(File No. 811-04605)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] 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 Pursuant to ss.240.14a-12
FIRST FINANCIAL FUND, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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FIRST FINANCIAL FUND, INC.
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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To our Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders or any
adjournments thereof ("Meeting") of First Financial Fund, Inc. ("Fund") will be
held on August 12, 2002 at 10:30 a.m., at Gateway Center Three, 100 Mulberry
Street, Newark, New Jersey 07102-4077 for the following purposes:
(1) To elect two Class I Directors; and
(2) To consider and act upon any other business as may properly come before
the Meeting or any adjournments thereof.
Only holders of common stock of record at the close of business on May
22, 2002 are entitled to notice of and to vote at the Meeting.
By order of the Board of Directors,
/s/ Arthur J. Brown
-------------------
ARTHUR J. BROWN
SECRETARY
Dated: June 3, 2002
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YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN.
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
STOCKHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY STOCKHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED FORM OF PROXY, DATE AND SIGN IT, AND RETURN IT IN
THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.
TO AVOID THE ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK
YOUR COOPERATION IN VOTING YOUR PROXY PROMPTLY, NO MATTER HOW LARGE OR SMALL
YOUR HOLDINGS MAY BE.
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FIRST FINANCIAL FUND, INC.
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
AUGUST 12, 2002
INTRODUCTION
This Proxy Statement is furnished to the stockholders of First Financial
Fund, Inc. ("Fund") by the Board of Directors of the Fund in connection with the
solicitation of stockholder votes by proxy to be voted at the Annual Meeting of
Stockholders or any adjournments thereof ("Meeting") to be held on August 12,
2002 at 10:30 a.m. at Gateway Center Three, 100 Mulberry Street, Newark, New
Jersey 07102-4077. The matters to be acted upon at the Meeting are set forth in
the accompanying Notice of Annual Meeting.
If the enclosed form of proxy is executed properly and returned, shares
represented by it will be voted at the Meeting in accordance with the
instructions on the proxy. A proxy may nevertheless be revoked at any time prior
to its use by written notification received by the Fund, by the execution of a
subsequently dated proxy or by attending the Meeting and voting in person.
However, if no instructions are specified on a proxy, shares will be voted "FOR"
the election of each nominee for Director and "FOR" or "AGAINST" any other
matters acted upon at the Meeting in the discretion of the persons named as
proxies.
The close of business on May 22, 2002 has been fixed as the record date for
the determination of stockholders entitled to notice of and to vote at the
Meeting ("Record Date"). On that date, the Fund had 23,622,382 shares of common
stock outstanding and entitled to vote. Each share will be entitled to one vote
at the Meeting. It is expected that the Notice of Annual Meeting, Proxy
Statement and form of proxy first will be mailed to stockholders on or about
June 3, 2002.
The solicitation is made primarily by the mailing of this Proxy Statement
and the accompanying proxy. Supplementary solicitations may be made, without
cost to the Fund, by mail, telephone, telegraph or in person by regular
employees of Prudential Securities Incorporated ("Prudential Securities"), an
affiliate of Prudential Investments LLC, the Fund's administrator
("Administrator"). All expenses in connection with preparing this Proxy
Statement and its enclosures, and additional solicitation expenses including
reimbursement of brokerage firms and others for their expenses in forwarding
proxy solicitation material to the beneficial owners of shares, will be borne by
the Fund. In addition, the Fund may retain Georgeson Shareholder Communications
Inc., a proxy solicitation firm, at a cost of approximately $5,000 plus out of
pocket expenses, to solicit stockholders on behalf of the Fund.
The presence at the Meeting, in person or by proxy, of stockholders
entitled to cast a majority of the Fund's outstanding common stock is required
for a quorum. The affirmative vote of a majority of the Fund's outstanding
common stock is required to elect each Director. In the event that a quorum is
present at the Meeting but sufficient votes to approve a proposed item are not
received, the persons named as proxies may propose one or more adjourn-
1
ments of such Meeting to permit further solicitation of proxies. Any such
adjournments will require the affirmative vote of a majority of those shares
present at the Meeting or represented by proxy. In such case, the persons named
as proxies will vote those proxies which they are entitled to vote in favor of
such item "FOR" such an adjournment, and will vote those proxies required to be
voted against such item "AGAINST" such an adjournment. A stockholder vote may be
taken on the nominations in this Proxy Statement prior to any such adjournment
if sufficient votes have been received and it is otherwise appropriate.
Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and with respect to which the broker does not
have discretionary voting authority. Abstentions and broker non-votes will be
counted as shares present for purposes of determining whether a quorum is
present. Accordingly, abstentions and broker non-votes effectively will be a
vote against any adjournment, but will have no effect on the election of the
Directors because the required vote is a set percentage of the Fund's
outstanding common stock.
Except as set forth below, as of May 22, 2002, the Fund does not know of
any other person who owns beneficially or of record 5% or more of the
outstanding common stock of the Fund.
PERCENTAGE OF SHARES
STOCKHOLDER NUMBER OF SHARES OWNED* AS OF MAY 22, 2002*
----------- ----------------------- ---------------------
Ernest Horejsi Trust No. 1B** 1,795,100 7.6%
Lola Brown Trust No. 1B** 2,550,200 10.8%
Mildred B. Horejsi Trust** 1,922,400 8.1%
Stewart R. Horejsi Trust No. 2** 1,697,900 7.2%
Susan L. Ciciora Trust** 1,359,800 5.8%
John S. Horejsi Trust** 100 0.0004%
Badlands Trust Company** 1,359,900** 5.8%***
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* This information is based solely on Amendment #22 to a joint Schedule 13D
filed April 19, 2001 by these entities along with Stewart R. Horejsi,
reporting aggregate holdings of 9,325,500 of the Fund's outstanding shares
by these entities as of April 12, 2001 (which equals approximately 39.5% of
the Fund's outstanding shares as of the Record Date) and indicating that,
because of the relationships between Mr. Horejsi and the entities, Mr.
Horejsi may be deemed to share indirect beneficial ownership of such shares.
Due to these relationships, all of the entities and Mr. Horejsi could be
viewed as a group and will hereinafter be referred to as the "Horejsi
Group." Because some of the shares reported above may be deemed to be
beneficially owned by more than one entity within the Horejsi Group, the
aggregate number and percentage of shares owned are less than the sum total
shown for each individual owner. No subsequent amendment to the joint
Schedule 13D of the Horejsi Group had been received by the Fund through May
22, 2002.
** The address of each of these entities is c/o Badlands Trust Company, 614
Broadway, PO Box 801, Yankton, South Dakota 57078.
*** According to the joint Schedule 13D of the Horejsi Group, Badlands Trust
Company has shared voting and shared dispositive power over the shares held
by the Susan L. Ciciora Trust and the John S. Horejsi Trust (which both have
sole voting and sole dispositive power over such shares). Thus, Badlands
Trust Company may be considered the indirect beneficial owner of such
shares. All other shares reported in the table above are held directly with
sole voting and dispositive power by the entity indicated.
2
In addition, the Directors and officers of the Fund, in the aggregate,
owned less than 1% of the Fund's outstanding shares as of May 22, 2002.
STOCKHOLDERS MAY OBTAIN A FREE COPY OF THE FUND'S MOST RECENT ANNUAL REPORT
AND SEMI-ANNUAL REPORT BY CALLING EQUISERVE TRUST COMPANY, N.A., TOLL-FREE AT
(800) 451-6788 OR BY MAILING A WRITTEN REQUEST TO BFC C/O EQUISERVE TRUST
COMPANY, N.A., PO BOX 43011, PROVIDENCE, RHODE ISLAND 02940-3011.
ELECTION OF DIRECTORS
PROPOSAL
The Board of Directors is divided into three classes with members of each
class serving for a term of three years and until their successors are elected
and qualified. The classification of the Fund's Directors helps to promote the
continuity and stability of the Fund's management and policies because the
majority of the Directors at any given time will have prior experience as
Directors of the Fund. At least two stockholder meetings, instead of one, are
required to effect a change in a majority of the Directors, except in the event
of vacancies resulting from removal for cause or other reasons, in which case
the remaining Directors may fill the vacancies so created.
The term of each current Class I Director, Messrs. Dorsey and La Blanc,
expires in 2002, but each expressed his willingness to serve another term as
Director of the Fund if nominated by the Board of Directors. In addition to
these incumbents, a member of the Horejsi Group, Lola Brown Trust No. 1B,
notified the Fund of its intention to nominate Dr. Dean Jacobson and Mr. Joel W.
Looney (together, the "Horejsi candidates") for election as Directors at the
Fund's 2002 meeting of stockholders in a letter to the Fund dated March 26,
2002.
The Nominating Committee reviewed the qualifications, experience and
background of the incumbents and the Horejsi candidates and met in person with
each Horejsi candidate. Based upon this review, the Committee determined that
nominating the incumbents would be in the best interests of Fund stockholders.
The Board believes that the incumbents are better suited for service on the
Fund's Board due to their familiarity with the Fund as a result of their prior
service as Directors, their knowledge of the financial services sector, and
their substantial experience in serving as directors and officers of public
companies and business organizations, including other investment companies.
At a meeting on May 21, 2002, the Board of Directors received the
recommendation of the Nominating Committee. After discussion and consideration
of, among other things, the backgrounds of the incumbents and the Horejsi
candidates, the Board voted to nominate Messrs. Dorsey and La Blanc for election
as Class I Directors with a term expiring in 2005. As part of this decision, the
Board noted that last year it had accommodated the Horejsi Group by choosing as
the Board's nominee a candidate proposed by the Group, Mr. Barr, who now serves
as a Class III Director of the Fund. The Horejsi Group has formally preserved
its rights to nominate the Horejsi candidates at the Meeting. In addition, the
Horejsi Group has indicated to the Fund's Board its intention to conduct a proxy
solicitation to elect its candidates if they were not nominated by the Board.
It is the intention of the persons named in the enclosed form of proxy to
vote in favor of the election of Messrs. Dorsey and La Blanc as Directors.
Messrs. Dorsey and La Blanc each have consented to be named in this Proxy
Statement and to serve as Director if elected. The Board of Directors has no
reason to believe that Messrs. Dorsey and La Blanc will become unavailable for
election as Directors, but if that should occur before the Meeting, the proxies
will be voted for such other nominees as the Board of Directors may recommend.
None of the Directors is related to one another. The following tables set
forth certain information regarding each of the Directors of the Fund. Unless
otherwise noted, each of the Directors has engaged in the principal occupation
listed in the following table for five years or more.
3
INFORMATION REGARDING NOMINEES
FOR ELECTION AT 2002 ANNUAL MEETING
DOLLAR RANGE OF
NAME, AGE, POSITION WITH PRINCIPAL OCCUPATION FUND SHARES AS
FUND, TENURE, ADDRESS* DURING THE PAST FIVE YEARS OTHER DIRECTORSHIPS** OF MAY 22, 2002
------------------------ -------------------------- --------------------- ----------------
CLASS I (TERM EXPIRING IN 2005, IF ELECTED)
EUGENE C. DORSEY (75) Retired. Formerly President, Director or Trustee of 78 $1-$10,000
DIRECTOR SINCE 1996. Chief Executive Officer and portfolios within the
Trustee, Gannett Foundation Prudential Fund Complex;
(now Freedom Forum) (1981- Director of The High Yield
1989); former publisher of four Plus Fund, Inc.
Gannett newspapers and Vice
President of Gannett Co., Inc.
(1978-1981); former Chairman,
Independent Sector, Washington,
D.C. (national coalition of
philanthropic organizations)
(1989-1992); former Chairman of
the American Council for the
Arts; and former Director,
Advisory Board of Chase
Manhattan Bank of Rochester.
ROBERT E. LA BLANC (68) President of Robert E. Director or Trustee of 74 $10,001-$50,000
DIRECTOR SINCE 1999. La Blanc Associates, Inc. portfolios within the
(information technologies Prudential Fund Complex;
consulting) (since 1981); Director of The High Yield
formerly Vice Chairman of Plus Fund, Inc., Salient 3
Continental Telecom, Inc. Communications, Inc.
(1979-1981); formerly General (telecommunications), Storage
Partner at Salomon Brothers Technology Corp. (computer
(1969-1979); and Trustee of equipment), Titan Corp.
Manhattan College. (electronics), and Chartered
Semiconductor Manufacturing,
Ltd. (semiconductors).
4
INFORMATION REGARDING DIRECTORS
WHOSE CURRENT TERMS CONTINUE
DOLLAR RANGE OF
NAME, AGE, POSITION WITH PRINCIPAL OCCUPATION FUND SHARES AS
FUND, TENURE, ADDRESS* DURING THE PAST FIVE YEARS OTHER DIRECTORSHIPS** OF MAY 22, 2002
------------------------ -------------------------- --------------------- ----------------
CLASS II (TERM EXPIRING IN 2003)
CLAY T. WHITEHEAD (63) President of National Director or Trustee of 91 $10,000-$50,000
DIRECTOR SINCE 2000. Exchange Inc. (new business portfolios within the
development firm) Prudential Fund Complex;
(since May 1983). Director of The High Yield
Plus Fund, Inc. and GTC
Telecom, Inc.
(telecommunications).
THOMAS T. MOONEY (60)*** President of the Greater Director or Trustee of 95 $10,001-$50,000
DIRECTOR SINCE 1986. Rochester Metro Chamber of portfolios within the
ALSO CHAIRMAN OF THE BOARD, Commerce (since 1976); Prudential Fund Complex;
PRESIDENT AND TREASURER. Trustee of Center for President, Director and
Governmental Research, Inc. Treasurer of The High Yield
(volunteer consulting); Plus Fund, Inc.
Director of Blue Cross of
Rochester, Executive Service
Corps of Rochester, Monroe
County Water Authority,
and Rural/Metro Medical
Services, Inc. (ambulance
service); and former
Rochester City Manager
(during 1973).
5
DOLLAR RANGE OF
NAME, AGE, POSITION WITH PRINCIPAL OCCUPATION FUND SHARES AS
FUND, TENURE, ADDRESS* DURING THE PAST FIVE YEARS OTHER DIRECTORSHIPS** OF MAY 22, 2002
------------------------ -------------------------- --------------------- ----------------
CLASS III (TERM EXPIRING IN 2004)
RICHARD I. BARR (65) Formerly President and Director of Boulder Total $1-$10,000
DIRECTOR SINCE 2001. Director of Advantage Sales Return Fund, Inc. (since
and Marketing (1997-1999); 1999) and Boulder Growth &
formerly President and Chief Income Fund, Inc.,
Executive Officer of CBS (since 2002).
Marketing (1976-1997); former
President, Arizona Food Brokers
Association (1996); former
Director, Association of Sales
and Marketing Companies
(formerly National Food Brokers
Association) (1992-1998); former
Director, St. Mary's Food Bank
(1990-1996), and currently
advisory board member of Kansas
University Business School and
Arizona State University.
-----------------
* The address for each Director is c/o the Fund, Gateway Center Three, 100
Mulberry Street, Newark, New Jersey 07102-4077.
** Each current Director of the Fund, except for Mr. Barr, oversees four other
portfolios within the Fund's "Fund Complex." The Fund's Fund Complex
consists of a group of investment companies and series of investment
companies that are advised or sub-advised by Wellington Management Company,
LLP, the Fund's investment adviser ("Investment Adviser").
*** Indicates an "interested person" of the Fund, as defined in the Investment
Company Act of 1940, as amended ("1940 Act"). Mr. Mooney is deemed to be an
"interested person" solely by reason of his service as an officer of the
Fund.
6
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, as amended
("1934 Act"), Section 30(f) of the 1940 Act and Securities and Exchange
Commission ("SEC") regulations thereunder, the Fund's officers and Directors,
persons owning more than 10% of the Fund's common stock and certain officers and
partners of the Investment Adviser are required to report their transactions in
the Fund's common stock to the SEC, the New York Stock Exchange and the Fund.
Based solely on the Fund's review of the copies of such reports received by it,
the Fund believes that, during its fiscal year ended March 31, 2002, all filing
requirements applicable to such persons were met.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors met four times during the Fund's fiscal year ended
March 31, 2002, and each Director attended at least 75% of the total number of
meetings of the Board and of any committee of which he was a member during that
year. The Board of Directors has an Audit Committee and a Nominating Committee.
The Audit Committee acts pursuant to a written charter adopted by the Board
of Directors and is responsible for overseeing the Fund's accounting and
financial reporting policies, practices and internal controls. The Audit
Committee currently consists of Messrs. Dorsey, La Blanc and Whitehead, all of
whom are independent as defined in Section 303.01 of the listing standards of
the New York Stock Exchange. The Audit Committee's duties are: (a) to review the
financial and accounting policies of the Fund, including internal accounting
control procedures, and to review reports prepared by the Fund's independent
accountants; (b) to review and recommend approval or disapproval of audit
services and the fees charged for the services; (c) to evaluate the independence
of the independent accountants and to recommend whether to retain the
independent accountants for the next fiscal year; and (d) to report to the Board
of Directors and make such recommendations as it deems necessary. The Audit
Committee met twice during the fiscal year ended March 31, 2002. Each member of
the Committee attended those meetings. In addition, the Committee met on May 21,
2002 to review the Fund's audited financial statements. All members of the
Committee attended that meeting. Attached as Appendix A is a copy of the Audit
Committee's Report with respect to the Fund's audited financial statements.
The Nominating Committee's primary responsibility is to recommend nominees
for election as Fund Director to the full Board of Directors. The Nominating
Committee currently consists of Messrs. Dorsey, La Blanc and Whitehead. The
Nominating Committee met once during the fiscal year ended March 31, 2002. The
Committee also met on May 20, 2002 to consider the nominees for Director for the
Fund's 2002 stockholder meeting. The Committee will consider nominees
recommended by stockholders if such proposed nominations are submitted to the
Fund in writing. Formal nominations by stockholders must be made in accordance
with the Fund's By-Laws.
The Board of Directors does not have a standing compensation committee.
If elected, it is expected that Messrs. Dorsey and La Blanc will continue
to serve on the Fund's Audit Committee and Nominating Committee.
7
EXECUTIVE OFFICERS OF THE FUND
The officers of the Fund are elected annually by the Board of Directors at
its regular meeting immediately following the annual meeting of stockholders.
The officers of the Fund, other than Mr. Mooney who also serves as a Director,
are:
NAME, AGE, POSITION WITH PRINCIPAL OCCUPATION DURING THE
FUND, TENURE, ADDRESS PAST FIVE YEARS
------------------------ --------------------------------
ARTHUR J. BROWN (53) Partner, Kirkpatrick & Lockhart LLP
SECRETARY SINCE 1986. (law firm and counsel to the Fund).
1800 Massachusetts Avenue, NW
Washington, D.C. 20036
R. CHARLES MILLER (44) Partner, Kirkpatrick & Lockhart LLP.
ASSISTANT SECRETARY SINCE 1999.
1800 Massachusetts Avenue, NW
Washington, D.C. 20036
COMPENSATION OF DIRECTORS
The Fund currently pays each Director an annual fee of $5,000, plus travel
and other out-of-pocket expenses incurred by the Directors in attending Board
meetings. Effective April 1, 2002, Directors also receive $500 for each
committee meeting they attend held on the same day as a Board meeting, $500 for
each telephonic Board or committee meeting they attend and $1,000 for each
in-person special Board or committee meeting they attend. Due to his additional
duties as Chairman of the Board, Mr. Mooney receives an additional annual fee of
$4,000 from the Fund. The table below includes certain information relating to
the compensation of the Fund's Directors paid by the Fund for the fiscal year
ended March 31, 2002, as well as information regarding compensation from the
Fund's Fund Complex for the year ended December 31, 2001. Annual Board fees may
be reviewed periodically and changed by the Fund's Board.
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COMPENSATION TABLE
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Pension or Total
Retirement Compensation
Benefits Estimated From the
Accrued as Annual Fund and
Aggregate Part of the Benefits the Fund
Compensation Fund's Upon Complex Paid
Name of Director From the Fund Expenses Retirement to Directors
------------------------------------------------------------------------------------------------------------
Eugene C. Dorsey* $4,442 N/A N/A $11,928(6)**
------------------------------------------------------------------------------------------------------------
Robert E. LaBlanc $4,346 N/A N/A $11,303(6)**
------------------------------------------------------------------------------------------------------------
Thomas T. Mooney $8,154 N/A N/A $18,423(6)**
------------------------------------------------------------------------------------------------------------
Clay T. Whitehead $4,250 N/A N/A $10,675(6)**
------------------------------------------------------------------------------------------------------------
Richard I. Barr*** $1,928 N/A N/A $1,928(1)**
------------------------------------------------------------------------------------------------------------
--------------
* All compensation from the Fund and Fund Complex for the calendar year ended
December 31, 2001 represents deferred compensation. Mr. Dorsey received
aggregate compensation for that period from the Fund and the Fund Complex,
including accrued interest, in the amounts of $4,492 and $12,060,
respectively.
** Parenthetical indicates number of funds (including the Fund) in the Fund
Complex to which aggregate compensation relates.
*** Mr. Barr began receiving payment for his service as Director of the Fund on
October 1, 2001.
8
EACH NOMINEE FOR DIRECTOR MUST BE ELECTED BY A VOTE OF A MAJORITY OF THE
OUTSTANDING COMMON STOCK OF THE FUND.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" THE NOMINEES.
INFORMATION ON THE FUND'S INDEPENDENT ACCOUNTANTS
The Fund's financial statements for the fiscal year ended March 31, 2002
were audited by PricewaterhouseCoopers LLP ("PwC"). In the opinion of the Audit
Committee, the services provided by PwC are compatible with maintaining the
independence of the Fund's accountants. The Board of Directors of the Fund has
selected PwC as the independent accountants for the Fund for the fiscal year
ending March 31, 2003. PwC has been the Fund's independent accountants since
February 18, 1997. PwC has informed the Fund that it has no material direct or
indirect financial interest in the Fund.
Representatives of PwC are not expected to be present at the Meeting but
have been given the opportunity to make a statement if they so desire and will
be available should any matter arise requiring their presence.
AUDIT FEES
The aggregate fees billed by PwC for professional services rendered for the
audit of the Fund's annual financial statements for the fiscal year ended March
31, 2002 and the review of the financial statements included in the Fund's
annual report to stockholders were $26,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
PwC billed no fees for professional services rendered to the Fund for
information technology services relating to financial information systems design
and implementation for the Fund's fiscal year ended March 31, 2002. Similarly,
PwC billed no fees for professional services rendered to the Fund's Investment
Adviser for information technology services relating to financial information
systems design and implementation during the same period.
ALL OTHER FEES
There were no fees billed by PwC for the fiscal year ended March 31, 2002
for other services provided to the Fund and approximately $500,000 in fees
billed by PwC during the same period for other services provided to the
Investment Adviser.
OTHER MATTERS
No business, other than as set forth above, is expected to come before the
Meeting. Should any other matters requiring a vote of stockholders properly come
before the Meeting, the persons named in the enclosed proxy will vote thereon in
accordance with their best judgment in the interests of the Fund.
WELLINGTON MANAGEMENT COMPANY, LLP
Wellington Management Company, LLP, 75 State Street, Boston, Massachusetts
02109, is the Fund's Investment Adviser. The Investment Adviser is a
Massachusetts limited liability partnership of which the following persons are
managing partners: Laurie Gabriel, Duncan M. McFarland and John R. Ryan. The
Investment Adviser is a professional investment-counseling firm that provides
investment services to investment companies, employee benefit plans, endowment
funds, foundations and other institutions and individuals. As of March 31, 2002,
the Investment Adviser held discretionary investment authority over
approximately $320 billion of assets. The Investment Adviser and its predecessor
organizations have provided investment advisory services to invest-
9
ment companies since 1933 and to investment-counseling clients since 1960. The
Investment Adviser is not affiliated with the Administrator, Prudential
Investments LLC, which is located at Gateway Center Three, 100 Mulberry Street,
Newark, New Jersey 07102-4077.
STOCKHOLDER PROPOSALS
The Fund's By-Laws require stockholders wishing to nominate Directors or
make proposals to be voted on at the Fund's annual meeting to provide notice to
the Secretary of the Fund at least 90 days in advance of the anniversary of the
date that the Fund's Proxy Statement for its previous year's annual meeting was
first released to stockholders. Accordingly, if a stockholder intends to present
a proposal at the Fund's annual meeting of stockholders in 2003 and desires to
have the proposal included in the Fund's Proxy Statement and form of proxy for
that meeting, the stockholder must deliver the proposal to the offices of the
Fund at Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077
by March 5, 2003. The notice must contain information sufficient to identify the
nominee(s) or proposal and to establish that the stockholder beneficially owns
shares that would be entitled to vote on the nomination or proposal. Stockholder
nominations and proposals that are submitted in a timely manner will not
necessarily be included in the Fund's proxy materials. Inclusion of such
nomination or proposal is subject to limitation under the federal securities
laws. Stockholder nominations or proposals not received by March 5, 2003 will
not be considered "timely" within the meaning of Rule 14a-4(c) of the 1934 Act.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING
TRUSTEES AND THEIR NOMINEES
Please advise the Fund, at Gateway Center Three, 100 Mulberry Street,
Newark, New Jersey 07102-4077, whether other persons are beneficial owners of
shares for which proxies are being solicited and, if so, the number of copies of
the Proxy Statement you wish to receive in order to supply copies to such
beneficial owners of shares.
By order of the Board of Directors,
/s/ Arthur J. Brown
-------------------
ARTHUR J. BROWN
SECRETARY
Dated: June 3, 2002
10
APPENDIX A
AUDIT COMMITTEE REPORT
FIRST FINANCIAL FUND, INC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee of the Board of Directors of the First Financial Fund,
Inc. (the "Fund") met on May 21, 2002 to review the Fund's audited financial
statements for the fiscal year ended March 31, 2002. The Audit Committee
operates pursuant to a Charter dated May 24, 2000, which sets forth the roles of
the Fund's management, independent accountants, the Board of Directors and the
Audit Committee in the Fund's financial reporting process. Pursuant to the
Charter, the Fund's management is responsible for the preparation, presentation
and integrity of the Fund's financial statements, and for the procedures
designed to assure compliance with accounting standards and applicable laws and
regulations. The independent accountants for the Fund are responsible for
planning and carrying out proper audits and reviews. The role of the Audit
Committee is to assist the Board of Directors in its oversight of the financial
reporting process by, among other things, reviewing the scope and results of the
Fund's annual audit with the Fund's independent accountants and recommending the
initial and ongoing engagement of such accountants.
In performing this oversight function, the Audit Committee has reviewed and
discussed the audited financial statements with the Fund's management and its
independent accountants, PricewaterhouseCoopers LLP ("PwC"). The Audit Committee
has discussed with PwC the matters required to be discussed by Statement on
Auditing Standards No. 61 and has received the written disclosures and the
letter from PwC required by Independence Standards Board Standard No. 1. The
Audit Committee also has discussed the independence of PwC with PwC.
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting, are not experts in the fields of auditing or
accounting and are not employed by the Fund for accounting, financial management
or internal control purposes. Members of the Audit Committee rely without
independent verification on the information provided and the representations
made to them by management and PwC. Accordingly, the Audit Committee's oversight
does not provide an independent basis to determine that management has
maintained appropriate accounting and financial reporting principles and
policies or appropriate internal controls and procedures designed to ensure
compliance with accounting standards and applicable laws and regulations.
Furthermore, the Audit Committee's considerations and discussions referred to
above do not guarantee that the audit of the Fund's financial statements has
been carried out in accordance with generally accepted accounting principles or
that PwC is in fact "independent."
Based upon this review and related discussions, and subject to the
limitation on the role and responsibilities of the Audit Committee set forth
above and in the Charter, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the Fund's Annual
Report to Stockholders for the fiscal year ended March 31, 2002.
This report has been approved by all of the members of the Audit Committee
(whose names are listed below), each of whom has been determined to be
independent pursuant to New York Stock Exchange Rule 303.01.
Eugene C. Dorsey
Robert E. La Blanc
Clay T. Whitehead
May 21, 2002
A-1
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FIRST FINANCIAL FUND, INC.
FIRST
FINANCIAL
FUND, INC.
-----------------------------------------
PROXY
STATEMENT NOTICE OF
ANNUAL MEETING
TO BE HELD ON
AUGUST 12, 2002
AND
PROXY STATEMENT
PROXY
FIRST FINANCIAL FUND, INC.
GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Marguerite E.H. Morrison and Arthur J. Brown as
proxies, each with the power of substitution, and hereby authorizes each of them
to represent and to vote, as designated on the reverse side of this card, all
the shares of common stock of First Financial Fund, Inc. (the "Fund") held of
record as of the close of business on May 22, 2002 at the Annual Meeting of
Stockholders to be held on August 12, 2002, or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR"
THE NOMINEE PRINTED ON THE REVERSE SIDE OF THIS CARD.
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PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
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Please sign exactly as your name appears hereon. Joint owners should each sign.
When signing as executor, administrator, attorney, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name by
president or other authorized officer, giving full title. If a partnership,
please sign in partnership name by an authorized person, giving full title.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
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Please mark
[X] votes as in
this example.
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FIRST FINANCIAL FUND, INC.
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING NOMINEES:
1. Election of Directors.
CLASS I NOMINEES: (01) Robert E. La Blanc
(02) Eugene C. Dorsey
FOR WITHHELD
ALL [_] [_] FROM ALL
NOMINEES NOMINEES
[_]
--------------------------------------
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. To consider and act upon such other business [_] [_] [_]
as may properly come before the meeting and
any adjournments thereof.
Mark box at right if an address change or comment has been [_]
noted on the reverse side of this card.
Please be sure to sign and date this Proxy.
Signature: Date: Signature: Date:
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