund Expenses Retirement to Directors
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
Eugene C. Dorsey+ $5,500 N/A N/A $23,750 (4)*
- --------------------------------------------------------------------------------------------------------------
Douglas H. McCorkindale $5,500 N/A N/A $23,750 (4)*
- --------------------------------------------------------------------------------------------------------------
Thomas T. Mooney $5,500 N/A N/A $23,750 (4)*
- --------------------------------------------------------------------------------------------------------------
</TABLE>
* Parenthetical indicates number of funds (including the Fund) in the Fund
Complex, comprised of four investment companies, to which aggregate
compensation relates.
+ All compensation from the Fund and Fund Complex for the calendar year ended
December 31, 1998 represents deferred compensation. Mr. Dorsey received
aggregate compensation for that period from the Fund and the Fund Complex,
including accrued interest, in the amounts of approximately $6,393 and
$28,124, respectively.
Directors must be elected by a vote of the holders of a majority of the
shares present at the Meeting in person or by proxy and entitled to vote
thereon.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 1.
APPROVAL OF CHANGES TO CERTAIN FUNDAMENTAL
INVESTMENT RESTRICTIONS OF THE FUND AND
AMENDMENT OF THE BYLAWS OF THE FUND
PROPOSAL NO. 2
Changes are proposed to the fundamental investment restrictions
("fundamental restrictions") of the Fund. Pursuant to the 1940 Act, the Fund has
adopted certain fundamental restrictions, which may be changed only with
shareholder approval. Restrictions and policies that the Fund has not
specifically designated as being fundamental are considered to be
"non-fundamental" and may be changed by the Fund's Board of Directors without
shareholder approval.
Several of the current fundamental restrictions of the Fund reflect
regulatory, business or industry conditions, practices or requirements that are
no longer in effect. These restrictions have been in effect, in most cases,
since the Fund was organized in 1988.
Accordingly, the Board now has approved revisions to the Fund's fundamental
restrictions in order to simplify, modernize and make more uniform those
restrictions that are required to be fundamental. In several instances, existing
fundamental restrictions that are eliminated because they are not required to be
fundamental would be re-classified as non-fundamental restrictions. However,
non-fundamental restrictions may be changed by the Board without shareholder
approval.
The Board believes that by reducing to a minimum those restrictions that
can be changed only by shareholder vote, the Fund will be able to avoid the
costs and delays associated with a shareholder meeting if the Board decides to
make future changes to its investment policies. Although the proposed changes in
fundamental restrictions will allow the Fund greater investment flexibility to
respond to future investment opportunities, the Board does not anticipate that
the changes, individually or in the aggregate, will result at this time in a
material change in the level of investment risk associated with an investment in
the Fund or the manner in which the Fund is managed.
6
<PAGE>
PROPOSED CHANGES. The following is the text and a summary description of
the proposed changes to the Fund's fundamental restrictions, together with the
text of those non-fundamental restrictions that would be adopted in connection
with the elimination of certain of the Fund's current fundamental restrictions.
The text below also describes those fundamental restrictions that are being
eliminated for which no corresponding non-fundamental restrictions are being
proposed. Any non-fundamental restriction may be modified or eliminated by the
Board at any future date without any further approval of shareholders.
Shareholders should note that certain of the fundamental restrictions that are
treated separately below currently are combined within a single existing
fundamental restriction. Moreover, the Article of the By-Laws of the Fund that
contains these restrictions would be eliminated. This would also modernize those
By-Laws, which are no longer required to reflect the Fund's investment
restrictions.
With respect to each proposed fundamental or non-fundamental restriction,
if a percentage restriction is adhered to at the time of an investment or
transaction, a later increase or decrease in percentage resulting from a change
in the values of the Fund's portfolio securities or the amount of its total
assets will not be considered a violation of the restriction.
A. MODIFICATION OF FUNDAMENTAL RESTRICTION ON CONCENTRATION
PROPOSED CHANGE: Upon approval of Proposal 2, the existing fundamental
restriction on concentration would be modified as follows:
"The Fund will not purchase any security if, as a result of that purchase,
25% or more of the Fund's total assets would be invested in securities of
issuers having their principal business activities in the same industry, other
than savings, banking and mortgage banking industries, except for temporary
defensive purposes, and except that this limitation does not apply to securities
issued or guaranteed by the U.S. government, its agencies or instrumentalities."
DISCUSSION: The proposed changes to the Fund's fundamental restriction on
concentration would make minor changes in wording from the existing fundamental
restriction.
B. MODIFICATION OF FUNDAMENTAL RESTRICTION ON PORTFOLIO DIVERSIFICATION
PROPOSED CHANGE: Upon approval of Proposal 2, the existing fundamental
restriction on portfolio diversification would be modified as follows:
"The Fund will not purchase securities of any one issuer, other than those
issued or guaranteed by the United States government, its agencies or
instrumentalities or securities issued by other investment companies, if, as a
result, more than 5% of the Fund's total assets would be invested in securities
of such issuer or the Fund would own more than 10% of the outstanding voting
securities of such issuer, except that up to 25% of the Fund's total assets may
be invested without regard to these limitations."
DISCUSSION: The Fund is a "diversified" fund under the 1940 Act and,
accordingly, must have a policy or fundamental restriction establishing
percentage limitations with respect to investments in the securities of any one
issuer. The proposed changes to the Fund's fundamental restriction on portfolio
diversification would make minor changes in wording from the existing
fundamental restriction but would not change the Fund's existing restriction
substantively.
C. MODIFICATION OF FUNDAMENTAL RESTRICTION ON UNDERWRITING SECURITIES
PROPOSED CHANGE: Upon approval of Proposal 2, the existing fundamental
restriction on underwriting securities for the Fund would be modified as
follows:
7
<PAGE>
"The Fund will not engage in the business of underwriting securities of
other issuers, except to the extent that the Fund might be considered an
underwriter under the federal securities law in connection with its disposition
of portfolio securities."
DISCUSSION: The proposed changes to this fundamental restriction would make
minor changes in wording from the existing fundamental restriction on
underwriting securities.
D. MODIFICATION OF FUNDAMENTAL RESTRICTION ON REAL ESTATE INVESTMENTS
PROPOSED CHANGE: Upon approval of Proposal 2, the existing fundamental
restriction on real estate investments for the Fund would be modified as
follows:
"The Fund will not purchase or sell real estate, except that investments in
securities of issuers that invest in real estate and investments in
mortgage-backed securities, mortgage participations or other instruments
supported by interests in real estate are not subject to this limitation, and
except that the Fund may exercise rights under agreements relating to such
securities, including the right to enforce security interests and to hold real
estate acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner."
DISCUSSION: The proposed changes to this fundamental restriction would make
changes in wording from the existing fundamental restriction on real estate
investments and would provide more detail regarding the types of real estate
related securities that are permissible investments for the Fund. In addition,
the proposed restriction includes an exception that permits the Fund to hold
real estate acquired as a result of ownership of securities or other interests.
E. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN COMMODITIES
PROPOSED CHANGE: Upon approval of Proposal 2, the existing fundamental
restriction on investing in commodities for the Fund would be modified as
follows:
"The Fund will not purchase or sell physical commodities, but the Fund may
purchase, sell or enter into financial options and futures, forward and spot
currency contracts, swap transactions and other financial contracts or
derivative instruments."
DISCUSSION: The proposed changes to this fundamental restriction are
intended to ensure that the Fund will have the maximum flexibility to enter into
hedging and speculative transactions utilizing financial contracts and
derivative products when doing so is permitted by the Fund's other investment
policies and would make changes in wording from the existing fundamental
restriction on investing in commodities. Furthermore, the proposed restrictions
would allow the Fund to respond to the rapid and continuing development of
derivative products. The proposed restriction broadens the exception to the
prohibition on buying and selling physical commodities to cover all financial
derivative instruments rather than only financial futures and currency
instruments.
F. MODIFICATION OF FUNDAMENTAL RESTRICTION ON MAKING LOANS
PROPOSED CHANGE: Upon approval of Proposal 2, the existing fundamental
restriction on making loans for the Fund would be modified as follows:
"The Fund will not make loans, except through loans of portfolio securities
or through repurchase agreements, provided that for purposes of this limitation,
the acquisition of bonds, debentures, other debt securities or instruments, or
participations or other interests therein and investments in government
obligations, commercial paper, certificates of deposit, bankers' acceptances or
similar instruments will not be considered the making of a loan."
8
<PAGE>
DISCUSSION: The proposed changes to this fundamental restriction would make
minor changes in wording from the existing fundamental restriction on making
loans. In addition, the proposed restriction more completely describes various
debt instruments the Fund may purchase that do not constitute the making of a
loan.
G. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PURCHASING RESTRICTED SECURITIES
PROPOSED CHANGE: Upon approval of Proposal 2, the existing fundamental
restriction on purchasing restricted securities would be eliminated.
DISCUSSION: The Fund is not required to have a fundamental restriction with
respect to purchasing no more than a certain percentage of the Fund's assets in
restricted securities. To maximize the Fund's flexibility in this area, the
Board believes that the Fund's restriction on purchasing more than 20% of the
Fund's total assets in restricted securities should be eliminated.
H. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTMENTS IN MARKETABLE WARRANTS
PROPOSED CHANGE: Upon approval of Proposal 2, the existing fundamental
restriction on investments in marketable warrants would be eliminated.
DISCUSSION: The Fund is not required to have a fundamental restriction with
respect to investing no more than a certain percentage of the Fund's assets in
marketable warrants. To maximize the Fund's flexibility in this area, the Board
believes that the Fund's restriction on purchasing more than 5% of the Fund's
total assets in marketable warrants should be eliminated.
I. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTMENTS IN OIL AND GAS PROGRAMS
PROPOSED CHANGE: Upon approval of Proposal 2, the existing fundamental
restriction on investments in oil or gas for the Fund would be eliminated.
DISCUSSION: The Fund is not required to have a fundamental restriction with
respect to oil or gas investments. To maximize the Fund's flexibility in this
area, the Board believes that the Fund's restriction on oil and gas investments
should be eliminated.
J. ELIMINATION OF FUNDAMENTAL RESTRICTION ON SELLING SECURITIES SHORT
PROPOSED CHANGE: Upon approval of Proposal 2, the existing fundamental
restriction on selling securities short for the Fund would be eliminated.
DISCUSSION: The Fund is not required to have a fundamental restriction with
respect to short sales of securities. To maximize the Fund's flexibility in this
area, the Board believes that the Fund's restriction on short sales of
securities should be eliminated.
K. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PURCHASING SECURITIES ISSUED BY
OTHER INVESTMENT COMPANIES
PROPOSED CHANGE: Upon approval of Proposal 2, the existing fundamental
restriction on purchasing securities issued by other investment companies for
the Fund would be eliminated.
DISCUSSION: There is no legal requirement that the Fund have a fundamental
restriction on this subject. This change would offer the Fund the ability to use
alternative investment structures. In addition, the ability of the Fund to
invest in other investment companies already is subject to certain percentage
limitations in the 1940 Act. Accordingly, the Board believes this investment
restriction should be eliminated.
9
<PAGE>
L. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PLEDGING ASSETS
PROPOSED CHANGE: Upon approval of Proposal 2, the existing fundamental
restriction on pledging assets for the Fund would be eliminated and the Fund
would become subject to the following non-fundamental restriction:
"The Fund will not mortgage, pledge, or hypothecate any of its assets,
provided that this shall not apply to the transfer of securities in connection
with any permissible borrowing or to collateral arrangements in connection with
permissible activities.
DISCUSSION: The Fund is not required to have a fundamental restriction with
respect to the pledging of assets. To maximize the Fund's flexibility in this
area, the Board believes that the Fund's restriction on pledging assets should
be made non-fundamental. The non-fundamental restriction would be similar to the
fundamental restriction proposed to be eliminated. The Board does not expect
this change to have any impact on the Fund's operations, except that it would
allow the Fund to borrow money on the basis of pledged securities when that
would be advantageous.
M. ELIMINATION OF FUNDAMENTAL RESTRICTION ON REPURCHASE AGREEMENTS.
PROPOSED CHANGE: Upon approval of Proposal 2, the existing fundamental
restriction on investments in repurchase agreements maturing in more than seven
days would be eliminated.
DISCUSSION: The Fund is not required to have a fundamental restriction with
respect to entering into repurchase agreements maturing in more than seven days.
To maximize the Fund's flexibility in this area, the Board believes that the
Fund's restriction on entering into repurchase agreements maturing in more than
seven days should be eliminated.
REQUIRED VOTE: Approval of each of the changes contemplated by Proposal 2
requires the affirmative vote of a "majority of the outstanding voting
securities" of the Fund, which for this purpose means the affirmative vote of
the lesser of (1) more than 50% of the outstanding shares of the Fund or (2) 67%
or more of the shares of the Fund present at the meeting if more than 50% of the
outstanding shares of the Fund are represented at the meeting in person or by
proxy. In addition to voting "for" or "against" the entire Proposal 2,
shareholders of the Fund also may vote against the changes proposed with respect
to specific fundamental restrictions in the manner indicated on the proxy card.
If the proposed changes are approved by the shareholders of the Fund at the
Meeting, those changes will be effective and the By-Laws will be amended on the
Fund's next business day. If any one or more of the changes are approved but
others are not approved, the approved changes will be effective and the relevant
portion of the By-Laws will be effective on the Fund's next business day.
IF ONE OR MORE OF THE CHANGES CONTEMPLATED BY PROPOSAL 2 ARE NOT APPROVED
BY SHAREHOLDERS, THE RELATED EXISTING FUNDAMENTAL RESTRICTION(S) OF THE FUND
WILL CONTINUE IN EFFECT.
THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE "FOR" EACH PORTION OF PROPOSAL 2.
SELECTION OF INDEPENDENT ACCOUNTANTS
PROPOSAL NO. 3
The Board of Directors, including a majority of those directors who are not
interested persons (as such term is defined in the 1940 Act) of the Fund or the
Investment Adviser ("Independent Directors"), selected PricewaterhouseCoopers
LLP to continue to serve as the independent accountants for the Fund for the
fiscal year ending March 31, 2000. Such appointment is now subject to
ratification or rejection by stockholders of the Fund.
10
<PAGE>
In addition, as required by the 1940 Act, the vote of the Board of Directors is
subject to the right of the Fund, by the vote of a majority of its outstanding
voting securities (as such term is defined in the 1940 Act), to terminate such
engagement without penalty at any meeting called for the purpose of voting
thereon.
PricewaterhouseCoopers LLP currently serves as the Fund's independent
accountants, and has audited the Fund's financial statements for the fiscal
years ended March 31, 1997, 1998 and 1999. PricewaterhouseCoopers LLP has
informed the Fund that it has no material direct or indirect financial interest
in the Fund. No representative of PricewaterhouseCoopers LLP is expected to be
present at the Meeting. The Audit Committee will review and approve services
provided by the independent accountants prior to their being rendered, and will
report to the Board of Directors concerning all such services after they have
been performed.
An affirmative vote of a majority of the shares present, in person or by
proxy, at the Meeting is required for ratification.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 3.
OTHER MATTERS
No business, other than as set forth above, is expected to come before the
Meeting. Should any other matters requiring a vote of stockholders properly come
before the Meeting, the persons named in the enclosed Proxy will vote thereon in
accordance with their best judgment in the interests of the Fund.
WELLINGTON MANAGEMENT COMPANY, LLP
Wellington Management Company, LLP, 75 State Street, Boston, Massachusetts
02109, is the Fund's Investment Adviser. The Investment Adviser is a
Massachusetts limited liability partnership of which the following persons are
managing partners: Robert M. Doran, Duncan M. McFarland and John R. Ryan. The
Investment Adviser is a professional investment counseling firm which provides
investment services to investment companies, employee benefit plans, endowment
funds, foundations and other institutions and individuals. As of _________,1999,
the Investment Adviser held discretionary investment authority over
approximately $_____ billion of assets. The Investment Adviser and its
predecessor organizations have provided investment advisory services to
investment companies since 1933 and to investment counseling clients since 1960.
The Investment Adviser is not affiliated with the Administrator. Prudential
Investments Fund Management LLC, the Fund's Administrator, is located at Gateway
Center Three, 100 Mulberry Street, Newark, New Jersey, 07102.
STOCKHOLDER PROPOSALS
If a stockholder intends to present a proposal at the Fund's annual meeting
of stockholders in 2000 and desires to have the proposal included in the Fund's
proxy statement and form of proxy for that meeting, the stockholder must deliver
the proposal to the offices of the Fund at Gateway Center Three, 100 Mulberry
Street, Newark, New Jersey, 07102 by March [3], 2000. Stockholder proposals that
are submitted in a timely manner will not necessarily be included in the Fund's
proxy materials. Inclusion of such proposal is subject to limitation under the
federal securities laws. In addition, the Fund's By-Laws recently have been
amended to require shareholders wishing to nominate directors or make proposals
to be voted on at the Fund's annual meeting to provide notice to the Secretary
of the Fund at least 90 days in advance of the anniversary of the date that the
Fund's proxy statement for its previous year's annual meeting was first released
to stockholders. The notice must contain information sufficient to identify the
nominee(s) or proposal and to establish that the stockholder beneficially owns
shares that would be entitled to vote on the nomination or proposal.
11
<PAGE>
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES
Please advise the Fund, at Gateway Center Three, 100 Mulberry Street,
Newark, New Jersey, 07102, whether other persons are beneficial owners of shares
for which Proxies are being solicited and if so, the number of copies of the
Proxy Statement you wish to receive in order to supply copies to the beneficial
owners of shares.
By Order of the Board of Directors,
/S/ Arthur J. Brown
-------------------
ARTHUR J. BROWN
SECRETARY
Dated: June 25, 1999
12
<PAGE>
=====================================
FIRST FINANCIAL FUND, INC.
FIRST
FINANCIAL
FUND, INC.
=================================
NOTICE OF
ANNUAL MEETING
TO BE HELD ON
AUGUST 23, 1999
AND
PROXY STATEMENT
PROXY
STATEMENT
<PAGE>
PROXY
FIRST FINANCIAL FUND, INC.
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102-4077
This proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints ________________ and ___________________ as
Proxies, each with the power of substitution, and hereby authorizes each of them
to represent and to vote, as designated on the reverse side of this card, all
the shares of common stock of First Financial Fund, Inc. (the "Fund") held of
record on June 11, 1999 at the Annual Meeting of Stockholders to be held on
August 23, 1999, or any adjournment thereof.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------ -------------------------------------
- ------------------------------------ -------------------------------------
- ------------------------------------ -------------------------------------
<PAGE>
- --- PLEASE MARK VOTES
X AS IN THIS EXAMPLE
- --- The Board of Directors recommends a vote
- ------------------------------- "FOR" the nominee and "FOR" each of the
THE HIGH YIELD PLUS FUND., INC. following Proposals:
- -------------------------------
1. ELECTION OF DIRECTOR FOR WITHHELD
Nominee: --- ---
This Proxy, when Eugene C. Dorsey --- ---
properly executed,
will be voted in
the manner directed
by the undersigned
shareholder. If no
direction is made,
this proxy will be
voted FOR Proposals
1, 2, 3 and 4.
FOR AGAINST ABSTAIN
2. To approve changes to --- --- ---
certain fundamental --- --- ---
investment
restrictions of the
Fund and to amend the
Bylaws of the Fund.
(You may vote
"for" or "against"
changes proposed with
respect to SPECIFIC
fundamental
restrictions by
writing your voting
preferences in the
section for comments
on the reverse side of
this card.)
FOR AGAINST ABSTAIN
3. To ratify the --- --- ---
selection of --- --- ---
PricewaterhouseCoopers
LLP as independent public
accountants for the
fiscal year ending
March 31, 2000.
FOR AGAINST ABSTAIN
4. To consider and --- --- ---
act upon such --- --- ---
other business as
may properly come
before the meeting
and any adjournments
thereof.
Please be sure to sign ------------
and date this Proxy. Date Mark box at right if an address ---
- ------------------------------------ change or comment has been noted
on the reverse side of this card. ---
- ---Stockholder sign here------------
- ---Co-owner sign here--------------- RECORD DATE SHARES:
