<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
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] 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 identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 3
FIRST FUNDS
CAPITAL APPRECIATION PORTFOLIO
370 17TH STREET, SUITE 3100
DENVER, COLORADO 80202
May 1, 2000
Dear Shareholder:
I am writing to request your approval of the proposal included in the
attached Proxy Statement. The Proposal is for a change in the co-investment
adviser for the Capital Appreciation Portfolio. We believe that this change is
necessary in order for the Portfolio to maintain and enhance the resources
needed to compete effectively with other funds in its peer group.
In order to consider this proposal, we have scheduled a Special Meeting
of the Shareholders of the Capital Appreciation Portfolio to be held on May 17,
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 Capital Appreciation
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
President
<PAGE> 4
FIRST FUNDS
CAPITAL APPRECIATION PORTFOLIO
370 17TH STREET, SUITE 3100
DENVER, COLORADO 80202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, MAY 17, 2000
Notice is hereby given that a special meeting of the shareholders of the Capital
Appreciation Portfolio (the "Portfolio") of First Funds, a Massachusetts
business trust ("First Funds"), will be held at 10:00 a.m., Denver time, at the
offices of First Funds, 370 17th Street, Suite 3100, Denver, Colorado 80202, on
May 17, 2000, to vote on the following proposal:
PROPOSAL: To adopt an Investment Advisory and Management Agreement for the
Portfolio between First Funds and Delaware Management Company, 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 April
24, 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
May 1, 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
CAPITAL APPRECIATION PORTFOLIO
370 17TH STREET, SUITE 3100
DENVER, COLORADO 80202
(800) 442-1941
PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, MAY 17, 2000
This Proxy Statement (the "Statement") is being furnished by First Funds, a
Massachusetts business trust ("First Funds") to shareholders of all classes of
shares of the Capital Appreciation 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 May 17, 2000, at 10:00 a.m., Denver 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 May 1, 2000.
As more fully described below, the Meeting has been called for the following
purpose:
To approve an Investment Advisory and Management Agreement for the
Portfolio between First Funds and Delaware Management Company, 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 May 1, 2000, primarily
by mail, but proxy solicitations also may be made by telephone, fax or e-mail.
The costs of the proxy solicitation and expenses incurred in connection with the
preparation of this Statement and its enclosures will be paid by the Portfolio.
The financial statements of First Funds for the fiscal year ended June 30, 1999,
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).
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<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 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 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 April
24, 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
3,488,260.773 shares outstanding of the Capital Appreciation Portfolio.
BACKGROUND INFORMATION
First Funds is an open-end investment company consisting of nine separate
investment portfolios (the "Funds"). Shares of the Funds are sold directly by
First Funds, or through an investment professional.
This Meeting has been called to consider a proposal to adopt an Investment
Advisory and Management Agreement for the Portfolio between First Funds and
Delaware Management Company ("DMC"), and to transact such other business as may
properly come before the meeting or any adjournment thereof.
The services to be performed by DMC under the proposed Investment Advisory and
Management Agreement (the "DMC Contract") were previously provided to the
Portfolio by
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<PAGE> 7
Investment Advisers, Inc. ("IAI"). Because the First Funds Board of Trustees
believes that DMC's long-term performance record and investment management style
are more in keeping with the investment objective of the Portfolio and the
long-term interest of shareholders, it voted on March 1, 2000 to terminate the
existing Investment Advisory and Management Agreement with IAI (the "IAI
Contract"), effective June 1, 2000. The Board proposes that DMC replace IAI as
co-investment adviser of the Portfolio, and the Board is asking shareholders to
approve the DMC Contract at the upcoming Meeting.
PROPOSAL
To adopt the DMC Contract and to transact such other business as may properly
come before the meeting or any adjournment thereof.
INFORMATION ABOUT THE ADVISER AND INVESTMENT ADVISORY AGREEMENT
The Portfolio is co-advised by First Tennessee Bank National Association ("First
Tennessee"), located at 530 Oak Court Drive, Suite 200, Memphis, TN 38117. First
Tennessee was chartered in 1864, and is a national banking association. First
Tennessee is the principal banking subsidiary of First Tennessee National
Corporation, a financial holding company incorporated in 1968 and subject to the
supervision of the Board of Governors of the Federal Reserve System.
The Portfolio is also currently managed by IAI. Under the IAI Contract, IAI has
been responsible for the day-to-day investment and reinvestment of the
Portfolio's assets in accordance with the Portfolio's investment objectives and
policies. The Board of Trustees of First Funds has decided to terminate the IAI
Contract. The Board is seeking shareholder approval for First Funds to retain a
new investment adviser for the Portfolio to handle the responsibilities that
were handled by IAI. Under the DMC Contract, DMC, whose address is One Commerce
Square, Philadelphia, PA 19103, will start managing the Portfolio on June 1,
2000.
The IAI Contract was approved on August 29, 1997 for the Portfolio by the
initial shareholder and executed on the same day. Under the terms of the IAI
Contract, IAI renders investment management services with respect to the
Portfolio. Such services include the day-to-day investment and reinvestment of
the Portfolio's assets in accordance with the Portfolio's investment objectives
and policies. For these services, IAI is entitled to receive from the Portfolio
a monthly management fee at the annual rate of .70% on the first $50 million of
the Portfolio's average net assets and .65% on average daily net assets of the
Portfolio in excess of $50 million. For the fiscal year ended June 30, 1999, the
Portfolio paid $233,170 as investment advisory fees to IAI. No other fees were
paid to IAI.
Under the IAI Contract, the Board of Trustees of First Funds has the ability to
terminate the IAI Contract by giving IAI sixty days' written notice. On March 1,
2000 the Board of Trustees voted to terminate the contract with IAI. The Board
gave written termination notice to IAI on March
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<PAGE> 8
30, 2000, and IAI's last day of service as co-investment adviser will be May 31,
2000. Accordingly, a new co-investment adviser for the Portfolio must be
identified.
DELAWARE MANAGEMENT COMPANY
The Board proposes that DMC replace IAI as co-investment adviser for the
Portfolio. DMC manages other mutual funds with investment objectives similar to
those of the Portfolio. For information on these other funds, their sizes, and
DMC's compensation arrangements with them, see Appendix A.
DMC is organized as a series of Delaware Management Business Trust ("DMBT"), a
business trust organized under the laws of the State of Delaware. The principal
executive officers and trustees of DMBT and their addresses and principal
occupations are set forth below:
<TABLE>
<CAPTION>
Name, Address*, and Title Principal Occupation
- -------------------------------------------- -----------------------------------------------------------------------
<S> <C>
Charles E. Haldeman, Jr. President and CEO, Lincoln National Investment Companies, Inc.
Chief Executive Officer
- -------------------------------------------- -----------------------------------------------------------------------
David K. Downes President, Delaware Management Company
Trustee, Executive Vice President, Chief
Operating Officer, Chief Financial Officer
- -------------------------------------------- -----------------------------------------------------------------------
Richard G. Unruh, Jr. Executive Vice President and Chief Investment Officer, Delaware
Trustee, Executive Vice President Management Company
- -------------------------------------------- -----------------------------------------------------------------------
Richard J. Flannery Executive Vice President and General Counsel, Delaware Management
Trustee, Executive Vice President Company
- -------------------------------------------- -----------------------------------------------------------------------
John B. Fields Senior Vice President and Senior Portfolio Manager, Delaware
Trustee Management Company
- -------------------------------------------- -----------------------------------------------------------------------
</TABLE>
*The address for all of the above-named trustees and officers is: Delaware
Investments, One Commerce Square, Philadelphia, Pennsylvania, 19103.
The Portfolio Managers who will be responsible for the day-to-day management of
the Fund are set forth below:
GERALD S. FREY, VICE PRESIDENT/SENIOR PORTFOLIO MANAGER. Mr. Frey has 22 years'
experience in the money management business and holds a BA in Economics from
Bloomsburg University and attended Wilkes College and New York University. Prior
to joining Delaware Investments
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<PAGE> 9
in 1996, he was a Senior Director with Morgan Grenfell Capital Management in New
York. Mr. Frey has been senior portfolio manager for the Delaware Trend Fund
since March 1997 and was co-manager from June 1996 to March 1997.
MARSHALL T. BASSETT, VICE PRESIDENT. Mr. Bassett joined Delaware Investments in
1997. In his most recent position, he served as Vice President in Morgan Stanley
Asset Management's Emerging Growth Group, where he analyzed small growth
companies. Prior to that, he was a trust officer at Sovran Bank and Trust
Company. He received his bachelor's degree and MBA from Duke University.
JOHN A. HEFFERN, VICE PRESIDENT. Mr. Heffern holds a bachelor's degree and an
MBA from the University of North Carolina at Chapel Hill. He joined Delaware
Investments in 1997. Previously, he was a Senior Vice President, Equity Research
at NatWest Securities Corporation's Specialty Finance Services unit and a
Principal and Senior Regional Bank Analyst at Alex, Brown & Sons.
JEFFREY W. HYNOSKI, VICE PRESIDENT. Mr. Hynoski joined Delaware Investments in
1998. Previously he served as a Vice President at Bessemer Trust Company in the
mid and large capitalization growth group. Prior to that, Mr. Hynoski held
positions at Lord Abbett & Co. and Cowen Asset Management. Mr. Hynoski holds a
BS in Finance from the University of Delaware and an MBA from Pace University.
STEPHAN T. LAMPE, VICE PRESIDENT. Mr. Lampe earned a bachelor's degree and an
MBA at the University of Pennsylvania's Wharton School. He joined Delaware
Investments in 1995 and provides analytical services for small and
mid-capitalization stocks. He previously served as a manager at Price
Waterhouse. Mr. Lampe is a Certified Public Accountant.
LORI P. WACHS, VICE PRESIDENT. Ms. Wachs joined Delaware Investments in 1992
from Goldman Sachs, where she was an equity analyst for two years. She is a
graduate of the University of Pennsylvania's Wharton School, where she majored
in Finance and Oriental Studies.
DMC and DMBT are part of the Delaware Investments family of companies, which are
located at 2005 Market Street, Philadelphia, PA 19103. They are indirect,
wholly-owned subsidiaries of Lincoln National Corporation, (through a holding
company, Lincoln National Investment Companies, Inc.), Centre Square, West
Tower, 1500 Market St., Suite 3900, Philadelphia, PA 19102-2112 ("LNC"). LNC is
a publicly-owned company whose shares are traded on the New York Stock Exchange.
No officer or trustee of First Funds is an officer, employee, director or
shareholder of DMC. No officer or trustee of First Funds owns any securities or
has any other material direct or indirect
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<PAGE> 10
interest in DMC or in any other company controlling, controlled by or under
common control with it. Since July 1, 1998, no officer or trustee of First Funds
has bought or sold any securities of DMC, its parents or its subsidiaries.
Since July 1, 1998, no trustee of First Funds has had any material interest,
either directly or indirectly, in any transaction to which DMC, its parents or
subsidiaries is to be a party. No trustee of First Funds has any direct or
indirect material interest in any such proposed transaction.
The Board of Trustees knows of no financial condition of DMC that would be
likely to impair its financial ability to fulfill its commitment to the
Portfolio under the proposed contract.
DESCRIPTION OF THE PROPOSAL
The Board of Trustees is proposing that shareholders ratify a contract between
First Funds, acting on behalf of the Portfolio, and DMC. The terms of the
proposed DMC Contract are substantially similar to the terms of the IAI
Contract. The DMC Contract is attached to this proxy statement as Appendix B.
There will be no change in advisory fees paid by the Portfolio under the DMC
Contract.
Under the DMC Contract, DMC will provide investment management services with
respect to the Portfolio. Such services include the day-to-day investment and
reinvestment of the Portfolio's assets in accordance with the Portfolio's
investment objectives and policies.
CO-INVESTMENT ADVISORY SERVICES. Under the DMC Contract, DMC will assume
day-to-day management of the Portfolio, subject to the supervision of First
Tennessee as co-investment adviser. First Tennessee will remain as the
Portfolio's co-investment adviser, and will be responsible for monitoring and
evaluating DMC.
The DMC Contract provides that DMC will:
o provide investment research and credit analysis concerning the Portfolio's
investments;
o conduct a continual program of investment of the Portfolio's assets;
o place orders for all purchases and sales of the investments made for the
Portfolio; and
o maintain the books and records required in connection with its duties.
In addition, DMC will keep First Tennessee informed of developments materially
affecting First Funds or the Portfolio. Except for instructions or advice given
to DMC by First Tennessee, First Tennessee will not be responsible or liable for
the investment merits of any decision by DMC to purchase, hold or sell a
security for the Portfolio. DMC will furnish First Tennessee and the Trustees
with such reports as may reasonably be requested. DMC will be permitted to
render
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<PAGE> 11
services to other parties so long as its services under the proposed contract
are not impaired thereby.
PORTFOLIO TRANSACTIONS. Although DMC's co-investment advisory activities will be
subject to general oversight by the Trustees of First Funds and First Tennessee,
selection of specific securities for the Portfolio will be made by DMC. DMC will
be authorized to place orders pursuant to its investment determination for the
Portfolio either directly with an issuer or with any broker-dealer. At all
times, DMC will be required to attempt to obtain the best price and the most
favorable execution of its orders. Consistent with that obligation, DMC may pay
higher commissions to broker-dealers that provide research services to the
extent permitted by law. The receipt of research from broker-dealers that
execute transactions on behalf of the Portfolio may be useful to DMC in
rendering investment management services to the Portfolio and/or DMC's other
clients.
FEES. The Portfolio will pay DMC a monthly management fee at the annual rate of
.70% on the first $50 million of the Portfolio's average net assets and .65% on
average daily net assets of the Portfolio in excess of $50 million. The fee will
be calculated as of the close of business on the last business day of each month
and will be payable as soon as practicable thereafter. These fees are the same
as those paid to IAI under the IAI Agreement.
EXPENSES. DMC will only bear expenses expressly provided for under the DMC
Contract. The following expenses will be borne by the Portfolio or First Funds:
(a) Expenses of all audits by independent public accountants;
(b) Expenses of First Tennessee, transfer agent, registrar, dividend disbursing
agent and shareholder recordkeeping services;
(c) Expenses of custodial services including recordkeeping services provided by
the custodian;
(d) Expenses of obtaining quotations for calculating the value of the
Portfolio's net assets;
(e) Salaries and other compensation of any of its executive officers or
employees, if any, who are not officers, directors, stockholders or employees of
DMC, the administrator or the distributor;
(f) Taxes levied against the Portfolio;
(g) Brokerage fees and commissions in connection with the purchase and sale of
securities for the Portfolio;
(h) Costs, including the interest expense, of borrowing money;
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(i) Costs and/or fees incident to Trustees and shareholder meetings of First
Funds and the Portfolio, the preparation and mailings of prospectuses and
reports of the Portfolio to its existing shareholders, the filing of reports
with regulatory bodies, the maintenance of the Portfolio's legal existence, and
the registration of shares with federal and state securities authorities;
(j) Legal fees in connection with the representation of First Funds and/or
Portfolio, including the legal fees related to the registration and continued
qualification of the Portfolio's shares for sale;
(k) Costs of printing any share certificates representing shares of the
Portfolio;
(l) Fees and expenses of Trustees who are not affiliated persons, as defined in
the Investment Company Act of 1940 as amended (the "1940 Act"), of DMC, the
distributor or any of their affiliates; and
(m) Its pro rata portion of the fidelity bond required by Section 17(g) of the
1940 Act, or of other insurance premiums.
LIABILITY. DMC will not be liable for any loss suffered by the Portfolio or the
Trust as the result of any error of judgment or mistake of law in connection
with its performance of the DMC Contract; provided however, DMC shall be liable
to the Portfolio and the Trust for any loss resulting from (i) a breach of
fiduciary duty with respect to the receipt of compensation for services; (ii)
willful misfeasance, bad faith or gross negligence in, or reckless disregard by
the Investment Adviser of, the performance of its obligations or duties under
the DMC Contract; or (iii) any material breach of any of its covenants contained
in the DMC Contract.
TERM. The DMC Contract will remain in effect for two years from the date of its
execution, and will thereafter continue for successive one-year periods if
continuation is specifically approved at least annually by a majority of the
Trustees of First Funds who are not interested persons of First Tennessee, DMC
or the Portfolio, by votes cast in person at a meeting called for that purpose,
and by a vote of the Board of Trustees, or by the vote of a "majority of the
outstanding voting securities" of the Portfolio as defined under the 1940 Act.
TERMINATION. The DMC Contract may be terminated at any time, without penalty, by
vote of the Trustees or by the vote of "a majority of the outstanding voting
securities" of the Portfolio on 60 days' written notice. The DMC Contract may
also be terminated by DMC on 60 days' written notice. The DMC Contract will
terminate automatically in the event of its "assignment" (as defined under the
1940 Act).
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PROPOSAL: BOARD OF DIRECTORS' EVALUATION
At a meeting held on April 10, 2000, the Board of Trustees of First Funds,
including a majority of the Independent Trustees, unanimously approved, subject
to shareholder approval, the proposed DMC Contract. In making its approval, the
Board determined that DMC's long-term performance record with similar funds and
its overall investment management style are more in keeping with the investment
objective of the Portfolio and the long-term interests of the shareholders. The
Board also considered the following factors: (1) The performance of DMC in
managing similar funds compared to other investment advisers; (2) The investment
management style of DMC compared to other investment advisers; (3) The
reasonableness of the fees to be paid to DMC; (4) The experience of DMC's
investment management team; and (5) The potential impact of such a change on the
marketing strategy for the Portfolio.
In connection with its deliberations of the DMC Contract, the Board of Trustees
requested and was provided with information that the Board considered sufficient
to assist in its evaluation. The materials furnished by DMC included information
regarding DMC's investment personnel, investment management capabilities,
philosophy of management and level of overall profitability in connection with
its advisory activities. Information was also provided regarding the fees and
expenses of the Portfolio compared to a group of mutual funds identified by
First Tennessee as the Portfolio's comparison group. The Board considered that
the fees to be paid to DMC under the proposed DMC Contract were comparable to
the fees charged to DMC's other clients with similar accounts. The Board was
also furnished with information showing the investment performance of similar
portfolios managed by DMC. This performance information showed these similar
funds consistently outperformed the Portfolio.
After careful consideration and a thorough review of DMC's level of service,
experience and fees, the Board unanimously determined that it was fair and
reasonable and in the best interest of the Portfolio and its shareholders to
approve the DMC Contract.
PROPOSAL: RECOMMENDATION AND REQUIRED VOTE
At the Meeting, 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 SHAREHOLDERS OF CAPITAL APPRECIATION
PORTFOLIO APPROVE THE PROPOSED DMC CONTRACT.
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<PAGE> 14
OFFICERS AND TRUSTEES OF FIRST FUNDS
The following persons hold the offices indicated with First Funds:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Name, Address, Position(s) Principal Occupation During Past 5 Years
and Age Held with
First Funds
- ---------------------------------------- ---------------- ---------------------------------------------------------------------
<S> <C> <C>
THOMAS M. BATCHELOR, Trustee Mr. Batchelor presently operates a management consultant business
age 78, on a limited basis, retired after owning and operating two General
4325 Woodcrest Drive, Memphis, TN Insurance Companies agencies for over thirty years. He was one of
the founders and served as a director of First American State Bank
in Memphis, TN (now part of United American Bank of Memphis). He currently
serves 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, Memphis, TN estate consulting and asset management).
- ---------------------------------------- ---------------- ---------------------------------------------------------------------
L. R. JALENAK, JR., Trustee Mr. Jalenak was Chairman of the Board (1990 - 1993 (retired)), Cleo
age 69, Inc. (manufacturer of gift-wrapping products), a Gibson Greetings
530 Oak Court Drive Company. Mr. Jalenak is also a Director of Perrigo Company (1988 -
Suite 250 present), Lufkin Industries (1990 - present), Dyersburg Corporation
Memphis, TN 38117 (1990 - 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
age 59, division). Mr. Papasan is a former Director of First American
5114 Winton Place, Memphis, TN National Bank of Memphis and The West Tennessee Board of First
American National Bank (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, President and Mr. Rantzow was Vice President/Director, Ron Miller Associates,
age 61, Trustee Inc. (manufacturer). Mr. Rantzow was Managing Partner (until 1990)
8066 Darby Dan Lane of the Memphis office of Ernst & Young.
Germantown, TN 38138
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Name, Address, Position(s) Principal Occupation During Past 5 Years
and Age Held with
First Funds
- ---------------------------------------- ---------------- ---------------------------------------------------------------------
<S> <C> <C>
GEORGE LEWIS, Trustee Mr. Lewis is currently a director of Methodist Home Care and
age 61, Methodist Extended Care Hospital, a non-profit health care company.
7133 Bell Manor Cove, From 1976 until October 1999, Mr. Lewis was Executive Vice President
Germantown, TN 38138 and Manager 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
age 30, at 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.
age 41, Burk served as Securities Counsel for Security Life of Denver, a
370 17th Street, Denver, CO wholly-owned 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:
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<PAGE> 16
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
% of
Title of Name and Address Amount and Nature of Class Total Outstanding
Class of Beneficial Owner Beneficial Ownership Held in Class
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
I First Tennessee National Corp. 3,198,438.59 99.72% 3,207,396.68
D/B Pension Plan
Memphis, TN
- --------------------------------------------------------------------------------------------------------------------
II Resources Trust Company for 73,494.214 31.04% 236,785.60
IMS Customers
P.O. Box 3865
Englewood, CO 80155
- --------------------------------------------------------------------------------------------------------------------
III State Street Bank & Trust Co. 4,299.621 10.10% 42,558.18
Custodian For the IRA of FBO Guy
Garret Lansky
2113 Old Lake Pike
Memphis, TN 38119-5519
- --------------------------------------------------------------------------------------------------------------------
III Donald Thomas Moore 2,385.118 5.60% 42,558.18
1356 Hidden Cove Rd
Gallatin, TN 37066
- --------------------------------------------------------------------------------------------------------------------
IV NFSC/FMTC IRA 708.4050 46.60% 1,520.32
FBO Robert E. Downen
405 Tanasi Drive
Rossville, TN 38066-3641
- --------------------------------------------------------------------------------------------------------------------
IV State Street Bank & Trust Co. 252.1430 16.58% 1,520.32
Custodian for the IRA of
John W. Holmes
FBO Bonnie Holmes
Beneficiary
4332 Creekwood Dr., # 2
Memphis, TN 38128-5834
- --------------------------------------------------------------------------------------------------------------------
IV NFSC FEBO # AB4-023370 549.8280 36.17% 1,520.32
Sime Glavan Custodian
Daniel Glavan UTMA TN
128 Brian Cove
Antioch, TN 37013-4340
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE> 17
SECURITY OWNERSHIP OF MANAGEMENT
As of the Record Date, the officers and trustees of First Funds owned less than
1% of the outstanding 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.
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
May 1, 2000
Denver, Colorado
13
<PAGE> 18
APPENDIX A
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
NAME OF FUND SIZE(1) FEE
------------ ----- ---
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Delaware Trend Fund 1,060.61 .75% on the first $500 million,
.70% on the next $500 million,
.65% on the next $1,500 million,
.60% on assets in excess of $2,500
million, all per year based on daily
net assets
- ---------------------------------------- --------------------------------- -----------------------------------------
Trend Series of Delaware 506.33 .75% on the first $500 million,
Group Premium Fund(2) .70% on the next $500 million,
.65% on the next $1,500 million,
.60% on assets in excess of $2,500
million, all per year based on daily
net assets
- ---------------------------------------- --------------------------------- -----------------------------------------
The Small-Cap Growth Equity Portfolio 7.92 .75% per year of average daily net
of Delaware assets
Pooled Trust(3)
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------------------------
(1) In millions, as of December 31, 1999.
(2) Available only through variable insurance products.
(3) Available only to large institutional investors.
<PAGE> 19
APPENDIX B
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT BETWEEN FIRST FUNDS AND DELAWARE
MANAGEMENT COMPANY
<PAGE> 20
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
THIS INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is made as of this
______day of______, 2000, between FIRST FUNDS, a business trust organized under
the laws of the Commonwealth of Massachusetts (the "Trust"), on behalf of its
CAPITAL APPRECIATION PORTFOLIO (the "Portfolio") and Delaware Management
Company, a series of Delaware Management Business Trust, a Delaware business
trust organized under the laws of the State of Delaware ("DMC").
WHEREAS, the Trust has been organized to operate as an investment
company registered under the Investment Company Act of 1940, as amended, (the
"1940 Act") with multiple series of shares (hereinafter referred to as Classes)
having varying preferences, limitations and relative rights, and to invest and
reinvest the assets of the Portfolio in securities pursuant to investment
objectives and policies for the Portfolio;
WHEREAS, the Trust, under separate agreement has engaged the services
of First Tennessee Bank National Association ("Bank") as a co-investment adviser
to provide or perform various investment advisory, monitoring, statistical,
research, portfolio investment adviser selection, and other services with
respect to the Portfolio as set forth more fully in the Bank's Investment
Advisory and Management Agreement, a form of which is attached hereto as Exhibit
A, (Bank hereinafter being referred to as "Co-Adviser" and DMC hereinafter being
referred to as "Investment Adviser"); and
WHEREAS, the Trust desires to obtain the day-to-day portfolio investment
management services, information, advice, assistance and facilities of the
Investment Adviser with respect to the Portfolio as set forth more fully herein;
NOW, THEREFORE, Trust, on behalf of the Portfolio, and Investment
Adviser agree as follows:
1. Employment of the Investment Adviser. The Trust hereby employs the
Investment Adviser to provide investment advice and to manage the investment and
reinvestment of the Portfolio's assets in the manner set forth in Section 2A. of
this Agreement, subject to the direction of the Trustees, for the period, in the
manner, and on the terms hereinafter set forth. The Investment Adviser hereby
accepts such employment and agrees during such period to render the services and
to assume the obligations herein set forth. The Investment Adviser shall for all
purposes herein be deemed to be an independent contractor and shall, except as
expressly provided or authorized (whether herein or otherwise), have no
authority to act or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
<PAGE> 21
2. Obligation of, and Services to be Provided by, the Investment
Adviser. The Investment Adviser undertakes to provide the services hereinafter
set forth and to assume the following obligations:
A. Investment Advisory Services.
(a) The Investment Adviser shall have overall responsibility
for the day-to-day management and investment of the
Portfolio's assets and securities portfolio subject to and
in accordance with the investment objectives and policies
of the Portfolio, and any directions which the Trustees
and officers of the Trust may issue to the Investment
Adviser from time to time, and shall perform the following
services: (i) provide or cause to be provided investment
research and credit analysis concerning the Portfolio's
investments, (ii) conduct or cause to be conducted a
continual program of investment of the Portfolio's assets,
(iii) place or cause to be placed orders for all purchases
and sales of the investments made for the Portfolio, and
(iv) maintain or cause to be maintained the books and
records required in connection with its duties hereunder.
(b) The Investment Adviser shall advise the Trustees of the
Trust regarding overall investment programs and strategies
for the Portfolio, revision of such programs as necessary,
and shall monitor and report periodically to the Trustees
concerning the implementation of such programs and
strategies.
(c) The Investment Adviser, with the prior approval of the
Trustees (and the shareholders to the extent required by
applicable law) as to particular appointments, shall be
permitted to (i) engage one or more persons or companies
("Sub-Advisers"), which may have full investment
discretion to make all determinations with respect to the
investment and reinvestment of all or any portion of the
Portfolio's assets and the purchase and sale of all or any
portion of the Portfolio securities, subject to the terms
and conditions of this Agreement and the written agreement
to be executed with any Sub-Adviser; and (ii) take such
steps as may be necessary to implement such appointment.
(d) The Investment Adviser will coordinate its activities with
those of the Co-Adviser and will provide to the Co-Adviser
such information regarding the Investment Adviser's
investment management activities to the Portfolio as the
Co-Adviser may reasonably request in order to enable the
Co-Adviser to perform its services on behalf of the
Portfolio under the Co-Adviser Agreement.
B. Provision of Information Necessary for Preparation of
Securities Registration Statements, Amendments and Other
Materials.
<PAGE> 22
The Investment Adviser will make available and provide such
financial, accounting, statistical and other information
related to its duties and responsibilities hereunder as
required by the Trustees and necessary for the preparation of
registration statements, reports and other documents required
by federal and state securities laws and such other
information as the Trustees may reasonably request for use by
the Trust and its distributor for the underwriting and
distribution of the Portfolio's shares.
C. Other Obligations and Services.
The Investment Adviser agrees to make available its
officers and employees to the Trustees and officers of the Trust and to the
Co-Adviser for consultation and discussions regarding the investment advisory
activities of the Investment Adviser for the Portfolio. The Investment Adviser
will also coordinate its activities, to the extent necessary, with the
activities of the custodian, transfer agent, distributor, administrator and
pricing agent insofar as their respective activities relate to the duties of the
Investment Adviser hereunder, and will provide to such service providers of the
Portfolio such information as they may reasonably request in order to perform
their services on behalf of the Portfolio.
3 . Covenants by Investment Adviser. The Investment Adviser covenants
with the Trust that with respect to the services provided to the Portfolio it:
(a) will comply with all applicable provisions of the 1940 Act
and applicable rules and regulations of the Securities and
Exchange Commission ("SEC") and will in addition conduct
its activities under this Agreement in accordance with the
investment objective, policies and limitations contained
the current registration statement of the Portfolio;
(b) will not make loans to any person for the purpose of
purchasing or carrying Portfolio shares, or make loans to
the Portfolio or the Trust;
(c) will not purchase shares of the Portfolio or the Trust for
its own investment account;
(d) will maintain all books and records with respect to the
securities transactions of the Portfolio and furnish the
Trustees such periodic and special reports as the Trustees
may request with respect to the Portfolio;
(e) will treat confidentially and as proprietary information
of the Trust all records and other information relative to
the Trust and the Portfolio and prior, present or
potential shareholders (other than any information which
Investment Adviser may have obtained about shareholders
from other business relationships with such
<PAGE> 23
shareholders), and will not use such records and
information for any purpose other than performance of its
responsibilities and duties hereunder (except after prior
notification to and approval in writing by the Trust,
which approval shall not be unreasonably withheld and may
not be withheld and will be deemed granted where the
Investment Adviser may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested
to divulge such information by duly constituted
authorities, when so requested by the Trust or when
otherwise required or permitted by law);
(f) will immediately notify the Trust and the Co-Adviser of
the occurrence of any event which would disqualify
Investment Adviser or any Sub-Adviser from serving as
investment adviser of an investment company; and
(g) will determine that all information furnished to the Trust
or the Co-Adviser by it pursuant to this Agreement is
accurate in all material respects.
4. Transaction Procedures. All investment transactions on behalf of the
Portfolio will be compensated by payment to or delivery by the custodian for the
Portfolio duly appointed by the Trustees of the Trust (the "Custodian"), or such
approved depositories or agents duly appointed by the Trustees and as may be
designated by the Custodian in writing, as custodian for the Portfolio, of all
cash and/or securities due to or from the Portfolio, and the Investment Adviser
shall not have possession or custody thereof or any responsibility or liability
with respect thereto. The Investment Adviser effecting transactions on behalf of
the Portfolio shall advise the Custodian and the Co-Adviser of all investment
orders for the Portfolio placed by it with brokers, dealers, banks and other
parties ("Brokers"). The Trustees shall issue, or cause to be issued, to the
Custodian such instructions as may be appropriate in connection with the
settlement of any transaction initiated by the Investment Adviser. The Portfolio
shall be responsible for all custodial arrangements and the payment of all
custodial charges and fees, and, upon the giving of proper instructions to the
Custodian, the Investment Adviser shall have no responsibility or liability with
respect to custodian arrangements or the acts, omissions or other conduct of the
Custodian, except that it shall be the responsibility of the Investment Adviser
to take appropriate action if the Custodian fails properly to confirm execution
of the instructions to the Investment Adviser and the Co-Adviser in a written
form duly agreed upon by the Custodian, the Investment Adviser and the
Co-Adviser.
5. Execution and Allocation of Portfolio Brokerage. The Investment
Adviser shall place, subject to the limitations contained in this paragraph 5,
on behalf of the Portfolio, orders for the execution of the Portfolio's
securities transactions. The Investment Adviser is authorized by the Trust to
take any action, including the purchase or sale of securities for the account of
the Portfolio, (a) that is not in contravention of (i) any investment
restrictions set forth in the 1940 Act and the rules thereunder; (ii) specific
instructions adopted by the Trustees and communicated to the Investment Adviser;
(iii) the investment objectives, policies and restrictions of the Portfolio as
set forth in the Trust's current registration statement, as amended from time to
time; or (iv) instructions
<PAGE> 24
from the Trustees to the Investment Adviser, and (b) which would not have the
effect of causing the Trust to fail to qualify or to cease to qualify as a
regulated investment company under the Internal Revenue Code of 1986, as
amended, or any succeeding statute.
The Investment Adviser may place orders pursuant to its investment
determinations for the Portfolio either directly with the issuer or with any
Brokers. In placing orders with any Broker, the Investment Adviser will consider
the experience and skill of a Broker's securities traders as well as the
Broker's financial responsibility and administrative efficiency. The Investment
Adviser will attempt to obtain the best price and the most favorable execution
of its orders with any Brokers; however, in so doing, the Investment Adviser may
consider, subject to applicable law, the research, statistical, and related
brokerage services provided or to be provided by such Broker to the Portfolio or
the other accounts for which the Investment Adviser exercises investment
discretion. A commission paid to such Brokers may be higher than that which
another Broker would have charged for effecting the same transaction, provided
that the Investment Adviser determines in good faith that such commission is
reasonable in relation to the value of the brokerage and research services
provided by such Broker when viewed in terms of either the particular
transaction or the overall responsibilities of the Investment Adviser with
respect to the accounts as to which it exercises investment discretion. It is
understood that the Investment Adviser has not adopted a formula for selection
of Brokers for the execution of the Portfolio's investment transactions. On
occasions when the Investment Adviser deems the purchase or sale of a security
to be in the best interest of the Portfolio as well as other clients, the
Investment Adviser, to the extent permitted by applicable laws and regulations,
may, but shall be under no obligation to, aggregate the securities to be sold or
purchased in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of the securities
so purchased or sold, as well as expenses incurred in the transaction, will be
made by the Investment Adviser in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to the Portfolio and to
such other clients.
The Investment Adviser will not execute any Portfolio transactions for
the account of the Portfolio with a Broker which is an "affiliated person" (as
defined in the 1940 Act) of the Trust, the Trust's distributor, the Investment
Adviser or the Co-Adviser except in accordance with applicable laws, rules,
regulations or interpretations thereof and effective exemption orders issued by
the SEC pursuant to the 1940 Act without the prior written approval of the
Trustees. The Trust agrees to provide the Investment Adviser with a list of
brokers and dealers that are "affiliated persons" of the Trust. The Investment
Adviser likewise agrees to furnish to the Trust and the Co-Adviser a list of
Brokers which are "affiliated persons" of the Investment Adviser. In no instance
will Portfolio securities be purchased from or sold to the Trust's principal
distributor, Investment Adviser, Co-Adviser or any affiliate thereof, except to
the extent permitted by an exemption order issued by the SEC or by applicable
law.
The Investment Adviser shall render regular reports to the Trustees and
the Co-Adviser of the total brokerage business placed by it with respect to the
Trust and the manner in which the allocation of such brokerage has been
accomplished.
<PAGE> 25
6. Expenses of the Portfolio. The Portfolio or Trust will pay, or will
enter into arrangements that require third parties to pay, all expenses other
than those expressly assumed by the Investment Adviser herein, which expenses
payable by the Portfolio or Trust shall include:
(a) Expenses of all audits by independent public accountants;
(b) Expenses of the Co-Adviser, transfer agent, registrar,
dividend disbursing agent and shareholder recordkeeping
services;
(c) Expenses of custodial services including recordkeeping
services provided by the custodian;
(d) Expenses of obtaining quotations for calculating the value
of the Portfolio's net assets;
(e) Salaries and other compensation of any of its executive
officers or employees, if any, who are not officers,
directors, stockholders or employees of the Investment
Adviser, the administrator or the distributor;
(f) Taxes levied against the Portfolio;
(g) Brokerage fees and commissions in connection with the
purchase and sale of portfolio securities for the
Portfolio;
(h) Costs, including the interest expense, of borrowing money;
(i) Costs and/or fees incident to Trustees and shareholder
meetings of the Trust and the Portfolio, the preparation
and mailings of prospectuses and reports of the Portfolio
to its existing shareholders, the filing of reports with
regulatory bodies, the maintenance of the Portfolio's
legal existence, and the registration of shares with
federal and state securities authorities;
(j) Legal fees in connection with the representation of the
Trust and/or Portfolio, including the legal fees related
to the registration and continued qualification of the
Portfolio's shares for sale;
(k) Costs of printing any share certificates representing
shares of the Portfolio;
(l) Fees and expenses of Trustees who are not affiliated
persons, as defined in the 1940 Act, of the Investment
Adviser, the Co-Adviser, the distributor or any of their
affiliates; and
<PAGE> 26
(m) Its pro rata portion of the fidelity bond required by
Section 17(g) of the 1940 Act, or of other insurance
premiums.
7. Activities and Affiliates of the Investment Adviser. The Trustees
acknowledge that Investment Adviser, or one or more of its affiliates, may have
investment responsibilities or render investment advice to or perform other
investment advisory services for other individuals or entities and that
Investment Adviser, its affiliates or any of its or their directors, officers,
agents or employees may buy, sell or trade in any securities for its or their
respective accounts (such individuals, entities and accounts hereinafter
referred to as Affiliated Accounts). Subject to the provisions of paragraph 2
hereof, the Trustees agree that the Investment Adviser or its affiliates may
give advice or exercise investment responsibility and take such other action
with respect to other Affiliated Accounts which may differ from the advice given
or the timing or nature of action taken with respect to the Portfolio, provided
that Investment Adviser acts in good faith and in accordance with applicable law
or as permitted by an exemption order issued by the SEC, and provided further,
that it is Investment Adviser's policy to allocate within its reasonable
discretion, investment opportunities to the Portfolio over a period of time on a
fair and equitable basis relative to the Affiliated Accounts, taking into
account the investment objectives and policies of the Portfolio and any specific
investment restrictions applicable thereto. The Trust acknowledges that one or
more of the Affiliated Accounts may at any time hold, acquire, increase,
decrease, dispose of or otherwise deal with positions in investments in which
the Portfolio may have an interest from time to time, whether in transactions
which involve the Portfolio or otherwise. The Investment Adviser shall not have
any obligation to acquire for the Portfolio a position in any investment which
any Affiliated Account may acquire, and the Portfolio shall have no first
refusal, coinvestment or other rights in respect of any investment, either for
the Portfolio or otherwise.
8. Compensation of the Investment Adviser. (a) For all services
provided to the Portfolio pursuant to this Agreement, the Trust shall pay the
Investment Adviser, and the Investment Adviser agrees to accept as full
compensation therefor, an investment advisory fee, payable as soon as
practicable after the last day of each month, calculated using an annual rate of
0.70% of the average daily net assets of the Portfolio for the first $50 million
of such assets, and 0.65% on average daily net assets of the Portfolio in excess
of $50 million (the "Annual Rate"). The monthly investment advisory fee to be
paid by the Trust to the Investment Adviser shall be determined as of the close
of business on the last business day of each month by multiplying one-twelfth of
the Annual Rate by the Average Portfolio Net Assets (hereinafter defined),
calculated monthly as of such day.
(b) For purposes of this paragraph 8, the "Average Portfolio Net
Assets" shall be calculated monthly as of the last business day of
each month and shall mean the sum of the net assets of the
Portfolio calculated each business day during the month divided by
the number of business days in the month (such net assets to be
determined as of the
<PAGE> 27
close of business each business day and computed in the manner set
forth in the Declaration of Trust of the Trust).
9. Proxies. The Trustees will vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Portfolio may be
invested from time to time, unless the Trustees delegate such right to the
Investment Adviser, at which time the Trustees shall provide DMC with a
certified resolution authorizing DMC to vote such proxies.
10. Liabilities of the Investment Adviser.
(a) The Investment Adviser will not be liable for any loss suffered
by the Portfolio or the Trust as the result of any error of
judgment or mistake of law in connection with its performance
of this Agreement; provided, however, that the Investment
Adviser shall be liable to the Portfolio and the Trust for any
loss resulting from (i) a breach of fiduciary duty with respect
to the receipt of compensation for services; (ii) willful
misfeasance, bad faith or gross negligence in, or reckless
disregard by the Investment Adviser of, the performance of its
obligations or duties under this Agreement; or (iii) any
material breach of any of its covenants contained in this
Agreement.
(b) No provision of this Agreement shall be construed to protect
any Trustee or officer of the Trust, or the Investment Adviser,
from liability in violation of Sections 17(h) and (i) of the
1940 Act.
11. Renewal, Amendment and Termination.
(a) This Agreement shall become effective on the date first written
above and shall remain in force for a period of two (2) years
from such date and from year to year thereafter but only so
long as such continuance is specifically approved at least
annually (i) by the vote of a majority of the Trustees who are
not interested persons of the Portfolio, the Co-Adviser or the
Investment Adviser, cast in person at a meeting called for the
purpose of voting on such approval and by a vote of the Board
of Trustees or (ii) by the vote of a majority of the
outstanding voting securities of the Portfolio. The aforesaid
provision that this Agreement may be continued "annually" shall
be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder.
(b) This Agreement may be amended at any time, but only by written
agreement between the Trust and the Investment Adviser, which
amendment is subject to the approval of the Trustees and, if
applicable, the shareholders of the Trust in the manner
required by the 1940 Act, subject to any applicable exemption
order of the SEC modifying the provisions of the 1940 Act with
respect to approval of amendments to this Agreement.
<PAGE> 28
(c) This Agreement:
(i) may at any time be terminated without the payment of any
penalty either by vote of the Trustees or by vote of a
majority of the outstanding voting securities of the
Portfolio, on sixty (60) days' written notice to the
Investment Adviser;
(ii) shall immediately terminate in the event of its
assignment; and
(iii) may be terminated by the Investment Adviser on sixty (60)
days' written notice to the Trust.
(d) As used in this Section 11, the terms "assignment", "interested
person" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the 1940 Act
and the rules and regulations thereunder, subject to any
applicable orders of exemption or other interpretations issued
by the SEC.
12. Books and Records. (a) The Trustees shall provide to the Investment
Adviser copies of the Trust's most recent prospectus, statement of additional
information, supplement, and post-effective amendment which relate to any class
of shares representing interests in the Portfolio.
(b) In compliance with the requirements of Rule 31a-3 of the rules
promulgated under the 1940 Act ("Rules"), the Investment Adviser hereby agrees
that all records which it maintains for the Trust are the property of the Trust
and further agrees to surrender promptly to the Trust any such records upon the
Trust's request. The Investment Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2, the records required to be maintained by the
Investment Adviser hereunder pursuant to Rule 31a-1 of the Rules.
13. Notices. All notices, requests, demands or other communications
hereunder shall be in writing and shall be deemed given, if delivered
personally, on the day delivered or if mailed, by certified or registered mail,
postage prepaid, return receipt requested, three (3) days after placement in the
United States mail, or national courier service (e.g. UPS, Fed Ex, Airborne
Express), upon actual receipt as documented by such courier, to the addresses
below:
If to Trust: First Funds
c/o Russell C. Burk, Esq., General Counsel
ALPS Mutual Fund Services, Inc.
370 17th Street, Suite 3100
Denver, Colorado 80202
<PAGE> 29
With a copy to:
Desiree Franklin, Esq.
Baker, Donelson, Bearman, Caldwell, P.C.
165 Madison Avenue, 21st Floor
Memphis, TN 38103
If to Investment Adviser: Delaware Management Company
Attn: Richard J. Flannery, Esq., General Counsel
One Commerce Square
Philadelphia, PA 19103
14. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
15. Limitation on Liability. Investment Adviser is hereby expressly put
on notice of the limitation of shareholder liability as set forth in the
Declaration of Trust and agrees that obligations assumed by the Portfolio
pursuant to this Agreement shall be limited in all cases to the Portfolio and
its assets. Investment Adviser agrees that it shall not seek satisfaction of any
such obligation from the shareholders or any individual shareholder of the
Portfolio, nor from the Trustees or any individual Trustee of the Portfolio.
16. Governing Law. To the extent that state law has not been preempted
by the provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws of the State of
Tennessee without giving effect to the choice of laws provisions thereof.
<PAGE> 30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, as of the day and year first written above.
FIRST FUNDS
By:
---------------------------------
Secretary
DELAWARE MANAGEMENT COMPANY
By:
---------------------------------
By:
---------------------------------
<PAGE> 31
EXHIBIT A
AMENDED AND RESTATED
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
THIS INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is made as of this
1st day of June, 2000, between FIRST FUNDS, a business trust organized under the
laws of the Commonwealth of Massachusetts (the "Trust"), on behalf of its
CAPITAL APPRECIATION PORTFOLIO (the "Portfolio") and First Tennessee Bank
National Association ("Bank").
WHEREAS, the Trust has been organized to operate as an investment
company registered under the Investment Company Act of 1940, as amended, (the
"1940 Act") with multiple series of shares (hereinafter referred to as Classes)
having varying preferences, limitations and relative rights, and to invest and
reinvest the assets of the Portfolio in securities pursuant to investment
objectives and policies for the Portfolio; and
WHEREAS, the Trust, under separate agreement (the "Investment Advisory
and Management Agreement"), has engaged the services of Delaware Management
Company as co-investment adviser to the Portfolio to provide day-to-day
investment management of the Portfolio's assets and securities, to conduct a
continuous program of investment of the Portfolio's assets, and to provide other
advisory services as outlined in the Investment Advisory and Management
Agreement (DMC hereinafter being referred to as "Investment Adviser" and Bank
hereinafter being referred to as "Co-Adviser"); and
WHEREAS, the Trust desires to obtain the services, information, advice,
assistance and facilities of an investment adviser and to have an investment
adviser provide or perform for it various investment advisory, monitoring,
statistical, research, investment adviser selection and counseling and other
services with respect to the Portfolio as set forth more fully herein, but
exclusive of day-to-day investment management services;
NOW, THEREFORE, the Trust, on behalf of the Portfolio, and Co-Adviser
agree as follows:
1. Employment of the Co-Adviser. The Trust hereby employs the
Co-Adviser to provide investment advisory services in the manner set forth in
Section 2A of this Agreement, subject to the direction of the Trustees, for the
period, in the manner, and on the terms hereinafter set forth. The Co-Adviser
hereby accepts such employment and agrees during such period to render the
services and to assume the obligations herein set forth. The Co-Adviser shall
for all purposes herein be deemed to be an independent contractor and shall,
except as expressly provided or authorized (whether herein or otherwise), have
no authority to act or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
<PAGE> 32
2. Obligations of, and Services to be Provided by, the Co-Adviser. The
Co-Adviser undertakes to provide the services hereinafter set forth and to
assume the following obligations:
A. Investment Advisory Services.
(a) The Co-Adviser will provide the Trust with research,
analyses and recommendations with respect to the investment
objective, guidelines for and risk characteristics of the
Portfolio.
(b) The Co-Adviser will monitor the investment and management
activities of the Investment Adviser relative to the
Portfolio, including, but not limited to, purchase and sale
transactions following settlement thereof, and report to the
Trustees on compliance by the Investment Adviser with the
investment objective and policies of the Portfolio, any
directions which the Trustees and officers of the Trust may
issue to the Investment Adviser from time to time and the
requirements of the 1940 Act and all applicable rules and
regulations of the Securities and Exchange Commission ("SEC")
with respect to the Portfolio. In performing its monitoring
services under this sub-section, the Co-Adviser may rely,
among other things, upon reports, data and information
furnished to it by the Investment Adviser, custodian or other
service providers to the Portfolio.
(c) The Co-Adviser will make recommendations with respect to
the engagement and termination of investment advisers and
sub-advisers for the Portfolio and provide research, analyses
and recommendations on qualified candidates to perform the
investment advisory and, if applicable, sub-advisory duties
and responsibilities for the day-to-day management of a
continuous investment program for the Portfolio and the
related functions to sustain that role.
(d) The Co-Adviser will perform or obtain research and
analysis on the investment performance of the Investment
Adviser, or other investment advisers or sub-advisers
(collectively, the "Advisers") with respect to the Portfolio
and comparisons of its absolute and relative performance to
relevant indices and investment universes.
(e) The Co-Adviser will determine and recommend allocation of
assets between multiple active Advisers at such time that the
assets of the Portfolio reach such size that multiple active
Advisers are warranted.
(f) The Co-Adviser may make presentations or reports on behalf
of the Investment Adviser, or other Advisers, at the request
of the Investment Adviser or such other
<PAGE> 33
Advisers in meetings and other settings where the presence of
a representative of any such investment adviser is needed or
requested but is unable to attend. Such meetings and settings
may include, but are not limited to, (i) Board of Trustee
meetings, (ii) meetings with broker-dealers, and (iii)
meetings with other channels of distribution. Such meetings
shall not include regulatory meetings.
(g) The Co-Adviser will coordinate its activities with the
Investment Adviser and the activities of the Investment
Adviser or other Advisers, with the Portfolio's transfer
agent, administrator, custodian and independent accountants.
B. Provision of Information Necessary for Preparation of
Securities Registration Statements, Amendments and Other
Materials.
The Co-Adviser will make available and provide such financial,
accounting, statistical and other information related to its
duties and responsibilities hereunder as required by the
Trustees and necessary for the preparation of registration
statements, reports and other documents required by federal
and state securities laws and such other information as the
Trustees may reasonably request for use by the Trust and its
distributor for the underwriting and distribution of the
Portfolio's shares.
C. Other Obligations and Services.
The Co-Adviser agrees to make available its officers and
employees to the Trustees and officers of the Trust for
consultation and discussions regarding the activities of the
Investment Adviser and the Co-Adviser's duties hereunder and
their activities with respect to the Portfolio.
3 . Covenants by Co-Adviser. The Co-Adviser covenants with the Trust
that, with respect to the services provided to the Portfolio, it:
(a) will comply with all applicable provisions of the 1940 Act
and applicable rules and regulations of the Securities and
Exchange Commission ("SEC") and will in addition conduct
its activities under this Agreement in accordance with the
Portfolio's current registration statement and applicable
regulations of the Office of the Comptroller of the
Currency pertaining to the investment advisory activities
of national banks which are applicable to the Co-Adviser;
(b) will not make loans to any person for the purpose of
purchasing or carrying Trust or Portfolio shares, or make
loans to the Trust or the Portfolio;
(c) will not purchase shares of the Trust or the Portfolio for
its own investment account;
<PAGE> 34
(d) will maintain all books and records with respect to its
duties set forth herein, and furnish the Trustees such
periodic and special reports as the Trustees may request
with respect to the Portfolio;
(e) will treat confidentially and as proprietary information
of the Trust all records and other information relative to
the Trust and the Portfolio and prior, present or
potential shareholders (other than any information which
Co-Adviser may have obtained about shareholders from other
business relationships with such shareholders), and will
not use such records and information for any purpose other
than performance of its responsibilities and duties
hereunder (except after prior notification to and approval
in writing by the Trust, which approval shall not be
unreasonably withheld and may not be withheld and will be
deemed granted where the Co-Adviser may be exposed to
civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly
constituted authorities, when so requested by the Trust or
when otherwise required or permitted by law);
(f) will, to the best of its knowledge and ability,
immediately notify the Trust of the occurrence of any
event which would disqualify Co-Adviser or the Investment
Adviser from serving as investment adviser of an
investment company; and
(g) will determine that all information furnished to the Trust
by the Co-Adviser pursuant to this Agreement is accurate
in all material respects.
4. Expenses of the Portfolio. The Portfolio or Trust will pay, or will
enter into arrangements that require third parties to pay, all expenses other
than those expressly assumed by the Co-Adviser herein, which expenses payable by
the Portfolio or Trust shall include:
(a) Expenses of all audits by independent public accountants;
(b) Expenses of Investment Adviser, transfer agent, registrar,
dividend disbursing agent and shareholder recordkeeping
services;
(c) Expenses of custodial services including recordkeeping
services provided by the custodian;
(d) Expenses of obtaining quotations for calculating the value
of the Portfolio's net assets;
(e) Salaries and other compensation of any of its executive
officers or employees,
<PAGE> 35
if any, who are not officers, directors, stockholders or
employees of the Investment Adviser, the Co-Adviser, the
Administrator or the Distributor;
(f) Taxes levied against the Portfolio;
(g) Brokerage fees and commissions in connection with the
purchase and sale of portfolio securities for the
Portfolio;
(h) Costs, including the interest expense, of borrowing money;
(i) Costs and/or fees incident to Trustees and shareholder
meetings of the Trust and the Portfolio, the preparation
and mailings of prospectuses and reports of the Portfolio
to its existing shareholders, the filing of reports with
regulatory bodies, the maintenance of the Portfolio's
legal existence, and the registration of shares with
federal and state securities authorities;
(j) Legal fees, including the legal fees related to the
registration and continued qualification of the
Portfolio's shares for sale;
(k) Costs of printing any share certificates representing
shares of the Portfolio;
(l) Fees and expenses of Trustees who are not affiliated
persons, as defined in the 1940 Act, of the Co-Adviser,
the Investment Adviser, the Distributor or any of their
affiliates; and
(m) Its pro rata portion of the fidelity bond required by
Section 17(g) of the 1940 Act, or of other insurance
premiums.
5. Activities and Affiliates of the Co-Adviser. The Trustees
acknowledge that the Co-Adviser , or one or more of its affiliates, may have
investment responsibilities or render investment advice to or perform other
investment advisory services for other individuals or entities and that the
Co-Adviser , its affiliates or any of its or their directors, officers, agents
or employees may buy, sell or trade in any securities for its or their
respective accounts (such individuals, entities and accounts hereinafter
referred to as "Affiliated Accounts"). Subject to the provisions of paragraph 2
hereof, the Trustees agree that the Co-Adviser or its affiliates may give advice
or exercise investment responsibility and take such other action with respect to
other Affiliated Accounts which may differ from the advice given or the timing
or nature of action taken with respect to the Portfolio, provided that the
Co-Adviser acts in good faith and in accordance with applicable law or as
permitted by an exemption order issued by the SEC, and provided further, that,
as applicable to the Portfolio, it is the Co-Adviser's policy to allocate within
its reasonable discretion, investment opportunities to the Portfolio over a
period of time on a fair and equitable basis relative to the Affiliated
Accounts, taking into account the investment objectives and policies of the
Portfolio and any specific investment
<PAGE> 36
restrictions applicable thereto. The Trust acknowledges that one or more of the
Affiliated Accounts may at any time hold, acquire, increase, decrease, dispose
of or otherwise deal with positions in investments in which the Portfolio may
have an interest from time to time, whether in transactions which involve the
Portfolio or otherwise. The Co-Adviser shall not have any obligation to acquire
for the Portfolio a position in any investment which any Affiliated Account may
acquire, and the Portfolio shall have no first refusal, coinvestment or other
rights in respect of any investment, either for the Portfolio or otherwise.
6. Compensation of the Co-Adviser.
(a) For all services provided to the Portfolio pursuant to this
Agreement, the Trust shall pay the Co-Adviser, and the Co-Adviser
agrees to accept as full compensation therefor, an investment
advisory fee, payable as soon as practicable after the last day of
each month, calculated using an annual rate of 0.15% of the average
daily net assets of the Portfolio (the "Annual Rate"). The monthly
investment advisory fee to be paid by the Trust to the Co-Adviser
shall be determined as of the close of business on the last business
day of each month by multiplying one-twelfth of the Annual Rate by
the Average Portfolio Net Assets (hereinafter defined), calculated
monthly as of such day.
(b) For purposes of this paragraph 6, the "Average Portfolio Net
Assets" shall be calculated monthly as of the last business day of
each month and shall mean the sum of the net assets of the Portfolio
calculated each business day during the month divided by the number
of business days in the month (such net assets to be determined as
of the close of business each business day and computed in the
manner set forth in the Declaration of Trust of the Trust).
7 . Proxies. The Trustees will vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Portfolio may be
invested from time to time, unless the Trustees delegate such right to the
Investment Adviser.
8. Liabilities of the Co-Adviser.
(a) The Co-Adviser will not be liable for any loss suffered by the
Portfolio or the Trust as the result of any error of judgment or
mistake of law in connection with its performance of this
Agreement; provided, however, that the Co-Adviser shall be liable
to the Portfolio and the Trust for any loss resulting from (i) a
breach of fiduciary duty with respect to the receipt of
compensation for services; (ii) willful misfeasance, bad faith or
gross negligence in, or reckless disregard by the Co-Adviser of,
the performance of its duties and obligations under this Agreement;
or (iii) any material breach of any of its covenants contained in
this Agreement.
<PAGE> 37
(b) No provision of this Agreement shall be construed to protect any
Trustee or officer of the Trust, or the Co-Adviser, from
liability in violation of Sections 17(h) and (i) of the 1940
Act.
9. Renewal, Amendment and Termination.
(a) This Agreement shall become effective on the date first written
above and shall remain in force for a period of two (2) years
from such date and from year to year thereafter but only so long
as such continuance is specifically approved at least annually
(i) by the vote of a majority of the Trustees who are not
interested persons of the Portfolio, the Investment Adviser or
the Co-Adviser, cast in person at a meeting called for the
purpose of voting on such approval and by a vote of the Board of
Trustees or (ii) by the vote of a majority of the outstanding
voting securities of the Portfolio. The aforesaid provision that
this Agreement may be continued "annually" shall be construed in
a manner consistent with the 1940 Act and the rules and
regulations thereunder.
(b) This Agreement may be amended at any time, but only by written
agreement between the Trust and the Co-Adviser, which amendment
is subject to the approval of the Trustees and the shareholders
of the Trust in the manner required by the 1940 Act, subject to
any applicable exemption order of the SEC modifying the
provisions of the 1940 Act with respect to approval of
amendments to this Agreement.
(c) This Agreement:
(i) may at any time be terminated without the payment of any
penalty either by vote of the Trustees or by vote of a
majority of the outstanding voting securities of the
Portfolio, on sixty (60) days' written notice to the
Co-Adviser;
(ii) shall immediately terminate in the event of its
assignment; and
(iii) may be terminated by the Co-Adviser on sixty (60) days'
written notice to the Trust.
(d) As used in this Section 9, the terms "assignment", "interested
person" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the 1940 Act
and the rules and regulations thereunder, subject to any
applicable orders of exemption issued by the SEC.
<PAGE> 38
10. Books and Records.
(a) The Trustees shall provide to the Co-Adviser copies of the
Trust's most recent prospectus and statement of additional
information (as each may be amended or supplemented from time to
time) which relate to any class of shares representing interests in
the Portfolio.
(b) In compliance with the requirements of Rule 3la-3 of the rules
promulgated under the 1940 Act ("Rules"), the Co-Adviser hereby
agrees that all records which it maintains for the Trust are the
property of the Trust and further agrees to surrender promptly to
the Trust any such records upon the Trust's request. The Co-Adviser
further agrees to preserve for the periods prescribed by Rule
3la-2, the records required to be maintained by the Co-Adviser
hereunder pursuant to Rule 3la-1 of the Rules.
11. Notices. All notices, requests, demands or other communications
hereunder shall be in writing and shall be deemed given, if delivered
personally, on the day delivered or if mailed, by certified or registered mail,
postage prepaid, return receipt requested, three (3) days after placement in the
United States mail, to the addresses below:
If to Trust: First Funds
c/o Russell C. Burk, Esq., General Counsel
ALPS Mutual Fund Services, Inc.
370 17th Street, Suite 3100
Denver, Colorado 80202
With a copy to: Desiree Franklin, Esq.
Baker, Donelson, Bearman, Caldwell, P.C.
165 Madison Avenue, 21st Floor
Memphis, TN 38103
If to Co-Adviser: C. Douglas Kelso, III
c/o: First Tennessee Bank National Association
4990 Poplar Avenue, Third Floor
Memphis, TN 38117
With a copy to: Adella Heard, Esq.
First Tennessee Bank National Corporation
165 Madison Avenue, Third Floor
Memphis, TN 38103
<PAGE> 39
12. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
13. Limitation on Liability. Co-Adviser is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Declaration of Trust and agrees that obligations assumed by the Portfolio
pursuant to this Agreement shall be limited in all cases to the Portfolio and
its assets. Co-Adviser agrees that it shall not seek satisfaction of any such
obligation from the shareholders or any individual shareholder of the Portfolio,
nor from the Trustees or any individual Trustee of the Portfolio.
14. Governing Law. To the extent that state law has not been preempted
by the provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws of the State of
Tennessee without giving effect to the choice of laws provisions thereof.
<PAGE> 40
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, as of the day and year first written above.
FIRST FUNDS
By:
----------------------------------------
Secretary
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By:
----------------------------------------
<PAGE> 41
FIRST FUNDS
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 Capital
Appreciation Portfolio (the "Portfolio") of First Funds ("First Funds"), to be
held at 10:00 a.m., local time, on May 17, 2000, at the principal offices of
First Funds, 370 Seventeenth Street, Suite 3100, Denver, Colorado, 80202, and at
any adjournment thereof.
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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 CAPITAL APPRECIATION PORTFOLIO:
Approval of proposed Investment FOR [ ] AGAINST [ ] ABSTAIN [ ]
Advisory Agreement between
First Funds on behalf of the Portfolio
and Delaware Management Company
[LABEL AFFIXED HERE]
ACCOUNT NUMBER: ___________
TOTAL PORTFOLIO SHARES VOTED BY THE UNDERSIGNED: ________
- --------------------------------------------------------------------------------
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
- ------------------------------------------
Signature If Jointly Held or Title If Required
