FIRST FINANCIAL FUND, INC.
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102-4077
July 22, 2002
To our Stockholders:
The Board of Directors of First Financial Fund, Inc., a Maryland
corporation (the "Fund"), recently sent you proxy materials and a subsequent
letter related to the Fund's Annual Meeting of Stockholders (the "Meeting") to
be held on August 12, 2002, strongly recommending the re-election of the
incumbents, Eugene C. Dorsey and Robert E. La Blanc, as Class I Directors of the
Fund. WE URGE YOU TO VOTE FOR THE INCUMBENTS BY SIGNING, DATING AND MAILING THE
ENCLOSED WHITE PROXY CARD IN THE POSTAGE-PAID RETURN ENVELOPE AS SOON AS
POSSIBLE.
We believe that re-electing the incumbents is in the best interests of all
Fund stockholders. Clearly, the incumbents are the best choice to promote the
Fund's continued excellence because:
o the incumbents have successfully overseen the Fund through both positive
and negative market cycles during their terms of service;
o the incumbents are independent of the Fund's investment adviser,
Wellington Management Company, LLP ("Wellington Management"), the Fund's
administrator, Prudential Investments LLC, and any large Fund
stockholders, including the group of family trusts advised by Stewart R.
Horejsi that owns approximately 39% of the Fund's shares (the "Horejsi
Group");
o the incumbents have significant experience with investment companies,
public companies and other business organizations, and are familiar with
the financial services sector;
o the incumbents' sole interest in the Fund is to oversee its operations for
the benefit of all Fund stockholders; and
o the incumbents have worked closely with Nicholas C. Adams, the Fund's
portfolio manager, and his team at Wellington Management, who have
achieved exceptional returns for the Fund by investing in accordance with
the Fund's unique and long-standing focus on small and mid-sized financial
institutions.
For these reasons, we are convinced that Messrs. Dorsey and La Blanc are the
best persons to serve as Class I Directors and strongly support their
re-election to the Board.
You may have recently received letters from the Horejsi Group advocating
the election of its nominees, Dean Jacobson and Joel Looney (the "Horejsi
candidates"). In short, we urge you not to support the Horejsi candidates and to
withhold your vote from them by disregarding the Horejsi Group's green proxy
card. IF YOU HAVE VOTED ON THE HOREJSI GROUP'S GREEN PROXY CARD, YOU MAY STILL
VOTE FOR THE INCUMBENTS BY SIGNING, DATING AND SENDING IN A WHITE PROXY CARD AT
THIS TIME, WHICH WILL CANCEL YOUR PREVIOUS VOTE.
The Horejsi Group has never informed the Board of Directors of a reason
for its desire to have a majority of its nominees on the Board, but we believe
the Group's actions towards two other closed-end funds it has taken control of
in recent years, Boulder Total Return Fund and Boulder Growth & Income Fund (the
"Boulder Funds"), may indicate the Group's plans. As with the Fund, the Horejsi
Group accumulated a large position in the Boulder Funds without disclosing any
specific intentions. With respect to each of the Boulder Funds, the Horejsi
Group then engaged in proxy battles, similar to the current one with the Fund,
which led to: 1) the election of a majority of the Group's nominees to the
Boulder Fund boards; 2) the appointment of the Group's affiliated adviser as
adviser to the Boulder Funds at a substantially higher cost to their
stockholders; and 3) the change of the Boulder Funds' basic investment
objectives and strategies.
Since the Horejsi Group has stated nothing to the Board or Fund
stockholders about its real intentions, we are concerned that its opposing proxy
solicitation is merely step one in its plan to make the Fund a third "Boulder
Fund." IF THE HOREJSI GROUP WERE TO FOLLOW ITS PATTERN, WE ARE CONCERNED THAT
THE LIKELY RESULT WOULD BE:
o THE REMOVAL OF WELLINGTON MANAGEMENT AND NICHOLAS ADAMS as the Fund's
investment adviser and portfolio manager and their replacement by advisers
and personnel that are affiliated with the Horejsi Group;
o A SIGNIFICANT INCREASE IN THE FUND'S ADVISORY FEE RATE (the Boulder Funds
currently pay fees to Horejsi Group affiliates at rates that are almost
double the rates paid to their previous investment advisers); and
o A CHANGE FROM THE FUND'S LONG-STANDING AND UNIQUE INVESTMENT OBJECTIVE AND
STRATEGIES of investing in small to mid-sized financial institutions.
We believe that the majority of Fund stockholders based their decision to
invest in the Fund on the Fund's investment adviser, its fee structure and its
unique investment strategy. We do not think the Horejsi candidates have the
independence or the experience to represent adequately all Fund stockholders and
to promote the continuance of the Fund's exceptional performance. We hope you
will agree with us that the incumbents are best suited to preserve the
distinctive and long-standing investment opportunity that the Fund has provided
to its stockholders for over 15 years. IF YOU CARE ABOUT MAINTAINING AN
INVESTMENT IN A FUND MANAGED BY WELLINGTON MANAGEMENT AND NICHOLAS ADAMS AND ARE
DEDICATED TO A UNIQUE LONG-TERM INVESTMENT STRATEGY, IT IS CRUCIAL THAT YOU VOTE
NOW FOR MESSRS. DORSEY AND LA BLANC ON THE WHITE PROXY CARD.
Once again, please sign, date, and return the enclosed WHITE proxy card in
the enclosed postage-paid return envelope. PLEASE DISREGARD ANY GREEN PROXY
CARDS YOU MAY RECEIVE FROM THE HOREJSI GROUP OR ITS SOLICITORS. IF YOU HAVE
ALREADY VOTED A GREEN PROXY CARD, YOU MAY STILL SUBMIT A WHITE PROXY CARD, WHICH
WOULD CANCEL YOUR VOTE ON THE GREEN PROXY CARD. Should you need another copy of
our proxy materials, or if you have any questions or need other assistance,
please call the Fund's proxy solicitor, Georgeson Shareholder Communications
Inc., toll free at (800) 530-2809.
Thank you for your time and consideration.
Sincerely,
/s/ Tom Mooney
Thomas T. Mooney
Chairman of the Board of Directors
First Financial Fund, Inc.