<PAGE> 1
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:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[ ] Definitive additional materials
[ ] Soliciting material Under Rule 14a-12
FIRST FUNDS
(Name of Registrant/s as Specified in Its Charter)
(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:
(2) Aggregate number of securities to which transaction applies:
(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:
(5) Total fee paid:
[ ] 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 identity 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 3
FIRST FUNDS
U.S. TREASURY MONEY MARKET PORTFOLIO
370 17TH STREET, SUITE 3100
DENVER, COLORADO 80202
September 15, 2000
Dear Shareholder:
I am writing to request your approval of the proposal included in the
attached Proxy Statement. The Proposal is to adopt an amendment to the
Distribution Plan for Class IV of the U.S. Treasury Money Market Portfolio (the
"Portfolio"), and to adopt an amendment to the Shareholder Services Plan for
Class IV of the Portfolio. We believe that this change is necessary in order for
the Portfolio to be more competitive in the marketplace.
In order to consider this proposal, we have scheduled a Special Meeting of
the Shareholders of the Portfolio to be held on October 2, 2000 at 10:00 a.m.,
Mountain Time, at the office of First Funds, 370 17th Street, Suite 3100,
Denver, Colorado 80202. The proposal is discussed in more detail in the attached
Proxy Statement. The Board of Trustees of First Funds has unanimously
recommended that the shareholders of the Portfolio approve this proposal.
Whether or not you plan to attend personally and regardless of the number
of shares you own, it is important that your shares be represented. I ENCOURAGE
YOU TO SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY IN THE POSTAGE-PAID
ENVELOPE PROVIDED FOR YOUR CONVENIENCE.
Sincerely,
/s/Richard C. Rantzow
Richard C. Rantzow
Chairman, Board of Trustees
<PAGE> 4
FIRST FUNDS
U.S. TREASURY MONEY MARKET PORTFOLIO
370 17TH STREET, SUITE 3100
DENVER, COLORADO 80202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 2, 2000
Notice is hereby given that a special meeting of the shareholders of Class IV of
the U.S. Treasury Money Market Portfolio (the "Portfolio") of First Funds, a
Massachusetts business trust ("First Funds"), will be held at 10:00 a.m.,
Mountain Time, at the offices of First Funds, 370 17th Street, Suite 3100,
Denver, Colorado 80202, on October 2, 2000, to vote on the following proposal:
PROPOSAL: To adopt an amendment to the Distribution Plan for the First
Funds Class IV shares to reflect a .50% distribution (12b-1) fee
for the Portfolio, to adopt an amendment to the Shareholder
Services Plan for the First Funds Class IV shares to reflect a
.25% shareholder services fee for the Portfolio, and to transact
such other business as may properly come before the meeting or
any adjournment thereof.
The Board of Trustees of First Funds has fixed the close of business on August
15, 2000, as the record date for the determination of shareholders entitled to
notice of and to vote at the Meeting.
By Order of the Board of Trustees
Russell C. Burk, Esq.
Secretary
September 15, 2000
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING,
PLEASE COMPLETE AND SIGN THE ENCLOSED VOTING INSTRUCTION/PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE
CONTINENTAL UNITED STATES. IF YOU DESIRE TO VOTE IN PERSON AT THE MEETING, YOU
MAY REVOKE YOUR VOTING INSTRUCTION/PROXY AT ANY TIME PRIOR TO THE MEETING.
<PAGE> 5
FIRST FUNDS
U.S. TREASURY MONEY MARKET PORTFOLIO
370 17TH STREET, SUITE 3100
DENVER, COLORADO 80202
(800) 442-1941
PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD October 2, 2000
This Proxy Statement (the "Statement") is being furnished by First Funds, a
Massachusetts business trust ("First Funds"), to shareholders of the Class IV
shares of the U.S. Treasury Money Market Portfolio (the "Portfolio"). The
Statement is being sent in connection with the solicitation of proxies by and on
behalf of First Funds' Board of Trustees for use at the Special Meeting of
Shareholders (the "Meeting"), to be held on October 2, 2000, at 10:00 a.m.,
Mountain Time, at the offices of First Funds, 370 17th Street, Suite 3100,
Denver, Colorado 80202, and any adjournments thereof, for the purposes set forth
in the accompanying Notice of Special Meeting of Shareholders, as further
described below. This Statement is being mailed to shareholders of the Portfolio
on or about September 15, 2000.
As more fully described below, the Meeting has been called for the following
purpose:
To adopt an amendment to the Distribution Plan for the First Funds Class IV
shares to reflect a .50% distribution (12b-1) fee for the Portfolio, to adopt an
amendment to the Shareholder Services Plan for the First Funds Class IV shares
to reflect a .25% shareholder services fee for the Portfolio, and to transact
such other business as may properly come before the meeting or any adjournment
thereof.
Proxy solicitations will be made, beginning on or about September 15, 2000,
primarily by mail, but proxy solicitations also may be made by telephone, fax or
e-mail. The Portfolio will pay the costs of the proxy solicitation and expenses
incurred in connection with the preparation of this Statement and its
enclosures.
The financial statements of First Funds for the fiscal year ended June 30, 2000,
are included in the Annual Report to Shareholders. Copies of the Annual Report,
and of the Semi-Annual Report for the period ended December 31, 1999, are
available without charge. To obtain copies, write First Funds c/o ALPS Mutual
Funds Services, Inc., 370 17th Street, Suite 3100, Denver, Colorado 80202, or
call First Funds at (800) 442-1941 (Option 1).
1
<PAGE> 6
PROXIES
Any shareholder giving a proxy has the power to revoke it prior to its exercise
by submitting a later dated proxy, by voting in person or by letter to the
Secretary of First Funds.
In the event that a quorum is not present at the Meeting or in the event that a
quorum is present but sufficient votes to approve the proposal are not received,
the persons named as proxies may propose one or more adjournments of the Meeting
to permit further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. The persons named as proxies will vote those proxies that
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 such
adjournment.
Under the By-laws of First Funds, a majority of shares of the Portfolio entitled
to vote in person or by proxy will constitute a quorum for the transaction of
business at the meeting. If a proxy is received with no instructions indicated,
then the votes attributable to such proxy will be voted for the proposal.
RECORD DATE
The Board of Trustees of First Funds has fixed the close of business on August
15, 2000 as the record date (the "Record Date") for the determination of
shareholders entitled to notice of and to vote at the Meeting and any
adjournment thereof. Only holders of record of shares at the close of business
on the Record Date are entitled to notice of and to vote at the Meeting and any
adjournment thereof. At the close of business on the Record Date, there were
77,253.44 shares outstanding of the Class IV shares of the U.S. Treasury Money
Market Portfolio.
BACKGROUND INFORMATION
First Funds is an open-end investment company consisting of nine separate
investment portfolios. Shares of the Funds are sold directly by First Funds, or
through an investment professional. The investment adviser for the Portfolio is
First Tennessee Bank, N.A. ("First Tennessee"), whose address is 530 Oak Court
Drive, Memphis, TN 38117.
The Trust has entered into an Amended and Restated General Distribution
Agreement (the "Agreement") on behalf of each Portfolio of the Trust with ALPS
Mutual Funds Services, Inc. (the "Distributor") under which the Distributor uses
all reasonable efforts, consistent with its other business interests, to secure
purchasers of the Portfolio's shares including the Class IV Shares.
As compensation for these services provided and the expenses incurred by the
Distributor pursuant to the Agreement, the board of Trustees of the Trust in May
of 1999 adopted a Distribution Plan whereby the Class IV Shares of the Portfolio
pays to the Distributor a (12b-1) fee at the annual rate
2
<PAGE> 7
of up to (and including) .65% of the Class IV shares average daily net assets
throughout the month. The Board of Trustees has also adopted a Shareholder
Services Plan for Class IV shares of other First Funds Portfolios. Pursuant to
this Shareholder Services Plan, Class IV shares of those First Funds Portfolio
may make periodic payments to parties for account maintenance services
including, but not limited to, maintaining account records for each shareholder
who beneficially owns Class IV shares of the Portfolio, answering questions and
handling correspondence from shareholders about their accounts and providing
account level support for all transactions. Class IV shares of the U.S. Treasury
Money Market Portfolio are not currently included in the Shareholder Services
Plan for Class IV shares.
PROPOSAL
To adopt the amendments to the Distribution Plan for the First Funds Class IV
shares and to the Shareholder Services Plan for the First Funds Class IV shares,
and to transact such other business as may properly come before the meeting or
any adjournment thereof.
The following table reflects the current expenses related to the Portfolio and
the proposed changes to these expenses discussed herein:
<TABLE>
<CAPTION>
ANNUAL PORTFOLIO OPERATING EXPENSES
(expenses that are deducted from portfolio assets) CURRENT PROPOSED
-------------------------------------------------- ---------- ----------
<S> <C> <C>
Management Fees*/ .25%
Distribution (12b-1) Fees .65% .50%
Other Expenses**/ .41%***/ .66%
---------- ----------
Total Portfolio Operating Expenses 1.31% 1.41%
---------- ----------
</TABLE>
*/ First Tennessee, as Investment Adviser, has voluntarily agreed to waive a
portion of the investment management fee that it is entitled to receive under
the Investment Advisory and Management Agreement to the extent such fee exceeds
.08% of the Portfolio's average net assets.
**/ First Tennessee, as Co-administrator, has voluntarily agreed to waive its
entire co-administration fee (.05%) that it is entitled to receive under the
Co-administration Agreement. ALPS, as administrator, has voluntarily agreed to
waive its entire administration fee (.075%) that it is entitled to receive under
the Administration Agreement.
***/ Because Class II and Class IV shares are not operational at the date of the
prospectus, this amount is estimated.
DESCRIPTION OF THE PROPOSAL
To adopt an amendment to the Distribution Plan for the First Funds Class IV
shares to reflect a .50% distribution (12b-1) fee for the Portfolio, to adopt an
amendment to the Shareholder Services Plan for the First Funds Class IV shares
to reflect a .25% shareholder services fee for the Portfolio, and to transact
such other business as may properly come before the meeting or any adjournment
thereof. Copies of the revised Distribution Plan and the Shareholder Services
Plan for the First Funds Class IV shares are attached to this proxy statement as
Exhibit A and Exhibit B.
3
<PAGE> 8
PROPOSAL: BOARD OF DIRECTORS' EVALUATION
At a meeting held on June 6, 2000, the Board of Trustees of First Funds (the
"Board"), including a majority of the Independent Trustees, unanimously
approved, subject to shareholder approval, the proposed amendments to the First
Funds Class IV Distribution Plan and the First Funds Class IV Shareholder
Services Plan. In making its approval, the Board determined the implementation
of these changes to the fee structure to the Class IV shares of the Portfolio
should assist in selling shares and thus increase the Portfolio's asset base.
This may prove beneficial to the Portfolio and its shareholders by spreading
fixed costs over a larger asset base and making additional monies available for
investing. Positive cash flow affords Portfolio management greater ability to
diversify investments and minimizes the need to sell securities to meet
redemptions.
The Board recognizes that a higher level of Portfolio assets benefits First
Tennessee by increasing its management fee revenues. The Board believes that
revenues received by First Tennessee contribute to its continuing ability to
attract and retain a high caliber of investment and other personnel and to
develop and implement new systems for providing services and information to
shareholders. The Board considers this to be an important benefit to the
Portfolio.
After careful consideration and a thorough review of the proposal, the Board
unanimously determined that it was fair and reasonable and in the best interest
of the shareholders of the Class IV shares of the Portfolio to approve the
amendments to the Distribution Plan for the First Funds Class IV shares and the
Shareholder Services Plans for the First Funds Class IV shares.
PROPOSAL: RECOMMENDATION AND REQUIRED VOTE
At the Meeting, the Class IV shareholders of the Portfolio will vote on the
Proposal. The affirmative vote of the holders of a majority of the outstanding
shares of the Portfolio is required to approve this proposal. "Majority" for
this purpose under the 1940 Act means the lesser of (i) 67% of the shares
represented at the Meeting if more than 50% of such outstanding shares are
represented, or (ii) more than 50% of such outstanding shares. Where a
shareholder abstains, the shares represented will be counted as present and
entitled to vote on the matter for purposes of determining a quorum, but the
abstention will have the effect of a negative vote on the proposal.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF THE CLASS IV SHARES OF
THE PORTFOLIO APPROVE THE PROPOSED cHANGE IN THE cLASS IV FEE STRUCTURE.
OFFICERS AND TRUSTEES OF FIRST FUNDS
The following persons hold the offices indicated with First Funds:
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<PAGE> 9
<TABLE>
<CAPTION>
Position(s)
Name, Address, Held with
And Age First Funds Principal Occupation During Past 5 Years
-------------- ----------- ----------------------------------------
<S> <C> <C>
THOMAS M. BATCHELOR, Trustee Mr. Batchelor currently serves as director of two non-profit
Age 78, organizations, MTM Foundation and the White Foundation. Mr. Batchelor
4325 Woodcrest Drive, also operated a management consultant business on a limited basis, and
Memphis, TN retired after owning and operating two General Insurance Companies
agencies for over thirty years. He was one of the founders and served as
a director of what was First American State Bank in Memphis, TN. He
formerly served as Chairman, Memphis Union Mission, TN, a charity and a
non-profit foundation.
JOHN A. DECELL, Trustee Mr. DeCell is the proprietor of DeCell & Company (real estate and
Age 64, business consulting), and President of Capital Advisers, Inc. (real
5178 Wheelis Dr., Suite 2, estate consulting and asset management).
Memphis, TN
L. R. JALENAK, JR., Trustee Mr. Jalenak was Chairman of the Board (1990 -1993 (retired)), Cleo Inc.
Age 69, (manufacturer of gift-wrapping products), a Gibson Greetings Company.
530 Oak Court Drive Mr. Jalenak is also a Director of Perrigo Company (1988 - present),
Suite 250 Lufkin Industries (1990 - present), Dyersburg Corporation (1990 -
Memphis, TN 38117 present), was President and CEO (until 1990) of Cleo Inc., and was a
Director of Gibson Greetings, Inc. from 1983 to 1991. Mr. Jalenak is
currently Director of Party City Corporation and has been in this
position since the beginning of 2000.
LARRY W. PAPASAN, Trustee Mr. Papasan is President of Smith & Nephew, Inc. (orthopedic division).
Age 59, Mr. Papasan is a former Director of First American National Bank of
5114 Winton Place, Memphis and The West Tennessee Board of First American National Bank
Memphis, TN (1988 - 1991) and was President of Memphis Light Gas and Water Division
of the City of Memphis (1984 - 1991). Mr. Papasan is also a member of
the Board of the Plough Foundation, a non-profit trust.
RICHARD C. RANTZOW, Trustee Mr. Rantzow was Vice President/Director, Ron Miller Associates, Inc.
Age 61, (manufacturer). Mr. Rantzow was Managing Partner (until 1990) of the
8866 Darby Dan Lane Memphis office of Ernst & Young.
Germantown, TN 38138
</TABLE>
5
<PAGE> 10
<TABLE>
<CAPTION>
Position(s)
Name, Address, Held with
And Age First Funds Principal Occupation During Past 5 Years
-------------- ----------- ----------------------------------------
<S> <C> <C>
GEORGE LEWIS, Trustee Mr. Lewis is currently a director of Methodist Home Care and Methodist
Age 61, Extended Care Hospital, a non-profit health care company. From 1976
7133 Bell Manor Cove, until October 1999, Mr. Lewis was Executive Vice President and Manager
Germantown, TN 38138 of Money Management Group of First Tennessee Bank. During that time he
was also a director of certain First Tennessee affiliates including,
Hickory Venture Capital Corporation, a venture capital company, and
First Tennessee Brokerage, a broker/dealer. He was also a director for
Martin & Company and Highland Capital Management Corp., both investment
advisors and affiliates of First Tennessee.
JEREMY O. MAY, Treasurer Mr. May is a Vice President and Director of Mutual Fund Operations at
Age 30, ALPS Mutual Funds Services, Inc. (ALPS), the Administrator and
370 17th Street, Denver, CO Distributor. Prior to joining ALPS, Mr. May was an auditor with Deloitte
& Touche LLP in their Denver office.
RUSSELL C. BURK, Secretary Mr. Burk is General Counsel of ALPS. Prior to joining ALPS, Mr. Burk
Age 42, served as Securities Counsel for Security Life of Denver, a wholly-owned
370 17th Street, Denver CO subsidiary of ING.
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the best knowledge of First Funds, the names and addresses of the
shareholders who own or have voting power with respect to 5% or more of the
outstanding shares of the Portfolio as of the Record Date are set forth below:
<TABLE>
<CAPTION>
Amount and
Title Nature of % of
of Name and Address Beneficial Class Total Outstanding
Class of Beneficial Owner Ownership Held in Class
----- ------------------- ---------- ---- -----------------
<S> <C> <C> <C> <C>
IV ALPS Mutual Funds Services 77,150.03 99.87 77,253.44
</TABLE>
6
<PAGE> 11
<TABLE>
<CAPTION>
Amount and
Title Nature of % of
of Name and Address Beneficial Class Total Outstanding
Class of Beneficial Owner Ownership Held in Class
----- ------------------- ---------- ---- -----------------
<S> <C> <C> <C> <C>
----- ------------------- ---------- ---- -----------------
----- ------------------- ---------- ---- -----------------
----- ------------------- ---------- ---- -----------------
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
As of the Record Date, the officers and trustees of First Funds owned less than
1% of the outstanding Class IV shares of the Portfolio.
ADDITIONAL INFORMATION
The Portfolio pays no commissions to any affiliated broker.
DISTRIBUTOR AND PRINCIPAL UNDERWRITER. ALPS Mutual Funds Services, Inc. ("ALPS")
acts as the distributor and the principal underwriter for the Portfolio. ALPS is
a Colorado corporation, and is registered with the SEC as a broker-dealer and is
a member of the NASD. The principal executive offices of ALPS are located at 370
17th Street, Suite 3100, Denver, Colorado 80202.
ADMINISTRATOR. ALPS acts as administrator to First Funds. Pursuant to an
Administration Agreement dated August 19, 1998, ALPS provides certain
administrative services to First Funds, such as calculating each portfolio's
standardized performance information, preparing annual and semiannual reports to
shareholders and the SEC, monitoring compliance and performing other
administrative duties. First Tennessee also acts as co-administrator to First
Funds.
SHAREHOLDER PROPOSALS
First Funds must receive proposals of shareholders that are intended to be
presented at a future shareholder meeting a reasonable time prior to First
Funds' solicitation of proxies relating to such future meeting. Timely
submission of such proposals does not guarantee their inclusion. First Funds is
a Massachusetts business trust, and as such it is not required to hold, and has
no intention of holding, annual meetings, although it may hold special
shareholder meetings.
7
<PAGE> 12
OTHER BUSINESS
The Board of Trustees of First Funds does not know of any other matters to be
considered at the Meeting other than those referred to above. If any other
matters are properly presented to the Meeting, it is the intention of proxy
holders to vote such proxies on such matters in accordance with their judgment.
By Order of the Board of Trustees
Russell C. Burk
Secretary
September 15, 2000
Denver, Colorado
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<PAGE> 13
EXHIBIT A
DISTRIBUTION PLAN
FIRST FUNDS: CLASS IV
THIS Distribution Plan (the "Distribution Plan"), made as of June 6, 2000,
is the plan of First Funds (the "Trust"), a business trust organized and
existing under the laws of the Commonwealth of Massachusetts and registered as
an open-end investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), issuing separate series of shares designated as
follows: Capital Appreciation Portfolio, Growth & Income Portfolio, Tennessee
Tax-Free Portfolio, U.S. Treasury Money Market Portfolio, and any future series
established and designated by the Board of Trustees issuing Class IV shares
(each a "Portfolio").
1. This Distribution Plan, when effective in accordance with its terms, shall
be the written plan contemplated by Securities and Exchange Commission Rule
12b-1 under the 1940 Act, for shares of beneficial interest of Class IV
("Class IV Shares") of each Portfolio set forth above.
2. The Trust has entered into an Amended and Restated General Distribution
Agreement on behalf of each Portfolio with ALPS Mutual Funds Services, Inc.
(the "Distributor") under which the Distributor uses all reasonable
efforts, consistent with its other business interests, to secure purchasers
of each Portfolio's shares including the Class IV Shares. Such efforts may
include, but neither are required to include nor are limited to, the
following:
(a) formulation and implementation of marketing and promotional
activities, such as mail promotions and television, radio, newspaper,
magazine and other mass media advertising;
(b) preparation, printing and distribution of sales literature;
(c) preparation, printing and distribution of prospectuses of each
Portfolio and reports to recipients other than existing shareholders
of each Portfolio;
(d) obtaining such information, analyses and reports with respect to
marketing and promotional activities as the Distributor may from time
to time deem advisable;
(e) making payments to securities dealers and others engaged in the sale
of Class IV Shares; and
(f) providing training, marketing and support to such dealers and others
with respect to the sale of Class IV Shares.
<PAGE> 14
3. In consideration for the services provided and the expenses incurred by the
Distributor pursuant to the Amended and Restated General Distribution
Agreement, Class IV Shares of the Capital Appreciation Portfolio and the
Growth & Income Portfolio shall pay to the Distributor a fee at the annual
rate of up to (and including) .75% of such Class' average daily net assets
throughout the month, Class IV Shares of the U.S. Treasury Money Market
Portfolio shall pay to the Distributor a fee at the annual rate of up to
(and including) .50% of such Class' average daily net assets throughout the
month, and Class IV Shares of the Tennessee Tax-Free Portfolio shall pay to
the Distributor a fee at the annual rate of up to (and including) .60% of
such Class' average daily net assets throughout the month, or such lesser
amount as may be established from time to time by the Trustees of the Trust
by resolution, as specified in this paragraph. Such fee shall be computed
daily and paid monthly. The determination of daily net assets for each
Portfolio shall be made at the close of business each day throughout the
month and computed in the manner specified in each Portfolio's then current
Prospectus for the determination of the net asset value of Class IV Shares
of such Portfolio, but shall exclude assets attributable to any other Class
of each Portfolio. The Distributor may use all or any portion of the fee
received pursuant to the Distribution Plan to compensate securities dealers
or other persons who have engaged in the sale of Class IV Shares pursuant
to agreements with the Distributor, or to pay any of the expenses
associated with other activities authorized under paragraph 2 hereof.
4. This Distribution Plan will become effective with respect to the Class IV
Share of a Portfolio as of _________________________, 2000, this
Distribution Plan having been approved (a) by a vote of a majority of the
Trustees of the Trust, including a majority of Trustees who are not
"interested persons" of the Trust (as defined in the 1940 Act) and who have
no direct or indirect financial interest in the operation of this
Distribution Plan or in any agreement related to the distribution Plan (the
"Independent Trustees"), cast in person at a meeting called for the purpose
of voting on this Distribution Plan; and (b) by a vote of majority of the
outstanding voting securities (as such term is defined in Section 2(a)(42)
of the 1940 Act) of Class IV of the affected portfolios.
5. During the existence of this Distribution Plan, the Trust will commit the
selection and nomination of those Trustees who are not interested persons
of the Trust to the discretion of such Independent Trustees.
6. This Distribution Plan shall, unless terminated as hereinafter provided,
remain in effect until June 30, 2001 and from year to year thereafter;
provided, however that such continuance is subject to approval annually by
a vote of a majority of the Trustees of the Trust, including a majority of
Independent Trustees, cast in person at a meeting called for the purpose of
voting on this Distribution Plan.
<PAGE> 15
7. This Distribution Plan may be amended with respect to the Class IV Shares
of a Portfolio, at any time by the Board of Trustees, provided that (a) any
amendment to increase materially the maximum fee provided for in paragraph
3 hereof, must be approved by a vote of a majority of the outstanding
voting securities (as such term is defined in Section 2(a)(42) of the 1940
Act) of Class IV of the affected Portfolio, and (b) any material amendment
of this Distribution Plan must be approved in the manner provided in
paragraph 4(a) above.
8. This Distribution Plan may be terminated with respect to the Class IV
Shares of a Portfolio, at any time, without the payment of any penalty, by
vote of a majority of the Independent Trustees or by a vote of a majority
of the outstanding voting securities (as such term is defined in Section
2(a)(42) of the 1940 Act) of Class IV of the affected Portfolio.
9. During the existence of this Distribution Plan, the Trust shall require the
Distributor to provide the Trust, for review by the Trust's Trustees, and
the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily
intended to result in the sale of Class IV shares (making estimates of such
costs where necessary or desirable) and the purposes for which such
expenditures were made.
10. This Distribution Plan does not require the Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of shares of Class IV.
11. In the event that Rule 2830 of the NASD Conduct Rules precludes any
Portfolio of the Trust (or any NASD member) from imposing a sales charge
(as defined in that Section) or any portion thereof, then the Distributor
shall not make payments hereunder from the date that the Portfolio
discontinues or is required to discontinue imposition of some or all of its
sales charges. If the Portfolio resumes imposition of some or all of its
sales charge, the Distributor will receive payments thereunder.
12. Consistent with the limitation of shareholder and Trustee liability as set
forth in the Trust's Declaration of Trust, any obligations assumed by the
Trust, a Portfolio or Class IV thereof pursuant to this Plan and any
agreements related to this Plan shall be limited in all cases to the
proportionate ownership of Class IV of the affected Portfolio and its
assets, and shall not constitute obligations of any shareholder of any
other Class of the affected Portfolio or other Portfolios of the Trust or
of any Trustee.
13. If any provision of the Distribution Plan shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the
Distribution Plan shall not be affected thereby.
<PAGE> 16
EXHIBIT B
SHAREHOLDERS SERVICE PLAN
FIRST FUNDS: CLASS IV
1. This Shareholder Services Plan (the "Plan") is the Shareholder Services
Plan of Class IV of each series of First Funds (the "Trust"), a
Massachusetts business trust, registered as an open-end investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"),
issuing separate series of shares designated as follows: Capital
Appreciation Portfolio, Growth & Income Portfolio, Tennessee Tax-Free
Portfolio, U.S. Treasury Money Market Portfolio, and any future series
established and designated by the Board of Trustees issuing Class IV shares
(each a "Portfolio").
2. The Trust has entered into a separate General Distribution Agreement with
ALPS Mutual Funds Services, Inc. (the "Distributor") under which the
Distributor uses all reasonable efforts, consistent with its other business
interests to secure purchasers for each Portfolio's share of beneficial
interest. The Trust has entered into an Investment Advisory and Management
Contract with First Tennessee Bank National Association (the "Investment
Adviser"). The Trust has further entered into custodial and transfer agency
agreements with State Street Bank and Trust Company and its affiliate
Boston Financial Data Services, Inc. Payments under this Plan shall not be
made for advisory, distribution, custodial or transfer agency services.
3. Each Portfolio's shares of beneficial interest are divided into classes,
including a class of shares designated Class IV ("Class IV Shares"). Class
IV Shares are subject to this Plan and the eligible investors in Class IV
Shares will be as described in the current prospectus for Class IV, as
amended or supplemented from time to time.
4. Each Portfolio may make periodic payments to parties (each a "Shareholder
Servicing Agent") that have entered into a Shareholder Services Contract in
the form attached hereto with the Trust in respect of Class IV Shares at an
annualized rate of up to (and including) .25% of Class IV of the Capital
Appreciation Portfolio's, Growth & Income Portfolio's, and U.S. Treasury
Money Market Portfolio's, and .10% of Class IV of the Tennessee Tax-Free
Portfolio's average net assets attributable to the Shareholder Servicing
Agent. The personal and account maintenance services to be provided under
this Plan by each Shareholder Servicing Agent, may include, but are not
limited to, maintaining account records for each shareholder who
beneficially owns class IV Shares; answering questions and handling
correspondence from shareholders about their accounts; handling the
transmission of funds representing the purchase service or redemption
proceeds; issuing confirmations for transactions in Class IV Shares by
shareholders; assisting customers in completing application forms;
communicating with the transfer agent; and providing account maintenance
and account level support for all transactions. ALPS may act as the Trust's
<PAGE> 17
agent for transmitting or arranging for transmission of fees to Shareholder
Servicing Agents under the Shareholder Services Contract.
5. The Plan became effective ___________, 2000, having been approved by a vote
of a majority of the Trustees of the Trust, including a majority of
Trustees who are not interested persons of the Trust (as defined in the
1940 Act) and who have a direct or indirect financial interest in the
operation of this Plan or in any agreements related to this Plan (the
"Independent Trustee'), cast in person at a meeting called for the purpose
of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until June 30, 2001, and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Trust,
including a majority of the Independent Trustees, case in person at a
meeting called for the purpose of voting on this Plan.
7. The Plan may be amended with respect to Class IV Shares of a Portfolio, at
any time by the Board of Trustees, provided that any material amendment of
this Plan shall be effective only upon approval in the manner provided in
paragraph 5 above.
8. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees.
9. Consistent with the limitation of shareholder and Trustee liability as set
forth in the Trust's Declaration of Trust, any obligations assumed by the
Trust, a Portfolio or Class IV thereof pursuant to this Plan and any
agreements related to this Plan shall be limited in all cases to the
proportionate ownership of Class IV of the affected Portfolio and its
assets, and shall not constitute obligations of any shareholder of any
other Class of the affected Portfolio or other Portfolios of the Trust or
of any Trustee.
10. During the existence of this Plan, the Trust shall require ALPS as the
Administrator to provide the Trust, for review by the Trust's Trustees, and
the Trustees shall review, at least quarterly, a written report of the
amounts expended under the Plan and the purposes for which such
expenditures were made.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
<PAGE> 18
THIS SOLICITATION IS MADE ON BEHALF OF THE TRUSTEES OF FIRST FUNDS.
The undersigned appoints Russell C. Burk, Secretary and Jeremy O. May,
Treasurer, and each of them, with full power of substitution, as attorneys and
proxies of the undersigned, and does thereby request that the votes attributable
to the undersigned be cast at the Special Meeting of Shareholders of the U.S.
Treasury Money Market Portfolio (the "Portfolio") of First Funds ("First
Funds"), to be held at 10:00 a.m., Mountain Time, on October 2, 2000, at the
principal offices of First Funds, 370 Seventeenth Street, Suite 3100, Denver,
Colorado, 80202, and at any adjournment thereof.
--------------------------------------------
THE SHARES REPRESENTED BY THIS VOTING INSTRUCTION/PROXY WILL BE VOTED AS
DIRECTED BELOW, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR THE PROPOSAL
BELOW. THE BOARD OF TRUSTEES OF FIRST FUNDS RECOMMENDS A VOTE FOR THE PROPOSAL.
PLEASE VOTE BY CHECKING YOUR RESPONSE.
FOR APPROVAL BY SHAREHOLDERS OF THE CLASS IV SHARES OF THE U.S. TREASURY MONEY
MARKET PORTFOLIO:
Adoption of proposed amendments to the FOR [ ] AGAINST [ ] ABSTAIN [ ]
Distribution Plan and Shareholder Services
Plan for the First Funds Class IV shares
[LABEL AFFIXED HERE]
ACCOUNT NUMBER: ___________
TOTAL PORTFOLIO SHARES VOTED BY THE UNDERSIGNED: ________
<PAGE> 19
PLEASE VOTE, DATE, SIGN, AND RETURN THIS NOTE: THE UNDERSIGNED
FORM IN THE ENCLOSED SELF-ADDRESSED HEREBY ACKNOWLEDGES
ENVELOPE. ALL ACCOUNT OWNERS MUST RECEIPT OF THE NOTICE OF ANY
SIGN THIS FORM. PLEASE INDICATE TITLE IF PROXY HERETOFORE GIVEN
SIGNING IN AN OFFICIAL CAPACITY. WITH RESPECT TO THE VOTES
COVERED BY THIS PROXY.
Dated:
---------------------------------------- ------------------------
Signature
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Signature If Jointly Held or Title If Required
