FIRST FINANCIAL FUND, INC.
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
February __, 2000
Dear Stockholder:
Enclosed is a proxy statement asking you to vote for an amendment to the
Articles of Incorporation of First Financial Fund, Inc. (the "Fund"). The
proposed amendment would provide that any change to the Fund's investment
objectives, any change to its policy with respect to concentration, or certain
business combinations with affiliated stockholders would require the vote of
holders of a supermajority (66 2/3%) of the outstanding shares of the Fund. As
described more fully in the enclosed proxy materials, the Board of Directors of
the Fund (the "Board") believes that the amendment would protect the Fund
against the adverse effects to the Fund's stockholders that could result from a
major change in the fundamental nature of the Fund. The enclosed proxy materials
contain detailed information about the proposed amendment. Also enclosed is a
letter from Nick Adams, the Portfolio Manager of the Fund, discussing the Fund's
performance and strategic outlook.
A special stockholder meeting (the "Meeting") is being held on April 25,
2000 to consider the proposed amendment to the Articles of Incorporation. You
may vote at the meeting if you are the record owner of shares of the Fund as of
the close of business on February 22, 2000. If you attend the Meeting, you may
vote your shares in person. If you do not expect to attend the Meeting, please
fill in, date, sign and return the proxy card in the enclosed envelope which
requires no postage if mailed in the United States. You may also vote your
shares by telephone (1-8xx-xxx-xxxx) or on the internet at http://www.______.com
by following the instructions that appear on the enclosed proxy insert. The
Board believes that the proposal will benefit the Fund and its stockholders and
recommends that you read the enclosed materials carefully and then vote FOR the
proposal.
Your vote is important. Please take a moment now to sign and return your
proxy card. If we do not hear from you, you may receive a telephone call from
our proxy solicitor, Shareholder Communications Corporation, reminding you to
vote your shares. Thank you for your attention to this matter and for your
continuing investment in the Fund.
Very truly yours,
THOMAS T. MOONEY
PRESIDENT AND DIRECTOR
<PAGE>
WELLINGTON MANAGEMENT COMPANY, LLP
75 STATE STREET
BOSTON, MA 02109
February __, 2000
Dear Fellow Shareholder:
Given the challenging investment environment which we have experienced
over the recent past, I thought you would appreciate an informal update on First
Financial Fund, Inc.
Since its inception in 1986, your Fund has pursued its primary investment
objective of long-term capital appreciation and secondary investment objective
of generating current income by focusing on a unique and specialized segment of
the markets: securities issued by savings, banking and mortgage banking
institutions and their holding companies.
Over the long term, these investment objectives have served the Fund's
shareholders well. During the decade ended December 31, 1999, the Fund returned
21.1% on an annualized basis, while the S&P 500 returned 18.2%. During that same
10-year period, your Fund dramatically outperformed its industry benchmarks, the
NASDAQ Banks and SNL All Daily Thrift indices, which returned 15.8% and 13.2%,
respectively, on an annualized basis.
This successful strategy has not changed over the years. We do extensive
company research, and invest in the stocks of those small-to mid-sized financial
companies that -- despite their size -- are well managed and innovative. One
such example is a company such as LNR Property Corp., an investor in real estate
and commercial-mortgage securities, and a Fund holding for some time now. LNR
possesses the exact characteristics we look for: it is a leader in its sector
and has repeatedly met or exceeded earnings targets. Yet, LNR Property Corp.
traded at only 7 times estimated 2000 earnings as recently as February 14, 1999.
While we follow these companies carefully and research them thoroughly,
others do not. As a result, small-cap financial companies such as LNR Property
Corp. are typically under-followed by securities analysts and thinly owned by
institutional investors. When the financial sector is out-of-favor and not
receiving new capital flows, many of these securities can become relatively
illiquid and difficult to trade. We have experienced such a market since the
summer of 1998, as technology stocks have benefited almost exclusively from new
capital inflows. This technology "boom" is well-documented and has affected
behavior among individual and institutional investors alike.
It is in times like this that the Fund's closed-end structure is truly
beneficial, since it allows the Fund to weather periods of illiquidity and
volatility. Recent market conditions have, nevertheless, had a significant
impact on the recent performance of the Fund. During the past year, as market
concerns over higher interest rates and deteriorating credit drove financial
stocks lower, the Fund underperformed versus the S&P 500 Index but outperformed
versus the NASDAQ Bank Index and the SNL All Daily Thrift Index.
<PAGE>
Interestingly, we have weathered similar storms before: in 1989 and 1990,
we saw illiquid markets for our financial industry holdings, and resulting Fund
underperformance relative to the broad market (S&P 500 Index). It was the Fund's
ability to maintain its holdings for the long term that allowed shareholders to
benefit fully from the subsequent sector recovery and which contributed to the
Fund's outstanding performance from 1991 to 1997. Indeed, at the end of 1997,
Morningstar ranked the Fund as the best-performing public fund in the U.S. for
the prior decade.
While financial stocks have remained out of favor over the past year and a
half, and many industry challenges exist, relative valuations in smaller bank
and thrift stocks today are the most compelling we have seen in the past 14
years. We believe the financial sector, and small-cap stocks specifically, are
positioned to benefit from the eventual plateauing of interest rates, the spurt
of cross-industry mergers and investor rotation out of large-cap growth stocks.
There are terrific opportunities for the best-managed institutions to thrive.
We have continued to be vigilant for investment opportunities during this
recent difficult period. While maintaining our traditional focus on superior
operating performance including excess capital efficiency and
shareholder-oriented managements - we have also been seeking companies which are
making appropriate technology investments, as well as financial-service
enterprises developing Internet-based and other new distribution channels.
Patience, consistency and the ability to hold positions until investor
sentiment turns will be critical to the Fund's realization of the significant
value that we believe is stored in the Fund's portfolio, but currently not
possible to recognize due to a lack of market liquidity. Having experienced such
a market cycle some 10 years ago, your Fund's portfolio management team
possesses the resolve and conviction to capture such potential value when
conditions ultimately change.
We thank you for your patience and look forward to again demonstrating our
proven long-term track record of producing strong returns.
Sincerely,
Nicholas C. Adams
Wellington Management Company, LLP
Note: Except for the historical information and discussions contained herein,
statements contained in this release may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on current expectations as of the date of this
release. Actual market developments may differ materially from those discussed
here because of a number of economic and market risks and uncertainties,
including those noted in the Fund's filings with the Securities and Exchange
Commission.
- --------------------------
The S&P 500 is a broad unmanaged market index of securities prices. The NASDAQ
Banks index is a sector index of the NASDAQ Composite Index and includes trust
companies not engaged in deposit banking as well as banking companies performing
the following functions: check cashing, currency exchanges, overseas banking,
and safe deposits. The SNL All Daily Thrift Index includes every exchange traded
thrift institution in the U.S. (approximately 340 thrifts in the Index).
<PAGE>
FIRST FINANCIAL FUND, INC.
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
-----------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
-----------------------
To our Stockholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders ("Meeting")
of First Financial Fund, Inc. ("Fund") will be held on April 25, 2000 at 10:30
a.m., at the Plaza Building, 751 Broad Street, 21st Floor, Newark, New Jersey
07102 for the following purpose:
To approve an amendment to the Articles of Incorporation adding
supermajority voting requirements to approve any change to the Fund's
investment objectives, any change to its policy with respect to
concentration, or certain business combinations with affiliated
stockholders.
Only holders of common stock of record at the close of business on
February 22, 2000 are entitled to notice of and to vote at the Meeting or any
adjournment thereof.
By order of the Board of Directors,
ARTHUR J. BROWN
SECRETARY
Dated: February 29, 2000
<PAGE>
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN.
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
STOCKHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY STOCKHOLDER
WHO DOES NOT EXPECT TO ATTEND THE 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.
YOU MAY ALSO VOTE YOUR SHARES BY TELEPHONE OR THROUGH A WEB SITE ESTABLISHED FOR
THAT PURPOSE BY FOLLOWING THE INSTRUCTIONS ON THE ENCLOSED PROXY INSERT.
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
------------------------
SPECIAL MEETING OF STOCKHOLDERS
APRIL 25, 2000
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 a Special
Meeting of Stockholders ("Meeting") to be held on April 25, 2000 at 10:30 a.m.
at the Plaza Building, 751 Broad Street, Newark, New Jersey 07102. The matter to
be acted upon at the Meeting is set forth in the accompanying Notice of Special
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. If no instructions are specified on a Proxy, shares
will be voted FOR the proposal. A Proxy may be revoked at any time prior to its
use by written notification to the Fund. To be effective, such revocation must
be received by the Fund prior to the Meeting. In addition, a stockholder may
revoke a proxy by attending the Meeting and voting in person. The solicitation
of proxies will be made primarily by mail but also may be made by telephone,
facsimile, telegraph, telecopy and personal interviews. Authorization to execute
proxies may be obtained by telephone or electronically transmitted instructions.
The close of business on February 22, 2000 (the "Record Date") has been
fixed as the record date for the determination of stockholders entitled to
notice of and to vote at the Meeting. On the Record Date, the Fund had
_____________ shares of common stock outstanding and entitled to vote. Each full
share will be entitled to one vote and each fractional share shall be entitled
to a fractional vote at the Meeting. It is expected that the Notice of Special
Meeting, Proxy Statement and form of Proxy first will be mailed to stockholders
on or about March 1, 2000.
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 regular employees of Prudential Investments Fund Management
LLC, the Fund's Administrator ("Administrator") or the Administrator's
affiliate, Prudential Securities Incorporated. The Fund will request
broker-dealer firms, custodians, nominees, and fiduciaries to forward proxy
material to the beneficial owners of the shares held of record by such persons.
All expenses in connection with preparing this Proxy Statement and its
1
<PAGE>
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. In
addition, the Fund may retain Shareholder Communications Corporation, a proxy
solicitation firm, at a cost of approximately $_____ to solicit stockholders on
behalf of 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 the proposed item 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 the proposal. 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 the proposal in favor of such an
adjournment, and will vote those Proxies required to be voted against the
proposal against any such adjournment.
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 the 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 the proposal.
Except as set forth below, as of the Record Date, the Fund does not know
of any other person who owns beneficially 5% or more of the outstanding shares
of the Fund:
Ernest Horejsi Trust No. 1B, 122 S. Phillips Ave., Suite 220, Sioux Falls, S.D.
57104, owing _______ shares, representing __% of the Fund's outstanding shares.+
Lola Brown Trust No. 1B, 122 S. Phillips Ave., Suite 220, Sioux Falls, S.D.
57104, owning _______ shares, representing __% of the Fund's outstanding
shares.+
Mildred B. Horejsi Trust, 122 S. Phillips Ave., Suite 220, Sioux Falls, S.D.
57104, owning _______ shares, representing __% of the Fund's outstanding
shares.+
+This information is based solely on a combined Schedule 13D filed on February
__, 2000, reporting holdings as of February __, 2000, with Stewart R. Horejsi
("Horejsi") reporting aggregate holdings of ___% of the Fund's shares as of
February __, 2000, and indicating that, because of the relationships between
Horejsi and the entities, Horejsi may be deemed to share beneficial ownership of
all such shares.
2
<PAGE>
To the knowledge of management, the executive officers and Directors of
the Fund, as a group, owned less than 1% of the outstanding shares of the Fund
as of the record date.
Stockholders may obtain a copy of the Fund's annual report and most recent
semi-annual report by calling EquiServe, L.P. toll-free at (800) 451-6788.
PROPOSAL:
AMENDMENT OF ARTICLES OF INCORPORATION TO ADD
SUPERMAJORITY VOTING REQUIREMENTS
SUMMARY OF THE PROPOSAL
The Board has considered and unanimously approved for submission to the
Fund's stockholders a proposed amendment to the Fund's Articles of Incorporation
("Articles"), attached as Exhibit A, that would ensure that the Fund's
investment objectives and its policies with respect to concentration in savings,
banking, and mortgage banking institutions will not be changed, and that the
Fund will not enter into a business combination with an affiliated stockholder,
unless such actions are approved by the holders of two-thirds of the Fund's
shares, instead of a simple majority. As described more fully below, the Board
believes that the proposed amendment will provide confidence to shareholders
that the Fund's core policies will remain in place absent substantial
shareholder support for a change.
The proposed supermajority provisions would require the affirmative vote
of the holders of 66 2/3 percent of the outstanding shares of common stock of
the Corporation to approve any proposal to (a) change the Fund's investment
objective of seeking long-term capital appreciation, with a secondary objective
of current income; (b) change the Fund's policy of normally investing at least
65 percent of its total assets in securities issued by savings and banking
institutions, mortgage banking institutions and their holding companies; or (c)
engage in any business combination (such as a merger) with a stockholder owning
5 percent or more of the Fund or any affiliate of such a stockholder.
BACKGROUND
GENERAL. The Board believes that the adoption of the supermajority voting
standard would benefit stockholders by increasing the assurance of current
stockholders that the Fund will continue to pursue its long-term strategies
absent very substantial support for a change of strategy. Since its inception in
1986, the Fund has consistently adhered to its primary investment objective of
long-term capital appreciation and secondary investment objective of current
income. Moreover, it has focused at least 65 percent of its total assets in
securities issued by savings, banking, and mortgage banking institutions
throughout its history. In 1993, stockholders approved the express addition of
mortgage banking institutions to the list of core holdings to reflect changes in
the overall industry. In pursuing these objectives, the Fund focuses on, and
invests in, the stocks of small to mid-sized financial companies that should
3
<PAGE>
offer significant long-term capital appreciation. These companies often have
smaller capitalization and therefore may be under-researched by others and owned
by fewer institutions. The securities of many of these companies are also less
liquid than those of large companies and during market downturns can be
difficult to trade.
In the current market cycle, the Board and Wellington Management Company,
LLP, the Fund's investment adviser ("Adviser"), believe that significant changes
in the Fund's investment approach requiring the sale of the Fund's less liquid
securities would be detrimental to Fund stockholders. Indeed, a similar period
of illiquidity and Fund underperformance occurred during 1989-1990. The ability
to hold positions for the long term allowed Fund stockholders to benefit fully
from the subsequent sector recovery and contributed to the Fund's outstanding
performance from 1991-1997.
The Fund's approach, though subject to periods of volatility and
underperformance relative to the overall U.S. equity markets, has produced a
proven long-term track record of strong returns. Any abrupt change to the Fund's
investment objectives or concentration policy would be very disruptive given the
cyclical nature of the financial services sector. The Adviser believes that,
although prices in this sector have recently been depressed, strong
opportunities exist under current market conditions, especially for those
companies that continue to meet or exceed expected earnings. The Adviser also
anticipates accelerating acquisition activity and views the current environment
as having the most compelling valuations in this market sector since the early
1990s.
Accordingly, the expectations of stockholders that the Fund will seek
long-term capital appreciation (with a secondary objective of current income) by
investing in securities issued by savings and banking institutions, mortgage
banking institutions, and their holding companies, should not be changed easily.
By protecting the Fund's long-standing investment objectives and concentration
policy, the Fund can help ensure that investment expectations of its
stockholders will be met over the long term.
The proposal requires, among other things, a supermajority vote of
stockholders for business combinations involving stockholders holding 5 percent
or more of the Fund's shares. This provision would augment the protections of
the Investment Company Act of 1940, as amended, governing transactions with
affiliates. It would also make it more difficult for others to acquire control
of the Fund. Over the past several years, closed-end investment companies like
the Fund have been the subject of attempts by certain persons to alter their
structure or operations or to engage in other extraordinary actions, such as
mergers, for the purpose of gaining management control or for other reasons. The
Board believes that the proposal will increase the Fund's ability to resist
takeover attempts and attempts to change the business and investment nature of
the Fund that are not supported by a substantial majority of stockholders.
RECENT ACQUISITIONS OF FUND SHARES. The Board is not aware of any pending
or threatened effort to amend the Fund's objectives or its core policy or to
take control of the Fund. The Board is aware, however, that according to a
Schedule 13D and amendments thereto ("Schedule 13D") filed with the Securities
and Exchange Commission ("SEC"), Stewart R. Horejsi ("Horejsi") and affiliated
entities collectively own, and share direct or indirect voting and dispositive
4
<PAGE>
power over, more than 17 percent of the Fund's shares. Horejsi and his related
entities have accumulated their current ownership of Fund shares beginning in
August, 1999. Although Horejsi and his affiliates have not disclosed any present
intention to alter the Fund's investment objectives and policy, they have
indicated in their combined Schedule 13D that they "may seek representation on
[the Fund's] board of directors . . . [and] may recommend that [the Fund]
broaden its investment focus."
The Board believes that the proposed supermajority provisions, in addition
to the beneficial effects discussed above, would also diminish the ability of
any stockholder to cause a change in the Fund's long-standing investment
objectives and concentration policy or to effect certain business combinations,
unless the stockholder purchased significantly more than a simple majority of
Fund shares or convinced holders of a two-thirds majority of all shares of the
need for such changes. The proposed amendment may also provide assurance to
current and potential Fund stockholders who may otherwise be apprehensive about
the possibility that the Fund could easily change its investment focus. The
Board therefore believes that the proposed amendment to the Articles is in the
best interests of the Fund and its stockholders.
CURRENT PROVISIONS OF AND PROPOSED AMENDMENTS TO ARTICLES
Currently, the Articles provide that any action authorized to be taken by
stockholders may be taken or authorized upon vote of a simple majority of the
Fund's shares (except for changes related to limitations of liability for the
Fund's directors, officers and employees.) This provision preempts several
provisions of Maryland law that require approval by a greater proportion than a
majority of a corporation's shares in the absence of a contrary standard set
forth in a corporation's charter. The Articles and Maryland law currently do not
provide for a supermajority vote of the Fund's stockholders in any context that
would implicate attempts to change fundamentally the nature of the Fund or
takeover attempts.
The Board has considered and unanimously approved an amendment to the
Articles to require supermajority voting in approving certain actions. The
amendment would create a new Article Ninth, Section (b)(1) and (2), which would
require an affirmative vote of stockholders representing two-thirds of the
outstanding shares of the Fund to change the Fund's investment objectives or to
alter the Fund's policy with respect to concentration in the banking, savings
and mortgage banking industries.
Similarly, a new Article Ninth, Sections (b)(3), (c) and (d) require the
vote of the holders of two-thirds of the Fund's shares for the Fund to effect a
business combination (merger, acquisition, etc.) with a stockholder (or its
affiliate) holding greater than 5 percent of the Fund's shares. Rather than
change the Fund's investment objective and policies directly, a dissident
investor may attempt to merge the Fund into an existing entity with very
different investment parameters, thus accomplishing the same goal. New Sections
(b)(3), (c) and (d) would protect against such actions.
A copy of the proposed amendment to the Fund's Articles is attached as
Exhibit A.
5
<PAGE>
REASONS FOR THE BOARD'S SUPPORT OF THE PROPOSED AMENDMENT
The Board recommends that stockholders approve the proposed supermajority
voting requirement to the Fund's Articles because the amendment would:
o Ensure that the expectations of stockholders that the Fund will
maintain its long-standing policies of seeking long-term capital
appreciation (with a secondary objective of current income) by
investing in securities issued by savings and banking institutions,
mortgage banking institutions, and their holding companies, will not
be changed without support from the holders of at least 66 2/3
percent of all shares.
o Protect stockholders from adverse effects arising from sudden
changes to the Fund's investment approach. The Fund primarily
invests in small to mid-sized financial companies which the Adviser
believes are well positioned for long-term capital appreciation and
which, by their nature, are relatively volatile. Performance in this
sector can be cyclical and any abrupt change to the Fund's
investment approach during one of these cycles could be detrimental
to stockholders.
o Protect stockholders from any proposal to merge the Fund or sell its
assets to any 5 percent or greater stockholder or an entity
affiliated with such stockholder. Such actions may be a means to
accomplish changes to the Fund's objectives and core policies
indirectly by proposing to merge the Fund into an entity with
different investment objectives and/or policies, possibly to the
detriment of many Fund stockholders and contrary to their
expectations.
The proposed supermajority voting requirements would make it more
difficult to change the Fund's investment objectives and policies with respect
to concentration and would make it more difficult to obtain stockholder approval
of mergers and other business combinations, even if the Board and/or a majority
of stockholders were to support such actions. For example, if the proposed
supermajority provisions are adopted, a Board approved proposal to modify the
Fund's investment objectives would not become effective without the approval of
the holders of 66 2/3 percent of Fund shares. The affirmative vote of a
supermajority of shares may be difficult to obtain, and would be substantially
more difficult to obtain than the affirmative vote of the holders of a simple
majority of shares.
Nevertheless, the Board of Directors believes that the proposed amendment
is in the best interests of the Fund and Fund stockholders precisely because
extraordinary actions involving changes to basic Fund operations should not be
effected without broad stockholder support. Under the proposed amendment, a
majority vote of the Fund's shares would be sufficient to approve the vast
majority of proposals that may come before stockholders, such as proposals
relating to the election of Directors or the selection of accountants. Only a
small minority of proposals, i.e., those relating to the Fund's core investment
mandate and certain business combinations, would be governed by supermajority
provisions. In the opinion of the Board of Directors, supermajority voting is
advisable with respect to these extraordinary actions because of the
significance of these matters to the Fund and to Fund stockholders.
6
<PAGE>
REQUIRED VOTE
The proposed amendment to the Articles requires the affirmative vote of a
majority of the Fund's shares. If a majority vote is not received and the
proposed amendment to the Fund's Articles is not adopted, any action authorized
to be taken by stockholders would continue to be subject to the vote of a simple
majority of the Fund's shares.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" THE PROPOSED AMENDMENT TO THE ARTICLES OF INCORPORATION.
GENERAL INFORMATION
DIRECTORS AND OFFICERS
The Directors of the Fund are Eugene C. Dorsey, Robert E. LaBlanc, Douglas
H. McCorkindale and Thomas T. Mooney. The officers of the Fund are Thomas T.
Mooney (President and Treasurer), Arthur J. Brown (Secretary) and R. Charles
Miller (Assistant Secretary).
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: Laurie Gabriel, 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 January 31,
2000, the Investment Adviser held discretionary investment authority over
approximately $231 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
The Fund's By-Laws require stockholders 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. Accordingly, 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
April 2, 2000. The notice must contain information sufficient to identify the
7
<PAGE>
nominee(s) or proposal and to establish that the stockholder beneficially owns
shares that would be entitled to vote on the nomination or proposal. 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. Stockholders proposals not
received by April 2, 2000 will not be considered "timely" within the meaning of
Rule 14a-4(c) of the Securities Exchange Act of 1934.
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,
ARTHUR J. BROWN
Secretary
Dated: February __, 2000
8
<PAGE>
EXHIBIT A
The following is the proposed amendment to Article Ninth of the Fund's Articles.
The existing language is shown in plain text; the proposed new language is
bolded and is underlined.
NINTH: MAJORITY AND SUPERMAJORITY VOTES.
(A) Notwithstanding any provision of the Maryland General
Corporation Law requiring a greater proportion than a majority of
the votes entitled to be cast in order to take or authorize any
action, any such action may be taken or authorized upon the
concurrence of at least a majority of the aggregate number of votes
entitled to be cast thereon, EXCEPT AS SET FORTH BELOW.
(B) A VOTE OF AT LEAST 66 2/3% OF THE AGGREGATE NUMBER OF
VOTES ENTITLED TO BE CAST THEREON SHALL BE NECESSARY TO EFFECT ANY
OF THE FOLLOWING ACTIONS: (1) ANY PROPOSAL AMENDING, MODIFYING OR
RESTATING THE CORPORATION'S INVESTMENT OBJECTIVE WITH RESPECT TO THE
CORPORATION'S ASSETS; (2) ANY PROPOSAL RELATING TO THE CORPORATION'S
POLICIES WITH RESPECT TO CONCENTRATING THE CORPORATION'S ASSETS IN A
PARTICULAR INDUSTRY OR GROUP OF INDUSTRIES (AS REQUIRED BY SECTION
8(B)(1)(E) OF THE INVESTMENT COMPANY ACT OF 1940); OR (3) ANY
BUSINESS COMBINATION.
(C) FOR PURPOSES OF THIS ARTICLE NINTH, THE TERM "BUSINESS
COMBINATION" SHALL MEAN THE FOLLOWING: (A) ANY MERGER OR
CONSOLIDATION OF THE CORPORATION WITH OR INTO ANY PRINCIPAL
STOCKHOLDER; (B) ANY SALE, LEASE, EXCHANGE, MORTGAGE, PLEDGE,
TRANSFER OR OTHER DISPOSITION (IN ONE TRANSACTION OR A SERIES OF
TRANSACTIONS) TO OR WITH ANY PRINCIPAL STOCKHOLDER OF ANY ASSETS OF
THE CORPORATION EXCEPT FOR PORTFOLIO TRANSACTIONS OF THE CORPORATION
EFFECTED IN THE ORDINARY COURSE OF THE CORPORATION'S BUSINESS; OR
(C) THE ISSUANCE OR TRANSFER BY THE CORPORATION (IN ONE TRANSACTION
OR A SERIES OF TRANSACTIONS) OF ANY SHARES OF THE CORPORATION TO ANY
PRINCIPAL STOCKHOLDER IN EXCHANGE FOR CASH, SECURITIES OR OTHER
PROPERTY (OR A COMBINATION THEREOF) EXCLUDING SALES OF ANY SHARES OF
THE CORPORATION IN CONNECTION WITH A PUBLIC OFFERING THEREOF.
(D) FOR PURPOSES OF THIS ARTICLE NINTH, THE TERM "PRINCIPAL
STOCKHOLDER" SHALL MEAN ANY CORPORATION, PERSON, OR GROUP (WITHIN
THE MEANING OF RULE 13D-5 UNDER THE SECURITIES EXCHANGE ACT OF
1934), WHICH IS THE BENEFICIAL OWNER, DIRECTLY OR INDIRECTLY, OF
MORE THAN FIVE PERCENT OF THE OUTSTANDING SHARES OF THE STOCK OF THE
CORPORATION AND SHALL INCLUDE ANY "AFFILIATE" OR "ASSOCIATE" OF A
PRINCIPAL STOCKHOLDER, AS THOSE TERMS ARE DEFINED IN RULE 12B-2
UNDER THE SECURITIES EXCHANGE ACT OF 1934).
9
<PAGE>
First Financial Fund, Inc.
FIRST FINANCIAL FUND, INC.
NOTICE OF SPECIAL MEETING
TO BE HELD ON
APRIL 25, 2000
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 Thomas T. Mooney and Arthur J. Brown 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 February 22, 2000 at the Special Meeting of Stockholders to be held on April
25, 2000, or any adjournment thereof.
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
PROPOSAL 1.
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. IF YOU ARE NOT VOTING
BY PHONE OR VIA THE INTERNET, PLEASE SIGN AND DATE THIS PROXY BELOW AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE.
TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET, PLEASE CALL 1-8XX-XXX-XXXX
TOLL-FREE OR VISIT HTTP://WWW.___.COM ON THE WORLD WIDE WEB. YOU DO NOT NEED TO
FILL OUT THIS CARD IF YOU VOTE BY TOUCH-TONE PHONE OR THE INTERNET.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please sign exactly as your name appears hereon. Joint owners should each sign.
When signing as executor, administrator, attorney, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name by
president or other authorized officer, giving full title. If a partnership,
please sign in partnership name by an authorized person, giving full title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- --------------------------------------- ------------------------------------
- --------------------------------------- ------------------------------------
- --------------------------------------- ------------------------------------
<PAGE>
- --------
PLEASE MARK
X VOTES AS IN THIS
EXAMPLE
- --------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- ----------------------------------------- The Board of Directors recommends a vote
FIRST FINANCIAL FUND, INC. "FOR" the following Proposal:
- ----------------------------------------- For Against Abstain
1. To approve an amendment to the Articles
of Incorporation adding supermajority |_| |_| |_|
voting requirements to approve any
CONTROL NUMBER: change to the Corporation's investment
objectives, any change to its policy
with respect to concentration, or
--------- certain business combinations with
Please be sure to sign and date this Date affiliated stockholders.
proxy. ---------
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:
</TABLE>
